Document:

<PAGE>   1
                     AMENDMENT TO ACCOUNT CONTROL AGREEMENT

         This Agreement is made the 16th day of October 2000, by and among Great
Lakes of Michigan, LLC, a Minnesota limited liability company ("Great Lakes"),
Lakes Gaming, Inc., a Minnesota corporation ("Lakes"), the Pokagon Band of
Potawatomi Indians (the "Band") and Firstar Bank, N.A., f/k/a Firstar Bank of
Minnesota, N.A. ("Firstar").

                              W I T N E S S E T H:

         WHEREAS, the Band and Lakes have entered into a Development Agreement
dated as of July 8, 1999 (the "Development Agreement") and a Management
Agreement dated as of July 8, 1999 (the "Management Agreement"; collectively,
with the Development Agreement, the "Agreements"), pursuant to which the Band
has engaged Lakes to, among other things, assist the Band in the design,
development, construction and management of a gambling casino and certain
related amenities (as defined in the Development Agreement, the "Facility"); and

         WHEREAS, pursuant to the Development Agreement Lakes has agreed to make
certain payments and advances to the Band, including without limitation the
Transition Loan, the Lakes Development Loan and the Non-Gaming Land Acquisition
Line of Credit (collectively the "Lakes Loans"), and the Scholarship Program
Fee, and has agreed to perform development services with regard to the Facility,
all on the terms set out in that Agreement; and

         WHEREAS, pursuant to the Management Agreement Lakes has agreed to
manage the Facility on the terms set out in that Agreement; and

         WHEREAS, the obligations of Lakes to the Band are secured by a Pledge
and Security Agreement between Lakes and the Band (the "Pledge Agreement") and
by an Account Control Agreement among Lakes, the Band and Firstar (the "Control
Agreement"), each dated as of July 8, 1999; and

         WHEREAS, Lakes has informed the Band that it wishes to restructure its
corporate organization by forming a first tier subsidiary, Lakes Gaming and
Resorts, LLC, a Minnesota limited liability company ("LG&R"), to own the equity
in second-tier subsidiaries, including Great Lakes, that will be engaged in
gaming and gaming-related businesses (the "Restructuring"); and

         WHEREAS, in connection with such restructuring Lakes has requested that
the Band consent to the assignment to Great Lakes of (i) Lakes' rights and
obligations

<PAGE>   2

under the Agreements, the Lakes Loans and all related documentation (the
"Obligations") , and (ii) the Account, as defined in the Control Agreement, and
related cash, financial assets and investment property credited thereto, subject
to the continuing first perfected security interest of the Band; and

         WHEREAS, Lakes and LG&R have agreed, as a condition to the Band's
consent, to unconditionally guaranty the Obligations, as assumed by Great Lakes,
including without limitation the obligations of Great Lakes under the Pledge
Agreement and the Control Agreement; and

         WHEREAS, it is the intent of the parties that the restructuring not
affect or impair the Band's rights and remedies under the Obligations or the
Band's first perfected security interest in the Account, other than the
conversion of Lakes from primary obligor to unlimited guarantor;

         WHEREAS, under the Agreements Lakes cannot carry out such restructuring
without the Band's consent; and

         WHEREAS, the Band is willing to so consent, but only on the terms and
conditions set out in this Agreement and in a certain Assignment and Assumption
Agreement of near or even date among the Band, Lakes, Great Lakes and LG&R (the
"Assignment Agreement");

         NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

1.       Recitals True.  The above recitals are true.

2.       Defined Terms. Capitalized terms used but not otherwise defined herein
         and defined in the Pledge Agreement shall have the same meaning herein
         as therein.

3.       Assignment of Account. Lakes represents to Firstar that it has,
         pursuant to the Assignment Agreement, assigned and transferred to Great
         Lakes all rights of Lakes in and to the Account and all cash, financial
         assets and investment property credited to the Account, subject to the
         perfected first security interest of the Band. Firstar agrees to note
         that assignment on its records, but the name of the Account shall
         continue to be "Pokagon Collateral Account."

4.       Acceptance of Assignment. Great Lakes accepts the assignment of the
         Account and related cash, financial assets and investment property, and
         agrees
<PAGE>   3

         to perform and discharge Lakes' obligations under the Control Agreement
         in accordance with the terms thereof as if Great Lakes had originally
         been a party thereto. The liabilities so assumed by Great Lakes include
         any obligations or liabilities of Lakes which have accrued under the
         Control Agreement as of the date hereof, as well as those subsequently
         accruing. Great Lakes recognizes and agrees that the Account and all
         cash, financial assets and investment property credited to the Account
         are and shall remain subject to the first perfected security interest
         of the Band in accordance with the Pledge Agreement and the Account
         Control Agreement.

5.       Assets in Account. Firstar represents that the value and composition of
         the assets in the Account as of October 16, 2000 are as shown on the
         attached Schedule I.

6.       Draws, etc. to be signed by Great Lakes. After the Effective Date all
         draw requests, entitlement orders, directions and notices to be given
         by Lakes under the Control Agreement shall be given by Great Lakes.

7.       Amendment to Control Agreement. The Control Agreement is amended as
         follows:

         a.       All references in the Control Agreement to Lakes, other than
                  in ss. 1(b), shall be deemed to refer to Great Lakes for all
                  purposes after the Effective Date unless otherwise stated in
                  this section.

         b.       Great Lakes is added as a party. Lakes is not deleted as a
                  party.

         c.       The section entitled "Background" is deleted and replaced in
                  its entirety with the following:

                           "Lakes and Great Lakes have granted Band a security
                           interest pursuant to a Pledge and Security Agreement
                           dated July 8, 1999, as amended by Amendment dated
                           October 16, 2000 (the "Security Agreement"), in a
                           securities account maintained by Bank for Great
                           Lakes, and in all related property. Lakes entered
                           into this Agreement, and Great Lakes is joining in
                           this Agreement, to perfect Band's security interest
                           in that account and those assets."

         d.       The definition of Band Notification of Lakes Default is
                  amended so that it reads in its entirety as follows:

                  "'BAND NOTIFICATION OF LAKES DEFAULT' means notification by
                  the

<PAGE>   4

                  Band to Bank that either of the following conditions have been
                  satisfied:

                           (A)      A Manager Event of Default or a Lakes Event
                                    of Default has occurred under the Agreements
                                    and is continuing; (b) either (i) the time
                                    for Lakes to demand arbitration under the
                                    Agreements has expired, or (ii) Lakes timely
                                    demanded arbitration, and the arbitrator's
                                    award has found that a Manager Event of
                                    Default or a Lakes Event of Default has
                                    occurred; and (c) the Band is entitled to
                                    payment of the property in the Account to
                                    the extent specified therein; or

                           (B)      A Guaranty Event of Default, as defined in a
                                    Guaranty from Lakes and LG&R to the Band
                                    dated October 16, 2000, has occurred.

                  The Band Notification of Lakes Default shall be in the form
                  attached hereto as Exhibit A-1."

         e.       Exhibit A to the Control Agreement is deleted and replaced by
                  the attached Exhibit A-1.

         f.       The definition of Joint Notice is amended so that it reads in
                  its entirety as follows:

                           "'JOINT NOTICE' means notification by the Band and
                           Great Lakes to Bank (a) that the Account shall be
                           terminated and directing the Bank to liquidate the
                           property in the Account and deliver the proceeds
                           thereof as directed in the Joint Notice, or (b) that
                           specified funds should be wired from the Account as
                           indicated in the Joint Notice. The Joint Notice
                           shall, as to termination of the Account, be in the
                           form attached hereto as Exhibit C. Any other Joint
                           Notice shall be sufficient if it is signed by both
                           the Band and Great Lakes."

         g.       Section 16(g) of the Control Agreement is amended so that it
                  reads in its entirety as follows:

                           "g.      All income on property in the Account shall
                                    be for the account of Great Lakes. Great
                                    Lakes certifies that its IRS identification
                                    number is 41-1973426, and agrees that

<PAGE>   5

                                    income on the property in the Account shall
                                    be reported in its name."

         h.       S. Eric Marshall is deleted from the list of persons to whom
                  copies of notices to the Band must be given.

         i.       The definition of "Secured Obligations" in ss.1(a) of the
                  Pledge Agreement is amended so that it reads in its entirety
                  as follows:

                           "'Secured Obligations' includes (i) the obligations
                           of Great Lakes and Lakes to the Band under or
                           relating to the Agreements, and (ii) the obligations
                           of Lakes and LG&R under their Guaranty to the Band
                           dated October 16, 2000."

         j.       The following person is added as a person to whom copies of
                  notices to Great Lakes must be given:

                  Brian J. Klein, Esq.
                  Mason Edelman Borman & Brand, LLP
                  3300 Norwest Center
                  90 South Seventh Street
                  Minneapolis, MN 55402-4140

8.       Reservation of Rights. By entering into this Agreement, the Band does
         not waive or affect any rights against Lakes under the Pledge Agreement
         or the Control Agreement.

9.       Warranties and Representations - Great Lakes and Lakes. Each of Great
         Lakes and Lakes warrants, represents and covenants to the Band that:

         a.       The Agreement and the Pledge Agreement each constitute the
                  legal, valid and binding obligation of Great Lakes and Lakes,
                  and are fully enforceable in accordance with their terms;

         b.       Neither the execution or delivery of this Agreement nor
                  fulfillment of or compliance with the terms and provisions
                  hereof will conflict with, or result in a breach of the terms,
                  conditions or provisions of, constitute a default under or
                  result in the creation of any lien, charge or encumbrance upon
                  any property or assets of Lakes or Great Lakes under any
                  agreement or instrument to which they or either of them is now
                  a party or by which they may be bound; and
<PAGE>   6

         c.       The Band has, and at all times until the termination of the
                  Control Agreement in accordance with ss. 8 thereof shall have,
                  a first perfected security interest in the Account and all
                  cash, financial assets and investment property credited to the
                  Account.

10.      Warranties and Representations -- Bank. Bank represents to the Band
         that Bank's representations in ss.1 of the Control Agreement are true
         and correct as of the date of this Agreement.

11.      Further Assurances. From time to time hereafter, Lakes, Great Lakes,
         the Band and Firstar will execute and deliver, or will cause to be
         executed and delivered, such additional instruments, certificates or
         documents, and will take all such actions, as may reasonably be
         requested by the other party or parties, for the purpose of
         implementing or effectuating the provisions of this Agreement.

12.      Governing Law. This Agreement shall be interpreted in accordance with
         the law of the internal law of Minnesota.

13.      Amendments, Assignments, Etc. Any provision of this Agreement may be
         amended if, but only if, such amendment is in writing and is signed by
         each of the parties hereto. No modification shall be implied from
         course of conduct. Great Lakes may not further assign its rights in the
         Account and its obligations under the Control Agreement without the
         written consent of the Band.

14.      Gender and Number; Counterparts. Whenever the context so requires the
         masculine gender shall include the feminine and/or neuter and the
         singular number shall include the plural, and conversely in each case.
         This Agreement may be executed in separate counterparts and said
         counterparts shall be deemed to constitute one binding document.

15.      Notices to Great Lakes. Great Lakes agrees that any notice or demand
         upon it shall be deemed to be sufficiently given or served if it is in
         writing and is personally served or in lieu of personal service is
         mailed by first class certified mail, postage prepaid, or be overnight
         mail or courier service, addressed to Great Lakes at the address of
         Lakes and with copies set forth in ss. 12 of the Control Agreement.

16.      Arbitration; Limited Waiver of Sovereign Immunity. Any disputes under
         this Agreement shall be subject to arbitration as provided in ss.14.2
         of the Development Agreement; provided that any demand for arbitration
         shall be made within 30 days after a notice of default, denominated as
         such, is given under this Agreement. The Band's limited waiver of
         sovereign immunity in ss.ss.

<PAGE>   7

         14.1 and 14.3 of the Development Agreement shall apply to this
         Agreement; provided that the liability of the Band under any judgment
         shall always be Limited Recourse, and in no instance shall any
         enforcement of any kind whatsoever be allowed against any assets of the
         Band other than the limited assets of the Band specified in Section
         14.3(i) of the Development Agreement.

17.      Ratification. Except as expressly modified in this Agreement, the
         Control Agreement is ratified and confirmed.

18.      Interpretation. This Agreement, the related amendments to the
         Agreements and to the Pledge Agreement (the "Amendments") and the
         Obligations shall be interpreted in favor of the Band so as to ensure
         for the Band the full benefit of its rights, powers and remedies under
         the Obligations notwithstanding the Restructuring, this Agreement and
         the Amendments; and to fully implement the intent of the parties that
         the Restructuring, this Agreement and the Amendments not affect or
         impair the Band's rights, powers and remedies under the Obligations,
         other than the conversion of Lakes from primary obligor to unlimited
         guarantor, or the Band's continuing first security interest in the
         Account.

19.      Effective Date; Prior Transactions not Affected: This Agreement shall
         be effective as of October 16, 2000 (the "Effective Date"). This
         Agreement shall not affect or impair any action taken under the Control
         Agreement prior to the Effective Date.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the 16th day of October, 2000.

WITNESS:
                                      GREAT LAKES OF MICHIGAN, LLC

                                      BY:
                                      NAME: Timothy J. Cope
                                      ITS: Chief Financial Officer

                                      LAKES GAMING, INC.

                                      BY:
                                      NAME:  Timothy J. Cope
                                      ITS: Chief Financial Officer
<PAGE>   8

                                     THE POKAGON BAND OF POTAWATOMI
                                     INDIANS

                                     BY:
                                        -------------------------------------
                                              John Miller
                                     ITS: Council Chairman

                                     BY:
                                        -------------------------------------
                                              Marie Manley
                                     ITS: Secretary

                                     FIRSTAR BANK, N.A.

                                     BY:
                                        -------------------------------------
                                     NAME:
                                          -----------------------------------
                                     ITS:
                                          -----------------------------------

Seen and consented to:

                                     LAKES GAMING AND RESORTS, LLC

                                     BY:
                                     NAME:  Timothy J. Cope
                                     ITS: Chief Financial Officer<PAGE>   1
                               UNLIMITED GUARANTY

         GUARANTY, dated as of the 16th day of October, 2000, from the
undersigned LAKES GAMING, INC., a Minnesota corporation ("Lakes"), and LAKES
GAMING AND RESORTS, LLC, a Minnesota limited liability company ("LG & R";
collectively with Lakes, and each of Lakes and LG&R individually, the
"Guarantor") to the POKAGON BAND OF POTAWATOMI INDIANS, a federally recognized
Indian tribe (the "Band").

                              W I T N E S S E T H :

         WHEREAS, the Band and Lakes have entered into a Development Agreement
dated as of July 8, 1999 (the "Development Agreement") and a Management
Agreement dated as of July 8, 1999 (the "Management Agreement"; collectively,
with the Development Agreement, the "Agreements"), pursuant to which the Band
has engaged the Lakes to, among other things, assist the Band in the design,
development, construction and management of a gambling casino and certain
related amenities (as defined in the Development Agreement, the "Facility"); and

         WHEREAS, pursuant to the Development Agreement Lakes has agreed to make
certain payments and advances to the Band, including without limitation the
Transition Loan, the Lakes Development Loan and the Non-Gaming Land Acquisition
Line of Credit (collectively the "Lakes Loans"), and the Scholarship Program
Fee, and has agreed to perform development services with regard to the Facility,
all on the terms set out in that Agreement; and

         WHEREAS, pursuant to the Management Agreement Lakes has agreed to
manage the Facility on the terms set out in that Agreement; and

         WHEREAS, Lakes has informed the Band that it wishes to restructure its
corporate organization by forming a first tier subsidiary, LG&R, to own the
equity in second-tier subsidiaries, including Great Lakes of Michigan, LLC, a
Minnesota limited liability company ("Great Lakes"), that will be engaged in
gaming and gaming-related businesses; and

         WHEREAS, in connection with such restructuring Lakes has requested that
the Band consent to (i) the assignment of Lakes' rights and obligations under
the Agreements, the Lakes Loans and all related documentation, including without

<PAGE>   2

limitation the documents listed on the attached Schedule A (the "Related
Documents"; collectively, with the Agreements and the Lake Loans, the
"Obligations"), to Great Lakes, and (ii) the release of Lakes as primary obligor
under the Obligations, in exchange for the execution by Lakes and LG&R of
unconditional guarantees of the obligations of Great Lakes under the
Obligations; and

         WHEREAS, under the Agreements Lakes cannot carry out such restructuring
without the Band's consent; and

         WHEREAS, the Band is willing to so consent, but only if Lakes and LG&R
execute and deliver this Guaranty and otherwise comply with the terms and
conditions of an Assignment and Assumption Agreement among Lakes, Great Lakes,
LG&R and the Band of near or even date (the "Assignment Agreement"); and

         WHEREAS, Lakes and LG&R each directly or indirectly own all the equity
interests in Great Lakes, and will each materially and substantially benefit
from the proposed restructuring and from the agreement of the Band set forth in
the Assignment Agreement;

         NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the Guarantor, the Guarantor
hereby agrees as follows:

1.       Recitals True. The above recitals are true.

2.       Guarantied Obligations. The undersigned Guarantor(s), jointly and
         severally, hereby irrevocably and unconditionally guarantee the full
         and punctual payment and performance by Great Lakes of all covenants,
         obligations and representations of Great Lakes under or relating to the
         Obligations, including without limitation the due and punctual payment
         by Great Lakes of all advances due under the Lakes Loans and the
         Scholarship Program Fee, as such Obligations may be amended, modified
         or renewed, as well as all substitutions therefor and renewals,
         extensions and rearrangements thereof, together with any and all costs
         incurred by Band (including, without limitation, reasonable attorneys'
         fees and disbursements) in enforcing this Guaranty or any security
         therefore (individually, a "Guarantied Obligation" and collectively,
         the "Guarantied Obligations").

3.       Demand by the Band; Performance by Guarantor. In the event of a
         Guaranty

<PAGE>   3

         Event of Default, the Band may make demand upon the Guarantor(s), or
         any one of them, for the payment or performance of the Guarantied
         Obligation, and each Guarantor binds and obliges it to make such
         payment or performance and to pay any related damages forthwith upon
         such demand. Each Guarantor further covenants and agrees that Band may
         upon a Guaranty Event of Default proceed first and directly against the
         Guarantor, without any action, proceeding or suit, whether against
         Great Lakes or against any security for the Guarantied Obligations
         (hereby intending, among other matters, to waive any defense to this
         Guaranty based on impairment of collateral), or any other party liable
         for the Guarantied Obligations. This Guaranty is not conditioned upon
         the genuineness, validity, or enforceability of the Agreements, the
         Related Documents or the Lakes Notes (collectively, the "Transaction
         Documents") or any other instruments relating to the creation or
         performance of the Guarantied Obligations, or the pursuit by the Band
         of any remedies which the Band has now or may hereafter have with
         respect thereto under the Transaction Documents.

         "Guaranty Event of Default" means (a) either (i) a Lakes Event of
         Default under the Development Agreement, (ii) a Manager Event of
         Default under the Management Agreement, or (iii) any other default or
         breach by Great Lakes under the Guaranteed Obligations; in each case
         after all cure periods have expired and either the time within which
         arbitration may be demanded has expired or, if arbitration has been
         timely demanded, the arbitrator has issued his award and the award
         determines that Great Lakes is in default or breach under a Guaranteed
         Obligation; or (b) the receivership, insolvency, bankruptcy, assignment
         for the benefit of creditors, reorganization, arrangement, composition
         or readjustment of, or any similar proceeding affecting Great Lakes or
         any Guarantor or any of its or their assets.

4.       Waiver of Demands, Notices, Diligence, etc. Each Guarantor hereby
         assents to all the terms and conditions of the Guarantied Obligations
         and the related Transaction Documents and waives (a) demand for the
         payment or performance of any Guarantied Obligation (other than a
         demand under section 3 hereof); (b) notice of the occurrence of a
         default or an Event of Default under the Transaction Documents; (c)
         notice of acceptance of any guaranty herein provided for or of the
         terms and provisions thereof or hereof by the Band; (d) notice of any
         indulgences or extensions granted to Great Lakes or any successor to
         Great Lakes or any person or party which shall have assumed the
         obligations of Great Lakes or any other obligor in respect of any
         Guarantied Obligation; (e) any requirement of diligence or promptness
         on the part of the

<PAGE>   4

         Band in the enforcement of any of its rights under the provisions of
         any Guarantied Obligation or the Transaction Documents; (f) any
         enforcement of any Guarantied Obligation against any other party liable
         therefor; (g) any right which the Guarantor might have to require the
         Band to proceed against any other guarantor of the Guarantied
         Obligations or to realize on any collateral security therefor; (h) any
         and all notices of every kind and description which may be required to
         be given by any statute or rule of law in any jurisdiction (other than
         notices required hereunder), to the maximum extent permitted by
         applicable law; (i) any and all claims, defenses or objections based
         upon the failure of the Band to make demand upon the Guarantor for the
         payment or performance of any of the Guarantied Obligations (other than
         the demand provided for in section 3 hereof) under applicable law; and
         (j) any right to exoneration or marshaling, and, to the maximum extent
         permitted by applicable law, any defense based upon or arising from the
         Statute of Limitations, and other laws relating to stays of action or
         moratorium. Each Guarantor further hereby waives (solely as against
         Band) any right to contribution from co-guarantors as well as any right
         to exoneration, subrogation or reimbursement until all Guarantied
         Obligations are fully and indefeasibly paid or performed and until the
         expiration of any applicable preference periods. The Band and Great
         Lakes (or any other party to a Guaranteed Obligation) may modify,
         renew, waive or extend any Guaranteed Obligation or any provision
         thereof and may modify, waive or release any collateral therefor
         without the consent of any Guarantor and without altering or releasing
         the obligations of Guarantor hereunder.

5.       Obligations of Guarantor Unconditional, etc.

         a.       This Guaranty is a guaranty of payment not collection. This is
                  a continuing Guaranty, which shall apply to the Guarantied
                  Obligations which now exist or as the same may change over
                  time, and to any successive transactions continuing,
                  compromising, extending, increasing, modifying, releasing or
                  renewing any Guaranteed Obligation, whether or not notice of
                  any after-arising Guarantied Obligation or change to the
                  Guarantied Obligation is given to Guarantor, and whether or
                  not any and all prior Guarantied Obligations have been fully
                  paid, performed or observed before a new Guarantied Obligation
                  arose, and shall apply notwithstanding the dissolution of
                  Great Lakes or dissolution of any other guarantor of any
                  Guarantied Obligation. The obligations of the Guarantor upon a
                  Guaranty Event of Default are and shall be unconditional,
                  irrespective of the validity, regularity or

<PAGE>   5

                  enforceability of any Guarantied Obligation or any of the
                  Transaction Documents or of any claim or defense of any party
                  relating thereto. This Guaranty shall not be affected by any
                  action taken under or in respect of any Guarantied Obligation,
                  in the exercise of any right or remedy therein or thereby
                  conferred, or by any failure or omission on the part of the
                  Band to enforce any right given thereunder or hereunder, or
                  any remedy conferred thereby or hereby; or by any lack of
                  diligence on the part of Band to enforce, assert or exercise
                  any right, power or remedy granted hereunder, under the
                  Agreements or any other Guarantied Obligation, or any
                  documents relating thereto (including without limitation any
                  failure to perfect a security interest in or lien on any
                  security for any Guarantied Obligation); or by any release or
                  surrender of any security or any other guaranty at any time
                  existing for the benefit of Band or in respect of any
                  Guarantied Obligation or any modification to any of the
                  foregoing; or by any sale, lease or transfer by Great Lakes to
                  any person of any and all of its properties; or by any action
                  of the Band granting indulgence or extension or accommodations
                  to, or waiving or acquiescing in any default by, Great Lakes
                  or any successor to Great Lakes, or any person or party which
                  shall have assumed its or their obligations or any other party
                  liable for any Guarantied Obligation; or any compromise,
                  settlement or other arrangement with Great Lakes or any other
                  party liable for any Guarantied Obligation; or by the release
                  or discharge by operation of law of Great Lakes from the
                  performance or observance of any obligation, covenant or
                  agreement contained in the Agreements or the Transaction
                  Documents or any document relating to any Guaranteed
                  Obligation or by reason of the dissolution of Guarantor or
                  Great Lakes or any other defense of Great Lakes or any
                  successor to Great Lakes; or by any modification or alteration
                  of any Guarantied Obligation or by any circumstance whatsoever
                  (with or without notice to or knowledge of the Guarantor)
                  which could vary the risk of the Guarantor hereunder; it being
                  the purpose, intent and agreement of the Guarantor that the
                  obligations of the Guarantor hereunder are and shall upon a
                  Guaranty Event of Default be absolute and unconditional under
                  any and all circumstances and shall not be discharged except
                  by payment or performance as herein provided, and then only to
                  the extent of such payment or performance, subject, however,
                  to renewal, extension or reinstatement pursuant to the
                  provisions of Section 8 hereof.

         b.       Any claim against Great Lakes to which the Guarantor may be or

<PAGE>   6

                  become entitled (including, without limitation, claims by
                  subrogation, reimbursement, contribution, indemnity, or
                  otherwise) by reason of any payment or performance by the
                  Guarantor in satisfaction and discharge, in whole or in part,
                  of its obligations under this Guaranty and any other rights
                  against Great Lakes shall be and hereby are made subject and
                  subordinate to the prior payment or performance in full of the
                  Guaranteed Obligations and until such time Guarantor shall not
                  be entitled to and shall not claim any subrogation to any
                  claim of Band, nor any right of set-off or counterclaim
                  against Great Lakes.

         c.       The Band shall have the right to seek recourse against
                  Guarantor to the fullest extent provided for herein and no
                  election by the Band to proceed against any party, or on any
                  obligation, shall constitute a waiver of the Band's right to
                  proceed against any Guarantor on obligations other than those
                  set out herein, or against other parties, unless the Band has
                  expressly waived such right in writing. Specifically, but
                  without limiting the generality of the foregoing, no action or
                  proceeding by the Band under any document or instrument
                  evidencing the Guarantied Obligations shall serve to diminish
                  the liability of Guarantor under this Guaranty except to the
                  extent that the Band finally and unconditionally shall have
                  realized indefeasible payment by such action or proceeding.
                  All rights and remedies of the Band shall be cumulative.

         d.       Guarantor represents and warrants that any and all information
                  delivered to Band by Guarantor and Great Lakes is true,
                  accurate and complete as of the date hereof and covenants and
                  agrees to provide Band with such further information as is
                  required under section 13.5(ii) of the Development Agreement
                  and, after a default hereunder, such further information as to
                  Guarantor's financial condition and affairs as the Band may
                  require.

6.       Direct Obligation. This Guaranty is a primary and original obligation
         of Guarantor, is not merely the creation of a surety relationship, and
         is an absolute, unconditional, and continuing guaranty of payment and
         performance which shall remain in full force and effect without respect
         to future changes in conditions. Each Guarantor agrees that it is
         directly, jointly and severally with any other guarantor of the
         Guarantied Obligations, liable to the Band, that the obligations of
         Guarantor hereunder are independent of the obligations of Great Lakes

<PAGE>   7

         or any other Guarantor, and that a separate action or proceeding may be
         brought against Guarantor, whether such action is brought against Great
         Lakes or any other guarantor or whether Great Lakes or any other
         guarantor is joined in such action or proceeding. Guarantor agrees that
         upon the occurrence of a Guaranty Event of Default its liability
         hereunder shall be immediate and shall not be contingent upon the
         exercise or enforcement by the Band of whatever remedies it may have
         against Great Lakes or any other guarantor, or the enforcement of any
         lien or realization upon any security the Band may at any time possess.
         Guarantor agrees that any release which may be given by the Band to
         Great Lakes or any other obligor or any other guarantor shall not
         release Guarantor. Guarantor consents and agrees that the Band shall be
         under no obligation to marshal any property or assets of Great Lakes or
         any other guarantor in favor of Guarantor, or against or in payment of
         any or all of the Guarantied Obligations. The Band shall upon a
         Guaranty Event of Default have the right to proceed first and directly
         against each Guarantor under this Guaranty. Guarantor acknowledges that
         there are no conditions precedent to the effectiveness of this Guaranty
         and that this Guaranty is in full force and effect and is binding on
         Guarantor upon execution and delivery to the Band.

7.       Subordination. Guarantor hereby agrees that any and all present and
         future indebtedness of Great Lakes owing to Guarantor is subordinated
         to payment, in full, in cash, of the Guarantied Obligations. In this
         regard, no payment of any kind whatsoever shall be made with respect to
         such indebtedness after the occurrence and during the continuance of a
         Guaranty Event of Default until the Guarantied Obligations have been
         indefeasibly paid and performed in full.

8.       Reinstatement.

         a.       It is the intention of the parties hereto that this Guaranty
                  shall remain in full force and effect until all of the
                  Guarantied Obligations have been fully and indefeasibly paid,
                  performed and satisfied; until Great Lakes is no longer
                  obligated to the Band under or in respect of the Guarantied
                  Obligations or any documents relating thereto; and until the
                  expiration of any applicable preference periods. This Guaranty
                  shall continue to be effective or be reinstated, as the case
                  may be, if at any time any amount received by the Band in
                  payment of the Guarantied Obligations is rescinded or must
                  otherwise be restored or returned upon the insolvency,
                  bankruptcy, dissolution, liquidation or reorganization of any
                  Guarantor or Great Lakes or upon the appointment of any
                  intervenor or conservator of, or trustee or similar official
                  for any Guarantor or Great Lakes or any substantial part of
                  either of their respective properties, or if any payment made
                  in respect of any Guarantied Obligation is subsequently
<PAGE>   8

                  invalidated, declared to be fraudulent or preferential, or
                  otherwise returned for any reason, all as though such payments
                  had not been made.

         b.       The Guaranteed Obligations shall not be considered
                  indefeasibly paid for purposes of this Guaranty unless and
                  until all payments to the Band are no longer subject to any
                  right on the part of any person, including Great Lakes, Great
                  Lakes as debtor in possession, or any trustee (whether
                  appointed under the Bankruptcy Code or otherwise) of Great
                  Lakes' assets to invalidate or set aside such payments or to
                  seek to recoup the amount of such payments or any portion
                  thereof, or the declare the same to be fraudulent or
                  preferential. Until such full and final performance and
                  indefeasible payment of the Guaranteed Obligations whether by
                  Guarantor or Great Lakes, the Band shall have no obligation
                  whatsoever to transfer or assign its interest in the
                  Transaction Documents to Guarantor. In the event that, for any
                  reason, any portion of such payments to Band is set aside or
                  restored, whether voluntarily or involuntarily, after the
                  making thereof, then the obligation intended to be satisfied
                  thereby shall be revived and continued in full force and
                  effect as if said payment or payments had not been made, and
                  Guarantor shall be liable for the full amount the Band is
                  required to repay plus any and all costs and expenses
                  (including attorneys' fees) paid by the Band in connection
                  therewith.

9.       Warranties and Representations. Each Guarantor hereby warrants and
         represents to the Band that:

         a.       this Guaranty constitutes a legal, valid and binding
                  obligation of each Guarantor, and is fully enforceable in
                  accordance with its terms; and

         b.       neither the execution or delivery of this Guaranty nor
                  fulfillment of or compliance with the terms and provisions
                  hereof, will conflict with, or result in a breach of the
                  terms, conditions or provisions of, constitute a default under
                  or result in the creation of any lien, charge or encumbrance
                  upon any property or assets of any Guarantor under any
                  agreement or instrument to which it is now a party or by which
                  it may be bound.

10.      Notices, etc. All notices, requests and other communications to any
         Guarantor hereunder shall be in writing and shall be sent to the
         address of Lakes and with the copies set forth in Section 15.4 of the
         Development Agreement. Any notice or demand so mailed shall be deemed
         received on the date of actual

<PAGE>   9

         receipt, on the third business day following mailing as herein set
         forth or one day following delivery to a courier service, whichever
         first occurs.

11.      Multiple Debtors or Guarantors. If more than one Guarantor signs this
         Guaranty, or if there are multiple guarantors, as to any such
         circumstances, this Guaranty shall take effect as a separate guarantee
         on the same terms from each Guarantor to Band with respect to the
         Guarantied Obligations of each debtor, except as otherwise expressly
         provided in this section; and each such Guarantor identified on the
         signature page hereto is jointly and severally liable for the
         Guarantied Obligations. Each Guarantor's obligation under this Guaranty
         may be modified or released only by written agreement signed by the
         Band and such Guarantor, without the consent or agreement of any other
         Guarantor. No Guarantor's obligations under this Guarantee shall be
         impaired, reduced or otherwise affected by any such modification or
         release nor by the invalidity or unenforceability of the obligations of
         any other Guarantor. This Guaranty shall bind all signatories to this
         Guaranty, notwithstanding a failure by any party or entity named in
         this Guaranty as Guarantor to sign this or any Guaranty. All Guarantors
         of the Guarantied Obligations shall be and are jointly and severally
         liable under this Guaranty or their guaranties, as applicable, and
         default by any one guarantor shall constitute a default for all
         guarantors. A default by any one debtor of the Band or any Guarantor
         shall constitute default by all Guarantors with respect to all the
         Guarantied Obligations of all debtors of the Band. Suit may be brought
         against the Guarantors, jointly and severally, and against any one or
         more of them, or less than all of them, without impairing the rights of
         Band, its successors or assigns, against the other of the Guarantors;
         and Band may agree with any one or more of the Guarantors that such
         Guarantor or Guarantors shall be liable for such sum or sums as Band
         may see fit and may release any of such Guarantors from all further
         liability to Band for the Guaranteed Obligations guaranteed hereunder
         without impairing the right of Band to demand and collect the balance
         of the Guaranteed Obligations from the other Guarantors not so
         released.

12.      Survival of Guaranty, etc. This Guaranty shall inure to the benefit of
         and be binding upon each Guarantor and the Band and their respective
         successors and assigns, including any subsequent assignees of any of
         the Guarantied Obligations permitted under the ss.10.5(b) of the
         Development Agreement. This Guaranty is intended to take effect as a
         sealed instrument. This Guaranty is for the benefit of Band and in the
         event the Agreement or any Guarantied Obligation are transferred or
         assigned in accordance with the Development

<PAGE>   10

         Agreement, said transferee or assignee shall be entitled to the
         benefits hereof and to enforce the performance and observance of the
         terms and provisions hereof to the same extent as if said transferee or
         assignee was a party or signatory hereto and any such transferee shall
         be recognized as the Band hereunder.

13.      Gender and Number; Counterparts. Whenever the context so requires the
         masculine gender shall include the feminine and/or neuter and the
         singular number shall include the plural, and conversely in each case.
         This Guaranty may be executed in separate counterparts which together
         shall be deemed to constitute one binding document.

14.      Severability. If any obligation or portion of this Guaranty is
         determined to be invalid or unenforceable under law, it shall not
         affect the validity or enforceability of any remaining obligations or
         portions hereof.

15.      Amendments. This Guaranty may not be amended as to any Guarantor except
         by an agreement in writing signed by such Guarantor and the Band.

16.      Additional Payment. All payments, advances, charges, costs and
         expenses, including reasonable attorneys' fees, made or incurred by
         Band in connection with the enforcement of this Guaranty shall be paid
         by Guarantor immediately without demand, together with interest at a
         rate per annum equal to the interest rate in effect for advances under
         the Lakes Loans, if (a) the Band makes demand on Guarantor under ss.3
         above and Guarantor fails to timely demand arbitration under this
         Guaranty, or (b) Guarantor makes a timely demand for arbitration or the
         Band or Great Lakes demand arbitration, and the arbitration award in
         either case finds in the Band's favor on any issue being arbitrated.

17.      Governing Law; Jurisdiction. This Guaranty shall be construed in
         accordance with and governed by the internal laws of the State of
         Minnesota.

18.      Arbitration. Any disputes under this Guaranty shall be subject to
         arbitration as provided in ss.14.2 of the Development Agreement;
         provided that (a) any demand for arbitration shall be made by Guarantor
         within 30 days after the Band makes demand on Guarantor under ss.3
         above, and (b) such arbitration shall determine only the liability of
         Guarantor under this Guaranty, and shall not extend to determination of
         liability of the Band to any Guarantor (whether in the form of setoff,
         recoupment or affirmative counterclaim). Guarantor shall be bound by
         any issue determined by an award in an arbitration between Great

<PAGE>   11

         Lakes and the Band, regardless of whether Lakes is a party to such
         arbitration. The Band may at its option join Guarantor as a party in an
         arbitration between Great Lakes and the Band prior to a Guaranty Event
         of Default, and such arbitration may determine the existence of a
         Guaranty Event of Default and Guarantor's liability hereunder.

19.      Limited Waiver of Sovereign Immunity. The Band expressly waives its
         sovereign immunity from suit for the purpose of permitting or
         compelling arbitration as provided in ss.18; provided that such limited
         waiver extends only to arbitration of the liability of Guarantor under
         this Guaranty, and does not extend to determination of liability of the
         Band to any Guarantor (whether in the form of setoff, recoupment or
         affirmative counterclaim). The Band and Guarantor each consent to be
         sued in the United States District Court for the District in which the
         Gaming Site is located (or, if the Gaming Site has not been designated,
         for the Western District of Michigan - Southern Division), the United
         States Court of Appeals for the Sixth Circuit, and the United States
         Supreme Court for the purpose of compelling arbitration or enforcing
         any arbitration award or judgment arising out of this Guaranty, subject
         to the above limitation. If the United States District Court lacks
         jurisdiction, the Band and Guarantor consent to be sued in the Michigan
         State Court system for the same limited purpose. The Band waives any
         requirement of exhaustion of tribal remedies. Without in any way
         limiting the generality of the foregoing, the Band expressly authorizes
         any governmental authorities who have the right and duty under
         applicable law to take any action authorized or ordered by any such
         court, and to take such action to give effect to any judgment entered
         for such limited purpose; provided, however, that in no instance shall
         any enforcement of any kind whatsoever be allowed against any assets of
         the Band. The Band appoints the Chairman of the Pokagon Council and the
         Secretary of the Pokagon Council as its agents for service of all
         process under or relating to this Guaranty. The Band agrees that
         service in hand or by certified mail, return receipt requested, shall
         be effective for all purposes under or relating to this Guaranty if
         served on such agents. The Guarantor irrevocably consents to the
         service of process in any such action or proceeding by the mailing of
         copies thereof by registered or certified mail, postage prepaid, to the
         Guarantor in accordance with the provisions of ss.10. The foregoing,
         however, shall not limit the Band's rights to serve process in any
         other manner permitted by law or to bring any legal action or
         proceeding or to obtain execution of judgment in any other
         jurisdiction. The Guarantor irrevocably waives any objection which it
         may now have or may have to the laying of the venue of any suit, action
         or proceeding arising out of or relating to this Guaranty and hereby
         further

<PAGE>   12

         irrevocably waives any claim that the State of Michigan is not a
         convenient forum for any such suit, action or proceeding.

20.      Definitions. Capitalized terms used herein without definition shall
         have the meanings assigned to them in the Agreements.

         IN WITNESS WHEREOF, the undersigned have executed this Guaranty as a
sealed instrument by duly authorized officers of the undersigned as of the date
first above written.

                                      LAKES GAMING, INC.

                                      BY:
                                      NAME:  Timothy J. Cope
                                      ITS: Chief Financial Officer

                                      LAKES GAMING AND RESORTS, LLC

                                      BY:
                                      NAME:  Timothy J. Cope
                                      ITS: Chief Financial Officer

SEEN AND AGREED AS OF
THE DATE ABOVE WRITTEN

THE POKAGON BAND OF POTAWATOMI INDIANS

BY:
---------------------------------------
         John Miller
ITS: Council Chairman

BY:
   -----------------------------------------
         Marie Manley
ITS: Secretary

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