Document:

EXECUTIVE INCENTIVE PLAN

 

Exhibit 10.1

MASTERCARD INTERNATIONAL INCORPORATED

EXECUTIVE INCENTIVE PLAN

Plan Document

As Amended and Restated Effective January 1, 2003

	1.	 	Purpose
	 
	 	 	The Executive Incentive Plan (the “Plan”) is designed to support the
strategic commitment to attract, retain and motivate senior executives of
MasterCard International Incorporated (the “Company”) and Affiliated
Employers by providing a long-term incentive opportunity that is based on
the Company’s and/or Affiliated Employer’s achievement of its
quantitative and qualitative long-term performance goals.
	 
	2.	 	Definitions
	 
	 	 	For purposes of this Plan, the following terms shall have the meanings
set forth below:
	 
	 	 	“Affiliated Employer” shall mean (i) any corporation which is a member of
a controlled group of corporations (as defined in Section 414(b) of the
Code), which includes the Company, (ii) any trade or business (whether or
not incorporated), which is under common control (as defined in Section
414(c) of the Code) with the Company, (iii) any organization (whether or
not incorporated) which is a member of an affiliated services group (as
defined in Section 414(m) of the Code) which includes the Company, and
(iv) any other entity required to be aggregated with the Company pursuant
to regulations under Section 414(o) of the Code.
	 
	 	 	“Board” shall mean the Global Board of Directors.
	 
	 	 	“Cause” shall mean (i) the willful failure by the Participant to
substantially perform his duties as an employee of the Employer (other
than due to physical or mental illness) after reasonable notice to the
Participant of such failure, (ii) the Participant’s engaging in serious
misconduct that is injurious to the Company or an Affiliated Employer
including, but not limited to, damage to its reputation or standing in
its industry, (iii) the Participant’s having been convicted of, or
entered a plea of nolo contendere to a crime that constitutes a felony or
(iv) the material breach by the Participant of any written covenant or
agreement with the Company or an Affiliated Employer not to disclose any
information pertaining to the Company and/or its Affiliated Employers.
	 
	 	 	“Change in Control” means:

 

 

	 	 	(i)     if (a) at any time three stockholders have become entitled to cast at
least 45 percent of the votes eligible to be cast by all the stockholders
of MasterCard Incorporated on any issue, (b) at any time, a plan or
agreement is approved by the stockholders of MasterCard Incorporated to
sell, transfer, assign, lease or exchange (in one transaction or in a
series of transactions) all or substantially all of the Company’s or
MasterCard Incorporated’s assets, (c) at any time, a plan is approved by
the stockholders of MasterCard Incorporated for the sale, liquidation or
dissolution of the Company or MasterCard Incorporated or (d) at any time
MasterCard Incorporated shall cease to be the sole class B member of the
Company or otherwise cease to control substantially all voting rights in
the Company. The foregoing notwithstanding, a reorganization in which
the stockholders of MasterCard Incorporated continue to have all of the
ownership rights in the continuing entity shall not in and of itself be
deemed a “Change in Control” under (b), (c) and/or (d);
	 
	 	 	(ii)     the approval by the stockholders of MasterCard Incorporated of any
consolidation or merger of MasterCard Incorporated in which MasterCard
Incorporated is not the continuing or surviving corporation or pursuant
to which shares of stock of MasterCard Incorporated would be converted
into cash, securities or other property, other than a merger in which the
holders of the stock immediately prior to the merger will have the same
proportionate ownership interest (i.e., still own 100% of total) of
common stock of the surviving corporation immediately after the merger;
	 
	 	 	(iii)     any “person” (as defined in Section 13(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), other than
MasterCard Incorporated or a subsidiary or employee benefit plan or trust
maintained by MasterCard Incorporated any of its subsidiaries, becoming
(together with its “affiliates” and “associates”, as defined in Rule
12b-2 under the Exchange Act) the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of more than
twenty-five percent (25%) of the stock of MasterCard Incorporated
outstanding at the time, without the prior approval of the board of
directors of MasterCard Incorporated; or
	 
	 	 	(iv)     a majority of the voting directors of MasterCard Incorporated
proposed on a slate for election by stockholders of MasterCard
Incorporated are rejected by a vote of such stockholders.
	 
	 	 	“Committee” shall mean a committee of the Board designated by the Board
to administer the Plan. Unless the Board shall determine otherwise, the
Committee shall be the Compensation Committee.
	 
	 	 	“Determination Date” shall have the meaning set forth in Section 5.
	 
	 	 	“Disability” shall mean total and permanent disability in accordance with
the Company’s or an Affiliated Employer’s long-term disability plan.

 

 

	 	 	“Employer” shall mean the Company or an Affiliated Employer that adopts
the Plan with the approval of the Board. Appendix A contains a list of
each Employer.
	 
	 	 	“Participant” shall mean an eligible employee to whom a Performance Unit
award has been granted.
	 
	 	 	“Performance Levels” shall mean, with respect to the Performance Measures
(on an aggregate basis), the following degrees of achievement: Below
Threshold, Minimum Threshold, Target and Superior.
	 
	 	 	“Performance Measures” shall mean one or more performance goals
established by the Committee with respect to each award of Performance
Units.
	 
	 	 	“Performance Period” shall mean, with respect to each award of
Performance Units, the three-year period beginning on the date such award
is granted or such other period as may be established by the Committee at
the time of grant.
	 
	 	 	“Performance Unit” shall mean a performance unit award granted under the
Plan.
	 
	 	 	“Post-Performance Period” shall have the meaning set forth in Section
7(b).
	 
	 	 	“Retirement” shall mean retirement pursuant to the terms of the
MasterCard Accumulation Plan.
	 
	 	 	“Twelve-Month Cycle” shall mean any twelve-month period ending with an
anniversary date of the date of a grant of a Performance Unit award that
occurs on or before the end of the Vesting Period with respect to that
award.
	 
	 	 	“Unit Value” shall be the value of a Performance Unit as determined in
accordance with Section 5.
	 
	 	 	“Vesting Period” shall mean, with respect to each grant of Performance
Units, the period, as set forth in the certificate or written agreement
provided to the Participant with respect to the grant, beginning on the
date of grant and ending with the date the award is 100 percent vested.
	 
	3.	 	Eligibility
	 
	 	 	Employees who are designated Senior Vice President or higher are eligible
for participation in any Performance Period provided they have achieved
the minimum performance evaluation rating required for participation as
determined by the Committee and have been designated to the appropriate
level by March 31 of the calendar year. In addition, the Committee
and/or the Chief Executive Officer may designate any other employee as
eligible to participate in the Plan.

 

 

	4.	 	Performance Unit Awards

	 	(a)	 	Subject to the provisions of this Plan, each Performance Unit
award shall be determined by the CEO of the Company with approval by
the Committee and evidenced by a certificate or written agreement
provided to each Participant. Subject to Sections 6 and 7 of the
Plan, each Performance Unit grant shall entitle a Participant to
receive a cash payment equal to the Unit Value of such Performance
Unit. Unit Value shall be determined in accordance with Section 5.
	 
	 	(b)	 	The Committee shall specify the terms and conditions of each
award of Performance Units, including the applicable vesting
schedule, Performance Period, Performance Measures and Performance
Levels. The Committee may condition the grant of a new award on the
surrender of an outstanding award. Any such new award shall be
subject to the terms and conditions specified by the Committee at
the time the new award is granted, in accordance with the provisions
of the Plan and without regard to the terms of the surrendered
award.

	5.	 	Unit Value

	 	(a)	 	Unless otherwise provided by the Committee at the time of
grant, the Unit Value of a Performance Unit shall be determined
based upon the achievement of Performance Levels as of the
Determination Date as follows.

	 	 	 	 	 
	Performance Level	 	Unit Value
	
	 	

	Below Threshold
	 	$	0	 
	Threshold
	 	$	50	 
	Target
	 	$	100	 
	Superior
	 	$	200	 

	 	 	 	Determinations as to the achievement of Performance Levels shall
be made by the Committee in its sole discretion. The Committee
will determine the Unit Value based on interpolation in the event
that performance between threshold and target or target and
superior is achieved.
	 
	 	(b)	 	The Committee shall determine the Performance Level achieved
for a Performance Period during the 60 day period following the
Determination Date. Except as otherwise provided by the Committee,
the Determination Date shall be the last day of the Performance
Period to which a Performance Unit relates; provided that, if a
Participant terminates employment prior to the end of the
Performance Period, the Determination

 

 

	 	 	 	Date with respect to any Performance Units relating to such
Performance Period (provided such Performance Units have not been
forfeited pursuant to Section 6 by reason of such termination)
shall be deemed to be the last day of employment and the
Performance Level achieved with respect to any such Performance
Units shall be deemed to be Target.

	6.	 	Vesting

	 	(a)	 	Each Performance Unit shall vest subject to such terms and
conditions as the Committee may, in its sole discretion, determine;
provided that, unless otherwise provided by the Committee at the
time of award, Performance Units which relate to a three-year
Performance Period shall vest in annual increments according to the
following schedule if the Participant completes 1,000 hours of
service in each Twelve-Month Cycle and is employed by the Employer
on the last day of the respective Twelve-Month Cycle:

	 	 	 	 	 
	Twelve-Month	 	 	 	 
	Cycle Ending	 	 	 	 
	on the Following	 	 	 	 
	Anniversary of	 	% of Performance
	the Date of Grant	 	Units Vested
	
	 	

	1st Anniversary
	 	 	26 2/3	%
	2nd Anniversary
	 	 	26 2/3	%
	3rd Anniversary
	 	 	26 2/3	%
	4th Anniversary
	 	 	0	%
	5th Anniversary
	 	 	20	%

	 	(b)	 	Except as otherwise determined by the Committee or as
provided below, unvested Performance Units relating to the
Twelve-Month Cycle in which a Participant terminates employment, and
subsequent Twelve-Month Cycles during the Vesting Period for the
award, shall be forfeited upon termination of employment.
	 
	 	(c)	 	Notwithstanding the foregoing, if a Participant ceases to be
employed during a Twelve-Month Cycle, but is rehired either during
the same Twelve-Month Cycle or during a subsequent Twelve-Month
Cycle in the Vesting Period for the same award of Performance Units,
the Participant shall be eligible to vest in the Performance Units
under that award that relate to the Twelve-Month Cycle of rehiring
and subsequent Twelve-Month Cycles if the Participant otherwise
meets the terms and conditions specified in the award and completes
1,000 hours of service in and is employed on the last day of the
Twelve-Month Cycle; provided, however, that, in order to vest in the
Performance Units relating to the final Twelve-Month Cycle in the
Vesting Period, the Participant must be employed on

 

 

	 	 	 	the first and last day of that final Twelve-Month Cycle and have
completed 1,000 hours of service during that final Twelve-Month
Cycle.
	 
	 	(d)	 	Notwithstanding the foregoing, upon a Participant’s
termination of employment due to death or Disability, all of the
Participant’s Performance Units shall immediately vest and none
shall be forfeited.
	 
	 	(e)	 	Notwithstanding the foregoing, upon a Participant’s
termination of employment due to Retirement, all of the
Participant’s Performance Units (with the exception of any
Performance Units granted with no vesting until the end of the
Performance Period) shall immediately vest and none shall be
forfeited, as long as Participant has at least six months of service
in the Performance Period. The Committee shall retain the
discretion to allow in particular cases immediate vesting under this
Section 6(e) to a Participant holding Performance Units that have no
vesting until the end of the Performance Period.
	 
	 	(f)	 	Notwithstanding the foregoing, upon a Participant’s
termination of employment for Cause, all vested but unpaid
Performance Units held by the Participant shall be forfeited in
full, without any right to payment from the Company. The Committee
in its sole discretion shall determine whether a termination was for
“Cause”.
	 
	 	(g)	 	Notwithstanding the foregoing, upon a Participant’s voluntary
termination other than by reason of Disability, all vested but
unpaid Performance Units held by a Participant who violates the
noncompetition provisions set forth in Section 7(c) below, shall be
forfeited in full.
	 
	 	(h)	 	In the event of a Change in Control, as defined in Section 2
above, key executives defined in the MasterCard Change of Control
policy or who are parties to a “Change-in-Control” agreement with
the Company or an Affiliated Employer shall be eligible for 100%
vesting in all unvested awards.

	7.	 	Payment

	 	(a)	 	Except as otherwise determined by the Committee at the time
of grant of a Performance Unit, or as otherwise elected by the
Participant pursuant to Section 7(d) below, within 60 days of the
determination of the Unit Value in accordance with Section 5,
Participant shall receive a cash payment in respect of each vested
Performance Unit equal to such Unit Value for the completed
Performance Period.
	 
	 	(b)	 	Except as otherwise determined by the Committee at the time
of grant of a Performance Unit, or as otherwise elected by the
Participant pursuant to

 

 

	 	 	 	Section 7(d) below, (i) if Participant remains employed such that
he or she vests in Performance Units for a Twelve-Month Cycle in
the portion of the Vesting Period that extends beyond the
Performance Period (the “Post-Performance Period”) or (ii) if a
Participant terminates employment due to death or Disability
during the Post-Performance Period, the Participant shall receive,
within 60 days of the end of the Vesting Period, or termination,
as the case may be, an additional cash payment in respect of each
Performance Unit which has not yet been paid pursuant to paragraph
(a) above equal to the Unit Value.
	 
	 	(c)	 	In the event a Participant voluntarily terminates employment
other than by reason of Disability, no payment otherwise due under
Section 7(a) or (b) above shall be made before 120 days after such
voluntary termination. In the event that, during the 120 days
following such voluntary termination, the Participant directly or
indirectly engages or invests in any business or activity that is
directly or indirectly in competition with any business or activity
engaged in by the Company or an Affiliated Employer, including, but
not limited to, any credit, charge, chip, or debit card business or
processor, the Participant’s Performance Units shall not be paid
and, pursuant to Section 6(g) above, shall be forfeited in full.
For purposes of the preceding sentence, the Participant shall be
deemed to be engaged in any business which any person for whom he
shall perform services is engaged. Notwithstanding the foregoing,
nothing herein shall prohibit the Participant from having a
beneficial ownership interest of less than 3% of the outstanding
amount of any class of securities of any enterprise (but without
otherwise participating in the activities of such enterprise) if
such securities are listed on a national securities exchange or
quoted on an inter-dealer quotation system. The Participant shall
not be treated as engaged or invested in any business in competition
with that of the Company or an Affiliated Employer if the
Participant performs services or engages in business or activities
for a MasterCard member, provided that the MasterCard member is not
a party to a brand dedication agreement with VISA USA, VISA
International, American Express, JCB, Discover, Diners Club, Carte
Blanche or any other competitor of the Company or an Affiliated
Employer, the term of which is two years or more. In the event
that, during the 120 days following such voluntary termination, the
Participant does not engage in or invest in any such competitive
business or activity, and certifies to that effect on forms provided
by the Company, the Participant’s Performance Units shall be paid.
	 
	 	(d)	 	Payments of Performance Units under Sections 7(a) and 7(b)
above are eligible for deferral under the terms and conditions of
the MasterCard International Incorporated Deferral Plan, as amended
from time to time. In the event a Participant who has made a
Deferred Performance Units Election under the MasterCard
International Incorporated Deferral Plan

 

 

	 	 	 	voluntarily terminates employment, Sections 6(g) and 7(c) will
apply to those payments that, in the absence of the Deferred
Performance Units Election, would have been paid in the 120 days
following termination.

	8.	 	Term
	 
	 	 	The Plan shall be effective as of January 1999. Amendments to the Plan
generally shall be effective on their adoption. Section 6(g) and Section
7(c), as added to the Plan effective July 9, 2001, shall apply to
Performance Units awarded beginning January 1, 2002. The amendments to
the Plan made effective as of December 12, 2001, shall apply to all
Performance Units awarded in 2001 as well as to Performance Units awarded
thereafter.
	 
	9.	 	Administration

	 	(a)	 	The Committee shall determine, in its sole discretion, any question
arising in connection with the interpretation or application of
the provisions of the Plan and its decisions or actions in respect
thereof shall be conclusive and binding upon any and all
Participants and their beneficiaries, successors and assigns, and
all other persons. All resolutions or actions taken by the
Committee shall be by affirmative vote or action of a majority of
the members of the Committee.
	 
	 	(b)	 	The Committee may delegate to one or more officers or
managers of the Company, or to a committee of such officers or
managers, the authority, subject to such terms and limitations as
the Committee shall determine, to take any actions the Committee has
the authority to take under the Plan.
	 
	 	(c)	 	Members of the Committee or its delegates shall be fully
protected in relying in good faith upon the advice of counsel and
shall incur no liability with respect to the Plan except for their
own gross negligence or willful misconduct in the performance of
their duties. The Company shall defend, indemnify and hold
harmless each member of the Committee or its delegates against any
and all claims, liabilities and costs (including attorney fees)
arising in connection with their administration of the Plan except
for such member’s own gross negligence or willful misconduct.

	10.	 	General Provisions

	 	(a)	 	Nothing in this Plan or in any instrument executed pursuant
hereto shall confer upon any person any right to continue in the
employment or other service of the Company or an Affiliated
Employer, or shall affect the right of the Company or an Affiliated
Employer to terminate the employment or other service of any person
at any time with or without cause.

 

 

	 	(b)	 	The grant of Performance Units shall not confer upon a Participant
any of
the rights of a stockholder of the Company or an Affiliated
Employer, and no shares of stock shall be issued pursuant to
Performance Units. The rights of a Participant under the Plan
shall be no greater than the rights of a general unsecured
creditor of the Company or Affiliated Employer.
	 
	 	(c)	 	In the event a Participant is employed or resides in a country with
laws that prescribe certain requirements for long-term incentives
to qualify for advantageous tax treatment, the Committee may at
its discretion modify the terms of an award to be made under the
Plan and procure assumption of any of the Company’s obligations
hereunder by an affiliate company, in a manner consistent or
inconsistent with the terms of the Plan, for the purpose of
qualifying the award under such laws of such country; provided,
however, that to the extent possible, the overall terms and
conditions of such an award should not be made more favorable to
the recipient than would be permitted if the award had been
granted under this Plan as herein set forth.
	 
	 	(d)	 	Participants shall be solely responsible for the payment of any taxes
due in connection with the Plan; provided, however, that the
Company shall make such provisions as it may deem appropriate for
the withholding of any taxes which the Company determines it or an
Affiliated Employer is required to withhold in connection with any
award under the Plan.
	 
	 	(e)	 	By accepting any benefits under the Plan, each Participant, and
each person claiming under or through him, shall be conclusively
deemed to have indicated his acceptance and ratification of, and
consent to, all provisions of the Plan and any action or decision
under the Plan by the Company, an Affiliated Employer, their
agents and employees, and the Committee.
	 
	 	(f)	 	The validity, construction, interpretation and administration of the
Plan and any awards under the Plan and of any determinations or
decisions made thereunder, and the rights of all persons having or
claiming to have any interest herein or thereunder, shall be
governed by, and determined exclusively in accordance with, the
laws of New York (determined without regard to its conflict of
laws provisions).
	 
	 	(g)	 	This Plan shall be binding upon and inure to the benefit of
the Company, its affiliated companies and their successors or
assigns, and all Participants and their beneficiaries, successors,
and assigns and all other persons claiming under or through any of
them.
	 
	 	(h)	 	The value of Performance Unit awards shall not be treated as

 

 

	 	 	 	compensation and/or salary for purposes of calculating a
Participant’s benefits under any of the Company’s or an Affiliated
Employer’s other benefit plans, policies or programs.
	 
	 	(i)	 	The use of the masculine gender shall also include within its
meaning the feminine. The use of the singular shall include
within its meaning the plural and vice versa.

	11.	 	Amendment and Termination
	 
	 	 	This Plan may be amended or terminated by the Board at any time, for any
reason and in any respect; provided, however, that no such amendment or
termination of this Plan shall affect adversely any award of Performance
Units theretofore granted without the written consent of the holder
thereof. Notwithstanding the foregoing:

	 	(a)	 	The methodology for determining Performance Units and Unit
Value may be changed, on a prospective basis, at any time.
	 
	 	(b)	 	Upon termination of the Plan, the Board may provide for the
immediate termination of all outstanding Performance Units in
exchange for a cash payment equal to the then value of the
Performance Units that are outstanding and vested (pursuant to
Section 6) at the time of termination.

 

 

APPENDIX A

EMPLOYERS

MasterCard International Incorporated

MasterCard International, LLC<PAGE>

                                                                    EXHIBIT 10.1
                                 PROMISSORY NOTE

Borrower: BRAINERD INTERNATIONAL         Lender: First National Bank of Deerwood
          RACEWAY & RESORT, INC.                 Brainerd Branch
                                                 PO Box 527
          5523 BIRCHDALE RD                      724 W Washington St
          BRAINERD, MN 56401                     Brainerd, MN 56401-0527
                                                 (218) 828-2111

<TABLE>
<S><C>
Principal Amount: $500,000.00     Interest Rate: 7.500%    Date of Note:February 14, 2003
</TABLE>

PROMISE TO PAY. BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.

("Borrower") promises to pay to First National Bank of Deerwood ("Lender"), or
order, in lawful money of the United States of America, the principal amount of
Five Hundred Thousand & 00/100 Dollars ($500,000.00), together with interest at
the rate of 7.500% per annum on the unpaid principal balance from February 14,
2003, until paid In full.

PAYMENT. Borrower will pay this loan in one principal payment of $500,000.00
plus interest on October 15, 2003. This payment due on October 15, 2003, will
be for all principal and all accrued interest not yet paid. In addition,
Borrower will pay regular monthly payments of all accrued unpaid interest due
as of each payment date, beginning March 14, 2003, with all subsequent
interest payments to be due on the same day of each month after that. Unless
otherwise agreed or required by applicable law, payments will be applied
first to accrued unpaid interest, then to principal, and any remaining amount
to any unpaid collection costs. The annual interest rate for this Note is
computed on a 365/360 basis: that is, by applying the ratio of the annual
interest rate over a year of 360 days, multiplied by the outstanding
principal balance, multiplied by the actual number of days the principal
balance is outstanding. Borrower will pay Lender at Lender's address shown
above or at such other place as Lender may designate in writing.

PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance
charges are earned fully as of the date of the loan and will not be subject
to refund upon early payment (whether voluntary or as a result of default),
except as otherwise required by law. Except for the foregoing, Borrower may
pay without penalty all or a portion of the amount owed earlier than it is
due. Early payments will not, unless agreed to by Lender in writing, relieve
Borrower of Borrower's obligation to continue to make payments under the
payment schedule. Rather, early payments will reduce the principal balance
due. Borrower agrees not to send Lender payments marked "paid in full",
"without recourse", or similar language. If Borrower sends such a payment,
Lender may accept it without losing any of Lender's rights under this Note,
and Borrower will remain obligated to pay any further amount owed to Lender.
All written communications concerning disputed amounts, including any check
or other payment instrument that indicates that the payment constitutes
"payment in full" of the amount owed or that is tendered with other
conditions or limitations or as full satisfaction of a disputed amount must
be mailed or delivered to: First National Bank of Deerwood, Brainerd Branch,
PO Box 527, 724 W Washington St, Brainerd, MN 56401-0627.

INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final
maturity, the total sum due under this Note will bear interest from the date
of acceleration or maturity at the interest rate on this Note. The interest
rate will not exceed the maximum rate permitted by applicable law.

DEFAULT. Each of the following shall constitute an event of default ("Event of
Default") under this Note:

       Payment Default. Borrower fails to make any payment when due under this
       Note.

       Other Defaults. Borrower fails to comply with or to perform any other
       term, obligation, covenant or condition contained in this Note or in any
       of the related documents or to comply with or to perform any term,
       obligation, covenant or condition contained in any other agreement
       between Lender and Borrower.

       Default in Favor of Third Parties. Borrower or any Grantor defaults under
       any loan, extension of credit, security agreement, purchase or sales
       agreement, or any other agreement, in favor of any other creditor or
       person that may materially affect any of Borrower's property or
       Borrower's ability to repay this Note or perform Borrower's obligations
       under this Note or any of the related documents.

       False Statements. Any warranty, representation or statement made or
       furnished to Lender by Borrower or on Borrower's behalf under this Note
       or the related documents is false or misleading in any material respect,
       either now or at the time made or furnished or becomes false or
       misleading at any time thereafter.

       Insolvency. The dissolution or termination of Borrower's existence as a
       going business, the insolvency of Borrower, the appointment of a receiver
       for any part of Borrower's property, any assignment for the benefit of
       creditors, any type of creditor workout, or the commencement of any
       proceeding under any bankruptcy or insolvency laws by or against
       Borrower.
<PAGE>

       Creditor or Forfeiture Proceedings. Commencement of foreclosure or
       forfeiture proceedings, whether by judicial proceeding, self-help,
       repossession or any other method, by any creditor of Borrower or by any
       governmental agency against any collateral securing the loan. This
       includes a garnishment of any of Borrower's accounts, including deposit
       accounts, with Lender. However, this Event of Default shall not apply if
       there is a good faith dispute by Borrower as to the validity or
       reasonableness of the claim which is the basis of the creditor or
       forfeiture proceeding and if Borrower gives Lender written notice of the
       creditor or forfeiture proceeding and deposits with Lender monies or a
       surety bond for the creditor or forfeiture proceeding, in an amount
       determined by Lender, in its sole discretion, as being an adequate
       reserve or bond for the dispute.

       Events Affecting Guarantor. Any of the preceding events occurs with
       respect to any guarantor, endorser, surety, or accommodation party of any
       of the indebtedness or any guarantor, endorser, surety, or accommodation
       party dies or becomes incompetent, or revokes or disputes the validity
       of, or liability under, any guaranty of the Indebtedness evidenced by
       this Note. In the event of a death, Lender, at its option, may, but shall
       not be required to, permit the guarantor's estate to assume
       unconditionally the obligations arising under the guaranty in a manner
       satisfactory to Lender, and, in doing so, cure any Event of Default.

       Change In Ownership. Any change in ownership of twenty-five percent (25%)
       or more of the common stock of Borrower.

       Adverse Change. A material adverse change occurs in Borrower's financial
       condition, or Lender believes the prospect of payment or performance of
       this Note is impaired.

       Insecurity. Lender in good faith believes itself insecure.

       Cure Provisions. If any default, other than a default in payment is
       curable and if Borrower has not been given a notice of a breach of the
       same provision of this Note within the preceding twelve (12) months, it
       may be cured (and no event of default will have occurred) if Borrower,
       after receiving written notice from Lender demanding cure of such
       default: (1) cures the default within fifteen (15) days; or (2) if the
       cure requires more than fifteen (15) days, immediately initiates steps
       which Lender deems in Lender's sole discretion to be sufficient to cure
       the default and thereafter continues and completes all reasonable and
       necessary steps sufficient to produce compliance as soon as reasonably
       practical.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, and then
Borrower will pay that amount.

ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender's reasonable
attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit,
including reasonable attorneys' fees, expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction), and
appeals. If not prohibited by applicable law, Borrower also will pay any court
costs, in addition to all other sums provided by law.

GOVERNING LAW. This Note will be governed by, construed and enforced in
accordance with federal law and the laws of the State of Minnesota. This Note
has been accepted by Lender In the State of Minnesota.

CHOICE OF VENUE. If there is a lawsuit, Borrower agrees upon Lender's request to
submit to the jurisdiction of the courts of Crow Wing County, State of
Minnesota.

DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $18.00 if Borrower
makes a payment on Borrower's loan and the check or preauthorized charge with
which Borrower pays is later dishonored.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts, and, at Lender's option, to
administratively freeze all such accounts to allow Lender to protect Lender's
charge and setoff rights provided in this paragraph.

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and
upon Borrower's heirs, personal representatives, successors and assigns, and
shall inure to the benefit of Lender and its successors and assigns.

NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES.
Please notify us if we report any inaccurate information about your account(s)
to a consumer reporting agency. Your written notice describing the specific
inaccuracy(ies) should be sent to us at the following address: First National
Bank of Deerwood PO Box 520 Deerwood, MN 56444-0520

GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, and notice of dishonor. Upon any change in the
terms of this Note, and unless otherwise expressly stated in writing, no party
who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree that Lender
may renew or extend (repeatedly and for any length of time) this loan or release
any party or guarantor or collateral; or impair, fail to realize upon or perfect
Lender's security interest in the collateral; and take any other action deemed
necessary by Lender without the consent of or notice to anyone. All such parties
also agree that Lender may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made. The obligations
under this Note are joint and several.

SECTION DISCLOSURE. This loan is made under Minnesota Statutes, Section 47.59.

<PAGE>

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

BORROWER:

BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.

By,__________________________________________________
   BILL SINGLETERRY, President of BRAINERD
   INTERNATIONAL RACEWAY & RESORT, INC.

<PAGE>

                                    MORTGAGE

RECORDATION REQUESTED BY:
      First National Bank of Deerwood
      Brainerd Branch
      PO Box 527
      724 W Washington St
      Brainerd, MN 56401-0527

WHEN RECORDED MAIL TO:
      First National Bank of Deerwood
      Brainerd Branch
      PO Box 527
      724 W Washington St
      Brainerd, MN 56401-0527

SEND TAX NOTICES TO:
      BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.
      FKA: THE COLONEL'S BRAINERD INTERNATIONAL RACEWAY, INC.
      FKA: BRAINERD INTERNATIONAL RACEWAY, INC.
      FKA: BRAINERD INTERNATIONAL, INC.
      5523 BIRCHDALE RD
      BRAINERD, MN 56401

THIS MORTGAGE dated February 14, 2003, is made and executed between BRAINERD
INTERNATIONAL RACEWAY & RESORT, INC.
FKA: THE COLONEL'S BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL, INC., whose address is 5523 BIRCHDALE RD, BRAINERD,
MN 56401 (referred to below as "Grantor") and First National Bank of Deerwood,
whose address is PO Box 527, 724 W Washington St, Brainerd, MN 56401-0527
(referred to below as "Lender").

GRANT OF MORTGAGE. For valuable consideration, Grantor mortgages and conveys to
Lender all of Grantor's right, title, and interest in and to the following
described real property, together with all existing or subsequently erected or
affixed buildings, improvements and fixtures; all easements, rights of way, and
appurtenances; all water, water rights, watercourses and ditch rights (including
stock in utilities with ditch or irrigation rights); and all other rights,
royalties, and profits relating to the real property, Including without
limitation all minerals, oil, gas, geothermal and similar matters, (the "Real
Property") located in CROW WING County, State of Minnesota:

     See EXHIBIT "A", which is attached to this Mortgage and made a part of this
     Mortgage as if fully set forth herein.

The Real Property or its address is commonly known as 5523 BIRCHDALE RD,
BRAINERD, MN 56401.

Grantor presently assigns to Lender all of Grantor's right, title, and interest
in and to all present and future leases of the Property and all Rents from the
Property. In addition, Grantor grants to Lender a Uniform Commercial Code
security interest in the Personal Property and Rents.

THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN
THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE
INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE AND
THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS:

PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor
shall pay to Lender all amounts secured by this Mortgage as they become due and
shall strictly perform all of Grantor's obligations under this Mortgage.

POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's
possession and use of the Property shall be governed by the following
provisions:

     Possession and Use. Until the occurrence of an Event of Default, Grantor
     may (1) remain in possession and control of the Property; (2) use, operate
     or manage the Property; and (3) collect the Rents from the Property.

     Duty to Maintain. Grantor shall maintain the Property in tenantable
     condition and promptly perform all repairs, replacements, and maintenance
     necessary to preserve its value.

<PAGE>

     Compliance With Environmental Laws. Grantor represents and warrants to
     Lender that: (1) During the period of Grantor's ownership of the Property,
     there has been no use, generation, manufacture, storage, treatment,
     disposal, release or threatened release of any Hazardous Substance by any
     person on, under, about or from the Property; (2) Grantor has no knowledge
     of, or reason to believe that there has been, except as previously
     disclosed to and acknowledged by Lender in writing, (a) any breach or
     violation of any Environmental Laws, (b) any use, generation, manufacture,
     storage, treatment, disposal, release or threatened release of any
     Hazardous Substance on, under, about or from the Property by any prior
     owners or occupants of the Property, or (c) any actual or threatened
     litigation or claims of any kind by any person relating to such matters;
     and (3) Except as previously disclosed to and acknowledged by Lender in
     writing, (a) neither Grantor nor any tenant, contractor, agent or other
     authorized user of the Property shall use, generate, manufacture, store,
     treat, dispose of or release any Hazardous Substance on, under, about or
     from the Property and (b) any such activity shall be conducted in
     compliance with all applicable federal, state, and local laws, regulations
     and ordinances, including without limitation all Environmental Laws.
     Grantor authorizes Lender and its agents to enter upon the Property to make
     such Inspections and tests, at Grantor's expense, as Lender may deem
     appropriate to determine compliance of the Property with this section of
     the Mortgage. Any inspections or tests made by Lender shall be for Lender's
     purposes only and shall not be construed to create any responsibility or
     liability on the part of Lender to Grantor or to any other person. The
     representations and warranties contained herein are based on Grantor's due
     diligence in investigating the Property for Hazardous Substances. Grantor
     hereby (1) releases and waives any future claims against Lender for
     indemnity or contribution in the event Grantor becomes liable for cleanup
     or other costs under any such laws; and (2) agrees to indemnify and hold
     harmless Lender against any and all claims, losses, liabilities, damages,
     penalties, and expenses, including attorneys' fees, consultants' fees, and
     costs which Lender may directly or indirectly sustain or suffer resulting
     from a breach of this section of the Mortgage or as a consequence of any
     use, generation, manufacture, storage, disposal, release or threatened
     release occurring prior to Grantor's ownership or interest in the Property,
     whether or not the same was or should have been known to Grantor. The
     provisions of this section of the Mortgage, including the obligation to
     indemnify, shall survive the payment of the Indebtedness and the
     satisfaction and reconveyance of the lien of this Mortgage and shall not be
     affected by Lender's acquisition of any interest in the Property, whether
     by foreclosure or otherwise,

     Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance
     nor commit, permit, or suffer any stripping of or waste on or to the
     Property or any portion of the Property. Without limiting the generality of
     the foregoing, Grantor will not remove, or grant to any other party the
     right to remove, any timber, minerals (including oil and gas), coal, clay,
     scoria, soil, gravel or rock products without Lender's prior written
     consent.

     Removal of Improvements. Grantor shall not demolish or remove any
     Improvements from the Real Property without Lender's prior written consent.
     As a condition to the removal of any Improvements, Lender may require
     Grantor to make arrangements satisfactory to Lender to replace such
     improvements with improvements of at least equal value.

     Lender's Right to Enter. Lender and Lender's agents and representatives may
     enter upon the Real Property at all reasonable times to attend to Lender's
     interests and to inspect the Real Property for purposes of Grantor's
     compliance with the terms and conditions of this Mortgage.

     Compliance with Governmental Requirements. Grantor shall promptly comply
     with all laws, ordinances, and regulations, now or hereafter in effect, of
     all governmental authorities applicable to the use or occupancy of the
     Property, including without limitation, the Americans with Disabilities
     Act. Grantor may contest in good faith any such law, ordinance, or
     regulation and withhold compliance during any proceeding, including
     appropriate appeals, so long as Grantor has notified Lender in writing
     prior to doing so and so long as, in Lender's sole opinion, Lender's
     interests in the Property are not jeopardized. Lender may require Grantor
     to post adequate security or a surety bond, reasonably satisfactory to
     Lender, to protect Lender's interest.

     Duty to Protect. Grantor agrees neither to abandon or leave unattended the
     Property. Grantor shall do all other acts, in addition to those acts set
     forth above in this section, which from the character and use of the
     Property are reasonably necessary to protect and preserve the Property.

DUE ON SALE - CONSENT BY LENDER. Lender may, at Lender's option, declare
immediately due and payable all sums secured by this Mortgage upon the sale or
transfer, without Lender's prior written consent, of all or any part of the Real
Property, or any interest in the Real Property. A "sale or transfer" means the
conveyance of Real Property or any right, title or interest in the Real
Property; whether legal, beneficial or equitable; whether voluntary or
involuntary; whether by outright sale, deed, installment sale contract, land
contract, contract for deed, leasehold interest with a term greater than three
(3) years, lease-option, contract, or by sale, assignment, or transfer of any
beneficial interest in or to any land trust holding title to the Real Property,
or by any other method of conveyance of an interest in the Real Property. If any
Grantor is a corporation, partnership or limited liability company, transfer
also includes any change in ownership of more than twenty-five percent (25%) of
the voting stock, partnership interests or limited liability company interests,
as the case may be, of such Grantor. However, this option shall net be
exercised, by Lender if such exercise is prohibited by federal law or by
Minnesota law.

TAXES AND LIENS. The following provisions relating to the taxes and liens on the
Property are part of this Mortgage:

     Payment. Grantor shall pay when due (and in all events prior to
     delinquency) all taxes, payroll taxes, special taxes, assessments, water
     charges and sewer service charges levied against or on account of the
     Property, and shall pay when due all claims for work done on or for
     services rendered or material furnished to the Property. Grantor shall
     maintain the Property free of any liens having priority over or equal to
     the interest of Lender under this Mortgage, except for those liens
     specifically agreed to in writing by Lender, and except for the lien of
     taxes and assessments not due as further specified in the Right to Contest
     paragraph.

     Right to Contest. Grantor may withhold payment of any tax, assessment, or
     claim in connection with a good faith dispute over the obligation to pay,
     so long as Lender's interest in the Property is not jeopardized. If a lien
     arises or is filed as a result of nonpayment, Grantor shall within fifteen
     (15) days after the lien arises or, if a lien is filed, within fifteen (15)
     days after Grantor has notice of the filing, secure the discharge of the
     lien, or if requested by Lender, deposit with Lender cash or a sufficient
     corporate surety bond or other security satisfactory to Lender in an amount
     sufficient to discharge the lien plus any costs and reasonable attorneys'
     fees, or other charges that could accrue as a result of a foreclosure or
     sale under the lien. In any contest, Grantor shall defend itself and Lender
     and shall satisfy any adverse judgment before

<PAGE>

     enforcement against the Property. Grantor shall name Lender as an
     additional obligee under any surety bond furnished in the contest
     proceedings.

     Evidence of Payment. Grantor shall upon demand furnish to Lender
     satisfactory evidence of payment of the taxes or assessments and shall
     authorize the appropriate governmental official to deliver to Lender at any
     time a written statement of the taxes and assessments against the Property.

     Notice of Construction. Grantor shall notify Lender at least fifteen (15)
     days before any work Is commenced, any services are furnished, or any
     materials are supplied to the Property, if any mechanic's lien,
     materialmen's lien, or other lien could be asserted on account of the work,
     services, or materials and the cost exceeds $5,000.00. Grantor will upon
     request of Lender furnish to Lender advance assurances satisfactory to
     Lender that Grantor can and will pay the cost of such improvements.

PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the
Property are a part of this Mortgage:

     Maintenance of Insurance. Grantor shall procure and maintain policies of
     fire insurance with standard extended coverage endorsements on a
     replacement basis for the full insurable value covering all improvements on
     the Real Property in an amount sufficient to avoid application of any
     coinsurance clause, and with a standard mortgagee clause in favor of
     Lender. Grantor shall also procure and maintain comprehensive general
     liability insurance in such coverage amounts as Lender may request with
     Lender being named as additional insureds in such liability insurance
     policies. Additionally, Grantor shall maintain such other insurance,
     including but not limited, to hazard, business interruption and boiler
     insurance as Lender may require. Policies shall be written by such
     insurance companies and in such form as may be reasonably acceptable to
     Lender. Grantor shall deliver to Lender certificates of coverage from each
     insurer containing a stipulation that coverage will not be cancelled or
     diminished without a minimum of thirty (30) days' prior written notice to
     Lender and not containing any disclaimer of the insurer's liability for
     failure to give such notice. Each insurance policy also shall include an
     endorsement providing that coverage in favor of Lender will not be impaired
     in any way by any act, omission or default of Grantor or any other person.
     Should the Real Property be located in an area designated by the Director
     of the Federal Emergency Management Agency as a special flood hazard area,
     Grantor agrees to obtain and maintain Federal Flood Insurance, if
     available, within 45 days after notice is given by Lender that the Property
     Is located in a special flood hazard area, for the full unpaid principal
     balance of the loan and any prior liens on the property securing the loan,
     up to the maximum policy limits set under the National Flood Insurance
     Program, or as otherwise required by Lender, and to maintain such insurance
     for the term of the loan.

     Application of Proceeds. Grantor shall promptly notify Lender of any loss
     or damage to the Property if the estimated cost of repair or replacement
     exceeds $5,000.00. Lender may make proof of loss if Grantor fails to do so
     within fifteen (15) days of the casualty. Whether or not Lender's security
     Is impaired, Lender may, at Lender's election, receive and retain the
     proceeds of any insurance and apply the proceeds to the reduction of the
     Indebtedness, payment of any lien affecting the Property, or the
     restoration and repair of the Property. If Lender elects to apply the
     proceeds to restoration and repair, Grantor shall repair or replace the
     damaged or destroyed improvements in a manner satisfactory to Lender.
     Lender shall, upon satisfactory proof of such expenditure, pay or reimburse
     Grantor from the proceeds for the reasonable cost of repair or restoration
     if Grantor is not in default under this Mortgage. Any proceeds which have
     not been disbursed within 180 days after their receipt and which Lender has
     not committed to the repair or restoration of the Property shall be used
     first to pay any amount owing to Lender under this Mortgage, then to pay
     accrued interest, and the remainder, if any, shall be applied to the
     principal balance of the Indebtedness. If Lender holds any proceeds after
     payment in full of the Indebtedness, such proceeds shall be paid to Grantor
     as Grantor's interests may appear.

     Grantor's Report on Insurance. Upon request of Lender, however not more
     than once a year, Grantor shall furnish to Lender a report on each existing
     policy of insurance showing: (1) the name of the insurer; (2) the risks
     insured; (3) the amount of the policy; (4) the property insured, the then
     current replacement value of such property, and the manner of determining
     that value; and (5) the expiration date of the policy. Grantor shall, upon
     request of Lender, have an independent appraiser satisfactory to Lender
     determine the cash value replacement cost of the Property.

LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Property or if Grantor fails to
comply with any provision of this Mortgage or any Related Documents, including
but not limited to Grantor's failure to discharge or pay when due any amounts
Grantor is required to discharge or pay under this Mortgage or any Related
Documents, Lender on Grantor's behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on the Property and paying all costs
for insuring, maintaining and preserving the Property. All such expenditures
incurred or paid by Lender for such purposes will then bear interest at the rate
charged under the Note from the date incurred or paid by Lender to the date of
repayment by Grantor. All such expenses will become a part of the Indebtedness
and, at Lender's option, will (A) be payable on demand; (B) be added to the
balance of the Note and be apportioned among and be payable with any installment
payments to become due during either (1) the term of any applicable insurance
policy; or (2) the remaining term of the Note; or (C) be treated as a balloon
payment which will be due and payable at the Note's maturity. The Mortgage also
will secure payment of these amounts. Such right shall be in addition to all
other rights and remedies to which Lender may be entitled upon Default.

WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of
the Property are a part of this Mortgage:

     Title. Grantor warrants that: (a) Grantor holds good and marketable title
     of record to the Property in fee simple, free and clear of all liens and
     encumbrances other than those set forth in the Real Property description or
     in any title insurance policy, title report, or final title opinion issued
     in favor of, and accepted by, Lender in connection with this Mortgage, and
     (b) Grantor has the full right, power, and authority to execute and deliver
     this Mortgage to Lender,

     Defense of Title. Subject to the exception in the paragraph above, Grantor
     warrants and will forever defend the title to the Property against the
     lawful claims of all persons. In the event any action or proceeding is
     commenced that questions Grantor's title or the interest of Lender under
     this Mortgage, Grantor shall defend the action at Grantor's expense.
     Grantor may be the nominal party in such proceeding, but Lender shall be
     entitled to participate in the proceeding and to be represented in the
     proceeding by counsel of Lender's own choice, and Grantor will deliver, or
     cause to be delivered, to Lender such instruments as Lender may request
     from time to time to permit such participation.

<PAGE>

     Compliance With Laws. Grantor warrants that the Property and Grantor's use
     of the Property complies with all existing applicable laws, ordinances, and
     regulations of governmental authorities.

     Survival of Representations and Warranties. All representations,
     warranties, and agreements made by Grantor in this Mortgage shall survive
     the execution and delivery of this Mortgage, shall be continuing in nature,
     and shall remain in full force and effect until such time as Grantor's
     Indebtedness shall be paid in full.

CONDEMNATION. The following provisions relating to condemnation proceedings are
a part of this Mortgage:

     Proceedings. If any proceeding in condemnation is filed, Grantor shall
     promptly notify Lender in writing, and Grantor shall promptly take such
     steps as may be necessary to defend the action and obtain the award.
     Grantor may be the nominal party in such proceeding, but Lender shall be
     entitled to participate in the proceeding and to be represented in the
     proceeding by counsel of its own choice, and Grantor will deliver or cause
     to be delivered to Lender such instruments and documentation as may be
     requested by Lender from time to time to permit such participation.

     Application of Net Proceeds. If all or any part of the Property is
     condemned by eminent domain proceedings or by any proceeding or purchase in
     lieu of condemnation, Lender may at its election require that all or any
     portion of the net proceeds of the award be applied to the Indebtedness or
     the repair or restoration of the Property. The net proceeds of the award
     shall mean the award after payment of all reasonable costs, expenses, and
     attorneys' fees incurred by Lender in connection with the condemnation.

IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following
provisions relating to governmental taxes, fees and charges are a part of this
Mortgage:

     Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall
     execute such documents in addition to this Mortgage and take whatever other
     action is requested by Lender to perfect and continue Lender's lien on the
     Real Property. Grantor shall reimburse Lender for all taxes, as described
     below, together with all expenses incurred in recording, perfecting or
     continuing this Mortgage, including without limitation all taxes, fees,
     documentary stamps, and other charges for recording or registering this
     Mortgage.

     Taxes. The following shall constitute taxes to which this section applies:
     (1) a specific tax upon this type of Mortgage or upon all or any part of
     the Indebtedness secured by this Mortgage; (2) a specific tax on Grantor
     which Grantor is authorized or required to deduct from payments on the
     Indebtedness secured by this type of Mortgage; (3) a tax on this type of
     Mortgage chargeable against the Lender or the holder of the Note; and (4) a
     specific tax on all or any portion of the indebtedness or on payments of
     principal and interest made by Grantor.

     Subsequent Taxes. If any tax to which this section applies is enacted
     subsequent to the date of this Mortgage, this event shall have the same
     effect as an Event of Default, and Lender may exercise any or all of its
     available remedies for an Event of Default as provided below unless Grantor
     either (1) pays the tax before it becomes delinquent, or (2) contests the
     tax as provided above in the Taxes and Liens section and deposits with
     Lender cash or a sufficient corporate surety bond or other security
     satisfactory to Lender.

SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to
this Mortgage as a security agreement are a part of this Mortgage:

     Security Agreement. This instrument shall constitute a Security Agreement
     to the extent any of the Property constitutes fixtures, and Lender shall
     have all of the rights of a secured party under the Uniform Commercial Code
     as amended from time to time.

     Security Interest. Upon request by Lender, Grantor shall execute financing
     statements and take whatever other action is requested by Lender to perfect
     and continue Lender's security interest in the Rents and Personal Property.
     In addition to recording this Mortgage in the real property records, Lender
     may, at any time and without further authorization from Grantor, file
     executed counterparts, copies or reproductions of this Mortgage as a
     financing statement. Grantor shall reimburse Lender for all expenses
     incurred in perfecting or continuing this security interest. Upon default,
     Grantor shall not remove, sever or detach the Personal Property from the
     Property. Upon default, Grantor shall assemble any Personal Property not
     affixed to the Property in a manner and at a place reasonably convenient to
     Grantor and Lender and make it available to Lender within three (3) days
     after receipt of written demand from Lender to the extent permitted by
     applicable law.

     Addresses. The mailing addresses of Grantor (debtor) and Lender (secured
     party) from which information concerning the security interest granted by
     this Mortgage may be obtained (each as required by the Uniform Commercial
     Code) are as stated on the first page of this Mortgage.

FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to
further assurances and attorney-in-fact are a part of this Mortgage:

     Further Assurances. At any time, and from time to time, upon request of
     Lender, Grantor will make, execute and deliver, or will cause to be made,
     executed or delivered, to Lender or to Lender's designee, and when
     requested by Lender, cause to be filed, recorded, refiled, or rerecorded,
     as the case may be, at such times and in such offices and places as Lender
     may deem appropriate, any and all such mortgages, deeds of trust, security
     deeds, security agreements, financing statements, continuation statements,
     instruments of further assurance, certificates, and other documents as may,
     in the sole opinion of Lender, be necessary or desirable in order to
     effectuate, complete, perfect, continue, or preserve (1) Grantor's
     obligations under the Note, this Mortgage, and the Related Documents, and
     (2) the liens and security interests created by this Mortgage as first and
     prior liens on the Property, whether now owned or hereafter acquired by
     Grantor. Unless prohibited by law or Lender agrees to the contrary in
     writing, Grantor shall reimburse Lender for all costs and expenses incurred
     in connection with the matters referred to in this paragraph.

<PAGE>

     Attorney-in-Fact. If Grantor fails to do any of the things referred to in
     the preceding paragraph, Lender may do so for and in the name of Grantor
     and at Grantor's expense. For such purposes, Grantor hereby irrevocably
     appoints Lender as Grantor's attorney-in-fact for the purpose of making,
     executing, delivering, filing, recording, and doing all other things as may
     be necessary or desirable, in Lender's sole opinion, to accomplish the
     matters referred to in the preceding paragraph.

FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, and otherwise
performs all the obligations imposed upon Grantor under this Mortgage, Lender
shall execute and deliver to Grantor a suitable satisfaction of this Mortgage
and suitable statements of termination of any financing statement on file
evidencing Lender's security interest in the Rents and the Personal Property.
Grantor will pay, if permitted by applicable law, any reasonable termination fee
as determined by Lender from time to time.

EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute
an Event of Default under this Mortgage:

     Payment Default. Grantor fails to make any payment when due under the
     Indebtedness.

     Default on Other Payments. Failure of Grantor within the time required by
     this Mortgage to make any payment for taxes or insurance, or any other
     payment necessary to prevent filing of or to effect discharge of any lien.

     Other Defaults. Grantor fails to comply with or to perform any other term,
     obligation, covenant or condition contained in this Mortgage or in any of
     the Related Documents or to comply with or to perform any term, obligation,
     covenant or condition contained in any other agreement between Lender and
     Grantor.

     Default in Favor of Third Parties. Should Grantor default under any loan,
     extension of credit, security agreement, purchase or sales agreement, or
     any other agreement in favor of any other creditor or person that may
     materially affect any of Grantor's property or Grantor's ability to repay
     the Indebtedness or Grantor's ability, to perform Grantor's obligations
     under this Mortgage or any related document.

     False Statements. Any warranty, representation or statement made or
     furnished to Lender by Grantor or on Grantor's behalf under this Mortgage
     or the Related Documents is false or misleading in any material respect,
     either now or at the time made or furnished or becomes false or misleading
     at any time thereafter.

     Defective Collateralization. This Mortgage or any of the Related Documents
     ceases to be in full force and effect (including failure of any collateral
     document to create a valid and perfected security interest or lien) at any
     time and for any reason.

     Insolvency. The dissolution or termination of Grantor's existence as a
     going business, the insolvency of Grantor, the appointment of a receiver
     for any part of Grantor's property, any assignment for the benefit of
     creditors, any type of creditor workout, or the commencement of any
     proceeding under any bankruptcy or insolvency laws by or against Grantor.

     Creditor or Forfeiture Proceedings. Commencement of foreclosure or
     forfeiture proceedings, whether by judicial proceeding, self-help,
     repossession or any other method, by any creditor of Grantor or by any
     governmental agency against any property securing the Indebtedness. This
     includes a garnishment of any of Grantor's accounts, including deposit
     accounts, with Lender. However, this Event of Default shall not apply if
     there is a good faith dispute by Grantor as to the validity or
     reasonableness of the claim which is the basis of the creditor or
     forfeiture proceeding and if Grantor gives Lender written notice of the
     creditor or forfeiture proceeding and deposits with Lender monies or a
     surety bond for the creditor or forfeiture proceeding, in an amount
     determined by Lender, in its sole discretion, as being an adequate reserve
     or bond for the dispute.

     Breach of Other Agreement. Any breach by Grantor under the terms of any
     other agreement between Grantor and Lender that is not remedied within any
     grace period provided therein, including without limitation any agreement
     concerning any indebtedness or other obligation of Grantor to Lender,
     whether existing now or later.

     Events Affecting Guarantor. Any of the preceding events occurs with respect
     to any guarantor, endorser, surety, or accommodation party of any of the
     Indebtedness or any guarantor, endorser, surety, or accommodation party
     dies or becomes incompetent, or revokes or disputes the validity of, or
     liability under, any Guaranty of the Indebtedness. In the event of a death,
     Lender, at its option, may, but shall not be required to, permit the
     guarantor's estate to assume unconditionally the obligations arising under
     the guaranty in a manner satisfactory to Lender, and, in doing so, cure any
     Event of Default.

     Adverse Change. A material adverse change occurs In Grantor's financial
     condition, or Lender believes the prospect of payment or performance of the
     Indebtedness is impaired.

     Insecurity. Lender in good faith believes itself insecure.

     Right to Cure. If such a failure is curable and if Grantor has not been
     given a notice of a breach of the same provision of this Mortgage within
     the preceding twelve (12) months, it may be cured (and no Event of Default
     will have occurred) if Grantor, after Lender sends written notice demanding
     cure of such failure: (a) cures the failure within fifteen (15) days; or
     (b) if the cure requires more than fifteen (15) days, Immediately initiates
     steps sufficient to cure the failure and thereafter continues and completes
     all reasonable and necessary steps sufficient to produce compliance as soon
     as reasonably practical.

RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and
at any time thereafter, Lender, at Lender's option, may exercise any one or more
of the following rights and remedies, in addition to any other rights or
remedies provided by law:

     Accelerate Indebtedness. Lender shall have the right at its option without
     notice to Grantor to declare the entire Indebtedness immediately due and
     payable, including any prepayment penalty, which Grantor would be required
     to pay.

<PAGE>

     UCC Remedies. With respect to all or any part of the Personal Property,
     Lender shall have all the rights and remedies of a secured party under the
     Uniform Commercial Code. If notice to Grantor of the intended disposition
     of the Personal Property is required by law in a particular instance, such
     notice shall be deemed commercially reasonable if given to Grantor at least
     ten (10) calendar days prior to the date of intended disposition. Grantor
     shall pay on demand all costs and expenses, including but not limited to
     reasonable attorneys' fees and legal expenses, incurred by Lender in
     exercising these rights and remedies.

     Appoint Receiver. Lender shall have the right to have a receiver appointed
     to take possession of all or any part of the Property, with the power to
     protect and preserve the Property, to operate the Property preceding
     foreclosure or sale, and to collect the Rents from the Property and apply
     the proceeds, over and above the cost of the receivership, against the
     Indebtedness. The receiver may serve without bond if permitted by law.
     Lender's right to the appointment of a receiver shall exist whether or not
     the apparent value of the Property exceeds the Indebtedness by a
     substantial amount. Employment by Lender shall not disqualify a person from
     serving as a receiver.

     Foreclosure and Sale. Lender may, and is hereby authorized and empowered
     to, foreclose this Mortgage by action or advertisement pursuant to the
     statutes of the State of Minnesota providing for such foreclosure. Power is
     expressly granted to Lender (1) to sell the Property at public auction and
     to convey the Property, in fee simple, to the purchasers at such sale, and
     (2) to pay, out of the proceeds of the sale, all of the Indebtedness
     secured by this Mortgage, with interest, and all legal costs and charges of
     the foreclosure including the maximum attorneys' fees permitted by law and
     Grantor agrees to pay all such costs, and charges and fees.

     Other Remedies. Lender shall have all other rights and remedies provided in
     this Mortgage or the Note or available at law or in equity.

     Sale of the Property. To the extent permitted by applicable law, Grantor
     hereby waives any and all right to have the Property marshalled. In
     exercising its rights and remedies, Lender shall be free to sell all or any
     part of the Property together or separately, in one sale or by separate
     sales. Lender shall be entitled to bid at any public sale on all or any
     portion of the Property.

     Notice of Sale. Lender shall give Grantor reasonable notice of the time and
     place of any public sale of the Personal Property or of the time after
     which any private sale or other intended disposition of the Personal
     Property is to be made. Reasonable notice shall mean notice given at least
     ten (10) days before the time of the sale or disposition. Any sale of the
     Personal Property may be made in conjunction with any sale of the Real
     Property.

     Election of Remedies. Election by Lender to pursue any remedy shall not
     exclude pursuit of any other remedy, and an election to make expenditures
     or to take action to perform an obligation of Grantor under this Mortgage,
     after Grantor's failure to perform, shall not affect Lender's right to
     declare a default and exercise its remedies. Nothing under this Mortgage or
     otherwise shall be construed so as to limit or restrict the rights and
     remedies available to Lender following an Event of Default, or in any way
     to limit or restrict the rights and ability of Lender to proceed directly
     against Grantor and/or against any other co-maker, guarantor, surety or
     endorser and/or to proceed against any other collateral directly or
     indirectly securing the Indebtedness.

     Attorneys' Fees; Expenses. If Lender institutes any suit or action to
     enforce any of the terms of this Mortgage, Lender shall be entitled to
     recover such sum as the court may adjudge reasonable as attorneys' fees at
     trial and upon any appeal. Whether or not any court action is involved, and
     to the extent not prohibited by law, all reasonable expenses Lender incurs
     that in Lender's opinion are necessary at any time for the protection of
     its interest or the enforcement of its rights shall become a part of the
     Indebtedness payable on demand and shall bear interest at the Note rate
     from the date of the expenditure until repaid. Expenses covered by this
     paragraph include, without limitation, however subject to any limits under
     applicable law, Lender's reasonable attorneys' fees and Lender's legal
     expenses, whether or not there is a lawsuit, including reasonable
     attorneys' fees and expenses for bankruptcy proceedings (including efforts
     to modify or vacate any automatic stay or injunction), appeals, and any
     anticipated post-judgment collection services, the cost of searching
     records, obtaining title reports (including foreclosure reports),
     surveyors' reports, and appraisal fees and title insurance, to the extent
     permitted by applicable law. Grantor also will pay any court costs, in
     addition to all other sums provided by law.

NOTICES. Any notice required to be given under this Mortgage, including without
limitation any notice of default and any notice of sale shall be given in
writing, and shall be effective when actually delivered, when actually received
by telefacsimile (unless otherwise required by law), when deposited with a
nationally recognized overnight courier, or, if mailed, when deposited in the
United States mail, as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the beginning of this Mortgage.
All copies of notices of foreclosure from the holder of any lien which has
priority over this Mortgage shall be sent to Lender's address, as shown near the
beginning of this Mortgage. Any party may change its address for notices under
this Mortgage by giving formal written notice to the other parties, specifying
that the purpose of the notice is to change the party's address. For notice
purposes, Grantor agrees to keep Lender informed at all times of Grantor's
current address. Unless otherwise provided or required by law, if there is more
than one Grantor, any notice given by Lender to any Grantor is deemed to be
notice given to all Grantors.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Mortgage:

     Amendments. This Mortgage, together with any Related Documents, constitutes
     the entire understanding and agreement of the parties as to the matters set
     forth in this Mortgage. No alteration of or amendment to this Mortgage
     shall be effective unless given in writing and signed by the party or
     parties sought to be charged or bound by the alteration or amendment.

     Annual Reports. If the Property is used for purposes other than Grantor's
     residence, Grantor shall furnish to Lender, upon request, a certified
     statement of net operating income received from the Property during
     Grantor's previous fiscal year in such form and detail as Lender shall
     require. "Net operating income" shall mean all cash receipts from the
     Property less all cash expenditures made in connection with the operation
     of the Property.

     Caption Headings. Caption headings in this Mortgage are for convenience
     purposes only and are not to be used to interpret or define the provisions
     of this Mortgage.

<PAGE>

     Grantor's Copy of Documents. Lender agrees to provide Grantor with a
     conformed copy of both the Note and this Mortgage at the time they are
     executed or within a reasonable time after request.

     Governing Law. This Mortgage will be governed by, construed and enforced in
     accordance with federal law and the laws of the State of Minnesota. This
     Mortgage has been accepted by Lender in the State of Minnesota.

     Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's
     request to submit to the jurisdiction of the courts of Crow Wing County,
     State of Minnesota.

     No Waiver by Lender. Lender shall not be deemed to have waived any rights
     under this Mortgage unless such waiver is given in writing and signed by
     Lender. No delay or omission on the part of Lender in exercising any right
     shall operate as a waiver of such right or any other right. A waiver by
     Lender of a provision of this Mortgage shall not prejudice or constitute a
     waiver of Lender's right otherwise to demand strict compliance with that
     provision or any other provision of this Mortgage. No prior waiver by
     Lender, nor any course of dealing between Lender and Grantor, shall
     constitute a waiver of any of Lender's rights or of any of Grantor's
     obligations as to any future transactions. Whenever the consent of Lender
     is required under this Mortgage, the granting of such consent by Lender in
     any instance shall not constitute continuing consent to subsequent
     instances where such consent is required and in all cases such consent may
     be granted or withheld in the sole discretion of Lender.

     Severability. If a court of competent jurisdiction finds any provision of
     this Mortgage to be illegal; invalid, or unenforceable as to any
     circumstance, that finding shall not make the offending provision illegal,
     invalid, or unenforceable as to any other circumstance. If feasible, the
     offending provision shall be considered modified so that it becomes legal,
     valid and enforceable. If the offending provision cannot be so modified, it
     shall be considered deleted from this Mortgage. Unless otherwise required
     by law, the illegality, invalidity, or unenforceability of any provision of
     this Mortgage shall not affect the legality, validity or enforceability of
     any other provision of this Mortgage.

     Merger. There shall be no merger of the interest or estate created by this
     Mortgage with any other interest or estate in the Property at any time held
     by or for the benefit of Lender in any capacity, without the written
     consent of Lender.

     Successors and Assigns. Subject to any limitations stated in this Mortgage
     on transfer of Grantor's interest, this Mortgage shall be binding upon and
     inure to the benefit of the parties, their successors and assigns. If
     ownership of the Property becomes vested in a person other than Grantor,
     Lender, without notice to Grantor, may deal with Grantor's successors with
     reference to this Mortgage and the Indebtedness by way of forbearance or
     extension without releasing Grantor from the obligations of this Mortgage
     or liability under the Indebtedness.

     Time is of the Essence. Time is of the essence in the performance of this
     Mortgage.

DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Mortgage. Unless specifically stated to the contrary,
all references to dollar amounts shall mean amounts in lawful money of the
United States of America. Words and terms used in the singular shall include the
plural, and the plural shall include the singular, as the context may require.
Words and terms not otherwise defined in this Mortgage shall have the meanings
attributed to such terms in the Uniform Commercial Code:

     Borrower. The word "Borrower" means BRAINERD INTERNATIONAL RACEWAY &
     RESORT, INC.
     FKA: THE COLONEL'S BRAINERD INTERNATIONAL RACEWAY, INC,
     FKA: BRAINERD INTERNATIONAL RACEWAY, INC.
     FKA: BRAINERD INTERNATIONAL, INC., and all other persons and entities
     signing the Note in whatever capacity.

     Default. The word "Default" means the Default set forth in this Mortgage in
     the section titled "Default".

     Environmental Laws. The words "Environmental Laws" mean any and all state,
     federal and local statutes, regulations and ordinances relating to the
     protection of human health or the environment, including without limitation
     the Comprehensive Environmental Response, Compensation, and Liability Act
     of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the
     Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499
     ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section
     1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
     Section 6901, et seq., or other applicable state or federal laws, rules, or
     regulations adopted pursuant thereto or common law, and shall also include
     pollutants, contaminants, polychlorinated biphenyls, asbestos, urea
     formaldehyde, petroleum and petroleum products, and agricultural chemicals.

     Event of Default. The words "Event of Default" mean any of the events of
     default set forth in this Mortgage in the events of default section of this
     Mortgage.

     Grantor. The word "Grantor" means BRAINERD INTERNATIONAL RACEWAY &
     RESORT, INC.
     FKA: THE COLONEL'S BRAINERD INTERNATIONAL RACEWAY, INC.
     FKA: BRAINERD INTERNATIONAL RACEWAY, INC.
     FKA: BRAINERD INTERNATIONAL, INC.

     Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser,
     surety, or accommodation party to Lender, including without limitation a
     guaranty of all or part of the Note.

     Hazardous Substances. The words "Hazardous Substances" mean materials that,
     because of their quantity, concentration or physical, chemical or
     infectious characteristics, may cause or pose a present or potential hazard
     to human health or the environment when improperly used, treated, stored,
     disposed of, generated, manufactured, transported or otherwise handled. The
     words
<PAGE>

     "Hazardous Substances" are used In their very broadest sense and include
     without limitation any and all hazardous or toxic substances, materials or
     waste as defined by or listed under the Environmental Laws. The term
     "Hazardous Substances" also includes, without limitation, petroleum and
     petroleum by-products or any fraction thereof and asbestos.

     Improvements. The word "Improvements" means all existing and future
     improvements, buildings, structures, mobile homes affixed on the Real
     Property, facilities, additions, replacements and other construction on the
     Real Property.

     Indebtedness. The word "Indebtedness" means all principal, interest, and
     other amounts, costs and expenses payable under the Note or Related
     Documents, together with all renewals of, extensions of, modifications of,
     consolidations of and substitutions for the Note or Related Documents and
     any amounts expended or advanced by Lender to discharge Grantor's
     obligations or expenses incurred by Lender to enforce Grantor's obligations
     under this Mortgage, together with interest on such amounts as provided in
     this Mortgage.

     Lender. The word "Lender" means First National Bank of Deerwood, Its
     successors and assigns.

     Mortgage. The word "Mortgage" means this Mortgage between Grantor and
     Lender.

     Note. The word "Note" means the promissory note dated February 14, 2003, in
     the original principal amount of $500,000.00 from Grantor to Lender,
     together with all renewals of, extensions of, modifications of,
     refinancings of, consolidations of, and substitutions for the promissory
     note or agreement. The maturity date of the Note is October 15, 2003.

     Personal Property. The words "Personal Property" mean all equipment,
     fixtures, and other articles of personal property now or hereafter owned by
     Grantor, and now or hereafter attached or affixed to the Real Property;
     together with all accessions, parts, and additions to, all replacements of,
     and all substitutions for, any of such property; and together with all
     proceeds (including without limitation all insurance proceeds and refunds
     of premiums) from any sale or other disposition of the Property.

     Property. The word "Property" means collectively the Real Property and the
     Personal Property.

     Real Property. The words "Real Property" mean the real property, interests
     and rights, as further described in this Mortgage.

     Related Documents. The words "Related Documents" mean all promissory notes,
     credit agreements, loan agreements, environmental agreements, guaranties,
     security agreements, mortgages, deeds of trust, security deeds, collateral
     mortgages, and all other instruments, agreements and documents, whether now
     or hereafter existing, executed in connection with the Indebtedness.

     Rents. The word "Rents" means all present and future rents, revenues,
     income, issues, royalties, profits, and other benefits derived from the
     Property.

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND
GRANTOR AGREES TO ITS TERMS.

GRANTOR:

BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.
FKA: THE COLONEL'S BRAINERD INTERNATIONAL RACEWAY, INC;
FKA: BRAINERD INTERNATIONAL RACEWAY, INC,
FKA: BRAINERD INTERNATIONAL, INC.

By:_____________________________________________________
     BILL SINGLETERRY, President of BRAINERD INTERNATIONAL RACEWAY & RESORT,
     INC.
     FKA: THE COLONEL'S BRAINERD INTERNATIONAL RACEWAY, INC. FKA:
     BRAINERD INTERNATIONAL RACEWAY, INC.
     FKA: BRAINERD INTERNATIONAL, INC.

 This Mortgage was drafted by:
                                            NICHOLE FRANZMEIER. LOAN PROCESSOR
                                            First National Bank. of Deerwood
                                            PO Box 527
                                            Brainerd, MN 56401-0527

<PAGE>
                                         CORPORATE ACKNOWLEDGMENT

STATE OF__________________________                               )
                                                                 )

COUNTY OF________________________                                )

On this _____________________day of ______________________, 20 _____ , before
me, the undersigned Notary Public, personally appeared BILL SINGLETERRY,
President of BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.

FKA: THE  COLONEL'S BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL, INC., and known to me to be an authorized agent of
the corporation that executed the Mortgage and acknowledged the Mortgage to be
the free and voluntary act and deed of the corporation, by authority of its
Bylaws or by resolution of its board of directors, for the uses and purposes
therein mentioned, and on oath stated that he or she is authorized to execute
this Mortgage and in fact executed the Mortgage on behalf of the corporation.

By _______________________________________    Residing at ______________________

Notary Public in and for the State of ____    My commission expires ____________

<PAGE>

LEGAL DESCRIPTION:

Parcel 1: The W1/2 of the SW 1/4 Sec. 13, Twp. 134, Rge. 29, except the South
650 feet thereof and except the part thereof described as follows: Beginning at
the point on the West line of said Section 13 which is 650 feet North of the
Southwest corner of said Section 13; thence North 0 degrees 02 minutes East
788.3 feet to the point 1200 feet South of the Northwest corner of said W1/2 of
SW1/4; thence North 89 degrees 57 minutes 30 seconds East 470 feet parallel with
the South line of said W1/2 of SW1/4; thence South 19 degrees 47 minutes 50
seconds East 291 feet; thence South 69 degrees 55 minutes 30 seconds East 383.5
feet; thence South 0 degrees 02 minutes West 382.26 feet to the North line of
the South 650 feet of said W1/2 of SW1/4; thence South 89 degrees 57 minutes 30
seconds West 929.63 feet along said North line to the place of beginning.

Parcel 2: N1/2NE1/4, Sec. 24, Twp. 134, Rge, 29.

Parcel 3: The W1/2SE1/4, the SE1/4SE1/4, and All of Govt. Lot 1, all in Sec. 13,
Twp. 134 North, Rge. 29 West, except that part of said Govt. Lot 1 platted as
"Ellandale"; and except that part of said Govt. Lot 1 described as follows:
Beginning at the point on the East line of said Section 13 which is 2201.3 feet
North of the Southeast corner of said Section 13, said point being in the
Northwesterly line of Lot 10, "Ellandale" to the Northwest corner of Hilltop
Road in said plat; thence North 30 degrees 45 minutes West 260 feet; thence
North 41 degrees 17 minutes 30 seconds West 660.07 feet more or less to the
North line of said Govt. Lot 1; thence North 89 degrees 45 minutes 30 seconds
East along the North line of said Lot 1 to the shore of Long Lake; thence
Southeasterly along said shore to the East line of said Section 13, thence South
along the East line of Section 13 to the place, of beginning.

Parcel 4: Govt. Lot 6, Sec. 13, Twp. 134, Rge. 29.

Parcel 5: NE1/4SW1/4, Sec. 13, Twp. 134, Rge. 29, and the SW1/4NW1/4, Sec. 13,
Twp. 134, Rge. 29, except the Westerly 300 feet of the Northerly 770 feet
thereof, and that part of the; SE1/4NW1/4 and the SW1/4NE1/4, Sec. 13, Twp. 134,
Rge. 29, lying Southwesterly of the following described line: Beginning at the
point on the South line of said SW1/4NE1/4 which is 3570.41 feet North 89
degrees 45 minutes 30 seconds East of the West quarter corner of said Section
13; thence North 41 degrees 11 minutes West 502.18 feet; thence South 83 degrees
55 minutes 40 seconds West 429.47 feet; thence North 63 degrees 49 minutes 30
seconds West 840.0 feet; thence North 18 degrees 3 minutes West 650.0 feet to
the North line of said SE1/4NW1/4 and there ending.

Parcel 6: That part of the NW1/4SW1/4, Sec. 13, Twp. 134, Rge. 29, described as
follows: Beginning at the point on the West line of said West half of the
Southwest Quarter, said Section 13, which is 1362.15 feet North 0 degrees 02
minutes East, assumed bearing, front the Southwest corner of said West half of
the Southwest Quarter; thence North 0 degrees 02 minutes East 76.15 feet along
said West line to the point which is 1200.00 feet South 0 degrees 02 minutes
West from the northwest corner of said West half of the Southwest Quarter;
thence North 89 degrees 57 minutes 30 seconds East 470.00 feet parallel with the
South line of said West half of the Southwest Quarter; thence South 19 degrees
47 minutes 50 seconds East 23.41 feet; thence South 83 degrees 30 minutes West
481.11 feet to the point of beginning, according to the U.S. Government Survey
thereof on file and of record in the office of the County Recorder for said
County and State.
AND
The West 362.00 feet of the North 870.00 feet of the Northwest Quarter of the
Southwest Quarter and the West 362.00 feet of the Southwest Quarter of the
Northwest Quarter, Section 13, Township 134 North, Range 29 West, Crow Wing
County, Minnesota. Subject to the right-of-way for Minnesota Trunk Highway No.
371 Subject to the right-of-way for Birchdale Road. Subject to easements
reservations and restrictions of record, if any.

<PAGE>

AND
That part of Government Lot 4, Section 13, Township 134 North, Range 29 West,
Crow Wing County, Minnesota described as follows: Beginning at the southwest
corner of said Government Lot 4; thence South 89 degrees 29 minutes 12 seconds
East, assumed bearing, 900.00 feet along the south line of said Government Lot
4; thence North 00 degrees 15 minutes 53 seconds East, parallel with the west
line of said Government Lot 4, 440.00 feet; thence North 89 degrees 29 minutes
12 seconds West 478.50 feet; thence South 03 degrees 14 minutes 32 seconds West
140.16 feet; thence North 89 degrees 29 minutes 12 seconds West to the west line
of said Government Lot 4; thence South 00 degrees 15 minutes 53 seconds West
along said west line of Government Lot 4 to the point of beginning, except that
part that lies westerly of the easterly right-of-way line of Birchdale Road.
Subject to the easements, reservations and restrictions of record, if any.
AND
That part of the Northwest Quarter of the Southwest Quarter and that part of
Government Lot 5, all in Section 13,Township 134 North, Range 29 West, Crow Wing
County, Minnesota, described as follows: Commencing at the Northwest corner of
said Northwest Quarter of the Southwest Quarter; thence South 00 degrees 02
minutes 00 seconds West, assumed bearing along the West line of said Northwest
Quarter of the Southwest Quarter 1200.00 feet; thence North 89 degrees 57
minutes 30 seconds East 470.00 feet; parallel with the South line of the West
Half of said South west Quarter; thence South 19 degrees 47 minutes, 50 seconds
East 23.41 feet to the point of beginning of the tract to be herein described;
thence south 19 degrees 47 minutes 50 seconds East 267.59 feet; thence South 69
degrees 55 minutes 30 seconds East 312.33 feet; thence North 20 degrees 04
minutes 30 seconds East 152.38 feet; thence North 69 degrees 55 minutes 30
seconds West 348.65 feet; thence North 00 degrees 17 minutes 07 seconds West
3151.54 feet; thence south 83 degrees 27 minutes 31 seconds West 236.64 feet;
thence North 19 degrees 33 minutes 30 seconds West 25.58 feet; thence North 89
degrees 33 minutes 34 seconds West 341.39 feet, more or less to the West line of
said Section 13; thence South 00 degrees 02 minutes 00 seconds West along said
West line 277.93 feet, more or less to a point North 00 degrees 02 minutes 00
seconds East as measured along said West line 1362.15 feet from the Southwest
corner of said Section; thence North 83 degrees 27 minutes 31 seconds East
481.11 feet, more or less to the point of beginning. Subject to the right-of way
of Minnesota State Highway Number 371 along the West line thereof. Also subject
to easements, restrictions, and reservations of record, if any.

<PAGE>

                         AGREEMENT TO PROVIDE INSURANCE

Grantor: BRAINERD INTERNATIONAL          Lender: First National Bank of Deerwood
         RACEWAY & RESORT, INC.                  Brainerd Branch
         FKA: THE COLONEL'S BRAINERD             PO Box 527
         INTERNATIONAL RACEWAY, INC.             724 W Washington St
         FKA: BRAINERD INTERNATIONAL             Brainerd, MN 56401-0527
              RACEWAY, INC.                      (218) 828-2111
              FKA: BRAINERD
              INTERNATIONAL, INC.
              5523 BIRCHDALE RD
              BRAINERD, MN 56401

INSURANCE REQUIREMENTS. Grantor, BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.
FKA: THE COLONEL'S BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL, INC. ("Grantor"), understands that insurance
coverage is required in connection with the extending of a loan or the providing
of other financial accommodations to Grantor by Lender. These requirements are
set forth in the security documents for the loan. The following minimum
insurance coverages must be provided on the following described collateral (the
"Collateral"):

     Collateral:  5523 BIRCHDALE RD, BRAINERD, MN 56401
                  Type: Fire and extended coverage.
                  Amount: Full Insurable Value.
                  Basis: Replacement value.
                  Endorsements: Standard mortgagee's clause with stipulation
                  that coverage will not be cancelled or diminished without a
                  minimum of 30 days prior written notice to Lender, and without
                  disclaimer of the insurer's liability for failure to give such
                  notice.
                  Latest Delivery Date: By the loan closing date.

INSURANCE COMPANY. Grantor may obtain insurance from any insurance company
Grantor may choose that is reasonably acceptable to Lender. Grantor understands
that credit may not be denied solely because insurance was not purchased through
Lender.

FLOOD INSURANCE. Flood insurance for the Collateral securing this loan is
described as follows:

     Real Estate at 5523 BIRCHDALE RD, BRAINERD, MN 56401.
     Should the Collateral at any time be deemed to be located in an area
     designated by the Director of the Federal Emergency Management Agency as a
     special flood hazard area, Grantor agrees to obtain and maintain Federal
     Flood Insurance, if available, within 45 days after notice is given by
     Lender that the Collateral is located in a special flood hazard area, for
     the full unpaid balance of the loan and any prior liens on the property
     securing the loan, up to the maximum policy limits set under the National
     Flood Insurance Program, or as otherwise required by Lender, and
     to-maintain such insurance for the term of the loan. Flood Insurance may be
     purchased under the National Flood Insurance Program or from private
     insurers.

FAILURE TO PROVIDE INSURANCE. Grantor agrees to deliver to Lender, on the latest
delivery date stated above, evidence of the required insurance as provided
above, with an effective date of February 14, 2003, or earlier. Grantor
acknowledges and agrees that if Grantor fails to provide any required insurance
or fails to continue such insurance in force, Lender may do so at Grantor's
expense as provided in the applicable security document. The cost of any such
insurance, at the option of Lender, shall be added to the Indebtedness as
provided in the security document. GRANTOR ACKNOWLEDGES THAT IF LENDER SO
PURCHASES ANY SUCH INSURANCE, THE INSURANCE WILL PROVIDE LIMITED PROTECTION
AGAINST PHYSICAL DAMAGE TO THE COLLATERAL, UP TO AN AMOUNT EQUAL TO THE LESSER
OF (1) THE UNPAID BALANCE OF THE DEBT, EXCLUDING ANY UNEARNED FINANCE CHARGES,
OR (2) THE VALUE OF THE COLLATERAL; HOWEVER, GRANTOR'S EQUITY IN THE COLLATERAL
MAY NOT BE INSURED. IN ADDITION, THE INSURANCE MAY NOT PROVIDE ANY PUBLIC
LIABILITY OR PROPERTY DAMAGE INDEMNIFICATION AND MAY NOT MEET THE REQUIREMENTS
OF ANY FINANCIAL RESPONSIBILITY LAWS.

AUTHORIZATION. For purposes of insurance coverage on the Collateral, Grantor
authorizes Lender to provide to any person (including any insurance agent or
company) all information Lender deems appropriate, whether regarding the
Collateral, the loan or other financial accommodations, or both.

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO PROVIDE
INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED FEBRUARY 14, 2003.

<PAGE>

GRANTOR:

BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.
FKA: THE COLONEL'S BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL RACEWAY, INC.
FKA: BRAINERD INTERNATIONAL, INC.

  By: _____________________________________________
      BILL SINGLETERRY, President of BRAINERD
      INTERNATIONAL RACEWAY & RESORT, INC.
      FKA: THE COLONEL'S BRAINERD INTERNATIONAL
      RACEWAY, INC.
      FKA: BRAINERD INTERNATIONAL RACEWAY, INC.
      FKA: BRAINERD INTERNATIONAL, INC.

                               For Lender Use Only
                             Insurance Verification

Date: ___________________________                    Phone: ____________________
Agent's Name: ____________________
Agency: _________________________
Insurance Company:  _______________
Policy Number: ____________________
Effective Date:  ____________________
Comments:  _________________________________________________________________

<PAGE>

                     DISBURSEMENT REQUEST AND AUTHORIZATION

 Borrower:  BRAINERD INTERNATIONAL       Lender: First National Bank of Deerwood
            RACEWAY & RESORT, INC.               Brainerd Branch
                                                 PO Box 527
            5523 BIRCHDALE RD                    724 W Washington St
            BRAINERD, MN 56401                   Brainerd, MN 56401-0527
                                                 (218) 828-2111

LOAN TYPE. This is a Fixed Rate (7.500%) Nondisclosable Loan to a Corporation
for $500,000.00 due on October 15, 2003.

PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for:

               Maintenance of Borrower's Primary Residence.

               Personal, Family or Household Purposes or Personal
               Investment.

               Agricultural Purposes.

         X     Business Purposes.

SPECIFIC PURPOSE. The specific purpose of this loan is: BUSINESS EXPENSE.

DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will be
disbursed until all of Lender's conditions for making the loan have been
satisfied. Please disburse the loan proceeds of $500,000.00 as follows:

<TABLE>
<S>                                                                                   <C>
                        Amount paid to Borrower directly:                             $498,155.00

                           $498,155.00 Deposited to Checking Account # 30882

                        Other Disbursements:                                            $1,845.00

                           $1,845.00 CLOSING FEES

                        Note Principal:                                               $500,000.00
</TABLE>

CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed the
following charges:

<TABLE>
<S>                                                                                       <C>
                        Prepaid Finance Charges Paid in Cash:                             $500.00
                           $500.00 Documentation Fee
                        Other Charges Paid ) in Cash:                                   $1,345.00
                           $20.00 Recording Fees
                           $25.00 Food Determination Fee
                           $150.00 O & E REPORT TO CROW WING COUNTY ABSTRACT
                           $1,150.00 MORTGAGE TAX
                        Total Charges Paid in Cash:                                     $1,845.00
</TABLE>

NOTICE OF RIGHT TO DISCONTINUE ESCROW. If Borrower's mortgage loan involves an
escrow account for taxes and homeowner's insurance, Borrower may have the right
in five years to discontinue the account and pay Borrower's own taxes and
homeowner's insurance. If Borrower is eligible to discontinue the escrow
account, Borrower will be notified in five years.

FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE 1N BORROWER'S FINANCIAL CONDITION
AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS
AUTHORIZATION IS DATED FEBRUARY 14, 2003.

BORROWER:

BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.

By:_________________________________
     BILL SINGLETERRY, President of BRAINERD
     INTERNATIONAL RACEWAY & RESORT, INC.

<PAGE>

                         AGREEMENT TO PROVIDE INSURANCE

 Grantor:  BRAINERD INTERNATIONAL        Lender: First National Bank of Deerwood
           RACEWAY & RESORT, INC.                Brainerd Branch
                                                 PO Box 527
           5523 BIRCHDALE RD                     724 W Washington St
           BRAINERD, MN 56401                    Brainerd, MN 56401-0527
                                                 (218) 828-2111

INSURANCE REQUIREMENTS. Grantor, BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.
("Grantor"), understands that insurance coverage is required in connection with
the extending of a loan or the providing of other financial accommodations to
Grantor by Lender. These requirements are set forth in the security documents
for the loan. The following minimum insurance coverages must be provided on the
following described collateral (the "Collateral"):

     Collateral: All Equipment.
                 Type: All risks, including fire, theft and liability.
                 Amount: Full Insurable Value.
                 Basis: Replacement value.
                 Endorsements: Lender loss payable clause with stipulation that
                 coverage will not be cancelled or diminished without a minimum
                 of 30 days prior written notice to Lender.
                 Latest Delivery Date: By the loan closing date.

INSURANCE COMPANY. Grantor may obtain insurance from any insurance company
Grantor may choose that is reasonably acceptable to Lender. Grantor understands
that credit may not be denied solely because insurance was not purchased through
Lender.

FAILURE TO PROVIDE INSURANCE. Grantor agrees to deliver to Lender, on the latest
delivery date stated above, proof of the required insurance as provided above,
with an effective date of February 14, 2003, or earlier. Grantor acknowledges
and agrees that if Grantor fails to provide any required insurance or fails to
continue such insurance in force, Lender may do so at Grantor's expense as
provided in the applicable security document. The cost of any such insurance, at
the option of Lender, shall be added to the indebtedness as provided in the
security document. GRANTOR ACKNOWLEDGES THAT IF LENDER SO PURCHASES ANY SUCH
INSURANCE, THE INSURANCE WILL PROVIDE LIMITED PROTECTION AGAINST PHYSICAL DAMAGE
TO THE COLLATERAL, UP TO AN AMOUNT EQUAL TO THE LESSER OF (1) THE UNPAID BALANCE
OF THE DEBT, EXCLUDING ANY UNEARNED FINANCE CHARGES, OR (2) THE VALUE OF THE
COLLATERAL; HOWEVER, GRANTOR'S EQUITY IN THE COLLATERAL MAY NOT BE INSURED. IN
ADDITION, THE INSURANCE MAY NOT PROVIDE ANY PUBLIC LIABILITY OR PROPERTY DAMAGE
INDEMNIFICATION AND MAY NOT MEET THE REQUIREMENTS OF ANY FINANCIAL
RESPONSIBILITY LAWS.

AUTHORIZATION. For purposes of insurance coverage on the Collateral, Grantor
authorizes Lender to provide to any person (including any insurance agent or
company) all information Lender deems appropriate, whether regarding the
Collateral, the loan or other financial accommodations, or both.

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO PROVIDE
INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED FEBRUARY 14, 2003.

GRANTOR:

BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.

By: ____________________________________________
    BILL SINGLETERRY, President of BRAINERD
    INTERNATIONAL RACEWAY & RESORT, INC.

                               For Lender Use Only
                             Insurance Verification

Date: ___________________________                    Phone: ____________________
Agent's Name: ____________________
Agency: _________________________
Insurance Company:  _______________
Policy Number: ____________________
Effective Date:  ____________________
Comments:  _________________________________________________________________

<PAGE>

                          COMMERCIAL SECURITY AGREEMENT

Grantor: BRAINERD INTERNATIONAL          Lender: First National Bank of Deerwood
         RACEWAY & RESORT, INC.                  Brainerd Branch
                                                 PO Box 527
         5523 BIRCHDALE RD                       724 W Washington St
         BRAINERD, MN 56401                      Brainerd, MN 56401-0527
                                                 (218) 828-2111

     UCC FINANCING STATEMENT
     FOLLOW INSTRUCTIONS (front and back) CAREFULLY
     A. NAME & PHONE OF CONTACT AT FILER (optional) NICHOLE FRANZMEIER @828-2111
     B. SEND ACKNOWLEDGEMENT TO: (Name and Address)

                 First National Bank of Deerwood
                 P.O. Box 520
                 Deerwood, MN 56444-0520

                                   THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY

<TABLE>
<S><C>
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (1 a or 1 b) . do not abbreviate or combine names
   1a. ORGANIZATION'S NAME
  -BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.
   OR 1 b.  INDIVIDUAL'S LAST NAME                    FIRST NAME                MIDDLE NAME             SUFFIX
   1c. MAILING ADDRESS                       CITY                 STATE                         POSTAL CODE        COUNTRY
       5523 BIRCHDALE RD                     BRAINERD             MN                              56407              USA
       1 d. TAX ID #. SSN OR EIN  ADUL INFORE I1 TYPE OF ORGANIZATION  1f. JURISDICTION OF ORGANIZATION  ORGANIZATIONAL ID #, if any
                                  ORGANIZATION
                                  DEBTOR          Corporation                           MN                         NONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (2a or 2b) - do not abbreviate or combine names
     2a ORGANIZATION'S NAME

     OR 2b. INDIVIDUAL'S LAST NAME         FIRST NAME                      MIDDLE NAME                             SUFFIX

     2c. MAILING ADDRESS          CITY                     STATE                       POSTAL CODE           COUNTRY

     2d. TAX ID #: SSN OR EIN   ADD'L INFO RE       2e. TYPE OF ORGANIZATION        JURISDICTION OF ORGANIZATION        2g.
                                ORGANIZATION
                                DEBTOR                                                          NONE
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P)- insert only one secured party name (3a or 3b)
         3a. ORGANIZATION'S NAME
         First National Bank of Deerwood

   OR 3b. INDIVIDUAL'S LAST NAME           FIRST NAME                                MIDDLE NAME    SUFFIX

   3c. MAILING ADDRESS                  CITY                       STATE              POSTAL CODE            COUNTRY
     PO Box 527, 724 W Washington St    Brainerd                   MN                 56401-0527

     4. This FINANCING STATEMENT covers the following collateral:

      All Equipment: whether any of the foregoing is owned now or acquired later; all accessions, additions,
      replacements, and substitutions relating to any of the foregoing; all records of any kind relating to any of
      the foregoing; all proceeds relating to any of the foregoing (including insurance, general intangibles and
      accounts proceeds)

5. ALTERNATIVE DESIGNATION (if applicable):  LESSEE/LESSOR   CONSIGNEE/CONSIGNOR BAILEE/BAILOR SELLER/BUYER  AG. LIEN NON-UCC FILING
</TABLE>

<PAGE>

6. This FINANCING STATEMENT Is to be filed (for record) (or recorded) in the
REAL

7. Check to REQUEST SEARCH REPORT(S) on Debtor(s) All Debtors Debtor 1 Debtor 2

8. OPTIONAL FILER REFERENCE DATA

filed against the Collateral.

Inspection of Collateral. Lender and Lender's designated representatives and
agents shall have the right at all reasonable times to examine and inspect the
Collateral wherever located.

Taxes, Assessments and Liens. Grantor will pay when due all taxes, assessments
and liens upon the Collateral, its use or operation, upon this Agreement, upon
any promissory note or notes evidencing the Indebtedness, or upon any of the
other Related Documents. Grantor may withhold any such payment or may elect to
contest any lien if Grantor is in good faith conducting an appropriate
proceeding to contest the obligation to pay and so long as Lender's interest in
the Collateral is not jeopardized in Lender's sole opinion. If the Collateral is
subjected to a lien which is not discharged within fifteen (15) days, Grantor
shall deposit with Lender cash, a sufficient corporate surety bond or other
security satisfactory to Lender in an amount adequate to provide for the
discharge of the lien plus any interest, costs, reasonable attorneys' fees or
other charges that could accrue as a result of foreclosure or sale of the
Collateral. In any contest Grantor shall defend itself and Lender and shall
satisfy any final adverse judgment before enforcement against the Collateral.
Grantor shall name Lender as an additional obligee under any surety bond
furnished In the contest proceedings. Grantor further agrees to furnish Lender
with evidence that such taxes, assessments, and governmental and other charges
have been paid in full and in a timely manner. Grantor may withhold any such
payment or may elect to contest any lien if Grantor is in good faith conducting
an appropriate proceeding to contest the obligation to pay and so long as
Lender's interest in the Collateral is not jeopardized.

Compliance with Governmental Requirements. Grantor shall comply promptly with
all laws, ordinances, rules and regulations of all governmental authorities, now
or hereafter in effect, applicable to the ownership, production, disposition, or
use of the Collateral, including all laws or regulations relating to the undue
erosion of highly-erodible land or-relating to the conversion of wetlands for
the production of an agricultural product or commodity. Grantor may contest in
good faith any such law, ordinance or regulation and withhold compliance during
any proceeding, including appropriate appeals, so long as Lender's interest in
the Collateral, in Lender's opinion, is not jeopardized.

Hazardous Substances. Grantor represents and warrants that the Collateral never
has been, and never will be so long as this Agreement remains a lien on the
Collateral, used in violation of any Environmental Laws or for the generation,
manufacture, storage, transportation, treatment, disposal, release or threatened
release of any Hazardous Substance. The representations and warranties contained
herein are based on Grantor's due diligence in investigating the Collateral for
Hazardous Substances. Grantor hereby (1) releases and waives any future claims
against Lender for indemnity or contribution in the event Grantor becomes.
liable for cleanup or other costs under any Environmental Laws, and (2) agrees
to indemnify and hold harmless Lender against any end all claims and losses
resulting from a breach of this provision of this Agreement. This obligation to
indemnify shall survive the payment of the Indebtedness and the satisfaction of
this Agreement.

Maintenance of Casualty Insurance. Grantor shall procure and maintain all risks
Insurance, including without limitation fire, theft and liability coverage
together with such other insurance as Lender may require with respect to the
Collateral, in form, amounts, coverages and basis reasonably acceptable to
Lender and issued by a company or companies reasonably acceptable to Lender.
Grantor, upon request of Lender, will deliver to Lender from time to time the
policies or certificates of insurance in form satisfactory to Lender including
stipulations that coverages will not be cancelled or diminished without at least
thirty (30), days prior written notice to Lender and not including any
disclaimer of the insurer's liability for failure to give such a notice. Each
insurance policy also shall include an endorsement providing that coverage in
favor of Lender will not be impaired in any way by any act, omission or default
of Grantor or any other person. In connection with all policies covering assets
in which Lender holds or is offered a security interest, Grantor will provide
Lender with such loss payable or other endorsements as Lender may require. If
Grantor at any time fails to obtain or maintain any insurance as required under
this Agreement, Lender may (but shall not be obligated to) obtain such insurance
as Lender deems appropriate, including if Lender so chooses "single interest
insurance," which will cover only Lender's interest in the Collateral.

Application of Insurance Proceeds. Grantor shall promptly notify Lender of any
loss or damage to the Collateral. Lender may make proof of loss if Grantor fails
to do so within fifteen (15) days of the casualty. Ail proceeds of any insurance
on the Collateral, including accrued proceeds thereon, shall be held by Lender
as part of the Collateral. If Lender consents to repair or replacement of the
damaged or destroyed Collateral, Lender shall, upon satisfactory proof of
expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost
of repair or restoration. If Lender does not consent to repair or replacement of
the Collateral, Lender shall retain a sufficient amount of the proceeds to pay
all of the Indebtedness, and shall pay the balance to Grantor. Any proceeds
which have not been disbursed within six (6) months after their receipt and
which Grantor has not committed to the repair or restoration of the Collateral
shall be used to prepay the Indebtedness.

Insurance Reserves. Lender may require Grantor to maintain with Lender reserves
for payment of insurance premiums, which reserves shall be created by monthly
payments from Grantor of a sum estimated by Lender to be sufficient to produce,
at least fifteen (15) days before the premium due date, amounts at least equal
to the insurance premiums to be paid. If fifteen (15) days before payment is
due, the reserve funds are insufficient, Grantor shall upon demand pay any
deficiency to Lender. The reserve funds shall be held by Lender as a general
deposit and shall constitute a non-interest-bearing account, which Lender may
satisfy by payment of the insurance premiums required to be paid by Grantor as
they become due. Lender does not hold the reserve funds in trust for Grantor,
and Lender is not the agent of Grantor for payment of the insurance premiums
required to be paid by Grantor. The responsibility for the payment of premiums
shall remain Grantor's sole responsibility.

Insurance Reports. Grantor, upon request of Lender, shall furnish to Lender
reports on each existing policy of insurance showing such information as Lender
may reasonably request including the following: (1) the name of the insurer; (2)
the risks insured;

<PAGE>

(3) the amount of the policy; (4) the property insured; (b) the then current
value on the basis of which insurance has been obtained and the manner of
determining that value; and (6) the expiration date of the policy. In addition,
Grantor shall upon request by Lender (however not more often than annually) have
an independent appraiser satisfactory to Lender determine, as applicable, the
cash value or replacement cost of the Collateral.

Financing Statements. Grantor authorizes Lender to file a UCC-1 financing
statement, or alternatively, a copy of this Agreement to perfect Lender's
security Interest. At Lender's request, Grantor additionally agrees to sign all
other documents that are necessary to perfect, protect, and continue Lender's
security interest in the Property. Grantor will pay all filing fees, title
transfer fees, and other fees and costs involved unless prohibited by law or
unless Lender is required by law to pay such fees and costs. Grantor irrevocably
appoints Lender to execute financing statements and documents of title in
Grantor's name and to execute all documents necessary to transfer title if there
is a default. Lender may file a copy of this Agreement as a financing statement.
If Grantor changes Grantor's name or address, or the name or address of any
person granting a security interest under this Agreement changes, Grantor will
promptly notify the Lender of such change.

GRANTOR'S RIGHT TO POSSESSION. Until default, Grantor may have possession of the
tangible personal property and beneficial use of all the Collateral and may use
it in any lawful manner not inconsistent with this Agreement or the Related
Documents, provided that Grantor's right to possession and beneficial use shall
not apply to any Collateral where possession of the Collateral by Lender is
required by law to perfect Lender's security interest in such Collateral. If
Lender at any time has possession of any Collateral, whether before or after an
Event of Default, Lender shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral if Lender takes such action for
that purpose as Grantor shall request or as Lender, In Lender's sole discretion,
shall deem appropriate under the circumstances, but failure to honor any request
by Grantor shall not of itself be deemed to be a failure to exercise reasonable
care. Lender shall not be required to take any steps necessary to preserve any
rights in the Collateral against prior parties, nor to protect, preserve or
maintain any security interest given to secure the Indebtedness.

LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Grantor fails to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Grantor's failure to discharge or pay when due any amounts
Grantor is required to discharge or pay under this Agreement or any Related
Documents, Lender on Grantor's behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on the Collateral and paying all
costs for insuring, maintaining and preserving the Collateral. All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Grantor. All such expenses will become a part
of the Indebtedness and, at Lender's option, will (A) be payable on demand (B)
be added to the balance of the Note and be apportioned among and be payable with
any installment payments to become due during either (1) the term of any
applicable insurance policy; or (2) the remaining term of the Note; or (C) be
treated as a balloon payment which will be due end payable at the Note's
maturity. The Agreement also will secure payment of these amounts. Such right
shall be in addition to all other rights and remedies to which Lender may be
entitled upon Default.

DEFAULT. Each of the following shelf constitute an Event of Default under this
Agreement:

      Payment Default. Grantor fails to make any payment when due under the
      Indebtedness.

      Other Defaults. Grantor fails to comply with or to perform any other term,
      obligation, covenant or condition contained in this Agreement or in any of
      the Related Documents or to comply with or to perform any term,
      obligation, covenant or condition contained in any other agreement between
      Lender and Grantor.

      Default in Favor of Third Parties. Should Borrower or any Grantor default
      under any loan, extension of credit, security agreement, purchase or sales
      agreement, or any other agreement, in favor of any other creditor or
      person that may materially affect any of Grantor's property or Grantor's
      or any Grantor's ability to repay the Indebtedness or perform their
      respective obligations under this Agreement or any of the Related
      Documents.

      False Statements. Any warranty, representation or statement made or
      furnished to Lender by Grantor or on Grantor's behalf under this Agreement
      or the Related Documents is false or misleading in any material respect,
      either now or at the time made or furnished or becomes false or misleading
      at any time thereafter.

      Defective Collateralization. This Agreement or any of the Related
      Documents ceases to be in full force and effect (including failure of any
      collateral document to create a valid and perfected security interest or
      lien) at any time and for any reason.

      Insolvency. The dissolution or termination of Grantor's existence as a
      going business, the insolvency of Grantor, the appointment of a receiver
      for any part of Grantor's property, any assignment for the benefit of
      creditors, any type of creditor workout, or the commencement of any
      proceeding under any bankruptcy or insolvency laws by or against Grantor.

      Creditor or Forfeiture Proceedings. Commencement of foreclosure or
      forfeiture proceedings, whether by judicial proceeding, self-help,
      repossession or any other method, by any creditor of Grantor or by any
      governmental agency against any collateral securing the Indebtedness. This
      includes a garnishment of any of Grantor's accounts, including deposit
      accounts, with Lender. However, this Event of Default shall not apply if
      there is a good faith dispute by Grantor as to the validity or
      reasonableness of the claim which is the basis of the creditor or
      forfeiture proceeding and if Grantor gives Lender written notice of the
      creditor or forfeiture proceeding and deposits with Lender monies or a
      surety bond for the creditor or forfeiture proceeding, in an amount
      determined by Lender, in its sole discretion, as being an adequate reserve
      or bond for the dispute.

<PAGE>

      Events Affecting Guarantor. Any of the preceding events occurs with
      respect to guarantor, endorser, surety, or accommodation party of any of
      the Indebtedness or guarantor, endorser, surety, or accommodation party
      dies or becomes incompetent or revokes or disputes the validity of, or
      liability under, any Guaranty of the Indebtedness.

      Adverse Change. A material adverse change occurs in Grantor's financial
      condition, or Lender believes the prospect of payment or performance of
      the Indebtedness is impaired.

      Insecurity. Lender in good faith believes itself insecure.

      Cure Provisions. If any default, other than a default in payment is
      curable and if Grantor has not been given a notice of a breach of the same
      provision of this Agreement within the preceding twelve (12) months, it
      may be cured (and no event of default will have occurred) if Grantor,
      after receiving written notice from Lender demanding cure of such default:
      (1) cures the default within fifteen (15) days; or (2) if the cure
      requires more than fifteen (15) days, immediately initiates steps which
      Lender deems in Lender's sole discretion to be sufficient to cure the
      default and thereafter continues and completes all reasonable and
      necessary steps sufficient to produce compliance as soon as reasonably
      practical.

RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a secured
party under the Minnesota Uniform Commercial Code. In addition and without
limitation, Lender may exercise any one or more of the following rights and
remedies:

      Accelerate indebtedness. Lender may declare the entire Indebtedness,
      including any prepayment penalty which Grantor would be required to pay,
      immediately due and payable, without notice of any kind to Grantor.

      Assemble Collateral. Lender may require Grantor to deliver to Lender all
      or any portion of the Collateral and any and all certificates of title and
      other documents relating to the Collateral. Lender may require Grantor to
      assemble the Collateral and make it available to Lender at a place to be
      designated by Lender. Lender also shall have full power to enter upon the
      property of Grantor to take possession of and remove the Collateral. If
      the Collateral contains other goods not covered by this Agreement at the
      time of repossession, Grantor agrees Lender may take such other goods,
      provided that Lender makes reasonable efforts to return them to Grantor
      after repossession.

      Sell the Collateral. Lender shall have full power to sell, lease,
      transfer, or otherwise deal with the Collateral or proceeds thereof in
      Lender's own name or that of Grantor. Lender may sell the Collateral at
      public auction or private sale. Unless the Collateral threatens to decline
      speedily in value or is of a type customarily sold on a recognized market,
      Lender will give Grantor, and other persons as required by law, reasonable
      notice of the time and place of any public sale, or the time after which
      any private sale or any other disposition of the Collateral is to be made.
      However, no notice need be provided to any person who, after Event of
      Default occurs, enters into and authenticates an agreement waiving that
      person's right to notification of sale. The requirements of reasonable
      notice shall be met if such notice is given at least ten (10) days before
      the time of the sale or disposition. All expenses relating to the
      disposition of the Collateral, including without limitation the expenses
      of retaking, holding, insuring, preparing for sale and selling the
      Collateral, shall become a part of the Indebtedness secured by this
      Agreement and shall be payable on demand, with interest at the Note rate
      from date of expenditure until repaid.

      Appoint Receiver. Lender shall have the right to have a receiver appointed
      to take possession of all or any part of the Collateral, with the power to
      protect and preserve the Collateral, to operate the Collateral preceding
      foreclosure or sale, and to collect the Rents from the Collateral and
      apply the proceeds, over and above the cost of the receivership, against
      the Indebtedness. The receiver may serve without bond if permitted by law.
      Lender's right to the appointment of a receiver shall exist whether or not
      the apparent value of the Collateral exceeds the Indebtedness by a
      substantial amount. Employment by Lender shall not disqualify a person
      from serving as a receiver.

      Collect Revenues, Apply Accounts. Lender, either itself or through a
      receiver, may collect the payments, rents, income, and revenues from the
      Collateral. Lender may at any time in Lender's discretion transfer any
      Collateral into Lender's own name or that of Lender's nominee and receive
      the payments, rents, income, and revenues therefrom and hold the same as
      security for the Indebtedness or apply it to payment of the Indebtedness
      in such order of preference as Lender may determine. Insofar as the
      Collateral consists of accounts, general intangibles, insurance policies,
      instruments, chattel paper, choices in action, or similar property, Lender
      may demand, collect, receipt for, settle, compromise, adjust, sue for,
      foreclose, or realize on the Collateral as Lender may determine, whether
      or not Indebtedness or Collateral is then due. For these purposes, Lender
      may, on behalf of and in the name of Grantor, receive, open and dispose of
      mail addressed to Grantor; change any address to which mail and payments
      are to be sent; and endorse notes, checks, drafts, money orders, documents
      of title, instruments and items pertaining to payment, shipment, or
      storage of any Collateral. To facilitate collection, Lender may notify
      account debtors and obligors on any Collateral to make payments directly
      to Lender.

      Obtain Deficiency. If Lender chooses to sell any or all of the Collateral,
      Lender may obtain a judgment against Grantor for any deficiency remaining
      on the Indebtedness due to Lender after application of all amounts
      received from the exercise of the rights provided in this Agreement.
      Grantor shall be liable for a deficiency even if the transaction described
      in this subsection is a sale of accounts or chattel paper.

      Other Rights and Remedies. Lender shall have all the rights and remedies
      of a secured creditor under the provisions of the Uniform Commercial Code,
      as may be amended from time to time. In addition, Lender shall have and
      may exercise any or all other rights and remedies it may have available at
      law, in equity, or otherwise.

      Election of Remedies. Except as may be prohibited by applicable law, all
      of Lender's rights and remedies, whether evidenced by this Agreement, the
      Related Documents, or by any other writing, shall be cumulative and may be
      exercised singularly or

<PAGE>

      concurrently. Election by Lender to pursue any remedy shall not exclude
      pursuit of any other remedy, and an election to make expenditures or to
      take action to perform an obligation of Grantor under this Agreement,
      after Grantor's failure to perform, shall not affect Lender's right to
      declare a default and exercise its remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

      Amendments. This Agreement, together with any Related Documents,
      constitutes the entire understanding and agreement of the parties as to
      the matters set forth in this Agreement. No alteration of or amendment to
      this Agreement shall be effective unless given in writing and signed by
      the party or parties sought to be charged or bound by the alteration or
      amendment.

      Attorneys' Fees: Expenses. Grantor agrees to pay upon demand all of
      Lender's costs and expenses, including Lender's reasonable attorneys' fees
      and Lender's legal expenses, incurred in connection with the enforcement
      of this Agreement. Lender may hire or pay someone else to help enforce
      this Agreement, and Grantor shall pay the costs and expenses of such
      enforcement. Costs and expenses include Lender's reasonable attorneys'
      fees and legal expenses whether or not there is a lawsuit, including
      reasonable attorneys' fees and legal expenses for bankruptcy proceedings
      (including efforts to modify or vacate any automatic stay or injunction),
      appeals, and any anticipated post-judgment collection services. Grantor
      also shall pay all court costs and such additional fees as may be directed
      by the court.

      Caption Headings. Caption headings in this Agreement are for convenience
      purposes only and are not to be used to interpret or define the provisions
      of this Agreement.

      Governing Law. This Agreement will be governed by, construed and enforced
      in accordance with federal law and the laws of the State of Minnesota.
      This Agreement has been accepted by Lender in the State of Minnesota.

      Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's
      request to submit to the jurisdiction of the courts of Crow Wing County,
      State of Minnesota.

      No Waiver by Lender. Lender shall not be deemed to have waived any rights
      under this Agreement unless such waiver is given in writing and signed by
      Lender. No delay or omission on the part of Lender in exercising any right
      shall operate as a waiver of such right or any other right. A waiver by
      Lender of a provision of this Agreement shall not prejudice's constitute a
      waiver of Lender's right otherwise to demand strict compliance with that
      provision or any other provision of this Agreement. No prior waiver by
      Lender, nor any course of dealing between Lender and Grantor, shall
      constitute a waiver of any of Lender's rights or of any of Grantor's
      obligations as to any future transactions. Whenever the consent of Lender
      is required under this Agreement, the granting of such consent by Lender
      in any instance shall not constitute continuing consent to subsequent
      instances where such consent is required and in all cases such consent may
      be granted or withheld in the sole discretion of Lender.

      Notices. Any notice required to be given under this Agreement shall be
      given in writing, and shall be effective when actually delivered, when
      actually received by telefacsimile (unless otherwise required by law),
      when deposited with a nationally recognized overnight courier, or, if
      mailed, when deposited in the United States mail, as first class,
      certified or registered mail postage prepaid, directed to the addresses
      shown near the beginning of this Agreement. Any party may change its
      address for notices under this Agreement by giving formal written notice
      to the other parties, specifying that the purpose of the notice is to
      change the party's address. For notice purposes, Grantor agrees to keep
      Lender informed at all times of Grantor's current address. Unless
      otherwise provided or required by law, If there is more than one Grantor,
      any notice given by Lender to any Grantor is deemed to be notice given to
      all Grantors.

      Power of Attorney. Grantor hereby appoints Lender as Grantor's irrevocable
      attorney-in-fact for the purpose of executing any documents necessary to
      perfect, amend, or to continue the security interest granted in this
      Agreement or to demand termination of filings of other secured parties.
      Lender may at any time, and without further authorization from Grantor,
      file a carbon, photographic or other reproduction of any financing
      statement or of this Agreement for use as a financing statement. Grantor
      will reimburse Lender for all expenses for the perfection and the
      continuation of the perfection of Lender's security interest in the
      Collateral.

      Severability. If a court of competent jurisdiction finds any provision of
      this Agreement to be illegal, invalid, or unenforceable as to any
      circumstance, that finding shall not make the offending provision illegal,
      invalid, or unenforceable as to any other circumstance. If feasible, the
      offending provision shall be considered modified so that it becomes legal,
      valid and enforceable. If the offending provision cannot be so modified,
      it shall be considered deleted from this Agreement. Unless otherwise
      required by law, the illegality, invalidity, or unenforceability of any
      provision of this Agreement shall not affect the legality, validity or
      enforceability of any other provision of this Agreement.

      Successors and Assigns. Subject to any limitations stated in this
      Agreement on transfer of Grantor's interest, this Agreement shall be
      binding upon and inure to the benefit of the parties, their successors and
      assigns. If ownership of the Collateral becomes vested in a person other
      than Grantor, Lender without notice to Grantor, may deal with Grantor's
      successors with reference to this Agreement and the Indebtedness by way of
      forbearance or extension without releasing Grantor from the obligations of
      this Agreement or liability under the Indebtedness.

      Survival of Representations and Warranties. All representations,
      warranties, and agreements made by Grantor In this Agreement shall survive
      the execution and delivery of this Agreement, shall be continuing in
      nature, and shall remain in full force and effect until such time as
      Grantor's Indebtedness shall be paid in full.

      Time is of the Essence. Time is of the essence in the performance of this
      Agreement.

<PAGE>

DEFINITIONS. The, following capitalized words and terms shall have the following
meanings when used in this Agreement. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code:

      Agreement. The word "Agreement" means this Commercial Security Agreement,
      as this Commercial Security Agreement may be amended or modified from time
      to time, together with all exhibits and schedules attached to this
      Commercial Security Agreement from time to time.

      Borrower. The word "borrower" means BRAINERD INTERNATIONAL RACEWAY &
      RESORT, INC. and all other persons and entitles signing the Note, in
      whatever capacity.

      Collateral. The word "Collateral" means all of Grantor's right, title and
      interest in and to all the Collateral as described in the Collateral
      Description section of this Agreement.

      Default. The word "Default" means the Default set forth in this Agreement
      in the section titled "Default".

      Environmental Laws. The words "Environmental Laws" mean any and all state,
      federal and local statutes, regulations and ordinances relating to the
      protection of human health or the environment, including without
      limitation the Comprehensive Environmental Response, Compensation, and
      Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.
      ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub.
      L. No.-99-499 ("SARA"), the Hazardous Materials Transportation Act, 49
      U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act;
      42 U.S.C. Section 6901, et seq., or other applicable state or federal
      laws, rules, or regulations adopted pursuant thereto or common law, and
      shall also include pollutants, contaminants, polychlorinated biphenyls,
      asbestos, urea formaldehyde, petroleum and petroleum products, and
      agricultural chemicals.

      Event of Default. The words "Event of Default" mean any of the events of
      default set forth in this Agreement in the default section of this
      Agreement.

      Grantor. The word "Grantor" means BRAINERD INTERNATIONAL RACEWAY & RESORT,
      INC.

      Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser,
      surety, or accommodation party to Lender, including without limitation a
      guaranty of all or part of the Note.

      Hazardous Substances. The words "Hazardous Substances" mean materials
      that, because of their quantity, concentration or physical, chemical or
      infectious characteristics, may cause or pose a present or potential
      hazard to human health or the environment when improperly used, treated,
      stored, disposed of, generated, manufactured, transported or otherwise
      handled. The words "Hazardous Substances" are used in their very broadest
      sense and include without limitation any and all hazardous or toxic
      substances, materials or waste as defined by or listed under the
      Environmental Laws. The term "Hazardous Substances" also includes, without
      limitation, petroleum and petroleum by-products or any fraction thereof
      and asbestos.

      Indebtedness. The word "Indebtedness" means the Indebtedness evidenced by
      the Note or Related Documents, including all principal and interest
      together with all other Indebtedness and costs and expenses for which
      Grantor is responsible under this Agreement or under any of the Related
      Documents.

      Lender. The word "Lender" means First National Bank of Deerwood, its
      successors and assigns.

      Note. The word "Note" means the Note executed by BRAINERD INTERNATIONAL
      RACEWAY & RESORT, INC. in the principal amount of $500,000.00 dated
      February 14, 2003, together with all renewals of, extensions of,
      modifications of, refinancings of, consolidations of, and substitutions
      for the note, or credit agreement.

      Property. The word "Property" means all of Grantor's right, title and
      interest in and to all the Property as described in the "Collateral
      Description" section of this Agreement.

      Related Documents. The words "Related Documents" mean all promissory
      notes, credit agreements, loan agreements, environmental agreements,
      guaranties, security agreements, mortgages, deeds of trust, security
      deeds, collateral mortgages, and all other instruments, agreements and
      documents, whether now or hereafter existing, executed in connection with
      the Indebtedness.

GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED FEBRUARY 14, 2003.

GRANTOR:

BRAINERD INTERNATIONAL RACEWAY & RESORT, INC.

By:  ____________________________________________
    BILL SINGLETERRY, President of BRAINERD
    INTERNATIONAL RACEWAY & RESORT, INC,

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