Document:

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                                                                    EXHIBIT 10.3

                                                                  EXECUTION COPY

                                PLEDGE AGREEMENT

      THIS PLEDGE AGREEMENT (as amended (including any amendment and restatement
hereof), supplemented or otherwise modified from time to time, this "Pledge
Agreement") is made and entered into as of June 22, 2006 by and among each of
the undersigned pledgors (each, individually a "Pledgor" and, collectively, the
"Pledgors") in favor of BANK OF AMERICA, N.A. ("BofA"), in its capacity as
collateral agent for the Secured Parties (as defined in the Credit Agreement
referred to below) (the "Agent").

                                   WITNESSETH:

      WHEREAS, pursuant to that certain Credit Agreement dated as of the date
hereof by and among the Borrower, Holdings, Agent and Lenders (including all
annexes, exhibits and schedules thereto, as from time to time amended, restated,
supplemented or otherwise modified, the "Credit Agreement"), Lenders have agreed
to make the Loans on behalf of the Borrower;

      WHEREAS, Holdings and the Subsidiary Grantors have executed guarantees to
the Lenders in respect of the obligations of the Borrower;

      WHEREAS, each Pledgor is the owner of the outstanding shares of stock,
membership interests, limited liability company interests, partnership interests
or other equity interests (the "Pledged Shares") set forth on Schedule I hereto
(as amended from time to time, "Schedule I") of each of the Persons listed on
Schedule I hereto (the "Issuers"), and is the holder of those certain promissory
notes set forth on Schedule II hereto (as amended from time to time, "Schedule
II") (the "Pledged Notes"; and together with the Pledged Shares, the "Pledged
Securities");

      WHEREAS, in order to induce the Agent and the Lenders to enter into the
Credit Agreement and the other Loan Documents and make the extensions of credit
to the Borrower, each Pledgor has agreed to grant a continuing Lien on and
security interest in the Pledged Collateral (as hereinafter defined) to secure
its Obligations (as defined in the Credit Agreement);

                                    AGREEMENT

      NOW THEREFORE, in consideration of the premises and in order to induce the
Lenders to make Loans to the Borrower, each Pledgor hereby agrees with Agent as
follows:

      SECTION 1 DEFINED TERMS. The following terms shall have the following
respective meanings:

      "Foreign Subsidiary" has the meaning specified in Section 2 hereof.

      "Issuers" has the meaning specified in the recitals hereof.

      "Pledged Collateral" has the meaning specified in Section 2 hereof.

      "Pledged Debt" has the meaning specified in Section 2 hereof.

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      "Pledged Note" has the meaning specified in the recitals hereof.

      "Pledged Securities" has the meaning specified in the recitals hereof.

      "Pledged Shares" has the meaning specified in the recitals hereof.

      "Proxy" has the meaning specified in Section 4 hereof.

      "Secured Obligations" has the meaning specified in Section 3 hereof.

      "Securities Act" has the meaning specified in Section 13 hereof.

All other capitalized terms used herein and not otherwise defined herein shall
have the meanings given in the Credit Agreement, or, if not defined therein, the
meanings set forth in the UCC, except where the context otherwise requires.

      SECTION 2 PLEDGE. Each Pledgor hereby pledges to Agent, for its benefit
and the benefit of the Lenders, and grants to Agent, for its benefit and the
benefit of the Lenders, a continuing first priority and perfected security
interest in, its right, title and interest in and to the following
(collectively, the "Pledged Collateral"):

            (a) the Pledged Shares and any certificates representing the Pledged
Shares, and all products and proceeds of any of the Pledged Shares, including,
without limitation, all dividends, cash, instruments, subscriptions, warrants
and any other rights and options and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Pledged Shares;

            (b) all additional shares of stock, membership interests, limited
liability company interests, and partnership interest of, or other equity
interest in, any other Person (which shall be an "Issuer" under and as defined
in this Pledge Agreement) from time to time acquired by such Pledgor in any
manner, and all certificates representing such additional shares (any such
additional shares shall constitute part of the Pledged Shares under and as
defined in this Pledge Agreement), and all products and proceeds of any of such
additional Pledged Shares, including, without limitation, all dividends,
distributions, cash, instruments, subscriptions, warrants and any other rights
and options and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
additional Pledged Shares;

            (c) all voting rights in respect of the Pledged Shares and all
rights to manage and administer the business of the Issues, together with all
other rights and interests arising out of or related to the interests in the
Pledged Shares;

            (d) the Pledged Notes and the instruments representing the Pledged
Notes and any collateral security at any time held by such Pledgor for any such
Pledged Note, and all products and proceeds of the Pledged Notes, including,
without limitation, all interest and principal payments, instruments, and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for the Pledged Notes;

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            (e) all additional promissory notes from time to time held by such
Pledgor in any manner, and the instruments representing such additional
promissory notes (any such additional promissory notes shall constitute part of
the Pledged Notes under and as defined in this Pledge Agreement) and all
products and proceeds of any such additional promissory notes, including,
without limitation, all interest and principal payments, instruments, and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any such additional promissory notes together with
the Pledged Notes, the "Pledged Debt"; and

            (f) all other claims of any kind or nature and any instruments,
certificates, chattel paper or other writings evidencing such claims, whether in
contract or tort and whether arising by operation of law, consensual agreement
or otherwise, at any time acquired by such Pledgor against any of its direct and
indirect Subsidiaries;

provided, however, that the foregoing clauses (a) through (c) shall not apply
(i) to the capital stock of any Foreign Subsidiary (as hereinafter defined), to
the extent (and only to the extent) that the application of such clauses would
require the pledge hereunder of more than 65% (or such other maximum amount as
may be pledged under Section 956 of the Code (as the same may be amended after
the date hereof) without causing such Foreign Subsidiary to be treated as
holding United States property for purposes of Section 956 of the Code) of each
class of the voting capital stock of any Foreign Subsidiary, (ii) the capital
stock of any Subsidiary owned directly or indirectly by a Foreign Subsidiary,
(For purposes hereof, the term "Foreign Subsidiary" means any "controlled
foreign corporation" within the meaning of Section 957(a) of the Code, as to
which any Pledgor is a "United States shareholder" as defined in Section 951(b)
of the Code.) (iii) the stock of any Excluded Subsidiaries, (iv) Excluded Debt
and (v) World Poker Shares.

      SECTION 3 SECURITY FOR OBLIGATIONS. This Pledge Agreement secures, and the
Pledged Collateral of each Pledgor is collateral security for, the prompt
payment and performance in full when due, whether at stated maturity, by
declaration, acceleration or otherwise (including the payment of amounts that
would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a), or any successor
provision thereto, whether or not an allowed claim), of all Obligations of the
applicable Pledgor now or hereafter existing under the Credit Agreement
(including the guarantee contained in the Credit Agreement) or any of the other
Loan Documents and all amendments, extensions or renewals thereof, whether for
principal, interest (including, without limitation, interest that, but for the
filing of a petition in bankruptcy, would accrue on such Obligations, whether or
not an allowed claim), fees, expenses or otherwise, whether now existing or
hereafter arising, voluntary or involuntary, whether or not jointly owed with
others, direct or indirect, absolute or contingent, liquidated or unliquidated,
and whether or not from time to time decreased or extinguished and later
increased, created or incurred (all such Obligations of the Pledgors being
collectively referred to herein as the "Secured Obligations").

      SECTION 4 DELIVERY OF PLEDGED COLLATERAL. All certificates or instruments
representing or evidencing the Pledged Collateral shall be delivered to and held
by or on behalf of the Agent pursuant hereto. Such certificates or instruments
shall be in suitable form for transfer by delivery, or shall be accompanied by
duly executed acknowledgments of the Issuers of the Pledged Shares in
substantially the form of Exhibit A hereto, and instruments of transfer

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or assignment in blank (or such other documents or agreements necessary to give
the Agent "control" within the meaning of the UCC), all in form and substance
reasonably satisfactory to the Agent. Each Pledgor shall execute and deliver to
the Agent a proxy, substantially in the form of Exhibit B hereto (a "Proxy"),
for each Issuer of the Pledged Shares pledged by it. Each Proxy shall be
irrevocable until the security interests granted in the Pledged Collateral are
terminated in accordance with this Pledge Agreement. If no Event of Default has
occurred and is continuing, such Collateral delivered pursuant to this Section,
4, held by the Agent in respect of a Project in accordance with the Terms of the
Loan Documents shall be returned to the applicable Loan Party within two (2)
Business Days from the date such Loan Party notifies the Agent that an Amendment
to such Collateral is to be made, it being understood that such Loan Party
shall, within two (2) Business Days of receipt thereof, return the amended
Collateral to the Agent.

      SECTION 5 REPRESENTATIONS AND WARRANTIES. Each Pledgor represents and
warrants as to the Pledged Collateral pledged by it as follows:

            (a) Its Pledged Shares have been duly authorized and validly issued
and are fully paid and non-assessable. Its Pledged Notes have been duly
authorized and executed by the respective issuers thereof and constitute the
legal, valid and binding obligations of such respective issuers.

            (b) Such Pledgor is the legal and beneficial owner of the Pledged
Collateral pledged by it, free and clear of any Lien on the Pledged Collateral
except for Permitted Liens under clause (b) of the definition of Permitted
Liens.

            (c) Upon the delivery to the Agent of the Pledged Collateral pledged
by such Pledgor and the filing of a UCC-1 financing statement, the pledge of
such Pledged Collateral pursuant to this Pledge Agreement will create a valid
and perfected first priority Lien in such Pledged Collateral securing the
payment of such Pledgor's Obligations for the benefit of the Agent and the
Lenders.

            (d) No authorization, approval, or other action by, and no notice to
or filing with, any Governmental Authority is required either (i) for the pledge
by such Pledgor of Pledged Collateral pursuant to this Pledge Agreement or for
the execution, delivery or performance of this Pledge Agreement by such Pledgor
or (ii) for the exercise by the Agent of the voting or other rights provided for
in this Pledge Agreement or the remedies in respect of the Pledged Collateral
pursuant to this Pledge Agreement (except as may be required in connection with
any disposition of the Pledged Securities by laws affecting the offering and
sale of securities generally).

            (e) Such Pledgor has full power and authority to enter into this
Pledge Agreement and has the right to vote, pledge and grant a security interest
in the Pledged Shares pledged by it and to pledge and grant a security interest
in the Pledged Notes and the other Pledged Collateral pledged by it, in each
case as provided by this Pledge Agreement.

            (f) This Pledge Agreement has been duly authorized, executed and
delivered by such Pledgor and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms except as
enforceability may be limited by bankruptcy, insolvency,

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reorganization, receivership, moratorium or other laws affecting the rights and
remedies of creditors generally and by general equitable principles.

            (g) The Pledged Shares constitute the percentage of the authorized,
issued and outstanding capital stock of the applicable Issuers set forth on
Schedule I hereto and constitute no less than 65% (or such other maximum amount
as may be pledged under Section 956 of the Code (as the same may be amended
after the date hereof) without causing such Foreign Subsidiary to be treated as
holding United States property for purposes of Section 956 of the Code) of the
outstanding voting capital stock of each direct Foreign Subsidiary and no less
than 100% of the outstanding capital stock of each other Subsidiary of such
Pledgor, unless such Subsidiary is owned directly or indirectly by a Foreign
Subsidiary.

            (h) The Pledged Notes listed on Schedule II hereto constitute the
only promissory notes held by such Pledgor as of the date hereof.

            (i) Except for the Pledged Securities, there are no instruments,
certificates, securities or other writings, or any chattel paper, evidencing or
representing any interest in or claim of such Pledgor against any direct or
indirect Subsidiary of such Pledgor).

            (j) The terms of each of the Pledged Shares constituting interests
in a partnership or limited liability company and the terms of each partnership
agreement or limited liability company agreement of each Issuer expressly
provide that they are securities governed by Article 8 of the Uniform Commercial
Code as in effect in each applicable jurisdiction.

      SECTION 6 FURTHER ASSURANCES. Each Pledgor agrees that at any time and
from time to time, at its expense, it will promptly execute and deliver, or
cause to be executed and delivered, all stock powers, note powers, allonges,
endorsements, proxies, assignments, acknowledgments, financing statements,
instruments and documents and take all further action, at the Agent's request,
that the Agent reasonably deems necessary or advisable in order to perfect any
security interest granted or purported to be granted hereby or to enable the
Agent to exercise and enforce its rights and remedies hereunder with respect to
any Pledged Collateral and to carry out the provisions and purposes hereof. Each
Pledgor will, promptly upon request, provide to the Agent all information and
evidence it may reasonably request concerning the Pledged Collateral to enable
the Agent to enforce the provisions of this Pledge Agreement.

SECTION 7 VOTING RIGHTS; DIVIDENDS; ETC.

            (a) Until the Agent terminates a Pledgor's rights to exercise its
voting and other consensual rights pursuant to Section 7(g) hereof, such Pledgor
shall be entitled to exercise any and all voting and other consensual rights
pertaining to the Pledged Shares or any part thereof for any purpose not
inconsistent with the terms of this Pledge Agreement, the Credit Agreement or
the other Loan Documents; provided, however, that no Pledgor shall exercise or
shall refrain from exercising any such right if such action or inaction could
reasonably be expected to have a Material Adverse Effect, could reasonably be
expected to adversely affect the value of any of the Pledged Collateral or the
validity, priority or perfection of the security interests granted hereunder or
the enforceability hereof or would otherwise be inconsistent with

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or violate any provisions of this Pledge Agreement, the Credit Agreement or any
of the other Loan Documents.

            (b) So long as no Event of Default shall have occurred and be
continuing, the Pledgors shall be entitled to receive all cash payments of
interest and principal paid from time to time with respect to the Pledged Notes
to the extent permitted to be paid under the Credit Agreement.

            (c) So long as no Event of Default shall have occurred and be
continuing, the Pledgors shall be entitled to receive all cash dividends paid
from time to time in respect of the Pledged Shares to the extent permitted to be
paid under the Credit Agreement.

            (d) Except as otherwise provided in the Credit Agreement, upon the
occurrence and during the continuance of an Event of Default any and all (i)
dividends or other distributions and interest or principal paid or payable in
the form of instruments and other property (other than cash interest and
principal payments permitted under Section 7(b) hereof and cash dividends
permitted under Section 7(c) hereof) received, receivable or otherwise
distributed in respect of, or in exchange for, any Pledged Collateral, (ii)
dividends and other distributions paid or payable in cash received, receivable
or otherwise distributed in respect of any Pledged Shares in connection with a
partial or total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in-surplus, and (iii) cash paid, payable or
otherwise distributed in redemption of, or in exchange for, any Pledged Shares,
shall in each case be delivered forthwith to the Agent to hold as Pledged
Collateral and shall, if received by a Pledgor, be received in trust for the
benefit of the Agent, be segregated from the other property or funds of such
Pledgor, and be forthwith delivered to the Agent as Pledged Collateral in the
same form as so received (with any necessary or requested endorsement).

            (e) Upon the occurrence and during the continuance of an Event of
Default, the Agent shall execute and deliver (or cause to be executed and
delivered) to each Pledgor all such proxies and other instruments as such
Pledgor may reasonably request for the purpose of enabling such Pledgor to
exercise the voting and other rights which it is entitled to exercise pursuant
to Section 7(a) above.

            (f) Upon the occurrence and during the continuance of an Event of
Default, all dividends or other distributions and all interest and principal
payments which are received by any Pledgor contrary to the provisions of this
Section 7 shall be received in trust for the benefit of the Agent and the
Lenders, shall be segregated from other funds of such Pledgor and shall be
forthwith paid over to the Agent as Pledged Collateral in the same form as so
received (with any necessary or requested endorsement).

            (g) Upon the occurrence and during the continuance of an Event of
Default, the Agent may terminate any Pledgor's rights to exercise the voting and
other consensual rights which such Pledgor would otherwise be entitled to
exercise pursuant to Section 7(a) either by giving written notice of such
termination to such Pledgor or by transferring such Pledged Collateral into the
name of the Agent or its nominee and the Agent shall thereupon have the sole
right to exercise such voting and other consensual rights.

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            (h) Upon the occurrence and during the continuance of an Event of
Default, all cash payments of interest and principal with respect to the Pledged
Notes and all cash dividends or other distributions payable in respect of the
Pledged Shares shall be paid directly to the Agent and, if received by any
Pledgor, shall be received in trust for the benefit of the Agent and the
Lenders, shall be segregated from other funds of such Pledgor, and shall be
forthwith paid over to the Agent as Pledged Collateral in the same form as so
received (with any necessary or requested endorsements) and each Pledgor's right
to receive such cash payments pursuant to Sections 7(b) and 7(c) hereof shall
immediately cease.

            (i) Notwithstanding any other provision of this Pledge Agreement,
this Pledge Agreement shall not in any way be deemed to obligate the Agent, its
nominee or any purchaser at any foreclosure sale to assume any Pledgor's
obligations, duties, expenses or liabilities under any partnership agreement or
limited liability company agreement or any other agreement unless the Agent,
such nominee or such purchaser expressly agrees in writing to assume such
obligations. Neither the grant of a security interest in the Pledged Shares nor
the exercise by the Agent of any of its rights and remedies hereunder nor any
action in connection with a foreclosure on the Pledged Shares shall be deemed to
constitute the Agent a partner of any partnership or a member of any limited
liability company; provided, however, that in the event that the Agent, or its
nominee or any purchaser of Pledged Shares at a foreclosure sale elects to
become a substituted partner or member in place of a Pledgor, the Agent, such
nominee or such purchaser may elect to do so and shall agree in writing to be
bound by the terms of the applicable partnership or limited liability company
agreement.

      SECTION 8 TRANSFERS AND OTHER LIENS; ADDITIONAL SHARES.

            (a) Each Pledgor agrees that it will not (i) sell or otherwise
dispose of, or grant any option with respect to, any of the Pledged Collateral,
except as permitted under the Credit Agreement; (ii) create or permit to exist
any Lien upon or with respect to any of the Pledged Collateral, except for the
security interest granted under this Pledge Agreement or under the Security
Agreement and except for Permitted Liens under clause (b) of the definition of
Permitted Liens; or (iii) except as otherwise permitted by the Credit Agreement,
enter into any agreement or understanding that purports to or may restrict or
inhibit the Agent's rights or remedies hereunder, including, without limitation,
the Agent's right to sell or otherwise dispose of the Pledged Collateral.

            (b) Subject to the proviso of Section 2, each Pledgor agrees that it
will pledge and deliver to the Agent hereunder, promptly upon its acquisition
(directly or indirectly) thereof, any and all additional shares of stock or
other equity interests, notes or other securities of the Issuers or any other
Person and all other Pledged Collateral.

            (c) Subject to the proviso of Section 2, each Pledgor will, promptly
upon the purchase or acquisition of any additional shares of stock, membership
interests, limited liability company interests, partnership interests or other
ownership interests of any Person or any promissory notes or other instruments,
deliver to the Agent such Pledged Shares (or a control agreement with respect to
any uncertificated Pledged Shares) or Pledged Notes as required by Section 4
above, together (in the case of any Pledged Shares) with a Proxy, and (in either
case) a Pledge Amendment, duly executed by such Pledgor, in substantially the
form of Exhibit C hereto

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(a "Pledge Amendment"), in respect of the additional shares or instruments which
are to be pledged pursuant to this Pledge Agreement, and if any Pledged Shares
are capital stock of a Person organized under the laws of any jurisdiction other
than a state of the United States, such other agreements and instruments as may
be required to create and perfect a valid Lien under the laws of such
jurisdiction. Each Pledgor hereby authorizes the Agent to attach each Pledge
Amendment to this Pledge Agreement and agrees that all shares or instruments
listed on any Pledge Amendment delivered to the Agent shall for all purposes
hereunder be considered Pledged Collateral.

            (d) Each Pledgor with respect to any Issuer which is a partnership
or a limited liability company covenants that it will not agree to amend or
repeal any provision of any Pledged Share or any partnership or limited
liability company agreement providing that the applicable Pledged Shares are
securities subject to Article 8 of the applicable UCC.

            (e) Each Pledgor which is a partner in a partnership or a member of
a limited liability company and has pledged its Pledged Shares therein hereby
agrees that the Agent may exercise all of its rights and remedies hereunder,
including the voting rights and rights to manage and administer the Issuer, upon
the occurrence and during the continuance of an Event of Default and in
accordance with Section 7(g) hereof.

      SECTION 9 AGENT APPOINTED ATTORNEY-IN-FACT. Effective upon the occurrence
and during the continuance of an Event of Default, each Pledgor hereby appoints
the Agent as such Pledgor's attorney-in-fact, with full authority in the place
and stead of such Pledgor and in the name of such Pledgor or otherwise, from
time to time in the Agent's discretion to take any action and to execute any
instrument which the Agent may deem necessary or advisable to further perfect
and protect the security interest granted hereby, including, without limitation,
to receive, endorse and collect all instruments made payable to such Pledgor
representing any dividend, interest or principal payment or other distribution
in respect of the Pledged Collateral or any part thereof and to give full
discharge for the same.

      SECTION 10 AGENT MAY PERFORM. If any Pledgor fails to perform any
agreement contained herein, the Agent may itself perform, or cause performance
of, such agreement, and the reasonable expenses of the Agent incurred in
connection therewith shall be payable by such Pledgor under Section 14 hereof.

      SECTION 11 NO ASSUMPTION OF DUTIES; REASONABLE CARE. The rights and powers
granted to the Agent hereunder are being granted in order to preserve and
protect the Agent's security interest in and to the Pledged Collateral granted
hereby and shall not be interpreted to, and shall not, impose any duties on the
Agent in connection therewith except the duty to exercise reasonable care in the
custody and preservation of the Pledged Collateral in its possession. The Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of the Pledged Collateral in its possession if the Pledged
Collateral is accorded treatment substantially equal to that which the Agent
accords its own property, it being understood that the Agent shall not have any
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Pledged Collateral, whether or not the Agent has or is deemed to have knowledge
of such matters, or (ii) taking any necessary steps to preserve rights against
any parties with respect to any Pledged Collateral.

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      SECTION 12 SUBSEQUENT CHANGES AFFECTING PLEDGED COLLATERAL. Each Pledgor
represents to the Agent that it has made its own arrangements for keeping
informed of changes or potential changes affecting the Pledged Collateral
(including, but not limited to, rights to convert, rights to subscribe, payment
of dividends, payments of interest and/or principal, reorganization or other
exchanges, tender offers and voting rights), and each Pledgor agrees that the
Agent shall have no responsibility or liability for informing such Pledgor of
any such changes or potential changes or for taking any action or omitting to
take any action with respect thereto.

      SECTION 13 REMEDIES UPON DEFAULT. If any Event of Default shall have
occurred and be continuing, the Agent shall, in addition to all other rights
given by law or by this Pledge Agreement, the Credit Agreement, the other Loan
Documents, or otherwise, have all of the rights and remedies with respect to the
Pledged Collateral of a secured party under the UCC in effect in the State of
New York at that time and all rights and remedies of a secured creditor under
any other applicable laws and the Agent may, without notice and at its option,
transfer or register, and each Pledgor shall register or cause to be registered
upon request therefor by the Agent, the Pledged Collateral or any part thereof
on the books of the Issuers thereof into the name of the Agent or the Agent's
nominee(s), indicating that such Pledged Collateral is subject to the security
interest hereunder. In addition, with respect to any Pledged Collateral which
shall then be in or shall thereafter come into the possession or custody of the
Agent, the Agent may sell or cause the same to be sold at any broker's board or
at any public or private sale, in one or more sales or lots, at such price or
prices as the Agent may deem best, for cash or on credit or for future delivery,
without assumption of any credit risk, all in accordance with the terms and
provisions of the Credit Agreements and this Pledge Agreement. The purchaser of
any or all Pledged Collateral so sold shall thereafter hold the same absolutely,
free from any claim, encumbrance, Lien or right of any kind whatsoever. Unless
any of the Pledged Collateral threatens to decline speedily in value or is or
becomes of a type sold on a recognized market, the Agent will give the
applicable Pledgor reasonable notice of the time and place of any public sale
thereof, or of the time after which any private sale or other intended
disposition is to be made. Any sale of the Pledged Collateral conducted in
conformity with reasonable commercial practices of banks, insurance companies,
commercial finance companies, or other financial institutions disposing of
property similar to the Pledged Collateral shall be deemed to be commercially
reasonable. Any requirements of reasonable notice shall be met if such notice is
mailed to Pledgors as provided in Section 16.1 below, at least ten (10) days
before the time of the sale or disposition. Any other requirement of notice,
demand or advertisement for sale is, to the greatest extent permitted by law,
waived. The Agent may, in its own name or in the name of a designee or nominee,
buy any of the Pledged Collateral at any public sale and, if permitted by
applicable law, at any private sale. All expenses (including court costs and
reasonable attorneys' fees, expenses and disbursements) of, or incident to, the
enforcement of any of the provisions hereof shall be recoverable from the
proceeds of the sale or other disposition of the Pledged Collateral. The Agent
shall be under no obligation to delay a sale of any of the Pledged Collateral
for the period of time necessary to permit the issuer of such securities to
register such securities for public sale under the Securities Act of 1933, as
from time to time amended (the "Securities Act"), or under any other applicable
securities laws, even if the applicable Issuer would agree to do so. In view of
the fact that the Securities Act and other applicable securities laws may impose
certain restrictions on the method by which a sale of the Pledged Collateral may
be effected after an Event of Default, each Pledgor agrees that upon the
occurrence and during the continuation of any Event of Default, the Agent may,
from time to time, attempt to

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sell all or any part of the Pledged Collateral by means of a private sale,
restricting the prospective purchasers to those who will represent and agree
that they are purchasing for investment only and not for distribution. Each
Pledgor acknowledges that any such private sales may be at prices and on terms
less favorable to the Agent than those obtainable through a public sale without
such restrictions (including, without limitation, a public offering made
pursuant to a registration statement under the Securities Act or other
applicable securities laws) and, notwithstanding such circumstances, each
Pledgor agrees that any such private sale shall be deemed to have been made in a
commercially reasonable manner and that the Agent shall have no obligation to
engage in public sales and no obligation to delay the sale of any Pledged
Collateral for the period of time necessary to permit the Issuer thereof to
register it for a form of public sale requiring registration under the
Securities Act or under any other applicable securities laws. Each Pledgor
waives any claims against the Agent arising by reason of the fact that the price
at any private sale was less than the price that might have been obtained at a
public sale, or was less than the Secured Obligations of the applicable Pledgor,
even if the Agent shall accept the first offer received and does not offer the
Pledged Collateral to more than one prospective purchaser.

      In addition, upon the occurrence and during the continuance of an Event of
Default, all rights of each Pledgor to exercise the voting and other rights
which it would otherwise be entitled to exercise may cease, and all such rights
shall thereupon become vested in the Agent as provided in and subject to the
terms of Section 7(g) hereof.

      SECTION 14 EXPENSES. The Pledgors will, upon demand, jointly and
severally, pay to the Agent the amount of any and all reasonable costs and
expenses, including, without limitation, the reasonable fees, expenses and
disbursements of its counsel, of any investment banking firm or business broker
and of any other experts and agents retained by the Agent, which the Agent may
incur in connection with (i) the administration of this Pledge Agreement, (ii)
the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Agent hereunder or (iv) the failure by
any Pledgor to perform or observe any of the provisions hereof.

      SECTION 15 SECURITY INTEREST ABSOLUTE. All rights of the Agent and the
security interests hereunder, and all obligations of the Pledgors hereunder,
shall be absolute and unconditional irrespective of, and unaffected by:

            (a) any lack of validity or enforceability of any Loan Document;

            (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other amendment or
waiver of or any consent to any departure from any Loan Document;

            (c) any exchange, surrender, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from any guaranty, for all or any of the Secured Obligations;

            (d) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of any other Pledgor

                                       10

<PAGE>

            (e) any exercise, non-exercise or waiver of any right, remedy, power
or privilege under or in respect of this Pledge Agreement, the Credit Agreement
or any other Loan Document; or

            (f) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, any Pledgor in respect of the Secured
Obligations or of this Pledge Agreement except for the defense of termination of
this Agreement in accordance with Section 16.11.

      SECTION 16 MISCELLANEOUS PROVISIONS.

      Section 16.1 NOTICES. All notices, approvals, consents or other
communications required or desired to be given hereunder shall be in the form
and manner, and delivered to the Pledgors (or any of them), and to the Agent, at
their respective addresses set forth in Section 11.02 of the Credit Agreement.

      Section 16.2 HEADINGS. The headings in this Pledge Agreement are for
purposes of reference only and shall not affect the meaning or construction of
any provision of this Pledge Agreement.

      Section 16.3 SEVERABILITY. The provisions of this Pledge Agreement are
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Pledge Agreement in any jurisdiction.

      Section 16.4 AMENDMENTS, WAIVERS AND CONSENTS. Any amendment of this
Pledge Agreement shall not be effective unless the same shall be in writing and
signed by the Agent and the Pledgors. Any waiver of any provision of this Pledge
Agreement and any consent to any departure by the Pledgors from any provision of
this Pledge Agreement shall not be effective unless the same shall be in writing
and signed by the Agent and then such amendment or waiver shall be effective
only in the specific instance and for the specific purposes for which given.

      Section 16.5 INTERPRETATION OF AGREEMENT. Time is of the essence in each
provision of this Pledge Agreement of which time is an element. To the extent a
term or provision of this Pledge Agreement conflicts with the Credit Agreement
and is not dealt with herein with more specificity, the Credit Agreement shall
control with respect to the subject matter of such term or provision. Acceptance
of or acquiescence in a course of performance rendered under this Pledge
Agreement shall not be relevant in determining the meaning of this Pledge
Agreement even though the accepting or acquiescing party had knowledge of the
nature of the performance and opportunity for objection.

      Section 16.6 CONTINUING SECURITY INTEREST; TRANSFER OF NOTES AND SECURED
OBLIGATIONS. This Pledge Agreement shall create a continuing security interest
in the Pledged Collateral and shall (i) remain in full force and effect until
full and final payment and performance (including after the Maturity Date) of
the Secured Obligations (other than contingent indemnification obligations as to
which no claim has been made) and termination of all Commitments, (ii) be
binding upon each Pledgor, its successors, transferees and assigns, and

                                       11

<PAGE>

(iii) inure, together with the rights and remedies of the Agent hereunder, to
the benefit of the successors, transferees and assigns of the Agent and the
Lenders. Without limiting the generality of clause (iii), above, the Agent or
any Lender may, except as limited by the express terms of the Credit Agreement,
assign or otherwise transfer any Secured Obligation held by it to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to the Agent or Lenders herein, as
applicable.

      Section 16.7 REINSTATEMENT. To the maximum extent permitted by law, this
Pledge Agreement shall continue to be effective or be reinstated, as the case
may be, if at any time any amount received by the Agent or any Lender in respect
of the Secured Obligations is rescinded or must otherwise be restored or
returned by the Agent upon the insolvency, bankruptcy, dissolution, liquidation
or reorganization of any Pledgor or any other Person or upon the appointment of
any receiver, intervenor, conservator, trustee or similar official for any
Pledgor or any other Person or any substantial part of its assets, or otherwise,
all as though such payments had not been made.

      Section 16.8 SURVIVAL OF PROVISIONS. All representations, warranties and
covenants of the Pledgors contained herein shall survive the execution and
delivery of this Pledge Agreement, and shall terminate only upon the full
payment and performance by the Pledgors of the Secured Obligations (other than
contingent indemnification obligations as to which no claim has been made) and
termination of all Commitments.

      Section 16.9 SETOFF. In addition to any rights and remedies of the Lenders
provided by law, if an Event of Default exists and is continuing or the Loans
have been accelerated, each Lender is authorized at any time and from time to
time, without prior notice to the Pledgors, any such notice being waived by the
Pledgors to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, such Lender or any
Affiliate of such Lender to or for the credit or the account of any Pledgor
against any and all Obligations owing to such Lender by any Pledgor, now or
hereafter existing, irrespective of whether or not the applicable agent or such
Lender shall have made demand under this Agreement or any Loan Document and
although such Obligations may be contingent or unmatured. Each Lender agrees
promptly to notify the Pledgors and the Agent after any such set-off and
application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application.
NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE ANY RIGHT OF SET-OFF,
BANKER'S LIEN, OR THE LIKE AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF ANY
PLEDGOR HELD OR MAINTAINED BY SUCH LENDER WITHOUT THE PRIOR WRITTEN UNANIMOUS
CONSENT OF THE LENDERS.

      Section 16.10 AUTHORITY OF THE AGENT. The Agent shall have and be entitled
to exercise all powers hereunder which are specifically granted to the Agent by
the terms hereof, together with such powers as are reasonably incident thereto.
The Agent may perform any of its duties hereunder or in connection with the
Pledged Collateral by or through agents or employees and shall be entitled to
retain counsel and to act in reliance upon the advice of counsel concerning all
such matters. The Agent and its directors, officers, employees, attorneys and
agents shall be entitled to rely on any communication, instrument or document
reasonably believed by it or them to be genuine and correct and to have been
signed or sent by the proper person or persons.

                                       12

<PAGE>

      Section 16.11 RELEASE; TERMINATION OF AGREEMENT. Subject to the provisions
of Sections 16.7 and 16.8 hereof, this Pledge Agreement shall terminate upon
full payment and performance of all the Secured Obligations (other than
contingent indemnification obligations as to which no claim has been made) and
termination of all Commitments. At such time, the Agent shall, at the request
and expense of the Pledgors, reassign and redeliver to the Pledgors all of the
Pledged Collateral hereunder which has not been sold, disposed of, retained or
applied by the Agent in accordance with the terms hereof and any and all proxies
and other materials related thereto. Such reassignment and redelivery shall be
without warranty by or recourse to the Agent, except as to the absence of any
prior assignments by the Agent of its interest in the Pledged Collateral, and
shall be at the expense of the Pledgors.

      Section 16.12 COUNTERPARTS. This Pledge Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which, when so executed and delivered, shall be deemed an
original but all of which shall together constitute one and the same agreement.

      Section 16.13 GOVERNING LAW; CHOICE OF FORUM; SERVICE OF PROCESS; JURY
TRIAL WAIVER.

            (a) GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF
THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS PLEDGE AGREEMENT AND THE OBLIGATIONS ARISING
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
THAT STATE, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. THE
GRANTORS HEREBY CONSENT AND AGREE THAT THE STATE OR FEDERAL COURTS LOCATED IN
NEW YORK COUNTY, CITY OF NEW YORK, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY PLEDGOR, AGENT AND LENDERS
PERTAINING TO THIS SECURITY AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO
ANY MATTER ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS, PROVIDED, THAT AGENT, LENDERS AND THE PLEDGORS ACKNOWLEDGE
THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE OF NEW YORK COUNTY, CITY OF NEW YORK, AND, PROVIDED, FURTHER, NOTHING IN
THIS SECURITY AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM
BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE
ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT. EACH PLEDGOR EXPRESSLY SUBMITS
AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN
ANY SUCH COURT, AND EACH PLEDGOR HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE
BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS
AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS
DEEMED APPROPRIATE BY SUCH COURT. EACH PLEDGOR HEREBY WAIVES

                                       13

<PAGE>

PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH
ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER
PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PLEDGOR AT
THE ADDRESS REFERRED TO IN SECTION 11.02 OF THE CREDIT AGREEMENT AND THAT
SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT
THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE
PREPAID.

            (b) ARBITRATION PROVISION. NOTWITHSTANDING ANY OTHER PROVISION OF
THIS AGREEMENT TO THE CONTRARY, ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE
PARTIES ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT,
INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL AT THE
REQUEST OF ANY PARTY HERETO BE DETERMINED BY BINDING ARBITRATION. The
arbitration shall be conducted in accordance with the United States Arbitration
Act (Title 9, U.S. Code), notwithstanding any choice of law provision in this
Agreement, and under the Commercial Rules of the American Arbitration
Association ("AAA"). The arbitrator(s) shall give effect to statutes of
limitation in determining any claim. Any controversy concerning whether an issue
is arbitrable shall be determined by the arbitrator(s). Judgment upon the
arbitration award may be entered in any court having jurisdiction. The
institution and maintenance of an action for judicial relief or pursuant to a
provisional or ancillary remedy shall not constitute a waiver of the right of
either party, including the plaintiff, to submit the controversy or claim to
arbitration if any other party contests such action for judicial relief.

            (c) CONSENT OF PARTIES. Notwithstanding the provisions of (b) above,
no controversy or claim shall be submitted to arbitration without the consent of
all parties if, at the time of the proposed submission, such controversy or
claim arises from or is related to an obligation to the Lenders which is secured
by real estate property collateral (exclusive of real estate space lease
assignments). If all the parties do not consent to submission of such a
controversy or claim to arbitration, the controversy or claim shall be
determined as provided in Section 16(f).

            (d) JUDICIAL REFERENCE. At the request of either party a controversy
or claim which is not submitted to arbitration as provided and limited in
Section 16(b) and (c) shall be determined by judicial reference. If such an
election is made, the parties shall designate to the court a referee or referees
selected under the auspices of the AAA in the same manner as arbitrators are
selected in AAA-sponsored proceedings. The presiding referee of the panel, or
the referee if there is a single referee, shall be an active attorney or retired
judge. Judgment upon the award rendered by such referee or referees shall be
entered in the court in which such proceeding was commenced.

            (e) SELF-HELP REMEDIES. No provision of Sections (jb) through (f)
shall limit the right of the Agent or the Lenders to exercise self-help remedies
such as setoff, foreclosure against or sale of any real or personal property
collateral or security, or obtaining

                                       14

<PAGE>

provisional or ancillary remedies from a court of competent jurisdiction before,
after, or during the pendency of any arbitration or other proceeding. The
exercise of a remedy does not waive the right of either party to resort to
arbitration or reference. At the Agent's option, foreclosure under a deed of
trust or mortgage may be accomplished either by exercise of power of sale under
the deed of trust or mortgage or by judicial foreclosure.

            (f) WAIVER OF JURY TRIAL. SUBJECT TO THE PROVISIONS OF SECTION
16(j), THE PLEDGORS, THE LENDERS AND THE AGENT EACH IRREVOCABLY WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE PLEDGORS, THE LENDERS AND THE
AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER
AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN
WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

      Section 16.14 LIMITATION OF LIABILITY. No claim may be made by any Pledgor
against the Agent or any Lender, or the affiliates, directors, officers,
officers, employees, or agents of the Agent or any Lender for any special,
indirect, consequential or punitive damages in respect of any claim for breach
of contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement or any other Loan Document, or any
act, omission or event occurring in connection therewith, and each Pledgor
hereby waives, releases and agrees not to sue upon any claim for such special,
indirect, consequential or punitive damages, whether or not accrued and whether
or not known or suspected to exist in its favor.

      Section 16.15 SURETYSHIP WAIVERS IN LOAN DOCUMENTS. Each of the suretyship
waivers by each Pledgor in the Credit Agreement or any other Loan Document are
hereby incorporated herein by this reference as if fully set forth herein.

                            [SIGNATURE PAGES FOLLOW]

                                       15

<PAGE>

      IN WITNESS WHEREOF, Pledgors and the Agent have each caused this Pledge
Agreement to be duly executed and delivered as of the date first above written.

                            AGENT:

                            BANK OF AMERICA, N.A., as Agent

                            By:  /s/ Donna F. Kimbrough
                                 -----------------------------------------------
                            Name: Donna F. Kimbrough
                                  ----------------------------------------------
                            Title: Assistant Vice President
                                   ---------------------------------------------

                            PLEDGORS:

                                    LAKES NIPMUC, LLC
                                    GREAT LAKES GAMING OF MICHIGAN, LLC
                                    LAKES ENTERTAINMENT, INC.
                                    LAKES GAMING AND RESORTS, LLC

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

                               [Pledge Agreement]

                                      S-1<PAGE>

                                                                    EXHIBIT 10.4

                                                                  EXECUTION COPY

                               CONTINUING GUARANTY

      FOR VALUE RECEIVED, the sufficiency of which is hereby acknowledged, and
in consideration of credit and/or financial accommodation heretofore or
hereafter from time to time made or granted to Lakes Gaming and Resorts, LLC
(the "Borrower") by the Lenders (as defined in the Credit Agreement)
(collectively the "Lenders"), the undersigned Guarantors (whether one or more
the "Guarantor", and if more than one jointly and severally) hereby furnishes
its guaranty of the Guaranteed Obligations (as hereinafter defined) as follows:

      1. GUARANTY. The Guarantor hereby absolutely and unconditionally
guarantees, as a guaranty of payment and performance and not merely as a
guaranty of collection, prompt payment when due, whether at stated maturity, by
required prepayment, upon acceleration, demand or otherwise, and at all times
thereafter, of any and all existing and future indebtedness and liabilities of
every kind, nature and character, direct or indirect, absolute or contingent,
liquidated or unliquidated, voluntary or involuntary and whether for principal,
interest, premiums, fees indemnities, damages, costs, expenses or otherwise, of
the Borrower to the Secured Parties, arising under that certain Credit Agreement
dated June 22, 2006 between the Borrower, Holdings, the Lenders and Bank of
America, N.A. as administrative agent (the "Credit Agreement") and any other
Loan Documents (including all renewals, extensions, amendments, refinancings and
other modifications thereof and all costs, attorneys' fees and expenses incurred
by the Secured Parties in connection with the collection or enforcement
thereof), and whether recovery upon such indebtedness and liabilities may be or
hereafter become unenforceable or shall be an allowed or disallowed claim under
any proceeding or case commenced by or against the Guarantor or the Borrower
under the Bankruptcy Code (Title 11, United States Code), any successor statute
or any other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally (collectively, "Debtor Relief Laws"), and including interest
that accrues after the commencement by or against the Borrower of any proceeding
under any Debtor Relief Laws (collectively, the "Guaranteed Obligations"). The
Lender's books and records showing the amount of the Guaranteed Obligations
shall be admissible in evidence in any action or proceeding, and shall be
binding upon the Guarantor and conclusive for the purpose of establishing the
amount of the Guaranteed Obligations. This Guaranty shall not be affected by the
genuineness, validity, regularity or enforceability of the Guaranteed
Obligations or any instrument or agreement evidencing any Guaranteed
Obligations, or by the existence, validity, enforceability, perfection,
non-perfection or extent of any collateral therefor, or by any fact or
circumstance relating to the Guaranteed Obligations which might otherwise
constitute a defense to the obligations of the Guarantor under this Guaranty,
and the Guarantor hereby irrevocably waives any defenses it may now have or
hereafter acquire in any way relating to any or all of the foregoing.

      2. NO SETOFF OR DEDUCTIONS; TAXES; PAYMENTS. The Guarantor represents and
warrants that it is organized and resident in the United States of America. The
Guarantor shall make all payments hereunder without setoff or counterclaim and
free and clear of and without deduction for any taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or levied by any jurisdiction
or any political subdivision thereof or taxing or other authority therein unless
the Guarantor is compelled by law to make such deduction or withholding. If any
such obligation (other than one arising with respect to taxes based on or
measured by the income or profits of the Secured Parties) is imposed upon the
Guarantor with respect to any amount payable by it hereunder, the Guarantor will
pay to the Secured Parties, on the date on which such amount is due and payable
hereunder, such additional amount in U.S. dollars as shall be necessary to
enable the

                               Guaranty Agreement

<PAGE>

Secured Parties to receive the same net amount which the Secured Parties would
have received on such due date had no such obligation been imposed upon the
Guarantor. The Guarantor will deliver promptly to the Secured Parties
certificates or other valid vouchers for all taxes or other charges deducted
from or paid with respect to payments made by the Guarantor hereunder. The
obligations of the Guarantor under this paragraph shall survive the payment in
full of the Guaranteed Obligations and termination of this Guaranty. Anything
contained herein to the contrary notwithstanding, the obligations of the
Guarantor hereunder at any time shall be limited to an aggregate amount equal to
the largest amount that would not render its obligations hereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of the
Bankruptcy Code (Title 11, United States Code) or any comparable provisions of
any similar federal or state law.

      3. RIGHTS OF LENDER. The Guarantor consents and agrees that the Secured
Parties may, at any time and from time to time, without notice or demand, and
without affecting the enforceability or continuing effectiveness hereof: (a)
amend, extend, renew, compromise, discharge, accelerate or otherwise change the
time for payment or the terms of the Guaranteed Obligations or any part thereof;
(b) take, hold, exchange, enforce, waive, release, fail to perfect, sell, or
otherwise dispose of any security for the payment of this Guaranty or any
Guaranteed Obligations; (c) apply such security and direct the order or manner
of sale thereof as the Administrative Agent and the Lenders in their sole
discretion may determine; and (d) release or substitute one or more of any
endorsers or other guarantors of any of the Guaranteed Obligations. Without
limiting the generality of the foregoing, the Guarantor consents to the taking
of, or failure to take, any action which might in any manner or to any extent
vary the risks of the Guarantor under this Guaranty or which, but for this
provision, might operate as a discharge of the Guarantor.

      4. CERTAIN WAIVERS. The Guarantor waives (a) any defense arising by reason
of any disability or other defense of the Borrower or any other guarantor, or
the cessation from any cause whatsoever (including any act or omission of any
Secured Party) of the liability of the Borrower; (b) any defense based on any
claim that the Guarantor's obligations exceed or are more burdensome than those
of the Borrower; (c) the benefit of any statute of limitations affecting the
Guarantor's liability hereunder; (d) any right to require the Secured Parties to
proceed against the Borrower, proceed against or exhaust any security for the
Indebtedness, or pursue any other remedy in the Secured Parties' power
whatsoever; (e) any benefit of and any right to participate in any security now
or hereafter held by any Secured Party; and (f) to the fullest extent permitted
by law, any and all other defenses or benefits that may be derived from or
afforded by applicable law limiting the liability of or exonerating guarantors
or sureties. The Guarantor expressly waives all setoffs and counterclaims and
all presentments, demands for payment or performance, notices of nonpayment or
nonperformance, protests, notices of protest, notices of dishonor and all other
notices or demands of any kind or nature whatsoever with respect to the
Guaranteed Obligations, and all notices of acceptance of this Guaranty or of the
existence, creation or incurrence of new or additional Guaranteed Obligations.
The Guarantor waives any rights and defenses that are or may become available to
the Guarantor by reason of Sections 2787 to 2855, inclusive, 2899 and 3433 of
the California Civil Code. As provided below, this Guaranty shall be governed
by, and construed in accordance with, the laws of the State of New York. The
foregoing waivers and the provisions hereinafter set forth in this Guaranty
which pertain to California law are included solely out of an abundance of
caution, and shall not be construed to mean that any of the above referenced
provisions of California law are in any way applicable to this Guaranty or the
Guaranteed Obligations.

      5. OBLIGATIONS INDEPENDENT. The obligations of the Guarantor hereunder are
those of primary obligor, and not merely as surety, and are independent of the
Guaranteed Obligations and the obligations of any other guarantor, and a
separate action may be brought against the Guarantor to enforce this Guaranty
whether or not the Borrower or any other person or entity is joined as a party.

                               Guaranty Agreement

<PAGE>

      6. SUBROGATION. The Guarantor shall not exercise any right of subrogation,
contribution, indemnity, reimbursement or similar rights with respect to any
payments it makes under this Guaranty until all of the Guaranteed Obligations
and any amounts payable under this Guaranty have been indefeasibly paid and
performed in full and any commitments of the Lenders or facilities provided by
the Lender with respect to the Guaranteed Obligations are terminated. If any
amounts are paid to the Guarantor in violation of the foregoing limitation, then
such amounts shall be held in trust for the benefit of the Secured Parties and
shall forthwith be paid to the Secured Parties to reduce the amount of the
Guaranteed Obligations, whether matured or unmatured.

      7. TERMINATION; REINSTATEMENT. This Guaranty is a continuing and
irrevocable guaranty of all Guaranteed Obligations now or hereafter existing and
shall remain in full force and effect until all Guaranteed Obligations and any
other amounts payable under this Guaranty are indefeasibly paid in full in cash
and any commitments of the Lenders or facilities provided by the Lenders with
respect to the Guaranteed Obligations are terminated. Notwithstanding the
foregoing, this Guaranty shall continue in full force and effect or be revived,
as the case may be, if any payment by or on behalf of the Borrower or the
Guarantor is made, or any Lender exercises its right of setoff, in respect of
the Guaranteed Obligations and such payment or the proceeds of such setoff or
any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Secured Parties in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any proceeding under
any Debtor Relief Laws or otherwise, all as if such payment had not been made or
such setoff had not occurred and whether or not the Secured Parties is in
possession of or has released this Guaranty and regardless of any prior
revocation, rescission, termination or reduction. The obligations of the
Guarantor under this paragraph shall survive termination of this Guaranty.

      8. SUBORDINATION. The Guarantor hereby subordinates the payment of all
obligations and indebtedness of the Borrower owing to the Guarantor, whether now
existing or hereafter arising, including but not limited to any obligation
(other than, unless a Default or Event of Default has occurred and is
continuing, any cash management arrangements entered into in the ordinary course
of business and consistent with past practice) of the Borrower to the Guarantor
as subrogee of the Secured Parties or resulting from the Guarantor's performance
under this Guaranty, to the indefeasible payment in full in cash of all
Guaranteed Obligations. If the Secured Parties so request, any such obligation
or indebtedness of the Borrower to the Guarantor shall be enforced and
performance received by the Guarantor as trustee for the Secured Parties and the
proceeds thereof shall be paid over to the Secured Parties on account of the
Guaranteed Obligations, but without reducing or affecting in any manner the
liability of the Guarantor under this Guaranty.

      9. STAY OF ACCELERATION. In the event that acceleration of the time for
payment of any of the Guaranteed Obligations is stayed, in connection with any
case commenced by or against the Guarantor or the Borrower under any Debtor
Relief Laws, or otherwise, all such amounts shall nonetheless be payable by the
Guarantor immediately upon demand by the Secured Parties.

      10. EXPENSES. The Guarantor shall pay on demand all reasonable
out-of-pocket expenses (including reasonable attorneys' fees and expenses but
excluding the allocated cost and disbursements of internal legal counsel) in any
way relating to the enforcement or protection of the Secured Parties' rights
under this Guaranty or in respect of the Guaranteed Obligations, including any
incurred during any "workout" or restructuring in respect of the Guaranteed
Obligations and any incurred in the preservation, protection or enforcement of
any rights of the Secured Parties in any proceeding any Debtor Relief Laws. The
obligations of the Guarantor under this paragraph shall survive the payment in
full of the Guaranteed Obligations and termination of this Guaranty.

                               Guaranty Agreement

<PAGE>

      11. MISCELLANEOUS. No provision of this Guaranty may be waived, amended,
supplemented or modified, except by a written instrument executed by the Secured
Parties and the Guarantor. No failure by the Secured Parties to exercise, and no
delay in exercising, any right, remedy or power hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy or
power hereunder preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law or in equity. The
unenforceability or invalidity of any provision of this Guaranty shall not
affect the enforceability or validity of any other provision herein. Unless
otherwise agreed by the Secured Parties and the Guarantor in writing, this
Guaranty is not intended to supersede or otherwise affect any other guaranty now
or hereafter given by the Guarantor for the benefit of the Secured Parties or
any term or provision thereof.

      12. CONDITION OF BORROWER. The Guarantor acknowledges and agrees that it
has the sole responsibility for, and has adequate means of, obtaining from the
Borrower and any other guarantor such information concerning the financial
condition, business and operations of the Borrower and any such other guarantor
as the Guarantor requires, and that none of the Secured Parties has any duty,
and the Guarantor is not relying on the Secured Parties at any time, to disclose
to the Guarantor any information relating to the business, operations or
financial condition of the Borrower or any other guarantor (the guarantor
waiving any duty on the part of the Secured Parties to disclose such information
and any defense relating to the failure to provide the same).

      13. SETOFF. If and to the extent any payment is not made when due
hereunder, the Secured Parties may setoff and charge from time to time any
amount so due against any or all of the Guarantor's accounts or deposits with
the Secured Parties.

      14. REPRESENTATIONS AND WARRANTIES. The Guarantor represents and warrants
that (a) it is duly organized and in good standing under the laws of the
jurisdiction of its organization and has full capacity and right to make and
perform this Guaranty, and all necessary authority has been obtained; (b) this
Guaranty constitutes its legal, valid and binding obligation enforceable in
accordance with its terms; (c) the making and performance of this Guaranty does
not and will not violate the provisions of any applicable law, regulation or
order, and does not and will not result in the breach of, or constitute a
default or require any consent under, any material agreement, instrument, or
document to which it is a party or by which it or any of its property may be
bound or affected; and (d) all consents, approvals, licenses and authorizations
of, and filings and registrations with, any governmental authority required
under applicable law and regulations for the making and performance of this
Guaranty have been obtained or made and are in full force and effect.

      15. INDEMNIFICATION AND SURVIVAL. Without limitation on any other
obligations of the Guarantor or remedies of the Secured Parties under this
Guaranty, the Guarantor shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless the Secured Parties from and
against, and shall pay on demand, any and all damages, losses, liabilities and
expenses (including attorneys' fees and expenses and the allocated cost and
disbursements of internal legal counsel) that may be suffered or incurred by the
Secured Parties in connection with or as a result of any failure of any
Guaranteed Obligations to be the legal, valid and binding obligations of the
Borrower enforceable against the Borrower in accordance with their terms. The
obligations of the Guarantor under this paragraph shall survive the payment in
full of the Guaranteed Obligations and termination of this Guaranty.

      16. GOVERNING LAW; ASSIGNMENT; JURISDICTION; NOTICES. THIS GUARANTY SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF NEW YORK. This Guaranty shall (a) bind the Guarantor and its

                               Guaranty Agreement

<PAGE>

successors and assigns, provided that the Guarantor may not assign its rights or
obligations under this Guaranty without the prior written consent of the Secured
Parties (and any attempted assignment without such consent shall be void), and
(b) inure to the benefit of the Secured Parties and its successors and assigns
and the Secured Parties may, without notice to the Guarantor and without
affecting the Guarantor's obligations hereunder, assign, sell or grant
participations in the Guaranteed Obligations and this Guaranty, in whole or in
part. The Guarantor hereby irrevocably (i) submits to the non-exclusive
jurisdiction of any United States Federal or State court sitting in New York,
New York in any action or proceeding arising out of or relating to this
Guaranty, and (ii) waives to the fullest extent permitted by law any defense
asserting an inconvenient forum in connection therewith. Service of process by
the Secured Parties in connection with such action or proceeding shall be
binding on the Guarantor if sent to the Guarantor by registered or certified
mail at its address specified below or such other address as from time to time
notified by the Guarantor. The Guarantor agrees that the Secured Parties may
disclose to any assignee of or participant in, or any prospective assignee of or
participant in, any of its rights or obligations of all or part of the
Guaranteed Obligations any and all information in the Secured Parties'
possession concerning the Guarantor, this Guaranty and any security for this
Guaranty. All notices and other communications to the Guarantor under this
Guaranty shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopier to the
Guarantor at its address set forth below or at such other address in the United
States as may be specified by the Guarantor in a written notice delivered to the
Secured Parties at such office as the Secured Parties may designate for such
purpose from time to time in a written notice to the Guarantor.

      17. WAIVER OF JURY TRIAL; FINAL AGREEMENT. TO THE EXTENT ALLOWED BY
APPLICABLE LAW, THE GUARANTOR AND THE SECURED PARTIES EACH IRREVOCABLY WAIVES
TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING ON, ARISING
OUT OF OR RELATING TO THIS GUARANTY OR THE GUARANTEED OBLIGATIONS. THIS GUARANTY
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

                  [Remainder of page intentionally left blank]

                               Guaranty Agreement

<PAGE>

      Executed as of the date first written above.

                  Borders Land Company, LLC
                  Great Lakes Gaming of Michigan, LLC
                  Lakes Cloverdale, LLC
                  Lakes Game Development, LLC
                  Lakes Gaming -- Mississippi, LLC
                  Lakes Iowa Consulting, LLC
                  Lakes Iowa Management, LLC
                  Lakes Jamul Development, LLC
                  Lakes Jamul, Inc.
                  Lakes KAR- Shingle Springs, LLC
                  Lakes Kean Argovitz Resorts - California, LLC
                  Lakes Kickapoo Consulting, LLC
                  Lakes Kickapoo Management, LLC
                  Lakes Nipmuc, LLC
                  Lakes Pawnee Consulting, LLC
                  Lakes Pawnee Management, LLC
                  Lakes Poker Tour, LLC
                  Lakes Shingle Springs, Inc.

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

                               Guaranty Agreement

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