<PAGE>
                                                                   Exhibit 10.17

 
                                   EXECUTION

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------



                                LOAN AGREEMENT


                           Dated as of March 3, 1999


                                     among


                      THE MOHEGAN TRIBAL GAMING AUTHORITY

                             (as the "Borrower"),

                 THE MOHEGAN TRIBE OF INDIANS OF CONNECTICUT,

         (the "Tribe" as an additional obligor with respect to certain
                  representations, warranties and covenants)

      the Lenders, Syndication Agent and Documentation Agent herein named

                                      and


            BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION


                            as Administrative Agent


                    NATIONSBANC MONTGOMERY SECURITIES, LLC,
                    as Lead Arranger and Sole Book Manager

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
 
<TABLE> 
<CAPTION> 

                               TABLE OF CONTENTS
                               -----------------

                                                                                    Page
<S>                                                                                   <C> 
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS .........................................  1
                                                                                        
   1.1     Defined Terms ............................................................  1
   1.2     Use of Defined Terms ..................................................... 28
   1.3     Accounting Terms ......................................................... 28
   1.4     Rounding ................................................................. 28
   1.5     Exhibits and Schedules ................................................... 29
   1.6     Miscellaneous Terms ...................................................... 29
                                                                                        
ARTICLE 2. LOANS AND LETTERS OF CREDIT .............................................. 30
                                                                                        
   2.1     Loans-General ............................................................ 30
   2.2     Base Rate Loans .......................................................... 31
   2.3     LIBOR Loans .............................................................. 31
   2.4     Letters of Credit ........................................................ 32
   2.5     Automatic Reduction of Commitment ........................................ 35
   2.6     Voluntary Reduction of Commitment ........................................ 36
   2.7     Optional Increases to the Commitment ..................................... 36
   2.8     Administrative Agent's Right to Assume Funds Available for Advances ...... 37
   2.9     Collateral ............................................................... 38
                                                                                        
ARTICLE 3. PAYMENTS AND FEES ........................................................ 39
                                                                                        
   3.1     Principal and Interest ................................................... 39
   3.2     Arrangement Fees ......................................................... 40
   3.3     Annual Agency Fees ....................................................... 40
   3.4     Facility Fees ............................................................ 40
   3.5     Commitment Fees .......................................................... 40
   3.6     Letter of Credit Fees .................................................... 41
   3.7     Increased Commitment Costs ............................................... 41
   3.8     LIBOR Fees and Costs ..................................................... 41
   3.9     Default Rate ............................................................. 44
   3.10    Computation of Interest and Fees ......................................... 44
   3.11    Non-Business Days ........................................................ 44
   3.12    Manner and Treatment of Payments ......................................... 45
   3.13    Funding Sources .......................................................... 45
   3.14    Failure to Charge Not Subsequent Waiver .................................. 45
   3.15    Administrative Agent's Right to Assume Payments Will be                      
           Made by Borrower ......................................................... 45
   3.16    Authority to Charge Account .............................................. 46
</TABLE> 

                                      -i-
<PAGE>
 
<TABLE> 
<CAPTION> 

<S>                                                                              <C> 
   3.17    Fee Determination Detail ............................................ 46
   3.18    Survivability ....................................................... 46
   3.19    Withholding Gross-Up ................................................ 46

ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE TRIBE ......................... 48

   4.1     Existence and Qualification; Power; Compliance With Laws ............ 48
   4.2     Authority; Compliance With Other Agreements and Instruments and
           Government Regulations .............................................. 48
   4.3     No Governmental Approvals Required .................................. 49
   4.4     The Nature of Borrower .............................................. 49
   4.5     No Management Contract .............................................. 50
   4.6     Title to and Location of Property ................................... 50
   4.7     Real Property ....................................................... 50
   4.8     Governmental Regulation ............................................. 50
   4.9     Binding Obligations ................................................. 50
   4.10    No Default .......................................................... 50
   4.11    Disclosure .......................................................... 51
   4.12    Gaming Laws ......................................................... 51
   4.13    Security Interests .................................................. 51
   4.14    Arbitration ......................................................... 51
   4.15    Recourse Obligations ................................................ 51

ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF THE BORROWER ...................... 52

   5.1     Existence and Qualification; Power; Compliance With Laws ............ 52
   5.2     Authority; Compliance With Other Agreements and Instruments and
           Government Regulations .............................................. 52
   5.3     No Governmental Approvals Required .................................. 53
   5.4     The Nature of Borrower .............................................. 53
   5.5     No Management Contract .............................................. 54
   5.6     Financial Statements ................................................ 54
   5.7     Financial Statements of Borrower .................................... 54
   5.8     No Other Liabilities; No Material Adverse Effect .................... 54
   5.9     Title to and Location of Property ................................... 54
   5.10    Real Property ....................................................... 54
   5.11    Intangible Assets ................................................... 55
   5.12    Governmental Regulation ............................................. 55
   5.13    Litigation .......................................................... 55
   5.14    Binding Obligations ................................................. 55
   5.15    No Default .......................................................... 56
   5.16    ERISA ............................................................... 56
   5.17    Regulations T, U and X; Investment Company Act ...................... 56
   5.18    Disclosure .......................................................... 56
</TABLE> 
                                     -ii-
<PAGE>
 
   5.19   Tax Liability ...................................... 56
   5.20   Projections ........................................ 56
   5.21   Employee Matters ................................... 57
   5.22   Gaming Laws ........................................ 57
   5.23   Security Interests ................................. 57
   5.24   Hazardous Materials ................................ 57
   5.25   Arbitration ........................................ 57
   5.26   Deposit Accounts ................................... 57

ARTICLE 6 AFFIRMATIVE COVENANTS OF BORROWER (OTHER THAN
          INFORMATION AND REPORTING REQUIREMENTS) ............ 58

   6.1    Payment of Taxes and Other Potential Liens ......... 58
   6.2    Maintenance of Properties .......................... 58
   6.3    Maintenance of Insurance ........................... 58
   6.4    Compliance With Laws ............................... 59
   6.5    Preservation of Licenses and Permits ............... 59
   6.6    Inspection Rights 59
   6.7    Keeping of Records and Books of Account ............ 60
   6.8    Compliance With Agreements ......................... 60
   6.9    Use of Proceeds .................................... 60
   6.10   Hazardous Materials Laws ........................... 60
   6.11   Deposit and Brokerage Accounts ..................... 61
   6.12   Proposed Expansion ................................. 61
   6.13   Year 2000 Compliance ............................... 61

ARTICLE 7 NEGATIVE COVENANTS OF BORROWER (OTHER THAN
          INFORMATION AND REPORTING REQUIREMENTS) ............ 62

   7.1    Payment of Subordinated Obligations ................ 62
   7.2    Disposition of Property ............................ 62
   7.3    Investments and Acquisitions ....................... 62
   7.4    Hostile Tender Offers .............................. 63
   7.5    Distributions ...................................... 63
   7.6    ERISA .............................................. 64
   7.7    Business of Borrower ............................... 64
   7.8    Liens; Negative Pledges; Sales and Leasebacks ...... 64
   7.9    Indebtedness and Contingent Obligations ............ 65
   7.10   Transactions with Affiliates ....................... 65
   7.11   Authority Expenditures ............................. 66
   7.12   Total Leverage Ratio ............................... 66
   7.13   Senior Leverage Ratio .............................. 66
   7.14   Fixed Charge Coverage Ratio ........................ 67
   7.15   Capital Expenditures ............................... 67


                                     -iii-
<PAGE>
 
<TABLE> 
<CAPTION> 
<S>                                                                              <C> 
    7.16    Deposit Accounts ................................................... 68

ARTICLE 8.  INFORMATION AND REPORTING REQUIREMENTS ............................. 69

    8.1     Financial and Business Information ................................. 69
    8.2     Compliance Certificates ............................................ 71

ARTICLE 9.  COVENANTS OF THE TRIBE ............................................. 72

    9.1     Continual Operation of Mohegan Sun ................................. 72
    9.2     Remittance of Available Cash Flow .................................. 72
    9.3     Sovereign Immunity; Jurisdiction and Venue ......................... 72
    9.4     The Landlord Consent ............................................... 72
    9.5     Preservation of Existence; Operation ............................... 72
    9.6     Ownership of Mohegan Sun; Management ............................... 73
    9.7     Prohibited Transactions ............................................ 73
    9.8     Amendments to Certain Documents .................................... 73
    9.9     Impairment of Contracts; Imposition of Governmental Charges ........ 74
    9.10    Segregation of Authority Assets .................................... 74
    9.11    Trust Property ..................................................... 74
    9.12    Liens on Authority Property ........................................ 74
    9.13    Bankruptcy Matters; Etc ............................................ 75
    9.14    Impairment of Contracts ............................................ 75

ARTICLE 10. CONDITIONS ......................................................... 76

   10.1     Closing ............................................................ 76
   10.2     Initial Advances ................................................... 78
   10.3     Any Increasing Advance ............................................. 79

ARTICLE 11. EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT ............... 81

   11.1     Events of Default .................................................. 81
   11.2     Remedies Upon Event of Default ..................................... 84

ARTICLE 12. THE ADMINISTRATIVE AGENT ........................................... 87

   12.1     Appointment and Authorization ...................................... 87
   12.2     Business Activities with the Tribe and Borrower .................... 87
   12.3     Proportionate Interest of the Lenders in any Collateral ............ 87
   12.4     Lenders' Credit Decisions .......................................... 88
   12.5     Action by Administrative Agent ..................................... 88
   12.6     Liability of Administrative Agent .................................. 89
   12.7     Indemnification .................................................... 90
</TABLE> 

                                     -iv-
<PAGE>
 
   12.8     Successor Administrative Agent .............................. 90
   12.9     Performance of Conditions ................................... 91
   12.10    Collateral Matters .......................................... 91
   12.11    No Obligations of Borrower or the Tribe ..................... 92

ARTICLE 13. MISCELLANEOUS ............................................... 93

   13.1     Cumulative Remedies; No Waiver .............................. 93
   13.2     Amendments; Consents ........................................ 93
   13.3     Costs, Expenses and Taxes ................................... 94
   13.4     Nature of the Lenders' Obligations .......................... 94
   13.5     Survival of Representations and Warranties .................. 95
   13.6     Notices ..................................................... 95
   13.7     Execution of Loan Documents ................................. 95
   13.8     Binding Effect; Assignment .................................. 95
   13.9     Lien on Deposits and Property in Possession of any Lender ... 98
   13.10          Sharing of Setoffs .................................... 98
   13.11          Indemnity by Borrower ................................. 99
   13.12    Nonliability of the Lenders ................................ 100
   13.13          No Third Parties Benefited ........................... 101
   13.14          Confidentiality ...................................... 101
   13.15          Hazardous Materials Indemnity ........................ 101
   13.16          Further Assurances ................................... 102
   13.17          Integration .......................................... 102
   13.18          Governing Law ........................................ 102
   13.19          Severability of Provisions ........................... 103
   13.20          Independent Covenants ................................ 103
   13.21          Headings ............................................. 103
   13.22          Time of the Essence .................................. 103
   13.23          Tax Withholding Exemption Certificates ............... 103
   13.24          Arbitration Reference ................................ 103
   13.25          PURPORTED ORAL AMENDMENTS ............................ 104
   13.26          WAIVER OF RIGHT TO TRIAL BY JURY ..................... 104
   13.27    WAIVER OF SOVEREIGN IMMUNITY; CONSENT
            TO JURISDICTION ............................................ 105
   13.28    Lender Covenant ............................................ 106
   13.29          PREJUDGMENT REMEDY WAIVER ............................ 107
   13.30          Designated Senior Secured Indebtedness ............... 107
   13.31    Compliance with 25 U.S.C. (S)81 ............................ 107

                                      -v-
<PAGE>
 
EXHIBITS
--------

A - Assignment Agreement
B - Compliance Certificate
C - Deposit Account Letter
D - Note
E - Opinion - Tribal Counsel
F - Opinions - Hogan & Hartson and Rome McGuigan Sabanosh
G - Request for Letter of Credit
H - Request for Loan


SCHEDULES
---------

1.1   Pro Rata Shares of the Commitment
4.7   Mohegan Sun Real Property
5.13  Litigation
5.20  Projections
5.24  Hazardous Materials
5.26  Deposit and Brokerage Accounts
6.4   Real Property Insurance
7.8   Existing Liens and Rights of Others
7.9   Existing Indebtedness and Contingent Obligations


                                     -vi-
<PAGE>
 
                                 LOAN AGREEMENT
                                 --------------

                            Dated as of March 3, 1999


     This LOAN AGREEMENT ("Agreement") is entered into by and among The Mohegan
Tribe of Indians of Connecticut, a federally recognized Indian Tribe and Native
American sovereign nation (the "Tribe"), The Mohegan Tribal Gaming Authority, a
governmental instrumentality of the Tribe (the "Borrower"), Bank of America
National Trust and Savings Association ("Bank of America"), and each other
lender whose name is set forth on the signature pages hereof or which may
hereafter execute and deliver an Assignment Agreement with respect to this
Agreement pursuant to Section 13.8 (collectively, the "Lenders" and
individually, a "Lender"), Salomon Smith Barney, Inc., as Syndication Agent,
Societe Generale, as Documentation Agent and Bank of America, as Administrative
Agent. NationsBanc Montgomery Securities, LLC, is Lead Arranger and Sole Book
Manager for the credit facilities described herein, but is not a party to this
Agreement

     In consideration of the mutual covenants and agreements herein contained,
the parties hereto covenant and agree as follows:

                                   ARTICLE 1.
                        DEFINITIONS AND ACCOUNTING TERMS
                        --------------------------------

      1.1 Defined Terms. As used in this Agreement, the following terms shall
          -------------
have the meanings set forth below:

          "Acquisition" means any transaction, or any series of related
           -----------
     transactions, by which Borrower directly or indirectly (i) acquires any
     going business or all or substantially all of the assets of any firm,
     partnership, joint venture, corporation or division thereof, or any other
     business entity, whether through purchase of assets, merger or otherwise,
     or (ii) acquires (in one transaction or as the most recent transaction in a
     series of transactions) control of at least a majority in ordinary voting
     power of the securities of a corporation which have ordinary voting power
     for the election of directors, or (iii) acquires (in one transaction or as
     the most recent transaction in a series of transactions) control of a 50%
     or more ownership interest in any partnership, joint venture or other
     business entity.

          "Adjusted EBITDA" means, for any period, (a) which does not include
           ---------------
     any full Fiscal Quarters beginning following the Completion Date, EBITDA
     for that period, and (b) which includes (i) only one full Fiscal Quarter
     beginning following the Completion Date, EBITDA for that Fiscal Quarter
     times four, (ii) two full Fiscal Quarters following the Completion Date,
     EBITDA for those two Fiscal Quarters times two, (iii) three full Fiscal
     Quarters following the Completion Date, EBITDA for those three Fiscal
     Quarters times one and one third, and (iv) which includes four Fiscal

                                      -1-
<PAGE>
 
     Quarters following the Completion Date, EBITDA for the four most recent
     Fiscal Quarters.

          "Advance" means any Advance made or to be made by any Lender to
           -------
     Borrower as provided in Article 2.

          "Administrative Agent" means Bank of America, when acting in its
           --------------------
     capacity as the Administrative Agent under any of the Loan Documents, and
     any successor Administrative Agent appointed pursuant to Section 12.8.

          "Administrative Agent's Office" means the Administrative Agent's
           -----------------------------
     address as set forth on the signature pages of this Agreement, or such
     other address as the Administrative Agent hereafter may designate by
     written notice to Borrower and the Lenders.

          "Affiliate" means, as to any Person, any other Person which directly
           ---------
     or indirectly controls, or is under common control with, or is controlled
     by, such Person. As used in this definition, "control" (and the correlative
     terms, "controlled by" and "under common control with") shall mean
     possession, directly or indirectly, of power to direct or cause the
     direction of management or policies (whether through ownership of
     securities or partnership or other ownership interests, by contract or
     otherwise). Each enrolled member of the Tribe and their immediate family
     members shall be deemed to be Affiliates of Borrower.

          "Agreement" means this Loan Agreement, either as originally executed
           ---------
     or as it may from time to time be supplemented, modified, amended, restated
     or extended.

          "Applicable Percentage" means, during each Pricing Period, (a) in the
           ---------------------
     case of interest calculable with respect to each Base Rate Loan, the
     percentage set forth below in the column headed "Base Rate", (b) in the
     case of interest calculable with respect to each LIBOR Loan, the percentage
     set forth in the column headed "LIBOR", and (c) in the case of Commitment
     Fees, the percentage set forth in the column headed "Commitment Fees,"
     provided that during the Pricing Period immediately following the last day
     --------
     of each Low Usage Quarter, the Commitment Fees set forth in the matrix
     below shall be increased by 0.125% per annum:

                                      -2-
<PAGE>
 
<TABLE> 
<CAPTION> 
         Total Leverage             Base                      LIBOR                     Commitment
         Ratio                      Rate                                                Fees
         -----                      ----                      -----                     ----
         <S>                        <C>                       <C>                       <C> 
         Less than                  0.000%                    1.125%                    0.300%
         2.00:1.00

         Greater than or            0.125%                    1.375%                    0.350%
         equal to 2.00:1.00
         but less than 2.50:1.00

         Greater than or            0.375%                    1.625%                    0.400%
         equal to 2.50:1.00
         but less than 3.00:1.00

         Greater than or            0.625%                    1.875%                    0.500%
         equal to 3.00:1.00
         but less than 3.50:1.00

         Greater than or            0.875%                    2.125%                    0.500%
         equal to 3.50:1.00
         but less than 4.00:1.00

         Greater than or            1.125%                    2.375%                    0.500%
         equal to 4.00:1.00
         but less than 4.50:1.00

         Greater than or            1.375%                    2.625%                    0.500%
         equal to 4.50:1.00
</TABLE> 

     The Applicable Percentage shall change as of the first day of the calendar
     month following the receipt of a Compliance Certificate indicating a change
     in the Total Leverage Ratio. Notwithstanding the provisions of this
     definition, in the event that Borrower fails to deliver any Compliance
     Certificate on a timely basis, the Applicable Percentage shall increase to
     the highest level set forth above until such time as Borrower delivers a
     Compliance Certificate.

          "Approved Swap Agreements" means one or more Swap Agreements with
           ------------------------
     respect to the Indebtedness evidenced by this Agreement between Borrower
     and one or more of the Lenders, on terms mutually acceptable to Borrower
     and that Lender or Lenders. Each Approved Swap Agreement shall be a Loan
     Document and shall be secured by the Liens created by the Collateral
     Documents to the extent set forth in Section 2.9.

          "Assignment Agreement" means an Assignment Agreement substantially in
           --------------------
     the form of Exhibit A.

          "Authority Property" means any and all now owned or hereafter acquired
           ------------------
     real, mixed and personal Property of the Borrower (whether or not otherwise
     designated as property of the Borrower) which is reflected on the balance
     sheet described in Section 5.6(a) or any subsequent balance sheet hereafter
     delivered by Borrower to the Administrative Agent or the Lenders in
     connection herewith. "Authority Property" in any event includes without
                                                            --------
     limitation (i) the Mohegan Sun, all gaming revenues of Borrower, the
     revenues of Borrower, and (ii) all tangible Property located within the
     area described on Schedule 4.7.

                                      -3-
<PAGE>
 
                           "Available Cash Flow" means, for any calendar month
                            -------------------
         (a) EBITDA for that month, minus (b) the amount of Maintenance Capital
         Expenditures made during that month, minus (c) any principal repayments
         with respect to Indebtedness and Capital Leases constituting Recourse
         Obligations required to be made during that period in cash, and minus
         (d) the amount of cash Interest Charges during that month.

                           "Base Rate" means, as of any date of determination,
                            ---------
         the greater of (a) the Reference Rate or (b) the Federal Funds Rate
         plus .50%.

                           "Base Rate Advance" means an Advance made hereunder
                            -----------------
         as a part of a Base Rate Loan made in accordance with Article 2.

                           "Base Rate Loan" means a Loan made hereunder and
                            --------------
         designated as a Base Rate Loan in accordance with Article 2.

                           "Borrower" means The Mohegan Tribal Gaming Authority.
                            --------

                           "Bureau of Indian Affairs" means the United States
                            ------------------------
         Department of the Interior, Bureau of Indian Affairs, and each
         successor agency.

                           "Business Day" means any Monday, Tuesday, Wednesday,
                            ------------
         Thursday or Friday, other than a day on which banks are authorized or
         required to be closed in California, Connecticut or New York.

                           "Capital Expenditure" means any expenditure that is
                            -------------------
         considered a capital expenditure under Generally Accepted Accounting
         Principles, consistently applied, including any amount that is required
         to be treated as an asset subject to a Capital Lease.

                           "Capital Lease" means, as to any Person, a lease of
                            -------------
         any Property by that Person as lessee that is, or should be in
         accordance with Financial Accounting Standards Board Statement No. 13,
         as amended from time to time, or if such Statement is not then in
         effect, such other statement of Generally Accepted Accounting
         Principles as may be applicable, recorded as a "capital lease" on the
         balance sheet of that Person prepared in accordance with Generally
         Accepted Accounting Principles.

                           "Cash" means, when used in connection with any
                            ----
         Person, all monetary and non-monetary items owned by that Person that
         are treated as cash in accordance with Generally Accepted Accounting
         Principles.

                           "Cash Equivalents" means, when used in connection
                            ----------------
         with any Person, that Person's Investments in:

                                      -4-
<PAGE>
 
     (a)  Government Securities due within one year after the date of the making
          of the Investment;

     (b)  readily marketable direct obligations of any State of the United
          States of America or any political subdivision of any such State given
          on the date of such investment a credit rating of at least Aa by
          Moody's Investors Service, Inc. or AA by Standard & Poor's Ratings
          Group, in each case due within one year after the date of the making
          of the Investment;

     (c)  certificates of deposit issued by, bank deposits in, eurodollar
          deposits through, bankers' acceptances of, and reverse repurchase
          agreements covering Government Securities executed by, any Lender or
          any other bank, savings and loan or savings bank doing business in and
          incorporated under the Laws of the United States of America or any
          State thereof and having on the date of such Investment combined
          capital, surplus and undivided profits of at least $250,000,000, in
          each case due within one year after the date of the making of the
          Investment;

     (d)  certificates of deposit issued by, bank deposits in, eurodollar
          deposits through, bankers' acceptances of, and reverse repurchase
          agreements covering Government Securities executed by, any branch or
          office located in the United States of America of a bank incorporated
          under the Laws of any jurisdiction outside the United States of
          America having on the date of such Investment combined capital,
          surplus and undivided profits of at least $500,000,000, in each case
          due within one year after the date of the making of the Investment;
          and

     (e)  readily marketable commercial paper of corporations doing business in
          and incorporated under the Laws of the United States of America or any
          State thereof given on the date of such Investment the highest credit
          rating by Moody's Investors Service, Inc. and Standard & Poor's
          Corporation, in each case due within 270 days after the date of the
          making of the Investment.

          "Change in Control" means the occurrence of any one or more of the
           -----------------
following:

          (a)  Borrower ceases to be a wholly-owned unit, instrumentality or
     subdivision of the government of the Tribe;

          (b)  Borrower ceases to have the exclusive legal right to operate the
     gaming operations of the Tribe; or

                                      -5-
<PAGE>
 
     (c)  Borrower sells, assigns, transfers, leases or otherwise disposes of
  all or substantially all of its assets to, any Person (except for any sale,
  assignment, transfer, lease or other disposition to a Subsidiary of Borrower
  permitted hereby and by the Senior Note Indenture).

     "Closing Date" means the time and Business Day on which the consummation of
      ------------
all of the transactions contemplated in Section 10.1 occurs.

     "Code" means the Internal Revenue Code of 1986, as amended or replaced and
      ----
as in effect from time to time.

     "Collateral" means, collectively, all of the collateral subject to the
      ----------
Liens, or intended to be subject to the Liens, created by the Collateral
Documents.

     "Collateral Documents" means, collectively, the Security Agreement, each
      --------------------
Deposit Account Agreement, any Leasehold Mortgage and any other pledge
agreement, hypothecation agreement, security agreement, assignment, deed of
trust, mortgage or similar instrument executed by Borrower in favor of the
Administrative Agent or any Creditor to secure the Obligations.

     "Commission" means the National Indian Gaming Commission.
      ----------

     "Commitment" means $425,000,000, or such lesser amount to which the lending
      ----------
commitment of the Lenders may be reduced in accordance with Sections 2.5 and
2.6. The respective Pro Rata Shares of each Lender with respect to the
Commitment as of the Closing Date are set forth in Schedule 1.1.

     "Commitment Fees" means the fees referred to in Section 3.5.
      ---------------

     "Compact" means the tribal-state Compact entered into between the Tribe and
      -------
the State of Connecticut pursuant to IGRA, dated April 25, 1994, as amended.

     "Completion Date" means the first date upon which hotel guests utilize the
      ---------------
lodging services contemplated to be provided by the hotel tower described as
part of the Proposed Expansion.

     "Compliance Certificate" means a certificate substantially in the form of
      ----------------------
Exhibit B, properly completed and signed by a Senior Officer of the Borrower.

     "Constitution" means the Constitution of the Tribe adopted by the Tribe and
      ------------
ratified by the Tribe's members by Tribal Referendum dated April 12, 1996, as it
may be amended from time to time.

                                      -6-
<PAGE>
 
     "Consumer Price Index" means the Consumer Price Index for All Urban
      --------------------
Consumers (CPI-U) for the U.S. City Average for All Items, 1982-1984=100, as
compiled and released by the Bureau of Labor Statistics.

     "Contingent Obligation" means, as to any Person, any (a) direct or indirect
      ---------------------
guarantee of Indebtedness of, or other obligation performable by, any other
Person, including any endorsement (other than for collection or deposit in the
        ---------
ordinary course of business), co-making or sale with recourse of the obligations
of any other Person or (b) contractual assurance (not arising solely by
operation of Law) given to an obligee with respect to the performance of an
obligation by, or the financial condition of, any other Person, whether direct,
indirect or contingent, including any purchase or repurchase agreement covering
                        ---------
such obligation or any collateral security therefor, any agreement to provide
funds (by means of loans, capital contributions or otherwise) to such other
Person, any agreement to support the solvency or level of any balance sheet item
to such other Person, or any other arrangement of whatever nature having the
effect of assuring or holding harmless any obligee against loss with respect to
any obligation of such other Person including without limitation any
"keep-well", "take-or-pay" or "through put" agreement or arrangement. As of each
date of determination, the amount of any Contingent Obligation shall be deemed
to be an amount equal to the stated or determinable amount of the related
primary obligation (unless the Contingent Obligation is limited by its terms to
a lesser amount, in which case to the extent of such amount) or, if not stated
or determinable, the maximum reasonably anticipated liability in respect thereof
as determined by the Person in good faith.

     "Construction Consultant" means a construction consultant designated by the
      -----------------------
Administrative Agent and approved by Borrower, with such consent not to be
unreasonably withheld or delayed.

     "Construction Progress Report" means a report prepared by the Construction
      ----------------------------
Consultant in a form which is reasonably acceptable to the Administrative Agent
describing the progress of construction of the Proposed Expansion.

     "Construction Reserve Disbursement Agreement" means the Construction
      -------------------------------------------
Reserve Disbursement Agreement dated March 3, 1999 between the Tribe and Fleet
National Bank, as Escrow Agent, for the benefit of Borrower.

     "Contractual Obligation" means, as to any Person, any provision of any
      ----------------------
outstanding Securities issued by that Person or of any material agreement,
instrument or undertaking to which that Person is a party or by which it or any
of its Property is bound.

     "Creditors" means, collectively, the Administrative Agent, the Issuing
      ---------
Lender, the Lenders, and the Lead Arranger, and their respective successors in
interest.

                                      -7-
<PAGE>
 
     "Debtor Relief Laws" means the Bankruptcy Code of the United States of
      ------------------
America, as amended from time to time, and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, or similar debtor relief Laws from time to time in
effect affecting the rights of creditors generally.

     "Default" means any event that, with the giving of any applicable notice or
      -------
passage of time, or both, would be an Event of Default.

     "Default Rate" means the interest rate set forth in Section 3.9.
      ------------

     "Defeasance Deposit" means the irrevocable trust deposit made by Borrower
      ------------------
on the Closing Date with First Union National Bank pursuant to the Escrow
Deposit Agreement dated March 3, 1999 between Borrower and First Union National
Bank in the principal amount of $140,300,000 for the purpose of providing for
the covenant defeasance of the TCA Subordinated Notes, initially consisting of
United States Treasury Bills maturing December 12, 1999. Notwithstanding any
provision of the Loan Documents to the contrary the Administrative Agent and the
Lenders shall not claim any Lien in the Defeasance Deposit.

     "Deposit Account Agreement" means a letter agreement among Borrower, the
      -------------------------
Administrative Agent and the depositary for each Operating Account,
substantially in the form of Exhibit C.

     "Designated Deposit Account" means a deposit account to be maintained by
      --------------------------
Borrower with the Administrative Agent, as from time to time designated by
Borrower by written notification to the Administrative Agent.

     "Designated Market" means, for any LIBOR Loan, the London Eurodollar
      -----------------
Market, provided that if the Administrative Agent determines that the London
Eurodollar Market is unavailable or reasonably inconvenient, "Designated Market"
means such other offshore market for deposits in dollars as the Administrative
Agent may reasonably designate.

     "Development Services Agreement" means the Development Services Agreement
      ------------------------------
dated February 7, 1998 between Borrower and Trading Cove Associates.

     "Disposition" means the sale, transfer or other disposition of Authority
      -----------
Property in any single transaction or series of related transactions of any
individual asset, or group of related assets, that has or have at the date of
the Disposition a book value or fair market value (which shall be deemed to be
equal to the sales price for such asset or assets upon a sale to a Person that
is not an Affiliate of the Tribe) of $10,000,000 or more, other than (i) the
                                                          ----------
sale or other disposition of inventory in the ordinary course of business, (ii)
the sale or other disposition of equipment or other 

                                      -8-
<PAGE>
 
personal property that is replaced by equipment or personal property, as the
case may be, performing substantially the same function not later than ninety
(90) days after such sale or disposition and (iii) the sale or other disposition
of obsolete equipment.

     "Distribution" means (a) any transfer of Cash or other Property from
      ------------
Borrower or any account of Borrower to the Tribe or any of its members or
Affiliates or to their respective accounts, (b) any retirement, redemption,
prepayment of principal, purchase or other acquisition for value by Borrower of
any Securities or other obligations of the Tribe or any of its Affiliates (or of
any other Person to the extent that such Securities or other obligations are
guaranteed by the Tribe or any of its Affiliates), (c) the declaration or
payment by Borrower of any dividend or distribution to the Tribe or any of its
members or any of its Affiliates in Cash or in Property (but not the making of
arm's length payments for goods and services provided by the Tribe or any of its
Affiliates to the Borrower in the manner contemplated by Section 7.10), (d) any
Investment (whether by means of loans, advances or otherwise) by Borrower in
Securities or other obligations of the Tribe or any of its Affiliates, or (e)
any other payment, assignment or transfer, whether in Cash or other Property,
from Borrower to the Tribe or any of its members or Affiliates, including the
payment of any tax, fee, charge or assessment imposed by the Tribe on Borrower,
its revenues or Properties, provided that, both (A) the making of payments by
                            -------------
Borrower to the Tribe or any of its Affiliates in consideration of goods and
services provided to Borrower by the Tribe or its Affiliates in the ordinary
course of business and in accordance with past practices, and (B) assessment by
the Tribe against Borrower of the regulatory costs and expenses of the Tribe
associated with Borrower in accordance with past practices, shall not be
considered a Distribution.

     "Documentation Agent" means Societe Generale. The capacity of the
      -------------------
Documentation Agent is solely titular in nature, and except to the extent
expressly set forth herein, the Documentation Agent shall not have any rights or
obligations under the Loan Documents by reason of such capacity.

     "dollars" or "$" means United States dollars.
      -------      -

     "EBITDA" means, for any period, (a) Net Income of Borrower for that period,
      ------
plus (b) Interest Charges of Borrower for that period, plus (c) (without
----
duplication) the aggregate amount, if any, of federal and state taxes on or
measured by income of Borrower for that period (whether or not payable during
that period, and excluding any amount payable to the State of Connecticut under
the Compact), plus (d) depreciation and amortization of Borrower for that
              ----
period, and minus (e) payments under the Relinquishment Agreement, in each case
            -----
paid during that period in cash, in each case as determined in accordance with
Generally Accepted Accounting Principles.

     "Eligible Assignee" means (a) with respect to any Lender, another Lender
      -----------------
(b) with respect to any Lender, any Affiliate of that Lender, (c) any commercial

                                      -9-
<PAGE>
 
bank having a combined capital and surplus of $100,000,000 or more, (d) any (i)
savings bank, savings and loan association or similar financial institution or
(ii) insurance company engaged in the business of writing insurance which, in
either case (A) has a net worth of $200,000,000 or more, (B) is engaged in the
business of lending money and extending credit under credit facilities
substantially similar to those extended under this Agreement and (C) is
operationally and procedurally able to meet the obligations of a Lender
hereunder to the same degree as a commercial bank and (e) any other financial
institution (including a mutual fund or other fund) having total assets of
             ---------
$250,000,000 or more which meets the requirements set forth in subclauses (B)
and (C) of clause (d) above; provided that each Eligible Assignee must either
                             --------
(a) be organized under the Laws of the United States of America, any State
thereof or the District of Columbia or (b) be organized under the Laws of the
Cayman Islands or any country which is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of such a country, and
(i) act hereunder through a branch, agency or funding office located in the
United States of America and (ii) be exempt from withholding of tax on interest
and deliver the documents related thereto pursuant to Section 13.23.

     "ERISA" means the Employee Retirement Income Security Act of 1974, and any
      -----
regulations issued pursuant thereto, as amended or replaced and as in effect
from time to time.

     "ERISA Affiliate" means, with respect to any Person, any Person (or any
      ---------------
trade or business, whether or not incorporated) that is under common control
with that Person within the meaning of Section 414 of the Internal Revenue Code,
Title 26, U.S.C.

     "Eurodollar Obligations" means eurocurrency liabilities, as defined in
      ----------------------
Regulation D.

     "Event of Default" shall have the meaning provided in Section 11.1.
      ----------------

     "Existing Senior Secured Notes" means Borrower's existing $175,000,000
      -----------------------------
principal amount 13.50% Senior Secured Notes issued pursuant to the Indenture
dated as of September 29, 1995 among Borrower and First Fidelity Bank, as
Trustee, as amended.

     "Federal Funds Rate" means, as of any date of determination, a fluctuating
      ------------------
interest rate per annum equal to the federal funds effective rate for the
previous Business Day as quoted by the Federal Reserve Bank of New York or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by the Administrative Agent. 

                                      -10-
<PAGE>
 
     "Fiscal Quarter" means the fiscal quarter of Borrower consisting of a three
      --------------
month fiscal period ending on each March 31, June 30, September 30 and December
31.

     "Fiscal Year" means the fiscal year of Borrower consisting of a twelve
      -----------
month fiscal period ending on each September 30.

     "Fixed Charge Coverage Ratio" means, as of each date of determination, the
      ---------------------------
ratio of (a) Adjusted EBITDA plus management fees paid in cash, in each case for
the four Fiscal Quarter period then ending, to (b) the sum of (i) Interest
                                                       ---
Charges with respect to Recourse Obligations to the extent payable in cash
during that period, plus (ii) any principal repayments with respect to
                    ----
Indebtedness and Capital Leases constituting Recourse Obligations required to be
made during that period in cash, plus (iii) Maintenance Capital Expenditures for
                                 ----
that period, plus (iv) Distributions made during that period to the Tribe in
             ----
accordance with Section 7.5 plus (v) payments under the Relinquishment Agreement
                            ----
and management fees, in each case made in cash during that period (without any
annualization thereof).

     "Gaming Authority Ordinance" means Ordinance No. 95-2 of the Tribe, as
      --------------------------
enacted on July 15, 1995.

     "Gaming Board" means, collectively, (a) The Mohegan Tribal Gaming
      ------------
Commission, (b) the Connecticut Division of Special Revenue, (c) the Commission,
and (d) any other Governmental Agency that holds licensing or permit authority
over gambling, gaming or casino activities conducted by the Borrower or the
Tribe within its jurisdiction.

     "Gaming Laws" means IGRA, the Gaming Ordinance, the Gaming Authority
      -----------
Ordinance and all other Laws pursuant to which any Gaming Board possesses
licensing or permit authority over gambling, gaming, or casino activities
conducted by the Borrower or the Tribe within its jurisdiction.

     "Gaming Ordinance" means Ordinance 94-1 of the Tribe, as enacted on, July
      ----------------
28, 1994.

     "Generally Accepted Accounting Principles" means, as of any date of
      ----------------------------------------
determination, accounting principles set forth as generally accepted in the
effective Statements of the Auditing Standards Board of the American Institute
of Certified Public Accountants as of the date of this Agreement, or if such
statements are not then in effect, accounting principles that are then approved
by a significant segment of the accounting profession in the United States of
America. The term "consistently applied," as used in connection therewith, means
                   --------------------
that the accounting principles applied are consistent in all material respects
to those applied at prior dates or for prior periods.

                                      -11-
<PAGE>
 
     "Government Securities" means readily marketable direct full faith and
      ---------------------
credit obligations of the United States of America or obligations
unconditionally guaranteed by the full faith and credit of the United States of
America.

     "Governmental Agency" means (a) any international, foreign, federal,
      -------------------
tribal, state, county or municipal government, or political subdivision thereof,
(b) any governmental or quasi-governmental agency, authority, board, bureau,
commission, department, instrumentality or public body, (c) any court,
administrative tribunal or public utility, or (d) any arbitration tribunal or
other non-governmental authority to whose jurisdiction a Person has consented.

     "Hazardous Materials" means substances defined as hazardous substances
      -------------------
pursuant to the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 USC (S).9601, et seq., or as hazardous, toxic or pollutant
                              -------
pursuant to the Hazardous Materials Transportation Act, 49 USC (S).1801, et
                                                                         --
seq., the Resource Conservation and Recovery Act, 42 USC (S).6901, et seq., or
----                                                               -------
in any other applicable Hazardous Materials Law, in each case as such laws are
amended from time to time.

     "Hazardous Materials Claims" means the matters described in clauses (a) and
      --------------------------
(b) of Section 6.10.

     "Hazardous Materials Laws" means all federal, tribal, Connecticut state or
      ------------------------
local laws, ordinances, rules or regulations governing the disposal of Hazardous
Materials, to the extent applicable.

     "IGRA" means the federal Indian Gaming Regulatory Act of 1988, as amended,
      ----
codified at 25 U.S.C. (S)2701, et seq.
                               -- --- 
     "Indebtedness" means, as to any Person, without duplication, (a) all
      ------------
indebtedness of such Person for borrowed money, (b) that portion of the
obligations of such Person under Capital Leases which should properly be
recorded as a liability on a balance sheet of that Person prepared in accordance
with Generally Accepted Accounting Principles, (c) any obligation of such Person
that is evidenced by a promissory note or other instrument representing an
extension of credit to such Person, whether or not for borrowed money, (d) any
obligation of such Person for the deferred purchase price of Property or
services (other than trade or other accounts payable in the ordinary course of
          ----- ----
business in accordance with customary terms), (e) any obligation of such Person
that is secured by a Lien on assets of such Person, whether or not that Person
has assumed such obligation or whether or not such obligation is non-recourse to
the credit of such Person, but only to the extent of the lesser of (i) the
outstanding principal amount of the obligation (or, with respect to any letter
of credit, the amount available for drawing thereunder), and (ii) the fair
market value of the assets so subject to the Lien, (f) obligations of such
Person arising under acceptance facilities or under 

                                      -12-
<PAGE>
 
facilities for the discount of accounts receivable of such Person, (g)
obligations of such Person for unreimbursed draws under letters of credit issued
for the account of such Person and (h) any obligations of such Person under a
Swap Agreement, provided that (y) the obligations of Borrower under the
                --------
Relinquishment Agreement shall not be treated as Indebtedness except to the
extent that the same are not paid when due, and (z) the obligations of Borrower
with respect to the TCA Subordinated Notes shall not be treated as Indebtedness
during any period with respect to which the Defeasance Deposit exists.

         "Intangible Assets" means assets that are considered intangible assets
          -----------------
under Generally Accepted Accounting Principles, including customer lists,
goodwill, computer software and capitalized research and development costs.

         "Interest Charges" means, with respect to any fiscal period, the sum of
          ----------------
(a) all interest, fees, charges and related expenses payable with respect to
that fiscal period to a lender in connection with borrowed money or the deferred
purchase price of assets that is treated as interest in accordance with
Generally Accepted Accounting Principles (other than any such interest, charges
and related expenses accruing with respect to the TCA Subordinated Notes
following the Closing Date to the extent provided for by the Defeasance
Deposit), plus (b) the portion of rent payable with respect to that fiscal
          ----
period under Capital Leases that should be treated as interest in accordance
with Generally Accepted Accounting Principles.

         "Interest Differential" means, with respect to any prepayment of a
          ---------------------
LIBOR Loan on a day other than the last day of the applicable Interest Period
and with respect to the failure to borrow a LIBOR Loan on the date or in the
amount specified in a Request for Loan, (a) the per annum interest rate payable
pursuant to Section 3.1(c) with respect to that LIBOR Loan as of the date of the
prepayment or failure to borrow, minus (b) the LIBOR on or as near as
                                 -----
practicable to the date of the prepayment or failure to borrow for a LIBOR Loan
commencing on such date and ending on the last day of the applicable Interest
Period; provided that if the LIBOR so prescribed is equal to or within 1/8% less
        --------
than the LIBOR for the LIBOR Loan that was prepaid or not borrowed, then 1/8 of
1% shall be subtracted from the LIBOR so prescribed. The determination of the
Interest Differential by the Administrative Agent shall be conclusive in the
absence of manifest error.

         "Interest Period" means, as to each LIBOR Loan, the period commencing
          ---------------
on the date specified by Borrower pursuant to Section 2.1(b) and ending 1, 2, 3
or 6 months thereafter, as specified by Borrower in the applicable Request for
Loan; provided that:
      --------

     (a) The first day of any Interest Period shall be a LIBOR Business Day;

                                      -13-
<PAGE>
 
         (b)      Any Interest Period that would otherwise end on a day that is
                  not a LIBOR Business Day shall be extended to the next
                  succeeding LIBOR Business Day unless such LIBOR Business Day
                  falls in another calendar month, in which case such Interest
                  Period shall end on the next preceding LIBOR Business Day; and

         (c)      No Interest Period shall extend beyond the Maturity Date.

                  "Internal Revenue Code" means the Internal Revenue Code of
                   ---------------------
1986, Title 26, U.S.C., as amended or replaced and as in effect from time to
time.

                  "Investment" means, when used in connection with any Person,
                   ----------
any investment by or of that Person, whether by means of purchase or other
acquisition of capital stock or other Securities of any other Person or by means
of loan, advance, capital contribution, guaranty or other debt or equity
participation or interest, or otherwise, in any other Person, including any
                                                              ---------
partnership and joint venture interests of such Person in any other Person. The
amount of any Investment shall be the amount actually invested, without
adjustment for increases or decreases in the value of such Investment.

                  "Issuing Lender" means Bank of America.
                   --------------

                  "Landlord Consent" means the consent, waiver and estoppel
                   ----------------
executed by the Tribe on the Closing Date in favor of the Administrative Agent,
either as originally executed or as it may from time to time be supplemented,
modified, amended, restated or extended.

                  "Laws" means, collectively, all international, foreign,
                   ----
federal, tribal, state and local constitutions, statutes, treaties, rules,
regulations, ordinances, codes and administrative or judicial precedents.

                  "Lead Arranger" means NationsBanc Montgomery Securities, LLC
                   -------------
and its successors and assigns.

                  "Lease" means the Lease dated September 29, 1995 between the
                   -----
Tribe and Borrower, as amended by an amendment also dated September 29, 1995,
with respect to the real property underlying the Mohegan Sun and the
improvements thereon.

                  "Leasehold Mortgage" means, collectively, the Leasehold
                   ------------------
Mortgage executed by Borrower in favor of the Administrative Agent covering the
leasehold interest of Borrower under the Lease to the reservation real property
described on Schedule 4.7, the related improvements and fixtures used in
connection with Mohegan

                                      -14-
<PAGE>
 
Sun, either as originally executed or as the same may from time to time be
supplemented, modified, amended, renewed, extended or supplanted.

      "Lender" means each of the lenders party to this Agreement on the Closing
       ------
Date and each other lender which hereafter becomes a party hereto in accordance
with Section 13.8, provided that, for the purpose of the term "Approved Swap
                   --------
Agreement" the term "Lender" shall also include any Affiliate of a Lender which
enters into a Swap Agreement which expressly relates to the Indebtedness
evidenced by this Agreement and the Loan Documents.

      "Letters of Credit" means any of the letters of credit issued by the
       -----------------
Issuing Lender under the Commitment pursuant to Section 2.4, either as
originally issued or as the same may be supplemented, modified, amended,
renewed, extended or supplemented.

      "LIBOR" means, with respect to any LIBOR Loan, the interest rate (rounded
       -----
upward to the next 1/100 of 1%) determined to be equal to the LIBOR Base Rate
divided by the remainder of (a) 1 minus (b) the Reserve Percentage.

      "LIBOR Advance" means an Advance made hereunder as a part of a LIBOR Loan
       -------------
made in accordance with Article 2.

      "LIBOR Base Rate" means, with respect to any LIBOR Loan, the interest rate
       ---------------
per annum (determined solely by the Administrative Agent) at which deposits in
dollars are offered by Bank of America to prime banks in the Designated Market
at or about 11:00 a.m. local time in the Designated Market, two LIBOR Business
Days before the first day of the applicable Interest Period in an aggregate
amount approximately equal to the amount of such LIBOR Loan and for a period of
time comparable to the number of days in the applicable Interest Period. The
determination of the LIBOR Base Rate by the Administrative Agent shall be
conclusive in the absence of manifest error.

      "LIBOR Business Day" means any Business Day on which dealings in dollar
       ------------------
deposits are conducted by and among banks in the Designated Market.

      "LIBOR Lending Office" means, as to each Lender, its office or branch so
       --------------------
designated by written notice to Borrower and the Administrative Agent as its
LIBOR Lending Office. If no LIBOR Lending Office is designated by a Lender, its
LIBOR Lending Office shall be its office at its address for purposes of notices
hereunder.

      "LIBOR Loan" means a Loan made hereunder and designated as a LIBOR Loan in
       ----------
accordance with Article 2.

                                      -15-
<PAGE>
 
     "Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment
      ----
for security, security interest, encumbrance, lien or charge of any kind,
whether voluntarily incurred or arising by operation of Law or otherwise,
affecting any Property, including any agreement to grant any of the foregoing,
                        ---------
any conditional sale or other title retention agreement, any lease in the nature
of a security interest, and/or the filing of or agreement to give any financing
statement under the Uniform Commercial Code or comparable Law of any
jurisdiction with respect to any Property.

     "Loan" means the group of Advances made at any one time by the Lenders in
      ----
accordance with the Commitment pursuant to Article 2.

     "Loan Documents" means, collectively, this Agreement, any Notes, each
      --------------
Letter of Credit, the Collateral Documents, the Landlord Consent, any Request
for Loan, any Request for Letter of Credit and any other agreements of any type
or nature heretofore or hereafter executed and delivered by the Borrower, the
Tribe or any of its Affiliates to the Administrative Agent or to any Lender in
any way relating to or in furtherance of this Agreement, including any Approved
Swap Agreement, in each case either as originally executed or as the same may
from time to time be supplemented, modified, amended, restated, extended or
supplanted.

     "Low Usage Quarter" means each Fiscal Quarter ending prior to the
      -----------------
Completion Date during which (a) the average daily amount of the Unused
Commitment is equal to or greater than (b) two thirds of the average Commitment
during that Fiscal Quarter.

     "Maintenance Capital Expenditure" means a Capital Expenditure for the
      -------------------------------
maintenance, repair, restoration or refurbishment of those portions of Mohegan
Sun which are open for business on the Closing Date (or, as of the date of the
Capital Expenditure have been open for business for a period in excess of one
year), but excluding any Capital Expenditure which adds to or further improves
           ---------
Mohegan Sun.

     "Management Board" means the Management Board of Borrower, as established
      ----------------
pursuant to the Gaming Authority Ordinance.

     "Material Adverse Effect" means any set of circumstances or events which
      -----------------------
(a) may reasonably be expected to have any material adverse effect whatsoever
upon the validity or enforceability of any Loan Document, (b) may reasonably be
expected to be material and adverse to the condition (financial or otherwise) or
business operations or Properties or to the prospects of Borrower, (c)
materially impairs or may reasonably be expected to materially impair the
ability of Borrower to perform its Obligations or (d) materially impairs or
could reasonably be expected to materially impair the ability of the Lenders or
the Administrative Agent to enforce the principal benefits intended to be
created and conveyed by the Loan Documents, including without limitation the
Liens created by the Collateral Documents.

                                      -16-
<PAGE>
 
     "Material Documents" means, collectively, the Lease, the Construction
      ------------------
Reserve Disbursement Agreement, the Senior Unsecured Notes, the Senior Unsecured
Note Indenture, the Relinquishment Agreement, the New Subordinated Notes and the
New Subordinated Notes Indenture, the Constitution, the Compact, the Gaming
Ordinance, the Gaming Authority Ordinance, the Development Services Agreement,
the Town Agreement and the UCC Ordinance.

     "Maturity Date" means March 3, 2004.
      -------------                      

     "Mohegan Sun" means the high stakes bingo and casino property and related
      -----------                                                        
transportation, retail, dining and entertainment facilities and proposed hotel
described in the Gaming Ordinance and commonly known as "Mohegan Sun Resort
Casino" owned by the Borrower and located in Uncasville, Connecticut (including
any future expansions thereof), which facilities are located upon the real
property described on Schedule 4.7.

     "Multiemployer Plan" means any employee benefit plan of the type described
      ------------------
in Section 4001(a)(3) of ERISA.

     "Negative Pledge" means any covenant binding on the Tribe or Borrower that
      ---------------
prohibits the creation of Liens on any Authority Property, except a covenant
                                                           ------
contained in an instrument creating a Permitted Encumbrance or Permitted Right
of Others on Authority Property that prohibits the creation of other Liens on
that Authority Property and no other Authority Property.

     "Net Income" means, with respect to any fiscal period, the net income from
      ----------
continuing operations before extraordinary or non-recurring items of Borrower
for that period, determined in accordance with Generally Accepted Accounting
Principles, consistently applied.

     "New Subordinated Notes" means (a) Borrower's 8 3/4% Senior Subordinated
      ----------------------
Notes due 2009 issued on or about March 3, 1999 in the aggregate principal
amount of $300,000,000 pursuant to the New Subordinated Note Indenture, and (b)
any Senior Subordinated Exchange Notes issued pursuant to the New Subordinated
Note Indenture.

     "New Subordinated Note Indenture" means the Indenture dated as of March 3,
      -------------------------------
1999 between Borrower and State Street Bank and Trust Company, as Trustee,
relating to the New Subordinated Notes.

     "Non-Authority Property" means Property of the Tribe which is not Authority
      ----------------------
Property.

                                      -17-
<PAGE>
 
     "Note" means any promissory note made by Borrower to a Lender evidencing
      ----
Advances under that Lender's Pro Rata Share of the Commitment, substantially in
the form of Exhibit D, either as originally executed or as the same may from
time to time be supplemented, modified, amended, renewed, extended or
supplanted.

     "Obligations" means all present and future obligations of every kind or
      -----------
nature of the Tribe, Borrower or any Party at any time and from time to time
owed to the Creditors or any one or more of them under any one or more of the
Loan Documents, whether due or to become due, matured or unmatured, liquidated
or unliquidated, or contingent or noncontingent, including obligations of
                                                 ---------
performance as well as obligations of payment, and including interest that
                                                   ---------
accrues after the commencement of any proceeding under any Debtor Relief Law by
or against the Tribe, Borrower or any such Party.

     "Operating Accounts" means the deposit accounts of Borrower described on
      ------------------
Schedule 5.26, and each other deposit, savings, brokerage or similar account
hereafter established by Borrower.

     "Party" means any Person other than the Creditors which now or hereafter is
      -----
a party to any of the Loan Documents.

     "PBGC" means the Pension Benefit Guaranty Corporation or any successor
      ----
thereof established under ERISA.

     "Pension Plan" means any "employee pension benefit plan" that is subject to
      ------------
Title IV of ERISA and which is maintained for employees of Borrower or any of
its ERISA Affiliates, other than a Multiemployer Plan.

     "Permitted Dispositions" means Dispositions made during the term of this
      ----------------------
Agreement of Authority Property which has, as of each date of determination, an
aggregate book value not in excess of 5% of the aggregate value of the assets of
Borrower determined, as of each such date, with reference to the then most
recent audited financial statements of Borrower, provided that no Disposition of
Authority Property which is an operationally integral part of Mohegan Sun shall
be a treated as a Permitted Disposition without the prior written consent of the
Requisite Lenders.

     "Permitted Encumbrances" means:
      ----------------------        

  (a) inchoate Liens incident to construction or maintenance of real property,
      or Liens incident to construction or maintenance of real property, now or
      hereafter filed of record for which adequate accounting reserves have been
      set aside and which are being contested in good faith by appropriate
      proceedings and have not proceeded to judgment, provided 
                                                      --------

                                      -18-
<PAGE>
 
     that, by reason of nonpayment of the obligations secured by such Liens, no
     such real property is subject to a material risk of loss or forfeiture;

(b)  Liens for taxes and assessments on Property which are not yet past due, or
     Liens for taxes and assessments on Property for which adequate reserves
     have been set aside and are being contested in good faith by appropriate
     proceedings and have not proceeded to judgment, provided that, by reason of
                                                     --------
     nonpayment of the obligations secured by such Liens, no such Property is
     subject to a material risk of loss or forfeiture;

(c)  minor defects and irregularities in title to any real property which in the
     aggregate do not materially impair the fair market value or use of the real
     property for the purposes for which it is or may reasonably be expected to
     be held;

(d)  easements, exceptions, reservations, or other agreements granted or entered
     into after the date hereof for the purpose of pipelines, conduits, cables,
     wire communication lines, power lines and substations, streets, trails,
     walkways, drainage, irrigation, water, and sewerage purposes, dikes,
     canals, ditches, the removal of oil, gas, coal, or other minerals, and
     other like purposes affecting real property which in the aggregate do not
     materially burden or impair the fair market value or use of such real
     property for the purposes for which it is or may reasonably be expected to
     be held;

(e)  rights reserved to or vested in any Governmental Agency by Law to control
     or regulate, or obligations or duties under Law to any Governmental Agency
     with respect to, the use of any real property;

(f)  rights reserved to or vested in any Governmental Agency by Law to control
     or regulate, or obligations or duties under Law to any Governmental Agency
     with respect to, any right, power, franchise, grant, license, or permit;

(g)  present or future zoning laws and ordinances or other laws and ordinances
     restricting the occupancy, use, or enjoyment of real property;

(h)  statutory Liens, other than those described in clauses (a) or (b) above,
     arising in the ordinary course of business with respect to obligations
     which are not delinquent or are being contested in good faith by
     appropriate proceedings, provided that, if delinquent, adequate reserves
                              --------         
     have been set aside with respect thereto and, by reason of nonpayment, no
     Property is subject to a material risk of loss or forfeiture;

                                      -19-
<PAGE>
 
     (i)  Liens consisting of pledges or deposits made in connection with
          obligations under workers' compensation laws, unemployment insurance
          or similar legislation, including Liens of judgments thereunder which
          are not currently dischargeable;

     (j)  Liens consisting of pledges or deposits of Property to secure
          performance in connection with operating leases made in the ordinary
          course of business to which Borrower is a party as lessee, provided
          the aggregate value of all such pledges and -------- deposits in
          connection with any such lease does not at any time exceed 10% of the
          annual fixed rentals payable under such lease;

     (k)  Liens consisting of deposits of Property to secure statutory
          obligations of Borrower in the ordinary course of its business;

     (l)  Liens consisting of deposits of Property to secure (or in lieu of)
          surety, appeal or customs bonds in proceedings to which Borrower is a
          party in the ordinary course of its business; and

     (m)  Liens created by or resulting from any litigation or legal proceeding
          involving Borrower in the ordinary course of its business which is
          currently being contested in good faith by appropriate proceedings,
          provided that adequate reserves have been set aside with respect
          --------
          thereto, and such Liens are discharged or stayed within 60 days of
          creation and no Property is subject to a material risk of loss or
          forfeiture.

          "Permitted Right of Others" means a Right of Others consisting of (a)
           -------------------------
an interest (other than a legal or equitable co-ownership interest, an option or
right to acquire a legal or equitable co-ownership interest and any interest of
a ground lessor under a ground lease) that does not materially impair the value
or use of property for the purposes for which it is or may reasonably be
expected to be held, (b) an option or right to acquire a Lien that would be a
Permitted Encumbrance, and (c) the reversionary interest of a landlord under a
lease of Property.

          "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, tribe, firm, joint venture,
Governmental Agency, or otherwise.

          "Plans and Budget" means the plans, specifications, construction
           ----------------
budget, construction plan and timetable prepared by or for Borrower, as the same
may be amended or supplemented from time to time, all of which plans and
specifications

                                      -20-
<PAGE>
 
describe and show the construction of the Proposed Expansion and the labor and
materials necessary for the construction thereof.

     "Pricing Period" means the period of three months which commences on the
      --------------
first day of each March, June, September and December, and ends on the last day
of the succeeding May, August, November and February.

     "Priority Distributions" means Distributions made by Borrower to the Tribe
      ----------------------
in the aggregate amount of which do not exceed $14,000,000 in any calendar year,
plus for 2000 and each subsequent year, an annual adjustment in a percentage
equal to the Consumer Price Index adjustment published for that year.

     "Projections" means the financial projections dated as of the Closing Date
      -----------
heretofore furnished by the Borrower to the Lenders, true and correct copies of
which are attached hereto as Schedule 5.20.

     "Property" means any interest in any kind of property or asset, whether
      --------
real, personal or mixed, or tangible or intangible.

     "Proposed Expansion" means the proposed expansion of the Mohegan Sun
      ------------------
generally consisting of a hotel with approximately 1500 hotel rooms,
approximately 9 new restaurants and lounges, approximately 100,000 square feet
of additional gaming space, approximately 100,000 square feet of convention
space, and an entertainment event center with seating for approximately 10,000,
and approximately 300,000 square feet of additional retail space, in a manner
consistent with the Plan and Budget.

     "Pro Rata Share" means the percentage of the Commitment held by each Lender
      --------------
on that date or, if the Commitment has been terminated, the percentage of the
Obligations held by that Lender, including in each case any holdings through an
SPC. As of the Closing Date, each Lender holds the percentage of the Commitment
set forth opposite the name of that Lender on Schedule 1.1. Such Schedule shall
be deemed to be automatically amended to reflect any assignments of the
Commitment made in accordance with Section 13.8.

     "Quarterly Payment Date" means each March 31, June 30, September 30, and
      ----------------------
December 31, commencing with the first such date to occur subsequent to the
Closing Date.

     "Real Property" means, collectively, the real property and improvements
      -------------
underlying Mohegan Sun described on Schedule 4.7.

     "Recourse Obligations" means, as of each date of determination, and without
      --------------------
duplication, (a) all Indebtedness and Contingent Obligations as to which

                                      -21-
<PAGE>
 
Borrower has any direct or indirect liability or obligation (whether as the
primary obligor or as a surety, and whether or not Borrower is the nominal
obligor with respect thereto), including without limitation indebtedness for
borrowed money, obligations with respect to Capital Leases, amounts available
for drawing under letters of credit and other similar instruments, and the
aggregate amount drawn under letters of credit and other similar instruments not
then reimbursed, (b) all Indebtedness, Contingent Obligations and other
obligations secured by any Lien upon any Authority Property, and (c) all
Indebtedness, Contingent Obligations and other obligations held by any Person
who may take recourse to any Authority Property, the revenues of Borrower, or
any other Property of Borrower for the satisfaction of such Indebtedness and
other obligations. Without limitation on this definition, the Obligations, the
Senior Unsecured Notes and the New Subordinated Notes each constitute Recourse
Obligations.

     "Reduction Amount" means the amount which is equal to 10% of the principal
      ----------------
amount of the Commitment (as in effect as of the first Reduction Date to occur),
provided that if the Commitment is thereafter increased in accordance with
--------
Section 2.7, then the Reduction Amount for each subsequent Reduction Date shall
be ratably increased.

     "Reduction Date" means each Quarterly Payment Date beginning with the
      --------------
earlier of (a) March 31, 2002 or (b) the last day of the first full Fiscal
Quarter following the Completion Date.

     "Reference Rate" means the rate of interest publicly announced from time to
      --------------
time by Bank of America in San Francisco, California, as its "Reference Rate."
The Reference Rate is a rate set by Bank of America based upon various factors,
including Bank of America's costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans. Bank of America may price loans at, above or below the Reference Rate.
Any change in the Reference Rate shall take effect on the day specified in the
public announcement of such change.

     "Regulations D, T, U and X" means Regulations D, T, U and X, respectively,
      -------------------------
as at any time amended, of the Board of Governors of the Federal Reserve System,
or any other regulations in substance substituted therefor.

     "Related Businesses" means (a) Class II and Class III Casino gaming (as
      ------------------
defined in IGRA), and (b) any resort business, any activity or business
incidental, directly related or similar thereto, or any business or activity
that is a reasonable extension, development or expansion thereof, including any
hotel, entertainment, recreation or other activity or business, in each case
designed to promote, market, support, develop, construct or enhance the casino
gaming and resort business operated by Borrower at Mohegan Sun.

                                      -22-
<PAGE>
 
     "Relinquishment Agreement" means the Relinquishment Agreement dated as of
      ------------------------
February 7, 1998, among Borrower, the Tribe and TCA, as amended as of the
Closing Date.

     "Request for Letter of Credit" means a written request for letter of credit
      ----------------------------
substantially in the form of Exhibit G, together with the standard form of
application for standby letters of credit, as applicable, used by the Issuing
Lender, signed by a Senior Officer of the Borrower and properly completed to
provide all information required to be included therein.

     "Request for Loan" means a written request for a Loan substantially in the
      ----------------
form of Exhibit H, signed by a Senior Officer of the Borrower and properly
completed to provide all information required to be included therein.

     "Requirement of Law" means, as to any Person, the constitution, the
      ------------------
articles or certificate of incorporation and bylaws, the partnership agreement
and any related certificate of partnership, or other organizational or governing
documents of such Person, and any Law, or judgment, order, award, decree, writ
or determination of a Governmental Agency, in each case applicable to or binding
upon such Person or any of its Property or to which such Person or any of its
Property is subject.

     "Requisite Lenders" means, as of any date of determination (a) Lenders
      -----------------
whose aggregate Pro Rata Share is at least 51% of the then outstanding Loans and
Letters of Credit, or (b) if no Loans or Letters of Credit are outstanding,
Lenders whose aggregate Pro Rata Share is at least 51% of the Commitment, or (c)
if the Commitment has been terminated and no Loans or Letters of Credit or other
Obligations (other than under Approved Swap Agreements) are then outstanding,
Lenders then owed Specified Swap Amounts which are at least 51% of the aggregate
Specified Swap Amount owed to all Lenders.

     "Reserve Percentage" means, with respect to any LIBOR Loan, the percentage
      ------------------
applicable as of the date of determination of the LIBOR Base Rate representing
the aggregate reserve requirements of the Administrative Agent (disregarding any
offsetting amounts that may be available to the Administrative Agent to decrease
such requirements to the extent that such offsetting amounts arose out of
transactions other than those contemplated by this Agreement) under Regulation D
and any other applicable Laws with respect to Eurodollar Obligations in an
aggregate amount equal to the amount of such LIBOR Loan and for a time period
comparable to the number of months in the applicable Interest Period. The
determination by the Administrative Agent of any applicable Reserve Percentage
shall be presumed correct in the absence of manifest error.

     "Responsible Official" means, when used with reference to any Person, any
      --------------------
Senior Officer and, in the case of Borrower, includes any member of the

                                      -23-
<PAGE>
 
Management Board. Any document or certificate hereunder that is signed or
executed by a Responsible Official of another Person shall be conclusively
presumed to have been authorized by all necessary corporate, partnership and/or
other action on the part of such other Person.

     "Right of Others" means, as to any Property in which a Person has an
      ---------------
interest, (a) any legal or equitable right, title or other interest (other than
                                                                     ----------
a Lien) held by any other Person in or with respect to that Property, and (b)
any option or right held by any other Person to acquire any right, title or
other interest in or with respect to that Property, including any option or
                                                    ---------
right to acquire a Lien.

     "Securities" means any capital stock, share, voting trust certificate,
      ----------
bonds, debentures, notes or other evidences of indebtedness, limited partnership
interests, or any warrant, option or other right to purchase or acquire any of
the foregoing.

     "Security Agreement" means the Security Agreement of even date herewith
      ------------------
executed by Borrower in favor of the Administrative Agent for the ratable
benefit of the Lenders, either as originally executed or as it may from time to
time be supplemented, modified, amended, restated or extended.

     "Senior Leverage Ratio" means, as of each date of determination, the ratio
      ---------------------
of (a) Total Debt as of that date minus Subordinated Obligations as of that
date, to (b) Adjusted EBITDA for the four Fiscal Quarter period ending on that
date.

     "Senior Officer" means (a) as to the Tribe, the Chairman and Vice-Chairman
      --------------
of the Tribal Council of the Tribe, the Chief of Staff of the Tribe, the Chief
Financial Officer of the Tribe and the General Counsel of the Tribe, and (b) as
to Borrower, the Chief Executive Officer and the Senior Vice President of
Finance of Borrower. Each Senior Officer (whether denominated as an officer of
the Tribe or of Borrower) shall be conclusively presumed to be authorized to act
on behalf of the Borrower with respect to the transactions contemplated by the
Loan Documents.

     "Senior Unsecured Notes" means (a) Borrowers 8 1/8% Senior Notes due 2006
      ----------------------
issued pursuant to the Senior Note Indenture in the aggregate principal amount
of $200,000,000, and (b) any Senior Exchange Notes issued pursuant to the Senior
Unsecured Note Indenture.

     "Senior Unsecured Note Indenture" means the Indenture dated as of March 3,
      -------------------------------
1999 between Borrower and First Union National Bank, as Trustee, relating to the
Senior Unsecured Notes.

     "SPC" has the meaning set forth in Section 13.8.
      ---                                            

                                      -24-
<PAGE>
 
     "Special Circumstance" means (a) the adoption of any Law by any
      --------------------
Governmental Agency, central branch or comparable authority with respect to
activities in the Designated Market, or (b) any change in the interpretation or
administration of any existing Law by any Governmental Agency, central bank or
comparable authority charged with the interpretation or administration thereof,
or (c) compliance by any Lender or its LIBOR Lending Office with any request or
directive (whether or not having the force of Law) of any such Governmental
Agency, central bank or comparable authority, or (d) the existence or occurrence
of circumstances affecting the Designated Market generally that are beyond the
reasonable control of the Lenders.

     "Specified Swap Amount" means, at any time, in respect of Swap Agreements
      ---------------------
to which any Lender is party, the Swap Termination Value relating thereto;
provided that for purposes of this definition, any Swap Termination Value that
is negative as to (i.e., owing by) any Lender shall be deemed equal to zero.

     "Subordinated Obligations" means, collectively the New Subordinated Notes
      ------------------------
and each other Indebtedness of Borrower that is subordinated to the Obligations,
all of the provisions of which (including amount, maturity, amortization,
interest rate, covenants, defaults, remedies and subordination), have been
approved in writing as to form and substance by the Administrative Agent and
designated in writing as "Subordinated Obligations" by the Administrative Agent
with the written consent of the Requisite Lenders. The Senior Unsecured Notes
are not Subordinated Obligations.

     "Subsidiary" means, as of any date of determination and with respect to any
      ----------
Person, any other corporation, partnership or other business entity (whether or
not, in either case, characterized as such or as a "joint venture"), whether now
existing or hereafter organized or acquired: (a) in the case of a corporation,
of which a majority of the securities having ordinary voting power for the
election of directors or other governing body (other than securities having such
power only by reason of the happening of a contingency) are at the time
beneficially owned by such Person and/or one or more Subsidiaries of such
Person, or (b) in the case of a partnership or other business entity, of which a
majority of the partnership or other ownership interests are at the time
beneficially owned by such Person and/or one or more of its Subsidiaries.

     "Swap Agreements" means one or more written agreements between Borrower and
      ---------------
one or more financial institutions providing for "swap," "cap," "collar" or
other interest rate protection with respect to any Indebtedness.

     "Swap Termination Value" means, in respect of any one or more Swap
      ----------------------
Agreements, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Agreements, (a) for any date on or after
the date such Swap Agreements have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
mark-to-market value(s) for 

                                      -25-
<PAGE>
 
such Swap Agreements, as determined by the Administrative Agent based upon one
or more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Agreements which may include any Lender.

     "Syndication Agent" means Salomon Smith Barney, Inc. The capacity of the
      -----------------
Syndication Agent is solely titular in nature, and except to the extent
expressly set forth herein, the Syndication Agent shall not have any rights or
obligations under the Loan Documents by reason of such capacity.

     "TCA" means Trading Cove Associates, a Connecticut general partnership, its
      ---
successors and assigns.

     "TCA Subordinated Notes" means subordinated notes issued in the aggregate
      ----------------------
principal amount of $90,000,000 pursuant to the Note Purchase Agreement dated as
of September 29, 1995, between Borrower and Sun International Hotels Limited.

     "Termination Event" means (a) a "reportable event" as defined in Section
      -----------------
4043 of ERISA (other than a reportable event that is not subject to the
               ----- ----
provision for 30 day notice to the PBGC), (b) the withdrawal of Borrower or any
of its ERISA Affiliates from a Pension Plan during any plan year in which it was
a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c) the
filing of a notice of intent to terminate a Pension Plan or the treatment of an
amendment to a Pension Plan as a termination thereof pursuant to Section 4041 of
ERISA, (d) the institution of proceedings to terminate a Pension Plan by the
PBGC or (e) any other event or condition which might reasonably be expected to
constitute grounds under ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan.

     "Title Company" means Chicago Title Insurance Company or such other title
      -------------
insurance company as may be reasonably satisfactory to Administrative Agent.

     "to the best knowledge of" means, when modifying a representation, warranty
      ------------------------
or other statement of any Person, that the fact or situation described therein
is known by the Person (or, in the case of a Person other than a natural Person,
known by a Responsible Official of that Person) making the representation,
warranty or other statement, or with the exercise of reasonable due diligence
under the circumstances (in accordance with the standard of what a reasonable
Person in similar circumstances would have done) should have been known by the
Person (or, in the case of a Person other than a natural Person, should have
been known by a Responsible Official of that Person). In the case of the
Borrower and the Tribe, knowledge of any Responsible Official of the Borrower
shall be attributed to the Tribe, and knowledge of any Responsible Official of
the Tribe shall be imputed to the Tribe.

                                      -26-
<PAGE>
 
          "Total Debt" means, as of each date of determination, all Recourse
           ----------
     Obligations other than Borrower's liability for payments under the
                 ----- ----
     Relinquishment Agreement.

          "Total Leverage Ratio" means, as of each date of determination, the
           --------------------
     ratio of (a) Total Debt as of that date, to (b) Adjusted EBITDA for the
     four Fiscal Quarter period ending on that date.

          "Town Agreement" means the Agreement dated as of June 16, 1994 between
           --------------
     the Tribe and the Town of Montville, Connecticut, as amended as of the
     Closing Date.

          "Tribal Council" means the Tribal Council of the Tribe elected in
           --------------
     accordance with the Constitution.

          "Tribe" means The Mohegan Tribe of Indians of Connecticut, a federally
           -----
     recognized Indian Tribe.

          "type", when used with respect to any Loan or Advance, means the
           ----
     designation of whether such Loan or Advance is a Base Rate Loan or Advance
     or a LIBOR Loan or Advance.

          "UCC Ordinance" means the Tribe's Ordinance Number 98-7.
           -------------

          "Unused Commitment" means, as of each date of determination, the
           -----------------
     difference between (a) the aggregate Commitment on that date and (b) the
     sum of (i) the outstanding principal amount of the Loans, (ii) the amount
     ---
     available for drawing under outstanding Letters of Credit, and (iii) the
     aggregate amount of all unreimbursed draws with respect to Letters of
     Credit.

          "Working Capital" means, as of each date of determination, the current
           ---------------
     assets of Borrower other than Cash and Cash Equivalents minus the current
                        ----- ----
     liabilities of Borrower, in each case determined in accordance with
     Generally Accepted Accounting Principles, consistently applied.

     1.2 Use of Defined Terms. Any defined term used in the plural shall refer
         --------------------
to all members of the relevant class, and any defined term used in the singular
shall refer to any one or more of the members of the relevant class.

     1.3 Accounting Terms. All accounting terms not specifically defined in
         ----------------
this Agreement shall be construed in conformity with, and all financial data
required to be submitted by this Agreement shall be prepared in conformity with,
Generally Accepted Accounting Principles applied on a consistent basis, except
as otherwise specifically prescribed herein. In the event that Generally
Accepted Accounting Principles change during the term of this 

                                      -27-
<PAGE>
 
Agreement such that the financial covenants contained in Sections 7.12 through
7.15, inclusive, would then be calculated in a different manner or with
different components, (a) Borrower, the Tribe and the Lenders agree to amend
this Agreement in such respects as are necessary to conform those covenants as
criteria for evaluating Borrower's financial condition to substantially the same
criteria as were effective prior to such change in Generally Accepted Accounting
Principles and (b) Borrower shall be deemed to be in compliance with the
financial covenants contained in such Sections during the 60 day period
following any such change in Generally Accepted Accounting Principles if and to
the extent that Borrower would have been in compliance therewith under Generally
Accepted Accounting Principles as in effect immediately prior to such change.

     1.4 Rounding. Any financial ratios required to be maintained by Borrower
         --------
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed in this Agreement and rounding
the result up or down to the nearest number (with a round-up if there is no
nearest number) to the number of places by which such ratio is expressed in this
Agreement.

     1.5 Exhibits and Schedules. All Exhibits and Schedules to this Agreement,
         ----------------------
either as originally existing or as the same may from time to time be
supplemented, modified or amended, are incorporated herein by this reference. A
matter disclosed on any Schedule shall be deemed disclosed on all Schedules.

     1.6 Miscellaneous Terms. The term "or" is disjunctive; the term "and" is
         -------------------
conjunctive. The term "shall" is mandatory; the term "may" is permissive.
Masculine terms also apply to females; feminine terms also apply to males. The
term "including" is by way of example and not limitation.

                                      -28-
<PAGE>
 
                                   ARTICLE 2.

                           LOANS AND LETTERS OF CREDIT
                           ---------------------------

     2.1 Loans-General .
         -------------  

          (a) Subject to the terms and conditions set forth in this Agreement,
at any time and from time to time from the Closing Date through the Maturity
Date, each Lender shall, pro rata according to its Pro Rata Share of the then
applicable Commitment, make revolving Advances to Borrower under the Commitment
in such amounts as Borrower may request that do not exceed in the aggregate at
any one time outstanding the amount of that Lender's Pro Rata Share of the then
applicable Commitment; provided that, giving effect to the Loan of which such
                       --------
Advance is a part, the sum of (i) the aggregate principal amount of the
                       ---
outstanding Loans plus (ii) the aggregate amount available for drawing under the
                  ----
outstanding Letters of Credit plus (iii) the aggregate amount of all
                              ----
unreimbursed draws with respect to all Letters of Credit, shall not exceed the
then applicable Commitment. Subject to the limitations set forth herein,
Borrower may borrow, repay and reborrow under this Agreement without premium or
penalty.

          (b) Each Loan shall be made pursuant to a Request for Loan which shall
specify the requested (i) date of such Loan, which shall be a Business Day in
the case of a Base Rate Loan and a LIBOR Business Day in the case of a LIBOR
Loan, (ii) amount of such Loan, (iii) type of such Loan, and (iv) in the case of
LIBOR Loans, the Interest Period for such Loan. Unless the Administrative Agent
has notified, in its sole and absolute discretion, Borrower to the contrary, a
Loan may be requested by telephone by a Senior Officer of Borrower. Borrower
shall immediately confirm each requested Loan by submitting a Request for Loan
conforming with the requirements of the preceding sentence to the Administrative
Agent by telecopier, with the original thereof to follow by mail. In the case of
the initial Loans to be made on the Closing Date, the Request for Loan to be
delivered by the Borrower shall be delivered to the Administrative Agent no
later than 12:00 noon, California time, one day before the Closing Date and such
Loans shall be Base Rate Loans only.

          (c) Promptly following receipt of a Request for Loan, the
Administrative Agent shall notify each Lender by telephone, telecopier or telex
of the date of the Loan and that Lender's Pro Rata Share of the Loan. Not later
than 12:00 noon, California time, in the case where a Base Rate Loan is
requested, and 10:00 a.m. California time, in the case where a LIBOR Loan is
requested, on the date specified for any Loan, each Lender shall make its Pro
Rata Share of the Loan in immediately available funds available to the
Administrative Agent at the Administrative Agent's Office. Upon fulfillment of
the applicable conditions set forth in Article 10, all Advances shall be
credited in immediately available funds to the Designated Deposit Account.


                                     -29-
<PAGE>
 
          (d) Unless the Requisite Lenders otherwise consent, each Loan under
     the Commitment shall be in an integral multiple of $1,000,000 which is
     equal to or greater than $5,000,000.

          (e) Unless the Administrative Agent otherwise consents, no Request for
     Loan may be revoked by Borrower after its submission to the Lenders by the
     Administrative Agent. In the event that the Administrative Agent consents
     to the revocation of any Request for Loan submitted by the Borrower,
     Borrower agrees that it shall reimburse the Administrative Agent and each
     Lender for any loss, cost, damage or expense associated with any
     redeployment of funds caused by such revocation.

          (f) If, as of the end of the Interest Period with respect to any LIBOR
     Loan, Borrower has not submitted a Request for Loan or orally requested a
     Base Rate Loan in accordance with Section 2.1(b), or if any Request for
     Loan submitted by Borrower for a LIBOR Loan fails to satisfy the notice
     periods specified in Section 2.3, then, in the absence of notice from
     Borrower to the contrary, Borrower shall be deemed to have requested a Base
     Rate Loan in an amount equal to the maturing LIBOR Loan, and the Lenders
     shall make the Advances necessary to make such Loan notwithstanding
     Sections 2.1(b) and 2.2.

          (g) The Loans and Advances made by the Lenders pursuant to this
     Agreement shall be evidenced hereby, without the requirement for the
     issuance of any Note or promissory note to any Lender, provided however
                                                            -------- -------
     that upon request from any Lender to Borrower submitted through the
     Administrative Agent from time to time, Borrower shall issue a Note to such
     Lender in the amount of that Lender's Pro Rata Share, which Note will
     thereafter serve as evidence of that Lender's Advances.

     2.2 Base Rate Loans. Each request by Borrower for a Base Rate Loan shall
         ---------------
be made pursuant to a Request for Loan or an oral request for loan submitted in
accordance with Section 2.1(b), in each case received at the Administrative
Agent's Office not later than 10:00 a.m. California time, on the Business Day
immediately preceding the Business Day upon which the requested Loan is to be
made.

     2.3 LIBOR Loans.
         -----------

          (a) Each request by Borrower for a LIBOR Loan shall be made pursuant
     to a Request for Loan or an oral request submitted in accordance with
     Section 2.1(b), in each case received at the Administrative Agent's Office
     not later than 9:00 a.m., California time, at least three LIBOR Business
     Days before the first day of the applicable Interest Period.

          (b) Two LIBOR Business Days prior to the first day of the applicable
     Interest Period, the Administrative Agent shall determine the applicable
     LIBOR (which determination shall be conclusive in the absence of manifest
     error) and 

                                      -30-
<PAGE>
 
     promptly shall give notice of the same to Borrower and the Lenders by
     telephone, telecopier or telex.

          (c) Unless all of the Lenders otherwise consent in writing, no LIBOR
     Loan may be requested during the continuance of a Default or Event of
     Default.

          (d) Nothing contained herein shall require any Lender to actually
     obtain the funds needed to make any LIBOR Advance in the Designated Market.

          (e) Unless the Administrative Agent otherwise consents, no more than
     five LIBOR Loans shall be outstanding at any one time.

          (f) No LIBOR Loan shall be made which would cause the aggregate amount
     of all LIBOR Loans having Interest Periods ending after any Reduction Date
     plus the aggregate face amount of all Letters of Credit having expiry dates
     (including any mandatory extensions thereof) after that Reduction Date to
     be in excess of the amount of the Commitment, as scheduled to be reduced
     pursuant to Section 2.5 on that Reduction Date.

      2.4 Letters of Credit.
          -----------------

          (a) Subject to the terms and conditions hereof, at any time and from
     time to time from the Closing Date through the Maturity Date, the Issuing
     Lender shall issue such Letters of Credit under the Commitment as Borrower
     may request by a Request for Letter of Credit which do not result in the
     aggregate effective face amount of all outstanding Letters of Credit being
     in excess of $25,000,000; provided that after giving effect to all such
                               -------- 
     Letters of Credit, the sum of (i) the aggregate principal amount of the
                            ---
     outstanding Loans plus (ii) the aggregate amount available for drawing
                       ----
     under the outstanding Letters of Credit plus (iii) the aggregate amount of
                                             ----
     all unreimbursed draws with respect to all Letters of Credit, shall not
     exceed the then applicable Commitment. No Letter of Credit shall be issued
     which would cause the aggregate amount of all LIBOR Loans having Interest
     Periods ending after any Reduction Date plus the aggregate face amount 
                                             ----
     of all Letters of Credit having expiry dates (including any mandatory
     extensions thereof) after that Reduction Date to be in excess of the amount
     of the Commitment, as scheduled to be reduced pursuant to Section 2.5 on
     that Reduction Date. Each Letter of Credit shall be in a form reasonably
     acceptable to the Issuing Lender. Unless all the Lenders otherwise consent
     in a writing delivered to the Administrative Agent, the terms of the
     Letters of Credit shall not exceed 12 months from the date of issuance
     thereof (or, in the case of any renewal, 12 months from the date of such
     renewal) and no Letter of Credit or renewal thereof shall have a term which
     exceeds the Maturity Date. Borrower will not request any Letter of Credit
     which is not reasonably necessary in the ordinary course of business of
     Borrower.

                                      -31-
<PAGE>
 
          (b) Each Request for Letter of Credit shall be submitted to the
     Issuing Lender, with a copy to the Administrative Agent, at least three
     Business Days prior to the date upon which the related Letter of Credit is
     proposed to be issued. The Administrative Agent shall promptly notify the
     Issuing Lender whether such Request for Letter of Credit, and the issuance
     of a Letter of Credit pursuant thereto, conforms to the requirements of
     this Agreement. Upon issuance of a Letter of Credit, the Issuing Lender
     shall promptly notify the Administrative Agent, and the Administrative
     Agent shall promptly notify the Lenders, of the amount and terms thereof.

          (c) Upon the issuance of a Letter of Credit, each Lender shall be
     deemed to have purchased a pro rata participation from the Issuing Lender,
     in an amount equal to that Lender's Pro Rata Share, of such Letter of
     Credit. Without limiting the scope and nature of each Lender's
     participation in any Letter of Credit, to the extent that the Issuing
     Lender has not been reimbursed by Borrower for any payment required to be
     made by the Issuing Lender under any Letter of Credit, each Lender shall,
     pro rata according to its Pro Rata Share, reimburse the Issuing Lender
     promptly upon demand for the amount of such payment through the
     Administrative Agent. The obligation of each Lender to so reimburse the
     Issuing Lender shall be absolute and unconditional and shall not be
     affected by the occurrence of an Event of Default or any other occurrence
     or event. Any such reimbursement shall not relieve or otherwise impair the
     obligation of Borrower to reimburse the Issuing Lender for the amount of
     any payment made by the Issuing Lender under any Letter of Credit together
     with interest as hereinafter provided.

          (d) Borrower agrees to pay to the Issuing Lender through the
     Administrative Agent an amount equal to any payment made by the Issuing
     Lender with respect to each Letter of Credit upon the date of each drawing
     thereunder, together with interest on such amount from the date of any
     payment made by the Issuing Lender at the Default Rate (provided that,
                                                             -------- ----
     subject to the terms and conditions hereof, Borrower may request a Base
     Rate Loan in accordance with this Agreement to finance such amounts at the
     rate ordinarily applicable to Base Rate Loans). The principal amount of any
     such payment shall be used to reimburse the Issuing Lender for the payment
     made by it under the Letter of Credit. Each Lender that has reimbursed the
     Issuing Lender pursuant to Section 2.4(c) for its Pro-Rata Share of any
     payment made by the Issuing Lender under a Letter of Credit shall thereupon
     acquire a pro-rata participation, to the extent of such reimbursement, in
     the claim of the Issuing Lender against Borrower under this Section 2.4(d)
     and shall share, in accordance with that pro-rata participation, in any
     payment (including any payment of interest with respect thereto) made by
     Borrower with respect to such claim, and the Administrative Agent shall
     remit to each such Lender its Pro Rata Share thereof in immediately
     available funds.

          (e) If Borrower fails to make the payment required by Section 2.4(d)
     upon demand, in lieu of the reimbursement to the Issuing Lender under
     Section 2.4(c) 

                                      -32-
<PAGE>
 
     the Issuing Lender may (but is not required to) without notice to or the
     consent of Borrower, instruct the Administrative Agent to cause Advances to
     be made by the Lenders under the Commitment in accordance with their Pro
     Rata Shares in an aggregate amount equal to the amount paid by the Issuing
     Lender with respect to that Letter of Credit and, for this purpose, the
     conditions precedent set forth in Article 10 shall not apply. The proceeds
     of such Advances shall be paid to the Issuing Lender to reimburse it for
     the payment made by it under the Letter of Credit. Such Advances shall be
     payable upon demand and shall bear interest at the Default Rate.

          (f) The issuance of any supplement, modification, amendment, renewal,
     or extension to or of any Letter of Credit shall be treated in all respects
     the same as the issuance of a new Letter of Credit.

          (g) The obligation of Borrower to pay to the Issuing Lender the amount
     of any payment made by the Issuing Lender under any Letter of Credit shall
     be absolute, unconditional, and irrevocable, subject only to performance by
     the Issuing Lender of its obligations to Borrower under Connecticut Uniform
     Commercial Code Section 42a-5-109. Without limiting the foregoing,
     Borrower's obligations shall not be affected by any of the following
     circumstances:

               (i)   any lack of validity or enforceability of the Letter of
          Credit, this Agreement, or any other agreement or instrument relating
          thereto;

               (ii)  any amendment or waiver of or any consent to departure from
          the Letter of Credit, this Agreement, or any other agreement or
          instrument relating thereto;

               (iii) the existence of any claim, setoff, defense, or other
          rights which Borrower may have at any time against the Issuing Lender,
          the Administrative Agent or any Lender, any beneficiary of the Letter
          of Credit or any other Person, whether in connection with the Letter
          of Credit, this Agreement, or any other agreement or instrument
          relating thereto, or any unrelated transactions;

               (iv)  any demand, statement, or any other document presented
          under the Letter of Credit proving to be forged, fraudulent, invalid,
          or insufficient in any respect or any statement therein being untrue
          or inaccurate in any respect whatsoever;

               (v)   payment by the Issuing Lender in good faith under the
          Letter of Credit against presentation of a draft or any accompanying
          document which does not strictly comply with the terms of the Letter
          of Credit;

                                      -33-
<PAGE>
 
               (vi)   the existence, character, quality, quantity, condition,
          packing, value or delivery of any property purported to be represented
          by documents presented in connection with any Letter of Credit or for
          any difference between any such property and the character, quality,
          quantity, condition, or value of such property as described in such
          documents;

               (vii)  the time, place, manner, order or contents of shipments or
          deliveries of property as described in documents presented in
          connection with any Letter of Credit or the existence, nature and
          extent of any insurance relative thereto;

               (viii) the solvency or financial responsibility of any party
          issuing any documents in connection with a Letter of Credit;

               (ix)   any failure or delay in notice of shipments or arrival of
          any property;

               (x)    any error in the transmission of any message relating to a
          Letter of Credit not caused by the Issuing Lender, or any delay or
          interruption in any such message;

               (xi)   any error, neglect or default of any correspondent of the
          Issuing Lender in connection with a Letter of Credit;

               (xii)  any consequence arising from acts of God, war,
          insurrection, civil unrest, disturbances, labor disputes, emergency
          conditions or other causes beyond the control of the Issuing Lender;

               (xiii) so long as the Issuing Lender in good faith determines
          that the contract or document appears to comply with the terms of the
          Letter of Credit, the form, accuracy, genuineness or legal effect of
          any contract or document referred to in any document submitted to the
          Issuing Lender in connection with a Letter of Credit; and

               (xiv)  where the Issuing Lender has acted in good faith and
          observed general banking usage, customs or practices, any other
          circumstances whatsoever.

          (h) The Issuing Lender shall be entitled to the protection accorded to
     the Administrative Agent pursuant to Section 12.6, mutatis mutandis.
                                                        ------- --------

     2.5 Automatic Reduction of Commitment. The Commitment shall automatically
         ---------------------------------
reduce by the Reduction Amount on each Reduction Date. 

                                      -34-
<PAGE>
 
     2.6 Voluntary Reduction of Commitment. Borrower shall have the right, at
         ---------------------------------
any time and from time to time, without penalty or charge, upon at least five
Business Days prior written notice to the Administrative Agent, voluntarily to
permanently and irrevocably reduce, in aggregate principal amounts which are not
less than $5,000,000 and in an integral multiple of $1,000,000, or to terminate,
the then undisbursed portion of the Commitment, provided that (i) any such
reduction or termination shall be accompanied by all accrued and unpaid
commitment fees with respect to any portion of the Commitment being reduced or
terminated, and (ii) no such reduction or termination shall affect the further
scheduled reductions of Commitment in accordance with Section 2.5. 

     2.7 Optional Increases to the Commitment.
         ------------------------------------

          (a) Provided that no Default or Event of Default then exists, Borrower
     may, at any time prior to the date which is the second anniversary of the
     Closing Date, request in writing that the then effective Commitment be
     increased to an amount which is not greater than $500,000,000 minus the
                                                                   -----
     amount of any reductions to the Commitment which have then occurred
     pursuant to Sections 2.5 or 2.6, in accordance with the provisions of this
     Section. Any request under this Section shall be submitted by Borrower to
     the Lenders through the Administrative Agent not less than thirty days
     prior to the proposed increase, specify the proposed effective date and
     amount of such increase and be accompanied by a Certificate signed by a
     Senior Officer of Borrower (and consented to by the Tribe acting through a
     Senior Officer), stating that no Default or Event of Default exists as of
     the date of the request or will result from the requested increase.
     Borrower may also specify any fees offered to those Lenders which agree to
     an increase in the amount of their Pro Rata Share of the Commitment (which
     fees may be variable based upon the amount which any such Lender is willing
     to assume as an increase to the amount of its Pro Rata Share of the
     increased Commitment). The consent of the Lenders, as such, shall not be
     required for an increase in the amount of the Commitment pursuant to this
     Section.

          (b) Each Lender may approve or reject a request for an increase in the
     amount of the Commitment in its sole and absolute discretion and, absent an
     affirmative written response within thirty days after receipt of such
     request, shall be deemed to have rejected the request. The rejection of
     such a request by any number of Lenders shall not affect Borrower's right
     to increase the Commitment pursuant to this Section.

          (c) In responding to a request under this Section, each Lender which
     is willing to increase the amount of its Pro Rata Share of the increased
     Commitment shall specify the amount of the proposed increase which it is
     willing to assume. Each consenting Lender shall be entitled to participate
     ratably (based on its Pro Rata Share of the Commitment before such
     increase) in any resulting increase in the Commitment, subject to the right
     of the Administrative Agent to adjust allocations of the increased
     Commitment so as to result in the amounts of the Pro Rata Shares of the
     Lenders being in integral multiples of $100,000. 

                                      -35-
<PAGE>
 
          (d) If the aggregate principal amount offered to be assumed by the
     consenting Lenders is less than the amount requested, Borrower may (i)
     reject the proposed increase in its entirety, (ii) accept the offered
     amounts or (iii) designate new lenders who qualify as Eligible Assignees
     and which are reasonably acceptable to the Administrative Agent as
     additional Lenders hereunder in accordance with clause (e) of this Section
     (each, a "New Lender"), which New Lenders may assume the amount of the
     increase in the Commitment that has not been assumed by the consenting
     Lenders.

          (e) Each New Lender designated by Borrower and reasonably acceptable
     to the Administrative Agent shall become an additional party hereto as a
     New Lender concurrently with the effectiveness of the proposed increase in
     the Commitment upon its execution of an instrument of joinder to this
     Agreement which is in form and substance reasonably acceptable to the
     Administrative Agent and which, in any event, contains the representations,
     warranties, indemnities and other protections afforded to the
     Administrative Agent and the other Lenders which would be granted or made
     by an Eligible Assignee by means of the execution of an Assignment
     Agreement.

          (f) Subject to the foregoing, any increase to the Commitment requested
     under this Section shall be effective as of the date proposed by Borrower
     and shall be in the principal amount equal to (i) the amount which
     consenting Lenders are willing to assume as increases to the amount of
     their Pro Rata Share plus (ii) the amount offered by any New Lenders. Upon
                          ----
     the effectiveness of any such increase, Borrower shall issue (x)
     replacement Notes to each affected Lender and new Notes to each New Lender,
     and the percentage Pro Rata Shares of each Lender will be adjusted to give
     effect to the increase in the Commitment and set forth in a new Schedule (
     )1 issued by the Administrative Agent, (y) execute and deliver to the
     Administrative Agent such amendments to the Loan Documents as the
     Administrative Agent may reasonably request relating to such increase,
     including without limitation an amendment to the Leasehold Mortgage
     executed by Borrower and the Tribe reflecting the increase of the amounts
     secured thereby, and (z) Borrower shall provide to the Administrative Agent
     an endorsement to its ALTA lenders policy of title insurance, in form and
     substance reasonably acceptable to the Administrative Agent, insuring the
     continued priority and perfection of the Leasehold Mortgage.

     2.8 Administrative Agent's Right to Assume Funds Available for Advances.
         -------------------------------------------------------------------
Unless the Administrative Agent shall have been notified by any Lender prior to
the funding by the Administrative Agent of any Loan that such Lender does not
intend to make available to the Administrative Agent such Lender's Pro Rata
Share of the total amount of such Loan, the Administrative Agent may assume that
such Lender has made such amount available to the Administrative Agent on the
date of the Loan and the Administrative Agent may, in reliance upon such
assumption, make available to Borrower a corresponding amount. If the
Administrative Agent has made funds available to Borrower based on such
assumption and such corresponding amount is not in fact made available to the
Administrative Agent by such Lender, the Administrative Agent shall be entitled
to recover such corresponding amount on 

                                      -36-
<PAGE>
 
demand from such Lender, which demand shall be made in a reasonably prompt
manner. If such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent promptly shall
notify Borrower and Borrower shall pay such corresponding amount to the
Administrative Agent. The Administrative Agent also shall be entitled to recover
from such Lender interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the Administrative
Agent to Borrower to the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to the Federal Funds Rate.
Nothing herein shall be deemed to relieve any Lender from its obligation to
fulfill its Pro Rata Share or to prejudice any rights which the Administrative
Agent or Borrower may have against any Lender as a result of any default by such
Lender hereunder. 

     2.9 Collateral. The Loans, together with all other Obligations, shall be
         ----------
secured by the Liens created by the Collateral Documents. Each Approved Swap
Agreement shall be secured by the Lien of the Collateral Documents (a) on a pari
                                                                            ----
passu basis to the extent of the associated Swap Termination Value, and (b) to
----- 
the extent of any excess, on a basis which is in all respects subordinated to
all other Obligations. 

                                      -37-
<PAGE>
 
                                   ARTICLE 3.
                               PAYMENTS AND FEES
                               -----------------

     3.1 Principal and Interest. 
         ----------------------

          (a) Interest shall be payable on the outstanding daily unpaid
     principal amount of each Loan from the date thereof until payment in full
     is made and shall accrue and be payable at the rates set forth herein
     before and after default, before and after maturity, before and after
     judgment, and before and after the commencement of any proceeding under any
     Debtor Relief Law. At the option of the Requisite Lenders, interest on
     overdue interest shall itself bear interest at the Default Rate, and shall
     be compounded with the principal Obligations quarterly, to the fullest
     extent permitted by applicable Laws.

          (b) Interest accrued with respect to Base Rate Loans shall be payable
     quarterly in arrears on each Quarterly Payment Date. Except as otherwise
     provided in Section 3.9, the unpaid principal amount of each Base Rate Loan
     shall bear interest at a fluctuating rate per annum equal to the Base Rate
     plus the Applicable Percentage for Base Rate Loans. Each change in the
     interest rate hereunder shall take effect simultaneously with the
     corresponding change in the Base Rate or the Applicable Percentage.

          (c) Interest on each LIBOR Loan which is for a term of three months or
     less shall be due and payable on the last day of the related Interest
     Period. Interest accrued on each other LIBOR Loan shall be due and payable
     on the date which is three months after the date such LIBOR Loan was made,
     every three months thereafter and, in any event, on the last day of the
     related Interest Period. Except as otherwise provided in Section 3.9, the
     unpaid principal amount of any LIBOR Loan shall bear interest at a rate per
     annum equal to the LIBOR for that LIBOR Loan plus the Applicable Percentage
     for LIBOR Loans. While the LIBOR for each LIBOR Loan shall remain fixed for
     the entire related Interest Period, the Applicable Percentage for each
     LIBOR Loan shall change simultaneously with the corresponding change in
     Applicable Percentages generally.

          (d) If not sooner paid, the principal Indebtedness evidenced by the
     Loan Documents shall be payable as follows:


               (i)  the principal amount of each LIBOR Loan shall be payable on
          the last day of the Interest Period for such Loan;

               (ii) the amount, if any, by which the aggregate principal amount
          of the Loans plus the aggregate amount available for drawing under
                       ----
          outstanding Letters of Credit plus the aggregate amount of all
                                        ----

                                      -38-
<PAGE>
 
          unreimbursed draws with respect to Letters of Credit at any time
          exceeds the Commitment shall be payable immediately; and 


               (iii) the principal Indebtedness evidenced by the Loan Documents
          shall in any event be payable on the Maturity Date.

          (e) Subject to Section 3.8, the Loans may, at any time and from time
     to time, voluntarily be paid or prepaid in whole or in part without premium
     or penalty, provided that with respect to any voluntary prepayment of the
                 --------
     Loans under this Section 3.1(e), (i) any partial prepayment shall be in an
     integral multiple of $1,000,000 which is not less than $5,000,000, and (ii)
     the Administrative Agent shall have received written notice of any
     prepayment prior to 9:00 a.m. California time one Business Day (or, in the
     case of any prepayment of any LIBOR Loan, three LIBOR Business Days) before
     the date of prepayment, which notice shall identify the date and amount of
     the prepayment.

     3.2 Arrangement Fees. On the Closing Date, Borrower shall pay to the
         ----------------
Administrative Agent for the account of the Lead Arranger a fee in the amount
set forth in a letter agreement dated March 3, 1999 between the Lead Arranger,
the Administrative Agent and Borrower. This fee is fully earned as of the
Closing Date, is solely for the account of Lead Arranger and is non-refundable.

     3.3 Annual Agency Fees. On the Closing Date and on each anniversary
         ------------------
thereof, Borrower shall pay to the Administrative Agent agency fees in the
amounts set forth in a letter agreement dated March 3, 1999 between the Lead
Arranger, Administrative Agent and Borrower. These agency fees are fully earned
as of the date when due, are solely for the account of Administrative Agent and
are non-refundable. 

     3.4 Facility Fees. On the Closing Date, Borrower shall pay to the
         -------------
Administrative Agent, for the account of each Lender, a non-refundable facility
fee in amount equal to (a) the amount of that Lender's Pro Rata Share, times (b)
a percentage based on the principal amount of the Commitment which such Lender
extended a written offer to Borrower to assume (without regard to the Pro Rata
Share actually allocated to such Lender), as set forth in a letter agreement
dated March 3, 1999 among the Lead Arranger, the Administrative Agent and
Borrower. 

     3.5 Commitment Fees. From the Closing Date, the Borrower shall pay to the
         ---------------
Administrative Agent, for the account of the Lenders according to their Pro Rata
Shares, commitment fees equal to the product of (a) the Applicable Percentage
for Commitment Fees times (b) the average daily Unused Commitment for that
calendar quarter. The commitment fees shall be payable quarterly in arrears on
each Quarterly Payment Date and upon any termination of the Commitment. 

                                      -39-
<PAGE>
 
     3.6 Letter of Credit Fees. Concurrently with the issuance of each Letter
         ---------------------
of Credit, Borrower shall pay letter of credit fees (a) to the Issuing Lender,
for the sole account of the Issuing Lender, in an amount set forth in a letter
agreement dated March 3, 1999 between the Issuing Lender, Lead Arranger and
Borrower, and (b) to the Administrative Agent, for the ratable account of the
Lenders in accordance with their Pro Rata Shares of the Commitment, in an amount
equal to the Applicable Percentage for LIBOR Loans times the maximum amount
available for drawing under such Letter of Credit, in each case for the tenor of
such Letter of Credit. The Administrative Agent shall promptly make available to
the Lenders in immediately available funds, pro-rata according to their Pro Rata
Share, the standby letter of credit fees which are for the account of the
Lenders. Borrower shall also pay transfer, issuance, check fees and such other
fees as the Issuing Lender normally charges (not to include origination fees) in
connection with standby letters of credit and activity pursuant thereto, which
fees shall be solely for the account of the Issuing Lender. 

     3.7 Increased Commitment Costs. If any Lender shall have determined that
         --------------------------
the introduction after the date hereof of any applicable law, rule, regulation
or guideline regarding capital adequacy, or any change therein or any change in
the interpretation or administration thereof by any central bank or other
Governmental Agency charged with the interpretation or administration thereof,
or compliance by that Lender (or its LIBOR Lending Office) or any corporation
controlling that Lender, with any request, guidelines or directive regarding
capital adequacy (whether or not having the force of law) of any such central
bank or other authority, affects or would affect the amount of capital required
or expected to be maintained by that Lender or any corporation controlling that
Lender and (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy and such Lender's desired return on
capital) determines that the amount of such capital is increased as a
consequence of its obligations under this Agreement, then, upon demand of such
Lender, Borrower shall immediately pay to that Lender, from time to time as
specified by that Lender, additional amounts sufficient to compensate that
Lender for such increase.

     3.8 LIBOR Fees and Costs.
         --------------------

          (a) If, after the date hereof, the existence or occurrence of any
     Special Circumstance:


               (i) shall subject any Lender or its LIBOR Lending Office to any
          tax, duty or other charge or cost with respect to any LIBOR Advance,
          any Note or its obligation to make LIBOR Advances, or shall change the
          basis of taxation of payments to any Lender of the principal of or
          interest on any LIBOR Advance or any other amounts due under this
          Agreement in respect of any LIBOR Advance, any Note or its obligation
          to make LIBOR Advances (except for changes in any tax on the overall
          net income, gross income or gross receipts of such Lender or its LIBOR
          Lending Office); 

                                      -40-
<PAGE>
 
                (ii)  shall impose, modify or deem applicable any reserve
        (including, without limitation, any reserve imposed by the Board of
         ---------
        Governors of the Federal Reserve System), special deposit or similar
        requirements against assets of, deposits with or for the account of, or
        credit extended by, any Lender or its LIBOR Lending Office; or

                (iii) shall impose on any Lender or its LIBOR Lending Office or
        the Designated Market any other condition affecting any LIBOR Advance,
        any Note, its obligation to make LIBOR Advances or this Agreement, or
        shall otherwise affect any of the same; (i)

     and the result of any of the foregoing, as determined by such Lender,
     increases the cost to such Lender or its LIBOR Lending Office of making or
     maintaining any LIBOR Advance or in respect of any LIBOR Advance, any Note
     or its obligation to make LIBOR Advances or reduces the amount of any sum
     received or receivable by such Lender or its LIBOR Lending Office with
     respect to any LIBOR Advance, any Note or its obligation to make LIBOR
     Advances (assuming such Lender's LIBOR Lending Office had funded 100% of
     its LIBOR Advance in the Designated Market), then, upon demand by such
     Lender (with a copy to the Administrative Agent), Borrower shall pay to
     such Lender such additional amount or amounts as will compensate such
     Lender for such increased cost or reduction (determined as though such
     Lender's LIBOR Lending Office had funded 100% of its LIBOR Advance in the
     Designated Market). A statement of any Lender claiming compensation under
     this subsection, providing supporting calculation, and setting forth the
     additional amount or amounts to be paid to it hereunder shall be conclusive
     in the absence of manifest error. Each Lender agrees to endeavor promptly
     to notify Borrower of any event of which it has actual knowledge occurring
     after the Closing Date, which will entitle such Lender to compensation
     pursuant to this Section, and agrees to designate a different LIBOR Lending
     Office promptly if such designation will avoid the need for or reduce the
     amount of such compensation and will not, in the judgment of such Lender,
     otherwise be disadvantageous to such Lender. If any Lender claims
     compensation under this Section, Borrower may at any time, upon at least
     four LIBOR Business Days' prior notice to the Administrative Agent and such
     Lender and upon payment in full of the amounts provided for in this Section
     through the date of such payment plus any prepayment fee required by
     Section 3.8(d), pay in full the affected LIBOR Advances of such Lender or
     request that such LIBOR Advances be converted to Base Rate Advances.

          (b) If, after the date hereof, the existence or occurrence of any
     Special Circumstance shall, in the opinion of any Lender, make it unlawful,
     impossible or impracticable for such Lender or its LIBOR Lending Office to
     make, maintain or fund its portion of any LIBOR Loan, or materially
     restrict the ability of such Lender to purchase or sell, or to take
     deposits of, dollars in the Designated Market, or to determine or charge
     interest rates based upon the LIBOR, and such Lender shall so notify the
     Administrative Agent, then such Lender's obligation to make LIBOR 

                                      -41-
<PAGE>
 
     Advances shall be suspended for the duration of such illegality,
     impossibility or impracticability and the Administrative Agent forthwith
     shall give notice thereof to the other Lenders and Borrower. Upon receipt
     of such notice, the outstanding principal amount of such Lender's LIBOR
     Advances, together with accrued interest thereon, automatically shall be
     converted to Base Rate Advances on either (1) the last day of the Interest
     Period(s) applicable to such LIBOR Advances if such Lender may lawfully
     continue to maintain and fund such LIBOR Advances to such day(s) or (2)
     immediately if such Lender may not lawfully continue to fund and maintain
     such LIBOR Advances to such day(s), provided that in such event the
                                         --------
     conversion shall not be subject to payment of a prepayment fee under
     Section 3.8(d). In the event that any Lender is unable, for the reasons set
     forth above, to make, maintain or fund its portion of any LIBOR Loan, such
     Lender shall fund such amount as a Base Rate Advance for the same period of
     time, and such amount shall be treated in all respects as a Base Rate
     Advance.

               (c) If, with respect to any proposed LIBOR Loan:

                    (i) the Administrative Agent reasonably determines that, by
               reason of circumstances affecting the Designated Market generally
               that are beyond the reasonable control of the Lenders, deposits
               in dollars (in the applicable amounts) are not being offered to
               each of the Lenders in the Designated Market for the applicable
               Interest Period; or

                    (ii) the Requisite Lenders advise the Administrative Agent
               that the LIBOR as determined by the Administrative Agent (A) does
               not represent the effective pricing to such Lenders for deposits
               in dollars in the Designated Market in the relevant amount for
               the applicable Interest Period, or (B) will not adequately and
               fairly reflect the cost to such Lenders of making the applicable
               LIBOR Advances; 

          then the Administrative Agent forthwith shall give notice thereof to
          Borrower and the Lenders, whereupon until the Administrative Agent
          notifies Borrower that the circumstances giving rise to such
          suspension no longer exist, the obligation of the Lenders to make any
          future LIBOR Advances shall be suspended. If at the time of such
          notice there is then pending a Request for Loan that specifies a LIBOR
          Loan, such Request for Loan shall be deemed to specify a Base Rate
          Loan.

               (d) Upon payment or prepayment of any LIBOR Advance (other than
          as the result of a conversion required under Section 3.8(b)), on a day
          other than the last day in the applicable Interest Period (whether
          voluntarily, involuntarily, by reason of acceleration, or otherwise),
          or upon the failure of Borrower to borrow on the date or in the amount
          specified for a LIBOR Loan in any Request for Loan, Borrower shall pay
          to the appropriate Lender a prepayment fee or failure to borrow fee,
          as the 

                                      -42-
<PAGE>
 
          case may be, calculated as follows (and determined as though 100% of
          the LIBOR Advance had been funded in the Designated Market):

                    (i) principal amount of the LIBOR Advance, times the number
                                                               -----
               of days between the date of prepayment or failure to borrow and
               the last day in the applicable Interest Period, divided by 360,
                                                               -------
               times the applicable Interest Differential; plus
               -----                                       ----

                    (ii) all actual out-of-pocket expenses (other than those
               taken into account in the calculation of the Interest
               Differential) incurred by the Lender (excluding allocations of
                                                     ---------
               any expense internal to that Lender) and reasonably attributable
               to such payment, prepayment or failure to borrow;

         provided that no prepayment fee or failure to borrow fee shall be
         --------
         payable (and no credit or rebate shall be required) if the product of
         the foregoing formula is not a positive number. Each Lender's
         determination of the amount of any prepayment fee or failure to borrow
         fee payable under this Section 3.8(d) shall be based upon the
         Administrative Agent's determination of the applicable Interest
         Differential but shall otherwise be conclusive in the absence of
         manifest error.

     3.9 Default Rate. Upon the occurrence and during the continuation of any
         ------------
Default, the outstanding principal amount of the Loans shall, at the option of
the Requisite Lenders, thereafter bear interest at a rate per annum which is 2%
per annum in excess of the otherwise applicable rate, to the fullest extent
permitted by applicable Laws. Upon the occurrence and during the continuation of
any Default or Event of Default, accrued and unpaid interest on past due amounts
(including, without limitation, interest on past due interest) shall be payable
 ---------
upon demand and shall be compounded quarterly, on the last day of each calendar
quarter, to the fullest extent permitted by applicable Laws. 

     3.10 Computation of Interest and Fees. Computation of interest on Base
          --------------------------------
Rate Loans shall be calculated on the basis of a year of 365 or 366 days, as the
case may be, and the actual number of days elapsed. Computation of interest on
LIBOR Loans and on fees payable under this Agreement shall be calculated on the
basis of a year of 360 days and the actual number of days elapsed. Borrower
acknowledges that such latter calculation method will result in a higher yield
to the Lenders than a method based on a year of 365 or 366 days. Any Loan that
is repaid on the same day on which it is made shall bear interest for one day.

     3.11 Non-Business Days. If any payment to be made by Borrower or any other
          -----------------
Party under any Loan Document shall come due on a day other than a Business Day,
payment shall instead be considered due on the next succeeding Business Day and
the extension of time shall be reflected in computing interest.

                                      -43-
<PAGE>
 
     3.12 Manner and Treatment of Payments.
          --------------------------------

                  (a) Each payment hereunder (except payments pursuant to
                                              ------
         Sections 3.7, 3.8, 13.11 and 13.15) or on the Notes or under any other
         Loan Document shall be made, without setoff, counterclaim or deduction
         of any kind, to the Administrative Agent, at the Administrative Agent's
         Office, for the account of each of the Lenders or the Administrative
         Agent, as the case may be, in immediately available funds not later
         than 11:00 a.m., California local time, on the day of payment (which
         must be a Business Day). All later payments shall be deemed received on
         the next succeeding Business Day. The amount of all payments received
         by the Administrative Agent for the account of each Lender shall be
         paid by the Administrative Agent to the applicable Lender in
         immediately available funds and, if such payment was received by the
         Administrative Agent by 11:00 a.m., California local time, on a
         Business Day and not so made available to the account of a Lender on
         that Business Day, the Administrative Agent shall reimburse that Lender
         for the cost to such Lender of funding the amount of such payment at
         the Federal Funds Rate. All payments shall be made in lawful money of
         the United States of America.

                  (b) Each payment or prepayment on account of any Loan shall be
         made and applied pro rata according to the outstanding Advances made by
         each Lender comprising such Loan.

                  (c) Each Lender shall use its best efforts to keep a record of
         Advances made by it and payments received by it with respect to its
         Note and such record shall be presumptive evidence of the amounts
         owing. Notwithstanding the foregoing sentence, no Lender shall be
         liable to any Party for any failure to keep such a record, and no such
         failure shall affect the amount of the Obligations hereunder.

     3.13 Funding Sources. Nothing in this Agreement shall be deemed to
          ---------------
obligate any Lender to obtain the funds for any Loan or Advance in any
particular place or manner or to constitute a representation by any Lender that
it has obtained or will obtain the funds for any Loan or Advance in any
particular place or manner.

     3.14 Failure to Charge Not Subsequent Waiver. Any decision by the
          ---------------------------------------
Administrative Agent or any Lender not to require payment of any interest
(including interest at the Default Rate), fee, cost or other amount payable
 ---------
under any Loan Document, or to calculate any amount payable by a particular
method, on any occasion shall in no way limit or be deemed a waiver of the
Administrative Agent's or such Lender's right to require full payment of any
interest (including interest at the Default Rate), fee, cost or other amount
          ---------
payable under any Loan Document, or to calculate an amount payable by another
method, on any other or subsequent occasion. 

     3.15 Administrative Agent's Right to Assume Payments Will be Made by
          ---------------------------------------------------------------
Borrower. Unless the Administrative Agent shall have been notified by Borrower
--------
prior to the 

                                      -44-
<PAGE>
 
date on which any payment to be made by Borrower hereunder is due that Borrower
does not intend to remit such payment, the Administrative Agent may, in its
discretion, assume that Borrower has remitted such payment when so due and the
Administrative Agent may, in its discretion and in reliance upon such
assumption, make available to each Lender on such payment date an amount equal
to such Lender's share of such assumed payment. If Borrower has not in fact
remitted such payment to the Administrative Agent, each Lender shall forthwith
on demand repay to the Administrative Agent the amount of such assumed payment
made available to such Lender, together with interest thereon in respect of each
day from and including the date such amount was made available by the
Administrative Agent to such Lender to the date such amount is repaid to the
Administrative Agent at the Federal Funds Rate. 

     3.16 Authority to Charge Account. Borrower hereby authorizes the
          ---------------------------
Administrative Agent to charge the Designated Deposit Account or any other
demand deposit account maintained by Borrower with the Administrative Agent, in
such amounts as may from time to time be necessary to cause timely payment of
principal, interest, fees and other charges payable by Borrower under the Loan
Documents, but only to the extent that any such payment is not otherwise made
when due. Nothing herein shall obligate the Administrative Agent to charge any
such account in this manner or to charge any account at a time when there are
not sufficient good funds in such account. 

     3.17 Fee Determination Detail. The Administrative Agent, and any Lender,
          ------------------------
shall provide reasonable detail to Borrower regarding the manner in which the
amount of any payment to the Lenders, or that Lender, under Article 3 has been
determined. 

     3.18 Survivability. All of Borrower's obligations under Sections 3.7 and
          -------------
3.8 shall survive for one year following the date on which all Loans hereunder
are fully paid; provided, however, that such obligations shall not, from and
                --------
after the date on which all Loans hereunder are fully paid, be deemed secured
Obligations for any purpose under the Loan Documents.

     3.19 Withholding Gross-Up. Each payment of any amount payable by Borrower
          --------------------
or any other Party under this Agreement or any other Loan Document shall be made
free and clear of, and without reduction by reason of, any taxes, assessments or
other charges imposed by any Governmental Agency, central bank or comparable
authority, excluding (i) taxes imposed on or measured in whole or in part by
           ---------
overall net income, gross income or gross receipts, (ii) franchise taxes imposed
on any Lender by (A) any jurisdiction (or political subdivision thereof) in
which it is organized or maintains its principal office or LIBOR Lending Office
or (B) any jurisdiction (or political subdivision thereof) in which it is "doing
business", (iii) any withholding taxes or other taxes based on gross income
imposed by the United States of America that are not attributable to any change
in any Law or the interpretation or administration of any Law by any
Governmental Agency and (iv) any withholding tax 

                                      -45-
<PAGE>
 
or other taxes based on gross income imposed by the United States of America for
any period with respect to which it has failed to provide Borrower with the
appropriate form or forms required by Section 13.23, to the extent such forms
are then available under applicable Laws (all such non-excluded taxes,
assessments or other charges being hereinafter referred to as "Taxes"). To the
extent that Borrower or any other Party is obligated by applicable Laws to make
any deduction or withholding on account of Taxes from any amount payable to any
Lender under this Agreement, they shall (i) make such deduction or withholding
and pay the same to the relevant Governmental Agency and (ii) pay such
additional amount to that Lender as is necessary to result in that Lender's
receiving a net after-Tax amount equal to the amount to which that Lender would
have been entitled under this Agreement absent such deduction or withholding. If
and when receipt of such payment results in an excess payment or credit to that
Lender on account of such Taxes, that Lender shall promptly refund such excess
to Borrower or the relevant Party. 

                                      -46-
<PAGE>
 
                                   ARTICLE 4.
                   REPRESENTATIONS AND WARRANTIES OF THE TRIBE

     In order to induce the Creditors to enter into this Agreement and the other
Loan Documents to be executed as of the Closing Date, the Tribe represents and
warrants to the Creditors that, as of the Closing Date (but not as of any date
subsequent thereto).

     4.1 Existence and Qualification; Power; Compliance With Laws. The Tribe is
         --------------------------------------------------------
federally recognized as a Indian Tribe pursuant to a determination of the
Assistant Secretary - Indian Affairs, dated March 7, 1994, published in the
Federal Register on March 15, 1994, as amended by a correction dated July 1,
1994, published in the Federal Register on July 20, B. 1994, and as an Indian
Tribal government pursuant to Sections 7701(a)(40)(A) and 7871(a) of the
Internal Revenue Code, Title 26 U.S.C. Borrower is a governmental
instrumentality of the Tribe. As of the Closing Date, each of the Tribe and
Borrower is a non-taxable entity for purposes of federal income taxation under
the Internal Revenue Code, Title 26 U.S.C., and the gaming and other revenues of
Borrower are exempt from federal income taxation. To the extent required by Law,
Borrower and the Tribe are qualified to do business and are in good standing
under the laws of each jurisdiction in which they are required to be qualified
by reason of the location or the conduct of their business. The Tribe and the
Borrower each have all requisite power and authority to execute and deliver each
Loan Document to which they are a Party and to perform their respective
Obligations. The Tribe and Borrower are in material compliance with the terms of
the Compact, the Gaming Authority Ordinance, the Gaming Ordinance and with all
Laws and other legal requirements applicable to their existence and business
(including without limitation, IGRA and all Gaming Laws), have obtained all
authorizations, consents, approvals, orders, licenses and permits from, and have
accomplished all filings, registrations and qualifications with, or obtained
exemptions from any of the foregoing from, any Governmental Agency that are
necessary for the transaction of their business, except where the failure so to
file, register, qualify or obtain exemptions does not constitute a Material
Adverse Effect.

     4.2 Authority; Compliance With Other Agreements and Instruments and
         ---------------------------------------------------------------
Government Regulations. The execution, delivery and performance by the Tribe
----------------------
and by Borrower of the Loan Documents have been duly authorized by all necessary
Tribal Council , Management Board and other action, and do not: 

          (a) require any consent or approval not heretofore obtained of any
     enrolled tribal member, Tribal Council member, Management Board Member,
     security holder or creditor;

          (b) violate or conflict with any provision of the Constitution,
     charter, bylaws or other governing documents of the Tribe or of Borrower;

                                      -47-
<PAGE>
 
          (c) result in or require the creation or imposition of any Lien or
     Right of Others (other than pursuant to the Collateral Documents) upon or
     with respect to any Authority Property now owned or leased or hereafter
     acquired;

          (d) violate any Law or Requirement of Law, including any Gaming Law,
     applicable to the Tribe or Borrower;

          (e) constitute a "transfer of an interest" or an "obligation incurred"
     that is avoidable by a trustee under Section 548 of the Bankruptcy Code of
     1978, as amended, or constitute a "fraudulent conveyance," "fraudulent
     obligation" or "fraudulent transfer" within the meanings of the Uniform
     Fraudulent Conveyances Act or Uniform Fraudulent Transfer Act, as enacted
     in any applicable jurisdiction;

          (f) result in a material breach of or default under, or would, with
     the giving of notice or the lapse of time or both, constitute a material
     breach of or default under, or cause or permit the acceleration of any
     obligation owed under, any mortgage, indenture or loan or credit agreement
     or any other Contractual Obligation to which the Tribe or Borrower is a
     party or by which the Tribe, Borrower or any of their Property is bound or
     affected; or

          (g) require any consent or approval of any Governmental Agency, or any
     notice to, registration or qualification with any Governmental Agency, not
     heretofore obtained or obtained concurrently with the Closing Date;

and the Tribe and Borrower are not in violation of, or default under, any
Requirement of Law or Contractual Obligation, or any indenture, loan or credit
agreement described in Section 4.2(f), in any respect that constitutes a
Material Adverse Effect.

     4.3 No Governmental Approvals Required. Except for the consent of the
         ----------------------------------  ------
Bureau of Indian Affairs pursuant to 25 U.S.C ss.81 (which consent is being
obtained concurrently with the execution and delivery of this Agreement), no
authorization, consent, approval, order, license or permit from, or filing,
registration or qualification with, any Governmental Agency is required to
authorize or permit under applicable Laws the execution, delivery and
performance by the Tribe and the Borrower of the Loan Documents to which they
are parties.

     4.4 The Nature of Borrower. The Tribe has no Subsidiaries and no
         ----------------------
Affiliates which are included in or controlled by or through Borrower. All
activities of the Tribe constituting or relating to the ownership and operation
of gaming facilities (including all Class II and Class III gaming activities
within the meaning of IGRA) and all activities of the Tribe constituting or
relating to the ownership of hotel, restaurant, entertainment and resort
facilities are conducted on behalf of the Tribe by Borrower pursuant to the
authority granted to Borrower in the Gaming Authority Ordinance.

                                      -48-
<PAGE>
 
     4.5 No Management Contract. Neither this Agreement nor the other Loan
         ----------------------
Documents, taken individually or as a whole, constitute "management contracts"
or "management agreements" within the meaning of Section 12 of IGRA, or deprive
Borrower of the sole proprietary interest and responsibility of the conduct of
gaming activity at Mohegan Sun. 

     4.6 Title to and Location of Property. As of the Closing Date, Borrower
         ---------------------------------
has good and valid title to all the Property reflected in the financial
statements described in Section 5.6 other than immaterial items of Property
subsequently sold or disposed of in the ordinary course of business, free and
clear of all Liens and Rights of Others, other than as set forth in Schedule
7.8, provided that the leasehold estate which is the subject of the Leasehold
Mortgage covers real property the title to which is held by the United States in
trust on behalf of the Tribe. 

     4.7 Real Property. Schedule 4.7 sets forth a summary description of all
         -------------
real property owned by the Tribe which is Authority Property, including the Real
Property, and of all real property leasehold estates held by Borrower from the
Tribe, which summary is accurate and complete in all material respects. Except
as set forth in Schedule 4.7, the leases creating such real property leasehold
estates are in full force and effect and create a valid leasehold estate on the
terms of such lease, and neither Borrower nor the Tribe is in default or breach
of any thereof . The copies of such real property leases heretofore furnished to
the Administrative Agent are true copies and there are no amendments thereto
copies of which have not been furnished to the Administrative Agent. Under 25
U.S.C. ss.177 such real property may not be encumbered by the Tribe or Borrower
without the consent of the United States of America, however each required
consent has been obtained concurrently with the execution and delivery of this
Agreement. The Authority Property includes all real, mixed and personal property
which is operationally integral to the on-reservation gaming activities of the
Tribe. 

     4.8 Governmental Regulation. Except for consents of the Bureau of Indian
         -----------------------
Affairs being obtained concurrently with the execution of this Agreement,
Borrower is not subject to regulation under any Law limiting or regulating its
ability to incur Indebtedness for money borrowed, to grant Liens to secure its
obligations with respect to such Indebtedness or to otherwise perform the
Obligations.

     4.9 Binding Obligations. The Loan Documents contemplated by Section 10.1
         -------------------
and Section 10.2 have been executed and delivered by the Tribe and Borrower, as
applicable, and constitute the legal, valid and binding obligations of the Tribe
and Borrower enforceable in accordance with their terms. The provisions of
Section 13.24 are specifically enforceable against the Tribe and Borrower.

     4.10 No Default. No event has occurred and is continuing that is a Default
          ----------
or an Event of Default. 

                                      -49-
<PAGE>
 
     4.11 Disclosure. No written statement made by or on behalf of the Tribe or
          ----------
Borrower to the Administrative Agent or any Lender in connection with this
Agreement, or in connection with any Loan or Letter of Credit, contains any
untrue statement of a material fact or omits a material fact necessary in order
to make the statement made not misleading in light of all the circumstances
existing at the date the statement was made. There is no fact known to the Tribe
or Borrower (other than matters of a general economic nature or matters
generally applicable to businesses of the types engaged in by Borrower) which
would constitute a Material Adverse Effect that has not been disclosed in
writing to the Administrative Agent and the Lenders. 

     4.12 Gaming Laws. Borrower and the Tribe are in material compliance with
          -----------
all applicable Gaming Laws. 

     4.13 Security Interests. The Liens created by the Security Agreement are
          ------------------
perfected and of first priority to the fullest extent that the same may be
perfected by the filing of financing statements under the Connecticut Uniform
Commercial Code (as adopted by the Borrower pursuant to the UCC Ordinance). The
Leasehold Mortgage creates a valid and perfected Lien in the Collateral
described therein securing the Obligations. The Deposit Account Agreements
create a valid and perfected Lien in the Collateral described therein (including
without limitation the Operating Accounts) securing the Obligations. Each of the
Liens described in this Section are of first priority, subject only to Permitted
Encumbrances, Permitted Rights of Others and matters described in Schedule 7.8.

     4.14 Arbitration. Pursuant to the Constitution, to the extent that any
          -----------
dispute among the parties to the Loan Documents is initiated in or referred to
the Tribal Court, (i) such court lacks discretion to refuse to compel
arbitration among the parties to the dispute, and (ii) such court is obligated
to honor and enforce any award by the arbitrator, without review of any nature
by such court. 

     4.15 Recourse Obligations. Under current Law, no obligation of the Tribe
          --------------------
of any type or nature may constitute a Recourse Obligation unless and to the
extent that Borrower has become an express obligor with respect thereto, and the
Tribe has no authority, independent of Borrower, to incur any obligation on
behalf of Borrower, to bind any Authority Property, or to grant Liens upon any
Authority Property.

                                      -50-
<PAGE>
 
                                    ARTICLE 5
                 REPRESENTATIONS AND WARRANTIES OF THE BORROWER

     In order to induce the Creditors to enter into this Agreement and the other
Loan Documents, to make Loans and to issue and participate in Letters of Credit
hereunder, Borrower represents and warrants to the Creditors that:

     5.1 Existence and Qualification; Power; Compliance With Laws. The Tribe is
         --------------------------------------------------------
federally recognized as a Indian Tribe pursuant to a determination of the
Assistant Secretary - Indian Affairs, dated March 7, 1994, published in the
Federal Register on March 15, 1994, as amended by a correction dated July 1,
1994, published in the Federal Register on July 20, B. 1994, and as an Indian
Tribal government pursuant to Sections 7701(a)(40)(A) and 7871(a) of the
Internal Revenue Code, Title 26 U.S.C. Borrower is a governmental
instrumentality of the Tribe. As of the Closing Date, each of the Tribe and
Borrower is a non-taxable entity for purposes of federal income taxation under
the Internal Revenue Code, Title 26 U.S.C., and the gaming and other revenues of
Borrower are exempt from federal income taxation. To the extent required by Law,
Borrower and the Tribe are qualified to do business and is in good standing
under the laws of each jurisdiction in which they are required to be qualified
by reason of the location or the conduct of their business. The Tribe and the
Borrower each have all requisite power and authority to conduct their respective
business, to own and lease their respective Properties, to execute and deliver
each Loan Document to which they are a Party and to perform their respective
Obligations. As of the Closing Date, the chief executive offices of Borrower are
located in Uncasville, Connecticut at the address for notices set forth on the
signature pages hereto. The Tribe and Borrower are in material compliance with
the terms of the Compact, the Gaming Ordinance, the Gaming Authority Ordinance
and with all Laws and other legal requirements applicable to their existence and
business (including without limitation, IGRA and all Gaming Laws), have obtained
all authorizations, consents, approvals, orders, licenses and permits from, and
have accomplished all filings, registrations and qualifications with, or
obtained exemptions from any of the foregoing from, any Governmental Agency that
are necessary for the transaction of their business, except where the failure so
to file, register, qualify or obtain exemptions does not constitute a Material
Adverse Effect. 

     5.2 Authority; Compliance With Other Agreements and Instruments and
         ---------------------------------------------------------------
Government Regulations. The execution, delivery and performance by the Tribe
----------------------
and by Borrower of the Loan Documents have been duly authorized by all necessary
Tribal Council, Management Board and other action, and do not: E.

          (a) require any consent or approval not heretofore obtained of any
     enrolled tribal member or Tribal Council member, Management Board member,
     security holder or creditor;

          (b) violate or conflict with any provision of the Constitution,
     charter, bylaws or other governing documents of the Tribe or of Borrower;

                                      -51-
<PAGE>
 
          (c) result in or require the creation or imposition of any Lien or
     Right of Others (other than pursuant to the Collateral Documents) upon or
     with respect to any Authority Property now owned or leased or hereafter
     acquired;

          (d) violate any Law or Requirement of Law, including any Gaming Law,
     applicable to the Tribe or Borrower;

          (e) constitute a "transfer of an interest" or an "obligation incurred"
     that is avoidable by a trustee under Section 548 of the Bankruptcy Code of
     1978, as amended, or constitute a "fraudulent conveyance," "fraudulent
     obligation" or "fraudulent transfer" within the meanings of the Uniform
     Fraudulent Conveyances Act or Uniform Fraudulent Transfer Act, as enacted
     in any applicable jurisdiction;

          (f) result in a material breach of or default under, or would, with
     the giving of notice or the lapse of time or both, constitute a material
     breach of or default under, or cause or permit the acceleration of any
     obligation owed under, any mortgage, indenture or loan or credit agreement
     or any other Contractual Obligation to which the Tribe or Borrower is a
     party or by which the Tribe, Borrower or any of their Property is bound or
     affected; or

          (g) require any consent or approval of any Governmental Agency, or any
     notice to, registration or qualification with any Governmental Agency, not
     heretofore obtained or obtained concurrently with the Closing Date;

and the Tribe and Borrower are not in violation of, or default under, any
Requirement of Law or Contractual Obligation, or any indenture, loan or credit
agreement described in Section 5.2(f), in any respect that constitutes a
Material Adverse Effect.

     5.3 No Governmental Approvals Required. Except for the consent of the
         ----------------------------------  ------
Bureau of Indian Affairs pursuant to 25 U.S.C (S).81 (which consent is being
obtained concurrently with the execution and delivery of this Agreement), no
authorization, consent, approval, order, license or permit from, or filing,
registration or qualification with, any Governmental Agency is required to
authorize or permit under applicable Laws the execution, delivery and
performance by the Tribe and the Borrower of the Loan Documents to which they
are parties.

     5.4 The Nature of Borrower. The Tribe has no Subsidiaries and no
         ----------------------
Affiliates which are included in or controlled by or through Borrower. All
activities of the Tribe constituting or relating to the ownership and operation
of gaming facilities (including all Class II and Class III gaming activities
within the meaning of IGRA) and all activities of the Tribe constituting or
relating to the ownership of hotel, restaurant, entertainment and resort
facilities are conducted on behalf of the Tribe by Borrower pursuant to the
authority granted to Borrower in the Gaming Authority Ordinance.

                                      -52-
<PAGE>
 
     5.5 No Management Contract. Neither this Agreement nor the other Loan
         ----------------------
Documents, taken individually or as a whole, constitute "management contracts"
or "management agreements" within the meaning of Section 12 of IGRA, or deprive
Borrower of the sole proprietary interest and responsibility of the conduct of
gaming activity at Mohegan Sun. 

     5.6 Financial Statements. Borrower has furnished to the Lenders (a) the
         --------------------
audited financial statements of Borrower as at September 30, 1998 and for the
fiscal year then ended, and (b) the unaudited financial statements of Borrower
as at December 31, 1998 and for the three month fiscal period then ended. The
financial statements described above fairly present the financial condition and
the results of operations of Borrower as at such dates and for such periods in
accordance with Generally Accepted Accounting Principles consistently applied,
except in the case of the financial statements described in clause (b) above,
for any requirement for footnote disclosures. 

     5.7 Financial Statements of Borrower. The financial statements of Borrower
         --------------------------------
referred to in Section 5.6 includes as liabilities of the Borrower, all Recourse
Obligations existing as of the date hereof, whether or not Borrower is described
as the borrower or obligor with respect thereto. Each financial statement of
Borrower which is hereafter delivered in accordance with Section 8.1 includes as
liabilities of the Borrower, all then existing Recourse Obligations, whether or
not Borrower is described as the borrower or obligor with respect thereto. No
Non-Authority Property is described as an asset of Borrower on any balance sheet
or other financial statement of Borrower provided to the Administrative Agent or
the Lenders. 

     5.8 No Other Liabilities; No Material Adverse Effect. As of the Closing
         ------------------------------------------------
Date, Borrower does not have any material liability or material contingent
liability not reflected or disclosed in the financial statements described in
Section 5.6(b) or the notes to the financial statements described in Section
5.6(a). No event or circumstance that constitutes a Material Adverse Effect has
occurred since September 30, 1998. As of the date of each Advance made and each
Letter of Credit issued subsequent to the Closing Date, no event or circumstance
has occurred since the Closing Date that constitutes a Material Adverse Effect.

     5.9 Title to and Location of Property. As of the Closing Date, Borrower
         ---------------------------------
has good and valid title to all the Property reflected in the financial
statements described in Section 5.6 other than immaterial items of Property
subsequently sold or disposed of in the ordinary course of business, free and
clear of all Liens and Rights of Others, other than as set forth in Schedule
7.8, provided that the leasehold estate which is the subject of the Leasehold
Mortgage covers real property the title to which is held by the United States in
trust on behalf of the Tribe. 

     5.10 Real Property. Schedule 4.7 sets forth a summary description of all
          -------------
real property owned by the Tribe which is Authority Property, including the Real
Property, and of all real property leasehold estates held by Borrower from the
Tribe, which summary is accurate and complete in all material respects. Except
as set forth in Schedule 4.7, the leases creating 

                                      -53-
<PAGE>
 
such real property leasehold estates are in full force and effect and create a
valid leasehold estate on the terms of such lease, and neither Borrower nor the
Tribe is in default or breach of any thereof . The copies of such real property
leases heretofore furnished to the Administrative Agent are true copies and
there are no amendments thereto copies of which have not been furnished to the
Administrative Agent. Under 25 U.S.C. (S).177 such real property may not be
encumbered by the Tribe or Borrower without the consent of the United States of
America, however each required consent has been obtained concurrently with the
execution and delivery of this Agreement. The Authority Property includes all
real, mixed and personal property which is operationally integral to the
on-reservation gaming activities of the Tribe. 

     5.11 Intangible Assets. Borrower owns, or possesses the right to use to
          -----------------
the extent necessary in the business of Borrower, all trademarks, trade names,
copyrights, patents, patent rights, computer software, licenses and other
Intangible Assets that are used in the conduct of the business of Borrower as
now operated and which are material to the condition (financial or otherwise),
business or operations of Borrower, and no such Intangible Asset conflicts with
the valid trademark, trade name, copyright, patent, patent right or Intangible
Asset of any other Person to the extent that such conflict constitutes a
Material Adverse Effect. 

     5.12 Governmental Regulation. Except for consents of the Bureau of Indian
          -----------------------
Affairs being obtained concurrently with the execution of this Agreement,
Borrower is not subject to regulation under any Law limiting or regulating its
ability to incur Indebtedness for money borrowed, to grant Liens to secure its
obligations with respect to such Indebtedness or to otherwise perform the
Obligations.

     5.13 Litigation. Except for (a) any matter fully covered (subject to
          ----------
applicable deductibles and retentions) by insurance and with respect to which
the insurance carrier has not denied coverage, nor issued any denial of claim,
nor any other statement that the claim is in excess of coverage, (b) any matter,
or series of related matters, not fully covered by insurance (subject to
applicable deductibles and retentions) involving a claim against Borrower which
is, in the reasonable opinion of Borrower's independent legal counsel, in an
amount less than $1,000,000, and (c) matters set forth in Schedule 5.13, there
are no actions, suits, proceedings or investigations pending as to which
Borrower has been served or have received notice or, to the best knowledge of
Borrower, threatened against or affecting Borrower or any of its Property before
any Governmental Agency. There is no reasonable basis to believe that any of the
matters described on Schedule 5.13 may result in or constitute a Material
Adverse Effect. 

     5.14 Binding Obligations. The Loan Documents to which the Tribe or
          -------------------
Borrower is a party have been executed and delivered by the Tribe and Borrower
and constitute the legal, valid and binding obligations of the Tribe and
Borrower enforceable in accordance with their terms, and each Loan Document
hereafter executed will, when executed and delivered by the Parties thereto,
constitute the legal, valid and binding obligation of the 

                                      -54-
<PAGE>
 
Borrower and the Tribe as applicable, enforceable against the Borrower and the
Tribe as applicable in accordance with its terms.

     5.15 No Default. No event has occurred and is continuing that is a Default
          ----------
or an Event of Default. 

     5.16 ERISA. As of the Closing Date neither Borrower nor any ERISA
          -----
Affiliate maintains, contributes to or is required to contribute to any
"employee pension benefit plan" that is subject to Title IV of ERISA. 

     5.17 Regulations T, U and X; Investment Company Act. No part of the
          ----------------------------------------------
proceeds of any Loan or other extension of credit hereunder will be used to
purchase or carry, or to extend credit to others for the purpose of purchasing
or carrying, any "margin stock" (as such term is defined in Regulations T, U and
X) in violation of Regulations T, U and X. Borrower is not engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying any such "margin stock." Borrower is not
required to be registered as an "investment company" under the Investment
Company Act of 1940. 

     5.18 Disclosure. No written statement made by or on behalf of the Tribe or
          ----------
Borrower to the Administrative Agent or any Lender in connection with this
Agreement, or in connection with any Loan or Letter of Credit, contains any
untrue statement of a material fact or omits a material fact necessary in order
to make the statement made not misleading in light of all the circumstances
existing at the date the statement was made. There is no fact known to the Tribe
or Borrower (other than matters of a general economic nature or matters
generally applicable to businesses of the types engaged in by Borrower) which
would constitute a Material Adverse Effect that has not been disclosed in
writing to the Administrative Agent and the Lenders. 

     5.19 Tax Liability. Borrower has filed all tax returns which are required
          -------------
to be filed, and has paid, or made provision for the payment of, all taxes with
respect to the periods, Property or transactions covered by said returns, or
pursuant to any assessment received by Borrower, except such taxes, if any, as
are being contested in good faith by appropriate proceedings and as to which
adequate reserves have been established and maintained. 

     5.20 Projections. As of the Closing Date, to the best knowledge of
          -----------
Borrower, the assumptions set forth in the Projections are reasonable and
consistent with each other and with all facts known to the Tribe or Borrower and
no material assumption is omitted as a basis for the Projections, and the
Projections are reasonably based on such assumptions. Nothing in this Section
shall be construed as a representation, warranty or covenant that the
Projections in fact will be achieved. 

                                      -55-
<PAGE>
 
     5.21 Employee Matters. There is no strike or work stoppage in existence
          ----------------
or, to Borrower's knowledge, threatened involving Borrower that would constitute
a Material Adverse Effect. 

     5.22 Gaming Laws. Borrower is in material compliance with all applicable
          -----------
Gaming Laws. 

     5.23 Security Interests. The Liens created by the Security Agreement are
          ------------------
perfected and of first priority to the fullest extent that the same may be
perfected by the filing of financing statements under the Connecticut Uniform
Commercial Code (as adopted by the Borrower pursuant to the UCC Ordinance). The
Leasehold Mortgage creates a valid and perfected Lien in the Collateral
described therein securing the Obligations. The Deposit Account Agreements
create a valid and perfected Lien in the Collateral described therein (including
without limitation the Operating Accounts) securing the Obligations. Each of the
Liens described in this Section are of first priority, subject only to Permitted
Encumbrances, Permitted Rights of Others and matters described in Schedule 7.8.

     5.24 Hazardous Materials. Except as specifically described in Schedule
          -------------------
5.24, neither Borrower nor to the best knowledge of each Senior Officer of the
Borrower any predecessor in title or any third person at any time occupying or
present on the Real Property at any time, has disposed of, discharged, released
or threatened the release of any material amount of Hazardous Materials on, from
or under such real property in any manner that violates any Hazardous Materials
Law. Except as specifically described in Schedule 5.24, no condition exists that
violates any Hazardous Material Law affecting the Real Property except for such
violations that would not individually or in the aggregate have a Material
Adverse Effect. Except as specifically described in Schedule 5.24, the Real
Property and each portion thereof is not and has not been utilized by Borrower
as a site for the manufacture of any Hazardous Materials and is in compliance in
all material respects with all Hazardous Materials Laws. To the extent that any
Hazardous Materials have been, or are, used, generated or stored by Borrower on
any Real Property, or transported to or from such Real Property by Borrower,
such use, generation, storage and transportation have been and are, in
compliance in all material respects with all Hazardous Materials Laws. 

     5.25 Arbitration. To the extent that any dispute among the parties to the
          -----------
Loan Documents is initiated in or referred to the Tribal Court, (i) such court
lacks discretion to refuse to compel arbitration among the parties to the
dispute, and (ii) such court is obligated to honor and enforce any award by the
arbitrator, without review of any nature by such court. 

     5.26 Deposit Accounts. Borrower does not maintain any deposit, checking,
          ----------------
brokerage or other similar account with any bank, savings association, financial
institution or similar financial intermediary in which Cash or Cash Equivalents
having an aggregate value in excess of $100,000 for all such accounts are
deposited which is not listed on Schedule 5.26 or the existence of which has not
been disclosed to the Administrative Agent and the Lenders in writing. 

                                      -56-
<PAGE>
 
                                   ARTICLE 6.
                       AFFIRMATIVE COVENANTS OF BORROWER
                       ---------------------------------
                          (OTHER THAN INFORMATION AND
                           --------------------------
                            REPORTING REQUIREMENTS)
                            ----------------------

     So long as any Advance remains unpaid, or any other Obligation remains
unpaid or unperformed (other than the obligations referenced in Section 3.18),
or any portion of the Commitment remains in force, Borrower shall, unless the
Administrative Agent (with the approval of the Requisite Lenders) otherwise
consents:

     6.1 Payment of Taxes and Other Potential Liens. Pay and discharge promptly
         ------------------------------------------
all taxes, assessments and governmental charges or levies imposed upon Borrower
or its Property or any part thereof, upon its income or profits or any part
thereof or (to the extent that the same arise after the Closing Date) any tax
assessment, governmental changes or levies imposed upon any right or interest of
the Administrative Agent or any Lender under any Loan Document, except that
Borrower shall not be required to pay or cause to be paid (a) any income or
gross receipts tax or any other tax on or measured by income generally
applicable to banks, (b) any tax, assessment, charge or levy that is not yet
delinquent, or is being contested in good faith by appropriate proceedings, so
long as Borrower has established and maintained adequate reserves for the
payment of the same and by reason of such nonpayment and contest no material
item or portion of Authority Property is in jeopardy of being seized, levied
upon or forfeited, and (c) taxes, assessments, charges and levies of amounts not
in excess of $100,000 which Borrower in good faith inadvertently fails to pay.

     6.2 Maintenance of Properties. Maintain, preserve and protect all of the
         -------------------------
depreciable Properties of Borrower in good order and condition, subject to wear
and tear in the ordinary course of business, and not permit any waste of such
Properties, except that the failure to maintain, preserve and protect a
particular item of depreciable Property that is not of significant value, either
intrinsically or to the operations of Borrower shall not constitute a violation
of this covenant, and maintain its ownership of all intellectual property and
licenses thereof necessary for the operation of Mohegan Sun.

     6.3 Maintenance of Insurance. Cause Borrower to maintain liability,
         ------------------------
casualty and other insurance with respect to itself and all Authority Property
(subject to customary deductibles and retention) with responsible insurance
companies in such amounts and against such risks as is carried by responsible
companies engaged in similar businesses and owning similar assets in the general
areas in which Borrower operates and, in any event, (a) B. workers' compensation
insurance, to the extent required to comply with all applicable state,
territorial and United States laws and regulations, (b) comprehensive general
liability insurance with minimum limits of $2,000,000, (c) umbrella liability
insurance providing excess liability coverages over and above the foregoing
underlying insurance policies up to a minimum limit of $100,000,000, (d)
property insurance protecting the Mohegan Sun for possible damage by fire,
lightening, wind-storm other damage, vandalism, riot, earthquake, civil
commotion, malicious mischief, hurricane and such other risks and hazards as are
from time to time covered by an "all 

                                      -57-
<PAGE>
 
risk" policy or a property policy covering "special" causes of loss. Such
insurance shall provide coverage of not less than 100% of actual replacement
value (as determined at each policy renewal based on the F.W. Dodge Building
Index or some other recognized means) of any improvements with a deductible no
greater than $500,000 (other than earthquake insurance for which the deductible
may be up to 10% of such replacement value), and (e) such insurance with respect
to the Real Property as is maintained as of the Closing Date as described in
Schedule 6.4. 

     6.4 Compliance With Laws. Comply with all Requirements of Laws
         --------------------
noncompliance with which would constitute a Material Adverse Effect, except that
Borrower need not comply with a Requirement of Law then being contested by it in
good faith by appropriate proceedings. 

     6.5 Preservation of Licenses and Permits. Preserve and maintain all
         ------------------------------------
authorizations, rights, franchises, privileges, consents, approvals, orders,
licenses, permits, or registrations from any Governmental Agency that are
necessary for the transaction of the business of Mohegan Sun, and qualify and
remain qualified to transact business in each jurisdiction in which such
qualification is necessary in view of its business or the ownership or leasing
of its Properties except where the failure to preserve and maintain any such
authorizations, rights, franchises, privileges, consents, approvals, orders,
licenses, permits or registrations or to so qualify or remain qualified would
not constitute a Material Adverse Effect. 

     6.6 Inspection Rights. Upon reasonable notice, at any time during regular
         -----------------
business hours and as often as requested (but not so as to unreasonably
interfere with the business of Borrower), permit the Administrative Agent or any
Lender, or any authorized employee, agent or representative thereof, to examine,
audit and make copies and abstracts from the records and books of account of,
and to visit and inspect Mohegan Sun, and to discuss the affairs, finances and
accounts of Borrower with any of its officers, key employees, and accountants,
and, upon request, furnish promptly to the Administrative Agent or any Lender
true copies of all financial information made available to the senior management
of Borrower. Without limitation on the foregoing, Borrower shall:  

          (a) provide the Construction Consultant any and all requested access
     to the Proposed Expansion site;

          (b) provide any and all information which is reasonably required for
     the preparation of a monthly Construction Progress Report;

          (c) cooperate in the preparation of each Construction Progress Report
     and, if requested by the Administrative Agent, cause the Proposed
     Expansion's architect and general contractor to certify that the
     improvements constructed as of the date of any Construction Progress Report
     conform to the Plans in all material respects;

                                      -58-
<PAGE>
 
          (d) maintain a full set of working drawings at the construction office
     for the Proposed Expansion for review by the Construction Consultant; and

          (e) within 15 days following any request by the Administrative Agent,
     deliver (i) then current construction plans for the Proposed Expansion
     certified as true and correct by the architect and the project engineer for
     the Proposed Expansion, (ii) a then current list of the names, addresses
     and telephone numbers of each contractor, subcontractor and material
     supplier with respect to the Proposed Expansion and the dollar value and
     amounts paid with respect to the related contracts, and (iii) then current
     versions of the construction schedule for all uncompleted work on the
     Proposed Expansion and all executed contracts and subcontracts for such
     work.

     6.7 Keeping of Records and Books of Account. Keep adequate records and
         ---------------------------------------
books of account reflecting all financial transactions in conformity with
Generally Accepted Accounting Principles and in material conformity with all
applicable requirements of any Governmental Agency having regulatory
jurisdiction over Borrower. 

     6.8 Compliance With Agreements. Promptly and fully comply with all
         --------------------------
Contractual Obligations under all material agreements, indentures, leases and
instruments to which it is a party, whether such material agreements,
indentures, leases or instruments are with a Lender or another Person, provided
that the good faith failure of Borrower to comply with Contractual Obligations
involving an amount of money which is less than $1,000,000 or Property having a
value of less than $1,000,000 shall not constitute a breach of this covenant for
so long as Borrower is attempting, through the exercise of diligent efforts, to
comply therewith. 

     6.9 Use of Proceeds. Use the proceeds of the Loans and Letters of Credit
         ---------------
(a) on the Closing Date, to repay the Existing Senior Secured Notes in their
entirety (in the aggregate amount, with accrued interest and premium of
approximately $175,000,000), (b) to finance the Proposed Expansion and other
Capital Expenditures associated with Authority Property, and (c) for other
working capital, casino and general purposes of Borrower, provided that all
proceeds of the Loans and all Letters of Credit shall be used exclusively by the
Borrower to finance facilities and operations constituting "Gaming" within the
meaning of Article XIII, Section 1 of the Constitution. 

     6.10 Hazardous Materials Laws. Keep and maintain the Real Property and
          ------------------------
each portion thereof in compliance in all material respects with all Hazardous
Materials Laws and promptly advise Administrative Agent in writing of (a) any
and all enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened in writing pursuant to any
applicable Hazardous Materials Laws, (b) any and all claims made or threatened
in writing, and received by Borrower, by any third party against Borrower or the
Real Property relating to damage, contribution, cost recovery, compensation,
loss or injury resulting from any Hazardous Materials and (c) discovery by any
Senior Officer of the Borrower and the Tribe of any occurrence or condition on
any real property adjoining or in the 

                                      -59-
<PAGE>
 
vicinity of the Real Property that could reasonably be expected to cause the
Real Property or any part thereof to be subject to any restrictions on the
ownership, occupancy, transferability or use of the Real Property under any
Hazardous Materials Laws, provided that the good faith failure of Borrower to
comply with Hazardous Materials Laws shall not constitute a breach of this
covenant if (a) Borrower is diligently attempting to comply therewith, and (b)
no Authority Property having a value in excess of $1,000,000 is affected by such
non-compliance or is in jeopardy of seizure or closure as a result of such
non-compliance. 

     6.11 Deposit and Brokerage Accounts. Promptly and in any event within ten
          ------------------------------
days enter into a Deposit Account Agreement with respect to each Operating
Account hereafter established. 

     6.12 Proposed Expansion. Prior to commencement of construction of the
          ------------------
Proposed Expansion, deliver to the Lenders the proposed Plans and Budget, the
form, substance and scope of which shall be reasonably acceptable to, and
approved in writing by, the Requisite Lenders. Upon receipt of the complete
Plans and Budget, the Administrative Agent shall submit the same to the Lenders.
The Lenders shall consider the Plans and Budget promptly (and in any event
within 30 days following their receipt of the Plans and Budget), and shall
approve or disapprove of the proposed Plans and Budget within that period. 

     6.13 Year 2000 Compliance. Borrower represents that it has made
          --------------------
appropriate inquiry regarding the ability of its computer systems and those of
its principal customers and vendors to operate correctly in a date-sensitive
manner following January 1, 2000. Borrower has implemented a Year 2000 program
to provide an independent analysis of Borrower's Year 2000 preparedness and the
adequacy of Borrower's Year 2000 plans. It is anticipated that all remediation
and verification necessary for Borrower to become Year 2000 compliant will not
exceed $1,000,000 and will not have a Material Adverse Effect.

                                      -60-
<PAGE>
 
                                   ARTICLE 7.
                         NEGATIVE COVENANTS OF BORROWER
                         ------------------------------
                          (OTHER THAN INFORMATION AND
                           --------------------------
                            REPORTING REQUIREMENTS)
                            ----------------------

     So long as any Advance remains unpaid, or any other Obligation remains
unpaid or unperformed (other than the obligations referenced in Section 3.18),
or any portion of the Commitment remains in force, Borrower shall not, unless
the Administrative Agent (with the approval of the Requisite Lenders) otherwise
consents:

     7.1 Payment of Subordinated Obligations. Prepay any principal (including
         -----------------------------------
sinking fund payments), interest or any other amount with respect to any
Subordinated Obligations, or purchase or redeem (or offer to purchase or redeem)
any Subordinated Obligations, or deposit any monies, securities or other
Property with any trustee or other Person to provide assurance that the
principal or any portion thereof of any Subordinated Obligations will be paid
when due or otherwise provide for the defeasance of any Subordinated Obligations
except (a) scheduled payments of interest made when no Default or Event of
Default exists or would result therefrom, (b) refinancings of New Subordinated
Notes through their exchange for the Exchange Notes contemplated by the New
Subordinated Notes Indenture, and (c) repayments of the TCA Subordinated Notes
using the proceeds of the Defeasance Deposit. 

     7.2 Disposition of Property. Make any Disposition of Authority Property,
         -----------------------
whether now owned or hereafter acquired, except for (a) Permitted Dispositions
made when no Default or Event of Default exists or would result therefrom, or
(b) Dispositions of Property specifically contemplated by Sections 7.5 or 7.10.

     7.3 Investments and Acquisitions. Make any Acquisition using Authority
         ----------------------------
Property, or enter into any agreement to make any Acquisition using Authority
Property, or make or suffer to exist any Investment made using Authority
Property, except:  

          (a) Investments in Cash Equivalents;

          (b) Investments in Subsidiaries to the extent in compliance with
     Section 9.6;

          (c) Investments consisting of Property received in connection with any
     Permitted Disposition;

          (d) Investments consisting of payroll advances to employees of
     Borrower and its Subsidiaries for travel, entertainment and relocation
     expenses in the ordinary course of business in an aggregate amount not to
     exceed $250,000 at any one time outstanding;

                                      -61-
<PAGE>
 
          (e) Investments in accounts and notes receivable if created or
     acquired in the ordinary course of business and which are payable or
     dischargeable in accordance with customary trade terms;

          (f) Investments in Persons owning Related Businesses in an aggregate
     amount not to exceed, when aggregated with the Capital Expenditures made
     under Section 7.15(c), $25,000,000; and

          (g) Investments in Approved Swap Agreements.

     7.4 Hostile Tender Offers. Use the proceeds of the Commitment or any funds
         ---------------------
of Borrower to directly or indirectly finance any offer to purchase or acquire,
or to consummate a purchase or acquisition of, 5% or more of the capital stock
of any corporation or other business entity if the board of directors or
management of such corporation or business entity has notified Borrower that it
opposes such offer or purchase.

     7.5 Distributions. Make any Distribution, whether from capital, income or
         -------------
otherwise, and whether in Cash or other Property, except:

          (a) Priority Distributions;

          (b) Distributions consisting of payments to the Tribe for governmental
     services (including charges for utilities, police and fire department
     services, health and emergency medical services, the pro rata portion of
     Tribal Council costs and salaries attributable to the operations of
     Borrower, and similar pro rata costs of other tribal departments, in each
     case, to the extent that the costs of such departments are attributable to
     the operations of Borrower), supplied by the Tribe in accordance with past
     practices to the Borrower by the Tribe or any of its representatives,
     political subunits, councils, agencies or instrumentalities.

          (c) prior to the Completion Date, other Distributions to the Tribe in
     an amount not to exceed $3,000,000 made during any calendar month out of
     Available Cash Flow for the immediately preceding calendar month when no
     Default or Event of Default exists or would result therefrom;

          (d) Distributions to the Tribe constituting payment of amounts
     permitted by Section 9.9(b);

          (e) following the Completion Date, other Distributions to the Tribe
     made when no Default or Event of Default exists (and which do not result in
     any Event of Default), made out of Available Cash Flow; and

          (f) Distributions consisting of any payment or transfer specifically
     permitted by Section 7.10.

                                      -62-
<PAGE>
 
     7.6 ERISA. 
         -----

          (a) At any time, permit any Pension Plan which is maintained by
     Borrower or to which Borrower is obligated to contribute on behalf of its
     employees, in such case if to do so would constitute a Material Adverse
     Effect, to:



               (i)   engage in any non-exempt "prohibited transaction," as such
          term is defined in Section 4975 of the Internal Revenue Code, Title
          26, U.S.C.;

               (ii)  incur any material "accumulated funding deficiency," as
          that term is defined in Section 302 of ERISA; or

               (iii) suffer a Termination Event to occur which may reasonably be
          expected to result in liability of Borrower or any ERISA Affiliate
          thereof to the Pension Plan or to the PBGC or the imposition of a Lien
          on the Property of Borrower or any ERISA Affiliate thereof pursuant to
          Section 4068 of ERISA.


          (b) At any time, permit any Pension Plan which is maintained by
     Borrower or to which Borrower is obligated to contribute on behalf of its
     employees to fail to comply with ERISA or other applicable Laws in any
     respect that would result in a Material Adverse Effect.

     7.7 Business of Borrower. Engage in any material business which is not
         --------------------
fundamentally related to the operation of Mohegan Sun, use any material
Authority Property for a purpose which is unrelated to the business of Borrower,
or make any fundamental change to the nature of the business operations of
Borrower.

     7.8 Liens; Negative Pledges; Sales and Leasebacks. Create, incur, assume
         ---------------------------------------------
or suffer to exist any Lien or Right of Others of any nature upon or with
respect to Authority Property; or suffer to exist any Negative Pledge with
respect to any Authority Property; or engage in any sale and leaseback
transaction with respect to any Authority Property; except:

          (a) Permitted Encumbrances and Permitted Rights of Others;

          (b) Liens and Negative Pledges in favor of the Administrative Agent or
     the Lenders under the Loan Documents;

          (c) Existing Liens disclosed in Schedule 7.8; provided that (i) the
     obligations secured thereby are not increased, and (ii) the Liens and
     related Negative Pledges in favor of First Fidelity Bank and Fleet National
     Bank disclosed on Schedule 7.8 as file numbers 0001709240 and 0001723520
     shall be terminated in accordance 

                                      -63-
<PAGE>
 
     with Section 10.2 prior to the making of the Initial Advances and the
     issuance of the initial Letters of Credit hereunder;

          (d) Existing Rights of Others and Negative Pledges disclosed in
     Schedule 7.8; and

          (e) Purchase money Liens and associated Negative Pledges incurred with
     respect to Property acquired using the proceeds of Indebtedness and Capital
     Leases permitted under Section 7.9(h).

     7.9 Indebtedness and Contingent Obligations. Create, incur, assume or
         ---------------------------------------
suffer to exist any Indebtedness or Contingent Obligation, except: 

          (a) Indebtedness and Contingent Obligations in favor of the Lenders or
     the Administrative Agent under the Loan Documents;

          (b) Indebtedness and Contingent Obligations consisting of Approved
     Swap Agreements;

          (c) Indebtedness evidenced by the Senior Unsecured Notes in an
     aggregate principal amount not to exceed $200,000,000;

          (d) defeased Indebtedness under the TCA Subordinated Notes;

          (e) other existing Indebtedness and Contingent Obligations disclosed
     on Schedule 7.9 and the renewal or refinancing, but not the increase,
     thereof;

          (f) the New Subordinated Notes in an aggregate outstanding principal
     amount not to exceed $300,000,000;

          (g) other Subordinated Obligations the incurrence of which is approved
     by the Requisite Lenders;

          (h) purchase money Indebtedness and Capital Lease Obligations in an
     aggregate principal amount not to exceed $25,000,000; and

          (i) unsecured Recourse Obligations in an aggregate principal amount
     not to exceed $25,000,000.

     7.10 Transactions with Affiliates. Enter into any transaction of any kind
          ----------------------------
with any Affiliate of Borrower other than (a) employment of enrolled tribal
members, and the immediate family members of tribal members, on terms consistent
with the past practices of Borrower (including the payment of employment bonuses
in accordance with past practices), (b) transactions involving Property having
an aggregate value of not more than $2,000,000 for 

                                      -64-
<PAGE>
 
all such transactions, (c) transactions which are on commercially reasonable
terms entered into with Native American suppliers and vendors in accordance with
the affirmative action provisions of the Tribe's Employment Rights Ordinance and
the Development Services Agreement (in the case of any such transactions or
series of related transactions involving more than $2,000,000, on terms
disclosed to the Lenders), (d) other transactions on terms at least as favorable
to Borrower as would be the case in an arm's-length transaction between
unrelated parties of equal bargaining power, the terms of which are disclosed to
the Lenders in writing, and (e) transactions pursuant to the Development
Services Agreement and Relinquishment Agreement. 

     7.11 Authority Expenditures. Use any Authority Property for a purpose
          ----------------------
which is not related to the business of Borrower or specifically contemplated
hereby, expend any Authority funds for any purpose which does not directly or
indirectly benefit Borrower, or make any Capital Expenditure using funds of
Borrower or other Authority Property except to add to, further improve,
maintain, repair, restore or refurbish Mohegan Sun and Related Businesses. 

     7.12 Total Leverage Ratio. Permit the Total Leverage Ratio, as of the last
          --------------------
day of any Fiscal Quarter described in the matrix below, to exceed the ratio set
forth opposite that Fiscal Quarter: 

                  Fiscal Quarters Ending             Maximum Ratio 
                  ----------------------             -------------

                  Closing Date through     
                  December 31, 2000                  3.50:1.00 

                  March 31, 2001                     4.00:1.00 

                  June 30, 2001 through 
                  December 31, 2001                  5.00:1.00 

                  March 31, 2002                     4.00:1.00 

                  June 30, 2002 and thereafter       3.50:1.00. 

     7.13 Senior Leverage Ratio. Permit the Senior Leverage Ratio, as of the
          ---------------------
last day of any Fiscal Quarter described in the matrix below, to exceed the
ratio set forth opposite that Fiscal Quarter:

                                      -65-
<PAGE>
 
                  Fiscal Quarters Ending             Maximum Ratio
                  ----------------------             -------------

                  Closing Date through
                  December 31, 2000                  2.00:1.00

                  March 31, 2001                     2.50:1.00

                  June 30, 2001                      3.00:1.00

                  September 30, 2001                 3.25:1.00

                  December 31, 2001                  3.00:1.00

                  March 31, 2002                     2.50:1.00

                  June 30, 2002 and thereafter       2.00:1.00.


     7.14 Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio,
          ---------------------------
as of that last day of any Fiscal Quarter described in the matrix below, to be
less than the ratio set forth opposite that Fiscal Quarter:

                  Fiscal Quarters Ending             Minimum Ratio
                  ----------------------             -------------

                  March 31, 1999                     1.10:1.00
 
                  June 30, 1999 through
                  June 30, 2001                      1.20:1.00
  
                  September 30, 2001                 1.15:1.00

                  December 31, 2001 and
                  thereafter                         1.50:1.00.

     7.15 Capital Expenditures. Make, or become legally obligated to make, any
          --------------------
Capital Expenditure other than: 

          (a) Capital Expenditures made in accordance with the Plans and Budget
     (and only following their approval in accordance with Section 6.12) for the
     construction of the Proposed Expansion in an aggregate amount not to exceed
     $800,000,000;

          (b) Maintenance Capital Expenditures in an aggregate amount not to
     exceed $25,000,000 in any Fiscal Year;

                                      -66-
<PAGE>
 
          (c) Capital Expenditures for Related Businesses which, when aggregated
     with the Investments made pursuant to Section 7.3(g), do not exceed
     $25,000,000; and

          (d) Following the Completion Date, other Capital Expenditures in an
     aggregate amount which does not exceed $40,000,000, in any Fiscal Year.

     7.16 Deposit Accounts. Fail, within ten days following the opening of each
          ----------------
such account, to execute and deliver to the Administrative Agent Deposit Account
Agreements granting Liens in each deposit, checking, brokerage or other similar
account of the Borrower which is opened following the Closing Date with any
bank, savings association, financial institution or similar financial
intermediary in which Cash or Cash Equivalents will be deposited.

                                      -67-
<PAGE>
 
                                   ARTICLE 8.
                     INFORMATION AND REPORTING REQUIREMENTS
                     --------------------------------------

     8.1 Financial and Business Information. So long as any Advance remains
         ----------------------------------
unpaid, or any other Obligation remains unpaid or unperformed (other than the
obligations referenced in Section 3.18), or any portion of the Commitment
remains in force, Borrower shall, unless the Administrative Agent (with the
approval of the Requisite Lenders) otherwise consents, deliver to the
Administrative Agent and the Lenders, at Borrower's sole expense:

          (a) As soon as practicable, and in any event within 45 days after the
     end of each Fiscal Quarter, (i) the balance sheets of Borrower as at the
     end of such Fiscal Quarter, (ii) statements of income and retained earnings
     and of cash flow of Borrower as at the end of such Fiscal Quarter and for
     the portion of the Fiscal Year ended with such Fiscal Quarter, and (iii)
     the statements of cash flow of Borrower for such Fiscal Quarter and for the
     portion of the Fiscal Year ended with such Fiscal Quarter, all in
     reasonable detail. Such financial statements shall be certified by a Senior
     Officer of Borrower as fairly presenting the financial condition, results
     of operations and changes in financial position or cash flows of Borrower
     in accordance with Generally Accepted Accounting Principles (other than any
     requirement for footnote disclosures) consistently applied, as at such date
     and for such periods, subject only to normal year-end accruals and audit
     adjustments and shall be accompanied by a management narrative description
     of results of operations;

          (b) As soon as practicable, and in any event within 90 days after the
     end of each Fiscal Year, (i) the balance sheets of Borrower as at the end
     of such Fiscal Year, (ii) statements of income and retained earnings and of
     cash flows of Borrower for such Fiscal Year, and (iii) statements of cash
     flow of Borrower for such Fiscal Year, all in reasonable detail. Such
     financial statements shall be prepared in accordance with Generally
     Accepted Accounting Principles, consistently applied, and such balance
     sheet and statements shall be accompanied by a report and opinion of
     independent public accountants of recognized standing selected by Borrower
     and reasonably satisfactory to the Requisite Lenders, which report shall be
     based on an audit conducted in accordance with generally accepted auditing
     standards as at such date, and which opinion shall be an unqualified
     opinion without additional explanatory or non-standard wording which the
     Requisite Lenders determine is unacceptable and with no limitation as to
     the scope of their audit;

          (c) Concurrently with the delivery of the financial statements
     referred to in Sections 8.1(a) and 8.1(b), a written discussion and
     analysis of the financial condition and results of operations of Borrower
     in reasonable detail, including in the case of any such report delivered in
     connection with the financial statements referred to in Section 8.1(b), an
     explanation of any material variance from operational results or balance
     sheet items contained in projections previously delivered to the Lenders;

                                      -68-
<PAGE>
 
          (d) As soon as practicable, and in any event within 20 days after the
     end of each calendar month, a monthly revenue report showing revenues for
     the prior calendar month associated with each gaming category, occupancy
     percentage, and average hotel room rental rates experienced by the Mohegan
     Sun during such monthly period;

          (e) As soon as practicable, and in any event within 90 days after the
     commencement of each Fiscal Year, projected financial statements by Fiscal
     Year for each of the three Fiscal Years immediately subsequent to that
     Fiscal Year, including, in each case, projected balance sheets, statements
     of income and retained earnings and statements of cash flow of Borrower,
     all in reasonable detail and in any event to include (i) projected
     Distributions to be made to the Tribe by Borrower and (ii) projected
     Capital Expenditures;

          (f) Promptly following receipt by Borrower, copies of any detailed
     audit reports or recommendations submitted to Borrower or the Tribe by
     independent accountants in connection with the accounts or books of
     Borrower or any audit of Borrower;

          (g) Promptly following a filing, copies of any specific report or
     other document filed by Borrower (or by the Tribe in respect of its gaming
     operations or any Authority Property) with any Governmental Agency,
     including without limitation all reports which Borrower is required to file
     with the National Indian Gaming Commission under 25 C.F.R. Part 514;

          (h) Promptly after the same are available, a copy of the Form 5500
     series report of each Pension Plan maintained by Borrower as filed with the
     Internal Revenue Service for each Fiscal Year;

          (i) Promptly upon a Senior Officer of the Borrower or the Tribe
     becoming aware, and in any event within thirty Business Days after becoming
     aware, of the occurrence of any (i) "reportable event" (as such term is
     defined in Section 4043 of ERISA) or (ii) "prohibited transaction" (as such
     term is defined in Section 406 of ERISA or Section 4975 of the Internal
     Revenue Code, Title 26, U.S.C.) in connection with any Pension Plan or any
     trust created thereunder, written notice specifying the nature thereof and
     specifying what action Borrower is taking or proposes to take with respect
     thereto, and, when known, any action taken by the Internal Revenue Service
     with respect thereto;

          (j) As soon as practicable, and in any event not less than 10 days
     (or, if acceptable to the Administrative Agent, a shorter period) prior to
     the proposed effective date thereof, written notice of any proposed
     amendment, modification or waiver of the terms and provisions of any of the
     Material Documents or the Plans and Budget. 

                                      -69-
<PAGE>
 
          (k) As soon as practicable, and in any event within five Business Days
     after a Senior Officer of the Borrower or the Tribe becomes aware of the
     existence of any condition or event which constitutes a Default or Event of
     Default, written notice specifying the nature and period of existence
     thereof and specifying what action Borrower and the Tribe are taking or
     propose to take with respect thereto;

          (l) Promptly upon a Senior Officer of the Borrower or the Tribe
     becoming aware that (i) any Person has commenced a legal proceeding with
     respect to a claim against Borrower or the Tribe that is, in the reasonable
     opinion of their independent legal counsel, $5,000,000 or more in excess of
     the amount thereof that is fully covered by insurance (subject to
     applicable deductibles and retentions), (ii) any creditor or lessor under a
     written credit agreement with respect to Indebtedness in excess of
     $5,000,000 or lease involving unpaid rent in excess of $5,000,000 has
     asserted a default thereunder on the part of Borrower or the Tribe, (iii)
     any Person commenced a legal proceeding with respect to a claim against
     Borrower or the Tribe under a contract that is not a credit agreement or
     lease in excess of $5,000,000, (iv) any labor union has notified Borrower
     or the Tribe of its intent to strike Borrower or the Tribe on a date
     certain, which strike could reasonably be expected to have a Material
     Adverse Effect, or (v) any other event or circumstance occurs or exists
     that would constitute a Material Adverse Effect, in each case a written
     notice describing the pertinent facts relating thereto and what action
     Borrower and the Tribe are taking or propose to take with respect thereto;

          (m) Not later than the fifteenth day of each calendar month, such
     information as may be required for the completion of the monthly
     Construction Progress Report; and

          (n) Such other data and information regarding the Borrower and the
     business of Mohegan Sun as from time to time may be reasonably requested by
     the Administrative Agent or the Requisite Lenders.

     8.2 Compliance Certificates. So long as any Advance remains unpaid, or any
         -----------------------
other Obligation remains unpaid or unperformed (other than the obligations
referenced in Section 3.18), or any portion of the Commitment remains
outstanding, Borrower shall, unless the Requisite Lenders otherwise consent,
deliver to the Administrative Agent, at Borrower's sole expense, concurrently
with the financial statements required pursuant to Sections 8.1(a), and 8.1(b),
a Compliance Certificate signed by the chief financial officer or chief
executive officer of Borrower, together with a narrative description of the
results of the operations of Borrower.

                                      -70-
<PAGE>
 
                                   ARTICLE 9.
                             COVENANTS OF THE TRIBE
                             ----------------------

     So long as any Advance remains unpaid, or any other Obligation remains
unpaid or unperformed (other than the obligations referenced in Section 3.18),
or any portion of the Commitment remains in force, the Tribe shall, and shall
cause the Borrower to, unless the Administrative Agent (with the approval of the
Requisite Lenders) otherwise consents:

     9.1 Continual Operation of Mohegan Sun. Cause Borrower to continuously
         ----------------------------------
operate the Mohegan Sun and each principal amenity now or hereafter associated
therewith in the manner operated as of the Closing Date (or as contemplated on
the Closing Date to be operated) and in any event in compliance with the Gaming
Ordinance, the Gaming Authority Ordinance all applicable Laws and the Compact,
and refrain from conducting any gaming activities (including without limitation
all Class II and Class III gaming activities (as defined in IGRA)) through any
Person, agency or instrumentality other than Borrower or at any location other
than Mohegan Sun. 

     9.2 Remittance of Available Cash Flow. Cause Borrower, to the extent that
         ---------------------------------
Available Cash Flow exists, promptly and in any event within two Business Days
following demand by the Administrative Agent (with such demand to be made only
following the date upon which any such payment is due hereunder and has not been
made by Borrower), to remit to the Administrative Agent from Available Cash Flow
all payments of principal, interest, fees and other amounts payable to the
Creditors under the Loan Documents. 

     9.3 Sovereign Immunity; Jurisdiction and Venue. Refrain from asserting
         ------------------------------------------
that the provisions of this Article and Sections 13.18, 13.24, 13.26 and 13.27
are not valid, binding and legally enforceable against the Tribe and Borrower,
and reaffirm in writing upon request the valid, binding and enforceable nature
of the provisions of this Article and Sections 13.18, 13.24, 13.26 and 13.27. 

     9.4 The Landlord Consent. Continuously abide by the terms of the Landlord
         --------------------
Consent. H. I. Preservation of Existence; Operation. 

          (a) Do all things necessary to maintain the existence of the Tribe as
     a federally recognized Indian Tribe under 25 C.F.R. Part 83 and as an
     Indian Tribal government pursuant to Sections 7701(a)(40)(A) and 7871(a) of
     the Internal Revenue Code, Title 26 U.S.C.; and

          (b) Continuously maintain the existence of Borrower as a governmental
     instrumentality of Borrower.

                                      -71-
<PAGE>
 
     9.6 Ownership of Mohegan Sun; Management. Not form or acquire any
         ------------------------------------
corporation or other business entity for the purpose of directly or indirectly
owning Mohegan Sun or any interest therein, or engage any manager for Mohegan
Sun, provided that Borrower shall be entitled to form one or more wholly-owned
Subsidiaries for the purpose of owning or operating the assets of the Borrower
provided that concurrently with their formation such Subsidiaries execute a
guarantee of the Obligations and Collateral Documents which are in form and
substance acceptable to the Administrative Agent and any and all other documents
reasonably required by the Administrative Agent in connection with the Loan
Documents.

     9.7 Prohibited Transactions. Not accept any Distribution or other payment
         -----------------------
from Borrower the making of which is prohibited hereunder (the Tribe hereby
agreeing that any such payment or Distribution so made will be held by the Tribe
in trust for the benefit of, and shall be paid forthwith over and delivered,
upon the request of the Administrative Agent or the Borrower, to Borrower), or
enter into any transaction with Borrower which is prohibited by Section 7.10.

     9.8 Amendments to Certain Documents.
         -------------------------------

          (a) Not amend, modify or waive any term or provision of any Material
     Document, or waive any rights thereunder in any respect which is adverse to
     the interests of the Administrative Agent or the Lenders, provided that:

               (i)   The terms of the Senior Unsecured Notes and the Senior
          Unsecured Note Indenture may be amended, modified or waived in any
          manner permitted thereunder;

               (ii)  The terms of the New Subordinated Notes and the New
          Subordinated Notes Indenture may be amended, modified or waived in any
          manner permitted thereunder which is not materially adverse to the
          interests of the Lenders and which does not shorten their maturity or
          the time for the making of any payment thereunder, increase the rate
          of interest or affect in any manner the subordination provisions
          thereof; and

               (iii) The UCC Ordinance provides and shall provide that any
          amendment to the Uniform Commercial Code as enacted from time to time
          by Connecticut shall be automatically incorporated in the Tribe's
          Uniform Commercial Code.

          (b)  In any event, not consent to any amendment, modification, or
     waiver of any term or provision of any Material Document in any manner
     without thirty days prior written notice to the Lenders.

                                      -72-
<PAGE>
 
     9.9 Impairment of Contracts; Imposition of Governmental Charges. The Tribe
         -----------------------------------------------------------
shall not:

          (a) Adopt, enact, promulgate or otherwise place into effect any tribal
     Law which impairs or interferes, or could impair or interfere, in any
     manner, with any right or remedy of the Creditors, the Obligations of the
     Tribe or Borrower under this Agreement or the other Loan Documents (it
     being understood and agreed that any such tribal Law which is adopted,
     enacted, promulgated or otherwise placed into effect without the consent of
     all of the Lenders shall, with respect to the Loan Documents, the rights
     and remedies of the Creditors thereunder, and the Obligations, be void and
     of no effect); or

          (b) Demand, impose or receive any tax, charge, assessment, fee or
     other imposition (except as specifically contemplated by Sections 7.2, 7.5
     or 7.10) or impose any regulatory or licensing requirement, except as
     provided in the Gaming Ordinance, against Borrower, its customers or
     guests, its operations or Property (including without limitation Mohegan
     Sun), the Creditors, the employees, officers, directors, patrons or vendors
     of Borrower, other than (i) charges upon Borrower to pay the actual and
     reasonable regulatory expenditures of the Mohegan Tribal Gaming Commission
     under the Gaming Ordinance, (ii) sales, use, room occupancy and related
     excise taxes, including admissions and cabaret taxes and any other taxes
     (other than income taxes) imposed by the Tribe on the Borrower, its
     patrons, or operations, provided that the rate and scope of such taxes
     shall not be more onerous than those which may be imposed by the State of
     Connecticut, (iii) fees imposed on Borrower by the Commission under IGRA,
     and (iv) the actual costs to the Tribe of services provided to Borrower
     under the Town Agreement.

     9.10 Segregation of Authority Assets. The Tribe shall not:
          -------------------------------

          (a) Fail to segregate all Authority Property, including all funds and
     bank accounts, from the Property of the Tribe; or

          (b) Commingle any Property of Borrower (including any funds or bank
     accounts) with any Non-Authority Property or with any Property of its
     Affiliates.

     9.11 Trust Property. The Tribe shall not convey into trust with the
          --------------
federal government of the United States of America, to be held for the benefit
of the Tribe or any of its Affiliates, any Property of the Tribe other than
interests in real property.

     9.12 Liens on Authority Property. The Tribe shall not create, incur,
          ---------------------------
assume or suffer to exist any Lien or other encumbrance upon Authority Property
which is not permitted by Section 7.8.

                                      -73-
<PAGE>
 
     9.13 Bankruptcy Matters; Etc.
          -----------------------

          (a) The Tribe will not enact any bankruptcy or similar law for the
     relief of debtors that would impair, limit, restrict, delay or otherwise
     adversely affect any of the rights and remedies of the Creditors provided
     for in the Loan Documents;

          (b) The Tribe will not, or permit Borrower or any of the Tribe's
     representatives, political subunits, agencies, instrumentalities or
     councils to, exercise any power of eminent domain over the Mohegan Sun.
     Except as required by state or federal Law, the Tribe will not enact any
     statute, law, ordinance or rule that would have a material adverse affect
     upon the rights of the Creditors under the Loan Documents; and

          (c) The Tribe agrees that upon any payment or distribution of assets
     upon any liquidation, dissolution, winding up, reorganization, assignment
     for the benefit of creditors, marshaling of assets or any bankruptcy,
     insolvency or similar proceedings of or with respect to Borrower, the
     Creditors shall be entitled to receive payment in full of all Obligations
     before any payment or distribution is made to the Tribe.

     9.14 Impairment of Contracts. The Tribe agrees that any action taken in
          -----------------------
violation of Sections 9.8, 9.9 or 9.13 shall be deemed in contravention of
Article XIV (entitled "Non-Impairment of Contracts") of the Constitution.

                                      -74-
<PAGE>
 
                                   ARTICLE 10.
                                   CONDITIONS
                                   ----------

     10.1 Closing. The Closing Date is subject to the following conditions
          -------
precedent, each of which shall be satisfied unless the Lenders, in their sole
and absolute discretion, shall agree otherwise:

          (a) The Administrative Agent shall have received all of the following,
     each of which shall be originals unless otherwise specified, each properly
     executed by each party thereto, each dated as of the Closing Date and each
     in form and substance satisfactory to the Administrative Agent and its
     legal counsel (unless otherwise specified or, in the case of the date of
     any of the following, unless the Administrative Agent otherwise agrees or
     directs):

               (i)   executed counterparts of this Agreement, sufficient in
          number for distribution to the Administrative Agent, the Lenders, the
          Tribe and Borrower;

               (ii)  Notes executed by Borrower in favor of each Lender, each in
          a principal amount equal to that Lender's Pro Rata Share;

               (iii) Such documentation as the Administrative Agent may
          reasonably require to establish the due organization, valid existence
          and good standing of the Tribe as a federally recognized Indian Tribe,
          the formation, valid existence and good standing of the Tribe and
          Borrower, their authority to execute, deliver and perform any Loan
          Documents, and the identity, authority and capacity of each Senior
          Officer authorized to act on their behalf, including, without
          limitation, certified copies of the Constitution, the Tribe's and
          Borrower's charter and bylaws, and amendments thereto, resolutions,
          incumbency certificates, Certificates of Senior Officers, and the
          like;

               (iv)  the Security Agreement executed by Borrower, together with
          sufficient copies of financing statements on Form UCC-1 (including
          such fixture filings as may be appropriate) for filing in every
          jurisdiction in which Borrower owns Property;

               (v)   Deposit Account Agreements in favor of the Administrative
          Agent executed by Borrower and the holder of each deposit, brokerage
          or other similar account maintained by Borrower with respect to each
          Operating Account executed by each party thereto; 

                                      -75-
<PAGE>
 
               (vi)   The Leasehold Mortgage executed by Borrower and the Bureau
          of Indian Affairs and the Landlord Consent executed by the Tribe;

               (vii)  the favorable written legal opinion of internal counsel to
          Borrower, substantially in the form of Exhibit E, opining to the
          absence of conflicts with the Constitution, tribal Law, and the
          matters described in Section 4.2, together with copies of all factual
          certificates and legal opinions upon which such counsel have relied;

               (viii) the favorable written legal opinions of Hogan & Hartson
          L.L.P., special counsel to Borrower, and Rome, McGuigan, Sabanosh
          special Connecticut counsel to Borrower, substantially in the forms of
          Exhibits F-1 and F-2 together with copies of all factual certificates
          and legal opinions upon which such counsel have relied;

               (ix)   an advice letter of Dorsey & Whitney LLP, special Indian
          law counsel to the Administrative Agent;

               (x)    a Certificate signed by a Senior Officer of the Borrower
          and the Tribe certifying that the conditions specified in Sections
          10.1(b), 10.1(d) and 10.1(e) have been satisfied and setting forth the
          Total Leverage Ratio as of the Closing Date;

               (xi)   evidence that insurance, of the types and in the amounts
          specified in the Loan Documents, is maintained in force by Borrower,
          together with an executed form 438 BFU with respect thereto;

               (xii)  a Certificate signed by a Senior Officer of the Borrower
          and the Tribe attaching true, correct and complete copies of each of
          the Material Documents (including, in each case, any amendments or
          modifications of the terms thereof entered into as of the Closing
          Date).

               (xiii) The Tribe and First Union National Bank, as Escrow Agent,
          shall have entered into the Construction Reserve Disbursement
          Agreement, and the Administrative Agent shall have received evidence
          satisfactory to it that the deposits referred to therein shall have
          been made with First Union National Bank.


               (xiv)  evidence acceptable to the Administrative Agent that the
          Defeasance Deposit has been established. 

               (xv)   such other assurances, certificates, documents, consents
          or opinions as the Administrative Agent reasonably may require.

                                      -76-
<PAGE>
 
          (b) the Existing Senior Secured Notes shall have been or shall
     concurrently be terminated and all such Indebtedness shall have been or
     shall concurrently be repaid and retired, all Liens securing such
     Indebtedness shall have been or shall concurrently be released and the
     Lenders shall have received or shall concurrently receive all termination
     statements, re-assignments, reconveyances and other assurances in
     connection therewith as Administrative Agent shall require in its sole
     discretion. 

          (c) The fees payable as of the Closing Date pursuant to Sections 3.2,
     3.3 and 3.4 shall be paid concurrently.

          (d) The representations and warranties of the Tribe and Borrower
     contained in Articles 4 and 5, respectively, shall be true and correct.

          (e) Borrower and any other Parties shall be in compliance with all the
     terms and provisions of the Loan Documents, and no Default or Event of
     Default shall have occurred and be continuing.

          (f) The Bureau of Indian Affairs shall have given its written approval
     of the transactions contemplated by this Agreement and the other Loan
     Documents pursuant to 25 U.S.C (S).81 in a writing acceptable to the
     Administrative Agent, and shall have delivered a letter acceptable to the
     Administrative Agent stating that it is the finding of the Bureau of Indian
     Affairs that the approval of the Loan Documents by the Bureau of Indian
     Affairs is not a major federal action significantly affecting the human
     environment.

     10.2 Initial Advances. The obligation of each Lender to make the initial
          ----------------
Advance to be made by it, and the obligation of the Issuing Lender to issue the
initial Letter of Credit, is subject to the following conditions precedent, each
of which shall be satisfied prior to the making of the initial Advances (unless
the Lenders, in their sole and absolute discretion, shall agree otherwise):

          (a) the Title Company shall have committed in writing to issue to the
     Administrative Agent and the Lenders its ALTA policy of title insurance
     with respect to the Leasehold Mortgage (contemplating an LP-10 pricing
     package and based upon a completed Title Status Report issued by the Bureau
     of Indian Affairs), with coverage in an amount not less than $425,000,000
     and endorsements to and exceptions from coverage acceptable to the
     Administrative Agent, together with reinsurance (allowing for direct
     access) from reinsurers and in amounts acceptable to the Administrative
     Agent.

                                      -77-
<PAGE>
 
          (b) the Leasehold Mortgage shall have been recorded with the Bureau of
     Indian Affairs, with the Town of Montville, Connecticut, and with the
     appropriate officials of the Tribe, and the Administrative Agent shall have
     received evidence satisfactory to the Administrative Agent that all actions
     necessary or, in the opinion of the Administrative Agent or the Lenders,
     desirable to perfect and protect the Liens of the Collateral Documents have
     been taken. LA3:LFJ\AGR\BN1\21119609.14 021899 -1-


          (c) the Administrative Agent shall have received a Request for Loan or
     a Request for Letter of Credit, as appropriate.

          (d) Borrower's letter of credit facility with Fleet National Bank
     shall have been or shall concurrently be terminated and all such
     Indebtedness shall have been or shall concurrently be repaid and retired,
     all Liens securing such Indebtedness shall have been or shall concurrently
     be released and the Lenders shall have received or shall concurrently
     receive all termination statements, re-assignments, reconveyances and other
     assurances in connection therewith as Administrative Agent shall require in
     its sole discretion.

     10.3 Any Increasing Advance. In addition to any applicable conditions
          ----------------------
precedent set forth elsewhere in this Article 10, and after giving effect to the
requested Advances, the obligation of each Lender to make any Advance which
would increase the principal amount outstanding under the Loan Documents, and
the obligation of the Issuing Lender to issue each Letter of Credit, is subject
to the following conditions precedent (unless the Requisite Lenders, in their
sole and absolute discretion, agree otherwise):

          (a) except as disclosed by Borrower and approved in writing by the
     Requisite Lenders, the representations and warranties contained in Article
     5 (other than Sections 5.7 (first sentence) and 5.13) shall be true and
     correct on and as of the date of the Advance as though made on that date;

          (b) other than matters described in Schedule 5.13 or not required as
     of the Closing Date to be therein described, there shall not be then
     pending or threatened any action, suit, proceeding or investigation against
     or affecting Borrower or any of its Property before any Governmental Agency
     that constitutes a Material Adverse Effect;

          (c) no Default or Event of Default shall then exist;

          (d) the Administrative Agent shall have timely received a Request for
     Loan in compliance with Article 2 (or telephonic or other request for loan
     referred to in the second sentence of Section 2.1(b), if applicable) in
     compliance with Article 2, or the Issuing Lender and the Administrative
     Agent shall have timely received a Request for Letter of Credit in
     compliance with Article 2, as applicable; and

                                      -78-
<PAGE>
 
          (e) the Administrative Agent shall have received, in form and
     substance reasonably satisfactory to the Administrative Agent, such other
     assurances, certificates, documents or consents related to the foregoing as
     the Administrative Agent reasonably may require. II.

                                      -79-
<PAGE>
 
                                   ARTICLE 11.
              EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT
              ----------------------------------------------------

     11.1 Events of Default. The existence or occurrence of any one or more of
          -----------------
the following events, whatever the reason therefor and under any circumstances
whatsoever, shall constitute an Event of Default:

          (a) Borrower fails to pay any principal on any of the Loans, or any
     portion thereof, when due, or fails or to make full reimbursement with
     respect to any Letter of Credit when due; or

          (b) Borrower fails to pay any interest or any of the fees payable
     under Article 3, or any portion thereof, within two Business Days after
     demand therefor; or

          (c) Borrower fails to pay any other fees or amounts payable to the
     Lenders under any Loan Document, or any portion thereof, within three
     Business Days after demand therefor; or

          (d) Any failure to comply with Section 8.1(l) that is materially
     adverse to the interests of the Administrative Agent or the Lenders; or

          (e) The Tribe fails to perform or observe any of the covenants
     contained in Article 9 or the Borrower fails to perform or observe any of
     the covenants contained in Articles 7 or 8 (other than the covenant set
     forth in Section 8.1(d)); or

          (f) Borrower, the Tribe or any other Party fails to perform or observe
     any other covenant or agreement contained in any Loan Document on its part
     to be performed or observed within thirty Business Days after the giving of
     notice by the Administrative Agent at the request of the Requisite Lenders
     of such Default; or

          (g) Any representation or warranty made in any Loan Document, or in
     any certificate delivered pursuant to any Loan Document, proves to have
     been incorrect when made or reaffirmed in any respect that is materially
     adverse to the interests of the Administrative Agent or the Lenders; or

          (h) At any time (i) Borrower fails to pay the principal, or any
     principal installment, of any present or future indebtedness for borrowed
     money of $10,000,000 or more, or any guaranty of present or future
     indebtedness for borrowed money of $10,000,000 or more, on its part to be
     paid, when due (or within any stated grace period), whether at the stated
     maturity, upon acceleration, by reason of required prepayment or otherwise
     or (ii) Borrower fails to perform or observe any other term, covenant or
     agreement on its part to be performed or observed, or suffers any event to
     occur, in connection with any present or future indebtedness for borrowed
     money of $10,000,000 or more, or of any guaranty of present or future
     indebtedness for borrowed money of

                                      -80-
<PAGE>
 
     $10,000,000 or more, if as a result of such failure or sufferance any
     holder or holders thereof (or an agent or trustee on its or their behalf)
     has the right to declare such indebtedness due before the date on which it
     otherwise would become due; or

          (i) At any time (i) the Tribe fails to pay the principal, or any
     principal installment, of any present or future indebtedness for borrowed
     money of $10,000,000 or more, or any guaranty of present or future
     indebtedness for borrowed money of $10,000,000 or more, on its part to be
     paid, when due (or within any stated grace period), whether at the stated
     maturity, upon acceleration, by reason of required prepayment or otherwise
     or (ii) the Tribe fails to perform or observe any other term, covenant or
     agreement on its part to be performed or observed, or suffers any event to
     occur, in connection with any present or future indebtedness for borrowed
     money of $10,000,000 or more, or of any guaranty of present or future
     indebtedness for borrowed money of $10,000,000 or more, if as a result of
     such failure or sufferance any holder or holders thereof (or an agent or
     trustee on its or their behalf) has the right to declare such indebtedness
     due before the date on which it otherwise would become due; or

          (j) Any Loan Document, at any time after its execution and delivery
     and for any reason other than the agreement of the Lenders or satisfaction
     in full of all the Obligations, ceases to be in full force and effect or is
     declared by a court of competent jurisdiction to be null and void, invalid
     or unenforceable in any respect which, in any such event in the reasonable
     opinion of the Requisite Lenders, is materially adverse to the interests of
     the Lenders; or Borrower or the Tribe denies that it has any or further
     liability or obligation under any Loan Document, or purports to revoke,
     terminate or rescind the same or any provision thereof; or

          (k) Any event occurs which gives the holder or holders of any
     Subordinated Obligation (or an agent or trustee on its or their behalf) the
     right to declare such Subordinated Obligations due before the date on which
     it otherwise would become due, or the right to require the issuer thereof
     to redeem or purchase, or offer to redeem or purchase, all or any portion
     of any Subordinated Obligations; or the trustee for, or any holder of,
     Subordinated Obligations breaches any subordination provision applicable to
     such Subordinated Obligations; or

          (l) A final judgment is entered by a court or other tribunal which
     purports to be of competent jurisdiction that any Subordinated Obligation
     is not subordinated in accordance with its terms to the Obligations; or

          (m) A judgment against the Tribe or Borrower is entered for the
     payment of money in excess of $10,000,000 and, absent procurement of a stay
     of execution, such judgment remains unbonded or unsatisfied for thirty
     calendar days after 

                                      -81-
<PAGE>
 
     the date of entry of judgment (unless the Tribe or Borrower has deposited
     the amount of the monetary award associated with such judgment into a court
     escrow pending determination of an appeal), or in any event later than five
     days prior to the date of any proposed sale thereunder; or

          (n) The Tribe or Borrower institutes or consents to any proceeding
     under a Debtor Relief Law relating to it or to all or any part of their
     respective Property, or is unable or admits in writing its inability to pay
     its debts as they mature, or makes an assignment for the benefit of
     creditors; or applies for or consents to the appointment of any receiver,
     trustee, custodian, conservator, liquidator, rehabilitator or similar
     officer for it or for all or any part of its Property; or any receiver,
     trustee, custodian, conservator, liquidator, rehabilitator or similar
     officer is appointed without the application or consent of the Tribe or
     Borrower and the appointment continues undischarged or unstayed for sixty
     calendar days; or any proceeding under a Debtor Relief Law relating to the
     Tribe or Borrower or to all or any part of their Property is instituted
     without their consent and continues undismissed or unstayed for sixty
     calendar days; or any judgment, writ, warrant of attachment or execution or
     similar process is issued or levied against all or any material part of the
     Authority Property and is not released, vacated or fully bonded within
     sixty calendar days after its issue or levy; or

          (o) The Tribe at any time ceases to be a federally recognized Indian
     Tribe; or

          (p) The occurrence of a Termination Event with respect to any Pension
     Plan if the aggregate liability of Borrower and its ERISA Affiliates under
     ERISA as a result thereof exceeds $5,000,000; or the complete or partial
     withdrawal by Borrower or any of its ERISA Affiliates from any
     Multiemployer Plan if the aggregate liability of Borrower and its ERISA
     affiliates as a result thereof exceeds $5,000,000; or

          (q) The occurrence of an Event of Default (as such term is or may
     hereafter be specifically defined in any other Loan Document) under any
     other Loan Document; or

          (r) Borrower ceases to be a wholly-owned instrumentality of the Tribe,
     managed and controlled by the Tribe; or

          (s) The occurrence of any event or circumstance which results in the
     failure of Borrower to have any material portion of the Mohegan Sun open to
     conduct Class II or Class III gaming activities for any reason for more
     than five consecutive days to the extent that such failure results in a
     Material Adverse Effect (nothing in this clause requiring the conduct of
     gaming operations at the Proposed Expansion prior to the opening thereof);
     or

                                      -82-
<PAGE>
 
          (t) The occurrence of any event or circumstance which results in the
     prohibition of the Tribe to conduct Class II or Class III gaming activities
     at Mohegan Sun through the Borrower for a period in excess of five
     consecutive days (nothing in this clause requiring the conduct of gaming
     operations at the Proposed Expansion prior to the opening thereof); or

          (u) Any Change in Control occurs.

     11.2 Remedies Upon Event of Default. Without limiting any other rights or
          ------------------------------
remedies of the Administrative Agent or the Lenders provided for elsewhere in
this Agreement, or the Loan Documents, or by applicable Law, or in equity, or
otherwise:

          (a) Upon the occurrence, and during the continuance, of any Event of
     Default other than an Event of Default described in Section 1( )1(n):

               (i)   the commitment to make Advances and issue Letters of Credit
          and all other obligations of the Administrative Agent, the Issuing
          Lender and the Lenders and all rights of Borrower and any other
          Parties under the Loan Documents shall be suspended without notice to
          or demand upon the Tribe or Borrower, which are expressly waived by
          the Tribe and Borrower, except that the Requisite Lenders (or, in the
          case of any Event of Default which arises under a provision of the
          Loan Documents the amendment of which requires the consent of all the
          Lenders under Section 13.2, all of the Lenders) may waive the Event of
          Default or, without waiving, determine, upon terms and conditions
          satisfactory to such Lenders, to reinstate the Commitment and make
          further Advances and issue further Letters of Credit, which waiver or
          determination shall apply equally to, and shall be binding upon, all
          of the Lenders;

               (ii)  the Issuing Lender may, with the approval of the
          Administrative Agent on behalf of the Requisite Lenders, demand
          immediate payment by Borrower of an amount equal to the aggregate
          amount of all outstanding Letters of Credit; and

               (iii) the Requisite Lenders may request the Administrative Agent
          to, and the Administrative Agent thereupon shall, terminate the
          Commitment and declare all or any part of the unpaid principal of all
          Loans, all interest accrued and unpaid thereon and all other amounts
          payable under the Loan Documents to be forthwith due and payable,
          whereupon the same shall become and be forthwith due and payable,
          without protest, presentment, notice of dishonor, demand or further
          notice of any kind, all of which are expressly waived by Borrower. (i)


          (b) Upon the occurrence of any Event of Default described in Section
          11.1(n):

                                      -83-
<PAGE>
 
               (i)  the commitment to make Advances and issue Letters of Credit
          and all other obligations of the Administrative Agent, the Issuing
          Lender and the Lenders and all rights of Borrower and any other
          Parties under the Loan Documents shall terminate without notice to or
          demand upon Borrower, which are expressly waived by Borrower and the
          Tribe;

               (ii)  an amount equal to the aggregate amount available for
          drawing under outstanding Letters of Credit shall forthwith become due
          and payable to the Issuing Lender without protest, presentment, notice
          of dishonor demand or further notice of any kind, all of which are
          waived by Borrower and the Tribe to be held by the Issuing Lender as
          cash collateral for the Obligations to the Issuing Lender in
          non-interest bearing accounts with the Issuing Lender; and;

               (iii) the unpaid principal of all Loans, all interest accrued and
          unpaid thereon and all other amounts payable under the Loan Documents
          shall be forthwith due and payable, without protest, presentment,
          notice of dishonor, demand or further notice of any kind, all of which
          are expressly waived by Borrower and the Tribe.

            (c) Upon the occurrence and during the continuance of any Event of
     Default, the Administrative Agent, without notice or demand upon Borrower
     or the Tribe, which are expressly waived by Borrower and the Tribe, may
     proceed in accordance with applicable Laws (but only with the consent of
     the Requisite Lenders) to protect, exercise and enforce their rights and
     remedies under the Loan Documents (including the Collateral Documents)
     against Borrower, the Tribe and any other Party and such other rights and
     remedies as are provided by Law or equity.

            (d) The order and manner in which the Lenders' rights and remedies
     are to be exercised shall be determined by the Requisite Lenders in their
     sole discretion, and all payments received after the occurrence of any
     Default or Event of Default by the Administrative Agent and the Lenders, or
     any of them, shall be applied first to the costs and expenses (including
     attorneys' fees and disbursements payable pursuant to Section 13.3) of the
     Administrative Agent, acting as Administrative Agent, and of the Lenders,
     and thereafter paid pro rata to the Lenders in the same proportions that
     the aggregate Obligations owed to each Lender under the Loan Documents bear
     to the aggregate Obligations owed under the Loan Documents to all the
     Lenders, without priority or preference among the Lenders. Regardless of
     how each Lender may treat payments for the purpose of its own accounting,
     for the purpose of computing the Obligations hereunder and under the other
     Loan Documents, payments shall be applied first, to the costs and expenses
     of the Administrative Agent, acting as the Administrative Agent,  and the
     Lenders, as set forth above, second, to the payment of accrued and unpaid
     interest due under any Loan Documents to and including the date of such
     application (ratably, and without duplication, according to the accrued and
     unpaid interest due under each of the Loan Documents), and third, to the
                                                                -----
     payment of all other amounts (including principal and fees) then owing to
     the Administrative Agent or the Lenders under the Loan 

                                      -84-
<PAGE>
 
     Documents. No application of payments will cure any Event of Default, or
     prevent acceleration, or continued acceleration, of amounts payable under
     the Loan Documents, or prevent the exercise, or continued exercise, of
     rights or remedies of the Lenders hereunder or thereunder or at law or in
     equity.

                                      -85-
<PAGE>
 
                                  ARTICLE 12.
                           THE ADMINISTRATIVE AGENT
                           ------------------------    

     12.1 Appointment and Authorization. Each Lender hereby irrevocably
          -----------------------------
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under the Loan Documents as are delegated
to the Administrative Agent by the terms thereof or are reasonably incidental,
as determined by the Administrative Agent, thereto. This appointment and
authorization is intended solely for the purpose of facilitating the servicing
of the Loans and Letters of Credit and does not constitute appointment of the
Administrative Agent as trustee for any Lender or as representative of any
Lender for any other purpose and, except as specifically set forth in the Loan
Documents to the contrary, the Administrative Agent shall take such action and
exercise such powers only in an administrative and ministerial capacity. The
Administrative Agent is the agent of the Lenders only and does not assume any
agency relationship with the Tribe or Borrower, express or implied. 

     12.2 Business Activities with the Tribe and Borrower. Bank of America (and
          -----------------------------------------------
each successor Administrative Agent) has the same rights and powers under the
Loan Documents as any other Lender and may exercise the same as though it was
not the Administrative Agent, and the term "Lender" or "Lenders" includes Bank
of America in its individual capacity. Each Lender (including Bank of America
and each successor Administrative Agent) and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of banking, trust or other
business with the Tribe or Borrower or any of their Affiliates. Bank of America
may engage in these activities in the same manner as the other Lenders as if it
was not the Administrative Agent and without any duty to account therefor to the
Lenders. Bank of America (and each successor Administrative Agent) need not
account to any other Lender for any monies received by it for reimbursement of
its costs and expenses as Administrative Agent hereunder, or for any monies
received by it in its capacity as a Lender hereunder. The Administrative Agent
shall not be deemed to hold a fiduciary, trust or other special relationship
with any Lender and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise exist
against the Administrative Agent. 

     12.3 Proportionate Interest of the Lenders in any Collateral. The
          -------------------------------------------------------
Administrative Agent, on behalf of all the Lenders, shall hold in accordance
with the Loan Documents all items of any collateral or interests therein
received or held by the Administrative Agent. Subject to the Administrative
Agent's and the Lenders' rights to reimbursement for their costs and expenses
hereunder (including attorneys' fees and disbursements and other professional
           ---------
services), each Lender shall have an interest in any collateral or interests
therein in the same proportions that the aggregate Obligations owed such Lender
under the Loan Documents (other than an Approved Swap Agreement) bear to the
aggregate Obligations owed under the Loan Documents to all the Lenders, without
priority or preference among the Lenders. Any obligation owed to a Lender under
an Approved Swap Agreement shall rank pari passu with the Obligations under the
Loan Documents up to an amount equal to the Swap Termination Value (as
determined by the Administrative Agent) of that Approved Swap Agreement, and
shall be subordinate to the Obligations under other Loan Documents to the extent
of any excess over such amount. 

                                      -86-
<PAGE>
 
     12.4 Lenders' Credit Decisions. Each Lender agrees that it has,
          -------------------------
independently and without reliance upon the Administrative Agent, any other
Lender or the directors, officers, agents, employees or attorneys of the
Administrative Agent or of any other Lender, and instead in reliance upon
information supplied to it by or on behalf of the Tribe and Borrower and upon
such other information as it has deemed appropriate, made its own independent
credit analysis and decision to enter into this Agreement. Each Lender also
agrees that it shall, independently and without reliance upon the Administrative
Agent, any other Lender or the directors, officers, agents, employees or
attorneys of the Administrative Agent or of any other Lender, continue to make
its own independent credit analyses and decisions in acting or not acting under
the Loan Documents.

     12.5 Action by Administrative Agent.
          ------------------------------
 
          (a) The Administrative Agent may assume that no Default or Event of
     Default has occurred and is continuing, unless the Administrative Agent has
     received notice from the Tribe or Borrower stating the nature of the
     Default or Event of Default or has received notice from a Lender stating
     the nature of the Default or Event of Default and that such Lender
     considers the Default or Event of Default to have occurred and to be
     continuing.

          (b) The Administrative Agent has only those obligations under the Loan
     Documents as are expressly set forth therein.

          (c) Except for any obligation expressly set forth in the Loan
              ------
     Documents and as long as the Administrative Agent may assume that no Event
     of Default has occurred and is continuing, the Administrative Agent may,
     but shall not be required to, exercise its discretion to act or not act,
     except that the Administrative Agent shall be required to act or not act
     ------
     upon the instructions of the Requisite Lenders (or of all the Lenders, to
     the extent required by Section 13.2) and those instructions shall be
     binding upon the Administrative Agent and all the Lenders, provided that
                                                                --------
     the Administrative Agent shall not be required to act or not act if to do
     so would be contrary to any Loan Document or to applicable Law or would
     result, in the reasonable judgment of the Administrative Agent, in
     substantial risk of liability to the Administrative Agent.

          (d) If the Administrative Agent has received a notice specified in
     clause (a), the Administrative Agent shall give notice thereof to the
     Lenders and shall act or not act upon the instructions of the Requisite
     Lenders (or of all the Lenders, to the extent required by Section 13.2),
     provided that the Administrative Agent shall not be required to act or not
     --------
     act if to do so would be contrary to any Loan Document or to applicable Law
     or would result, in the reasonable judgment of the Administrative Agent, in
     substantial risk of liability to the Administrative Agent, and except that
                                                                    ------ 
     if the Requisite Lenders (or all the Lenders, if required under Section
     13.2) fail, for five Business Days after the receipt of notice from the
     Administrative Agent, to instruct the Administrative Agent, then the
     Administrative Agent, in its sole discretion, may act or not act as it
     deems advisable for the protection of the interests of the Lenders, until
     such time as it receives such a notice from the Requisite Lenders.

                                      -87-
<PAGE>
 
          (e) The Administrative Agent shall have no liability to any Lender for
     acting as instructed by the Requisite Lenders, or for refraining from
     acting, if so instructed by the Requisite Lenders (or, in each case, all
     the Lenders, if required under Section 13.2), notwithstanding any other
     provision hereof.

     12.6 Liability of Administrative Agent. Neither the Administrative Agent
          ---------------------------------
nor any of its directors, officers, agents, employees or attorneys shall be
liable for any action taken or not taken by them under or in connection with the
Loan Documents, except for their own gross negligence or willful misconduct.
Without limitation on the foregoing, the Administrative Agent and its directors,
officers, agents, employees and attorneys:

          (a) May treat each Lender identified on Schedule 1.1 as the owner of
     its Pro Rata Share until the Administrative Agent receives notice of the
     assignment or transfer thereof, in form satisfactory to the Administrative
     Agent, signed by the payee, and may treat each Lender as the owner of that
     Lender's interest in the Obligations for all purposes of this Agreement
     until the Administrative Agent receives notice of the assignment or
     transfer thereof, in form satisfactory to the Administrative Agent, signed
     by that Lender.

          (b) May consult with legal counsel (including in-house legal counsel),
                                              ---------
     accountants (including in-house accountants) and other professionals or
                  --------- 
     experts selected by it, or with legal counsel, accountants or other
     professionals or experts for the Tribe, Borrower or the Lenders, and shall
     not be liable for any action taken or not taken by it in good faith in
     accordance with any advice of such legal counsel, accountants or other
     professionals or experts.

          (c) Shall not be responsible to any Lender for any statement, warranty
     or representation made in any of the Loan Documents or in any notice,
     certificate, report, request or other statement (written or oral) given or
     made in connection with any of the Loan Documents.

          (d) Except to the extent expressly set forth in the Loan Documents,
     shall have no duty to ask or inquire as to the performance or observance by
     the Tribe, Borrower or any other Party of any of the terms, conditions or
     covenants of any of the Loan Documents or to inspect any collateral or the
     Property, books or records of the Tribe or Borrower.

          (e) Will not be responsible to any Lender for the due execution,
     legality, validity, enforceability, genuineness, effectiveness, sufficiency
     or value of any Loan Document, any other instrument or writing furnished
     pursuant thereto or in connection therewith, or any collateral.

          (f) Will not incur any liability by acting or not acting in reliance
     upon any Loan Document, notice, consent, certificate, statement, request or
     other instrument or writing believed by it to be genuine and signed or sent
     by the proper party or parties.

                                      -88-
<PAGE>
 
          (g) Will not incur any liability for any arithmetical error in
     computing any amount paid or payable by the Borrower or any Affiliate
     thereof or paid or payable to or received or receivable from any Lender
     under any Loan Document, including, without limitation, principal,
                              --------- 
     interest, commitment fees, Advances and other amounts; provided that,
                                                            -------------
     promptly upon discovery of such an error in computation, the Administrative
     Agent, the Lenders and (to the extent applicable) Borrower or its
     Affiliates shall make such adjustments as are necessary to correct such
     error and to restore the parties to the position that they would have
     occupied had the error not occurred.

     12.7. Indemnification. Each Lender shall, ratably in accordance with its
           ---------------  
Pro Rata Share, indemnify and hold the Administrative Agent and its directors,
officers, agents, employees and attorneys harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever (including
                                                                   ---------
reasonable attorneys' fees and disbursements) that may be imposed on, incurred
by or asserted against it or them in any way relating to or arising out of the
Loan Documents (other than losses incurred by reason of the failure of Borrower
to pay the indebtedness represented by the Loan Documents) or any action taken
or not taken by it as Administrative Agent thereunder, except such as result
                                                       ------
from its own gross negligence or willful misconduct. Without limitation on the
foregoing, each Lender shall reimburse the Administrative Agent upon demand for
that Lender's ratable share of any cost or expense incurred by the
Administrative Agent in connection with the negotiation, preparation, execution,
delivery, amendment, waiver, restructuring, reorganization (including a
                                                            ---------
bankruptcy reorganization), enforcement or attempted enforcement of the Loan
Documents.

     12.8  Successor Administrative Agent. The Administrative Agent may,
           ------------------------------
and at the request of the Requisite Lenders shall, resign as Administrative
Agent (i) upon 30 days' notice to the Borrower and the Lenders or (ii) if the
Administrative Agent determines that for it to continue as Administrative Agent
would result in a conflict of interest affecting the Administrative Agent, or
would create an unacceptable risk of significant liability of the Administrative
Agent to a third party, or would otherwise be inadvisable under prevailing
standards of banking prudence, at any time, and effective immediately upon
written notice to Borrower and the Lenders. If the Administrative Agent so
resigns, (a) the Requisite Lenders shall appoint a successor Administrative
Agent, who must be from among the Lenders (and reasonably acceptable to Borrower
unless an Event of Default exists), provided that any resigning Administrative
                                    ---------  
Agent shall be entitled to appoint a successor Administrative Agent from among
the Lenders, subject to acceptance of appointment by that successor
Administrative Agent, if the Requisite Lenders have not appointed a successor
Administrative Agent within 30 days after the date the resigning Administrative
Agent gave notice of resignation; (b) upon a successor's acceptance of
appointment as Administrative Agent, the successor will thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
resigning Administrative Agent or the removed Administrative Agent; and (c) upon
the effectiveness of any resignation, the resigning Administrative Agent
thereupon will be discharged from its duties and obligations thereafter arising
under the Loan Documents other than obligations arising as a result of any
action or inaction of the resigning Administrative Agent prior to the
effectiveness of such resignation. Upon any resignation of Bank of America (or
any successor Administrative Agent) as Administrative Agent, Bank of America (or
such successor) 

                                      -89-
<PAGE>
 
shall be deemed to have concurrently resigned as Issuing Lender with respect to
the issuance of any further Letters of Credit hereunder (including without
limitation the extension of the expiration of any outstanding Letter of Credit),
and the successor Administrative Agent shall (i) be deemed concurrently
appointed as Issuing Lender, and (ii) shall promptly issue Letters of Credit to
replace or support any outstanding Letters of Credit issued by Bank of America.


     12.9 Performance of Conditions. For the purpose of determining fulfillment
          -------------------------
by the Tribe and Borrower of conditions precedent specified in Section 10.1 and
Section 10.2 only, each Lender shall be deemed to have consented to, and
approved or accepted, or to be satisfied with each document or other matter sent
by the Administrative Agent to such Lender for consent, approval, acceptance or
satisfaction, or required under Article 10 to be consented to, or approved by or
acceptable or satisfactory to, that Lender, unless an officer of the
Administrative Agent who is responsible for the transactions contemplated by the
Loan Documents shall have received written notice from that Lender prior to the
making of the requested Loan or the issuance of the requested Letter of Credit
specifying its objection thereto and either (i) such objection shall not have
been withdrawn by written notice to the Administrative Agent or (ii) in the case
of any condition to the making of a Loan, that Lender shall not have made
available to the Administrative Agent that Lender's Pro Rata Share of such Loan.

     12.10 Collateral Matters.
           ------------------ 
          (a) The Administrative Agent is authorized by each Lender, without the
     necessity of any notice to or further consent from any Lender, and without
     the obligation to take any such action, to take any action with respect to
     any Collateral or any Collateral Document which may from time to time be
     necessary to perfect and maintain perfected the Liens of the Collateral
     Documents.

          (b) The Lenders irrevocably authorize the Administrative Agent, at its
     option and in its discretion, to release any Lien granted to or held by the
     Administrative Agent upon any Collateral (i) upon termination of the
     Commitment and the payment in full of all Loans and all other Obligations
     payable under this Agreement (other than the obligations referenced in
     Section 3.18) and under the other Loan Documents; (ii) constituting
     Property of Borrower or its Affiliates which is sold, transferred or
     otherwise disposed of in connection with any transaction not prohibited by
     this Agreement or the Loan Documents; (iii) constituting Property leased to
     Borrower under an operating lease which has expired or been terminated in a
     transaction not prohibited by this Agreement or which will concurrently
     expire and which has not been and is not intended by the Borrower to be,
     renewed or extended; (iv) consisting of an instrument, if the Indebtedness
     evidenced thereby has been paid in full; or (v) if approved or consented to
     by those of the Lenders required by Section 13.2. Upon request by the
     Administrative Agent, the Lenders will confirm in writing the
     Administrative Agent's authority to release particular types or items of
     Collateral pursuant to this Section.

     12.11 No Obligations of Borrower or the Tribe. Nothing contained in this
           ---------------------------------------
Article 12 shall be deemed to impose upon Borrower or the Tribe any obligation
in respect of the due and 

                                      -90-
<PAGE>
 
punctual performance by the Administrative Agent of its obligations to the
Lenders under any provision of this Agreement, and the Tribe and Borrower shall
have no liability to the Administrative Agent or any of the Lenders in respect
of any failure by the Administrative Agent or any Lender to perform any of its
obligations to the Administrative Agent or the Lenders under this Agreement.

                                      -91-
<PAGE>
 
                                  ARTICLE 13.
                                 MISCELLANEOUS
                                 -------------

     13.1 Cumulative Remedies; No Waiver. The rights, powers, privileges and
          ------------------------------
remedies of the Creditors provided herein and in the other Loan Documents are
cumulative and not exclusive of any right, power, privilege or remedy provided
by Law or equity. No failure or delay on the part of any Creditor in exercising
any right, power, privilege or remedy may be, or may be deemed to be, a waiver
thereof; nor may any single or partial exercise of any right, power, privilege
or remedy preclude any other or further exercise of the same or any other right,
power, privilege or remedy. The terms and conditions of Article 10 hereof are
inserted for the sole benefit of the Creditors and may be waived in whole or in
part, with or without terms or conditions, in respect of any Loan or Letter of
Credit without prejudicing the Creditors' right to assert them in whole or in
part in respect of any other Loan or Letter of Credit. 

     13.2 Amendments; Consents. No amendment, modification, supplement,
          -------------------- 
extension, termination or waiver of any provision of this Agreement or any other
Loan Document, no approval or consent thereunder, and no consent to any
departure by Borrower or any other Party therefrom, may in any event be
effective unless in writing signed by the Administrative Agent with the approval
in writing of the Requisite Lenders, and then only in the specific instance and
for the specific purpose given; and, without the approval in writing of all the
Lenders, no amendment, modification, supplement, termination, waiver or consent
may be effective: 

          (a) To (i) amend or modify the principal of, or the amount of
     principal, principal repayments on, any Obligation, (ii) increase the
     amount of the Commitment except as contemplated by Section 2.7, or (iii)
     decrease the rate of interest or any commitment fee payable to any Lender,
     or any other fee or amount payable to any Lender under the Loan Documents;

          (b) Except as otherwise expressly provided for herein, to postpone any
     date fixed for any payment of principal of, prepayment of principal of or
     any installment of interest on, any Obligation or any installment of any
     commitment fee or other credit fee payable to any Lender, to extend the
     Maturity Date or any Reduction Date, or to release any Collateral (except
     as specifically provided for in any Loan Document);

          (c) To amend, modify or waive the provisions of the definitions of
     "Available Cash Flow" or "Requisite Lenders" or amend or modify Article 9,
     Sections 1( )1(o), 1( )1(r), 1( )1(t), and 1( )1(u) this Section, or
     Sections 13.18, 13.24, 13.26 or 13.27;

          (d) To amend or modify any provision of this Agreement in a manner
     which materially and adversely affects the Administrative Agent or the
     Issuing Lender without their written consent;

          (e) To amend or modify any provision of this Agreement that expressly
     requires the consent or approval of all the Lenders. 

                                      -92-
<PAGE>
 
     Any amendment, modification, supplement, termination, waiver or consent
     pursuant to this Section 13.2 shall apply equally to, and shall be binding
     upon, all of the Creditors.

     13.3 Costs, Expenses and Taxes. Borrower shall pay on demand the
          -------------------------
reasonable costs and expenses of (a) the Administrative Agent and the Lead
Arranger in connection with the negotiation, preparation, syndication, closing,
execution and delivery of the Loan Documents, including without limitation, the
reasonable attorneys' fees and disbursements of Sheppard, Mullin, Richter &
Hampton LLP and Dorsey & Whitney, LLP and the allocated cost of any internal
counsel to the Administrative Agent, (b) the Construction Consultant in
connection with the monitoring services provided by the Construction Consultant
(all as more fully set out in a letter agreement between the Administrative
Agent and the Borrower), (c) the Administrative Agent, in connection with each
amendment executed when no Default or Event of Default exists, and (d) each of
the Creditors in connection with each refinancing, restructuring, reorganization
(including a bankruptcy reorganization) and enforcement or attempted enforcement
of the Loan Documents, and any matter related thereto, in each case including,
                                                                    ---------
filing fees, recording fees, title insurance fees, appraisal fees, search fees
and other out-of-pocket expenses and the reasonable fees and out-of-pocket
expenses of any legal counsel (including the allocated fees and all
disbursements and other expenses of any internal legal counsel), independent
public accountants and other outside experts retained by the Administrative
Agent or any Lender, and including, without limitation, any costs, expenses or
fees incurred or suffered by the Creditors in connection with or during the
course of any bankruptcy or insolvency proceedings of Borrower. Borrower shall
pay any and all documentary and other taxes (other than income or gross receipts
taxes generally applicable to banks) and all costs, expenses, fees and charges
payable or determined to be payable in connection with the filing or recording
of this Agreement, any other Loan Document or any other instrument or writing to
be delivered hereunder or thereunder, or in connection with any transaction
pursuant hereto or thereto, and shall reimburse, hold harmless and indemnify the
Administrative Agent and the Lenders from and against any and all loss,
liability or legal or other expense with respect to or resulting from any delay
in paying or failure to pay any such tax, cost, expense, fee or charge or that
any of them may suffer or incur by reason of the failure of any Party to perform
any of its Obligations. Any amount payable to the Administrative Agent or any
Lender under this Section shall bear interest at the Default Rate. 

     13.4 Nature of the Lenders' Obligations. The obligations of the Lenders
          ----------------------------------
hereunder are several and not joint or joint and several. Nothing contained in
this Agreement or any other Loan Document and no action taken by the
Administrative Agent or the Lenders or any of them pursuant hereto or thereto
may, or may be deemed to, make the Lenders a partnership, an association, a
joint venture or other entity, either among themselves or with the Borrower or
any Affiliate of the Borrower. Each Lender's obligation to make any Advance
pursuant hereto is several and not joint or joint and several. A default by any
Lender will not increase the percentage of the Commitment attributable to any
other Lender. Any Lender not in default may, if it desires, assume in such
proportion as the nondefaulting Lenders agree the obligations of any Lender in
default, but is not obligated to do so. 

                                      -93-
<PAGE>
 
     13.5 Survival of Representations and Warranties. All representations and
          ------------------------------------------
warranties contained herein or in any other Loan Document, or in any certificate
or other writing delivered by or on behalf of any one or more of the Parties to
any Loan Document, will survive the making of the Loans and the issuance of
Letters of Credit hereunder and the execution and delivery of the Loan
Documents, and have been or will be relied upon by the Administrative Agent and
each Lender, notwithstanding any investigation made by the Administrative Agent
or any Lender or on their behalf. 

     13.6 Notices. Except as otherwise expressly provided in the Loan Documents
          -------
(a) all notices, requests, demands, directions and other communications provided
for hereunder or under any other Loan Document must be in writing and must be
mailed, telegraphed, telecopied, delivered or sent by recognized overnight
courier service, to the appropriate party at the address set forth on the
signature pages of this Agreement or other applicable Loan Document or, as to
any party to any Loan Document, at any other address as may be designated by it
in a written notice sent to all other parties to such Loan Document in
accordance with this Section; and (b) any notice, request, demand, direction or
other communication given by telecopier, must be confirmed within 48 hours by
letter mailed or delivered to the appropriate party at its respective address.
Except as otherwise expressly provided in any Loan Document, if any notice,
request, demand, direction or other communication required or permitted by any
Loan Document is given by mail it will be effective on the earlier of receipt or
the third Business Day after deposit in the United States mail with first class
or airmail postage prepaid; if given by telegraph or cable, when delivered to
the telegraph company with charges prepaid; if given by telex or telecopier,
when sent; or if given by personal delivery, when delivered. Notices given by
the Borrower under Articles 2 and 3 shall be deemed given on actual receipt by
the Administrative Agent. 


     13.7 Execution of Loan Documents. Unless the Administrative Agent
          ---------------------------
otherwise specifies with respect to any Loan Document, this Agreement and any
other Loan Document may be executed in any number of counterparts and any party
hereto or thereto may execute any counterpart, each of which when executed and
delivered will be deemed to be an original and all of which counterparts of this
Agreement or any other Loan Document, as the case may be, when taken together
will be deemed to be but one and the same instrument. The execution of this
Agreement or any other Loan Document by any party hereto or thereto will not
become effective until counterparts hereof or thereof, as the case may be, have
been executed by all the parties hereto or thereto. 

     13.8 Binding Effect; Assignment.  
          --------------------------

          (a) This Agreement and the other Loan Documents shall be binding upon
     and shall inure to the benefit of the parties hereto and thereto and their
     respective successors and assigns, except that Borrower and its Affiliates
     may not assign their rights hereunder or thereunder or any interest herein
     or therein without the prior written consent of all the Lenders. Any
     assignment by the Borrower or its Affiliates without the prior written
     consent of the Lenders shall be void, provided that no Person other than
     the Lenders shall have any rights under this sentence. Each Lender
     represents that it is not acquiring any Note with a view to

                                      -94-
<PAGE>
 
     the distribution thereof within the meaning of the Securities Act of 1933,
     as amended (subject to any requirement that disposition of such Notes must
     be within the control of such Lender). Any Lender may at any time pledge
     its Note, if any, or any other instrument evidencing its rights as a Lender
     under this Agreement to a Federal Reserve Bank, but no such pledge shall
     release that Lender from its obligations hereunder or grant to such Federal
     Reserve Bank the rights of a Lender hereunder absent foreclosure of such
     pledge.

          (b) From time to time following the Closing Date, each Lender may
     assign to one or more Eligible Assignees all or any portion of its Pro Rata
     Share; provided that (i) such Eligible Assignee, if not then a Lender or an
     Affiliate of the assigning Lender, shall be approved by each of the
     Administrative Agent and Borrower (neither of which approvals shall be
     unreasonably withheld or delayed), (ii) such assignment shall be evidenced
     by an Assignment Agreement, a copy of which shall be furnished to the
     Administrative Agent, (iii) except in the case of an assignment to an
     Affiliate of the assigning Lender or to another Lender of the entire
     remaining Commitment of the assigning Lender, the assignment shall be of a
     Pro Rata Share of not less than $10,000,000, and (iv) the effective date of
     any such assignment shall be as specified in the Assignment Agreement, but
     not earlier than the date which is five Business Days after the date the
     Administrative Agent has received the Assignment Agreement unless the
     Administrative Agent otherwise agrees. Upon the effective date of such
     Assignment Agreement, the Eligible Assignee named therein shall be a Lender
     for all purposes of this Agreement, with the Pro Rata Share set forth
     therein and, to the extent of such Pro Rata Share, the assigning Lender
     shall be released from its further obligations under this Agreement.
     Borrower agrees that it shall execute and deliver (against delivery by the
     assigning Lender to Borrower of any Note in its possession) to such
     assignee Lender, a Note evidencing that assignee Lender's Pro Rata Share,
     and to the assigning Lender, a Note evidencing the remaining balance Pro
     Rata Share retained by the assigning Lender (in each case, if Notes are
     requested by such Assignee under Section 2.1).

          (c) By executing and delivering an Assignment Agreement, the Eligible
     Assignee thereunder acknowledges and agrees that: (i) other than the
     representation and warranty that it is the legal and beneficial owner of
     the Pro Rata Share being assigned thereby free and clear of any adverse
     claim, the assigning Lender has made no representation or warranty and
     assumes no responsibility with respect to any statements, warranties or
     representations made in or in connection with this Agreement or the
     execution, legality, validity, enforceability, genuineness or sufficiency
     of this Agreement or any other Loan Document; (ii) the assigning Lender has
     made no representation or warranty and assumes no responsibility with
     respect to the financial condition of Borrower or the performance by
     Borrower of the Obligations; (iii) it has received a copy of this
     Agreement, together with copies of the most recent financial statements
     delivered pursuant to Section 8.1 and such other documents and information
     as it has deemed appropriate to make its own credit analysis and decision
     to enter into such Assignment Agreement; (iv) it will, independently and
     without reliance upon the Administrative Agent or any Lender and based on
     such documents and information as it shall deem appropriate at the time,
     continue to make its own credit decisions in taking or not taking action
     under this Agreement; (v) it appoints and authorizes the 

                                      -95-
<PAGE>
 
     Administrative Agent to take such action and to exercise such powers under
     this Agreement as are delegated to the Administrative Agent by this
     Agreement; and (vi) it will perform in accordance with their terms all of
     the obligations which by the terms of this Agreement are required to be
     performed by it as a Lender.

          (d) The Administrative Agent shall maintain at the Administrative
     Agent's Office a copy of each Assignment Agreement delivered to it. After
     receipt of a completed Assignment Agreement executed by any Lender and an
     Eligible Assignee, and receipt of an assignment fee of $3,500 from such
     Eligible Assignee, Administrative Agent shall, promptly following the
     effective date thereof, provide notice thereof to Borrower and the Lenders.

          (e) Each Lender may grant participations from time to time in a
     portion of its Pro Rata Share to one or more banks or other financial
     institutions (including another Lender); provided, however, that (i) such
     Lender's obligations under this Agreement shall remain unchanged, (ii) such
     Lender shall remain solely responsible to the other parties hereto for the
     performance of such obligations, (iii) the participating banks or other
     financial institutions shall not be a Lender hereunder for any purpose
     except, if the participation agreement so provides, for the purposes of
     Sections 3.7, 3.8, 13.11 and 13.15, (iv) Borrower and the other Creditors
     shall continue to deal solely and directly with such Lender in connection
     with such Lender's rights and obligations under this Agreement, (v) the
     participation interest shall be expressed as a percentage of the granting
     Lender's Pro Rata Share as it then exists and shall not restrict an
     increase in the Commitment, or in the granting Lender's Pro Rata Share, so
     long as the amount of the participation interest is not affected thereby,
     and (vi) the consent of the holder of such participation interest shall not
     be required for amendments or waivers of provisions of the Loan Documents
     other than those which (A) extend the Maturity Date, any Reduction Date or
     any date upon which any payment of money is due to the Lenders, (B) reduce
     the rate of interest on the Loans, any fee or any other monetary amount
     payable to the Lenders, (C) reduce the amount of any installment of
     principal due with respect to the Loans, or (D) release any material
     portion of the Collateral.

          (f) Any Lender (a "Granting Lender") may grant to a special purpose
     funding vehicle (an "SPC") of such Granting Lender, identified as such in
     writing from time to time by the Granting Lender to the Administrative
     Agent and the Borrower, the option to provide all or any part of any
     Advance that such Granting Lender would otherwise be obligated to make
     pursuant to Article 2, provided that (i) nothing herein shall constitute a
     commitment to make any Advance by any SPC, (ii) if an SPC elects not to
     exercise such option or otherwise fails to provide all or any part of such
     Advance, the Granting Lender shall be obligated to make such Advance
     pursuant to the terms hereof, and (iii) the rights of any such SPC shall be
     derivative of the rights of the Granting Lender. Each SPC shall be
     conclusively presumed to have made arrangements with its Granting Lender
     for the exercise of voting and other rights hereunder in a manner which is
     acceptable to the SPC, and the Administrative Agent, the other Creditors
     and each other Party shall be entitled to rely upon and deal solely with
     the Granting Lender with respect to Advances made by or through its SPC.
     The making of an Advance by an SPC hereunder shall utilize the Pro Rata
     Share of the 

                                      -96-
<PAGE>
 
     Commitment of the Granting Lender to the same extent, and as if, such
     Advance were made by the Granting Lender. Each party hereto hereby agrees
     that no SPC shall be liable for any indemnity or similar payment obligation
     under this Agreement (all liability for which shall remain with the related
     Granting Lender). In furtherance of the foregoing, each party hereto hereby
     agrees (which agreement shall survive the termination of this Agreement)
     that, prior to the date that is one year and one day after the payment in
     full of all outstanding senior indebtedness of any SPC, it will not
     institute against, or join any other person in instituting against, such
     SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation
     proceedings or similar proceedings under the laws of the United States or
     any State thereof, provided that the Granting Lender for each SPC hereby
                        -------------
     agrees to indemnify, save, and hold harmless each other party hereto for
     any loss, cost, damage and expense arising out of their inability to
     institute any such proceeding against its SPC. In addition, notwithstanding
     anything to the contrary contained in this Section, any SPC may (i) with
     notice to, but without the prior written consent of, the Borrower or the
     Administrative Agent and without paying any processing fee therefor, assign
     all or a portion of its interests in any Advance to its Granting Lender or
     to any financial institutions providing liquidity and/or credit facilities
     to or for the account of such SPC to fund the Advances made by such SPC or
     to support the securities (if any) issued by such SPC to fund such Loans
     (but nothing contained herein shall be construed in derogation of the
     obligation of the Granting Lender to make Advances hereunder), provided
                                                                    -------- 
     that neither the consent of the SPC or of any such assignee shall be
     ----
     required for amendments or waivers of provisions of the Loan Documents
     except for those amendments or waivers for which the consent of
     participants is required under Section 13.8(e)(vi), and (ii) disclose on a
     confidential basis any non-public information relating to its Loans to any
     rating agency, commercial paper dealer or provider of a surety, guarantee
     or credit or liquidity enhancement to such SPC.

         13.9  Lien on Deposits and Property in Possession of any Lender. As
               ---------------------------------------------------------
security for the prompt payment and performance of all Obligations, Borrower
hereby grants to each Creditor, as the representative of all other Creditors, a
security interest in and a right of off-set with respect to, all its right,
title, and interest in and to any and all deposit accounts now or hereafter
maintained with that Creditor in and to any and all of its Property and the
proceeds thereof now or hereafter in the possession of that Creditor. If an
Event of Default has occurred and is continuing, any Lender (but only with the
consent of the Requisite Lenders) may, to the extent permitted by applicable
Laws, exercise its rights under Article 9 of the Uniform Commercial Code and
other applicable Laws (including its right of off-set) and apply any funds in
any deposit account maintained with it by Borrower and any Property of Borrower
in its possession against the Obligations. 

         13.10 Sharing of Setoffs. Each Lender severally agrees that if it,
               ------------------
through the exercise of any right of setoff, banker's lien or counterclaim
against a Party, or otherwise, receives payment of the Obligations held by it
that is ratably more than any other Lender, through any means, receives in
payment of the Obligations held by that Lender, then: (a) The Lender exercising
the right of setoff, banker's lien or counterclaim or otherwise receiving such
payment shall notify the Administrative Agent and thereafter shall purchase, and
shall be deemed to have simultaneously purchased, from the other Lender a
participation in the Obligations held by the other Lender and 

                                      -97-
<PAGE>
 
shall pay to the other Lender a purchase price in an amount so that the share of
the Obligations held by each Lender after the exercise of the right of setoff,
banker's lien or counterclaim or receipt of payment shall be in the same
proportion that existed prior to the exercise of the right of setoff, banker's
lien or counterclaim or receipt of payment; and (b) such other adjustments and
purchases of participations shall be made from time to time as shall be
equitable to ensure that all of the Lenders share any payment obtained in
respect of the Obligations ratably in accordance with each Lender's share of the
Obligations immediately prior to, and without taking into account, the payment;
provided that, if all or any portion of a disproportionate payment obtained as a
-------------
result of the exercise of the right of setoff, banker's lien, counterclaim or
otherwise is thereafter recovered from the purchasing Lender by Borrower or any
Person claiming through or succeeding to the rights of Borrower, the purchase of
a participation shall be rescinded and the purchase price thereof shall be
restored to the extent of the recovery. Each Lender that purchases a
participation in the Obligations pursuant to this Section shall from and after
the purchase have the right to give all notices, requests, demands, directions
and other communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased. Each Party expressly consents
to the foregoing arrangements and agrees that any Lender holding a participation
in an Obligation so purchased may exercise any and all rights of setoff,
banker's lien or counterclaim with respect to the participation as fully as if
the Lender were the original owner of the Obligation purchased; provided,
however, that each Lender agrees that it shall not exercise any right of setoff,
banker's lien or counterclaim with respect to the Obligations without first
obtaining the consent of the Requisite Lenders. 

     13.11 Indemnity by Borrower. Borrower agrees to indemnify, save and hold
           ---------------------
harmless each Creditor and their respective Affiliates, directors, officers,
agents, attorneys and employees (collectively the "Indemnitees") from and
                                                   -----------
against: (a) any and all claims, demands, actions or causes of action that are
asserted against any Indemnitee by any third party, if the claim, demand, action
or cause of action directly or indirectly relates to a claim, demand, action or
cause of action that such Person asserts or may assert against Borrower (or, to
the extent related to the Loan Documents or the transactions contemplated
thereby, any Affiliate of Borrower or any officer of Borrower); (b) any and all
claims, demands, actions or causes of action by a third party if the claim,
demand, action or cause of action arises out of or relates to the Commitment,
the use or contemplated use of proceeds of any Loan or Letter of Credit, the
relationship of Borrower and the Lenders under this Agreement or any transaction
contemplated by the Loan Documents; (c) any administrative or investigative
proceeding by any Governmental Agency arising out of or related to a claim,
demand, action or cause of action described in clauses (a) or (b) above; and (d)
any and all liabilities, losses, costs or expenses (including reasonable
                                                    ---------
attorneys' fees and disbursements and other professional services) that any
Indemnitee suffers or incurs as a result of the assertion of any foregoing
claim, demand, action or cause of action; provided that no Indemnitee shall be
                                          -------------
entitled to indemnification for any loss caused by its own gross negligence or
willful misconduct. If any claim, demand, action or cause of action is asserted
against any Indemnitee, such Indemnitee shall promptly notify Borrower, but the
failure to so promptly notify Borrower shall not affect Borrower's obligations
under this Section unless Borrower is materially prejudiced thereby (and then
only to the extent prejudiced). Each Indemnitee may contest the validity,
applicability and 

                                      -98-
<PAGE>
 
amount of such claim, demand, action or cause of action with counsel selected by
such Indemnitee. Each Indemnitee is authorized to employ counsel in enforcing
its rights hereunder and in defending any claim, demand, action or cause of
action covered by this Section; provided that each Indemnitee shall endeavor in
connection with any matter covered by this Section which also involves other
Indemnitees, to use reasonable efforts to avoid unnecessary duplication of
effort by counsel for all Indemnitees. Any obligation or liability of Borrower
to any Indemnitee under this Section shall survive the expiration or termination
of this Agreement and the repayment of all Loans and the payment and performance
of all other Obligations (other than the Obligations referenced in Section 3.18)
owed to the Lenders; provided, however, that such obligations or liabilities
                     --------
shall not, from and after the date on which the Obligations are fully paid and
the Commitment terminated, be deemed Obligations for any purpose under the Loan
Documents. 

     13.12 Nonliability of the Lenders. Each of the Tribe and Borrower
           ---------------------------
acknowledges and agrees that: 

          (a) Any inspections of any Property of Borrower made by or through the
     Creditors are for purposes of administration of the Loan Documents only and
     neither the Tribe nor Borrower is entitled to rely upon the same;

          (b) By accepting or approving anything required to be observed,
     performed, fulfilled or given to the Creditors pursuant to the Loan
     Documents, none of the Creditors shall be deemed to have warranted or
     represented the sufficiency, legality, effectiveness or legal effect of the
     same, or of any term, provision or condition thereof, and such acceptance
     or approval thereof shall not constitute a warranty or representation to
     anyone with respect thereto by any Creditor;

          (c) The relationship between the Borrower and the Creditors is, and
     shall at all times remain, solely that of a borrowers and lenders; no
     Creditor shall under any circumstance be deemed to be in a relationship of
     confidence or trust or a fiduciary relationship with the Tribe or with
     Borrower or their Affiliates, or to owe any fiduciary duty to the Tribe,
     Borrower, or their Affiliates; no Creditor undertakes or assumes any
     responsibility or duty to the Tribe, Borrower or their Affiliates to
     select, review, inspect, supervise, pass judgment upon or inform the Tribe,
     Borrower or their Affiliates of any matter in connection with their
     Property or the operations of the Tribe, Borrower or its Affiliates; the
     Tribe, Borrower and its Affiliates shall rely entirely upon their own
     judgment with respect to such matters; and any review, inspection,
     supervision, exercise of judgment or supply of information undertaken or
     assumed by the Creditors in connection with such matters is solely for the
     protection of the Creditors and neither the Tribe, Borrower nor any other
     Person is entitled to rely thereon; and

          (d) The Creditors shall not be responsible or liable to any Person for
     any loss, damage, liability or claim of any kind relating to injury or
     death to Persons or damage to Property or other loss, damage, liability or
     claim caused by the actions, inaction or negligence of the Tribe, Borrower
     and its Affiliates and Borrower hereby indemnifies and holds the Creditors
     harmless from any such loss, damage, liability or claim. 

                                      -99-
<PAGE>
 
     13.13 No Third Parties Benefited. This Agreement is made for the purpose
           --------------------------
of defining and setting forth certain obligations, rights and duties of
Borrower, the Tribe and the Creditors in connection with the Loans and Letters
of Credit, and is made for the sole benefit of the Tribe, Borrower, the
Creditors, and the Creditors' successors and assigns. Except as provided in
                                                      ------
Sections 3.7, 3.8, 13.8, 13.11, 13.15 and 13.28 no other Person shall have any
rights of any nature hereunder or by reason hereof.


     13.14 Confidentiality. Each Creditor agrees to hold any confidential
           ---------------
information that it may receive from the Tribe or Borrower pursuant to this
Agreement in confidence, except for disclosure (a) to other Lenders, their
officers, directors, employees and agents (but, in the case of agents, only
subject to an appropriate confidentiality agreement); (b) to legal counsel,
accountants and other professional advisors to the Tribe or Borrower or any
Lender; (c) to regulatory officials having jurisdiction over that Lender; (d) as
required by Law or legal process or in connection with any legal proceeding to
which that Creditor, the Tribe or Borrower are adverse parties; (e) to another
financial institution in connection with a disposition or proposed disposition
to that financial institution of all or part of that Lender's interests
hereunder or a participation interest in its Pro Rata Share (or to any SPC of
that Lender in accordance with the last sentence of Section 13.8); (f) to
prospective purchasers of any Collateral in connection with any disposition
thereof (but then only subject to an appropriate confidentiality agreement); or
(g) if an Event of Default has occurred and is continuing, to the extent that
any Creditor determines such disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies under the Loan
Documents. For purposes of the foregoing, "confidential information" shall mean
all information respecting the Tribe or Borrower delivered to the Lenders marked
"Confidential" or in another conspicuous manner which denotes its
confidentiality, other than (i) information previously filed with any
                 ----------
Governmental Agency and available to the public, (ii) information previously
published in any public medium from a source other than, directly or indirectly,
that Lender, and (iii) information previously disclosed by the Tribe or Borrower
to any Person not associated with the Tribe or Borrower without a written
confidentiality agreement. Nothing in this Section shall be construed to create
or give rise to any fiduciary duty on the part of any Creditor to the Tribe or
to Borrower. 

     13.15 Hazardous Materials Indemnity. Borrower hereby agrees to indemnify,
           -----------------------------
hold harmless and defend (by counsel reasonably satisfactory to the
Administrative Agent) each of the Creditors and their respective directors,
officers, employees, agents, successors and assigns from and against any and all
claims, losses, damages, liabilities, fines, penalties, charges, administrative
and judicial proceedings and orders, judgments, remedial action requirements,
enforcement actions of any kind, and all costs and expenses incurred in
connection therewith (including but not limited to reasonable attorneys' fees
and expenses), arising directly or indirectly, in whole or in part, out of (i)
the presence on or under the Real Property of any Hazardous Materials, or any
releases or discharges of any Hazardous Materials on, under or from the Real
Property and (ii) any activity carried on or undertaken on or off the Real
Property by Borrower or any of its predecessors in title (including the Tribe),
whether prior to or during the term of this Agreement, and whether by Borrower
or any predecessor in title or any employees, agents, contractors or
subcontractors of Borrower or any predecessor in title, or any third persons at
any time occupying or present on the Real Property, in connection with the
handling, treatment, removal, storage, decontamination, 

                                     -100-
<PAGE>
 
clean-up, transport or disposal of any Hazardous Materials at any time located
or present on or under the Real Property. The foregoing indemnity shall further
apply to any residual contamination on or under the Real Property, or affecting
any natural resources, and to any contamination of any property or natural
resources arising in connection with the generation, use, handling, storage,
transport or disposal of any such Hazardous Materials, and irrespective of
whether any of such activities were or will be undertaken in accordance with
applicable Laws, but the foregoing indemnity shall not apply to (i) Hazardous
Materials on the Real Property, the presence of which is caused by that Creditor
or (ii) activities carried on or undertaken by the Creditors, in each case
subsequent to its or their entry into the Real Property pursuant to the
Leasehold Mortgage (but only to the extent that the same are not attributable to
the Tribe or the Borrower).

     13.16 Further Assurances. The Tribe or Borrower shall, at their sole
           ------------------ 
expense and without expense to the Creditors do, execute and deliver such
further acts and documents as any Lender or the Administrative Agent from time
to time reasonably requires for the assuring and confirming unto the Creditors
of the rights hereby created or intended now or hereafter so to be, or for
carrying out the intention or facilitating the performance of the terms of any
Loan Document. 

     13.17 Integration. This Agreement, together with the other Loan Documents,
           -----------
comprises the complete and integrated agreement of the parties on the subject
matter hereof and supersedes all prior agreements, written or oral, on the
subject matter hereof. In the event of any conflict between the provisions of
this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control and govern; provided that the inclusion of supplemental
                                    -------------
rights or remedies in favor of the Creditors in any other Loan Document shall
not be deemed a conflict with this Agreement. Each Loan Document was drafted
with the joint participation of the respective parties thereto and shall be
construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof. 

     13.18 Governing Law. Except to the extent otherwise expressly provided
           -------------
therein, each Loan Document shall be governed by, and construed and enforced in
accordance with, the Laws of Connecticut, without regard to the conflicts of law
provisions of the Laws of Connecticut, provided however, that if and only to the
                                       ----------------
extent that any security interest granted to the Administrative Agent for the
benefit of the Lenders pursuant to this Agreement or any other Loan Document
shall be deemed exempt from the provisions of Article 9 of the Uniform
Commercial Code of the State of Connecticut, C.G.S. (S).42a-9-101, et seq., by
                                                                   ------ 
virtue of C.G.S. (S).42a-9-104(e), then such security interest shall be governed
by the corresponding provisions of Article 9 of Tribe's Uniform Commercial Code,
as adopted by the UCC Ordinance. Borrower and each other party hereto each
hereby consents to the application of Connecticut civil law to the construction,
interpretation and enforcement of this Agreement and the other Loan Documents,
and to the application of Connecticut civil law to the procedural aspects of any
suit, action or proceeding relating thereto, including but not limited to legal
process, execution of judgments and other legal remedies, except for any
procedural matters governed by or relating to the conduct of arbitration under
Section 13.24. 

                                     -101-
<PAGE>
 
     13.19 Severability of Provisions. Any provision in any Loan Document that
           --------------------------
is held to be inoperative, unenforceable or invalid as to any party or in any
jurisdiction shall, as to that party or jurisdiction, be inoperative,
unenforceable or invalid without affecting the remaining provisions or the
operation, enforceability or validity of that provision as to any other party or
in any other jurisdiction, and to this end the provisions of all Loan Documents
are declared to be severable. 

     13.20 Independent Covenants. Each covenant in Articles 6, 7, 8 and 9 is
           ---------------------
independent of the other covenants in those Articles; the breach of any such
covenant shall not be excused by the fact that the circumstances underlying such
breach would be permitted by another such covenant. 

     13.21 Headings. Article and Section headings in this Agreement and the
           --------
other Loan Documents are included for convenience of reference only and are not
part of this Agreement or the other Loan Documents for any other purpose. 

     13.22 Time of the Essence. Time is of the essence of the Loan Documents.
           -------------------  

     13.23 Tax Withholding Exemption Certificates. On or before the Closing
           --------------------------------------
Date, each Lender which is organized outside the United States of America shall
deliver to Borrower a properly completed and duly executed Internal Revenue
Service Form 4224 or Form 1001 and any other certificate or statement required
by applicable Laws to establish that payments due to such Lender under the Loan
Documents are (a) not subject to withholding under the Code because such
payments are effectively connected with the conduct of a trade or business in
the United States of America or (b) totally exempt from United States tax under
the provisions of an applicable tax treaty.

     13.24 Arbitration Reference.
           ---------------------
          (a) Mandatory Arbitration. At the option of the Administrative Agent
              ---------------------
  (exercised in accordance with consent of the Requisite Lenders), Borrower or
  (to the extent it is a party to any such controversy or claim), the Tribe, any
  controversy or claim between or among the parties arising out of or relating
  to this Agreement or any agreements or instruments relating hereto or
  delivered in connection herewith and any claim based on or arising from an
  alleged tort, shall be determined by arbitration. The arbitration shall be
  conducted in accordance with the United States Arbitration Act (Title 9, U.S.
  Code), notwithstanding any choice of law provision in this Agreement, and
  under the Commercial Rules of the American Arbitration Association ("AAA").
  The arbitrators shall give effect to statutes of limitation in determining any
  claim. Any controversy concerning whether an issue is arbitrable shall be
  determined by the arbitrators. Judgment upon the arbitration award may be
  entered in any court having jurisdiction. The institution and maintenance of
  an action for judicial relief or pursuit of a provisional or ancillary remedy
  shall not constitute a waiver of the right of any party, including the
  plaintiff, to submit the controversy or claim to arbitration if any other
  party contests such action for judicial relief.

                                     -102-
<PAGE>
 
          (b) Provisional Remedies, Self-Help and Foreclosure. No provision of
              -----------------------------------------------
     this section shall limit the right of any party to this Agreement to
     exercise self-help remedies such as setoff, to foreclose against or sell
     any real or personal property collateral or security or to obtain
     provisional or ancillary remedies from a court of competent jurisdiction
     before, after, or during the pendency of any arbitration or other
     proceeding. The exercise of a remedy does not waive the right of either
     party to resort to arbitration or reference. At the Requisite Lenders'
     option, foreclosure under a deed of trust or mortgage may be accomplished
     either by exercise of power of sale under the deed of trust or mortgage or
     by judicial foreclosure.

          (c) Limitation. This Section shall not be construed to require
              ----------
     arbitration by the Creditors of any disputes which now exist or hereafter
     arise amongst themselves which do not involve the Tribe or Borrower and are
     not related to this Agreement and the Loan Documents.

          (d) Specific Enforcement Representation. Each party to this Agreement
              -----------------------------------
     severally represents and warrants to the other parties that this Section
     13.24 is specifically enforceable against such party by the other parties.

     13.25 PURPORTED ORAL AMENDMENTS. THE TRIBE, THE BORROWER AND THE CREDITORS
           -------------------------
EXPRESSLY ACKNOWLEDGE THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY
BE AMENDED OR MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR
SUPPLEMENTED, BY AN INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 13.2. EACH
OF THE TRIBE AND BORROWER AGREES THAT IT WILL NOT RELY ON ANY COURSE OF DEALING,
COURSE OF PERFORMANCE, OR ORAL OR WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF
ANY CREDITOR THAT DOES NOT COMPLY WITH SECTION 13.2 TO EFFECT AN AMENDMENT,
MODIFICATION, WAIVER OR SUPPLEMENT TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS. 

     13.26 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
           --------------------------------
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTY HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. 

     13.27 WAIVER OF SOVEREIGN IMMUNITY; CONSENT TO JURISDICTION. 
           -----------------------------------------------------

                                     -103-
<PAGE>
 
     (A) THE TRIBE AND THE BORROWER EACH HEREBY EXPRESSLY AND IRREVOCABLY WAIVE
THE SOVEREIGN IMMUNITY OF THE MOHEGAN TRIBAL GAMING AUTHORITY (AND ANY DEFENSE
BASED THEREON) FROM ANY SUIT, ACTION OR PROCEEDING OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OF NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN
AID OF EXECUTION, EXECUTION, EXERCISE OF CONTEMPT POWERS, OR OTHERWISE) IN ANY
FORUM, WITH RESPECT TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, PROVIDED THAT (1) THE WAIVER
                                              -------------
CONTAINED IN THIS CLAUSE (A) IS EXPRESSLY LIMITED TO ACTIONS AGAINST THE
BORROWER AND (2) ANY RECOVERY UPON ANY JUDGMENT RESULTING THEREFROM SHALL BE
LIMITED TO RECOVERY AGAINST THE ASSETS AND REVENUES OF THE BORROWER.

     (B) THE TRIBE HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ITS OWN SOVEREIGN
IMMUNITY (APPLICABLE TO ITSELF AS AN INDIAN TRIBAL NATION) (AND ANY DEFENSE
BASED THEREON) FROM ANY SUIT, ACTION OR PROCEEDING OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OF NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN
AID OF EXECUTION, EXECUTION, EXERCISE OF CONTEMPT POWERS, OR OTHERWISE) WITH
RESPECT TO THE REPRESENTATIONS AND WARRANTIES OF THE TRIBE SET FORTH IN ARTICLE
4, THE COVENANTS OF THE TRIBE SET FORTH IN ARTICLE 9, AND EACH PROVISION OF
SECTION 11.1 WHICH RELATES TO AN EVENT OF DEFAULT CAUSED BY THE TRIBE'S BREACH
OF ANY SUCH REPRESENTATION, WARRANTY OR COVENANT, IT BEING EXPRESSLY UNDERSTOOD
THAT (1) THE WAIVERS AND CONSENTS CONTAINED IN THIS CLAUSE (B) ARE NOT LIMITED
TO ACTIONS AGAINST THE BORROWER, (2) ANY ACTION DESCRIBED IN THIS CLAUSE (B) MAY
BE BROUGHT AGAINST THE TRIBE, AND (3) ANY RECOVERY UPON ANY JUDGMENT RESULTING
FROM ANY SUCH ACTION MAY BE HAD AGAINST THE ASSETS AND REVENUES OF THE TRIBE IN
A MANNER CONSISTENT WITH SECTION 13.28.

     (C) EACH OF THE TRIBE AND BORROWER HEREBY CONSENTS TO THE JURISDICTION OF
THE COURTS OF THE STATE OF CONNECTICUT, THE COURTS OF THE UNITED STATES, AND THE
COURTS OF ANY OTHER STATE WHICH MAY HAVE JURISDICTION OVER THE SUBJECT MATTER,
OVER ANY SUCH ACTION AND OVER BORROWER AND THE TRIBE.

     (D) THE WAIVERS AND CONSENTS DESCRIBED IN THIS SECTION SHALL INURE TO THE
BENEFIT OF THE CREDITORS AND EACH OTHER PERSON WHO IS ENTITLED TO THE BENEFITS
OF THE LOAN DOCUMENTS (INCLUDING WITHOUT LIMITATION THE INDEMNIFIED PERSONS
REFERRED TO IN SECTION 13.11). SUBJECT TO SECTION 13.28 THE CREDITORS AND SUCH
OTHER PERSONS SHALL HAVE AND BE ENTITLED TO ALL AVAILABLE LEGAL AND 

                                     -104-
<PAGE>
 
  EQUITABLE REMEDIES, INCLUDING THE RIGHT TO SPECIFIC PERFORMANCE, MONEY DAMAGES
  AND INJUNCTIVE OR DECLARATORY RELIEF. THE WAIVERS OF SOVEREIGN IMMUNITY AND
  CONSENTS TO JURISDICTION CONTAINED IN THIS SECTION ARE IRREVOCABLE.

     13.28 Lender Covenant. In any action or proceeding against the Borrower to
           ---------------
enforce the Loan Documents which is not also an action or proceeding against the
Tribe, the Creditors agree that they shall have no recourse to the Tribe or to
Non-Authority Property. In any action or proceeding to enforce the Loan
Documents which includes the Tribe, the Creditors agree that they shall, to the
extent then permitted by applicable Law, take commercially practicable steps to
enforce any claim for damages awarded to the Creditors by any court, tribunal,
arbitrator or other decision maker against the Borrower or the Authority
Property prior to taking general recourse to the Tribe or Non-Authority
Property. The provisions of this Section shall not be construed (a) to create
any recourse on the part of the Creditors against the Tribe, its Properties or
revenues except for any breach of the Tribe's own representations, warranties
and covenants set forth in Articles 4 and 9, or (b) to require exhaustion by the
Creditors of any remedies against Borrower or the Authority Property prior to
having recourse, in the proper case, against the Tribe and Non-Authority
Property.

                                     -105-
<PAGE>
 
     13.29 PREJUDGMENT REMEDY WAIVER. Each of the Tribe and Borrower
           -------------------------
represents, warrants and acknowledges that the transaction of which this
Agreement is a part is a commercial transaction and not a consumer transaction.
Monies now or in the future to be advanced to or on behalf of Borrower are not
and will not be used for personal, family or household purposes. 

     EACH OF THE TRIBE AND BORROWER ACKNOWLEDGES THAT IT HAS THE RIGHT UNDER
SECTION 52-278a, ET SEQ., OF THE CONNECTICUT GENERAL STATUTES, SUBJECT TO
                 ------
CERTAIN LIMITATIONS, TO NOTICE OF AND HEARING ON THE RIGHT OF THE CREDITORS TO
OBTAIN A PREJUDGMENT REMEDY, SUCH AS ATTACHMENT, GARNISHMENT OR REPLEVIN, UPON
COMMENCING ANY LITIGATION AGAINST EITHER THE TRIBE OR BORROWER. NOTWITHSTANDING
SUCH RIGHT, EACH OF THE TRIBE AND BORROWER HEREBY WAIVES ALL RIGHTS TO NOTICE,
JUDICIAL HEARING OR PRIOR COURT ORDER TO WHICH IT MIGHT OTHERWISE HAVE THE RIGHT
UNDER SAID STATUTE OR UNDER ANY OTHER STATE OR FEDERAL STATUTE OR CONSTITUTION
IN CONNECTION WITH THE OBTAINING BY THE CREDITORS OF ANY PREJUDGMENT REMEDY IN
CONNECTION WITH THIS AGREEMENT. EACH OF THE TRIBE AND BORROWER FURTHER CONSENTS
TO THE ISSUANCE OF ANY PREJUDGMENT REMEDIES WITHOUT A BOND AND AGREES NOT TO
REQUEST OR FILE MOTIONS SEEKING TO REQUIRE THE POSTING OF A BOND UNDER PUBLIC
ACT 93-431 IN CONNECTION WITH THE CREDITORS' EXERCISE OF ANY PREJUDGMENT REMEDY.
EACH OF THE TRIBE AND BORROWER ALSO WAIVES ANY AND ALL OBJECTION WHICH IT MIGHT
OTHERWISE ASSERT, NOW OR IN THE FUTURE, TO THE EXERCISE OR USE BY THE CREDITORS
OF ANY RIGHT OF SETOFF, REPOSSESSION OR SELF HELP AS MAY PRESENTLY EXIST UNDER
STATUTE OR COMMON LAW. THIS SECTION SHALL NOT BE CONSTRUED IN DEROGATION OF THE
RIGHTS OF THE TRIBE UNDER SECTION 13.28.

     13.30 Designated Senior Secured Indebtedness. Borrower hereby irrevocably
           --------------------------------------
designates the Obligations as "Designated Senior Indebtedness" and "Designated
Senior Secured Indebtedness" as such terms are defined in the Relinquishment
Agreement and irrevocably designates the Obligations as "Designated Senior
Indebtedness" as such term is defined in the New Subordinated Notes Indenture.

                                     -106-
<PAGE>
 
     13.31 Compliance with 25 U.S.C.(S).81.
           ------------------------------
<TABLE> 
<CAPTION> 

          (a) In compliance with Section 81 of Title 25 of the United States
     Code, the residence and occupation of the parties to this Agreement are as
     follows:

<S>                                      <C>
      Party in interest:                 Bank of America National Trust and Savings Association, 
                                         as Administrative Agent, and the Lenders named herein

      Residence:                         Bank of America National Trust and Savings Association, 
                                         as Administrative Agent
                                            555 South Flower Street
                                            Los Angeles, California 90071
                                            Attn: Janice Hammond, Vice President
                                            Telephone:  (213) 228-9861
                                            Telecopier: (213) 228-2299

      Occupation                         Commercial Lenders

      Party in interest:                 The Mohegan Tribal Gaming Authority

      Residence                          Uncasville, Connecticut

      Occupation                         Tribal Gaming Instrumentality

      Party in interest:                 The Mohegan Tribe of Indians of Connecticut

      Residence                          Uncasville, Connecticut

      Occupation                         A federally recognized Indian Tribe
</TABLE>


          (b) The Chairman of the Management Board of The Mohegan Tribal Gaming
     Authority is authorized to execute this Agreement and the other Loan
     Documents by Resolution of the Management Board adopted on February 18,
     1999, which finds this Agreement to be in the long range economic
     objectives of Borrower and the Tribe. The members of the Management Board
     including the Chairman exercise their authority in this instance because
     they believe that this Agreement and the other Loan Documents and the
     consummation of the transactions contemplated hereby and thereby are in the
     best interests of Borrower and the Tribe.

                                     -107-
<PAGE>
 
     (c) The Chairman of the Tribal Council of The Mohegan Tribe of Indians of
Connecticut is authorized to execute this Agreement and the other Loan Documents
by Resolution of the Tribal Council adopted on February 18, 1999, which finds
this Agreement to be in the long range economic objectives of Tribe. The members
of the Tribal Council including the Chairman exercise their authority in this
instance because they believe that this Agreement and the other Loan Documents
and the consummation of the transactions contemplated hereby and thereby are in
the best interests of Tribe. 

     (d) This Agreement and the other Loan Documents were executed in
counterpart on or about 12:01 p.m. on the 3rd day of March, 1999 at Uncasville,
Connecticut, for the particular purposes set forth above.

     (e) This Agreement relates to the Obligations having an initial maturity
date of March 3, 2004.

     (f) Borrower agrees that this Agreement and the other Loan Documents are in
compliance with 25 U.S.C.(S)81.


                                     -108-
<PAGE>
 
     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

               "Borrower":

               THE MOHEGAN TRIBAL GAMING AUTHORITY

               By:  
                  ----------------------------------------------

               Title: 
                     -------------------------------------------

               Address for Notices:
               1 Mohegan Sun Boulevard
               Uncasville, Connecticut 06382
               Attn:        Jeffrey Hartmann, Chief Financial Officer
               Telephone:  (860) 204-7171
               Telecopier: (860) 204-7167

               "Tribe":

               THE MOHEGAN TRIBE OF INDIANS OF CONNECTICUT


               By: 
                  ----------------------------------------------
                             Tribal Council Chairman

               Address for Notices:
               P.O. Box 488
               67 Sandy Desert Road
               Uncasville, Connecticut 06382
               Attn:        Leo Chupaska, Chief Financial Officer
               Telephone:  (860) 204-6106
               Telecopier: (860) 204-7167

Approved pursuant to 25 U.S.C. (S)81:

United States Department of the Interior
Bureau of Indian Affairs:

By: 
   ------------------------------------------
Area Director of the Eastern Office of the Bureau of Indian Affairs for the
Secretary of the Interior and the Commissioner of Indian Affairs, acting under
delegated authority.

Approval Dated:
               ------------------------------


                                                          MOHEGAN LOAN AGREEMENT
                                      -109-                       SIGNATURE PAGE
<PAGE>
 
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as 
Administrative Agent


By:  
   -----------------------------------------------
                    Janice Hammond, Vice President

Address:
Bank of America National Trust and Savings Association
555 South Flower Street
Los Angeles, California 90017
Attn: Janice Hammond, Vice President
Telephone:  (213) 228-9861
Telecopier: (213) 228-2299


BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as a 
Lender and as the Issuing Lender

By:  
   -----------------------------------------------
          Jon M. Varnell, Managing Director

Address for Notices:

Bank of America National Trust and Savings Association
Credit Products-LA 3283
Entertainment and Media Group
555 South Flower Street, 10th Floor
Los Angeles, California 90071
Attn:  Jon M. Varnell, Managing Director
Telephone:  (213) 228 6181
Telecopier: (213) 228 2641

with a copy to:
Bank of America National Trust and Savings Association
Credit Products-LA 3283
Entertainment and Media Group
555 South Flower Street, 10th Floor
Los Angeles, California 90071
Attn: William S. Newby, Managing Director
Telephone:  (213) 228-2438
Telecopier: (213) 228-3145



                                                          MOHEGAN LOAN AGREEMENT
                                      -110-                       SIGNATURE PAGE
<PAGE>
 
SALOMON BROTHERS HOLDING COMPANY INC.




By:  
   ---------------------------------------------

Title:
      ------------------------------------------

Address for notices:

Citibank, N.A.
399 Park Ave., 11th Floor, Zone 20
New York, New York 10043
Attn: Townsend Weekes, Vice President
Facsimile: (212) 793-3963
Tel: (212) 559-4846


                                                          MOHEGAN LOAN AGREEMENT
                                      -111-                       SIGNATURE PAGE
<PAGE>
 
SOCIETE GENERALE




By:  
   -------------------------------------------------

Title: 
      ----------------------------------------------

Address for notices:


Societe Generale
2029 Century Park East, Suite 2900
Los Angeles, California 90067
Attn:  Donald L. Schubert, Vice President
Facsimile: (310) 551-1537
Telephone: (310) 788-7104


                                                          MOHEGAN LOAN AGREEMENT
                                      -112-                       SIGNATURE PAGE
<PAGE>
 
BANKBOSTON, N.A.



By:  
   -------------------------------------------------

Title: 
      ----------------------------------------------

Address for notices:

BankBoston Corporation (Boston HQ)
Mail Code 01-08-08
100 Federal Street
Boston, Massachusetts 02110-1802
Attn: 
     ---------------------
Facsimile: (617) 434-3401
Tel:  
    ----------------------


                                                          MOHEGAN LOAN AGREEMENT
                                      -113-                       SIGNATURE PAGE
<PAGE>
 
FLEET NATIONAL BANK



By:  
   -------------------------------------------------

Title: 
      ----------------------------------------------

Address for notices:

Fleet National Bank
250 State Street
New London, Connecticut 06320
Attn:  William Lofgren, Senior Vice President
Facsimile:  (860) 437-4269
Tel:  (860) 437-4212


                                                          MOHEGAN LOAN AGREEMENT
                                      -114-                       SIGNATURE PAGE
<PAGE>
 
COMMERZBANK AG, LOS ANGELES BRANCH



By:  
   -------------------------------------------------

Title: 
      ----------------------------------------------


By:  
   -------------------------------------------------

Title: 
      ----------------------------------------------


Address for notices:

Commerzbank AG, Los Angeles Branch
633 West 5th Street, Suite 6600
Los Angeles, California 90071
Attn:  Werner Schmidbauer, Vice President
Facsimile:  (213) 623-0039
Tel:  (213) 683-5413


                                                          MOHEGAN LOAN AGREEMENT
                                      -115-                       SIGNATURE PAGE
<PAGE>
 
KEYBANK NATIONAL ASSOCIATION



By:  
   -------------------------------------------------

Title: 
      ----------------------------------------------

Address for notices:

KeyBank National Association
Mail Stop WA 31-10-4612
700 5th Avenue, 46th Floor
Seattle, Washington 98104
Attn:  Mary Young
Facsimile:  (206) 684-6035
Tel:  (206) 684-6085


                                                          MOHEGAN LOAN AGREEMENT
                                      -116-                       SIGNATURE PAGE
<PAGE>
 
PEOPLE'S BANK



By:  
   -------------------------------------------------

Title: 
      ----------------------------------------------

Address for notices:

People's Bank
4 Broadway
Norwich, Connecticut 06360
Attn: 
     --------------------
Facsimile: 
          ---------------
Tel:  
    ---------------------


                                                          MOHEGAN LOAN AGREEMENT
                                      -117-                       SIGNATURE PAGE
<PAGE>
 
CITIZENS BANK OF CONNECTICUT



By:  
   -------------------------------------------------

Title: 
      ----------------------------------------------

Address for notices:

Citizens Bank
63 Eugene O'Neill Drive
New London, Connecticut 06320
Attn:  Glenna Scarramoza
Facsimile:  (860) 444-3496
Tel:  (860) 444-3476


                                                          MOHEGAN LOAN AGREEMENT
                                      -118-                       SIGNATURE PAGE
<PAGE>
 
FIRST SECURITY BANK, N.A.



By:  
   -------------------------------------------------

Title: 
      ----------------------------------------------

Address for notices:

First Security Bank, Utah
Second Floor
15 East 100 South
Salt Lake City, Utah 84111
Attn: 
     --------------------
Facsimile:  (801) 246-5532
Tel: 
    ---------------------


                                                          MOHEGAN LOAN AGREEMENT
                                      -119-                       SIGNATURE PAGE
<PAGE>
 
Approved pursuant to 25 U.S.C. (S)81:

United States Department of the Interior
Bureau of Indian Affairs:



By: 
   --------------------------------------
Area Director of the Eastern Office of the Bureau of Indian Affairs for the
Secretary of the Interior and the Commissioner of Indian Affairs, acting under
delegated authority.

Approval Dated:
               --------------------------


                                                          MOHEGAN LOAN AGREEMENT
                                      -120-                       SIGNATURE PAGE
<PAGE>
 
                         MOHEGAN TRIBAL GAMING AUTHORITY

                 $425,000,000 REDUCING REVOLVING CREDIT FACILITY

                                FINAL ALLOCATIONS
<TABLE>
<CAPTION>
============================================================================================================
         LENDER                           COMMITMENT                  FINAL                 PERCENT OF
                                            AMOUNT                  ALLOCATION                 TOTAL
============================================================================================================
<S>                                   <C>                        <C>                        <C>          
        Administrative Agent
--------------------------------------
Bank of America National Trust and    $ 75,000,000.00            $ 75,000,000.00            17.647058824%
Savings Association

          Syndication Agent
--------------------------------------
Salomon Smith Barney                  $ 75,000,000.00            $ 75,000,000.00            17.647058824%

         Documentation Agent
--------------------------------------
Societe Generale                      $ 75,000,000.00            $ 75,000,000.00            17.647058824%

       Senior Managing Agents
--------------------------------------
Bank Boston, N.A.                     $ 50,000,000.00            $ 50,000,000.00            11.764705882%
Fleet Bank                            $ 50,000,000.00            $ 50,000,000.00            11.764705882%

              Co-Agents
--------------------------------------
Commerzbank AG                        $ 25,000,000.00            $ 25,000,000.00             5.882352941%
KeyBank                               $ 25,000,000.00            $ 25,000,000.00             5.882352941%
People's Bank                         $ 25,000,000.00            $ 25,000,000.00             5.882352941%

            Participants
--------------------------------------
Citizens Bank of Connecticut          $ 15,000,000.00            $ 15,000,000.00             3.529411765%
First Security Bank                   $ 10,000,000.00            $ 10,000,000.00             2.352941176%
------------------------------------------------------------------------------------------------------------
TOTAL                                 $425,000,000.00            $425,000,000.00                  100.00%
============================================================================================================
</TABLE>


                                     -121-
<PAGE>
 
                                    EXHIBIT A
                                    ---------

                              ASSIGNMENT AGREEMENT
                              --------------------


     THIS ASSIGNMENT AGREEMENT (this "Assignment") is entered into as of
_____________, ____ between _______________________________________ ("Assignor")
and _____________________________________________________ ("Assignee") with
reference to that certain Loan Agreement dated as of March 3, 1999 among The
Mohegan Tribe of Indians of Connecticut, a federally recognized Indian Tribe and
native American sovereign nation (the "Tribe"), The Mohegan Tribal Gaming
Authority, an instrumentality of the Tribe ("Borrower"), the Lenders,
Documentation Agent and Syndication Agent referred to therein and Bank of
America National Trust and Savings Association ("Bank of America"), as
Administrative Agent (as amended from time to time, the "Loan Agreement").
Capitalized terms used but not defined herein are used with the meanings set
forth for those terms in the Loan Agreement.

                                    RECITALS
                                    --------

     A. Assignor holds a Pro Rata Share of the Commitment to make Loans (the
"Commitment") under the Loan Agreement.

     B. As of the date hereof, the outstanding principal balance of the Advances
made by Assignor (the "Assignor Advances") is set forth on Annex I hereto.

     C. Assignor desires to assign its rights under the Loan Agreement and the
other Loan Documents with respect to a portion of the Commitment and a portion
of any Assignor Advances to Assignee and Assignee has agreed to assume the
obligations of Assignor under the Loan Documents to the extent of the rights so
assigned. 

     NOW, THEREFORE, in consideration of the matters recited above, and the
mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows: 


     SECTION 1. Assignment and Assumption.
                -------------------------

     (a) Assignor hereby assigns to Assignee, without recourse, representation
or warranty, an undivided fractional interest in Assignor's rights arising under
the Loan Documents relating to the Commitment, and any Assignor Advances to the
extent


                                      -1-
<PAGE>
 
of the Assigned Pro Rata Share reflected on Annex I hereto (the "Assigned
Pro Rata Share") including, without limitation, (i) all amounts advanced and to
be advanced or participated in by Assignor pursuant to the Commitment; (ii) all
of Assignor's rights and powers contained in the Loan Documents; (iii) all
claims of Assignor against persons who may in the future become or are now
liable for repayment of any Assignor Advances or reimbursement of expenses
incurred by Assignor on account of any Assignor Advances; and (iv) all amounts
received by Assignor on account of any Assignor Advances, whether from the
Borrower or from others who are now or may in the future become obligated with
respect to some or all of the amounts owing on any Assignor Advances or from any
other source, including, without limitation, recovery from litigation. 

     (b) Assignee hereby assumes from Assignor, and Assignor is hereby expressly
and absolutely released from, the Assigned Pro Rata Share of all of Assignor's
obligations arising under the Loan Documents relating to the Commitment
including, without limitation, all obligations with respect to any Assignor
Advances. Assignee agrees that it shall fully perform all of the obligations of
Assignor with respect to the interests assigned by this Assignment. 

     (c) Assignor and Assignee hereby agree that Annex I attached hereto sets
forth (i) the amount of all Assignor Advances giving effect to the assignment
and assumption described herein, (ii) the amount of the Commitment and the Pro
Rata Share of Assignee after giving effect to the assignment and assumption
described herein, and (iii) accrued but unpaid interest thereon. 

     (d) Assignor and Assignee hereby agree that, upon giving effect to the
assignment and assumption described herein, Assignee shall have all of the
obligations under the Loan Documents of, and shall be deemed to have made all of
the covenants and agreements contained in the Loan Documents made by, a Lender
having a Pro Rata Share of the Commitment as reflected on Annex I attached
hereto. Assignee hereby acknowledges and agrees that the agreement set forth in
this subsection 1(d) is expressly made for the benefit of the Borrower, the
Administrative Agent, Assignor and the other Lenders and their respective
successors and permitted assigns. From and after the date of this Assignment,
(i) Assignee shall be a party to the Loan Agreement and, to the extent provided
in this Assignment, shall have the rights and obligations of a Lender under the
Loan Agreement and the other Loan Documents and (ii) Assignor shall, to the
extent provided in this Assignment, relinquish its rights and be released from
its obligations under the Loan Agreement and the other Loan Documents. 

     (e) Assignor and Assignee hereby acknowledge and confirm their
understanding and intent (i) that this Assignment shall effect the assignment by
Assignor and the assumption by Assignee of the Assigned Pro Rata Share of
Assignor's rights and obligations under the Loan Documents and (ii) that any
other assignments by Assignor of a 


                                      -2-
<PAGE>
 
portion of its rights and obligations under the Loan Documents shall have no
effect on the Commitment and Pro Rata Share of Assignee set forth on Annex I
attached hereto.

     (f) Assignee agrees to pay to Assignor, on ________, an amount equal to
$____________, in immediately available funds, representing the purchase price
of the Assigned Pro Rata Share. Assignor and Assignee shall make all appropriate
adjustments for periods prior to the date of this Assignment or with respect to
the making of this Assignment directly between themselves.

     (g) Nothing contained in this Assignment shall be construed to amend or
modify the terms of the Loan Documents other than to effectuate the assignment
contemplated herein.

     SECTION 2. Representations and Warranties.
                ------------------------------

     (a) Assignee represents and warrants that it is an Eligible Assignee.

     (b) Assignee represents and warrants that it has become a party hereto
solely in reliance upon its own independent investigation of the financial and
other circumstances surrounding Borrower, any Assignor Advances and all aspects
of the transactions evidenced by or referenced in the Loan Documents, or has
otherwise satisfied itself thereto, and that it is not relying upon any
representation, warranty or statement (except any such representation, warranty
or statement expressly set forth in this Assignment) of Assignor in connection
with the assignment made hereby. Assignee further acknowledges that Assignee
will, independently and without reliance upon Assignor and based upon Assignee's
review of such documents and information as Assignee deems appropriate at the
time, continue to make its own credit decisions in connection with the
assignment made hereby. Assignor shall have no duty or responsibility either
initially or on a continuing basis to make any such investigation or any such
appraisal on behalf of Assignee or to provide Assignee with any credit or other
information with respect thereto, whether coming into its possession before the
making of the initial extension of credit under the Loan Agreement or at any
time thereafter.

     (c) Assignee represents and warrants to Assignor that it has experience and
expertise in the making of loans such as the Advances assigned hereby and with
respect to the other types of credit which may be extended under the Loan
Agreement; that it has acquired its Assigned Pro Rata Share for its own account
and not with any present intention of selling all or any portion of such
interest; and that it has received, reviewed and approved copies of all Loan
Documents.

     (d) Assignor and Assignee represent to one another and to the
Administrative Agent that they have duly authorized, executed and delivered this
Assignment, that they are legally entitled to enter into the assignment and
assumption 


                                      -3-
<PAGE>
 
transactions contemplated herein and that, in the case of Assignor, that it is
the legal and beneficial owner of the Assigned Pro Rata Share, free of any Liens
or adverse claims.

     (e) Assignor shall not be responsible to Assignee for the execution,
effectiveness, accuracy, completeness, legal effect, genuineness, validity,
enforceability, collectibility or sufficiency of any of the Loan Documents
(other than its own due execution of the Loan Documents) or for any
representations, warranties, recitals or statements made therein or in any
written or oral statement or in any financial or other statements, instruments,
reports, certificates or any other documents made or furnished or made available
by Assignor to Assignee (other than written representations, warranties,
recitals or statements made by Assignor therein) or by or on behalf of the
Borrower or the Tribe to Assignor or Assignee in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of the Borrower or any other Person liable for the
payment of any Advance or payment of amounts owed in connection with other
extensions of credit under the Loan Agreement or any other matter. Assignor
shall not be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained in any of the Loan Documents or as to the use of the proceeds of the
Advances or other extensions of credit under the Loan Agreement or as to the
existence or possible existence of any Default or Event of Default.

     (f) Each party to this Assignment represents and warrants to the other
party to this Assignment that it has full power and authority to enter into this
Assignment and to perform its obligations under this Assignment in accordance
with the provisions of this Assignment, that this Assignment has been duly
authorized, executed and delivered by such party and that this Assignment
constitutes a legal, valid and binding obligation of such party, enforceable in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, moratorium or other similar laws affecting creditors' rights
generally and by general equitable principles. 

     SECTION 3. Notices. 
                -------

     Any notice or other communication required or permitted to be given
hereunder shall be in writing addressed to the parties at their addresses set
forth below and shall be delivered in the manner set forth for notices in the
Loan Agreement:

     (a) Notices to Assignor:


         ----------------------------------------

         ----------------------------------------

         ----------------------------------------


                                      -4-
<PAGE>
 
     (b) Notices to Assignee:


         ----------------------------------------

         ----------------------------------------

         ----------------------------------------

     SECTION 4. Miscellaneous Provisions.
                ------------------------

     (a) Neither this Assignment nor any term hereof may be changed, waived,
discharged or terminated, except by an instrument in writing signed by the party
against whom enforcement of such change, waiver, discharge or termination is
sought.

     (b) Title and headings of sections in this Assignment are for convenience
of reference only and shall not be used to define or limit the provisions
hereof.

     (c) This Assignment and the transactions contemplated hereunder shall be
governed by and construed and enforced in accordance with the laws of the State
of Connecticut.

     (d) This Assignment embodies the entire agreement between Assignor and
Assignee with respect to the Loan Documents and supersedes all prior agreements
between Assignor and Assignee with respect to the Loan Documents. 

     (e) This Assignment may be executed in one or more counterparts, each of
which shall constitute an original, but all of which together shall constitute
but one Assignment. The signature pages of all counterparts of this Assignment
may be detached and attached to a single counterpart of this Assignment so that
all signature pages are physically attached to the same document. 

     (f) All of the terms, covenants and conditions herein contained shall inure
to the benefit of and be binding upon the parties hereto, and their respective
successors and assigns.

     (g) Every provision of this Assignment is intended to be severable. If any
term or provision thereof is declared by a court of competent jurisdiction to be
illegal, invalid or unenforceable for any reason whatsoever, such illegality,
invalidity or unenforceability shall not affect the balance of the terms and
provisions hereof, which terms and provisions shall remain binding and
enforceable, and to the extent possible all of the other provisions shall
nonetheless remain in full force and effect.


                                      -5-
<PAGE>
 
     SECTION 5. The Administrative Agent.
                ------------------------

     Assignor and Assignee have examined this Assignment and have exercised
independent credit judgment in determining to enter into this Assignment. Each
of Assignor and Assignee have obtained the advice of their counsel with respect
to this document or waive the opportunity to do so. The Administrative Agent
bears no responsibility for the form, legality or sufficiency of this
Assignment.


                                      -6-
<PAGE>
 
     IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of
the date first above written.


                                        "ASSIGNOR"


                                        -----------------------------------



                                        By:  
                                            --------------------------------

                                           Name: 
                                                ---------------------------

                                           Title:
                                                 --------------------------



                                        "ASSIGNEE"


                                        -----------------------------------



                                        By:  
                                           --------------------------------

                                           Name: 
                                                ---------------------------

                                           Title:
                                                 --------------------------

                                      -7-
<PAGE>
 
                                     ANNEX I



I    ASSIGNOR'S PRO RATA SHARE OF THE COMMITMENT BEFORE ASSIGNMENT

     Commitment                                  $
                                                  ------------------------

     Pro Rata Share                                              %
                                                     ------------

     Outstanding Principal                       $
                                                  ------------------------

     Accrued and unpaid Interest                 $
                                                  ------------------------


II   ASSIGNOR'S REMAINING PRO RATA SHARE OF THE COMMITMENT AFTER ASSIGNMENT

     Commitment                                  $
                                                  ------------------------

     Pro Rata Share                                              %
                                                     ------------

III  ASSIGNEE'S PRO RATA SHARE OF THE COMMITMENT AFTER ASSIGNMENT

     Commitment                                           $
                                                           ------------------

     Pro Rata Share                                              %
                                                     ------------

                                      -8-
<PAGE>
 
                           ACKNOWLEDGMENT AND CONSENT
                                  OF THE AGENT

     Bank of America National Trust and Savings Association, as Administrative
Agent, hereby (i) acknowledges and consents to the assignment to and assumption
by Assignee of Assignor's rights and obligations with respect to a portion of
the Commitment effected pursuant to the foregoing Assignment and (ii) agrees
that, for all purposes of the Loan Documents, Assignee shall be deemed to be a
Lender having a Pro Rata Share of the Commitment as reflected on Annex I
attached to the Assignment.

                                        BANK OF AMERICA NATIONAL TRUST 
                                        AND SAVINGS ASSOCIATION, as 
                                        Administrative Agent

                                        By: 
                                           -----------------------------

                                        Name: 
                                             ---------------------------

                                        Title: 
                                              --------------------------


                           ACKNOWLEDGMENT AND CONSENT
                                 OF THE BORROWER

     Borrower hereby (i) acknowledges and consents to the assignment to and
assumption by Assignee of Assignor's rights and obligations with respect to a
portion of the Commitment effected pursuant to the foregoing Assignment and (ii)
agrees that, for all purposes of the Loan Documents, Assignee shall be deemed to
be a Lender having a Pro Rata Share of the Commitment as reflected on Annex I
attached to the Assignment.

                                        "Borrower":

                                        THE MOHEGAN TRIBAL GAMING 
                                        AUTHORITY


                                        By: 
                                           -----------------------------

                                        Title: 
                                              --------------------------


                                      -9-
<PAGE>
 
                                    EXHIBIT D
                                    ---------


                                      NOTE
                                      ----

$_______________                                                   March 3, 1999
                                                         Uncasville, Connecticut

     FOR VALUE RECEIVED, the undersigned promises to pay to the order of
______________________________________________________ (the "Lender"), the
principal amount of ___________________ ($________) or such lesser aggregate
amounts as may be made as Advances under the Commitment pursuant to the Loan
Agreement referred to below, payable as hereinafter set forth. The undersigned
promises to pay interest on the principal amount hereof remaining unpaid from
time to time from the date hereon until the date of payment in full, payable as
hereinafter set forth.

     Reference is made to the Loan Agreement of even date herewith, by and among
the undersigned, as Borrower, The Mohegan Tribe of Indians of Connecticut, a
federally recognized Indian Tribe and native American sovereign nation (the
"Tribe"), the Lenders, Syndication Agent and Documentation Agent named therein,
and Bank of America National Trust and Savings Association, as Administrative
Agent (as the same may be further amended, renewed, extended or otherwise
modified from time to time, the "Loan Agreement"). Terms defined in the Loan
Agreement and not otherwise defined herein are used herein with the meanings
given those terms in the Loan Agreement. This is one of the Notes referred to in
the Loan Agreement, and the Lender and any subsequent rightful holder hereof
(collectively "Holder") is entitled to all of the rights, remedies, benefits and
privileges provided for in the Loan Agreement as originally executed or as it
may from time to time be supplemented, modified or amended. The Loan Agreement,
among other things, contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events upon the terms and conditions
therein specified.

     The principal indebtedness evidenced by this Note shall be payable as
provided in the Loan Agreement and in any event on the Maturity Date.

     Interest shall be payable on the outstanding daily unpaid principal amount
of each Advance hereunder from the date thereof until payment in full and shall
accrue and be payable at the rates and on the dates set forth in the Loan
Agreement, both before and after default and before and after maturity and
judgment, with interest on overdue principal and interest to bear interest at
the rate set forth in Section 3.9 of the Loan Agreement, to the fullest extent
permitted by applicable Law.

     The amount of each payment hereunder shall be made to the Administrative
Agent at the Administrative Agent's Office for the account of the Lender in
immediately available funds not 


                                      -1-
<PAGE>
 
later than 11:00 a.m. (California time) on the day of payment (which must be a
Business Day). All payments received after 11:00 a.m. (California time) on any
particular Business Day shall be deemed received on the next succeeding Business
Day. All payments shall be made in lawful money of the United States of America.

     The Lender shall use its best efforts to keep a record (which may be in
electronic or other intangible form) of Advances made by it and payments of
principal received by it with respect to this Note, and such record shall be
presumptive evidence of the amounts owing under this Note.

     The undersigned hereby promises to pay all costs and expenses of any
rightful Holder hereof incurred in collecting the undersigned's obligations
hereunder or in enforcing or attempting to enforce any of such Holder's rights
hereunder, including reasonable attorneys' fees and disbursements (including
allocated costs of legal counsel employed by the Administrative Agent or the
Holder), whether or not an action is filed in connection therewith.

     The undersigned hereby waives presentment, demand for payment, dishonor,
notice of dishonor, protest, notice of protest and any other notice or
formality, to the fullest extent permitted by applicable Laws.

     THE UNDERSIGNED HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS NOTE OR ANY OTHER
LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTY HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT,
OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
THE UNDERSIGNED HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT
LENDER OR ANY HOLDER OF THIS NOTE MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE UNDERSIGNED TO THE WAIVER
OF ITS RIGHT TO TRIAL BY JURY.

     THE UNDERSIGNED HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ITS SOVEREIGN
IMMUNITY (AND ANY DEFENSE BASED THEREON) FROM ANY SUIT, ACTION OR PROCEEDING OR
FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OF NOTICE, ATTACHMENT PRIOR TO
JUDGMENT, ATTACHMENT IN AID OF EXECUTION, EXECUTION, EXERCISE OF CONTEMPT
POWERS, OR OTHERWISE) IN ANY FORUM, WITH RESPECT TO THIS NOTE AND THE OTHER LOAN
DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, PROVIDED THAT
                                                                -------- ----
(1) THE WAIVER CONTAINED IN THIS PARAGRAPH IS EXPRESSLY LIMITED TO ACTIONS
AGAINST THE UNDERSIGNED (AND NOT AGAINST THE MOHEGAN TRIBE 


                                      -2-
<PAGE>
 
OF INDIANS OF CONNECTICUT) AND (2) ANY RECOVERY UPON ANY JUDGMENT RESULTING
THEREFROM SHALL BE LIMITED TO RECOVERY AGAINST THE ASSETS AND REVENUES OF THE
UNDERSIGNED.

     THE UNDERSIGNED HEREBY CONSENTS TO THE JURISDICTION OF THE COURTS OF THE
STATE OF CONNECTICUT, THE COURTS OF THE UNITED STATES, AND THE COURTS OF ANY
OTHER STATE WHICH MAY HAVE JURISDICTION OVER THE SUBJECT MATTER, OVER ANY SUCH
ACTION AND OVER THE UNDERSIGNED.

     THE WAIVERS AND CONSENTS DESCRIBED IN THIS NOTE SHALL INURE TO THE BENEFIT
OF EACH HOLDER OF THIS NOTE. THE HOLDER SHALL HAVE AND BE ENTITLED TO ALL
AVAILABLE LEGAL AND EQUITABLE REMEDIES, INCLUDING THE RIGHT TO SPECIFIC
PERFORMANCE, MONEY DAMAGES AND INJUNCTIVE OR DECLARATORY RELIEF. THE WAIVERS OF
SOVEREIGN IMMUNITY AND CONSENTS TO JURISDICTION CONTAINED HEREIN ARE
IRREVOCABLE.

     The undersigned represents, warrants and acknowledges that the transaction
of which this Note is a part is a commercial transaction and not a consumer
transaction. Monies now or in the future to be advanced to or on behalf of the
undersigned are not and will not be used for personal, family or household
purposes.

     THE UNDERSIGNED ACKNOWLEDGES THAT IT HAS THE RIGHT UNDER SECTION 52-278a,
ET SEQ., OF THE CONNECTICUT GENERAL STATUTES, SUBJECT TO CERTAIN LIMITATIONS, TO
------
NOTICE OF AND HEARING ON THE RIGHT OF THE LENDER TO OBTAIN A PREJUDGMENT REMEDY,
SUCH AS ATTACHMENT, GARNISHMENT OR REPLEVIN, UPON COMMENCING ANY LITIGATION
AGAINST THE UNDERSIGNED. NOTWITHSTANDING SUCH RIGHT, THE UNDERSIGNED HEREBY
WAIVES ALL RIGHTS TO NOTICE, JUDICIAL HEARING OR PRIOR COURT ORDER TO WHICH IT
MIGHT OTHERWISE HAVE THE RIGHT UNDER SAID STATUTE OR UNDER ANY OTHER STATE OR
FEDERAL STATUTE OR CONSTITUTION IN CONNECTION WITH THE OBTAINING BY THE LENDER
OF ANY PREJUDGMENT REMEDY IN CONNECTION WITH THIS NOTE. THE UNDERSIGNED FURTHER
CONSENTS TO THE ISSUANCE OF ANY PREJUDGMENT REMEDIES WITHOUT A BOND AND AGREES
NOT TO REQUEST OR FILE MOTIONS SEEKING TO REQUIRE THE POSTING OF A BOND UNDER
PUBLIC ACT 93-431 IN CONNECTION WITH THE LENDER'S EXERCISE OF ANY PREJUDGMENT
REMEDY. THE UNDERSIGNED ALSO WAIVES ANY AND ALL OBJECTION WHICH IT MIGHT
OTHERWISE ASSERT, NOW OR IN THE FUTURE, TO THE EXERCISE OR USE BY THE LENDER OF
ANY RIGHT OF SETOFF, REPOSSESSION OR SELF HELP AS MAY PRESENTLY EXIST UNDER
STATUTE OR COMMON LAW.


                                      -3-
<PAGE>
 
     This Note was executed on or about ____ p.m. on the_____ day of
___________, 1999 at Uncasville, Connecticut, for the particular purposes set
forth above.

     THIS NOTE SHALL BE DELIVERED TO AND ACCEPTED BY THE LENDER, OR BY
ADMINISTRATIVE AGENT ON ITS BEHALF, IN CONNECTICUT AND SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LOCAL LAWS THEREOF.


                                        THE MOHEGAN TRIBAL GAMING AUTHORITY


                                        By: 
                                           ---------------------------------

                                        Title:
                                              ------------------------------

                                      -4-
<PAGE>
 
                            SCHEDULE OF ADVANCES AND
                              PAYMENTS OF PRINCIPAL


Date     Amount       Interest     Amount of         Unpaid             Notation
           of          Period      Principal        Principal           Made by
         Advance                     Paid            Balance

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------


                                      -5-
<PAGE>
 
                                    EXHIBIT G
                                    ---------

                          REQUEST FOR LETTER OF CREDIT
                          ----------------------------


     1. This REQUEST FOR LETTER OF CREDIT is executed and delivered by a Senior
Officer of The Mohegan Tribal Gaming Authority ("Borrower") to Bank of America
National Trust and Savings Association, as the Issuing Lender, pursuant to
Sections 2.4 of the Loan Agreement ( the "Loan Agreement") dated as of March 3,
1999, among Borrower, The Mohegan Tribe of Indians of Connecticut, a federally
recognized Indian Tribe and native American sovereign nation (the "Tribe"), the
Lenders, Documentation Agent and Syndication Agent referred to therein and Bank
of America National Trust and Savings Association, as Administrative Agent.
Terms defined in the Loan Agreement and not otherwise defined herein are used
herein as defined in the Loan Agreement.

     2. Subject to paragraph 4 below, Borrower hereby requests that the Issuing
Lender issue a Letter of Credit as follows:


        (a)  Amount of Letter of Credit: $_______________.


        (b)  Date of Issuance: ________________, ____.

        (c)  Beneficiary under Letter of Credit:

                  Name:  _______________________________
                  
                  Address: ____________________________

                           ____________________________

                           ____________________________


        (d)  Expiry Date:  __________________, ____.

        (e)  Purpose of Letter of Credit: _____________________

             __________________________________________________.

        (f)  Additional Information/Terms: __________________

             __________________________________________________.


                                      -1-
<PAGE>
 
     3.   The requested Letter of Credit is (check one box only):

          [_]  a new Letter of Credit in addition to Letters of Credit already
               outstanding.

          [_]  a supplement, modification, amendment, renewal, or extension to
               or of the following outstanding Letter(s) of Credit: [identify]
                                                                     --------   
     4.   In connection with the issuance of the Letter of Credit requested
herein, Borrower represents, warrants and certifies to the Lenders that:


          (a) Now and as of the date of the issuance of the requested Letter of
     Credit, except (i) for representations and warranties which expressly speak
             ------
     as of a particular date or which are no longer true and correct as a result
     of a change permitted by the Loan Agreement or (ii) as disclosed by
     Borrower and approved in writing by the Requisite Lenders, each
     representation and warranty made by Borrower in Article 5 of the Loan
     Agreement (other than Sections 5.7 (first sentence) and 5.13) will be true
                ----------
     and correct, both immediately before such Letter of Credit is issued and
     after giving effect to such Letter of Credit, as though such
     representations and warranties were made on and as of the date of such
     Letter of Credit;

          (b) other than matters described in Schedule 5.13 of the Loan
              ----------
     Agreement or not required as of the Closing Date to be therein described,
     there is not any action, suit, proceeding or investigation pending or
     threatened against or affecting Borrower or any of the Restricted
     Subsidiaries or any Property of any of them before any Governmental Agency
     that constitutes a Material Adverse Effect;

          (c) now and as of the date of the requested Letter of Credit, no
     Default or Event of Default presently exists or will have occurred and be
     continuing as a result of the issuance of the Letter of Credit; and

          (d) following the issuance of the Letter of Credit requested herein,
     (i) the aggregate effective amount under all outstanding Letters of Credit
     will not exceed $25,000,000, and (ii) the sum of (A) the aggregate
                                               ---
     principal amount of the outstanding Loans, plus (B) the aggregate amount
                                                ----
     available for drawing under the outstanding Letters of Credit, plus (C) the
                                                                    ----
     aggregate amount of all unreimbursed draws with respect to all Letters of
     Credit, shall not exceed the then applicable Commitment.

     5. Attached hereto is an Application for Letter of Credit on the form
provided to Borrower by the Issuing Lender. 


                                      -2-
<PAGE>
 
     6. This Request for Letter of Credit is executed on _____________, _____,
by a Senior Officer of Borrower. The undersigned, in such capacity, hereby
certifies each and every matter contained herein to be true and correct.


                                   THE MOHEGAN TRIBAL GAMING AUTHORITY



                                   By:
                                      ------------------------------


                                   ---------------------------------
                                             [Name & Title]


                                      -3-
<PAGE>
 
                                    EXHIBIT H
                                    ---------


                                REQUEST FOR LOAN
                                ----------------


     1. This Request for Loan is executed and delivered by a Senior Officer of
The Mohegan Tribal Gaming Authority ("Borrower") to Administrative Agent (as
hereinafter defined), pursuant to the Loan Agreement (the "Loan Agreement")
dated as of March 3, 1999, entered into by and among Borrower, The Mohegan Tribe
of Indians of Connecticut, a federally recognized Indian Tribe and native
American sovereign nation, (the "Tribe"), the Lenders, Documentation Agent and
Syndication Agent referred to therein and Bank of America National Trust and
Savings Association, as Administrative Agent ("Administrative Agent"). Terms
defined in the Loan Agreement and not otherwise defined herein are used herein
as defined in the Loan Agreement.

     2. Subject to paragraph 3 below, Borrower hereby requests that Lender make
                             -
a Loan pursuant to the Loan Agreement as follows:

     (a) Amount of Loan: $_________________.

     (b) Date of Loan: __________________, _____.

     (c) Proceeds to be deposited as follows:

         ---------------------------------------------

     (d) Type of Loan:

         [_]  Base Rate Loan

         [_]  LIBOR Loan with a ___ month Interest Period.

     3. In connection with the Loan requested herein, Borrower hereby
represents, warrants, and certifies to the Administrative Agent that as of the
date of the Loan requested herein:

        (a) except as disclosed by Borrower and approved in writing by the
     Administrative Agent and except for representations and warranties which
     expressly relate solely to a specified date, the representations and
     warranties contained in Article 5 of the Loan Agreement (other than
                                                              ----- ----
     Sections 5.7 (first sentence) and 5.13) are true and correct on and as of
     the date of the Loan as though made on that date;


                                      -1-
<PAGE>
 
          (b) other than matters described in Schedule 5.13 of the Loan
              ----- ----
     Agreement, or matters not required as of the Closing Date to be therein
     described, or matters disclosed by Borrower and approved in writing by the
     Administrative Agent, no action, suit, proceeding or investigation is
     pending or threatened against or affecting Borrower or any property of
     Borrower before any Governmental Agency that constitutes a Material Adverse
     Effect; and

          (c) no Default or Event of Default exists.

     4. This Request for Loan is executed on _________, ____, by a Senior
Officer of Borrower. The undersigned, in such capacity, hereby certifies each
and every matter contained herein to be true and correct.


                                   THE MOHEGAN TRIBAL GAMING AUTHORITY


                                   By:
                                      -----------------------------


                                      -----------------------------
                                             [Name & Title]
                                       

                                      -2-