Document:

<PAGE>

                                                                    EXHIBIT 10.9

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 SHINGLE SPRINGS, INC.
                                    (TRUSTOR)

                                       to

                    FIDELITY NATIONAL TITLE INSURANCE COMPANY
                                    (TRUSTEE)

                               for the benefit of

                              BANK OF AMERICA, N.A.
                                  (BENEFICIARY)

                               PROPERTY LOCATION:

                           5000 and 5020 Artesia Road
                           Shingle Springs, California

                           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 CALIFORNIA UNIFORM COMMERCIAL CODE AND IS RECORDED AS A FIXTURE FILING

     PURSUANT TO SECTION 2924B(D) OF THE CALIFORNIA CIVIL CODE, TRUSTOR AND
   BENEFICIARY REQUEST THAT A COPY OF ANY NOTICE OF DEFAULT AND A COPY OF ANY
    NOTICE OF SALE BE MAILED TO TRUSTOR AND BENEFICIARY, RESPECTIVELY, AT THE
                    ADDRESS FOR SUCH PARTY SET FORTH HEREIN.

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                                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..............................   11
         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........................................................   13
         SECTION 4.01      Title to Trust Property and Lien of this Deed of Trust................   13
         SECTION 4.02      Taxes and Other Payments..............................................   14
         SECTION 4.03      Power to Create Lien and Security.....................................   14
         SECTION 4.04      Loan and Credit Agreements............................................   14
         SECTION 4.05      Compliance with Laws..................................................   14
         SECTION 4.06      No Condemnation.......................................................   15
         SECTION 4.07      Flood Zone............................................................   15
         SECTION 4.08      Additional Environmental Representation...............................   15

ARTICLE V AFFIRMATIVE COVENANTS..................................................................   15
         SECTION 5.01      Lien Status...........................................................   15
         SECTION 5.02      Payment of Impositions................................................   15
         SECTION 5.03      Repair................................................................   16
         SECTION 5.04      Insurance and Application of Insurance Proceeds.......................   16
         SECTION 5.05      Condemnation and Application of Condemnation Proceeds.................   18
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<TABLE>
<S>                                                                                                 <C>
         SECTION 5.06      Maintenance of Rights of Way, Easements, Licenses and Other Rights....   19
         SECTION 5.07      Payment and Performance of Obligations................................   20
         SECTION 5.08      Compliance with Permitted Liens and Other Obligations.................   20
         SECTION 5.09      Additional Affirmative Covenants......................................   20

ARTICLE VI NEGATIVE COVENANTS....................................................................   20
         SECTION 6.01      Use Violations........................................................   20
         SECTION 6.02      Waste.................................................................   20
         SECTION 6.03      Alterations...........................................................   20
         SECTION 6.04      No Further Encumbrances...............................................   20
         SECTION 6.05      Transfer Restrictions.................................................   21
         SECTION 6.06      Loan and Credit Agreements; Additional Negative Covenants.............   21

ARTICLE VII EVENTS OF DEFAULT AND REMEDIES.......................................................   21
         SECTION 7.01      Event of Default......................................................   21
         SECTION 7.02      Acceleration..........................................................   21
         SECTION 7.03      Foreclosure and Sale..................................................   21
         SECTION 7.04      Trustee's Successors, Substitutes and Agents..........................   22
         SECTION 7.05      Receivership..........................................................   23
         SECTION 7.06      Judicial Foreclosure..................................................   23
         SECTION 7.07      Separate Sales........................................................   24
         SECTION 7.08      Possession of Trust Property..........................................   24
         SECTION 7.09      Occupancy After Foreclosure...........................................   24
         SECTION 7.10      Remedies Cumulative, Concurrent and Nonexclusive......................   25
         SECTION 7.11      No Release of Obligations.............................................   25
         SECTION 7.12      Release of and Resort to Collateral...................................   25
         SECTION 7.13      Waiver of Redemption, Notice and Marshalling of Assets................   25
         SECTION 7.14      Discontinuance of Proceedings.........................................   26
         SECTION 7.15      Application of Proceeds...............................................   26
         SECTION 7.16      Uniform Commercial Code Remedies......................................   27
         SECTION 7.17      Indemnity.............................................................   27
         SECTION 7.18      Waiver of Lien........................................................   28
         SECTION 7.19      Action for Environmental Claims.......................................   28

ARTICLE VIII TRUSTEE.............................................................................   29
         SECTION 8.01      Duties, Rights, and Powers of Trustee.................................   29
         SECTION 8.02      Successor Trustee.....................................................   29
         SECTION 8.03      Retention of Moneys...................................................   30
         SECTION 8.04      Reconveyance..........................................................   30

ARTICLE IX MISCELLANEOUS.........................................................................   30
         SECTION 9.01      Instrument Construed as Deed of Trust, Etc............................   30
         SECTION 9.02      Performance at Trustor's Expense......................................   30
         SECTION 9.03      Survival of Obligations...............................................   30
         SECTION 9.04      Further Assurances....................................................   30
         SECTION 9.05      Notices...............................................................   30
</TABLE>

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<TABLE>
<S>                                                                                                 <C>
         SECTION 9.06      No Waiver.............................................................   31
         SECTION 9.07      Beneficiary's Right to Perform; Beneficiary's Expenditures............   31
         SECTION 9.08      Successors and Assigns................................................   32
         SECTION 9.09      Severability..........................................................   32
         SECTION 9.10      Subrogation of Trustee................................................   32
         SECTION 9.11      Entire Agreement and Modification.....................................   32
         SECTION 9.12      Applicable Law........................................................   32
         SECTION 9.13      Satisfaction of Prior Encumbrance.....................................   33
         SECTION 9.14      No Partnership........................................................   34
         SECTION 9.15      Headings..............................................................   34
         SECTION 9.16      Release of Deed of Trust..............................................   34
         SECTION 9.17      Limitation of Obligations with Respect to Trust Property..............   34
         SECTION 9.18      Inconsistency with Credit Agreement...................................   34
         SECTION 9.19      Limitation on Interest Payable........................................   35
         SECTION 9.20      Covenants To Run With the Land........................................   35
         SECTION 9.21      Amount Secured; Last Dollar...........................................   35
         SECTION 9.22      Defense of Claims.....................................................   36
         SECTION 9.23      Exculpation Provisions................................................   36
         SECTION 9.24      No Merger of Estates..................................................   36
         SECTION 9.25      Suretyship Waivers....................................................   36
         SECTION 9.26      Beneficiary Statement.................................................   42
         SECTION 9.27      Request for Notice....................................................   42
         SECTION 9.28      Release and Reconveyance..............................................   42

EXHIBIT A - LEGAL DESCRIPTION
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                 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 ___, 2006, by LAKES SHINGLE SPRINGS, INC.,
a Minnesota corporation ("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 Fidelity National Title
Insurance Company, a California corporation (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).

                                    RECITALS:

            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 Resort, 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) (except for "Unsecured
Environmental Costs", as defined in Section 7.19 below), 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.

            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:

                                       1
<PAGE>

                                    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 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

                                       2
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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 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

                                       3
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                   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);

            (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

                                       4
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                   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.

            EXCLUDING, HOWEVER, all motor vehicles and forklifts now or
hereafter located on the Land and only to the extent contemplated by the Credit
Agreement.

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 but shall specifically not include "Unsecured Environmental Costs" as
defined in Section 7.19 below.

            "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:

                                       5
<PAGE>

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

            (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

                                       6
<PAGE>

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.

            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 SHINGLE SPRINGS, INC.

            Type of Organization: corporation

            State: Minnesota

            FEIN: 41-1977762

            Organizational ID Number: 10V-698

            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.

            SECTION 2.06 Intentionally Omitted

                                  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

                                       7
<PAGE>

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 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

                                       8
<PAGE>

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;
(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

                                       9
<PAGE>

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 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.

                                       10
<PAGE>

            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 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.

            SECTION 3.10 Right to Enforce Under California Civil Code Section
2938. Without limiting any other rights or remedies of Beneficiary set forth in
this Deed of Trust or under any of the other Loan Documents to which Trustor is
a party, or available at law or in equity, at any time upon or following the
occurrence of any Event of Default, Beneficiary shall have the right to enforce
all of the rights and remedies of an Beneficiary under Section 2938 of the
California Civil Code ("Section 2938"). In the event that Beneficiary shall
elect to enforce this Deed of Trust in accordance with Section 2938, the
following procedures shall apply, as applicable:

                  (i) Beneficiary may send a demand notice in the form
      prescribed by Section 2938 to, in the case of enforcement under Section
      2938(c)(3), one or more of the tenants of the Trust Property, with a copy
      to Trustor and any other Beneficiary under a recorded assignment of
      leases, rents, issues and profits with respect to the Trust Property, or,
      in the case of enforcement under Section 2938(c)(4), to Trustor with a
      copy to any such other Beneficiarys in accordance with the procedures set
      forth therein. Without limiting Beneficiary's rights to any amounts
      received by Trustor after an Event of Default, Trustor shall immediately
      turn over to Beneficiary any Rents received by Trustor from any tenant of
      the Trust Property from and after Beneficiary's enforcement of this

                                       11
<PAGE>

      assignment under either of such Sections 2938(c)(3) or (4), it being
      understood that Trustor shall be deemed to hold such amounts as trustee
      for Beneficiary until such amounts have been paid to Beneficiary. In
      addition, Trustor shall also cause any collection agent for Trustor or any
      other person who has collected for Trustor's benefit relating to the
      period from and after Beneficiary's enforcement of this assignment under
      either of such Sections 2938(c)(3) or (4), to turn such Rents over to
      Beneficiary.

                  (ii) Notwithstanding anything to the contrary contained in
      this Deed of Trust or any other Loan Document, if Beneficiary shall
      proceed to enforce this assignment by means other than the appointment of
      a receiver and consequently receives Rents as a result thereof, and
      Beneficiary receives written demand from Trustor (or any other party
      entitled under law to make demand on Beneficiary) to pay the reasonable
      costs of protecting and preserving the Trust Property, Beneficiary may
      elect either to pay (either directly to the party to whom owed, or by
      joint check payable to Trustor and such party) or authorize Trustor to
      pay, such costs (such payments being referred to herein as "Protective
      Payments"), conditioned upon Trustor furnishing to Beneficiary all
      information (such as invoices, bills, contracts, or purchase orders)
      necessary in order for Beneficiary to identify the party to whom payment
      is owed or the work, service or item for which payment is requested and to
      establish that such Protective Payments are required to be paid or
      authorized under this Section. If Trustor is authorized to pay any
      Protective Payments under this Section, Beneficiary reserves the right to
      deposit the amounts necessary to pay such Protective Payments into a
      non-interest bearing checking account, in which Trustor shall have granted
      to Beneficiary a perfected, first priority security interest, from which
      Trustor shall be obligated to draw the funds necessary to pay such
      Protective Payments. In the event that Beneficiary agrees or is required
      under any circumstances to pay or authorize the payment of any Protective
      Payments consisting of costs of improvement of the Trust Property or any
      portion thereof (or any other costs the non-payment of which would entitle
      the payee to enforce mechanic's or materialman's liens or similar rights),
      Beneficiary shall be authorized, before paying or authorizing the payment
      of any such payments, to require compliance with standard construction
      loan disbursement conditions with respect to such costs, including,
      without limitation, the receipt of unconditional mechanics' lien waivers
      with respect to the work for which such costs are to be paid. (iii) In no
      event shall Beneficiary be obligated to pay or authorize the payment of
      Protective Payments in excess of any Rents actually received by
      Beneficiary as a result of the enforcement of Section (i) of this Section.

                  (iv) Nothing contained in this Section shall limit the rights
      of Beneficiary under any other provision of Deed of Trust.

                  (v) Nothing contained in this Section shall limit either (x)
      Beneficiary's right to cease at any time any further enforcement of this
      Assignment under Section 2938 by sending written notice of the
      cancellation thereof to each party to whom a demand notice was sent, or
      (y) Beneficiary's right to seek the appointment of a receiver, either of
      which if enforced by Beneficiary, shall terminate Beneficiary's
      obligations under Section (i) of this Section.

                                       12
<PAGE>

                  (vi) In no event shall any enforcement of Beneficiary's rights
      under this Section, including, without limitation, the payment or
      authorization of payment of any Protective Payments, make Beneficiary a
      "mortgagee-in-possession" or limit, waive, or otherwise derogate any of
      Beneficiary's other rights and remedies available to it under the Loan
      Documents to which Trustor is a party or at law. In no event shall any
      exercise of lights by the Beneficiary under this Section, including,
      without limitation, the payment or authorization of payment of any
      Protective Payments, be construed to require the Beneficiary to operate or
      manage the Trust Property or be construed as an assumption by Beneficiary
      of any obligation to operate or manage the Trust Property, and all
      liabilities and obligations in relation to the operation and management of
      the Trust Property shall remain exclusively that of the Trustor.

            (b)   Any Rents received by Beneficiary as a result of any such
enforcement measures shall be applied as provided in this Deed of Trust.

            (c)   Without in any way limiting Trustor's other indemnification
obligations set forth in this Assignment and in any of the Loan Documents to
which Trustor is a party, Trustor shall indemnify, defend, protect, and hold
harmless Beneficiary, and its successors and assigns, from and against any and
all losses, costs, expenses (including, without limitation, reasonable
attorneys' fees, costs and expenses), damages, liabilities, or claims asserted
against or suffered by Beneficiary (i) arising from any Protective Payments
made, or authorized to be made, by Beneficiary in good faith, and (ii) arising
from any work performed or goods or services furnished in connection with the
ownership or operation of the Trust Property at any time during which
Beneficiary shall be enforcing its rights under this Section.

            (d)   Without limiting the restrictions on assignment set forth in
this Assignment and any of the other Loan Documents to which Trustor is a party,
each Beneficiary of any interest in the Rents shall acquire its interest in the
Rents subject to the rights of the Beneficiary set forth in this Assignment, and
shall acquire no greater rights with respect to the payment of Protective
Payments than the rights of Trustor as set forth in this Section.

                                   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.

                                       13
<PAGE>

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.

            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

                                       14
<PAGE>

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.

            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.

            SECTION 4.08 Additional Environmental Representation. The Trust
Property has not been designated as a "hazardous waste property" and to Tenant's
knowledge, the Trust Property has not been designated as a "border zone
property" pursuant to Section 25220, et. seq. of the California Health and
Safety Code.

                                    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

                                       15
<PAGE>

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 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.

                                       16
<PAGE>

                  (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 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.

                                       17
<PAGE>

            (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.

            (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.

                                       18
<PAGE>

            (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 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.

            (c) Any implied covenant in this Deed of Trust restricting the right
of Beneficiary to apply the proceeds of condemnation as described above is
waived by Trustor. Trustor hereby waives the provisions of any law prohibiting
Beneficiary from making elections regarding the application of condemnation
proceeds, including, without limitation, the provisions of California Code of
Civil Procedure Sections 1265.210 et seq.

            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

                                       19
<PAGE>

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.

            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

                                       20
<PAGE>

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.

                                   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 an Event of Default shall
occur and be continuing, Beneficiary shall have the right and option to with
foreclosure by power of sale in accordance with California Civil Code Section
2924 or other applicable law by notice to Trustee and shall, if required,
deposit with Trustee the Note, the original or a certified copy of this Deed

                                       21
<PAGE>

of Trust, and such other documents, receipts and evidences of expenditures made
and secured hereby as Trustee may require.

                  Upon receipt of such notice from Beneficiary, Trustee shall
cause to be recorded and delivered to Trustor such notice of default as may then
be required by law and by this Deed of Trust. Trustee shall, without demand on
Trustor, after lapse of such time as may then be required by law and after
recordation of such notice of default and after notice of sale has been given as
required by law, sell the Trust Property or any portion thereof at the time and
place of sale fixed by it in said notice of sale, either as a whole or in
separate lots or parcels or items as Trustee shall deem expedient, and in such
order as it may determine, at public auction to the highest bidder for cash in
lawful money of the United State (or other cash equivalent as is acceptable to
Trustee and Beneficiary) payable at the time of sale. Trustee shall deliver to
the purchaser or purchasers at such sale its good and sufficient deed or deeds
conveying the property so sold, but without any covenant or warranty, express or
implied. The recitals in such deed of any matters or facts shall be conclusive
proof of the truthfulness thereof. Any person, including, without limitation,
Trustor, Trustee or Beneficiary, may purchase at such sale, and Trustor hereby
covenants to warrant and defend the title of such purchaser or purchasers.

            Trustee may postpone the sale of all or any portion of the Trust
Property from time to time in accordance with the laws of the State of
California.

            To the fullest extent allowed by law, Borrower hereby expressly
waives any right which it may have to direct the order in which any of the Trust
Property shall be sold in the event of any sale or sales pursuant to this Deed
of Trust.

            Upon any foreclosure sale, Beneficiary may bid for and purchase the
Trust Property and shall be entitled to apply all or any part of the unpaid
Obligations as a credit to the purchase price.

            Beneficiary may from time to time rescind any notice of default or
notice of sale before any Trustee's sale as provided above in accordance with
the laws of the State of California. The exercise by Beneficiary of such right
of rescission shall not constitute a waiver of any breach or default then
existing or subsequently occurring, or impair the right of Beneficiary to
execute and deliver to Trustee, as above provided, other declarations or notices
of default to satisfy the obligations of this Deed of Trust, or otherwise affect
any provision, covenant or condition of the Credit Agreement or any Loan
Document or any of the rights, obligations or remedies of Trustee or Beneficiary
hereunder or thereunder.

            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

                                       22
<PAGE>

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 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 in accordance with California
Code of Civil Procedure Section 564 (including, without limitation, in order to
enforce Beneficiary's rights under California Civil Code Section 2929.5), 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.

            Without limiting the foregoing, the receiver shall have the right to
apply Rents to cleanup, remediation or other response action concerning the
release or threatened release of Hazardous Materials, whether or not such
actions are pursuant to an order of any federal, state or local governmental
agency. Trustor hereby confirms the right of Beneficiary (or a receiver
appointed by Beneficiary) to enter upon and inspect all or any portion of the
Trust Property for the purpose of determining the existence, location, nature
and magnitude of any past or present release or threatened release of any
hazardous substance into, onto, beneath, or from the Trust Property in
accordance with the California Civil Code Section 2929.5. All reasonable costs
and expenses incurred by Beneficiary pursuant to this provision or pursuant to
California Civil Code Section 2929.5, including, without limitation, costs of
consultants and contractors, costs of repair of any physical injury to the Trust
Property normal and customary to the tests and studies, court costs and
attorneys' fees, costs and expenses, whether incurred in litigation or not and
whether before or after judgment, shall be payable by Trustor and, to the extent
advanced or incurred by Beneficiary, shall be reimbursed to Beneficiary by
Trustor upon demand. This provision is separate and several, and shall survive
merger into any judgment.

            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

                                       23
<PAGE>

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 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.

                                       24
<PAGE>

            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 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

                                       25
<PAGE>

Credit Agreement; and (c) any right to a marshalling of assets, a sale in
inverse order of alienation or to direct the application of proceeds, including
any rights under California Civil Code Sections 2899 and 3433, and all rights of
Trustor under California Civil Code Section 2822; (d) all rights and remedies
which Borrower may have or be able to assert by reason of the Laws of the State
of California pertaining to the rights and remedies of sureties and (e) 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. Beneficiary shall
have the right to determine the order in which any or all portions of the
Obligations are satisfied from the proceeds realized upon the exercise of the
remedies provided herein. Nothing contained herein shall be deemed to be a
waiver of Trustor's rights under Section 2924c of the California Civil Code.

            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 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

                                       26
<PAGE>

            (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 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.

                                       27
<PAGE>

            SECTION 7.18 Waiver of Lien. In accordance with California Code of
Civil Procedure Section 726.5, Beneficiary may waive its lien against the Trust
Property constituting real property or any portion thereof, together with
fixtures or personal property constituting real property thereon, to the extent
such Trust Property constituting real property is found to be environmentally
impaired, and may exercise any and all rights and remedies of an unsecured
creditor against Trustor and all of Trustor's assets and Trust Property
constituting real property for the recovery of any deficiency, including without
limitation seeking an attachment order under California Code of Civil Procedure
Section 483.010. No such waiver shall be final or binding on Beneficiary unless
and until a final money judgment is obtained against Trustor. As between
Beneficiary and Trustor, for purposes of California Code of Civil Procedure
Section 726.5, Trustor shall have the burden of proving that the release or
threatened release was not knowingly or negligently caused or contributed to, or
knowingly or willfully permitted or acquiesced to by Trustor or any related
party (or any affiliate or agent of Trustor or any related party) and that
Trustor made written disclosure of the release to Beneficiary or that
Beneficiary otherwise obtained actual knowledge thereof prior to the making of
the loan evidenced by the Credit Agreement. Notwithstanding anything to the
contrary contained in this Deed of Trust, the Credit Agreement or the other Loan
Documents, Trustor shall be fully and personally liable for all judgments and
awards entered against Trustor pursuant to California Code of Civil Procedure
726.5 and such liability shall be an exception to any non-recourse or
exculpatory provision in this Deed of Trust or the other Loan Documents, if any,
and shall not be limited to the original principal amount of the obligations
secured by this Deed of Trust. Trustor's obligations hereunder shall survive the
foreclosure, deed in lieu of foreclosure, release, reconveyance or any other
transfer of the Trust Property constituting real property or this Deed of Trust.
For the purpose of any action brought under this Section, Trustor hereby waives
the defense of laches and any applicable statute of limitations. For purposes of
California Code of Civil Procedure 726.5, the acts, knowledge and notice of each
"726.5 Party" shall be attributed to and be deemed to have been performed by the
party or parties then obligated on and liable for payment of the Obligations. As
used herein, "726.5 Party" shall mean Trustor, any successor owner to Trustor of
all or any portion of the Trust Property constituting real property, any related
party of Trustor or any such successor and any affiliate or agent of Trustor,
any such successor or any such related party.

            SECTION 7.19 Action for Environmental Claims. In accordance with,
and subject to limitations of, California Code of Civil Procedure Section 736,
Beneficiary may seek a judgment that the Trustor has breached its covenants,
representations and/or warranties with respect to the environmental matters
contained in the Credit Agreement (the "Environmental Provisions"), and may
commence and maintain an action or actions in any court of competent
jurisdiction for enforcement of the Environmental Provisions and/or recovery of
any and all costs, damages, expenses, fees, penalties, fines, judgments,
indemnification payments to third parties, and other out-of-pocket costs or
expenses (including, without limitation, court costs, consultants' fees and
attorneys' fees, whether incurred in litigation or not and whether before or
after judgment), incurred or advanced by Beneficiary pursuant to the
Environmental Provisions (collectively, the "Environmental Costs"), excluding,
however, any Environmental Costs not permitted to be recovered pursuant to
Section 736 of the California Code of Civil Procedure. Environmental Costs that
are not permitted to be recovered pursuant to Section 736 may be referred to
hereinafter as the "Unsecured Environmental Costs," and Environmental Costs
other than the Unsecured Environmental Costs may be referred to hereinafter as
the "Secured

                                       28
<PAGE>

Environmental Costs." Any Unsecured Environmental Costs shall not be secured by
this Deed of Trust; however, nothing herein shall prevent Beneficiary from
recovering any Unsecured Environmental Costs pursuant to the Indemnity Agreement
of even date herewith among Trustor, Beneficiary and certain other parties, to
the extent they are recoverable in accordance with said Indemnity Agreement. All
Secured Environmental Costs incurred by Beneficiary shall bear interest at the
default rate provided under the Note. All Secured Environmental Costs together
with interest thereon at the rate then in effect under the Credit Agreement
shall be secured by this Deed of Trust and shall enjoy the same priority as the
Obligations. Trustor acknowledges and agrees that notwithstanding any term or
provision contained in this Deed of Trust, the Credit Agreement or in the other
Loan Documents, Environmental Costs shall be exceptions to any nonrecourse or
exculpatory provision, if any, and Trustor shall be fully and personally liable
for Environmental Costs. Such liability shall not be limited to the original
principal amount of the obligations secured by this Deed of Trust. Trustor's
obligations hereunder shall survive foreclosure, deed in lieu of foreclosure,
release, reconveyance or any other transfer of the Trust Property constituting
real property or this Deed of Trust. For the purposes of any action brought
under this subparagraph Trustor hereby waives the defense of laches and any
applicable statute of limitations.

                                  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

                                       29
<PAGE>

provisions of this Section 8.02 shall be conclusive proof of the proper
substitution of such new trustee.

            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 in the State of
California.

                                   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

                                       30
<PAGE>

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 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

                                       31
<PAGE>

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 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, notwithstanding the provisions of Section 2924c(d) and Section 2924d of
the California Civil Code.

            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

                                       32
<PAGE>

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 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 CALIFORNIA 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 CALIFORNIA, 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, AND TRUSTOR HEREBY ACKNOWLEDGES THAT THE CALIFORNIA CODE OF CIVIL PROCEDURE
SECTIONS 580A, 580D AND 726 DO NOT APPLY TO THIS DEED OF TRUST, THE CREDIT
AGREEMENT AND THE LOAN DOCUMENTS AND, TO THE EXTENT THEY APPLY WAIVES TO THE
MAXIMUM EXTENT PERMITTED BY LAW ANY RIGHTS WHICH IT MAY HAVE UNDER THE SUCH
SECTIONS.

            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

                                       33
<PAGE>

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.

            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

                                       34
<PAGE>

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.

            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.

                                       35
<PAGE>

            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 (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 Suretyship Waivers. As used in this Section 9.25, the
term "Obligor" shall mean each any Obligor, other than the Trustor, obligated
for any of the Obligations secured by this Deed of Trust.

            (a) Representations and Warranties. Trustor represents and warrants
to Beneficiary that: (A) this Deed of Trust is executed, in part, at the request
of the Obligors; (B)

                                       36
<PAGE>

this Deed of Trust complies with all agreements between each Obligor regarding
Trustor's execution hereof; (C) Beneficiary has made no representation to any
Trustor as to the creditworthiness of any Obligor; and (D) Trustor has
established adequate means of obtaining from each Obligor on a continuing basis
financial and other information pertaining to such Obligor's financial
condition. Trustor agrees to keep adequately informed from such means of any
facts, events or circumstances which might in any way affect such Trustor's
risks hereunder. Trustor further agrees that Beneficiary shall have no
obligation to disclose to Trustor any information or material about any Obligor
which is acquired by Beneficiary in any manner. The liability of Trustor
hereunder shall be reinstated and revived, and the rights of Beneficiary shall
continue if and to the extent that for any reason any amount at any time paid on
account of any Obligation is rescinded or must otherwise be restored by
Beneficiary, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, all as though such amount had not been paid. The
determination as to whether any amount so paid must be rescinded or restored
shall be made by Beneficiary in its sole discretion; provided however, that if
Beneficiary chooses to contest any such matter at the request of Trustor,
Trustor agrees to indemnify and hold Beneficiary harmless from and against all
costs and expenses, including reasonable attorneys' fees, expended or incurred
by Beneficiary in connection therewith, including without limitation, any
litigation with respect thereto.

            (b)   General Suretyship Waivers.

                  (i)   Trustor waives any right to require Beneficiary to: (i)
      proceed against any Obligor or any other person; (ii) marshal assets or
      proceed against or exhaust any security held from any Obligor or any other
      person; (iii) take any action or pursue any other remedy in Beneficiary's
      power; or (iv) make any presentment or demand for performance, or give any
      notice of nonperformance, protest, notice of protest or notice of dishonor
      hereunder or in connection with any obligations or evidences of
      indebtedness held by Beneficiary as security for or which constitute in
      whole or in part the Obligations, or in connection with the creation of
      new or additional obligations.

                  (ii)  Trustor waives any defense to its obligations hereunder
      based upon or arising by reason of: (i) any disability or other defense of
      any Obligor or any other person; (ii) the cessation or limitation from any
      cause whatsoever, other than payment in full, of any Obligation; (iii) any
      lack of authority of any officer, director, partner, agent or any other
      person acting or purporting to act on behalf of any Obligor which is a
      corporation, partnership or other type of entity, or any defect in the
      formation of any such Obligor; (iv) the application by any Obligor of the
      proceeds of any Obligation for purposes other than the purposes
      represented by any Obligor to, or intended or understood by, Beneficiary
      or any Trustor; (v) any act or omission by Beneficiary which directly or
      indirectly results in or aids the discharge of any Obligor of any portion
      of the Obligations by operation of law or otherwise, or which in any way
      impairs or suspends any rights or remedies of Beneficiary against any
      Obligor; (vi) any impairment of the value of any interest in any security
      for the Obligations or any portion thereof, including without limitation,
      the failure to obtain or maintain perfection or recordation of any
      interest in any such security, the release of any such security without
      substitution, and/or the failure to preserve the value of, or to comply
      with applicable law in disposing of, any such security; or (vii) any
      modification of the Obligations, in any form whatsoever,

                                       37
<PAGE>

      including without limitation the renewal, extension, acceleration or other
      change in time for payment of, or other change in the terms of, the
      Obligations or any portion thereof, including increase or decrease of the
      rate of interest thereon. Until all Obligations shall have been paid in
      full, no Trustor shall have any right of subrogation, and Trustor waives
      any right to enforce any remedy which Beneficiary now has or may hereafter
      have against any Obligor or any other person, and waives any benefit of,
      or any right to participate in, any security now or hereafter held by
      Beneficiary. Trustor further waives all rights and defenses it may have
      arising out of: (1) any election of remedies by Beneficiary, even though
      that election of remedies, such as a non-judicial foreclosure with respect
      to any security for any portion of the Obligations, destroys Trustor's
      rights of subrogation or Trustor's rights to proceed against any Obligor
      for reimbursement; or (2) any loss of rights Trustor may suffer by reason
      of any rights, powers or remedies of any Obligor in connection with any
      anti-deficiency laws or any other laws limiting, qualifying or discharging
      any Obligor's obligations, whether by operation of Sections 726, 580a and
      580d of the Code of Civil Procedure as from time to time amended (to the
      extent California law applies or may be determined to apply), or
      otherwise, including any rights Trustor may have to a Section 580a fair
      market value hearing to determine the size of a deficiency following any
      trustee's foreclosure sale or other disposition of any security for any
      portion of the Obligations (to the extent California law applies or may be
      determined to apply).

                  (iii) If any of said waivers is determined to be contrary to
      any applicable law or public policy, such waiver shall be effective to the
      extent permitted by applicable law or public policy.

            (C)   Additional Suretyship Waivers.

                  (i)   Trustor hereby expressly waives and agrees not to assert
      or take advantage of any defense based upon:

                        (1) The incapacity, lack of authority, death or
            disability of any Obligor or any other person or entity;

                        (2) The failure of Beneficiary to commence an action
            against any Obligor or to proceed against or exhaust any security
            held by Beneficiary at any time, or to pursue any other remedy
            whatsoever at anytime;

                        (3) Any duty on the part of Beneficiary to disclose to
            Trustor any facts Beneficiary may now or hereafter know regarding
            any Obligor, regardless of whether Beneficiary has reason to believe
            (i) that any such facts materially increase the risk beyond that
            which Trustor intends to assume, or (ii) that such facts are unknown
            to Trustor, Trustor acknowledging that he, she or it is fully
            responsible for being and keeping informed of the financial
            condition and affairs of any Obligor;

                                       38
<PAGE>

                        (4) Lack of notice of default, demand of performance or
            notice of acceleration to any Obligor or any other party with
            respect to the Loans or any Obligor's obligations guarantied by
            Trustor;

                        (5) The consideration for the Loan Documents;

                        (6) The revocation or repudiation hereof by Trustor or
            the revocation or repudiation of any of the Loan Documents by any
            Obligor or any other person;

                        (7) The unenforceability in whole or in part of the Loan
            Documents against any Obligor;

                        (8) Any acts or omissions of Beneficiary which vary,
            increase or decrease the risk on Trustor;

                        (9) Any rights or defenses based upon an offset by
            Trustor against any obligation now or hereafter owed to Trustor by
            any Obligor;

                        (10) Any statute of limitations affecting the liability
            of Trustor hereunder, the liability of any Obligor or any other
            guarantor under the Loan Documents or the enforcement hereof, to the
            extent permitted by law;

                        (11) The application by any Obligor of the proceeds of
            the Loans or other financial accommodations under the Credit
            Agreement for purposes other than the purposes represented by any
            Obligor to Beneficiary and Trustor or intended or understood by
            Beneficiary or Trustor;

                        (12) An election of remedies by Beneficiary, including
            any election to proceed against any collateral by judicial or
            nonjudicial foreclosure, whether real property or personal property
            that is security for the any Obligor's obligations under the Loan
            Documents, or by deed in lieu thereof, and whether or not every
            aspect of any foreclosure sale is commercially reasonable, and
            whether or not any such election of remedies destroys or otherwise
            impairs the subrogation rights of Trustor or the rights of Trustor
            to proceed against any Obligor or any other guarantor by way of
            subrogation or for reimbursement or contribution, or all such
            rights;

                        (13) Any statute or rule of law which provides that the
            obligation of a surety must be neither larger in amount nor in any
            other aspects more burdensome than that of the principal obligor;

                        (14) Beneficiary's election, in any proceeding
            instituted under Title 11 of the Bankruptcy Code, of the application
            of Bankruptcy Code Section 1111(b)(2) or any successor statute;

                        (15) Any borrowing or any grant of a security interest
            under Bankruptcy Code Section 364; and

                                       39
<PAGE>

                        (16) Any other suretyship defense that may be available
            to Trustor. Without limiting the generality of the foregoing (to the
            extent California law applies or may be determined to apply),
            Trustor also waives (y) any defense based upon Beneficiary's
            election to waive its lien as to all or any security for the Loans
            or for the guarantor of any other person pursuant to California Code
            of Civil Procedure ("CCP ") Section 726.5, under any similar law in
            any other state that may be applicable because any Obligor's
            obligations are secured by a lien on real property in such state, or
            otherwise, and (z) any and all benefits which might otherwise be
            available to Trustor under California Civil Code ("Civil Code")
            Sections 2809, 2810, 2815, 2819, 2839, 2845 through 2850, 2899 and
            3433.

                  (ii)  Trustor understands and acknowledges that if Beneficiary
      forecloses judicially or nonjudicially against any real property that is
      security for any Obligor's obligations under the Loan Documents (other
      than this Deed of Trust), that foreclosure could impair or destroy any
      ability that Trustor may have to seek reimbursement, contribution or
      indemnification from any such Obligor based on any right Trustor may have
      of subrogation, reimbursement, contribution or indemnification for any
      amounts paid by Trustor under the Loan Documents or realized by
      Beneficiary by way of foreclosure of this Deed of Trust. Trustor further
      understands and acknowledges that in the absence of this provision, the
      potential impairment or destruction of Trustor's rights, if any, may (to
      the extent California law applies or may be determined to apply) entitle
      Trustor to assert a defense to its obligations under this Deed of Trust
      and the Loan Documents based on CCP Section 580d as interpreted in Union
      Bank vs. Gradsky. By executing this Deed of Trust, Trustor freely,
      irrevocably and unconditionally:

                        (1) waives and relinquishes that defense, and agrees
            that Trustor will be fully liable for its obligations under the Loan
            Documents and the Trust Property will continue to be security for
            the Obligations, even though Beneficiary may foreclose judicially or
            nonjudicially against any real property that is security for the any
            Obligor's obligations under the Loan Documents;

                        (2) agrees that Trustor will not assert that defense in
            any action or proceeding that Beneficiary may commence to enforce
            the obligations of Trustor under this Deed of Trust and the Loan
            Documents;

                        (3) acknowledges and agrees that the rights and defenses
            waived by Trustor under the Loan Documents include any right or
            defense that Trustor may have or be entitled to assert based upon or
            arising out of any one or more of the following: (i) CCP Sections
            580a (which if Trustor had not given this waiver, would otherwise
            limit Trustor's liability (and the extent of the Obligations to
            which the Trust Property would be exposed) after any nonjudicial
            foreclosure sale to the difference between the amount of the
            Obligations and the fair market value of the property or interests
            sold at such nonjudicial foreclosure sale against any real property
            that is security for the an Obligor's obligations under the Loan
            Documents rather than the actual proceeds of such sale), 580b and
            580d (which if Trustor had not given this waiver, would otherwise
            limit Beneficiary's right to recover a deficiency judgment (or to
            foreclose this Deed of Trust and otherwise

                                       40
<PAGE>

            pursue the Trust Property) with respect to purchase money
            obligations and after any nonjudicial foreclosure sale against any
            real property that is security for the an Obligor's obligations
            under the Loan Documents, respectively), or 726 (which, if Trustor
            had not given this waiver, among other things, would otherwise
            require Beneficiary to exhaust all of its security against an
            Obligor or Obligors before Beneficiary would be entitled to exercise
            its remedies under this Deed of Trust or pursue a personal judgment
            for a deficiency against the any Obligor); or (ii) Civil Code
            Section 2848; and

                        (4)   acknowledges and agrees that Beneficiary is
            relying on this waiver in making the Loan or other financial
            accommodations under the Credit Agreement, and that this waiver is a
            material part of the consideration that Beneficiary is receiving for
            making the Loans or other financial accommodations under the Credit
            Agreement. WITHOUT LIMITING THE FOREGOING, TRUSTOR WAIVES ALL RIGHTS
            AND DEFENSES THAT TRUSTOR HAS BECAUSE ANY OBLIGOR'S OBLIGATIONS
            UNDER THE LOAN DOCUMENTS ARE SECURED BY REAL PROPERTY. THIS MEANS,
            AMONG OTHER THINGS:

                              a.    BENEFICIARY MAY COLLECT FROM TRUSTOR OR
                  EXERCISE ITS REMEDIES UNDER THIS DEED OF TRUST WITHOUT FIRST
                  FORECLOSING ON ANY REAL OR PERSONAL PROPERTY COLLATERAL
                  PLEDGED BY ANY OBLIGOR; AND

                              b.    IF BENEFICIARY FORECLOSES ON ANY REAL
                  PROPERTY COLLATERAL PLEDGED BY ANY OBLIGOR:

                                    (i) THE AMOUNT OF THE OBLIGATIONS MAY BE
                              REDUCED ONLY BY THE PRICE FOR WHICH THAT
                              COLLATERAL IS SOLD AT THE FORECLOSURE SALE, EVEN
                              IF THE COLLATERAL IS WORTH MORE THAN THE SALE
                              PRICE; AND

                                    (ii) BENEFICIARY MAY COLLECT FROM TRUSTOR
                              AND EXERCISE ITS REMEDIES UNDER THIS DEED OF TRUST
                              EVEN IF BENEFICIARY, BY FORECLOSING ON THE REAL
                              PROPERTY COLLATERAL, HAS DESTROYED ANY RIGHT
                              TRUSTOR MAY HAVE TO COLLECT FROM ANY OBLIGOR.

            THIS IS AN UNCONDITIONAL AND IRREVOCABLE WAIVER OF ANY RIGHTS AND
            DEFENSES TRUSTOR HAS BECAUSE ANY OBLIGOR'S OBLIGATIONS UNDER THE
            LOAN DOCUMENTS ARE SECURED BY REAL PROPERTY. THESE RIGHTS AND
            DEFENSES INCLUDE, BUT ARE

                                       41
<PAGE>

            NOT LIMITED TO, ANY RIGHTS OR DEFENSES BASED UPON CCP SECTIONS 580a,
            580b, 580d OR 726.

            SECTION 9.26 Beneficiary Statement. Beneficiary may collect a fee
not to exceed the maximum allowed by applicable law for furnishing the statement
of obligation as provided in Section 2943 of the Civil Code of California.

            SECTION 9.27 Request for Notice. Pursuant to Section 2924b(d) of the
California Civil Code, Trustor and Beneficiary request that a copy of any notice
of default and a copy of any notice of sale be mailed to Trustor and
Beneficiary, respectively, at the address for such party set forth herein

            SECTION 9.28 Release and Reconveyance(A) . 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]

                                       42
<PAGE>

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

                                   TRUSTOR:

                                   LAKES SHINGLE SPRINGS, INC., a
                                   Minnesota corporation

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

                                       43
<PAGE>

                                 ACKNOWLEDGEMENT

STATE OF NEW YORK                )
                                 ) ss:
county of New York               )

On June 21, 2006 before me, Linda Yonha Kim (here insert name and title of the
officer), personally appeared Timothy J. Cope, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

                                      /s/ Linda Yonha Kim
                                      -----------------------------------------
                                                      Notary Public

                                       44

<PAGE>

                                    EXHIBIT A

                                LEGAL DESCRIPTION

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE UNINCORPORATED AREA, COUNTY
OF EL DORADO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

PARCEL A:

PARCEL 2, AS SHOWN ON THE PARCEL MAP FILED APRIL 4, 1978 IN BOOK 19 OF PARCEL
MAPS, AT PAGE 81, EL DORADO COUNTY RECORDS.

APN:  319-110-180-100

PARCEL B:

PARCEL 3, AS SHOWN ON THE PARCEL MAP FILED APRIL 4, 1978 IN BOOK 19 OF PARCEL
MAPS, AT PAGE 81, EL DORADO COUNTY RECORDS.

ANT 319-110-190-100

                                   Exhibit A-1<PAGE>

                                                                   EXHIBIT 10.10

                                                                  EXECUTION COPY

                            POKAGON GAMING AUTHORITY

                                 $305.0 Million

                          10-3/8% Senior Notes due 2014

                               PURCHASE AGREEMENT

                               dated June 15, 2006

                         BANC OF AMERICA SECURITIES LLC

<PAGE>

                               PURCHASE AGREEMENT

June 15, 2006

BANC OF AMERICA SECURITIES LLC
9 West 57th Street
New York, New York 10019
   As Initial Purchaser

Ladies and Gentlemen:

      Introductory. Pokagon Gaming Authority (the "Authority"), a wholly owned,
unincorporated instrumentality of the Pokagon Band of Potawatomi Indians, an
Indian tribe recognized by the Secretary of the Interior pursuant to 25 U.S.C.
Sections 1300j et seq. (the "Tribe"), proposes to issue and sell to Banc of
America Securities LLC (the "Initial Purchaser") $305.0 million in aggregate
principal amount of the Authority's 10-3/8% Senior Notes due 2014 (the "Notes").
Banc of America Securities LLC has agreed to act as the Initial Purchaser in
connection with the offering and sale of the Securities (as defined below).

      The Securities will be issued pursuant to an indenture, to be dated as of
June 22, 2006 (the "Indenture"), among the Authority, the Tribe, the Guarantors
(as defined below) and U.S. Bank National Association, as trustee (the
"Trustee"). The Securities will be issued only in book-entry form in the name of
Cede & Co., as nominee of The Depository Trust Company (the "Depositary")
pursuant to a letter of representations, to be dated on or before the Closing
Date (as defined in Section 2 hereof) (the "DTC Agreement"), between the
Authority and the Depositary.

      The payment of principal of, premium and interest on the Notes will be
fully and unconditionally guaranteed on a senior basis, jointly and severally,
by (i) Pokagon Properties, LLC, a Delaware limited liability company (the
"Delaware Guarantor"), and (ii) Filbert Land Development, LLC, an Indiana
limited liability company (together, the "Guarantors"), pursuant to their
guarantees (the "Guarantees"). The Notes and the Guarantees attached thereto are
herein collectively referred to as the "Securities." The obligations of the
Authority under the Notes and the Guarantors under the Guarantees will be
secured by security interests in or pledges of (the "Security Interests")
certain assets of the Authority and the Guarantors (the "Collateral").

      The net proceeds from the issuance of the Securities will be deposited by
the Authority into certain collateral and disbursement accounts pursuant to the
Cash Collateral and Disbursement Agreement (defined below) and will be used to
finance and develop, construct, equip and open the gaming facility and related
amenities to be built on Indian lands of the Tribe (the "Four Winds Casino and
Resort") and for certain other costs.

      The Securities will be secured obligations and the Authority will enter
into certain documents and agreements that will provide for the grant of the
Security Interests in the Collateral to the Trustee for the benefit of the
holders of the Notes (collectively, the "Security

<PAGE>

Documents"). The Security Interests will secure the payment and performance when
due of all the obligations of the Authority under the Notes, the Indenture and
the Security Documents.

      Each of the Tribe, the Authority and the Manager (as defined below)
understands that the Initial Purchaser proposes to make an offering of the
Securities on the terms and in the manner set forth herein and in the Pricing
Disclosure Package (as defined below) and agrees that the Initial Purchaser may
resell, subject to the conditions set forth herein, all or a portion of the
Securities to purchasers (the "Subsequent Purchasers") at any time after the
time this Agreement is executed by the parties hereto (the "Time of Execution").
The Securities are to be offered and sold to or through the Initial Purchaser
without being registered with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933 (as amended, the "Securities
Act," which term, as used herein, includes the rules and regulations of the
Commission promulgated thereunder), in reliance upon exemptions therefrom.
Pursuant to the terms of the Securities and the Indenture, investors who acquire
Securities shall be deemed to have agreed that Securities may only be resold or
otherwise transferred, after the date hereof, if such Securities are registered
for sale under the Securities Act or if an exemption from the registration
requirements of the Securities Act is available (including the exemptions
afforded by Rule 144A under the Securities Act ("Rule 144A") or Regulation S
under the Securities Act ("Regulation S")).

      The Authority and Great Lakes Gaming of Michigan, LLC, a Minnesota limited
liability company (f/k/a Great Lakes of Michigan, LLC) (the "Manager"), have
prepared and delivered to the Initial Purchaser copies of a Preliminary Offering
Memorandum, dated June 6, 2006 (the "Preliminary Offering Memorandum"), and have
prepared and delivered to the Initial Purchaser copies of a Pricing Supplement,
dated June 15, 2006 (the "Pricing Supplement"), describing the terms of the
Securities, each for use by the Initial Purchaser in connection with its
solicitation of offers to purchase the Securities. The Preliminary Offering
Memorandum and the Pricing Supplement are herein referred to as the "Pricing
Disclosure Package." Promptly after the Time of Execution, the Authority will
prepare and deliver to the Initial Purchaser a final offering memorandum dated
the date hereof (the "Final Offering Memorandum").

      The following documents are hereinafter collectively referred to as the
"Transaction Documents":

      (a) this Agreement;

      (b) the Indenture;

      (c) the Notes;

      (d) the Guarantees;

      (e) the Security Agreement, to be dated as of the Closing Date, from the
Authority and the Guarantors in favor of the Trustee for the benefit of the
holders of the Notes (the "Security Agreement");

                                      -2-
<PAGE>

      (f) the Cash Collateral and Disbursement Agreement (the "Collateral and
Disbursement Agreement"), to be dated as of the Closing Date, among the
Authority, the Guarantors and U.S. Bank National Association, as Trustee and
Disbursement Agent;

      (g) the Lakes Dominion Account Agreement (the "Lakes Dominion Agreement"),
to be dated as of the Closing Date, among the Authority, the Collateral Agent
and the Manager;

      (h) the Notes Dominion Account Agreement (the "Notes Dominion Agreement"),
to be dated as of the Closing Date, among the Authority, the Collateral Agent,
the other financial institution that is a party thereto and the Manager;

      (i) the Release and Waiver Agreements (collectively, the "Release and
Waiver Agreements"), dated as of the date hereof, executed by the Authority and
the Tribe, in one case, and by the Manager, in another case; and

      (j) the Intercreditor and Subordination Agreement, to be dated as of the
Closing Date, among the Trustee, the Manager the Collateral Agent.

      The following documents are hereinafter collectively referred to as the
"Material Agreements":

      (a) the Tribal-State Gaming Compact (the "Compact"), effective February
18, 1999, by and between the Tribe and the State of Michigan;

      (b) the Local Agreement with the City of New Buffalo, dated as of March
13, 2000, among the Tribe, the City of New Buffalo and the Township of New
Buffalo;

      (c) the Third Amended and Restated Development Agreement ("Development
Agreement"), dated January 25, 2006, as amended, between the Tribe and the
Manager;

      (d) the Third Amended and Restated Management Agreement ("Management
Agreement"), dated January 25, 2006, between the Tribe and the Manager;

      (e) the Architect Agreement, as amended, between the Tribe and Urban
Design Group, Inc.;

      (f) the Construction Agreement ("Construction Agreement"), between the
Tribe and Christman/Krauss-Anderson;

      (g) the Water Service Agreement, dated November 19, 2001, among the Tribe,
the City of New Buffalo and the Township of New Buffalo;

      (h) the County Road Agreement, dated June 1, 2006, among the Tribe, the
Manager, Lakes Entertainment, Inc. ("Lakes") and the Berrien County Road
Commissioners;

      (i) the Third Amended and Restated Lakes Development Note (the
"Development Note"), dated January 25, 2006, between the Tribe and Lakes;

                                      -3-
<PAGE>

      (j) the Third Amended and Restated Non-Gaming Land Acquisition Line of
Credit Agreement (the "Non-Gaming Note"), dated January 25, 2006, between the
Tribe and Lakes;

      (k) the Third Amended and Restated Transition Loan Note, dated January 25,
2006, between the Tribe and Lakes (and, together with the Development Note, the
"Lakes Notes"); and

      (l) the definitive documents relating to the furniture and equipment
financing (the "FF&E Documents"), to be dated as of the Closing Date, between
the Authority and the Banc of America Leasing & Capital, LLC.

      The Authority, the Manager and the Guarantors hereby confirm their
agreements with the Initial Purchaser as follows:

      SECTION 1. Representations and Warranties.

      1.1 The Tribe, the Authority and the Guarantors (collectively, the
"Pokagon Parties"), jointly and severally, hereby represent, warrant and
covenant to the Initial Purchaser that, as of the date hereof and as of the
Closing Date (references in this Section 1.1 to the "Offering Memorandum" are to
(x) the Pricing Disclosure Package in the case of representations and warranties
made as of the date hereof and (y) the Final Offering Memorandum in the case of
representations and warranties made as of the Closing Date):

      (a) No Registration Required. Subject to compliance by the Initial
Purchaser with the representations and warranties set forth in Section 2 hereof
and with the procedures set forth in Section 7 hereof, it is not necessary in
connection with the offer, sale and delivery of the Securities to the Initial
Purchaser and to each Subsequent Purchaser in the manner contemplated by this
Agreement and the Offering Memorandum to register the Securities under the
Securities Act or to qualify the Indenture under the Trust Indenture Act of 1939
(the "Trust Indenture Act," which term, as used herein, includes the rules and
regulations of the Commission promulgated thereunder).

      (b) No Integration of Offerings or General Solicitation. Subject to
compliance with the representations and warranties set forth in Sections 1.2 and
2 hereof by the Manager and the Initial Purchaser, respectively, none of the
Pokagon Parties or their affiliates (as such term is defined in Rule 501 under
the Securities Act) (each, an "Affiliate"), or any person acting on its or any
of their behalf (other than the Manager and the Initial Purchaser, as to whom
the Pokagon Parties make no representation or warranty) has, directly or
indirectly, solicited any offer to buy or offered to sell, or will, directly or
indirectly, solicit any offer to buy or offer to sell, in the United States or
to any United States citizen or resident, any security which is or would be
integrated with the sale of the Securities in a manner that would require the
Securities to be registered under the Securities Act. None of the Pokagon
Parties or their Affiliates or any person acting on its or any of their behalf
(other than the Manager and the Initial Purchaser, as to whom the Pokagon
Parties make no representation or warranty) has engaged or will engage, in
connection with the offering of the Securities, in any form of general
solicitation or general advertising within the meaning of Rule 502 under the
Securities Act. With respect to those Securities sold in reliance upon
Regulation S, (i) none of the Pokagon Parties or their Affiliates or

                                      -4-
<PAGE>

any person acting on its or their behalf (other than the Manager and the Initial
Purchaser, as to whom the Pokagon Parties make no representation or warranty)
has engaged or will engage in any directed selling efforts within the meaning of
Regulation S and (ii) each of the Pokagon Parties and their Affiliates and any
person acting on its or their behalf (other than the Manager and the Initial
Purchaser, as to whom the Pokagon Parties make no representation or warranty)
has complied and will comply with the offering restrictions set forth in
Regulation S.

      (c) Eligibility for Resale under Rule 144A. The Securities are eligible
for resale pursuant to Rule 144A and will not be, at the Closing Date, of the
same class as securities listed on a national securities exchange registered
under Section 6 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or quoted in a U.S. automated interdealer quotation system.

      (d) The Offering Memorandum. Neither the Pricing Disclosure Package, as of
the Time of Execution, nor the Final Offering Memorandum, as of its date or (as
amended or supplemented in accordance with Section 3(a), is applicable) as of
the Closing Date, contains or represents an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that this representation, warranty and agreement shall not
apply to statements in or omissions from the Pricing Disclosure Package, the
Final Offering Memorandum or any amendment or supplement thereto made in
reliance upon and in conformity with information furnished to the Authority in
writing by the Initial Purchaser expressly for use in the Pricing Disclosure
Package, the Final Offering Memorandum or amendment or supplement thereto, as
the case may be. The Pricing Disclosure Package contains, and the Final Offering
Memorandum will contain, all the information specified in, and meeting the
requirements of, Rule 144A. None of the Pokagon Parties has distributed or will
distribute, prior to the later of the Closing Date and the completion of the
Initial Purchaser's distribution of the Securities, any offering material in
connection with the offering and sale of the Securities other than the Pricing
Disclosure Package and the Final Offering Memorandum.

      (e) The Purchase Agreement. This Agreement has been duly authorized,
executed and delivered by, and is a valid and binding agreement of, each of the
Pokagon Parties, enforceable in accordance with its terms, except as (i) rights
to indemnification hereunder may be limited by applicable law, (ii) the
enforcement hereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles and (iii) the ability to waive exhaustion of tribal court remedies
may be limited by applicable law.

      (f) Authorization of the Securities. The Notes to be purchased by the
Initial Purchaser from the Authority are in the form contemplated by the
Indenture, have been duly authorized for issuance and sale pursuant to this
Agreement and the Indenture and, at the Closing Date, will have been duly
executed by the Authority and, when authenticated in the manner provided for in
the Indenture and delivered against payment of the purchase price therefor, will
constitute valid and binding agreements of the Authority, enforceable in
accordance with their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws relating to or affecting the rights

                                      -5-
<PAGE>

and remedies of creditors or by general equitable principles and except as the
ability to waive exhaustion of tribal court remedies may be limited by
applicable law, and will be entitled to the benefits of the Indenture. The
Guarantees of the Notes are in the form contemplated by the Indenture, have been
duly authorized for issuance and sale pursuant to this Agreement and the
Indenture and, at the Closing Date, will have been duly executed by each of the
Guarantors and, when the Notes have been authenticated in the manner provided
for in the Indenture and delivered against payment of the purchase price
therefor, will constitute valid and binding agreements of the Guarantors,
enforceable in accordance with their terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or by
general equitable principles and except as the ability to waive exhaustion of
tribal court remedies may be limited by applicable law, and will be entitled to
the benefits of the Indenture.

      (g) Authorization of the Indenture. At the Closing Date, the Indenture
will have been duly authorized, executed and delivered by the Pokagon Parties
and will constitute a valid and binding agreement of the Pokagon Parties,
enforceable against them in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles and except
as the ability to waive exhaustion of tribal court remedies may be limited by
applicable law.

      (h) Description of the Securities and the Indenture. The Securities and
the Indenture will conform in all material respects to the respective statements
relating thereto contained in the Offering Memorandum.

      (i) Authorization of the Transaction Documents. At the Closing Date, each
of the Transaction Documents to which any of the Pokagon Parties are a party
(other than those described in clauses (e) through (g) above) will have been
duly authorized, executed and delivered by such Pokagon Parties and will
(assuming the due authorization, execution and delivery thereof by or on behalf
of each of the other parties thereto) constitute a valid and binding agreement
of such Pokagon Parties, enforceable against them in accordance with their
respective terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of creditors
or by general equitable principles and except as (i) the ability to waive
exhaustion of tribal court remedies may be limited by applicable law and (ii)
recourse against interests in real property may be limited by the Tribe's
Constitution.

      (j) Material Agreements. At the Closing Date, each of the Material
Agreements (other than the Compact) to which any of the Pokagon Parties are a
party (assuming the due authorization, execution and delivery thereof by or on
behalf of each of the other parties thereto) will constitute a valid and binding
agreement of such Pokagon Parties, enforceable against them in accordance with
their respective terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles and except as the ability to waive exhaustion of tribal
court remedies may be limited by applicable law. As of the date hereof, there
are no defaults or events of default, that with notice, the passage of time or

                                      -6-
<PAGE>

otherwise could be a default, under any material provisions of such Material
Agreements by any party thereto.

      (k) No Material Adverse Change. Except as otherwise disclosed in the
Offering Memorandum, subsequent to the respective dates as of which information
is given in the Offering Memorandum: (i) there has been no material adverse
change, or any development that could reasonably be expected to result in a
material adverse change, in the condition, financial or otherwise, or in the
earnings, business, operations or prospects, whether or not arising from
transactions in the ordinary course of business, of the Pokagon Parties,
considered as one entity (any such change is called a "Pokagon Parties Material
Adverse Change"); and (ii) the Pokagon Parties have not incurred any material
liability or obligation, indirect, direct or contingent, not in the ordinary
course of business nor entered into any material transaction or agreement not in
the ordinary course of business.

      (l) Accountants. McGladrey & Pullen, LLP, which expressed its opinion with
respect to the financial statements (which term as used in this Agreement
includes the related schedules and notes thereto) included in the Offering
Memorandum, are independent public or certified public accountants within the
meaning of Regulation S-X under the Securities Act and the Exchange Act, and any
non-audit services provided by McGladrey & Pullen, LLP to the Pokagon Parties
have been duly approved.

      (m) Preparation of the Financial Statements. The financial statements
included in the Offering Memorandum present fairly the consolidated financial
position of the Authority as of and at the dates indicated. Such financial
statements have been prepared in conformity with United States generally
accepted accounting principles applied on a consistent basis throughout the
periods involved, except as may be expressly stated in the related notes
thereto. The financial data set forth in the Offering Memorandum under the
caption "Selected Historical Financial and Other Data" fairly present the
information set forth therein on a basis consistent with that of the audited
financial statements contained in the Offering Memorandum.

      (n) Non-Contravention of Existing Instruments; No Further Authorizations
or Approvals Required. None of the Pokagon Parties is in violation of any of its
organizational documents or is in default (or, with the giving of notice or
lapse of time, would be in default) ("Default") under any indenture, mortgage,
loan or credit agreement, note, contract, franchise, lease or other instrument
to which any of the Pokagon Parties is a party or by which it or any of them may
be bound, or to which any of the property or assets of any of the Pokagon
Parties is subject (each, an "Existing Instrument"), except for such Defaults as
would not, individually or in the aggregate, result in a Pokagon Parties
Material Adverse Change. The execution, delivery and performance by the Pokagon
Parties of the Material Agreements and the Transaction Documents to which it is
a party, and consummation of the transactions contemplated hereby and thereby
and by the Offering Memorandum (i) have been duly authorized by all necessary
company action and will not result in any violation of the provisions of the
organizational documents of any of the Pokagon Parties, (ii) will not conflict
with or constitute a breach of, or Default or a Debt Repayment Triggering Event
(as defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of any of the Pokagon Parties
pursuant to, or require the consent of any other party to, any Existing

                                      -7-
<PAGE>

Instrument, except for such conflicts, breaches, Defaults, liens, charges or
encumbrances as would not, individually or in the aggregate, result in a Pokagon
Parties Material Adverse Change and (iii) will not result in any violation of
any law, administrative regulation or administrative or court decree applicable
to any of the Pokagon Parties except for such violations that will not result in
a Pokagon Parties Material Adverse Change. No consent, approval, authorization
or other order of, or registration or filing with, any court or other
governmental or regulatory authority or agency is required for the execution,
delivery and performance by the Pokagon Parties of the Material Agreements and
the Transaction Documents, or consummation of the transactions contemplated
hereby and thereby and by the Offering Memorandum, to which it is a party,
except (i) as have been obtained or made by the Pokagon Parties and are in full
force and effect; (ii) may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the Securities
by the Initial Purchaser in the manner contemplated herein and in the Offering
Memorandum and (iii) such as will not result in a Pokagon Parties Material
Adverse Change or have a material adverse effect on the offering and sale of the
Securities and the transactions contemplated herein. As used herein, a "Debt
Repayment Triggering Event" means any event or condition which gives, or with
the giving of notice or lapse of time would give, the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by any of the Pokagon Parties.

      (o) No Material Actions or Proceedings. Except as otherwise disclosed in
the Offering Memorandum, there are no legal or governmental actions, suits or
proceedings pending or, to the best of the Authority's knowledge, threatened (i)
against or affecting any of the Pokagon Parties or (ii) which has as the subject
thereof any property owned or leased by any of the Pokagon Parties and any such
action, suit or proceeding, if determined adversely to the Pokagon Parties,
would result in a Pokagon Parties Material Adverse Change or adversely affect
the consummation of the transactions contemplated by this Agreement. No material
labor dispute with the employees of the Authority exists or, to the best of the
Authority's knowledge, is threatened or imminent.

      (p) Intellectual Property Rights. None of the Pokagon Parties has received
any notice of infringement or conflict with asserted trademarks, trade names,
patent rights, copyrights, licenses, approvals, trade secrets and other similar
rights of others, which infringement or conflict, if the subject of an
unfavorable decision, would result in a Material Adverse Change.

      (q) Permits. Except as otherwise disclosed in the Offering Memorandum, the
Pokagon Parties possess such valid and current certificates, licenses,
authorizations or permits issued by the appropriate state, federal, tribal or
foreign regulatory agencies or bodies necessary to conduct their respective
businesses, other than those certificates, licenses, authorization or permits
which in the aggregate would not result in a Pokagon Party Material Adverse
Change, and none of the Pokagon Parties has received any notice of proceedings
relating to the revocation or modification of, or non-compliance with, any such
certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a Pokagon
Parties Material Adverse Change.

                                      -8-
<PAGE>

      (r) Tax. None of the Pokagon Parties are required to pay any U.S. federal
or Michigan state income taxes.

      (s) Authority Not an "Investment Company". The Authority has been advised
of the rules and requirements under the Investment Company Act of 1940, as
amended (the "Investment Company Act," which term, as used herein, includes the
rules and regulations of the Commission promulgated thereunder). The Authority
is not, and after receipt of payment for the Securities will not be, an
"investment company" within the meaning of Investment Company Act and will
conduct its business in a manner so that it will not become subject to the
Investment Company Act.

      (t) Insurance. On the Closing Date, the Authority will be insured by
recognized and financially sound institutions with policies covering its
properties, operations, personnel and businesses, in such amounts and with such
deductibles and covering such losses and risks as are consistent with industry
practice to protect the Authority and its business as in effect on the Closing
Date ("Insurance").

      (u) No Price Stabilization or Manipulation. None of the Authority or any
of the Guarantors has taken and will not take, directly or indirectly, any
action designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of any security of the Authority to
facilitate the sale or resale of the Securities.

      (v) Compliance with Environmental Laws. Except as would not, individually
or in the aggregate, result in a Pokagon Parties Material Adverse Change: (i)
neither the Authority nor any of the Guarantors is in violation of any federal,
state, local or foreign law or regulation relating to pollution or protection of
human health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating to emissions,
discharges, releases or threatened releases of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum and
petroleum products (collectively, "Materials of Environmental Concern"), or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of Environmental Concern
(collectively, "Environmental Laws"), which violation includes, without
limitation, noncompliance with any permits or other governmental authorizations
required for the operation of the business of the Company or its subsidiaries
under applicable Environmental Laws, or noncompliance with the terms and
conditions thereof, nor has the Authority or any of the Guarantors received any
written communication, whether from a governmental authority, citizens group,
employee or otherwise, that alleges that the Authority or any of the Guarantors
is in violation of any Environmental Law; (ii) there is no claim, action or
cause of action filed with a court or governmental authority, no investigation
with respect to which the Authority has received written notice, and no written
notice by any person or entity alleging potential liability for investigatory
costs, cleanup costs, governmental responses costs, natural resources damages,
property damages, personal injuries, attorneys' fees or penalties arising out
of, based on or resulting from the presence, or release into the environment, of
any Material of Environmental Concern at any location owned, leased or operated
by the Authority or any of the Guarantors, now or in the past (collectively,
"Environmental Claims"), pending or, to the best of the Authority's knowledge,
threatened

                                      -9-
<PAGE>

against the Authority or any of the Guarantors or any person or entity whose
liability for any Environmental Claim the Authority or any of the Guarantors has
retained or assumed either contractually or by operation of law; and (iii) to
the best of the Authority's knowledge, there are no past or present actions,
activities, circumstances, conditions, events or incidents, including, without
limitation, the release, emission, discharge, presence or disposal of any
Material of Environmental Concern, that would result in a violation of any
Environmental Law or form the basis of a potential Environmental Claim against
the Authority or any of the Guarantors or against any person or entity whose
liability for any Environmental Claim the Authority or any of the Guarantors has
retained or assumed either contractually or by operation of law.

      (w) IGRA. The Tribe is an Indian tribe within the meaning of Indian Gaming
Regulatory Act of 1988, as amended ("IGRA"), with the authority to enter into
and perform its obligations under each of the Transaction Documents and Material
Agreements to which it is a party.

      (x) Constitution. The Constitution of the Tribe (the "Constitution"),
approved November 1, 2005, was duly and validly adopted by the Tribe, is the
only constitution of the Tribe and is the valid and governing law of the Tribe.

      (y) Tribal Council. The tribal council referred to in the Constitution
(the "Tribal Council") is the governing body of the Tribe, and all members of
the Tribal Council are validly serving.

      (z) Compact. The Compact has been duly and validly authorized, executed
and delivered by the Tribe, has been deemed approved by the Secretary of the
Interior of the United States, and such approval has been duly published in the
Federal Register. As of the date hereof, the Pokagon Parties are in compliance
with all material terms and conditions of the Compact.

      (aa) Gaming Ordinance. The Tribal Council has duly and validly adopted the
Tribal Gaming Regulatory Act on May 10, 2003, and subsequently amended that act
on October 13, 2003 (as amended, the "Gaming Ordinance"). As required by IGRA,
the Gaming Ordinance was duly approved by the National Indian Gaming Commission
(the "NIGC"). The Gaming Ordinance (i) has not been amended or repealed and is
in full force and effect as the law of the Tribe, (ii) authorizes the class II
and class III gaming within the meaning of IGRA that is proposed to be conducted
at the Four Winds Casino and Resort, (iii) satisfies the requirements under IGRA
that the Tribe adopt a gaming ordinance prior to engaging in class II or class
III gaming and (iv) complies in all material respects with the requirements of
the Compact and IGRA.

      (bb) Authority Ordinance. The Tribal Council has the requisite power and
authority to adopt the Ordinance dated May 25, 2006 entitled "Ordinance of the
Pokagon Band of Potawatomi Indians Establishing and Governing the Pokagon Gaming
Authority" (the "Authority Ordinance") as the law of the Tribe. The Authority
Ordinance (i) was duly and validly adopted by the Tribal Council, (ii) is in
full force and effect, (iii) has not been further amended or repealed in any
manner and (iv) is the governing law of the Tribe.

                                      -10-
<PAGE>

      (cc) The Authority. The Authority (i) is a wholly owned, unincorporated
instrumentality of the Tribe and is not a separate entity from the Tribe for
federal or state income tax purposes, (ii) is governed by a board of directors
("Board of Directors") which has the requisite power and authority to authorize
the Authority to (A) enter into the Transaction Documents to which the Authority
is a party and (B) pledge the revenue and assets of the Authority in accordance
with the Transaction Documents and (iii) has the requisite power and authority
to own and operate its properties, including the "Gaming Assets" as defined in
the Authority Ordinance, to conduct its business as described in the Offering
Memorandum and to enter into and perform its obligations under the Transaction
Documents to which it is a party. The Board of Directors has duly adopted the
resolution referred to in clause (ii) above and the Resolution is in full force
and effect and has not been amended or repealed in any manner. The Authority
does not have any subsidiaries other than the Guarantors.

      (dd) Requisite Power. The Pokagon Parties have all requisite power and
authority necessary to enter into, execute, deliver and perform their
obligations, if any, under each of the Transaction Documents and Material
Agreements to which any of them is a party and to consummate the transactions
contemplated hereby and thereby, including, without limitation, the power and
authority necessary to issue, sell and deliver the Securities in accordance with
and upon the terms and conditions set forth in this Agreement, the Indenture and
the Offering Memorandum.

      (ee) Referendum Rights. No initiative or referendum rights exist for
members of the Tribe permitting any member or any number of members of the Tribe
to call for or conduct, in any manner, a review of any action taken by the
Authority or the Tribal Council, whether by way of an initiative, referendum or
otherwise, with respect to any authorization, execution, delivery or performance
of its obligations under this Agreement or the Transaction Documents or the
Material Agreements to which it is a party, by the Authority or the Tribal
Council or any actions contemplated to be taken by the Authority or the Tribal
Council in connection therewith.

      (ff) Description. Each of the Transaction Documents and the Material
Agreements described in the Offering Memorandum conform as to legal matters to
the description thereof contained in the Offering Memorandum.

      (gg) Notes. When issued, the Notes will rank pari passu in right of
payment with all of the Authority's other unsubordinated indebtedness.

      (hh) Restrictions. No law of the Tribe imposes any restrictions on the
rate, yield or return payable by or on behalf of the Tribe or the Authority on
its indebtedness.

      (ii) Casino Site. At Closing, each parcel of land on which the Four Winds
Casino and Resort is proposed to be located, together with all improvements
related thereto included within the meaning of "Class III gaming facility"
within the Compact (collectively, the "Casino Site"), will constitute Indian
land, within the meaning of IGRA, over which the Tribe has jurisdiction and on
which class II and class III gaming is permitted to be conducted by the
Authority under IGRA. At Closing, the Casino Site will be held by the United
States in trust for the benefit of the

                                      -11-
<PAGE>

Tribe, subject to no mortgage, lien, easement, interest, estate or other
encumbrance that would reasonably be expected to result in a Pokagon Parties
Material Adverse Change.

      (jj) Exclusive Right. The Authority has the exclusive right to develop and
operate, collect the revenues, and pledge the revenues and assets of the Four
Winds Casino and Resort, subject to the ownership rights of the Tribe in and to
the real property and the buildings and fixtures located thereon and related
thereto held in trust for the Tribe by the United States and the rights of the
Manager pursuant to the Management Agreement. The Authority has all necessary
and desirable access and right to enter onto the lands held in trust for the
Tribe for the purpose of operating the Four Winds Casino and Resort and
conducting the business of the Authority.

      (kk) Security Interest. Upon the (i) execution and delivery to the Trustee
or the Collateral Agent, as applicable, of each of the Security Agreement, the
Collateral and Disbursement Agreement, the Notes Dominion Account Agreement and
the Lakes Dominion Account Agreement and (ii) the filing of the UCC-1 financing
statements as contemplated by the Indenture and the other Security Documents,
the Trustee or the Collateral Agent, as applicable, will have a valid, duly
perfected, first priority security interest in all of the rights and property in
which a security interest is granted under the Security Documents, subject to
any liens permitted by the Security Documents, as security for the payment of
obligations of the Authority under the Indenture and the Notes. The actions,
recordings and filings described in the immediately preceding sentence are the
only actions, recordings and filings necessary to publish notice of and perfect
the rights of the Trustee under the Security Documents, except for such
additional actions, recordings and filings as the Authority, Initial Purchaser
and the Trustee may determine prior to the Closing Date.

      (ll) Section 9310. Other than as provided in Section 9310 of the Uniform
Commercial Code as adopted by the Tribe (the "UCC"), no filing, recording or
other act is required under any law, rule or ordinance of the Tribe to perfect
and maintain the perfection of the security interests in the Collateral.

      (mm) Use. Except as set forth in the Offering Memorandum, the contemplated
operation and use and construction of the Four Winds Casino and Resort in the
manner set forth in the Offering Memorandum will be, at the time of operation
and use and construction, as applicable, in compliance with all applicable
municipal, county, state, tribal and federal laws, regulations, ordinances,
standards, order and other regulations, where the failure to comply therewith
would not, individually or in the aggregate, have a Pokagon Parties Material
Adverse Change. Except as set forth in the Offering Memorandum, under current
applicable Gaming Laws, the Four Winds Casino and Resort may be used for the
purposes contemplated in the Offering Memorandum, the Indenture, the Notes and
the Security Documents.

      (nn) Construction Plans. The anticipated schedule of construction of the
Four Winds Casino and Resort is as set forth in the Offering Memorandum. The
anticipated cost of construction of the Four Winds Casino and Resort (including
interest, legal, architectural, engineering, planning, zoning and other similar
costs) does not exceed the amounts for such costs set forth under the caption
"Use of Proceeds" in the Offering Memorandum. In addition, each of the other
amounts set forth in the section entitled "Sources and Uses of Funds" under the

                                      -12-
<PAGE>

caption "Use of Proceeds" in the Offering Memorandum are based upon reasonable
assumptions as to all matters material to the estimates set forth therein and
are not expected to exceed the amounts set forth for such items.

      (oo) Relationships. Except as disclosed in the Offering Memorandum, no
relationship, direct or indirect, exists between or among any of the Pokagon
Parties, on the one hand, and the directors, officers, employees,
representatives, members or council persons or Affiliates, of any of the Pokagon
Parties, on the other hand, which would be required by the Securities Act to be
described in the Offering Memorandum if the Offering Memorandum were a
prospectus included in a registration statement on Form S-1 filed with the
Commission.

      (pp) Data. The statistical and market-related data included in the
Offering Memorandum are based on or derived from sources which the Authority
believes to be reliable and accurate in all material respects.

      (qq) Tribal UCC. The UCC was duly and validly adopted by the Tribal
Council, and is a valid law of the Tribe. No applicable law, ordinance, rule,
regulation or resolution of the Tribe, or any agency, subdivision, department,
commission or enterprise (each, a "Governmental Component") thereof conflicts
with or contravenes the UCC of the Tribe.

      (rr) Arbitration Code. The Arbitration Code of the Tribe (the "Tribal
Arbitration Code") was duly and validly adopted by the Tribal Council, and is
the valid law of the Tribe. No applicable law, ordinance, rule, regulation or
resolution of the Tribe, any Governmental Component thereof or any court of the
Tribe conflicts with or contravenes the Tribal Arbitration Code.

      (ss) Sovereign Immunity. The waivers of sovereign immunity (including the
related agreements to submit claims to binding arbitration) by each of the
Pokagon Parties contained in this Agreement and each of the Transaction
Documents to which any Pokagon Party is a party are in compliance with all
applicable federal and Tribal laws and, upon execution of such documents, will
effectively waive the sovereign immunity of each respective Pokagon Party, will
be irrevocable, validly and legally binding on each Pokagon Party, enforceable
against each in accordance with their respective terms and no further action
will be required to make each such waiver effective.

      (tt) Regulation T, U and X. None of the execution, delivery and
performance of this Agreement, the issuance and sale of the Notes, the
application of the proceeds from the issuance of the Notes and the consummation
of the transactions contemplated thereby as set forth in the Offering
Memorandum, will violate Regulation T (12 C.F.R. Part 220), Regulation U (12
C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) promulgated by the Board
of Governors of the Federal Reserve System or analogous foreign law and
regulations.

      (uu) No Contracts. Except pursuant to this Agreement and the engagement
letter relating to the offering of the Securities and except as disclosed in the
Offering Memorandum, there are no contracts, agreements or understandings
between the Pokagon Parties and any other

                                      -13-
<PAGE>

person that would give rise to a valid claim against the Pokagon Parties for a
brokerage commission, finder's fee or like payment in connection with this
Offering, the issuance of Notes.

      (vv) Registration Rights. There are no holders of securities of the
Authority who, by reason of the Authority's execution of this Agreement or any
other Transaction Document to which it is a party or the consummation by the
Authority of the transactions contemplated hereby and thereby, have the right to
request or demand that the Authority register under the Securities Act or
analogous foreign laws and regulations securities held by them.

      (ww) Default. There exist no conditions that would constitute a default
(or an event of which with notice or lapse of time, or both, would constitute a
default) under any of the Transaction Documents to which the Pokagon Parties are
a party.

      (xx) Licensing Requirements. It is not necessary under federal, state,
Tribal or local laws that any of the holders of the Securities be licensed,
qualified or entitled to carry on business in any such jurisdiction by reason of
the execution, delivery, performance or enforcement of any of the Transaction
Documents or the Securities.

      (yy) No Management Contract. None of the Transaction Documents to which
any Pokagon Party is a party, taken individually or as a whole, constitutes a
"management contract" or a "management agreement" within the meaning of 25
U.S.C. Section 2711, or deprives the Authority of the sole proprietary interest
and responsibility of the conduct of gaming. No consent, approval, authorization
or order of, and notice to or filing with, any governmental agency or body or
any court, including specifically the Secretary of the Interior of the United
States or the Chairman of the National Indian Gaming Commission, is required to
be obtained in connection with the execution, delivery and performance of the
Transaction Documents or as a condition of their validity or enforceability.

      (zz) Certificates. Each certificate signed by any officer of the Pokagon
Parties and delivered to the Initial Purchaser, or counsel for the Initial
Purchaser, shall be deemed a representation and warranty by such Pokagon Party
to the Initial Purchaser as to the matters covered thereby.

      The Pokagon Parties acknowledge that the Initial Purchaser and, for
purposes of the opinions to be delivered to the Initial Purchaser pursuant to
Section 5 hereof, counsel for the Initial Purchaser and counsel for the Manager
will rely upon the accuracy and truth of the foregoing representations and
hereby consent to such reliance.

      1.2 The Manager represents and warrants to the Pokagon Parties and to the
Initial Purchaser that, as of the date hereof and as of the Closing Date
(references in this Section 1 to the "Offering Memorandum" are to (x) the
Pricing Disclosure Package in the case of representations and warranties made as
of the date hereof and (y) the Final Offering Memorandum in the case of
representations and warranties made as of the Closing Date):

      (a) No General Solicitation. None of the Manager or its Affiliates or any
person acting on its or any of their behalf (other than the Initial Purchaser
and the Pokagon Parties, as to

                                      -14-
<PAGE>

whom the Manager makes no representation or warranty) has engaged or will
engage, in connection with the offering of the Securities, in any form of
general solicitation or general advertising within the meaning of Rule 502 under
the Securities Act. With respect to those Securities sold in reliance upon
Regulation S, (i) none of the Manager or its Affiliates or any person acting on
its or their behalf (other than the Initial Purchaser and the Pokagon Parties,
as to whom the Manager makes no representation or warranty) has engaged or will
engage in any directed selling efforts within the meaning of Regulation S and
(ii) each of the Manager and its Affiliates and any person acting on its or
their behalf (other than the Initial Purchaser and the Pokagon Parties, as to
whom the Manager makes no representation or warranty) has complied and will
comply with the offering restrictions set forth in Regulation S.

      (b) The Offering Memorandum. Neither (i) the information furnished by the
Manager for use in either the Pricing Disclosure Package, as of the Time of
Execution, or the Offering Memorandum, as of its date or (as amended or
supplemented in accordance with Section 3(a), as applicable) as of the Closing
Date; nor (ii) to the knowledge of the Manager, any other information contained
in the Pricing Disclosure Package, as of the Time of Execution, or the Offering
Memorandum, as of its date or (as amended or supplemented in accordance with
Section 3(a), as applicable) contains or represents an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that this representation, warranty and agreement
shall not apply to statements in or omissions from the Pricing Disclosure
Package, the Offering Memorandum or any amendment or supplement thereto made in
reliance upon and in conformity with information furnished to the Authority or
the Manager in writing by the Initial Purchaser expressly for use in the Pricing
Disclosure Package, the Offering Memorandum or amendment or supplement thereto,
as the case may be. Neither the Manager nor its Affiliates has distributed or
will distribute, prior to the later of the Closing Date and the completion of
the Initial Purchaser's distribution of the Securities, any offering material in
connection with the offering and sale of the Securities other than the Pricing
Disclosure Package and the Final Offering Memorandum.

      (c) Duly Organized. The Manager has been duly formed and is validly
existing as a Minnesota limited liability company, in good standing under the
laws of the jurisdiction of its formation and has power and authority to own,
hold, lease and operate its properties and to conduct its business as described
in the Offering Memorandum and to enter into and perform its obligations under
each of the Transaction Documents and Material Agreements to which the Manager
is a party. The Manager is duly qualified as a foreign corporation to transact
business and is in good standing or equivalent status in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except for such jurisdictions
where the failure to so qualify or to be in good standing would not be expected
to (i) individually or in the aggregate, have a material adverse effect on the
business, condition (financial or otherwise), results of operations, properties,
affairs or prospects of the Manager, taken as a whole, (ii) prevent the issuance
of the Notes or (iii) invalidate this Agreement or any other Transaction
Document or Material Agreements to which it is a party, the transactions
described in the Offering Memorandum (any of the event set forth in clauses (i),
(ii) or (iii), a "Manager Material Adverse Change"). The Manager has no
subsidiaries.

                                      -15-
<PAGE>

      (d) Requisite Power. The Manager has all requisite power and authority
necessary to enter into, execute, deliver and perform its material obligations,
if any, under each of the Transaction Documents and Material Agreements to which
it is a party and to consummate the transactions contemplated hereby and
thereby, including, without limitation in accordance with and upon the terms and
conditions set forth in this Agreement, the Management Agreement and the
Offering Memorandum.

      (e) Authority. This Agreement and each of the Transaction Documents to
which the Manager is a party has been duly and validly authorized, executed and
delivered by the Manager and (assuming due authorization, execution and delivery
thereof by or on behalf of each of the other parties thereto) is the valid and
legally binding obligation of the Manager, enforceable against it in accordance
with its terms, except as rights to indemnification, if any, hereunder may be
limited by applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.

      (f) Full Force. The Material Agreements to which the Manager is a party
are in full force and effect as of the date hereof, enforceable against them, as
applicable, in accordance with their respective terms, except as rights to
indemnification, if any, hereunder may be limited by applicable law and except
as the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles. As of the
date hereof, there are no defaults or events of default, that with notice, the
passage of time or otherwise could be a default, under any provisions of such
Material Agreements by the Manager or, to the Manager's knowledge, any other
party thereto.

      (g) Conflicts. The Manager is not in violation of its governing documents
or limited liability company agreement and is not in default (or, with the
giving of notice or lapse of time, would be in default) under any indenture,
mortgage, loan or credit agreement, note, contract, franchise, lease or other
instrument to which the Manager is a party or by which it may be bound, or to
which any of the property or assets of the Manager is subject (each, a "Manager
Existing Instrument"), except for such defaults as would not, individually or in
the aggregate, result in a Manager Material Adverse Change. The Manager's
execution, delivery and performance of this Agreement or any other Transaction
Documents to which it is a party will not (i) except as described in the Release
and Waiver Agreements, conflict with or constitute a breach of, or Default or a
Manager Debt Repayment Triggering Event (as defined below) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Manager, or require the consent of any other party to, any
Manager Existing Instrument and (ii) will not result in any violation of any
law, administrative regulation or administrative or court decree applicable to
the Manager. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or regulatory
authority or agency, is required for the Manager's delivery and performance of
this Agreement or any Transaction Document to which it is a party. As used
herein, a "Manager Debt Repayment Triggering Event" means any event or condition
which gives, or with the giving of notice or lapse of time would give, the
holder of any note, debenture or other evidence of indebtedness (or any person

                                      -16-
<PAGE>

acting on such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Manager.

      (h) Proceedings. Except as otherwise disclosed in the Offering Memorandum,
there are no legal or governmental actions, suits or proceedings pending or, to
the best of the Manager's knowledge, threatened (i) against or affecting the
Manager or (ii) which has as the subject thereof any property owned or leased by
the Manager and any such action, suit or proceeding that is reasonably likely to
result in a Manager Material Adverse Change or adversely affect the consummation
of the transactions contemplated by this Agreement.

      (i) Permits. The Manager possesses such valid and current certificates,
licenses, authorizations or permits issued by the appropriate state, federal,
tribal or foreign regulatory agencies or bodies necessary to conduct its
business as currently contemplated, and the Manager has not received any notice
of proceedings relating to the revocation or modification of, or non-compliance
with, any such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a Manager Material Adverse Change.

      (j) NIGC. No other person other than the Manager and those disclosed in
writing to the NIGC has an interest in the Material Agreements to which the
Manager is a party which is required to be disclosed to the NIGC.

      (k) Other Management Contracts. There are no management contracts or
collateral agreements within the meaning of IGRA relating to the Four Winds
Casino and Resort to which the Manager is a party except for the Material
Agreements and the Transaction Documents.

      (l) Tax. Except for taxes which are currently being disputed in good faith
and with respect to which appropriate reserves have been made, the Manager has
filed all necessary federal, state and foreign income and franchise tax returns
and has paid all taxes required to be paid by it and, if due and payable, any
related or similar assessment, fine or penalty levied against it.

      (m) Material Adverse Change. Except as otherwise disclosed in the Offering
Memorandum, subsequent to the respective dates as of which information is given
in the Offering Memorandum: (i) there has been no Manager Material Adverse
Change, or any development that could reasonably be expected to result in a
Manager Material Adverse Change; (ii) the Manager has not incurred any material
liability or obligation, indirect, direct or contingent, not in the ordinary
course of business nor entered into any material transaction or agreement not in
the ordinary course of business.

      (n) No Contracts. Other than the Engagement Letter, there are no
contracts, agreements or understandings between the Manager and any other person
that would give rise to a valid claim against the Manager for a brokerage
commission, finder's fee or like payment in connection with this Offering or the
issuance of the Notes.

                                      -17-
<PAGE>

      (o) Default. There exist no conditions that would constitute a default (or
an event which with notice or lapse of time, or both, would constitute a
default) by the Manager under any of the Transaction Documents or Material
Agreements to which the Manager is a party.

      (p) Construction Plans. The Initial Purchaser has been furnished with a
copy of the plans and specifications for the construction of the Four Winds
Casino and Resort and other necessary expenditures. The anticipated schedule of
construction of the Four Winds Casino and Resort is as set forth in the Offering
Memorandum. The anticipated cost of construction of the Four Winds Casino and
Resort (including interest, legal, architectural, engineering, planning, zoning
and other similar costs) does not exceed the amounts for such costs set forth
under the caption "Use of Proceeds" in the Offering Memorandum. In addition,
each of the other amounts set forth in the section entitled "Sources and Uses of
Funds" under the caption "Use of Proceeds" in the Offering Memorandum are based
upon reasonable assumptions as to all matters material to the estimates set
forth therein and are not expected to exceed the amounts set forth for such
items.

      (q) Data. The statistical and market-related data included in the Offering
Memorandum are based on or derived from sources which the Manager believes to be
reliable and accurate in all material respects.

      (r) Certificates. Each certificate signed by any officer of the Manager
and delivered to the Initial Purchaser, or counsel for the Initial Purchaser,
shall be deemed a representation and warranty by the Manager to the Initial
Purchaser as to the matters covered thereby.

      The Manager acknowledges that the Initial Purchaser and, for purposes of
the opinions to be delivered to the Initial Purchaser pursuant to Section 5
hereof, counsel for the Tribe and the Authority, will rely upon the accuracy and
truth of the foregoing representations and hereby consents to such reliance.

      SECTION 2. Purchase, Sale and Delivery of the Securities.

      (a) The Securities. Each of the Authority and the Guarantors agree to
issue and sell to the Initial Purchaser all of the Securities, and the Initial
Purchaser agrees to purchase from the Authority and the Guarantors all of the
Securities, at a purchase price of 100% of the principal amount thereof payable
on the Closing Date, in each case, on the basis of the representations,
warranties and agreements herein contained, and upon the terms, subject to the
conditions thereto, herein set forth. The Authority agrees to pay the Initial
Purchaser total discounts and commissions on the Securities of $7,618,750.

      (b) The Closing Date. Delivery of certificates for the Securities in
definitive form to be purchased by the Initial Purchaser and payment therefor
shall be made at the offices of White & Case LLP, 1155 Avenue of the Americas,
New York, New York 10036 (or such other place as may be agreed to by the
Authority, the Manager and Banc of America Securities LLC) at 9:00 a.m. New York
City time, on June 22, 2006, or such other time and date as Banc of America
Securities LLC, the Authority and the Manager shall agree (the time and date of
such closing are called the "Closing Date"). The Authority and the Manger hereby
acknowledge that

                                      -18-
<PAGE>

circumstances under which Banc of America Securities LLC may provide notice to
postpone the Closing Date as originally scheduled include, but are in no way
limited to, any determination by the Authority, the Manager or the Initial
Purchaser to recirculate to investors copies of an amended or supplemented
Offering Memorandum.

      (c) Delivery of the Securities. The Authority shall deliver, or cause to
be delivered, to Banc of America Securities LLC for the accounts of the Initial
Purchaser certificates for the Notes at the Closing Date against the irrevocable
release of a wire transfer of immediately available funds for the amount of the
purchase price therefor. The certificates for the Notes shall be in such
denominations and registered in the name of Cede & Co., as nominee of the
Depositary, pursuant to the DTC Agreement, and shall be made available for
inspection on the business day preceding the Closing Date at a location in New
York City, as Banc of America Securities LLC may designate. Time shall be of the
essence, and delivery at the time and place specified in this Agreement is a
further condition to the obligations of the Initial Purchaser.

      (d) Initial Purchaser as Qualified Institutional Buyer. The Initial
Purchaser represents and warrants to, and agrees with, the Authority and the
Manager that it is a "qualified institutional buyer" within the meaning of Rule
144A (a "Qualified Institutional Buyer").

      (e) Distribution of Offering Memorandum. The Initial Purchaser has not
distributed and will not distribute, prior to the later of the Closing Date and
the completion of the Initial Purchaser's distribution of the Securities, any
offering material in connection with the offering and sale of the Securities
other than the Preliminary Offering Memorandum, the Pricing Supplement or the
Final Offering Memorandum.

      SECTION 3. Additional Covenants. Each of the Authority, the Manager and
the Guarantors, as noted below, further covenants and agrees with the Initial
Purchaser as follows:

      (a) Preparation of Final Offering Memorandum; Initial Purchaser's Review
of Proposed Amendments and Supplements. As promptly as practicable following the
Time of Execution and in any event not later than the second business day
following the date hereof, the Authority will prepare and deliver to the Initial
Purchaser the Final Offering Memorandum. The Authority will not amend or
supplement the Preliminary Offering Memorandum, the Pricing Supplement or, prior
the Closing Date, the Final Offering Memorandum unless the Initial Purchaser
shall previously have been furnished a copy of the proposed amendment or
supplement at least one business day prior to the proposed use or filing, and
shall not have objected to such amendment or supplement.

      (b) Amendments and Supplements to the Final Offering Memorandum and Other
Securities Act Matters. If, prior to the later of (x) the Closing Date and (y)
the completion of the placement of the Securities by the Initial Purchaser with
the Subsequent Purchasers, any event shall occur or condition exist as a result
of which it is necessary to amend or supplement the Final Offering Memorandum,
as then amended or supplemented, in order to make the statements therein, in the
light of the circumstances when the Final Offering Memorandum is delivered to a
Subsequent Purchaser, not misleading, or if it is otherwise necessary to amend
or supplement the Final Offering Memorandum to comply with law, the Authority
agrees to promptly prepare

                                      -19-
<PAGE>

(subject to Section 3 hereof), and furnish at its own expense to the Initial
Purchaser, amendments or supplements to the Final Offering Memorandum so that
the statements in the Final Offering Memorandum as so amended or supplemented
will not, in the light of the circumstances at the Closing Date and at the time
of sale of Securities, be misleading or so that the Final Offering Memorandum,
as amended or supplemented, will comply with all applicable law.

      (c) Indemnity. Each of the Authority and the Manager hereby expressly
acknowledges that the indemnification and contribution provisions of Sections 8
and 9 hereof are specifically applicable and relate to each offering memorandum,
amendment or supplement referred to in this Section 3.

      (d) Copies of the Offering Memorandum. The Authority agrees to furnish the
Initial Purchaser, without charge, as many copies of the Pricing Disclosure
Package and the Final Offering Memorandum and any amendments and supplements
thereto as it shall have reasonably requested.

      (e) Blue Sky Compliance. Each of the Authority and the Guarantors shall
cooperate with the Initial Purchaser and counsel for the Initial Purchaser to
qualify (or to obtain exemptions from qualifying) all or any part of the
Securities for offer and sale under the securities laws of the several states of
the United States, the provinces of Canada or any other jurisdictions designated
by the Initial Purchaser, shall comply with such laws and shall continue such
qualifications, registrations and exemptions in effect so long as reasonably
required for the distribution of the Securities. Neither the Authority nor any
of the Guarantors shall be required to qualify as a foreign corporation or to
take any action that would subject it to general service of process in any such
jurisdiction where it is not presently qualified or where it would be subject to
taxation as a foreign corporation. The Authority will advise the Initial
Purchaser promptly of the suspension of the qualification or registration of (or
any such exemption relating to) the Securities for offering, sale or trading in
any jurisdiction or any initiation or threat of any proceeding for any such
purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, each of the Authority and the
Guarantors shall use its best efforts to obtain the withdrawal thereof at the
earliest possible moment.

      (f) Use of Proceeds. The Authority shall apply the net proceeds from the
sale of the Securities sold by it in the manner described under the caption "Use
of Proceeds" in the Pricing Disclosure Package, except as otherwise permitted by
the Collateral and Disbursement Agreement.

      (g) The Depositary. The Authority will cooperate with the Initial
Purchaser and use its best efforts to permit the Securities to be eligible for
clearance and settlement through the facilities of the Depositary.

      (h) Agreement Not To Offer or Sell Additional Securities. During the
period of 180 days following the date hereof, the Authority will not, without
the prior written consent of Banc of America Securities LLC (which consent may
be withheld at the sole discretion of Banc of America Securities LLC), directly
or indirectly, sell, offer, contract or grant any option to sell, pledge,
transfer or establish an open "put equivalent position" within the meaning of
Rule 16a-1

                                      -20-
<PAGE>

under the Exchange Act, or otherwise dispose of or transfer, or announce the
offering of, or file any registration statement under the Securities Act in
respect of, any debt securities of the Authority or securities exchangeable for
or convertible into debt securities of the Authority (other than as contemplated
by this Agreement).

      (i) Future Reports to the Initial Purchaser. At any time when any
Securities remain outstanding, the Authority will furnish to Banc of America
Securities LLC: (i) as soon as practicable after the end of each fiscal year,
copies of the balance sheet of the Authority as of the close of such fiscal year
and statements of income, stockholders' equity and cash flows for the year then
ended and the opinion thereon of the Authority's independent public or certified
public accountants; and (ii) as soon as available, copies of any report or
communication of the Authority mailed generally to holders of its debt
securities (including the holders of the Securities).

      (j) No Integration. The Authority agrees that it will not and will cause
its Affiliates not to make any offer or sale of securities of the Authority of
any class if, as a result of the doctrine of "integration" referred to in Rule
502 under the Securities Act, such offer or sale would render invalid (for the
purpose of the sale of the Securities by the Authority to the Initial Purchaser)
the exemption from the registration requirements of the Securities Act provided
by Section 4(2) thereof.

      (k) No Restricted Resales. During the period of two years after the
Closing Date, the Authority will not, and will not permit any of its affiliates
(as defined in Rule 144 under the Securities Act) to resell any of the Notes
which constitute "restricted securities" under Rule 144 that have been
reacquired by any of them.

      (l) Legended Securities. Each certificate for a Note will bear the legend
contained in "Notice to Investors" in the Preliminary Offering Memorandum for
the time period and upon the other terms stated in the Preliminary Offering
Memorandum.

      (m) PORTAL. The Authority will use its best efforts to cause such Notes to
be eligible for the PORTAL Market.

      (n) Banc of America Securities LLC may, in its sole discretion, waive in
writing the performance by the Authority, the Manager or any Guarantor of any
one or more of the foregoing covenants or extend the time for their performance.

      SECTION 4. Payment of Expenses. Each of the Authority and the Guarantors
agrees to pay all costs, fees and expenses incurred in connection with the
performance of its obligations hereunder and in connection with the transactions
contemplated hereby, including, without limitation, (i) all expenses incident to
the issuance and delivery of the Securities (including all printing and
engraving costs), (ii) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Securities to the Initial
Purchaser, (iii) all fees and expenses of the Authority's and the Guarantors'
counsel, independent public or certified public accountants and other advisors,
(iv) any and all reasonable fees and expenses of the Initial Purchaser's counsel
(White & Case LLP and Latham & Watkins LLP) and Indian counsel that

                                      -21-
<PAGE>

exceed the lesser of (x) 60% of such fees and expenses and (y) $600,000, (v) all
costs and expenses incurred in connection with the preparation, printing,
filing, shipping and distribution of the Pricing Disclosure Package and the
Final Offering Memorandum (including financial statements and exhibits), and all
amendments and supplements thereto, and the Transaction Documents, (vi) all
filing fees, attorneys' fees and expenses incurred by the Authority, the
Guarantors or the Initial Purchaser in connection with qualifying (or obtaining
exemptions from the qualification of) all or any part of the Securities for
offer and sale under the securities laws of the several states of the United
States, the provinces of Canada or other jurisdictions designated by the Initial
Purchaser (including, without limitation, the cost of preparing, printing and
mailing preliminary and final blue sky or legal investment memoranda and any
related supplements to the Pricing Disclosure Package or the Final Offering
Memorandum), (vii) the fees and expenses of the Trustee, Collateral Agent and
Disbursement Agent, including the fees and disbursements of counsel for the
Trustee in connection with all of the Transaction Documents, (viii) the
reasonable fees and expenses of the Independent Construction Consultant, (ix)
any fees payable in connection with the rating of the Securities with the
ratings agencies and the listing of the Securities with the PORTAL Market, (x)
any filing fees incident to, and any reasonable fees and disbursements of
counsel to the Initial Purchaser in connection with the review by the NASD, if
any, of the terms of the sale of the Securities and (xi) all fees and expenses
(including reasonable fees and expenses of counsel) of the Authority and the
Guarantors in connection with approval of the Securities by the Depositary for
"book-entry" transfer, and the performance by the Authority and the Guarantors
of their respective other obligations under this Agreement. Except as provided
in this Section 4 and Sections 6, 8 and 9 hereof, the Initial Purchaser shall
pay its own expenses and all expenses incident to the "road show" for the
offering of the Securities, including the cost of any chartered airplane or
other transportation.

      SECTION 5. Conditions of the Obligations of the Initial Purchaser. The
obligations of the Initial Purchaser to purchase and pay for the Securities as
provided herein on the Closing Date shall be subject to the accuracy of the
representations and warranties on the part of the Authority, the Manager and the
Guarantors set forth in Section 1 hereof as of the date hereof and as of the
Closing Date as though then made and to the timely performance by the Authority,
the Guarantors and the Manager of their covenants and other obligations
hereunder, and to each of the following additional conditions:

      (a) Pokagon Parties Representations. All of the representations and
warranties of the Pokagon Parties shall be true and correct on the date hereof
and on the Closing Date with the same force and effect as if made on and as of
the date hereof and the Closing Date, respectively. The Pokagon Parties shall
have performed or complied with all of the agreements and covenants herein
contained and required to be performed or complied with by each of them at or
prior to the Closing Date.

      (b) Manager Representations. All of the representations and warranties of
the Manager shall be true and correct on the date hereof and on the Closing Date
with the same force and effect as if made on and as of the date hereof and the
Closing Date, respectively. The Manager shall have performed or complied with
all of the agreements and covenants herein contained and required to be
performed or complied with by each of them at or prior to the Closing Date.

                                      -22-
<PAGE>

      (c)   Offering Memorandum. The Final Offering Memorandum shall have been
printed and copies distributed to the Initial Purchaser not later than 10:00
a.m., New York City time, on the second day following the date of this Agreement
or at such later date and time as to which the Initial Purchaser may agree.

      (d)   No Action. No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, prevent the issuance of
the Notes; no action, suit or proceeding shall have been commenced and be
pending against or affecting or, to the knowledge of the Tribe, the Authority or
the Manager, threatened against the Tribe, Authority or the Manager before any
court or arbitrator or any governmental body, agency or official that if
adversely decided would reasonably be expected to have a Pokagon Parties
Material Adverse Change or a Manager Material Adverse Change, respectively.

      (e)   Accountants' Comfort Letter. On the date hereof, the Initial
Purchaser shall have received from McGladrey & Pullen LLP, independent public or
certified public accountants for the Authority, a "comfort letter" dated the
date hereof addressed to the Initial Purchaser, in form and substance
satisfactory to the Initial Purchaser, covering the financial information in the
Preliminary Offering Memorandum and any Pricing Supplement and other customary
matters. In addition, on the Closing Date, the Initial Purchaser shall have
received from such accountants, a "bring-down comfort letter" dated the Closing
Date addressed to the Initial Purchaser, in form and substance satisfactory to
the Initial Purchaser, in the form of the "comfort letter" delivered on the date
hereof, except that (i) it shall cover the financial information in the Final
Offering Memorandum and any amendment or supplement thereto and (ii) procedures
shall be brought down to a date no more than 5 days prior to the Closing Date.

      (f)   No Material Adverse Change or Ratings Agency Change. For the period
from and after the date of this Agreement and prior to the Closing Date:

            (i) in the judgment of the Initial Purchaser there shall not have
      occurred any Pokagon Parties Material Adverse Change or a Manager Material
      Adverse Change; and

            (ii) there shall not have occurred any downgrading, nor shall any
      notice have been given of any intended or potential downgrading or of any
      review for a possible change that does not indicate the direction of the
      possible change, in the rating accorded any securities or indebtedness of
      the Authority or any of its subsidiaries by any "nationally recognized
      statistical rating organization" as such term is defined for purposes of
      Rule 436 under the Securities Act.

      (g)   Opinion of Counsel for the Pokagon Parties. On the Closing Date, the
Initial Purchaser shall have received the favorable opinion of Faegre & Benson
LLP, counsel for the Tribe, the Authority and the Guarantor dated as of such
Closing Date, the form of which is attached as Exhibit A-1.

      (h)   Opinion of Michigan Counsel for the Authority and the Tribe. On the
Closing Date, the Initial Purchaser shall have received the favorable opinion of
Varnum Riddering

                                      -23-
<PAGE>

Schmidt & Howlett LLP, Michigan counsel for the Authority, dated as of such
Closing Date, the form of which is attached as Exhibit A-2.

      (i)   Opinion of Indiana Counsel for the Authority and the Tribe. On the
Closing Date, the Initial Purchaser shall have received the favorable opinion of
Varnum Riddering Schmidt & Howlett LLP, Indiana counsel for the Authority, dated
as of such Closing Date, the form of which is attached as Exhibit A-3.

      (j)   Opinion of Counsel for the Manager. On the Closing Date, the Initial
Purchaser shall have received the favorable opinion of Gray, Plant, Mooty, Mooty
& Bennett, Minnesota counsel for the Manager, dated as of such Closing Date, the
form of which is attached as Exhibit A-4.

      (k)   Opinion of Special Counsel for the Manager. On the Closing Date, the
Initial Purchaser shall have received the favorable opinion of Hamilton Quigley
& Twait, PLC, special counsel for the Manager, dated as of such Closing Date,
the form of which is attached as Exhibit A-5

      (l)   Opinion of New York Counsel for the Manager. On the Closing Date,
the Initial Purchaser shall have received the favorable opinion of Duane Morris
LLP, New York counsel for the Manager, dated as of such Closing Date, the form
of which is attached as Exhibit A-6 .

      (m)   Opinion of Counsel for the Initial Purchaser. On the Closing Date,
the Initial Purchaser shall have received the favorable opinion of White & Case
LLP, counsel for the Initial Purchaser, dated as of such Closing Date, with
respect to such matters as may be reasonably requested by the Initial Purchaser.

      (n)   Officers' Certificates. On the Closing Date, the Initial Purchaser
shall have received:

            (i) a written certificate executed by the Chairperson or President,
      or the holder of an equivalent office, of the Tribe, the Authority and
      each Guarantor and the Chief Financial Officer or Treasurer, or the holder
      of an equivalent office, of the Tribe, the Authority and each Guarantor,
      dated as of the Closing Date, to the effect set forth in Section 5(n)(ii)
      hereof, and further to the effect that:

            (a) for the period from and after the date of this Agreement and
      prior to the Closing Date there has not occurred any Pokagon Parties
      Material Adverse Change;

            (b) the representations, warranties and covenants of the Tribe, the
      Authority and each Guarantor set forth in Section 1 hereof were true and
      correct as of the Time of Execution and are true and correct as of the
      Closing Date with the same force and effect as though expressly made on
      and as of the Closing Date; and

            (c) the Tribe, the Authority and each Guarantor has complied with
      all the respective agreements and satisfied all the conditions on its part
      to be performed or satisfied at or prior to the Closing Date.

                                      -24-
<PAGE>

      (o)   Officers' Certificates. On the Closing Date, the Initial Purchaser
shall have received:

            (i) a written certificate executed by the President and the Chief
      Financial Officer of the Manager, dated as of the Closing Date, to the
      effect set forth in Section 5(k)(ii) hereof, and further to the effect
      that:

            (a) for the period from and after the date of this Agreement and
      prior to the Closing Date there has not occurred any Manager Material
      Adverse Change;

            (b) the representations, warranties and covenants of the Manager set
      forth in Section 1 hereof were true and correct as of the Time of
      Execution and are true and correct as of the Closing Date with the same
      force and effect as though expressly made on and as of the Closing Date;
      and

            (c) the Manager has complied with all the agreements and satisfied
      all the conditions on its part to be performed or satisfied at or prior to
      the Closing Date.

      (p)   PORTAL Listing. At the Closing Date, the Notes shall have been
designated for trading on the PORTAL Market.

      (q)   Other Financings. On or before the Closing Date, each of the Lakes
Gaming Notes and the Lakes Non-Gaming Notes (as described in the Offering
Memorandum) shall be funded in the amounts to be funded upon the consummation of
the offering of the Notes as set forth in "Sources and Uses" in the Offering
Memorandum. The FF&E Documents shall have been executed.

      (r)   Documents and Agreements. With respect to any Transaction Document
to be executed on the Closing Date, the Authority and each of the other parties
thereto shall have entered into each such Transaction Document to which each is
a party. With respect to any Material Agreement entered into prior to the
Closing Date, such Material Agreement shall be in full force and effect, and as
of the date hereof, except as otherwise disclosed in the Offering Memorandum,
there shall not be any defaults or events of default, what with notice, the
passage of time or otherwise could be a default, under any provisions of such
Material Agreements by any party hereto. The Initial Purchaser shall have
received executed copies of each Transaction Document and Material Agreement.

      (s)   Approval. The Authority shall have received all governmental and
regulatory approval required to be obtained prior to the Closing Date pursuant
to the Transaction Documents.

      (t)   Disputes. There shall be no significant or material disputes between
the Manager, the Tribe, the Authority, on the one hand, and
Christman/Krauss-Anderson, on the other hand, with respect to or arising out of
the Construction Agreement.

                                      -25-
<PAGE>

      (u)   Authority UCC-1. The Trustee shall have received executed copies of
each UCC-1 financing statement authorized by the Authority naming the Trustee as
secured party and filed in such jurisdictions as the Initial Purchaser may
reasonably require.

      (v)   Authority Security. All documents and agreements shall have been
filed, and other actions shall have been taken, as may be required to perfect
the security interests of the Trustee and to accord the Trustee the priorities
over other creditors of the Authority as contemplated by the Offering Memorandum
and Transaction Documents. All consents to assignment of documents and
agreements required by the Transaction Documents shall have been executed by the
third parties named therein.

      (w)   Proof of Insurance. On the Closing Date, the Initial Purchaser shall
have received proof of insurance of the Authority that satisfies the insurance
covenant in the Indenture.

      (x)   Additional Documents. On or before the Closing Date, the Initial
Purchaser and counsel for the Initial Purchaser shall have received such
information, documents and opinions as they may reasonably require for the
purposes of enabling them to pass upon the issuance and sale of the Securities
as contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or
agreements, herein contained.

      If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the Initial
Purchaser by notice to the Authority and the Manager at any time on or prior to
the Closing Date, which termination shall be without liability on the part of
any party to any other party, except that Sections 4, 6, 8 and 9 hereof shall at
all times be effective and shall survive such termination.

      SECTION 6. Reimbursement of Initial Purchaser' Expenses.

      (a)   Pokagon Parties. If this Agreement is terminated by the Initial
Purchaser pursuant to Section 5 or 10 hereof, unless the sale to the Initial
Purchaser of the Securities on the Closing Date is not consummated because of
any refusal, inability or failure on the part of the Manager to perform any
agreement herein or to comply with any provision hereof, each of the Pokagon
Parties agrees to reimburse the Initial Purchaser upon demand for all
out-of-pocket expenses that shall have been reasonably incurred by the Initial
Purchaser in connection with the proposed purchase and the offering and sale of
the Securities, including, without limitation, fees and disbursements of
counsel, printing expenses, travel expenses, postage, facsimile and telephone
charges.

      (b)   Manager. If this Agreement is terminated by the Initial Purchaser
pursuant to Section 5 or 10 hereof because of any refusal, inability or failure
on the part of the Manager to perform any agreement herein or to comply with any
provision hereof, the Manager agrees to reimburse the Initial Purchaser upon
demand for all out-of-pocket expenses that shall have been reasonably incurred
by the Initial Purchaser in connection with the proposed purchase and the
offering and sale of the Securities, including, without limitation, fees and
disbursements of counsel, printing expenses, travel expenses, postage, facsimile
and telephone charges.

                                      -26-
<PAGE>

      SECTION 7. Offer, Sale and Resale Procedures. Each of the Initial
Purchaser, the Pokagon Parties and the Manager hereby agree to observe the
following procedures in connection with the offer and sale of the Securities:

            (A) Offers and sales of the Securities will be made only by the
      Initial Purchaser or Affiliates thereof qualified to do so in the
      jurisdictions in which such offers or sales are made. Each such offer or
      sale shall only be made to persons whom the offeror or seller reasonably
      believes to be (i) Qualified Institutional Buyers to whom notice is given
      that the offeror or seller is relying upon the exemption from Section 5 of
      the Securities Act provided by Rule 144A under the Securities Act or (ii)
      non-U.S. persons outside the United States to whom the offeror or seller
      reasonably believes offers and sales of the Securities may be made in
      reliance upon Regulation S upon the terms and conditions set forth in
      Annex I hereto, which Annex I is hereby expressly made a part hereof.

            (B) The Securities will be offered by approaching prospective
      Subsequent Purchasers on an individual basis. No general solicitation or
      general advertising (within the meaning of Rule 502 under the Securities
      Act) will be used in the United States in connection with the offering of
      the Securities.

            (C) Upon original issuance by the Authority, and until such time as
      the same is no longer required under the applicable requirements of the
      Securities Act, the Notes (and all securities issued in exchange therefor
      or in substitution thereof) shall bear the following legend:

"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.

THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY ONLY (A) TO THE ISSUER OR ANY AFFILIATE
THEREOF, (B) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A, IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (C) IN AN OFFSHORE TRANSACTION (AS DEFINED
IN REGULATION S UNDER THE SECURITIES ACT) IN ACCORDANCE WITH THE REGULATION S
UNDER THE SECURITIES ACT, (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE RIGHTS OF THE ISSUER AND THE WITHIN MENTIONED TRUSTEE PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (E) TO REQUIRE THE DELIVERY
OF AN OPINION OF

                                      -27-
<PAGE>

COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM,
AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE REVERSE SIDE OF THIS SECURITY COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE."

      Following the sale of the Securities by the Initial Purchaser to
Subsequent Purchasers pursuant to the terms hereof, the Initial Purchaser shall
not be liable or responsible to the Authority for any losses, damages or
liabilities suffered or incurred by the Authority, including any losses, damages
or liabilities under the Securities Act, arising from or relating to any resale
or transfer of any Security.

      SECTION 8. Indemnification.

      (a) Indemnification of the Initial Purchaser by the Authority and the
Guarantors. Each of the Authority and the Guarantors, jointly and severally,
agrees to indemnify and hold harmless the Initial Purchaser, its directors,
officers and employees, and each person, if any, who controls the Initial
Purchaser within the meaning of the Securities Act and the Exchange Act against
any loss, claim, damage, liability or expense, as incurred, to which the Initial
Purchaser, director, officer, employee or controlling person may become subject,
under the Securities Act, the Exchange Act or other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Authority), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Pricing Disclosure Package or the Final Offering Memorandum (or any
amendment or supplement thereto), or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading and to
reimburse the Initial Purchaser and each such director, officer, employee or
controlling person for any and all expenses (including the fees and
disbursements of counsel chosen by Banc of America Securities LLC) as such
expenses are reasonably incurred by the Initial Purchaser or such director,
officer, employee or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the foregoing indemnity
agreement shall not apply to any loss, claim, damage, liability or expense to
the extent, but only to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Authority by the Initial Purchaser expressly for use in the Pricing Disclosure
Package or the Final Offering Memorandum (or any amendment or supplement
thereto). The indemnity agreement set forth in this Section 8(a) shall be in
addition to any liabilities that the Authority may otherwise have.

      (b) Indemnification of the Initial Purchaser and the Pokagon Parties by
the Manager. The Manager agrees to indemnify and hold harmless each of the
Initial Purchaser and the Pokagon Parties, their directors, officers and
employees, and each person, if any, who controls each of the Initial Purchaser
and the Pokagon Parties within the meaning of the Securities Act and the
Exchange Act against any loss, claim, damage, liability or expense, as incurred,
to which such Initial Purchaser or Pokagon Party, director, officer, employee or

                                      -28-
<PAGE>

controlling person may become subject, under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Manager), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in the Pricing Disclosure Package or the
Final Offering Memorandum (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading and to reimburse each of the Initial Purchaser and
Pokagon Party and each such director, officer, employee or controlling person
for any and all expenses (including the reasonable fees and disbursements of
counsel chosen by Banc of America Securities LLC and such Pokagon Party) as such
expenses are reasonably incurred by the Initial Purchaser or Pokagon Party or
such director, officer, employee or controlling person, upon receipt of
reasonable documentation evidencing such expenses, in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action; provided, however, that the foregoing
indemnity agreement shall not apply to any loss, claim, damage, liability or
expense to the extent, but only to the extent, arising out of or based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with written information furnished to
the Authority by the Initial Purchaser expressly for use in the Pricing
Disclosure Package or the Final Offering Memorandum (or any amendment or
supplement thereto). The indemnity agreement set forth in this Section 8(b)
shall be in addition to any liabilities that the Manager may otherwise have.

      (c) Indemnification of the Authority, the Manager, the Tribal Council
Members and the Guarantors. The Initial Purchaser agrees to indemnify and hold
harmless the Authority, the Manager, the Tribal Council Members and each
Guarantor, each of their respective directors, officers, employees and each
person, if any, who controls the Authority, the Manager, the Tribal Council
Members or any Guarantor within the meaning of the Securities Act or the
Exchange Act, against any loss, claim, damage, liability or expense, as
incurred, to which the Authority, the Manager, the Tribal Council Members, any
Guarantor or any such director, officer, employee or controlling person may
become subject, under the Securities Act, the Exchange Act, or other federal or
state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Initial Purchaser), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based upon any untrue statement or alleged untrue statement
of a material fact contained in the Pricing Disclosure Package or the Final
Offering Memorandum (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Pricing Disclosure Package or the Final Offering
Memorandum (or any amendment or supplement thereto), in reliance upon and in
conformity with written information furnished to the Authority by the Initial
Purchaser expressly for use therein; and to reimburse the Authority, the
Manager, the Tribal Council Members and/or the Guarantors, as applicable, and
each such director, officer, employee or controlling person for any and all

                                      -29-
<PAGE>

expenses (including the fees and disbursements of counsel chosen by such party)
as such expenses are reasonably incurred by each such party or such director,
officer, employee or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action. Each of the Authority, the Manager, the Tribal
Council Members and the Guarantors hereby acknowledges that the only information
that the Initial Purchaser has furnished to the Authority expressly for use in
the Pricing Disclosure Package or the Final Offering Memorandum (or any
amendment or supplement thereto) are the statements set forth in the eighth and
last paragraphs under the caption "Plan of Distribution" in the Preliminary
Offering Memorandum and the Final Offering Memorandum. The indemnity agreement
set forth in this Section 8(c) shall be in addition to any liabilities that the
Initial Purchaser may otherwise have.

      (d) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party's election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with local counsel), approved by the
indemnifying party, representing the indemnified parties who are parties to such
action) or (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action, in each of which
cases the fees and expenses of counsel shall be at the expense of the
indemnifying party.

                                      -30-
<PAGE>

      (e) Settlements. The indemnifying party under this Section 8 shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by this
Section 8, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request or disputed in
good faith the indemnified party's entitlement to such reimbursement prior to
the date of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement, compromise or
consent to the entry of judgment in any pending or threatened action, suit or
proceeding in respect of which any indemnified party is or could have been a
party and indemnity was or could have been sought hereunder by such indemnified
party, unless such settlement, compromise or consent (i) includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding and (ii) does not
include any statements as to or any findings of fault, culpability or failure to
act by or on behalf of any indemnified party.

      SECTION 9. Contribution. If the indemnification provided for in Section 8
hereof is for any reason held to be unavailable to or otherwise insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by each of (A) the Pokagon Parties, (B) the Manager
and (C) the Initial Purchaser from the offering of the Securities pursuant to
this Agreement or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of each of (A) the Pokagon Parties, (B) the Manager and (C) the Initial
Purchaser in connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by each of (A) the Pokagon
Parties, (B) the Manager and (C) the Initial Purchaser in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement (before deducting expenses) received
by the Authority, and the total discount received by the Initial Purchaser bear
to the aggregate initial offering price of the Securities. The relative fault of
each of (A) the Pokagon Parties, (B) the Manager and (C) the Initial Purchaser
shall be determined by reference to, among other things, whether any such untrue
or alleged untrue statement of a material fact or omission or alleged omission
to state a material fact or any such inaccurate or alleged inaccurate
representation or warranty relates to information supplied by each of (A) the
Pokagon Parties, (B) the Manager and (C) the Initial Purchaser and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission or inaccuracy.

                                      -31-
<PAGE>

      The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8 hereof, any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8 hereof with respect to notice of commencement of any action shall
apply if a claim for contribution is to be made under this Section 9; provided,
however, that no additional notice shall be required with respect to any action
for which notice has been given under Section 8 hereof for purposes of
indemnification.

      The Authority, the Manager, the Guarantors and the Initial Purchaser agree
that it would not be just and equitable if contribution pursuant to this Section
9 were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in this
Section 9.

      Notwithstanding the provisions of this Section 9, the Initial Purchaser
shall be required to contribute any amount in excess of the discount received by
the Initial Purchaser in connection with the Securities distributed by it. No
person guilty of fraudulent misrepresentation (within the meaning of Section 11
of the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section 9,
each director, officer and employee of the Initial Purchaser and each person, if
any, who controls the Initial Purchaser within the meaning of the Securities Act
and the Exchange Act shall have the same rights to contribution as the Initial
Purchaser, and each director, officer, employee or holder of an equivalent
office, of the Authority, the Manager or any Guarantor, and each Tribal Council
Member and each person, if any, who controls the Authority, the Manager or any
Guarantor with the meaning of the Securities Act and the Exchange Act shall have
the same rights to contribution as the Authority, the Manager and the
Guarantors.

      SECTION 10. Termination of this Agreement. Prior to the Closing Date, this
Agreement may be terminated by the Initial Purchaser by notice given to the
Authority or the Manager if at any time: (i) trading in securities generally on
either the Nasdaq Stock Market or the New York Stock Exchange shall have been
suspended or limited, or minimum or maximum prices shall have been generally
established on any of such quotation system or stock exchange by the Commission
or the NASD, (ii) a general banking moratorium shall have been declared by any
of federal, New York or Michigan authorities; (iii) there shall have occurred
any outbreak or escalation of national or international hostilities or any
crisis or calamity, or any change in the United States or international
financial markets, or any substantial change or development involving a
prospective substantial change in United States' or international political,
financial or economic conditions, as in the judgment of the Initial Purchaser is
material and adverse and makes it impracticable or inadvisable to proceed with
the offering sale or delivery of the Securities in the manner and on the terms
described in the Pricing Disclosure Package or to enforce contracts for the sale
of securities; (iv) in the judgment of the Initial Purchaser there shall have
occurred any Pokagon Parties Material Adverse Change or Manager Material Adverse
Change; or (v) the Authority shall have sustained a loss by strike, fire, flood,
earthquake, accident or other calamity of such character as in the judgment of
the Initial Purchaser may interfere materially with the conduct of the business
and operations of the Authority regardless of whether or not such loss shall
have been insured. Any termination pursuant to this Section 10

                                      -32-
<PAGE>

shall be without liability on the part of (i) the Authority, the Manager or any
Guarantor to any Initial Purchaser, except that the Authority, the Manager and
the Guarantors shall be obligated to reimburse the expenses of the Initial
Purchaser pursuant to Sections 4 and 6 hereof, (ii) the Initial Purchaser to the
Authority and the Manager, or (iii) any party hereto to any other party except
that the provisions of Sections 8 and 9 hereof shall at all times be effective
and shall survive such termination.

      SECTION 11. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Authority, the Manager, the Guarantors, their respective
officers and the Initial Purchaser set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of any Initial Purchaser, the Authority, the Manager, any
Guarantor or any of their partners, officers or directors or any controlling
person, as the case may be, and will survive delivery of and payment for the
Securities sold hereunder and any termination of this Agreement.

      SECTION 12. Notices. All communications hereunder shall be in writing and
shall be mailed, hand delivered, couriered or facsimiled and confirmed to the
parties hereto as follows:

      If to the Initial Purchaser:

            Banc of America Securities LLC
            9 West 57th Street
            New York, New York 10019
            Attention: High Yield Capital Markets

      with a copy to:

            White & Case LLP
            1155 Avenue of the Americas
            New York, New York 10036
            of counsel for the Initial Purchaser
            Facsimile: 212-354-8113
            Attention: Gary Kashar

      If to the Tribe, the Authority or the Guarantors:

            Pokagon Band of Potawatomi Indians
            58620 Sink Road
            Dowagiac, Michigan 49047
            Phone: 269-782-6323
            Attention: Tribal Council Chairperson

      and:

                                      -33-
<PAGE>

            Pokagon Gaming Authority
            11111 Wilson Road
            New Buffalo, Michigan 49117
            Phone: 269-782-6323
            Attention: President and Chief Executive Officer

      with a copy to:

            General Counsel
            Pokagon Band of Potawatomi Indians
            P.O. Box 180
            Dowagiac, Michigan 49047
            Facsimile: 269-782-7988

      with a copy to:

            Drummond Woodsum & MacMahon
            P.O. Box 9781
            Portland, Maine 04104
            Facsimile: 207-772-3627
            Attention: Robert Gips

      with a copy to:

            Faegre & Benson LLP
            2200 Wells Fargo Center
            90 South Seventh Street
            Minneapolis, Minnesota 55402
            Facsimile: 612-766-1600
            Attention: Kent Richey

      If to the Manager:

            Great Lakes Gaming of Michigan, LLC
            Lakes Entertainment, Inc.
            130 Cheshire Lane
            Minnetonka, Minnesota 55305
            Facsimile: 952-449-9353
            Attention: Timothy J. Cope

      with a copy to:

            Lakes Entertainment, Inc.
            130 Cheshire Lane

                                      -34-
<PAGE>

            Minnetonka, Minnesota  55305
            Facsimile: 952-449-9353
            Attention: Damon Schramm

      with a copy to:

            Hamilton Quigley & Twait, PLC
            First National Bank Building, Suite W1450
            332 Minesota Street
            Saint Paul, Minnesota 55101
            Facsimile: 651-602-9976
            Attention: Kevin Quigley, Esq.

      with a copy to:

            Gray Plant Mooty
            80 South 8th Street
            500 I.D.S. Center
            Minneapolis, Minnesota 55402
            Facsimile: 612-632-4050
            Attention: Daniel R. Tenenbaum, Esq.

      Any party hereto may change the address or facsimile number for receipt of
communications by giving written notice to the others.

      SECTION 13. Successors: No Third-Party Beneficiaries. This Agreement will
inure to the benefit of and be binding upon the parties hereto and to the
benefit of the indemnified parties referred to in Sections 8 and 9 hereof, and
in each case their respective successors, and no other person will have any
right or obligation hereunder. The term "successors" shall not include any
Subsequent Purchaser or other purchaser of the Securities as such from the
Initial Purchaser merely by reason of such purchase. Except as set forth above,
no person (including, without limitation, the Subsequent Purchasers) shall be
deemed to be a third-party beneficiary to this Agreement or to have any rights
hereunder whatsoever.

      SECTION 14. Partial Unenforceability. The invalidity or unenforceability
of any section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other section, paragraph or provision hereof.
If any section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.

      SECTION 15. Governing Law Provisions. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed in such state without regard
to conflicts of law principles thereof (other than Section 5-1401 of the New
York General Obligations Law).

                                      -35-
<PAGE>

      SECTION 16. Sovereign Immunity Waiver

      (a)   Waiver of Sovereign Immunity. None of the Authority, Guarantors or
the Tribe consents to any suit, arbitration, legal process, enforcement
proceeding or any dispute resolution method, except that each Pokagon Party
expressly and irrevocably waives each of its respective sovereign immunity (and
any defense based thereon) from unconsented suit, arbitration or other legal
proceedings as authorized herein, provided that:

            (i) the waiver is expressly limited to actions brought against a
      Pokagon Party in compliance with this Agreement by persons expressly
      stated to benefit from this Agreement;

            (ii) the action is commenced within three years after the occurrence
      of the facts that are the primary basis of the action, or if later, three
      years from the date those facts reasonably should have been discovered by
      the party bringing the action;

            (iii) the action is only to (A) interpret or enforce the provisions
      of this Agreement, (ii) enforce and execute any order, judgment or ruling
      resulting from such an action or arbitration award, or (iii) enforce any
      rights under the Indian Civil Rights Act, 28 U.S.C. Section 1301 et seq.;

            (iv) the action does not include a claim for punitive or
      consequential damages or any claim arising under federal or state
      securities laws; and

            (v) any order, judgment, ruling or other remedies related to an
      action shall be enforceable only as against those assets identified in the
      "Limited Recourse" provision of the Indenture.

      (b)   Jurisdiction. Subject to the foregoing limitations on each Pokagon
Party's waiver of sovereign immunity, each Pokagon Party, the Initial Purchaser
and the Manager agree to irrevocably and unconditionally submit, for itself and
its property, to the exclusive jurisdiction of the United States District Court,
Southern District of New York, and any appellate court from which any appeals
therefrom are available ("Federal Courts"), or if those courts lack jurisdiction
over the action, then the courts of the State of New York sitting in the City of
New York, County of New York, and any appellate court from which any appeals
therefrom are available ("New York State Courts"), or in the event that the
Federal Courts or the New York State Courts lack or decline jurisdiction, then
the courts of the State of Michigan and any appellate court from which any
appeals therefrom are available ("Michigan State Courts"), or in the event that
any of the foregoing courts lack or decline jurisdiction, then the tribal courts
of the Tribe, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each Pokagon
Party, the Initial Purchaser and the Manager irrevocably and unconditionally
agree that all claims in respect of any such action or proceeding may be heard
and determined in such court. Each of the parties to this Agreement have agreed
that a final judgment in any such action or proceeding may be enforced by any
court of competent jurisdiction.

                                      -36-
<PAGE>

      (c) Waiver of Exhaustion of Tribal Remedies. Each Pokagon Party expressly
waives, to the fullest extent it may legally and effectively do so, any right
either may otherwise have to require any suit, arbitration, legal process or
enforcement proceeding be considered or heard first in any tribal court of the
Tribe, now or hereafter existing, whether because of the doctrine of exhaustion
of tribal remedies or as a matter of comity or abstention.

      (d) Venue. Each of the parties to this Agreement hereby irrevocably and
unconditionally waive, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any Federal Court, New York State Court or Michigan State Courts. Each of the
parties to this Agreement agree to irrevocably waive, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.

      (e) Service of Process. Each of the parties to this Agreement hereby
irrevocably consent to service of process in the manner provided for notices in
Section 12 hereof. Nothing in this Agreement will affect the right of any party
hereto to serve process in any other manner permitted by law.

      (f) Final Judgment. For the purposes of this Agreement, each of the
parties hereto agrees that a final judgment in any such suit, action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.

      (g) No Limit on Ability to Compel Arbitration. Notwithstanding any of this
Section 16, nothing in this Agreement limits the ability of any party hereto to
move to compel arbitration or move to stay or dismiss a lawsuit in favor of
arbitration, and each Pokagon Party's waiver of sovereign immunity expressly
extends to such actions.

      SECTION 17. Arbitration. Notwithstanding the irrevocable submission to the
jurisdiction of the courts described above by each of the parties hereto, each
such party irrevocably and unconditionally agrees that any party to any such
instrument may (i) submit any controversy, claim, suit or other action between
or among the parties thereto arising out of or relating to this Agreement, or
the enforcement of rights hereunder, to binding arbitration or (ii) remove any
such action brought by any other party in any forum other than an arbitration
contemplated hereby and submit such action to be determined by binding
arbitration. Any arbitration shall be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association ("AAA").
Any controversy concerning whether an issue is arbitrable shall be determined by
the arbitrators in accordance with the AAA Commercial Arbitration Rules.
Judgment upon the arbitration award may be entered in any court having
jurisdiction. The institution and maintenance of an action for judicial relief
or pursuit of a provisional or ancillary remedy will not constitute a waiver of
the right of any party hereto to submit the controversy or claim to arbitration
if any other party contests such action for judicial relief. Any arbitration
undertaken pursuant this Agreement will take place in the City of New York,
County of New York.

                                      -37-
<PAGE>

      SECTION 18. No Advisory or Fiduciary Responsibility. The Authority
acknowledges and agrees that in connection with all aspects of each transaction
contemplated by this Agreement the Authority and the Initial Purchaser have an
arm's length business relationship that creates no fiduciary duty on the part of
the Initial Purchaser and each expressly disclaims any fiduciary relationship.

      SECTION 19. General Provisions. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The section headings herein are for the convenience of the parties only and
shall not affect the construction or interpretation of this Agreement.

                                      -38-
<PAGE>

      If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Authority the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.

                                Very truly yours,

                                POKAGON BAND OF POTAWATOMI INDIANS

                                By: /s/ John Miller
                                    --------------------------------------------
                                    Name: John Miller
                                    Title: Chairperson

                                POKAGON GAMING AUTHORITY,
                                as Issuer

                                By: /s/ John Miller
                                    --------------------------------------------
                                    Name: John Miller
                                    Title: President and Chief Executive Officer

                                POKAGON PROPERTIES, LLC and
                                FILBERT LAND DEVELOPMENT, LLC,
                                as Guarantors

                                By: Pokagon Gaming Authority,
                                      Sole Member

                                By: /s/ John Miller
                                    --------------------------------------------
                                    Name: John Miller
                                    Title: President and Chief Executive Officer

                                GREAT LAKES GAMING OF MICHIGAN, LLC,
                                as Manager

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

                                      -39-
<PAGE>

      The foregoing Purchase Agreement is hereby confirmed and accepted by the
Initial Purchaser as of the date first above written.

BANC OF AMERICA SECURITIES LLC

By: /s/ R. Sean Snipes
    --------------------------------
    Name:  R. Sean Snipes
    Title: Managing Director

                                      -40-

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