Document:

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                                                                   EXHIBIT 10(d)

                       REDUCING REVOLVING LINE OF CREDIT
                                 LOAN AGREEMENT

         THIS REDUCING REVOLVING LINE OF CREDIT LOAN AGREEMENT (the "Agreement")
is made effective as of the 31st day of May, 2002 by and between THE SANDS
REGENT, a Nevada corporation, ZANTE, INC., a Nevada corporation, and LAST
CHANCE, INC., a Nevada corporation (collectively, the "Borrower"), and NEVADA
STATE BANK ("Lender").

                              W I T N E S S E T H:

         WHEREAS, the entities comprising Borrower are corporations organized
and existing under the laws of the State of Nevada and are affiliated in that
Zante, Inc., a Nevada corporation("Zante, Inc."), and Last Chance, Inc., a
Nevada corporation ("Last Chance"), are wholly-owned subsidiaries of The Sands
Regent, a Nevada corporation ("The Sands Regent");

         WHEREAS, Zante, Inc. is the owner of certain real property and
improvements commonly known as the Sands Regency Casino & Hotel located in Reno,
Washoe County, Nevada, and described in Exhibit "A-1" attached hereto (the
"Sands Regency Property");

         WHEREAS, Last Chance desires to purchase the business operations of the
Gold Ranch Casino and RV Resort which purchase shall include all furniture,
fixtures and equipment, and a twenty (20) year leasehold interest in and to
certain real property commonly known as the Gold Ranch Casino and RV Resort
located in Verdi, Washoe County, Nevada, and described in Exhibit "A-2" attached
hereto (the "Gold Ranch Property"). (The Sands Regency Property and the Gold
Ranch Property are at times referred to herein collectively as the "Property");
and

         WHEREAS, Lender has agreed to lend to Borrower certain funds on a
reducing revolving line of credit basis in an amount not to exceed at any time
the principal amount of SEVENTEEN MILLION AND NO/100THS DOLLARS ($17,000,000.00)
(the "Loan") for the purpose of paying certain existing indebtedness of Zante,
Inc., to assist Last Chance in purchasing the business operation of the Gold
Ranch Casino and RV Resort, and to provide the Borrower with working capital.

         NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and promises
of the parties and subject to the following terms and conditions, Borrower
agrees to borrow from Lender, and Lender agrees to loan to Borrower the Loan for
the purposes provided herein. The Loan shall be evidenced by a Reducing
Revolving Line of Credit Promissory Note Secured By Deed of Trust (the "Note")
bearing even date herewith, and repayment thereof shall be secured by one or
more Deed of Trust and Security Agreement and Fixture Filing With Assignment of
Rents (collectively, the "Deed of Trust"). This Agreement, the Note, the Deed of
Trust, any assignment of rents or leases, or both, and any and all other
documents now or hereafter executed by Borrower or any other person or party in
connection with or to evidence or secure payment of the Loan are sometimes
hereafter collectively referred to as the "Loan Documents".

                                       1

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702)362-5118

<PAGE>

         A.       DISBURSEMENTS.

                  A.1 General. At any time before the Maturity Date (as defined
in the Note), Lender shall disburse the Loan from time to time up to the Maximum
Availability (as defined below) at Borrower's request for the purposes provided
herein once Borrower has: (a) satisfied all conditions set forth herein; and (b)
deposited with Lender the following sums: (i) Lender's loan fee in the sum of
$170,000.00; (ii) all closing costs and fees; and (iii) Lender's reasonable
attorney's fees and costs incurred in connection with the documenting and
closing the Loan. Borrower has heretofore deposited with Lender the amount of
$15,000.00 which shall be applied by Lender to the payment of the foregoing
costs and fees with any balance being returned to Borrower.

                  A.2 Conditions Precedent to Each Disbursement. Lender's
obligation to make any disbursement of the Loan shall be further subject to the
following:

                      (a) Borrower shall submit to Lender a fully executed
Disbursement Request in form and content acceptable to Lender;

                      (b) No Event of Default (as hereinafter defined), or any
event which with notice or the passage of time would constitute an Event of
Default, shall then exist hereunder;

                      (c) Borrower shall provide Lender with such information as
Lender shall require regarding the proposed use of the requested Loan funds; and

                      (d) Lender shall have no obligation to approve any
Disbursement Request to the extent that the requested disbursement, if funded,
would result in the outstanding principal balance due under the Note exceeding
the Maximum Availability.

                  A.3 Maximum Availability. The outstanding principal balance of
the Loan at any time (the "Maximum Availability") shall not exceed
$17,000,000.00, reduced by the amount of $850,000.00 on the fifth day of June
and December of each year commencing on the fifth day of December, 2002, as set
forth in Exhibit "B" attached hereto and by this reference made a part hereof.

         B.       REPRESENTATIONS, COVENANTS AND WARRANTIES.

                  Borrower hereby unconditionally represents, covenants and
warrants as follows:

                  B.l Power. If Borrower or any signator who signs on its behalf
is a corporation, partnership, limited liability company, or trust, that it is a
corporation duly incorporated, or a partnership, limited liability company, or
trust duly organized, and in any event validly existing under the laws of the
state of its incorporation or organization and duly qualified to do business in
the State of Nevada, with requisite power and authority to (i) incur the
indebtedness evidenced by the Note; (ii) enter into this Agreement and grant the
Deed of Trust; and (iii) enter into any other Loan Documents executed and
delivered to Lender concurrently herewith.

                                       2

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702)362-5118

<PAGE>

                  B.2  Authority. That this Agreement, the Note, the Deed of
Trust and all other Loan Documents executed and delivered to Lender concurrently
herewith were executed in accordance with the requirements of law, and, if
Borrower or any signator who signs on its behalf is a corporation, partnership,
limited liability company, or trust, in accordance with any requirements of its
articles of incorporation, articles of partnership, articles of organization
and/or operating agreement, or declaration of trust, and any amendments thereto,
and that the execution of the same, and the full and complete performance of the
provisions thereof, is authorized by its bylaws, articles of partnership,
articles of organization and/or operating agreement, or declaration of trust, or
a resolution of its board of directors, partners, members and/or managers or
trustees, and will not result in any breach of, or constitute a default under,
or result in the creation of any lien, charge or encumbrance (other than those
contained herein or in any instrument delivered to Lender concurrently herewith)
upon any property or assets of Borrower under any indenture, mortgage, deed of
trust, bank loan or credit agreement or other instrument or agreement to which
Borrower is a party or by which Borrower is bound or, if applicable, under
Borrower's corporate charter, bylaws, articles of partnership, articles of
organization and/or operating agreement, or declaration of trust.

                  B.3  Financial Statements. Any and all balance sheets,
statements of income or loss, reconciliation of surplus and financial data of
any other kind heretofore furnished Lender by or on behalf of Borrower are true
and correct in all material respects, and fully and accurately present the
financial condition of the subjects thereof as of the dates thereof, and no
material adverse change has occurred in the financial condition reflected
therein since the dates of the most recent financial data submitted to Lender.
During the Loan term, Borrower shall provide Lender with: (i) copies of annual
CPA audited financial statements on a consolidated basis for each entity
comprising Borrower within 120 days following the end of each fiscal year; (ii)
copies of quarterly internally prepared financial statements for each entity
comprising Borrower and the Form 10Q consolidated within 45 days following the
end of each fiscal quarter; (iii) quarterly compliance certificates executed by
The Sands Regent's chief financial officer certifying as to Borrower's
compliance with the financial covenants set forth in Section B.4 below within 45
days following the end of each fiscal quarter for the first, second and third
fiscal quarters of each year and 120 days following the end of the fourth fiscal
quarter of each year; (iv) copies of monthly NGC Report No. 1 provided by
Borrower to the Nevada Gaming Control Board within 30 days following the end of
each month; and (v) such other financial information in connection with the
Borrower or the Property as Lender may reasonably request.

                  B.4  Financial Covenants.  During the term of the Loan:

                       (a)  Borrower shall maintain on a consolidated basis a
Debt Service Coverage Ratio (defined as [earnings before interest expense,
income taxes, depreciation and amortization expense, excluding any gains or
losses resulting from disposition of equipment ("EBITDA")] / [current portion of
long term, in arrears, debt plus interest expense]) not less than 1.70 to 1.00
during fiscal year 2002, not less than 1.80 to 1.00 during fiscal year 2003, and
not less than 2.00 to 1.00 during fiscal year 2004 and thereafter, to be
measured quarterly on a rolling four (4)-quarter basis and annually at fiscal
year end;

                                       3

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702)362-5118

<PAGE>

                     (b) Borrower shall maintain on a consolidated basis a
Funded Debt to EBITDA ratio (defined as [all interest bearing debt, including
capital leases] / [EBITDA]) not greater than 4.50 to 1.00 as of the fiscal year
ending on June 30, 2002, not greater than 3.50 to 1.00 as of the quarters ending
on September 30, 2002, December 31, 2002, and March 31, 2003, and the fiscal
year ending on June 30, 2003, and not greater than 2.50 to 1.00 thereafter, to
be measured quarterly on a rolling four (4)-quarter basis and annually at fiscal
year end;

                     (c) Borrower shall maintain on a consolidated basis an
Effective Tangible Net Worth (defined as net worth, plus subordinated debt, less
intangibles and amounts due from shareholders) not less than $24,000,000 as of
fiscal year end 2002, not less than $25,000,000 as of fiscal year end 2003, and
not less than $26,000,000 as of fiscal year end 2004 and thereafter;

                     (d) Borrower shall not incur any additional indebtedness in
excess of $500,000, exclusive of slot machine financing, without Lender's prior
written approval;

                     (e) Borrower shall establish and maintain the operating
accounts for each entity comprising Borrower with a branch of Lender; and

                     (f) Any indebtedness owed by Borrower, or any entity
comprising Borrower, to the seller of the Gold Ranch Casino and RV Resort shall
be subordinated to the obligation of Borrower to Lender under the Loan in a
manner acceptable to Lender and any payment acceleration thereunder in excess of
20% in any year shall require Lender's prior written consent.

                 B.5 Litigation. There are no actions, suits or proceedings of a
material nature (collectively "Proceedings") pending, or to the knowledge of
Borrower threatened, against or affecting Borrower, the Property, or involving
the validity or enforceability of the Deed of Trust or the priority of the lien
and security interest thereof, and no event ("Adverse Event") has occurred
(including specifically Borrower's execution of this Agreement, the Note, the
Deed of Trust or any of the other Loan Documents) which will violate, be in
conflict with, result in the breach of or constitute (with due notice or lapse
of time, or both) a default under any Legal Requirement (as hereafter defined),
or result in the creation or imposition of any lien, charge or encumbrance of
any nature whatsoever on the Property other than the liens and security
interests created by, or referred to in, the Deed of Trust. Borrower shall give
Lender written notice of any pending or threatened Proceeding or any Adverse
Event promptly after Borrower obtains knowledge thereof.

                 B.6 Permits. Before requesting, or being entitled to, any
disbursement of the Loan, Borrower shall have complied with all Legal
Requirements (as defined below). Before requesting, or being entitled to, any
disbursement of the Loan, Borrower shall have complied with all requirements of
the governmental entities with jurisdiction over Borrower, Borrower's business
activities, and the Property.

                 B.7 Access Laws.

                                       4

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702)362-5118

<PAGE>

                     (a) Borrower agrees that Borrower and the Property shall at
all times strictly comply with the requirements of the Americans with
Disabilities Act of 1990; any other federal, state, or local laws or ordinances
related to disabled access; or any statute, rule, regulation, ordinance, order
of governmental bodies and regulatory agencies, or order or decree of any court
adopted or enacted with respect thereto, as now existing or hereafter amended or
adopted (collectively, the "Access Laws"). At any time, Lender may require a
certificate of compliance with the Access Laws and indemnification agreement in
a form reasonably acceptable to Lender. Lender may also require a certificate of
compliance from an architect, engineer, or other third party acceptable to
Lender.

                     (b) Notwithstanding any provisions set forth herein or in
any security instrument, Borrower shall not alter or permit any tenant or other
person to alter the Property in any manner which would increase Borrower's
responsibilities for compliance with the Access laws without the prior written
approval of Lender which consent shall not be unreasonably withheld or delayed.
In connection with such approval, Lender may require a certificate of compliance
with the Access Laws from an architect, engineer, or other party acceptable to
Lender.

                     (c) Borrower agrees to give prompt written notice to Lender
of the receipt by Borrower of any claims of violation of any of the Access Laws
and of the commencement of any proceedings or investigations which relate to
compliance with the Access Laws.

                     (d) Borrower shall indemnify and hold harmless Lender from
and against any and all claims, demands, damages, costs, expenses, losses,
liabilities, penalties, fines, and other proceedings including, without
limitation, reasonable attorney fees and expenses arising directly or indirectly
from or out of or in any way connected with any failure of the Property to
comply with the Access Laws. The obligations and liabilities of Borrower under
this subsection shall survive any termination, satisfaction, assignment,
judicial or non-judicial foreclosure proceeding, or delivery of a deed in lieu
of foreclosure with respect to this agreement, any security instrument, and the
Property.

               The foregoing representations, covenants, and warranties shall
survive until all sums payable pursuant to the Note or this Agreement, or which
are secured by the Deed of Trust or any of the other Loan Documents, have been
paid in full.

         C.    DEFAULT.

               C.l   Events of Default. Any of the following shall constitute a
default hereunder (an "Event of Default"):

                     (a) The failure of Borrower to make any payment required
hereunder, under the Note, or under any other Loan Document within fifteen (15)
days after the due date thereof;

                                       5

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702)362-5118

<PAGE>

               (b)  The neglect, failure, or refusal of Borrower to keep in full
force and effect any permit, license, consent or approval required hereunder,
under the Loan Documents or otherwise required in connection with Borrower or
Borrower's business activities;

               (c)  The false or misleading nature of any representation or
warranty of Borrower contained herein or in any representation to Lender
concerning the financial condition of Borrower, or the reasonable determination
by Lender of a material threat to its security by reason of a material adverse
change in the financial condition of Borrower (unless Borrower provides Lender
with evidence acceptable to Lender that no such change in financial condition
has occurred, or that any such change does not present a material threat to
Lender's security, within thirty (30) days following written notice from Lender
to Borrower relating thereto);

               (d)  The failure of Borrower to fully perform any and all
covenants and agreements hereunder; provided, however, that such failure shall
not constitute an Event of Default if such failure is not specifically covered
elsewhere herein or in the Note, the Deed of Trust or any of the other Loan
Documents, such failure does not relate, in the judgment of Lender, to a matter
which is of an emergency nature, and Borrower performs such covenant or
agreement within thirty (30) days after performance thereof is due. If such
failure is specifically covered elsewhere herein or in the Note, the Deed of
Trust or any of the other Loan Documents, the foregoing 30-day grace period
shall not be applicable in such a situation and the grace period, notice
requirement and/or cure period, if any, set forth in such other reference shall
control;

               (e)  The failure of Borrower to perform (other than to make a
payment due thereunder) as required under any other Loan Document within thirty
(30) days following written notice from Lender that such performance is due;

               (f)  The admission by any entity comprising Borrower in writing
of its inability to pay its debts generally as they become due, or the filing by
any entity comprising Borrower of a petition or action for relief under an
bankruptcy, reorganization or insolvency law, or any other law or laws for the
relief of, or relating to, debtors;

               (g)  The filing of any involuntary petition under any bankruptcy
or insolvency law against any entity comprising Borrower, or the appointment of
a custodian, receiver or trustee to take possession of the Property or other
assets of any entity comprising Borrower, unless such petition or appointment is
or has been set aside or withdrawn within sixty (60) days from the date of such
filing or appointment;

               (h)  The filing by or against any entity comprising Borrower of a
petition seeking the liquidation or dissolution of such entity or the
commencement of any other procedure

                                        6

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                Las Vegas, Nevada
                                 (702) 362-5118

<PAGE>

to liquidate or dissolve any such entity, or the occurrence of any event,
condition or circumstance which causes the liquidation of such entity; or

               (i)  The occurrence of a breach or default (a) by Last Chance
under the Gold Ranch Casino Lease dated December 27, 2001, executed in
connection with a portion of the Gold Ranch Property, or (b) California
Prospectors, Ltd., a Nevada Limited Liability Company, under the California
Lottery Station Lease dated May 31, 2002, executed in connection with a portion
of the Gold Ranch Property, in each case subject to any applicable notice
requirement and opportunity to cure contained therein.

               For the purpose of paragraph C.1, whenever Borrower is provided
with a period of time within which to cure any default, and such default is not
reasonably susceptible to cure within such period of time, it shall be deemed
cured if Borrower commences curative action within such time period and
diligently pursues such action thereafter.

        C.2    Acceleration. Upon Borrower failing to timely cure an Event of
Default hereunder, the entire unpaid balance of the Note including all accrued
interest shall, at the option of Lender, become immediately due and payable and
Lender shall have such rights of enforcement as may be afforded by law,
hereunder, or under the Note, the Deed of Trust or any of the other Loan
Documents.

    D.  REMEDIES.

        D.l    General. Upon the occurrence of an Event of Default hereunder,
Lender shall have all rights and remedies available to Lender under the law,
hereunder or under the Note (including but not limited to the right to
accelerate the Note), the Deed of Trust or any of the other Loan Documents,
including, without limitation, the right to disapprove any Disbursement Request
submitted by Borrower and to cease making disbursements under the Loan.

        D.2    Right to Advance or Post Funds. Where disputes arise which, in
the good faith opinion of Lender, may endanger the performance of any material
covenant contained herein, Lender may, following ten (10) days written notice to
Borrower, enter into such agreements or advance funds for the account of
Borrower without prejudice to Borrower's rights, if any, to recover said funds
from the party to whom paid. Such agreement or agreements may take the form
which Lender, in its discretion, deems proper, including but not limited to
agreements to indemnify a title insurer against possible assertion of lien
claims or to pay disputed amounts to contractors if Borrower is unable or
unwilling to pay the same. All sums paid or agreed to be paid pursuant to any
such undertaking shall be for the account of Borrower, Borrower shall reimburse
Lender for any such payments made upon demand therefor, with interest at the
rate then applicable under the Note until date of reimbursement, and such
advances and interest shall be secured by the Deed of Trust.

                                        7

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                Las Vegas, Nevada
                                 (702) 362-5118

<PAGE>

          D.3  Curing of Defaults by Disbursement. Upon the occurrence of an
Event of Default which may be cured by the payment of money, Lender, without
waiving any right of acceleration or foreclosure under the Note or the Deed of
Trust which Lender may have by reason of such default, or any other right Lender
may have against Borrower because of such Event of Default, shall have the right
to make such payment from the Loan, thereby curing the Event of Default.

          D.4  Remedies are Cumulative. All remedies of Lender provided for
herein are cumulative and shall be in addition to any and all other rights and
remedies provided in the Note, the Deed of Trust or any of the other Loan
Documents or by law. The exercise of any rights of Lender hereunder shall not in
any way constitute a cure or waiver of an Event of Default, or invalidate any
act done pursuant to any notice of default, or prejudice Lender in the exercise
of any of its other rights hereunder or elsewhere unless, in the exercise of
said rights, Lender realizes all amounts owed to it hereunder and under the
Note, the Deed of Trust and the other Loan Documents.

          D.5  Right of Contest. Borrower shall have the right to contest in
good faith any claim, demand, levy, or assessment by a third party, the
assertion of which would constitute an Event of Default hereunder. Any such
contest shall be prosecuted diligently and in a manner not prejudicial to Lender
or the rights of Lender hereunder. In the event that Lender reasonably
determines that such claim, demand, levy or assessment could adversely affect
Lender's interest in the Property, upon demand by Lender, Borrower shall deposit
funds with Lender or obtain and record a bond satisfactory to Lender in an
amount sufficient to cover any amounts which may be owing in the event the
contest may be unsuccessful. Borrower shall make such deposit or obtain and
record such bond, as the case may be, within ten (10) business days after demand
therefor and, if made by payment of funds to Lender, the amount so deposited
shall be disbursed in accordance with the resolution of the contest to Borrower
or the adverse claimant.

     E.   MISCELLANEOUS.

          E.l  No Waiver. No waiver of any Event of Default hereunder shall be
implied from any omission by Lender to take action on account of such Event of
Default, and no express waiver shall affect any Event of Default other than the
Event of Default specified in the waiver and the waiver shall be operative only
for the time and to the extent therein stated. Waivers of any covenant, term, or
condition contained herein shall not be construed as a waiver of any subsequent
breach of the same covenant, term or condition. The consent or approval by
Lender to or of any act by Borrower requiring further consent or approval shall
not be deemed to waive or render unnecessary the consent or approval to or of
any subsequent similar act.

          E.2  No Third Parties Benefitted. This Agreement is made and entered
into for the sole protection and benefit of Lender and Borrower. All conditions
of the obligations of Lender to make advances hereunder are imposed solely and
exclusively for the benefit of Lender and may be freely modified by Lender with
the concurrence of Borrower or waived by Lender in whole or in part at any time
if in its sole discretion it deems it advisable to do so. No person other than
Borrower

                                        8

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                Las Vegas, Nevada
                                 (702) 362-5118

<PAGE>

shall have standing to require Lender to make any disbursements under the Loan
or be a beneficiary of this Agreement or of any of the disbursements to be made
hereunder.

          E.3  Plural Borrowers Jointly and Severally Liable. All persons, firms
and/or entities, including general partners, constituting "Borrower" herein
shall be jointly and severally liable to Lender for the faithful performance of
the terms hereof.

          E.4  Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be considered as
properly given if mailed by first class United States mail, postage prepaid,
registered or certified with return receipt requested, or by delivering the same
in person to the intended addressee, or by telefax. Notice so mailed shall be
effective two (2) business days following its deposit. Notice given in any other
manner shall be effective only if and when received by the addressee. For
purposes of notice, the addresses of the parties shall be as set forth on the
signature page hereof; provided, however, that either party shall have the right
to change its address for notice hereunder to any other location by the giving
of notice to the other party in the manner set forth above.

          E.5  Authority to File Notices. Borrower irrevocably appoints,
designates, and authorizes Lender as its agent (said agency being coupled with
an interest) to file for record any notice that Lender deems necessary or
desirable to protect its interest hereunder or under the Note, the Deed of Trust
or any of the other Loan Documents. Lender shall only file such notices if
Borrower fails, within ten (10) days after written demand by Lender, to do so.

          E.6  Expenses. Borrower shall pay promptly all reasonable costs,
charges, and expenses incurred by Lender in connection with the Loan, including
but not limited to commitment fees, loan fees, service charges, title charges,
tax and lien service charges, costs of inspection, recording fees, processing
fees, appraisal fees, attorneys' fees, real property taxes and assessments and
insurance premiums, and any and all fees in consideration of Lender's commitment
to provide the Loan.

          E.7  Actions. Lender shall have the right to commence, appear in or
defend (except for any action commenced by Lender) any action or proceeding
purporting to affect the Property, or the rights, duties, or liabilities of the
parties hereunder, or the disbursement of any funds. In connection therewith,
Lender may incur and pay costs and expenses, including reasonable attorneys'
fees, and Borrower shall pay to Lender on demand all such costs and expenses and
Lender is authorized to disburse funds from the Loan for said purpose. Borrower
shall also have the right to appear in or defend any such action and Borrower
and Lender shall reasonably cooperate in any action or proceeding in which their
interests are the same or similar.

          E.8  Commissions and Brokerage Fee. Borrower shall indemnify Lender
from any responsibility and/or liability for the payment of any commission,
charge or brokerage fees to anyone which may be payable in connection with the
making, purchase or refinance of the Loan, it being understood that any such
commission, charge, or brokerage fees will be paid directly by Borrower to the
party or parties entitled thereto.

                                        9

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                Las Vegas, Nevada
                                 (702) 362-5118

<PAGE>

          E.9   Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of Nevada, except as preempted by federal
law.

          E.10  Heirs, Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the heirs, successors, assigns and personal
representatives of the parties hereto; provided, however, that Borrower shall
not assign its rights hereunder in whole or in part without the prior written
consent of Lender, which such consent may be granted or withheld in the sole and
absolute discretion of Lender. Any such assignment without said consent shall be
void. Lender shall have the right at any time and from time to time to assign to
participants or others all or certain of its rights and obligations hereunder
but no such assignment shall, without Borrower's written consent, relieve Lender
of its obligations hereunder.

          E.11  Time. Time is of the essence of this Agreement and each and
every provision hereof in which time is an element.

          E.12  Supplemental Agreement. The provisions of this Agreement are not
intended to supersede the provisions of the Deed of Trust but shall be construed
as supplemental thereto. This Agreement, and all representations and warranties
contained herein, shall remain in effect until the Loan has been paid in full.

          E.13  Legal Requirements. "Legal Requirements" shall mean (i) any and
all present and future judicial decisions, statutes, rulings, directions, rules,
regulations, permits, licenses, certificates or ordinances of any governmental
authority in any way applicable to Borrower, Borrower's business activities or
the Property, including the ownership, use, occupancy, possession, operation,
maintenance, alteration, repair or reconstruction of the Property, (ii)
Borrower's presently or subsequently effective bylaws and articles of
incorporation or partnership, limited partnership, joint venture, trust or other
form of business association agreement, (iii) any and all terms, provisions and
conditions of any commitment between Lender and Borrower which are to be
performed or observed by Borrower, and (iv) any and all leases and other
contracts (written or oral) of any nature that relate, in any way, to the
Property and to which Borrower may be bound, including but not limited to any
lease or other contract pursuant to which Borrower is granted a possessory
interest in the Property.

          E.14  Relationship of Parties. The relationship between Borrower and
Lender is, and at all time shall remain, solely that of debtor and creditor, and
shall not be, or be construed to be, a joint venture, equity venture,
partnership or other relationship of any nature, and Lender neither undertakes
nor assumes any responsibility or duty to Borrower or to any other person with
respect to the Property or the Loan, except as expressly provided in the Loan
Documents; and notwithstanding any other provision of the Loan Documents: (a)
Lender is not, and shall not be construed as, a partner, joint venturer, alter
ego, manager, controlling person or other business associate or participant of
any kind of Borrower or its partners or members and Lender does not intend to
ever assume such status; (b) Lender shall in no event be liable for any debts,
expenses or losses incurred or sustained by Borrower; (c) Lender does not intend
to ever assume any

                                       10

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                Las Vegas, Nevada
                                 (702) 362-5118

<PAGE>

responsibility to any person for the quality, suitability, safety or condition
of the Property; and (d) Lender shall not be deemed responsible for or a
participant in any acts, omissions or decisions of Borrower or its partners or
members.

           E.15 Attorneys' Fees and Costs. If any legal action or any
arbitration or other proceeding is brought for the enforcement of this Agreement
or because of an Event of Default or an alleged dispute or misrepresentation in
connection with any of the provisions of this Agreement, the successful or
prevailing party shall be entitled to recover reasonable attorneys' fees and
other costs incurred in that action or proceeding, in addition to any other
relief to which he may be entitled.

           E.16 Arbitration

           (a) General. The parties hereby agree that any dispute, action, claim
or controversy between Borrower and Lender, and whether sounding in contract,
tort or otherwise shall be resolved by submission to arbitration in accordance
with NRS Chapter 38.015 to 38.205. The disputes, actions, claims or
controversies which shall be submitted to arbitration shall include all
disputes, actions, claims or controversies arising out of or in connection with
(a) this Agreement or any other Loan Document; (b) the underlying facts which
gave rise to this Agreement and the other Loan Documents; and (c) any
transaction contemplated hereby or by the other Loan Documents.

           The parties hereby agree that an arbitrator shall be selected from a
list provided by the American Arbitration Association, unless the parties
otherwise specifically agree in writing. Any arbitration will be conducted
according to the Commercial Arbitration Rules of The American Arbitration
Association, provided that the discovery rules of the Nevada Rules of Civil
Procedure beginning with NRCP 26 through NRCP 37 shall be applicable and
available to the parties. In the event of an inconsistency between the
Commercial Arbitration Rules of the American Arbitration Association and this
Agreement, the terms of this Agreement shall control. All statutes of
limitations which would otherwise be applicable shall apply to any claim made or
theory of recovery advanced in any arbitration proceeding commenced under this
Agreement. Judgment upon any award rendered by an Arbitrator, may be entered in
any Court having jurisdiction and may be enforced as any judgment rendered by a
Nevada District Court.

           (b) Provisional Remedies, Self-Help and Foreclosure. No provision of
this paragraph E.16 shall limit the right of any party to this Agreement to
exercise self-help remedies such as setoff, foreclosure against or sale of any
real or personal property collateral or security in a commercially reasonable
manner, or to obtain provisional or ancillary remedies from a court of competent
jurisdiction before, after, or during the pendency of any arbitration or other
proceeding. The exercise of a remedy does not waive the right of either party to
resort to arbitration or reference. At Lender's option, foreclosure under a deed
of trust or mortgage may be accomplished either by exercise of power of sale
under the deed of trust or mortgage or by judicial foreclosure.

           E.17 Expiration of Commitment. Lender's obligation to disburse the
Loan is further conditioned upon the execution of this Agreement and the other
Loan Documents and the recordation of the Deed of Trust on or before July 1,
2002.

                                       11

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 362-5118

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.

The Sands Regent                      THE SANDS REGENT, a Nevada corporation
345 N. Arlington
Reno, Nevada  89501                   By: /s/ FERENC B. SZONY
                                          ------------------------------
                                              FERENC B. SZONY
                                              Its: President

Zante, Inc.                           ZANTE, INC., a Nevada corporation
345 N. Arlington
Reno, Nevada  89501                   By: /s/ FERENC B. SZONY
                                          ------------------------------
                                              FERENC B. SZONY
                                              Its: President

Last Chance, Inc.                     LAST CHANCE, INC., a Nevada corporation
345 N. Arlington
Reno, Nevada  89505                   By: /s/ FERENC B. SZONY
                                          ------------------------------
                                              FERENC B. SZONY
                                              Its: President

                                                            "Borrower"

Nevada State Bank                            NEVADA STATE BANK
P.O. Box 2351
Reno, Nevada  89505                   By: /s/ KEVIN SULLIVAN
                                          ------------------------------
                                              KEVIN SULLIVAN
                                              Its: Senior Vice President

                                                            "Lender"

                                  "EXHIBIT A-1"

           (Property Description for Sands Regency Reno Casino Hotel)

                                       12

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 362-5118

<PAGE>

                                  "EXHIBIT A-2"

          (Property Description of the Gold Ranch Casino and RV Resort)

                                       13

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                Las Vegas, Nevada
                                 (702) 362-5118

<PAGE>

                        REDUCING REVOLVING LINE OF CREDIT

                    PROMISSORY NOTE SECURED BY DEED OF TRUST

$17,000,000.00                                                      May 31, 2002

         FOR VALUE RECEIVED, at the times hereinafter stated, the undersigned
(collectively "Borrower") promise to pay to NEVADA STATE BANK, or order
("Lender"), at Nevada State Bank, P.O. Box 2351, Reno, Nevada 89505, or at such
other place as the holder hereof may from time to time designate in writing, in
legal tender of the United States of America, the principal sum of SEVENTEEN
MILLION AND NO/100THS DOLLARS ($17,000,000.00), or so much thereof as may be
advanced or readvanced (the "Loan") pursuant to the terms of that certain
Reducing Revolving Line of Credit Loan Agreement of even date herewith between
Lender and Borrower (the "Loan Agreement"), with interest from the date or dates
of disbursement on the unpaid principal balance from time to time outstanding,
at the fixed rate of seven and seventeen one-hundredths percent (7.17%) per
annum (the "Interest Rate") until June 1, 2007 (the "Interest Rate Adjustment
Date"). On the Interest Rate Adjustment Date the Interest Rate shall be adjusted
to a new fixed rate (the "Adjusted Interest Rate") equal to LIBOR (as defined
below) plus two and four-tenths percent (2.40%) per annum, but in no event less
than six percent (6.00%) per annum. Interest shall be computed on the basis of a
360/365 simple interest basis; that is by applying the ratio of the annual
interest rate over a year of 360 days, multiplied by the outstanding principal
balance, multiplied by the actual number of days the principal balance is
outstanding. LIBOR is defined as the fixed rate for the U.S. Dollar Swap Market
using the asked side of the market at 8:00 a.m. Mountain Time as published by
Bloomberg, or comparable service, for a five (5) year term (the "Index"). The
Index is not necessarily the lowest rate charged by Lender on its loans. If the
Index becomes unavailable during the term of this Loan, Lender may designate a
substitute index after notice to Borrower. Lender will tell Borrower the current
Index rate upon Borrower's request.

         Principal and interest shall be due and payable as follows:

                 (i)    interest only on the fifth day of each and every month
         commencing on the fifth day of July, 2002.

                 (ii)   principal in the amount, if any, which is necessary to
         reduce the outstanding principal balance due under this Note to the
         Maximum Availability (as defined in the Loan Agreement) on the fifth
         day of June and December of each year, commencing on the fifth day of
         December, 2002; and

                 (iii)  any balance of principal and accrued and unpaid interest
         shall be due and payable in full on the fifth day of June, 2012 (the
         "Maturity Date").

                                       1

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

     At no time shall the Interest Rate or the Adjusted Interest Rate exceed the
legal rate of interest permitted to be charged by the Lender. In the event any
law precludes Lender from charging the Interest Rate or the Adjusted Interest
Rate otherwise permitted hereunder, the rate of interest hereunder for the
period during which such rate is unlawful shall be the highest rate permitted by
law. The rate of interest hereunder shall immediately increase to the rate
permitted hereunder as soon as permitted by law. Any interest which would
otherwise have become due to Lender but for the application of any law, shall,
to the extent legally permitted, be repaid to Lender in equal monthly
installments above the interest otherwise due at such time, so that the interest
otherwise due to Lender hereunder, but not permitted by law, shall be fully
repaid to Lender by the Maturity Date. Such payments shall be made at the time
and in the manner set forth herein for the payment of interest.

     Borrower shall be responsible to pay all costs and charges set forth in the
Loan Agreement.

     This Note is issued pursuant to the Loan Agreement and is secured by, among
other instruments, one or more Deed of Trust and Security Agreement and Fixture
Filing with Assignment of Rent (collectively, the "Deed of Trust") of even date
herewith , encumbering certain real and personal property located in Washoe
County, Nevada, and Sierra County, California, and improvements thereon, as more
particularly described in the Deed of Trust (collectively, the "Property").

     Borrower shall have the right to borrow, repay and to reborrow the Loan
subject to the Maximum Availability. Borrower shall have the right to prepay the
entire outstanding principal balance hereunder at any time and obtain a
reconveyance of the Deed of Trust provided that such prepayment shall be
accompanied by a prepayment fee (the "Prepayment Fee") equal to one percent (1%)
of such outstanding principal balance. Notwithstanding the foregoing, Lender
agrees to waive the Prepayment Fee in the event that Lender provides financing
to fully prepay the Loan or Borrower prepays the Loan without refinancing with a
third party.

     All payments on this Note shall be applied first to accrued interest and
the balance to principal and if interest is unpaid, it shall bear interest like
principal at the Interest Rate. Borrower acknowledges that the foregoing, and
other provisions of this Note, shall result in compounding of interest and
Borrower agrees thereto pursuant to the provisions of Nevada Revised Statutes
99.050.

     Borrower agrees with Lender that it would be extremely difficult or
impracticable to fix the actual damages of Lender in the event that any
installment of interest or principal hereunder shall not be paid when due and
that Lender will incur extra administrative expenses and loss of use of funds;
therefore, Borrower agrees to pay Lender, in the event a payment is not made
within ten days of the date it was due, an amount equal to 5% of such late
installment. Acceptance of such amount by Lender shall be in lieu of its actual
damages for any such delinquent payment of an installment. Nothing in this Note
shall be construed as an express or implied agreement by Lender to forbear in
the collection of any delinquent payment, or be construed as in any way giving
the Borrower the right, express or implied, to fail to make timely payments
hereunder, whether upon payment of such

                                        2

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

damages or otherwise. The right of the holder hereof to receive payment of such
damages, and receipt thereof, are without prejudice to the right of such holder
to collect such delinquent payments and any other amounts provided to be paid
hereunder or under any security for this Note or to declare a default hereunder
or under any security for this Note.

         Failure to make any payment of principal and/or interest within fifteen
(15) days after the due date thereof or to otherwise perform hereunder or under
any other promissory note executed, or to be executed, by Borrower in favor of
Lender, or an Event of Default by Borrower under the terms of the Loan
Agreement, the Deed of Trust, any other agreement or instrument securing the
indebtedness evidenced hereby, or any other obligations of Borrower to the
holder hereof, shall constitute a default hereunder and shall, without notice,
at the option of the holder hereof, cause all of the unpaid principal of this
Note, with interest accrued thereon and any other sums due under the Loan
Agreement, Deed of Trust or other instruments, to become immediately due and
payable. Upon default hereunder, at the option of the holder hereof, all amounts
then unpaid under this Note, the Loan Agreement, the Deed of Trust or any other
instrument securing the Note or the Loan Agreement shall bear interest from the
date of default until such default is cured at a default rate equal to five
percent (5%) above the applicable Interest Rate (the "Default Rate") and shall
be immediately due and payable. Delay or failure to exercise said options shall
not constitute a waiver of the right to exercise same at any time thereafter or
in the event of any subsequent default.

         The acceptance of any payment hereunder which is less than payment of
all amounts then due and payable shall not constitute a waiver of any of the
rights or options of the holder hereof or to the exercise of those rights and
options at the time of such acceptance or at any subsequent time. Principal,
interest and any fees hereunder shall be payable in lawful money of the United
States of America in immediately available funds free and clear of, and without
deduction for, any and all present and future taxes, withholdings, and costs or
reserves.

         In the event that suit be brought hereon, or an attorney be employed or
expenses be incurred to compel payment of this Note or any portion of the
indebtedness evidenced hereby, whether or not any suit, proceeding or any
judicial or non-judicial foreclosure proceeding be commenced, Borrower promises
to pay all such expenses and reasonable attorneys' fees, including, without
limitation, any attorneys' fees incurred in any bankruptcy proceeding, in the
event that Lender is the prevailing party with respect thereto.

         This Note shall be construed and enforced in accordance with the laws
of the State of Nevada, except as may be pre-empted by federal law. Borrower
agrees that Lender shall have the rights and remedies available to a creditor
under the laws of the State of Nevada. Borrower consents to the personal
jurisdiction of the appropriate state or federal court located in Washoe County,
Nevada.

         No waiver by Lender of any right or remedy shall be effective unless in
writing and signed by Lender, and no such waiver, on one occasion, shall be
construed as a waiver on any other occasion.

                                       3

                       Hale Lane Peek Dennison and Howard
                        Attorneys and counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

         In the event that this Note is executed by two or more persons or
entities as Borrower, the liability of such persons or entities for the amounts
due hereunder shall be joint and several.

         Each maker, endorser and guarantor jointly and severally and to the
extent permitted by law waives notice of intent to accelerate, demand,
presentment for payment, protest and notice of protest and non-payment of this
Note; waives any and all lack of diligence or delays in the collection or
enforcement hereof; and expressly agrees to remain and continue bound for the
payment of the principal, interest and other sums provided for by the terms of
this Note, the Loan Agreement or said Deed of Trust, notwithstanding any
extension of time for the payment of said principal or interest or other sum, or
any change in the amount agreed to be paid under this Note, the Loan Agreement
or in said Deed of Trust, or any change by way of release or surrender, exchange
or substitution for any real estate security or other collateral security now
held or which may hereafter be held as security for this Note, and waives all
and every kind of notice of such extension, or change, and agrees that the same
may be made without notice to or joinder of Borrower.

         In the event that the interest of Borrower in the Property encumbered
by the Deed of Trust, or any part thereof, or any interest therein is sold,
conveyed, alienated, further encumbered or otherwise transferred by Borrower,
voluntarily or involuntarily, whether by operation of law or otherwise, the
obligations hereunder, irrespective of the maturity dates expressed herein, at
the option of the holder hereof and without demand or notice, shall immediately
become due and payable. In the event that the holder hereof does not elect to
declare this Note immediately due and payable, then, unless indicated otherwise
in writing by the holder hereof, Borrower shall remain primarily liable for the
obligations hereunder, under the Deed of Trust and under any other instrument
securing this Note or executed in connection herewith. This provision shall
apply to each and every sale, conveyance, alienation, encumbrance or transfer,
regardless of whether or not the holder has consented to, or waived, holder's
rights hereunder, whether by action or nonaction, in connection with any
previous sale, conveyance, alienation, encumbrance or transfer and whether or
not the holder has received any payments after such event. Notwithstanding the
foregoing, Lender understands that Borrower intends to further encumber a
portion of the Property with a deed of trust in favor of Prospector Gaming
Enterprises, Inc., a Nevada corporation, to secure an obligation in a principal
amount not to exceed $6,000,000. Lender consents to such further encumbrance so
long as the lien thereof shall at all times be subject and subordinate to the
lien of the Deed of Trust.

                  [Remainder of Page Intentionally Left Blank]

                                         THE SANDS REGENT, a Nevada corporation,

                                         By: /s/ FERENC B. SZONY
                                             ------------------------------
                                                 FERENC B. SZONY

                                       4

                       Hale Lane Peek Dennison and Howard
                        Attorneys and counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

                                                Its: President

                                        ZANTE, INC., a Nevada corporation,

                                        By: /s/ FERENC B. SZONY
                                            ------------------------------
                                                FERENC B. SZONY
                                                Its: President

                                        LAST CHANCE, INC., a Nevada corporation,

                                        By: /s/ FERENC B. SZONY
                                            ------------------------------
                                                FERENC B. SZONY
                                                Its: President

                                                              "Borrower"
                                       5

                       Hale Lane Peek Dennison and Howard
                        Attorneys and counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

APN No.  011-021-01, 011-360-09,
         011-360-17, 007-274-15,
         007-282-01, 007-282-28,
         007-282-33, 007-282-46,
         007-282-47, 007-282-49,
         007-282-51, 007-282-52,
         11-360-21

WHEN RECORDED MAIL TO:
Nevada State Bank
P.O. Box 2351
Reno, Nevada  89505

                    DEED OF TRUST AND SECURITY AGREEMENT AND
                     FIXTURE FILING WITH ASSIGNMENT OF RENTS

         THIS DEED OF TRUST AND SECURITY AGREEMENT AND FIXTURE FILING WITH
ASSIGNMENT OF RENTS ("Deed of Trust") is made as of the 31st day of May, 2002,
by ZANTE, INC., a Nevada corporation (the "Trustor"), to WESTERN TITLE COMPANY,
INC. ("Trustee"), for the benefit of NEVADA STATE BANK ("Beneficiary").

                                    RECITALS:

         A.       Pursuant to that certain Reducing Revolving Line of Credit
Loan Agreement of even date herewith and any amendment, modification or change
thereto (the "Loan Agreement") between Trustor, The Sands Regent, a Nevada
corporation, and Last Chance, Inc., a Nevada corporation, as the borrower
(collectively, the "Borrower"), and Beneficiary as lender, Beneficiary has
agreed to make a loan to Borrower on the terms and conditions set forth therein.
Unless the context otherwise requires, all capitalized words or terms used but
not otherwise defined herein shall have the meanings ascribed thereto in the
Loan Agreement.

         B.       Pursuant to the Loan Agreement, the Borrower's obligations
evidenced by the Loan Agreement are required to be secured by, among other
things, this Deed of Trust.

         C.       The parties acknowledge that certain provisions of this Deed
of Trust may be subject to the laws, rules and regulations (the "Applicable
Gaming Laws") of the gaming authorities (the "Gaming Authorities") of the State
of Nevada and of other governmental jurisdictions, including, but not limited
to, the Nevada State Gaming Control Board, the Nevada Gaming Commission and the
City of Reno Gaming and Liquor Board.

                                       1

                       Hale Lane Peek Dennison and Howard
                        Attorneys and counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

I.       GRANTS AND OBLIGATIONS SECURED.

         A.       Grants.

                  1.01. In consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Trustor hereby irrevocably grants, transfers and assigns to
Trustee, in trust, for the benefit of Beneficiary, with power of sale and right
of entry and possession, all right, title and interest of Trustor in and to that
certain real property situated in the County of Washoe, State of Nevada,
described in Exhibit "A" attached hereto and made a part hereof (the "Land"),
together with all right, title and interest of Trustor therein and in and to:

                        (a) All buildings and other improvements now or
hereafter located on the Land, all water and water rights (whether riparian,
appropriative, or otherwise, and whether or not appurtenant), pumps and pumping
stations used in connection therewith and all shares of stock evidencing the
same, all machinery, equipment (including Gaming Equipment (as hereinafter
defined)), appliances, furnishings, inventory, fixtures, and other property used
or useable in connection with the Land and the improvements thereon, including,
but not limited to, all storage tanks and pipelines, all gas, electric, heating,
cooling, air conditioning, refrigeration and plumbing fixtures and equipment,
which have been or may hereafter be attached or affixed in any manner to any
building now or hereafter on the Land (the "Improvements").

                        (b) All the rights, rights of way, easements, licenses,
profits, privileges, tenements, hereditaments and appurtenances, now or
hereafter in any way appertaining and belonging to or used in connection with
the Land and/or the Improvements, and any part thereof or as a means of access
thereto, including, but not limited to, any claim at law or in equity, and any
after acquired title and reversion in or to each and every part of all streets,
roads, highways and alleys adjacent to and adjoining the same.

                        (c) All rentals, earnings, income, accounts, accounts
receivable, deposits, security deposits, receipts, royalties, revenues, issues
and profits which, after the date hereof, and while any portion of the
indebtedness secured hereby remains unpaid, may accrue from the Land and/or the
Improvements and any part thereof, subject, however, to the right, power and
authority conferred upon Trustor collect and apply such proceeds set forth
herein.

                        (d) All deposits made with or other security given to
utility companies by Trustor with respect to the Land and/or the Improvements,
and all advance payments of insurance premiums made by Trustor with respect
thereto and claims or demands relating to insurance. Any of the foregoing
arising or acquired by Trustor after the date hereof, the Land, the
Improvements, and the other property described in subparagraphs (a), (b), (c),
and (d) of this Section 1.01 are collectively defined hereinafter as the
"Property".

                                       2

                       Hale Lane Peek Dennison and Howard
                        Attorneys and counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

                  1.02. Trustor hereby grants a security interest to Beneficiary
in all of the following described property and any and all proceeds thereof
(sometimes all of such being collectively referred to herein as the
"Collateral"):

                       (a) all existing and future goods and tangible personal
property located on the Property or wherever located now owned or hereafter
acquired by Trustor and used in connection with the use, operation or occupancy
of the Property or in construction of the Improvements, including, but not
limited to, all appliances, furniture and furnishings, fittings, materials,
supplies, equipment and fixtures, and all building material, supplies, and
equipment now or hereafter delivered to the Property and installed or used or
intended to be installed or used therein; and all renewals or replacements
thereof or articles in substitution thereof;

                       (b) all general intangibles relating to design,
development, operation, management and use of the Property (except, with respect
to Casino Licenses, as prohibited by Applicable Gaming Laws), including, but not
limited to, (i) all names under which or by which the Property or the
Improvements may at any time be operated or known, all rights to carry on
business under any such names or any variant thereof, and all goodwill in any
way relating to the Property, (ii) all permits, licenses, authorizations,
variances, land use entitlements, approvals and consents issued or obtained in
connection with the construction of the Improvements, (iii) all permits,
licenses, approvals, consents, authorizations, franchises and agreements issued
or obtained in connection with the construction of the Improvements, or the use,
occupancy or operation of the Property, excluding, however, any Casino Licenses,
(iv) all materials prepared for filing or filed with any governmental agency,
and (v) all of Trustor's rights under any contract in connection with the
development, design, use, operation, management and construction of the
Property;

                       (c) all service, engineering, consulting, leasing,
architectural and other similar contracts of any nature (including, without
limitation, those of any general contractors and subcontractors), as such may be
modified, amended or supplemented from time to time, concerning the design,
construction, management, operation, occupancy, use, and/or disposition of any
portion of or all of the Property;

                       (d) all architectural drawings, plans, specification,
soil tests, feasibility studies, appraisals, engineering reports and similar
materials relating to any portion of or all of the Property;

                       (e) all payment and performance bonds or guarantees and
any and all modifications and extensions thereof relating to the Property;

                       (f) all reserves, deferred payments, deposits, refunds,
cost savings and payments of any kind relating to the construction, design,
development, operation, occupancy, use and disposition of any portion of or all
of the Property;

                                       3

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

                       (g) to the extent permitted to be assigned by Trustor,
all proceeds of any commitment by any lender to extend permanent or additional
construction financing to Trustor relating to the Property;

                       (h) all proceeds and claims arising on account of any
damage to or taking of the Property or any part thereof, and all causes of
action and recoveries for any loss or diminution in the value of the Property;

                       (i) all policies of, and proceeds resulting from,
insurance relating to the Property or any of the above collateral, and any and
all riders, amendments, extensions, renewals, supplements or extensions thereof,
and all proceeds thereof;

                       (j) all of the Trustor's right, title and interest in, to
and under the following:

                           (i)  that certain Roma Corporation Franchise
Agreement dated October 23, 1986, entered into by and between Roma Corporation,
a Nevada corporation, and Zante, Inc., a Nevada corporation; and

                           (ii) that certain Master License Agreement dated
April 18, 2000, entered into by and between Pizza Hut, Inc., and Zante, Inc., a
Nevada corporation; and

                       (k) all proceeds, whether cash, promissory notes,
contract rights, or otherwise, of the sale or other disposition of all or any
part of the estate of Trustor in and to the Property now or hereafter existing
thereon.

                  The personal property in which Beneficiary has a security
interest includes goods which are or shall become fixtures on the Property. This
Deed of Trust is intended to serve as a fixture filing pursuant to the terms of
the Nevada Uniform Commercial Code. This filing is to be recorded in the real
estate records of the county in which the Property is located. In that regard,
the following information is provided:

         Name of Debtor:                    ZANTE, INC.

         Address of Debtor:                 See Paragraph 5.12

         Name of Secured Party:             NEVADA STATE BANK

         Address of Secured Party:          See Paragraph 5.12

                  Trustor warrants and agrees that there is no financing
statement covering the foregoing Collateral, the Property, or any part thereof,
on file in any public office, except for those

                                       4

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

in favor of Beneficiary.

                  1.03. Trustor hereby assigns and transfers to Beneficiary, as
additional security, all damages, royalties and revenue of every kind, nature
and description whatsoever that Trustor may be entitled to receive from any
person or entity owning or having or hereafter acquiring a right to the oil, gas
or mineral rights and reservations of the Property, with the right in
Beneficiary to receive and receipt therefor, and apply the same to the
indebtedness secured hereby either before or after any default hereunder, and
Beneficiary may demand, sue for and recover any such payments but shall not be
required to do so.

         B.       Definitions of Certain Terms.

                  1.04.    As used herein, the following words or terms shall
have the following meanings:

                           "Applicable Gaming Laws" has the meaning set forth in
Recital C above.

                           "Casino" means a gaming establishment owned, directly
or indirectly, by Trustor and any hotel, building, restaurant, theater,
amusement park, other entertainment facility, parking facilities, retail shops,
land, equipment and other property asset directly ancillary thereto and used or
to be used in connection therewith.

                           "Casino License" means any material license,
franchise or other approval or authorization required to own, lease or operate a
Casino, or otherwise conduct gaming in any jurisdiction in which Trustor
conducts, or proposes in good faith to conduct, gaming business, including any
applicable liquor license.

                           "Gaming Authorities" has the meaning set forth in
Recital C above.

                           "Gaming Equipment" means all equipment and supplies
used in the operation of a Casino, including, without limitation, slot machines,
gaming tables, cards, dice, gaming chips, player tracking systems, and all other
gaming devices (as defined in NRS 463.0155), cashless wagering systems (as
defined in NRS 463.014) and associated equipment (as defined in NRS 463.0136)

         C.       Obligations Secured.

                  1.05.    This Deed of Trust is given for the purpose of
securing, in such order of priority as Beneficiary may determine:

                           (a)      Payment of the indebtedness  evidenced by a
Reducing Revolving Promissory Note Secured By Deed of Trust of even date
herewith and any renewals, extensions, modifications or amendments thereof, in
the principal amount of SEVENTEEN MILLION AND

                                       5

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

NO 100/THS DOLLARS ($17,000,000.00) (the "Note"), executed by the Borrower, and
payable to Beneficiary, together with interest thereon and late charges as
provided therein, which is made a part hereof by reference. The Note contains a
provision for changes in the rate of interest charged thereunder as therein
provided.

                           (b) Payment of such further sums as Borrower,
hereafter may borrow from Beneficiary when evidenced by another note or notes,
reciting it is so secured, payable to Beneficiary or order and made by Borrower,
and all renewals, extensions, modifications or amendments of such note or notes.

                           (c) Payment of all other moneys herein agreed or
provided to be paid by Borrower or Trustor and performance of all other
obligations of Borrower or Trustor contained herein and in the Loan Agreement.

                           (d) Performance of each agreement of Trustor
contained in any other agreement given by Trustor to Beneficiary which is for
the purpose of further securing any indebtedness or obligation secured hereby.

II.      COVENANTS OF TRUSTOR.

         A.       Condition and Operation of Property.

                  2.01.    Trustor agrees (i) to keep the Property in good
condition and repair, (ii) not to commit or permit any waste or deterioration of
the Property, (iii) not to commit or permit any removal, demolition or
substantial alteration of the Property except for such alterations as may be
required by law, ordinance, rule, regulation or order of any governmental
authority having jurisdiction over the Property, except for alterations to the
Property in an amount not greater than $500,000.00, (iv) to complete in good and
workmanlike manner any construction or restoration which may be performed on the
Property and those alterations contemplated in the Loan Agreement, (v) to
promptly restore any portion of the Property which may be damaged or destroyed
and (vi) subject to the Loan Agreement, not to permit any mechanics' or
materialmen's liens against the Property, and (vii) to perform each of Trustor's
obligations set forth in the Loan Agreement.

                  2.02.    Trustor shall not commit, permit or allow to exist,
any violation of any law, ordinance, rule, regulation or order of any
governmental authority having jurisdiction over the Property or of any matter of
record affecting the Property.

                  2.03.    Trustor shall maintain, or cause to be maintained,
proper and accurate books, records and accounts reflecting all items of income
and expense in connection with the operation of the Property or in connection
with any services, equipment or furnishings provided in connection with the
operation of the Property, whether such income or expense be realized by Trustor
or by any other person or entity whatsoever excepting persons unrelated to and
unaffiliated with Trustor and who leased from Trustor portions of the Property
for the purposes of occupying the same. Upon the

                                       6

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

request of Beneficiary, Trustor shall prepare and deliver to Beneficiary such
financial statements regarding operation of the Property as Beneficiary may
reasonably request. Beneficiary, or its designee, shall have the right from time
to time during normal business hours to examine such books, records and accounts
and to make copies or extracts therefrom.

         B.       Insurance.

                  2.04.    Trustor shall, at all times, provide, maintain and
keep in force all of the following:

                           (a)      A policy or policies of commercial general
liability insurance with respect to the Property, including but not limited to
owners and contractors liability, contractual liability, personal injury,
completed operations, broad form property damage, insuring Trustor and
Beneficiary, as their interests may appear, against loss for any occurrence
resulting in bodily injury to or the death of one or more persons and
consequential damages arising therefrom and property damage involving injury or
destruction of the tangible property of third parties in the amount of no less
than $2,000,000.00, combined single limit. All policies should be on an
"occurrence" basis with Beneficiary named as an additional insured under such
policy or policies.

                           (b)      A policy or policies of builder's  risk
insurance insuring the Property against loss or damage on an "All-Risk" basis
and against such other risks or hazards as Beneficiary may from time to time
reasonably designate in the amount of not less than 100% of the full replacement
value of the Property without deduction for physical depreciation. Beneficiary
shall be named as Loss Payee under such policy or policies.

                           (c)      If requested by Beneficiary, flood insurance
upon the Property in the event that such insurance is available pursuant to the
provisions of the Flood Disaster Protection Act of 1973 or other applicable
legislation. Beneficiary shall reserve the right to require that Trustor secure
flood insurance in excess of the amount provided by the Flood Disaster
Protection Act of 1973, if such insurance is commercially available, up to the
amount provided in Paragraph 2.04(a) hereof.

                           (d)      If requested by  Beneficiary, statutory
workers' compensation insurance (including employer's liability in amounts
required by the State Industrial Insurance System and, if applicable, insurance
covering claims of workers against employers arising under Federal law) covering
Trustor and employees of Trustor, in such form as is reasonably satisfactory to
Beneficiary and in amounts not less than any minimum amounts established by law.

                           (e)      Such other insurance, and in such amounts,
as may from time to time be reasonably required by Beneficiary.

                           Such insurance policies shall be updated at
Beneficiary's request, but not less frequently than annually during the Loan
term.

                                       7

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

          2.05.  All policies required by Paragraph 2.04 shall (i) be issued by
companies duly qualified and licensed to do such business in the State of Nevada
and approved by Beneficiary, (ii) shall be subject to the reasonable approval of
Beneficiary as to the insuring companies, amount, content and forms of policies
and expiration dates, (iii) contain a Non-Contributory Standard Mortgagee Clause
and the Lender's Loss Payable Endorsement (Form 438 BFU NS), or their
equivalents, in favor of Beneficiary, (iv) provide that the proceeds thereof
shall be payable to Beneficiary (to the extent of its interest) (v) provide that
it cannot be modified or cancelled, to the extent that such modification or
cancellation substantially effects the Property, or Beneficiary's interest
thereon, without thirty days' prior written notice to Beneficiary, and (vi) be
primary and non-contributory with any other insurance of Beneficiary.

          2.06.  Trustor shall furnish to Beneficiary a certificate of each
policy required under Paragraph 2.04 and, at least thirty days prior to
expiration of any such policy, proof of issuance of a policy continuing in force
the coverage provided by the expiring policy. In the event Trustor shall fail to
maintain the insurance coverage required by this Deed of Trust, Beneficiary may
(but shall be under no obligation to) take out the required policies of
insurance and pay the premiums on the same or may make such repairs or
replacements as are necessary and provide for payment thereof; and all amounts
so advanced therefor by Beneficiary shall become an additional obligation of
Trustor to Beneficiary, which amounts, together with interest thereon at the
Default Rate (as defined and provided for in the Note), Trustor agrees to pay.

          2.07.  After the happening of any casualty insured against under
Paragraph 2.04, Trustor shall give prompt written notice thereof to Beneficiary.

          2.08.  Trustor hereby assigns to Beneficiary all insurance proceeds
which it may be entitled to receive and such proceeds shall be delivered to and
held by Beneficiary to be applied to the restoration of any portion of the
Property that has been damaged or destroyed to the same condition, character and
value as existed prior to such damage or destruction so long as the following
conditions have been satisfied: (i) Trustor is not in default hereunder, (ii)
Beneficiary's security is not materially impaired and (iii) Trustor deposits
with it the additional amounts necessary to accomplish such restoration. The
proceeds disbursed for restoration will be released to Trustor under the
procedures set forth in the Loan Agreement. In the event that the above
conditions are not satisfied, Beneficiary shall have the option, to apply the
insurance proceeds upon any indebtedness secured hereby in such order as
Beneficiary may determine or release such proceeds to Trustor without such
release being deemed a payment of any indebtedness secured hereby, rather than
to apply such proceeds to the restoration of the Property. Such application or
release shall not cure or waive any default or notice of default hereunder or
invalidate any act done pursuant to such notice. If the Property is restored at
a cost less than the available insurance proceeds, then such excess proceeds
shall, if Trustor is not then in default hereunder, be paid over to Trustor.

          2.09.  In the event of the foreclosure of this Deed of Trust or other
transfer of the title to the Property in extinguishment, in whole or in part, of
the indebtedness secured hereby, all

                                       8

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

right, title and interest of Trustor in and to any insurance policy then in
force shall pass to the purchaser or grantee to the extent that such insurance
policy affects the Property.

     C.   Payments.

          2.10.  Trustor shall pay the principal, interest and other charges due
under the Note and the Loan Agreement according to their terms.

          2.11.  Trustor shall pay or cause to be paid:

                 (a)  Prior to the assessment of any penalty or delinquency, all
taxes, assessments and other governmental or public charges affecting the
Property, including assessments on appurtenant water stock, and any accrued
interest, cost and/or penalty thereon and shall submit paid receipt therefor to
Beneficiary upon request.

                 (b)  When due, all encumbrances (including any debt secured by
deed of trust), ground rents, liens, and/or charges, with interest, on the
Property or any part thereof which appear to be prior or superior hereto and all
costs, fees and expenses related thereto.

                 (c)  When due, all charges for utilities or services including,
but not limited to, electricity, gas, water and sewer.

          2.12.  Upon the occurrence of a default by Trustor hereunder, Trustor
shall pay to Beneficiary on the first day of each month, together with and in
addition to the regular installments of principal and interest due under the
Note, until the indebtedness secured hereby is paid in full, an amount equal to
one-twelfth (1/12) of the yearly taxes and assessments, insurance premiums,
lease rentals and other similar charges (including any amounts which may become
payable by Trustor pursuant to Paragraph 2.28 hereinbelow) as estimated by
Beneficiary to be sufficient to enable Beneficiary to pay at least thirty (30)
days before they become due, all taxes, assessments, insurance premiums, and
other similar charges against the Property. Beneficiary shall not be obligated
to pay interest on any such sums. Upon demand of Beneficiary, Trustor shall
deliver to Beneficiary such additional sums as are necessary to enable
Beneficiary to pay such taxes, assessments, insurance premiums and similar
charges.

          2.13.  Trustor shall pay immediately, upon demand, after expenditure,
all sums expended or expenses incurred by Trustee and/or Beneficiary under any
of the terms of this Deed of Trust, including without limitation, any fees and
expenses (including reasonable attorneys' fees) incurred in connection with any
reconveyance of the Property or any portion thereof, or to compel payment of the
Note or any portion of the indebtedness evidenced thereby or in connection with
any default thereunder, including without limitation attorneys' fees incurred in
any bankruptcy or judicial or nonjudicial foreclosure proceeding, with interest
from date of expenditure at the Interest Rate provided for in the Note.

                                       9

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

          2.14.  Trustor shall pay the amount demanded by Beneficiary or its
authorized servicing agent for any statement regarding the obligations secured
hereby; provided, however, that such amount may not exceed the maximum amount
allowed by law at the time request for the statement is made.

     D.   Condemnation.

          2.15.  If the Property, or any part thereof, is taken or damaged by
reason of any public improvement or condemnation proceeding, or in any other
manner, Beneficiary shall be entitled to all compensation, awards and other
payments or relief therefor to which Trustor shall be entitled, and shall be
entitled at its option to commence, appear in and prosecute in its own name any
action or proceeding or to make any compromise or settlement in connection with
such taking or damage to the extent of the interests of Trustor therein. All
such compensation, awards, damages, rights of action and proceeds to which
Trustor shall be entitled (the "Proceeds") are hereby assigned to Beneficiary,
who shall after deducting therefrom all its reasonable expenses, including
attorneys' fees, apply or release the Proceeds with the same effect and as
provided in Paragraph 2.08 above with respect to disposition of insurance
proceeds; provided, that if there are any excess Proceeds after application
thereof to the restoration of the Property, Beneficiary shall be entitled to
apply such excess to the reduction of the principal balance due under the Note
without any adjustment in the dollar amount of the monthly installments due
under the Note. Trustor agrees to execute such further assignments of the
Proceeds as Beneficiary or Trustee may require. Nothing herein contained shall
prevent the accrual of interest as provided in the Note on any portion of the
Proceeds to be applied to the principal balance due under the Note until the
Proceeds are received by Beneficiary.

     E.   Rents and Leases.

          2.16.  Subject to the provisions of the Loan Agreement, Trustor shall
submit to Beneficiary for its prior written approval the form of the tenant
lease to be used by Trustor for leasing any portion of the Improvements, and
after approval by Beneficiary in accordance with the Loan Agreement, shall not
materially modify such form of lease without the prior written consent of
Beneficiary. Trustor shall not accept prepayments of rent for any period in
excess of one month and shall perform all covenants of the Lessor under all
leases affecting the Property ("Leases"). "Leases", as used herein, includes any
extensions or renewals thereof and any amendments consented to by the
Beneficiary. Trustor shall not amend or terminate any Leases without the prior
written consent of Beneficiary and shall not consent to any assignment or
subletting under any Leases without the prior written consent of Beneficiary.
Trustor shall immediately give notice to Beneficiary of any default under any of
the Leases it receives or delivers. Beneficiary shall have the right but not the
obligation, to cure any default of Trustor under any of the Leases and all
amounts disbursed in connection with said cure shall be deemed to be
disbursements under the Loan Agreement.

          2.17.  Each lease of any portion of the Improvements shall be
absolutely subordinate to the lien of this Deed of Trust but shall contain a
provision satisfactory to Beneficiary that in the

                                       10

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

event of the exercise of the private power of sale or a judicial foreclosure
hereunder such lease, at the option of the purchaser at such sale, shall not be
terminated and the tenant thereunder shall attorn to such purchaser and, if
requested to do so, shall enter into a new lease for the balance of the term of
such lease then remaining upon the same terms and conditions. Each such lease
shall, at the request of Beneficiary, be assigned to Beneficiary and each such
assignment shall be recorded and acknowledged by the tenant thereunder.

          2.18.  Notwithstanding anything to the contrary contained herein, but
subject to Applicable Gaming Laws as of the execution of this Deed of Trust, or
as amended from time to time, Trustor hereby absolutely and unconditionally
assigns and transfers to Beneficiary all the leases, income, rent, issues,
deposits, profits and proceeds of the Property to which Trustor may be entitled,
whether now due, past due or to become due, and hereby gives to and confers upon
Beneficiary the right, power and authority to collect such income, rents,
issues, deposits, profits and proceeds of the Property to which Trustor may be
entitled, whether now due, past due or to become due. The assignment of the
Leases constitutes an irrevocable direction and authorization of all tenants
under the Leases to pay all rent, income and profits into an account specified
by Beneficiary upon demand and without further consent or other action by
Trustor. Trustor irrevocably appoints Beneficiary its true and lawful attorney,
at the option of Beneficiary at any time, to demand, receive and enforce
payment, to give receipts, releases, and satisfactions, and to sue, either in
the name of Trustor or in the name of Beneficiary, for all such income, rents,
issues, deposits, profits and proceeds and apply the same to the indebtedness
secured hereby. It is understood and agreed that neither the foregoing
assignment of leases, income, rents, issues, deposits, profits and proceeds to
Beneficiary nor the exercise by Beneficiary of any of its rights or remedies
under this Paragraph 2.18 or under Paragraph 2.28 hereof shall be deemed to make
Beneficiary a "mortgagee-in-possession" or otherwise responsible or liable in
any manner with respect to the Property or the use, occupancy, enjoyment or
operation of all or any portion thereof. Notwithstanding anything to the
contrary contained herein or in the Note secured hereunder, so long as no Event
of Default, as defined in the Loan Agreement shall have occurred, Trustor shall
have a license to collect all income, rents, issues, profits and proceeds from
the Property as trustee for the benefit of Beneficiary and Trustor shall apply
the funds so collected as set forth in the Loan Agreement. Upon the occurrence
of an Event of Default, such license shall be deemed revoked and any rents
received thereafter by Trustor shall be delivered in kind to Beneficiary.
Trustor hereby irrevocably constitutes and appoints Beneficiary its true and
lawful attorney-in-fact to enforce in Trustor's name or in Beneficiary's name or
otherwise all rights of Trustor in the instruments, including without limitation
checks and money orders, tendered as payments of rents and to do any and all
things necessary and proper to carry out the purposes hereof.

                                       11

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

     F.   Other Rights and Obligations.

          2.19.  In addition to any other grant, transfer or assignment
effectuated hereby, without in any manner limiting the generality of the grants
in Article I hereof, Trustor shall assign to Beneficiary Trustor's interest in
all agreements, contracts, leases, licenses (excluding Casino Licenses), and
permits affecting the Property in any manner whatsoever, such assignments to be
made, if so requested by Beneficiary, by instruments in form satisfactory to
Beneficiary but no such assignment shall be construed as a consent by
Beneficiary to any agreement, contract, license or permit so assigned, or to
impose upon Beneficiary any obligations with respect thereto.

          2.20.  In the event of the passage, after the date of this Deed of
Trust, of any law deducting from the value of the Property for the purpose of
taxation, any lien thereon, or changing in any way the laws now in force for the
taxation of deeds of trust or debts secured by deeds of trust, or the manner of
the collection of any such taxes, so as to affect this Deed of Trust, or
imposing payment of the whole or any portion of any taxes, assessments or other
similar charges against the Property upon the Beneficiary, the indebtedness
secured hereby shall immediately become due and payable at the option of the
Beneficiary; provided, however, that such election by Beneficiary shall be
ineffective if such law either (a) shall not impose a tax upon Beneficiary nor
increase any tax now payable by Beneficiary or (b) shall impose a tax upon
Beneficiary or increase any tax now payable by Beneficiary and prior to the due
date: (i) Trustor is permitted by law and can become legally obligated to pay
such tax or the increased portion thereof (in addition to all interest,
additional interest and other charges payable hereunder and under the Note
without exceeding the applicable limits imposed by the usury laws of the State
of Nevada); (ii) Trustor does pay such tax or increased portion; and (iii)
Trustor agrees with Beneficiary in writing to pay, or reimburse Beneficiary for
the payment of, any such tax or increased portion thereof when thereafter levied
or assessed against the Property or any portion thereof. The obligations of
Trustor under such agreement shall be secured hereby.

          2.21.  If required by Beneficiary at any time during the term of this
Deed of Trust, Trustor will execute and deliver to Beneficiary, in form
satisfactory to Beneficiary, an additional security agreement and/or financing
statement covering all personal property of Trustor which may at any time be
furnished, placed on, or annexed or made appurtenant to the Property and used,
useful or held for use, in the operation of the improvements thereon. Any breach
of or default under such security agreement shall constitute an event of default
under this Deed of Trust.

          2.22.  Trustor shall do any and all acts which, from the character or
use of the Property or the Collateral, may be reasonably necessary to protect
and preserve the security of Beneficiary, the specific enumerations herein not
excluding the general.

          2.23. Trustor will faithfully perform each and every covenant to be
performed by Trustor under any lien or encumbrance upon or affecting the
Property, including, without limiting the generality hereof, mortgages, deeds of
trust, leases, declaration of covenants, easements, conditions and/or
restrictions and other agreements which affect the Property, in law or in
equity,

                                       12

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

which Beneficiary reasonably believes may be prior and superior to the lien or
charge of this Deed of Trust. A breach of or a default under any such lien or
encumbrance shall constitute an event of default under this Deed of Trust.

          2.24.  Upon election of either Beneficiary or Trustee so to do,
employment of an attorney is authorized and payment by Trustor of all attorneys'
fees, costs and expenses in connection with any action and/or actions (including
the cost of evidence or search of title), which may be brought for the
foreclosure of this Deed of Trust, and/or for possession of the property covered
hereby, and/or for the appointment of a receiver, and/or for the enforcement of
any covenant or right in this Deed of Trust contained as hereinafter provided
shall be secured hereby.

          2.25.  No personal property covered by the security interest granted
herein may be removed from the Property without the prior written consent of
Beneficiary unless Trustor shall immediately replace such personal property with
similar property of equivalent value on which Beneficiary has a valid first
lien.

          2.26.  Except for leases of portions of the Property in the ordinary
course of business, in the event that the interest of Trustor in the Property,
or any part thereof, or any interest therein is sold, conveyed, alienated,
further encumbered or otherwise transferred by the Trustor, voluntarily or
involuntarily, whether by operation of law or otherwise, the Note, irrespective
of the maturity dates expressed therein, at the option of Beneficiary, and
without demand or notice, shall immediately become due and payable. In the event
that Beneficiary does not elect to declare the Note immediately due and payable,
then, unless indicated otherwise in writing by Beneficiary, Trustor shall
nevertheless remain primarily liable for the obligations hereunder and under the
Note and any other instrument securing the Note. This provision shall apply to
each and every sale, conveyance, alienation, encumbrance or transfer, regardless
whether or not Beneficiary has consented to, or waived, Beneficiary's rights
hereunder, whether by action or non-action in connection with any previous sale,
conveyance, alienation, encumbrance or transfer and whether or not the holder
has received any payments after said transfer.

          2.27.  Trustor agrees to execute such documents and take such action
as Beneficiary shall reasonably determine to be necessary or desirable to
further evidence, perfect or continue the perfection of the lien and security
interest granted by Trustor herein.

          2.28.  Following a ten (10) day written notice to Trustor (unless
Beneficiary reasonably determines that emergency circumstances exist which would
make the giving of such notice impractical), at the time and in the manner
herein provided, Beneficiary may, without releasing Trustor from any obligation
hereunder and without waiving its right to declare a default or impairing any
declaration of default as herein provided or any sale proceeding predicated
thereon:

                 (a)  Make any payment or perform any act in such manner and to
such extent as either may deem necessary to protect the security hereof,
Beneficiary and Trustee being authorized to enter upon and take possession of
the Property for such purposes;

                                       13

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

                 (b)  Commence, appear in and/or defend (except for any action
commenced by Beneficiary) any action or proceedings purporting to affect the
security hereof, and/or any additional or other security therefor, the
interests, rights, powers and/or duties of Trustee and/or Beneficiary hereunder,
whether brought by or against Trustor, Trustee or Beneficiary (Trustor shall
also have the right to appear in or defend any such action and Trustor and
Beneficiary shall reasonably cooperate in any action or proceeding in which
their interests are the same or similar);

                 (c)  Pay, purchase, contest or compromise any claim, debt,
lien, charge or encumbrance which in the judgment of either may affect or appear
to affect the security of this Deed of Trust, the interest of Beneficiary or the
rights, powers and/or duties of Trustee and/or Beneficiary hereunder; and

                 (d)  Upon an event of default hereunder or under the Note,
Beneficiary is authorized either by itself or by its agents to be appointed by
it for that purpose or by a receiver appointed by a court of competent
jurisdiction, to enter into and upon and take and hold possession of any portion
or all of the Property, both real and personal, and exclude Trustor and all
other persons therefrom; and to operate and manage the Property and rent and
lease the same, perform such reasonable acts of repair or protection as may be
reasonably necessary or proper to conserve the value thereof, and collect any
and all income, rents, issues, profits and proceeds therefrom, the same being
hereby assigned and transferred to Beneficiary for the benefit and protection of
Beneficiary, and from time to time apply and/or accumulate such income, rents,
issues, profits and proceeds in such order and manner as Beneficiary or such
receiver in its sole discretion shall consider advisable, to or upon the
following: the expense of receivership, if any, the proper costs of upkeep,
maintenance, repair and/or operation of the Property, the repayment of any sums
theretofore or thereafter advanced pursuant to the terms of this Deed of Trust
upon the indebtedness secured hereby, the taxes and assessments upon the
Property then due or next to become due, and/or upon the unpaid principal of
such indebtedness. The collection and/or receipt of income, rents, issues,
profits and/or proceeds from the Property by Beneficiary, its agent or receiver,
after declaration of default and election to cause the Property to be sold under
and pursuant to the terms of this Deed of Trust shall not affect or impair such
default or declaration of default or election to cause the Property to be sold
or any sale proceedings predicated thereon, but such proceedings may be
conducted and sale effected notwithstanding the receipt and/or collection of any
such income, rents, issues, profits and/or proceeds. Any such income, rents,
issues, profits and/or proceeds in the possession of Beneficiary, its agent or
receiver, at the time of sale and not theretofore applied as herein provided,
shall be applied in the same manner and for the same purposes as the proceeds of
the sale. Neither Trustee nor Beneficiary shall be under any obligation to make
any of the payments or do any of the acts referred to in this Paragraph and any
of the actions referred to in this Paragraph may be taken by Beneficiary
irrespective of whether any notice of default or election to sell has been given
hereunder and without regard to the adequacy of the security for the
indebtedness evidenced by the Note.

III.     DEFAULTS AND REMEDIES.

                                       14

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

     A.   Defaults.

          3.01.  Trustor shall be in default hereunder upon the breach of any
covenant or warranty contained herein, or if an Event of Default shall have
occurred and be continuing under the Loan Agreement, the Note, or any other
obligation secured hereby, subject to any applicable notice requirement and
opportunity to cure.

     B.   Remedies.

          3.02.  Upon the occurrence of any default hereunder, or under the
Note, the Loan Agreement or any other documents executed in connection herewith,
then and in each such event, Beneficiary may declare all sums secured hereby
immediately due and payable either by commencing an action to foreclose this
Deed of Trust as a mortgage, or by the delivery to Trustee of a written
declaration of default and demand for sale and of written notice of default and
of election to cause the Property to be sold, which notice Trustee shall cause
to be duly filed for record in case of foreclosure by exercise of the power of
sale herein. Should Beneficiary elect to foreclose by exercise of the power of
sale herein, Beneficiary shall also deposit with Trustee this Deed of Trust, the
Note and such receipts and evidence of expenditures made and secured hereby as
Trustee may require, and notice of sale having been given as then required by
law and after lapse of such time as may then be required by law after
recordation of such notice of default, Trustee, without demand on Trustor, shall
sell the Property at the time and place of sale fixed by it in said notice of
sale, either as a whole or in separate parcels, and in such order as it may
determine, at public auction to the highest bidder for cash in lawful money of
the United States, payable at time of sale. Trustee may postpone sale of all or
any portion of the Property by public announcement at such time and place of
sale, and from time to time thereafter may postpone such sale by public
announcement at the time fixed by the preceding postponement. Trustee shall
deliver to such purchaser its deed or deeds conveying the Property, or any
portion thereof, so sold, but without any covenant or warranty, express or
implied. The recitals in such deed or deeds of any matters or facts, shall be
conclusive proof of the truthfulness thereof. Any person, including Trustor,
Trustee or Beneficiary, may purchase at such sale.

          3.03.  Beneficiary, from time to time before Trustee's sale, may
rescind any such notice of breach or default and of election to cause the
Property to be sold by executing and delivering to Trustee a written notice of
such rescission, which notice, when recorded, shall also constitute a
cancellation of any prior declaration of default and demand for sale. 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 of default and demand for sale, and notices of
breach or default, and of election to cause the Property to be sold to satisfy
the obligations hereof, nor otherwise affect any provision, agreement, covenant
or condition of the Note, the Loan Agreement and/or of this Deed of Trust or any
of the rights, obligations or remedies of the parties hereunder.

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                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

          3.04.  After deducting all costs, fees and expenses of Trustee and of
this Trust, including the cost of evidence of title in connection with sale and
attorneys' fees, Trustee shall apply the proceeds of sale as required by
applicable law.

          3.05.  If Beneficiary at any time holds additional security for any
obligations secured hereby, it may enforce the terms hereof or otherwise realize
upon the same, at its option, either before or concurrently herewith or after a
sale is made hereunder, and may apply the proceeds upon the indebtedness secured
hereby without affecting the status of or waiving any right to exhaust all or
any other security, including the security hereunder, and without waiving any
breach or default or any right or power whether exercised hereunder or contained
herein or in any such other security.

          3.06.  No remedy herein conferred upon or reserved to Trustee or
Beneficiary is intended to be exclusive of any other remedy herein or by law
provided or permitted, but each shall be cumulative and shall be in addition to
every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute. Every power or remedy given by this instrument to Trustee
or Beneficiary or to which either of them may be otherwise entitled, may be
exercised concurrently or independently, from time to time and as often as may
be deemed expedient by Trustee or Beneficiary and either of them may pursue
inconsistent remedies.

          3.07.  Subject to any notice requirement and opportunity to cure
contained herein, in the event of a default hereunder, Beneficiary, as a matter
of right and without notice to Trustor or anyone claiming under it, and without
regard to the then value of the Property or the interest of Trustor therein,
shall have the right to apply to any court having jurisdiction to appoint a
receiver or receivers of the Property, and Trustor hereby irrevocably consents
to such appointment and waives notice of any application therefor. Any such
receiver or receivers shall have all the usual powers and duties of receivers in
like or similar cases and all the powers and duties of Beneficiary in case of
entry as provided herein and shall continue as such and exercise all such powers
until the date of confirmation of sale of the Property unless such receivership
is sooner terminated.

          3.08.  Beneficiary and Trustee acknowledge, understand and agree that,
to the extent the prior approval of the Gaming Authorities of the State of
Nevada is required pursuant to applicable law for the exercise, operation and
effectiveness of any remedy hereunder or under any other Loan Document (as
defined in the Loan Agreement), or the taking of any action that may be taken by
Beneficiary or Trustee hereunder or under any other Loan Document, including
without limitation the taking of possession and disposition of collateral
consisting of gaming devices, cashless wagering systems and associated equipment
(as those terms are defined in Nevada Revised Statutes 463.0155, 463.014 and
463.0136), such remedy or action shall be subject to such prior approval of the
Gaming Authorities of the State of Nevada and the Beneficiary or Trustee may be
subject to being called forward for licensing or a finding of suitability. All
rights, remedies and powers provided in this Deed of Trust may be exercised only
to the extent that the exercise thereof does not violate any provision of
Applicable Gaming Laws, and all provisions of this Deed of Trust are intended to
be subject to all mandatory provisions of the Applicable Gaming Laws, which may
be controlling.

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                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

          3.09.  All rights, remedies and powers in this Deed of Trust may be
exercised only to the extent that the exercise thereof does not violate any
provision of the Applicable Gaming Laws, and all the provisions of this Deed of
Trust are intended to be subject to all mandatory provisions of the Applicable
Gaming Laws which may be controlling.

IV.  COLLATERAL.

          4.01.  With respect to the security interest granted in paragraph
1.02, Beneficiary shall have all the rights and remedies granted to a secured
party under Article 9 of the Uniform Commercial Code, as well as all other
rights and remedies available at law or in equity; provided that Beneficiary
shall first apply for and receive all required approvals of the Gaming
Authorities having jurisdiction over the sale and disposition of Gaming
Equipment prior to the sale or disposition thereof. Trustor shall, upon the
demand of Beneficiary, assemble all of such personal property and make it
available to Beneficiary at the Property, which is hereby agreed to be
reasonably convenient to Beneficiary. The proceeds of any sale of such personal
property shall be applied first to the expenses of Beneficiary in retaking,
holding, preparing for sale, selling or similar matters, including reasonable
attorney's fees.

          4.02.  Until Beneficiary exercises its right to collect proceeds of
the Collateral pursuant hereto, Trustor will collect with diligence any and all
proceeds of the Collateral. Upon written request by Beneficiary, any proceeds
received by Trustor shall be in trust for Beneficiary, and Trustor shall keep
all such collections separate and apart from all other funds and property so as
to be capable of identification as the property of Beneficiary and shall deliver
such collections at such time as Beneficiary may request to Beneficiary in the
identical form received, properly endorsed or assigned when required to enable
Beneficiary to complete collection thereof.

          4.03.  Trustor shall (i) permit representatives of Beneficiary to
inspect the Collateral and Trustor's books and records relating to the
Collateral and make extracts therefrom and to arrange for verification of the
amount of Collateral, under procedures acceptable to Beneficiary, at Trustor's
expense; (ii) promptly notify Beneficiary of any attachment or other legal
process levied against any of the Collateral and any information received by
Trustor relative to the Collateral, Trustor's debtors or other persons obligated
in connection therewith, which may in any way affect the value of the Collateral
or the rights and remedies of Beneficiary in respect thereto; (iii) reimburse
Beneficiary upon demand for any and all costs, including without limitation
reasonable attorneys' and accountants' fees, and other expenses incurred in
collecting any sums payable by Trustor under any obligation secured hereby, or
in the checking, handling and collection of the Collateral and the preparation
and enforcement of any agreement relating thereto; (iv) notify Beneficiary of
each location at which the Collateral is or will be kept, other than for
temporary processing, storage or similar purposes, and of any removal thereof to
a new location, including without limitation each office of Trustor at which
records relating to the Collateral are kept; (v) provide, maintain and deliver
to Beneficiary certificates of insurance insuring the Collateral against loss or
damage by such risks and in such amounts, forms and by such companies as
Beneficiary may require and with loss payable to Beneficiary, and in the event
Beneficiary takes possession of the Collateral, the insurance

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                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

policy or policies and any unearned or returned premium thereon shall at the
option of Beneficiary become the sole property of Beneficiary; (vi) do all acts
necessary to maintain, preserve and protect all Collateral, keep all Collateral
in good condition and repair and prevent any waste or unusual or unreasonable
depreciation thereof; and (vii) join with Beneficiary at its request from time
to time in executing financing statements, amendments thereto and continuation
statements, and pay the cost of the filing of the same whenever Beneficiary
deems desirable, and execute and deliver to Beneficiary further documents and
instruments and do such other acts and things as Beneficiary may reasonably
request in order to effectuate fully the purposes and intent hereof. Trustor
hereby authorizes Beneficiary to file financing statements, amendments, and
continuation statements in such filing offices as Beneficiary may determine
appropriate in connection with the security interest granted herein. Trustor
hereby authorizes Beneficiary to file financing statements, amendments, and
continuation statements in such filing offices as Beneficiary may determine
appropriate in connection with the security interest granted herein.

         4.04. Beneficiary may at any time, without prior notice to Trustor,
collect proceeds of the Collateral and may give notice of assignment to any and
all of Trustor's debtors, and Trustor does hereby irrevocably constitute and
appoint Beneficiary its true and lawful attorney-in-fact to enforce in Trustor's
name or in Beneficiary's name or otherwise all rights of Trustor in the
Collateral and to do any and all things necessary and proper to carry out the
purposes hereof; provided, however, Trustor shall have the right to collect,
retain, use and enjoy such proceeds subject to the terms hereof and the
documents securing Trustor's obligations thereunder prior to any default under
the Loan Agreement or any of said documents. It is hereby recognized that the
power of attorney herein granted is coupled with an interest and shall not be
revocable and Beneficiary shall have the right to exercise this power of
attorney upon any default under the Loan Agreement, hereunder or any of the
documents securing Trustor's obligations thereunder. (Beneficiary shall promptly
notify Trustor of any action taken by Beneficiary pursuant to this provision but
Beneficiary's failure to do so shall not invalidate any such act, affect any of
Trustor's obligations to Beneficiary or give rise to any right, claim or defense
on the part of Trustor).

V.  MISCELLANEOUS PROVISIONS.

         5.01. By accepting payment of any sum secured hereby after its due date
or in an amount less than the sum due, Beneficiary does not waive its rights
either to require prompt payment when due of all other sums so secured or to
declare a default as herein provided for failure to pay the total sum due.

         5.02. At any time, or from time to time, without liability therefor and
without notice, upon written request of Beneficiary and presentation of this
Deed of Trust and the Note for endorsement, and without affecting the personal
liability of any person for payment of the indebtedness secured hereby or the
effect of this Deed of Trust upon the remainder of the Property, Trustee may:
reconvey any part of the Property; consent in writing to the making of any map
or plat thereof; join in granting any easement thereon; or join in any extension
agreement or any agreement subordinating the lien or charge hereof.

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                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

         5.03. Beneficiary shall be subrogated for further security to the lien,
although released of record, of any and all encumbrances paid out of the
proceeds of the loan secured by this Deed of Trust.

         5.04. Beneficiary is authorized by itself, its agents, employees or
workmen, to enter at any reasonable time upon any part of the Property for the
purpose of inspecting the same, and for the purpose of performing any of the
acts it is authorized to perform under the terms of the Loan Agreement and this
Deed of Trust.

         5.05. Subject to the provisions of Paragraph 2.26 hereof, this Deed of
Trust applies to, inures to the benefit of, and binds all parties hereto, their
heirs, legatees, devisees, administrators, executors, successors and assigns.
The term "Beneficiary" shall mean the owner and holder, including pledgees, of
the Note, now or hereafter and whether or not named as Beneficiary herein. In
this Deed of Trust, whenever the context so requires, the masculine gender
includes the feminine and/or neuter, and the singular number includes the
plural.

         5.06. Trustee, upon presentation to it of an affidavit signed by or on
behalf of Beneficiary, setting forth any fact or facts showing a default by
Trustor under any of the terms or conditions of this Deed of Trust, is
authorized to accept as true and conclusive all facts and statements in such
affidavit and to act hereunder in complete reliance thereon.

         5.07. If any provision hereof should be held unenforceable or void,
then such provision shall be deemed separable from the remaining provisions and
shall in no way affect the validity of this Deed of Trust.

         5.08. Trustee accepts this Trust when this Deed of Trust, duly executed
and acknowledged, is made a public record as provided by law. The Trust created
hereby is irrevocable by Trustor.

         5.09. Trustee shall be under no obligation to notify any party hereto
of any action or proceeding of any kind in which Trustor, Beneficiary and/or
Trustee shall be a party, unless brought by Trustee, or of any pending sale
under any other deed of trust.

         5.10. Beneficiary may, from time to time, by a written instrument
executed and acknowledged by Beneficiary and recorded in the county or counties
where the Property is located, substitute a successor or successors for the
Trustee named herein or acting hereunder.

         5.11. The right to plead any and all statutes of limitation as a
defense to any demand secured by this Deed of Trust is hereby waived to the full
extent permitted by law.

         5.12. All notices hereunder shall be deemed to have been duly given if
personally delivered or mailed by United States registered or certified mail,
with return receipt requested,

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                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

postage prepaid to the parties at the following addresses (or at such other
addresses as shall be given in writing upon any party to the others) and shall
be deemed complete upon any such mailing:

         To Trustor:           Zante, Inc.
                               345 N. Arlington
                               Reno, Nevada 89501

         To Beneficiary:       Nevada State Bank
                               P.O. Box 2351
                               Reno, Nevada 89505

              5.13. Trustor requests that a copy of any notice of default and of
any notice of sale hereunder be mailed to Trustor at the address set forth
above.

              5.14. Upon written request of Beneficiary stating that all sums
secured hereby have been paid and upon surrender to Trustee of this Deed of
Trust and the Note for cancellation and retention and upon payment of its fees,
Trustee shall reconvey, without warranty, the Property then held hereunder. 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 thereto."

              5.15. Without affecting the liability or obligations of any
person, including Trustor, for the performance of any obligations secured hereby
(excepting only any person or property otherwise expressly released in writing
by Beneficiary), Beneficiary may from time to time and without notice release
any person liable for payment of any of said indebtedness or the performance of
said obligations, extend the time of payment or otherwise alter the terms of any
of said obligations, accept additional security therefor of any kind, including
trust deeds or mortgages, or alter, substitute or release any property securing
said obligations.

              5.16. The provisions of this Deed of Trust governing the
contractual rights and obligations of Trustor, Beneficiary and Trustee shall be
construed according to the laws of the State of Nevada. Notwithstanding anything
to the contrary contained herein, this Deed of Trust is subject to the
Applicable Gaming Laws of the State of Nevada. Beneficiary and Trustee each
agrees to cooperate with the Gaming Authorities of the State of Nevada in
connection with the administration of their regulatory jurisdiction over
Trustor, including the provision of such documents and other information as may
be requested by the Gaming Authorities of the State of Nevada relating to
Trustor or the Loan Documents. The provisions of this Deed of Trust are intended
to be supplemental and in addition to the provisions contained in the Loan
Agreement. Any assignment of this Deed of Trust shall be considered an
assignment of the Note and the Loan Agreement.

              5.17. Regulatory Matters. Whenever in this Deed of Trust a right
is given to Beneficiary, which right is affected by Applicable Gaming Laws or
the enforcement of which is subject to Applicable Gaming Laws, the enforcement
of any such right shall be subject to Applicable

                                       20

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

Gaming Laws and approval, if so required, of the applicable Gaming Authorities.
Without limiting the generality of the foregoing, Beneficiary acknowledges that
(a) Beneficiary is subject to being called forward by the Gaming Authority of
the State of Nevada, in their discretion, for licensing or a finding of
suitability as a lender to a gaming licensee, and (b) to the extent the prior
approval of the Gaming Authority of the State of Nevada is required pursuant to
applicable law for the exercise, operation and effectiveness of any remedy
hereunder or under any other Loan Document, or the taking of any action that may
be taken by Beneficiary or under any other Loan Document, such remedy or action
shall be subject to such prior approval of the Gaming Authority of the State of
Nevada.

              5.18. This Deed of Trust may be executed in counterparts, all of
which executed counterparts shall together constitute a single document.
Signature pages may be detached from the counterparts and attached to a single
copy of this document to physically form one document.

         IN WITNESS WHEREOF, Trustor has executed this Deed of Trust and
Security Agreement and Fixture Filing with Assignment of Rents as of the day
first written above.

                                  ZANTE, INC., a Nevada corporation

                                  By:    /s/ FERENC B. SZONY
                                     ------------------------------
                                             FERENC B. SZONY
                                              Its: President

                                                "Trustor"

STATE OF NEVADA   )
                  )ss.
COUNTY OF WASHOE  )

         This instrument was acknowledged before me on May 30, 2002, by
Ferenc B. Szony, as President of Zante, Inc.

                                                     Diane Y. Sanders
                                          --------------------------------------
                                          Notary Public
                                          My Commission Expires:    6/19/2002
                                                                ----------------

                                       21

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

                                   Exhibit "A"

                                Legal Description

                                       22

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                  Reno, Nevada
                                 (775) 327-3000

<PAGE>

APN No. 038-230-06 (Washoe County)
        023-100-06 (Sierra County)
WHEN RECORDED MAIL TO:
Nevada State Bank
P.O. Box 2351
Reno, Nevada 89505

                    DEED OF TRUST AND SECURITY AGREEMENT AND
                     FIXTURE FILING WITH ASSIGNMENT OF RENTS

         THIS DEED OF TRUST AND SECURITY AGREEMENT AND FIXTURE FILING WITH
ASSIGNMENT OF RENTS ("Deed of Trust") is made as of the 31st day of May, 2002,
by CALIFORNIA PROSPECTORS, LTD., a Nevada Limited Liability Company (the
"Trustor"), to WESTERN TITLE COMPANY, INC. ("Trustee"), for the benefit of
NEVADA STATE BANK ("Beneficiary").

                                    RECITALS:

         A. Pursuant to that certain Reducing Revolving Line of Credit Loan
Agreement of even date herewith and any amendment, modification or change
thereto (the "Loan Agreement") between Last Chance, Inc., a Nevada corporation,
The Sands Regent, a Nevada corporation, and Zante, Inc., a Nevada corporation,
as the borrower (collectively, the "Borrower"), and Beneficiary as lender,
Beneficiary has agreed to make a loan to Borrower on the terms and conditions
set forth therein. Unless the context otherwise requires, all capitalized words
or terms used but not otherwise defined herein shall have the meanings ascribed
thereto in the Loan Agreement.

         B. Pursuant to the Loan Agreement, the Borrower's obligations evidenced
by the Loan Agreement are required to be secured by, among other things, this
Deed of Trust.

         C. The parties acknowledge that certain provisions of this Deed of
Trust may be subject to the laws, rules and regulations (the "Applicable Gaming
Laws") of the gaming authorities (the "Gaming Authorities") of the State of
Nevada and of other governmental jurisdictions, including, but not limited to,
the Nevada State Gaming Control Board, the Nevada Gaming Commission, the City of
Reno Gaming and Liquor Board, and the California Lottery Commission.

I.       GRANTS AND OBLIGATIONS SECURED.

         A.  Grants.

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                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

         1.01. In consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Trustor hereby irrevocably grants, transfers and assigns to Trustee, in trust,
for the benefit of Beneficiary, with power of sale and right of entry and
possession, all right, title and interest of Trustor now or hereinafter existing
in and to that certain real property situated in Washoe County, Nevada, and
Sierra County, California, described in Exhibit "A" attached hereto and made a
part hereof (the "Land"), including any leasehold estate now or hereafter held
or acquired by Trustor in and to the Land under any lease relating thereto, as
the same may from time to time be supplemented, modified, amended, renewed or
extended, including that certain California Lottery Station Lease dated May 31,
2002, between Target Investments, L.L.C., a Nevada limited liability company, as
lessor, and California Prospectors, Ltd., a Nevada Limited Liability Company, as
lessee, a Memorandum of which was recorded on May 31, 2002, Official Records,
Washoe County, Nevada, as Document No. 2695044, and on May 31, 2002, Official
Records, Sierra County, California, as Document No. 2002134949 (the "Lease"),
together with all right, title and interest of Trustor therein and in and to:

               (a) All buildings and other improvements now or hereafter located
on the Land, all water and water rights (whether riparian, appropriative, or
otherwise, and whether or not appurtenant), pumps and pumping stations used in
connection therewith and all shares of stock evidencing the same, all machinery,
equipment (including Gaming Equipment (as hereinafter defined)), appliances,
furnishings, inventory, fixtures, and other property used or useable in
connection with the Land and the improvements thereon, including, but not
limited to, all storage tanks and pipelines, all gas, electric, heating,
cooling, air conditioning, refrigeration and plumbing fixtures and equipment,
which have been or may hereafter be attached or affixed in any manner to any
building now or hereafter on the Land (the "Improvements").

               (b) All the rights, rights of way, easements, licenses, profits,
privileges, tenements, hereditaments and appurtenances, now or hereafter in any
way appertaining and belonging to or used in connection with the Land and/or the
Improvements, and any part thereof or as a means of access thereto, including,
but not limited to, any claim at law or in equity, and any after acquired title
and reversion in or to each and every part of all streets, roads, highways and
alleys adjacent to and adjoining the same.

               (c) All rentals, earnings, income deposits, security deposits,
receipts, royalties, revenues, issues and profits which, after the date hereof,
and while any portion of the indebtedness secured hereby remains unpaid, may
accrue from the Land and/or the Improvements and any part thereof, subject,
however, to the right, power and authority conferred upon Trustor to collect and
apply such proceeds set forth herein.

               (d) All deposits made with or other security given to utility
companies by Trustor with respect to the Land and/or the Improvements, and all
advance payments of insurance premiums made by Trustor with respect thereto and
claims or demands relating to such insurance. Any of the foregoing arising or
acquired by Trustor after the date hereof, the Land, the

                                       2

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

Improvements, and the other property described in subparagraphs (a), (b), (c),
and (d) of this Section 1.01 are collectively defined hereinafter as the
"Property".

         1.02. Trustor hereby grants a security interest to Beneficiary in all
of the following described property and any and all proceeds thereof (sometimes
all of such being collectively referred to herein as the "Collateral"):

               (a) all existing and future goods and tangible personal property
located on the Property or wherever located now owned or hereafter acquired or
leased by Trustor and used or useable in connection with the use, operation or
occupancy of the Property including, but not limited to, all appliances,
furniture and furnishings, fittings, materials, supplies, equipment and
fixtures, and all supplies, and equipment now or hereafter delivered to the
Property and installed or used or intended to be installed or used therein; and
all renewals or replacements thereof or articles in substitution thereof;

               (b) all general intangibles relating to design, operation,
management and use of the Property (except, with respect to Casino Licenses, as
prohibited by Applicable Gaming Laws), including, but not limited to, (i) all
names under which or by which the Property or the Improvements may at any time
be operated or known, all rights to carry on business under any such names or
any variant thereof, and all goodwill, trademarks, tradenames and service marks
in any way relating to the Property, (ii) all permits, licenses, authorizations,
variances, land use entitlements, approvals and consents issued or obtained in
connection with the operation and use of the Property, (iii) all permits,
licenses, approvals, consents, authorizations, franchises and agreements issued
or obtained in connection with the use, occupancy or operation of the Property,
excluding, however, any Casino Licenses, (iv) all materials prepared for filing
or filed with any governmental agency, and (v) all of Trustor's rights under any
contract in connection with the development, design, use, operation and
management of the Property;

               (c) all service, engineering, consulting, leasing, architectural
and other similar contracts of any nature as such may be modified, amended or
supplemented from time to time, concerning the management, operation, occupancy,
use, and/or disposition of any portion of or all of the Property;

               (d) all architectural drawings, plans, specification, soil tests,
feasibility studies, appraisals, engineering reports and similar materials
relating to any portion of or all of the Property;

               (e) all reserves, deferred payments, deposits, refunds, cost
savings and payments of any kind relating to the operation, occupancy, use and
disposition of any portion of or all of the Property;

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                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

               (f) all proceeds and claims arising on account of any damage to
or taking of the Property or any part thereof, and all causes of action and
recoveries for any loss or diminution in the value of the Property;

               (g) all policies of, and proceeds resulting from, insurance
relating to the Property or any of the above collateral, and any and all riders,
amendments, extensions, renewals, supplements or extensions thereof, and all
proceeds thereof;

               (h) all of Trustor's right, title and interest in, to and under
that certain Water And Sewer Service Agreement dated December 27, 2001, entered
into by and among Prospector Gaming Enterprises, Inc., a Nevada corporation,
Target Investments, LLC, a Nevada Limited Liability Company, Stremmel Capital
Group, Ltd., a Nevada Limited Liability Company, and Last Chance, Inc., a Nevada
corporation; and

               (i) all proceeds, whether cash, promissory notes, contract
rights, or otherwise, of the sale or other disposition of all or any part of the
estate of Trustor in and to the Property now or hereafter existing thereon.

         The personal property in which Beneficiary has a security interest
includes goods which are or shall become fixtures on the Land. This Deed of
Trust is intended to serve as a fixture filing pursuant to the terms of the
Nevada Uniform Commercial Code. This filing is to be recorded in the real estate
records of the county in which the Land is located. In that regard, the
following information is provided:

     Name of Debtor:               CALIFORNIA PROSPECTORS, LTD.

     Address of Debtor:            See Paragraph 5.12

     Name of Secured Party:        NEVADA STATE BANK

     Address of Secured Party:     See Paragraph 5.12

         Trustor warrants and agrees that there is no financing statement
covering the foregoing Collateral, the Property, or any part thereof, on file in
any public office, except for those in favor of Beneficiary and those to be
released upon the recordation hereof.

         1.03. Trustor hereby assigns and transfers to Beneficiary, as
additional security, all damages, royalties and revenue of every kind, nature
and description whatsoever that Trustor may be entitled to receive from any
person or entity owning or having or hereafter acquiring a right to the oil, gas
or mineral rights and reservations of the Property, with the right in
Beneficiary to receive and receipt therefor, and apply the same to the
indebtedness secured hereby either before or after any default hereunder, and
Beneficiary may demand, sue for and recover any such payments but shall not be
required to do so.

                                       4

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

     B.  Definitions of Certain Terms.

         1.04. As used herein, the following words or terms shall have the
following meanings:

               "Applicable Gaming Laws" has the meaning set forth in Recital C
above.

               "Casino" means a gaming establishment owned, directly or
indirectly, by Trustor and any hotel, building, restaurant, theater, amusement
park, other entertainment facility, parking facilities, retail shops, land,
equipment and other property asset directly ancillary thereto and used or to be
used in connection therewith.

               "Casino License" means any material license, franchise or other
approval or authorization required to own, lease or operate a Casino or lottery
enterprise, or otherwise conduct gaming in any jurisdiction in which Trustor
conducts, or proposes in good faith to conduct, gaming business, including any
applicable liquor license.

               "Gaming Authorities" has the meaning set forth in Recital C
above.

               "Gaming Equipment" means all equipment and supplies used in the
operation of a Casino, including, without limitation, slot machines, gaming
tables, cards, dice, gaming chips, player tracking systems, and all other gaming
devices (as defined in NRS 463.0155), cashless wagering systems (as defined in
NRS 463.014) and associated equipment (as defined in NRS 463.0136)

     C.  Obligations Secured.

         1.05. This Deed of Trust is given for the purpose of securing, in such
order of priority as Beneficiary may determine:

               (a) Payment of the indebtedness evidenced by a Reducing Revolving
Promissory Note Secured By Deed of Trust of even date herewith and any renewals,
extensions, modifications or amendments thereof, in the principal amount of
SEVENTEEN MILLION AND NO 100/THS DOLLARS ($17,000,000.00 (the "Note"), executed
by the Borrower, and payable to Beneficiary, together with interest thereon,
which is made a part hereof by reference. The Note contains provisions for
changes in the rate of interest charged thereunder from time to time.

               (b) Payment of such further sums as Borrower, hereafter may
borrow from Beneficiary when evidenced by another note or notes, reciting it is
so secured, payable to Beneficiary or order and made by Borrower, and all
renewals, extensions, modifications or amendments of such note or notes.

                                       5

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

                           (c) Payment of all other moneys herein agreed or
provided to be paid by Trustor and performance of all other obligations of
Borrower or Trustor contained herein and in the Loan Agreement.

                           (d) Performance of each agreement of Trustor
contained in any other agreement given by Trustor to Beneficiary which is for
the purpose of further securing any indebtedness or obligation secured hereby.

II.      COVENANTS OF TRUSTOR.

         A.  Condition and Operation of Property.

             2.01. Trustor agrees (i) to keep the Property in good condition and
repair; (ii) not to commit or permit any waste or deterioration of the Property;
(iii) not to commit or permit any substantial removal, demolition or alteration
of the Property except for such alterations as may be required by law,
ordinance, rule, regulation or order of any governmental authority having
jurisdiction over the Property, other than as contemplated under the Lease; (iv)
to complete in good and workmanlike manner any construction or restoration which
may be performed on the Property; (v) to promptly restore any portion of the
Property which may be damaged or destroyed; (vi) subject to the Loan Agreement,
not to permit any mechanics' or materialmen's liens against the Property; and
(vii) to perform each of Trustor's obligations set forth in the Loan Agreement.

             2.02. Trustor shall not commit, permit or allow to exist, any
material violation of any law, ordinance, rule, regulation or order of any
governmental authority having jurisdiction over the Property or of any matter of
record affecting the Property.

             2.03. Trustor shall maintain, or cause to be maintained, proper and
accurate books, records and accounts reflecting all items of income and expense
in connection with the operation of the Property or in connection with any
services, equipment or furnishings provided in connection with the operation of
the Property, whether such income or expense be realized by Trustor or by any
other person or entity whatsoever excepting persons unrelated to and
unaffiliated with Trustor.

         B.  Insurance.

             2.04. Trustor shall, at all times, provide, maintain and keep in
force all of the following:

                   (a) A policy or policies of commercial general liability
insurance with respect to the Property, including but not limited to owners and
contractors liability, contractual liability, personal injury, completed
operations, and broad form property damage, insuring Trustor and Beneficiary, as
their interests may appear, against loss for any occurrence resulting in bodily
injury to or the death of one or more persons and consequential damages arising
therefrom and property damage involving injury or destruction of the tangible
property of third parties in the

                                       6

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

amount of no less than $2,000,000.00, combined single limit. All policies should
be on an "occurrence" basis with Beneficiary named as an additional insured
under such policy or policies.

                           (b) A policy or policies of fire hazard insurance
insuring the Property against loss or damage on an "All-Risk" basis and against
such other risks or hazards as Beneficiary may from time to time reasonably
designate in the amount of not less than 100% of the full replacement value of
the Property without deduction for physical depreciation. Beneficiary shall be
named as loss payee under such policy or policies.

                           (c) If requested by Beneficiary, flood insurance upon
the Property in the event that such insurance is available pursuant to the
provisions of the Flood Disaster Protection Act of 1973 or other applicable
legislation. Beneficiary shall reserve the right to require that Trustor secure
flood insurance in excess of the amount provided by the Flood Disaster
Protection Act of 1973, if such insurance is commercially available, up to the
amount provided in Paragraph 2.04(a) hereof.

                           (d) If requested by Beneficiary, statutory workers'
compensation insurance (including employer's liability in amounts required by
the State Industrial Insurance System and, if applicable, insurance covering
claims of workers against employers arising under Federal law) covering Trustor
and employees of Trustor, in such form as is reasonably satisfactory to
Beneficiary and in amounts not less than any minimum amounts established by law.

                           (e) Such other insurance (including, but not limited
to, rent loss insurance for a period of at least six (6) months and business
interruption insurance), and in such amounts, as may from time to time be
reasonably required by Beneficiary.

                           The rights of Beneficiary under such policies shall
be subject to the rights, if any, of the lessor under the Lease. Trustor may
fulfill its obligation for providing the above referenced insurance policies
through blanket insurance coverage. Such insurance policies shall be updated at
Lender's request, but not less frequently than annually during the Loan term.

                     2.05. All policies required by Paragraph 2.04, except for
workers' compensation insurance, shall (i) be subject to the reasonable approval
of Beneficiary as to the insuring companies, amount, content and forms of
policies and expiration dates, (ii) with respect to the insurance referred to
under Paragraphs 2.04 (b) and (c) above, contain a Non-Contributory Standard
Mortgagee Clause and the Lender's Loss Payable Endorsement (Form 438 BFU NS), or
their equivalents, in favor of Beneficiary, (iii) with respect to the insurance
referred to under Paragraphs 2.04 (b) and (c) above, provide that the proceeds
thereof shall be payable to Beneficiary (to the extent of its interest), (iv)
provide that it cannot be modified or cancelled, to the extent that such
modification or cancellation substantially affects the Property, or
Beneficiary's interest therein, without thirty days' prior written notice to
Beneficiary, and (v) be primary and non-contributory with any other insurance of
Beneficiary.

                                       7

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

                  2.06. Except for workers' compensation insurance, Trustor
shall furnish to Beneficiary a certificate of each policy required under
Paragraph 2.04 and, at least thirty days prior to expiration of any such policy,
proof of issuance of a policy continuing in force the coverage provided by the
expiring policy. In the event Trustor shall fail to maintain the insurance
coverage required by this Deed of Trust, Beneficiary may (but shall be under no
obligation to) take out the required policies of insurance and pay the premiums
on the same and all amounts so advanced therefor by Beneficiary shall become an
additional obligation of Trustor to Beneficiary, which amounts, together with
interest thereon at the Default Rate (as defined and provided for in the Note),
Trustor agrees to pay.

                  2.07. After the happening of any casualty insured against
under Paragraph 2.04, Trustor shall give prompt written notice thereof to
Beneficiary.

                  2.08. Trustor hereby assigns to Beneficiary all casualty
insurance proceeds which it may be entitled to receive and such proceeds shall
be delivered to and held by Beneficiary to be applied to the restoration of any
portion of the Property that has been damaged or destroyed to the same
condition, character and value as existed prior to such damage or destruction so
long as the following conditions have been satisfied: (i) Trustor is not in
default hereunder; (ii) Beneficiary's security is not materially impaired; and
(iii) Trustor deposits with Beneficiary any additional amounts necessary to
accomplish such restoration. The proceeds disbursed for restoration will be
released to Trustor under procedures reasonably required by Beneficiary. In the
event that the above conditions are not satisfied, Beneficiary shall have the
option to apply the insurance proceeds upon any indebtedness secured hereby in
such order as Beneficiary may determine or release such proceeds to Trustor
without such release being deemed a payment of any indebtedness secured hereby,
rather than to apply such proceeds to the restoration of the Property. Such
application or release shall not cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to such notice. If the Property is
restored at a cost less than the available insurance proceeds and deposits, then
such excess proceeds and deposits shall, if Trustor is not then in default
hereunder, be paid over to Trustor.

                  2.09. In the event of the foreclosure of this Deed of Trust or
other transfer of the title to the Property in extinguishment, in whole or in
part, of the indebtedness secured hereby, all right, title and interest of
Trustor in and to any insurance policy then in force shall pass to the purchaser
or grantee to the extent that such insurance policy affects the Property.

         C.       Payments.

                  2.10. Trustor shall pay the principal, interest and other
charges due under the Note and the Loan Agreement according to their terms.

                  2.11. Trustor shall pay or cause to be paid:

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                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

                        (a) Subject to any right of contest contained in the
Loan Agreement, prior to the assessment of any penalty or delinquency, all
taxes, assessments and other governmental or public charges affecting the
Property, including assessments on appurtenant water stock, and any accrued
interest, cost and/or penalty thereon and shall submit paid receipt therefor to
Beneficiary upon request.

                        (b) When due, all encumbrances (including  any debt
secured by deed of trust), ground rents, liens, and/or charges, with interest,
on the Property or any part thereof which appear to be prior or superior hereto
and all costs, fees and expenses related thereto.

                        (c) When due, all charges for utilities or services
including, but not limited to, electricity, gas, water and sewer.

                  2.12. At the request of Beneficiary, Trustor shall pay to
Beneficiary on the first day of each month, together with and in addition to the
regular installments of principal and interest due under the Note, until the
indebtedness secured hereby is paid in full, an amount equal to one-twelfth
(1/12) of the yearly taxes and assessments, insurance premiums, and other
similar charges as estimated by Beneficiary to be sufficient to enable
Beneficiary to pay at least thirty (30) days before they become due, all taxes,
assessments, insurance premiums, and other similar charges against the Property.
Beneficiary shall not be obligated to pay interest on any such sums. Upon demand
of Beneficiary, Trustor shall deliver to Beneficiary such additional sums as are
necessary to enable Beneficiary to pay such taxes, assessments, insurance
premiums and similar charges. Provided that there then exists no Event of
Default under the Loan Agreement, Beneficiary shall apply such sums to the
payment of taxes, assessments and/or insurance premiums, as appropriate.

                  2.13. Trustor shall pay immediately, upon demand, after
expenditure, all sums expended or expenses incurred by Trustee and/or
Beneficiary under any of the terms of this Deed of Trust, including without
limitation, any fees and expenses (including reasonable attorneys' fees)
incurred in connection with any reconveyance of the Property or any portion
thereof, or to compel payment of the Note or any portion of the indebtedness
evidenced thereby or in connection with any default thereunder, including
without limitation attorneys' fees incurred in any bankruptcy or judicial or
nonjudicial foreclosure proceeding, with interest from date of expenditure at
the Interest Rate provided for in the Note.

                  2.14. Trustor shall pay the reasonable amount demanded by
Beneficiary or its authorized servicing agent for any statement regarding the
obligations secured hereby; provided, however, that such amount may not exceed
the maximum amount allowed by law at the time request for the statement is made.

         D.       Leasehold Mortgage Provisions.

                  2.15. Trustor hereby warrants and represents as follows with
respect to:

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                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

                            (a)  The Lease is in full force and effect,
unmodified by any writing or otherwise, except as has been specifically
disclosed to Beneficiary;

                            (b)  All rent, additional rent, and other charges
reserved in the Lease have been paid to the extent they are payable as of the
date hereof;

                            (c)  Trustor enjoys the quiet and peaceful
possession of the Land pursuant to the terms of the Lease;

                            (d)  Trustor is not in  default under any of the
terms of the Lease, and, to the best of Trustor's knowledge, there are no
circumstances which, with the passage of time or the giving of notice or both,
would constitute an event of default under the Lease; and

                            (e)  To the best of Trustor's knowledge the lessor
under the Lease (the "Lessor") is not in default under any of the terms or
provisions thereof on the part of the Lessor to be observed or performed.

                  2.16.     Trustor further covenants and agrees as follows:

                            (a)  Trustor shall promptly and faithfully observe,
perform, and comply with all the terms, covenants, and provisions of the Lease
on Trustor's part to be observed, performed, and complied with, at the times set
forth in the Lease, without any allowance for grace periods, if any;

                            (b)  Trustor shall not do, permit, suffer, or
refrain from doing anything as a result of which there could be a default under
or breach of any of the terms of the Lease;

                            (c)  Except for renewals, extensions and rent
re-determinations pursuant to the terms of the Lease, Trustor shall not cancel,
surrender, modify, amend, or in any way alter or permit the alteration of any of
the terms of the Lease without the prior written consent of Beneficiary, which
consent shall not be unreasonably withheld or delayed;

                            (d)  Trustor shall give Beneficiary immediate notice
of any default by any party to the Lease and promptly deliver to Beneficiary a
copy of each notice of default received by Trustor in connection with the Lease;

                            (e)  Trustor shall furnish to Beneficiary copies of
such information and evidence as Beneficiary may reasonably require concerning
Trustor's due observance, performance, and compliance with the terms, covenants
and provisions of the Lease; and

                            (f)  Any material default by Trustor under the Lease
shall constitute a default hereunder.

                                       10

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

          2.17.  Trustor agrees that the fee title and the leasehold estate in
the Land under the Lease shall not merge but shall always be kept separate and
distinct, notwithstanding the union of said estates in either the Lessor
thereunder, Trustor, or a third party, whether by purchase or otherwise. If
Trustor acquires the fee title or any other estate, title, or interest in the
Land, or any part thereof, the lien of this Deed of Trust shall attach to,
encumber, and be a lien upon such acquired estate, title, or interest, with the
same force and effect as if specifically encumbered herein. Trustor agrees to
execute all instruments and documents which Beneficiary may reasonably require
to ratify, confirm, and further evidence Beneficiary's lien on the acquired
estate, title, or interest. Furthermore, Trustor hereby appoints Beneficiary its
true and lawful attorney-in-fact to execute and deliver all such instruments and
documents in the name and on behalf of Trustor. This power, being coupled with
an interest, shall be irrevocable as long as the indebtedness secured hereby
remains unpaid.

          2.18.  If the Lease is cancelled or terminated, and if Beneficiary or
its nominee shall acquire an interest in any new lease of the Land, Trustor
shall have no right, title, or interest in or to the new lease or the leasehold
estate created by such new lease.

          2.19.  Trustor shall use its best efforts to obtain and deliver to
Beneficiary within twenty (20) days after written demand by Beneficiary, an
estoppel certificate from the Lessor under the Lease setting forth: (i) the name
of the Lessor thereunder; (ii) that the Lease has not been modified or, if it
has been modified, the date of each modification (together with copies of each
such modification); (iii) the basic rent payable under the Lease; (iv) the date
to which all rental charges have been paid by the tenant under the Lease; (v)
whether, to Lessor's knowledge, there are any alleged defaults, or existing
conditions that, with or without notice or after lapse of time could constitute
an alleged default, of the tenant under the Lease and, if there are, setting
forth the nature thereof in reasonable detail; and (vi) agreeing to furnish
Beneficiary with written notice of any default by Trustor thereunder.

          2.20.  Notwithstanding any provision to the contrary or apparently to
the contrary contained in this Deed of Trust, Beneficiary shall have no
liability or obligation under the Lease by reason of its acceptance of this Deed
of Trust. Beneficiary shall be liable for the obligations of the tenant arising
under the Lease for only that period of time which Beneficiary is in possession
of the Land, or has acquired, by foreclosure or otherwise, and is holding all of
Trustor's right, title, and interest therein.

          2.21.  Trustor further covenants and agrees as follows:

                 (a)  If there shall be filed by or against Trustor a petition
under the Bankruptcy Code (11 U.S.C. (S) 101 et seq.), and Trustor, as lessee
under the Lease, shall determine to reject the Lease pursuant to the Bankruptcy
Code, Trustor shall give Beneficiary not less than ten (10) days' prior notice
of the date on which Trustor shall apply to the Bankruptcy Court for authority
to reject the Lease. Beneficiary shall have the right, but not the obligation,
to serve upon Trustor within such ten-day period a notice stating that: (i)
Beneficiary demands that Trustor assume and assign the Lease to Beneficiary
pursuant to Section 365 of the Bankruptcy Code; and (ii) Beneficiary

                                       11

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

covenants to cure or provide adequate assurance of prompt cure of all defaults
and provide adequate assurance of future performance under the Lease. If
Beneficiary serves upon Trustor the notice described in the preceding sentence,
Trustor shall not seek the rejection of the Lease and shall comply with the
demand provided for in clause (i) within thirty (30) days after the notice shall
have been given, subject to the performance by Beneficiary of the covenant
provided for in clause (ii); and

                 (b)  Effective upon the entry of an order for relief in respect
of Trustor under the Bankruptcy Code, Trustor hereby assigns and transfers to
Beneficiary a non-exclusive right to apply to the Bankruptcy Court for an order
extending the period during which the Lease may be rejected or assumed.

     E.   Condemnation.

          2.22.  If the Property, or any part thereof, is taken or damaged by
reason of any public improvement or condemnation proceeding, or in any other
manner, Beneficiary shall be entitled to all compensation, awards and other
payments or relief therefor to which Trustor shall be entitled, and shall be
entitled at its option to commence, appear in and prosecute in its own name any
action or proceeding or to make any compromise or settlement in connection with
such taking or damage to the extent of the interests of Trustor therein. All
such compensation, awards, damages, rights of action and proceeds to which
Trustor shall be entitled (the "Proceeds") are hereby assigned to Beneficiary,
who shall after deducting therefrom all its reasonable expenses, including
attorneys' fees, apply or release the Proceeds with the same effect and as
provided in Paragraph 2.08 above with respect to disposition of insurance
proceeds; provided, that if there are any excess Proceeds after application
thereof to the restoration of the Property, Beneficiary shall be entitled to
apply such excess to the reduction of the principal balance due under the Note.
Trustor agrees to execute such further assignments of the Proceeds as
Beneficiary or Trustee may require. Nothing herein contained shall prevent the
accrual of interest as provided in the Note on any portion of the Note to be
paid by the Proceeds until the Proceeds are received by Beneficiary.

     F.   Rents and Leases.

          2.23.  Trustor shall submit to Beneficiary for its prior written
approval the form of the tenant lease to be used by Trustor for leasing any
portion of the Improvements, and after approval by Beneficiary, Trustor shall
not materially modify such form of lease without the prior written consent of
Beneficiary. Beneficiary shall approve, or give reasonable justification for not
approving, such Lease modification within five (5) days following request by
Trustor. Notwithstanding the foregoing, Trustor may modify any Lease to increase
the leased premises thereunder without Beneficiary's consent provided that the
rent for such increased premises shall be not less than the existing rent under
such Lease. Trustor shall promptly provide Beneficiary with a copy of any Lease
modification. Trustor shall not accept prepayments of rent for more than one (1)
month, and up to two (2) months' rent as security deposits, and shall perform
all covenants of the lessor under all leases affecting the Property (other than
the Lease) ("Leases"). "Leases", as used herein, includes any extensions or
renewals thereof and any amendments consented to by Beneficiary. Except in the

                                       12

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

event of a default under any Lease, Trustor shall not terminate any Lease
without the prior written consent of Beneficiary and shall not consent to any
assignment under any Lease without the prior written consent of Beneficiary
unless Trustor is required to consent thereto under the terms of such Lease.
Trustor shall immediately give notice to Beneficiary of any
default under any of the Leases it receives or delivers. Beneficiary shall have
the right but not the obligation, to cure any default of Trustor under any of
the Leases (if such default is not cured by Trustor within fifteen (15) days
following written notice thereof to do so) and all amounts disbursed in
connection with said cure shall be deemed to be disbursements under the Loan
Agreement.

          2.24.  Each Lease of any portion of the Improvements shall be
absolutely subordinate to the lien of this Deed of Trust but Beneficiary hereby
agrees that in the event of the exercise of the private power of sale or a
judicial foreclosure hereunder such lease shall not be terminated and shall
contain a provision satisfactory to Beneficiary that the tenant thereunder shall
attorn to such purchaser and, if requested to do so, shall enter into a new
Lease for the balance of the term of such Lease then remaining upon the same
terms and conditions. Each such Lease shall, at the request of Beneficiary, be
assigned to Beneficiary and each such assignment shall be recorded.

          2.25.  Notwithstanding anything to the contrary contained herein, but
subject to Applicable Gaming Laws as of the execution of this Deed of Trust, or
as amended from time to time, Trustor hereby absolutely and unconditionally
assigns and transfers to Beneficiary all the leases, income, rent, issues,
deposits, profits and proceeds of the Property to which Trustor may be entitled,
whether now due, past due or to become due, and hereby gives to and confers upon
Beneficiary the right, power and authority to collect such income, rents,
issues, deposits, profits and proceeds of the Property to which Trustor may be
entitled, whether now due, past due or to become due. The assignment of the
Leases constitutes an irrevocable direction and authorization of all tenants
under the Leases to pay all rent, income and profits into an account specified
by Beneficiary upon demand and without further consent or other action by
Trustor. Trustor irrevocably appoints Beneficiary its true and lawful attorney,
at the option of Beneficiary at any time, to demand, receive and enforce
payment, to give receipts, releases, and satisfactions, and to sue, either in
the name of Trustor or in the name of Beneficiary, for all such income, rents,
issues, deposits, profits and proceeds and apply the same to the indebtedness
secured hereby. It is understood and agreed that neither the foregoing
assignment of leases, income, rents, issues, deposits, profits and proceeds to
Beneficiary nor the exercise by Beneficiary of any of its rights or remedies
under this Paragraph 2.25 or under Paragraph 2.35 hereof shall be deemed to make
Beneficiary a "mortgagee-in-possession" or otherwise responsible or liable in
any manner with respect to the Property or the use, occupancy, enjoyment or
operation of all or any portion thereof. Notwithstanding anything to the
contrary contained herein or in the Note secured hereunder, so long as no Event
of Default, as defined in the Loan Agreement, shall have occurred, Trustor shall
have a license to collect all income, rents, issues, deposits, profits and
proceeds from the Property. Upon the occurrence of an Event of Default, such
license shall be deemed revoked and any rents received thereafter by Trustor
shall be delivered in kind to Beneficiary. Trustor hereby irrevocably
constitutes and appoints Beneficiary its true and lawful attorney-in-fact to
enforce in Trustor's name or in Beneficiary's name or otherwise all rights of

                                       13

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

Trustor in the instruments, including without limitation checks and money
orders, tendered as payments of rents and to do any and all things necessary and
proper to carry out the purposes hereof.

     G.   Other Rights and Obligations.

          2.26.  In addition to any other grant, transfer or assignment
effectuated hereby, without in any manner limiting the generality of the grants
in Article I hereof, Trustor shall collaterally assign to Beneficiary Trustor's
interest in all agreements, contracts, leases, licenses (excluding Casino
Licenses and lottery retailer's licenses) and permits affecting the Property in
any manner whatsoever, such assignments to be made, if so requested by
Beneficiary, by instruments in form satisfactory to Beneficiary but no such
assignment shall be construed as a consent by Beneficiary to any agreement,
contract, license or permit so assigned, or to impose upon Beneficiary any
obligations with respect thereto.

          2.27.  In the event of the passage, after the date of this Deed of
Trust, of any law deducting from the value of the Property for the purpose of
taxation, any lien thereon, or changing in any way the laws now in force for the
taxation of deeds of trust or debts secured by deeds of trust, or the manner of
the collection of any such taxes, so as to affect this Deed of Trust, or
imposing payment of the whole or any portion of any taxes, assessments or other
similar charges against the Property upon Beneficiary, the indebtedness secured
hereby shall immediately become due and payable at the option of Beneficiary;
provided, however, that such election by Beneficiary shall be ineffective if
such law either (a) shall not impose a tax upon Beneficiary nor increase any tax
now payable by Beneficiary or (b) shall impose a tax upon Beneficiary or
increase any tax now payable by Beneficiary and prior to the due date: (i)
Trustor is permitted by law and can become legally obligated to pay such tax or
the increased portion thereof (in addition to all interest, additional interest
and other charges payable hereunder and under the Note) without exceeding the
applicable limits imposed by the usury laws of the State of Nevada; (ii) Trustor
does pay such tax or increased portion; and (iii) Trustor agrees with
Beneficiary in writing to pay, or reimburse Beneficiary for the payment of, any
such tax or increased portion thereof when thereafter levied or assessed against
the Property or any portion thereof. The obligations of Trustor under such
agreement shall be secured hereby.

          2.28.  If required by Beneficiary at any time during the term of this
Deed of Trust, Trustor will execute and deliver to Beneficiary, in form
satisfactory to Beneficiary, an additional security agreement and/or financing
statement covering all personal property of Trustor which may at any time be
furnished, placed on, or annexed or made appurtenant to the Property and used,
useful or held for use, in the operation of the improvements thereon. Any breach
of or default under such security agreement shall constitute an event of default
under this Deed of Trust.

          2.29.  Trustor shall do any and all acts which, from the character or
use of the Property or the Collateral, may be reasonably necessary to protect
and preserve the security of Beneficiary, the specific enumerations herein not
excluding the general.

                                       14

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

          2.30.  Trustor will faithfully perform each and every covenant to be
performed by Trustor under any lien or encumbrance upon or affecting the
Property, including, without limiting the generality hereof, mortgages, deeds of
trust, leases, declaration of covenants, easements, conditions and/or
restrictions and other agreements which affect the Property, in law or in
equity, which Beneficiary reasonably believes may be prior and superior to the
lien or charge of this Deed of Trust. A breach of or a default under any such
lien or encumbrance shall constitute an event of default under this Deed of
Trust.

          2.31.  Upon election of either Beneficiary or Trustee so to do,
employment of an attorney is authorized and payment by Trustor of all attorneys'
fees, costs and expenses in connection with any action and/or actions (including
the cost of evidence or search of title), which may be brought for the
foreclosure of this Deed of Trust, and/or for possession of the property covered
hereby, and/or for the appointment of a receiver, and/or for the enforcement of
any covenant or right in this Deed of Trust contained as hereinafter provided
shall be secured hereby.

          2.32.  No personal property covered by the security interest granted
herein may be removed from the Property without the prior written consent of
Beneficiary unless Trustor shall immediately replace such personal property with
similar property of equivalent value on which Beneficiary has a valid first
lien, or unless such removal shall not result in any substantial impairment of
Beneficiary's security hereunder.

          2.33.  Except for subleases of portions of the Property in the
ordinary course of business, in the event that the interest of Trustor in the
Property, or any part thereof, or any interest therein is sold, conveyed,
alienated, further encumbered or otherwise transferred by Trustor, whether by
operation of law or otherwise, the Note, irrespective of the maturity dates
expressed therein, at the option of Beneficiary, and without demand or notice,
shall immediately become due and payable. In the event that Beneficiary does not
elect to declare the Note immediately due and payable, then, unless indicated
otherwise in writing by Beneficiary, Trustor shall nevertheless remain primarily
liable for the obligations hereunder and under the Note and any other instrument
securing the Note. This provision shall apply to each and every sale,
conveyance, alienation, encumbrance or transfer, regardless of whether or not
Beneficiary has consented to, or waived, Beneficiary's rights hereunder, whether
by action or non-action, in connection with any previous sale, conveyance,
alienation, encumbrance or transfer and whether or not the holder has received
any payments after said transfer. Notwithstanding the foregoing, Beneficiary
understands that Trustor may further encumber all or a portion of the Property
with a deed of trust in favor of Prospector Gaming Enterprises, Inc., a Nevada
corporation, to secure an obligation in a principal amount not to exceed
$6,000,000. Beneficiary consents to such further encumbrance so long
as the lien thereof shall at all times be subject and subordinate to the lien of
this Deed of Trust.

          2.34.  Trustor agrees to execute such documents and take such action
as Beneficiary shall reasonably determine to be necessary or desirable to
further evidence, perfect or continue the perfection of the lien and security
interest granted by Trustor herein.

                                       15

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

          2.35. Following a fifteen (15) day written notice to Trustor (unless
Beneficiary reasonably determines that emergency circumstances exist which would
make the giving of such notice impractical), unless Trustor is contesting such
matter in accordance with the loan documents executed in connection herewith, at
the time and in the manner herein provided, Beneficiary may, without releasing
Trustor from any obligation hereunder and without waiving its right to declare a
default or impairing any declaration of default as herein provided or any sale
proceeding predicated thereon:

                (a) Make any payment or perform any act in such manner and to
such extent as either may deem necessary to protect the security hereof,
Beneficiary and Trustee being authorized to enter upon and take possession of
the Property for such purposes;

                (b) Commence, appear in and/or defend (except for any action
commenced by Beneficiary) any action or proceedings purporting to affect the
security hereof, and/or any additional or other security therefor, and/or the
interests, rights, powers and/or duties of Trustee and/or Beneficiary hereunder,
whether brought by or against Trustor, Trustee or Beneficiary (Trustor shall
also have the right to appear in or defend any such action and Trustor and
Beneficiary shall reasonably cooperate in any action or proceeding in which
their interests are the same or similar);

                (c) Pay, purchase, contest or compromise any claim, debt, lien,
charge or encumbrance which in the judgment of either may affect or appear to
affect the security of this Deed of Trust, the interest of Beneficiary or the
rights, powers and/or duties of Trustee and/or Beneficiary hereunder; and

                (d) Upon an Event of Default hereunder or under the Note, and
subject to the provisions of the Lease, the rights of subtenants, and the laws,
regulations and policies of any governmental or quasi-governmental agency with
jurisdiction over the Property, Beneficiary is authorized either by itself or by
its agents to be appointed by it for that purpose or by a receiver appointed by
a court of competent jurisdiction, to enter into and upon and take and hold
possession of any portion or all of the Property, both real and personal, and
exclude Trustor and all other persons therefrom; and to operate and manage the
Property and rent and lease the same, perform such reasonable acts of repair or
protection as may be reasonably necessary or proper to conserve the value
thereof, and collect any and all income, rents, issues, profits and proceeds
therefrom, the same being hereby assigned and transferred to Beneficiary for the
benefit and protection of Beneficiary (subject to the license in favor of
Trustor granted above), and from time to time apply and/or accumulate such
income, rents, issues, profits and proceeds in such order and manner as
Beneficiary or such receiver in its sole discretion shall consider advisable, to
or upon the following: the expense of receivership, if any, the proper costs of
upkeep, maintenance, repair and/or operation of the Property, the repayment of
any sums theretofore or thereafter advanced pursuant to the terms of this Deed
of Trust upon the indebtedness secured hereby, the taxes and assessments upon
the Property then due or next to become due, and/or upon the unpaid principal of
such indebtedness. The collection and/or receipt of income, rents, issues,
profits and/or proceeds from the Property by Beneficiary, its agent or receiver,
after declaration of default and election to cause the Property to

                                       16

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

be sold under and pursuant to the terms of this Deed of Trust shall not affect
or impair such default or declaration of default or election to cause the
Property to be sold or any sale proceedings predicated thereon, but such
proceedings may be conducted and sale effected notwithstanding the receipt
and/or collection of any such income, rents, issues, profits and/or proceeds.
Any such income, rents, issues, profits and/or proceeds in the possession of
Beneficiary, its agent or receiver, at the time of sale and not theretofore
applied as herein provided, shall be applied in the same manner and for the same
purposes as the proceeds of the sale. Neither Trustee nor Beneficiary shall be
under any obligation to make any of the payments or do any of the acts referred
to in this Paragraph and any of the actions referred to in this Paragraph may be
taken by Beneficiary irrespective of whether any notice of default or election
to sell has been given hereunder and without regard to the adequacy of the
security for the indebtedness evidenced by the Note.

III.  DEFAULTS AND REMEDIES.

      A.   Defaults.

           3.01. An Event of Default under the Loan Agreement shall be an Event
of Default hereunder.

      B.   Remedies.

           3.02. Upon the occurrence of any Event of Default hereunder, or under
the Loan Agreement or any other documents executed in connection herewith, then
and in each such event, Beneficiary may declare all sums secured hereby
immediately due and payable either by commencing an action to foreclose this
Deed of Trust as a mortgage, or by the delivery to Trustee of a written
declaration of default and demand for sale and of written notice of default and
of election to cause the Property to be sold, which notice Trustee shall cause
to be duly filed for record in case of foreclosure by exercise of the power of
sale herein. Should Beneficiary elect to foreclose by exercise of the power of
sale herein, Beneficiary shall also deposit with Trustee this Deed of Trust, the
Note and such receipts and evidence of expenditures made and secured hereby as
Trustee may require, and notice of sale having been given as then required by
law and after lapse of such time as may then be required by law after
recordation of such notice of default, Trustee, without demand on Trustor, shall
sell the Property at the time and place of sale fixed by it in said notice of
sale, either as a whole or in separate parcels, and in such order as it may
determine, at public auction to the highest bidder for cash in lawful money of
the United States, payable at time of sale. Trustee may postpone sale of all or
any portion of the Property by public announcement at such time and place of
sale, and from time to time thereafter may postpone such sale by public
announcement at the time fixed by the preceding postponement. Trustee shall
deliver to such purchaser its deed or deeds conveying the Property, or any
portion thereof, so sold, but without any covenant or warranty, express or
implied. The recitals in such deed or deeds of any matters or facts shall be
conclusive proof of the truthfulness thereof. Any person, including Trustor,
Trustee or Beneficiary, may purchase at such sale.

                                       17

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

           3.03. Beneficiary, from time to time before Trustee's sale, may
rescind any such notice of breach or default and of election to cause the
Property to be sold by executing and delivering to Trustee a written notice of
such rescission, which notice, when recorded, shall also constitute a
cancellation of any prior declaration of default and demand for sale. 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 of default and demand for sale, and notices of
breach or default, and of election to cause the Property to be sold to satisfy
the obligations hereof, nor otherwise affect any provision, agreement, covenant
or condition of the Note, the Loan Agreement and/or of this Deed of Trust or any
of the rights, obligations or remedies of the parties hereunder.

           3.04. After deducting all costs, fees and expenses of Trustee and of
this Trust, including the cost of evidence of title in connection with sale and
attorneys' fees, Trustee shall apply the proceeds of sale as required by
applicable law.

           3.05. If Beneficiary at any time holds additional security for any
obligations secured hereby, it may enforce the terms hereof or otherwise realize
upon the same, at its option, either before or concurrently herewith or after a
sale is made hereunder, and may apply the proceeds upon the indebtedness secured
hereby without affecting the status of or waiving any right to exhaust all or
any other security, including the security hereunder, and without waiving any
breach or default or any right or power whether exercised hereunder or contained
herein or in any such other security.

           3.06. No remedy herein conferred upon or reserved to Trustee or
Beneficiary is intended to be exclusive of any other remedy herein or by law
provided or permitted, but each shall be cumulative and shall be in addition to
every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute. Every power or remedy given by this instrument to Trustee
or Beneficiary or to which either of them may be otherwise entitled, may be
exercised concurrently or independently, from time to time and as often as may
be deemed expedient by Trustee or Beneficiary and either of them may pursue
inconsistent remedies.

           3.07. Subject to any notice requirement and opportunity to cure
contained herein, in the case of an Event of Default hereunder, Beneficiary, as
a matter of right and without notice to Trustor or anyone claiming under it, and
without regard to the then value of the Property or the interest of Trustor
therein, shall have the right to apply to any court having jurisdiction to
appoint a receiver or receivers of the Property, and Trustor hereby irrevocably
consents to such appointment and waives notice of any application therefor. Any
such receiver or receivers shall have all the usual powers and duties of
receivers in like or similar cases and all the powers and duties of Beneficiary
in case of entry as provided herein and shall continue as such and exercise all
such powers until the date of confirmation of sale of the Property unless such
receivership is sooner terminated.

           3.08. Beneficiary and Trustee acknowledge, understand and agree that,
to the extent the prior approval of the Gaming Authorities of the State of
Nevada is required pursuant to applicable law for the exercise, operation and
effectiveness of any remedy hereunder or under any

                                       18

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

other Loan Document (as defined in the Loan Agreement), or the taking of any
action that may be taken by Beneficiary or Trustee hereunder or under any other
Loan Document, including without limitation the taking of possession and
disposition of collateral consisting of gaming devices, cashless wagering
systems and associated equipment (as those terms are defined in Nevada Revised
Statutes 463.0155, 463.014 and 463.0136), such remedy or action shall be subject
to such prior approval of the Gaming Authorities of the State of Nevada and the
Beneficiary or Trustee may be subject to being called forward for licensing or a
finding of suitability. All rights, remedies and powers provided in this Deed of
Trust may be exercised only to the extent that the exercise thereof does not
violate any provision of Applicable Gaming Laws, and all provisions of this Deed
of Trust are intended to be subject to all mandatory provisions of the
Applicable Gaming Laws, which may be controlling.

           3.09. All rights, remedies and powers in this Deed of Trust may be
exercised only to the extent that the exercise thereof does not violate any
provision of the Applicable Gaming Laws, and all the provisions of this Deed of
Trust are intended to be subject to all mandatory provisions of the Applicable
Gaming Laws which may be controlling.

IV.    COLLATERAL.

           4.01. With respect to the security interest granted in Paragraph
1.02, Beneficiary shall have all the rights and remedies granted to a secured
party under Article 9 of the Uniform Commercial Code, as well as all other
rights and remedies available at law or in equity; provided that Beneficiary
shall first apply for and receive all required approvals of the Gaming
Authorities having jurisdiction over the sale and disposition of Gaming
Equipment prior to the sale or disposition thereof. Upon an Event of Default,
Trustor shall, upon the demand of Beneficiary, assemble all of such personal
property and make it available to Beneficiary at the Property, which is hereby
agreed to be reasonably convenient to Beneficiary. The proceeds of any sale of
such personal property shall be applied first to the expenses of Beneficiary in
retaking, holding, preparing for sale, selling or similar matters, including
reasonable attorney's fees.

           4.02. Until Beneficiary exercises its right to collect proceeds of
the Collateral pursuant hereto, Trustor will collect with diligence any and all
proceeds of the Collateral. Upon an Event of Default and written request by
Beneficiary, any proceeds received by Trustor shall be in trust for Beneficiary,
and Trustor shall keep all such collections separate and apart from all other
funds and property so as to be capable of identification as the property of
Beneficiary and shall deliver such collections at such time as Beneficiary may
request to Beneficiary in the identical form received, properly endorsed or
assigned when required to enable Beneficiary to complete collection thereof.

           4.03. Trustor shall (i) permit representatives of Beneficiary to
inspect the Collateral and Trustor's books and records relating to the
Collateral and make extracts therefrom and to arrange for verification of the
amount of Collateral, under reasonable procedures acceptable to Beneficiary, at
Trustor's expense; (ii) promptly notify Beneficiary of any attachment or other
legal process levied

                                       19

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

against any of the Collateral; (iii) reimburse Beneficiary upon demand for any
and all costs, including without limitation reasonable attorneys' and
accountants' fees, and other expenses incurred in collecting any sums payable by
Trustor under any obligation secured hereby, or in the checking, handling and
collection of the Collateral and the preparation and enforcement of any
agreement relating thereto; (iv) notify Beneficiary of each location at which
the Collateral is or will be kept, other than for temporary processing, storage
or similar purposes, and of any removal thereof to a new location; (v) provide,
maintain and deliver to Beneficiary certificates of insurance insuring the
Collateral against loss or damage by such risks and in such amounts, forms and
by such companies as Beneficiary may reasonably require and with loss payable to
Beneficiary, and in the event Beneficiary takes possession of the Collateral,
the insurance policy or policies and any unearned or returned premium thereon
shall at the option of Beneficiary become the sole property of Beneficiary
unless such insurance is effected through blanket policies; (vi) do all acts
necessary to maintain, preserve and protect all Collateral, keep all Collateral
in good condition and repair and prevent any waste or unusual or unreasonable
depreciation thereof; and (vii) join with Beneficiary at its request from time
to time in executing financing statements, amendments thereto and continuation
statements, and pay the cost of the filing of the same whenever Beneficiary
reasonably deems desirable, and execute and deliver to Beneficiary further
documents and instruments and do such other acts and things as Beneficiary may
reasonably request in order to effectuate fully the purposes and intent hereof.
Trustor hereby authorizes Beneficiary to file financing statements, amendments,
and continuation statements in such filing offices as Beneficiary may determine
appropriate in connection with the security interest granted herein.

           4.04. Beneficiary may at any time, without prior notice to Trustor,
collect proceeds of the Collateral and may give notice of assignment to any and
all of Trustor's debtors, and Trustor does hereby irrevocably constitute and
appoint Beneficiary its true and lawful attorney-in-fact to enforce in Trustor's
name or in Beneficiary's name or otherwise all rights of Trustor in the
Collateral and to do any and all things necessary and proper to carry out the
purposes hereof; provided, however, Trustor shall have the right to collect,
retain, use and enjoy such proceeds and enforce such rights subject to the terms
hereof and the documents securing Trustor's obligations hereunder prior to any
Event of Default under the Loan Agreement. It is hereby recognized that the
power of attorney herein granted is coupled with an interest and shall not be
revocable and Beneficiary shall have the right to exercise this power of
attorney upon any Event of Default under the Loan Agreement. (Beneficiary shall
promptly notify Trustor of any action taken by Beneficiary pursuant to this
provision but Beneficiary's failure to do so shall not invalidate any such act,
affect any of Trustor's obligations to Beneficiary or give rise to any right,
claim or defense on the part of Trustor).

V.    MISCELLANEOUS PROVISIONS.

           5.01. By accepting payment of any sum secured hereby after its due
date or in an amount less than the sum due, Beneficiary does not waive its
rights either to require prompt payment when due of all other sums so secured or
to declare a default as herein provided for failure to pay the total sum due.

                                       20

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

                  5.02. At any time, or from time to time, without liability
therefor and without notice, upon written request of Beneficiary and
presentation of this Deed of Trust and the Note for endorsement, and without
affecting the personal liability of any person for payment of the indebtedness
secured hereby or the effect of this Deed of Trust upon the remainder of the
Property, Trustee may: reconvey any part of the Property; consent in writing to
the making of any map or plat thereof; join in granting any easement thereon; or
join in any extension agreement or any agreement subordinating the lien or
charge hereof.

                  5.03. Beneficiary shall be subrogated for further security to
the lien, although released of record, of any and all encumbrances paid out of
the proceeds of the loan secured by this Deed of Trust.

                  5.04. Subject to the provisions of the Lease, the rights of
any subtenants, and any laws, regulations and policies of any governmental or
quasi-governmental entity with jurisdiction over the Property, Beneficiary is
authorized by itself, its agents, employees or workmen, to enter at any
reasonable time upon any part of the Property for the purpose of inspecting the
same, and for the purpose of performing any of the acts it is authorized to
perform under the terms of the Loan Agreement and this Deed of Trust.

                  5.05. Subject to the provisions of Paragraph 2.33 hereof, this
Deed of Trust applies to, inures to the benefit of, and binds all parties
hereto, their heirs, legatees, devisees, administrators, executors, successors
and assigns. The term "Beneficiary" shall mean the owner and holder, including
pledgees, of the Note, now or hereafter and whether or not named as Beneficiary
herein. In this Deed of Trust, whenever the context so requires, the masculine
gender includes the feminine and/or neuter, and the singular number includes the
plural.

                  5.06. Trustee, upon presentation to it of an affidavit signed
by or on behalf of Beneficiary, setting forth any fact or facts showing a
default by Trustor under any of the terms or conditions of this Deed of Trust,
is authorized to accept as true and conclusive all facts and statements in such
affidavit and to act hereunder in complete reliance thereon.

                  5.07. If any provision hereof should be held unenforceable or
void, then such provision shall be deemed separable from the remaining
provisions and shall in no way affect the validity of this Deed of Trust.

                  5.08. Trustee accepts this Trust when this Deed of Trust, duly
executed and acknowledged, is made a public record as provided by law. The Trust
created hereby is irrevocable by Trustor.

                  5.09. Trustee shall be under no obligation to notify any party
hereto of any action or proceeding of any kind in which Trustor, Beneficiary
and/or Trustee shall be a party, unless brought by Trustee, or of any pending
sale under any other deed of trust.

                                       21

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 22-25000

<PAGE>

                  5.10. Beneficiary may, from time to time, by a written
instrument executed and acknowledged by Beneficiary and recorded in the county
or counties where the Property is located, substitute a successor or successors
for the Trustee named herein or acting hereunder.

                  5.11. The right to plead any and all statutes of limitation as
a defense to any demand secured by this Deed of Trust is hereby waived to the
full extent permitted by law.

                  5.12. All notices hereunder shall be deemed to have been duly
given if by telefax, delivered by courier service or mailed by United States or
Canadian registered or certified mail, with return receipt requested, postage
prepaid to the parties at the following addresses (or at such other addresses as
shall be given in writing by any party to the others) and shall be deemed
complete upon such personal delivery, or on the first day following receipt by
courier service or telefax, or five (5) business days following mailing:

         To Trustor:                California Prospectors, Ltd.
                                    345 N. Arlington
                                    Reno, Nevada  89501

         To Beneficiary:            Nevada State Bank
                                    P.O. Box 2351
                                    Reno, Nevada 89505

                  5.13. Trustor requests that a copy of any notice of default
and of any notice of sale hereunder be mailed to Trustor at the address set
forth above.

                  5.14. Upon written request of Beneficiary stating that all
sums secured hereby have been paid and upon surrender to Trustee of this Deed of
Trust and the Note for cancellation and upon payment of its fees, Trustee shall
reconvey, without warranty, the Property then held hereunder. 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 thereto". Upon such reconveyance, any
security interest granted herein shall be terminated.

                  5.15. Without affecting the liability or obligations of any
person, including Trustor, for the performance of any obligations secured hereby
(excepting only any person or property otherwise expressly released in writing
by Beneficiary), Beneficiary may from time to time and without notice release
any person liable for payment of any of said indebtedness or the performance of
said obligations, extend the time of payment or (with the consent of Trustor)
otherwise alter the terms of any of said obligations, accept additional security
therefor of any kind, including trust deeds or mortgages, or alter, substitute
or release any property securing said obligations.

                  5.16. The provisions of this Deed of Trust governing the
contractual rights and obligations of Trustor, Beneficiary and Trustee shall be
construed according to the laws of the State of Nevada. Notwithstanding anything
to the contrary contained herein, this Deed of Trust is subject

                                       22

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 22-25000

<PAGE>

to the Applicable Gaming Laws of the State of Nevada. Beneficiary and Trustee
each agrees to cooperate with the Gaming Authorities of the State of Nevada in
connection with the administration of their regulatory jurisdiction over
Trustor, including the provision of such documents and other information as may
be requested by the Gaming Authorities of the State of Nevada relating to
Trustor or the Loan Documents. The provisions of this Deed of Trust are intended
to be supplemental and in addition to the provisions contained in the Loan
Agreement. Any assignment of this Deed of Trust shall be considered an
assignment of the Note and the Loan Agreement.

                  5.17. Regulatory Matters.  Whenever in this Deed of Trust a
right is given to Beneficiary, which right is affected by Applicable Gaming Laws
or the enforcement of which is subject to Applicable Gaming Laws, the
enforcement of any such right shall be subject to Applicable Gaming Laws and
approval, if so required, of the applicable Gaming Authorities. Without limiting
the generality of the foregoing, Beneficiary acknowledges that (a) Beneficiary
is subject to being called forward by the Gaming Authority of the State of
Nevada, in their discretion, for licensing or a finding of suitability as a
lender to a gaming licensee, and (b) to the extent the prior approval of the
Gaming Authority of the State of Nevada is required pursuant to applicable law
for the exercise, operation and effectiveness of any remedy hereunder or under
any other Loan Document, or the taking of any action that may be taken by
Beneficiary or under any other Loan Document, such remedy or action shall be
subject to such prior approval of the Gaming Authority of the State of Nevada.

                  5.18. This Deed of Trust may be executed in counterparts, all
of which executed counterparts shall together constitute a single document.
Signature pages may be detached from the counterparts and attached to a single
copy of this document to physically form one document.

                  5.19. This Deed of Trust is being executed in counterpart
originals for recordation in the Office of the County Recorder, Washoe County,
Nevada, and in the Office of the County Recorder, Sierra County, California.

VI.      NON-BORROWER TRUSTOR PROVISIONS.

                  6.01. Trustor is not the maker of the Note nor the obligor
under any of the Loan Documents. Trustor is executing this Deed of Trust for the
sole purpose of encumbering its interest in the Property as and upon the terms
and provisions above provided in this Deed of Trust, and Trustor shall not be
liable whatsoever for the payment or performance of any obligation of Borrower
pursuant to the Loan Documents. However, in executing and delivering this Deed
of Trust to Beneficiary, Trustor expressly represents, acknowledges and agrees
as follows:

                        (a)  That (i) this Deed of Trust is executed at
Trustor's request, and Borrower has received adequate consideration therefor;
(ii) this Deed of Trust complies with any and all agreements between Borrower
and Trustor regarding Trustor's execution hereof; (iii) Beneficiary has made no
representation to Trustor as to the creditworthiness of Borrower; and (iv)
Trustor has established adequate means of obtaining, and will obtain from
Borrower on a continuing basis,

                                       23

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 22-25000

<PAGE>

financial and other information pertaining to Borrower's financial condition and
any facts or circumstances that might in any way affect Trustor's obligations
under this Deed of Trust, and Beneficiary shall have no obligation to disclose
to Trustor any information or furnish any material acquired in the course of the
Beneficiary's relationship with Trustor.

                        (b)  To the extent  permitted by applicable law, Trustor
waives any defense arising by reason of (i) any disability or other defense of
Trustor or any other person; (ii) the cessation from any cause whatsoever, other
than payment in full of the obligations secured hereby; (iii) the application by
Borrower of the proceeds of any obligations secured hereby for purposes other
than the purposes represented by Borrower to Beneficiary or intended or
understood by Beneficiary or Trustor; (iv) any act or omission by Beneficiary
which directly or indirectly results in or aids the discharge or release of
Borrower, any other person, any obligations secured hereby, or any collateral by
operation of law or otherwise; or (v) any modification of any obligations
secured hereby in any form whatsoever, including without limitation the renewal,
extension, compromise, acceleration or other change in time for payment or terms
of such obligations, increase or decrease of the rate of interest thereon, or
other change in the terms of such obligations or any part thereof, and Trustor
agrees to execute such amendments to this Deed of Trust as Beneficiary may
reasonably require to reflect that this Deed of Trust secures the obligations
secured hereby as modified.

         IN WITNESS WHEREOF, Trustor has executed this Deed of Trust and
Security Agreement and Fixture Filing with Assignment of Rents as of the day
first written above.

                       CALIFORNIA PROSPECTORS, LTD.,
                       a Nevada Limited Liability Company

                            By: /s/ FERENC B. SZONY
                               ----------------------
                                   Its: Manager

                                    "Trustor"

STATE OF NEVADA   )
                  )ss.
COUNTY OF WASHOE  )

         This instrument was acknowledged before me on May 30, 2002, by
Ferenc B. Szony, as Manager of California Prospectors, Ltd.

                                       24

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                Las Vegas, Nevada
                                 (702) 22-25000

<PAGE>

                                  Notary Public        Diane Y. Sanders
                                                --------------------------------
                                  My Commission Expires:        6/19/2002
                                                         -----------------------

                                       25

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 22-25000

<PAGE>

                                   Exhibit "A"

                                Legal Description

                                       26

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                                Las Vegas, Nevada
                                 (702) 22-25000

<PAGE>

APN No.  038-230-24 (Washoe County)
         038-230-02 (portion) (Washoe County)
         038-241-07 (Washoe County)
         038-241-08 (portion) (Washoe County)
         023-100-13 (Sierra County)
WHEN RECORDED MAIL TO:
Nevada State Bank
P.O. Box 2351
Reno, Nevada  89505

                    DEED OF TRUST AND SECURITY AGREEMENT AND
                     FIXTURE FILING WITH ASSIGNMENT OF RENTS

     THIS DEED OF TRUST AND SECURITY AGREEMENT AND FIXTURE FILING WITH
ASSIGNMENT OF RENTS ("Deed of Trust") is made as of the day of 31st May, 2002,
by LAST CHANCE, INC., a Nevada corporation (the "Trustor"), to WESTERN TITLE
COMPANY, INC. ("Trustee"), for the benefit of NEVADA STATE BANK ("Beneficiary").

                                    RECITALS:
                                    --------

     A. Pursuant to that certain Reducing Revolving Line of Credit Loan
Agreement of even date herewith and any amendment, modification or change
thereto (the "Loan Agreement") between Trustor, The Sands Regent, a Nevada
corporation, and Zante, Inc., a Nevada corporation, as the borrower
(collectively, the "Borrower"), and Beneficiary as lender, Beneficiary has
agreed to make a loan to Borrower on the terms and conditions set forth therein.
Unless the context otherwise requires, all capitalized words or terms used but
not otherwise defined herein shall have the meanings ascribed thereto in the
Loan Agreement.

     B. Pursuant to the Loan Agreement, the Borrower's obligations evidenced by
the Loan Agreement are required to be secured by, among other things, this Deed
of Trust.

     C. The parties acknowledge that certain provisions of this Deed of Trust
may be subject to the laws, rules and regulations (the "Applicable Gaming Laws")
of the gaming authorities (the "Gaming Authorities") of the State of Nevada and
of other governmental jurisdictions, including, but not limited to, the Nevada
State Gaming Control Board, the Nevada Gaming Commission and the City of Reno
Gaming and Liquor Board.

I.   GRANTS AND OBLIGATIONS SECURED.

     A.  Grants.

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                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

         1.01. In consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Trustor hereby irrevocably grants, transfers and assigns to
Trustee, in trust, for the benefit of Beneficiary, with power of sale and right
of entry and possession, all right, title and interest of Trustor now or
hereinafter existing in and to that certain real property situated in the Washoe
County, Nevada, and Sierra County, California, described in Exhibit "A" attached
hereto and made a part hereof (the "Land"), including any leasehold estate now
or hereafter held or acquired by Trustor in and to the Land under any lease
relating thereto, as the same may from time to time be supplemented, modified,
amended, renewed or extended, including that certain Gold Ranch Casino Lease
dated December 27, 2001, between Prospector Gaming Enterprises, Inc., a Nevada
corporation, doing business as Gold Ranch Casino & RV Resort, and Target
Investments, L.L.C., a Nevada limited liability company, collectively as lessor,
and Last Chance, Inc., a Nevada corporation, as lessee, a Memorandum of which
was recorded on May 31, 2002, Official Records, Washoe County,
Nevada, as Document No. 2695017 (the "Lease"), together with all right, title
and interest of Trustor therein and in and to:

               (a) All buildings and other improvements now or hereafter located
on the Land, all water and water rights (whether riparian, appropriative, or
otherwise, and whether or not appurtenant), pumps and pumping stations used in
connection therewith and all shares of stock evidencing the same, all machinery,
equipment (including Gaming Equipment (as hereinafter defined)), appliances,
furnishings, inventory, fixtures, and other property used or useable in
connection with the Land and the improvements thereon, including, but not
limited to, all storage tanks and pipelines, all gas, electric, heating,
cooling, air conditioning, refrigeration and plumbing fixtures and equipment,
which have been or may hereafter be attached or affixed in any manner to any
building now or hereafter on the Land (the "Improvements").

               (b) All the rights, rights of way, easements (including, without
limitation, that certain Sign Easement executed by Target Investments, L.L.C., a
Nevada limited liability company, in favor of Trustor to be recorded
concurrently herewith), licenses, profits, privileges, tenements, hereditaments
and appurtenances, now or hereafter in any way appertaining and belonging to or
used in connection with the Land and/or the Improvements, and any part thereof
or as a means of access thereto, including, but not limited to, any claim at law
or in equity, and any after acquired title and reversion in or to each and every
part of all streets, roads, highways and alleys adjacent to and adjoining the
same.

               (c) All rentals, earnings, income deposits, security deposits,
receipts, royalties, revenues, issues and profits which, after the date hereof,
and while any portion of the indebtedness secured hereby remains unpaid, may
accrue from the Land and/or the Improvements and any part thereof, including,
without limitation, those arising under that certain lease wherein Foodmaker,
Inc., (also known as Jack in the Box, Inc.) is the tenant, as evidenced by a
Memorandum of Lease recorded on June 18, 1999, in the Office of the County
Recorder, Washoe County, Nevada,

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                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

as Document No. 2352421, subject, however, to the right, power and authority
conferred upon Trustor to collect and apply such proceeds set forth herein.

               (d) All deposits made with or other security given to utility
companies by Trustor with respect to the Land and/or the Improvements, and all
advance payments of insurance premiums made by Trustor with respect thereto and
claims or demands relating to such insurance. Any of the foregoing arising or
acquired by Trustor after the date hereof, the Land, the Improvements, and the
other property described in subparagraphs (a), (b), (c), and (d) of this Section
1.01 are collectively defined hereinafter as the "Property".

         1.02. Trustor hereby grants a security interest to Beneficiary
in all of the following described property and any and all proceeds thereof
(sometimes all of such being collectively referred to herein as the
"Collateral"):

               (a) all existing and future goods and tangible personal property
located on the Property or wherever located now owned or hereafter acquired or
leased by Trustor and used or useable in connection with the use, operation or
occupancy of the Property including, but not limited to, all appliances,
furniture and furnishings, fittings, materials, supplies, equipment and
fixtures, and all supplies, and equipment now or hereafter delivered to the
Property and installed or used or intended to be installed or used therein; and
all renewals or replacements thereof or articles in substitution thereof;

               (b) all general intangibles relating to design, operation,
management and use of the Property (except, with respect to Casino Licenses, as
prohibited by Applicable Gaming Laws), including, but not limited to, (i) all
names under which or by which the Property or the Improvements may at any time
be operated or known, all rights to carry on business under any such names or
any variant thereof, and all goodwill, trademarks, tradenames and service marks
in any way relating to the Property, (ii) all permits, licenses, authorizations,
variances, land use entitlements, approvals and consents issued or obtained in
connection with the operation and use of the Property, (iii) all permits,
licenses, approvals, consents, authorizations, franchises and agreements issued
or obtained in connection with the use, occupancy or operation of the Property,
excluding, however, Casino Licenses, (iv) all materials prepared for filing or
filed with any governmental agency, and (v) all of Trustor's rights under any
contract in connection with the development, design, use, operation and
management of the Property, including, without limitation, that certain Contract
Dealer Gasoline Agreement dated January 12, 1998, between ARCO Products Company,
and Prospector Gaming Enterprises, Inc., as amended from time to time;

               (c) all service, engineering, consulting, leasing, architectural
and other similar contracts of any nature as such may be modified, amended or
supplemented from time to time, concerning the management, operation, occupancy,
use, and/or disposition of any portion of or all of the Property;

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                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

               (d) all architectural drawings, plans, specification, soil tests,
feasibility studies, appraisals, engineering reports and similar materials
relating to any portion of or all of the Property;

               (e) all reserves, deferred payments, deposits, refunds,
cost savings and payments of any kind relating to the operation, occupancy, use
and disposition of any portion of or all of the Property;

               (f) all proceeds and claims arising on account of any damage to
or taking of the Property or any part thereof, and all causes of action and
recoveries for any loss or diminution in the value of the Property;

               (g) all policies of, and proceeds resulting from, insurance
relating to the Property or any of the above collateral, and any and all riders,
amendments, extensions, renewals, supplements or extensions thereof, and all
proceeds thereof;

               (h) all of the Trustor's right, title and interest in, to and
under the following:

                   (i) that certain Option To Purchase The Gold Ranch Casino
Property And Improvements, The Leachfield Property, The Frontage Parcel, The
California Lottery Station And The California Lottery Property, And The Right of
First Refusal dated December 27, 2001, entered into by and among Prospector
Gaming Enterprises, Inc., a Nevada corporation, Target Investments, L.L.C., a
Nevada Limited Liability Company, and Last Chance, Inc., a Nevada corporation,
as evidenced by that certain Memorandum of Option recorded on May 31, 2002,
in the Office of the County Recorder, Washoe County, Nevada, as Document
No. 2695018, and on May 31, 2002, in the Office of the County Recorder, Sierra
County, California, as Document No. 2002134951;

                   (ii) that certain Water And Sewer Service Agreement dated
December 27, 2001, entered into by and among Prospector Gaming Enterprises,
Inc., a Nevada corporation, Target Investments, LLC, a Nevada Limited Liability
Company, Stremmel Capital Group, Ltd., a Nevada Limited Liability Company, and
Last Chance, Inc., a Nevada corporation;

                   (iii) that certain Option to Purchase All Assets of Gold
Ranch RV Resort Business And Right of First Refusal dated December 27, 2001,
entered into by and between Gold Ranch R.V. Resort, LLC, a Nevada Limited
Liability Company, and Last Chance, Inc., a Nevada corporation;

                   (iv) that certain Option To Purchase The RV Resort Property
And Right of First Refusal dated December 27, 2001, entered into by and between
Prospector Gaming Enterprises, Inc., a Nevada corporation, and Last Chance,
Inc., a Nevada corporation, as evidenced

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                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

by that certain Memorandum of Option recorded on May 31, 2002, in the
Office of the County Recorder, Washoe County, Nevada, as Document No
2695044, and on May 31, 2002, in the Office of the County Recorder,
Sierra County, California, as Document No. 2002134950; and

                   (v) that certain Contract Dealer Gasoline Agreement dated
January 12, 1998, as amended from time to time, entered into by and between ARCO
Products Company, a division of Atlantic Richfield Company, and Prospector
Gaming Enterprises Inc.

               (i) all proceeds,  whether cash, promissory notes, contract
rights, or otherwise, of the sale or other disposition of all or any part of the
estate of Trustor in and to the Property now or hereafter existing thereon.

     The personal property in which Beneficiary has a security interest includes
goods which are or shall become fixtures on the Land. This Deed of Trust is
intended to serve as a fixture filing pursuant to the terms of the Nevada
Uniform Commercial Code. This filing is to be recorded in the real estate
records of the county in which the Land is located. In that regard, the
following information is provided:

         Name of Debtor:                    LAST CHANCE, INC.

         Address of Debtor:                 See Paragraph 5.12

         Name of Secured Party:             NEVADA STATE BANK

         Address of Secured Party:          See Paragraph 5.12

     Trustor warrants and agrees that there is no financing statement covering
the foregoing Collateral, the Property, or any part thereof, on file in any
public office, except for those in favor of Beneficiary and those to be released
upon the recordation hereof.

     1.03. Trustor hereby assigns and transfers to Beneficiary, as additional
security, all damages, royalties and revenue of every kind, nature and
description whatsoever that Trustor may be entitled to receive from any person
or entity owning or having or hereafter acquiring a right to the oil, gas or
mineral rights and reservations of the Property, with the right in Beneficiary
to receive and receipt therefor, and apply the same to the indebtedness secured
hereby either before or after any default hereunder, and Beneficiary may demand,
sue for and recover any such payments but shall not be required to do so.

  B. Definitions of Certain Terms.

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                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

     1.04. As used herein, the following words or terms shall have the following
meanings:

           "Applicable Gaming Laws" has the meaning set forth in Recital C
above.

           "Casino" means a gaming establishment owned, directly or indirectly,
by Trustor and any hotel, building, restaurant, theater, amusement park, other
entertainment facility, parking facilities, retail shops, land, equipment and
other property asset directly ancillary thereto and used or to be used in
connection therewith.

           "Casino License" means any material license, franchise or other
approval or authorization required to own, lease or operate a Casino, or
otherwise conduct gaming in any jurisdiction in which Trustor conducts, or
proposes in good faith to conduct, gaming business, including any applicable
liquor license.

           "Gaming Authorities" has the meaning set forth in Recital C above.

           "Gaming Equipment" means all equipment and supplies used in the
operation of a Casino, including, without limitation, slot machines, gaming
tables, cards, dice, gaming chips, player tracking systems, and all other gaming
devices (as defined in NRS 463.0155), cashless wagering systems (as defined in
NRS 463.014) and associated equipment (as defined in NRS 463.0136)

  C. Obligations Secured.

     1.05. This Deed of Trust is given for the  purpose of  securing,  in such
order of priority as Beneficiary may determine:

           (a) Payment of the indebtedness evidenced by a Reducing Revolving
Promissory Note Secured By Deed of Trust of even date herewith and any renewals,
extensions, modifications or amendments thereof, in the principal amount of
SEVENTEEN MILLION AND NO 100/THS DOLLARS ($17,000,000.00 (the "Note"), executed
by the Borrower, and payable to Beneficiary, together with interest thereon,
which is made a part hereof by reference. The Note contains provisions for
changes in the rate of interest charged thereunder from time to time.

           (b) Payment of such further sums as Borrower, hereafter may borrow
from Beneficiary when evidenced by another note or notes, reciting it is so
secured, payable to Beneficiary or order and made by Borrower, and all renewals,
extensions, modifications or amendments of such note or notes.

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                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

           (c) Payment of all other moneys herein agreed or provided to be paid
by Borrower or Trustor and performance of all other obligations of Borrower or
Trustor contained herein and in the Loan Agreement.

           (d) Performance of each agreement of Trustor contained in any other
agreement given by Trustor to Beneficiary which is for the purpose of further
securing any indebtedness or obligation secured hereby.

II. COVENANTS OF TRUSTOR.

  A. Condition and Operation of Property.

     2.01. Trustor agrees (i) to keep the Property in good condition and repair;
(ii) not to commit or permit any waste or deterioration of the Property; (iii)
not to commit or permit any substantial removal, demolition or alteration of the
Property except for such alterations as may be required by law, ordinance, rule,
regulation or order of any governmental authority having jurisdiction over the
Property, other than as contemplated under the Lease; (iv) to complete in good
and workmanlike manner any construction or restoration which may be performed on
the Property; (v) to promptly restore any portion of the Property which may be
damaged or destroyed; (vi) subject to the Loan Agreement, not to permit any
mechanics' or materialmen's liens against the Property; and (vii) to perform
each of Trustor's obligations set forth in the Loan Agreement.

     2.02. Trustor shall not commit, permit or allow to exist, any material
violation of any law, ordinance, rule, regulation or order of any governmental
authority having jurisdiction over the Property or of any matter of record
affecting the Property.

     2.03. Trustor shall maintain, or cause to be maintained, proper and
accurate books, records and accounts reflecting all items of income and expense
in connection with the operation of the Property or in connection with any
services, equipment or furnishings provided in connection with the operation of
the Property, whether such income or expense be realized by Trustor or by any
other person or entity whatsoever excepting persons unrelated to and
unaffiliated with Trustor.

  B. Insurance.

     2.04. Trustor shall, at all times, provide, maintain and keep in force all
of the following:

           (a) A policy or policies of commercial general liability insurance
with respect to the Property, including but not limited to owners and
contractors liability, contractual liability, personal injury, completed
operations, and broad form property damage, insuring Trustor and Beneficiary, as
their interests may appear, against loss for any occurrence resulting in bodily
injury to or the death of one or more persons and consequential damages arising
therefrom and property damage involving injury or destruction of the tangible
property of third parties in the

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                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

amount of no less than $2,000,000.00, combined single limit. All policies should
be on an "occurrence" basis with Beneficiary named as an additional insured
under such policy or policies.

           (b) A policy or policies of fire hazard insurance insuring the
Property against loss or damage on an "All-Risk" basis and against such other
risks or hazards as Beneficiary may from time to time reasonably designate in
the amount of not less than 100% of the full replacement value of the Property
without deduction for physical depreciation. Beneficiary shall be named as loss
payee under such policy or policies.

           (c) If requested by Beneficiary,  flood insurance upon the Property
in the event that such insurance is available pursuant to the provisions of the
Flood Disaster Protection Act of 1973 or other applicable legislation.
Beneficiary shall reserve the right to require that Trustor secure flood
insurance in excess of the amount provided by the Flood Disaster Protection Act
of 1973, if such insurance is commercially available, up to the amount provided
in Paragraph 2.04(a) hereof.

           (d) If requested by Beneficiary, statutory workers' compensation
insurance (including employer's liability in amounts required by the State
Industrial Insurance System and, if applicable, insurance covering claims of
workers against employers arising under Federal law) covering Trustor and
employees of Trustor, in such form as is reasonably satisfactory to Beneficiary
and in amounts not less than any minimum amounts established by law.

           (e) Such other insurance (including, but not limited to, rent loss
insurance for a period of at least six (6) months and business interruption
insurance), and in such amounts, as may from time to time be reasonably required
by Beneficiary.

           The rights of Beneficiary under such policies shall be subject to the
rights, if any, of the lessor under the Lease. Trustor may fulfill its
obligation for providing the above referenced insurance policies through blanket
insurance coverage. Such insurance policies shall be updated at Lender's
request, but not less frequently than annually during the Loan term.

     2.05. All policies required by Paragraph 2.04, except for workers'
compensation insurance, shall (i) be subject to the reasonable approval of
Beneficiary as to the insuring companies, amount, content and forms of policies
and expiration dates, (ii) with respect to the insurance referred to under
Paragraphs 2.04 (b) and (c) above, contain a Non-Contributory Standard Mortgagee
Clause and the Lender's Loss Payable Endorsement (Form 438 BFU NS), or their
equivalents, in favor of Beneficiary, (iii) with respect to the insurance
referred to under Paragraphs 2.04 (b) and (c) above, provide that the proceeds
thereof shall be payable to Beneficiary (to the extent of its interest), (iv)
provide that it cannot be modified or cancelled, to the extent that such
modification or cancellation substantially affects the Property, or
Beneficiary's interest therein, without thirty days' prior written notice to
Beneficiary, and (v) be primary and non-contributory with any other insurance of
Beneficiary.

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                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

     2.06. Except for workers' compensation insurance, Trustor shall furnish to
Beneficiary a certificate of each policy required under Paragraph 2.04 and, at
least thirty days prior to expiration of any such policy, proof of issuance of a
policy continuing in force the coverage provided by the expiring policy. In the
event Trustor shall fail to maintain the insurance coverage required by this
Deed of Trust, Beneficiary may (but shall be under no obligation to) take out
the required policies of insurance and pay the premiums on the same and all
amounts so advanced therefor by Beneficiary shall become an additional
obligation of Trustor to Beneficiary, which amounts, together with interest
thereon at the Default Rate (as defined and provided for in the Note), Trustor
agrees to pay.

     2.07. After the happening of any casualty insured against under Paragraph
2.04, Trustor shall give prompt written notice thereof to Beneficiary.

     2.08. Trustor hereby assigns to Beneficiary all casualty insurance proceeds
which it may be entitled to receive and such proceeds shall be delivered to and
held by Beneficiary to be applied to the restoration of any portion of the
Property that has been damaged or destroyed to the same condition, character and
value as existed prior to such damage or destruction so long as the following
conditions have been satisfied: (i) Trustor is not in default hereunder; (ii)
Beneficiary's security is not materially impaired; and (iii) Trustor deposits
with Beneficiary any additional amounts necessary to accomplish such
restoration. The proceeds disbursed for restoration will be released to Trustor
under procedures reasonably required by Beneficiary. In the event that the above
conditions are not satisfied, Beneficiary shall have the option to apply the
insurance proceeds upon any indebtedness secured hereby in such order as
Beneficiary may determine or release such proceeds to Trustor without such
release being deemed a payment of any indebtedness secured hereby, rather than
to apply such proceeds to the restoration of the Property. Such application or
release shall not cure or waive any default or notice of default hereunder or
invalidate any act done pursuant to such notice. If the Property is restored at
a cost less than the available insurance proceeds and deposits, then such excess
proceeds and deposits shall, if Trustor is not then in default hereunder, be
paid over to Trustor.

     2.09. In the event of the foreclosure of this Deed of Trust or other
transfer of the title to the Property in extinguishment, in whole or in part, of
the indebtedness secured hereby, all right, title and interest of Trustor in and
to any insurance policy then in force shall pass to the purchaser or grantee to
the extent that such insurance policy affects the Property.

  C. Payments.

     2.10. Trustor shall pay the principal, interest and other charges due under
the Note and the Loan Agreement according to their terms.

     2.11. Trustor shall pay or cause to be paid:

           (a) Subject to any right of contest contained in the Loan Agreement,
prior to the assessment of any penalty or delinquency, all taxes, assessments
and other governmental or

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                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

public charges affecting the Property, including assessments on appurtenant
water stock, and any accrued interest, cost and/or penalty thereon and shall
submit paid receipt therefor to Beneficiary upon request.

           (b) When due, all encumbrances (including any debt secured by deed of
trust), ground rents, liens, and/or charges, with interest, on the Property or
any part thereof which appear to be prior or superior hereto and all costs, fees
and expenses related thereto.

           (c) When due, all charges for utilities or services including, but
not limited to, electricity, gas, water and sewer.

     2.12. At the request of Beneficiary, Trustor shall pay to Beneficiary on
the first day of each month, together with and in addition to the regular
installments of principal and interest due under the Note, until the
indebtedness secured hereby is paid in full, an amount equal to one-twelfth
(1/12) of the yearly taxes and assessments, insurance premiums, and other
similar charges as estimated by Beneficiary to be sufficient to enable
Beneficiary to pay at least thirty (30) days before they become due, all taxes,
assessments, insurance premiums, and other similar charges against the Property.
Beneficiary shall not be obligated to pay interest on any such sums. Upon demand
of Beneficiary, Trustor shall deliver to Beneficiary such additional sums as are
necessary to enable Beneficiary to pay such taxes, assessments, insurance
premiums and similar charges. Provided that there then exists no Event of
Default under the Loan Agreement, Beneficiary shall apply such sums to the
payment of taxes, assessments and/or insurance premiums, as appropriate.

     2.13. Trustor shall pay immediately, upon demand, after expenditure, all
sums expended or expenses incurred by Trustee and/or Beneficiary under any of
the terms of this Deed of Trust, including without limitation, any fees and
expenses (including reasonable attorneys' fees) incurred in connection with any
reconveyance of the Property or any portion thereof, or to compel payment of the
Note or any portion of the indebtedness evidenced thereby or in connection with
any default thereunder, including without limitation attorneys' fees incurred in
any bankruptcy or judicial or nonjudicial foreclosure proceeding, with interest
from date of expenditure at the Interest Rate provided for in the Note.

     2.14. Trustor shall pay the reasonable amount demanded by Beneficiary or
its authorized servicing agent for any statement regarding the obligations
secured hereby; provided, however, that such amount may not exceed the maximum
amount allowed by law at the time request for the statement is made.

  D. Leasehold Mortgage Provisions.

     2.15. Trustor hereby warrants and represents as follows with respect to:

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                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

           (a) The Lease is in full force and effect, unmodified by any writing
or otherwise,  except as has been specifically disclosed to Beneficiary;

           (b) All rent, additional rent, and other charges reserved in the
Lease have been paid to the extent they are payable as of the date hereof;

           (c) Trustor enjoys the quiet and peaceful possession of the Land
pursuant to the terms of the Lease;

           (d) Trustor is not in default under any of the terms of the Lease,
and, to the best of Trustor's knowledge, there are no circumstances which, with
the passage of time or the giving of notice or both, would constitute an event
of default under the Lease; and

           (e) To the best of Trustor's knowledge the lessor under the Lease
(the "Lessor") is not in default under any of the terms or provisions thereof on
the part of the Lessor to be observed or performed.

     2.16. Trustor further covenants and agrees as follows:

           (a) Trustor shall promptly and faithfully observe, perform, and
comply with all the terms, covenants, and provisions of the Lease on Trustor's
part to be observed, performed, and complied with, at the times set forth in the
Lease, without any allowance for grace periods, if any;

           (b) Trustor shall not do, permit, suffer, or refrain from doing
anything as a result of which there could be a default under or breach of any of
the terms of the Lease;

           (c) Except for renewals, extensions and rent re-determinations
pursuant to the terms of the Lease, Trustor shall not cancel, surrender, modify,
amend, or in any way alter or permit the alteration of any of the terms of the
Lease without the prior written consent of Beneficiary, which consent shall not
be unreasonably withheld or delayed;

           (d) Trustor shall give Beneficiary immediate notice of any default by
any party to the Lease and promptly deliver to Beneficiary a copy of each notice
of default received by Trustor in connection with the Lease;

           (e) Trustor shall furnish to Beneficiary copies of such information
and evidence as Beneficiary may reasonably require concerning Trustor's due
observance, performance, and compliance with the terms, covenants and provisions
of the Lease; and

           (f) Any material default by Trustor under the Lease shall constitute
a default hereunder.

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                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

     2.17. Trustor agrees that the fee title and the leasehold estate in the
Land under the Lease shall not merge but shall always be kept separate and
distinct, notwithstanding the union of said estates in either the Lessor
thereunder, Trustor, or a third party, whether by purchase or otherwise. If
Trustor acquires the fee title or any other estate, title, or interest in the
Land, or any part thereof, the lien of this Deed of Trust shall attach to,
encumber, and be a lien upon such acquired estate, title, or interest, with the
same force and effect as if specifically encumbered herein. Trustor agrees to
execute all instruments and documents which Beneficiary may reasonably require
to ratify, confirm, and further evidence Beneficiary's lien on the acquired
estate, title, or interest. Furthermore, Trustor hereby appoints Beneficiary its
true and lawful attorney-in-fact to execute and deliver all such instruments and
documents in the name and on behalf of Trustor. This power, being coupled with
an interest, shall be irrevocable as long as the indebtedness secured hereby
remains unpaid.

     2.18. If the Lease is cancelled or terminated, and if Beneficiary or its
nominee shall acquire an interest in any new lease of the Land, Trustor shall
have no right, title, or interest in or to the new lease or the leasehold estate
created by such new lease.

     2.19. Trustor shall use its best efforts to obtain and deliver to
Beneficiary within twenty (20) days after written demand by Beneficiary, an
estoppel certificate from the Lessor under the Lease setting forth: (i) the name
of the Lessor thereunder; (ii) that the Lease has not been modified or, if it
has been modified, the date of each modification (together with copies of each
such modification); (iii) the basic rent payable under the Lease; (iv) the date
to which all rental charges have been paid by the tenant under the Lease; (v)
whether, to Lessor's knowledge, there are any alleged defaults, or existing
conditions that, with or without notice or after lapse of time could constitute
an alleged default, of the tenant under the Lease and, if there are, setting
forth the nature thereof in reasonable detail; and (vi) agreeing to furnish
Beneficiary with written notice of any default by Trustor thereunder.

     2.20. Notwithstanding any provision to the contrary or apparently to the
contrary contained in this Deed of Trust, Beneficiary shall have no liability or
obligation under the Lease by reason of its acceptance of this Deed of Trust.
Beneficiary shall be liable for the obligations of the tenant arising under the
Lease for only that period of time which Beneficiary is in possession of the
Land, or has acquired, by foreclosure or otherwise, and is holding all of
Trustor's right, title, and interest therein.

     2.21. Trustor further covenants and agrees as follows:

           (a) If there shall be filed by or against Trustor a petition under
the Bankruptcy Code (11 U.S.C. ` 101 et seq.), and Trustor, as lessee under the
Lease, shall determine to reject the Lease pursuant to the Bankruptcy Code,
Trustor shall give Beneficiary not less than ten (10) days' prior notice of the
date on which Trustor shall apply to the Bankruptcy Court for authority to
reject the Lease. Beneficiary shall have the right, but not the obligation, to
serve upon Trustor within such ten-day period a notice stating that: (i)
Beneficiary demands that Trustor assume and assign the Lease to Beneficiary
pursuant to Section 365 of the Bankruptcy Code; and (ii) Beneficiary

                                       12

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

covenants to cure or provide adequate assurance of prompt cure of all defaults
and provide adequate assurance of future performance under the Lease. If
Beneficiary serves upon Trustor the notice described in the preceding sentence,
Trustor shall not seek the rejection of the Lease and shall comply with the
demand provided for in clause (i) within thirty (30) days after the notice shall
have been given, subject to the performance by Beneficiary of the covenant
provided for in clause (ii); and

           (b) Effective upon the entry of an order for relief in respect of
Trustor under the Bankruptcy Code, Trustor hereby assigns and transfers to
Beneficiary a non-exclusive right to apply to the Bankruptcy Court for an order
extending the period during which the Lease may be rejected or assumed.

  E. Condemnation.

     2.22. If the Property, or any part thereof, is taken or damaged by reason
of any public improvement or condemnation proceeding, or in any other manner,
Beneficiary shall be entitled to all compensation, awards and other payments or
relief therefor to which Trustor shall be entitled, and shall be entitled at its
option to commence, appear in and prosecute in its own name any action or
proceeding or to make any compromise or settlement in connection with such
taking or damage to the extent of the interests of Trustor therein. All such
compensation, awards, damages, rights of action and proceeds to which Trustor
shall be entitled (the "Proceeds") are hereby assigned to Beneficiary, who shall
after deducting therefrom all its reasonable expenses, including attorneys'
fees, apply or release the Proceeds with the same effect and as provided in
Paragraph 2.08 above with respect to disposition of insurance proceeds;
provided, that if there are any excess Proceeds after application thereof to the
restoration of the Property, Beneficiary shall be entitled to apply such excess
to the reduction of the principal balance due under the Note. Trustor agrees to
execute such further assignments of the Proceeds as Beneficiary or Trustee may
require. Nothing herein contained shall prevent the accrual of interest as
provided in the Note on any portion of the Note to be paid by the Proceeds until
the Proceeds are received by Beneficiary.

  F. Rents and Leases.

     2.23. Trustor shall submit to Beneficiary for its prior written approval
the form of the tenant lease to be used by Trustor for leasing any portion of
the Improvements, and after approval by Beneficiary, Trustor shall not
materially modify such form of lease without the prior written consent of
Beneficiary. Beneficiary shall approve, or give reasonable justification for not
approving, such Lease modification within five (5) days following request by
Trustor. Notwithstanding the foregoing, Trustor may modify any Lease to increase
the leased premises thereunder without Beneficiary's consent provided that the
rent for such increased premises shall be not less than the existing rent under
such Lease. Trustor shall promptly provide Beneficiary with a copy of any Lease
modification. Trustor shall not accept prepayments of rent for more than one (1)
month, and up to two (2) months' rent as security deposits, and shall perform
all covenants of the lessor under all leases affecting the Property (other than
the Lease) ("Leases"). "Leases", as used herein, includes any extensions or
renewals thereof and any amendments consented to by Beneficiary. Except in the

                                       13

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

event of a default under any Lease, Trustor shall not terminate any Lease
without the prior written consent of Beneficiary and shall not consent to any
assignment under any Lease without the prior written consent of Beneficiary
unless Trustor is required to consent thereto under the terms of such Lease.
Trustor shall immediately give notice to Beneficiary of any default under any of
the Leases it receives or delivers. Beneficiary shall have the right but not the
obligation, to cure any default of Trustor under any of the Leases (if such
default is not cured by Trustor within fifteen (15) days following written
notice thereof to do so) and all amounts disbursed in connection with said cure
shall be deemed to be disbursements under the Loan Agreement.

     2.24. Each Lease of any portion of the Improvements shall be absolutely
subordinate to the lien of this Deed of Trust but Beneficiary hereby agrees that
in the event of the exercise of the private power of sale or a judicial
foreclosure hereunder such lease shall not be terminated and shall contain a
provision satisfactory to Beneficiary that the tenant thereunder shall attorn to
such purchaser and, if requested to do so, shall enter into a new Lease for the
balance of the term of such Lease then remaining upon the same terms and
conditions. Each such Lease shall, at the request of Beneficiary, be assigned to
Beneficiary and each such assignment shall be recorded.

     2.25. Notwithstanding anything to the contrary contained herein, but
subject to Applicable Gaming Laws as of the execution of this Deed of Trust, or
as amended from time to time, Trustor hereby absolutely and unconditionally
assigns and transfers to Beneficiary all the leases, income, rent, issues,
deposits, profits and proceeds of the Property to which Trustor may be entitled,
whether now due, past due or to become due, and hereby gives to and confers upon
Beneficiary the right, power and authority to collect such income, rents,
issues, deposits, profits and proceeds of the Property to which Trustor may be
entitled, whether now due, past due or to become due. The assignment of the
Leases constitutes an irrevocable direction and authorization of all tenants
under the Leases to pay all rent, income and profits into an account specified
by Beneficiary upon demand and without further consent or other action by
Trustor. Trustor irrevocably appoints Beneficiary its true and lawful attorney,
at the option of Beneficiary at any time, to demand, receive and enforce
payment, to give receipts, releases, and satisfactions, and to sue, either in
the name of Trustor or in the name of Beneficiary, for all such income, rents,
issues, deposits, profits and proceeds and apply the same to the indebtedness
secured hereby. It is understood and agreed that neither the foregoing
assignment of leases, income, rents, issues, deposits, profits and proceeds to
Beneficiary nor the exercise by Beneficiary of any of its rights or remedies
under this Paragraph 2.25 or under Paragraph 2.35 hereof shall be deemed to make
Beneficiary a "mortgagee-in-possession" or otherwise responsible or liable in
any manner with respect to the Property or the use, occupancy, enjoyment or
operation of all or any portion thereof. Notwithstanding anything to the
contrary contained herein or in the Note secured hereunder, so long as no Event
of Default, as defined in the Loan Agreement, shall have occurred, Trustor shall
have a license to collect all income, rents, issues, deposits, profits and
proceeds from the Property. Upon the occurrence of an Event of Default, such
license shall be deemed revoked and any rents received thereafter by Trustor
shall be delivered in kind to Beneficiary. Trustor hereby irrevocably
constitutes and appoints Beneficiary its true and lawful attorney-in-fact to
enforce in Trustor's name or in Beneficiary's name or otherwise all rights of

                                       14

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada

                                 (702) 222-2500

<PAGE>

Trustor in the instruments, including without limitation checks and money
orders, tendered as payments of rents and to do any and all things necessary and
proper to carry out the purposes hereof.

  G. Other Rights and Obligations.

     2.26. In addition to any other grant, transfer or assignment effectuated
hereby, without in any manner limiting the generality of the grants in Article I
hereof, Trustor shall collaterally assign to Beneficiary Trustor's interest in
all agreements, contracts, leases (excluding Casino Licenses), licenses and
permits affecting the Property in any manner whatsoever, such assignments to be
made, if so requested by Beneficiary, by instruments in form satisfactory to
Beneficiary but no such assignment shall be construed as a consent by
Beneficiary to any agreement, contract, license or permit so assigned, or to
impose upon Beneficiary any obligations with respect thereto.

     2.27. In the event of the passage, after the date of this Deed of Trust, of
any law deducting from the value of the Property for the purpose of taxation,
any lien thereon, or changing in any way the laws now in force for the taxation
of deeds of trust or debts secured by deeds of trust, or the manner of the
collection of any such taxes, so as to affect this Deed of Trust, or imposing
payment of the whole or any portion of any taxes, assessments or other similar
charges against the Property upon Beneficiary, the indebtedness secured hereby
shall immediately become due and payable at the option of Beneficiary; provided,
however, that such election by Beneficiary shall be ineffective if such law
either (a) shall not impose a tax upon Beneficiary nor increase any tax now
payable by Beneficiary or (b) shall impose a tax upon Beneficiary or increase
any tax now payable by Beneficiary and prior to the due date: (i) Trustor is
permitted by law and can become legally obligated to pay such tax or the
increased portion thereof (in addition to all interest, additional interest and
other charges payable hereunder and under the Note) without exceeding the
applicable limits imposed by the usury laws of the State of Nevada; (ii) Trustor
does pay such tax or increased portion; and (iii) Trustor agrees with
Beneficiary in writing to pay, or reimburse Beneficiary for the payment of, any
such tax or increased portion thereof when thereafter levied or assessed against
the Property or any portion thereof. The obligations of Trustor under such
agreement shall be secured hereby.

     2.28. If required by Beneficiary at any time during the term of this Deed
of Trust, Trustor will execute and deliver to Beneficiary, in form satisfactory
to Beneficiary, an additional security agreement and/or financing statement
covering all personal property of Trustor which may at any time be furnished,
placed on, or annexed or made appurtenant to the Property and used, useful or
held for use, in the operation of the improvements thereon. Any breach of or
default under such security agreement shall constitute an event of default under
this Deed of Trust.

     2.29. Trustor shall do any and all acts which, from the character or use of
the Property or the Collateral, may be reasonably necessary to protect and
preserve the security of Beneficiary, the specific enumerations herein not
excluding the general.

                                       15

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

     2.30. Trustor will faithfully perform each and every covenant to be
performed by Trustor under any lien or encumbrance upon or affecting the
Property, including, without limiting the generality hereof, mortgages, deeds of
trust, leases, declaration of covenants, easements, conditions and/or
restrictions and other agreements which affect the Property, in law or in
equity, which Beneficiary reasonably believes may be prior and superior to the
lien or charge of this Deed of Trust. A breach of or a default under any such
lien or encumbrance shall constitute an event of default under this Deed of
Trust.

     2.31. Upon election of either Beneficiary or Trustee so to do, employment
of an attorney is authorized and payment by Trustor of all attorneys' fees,
costs and expenses in connection with any action and/or actions (including the
cost of evidence or search of title), which may be brought for the foreclosure
of this Deed of Trust, and/or for possession of the property covered hereby,
and/or for the appointment of a receiver, and/or for the enforcement of any
covenant or right in this Deed of Trust contained as hereinafter provided shall
be secured hereby.

     2.32. No personal property covered by the security interest granted herein
may be removed from the Property without the prior written consent of
Beneficiary unless Trustor shall immediately replace such personal property with
similar property of equivalent value on which Beneficiary has a valid first
lien, or unless such removal shall not result in any substantial impairment of
Beneficiary's security hereunder.

     2.33. Except for subleases of portions of the Property in the ordinary
course of business, in the event that the interest of Trustor in the Property,
or any part thereof, or any interest therein is sold, conveyed, alienated,
further encumbered or otherwise transferred by Trustor, whether by operation of
law or otherwise, the Note, irrespective of the maturity dates expressed
therein, at the option of Beneficiary, and without demand or notice, shall
immediately become due and payable. In the event that Beneficiary does not elect
to declare the Note immediately due and payable, then, unless indicated
otherwise in writing by Beneficiary, Trustor shall nevertheless remain primarily
liable for the obligations hereunder and under the Note and any other instrument
securing the Note. This provision shall apply to each and every sale,
conveyance, alienation, encumbrance or transfer, regardless of whether or not
Beneficiary has consented to, or waived, Beneficiary's rights hereunder, whether
by action or non-action, in connection with any previous sale, conveyance,
alienation, encumbrance or transfer and whether or not the holder has received
any payments after said transfer. Notwithstanding the foregoing, Beneficiary
understands that Trustor intends to further encumber all or a portion of the
Property with a deed of trust in favor of Prospector Gaming Enterprises, Inc., a
Nevada corporation, to secure an obligation in a principal amount not to exceed
$6,000,000. Beneficiary consents to such further encumbrance so long as the
lien thereof shall at all times be subject and subordinate to the lien of this
Deed of Trust.

     2.34. Trustor agrees to execute such documents and take such action as
Beneficiary shall reasonably determine to be necessary or desirable to further
evidence, perfect or continue the perfection of the lien and security interest
granted by Trustor herein.

                                       16

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

     2.35. Following a fifteen (15) day written notice to Trustor (unless
Beneficiary reasonably determines that emergency circumstances exist which would
make the giving of such notice impractical), unless Trustor is contesting such
matter in accordance with the loan documents executed in connection herewith, at
the time and in the manner herein provided, Beneficiary may, without releasing
Trustor from any obligation hereunder and without waiving its right to declare a
default or impairing any declaration of default as herein provided or any sale
proceeding predicated thereon:

           (a) Make any payment or perform any act in such manner and to such
extent as either may deem necessary to protect the security hereof, Beneficiary
and Trustee being authorized to enter upon and take possession of the Property
for such purposes;

           (b) Commence, appear in and/or defend (except for actions commenced
by Beneficiary) any action or proceedings purporting to affect the security
hereof, and/or any additional or other security therefor, and/or the interests,
rights, powers and/or duties of Trustee and/or Beneficiary hereunder, whether
brought by or against Trustor, Trustee or Beneficiary (Trustor shall also have
the right to appear in or defend any such action and Trustor and Beneficiary
shall reasonably cooperate in any action or proceeding in which their interests
are the same or similar);

           (c) Pay, purchase, contest or compromise any claim, debt, lien,
charge or encumbrance which in the judgment of either may affect or appear to
affect the security of this Deed of Trust, the interest of Beneficiary or the
rights, powers and/or duties of Trustee and/or Beneficiary hereunder; and

           (d) Upon an Event of Default hereunder or under the Note, and subject
to the provisions of the Lease, the rights of subtenants, and the laws,
regulations and policies of any governmental or quasi-governmental agency with
jurisdiction over the Property, Beneficiary is authorized either by itself or by
its agents to be appointed by it for that purpose or by a receiver appointed by
a court of competent jurisdiction, to enter into and upon and take and hold
possession of any portion or all of the Property, both real and personal, and
exclude Trustor and all other persons therefrom; and to operate and manage the
Property and rent and lease the same, perform such reasonable acts of repair or
protection as may be reasonably necessary or proper to conserve the value
thereof, and collect any and all income, rents, issues, profits and proceeds
therefrom, the same being hereby assigned and transferred to Beneficiary for the
benefit and protection of Beneficiary (subject to the license in favor of
Trustor granted above), and from time to time apply and/or accumulate such
income, rents, issues, profits and proceeds in such order and manner as
Beneficiary or such receiver in its sole discretion shall consider advisable, to
or upon the following: the expense of receivership, if any, the proper costs of
upkeep, maintenance, repair and/or operation of the Property, the repayment of
any sums theretofore or thereafter advanced pursuant to the terms of this Deed
of Trust upon the indebtedness secured hereby, the taxes and assessments upon
the Property then due or next to become due, and/or upon the unpaid principal of
such indebtedness. The collection and/or receipt of income, rents, issues,
profits and/or proceeds from the Property by Beneficiary, its agent or receiver,
after declaration of default and election to cause the Property to be

                                       17

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

sold under and pursuant to the terms of this Deed of Trust shall not affect or
impair such default or declaration of default or election to cause the Property
to be sold or any sale proceedings predicated thereon, but such proceedings may
be conducted and sale effected notwithstanding the receipt and/or collection of
any such income, rents, issues, profits and/or proceeds. Any such income, rents,
issues, profits and/or proceeds in the possession of Beneficiary, its agent or
receiver, at the time of sale and not theretofore applied as herein provided,
shall be applied in the same manner and for the same purposes as the proceeds of
the sale. Neither Trustee nor Beneficiary shall be under any obligation to make
any of the payments or do any of the acts referred to in this Paragraph and any
of the actions referred to in this Paragraph may be taken by Beneficiary
irrespective of whether any notice of default or election to sell has been given
hereunder and without regard to the adequacy of the security for the
indebtedness evidenced by the Note.

III. DEFAULTS AND REMEDIES.
     ---------------------

  A. Defaults.

     3.01. An Event of Default under the Loan Agreement shall be an Event of
Default hereunder.

  B. Remedies.

     3.02. Upon the occurrence of any Event of Default hereunder, or under the
Loan Agreement or any other documents executed in connection herewith, then and
in each such event, Beneficiary may declare all sums secured hereby immediately
due and payable either by commencing an action to foreclose this Deed of Trust
as a mortgage, or by the delivery to Trustee of a written declaration of default
and demand for sale and of written notice of default and of election to cause
the Property to be sold, which notice Trustee shall cause to be duly filed for
record in case of foreclosure by exercise of the power of sale herein. Should
Beneficiary elect to foreclose by exercise of the power of sale herein,
Beneficiary shall also deposit with Trustee this Deed of Trust, the Note and
such receipts and evidence of expenditures made and secured hereby as Trustee
may require, and notice of sale having been given as then required by law and
after lapse of such time as may then be required by law after recordation of
such notice of default, Trustee, without demand on Trustor, shall sell the
Property at the time and place of sale fixed by it in said notice of sale,
either as a whole or in separate parcels, and in such order as it may determine,
at public auction to the highest bidder for cash in lawful money of the United
States, payable at time of sale. Trustee may postpone sale of all or any portion
of the Property by public announcement at such time and place of sale, and from
time to time thereafter may postpone such sale by public announcement at the
time fixed by the preceding postponement. Trustee shall deliver to such
purchaser its deed or deeds conveying the Property, or any portion thereof, so
sold, but without any covenant or warranty, express or implied. The recitals in
such deed or deeds of any matters or facts shall be conclusive proof of the
truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may
purchase at such sale.

                                       18

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

     3.03. Beneficiary, from time to time before Trustee's sale, may rescind any
such notice of breach or default and of election to cause the Property to be
sold by executing and delivering to Trustee a written notice of such rescission,
which notice, when recorded, shall also constitute a cancellation of any prior
declaration of default and demand for sale. 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 of default
and demand for sale, and notices of breach or default, and of election to cause
the Property to be sold to satisfy the obligations hereof, nor otherwise affect
any provision, agreement, covenant or condition of the Note, the Loan Agreement
and/or of this Deed of Trust or any of the rights, obligations or remedies of
the parties hereunder.

     3.04. After deducting all costs, fees and expenses of Trustee and of this
Trust, including the cost of evidence of title in connection with sale and
attorneys' fees, Trustee shall apply the proceeds of sale as required by
applicable law.

     3.05. If Beneficiary at any time holds additional security for any
obligations secured hereby, it may enforce the terms hereof or otherwise realize
upon the same, at its option, either before or concurrently herewith or after a
sale is made hereunder, and may apply the proceeds upon the indebtedness secured
hereby without affecting the status of or waiving any right to exhaust all or
any other security, including the security hereunder, and without waiving any
breach or default or any right or power whether exercised hereunder or contained
herein or in any such other security.

     3.06. No remedy herein conferred upon or reserved to Trustee or Beneficiary
is intended to be exclusive of any other remedy herein or by law provided or
permitted, but each shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute. Every power or remedy given by this instrument to Trustee or
Beneficiary or to which either of them may be otherwise entitled, may be
exercised concurrently or independently, from time to time and as often as may
be deemed expedient by Trustee or Beneficiary and either of them may pursue
inconsistent remedies.

     3.07. Subject to any notice requirement and opportunity to cure contained
herein, in the case of an Event of Default hereunder, Beneficiary, as a matter
of right and without notice to Trustor or anyone claiming under it, and without
regard to the then value of the Property or the interest of Trustor therein,
shall have the right to apply to any court having jurisdiction to appoint a
receiver or receivers of the Property, and Trustor hereby irrevocably consents
to such appointment and waives notice of any application therefor. Any such
receiver or receivers shall have all the usual powers and duties of receivers in
like or similar cases and all the powers and duties of Beneficiary in case of
entry as provided herein and shall continue as such and exercise all such powers
until the date of confirmation of sale of the Property unless such receivership
is sooner terminated.

     3.08. Beneficiary and Trustee acknowledge, understand and agree that, to
the extent the prior approval of the Gaming Authorities of the State of Nevada
is required pursuant to applicable law for the exercise, operation and
effectiveness of any remedy hereunder or under any

                                       19

                       Hale Lane Peek Dennison and Howard
                         Attorneys and Counsellort Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

other Loan Document (as defined in the Loan Agreement), or the taking of any
action that may be taken by Beneficiary or Trustee hereunder or under any other
Loan Document, including without limitation the taking of possession and
disposition of collateral consisting of gaming devices, cashless wagering
systems and associated equipment (as those terms are defined in Nevada Revised
Statutes 463.0155, 463.014 and 463.0136), such remedy or action shall be subject
to such prior approval of the Gaming Authorities of the State of Nevada and the
Beneficiary or Trustee may be subject to being called forward for licensing or a
finding of suitability. All rights, remedies and powers provided in this Deed of
Trust may be exercised only to the extent that the exercise thereof does not
violate any provision of Applicable Gaming Laws, and all provisions of this Deed
of Trust are intended to be subject to all mandatory provisions of the
Applicable Gaming Laws, which may be controlling.

     3.09. All rights, remedies and powers in this Deed of Trust may be
exercised only to the extent that the exercise thereof does not violate any
provision of the Applicable Gaming Laws, and all the provisions of this Deed of
Trust are intended to be subject to all mandatory provisions of the Applicable
Gaming Laws which may be controlling.

IV.  COLLATERAL.
     ----------

     4.01. With respect to the security interest granted in Paragraph 1.02,
Beneficiary shall have all the rights and remedies granted to a secured party
under Article 9 of the Uniform Commercial Code, as well as all other rights and
remedies available at law or in equity; provided that Beneficiary shall first
apply for and receive all required approvals of the Gaming Authorities having
jurisdiction over the sale and disposition of Gaming Equipment prior to the sale
or disposition thereof. Upon an Event of Default, Trustor shall, upon the demand
of Beneficiary, assemble all of such personal property and make it available to
Beneficiary at the Property, which is hereby agreed to be reasonably convenient
to Beneficiary. The proceeds of any sale of such personal property shall be
applied first to the expenses of Beneficiary in retaking, holding, preparing for
sale, selling or similar matters, including reasonable attorney's fees.

     4.02. Until Beneficiary exercises its right to collect proceeds of the
Collateral pursuant hereto, Trustor will collect with diligence any and all
proceeds of the Collateral. Upon an Event of Default and written request by
Beneficiary, any proceeds received by Trustor shall be in trust for Beneficiary,
and Trustor shall keep all such collections separate and apart from all other
funds and property so as to be capable of identification as the property of
Beneficiary and shall deliver such collections at such time as Beneficiary may
request to Beneficiary in the identical form received, properly endorsed or
assigned when required to enable Beneficiary to complete collection thereof.

     4.03. Trustor shall (i) permit representatives of Beneficiary to inspect
the Collateral and Trustor's books and records relating to the Collateral and
make extracts therefrom and to arrange for verification of the amount of
Collateral, under reasonable procedures acceptable to Beneficiary, at Trustor's
expense; (ii) promptly notify Beneficiary of any attachment or other legal
process levied

                                       20

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

against any of the Collateral; (iii) reimburse Beneficiary upon demand for any
and all costs, including without limitation reasonable attorneys' and
accountants' fees, and other expenses incurred in collecting any sums payable by
Trustor under any obligation secured hereby, or in the checking, handling and
collection of the Collateral and the preparation and enforcement of any
agreement relating thereto; (iv) notify Beneficiary of each location at which
the Collateral is or will be kept, other than for temporary processing, storage
or similar purposes, and of any removal thereof to a new location; (v) provide,
maintain and deliver to Beneficiary certificates of insurance insuring the
Collateral against loss or damage by such risks and in such amounts, forms and
by such companies as Beneficiary may reasonably require and with loss payable to
Beneficiary, and in the event Beneficiary takes possession of the Collateral,
the insurance policy or policies and any unearned or returned premium thereon
shall at the option of Beneficiary become the sole property of Beneficiary
unless such insurance is effected through blanket policies; (vi) do all acts
necessary to maintain, preserve and protect all Collateral, keep all Collateral
in good condition and repair and prevent any waste or unusual or unreasonable
depreciation thereof; and (vii) join with Beneficiary at its request from time
to time in executing financing statements, amendments thereto and continuation
statements, and pay the cost of the filing of the same whenever Beneficiary
reasonably deems desirable, and execute and deliver to Beneficiary further
documents and instruments and do such other acts and things as Beneficiary may
reasonably request in order to effectuate fully the purposes and intent hereof.
Trustor hereby authorizes Beneficiary to file financing statements, amendments,
and continuation statements in such filing offices as Beneficiary may determine
appropriate in connection with the security interest granted herein.

     4.04. Beneficiary may at any time, without prior notice to Trustor, collect
proceeds of the Collateral and may give notice of assignment to any and all of
Trustor's debtors, and Trustor does hereby irrevocably constitute and appoint
Beneficiary its true and lawful attorney-in-fact to enforce in Trustor's name or
in Beneficiary's name or otherwise all rights of Trustor in the Collateral and
to do any and all things necessary and proper to carry out the purposes hereof;
provided, however, Trustor shall have the right to collect, retain, use and
enjoy such proceeds and enforce such rights subject to the terms hereof and the
documents securing Trustor's obligations hereunder prior to any Event of Default
under the Loan Agreement. It is hereby recognized that the power of attorney
herein granted is coupled with an interest and shall not be revocable and
Beneficiary shall have the right to exercise this power of attorney upon any
Event of Default under the Loan Agreement. (Beneficiary shall promptly notify
Trustor of any action taken by Beneficiary pursuant to this provision but
Beneficiary's failure to do so shall not invalidate any such act, affect any of
Trustor's obligations to Beneficiary or give rise to any right, claim or defense
on the part of Trustor).

V.   MISCELLANEOUS PROVISIONS.
     ------------------------

     5.01. By accepting payment of any sum secured hereby after its due date or
in an amount less than the sum due, Beneficiary does not waive its rights either
to require prompt payment when due of all other sums so secured or to declare a
default as herein provided for failure to pay the total sum due.

                                       21

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

     5.02. At any time, or from time to time, without liability therefor and
without notice, upon written request of Beneficiary and presentation of this
Deed of Trust and the Note for endorsement, and without affecting the personal
liability of any person for payment of the indebtedness secured hereby or the
effect of this Deed of Trust upon the remainder of the Property, Trustee may:
reconvey any part of the Property; consent in writing to the making of any map
or plat thereof; join in granting any easement thereon; or join in any extension
agreement or any agreement subordinating the lien or charge hereof.

     5.03. Beneficiary shall be subrogated for further security to the lien,
although released of record, of any and all encumbrances paid out of the
proceeds of the loan secured by this Deed of Trust.

     5.04. Subject to the provisions of the Lease, the rights of any subtenants,
and any laws, regulations and policies of any governmental or quasi-governmental
entity with jurisdiction over the Property, Beneficiary is authorized by itself,
its agents, employees or workmen, to enter at any reasonable time upon any part
of the Property for the purpose of inspecting the same, and for the purpose of
performing any of the acts it is authorized to perform under the terms of the
Loan Agreement and this Deed of Trust.

     5.05. Subject to the provisions of Paragraph 2.33 hereof, this Deed of
Trust applies to, inures to the benefit of, and binds all parties hereto, their
heirs, legatees, devisees, administrators, executors, successors and assigns.
The term "Beneficiary" shall mean the owner and holder, including pledgees, of
the Note, now or hereafter and whether or not named as Beneficiary herein. In
this Deed of Trust, whenever the context so requires, the masculine gender
includes the feminine and/or neuter, and the singular number includes the
plural.

     5.06. Trustee, upon presentation to it of an affidavit signed by or on
behalf of Beneficiary, setting forth any fact or facts showing a default by
Trustor under any of the terms or conditions of this Deed of Trust, is
authorized to accept as true and conclusive all facts and statements in such
affidavit and to act hereunder in complete reliance thereon.

     5.07. If any provision hereof should be held unenforceable or void, then
such provision shall be deemed separable from the remaining provisions and shall
in no way affect the validity of this Deed of Trust.

     5.08. Trustee accepts this Trust when this Deed of Trust, duly executed and
acknowledged, is made a public record as provided by law. The Trust created
hereby is irrevocable by Trustor.

     5.09. Trustee shall be under no obligation to notify any party hereto of
any action or proceeding of any kind in which Trustor, Beneficiary and/or
Trustee shall be a party, unless brought by Trustee, or of any pending sale
under any other deed of trust.

                                       22

                       Hale Lane Peek Dennison and Howard
                         Attorneysnd Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

     5.10. Beneficiary may, from time to time, by a written instrument executed
and acknowledged by Beneficiary and recorded in the county or counties where the
Property is located, substitute a successor or successors for the Trustee named
herein or acting hereunder.

     5.11. The right to plead any and all statutes of limitation as a defense to
any demand secured by this Deed of Trust is hereby waived to the full extent
permitted by law.

     5.12. All notices hereunder shall be deemed to have been duly given if by
telefax, delivered by courier service or mailed by United States or Canadian
registered or certified mail, with return receipt requested, postage prepaid to
the parties at the following addresses (or at such other addresses as shall be
given in writing by any party to the others) and shall be deemed complete upon
such personal delivery, or on the first day following receipt by courier service
or telefax, or five (5) business days following mailing:

         To Trustor:                        Last Chance, Inc.
                                            345 N. Arlington
                                            Reno, Nevada  89501

         To Beneficiary:                    Nevada State Bank
                                            P.O. Box 2351
                                            Reno, Nevada 89505

     5.13. Trustor requests that a copy of any notice of default and of any
notice of sale hereunder be mailed to Trustor at the address set forth above.

     5.14. Upon written request of Beneficiary stating that all sums secured
hereby have been paid and upon surrender to Trustee of this Deed of Trust and
the Note for cancellation and upon payment of its fees, Trustee shall reconvey,
without warranty, the Property then held hereunder. 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 thereto". Upon such reconveyance, any
security interest granted herein shall be terminated.

     5.15. Without affecting the liability or obligations of any person,
including Trustor, for the performance of any obligations secured hereby
(excepting only any person or property otherwise expressly released in writing
by Beneficiary), Beneficiary may from time to time and without notice release
any person liable for payment of any of said indebtedness or the performance of
said obligations, extend the time of payment or (with the consent of Trustor)
otherwise alter the terms of any of said obligations, accept additional security
therefor of any kind, including trust deeds or mortgages, or alter, substitute
or release any property securing said obligations.

     5.16. The provisions of this Deed of Trust governing the contractual rights
and obligations of Trustor, Beneficiary and Trustee shall be construed according
to the laws of the State of Nevada. Notwithstanding anything to the contrary
contained herein, this Deed of Trust is subject

                                       23

                       Hale Lane Peek Dennison and Howard
                         Attorneysnd Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

to the Applicable Gaming Laws of the State of Nevada. Beneficiary and Trustee
each agrees to cooperate with the Gaming Authorities of the State of Nevada in
connection with the administration of their regulatory jurisdiction over
Trustor, including the provision of such documents and other information as may
be requested by the Gaming Authorities of the State of Nevada relating to
Trustor or the Loan Documents. The provisions of this Deed of Trust are intended
to be supplemental and in addition to the provisions contained in the Loan
Agreement. Any assignment of this Deed of Trust shall be considered an
assignment of the Note and the Loan Agreement.

     5.17. Regulatory Matters. Whenever in this Deed of Trust a right is given
           ------------------
to Beneficiary, which right is affected by Applicable Gaming Laws or the
enforcement of which is subject to Applicable Gaming Laws, the enforcement of
any such right shall be subject to Applicable Gaming Laws and approval, if so
required, of the applicable Gaming Authorities. Without limiting the generality
of the foregoing, Beneficiary acknowledges that (a) Beneficiary is subject to
being called forward by the Gaming Authority of the State of Nevada, in their
discretion, for licensing or a finding of suitability as a lender to a gaming
licensee, and (b) to the extent the prior approval of the Gaming Authority of
the State of Nevada is required pursuant to applicable law for the exercise,
operation and effectiveness of any remedy hereunder or under any other Loan
Document, or the taking of any action that may be taken by Beneficiary or under
any other Loan Document, such remedy or action shall be subject to such prior
approval of the Gaming Authority of the State of Nevada.

     5.18. This Deed of Trust may be executed in counterparts, all of which
executed counterparts shall together constitute a single document. Signature
pages may be detached from the counterparts and attached to a single copy of
this document to physically form one document.

     5.19 This Deed of Trust is being executed in counterpart originals for
recordation in the Office of the County Recorder, Washoe County, Nevada, and in
the Office of the County Recorder, Sierra County, California.

     IN WITNESS WHEREOF, Trustor has executed this Deed of Trust and Security
Agreement and Fixture Filing with Assignment of Rents as of the day first
written above.

                                         LAST CHANCE, INC., a Nevada corporation

                                         By:  /s/ Ferenc B. Szony
                                              ----------------------------------
                                              FERENC B. SZONY
                                              Its: President

                                                          "Trustor"

STATE OF NEVADA   )

                                       24

                       Hale Lane Peek Dennison and Howard
                         Attorneys and Counselors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

                  )ss.
COUNTY OF WASHOE  )

     This instrument was acknowledged before me on May 30, 2002, by Ferenc B.
Szony, as President of Last Chance, Inc.

                                                Diane Y. Sanders
                                                --------------------------------
                                                Notary Public
                                                My Commission Expires: 6/19/2002

                                       25

                       Hale Lane Peek Dennison and Howard
                         Attorneysnd Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

                                   Exhibit "A"

                                Legal Description
                                -----------------

                                       26

                       Hale Lane Peek Dennison and Howard
                         Attorneysnd Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

                             STOCK PLEDGE AGREEMENT
                             ----------------------

     This Stock Pledge Agreement is made and entered into this 31st day of May,
2002, by and between THE SANDS REGENT, a Nevada corporation (the "Pledgor"), and
NEVADA STATE BANK ("Pledgee").

                              W I T N E S S E T H:
                              -------------------

     THIS PLEDGE AGREEMENT IS MADE AND ENTERED INTO WITH REFERENCE TO THE
FOLLOWING FACTS:

     A. THE SANDS REGENT, a Nevada corporation, ZANTE, INC., a Nevada
corporation, and LAST CHANCE, INC., a Nevada corporation (collectively, the
"Borrower"), have executed and delivered to Pledgee a Reducing Revolving Line of
Credit Promissory Note Secured By Deed of Trust in the principal amount of
$17,000,000.00 of even date herewith (the "Note"), and a Reducing Revolving Line
of Credit Loan Agreement of even date herewith (the "Loan Agreement");

     B. Pledgor is the holder of all of the issued and outstanding shares of
common stock in ZANTE, INC., a Nevada corporation, and LAST CHANCE, INC., a
Nevada corporation;

     C. Pledgor has agreed to execute this Stock Pledge Agreement, (the "Pledge
Agreement") to secure the payment and performance of Pledgor's obligations under
the Note and Loan Agreement; and

     D. Pledgor shall receive a substantial benefit if Pledgee makes the loan
evidenced by the Note to Borrower.

     E. This Pledge Agreement is governed by the laws of Nevada, including, but
not limited to, the Nevada Gaming Control Act (NRS. Ch. 463) (the "Act") and the
regulations (the "NGC Regs" and together with the Act collectively the "Nevada
Gaming Laws") of the Nevada Gaming Commission (the "Commission") as enforced by
the State Gaming Control Board (the "Board" and together with the Commission
collectively the "Nevada Gaming Authorities"), in their current form and as they
may hereafter be amended from time to time.

     NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth and other valuable consideration, the Pledgor hereby
agrees with the Pledgee as follows:

     1. Defined Terms. The following terms used herein shall have the following
        -------------
meanings:

     "Code" means the Uniform Commercial Code from time to time in effect in the
      ----
State of Nevada.

                                        1

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

     "Collateral" means the Pledged Stock and all Proceeds.
      ----------

     "Obligations" means all obligations of Pledgor under the terms and
      -----------
conditions of the Note and the Loan Agreement.

     "Pledge Agreement" means this Pledge Agreement, as amended, supplemented or
      ----------------
otherwise modified from time to time.

     "Pledged Stock" means (a) 12,659 shares of capital stock of ZANTE, INC., a
      -------------
Nevada corporation ("Zante") listed on Schedule I hereto, together with all
stock certificates, options or rights of any nature whatsoever with respect to
such shares of capital stock of Zante which may be acquired by the Pledgor in
any manner while this Pledge Agreement is in effect, and (b) 100 shares of
capital stock of LAST CHANCE, INC., a Nevada corporation ("Last Chance") listed
on Schedule I hereto, together with all stock certificates, options or rights of
any nature whatsoever with respect to such shares of Capital Stock of Last
Chance which may be acquired by the Pledgor in any manner which this Pledge
Agreement is in effect. Zante and Last Chance are at times hereinafter referred
to collectively as the "Corporation."

     "Proceeds" means all "proceeds" as such term is defined in the Uniform
      --------
Commercial Code in effect in the State of Nevada on the date hereof with respect
to the Pledged Stock and, in any event, shall include, without limitation, all
dividends or other income from the Pledged Stock, collections thereon or
distributions with respect thereto.

     2. Pledge; Grant of Security Interest. The Pledgor hereby grants to the
        ----------------------------------
Pledgee a first security interest in the Collateral, as collateral security for
the prompt and complete payment and performance when due of the Obligations.
Pledgor agrees to deliver to Pledgee, or its agent, upon execution of this
Agreement the certificate or certificates representing the Pledged Stock.

     3. Stock Powers. Concurrently with the delivery to the Pledgee of the
        ------------
certificate(s) representing the Pledged Stock, the Pledgor shall deliver undated
stock powers covering such certificate(s), duly executed in blank.

     4. Representations and Warranties. The Pledgor represents and warrants
        ------------------------------
that:

          (a) this Pledge Agreement constitutes a legal, valid and binding
obligation of the Pledgor enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally;

          (b) the execution, delivery and performance of this Pledge Agreement
by the Pledgor will not violate any provision of any applicable law or
contractual obligation of the Pledgor and will not result in the creation or
imposition of any lien on any of the properties or revenues of the Pledgor

                                        2

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

pursuant to any applicable law or contractual obligation of the Pledgor, except
as contemplated hereby.

     5. Covenants. Pledgor covenants and agrees with the Pledgee that, from and
        ---------
after the date of this Pledge Agreement until the Obligations are paid
in full:

          (a) If the Pledgor shall, as a result of its ownership of the Pledged
Stock, become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing a stock dividend or
a distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), option
or rights, whether in addition to, in substitution of, as a conversion of, or in
exchange for any shares of the Pledged Stock, or otherwise in respect thereof,
the Pledgor shall accept the same as the Pledgee's agent, hold the same in trust
for the Pledgee and deliver the same forthwith to the Pledgee, or its agent, in
the exact form received, together with an undated stock power covering such
certificate duly executed in blank, to be held by the Pledgee hereunder as
additional collateral security for the Obligations. Any sums paid upon or in
respect of the Pledged Stock upon the liquidation or dissolution of the
Corporation shall be paid over to the Pledgee to be held by it hereunder as
additional collateral security for the Obligations, and in case any distribution
of capital shall be made on or in respect of the Pledged Stock or any property
shall be distributed upon or with respect to the Pledged Stock pursuant to the
recapitalization or reclassification of the capital of the Corporation or
pursuant to the reorganization thereof, the property so distributed shall be
delivered to the Pledgee to be held by it, subject to the terms hereof, as
additional collateral security for the Obligations. Following the occurrence,
and during the continuance, of an uncured Event of Default under the Loan
Agreement, any sums of money or property so paid or distributed in respect of
the Pledged Stock shall be received by the Pledgor, the Pledgor shall, until
such money or property is paid or delivered to the Pledgee, hold such money or
property in trust for the Pledgee, segregated from other funds of the Pledgor,
as additional collateral security for the Obligations.

          (b) Without the prior written consent of the Pledgee, the Pledgor will
not (i) sell, assign, transfer, exchange or otherwise dispose of, or grant any
option with respect to, the Collateral, or (ii) except as otherwise provided in
the Loan Agreement, create, incur or permit to exist any lien or option in favor
of, or any claim of any person with respect to, any of the Collateral, or any
interest therein, except for the lien provided for by this Pledge Agreement.

          (c) At any time and from time to time, upon the written request of the
Pledgee, and at the sole expense of the Pledgor, the Pledgor will promptly and
duly execute and deliver such further instruments and documents and take such
further actions as the Pledgee may reasonably request for the purposes of
obtaining or preserving the full benefits of this Pledge Agreement and of the
rights and powers herein granted. If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any promissory note,
other instrument or chattel paper, such note, instrument or chattel paper shall
be immediately delivered to the Pledgee, duly endorsed in a manner satisfactory
to the Pledgee, to be held as Collateral pursuant to this Pledge Agreement.

                                        3

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada

                                 (702) 222-2500

<PAGE>

          (d) Pledgor hereby authorizes Pledgee to file financing statements,
amendments, continuation statements and such other documents as Pledgee may deem
necessary or appropriate in connection with the security agreement granted
herein.

     6. Cash Dividends; Voting Rights. Unless an event of default under the Note
        -----------------------------
shall occur and shall not be cured within fifteen (15) days after receipt by
Pledgor from Pledgee of written notice of such default, the Pledgor shall be
permitted to receive all cash dividends paid in the normal course of business of
the Corporation in respect of the Pledged Stock and to exercise all voting and
corporate rights with respect to the Pledged Stock.

     7. Rights of the Pledgor. If an event of default under the Note shall occur
        ---------------------
and shall not be cured within thirty (30) days after receipt by Pledgor from
Pledgee of written notice of such default, (i) the Pledgee shall have the right
to receive any and all cash dividends paid in respect of the Pledged Stock and
make application thereof to the Obligations in such order as it may determine,
and (ii) all shares of the Pledged Stock shall be registered in the name of the
Pledgee or its nominee, and the Pledgee or its nominee may thereafter exercise
(A) all voting, corporate and other rights pertaining to such shares of the
Pledged Stock at any meeting of shareholders of the Corporation or otherwise and
(B) any and all rights of conversion, exchange, subscription and any other
rights, privileges or options pertaining to such shares of the Pledged Stock as
if it were the absolute owner thereof (including, without limitation, the right
to exchange at its discretion any and all of the Pledged Stock upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate structure of the Corporation, or upon the exercise by the Pledgor
or the Pledgee of any right, privilege or option pertaining to such shares of
the Pledged Stock, and in connection therewith, the right to deposit and deliver
any and all of the Pledged Stock with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as it may
determine), all without liability except to account for property actually
received by it, but the Pledgee shall have no duty to exercise any such right,
privilege or option and shall not be responsible for any failure to do so or
delay in so doing. Effective upon the occurrence of an uncured Event of Default
under the Loan Agreement, Pledgor hereby appoints Pledgee as his
attorney-in-fact and proxy for the purposes of exercising the voting rights
herein granted as to the Pledged Stock.

     8. Remedies. If an event of default under the Note shall occur and shall
        --------
not be cured within thirty (30) days after receipt by Pledgor from Pledgee of
written notice of such default, the Pledgee may exercise, in addition to all
other rights and remedies granted in this Pledge Agreement and in any other
instrument or agreement securing, evidencing or relating to the Obligations, all
rights and remedies of a secured party under the Code. Without limiting the
generality of the foregoing, the Pledgee, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (other than
the notice and opportunity to cure set forth above) may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, assign, give option or options to
purchase or otherwise dispose of and deliver the Collateral or any part thereof
(or contract to do any of the foregoing), at

                                        4

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

public or private sale or sales, in the over-the-counter market, at any
exchange, broker's board or office of the Pledgee or elsewhere upon such terms
and conditions as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk. The Pledgee shall have the right upon any such public sale or sales, and,
to the extent permitted by law, upon any such private sale or sales, to purchase
the whole or any part of the Collateral so sold, free of any right or equity of
redemption in the Pledgor, which right or equity is hereby waived or released.
The Pledgee shall apply any Proceeds from time to time held by it and the net
proceeds of any such collection, recovery, receipt, appropriation, realization
or sale, after deducting all reasonable costs and expenses of every kind
incurred therein or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the Pledgee
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Obligations, in such
order as the Pledgee may elect, and only after such application and after the
payment by the Pledgee of any other amount required by any provision of law,
including, without limitation, the Code, need the Pledgee account for the
surplus, if any, to the Pledgor. To the extent permitted by applicable law, the
Pledgor waives all claims, damages and demands it may acquire against the
Pledgee arising out of the exercise by the Pledgee of any of its rights
hereunder. If any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition.

     9. Private Sales.
        -------------

          (a) The Pledgor recognizes that the Pledgee may be unable to effect a
public sale of any or all the Pledged Stock, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. The Pledgor acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable to the Pledgee than if such sale were a public sale and agrees that
such circumstances shall not, in and of themselves, result in a determination
that such sale was not made in a commercially reasonable manner.

          (b) The Pledgor further agrees to use its reasonable efforts to do or
cause to be done all such other acts as may be necessary to make any sale or
sales of all or any portion of the Pledged Stock pursuant to this paragraph 9
valid and binding and in compliance with any and all other applicable law.
Pledgor hereby waives and agrees not to assert any defenses against an action
for specific performance of such covenants except for a defense that no event of
default has occurred under the Note.

     10. Limitation on Duties Regarding Collateral. The Pledgee's sole duty with
         -----------------------------------------
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under the Code or otherwise, shall be to deal with it in the
same manner as the Pledgee deals with similar securities and property for its
own account. The Pledgee shall not be liable for failure to demand, collect or

                                        5

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

realize upon any of the Collateral or for any delay in doing so or be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
the Pledgor or otherwise.

     11. Powers Coupled with an Interest. All authorizations and agencies herein
         -------------------------------
contained with respect to the Collateral are irrevocable and are powers coupled
with an interest.

     12. Severability. Any provision of this Pledge Agreement which is
         ------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

     13. Paragraph Headings. The paragraph headings used in this Pledge
         ------------------
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.

     14. Waivers and Amendments; Successors and Assigns; Governing Law. None of
         -------------------------------------------------------------
the terms or provisions of this Pledge Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
Pledgor and the Pledgee, provided that any provision of this Pledge Agreement
may be waived by the Pledgee in a letter or agreement executed by the Pledgee or
by facsimile transmission from the Pledgee. This Pledge Agreement shall be
binding upon the successors and assigns of the Pledgor and shall inure to the
benefit of the Pledgee and its successors and assigns. This Pledge Agreement
shall be governed by, and construed and interpreted in accordance with, the laws
of the State of Nevada.

     15. Notices. Notices by the Pledgee to the Pledgor may be given by
         -------
registered or certified mail, return receipt requested, addressed to the
Pledgor, and shall be effective as of the date of receipt thereof, as follows:

         The Sands Regent
         345 N. Arlington
         Reno, Nevada  89501

     16. Termination of Agreement. When all of the Obligations have been
         ------------------------
satisfied in full, this Pledge Agreement shall terminate and the certificates
evidencing the Pledged Stock and the Stock Power delivered to Pledgee by Pledgor
shall be delivered over to Pledgor.

     17. Gaming Approval. Pledgor and Pledgee further agree that:
         ---------------

          a. This Pledge Agreement shall not be effective until it is approved
by the Commission;

                                        6

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

          b. Notwithstanding approval by the Commission pursuant to subparagraph
a. above, other approvals may be required before certain transactions relating
to this Pledge Agreement may occur, including, but not limited to, the
following:

                    (1) Any re-registration or action similar to re-registration
               of the Pledged Stock must be approved in advance by the Board in
               accordance with NRS 463.510 and NGC Reg Section 8A.040;

                    (2) Any foreclosure, sale, transfer, or other disposition of
               the Pledged Stock must be approved in advance by the Commission
               in accordance with NRS 463.510 and NGC Reg Sections 8A.020 and
               8A.030, and shall not be effective unless so approved; and

                    (3) Pursuant to NGC Reg Section 8A.040, the payment or
               receipt of any money or other thing of value constituting any
               part of the consideration for the tranfer or acquisition of the
               Pledged Stock must be approved in advance by the Commission and
               the Board, except that such consideration may be placed in escrow
               pending the necessary approvals; and

          c. The certificates representing the Pledged Stock shall at all times
remain physically within the State of Nevada at a location designated to the
Board and must be made available for inspection by employees or agents of the
Board immediately upon request during normal business hours.

                  [Remainder of Page Intentionally Left Blank]

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

                                        THE SANDS REGENT, a Nevada corporation

                                        By:   /s/ Ferenc B. Szony
                                           --------------------------------
                                                  FERENC B. SZONY
                                                  Its: President

                                                                  "Pledgor"
                                        7

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

                                        NEVADA STATE BANK

                                        By:   /s/ Kevin Sullivan
                                           --------------------------------
                                                  KEVIN SULLIVAN
                                                  Its: Senior Vice President

                                                                  "Pledgee"

                                        8

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500

<PAGE>

                                   SCHEDULE 1
                                   ----------

(1)  12,659 shares of capital stock of Zante, Inc., evidenced by Certificate No.
     37; and

(2)  100 shares of capital stock of Last Chance, Inc., evidenced by Certificate
     No. 1.

                                        9

                       Hale Lane Peek Dennison and Howard
                        Attorneys and Counsellors at Law
                               Las Vegas, Nevada
                                 (702) 222-2500<PAGE>

                                                                   EXHIBIT 10(e)
                                  SECURED PROMISSORY NOTE

                                                                    Reno, Nevada
$5,618,734.00                                                       June 1, 2002

         FOR VALUE RECEIVED, Last Chance, Inc., a Nevada Corporation (Maker),
promises to pay to Prospector Gaming Enterprises, Inc., a Nevada corporation
(Payee) or order, at its offices located at 1400 South Virginia Street, Reno,
Nevada 89502, or at such other place as the holder hereof may designate in
writing from time to time, in currently available funds of the United States,
the principal sum of Five-Million Six-Hundred Eighteen Thousand Seven-Hundred
Thirty-Four Dollars ($5,618,734.00) together with interest on the unpaid
principal balance as described below.

1.  PAYMENT TERMS:

         1.1 Principal. Maker shall make monthly payments of principal in the
amount of Sixty-Six Thousand Eight-Hundred Eighty-Nine Dollars and Sixty-Nine
Cents ($66,889.69) on the 1st day of the 1st month after the month in which
this Note is executed, and continuing on the 1st day of each calendar month
thereafter until the 1st day of June, 2007, at which time the entire balance of
principal and accrued interest shall be due and payable.

           The outstanding principal balance of this Note, all accrued and
unpaid interest thereon and all other amounts due hereunder, may be prepaid at
any time without penalty.

         1.2.1 Interest. Borrow shall make monthly interest payments on the
outstanding principal balance of this Note which shall accompany the principal
payments required by Section 1.1. The interest rate applicable to the principal
balance of this Note is the prime rate as quoted by the Wall Street Journal,
from time to time, plus 250 basis points, provided, however, that the applicable
interest rate shall not be increased or decreased during the term of this Note
by greater than 300 basis points and the interest rate shall not be increased or
decreased in any one year period by greater than 100 basis points. Each change
in the interest rate hereunder shall become effective on the date on which a
change in the prime rate is published by the Wall Street Journal. The interest
rate applicable at the date of execution of this Note is Seven and 25/100
percent (7.25%) per annum.

         1.2.1 Prepayment. Maker reserves the right to prepay all or any portion
of the indebtedness evidenced by this Note at any time, without penalty. Any
sums prepaid shall first be applied to accrued interest on the principal balance
then unpaid and then to reduction of principal.

<PAGE>

2.  DEFAULT.

         2.1. Default and Acceleration. The unpaid balance of principal and
accrued interest shall without notice become immediately due and payable at the
option of Payee if any payment required in this Note is not paid within fifteen
(15) days following the date upon which the payment was due (Event of Default).
A default thereunder shall constitute a default under the Gold Ranch Casino
Lease.

3.  LOAN DOCUMENTS

         This Note is made and delivered pursuant to the provisions of the Asset
Purchase Agreement and the Integrated Agreements by and between Maker, Payee and
their Affiliates and is secured by a pledge of the Acquired Assets.

         All of the terms, covenants and conditions contained in the Asset
Purchase Agreement and the Integrated Agreements are hereby made part of this
Note to the same extent and with the same force as if they were fully set forth
herein. In the event of a conflict or inconsistency between the terms of this
Note and the Asset Purchase Agreement or the Integrated Agreements, the terms
and provisions of the Loan Agreement or the otherwise applicable Integrated
Agreement shall control.

4.  MODIFICATIONS AND AMENDMENTS.

         This Note may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part of
Maker or Payee, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.

5.  WAIVERS.

         Except as otherwise provided in the Asset Purchase Agreement
or any applicable Integrated Agreement, Maker and all others who may become
liable for the payment of all or any part of this Note hereby severally waive
presentment and demand for payment, notice of dishonor, notice of intention to
accelerate, notice of acceleration, protest and notice of protest and
non-payment and all other notices of any kind. No extension of time for payment
of this Note or any installment hereof, and no alteration, amendment or waiver
of any provision of this Note, the Asset Purchase Agreement or the Integrated
Agreements made by agreement between Payee or any other Person shall release,
modify, amend, waive, extend, change, discharge, terminate or affect the
liability of Maker, and any other Person who may become liable for the payment
of all or any part of this Note. No notice to or demand on Maker shall be deemed
to be a waiver of the obligation of Maker or of the right of Payee to take
further action without further notice or demand as provided for in this Note.

<PAGE>

6.  GOVERNING LAW

         This Note And The Obligations Arising Hereunder Shall Be Governed By,
And Construed In Accordance With, The Laws Of The State Of Nevada.

7.  NOTICES.

         All notices or other written communications hereunder shall be
delivered in accordance with Section 17(c) of the Asset Purchase Agreement.

         IN WITNESS WHEREOF, Maker has duly executed this Note as of
the day and year first above written.

        Last Chance, Inc.

        By:  /s/ Ferenc B. Szony
             -------------------
                 Ferenc B. Szony
                 Its President

                                       3

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