Document:

<PAGE>   1
                       ASSIGNMENT AND ASSUMPTION 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"), and the Pokagon
Band of Potawatomi Indians (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, 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, and to assign its rights and obligations
under the Agreements to Great Lakes as set out in this Agreement (the
"Restructuring"); 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
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

<PAGE>   2

obligations of Great Lakes under the Obligations; 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, 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;

         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 Development Agreement or the Management Agreement
         shall have the same meaning herein as therein.

3.       Assignment of Lakes' Rights Under the Obligations. Lakes grants,
         bargains, sells, conveys, assigns and transfers to Great Lakes, without
         recourse, all of Lakes's right, title and interest, legal and
         equitable, in, to and under the Obligations.

4.       Transfer of Lakes Notes. Lakes agrees to endorse the Lakes Notes in
         favor of Great Lakes. Great Lakes agrees that it is the assignee of the
         Lakes Notes, but not a holder in due course.

5.       Assignment of Account. Lakes hereby assigns and transfers to Great
         Lakes all rights of Lakes in and to the Account and all cash, financial
         assets and investment property in the Account, subject to the Band's
         first perfected security interest, and agrees that the Account shall
         secure all obligations of Great Lakes and Lakes to the Band in
         accordance with the terms of the Pledge and Security Agreement and the
         Control Agreement.

6.       Assumption of Obligations. Great Lakes accepts assignment of Lakes'
         rights and obligations under the Obligations. Great Lakes assumes and
         agrees to perform and discharge all of the obligations and liabilities
         of Lakes arising under or relating to the Obligations in accordance
         with the terms thereof, as if

                                      -2-
<PAGE>   3

         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 Obligations as of the date hereof, as well
         as those subsequently accruing. All references to Lakes in the
         Obligations shall, except as set out in ss. 10 or in a certain
         Amendment of Account Control Agreement or Amendment to Pledge and
         Security Agreement of near or even date, be deemed to refer to Great
         Lakes.

7.       Band Consent. The Band consents to this Assignment, recognizes Great
         Lakes as a substituted party under the Obligations, and agrees that
         Great Lakes shall be a party to such Obligations to the same extent as
         if Great Lakes had originally been a party thereto; without prejudice,
         however, to Lakes' continued obligations to the Band under the
         Obligations as provided in ss. 10, under its Guaranty, the Account
         Control Agreement, as amended, the Amendment to Pledge and Security
         Agreement, as amended, and under this Agreement.

8.       Release of Lakes. The Band releases and forever discharges Lakes of any
         and all liabilities or obligations under the Obligations except as
         specifically set out in ss. 10 below, and except as provided in ss. 10
         agrees to look solely to Great Lakes for performance of all obligations
         of Lakes under the Obligations; conditioned on, however, the execution
         by Lakes and LG&R of the unlimited guarantee attached hereto as Exhibit
         B (the "Guarantee"), and without prejudice to the Band's rights under
         such Guarantee, under the provisions of the Obligations specified
         in ss. 10, or under this Agreement.

9.       Release of the Band. Lakes agrees that, given the assignment of its
         rights under the Obligations to Great Lakes, Lakes has and shall have
         no claims against the Band under or relating to such Obligations;
         reserving, however, any rights or remedies, if any, which (a) Lakes may
         now have or may in the future acquire under the Indemnity Agreement
         referred to in ss. 10(b) below, (b) Lakes may in the future acquire
         under the specific provisions of the Obligations described in ss.
         10(c), or (c) Lakes or LG&R may have under this Agreement or the
         Guarantee.

10.      Lakes Continuing Obligations. Notwithstanding any other provision of
         this Agreement:

         a.       Lakes shall continue to be bound by, and shall remain subject
                  to and (where applicable) liable for breach of, the following
                  provisions of the

                                      -3-
<PAGE>   4

                  Obligations, and any reference to Lakes in such provisions
                  (whether in its own name or as Manager) shall be deemed to be
                  references to each of Lakes and Great Lakes. The reference to
                  captions is for convenience only, and does not substitute for
                  or affect the terms of the indicated sections.

<TABLE>
<CAPTION>
         AGREEMENT                  SECTION          CAPTION

<S>                                 <C>              <C>
Development Agreement               1.1              Definition of Insider

                                    1.1              Definition of Lakes Internal Expenses

                                    1.1              Definition of Limited Recourse

                                    1.1              Definition of Material Adverse Change

                                    1.1              Definition of NIGC Approval

                                    2.1.1            Option

                                    2.3              Confidentiality

                                    2.4              Assignment of Other Options

                                    10.4             Non-Competition

                                    10.5(c)          Change of Control; provided that in the second paragraph of that
                                                     subsection the term "Lakes" shall not include Great Lakes as to
                                                     clauses II, III and IV.

                                    10.6             Restrictions on Collateral Development

                                    11.3             Representations and Warranties of Lakes

                                    11.4             Lakes Covenants

                                    12.2             Events of Defaults by Lakes

                                    13.5             Band Right to Terminate for Material Adverse
</TABLE>

                                      -4-
<PAGE>   5
<TABLE>
<S>                                 <C>              <C>
                                                     Change

                                    14.2             Arbitration

                                    14.3             Limitation of Actions
                                    14.5(i)(C),

                                      (D) and (E)    Liquidated Damages Payable by Lakes

                                    14.6             Lakes Continuing Obligations

                                    14.9             Fees not Damages

                                    15.13            Confidentiality

Management Agreement                2                Definition of Affiliate

                                    2                Definition of Gross Revenues

                                    2                Definition of Insider

                                    2                Definition of Limited Recourse

                                    2                Definition of Manager's Internal Expenses

                                    2                Definition of NIGC Approval

                                    3.5              Manager Compliance with Law; Licenses

                                    4.2.2            Compliance with Band Ordinances

                                    4.6              No Manager Internal Expenses; Limitation on
                                                     Manager Payments

                                    4.8              Employee Background Checks

                                    9.3              Non-Competition

                                    9.4.3            Change of Control; provided that in the second paragraph of that subsection
                                                     the term "Lakes" shall only include Great Lakes as to
</TABLE>

                                       -5-
<PAGE>   6
<TABLE>
<S>                                 <C>              <C>
                                                     clause I of the definition of Change of Control, and shall not include Great
                                                     Lakes as to clauses II, III and IV.

                                    9.5              Restrictions on Collateral Development

                                    10.3             Representations and Warranties of Manager

                                    10.4             Manager Covenants

                                    10.5             No Liens

                                    10.7             Authority to Execute and Perform Agreement

                                    10.8             Brokerage

                                    11.2             Events of Default by Manager

                                    12.5             Band Right to Terminate for Material Adverse Change

                                    12.6             Termination if Manager License Withdrawn or on Conviction

                                    13.2             Arbitration

                                    13.3             Limitation of Actions

                                    13.6             Manager Continuing Obligations

                                    13.10            No Setoff

                                    13.11            Indemnification on Termination

                                    13.12            Fees not Damages

                                    15.2             Warranties

                                    15.3             Disclosure Amendments

                                    15.4             Breach of Manager's Warranties and Agreements
</TABLE>

                                      -6-
<PAGE>   7
<TABLE>
<S>                                 <C>              <C>
                                    18.4             Further Actions

                                    18.15            Confidential and Proprietary Information

                                    18.19            Government Savings Clause
</TABLE>

         b.       Lakes shall continue to be a Hazardous Waste Indemnitee under
                  ss. 4 of the Indemnity Agreement between the Band and Lakes
                  dated March 10, 2000 and shall have the benefit of, and be
                  bound by, ss.ss. 4, 6, 7, 8, 9 and 10 of that Indemnity
                  Agreement.

         c.       Lakes shall continue to have the benefit of its right and
                  remedies, if any, under the following provisions of the
                  Agreements:

<TABLE>
<CAPTION>
AGREEMENT                                   SECTION                   CAPTION

<S>                                         <C>                       <C>
Development Agreement                       10.3                      Indiana Casino

                                            11.1                       Representations and Warranties of the Band

                                            12.3                       Right to Cure

                                            13.5                       Band Right to Terminate for Material Adverse Change

                                            14.8                       Remedies; provided that the remedies of Lakes shall be
                                                                       limited to claims for breach of its retained rights under
                                                                       this ss. 10(c).

                                            15.4                       Notice

                                            15.7                       Waiver

                                            15.10                      Survival of Covenants

                                            15.12                      Periods of Time; Time of the Essence

                                            15.13                      Confidential and Proprietary
</TABLE>

                                       -7-
<PAGE>   8
<TABLE>
<S>                                         <C>                        <C>
                                                                       Information

                                            15.18(a)                   Consent - Band; provided that the rights of Lakes under
                                                                       this subsection shall be limited to claims relating to
                                                                       consent of the Band with regard to sections specified in
                                                                       this ss. 10(c).

Management Agreement
                                             9.2                       Indiana Casino

                                            10.1                       Representations and Warranties of the Band

                                            11.3                       Right to Cure

                                            12.5                       Band Right to Terminate for Material Adverse Change

                                            13.8                       Remedies; provided that the remedies of Lakes shall be
                                                                       limited to claims for breach of its retained rights under
                                                                       this ss. 10(c).

                                            13.11(ii)                  Indemnity of Manager by Band, provided that such indemnity
                                                                       shall be limited to claims relating to the period prior to
                                                                       the date of this Agreement.

                                            14.1                       Consents and Approvals - Band; provided that the rights of
                                                                       Lakes under this subsection shall be limited to claims
                                                                       relating to consent of the Band with regard to sections
                                                                       specified in this ss. 10(c).

                                            18.2                       Notice

                                            18.5                       Waiver

                                            18.10                      Survival of Covenants
</TABLE>

                                      -8-
<PAGE>   9
<TABLE>
<S>                                         <C>                        <C>
                                            18.12                      Periods of Time; Time of the Essence

                                            18.15                      Confidential  and Proprietary Information
</TABLE>

         d.       Lakes and Great Lakes shall both be parties to, and bound by,
                  the Account Control Agreement, as amended, and the Amendment
                  to Pledge and Security Agreement, as amended,

11.      Sovereign Immunity. Lakes agrees that all claims and causes of action
         it may in the future have against the Band, whether at law, in tort or
         otherwise, shall be subject to the Band's sovereign immunity, unless
         specifically waived by the Band in writing after the date of this
         Agreement or, as to disputes under this Agreement or as to sections
         specified in ss.10, as provided in ss.19 of this Agreement. Lakes
         shall, upon the execution of this Agreement, no longer have the
         benefit of any limited waiver of sovereign immunity provided in the
         Obligations. Nothing in this Agreement waives or prejudices any rights
         Lakes or LG&R may have under the terms of their Guaranty, or affects
         any limited waiver of sovereign immunity in such Guaranty.

12.      Covenants and Representations of Lakes and Great Lakes

         a.       Great Lakes is, and at all times during the Term of the
                  Development Agreement and the Term of the Management Agreement
                  shall be, the wholly owned subsidiary of LG&R, which in turn
                  is and shall remain during such Terms the wholly owned
                  subsidiary of Lakes.

         b.       The Chief Manager and Chief Financial Manager of Great Lakes
                  are, and at all times during the Term of the Development
                  Agreement and the Term of the Management Agreement shall be,
                  the Chief Executive Officer and Treasurer, respectively, of
                  Lakes.

         c.       Lyle Berman is and at all times during the Term of the
                  Development Agreement and the Term of the Management Agreement
                  shall be the Chief Manager of Great Lakes, unless (i) Mr.
                  Berman dies or becomes disabled, or (ii) Mr. Berman is
                  replaced as Chief Executive Officer of Lakes with the consent
                  of the Band as provided in ss. 10.5(c) of the Development
                  Agreement. In the event of such replacement, Mr.

                                      -9-
<PAGE>   10

                  Berman's replacement as approved by the Band shall be the
                  Chief Manager of Great Lakes.

         d.       Great Lakes is a duly organized Minnesota limited liability
                  company.

         e.       This Agreement constitutes the legal, valid and binding
                  obligation of Great Lakes and Lakes, and is fully enforceable
                  in accordance with its terms.

         f.       The Obligations constitute the legal, valid and binding
                  obligation of Great Lakes, and are fully enforceable in
                  accordance with their terms.

         g.       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 either of them is now a party
                  or by which either of them is or may in the future be bound.

         h.       The fulfillment of and compliance with the terms and
                  provisions of the Obligations will not conflict with, 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
                  Great Lakes under any agreement or instrument to which it is
                  now a party or by which it is or may in the future be bound.

         i.       The Band has, and shall have until the termination of the
                  Pledge Agreement in accordance with ss. 12 thereof, a first
                  perfected security interest in the Account.

13.      Amendment of Related Documents. The following Related Documents shall
         be amended as provided in the indicated exhibits:

         a.       Account Control Agreement (Exhibit C)

         b.       Pledge and Security Agreement (Exhibit D)

                  i.       UCC-1 Financing Statements

                           (1)      Minnesota Secretary of State (Exhibit E-1)

                                      -10-
<PAGE>   11

                           (2)      Michigan Secretary of State (Exhibit E-2)

                  ii.      UCC-3 Financing Statements

                           (1)      Minnesota Secretary of State (Exhibit E-3)

                           (2)      Michigan Secretary of State (Exhibit E-4)

         c.       Assignment of Mortgage (Exhibit F)

14.      Further Assurances. From time to time hereafter, Lakes, Great Lakes
         and/or the Band 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.

15.      Governing Law; Severability. This Agreement shall be interpreted in
         accordance with the law of Michigan. Wherever possible each provision
         of this Agreement shall be interpreted in such manner as to be
         effective and valid under applicable law, but if any provisions of this
         Agreement shall be prohibited by, unenforceable or invalid under
         applicable law, such provision shall be ineffective to the extent of
         such prohibition, unenforceability or invalidity, without invalidating
         the remainder of such provision or the remaining provisions of this
         Agreement.

16.      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 and
         obligations hereunder and under the Obligations without the written
         consent of the Band.

17.      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.

18.      Notices. 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

                                      -11-
<PAGE>   12

         prepaid, or be overnight mail or courier service, addressed to Great
         Lakes at the address of Lakes and with copies as set forth in Section
         15.4 of the Development Agreement. Notice to the Band shall be given as
         provided in Section 15.4 of the Development Agreement. Any notice or
         demand so mailed shall be deemed received on the date of actual
         receipt, on the third business day following mailing as herein set
         forth or one day following delivery to a courier service, whichever
         first occurs.

19.      Arbitration; Limited Waiver of Sovereign Immunity. Any disputes under
         this Agreement or under the sections of the Agreements specified in
         ss.10 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.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.

20.      Ratification. Great Lakes and the Band, and Lakes (to the extent
         provided in ss.10) each ratify and confirm the Obligations.

21.      Interpretation. This Agreement, the related amendments to a Pledge and
         Security Agreement and Account Control 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.

         IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption Agreement to be executed as of the day first above written.

                                      -12-
<PAGE>   13

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

                                          THE POKAGON BAND OF POTAWATOMI
                                          INDIANS

By:
   ------------------------------------
                                          Its: Council Chairman

                                       By:
                                          -------------------------------------
                                          Its: Secretary

Seen and agreed:

                                          LAKES GAMING AND RESORTS, LLC

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

                                      -13-
<PAGE>   14

                                   SCHEDULE A
                                       TO
                       ASSIGNMENT AND ASSUMPTION AGREEMENT

1.       Development Agreement between the Pokagon Band of Potawatami Indians
         (the "Band") and Lakes Gaming, Inc. ("Lakes") dated July 8, 1999.

2.       Management Agreement between the Band and Lakes dated July 8, 1999.

3.       Account Control Agreement by and among the Band, Lakes and Firstar Bank
         of Minnesota, N.A. dated July 8, 1999.

4.       Pledge and Security Agreement by and between Lakes and the Band dated
         July 8, 1999.

5.       Transition Loan Note dated July 8, 1999 made payable by the Band to the
         order of Lakes in the original principal amount of $7,500,000.

6.       Lakes Note dated July 8, 1999 made payable by the Band to the order of
         Lakes in the original principal amount of $43,000,000.

7.       Non-Gaming Land Acquisition Line of Credit Agreement dated July 8, 1999
         by and between the Band and Lakes.

8.       Guaranty by Pokagon Properties, LLC ("Pokagon Properties") in favor of
         Lakes dated March 9, 2000.

9.       Mortgage covering properties in Berrien County, Michigan dated March 9,
         2000 executed by Pokagon Properties in favor of Lakes, as amended.

10.      Mortgage covering properties in VanBuren County, Michigan dated March
         9, 2000 executed by Pokagon Properties in favor of Lakes, as amended.

11.      Mortgage covering properties in Cass County, Michigan dated September
         25, 2000 executed by Pokagon Properties in favor of Lakes.

                                      -14-<PAGE>   1
                           FIRST AMENDED AND RESTATED

                              DEVELOPMENT AGREEMENT

                                   BETWEEN THE

                       POKAGON BAND OF POTAWATOMI INDIANS

                                       AND

                       GREAT LAKES GAMING OF MICHIGAN, LLC
                      (f/k/a GREAT LAKES OF MICHIGAN, LLC)

                          DATED AS OF OCTOBER 16, 2000

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>

<S>                                                                                                              <C>
RECITALS .........................................................................................................1

ARTICLE 1 - DEFINITIONS AND OBJECTIVES............................................................................2
    Definitions...................................................................................................2
    Independent Agreement........................................................................................13

ARTICLE 2 - ACQUISITION OF GAMING SITE AND NON-GAMING
    LANDS........................................................................................................14
    Selection of Gaming Site.....................................................................................14
             Option..............................................................................................14
             Purchase Agreement..................................................................................14
    Closing on Gaming Site; Funding..............................................................................15
    Funding where Gaming Site Acquired by Band Designee..........................................................15
    Confidentiality..............................................................................................15
    Assignment of Other Options..................................................................................15
    Selection of Non-Gaming Lands................................................................................16
    Closing on Non-Gaming Lands; Funding.........................................................................16
    Funding where Non-Gaming Land Acquired by Band Designee......................................................16
    Mortgages Prior to Transfer into Trust.......................................................................17

ARTICLE 3 - FEASIBILITY STUDY....................................................................................17
    Initial Phase................................................................................................17
    Final Scope of Work..........................................................................................17
    Modification of Final Scope of Work..........................................................................18
    Bank Loans and Equipment Loans...............................................................................18

ARTICLE 4 - DESIGN PHASE.........................................................................................18
    Employment of Architect......................................................................................18
    Design and Construction Budgets..............................................................................19
    Gaming Regulatory Authority Expenses.........................................................................19
    Concept Design and Engineering...............................................................................19
    Preliminary Program Evaluation...............................................................................20
    Design Development...........................................................................................20
    Plans and Specifications.....................................................................................20
    Compliance with Construction Standards, Environmental Laws
    and Regulations..............................................................................................21
    Advance of Funds for Design Work.............................................................................21

ARTICLE 5 - CONSTRUCTION PHASE...................................................................................21

</TABLE>

<PAGE>   3

<TABLE>

<S>                                                                                                             <C>
    Selection of Contractor or Construction Lakes................................................................21
    Vendor Preferences...........................................................................................22
    Proposal Review..............................................................................................22
    Contracts....................................................................................................22
    Construction Document Provisions.............................................................................22
    Construction Administration..................................................................................23
    Construction Commencement and Completion.....................................................................23
    Determination of Approved Construction Costs; Cost Overruns..................................................24

ARTICLE 6 - FURNISHINGS AND EQUIPMENT............................................................................24
    Selection of Furnishings and Equipment.......................................................................24

ARTICLE 7 - TERM.................................................................................................24
    Term.........................................................................................................24

ARTICLE 8 - PAYMENTS AND COMMITMENTS BY LAKES
    BEFORE APPROVAL OF MANAGEMENT AGREEMENT......................................................................25
    Fees Payable By Lakes to the Band............................................................................25
             Initial Fee.........................................................................................25
             Signing Fee.........................................................................................25
             Monthly Payments....................................................................................25
    Deposit into Account.........................................................................................26
    Transition Loan..............................................................................................26
    Advances on Lakes Development Loan...........................................................................27
             Gaming Site Acquisition Funds.......................................................................27
             Site Planning and Design Development................................................................27
             Advances to the Band for Gaming Ordinance...........................................................27
    Non-Gaming Land Acquisition Line of Credit...................................................................27

ARTICLE 9 - PAYMENTS AND COMMITMENTS BY LAKES
    AFTER APPROVAL OF MANAGEMENT AGREEMENT.......................................................................28
    Scholarship Program Fee......................................................................................28
    Development and Equipment Loans..............................................................................28
             Lakes Development Loan..............................................................................29
             Bank Development Loan...............................................................................33
             Equipment Loan......................................................................................35
             Terms Applicable to all Loans.......................................................................38

ARTICLE 10 - EXCLUSIVITY; NON-COMPETITION........................................................................39
    Exclusivity Regarding Facility...............................................................................39
    Exclusivity in Michigan......................................................................................39
    Indiana Casino...............................................................................................41

</TABLE>

<PAGE>   4

<TABLE>

<S>                                                                                                             <C>
    Non-Competition..............................................................................................41
    Assignment; Change of Control................................................................................42
    Restrictions on Collateral Development.......................................................................44

ARTICLE 11 - REPRESENTATIONS, WARRANTIES, AND COVENANTS..........................................................44
    Representations and Warranties of the Band...................................................................44
    Band Covenants...............................................................................................44
    Representations and Warranties of Lakes......................................................................46
    Lakes Covenants..............................................................................................46

ARTICLE 12 - EVENTS OF DEFAULT...................................................................................47
    Events of Default by the Band................................................................................47
    Events of Default by Lakes...................................................................................48
    Material Breach; Right to Cure...............................................................................49

ARTICLE 13 - TERMINATION.........................................................................................49
    Voluntary Termination........................................................................................49
    Termination if No NIGC Approval..............................................................................50
    Lakes Right to Terminate on Band Event of Default............................................................50
    Band Right to Terminate on Lakes Event of Default............................................................50
    Band Right to Terminate for Material Adverse Change..........................................................50
    Termination on Buyout........................................................................................51
    Involuntary Termination Due to Changes in Legal Requirements.................................................51
    Repair or Replacement........................................................................................52
    Setoff; Recoupment...........................................................................................53

ARTICLE 14 - DISPUTE RESOLUTION; LIQUIDATED DAMAGES..............................................................53
    Band's Waiver of Sovereign Immunity and Consent to Suit......................................................53
    Arbitration..................................................................................................53
             Choice of Law.......................................................................................54
             Place of Hearing....................................................................................54
             Confidentiality.....................................................................................54
    Limitation of Actions........................................................................................54
             Damages.............................................................................................54
             Consents and Approvals..............................................................................54
             Injunctive Relief and Specific Performance..........................................................55
             Action to Compel Arbitration........................................................................55
    Damages on Termination for Failure to Obtain NIGC Approval...................................................55
    Liquidated Damages and Limitations on Remedies...............................................................55
             Liquidated Damages Payable by Lakes.................................................................55
             Liquidated Damages Payable by the Band..............................................................56
    Lakes Continuing Obligations.................................................................................56
</TABLE>

<PAGE>   5

<TABLE>

<S>                                                                                                             <C>
    Termination of Exclusivity...................................................................................57
    Remedies ....................................................................................................57
    Fees not Damages.............................................................................................57

ARTICLE 15 - GENERAL.............................................................................................57
    Nature of Agreement..........................................................................................57
    Lakes's Interest.............................................................................................57
    Situs of the Agreement.......................................................................................57
    Notice.......................................................................................................57
    Relationship.................................................................................................59
    Further Actions..............................................................................................59
    Waivers......................................................................................................59
    Captions.....................................................................................................59
    Third Party Beneficiary......................................................................................59
    Survival of Covenants........................................................................................60
    Estoppel Certificate.........................................................................................60
    Periods of Time; Time of the ................................................................................60
    Confidential and Proprietary Information.....................................................................60
    Government Savings Clause....................................................................................60
    Successors and Assigns.......................................................................................61
    Severability.................................................................................................61
    Entire Agreement.............................................................................................61
    Consents ....................................................................................................61
    Ratification.................................................................................................62
    Execution Page...............................................................................................63

</TABLE>

<PAGE>   6

                        EXHIBIT LIST

EXHIBIT A        Control Agreement

EXHIBIT A-1      Dominion Agreement

EXHIBIT B        First Amended and Restated Non-Gaming Lakes Note

EXHIBIT B-1      Description of Gaming Site

EXHIBIT C-1      First Amended and Restated Non-Gaming Land Acquisition Line of
                 Credit Agreement

EXHIBIT D        Amended and Restated Non-Gaming Transition Loan Note

EXHIBIT E        Band Litigation

EXHIBIT F        Conditional Release and Termination Agreement between Lakes and
                 CRC dated May 20, 1999, as amended by Amendment dated on or
                 about July 7, 1999

EXHIBIT G        General Release from CRC to the Band and its members

<PAGE>   7

                FIRST AMENDED AND RESTATED DEVELOPMENT AGREEMENT

         This First Amended and Restated Development Agreement is made as of the
16th day of October, 2000 by and between the POKAGON BAND OF POTAWATOMI INDIANS
(the "Band"), and GREAT LAKES GAMING OF MICHIGAN, LLC, a Minnesota limited
liability company (f/k/a Great Lakes of Michigan, LLC) ("Great Lakes").

                                    RECITALS

         A.   The Band, pursuant to 25 U.S.C. ss.ss. 1300j et seq. (the
"Restoration Act"), is a federally recognized Indian tribe recognized as
eligible by the Secretary of the Interior for the special programs and services
provided by the United States to Indians because of their status as Indians and
is recognized as possessing powers of self-government.

         B.   As authorized by the Restoration Act, the Band intends to acquire
the Gaming Site in the State of Michigan, to be held by the federal government
in trust for the Band, on which the Band intends to construct and operate a
permanent Class III gaming facility (the "Facility"); and the Band will possess
sovereign governmental powers over the Gaming Site pursuant to the Band's
recognized powers of self government, and the Band desires to use the Gaming
Site to improve the economic conditions of its members.

         C.   The Band and Lakes Gaming, Inc. ("Lakes") entered into a
Development Agreement dated as of July 8, 1999 (the "Development Agreement")
which contains provisions relating to the development of the Facility.

         D.   The Band has ratified the Development Agreement and the
Development Agreement is now in full force and effect.

         E.   Lakes has assigned its rights and obligations under the
Development Agreement to Great Lakes pursuant to an Assignment and Assumption
Agreement of near or even date, subject to certain terms and conditions.

         F.   At the request of the Band, Lakes has agreed to loan the Band an
additional $8 million for immediate use by the Band in acquiring both gaming and
non-gaming land. The Band and Lakes have agreed to construct the Facility in a
phased approach. Lakes has also agreed, due to uncertainty in the capital
markets over the availability of financing for Facility, to provide a greater
proportion of the initial phase of project financing from its own funds, and
affirmed its commitment to finance all phases of the project entirely from its
own funds if financing at an interest

<PAGE>   8

rate of 13% or less is not available from the capital markets. The Band has in
turn agreed to extend the term of the Management Agreement and to enter into a
Dominion Agreement granting Lakes a security interest in the Dominion Account as
defined in the Management Agreement.

         G.   The cost of developing, constructing and equipping the Initial
Phase of the Project is understood as totaling approximately $97 million, which
will be financed as follows: the Lakes Development Loan in the amount of $46
million; the Bank Loan in the amount of $28 million (subject to increase to not
more than $36 million, plus accrued interest thereon, to refinance funds
advanced by Lakes from the Land Acquisition Reserve for Gaming Site Acquisition
and Non-Gaming Land Acquisition); and the Equipment Loan in the amount of $22.75
million.

         H.   This First Amended and Restated Development Agreement incorporates
certain amendments to the Development Agreement agreed to by the parties
pursuant to a First Amendment to Development Agreement dated as of October 16,
2000.

         NOW, THEREFORE, in consideration of the mutual covenants, conditions
and promises herein contained, the receipt and sufficiency of which are
expressly acknowledged, the Band and Great Lakes hereby agree as follows:

                                    ARTICLE 1
                           DEFINITIONS AND OBJECTIVES

         Section 1.1 Definitions. Capitalized terms not otherwise defined herein
shall have the meanings set forth in the Management Agreement. In addition to
other terms which are defined elsewhere in this Agreement, the following terms,
for purposes of this Agreement, shall have the meanings set forth in this
Section.

         "Account" means the account at Firstar established pursuant to ss. 8.2
that is subject to the Control Agreement.

         "Accrued Expenses" shall mean the accrued unpaid development costs and
expenses relating to the Gaming Site and the Enterprise.

         "Agreement" shall mean this Development Agreement.

         "Agreements" shall mean this Agreement and the Management Agreement.

         "Approved Construction Costs" shall mean the Architect's estimate of
Construction Costs approved by the Band and Lakes pursuant to ss. 5.8.

<PAGE>   9

         "Approved Development Budget" has the meaning set out in ss. 4.2.

         "Architect" shall have the meaning described in ss. 4.1.
         "Band Designee" shall mean Pokagon Properties, LLC, a Delaware limited
liability company, Northern Indiana Holdings, LLC, an Indiana limited liability
company, or such other entities as may be designated by the Band in writing.

         "Band Designee Guarantee" shall mean the guarantee by the Band Designee
to Lakes of amounts advanced by Lakes or Great Lakes under the Lakes Note and
the Non- Gaming Land Acquisition Line of Credit, which shall be substantially in
the form of the guaranty executed by Pokagon Properties, LLC in favor of Lakes
dated March 9, 2000.

         "Band Designee Mortgage" means the mortgage granted by the Band
Designee to Lakes securing the Lakes Note Guarantee, which shall be
substantially in the form of the mortgage granted by Pokagon Properties, LLC to
Lakes dated March 9, 2000.

         "Band Event of Default" has the meaning described in ss. 12.1.

         "Band Interest Rate" shall mean the lesser of (i) Wall Street Journal
prime rate as of the Bank Closing plus 1%, or (ii) 10%.

         "Band Mortgage" means the mortgage granted by the Band to Lakes
securing the Lakes Note and the Non-Gaming Land Acquisition Line of Credit,
which shall be substantially in the form of the mortgage granted by Pokagon
Properties, LLC to Lakes dated March 9, 2000, with appropriate changes
reasonably acceptable to Lakes and the Band reflecting the change to the Band as
mortgagor and to Great Lakes as mortgagee.

         "Bank Closing" means the closing on the Bank Loan Agreement.

         "Bank Lender" shall mean the financial institution or bond trustee
described as the lender or bond trustee in the Bank Loan Agreement.

         "Bank Loan" shall mean the loan evidenced by the Bank Note.

         "Bank Loan Agreement" shall mean (a) the capital lease, loan agreement
and/or bond indenture to be entered into between the Band and the Bank Lender
for the Initial Phase in a principal amount, not to exceed $36,000,000 plus
accrued interest with respect to advances on the Second Tranche - Lakes Note and
the Second Tranche - Non-Gaming, which will (i), when added to the Lakes
Development Loan,

<PAGE>   10

finance all Development Expenditures for the Initial Phase (other than
acquisition of Furnishings and Equipment) and (ii) refinance all amounts
advanced by Lakes from the Land Acquisition Reserve; and (b) the subsequent or
amended capital lease, loan agreement and/or bond indenture in an amount which
will finance all Development Expenditures associated with the expansion of the
Facility to the Final Scope of Work (other than acquisition of Furnishings and
Equipment); provided that the aggregate principal amount of such capital lease,
loan and/or indenture, when added to the Equipment Loan for that expansion,
shall not exceed $100,000,000.

         "Bank Note" shall mean the promissory note or bond to be executed by
the Band pursuant to the Bank Loan Agreement.

         "BIA" shall mean the Bureau of Indian Affairs under the Department of
the Interior of the United States of America.

         "Business Board" shall mean the decision making body created pursuant
to ss. 3.4 of the Management Agreement.

         "Change of Control" shall have the meaning set out in ss. 10.5(c).

         "Class II Gaming" shall mean Class II Gaming as defined in the IGRA.

         "Class III Gaming" shall mean Class III Gaming as defined in the IGRA.

         "Commencement Date" shall mean the first date that Gaming is conducted
pursuant to the terms of the Management Agreement in a Facility, including
Gaming conducted on completion of the Initial Phase of the Facility.

         "Compact" shall mean the Compact between the Band and the State dated
December 3, 1998 and approved in 64 Fed.Reg. No. 32, Thursday, February 18,
1999, at 8111, as the same may, from time to time, be amended; or such other
compact or consent decree that may be substituted therefor.

         "Completion Date" shall mean the date upon which Great Lakes receives,
as to the Initial Phase or the Final Scope of Work:

                  (i) an architect's certificate from the Architect chosen
         pursuant to this Agreement as having responsibility for the design and
         supervision of construction, equipping and furnishing of the Facility
         certifying that the Initial Phase or the Final Scope of Work, as the
         case may be, has been fully constructed substantially in accordance
         with the Plans and Specifications;

<PAGE>   11

                  (ii) certification from the division, department or designee
         of Great Lakes having responsibility to assure compliance with any
         operational standards stating that the Initial Phase or the Final Scope
         of Work, as the case may be, as completed, is in substantial compliance
         with any such standards;

                  (iii) a permanent or temporary certificate of occupancy, if
         required, from the regulatory entity within the Band Government with
         authority to grant such a certificate, permitting the use and operation
         of the Initial Phase or the Final Scope of Work, as the case may be, in
         accordance with this Agreement; and

                  (iv) certificates of such professional designers, inspectors
         or consultants or opinions of counsel, as Great Lakes may reasonably
         determine to be appropriate, verifying construction and furnishing of
         the Initial Phase or the Final Scope of Work, as the case may be, in
         compliance with all Legal Requirements.

         "Constitution" shall mean the document or documents which govern the
actions of the Band and, upon enactment, the Constitution of the Pokagon Band of
Potawatomi Indians as ultimately approved by the Band and approved by the
Secretary of the Interior.

         "Construction Costs" means the costs of acquiring the Gaming Site and
designing, developing, constructing, furnishing and equipping the Facility,
including all related planning and professional fees, Furnishings and Equipment,
and a contingency not to exceed 8% of such costs (excluding Furnishings and
Equipment).

         "Construction Documents" shall have the meaning described in Section
5.4.

         "Control Agreement" shall mean the Account Control Agreement among
Firstar, Lakes and the Band of near or even date perfecting the Band's lien and
security interest in the Account, a true copy of which is attached as Exhibit A.

         "Corporate Commission" shall mean a body corporate and politic
established, at the Band's discretion, by the Pokagon Council to own the
Enterprise and such other businesses and assets as the Band may deem
appropriate.

         "CRC" means Casino Resource Corporation, a Minnesota corporation and
its Insiders.

         "Design Agreement" shall have the meaning described in Section 4.1

<PAGE>   12

         "Design Packages" shall have the meaning described in Section 4.1.

         "Development Expenditures" shall mean all Approved Construction Costs;
all other costs of equipping and opening the Facility, including but not limited
to all related planning and professional fees, costs of infrastructure,
equipment, furniture and fixtures (including gaming equipment), and pre-opening
costs, fees and expenses; all legal, lobbying, public relations and other
professional costs and expenses related to transferring Gaming Lands and
Non-Gaming Lands into trust and to the Compact between the Band and the State of
Michigan; and all legal, lobbying and other fees and expenses previously
incurred by the Band in obtaining, or litigating with regard to, the Compact
with the State of Michigan, not to exceed $20,000, as well as all other such
fees and expenses subsequently incurred by the Band that the Band reasonably
chooses to include in the Development Budget.

         "Disbursement Accounts" shall mean those accounts described in ss.
4.19.3 of the Management Agreement.

         "Dominion Account" means the collateral account in favor of Lakes
established under ss. 4.19.2 of the Management Agreement.

         "Dominion Agreement" means the collateral agreement granting and
perfecting Lakes a security interest in the Dominion Account, which shall be in
the form attached as Exhibit A-1.

         "Enterprise" shall mean the enterprise of the Band created by the Band
to engage in Class II and Class III Gaming at the Facility, and which shall
include all gaming at the Facility and any other lawful commercial activity
allowed in the Facility, including but not limited to the sale of alcohol,
tobacco, gifts and souvenirs; provided, however, the Enterprise shall only
include any hotel operated by the Band, ancillary non-Gaming activity within the
Facility, or other commercial enterprise conducted by the Band which is not
generally related to Class II or Class III Gaming if such hotel, non-Gaming
activity or other commercial enterprise (a) is financed by, or through the
guaranty of, Manager, (b) is specifically included within the Initial Scope of
Work or is not a material expansion of the Initial Scope of Work, or (c) is
specified by the Business Board and the Pokagon Council as being included in the
Enterprise, in which case depreciation and other expenses relating to such
hotel, non-Gaming activity or other commercial enterprise shall be an Operating
Expense, all related revenues shall be included in Gross Revenues, and interest
on all related financing shall be paid by the Enterprise; and provided further
that the Enterprise shall not include a tribal gift/craft business which the
Band may elect to operate, rent free, on an area of about 2,400 square feet at
the Facility. The design and operation of such gift/craft shop shall be
consistent with the theme and quality of the Facility, and

<PAGE>   13

the location of such gift/craft shop shall be approved by the Business Board.

         "Enterprise Accounts" shall mean those accounts described in ss. 4.19.1
of the Management Agreement.

         "Equipment Lender" shall mean the financial institution described as
the lender in the Equipment Loan Agreement.

         "Equipment Loan Agreement" shall mean (a) the bond indenture, loan
agreement and/or equipment lease in a principal amount of up to $22,750,000 to
be entered into between the Band and the Equipment Lender to finance acquisition
of the Furnishings and Equipment for the Initial Phase, and (b) the subsequent
or amended bond indenture, loan agreement and/or equipment lease which will
finance the acquisition of the Furnishings and Equipment for expansion of the
Facility to the Final Scope of Work; provided that the principal amount of such
loan or lease, when added to the Bank Development Loan for that expansion, shall
not exceed $100,000,000.

         "Equipment Loan" means the loan or lease under the Equipment Loan
Agreement.

         "Equipment Note" shall mean the promissory note or bond to be executed
by the Band pursuant to the Equipment Loan Agreement.

         "Facility" shall mean the permanent buildings, structures and
improvements located on the Gaming Site and all fixtures, Furnishings and
Equipment attached to, forming a part of, or necessary for the operation of the
Enterprise.

         "Final Scope of Work" means the final gaming facility and associated
amenities that the parties intend to complete, unless otherwise agreed by Great
Lakes and the Band, no later than the third anniversary of the Commencement
Date, which, together with the Initial Phase, shall include not less than
111,000 sq.ft. of gaming space, 100 gaming tables, 3,000 slot machines, 4,000
surface parking spaces for guests and a 2,000 car garage (unless, as to either
the surface parking or the garage, a smaller number is approved by the Business
Board), parking spaces for 45 buses and 600 employees, a 200 room hotel and a
2,500 seat bingo and events center, and which shall contain (excluding the hotel
and bingo/events center) at least 304,000 sq. ft. of space. The Final Scope of
Work will include and be integrated with the Initial Phase.

         "First Tranche - Lakes Note" means all amounts advanced under the Lakes
Note other than the Second Tranche - Lakes Note.

<PAGE>   14

         "First Tranche - Non-Gaming" means all amounts advanced under the Non-
Gaming Land Acquisition Line of Credit other than the Second Tranche -
Non-Gaming.

         "Firstar" shall mean Firstar Bank N.A.

          "Force Majeure" shall mean acts of God, fire, flood, storm,
earthquake, war, civil disorder, governmental acts, regulations, orders or
restrictions, accidents not caused by a party's negligence, strikes or labor
disturbances.

         "Furnishings and Equipment" shall mean all furniture, furnishings and
equipment required for the operation of the Enterprise in accordance with the
standards set forth in this Agreement, including, without limitation:

                  (i)    cashier, money sorting and money counting equipment,
         surveillance and communication equipment, and security equipment;

                  (ii)   slot machines, video games of chance, table games, keno
         equipment and other gaming equipment;

                  (iii)  office furnishings and equipment;

                  (iv)   specialized equipment necessary for the operation of
         any portion of the Enterprise for accessory purposes, including
         equipment for kitchens, laundries, dry cleaning, cocktail lounges,
         restaurants, public rooms, commercial and parking spaces, and
         recreational facilities; and

                  (v)    hotel equipment (to the extent a hotel is included in
         the Enterprise);

                  (vi)   all other furnishings and equipment hereafter located
         and installed in or about the Facility which are used in the operation
         of the Enterprise in accordance with the standards set forth in this
         Agreement.

         "Gaming" shall mean any and all activities defined as Class II and
Class III Gaming pursuant to IGRA.

         "Gaming Ordinance" shall have the meaning described in Section
8.4(iii).

         "Gaming Regulatory Authority" or "GRA" shall mean the Band body created
pursuant to the Band Gaming Ordinance to regulate the Class II and Class III
Gaming of the Band in accordance with the Compact, the IGRA and the Gaming
Ordinance.

<PAGE>   15

         "Gaming Site" shall mean the parcels of land in New Buffalo, Michigan
described on the attached Exhibit B-1, or such other parcels identified by the
Band and approved by Great Lakes, as suitable for development of the Facility
and operation of the Enterprise; all of which must meet the requirements of
United States of America to be accepted in trust for the Band for Gaming
purposes.

         "Gaming Site Acquisition Advances" shall mean funds advanced under the
Lakes Development Loan in such amount or amounts as are needed to option or
acquire the Gaming Site, provided that the total amount of Gaming Site
Acquisition Advances shall not exceed $11,000,000.

         "Gaming Site Option" has the meaning provided in ss. 2.1.1.

         "Gaming Site Purchase Agreement" has the meaning provided in ss. 2.1.2.

         "Great Lakes" means Great Lakes Gaming of Michigan, LLC, a Minnesota
limited liability company (f/k/a Great Lakes of Michigan, LLC).

         "Initial Phase" shall mean the first phase of the Facility, which shall
(unless otherwise agreed by Great Lakes and the Band) have not less than 63,000
sq.ft. of gaming space, 50 table games, 1,750 slot machines and food and
beverage facilities, and which shall contain at least 153,000 sq. ft. of space
but shall not include a hotel. The Initial Phase shall be designed and
constructed so that it will be an integral part of the Final Scope of Work.

         "Initial Scope of Work" means a facility including not less than 90,000
sq.ft. of gaming space, 75 gaming tables, 3,000 slot machines, 4,000 surface
parking spaces for guests (unless a smaller number is approved by the Business
Board) and parking spaces for 45 buses and 600 employees; provided that if
financing beyond the aggregate amount of the Loans set forth in ss. 9.2 is
available to the Band without Lakes' guarantee on terms acceptable to the Band,
the Initial Scope of Work may at the Band's option be increased to include a
hotel, bingo hall and multi-purpose entertainment facility, or an indoor garage.

         "IGRA" shall mean the Indian Gaming Regulatory Act of 1988, P.L.
100-497, 25 U.S.C. ss. 2701 et seq. as it may from time to time be amended.

         "Insider" has the meaning defined in 11 U.S.C. ss. 101(31), assuming
Lakes were the debtor in that definition, and shall include persons or entities
that become Insiders after the date of this Agreement, whether as the result of
a merger, acquisition. restructuring or otherwise.

<PAGE>   16

         "Lakes" shall mean either Great Lakes or both Great Lakes and Lakes
Gaming, Inc., to the extent provided in the Assignment and Assumption Agreement
among Great Lakes, Lakes Gaming, Inc. and the Band of near or even date.

         "Lakes Development Loan" shall mean the loan to the Band to be made by
Lakes under the Lakes Note in a principal amount of up to $ 46,000,000,
comprised of (A) up to $ 11,000,000 for Gaming Site Acquisition Advances and (B)
$35,000,000 for Development Expenditures other than acquisition of the Gaming
Site.

         "Lakes Event of Default" has the meaning described in ss. 12.2.

         "Lakes's Internal Expenses" shall mean Lakes's corporate overhead,
including without limitation salaries or benefits of any of Lakes's officers and
employees, whether or not they perform services for the Project or the
Enterprise, and any travel or other expenses of Lakes's employees.

         "Lakes Note" shall mean the promissory note to be executed by the Band
to evidence the Lakes Development Loan, which shall be in the form attached
hereto as Exhibit B.

         "Land Acquisition Reserve" shall mean the sum of $8,000,000, of which
$3,000,000 shall be allocated to Gaming Site Acquisition Advances under the
Lakes Note and $5,000,000 shall be allocated to fund the acquisition of
Non-Gaming Land under the Non-Gaming Acquisition Line of Credit. The Land
Acquisition Reserve is to fund a portion of advances under the Non-Gaming Land
Acquisition Line of Credit and the Lakes Note, as provided in ss.ss. 2.1, 2.2
and 2.6.

         "Legal Requirements" shall mean any and all present and future
judicial, administrative, and tribal rulings or decisions, and any and all
present and future federal, state, local and tribal laws, ordinances, rules,
regulations, permits, licenses and certificates, in any way applicable to the
Band, Lakes, the Gaming Site, the Facility, and the Enterprise, including
without limitation, the IGRA, the Compact, and the Band Gaming Ordinance.

         "Limited Recourse" shall mean that all Loans and all liabilities of the
Band under or related to the Agreements, the Enterprise or the Gaming Regulatory
Authority, and any related awards, judgments or decrees, shall be payable solely
out of undistributed or future Net Revenues of the Enterprise and shall be a
limited recourse obligation of the Band, with no recourse to tribal assets other
than such Net Revenues (except (i), as to the Equipment Loan, a security
interest in the Furnishings

<PAGE>   17

and Equipment purchased with Equipment Loan proceeds, (ii), if the Commencement
Date does not occur, Subsequent Gaming Facility Revenues to the extent provided
in this Agreement, (iii) mortgages on the Gaming Site and Non-Gaming Lands prior
to their transfer into trust, and (iv) after the Commencement Date occurs, funds
on deposit in the Dominion Account to the extent provided in ss. 9.2(x) of the
Development Agreement and the Dominion Agreement, or in any other dominion
agreement executed by the Band). In no event shall Great Lakes or any lender or
other claimant have recourse to (a) the physical property of the Facility (other
than Furnishings and Equipment subject to the security interest securing the
Equipment Loan), (b) Tribal Distributions, (c) assets of the Band purchased with
Tribal Distributions, (d) revenues or assets of any other gaming facility owned
or operated by the Band, or (e) any other asset of the Band (other than (i) as
to the Transition Loan and the Non-Gaming Acquisition Line of Credit, if the
Commencement Date does not occur, Subsequent Gaming Facility Revenues to the
extent provided in this Agreement, (ii) as to the Lakes Note and the Non-Gaming
Acquisition Line of Credit, mortgages on the Gaming Site and Non-Gaming Lands
prior to their transfer into trust, (iii) funds on deposit in the Dominion
Account to the extent provided in the Agreements, the Dominion Agreement and any
other dominion agreement executed by the Band, and (iv) such Net Revenues of the
Enterprise).

         "Loans" shall mean the Lakes Development Loan, the Bank Loan and the
Equipment Loan.

         "Management Agreement" shall mean the agreement between the Band and
Lakes dated the same date as this Agreement, pursuant to which Lakes shall
manage the Enterprise, as amended by First Amendment dated October 16, 2000.

         "Material Adverse Change" shall mean a material adverse change in
Lakes's financial condition which materially and substantially impairs Lakes's
ability to perform under the Agreements.

         "Material Breach" means a failure of either party to perform any
material duty or obligation on its part, if such party fails to (i) cure the
specified default within thirty (30) days following receipt of the notice
provided under ss. 12.3, or (ii) if the default is not capable of being cured
within 30 days, commences such cure within 30 days, proceeds diligently to
complete the cure, and completes the cure no later than 90 days after receipt of
such notice.

         "Memorandum of Understanding" means the Memorandum of Understanding
between the Band and the Secretary of the Interior executed on behalf of the
Secretary on January 11, 1999.

<PAGE>   18

         "Monthly Payments" shall have the meaning described in Section 8.1(c).
         "National Indian Gaming Commission" or "NIGC" means the commission
established pursuant to 25 U.S.C. ss. 2704.

         "Net Revenues" shall have the meaning set forth in the Management
Agreement, and shall include "Net Revenues (gaming)" and "Net Revenues (other)"
as defined in the Management Agreement.

         "NIGC Approval" means (a) a determination by NIGC that Lakes is
suitable for licensing and (b) approval by NIGC of the Agreements.

         "NIGC Disapproval" means a determination by NIGC that Lakes is
unsuitable for licensing, if within 120 days after notification of the NIGC
decision Lakes has not cured the reason for such unsuitability and obtained a
statement of suitability from NIGC.

         "Non-Gaming Land" means any parcels of land in Michigan or Indiana
(other than the Gaming Site) which are (a) identified in a writing executed by
the Band as suitable for reservation homelands for the Band in accordance with
the Memorandum of Understanding, and (b) meet the requirements of United States
of America to be accepted in trust for the Band for Gaming or non-Gaming
purposes; provided that the Gaming Site and the Non-Gaming Land shall not exceed
4,700 acres in the aggregate.

         "Non-Gaming Land Acquisition Line of Credit" shall mean an internal
line of credit in favor of the Band established by Great Lakes in the amount of
$15,000,000, pursuant to the Non-Gaming Land Acquisition Line of Credit
Agreement in the form attached hereto as EXHIBIT C-1, to enable the Band to
option or acquire Non-Gaming Lands.

         "New Pokagon Council" means the Pokagon Council elected at a Band
election scheduled for on or about July 10, 1999, which shall take office in
August, 1999.

         "Operating Expense" has the meaning provided in ss. 2 of the Management
Agreement.

         "Plans and Specifications" shall mean the final Plans and
Specifications approved for the Facility as described in ss. 4.8.

         "Pokagon Council" shall mean the duly elected governing legislative
body of the Band described pursuant to 25 U.S.C. ss. 1300j-4(b) or, at the
option of the Band, a designed committee or council created pursuant to
resolution or ordinance of the Pokagon Council.

<PAGE>   19

         "Preliminary Development Budget" shall have the meaning described in
ss. 4.2.

         "Project" shall have the meaning described in ss. 4.1.

         "Ratification" means passage on or before September 15, 1999 of a
resolution by the New Pokagon Council, at a duly called meeting with a quorum
present, ratifying and endorsing the execution of this Agreement by the Band.

         "Restoration Act" shall mean 25 U.S.C. ss.ss. 1300j et seq.

         "Restricted Territory" shall mean the States of Ohio, Illinois, Indiana
and Michigan.

         "Scholarship Program Fee" shall mean the $1,000,000 non-refundable fee
paid by Lakes under ss. 9.1 of this Agreement.

         "Second Tranche - Lakes Note" means Gaming Site Acquisition Advances to
the extent they exceed $8,000,000.

         "Second Tranche - Non-Gaming" means amounts advanced under the Non-
Gaming Land Acquisition Line of Credit to the extent such advances exceed
$10,000,000.

         "Security Agreement" shall mean the pledge and security agreement
between Lakes and the Band granting the Band a lien and security interest in the
Account.

         "Signing Fee" shall have the meaning described in Section 8.1(b).

         "State" shall refer to the State of Michigan.

         "Subsequent Gaming Facility Revenues" means gaming revenues from a
gaming facility (other than the Facility) owned or operated by the Band in
Michigan, but only to the following extent: (i) all Class III Gaming Net Revenue
and (ii) Class II Gaming Net Revenue, to the extent that such Net Revenue
exceeds $1,000,000 per annum.

         "Term" shall mean the term of this Agreement as described in ss. 7.1.

         "Transition Loan" shall have the meaning described in ss. 8.3.

         "Transition Loan Note" shall mean the promissory note to be executed by
the

<PAGE>   20

Band evidencing the Transition Loan, which shall be in the form attached hereto
as Exhibit D.
         "Tribal Distributions" shall mean Monthly Distribution Payments,
Minimum Guaranteed Monthly Payments and any other payments received by the Band
pursuant to or in connection with the Management Agreement.

         Section 1.2 Independent Agreement. The objective of the Band and Lakes
in entering into and performing this Agreement is to provide a legally
enforceable procedure and agreement pursuant to which Lakes will pay certain
fees to the Band and make certain loans to the Band, and whereby the Band and
Lakes can proceed as far as possible with development of the Facility prior to
the approval of the Management Agreement by the NIGC so that the Facility can be
opened to the public as soon as possible after the approval of the Management
Agreement by the NIGC; and to set forth the rights and obligations of the
parties if approval of the Management Agreement by the NIGC does not occur or on
the occurrence or non-occurrence of certain other events. This is intended to be
a legally enforceable agreement, independent of the Management Agreement, which
shall enter into effect when executed and delivered by the parties and be
enforceable between the parties regardless of whether or not this Agreement or
the Management Agreement is approved by the Chairman of the NIGC.

                                    ARTICLE 2
                 ACQUISITION OF GAMING SITE AND NON-GAMING LANDS

         Section 2.1.   Selection of Gaming Site. As soon as reasonably possible
after the date of this Agreement, Lakes shall recommend one or more sites to be
acquired for the Facility and shall furnish the Pokagon Council with a map and
legal description of each site, with its written recommendation for purchase of
each site, including advice as to the suitability of each site for the Facility
and the availability and terms of options, if any, pertaining to each site. The
parties agree that the proposed gaming site in New Buffalo, Michigan is
preferable for economic reasons, and that the Initial Scope of Work is premised
on that location. The Pokagon Council shall then select the Gaming Site, after
consultation with Great Lakes; provided that the purchase price for the Gaming
Site and the cost of any related options shall not exceed $11,000,000.

                  Section 2.1.1.   Option. If Lakes holds an option on the site
         (the "Gaming Site Option"), the Lakes shall assign such Option to the
         Band when requested to do so by the Band in the Band's sole and
         absolute discretion, such assignment to be without warranty or other
         recourse. At the Band's option, any Gaming Site Options may be obtained
         and held in the name of the Band

<PAGE>   21

         Designee.

                  Section 2.1.2. Purchase Agreement. If Lakes does not hold or
         cannot acquire Gaming Site Options as to the entire Gaming Site, Lakes
         shall negotiate one or more purchase contracts (each, a "Gaming Site
         Purchase Agreement") for purchase of any remaining portions of the site
         by Lakes or its designee or nominee, or, at the Band's option, by the
         Band or the Band Designee. Upon the Band's approval of the form of
         Gaming Site Purchase Agreement proposed by Lakes, Lakes or its designee
         or nominee shall enter into the Gaming Site Purchase Agreement with the
         seller of the site. Lakes shall assign the Gaming Site Purchase
         Agreement to the Band or, at the Band's option, the Band Designee, when
         requested to do so by the Band in the Band's sole and absolute
         discretion, such assignment to be without warranty or other recourse.

         Section 2.2. Closing on Gaming Site; Funding. The Band or the Band
Designee shall thereafter proceed to purchase the Gaming Site and to close that
purchase in accordance with the terms, conditions and provisions of the assigned
Gaming Site Options or Gaming Site Purchase Agreements, as the case may be, and
this Agreement. Such purchase or purchases may occur on or immediately following
NIGC Approval, or at such earlier time as may be (a) required to avoid
expiration of the Gaming Site Option or to comply with deadlines set in the
Gaming Site Purchase Agreement, as they may be extended with the consent of the
owner of the proposed Gaming Site, (b) required to secure approval by
appropriate officials or agencies of the Management Agreement, or (c) as the
parties may otherwise agree. After Ratification Lakes shall advance funds in
such amount or amounts as shall be needed to option and/or acquire the Gaming
Site, including without limitation all related fees, real estate commissions and
transfer taxes, provided that the total amount shall not exceed $11,000,000. All
amounts so advanced by Lakes, together with option or acquisition payments made
by Lakes prior to assignment of the Gaming Site Options or Gaming Site Purchase
Agreements to the Band, shall be Development Expenditures and shall be advanced
under the Lakes Note.

         2.2.1 Funding where Gaming Site Property Acquired by Band Designee. If
         the Band opts to have the Band Designee enter into Gaming Site Options
         or Gaming Site Purchase Agreements, or acquire any of the Gaming Site,
         the cost of obtaining such Options and Gaming Site Purchase Agreements,
         and of closing under such Options and Agreements, including all related
         fees, commissions and expenses, shall be advanced by Lakes to the Band
         under the Lakes Note as a Development Expenditure. The Band shall in
         turn advance or contribute such amounts to or for the benefit of the
         Band Designee. The Band

<PAGE>   22

         Designee shall execute and deliver the Band Designee Guarantee to
         Lakes. The Band Designee shall also execute and deliver to Lakes a Band
         Designee Mortgage (or an amendment of such mortgage, if one is already
         filed in the county in question) securing that guarantee.

         Section 2.3. Confidentiality. The parties agree on a reasonable efforts
basis to keep the intended use of each site for Gaming confidential until the
Gaming Site Option or the Gaming Site Purchase Agreement has been executed and
delivered by all parties thereto.

         Section 2.4. Assignment of Other Options. Lakes shall at the Band's
sole and absolute discretion assign or cause to be assigned to the Band or the
Band Designee any or all options (other than the Gaming Site Option) it, or any
other nominee, Insider or agent of Lakes may have on, or other interests in, the
following properties: (a) all lands acquired by Lakes or any agent or Insider of
Lakes relating to the development of the Facility and related amenities, and (b)
any other land located within the 20-mile radius described in ss. 10.6 below,
unless the Band consents in writing to their retention of specified options or
interests for specified purposes. Any such consent given by the Band shall be
irrevocable as to the specified property and purposes. Any such assignments
shall be without warranty or other recourse. Option payments or acquisition
payments made by Lakes or Lakes' other nominees or agents prior to such
assignment shall be advances under the Non-Gaming Land Acquisition Line of
Credit and repayable in accordance with its terms.

         Section 2.5. Selection of Non-Gaming Lands. As soon as reasonably
possible after the date of this Agreement, the Pokagon Council shall select the
Non-Gaming Lands. The Band shall have sole discretion over the selection and
terms of acquisition of the Non-Gaming Lands.

         Section 2.6. Closing on Non-Gaming Lands; Funding. The Band or the Band
Designee shall thereafter proceed to purchase the Non-Gaming Lands. Such
purchase shall occur on or immediately following NIGC Approval; as may be
required to avoid expiration of options or deadlines set in purchase agreements,
as they may be extended with the consent of the owners of the proposed
Non-Gaming Lands; or as otherwise agreed by the parties. After Ratification
Lakes shall advance funds in such amount or amounts as shall be needed to option
and/or acquire the Non-Gaming Lands, including without limitation all related
fees and transfer taxes, provided that the total amount Lakes shall be required
to advance shall not exceed $15,000,000. All amounts so advanced by Lakes shall
be advanced under the Non-Gaming Land Acquisition Line of Credit, which shall be
Limited Recourse, shall bear interest at the Band Interest Rate, and shall be
repayable (except for the Second Tranche - Non-Gaming) in 60 equal monthly
instalments of principal and interest

<PAGE>   23

commencing on the 15th day of the month after the month in which the
Commencement Date occurs. The Second Tranche - Non-Gaming shall be repaid as
provided in ss. 9.2.1(iii) below.

         2.6.1 Funding where Non-Gaming Land Acquired by Band Designee. If the
         Band opts to have the Band Designee enter into options or purchase
         agreements for Non- Gaming Lands, or acquire any of the Non-Gaming
         Lands, the cost of obtaining such options and agreements, and of
         closing under such options and agreements, including all related fees,
         commissions and expenses, shall be advanced by Lakes to the Band under
         the Non-Gaming Land Acquisition Line of Credit, through a designee
         other than Great Lakes, which designee shall be the nominee of and
         agent for Lakes. The Band shall in turn advance or contribute such
         amounts to or for the benefit of the Band Designee. The Band Designee
         shall execute and deliver to Lakes the Band Designee Guarantee. The
         Band Designee shall also execute and deliver to Lakes' nominee a Band
         Designee Mortgage securing that guarantee, or an amendment to such
         mortgage, upon each closing on the Band Designee's acquisition of any
         such real property. Lakes's Designee shall act solely as agent and
         nominee for Lakes in advancing funds under the Non-Gaming Land
         Acquisition Line of Credit and holding the Band Designee Mortgage, and
         shall not have any independent capacity; shall be subject to all claims
         and defenses of the Band and the Band Designee against Lakes, to the
         same extent as if the property in question had been acquired by the
         Band and mortgaged by the Band to Lakes; and shall be subject to the
         arbitration, limited waiver of immunity, Limited Recourse and other
         provisions of Article 14 of the Development Agreement. Lakes' designee
         shall only be entitled to enforce the Band Designee Mortgage against
         the Band Designee to the extent that, and in the same manner as, Lakes
         would be entitled to enforce a Band Mortgage against the Band. Any
         Lakes' designee shall execute and deliver to the Band an agency
         agreement reasonably acceptable to the Band and Lakes.

         Section 2.7. Mortgages Prior to Transfer into Trust. Prior to transfer
of the Gaming Site or Non-Gaming Lands into trust, amounts advanced by Lakes
under the Lakes Note and under the Non-Gaming Land Acquisition Line of Credit
shall be secured by a Band Mortgage or Band Designee Mortgage on all such
properties. Lakes and Great Lakes shall release such mortgages upon transfer of
the respective lands subject to such mortgages into trust, or as otherwise
provided in this Agreement.

                                    ARTICLE 3
                               CONSTRUCTION PHASES

<PAGE>   24

         Section 3.1.  Initial Phase   The Facility shall be constructed in two
phases, the Initial Phase and the Final Scope of Work. Lakes and the Band agree
to proceed with the Design Phase and the Construction Phase of the Initial Phase
in accordance with Articles 4 and 5, and to equip the Initial Phase of the
Facility in accordance with Article 6. The intent of the parties is to take all
steps necessary in accordance with Articles 4 and 5 to permit the Band to
commence construction of the Initial Phase immediately upon the taking into
trust of the Gaming Site and receipt of NIGC Approval, and to complete
construction of the Initial Phase, equip the Initial Phase of the Facility and
commence Gaming as soon as reasonably practicable thereafter.

         Section 3.2. Final Scope of Work. No later than eighteen months after
the Commencement Date, Lakes shall submit to the Band a proposed Preliminary
Development Budget, plans and specifications for the Final Scope of Work. Upon
approval of such budget, plans and specifications, Lakes and the Band shall
proceed in accordance with Articles 4, 5 and 6 to design, construct and equip
the Facility in accordance with the Final Scope of Work in a timely manner so as
to permit opening of the Facility expansion no later than three years after the
Commencement Date.

         Section 3.3. Modification of Final Scope of Work. Notwithstanding any
provision of this Article, the Final Scope of Work may be reduced as follows:
The Band and Lakes may at any time notify the other party that it believes that
unanticipated material adverse changes in local gaming market conditions (not
including changed economic conditions, whether locally or in the economy
generally) make construction of the Facility to the Final Scope of Work not
economically feasible. In that event both parties shall negotiate in good faith
to determine what adjustments, if any, in the Final Scope of Work are
appropriate in light of the changed local gaming market conditions; provided
that such adjustments shall not result in a Facility smaller than the Initial
Phase. The Band and Great Lakes shall mutually agree upon the final budget,
plans and specifications for the Final Scope of Work.

         Section 3.4. Bank Loans and Equipment Loans. Any references in Articles
4, 5 and 6 to the Bank Loan, the Equipment Loan or the Bank Closing shall refer
to such loans or closings as they pertain to the financing of the Initial Phase
or the expansion to the Final Scope of Work, as appropriate.

                                    ARTICLE 4
                                  DESIGN PHASE

         Section 4.1. Employment of Architect. Lakes shall recommend to the Band
a minimum of three duly licensed architects, who shall be familiar with the

<PAGE>   25

design of gaming facilities, for interview by the Pokagon Council, and the Band
shall select an architect from the group or, if none of the first group is found
acceptable to the Band, groups recommended by Lakes. The Band shall employ such
architect (the "Architect") for the purpose of performing certain services in
connection with the design and construction of the Facility, including site
development. The Band's agreement with the Architect shall be in the form of a
contract (the "Design Agreement") approved by Lakes and the Pokagon Council. The
scope of the project contemplated by this Agreement (the "Project") shall be
stated and established in the Design Agreement and shall be subject to the
mutual approval of the parties, but shall incorporate at a minimum the Initial
Phase and the Final Scope of Work (subject to the provisions of ss. 3.3). The
scope of design shall not include, but the design shall facilitate, the
possibility of the Band later designing and constructing phased expansions of
the hotel, theme retail space, golf course and other amenities. The Design
Agreement shall also provide for and establish appropriate design packages
("Design Packages"), each pertaining to a discrete portion or phase of the
Project. The Design Agreement shall allow Lakes the right and responsibility to
supervise, direct, control and administer the duties, activities and functions
of the Architect and to efficiently carry out its covenants and obligations
under this Agreement; but the Design Agreement shall provide that the Architect
will consult closely with the Band and the Band's advisers, and that all design
elements shall be subject to review and approval by the Band.

         Section 4.2. Design and Construction Budgets. Lakes, with the
assistance and input of the Architect and subject to the approval of the Pokagon
Council, shall establish a preliminary Development Budget (the "Preliminary
Development Budget") for designing, constructing, furnishing and equipping the
Facility and related costs and Development Expenditures. The Preliminary
Development Budget, as approved by the Pokagon Council and as it may be amended
with the approval of the Pokagon Council, is referred to as the "Approved
Development Budget." The Approved Development Budget shall reflect the Initial
Phase and, as to the expansion to include the Final Scope of Work, the Final
Scope of Work (subject to revision as provided in ss. 3.3), as well as any other
planned phasing. Lakes may, after notice to and approval by the Pokagon Council,
revise the aggregate Approved Development Budget from time to time as necessary
or appropriate to reflect any unpredicted changes, variables or events or to
include additional and unanticipated Project costs. Lakes may, at is sole
discretion after notice to and approval by the Business Board, reallocate part
or all of the amount budgeted with respect to any line item to another line item
and to make such other modifications to the Approved Development Budget as Lakes
deems necessary or appropriate, provided that: (i) the cumulative modifications
of the Approved Development Budget for all Design Packages shall not, without
Lakes's prior approval and the Pokagon Council's prior approval, exceed the
aggregate Approved Development Budget, and (ii) any modifications shall not
otherwise

<PAGE>   26

conflict with the terms of this Agreement. Approved Development Budget
adjustments which otherwise vary from the terms of the Agreement, shall, in
addition to requiring Lakes's approval, require the approval of the Pokagon
Council. The Band acknowledges that the Approved Development Budget is intended
only to be a reasonable estimate of Project costs, subject, however, to the
provisions of ss. 5.8 with regard to cost overruns.

         Section 4.3.  Gaming Regulatory Authority Expenses. The Approved
Development Budget shall include such amounts as the Band determines, after
consultation with Lakes, are reasonable and necessary to assure that the GRA is
able to fulfill its regulatory role in a manner that does not slow the opening
of the Facility; provided that the cost of final preparation and approval of the
Gaming Ordinance shall not exceed $20,000.

         Section 4.4   [INTENTIONALLY DELETED].

         Section 4.5. Concept Design and Engineering. Lakes, after consultation
with the Business Board and the Architect, shall prepare for the review and
approval of the Pokagon Council, a statement of requirements for the Facility,
if any, including, but not limited to, planned phasing, if any, a program of
preliminary objectives, schedule requirements, design criteria, including
assumptions regarding HVAC demands, space requirements and relationships,
special equipment and site requirements.

         Section 4.6.  Preliminary Program Evaluation. Lakes shall prepare for
review by the Business Board and approval of the Pokagon Council, a preliminary
evaluation of the proposed Project including, but not limited to, planned
phasing, if any, schedule, Development Budget requirements, and alternative
approaches to Project design and construction. Based upon the agreed-upon
schedule, Development Budget requirements and design, the Architect shall
prepare schematic design documents consisting of drawings and other documents
illustrating the scale and relationship of the Facility and any other Enterprise
components, as well as a preliminary estimate of Enterprise costs based upon the
proposed area, size and scope of the Enterprise.

         Section 4.7.  Design Development. After review by the Business Board
and upon final approval of the schematic design documents by the Pokagon Council
and Lakes, the Architect shall prepare design development documents consisting
of drawings and other documents to fix and describe the size and character of
the Project as to architectural, structural, mechanical and electrical systems,
materials and such other elements and/or Design Packages as may be appropriate.
Further, the Architect shall advise Lakes with respect to, and update, any
Development Budget estimates.

<PAGE>   27
Lakes shall submit to the Pokagon Council, for its review and approval,
finalized versions of the design development documents prepared by the Architect
and agreed to by Lakes.

         Section 4.8. Plans and Specifications. Based upon the approved design
development documents and any further adjustments in the scope and quality of
the Project or in the Development Budget, the Architect shall prepare for
approval by Lakes and the Business Board construction documents consisting of
preliminary drawings and specifications setting forth the general requirements
for construction of the Project. The Architect shall proceed with completion of
detailed plans and specifications (the "Plans and Specifications") as they
relate to construction of portions of the Facility in the order such portions
are to be completed or in the order required for sequential completion, and
shall proceed with completion of all Plans and Specifications as soon as
reasonably possible given construction scheduling and the intended progress of
Project work. The Architect shall advise the Business Board of any adjustments
to previous Development Budget estimates. The Plans and Specifications shall be
designed to accommodate the addition of further amenities, including without
limitation a hotel, parking garage and bingo/multi-purpose entertainment hall.
As portions of the detailed Plans and Specifications are completed for segments
of the Project, the Architect shall be required to submit duplicate copies of
those portions of the Plans and Specifications to Lakes and to the Business
Board (for approval prior to release of such documents to prospective bidders
for bidding and prior to commencement of construction of such portions) and to
the Pokagon Council (for information).

         Section 4.9. Compliance with Construction Standards, Environmental Laws
and Regulations. The Facility shall be designed and constructed so as to
adequately protect the environment and the public health and safety. The design,
construction and maintenance of the Facility shall, except to the extent a
particular requirement or requirements may be waived in writing by the Pokagon
Council, meet or exceed all reasonable minimum standards pertaining to the Band
and national, State and local building codes, fire codes and safety and traffic
requirements (but excluding planning, zoning and Gaming Site use laws,
ordinances, regulations and requirements), which would be imposed on the
Enterprise by existing State or Federal statutes or regulations which would be
applicable if the Facility were located outside of the jurisdictional boundaries
of the Band, even though those requirements may not apply within the Band's
jurisdictional boundaries. To the extent that the Band has adopted or may in the
future adopt more stringent requirements, those requirements shall govern.
Nothing in this subsection shall grant to the State or any political subdivision
thereof any jurisdiction (including but not limited to, jurisdiction regarding
zoning or Gaming Site use) over the Facility or Enterprise or its development,
management and operation.

<PAGE>   28

         Section 4.10. Advance of Funds for Design Work. Notwithstanding any
lack of approval of the Management Agreement or this Agreement by the NIGC,
Lakes shall advance such funds as are reasonably necessary to proceed prior to
Bank Closing with site and facility planning, architectural renderings and
plans, including payments to the Architect pursuant to the Design Agreement,
engineering and environmental services, working drawings and construction
contract bidding documents. All amounts so advanced by Lakes prior to NIGC
Approval and Bank Closing shall be a part of the development cost of the
Enterprise and shall be advanced under the Lakes Note as part of the Lakes
Development Loan.

                                    ARTICLE 5
                               CONSTRUCTION PHASE

         Section 5.1. Selection of Contractor or Construction Lakes. Lakes
shall, in consultation with the Architect and the Business Board, initiate a
pre-bid selection process in order to pre-qualify prospective general
contractors and/or construction management in connection with the construction
of the Facility. Lakes shall submit the list of pre-qualified general
contractors and/or construction Lakes to the Pokagon Council, together with
Lakes's recommendations, for the Pokagon Council's review, comment and approval.
Special consideration shall be given in the selection of contractors and/or
construction managers to companies with a proven history of effective employment
of Native American and local subcontractors.

         Section 5.2. Vendor Preferences. In entering contracts for the supply
of goods and services for the Enterprise, including the selection of contractors
and/or construction managers, subcontractors and suppliers, Lakes shall give
preference to qualified members of the Band, their spouses and children, and
qualified business entities as to which the Band certifies that a member is the
real party in interest, provided their bids are reasonably competitive.
"Qualified" shall mean a member of the Band, a member's spouse or children, or a
business entity certified by the Band to be controlled by members of the Band,
who or which is able to provide services at reasonably competitive prices, has
demonstrated skills and abilities to perform the tasks to be undertaken in an
acceptable manner, in Lakes's opinion, and can meet the reasonable bonding
requirements of Lakes. Lakes shall provide written notice to the Band in advance
of all such contracting, subcontracting and construction opportunities. The Band
reserves the right to require use of union labor on some or all contracts,
subject to review with the Lakes of any related budgetary impact.

         Section 5.3. Proposal Review. Subsequent to the pre-qualification of
prospective contractors and/or construction managers, Lakes shall conduct a
review

<PAGE>   29

of responsive proposals for the construction of the Project, and Lakes shall
recommend to the Band a well-qualified construction manager, contractor and/or
contractors. The recommended contractor, contractors and/or construction manager
shall be subject to the approval of the Pokagon Council, shall be properly
licensed in the State of Michigan, and shall be capable of furnishing a payment
and performance bond satisfactory to the Business Board to cover the
construction for which the contractor, contractors and/or construction manager
may be retained.

         Section 5.4. Contracts. The Band shall enter into a construction
management agreement and/or construction contract or contracts (the
"Construction Documents") with the parties selected and approved in the form
negotiated by Lakes and approved by the Business Board for each Construction
Document. The Construction Documents shall provide that work shall begin only
after NIGC Approval, and the Construction Documents may provide that they shall
be canceled by either party if NIGC Approval has not occurred by a specified
fixed calendar date. The selected contractor, construction manager and/or other
contracting parties shall be compensated solely from the proceeds of the Lakes
Development Loan and the Bank Development Loan, subject to, and in accordance
with the terms, conditions and provisions of the Construction Documents and the
respective Loan Agreements.

         Section 5.5. Construction Document Provisions. The Construction
Documents shall (i) require the successful construction manager or general
contractor and all contractors to be responsible for providing all materials,
equipment and labor necessary to construct and equip the Project as necessary
including site development; (ii) shall include appropriate provisions assuring
non-payment of Michigan sales and use tax for goods and materials in the Project
(to the extent said exemption is available for the Project); and (iii) require
said construction manager or general contractor and all contractors to construct
the Project in accordance with the Plans and Specifications, including any
changes or modifications thereto approved by the Business Board. The Band agrees
to indemnify Lakes against loss or liability caused by any written direction by
the Pokagon Council not to collect or remit Michigan sales tax. The Construction
Documents will provide for insurance conforming to the applicable insurance
requirements of the Management Agreement, appropriate lien waivers, and for
construction schedules by which milestones, progress payments and late
penalties, if any, may be calculated.

         Section 5.6. Construction Administration. The Construction Documents
shall provide that Lakes shall be responsible for all construction
administration during the construction phase of the Project. Lakes shall act as
the Band's designated representative and shall have full power and complete
authority to act on behalf of the Band in connection with the Construction
Documents. To the extent allowed by the Design Agreement and the Construction
Documents, Lakes shall have control and

<PAGE>   30

charge of any persons performing work on the Project site, and shall interpret
and decide on matters concerning the performance of any requirements of the
Construction Documents. Lakes shall have the authority to reject work which does
not conform to the Construction Documents. Lakes may conduct inspections to
determine the date or dates of substantial completion and the Completion Date.
Lakes shall observe and evaluate or authorize the observation and evaluation of
Project work performed, review or authorize review of applications for payment
for submission to the Band and review or authorize review and certification of
the amounts due the contractors and/or construction Lakes.

         Section 5.7. Construction Commencement and Completion. The Construction
Documents shall contain such provisions for the protection of the Band and Lakes
as the Band and Lakes shall deem appropriate; shall provide that the
construction of the Initial Phase of the Project shall commence on NIGC
Approval, following and subject to the granting of all approvals necessary to
commence construction; and shall also provide that any contractor shall exert
its best efforts to complete construction within such time as the Band and Lakes
agree following the commencement of construction. If the Band decides to proceed
with an expansion to the Final Scope of Work, Lakes and the Band shall proceed
in good faith with construction of a permanent Facility in accordance with the
Final Scope of Work, as modified under ss. 3.3, with such construction to be
completed no later than three years after the Commencement Date unless otherwise
agreed by the Band. All contractors shall, at a minimum, warrant their
respective portions of the work to be performed to be free of defects for at
least one year after the Completion Date of the Initial Phase and Final Scope of
Work, respectively.

         Section 5.8. Determination of Approved Construction Costs; Cost
Overruns. Promptly upon the Band's execution of the Construction Documents, the
Architect shall submit a final estimate of Construction Costs, which estimate
shall be subject to the reasonable approval of Lakes and the Pokagon Council.
This estimate of Construction Costs, as so approved, is referred to as "Approved
Construction Costs." Lakes shall pay, without repayment from the Enterprise or
recourse to the Band, Construction Costs of the Initial Phase to the extent they
exceed the lesser of (a) such Approved Construction Costs of the Initial Phase
(including the approved contingency reserve), as such costs may change because
of change orders approved by the Band and Lakes or amendments to the Approved
Development Budget approved by the Band and Lakes, or (b) $100,000,000, or such
other amount as the Pokagon Council and Lakes may agree; in each case except
insofar as such overruns are caused by Force Majeure or by acts or omissions of
the Band.

                                    ARTICLE 6

<PAGE>   31

                            FURNISHINGS AND EQUIPMENT

         Section 6.1. Selection of Furnishings and Equipment. Lakes shall submit
to the Business Board, for its review and approval, the specifications for
Furnishings and Equipment. Thereafter, Lakes shall select and procure vendors
for purchase by the Band of Furnishings and Equipment required to operate the
Enterprise in conformity with such specifications. The cost of Furnishings and
Equipment shall be financed through the Equipment Loan. Alternatively, in the
sole discretion of the Band, Lakes may arrange for the procurement of
Furnishings and Equipment on lease terms consistent with the terms provided
below as to the Equipment Loan, with such changes as may be approved by the
Business Board. Any commitments for the procurement of Furnishings and Equipment
shall, however, become binding on the Band only upon later of (a) NIGC Approval
or (b) the receipt by Band of a commitment for the Equipment Loan consistent
with the terms of this Agreement.

                                    ARTICLE 7
                                      TERM

         Section 7.1. Term. This Agreement shall enter into and remain in full
force and effect from the date of execution hereof until, unless earlier
terminated in accordance with its terms, the later of:

                  (a) seven years from the Commencement Date; or

                  (b) the date on which all obligations owed to Lakes by the
         Band pursuant to this Agreement and any related notes have been
         satisfied in full or otherwise discharged.

                                    ARTICLE 8
                        PAYMENTS AND COMMITMENTS BY LAKES
                     BEFORE APPROVAL OF MANAGEMENT AGREEMENT

         Section 8.1. Fees Payable By Lakes to the Band. Lakes will pay the
following fees and advances to the Band:

                  (a) Initial Fee. Lakes has paid the Band a non-refundable fee
         of $150,000 on execution of Term Sheet, the receipt of which is hereby
         acknowledged by the Band.

                  (b) Signing Fee. Lakes will pay the Band a non-refundable
         signing
<PAGE>   32

         fee of $1,000,000 (the "Signing Fee") which shall be paid to the Band
         as follows: $100,000 upon execution and delivery of the Management
         Agreement and this Agreement and $900,000 upon receipt of written
         notice of Ratification. Use and disbursement of Signing Fee monies,
         once received by the Band, shall be at the sole discretion of the Band,
         and Lakes shall have no responsibility for such funds after receipt
         thereof by the Band.

                  (c) Monthly Payments. Lakes will advance $125,000 to the Band
         (the "Monthly Payments") on receipt of notice of Ratification, and
         thereafter on the 15th day of each month, beginning in the month
         following the month in which Ratification occurs, and continuing until
         the date on which one of the following, whichever is earlier, has
         occurred:

                           (i)      the Commencement Date; or

                           (ii)     this Agreement and the Management Agreement
                                    have been terminated in accordance with
                                    their terms, and all related payments have
                                    been made; or

                           (iii)    five years after the Ratification of this
                                    Agreement.

Use and disbursement of the Monthly Payments, once received by the Band, shall
be at the sole discretion of the Band, and Lakes shall have no responsibility
for such funds after receipt thereof by the Band. All Monthly Payments shall
constitute advances under the Transition Loan pursuant to Section 8.3 of this
Agreement and shall be repayable as provided in that section.

         Section 8.2. Deposit into the Account. Upon execution of the Agreements
Lakes shall deposit $20,900,000 into the Account, subject to the Security
Agreement and the Control Agreement. Lakes shall also deposit such further sums
from time to time as shall be necessary to maintain a minimum balance in the
Account of at least $2,000,000 at all times prior to the Commencement Date;
provided that Lakes shall not be required to make aggregate deposits that exceed
the total amount of fees, loans and other payments to be made by it to or for
the account of the Band under this Agreement. The Account shall:

                  (i) serve as collateral for liquidated or other damages
         payable to the Band as provided in the Agreements; and

                  (ii)     serve as a funding mechanism as provided in the
                           Control Agreement, at Lakes's option, for Lakes's
                           obligation to make payments to the Band (other than
                           the Scholarship Program Fee)

<PAGE>   33

                           and to make advances under the Lakes Development
                           Loan.

Lakes agrees to execute and deliver the Security Agreement, the Control
Agreement, and such financing statements and other instruments as the Band
requests to perfect this security interest. Nothing in this section shall limit
Lakes's obligations to make payments as required under this Agreement or limit
the Band's remedies in the event of Lakes's default. Funds in the Account shall
be invested in such manner as Lakes reasonably deems prudent, provided that the
investment vehicles are liquid and do not include equities, swaps, derivatives,
commodities, or speculative instruments. Lakes shall inform the Band of the
nature and terms of the financial instruments in which the escrowed funds are
invested. Income from the Account shall be payable to Lakes prior to a Lakes
Event of Default. After a Lakes Event of Default, income shall be payable to the
Band to the extent needed to fund damages payable to the Band. The Bank shall be
entitled to reasonable compensation acceptable to the Band and Lakes and to
reimbursement of expenses, all of which shall be payable from the Account prior
to a Lakes Event of Default and, after such an Event of Default, by Lakes.
Payments into the Account shall not be deemed advances to the Band for purposes
of accrual of interest, and interest shall only accrue as to funds advanced by
Lakes through the Account upon disbursement from the Account.

         Section 8.3. Transition Loan. Upon Ratification, Lakes shall make a
loan to the Band for the purposes and as set forth in clause (c) of Section 8.1,
upon the terms set forth in the form of Transition Loan Note (the "Transition
Loan"). Each advance of funds to the Band by Lakes as part of the Transition
Loan shall be evidenced by the Transition Loan Note, duly authorized and
executed by the Band. All amounts advanced under the Transition Loan shall be
repayable to Lakes as unsecured Limited Recourse obligations of the Band; shall
not accrue interest for the first two years after execution of the Management
Agreement; shall, after the expiration of that two year period, bear interest at
the Band Interest Rate, as defined below; and shall be payable monthly in
arrears, beginning on the 15th day of the month after the Commencement Date, in
60 equal monthly payments of principal and interest. If the Bank Closing does
not occur, interest shall accrue on amounts advanced under the Transition Loan
at Wall Street Journal prime plus 1%, not to exceed 10%.

         Section 8.4. Advances on Lakes Development Loan. Lakes will provide the
following funds to the Band after Ratification but prior to NIGC Approval and
the Bank Closing as advances on the Lakes Development Loan, to be repaid with
interest in accordance with the terms provided in ss. 9.2.1:

                  (i) Gaming Site Acquisition Funds. After Ratification Lakes
         shall advance funds to permit the Band to enter into or perform in
         accordance with

<PAGE>   34

         one or more Options or Gaming Site Purchase Agreements, pursuant to
         Section 2.2.

                  (ii) Site Planning and Design Development. After Ratification
         Lakes shall advance funds reasonably necessary for the work described
         in Articles 3, 4 and 5 of this Agreement to be performed prior to NIGC
         Approval and the Bank Closing, pursuant to those Articles.

                  (iii) Advances to the Band for Gaming Ordinance. In order to
         enable the Band to fulfill its covenant set forth in Section 11.2(i)
         below to timely adopt a Gaming Ordinance and regulations (the "Gaming
         Ordinance"), Lakes shall advance to the Band after Ratification but
         prior to NIGC Approval the reasonable cost of preparation and approval
         of the Gaming Ordinance, not to exceed $20,000.

         Section 8.5. Non-Gaming Land Acquisition Line of Credit. Lakes will
provide advances to the Band under the Non-Gaming Land Acquisition Line of
Credit after Ratification but prior to the Commencement Date as provided in
Sections 2.6 and 2.6.1, upon the terms set forth in the form of Non-Gaming Land
Acquisition Line of Credit attached hereto as Exhibit C-1 (the "Non-Gaming Land
Acquisition Line of Credit"); except that Lakes' obligation to fund any portion
of the Second Tranche - Non-Gaming shall terminate on the earlier of (a) the
Bank Closing, if the Bank Development Loan has been increased from $28,000,000
to $36,000,000 plus accrued interest on amounts advanced on the Second Tranche
-- Lakes Note and Second Tranche -- Non-Gaming, and such increment is available
first to fund any undisbursed amounts of the Second Tranche -- Lakes Note and
the Second Tranche -- Non-Gaming, and second to repay Lakes amounts advanced by
Lakes under such Second Tranches; or (b) the Commencement Date. Each advance of
funds to the Band by Lakes as part of the Non-Gaming Land Acquisition Line of
Credit shall be evidenced by such Line of Credit, duly authorized and executed
by the Band and setting forth the applicable terms of this Agreement. All such
advances shall be repaid with interest on the same terms as provided in Article
9 with regard to the Lakes Development Loan, except that (a) funds advanced
under the Non-Gaming Land Acquisition Line of Credit shall at Lakes' request,
prior to transfer of land into trust, be guaranteed by the Band Designee and
secured by mortgages in favor of Lakes on any Non-Gaming Lands acquired by the
Band or the Band Designee; and (b) principal and interest on the Second Tranche
-- Non-Gaming shall be repaid either (I) at Bank Closing, to the extent the Bank
Development Loan has been increased from $28,000,000 to $36,000,000 plus accrued
interest on such Second Tranches, and such increment is available first to fund
any undisbursed amounts of the Second Tranche -- Lakes Note and the Second
Tranche -- Non-Gaming, or (II) from distributions made under ss. 5.5.5 and 5.5.6
of the Management Agreement and, if not
<PAGE>   35
sooner paid, shall be paid in full five years after the Commencement Date. The
Non-Gaming Land Acquisition Line of Credit shall otherwise be Limited Recourse.
All land and options acquired through the Non-Gaming Land Acquisition Line of
Credit shall be acquired in the name of the Band or the Band Designee.

                                    ARTICLE 9
                        PAYMENTS AND COMMITMENTS BY LAKES
                     AFTER APPROVAL OF MANAGEMENT AGREEMENT

         Section 9.1 Scholarship Program Fee. Upon NIGC Approval and transfer of
the Gaming Site into trust eligible for Gaming purposes, Lakes will pay the Band
a non-refundable fee of $1,000,000 (the "Scholarship Program Fee") into an
account established and controlled by the Band. The ultimate use and
disbursement of these funds shall be at the sole discretion of the Band, and
Lakes shall have no responsibility for such funds after payment to the Band.

         Section 9.2. Development and Equipment Loans. Lakes shall make
available to the Band the Lakes Development Loan and, upon NIGC Approval and
transfer of the Gaming Site into trust for the Band, shall assist the Band in
obtaining the Bank Development Loan and the Equipment Loan. Such Loans shall be
in an aggregate amount sufficient to, and shall be used to, pay for all
Development Expenditures for both the Initial Phase and the Final Scope of Work,
provided that (a) the aggregate amount of Development Expenditures for the
Initial Phase shall not exceed $100,0000, (b) the aggregate amount of additional
Development Expenditures for the Final Scope of Work shall not exceed
$100,000,000, and (c) the Bank Development Loan and Equipment Loan to fund the
Final Scope of Work need not be obtained at the same time as such Loans are
obtained for the Initial Phase. The Loans shall be in the following amounts and
on the following terms, unless otherwise agreed by the Band:

         Section 9.2.1.  Lakes Development Loan.

                           i.       Amount: $46,000,000 for the Initial Phase,
                                    comprised of (A) up to $11,000,000 for
                                    Gaming Site Acquisition Advances and (B)
                                    $35,000,000 for Development Expenditures
                                    other than acquisition of the Gaming Site.
                                    Lakes shall not be required to provide
                                    additional funding for the Initial Phase or
                                    for the expansion to the Final Scope of
                                    Work, except as provided under ss.ss.5.8,
                                    9.2.2(vi) and 9.2.3(x).
<PAGE>   36

                           ii.      Five year term, plus the period of
                                    development and construction; except that
                                    the Second Tranche -- Lakes Note shall be
                                    repaid from the proceeds of the Bank
                                    Development Loan at the Bank Closing on the
                                    Initial Phase, to the extent such proceeds
                                    exceed $28,000,000 and such increment is
                                    available first to repay the Second Tranche
                                    -- Lakes Note and the Second Tranche --
                                    Non-Gaming; and provided further that
                                    if the Bank Development Loan is less than
                                    the sum of (A) $28,000,000 plus (B) the
                                    amount of such Second Tranche, such Second
                                    Tranche shall be repaid as provided in ss.
                                    5.5.5 and 5.5.6 of the Management Agreement
                                    and, if not sooner paid, in full at the end
                                    of the Term.

                           iii.     A.       Interest at the Band Interest Rate
                                             shall accrue from date of advance
                                             until the Commencement Date;
                                             thereafter the Lakes Development
                                             Loan shall be payable as follows:
                                             (a) the amount outstanding under
                                             First Tranche -- Lakes Note as of
                                             such Commencement Date shall be
                                             repaid monthly in arrears,
                                             beginning on the 15th day of the
                                             month after the month in which the
                                             Commencement Date occurs, in equal
                                             monthly payments of principal and
                                             interest for the successive 60
                                             months of the term; and (b)
                                             principal and interest on Second
                                             Tranche -- Lakes Note shall be
                                             repaid either (I) at Bank Closing,
                                             to the extent the Bank Development
                                             Loan has been increased from
                                             $28,000,000 to $36,000,000 plus
                                             accrued interest on such Second
                                             Tranches, and such increment is
                                             available first to fund any
                                             undisbursed amounts of the Second
                                             Tranche -- Lakes Note and the
                                             Second Tranche -- Non-Gaming, or
                                             (II) from distributions made
                                             underss.ss.5.5.5 and 5.5.6 of the
                                             Management Agreement and, if not
                                             sooner paid, in full at the end of
                                             the Term.

                                    B.      If the Bank Closing does not occur,
                                            interest shall accrue on amounts
                                            advanced under the Lakes Development
                                            Loan at Wall Street Journal prime
                                            plus 1%, not to exceed 10%.

                           iv.      Repayment of the Lakes Development Loan
                                    shall be

<PAGE>   37

                                    subordinated to the Bank Development Loan,
                                    the Equipment Loan, as well as to any other
                                    third-party loans or equipment leases. Lakes
                                    agrees to execute and deliver subordination
                                    agreements evidencing such subordination in
                                    form reasonably acceptable to the Bank
                                    Lender, the Equipment Lender, or such other
                                    third-party lender or equipment lessor.

                           v.       The Band shall be entitled to draw on the
                                    Lakes Development Loan prior to NIGC
                                    Approval, as provided in Section 8.4.
                                    Advances under the Lakes Development Loan
                                    may be made through the Account.

                           vi.      Principal may be prepaid at any time without
                                    penalty.

                           vii.     Each advance of funds to the Band by Lakes
                                    under the Lakes Development Loan shall be
                                    made under a promissory note in the form of
                                    Lakes Note, duly authorized and executed by
                                    the Band.

                           viii.    All disbursements under the Lakes
                                    Development Loan shall be made through the
                                    Enterprise Account and the Disbursement
                                    Account, unless otherwise agreed by Lake and
                                    the Band in writing, and shall be on account
                                    of Development Expenditures in accordance
                                    with the Approved Development Budget, unless
                                    otherwise approved by the Business Board.
                                    Lakes shall provide the Band with a monthly
                                    accounting of all such disbursements, which
                                    accounting shall include a certification by
                                    Lakes that the disbursements shown on the
                                    accounting were for Development Expenditures
                                    in accordance with the Approved Development
                                    Budget, or were otherwise approved by an
                                    attached vote of the Business Board.

                           ix.      Lakes' obligation to fund any portion of the
                                    Second Tranche -- Lakes Note shall terminate
                                    on the earlier of (a) the Bank Closing, if
                                    the Bank Development Loan has been increased
                                    from $28,000,000 to $36,000,000 plus accrued
                                    interest on the Second Tranches, and such
                                    increment is available first to fund any
                                    undisbursed amounts of the Second Tranche --
                                    Lakes Note and the Second Tranche --
                                    Non-Gaming, and second to repay Lakes
                                    amounts

<PAGE>   38

                                    advanced by Lakes under such Second
                                    Tranches; or (b) the Commencement Date.

                           x.       The obligations of the Band to Lakes under
                                    the Lakes Note, the Non-Gaming Land
                                    Acquisition Line of Credit and the
                                    Transition Loan, and, under the Management
                                    Agreement, for Management Fees, shall be
                                    secured by a first security interest in the
                                    Dominion Account pursuant to the Dominion
                                    Agreement. Lake's security interest in the
                                    Dominion Account shall be subject to the
                                    following terms and conditions:

                                            A. Lakes may block payment to the
                                            Band of Monthly Distribution
                                            Payments and may foreclose on its
                                            security interest on the Dominion
                                            Account only on the occurrence of a
                                            Band Event of Default under the
                                            Development Agreement or the
                                            Management Agreement, if such
                                            default is not cured within any
                                            applicable cure period and, if
                                            arbitration is timely demanded,
                                            after entry of an arbitrator's award
                                            finding a Band Event of Default has
                                            occurred.

                                            B. Lake's security interest in the
                                            Dominion Account shall be
                                            subordinate to any security
                                            interests granted to the Bank Lender
                                            and the Equipment Lender, and shall
                                            be further subject to payment of (i)
                                            Operating Expenses; (ii) all Loans,
                                            as well any other third party loans
                                            to which Lakes has subordinated in
                                            writing; (iii) the Minimum
                                            Guaranteed Monthly Payment; (iv)
                                            deposits into the Capital
                                            Replacement Reserve pursuant to ss.
                                            4.15 of the Management Agreement;
                                            (v) maintenance of the Minimum
                                            Balance, and any other reserves
                                            approved by the Business Board with
                                            the written consent of Lakes; and
                                            (vi) claims of third parties granted
                                            priority over Lakes under the
                                            Agreements, if the events occur
                                            which trigger that priority (see,
                                            e.g. ss. 13.8 below [priority of
                                            distributions from insurance
                                            proceeds, if casualty loss and
                                            Facility not rebuilt]. Terms in this
                                            subsection not defined in this
                                            Agreement shall have the meanings
                                            set forth in the Management
                                            Agreement. Lakes shall promptly

<PAGE>   39

                                            execute and deliver subordination
                                            agreements pertaining to the
                                            Dominion Agreement with regard to
                                            any Bank Lender or Equipment Lender,
                                            which agreements shall contain
                                            provisions reasonably acceptable to
                                            Lakes and such lenders.

                                            C. The Dominion Agreement shall be
                                            amended at the Band's request (i) to
                                            conform with requests of the Bank
                                            Lender and the Equipment Lender, to
                                            the extent needed to obtain the Bank
                                            Development Loan or the Equipment
                                            Loan, and (ii) to the extent
                                            reasonably necessary to provide for
                                            subordinate security interests for
                                            loans for the benefit of the
                                            Enterprise as provided in ss.
                                            9.2.4(ii) below.

                                            D. The Dominion Agreement shall
                                            terminate as to Lakes, without
                                            prejudice to the Bank Lender, the
                                            Equipment Lender, or any other party
                                            that may have joined in, or be
                                            benefitted by, that agreement, and
                                            Lake's security interest in the
                                            Dominion Account shall be
                                            discharged, on termination of this
                                            Agreement pursuant to ss. 13.1,
                                            13.2, 13.4 (prior to the
                                            Commencement Date), 13.5, or 13.6
                                            hereof, or of the Management
                                            Agreement pursuant to ss. 12.1,
                                            12.2, 12.4 (prior to the
                                            Commencement Date), 12.5, 12.6
                                            (prior to the Commencement Date) or
                                            12.7 thereof. On a termination under
                                            ss. 13.4 (after the Commencement
                                            Date) or 13.7 of the Development
                                            Agreement or ss. 12.4 (after the
                                            Commencement Date), 12.6 or 12.8 of
                                            the Management Agreement after the
                                            Commencement Date, such security
                                            interest shall remain in effect
                                            until amounts due Lakes have been
                                            paid in accordance with the
                                            Agreements, and shall thereafter be
                                            promptly discharged; provided that
                                            Lakes' right to payment and security
                                            interest in the Dominion Account
                                            after such termination under or
                                            pursuant to the Agreements shall be
                                            subordinate to (I) fees or other
                                            amounts due to any manager of the
                                            Enterprise and (II) any amounts due
                                            to lenders or lessors under loans
                                            for the benefit of the Enterprise,
                                            whether existing as of the
                                            termination or made thereafter,
                                            including without limitation the
                                            Bank

<PAGE>   40

                                            Loan and the Equipment Loan. Lakes
                                            shall promptly execute and deliver
                                            subordination agreements pertaining
                                            to the Dominion Agreement with
                                            regard to any such manager, lender
                                            or lessor, which agreements shall
                                            contain provisions reasonably
                                            acceptable to Lakes and the manager,
                                            lenders or lessors.

                                            E. Nothing in the Dominion Agreement
                                            shall alter the damages due Lakes
                                            (I) on a Band Event of Default,
                                            which shall continue to be
                                            controlled by Article 14 of this
                                            Agreement and Article 13 of the
                                            Management Agreement, and the amount
                                            which Lakes is entitled to obtain on
                                            foreclosure on the Dominion Account
                                            would be controlled by those
                                            Articles; or (ii) under any other
                                            provision of the Agreements or any
                                            related agreement. Upon payment in
                                            full of all amounts due Lakes under
                                            the Agreements, the Lakes Note, the
                                            Non-Gaming Acquisition Line of
                                            Credit and the Transition Loan,
                                            Lakes shall promptly terminate the
                                            Dominion Agreement and release any
                                            related security interest.

         Section 9.2.2  Bank Development Loan.

                           i.       Amount:      I. For the Initial Phase, an
                                                 amount (not to exceed
                                                 $36,000,000 plus accrued
                                                 interest on the Second
                                                 Tranches) equal to the sum of
                                                 (A) an amount which, when added
                                                 to the Lakes Development Loan,
                                                 will finance all Development
                                                 Expenditures for the Initial
                                                 Phase (other than acquisition
                                                 of Furnishings and Equipment),
                                                 plus (B) the amount by which
                                                 Gaming Site Acquisition
                                                 Advances exceed $8,000,000;

                                                 II.  For the expansion of the
                                                      Facility to the Final
                                                      Scope of Work, an amount
                                                      which will finance all
                                                      Development Expenditures
                                                      associated with such
                                                      expansion (other than
                                                      acquisition of

<PAGE>   41

                                                      Furnishings and
                                                      Equipment); provided that
                                                      the principal amount of
                                                      such loan, capital lease
                                                      and/or indenture, when
                                                      added to the Equipment
                                                      Loan for that expansion,
                                                      shall not exceed
                                                      $100,000,000.

                           ii.      Lakes shall not be required to provide its
                                    guarantee of the Bank Development Loan or
                                    any other credit enhancements.

                           iii.     The loan commitment or undertaking shall not
                                    be assignable by either Lakes or the Band
                                    without the written consent of both parties.

                           iv.      Lakes may after the Commencement Date seek
                                    to refinance the Bank Development Loan, to
                                    the extent it is made by a third party
                                    lender with Lakes' guarantee. The Band
                                    agrees to cooperate with that refinancing,
                                    provided that (I) all costs and expenses of
                                    the refinancing are borne by Lakes, (II) the
                                    terms of the refinancing are in all respects
                                    no less favorable to the Band than provided
                                    in this Agreement and the Bank Loan
                                    Agreement (including, without limitation,
                                    interest rate, amortization, and recourse),
                                    and are otherwise reasonably acceptable to
                                    the Band; and (III) the refinanced debt
                                    shall not be payable on termination of the
                                    Agreements with Lakes, provided that
                                    management of the Enterprise after such
                                    termination shall be reasonably acceptable
                                    to the lender.

                           v.       Lakes shall proceed promptly and with due
                                    diligence after NIGC Approval to assist the
                                    Band in obtaining a bank commitment or firm
                                    underwriting commitment for the Bank
                                    Development Loan, and in closing on the Bank
                                    Development Loan promptly after obtaining
                                    such commitment.

                           vi.      If the Band, with Lakes' assistance, is
                                    unable to obtain, no later than the earlier
                                    of (I) 120 days after NIGC Approval or (II)
                                    the date by which additional funding is
                                    needed to keep development and construction
                                    of the Initial Phase on schedule without
                                    slowdown or abatement, a bank commitment or
                                    firm underwriting commitment to provide the
                                    Bank Development Loan on the terms set forth
                                    in this

<PAGE>   42

                                    Agreement at an interest rate equal to or
                                    less than 13% in an amount not less than
                                    $28,000,000 for the Initial Phase, Lakes
                                    agrees that it will loan the Band such
                                    amount at a 13% interest rate and otherwise
                                    on the same terms as provided in this
                                    Agreement with regard to the Lakes
                                    Development Loan. Lakes further agrees that,
                                    if the Band, with Lakes' assistance, is
                                    unable to obtain an additional or increased
                                    bank commitment or firm underwriting
                                    commitment, no later than two years after
                                    the Commencement Date (or such later date as
                                    may be approved by the Business Board), to
                                    provide the Bank Development
                                    Loan to finance expansion to the Final Scope
                                    of Work on the terms set forth in this
                                    Agreement at an interest rate equal to or
                                    less than 13%, in an amount equal to the
                                    Approved Development Budget for such
                                    expansion, Lakes will loan the amount of
                                    such Approved Development Budget to the Band
                                    at a 13% interest rate on the same terms as
                                    provided in this Agreement with regard to
                                    the Lakes Development Loan; provided that
                                    (A) the sum of such loan and the Equipment
                                    Loan for such expansion shall not exceed
                                    $100,000,000, and (B) the loan shall be
                                    amortized beginning fifteen days after the
                                    Completion Date of the Final Scope of Work
                                    in equal monthly payments over five years,
                                    except that all amounts outstanding under
                                    such loan shall be due and payable seven
                                    years after the Commencement Date or upon
                                    any earlier buy- out of the Management
                                    Agreement by the Band.

         Section 9.2.3  Equipment Loan.

                                           i-iii. The Equipment Loan for the
                                                  Initial Phase shall be in an
                                                  amount, not to exceed
                                                  $22,750,000, necessary to
                                                  equip the Initial Phase of
                                                  such Facility. The Equipment
                                                  Loan for the expansion to the
                                                  Final Scope of Work shall be
                                                  in the amount necessary to
                                                  equip the Facility to the
                                                  Final Scope of Work, provided
                                                  that the principal amount of
                                                  such Equipment Loan, when
                                                  added to the Bank Development
                                                  Loan for such expansion, shall
                                                  not exceed

<PAGE>   43

                                                  $100,000,000. Interest shall
                                                  accrue on the amount advanced
                                                  for the Initial Phase until
                                                  the Commencement Date;
                                                  thereafter such advance shall
                                                  be repayable monthly in
                                                  arrears, beginning on the 15th
                                                  day of the month after the
                                                  month in which the
                                                  Commencement Date occurs, in
                                                  equal monthly payments of
                                                  principal and interest for the
                                                  successive 48 months of the
                                                  term. The amount advanced to
                                                  equip the expansion to the
                                                  Final Scope of Work shall be
                                                  repaid in equal monthly
                                                  payments of principal and
                                                  interest for the successive 60
                                                  months after Completion Date
                                                  of such expansion, beginning
                                                  15 days after such Completion
                                                  Date; or on such other terms
                                                  as the Band may reasonably
                                                  approve.

                           iv.      Security: Purchase money security interest
                                    in Furnishings and Equipment purchased with
                                    the loan proceeds.

                           v.       Lakes shall not be required to provide its
                                    guarantee or any other credit enhancement.

                           vi.      The loan commitment shall not be assignable
                                    by either Lakes or the Band without the
                                    written consent of both parties.

                           vii.     Lakes may after the Commencement Date seek
                                    to refinance the Equipment Loan, to the
                                    extent it is made by a third party lender
                                    with Lakes' guarantee. The Band agrees to
                                    cooperate with that refinancing, provided
                                    that (a) all costs and expenses of the
                                    refinancing are borne by Lakes, (b) the
                                    terms of the refinancing are in all respects
                                    no less favorable to the Band than provided
                                    in this Agreement and the Equipment Loan
                                    Agreement (including, without limitation,
                                    interest rate, amortization, and recourse),
                                    and are otherwise reasonably acceptable to
                                    the Band; and (c) the refinanced debt shall
                                    not be payable on termination of

<PAGE>   44

                                    the Agreements with Lakes, provided that
                                    management of the Enterprise after such
                                    termination shall be reasonably acceptable
                                    to the lender.

viii.    At the Band's option the Equipment Loan may be structured into an
         equivalent equipment lease.

ix.      Lakes shall proceed promptly and with due diligence after NIGC Approval
         to assist the Band in obtaining a commitment for the Equipment Loan,
         and in closing on the Equipment Loan promptly after obtaining such
         commitment.

x.       If the Band, with Lakes' assitance, is unable to obtain, no later than
         the earlier of (I) 120 days after NIGC Approval or (II) the date by
         which additional funding is needed to keep development and construction
         of the Initial Phase on schedule without slowdown or abatement, a bank
         commitment or lessor commitment to provide the Equipment Loan in an
         amount (not to exceed $22,750,000) sufficient to finance acquisition of
         Furnishings and Equipment for the Initial Phase on the terms set forth
         in this Agreement at an interest rate equal to or less than 13% in an
         amount equal to the cost equipping the Initial Phase, Lakes agrees that
         it will loan the Band such amount at a 13% interest rate and otherwise
         on the same terms as provided in this Agreement with regard to the
         Equipment Loan. Lakes further agrees that, if the Band, with Lakes'
         assistance, is unable to obtain, no later than two years after the
         Commencement Date (or such later date as is approved by the Business
         Board), an additional or increased bank commitment or lessor commitment
         in an amount sufficient to finance acquisition of Furnishings and
         Equipment for the Final Scope of Work on the terms set forth in this
         Agreement at an interest rate equal to or less than 13%, Lakes will
         loan such amounts to the Band at a 13% interest rate on the same terms
         as provided in this Agreement with regard to the Equipment Loan;
         provided that (A) the sum of such loan and the Bank Development Loan
         (or the amount advanced by Lakes under ss. 9.2.2(vi)) for such
         expansion shall not exceed $100,000,000, and (B) the loan shall be
         amortized beginning on completion of the Final Scope of Work in equal
         monthly payments over four years, except that all amounts outstanding
         under such loan shall be due and payable seven years after the
         Commencement Date or upon any earlier buy- out of the Management
         Agreement by the Band.

Section 9.2.4 Terms Applicable to all Loans.

i.       (intentionally deleted)

ii.      Loan repayments shall be solely out of revenues of the Enterprise and
         shall be a Limited Recourse obligation of the Band. The Band agrees not
         to encumber any of

<PAGE>   45

         the assets of the Facility or the Enterprise without the written
         consent of Lakes and the holder of the Bank Development Loan, which
         consent will not be unreasonably withheld; except that the 44 Band
         shall have the right without the consent of Lakes and such holder to
         grant subordinate security interests in Enterprise revenues, as well as
         first priority security interest in any Enterprise assets other than
         Furnishings and Equipment purchased with the proceeds of the Equipment
         Loan, but only if such security interests are granted to secure loans
         made for the benefit of the Enterprise. The Band shall not lease the
         Facility or grant a leasehold mortgage on the Facility without Lakes'
         consent.

                  iii.     The Band shall enter into a limited, transactional
                           waiver of sovereign immunity and consent to
                           jurisdiction and arbitration as to the holder of the
                           Bank Note and the Equipment Note as provided in ss.
                           14.1 and 14.2 as to Lakes. Governing law shall be
                           Michigan law unless the Band otherwise agrees.

                  iv.      All other terms are subject to the Band's approval,
                           which approval shall not be unreasonably withheld.

                  v.       The selection of the lenders making the Bank
                           Development Loan, the Equipment Loan and all other
                           loans or leases relating to the Enterprise, and of
                           all underwriters and professionals relating to any
                           such transaction, shall be subject to the Band's
                           reasonable approval.

                  vi.      I.       Promptly and with due diligence after
                                    NIGC Approval and transfer of the Gaming
                                    Site into trust, but in no event later than
                                    90 days after such approval and transfer
                                    (unless otherwise agreed by the Band), Lakes
                                    shall (a) deliver to the Band a proposed
                                    commitment from a lender with regard to the
                                    Equipment Loan for Phase I, the terms of
                                    which shall be consistent with this
                                    Agreement and otherwise reasonably
                                    acceptable to the Band, and (b) increase the
                                    amount of the Escrow Account to $46 million
                                    (less amounts previously advanced under the
                                    Lakes Development Loan).

                           II.      No later than two years after the
                                    Commencement Date (unless otherwise agreed
                                    by the Business Board), Lakes shall (a)
                                    deliver to the Band a proposed commitment
                                    from an Equipment Lender with regard to the
                                    Equipment Loan

<PAGE>   46

                                    for the expansion of the Facility to the
                                    Final Scope of Work, the terms of which
                                    shall be consistent with this Agreement and
                                    otherwise reasonably acceptable to the Band.

vii.     I.       Promptly and with due diligence after NIGC Approval and
                  transfer of the Gaming Site into trust, but in no event later
                  than 90 days after such approval and transfer (unless
                  otherwise agreed by the Band), Lakes shall deliver to the Band
                  a proposed commitment or other firm undertaking from a lender
                  or underwriter with regard to the Bank Development Loan for
                  Phase I, the terms of which shall be consistent with this
                  Agreement and otherwise reasonably acceptable to the Band.

         II.      No later than two years after the Commencement Date (unless
                  otherwise agreed by the Business Board), Lakes shall deliver
                  to the Band a proposed commitment from a Lender with regard to
                  the Bank Development Loan for the expansion of the Facility to
                  the Final Scope of Work, the terms of which shall be
                  consistent with this Agreement and otherwise reasonably
                  acceptable to the Band.

viii.    The Band may, not earlier than two years after the Commencement Date,
         seek to refinance any Loan. Lakes agrees to cooperate with that
         refinancing, provided that (I) all costs and expenses of the
         refinancing shall, to the extent that interest expense is reduced by
         the refinancing, be an Operating Expense of the Facility, and shall
         otherwise be either borne by the Band or funded through the
         refinancing; and (II) Lakes is not required to guarantee any new
         facilities. Interest on any new facility shall be an Operating Expense
         of the Facility.

                  ix.      The Band consents to the gran by Lakes of other
                           guarantees pari passu to third parties, provided that
                           such other guarantees do not and shall not impair
                           Lakes's ability to perform under the Agreements.

                           x.       The amount of Loans may be increased by
                                    agreement of Lakes and the Band to the
                                    extent that the Approved Development Budget
                                    exceeds the funds available under the Loans
                                    as provided above.

                  xi.      Lakes's obligation to advance funds under the Lakes
                           Development Loan (except as provided in ss.8.4) and
                           to procure and close on the Bank Development Loan and
                           the Equipment Loan are conditioned upon NIGC
                           Approval. Nothing in this subsection affects or
                           impairs Lakes's

<PAGE>   47

                           liability for damages in the event of NIGC
                           Disapproval.

                  xii.     The Band recognizes that if Lakes guarantees the Bank
                           Development Loan or the Equipment Loan and pays in
                           full either loan pursuant to its guarantee, Lakes
                           shall be subrogated to the rights and remedies of the
                           lender of the loan so paid.

                                   ARTICLE 10
                          EXCLUSIVITY; NON-COMPETITION

Section 10.1. Exclusivity Regarding Facility. During the term of this Agreement,
Lakes shall have an exclusive relationship with the Band regarding the
development of the Facility.

Section 10.2. Exclusivity in Michigan. The Band shall deal exclusively with
Lakes for gaming development on Indian lands in Michigan from the date of
execution of this Agreement through the earlier of five years from the
Commencement Date or termination or buyout of the Agreements.

Section 10.3. Indiana Casino. Lakes recognizes that the Band intends to develop
a casino in Indiana, and that the Band shall have no obligations to Lakes in
that regard; except that the Band agrees that, if it decides to engage an
outside manager to develop or operate an Indiana casino, it shall discuss
contracting with Lakes for such development or operation for 45 days before
soliciting proposals from third parties as to management or development of that
casino. No obligation to enter into an agreement with Lakes shall be implied
from this undertaking, and the Band shall retain full and absolute discretion in
that regard.

Section 10.4. Non-Competition. Lakes agrees that for five years after execution
of the Agreements or the Term of the Agreements, whichever is greater, neither
it nor any present or future Insider will directly or indirectly in the
Restricted Territory develop, operate, consult with regard to, or be in any way
affiliated with any non-Indian gaming facility, any Class II or III Gaming
facility or any other kind of gaming, or any hotels or other amenities related
to such gaming or facility; except that Insiders shall not include (a) Kids
Quest, Grand Casinos, Inc., Park Place Entertainment or Innovative Gaming Corp.
by reason of (i) the service of (A) Lyle Berman as director or employee (without
management responsibility) of such entities, provided that Mr. Berman votes as
director against, or abstains from voting as to, any direct or indirect lobbying
by Park Place Entertainment against a compact between

<PAGE>   48

the Band and the State of Indiana or any direct or indirect opposition by Park
Place Entertainment to the Band's taking of land into trust for a casino to be
owned or operated by the Band in Indiana, and does not personally directly or
indirectly lobby against such a compact or oppose such taking into trust; (B)
Lyle Berman as employee of Park Place Entertainment with management
responsibility, so long as Park Place Entertainment does not (x) develop,
operate, consult with regard to, or be in any way affiliated with a Class III
Gaming facility in the Restricted Territory (excluding Ohio) that commences new
operations or expands its gaming capacity more than 50% after the execution of
the Agreements, or (y) directly or indirectly lobby against a compact between
the Band and the State of Indiana, or directly or indirectly oppose the taking
of land into trust by the Band for a casino to be owned or operated by the Band
in Indiana; or (C) Thomas Brosig as director or employee (without any management
responsibility for gaming in the Restricted Territory unless the Band consents)
in Park Place Entertainment, or (ii) any stock ownership of Lakes in such
entities; or (b) any entity because of the investment banking services of Ron
Kramer, a director of Lakes.

         Section 10.5. Assignment; Change of Control.

         a.       Lakes may not assign its rights under this Agreement without
                  the Band's prior written consent, except that Lakes may assign
                  its rights under such Agreement, but not its obligations, to a
                  wholly owned subsidiary.

         b.       The Band may not assign its rights under this Agreement;
                  except that the Band may, without the consent of Lakes, but
                  subject to approval by the Secretary of the Interior or the
                  Chairman of the NIGC or his authorized representative, if
                  required, assign this Agreement and the assets of the
                  Enterprise to a Corporate Commission or other instrumentality
                  of the Band organized to conduct the business of the Project
                  and the Enterprise for the Band that assumes all obligations
                  herein. No assignment authorized hereunder shall be effective
                  until all necessary governmental approvals have been obtained.
                  No such assignment shall relieve the Band of any obligation
                  hereunder, unless otherwise agreed by Lakes or the holder of
                  such obligation.

         c.       The Band shall be entitled to terminate the Agreements if
                  Lakes undergoes a Change of Control without the prior written
                  consent of the Band. The Band shall not be required to prepay
                  any amount advanced by Lakes or any third party in the event
                  of such termination, and such obligations shall remain payable
                  in accordance with their payment terms. Lakes agrees to notify
                  the Band in writing within 30 days after the occurrence of any
                  event described in Clauses I or II in the definition
<PAGE>   49
                  of Change of Control, and within 30 days of Lake's Knowledge
                  of any event described in Clauses III or IV of that
                  definition.

                  "Change of Control," for purposes of this provision, means (I)
                  the merger, consolidation or other business combination of
                  Lakes with, or acquisition of all or substantially all of the
                  assets of Lakes by, any other entity; (II) Lyle Berman's
                  ceasing to be either Chief Executive Officer or Chairman of
                  the Board of Lakes (other than on account of death or
                  disability, and except as provided at the end of this
                  definition); (III) the acquisition by any person or affiliated
                  group of persons not presently a shareholder of Lakes of
                  beneficial ownership of 30% or more in interest of the
                  outstanding voting stock of Lakes, as determined under 17 CFR
                  ss.ss. 240.13d-3 or 240.16a-1; or (IV) the acquisition by any
                  person or affiliated group of persons not presently a
                  shareholder of Lakes of beneficial ownership of 10% or more in
                  interest of the outstanding voting stock of Lakes, as
                  determined under 17 CFR ss.ss. 240.13d-3 or 240.16a-1, if a
                  majority of the Board of Directors of Lakes is replaced within
                  two years after such acquisition by directors not nominated
                  and approved by the Board of Directors.

                            Notwithstanding any other provision of this
                  definition, if the non-competition provisions of ss.
                  10.4(a)(i)(B) are breached, the following terms shall control:

                           (A)      Lakes shall notify the Band within 30 days
                                    of a breach of that subsection, and shall
                                    describe in reasonable detail the nature and
                                    circumstances of that breach.

                           (B)      The Band shall within 45 days of that
                                    notification inform Lakes if it will waive
                                    that breach.

                           (C)      If the Band states that it will not waive
                                    the breach, Lakes may within 30 days of the
                                    Band's notification inform the Band whether
                                    Mr. Berman will resign as officer and
                                    director of Lakes, and who Lakes proposes as
                                    Mr. Berman's successor as Chairman and/or
                                    Chief Executive Officer of Lakes. Lakes
                                    shall, in connection with that notification,
                                    provide the Band with a detailed description
                                    of the qualifications and affiliations of
                                    the proposed successor.

                           (D)      The Band shall then have 45 days to grant or
                                    withhold its

<PAGE>   50

                                    consent to that succession, which consent
                                    shall not be unreasonably withheld. If the
                                    Band so consents, Mr. Berman resigns and the
                                    named successor replaces Mr. Berman as
                                    Chairman and/or Chief Executive Officer, the
                                    breach under ss. 10.4(a)(i)(B) shall be
                                    deemed waived.

                           (E)      If the Band does not so consent and its
                                    denial of consent is not unreasonable, or if
                                    Mr. Berman does not resign and the named
                                    successor does not succeed him, Lakes may
                                    nominate another proposed successor within
                                    30 days, failing which Lakes shall be in
                                    default (subject to arbitration).

                           (F)      If Lakes does nominate another proposed
                                    successor, subsections (C) and (D) shall
                                    apply to the new nominee. If the Band does
                                    not consent to the new nominee and its
                                    denial of consent is not unreasonable, or if
                                    Mr. Berman does not resign and the new
                                    nominee does not succeed him, Lakes shall be
                                    in default (subject to arbitration).

              Section 10.6. Restrictions on Collateral Development. Lakes agrees
         that for five years after execution of the Agreements or the Term of
         the Agreements, whichever is greater, neither it nor any present or
         future Insider will directly or indirectly purchase any land or
         operate, manage, develop or have any direct or indirect interest in any
         commercial facilities or business venture located within 20 miles of
         the Facility without the prior written consent of the Band.

                                   ARTICLE 11
                   REPRESENTATIONS, WARRANTIES, AND COVENANTS

              Section 11.1. Representations and Warranties of the Band. The Band
         represents and warrants to Lakes as follows:

                   (i) The Band's execution, delivery and performance of this
              Agreement, the Lakes Note and all other instruments and agreements
              executed in connection with this Agreement have been properly
              authorized by the Band and do not require further Band approval.

                   (ii) This Agreement, the Lakes Note, the Transition Loan
              Note, the Non-Gaming Acquisition Line of Credit and the Control
              Agreement and the Security Agreement have been properly executed,
              and once approved in

<PAGE>   51

              accordance with Legal Requirements constitute the Band's legal,
              valid and binding obligations, enforceable against the Band in
              accordance with their terms.

                   (iii) There are no actions, suits or proceedings, pending or
              threatened, against or affecting the Band before any court or
              governmental agency, except as disclosed on Exhibit E.

              Section 11.2. Band Covenants. The Band covenants and agrees as
         follows:

                   (i) Promptly after the execution of this Agreement it will
              take the steps necessary to adopt and will adopt the Gaming
              Ordinance. The Gaming Ordinance will meet the requirements of IGRA
              and the applicable regulations under IGRA and be consistent with
              the provisions of this Agreement and the Management Agreement, and
              not adversely affect the rights of Lakes hereunder and thereunder.
              After adoption of the Gaming Ordinance the Band will establish a
              governmental authority to regulate gaming at the Gaming Site ("the
              Gaming Regulatory Authority" or "GRA"). The Band agrees to consult
              with Lakes concerning the terms of the Gaming Ordinance and any
              regulations adopted thereunder, but the final decision on those
              matters is in the Band's sole discretion.

                   (ii) After NIGC Approval the Band shall enter into the Bank
              Loan Agreement and the Equipment Loan Agreement and execute the
              Bank Note and the Equipment Note and related closing
              documentation, all subject to the terms provided in this Agreement
              and Lakes's performance of its obligations under this Agreement.

                   (iii) During the term of this Agreement and the Management
              Agreement, the Band shall enact no law impairing the obligations
              or contracts entered into in furtherance of the development,
              construction, operation and promotion of Gaming on the Gaming
              Site. Neither the Pokagon Council nor any committee, agency, board
              of any other official body, and no officer or official of the Band
              shall, by exercise of the police power or otherwise, act to
              modify, amend, or in any manner impair the obligations of
              contracts entered into by the Pokagon Council or the GRA or other
              parties in furtherance of the financing, development,
              construction, operation, or promotion of Gaming at the Gaming Site
              without the written consent of the non-tribal parties to such
              contracts. Any such action or attempted action shall be void ab
              initio.

                   (iv) The Band will waive sovereign immunity on the limited
              basis described in Article 14 with respect to the Loans, the
              Transition Loan and the

<PAGE>   52
              Non-Gaming Land Acquisition Line of Credit.

                   (v) This Agreement, the Management Agreement, the Lakes Note,
              the Transition Loan Note, the Non-Gaming Acquisition Line of
              Credit, the Control Agreement and the Security Agreement, and each
              other contract contemplated by this Agreement shall, once approved
              in accordance with Legal Requirements, be enforceable in
              accordance with their terms.

                   (vi) In its performance of this Agreement, the Band shall
              comply with all Legal Requirements.

                   (vii) The Band will not impose taxes on the revenues of the
              Facility or the management fee payable to Lakes, but reserves the
              right to otherwise impose usual and customary taxes and fees on
              transactions at or in connection with the Facility or on the
              Facilities's employees, officers, directors, vendors and patrons.
              The Band shall be specifically permitted to impose (i) charges,
              assessments, fines or fees imposed by governmental entities of the
              Band which are reasonably related to the cost of Tribal
              governmental regulation of public health, safety or welfare, or
              the integrity of Tribal gaming operations, and (ii) other taxes,
              charges, assessments or fees imposed against the Enterprise or
              property of the Enterprise, or sales, use, excise, hotel occupancy
              and other similar taxes (excluding taxes, charges, assessments or
              fees against real or personal property of the Facility or on
              gaming revenues or earnings) of such types and percentage amounts
              not to exceed those imposed by any state or local government
              within the Restricted Territory.

                   (viii) The Band shall not act in any way whatsoever, directly
              or indirectly, to cause this Agreement to be amended, modified,
              canceled, or terminated, except pursuant to its express terms or
              with the consent of Lakes.

              Section 11.3. Representations and Warranties of Lakes. Lakes
         represents and warrants to the Band as follows:

                   (i) Lakes's execution, delivery and performance of this
              Agreement and all other instruments and agreements executed in
              connection with this Agreement have been properly authorized by
              Lakes and do not require further approval.

                   (ii) This Agreement has been properly executed and
              constitutes Lakes's legal, valid and binding obligation,
              enforceable against Lakes in accordance with its terms.

                   (iii) There are no actions, suits or proceedings pending or
              threatened

<PAGE>   53
              against or affecting Lakes before any court or governmental agency
              that would in any material way affect Lakes's ability to perform
              this Agreement, other than litigation disclosed in filings by
              Lakes with the Securities and Exchange Commission. Lakes warrants
              that no litigation so disclosed in any material way affects or
              will affect Lakes' ability to perform under the Agreements.

              Section 11.4. Lakes Covenants. Lakes covenants and agrees as
         follows:

                   (i) Lakes shall comply with all Legal Requirements in its
              performance of the Agreements.

                   (ii) Lakes has and at all times during the Term shall have
              the financial capacity to pay to the Band all fees and payments
              and to make all advances and loans described in this Agreement.

                   (iii) Lakes shall not act in any way whatsoever, directly or
              indirectly, to cause this Agreement to be amended, modified,
              canceled, or terminated, except pursuant to its express terms or
              with the consent of the Band.

                   (iv) Lakes's Internal Expenses shall not be paid by the
              Enterprise from revenues of the Enterprise or the proceeds of any
              Loan, but may be paid by Lakes from Management Fees and loan
              repayments after they are received by Lakes. No officer or
              employee of Lakes shall receive a salary or other payment from the
              Facility.

                   (v) CRC shall not during the Term of the Management Agreement
              (a) be directly or indirectly affiliated with Lakes or the
              Facility, whether as joint venturer or otherwise, (b) be employed
              by Lakes or, to the knowledge of Lakes, any entity having any
              contractual relationship with Lakes, with regard to the Facility,
              or (c) directly or indirectly receive any payment or anything of
              value from Lakes from or out of the Management Fee or any other
              payment made to Lakes by the Band or the Facility. Lakes agrees to
              indemnify the Band and its members and hold them harmless against
              all loss, liability and expense relating to claims, of whatever
              kind or nature, of CRC against any one or more of them. The Band
              consents to the execution and delivery by Lakes of a certain
              Conditional Release and Termination Agreement between Lakes and
              CRC dated May 20, 1999, as amended by Amendment dated July, 1,
              1999, true copies of which are attached as Exhibit F, provided
              that CRC executes and delivers to the Band and its members a
              general release in the form attached as Exhibit G. Lakes warrants
              that it has no agreements or understandings with CRC in any way
              related to the Band or the Enterprise other than as set forth in
              Exhibit F. The Band further agrees that Lakes may hold stock of
              CRC as

<PAGE>   54
              collateral for a Lakes' guarantee of a loan to a third party,
              provided that on default it proceeds to liquidate such collateral
              in a reasonably prompt and orderly manner, and that Lyle Berman
              may continue to hold approximately 350,000 shares of CRC so long
              as he plays no role in the management of, and does not sit on, the
              board of directors of CRC.

                                   ARTICLE 12
                                EVENTS OF DEFAULT

              Section 12.1. Events of Default by the Band. Lakes shall not be
         obligated to pay any fees, provide the Bank Development Loan or the
         Equipment Loan, make any advance on the Lakes Development Loan or
         otherwise perform its obligations under or pursuant to this Agreement
         if a Band Event of Default, as defined below, has occurred and is
         continuing on the date such fee payment, loan advance or performance
         would otherwise be made. In addition, Lakes shall not be obligated to
         make any loan advance to the Band pursuant to this Agreement unless and
         until Lakes receives the duly authorized and executed Lakes Note. Each
         of the following shall be a "Band Event of Default":

                   (i) The Band shall fail to pay when due the Lakes Note, the
              Transition Loan Note, the Non-Gaming Acquisition Line of Credit or
              any other indebtedness to Lakes, and such payment default has
              continued for thirty (30) days after Lakes gives the Band notice
              thereof.

                   (ii) The Band shall commit a Material Breach of any of the
              Band's obligations under this Agreement, subject to the rights to
              cure provided in this Agreement.

                   (iii) Any of the representations and warranties made by the
              Band in ss. 11.1 of this Agreement were not true when made or
              would not be true if made on the date such performance would
              otherwise be due.

                   (iv) The Band violates the provisions of Article 10 of this
              Agreement.

                   (v) The Band commits any Material Breach of the Management
              Agreement which is not cured within any applicable cure period.

                   (vi) The Band, through a vote of its Council at which a
              quorum is present prior to NIGC Approval, either expressly (i)
              repudiates the Management Agreement or the Development Agreement,
              or (ii) authorizes the Band, prior to terminating the Agreements
              in accordance with their terms or

<PAGE>   55
              expiration of the Term, to enter into management or development
              agreements with a third party with regard to a Michigan casino.

         If any Band Event of Default occurs, Lakes may, upon written notice to
         Band, declare Lakes's commitment to make advances under this Agreement
         terminated and Lakes may exercise the rights and remedies available to
         Lakes provided in this Agreement; provided, however, that all such
         rights and remedies shall be Limited Recourse.

              Section 12.2. Events of Default by Lakes. The Band shall not be
         obligated to perform its obligations under or pursuant to this
         Agreement if a Lakes Event of Default, as defined below, has occurred
         or if any of the representations and warranties made by Lakes in this
         Agreement were not true when made or would not be true if made on the
         date such performance would otherwise be due. Each of the following
         shall be a "Lakes Event of Default":

                   (i) Any Monthly Payment is not paid within ten (10) days
              after its due date.

                   (ii) Lakes shall fail to make any other payments (whether of
              fees, advances or loans) required by this Agreement, and such
              failure shall continue for ten (10) days after the Band gives
              Lakes written notice thereof.

                   (iii) Lakes shall commit any other Material Breach any of
              Lakes's obligations under this Agreement.

                   (iii) Any representation or warranty that Lakes has made
              under this Agreement shall prove to have been untrue when made or
              would not be true if made on the date such performance would
              otherwise be due.

                   (iv) Lakes violates the provisions of Article 10 of this
              Agreement, subject to rights of notice and cure to the extent
              provided in that Article.

                   (v) Lakes commits any Material Breach of the Management
              Agreement which is not cured within any applicable cure period.

                   (vi) NIGC Disapproval occurs.

         If any Lakes Event of Default occurs, the Band may, upon written notice
         to Lakes, exercise the rights and remedies available to the Band
         provided in this Agreement.

              12.3 Material Breach; Right to Cure. Neither party may terminate
         this Agreement or recover damages on grounds of Material Breach unless
         it has provided

<PAGE>   56
         written notice to the other party of its intention to terminate this
         Agreement or seek damages or other remedies. During the 30 day period
         after the receipt of the notice to terminate (as to defaults which can
         be cured within 30 days) or the 90 day period after such receipt (as to
         defaults which cannot be cured within 30 days), whichever is
         applicable, either party may submit the matter to arbitration under the
         dispute resolution provisions of this Agreement set forth at Article
         14. The discontinuance or correction of a Material Breach shall
         constitute a cure thereof.

                                   ARTICLE 13
                                   TERMINATION

              Section 13.1. Voluntary Termination. This Agreement may be
         terminated by mutual written consent.

              Section 13.2. Termination if No NIGC Approval. The Band and Lakes
         may each unilaterally terminate the Agreements by written notice if
         NIGC Approval has not occurred within five years after Ratification.

              Section 13.3. Lakes Right to Terminate on Band Event of Default.
         Lakes shall be entitled to terminate the Agreements (i) upon a Band
         Event of Default or (ii) as specifically provided in the Agreements.

              Section 13.4. Band Right to Terminate on Lakes Event of Default.
         The Band shall be entitled to terminate the Agreements (i) upon a Lakes
         Event of Default or (ii) as specifically provided in the Agreements.

              Section 13.5. Band Right to Terminate for Material Adverse Change.
         Prior to the Commencement Date, the Band shall be entitled to terminate
         the Agreements in the event of a Material Adverse Change; provided that
         the following procedures shall apply:

         i.   Lakes shall notify the Band promptly in the event of any Material
              Adverse Change, and in any event within 30 days after it
              occurrence.

         ii.  Lakes shall send to the Band copies of all filings by Lakes with
              the Securities and Exchange Commission under Forms 8K, 10Q and
              10K; shall furnish the Band with copies of such other SE filings
              that the Band may request; and shall furnish the Band with such
              other information concerning a Material Adverse Change a the Band
              may reasonably request.

         iii. If the Band believes that a Material Adverse Change has occurred,
              the Band

<PAGE>   57
              shall so notify Lakes in writing and shall request specified
              further assurances of Lakes's continued ability to perform under
              the Agreements.

         iv.  Within thirty (30) days after that notification Lakes shall admit
              or deny the alleged Material Adverse Change, giving the specific
              basis for its response; shall state whether it agrees to provide
              the requested further assurances; if it agrees to provide the
              requested further assurances, shall tender its performance in that
              regard; and, if it admits a Material Adverse Change but disputes
              the requested further assurances, shall tender such further
              assurances as it deems sufficient to ensure its continued ability
              to perform under the Agreements.

         v.   If Lakes denies the Material Adverse Change or disputes that the
              requested further assurances are reasonably required to assure the
              Band of Lakes's continued ability to perform under the Agreements,
              those issues shall be submitted to arbitration. The arbitrator
              shall determine whether (A) a Material Adverse Change has
              occurred; (B) the requested further assurances are reasonably
              required to assure the Band of Lakes's continued ability to
              perform under the Agreements; and (C) if a Material Adverse Change
              has occurred but the requested further assurances are not
              reasonably required to so assure the Band, what further assurances
              must be provided by Lakes to reasonably assure the Band of Lakes's
              continued ability to perform under the Agreements. Any further
              assurances required under the arbitrator's award must be furnished
              by Lakes within thirty (30) days after entry of the award.

         vi.  If Lakes admits the Material Adverse Change but does not furnish
              further assurances, or if Lakes does not timely provide further
              assurances pursuant to an arbitrator's award, the Band may
              terminate the Agreements by written notice to Lakes.

         vii. Lakes and the Band agree that the continuing ability of Lakes to
              make the payments and advances provided under this Agreement, and
              to ensure the Band can obtain the Loans to develop, construct,
              equip and operate the Facility provided in this Agreement, is an
              essential part of the consideration for which the Band bargained
              in entering into the Agreements.

Section 13.6. Termination on Buyout. This Agreement shall terminate i the Band
         exercises its option to buy out the Management Agreement in accordance
         with its terms.

Section 13.7. Involuntary Termination Due to Changes in Legal Requirements. It
         is the understanding and intention of the parties that the development,
         construction and operation of the Enterprise shall conform to and
         comply with all Legal Requirements.

<PAGE>   58
         If during the term of this Agreement, the Enterprise or any material
         aspect of Gaming at the Gaming Site is determined by the Congress of
         the United States, Department of the Interior of the United States of
         America, the NIGC, or the judgment of a court of competent jurisdiction
         (after expiration of the time within which appeals must be filed or
         completion of appeals, if any) to be unlawful under federal law, the
         obligations of the parties hereto shall cease and the Agreements shall
         be of no further force and effect as of the date of such determination;
         subject, however, to the following provisions as to damages:

         i.   If the date of such determination is prior to the Commencement
              Date, Lakes shall be entitled to damages to the same extent as
              provided in ss. 14.4 with regard to failure to obtain NIGC
              Approval.

         ii.  If the date of such determination is after the Commencement Date:

                   (A) The Band shall retain all fees and Monthly Payments
              previously paid or advanced to it pursuant to this Agreement, as
              well as all Tribal Distributions and Non-Gaming Lands, the Gaming
              Site and any other property transferred into trust;

                   (B) Any money loaned to the Band by or guaranteed by Lakes,
              or owed to Lakes as subrogee (to the extent Lakes has paid under
              such guarantees) shall be repaid to Lakes or its Affiliates in
              accordance with the Limited Recourse terms of the Lakes Note, the
              Transition Loan Note, the Non-Gaming Acquisition Line of Credit
              and this Agreement; and

                   (C) The Band shall retain its interest in the title (and any
              lease) to all Enterprise assets, including the Gaming Site and any
              fixtures, supplies and equipment, subject to the purchase money
              security interest in equipment securing the Equipment Loan, Lakes'
              security interest in the Dominion Account (until all obligations
              of the Band to Lakes secured by that account are paid in full),
              and any other liens granted in accordance with the Development
              Agreement.

Section  13.8. Repair or Replacement. If the Facility is damaged, destroyed or
         condemned so that continued development, construction or operation of
         Gaming cannot be or can no longer be continued at the Facility, the
         Facility shall at the Band's option be reconstructed if the insurance
         or condemnation proceeds, together with any other funds available to
         the Band, are sufficient to restore or replace the Facility to a
         condition at least comparable to that before the casualty occurred or
         such other condition as Lakes and the Band may agree. If the insurance
         proceeds, together with other funds available to the Band, are not
         sufficient to so restore or replace the

<PAGE>   59
         Facility or are not used to repair the Facility, the Band shall, with
         the assistance of Lakes, adjust and settle any and all claims for such
         insurance proceeds or condemnation awards, and such proceeds or award
         and any undistributed Net Revenues pursuant to Article 5 of the
         Management Agreement shall be applied first, as to proceeds or awards
         relating to Furnishings and Equipment securing the Equipment Loan, to
         the amounts due under the Equipment Loan; second, to the amounts due
         under the Bank Development Loan; third, to any remaining balance under
         the Equipment Loan and to any other third party liabilities of the
         Enterprise; fourth, to the Lakes Development Loan; and fifth, to the
         Band. Any unpaid balance of the Lakes Development Loan, after
         application of such proceeds, shall be repaid as provided in ss. 14.4
         on failure to obtain NIGC Approval.

13.9     Upon termination of this Agreement any claim of Lakes against the ----
         Band, or of the Band against Lakes, shall be subject to their
         respective rights of recoupment and setoff, if any.

                                   ARTICLE 14
                     DISPUTE RESOLUTION; LIQUIDATED DAMAGES

Section 14.1. Band's Waiver of Sovereign Immunity and Consent to Suit The Band
         expressly waives its sovereign immunity from suit for the purpose of
         permitting or compelling arbitration as provided in this Article 14 and
         consents 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 Agreement, the Management Agreement, the Lakes
         Note, the Transition Loan Note, the Non-Gaming Acquisition Line of
         Credit, the Control Agreement, the Security Agreement, any mortgages
         granted to Manager securing the Lakes Note or the Non-Gaming Land
         Acquisition Line of Credit, the Dominion Agreement or other obligations
         between the parties. If the United States District Court lacks
         jurisdiction, the Band consents 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, including without limitation, repossessing or
         foreclosing on any real property not in trust and or on equipment
         subject to a security interest or on the Dominion Account, or otherwise
         giving effect to any judgment entered; provided, however, that
         liability of the Band under any judgment shall always be Limited
         Recourse, and in no instance shall any

<PAGE>   60
         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) below. 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 the Agreements. The Band agrees that
         service in hand or by certified mail, return receipt requested, shall
         be effective for all purposes under or relating to the Agreements if
         served on such agents.

Section 14.2. Arbitration. All disputes, controversies or claims arising out of
         or relating to this Agreement and the Lakes Note, the Transition Loan
         Note, the Non-Gaming Acquisition Line of Credit, the Control Agreement
         and the Security Agreement or other obligations between the parties
         shall be settled by binding arbitration in accordance with the
         Commercial Arbitration Rules of the American Arbitration Association in
         effect on the date demand for arbitration is made, and the Federal
         Arbitration Act. The parties agree that binding arbitration shall be
         the sole remedy as to all disputes arising out of this Agreement,
         except for disputes requiring injunctive or declaratory relief.

         (i) Choice of Law. In determining any matter the Arbitrator(s) shall
apply the terms of this Agreement, without adding to, modifying or changing the
terms in any respect, and shall apply Michigan law.

         (ii) Place of Hearing. All arbitration hearings shall be held at a
place designated by the arbitrator(s) in Kalamazoo, Michigan or at such other
place agreed to by the parties.

         (iii) Confidentiality. The parties and the arbitrator(s) shall maintain
strict confidentiality with respect to the arbitration.

Section  14.3. Limitation of Actions. The Band's waiver of immunit from suit is
         specifically limited to the following actions and judicial remedies:

         (i) Damages. The enforcement of an award of money and/or damages by
arbitration; provided that the award of any arbitrator and/or court must be
Limited Recourse, and no arbitrator or court shall have authority or
jurisdiction to order execution against any assets or revenues of the Band
except (A) undistributed or future Net Revenues of the Enterprise; (B) as to the
Equipment Loan, the Furnishings and Equipment securing that Loan; (C) as to the
Transition Loan and the Non-Gaming Acquisition Line of Credit, if the
Commencement Date does not occur, Subsequent Gaming Facility Revenues to the
extent provide in this Agreement; (D) as to the Lakes Note and the Non-Gaming
Acquisition Line of Credit, mortgages on the Gaming Site and Non-Gaming Lands
prior to their transfer into trust; and (E) after the Commencement Date occurs,
funds on deposit in the Dominion Account to the extent provided in ss. 9.2.1(x)
of this Agreement and the Dominion Agreement, or in any other dominion agreement
executed b the Band. In no

<PAGE>   61
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 this
subsection.

         (ii) Consents and Approvals. The enforcement of a determination by an
arbitrator that the Band's consent or approval has been unreasonably withheld
contrary to the terms of this Agreement.

         (iii) Injunctive Relief and Specific Performance. The enforcement of a
determination by an arbitrator that prohibits the Band from taking any action
that would prevent Lakes from performing its obligations pursuant to the terms
of this Agreement, or that requires the Band to specifically perform any
obligation under this Agreement; provided, however, that any injunction against
the Band shall be Limited Recourse; shall not mandate, preclude or affect
payment of any funds of the Band other than undistributed or future Net Revenues
of the Enterpris or funds in the Dominion Account; and shall not related to any
asset of the Band other than the Facility.

         (iv) Action to Compel Arbitration. An action to compel arbitration
pursuant to this Article 14.

Section 14.4. Damages on Termination for Failure to Obtain NIGC Approval. In
         the event of termination of this Agreement under ss.13.2 because NIGC
         Approval has not been obtained within five years after Ratification,
         (i) the Band shall be obligated to repay Lakes all amounts loaned by
         Lakes to the Band under or pursuant to this Agreement, but not fees,
         non-refundable payments and other payments not specifically designated
         as loans or advances under this Agreement; provided that such repayment
         shall be made only out of distributions to the Band from Subsequent
         Gaming Facility Revenues, and shall be paid in 60 equal monthly
         instalments of principal and interest beginning one month after opening
         of such a facility. To secure this obligation Lakes shall retain its
         mortgages, if any, on property of the Band not transferred into trust,
         and may foreclose such mortgages (subject to the arbitration provisions
         of this Article 14) if the Band fails to perform as provided in this
         subsection. Such payment and collateral shall be Lakes's sole remedy
         and recourse in the event of termination of this Agreement under ss.
         13.2. In no event shall Lakes have recourse in the event of such
         termination to (a) assets purchased by the Band with funds advanced by
         Lakes, except as collateral to the extent provided in this subsection;
         (b) assets of any other gaming facility owned or operated by the Band,
         other than Subsequent Gaming Facility Revenues; or (c) any other asset
         of the Band.

              Section 14.5. Liquidated Damages and Limitations on Remedies. The
         following liquidated damages and limitations on remedies apply under
         this Agreement, in addition to those provided elsewhere in this
         Agreement as to claims and remedies against the Band:

<PAGE>   62
                  i. Liquidated Damages Payable by Lakes. In the event of a
                  Lakes Event of Default prior to the Commencement Date, after
                  such notice and right to cure as may be provided in this
                  Agreement, Lakes shall: (A) forfeit to the Band all amounts in
                  the Account as of the default; (B) pay the Band an amount
                  equal to the sum of (x) the aggregate Monthly Payments payable
                  under ss. 8.1(c) over the balance of the 5-year Term, as if
                  the Agreements had not been terminated, and (y) the Accrued
                  Expenses; (C) release all claims against the Band, including
                  without limitation all amounts owed by the Band to Lakes under
                  or related to the Agreements and all rights under the
                  Agreements, and discharge all mortgage and security interests
                  on assets of the Band; (D) transfer to the Band, at the Band's
                  discretion and without payment of any consideration, any and
                  all options and interests in real property in Michigan held by
                  Lakes; and (E) deliver to the Band all documents and work
                  product in the possession or control of Lakes or its agents
                  related to the proposed Facility, the Gaming Site and the Non-
                  Gaming Lands. Lakes agrees to execute and deliver such
                  release, discharges and transfer instruments, and to deliver
                  such work product and documents, at the time of payment of
                  liquidated damages.

                  ii. Liquidated Damages Payable by the Band. In the event of a
                  Band Event of Default prior to the Commencement Date, after
                  such notice and right to cure as may be provided in this
                  Agreement, the Band shall: (A) pay Lakes all amounts loaned by
                  Lakes to the Band under this Agreement, but not fees,
                  non-refundable payments and other payments not specifically
                  designated as loans or advances under this Agreement, less the
                  Band's right of offset, if any; such damages to be payable
                  only out of Subsequent Gaming Facility Revenues on the same
                  terms and with the same limitations on recourse as are
                  provided in ss. 14.4 with regard to damages payable by the
                  Band under that subsection; (B) release any interest in the
                  funds in the Account, which shall be released to Lakes; and
                  (C) transfer to Lakes all options and land (other than land
                  held in trust) acquired by the Band through funds advanced by
                  Lakes (or, failing such transfer, Lakes may foreclose on any
                  mortgages it holds on such options or land not held in trust);
                  provided that the amount of any damages payable to Lakes shall
                  be reduced by the amount paid for any options or land
                  transferred by the Band to Lakes.

              Section 14.6. Lakes Continuing Obligations. Nothing in this
         Article shall affect or impair Lakes' continuing obligations under
         ss.ss. 10.4 (non-competition) and 15.13 (confidentiality) of this
         Agreement, which shall remain enforceable for the

<PAGE>   63
         following terms, notwithstanding the termination of the Agreements and
         payment of liquidated or other damages: (i) as to ss.10.4, the greater
         of five years after execution of the Agreements or one year after
         termination; and (ii) as to ss. 15.13, the greater of five years after
         execution of the Agreements or two years after termination.

              Section 14.7. Termination of Exclusivity. Section 10.2
         (Exclusivity in Michigan) of this Agreement shall terminate upon any
         termination of the Agreements, notwithstanding any breach of the
         Agreements by the Band.

              Section 14.8. Remedies. In consideration of the agreement to
         liquidated damages to the extent provided above, the Band and Lakes
         each waive the right to actual, consequential, exemplary or punitive
         damages to the extent that liquidated damages are applicable to a
         default, but shall retain the right to injunctive relief (i) prior to
         termination of the Agreements, to enforce rights and remedies
         thereunder, subject to the Limited Recourse provisions of this
         Agreement as to the Band and the Band's limited waiver of sovereign
         immunity; and (ii) after termination, to the extent that provisions of
         this Agreement specifically survive such termination, subject to such
         Limited Recourse provisions and limited waiver. The injured party
         shall, where liquidated damages are not applicable and damages or
         remedies are not otherwise specified, be entitled to such damages as it
         may be entitled to under applicable law, subject to such Limited
         Recourse provisions and limited waiver of the Band's sovereign immunity
         (which shall apply to all claims against the Band under or relating to
         the Agreements, in addition to all Loans).

              Section 14.9. Fees not Damages. In no event shall fees or other
         non-refundable payments or Tribal Distributions made by Lakes to Band
         constitute damages to Lakes or be repayable by the Band.

                                   ARTICLE 15
                                     GENERAL

              Section 15.1. Nature of Agreement. This Agreement is not intended
         as and shall not be construed as a "management agreement" within the
         meaning of the IGRA.

              Section 15.2. Lakes's Interest. Nothing contained herein grants or
         is intended (i) to grant Lakes a titled interest to the Facility, or
         (ii) in any way to impair the Band's sole proprietary interest in the
         Facility.

              Section 15.3. Situs of the Agreement. This Agreement, the Lakes
         Note, the Transition Note and the Non-Gaming Land Acquisition Line of
         Credit shall be

<PAGE>   64
         deemed entered into in Michigan.

              Section 15.4. Notice. Any notice required to be given pursuant to
         this Agreement shall be delivered to the appropriate party by Certified
         Mail Return Receipt Requested or by overnight mail or courier service,
         to the following addresses:

              If to the Band:

              Pokagon Band of Potawatomi Indians
              53237 Townhall Road
              Dowagiac, MI 49047

              Attn: Chairman, Tribal Council

              with a copy to:

              Daniel Amory, Esq.
              Drummond Woodsum & MacMahon
              P.O. Box 9781
              Portland, ME 04104-5081

              and to:

              Robert Gips, Esq.
              Gips and Associates
              71 Myrtle Avenue, Suite 2000
              South Portland, ME 04106

              If to Lakes:

              Lakes Gaming, Inc.
              130 Cheshire Lane
              Minnetonka, MN 55305

              with a copy to:

              Douglas S. Twait, Esq.
              Johnson Hamilton Quigley Twait & Foley, PLC
              First National Bank Building
              Suite W1450
              332 Minnesota Street

<PAGE>   65

              Saint Paul, MN 55101-1314

              and to:

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

         or to such other different address(es) as Lakes or the Band may specify
         in writing. Any such notice shall be deemed given three days following
         deposit in the United States mail, one day following delivery to a
         courier service or upon actual delivery or upon actual delivery,
         whichever first occurs.

              Section 15.5. Relationship. Lakes and the Band shall not be
         construed as joint venturers or partners of each other by reason of
         this Agreement and neither shall have the power to bind or obligate the
         other except as set forth in this Agreement.

              Section 15.6. Further Actions. The Band and Lakes agree to execute
         all contracts, agreements and documents and to take all actions
         reasonably necessary to comply with the provisions of this Agreement
         and the intent hereof.

              Section 15.7. Waivers. No failure or delay by Lakes or the Band to
         insist upon the strict performance of any covenant, agreement, term or
         condition of this Agreement, or to exercise any right or remedy
         consequent upon the breach thereof, shall constitute a waiver of any
         such breach or any subsequent breach of such covenant, agreement, term
         of condition. No covenant, agreement, term or condition of this
         Agreement and no breach thereof shall be waived, altered or modified
         except by written instrument. No waiver of any breach shall affect or
         alter this Agreement, but each and every covenant, agreement, term and
         condition of this Agreement shall continue in full force and effect
         with respect to any other then existing or subsequent breach thereof.

              Section 15.8. Captions. The captions of each article, section and
         subsection contained in this Agreement are for ease of reference only
         and shall not affect the interpretational meaning of this Agreement.

              Section 15.9. Third Party Beneficiary. This Agreement is
         exclusively for the benefit of the parties hereto and it may not be
         enforced by any party other than the parties to this Agreement and
         shall not give rise to liability to any third party other than the
         authorized successors and assigns of the parties hereto.

<PAGE>   66
              Section 15.10. Survival of Covenants. Any covenant, term or
         provision of this Agreement which, in order to be effective, must
         survive the termination of this Agreement, shall survive any such
         termination.

              Section 15.11. Estoppel Certificate. Lakes and the Band agree to
         furnish to the other party, from time to time upon request, an estoppel
         certificate in such reasonable form as the requesting party may request
         stating whether there have been any defaults under this Agreement known
         to the party furnishing the estoppel certificate.

              Section 15.12. Periods of Time; Time of the Essence. Whenever any
         determination is to be made or action is to be taken on a date
         specified in this Agreement, if such date shall fall on a Saturday,
         Sunday or legal holiday under the laws of the Band or the State of
         Michigan, then in such event said date shall be extended to the next
         day which is not a Saturday, Sunday or legal holiday. Time is of the
         essence.

              Section 15.13. Confidential and Proprietary Information. Both
         parties agree that any information received concerning the other party
         during the performance of this Agreement, regarding the parties'
         organization, financial matters, marketing and development plans for
         the Enterprise, the Gaming Site, or other information of a proprietary
         nature (the "Confidential Information") will be treated by both parties
         in full confidence except for such public disclosure as may be required
         to allow Lakes and the Band to perform their respective covenants and
         obligations hereunder, or in response to legal process, and will not be
         revealed to any other persons, firms or organizations. This provision
         shall survive the termination of this Agreement as provided in ss.
         14.6. The obligations not to use or disclose the Confidential
         Information shall not apply to Confidential Information (a) which has
         been made previously available to the public by the Band or Lakes or
         becomes generally available to the public, unless the Confidential
         Information being made available to the public results in a breach of
         this Agreement; (b) which prior to disclosure to the Band or Lakes was
         already rightfully in any such persons' possession; (c) which is
         obtained by the Band or Lakes from a third party who is lawfully in
         possession of such Information, and not in violation of any
         contractual, legal or fiduciary obligation to the Band or Lakes, with
         respect to such Confidential Information and who does not require the
         Band or Lakes to refrain from disclosing such Confidential Information
         to others; or (d) by the Band, if such Information pertains to the
         Gaming Site or the Enterprise, in connection with the Band's
         development, construction and operation of a gaming facility after
         termination of the Agreements.

              Section 15.14. Government Savings Clause. Each of the parties
         agree to execute, deliver and, if necessary, record any and all
         additional instruments,

<PAGE>   67
         certifications, amendments, modifications and other documents as may be
         required by the United States Department of the Interior, Bureau of
         Indian Affairs, the office of the field Solicitor, the NIGC, or any
         applicable statute, rule or regulation in order to effectuate,
         complete, perfect, continue or preserve the respective rights,
         obligations, liens and interests of the parties hereto to the fullest
         extent permitted by law; provided, that any such additional instrument,
         certification, amendment, modification or other document shall not
         materially change the respective rights, remedies or obligations of the
         Band or Lakes under this Agreement or any other agreement or document
         related hereto.

              Section 15.15. Successors and Assigns. The benefits and
         obligations of this Agreement shall inure to and be binding upon the
         parties hereto and their respective permitted successors and assigns.

              Section 15.16. Severability. If any provision, or any portion of
         any provision, of this Agreement is found to be invalid or
         unenforceable, such unenforceable provision, or unenforceable portion
         of such provision, shall be deemed severed from the remainder of this
         Agreement and shall not cause the invalidity or unenforceability of the
         remainder of this Agreement. If any provision, or any portion of any
         provision, of this Agreement is deemed invalid due to its scope or
         breadth, such provision shall be deemed valid to the extent of the
         scope or breadth permitted by law.

              Section 15.17. Entire Agreement. This Agreement (together with the
         Exhibits and Management Agreement of even date herewith) sets forth the
         entire agreement between the parties hereto with respect to the subject
         matter hereof. All agreements, covenants, representations, and
         warranties, express or implied, oral or written, of the parties with
         respect to the subject matter hereof are contained herein. No other
         agreements, covenants, representations, or warranties, express or
         implied, oral or written have been made by any party to the other with
         respect to the subject matter of this Agreement. All prior and
         contemporaneous conversations, discussions, negotiations, possible and
         alleged agreements and representations, covenants and warranties with
         respect to the subject matter hereof, including without limitation the
         Term Sheet agreed to by the parties dated June 18, 1999, are waived,
         merged herein and superseded hereby. Each party affirmatively
         represents that no promises have been made to that party which are not
         contained in this Agreement, the Management Agreement, and the
         Exhibits, and stipulates that no evidence of any promises not contained
         in this Agreement, the Management Agreement, and the Exhibits, shall be
         admitted into evidence on their behalf. This Agreement shall not be
         supplemented, amended or modified by any course of dealing, course of
         performance or uses of trade and may only be amended or modified by a
         written instrument duly executed by officers of both parties.

<PAGE>   68
              Section 15.18. Consents.

                  a.       Band. Where approval or consent or other action of
                           the Band is required, such approval shall mean the
                           written approval of the Pokagon Council evidenced by
                           a resolution thereof, certified by a Band official as
                           having been duly adopted, or such other person or
                           entity designated by resolution of the Pokagon
                           Council. Any such approval, consent or action shall
                           not be unreasonably withheld or delayed; provided
                           that the foregoing does not apply where a specific
                           provision of this Agreement allows the Band an
                           absolute or unilateral right to deny approval or
                           consent or withhold action.

                  b.       Manager. Where approval or consent or other action of
                           Manager is required, such approval shall mean the
                           written approval of the Managing Officer. Any such
                           approval, consent or other action shall not be
                           unreasonably withheld or delayed.

                  c.       Business Board. Where approval or consent or other
                           action of the Business Board is required, any such
                           approval, consent or other action shall not be
                           unreasonably delayed.

              Section 15.19. Ratification. The Agreements are effective upon
         their execution by the parties, but the continued rights and
         obligations of the parties hereunder are contingent upon Ratification
         of the Agreements. If Ratification does not occur, the Agreements and
         all related documents shall be of no force and effect; the Band shall
         retain all non-refundable payments made under these Agreements; and the
         Control Agreement shall be discharged, and all property in the Account
         shall be released to Lakes.

                 (balance of this page intentionally left blank)

<PAGE>   69

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.

The Pokagon Band of Potawatomi                            Great Lakes Gaming of
        Michigan, LLC
Indians

By:
   -----------------------------------
                By:
                   ----------------------------------
Its Council Chairman                        Its:

Its Secretary

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