Document:

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                                                                    EXHIBIT 10.5

          MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT
                               AND FIXTURE FILING

                                     made by
                            LAKES ENTERTAINMENT, INC.
                                   (MORTGAGOR)

                                   IN FAVOR OF
                 BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT
                                   (MORTGAGEE)

                               PROPERTY LOCATION:
                          130 CHESHIRE LANE, MINNETONKA
                           HENNEPIN COUNTY, MINNESOTA

                           DATED AS OF JUNE 22, 2006

           THIS MORTGAGE WAS PREPARED BY AND WHEN RECORDED, RETURN TO:

                              Latham & Watkins LLP
                                885 Third Avenue
                            New York, New York 10022
                        Attention: Elizabeth Jaffe, Esq.
                              Ref No.: 024819-0034

                Notwithstanding anything to the contrary herein,
                enforcement of this mortgage is limited to a debt
                amount of $10,920,000 under chapter 287 of
                Minnesota Statutes.

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                                TABLE OF CONTENTS

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                                                                                                     PAGE
                                                                                                     ----
<S>                                                                                                  <C>
ARTICLE I.        DEFINITIONS..................................................................        1
     Section 1.01 Terms Defined Above..........................................................        1
     Section 1.02 Definitions..................................................................        2
     Section 1.03 Terminology; Other Defined Terms.............................................        5

ARTICLE II.       GRANT OF LIEN AND SECURITY INTEREST..........................................        5
     Section 2.01 Grant of Lien................................................................        5
     Section 2.02 Grant of Security Interest...................................................        6
     Section 2.03 No Obligation of Mortgagee...................................................        6
     Section 2.04 Fixture Filing...............................................................        6
     Section 2.05 Future Advances..............................................................        7

ARTICLE III.      ASSIGNMENT OF LEASES AND RENTS...............................................        7
     Section 3.01 Assignment...................................................................        7
     Section 3.02 Revocable License............................................................        7
     Section 3.03 Enforcement of Leases........................................................        8
     Section 3.04 Direction to Tenants.........................................................        8
     Section 3.05 Appointment of Attorney-in-Fact..............................................        9
     Section 3.06 No Liability of Mortgagee....................................................        9
     Section 3.07 Mortgagor's Indemnities......................................................       10
     Section 3.08 No Modification of Mortgagor's Obligations...................................       10

ARTICLE IV.       REPRESENTATIONS AND WARRANTIES...............................................       10
     Section 4.01 Title to Mortgaged Property and Lien of this Mortgage........................       11
     Section 4.02 Taxes and Other Payments.....................................................       11
     Section 4.03 Power to Create Lien and Security............................................       11
     Section 4.04 Loan and Loan Documents......................................................       11
     Section 4.05 Compliance with Laws.........................................................       11
     Section 4.06 No Condemnation..............................................................       12
     Section 4.07 Flood Zone...................................................................       12

ARTICLE V.        AFFIRMATIVE COVENANTS........................................................       12
     Section 5.01 Lien Status..................................................................       12
     Section 5.02 Payment of Impositions.......................................................       12
     Section 5.03 Repair.......................................................................       13
     Section 5.04 Insurance and Application of Insurance Proceeds..............................       13
     Section 5.05 Condemnation and Application of Condemnation Proceeds........................       16
     Section 5.06 Maintenance of Rights-of-Way, Easements, Licenses and Other Rights...........       17
     Section 5.07 Payment and Performance of Obligations.......................................       18
     Section 5.08 Compliance with Permitted Liens and Other Obligations........................       18
     Section 5.09 Additional Affirmative Covenants.............................................       18
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<TABLE>
<S>                                                                                                   <C>
ARTICLE VI.       NEGATIVE COVENANTS...........................................................       18
     Section 6.01 Use Violations...............................................................       18
     Section 6.02 Waste........................................................................       18
     Section 6.03 Alterations..................................................................       19
     Section 6.04 No Further Encumbrances......................................................       19
     Section 6.05 Transfer Restrictions........................................................       19
     Section 6.06 Additional Negative Covenants................................................       19

ARTICLE VII.      EVENTS OF DEFAULT AND REMEDIES...............................................       19
     Section 7.01 Event of Default.............................................................       19
     Section 7.02 Acceleration.................................................................       20
     Section 7.03 Foreclosure and Sale.........................................................       20
     Section 7.04 Mortgagee'S Agents...........................................................       21
     Section 7.05 Judicial Foreclosure.........................................................       21
     Section 7.06 Receiver.....................................................................       21
     Section 7.07 Foreclosure for Installments.................................................       21
     Section 7.08 Separate Sales...............................................................       22
     Section 7.09 Possession of Mortgaged Property.............................................       22
     Section 7.10 Occupancy After Acceleration.................................................       22
     Section 7.11 Remedies Cumulative, Concurrent and Nonexclusive.............................       23
     Section 7.12 No Release of Obligations....................................................       23
     Section 7.13 Release of and Resort to Collateral..........................................       23
     Section 7.14 Waiver of Redemption, Notice and Marshalling of Assets.......................       24
     Section 7.15 Discontinuance of Proceedings................................................       24
     Section 7.16 Application of Proceeds......................................................       24
     Section 7.17 Uniform Commercial Code Remedies.............................................       25
     Section 7.18 Indemnity....................................................................       25

ARTICLE VIII.     MISCELLANEOUS................................................................       26
     Section 8.01 Instrument Construed as Mortgage, Etc........................................       26
     Section 8.02 Performance at Mortgagor's Expense...........................................       26
     Section 8.03 Survival of Obligations......................................................       26
     Section 8.04 Further Assurances...........................................................       26
     Section 8.05 Notices......................................................................       26
     Section 8.06 No Waiver....................................................................       26
     Section 8.07 Mortgagee's Right to Perform; Mortgagee's Expenditures.......................       27
     Section 8.08 Successors and Assigns.......................................................       27
     Section 8.09 Severability.................................................................       27
     Section 8.10 Entire Agreement and Modification............................................       28
     Section 8.11 Applicable Law...............................................................       28
     Section 8.12 Satisfaction of Prior Encumbrance............................................       28
     Section 8.13 No Partnership...............................................................       28
     Section 8.14 Headings.....................................................................       28
     Section 8.15 Release of Mortgage..........................................................       28
     Section 8.16 Limitation of Obligations with Respect to Mortgaged Property.................       29
     Section 8.17 Inconsistency with Credit Agreement..........................................       29
     Section 8.18 Limitation on Interest Payable...............................................       29
</TABLE>

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<TABLE>
<S>                                                                                                   <C>
     Section 8.19 Covenants To Run With the Land...............................................       30
     Section 8.20 Last Dollar..................................................................       30
     Section 8.21 Defense of Claims............................................................       30
     Section 8.22 Exculpation Provisions.......................................................       31
     Section 8.23 No Merger of Estates.........................................................       31
     Section 8.24 Counterparts.................................................................       31
     Section 8.25 Maturity Date................................................................       31

ARTICLE IX.       STATE SPECIFIC PROVISIONS....................................................       31
     Section 9.01 Application of Rents and Proceeds............................................       31
     Section 9.02 WAIVER OF CONSTITUTIONAL RIGHTS..............................................       32
     Section 9.03 Wells and Sewer Systems......................................................       33
     Section 9.04 Future Advances..............................................................       33
</TABLE>

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          MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT
                               AND FIXTURE FILING

      THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND
FIXTURE FILING (hereinafter, together with any and all amendments, supplements,
modifications or restatements of any kind, referred to as this "Mortgage"), is
made as of June 22, 2006, by LAKES ENTERTAINMENT, INC., a Minnesota
corporation ("Mortgagor"), having its principal place of business at 130
Cheshire Lane, Suite 101, Minnetonka, Minnesota 55305, Attention: Damon E.
Schramm, Esq., in favor of BANK OF AMERICA, N.A., having its principal place of
business at 100 N. Tyron Street, Charlotte, North Carolina 28255-0001,
Attention: Douglas Jones, as Administrative Agent (in such capacity, together
with its successors and assigns, "Mortgagee"), for itself and for each of the
financial institutions and their respective successors and assigns which from
time to time shall be a "Lender" under the Credit Agreement (as hereinafter
defined).

                                    RECITALS:

      WHEREAS, Mortgagor is the owner and holder of fee simple title in and to
the Land (as hereinafter defined) described on Exhibit A attached hereto and
made a part hereof;

      WHEREAS, on the date hereof, Mortgagor, Lakes Gaming and Resorts, LLC, the
"Borrower"), and the Guarantors (as defined in the Credit Agreement), entered
into that certain Credit Agreement, dated of even date herewith (as the same may
be amended, modified or otherwise supplemented and in effect from time to time,
the "Credit Agreement"), Mortgagee, the Lenders party thereto and Banc of
America Securities LLC, as sole lead arranger and sole book manager pursuant to
which the Lenders agree to extend to the Borrowers certain term loan facilities
in the aggregate original principal amount of up to One Hundred and Five Million
and 00/100 Dollars ($105,000,000.00) (collectively, the "Loan");

      WHEREAS, Mortgagor will derive direct economic benefit from the Loan;

      WHEREAS, as a condition to Mortgagee executing the Credit Agreement,
Mortgagee is requiring that Mortgagor grant to Mortgagee a security interest in
and a first mortgage lien upon the Mortgaged Property (as hereinafter defined),
to secure (a) the payment of all of the Obligations of Mortgagor under the Loan
Documents, and (b) the performance by Mortgagor of all terms, covenants,
conditions, provisions, agreements and liabilities contained in this Mortgage,
the Credit Agreement, the Guaranty, and the other Loan Documents (as defined in
the Credit Agreement).

      NOW, THEREFORE, in order consideration for the Loan and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Mortgagor hereby covenants and agrees as follows:

                                   ARTICLE I.

                                   DEFINITIONS

            SECTION 1.01 Terms Defined Above. As used in this Mortgage,

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the terms defined in the introductory paragraph to this Mortgage and in the
Recitals set forth above shall have the meanings respectively assigned to such
terms in such paragraph and Recitals.

            SECTION 1.02 Definitions. As used herein, the following terms shall
have the following meanings:

      "Applicable UCC" means the Uniform Commercial Code as presently in effect
in the State or Commonwealth where the Mortgaged Property is located.

      "Buildings" means any and all buildings, structures, garages, utility
sheds, workrooms, air conditioning towers, open parking areas and other
improvements, and any and all additions, alterations, betterments or
appurtenances thereto, now or at any time hereafter situated, placed or
constructed upon the Land or any part thereof.

      "Default" has the meaning assigned to such term in the Credit Agreement.

      "Default Rate" has the meaning assigned to such term in the Credit
Agreement.

      "Event of Default" has the meaning assigned to such term in Section 7.01
hereof.

      "Fixtures" means all materials, supplies, equipment, apparatus and other
items of Personalty now or hereafter acquired by Mortgagor and incorporated into
the Mortgaged Property so as to constitute fixtures under the Applicable UCC or
otherwise under the laws of the state or commonwealth in which such items are
located.

      "Governmental Authority" has the meaning assigned to such term in the
Credit Agreement.

      "Governmental Requirements" means any and all present and future judicial
decisions, statutes, rulings, rules, regulations, permits, certificates or
ordinances of any Governmental Authority in any way applicable to Mortgagor or
the Mortgaged Property, including the ownership, use, occupancy, possession,
operation, maintenance, alteration, repair or reconstruction thereof.

      "Guarantors" has the meaning assigned to such term in the Credit
Agreement. "Guarantor" means any of the Guarantors.

      "Impositions" means any and all real estate and personal property taxes;
water, gas, sewer, electricity and other utility rates and charges; charges for
any easement, license or agreement maintained for the benefit of the Mortgaged
Property; and any and all other taxes, charges and assessments, whether general
or special, ordinary or extraordinary, foreseen or unforeseen, of any kind and
nature whatsoever which at any time prior to or after the execution hereof may
be assessed, levied or imposed upon the Mortgaged Property or the ownership,
use, occupancy, benefit or enjoyment thereof, together with any interest, costs
or penalties that may become payable in connection therewith.

      `"Indemnified Parties" means, with respect to any Person entitled to the
benefit of an indemnity, such Person and its officers, directors, shareholders,
partners, members, managers,

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employees, agents, representatives, attorneys, accountants and experts. The term
"Indemnified Party" means any one of such Persons.

      "Indemnitees" has the meaning assigned to such term in the Credit
Agreement.

      "Land" means the real property or interest therein described in Exhibit A
attached hereto, and all rights, titles and interests appurtenant thereto.

      "Leases" means any and all leases, master leases, subleases, licenses,
concessions or other agreements (whether written or oral, and whether now or
hereafter in effect) which grant to third Persons a possessory interest in and
to, or the right to use, all or any part of the Mortgaged Property, together
with all security and other deposits made in connection therewith and any
guarantee of the obligations of the landlord or the tenant thereunder.

      "License" has the meaning assigned to such term in Section 3.02(a) hereof.

      "Lien" has the meaning assigned to such term in the Credit Agreement.

      "Loan Documents" has the meaning assigned to such term in the Credit
Agreement.

      "Losses" means all obligations, damages, claims, causes of action, costs,
fines, fees, charges, penalties, deficiencies, losses, diminutions in value,
expenses (including court costs, fees and expenses of attorneys, accountants,
consultants and other experts) and other liabilities, and, with respect to any
indemnity, includes all attorneys' fees and expenses in connection with the
enforcement and collection of such indemnity. The term "Loss" means any such
Losses.

      "Mortgaged Property" means all of Mortgagor's right, title, interest and
estate, whether now owned or hereafter acquired, in and to the Land, the
Buildings, the Fixtures and the Personalty, together with:

      (i) all rights, privileges, tenements, hereditaments, rights-of-way,
      easements, air rights, development rights or credits, zoning rights,
      appendages and appurtenances in anywise appertaining thereto, and all
      right, title and interest of Mortgagor in and to any streets, ways,
      alleys, strips or gores of land adjoining the Land or any part thereof,
      and all right, title and interest of Mortgagor, if any, in and to all
      rights, royalties and profits with respect to all minerals, coal, oil, gas
      and other substances of any kind or character on or underlying the Land,
      together with all right, title and interest of Mortgagor in and to all
      water and water rights (whether riparian, appropriative or otherwise and
      whether or not appurtenant);

      (ii) all rights of Mortgagor (but not its obligations) under any contracts
      and agreements, including, without limitation, construction contracts and
      architectural agreements, relating to the Land, the Buildings, the
      Fixtures or the Personalty;

      (iii) all of Mortgagor's right, title and interest in and to all permits,
      licenses, franchises, certificates, authorizations, consents, approvals
      and other rights and

                                       3

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      privileges (each, a "Permit") obtained in connection with the Land, the
      Buildings, the Fixtures or the Personalty or the use or operation thereof;

      (iv) all of Mortgagor's right, title and interest in and to all plans and
      specifications, designs, schematics, drawings and other information,
      materials and matters heretofore or hereafter prepared relating to the
      Land, the Buildings, the Fixtures or the Personalty;

      (v) all of Mortgagor's right, title and interest in and to all proceeds
      arising from or by virtue of the sale, lease or other disposition of the
      Land, the Buildings, the Fixtures or the Personalty or any part thereof or
      any interest therein or from the operation thereof;

      (vi) all of Mortgagor's right, title and interest in and to all Leases now
      or hereafter in effect and all Rents, royalties, bonuses, issues, profits,
      revenues or other benefits arising from or attributable to the Land, the
      Buildings, the Fixtures or the Personalty;

      (vii) all of Mortgagor's right, title and interest in and to all
      betterments, additions, alterations, appurtenances, substitutions,
      replacements and revisions to the Land, the Buildings, the Fixtures or the
      Personalty and all reversions and remainders relating thereto;

      (viii) all of Mortgagor's right, title and interest in and to any and all
      other security and collateral of any nature whatsoever, whether now or
      hereafter given, for the repayment, performance and discharge of the
      Obligations (as hereinafter defined);

      (ix) all of Mortgagor's right, title and interest in and to all claims,
      awards, payments, remuneration, settlements or compensation now or
      hereafter made by any Governmental Authority pertaining to, and all other
      proceeds of, any taking, conversion, or like act, whether voluntary or
      involuntary, of any of the Land, the Buildings, the Fixtures, the
      Personalty or any of the property and rights described in the foregoing
      clauses (i) through (viii), including those arising from or attributable
      to any vacation of, or change of grade in, any streets affecting the Land
      or the Buildings, and all insurance and tort claims, refunds of real
      estate taxes and assessments, rent claims and other obligations
      dischargeable in cash or cash equivalents; and

      (x) all other property and rights of Mortgagor of every kind and character
      relating to and/or used or to be used in connection 'with the foregoing,
      and all proceeds and products of any of the foregoing.

As used in this Mortgage, the term "Mortgaged Property" shall be expressly
defined as meaning all or, where the context permits or requires, any portion of
the above, and all or, where the context permits or requires, any interest
therein.

      "Obligations" has the meaning assigned to such term in the Credit
Agreement.

                                       4

<PAGE>

      "Permitted Liens" has the meaning assigned to such term in the Credit
Agreement to the extent that such definition applies to the Mortgaged Property.

      "Person" has the meaning assigned to such term in the Credit Agreement.

      "Personalty" means all of Mortgagor's right, title and interest in and to
all furniture, furnishings, equipment, machinery, goods, general intangibles,
money, insurance proceeds, contract rights, option rights, inventory, together
with all refundable, returnable or reimbursable fees, deposits or other funds or
evidences of credit or indebtedness deposited by or on behalf of Mortgagor with
any Governmental Authority, boards, corporations, providers of utility services,
public or private including all refundable, returnable or reimbursable tap fees,
utility deposits, commitment fees and development costs, and all other personal
property (other than Fixtures of any kind or character), and including all such
property that is now or hereafter located or to be located upon, within or about
the Land and the Buildings, or which are or may be used in or related to the
planning, development, financing of or operation of the Mortgaged Property,
together with all accessories, replacements and substitutions thereto or
therefor and the proceeds thereof.

      "Principal Balance" has the meaning assigned to such term in Section 7.02
hereof.

      "Rents" means all of the rents, revenues, income, proceeds, issues,
profits, security and other types of deposits (after Mortgagor acquires title
thereto), and other benefits paid or payable by parties (other than Mortgagor)
for using, leasing, licensing, possessing, operating from, residing in,
benefiting from or otherwise enjoying all or any part of the Land, the
Buildings, the Fixtures and/or the Personalty.

            SECTION 1.03 Terminology; Other Defined Terms. Any capitalized term
used in this Mortgage and not otherwise defined herein shall have the meaning
assigned to such term in the Credit Agreement. The rules of construction set
forth in Section 1.02 of the Credit Agreement shall apply hereto as if
incorporated at length herein.

                                   ARTICLE II.

                       GRANT OF LIEN AND SECURITY INTEREST

            SECTION 2.01 Grant of Lien. To secure the full and timely payment,
performance and discharge of all of the Obligations, Mortgagor hereby
irrevocably GRANTS, BARGAINS, SELLS, ASSIGNS, TRANSFERS, MORTGAGES, CONVEYS AND
CONFIRMS unto Mortgagee, WITH POWER OF SALE and right of entry and possession,
for the use and benefit of Mortgagee, as Administrative Agent for the Lenders
pursuant to the Credit Agreement, all right, title, interest and estate in, to
and under the Mortgaged Property, subject, however, to the Permitted Liens; TO
HAVE AND TO HOLD the Mortgaged Property unto Mortgagee, subject to the terms and
conditions of this Mortgage, with POWER OF SALE, forever, and Mortgagor does
hereby bind itself, its successors and assigns to WARRANT AND FOREVER DEFEND the
title to the Mortgaged Property unto Mortgagee against every Person whomsoever
lawfully claiming or to claim the same or any part thereof; provided, however,
that

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<PAGE>

if Mortgagor shall pay (or cause to be paid) and perform and discharge (or cause
to be performed and discharged) all of the Obligations on or before the date on
which the same are to be paid, performed and discharged, then the Liens, estates
and rights granted by this Mortgage shall cease and terminate.

            SECTION 2.02 Grant of Security Interest. This Mortgage shall be
construed as a mortgage on the Land and the Buildings and it shall also
constitute and serve as a "security agreement" within the meaning of, and shall
constitute a first and prior security interest under, the Applicable UCC with
respect to the Personally and the Fixtures. To this end, Mortgagor by these
presents does GRANT, BARGAIN, CONVEY, ASSIGN, SELL, TRANSFER AND SET OVER unto
Mortgagee, as Administrative Agent for the Lenders pursuant to the Credit
Agreement, a security interest in all of Mortgagor's right, title and interest
in, to and under the Personalty and the Fixtures, to secure the full and timely
payment, performance and discharge of the Obligations. Mortgagor hereby consents
to Mortgagee filing and recording Financing statements (and continuations
thereof) with the appropriate filing and recording offices in order to perfect
(and maintain the perfection of) the security interests granted herein.

            SECTION 2.03 No Obligation of Mortgagee. The assignment and security
interest herein granted to Mortgagee shall not be deemed or construed to
constitute Mortgagee as a mortgagee-in-possession of the Mortgaged Property,
obligate Mortgagee to lease the Mortgaged Property or attempt to do the same, or
to take any action, incur any expense or perform or discharge any obligation,
duty or liability whatsoever.

            SECTION 2.04 Fixture Filing. Without in any manner limiting the
generality of any of the other provisions of this Mortgage: (a) some portions of
the goods described or to which reference is made herein are or are to become
fixtures on the Land described or to which reference is made herein or on
Exhibit A attached to this Mortgage; (b) this Mortgage is to be filed of record
in the real estate records as a Financing statement and shall constitute a
"fixture filing" for purposes of the Applicable UCC; and (c) Mortgagor is the
record owner of the real estate or interests in the real estate constituting the
Mortgaged Property hereunder. Information concerning the security interest
herein granted may be obtained at the addresses set forth on the first page
hereof. The addresses of the Secured Party (Mortgagee) and of the Debtor
(Mortgagor) are set forth on the first page hereof. In that regard, the
following information is provided:

  Name of Debtor:           Lakes Entertainment, Inc.

  Type of Organization:     Corporation

  State:                    Minnesota

  FEIN:                     41-1913991

  Organizational ID Number: 10E-882

  Name of Secured Party:    Bank of America, N.A.

                                       6

<PAGE>

  Address of Secured Party: 100 North Tyron Street
                            Charlotte, North Carolina 28255-0001

  Attention:                Douglas Jones

            SECTION 2.05 Future Advances. It is the intention of Mortgagor and
Mortgagee that this Mortgage (as renewed and extended from time to rime) shall
secure future advances and readavances, and the lien and security interest
created by this Mortgage shall attach upon execution and have priority from the
time of recording as to all advances, whether obligatory or discretionary, until
this Mortgage is released of record.

                                  ARTICLE III.

                         ASSIGNMENT OF LEASES AND RENTS

            SECTION 3.01 Assignment. For Ten Dollars ($10.00) and other good and
valuable consideration, including the indebtedness evidenced by the Credit
Agreement, the receipt and sufficiency of which are hereby acknowledged and
confessed, Mortgagor has presently, absolutely and irrevocably GRANTED,
BARGAINED, SOLD, ASSIGNED, TRANSFERRED, CONVEYED and CONFIRMED, and by these
presents does presently, absolutely and irrevocably GRANT, BARGAIN, SELL,
ASSIGN, TRANSFER, CONVEY and CONFIRM, unto Mortgagee, as Administrative Agent
for the Lenders pursuant to the Credit Agreement, as security for the payment,
performance and discharge of the Obligations, all of the Leases and Rents (if
any), subject only to the Permitted Liens applicable thereto and the License (as
hereinafter defined); TO HAVE AND TO HOLD the Leases and the Rents unto
Mortgagee; forever, and Mortgagor does hereby bind itself, its successors and
assigns to warrant and forever defend the title to the Leases and the Rents unto
Mortgagee against every Person whomsoever lawfully claiming or to claim the same
or any part thereof; provided, however, that if Mortgagor shall pay (or cause to
be paid) and perform and discharge (or cause to be performed and discharged) all
of the Obligations on or before the date on which the same are to be paid,
performed and discharged, then this assignment shall terminate, and all rights,
titles and interests conveyed pursuant to this assignment shall become vested in
Mortgagor.

            SECTION 3.02 Revocable License.

      (a) Mortgagee hereby grants to Mortgagor a revocable license (the
"License"), nonexclusive with the rights of Mortgagee reserved in Sections
3.02(b), 3.04 and 3.05 hereof, to exercise and enjoy all incidences of the
status of a lessor under the Leases and the Rents, including, without
limitation, the right to collect, demand, sue for, attach, levy, recover and
receive the Rents and to give proper receipts, releases and acquittances
therefor. Mortgagor hereby agrees to receive all Rents and hold the same as a
trust fund to be applied, and to apply the Rents so collected, except to the
extent otherwise provided in the Credit Agreement, first to the payment,
performance and discharge of the Obligations and then to the payment of the

                                       7

<PAGE>

Impositions. Thereafter, Mortgagor may use the balance of the Rents collected in
any manner not inconsistent with the Loan Documents.

      (b) If an Event of Default shall occur and be continuing, the License
shall immediately and automatically terminate without the necessity of any
action by Mortgagee or any other Person, and Mortgagee shall have the right in
such event to exercise the rights and remedies provided under this Mortgage or
otherwise available to Mortgagee under applicable law. Upon demand by Mortgagee
at any time that an Event of Default shall have occurred, Mortgagor shall
promptly pay to Mortgagee all security deposits under the Leases and all Rents
allocable to any period commencing from and after the occurrence of such Event
of Default. Any Rents received hereunder by Mortgagee shall be applied and
disbursed to the payment, performance and discharge of the Obligations, subject
to the terms of the Credit Agreement; provided, however, that, subject to any
applicable requirement of law, any security deposits actually received by
Mortgagee shall be held, applied and disbursed as provided in the applicable
Leases.

            SECTION 3.03 Enforcement of Leases. Mortgagor shall (a) submit any
and all proposed Leases which individually grant the use of more than 3,000
square feet (including any subleases which individually grant the use of more
than 3,000 square feet) provided to Mortgagor for approval to Mortgagee for
approval prior to the execution thereof or consent thereto, as applicable; (b)
duly and punctually perform and comply with any and all representations,
warranties, covenants and agreements expressed as binding upon the lessor under
any Lease; (c) maintain each Lease in full force and effect during the term
thereof; (d) provide Mortgagee with prompt notice of each notice of default sent
to a tenant under a Lease, provide Mortgagee with prompt notice of each notice
of default received from (or relating to) a tenant under a Lease, and otherwise
promptly reasonably indicate that a material default or termination of a Lease
may occur (other than by reason of the expiration of the term of such Lease);
(e) appear in and defend any action or proceeding in any manner connected with
any of the Leases; (f) deliver to Mortgagee true and complete copies of all
Leases; and (g) deliver to Mortgagee all such further information, and execute
and deliver to Mortgagee such further assurances and assignments, with respect
to the Leases as Mortgagee may from time to time reasonably request. Without
Mortgagee's prior written consent, Mortgagor shall not (i) do or knowingly
permit to be done anything to materially impair the value of any of the Leases;
(ii) except for security or similar deposits, collect any of the Rent more than
one (1) month in advance of the time when the same becomes due under the terms
of any Lease; (iii) discount any future accruing Rents; (iv) amend or modify any
of the Leases so as to reduce the length of the Lease terms or the Rents due
thereunder, or accept the surrender of or terminate any of the Leases; or (v)
assign or grant a security interest in or to the License or any of the Leases or
Rents.

            SECTION 3.04 Direction to Tenants. Upon and at any time following
the occurrence and during the continuance of an Event of Default, Mortgagor
hereby authorizes and directs, and shall, at the direction of Mortgagee, further
authorize and direct, in writing, the tenant under each Lease to pay directly
to, or as directed by, Mortgagee all Rents accruing or due under its Lease,
without proof to the tenant of the occurrence and continuance of such Event of
Default. Mortgagor hereby authorizes the tenant under each Lease to rely upon
and comply with any notice or demand from Mortgagee for payment of Rents to
Mortgagee, and Mortgagor shall

                                       8

<PAGE>

have no claim against any tenant for Rents paid by such tenant to Mortgagee
pursuant to such notice or demand. All Rents actually collected by Mortgagee
pursuant to this Section 3.04 shall be applied in accordance with the Credit
Agreement.

            SECTION 3.05 Appointment of Attorney-in-Fact.

      (a) Mortgagor hereby constitutes and appoints Mortgagee the true and
lawful attorney-in-fact, coupled with an interest, of Mortgagor and Mortgagor
hereby confers upon Mortgagee the right, in the name, place and stead of
Mortgagor, to, upon the occurrence and during the continuance of an Event of
Default, demand, sue for, attach, levy, recover and receive any of the Rents and
any premium or penalty payable upon the exercise by any third Person under any
Lease of a privilege of cancellation originally provided in such Lease and to
give proper receipts, releases and acquittances therefor and, after deducting
expenses of collection, to apply the net proceeds as provided in the Credit
Agreement. Mortgagor hereby authorizes and directs any such third Person to
deliver such payment to Mortgagee in accordance with this Article III, and
Mortgagor hereby ratifies and confirms all that its said attorney-in-fact, the
Mortgagee, shall do or cause to be done in accordance with this Mortgage and by
virtue of the powers granted hereby. The foregoing appointment is irrevocable
and continuing, and such rights, powers and privileges shall be exclusive in
Mortgagee, and its successors and assigns, so long as any part of the
Obligations remains unpaid or unperformed and undischarged;

      (b) Mortgagor hereby constitutes and appoints Mortgagee the true and
lawful attorney-in-fact, coupled with an interest, of Mortgagor and Mortgagor
hereby confers upon Mortgagee the right, in the name, place and stead of
Mortgagor, to subject and subordinate at any time and from time to time any
Lease or any part thereof to the lien, assignment and security interest of this
Mortgage and to the terms hereof, or to any other mortgage, deed of trust,
assignment or security agreement, or to any ground lease or surface lease, with
respect to all or a portion of the Mortgaged Property, or to request or require
such subordination, where such reservation, option or authority was reserved to
Mortgagor under any such Lease, or in any case where Mortgagor otherwise would
have the right, power or privilege so to do. The foregoing appointment is
irrevocable and continuing, and such rights, powers and privileges shall be
exclusive in Mortgagee, and its successors and assigns, so long as any part of
the Obligations remains unpaid or unperformed and undischarged. Mortgagor hereby
represents and warrants that it has not at any time prior to the date hereof
exercised (or appointed any Person as attorney-in-fact to exercise) any of the
rights described in this Section 3.05, and Mortgagor hereby covenants not to
exercise (or appoint any other Person as attorney-in-fact to exercise) any such
right, nor (except at Mortgagee's written request) to subordinate any such Lease
to the lien of this Mortgage or to any other mortgage, deed of trust, assignment
or security agreement or to any ground lease or surface lease.

            SECTION 3.06 No Liability of Mortgagee. Neither the acceptance
hereof nor the exercise of the rights and remedies hereunder nor any other
action on the part of Mortgagee or any Person exercising the rights of Mortgagee
or any Lender hereunder shall be construed to: (a) be an assumption by Mortgagee
or any such Person or to otherwise make Mortgagee or such Person liable or
responsible for the performance of any of the obligations of Mortgagor under or
with respect to the Leases or for any Rent, security deposit or other amount
delivered to Mortgagor, provided that Mortgagee or any such Person exercising
the rights of

                                       9

<PAGE>

Mortgagee shall be accountable for any Rents, security deposits or other amounts
actually received by Mortgagee or such Person, as the case may be; or (b)
obligate Mortgagee or any such Person to take any action under or with respect
to the Leases or with respect to the Mortgaged Property, to incur any expense or
perform or discharge any duty or obligation under or with respect to the Leases
or with respect to the Mortgaged Property, to appear in or defend any action or
proceeding relating to the Leases or the Mortgaged Property, to constitute
Mortgagee as a mortgagee-in-possession (unless Mortgagee actually enters and
takes possession of the Mortgaged Property), or to be liable in any way for any
injury or damage to Persons or property sustained by any Person in or about the
Mortgaged Property, other than to the extent caused by the gross negligence or
willful misconduct of Mortgagee or any Person exercising the rights of Mortgagee
hereunder.

            SECTION 3.07 Mortgagor's Indemnities. Mortgagor hereby agrees to
protect, indemnify and hold harmless Mortgagee and each of the other Indemnitees
and each Indemnified Party related to Mortgagee or such other Indemnitees from
and against any and all Losses which Mortgagee or any such other Indemnitees or
Indemnified Party may incur under or by reason of this Article III, or for any
action taken by Mortgagee or any such other Lender or Indemnified Party
hereunder, or by reason or in defense of any and all claims and demands
whatsoever which may be asserted against Mortgagee or any such other Indemnitees
or Indemnified Party arising out of the Leases, including, without limitation,
any claim by any third Person for credit on account of Rents paid to and
received by Mortgagor, but not delivered to Mortgagee or its agents,
representatives or employees, for any period under any Lease more than one (1)
month in advance of the due date thereof. The foregoing indemnity shall include,
in any case, such Loss as may result from the ordinary negligence of Mortgagee
or such other Indemnitees or Indemnified Party, but not any such Loss that is
caused by the gross negligence or willful misconduct of Mortgagee or any such
other Indemnitees or Indemnified Party. In the event that Mortgagee or any of
the other Lenders or any Indemnified Party incurs any Losses covered by the
indemnity set forth in this Section 3.07, the amount thereof, including
reasonable attorneys' fees, with interest thereon at the Default Rate, shall be
payable by Mortgagor to Mortgagee within ten (10) days after demand therefor,
and shall be secured hereby and by all other security for the payment and
performance of the Obligations, including, without limitation, the lien and
security interest of this Mortgage. The liabilities of Mortgagor as set forth in
this Section 3.07 shall survive the termination of this Mortgage and the
repayment of the Obligations.

            SECTION 3.08 No Modification of Mortgagor's Obligations. Nothing
herein contained shall modify or otherwise alter the obligation of Mortgagor to
make prompt payment of all Obligations as and when the same become due,
regardless of whether the Rents described in this Article III are sufficient to
pay the Obligations, and the security provided to Mortgagee pursuant to this
Article III shall be cumulative of all other security of any and every character
now or hereafter existing to secure payment of the Obligations.

                                   ARTICLE IV.

                         REPRESENTATIONS AND WARRANTIES

      Mortgagor hereby unconditionally represents and warrants to Mortgagee (but
to the extent any representation or warranty in this Article IV is substantively
the same as a

                                       10

<PAGE>

representation or warranty contained in Article V of the Credit Agreement and
such representation or warranty is qualified by a materiality or other qualifier
in the Credit Agreement, such representation or warranty herein shall be subject
to the same materiality or other qualifier as in Article V of the Credit
Agreement) as follows:

            SECTION 4.01 Title to Mortgaged Property and Lien of this Mortgage.
Mortgagor has good, marketable and indefeasible fee simple title to the Land and
the Buildings, and has good, marketable and indefeasible title to the Fixtures,
the Personalty and the other Mortgaged Property. The Mortgaged Property is free
and clear of any and all Liens, charges, encumbrances, security interests and
adverse claims whatsoever, except for (i) all Liens, charges, encumbrances,
security interests and adverse claims specifically identified as exceptions in
Schedule B of the policy of title insurance accepted by Mortgagee in connection
herewith or (ii) those Liens set forth in Section 5.08 of the Credit Agreement.

            SECTION 4.02 Taxes and Other Payments. Mortgagor has filed all
federal, state, commonwealth, county, municipal and city income and other
material tax returns required to have been filed by it and has paid all taxes
and other Impositions which have become due pursuant to such returns or pursuant
to any assessments or charges received by it, and Mortgagor does not know of any
basis for any additional assessment or charge in respect of any such taxes or
other Impositions. Mortgagor has paid in full all sums owing or claimed for
labor, material, supplies, personal property (whether or not forming a Fixture
hereunder) and services of every kind and character used, furnished or installed
in or on the Mortgaged Property that are now due and owing and no claim for same
exists or will be permitted to be created, except such claims as may arise in
the ordinary course of business and that are not yet past due.

            SECTION 4.03 Power to Create Lien and Security. Mortgagor has full
power and lawful authority to grant, bargain, sell, assign, transfer, mortgage
and convey a Lien and security interest in all of the Mortgaged Property in the
manner and form herein provided and without obtaining the authorization,
approval, consent or waiver of any grantor, lessor, sublessor, Governmental
Authority or other Person whomsoever.

            SECTION 4.04 Loan and Loan Documents. Mortgagor has received a copy
of and is fully familiar with the terms and provisions of the Credit Agreement
and the other Loan Documents. All representations and warranties made by
Mortgagor in the Credit Agreement and the other Loan Documents are incorporated
herein by reference and are hereby made by Mortgagor as to itself and the
Mortgaged Property as though such representations and warranties were set forth
at length herein as the representations and warranties of Mortgagor.

            SECTION 4.05 Compliance with Laws. All of the improvements on the
Land (i) comply with all material requirements of all applicable laws and
ordinances with respect to zoning, subdivision, construction, building and land
use, including, without limitation, requirements with respect to parking, access
and certificates of occupancy (and similar certificates) and (ii) comply with,
and shall remain in compliance with, applicable health, fire and building codes.
All of the Buildings lie wholly within the boundaries and building restriction
lines of the Land. No improvements on adjoining properties encroach upon the
Land, and no easements or other encumbrances upon the Land encroach upon or
under any of the Buildings or any portion of the Mortgaged Property. All of the
Buildings and the use of the

                                       11

<PAGE>

Mortgaged Property materially comply with, and shall remain in material
compliance with, all applicable statutes, rules, regulations and private
covenants now or hereafter relating to the ownership, construction, use or
operation of the Mortgaged Property, including all applicable statutes, rules
and regulations pertaining to requirements for equal opportunity,
anti-discrimination, fair housing, environmental protection, zoning and land
use. All certifications, permits, licenses and approvals, including, without
limitation, certificates of completion and occupancy permits required for the
legal use, occupancy and operation of the Mortgaged Property have been obtained
and are in full force and effect. Mortgagor has not received any notice of, or
other communication with respect to, an alleged violation with respect to any of
the foregoing.

            SECTION 4.06 No Condemnation. No part of any property subject to
this Mortgage has been taken in condemnation or other like proceeding nor is any
proceeding pending, threatened or known to be contemplated for the partial or
total condemnation or taking of the Mortgaged Property.

            SECTION 4.07 Flood Zone. The Mortgaged Property is not located in an
area identified by the Federal Emergency Management Agency ("FEMA") as having
special flood hazards or if the Land or any part thereof is identified by the
Federal Emergency Management Agency as an area having special flood hazards
(including, without limitation, those areas designated as Zone A or Zone V),
then Mortgagor has obtained the insurance required under Section 5.04(a)(v) of
this Mortgage.

                                   ARTICLE V.

                              AFFIRMATIVE COVENANTS

      Mortgagor hereby unconditionally covenants and agrees with Mortgagee as
follows:

            SECTION 5.01 Lien Status. Except as otherwise expressly provided in
the Credit Agreement, Mortgagor shall not place, or permit to be placed, or
otherwise mortgage, hypothecate or encumber the Mortgaged Property, or any
portion thereof or interest therein, with any other Lien or security interest of
any nature whatsoever (statutory, constitutional or contractual), other than
Permitted Liens, regardless of whether such Lien or security interest is
inferior to the Lien and security interest created by this Mortgage, and, if any
such Lien or security interest is asserted against the Mortgaged Property,
Mortgagor shall promptly, at its own cost and expense, (a) pay the underlying
claim in full (except for so long as such claim is being contested by Mortgagor
in good faith and as and to the extent permitted in accordance with the terms of
the Credit Agreement) or take such other action as may be necessary to cause the
same to be released of record and otherwise, and (b) within ten (10) days after
the date on which Mortgagor receives notice of such Lien or security interest,
give Mortgagee notice of such Lien or security interest. Such notice shall
specify who is asserting such Lien or security interest and shall detail the
origin and nature of the underlying claim giving rise to such asserted Lien or
security interest.

            SECTION 5.02 Payment of Impositions. Mortgagor shall duly pay and

                                       12

<PAGE>

discharge, or cause to be paid and discharged, all Impositions not later than
the due date thereof, or the day on which any fine, penalty, interest or cost
may be added thereto or imposed, or the day on which any Lien may be filed for
the nonpayment thereof (if such day is used to determine the due date of the
respective item); provided, however that Mortgagor may, if permitted by
applicable law and if such installment payment would not create or permit the
filing of a Lien against the Mortgaged Property, pay the Impositions in
installments. Notwithstanding the foregoing, Mortgagor may in good faith, by
appropriate proceedings and upon notice to Mortgagee, contest the validity,
applicability or amount of any asserted tax or assessment, subject to any more
restrictive provisions applicable to any such contest contained in the Credit
Agreement and (without limiting the foregoing) so long as (a) such contest is
diligently pursued, (b) Mortgagee determines, in its opinion reasonably
exercised, that such contest suspends the obligation to pay the tax and that
nonpayment of such tax or assessment will not result in the sale, loss,
forfeiture or diminution of the Mortgaged Property or any part thereof or any
interest of Mortgagee therein, and (c) unless expressly provided to the contrary
in the Credit Agreement, prior to the earlier of the commencement of such
contest or the delinquency date of the asserted tax or assessment, Mortgagor
deposits with Mortgagee an amount determined by Mortgagee to be adequate to
cover the payment of such tax or assessment and a reasonable additional sum to
cover possible interest, costs and penalties; provided, however, that Mortgagor
shall promptly cause to be paid any amount adjudged by a court of competent
jurisdiction to be due, with all interest, costs and penalties thereon, promptly
after such judgment becomes final (and, subject to Mortgagee's rights and
remedies during an Event of Default, Mortgagee shall make any sum deposited
pursuant to clause (c) above available for such payment); and provided, further
that in any event each such contest shall be concluded, the taxes, assessments,
interest, costs and penalties shall be paid prior to the date any writ or order
is issued under which the Mortgaged Property may be sold, lost or forfeited.

            SECTION 5.03 Repair. Mortgagor shall keep the Mortgaged Property in
good order and condition (reasonable wear and tear excepted) and shall make all
repairs, replacements and improvements thereof and thereto, interior and
exterior, structural and non-structural, ordinary and extraordinary, which are
necessary to keep the same in such order and condition. Mortgagor shall also use
reasonable efforts to prevent any act or occurrence which might impair the value
or usefulness of the Mortgaged Property for its intended usage.

            SECTION 5.04 Insurance and Application of Insurance Proceeds.

      (a) During the term of this Mortgage, Mortgagor, at its sole cost and
expense, shall maintain or cause to be maintained all insurance on the Mortgaged
Property that is required to be maintained under the Credit Agreement. In
addition, Mortgagor, at its sole cost and expense, shall maintain or cause to be
maintained such other insurance as may, from time to time, be required by
Mortgagee in order to protect its interests in the Mortgaged Property.

      (b) All such insurance policies with respect to the Mortgaged Property
shall contain a standard, non-contributory mortgagee clause naming Mortgagee,
and its successors and assigns, as an additional insured under all liability
insurance policies, as the first mortgagee and loss payee on all property
insurance policies, and as the sole loss payee on all rental loss or business
interruption insurance policies. Mortgagor shall not take out separate insurance
with respect to the Mortgaged Property concurrent in form or contributing in the
event of loss with

                                       13

<PAGE>

that required to be maintained hereunder or under the Credit Agreement unless
Mortgagee is named as an additional insured thereon under a standard mortgagee
clause acceptable to Mortgagee and each such policy is otherwise in form and
substance acceptable to Mortgagee.

      (c) In the event of the foreclosure of this Mortgage, or in the event of
any transfer of title to the Mortgaged Property, or any part thereof, by
foreclosure sale or by power of sale or deed in lieu of foreclosure, the
purchaser of the Mortgaged Property, or such part thereof, shall succeed to all
of Mortgagor's rights with respect to the Mortgaged Property, including any
rights to unexpired, unearned or returnable insurance premiums, subject to
limitations on the assignment of blanket policies, but limited to such rights as
relate to the Mortgaged Property or such part thereof. If Mortgagee acquires
title to the Mortgaged Property, or any part thereof, in any manner, Mortgagee
shall thereupon (as between Mortgagor and Mortgagee) become the sole and
absolute owner of the insurance policies with respect to the Mortgaged Property,
and all insurance proceeds payable thereunder with respect to the Mortgaged
Property, with the sole right to collect and retain all unearned or returnable
premiums thereon with respect to the Mortgaged Property, or such part thereof,
if any.

      (d) If any damage to, destruction or loss of or other casualty with
respect to any of the Mortgaged Property shall occur, Mortgagor shall file and
prosecute its claim or claims for any insurance proceeds in good faith and with
due diligence and cause the same to be collected and paid over to Mortgagee, and
Mortgagor hereby irrevocably authorizes and empowers Mortgagee, in the name of
Mortgagor or otherwise, to collect and receipt for any such insurance proceeds
and to adjust any insurance claims and to file and prosecute such claim or
claims, and although it is hereby expressly agreed that the same shall not be
necessary in any event, Mortgagor shall, upon demand of Mortgagee, make, execute
and deliver any and all assignments and other instruments sufficient for the
purpose of assigning any such insurance proceeds to Mortgagee, free and clear of
any Liens whatsoever. Mortgagor hereby irrevocably appoints Mortgagee as
Mortgagor's attorney-in-fact for each such purpose (which appointment is coupled
with an interest) and authorizes any Person to act upon the foregoing
appointment.

      (e) Following any damage to, destruction or loss of or other casualty with
respect to any of the Mortgaged Property, Mortgagee shall apply the entire
amount of any insurance proceeds in accordance with the provisions of the Credit
Agreement or, if there is no provision contained in the Credit Agreement
governing how the same are to be applied, then Mortgagee shall apply the entire
amount thereof to the payment of the Obligations, whether or not then due and
payable, in such manner and order as Mortgagee may elect. Unless expressly
provided to the contrary in the Credit Agreement, Mortgagor hereby covenants and
agrees to promptly commence and to diligently prosecute the restoration of the
Mortgaged Property upon the occurrence of any casualty loss affecting the
Mortgaged Property, without regard to the availability or adequacy of insurance
proceeds, but in all events in a manner approved by Mortgagee. Notwithstanding
any damage to, destruction or loss of or other casualty with respect to any of
the Mortgaged Property, Mortgagor shall continue to pay the Obligations at the
time and in the manner provided for in the Credit Agreement and the other Loan
Documents until the Obligations have been paid in full. Notwithstanding anything
to the contrary in this Section 5.04 but subject to the final sentence of this
Section 5.04(e), if any damage to, destruction or loss of or other casualty with
respect to the Mortgaged Property results in damage or loss of $50,000.00 or
less, provided that no Default exists under the Loan Documents, Mortgagor shall
be allowed to

                                       14

<PAGE>

settle such claims with no involvement by Mortgagee, retain any proceeds, and
apply them to restoration of the Mortgaged Property. Furthermore, subject to the
final sentence of this Section 5.04(e), in the event of any damage to or
destruction of the Mortgaged Property or any part thereof to an extent that the
cost of restoration is greater than $50,000 but less than twenty-five percent
(25%) of the fair market value of the Mortgaged Property, Mortgagee shall make
the net insurance proceeds payable by reason of such damage or destruction
available for restoration and repair of the Mortgaged Property to its original
condition ("restoration"), provided that the following conditions are satisfied
to the reasonable satisfaction of Mortgagee within one hundred twenty (120) days
after such damage or destruction:

            (i) Mortgagor shall submit to Mortgagee schematic plans and
   specifications for the restoration, which plans and specifications shall be
   consistent with the condition of the Mortgaged Property immediately prior to
   such damage or destruction, subject to modifications approved by Mortgagee;

            (ii) Mortgagor shall enter into a fixed or guaranteed maximum cost
   contract for the restoration with a contractor reasonably acceptable to
   Mortgagee;

            (iii) Mortgagor shall obtain all necessary governmental permits and
   approvals for the restoration;

            (iv) Mortgagor shall deposit with Mortgagee such sums of money as
   are necessary, when added to the net insurance proceeds and earnings thereon,
   to pay the full cost of the restoration;

            (v) The contract for performance of the restoration shall provide
   that the restoration shall be substantially complete within one (1) year
   after the date of the damage or destruction; and

            (vi) Mortgagor shall agree to comply with such additional
   construction disbursement conditions and procedures as are customary for such
   projects.

The net insurance proceeds and any sums deposited by Mortgagor pursuant to (iv)
above shall be held by Mortgagee in a separate interest-bearing account
established at Mortgagor's expense in the name of Mortgagee but for the benefit
of Mortgagor, and all earnings on such deposits shall be added to such account.
Mortgagor shall pay to Mortgagee a fee for Mortgagee's internal staff expense of
monitoring such disbursements equal to one percent (1%) of the amount deposited
in such account, and Mortgagor shall pay all out-of-pocket fees and expenses
paid by Mortgagee to title insurance companies and consulting engineers and
architects, for endorsements to title policies, review of plans, inspections and
disbursing services in connection with such application of net insurance
proceeds to the restoration. After completion of the restoration, any balance
remaining in such account up to the amount of any sums deposited by Mortgagor
pursuant to (iv) above plus $50,000 shall be paid to Mortgagor, and any balance
remaining in such account in excess of such amounts shall be paid to Mortgagee
for application to the Obligations in such order as Mortgagee shall determine.
If the Mortgaged Property is sold, through foreclosure or otherwise, prior to
the receipt by Mortgagee of such insurance proceeds, Mortgagee shall have the
right, whether or not a deficiency judgment on any Loan Document shall have been
sought,

                                       15

<PAGE>

recovered or denied, to receive such insurance proceeds, or a portion thereof
sufficient to pay the then unpaid Obligations, whichever is less.

            SECTION 5.05 Condemnation and Application of Condemnation Proceeds.

      (a) Promptly upon its obtaining knowledge of the institution or the
threatened institution of any proceeding for the condemnation or other taking of
the Mortgaged Property, or any portion thereof or interest therein, Mortgagor
shall notify Mortgagee of such proceeding. Mortgagor shall then, if requested by
Mortgagee, file or defend its claim thereunder and prosecute same with due
diligence to its final disposition and shall, subject to the terms of the Credit
Agreement, cause any awards or settlements to be paid over to Mortgagee for
disposition pursuant to the terms of this Mortgage. Mortgagee shall be entitled
to participate in any such proceeding, at Mortgagor's sole cost and expense, and
Mortgagor shall deliver or cause to be delivered to Mortgagee such instruments
as may be requested by Mortgagee from time to time to permit such participation.

      (b) If the Mortgaged Property or any part thereof is taken or diminished
in value, or if a consent settlement is entered by or under threat of such
proceeding, the award or settlement payable to Mortgagor by virtue of its
interest in the Mortgaged Property shall be, and by these presents is, assigned,
transferred and set over unto Mortgagee to be held by Mortgagee, subject to the
Lien and security interest of this Mortgage, and disbursed in accordance with
the provisions of the Credit Agreement or, if there is no provision contained in
the Credit Agreement governing how the same is to be disbursed, then Mortgagee
shall apply the entire amount thereof to the payment of the Obligations, whether
or not then due and payable, in such manner and order as Mortgagee may elect. In
all events, unless otherwise expressly provided to the contrary in the Credit
Agreement, Mortgagor hereby covenants and agrees to commence and diligently to
prosecute the restoration of the Mortgaged Property upon the occurrence of any
condemnation or other taking affecting the Mortgaged Property, without regard to
the availability or adequacy of any award or settlement. Notwithstanding any
condemnation or other taking of any of the Mortgaged Property, Mortgagor shall
continue to pay the Obligations at the time and in the manner provided for in
the Credit Agreement and the other Loan Documents until any condemnation award
or settlement shall have been actually received and applied by Mortgagee to the
discharge of the Obligations. Notwithstanding anything to the contrary in this
Section 5.05 but subject to the final sentence of this Section 5.05(b), if the
Mortgaged Property or any part thereof is taken or diminished in value, or if a
consent settlement is entered by or under threat of such proceeding, and the
award or settlement payable to Mortgagor by virtue of its interest in the
Mortgaged Property is $50,000.00 or less, provided that no Default exists under
the Loan Documents, Mortgagor shall be entitled to retain that part of any such
award or settlement that is designated for restoration of the Mortgaged Property
and shall apply it accordingly, and the balance shall be paid to Mortgagee for
application to the Obligations in such order as Mortgagee shall determine.
Furthermore, subject to the final sentence of this Section 5.05(b), in the event
the Mortgaged Property or any part thereof is taken or diminished in value, or
if a consent settlement is entered by or under threat of such proceeding, and
the award or settlement payable to Mortgagor by virtue of its interest in the
Mortgaged Property is greater than $50,000 but less than twenty-five percent
(25%) of the fair market value of the Mortgaged Property, Mortgagee shall make
that portion of any such award or settlement that is designated

                                       16

<PAGE>

for restoration of the Mortgaged Property available for restoration and repair
of the Mortgaged Property to a complete architectural unit ("restoration"),
provided that the following conditions are satisfied to the reasonable
satisfaction of Mortgagee within one hundred twenty (120) days after such
taking:

            (i) Mortgagor shall submit to Mortgagee schematic plans and
   specifications for the restoration, which plans and specifications shall be
   consistent with the condition of the Mortgaged Property immediately prior to
   such taking, subject to modifications approved by Mortgagee;

            (ii) Mortgagor shall enter into a fixed or guaranteed maximum cost
   contract for the restoration with a contractor reasonably acceptable to
   Mortgagee;

            (iii) Mortgagor shall obtain all necessary governmental permits and
   approvals for the restoration;

            (iv) Mortgagor shall deposit with Mortgagee such sums of money as
   are necessary, when added to the award proceeds and earnings thereon, to pay
   the full cost of the restoration;

            (v) The contract for performance of the restoration shall provide
   that the restoration shall be substantially complete within one (1) year
   after the date of the taking; and

            (vi) Mortgagor shall agree to comply with such additional
   construction disbursement conditions and procedures as are customary for such
   projects.

The award or settlement amount and any sums deposited by Mortgagor pursuant to
(iv) above shall be held by Mortgagee in a separate interest-bearing account
established at Mortgagor's expense in the name of Mortgagee but for the benefit
of Mortgagor, and all earnings on such deposits shall be added to such account.
Mortgagor shall pay to Mortgagee a fee for Mortgagee's internal staff expense of
monitoring such disbursements equal to one percent (1%) of the amount deposited
in such account, and Mortgagor shall pay all out-of-pocket fees and expenses
paid by Mortgagee to title insurance companies and consulting engineers and
architects, for endorsements to title policies, review of plans, inspections and
disbursing services in connection with such application of award proceeds to the
restoration. After completion of the restoration, any balance remaining in such
account up to the amount of any sums deposited by Mortgagor pursuant to (iv)
above plus $50,000 shall be paid to Mortgagor, and any balance remaining in such
account in excess of such amounts shall be paid to Mortgagee for application to
the Obligations in such order as Mortgagee shall determine. If the Mortgaged
Property is sold, through foreclosure or otherwise, prior to the receipt by
Mortgagee of such condemnation award or settlement, Mortgagee shall have the
right, whether or not a deficiency judgment on any Loan Document shall have been
sought, recovered or denied, to receive such condemnation award or settlement,
or a portion thereof sufficient to pay the Obligations, whichever is less.

            SECTION 5.06 Maintenance of Rights-of-Way, Easements, Licenses and
Other Rights. Mortgagor shall maintain, preserve and renew all rights-of-way,
easements, tenements, hereditaments, development rights and credits, zoning
rights, grants, privileges,

                                       17

<PAGE>

appurtenances, licenses, franchises and other rights reasonably necessary for
the use or operation of the Mortgaged Property from time to time, or otherwise
relevant to the value thereof, and Mortgagor shall not, without the prior
written consent of Mortgagee, initiate, join in or consent to any private
restrictive covenant or other public or private restriction as to the present or
future use or operation of the Mortgaged Property. Mortgagor shall, however,
comply with all restrictive covenants which may at any time affect the Mortgaged
Property, all applicable zoning ordinances and all other public or private
restrictions relating to the use of the Mortgaged Property.

            SECTION 5.07 Payment and Performance of Obligations. Mortgagor shall
duly and punctually pay and perform all of the Obligations.

            SECTION 5.08 Compliance with Permitted Liens and Other Obligations.
Mortgagor shall comply in all material respects with any and all obligations,
restrictions and requirements that may be set forth in each and every document
constituting a Permitted Lien. In addition, Mortgagor shall comply in all
material respects with each and every obligation legally imposed upon it and/or
relating to the Mortgaged Property pursuant to applicable law (including,
without limitation, all matters described in Section 4.05 hereof), contract or
other agreement. It is hereby acknowledged that Mortgagee's consent to a
Permitted Lien as of the date hereof shall in no way be deemed to constitute
approval of any future Lien which may be imposed upon any portion of the
Mortgaged Property, or any other enforcement action affecting Mortgagor or the
Mortgaged Property, as a result of Mortgagor's failure to perform or comply with
its obligations under any document constituting a Permitted Lien as of the date
hereof.

            SECTION 5.09 Additional Affirmative Covenants. All affirmative
covenants made by the Borrowers or Guarantors or any of them in the Credit
Agreement are incorporated herein by reference and are hereby also made by
Mortgagor as to itself and the Mortgaged Property as though such covenants were
set forth at length herein as the covenants of Mortgagor.

                                   ARTICLE VI.

                               NEGATIVE COVENANTS

      Mortgagor hereby covenants and agrees with Mortgagee that, until all of
the Obligations shall have been paid or performed in full and discharged:

            SECTION 6.01 Use Violations. Mortgagor shall not use, maintain,
operate or occupy, or allow the use, maintenance, operation or occupancy of, the
Mortgaged Property in any manner which (a) violates in any material respect any
Governmental Requirement, (b) may be dangerous unless safeguarded as required by
applicable law, (c) constitutes a public or private nuisance, or (d) makes void,
voidable or cancelable, or increases, substantially in excess of commercially
reasonably rates, the premium of, any insurance then in force with respect
thereto.

            SECTION 6.02 Waste. Mortgagor shall not commit or permit any waste
with respect to the Mortgaged Property.

                                       18

<PAGE>

            SECTION 6.03 Alterations. Mortgagor shall notify Mortgagee, in
writing and in advance, with respect to all proposed alterations, improvements
or additions to the Mortgaged Property (collectively, "Alterations") which are
of a material nature, and, unless and to the extent otherwise expressly provided
in the Credit Agreement, Mortgagor shall not effect any material Alterations to
the Mortgaged Property without the prior written consent of Mortgagee.
Notwithstanding the foregoing, Mortgagor shall have the right to perform
Alterations to the Mortgaged Property without obtaining the prior written
consent of the Mortgagee pursuant to (i) its normal course of tenant improvement
activities pursuant to any Leases; and (ii) non-structural Alterations the costs
of which in the aggregate do not exceed $100,000.00 in any given year.

            SECTION 6.04 No Further Encumbrances. Mortgagor shall not, without
the prior written consent of Mortgagee, create, place or permit to be created or
placed, or through any act or failure to act, acquiesce in the placing of, or
allow to remain, any mortgage, pledge, Lien (statutory, constitutional or
contractual), security interest, encumbrance or charge on, or conditional sale
or other title retention agreement with respect to, the Mortgaged Property, or
any portion thereof or interest therein, other than the Permitted Liens,
regardless of whether the same are subordinate to the Lien(s) and security
interest(s) created by this Mortgage. Notwithstanding the foregoing, Mortgagor
shall be permitted to place or create purchase money liens on equipment acquired
or held by Mortgagor in the ordinary course of its business to secure the
purchase price of such equipment or indebtedness incurred solely for the purpose
of financing the acquisition of such equipment or liens existing on such
equipment at the time of its acquisition; provided that no such lien shall
extend to or cover any other Mortgaged Property, the principal amount of the
indebtedness secured by any such lien shall not exceed the lesser of 100% of the
fair market value or the cost of the property so held or acquired, and the
aggregate principal amount of indebtedness secured by any or all such liens
shall not exceed at any one time outstanding $160,000.00.

            SECTION 6.05 Transfer Restrictions. Mortgagor shall not sell, lease,
assign, transfer or otherwise dispose of or abandon all or any part of the
Mortgaged Property (or any interest therein), except as expressly permitted by,
and in accordance with the terms of, the Credit Agreement or as permitted
pursuant to Section 3.03 herein.

            SECTION 6.06 Additional Negative Covenants. All negative covenants
made by the Borrowers or Guarantors or any of them in the Credit Agreement and
the other Loan Documents are incorporated herein by reference and are hereby
also made by Mortgagor as to itself and the Mortgaged Property as though such
negative covenants were set forth at length herein as the negative covenants of
Mortgagor.

                                  ARTICLE VII.

                         EVENTS OF DEFAULT AND REMEDIES

            SECTION 7.01 Event of Default. The "Events of Default" set forth in
Section 8.01 of the Credit Agreement are hereby incorporated herein as if fully
set forth herein, and, without limiting the generality of the foregoing, the
occurrence of an "Event of Default" under the Credit Agreement or any other Loan
Document shall constitute an "Event of Default"

                                       19

<PAGE>

hereunder.

            SECTION 7.02 Acceleration. Upon the occurrence and during the
continuance of any Event of Default, in addition to any other rights, powers or
remedies conferred herein or by operation of law, Mortgagee, in its sole
judgment and discretion, may declare the then unpaid principal balance of the
Loan (the "Principal Balance"), the accrued interest thereon and any other
accrued but unpaid portion of the Obligations to be, and they shall thereupon
forthwith become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived by
Mortgagor.

            SECTION 7.03 Foreclosure and Sale. If an Event of Default shall
occur and be continuing, Mortgagee shall have the right and option to take
possession of the Mortgaged Property and/or proceed with foreclosure and to
sell, to the extent and in the manner permitted by applicable law, all or any
portion of the Mortgaged Property at one or more sales, as an entirety or in
parcels, at such place or places, in such manner and upon such notice as may be
required by applicable law, or, in the absence of any such requirement, as
Mortgagee may deem appropriate, and to make conveyance to the purchaser or
purchasers. Where the Mortgaged Property is situated in more than one county,
notice as above provided shall be posted and filed in all such counties (if such
notices are required by applicable law), and all such Mortgaged Property may be
sold in any such county and any such notice shall designate the county where
such Mortgaged Property is to be sold. Nothing contained in this Section 7.03
shall be construed so as to limit in any way Mortgagee's rights to sell the
Mortgaged Property, or any portion thereof, by private sale if, and to the
extent that, such private sale is permitted under the laws of the applicable
jurisdiction or by public or private sale after entry of a judgment by any court
of competent jurisdiction so ordering. Mortgagor hereby irrevocably appoints
Mortgagee to be the attorney-in-fact of Mortgagor (coupled with an interest) and
in the name and on behalf of Mortgagor to execute and deliver any deeds,
transfers, conveyances, assignments, assurances and notices which Mortgagor
ought to execute and deliver, and to do and perform any other acts or things
which Mortgagor ought to do and perform under the covenants herein contained
and, generally, to use the name of Mortgagor in the exercise of any of the
powers hereby conferred on Mortgagee. At any such sale: (a) whether made under
the power herein contained or any other legal enactment, or by virtue of any
judicial proceedings or any other legal right, remedy or recourse, it shall not
be necessary for Mortgagee to have physically present, or to have constructive
possession of, the Mortgaged Property (Mortgagor hereby covenanting and agreeing
to deliver to Mortgagee any portion of the Mortgaged Property not actually or
constructively possessed by Mortgagee immediately upon demand by Mortgagee) and
the title to and right of possession of any such property shall pass to the
purchaser thereof as completely as if the same had been actually present and
delivered to purchaser at such sale; (b) each instrument of conveyance executed
by Mortgagee shall contain a general warranty of title, binding upon Mortgagor
and its successors and assigns; (c) each and every recital contained in any
instrument of conveyance made by Mortgagee shall conclusively establish the
truth and accuracy of the matters recited therein, including, without
limitation, nonpayment and/or nonperformance of the Obligations and
advertisement and conduct of such sale in the manner provided herein and
otherwise required by applicable law; (d) any and all prerequisites to the
validity thereof shall be conclusively presumed to have been performed; (e) the
receipt of Mortgagee, or of such other Person or officer making the sale, shall
be a sufficient discharge to the purchaser for its purchase money and neither
such purchaser nor its assigns or personal

                                       20

<PAGE>

representatives shall thereafter be obligated to see to the application of such
purchase money, or be in any way answerable for any loss, misapplication or
non-application thereof; (f) to the fullest extent permitted by applicable law,
Mortgagor shall be completely and irrevocably divested of all of its right,
title, interest, estate, claim and demand whatsoever, either at law or in equity
(including any statutory or common law right of redemption, which is hereby
waived to the fullest extent permitted by applicable law), in and to the
property sold in any such event, and such sale shall be a perpetual bar, both at
law and in equity, against Mortgagor and any and all other Persons claiming by,
through or under Mortgagor; and (g) to the extent and under such circumstances
as are permitted by applicable law, Mortgagee may be a purchaser at any such
sale, and shall have the right, after paying or accounting for all costs of said
sale or sales, to credit the amount of the then unpaid Obligations to the amount
of its bid (in the order of priority set forth in Section 7.16 hereof) in lieu
of cash payment. Each remedy provided in this instrument is distinct from and
cumulative with all other rights and remedies provided hereunder or afforded by
applicable law or equity, and may be exercised concurrently, independently or
successively, in any order whatsoever.

            SECTION 7.04 Mortgagee's Agents. Mortgagee may appoint or delegate
any one or more Persons as agent to perform any act or acts necessary or
incident to any sale held by Mortgagee, including the posting of notices and the
conduct of sale, but in the name and on behalf of Mortgagee.

            SECTION 7.05 Judicial Foreclosure. If any Event of Default shall
occur and be continuing, Mortgagee shall have the right and power to proceed by
a suit or suits in equity or at law, whether for the specific performance of any
covenant or agreement herein contained or in aid of the execution of any power
herein granted, or for any foreclosure hereunder or for the sale of the
Mortgaged Property under the judgment or decree of any court or courts of
competent jurisdiction, or for the enforcement of any other appropriate legal or
equitable remedy.

            SECTION 7.06 Receiver. If any Event of Default shall occur and be
continuing, Mortgagee may apply for and obtain as a matter of right and without
notice to Mortgagor, which notice is hereby expressly waived by Mortgagor, the
appointment of a receiver to collect the Rents of the Mortgaged Property and to
preserve the security hereof; either before or after any foreclosure sale or the
sale of the Mortgaged Property under the order of a court or courts of competent
jurisdiction or under executory or other legal process, without regard to the
value of the Mortgaged Property as security for the amount then due to
Mortgagee, or the solvency of any entity or entities, person or persons
primarily or secondarily liable for the payment of such amounts; the Rents of
the Mortgaged Property, in any such event, having heretofore been assigned to
Mortgagee pursuant to Section 3.01 as additional security for the payment of the
Obligations secured hereby. Any money advanced by Mortgagee in connection with
any such receivership shall be a demand obligation (which obligation Mortgagor
hereby expressly promises to pay) owing by Mortgagor to Mortgagee and shall be
subject to the provisions of Section 8.07(b) hereof.

            SECTION 7.07 Foreclosure for Installments. To the extent allowed by
applicable law, Mortgagee shall also have the option to proceed with foreclosure
in satisfaction of any installments of the Obligations which have not been paid
when due, either through the

                                       21

<PAGE>

courts or otherwise, by non-judicial power of sale in satisfaction of the
matured but unpaid portion of the Obligations as if under a full foreclosure,
conducting the sale as herein provided and without declaring the entire
principal balance and accrued interest due. Such sale may be made subject to the
unmatured portion of the Obligations, and any such sale shall not in any manner
affect the unmatured portion of the Obligations, but as to such unmatured
portion of the Obligations this Mortgage shall remain in full force and effect
just as though no sale had been made hereunder. It is further agreed that
several sales may be made hereunder without exhausting the right of sale for any
unmatured part of the Obligations, it being the intent and purpose hereof to
provide for a foreclosure and sale of the security for any matured portion of
the Obligations without exhausting the power to foreclose and sell the Mortgaged
Property for any subsequently maturing portion of the Obligations.

            SECTION 7.08 Separate Sales. To the extent allowed by applicable
law, the Mortgaged Property may be sold in one or more parcels and in such
manner and order as Mortgagee, in its sole discretion, may elect, it being
expressly understood and agreed that the right of sale arising out of any Event
of Default shall not be exhausted by any one or more sales.

            SECTION 7.09 Possession of Mortgaged Property. Mortgagor agrees to
the full extent that it lawfully may, that, in case one or more of the Events of
Default shall have occurred and be continuing, then, and in every such case,
Mortgagee shall have the right and power to enter into and upon and take
possession of all or any part of the Mortgaged Property in the possession of
Mortgagor, its successors or assigns, or its or their agents or servants, and
may exclude Mortgagor, its successors or assigns, and all Persons claiming by,
through or under Mortgagor, and its or their agents or servants wholly or partly
therefrom; and, holding the same, Mortgagee may use, administer, manage, operate
and control the Mortgaged Property and conduct the business thereof to the same
extent as Mortgagor, its successors or assigns, might at the time do and may
exercise all rights and powers of Mortgagor, in the name, place and stead of
Mortgagor, or otherwise as Mortgagee shall deem best. All costs, expenses and
liabilities of every character incurred by Mortgagee in administering, managing,
operating and controlling the Mortgaged Property shall constitute a demand
obligation (which obligation Mortgagor hereby expressly promises to pay) owing
by Mortgagor to Mortgagee and shall be subject to the provisions of Section
8.07(b) hereof. Mortgagor hereby irrevocably constitutes and appoints Mortgagee
as Mortgagor's attorney-in-fact (coupled with an interest) to perform such acts
and execute such documents as Mortgagee, in its sole discretion, shall deem
appropriate, including endorsement of Mortgagor's name on any instruments.
Regardless of any provision of this Mortgage, the Credit Agreement or any other
Loan Document, Mortgagee shall not be considered to have accepted any property
other than cash or immediately available funds in satisfaction of any obligation
of Mortgagor to Mortgagee, unless Mortgagee shall have given express written
notice of Mortgagee's election to the contrary.

            SECTION 7.10 Occupancy After Acceleration. In the event that there
is an acceleration of the Loan and Mortgagor or Mortgagor's representatives,
successors or assigns or any other Person claiming any interest in the Mortgaged
Property by, through or under Mortgagor, continues to occupy or use the
Mortgaged Property or any part thereof, each and all shall immediately become
the tenant of Mortgagee (or its successor, if applicable), which tenancy shall
be a tenancy from day-to-day, terminable at the will of either the landlord or
tenant, at a rent to be determined by Mortgagee (which may be in excess of fair
market value); provided,

                                       22

<PAGE>

however that until Mortgagee sets forth the amount of such rent, such rent shall
be a fair market rental per day based upon the value of the Mortgaged Property
as a whole; and such rental shall be due daily to the Mortgagee (or its
successor, if applicable). To the extent permitted by applicable law, Mortgagee
(or its successor, if applicable), notwithstanding any language herein to the
contrary, shall have the sole option to demand immediate possession or to permit
the occupants to remain as tenants at will. In the event that the tenant fails
to surrender possession of said property upon demand, Mortgagee (and its
successor, if applicable) shall be entitled to institute and maintain a summary
action for possession of the Mortgaged Property (such as an action for forcible
entry and detainer) in any court having appropriate jurisdiction.

            SECTION 7.11 Remedies Cumulative, Concurrent and Nonexclusive. Every
right, power and remedy herein given to Mortgagee shall be cumulative and in
addition to every other right, power and remedy herein specifically given or now
or hereafter existing in equity, at law or by statute (including specifically
those granted by the Applicable UCC). Each such right, power and remedy, whether
specifically herein given or otherwise existing, may be exercised from time to
time and so often and in such order as may be deemed expedient by Mortgagee, and
the exercise, or the beginning of the exercise, of any such right, power or
remedy shall not be deemed a waiver of the right to exercise, at the same time
or thereafter, any other right, power or remedy. Mortgagee shall be entitled to
collect all costs and expenses incurred in pursuing such remedies. No delay or
omission by Mortgagee in the exercise of any such right, power or remedy shall
impair any such right, power or remedy or operate as a waiver thereof or of any
other right, power or remedy then or thereafter existing.

            SECTION 7.12 No Release of Obligations. Neither Mortgagor nor any
Borrower, Guarantor or other Person now or hereafter obligated for the payment
or performance of all or any part of the Obligations shall be relieved of any
such obligation by reason of (a) the failure of Mortgagee to comply with any
request of Mortgagor or any Borrower, Guarantor or other Person so obligated to
foreclose the Lien of this Mortgage or to enforce any provision hereunder or
under the Loan Agreement; (b) the release, regardless of consideration, of the
Mortgaged Property or any portion thereof or interest therein or the addition of
any other property to the Mortgaged Property; (c) any agreement or stipulation
between any subsequent owner of the Mortgaged Property and Mortgagee extending,
renewing, rearranging or in any other way modifying the terms of this Mortgage
without first having obtained the consent of, given notice to or paid any
consideration to Mortgagor or any Borrower, Guarantor or other Person, and in
any such event Mortgagor and all Borrowers, Guarantors and such other Persons
shall continue to be liable to make payment according to the terms of any such
extension or modification agreement unless expressly released and discharged in
writing by Mortgagee; or (d) any other act or occurrence save and except the
complete payment and performance of all of the Obligations.

            SECTION 7.13 Release of and Resort to Collateral. Mortgagee may
release, regardless of consideration, any part of the Mortgaged Property
without, as to the remainder, in any way impairing, affecting, subordinating or
releasing the Lien or security interest created in or evidenced by this Mortgage
or its stature as a first and prior Lien and security interest in and to the
Mortgaged Property, and without in any way releasing or diminishing the
liability of any Person liable for the payment or performance of the
Obligations. Mortgagee may resort to any other security for the Obligations held
by Mortgagee in such

                                       23

<PAGE>

manner and order as Mortgagee may elect.

            SECTION 7.14 Waiver of Redemption, Notice and Marshalling of Assets.
To the fullest extent permitted by applicable law, Mortgagor hereby irrevocably
and unconditionally waives and releases (a) all benefits that might accrue to
Mortgagor by virtue of any present or future moratorium law or other law
exempting the Mortgaged Property from attachment, levy or sale on execution or
providing for any appraisement, valuation, stay of execution, exemption from
civil process, redemption or extension of time for payment; (b) except for
notices expressly provided for herein or in the Credit Agreement, all notices of
any Event of Default or of Mortgagee's intention to accelerate maturity of the
Obligations or of Mortgagee's election to exercise or actual exercise of any
right, remedy or recourse provided for hereunder or under the Credit Agreement;
and (c) any right to a marshalling of assets or a sale in inverse order of
alienation; and (d) any and all conflicts with any provisions of any of the Loan
Documents. If any law referred to in this Mortgage and now in force, of which
Mortgagor or its successor or successors might take advantage despite the
provisions hereof, shall hereafter be repealed or cease to be in force, such law
shall thereafter be deemed not to constitute any part of the contract herein
contained or to preclude the operation or application of the provisions hereof.

            SECTION 7.15 Discontinuance of Proceedings. In case Mortgagee shall
have proceeded to invoke any right, remedy or recourse permitted hereunder or
under the Credit Agreement and shall thereafter elect to discontinue or abandon
same for any reason, Mortgagee shall have the unqualified right so to do and, in
such an event, Mortgagor and Mortgagee shall be restored to their former
positions with respect to the Obligations, this Mortgage, the Credit Agreement,
the Mortgaged Property and otherwise, and the rights, remedies, recourses and
powers of Mortgagee shall continue as if same had never been invoked.

            SECTION 7.16 Application of Proceeds. After the occurrence and
during the continuance of an Event of Default, the proceeds of any sale of and
any other amounts generated by the holding, leasing, operating or other use of
the Mortgaged Property shall be applied by Mortgagee (or the receiver, if one is
appointed), to the extent that funds are so available therefrom, in accordance
with the provisions of the Credit Agreement or, if not so provided, then in the
following order of priority, except to the extent otherwise required by
applicable law:

      (a) first, to the payment of the reasonable and necessary costs and
expenses of taking possession of the Mortgaged Property and of holding, using,
leasing, repairing, improving the same, including reasonable (i) receivers'
fees, (ii) court costs, (iii) attorneys' and accountants' fees, (iv) costs of
advertisement and title search fees, and (v) the payment of any and all
Impositions, Liens, security interests or other rights, titles or interests
equal or superior to the Lien and security interest of this Mortgage (except
those to which the Mortgaged Property has been sold subject to and without in
any way implying Mortgagee's prior consent to the creation thereof);

      (b) second, to the payment of all amounts other than the Principal Balance
and accrued but unpaid interest which may be due to Mortgagee hereunder or under
the other Loan Documents, together with interest thereon as provided herein;

                                       24

<PAGE>

      (c) third, to the payment of the Obligations in such order and manner as
Mortgagee determines in its sole discretion; and

      (d) fourth, to Mortgagor or as otherwise required by any Governmental
Requirement.

Mortgagor shall be liable for any deficiency remaining.

            SECTION 7.17 Uniform Commercial Code Remedies. Mortgagee shall have
all of the rights, remedies and recourses with respect to the Personalty and the
Fixtures afforded to it by the Applicable UCC, including, without limitation,
the right to take possession of the Personalty and the Fixtures or any part
thereof, and to take such other measures as Mortgagee may deem necessary for the
care, protection and preservation of the Personalty and the Fixtures, in
addition to, and not in limitation of, the other rights, remedies and recourses
afforded by this Mortgage and the other Loan Documents.

            SECTION 7.18 Indemnity. In connection with any action taken by
Mortgagee pursuant to this Mortgage, neither Mortgagee nor any Indemnified
Person shall be liable for any Loss sustained by Mortgagor, including those
resulting from (a) any assertion that Mortgagee or any Indemnified Person
received funds from the operations of the Mortgaged Property claimed by third
Persons, or (b) any act or omission of Mortgagee or such Indemnified Person in
administering, managing, operating or controlling the Mortgaged Property,
including in either case such Loss as may result from the ordinary negligence of
Mortgagee or such Indemnified Person or which may result from strict liability,
whether under applicable law or otherwise, unless such Loss is caused by the
gross negligence or willful misconduct of Mortgagee or such Indemnified Person,
nor shall Mortgagee or such Indemnified Person be obligated to perform or
discharge any obligation, duty or liability of Mortgagor. Mortgagor shall and
does hereby agree to indemnify Mortgagee and each Indemnified Person for, and to
hold Mortgagee and each such Indemnified Person harmless from, any and all
Losses which may or might be incurred by Mortgagee or any Indemnified Person by
reason of this Mortgage or the exercise of rights or remedies hereunder,
including such Losses as may result from the ordinary negligence of Mortgagee or
any Indemnified Person or which may result from strict liability, whether under
applicable law or otherwise, unless such Loss is caused by the gross negligence
or willful misconduct of Mortgagee or such Indemnified Person. WITHOUT
LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO MORTGAGEE AND EACH
INDEMNIFIED PERSON WITH RESPECT TO LOSSES WHICH IN WHOLE OR IN PART ARE CAUSED
BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF MORTGAGEE, SUCH INDEMNIFIED
PERSON OR ANY OTHER PERSON. Should Mortgagee or any Indemnified Person make any
expenditure on account of any such Losses, the amount thereof, including costs,
expenses and reasonable attorneys' fees, shall be a demand obligation (which
obligation Mortgagor hereby expressly promises to pay) owing by Mortgagor to
Mortgagee and shall be subject to the provisions of Section 8.07(b) hereof.
Mortgagor hereby assents to, ratifies and confirms any and all actions of
Mortgagee with respect to the Mortgaged Property taken under this Mortgage. This
Section 7.18 shall survive the termination of this Mortgage and the payment and
performance of the Obligations.

                                       25

<PAGE>

                                  ARTICLE VIII.

                                  MISCELLANEOUS

            SECTION 8.01 Instrument Construed as Mortgage, Etc. This Mortgage
may be construed as a mortgage, deed of trust, chattel mortgage, conveyance,
assignment, security agreement, pledge, Financing statement, hypothecation or
contract, or any one or more of them, in order to fully effectuate the liens and
security interests created hereby and the purposes and agreements set forth
herein.

            SECTION 8.02 Performance at Mortgagor's Expense. The cost and
expense of performing or complying with any and all of the Obligations shall be
borne solely by Mortgagor, and no portion of such cost and expense shall be, in
any way or to any extent, credited against any installment on or portion of the
Obligations.

            SECTION 8.03 Survival of Obligations. Each and all of the
Obligations shall survive the execution and delivery of this Mortgage and shall
continue in full force and effect until all of the Obligations shall have been
fully satisfied.

            SECTION 8.04 Further Assurances. Mortgagor, upon the request of
Mortgagee, shall execute, acknowledge, deliver and record and/or file such
further instruments, including Financing statements, and do such further acts as
may be reasonably necessary, desirable or proper to carry out more effectively
the purpose of this Mortgage and to subject to the Liens and security interests
hereof any property intended by the terms hereof to be covered hereby, including
any renewals, additions, substitutions, replacements, betterments or
appurtenances to the then Mortgaged Property.

            SECTION 8.05 Notices. All notices or other communications required
or permitted to be given pursuant to this Mortgage shall be in writing and shall
be considered properly given if given in the manner and to the addresses
prescribed by Section 11.02 of the Credit Agreement to the parties and at the
addresses set forth in the first paragraph of this Mortgage, and to each of the
parties to the Credit Agreement at the addresses set forth in Section 11.02
thereof. Any party shall have the right to change its address for notice
hereunder to any other location within the continental United States by the
giving of ten (10) days' notice to the other party in the manner set forth
above.

            SECTION 8.06 No Waiver. Any failure by Mortgagee to insist, or any
election by Mortgagee not to insist, upon strict performance by Mortgagor of any
of the terms, provisions or conditions of this Mortgage shall not be deemed to
be a waiver of the same or of any other terms, provision or condition hereof,
and Mortgagee shall have the right, at any time or times thereafter, to insist
upon strict performance by Mortgagor of any and all of such terms, provisions
and conditions. Mortgagee may, in Mortgagee's sole and absolute discretion, (i)
in the case of a Default, determine whether such Default has been cured, and
(ii) in the case of an Event of Default, accept or reject any proposed cure of
an Event of Default. In no event shall any provision of this Mortgage or any
other Loan Document which provides that Mortgagee shall have certain rights
and/or remedies only during the continuance of an Event of Default be construed
so as to require Mortgagee to accept a cure of any such Event of Default. Unless
and

                                       26

<PAGE>

until Mortgagee accepts any proposed cure of an Event of Default, such Event of
Default shall be deemed to be continuing for purposes of this Mortgage and the
other Loan Documents.

            SECTION 8.07 Mortgagee's Right to Perform; Mortgagee's Expenditures.

      (a) Mortgagor agrees that if Mortgagor fails to perform any act or take
any action which Mortgagor is required to perform or take hereunder or under the
Credit Agreement or to pay any money which Mortgagor is required to pay
hereunder or under the Credit Agreement, Mortgagee may, but shall not be
obligated to, perform or cause to be performed such act or take such action or
pay such money to the extent and only to the extent permitted under the Credit
Agreement.

      (b) All costs and expenses incurred by Mortgagee (or any Indemnified
Party), including, without limitation, attorneys fees and expenses, all monies
paid by (or on behalf of) Mortgagee and the monetary value of all services
performed by (or on behalf of Mortgagee) in connection with a Default or Event
of Default hereunder or under any other Loan Document, including, without
limitation, the (i) the enforcement of any term or provision of this Mortgage or
any other Loan Document, (ii) the performance by Mortgagee of any obligation of
Mortgagor under this Mortgage or any other Loan Document if Mortgagee elects to
so perform, in its sole and absolute discretion, and (iii) any action Mortgagee
elects to take, in its sole and absolute discretion, to protect its interest in
or the value of the Mortgaged Property, shall be a demand obligation owing by
Mortgagor to Mortgagee, as the case may be, and to the extent any payment is
made to a third Person, Mortgagee, upon making such payment, shall be subrogated
to all of the rights of the Person receiving such payment. All such costs and
expenses, monies and the monetary value of such services performed shall (x)
bear interest at the Default Rate from the date of such incurrence, payment or
performance, as applicable, until paid, and (y) (together with such interest)
constitute a portion of the Obligations and shall be secured by this Mortgage
and all of the other Loan Documents. If Mortgagee shall elect to pay any
Imposition or other sums due with reference to the Mortgaged Property, Mortgagee
may do so in reliance on any bill, statement or assessment procured from the
appropriate Governmental Authority or other issuer thereof.

            SECTION 8.08 Successors and Assigns. All of the terms hereof shall
apply to, be binding upon and inure to the benefit of the parties hereto, their
successors, assigns, heirs and legal representatives, and all other Persons
claiming by, through or under them; provided, however, that nothing herein shall
be deemed to imply any right on behalf of Mortgagor to assign its interest in
any of the Mortgaged Property except as may be expressly set forth in the Credit
Agreement.

            SECTION 8.09 Severability. This Mortgage is intended to be performed
in accordance with, and only to the extent permitted by, all applicable laws and
regulations of applicable Governmental Authorities and the provisions hereof are
intended to be limited to the extent necessary that they will not render this
Mortgage invalid, unenforceable or not entitled to be recorded, registered or
filed under the provisions of any applicable law. If any provision hereof or the
application thereof to any Person or circumstance shall, for any reason and to
any extent, be invalid or unenforceable, neither the remainder of this Mortgage
nor the application of

                                       27

<PAGE>

such provision to other Persons or circumstances shall be affected thereby, but
rather shall be enforced to the greatest extent permitted by applicable law.

            SECTION 8.10 Entire Agreement and Modification. This Mortgage may
not be amended, revised, waived, discharged, released or terminated orally, but
only by a written instrument or instruments executed by the party against which
enforcement of the amendment, revision, waiver, discharge, release or
termination is asserted. Any alleged amendment, revision, waiver, discharge,
release or termination which is not so documented shall not be effective as to
any party.

            SECTION 8.11 Applicable Law. THIS MORTGAGE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE IN WHICH THE
MORTGAGED PROPERTY IS LOCATED; PROVIDED, HOWEVER, THAT THE CREDIT AGREEMENT IS
AND EACH GUARANTY IS BY ITS TERMS, GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK AS PROVIDED THEREIN, AND, IN THE EVENT THAT IT BECOMES NECESSARY, IN
CONNECTION WITH THE ENFORCEMENT OF THIS MORTGAGE OR OTHERWISE, TO CONSTRUE OR
ENFORCE THE OBLIGATIONS (WHICH OBLIGATIONS ARE SECURED BY THIS MORTGAGE), THE
CREDIT AGREEMENT AND EACH GUARANTY SHALL BE CONSTRUED AND, ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.

            SECTION 8.12 Satisfaction of Prior Encumbrance. To the extent that
proceeds advanced pursuant to the Credit Agreement are used to pay indebtedness
secured by any outstanding Lien, security interest, charge or prior encumbrance
against the Mortgaged Property, such proceeds shall be deemed to have been
advanced by Mortgagee at Mortgagor's request, and Mortgagee shall be subrogated
to any and all rights, security interests and Liens owned by any owner or holder
of such outstanding Liens, security interests, charges or encumbrances,
irrespective of whether said Liens, security interests, charges or encumbrances
are released, and it is expressly understood that, in consideration of the
payment of such other indebtedness by Mortgagee, Mortgagor hereby waives and
releases all demands and causes of action for offsets and payments to, upon and
in connection with the said indebtedness.

            SECTION 8.13 No Partnership. Nothing contained in this Mortgage is
intended to, or shall be construed to, create to any extent and in any manner
whatsoever any partnership, joint venture, or association between Mortgagor and
Mortgagee, or in any way make Mortgagee a co-principal with Mortgagor with
reference to the Mortgaged Property, and any inferences to the contrary are
hereby expressly negated.

            SECTION 8.14 Headings. The Article, Section and Subsection headings
hereof are inserted for convenience of reference only and shall in no way alter,
modify or define, or be used in construing, the text of such Articles, Sections
or Subsections.

            SECTION 8.15 Release of Mortgage. If all of the Obligations shall be
paid, performed and discharged and the Credit Agreement is and each Guaranty is
terminated, Mortgagee shall forthwith cause satisfaction and discharge of this
Mortgage to be entered upon the record, at the sole cost and expense of
Mortgagor, and shall execute and deliver (or cause to

                                       28

<PAGE>

be executed and delivered) such instruments of satisfaction and discharge as may
be appropriate, such instruments to be duly acknowledged and in form for
recording, at the sole cost and expense of Mortgagor.

            SECTION 8.16 Limitation of Obligations with Respect to Mortgaged
Property.

      (a) Neither Mortgagee nor any Lender shall have any duty to protect or
preserve, or any liability with respect to the protection or preservation of,
any Mortgaged Property or to preserve rights pertaining thereto other than the
duty to use reasonable care in the custody and preservation of any Mortgaged
Property in its actual possession. Mortgagee shall be deemed to have exercised
reasonable care in the custody and preservation of any Mortgaged Property in its
possession if such Mortgaged Property is accorded treatment substantially equal
to that which Mortgagee accords its own like property. Mortgagee shall be
relieved of all responsibility for any Mortgaged Property in its possession upon
surrendering it, or tendering surrender of it, to Mortgagor or to such other
Person entitled thereto by applicable law.

      (b) Nothing contained in this Mortgage shall be construed as requiring or
obligating Mortgagee or any Lender, and neither Mortgagee nor any Lender shall
be required or obligated, to (i) make any demand or inquiry as to the nature or
sufficiency of any payment received by it, or present or file any claim or
notice or take any action with respect to any Mortgaged Property or the monies
due or to become due in connection therewith, (ii) ascertain or take action with
respect to calls, conversions, exchanges, maturities, tenders, offers or other
matters relating to any Mortgaged Property, whether or not Mortgagee or any of
the other Lenders has or is deemed to have knowledge or notice thereof, (iii)
take any necessary steps to preserve rights against any prior parties with
respect to any Mortgaged Property, or (iv) notify Mortgagor or any other Person
of any decline in the value of any Mortgaged Property.

            SECTION 8.17 Inconsistency with Credit Agreement. To the fullest
extent possible, the terms and provisions of the Credit Agreement shall be read
together with the terms and provisions of this Mortgage such that the terms and
provisions of this Mortgage shall supplement, rather than conflict with, the
terms and provisions of the Credit Agreement; provided, however, that,
notwithstanding the foregoing, in the event any of the terms or provisions of
this Mortgage conflict with any of the terms or provisions of the Credit
Agreement, such that it is impractical for such terms or provisions to coexist,
the terms or provisions of the Credit Agreement shall govern and control for all
purposes; and, provided further, that the inclusion in this Mortgage of terms
and provisions, supplemental rights or remedies in favor of a secured party but
which are not addressed in the Credit Agreement shall not be deemed to be a
conflict with the Credit Agreement and all such additional terms, provisions,
supplemental rights or remedies contained herein shall be given full force and
effect.

            SECTION 8.18 Limitation on Interest Payable. It is the intention of
the parties to conform strictly to the usury laws, whether state or federal,
that are applicable to the transaction of which this Mortgage is a part. All
agreements between Mortgagor and Mortgagee, or any Lender, whether now existing
or hereafter arising and whether oral or written, are hereby expressly limited
so that in no contingency or event whatsoever shall the amount paid or agreed to
be paid by Mortgagor for the use, forbearance or detention of the money to be
loaned under

                                       29

<PAGE>

the Credit Agreement or any other Loan Document, or for the payment or
performance of any covenant or obligation contained herein or in the Credit
Agreement or any other Loan Document, exceed the maximum amount permissible
under applicable federal or state usury laws. If, under any circumstances,
fulfillment of any such provision, at the time performance of such provision
shall be due, shall involve exceeding the limit of validity prescribed by
applicable law, then the obligation to be fulfilled shall be reduced to the
limit of such validity. If, under any circumstances, Mortgagor shall have paid
an amount of money which is deemed to be interest and such interest would exceed
the highest lawful rate, such amount that would be excessive interest under
applicable usury laws shall be applied to the reduction of the principal amount
owing in respect of the Obligations and not to the payment of interest, or if
such excessive interest exceeds the unpaid balance of principal and any other
amounts due hereunder, the excess shall be refunded to Mortgagor. All sums paid
or agreed to be paid for the use, forbearance or detention of the principal
under any extension of credit by Mortgagee (or any Lender) shall, to the extent
permitted by applicable law, and to the extent necessary to preclude exceeding
the limit of validity prescribed by applicable law, be amortized, prorated,
allocated and spread from the date of this Mortgage until payment in full of the
Obligations so that the actual rate of interest on account of such principal
amounts is uniform throughout the term hereof.

            SECTION 8.19 Covenants To Run With the Land. All of the grants,
representations, warranties, undertakings, covenants, terms, provisions and
conditions in this Mortgage shall run with the Land and shall apply to and bind
the successors and assigns of Mortgagor. If there shall be more than one
mortgagor, the covenants, representations and warranties made herein shall be
deemed to be joint and several.

            SECTION 8.20 Last Dollar. So long as the balance of the Obligations
exceeds the portion of the Obligations secured by this Mortgage, no payment on
account of the Obligations shall be deemed to be applied against or to reduce
the portion of the Obligations secured by this Mortgage, but shall, instead, be
deemed to be applied against only such portions of the Obligations that are not
secured by this Mortgage.

            SECTION 8.21 Defense of Claims. Mortgagor shall promptly notify
Mortgagee in writing of the commencement of any legal proceedings affecting
Mortgagor's title to the Mortgaged Property or Mortgagee's Lien on or security
interest in the Mortgaged Property, or any part thereof, and shall take all such
action, employing attorneys agreeable to Mortgagee, as may be necessary to
preserve Mortgagor's and Mortgagee's rights affected thereby. If Mortgagor fails
or refuses to adequately or vigorously, in the sole judgment of Mortgagee,
defend Mortgagor's or Mortgagee's rights to the Mortgaged Property, Mortgagee
may take such action on behalf of and in the name of Mortgagor and at
Mortgagor's expense. Moreover, Mortgagee may take (or cause its agents to take)
such independent action in connection therewith as they may in their discretion
deem proper, including, without limitation, the right to employ independent
counsel and to intervene in any suit affecting the Mortgaged Property. All
costs, expenses and attorneys' fees incurred by Mortgagee (or its agents)
pursuant to this Section 8.21 or in connection with the defense by Mortgagee of
any claims, demands or litigation relating to Mortgagor, the Mortgaged Property
or the transactions contemplated in this Mortgage shall be paid by Mortgagor on
demand, plus interest thereon from the date of the advance by Mortgagee until
reimbursement of Mortgagee at the Default Rate.

                                       30

<PAGE>

            SECTION 8.22 Exculpation Provisions. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS MORTGAGE; AND AGREES THAT IT
IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS MORTGAGE; THAT IT HAS
IN FACT READ THIS MORTGAGE AND IS FULLY INFORMED AND HAS FULL NOTICE AND
KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS MORTGAGE; THAT IT HAS
BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE
NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS MORTGAGE AND HAS RECEIVED THE
ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS MORTGAGE; AND THAT IT RECOGNIZES
THAT CERTAIN OF THE TERMS OF THIS MORTGAGE RESULT IN ONE PARTY ASSUMING THE
LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER
PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO AGREES AND
COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY
EXCULPATORY PROVISION OF THIS MORTGAGE ON THE BASIS THAT THE PARTY HAD NO NOTICE
OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT "CONSPICUOUS."

            SECTION 8.23 No Merger of Estates. So long as any part of the
Obligations remain unpaid, unperformed or undischarged, the fee, easement and
leasehold estates to the Mortgaged Property shall not merge but rather shall
remain separate and distinct, notwithstanding the union of such estates either
in Mortgagor, Mortgagee, any lessee, any third-party purchaser or otherwise.

            SECTION 8.24 Counterparts. This Mortgage may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
of which, taken together, shall be deemed to constitute one single instrument,
except that, to facilitate recordation, portions of Exhibit A hereto which
describe properties situated in counties other than the county in which this
Mortgage is to be recorded may be omitted.

            SECTION 8.25 Maturity Date. The latest Obligation secured by this
Mortgage matures on June ___, 2010.

                                   ARTICLE IX.

                            STATE SPECIFIC PROVISIONS

            SECTION 9.01 Application of Rents and Proceeds. Notwithstanding any
provision of this Mortgage (including, without limitation, Section 3.02(b),
Section 3.04, Section 7.06 and Section 7.16 hereof) to the contrary, all Rents
received from the Mortgaged Property shall be applied as follows:

      (1) to payment of all reasonable fees of the receiver approved by the
   court;

      (2) to payment of all tenant security deposits then owing to tenants under
   any of the Leases pursuant to the provisions of Minn. Stat. 504B.178, if
   applicable;

                                       31

<PAGE>

      (3) to payment of all prior or current real estate taxes and special
   assessments with respect to the Mortgaged Property, or the escrow payments
   then due;

      (4) to payment of all premiums then due for the insurance required by the
   provisions of this Mortgage, or to the escrow payments then due;

      (5) to payment of all expenses to perform the covenants of any lessor or
   licensee pursuant to Minn. Stat. 504B.161, subd. 1, if applicable;

      (6) to payment of expenses incurred for normal maintenance and operation
   of the Mortgaged Property;

      (7) prior to commencement of any foreclosure, to Mortgagee for payment of
   the indebtedness secured by this Mortgage in such order as Mortgagee may
   elect, but no such payment made after acceleration of the indebtedness shall
   affect such acceleration;

      (8) after commencement of any foreclosure, to Mortgagee for payment of the
   amount required to be paid to effect a reinstatement prior to the foreclosure
   sale, but no such payment made after acceleration of the indebtedness shall
   affect such acceleration; and

      (9) after a foreclosure sale, at the option of Mortgagee, in its sole
   discretion, to payment of any deficiency or to the amount required to be paid
   to effect a redemption, with any excess to be paid to Mortgagor; provided,
   however, that if this Mortgage is not reinstated nor the Mortgaged Property
   redeemed, the entire amount received pursuant hereto, after deducting the
   amounts, if any, applied by Mortgagee to any deficiency, shall be the
   property of the purchaser of the Mortgaged Property at the foreclosure sale.

The rights and powers of the Mortgagee under this Mortgage and the application
of Rents under this Section shall continue until expiration of the redemption
period from any foreclosure sale, whether or not any deficiency remains after a
foreclosure sale. A receiver appointed pursuant to this Mortgage shall apply all
Rents in accordance with this section from the date of appointment of such
receiver through the entire redemption period following the foreclosure sale.

            SECTION 9.02 WAIVER OF CONSTITUTIONAL RIGHTS. MORTGAGOR UNDERSTANDS
AND AGREES THAT IF AN "EVENT OF DEFAULT" (AS DEFINED IN THE CREDIT AGREEMENT)
SHALL OCCUR, MORTGAGEE HAS THE RIGHT, INTER ALIA, TO FORECLOSE THIS MORTGAGE BY
ADVERTISEMENT PURSUANT TO MINNESOTA STATUTES, CHAPTER 580, AS HEREAFTER AMENDED,
OR PURSUANT TO ANY SIMILAR OR REPLACEMENT STATUTE HEREAFTER ENACTED; THAT IF
MORTGAGEE ELECTS TO FORECLOSE BY ADVERTISEMENT, IT MAY CAUSE THE MORTGAGED
PROPERTY, OR ANY PART THEREOF, TO BE SOLD AT PUBLIC AUCTION; THAT NOTICE OF SUCH
SALE MUST BE PUBLISHED AND GIVEN PERSONALLY TO THE PERSONS IN POSSESSION OF THE
MORTGAGED PROPERTY AS PROVIDED BY STATUTE; THAT MORTGAGOR WILL HAVE SUCH PERIOD
AS IS PROVIDED BY MINNESOTA STATUTES, Sections 580.23 OR 582.032, AS APPLICABLE,
OR ANY AMENDMENT THERETO, OR ANY SIMILAR OR REPLACEMENT STATUTE HEREAFTER
ENACTED, TO REDEEM THE MORTGAGED

                                       32

<PAGE>

PROPERTY SO SOLD BY PAYING THE SALE PRICE, ANY TAXES, ASSESSMENTS AND INSURANCE
PREMIUMS PAID BY THE PURCHASER AT SUCH SALE, AND OTHER SUMS PERMITTED BY LAW,
TOGETHER WITH INTEREST THEREON FROM THE DATE OF SALE OR PAYMENT AT THE HIGHEST
RATE PERMITTED BY LAW.

MORTGAGOR FURTHER UNDERSTANDS THAT IN THE EVENT OF SUCH DEFAULT, MORTGAGEE MAY
TAKE POSSESSION OF THE MORTGAGED PROPERTY WHICH IS SUBJECT TO THE SECURITY
INTEREST HEREINBEFORE GRANTED AND DISPOSE OF THE SAME BY SALE OR OTHERWISE IN
ONE OR MORE PARCELS, PROVIDED THAT AT LEAST (10) DAYS' PRIOR NOTICE OF SUCH
DISPOSITION MUST BE GIVEN TO MORTGAGOR, ALL AS PROVIDED FOR BY THE MINNESOTA
UNIFORM COMMERCIAL CODE, AS HEREAFTER AMENDED, OR BY ANY SIMILAR OR REPLACEMENT
STATUTE HEREAFTER ENACTED.

MORTGAGOR FURTHER UNDERSTANDS THAT UNDER THE CONSTITUTION OF THE UNITED STATES
IT MAY HAVE THE RIGHT TO NOTICE AND HEARING BEFORE THE MORTGAGED PROPERTY MAY BE
SOLD AND THAT THE PROCEDURE FOR FORECLOSURE BY ADVERTISEMENT DESCRIBED ABOVE
DOES NOT INSURE THAT NOTICE WILL BE GIVEN TO MORTGAGOR, AND NEITHER SAID
PROCEDURE FOR FORECLOSURE BY ADVERTISEMENT NOR THE MINNESOTA UNIFORM COMMERCIAL
CODE REQUIRES ANY HEARING OR OTHER JUDICIAL PROCEEDING.

MORTGAGOR HEREBY RELINQUISHES, WAIVES AND GIVES UP ANY CONSTITUTIONAL RIGHTS TO
NOTICE AND HEARING BEFORE SALE OF THE MORTGAGED PROPERTY AND EXPRESSLY CONSENTS
AND AGREES THAT THE MORTGAGED PROPERTY MAY BE FORECLOSED BY ADVERTISEMENT AND
THAT THE PORTION THEREOF WHICH IS SUBJECT TO THE SECURITY INTEREST HEREINBEFORE
GRANTED MAY BE DISPOSED OF PURSUANT TO THE UNIFORM COMMERCIAL CODE, ALL AS
DESCRIBED ABOVE.

MORTGAGOR ACKNOWLEDGES THAT IT IS REPRESENTED BY LEGAL COUNSEL; THAT BEFORE
SIGNING THIS DOCUMENT THIS SECTION AND ITS CONSTITUTIONAL RIGHTS WERE FULLY
EXPLAINED BY SUCH COUNSEL AND THAT IT UNDERSTANDS THE NATURE AND EXTENT OF THE
RIGHTS WAIVED HEREBY AND THE EFFECT OF SUCH WAIVER.

            SECTION 9.03 Wells and Sewer Systems. Mortgagor does not know of any
wells (as defined by Minnesota Statutes Section 103I.005, Subd. 21, as amended)
on the Land, nor of any individual sewage systems (within the meaning of
Minnesota Statutes Section 115.55, Subd. 1(g)) on or serving the Land.

            SECTION 9.04 Future Advances. The maximum principal amount of
indebtedness secured by this Mortgage at any one time, excluding advances made
by Mortgagee in protection of the Mortgaged Property or the lien of this
Mortgage, shall be $10,920,000. To the extent that this Mortgage secures future
advances, the amount of such advances is not currently known. The acceptance of
this Mortgage by Mortgagee, however, constitutes an acknowledgment that
Mortgagee is aware of the provisions of Minnesota Statutes Section 287.05,

                                       33

<PAGE>

Subd. 5, and intends to comply with the requirements contained therein. The
representations contained in this Section are made solely for the benefit of the
county recording authorities in determining the mortgage registry tax payable as
a prerequisite to the recording of this Mortgage. Mortgagor acknowledges that
such representations do not constitute or imply an agreement by Mortgagee to
make any future advances to Mortgagor.

                  [Remainder of Page Intentionally Left Blank.]

                                       34

<PAGE>

      IN WITNESS WHEREOF, Mortgagor has executed this Mortgage as of the date
first above written.

                                MORTGAGOR:

                                LAKES ENTERTAINMENT, INC.,
                                a Delaware limited liability company

                                By: /s/ Timothy J. Cope
                                    --------------------------------------
                                    Name: Timothy J. Cope
                                    Title: President and Chief Financial Officer

<PAGE>

                                 ACKNOWLEDGEMENT

STATE OF NEW YORK   )
                    ) ss:
COUNTY OF NEW YORK  )

      The foregoing instrument was acknowledged before me this 22nd day of
June, 2006, by Timothy J. Cope, as Chief Financial Officer of Lakes
Entertainment, Inc., a Minnesota corporation, on behalf of the corporation.

                                            /s/  Thomas W. Caplis
                                       --------------------------------------
                                       Notary Public

                                       My Commission Expires: _______________

                                              [NOTARY PUBLIC STAMP]

<PAGE>

                                    EXHIBIT A

                                LEGAL DESCRIPTION

Lot 1, Block 1, Carlson Center East, Hennepin County, Minnesota.

Together with the benefits and easements created in Declaration of Easements and
Covenants dated December 18, 1996, filed December 20, 1996, as Document No.
2771390 and as amended by that certain First Amendment to the Declaration of
Easements and Covenants dated March 25, 1998, filed April 14, 1998 as Document
No. 3009312.

Together with the rights and easements created under the terms of that certain
Water Main Easement dated March 26, 1999, filed April 5, 1999, as Document No.
3141558.

Torrens Property
Certificate of Title No. 1077389

                                      A-1<PAGE>

                                                                    EXHIBIT 10.6

THIS DEED OF TRUST WAS PREPARED BY
AND WHEN RECORDED, RETURN TO:

Latham & Watkins LLP
885 Third Avenue
New York, New York  10022
Attention:  Elizabeth Jaffe, Esq.
Reference No.:  024819 0034

                 DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
                      SECURITY AGREEMENT AND FIXTURE FILING

                                     made by

                          LAKES GAMING-MISSISSIPPI, LLC
                                    (TRUSTOR)

                                       to

                              B. BLAKE TELLER, ESQ.
                                    (TRUSTEE)

                               for the benefit of

                              BANK OF AMERICA, N.A.
                                  (BENEFICIARY)

                               PROPERTY LOCATION:

                              Highway 61, Vicksburg
                           Warren County, Mississippi

                           DATED AS OF JUNE 22, 2006

      THIS ALSO CONSTITUTES FINANCING STATEMENTS FILED AS A FIXTURE FILING AND
FINANCING STATEMENT PURSUANT TO SECTIONS 9501(A)(1) AND 9502(B) AND (C) OF THE
MISSISSIPPI UNIFORM COMMERCIAL CODE AND IS RECORDED AS A FIXTURE FILING

THIS DEED OF TRUST SECURES A LINE OF CREDIT TO BE ADVANCED AND USED FOR BUSINESS
                            AND COMMERCIAL PURPOSES

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                     PAGE
                                                                                                                     ----
<S>                                                                                                                  <C>
ARTICLE I DEFINITIONS............................................................................................      2
         SECTION 1.01      Terms Defined Above...................................................................      2
         SECTION 1.02      Definitions...........................................................................      2
         SECTION 1.03      Terminology...........................................................................      5
         SECTION 1.04      Other Defined Terms...................................................................      6

ARTICLE II GRANT OF LIEN AND SECURITY INTEREST...................................................................      6
         SECTION 2.01      Grant of Lien.........................................................................      6
         SECTION 2.02      Grant of Security Interest............................................................      6
         SECTION 2.03      No Obligation of Beneficiary..........................................................      7
         SECTION 2.04      Fixture Filing........................................................................      7
         SECTION 2.05      Future Advances.......................................................................      7
         SECTION 2.06      Intentionally Omitted.................................................................      7

ARTICLE III ASSIGNMENT OF LEASES AND RENTS.......................................................................      7
         SECTION 3.01      Assignment............................................................................      7
         SECTION 3.02      Revocable License.....................................................................      8
         SECTION 3.03      Enforcement of Leases.................................................................      8
         SECTION 3.04      Direction to Tenants..................................................................      9
         SECTION 3.05      Appointment of Attorney-in-Fact.......................................................      9
         SECTION 3.06      No Liability of Beneficiary...........................................................     10
         SECTION 3.07      Trustor's Indemnities.................................................................     10
         SECTION 3.08      No Modification of Trustor's Obligations..............................................     10
         SECTION 3.09      Rights in Bankruptcy..................................................................     11
         SECTION 3.10      Right to Enforce Under California Civil Code Section 2938.............................     11

ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................................     11
         SECTION 4.01      Title to Trust Property and Lien of this Deed of Trust................................     11
         SECTION 4.02      Taxes and Other Payments..............................................................     12
         SECTION 4.03      Power to Create Lien and Security.....................................................     12
         SECTION 4.04      Loan and Credit Agreements............................................................     12
         SECTION 4.05      Compliance with Laws..................................................................     12
         SECTION 4.06      No Condemnation.......................................................................     12
         SECTION 4.07      Flood Zone............................................................................     13
         SECTION 4.08      Additional Environmental Representation...............................................     13

ARTICLE V AFFIRMATIVE COVENANTS..................................................................................     13
         SECTION 5.01      Lien Status...........................................................................     13
         SECTION 5.02      Payment of Impositions................................................................     13
         SECTION 5.03      Repair................................................................................     14
         SECTION 5.04      Insurance and Application of Insurance Proceeds.......................................     14
         SECTION 5.05      Condemnation and Application of Condemnation Proceeds.................................     16
</TABLE>

                                        i

<PAGE>

<TABLE>
<S>                                                                                                                  <C>
         SECTION 5.06      Maintenance of Rights of Way, Easements, Licenses and Other Rights....................     17
         SECTION 5.07      Payment and Performance of Obligations................................................     17
         SECTION 5.08      Compliance with Permitted Liens and Other Obligations.................................     17
         SECTION 5.09      Additional Affirmative Covenants......................................................     18

ARTICLE VI NEGATIVE COVENANTS....................................................................................     18
         SECTION 6.01      Use Violations........................................................................     18
         SECTION 6.02      Waste.................................................................................     18
         SECTION 6.03      Alterations...........................................................................     18
         SECTION 6.04      No Further Encumbrances...............................................................     18
         SECTION 6.05      Transfer Restrictions.................................................................     18
         SECTION 6.06      Loan and Credit Agreements; Additional Negative Covenants.............................     18

ARTICLE VII EVENTS OF DEFAULT AND REMEDIES.......................................................................     19
         SECTION 7.01      Event of Default......................................................................     19
         SECTION 7.02      Acceleration..........................................................................     19
         SECTION 7.03      Foreclosure and Sale..................................................................     19
         SECTION 7.04      Trustee's Successors, Substitutes and Agents..........................................     20
         SECTION 7.05      Receivership..........................................................................     20
         SECTION 7.06      Judicial Foreclosure..................................................................     21
         SECTION 7.07      Separate Sales........................................................................     21
         SECTION 7.08      Possession of Trust Property..........................................................     21
         SECTION 7.09      Occupancy After Foreclosure...........................................................     22
         SECTION 7.10      Remedies Cumulative, Concurrent and Nonexclusive......................................     22
         SECTION 7.11      No Release of Obligations.............................................................     22
         SECTION 7.12      Release of and Resort to Collateral...................................................     23
         SECTION 7.13      Waiver of Redemption, Notice and Marshalling of Assets................................     23
         SECTION 7.14      Discontinuance of Proceedings.........................................................     23
         SECTION 7.15      Application of Proceeds...............................................................     23
         SECTION 7.16      Uniform Commercial Code Remedies......................................................     24
         SECTION 7.17      Indemnity.............................................................................     24
         SECTION 7.18      Waiver of Lien........................................................................     24
         SECTION 7.19      Action for Environmental Claims.......................................................     24

ARTICLE VIII TRUSTEE.............................................................................................     25
         SECTION 8.01      Duties, Rights, and Powers of Trustee.................................................     25
         SECTION 8.02      Successor Trustee.....................................................................     25
         SECTION 8.03      Retention of Moneys...................................................................     26
         SECTION 8.04      Reconveyance..........................................................................     26

ARTICLE IX MISCELLANEOUS.........................................................................................     26
         SECTION 9.01      Instrument Construed as Deed of Trust, Etc............................................     26
         SECTION 9.02      Performance at Trustor's Expense......................................................     26
         SECTION 9.03      Survival of Obligations...............................................................     26
         SECTION 9.04      Further Assurances....................................................................     26
         SECTION 9.05      Notices...............................................................................     26
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                                                                  <C>
         SECTION 9.06      No Waiver.............................................................................     27
         SECTION 9.07      Beneficiary's Right to Perform; Beneficiary's Expenditures............................     27
         SECTION 9.08      Successors and Assigns................................................................     28
         SECTION 9.09      Severability..........................................................................     28
         SECTION 9.10      Subrogation of Trustee................................................................     28
         SECTION 9.11      Entire Agreement and Modification.....................................................     28
         SECTION 9.12      Applicable Law........................................................................     28
         SECTION 9.13      Satisfaction of Prior Encumbrance.....................................................     29
         SECTION 9.14      No Partnership........................................................................     29
         SECTION 9.15      Headings..............................................................................     30
         SECTION 9.16      Release of Deed of Trust..............................................................     30
         SECTION 9.17      Limitation of Obligations with Respect to Trust Property..............................     30
         SECTION 9.18      Inconsistency with Credit Agreement...................................................     30
         SECTION 9.19      Limitation on Interest Payable........................................................     31
         SECTION 9.20      Covenants To Run With the Land........................................................     31
         SECTION 9.21      Amount Secured; Last Dollar...........................................................     31
         SECTION 9.22      Defense of Claims.....................................................................     31
         SECTION 9.23      Exculpation Provisions................................................................     32
         SECTION 9.24      No Merger of Estates..................................................................     32
         SECTION 9.25      Suretyship Waivers....................................................................     32
         SECTION 9.26      Beneficiary Statement.................................................................     32
         SECTION 9.27      Request for Notice....................................................................     32
         SECTION 9.28      Release and Reconveyance..............................................................     32

EXHIBIT A  -  LEGAL DESCRIPTION
</TABLE>

                                      iii

<PAGE>

                 DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
                      SECURITY AGREEMENT AND FIXTURE FILING

      THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND
FIXTURE FILING (hereinafter, together with any and all amendments, supplements,
modifications or restatements of any kind, referred to as this "Deed of Trust"),
is made as of June 22, 2006, by LAKES GAMING-MISSISSIPPI, LLC, a Minnesota
limited liability company ("Trustor"), having its principal place of business at
c/o Lakes Entertainment, Inc., 130 Cheshire Lane, Suite 101, Minnetonka,
Minnesota 55309, Attention: Damon E. Schramm, Esq., to B. Blake Teller, Esq., an
individual, with an address at c/o Teller, Chaney, Hassell & Hopson, LLP,
Nogales Building, 1201 Cherry Street, Vicksburg, MS 39183 (including any
successor trustee at the time acting as such hereunder, "Trustee"), for the
benefit of BANK OF AMERICA, N.A., having its principal place of business at 100
N. Tyron Street, Charlotte, North Carolina 28255-0001, Attention: Douglas Jones
(in such capacity, together with its successors and assigns, "Beneficiary"), for
itself and in its capacity of Administrative Agent ("Administrative Agent") for
each of the financial institutions and their respective successors and assigns
which from time to time shall be a "Lender" under the Credit Agreement (as
hereinafter defined).

                                R E C I T A L S:

            WHEREAS, Trustor, a subsidiary of Parent, as hereinafter defined, is
the owner and holder of fee simple title in and to the Land (as hereinafter
defined) described on Exhibit A attached hereto and made a part hereof;

            WHEREAS, on the date hereof, Trustor, Lakes Entertainment, Inc.
("Parent"), Lakes Gaming and Resorts, LLC ("Borrower") and the Guarantors (as
defined in the Credit Agreement) entered into that certain Credit Agreement with
Beneficiary, the Lenders party thereto and Banc of America Securities LLC, as
sole lead arranger and sole book manager (as the same may be amended, modified
or otherwise supplemented and in effect from time to time, the "Credit
Agreement"), pursuant to which the Lenders agreed to extend to Borrower a
certain senior secured term loan facility in the aggregate original principal
amount of up to ONE HUNDRED AND FIVE MILLION and 00/100 Dollars
($105,000,000.00) (the "Loan");

            WHEREAS, Trustor will derive direct economic benefit from the Loan;

            WHEREAS, as a condition to Beneficiary executing the Credit
Agreement, Beneficiary is requiring that Trustor grant to Beneficiary, on behalf
of the Lenders, a security interest in and a first deed of trust lien upon the
Trust Property (as hereinafter defined), to secure (a) the payment of all of the
obligations of Trustor under the Credit Agreement, this Deed of Trust, and the
other Loan Documents (as hereinafter defined), and (b) the performance by
Trustor of all terms, covenants, conditions, provisions, agreements and
liabilities contained in the Credit Agreement, this Deed of Trust, and the other
Loan Documents.

                                       1
<PAGE>

            NOW, THEREFORE, in order to comply with the terms and conditions of
the Credit Agreement and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Trustor hereby agrees with
Beneficiary as follows:

                                    ARTICLE I

                                   DEFINITIONS

            SECTION 1.01 Terms Defined Above. As used in this Deed of Trust, the
terms defined in the introductory paragraph to this Deed of Trust and in the
Recitals set forth above shall have the meanings respectively assigned to them
above.

            SECTION 1.02 Definitions. As used herein, the following terms shall
have the following meanings:

            "Applicable UCC" means the Uniform Commercial Code as presently in
effect in the State or Commonwealth where the Trust Property is located.

            "Bankruptcy Code" means the United States Bankruptcy Code (11 U.S.C.
Section. 101, et. seq.), as amended, and any successor statute.

            "Buildings" means any and all buildings, structures, garages,
utility sheds, workrooms, air conditioning towers, open parking areas and other
improvements, and any and all additions, alterations, betterments or
appurtenances thereto, now or at any time hereafter situated, placed or
constructed upon the Land or any part thereof.

            "Default" has the meaning assigned to such term in the Credit
Agreement.

            "Default Rate" has the meaning assigned to such term in the Credit
Agreement.

            "Event of Default" has the meaning assigned to such term in Section
7.01 hereof.

            "Fixtures" means all materials, supplies, equipment, apparatus and
other items now or hereafter acquired by Trustor and incorporated into the Trust
Property so as to constitute fixtures under the laws of the state in which such
items are located.

            "Governmental Authority" has the meaning assigned to such term in
the Credit Agreement.

            "Governmental Requirements" means any and all present and future
judicial decisions, statutes, rulings, rules, regulations, permits, certificates
or ordinances of any Governmental Authority in any way applicable to Trustor or
the Trust Property, including the ownership, use, occupancy, possession,
operation, maintenance, alteration, repair or reconstruction thereof.

            "Impositions" means any and all real estate and personal property
taxes; water, gas, sewer, electricity and other utility rates and charges;
charges for any easement, license or agreement maintained for the benefit of the
Trust Property; any and all other taxes, charges and

                                       2
<PAGE>

assessments, whether general or special, ordinary or extraordinary, foreseen or
unforeseen, of any kind and nature whatsoever which at any time prior to or
after the execution hereof may be assessed, levied or imposed upon the Trust
Property or the ownership, use, occupancy, benefit or enjoyment thereof,
together with any interest, costs or penalties that may become payable in
connection therewith.

            "Indemnified Parties" means, with respect to any Person entitled to
the benefit of an indemnity, such Person's officers, directors, shareholders,
partners, members, managers, employees, agents, representatives, attorneys,
accountants and experts. The term "Indemnified Party" means any one of such
Persons.

            "Indemnitees" has the meaning assigned to such term in the Credit
Agreement.

            "Land" means the real property or interest therein described in
Exhibit A attached hereto, and all rights, titles and interests appurtenant
thereto.

            "Leases" means any and all leases, master leases, subleases,
licenses, concessions or other agreements (whether written or oral, and whether
now or hereafter in effect) which grant to third Persons a possessory interest
in and to, or the right to use, all or any part of the Land, the Buildings, the
Fixtures and/or the Personalty, together with all security and other deposits
made in connection therewith and any guarantee of the obligations of the
landlord or the tenant thereunder.

            "License" has the meaning assigned to such term in Section 3.02(a)
hereof.

            "Lien" has the meaning assigned to such term in the Credit
Agreement.

            "Loan Documents" means, collectively, the Credit Agreement, this
Deed of Trust, and all other instruments, agreements and other documents
executed and delivered pursuant hereto or thereto or otherwise included in the
definition of the term "Loan Documents" in the Credit Agreement.

            "Losses" means all obligations, damages, claims, causes of action,
costs, fines, fees, charges, penalties, deficiencies, losses, diminutions in
value, expenses (including court costs, fees and expenses of attorneys,
accountants, consultants and other experts) and other liabilities, and, with
respect to any indemnity, includes all attorneys' fees, costs and expenses in
connection with the enforcement and collection of such indemnity. The term
"Loss" means any one of such Losses.

            "Trust Property" means all of Trustor's right, title, interest and
estate, whether now owned or hereafter acquired, in and to the Land, the
Buildings, the Fixtures and the Personalty, together with:

            (i)   all rights, privileges, tenements, hereditaments,
                  rights-of-way, easements, air rights, development rights or
                  credits, zoning rights, appendages and appurtenances in
                  anywise appertaining thereto, and all right, title and
                  interest of Trustor in and to any streets, ways, alleys,
                  strips or gores of land adjoining the Land or any part
                  thereof, and all right, title and interest

                                       3
<PAGE>

                  of Trustor, if any, in and to all rights, royalties and
                  profits with respect to all minerals, coal, oil, gas and other
                  substances of any kind or character on or underlying the Land,
                  together with all right, title and interest of Trustor in and
                  to all water and water rights (whether riparian, appropriative
                  or otherwise and whether or not appurtenant);

            (ii)  all rights of Trustor (but not its obligations) under any
                  contracts and agreements, including, without limitation,
                  construction contracts and architectural agreements, relating
                  to the Land, the Buildings, the Fixtures or the Personalty;

            (iii) all of Trustor's right, title and interest in and to all
                  permits, licenses, franchises, certificates, authorizations,
                  consents, approvals and other rights and privileges (each, a
                  "Permit") obtained in connection with the Land, the Buildings,
                  the Fixtures or the Personalty or the use or operation
                  thereof;

            (iv)  all of Trustor's right, title and interest in and to all plans
                  and specifications, designs, schematics, drawings and other
                  information, materials and matters heretofore or hereafter
                  prepared relating to the Land, the Buildings, the Fixtures or
                  the Personalty;

            (v)   all of Trustor's right, title and interest in and to all
                  proceeds arising from or by virtue of the sale, lease or other
                  disposition of the Land, the Buildings, the Fixtures or the
                  Personalty or any part thereof or any interest therein or from
                  the operation thereof;

            (vi)  all of Trustor's right, title and interest in and to all
                  Leases now or hereafter in effect and all Rents, royalties,
                  bonuses, issues, profits, revenues or other benefits arising
                  from or attributable to the Land, the Buildings, the Fixtures
                  or the Personalty;

            (vii) all of Trustor's right, title and interest in and to all
                  betterments, additions, alterations, appurtenances,
                  substitutions, replacements and revisions to the Land, the
                  Buildings, the Fixtures or the Personalty and all reversions
                  and remainders relating thereto;

            (viii) all of Trustor's right, title and interest in and to any
                  awards, remuneration, settlements or compensation now or
                  hereafter made by any Governmental Authority pertaining to the
                  Land, the Buildings, the Fixtures or the Personalty, including
                  those arising from or attributable to any vacation of, or
                  change of grade in, any streets affecting the Land or the
                  Buildings;

            (ix)  all of Trustor's right, title and interest in and to any and
                  all other security and collateral of any nature whatsoever,
                  whether now or hereafter given, for the repayment, performance
                  and discharge of the Obligations (as hereinafter defined);

                                       4
<PAGE>

            (x)   all of Trustor's right, title and interest in and to all
                  awards, payments and proceeds of conversion, whether voluntary
                  or involuntary, of any of the Land, the Buildings, the
                  Fixtures, the Personalty or any of the property and rights
                  described in the foregoing clauses (i) through (ix), including
                  without limitation, all insurance, condemnation and tort
                  claims, refunds of real estate taxes and assessments, rent
                  claims and other obligations dischargeable in cash or cash
                  equivalents; and

            (xi)  all other property and rights of Trustor of every kind and
                  character relating to and/or used or to be used in connection
                  with the foregoing, and all proceeds and products of any of
                  the foregoing.

As used in this Deed of Trust, the term "Trust Property" shall be expressly
defined as meaning all or, where the context permits or requires, any portion of
the above, and all or, where the context permits or requires, any interest
therein.

            "Obligations" has the meaning assigned to such term in the Credit
Agreement.

            "Permitted Liens" has the meaning assigned to such term in the
Credit Agreement.

            "Person" has the meaning assigned to such term in the Credit
Agreement.

            "Personalty" means all of Trustor's right, title and interest in and
to all furniture, furnishings, equipment, machinery, goods, general intangibles,
money, insurance proceeds, contract rights, option rights, inventory, together
with all refundable, returnable or reimbursable fees, deposits or other funds or
evidences of credit or indebtedness deposited by or on behalf of Trustor with
any Governmental Authority, boards, corporations, providers of utility services,
public or private, including all refundable, returnable or reimbursable tap
fees, utility deposits, commitment fees and development costs, and all other
personal property (other than Fixtures) of any kind or character), and including
such property that is now or hereafter located or to be located upon, within or
about the Land and the Buildings, or which are or may be used in or related to
the planning, development, financing or operation of the Trust Property,
together with all accessories, replacements and substitutions thereto or
therefor and the proceeds thereof.

            "Principal Balance" has the meaning assigned to such term in Section
7.02 hereof.

            "Rents" means all of the rents, revenues, income, proceeds, issues,
profits, security and other types of deposits (after Trustor acquires title
thereto), and other benefits paid or payable by parties (other than Trustor) for
using, leasing, licensing, possessing, operating from, residing in, benefiting
from or otherwise enjoying all or any part of the Land, the Buildings, the
Fixtures and/or the Personalty.

            SECTION 1.03 Terminology. Except as otherwise provided herein:

            (a) references to Articles and Sections shall mean the corresponding
Article or Section of this Deed of Trust;

                                       5
<PAGE>

            (b) words used herein in the singular, where the context so permits,
shall be deemed to include the plural and vice versa, and the definitions of
words used in the singular herein shall apply to such words when used in the
plural where the context so permits and vice versa;

            (c) the words "herein," "hereof," "hereunder," and other words of
similar import when used in this Deed of Trust refer to this Deed of Trust as a
whole, and not to any particular Article or Section; and

            (d) the words "includes" or "including" mean includes or including,
without limitation.

            SECTION 1.04 Other Defined Terms. Any capitalized term used in this
Deed of Trust and not otherwise defined herein shall have the meaning assigned
to such term in the Credit Agreement.

                                   ARTICLE II

                       GRANT OF LIEN AND SECURITY INTEREST

            SECTION 2.01 Grant of Lien. To secure the full and timely payment,
performance and discharge of all of the Obligations, Trustor hereby irrevocably
GRANTS, BARGAINS, SELLS, ASSIGNS, TRANSFERS and CONVEYS unto Trustee and
Trustee's successors, assigns and substitutes in trust hereunder, WITH POWER OF
SALE and right of entry and possession, for the use and benefit of Beneficiary,
in its capacity as Administrative Agent for the Lenders, the real and personal
property, right, title, interest and estate in, to and under the Trust Property,
subject, however, to the Permitted Liens; TO HAVE AND TO HOLD the Trust Property
unto Trustee and Trustee's successors, assigns and substitutes in trust
hereunder, subject to the terms and conditions of this Deed of Trust, with POWER
OF SALE, forever, and Trustor does hereby bind itself, its successors and
assigns to WARRANT AND FOREVER DEFEND the title to the Trust Property unto
Beneficiary against every Person whomsoever lawfully claiming or to claim the
same or any part, subject, however, to the Permitted Liens; provided, however,
that if Trustor shall pay (or cause to be paid) and perform and discharge (or
cause to be performed and discharged) all of the Obligations on or before the
date on which the same are to be paid, performed and discharged, then the Liens
estates and rights granted by this Deed of Trust shall cease and terminate.

            SECTION 2.02 Grant of Security Interest. This Deed of Trust shall
also constitute and serve as a "security agreement" within the meaning of, and
shall constitute a first and prior security interest under, the Applicable UCC
with respect to the Personalty and the Fixtures. To this end, Trustor by these
presents does GRANT, BARGAIN, CONVEY, ASSIGN, SELL, TRANSFER and SET OVER unto
Beneficiary, as Administrative Agent for the Lenders pursuant to the Credit
Agreement, a security interest in all of Trustor's right, title and interest in,
to and under the Personalty and the Fixtures, to secure the full and timely
payment, performance and discharge of the Obligations. Trustor hereby consents
to Beneficiary filing and recording financing statements (and continuations
thereof) with the appropriate filing and recording offices in order to perfect
(and maintain the perfection of) the security interests granted herein.

                                       6
<PAGE>

            SECTION 2.03 No Obligation of Beneficiary. The assignment and
security interest herein granted to Beneficiary shall not be deemed or construed
to constitute Beneficiary as a mortgagee-in-possession of the Trust Property,
obligate Beneficiary to lease the Trust Property or attempt to do the same, or
to take any action, incur any expense or perform or discharge any obligation,
duty or liability whatsoever.

            SECTION 2.04 Fixture Filing. Without in any manner limiting the
generality of any of the other provisions of this Deed of Trust: (a) some
portions of the goods described or to which reference is made herein are or are
to become fixtures on the Land described or to which reference is made herein or
on Exhibit A attached to this Deed of Trust; (b) this Deed of Trust is to be
filed of record in the real estate records as a financing statement and shall
constitute a "fixture filing" for purposes of the Applicable UCC; and (c)
Trustor is the record owner of the real estate or interests in the real estate
constituting the Trust Property hereunder. Information concerning the security
interest herein granted may be obtained at the addresses set forth on the first
page hereof. The addresses of the Secured Party (Beneficiary) and of the Debtor
(Trustor) are set forth on the first page hereof. In that regard, the following
information is provided:

            Name of Debtor:        LAKES GAMING-MISSISSIPPI, LLC

            Type of Organization:  limited liability company

            State:                 Minnesota

            FEIN:                  20-2053431

            Organizational ID Number: 1011317-2

            SECTION 2.05 Future Advances. It is the intention of Trustor and
Beneficiary that this Deed of Trust shall secure future advances and
readavances, and the lien and security interest created by this Deed of Trust
shall attach upon execution and have priority from the time of recording as to
all advances, whether obligatory or discretionary, until this Deed of Trust is
released of record.

                                  ARTICLE III

                         ASSIGNMENT OF LEASES AND RENTS

            SECTION 3.01 Assignment. For Ten Dollars ($10.00) and other good and
valuable consideration, including the indebtedness evidenced by the Credit
Agreement, the receipt and sufficiency of which are hereby acknowledged and
confessed, Trustor has presently, absolutely and irrevocably GRANTED, ASSIGNED,
TRANSFERRED and CONVEYED, and by these presents does presently, absolutely and
irrevocably GRANT, ASSIGN, TRANSFER and CONVEY, unto Beneficiary, as
Administrative Agent for the Lenders pursuant to the Credit Agreement, as
security for the payment, performance and discharge of the Obligations, all of
the Leases and Rents (if any), subject only to the Permitted Liens applicable
thereto and the License (as hereinafter defined); provided, however, that if
Trustor shall pay (or cause to be paid) and perform and discharge (or cause to
be performed and discharged) all of the Obligations on or before the date on
which the same are to be paid, performed and discharged, then this assignment

                                       7
<PAGE>

shall terminate, and all rights, titles and interests conveyed pursuant to this
assignment shall become vested in Trustor.

            SECTION 3.02 Revocable License.

            (a) Beneficiary hereby grants to Trustor a revocable license (the
"License"), nonexclusive with the rights of Beneficiary reserved in Sections
3.02(b), 3.04, and 3.05 hereof, to exercise and enjoy all incidences of the
status of a lessor under the Leases and the Rents, including, without
limitation, the right to collect, demand, sue for, attach, levy, recover and
receive the Rents and to give proper receipts, releases and acquittances
therefor. Trustor hereby agrees to receive all Rents and hold the same as a
trust fund to be applied, and to apply the Rents so collected, except to the
extent otherwise provided in the Credit Agreement, first to the payment,
performance and discharge of the Obligations and then to the payment of the
Impositions. Thereafter, Trustor may use the balance of the Rents collected in
any manner not inconsistent with the Loan Documents.

            (b) If an Event of Default shall occur and be continuing, the
License shall immediately and automatically terminate without the necessity of
any action by Beneficiary or any other Person, and Beneficiary shall have the
right in such event to exercise the rights and remedies provided under this Deed
of Trust or otherwise available to Beneficiary under applicable law. Upon demand
by Beneficiary at any time that an Event of Default shall have occurred, Trustor
shall promptly pay to Beneficiary all security deposits under the Leases and all
Rents allocable to any period commencing from and after the occurrence of such
Event of Default. Any Rents received hereunder by Beneficiary shall be applied
and disbursed to the payment, performance and discharge of the Obligations,
subject to the terms of the Credit Agreement; provided, however, that, subject
to any applicable requirement of law, any security deposits actually received by
Beneficiary shall be held, applied and disbursed as provided in the applicable
Leases.

            SECTION 3.03 Enforcement of Leases. Trustor shall (a) submit any and
all proposed Leases (including subleases provided to Trustor for approval) to
Beneficiary for approval prior to the execution thereof or consent thereto, as
applicable; (b) duly and punctually perform and comply with any and all
representations, warranties, covenants and agreements expressed as binding upon
the lessor under any Lease; (c) maintain each Lease in full force and effect
during the term thereof; (d) provide Beneficiary with prompt notice of each
notice of default sent to a tenant under a Lease, provide Beneficiary with
prompt notice of each notice of default received from (or relating to) a tenant
under a Lease, and otherwise promptly reasonably indicate that a material
default or termination of a Lease may occur (other than by reason of the
expiration of the term of such Lease); (e) appear in and defend any action or
proceeding in any manner connected with any of the Leases; (f) deliver to
Beneficiary true and complete copies of all Leases; and (g) deliver to
Beneficiary all such further information, and execute and deliver to Beneficiary
such further assurances and assignments, with respect to the Leases as
Beneficiary may from time to time reasonably request. Without Beneficiary's
prior written consent, Trustor shall not (i) do or knowingly permit to be done
anything to materially impair the value of any of the Leases; (ii) except for
security or similar deposits, collect any of the Rent more than one (1) month in
advance of the time when the same becomes due under the terms of any Lease;

                                       8
<PAGE>

(iii) discount any future accruing Rents; (iv) amend, modify, accept the
surrender of or terminate any of the Leases; or (v) assign or grant a security
interest in or to any of the Leases or Rents.

            SECTION 3.04 Direction to Tenants. Upon the occurrence and during
the continuance of an Event of Default, Trustor hereby authorizes and directs,
and shall, at the direction of Beneficiary, further authorize and direct, in
writing, the tenant under each Lease to pay directly to, or as directed by,
Beneficiary all Rents accruing or due under its Lease without proof to the
tenant of the occurrence and continuance of such Event of Default. Trustor
hereby authorizes the tenant under each Lease to rely upon and comply with any
notice or demand from Beneficiary for payment of Rents to Beneficiary, and
Trustor shall have no claim against any tenant for Rents paid by such tenant to
Beneficiary pursuant to such notice or demand. All Rents actually collected by
Beneficiary pursuant to this Section 3.04 shall be applied in accordance with
the Credit Agreement.

            SECTION 3.05 Appointment of Attorney-in-Fact.

            (a) Trustor hereby constitutes and appoints Beneficiary the true and
lawful attorney-in-fact, coupled with an interest, of Trustor and Trustor hereby
confers upon Beneficiary the right, in the name, place and stead of Trustor, to,
upon the occurrence and during the continuance of an Event of Default, demand,
sue for, attach, levy, recover and receive any of the Rents and any premium or
penalty payable upon the exercise by any third Person under any Lease of a
privilege of cancellation originally provided in such Lease and to give proper
receipts, releases and acquittances therefor and, after deducting expenses of
collection, to apply the net proceeds as provided in the Credit Agreement.
Trustor hereby authorizes and directs any such third Person to deliver such
payment to Beneficiary in accordance with this Article III, and Trustor hereby
ratifies and confirms all that its said attorney-in-fact, the Beneficiary, shall
do or cause to be done in accordance with this Deed of Trust and by virtue of
the powers granted hereby. The foregoing appointment is irrevocable and
continuing, and such rights, powers and privileges shall be exclusive in
Beneficiary, and its successors and assigns, so long as any part of the
Obligations remains unpaid or unperformed and undischarged.

            (b) Trustor hereby constitutes and appoints Beneficiary the true and
lawful attorney-in-fact, coupled with an interest, of Trustor and Trustor hereby
confers upon Beneficiary the right, in the name, place and stead of Trustor, to
subject and subordinate at any time and from time to time any Lease or any part
thereof to the lien, assignment and security interest of this Deed of Trust and
to the terms hereof, or to any other mortgage, deed of trust, assignment or
security agreement, or to any ground lease or surface lease, with respect to all
or a portion of the Trust Property, or to request or require such subordination,
where such reservation, option or authority was reserved to Trustor under any
such Lease, or in any case where Trustor otherwise would have the right, power
or privilege so to do. The foregoing appointment is irrevocable and continuing,
and such rights, powers and privileges shall be exclusive in Beneficiary, and
its successors and assigns, so long as any part of the Obligations remains
unpaid or unperformed and undischarged. Trustor hereby represents and warrants
that it has not at any time prior to the date hereof exercised (or appointed any
Person as attorney-in-fact to exercise) any of the rights described in this
Section 3.05(b), and Trustor hereby covenants not to exercise (or appoint any
other Person as attorney-in-fact to exercise) any such right, nor (except at
Beneficiary's written request) to subordinate any such Lease to the lien of this
Deed of Trust or

                                       9
<PAGE>

to any other mortgage, deed of trust, assignment or security agreement or to any
ground lease or surface lease.

            SECTION 3.06 No Liability of Beneficiary. Neither the acceptance
hereof nor the exercise of the rights and remedies hereunder nor any other
action on the part of Beneficiary or any Person exercising the rights of
Beneficiary or any Lender hereunder shall be construed to: (a) be an assumption
by Beneficiary or any such Person or to otherwise make Beneficiary or such
Person liable or responsible for the performance of any of the obligations of
Trustor under or with respect to the Leases or for any Rent, security deposit or
other amount delivered to Trustor, provided that Beneficiary or any such Person
exercising the rights of Beneficiary shall be accountable for any Rents,
security deposits or other amounts actually received by Beneficiary or such
Person, as the case may be; or (b) obligate Beneficiary or any such Person to
take any action under or with respect to the Leases or with respect to the Trust
Property, to incur any expense or perform or discharge any duty or obligation
under or with respect to the Leases or with respect to the Trust Property, to
appear in or defend any action or proceeding relating to the Leases or the Trust
Property, to constitute Beneficiary as a mortgagee-in-possession (unless
Beneficiary actually enters and takes possession of the Trust Property), or to
be liable in any way for any injury or damage to Persons or property sustained
by any Person in or about the Trust Property, other than to the extent caused by
the willful misconduct or gross negligence of Beneficiary or any Person
exercising the rights of Beneficiary hereunder.

            SECTION 3.07 Trustor's Indemnities. Trustor hereby agrees to
protect, indemnify and hold harmless Beneficiary and each of the other
Indemnitees and each Indemnified Party related to Beneficiary or such other
Indemnitees from and against any and all Losses which Beneficiary or any such
other Indemnitees or Indemnified Party may incur under or by reason of this
Article III, or for any action taken by Beneficiary or any such other Lender or
Indemnified Party hereunder, or by reason or in defense of any and all claims
and demands whatsoever which may be asserted against Beneficiary or any such
other Indemnitees or Indemnified Party arising out of the Leases, including,
without limitation, any claim by any third Person for credit on account of Rents
paid to and received by Trustor, but not delivered to Beneficiary or its agents,
representatives or employees, for any period under any Lease more than one (1)
month in advance of the due date thereof. The foregoing indemnity shall include,
in any case, such Loss as may result from the ordinary negligence of Beneficiary
or such other Indemnitees or Indemnified Party, but not any such Loss that is
caused by the gross negligence or willful misconduct of Beneficiary or any such
other Indemnitees or Indemnified Party. In the event that Beneficiary or any of
the other Lenders or any Indemnified Party incurs any Losses covered by the
indemnity set forth in this Section 3.07, the amount thereof, including
reasonable attorneys' fees, with interest thereon at the Default Rate, shall be
payable by Trustor to Beneficiary within ten (10) days after demand therefor,
and shall be secured hereby and by all other security for the payment and
performance of the Obligations, including, without limitation, the lien and
security interest of this Deed of Trust. The liabilities of Trustor as set forth
in this Section 3.07 shall survive the termination of this Deed of Trust and the
repayment of the Obligations.

            SECTION 3.08 No Modification of Trustor's Obligations. Nothing
herein contained shall modify or otherwise alter the obligation of Trustor to
make prompt payment of all Obligations as and when the same become due,
regardless of whether the Rents described in this Article III are sufficient to
pay the Obligations, and the security provided to Beneficiary

                                       10
<PAGE>

pursuant to this Article III shall be cumulative of all other security of any
and every character now or hereafter existing to secure payment of the
Obligations.

            SECTION 3.09 Rights in Bankruptcy. Upon execution of this Deed of
Trust, Beneficiary, and not Trustor, shall be the creditor of any Tenant in
respect of assignments for the benefit of creditors and bankruptcy,
reorganization, insolvency, dissolution or receivership proceedings affecting
any such Tenant; provided, however, that Trustor shall be the party obligated to
make timely filings of claims in such proceedings or to otherwise pursue
creditor's rights therein. Notwithstanding the foregoing, Beneficiary shall have
the right, but not the obligation, to file such claims instead of Trustor and if
Beneficiary does file a claim, Trustor agrees that Beneficiary (a) is entitled
to all distributions on such claim to the exclusion of Trustor and (b) has the
exclusive right to vote such claim and otherwise to participate in the
administration of the estate in connection with such claim. Beneficiary shall
have the option to apply any monies received by it as such creditor to any of
the obligations of Trustor under the Loan Documents the order set forth in the
Loan Documents. If a petition is filed under the Bankruptcy Code by or against
Trustor, and Trustor, as landlord under any Lease, decides to reject such Lease
pursuant to Section 365(a) of the Bankruptcy Code, then Trustor shall give
Beneficiary at least ten (10) days' prior written notice of the date when
Trustor shall apply to the bankruptcy court for authority to reject the Lease.
Beneficiary may, but shall not be obligated to, send Trustor within such ten-day
period a written notice stating that (a) Beneficiary demands that Trustor assume
and assign the Lease to Beneficiary pursuant to Section 365 of the Bankruptcy
Code, and (b) Beneficiary covenants to cure or provide adequate assurance of
future performance under the Lease. If Beneficiary sends such notice, Trustor
shall not reject the Lease provided Beneficiary complies with clause (b) of the
preceding sentence.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

Trustor hereby unconditionally represents and warrants to Beneficiary (but to
the extent any representation or warranty in this Article IV is substantively
the same as a representation or warranty contained in Article V of the Credit
Agreement and such representation or warranty is qualified by a materiality or
other qualifier in the Credit Agreement, such representation or warranty herein
shall be subject to the same materiality or other qualifier as in Article V of
the Credit Agreement) as follows:

            :

            SECTION 4.01 Title to Trust Property and Lien of this Deed of Trust.
Trustor has good, marketable and indefeasible fee simple title to the Land and
the Buildings, and has good, marketable and indefeasible title to the Fixtures,
the Personalty and the other Trust Property. The Trust Property is free and
clear of any and all Liens, charges, encumbrances, security interests and
adverse claims whatsoever, except for (i) all Liens, charges, encumbrances,
security interests and adverse claims specifically identified as exceptions on
Schedule B of the policy of title insurance accepted by Beneficiary in
connection herewith or (ii) those Liens set forth in Section 5.08 of the Credit
Agreement.

                                       11
<PAGE>

            SECTION 4.02 Taxes and Other Payments. Trustor has filed all
federal, state, commonwealth, county, municipal and city income and other
material tax returns required to have been filed by it and has paid all taxes
and other Impositions which have become due pursuant to such returns or pursuant
to any assessments or charges received by it, and Trustor does not know of any
basis for any additional assessment or charge in respect of any such taxes or
other Impositions. Trustor has paid in full all sums owing or claimed for labor,
material, supplies, personal property (whether or not forming a Fixture
hereunder) and services of every kind and character used, furnished or installed
in or on the Trust Property that are now due and owing and no claim for same
exists or will be permitted to be created, except such claims as may arise in
the ordinary course of business and that are not yet past due.

            SECTION 4.03 Power to Create Lien and Security. Trustor has full
power and lawful authority to grant, bargain, sell, assign, transfer, mortgage
and convey a Lien and security interest in all of the Trust Property in the
manner and form herein provided and without obtaining the authorization,
approval, consent or waiver of any grantor, lessor, sublessor, Governmental
Authority or other Person whomsoever.

            SECTION 4.04 Loan and Credit Agreements. Trustor has received a copy
of and is fully familiar with the terms and provisions of the Credit Agreement
and the other Loan Documents. All representations and warranties made by Trustor
in the Credit Agreement and the other Loan Documents are incorporated herein by
reference and are hereby made by Trustor as to itself and the Trust Property as
though such representations and warranties were set forth at length herein as
the representations and warranties of Trustor.

            SECTION 4.05 Compliance with Laws. All of the improvements on the
Land (i) comply with all material requirements of all applicable laws and
ordinances with respect to zoning, subdivision, construction, building and land
use, including, without limitation, requirements with respect to parking, access
and certificates of occupancy (and similar certificates), and (ii) comply with,
and shall remain in compliance with, applicable health, fire and building codes.
All of the Buildings lie wholly within the boundaries and building restriction
lines of the Land. No improvements on adjoining properties encroach upon the
Land, and no easements or other encumbrances upon the Land encroach upon or
under any of the Buildings or any portion of the Trust Property. All of the
Buildings and the use of the Trust Property materially comply with, and shall
remain in material compliance with, all applicable statutes, rules, regulations
and private covenants now or hereafter relating to the ownership, construction,
use or operation of the Trust Property, including all applicable statutes, rules
and regulations pertaining to requirements for equal opportunity,
anti-discrimination, fair housing, environmental protection, zoning and land
use. All certifications, permits, licenses and approvals, including, without
limitation, certificates of completion and occupancy permits required for the
legal use, occupancy and operation of the Trust Property have been obtained and
are in full force and effect. Trustor has not received any notice of, or other
communication with respect to, an alleged violation with respect to any of the
foregoing.

            SECTION 4.06 No Condemnation. No part of any property subject to
this Deed of Trust has been taken in condemnation or other like proceeding nor
is any proceeding pending, threatened or known to be contemplated for the
partial or total condemnation or taking of the Trust Property.

                                       12
<PAGE>

            SECTION 4.07 Flood Zone. The Trust Property is not located in an
area identified by the Federal Emergency Management Agency ("FEMA") as having
special flood hazards or if the Land or any part thereof is identified by the
Federal Emergency Management Agency as an area having special flood hazards
(including, without limitation, those areas designated as Zone A or Zone V),
then Trustor has obtained the insurance required under Section 5.04(a)(v) of
this Deed of Trust.

                                    ARTICLE V

                              AFFIRMATIVE COVENANTS

            Trustor hereby unconditionally covenants and agrees with Beneficiary
as follows:

            SECTION 5.01 Lien Status. Except as otherwise expressly provided in
the Credit Agreement, Trustor shall not place, or permit to be placed, or
otherwise mortgage, hypothecate or encumber the Trust Property, or any portion
thereof or interest therein, with any other Lien or security interest of any
nature whatsoever (statutory, constitutional or contractual), other than
Permitted Liens, regardless of whether such Lien or security interest is
inferior to the Lien and security interest created by this Deed of Trust, and,
if any such Lien or security interest is asserted against the Trust Property,
Trustor shall promptly, at its own cost and expense, (a) pay the underlying
claim in full (except for so long as such claim is being contested by Trustor in
good faith and in accordance with the terms of the Credit Agreement) or take
such other action as may be necessary to cause the same to be released of record
and otherwise, and (b) within ten (10) days after the date on which Mortgagor
receives notice of such Lien or security interest. Such notice shall specify who
is asserting such Lien or security interest and shall detail the origin and
nature of the underlying claim giving rise to such asserted Lien or security
interest.

            SECTION 5.02 Payment of Impositions. Trustor shall duly pay and
discharge, or cause to be paid and discharged, all Impositions not later than
the due date thereof, or the day on which any fine, penalty, interest or cost
may be added thereto or imposed, or the day on which any Lien may be filed for
the nonpayment thereof (if such day is used to determine the due date of the
respective item); provided, however, that Trustor may, if permitted by
applicable law and if such installment payment would not create or permit the
filing of a Lien against the Trust Property, pay the Impositions in
installments. Notwithstanding the foregoing, Trustor may in good faith, by
appropriate proceedings and upon notice to Beneficiary, contest the validity,
applicability or amount of any asserted tax or assessment, subject to any more
restrictive provisions applicable to any such contest contained in the Credit
Agreement and (without limiting the foregoing) so long as (a) such contest is
diligently pursued, (b) Beneficiary determines, in its opinion reasonably
exercised, that such contest suspends the obligation to pay the tax and that
nonpayment of such tax or assessment will not result in the sale, loss,
forfeiture or diminution of the Trust Property or any part thereof or any
interest of Beneficiary therein, and (c) unless expressly provided to the
contrary in the Credit Agreement, prior to the earlier of the commencement of
such contest or the delinquency date of the asserted tax or assessment, Trustor
deposits with Beneficiary an amount determined by Beneficiary to be adequate to
cover the payment of such tax or assessment and a reasonable additional sum to
cover possible interest, costs and penalties; provided, however, that Trustor
shall promptly cause to be paid any amount adjudged by a court of competent
jurisdiction to be due, with all interest, costs and penalties

                                       13
<PAGE>

thereon, promptly after such judgment becomes final (and, subject to
Beneficiary's rights and remedies during an Event of Default, Beneficiary shall
make any sum deposited pursuant to clause (c) above available for such payment);
and provided, further, that in any event each such contest shall be concluded,
the taxes, assessments, interest, costs and penalties shall be paid prior to the
date any writ or order is issued under which the Trust Property may be sold,
lost or forfeited.

            SECTION 5.03 Repair. Trustor shall keep the Trust Property in good
order and condition (reasonable wear and tear excepted) and shall make all
repairs, replacements and improvements thereof and thereto, interior and
exterior, structural and non-structural, ordinary and extraordinary, which are
necessary to keep the same in such order and condition. Trustor shall also use
reasonable efforts to prevent any act or occurrence which might impair the value
or usefulness of the Trust Property for its intended usage.

            SECTION 5.04 Insurance and Application of Insurance Proceeds.

            (a) During the term of this Deed of Trust, Trustor, at its sole cost
and expense, shall maintain, or cause to be maintained the following policies of
insurance, with respect to the Trust Property:

                  (i) If applicable or appropriate, Casualty (property)
      insurance against loss or damage by fire, lightning and such other perils
      as are included in a standard "special form" policy (formerly known as an
      "all-risk" endorsement policy), and against loss or damage by all other
      risks and hazards covered by a standard extended coverage insurance policy
      including, without limitation, riot and civil commotion, terrorist
      actions, vandalism, malicious mischief, burglary and theft, in an amount
      equal to the greater of (A) the then full replacement cost of the
      improvements, without deduction for physical depreciation and (B) such
      amount that the insurer would not deem Trustor a co-insurer under said
      policies. The policies of insurance required under this Section 5.04 shall
      contain a "Replacement Cost" endorsement with a waiver of depreciation and
      an "Agreed Amount" or "No Coinsurance" endorsement and shall otherwise
      comply with the Credit Agreement.

                  (ii) Commercial General Liability insurance to the extent
      required under the Credit Agreement, including a broad form comprehensive
      general liability endorsement and coverages for broad form property
      damage, contractual damages and personal injuries (including death
      resulting therefrom) and containing minimum limits per occurrence of
      $1,000,000.00 and $2,000,000.00 in the aggregate for any policy year with
      no deductible.

                  (iii) Rental loss and/or business interruption insurance in an
      amount equal to the estimated gross revenues from the operations of the
      Trust Property for a period of twelve (12) months, if applicable or
      appropriate.

                  (iv) Insurance against loss or damage from (A) leakage of
      sprinkler systems and (B) explosion of steam boilers, air conditioning
      equipment, high pressure piping, machinery and equipment, pressure vessels
      or similar apparatus now or hereafter

                                       14
<PAGE>

      installed on the improvements (without exclusion for explosions), if
      applicable or appropriate.

                  (v) Flood insurance if all or any portion of the Trust
      Property is located in an area now or hereafter designated by the Federal
      Emergency Management Agency as an area having special flood hazards
      (including, without limitation, those areas designated as Zone A or Zone
      V), and in which flood insurance has been made available under the U.S.
      National Flood Insurance Program, in an amount equal to the full
      replacement cost of the Buildings, Fixtures and Personalty now or
      hereafter located on the Trust Property or such other amount as may be
      agreed to by Beneficiary in writing, if applicable or appropriate.

                  (vi) If the Trust Property is or ever becomes non-conforming
      with respect to zoning, ordinance or law coverage to compensate for loss
      of value or property resulting from operation of law and the cost of
      demolition and the increased cost of construction in such amounts as may
      be requested by Beneficiary.

                  (vii) Any other insurance with respect to the Trust Property
      that may be required under the Credit Agreement.

                  (viii) Such other insurance as may from time to time be
      reasonably required by Beneficiary in order to protect its interests.

            All such insurance policies with respect to the Trust Property shall
contain a standard, non-contributory mortgagee clause naming Beneficiary, and
its successors and assigns, as an additional insured under all liability
insurance policies, as the first mortgagee and loss payee on all property
insurance policies, and as the sole loss payee on all rental loss or business
interruption insurance policies. Trustor shall not take out separate insurance
with respect to the Trust Property concurrent in form or contributing in the
event of loss with that required to be maintained hereunder or under the Credit
Agreement unless Beneficiary is named as an additional insured thereon under a
standard mortgagee clause acceptable to Beneficiary and each such policy is
otherwise in form and substance acceptable to Beneficiary.

            (b) In the event of the foreclosure of this Deed of Trust, or in the
event of any transfer of title to the Trust Property, or any part thereof, by
foreclosure sale or by power of sale or deed in lieu of foreclosure, the
purchaser of the Trust Property, or such part thereof, shall succeed to all of
Trustor's rights with respect to the Trust Property, including any rights to
unexpired, unearned or returnable insurance premiums, subject to limitations on
the assignment of blanket policies, but limited to such rights as relate to the
Trust Property or such part thereof. If Beneficiary acquires title to the Trust
Property, or any part thereof, in any manner, Beneficiary shall thereupon (as
between Trustor and Beneficiary) become the sole and absolute owner of the
insurance policies with respect to the Trust Property, and all insurance
proceeds payable thereunder with respect to the Trust Property, with the sole
right to collect and retain all unearned or returnable premiums thereon with
respect to the Trust Property, or such part thereof, if any.

                                       15
<PAGE>

            (c) If any damage to, destruction or loss of or other casualty with
respect to any of the Trust Property shall occur, Trustor shall file and
prosecute its claim or claims for any insurance proceeds in good faith and with
due diligence and cause the same to be collected and paid over to Beneficiary,
and Trustor hereby irrevocably authorizes and empowers Beneficiary, in the name
of Trustor or otherwise, to collect and receipt for any such insurance proceeds
and to adjust any insurance claims and to file and prosecute such claim or
claims, and although it is hereby expressly agreed that the same shall not be
necessary in any event, Trustor shall, upon demand of Beneficiary, make, execute
and deliver any and all assignments and other instruments sufficient for the
purpose of assigning any such insurance proceeds to Beneficiary, free and clear
of any Liens whatsoever. Trustor hereby irrevocably appoints Beneficiary as
Trustor's attorney-in-fact for each such purpose (which appointment is coupled
with an interest) and authorizes any Person to act upon the foregoing
appointment.

            (d) Following any damage to, destruction or loss of or other
casualty with respect to any of the Trust Property, Beneficiary shall apply the
entire amount of any insurance proceeds in accordance with the provisions of the
Credit Agreement or, if there is no provision contained in the Credit Agreement
governing how the same are to be applied, then Beneficiary shall apply the
entire amount thereof to the payment of the Obligations, whether or not then due
and payable, in such manner and order as Beneficiary may elect. In all events,
unless expressly provided to the contrary in the Credit Agreement, Trustor
hereby covenants and agrees to promptly commence and to diligently prosecute the
restoration of the Trust Property upon the occurrence of any casualty loss
affecting the Trust Property, without regard to the availability or adequacy of
insurance proceeds, but in all events in a manner approved by Beneficiary.
Notwithstanding any damage to, destruction or loss of or other casualty with
respect to any of the Trust Property, Trustor shall continue to pay the
Obligations at the time and in the manner provided for in the Credit Agreement
and the other Loan Documents until the Obligations have been paid in full. If
the Trust Property is sold, through foreclosure or otherwise, prior to the
receipt by Beneficiary of such insurance proceeds, Beneficiary shall have the
right, whether or not a deficiency judgment on any Loan Document shall have been
sought, recovered or denied, to receive such insurance proceeds, or a portion
thereof sufficient to pay the then unpaid Obligations, whichever is less.

            SECTION 5.05 Condemnation and Application of Condemnation Proceeds.

            (a) Promptly upon its obtaining knowledge of the institution or the
threatened institution of any proceeding for the condemnation or other taking of
the Trust Property, or any portion thereof or interest therein, Trustor shall
notify Beneficiary of such proceeding. Trustor shall then, if requested by
Beneficiary, file or defend its claim thereunder and prosecute same with due
diligence to its final disposition and shall, subject to the terms of the Credit
Agreement, cause any awards or settlements to be paid over to Beneficiary for
disposition pursuant to the terms of this Deed of Trust. Beneficiary shall be
entitled to participate in any such proceeding, at Trustor's sole cost and
expense, and Trustor shall deliver or cause to be delivered to Beneficiary such
instruments as may be requested by Beneficiary from time to time to permit such
participation.

            (b) If the Trust Property or any part thereof is taken or diminished
in value, or if a consent settlement is entered by or under threat of such
proceeding, the award or settlement

                                       16
<PAGE>

payable to Trustor by virtue of its interest in the Trust Property shall be, and
by these presents is, assigned, transferred and set over unto Beneficiary to be
held by Beneficiary, subject to the Lien and security interest of this Deed of
Trust, and disbursed in accordance with the provisions of the Credit Agreement
or, if there is no provision contained in the Credit Agreement governing how the
same is to be disbursed, then Beneficiary shall apply the entire amount thereof
to the payment of the Obligations, whether or not then due and payable, in such
manner and order as Beneficiary may elect. In all events, unless otherwise
expressly provided to the contrary in the Credit Agreement, Trustor hereby
covenants and agrees to commence and diligently to prosecute the restoration of
the Trust Property upon the occurrence of any condemnation or other taking
affecting the Trust Property, without regard to the availability or adequacy of
any award or settlement. Notwithstanding any condemnation or other taking of any
of the Trust Property, Trustor shall continue to pay the Obligations at the time
and in the manner provided for in the Credit Agreement and the other Loan
Documents, and the Obligations shall not be reduced until, and then only to the
extent that, any condemnation award or settlement shall have been actually
received and applied by Beneficiary to the discharge of the Obligations. If the
Trust Property is sold, through foreclosure or otherwise, prior to the receipt
by Beneficiary of such condemnation award or settlement, Beneficiary shall have
the right, whether or not a deficiency judgment on any Loan Document shall have
been sought, recovered or denied, to receive such condemnation award or
settlement, or a portion thereof sufficient to pay the Obligations, whichever is
less.

            SECTION 5.06 Maintenance of Rights of Way, Easements, Licenses and
Other Rights. Trustor shall maintain, preserve and renew all rights of way,
easements, tenements, hereditaments, development rights and credits, zoning
rights, grants, privileges, appurtenances, licenses, franchises and other rights
reasonably necessary for the use or operation of the Trust Property from time to
time, or otherwise relevant to the value thereof, and Trustor shall not, without
the prior written consent of Beneficiary, initiate, join in or consent to any
private restrictive covenant or other public or private restriction as to the
present or future use or operation of the Trust Property. Trustor shall,
however, comply with all restrictive covenants which may at any time affect the
Trust Property, all applicable zoning ordinances and all other public or private
restrictions relating to the use of the Trust Property.

            SECTION 5.07 Payment and Performance of Obligations. Trustor shall
duly and punctually pay and perform all of the Obligations.

            SECTION 5.08 Compliance with Permitted Liens and Other Obligations.
Trustor shall comply in all material respects with any and all obligations,
restrictions and requirements that may be set forth in each and every document
constituting a Permitted Lien. In addition, Trustor shall comply in all material
respects each and every obligation legally imposed upon it and/or relating to
the Trust Property pursuant to applicable law (including, without limitation,
all matters described in Section 4.05 hereof), contract or other agreement. It
is hereby acknowledged that Beneficiary's consent to a Permitted Lien as of the
date hereof shall in no way be deemed to constitute approval of any future Lien
which may be imposed upon any portion of the Trust Property, or any other
enforcement action affecting Trustor or the Trust Property, as a result of
Trustor's failure to perform or comply with its obligations under any document
constituting a Permitted Lien as of the date hereof.

                                       17
<PAGE>

            SECTION 5.09 Additional Affirmative Covenants. All affirmative
covenants made by the Borrowers or Guarantors or any of them in the Credit
Agreement are incorporated herein by reference and are hereby also made by
Trustor as to itself and the Trust Property as though such covenants were set
forth at length herein as the covenants of Trustor.

                                   ARTICLE VI

                               NEGATIVE COVENANTS

            Trustor hereby covenants and agrees with Beneficiary that, until all
of the Obligations shall have been paid or performed in full and discharged:

            SECTION 6.01 Use Violations. Trustor shall not use, maintain,
operate or occupy, or allow the use, maintenance, operation or occupancy of, the
Trust Property in any manner which (a) violates in any material respect any
Governmental Requirement, (b) may be dangerous unless safeguarded as required by
applicable law, (c) constitutes a public or private nuisance, or (d) makes void,
voidable or cancelable, or increases, substantially in excess of commercially
reasonably rates, the premium of, any insurance then in force with respect
thereto.

            SECTION 6.02 Waste. Trustor shall not commit or permit any material
waste with respect to the Trust Property.

            SECTION 6.03 Alterations. Trustor shall notify Beneficiary, in
writing and in advance, with respect to all proposed alterations, improvements
or additions to the Trust Property which are of a material nature, and, unless
and to the extent otherwise expressly provided in the Credit Agreement, Trustor
shall not effect any material alteration, improvement or addition to the Trust
Property without the prior written consent of Beneficiary.

            SECTION 6.04 No Further Encumbrances. Trustor shall not, without the
prior written consent of Beneficiary, create, place or permit to be created or
placed, or through any act or failure to act, acquiesce in the placing of, or
allow to remain, any mortgage, pledge, Lien (statutory, constitutional or
contractual), security interest, encumbrance or charge on, or conditional sale
or other title retention agreement with respect to, the Trust Property, or any
portion thereof or interest therein, other than the Permitted Liens, regardless
of whether the same are subordinate to the Lien(s) and security interest(s)
created by this Deed of Trust.

            SECTION 6.05 Transfer Restrictions. Trustor shall not sell, lease,
assign, transfer or otherwise dispose of or abandon all or any part of the Trust
Property (or any interest therein), except as expressly permitted by, and in
accordance with the terms of, the Credit Agreement.

            SECTION 6.06 Loan and Credit Agreements; Additional Negative
Covenants. Trustor has received a copy of and is fully familiar with the terms
and provisions of the Credit Agreement and the other Loan Documents. All
negative covenants made by the Borrowers or Guarantors or any of them in the
Credit Agreement and the other Loan Documents are incorporated herein by
reference and are hereby also made by Trustor as to itself and the Trust
Property as though such negative covenants were set forth at length herein as
the negative covenants of Trustor.

                                       18
<PAGE>

                                   ARTICLE VII

                         EVENTS OF DEFAULT AND REMEDIES

            SECTION 7.01 Event of Default. The "Events of Default" set forth in
Section 8.01 of the Credit Agreement are hereby incorporated herein as if fully
set forth herein, and, without limiting the generality of the foregoing, the
occurrence of an "Event of Default" under the Credit Agreement or any other Loan
Document shall constitute an "Event of Default" hereunder. All notices and cure
periods described herein or in the Credit Agreement or any other Loan Document
shall not be applicable to any "Potential Event of Default" (as hereinafter
defined) if such Potential Event of Default has occurred as of the date on which
Beneficiary commences a nonjudicial foreclosure proceeding with respect to
another Potential Event of Default or Event of Default. Such event shall
constitute an independent Event of Default hereunder. For purposes hereof,
"Potential Event of Default" shall mean any event, but for the passage of time
or giving of notice, would be an Event of Default.

            SECTION 7.02 Acceleration. Upon the occurrence and during the
continuance of any Event of Default, in addition to any other rights, powers or
remedies conferred herein or by operation of law, Beneficiary, in its sole
judgment and discretion, may declare the then unpaid principal balance of the
Loan (the "Principal Balance"), the accrued interest thereon and any other
accrued but unpaid portion of the Obligations to be, and they shall thereupon
forthwith become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived by
Trustor.

            SECTION 7.03 Foreclosure and Sale. If Beneficiary invokes the power
of sale contained herein and directs Trustee to foreclose on all or part of the
Trust Property, Trustee shall sell all or any part of the Trust Property
(including any part of the Trust Property that may be subject to the provisions
of the Uniform Commercial Code of the State of Mississippi which may then be
security for the debt hereby secured, which sale may be conducted in connection
with any sale of real property and fixtures and in accordance with the Uniform
Commercial Code of the State of Mississippi) at one or more public sales at the
courthouse of the county in which the Trust Property or any part of the Trust
Property is situated, at public outcry, to the highest bidder for cash, and in
bar of the right and equity of redemption, statutory right of redemption,
homestead, dower, appraisement, stay, elective share and all other rights and
exemptions of every kind, all of which are hereby expressly waived by Trustor,
in order to pay the Obligations and all expenses of sale and of all proceedings
in connection therewith, including reasonable attorney's fees, after advertising
the time, place and terms of sale at least once a week for three (3) consecutive
weeks preceding the date of such sale in some newspaper published in the county
in which the land is located, or if no newspaper is printed in such county, then
in a newspaper of general circulation therein, and by posting one notice of such
sale at the courthouse where such sale is to be held. If the Trust Property is
located in two or more counties or in two judicial districts of the same county,
whether the Trust Property consists of one parcel or more than one parcel, then
Trustee shall have full power to select in which county, or judicial district,
the sale of all or any part of the Trust Property shall be made and his
selection shall be binding upon Trustor and Beneficiary and all persons claiming
through or under them, whether by contract or by law, Trustee shall have full
power to fix the day, time, terms and place of sale and may sell the Trust
Property in parcels or as a whole as Trustee may deem best. Trustor waives the

                                       19
<PAGE>

provisions of Section 89-1-55 of the Mississippi Code of 1972, as amended, and
any successor provisions, as far as said section restricts the right of Trustee
to offer at sale more than one hundred and sixty acres at a time, and Trustee
may offer the Trust Property as a whole or in part and in such order as Trustee
may deem best, regardless of the manner in which it may be described. Trustee
may appoint an agent to conduct foreclosure proceedings and any sale thereunder,
which appointment need not be recorded. Any foreclosure sale may be adjourned or
continued from time to time in the discretion of Trustee until such time as such
sale can be validly and legally completed. At any sale made to enforce the trust
herein given, Trustee shall execute a deed of conveyance or other appropriate
instrument conveying the Trust Property so sold, which conveyance shall be
without any covenant or warranty, express or implied, and shall vest full and
perfect title in such purchaser upon payment of the purchase price. The recitals
in such instrument shall be prima facie evidence of the truth of the statements
made therein, and failure to give any notice to Trustor as provided herein shall
not adversely affect any foreclosure sale or create any liability on the part of
Trustee or Beneficiary to Trustor. Trustee shall apply the proceeds of the sale
in the following order: (a) to all costs and expenses of the sale, including,
but not limited to, reasonable Trustee `s and attorney's fees and costs of title
evidence and any other costs incurred in connection with the sale; (b) to all
sums secured hereby; and (c) the excess, if any, to the person or persons
legally entitled thereto. Upon any sale pursuant to this paragraph, whether made
under the power of sale herein granted or under or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale, Beneficiary may
bid for and acquire the Trust Property or any part thereof and in lieu of paying
cash therefor may make settlement for the purchase price by crediting upon the
indebtedness of Trustor secured by this Deed of Trust the net sales price after
deducting therefrom the expenses of the sale and the costs of the action and any
other sums which Trustee or Beneficiary is authorized to deduct under this Deed
of Trust. If the Trust Property is sold pursuant to this paragraph, Trustor or
any person holding possession of the Trust Property through Trustor shall
immediately surrender possession of the Trust Property to the purchaser at such
sale. If possession is not surrendered, Trustor or such person shall be deemed
to be a tenant at sufferance and may be removed by writ of possession, or any
other lawful means.

            Each remedy provided in this instrument is distinct from and
cumulative with all other rights and remedies provided hereunder or afforded by
applicable law or equity, and may be exercised concurrently, independently or
successively, in any order whatsoever.

            SECTION 7.04 Trustee's Successors, Substitutes and Agents. Trustee
or any successor to or substitute for Trustee may appoint or delegate any one or
more persons as agent to perform any act or acts necessary or incident to any
sale held by Trustee, including the posting of notices and the conduct of sale,
but in the name and on behalf of Beneficiary. If Trustee or any successor to or
substitute for Trustee shall have given notice of sale hereunder, any successor
or substitute trustee thereafter appointed may complete the sale and the
conveyance of the Trust Property pursuant thereto as if such notice had been
given by the successor to or substitute for Trustee conducting the sale.

            SECTION 7.05 Receivership. If any of the Obligations shall become
due and payable and shall not be promptly paid, Beneficiary shall have the right
and power to proceed by a suit or suits in equity or at law, whether for the
specific performance of Beneficiary which Trustee may apply for and obtain as a
matter of right and without notice to Trustor, which notice

                                       20
<PAGE>

is hereby expressly waived by Trustor, the appointment of a receiver to collect
the Rents of the Trust Property and to preserve the security hereof, either
before or after any foreclosure sale or the sale of the Trust Property under the
order of a court or courts of competent jurisdiction or under executory or other
legal process, without regard to the value of the Trust Property as security for
the amount then due to Beneficiary, or the solvency of any entity or entities,
person or persons primarily or secondarily liable for the payment of such
amounts; the Rents of the Trust Property, in any such event, having heretofore
been assigned to Beneficiary pursuant to Section 3.01 hereof as additional
security for the payment of the Obligations secured hereby.

            SECTION 7.06 Judicial Foreclosure. If an Event of Default shall
occur and be continuing, Trustee or Beneficiary shall have the right and power
to proceed by a suit or suits in equity or at law, whether for the specific
performance of any covenant or agreement herein contained or in aid of the
execution of any power herein granted, or for any foreclosure hereunder or for
the sale of the Trust Property under the judgment or decree of any court or
courts of competent jurisdiction, or for the appointment of a receiver pending
any foreclosure hereunder or the sale of the Trust Property under the order of a
court or courts of competent jurisdiction or under executory or other legal
process, or for the enforcement of any other appropriate legal or equitable
remedy. Any money advanced by Trustee and/or Beneficiary in connection with any
such receivership shall be a demand obligation (which obligation Trustor hereby
expressly promises to pay) owing by Trustor to Trustee and/or Beneficiary and
shall bear interest from the date of such advance by Trustee and/or Beneficiary
until paid at the Default Rate.

            SECTION 7.07 Separate Sales. To the extent allowed by applicable
law, the Trust Property may be sold in one or more parcels and in such manner
and order as Beneficiary, in its sole discretion, may elect, it being expressly
understood and agreed that the right of sale arising out of any Event of Default
shall not be exhausted by any one or more sales.

            SECTION 7.08 Possession of Trust Property. Trustor agrees to the
full extent that it lawfully may, that, in case one or more of the Events of
Default shall have occurred and be continuing, then, and in every such case,
Trustee or Beneficiary shall have the right and power to enter into and upon and
take possession of all or any part of the Trust Property in the possession of
Trustor, its successors or assigns, or its or their agents or servants, and may
exclude Trustor, its successors or assigns, and all Persons claiming by, through
or under Trustor, and its or their agents or servants wholly or partly
therefrom; and, holding the same, Trustee or Beneficiary may use, administer,
manage, operate and control the Trust Property and conduct the business thereof
to the same extent as Trustor, its successors or assigns, might at the time do
and may exercise all rights and powers of Trustor, in the name, place and stead
of Trustor, or otherwise as Trustee or Beneficiary shall deem best. All costs,
expenses and liabilities of every character incurred by Trustee and/or
Beneficiary in administering, managing, operating and controlling the Trust
Property shall constitute a demand obligation (which obligation Trustor hereby
expressly promises to pay) owing by Trustor to Trustee and/or Beneficiary and
shall bear interest from the date of expenditure until paid at the Default Rate,
all of which shall constitute a portion of the Obligations and shall be secured
by this Deed of Trust and all of the other Loan Documents. Trustor hereby
irrevocably constitutes and appoints Beneficiary as Trustor's attorney-in-fact
(coupled with an interest) to perform such acts and execute such documents as
Beneficiary, in its sole discretion, shall deem appropriate, including
endorsement of Trustor's name on any

                                       21
<PAGE>

instruments. Regardless of any provision of this Deed of Trust, the Credit
Agreement or any other Loan Document, Beneficiary shall not be considered to
have accepted any property other than cash or immediately available funds in
satisfaction of any obligation of Trustor to Beneficiary, unless Beneficiary
shall have given express written notice of Beneficiary's election to the
contrary.

            SECTION 7.09 Occupancy After Foreclosure. In the event that there is
a foreclosure sale hereunder and at the time of such sale Trustor or Trustor's
representatives, successors or assigns or any other person claiming any interest
in the Trust Property by, through or under Trustor, are occupying or using the
Trust Property or any part thereof, each and all shall immediately become the
tenant of the purchaser at such sale, which tenancy shall be a tenancy from day
to day, terminable at the will of either the landlord or tenant, at a reasonable
rental per day based upon the value of the property occupied, such rental to be
due daily to the purchaser. To the extent permitted by applicable law, the
purchaser at such sale shall, notwithstanding any language herein to the
contrary, have the sole option to demand immediate possession following the sale
or to permit the occupants to remain as tenants at will. In the event that the
tenant fails to surrender possession of said property upon demand, the purchaser
shall be entitled to institute and maintain a summary action for possession of
the Trust Property (such as an action for forcible entry and detainer) in any
court having appropriate jurisdiction.

            SECTION 7.10 Remedies Cumulative, Concurrent and Nonexclusive. Every
right, power and remedy herein given to Trustee or Beneficiary shall be
cumulative and in addition to every other right, power and remedy herein
specifically given or now or hereafter existing in equity, at law or by statute
(including specifically those granted by the Applicable UCC). Each such right,
power and remedy, whether specifically herein given or otherwise existing, may
be exercised from time to time and so often and in such order as may be deemed
expedient by Trustee or Beneficiary, and the exercise, or the beginning of the
exercise, of any such right, power or remedy shall not be deemed a waiver of the
right to exercise, at the same time or thereafter, any other right, power or
remedy. Beneficiary shall be entitled to collect all costs and expenses incurred
in pursuing such remedies. No delay or omission by Trustee or Beneficiary in the
exercise of any such right, power or remedy shall impair any such right, power
or remedy or operate as a waiver thereof or of any other right, power or remedy
then or thereafter existing.

            SECTION 7.11 No Release of Obligations. Neither Trustor, any other
Borrower, nor any other Person now or hereafter obligated for the payment or
performance of all or any part of the Obligations shall be relieved of any such
obligation by reason of (a) the failure of Trustee or Beneficiary to comply with
any request of Trustor, any other Borrower or any other Person so obligated to
foreclose the Lien of this Deed of Trust to enforce any provision hereunder or
under the Credit Agreement; (b) the release, regardless of consideration, of the
Trust Property or any portion thereof or interest therein or the addition of any
other property to the Trust Property; (c) any agreement or stipulation between
any subsequent owner of the Trust Property and Beneficiary extending, renewing,
rearranging or in any other way modifying the terms of this Deed of Trust
without first having obtained the consent of, given notice to or paid any
consideration to Trustor , any other Borrower or any other Person, and in any
such event Trustor, all other Borrowers and all such other Persons shall
continue to be liable to make payment according to the terms of any such
extension or modification agreement unless

                                       22
<PAGE>

expressly released and discharged in writing by Beneficiary; or (d) any other
act or occurrence save and except the complete payment and performance of all of
the Obligations.

            SECTION 7.12 Release of and Resort to Collateral. Beneficiary may
release, regardless of consideration, any part of the Trust Property without, as
to the remainder, in any way impairing, affecting, subordinating or releasing
the Lien or security interest created in or evidenced by this Deed of Trust or
its stature as a first and prior Lien and security interest in and to the Trust
Property, and without in any way releasing or diminishing the liability of any
Person liable for the payment or performance of the Obligations. Beneficiary may
resort to any other security for the Obligations held by Trustee or Beneficiary
in such manner and order as Beneficiary may elect.

            SECTION 7.13 Waiver of Redemption, Notice and Marshalling of Assets.
To the fullest extent permitted by applicable law, Trustor hereby irrevocably
and unconditionally waives and releases (a) all benefits that might accrue to
Trustor by virtue of any present or future moratorium law or other law exempting
the Trust Property from attachment, levy or sale on execution or providing for
any appraisement, valuation, stay of execution, exemption from civil process,
redemption or extension of time for payment; (b) except for notices expressly
provided for herein or in the Credit Agreement, all notices of any Event of
Default or of Beneficiary's intention to accelerate maturity of the Obligations
or of Trustee's or Beneficiary's election to exercise or actual exercise of any
right, remedy or recourse provided for hereunder or under the Credit Agreement;
and (c) any right to a marshalling of assets, a sale in inverse order of
alienation and (d) any and all conflicts with any provisions of any of the Loan
Documents. If any law referred to in this Deed of Trust and now in force, of
which Trustor or its successor or successors might take advantage despite the
provisions hereof, shall hereafter be repealed or cease to be in force, such law
shall thereafter be deemed not to constitute any part of the contract herein
contained or to preclude the operation or application of the provisions hereof.
Beneficiary shall have the right to determine the order in which any or all of
the Trust Property shall be subjected to the remedies provided herein.

            SECTION 7.14 Discontinuance of Proceedings. In case Beneficiary
shall have proceeded to invoke any right, remedy or recourse permitted hereunder
or under the Credit Agreement and shall thereafter elect to discontinue or
abandon same for any reason, Beneficiary shall have the unqualified right so to
do and, in such an event, Trustor and Beneficiary shall be restored to their
former positions with respect to the Obligations, this Deed of Trust, the Credit
Agreement, the Trust Property and otherwise, and the rights, remedies, recourses
and powers of Beneficiary shall continue as if same had never been invoked.

            SECTION 7.15 Application of Proceeds. After the occurrence and
during the continuance of an Event of Default, the proceeds of any sale of and
any other amounts generated by the holding, leasing, operating or other use of
the Trust Property shall be applied by Beneficiary (or the receiver, if one is
appointed), to the extent that funds are so available therefrom, in accordance
with the provisions of the Credit Agreement or if not so provided, then in the
following order of priority, except to the extent otherwise required by
applicable law:

            (a) first, to the payment of the reasonable and necessary costs and
expenses of taking possession of the Trust Property and of holding, using,
leasing, repairing, improving the

                                       23
<PAGE>

same, including reasonable (i) receivers' fees, (ii) court costs, (iii)
attorneys' and accountants' fees, (iv) costs of advertisement and title search
fees, and (v) the payment of any and all Impositions, Liens, security interests
or other rights, titles or interests equal or superior to the Lien and security
interest of this Deed of Trust (except those to which the Trust Property has
been sold subject to and without in any way implying Beneficiary's prior consent
to the creation thereof);

            (b) second, to the payment of all amounts other than the Principal
Balance and accrued but unpaid interest which may be due to Beneficiary
hereunder or under the other Loan Documents, together with interest thereon as
provided herein;

            (c) third, to the payment of the Obligations in such order and
manner as Beneficiary determines in its sole discretion; and

            (d) fourth, to Trustor or as otherwise required by any Governmental
Requirement. Trustor shall be liable for any deficiency remaining.

            SECTION 7.16 Uniform Commercial Code Remedies. Beneficiary shall
have all of the rights, remedies and recourses with respect to the Personalty
and the Fixtures afforded to it by the Applicable UCC, including, without
limitation, (i) the right to conduct a unified sale of such Personalty and
Fixtures in connection with a judicial or power of sale foreclosure of any
portion of the Trust Property that constitutes real property, (ii) any the right
to take possession of the Personalty and the Fixtures or any part thereof, and
(iii) to take such other measures as Beneficiary may deem necessary for the
care, protection and preservation of the Personalty and the Fixtures, in
addition to, and not in limitation of, the other rights, remedies and recourses
afforded by this Deed of Trust and the other Loan Documents.

            SECTION 7.17 Indemnity. In connection with any action taken by
Trustee, Beneficiary and/or any Indemnitee pursuant to this Deed of Trust,
Trustee, Beneficiary, and/or any such Indemnitee and their respective
Indemnified Parties shall not be liable for any Loss sustained by Trustor
resulting from (a) an assertion that Beneficiary, or any such Indemnitee or an
Indemnified Party has received funds from the operations of the Trust Property
claimed by third Persons, or (b) any act or omission of Trustee, Beneficiary, or
any such Indemnitee or any such Indemnified Party in administering, managing,
operating or controlling the Trust Property, including in either case such Loss
as may result from the ordinary negligence of Trustee and/or Beneficiary or any
other Lender or an Indemnified Party, or which may result from strict liability,
whether under applicable law or otherwise, unless such Loss is caused by the
gross negligence, willful misconduct or bad faith of Trustee, Beneficiary and/or
such other Lender or such Indemnified Party, nor shall Trustee, Beneficiary
and/or any other Lender or an Indemnified Party be obligated to perform or
discharge any obligation, duty or liability of Trustor. Trustor shall and does
hereby agree to indemnify Trustee and/or Beneficiary and each of the other
Lenders and their respective Indemnified Parties for, and to hold Trustee,
Beneficiary and each such other Lender and each Indemnified Party harmless from,
any and all Losses which may or might be incurred by Trustee and/or Beneficiary
or any of such other Lenders or such Indemnified Parties by reason of this Deed
of Trust or the exercise of rights or

                                       24
<PAGE>

remedies hereunder, including such Losses as may result from the ordinary
negligence of Trustee, Beneficiary or any other Lender or an Indemnified Party,
or which may result from strict liability, whether under applicable law or
otherwise, unless such Loss is caused by the gross negligence, willful
misconduct or bad faith of Trustee, Beneficiary or such other Lender or such
Indemnified Party. Should Trustee, Beneficiary and/or any other Lender or an
Indemnified Party make any expenditure on account of any such Losses, the amount
thereof, including costs, expenses and reasonable attorneys' fees, shall be a
demand obligation (which obligation Trustor hereby expressly promises to pay)
owing by Trustor to Trustee and/or Beneficiary and shall bear interest from the
date expended until paid at the Default Rate, shall be a part of the Obligations
and shall be secured by this Deed of Trust and the other Loan Documents. Trustor
hereby assents to, ratifies and confirms any and all actions of Trustee and/or
Beneficiary with respect to the Trust Property taken under this Deed of Trust.
The liabilities of Trustor, as set forth in this Section 7.17, shall survive the
termination of this Deed of Trust and the payment and performance of the
Obligations.

                                  ARTICLE VIII

                                     TRUSTEE

            SECTION 8.01 Duties, Rights, and Powers of Trustee. It shall be no
part of the duty of Trustee to see to any recording, filing or registration of
this Deed of Trust or any other instrument in addition or supplemental thereto,
or to give any notice thereof, or to see to the payment of or be under any duty
in respect of any tax or assessment or other governmental charge which may be
levied or assessed on the Trust Property, or any part thereof, or against
Trustee, or to see to the performance or observance by Trustee of any of the
covenants and agreements contained herein. Trustee shall not be responsible for
the execution, acknowledgment or validity of this Deed of Trust or of any
instrument in addition or supplemental hereto or for the sufficiency of the
security purported to be created hereby, and makes no representation in respect
thereof or in respect of the rights of Beneficiary. Trustee shall have the right
to confer with counsel upon any matters arising hereunder and shall be fully
protected in relying as to legal matters on the advice of counsel. Trustee shall
not incur any personal liability hereunder except for Trustee's own gross
negligence or willful misconduct, and Trustee shall have the right to rely on
any instrument, document or signature authorizing or supporting any action taken
or proposed to be taken by Trustee hereunder, believed by Trustee in good faith
to be genuine.

            SECTION 8.02 Successor Trustee. From time to time, by a writing
signed and acknowledged by Beneficiary and filed for record in the office of the
recorder of the County in which the Land is situated, Beneficiary may appoint
another trustee to act in the place and stead of Trustee or any successor. Such
writing shall refer to this Deed of Trust and set forth the date, book and page
of its recordation. The recordation of such instrument of substitution shall
discharge Trustee herein named and shall appoint the new trustee as the trustee
hereunder with the same effect as if originally named Trustee herein. A writing
recorded pursuant to the provisions of this Section 8.02 shall be conclusive
proof of the proper substitution of such new trustee.

                                       25
<PAGE>

            SECTION 8.03 Retention of Moneys. All moneys received by Trustee
shall, until used or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be segregated in any manner
from any other moneys (except to the extent required by law), and Trustee shall
be under no liability for interest on any moneys received by Trustee hereunder.

            SECTION 8.04 Reconveyance. Upon written request of Beneficiary
stating all of the Obligations have been paid, performed and discharged, and the
Credit Agreement is terminated, and payment of its fees, Trustee shall reconvey,
without warranty, the Trust Property. The recitals in such reconveyance of any
matters or facts shall be conclusive proof of the truthfulness thereof. The
grantee in such reconveyance may be described as "the person or persons legally
entitled hereto" or such other description as required by law.

                                   ARTICLE IX

                                  MISCELLANEOUS

            SECTION 9.01 Instrument Construed as Deed of Trust, Etc. This Deed
of Trust may be construed as a deed of trust, chattel mortgage, conveyance,
assignment, security agreement, pledge, financing statement, hypothecation or
contract, or any one or more of them, in order to fully effectuate the liens and
security interests created hereby and the purposes and agreements set forth
herein.

            SECTION 9.02 Performance at Trustor's Expense. The cost and expense
of performing or complying with any and all of the Obligations shall be borne
solely by Trustor, and no portion of such cost and expense shall be, in any way
or to any extent, credited against any installment on or portion of the
Obligations.

            SECTION 9.03 Survival of Obligations. Each and all of the
Obligations shall survive the execution and delivery of this Deed of Trust and
shall continue in full force and effect until all of the Obligations shall have
been fully satisfied.

            SECTION 9.04 Further Assurances. Trustor, upon the request of
Beneficiary, shall execute, acknowledge, deliver and record and/or file such
further instruments, including financing statements, and do such further acts as
may be reasonably necessary, desirable or proper to carry out more effectively
the purpose of this Deed of Trust and to subject to the Liens and security
interests hereof any property intended by the terms hereof to be covered hereby,
including any renewals, additions, substitutions, replacements, betterments or
appurtenances to the then Trust Property.

            SECTION 9.05 Notices. All notices or other communications required
or permitted to be given pursuant to this Deed of Trust shall be in writing and
shall be considered properly given if given in the manner and to the addresses
prescribed by Section 11.02 of the Credit Agreement to the parties and at the
addresses set forth in the first paragraph hereof, and to the parties and at the
addresses set forth in Section 11.02 of the Credit Agreement; provided, however,
that (a) service of notice as required by the laws of any State or Commonwealth
in which portions of the Trust Property may be situated shall for all purposes
be deemed

                                       26
<PAGE>

appropriate and sufficient with the giving of such notice thereunder, and (b)
any party shall have the right to change its address for notice hereunder to any
other location within the continental United States by the giving of ten (10)
days' notice to the other party in the manner set forth above.

            SECTION 9.06 No Waiver. Any failure by Beneficiary to insist, or any
election by Beneficiary not to insist, upon strict performance by Trustor of any
of the terms, provisions or conditions of this Deed of Trust shall not be deemed
to be a waiver of the same or of any other terms, provision or condition hereof,
and Beneficiary shall have the right, at any time or times thereafter, to insist
upon strict performance by Trustor of any and all of such terms, provisions and
conditions. Beneficiary may, in Beneficiary's sole and absolute discretion, (i)
in the case of a Default, determine whether such Default has been cured, and
(ii) in the case of an Event of Default, accept or reject any proposed cure of
an Event of Default. In no event shall any provision of this Deed of Trust or
any other Loan Document which provides that Beneficiary shall have certain
rights and/or remedies only during the continuance of an Event of Default be
construed so as to require Beneficiary to accept a cure of any such Event of
Default. Unless and until Beneficiary accepts any proposed cure of an Event of
Default, such Event of Default shall be deemed to be continuing for purposes of
this Deed of Trust and the other Loan Documents.

            SECTION 9.07 Beneficiary's Right to Perform; Beneficiary's
Expenditures

            (a) Trustor agrees that if Trustor fails to perform any act or take
any action which Trustor is required to perform or take hereunder or under the
Credit Agreement or to pay any money which Trustor is required to pay hereunder
or under the Credit Agreement, Beneficiary may, but shall not be obligated to,
perform or cause to be performed such act or take such action or pay such money,
to the extent and only to the extent permitted under the Credit Agreement.

            (b) All costs and expenses incurred by Beneficiary (or any
Indemnified Party), including, without limitation, attorneys fees, costs and
expenses, all monies paid by (or on behalf of) Beneficiary and the monetary
value of all services performed by (or on behalf of Beneficiary) in connection
with a Default or Event of Default hereunder or under any other Loan Document,
including, without limitation, the (i) the enforcement of any term or provision
of this Deed of Trust or any other Loan Document, (ii) the performance by
Beneficiary of any obligation of Trustor under this Deed of Trust or any other
Loan Document if Beneficiary elects to so perform, in its sole and absolute
discretion, and (iii) any action Beneficiary elects to take, in its sole and
absolute discretion, to protect its interest in or the value of the Trust
Property, shall be a demand obligation owing by Trustor to Beneficiary, as the
case may be, and to the extent any payment is made to a third Person,
Beneficiary, upon making such payment, shall be subrogated to all of the rights
of the Person receiving such payment. All such costs and expenses, monies and
the monetary value of such services performed shall (x) bear interest at the
Default Rate from the date of such incurrence, payment or performance, as
applicable, until paid, and (y) constitute (together with such interest) a
portion of the Obligations and shall be secured by this Deed of Trust and all of
the other Loan Documents. If Beneficiary shall elect to pay any Imposition or
other sums due with reference to the Trust Property, Beneficiary may do so in
reliance on any bill, statement or assessment procured from the appropriate
Governmental Authority or other issuer thereof. Attorneys' fees, costs and
expenses as used herein shall

                                       27
<PAGE>

include, without limitation, such fees, costs and expenses incurred in
litigation or not, whether before or after judgment and and consultants, court
costs, expert witness fees, document reproduction expenses, costs of exhibit
preparation, courier charges, postage and communication expenses. This provision
is separate and several, and shall survive merger into any judgment.

            Trustor shall and does hereby agree that, if all or a portion of the
Obligations has prior to the maturity date fixed in the Credit Agreement, become
due or been declared due by reason of an Event of Default the entire amount then
due under the terms of this Deed of Trust and the Credit Agreement shall include
all attorneys' fees and costs and expenses which are actually incurred as stated
above.

            SECTION 9.08 Successors and Assigns. All of the terms hereof shall
apply to, be binding upon and inure to the benefit of the parties hereto, their
successors, assigns, heirs and legal representatives, and all other Persons
claiming by, through or under them; provided, however, that nothing herein shall
be deemed to imply any right on behalf of Trustor to assign its interest in any
of the Trust Property except as may be expressly set forth in the Credit
Agreement.

            SECTION 9.09 Severability. This Deed of Trust is intended to be
performed in accordance with, and only to the extent permitted by, all
applicable laws and regulations of applicable Governmental Authorities and the
provisions hereof are intended to be limited to the extent necessary that they
will not render this Deed of Trust invalid, unenforceable or not entitled to be
recorded, registered or filed under the provisions of any applicable law. If any
provision hereof or the application thereof to any Person or circumstance shall,
for any reason and to any extent, be invalid or unenforceable, neither the
remainder of this Deed of Trust nor the application of such provision to other
Persons or circumstances shall be affected thereby, but rather shall be enforced
to the greatest extent permitted by applicable law.

            SECTION 9.10 Subrogation of Trustee. This Deed of Trust is made with
full substitution and subrogation of Trustee and successors in this trust to
Trustee and Trustee and such successors assigns in and to all covenants and
warranties by others heretofore given or made in respect of the Trust Property
or any part thereof.

            SECTION 9.11 Entire Agreement and Modification. This Deed of Trust
may not be amended, revised, waived, discharged, released or terminated orally,
but only by a written instrument or instruments executed by the party against
which enforcement of the amendment, revision, waiver, discharge, release or
termination is asserted. Any alleged amendment, revision, waiver, discharge,
release or termination which is not so documented shall not be effective as to
any party.

            SECTION 9.12 Applicable Law. THIS DEED OF TRUST, THE CREDIT
AGREEMENT AND THE LOAN DOCUMENTS HAVE BEEN DELIVERED IN THE STATE OF NEW YORK.
TRUSTOR AND BENEFICIARY FURTHER AGREE AND STIPULATE THAT THIS DEED OF TRUST, THE
CREDIT AGREEMENT AND THE LOAN DOCUMENTS HAVE BEEN DELIVERED IN THE STATE OF NEW
YORK WERE NEGOTIATED, EXECUTED AND DELIVERED IN THE STATE OF NEW YORK, AND THAT
THE STATE OF NEW YORK HAS A SUBSTANTIAL

                                       28
<PAGE>

RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION. IT IS THEREFORE
THE INTENT OF TRUSTOR AND BENEFICIARY THAT THIS DEED OF TRUST SHALL BE CONSTRUED
AND INTERPRETED WITH, AND GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (WITHOUT GIVING EFFECT TO NEW YORK CHOICE OF LAW PRINCIPLES); PROVIDED,
HOWEVER, THAT THE LAWS OF THE STATE OF MISSISSIPPI SHALL APPLY TO THE CREATION,
PERFECTION AND PROCEDURES GOVERNING ENFORCEMENT OF ANY LIENS, SECURITY INTERESTS
AND ENCUMBRANCES GRANTED OR CREATED BY THIS DEED OF TRUST IN THE REAL OR
PERSONAL PROPERTY LOCATED IN (OR IN THE CASE OF INTANGIBLE PERSONAL PROPERTY,
HAVING A SITUS IN) THE STATE OF MISSISSIPPI, AND THE MANAGEMENT, OPERATION,
DISPOSITION AND REALIZATION OF THE SECURITY PROVIDED THEREBY. WITHOUT LIMITING
THE GENERALITY OF THE FOREGOING, THE LAWS OF THE STATE OF NEW YORK SHALL APPLY
TO (I) ALL MATTERS RELATING TO THE CHARGING AND COLLECTION OF INTEREST UNDER
THIS DEED OF TRUST AND WITH RESPECT TO THE OBLIGATIONS, (II) THE ENFORCEMENT OF
ALL RIGHTS UNDER THE CREDIT AGREEMENT, AND THE LOAN DOCUMENTS OTHER THAN THIS
DEED OF TRUST AND (III) THE RIGHT TO SUE TRUSTOR OR ANY OTHER PERSON OBLIGATED
UNDER THE LOAN AGREEMENT AND THE LOAN DOCUMENTS TO COLLECT ANY OUTSTANDING
OBLIGATIONS OR TO OBTAIN A JUDGMENT FOR ANY DEFICIENCY FOLLOWING FORECLOSURE
UNDER ANY ONE ACTION AND ANTIDEFICIENCY RULES. TRUSTOR HEREBY AGREES THAT
BENEFICIARY MAY ENFORCE ITS RIGHTS UNDER THIS DEED OF TRUST AND ANY OF THE OTHER
LOAN DOCUMENTS, INCLUDING THE RIGHT TO SUE TRUSTOR OR ANY PERSON OBLIGATED UNDER
THE LOAN DOCUMENTS TO COLLECT ANY OUTSTANDING OBLIGATIONS OR TO OBTAIN A
JUDGMENT FOR ANY DEFICIENCY FOLLOWING FORECLOSURE, IN ACCORDANCE WITH NEW YORK
LAW.

            SECTION 9.13 Satisfaction of Prior Encumbrance. To the extent that
proceeds advanced pursuant to the Credit Agreement are used to pay indebtedness
secured by any outstanding Lien, security interest, charge or prior encumbrance
against the Trust Property, such proceeds shall be deemed to have been advanced
by Beneficiary at Trustor's request, and Beneficiary shall be subrogated to any
and all rights, security interests and Liens owned by any owner or holder of
such outstanding Liens, security interests, charges or encumbrances,
irrespective of whether said Liens, security interests, charges or encumbrances
are released, and it is expressly understood that, in consideration of the
payment of such other indebtedness by Beneficiary, Trustor hereby waives and
releases all demands and causes of action for offsets and payments to, upon and
in connection with the said indebtedness.

            SECTION 9.14 No Partnership. Nothing contained in this Deed of Trust
is intended to, or shall be construed to, create to any extent and in any manner
whatsoever any partnership, joint venture, or association between Trustor and
Beneficiary, or in any way make Beneficiary a co-principal with Trustor with
reference to the Trust Property, and any inferences to the contrary are hereby
expressly negated.

                                       29
<PAGE>

            SECTION 9.15 Headings. The Article, Section and Subsection headings
hereof are inserted for convenience of reference only and shall in no way alter,
modify or define, or be used in construing, the text of such Articles, Sections
or Subsections.

            SECTION 9.16 Release of Deed of Trust. If all of the Obligations
shall be paid, performed and discharged and the Credit Agreement is terminated,
Beneficiary shall forthwith cause satisfaction and discharge of this Deed of
Trust to be entered upon the record, at the sole cost and expense of Trustor,
and shall execute and deliver (or cause to be executed and delivered) such
instruments of satisfaction and discharge as may be appropriate, such
instruments to be duly acknowledged and in form for recording, at the sole cost
and expense of Trustor.

            SECTION 9.17 Limitation of Obligations with Respect to Trust
Property.

            (a) Neither Trustee nor Beneficiary or any Lender shall have any
duty to protect or preserve, or any liability with respect to the protection or
preservation of, any Trust Property or to preserve rights pertaining thereto
other than the duty to use reasonable care in the custody and preservation of
any Trust Property in its actual possession. Beneficiary shall be deemed to have
exercised reasonable care in the custody and preservation of any Trust Property
in its possession if such Trust Property is accorded treatment substantially
equal to that which Beneficiary accords its own like property. Beneficiary shall
be relieved of all responsibility for any Trust Property in its possession upon
surrendering it, or tendering surrender of it, to Trustor or to such other
Person entitled thereto by applicable law.

            (b) Nothing contained in this Deed of Trust shall be construed as
requiring or obligating Trustee, Beneficiary or any Lender, and neither Trustee
nor Beneficiary or any Lender shall be required or obligated, to (i) make any
demand or inquiry as to the nature or sufficiency of any payment received by it,
or present or file any claim or notice or take any action with respect to any
Trust Property or the monies due or to become due thereunder in connection
therewith, (ii) ascertain or take action with respect to calls, conversions,
exchanges, maturities, tenders, offers or other matters relating to any Trust
Property, whether or not Beneficiary or any of the other Lenders has or is
deemed to have knowledge or notice thereof, (iii) take any necessary steps to
preserve rights against any prior parties with respect to any Trust Property, or
(iv) notify Trustor or any other Person of any decline in the value of any Trust
Property.

            SECTION 9.18 Inconsistency with Credit Agreement. To the fullest
extent possible, the terms and provisions of the Credit Agreement shall be read
together with the terms and provisions of this Deed of Trust such that the terms
and provisions of this Deed of Trust shall supplement, rather than conflict
with, the terms and provisions of the Credit Agreement; provided, however, that,
notwithstanding the foregoing, in the event any of the terms or provisions of
this Deed of Trust conflict with any of the terms or provisions of the Credit
Agreement, such that it is impractical for such terms or provisions to coexist,
the terms or provisions of the Credit Agreement shall govern and control for all
purposes; and, provided further, that the inclusion in this Deed of Trust of
terms and provisions, supplemental rights or remedies in favor of a secured
party but which are not addressed in the Credit Agreement shall not be deemed to
be a conflict with the Credit Agreement and all such additional terms,
provisions, supplemental rights or remedies contained herein shall be given full
force and effect.

                                       30
<PAGE>

            SECTION 9.19 Limitation on Interest Payable. It is the intention of
the parties to conform strictly to the usury laws, whether state or federal,
that are applicable to the transaction of which this Deed of Trust is a part.
All agreements between Trustor and Beneficiary, or any Lender, whether now
existing or hereafter arising and whether oral or written, are hereby expressly
limited so that in no contingency or event whatsoever shall the amount paid or
agreed to be paid by Trustor for the use, forbearance or detention of the money
to be loaned under the Credit Agreement or any other Loan Document, or for the
payment or performance of any covenant or obligation contained herein or in the
Credit Agreement or any other Loan Document, exceed the maximum amount
permissible under applicable federal or state usury laws. If, under any
circumstances, fulfillment of any such provision, at the time performance of
such provision shall be due, shall involve exceeding the limit of validity
prescribed by applicable law, then the obligation to be fulfilled shall be
reduced to the limit of such validity. If, under any circumstances, Trustor
shall have paid an amount of money which is deemed to be interest and such
interest would exceed the highest lawful rate, such amount that would be
excessive interest under applicable usury laws shall be applied to the reduction
of the principal amount owing in respect of the Obligations and not to the
payment of interest, or if such excessive interest exceeds the unpaid balance of
principal and any other amounts due hereunder, the excess shall be refunded to
Trustor. All sums paid or agreed to be paid for the use, forbearance or
detention of the principal under any extension of credit by Beneficiary (or
Lender) shall, to the extent permitted by applicable law, and to the extent
necessary to preclude exceeding the limit of validity prescribed by applicable
law, be amortized, prorated, allocated and spread from the date of this Deed of
Trust until payment in full of the Obligations so that the actual rate of
interest on account of such principal amounts is uniform throughout the term
hereof.

            SECTION 9.20 Covenants To Run With the Land. All of the grants,
representations, warranties, undertakings, covenants, terms, provisions and
conditions in this Deed of Trust shall run with the Land and shall apply to and
bind the successors and assigns of Trustor. If there shall be more than one
trustor, the covenants, representations and warranties made herein shall be
deemed to be joint and several.

            SECTION 9.21 Amount Secured; Last Dollar. So long as the balance of
the Obligations exceeds the portion of the Obligations secured by this Deed of
Trust, no payment on account of the Obligations shall be deemed to be applied
against or to reduce the portion of the Obligations secured by this Deed of
Trust, but shall, instead, be deemed to be applied against only such portions of
the Obligations that are not secured by this Deed of Trust.

            SECTION 9.22 Defense of Claims. Trustor shall promptly notify
Beneficiary in writing of the commencement of any legal proceedings affecting
Trustor's title to the Trust Property or Beneficiary's Lien on or security
interest in the Trust Property, or any part thereof, and shall take all such
action, employing attorneys agreeable to Beneficiary, as may be necessary to
preserve Trustor's and Beneficiary's rights affected thereby. If Trustor fails
or refuses to adequately or vigorously, in the sole judgment of Beneficiary,
defend Trustor's or Beneficiary's rights to the Trust Property, Beneficiary may
take such action on behalf of and in the name of Trustor and at Trustor's
expense. Moreover, Beneficiary may take (or cause its agents to take) such
independent action in connection therewith as they may in their discretion deem
proper, including, without limitation, the right to employ independent counsel
and to intervene in any suit affecting the Trust Property. All costs, expenses
and attorneys' fees incurred by Beneficiary

                                       31
<PAGE>

(or its agents) pursuant to this Section 9.22 or in connection with the defense
by Beneficiary of any claims, demands or litigation relating to Trustor, the
Trust Property or the transactions contemplated in this Deed of Trust shall be
paid by Trustor on demand, plus interest thereon from the date of the advance by
Beneficiary until reimbursement of Beneficiary at the Default Rate.

            SECTION 9.23 Exculpation Provisions. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS DEED OF TRUST; AND AGREES
THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS DEED OF TRUST;
THAT IT HAS IN FACT READ THIS DEED OF TRUST AND IS FULLY INFORMED AND HAS FULL
NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS DEED OF TRUST;
THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE
THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS DEED OF TRUST AND
HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS DEED OF TRUST; AND
THAT IT RECOGNIZES THAT CERTAIN TERMS OF THIS DEED OF TRUST RESULT IN ONE PARTY
ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING
THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO
AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF
ANY EXCULPATORY PROVISION OF THIS DEED OF TRUST ON THE BASIS THAT THE PARTY HAD
NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT
"CONSPICUOUS."

            SECTION 9.24 No Merger of Estates. So long as any part of the
Obligations remain unpaid, unperformed or undischarged, the fee, easement and
leasehold estates to the Trust Property shall not merge but rather shall remain
separate and distinct, notwithstanding the union of such estates either in
Trustor, Beneficiary, any lessee, any third-party purchaser or otherwise.

            SECTION 9.25 Intentionally Deleted.

            SECTION 9.26 Intentionally Deleted.

            SECTION 9.27 Intentionally Deleted.

            SECTION 9.28 Release and Reconveyance. Lender will release and
reconvey its interest under this Deed of Trust to the Trust Property as required
by Section 7.04 of the Credit Agreement.

             [NO FURTHER TEXT ON THIS PAGE; SIGNATURE PAGE FOLLOWS]

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<PAGE>

      IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date
first above written.

                                   TRUSTOR:

                                   LAKES GAMING-MISSISSIPPI, LLC, a
                                   Minnesota limited liability company

                                   By: /s/ Timothy J. Cope
                                       ----------------------------------------
                                   Name:  Timothy J. Cope
                                         --------------------------------------
                                     its: President and Chief Financial Officer
                                          -------------------------------------

                                       33
<PAGE>

STATE OF MISSISSIPPI  )
                      ) ss.
COUNTY OF             )

Personally appeared before me, the undersigned authority in and for the said
county and state, on this ____ day of _________ , 2006, within my jurisdiction,
the within named _________, who acknowledged that he/she is _________ of Lakes
Gaming-Mississippi, LLC, a Minnesota limited liability company, and that for and
on behalf of the said limited liability company, and as its act and deed he/she
executed the above and foregoing instrument, after first having been duly
authorized by said limited liability company so to do.

                                       34
<PAGE>

                                    EXHIBIT A

                                LEGAL DESCRIPTION

                                   Exhbit A-1

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