Document:

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                                                                   EXHIBIT 10(a)

                            STOCK PURCHASE AGREEMENT

     THIS STOCK PURCHASE AGREEMENT (this "AGREEMENT") is made as of September 8,
2000, between Bank of America, N.A., a national banking association, as Share
Seller ("SHARE SELLER"), MBG Trust, a Delaware business trust (the "TRUST") and
Mandalay Resort Group, a Nevada corporation ("SHARE PURCHASER").

                              W I T N E S S E T H:

     WHEREAS, Share Purchaser has agreed to purchase, and Share Seller has
agreed to sell, pursuant to the terms of this Agreement, a certain number of
shares of the common stock, par value 1 2/3 cents per share, of Share Purchaser
(the "SHARES"), on the terms and conditions set forth herein;

     WHEREAS, the Trust has agreed to enter into the Collateral Agreement (the
"COLLATERAL AGREEMENT") dated as of the date hereof, between Share Seller, Share
Purchaser, the Trust and Banc of America Securities LLC, a wholly owned
subsidiary of Bank of America Corporation, as collateral agent (together with
its successors and permitted assigns, the "COLLATERAL AGENT"), to secure the
obligations of Share Seller and Share Purchaser under this Agreement; and

     WHEREAS, pursuant to the Collateral Agreement, the Trust has agreed to
purchase the Shares on behalf of Share Seller and deliver such Shares to the
Collateral Agent pursuant to the terms of the Collateral Agreement.

     NOW, THEREFORE, in consideration of their mutual covenants herein
contained, the parties hereto, intending to be legally bound, hereby mutually
covenant and agree as follows:

                                   Article I

                                   DEFINITIONS

     Section 1.1 DEFINITIONS. The following terms shall have the indicated
meanings:

     "AFFILIATE" means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.

     "AGGREGATE FORWARD AMOUNT" means, on any date of determination, the sum of
the Daily Aggregate Forward Amounts for each Initial Period Date occurring on

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or prior to such date of determination, as such sum may be reduced from time to
time by Optional Prepayments or Mandatory Prepayments pursuant to Article II
hereof or in connection with Extraordinary Dividends pursuant to Section 7.8(b).

     "APPLICABLE SPREAD" means (i) in the case of Share Purchaser, the Spread
and (ii) in the case of Share Seller, 100 basis points per annum.

     "AVAILABLE SHARES SHORTFALL" means, as of any date while the Transaction is
outstanding, (A) the number of authorized Shares MINUS (B) (i) the number of
outstanding Shares, (ii) the number of Shares reserved for other purposes and
(iii) without duplication of subclause (ii), the aggregate maximum number of
Shares issuable by Share Purchaser under other securities, instruments and
transactions which are issued by Share Purchaser or to which Share Purchaser is
a party is less than 125% of the Maximum Deliverable Shares.

     "BANKRUPTCY CODE" has the meaning set forth in Section 6.6(a).

     "BUSINESS DAY" means any day on which commercial banks are open for
business in New York, New York, other than a Saturday or Sunday.

     "CALCULATION AGENT" has the meaning set forth in Section 9.13.

     "CLOSING DATE" means September 8, 2000.

     "CLOSING PRICE" means, for any determination date, the closing price per
Share on the Exchange on such date as reported by such recognized source as the
Calculation Agent deems reliable; PROVIDED that, if no such closing price is
reported on such date, the price of a Share shall be estimated in good faith by
the Calculation Agent.

     "COLLATERAL" has the meaning set forth in the Collateral Agreement.

     "COLLATERAL AGENT" has the meaning set forth in the second Whereas clause
on page 1.

     "COLLATERAL AGREEMENT" has the meaning set forth in the second Whereas
clause on page 1.

     "COLLATERAL SHARES" has the meaning set forth in the Collateral Agreement.

     "DAILY AGGREGATE FORWARD AMOUNT" means, for any Initial Period Date, the
aggregate purchase price of Shares (excluding the Purchase Commission) purchased
on such date, if any, by or on behalf of Share Seller pursuant to Section 2.2.

     "DEFAULTING PARTY" has the meaning set forth in Section 8.2.

     "ELECTION DATE" has the meaning set forth in Section 3.1(a).

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     "EVENT OF DEFAULT" has the meaning set forth in Section 8.1.

     "EXCHANGE" means the New York Stock Exchange or any successor thereto;
PROVIDED that if such exchange ceases to list the Shares, the parties will
negotiate in good faith to agree on another Exchange for the Shares.

     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

     "EXCHANGE BUSINESS DAY" means any day that is a trading day on the
Exchange.

     "EXTRAORDINARY DIVIDEND" has the meaning set forth in Section 7.8(b).

     "GOVERNMENTAL AUTHORITY" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
including any foreign, federal, state or other court or governmental agency,
authority, instrumentality or regulatory body.

     "ILLEGALITY" means that due to the adoption of, or any change in, any
applicable law, treaty, rule or regulation after the date hereof, or due to the
promulgation of, or any change in, the interpretation by any court, tribunal or
regulatory authority or other Governmental Authority with competent jurisdiction
of any applicable law, treaty, rule or regulation after the date hereof, it
becomes unlawful for Share Seller or the Trust to perform any absolute or
contingent obligation to make payment or delivery hereunder or to comply with
any other material provision of this Agreement or the Collateral Agreement.

     "INDEMNIFIED PARTY" has the meaning set forth in Section 6.7.

     "INITIAL INTEREST COST" means, for each Daily Aggregate Forward Amount, an
amount equal to (i) for the period from and including the related Initial Period
Settlement Date to and including the last calendar day in the calendar month in
which such Initial Period Settlement Date occurs, the product of (w) such Daily
Aggregate Forward Amount, (x) the applicable Initial LIBOR Rate PLUS the Spread,
(y) the actual number of days elapsed in such period and (z) 1/360, and (ii) for
each calendar month thereafter up to and including the calendar month in which
the Trade Date occurs, the product of (w) such Daily Aggregate Forward Amount,
(x) LIBOR with a maturity of one month PLUS the Spread, (y) the actual number of
days elapsed in such calendar month and (z) 1/360.

     "INITIAL LIBOR RATE" means, with respect to a Daily Aggregate Forward
Amount, for the period from and including the related Initial Period Settlement
Date to and including the last calendar day in the calendar month in which such
Initial Period Settlement Date occurs, a per annum rate equal to (i) if such
period is equal to or less than one week, Initial One-Week LIBOR or (ii)
otherwise, a rate calculated by

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interpolating linearly in accordance with market practice (and rounding to the
nearest hundred-thousandth of a percentage point) between Initial One-Week LIBOR
and Initial One-Month LIBOR on the basis of the number of days in such period.

     "INITIAL ONE-MONTH LIBOR" means 6.62000% per annum; PROVIDED that if the
applicable Initial Period Settlement Date occurs in a calendar month following
the calendar month in which the Closing Date occurs, Initial One-Month LIBOR
shall equal LIBOR with a maturity of one month and with an Interest Reset Date
of the second London Banking Day prior to the start of the calendar month in
which such Initial Period Settlement Date occurs.

     "INITIAL ONE-WEEK LIBOR" means 6.58375% per annum; PROVIDED that if the
applicable Initial Period Settlement Date occurs in a calendar month following
the calendar month in which the Closing Date occurs, Initial One-Week LIBOR
shall equal LIBOR with a maturity of one week and with an Interest Reset Date of
the second London Banking Day prior to the start of the calendar month in which
such Initial Period Settlement Date occurs.

     "INITIAL PAYMENT DATES" has the meaning set forth in Section 2.3(a).

     "INITIAL PERIOD" means the period commencing on and including the Closing
Date and ending on and including the Trade Date.

     "INITIAL PERIOD DATE" means each Exchange Business Day in the Initial
Period.

     "INITIAL PERIOD SETTLEMENT DATE" means, for any Initial Period Date on
which a Daily Aggregate Forward Amount is accumulated, the third Exchange
Business Day following such date.

     "INITIAL SHARE PRICE" means the weighted average price at which the Initial
Shares are purchased by or on behalf of Share Seller during the Initial Period
pursuant to Section 2.2.

     "INITIAL SHARES" means all Shares purchased by or on behalf of Share Seller
during the Initial Period (or, as appropriate, during any portion thereof)
pursuant to Section 2.2.

     "INITIAL SPREAD" has the meaning set forth in the definition of Spread,
below.

     "INTEREST ACCRUAL PERIOD" means (i) the three-month period commencing with
and including the month following the month in which the Trade Date occurs and
(ii) each consecutive three-month period thereafter; PROVIDED that the final
Interest Accrual Period shall end on the Settlement Date relating to the
Maturity Date.

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     "INTEREST COST" means, for any Interest Accrual Period, the product of (i)
LIBOR for such period PLUS the Spread, (ii) the Aggregate Forward Amount as of
the end of such period, (iii) the actual number of days elapsed in such Interest
Accrual Period and (iv) 1/360.

     "INTEREST MAKE-WHOLE SHARES" has the meaning set forth in Section 2.3(c).

     "INTEREST PAYMENT DATE" means the last Business Day of each Interest
Accrual Period other than the final Interest Accrual Period.

     "INTEREST RESET DATE" means, for any interest period, two London Banking
Days prior to the start of such period.

     "INTEREST SETTLEMENT BALANCE" has the meaning set forth in Section 2.3(c).

     "INTEREST SETTLEMENT SHARES" has the meaning set forth in Section 2.3(c).

     "INTERIM SETTLEMENT REFERENCE DATE" means a date on which the calculations
set forth in Section 2.5(a) or (b) are required to be made.

     "INTERPOLATED LIBOR RATE" means, for any period, (i) if such period is one
week or less, LIBOR with a maturity of one week and with an Interest Reset Date
of the second London Banking Day prior to the start of such period and (ii)
otherwise, LIBOR with a maturity of such period; PROVIDED that if LIBOR for such
maturity does not appear on Telerate Page 3750, such rate will be determined by
the Calculation Agent by interpolating linearly in accordance with market
practice (and rounding to the nearest hundred-thousandth of a percentage point)
between LIBOR for the nearest shorter and nearest longer maturities which appear
on such page, in each case with an Interest Reset Date of the second London
Banking Day prior to the start of such period, based on the number of days in
such period.

     "ISSUER" means Mandalay Resort Group or any successor thereto.

     "LIBOR" means, for purposes of any interest period, the rate for deposits
in United States dollars for the relevant maturity which appears on the Telerate
Page 3750 as of 11:00 a.m., London time, on the applicable Interest Reset Date.
Except as otherwise provided herein, the relevant maturity shall be three
months. If such rate does not appear on the Telerate Page 3750, the rate will be
determined on the basis of the rates at which deposits in United States dollars
are offered by four major banks in the London interbank market (the "REFERENCE
BANKS") at approximately 11:00 a.m., London time, on the applicable Interest
Reset Date to prime banks in the London interbank market for the relevant
maturity commencing at the start of the applicable interest period and in an
amount that is representative for a single transaction in the London interbank
market at that time (the "REPRESENTATIVE AMOUNT"). The Calculation Agent will
request the principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, the rate
for that interest period will be the

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arithmetic mean of the quotations (rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point). If fewer than two quotations are
provided as requested, the rate for that interest period will be the arithmetic
mean (rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point) of the rates quoted by major banks in New York City, selected
by the Calculation Agent, at approximately 11:00 a.m., New York City time, on
the applicable Interest Reset Date for loans in United States dollars to leading
European banks for the relevant maturity commencing at the start of the
applicable interest period and in a Representative Amount. If fewer than two
such quotations are provided by such banks in New York City, the rate for that
interest period will be determined by the Calculation Agent in a commercially
reasonable manner.

     "LIEN" means any lien, mortgage, security interest, pledge, charge or
encumbrance of any kind.

     "LONDON BANKING DAY" means any day on which commercial banks are open for
business in London, England, other than a Saturday or a Sunday.

     "MAKE-WHOLE SHARES" has the meaning set forth in Section 3.4(b).

     "MANDATORY PREPAYMENT" has the meaning set forth in Section 2.4(b).

     "MANDATORY PREPAYMENT AMOUNT" has the meaning set forth in Section 2.4(b).

     "MANDATORY PREPAYMENT DATE" has the meaning set forth in Section 2.4(b).

     "MANDATORY PREPAYMENT EVENT" means the occurrence of one or more of the
following: (i) an Illegality; (ii) the sum (the "MANDATORY PREPAYMENT SHARE
NUMBER") of (A) Number of Shares PLUS (B) the number of Purchaser Interim
Settlement Shares that Share Purchaser would be required to deliver to Share
Seller if the date of determination were an Interim Settlement Reference Date
equals or exceeds 9.0% of the total number of outstanding Shares of the Issuer;
(iii) the number of Purchaser Interim Settlement Shares Share Purchaser would be
required to deliver to Share Seller if the date of determination were an Interim
Settlement Reference Date equals or exceeds 75% of the Maximum Deliverable
Shares; (iv) an Available Shares Shortfall; or (v) pursuant to an order or
directive of any applicable gaming regulatory authority, Share Seller, the Trust
or the Collateral Agent is no longer permitted to hold Shares.

     "MANDATORY PREPAYMENT SHARE NUMBER" has the meaning set forth in the
definition of Mandatory Prepayment Event, above.

     "MATURITY DATE" means the date that is one year following the Trade Date
(or if such date is not an Exchange Business Day, the next following Exchange
Business Day).

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     "MATURITY INTEREST COST" has the meaning set forth in Section 2.3(b)(ii).

     "MAXIMUM DELIVERABLE SHARES" means, as of any date of determination, ten
million Shares (subject to adjustment pursuant to Article VII hereof) MINUS the
number of Shares delivered by Share Purchaser to or as directed by Share Seller
on or prior to such date hereunder (adjusted to reflect any Shares delivered by
or on behalf of Share Seller to Share Purchaser hereunder), as such amount may
be increased from time to time pursuant to Section 7.10.

     "MAXIMUM INITIAL AMOUNT" means $100 million.

     "MAXIMUM INITIAL SHARES" means, as of any date in the Initial Period, 7.0%
of the total number of outstanding Shares of the Issuer as of such date.

     "MERGER DATE" means, in respect of any Merger Event, the date upon which
holders of Shares (other than, in the case of a takeover offer, Shares owned or
controlled by the offeror) have agreed or have irrevocably become obligated to
transfer their Shares.

     "MERGER EVENT" means, with respect to the Shares, any (i) reclassification
or change of such Shares that results in a transfer of or an irrevocable
commitment to transfer all of such Shares outstanding, (ii) consolidation,
amalgamation or merger of the Issuer with or into another entity (other than a
consolidation, amalgamation or merger in which the Issuer is the continuing
entity and which does not result in any such reclassification or change of all
of such Shares outstanding) or (iii) other takeover offer for such Shares that
results in a transfer of or an irrevocable commitment to transfer all such
Shares (other than such Shares owned or controlled by the offeror).

     "MONTHLY COMMISSION COST" has the meaning set forth in Section 2.3(a).

     "MOODY'S" means Moody's Investors Service, Inc., or its successor.

     "NET SALE AMOUNT" means, for any sale of Shares pursuant to Section 2.3(c),
3.3 or 3.4 on any date, the applicable Sale Amount for such date MINUS the
applicable Sale Commission.

     "NET CASH SETTLEMENT BALANCE" has the meaning set forth in Section 3.3.

     "NET SHARE SETTLEMENT BALANCE" has the meaning set forth in Section 3.4(a).

     "NEW SHARES" has the meaning set forth in Section 7.2.

     "NON-DEFAULTING PARTY" has the meaning set forth in Section 8.2.

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     "NUMBER OF SHARES" means, as of any date of determination, (i) the number
of Initial Shares PLUS (ii) the number of Purchaser Interim Settlement Shares
delivered on or prior to such date MINUS (iii) the number of Seller Interim
Settlement Shares delivered on or prior to such date MINUS (iv) the number of
Prepayment Shares in connection with Optional Prepayments or Mandatory
Prepayments occurring on or prior to such date.

     "OPTIONAL PREPAYMENT" has the meaning set forth in Section 2.4(a).

     "OPTIONAL PREPAYMENT AMOUNT" has the meaning set forth in Section 2.4(a).

     "OPTIONAL PREPAYMENT DATE" has the meaning set forth in Section 2.4(a).

     "OTHER CONSIDERATION" has the meaning set forth in Section 7.3.

     "PERSON" means an individual, a corporation, a partnership, an association,
a limited liability company, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.

     "PREPAYMENT AMOUNT" has the meaning set forth in Section 2.4(c).

     "PREPAYMENT DATE" means an Optional Prepayment Date or a Mandatory
Prepayment Date, as the case may be.

     "PREPAYMENT SHARES" has the meaning set forth in Section 3.1(b).

     "PRINCIPAL PAYMENT DATE" means any Optional Prepayment Date, any Mandatory
Prepayment Date or the Maturity Date, as the case may be.

     "PROCEEDINGS" has the meaning set forth in Section 9.5(c).

     "PROSPECTUS" has the meaning set forth in Section 3.6(a).

     "PURCHASE COMMISSION" means $0.04 per Share.

     "PURCHASE SUSPENSION" has the meaning set forth in Section 2.2(b).

     "PURCHASER INTERIM SETTLEMENT SHARES" has the meaning set forth in Section
2.5(b).

     "REFERENCE BANKS" have the meaning set forth in the definition of LIBOR,
above.

     "REFERENCE PRICE" means, for any date of determination, (i) the weighted
average daily price of the shares on the Exchange as reported by Bloomberg, L.P.
("BLOOMBERG") by reference to the trade summary matrix on screen

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"MBG_UN(EQUITY)_AQR" after 4:00 p.m. New York time on such date or (ii) (A) if
such price is not so reported by Bloomberg, then as reported by such other
recognized source selected by the Calculation Agent on such date or (B) if the
Shares cease to be listed or traded on a national securities exchange or
included in a quotation system, then the price as determined by the Calculation
Agent in a commercially reasonable manner.

     "REGISTRATION CONDITIONS" has the meaning set forth in Section 3.6(a).

     "REGISTRATION FAILURE DATE" has the meaning set forth in Section 3.6(b).

     "REGISTRATION STATEMENT" has the meaning set forth in Section 3.6(a).

     "REPRESENTATIVE AMOUNT" has the meaning set forth in the definition of
LIBOR, above.

     "REPRICING" has the meaning set forth in Section 7.9.

     "REQUIREMENT OF LAW" means (a) the organizational documents of a Person,
(b) any law, treaty, rule or regulation or determination of an arbitrator, court
or other Governmental Authority or any internal policy reasonably implementing
such or (c) any franchise, license, lease, permit, certificate, authorization,
qualification, easement, right of way, right or approval binding on a Person or
any of its property.

     "RESTRICTED SUBSIDIARY" means, as of any date of determination, any
subsidiary of Share Purchaser (i) at least 80% of the capital stock or other
ownership interests of which are owned on such date, directly or indirectly, by
Share Purchaser and (ii) with respect to which neither Share Purchaser nor any
of its Restricted Subsidiaries has entered any shareholders' agreement,
management agreement or other agreement which has the effect of delegating
management control over such subsidiary to a Person other than Share Purchaser
or a Restricted Subsidiary.

     "SALE AMOUNT" means, for any sale of Shares pursuant to Sections 2.3(c),
3.3 or 3.4 of this Agreement on any date, (i) if such sale is pursuant to a
Registration Statement in accordance with Section 3.6, the number of Shares so
sold on such date MULTIPLIED BY the Reference Price for such date, or (ii) if
such sale is on a private placement basis (or on another basis not involving a
sale pursuant to a Registration Statement) as provided in Section 3.6, the
aggregate proceeds received in respect of such sale.

     "SALE COMMISSION" means, for any sale of Shares pursuant to Sections
2.3(c), 3.3 or 3.4 of this Agreement, 2% multiplied by the applicable Sale
Amount.

     "SECURITIES ACT" means the Securities Act of 1933, as amended.

     "SELLER INTERIM SETTLEMENT SHARES" has the meaning set forth in Section
2.5(a).

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     "SETTLEMENT BALANCE" means a Net Cash Settlement Balance or a Net Share
Settlement Balance, as the case may be.

     "SETTLEMENT DATE" means, for any Principal Payment Date, the third Exchange
Business Day following such Principal Payment Date.

     "SETTLEMENT INTEREST COST" means, for any Settlement Interest Period with
respect to a Principal Payment Date, (i) the product of (w) the Settlement
Balance with respect to such Principal Payment Date as of the close of business
on the last day of such period, (x) LIBOR with a maturity of one month PLUS the
Spread, (y) the actual number of days elapsed in such period and (z) 1/360 PLUS
(ii) the sum of, for each day in such Settlement Interest Period on which the
Settlement Balance is reduced, the product of (w) the amount of such reduction,
(x) the number of days from and including the start of such period to but
excluding the date of such reduction, (y) LIBOR with a maturity of one month
PLUS the Spread and (z) 1/360.

     "SETTLEMENT INTEREST PAYMENT DATE" means the first Business Day following
the end of each Settlement Interest Period.

     "SETTLEMENT INTEREST PERIOD" means, with respect to a Principal Payment
Date, (i) the period from and including the related Settlement Date to but
excluding the one-month anniversary thereof and (ii) each consecutive one-month
period thereafter, beginning on and including a monthly anniversary of the
related Settlement Date and ending on but excluding the next succeeding monthly
anniversary; PROVIDED that the final Settlement Interest Period with respect to
such Principal Payment Date shall end on and include the Business Day following
the date the Settlement Balance for such Principal Payment Date is reduced to
zero.

     "SETTLEMENT SHARES" means, as of any date of determination following a
Settlement Date, Shares of a number equal to the Number of Shares PLUS any
Make-Whole Shares delivered in connection with such Settlement Date.

     "SHARE PURCHASER" has the meaning set forth in the initial paragraph of
this Agreement.

     "SHARES" has the meaning set forth in the first Whereas clause on page 1.

     "SHARE SELLER" has the meaning set forth in the initial paragraph of this
Agreement.

     "SIGNIFICANT SUBSIDIARY" means, as of any date of determination, each
Restricted Subsidiary that had on the last day of any fiscal quarter then most
recently ended total assets (determined in accordance with generally accepted
accounting principles) of at least $10,000,000.

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     "SPREAD" means 150 basis points per annum (the "INITIAL SPREAD"), as such
rate may be adjusted from time to time pursuant to Section 7.9; PROVIDED that if
an Event of Default with respect to Share Purchaser has occurred and is
continuing, the otherwise-prevailing spread (as so adjusted) shall be increased
by 100 basis points per annum.

     "S&P" means Standard & Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc., or its successor.

     "TAX INQUIRY" has the meaning set forth in Section 6.1(b).

     "TRADE DATE" has the meaning specified in Section 2.2(d).

     "TRANSACTION" has the meaning set forth in Section 6.1(a).

     "TRANSACTION DOCUMENTS" means this Agreement and the Collateral Agreement.

     "TRANSFER AGREEMENT" has the meaning set forth in Section 3.6(a).

     "TRUST" has the meaning set forth in the initial paragraph of this
Agreement.

     Section 1.2 RULES OF CONSTRUCTION. Definitions contained herein apply
equally to both the singular and plural forms of the defined terms. The words
"include" and "including" shall be deemed to be followed by the phrase "without
limitation." The terms "herein," "hereof" and "hereunder" and other words of
similar import appearing in this Agreement refer to this Agreement as a whole
and not to any particular Section, paragraph or subdivision. The Section titles
in this Agreement appear as a matter of convenience only and shall not affect
the interpretation of this Agreement.

                                   ARTICLE II

                     SALE, PURCHASE, INTEREST AND COMMISSION
                  PAYMENTS, PREPAYMENTS AND INTERIM SETTLEMENTS

      Section 2.1 SALE AND PURCHASE. Upon the terms and subject to the
conditions of this Agreement, Share Seller agrees to sell to Share Purchaser,
and Share Purchaser agrees to purchase and acquire from Share Seller, Shares
in an amount equal to the Number of Shares.

      Section 2.2 PURCHASE OF SHARES. (a) During the Initial Period, Share
Seller shall, subject to subsection (b) below, use reasonable efforts to
purchase or cause the purchase of a number of Shares with an Aggregate
Forward Amount as close as practicable to (taking into account any Purchase
Suspensions), but in no event greater than, the Maximum Initial Amount in
such manner, at such prices and at such times as Share Seller, in its sole
discretion, shall determine. Notwithstanding anything to the

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contrary herein, Share Seller shall not be required to so purchase or cause the
purchase of Shares on any Initial Period Date if, in the reasonable judgment of
Share Seller, such purchase would contravene or violate any Requirement of Law
applicable to Share Seller. Share Seller shall cause any Shares so purchased to
be pledged to Share Purchaser pursuant to the Collateral Agreement or another
agreement reasonably acceptable to Share Purchaser.

     (b)  Notwithstanding subsection (a), Share Purchaser shall be entitled, by
written notice to Share Seller by 8:30 a.m., New York time, on any Initial
Period Date, to direct Share Seller not to purchase or cause the purchase of
Shares pursuant to subsection (a) above on such Initial Period Date (a "PURCHASE
SUSPENSION").

     (c)  No later than 5:00 p.m., New York time, on each Initial Period Date on
which Shares are purchased, Share Seller shall inform Share Purchaser by fax or
electronic mail of all Share purchases effected during such Initial Period Date
pursuant to this Section 2.2.

     (d)  On the earliest to occur of (i) the first Initial Period Date on which
the number of Initial Shares equals the Maximum Initial Shares, (ii) the first
Initial Period Date on which the Aggregate Forward Amount equals the Maximum
Initial Amount, (iii) written direction of Share Purchaser delivered to the
Trust and Share Seller that the Initial Period shall terminate, (iv) January 5,
2001 and (v) any Mandatory Prepayment Event or any Event of Default with respect
to Share Purchaser (the earliest of the dates described in clauses (i) through
(v), the "TRADE DATE"), the Initial Period shall terminate and Share Seller
shall cease purchasing or causing to be purchased Shares and shall promptly
prepare and deliver a schedule to Share Purchaser, which shall state the Number
of Shares, the Aggregate Forward Amount and the Initial Share Price as of the
end of the Initial Period.

     Section 2.3 INTEREST PAYMENTS AND COMMISSIONS. (a) On the last Business Day
of each calendar month beginning with the calendar month in which the Closing
Date occurs and ending with the calendar month in which the Trade Date occurs
(the "INITIAL PAYMENT DATES"), Share Purchaser shall pay to or as directed by
Share Seller an amount in cash equal to the sum of (i) the aggregate Initial
Interest Costs for each Daily Aggregate Forward Amount for such calendar month
and (ii) the product of the Purchase Commission and the number of Shares
purchased pursuant to Section 2.2 during such calendar month (each a "MONTHLY
COMMISSION COST").

     (b)  (i) On each Interest Payment Date, Share Purchaser shall pay to or as
directed by Share Seller the Interest Cost accrued for the related Interest
Accrual Period.

     (ii) On the Settlement Date related to the Maturity Date, Share Purchaser
shall pay to or as directed by Share Seller interest on the Aggregate Forward
Amount as of the Maturity Date in an amount (the "MATURITY INTEREST COST") equal
to the

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product of (w) the Spread PLUS the Interpolated LIBOR Rate for the period
specified in clause (y) of this Section 2.3(b)(ii), (x) such Aggregate Forward
Amount, (y) the number of days in the period from and including the first day of
the Interest Accrual Period in which the Maturity Date occurs to but excluding
the related Settlement Date and (z) 1/360.

     (iii) On each Settlement Interest Payment Date with respect to a Principal
Payment Date, Share Purchaser shall pay to or as directed by Share Seller the
Settlement Interest Cost accrued for the related Settlement Interest Period.

     (c)  In lieu of settling its obligations under subsections (a) or (b) in
cash, Share Purchaser may, at its election and subject to Section 3.6, pay all
or any portion of any Initial Interest Costs, Monthly Commission Cost, Interest
Cost, Maturity Interest Cost or Settlement Interest Cost as provided in this
subsection by notice to Share Seller on or before the tenth Exchange Business
Day prior to the date such payment is due. If Share Purchaser so elects, on the
applicable payment date, Share Purchaser shall deliver to or as directed by
Share Seller a number of Shares ("INTEREST SETTLEMENT SHARES") equal to (i) 102%
MULTIPLIED BY the dollar amount of the Initial Interest Costs, Monthly
Commission Cost, Interest Cost, Maturity Interest Cost or Settlement Interest
Cost, as appropriate, not paid in cash on such payment date (the "INTEREST
SETTLEMENT Balance") DIVIDED BY (ii) the Closing Price for the Exchange Business
Day prior to such payment date; PROVIDED that if such Shares are to be sold on a
private placement basis (or on another basis not involving a sale pursuant to a
Registration Statement) as provided in Section 3.6, such number of Shares shall
be MULTIPLIED BY 110%; PROVIDED, FURTHER, that Share Purchaser shall not be
required to deliver Shares in excess of the Maximum Deliverable Shares.

     Share Seller shall sell or cause to be sold the Interest Settlement Shares
in accordance with Sections 3.5 and 3.6. At the end of the third Exchange
Business Day following the date of any such sale of Shares, the Interest
Settlement Balance shall be (i) reduced by an amount equal to the Net Sale
Amount for such date, and (ii) until such time as the Interest Settlement
Balance has been reduced to zero, increased by an amount reflecting financing
costs with respect to the portion of the Interest Settlement Balance deemed to
be paid through the applicable Net Sale Amount for the period from and including
the applicable Initial Payment Date, Interest Payment Date, Settlement Date or
Settlement Interest Payment Date to but excluding such date at a per annum rate
equal to LIBOR compounded quarterly PLUS the Spread. Initial Interest Costs,
Interest Costs, Maturity Interest Cost, Monthly Commission Costs and Settlement
Interest Costs shall be treated as paid to the extent of the amounts described
in clause (i) of the preceding sentence.

     If on any date the Interest Settlement Balance has been reduced to zero but
all Interest Settlement Shares have not been sold, no additional Interest
Settlement Shares shall be sold and Share Seller shall promptly deliver or cause
to be delivered to Share Purchaser any such remaining Interest Settlement
Shares. If the aggregate Net Sale

                                       13
<PAGE>

Amounts exceed the Interest Settlement Balance, Share Seller shall promptly pay
or cause to be paid the excess to Share Purchaser. If on any date all such
Interest Settlement Shares have been sold and the Interest Settlement Balance
has not been reduced to zero, Share Seller shall notify Share Purchaser, and
Share Purchaser shall, at Share Purchaser's election, on the third Exchange
Business Day after such date, either (i) deliver to or as directed by Share
Seller the number of whole Shares (the "INTEREST MAKE-WHOLE SHARES") equal to
(x) 102% MULTIPLIED BY the Interest Settlement Balance as of such date DIVIDED
BY (y) the Closing Price for such date (PROVIDED that if such Shares are to be
sold on a private placement basis (or on another basis not involving a sale
pursuant to a Registration Statement) as provided in Section 3.6, such number of
Shares shall be MULTIPLIED BY 110%; PROVIDED, FURTHER, that Share Purchaser
shall not be required to deliver Shares in excess of the Maximum Deliverable
Shares), which Shares shall be sold as though such Interest Make-Whole Shares
were Interest Settlement Shares, or (ii) pay to or as directed by Share Seller
an amount in cash equal to such remaining Interest Settlement Balance plus
accrued interest thereon through the payment date. Share Purchaser shall
promptly notify Share Seller of its election. This provision shall be applied
successively, MUTATIS MUTANDIS, until the Interest Settlement Balance is reduced
to zero; PROVIDED that Share Purchaser shall not be required to deliver Shares
in excess of the Maximum Deliverable Shares.

     Section 2.4 PREPAYMENT. (a) Share Purchaser shall have the right to prepay
the Aggregate Forward Amount, in whole or in part, from time to time following
the Trade Date (an "OPTIONAL PREPAYMENT"), and if in part, in the amount of
$25,000,000 or any integral multiple of $1,000,000 in excess thereof. Share
Purchaser shall give Share Seller and the Trust irrevocable written notice of
its intent, on any Exchange Business Day, to prepay all or a portion of the
Aggregate Forward Amount at least ten Exchange Business Days prior to the
prepayment date selected by Share Purchaser (the "OPTIONAL PREPAYMENT DATE"),
which notice shall specify the dollar amount of such prepayment (the "OPTIONAL
PREPAYMENT AMOUNT"). In such notice, Share Purchaser shall also specify which
settlement option set forth in Article III hereof it has elected with respect to
such prepayment.

     (b)  (i) Under the circumstances described in Sections 7.3, 7.5, 7.8(b) and
8.2, Share Purchaser shall prepay the Aggregate Forward Amount in whole, and
upon the occurrence of a Mandatory Prepayment Event, Share Seller shall be
entitled, by written notice to Share Purchaser, to require Share Purchaser to
prepay the Aggregate Forward Amount to the extent described in subsection (ii)
below (each a "MANDATORY PREPAYMENT," and the dollar amount of such prepayment,
the "MANDATORY PREPAYMENT AMOUNT") on the Business Day designated or deemed
designated as a "MANDATORY PREPAYMENT DATE."

     (ii) In the case of a Mandatory Prepayment Event set forth in clauses (i),
(iii), (iv) and (v) of the definition thereof, Share Seller may designate a
Mandatory Prepayment Date with respect to the entire Aggregate Forward Amount.
In the case of a Mandatory Prepayment Event set forth in clause (ii) of the
definition thereof, Share Seller

                                       14
<PAGE>

may designate a Mandatory Prepayment Date with respect to a Mandatory Prepayment
Amount such that the Mandatory Prepayment Share Number following such Mandatory
Prepayment Date is less than but as close as reasonably practicable to 9.0% of
the total number of outstanding Shares. The Mandatory Prepayment Date designated
by any such notice described in this subparagraph (ii) shall be no less than 3
Exchange Business Days or more than 20 Exchange Business Days from the date such
notice is effective. Upon receipt of such notice, Share Purchaser shall promptly
(but in no event later than the second Exchange Business Day following such
receipt) deliver written notice to Share Seller, the Trust and the Collateral
Agent setting forth its settlement election pursuant to Article III with respect
to such Mandatory Prepayment Date. Notwithstanding the foregoing, in the case of
a Mandatory Prepayment Event set forth in clause (v) of the definition thereof,
if designating a Mandatory Prepayment Date as set forth in this subparagraph
(ii) and otherwise in accordance with the terms of this Agreement would be
inconsistent with the applicable order or directive of the applicable gaming
regulatory authority, the parties shall negotiate in good faith to resolve such
inconsistency in a manner that preserves the fundamental economic terms of this
Transaction and complies with such order or directive.

     (c)  Without duplication of any Interest Cost, Share Purchaser shall be
required to pay on the Settlement Date related to a Prepayment Date interest on
the applicable Optional Prepayment Amount or Mandatory Prepayment Amount
(either, a "PREPAYMENT AMOUNT") in an amount equal to the product of (i) the
Spread PLUS LIBOR for the Interest Accrual Period in which such Prepayment Date
occurs, (ii) such Prepayment Amount, (iii) the number of days in the period from
and including the first day of such Interest Accrual Period to but excluding the
related Settlement Date and (iv) 1/360. Share Purchaser shall be entitled, in
lieu of its obligations in this subsection (c), to pay such amount in accordance
with Section 2.3(c) as though such amount were an Interest Cost and the
applicable payment date were an Interest Payment Date.

     (d)  If the Settlement Date related to a Prepayment Date occurs on a date
that is not the last day of an Interest Accrual Period, Share Purchaser shall be
required to pay, in addition to the amount set forth in subparagraph (c) above,
interest breakage costs to Share Seller in an amount equal to the product of (A)
the positive difference, if any, between the LIBOR rate in effect during such
Interest Accrual Period and the Interpolated LIBOR Rate in effect for the period
from and including the related Settlement Date to and including the end of such
Interest Accrual Period; (B) the Prepayment Amount and (C) 1/360, payable for
each calendar day from and including such Settlement Date to and including the
last calendar day of such Interest Accrual Period. If such product is a positive
number, Share Purchaser shall pay such amount in cash to Share Seller on such
Settlement Date. Share Purchaser shall be entitled, in lieu of its obligations
in this subsection (d), to pay such amount in accordance with Section 2.3(c) as
though such amount were an Interest Cost and the applicable payment date were an
Interest Payment Date.

                                       15
<PAGE>

     (e)  On each Settlement Date related to a Prepayment Date, the Aggregate
Forward Amount shall be reduced by the applicable Prepayment Amount, and
interest, as provided in Section 2.3(b)(i) and (b)(ii), shall cease to accrue on
such amount on and including such Business Day and shall accrue as provided in
Section 2.3(b)(iii), if applicable.

     Section 2.5 INTERIM SETTLEMENT. (a) If, on the last Exchange Business Day
of any calendar quarter following the month in which the Trade Date occurs, the
Closing Price for such date MULTIPLIED BY the Number of Shares as of such date
exceeds the Aggregate Forward Amount as of such date, Share Seller shall deliver
or cause to be delivered to Share Purchaser no later than the close of business
in New York on the third Exchange Business Day following such date a number of
Shares ("SELLER INTERIM SETTLEMENT SHARES") equal to the amount of such excess
DIVIDED BY such Closing Price, rounded to the nearest whole Share.

     (b)  If such Closing Price MULTIPLIED BY such Number of Shares is less than
such Aggregate Forward Amount, Share Purchaser shall deliver to or as directed
by Share Seller no later than the close of business in New York on the third
Exchange Business Day following such date a number of Shares ("PURCHASER INTERIM
SETTLEMENT SHARES") equal to the amount of such shortfall DIVIDED BY such
Closing Price, rounded to the nearest whole Share; PROVIDED that Share Purchaser
shall not be required to deliver Shares in excess of the Maximum Deliverable
Shares. With respect to any Purchaser Interim Settlement Shares so delivered,
Share Seller represents that it is not taking such Purchaser Interim Settlement
Shares with a view to the distribution thereof within the meaning of the
Securities Act, it being understood that this representation shall not limit the
right of Share Seller to sell or cause the sale of such Shares as contemplated
in this Agreement and the Collateral Agreement. Share Seller acknowledges and
agrees that such Purchaser Interim Settlement Shares cannot be resold unless
registered under the Securities Act or in a transaction exempt from or not
subject to the registration requirements of the Securities Act. Share Seller
acknowledges that certificates with respect to such Purchaser Interim Settlement
Shares delivered to or as directed by Share Seller pursuant to this provision
may bear a legend to such effect.

     Section 2.6 FEES. On the Business Day following the Closing Date, Share
Purchaser shall pay to Share Seller an amount equal to $1,500,000.

                                  ARTICLE III

                                SETTLEMENT TERMS

     Section 3.1 SETTLEMENT. (a) For any Principal Payment Date, Share Purchaser
shall, subject to Section 3.6, have the option to physically settle, net-cash
settle or net-share settle its obligations with respect to such Principal
Payment Date in accordance with this Article III, by giving notice to Share
Seller no later than ten Exchange Business Days prior to such Principal Payment
Date or as otherwise provided

                                       16
<PAGE>

in Section 2.4(b)(ii), Section 7.5 or Section 8.2 (the date such notice is due,
the "ELECTION DATE"); PROVIDED that if Share Purchaser has not notified Share
Seller of its election by such date and in the case of Sections 7.3 and 7.8(b),
Share Purchaser shall be deemed to have elected physical settlement.

     (b)  An Optional Prepayment or Mandatory Prepayment in part shall occur
with respect to a number of whole Shares equal to the applicable Prepayment
Amount DIVIDED BY the Closing Price for the immediately preceding Interim
Settlement Reference Date (or, prior to the first Interim Settlement Reference
Date, the Initial Share Price), rounded to the nearest whole Share (the
"PREPAYMENT SHARES"). With respect to such prepayment, the provisions of this
Article III shall apply except that the references to Number of Shares shall
mean the Prepayment Shares and references to Aggregate Forward Amount shall mean
the Prepayment Amount.

     Section 3.2 PHYSICAL SETTLEMENT. If Share Purchaser elects or is deemed to
have elected physical settlement with respect to a Principal Payment Date, Share
Seller shall deliver or cause to be delivered to Share Purchaser on the
applicable Settlement Date a number of Shares equal to the Number of Shares as
of such Principal Payment Date against payment by Share Purchaser to or as
directed by Share Seller of an amount equal to the Aggregate Forward Amount as
of such Principal Payment Date. Such payment and delivery shall be made on a
delivery versus payment basis.

     Section 3.3 NET CASH SETTLEMENT. If Share Purchaser is entitled to elect
and elects a net cash settlement on or before the Election Date with respect to
a Principal Payment Date, on such Principal Payment Date a balance (the "NET
CASH SETTLEMENT BALANCE") shall be established with an initial balance equal to
the Aggregate Forward Amount for such Principal Payment Date. Share Seller shall
sell or cause to be sold Settlement Shares in accordance with Sections 3.5 and
3.6. At the end of the third Exchange Business Day following the date of any
such sale, the Net Cash Settlement Balance shall be reduced by an amount equal
to the Net Sale Amount for such date. Until such time as the Net Cash Settlement
Balance has been reduced to zero, all Net Sale Amounts shall be paid to or as
directed by Share Seller. After such time, any additional Net Sale Amounts shall
be paid to Share Purchaser. If, as of the date all Settlement Shares are sold,
the Net Cash Settlement Balance has not been reduced to zero, Share Purchaser
shall promptly pay to or as directed by Share Seller an amount equal to such
remaining Net Cash Settlement Balance. The Aggregate Forward Amount shall be
treated as paid to the extent of the amounts paid to or as directed by Share
Seller as described in this section.

     Section 3.4 NET SHARE SETTLEMENT. (a) If Share Purchaser is entitled to
elect and elects net share settlement on or before the Election Date with
respect to a Principal Payment Date, on such Principal Payment Date a balance
(the "NET SHARE SETTLEMENT BALANCE") shall be established with an initial
balance equal to the Aggregate Forward Amount for such Principal Payment Date.
Share Seller shall sell or cause to be sold Settlement Shares in accordance with
Sections 3.5 and 3.6. At the end of the third

                                       17

<PAGE>

Exchange Business Day following the date of any such sale, the Net Share
Settlement Balance shall be reduced by an amount equal to the Net Sale Amount
for such date. The Aggregate Forward Amount shall be treated as paid to the
extent of the amount described in the preceding sentence and any amount paid by
Share Purchaser to or as directed by Share Seller as described in paragraph (b)
below.

     (b)  If, on any date, such Net Share Settlement Balance has been reduced to
zero but all Settlement Shares have not been sold, no additional Settlement
Shares shall be sold and Share Seller shall promptly deliver or cause to be
delivered to Share Purchaser any remaining Settlement Shares. If the aggregate
Net Sale Amounts exceed the Net Share Settlement Balance, Share Seller shall
promptly pay or cause to be paid the excess to Share Purchaser. If, on any date,
all Settlement Shares have been sold and the Net Share Settlement Balance has
not been reduced to zero, Share Seller shall notify Share Purchaser, and Share
Purchaser shall, at Share Purchaser's election, on the third Exchange Business
Day after such date, either (i) deliver to or as directed by Share Seller the
number of whole Shares (the "MAKE-WHOLE SHARES") equal to (x) 102% MULTIPLIED BY
the Net Share Settlement Balance as of such date DIVIDED BY (y) the Closing
Price as of such date (PROVIDED that if such Shares are to be sold on a private
placement basis (or on another basis not involving a sale pursuant to a
Registration Statement) as provided in Section 3.6, such number of Shares shall
be MULTIPLIED BY 110%; PROVIDED, FURTHER, that Share Purchaser shall not be
required to deliver Shares in excess of the Maximum Deliverable Shares), which
Shares shall be sold as though such Make-Whole Shares were Settlement Shares, or
(ii) pay to or as directed by Share Seller an amount in cash equal to such
remaining Net Share Settlement Balance. Share Purchaser shall promptly notify
Share Seller of its election. This provision shall be applied successively,
MUTATIS MUTANDIS, until the Net Share Settlement Balance is reduced to zero;
PROVIDED that Share Purchaser shall not be required to deliver Shares in excess
of the Maximum Deliverable Shares.

     Section 3.5 SALE OF SHARES BY SHARE SELLER. (a) If Shares are to be sold
pursuant to Sections 2.3(c), 3.3 or 3.4 hereof, Share Seller shall, subject to
Section 3.6 hereof, use reasonable efforts to sell or cause to be sold such
Shares in such amounts, in such manner, at such prices and at such times as
Share Seller, in its sole discretion, shall determine; PROVIDED that, except in
the case of a Mandatory Prepayment Date designated as a result of an Event of
Default with respect to Share Purchaser or as described in the last sentence of
Section 2.4(b)(ii), Share Seller shall sell such Shares during a period of not
less than 10 Exchange Business Days. Notwithstanding anything to the contrary
herein, Share Seller shall not be required to sell or cause the sale of Shares
on any Exchange Business Day pursuant to Sections 2.3(c), 3.3, 3.4 or 3.5 if, in
the reasonable judgment of Share Seller, such sale would contravene or violate
any Requirement of Law applicable to Share Seller.

     (b)  Notwithstanding subsection (a), Share Purchaser may, by written notice
to Share Seller by 8:30 a.m., New York time, on any date on which Share Seller
may sell or cause the sale of Shares pursuant to Section 2.3(c), 3.3 or 3.4
hereof, direct

                                       18
<PAGE>

Share Seller not to sell or cause the sale of Shares on such date; PROVIDED that
Share Purchaser shall not be entitled to give such direction on (i) more than 20
Exchange Business Days if an Event of Default with respect to Share Purchaser is
then continuing or in respect of any Mandatory Prepayment Date designated as a
result of an Event of Default with respect to Share Purchaser or a Mandatory
Prepayment Event or (ii) if no Event of Default with respect to Share Purchaser
is then continuing, more than 30 Exchange Business Days in respect of any other
Principal Payment Date.

     (c)  No later than 5:00 p.m., New York time, on each Exchange Business Day
on which Shares are sold, Share Seller shall inform Share Purchaser by fax or
electronic mail of all Share sales effected pursuant to this Section 3.5 or
otherwise pursuant to this Agreement.

     Section 3.6 REGISTRATION CONDITIONS. (a) Subject to subsection (b), but
notwithstanding any other provision to the contrary herein, sales of Shares
pursuant to Sections 2.3(c), 3.3, 3.4 and 3.5 shall not be permitted unless
Share Purchaser shall have satisfied the following conditions (the "REGISTRATION
CONDITIONS") with respect to all such Shares: (i) a registration statement (the
"REGISTRATION STATEMENT") covering public sale of such Shares on behalf of Share
Purchaser by Share Seller (or any Affiliate of Share Seller designated by Share
Seller) shall have been filed with, and declared effective by, the Securities
and Exchange Commission under the Securities Act, at or prior to the close of
business on the Exchange Business Day immediately preceding the Initial Payment
Date, Interest Payment Date, Settlement Date or Settlement Interest Payment
Date, as the case may be, no stop order shall be in effect with respect to such
Registration Statement, and a printed prospectus relating to all such Shares
(including any prospectus supplement thereto, a "PROSPECTUS") shall have been
delivered to Share Seller in such quantities as Share Seller shall reasonably
have requested, on or prior to the date of delivery; (ii) the form and content
of such Registration Statement and such Prospectus (including any sections
describing the plan of distribution) shall be satisfactory to Share Seller;
(iii) Share Purchaser shall have caused all such Shares to be listed on the
Exchange and on each securities exchange on which similar securities issued by
Share Purchaser are then listed; (iv) Share Seller (or any Affiliate of Share
Seller designated by Share Seller) shall have been afforded an opportunity to
conduct a due diligence investigation with respect to Share Purchaser customary
in scope for underwritten offerings of equity securities to confirm to the
satisfaction of Share Seller the accuracy in all material respects of the
Registration Statement; (v) an agreement (a "TRANSFER AGREEMENT") satisfactory
to Share Seller shall have been entered into between Share Purchaser and Share
Seller in connection with the sale of such Shares by Share Seller (or any such
Affiliate), which agreement shall include representations, covenants and
provisions relating to the indemnification of, and contribution in connection
with the liability of, Share Seller and its Affiliates customary in scope for
underwritten offerings of equity securities and shall provide for the payment by
Share Purchaser of all out-of-pocket expenses in connection with such sale,
including all registration costs and all fees and expenses of counsel for Share
Seller; and (vi) the representations and warranties of Share Purchaser set forth
in this Agreement and the relevant Transfer Agreement shall be true and correct
in all

                                       19
<PAGE>

material respects and Share Purchaser shall have performed its obligations set
forth herein and therein in all material respects. With respect to any sale of
Shares, Share Purchaser may request Share Seller to engage in marketing
activities, including a roadshow to investors. If Share Purchaser requests Share
Seller to engage in any marketing activities with respect to any such sale of
Shares, Share Seller shall be entitled to receive underwriting fees and
commissions, in addition to the Sale Commission, in such amounts and at such
times as both Share Seller and Share Purchaser shall mutually agree. If Share
Seller and Share Purchaser do not mutually agree on additional underwriting fees
and commissions, Share Seller shall not be obligated to engage in any marketing
activities with respect to the sale of the Shares. Notwithstanding anything to
the contrary herein, the parties agree that the actions specified in this
Section 3.6 are intended solely as a prerequisite to Share Purchaser's right to
elect net cash settlement or net share settlement pursuant to Section 3.3 or 3.4
or to exercise its right to make payments in Shares pursuant to Section 2.3(c),
and that Share Purchaser shall not otherwise be required to take any of the
actions specified in this Section 3.6.

     (b)  If on any Exchange Business Day on which there is a positive Interest
Settlement Balance or Settlement Balance any of the Registration Conditions is
not satisfied (any such date, a "REGISTRATION FAILURE DATE"), then (i) Share
Purchaser shall immediately notify Share Seller thereof and (ii) (A) Share
Seller shall be entitled to cease selling and causing to be sold Shares pursuant
to the Registration Statement and (B) Share Seller shall thereafter use
reasonable efforts to sell or cause to be sold Shares in accordance with Section
3.5 and as otherwise provided herein but on a private placement basis (or on
another basis not involving a sale pursuant to a Registration Statement);
PROVIDED that in such case Share Purchaser shall be entitled, on notice to Share
Seller, to repurchase all remaining Interest Settlement Shares and Interest
Make-Whole Shares or Settlement Shares, as the case may be, at an aggregate
price equal to the remaining Interest Settlement Balance or Settlement Balance,
as applicable, on the third Exchange Business Day following the date such notice
is received. If subsequent to a Registration Failure Date all of the
Registration Conditions are satisfied, Share Seller shall be entitled to sell or
cause to be sold all remaining Interest Settlement Shares and Interest
Make-Whole Shares or Settlement Shares, as the case may be, pursuant to the
Registration Statement.

     Section 3.7 DEFAULT INTEREST. If Share Purchaser or Share Seller fails to
perform, when due, any obligation to make a payment to the other hereunder,
Share Purchaser or Share Seller, as the case may be, shall pay interest to the
other on demand in an amount (without duplication of other interest required to
be paid hereunder on such overdue amount) equal to the product of (i) the
overdue amount, (ii) a per annum rate, reset and compounded monthly, equal to
(A) LIBOR PLUS (B) the Applicable Spread, (iii) the number of days in the period
from and including the date such performance was due to but excluding the date
of actual performance and (iv) 1/360. Share Purchaser shall be entitled, in lieu
of its obligations under this Section 3.7, to pay such amount in accordance with
Section 2.3(c) as though such amount were an Interest Cost and the date of such
demand were an Interest Payment Date.

                                       20
<PAGE>

                                   ARTICLE IV

                 REPRESENTATIONS AND WARRANTIES OF SHARE SELLER

     Section 4.1 REPRESENTATIONS AND WARRANTIES OF SHARE SELLER. Share Seller
represents and warrants to Share Purchaser, each and all of which
representations and warranties shall survive the execution and delivery of this
Agreement and shall be repeated as of any date on which Share Seller delivers or
causes to be delivered Shares to Share Purchaser or purchases or sells (or
causes the purchase or sale of) Shares pursuant to the terms hereof, that:

     (a)  Share Seller is a national banking association duly organized and
validly existing under the laws of the United States and, if relevant to its
performance hereunder or under the Collateral Agreement, is in good standing.

     (b)  Each of this Agreement, the Collateral Agreement and each other
document relating to the Transaction to which Share Seller is a party or that
Share Seller is required to deliver has been (or, in the case of the Transfer
Agreement, will on the date of delivery be) duly authorized, executed and
delivered by or on behalf of Share Seller and is (or, in the case of the
Transfer Agreement, will on the date of delivery be) a valid and binding
agreement of Share Seller, enforceable against Share Seller in accordance with
its terms, subject to applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and equitable principles of general
applicability.

     (c)  The execution and delivery by Share Seller of, and performance by
Share Seller of its obligations under, this Agreement and the Collateral
Agreement (i) will not contravene or constitute a default under any provision of
applicable law or regulation, any constitutive document of Share Seller, any
agreement or other instrument binding upon Share Seller or any of its assets or
any judgment, injunction, order or decree of any governmental body, agency,
official or court having jurisdiction over Share Seller, whether foreign or
domestic, and (ii) do not require any consent, approval, authorization or order
of, or filing or qualification with, any governmental body, agency, official,
self-regulatory organization or court or other tribunal, whether foreign or
domestic, except for informational filings with the Securities and Exchange
Commission and applicable gaming regulatory authorities.

     (d)  Any delivery of Shares by or on behalf of Share Seller pursuant to
this Agreement will pass to Share Purchaser title to such Shares free and clear
of any Liens except for any Liens caused by the actions of Share Purchaser.

                                       21

<PAGE>

                                   ARTICLE V

                REPRESENTATIONS AND WARRANTIES OF SHARE PURCHASER

     Section 5.1 REPRESENTATIONS AND WARRANTIES OF SHARE PURCHASER. Share
Purchaser represents and warrants to Share Seller as of the date hereof, as of
any date on which Share Purchaser makes a payment or delivers Shares to or at
the direction of Share Seller pursuant to the terms hereof, and as of any date
on which Share Seller purchases or sells (or causes the purchase or sale of)
Shares pursuant to the terms hereof (including in connection with a net cash or
net share settlement or the settlement of interest or commission obligations in
Shares), that:

     (a)  Share Purchaser is a corporation duly organized and validly existing
under the laws of the State of Nevada and, if relevant to its performance
hereunder or under the Collateral Agreement, is in good standing.

     (b)  Each of this Agreement, the Collateral Agreement and each other
document relating to the Transaction to which Share Purchaser is a party or that
Share Purchaser is required to deliver has been (or, in the case of the Transfer
Agreement, will on the date of delivery be) duly authorized, executed and
delivered by Share Purchaser and is (or, in the case of the Transfer Agreement,
will on the date of delivery be) a valid and binding agreement of Share
Purchaser, enforceable against Share Purchaser in accordance with its terms,
subject to applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally and equitable principles of general applicability.

     (c)  The execution and delivery by Share Purchaser of, and the performance
by Share Purchaser of its obligations under, this Agreement and the Collateral
Agreement (i) will not contravene or constitute a default under any provision of
applicable law or regulation or any constitutive document of Share Purchaser or
any agreement or other instrument binding upon Share Purchaser or any of its
assets or any judgment, injunction, order or decree of any governmental body,
agency, official or court having jurisdiction over Share Purchaser, whether
foreign or domestic, and (ii) do not require any consent, approval,
authorization, order of, or filing or qualification with, any governmental body,
agency, official, self-regulatory organization or court or other tribunal,
whether foreign or domestic, except for (A) such consents, approvals,
authorizations, orders, filings or qualifications (1) as have been obtained or
(2) as may be required following the date hereof in connection with the
satisfaction of the Registration Conditions and (B) informational filings with
the Securities and Exchange Commission and applicable gaming regulatory
authorities.

     (d)  Share Purchaser has a valid business purpose for entering into this
Agreement, and the Transaction contemplated hereby is consistent with Share
Purchaser's overall investment and business strategy.

                                       22
<PAGE>

     (e)  Share Purchaser is not entering into this Agreement or the Transaction
contemplated hereby to create actual or apparent trading activity in the Shares
(or any security convertible into or exchangeable for such Shares) or to raise
or depress or otherwise manipulate the price of such Shares (or any security
convertible into or exchangeable for such Shares).

     (f)  Share Purchaser (i) has had access to such information regarding this
Transaction and the other parties as it requires, (ii) has knowledge and
experience in financial and business matters and is capable of evaluating the
merits and risks of this Transaction and is able to bear the economic risk
thereof, (iii) is not entering into this transaction in reliance on tax,
accounting, legal, regulatory or other financial advice from Share Seller or
Share Seller's advisors and (iv) is solvent and able to pay its debts as they
come due, with assets having a fair value greater than the amount of its
liabilities and with capital sufficient to carry on the businesses in which it
engages.

     Section 5.2. ADDITIONAL REPRESENTATIONS OF SHARE PURCHASER.

     (a)  Share Purchaser represents and warrants to Share Seller as of each
Initial Period Date on which Share Seller purchases or causes the purchase of
Shares pursuant to Section 2.2 that, assuming Share Seller's purchases are made
in accordance with Share Seller's covenant in Section 6.5, if Share Purchaser
were to have purchased such Shares in the same manner, such purchase would have
been in compliance with applicable law and all contractual obligations of Share
Purchaser and its Affiliates.

     (b)  Share Purchaser represents and warrants to Share Seller as of each day
on which Share Seller purchases or sells, or causes the purchase or sale of,
Shares pursuant to this Agreement (including in connection with a net cash or
net share settlement or the settlement of interest or commission obligations in
Shares) that there is no misstatement of material fact contained in its filings
under the Exchange Act or omission of a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case as if
such filing spoke of the date of this representation.

     (c)  Share Purchaser represents and warrants to Share Seller in respect of
any Shares delivered to or at the direction of Share Seller that such Shares
shall be, upon such delivery, duly authorized, validly issued, fully paid and
nonassessable, and subject to no adverse claims of any other party other than as
provided in the Collateral Agreement.

     (d)  Share Purchaser represents and warrants to Share Seller that its
present intention is to elect physical settlement in connection with each
Principal Payment Date.

     (e)  Share Purchaser represents and warrants to Share Seller that it is
entering into this Agreement in connection with its Share repurchase program
which was

                                       23
<PAGE>

approved by its board of directors on May 18, 2000 and publicly announced on May
18, 2000, solely for the purposes stated in such board resolution and public
disclosure.

     (f)  Share Purchaser represents and warrants that the execution and
delivery by Share Seller and the Trust of, and performance by Share Seller and
the Trust of their respective obligations under, this Agreement and the
Collateral Agreement do not require any consent, approval, authorization or
order of, or filing or qualification with, any gaming regulatory authority with
respect to Share Seller or the Trust, except for such consents, approvals,
authorizations, orders, filings or qualifications as have been obtained or made
on or prior to the date hereof and except for the filing of the Transaction
Documents, the Amended and Restated Trust Agreement of the Trust, any related
agreements with respect to the Transaction, any amendments or supplements to any
of the foregoing and other informational filings to be performed by Share
Purchaser with applicable gaming regulatory authorities following the Closing
Date, and subject to the right of any applicable gaming regulatory authority, to
the extent permitted by applicable law, to require any Person holding beneficial
ownership of the Shares to apply for a determination of suitability with respect
to such holding.

                                   ARTICLE VI

                                    COVENANTS

     Section 6.1 TAX TREATMENT. (a) Share Seller acknowledges that Share
Purchaser, solely for U.S. tax purposes, (i) will treat the transaction
contemplated by the Transaction Documents (the "TRANSACTION") as a series of
purchases of Shares by Share Purchaser on the dates on which Shares are acquired
by or on behalf of Share Seller, which Shares are pledged by Share Purchaser to
Share Seller and held by the Collateral Agent to secure a purchase loan from
Share Seller to Share Purchaser in the total amount of the Aggregate Forward
Amount, (ii) will treat Share Seller as entitled to repayment of such purchase
loan in cash and will treat the Initial Interest Costs, Interest Costs, Maturity
Interest Cost and Settlement Interest Costs as interest paid in cash by Share
Purchaser to Share Seller, regardless of whether such cash is derived directly
from Share Purchaser or from the sale of Shares provided by Share Purchaser or
any other source, and (iii) will treat Share Seller as acting for Share
Purchaser's account in connection with any purchase or sale of Shares under
Sections 2.2 or 3.5 hereof.

     (b)  Share Seller agrees to use reasonable efforts to notify Share
Purchaser in writing of any written request for information from, audit by,
proposed adjustment from or other inquiry by or dispute with any applicable
taxing authority (a "TAX INQUIRY") that concerns the treatment of the
Transaction for U.S. tax purposes within thirty business days of the receipt of
the relevant communication from such taxing authority.

     Section 6.2 FURTHER ASSURANCES. From time to time from and after the date
hereof through the later of the final Settlement Date and, if applicable, the
date the

                                       24
<PAGE>

final Settlement Balance is reduced to zero, each party hereto shall
use its good faith efforts to take, or cause to be taken, all actions and to do,
or cause to be done, all things necessary, proper and advisable to consummate
and make effective as promptly as practicable the transactions contemplated by
this Agreement in accordance with the terms and conditions hereof, including (i)
using good faith efforts to remove any legal impediment to the consummation of
such transactions and (ii) the execution and delivery of all such deeds,
agreements, assignments and further instruments of transfer and conveyance
necessary, proper or advisable to consummate and make effective the transactions
contemplated by this Agreement in accordance with the terms and conditions
hereof.

     Section 6.3 MAINTAIN AUTHORIZATIONS. Each party hereto shall use all
reasonable efforts to maintain in full force and effect all consents of any
governmental or other authority that are required to be obtained by it with
respect to this Agreement or any Transaction Document to which it is a party and
shall use all reasonable efforts to obtain any that may become necessary in the
future.

     Section 6.4 COMPLY WITH LAWS. Each party hereto shall comply in all
material respects with all applicable laws and orders to which it may be subject
if failure so to comply would materially impair its ability to perform its
obligations under this Agreement or the Collateral Agreement.

     Section 6.5 RULE 10b-18. Share Purchaser agrees that it will not
(i) purchase any Shares in the public markets other than through Banc of America
Securities LLC on any Initial Period Date on which Share Seller may purchase or
cause the purchase of Shares pursuant to Section 2.2 or (ii) take any other
action that would prevent Share Seller from purchasing or causing the purchase
of Shares in compliance with Rule 10b-18(b) under the Exchange Act on any such
Initial Period Date. Share Seller shall effect and shall cause its Affiliates
and the Trust to effect any purchases of Shares during the Initial Period in
compliance with the requirements of Rule 10b-18(b), assuming for these purposes
that such Persons were Share Purchaser and its "affiliated purchasers" (as
defined in Rule 10b-18).

     Section 6.6 SECURITIES CONTRACT; STATUS OF OBLIGATIONS. (a) The parties
hereto acknowledge and agree that it is their intention that (i) Share Seller be
treated as a "financial institution" within the meaning of Section 101(22) of
Title 11 of the United States Code (the "BANKRUPTCY CODE"), (ii) this Agreement
be treated as a "securities contract" within the meaning of Section 741(7) of
the Bankruptcy Code entitled to the protection of Section 555 of the Bankruptcy
Code, and a "swap agreement" within the meaning of Section 101(53B) of the
Bankruptcy Code entitled to the protection of Section 560 of the Bankruptcy
Code, and (iii) each delivery of Shares under this Agreement or the Collateral
Agreement is a "settlement payment" within the meaning of Section 741(8) of the
Bankruptcy Code.

                                       25
<PAGE>

     (b)  The parties agree that in the event of a bankruptcy or insolvency with
respect to Share Purchaser, Share Seller shall have no greater rights against
Share Purchaser hereunder than would a holder of Shares; PROVIDED, HOWEVER, that
in pursuing a claim against Share Purchaser under such circumstances, Share
Seller's rights hereunder shall rank on a parity with the rights of a holder of
Shares enforcing similar rights with respect to a contract involving Shares.

     Section 6.7 INDEMNITY. Share Purchaser agrees to indemnify Share Seller,
the Trust and their respective Affiliates and their respective directors,
officers, employees, agents and controlling persons (Share Seller and each such
person being an "INDEMNIFIED PARTY") from and against any and all losses,
claims, damages and liabilities, joint and several, to which such Indemnified
Party may become subject under any applicable federal or state law or otherwise,
and related to or arising out of any of the transactions contemplated by this
Agreement, and will reimburse any Indemnified Party for all expenses (including
reasonable counsel fees and expenses) as they are incurred in connection with
the investigation of, preparation for or defense or settlement of any pending or
threatened claim or any action or proceeding arising therefrom, whether or not
such Indemnified Party is a party and whether or not such claim, action or
proceeding is initiated or brought by or on behalf of Share Purchaser. Share
Purchaser shall not be liable under the foregoing indemnification provision to
the extent that any loss, claim, damage, liability or expense is found in a
nonappealable judgment by a court of competent jurisdiction to have resulted
from Share Seller's willful misconduct or gross negligence. The provisions of
this Section 6.7 shall survive any termination of this Agreement or completion
of the transactions contemplated hereby.

     Section 6.8 MAXIMUM DELIVERABLE SHARES. Share Purchaser agrees that while
the Transaction is outstanding it shall not take any action or permit any action
to be taken that may cause an Available Shares Shortfall to exist.

                                  ARTICLE VII

                 EXTRAORDINARY EVENTS, ADJUSTMENTS AND DIVIDENDS

     Section 7.1 EXTRAORDINARY EVENTS. If any Merger Event shall occur prior to
the later of the final Settlement Date and, if applicable, the date the final
Settlement Balance is reduced to zero, the provisions of Sections 7.2 through
7.6 shall apply.

     Section 7.2 SHARE FOR SHARE MERGER. If in respect of a Merger Event the
consideration for the Shares consists (or, at the option of the holder of the
Shares, may consist) solely of publicly traded shares (whether of the offeror or
a third party) (such shares, "NEW SHARES"), then on and after the Merger Date
the number of New Shares to which a holder of a number of Shares equal to the
Number of Shares would be entitled upon consummation of the Merger Event will be
deemed the "Number of Shares" (adjusted appropriately to reflect purchases of
Shares during the Initial Period and sales

                                       26
<PAGE>

of Shares in connection with the reduction of a Settlement Balance) and the New
Shares and their issuer will be deemed the "Shares" and the "Issuer",
respectively. The Calculation Agent shall adjust as it determines appropriate
any other relevant terms of this Agreement or the Collateral Agreement as a
result of such Merger Event.

          Section 7.3 SHARE FOR OTHER MERGER. Except as provided in Section 7.5,
if in respect of a Merger Event the consideration for the Shares consists solely
of (i) cash and any securities (other than New Shares) or (ii) assets (whether
of the offeror or a third party) ((i) and (ii) collectively, "OTHER
CONSIDERATION"), then on and after the Merger Date the amount of Other
Consideration (as subsequently modified in accordance with the relevant terms
and including the proceeds of any redemption, if applicable) to which a holder
of a number of Shares equal to the Number of Shares would be entitled upon
consummation of the Merger Event will be deemed the "Number of Shares" (adjusted
appropriately to reflect purchases of Shares during the Initial Period and sales
of Shares in connection with the reduction of a Settlement Balance), the Other
Consideration will be deemed the "Shares," and a Mandatory Prepayment Date shall
occur with respect to the entire Aggregate Forward Amount on the first Exchange
Business Day on which a holder of the Shares, having received the Other
Consideration, would be able to deliver such Other Consideration to another
party. The Calculation Agent shall adjust as it determines appropriate any other
relevant terms of this Agreement or the Collateral Agreement as a result of such
Merger Event.

          Section 7.4 SHARE FOR COMBINED MERGER. If in respect of a Merger Event
the consideration for the Shares consists of New Shares and Other Consideration,
then on and after the Merger Date the number of New Shares to which a holder of
a number of Shares equal to the Number of Shares would be entitled upon
consummation of the Merger Event will be deemed the "Number of Shares" (adjusted
appropriately to reflect purchases of Shares during the Initial Period and sales
of Shares in connection with the reduction of a Settlement Balance), the New
Shares and their issuer will be deemed the "Shares" and the "Issuer",
respectively, and the amount of Other Consideration (as subsequently modified in
accordance with any relevant terms and including proceeds of any redemption, if
applicable) to which such holder would be entitled upon the consummation of the
Merger Event shall be deemed to be an Extraordinary Dividend. The Calculation
Agent shall adjust as it determines appropriate any other relevant terms of this
Agreement or the Collateral Agreement as a result of such Merger Event.

          Section 7.5 CASH MERGER. If in respect of a Merger Event the
consideration for the Shares consists solely of cash, then on or prior to the
Merger Date, Share Seller shall, upon notice to Share Purchaser, designate a
Mandatory Prepayment Date with respect to the entire Aggregate Forward Amount.
Share Purchaser, promptly on receipt of such notice, shall deliver written
notice to Share Seller, the Trust and the Collateral Agent setting forth its
settlement election pursuant to Article III with respect to such Mandatory
Prepayment Date. If necessary, the Calculation Agent shall adjust as it

                                       27
<PAGE>

determines appropriate any other relevant terms of this Agreement or the
Collateral Agreement as a result of such Merger Event.

          Section 7.6 POSTPONEMENT OF DELIVERY; ELECTION OF CONSIDERATION.
(a) From and after the occurrence of a Merger Event, if as of any date Shares
are required to be delivered under this Agreement a holder of Shares would not
yet have received the New Shares to which it is entitled as a result of such
Merger Event, such delivery date shall be postponed to the first Exchange
Business Day on which such holder, having received the New Shares, would be able
to transfer such New Shares to another party.

          (b)  In respect of any Merger Event, to the extent that a holder of
Shares would be entitled to elect the consideration to be received in connection
with such Merger Event, Share Seller shall be entitled, after consultation with
Share Purchaser, to make such election for purposes of Sections 7.2 through 7.5.

          Section 7.7 ADJUSTMENTS. In the event of any stock split, reverse
stock split, stock dividend, subdivision, consolidation or reclassification of
Shares or other similar event that may have a diluting or concentrative effect
on the theoretical value of the Shares (unless a Merger Event), the Calculation
Agent shall adjust as it determines appropriate the Number of Shares and/or any
other relevant terms of this Agreement or the Collateral Agreement to account
for that diluting or concentrative effect and determine the effective date of
such adjustments.

          Section 7.8 DIVIDENDS. (a) If an "ex-dividend" date in relation to a
dividend or other distribution of cash (other than an Extraordinary Dividend)
occurs with respect to the Shares on or prior to the later of the final
Settlement Date and, if applicable, the date the final Settlement Balance is
reduced to zero, Share Seller shall pay or cause to be paid to Share Purchaser,
on the related payment date, the amount of all dividends or other distributions
to which a holder of a number of Shares equal to the Number of Shares (adjusted
appropriately to reflect purchases of Shares during the Initial Period and sales
of Shares in connection with the reduction of a Settlement Balance) as of such
"ex-dividend" date would be entitled.

          (b)  If an "ex-dividend" date in relation to an extraordinary cash or
non-cash dividend or other distribution (other than a dividend or other
distribution resulting in an adjustment pursuant to Section 7.7) (an
"EXTRAORDINARY DIVIDEND") occurs with respect to the Shares on or prior to the
later of the final Settlement Date and, if applicable, the date the final
Settlement Balance is reduced to zero, Share Seller shall deliver or cause to be
delivered to Share Purchaser, on the related distribution date and in the same
form in which the Extraordinary Dividend was made, the amount of the
Extraordinary Dividend to which a holder of a number of Shares equal to the
Number of Shares (adjusted appropriately to reflect purchases of Shares during
the Initial Period and sales of Shares in connection with the reduction of a
Settlement Balance) as of such "ex-dividend" date would be entitled, against
payment by Share Purchaser to or as directed by Share Seller of cash equal to
such amount (or in the case of a non-cash Extraordinary

                                       28
<PAGE>

Dividend, the value thereof as determined by the Calculation Agent), up to the
Aggregate Forward Amount. The Aggregate Forward Amount shall be reduced by the
amount of such cash payment upon receipt thereof by or on behalf of Share Seller
or upon netting as provided in the next sentence. To the extent such
Extraordinary Dividend consists of cash, the obligation of Share Seller to
deliver or cause the delivery of such Extraordinary Dividend and the obligation
of Share Purchaser to pay in cash the amount thereof shall be netted. If, as a
result of such payment or netting the Aggregate Forward Amount is reduced to
zero, a Mandatory Prepayment Date shall occur on the Exchange Business Day
following the date of such payment or netting. The Calculation Agent shall
adjust as it determines appropriate any other relevant terms of this Agreement
or the Collateral Agreement as a result of such Extraordinary Dividend.

          Section 7.9 SPREAD ADJUSTMENT. If at any time Share Purchaser's senior
unsecured credit rating falls to or below B+ by S&P or B1 by Moody's or either
such rating is suspended or withdrawn, the Spread shall be adjusted (a
"REPRICING") to reflect then-prevailing market spreads for debt securities
issued by companies with the same rating as Share Purchaser's rating, as
determined by the Calculation Agent. If at any time following a Repricing, (i)
such credit rating or ratings are further reduced or are suspended or withdrawn
or (ii) such credit ratings are at or above BB- by S&P and Ba3 by Moody's, a
further Repricing shall occur as of the date of such change; PROVIDED that in no
event shall the Spread be less than the Initial Spread.

          Section 7.10 MAXIMUM DELIVERABLE SHARES. The parties agree that if at
any time the number of Maximum Deliverable Shares is insufficient to permit
complete settlement of Share Purchaser's obligations hereunder, then (i) the
Maximum Deliverable Shares shall be increased to the extent Share Purchaser, at
such time or thereafter, has additional authorized but unissued Shares not
reserved for other purposes as necessary to complete such settlement, and (ii)
to the extent Share Purchaser does not have such authorized Shares, Share
Purchaser shall use its best efforts to cause the number of authorized Shares to
be increased as necessary to complete such settlement. Following any such
increase in the Maximum Deliverable Shares, Share Purchaser shall be required to
complete such settlement to the extent of such increase as otherwise provided
herein. The Calculation Agent shall adjust as it determines appropriate any
relevant terms of this Agreement in connection therewith.

                                  ARTICLE VIII

                                EVENTS OF DEFAULT

          Section 8.1 EVENTS OF DEFAULT. The occurrence of one or more of the
following events with respect to Share Purchaser or Share Seller shall
constitute an "EVENT OF DEFAULT" with respect to such party:

          (a)  such party shall commence a voluntary case or other proceeding
seeking a liquidation, reorganization or other relief with respect to itself or
its debts under

                                       29
<PAGE>

any bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or shall consent
to any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
shall take any action to authorize any of the foregoing;

          (b)  an involuntary case or other proceeding shall be commenced
against such party seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
conservator, liquidator, custodian or other similar official of any substantial
part of its property (and such case or proceeding is not stayed or dismissed
within 30 days), or an order for relief shall be entered against such party
under the federal bankruptcy laws or a receiver or conservator is appointed
under federal insolvency laws, in each case as now or hereafter in effect;

          (c)  any representation made or repeated or deemed to have been made
or repeated by such party under this Agreement proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have been
made or repeated and remains incorrect or misleading in any material respect;

          (d)  such party fails to fulfill or discharge when due any of its
obligations, covenants or agreements under or relating to this Agreement or the
Collateral Agreement other than an obligation referred to in subparagraph (e)
below, and in any case such failure is not cured within 30 days after notice
thereof from the other party;

          (e)  failure by such party to make, when due, a payment or delivery of
Shares hereunder or under the Collateral Agreement, if such failure is not cured
within three Business Days after notice thereof from the other party; or

          (f)  with respect to Share Purchaser only, Share Purchaser and any of
its Significant Subsidiaries (i) fails to pay the principal, or any principal
installment, of any present or future indebtedness for borrowed money of
$25,000,000 or more, or any guaranty of present or future indebtedness for
borrowed money of $25,000,000 or more, on its part to be paid, when due (or
within any stated grace period), whether at the stated maturity, upon
acceleration, by reason of required prepayment or otherwise or (ii) fails to
perform or observe any other term, covenant or agreement on its part to be
performed or observed, or suffers any event to occur, in connection with any
present or future indebtedness for borrowed money of $25,000,000 or more, or of
any guaranty of present or future indebtedness for borrowed money of $25,000,000
or more, if as a result of such failure or sufferance any holder or holders
thereof (or an agent or trustee on its or their behalf) has the right to declare
such indebtedness due before the date on which it otherwise would become due.

                                       30
<PAGE>

          Section 8.2 CONSEQUENCES OF EVENTS OF DEFAULT. If an Event of Default
with respect to Share Purchaser or Share Seller (in such case, the "DEFAULTING
PARTY") has occurred and is continuing, then the other (the "NON-DEFAULTING
PARTY"), upon notice to the Defaulting Party, shall be entitled to designate an
Exchange Business Day on or after the date such notice is effective as a
Mandatory Prepayment Date with respect to the entire Aggregate Forward Amount;
PROVIDED that upon the occurrence of an Event of Default as set forth in
subsections (a), (b), (e) or, if caused by a failure to make a payment, (f) of
Section 8.1 with respect to Share Purchaser, the Exchange Business Day following
such occurrence shall be automatically designated as a Mandatory Prepayment Date
with respect to the entire Aggregate Forward Amount. Upon receipt by the
Defaulting Party of such notice or upon such automatic designation of a
Mandatory Prepayment Date, Share Purchaser shall promptly deliver written notice
to Share Seller, the Trust and the Collateral Agent setting forth its settlement
election pursuant to Article III with respect to such Mandatory Prepayment Date.
If Share Purchaser fails to perform its obligations in connection with any such
Mandatory Prepayment Date and Share Purchaser's obligations to Share Seller are
satisfied from the proceeds of Collateral pursuant to the Collateral Agreement,
the Aggregate Forward Amount will be treated as paid to the extent of such
proceeds.

                                   ARTICLE IX

                                  MISCELLANEOUS

          Section 9.1 ASSIGNMENT BY SHARE SELLER. Notwithstanding any other
provisions in this Agreement to the contrary requiring or allowing Share
Purchaser to purchase, sell, receive or deliver any Shares or other securities
to or from Share Seller, Share Seller may designate the Trust or any of Share
Seller's Affiliates to purchase, sell, receive or deliver such Shares or other
securities and otherwise to perform Share Seller's obligations in respect of the
Transaction and any such designee shall assume such obligations. Share Seller
shall be discharged of its obligations to Share Purchaser only to the extent of
any such performance.

          Section 9.2 DISCLOSURE. Share Purchaser is expressly authorized to
disclose any and all aspects of this transaction (and any related transactions)
to any and all Persons, without limitation of any kind.

          Section 9.3 TRANSFERS. (a) Share Seller shall have the right to
assign, in whole or in part, its rights and corresponding obligations under this
Agreement to one or more other Persons, subject to Share Purchaser's consent,
which consent shall not be unreasonably withheld.

          (b)  Any Person to whom any rights or obligations under this Agreement
are assigned shall be subject to all the terms and conditions of this Agreement
and the Collateral Agreement. Any assignment in violation of this Agreement
shall be null and void.

                                       31
<PAGE>

          (c)  Share Purchaser shall not have the right to transfer any of its
rights or obligations under this Agreement.

          Section 9.4 NOTICES. Except as otherwise provided herein, all notices
and other communications hereunder shall be in writing and shall be deemed to
have been duly given if mailed or transmitted by any standard forms of
telecommunication and shall be effective upon receipt.

                  Notices to Share Purchaser shall be directed to:

                           Mandalay Resort Group
                           3950 Las Vegas Boulevard South
                           Las Vegas, Nevada 89119
                           Attention:  Glenn W. Schaeffer, President
                           Facsimile:  (702) 632-6715

                  Notices to Share Seller shall be directed to:

                           Bank of America, N.A.
                           c/o Banc of America Securities LLC
                           9 West 57th Street
                           New York, New York  10019
                           Attention: Chris Innes
                           Facsimile: (212) 583-8457

                  with a copy to:

                           Bank of America, N.A.
                           c/o Banc of America Securities LLC
                           9 West 57th Street
                           40th Floor
                           New York, New York 10019
                           Attention:  Equity Financial Products, Middle Office
                           Facsimile:  (212) 583-8369

                  Notices to the Trust shall be directed to:

                           MBG Trust
                           c/o Wilmington Trust Company
                           Rodney Square North
                           1100 North Market Street
                           Wilmington, Delaware 19890-0001
                           Attention:  Corporate Trust Administration
                           Facsimile:  (302) 651-8882

                                       32
<PAGE>

          Section 9.5 GOVERNING LAW; SEVERABILITY; SUBMISSION TO JURISDICTION;
WAIVER OF JURY TRIAL.

          (a)  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO CHOICE OF LAW
PRINCIPLES).

          (b)  To the extent permitted by law, the unenforceability or
invalidity of any provision or provisions of this Agreement shall not render any
other provision or provisions herein contained unenforceable or invalid.

          (c)  EACH PARTY HERETO IRREVOCABLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK OR THE SUPREME COURT OF THE STATE OF NEW YORK FOR THE COUNTY OF NEW
YORK FOR THE PURPOSE OF ANY ACTION, SUIT OR OTHER PROCEEDING ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY ("PROCEEDINGS"). EACH PARTY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION IT MAY HAVE AT ANY TIME TO
THE LAYING OF VENUE OF ANY PROCEEDINGS IN SUCH COURTS, WAIVES ANY CLAIM THAT
SUCH PROCEEDINGS HAVE BEEN BROUGHT IN ANY INCONVENIENT FORUM AND FURTHER WAIVES
THE RIGHT TO OBJECT WITH RESPECT TO SUCH PROCEEDINGS THAT SUCH COURTS DO NOT
HAVE JURISDICTION OVER SUCH PARTY.

          (d)  ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY PROCEEDINGS IS
HEREBY WAIVED BY ALL PARTIES TO THIS AGREEMENT.

          (e)  SERVICE OF PROCESS. The parties irrevocably consent to service of
process given in any manner provided for notices in Section 9.4 that is
permitted by law. Nothing in this Agreement will affect the right of any party
to serve process in any other manner permitted by law.

          Section 9.6 ENTIRE AGREEMENT. Except as expressly set forth herein,
this Agreement and the Collateral Agreement constitute the entire agreement
among the parties with respect to the subject matter hereof and supersedes all
prior agreements, understandings and negotiations, both written and oral, among
the parties with respect to the subject matter of this Agreement.

          Section 9.7 AMENDMENTS, WAIVERS. Any provision of this Agreement may
be amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Share Purchaser, Share Seller and,
solely in the case of an amendment that affects the rights or obligations of the
Trust hereunder, the

                                       33
<PAGE>

Trust, or, in the case of a waiver, by the party against whom the waiver is to
be effective. No failure or delay by either party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.

          Section 9.8 NO THIRD PARTY RIGHTS, SUCCESSORS AND ASSIGNS. This
Agreement is not intended and shall not be construed to create any rights in any
person other than Share Seller, Share Purchaser, the Trust, the Persons referred
to in Section 6.7 and their respective successors and permitted assigns and no
other person shall assert any rights as third party beneficiary hereunder.
Whenever any of the parties hereto is referred to, such reference shall be
deemed to include the successors and permitted assigns of such party. All
covenants and agreements herein contained by or on behalf of Share Seller, Share
Purchaser and the Trust shall bind, and inure to the benefit of, their
respective successors and permitted assigns whether so expressed or not and
shall be enforceable by and inure to the benefit of Share Seller, Share
Purchaser and the Trust and each of their successors and permitted assigns.

          Section 9.9 COUNTERPARTS. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.

          Section 9.10 LIMITATION OF LIABILITY OF THE TRUSTEE. It is expressly
understood and agreed by the parties hereto that (a) this Agreement is executed
and delivered by Wilmington Trust Company, not individually or personally but
solely as trustee of the Trust, in the exercise of the powers and authority
conferred and vested in it, (b) each of the representations, undertakings and
agreements herein made on the part of the Trust is made and intended not as
personal representations, undertakings and agreements by Wilmington Trust
Company but made and intended for the purpose of binding only the Trust, (c)
nothing herein contained shall be construed as creating any liability on
Wilmington Trust Company, individually or personally, to perform any covenant,
either expressed or implied, contained herein, all liability, if any, being
expressly waived by the parties hereto and by any person claiming by, through or
under the parties hereto and (d) under no circumstances shall Wilmington Trust
Company be personally liable for the payment of any indebtedness or expenses of
the Trust or be liable for the breach of any obligation, representation,
warranty or covenant made or undertaken by the Trust under this Agreement or any
other related documents.

          Section 9.11 BANKRUPTCY NON-PETITION. Each of Share Seller and Share
Purchaser hereby agrees that it will not, until such time as it becomes a
Non-Defaulting Party, acquiesce, petition or otherwise invoke or cause the Trust
to invoke the process of any court or governmental authority for the purpose of
commencing or sustaining a case against the Trust under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar

                                       34
<PAGE>

official of the Trust or any substantial part of its property, or ordering the
winding up or liquidation of the affairs of the Trust.

          Section 9.12 PAYMENTS. All payments required to be made hereunder
shall be made in United States dollars in immediately available funds to the
account specified in advance by the recipient of such payment.

          Section 9.13 CALCULATION AGENT. Except as otherwise expressly provided
herein, Share Seller shall make all calculations, adjustments and determinations
required pursuant to this Agreement (Share Seller acting in such capacity, the
"CALCULATION AGENT"), and the Calculation Agent's good faith calculations,
adjustments and determinations shall be binding absent manifest error.

                                       35

<PAGE>

     IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first above written.

MANDALAY RESORT GROUP, as Share Purchaser

By: /s/ GLENN W. SCHAEFFER
   ------------------------------------------
     Name:        Glenn W. Schaeffer
     Title:       President

MBG TRUST, as the Trust

By:  WILMINGTON TRUST COMPANY,
     not in its individual capacity but solely
     as Trustee

By:  /s/ JAMES P. LAWLER
   ------------------------------------------
     Name:        James P. Lawler
     Title:       Vice President

BANK OF AMERICA, N.A., as Share Seller

By:  /s/ WILLIAM C. CACCAMISE
   ------------------------------------------
     Name:        William C. Caccamise
     Title:       Authorized Signatory<PAGE>

                                                                 EXHIBIT 10(b)

                              COLLATERAL AGREEMENT

     COLLATERAL AGREEMENT (this "AGREEMENT"), dated as of September 8, 2000,
among MBG Trust, a Delaware business trust ("PLEDGOR"), Mandalay Resort Group, a
Nevada corporation ("SHARE PURCHASER"), Bank of America, N.A., a national
banking association ("SHARE SELLER," and together with Share Purchaser, the
"SECURED PARTIES"), and Banc of America Securities LLC, a Delaware limited
liability company, as "securities intermediary" (as defined in Section 8-102(a)
of the UCC) and collateral agent for the Secured Parties (the "COLLATERAL
AGENT").

                              W I T N E S S E T H:

     WHEREAS, Share Purchaser, Share Seller and Pledgor have entered into that
certain Stock Purchase Agreement, dated as of the date hereof (the "STOCK
PURCHASE AGREEMENT"), pursuant to which Share Purchaser has agreed to purchase,
and Share Seller has agreed to sell, a certain number of shares of the common
stock of Share Purchaser (the "SHARES");

     WHEREAS, Shares will be purchased pursuant to the Stock Purchase Agreement
and delivered to the Collateral Agent; and

     WHEREAS, in order to secure the obligations of Share Purchaser and Share
Seller under the Stock Purchase Agreement, Pledgor has agreed to enter into this
Agreement pursuant to which the Initial Shares, any Purchaser Interim Settlement
Shares and any Substitute Collateral (each as defined herein) shall be pledged
to the Collateral Agent for the benefit of the Secured Parties.

     NOW, THEREFORE, in consideration of their mutual covenants herein
contained, the parties hereto, intending to be legally bound, hereby mutually
covenant and agree as follows:

     1. DEFINITIONS.

          1.1  CERTAIN DEFINITIONS. Capitalized terms not defined in this
Section 1.1 or used and not otherwise defined herein shall have the meanings set
forth in the Stock Purchase Agreement.

          "CASH COLLATERAL" means funds denominated in United States dollars and
pledged hereunder to the Collateral Agent.

          "CLEARANCE SYSTEM" means The Depository Trust Company, or any
successor to or transferee of such clearance system.

          "COLLATERAL" has the meaning set forth in Section 4(a) of this
Agreement.

          "COLLATERAL ACCOUNT" means the account established pursuant to Section
2.1(a) of this Agreement.

<PAGE>

          "COLLATERAL AGENT" has the meaning set forth in the initial paragraph
of this Agreement.

          "COLLATERAL SHARES" means all Shares Delivered to the Collateral Agent
and credited to the Collateral Account from time to time, including the Initial
Shares, Purchaser Interim Settlement Shares, Make-Whole Shares, Interest
Settlement Shares and Interest Make-Whole Shares.

          "DELIVERY" means (a) in the case of certificated securities (other
than those described in clause (c)), delivery to the Collateral Agent of
certificates representing such securities, registered in the name of the
Collateral Agent or its nominee, free and clear of all liens, security interests
or other encumbrances of any kind (other than the Security Interests),
accompanied by any required transfer tax stamps, all in form and substance
satisfactory to the Collateral Agent, and the crediting of such securities to
the Collateral Account, (b) in the case of uncertificated securities,
registration by the issuer of such securities in the name of the Collateral
Agent or its nominee, accompanied by any required transfer tax stamps, and the
crediting of such securities to the Collateral Account, (c) in the case of
Initial Shares or any securities in respect of which security entitlements are
held through a securities intermediary, the crediting of such securities, free
and clear of all liens, security interests or other encumbrances of any kind
(other than the Security Interests), to a securities account of the Collateral
Agent at such securities intermediary or at another securities intermediary
satisfactory to the Collateral Agent, and (d) in the case of cash (including all
or any portion of the Cash Collateral), (i) with respect to cash delivered to
the Collateral Agent, in accordance with such delivery instructions as the
Collateral Agent may give to the relevant transferor from time to time by
written notice hereunder, (ii) with respect to cash delivered by the Collateral
Agent, in accordance with such delivery instructions as the transferee may give
to the Collateral Agent from time to time by written notice hereunder or (iii)
otherwise in accordance with the terms hereof. The terms "Deliver," "Delivered"
and "Delivering" have corresponding meanings.

          "DELIVERY AMOUNT" has the meaning set forth in Section 2.7(b) of this
Agreement.

          "DESIGNATED BROKER" means Banc of America Securities LLC.

          "ELIGIBLE SUBSTITUTE COLLATERAL" means funds denominated in U.S.
dollars and U.S. Government Obligations.

          "EXCESS AMOUNT" means, for any date on which the Collateral Agent
receives proceeds of the sale of Shares pursuant to Section 2.5(b)(i), the
excess, if any, of such proceeds over the amounts payable in respect thereof on
such date to Share Purchaser or Share Seller pursuant to Section 3.3 of the
Stock Purchase Agreement, as appropriate.

          "FINANCING STATEMENT" means the financing statement(s) on form UCC-1
substantially in the form of Exhibit I hereto to be filed with the Secretary of
State of the State of Delaware.

          "INDEMNIFIED PARTY" has the meaning set forth in Section 13(g) of this
Agreement.

                                       2

<PAGE>

          "INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as
amended.

          "LOCATION" means, with respect to any party, the place such party is
"deemed located" within the meaning of Section 9-103(3)(d) of the UCC.

          "MERGER EVENT NOTICE" means a notice of any Merger Event or potential
Merger Event.

          "OTHER LIENS" has the meaning set forth in Section 3(b)(iv) of this
Agreement.

          "PLEDGOR" has the meaning set forth in the initial paragraph of this
Agreement.

          "PROCEEDS" means all proceeds, including cash, instruments, securities
and other property, from time to time received, receivable or otherwise
distributed in respect of, in exchange for or upon the exercise or disposition
of any or all of the Collateral hereunder.

          "RETURN AMOUNT" has the meaning set forth in Section 2.7(c) of this
Agreement.

          "SECURED OBLIGATIONS" means the obligations secured under this
Agreement including (a) all obligations of Pledgor under this Agreement or the
Stock Purchase Agreement, (b) all obligations of Share Seller under the Stock
Purchase Agreement and (c) all obligations of Share Purchaser under the Stock
Purchase Agreement. The Secured Obligations shall include any interest, costs,
fees, expenses and indemnities which accrue on or with respect to any of the
foregoing, whether before or after the commencement of any case, proceeding or
other action relating to the bankruptcy, insolvency or reorganization of
Pledgor.

          "SECURED PARTIES" has the meaning set forth in the initial paragraph
of this Agreement.

          "SECURITY" or "SECURITIES" has the meaning set forth in Section
8-102(a)(15) of the UCC.

          "SECURITY INTERESTS" means the security interests in the Collateral
granted under this Agreement securing the Secured Obligations.

          "SHARE PURCHASER" has the meaning set forth in the initial paragraph
of this Agreement.

          "SHARE SELLER" has the meaning set forth in the initial paragraph of
this Agreement.

          "SHARES" has the meaning set forth in the first Whereas clause on page
1.

          "STOCK PURCHASE AGREEMENT" has the meaning set forth in the first
Whereas clause on page 1.

                                       3

<PAGE>

          "SUBSTITUTE COLLATERAL" means all Eligible Substitute Collateral,
distributions thereon and any Proceeds thereof transferred or Delivered to or in
the possession of or received by the Collateral Agent pursuant to this Agreement
and not transferred to Pledgor or released by the Collateral Agent hereunder.

          "SUBSTITUTED SHARES" means, as of any date of determination, a number
of Shares equal to the Number of Shares as of such date MINUS the number of
Collateral Shares as of such date (excluding Make-Whole Shares, Interest
Settlement Shares and Interest Make-Whole Shares).

          "TRUSTEE" means Wilmington Trust Company, not in its individual
capacity but solely in its capacity as trustee under the Trust Agreement.

          "TEMPORARY CASH INVESTMENT" means any investment in (i) direct
obligations of the United States or any agency thereof, or obligations fully
guaranteed by the United States or any agency thereof; or (ii) repurchase
agreements with respect to securities described in clause (i) entered into with
an office in the United States of a bank or trust company the senior unsecured
long-term debt of which is rated at least "A+" or better by S&P, and "A1" or
better by Moody's; provided that in each case such investment matures within
three months from the date of acquisition thereof.

          "TRUST AGREEMENT" means that certain Amended and Restated Trust
Agreement, dated as of the Closing Date, by and between Wilmington Trust
Company, as Trustee, and NMS Services (Cayman) Inc., in the form attached as
Exhibit II hereto.

          "UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York.

          "U.S. GOVERNMENT OBLIGATION" means any negotiable debt obligation
issued by the United States Treasury Department with a remaining maturity of not
more than one year.

          "VALUATION DATE" means the last Business Day in each and every week
following any substitution of Collateral pursuant to Section 2.7(a)(i); PROVIDED
that Substitute Collateral remains in the Collateral Account on such date.

          "VALUE" means, for any date of determination, (i) with respect to any
Shares, the Closing Price of such Shares on the immediately preceding Exchange
Business Day and (ii) with respect to any Eligible Substitute Collateral or
Substitute Collateral that is (A) cash, the amount thereof, or (B) a U.S.
Government Obligation, the bid price thereof on the immediately preceding
Exchange Business Day.

          1.2  RULES OF CONSTRUCTION.

          Definitions contained herein apply equally to both the singular and
plural forms of the defined terms. The words "include" and "including" shall be
deemed to be followed by the phrase "without limitation." The terms "herein,"
"hereof" and "hereunder" and other words of similar import appearing in this
Agreement refer to this Agreement as a whole and not to any particular Section,
paragraph or subdivision. The Section titles in this Agreement appear as a

                                       4

<PAGE>

matter of convenience only and shall not affect the interpretation of this
Agreement. Whenever any of the parties hereto is referred to, such reference
shall be deemed to include the successors and permitted assigns of such party.

     2.   MATTERS RELATING TO THE COLLATERAL.

          2.1  ESTABLISHMENT OF COLLATERAL ACCOUNT; INITIAL SHARES; DELIVERY AND
RETENTION OF COLLATERAL; EXCESS AMOUNTS; DELIVERY OF SHARES.

          (a)  ESTABLISHMENT OF COLLATERAL ACCOUNT. The Collateral Agent is
hereby authorized to establish in the name of the Collateral Agent on behalf of
the Secured Parties an account (the "COLLATERAL ACCOUNT") in or to which the
Collateral is to be deposited or credited, all pursuant to and in accordance
with this Agreement.

          (b)  DELIVERY OF INITIAL SHARES. At the request of Share Seller on any
Initial Period Date, Pledgor agrees on behalf of Share Seller to purchase
Initial Shares in accordance with Section 2.2 of the Stock Purchase Agreement
and to immediately Deliver such Initial Shares to the Collateral Agent for
credit to the Collateral Account. If any Delivery of Initial Shares is required
to be made on a day on which the Clearance System is not open for business, such
Delivery shall be made on the first succeeding day on which the Clearance System
is open for business.

          (c)  HOLDING OF COLLATERAL. The Collateral Agent shall hold all
Collateral in trust only and shall not release such Collateral or any Proceeds
thereof from the Collateral Account unless such release is expressly authorized
by the terms of this Agreement. The parties hereto hereby acknowledge and agree
that neither Pledgor nor the Secured Parties shall have any right to substitute,
sell, transfer, hypothecate, encumber or otherwise dispose of the Collateral or
any Proceeds thereof except as expressly authorized by the provisions of this
Agreement.

          (d)  INVESTMENT OF EXCESS AMOUNTS. The Collateral Agent shall invest
all Excess Amounts held by it on any date in Temporary Cash Investments maturing
not later than the next Exchange Business Day.

          (e)  DELIVERY OF SHARES. Except as otherwise determined by the
Collateral Agent in its sole discretion, deliveries of Collateral Shares to
Share Purchaser hereunder or releases of Collateral Shares for sale pursuant to
Section 2.6 shall be made first from Purchaser Interim Settlement Shares,
Make-Whole Shares, Interest Settlement Shares or Interest Make-Whole Shares, as
appropriate, and, if such Shares are insufficient, from other Collateral Shares.

          2.2  INTEREST PAYMENTS AND COMMISSIONS.

          (a)  DIRECTION OF INTEREST PAYMENTS AND COMMISSIONS. Share Seller
agrees that Share Purchaser's Delivery to the Collateral Agent of any payments
in cash pursuant to Sections 2.3(a), (b) or (c), Sections 2.4(c) or (d) or
Section 3.7 of the Stock Purchase Agreement shall discharge Share Purchaser's
obligations under the Stock Purchase Agreement with respect to such payments.
Immediately upon receipt of any such payments, the Collateral Agent shall
Deliver such amounts to Pledgor.

                                       5

<PAGE>

          (b)  DELIVERY OF SHARES IN LIEU OF INTEREST OR COMMISSIONS. Share
Seller agrees that Share Purchaser's Delivery to the Collateral Agent of any
Shares required to be delivered by Share Purchaser pursuant to Section 2.3(c),
Sections 2.4(c) or (d) or Section 3.7 of the Stock Purchase Agreement shall
discharge Share Purchaser's obligations under the Stock Purchase Agreement with
respect to such deliveries. The parties hereby direct the Collateral Agent, and
the Collateral Agent agrees, to release such Shares for sale pursuant to Section
2.6 in accordance with Sections 2.3(c), 3.5 and 3.6 of the Stock Purchase
Agreement, against payment to the Collateral Agent of the proceeds from such
sales. Immediately upon receipt of any such proceeds, such proceeds shall be
Delivered to Pledgor except to the extent Share Purchaser is entitled to receive
such proceeds under the Stock Purchase Agreement, in which case such proceeds
shall be Delivered to Share Purchaser. In addition, to the extent Share Seller
is required to deliver any remaining Shares to Share Purchaser pursuant to such
sections, the Collateral Agent shall deliver Collateral Shares to Share
Purchaser.

          2.3  VOTING RIGHTS AND DIVIDENDS. (a) The Collateral Agent shall have
the right to receive in respect of the Collateral hereunder all dividends or
other distributions on the Collateral and Pledgor shall take all such action as
the Collateral Agent shall deem necessary or appropriate to give effect to such
right. All dividends or other distributions received with respect to the
Collateral shall be deposited in the Collateral Account. If notwithstanding the
provisions of this Agreement dividends or other payments and distributions on
the Collateral are received by Pledgor, Pledgor shall hold such assets in trust
for the benefit of the Secured Parties, segregate such assets from other assets
of Pledgor and forthwith Deliver such assets to the Collateral Agent as
Collateral in the same form as received (with any necessary endorsement).

          (b)  The parties hereby direct the Collateral Agent, and the
Collateral Agent agrees, to Deliver to Share Purchaser any cash dividend or
distribution with respect to the Shares to which Share Purchaser is entitled
under Section 7.8(a) of the Stock Purchase Agreement from any cash dividend or
distribution received by the Collateral Agent with respect to the Collateral
immediately upon receipt.

          (c)  The parties hereby direct the Collateral Agent, and the
Collateral Agent agrees, to deliver to Share Purchaser against the applicable
payment any Extraordinary Dividend to which Share Purchaser is entitled under
Section 7.8(b) of the Stock Purchase Agreement from any Extraordinary Dividend
received by the Collateral Agent with respect to the Collateral (subject to
netting as provided in such section). Share Seller agrees that Share Purchaser's
Delivery to the Collateral Agent of any payments in cash required pursuant to
Section 7.8(b) of the Stock Purchase Agreement (after taking into account any
netting provided for in such section) shall discharge Share Purchaser's
obligations under the Stock Purchase Agreement with respect to such payments.
Immediately upon receipt of any such payments (including by way of netting), the
Collateral Agent shall Deliver such amounts to Pledgor.

          (d)  The Collateral Agent shall have the right, to the extent
permitted by law, and Pledgor shall take all such action as may be necessary or
appropriate to give effect to such right, to vote and to give consents,
ratifications and waivers, and to take any other action with respect to any or
all of the Collateral Shares (or security entitlements in respect thereof),
including the receipt of any Merger Event Notice with the same force and effect
as if the Collateral Agent were the absolute and sole owner thereof. Except as
provided in Section 2.4,

                                       6

<PAGE>

with respect to any matter on which holders of Shares are entitled to vote, give
consents, ratifications and waivers or take any such other action, the
Collateral Agent shall cause the Collateral Shares to be voted, such consents,
ratifications and waivers to be given and such other actions to be taken, in the
same proportion as the votes cast, consents ratifications and waivers given and
actions taken by holders of all other Shares.

          2.4  MERGER EVENTS.

          (a)  If a Merger Event occurs during the term of the Transaction, the
Collateral Agent shall promptly forward any Merger Event Notice received by the
Collateral Agent to Share Seller and Share Purchaser. The parties hereby
instruct the Collateral Agent to tender the Collateral Shares at the address
specified in such Merger Event Notice on a date and at a time that is no later
than the latest date and time on which tenders may be made pursuant to such
Merger Event, as set forth in the Merger Event Notice. To the extent the
Collateral Agent as registered holder of Collateral Shares shall be entitled to
make any election with respect to the consideration for tendering its Shares in
connection with such Merger Event, the parties hereby instruct the Collateral
Agent to follow Share Seller's direction (after consultation by Share Seller
with Share Purchaser pursuant to the Stock Purchase Agreement) in connection
therewith.

          (b)  (i) If upon tender of such Shares, the Collateral Agent receives
any New Shares, the Collateral Agent shall credit such New Shares to the
Collateral Account, and for all purposes hereunder, such New Shares will be
deemed to be the Shares. If upon tender of such Shares, the Collateral Agent
receives cash, to the extent the Collateral Agent is not required to distribute
such amounts on the date of receipt, the Collateral Agent shall invest such cash
in Temporary Cash Investments maturing not later than the expected date of
distribution of such amounts. If upon tender of such Shares, the Collateral
Agent receives Other Consideration, the Collateral Agent shall credit such Other
Consideration to the Collateral Account.

          (ii) In connection with a Merger Event subject to Section 7.3 of the
Stock Purchase Agreement, the parties agree that the Other Consideration
received by the Collateral Agent upon tender of the Collateral Shares shall be
deemed to be Shares for purposes of this Agreement.

          (iii) In connection with a Merger Event subject to Section 7.4 of the
Stock Purchase Agreement, the parties hereby direct the Collateral Agent, and
the Collateral Agent agrees, to treat such Other Consideration as an
Extraordinary Dividend subject to the provisions of Section 2.3(c) hereof.

          2.5  PRINCIPAL PAYMENTS.

          (a)  If with respect to any Principal Payment Date Share Purchaser
elects or is deemed to have elected physical settlement pursuant to the
provisions of Sections 3.1 and 3.2 of the Stock Purchase Agreement, the parties
hereby direct the Collateral Agent, and the Collateral Agent agrees, to deliver
to Share Purchaser from the Collateral Shares on the applicable Settlement Date
the number of Shares to which Share Purchaser is entitled under Section 3.2 of
the Stock Purchase Agreement against the applicable payment. In addition, Share
Seller agrees that Share Purchaser's Delivery to the Collateral Agent of its
payment with respect to such

                                       7

<PAGE>

settlement shall discharge Share Purchaser's obligation under the Stock Purchase
Agreement with respect to such payment. Immediately upon receipt of such
payment, the Collateral Agent shall Deliver such amount to Pledgor.

          (b)  If with respect to any Principal Payment Date Share Purchaser is
entitled to elect and has elected net cash settlement pursuant to Sections 3.1
and 3.3 of the Stock Purchase Agreement:

          (i)  the parties hereby direct the Collateral Agent, and the
Collateral Agent agrees, to release a number of Collateral Shares equal to the
number of Settlement Shares for sale pursuant to Section 2.6 in accordance with
Sections 3.3, 3.5 and 3.6 of the Stock Purchase Agreement, as appropriate,
against payment to the Collateral Agent of the proceeds from such sales.
Immediately upon receipt of any such proceeds, (A) to the extent Net Sale
Amounts are payable to Share Seller pursuant to Section 3.3 of the Stock
Purchase Agreement, Share Seller directs the Collateral Agent to Deliver such
amounts to Pledgor from such proceeds, and (B) to the extent Net Sale Amounts
are payable to Share Purchaser pursuant to Section 3.3 of the Stock Purchase
Agreement, the Collateral Agent shall Deliver such amounts to Share Purchaser
from such proceeds; PROVIDED that if on any date such proceeds are insufficient
to pay such amounts, the Collateral Agent shall pay such amounts from Excess
Amounts, if any, previously received in respect of such Principal Payment Date;
PROVIDED, FURTHER, that promptly following the payment of all amounts owing
pursuant to such section in respect of such Principal Payment Date, the
Collateral Agent shall Deliver any remaining Excess Amounts with respect to such
Principal Payment Date to Pledgor.

          (ii) Share Seller agrees that Share Purchaser's Delivery to the
Collateral Agent of any payments in cash required pursuant to Section 3.3 of the
Stock Purchase Agreement shall discharge Share Purchaser's obligations under the
Stock Purchase Agreement with respect to such payments. Immediately upon receipt
of any such payments, the Collateral Agent shall Deliver such amounts to
Pledgor.

          (c)  If with respect to any Principal Payment Date Share Purchaser is
entitled to elect and has elected net share settlement pursuant to Sections 3.1
and 3.4 of the Stock Purchase Agreement:

          (i)  The parties hereby direct the Collateral Agent, and the
Collateral Agent agrees, to release a number of Collateral Shares equal to the
number of Settlement Shares for sale pursuant to Section 2.6 in accordance with
Sections 3.4, 3.5 and 3.6 of the Stock Purchase Agreement, as appropriate,
against payment to the Collateral Agent of the proceeds from such sales.
Immediately upon receipt of any such proceeds, such proceeds shall be Delivered
to Pledgor except to the extent Share Purchaser is entitled to receive such
proceeds under the Stock Purchase Agreement, in which case such proceeds shall
be Delivered to Share Purchaser. In addition, to the extent Share Seller is
required to deliver any remaining Settlement Shares to Share Purchaser pursuant
to Section 3.4 of the Stock Purchase Agreement, the Collateral Agent shall
deliver Collateral Shares to Share Purchaser.

          (ii) Share Seller agrees that Delivery by Share Purchaser to the
Collateral Agent for credit to the Collateral Account of any Make-Whole Shares
required to be delivered by

                                       8

<PAGE>

Share Purchaser under the Stock Purchase Agreement shall discharge Share
Purchaser's obligations under the Stock Purchase Agreement with respect to such
delivery.

          (iii) Share Seller agrees that Share Purchaser's Delivery to the
Collateral Agent of any payments in cash pursuant to Section 3.4 of the Stock
Purchase Agreement shall discharge Share Purchaser's obligations under the Stock
Purchase Agreement with respect to such payments. Immediately upon receipt of
any such payments, the Collateral Agent shall Deliver such amounts to Pledgor.

          (d)  Share Seller agrees that Share Purchaser's Delivery to the
Collateral Agent of any payments in cash required pursuant to Section 3.6 of the
Stock Purchase Agreement shall discharge Share Purchaser's obligations under the
Stock Purchase Agreement with respect to such payments. Immediately upon receipt
of any such payments, the Collateral Agent shall Deliver such amounts to
Pledgor. In addition, to the extent Share Seller is required to deliver any
remaining Interest Settlement Shares, Interest Make-Whole Shares or Settlement
Shares to Share Purchaser pursuant to Section 3.6 of the Stock Purchase
Agreement, the Collateral Agent shall deliver Collateral Shares to Share
Purchaser against the applicable payment.

          2.6  DESIGNATED BROKER COMMISSION.

          The  parties agree that the Designated Broker shall be the exclusive
broker with respect to sales of Collateral Shares pursuant to the Stock Purchase
Agreement and this Agreement. Share Purchaser and Share Seller agree that any
additional underwriting fees or commission agreed to by Share Purchaser and
Share Seller pursuant to Section 3.6 of the Stock Purchase Agreement shall be
paid to the Designated Broker. The Designated Broker shall be entitled to
receive a commission equal to the applicable Sale Commission for the sale of any
Shares through the Designated Broker hereunder. The Collateral Agent shall
instruct the Designated Broker to deduct such amount from the sales proceeds
received in connection with any sale of Shares hereunder.

          2.7  SUBSTITUTION OF COLLATERAL. (a) (i) Pledgor shall be entitled
from time to time, upon notice to the Collateral Agent and the Secured Parties,
so long as no Event of Default or Mandatory Prepayment Event shall have occurred
and be continuing, to Deliver to the Collateral Agent Eligible Substitute
Collateral solely pursuant to the provisions of this Section 2.7. Upon receipt
thereof, the Collateral Agent shall deliver to or as directed by Pledgor
Collateral Shares or other Collateral designated by Pledgor in such notice with
a Value equal to the Value of such Substitute Collateral, determined as of the
date of transfer.

          (ii) From and after any such substitution, Pledgor shall be entitled
and, as provided in subsections (iii) and (iv) below, shall be obligated to
Deliver Shares to the Collateral Agent to be held as Collateral Shares in
substitution for Substitute Collateral, and upon receipt of such Shares, the
Collateral Agent shall deliver to Pledgor Substitute Collateral with a Value
equal to the Value of such Shares, determined as of the date of transfer.

          (iii) Pledgor shall Deliver Shares pursuant to subsection (ii) above
no later than the Exchange Business Day immediately preceding any Settlement
Date in a number such that, following such Delivery, the number of Collateral
Shares shall be at least equal to the number of

                                       9

<PAGE>

Prepayment Shares for such Settlement Date (or, in the case of the Settlement
Date related to the Maturity Date, the Number of Shares). Upon the occurrence of
a Merger Event or the declaration of a dividend or distribution described in
Section 7.8 of the Stock Purchase Agreement, Pledgor shall Deliver Shares
pursuant to subsection (ii) above in a number equal to the number of Substituted
Shares no later than the Exchange Business Day prior to (A) in the case of a
Merger Event, the latest date and time on which tenders of Shares may be made
pursuant to such Merger Event and (B) in the case of such a dividend or
distribution, the applicable record date. Pledgor shall Deliver Shares pursuant
to subsection (ii) above no later than the Exchange Business Day immediately
preceding any date on which Share Seller is required to deliver Seller Interim
Settlement Shares pursuant to the Stock Purchase Agreement in a number such
that, following such Delivery, the number of Collateral Shares shall be at least
equal to such number of Seller Interim Settlement Shares.

          (iv) In addition to the delivery requirements under subsection (iii)
above, Share Purchaser shall be entitled to require Pledgor, upon five Business
Days' written notice, to Deliver Shares pursuant to subsection (ii) above in a
number determined by Share Purchaser, up to and including the number of
Substituted Shares.

          (b)  If on any Valuation Date the Value of the Substituted Shares
exceeds the Value of all Substitute Collateral, Pledgor shall Deliver to the
Collateral Agent, by the close of business on such Valuation Date, additional
Eligible Substitute Collateral having a Value as of the date of transfer at
least equal to such excess (each such amount, a "DELIVERY AMOUNT").

          (c)  If on any Valuation Date the Value of all Substitute Collateral
exceeds the Value of the Substituted Shares, upon a demand made by Pledgor, the
Collateral Agent shall deliver to or as directed by Pledgor (in a manner to be
agreed by Pledgor and the Collateral Agent) Substitute Collateral having a Value
as of the date of transfer as close as practicable to such excess (each such
amount, a "RETURN AMOUNT"); PROVIDED that no delivery of a Return Amount shall
be made if an Event of Default or a Mandatory Prepayment Event has occurred and
is continuing. If a demand for a Return Amount is made by 1 p.m. on a Business
Day, such amount shall be delivered by the close of business on such Business
Day. If a demand for a Return Amount is made after 1 p.m. on a Business Day,
such amount shall be delivered by the close of business on the first Business
Day following the date of such demand.

          (d)  All calculations of Value and determinations of whether the
Collateral Agent or Pledgor is entitled to receive a Delivery Amount or Return
Amount, as the case may be, in respect of a Valuation Date shall be made by the
Calculation Agent in accordance with the terms of the Stock Purchase Agreement.
The Calculation Agent shall notify the relevant parties of such calculations and
determinations by 11:00 a.m. on each Valuation Date.

          2.8  INTERIM SETTLEMENTS. The parties hereby direct the Collateral
Agent, and the Collateral Agent agrees, to deliver to Share Purchaser from the
Collateral Shares on the applicable delivery date any Seller Interim Settlement
Shares to which Share Purchaser is entitled under Section 2.5(a) of the Stock
Purchase Agreement. Share Seller agrees that delivery by Share Purchaser to the
Collateral Agent for credit to the Collateral Account of any Purchaser Interim
Settlement Shares required to be delivered by Share Purchaser pursuant to
Section 2.5(b)

                                       10

<PAGE>

of the Stock Purchase Agreement shall discharge Share Purchaser's obligations
under the Stock Purchase Agreement with respect to such delivery.

     3.   REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

          (a)  Pledgor represents and warrants to, and agrees with, the
Collateral Agent and each Secured Party, as of each date Collateral is Delivered
to the Collateral Agent hereunder, that:

               (i)  Pledgor is a statutory business trust duly constituted,
     validly existing and in good standing under the laws of the State of
     Delaware, and has full power, authority and legal right to enter into,
     deliver, and perform its obligations under, this Agreement and the Stock
     Purchase Agreement;

               (ii) the execution, delivery and performance by Pledgor of this
     Agreement and the Stock Purchase Agreement have been duly authorized by all
     necessary action on the part of Pledgor and do not contravene, or
     constitute a default under, any provision of applicable law or regulation
     or of the constituent documents of Pledgor or of any material agreement,
     judgment, injunction, order, decree or other instrument binding upon
     Pledgor;

               (iii) this Agreement and the Stock Purchase Agreement each
     constitute a valid and binding agreement of Pledgor, enforceable against
     Pledgor in accordance with its terms, subject to applicable bankruptcy,
     insolvency or similar laws affecting creditors' rights generally and
     equitable principles of general applicability;

               (iv) Pledgor (A) owns and, at all times prior to the release of
     the Collateral pursuant to the terms of this Agreement, will own the
     Collateral free and clear of any liens, security interests or other
     encumbrances of any kind or type and (B) is not, and will not become, a
     party to or otherwise be bound by any agreement, other than this Agreement
     and the Stock Purchase Agreement, that restricts in any manner the rights
     of any present or future owner of the Collateral with respect thereto;

               (v)  Pledgor has not performed and will not perform any act or
     acts which might prevent any Secured Party from enforcing any of the terms
     of this Agreement or which might limit the rights of any Secured Party,
     including the rights in any such enforcement;

               (vi) other than this Agreement and any financing statements filed
     for the benefit of the Collateral Agent, no financing statement, security
     agreement or similar or equivalent document, agreement or instrument
     covering all or any part of the Collateral is on file or of record in any
     jurisdiction in which such filing or recording would be effective to create
     or perfect a lien, security interest or other encumbrance of any kind on
     such Collateral;

               (vii) other than the Financing Statements, no registration,
     recordation or filing with or consent of any governmental body, agency or
     official or any other Person is required in connection with the execution
     and delivery of this Agreement or the Stock

                                       11

<PAGE>

     Purchase Agreement (except as have been obtained on or prior to the date
     hereof and except for informational filings with the Securities and
     Exchange Commission and applicable gaming regulatory authorities) or
     necessary for the due execution, validity or enforceability hereof or
     thereof or for the perfection or enforcement of the Security Interests;

               (viii) the Location of Pledgor is the address set forth for it in
     Section 16(b) (or such other address notified in writing to the Collateral
     Agent pursuant to Section 9(b));

               (ix) Pledgor is not and will not become an "investment company,"
     as such term is defined in the Investment Company Act;

               (x)  upon the execution and delivery of this Agreement by the
     parties hereto, the Delivery of the Collateral to the Collateral Agent and
     the filing of the Financing Statements in the appropriate jurisdiction, the
     Collateral Agent will have a valid and first priority perfected security
     interest in the Collateral for the benefit of the Secured Parties subject
     to no prior lien, security interest or other encumbrance of any kind; and

               (xi) Pledgor is solvent and able to pay its debt as they come
     due, with assets having a fair value greater than the amount of its
     liabilities and with capital sufficient to carry on the businesses in which
     it engages, and has received fair consideration for its pledge of the
     Collateral hereunder.

          (b)  The Collateral Agent represents and warrants to, and agrees with,
each of the parties hereto that:

               (i)  the Collateral Agent is a limited liability company duly
     organized, validly existing and in good standing under the laws of the
     State of Delaware, and has full power, authority and legal right to enter
     into, deliver, and perform its obligations under, this Agreement;

               (ii) the execution, delivery and performance by the Collateral
     Agent of this Agreement have been duly authorized by all necessary action
     on the part of the Collateral Agent and do not and will not contravene, or
     constitute a default under, any provision of applicable law or regulation
     or constituent documents of the Collateral Agent or of any material
     agreement, judgment, injunction, order, decree or other instrument binding
     upon the Collateral Agent;

               (iii) this Agreement constitutes a valid and binding agreement of
     the Collateral Agent, enforceable against the Collateral Agent in
     accordance with its terms, subject to applicable bankruptcy, insolvency or
     similar laws affecting creditors' rights generally and equitable principles
     of general applicability;

               (iv) the Collateral Agent hereby agrees that (A) all liens,
     pledges and other security interests of any kind or nature held by it in
     any of the Collateral securing any obligation to the Collateral Agent
     (whether in such capacity, its capacity as securities

                                       12

<PAGE>

     intermediary or in any other capacity) (collectively, "OTHER LIENS")
     shall be subordinate and junior to the liens, pledges and security
     interest in the Collateral arising hereunder and that the Collateral
     Agent will take no action to enforce any Other Lien so long as any
     obligation under this Agreement or the Stock Purchase Agreement (whether
     or not then due) should remain unsatisfied and (B) its obligation to
     Pledgor in respect of any Collateral will not be subject to deduction,
     set-off, recoupment, banker's lien or any other right in respect of
     obligations owed by Pledgor or any other Person to the Collateral Agent;

               (v)  The Collateral Agent is not and will not become a party to
     or otherwise bound by any agreement that provides any Person with control
     (as defined in Section 8-106 or Section 9-115(1)(e) of the UCC) with
     respect to any of the Collateral; and

               (vi) the Collateral Agent is a "securities intermediary" as
     defined in Section 8-102(a) of the UCC.

     4.   THE SECURITY INTERESTS; COLLATERAL ACCOUNT.

          (a)  In order to secure the full and punctual payment and performance
of the Secured Obligations in accordance with their terms and the performance of
all the obligations of Pledgor hereunder, Pledgor hereby assigns, pledges and
grants to the Collateral Agent, as agent of and for the benefit of the Secured
Parties, security interests in and to, and a lien upon and right of set-off
against, and transfers to the Collateral Agent, for the benefit of the Secured
Parties, as and by way of a security interest having priority over all other
security interests, with power of sale, all of its right, title and interest in
and to, whether now owned or hereafter acquired, (i) the Collateral Shares; (ii)
the Substitute Collateral; (iii) the Collateral Account and all cash,
securities, investments, and other financial assets (as defined in Section 8-102
of the UCC), funds, property and other assets from time to time held therein or
credited thereto; (iv) all additions to and substitutions for the foregoing; (v)
all powers, rights and privileges of Pledgor with respect to the Stock Purchase
Agreement; (vi) all powers, rights and privileges of Pledgor with respect to the
Collateral Account and the contents thereof (including all securities
entitlements in respect thereof); (vii) all income, Proceeds and other proceeds
and collections received or to be received, or derived or to be derived, now or
any time hereafter (whether before or after the commencement of any proceeding
under applicable bankruptcy, insolvency or similar law, by or against Pledgor,
with respect to Pledgor) from or in connection with any of the items mentioned
in (i) through (vi) (including any shares of capital stock issued in respect of
any Securities (or security entitlements in respect thereof) constituting
Collateral or any cash, Securities or other property distributed in respect of
or exchanged for any Securities (or security entitlement in respect thereof)
constituting Collateral, or into which any such Securities (or security
entitlements in respect thereof) are converted, and any security entitlements in
respect of any of the foregoing); and (viii) all powers, rights and privileges
of Pledgor, now or hereafter acquired, including rights of enforcement, with
respect to the foregoing (collectively, the "COLLATERAL").

          (b)  The Collateral Account is hereby established with the Collateral
Agent in its capacity as securities intermediary as a collateral account in the
name of "Banc of America

                                       13

<PAGE>

Securities LLC, as collateral agent on behalf of Mandalay Resort Group and Bank
of America, N.A." into which there shall be deposited from time to time or to
which there shall be credited the Collateral required to be delivered to the
Collateral Agent pursuant to this Agreement. Subject to the provisions of
Section 2.3, any income received by the Collateral Agent with respect to the
property from time to time credited to the Collateral Account shall remain, or
be deposited, in the Collateral Account. All right, title and interest in and to
the Collateral on deposit or credited from time to time in the Collateral
Account shall vest in the Collateral Agent, shall constitute part of the
Collateral hereunder and shall not constitute payment of the Secured Obligations
until applied thereto as hereinafter provided.

          (c)  If the Issuer of Collateral Shares at any time or from time to
time issues to Pledgor in respect of any Collateral Shares or security
entitlements in respect thereof, or Pledgor receives or becomes entitled to
receive in respect of any Collateral Shares or security entitlements in respect
thereof, or Pledgor receives any Proceeds in respect of any Collateral Shares or
security entitlements in respect of Collateral Shares consisting of, any
additional or substitute Securities of any kind (or security entitlements in
respect thereof), Pledgor shall immediately Deliver to the Collateral Agent all
such Securities (and security entitlements) as additional security for the
Secured Obligations. All such Securities (and security entitlements) and any of
the foregoing issued to the Collateral Agent (as registered holder of the
Collateral Shares) shall constitute Collateral (or security entitlements in
respect thereof) and are subject to all provisions of this Agreement.

          (d)  The Security Interests are granted as security only and shall not
subject either Secured Party to, or transfer or in any way affect or modify, any
obligation or liability of (i) Pledgor with respect to any of the Collateral or
any transaction in connection therewith or (ii) the other Secured Party under
any Transaction Document.

          (e)  The Collateral Agent and the other parties hereto expressly agree
that all rights, assets and property (other than cash) held at any time in the
Collateral Account shall be treated as a financial asset as described in Section
8-102(a)(9) of the UCC.

     5.   ENTITLEMENT ORDERS.

          (a)  The Collateral Agent agrees that it will not comply with
entitlement orders originated by either Secured Party without the consent of the
other Secured Party in respect of any Collateral, except as provided in Section
10 below.

          (b)  Pledgor agrees that it shall not (i) create or permit to exist
any lien, security interest or other encumbrance of any kind upon or with
respect to the Collateral, except for those created hereunder, (ii) sell or
otherwise dispose of, or grant any option with respect to, any of the Collateral
or (iii) enter into or consent to any agreement pursuant to which any Person has
or will have control (within the meaning of Section 8-106 of the UCC) in respect
of any Collateral, including the Collateral Account and the financial assets and
other property held in the Collateral Account.

     6.   GENERAL AUTHORITY. Each party hereto irrevocably designates and
appoints Banc of America Securities LLC as the Collateral Agent and its true and
lawful attorney-in-fact, with full

                                       14

<PAGE>

power of substitution in the name of Pledgor, any Secured Party or otherwise,
for the sole use and benefit of the Secured Parties, but at the expense of
Pledgor, to the extent permitted by law, to exercise (i) at any time and from
time to time all powers with respect to the Collateral as may be required to
permit the Collateral Agent to carry out its obligations under this Agreement
and (ii) at any time and from time to time while an Event of Default has
occurred and is continuing, all or any of the following powers with respect to
all or any of the Collateral:

          (a)  to demand, sue for, collect, receive, appropriate and give
acquittance for any and all monies due or to become due upon or by virtue
thereof,

          (b)  to settle, compromise, compound, prosecute or defend any action
or proceeding with respect thereto,

          (c)  subject to the requirements of Section 10, to sell (either by
public or private sale), transfer, assign, exercise rights of election
pertaining thereto or otherwise deal in or with the same or the proceeds or
avails thereof, as fully and effectually as if the Collateral Agent were the
absolute owner thereof (including the giving of instructions and entitlement
orders in respect thereof), and

          (d)  to extend the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto;

PROVIDED, HOWEVER, that the Collateral Agent shall give the parties hereto not
less than two (2) Business Days' prior written notice of the time and place of
any sale or other intended disposition of any of the Collateral, except any
Collateral that threatens to decline speedily in value, or is of a type
customarily sold on a recognized market. The Collateral Agent and Pledgor hereby
expressly agree that such notice constitutes "reasonable notification" within
the meaning of Section 9-504(3) of the UCC.

     7.   INCONSISTENCY WITH STOCK PURCHASE AGREEMENT. In the event of any
inconsistency between the provisions of Article 2 hereof and the Stock Purchase
Agreement, the parties agree that the provisions of the Stock Purchase Agreement
will govern.

     8.   DEFENSE OF TITLE.

          (a)  Pledgor shall warrant and defend its title to the Collateral,
subject to the rights of the Secured Parties, against the claims and demands of
all Persons.

          (b)  The Collateral Agent may elect (but has no obligation to do so)
to discharge any lien, security interest or other encumbrance of any kind or
type of any third party on any of the Collateral.

     9.   FURTHER ASSURANCES; COVENANTS.

          (a)  Pledgor agrees that it shall at its expense and in such manner
and form as the Collateral Agent may reasonably require, execute, deliver, file
and record any financing statement, continuation statement, specific assignment
or other document or instrument and take any other action that may be necessary
or desirable, or that the Collateral Agent may reasonably

                                       15

<PAGE>

request, in order to create, preserve, perfect, confirm or validate any Security
Interest or to enable the Collateral Agent to exercise and enforce its rights on
behalf of the Secured Parties hereunder with respect to any of the Collateral.
To the extent permitted by applicable law, Pledgor hereby authorizes the
Collateral Agent to execute and file, in the name of Pledgor or otherwise,
financing statements or continuation statements (which may be carbon,
photographic, photostatic or other reproductions of this Agreement or of a
financing statement or continuation statement relating to this Agreement) that
the Collateral Agent, upon the advice of counsel or at the direction of the
Secured Parties, may deem reasonably necessary or appropriate to perfect or
further perfect any of the Security Interests; and further, to execute and file
in the name of Pledgor or otherwise any other document that the Collateral
Agent, in its sole discretion, may deem reasonably necessary or appropriate in
connection with the Collateral Agent's authority conferred by this Agreement.

          (b)  Pledgor agrees that it shall not change (i) its name, identity,
or organizational structure or (ii) its Location, unless in either case (A) it
shall have given the Collateral Agent not less than thirty (30) days' prior
written notice thereof and (B) such change shall not cause any of the Security
Interests to become unperfected or subject to any other lien, security interest
or other encumbrance of any kind.

          (c)  If at any time any of the Collateral Shares or Substitute
Collateral (or security entitlements in respect thereof) are not registered, or
held through a securities intermediary, in the name of the Collateral Agent or
its nominee, the Collateral Agent and Pledgor agree that Pledgor shall take all
action as is reasonably requested by the Collateral Agent to cause such
Collateral to be transferred of record into, or held through a securities
intermediary in, the name of the Collateral Agent or its nominee. The Collateral
Agent shall promptly give to Pledgor and the Secured Parties copies of any
notices and communications received by it with respect to Collateral Shares or
Substitute Collateral (or security entitlements in respect thereof) registered,
or held through a securities intermediary, in the name of the Collateral Agent
or its nominee.

     10.  REMEDIES UPON EVENT OF DEFAULT; OTHER CONSEQUENCES.

          (a)  If an Event of Default shall have occurred and be continuing and
the Defaulting Party shall have failed to perform its obligations with respect
to any Principal Payment Date theretofore designated, the Collateral Agent
shall, following receipt from the Non-Defaulting Party of a certification to the
Collateral Agent to that effect, at the direction of the Non-Defaulting Party,
(i) exercise all the rights of a secured party under the Uniform Commercial Code
(whether or not in effect in the jurisdiction where such rights are exercised),
(ii) solely where Share Seller is the Defaulting Party, deliver to Share
Purchaser all Collateral (or the applicable portion thereof owed to Share
Purchaser, in the event of a net share settlement) in satisfaction of Share
Seller's obligations to Share Purchaser under the Stock Purchase Agreement,
against payment by Share Purchaser to the Collateral Agent of all amounts owed
by Share Purchaser under the Stock Purchase Agreement, and (iii) without being
required to give any notice, except as herein provided or as may be required by
mandatory provisions of law:

          (A)  apply the cash, if any, then held by it as Collateral as
specified in Section 11 hereof, and

                                       16

<PAGE>

          (B)  if there shall be no such cash or if such cash shall be
insufficient to pay in full all the Secured Obligations, sell the Collateral or
any part thereof at public or private sale or at any broker's board or
securities exchange, for cash, upon credit or for future delivery, and at such
price or prices as the Collateral Agent may, in its sole discretion deem
satisfactory.

          Any  Secured Party or Pledgor may be the purchaser of any or all of
the Collateral so sold at any public sale (or, if the Collateral is of a type
customarily sold in a recognized market or is of a type that is the subject of
widely distributed standard price quotations, at any private sale). The
Collateral Agent is authorized, in connection with any such sale:

               (X)  to restrict the prospective bidders on or purchasers of any
          of the Collateral constituting "securities" within the meaning of the
          Securities Act in such a manner so as to comply with any available
          exemption from the registration requirements of the Securities Act;

               (Y)  to cause to be placed on certificates for any or all of the
          Collateral Shares or on any other securities pledged hereunder a
          legend to the effect that such security has not been registered under
          the Securities Act and may not be disposed of in violation of the
          provisions of said Act; and

               (Z)  to impose such other limitations or conditions in connection
          with any such sale as the Collateral Agent or the Non-Defaulting Party
          deems necessary or advisable in order to comply with the Securities
          Act or any other law or regulation.

          (b)  Following receipt from the Non-Defaulting Party of the
certification provided for in Section 10(a), the Collateral Agent shall comply
with any order given by the Non-Defaulting Party without the consent of the
other Secured Party. Pledgor covenants and agrees that it shall execute and
deliver such documents and take such other action as the Collateral Agent deems
necessary or advisable in order that any such sale may be made in compliance
with the Securities Act and any other law or regulation. Upon any such sale, the
Collateral Agent shall have the right to deliver, assign and transfer to the
purchaser thereof the Collateral so sold. Subject to the provisions of this
Section 10 hereof, each purchaser at any such sale shall hold the Collateral so
sold absolutely and free and from any claim or right of whatsoever kind,
including any equity or right of redemption of Pledgor that may be waived, and
Pledgor, to the extent permitted by law, hereby specifically waives all rights
of redemption, stay or appraisal that Pledgor has or may have under any law now
existing or hereafter adopted. The notice (if any) of such sale shall (1) in
case of a public sale, state the time and place fixed for such sale, (2) in case
of a sale at a broker's board or on a securities exchange, state the board or
exchange at which such sale is to be made and the day on which the Collateral,
or the portion thereof so being sold, will first be offered for sale at such
board or exchange, and (3) in the case of a private sale, state the day after
which such sale may be consummated. Any such public sale shall be held at such
time or times within ordinary business hours and at such place or places as the
Collateral Agent may fix in the notice of such sale. At any such sale the
Collateral may be sold in one lot as an entirety or in separate parcels, as the
Collateral Agent may determine. The Collateral Agent shall not be obligated to
make any such sale pursuant to any such notice. The

                                       17
<PAGE>

Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may be made at any time
or place to which the same may be so adjourned. In case of any sale of all or
any part of the Collateral on credit or for future delivery, the Collateral so
sold shall be retained by the Collateral Agent until the selling price is paid
by the purchaser thereof, however, the Collateral Agent shall not incur any
liability in case of the failure of such purchaser to take up and pay for the
Collateral so sold and, in case of any such failure, such Collateral may again
be sold upon like notice. The Collateral Agent, instead of exercising the power
of sale herein conferred upon it, may proceed by a suit or suits at law or in
equity to foreclose the Security Interests and sell the Collateral, or any
portion thereof, under a judgment or decree of a court or courts of competent
jurisdiction.

     11.  APPLICATION OF PROCEEDS.

          The  proceeds of any sale of, or other realization upon, all or any
part of the Collateral and any cash received and held by the Collateral Agent as
or in respect of Collateral pursuant to Section 10 shall be applied by the
Collateral Agent in the following order of priorities:

               FIRST, to the payment of any expenses of such sale or other
          realization, including reasonable compensation to the Collateral
          Agent, counsel and agents for the Non-Defaulting Party, and all
          expenses, liabilities and advances incurred or made by the
          Non-Defaulting Party in connection therewith, and any other
          unreimbursed expenses, if any, for which the Non-Defaulting Party is
          to be reimbursed pursuant to the Stock Purchase Agreement;

               SECOND, to the payment of all Secured Obligations owed to the
          Non-Defaulting Party, until all such Secured Obligations have been
          paid in full;

               THIRD, to the payment of (or if a future or contingent
          obligation, to cash collateralize) any other Secured Obligations; and

               FOURTH, to the payment to the Trust or its successors or assigns,
          or as a court of competent jurisdiction may direct, of any surplus
          then remaining.

     12.  PROVISION OF NOTICE. Each party hereto agrees that, until all
outstanding Secured Obligations have been repaid in full, each such party shall
notify the other parties hereto immediately upon having actual or constructive
knowledge of the occurrence of any of the following events:

          (a)  any party hereto fails to fulfill or discharge any of its
obligations, agreements or covenants under or relating to any Transaction
Document to which it is a party;

          (b)  any representation made or repeated or deemed to have been made
or repeated by any party hereto under any Transaction Document is or becomes
incorrect or misleading in any material respect;

                                       18

<PAGE>

          (c)  the Security Interests fail at any time to constitute valid,
continuing first priority perfected security interests in all of the Collateral
securing all obligations purported to be secured thereby, subject to no prior or
equal lien, security interest or other encumbrance of any kind; or

          (d)  any Event of Default or Mandatory Prepayment Event occurs under
the Stock Purchase Agreement.

     13.  APPOINTMENT OF COLLATERAL AGENT.

          (a)  Each party hereto hereby irrevocably designates, appoints and
authorizes the Collateral Agent to take such action on their behalf and to
exercise such powers under this Agreement as are delegated to the Collateral
Agent by the terms hereof, together with all such powers as are reasonably
incidental thereto.

          (b)  The Collateral Agent may consult with legal counsel, independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.

          (c)  Neither the Collateral Agent nor any of its directors, officers,
trust officers, agents or employees shall be liable for any action taken or not
taken by it in connection with this Agreement with the consent or at the request
of the Secured Parties or in the absence of its own gross negligence or willful
misconduct. The Collateral Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, statement, or other writing
(which may be a bank wire, telex or similar writing) reasonably believed by it
to be genuine or to be signed by the proper party or parties.

          (d)  Any corporation or association into which the Collateral Agent
may be converted or merged, or with which it may be consolidated, or to which it
may sell or transfer its agency business and assets as a whole or substantially
as a whole, or any corporation or association resulting from any such
conversion, sale, merger, consolidation or transfer to which it is a party,
shall, subject to the prior written consent of the Secured Parties, be and
become a successor Collateral Agent hereunder and vested with all of the title
to the Collateral and all of the powers, discretions, immunities, privileges and
other matters as was its predecessor without, except as provided above, the
execution or filing of any instrument or any further act, deed or conveyance on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.

          (e)  Beyond the exercise of reasonable care in the custody thereof,
the Collateral Agent shall have no duty as to any Collateral in its possession
or control or in the possession or control of any agent, bailee, clearing
corporation or securities intermediary or in respect of any income on such
Collateral or as to the preservation of rights against prior parties or any
other rights pertaining thereto. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral if
the Collateral is accorded treatment substantially equal to that which the
Collateral Agent accords its own property, and shall not be liable or
responsible for any loss or damage to any of the Collateral, or for any

                                       19

<PAGE>

diminution in the value thereof, by reason of the act or omission of any agent,
bailee, clearing corporation or securities intermediary selected by the
Collateral Agent in good faith (or selected, in good faith, by an agent, bailee,
clearing corporation or securities intermediary so selected by the Collateral
Agent).

          (f)  The Collateral Agent may resign as Collateral Agent upon thirty
(30) days' written notice thereof to Pledgor, each of the Secured Parties and
each other party hereto; PROVIDED that no such resignation shall be effective
until a successor Collateral Agent reasonably satisfactory to Pledgor and the
Secured Parties has accepted such appointment in writing.

          (g)  Share Purchaser agrees to indemnify the Collateral Agent and its
Affiliates and their respective directors, officers, employees, agents and
controlling persons (the Collateral Agent and each such person being an
"INDEMNIFIED PARTY") from and against any and all losses, claims, damages and
liabilities, joint and several, to which such Indemnified Party may become
subject under any applicable federal or state law or otherwise, that arise out
of or relate to this Agreement, the transactions contemplated hereby or any
action taken or not taken pursuant hereto, and will reimburse any Indemnified
Party for all expenses (including reasonable counsel fees and expenses) as they
are incurred in connection with the investigation of, preparation for or defense
or settlement of any pending or threatened claim or any action or proceeding
arising therefrom, whether or not such Indemnified Party is a party and whether
or not such claim, action or proceeding is initiated or brought by or on behalf
of Share Purchaser. Share Purchaser shall not be liable under the foregoing
indemnification provision to the extent that any loss, claim, damage, liability
or expense is found in a nonappealable judgment by a court of competent
jurisdiction to have resulted from the Collateral Agent's willful misconduct or
gross negligence. The provisions of this Section 13(g) shall survive any
termination of this Agreement or of the Security Interests created hereunder.

     14.  TERMINATION AND RELEASE OF COLLATERAL.

          (a)  Upon the satisfaction in full of all Secured Obligations and all
obligations under the Stock Purchase Agreement and this Agreement, the Security
Interests shall terminate and all rights to the Collateral shall revert to
Pledgor.

          (b)  Upon the transfer by the Collateral Agent of any Collateral to
the Share Purchaser or Pledgor pursuant to the terms hereof, the Security
Interests in such Collateral shall be released immediately and, to the extent
possible, without further action by any party.

          (c)  Upon any such termination of the Security Interests or release of
Collateral, the Secured Parties shall execute and deliver to Pledgor such
documents as Pledgor or Share Seller shall reasonably request to evidence the
termination of the Security Interests or the release of such Collateral, as the
case may be.

     15.  TRANSFERABILITY.

          Share Seller shall have the right to transfer its rights and
obligations under this Agreement to the extent, but only to the extent, of its
assignment of its rights and obligations under the Stock Purchase Agreement.
Upon any such transfer, the parties hereto agree to

                                       20

<PAGE>

execute an amendment to this Agreement to add any such transferees as additional
Secured Parties hereunder.

     16.  NOTICES.

          (a)  Except as otherwise expressly set forth in this Agreement, all
notices and other communications to any party hereunder shall be dated and in
writing and shall be given to such party: (i) at its address or facsimile number
set forth in Section 16(b), below, and (ii) in the case of any party, at such
other address or facsimile number as such party may hereafter specify for the
purpose by written notice to the other parties hereto.

          (b)  Each such notice or other communication shall be effective (i) if
given by facsimile, when transmitted to the facsimile number referred to below
and confirmation of receipt is received, or (ii) if given by any other means,
when delivered at the address referred to below.

          Notices to Pledgor shall be directed to:

               MBG  Trust
               c/o  Wilmington Trust Company
               Rodney Square North
               1100 North Market Street
               Wilmington, Delaware 19890-0001
               Attention: Corporate Trust Administration
               Facsimile: (302) 651-8882

          Notices to Share Purchaser shall be directed to

               Mandalay Resort Group
               3950 Las Vegas Boulevard South
               Las  Vegas, Nevada 89119
               Attention: Glenn W. Schaeffer, President
               Facsimile: (702) 632-6715

          Notices to Share Seller shall be directed to:

               Bank of America, N.A.
               c/o  Banc of America Securities LLC
               9 West 57th Street
               New  York, New York 10019
               Attention: Chris Innes
               Facsimile: (212) 583-8457

          with a copy to:

               Bank of America, N.A.
               c/o  Banc of America Securities LLC
               9 West 57th Street
               40th Floor

                                       21

<PAGE>

               New  York, New York 10019
               Attention: Equity Financial Products, Middle Office
               Facsimile: (212) 583-8369

          Notices to the Collateral Agent shall be directed to:

               Banc of America Securities LLC
               9 West 57th Street
               New  York, New York 10019
               Attention: Equity Financial Products, Middle Office
               Facsimile: (212) 583-8369

     17.  WAIVERS, NON-EXCLUSIVE REMEDIES.

          No   failure on the part of any Secured Party to exercise, and no
delay in exercising and no course of dealing with respect to, any right under
any of the Transaction Documents shall operate as a waiver thereof; nor shall
any single or partial exercise by any Secured Party of any right under any of
the Transaction Documents preclude any other or further exercise thereof or the
exercise of any other right. The rights in the Transaction Documents are
cumulative and are not exclusive of any other remedies provided by law.

     18.  OBLIGATIONS UNCONDITIONAL; DISCHARGE OF OBLIGATIONS, ETC.

          (a)  The obligations of Pledgor hereunder are unconditional and
absolute and may only be waived, amended, restated, or otherwise modified in
accordance with Section 23(a) hereof. Without limiting the generality of the
foregoing, the obligations of Pledgor hereunder, in the absence of a
modification effected in accordance with Section 23(a) hereof, shall not be
released, discharged or otherwise affected by:

               (i)  any modification or amendment of, supplement to or
     assignment or transfer of rights and obligations under the Stock Purchase
     Agreement;

               (ii) the existence of any claim, set-off or other rights that
     Pledgor may have at any time against any Secured Party or any other Person,
     whether in connection herewith or with any related or unrelated
     transactions, PROVIDED, HOWEVER, that nothing herein shall prevent the
     assertion of any such claim by separate suit or compulsory counterclaim; or

               (iii) any other act or omission to act or delay of any kind by
     any Secured Party or any other Person or any other circumstance whatsoever
     that might, but for the provisions of this Section 18, constitute a legal
     or equitable discharge of Pledgor's obligations hereunder.

          (b)  Pledgor's obligations hereunder shall remain in full force and
effect until the Stock Purchase Agreement shall have terminated and all Secured
Obligations shall have been paid in full. If at any time any payment or delivery
by Share Seller or Share Purchaser under the Stock Purchase Agreement is
rescinded or must be otherwise restored or returned upon the insolvency or
bankruptcy of Share Seller or Share Purchaser or otherwise, Pledgor's
obligations

                                       22

<PAGE>

hereunder with respect to such payment shall be reinstated as though such
payment had been due but not made at such time.

          (c)  Pledgor irrevocably waives acceptance hereof, presentment,
demand, protest and any notice whatsoever, not provided for herein.

          (d)  Pledgor shall have no greater rights against Share Purchaser in
respect of amounts paid to Share Seller from proceeds of Collateral, whether by
way of subrogation or otherwise, than Share Seller would have against Share
Purchaser under the Stock Purchase Agreement (including as provided in Section
6.6(b) thereof).

     19.  SPECIFIED TIMES ARE NEW YORK CITY TIMES. Any reference herein to a
specified time of day shall refer to such time of day in New York City.

     20.  SEVERABILITY. The provisions of this Agreement are severable. If any
clause or provision is held to be invalid and unenforceable in whole or in part
by a court of competent jurisdiction, then that invalidity or unenforceability
will affect only that clause or provision, or part thereof, in such
jurisdiction, and will not in any manner affect such clause or provision in any
other jurisdiction or any other clause or provision in any jurisdiction.

     21.  LIMITATION OF LIABILITY OF THE TRUSTEE. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by Wilmington Trust Company, not individually or personally, but solely as
trustee of Pledgor, in the exercise of the powers and authority conferred and
vested in it, (b) each of the representations, undertakings and agreements
herein made on the part of Pledgor is made and intended not as personal
representations, undertakings and agreements by Wilmington Trust Company but
made and intended for the purpose of binding only Pledgor, (c) nothing herein
contained shall be construed as creating any liability on Wilmington Trust
Company, individually or personally, to perform any covenant, either expressed
or implied, contained herein, all liability, if any, being expressly waived by
the parties hereto and by any person claiming by, through or under the parties
hereto and (d) under no circumstances shall Wilmington Trust Company be
personally liable for the payment of any indebtedness or expenses of Pledgor or
be liable for the breach of any obligation, representation, warranty or covenant
made or undertaken by Pledgor under this Agreement or any other related
documents.

     22.  CONFLICTING INSTRUCTIONS. If the Collateral Agent receives conflicting
or disputed instructions pursuant to Section 10, the Collateral Agent shall
attempt to resolve such conflict or dispute with the Secured Parties; PROVIDED
that if such conflict or dispute cannot be so resolved, the Collateral Agent
shall take such actions with respect to the Collateral are as instructed by a
court of competent jurisdiction.

     23.  MISCELLANEOUS. This Agreement:

          (a)  cannot be altered, amended, restated, modified or supplemented in
any way, except by a writing signed by all of the parties hereto;

          (b)  will be binding upon Pledgor and its successors and assigns, and
will inure to the benefit of the Secured Parties and their nominees, successors
and assigns, and in the event

                                       23

<PAGE>

of an assignment of all or any of the Secured Obligations, the rights hereunder,
to the extent applicable to the obligations so assigned, shall be transferred
with such obligations; and

          (c)  may be executed in one or more counterparts, each of which when
executed will be deemed to be an original, but all of which taken together will
constitute one and the same document.

     24.  GOVERNING LAW. THIS AGREEMENT, AND THE ESTABLISHMENT AND MAINTENANCE
OF THE COLLATERAL ACCOUNT, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO CHOICE OF LAW
PRINCIPLES).

                                       24

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.

                                MBG TRUST, as Pledgor

                                By:  WILMINGTON TRUST COMPANY,
                                     not in its individual capacity but solely
                                     as Trustee

                                     By: /s/ JAMES P. LAWLER
                                        --------------------------------
                                        Name:   James P. Lawler
                                        Title:  Vice President

                                MANDALAY RESORT GROUP, as Share
                                  Purchaser

                                By:   /s/ GLENN W. SCHAEFFER
                                    --------------------------------
                                    Name:   Glenn W. Schaeffer
                                    Title:  President

                                BANK OF AMERICA, N.A., as Share Seller

                                By:   /s/ WILLIAM C. CACCAMISE
                                    --------------------------------
                                    Name:   William C. Caccamise
                                    Title:  Authorized Signatory

                                BANC OF AMERICA SECURITIES LLC, as
                                  Collateral Agent

                                By:   /s/  WILLIAM C. CACCAMISE
                                    --------------------------------
                                    Name:   William C. Caccamise
                                    Title:  Managing Director

<PAGE>

                                                                       EXHIBIT I

                           FORM OF FINANCING STATEMENT

DEBTOR:                                    SECURED PARTY:
MBG Trust                                  Banc of America Securities LLC,
c/o Wilmington Trust Company, as Trustee     as Collateral Agent on behalf of
Rodney Square North                          Mandalay Resort Group and Bank of
1100 North Market Street                     America, N.A.
Wilmington, Delaware 19890-0001            9 West 57th Street
                                           New York, New York 10019

                        EXHIBIT A TO FINANCING STATEMENT

          This financing statement covers all of Debtor's right, title and
interest in and to the following, whether now owned or hereafter acquired (all
of which hereinafter collectively referred to as the "COLLATERAL"):

          (i)  the Collateral Shares;

          (ii) the Substitute Collateral;

          (iii) the Collateral Account and all cash, securities, investments,
and other financial assets (as defined in Section 8-102 of the UCC), funds,
property and other assets from time to time held therein or credited thereto;

          (iv) all additions to and substitutions for the foregoing;

          (v)  all powers, rights and privileges of Debtor with respect to the
Stock Purchase Agreement;

          (vi) all powers, rights and privileges of Debtor with respect to the
Collateral Account and the contents thereof (including, but not limited to, all
securities entitlements in respect thereof);

          (vii) all income, Proceeds and other proceeds and collections received
or to be received, or derived or to be derived, now or any time hereafter
(whether before or after the commencement of any proceeding under applicable
bankruptcy, insolvency or similar law, by or against Debtor, with respect to
Debtor) from or in connection with any of the items mentioned in (i) through
(vi) above (including, without limitation, any shares of capital stock issued in
respect of any Securities (or security entitlements in respect thereof)
constituting Collateral or any cash,

                                      I-1

<PAGE>

Securities or other property distributed in respect of or exchanged for any
Securities (or security entitlements in respect thereof) constituting
Collateral, or into which any such Securities (or security entitlements in
respect thereof) are converted, and any security entitlements in respect of any
of the foregoing); and

          (viii) all powers, rights and privileges of Debtor, now or hereafter
acquired, including, but not limited to, rights of enforcement, with respect to
the foregoing.

          As   used in this Exhibit A, the following capitalized terms have the
meanings specified below (such meanings being equally applicable to both the
singular and plural forms of the terms defined):

          "CASH COLLATERAL" means funds denominated in United States dollars and
pledged under the Collateral Agreement to the Collateral Agent.

          "COLLATERAL ACCOUNT" means Account No. 207/208-00294, entitled "Banc
of America Securities LLC, as collateral agent on behalf of Mandalay Resort
Group and Bank of America, N.A.," at the Collateral Agent, a securities account
(as defined in Section 8-501(a) of the UCC) established in the name of the
Collateral Agent in or to which the Collateral is to be deposited or credited,
all pursuant to and in accordance with the Collateral Agreement.

          "COLLATERAL AGENT" means Banc of America Securities LLC, in its
capacity as the collateral agent for Share Seller and Share Purchaser under the
Collateral Agreement.

          "COLLATERAL AGREEMENT" means the Collateral Agreement, dated as of
September 8, 2000, among Share Seller, Share Purchaser, Debtor and the
Collateral Agent, as the same may be amended, restated or otherwise modified
from time to time.

          "COLLATERAL SHARES" means all Shares Delivered to the Collateral Agent
and credited to the Collateral Account from time to time, including, without
limitation, the Initial Shares, Purchaser Interim Settlement Shares, Make-Whole
Shares, Interest Settlement Shares and Interest Make-Whole Shares (each as
defined in the Stock Purchase Agreement).

          "DEBTOR" means MBG Trust, a Delaware business trust.

          "DELIVERY" means (a) in the case of certificated securities (other
than those described in clause (c)), delivery to the Collateral Agent of
certificates representing such securities, registered in the name of the
Collateral Agent or its nominee, free and clear of all liens, security interests
or other encumbrances of any kind (other than the Security Interests),
accompanied by any required transfer tax stamps, all in form and substance
satisfactory to the Collateral Agent, and the crediting of such securities to
the Collateral Account, (b) in the case of uncertificated securities,
registration by the issuer of such securities in the name of the Collateral
Agent or its nominee, accompanied by any required transfer tax stamps, and the
crediting of such securities to the Collateral Account, (c) in the case of
Initial Shares or any securities in respect of which security entitlements are
held through a securities intermediary, the crediting of such securities, free
and clear of all liens, security interests or other encumbrances of any kind
(other than the Security Interests), to a securities account of the Collateral
Agent at such securities intermediary or at another securities intermediary
satisfactory to the Collateral Agent, and (d) in

                                      I-2

<PAGE>

the case of cash (including all or any portion of the Cash Collateral), (i) with
respect to cash delivered to the Collateral Agent, in accordance with such
delivery instructions as the Collateral Agent may give to the relevant
transferor from time to time by written notice hereunder, (ii) with respect to
cash delivered by the Collateral Agent, in accordance with such delivery
instructions as the transferee may give to the Collateral Agent from time to
time by written notice hereunder or (iii) otherwise in accordance with the terms
hereof. The terms "Deliver," "Delivered" and "Delivering" have corresponding
meanings.

          "ELIGIBLE SUBSTITUTE COLLATERAL" means funds denominated in U.S.
dollars and U.S. Government Obligations.

          "PROCEEDS" means all proceeds, including cash, instruments, securities
and other property, from time to time received, receivable or otherwise
distributed in respect of, in exchange for or upon the exercise or disposition
of any or all of the Collateral under the Collateral Agreement.

          "SECURED OBLIGATIONS" means the obligations secured under the
Collateral Agreement including (a) all obligations of Debtor under the
Collateral Agreement or the Stock Purchase Agreement, (b) all obligations of
Share Seller under the Stock Purchase Agreement and (c) all obligations of Share
Purchaser under the Stock Purchase Agreement. The Secured Obligations shall
include any interest, costs, fees, expenses and indemnities which accrue on or
with respect to any of the foregoing, whether before or after the commencement
of any case, proceeding or other action relating to the bankruptcy, insolvency
or reorganization of Debtor.

          "SECURITY" or "SECURITIES" has the meaning set forth in Section
8-102(a)(15) of the UCC.

          "SECURITY INTERESTS" means the security interests in the Collateral
granted under the Collateral Agreement securing the Secured Obligations.

          "SHARE PURCHASER" means Mandalay Resort Group or its successors or
permitted assigns under the Stock Purchase Agreement.

          "SHARE SELLER" means Bank of America, N.A., or its successors or
permitted assigns under the Stock Purchase Agreement.

          "SHARES" means shares of the common stock of Share Purchaser.

          "STOCK PURCHASE AGREEMENT" means the Stock Purchase Agreement, dated
as of September 8, 2000, among Share Purchaser, Share Seller and Debtor, as the
same may be amended, restated or otherwise modified from time to time.

          "SUBSTITUTE COLLATERAL" means all Eligible Substitute Collateral,
distributions thereon and any Proceeds thereof transferred or Delivered to or in
the possession of or received by the Collateral Agent pursuant to the Collateral
Agreement and not transferred to Debtor or released by the Collateral Agent
thereunder.

                                      I-3

<PAGE>

          "UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York.

          "U.S. GOVERNMENT OBLIGATION" means any negotiable debt obligation
issued by the United States Treasury Department with a remaining maturity of not
more than one year.

                                      I-4

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