Document:

exv10w1

 

Exhibit 10.1

EXECUTION COPY

$450,000,000

SHINGLE SPRINGS TRIBAL GAMING AUTHORITY

93/8% SENIOR NOTES DUE 2015

PURCHASE AGREEMENT

June 22, 2007

 

 

June 22, 2007

Morgan Stanley & Co. Incorporated

Wells Fargo Securities, LLC

c/o Morgan Stanley & Co. Incorporated

      1585 Broadway

     New York, New York 10036

Ladies and Gentlemen:

     Shingle Springs Tribal Gaming Authority, (the “Authority”), a wholly-owned unincorporated
instrumentality of the Shingle Springs Band of Miwok Indians, a federally recognized Indian tribe
(the “Tribe,” and together with the Authority, the “Tribal Parties”), proposes to issue and sell to
the several purchasers named in Schedule I hereto (the “Initial Purchasers”) $450,000,000 principal
amount of its 93/8% Senior Notes due 2015 (the “Securities”) to be issued pursuant to the provisions
of an Indenture (the “Indenture”), to be dated the Closing Date (as defined below), among the
Authority, the Tribe and The Bank of New York Trust Company, N.A., as Trustee (the “Trustee”).

     The Securities will be offered without being registered under the Securities Act of 1933, as
amended (the “Securities Act”), to qualified institutional buyers in compliance with the exemption
from registration provided by Rule 144A under the Securities Act and in offshore transactions in
reliance on Regulation S under the Securities Act (“Regulation S”).

     In connection with the sale of the Securities, the Authority and Lakes KAR-Shingle Springs,
LLC, a Delaware limited liability company (the “Manager”) have prepared a preliminary offering
memorandum (the “Preliminary Memorandum”) and will prepare a final offering memorandum (the “Final
Memorandum”) including or incorporating by reference a description of the terms of the Securities,
the terms of the offering and a description of the Authority and the Tribe. For purposes of this
purchase agreement (the “Agreement”), “Additional Written Offering Communication” means any written
communication (as defined in Rule 405 under the Securities Act) that constitutes an offer to sell
or a solicitation of an offer to buy the Securities other than the Preliminary Memorandum or the
Final Memorandum, and “Time of Sale Memorandum” means the Preliminary Memorandum together with the
Additional Written Offering Communications, if any, each identified in Schedule II hereto. As used
herein, the terms Preliminary Memorandum, Time of Sale Memorandum and Final Memorandum shall
include the documents, if any, incorporated by reference therein.

 

 

     In order to establish a security interest in certain collateral described in the Final
Memorandum (the “Collateral”) to secure the Authority’s obligations under the Securities, on or
before the Closing Date (as defined below) there will have been executed, (i) a Security Agreement
by and among the Authority and the Trustee (the “Security Agreement”) (ii) a Cash Collateral and
Disbursement Agreement among the Authority, the Disbursement Agent (as defined therein), the
Collateral Agent (as defined therein), the Trustee, the Manager and the ICC (as defined therein)
(the “Disbursement Agreement”), (iii) a certain Notes Dominion Account Agreement (the “Dominion
Account Agreement” and, together with the Security Agreement, and the Disbursement Agreement, the
“Collateral Documents”) among the Authority, the Collateral Agent, the Manager and a local
depositary bank. This Agreement, the Securities, the Indenture and the Collateral Documents are
hereinafter referred to collectively as the “Offering Documents.” The agreements set forth on
Schedule III hereto are hereinafter referred to collectively as the “Material Agreements.”
The Offering Documents and the Material Agreements are referred to, collectively, as the
“Transaction Documents.”

     1. Representations and Warranties.

          1.01 Each of the Tribal Parties represents and warrants to, and agrees with, you that:

     (a) (i) the Time of Sale Memorandum does not, and at the time of each sale of the
Securities in connection with the offering when the Final Memorandum is not yet available
to prospective purchasers and at the Closing Date (as defined in Section 4), the Time of
Sale Memorandum, as then amended or supplemented by the Authority, if applicable, will
not, contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading, (ii) the Preliminary Memorandum, when taken together with
the pricing term sheet listed on Schedule II hereto, does not contain and the Final
Memorandum, in the form used by the Initial Purchasers to confirm sales and on the Closing
Date (as defined in Section 4), will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to statements or
omissions in the Preliminary Memorandum, the Time of Sale Memorandum or the Final
Memorandum based upon information furnished to the Authority in writing by an Initial
Purchaser through you expressly for use therein.

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     (b) Except for the Additional Written Offering Communications, if any, identified in
Schedule II hereto, and electronic road shows, if any, furnished to you before first use,
the Authority has not prepared, used or referred to, and will not, without your prior
consent, prepare, use or refer to, any Additional Written Offering Communication.

     (c) The Tribe is an Indian tribe within the meaning of the Indian Gaming Regulatory
Act of 1988, as amended (“IGRA”), with the authority to enter into and perform its
obligations under the Offering Documents.

     (d) The Articles of Association of the Tribe (the “Articles”), duly and validly
adopted by the Tribe on June 19, 1976, and amended thereafter from time to time, is the
only articles of association of the Tribe and is the valid principal governing document of
the Tribe.

     (e) The tribal council referred to in the Articles (the “Tribal Council”) is the
governing body of the Tribe, and all members of the Tribal Council are validly serving.

     (f) The Tribal-State Compact between the State of California and the Tribe, effective
May 16, 2000, as amended, (the “Compact”), has been duly and validly authorized, executed
and delivered by each of the State of California and the Tribe, has been duly approved by
the Secretary of the Interior of the United States, as required by IGRA, such approval has
been duly published in the Federal Register in accordance with IGRA, and no further action
is required to make the Compact effective. The Compact complies with the requirements of
IGRA in all respects material to the ability of the Tribal Parties to perform their
respective obligations under the Offering Documents. As of the date hereof, each of the
Tribal Parties is in compliance with all material terms and conditions of the Compact.

     (g) The Financial Source Licensing regulation (the “Tribal Licensing Regulation”)
adopted pursuant to Resolution GC 2007-01 of the Shingle Springs Tribal Gaming Commission
(the “Tribal Gaming Commission”) applies to the Securities. California Gambling Control
Commission Regulation CGCC-2 (the “State Bond Regulation”) applies to the Securities. The
Indenture complies with the requirements for an indenture described in Section (g) of the
State Bond Regulation.

     (h) In accordance with the Tribal Licensing Regulation, (a) no person who purchases
less than 10% of the aggregate principal amount of the issued and outstanding Securities,
(b) no agency of the federal, state or local government, (c) no federally or
state-regulated bank or savings and

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loan association and (d) no securities dealer acting in compliance with Section
3(h)(ii) of the Tribal Licensing Regulation is required to be licensed as a “financial
source” under the Compact. No person who is not an “initial holder” (as defined in the
Tribal Licensing Regulation, and which term does not include any securities dealer acting
in compliance with Section 3(h)(ii) of the Tribal Licensing Regulation) is required to be
licensed as a financial source under the Compact prior to purchasing the Securities
provided, that neither any holder that is not licensed or exempted from licensing by the
Tribal Gaming Commission, nor any person acting on behalf of the holder, will have any
right to enforce any payment obligation relating to the Securities against any revenues,
property, or rights of the Authority or the Tribe, or any branch, department, agency,
instrumentality, division, subsidiary, enterprise, authority or wholly-owned corporation
or business of the Tribe until such time as the holder is licensed by the Tribal Gaming
Commission. Further, in accordance with the Tribal Licensing Regulation, the Tribal
Gaming Commission has determined that a registration by a Qualifying Institution (as
defined in the Tribal Licensing Regulation) with the California Gambling Control
Commission (“State Commission”) shall constitute a determination by the State Commission
that the Qualifying Institution is suitable for licensure under the Compact and the Tribal
Gaming Commission shall rely on such a determination as a determination of the suitability
of the applicant for licensure as a Financial Source under the Compact.

     (i) The Tribal Council has duly and validly adopted the Tribal Gaming Ordinance of
the Tribe (the “Gaming Ordinance”). As required by IGRA, the Gaming Ordinance was duly
approved by the National Indian Gaming Commission (the “NIGC”) on July 6, 1996. The
Gaming Ordinance (i) has not been further amended or repealed and is in full force and
effect as the law of the Tribe, (ii) authorizes class II and class III gaming within the
meaning of IGRA that is proposed to be conducted by the Authority, (iii) satisfies the
requirements under IGRA that the Tribe adopt a gaming ordinance prior to engaging in class
II or class III gaming and (iv) complies in all material respects with the requirements of
the Compact and IGRA.

     (j) The Tribal Council has the requisite power and authority to adopt the ordinance
dated April 20, 2007 entitled “An Ordinance of the Shingle Springs Band of Miwok Indians
Establishing and Governing the Shingle Springs Tribal Gaming Authority” (the “Authority
Ordinance”), which amended in its entirety the tribal ordinance dated May 12, 2004
entitled “Ordinance Establishing and Governing The Foothill Oaks Tribal Gaming Authority,”
and said Authority Ordinance is the law of the Tribe.

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The Authority Ordinance (i) was duly and validly adopted by the Tribal Council, (ii)
is in full force and effect, (iii) has not been further amended or repealed in any manner
and (iv) is the governing law of the Tribe.

     (k) The Authority (i) is a wholly-owned unincorporated governmental authority of the
Tribe and is not a separate entity from the Tribe for federal or state income tax purposes
and (ii) is governed by a board of directors (the “Management Board”) which has the
requisite power and authority to adopt resolution no. 2007-06 authorizing the Authority to
enter into this Agreement, the Collateral Documents and the Indenture and to issue the
Securities. The Management Board has duly adopted the resolution referenced in clause
(ii) above and is in full force and effect and has not been amended or repealed in any
manner. The Authority has not created and will not create any instrumentality,
subdivision or subunit and the Authority does not have any Subsidiary.

     (l) Each of the Tribal Parties has all requisite power and authority necessary to
enter into, execute, deliver and perform their obligations, if any, under the Offering
Documents, and to consummate the transactions contemplated by the Time of Sale Memorandum.

     (m) No initiative or referendum rights exist for the members of the Tribe permitting
any member or any number of members of the Tribe to call for or conduct, in any manner, a
review of any actions taken by the Authority or the Tribal Council, whether by way of an
initiative, referendum or otherwise, with respect to any authorization, execution,
delivery or performance of its obligations under the Offering Documents, by the Authority
or the Tribal Council or any actions contemplated to be taken by the Authority or the
Tribal Council in connection therewith, except as set forth in Articles XI and XII of the
Articles (the “Articles Referendum Right”). No vote or other action has ever occurred or
been taken in connection with the Articles Referendum Right, and no vote or petition for a
vote is pending or threatened with respect to any exercise of the Articles Referendum
Right in connection with any matter that would reasonably be expected to (A) individually
or in the aggregate, have a material adverse effect on the business, condition (financial
or otherwise), results of operations, properties, affairs or prospects of the Authority,
taken as a whole, or the ability of the Authority to timely perform its obligations under
the Offering Documents, (B) interfere with or adversely affect the issuance or
marketability of the Securities to be issued on the Closing Date, or (C) in any manner
draw into question the validity of the Offering Documents or the Compact, the transactions
described in the Time of Sale Memorandum or prohibit or prevent the Authority from using
the proceeds from the offering of the Securities in the manner described in the Time of
Sale Memorandum under the caption “Use of

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Proceeds” (any of the events set forth in clauses (A), (B) or (C), a “Tribal Parties
Material Adverse Effect”).

     (n) This Agreement has been duly authorized, executed and delivered by each of the
Tribal Parties and is a valid and binding agreement of each of the Tribal Parties,
enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency or
similar laws affecting creditors’ rights generally and general principles of equity.

     (o) As of the Closing Date, the Securities will be duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture and delivered to and
paid for by the Initial Purchasers in accordance with the terms of this Agreement, will be
valid and binding obligations of the Authority, enforceable in accordance with their
terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’
rights generally and general principles of equity, and will be entitled to the benefits of
the Indenture pursuant to which such Securities are to be issued.

     (p) As of the Closing Date, the Indenture will be duly authorized, executed and
delivered by, and will be a valid and binding agreement of, each of the Tribal Parties,
enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency or
similar laws affecting creditors’ rights generally and general principles of equity.

     (q) As of the Closing Date, each of the Collateral Documents will be duly authorized,
executed and delivered by, and will be a valid and binding agreement of, each of the
Tribal Parties that are parties thereto, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally
and general principles of equity.

     (r) As of the Closing Date, each of the Material Agreements to which each of the
Tribal Parties is a party will be duly authorized, executed and delivered by, and will be
a valid and binding agreement of, each of the Tribal Parties that are parties thereto,
enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency or
similar laws affecting creditors’ rights generally and general principles of equity.

     (s) Except as described in the Time of Sale Memorandum, there exist no conditions
that would constitute a default (or an event which with notice or the lapse of time, or
both, would constitute a default) by the Tribal Parties under any of the Offering
Documents or Material Agreements to which each of the Tribal Parties is a party.

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     (t) Upon the (A) execution and delivery to the Collateral Agent (as defined in the
Indenture) of each of the Collateral Documents and (B) filing of the UCC-1 financing
statements as contemplated by the Collateral Documents; the Collateral Agent will have a
valid, duly perfected, first priority security interest in all of the Collateral listed in
the Collateral Documents, subject to any liens permitted by the Collateral Documents, as
security for the payment of the obligations of the Authority under the Offering Documents.
The actions, recordings and filings described in the immediately preceding sentence are
the only actions, recordings and filings necessary to publish notice of and perfect the
rights of the Collateral Agent in all of the Collateral, other than deposit accounts
created after the Closing Date, except for such additional actions, recordings and filings
as the Authority, the Initial Purchasers and the Trustee may determine prior to the
Closing Date.

     (u) Except as described in the Time of Sale Memorandum, neither of the Tribal Parties
is now and, after giving effect to the offering of the Securities, will be (i) in
violation of any of its organizational documents, (ii) in default in the performance of
any bond, debenture, note, indenture, mortgage, deed of trust or other agreement or
instrument to which it is a party or by which it is bound or to which any of its
properties is subject, or (iii) in violation of the Compact or any local, tribal, state or
federal law, statute, ordinance, rule, regulation, requirement, judgment or court decree
(including, without limitation, any requirement, regulation or decree under IGRA or the
Compact) applicable to each of the Tribal Parties or any of its assets or properties
(whether owned or leased), other than, in the case of clauses (ii) and (iii), any default
or violation that would not reasonably be expected to have a Tribal Parties Material
Adverse Effect. Except as disclosed in the Time of Sale Memorandum, to the best knowledge
of each of the Tribal Parties, there exists no condition that, with notice, the passage of
time or otherwise, would constitute a default under any such document or instrument which
default would have a Tribal Parties Material Adverse Effect. Each of the Tribal Parties
is and has been in compliance with all local, tribal, state and federal statutes, laws,
ordinances, rules and regulations applicable to its properties and its business, except
where the failure so to be in compliance would not have a Tribal Parties Material Adverse
Effect.

     (v) Except as described in the Time of Sale Memorandum, none of (i) the execution,
delivery or performance by the Tribal Parties of this Agreement or the Collateral
Documents or the Material Agreements, (ii) the issuance and sale of the Securities, and
(iii) the consummation by the Tribal Parties of the transactions contemplated hereby and
thereby or described in the Time of Sale Memorandum under the caption “Use of

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Proceeds” will (A) violate, conflict with or result in a breach of any of the terms
or provisions of, or constitute a default under (or an event that with notice or the lapse
of time, or both, would constitute a default), or require consent under (other than
consents which were previously obtained or will have been obtained on or before the
Closing Date), or result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Tribal Parties, or an acceleration of any indebtedness
of the Tribal Parties, except for liens, charges, and encumbrances contemplated thereby,
(B) violate or conflict with any organizational document of the Tribe, (C) assuming
compliance with all applicable state securities and “blue sky” laws and assuming
compliance by the Initial Purchasers of Section 6.4.6 of the Compact, and the State Bond
Regulation, violate or conflict with any statute, rule or regulation applicable to each of
the Tribal Parties or any of its respective assets or properties (including, but without
limitation, any Gaming Law), (D) violate or conflict with any judgment, decree, order,
statute, law, ordinance, rule or regulation of any court or any public, governmental or
regulatory agency, body or authority having jurisdiction over each of the Tribal Parties
or any of its respective assets or properties or (E) violate or conflict with any
provision of any bond, debenture, note, indenture, mortgage, deed of trust or other
agreement or instrument to which each of the Tribal Parties is a party or by which each of
the Tribal Parties or its respective properties is or may be bound, other than, in the
case of clauses (A), (C), (D) or (E), any default, violation or conflict that would not
reasonably be expected to have a Tribal Parties Material Adverse Effect.

     (w) Other than as described in the Time of Sale Memorandum, no consent, approval,
authorization or order of, or filing, registration, qualification, license or permit of or
with, (i) any court or governmental, regulatory or administrative agency or authority
having jurisdiction over the Tribal Parties or any of their respective properties or
assets (including, without limitation, the Secretary of the Interior or any Gaming
Authority), or (ii) any other person is required for the execution, delivery and
performance by each of the Tribal Parties of this Agreement and the consummation of the
transactions contemplated hereby, except (A) such as have been or will be obtained and
made on or prior to the Closing Date, (B) routine organizational filings and renewals of
licenses, (C) routine filings under the Securities Act and the Securities and Exchange Act
of 1934, as amended (the “Exchange Act”), (D) filings with the applicable Gaming Authority
or (E) where the failure to obtain any such consent, approval, authorization or order of,
or filing, registration, qualification, license or permit would not, individually or in
the aggregate, reasonably be expected to result in a Tribal Parties Material Adverse
Effect.

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     (x) There has not occurred any material adverse change, or any development reasonably
likely to result in a prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Tribal Parties, taken as a
whole, from that set forth in the Time of Sale Memorandum provided to prospective
purchasers of the Securities.

     (y) Except as described in the Time of Sale Memorandum, there are no tribal, state or
federal legal, regulatory or governmental proceedings pending or threatened to which
either of the Tribal Parties is a party or to which any of the properties of the Tribal
Parties is subject other than proceedings accurately described in all material respects in
the Time of Sale Memorandum and proceedings that would not have a material adverse effect
on the Tribal Parties or on the power or ability of either of the Tribal Parties to
perform its obligations under the Offering Documents or to consummate the transactions
contemplated by the Time of Sale Memorandum and the Final Memorandum.

     (z) Each of the Tribal Parties (i) is in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the protection of human
health and safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants (“Environmental Laws”), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Tribal Parties.

     (aa) Except as described in the Time of Sale Memorandum, neither of the Tribal
Parties is subject to any alleged liability, or to the best knowledge of the Tribal
Parties, potential liability (including, without limitation, alleged or potential
liability or investigatory costs, cleanup costs, governmental response costs, natural
resource damages, property damages, personal injuries or penalties) arising out of, based
on or resulting from (i) the presence or release into the environment of any Hazardous
Material (as defined below) at any location, whether or not owned by the Tribal Parties,
as the case may be, or (ii) any violation or alleged violation of any Environmental Law,
which alleged or potential liability or violation or alleged violation would reasonably be
expected to have a Tribal Parties Material Adverse Effect. The term “Hazardous Material”
means (A) any “hazardous substance” as defined by the Comprehensive Environmental
Response, Compensation and Liability Act

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of 1980, as amended, (B) any “hazardous waste” as defined by the Resource
Conservation and Recovery Act, as amended, (C) any petroleum or petroleum product, (D) any
polychlorinated biphenyl, and (E) any material, substance or waste classified or regulated
as toxic, hazardous, pollutant or contaminant or words of similar meaning under or within
the meaning of any other applicable law relating to protection of the environment.

     (bb) Each of the Tribal Parties possesses, and is operating in compliance with, all
certificates, approvals, orders, franchises, authorities, licenses (including, without
limitation, Gaming Licenses) or permits issued by the appropriate local, state, federal,
tribal or foreign regulatory agencies or bodies (including any Gaming Authority) as are
necessary to own and lease its properties and as are legally required for the operation of
the Authority’s businesses as presently conducted or as described in the Time of Sale
Memorandum (collectively, all such legally required certificates, approvals, orders,
franchises, authorities, licenses and permits are referred to herein as “Licenses”), all
of which are valid and in full force and effect, except as would not reasonably be
expected to have a Tribal Parties Material Adverse Effect and except for such Licenses
which the Tribe would not customarily possess at the date hereof but which will be
obtained in the ordinary course of development of the casino. Neither of the Tribal
Parties has received any notice of proceedings relating to, limiting, suspending,
modifying, revoking or failing to renew any of such Licenses. The descriptions in the
Time of Sale Memorandum of local, state, federal, tribal or foreign statutes, laws,
ordinances, rules and regulations governing the Tribal Parties and their respective
business, including, without limitation, any proposed amendments or additions to any such
statutes, laws, ordinances, rules or regulations, are accurate in all material respects
and fairly present the information required to be shown therein. Neither of the Tribal
Parties has received any notice of the enactment, amendment or repeal of any such
statutes, laws, ordinances, rules or regulations required to be described in the Time of
Sale Memorandum, except for such enactments, amendments or repeals as are described in the
Time of Sale Memorandum.

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

     (dd) Except as described in the Time of Sale Memorandum, there are no costs or
liabilities associated with Environmental Laws

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(including, without limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate, have a Tribal
Parties Material Adverse Effect.

     (ee) Neither of the Tribal Parties is, and after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described in the
Final Memorandum will be, required to register as an “investment company” as such term is
defined in the Investment Company Act of 1940, as amended.

     (ff) Neither the Authority nor any affiliate (as defined in Rule 501(b) of Regulation
D under the Securities Act, an “Affiliate”) of the Authority has directly, or through any
agent, (i) sold, offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act) which is or will be integrated
with the sale of the Securities in a manner that would require the registration under the
Securities Act of the Securities or (ii) offered, solicited offers to buy or sold the
Securities by any form of general solicitation or general advertising (as those terms are
used in Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.

     (gg) McGladrey & Pullen LLP, who has certified or will certify the financial
statements and schedules of the Authority included as part of and Time of Sale Memorandum,
are independent auditors with regard to the Authority as required by the Securities Act
and the rules and regulations promulgated thereunder.

     (hh) The historical financial statements of the Authority, together with related
schedules and notes thereto, included in the Preliminary Memorandum, the Time of Sale
Memorandum and the Final Memorandum present fairly the financial position of the
Authority, as of the dates indicated and the results of operations and cash flows of the
Authority, for the periods specified therein. Such historical financial statements
(including the related notes and schedules) have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis throughout the
periods specified therein, and subject, in the case of interim statements, to normal
recurring adjustments. Except as set forth in the Time of Sale Memorandum, since the date
of the latest of such historical financial statements, there has been no material increase
in the Indebtedness (as defined in the Time of Sale Memorandum) of the Authority, and
there has been no material adverse change in the financial

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position, results of operations or business of the Authority. The other financial
and statistical information and data of the Authority, included in the Preliminary
Memorandum, the Time of Sale Memorandum and the Final Memorandum, have been fairly stated
in all material respects in relation to the relevant financial statements, of the
Authority, from which such information has been derived.

     (ii) None of the Authority, its Affiliates or any person acting on its or their
behalf has engaged or will engage in any directed selling efforts (within the meaning of
Regulation S) with respect to the Securities and the Authority and its Affiliates and any
person acting on its or their behalf have complied and will comply with the offering
restrictions requirement of Regulation S, except no representation, warranty or agreement
is made by the Authority in this paragraph with respect to the Initial Purchasers.

     (jj) The waivers of sovereign immunity (including the related agreements to submit
claims to binding arbitration) by the Tribal Parties contained in this Agreement are in
compliance with all applicable federal, state, local government, tribal and Governmental
Component laws, ordinances, rules, regulations and resolutions, and are irrevocable
waivers, valid and legally binding on the Tribal Parties, enforceable against each in
accordance with its terms and no further action is required to make them effective.

     (kk) It is not necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchasers in the manner contemplated by this Agreement to
register the Securities under the Securities Act or to qualify the Indenture under the
Trust Indenture Act of 1939, as amended.

     (ll) The Securities satisfy the requirements set forth in Rule 144A(d)(3) under the
Securities Act.

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

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

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

     (oo) The Authority has the exclusive right to develop and operate, collect the
revenues of, and pledge the revenues and assets of the Foothill Oaks Casino, subject to
the ownership rights of the Tribe in and to the real property and the buildings and
fixtures located thereon and related thereto held in trust for the Tribe by the United
States and the rights of the Manager pursuant to the Development and Management Agreement.
Upon completion of the Highway 50 interchange project described in the Time of Sale
Memorandum, the Authority will have all necessary and desirable access and right to enter
onto the lands held in trust for the Tribe for the purpose of operating the Foothill Oaks
Casino and conducting the business of the Authority.

     (pp) Except as set forth in the Time of Sale Memorandum and the Final Memorandum, the
contemplated operation and use and construction of the Foothill Oaks Casino and Resort in
the manner set forth in the Time of Sale Memorandum and the Final Memorandum will be, at
the time of operation and use and construction, as applicable, in compliance with all
applicable municipal, county, state, tribal and federal laws, regulations, ordinances,
standards, order and other regulations, except where the failure to comply therewith would
not, individually or in the aggregate, have a Tribal Parties Material Adverse Effect.
Except as set forth in the Time of Sale Memorandum and the Final Memorandum, under current
applicable Gaming Laws, the Foothill Oaks Casino may be used for the purposes contemplated
in the Time of Sale Memorandum, the Final Memorandum, the Indenture, the Securities and
the Security Documents.

     (qq) The anticipated schedule of construction of the Foothill Oaks Casino is as set
forth in the Final Memorandum. The anticipated cost of construction of the Foothill Oaks
Casino (including interest, legal, architectural, engineering, planning, zoning and other
similar costs) does not exceed the amounts for such costs set forth under the caption “Use
of Proceeds” in the Time of Sale Memorandum and the Final Memorandum. In addition, each
of the other amounts set forth under the caption “Use of Proceeds” in the Time of Sale
Memorandum and the Final Memorandum are based upon reasonable assumptions as to all
matters material to the estimates set forth therein and are not expected to exceed the
amounts set forth for such items.

     (rr) Except as disclosed in the Time of Sale Memorandum and the Final Memorandum, no
relationship, direct or indirect, exists between or among any of the Tribal Parties, on
the one hand, and the directors,

13

 

officers, employees, representatives, council members or Affiliates, of any of the
Tribal Parties, on the other hand, which would be required by the Securities Act to be
described in the Final Memorandum if the Final Memorandum were a prospectus included in a
registration statement on Form S-1 filed with the Securities and Exchange Commission.

     (ss) The statistical and market-related data included in the Time of Sale Memorandum
and the Final Memorandum are based on or derived from sources which the Authority believes
to be reliable and accurate in all material respects.

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

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

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

     (ww) Other than the engagement letter with respect to the offering of the Securities,
there are no contracts, agreements or understandings between the Tribal Parties and any
other party that would give rise to a valid claim against any of the Tribal Parties for a
brokerage commission, finder’s fee or like payment in connection with this offering or the
issuance of the Securities.

     (xx) Other than those submitted for review by the Chairman of the National Indian
Gaming Commission in connection with the approval of the Development and Management
Agreement, as defined in the Indenture, none of the Offering Documents or the Material
Agreements to which any Tribal Party is a party, taken individually or as a whole,

14

 

constitutes a “management contract” or a “management agreement” within the meaning of
25 U.S.C. § 2711, or deprives the Authority of the sole proprietary interest and
responsibility of the conduct of gaming. Other than those received or filed as of the
Closing Date, no consent, approval, authorization or order of, and notice to or filing
with, any governmental agency or body or any court, including specifically the Secretary
of the Interior of the United States or the Chairman of the National Indian Gaming
Commission, is required to be obtained in connection with the execution, delivery and
performance of the Transaction Documents or as a condition of their validity or
enforceability.

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

     1.02 The Manager represents and warrants to, and agrees with, the Initial Purchasers and the
Tribal Parties that:

     (a) The Manager has no subsidiaries, has been duly organized, is validly existing as
a Delaware limited liability company in good standing under the laws of the jurisdiction
of its organization, has the limited liability company power and authority to own its
property and to conduct its business as described in the Time of Sale Memorandum and is
duly qualified to transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Manager, taken as a whole (the
“Manager Material Adverse Effect”).

     (b) This Agreement has been duly authorized, executed and delivered by the Manager
and is a valid and binding agreement of the Manager, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency or similar laws affecting creditors’
rights generally and general principles of equity.

     (c) Each of the Collateral Documents to which the Manager is a party has been duly
authorized, executed and delivered by, and is a valid and binding agreement of, the
Manager, enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency or similar laws affecting creditors’ rights generally and general principles of
equity.

15

 

     (d) Each of the Material Agreements to which the Manager is a party has been duly
authorized, executed and delivered by, and is a valid and binding agreement of, the
Manager, enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency or similar laws affecting creditors’ rights generally and general principles of
equity.

     (e) The Manager is not now and, after giving effect to the offering of the
Securities, will not be (i) in violation of any of its organizational documents, (ii) in
default in the performance of any bond, debenture, note, indenture, mortgage, deed of
trust or other agreement or instrument to which it is a party or by which it is bound or
to which any of its properties is subject, or (iii) in violation of any local, state or
federal law, statute, ordinance, rule, regulation, requirement, judgment or court decree
other than, in the case of clauses (ii) and (iii), any default or violation that would not
reasonably be expected to have a Manager Material Adverse Effect. Except as disclosed in
the Time of Sale Memorandum, to the best knowledge of the Manager, there exists no
condition that, with notice, the passage of time or otherwise, would constitute a default
under any such document or instrument referred to in clauses (i) and (ii) which default
would have a Manager Material Adverse Effect. The Manager is and has been in compliance
with all local, state and federal statutes, laws, ordinances, rules and regulations
applicable to its properties and its business, except where the failure so to be in
compliance would not have a Manager Material Adverse Effect.

     (f) None of (i) the execution, delivery or performance by the Manager of this
Agreement or the Collateral Documents to which the Manager is a party or the Material
Agreements to which the Manager is a party, and (ii) the consummation by the Manager of
the transactions contemplated hereby and thereby will (A) violate, conflict with or result
in a breach of any of the terms or provisions of, or constitute a default under (or an
event that with notice or the lapse of time, or both, would constitute a default), or
require consent under (other than consents which were previously obtained or will have
been obtained on or before the Closing Date), or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Manager, or an
acceleration of any indebtedness of the Manager, except for liens, charges, and
encumbrances contemplated thereby, (B) violate or conflict with any organizational
document of the Manager, (C) violate or conflict with any statute, rule or regulation
applicable to the Manager or any of its respective assets or properties (including, but
without limitation, any Gaming Law), (D) violate or conflict with any judgment, decree,
order, statute, law, ordinance, rule or regulation of any court or any public,
governmental or regulatory agency, body or authority having jurisdiction

16

 

over the Manager or any of its assets or properties or (E) violate or conflict with
any provision of any bond, debenture, note, indenture, mortgage, deed of trust or other
agreement or instrument to which the Manager is a party or by which the Manager or its
properties is or may be bound, other than, in the case of clauses (A), (C), (D) or (E),
any default, violation or conflict that would not reasonably be expected to have a Manager
Material Adverse Effect.

     (g) Other than as described in the Time of Sale Memorandum, no consent, approval,
authorization or order of, or filing, registration, qualification, license or permit of or
with, (i) any court or governmental, regulatory or administrative agency or authority
having jurisdiction over the Manager or any of its properties or assets (including,
without limitation, the Secretary of the Interior or any Gaming Authority), or (ii) any
other person is required for the execution, delivery and performance by the Manager of
this Agreement and the consummation of the transactions contemplated hereby and thereby,
except (A) such as have been or will be obtained and made on or prior to the Closing Date,
(B) routine organizational filings and renewals of licenses, (C) routine filings under the
Securities Act and the Exchange Act, (D) filings with the applicable Gaming Authority or
(E) where the failure to obtain any such consent, approval, authorization or order of, or
filing, registration, qualification, license or permit would not, individually or in the
aggregate, reasonably be expected to result in a Manager Material Adverse Effect.

     (h) There has not occurred any material adverse change, or any development which is
reasonably likely to result in a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the Manager from
that set forth in the Time of Sale Memorandum provided to prospective purchasers of the
Securities.

     (i) Other than proceedings accurately described in all material respects in the Time
of Sale Memorandum, there are no legal or governmental proceedings pending or, to the
Manager’s knowledge, threatened to which the Manager is a party or to which any of the
properties of the Manager is subject that would have a Manager Material Adverse Effect or
that would adversely affect the power or ability of the Manager to perform its obligations
under this Agreement, or to consummate the transactions contemplated by the Time of Sale
Memorandum.

     (j) The Manager possesses, and is operating in compliance with, all certificates,
approvals, orders, franchises, authorities, licenses (including, without limitation,
Gaming Licenses (as defined in the

17

 

Indenture)) or permits issued by the appropriate local, state, federal, tribal or
foreign regulatory agencies or bodies (including any Gaming Authority) as are necessary to
own and lease its properties as currently contemplated and as are legally required for (i)
the performance of its obligations under the Material Agreements to which it is a party
and (ii) for the operation of its business as presently conducted except those that would
not reasonably be expected to result in a Manager Material Adverse Effect (collectively,
all such legally required certificates, approvals, orders, franchises, authorities,
licenses and permits are referred to herein as “Manager Licenses”), all of which are valid
and in full force and effect. The Manager has not received any notice of proceedings
relating to, limiting, suspending, modifying, revoking or failing to renew any of such
Manager Licenses. The descriptions in the Time of Sale Memorandum of local, state,
federal, tribal or foreign statutes, laws, ordinances, rules and regulations governing the
Manager and its businesses, including, without limitation, any proposed amendments or
additions to any such statutes, laws, ordinances, rules or regulations, are accurate in
all material respects and fairly present the information required to be shown therein.
The Manager has not received any notice of the enactment, amendment or repeal of any such
statutes, laws, ordinances, rules or regulations required to be described in the Time of
Sale Memorandum, except for such enactments, amendments or repeals as are described in the
Time of Sale Memorandum.

     (k) All material tax returns required to be filed by the Manager in all jurisdictions
have been so filed. All taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due or claimed to be due from such entities or that
are due and payable have been paid, other than those being contested in good faith and for
which adequate reserves have been provided or those currently payable without penalty or
interest. To the knowledge of the Manager, there are no material proposed additional tax
assessments against the Manager, or the assets or property of the Manager, except those
tax assessments for which adequate reserves have been established.

     (l) There are no contracts, agreements or understandings between the Manager and any
other party that would give rise to a valid claim against the Manager for a brokerage
commission, finder’s fee or like payment in connection with this offering or the issuance
of the Securities.

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

18

 

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

     (o) There are no management contracts or collateral agreements within the meaning of
IGRA relating to the Foothill Oaks Casino to which the Manager is a party except for the
Material Agreements and the Transaction Documents to which the Manager is a party.

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

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

     (r) None of the information furnished by the Manager for use in either the Time of
Sale Memorandum as of its date or the Final Memorandum, as of its date or as of the
Closing Date contains or represents an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided that this
representation, warranty and agreement shall not apply to statements in or omissions from
the Time of Sale Memorandum, the Final Memorandum or any amendment or supplement thereto
made in reliance upon and in conformity with information furnished to the Authority or the
Manager in writing by the Initial Purchasers expressly for use in the Time of Sale
Memorandum, the Final Memorandum or amendment or supplement thereto, as the case may be.
Neither the Manager nor its

19

 

Affiliates has distributed or will distribute, prior to the later of the Closing Date and
the completion of the Initial Purchasers’ distribution of the Securities, any offering
material in connection with the offering and sale of the Securities other than the Time of
Sale Memorandum and the Final Memorandum.

     (s) The anticipated schedule of construction of the Foothill Oaks Casino is as set
forth in the Final Memorandum. The anticipated cost of construction of the Foothill Oaks
Casino (including interest, legal, architectural, engineering, planning, zoning and other
similar costs) does not exceed the amounts for such costs set forth under the caption “Use
of Proceeds” in the Time of Sale Memorandum and the Final Memorandum. In addition, each
of the other amounts set forth under the caption “Use of Proceeds” in the Time of Sale
Memorandum and the Final Memorandum are based upon reasonable assumptions as to all
matters material to the estimates set forth therein and are not expected to exceed the
amounts set forth for such items.

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

     The representations and warranties of the Manager to the Tribal Parties under this
Section 1.02 shall not survive the Closing Date. Other than claims made under Section 9
hereof, the Tribal Parties will not make a claim against the Manager after the Closing
Date based solely on a breach of representations or warranties under this Section 1.02.

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

     2. Agreements to Sell and Purchase. The Authority hereby agrees to sell to the several
Initial Purchasers, and each Initial Purchaser, upon the basis of the representations and
warranties herein contained, but subject to the conditions hereinafter stated, agrees, severally
and not jointly, to purchase from the Authority the respective principal amount of Securities set
forth in Schedule I hereto opposite its name at a purchase price of 97.9% of the principal amount
thereof (the “Purchase Price”) plus accrued interest, if any, to the Closing Date.

20

 

     3. Terms of Offering. You have advised the Authority that the Initial Purchasers will make an
offering of the Securities purchased by the Initial Purchasers hereunder as soon as practicable
after this Agreement is entered into as in your judgment is advisable.

     4. Payment and Delivery. Payment for the Securities shall be made to the Authority in Federal
or other funds immediately available in New York City against delivery of such Securities for the
respective accounts of the several Initial Purchasers at 10:00 a.m., New York City time, on June
28, 2007, or at such other time on the same or such other date, not later than June 28, 2007, as
shall be designated in writing by you. The time and date of such payment are hereinafter referred
to as the “Closing Date.”

     The Securities shall be in definitive form or global form, as specified by you, and registered
in such names and in such denominations as you shall request in writing not later than one full
business day prior to the Closing Date. The Securities shall be delivered to you on the Closing
Date for the respective accounts of the several Initial Purchasers, with any transfer taxes payable
in connection with the transfer of the Securities to the Initial Purchasers duly paid, against
payment of the Purchase Price therefor plus accrued interest, if any, to the date of payment and
delivery.

     5. Conditions to the Initial Purchasers’ Obligations. The several obligations of the Initial
Purchasers to purchase and pay for the Securities on the Closing Date are subject to the following
conditions:

     (a) Subsequent to the execution and delivery of this Agreement and prior to the
Closing Date:

     (i) there shall not have occurred any downgrading, nor shall any notice
have been given of any intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the possible change, in
the rating accorded any of the securities of the Authority by any “nationally
recognized statistical rating organization,” as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act; and

     (ii) there shall not have occurred any change, or any development involving
a prospective change, in the condition, financial or otherwise, or in the
earnings, business or operations of the Tribal Parties from that set forth in
the Time of Sale Memorandum as of the date of this Agreement provided to the
prospective purchasers of the Securities that, in your judgment, is material and
adverse and that makes it, in your judgment,

21

 

impracticable to market the Securities on the terms and in the manner
contemplated in the Time of Sale Memorandum.

     (b) The Initial Purchasers shall have received on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of each of the Tribal Parties,
to the effect set forth in Section 5(a)(i) and to the effect that the representations and
warranties of the Authority and the Tribe contained in this Agreement are true and correct
as of the Closing Date and that the Authority and the Tribe have complied with all of the
agreements and satisfied all of the conditions on their part to be performed or satisfied
hereunder on or before the Closing Date.

     The officer signing and delivering such certificate may rely upon the best of his or
her knowledge as to proceedings threatened.

     (c) The Initial Purchasers shall have received on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of the Manager, to the effect
that the representations and warranties of the Manager contained in this Agreement are
true and correct as of the Closing Date and that the Manager has complied with all of the
agreements and satisfied all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date.

     The officer signing and delivering such certificate may rely upon the best of his or
her knowledge as to proceedings threatened

     (d) The Initial Purchasers shall have received on the Closing Date an opinion dated
the Closing Date, to the effect set forth in (i) Exhibit A of Faegre & Benson LLP, counsel
for the Authority and the Tribe, (ii) Exhibit B of Karshmer & Associates, counsel for the
Authority and the Tribe, (iii) Exhibit C of Gray, Plant, Mooty, Mooty & Bennett, P.A.,
Minnesota counsel for the Manager, and (iv) Exhibit D of Hamilton Quigley & Twait, PLC,
special counsel for the Manager. Such opinion shall be rendered to the Initial Purchasers
at the request of the Authority, Tribe and Manager, as applicable, and shall so state
therein.

     (e) The Initial Purchasers shall have received on the Closing Date an opinion of
Latham & Watkins LLP, counsel for the Initial Purchasers.

     (f) The Initial Purchasers shall have received on each of the date hereof and the
Closing Date a letter, dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to the Initial Purchasers, from McGladrey & Pullen LLP,
independent public accountants to the Authority, containing statements and information of
the

22

 

type ordinarily included in accountants’ “comfort letters” to underwriters with
respect to the financial statements and certain financial information contained in or
incorporated by reference into the Time of Sale Memorandum and the Final Memorandum;
provided that the letter delivered on the Closing Date shall use a “cut-off date” not
earlier than the date hereof.

     (g) The Authority shall have received all governmental and regulatory approval
required to be obtained prior to the Closing Date pursuant to this Agreement, the
Collateral Documents and the Indenture.

     (h) The Tribal Gaming Commission shall have provided a complete exclusion from the
licensing requirements of Section 6.4.6 of the Compacts for (i) all federally-regulated or
state-regulated banks, savings and loans or other federally- or state-regulated lending
institutions, (ii) any agency or the federal, state or local government or (iii) any
investor, who, alone or in conjunction with others, holds less than 10% of any outstanding
indebtedness evidenced by the bonds issued by such Tribe.

     (i) The State Commission shall have issued a determination that Morgan Stanley & Co.
Incorporated meets the criteria for registration of Qualified Bond Holders pursuant to the
provisions of CGCC-2. The Tribal Gaming Commission shall have licensed Morgan Stanley &
Co. Incorporated as a financial source.

     (j) The Tribe and the Authority shall have received all requisite approvals from the
NIGC in connection with the Offering Documents and the Material Agreements.

     (k) With respect to any Collateral Document to be executed on the Closing Date, the
Authority and each of the other parties thereto shall have entered into each such
Collateral Document to which each is a party. With respect to any Material Agreements to
be executed at the Closing Time, the Authority and each of the other parties thereto shall
have entered into each such Material Agreements to which each is a party. With respect to
any Material Agreement entered into prior to the Closing Date, such Material Agreement
shall be in full force and effect, and as of the date hereof, there shall not be any
defaults or events of default, that with notice, the passage of time or otherwise could be
a default, under any provisions of such Material Agreements by any party thereto, other
than as would not, individually or in the aggregate, result in a Tribal Parties Material
Adverse Effect. The Initial Purchasers shall have received executed copies of each
Collateral Document and Material Agreement.

23

 

     (l) The Initial Purchasers shall have performed a recent lien, tax lien, judgment and
litigation search in each of the jurisdictions or offices in which Uniform Commercial Code
financing statements or other filings or recordations should be made to evidence or
perfect (with the priority required under the Collateral Documents) security interests in
all assets and property of the Authority, and such search shall reveal no security
interest, mortgage, pledge, lien, encumbrance, claim or equity; other than liens permitted
by the Indenture and the Collateral Documents.

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

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

     6. Covenants of the Authority. The Authority covenants with each Initial Purchaser as follows:

     (a) To furnish to you in New York City, without charge, prior to 10:00 a.m. New York
City time on the business day next succeeding the date of this Agreement and during the
period mentioned in Section 6(d) or (e), as many copies of the Time of Sale Memorandum,
the Final Memorandum, any documents incorporated by reference therein and any supplements
and amendments thereto as you may reasonably request.

     (b) Before amending or supplementing the Preliminary Memorandum, the Time of Sale
Memorandum or the Final Memorandum, to furnish to you a copy of each such proposed
amendment or supplement and not to use any such proposed amendment or supplement to which
you reasonably object.

     (c) To furnish to you a copy of each proposed Additional Written Offering
Communication to be prepared by or on behalf of, used by, or referred to by the Authority
and not to use or refer to any proposed Additional Written Offering Communication to which
you reasonably object. 

     (d) If the Time of Sale Memorandum is being used to solicit offers to buy the
Securities at a time when the Final Memorandum is not

24

 

yet available to prospective purchasers and any event shall occur or condition exist
as a result of which it is necessary to amend or supplement the Time of Sale Memorandum in
order to make the statements therein, in the light of the circumstances, not misleading,
or if, in the opinion of counsel for the Initial Purchasers, it is necessary to amend or
supplement the Time of Sale Memorandum to comply with applicable law, forthwith to prepare
and furnish, at its own expense, to the Initial Purchasers and to any dealer upon request,
either amendments or supplements to the Time of Sale Memorandum so that the statements in
the Time of Sale Memorandum as so amended or supplemented will not, in the light of the
circumstances when delivered to a prospective purchaser, be misleading or so that the Time
of Sale Memorandum, as amended or supplemented, will comply with applicable law.

     (e) If, during such period after the date hereof and prior to the date on which all
of the Securities shall have been sold by the Initial Purchasers, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the Final
Memorandum in order to make the statements therein, in the light of the circumstances when
the Final Memorandum is delivered to a purchaser, not misleading, or if, in the opinion of
counsel for the Initial Purchasers, it is necessary to amend or supplement the Final
Memorandum to comply with applicable law, forthwith to prepare and furnish, at its own
expense, to the Initial Purchasers, either amendments or supplements to the Final
Memorandum so that the statements in the Final Memorandum as so amended or supplemented
will not, in the light of the circumstances when the Final Memorandum is delivered to a
purchaser, be misleading or so that the Final Memorandum, as amended or supplemented, will
comply with applicable law.

     (f) To cooperate with the Initial Purchasers and counsel for the Initial Purchasers
to qualify the Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions as you shall reasonably request. The Authority shall not be required to
qualify as a foreign corporation or to take any action that would subject it to general
service of process in any such jurisdiction where it is not presently qualified or where
it would be subject to taxation as a foreign corporation.

     (g) Whether or not the transactions contemplated in this Agreement are consummated or
this Agreement is terminated, to pay or cause to be paid all expenses incident to the
performance of its obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Authority’s counsel and the Authority’s accountants in
connection with the issuance and sale of the Securities and all other fees or expenses in
connection with the preparation of the Preliminary Memorandum, the

25

 

Time of Sale Memorandum, the Final Memorandum, any Additional Written Offering
Communication prepared by or on behalf of, used by, or referred to by the Authority and
any amendments and supplements to any of the foregoing, including all printing costs
associated therewith, and the delivering of copies thereof to the Initial Purchasers, in
the quantities herein above specified, (ii) 50% of the fees, disbursements and expenses of
all counsel and consultants of the Initial Purchasers (including, but not limited to,
counsel for the Initial Purchasers, Indian law counsel to the Initial Purchasers, any
insurance consultant of the Initial Purchasers and the Independent Construction Consultant
(as defined in the Indenture), (iii) all costs and expenses related to the transfer and
delivery of the Securities to the Initial Purchasers, including any transfer or other
taxes payable thereon, (iv) the cost of printing or producing any Blue Sky or legal
investment memorandum in connection with the offer and sale of the Securities under state
securities laws and all expenses in connection with the qualification of the Securities
for offer and sale under state securities laws as provided in Section 6(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for the Initial
Purchasers in connection with such qualification and in connection with the Blue Sky or
legal investment memorandum, (v) any fees charged by rating agencies for the rating of the
Securities, (vi) the fees and expenses, if any, incurred in connection with the admission
of the Securities for trading in PORTAL or any appropriate market system, (vii) the costs
and charges of the Trustee and any transfer agent, registrar or depositary, (viii) the
cost of the preparation, issuance and delivery of the Securities, (ix) the costs and
expenses of the Authority relating to investor presentations on any “road show” undertaken
in connection with the marketing of the offering of the Securities, including, without
limitation, expenses associated with the preparation or dissemination of any electronic
road show, expenses associated with production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show presentations with
the prior approval of the Authority, travel and lodging expenses of the representatives
and officers of the Authority and any such consultants, and the cost of any aircraft
chartered in connection with the road show, (x) the document production charges and
expenses associated with printing this Agreement and (xi) all other cost and expenses
incident to the performance of the obligations of the Authority hereunder for which
provision is not otherwise made in this Section. It is understood, however, that except
as otherwise provided in this Section, Section 9, and the last paragraph of Section 12,
the Initial Purchasers will pay all of their costs and expenses, including fees and
disbursements of their counsel, transfer taxes payable on resale of any of the Securities
by them and any advertising expenses connected with any offers they may make.

26

 

     (h) Neither the Authority nor any Affiliate will sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in the
Securities Act) which could be integrated with the sale of the Securities in a manner
which would require the registration under the Securities Act of the Securities.

     (i) Not to solicit any offer to buy or offer or sell the Securities by means of any
form of general solicitation or general advertising (as those terms are used in Regulation
D under the Securities Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act.

     (j) While any of the Securities remain “restricted securities” within the meaning of
the Securities Act, to make available, upon request, to any seller of such Securities the
information specified in Rule 144A(d)(4) under the Securities Act, unless the Authority is
then subject to Section 13 or 15(d) of the Exchange Act.

     (k) If requested by you, to use its best efforts to permit the Securities to be
designated PORTAL securities in accordance with the rules and regulations adopted by the
National Association of Securities Dealers, Inc. relating to trading in the PORTAL Market.

     (l) None of the Authority, its Affiliates or any person acting on its or their behalf
(other than the Initial Purchasers) will engage in any directed selling efforts (as that
term is defined in Regulation S) with respect to the Securities, and the Authority and its
Affiliates and each person acting on its or their behalf (other than the Initial
Purchasers) will comply with the offering restrictions requirement of Regulation S.

     (m) During the period of two years after the Closing Date, the Authority will not,
and will not permit any of its affiliates (as defined in Rule 144 under the Securities
Act) to resell any of the Securities which constitute “restricted securities” under Rule
144 that have been reacquired by any of them.

     (n) Not to take any action prohibited by Regulation M under the Exchange Act in
connection with the distribution of the Securities contemplated hereby.

     7. Covenants of the Tribe. The Tribe covenants with each Initial Purchaser as follows:

     (a) To advise the Initial Purchasers promptly and, if requested by the Initial
Purchasers, to confirm such advice in writing, of the happening

27

 

of any event that makes any statements of a material fact made in the Time of Sale
Memorandum untrue or that requires the making of any additions to or changes in the Time
of Sale Memorandum in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

     (b) Not to sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in the Securities Act) that would be integrated with
the sale of the Securities in a manner that would require the registration under the
Securities Act of the sale to the Initial Purchasers or the Eligible Purchasers of the
Securities or to take any other action that would result in the sale of the Securities
pursuant hereto or the Exempt Resales not being exempt from registration under the
Securities Act.

     (c) To take any other actions reasonably requested by the Authority or the Initial
Purchasers to enable the Authority to comply with its obligations set forth in Section 4
hereof.

     8. Offering of Securities; Restrictions on Transfer. (a) Each Initial Purchaser, severally
and not jointly, represents and warrants that such Initial Purchaser is a qualified institutional
buyer as defined in Rule 144A under the Securities Act (a “QIB”). Each Initial Purchaser, severally
and not jointly, agrees with the Authority that (i) it will not solicit offers for, or offer or
sell, such Securities by any form of general solicitation or general advertising (as those terms
are used in Regulation D under the Securities Act) or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act and (ii) it will solicit offers for such
Securities only from, and will offer such Securities only to, persons that it reasonably believes
to be (A) in the case of offers inside the United States, QIBs and (B) in the case of offers
outside the United States, to persons other than U.S. persons (“foreign purchasers,” which term
shall include dealers or other professional fiduciaries in the United States acting on a
discretionary basis for foreign beneficial owners (other than an estate or trust)) in reliance upon
Regulation S under the Securities Act that, in each case, in purchasing such Securities are deemed
to have represented and agreed as provided in the Final Memorandum under the caption “Transfer
Restrictions”.

     (b) Each Initial Purchaser, severally and not jointly, represents, warrants, and
agrees with respect to offers and sales outside the United States that:

     (i) such Initial Purchaser understands that no action has been or will be
taken in any jurisdiction by the Authority that would permit a public offering
of the Securities, or possession or

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distribution of the Preliminary Memorandum, the Time of Sale Memorandum,
the Final Memorandum or any other offering or publicity material relating to the
Securities, in any country or jurisdiction where action for that purpose is
required;

     (ii) such Initial Purchaser will comply with all applicable laws and
regulations in each jurisdiction in which it acquires, offers, sells or delivers
Securities or has in its possession or distributes the Preliminary Memorandum,
the Time of Sale Memorandum, the Final Memorandum or any such other material, in
all cases at its own expense;

     (iii) the Securities have not been registered under the Securities Act and
may not be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except in accordance with Rule 144A or Regulation S
under the Securities Act or pursuant to another exemption from the registration
requirements of the Securities Act;

     (iv) such Initial Purchaser has offered the Securities and will offer and
sell the Securities (A) as part of their distribution at any time and (B)
otherwise until 40 days after the later of the commencement of the offering and
the Closing Date, only in accordance with Rule 903 of Regulation S or as
otherwise permitted in Section 8(a); accordingly, neither such Initial
Purchaser, its Affiliates nor any persons acting on its or their behalf have
engaged or will engage in any directed selling efforts (within the meaning of
Regulation S) with respect to the Securities, and any such Initial Purchaser,
its Affiliates and any such persons have complied and will comply with the
offering restrictions requirement of Regulation S;

     (v) such Initial Purchaser, in relation to each Member State of the
European Economic Area which has implemented the Prospectus Directive (each, a
“Member State”), has represented and agreed that with effect from and including
the date on which the Prospectus Directive is implemented in that Member State
it has not made and will not make an offer of Securities to the public in that
Member State, except that it may, with effect from and including such date, make
an offer of Securities to the public in that Member State:

     (A) at any time to legal entities which are authorized or
regulated to operate in the financial markets

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or, if not so authorised or regulated, whose corporate purpose is
solely to invest in securities;

     (B) at any time to any legal entity which has two or more of (1)
an average of at least 250 employees during the last financial year;
(2) a total balance sheet of more than €43,000,000 and (3) an
annual net turnover of more than €50,000,000, as shown in its last
annual or consolidated accounts; or

     (C) at any time in any other circumstances which do not require
the publication by us of a prospectus pursuant to Article 3 of the
Prospectus Directive.

For the purposes of the above, the expression an “offer of Securities to the public” in
relation to any Securities in any Member State means the communication in any form and by
any means of sufficient information on the terms of the offer and the Securities to be
offered so as to enable an investor to decide to purchase or subscribe the Securities, as
the same may be varied in that Member State by any measure implementing the Prospectus
Directive in that Member State and the expression “Prospectus Directive” means Directive
2003/71/EC and includes any relevant implementing measure in that Member State;

     (vi) such Initial Purchaser has represented and agreed that it has only
communicated or caused to be communicated and will only communicate or cause to
be communicated an invitation or inducement to engage in investment activity
(within the meaning of Section 21 of the Financial Services and Markets Act
2000) in connection with the issue or sale of the Securities in circumstances in
which Section 21(1) of such Act does not apply to us and it has complied and
will comply with all applicable provisions of such Act with respect to anything
done by it in relation to any Securities in, from or otherwise involving the
United Kingdom;

     (vii) such Initial Purchaser understands that the Securities have not been
and will not be registered under the Securities and Exchange Law of Japan, and
represents that it has not offered or sold, and agrees not to offer or sell,
directly or indirectly, any Securities in Japan or for the account of any
resident thereof except pursuant to any exemption from the registration
requirements of the Securities and Exchange Law of Japan and otherwise in
compliance with applicable provisions of Japanese law; and

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     (viii) such Initial Purchaser agrees that, at or prior to confirmation of
sales of the Securities, it will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases
Securities from it during the restricted period a confirmation or notice to
substantially the following effect:

     “The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933 (the “Securities Act”) and may not be
offered and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time
or (ii) otherwise until 40 days after the later of the commencement of
the offering and the closing date, except in either case in accordance
with Regulation S (or Rule 144A if available) under the Securities Act.
Terms used above have the meaning given to them by Regulation S.”

Terms used in this Section 8(b) have the meanings given to them by Regulation S.

     9. Indemnity and Contribution. (a) The Authority agrees to indemnify and hold harmless each
Initial Purchaser, each person, if any, who controls any Initial Purchaser within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act, and each affiliate of
any Initial Purchaser within the meaning of Rule 405 under the Securities Act from and against any
and all losses, claims, damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any such action or
claim) caused by any untrue statement or alleged untrue statement of a material fact contained in
the Preliminary Memorandum, the Time of Sale Memorandum, any Additional Written Offering
Communication prepared by or on behalf of, used by, or referred to by the Authority, or the Final
Memorandum or any amendment or supplement thereto, or caused by any omission or alleged omission to
state therein a material fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to any Initial Purchaser furnished to the
Authority in writing by such Initial Purchaser through you expressly for use therein.

          (b) The Manager agrees to indemnify and hold harmless each Initial Purchaser, each person, if
any, who controls any Initial Purchaser within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, and each affiliate of any Initial Purchaser within the
meaning of

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Rule 405 under the Securities Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim), but only with reference to
information furnished by the Manager to the Authority or the Initial Purchaser, as the case may be,
in writing by the Manager for use in the Preliminary Memorandum, the Time of Sale Memorandum, any
Additional Written Offering Communication prepared by or on behalf of, used by or referred to by
the Authority or the Initial Purchasers, or the Final Memorandum or any amendment or supplement
thereto.

          (c) The Manager agrees to indemnify and hold harmless each Tribal Party, each person, if any,
who controls any Tribal Party within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, and each affiliate of any Tribal Party within the meaning of Rule
405 under the Securities Act from and against any and all losses, claims, damages and liabilities
related to third party actions or claims (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any such action or
claim), but only with reference to information furnished by the Manager to the Authority or the
Initial Purchaser, as the case may be, in writing by the Manager for use in the Preliminary
Memorandum, the Time of Sale Memorandum, any Additional Written Offering Communication prepared by
or on behalf of, used by or referred to by the Authority or the Initial Purchasers, or the Final
Memorandum or any amendment or supplement thereto.

          (d) Each Initial Purchaser agrees, severally and not jointly, to indemnify and hold harmless
the members of the Tribal Council, the Authority, the Manager, their respective directors and
officers and each person, if any, who controls the Authority or Manager within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Authority or Manager to such Initial Purchaser, but only with
reference to information relating to such Initial Purchaser furnished to the Authority or Manager,
as the case may be, in writing by such Initial Purchaser through you expressly for use in the
Preliminary Memorandum, the Time of Sale Memorandum, any Additional Written Offering Communication
prepared by or on behalf of, used by or referred to by the Authority or Manager, or the Final
Memorandum or any amendment or supplement thereto.

          (e) In case any proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to Section 9(a), 9(b),
9(c) or 9(d), such person (the “indemnified party”) shall promptly notify the person against whom
such indemnity may be sought (the “indemnifying party”) in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and any others the indemnifying party may designate in
such proceeding and shall

32

 

pay the fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to
any local counsel) for all such indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by Morgan Stanley & Co.
Incorporated, in the case of parties indemnified pursuant to Section 9(a) and 9(b), by the Tribal
Party in the case of parties indemnified pursuant to Section 9(c), and by the members of the Tribal
Council, the Authority or Manager, as the case may be, in the case of parties indemnified pursuant
to Section 9(b). The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second
and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with
such request prior to the date of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims that are the subject
matter of such proceeding.

          (f) To the extent the indemnification provided for in Section 9(a), 9(b), 9(b) or 9(d) is
unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims,

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damages or liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Tribal Parties, the Manager or the Initial Purchasers, as the case may be,
from the offering of the Securities or (ii) if the allocation provided by clause 9(f)(i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 9(f)(i) above but also the relative fault of the Tribal
Parties, the Manager or the Initial Purchasers, as the case may be, in connection with the
statements or omissions that resulted in such losses, claims, damages or liabilities, as well as
any other relevant equitable considerations. The relative benefits received by the Tribal Parties,
the Manager or the Initial Purchasers, as the case may be, in connection with the offering of the
Securities shall be deemed to be in the same respective proportions as the net proceeds from the
offering of the Securities (before deducting expenses) received by the Tribal Parties or the
Manager, as the case may be, and the total discounts and commissions received by the Initial
Purchasers bear to the aggregate offering price of the Securities. The relative fault of the Tribal
Parties, the Manager or the Initial Purchasers, as the case may be, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to information supplied by the
Tribal Parties, the Manager or the Initial Purchasers and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or omission. The Initial
Purchasers’ respective obligations to contribute pursuant to this Section 9 are several in
proportion to the respective principal amount of Securities they have purchased hereunder, and not
joint.

          (g) The Authority, Manager and the Initial Purchasers agree that it would not be just or
equitable if contribution pursuant to this Section 9 were determined by pro rata allocation (even
if the Initial Purchasers were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred to in Section 9(f).
The amount paid or payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in Section 9(f) shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. Notwithstanding the provisions
of this Section 9, no Initial Purchaser shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities resold by it in the initial placement of
such Securities were offered to investors exceeds the amount of any damages that such Initial
Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies provided for in this

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Section 9 are not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.

          (h) The indemnity and contribution provisions contained in this Section 9 and the
representations, warranties and other statements of the Authority and the Manager contained in this
Agreement shall remain operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of any Initial Purchaser, any person
controlling any Initial Purchaser or any affiliate of any Initial Purchaser or by or on behalf of
the Authority or Manager, as the case may be, their respective officers or directors or any person
controlling the Authority or Manager, as the case may be, and (iii) acceptance of and payment for
any of the Securities.

     10. Waiver of Sovereign Immunity, Arbitration and Non-Impairment.

         10.01 Irrevocable Waiver of Sovereign Immunity. Neither of the Tribal Parties
consents to any suit, arbitration, legal process, enforcement proceeding, or any dispute resolution
method, except as specifically provided in this Section 10.01. Each of the Tribal Parties hereby
unconditionally and irrevocably waives its sovereign immunity and any and all defenses based
thereon with respect to any claim, demand, dispute, action or cause of action brought by any
Initial Purchaser arising under or in any way connected with or related or incidental to this
Agreement, as the same may be amended or modified from time to time, whether now existing or
hereafter arising and whether sounding in tort, contract or otherwise (collectively “Permitted
Claims”), as further provided in Sections 10.01(a) – (f) hereof. Such waiver shall also extend (a)
to permit the interpretation, enforcement and the seeking of legal or equitable relief and remedies
(whether through an award or granting of specific performance, injunction, mandamus, damages or
otherwise) by the parties hereto (and their successors and assigns permitted hereunder) through
arbitration proceedings as herein provided, and (b) to permit judicial actions to compel, enter
judgment upon, enforce, modify or vacate any award or interim injunctive relief related to the
arbitration proceedings in any of the Applicable Courts described in Section 10.02 below; provided
however that such consent to arbitration does not amount to a general waiver of the sovereign
immunity of either of the Tribal Parties.

          In connection with the foregoing waiver of sovereign immunity by each of the Tribal Parties:

          (a) Duration. The waiver shall commence on the date hereof and apply to all Permitted Claims
that are commenced within three years after the occurrence of the facts that are the primary basis
of the action, or if later, three years from the date those facts reasonably should have been
discovered by the party bringing the action;

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          (b) Grantees. The grantee(s) of the waiver are each party hereto, together with their
successors and assigns hereunder;

          (c) Scope. The scope of the waiver applies to all Permitted Claims brought to (i) interpret
or enforce the provisions of this Agreement, including specifically and without limitation
(including any limitation set forth in the proviso at the end of this paragraph) any claims for
indemnification brought by the Initial Purchasers against the Tribal Parties under the terms of
this Agreement, (ii) enforce and execute any order, judgment, or ruling resulting from such an
action, or (iii) enforce any rights under the Indian Civil Rights Act, 25 U.S.C. § 1301 et seq.,
provided that no claim shall be brought for punitive or consequential damages or for any claim
arising under federal or state securities laws;

          (d) Property and Funds. The only assets or rights against which any award, judgment or other
order for relief arising from this waiver may be enforced are Gaming Assets as defined in
Resolution 2007-20 (the “Tribal Finance Resolution”), whether held in the name of the Authority,
the Tribe or any branch, department, agency, instrumentality, division, subsidiary, authority,
enterprise, corporation, business or other entity directly or indirectly owned or controlled in
whole or in part by either the Authority or the Tribe. Notwithstanding the foregoing, any revenues
or other property transferred by the Authority to any of the Tribal Parties in compliance with the
Securities Offering Documents shall, upon transfer, no longer constitute Gaming Assets;

          (e) Jurisdictions. The courts with jurisdiction with respect to the Permitted Claims are the
Applicable Courts (as defined in Section 10.02 below) (subject to the obligation of each of the
Tribal Parties to submit to arbitration as provided herein); and

          (f) Governing Law. The law applicable to the waiver and the Permitted Claims shall be the
internal laws of the State of New York, except where application of the uniform commercial code of
the State of New York will not recognize a lien and the perfection of a lien on any Gaming Assets
as security for any performance of each of the Tribal Parties hereunder, and the UCC of the Tribe
will recognize the lien or the perfection of the lien, in which case the law the Tribe, as
applicable, that recognizes the lien and perfection shall apply.

     10.02 Designation of Applicable Courts and Jurisdictions. Each of the Tribal Parties
hereby irrevocably consents to the following courts, jurisdictions and venues for the judicial
actions described in Section 10.01 above (the “Applicable Courts”): (a) the United States District
Court for the Southern District of New York, and all courts to which any appeal therefrom may be
available; (b) or if those courts lack jurisdiction over the action, any court of the State of New
York sitting in the City of New York, and all courts to which any

36

 

appeal therefrom may be available; (c) if none of the foregoing courts shall have or accept
jurisdiction, then the courts of the State of California, and all courts to which any appeal
therefrom may be available and (d) if none of the foregoing courts shall have or accept
jurisdiction, then any court of the Tribe (in the case of any Permitted Claim to which the Tribe or
the Authority is a party).

     10.03 Additional Waivers as to Tribal Courts. Each of the Tribal Parties hereby
unconditionally and irrevocably waives the jurisdiction of any tribal courts now or hereafter
existing or created with respect to any Permitted Claim, except as provided in clause (d) of
Section 10.02 above. Each of the Tribal Parties unconditionally and irrevocably waives the
application of any rule or doctrine relating to exhaustion of tribal remedies or comity or
abstention that might otherwise require a Permitted Claim be heard in a tribal court.

     10.04 Agreement not to Contest. In connection with any Permitted Claim, each of the
Tribal Parties hereby unconditionally and irrevocably waives, to the fullest extent it may legally
and effectively do so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding in any court of the United States District Court, Southern District
of New York, and any appellate court from which any appeals therefrom are available, any court of
the State of New York sitting in the City of New York, County of New York, and any appellate court
from which any appeals therefrom are available, or any court of the State of California and any
appellate court from which any appeals therefrom are available. Each of the Tribal Parties
consents to irrevocably waive, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such court.

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

37

 

other party contests such action for judicial relief. Any arbitration undertaken pursuant this
Agreement will take place in the City of New York, County of New York.

     11. Termination. The Initial Purchasers may terminate this Agreement by notice given by you to
the Authority, if after the execution and delivery of this Agreement and prior to the Closing Date
(i) trading generally shall have been suspended or materially limited on, or by, as the case may
be, any of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Market, the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade,
(ii) trading of any securities of the Authority shall have been suspended on any exchange or in any
over-the-counter market, (iii) a material disruption in securities settlement, payment or clearance
services in the United States shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal or New York State authorities or (v) there shall
have occurred any outbreak or escalation of hostilities, or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and which, singly or together
with any other event specified in this clause (v), makes it, in your judgment, impracticable or
inadvisable to proceed with the offer, sale or delivery of the Securities on the terms and in the
manner contemplated in the Time of Sale Memorandum or the Final Memorandum.

     12. Effectiveness; Defaulting Initial Purchasers. This Agreement shall become effective upon
the execution and delivery hereof by the parties hereto.

     If, on the Closing Date, any one or more of the Initial Purchasers shall fail or refuse to
purchase Securities that it or they have agreed to purchase hereunder on such date, and the
aggregate principal amount of Securities which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase is not more than one-tenth of the aggregate
principal amount of Securities to be purchased on such date, the other Initial Purchasers shall be
obligated severally in the proportions that the principal amount of Securities set forth opposite
their respective names in Schedule I bears to the aggregate principal amount of Securities set
forth opposite the names of all such non-defaulting Initial Purchasers, or in such other
proportions as you may specify, to purchase the Securities which such defaulting Initial Purchaser
or Initial Purchasers agreed but failed or refused to purchase on such date; provided that in no
event shall the principal amount of Securities that any Initial Purchaser has agreed to purchase
pursuant to this Agreement be increased pursuant to this Section 12 by an amount in excess of
one-ninth of such principal amount of Securities without the written consent of such Initial
Purchaser. If, on the Closing Date any Initial Purchaser or Initial Purchasers shall fail or
refuse to purchase Securities which it or they have agreed to purchase hereunder on such date and

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the aggregate principal amount of Securities with respect to which such default occurs is more
than one-tenth of the aggregate principal amount of Firm Securities to be purchased on such date,
and arrangements satisfactory to you and the Authority for the purchase of such Securities are not
made within 36 hours after such default, this Agreement shall terminate without liability on the
part of any non-defaulting Initial Purchaser or of the Authority. In any such case either you or
the Authority shall have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Time of Sale Memorandum, the Final
Memorandum or in any other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Initial Purchaser from liability in respect of any
default of such Initial Purchaser under this Agreement.

     If this Agreement shall be terminated by the Initial Purchasers, or any of them, because of
any failure or refusal on the part of the Authority to comply with the terms or to fulfill any of
the conditions of this Agreement, or if for any reason the Authority shall be unable to perform its
obligations under this Agreement, the Authority will reimburse the Initial Purchasers or such
Initial Purchasers as have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably
incurred by such Initial Purchasers in connection with this Agreement or the offering contemplated
hereunder.

     13. Entire Agreement. (a) This Agreement, together with any contemporaneous written
agreements that relate to the offering of the Securities, represents the entire agreement between
the Authority, the Tribe and the Initial Purchasers with respect to the preparation of the
Preliminary Memorandum, the Time of Sale Memorandum, the Final Memorandum, the conduct of the
offering, and the purchase and sale of the Securities.

          (b) The Authority acknowledges that in connection with the offering of the Securities: (i) the
Initial Purchasers have acted at arms length, are not agents of, and owe no fiduciary duties to,
the Authority or any other person, (ii) the Initial Purchasers owe the Authority only those duties
and obligations set forth in this Agreement, and (iii) the Initial Purchasers may have interests
that differ from those of the Authority. The Authority waives to the full extent permitted by
applicable law any claims it may have against the Initial Purchasers arising from an alleged breach
of fiduciary duty in connection with the offering of the Securities.

     14. Counterparts. This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and hereto were upon the
same instrument.

39

 

     15. Applicable Law. This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York.

     16. Headings. The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed a part of this Agreement.

     17. Notices. All communications hereunder shall be in writing and effective only upon receipt
and if to the Initial Purchasers shall be delivered, mailed or sent to you in care of Morgan
Stanley & Co. Incorporated, 1585 Broadway, New York, New York 10036, Attention: High Yield
Syndicate Desk, with a copy to the Legal Department; and if to the Authority shall be delivered,
mailed or sent to P.O. Box 1660, El Dorado, California, 95623-1660, Attention: Chairperson.

40

 

	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	SHINGLE SPRINGS TRIBAL GAMING AUTHORITY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ Nicholas H. Fonseca
 

Name: Nicholas H. Fonseca
	 	 
	 

	 	 	 	Title: Chairman, Tribal Council	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ Richard Lawson
 

Name: Richard Lawson
	 	 
	 

	 	 	 	Title: Chairman	 	 
	 
	 	 	 	 	 	 
	 	 	SHINGLE SPRINGS BAND OF MIWOK INDIANS	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ Nicholas H. Fonseca
 

Name: Nicholas H. Fonseca
	 	 
	 

	 	 	 	Title: Chairman	 	 

41

 

	 	 	 	 	 
	Acknowledged and agreed to as of the date hereof	 	 
	 
	 	 	 	 
	LAKES KAR-SHINGLE SPRINGS, LLC	 	 
	 
	 	 	 	 
	By:

	 	/S/ Timothy Cope
 

Name: Timothy Cope
	 	 
	 

	 	Title: President and CFO	 	 

42

 

	 	 	 	 	 
	Accepted as of the date hereof	 	 
	 
	 	 	 	 
	Morgan Stanley & Co. Incorporated	 	 
	Wells Fargo Securities, LLC	 	 
	 
	 	 	 	 
	By:

	 	Morgan Stanley & Co. Incorporated	 	 
	 
	 	 	 	 
	By:

	 	/S/ Bryan W. Andrzejewski
 

Name: Bryan W. Andrzejewski
	 	 
	 

	 	Title: Executive Director	 	 

43

 

SCHEDULE I

	 	 	 	 	 
	 	 	Principal Amount of	 
	 	 	Securities to be	 
	 Initial Purchaser	 	Purchased	 
	Morgan Stanley & Co. Incorporated
	 	$	261,000,000	 
	Wells Fargo Securities, LLC
	 	$	189,000,000	 
	 
	 	 	 
	Total:
	 	$	450,000,000	 
	 
	 	 	 

I-1

 

 

SCHEDULE II

Time of Sale Memorandum

	1.	 	Preliminary Memorandum issued June 11, 2007
	 
	2.	 	pricing term sheet dated June 22, 2007
	 
	3.	 	electronic roadshow posted on Netroadshow

II-1

 

 

SCHEDULE III

Material Agreements

	1.	 	Tribal-State Compact dated October 8, 1999, between the Tribe and the State of California,
approved by the Secretary of the Interior on May 5, 2000 and effective as of May 16, 2000 by
publication in the Federal Register, as amended from time to time.
	 
	2.	 	First Amended and Restated Memorandum of Agreement Regarding Gaming Development and
Management Agreement dated October 13, 2003, between the Tribe and the Manager, as amended.
	 
	3.	 	Revised Agreement for Professional Services dated November 22, 2006, between the Authority
and Cuningham Group Architecture, P.A.
	 
	4.	 	Contract for Preconstruction and Construction Services dated May 23, 2007, between the
Authority and Rudolph and Sletten, Inc.
	 
	5.	 	Agreement for Engineering Services dated November 1, 2006, between the Tribe and Mark Thomas
& Company, Inc.
	 
	6.	 	Master Construction Agreement dated April 25, 2007, between the Tribe and C.C. Myers, Inc.
	 
	7.	 	Escrow and Disbursement Agreement dated April 24, 2007, among C.C. Myers, Inc., the
Authority, the California Department of Transportation, Wells Fargo Bank, National
Association, and the Collateral Agent.
	 
	8.	 	Intercreditor and Subordination Agreement to be dated as of the date of the Indenture, among
the Trustee, the Collateral Agent, the Authority, the Manager and any lenders of Indebtedness
pursuant to the Indenture.
	 
	9.	 	Lakes Dominion Account Agreement to be dated as of the date of the Indenture, among the
Manager, the Authority and the depository for the dominion account.
	 
	10.	 	Security Agreement dated October 13, 2003, between the Tribe and the Manager.
	 
	11.	 	Security Agreement Acknowledgement to be dated as of the date of the Indenture, between the
Authority and the Manager.
	 
	12.	 	Contract for Construction dated May 23, 2007, between the Authority and Auburn Constructors,
Inc.
	 
	13.	 	Amended Highway Development Encroachment Agreement dated July 3, 2003, among the Tribe, the
United States, through the Bureau of Indian Affairs of the Department of the Interior and the
State of California, through the California Department of Transportation.

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	14.	 	Memorandum of Understanding and Intergovernmental Agreement dated September 28, 2006, between
the Tribe and El Dorado County.
	 
	15.	 	Interim Promissory Note dated January 23, 2007, executed by the Tribe in favor of the
Manager, as amended and in effect on the date of the Indenture.
	 
	16.	 	Amended and Restated Land Acquisition Note dated January 23, 2007, executed by the Tribe in
favor of the Manager, as amended.
	 
	17.	 	Operating Note dated October 13, 2003, executed by the Tribe in favor of the Manager, as in
effect on the date of the Indenture.
	 
	18.	 	Assignment and Assumption Agreement dated April 20, 2007, among the Tribe, the Authority and
the Manager.
	 
	19.	 	Tribal Agreement dated April 20, 2007, between the Tribe and the Manager.
	 
	20.	 	Blocked Account Control Agreement to be dated as of the date of the Indenture, between the
Authority, the Collateral Agent and U.S. Bank, National Association.
	 
	21.	 	Payment and Completion Guaranty dated May 23, 2007, executed by Perini Corporation in favor
of the Authority.
	 
	22.	 	Owner Representation Agreement dated May 21, 2007, between the Authority and Cumming
Corporation.
	 
	23.	 	Agreement for Engineering Services dated February 1, 2007, between the Tribe and Applied
Engineering and Geology, Inc.
	 
	24.	 	Agreement for Engineering Services dated November 1, 2006, between the Tribe and HydroScience
Engineers, Inc.
	 
	25.	 	Agreement for Engineering Services dated April 12, 2007, between the Tribe and HydroScience
Engineers, Inc.
	 
	26.	 	Agreement for Engineering Services dated May 22, 2007, between the Tribe and HydroScience
Engineers, Inc.
	 
	27.	 	Agreement for Engineering Services dated November 1, 2006, between the Tribe and Gene E.
Thorne & Associates, Inc.
	 
	28.	 	Independent Construction Consultant’s Engagement Letter dated June 20, 2007, among Morgan
Stanley & Co. Incorporated, the Trustee, the Disbursement Agent, the Authority and Rider Hunt
Levett & Bailey LTD.
	 
	29.	 	Proposal to Provide Materials Testing dated May 29, 2007, between the Authority and
Consolidated Engineering Laboratories.

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EXHIBIT A

FORM OF OPINION OF FAEGRE & BENSON LLP

     1. The Tribe is a federally recognized Indian tribe organized and existing under its Articles
of Association defined in Exhibit D hereto.

     2. The Issuer validly exists as a wholly owned governmental authority of the Tribe under the
Authority Ordinance defined in Exhibit D hereto.

     3. The Issuer has duly taken all necessary action under the Authority Ordinance and other
Specified Tribal Laws to authorize the making and consummation of the offering of the Notes by the
Issuer and the execution, delivery and performance by the Issuer of the Transaction Documents to
which it is a party. For purposes hereof, the term “Specified Tribal Laws” means the
Articles of Association and any ordinances of the Tribe or resolutions of the Tribal Council
(defined below) or the Management Board (defined below) listed on Exhibit D hereto.

     4. The Tribe has duly taken all necessary action under its Articles of Association and other
Specified Tribal Laws to authorize the execution, delivery and performance by the Tribe of the
Transaction Documents to which it is a party.

     5. The Issuer is governed by its management board referred to in the Authority Ordinance (the
“Management Board”), and all members of the Management Board are validly serving. The
Management Board has the power to authorize officers of the Issuer to bind the Issuer and enter
into the Transaction Documents to which it is a party and are signed by the Chairman of the Tribe
referred to in the Articles of Association. The officer or officers of the Issuer who have
approved and executed the Transaction Documents to which the Issuer is a party possess authority to
execute the Transaction Documents to which the Issuer is a party on behalf of the Issuer and to
bind the Issuer thereto.

     6. The Tribal Council of the Tribe referred to in the Articles of Association (the “Tribal
Council”) is the governing body of the Tribe. The Tribal Council has the power to authorize
officers of the Tribe to bind the Tribe and enter into the Transaction Documents to which it is a
party and are signed by the Chairman of the Tribe referred to in the Articles of Association. The
officer or officers of the Tribe who have approved and executed the Transaction Documents to which
the Tribe is a party possess authority to execute the Transaction Documents to which the Tribe is a
party on behalf of the Tribe and to bind the Tribe thereto.

A-1

 

 

     7. Each of the Transaction Documents to which the Issuer is a party, except the Notes, has
been duly authorized, executed and delivered by the Issuer. Each Transaction Document (except the
Highway Escrow Agreement, which by its terms is governed by California law) to which the Issue is a
party constitutes a valid and binding agreement of, the Issuer, enforceable against the Issuer in
accordance with its terms.

     8. Each of the Lakes Documents has been duly authorized, executed and delivered by the Tribe
and the Issuer, as applicable. While the Lakes Documents are by their terms governed by the law of
a jurisdiction other than the State of New York or the State of Minnesota, and we therefore do not
opine that such documents are enforceable against the Tribe or the Issuer, we are of the opinion
that the Lakes Documents do not conflict in any material respect with applicable laws of the United
States or Specified Tribal Laws. No further consent, approval or authorization of the Lakes
Documents is required by the National Indian Gaming Commission, the Department of the Interior or
any other federal governmental or regulatory authority.

     9. Each of the Transaction Documents to which the Tribe is a party has been duly authorized,
executed and delivered by the Tribe. Each of the Transaction Documents (except the Highway Escrow
Agreement, which by its terms is governed by California law) to which the Tribe is a party
constitutes a valid and binding agreement of, the Tribe, enforceable against the Tribe in
accordance with its terms.

     10. The Compact between the Tribe and the State of California providing for the conduct of
class III gaming (as that term is defined in IGRA) by the Tribe made and entered into as of
September 23, 1999 (the “Compact”) has been duly authorized, executed and delivered by the
Tribe. In compliance with the requirements of the Indian Gaming Regulatory Act of 1988, as amended
(“IGRA”), the Compact has been approved by the Secretary of the Interior of the United
States, and a notice of such approval has been published in the Federal Register, and assuming the
Compact has been validly authorized, executed and delivered under the laws of California, the
Compact is effective under IGRA.

     11. The Tribe’s Shingle Springs Gaming Ordinance (the “Gaming Ordinance”) was validly
adopted by Resolution 96-4 of the Tribal Council, approved by the National Indian Gaming Commission
(the “NIGC”) in accordance with IGRA, and is in full force and effect as a law of the
Tribe, and permits class II gaming (as that term is defined in IGRA) and class III gaming to be
conducted by the Issuer and the Tribe.

     12. The site on which the casino portion of the Project is to be located constitutes “Indian
lands” situated on the Tribe’s reservation within the meaning

A-2

 

 

of 25 U.S.C. § 2703(4), and is eligible for the conduct of class II gaming and class III
gaming.

     13. There is no requirement under the Specified Tribal Laws or the Compact that any holder of
the Notes who is (a) a federally or state regulated bank, savings and loan, or other federally- or
state-regulated lending institution, (b) an agency of the federal, state or local government, (c)
an investor in the Notes who, alone or in conjunction with others, holds less than 10% of all other
outstanding indebtedness evidenced by the Notes or other debt securities of the Issuer, or (d) a
securities dealer acting in compliance with Section 3(h)(ii) of the Financial Source Regulation
(defined below), solely in its capacity as a holder of Notes, apply for or receive any individual
license, any individual certificate, or any other individual authorization from any federal, state,
or tribal governmental authority, to acquire or retain the rights of a holder of Notes under the
Indenture. The Shingle Springs Tribal Gaming Commission (the “Tribal Gaming Commission”)
has validly adopted the “Financial Source Licensing Regulation” pursuant to Resolution GC 2007-1 of
the Tribal Gaming Commission on June 11, 2007, providing for licensing procedures and exemptions
from licensing of certain qualified holders of the Notes, and the Tribal Gaming Commission has
taken all necessary actions to license Morgan Stanley & Co. Incorporated and exempt from licensing
any holder of the Notes described in clauses (a), (b) (c), or (d) of the previous sentence.

     14. The Issuer has the requisite power and authority to own and operate the Business (as
defined in the Indenture), to conduct the Business as described in the Final Memorandum and to
enter into and perform its obligations under the Transaction Documents to which it is a party.

     15. The Security Agreement (as defined in Exhibit A) is effective to create a valid security
interest in the Issuer’s right, title and interest in the Collateral (as defined in the Security
Agreement) in favor of the Collateral Agent.

     16. Upon the acceptance of the Uniform Commercial Code financing statements attached hereto as
Exhibit E by the Secretary of State of California and the Recorder of Deeds of the District of
Columbia, the security interest in favor of the Collateral Agent in the Collateral (as defined in
the Security Agreement) that consists of accounts (other than accounts described in Section
9-102(a)(6)(B) of the Uniform Commercial Code), general intangibles, goods, chattel paper,
negotiable documents, investment property and instruments will be perfected.

     17. The provisions of the Disbursement Agreement (as defined in Exhibit A) are effective to
perfect a security interest in the Issuer’s rights in each of the Construction Disbursement
Account, the Interest Reserve Account and the Litigation Account (as defined in the Disbursement
Agreement) in favor of the Collateral Agent.

A-3

 

 

     18. The provisions of the Notes Dominion Account Agreement (as defined in Exhibit A) are
effective to perfect a security interest in the Issuer’s rights in the Dominion Account (as defined
in the Notes Dominion Account Agreement) in favor of the Collateral Agent. The provisions of the
Control Agreement (as defined in Exhibit A) are effective to perfect a security interest in the
Issuer’s rights in the Deposit Account (as defined in the Control Agreement) in favor of the
Collateral Agent.

     19. The Notes are in the form contemplated by the Indenture. The Notes have been duly
authorized by the Issuer for issuance and sale pursuant to the Purchase Agreement and the Indenture
and, when executed by the Issuer and authenticated by the Trustee in the manner provided in the
Indenture and delivered against payment of the purchase price therefor, will constitute valid and
binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms.

     20. The Transaction Documents conform in all material respects to the descriptions thereof
contained in the Final Memorandum.

     21. The waivers by each of the Issuer and the Tribe of sovereign immunity from unconsented
suit, arbitration or other legal proceedings contained in any of the Transaction Documents to which
it is a party are in compliance in all material respects with applicable laws of the United States
and Specified Tribal Laws, are irrevocable and constitute valid, binding and enforceable
obligations of the Issuer or the Tribe, as applicable. The consents of each of the Issuer and the
Tribe to personal jurisdiction of the courts and arbitration forums contained in any of the
Transaction Documents to which it is a party are in compliance in all material respects with
applicable laws of the United States and Specified Tribal Laws and constitute valid, binding and
enforceable obligations of the Issuer or the Tribe, as applicable; provided that we express no
opinion as to whether a case would proceed in such courts or forums or would be required to proceed
in the Tribal Courts of the Tribe as described in the Final Memorandum under the heading “Disputes
relating to the notes may be required to be heard in our Tribal court system”. The Courts of the
State of New York would have personal and subject matter jurisdiction over any action against
either the Issuer or the Tribe to enforce the Transaction Documents to which it is a party.

     22. Based on Section 5-1401 of the General Obligations Law of the State of New York
(“§5-1401”), a New York Court or a federal court sitting in New York as the forum state and
applying New York conflict of law rules should give effect to the designation by the parties of the
laws of the State of New York as the governing law with respect to each of the Transaction
Documents (except the Notes Dominion Account Agreement, which by its terms is governed by
California law), except (i) as otherwise provided in Section 1-105 (2) of the Uniform Commercial
Code as in effect in the State of New York, (ii) that no

A-4

 

 

opinion is rendered as to whether any such court would give effect to such designation if it
were to determine that the result obtained from applying the laws of the State of New York would be
contrary to a fundamental policy of a more interested jurisdiction and (iii) that the ability of
any such court to give effect to such designation as required by §5-1401 may be limited by the full
faith and credit clause and the due process clause of the United States Constitution and the
doctrine of comity.

     23. The Tribe and the Issuer are hereinafter referred to collectively as the “Shingle
Springs Parties,” and individually as a “Shingle Springs Party.” No consent, approval,
authorization or other order of, or registration or filing with, any court or other governmental or
regulatory authority or agency of the United States or the Tribe, including the Secretary of the
Interior or the Chairman of the NIGC, or pursuant to the Compact is required for any Shingle
Springs Party’s execution, delivery and performance of the Transaction Documents to which it is a
party, or the issuance and delivery of the Notes by the Issuer, or the enforceability of any of the
foregoing, except (i) such as have been obtained or made by the applicable Shingle Springs Party
and are in full force and effect, (ii) required filings of UCC financing statements in the offices
described in paragraph 16, and (iii) those consents, approvals, authorizations and orders of a type
customarily obtained subsequent to the commencement of construction, and except for state
securities or blue sky laws, and except that court filings and orders may be required in order to
enforce any of the Transaction Documents.

     24. The execution and delivery by each of the Shingle Springs Parties of the Transaction
Documents to which it is a party and the performance of its obligations thereunder will not result
in any violation of the provisions of the Articles of Association. The execution and delivery by
each of the Shingle Springs Parties of the Transaction Documents to which it is a party and the
performance of its obligations thereunder (i) will not result in any violation of the provisions
any Specified Tribal Laws (other than the Articles of Association); (ii) will not constitute a
breach of, or default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Issuer under, any Applicable Contract; (iii) will
not result in any violation of any Applicable Order that names either of the Shingle Springs
Parties and is specifically directed to either Shingle Springs Party or its property and (iv) will
not result in any violation of any law of the United States. We do not express any opinion,
however, as to whether the execution and delivery by each of the Shingle Springs Parties of the
Transaction Documents to which it is a party and the performance of its obligations thereunder will
constitute a breach of, or default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Issuer under, any Applicable Contract with
respect to any accounting or financial ratios, tests or terms or any aspect of the financial
condition or results of operations of the Shingle Springs Parties. For

A-5

 

 

purposes hereof, the term “Applicable Contracts” means those agreements or instruments
identified on Exhibit F hereto and the term “Applicable Orders” means those judgments,
orders or decrees identified on Annex A to each of the Issuer’s Certificate and the Tribe’s
Certificate.

     25. The Issuer is not, and immediately after receipt of payment for the Notes and application
of the proceeds thereof as described in the Final Memorandum under the caption “Use of Proceeds”
will not be, required to register as an investment company under the Investment Company Act of
1940.

     26. Assuming the accuracy of the representations, warranties and covenants of the Shingle
Springs Parties, the Manager and the Initial Purchasers contained in the Purchase Agreement, no
registration of the Notes under the Securities Act, and no qualification of an indenture under the
Trust Indenture Act with respect thereto, is required in connection with the purchase of the Notes
by the Initial Purchasers or the initial resale of the Notes by the Initial Purchasers in the
manner contemplated by the Purchase Agreement and the Final Memorandum; provided that no opinion is
expressed as to when or under what circumstances any Notes initially sold by the Initial Purchaser
may be reoffered or resold.

     27. Pursuant to authority provided in the Articles of Association the Tribal Council has
enacted the Shingle Springs Tribal Court Ordinance establishing a Tribal Court and a three-judge
appellate panel (together, the “Tribal Courts”), which constitute the judicial branch of the Tribe.
The Tribal Courts have not adopted rules of civil or appellate procedure nor rules of judicial
conduct applicable to proceedings before the Tribal Courts.

     28. None of the Transaction Documents, taken individually or collectively, constitutes a
“management contract” requiring approval within the meaning of 25 U.S.C. § 2711, as defined in 25
C.F.R. § 502.15 or deprives the Tribe of the “sole proprietary interest and responsibility” for the
conduct of the gaming activity of the Gaming Business within the meaning of IGRA.

     29. Pursuant to New York General Obligations Law Section 5-501-6.b., no law regulating the
maximum rate of interest which may be charged, taken or received, including Section 190.40 and
Section 190.42 of the New York Penal Law, shall apply to any loan or forbearance in the amount of
two million five hundred thousand dollars or more.

     30. We have reviewed the statements in the Final Memorandum under the captions “Certain
Relationships and Related Transactions,” “Description of Material Agreements,” “Descriptions of
Other Indebtedness,” “Description of the Notes,” “Government Regulation,” and “Certain United
States Federal Income and Estate Tax Considerations.” Insofar as such statements relate to matters
of

A-6

 

 

law or purport to be summaries of legal matters, legal proceedings or certain provisions of
agreements, such statements fairly present and summarize, in all material respects, the matters
referred to therein.

     We have participated in conferences with officers and other representatives of the Tribal
Parties and the Manager, representatives of the independent public or certified public accountants
for the Tribal Parties and the Manager and with representatives of the Initial Purchaser at which
the contents of the Time of Sale Memorandum and the Final Memorandum and related matters were
discussed and, although in this letter we are not passing upon and do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the Time of Sale
Memorandum or the Final Memorandum, on the basis of the foregoing, nothing has come to our
attention which would lead us to believe that the Time of Sale Memorandum, as of the time the
Purchase Agreement was executed, or that the Final Memorandum, as of its date or at the date
hereof, contained or contains an untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading (it being understood that we express no belief as to the
financial statements or other financial or accounting information included in the Time of Sale
Memorandum or the Final Memorandum or any amendments or supplements thereto).

A-7

 

 

EXHIBIT B

FORM OF OPINION OF KARSHMER & ASSOCIATES

     1. Each of the California Law Transaction Documents to which the Tribe or the Issuer is a
party (i) has been duly authorized, executed and delivered by such party, (ii) does not conflict
with any law or administrative regulation of the State of California, and (iii) is the valid and
legally binding obligation of each such party, enforceable against such party in accordance with
its respective terms.

     2. Each of the California Law Material Agreements to which the Tribe or the Issuer is a party
(i) has been duly authorized, executed and delivered by such party, (ii) does not conflict with any
law or administrative regulation of the State of California, and (iii) is the valid and legally
binding obligation of such party, enforceable against such party in accordance with its respective
terms.

     3. To the extent governed by the California UCC, if applicable, the provisions of the Security
Agreement of even date herewith securing the Securities (the Security Agreement) are effective to
create a valid security interest in the Authoritys rights to the Collateral (as defined in the
Security Agreement) in favor of the Collateral Agent (as defined in the Security Agreement), for
the benefit of the Initial Purchasers and the Subsequent Purchasers, to secure the Secured
Obligations (as defined in the Security Agreement).

     4. The California financing statements are in proper form for filing with the California
Secretary of State.

     5. Under the California UCC, if applicable, the security interest of the Collateral Agent (as
defined in the Security Agreement) in all Collateral (as defined in the Security Agreement) as to
which a security interest may be perfected by filing a financing statement will be perfected upon
the later of the attachment of the security interest or the filing of a financing statement in the
office of the California Secretary of State, as the case may be.

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EXHIBIT C

FORM OF OPINION OF GRAY, PLANT, MOOTY, MOOTY & BENNETT

     1. The Manager is a limited liability company duly formed, validly existing, and in good
standing under the laws of the State of Delaware.

     2. The Manager has all requisite limited liability company power to own, lease and operate its
properties and to conduct its business as described in the Time of Sale Memorandum and the Final
Memorandum, to execute and deliver the Manager Transaction Documents, and to consummate the
transactions contemplated by the Manager Transaction Documents.

     3. The Manager has taken all necessary limited liability company action to authorize the
execution, delivery, and performance by the Manager of the Manager Transaction Documents and Lakes
Documents, and each of the Manager Transaction Documents and Lakes Documents has been duly
authorized, executed and delivered by the Manager.

     4. Each Manager Transaction Document constitutes the legal, valid, binding, and enforceable
obligation of the Manager.

     5. No authorization or approval or other action by, and no notice or filing with, any
governmental authority or other regulatory body is required in connection with the due execution,
delivery and performance by the Manager of the Manager Transaction Documents.

     6. The execution and delivery of the Manager Transaction Documents do not, and the performance
by the Manager of its obligations thereunder will not, (a) contravene the Manager Governing
Documents, (b) constitute a breach of, or default under, any applicable Manager Material Agreement
or result in the creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Manager, or (c) result in any violation of any applicable state or federal law or
regulation applicable to the Manager.

     In addition, attorneys with this firm have participated in conferences with officers and other
representatives of the Tribal Parties and the Manager, representatives of McGladrey & Pullen LLP,
the independent public or certified public accountants for the Authority, and with representatives
of the Initial Purchasers at which the contents of the Time of Sale Memorandum and the Final
Memorandum and other related matters were discussed. Although we are not

C-1

 

 

passing upon and have not independently checked or verified the accuracy, completeness or
fairness of the statements contained in the Time of Sale Memorandum or the Final Memorandum, we
advise you that the attorneys with this firm that participated in such conferences have no reason
to believe that anything that they have reviewed in the Time of Sale Memorandum, as of the date of
the Purchase Agreement or as of the date hereof, and the Final Memorandum, as of its date or as of
the date hereof (except as to the financial statements, including the notes thereto and related
schedules and other financial information and data included therein or omitted therefrom as to
which we are not called upon to and do not express any opinion), contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they were made, not
misleading.

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EXHIBIT D

FORM OF OPINION OF HAMILTON QUIGLEY & TWAIT, PLC

     1. The statements in the Final Memorandum under the captions “Risk Factors – Risks
related to the Indian Gaming Industry,” “Description of Other Indebtedness,” “Certain Relationships
and Related Transactions” and “Description of Material Agreements,” insofar as such statements
constitute summaries of documents, have been reviewed by us as special counsel with respect to
Indian/gaming laws and regulations and fairly present and summarize, in all material respects, the
matters referred to therein.

     2. No authorization or approval or other action by, and no notice or filing with, any
governmental authority or other regulatory body is required with respect to Indian/gaming laws and
regulations in connection with the due execution, delivery and performance by the Manager of the
Manager Transaction Documents.

     3. The execution and delivery of the Manager Transaction Documents do not, and the
performance by the Manager of its obligations thereunder will not, (a) constitute a breach of, or
default under, any applicable Material Manager Agreements or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the Manager, or (b) result in any
violation of any Indian/gaming laws and regulations applicable to the Manager.

     4. The Development and Management Agreement, as amended, listed on Schedule I
constitutes a valid and binding agreement of the Manager, enforceable in accordance with its terms.
With respect to this opinion, we note that a management contract for tribal gaming, such as the
Development and Management Agreement, must be approved by the Chairman of the NIGC to be valid, and
that the Development and Management Agreement has been so approved; however, under published
regulations of the NIGC if the Chairman of the NIGC learns of any action or condition that violates
the standards contained in certain of the NIGC’s regulations, the Chairman may require
modifications of, or may void, a management contract previously approved by the Chairman, after
providing the parties an opportunity for a hearing.

     5. Appropriate federal, state and tribal regulatory agencies have determined that the Manager
is suitable under applicable federal and tribal law, including IGRA, the Compact and the Gaming
Ordinance, to have a financial interest in, or have management responsibility for, the Development
and Management Agreement.

     In addition, attorneys with this firm have participated in conferences with officers and other
representatives of the Tribal Parties and the Manager, representatives of McGladrey & Pullen LLP,
the independent public or certified public accountants for the Authority, and with representatives
of the Initial

D-1

 

 

Purchasers at which the contents of the Time of Sale Memorandum and the Final Memorandum and other
related matters were discussed. Although we are not passing upon and have not independently
checked or verified the accuracy, completeness or fairness of the statements contained in the Time
of Sale Memorandum or the Final Memorandum (other than as specified above), we advise you that the
attorneys with this firm that participated in such conferences have no reason to believe that
anything that they have reviewed in the Time of Sale Memorandum, as of the date of the Purchase
Agreement or as of the date hereof, and the Final Memorandum as of its date or as of the date
hereof (except as to the financial statements, including the notes thereto and related schedules
and other financial information and data included therein or omitted therefrom as to which we are
not called upon to and do not express any opinion), contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading.

D-2exv10w2

 

Exhibit 10.2

NOTES DOMINION ACCOUNT AGREEMENT

     THIS DOMINION ACCOUNT AGREEMENT (the “Agreement”), dated as of June 28, 2007 (the
“Effective Date”), among the SHINGLE SPRINGS TRIBAL GAMING AUTHORITY (the
“Authority”), LAKES KAR-SHINGLE SPRINGS, LLC, a Delaware limited liability company
(“Manager”), THE BANK OF NEW YORK TRUST COMPANY, N.A., as collateral agent (in such
capacity, the “Collateral Agent”) for the First Lien Secured Parties (defined below) and
trustee for the Senior Notes (defined below) under the Indenture (defined below), and 
WELLS FARGO BANK, N.A. (the “Bank”).

W I T N E S S E T H:

     WHEREAS, the Authority is a wholly-owned unincorporated instrumentality of the Shingle Springs
Band of Miwok Indians (“Tribe”), a federally recognized Indian tribe;

     WHEREAS, the Tribe has the inherent power to conduct and regulate gaming on its lands, subject
only to the restrictions imposed by the Indian Gaming Regulatory Act of 1988, Public Law 100-497,
25 U.S.C. § 2701 et. seq. (as such may from time to time be amended, “IGRA”);

     WHEREAS, in accordance with IGRA, the Tribe has entered into the Tribal-State Compact for the
conduct of Class III Gaming within the State of California;

     WHEREAS, the Tribe, acting through the Authority, proposes to develop, construct and operate,
a full service gaming and entertainment facility to be commonly known as the Foothill Oaks Casino
and certain related amenities located in El Dorado County, California;

     WHEREAS, the Tribe and Manager entered into a First Amended and Restated Memorandum of
Agreement Regarding Gaming Development and Management Agreement dated as of October 13, 2003 (as
amended by an Amendment dated June 16, 2004, a Second Amendment dated January 23, 2007, and a Third
Amendment dated as of May 17, 2007, and as further amended from time to time, and as subject to the
Assignment and Assumption Agreement referred to below, the “Development and Management
Agreement”);

     WHEREAS, pursuant to the Development and Management Agreement, (a) the Manager has made and
agreed to make certain loans in connection with the development, construction and equipping of the
Facility (defined below) and certain related amenities, and (b) the Manager has agreed to manage
the Facility and certain related amenities as more specifically set forth therein;

     WHEREAS, pursuant to an Assignment and Assumption Agreement dated as of April 20, 2007 (the
“Assignment and Assumption Agreement”), the Tribe assigned, and the Authority assumed, the
rights and obligations of the Tribe under the Development and Management Agreement, the Interim
Promissory Note, the Operating Note and other Transaction Documents (each as defined in the
Development and Management Agreement);

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     WHEREAS, concurrently herewith, the Authority is issuing $450,000,000 aggregate principal
amount of its 9 3/8% Senior Notes due 2015 (together with all other notes issued under the
Indenture, and including all notes issued in exchange or replacement thereof, the “Senior
Notes”), pursuant to that certain Indenture dated as of June 28, 2007 (as in effect on the date
hereof, the “Indenture”) between the Authority and the Trustee (defined below), to finance
costs to be incurred in connection with the acquisition, financing, design, development,
construction, equipping and opening of the Facility;

     WHEREAS, concurrently herewith, the trustee under the Indenture (the “Trustee”), the
Collateral Agent and the Manager have entered into the Intercreditor and Subordination Agreement
(defined below) to (a) appoint the Collateral Agent as the agent for the Trustee for purposes of
entering into the security documents and to receive, maintain, administer, enforce and distribute
certain collateral shared by the Trustee and the Manager as provided in the Intercreditor and
Subordination Agreement, (b) set forth certain provisions relating to the respective rights in such
collateral, the exercise of remedies upon the occurrence of an event of default, the application of
proceeds of enforcement and certain other matters and (c) set forth certain provisions relating to
the subordination of the Manager Obligations (defined below) to the First Lien Secured Obligations
(defined below), and certain other matters with respect thereto; and

     WHEREAS, the Authority, the Manager and the Collateral Agent desire to enter into this
Agreement in order to (a) provide for the receipt, deposit and disbursement of Gross Revenues
(defined below), (b) grant the Collateral Agent, for the benefit of the First Lien Secured Parties,
a first priority security interest in such Gross Revenues and certain related collateral and
proceeds thereof, (c) grant the Manager a second priority security interest in such Gross Revenues
that constitute Enterprise Revenues (defined below) and certain related collateral and proceeds
thereof (subject to subordination as provided herein and subordination of the Manager Obligations
to the First Lien Secured Obligations pursuant to the Intercreditor and Subordination Agreement),
and (d) implement the terms of the Intercreditor and Subordination Agreement, each for the purposes
and in accordance with the terms set forth herein.

     NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto do hereby agree as follows:

ARTICLE 1

DEFINITIONS

     Section 1.1 Unless the context otherwise requires, capitalized terms which are not defined
herein shall have the meaning ascribed to them in the Development and Management Agreement as in
effect on the date hereof.

     Section 1.2 Defined Terms. The following terms when used herein shall have the
following meanings:

2

 

     “Agreement” shall have the meaning set forth in the preamble.

     “Assignment and Assumption Agreement” shall have the meaning set forth in the
recitals.

     “Authority” shall have the meaning set forth in the preamble.

     “Bank” shall have the meaning set forth in the preamble.

     “Bank Fees” shall mean the Bank’s customary fees and charges for the maintenance and
administration of the Dominion Account and for treasury management and other account services
provided with respect to the Dominion Account.

     “Business Day” shall mean a day other than (i) a Saturday or Sunday and (ii) any day
on which banks located in the State of California are required or authorized by law to remain
closed.

     “Cash Collateral and Disbursement Agreement” shall mean the Cash Collateral and
Disbursement Agreement, dated as of June 28, 2007, among the Authority, the Manager, the Trustee,
the Collateral Agent, The Bank of New York Trust Company, N.A., as disbursement agent, Rider Levett
Bucknall Ltd., and the other parties thereto.

     “Cash Equivalents” shall have the meaning assigned to such term in the Indenture.

     “Class II Gaming” shall mean Class II Gaming as defined in IGRA.

     “Class III Gaming” shall mean Class III Gaming as defined in IGRA.

     “Collateral” shall mean the Gross Revenues, the Dominion Account and the cash and/or
cash equivalents and other investment property deposited or credited thereto from time to time and
sweep investments from time to time made with funds on deposit therein, each whether now or
hereafter owned, existing, arising or acquired, including but not limited to the Enterprise
Collateral, and including any proceeds of the foregoing.

     “Collateral Agent” shall have the meaning set forth in the preamble.

     “Collateral Agent Deposit Account” shall have the meaning set forth in Section
3.4(a).

     “Collateral Agent Notice of Exclusive Control” shall have the meaning set forth in
Section 2.1(a).

     “Costs of Gaming Operations” shall mean all expenses for the operation of Class II
Gaming and Class III Gaming activities pursuant to Generally Accepted Accounting Principles.

     “Costs of Incidental Operations” shall mean all expenses pursuant to Generally
Accepted Accounting Principles incurred in operating the hotel, restaurants, food and beverage
service, office space, swimming pool, fitness center, childcare, kids arcade, golf course and other

3

 

commercial business areas comprising the Facility in which neither Class II Gaming nor Class III
Gaming is conducted.

     “Deposit Account Orders” shall mean with respect to the Dominion Account, any
instruction directing the disposition of any funds in the Dominion Account.

     “Development and Management Agreement” shall have the meaning set forth in the
recitals.

     “Discharge” shall have the meaning assigned to such term in the Intercreditor and
Subordination Agreement.

     “Dominion Account” shall mean, collectively, that certain Account No. 4121561039 owned
and maintained by the Authority with the Bank formed by and subject to the terms of this Agreement
(including without limitation any sub-accounts within such account), together with any replacement
accounts with the Bank related to such account.

     “Effective Date” shall have the meaning set forth in the preamble.

     “Enterprise” shall mean the business of the Authority to be commonly known as the
Foothill Oaks Casino which will conduct Class II Gaming and Class III Gaming at the Facility, and
which shall include any other lawful commercial activity allowed in or near the Facility including,
but not limited to, operating and managing office space, kids arcade, child care facility, hotel
with swimming pool and golf course, restaurant, RV park, retail stores, entertainment facilities,
or the sale of fuel, food, beverages, alcohol, tobacco, gifts, and souvenirs. “Enterprise” shall
include, without limitation, the Facility.

     “Enterprise Collateral” shall mean the Enterprise Revenues, the Dominion Account and
the cash and/or cash equivalents and other investment property deposited or credited thereto with
respect to the Enterprise Revenues from time to time and sweep investments from time to time made
with funds on deposit therein with respect to the Enterprise Revenues, each whether now or
hereafter owned, existing, arising or acquired, and including any proceeds of the foregoing.

     “Enterprise Revenues” shall mean the Gross Revenues of the Enterprise, including
without limitation credit card receivables and other accounts related to the Enterprise.

     “Facility” shall mean the permanent buildings, structures and improvements used by the
Enterprise for its gaming and incidental operations located on the Gaming Site.

     “Financing Statements” shall have the meaning set forth in Section 2.1(c).

     “First Lien Secured Obligations” shall have the meaning assigned to such term in the
Intercreditor and Subordination Agreement.

     “First Lien Secured Obligations Event of Default” shall have the meaning set forth in
Section 5.1(b).

4

 

     “First Lien Secured Obligations Event of Default Period” shall mean the period
commencing as soon as practicable upon physical receipt by the Bank of a Collateral Agent Notice of
Exclusive Control, but in no event later than the second (2nd) Business Day following
such receipt, and ending on the date that the Bank receives written instruction from the
Collateral Agent that the First Lien Secured Obligations Event of Default set forth in such the
Collateral Agent Notice of Exclusive Control has been cured or otherwise waived. The Collateral
Agent may only give a Collateral Agent Notice of Exclusive Control following the occurrence and
during the continuance of such a First Lien Secured Obligations Event of Default, and the
Collateral Agent will give the Bank such a written instruction of cure or waiver promptly following
any such cure or waiver unless (a) any First Lien Secured Obligation has been accelerated and (b)
such cure or waiver does not reinstate such First Lien Secured Obligations so that they are no
longer accelerated.

     “First Lien Secured Parties” shall have the meaning assigned to such term in the
Intercreditor and Subordination Agreement.

     “Gaming Site” shall mean the Tribal Lands located in El Dorado County, California,
used as the site for operating and constructing the Facility and the Enterprise.

     “Gross Gaming Revenues” shall mean the Authority’s total revenue from gaming
operations (excluding any insurance proceeds received other than business interruption insurance
proceeds and insurance proceeds received to reimburse the Authority for any claims included, or to
be included, as Costs of Gaming Operations).

     “Gross Incidental Revenues” shall mean the Authority’s total receipts from operating
the hotel, restaurants, food and beverage service, office space, swimming pool, fitness center,
childcare, kids arcade, golf course and other commercial business areas comprising the Facility in
which the Authority conducts neither Class II Gaming nor Class III Gaming, including without
limitation any sales, hotel, use or other pass-through taxes collected on patrons which are to be
consistent with those collected from patrons of other similar businesses in El Dorado County (but
excluding any insurance proceeds received other than business interruption insurance proceeds and
insurance proceeds received to reimburse the Authority for any claims included, or to be included,
as Costs of Incidental Operations) .

     “Gross Revenues” shall mean the total of Gross Gaming Revenues and Gross
Incidental Revenues of the Authority (including, without limitation, the Enterprise Revenues). It
is understood and agreed that all net proceeds of asset sales and insurance and condemnation events
(comprising Net Proceeds and Net Loss Proceeds, each as defined in the Indenture) shall be
deposited into an account pledged to the Collateral Agent for the benefit of the First Lien Secured
Parties.

     “IGRA” shall have the meaning set forth in the recitals.

     “Indenture” shall have the meaning set forth in the recitals.

5

 

     “Intercreditor and Subordination Agreement” shall mean the Intercreditor and
Subordination Agreement among the Collateral Agent, the Trustee and the Manager dated as of June
28, 2007.

     “Linked Account” shall mean any controlled disbursement account or other deposit
account at any time linked to the Dominion Account by a zero balance account connection.

     “Manager” shall have the meaning set forth in the preamble.

     “Manager Event of Default” shall have the meaning set forth in Section 5.1(a).

     “Manager Notice of Exclusive Control” shall have the meaning set forth in Section
3.3(a).

     “Manager Obligations” shall mean all loans, compensation, fees, expenses and other
amounts owing by the Authority or the Tribe to the Manager under or with respect to the Development
and Management Agreement or the Interim Promissory Note, the Operating Note or any other
Transaction Document or the Transition Loan (as each of such terms are defined in the Development
and Management Agreement), including without limitation the Manager’s compensation pursuant to the
Development and Management Agreement, together with any other Lakes Secured Obligations (as defined
in the Intercreditor and Subordination Agreement) and any costs, expenses or other amounts
hereafter owing by the Tribe or the Authority to the Bank or the Manager pursuant to the terms of
this Agreement, each of the foregoing, whether now existing or hereafter incurred or arising.

     “Monthly Distribution Payment” shall mean the amount disbursable to the Authority on a
monthly basis from Net Total Revenues (as defined in the Development and Management Agreement)
pursuant to Section 6.5 of the Development and Management Agreement, excluding any payment
required to be made under Section 6.5(a)(i) thereof.

     “Operating Expenses” shall have the meaning assigned to such term in the Indenture.

     “Permitted Accounts” shall mean those security and deposit accounts of the Authority
permitted by the terms of the Indenture and the Cash Collateral and Disbursement Agreement.

     “Person” shall mean any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited liability company,
tribe or government (including any agency, component or political subdivision thereof) or other
entity.

     “Returned Item Amounts” shall mean (i) any item deposited to the Dominion Account and
returned unpaid, whether for insufficient funds or any other reason, and without regard to the
timeliness of such return or the occurrence or timeliness of any drawee’s notice of non-payment,
(ii) any item subject to a claim against the Bank for breach of transfer or presentment warranty
under the Uniform Commercial Code, (iii) any automated clearing house (“ACH”) entry credited to the
Dominion Account and returned unpaid or subject to an adjustment entry under applicable clearing
house rules, whether for insufficient funds or for any other reason, and without regard to

6

 

the
timeliness of such return or adjustment, (iv) any credit to the Dominion Account from a merchant
card transaction, against which a contractual demand for chargeback has been made, and (v) any
credit to the Dominion Account made in error.

     “Senior Notes” shall have the meaning set forth in the recitals.

     “Senior Security Agreement” shall mean the Security Agreement dated as of June 28,
2007 between the Authority and the Collateral Agent.

     “Settlement Item Amounts” shall mean, in each case following the Bank’s receipt of a
Collateral Agent Notice of Exclusive Control, (i) each check or other payment order drawn or
payable against any Linked Account, which the Bank cashes or exchanges for a cashier’s check or
official check over its counters in the ordinary course of business before the Bank has had a
reasonable opportunity to act on such Collateral Agent Notice of Exclusive Control, and which is
thereafter presented for settlement against the Dominion Account (after having been presented
against the Linked Account), (ii) each check or other payment order drawn on or payable against the
Dominion Account that the Bank cashes or exchanges for a cashier’s check or official check over its
counters in the ordinary course of business on the Business Day on which it received such
Collateral Agent Notice of Exclusive Control but after the Bank’s cutoff time for posting on such
Business Day, (iii) each ACH credit entry by the Bank, as the originating depository financial
institution on behalf of the Authority as the originator, which is initiated in the ordinary course
of business before the Bank has had a reasonable opportunity to act on such Collateral Agent Notice
of Exclusive Control, and which is thereafter settled, and (iv) any other payment order drawn on or
payable against the Dominion Account, which the Bank pays or funds before the Bank has had a
reasonable opportunity to act on such Collateral Agent Notice of Exclusive Control and which is
first presented for settlement after the Bank has transferred funds from the Dominion Account to
the Collateral Agent.

     “Transaction Document Event of Default” shall mean any of (i) the insufficiency of any
distribution under Section 6.5 of the Development and Management Agreement to fund or any
other default in the payment of or other failure to pay (A) the Manager’s compensation pursuant to
the Development and Management Agreement, (B) obligations payable under the Interim Promissory Note
or the Operating Note, or (C) any other Manager Obligation payable in accordance with the
provisions of the Transaction Document governing the same, in each case subject to any applicable
grace or cure period, (ii) any other default or Event of Default under or as defined in Development
and Management Agreement or the Interim Promissory Note, the Operating Note or any other
Transaction Document shall occur and continue beyond any applicable grace or cure period, (iii) any
Material Breach (as defined in the Development and Management Agreement) by the Authority or the
Tribe shall occur and continue for thirty (30) calendar days after written notice thereof has been
sent to the Authority by the Manager, or (iv) without limiting the generality of the foregoing
clause (iii), default by the Tribe under or any other material failure by the Tribe to perform in
accordance with the Tribal Agreement shall occur and continue beyond any applicable grace or cure
period.

7

 

     “Tribal Agreement” shall mean the Tribal Agreement dated as of April 20, 2007, between
the Tribe and the Manager, as the same may from time to time be amended.

     “Tribal Lands” shall mean all lands presently and in the future held in trust by the
United States for the Tribe and all lands within the confines of the Shingle Springs Reservation
and such lands as may be hereafter added thereto.

     “Tribal UCC Code” shall mean the Tribe’s Secured Transaction Ordinance.

     “Tribal-State Compact” shall have the meaning assigned to such term in the Development
and Management Agreement.

     “Tribe” shall have the meaning set forth in the recitals.

     “Trustee” shall have the meaning set forth in the recitals.

     “Uniform Commercial Code” shall mean the Uniform Commercial Code as enacted in the
State of New York, as the same may be amended from time to time.

ARTICLE 2

GENERAL COVENANTS

     Section 2.1 Creation of Dominion Account; Control; Perfection.

     (a) Establishment of Account.

          (i) There is hereby created with the Bank the Dominion Account, which shall be in the name of
the Authority and subject to the terms and conditions of this Agreement.

          (ii) The Bank shall deposit into the Dominion Account, as received, each and every amount and
item delivered to the Bank for deposit into the Dominion Account by or on behalf of the Authority.

          (iii) Subject to the following clause (iv) regarding a Collateral Agent Notice of Exclusive
Control, only the Manager shall have the right and authority to make withdrawals from or exercise
any other rights with respect to the Dominion Account (including the right to give Deposit Account
Orders with respect to the Dominion Account), and the Bank will comply with any instructions of the
Manager with respect to the disposition of funds from the Dominion Account without the further
consent of or by the Authority, the Collateral Agent or any other Person (subject to any such
Collateral Agent Notice of Exclusive Control). Notwithstanding the foregoing, if at any time the
Bank receives a notice originated by the Collateral Agent of a First Lien Secured Obligations Event
of Default (a “Collateral Agent Notice of Exclusive Control”), which the Collateral Agent
agrees it may only give following the occurrence and during the continuance of such a First Lien
Secured Obligations Event of Default, then during the continuation of the First Lien Secured
Obligations Event of Default Period commenced by such

8

 

Collateral Agent Notice of Exclusive Control
the Collateral Agent shall have the sole right and authority to make withdrawals from or exercise
any other rights with respect to the Dominion Account (including the right to give Deposit Account
Orders with respect to the Dominion
Account), and the Bank will comply with any instructions of the Collateral Agent with respect to
disposition of the funds from the Dominion Account without the further consent of or by the
Authority, the Manager or any other Person. As used herein, the phrase “instruction with respect
to the disposition of funds from the Dominion Account” or other similar phrase shall include
Deposit Account Orders with respect to the Dominion Account.

          (iv) Prior to the delivery of a Collateral Agent Notice of Exclusive Control or at any time
when a First Lien Secured Obligations Event of Default Period is not otherwise continuing, the
Collateral Agent may not issue instructions directing the disposition of funds from the Dominion
Account. Following the delivery of a Collateral Agent Notice of Exclusive Control and during the
continuation of the First Lien Secured Obligations Event of Default Period commenced by such
Collateral Agent Notice of Exclusive Control, the Manager may not issue instructions directing the
disposition of funds from the Dominion Account. If notwithstanding the foregoing (i) the
Collateral Agent issues instructions directing the disposition of funds from the Dominion Account
prior to the delivery of a Collateral Agent Notice of Exclusive Control or at any time when a First
Lien Secured Obligations Event of Default Period is not otherwise continuing, the Bank will follow
only the instructions with respect to the disposition of funds from the Dominion Account issued by
the Manager whether or not the Collateral Agent’s instructions conflict with any instructions
issued by the Manager, and (ii) the Manager issues instructions directing the disposition of funds
from the Dominion Account following the delivery of a Collateral Agent Notice of Exclusive Control
and during the continuation of the First Lien Secured Obligations Event of Default Period commenced
by such Collateral Agent Notice of Exclusive Control, the Bank will follow the instructions with
respect to the disposition of funds from the Dominion Account issued by the Collateral Agent
whether or not the Manager’s instructions conflict with any instructions issued by the Collateral
Agent.

          (v) The Authority, the Manager and the Collateral Agent each acknowledge and agree that (i)
without limiting the generality of Section 6.4(a), the Bank may rely on any Manager Notice of
Exclusive Control, Collateral Agent Notice of Exclusive Control or other notice with respect to the
Dominion Account contemplated by this Agreement believed by the Bank to be genuine and to have been
signed or presented by the proper party, and the Bank shall have no obligation or duty to determine
(A) whether any event, the occurrence of which is a condition to the giving of such notice, has
occurred, or (B) whether the party giving such notice is otherwise authorized to do so, and (ii)
the Bank shall be fully protected in performing its duties hereunder in good faith as set forth in
this Agreement, including without limitation Sections 6.1, 6.2, 6.3 and 6.4 of this Agreement.

     (b) Agency for Control and Perfection. The Manager and the Collateral Agent agree,
pursuant to Section 5.5 of the Intercreditor and Subordination Agreement, that, solely for
purposes of perfecting the security interests granted pursuant to this Agreement, each shall act as
agent for both the other and itself.

9

 

     (c) Financing Statements/Legal Opinions. The Bank hereby acknowledges the security
interest in the Collateral granted by this Agreement to the Collateral Agent by the Authority and
the security interest in the Enterprise Collateral granted by this Agreement to the
Manager by the Authority. The Authority authorizes, and in addition shall cause to be
delivered to the Collateral Agent and the Manager on the date of execution of this Agreement or
thereafter as the Collateral Agent or the Manager may request, (a) such financing statements and
similar documents necessary to perfect the security interests granted to the Collateral Agent and
the Manager pursuant to this Agreement (the “Financing Statements”), it being understood
that, without limiting the generality of the foregoing, the Authority hereby authorizes, and will
execute and file, such financing statements or continuation statements in respect thereof, or
amendments thereto, and such other instruments or notices, as the Manager or the Collateral Agent
may deem necessary or desirable, or as the Bank, the Manager or the Collateral Agent may reasonably
request, in order to perfect, preserve, and enhance the security interests granted hereby, in each
case without the additional signature or consent of the Authority where permitted by law, (b) a
legal opinion, in form and substance reasonably acceptable to Morgan Stanley & Co. Incorporated, or
after the issuance of the Senior Notes, the Collateral Agent, opining as to the due authorization,
execution, delivery and enforceability of this Agreement and the Financing Statements by the
Authority and the validity and perfection of the security interest granted to the Collateral Agent
hereby, together with opinions as to the Authority’s sovereign immunity waiver and noncontravention
with laws and agreements, and (c) a legal opinion, in form and substance reasonably acceptable to
the Manager, opining as to the due authorization, execution, delivery and enforceability of this
Agreement and the Financing Statements by the Authority and the validity and perfection of the
security interest granted to the Manager hereby, together with opinions as to the Authority’s
sovereign immunity waiver and noncontravention with laws and agreements.

     (d) [Intentionally omitted]

     (e) Dominion Account. The Bank hereby agrees and confirms that it has established the
Dominion Account as set forth and defined in this Agreement. Until this Agreement terminates in
accordance with the terms hereof, the Collateral Agent and the Manager each shall have “control”
(within the meaning of Section 9-104 of the Uniform Commercial Code) of the Dominion Account,
subject to the terms of this Agreement. Each of the Authority and the Bank agrees that it has not
and will not execute and deliver, or otherwise become bound by, any agreement under which it agrees
with any Person other than the Manager or the Collateral Agent to comply with Deposit Account
Orders originated by such Person relating to the Dominion Account. If the Bank or the Authority
obtains knowledge that any Person has asserted a lien, encumbrance or adverse claim against the
Dominion Account, such party will promptly notify the Manager and the Collateral Agent thereof.
For so long as this Agreement remains in effect, the Bank waives its rights of chargeback, setoff
(including such right of setoff as set forth in Section 9-340 of the Uniform Commercial Code)
and/or banker’s lien against the Dominion Account (except for debits to the Dominion Account for
the payment of Returned Item Amounts, Settlement Item Amounts, or Bank Fees). In the event that
the Bank has or subsequently obtains by agreement, operation of law or otherwise a lien or security
interest in the Dominion Account, the Bank agrees that such lien or security interest shall be
subordinate to the lien and security

10

 

interest of the Manager or the Collateral Agent. Regardless
of any provision in any other agreement, for purposes of the Uniform Commercial Code, the State of
New York shall be
deemed to be the Bank’s jurisdiction (within the meaning of Section 9-304 of the Uniform
Commercial Code).

     (f) Debit Amounts.

          (i) The Bank may pay any Returned Item Amounts, Settlement Item Amounts and Bank Fees by
debiting the Dominion Account on the Business Day that such Returned Item Amounts, Settlement Item
Amounts or Bank Fees are due and payable, without notice to any other party.

          (ii) If there are not sufficient funds in the Dominion Account to cover fully such Returned
Item Amounts, Settlement Item Amounts or Bank Fees on the Business Day they are debited from the
Dominion Account, the unpaid amounts thereof will be paid by the Authority sending the Bank a check
in the amount of such unpaid amounts, without setoff or counterclaim, within fifteen (15) calendar
days after the Bank’s demand to the Authority for payment by the Authority of such amounts.

          (iii) The Manager agrees that, other than during a First Lien Secured Obligations Event of
Default Period, any Returned Item Amounts or Bank Fees not paid by the Authority in accordance with
the provisions of clause (ii) above will be paid by the Manager sending the Bank a check in the
amount of such unpaid amount, without setoff or counterclaim, within thirty (30) calendar days
after the Bank’s demand to the Manager for payment by the Manager of such unpaid amount (provided
that (x) with respect to Returned Item Amounts, the Manager’s liability shall be limited to the
extent the Manager received proceeds from the corresponding Returned Item Amounts and (y) with
respect to Banks Fees, the Manager’s liability shall be limited to the amount of funds that have
been disbursed to the Manager from the Dominion Account under this Agreement). The Authority will
promptly indemnify the Manager with respect to any amounts so paid pursuant to this clause (iii),
and, if such indemnification is not promptly made, the amounts so paid shall be deemed to be Costs
of Gaming Operations under the Development and Management Agreement.

          (iv) The Collateral Agent agrees that, after delivery of a Collateral Agent Notice of
Exclusive Control and during the continuation of the First Lien Secured Obligations Event of
Default Period commenced by such Collateral Agent Notice of Exclusive Control, any amount not paid
by the Authority in accordance with the provisions of clause (ii) above will be paid by the
Collateral Agent sending the Bank a check in the amount of such unpaid amount, without setoff or
counterclaim, within thirty (30) calendar days after the Bank’s demand to the Collateral Agent for
payment by the Collateral Agent of such unpaid amount (provided that (x) with respect to Returned
Item Amounts, the Collateral Agent’s liability shall be limited to the extent the Collateral Agent
received proceeds from the corresponding Returned Item Amounts and (y) with respect to Settlement
Item Amounts or Banks Fees, the Collateral Agent’s liability shall be limited to the amount of
funds that have been disbursed to the Collateral Agent from the Dominion Account under this
Agreement). The Authority will promptly indemnify the

11

 

Collateral Agent with respect to any amounts
so paid pursuant to this clause (iii), and, if such
indemnification is not promptly made, the amounts so paid shall be deemed to be Costs of
Gaming Operations under the Development and Management Agreement.

     Section 2.2 Deposit of Gross Revenues.

          (a) The Authority agrees that it will direct the Manager and any other applicable parties to
cause all Gross Revenues to be transferred to the Bank on each Business Day for deposit into the
Dominion Account. If any Gross Revenues are inadvertently deposited in any other account, the
Authority shall immediately transfer or cause to be transferred all such Gross Revenues or other
Collateral, consisting of cash and other collected funds directly by wire transfer of immediately
available funds to the Dominion Account, on each Business Day.

          (b) In the event that the Authority receives any payment that should have been deposited into
the Dominion Account as provided pursuant to this Agreement, the Authority agrees that it will hold
such amounts in trust for the benefit of the Collateral Agent and the Manager as set forth herein,
and shall not commingle any such funds with any of its funds or other property and shall
immediately transfer such amounts to the Bank for deposit into the Dominion Account.

          (c) The Authority agrees that the Bank’s officers, agents and employees are irrevocably
authorized by it to endorse for payment to the Bank any instruments received by the Bank for
deposit into the Dominion Account. Notwithstanding the foregoing, if the security interest granted
pursuant to Section 3.1 to the Collateral Agent is released or terminated for any reason
(including, without limitation, in connection with the payment in full, or other Discharge, of the
First Lien Secured Obligations), only Enterprise Revenues shall be required thereafter to be
deposited in the Dominion Account pursuant to this Section 2.2. To the extent Manager
controls the disposition of Gross Revenues, the Manager shall also cause all Gross Revenues to be
deposited into the Dominion Account.

          (d) The Manager, the Collateral Agent and the Authority agree that all Gross Revenues that do
not also constitute Enterprise Revenues, as well as any Collateral that does not also constitute
Enterprise Collateral, will be deposited in a sub-account within the Dominion Account or otherwise
segregated or separately accounted for.

     Section 2.3 Withdrawals from Dominion Account.

          (a) Subject to the Manager’s rights under Section 5.2, and further subject at all
times to a Collateral Agent Notice of Exclusive Control of the Collateral Agent, the Manager
acknowledges and agrees with the Authority and the Collateral Agent that during each calendar month
it may only make (i) such transfers from the Dominion Account relating to sweep investments made in
accordance with this Agreement with funds on deposit in the Dominion Account, and (ii) such
transfers from the Dominion Account to and for the benefit of each of the Authority and the Manager
in such amounts, for such purposes, and as and when both (A) required or permitted under the
Development and Management Agreement and (B) permitted

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under the Indenture. Except during any
First Lien Secured Obligations Event of Default Period,
in connection with any such withdrawals and transfers and any other aspects of the Dominion
Account, the Bank shall acknowledge and comply with only the withdrawal requests and other
directions (including Deposit Account Orders with respect to the Dominion Account) received from
the Manager, except as provided in an arbitration award in an arbitration to which the Manager and
the Authority are parties, and, for avoidance of doubt, the Bank shall so comply without further
consent by the Authority or any other Person.

          (b) Notwithstanding anything contained in the foregoing clause (a), upon receipt by the Bank
of a Collateral Agent Notice of Exclusive Control, then during the First Lien Secured Obligations
Event of Default Period commenced by such Collateral Agent Notice of Exclusive Control, the Bank
shall acknowledge and comply with only the withdrawal requests and other directions (including
Deposit Account Orders with respect to the Dominion Account) received from the Collateral Agent;
provided, however, that following the receipt by the Bank of a Collateral Agent
Notice of Exclusive Control and during the continuation of the First Lien Secured Obligations Event
of Default Period commenced by such Collateral Agent Notice of Exclusive Control, the Collateral
Agent, on behalf of the Authority and the Manager, shall make withdrawals from the Dominion Account
for the payment of certain Operating Expenses as and to the extent set forth in the Intercreditor
Agreement.

     Section 2.4 Interest. Subject to Section 3.3 of this Agreement, funds in the
Dominion Account shall be invested in sweep investments qualifying as Cash Equivalents that are
reasonably acceptable to the Authority, the Manager and the Bank and otherwise in conformity with
the terms of the Indenture. No such investments shall be subject to or held in a margin account.
Any interest accruing with respect to amounts now or hereafter on deposit with respect to the
Dominion Account, and all interest or other income accruing from such sweep investments, shall be
deposited into the Dominion Account and become part of the proceeds of the Collateral and
distributed as part of such proceeds. Notwithstanding anything to the contrary contained in this
Section 2.4, Section 3.3 or otherwise, the Bank shall not be responsible for
determining if any sweep investment qualifies as Cash Equivalents.

     Section 2.5 Monthly Reporting. On or before the fifth (5th) Business Day
of each calendar month, the Bank shall provide to the Authority, the Manager and the Collateral
Agent an account statement with respect to the Dominion Account reflecting all deposits to,
withdrawals from and charges credited against the Dominion Account.

ARTICLE 3

PLEDGE AND GRANT OF SECURITY INTERESTS

     Section 3.1 Grant of the Security Interest to the Collateral Agent. Subject to the
terms of the Intercreditor and Subordination Agreement, as security for the payment and performance
of all of the First Lien Secured Obligations, the Authority hereby pledges to the Collateral Agent
and grants a continuing first priority security interest to the Collateral Agent in all of the
Authority’s right, title and interest in and to the Collateral.

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     Section 3.2 Grant of the Security Interest to the Manager. Subject to the terms of
the Intercreditor and Subordination Agreement, as security for the payment and performance of all
of the Manager Obligations, the Authority hereby pledges to the Manager and grants a continuing
security interest to the Manager in all of the Authority’s right, title and interest in and to the
Enterprise Collateral. Such security interest shall be subordinate to the security interest of the
Collateral Agent for the benefit of the First Lien Secured Parties as set forth in the
Intercreditor and Subordination Agreement.

     Section 3.3 Control; Investment Instructions.

     (a) Subject to a Collateral Agent Notice of Exclusive Control as set forth in Section
2.1 and Section 3.3(b), the Bank covenants and agrees that it will comply with all
instructions, requests or other directions originated by the Manager concerning the Dominion
Account at any time without further consent by the Authority, the Collateral Agent or any other
party. Except as otherwise provided in this Agreement, the Bank shall accept sweep investment
instructions with respect to the Collateral held in the Dominion Account at the direction of the
Authority or its authorized representatives and Manager until such time as Manager delivers a
written notice to Agent and the Authority in accordance with Section 5.2(a) that Manager is
thereby exercising exclusive control over the Account (“Manager Notice of Exclusive
Control”); provided that amounts on deposit in the Dominion Account may only be
invested in sweep investments qualifying as Cash Equivalents; provided, further,
that the proceeds from the sale of any such investments are deposited in or credited to the
Dominion Account contemporaneously with such transaction; and provided, further,
such investment instructions shall not affect the type or nature of Collateral for attachment and
perfection purposes under the Uniform Commercial Code. After the Bank receives a Manager Notice of
Exclusive Control, it will immediately cease complying with any investment instructions concerning
the Dominion Account originated by the Authority or its representatives and shall comply with only
such investment instructions as are originated by the Manager.

     (b) Notwithstanding the foregoing Section 3.3(a), if the Bank receives a Collateral
Agent Notice of Exclusive Control, then during the continuation of the First Lien Secured
Obligations Event of Default Period commenced by such Collateral Agent Notice of Exclusive Control,
the Bank will immediately cease complying with any sweep investment instructions concerning the
Dominion Account originated by the Authority or the Manager or any of their representatives and
shall comply with only such sweep investment instructions as are originated by the Collateral
Agent; provided that amounts on deposit in the Dominion Account may only be invested in
sweep investments qualifying as Cash Equivalents; provided, further, that the
proceeds from the sale of any such investments are deposited in or credited to the Dominion Account
contemporaneously with such transaction; and provided, further, such investment
instructions shall not affect the type or nature of Collateral for attachment and perfection
purposes under the Uniform Commercial Code.

     Section 3.4 Duration and Transfer of Funds in Dominion Account.

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     (a) Manager. The pledge and security interest granted herein in the Enterprise
Collateral will continue with respect to the Manager, subject to the terms of the Intercreditor and
Subordination Agreement, until (i) indefeasible payment in cash in full of all of the Manager
Obligations, (ii) other Discharge of the Manager Obligations, or (iii) the cancellation or
termination by the Manager under a written cancellation instrument signed by the Manager or except
as otherwise provided in an arbitration award made in an arbitration to which the Manager and the
Authority are parties. If the pledge and security interest granted to the Manager herein are
terminated for any reason, including pursuant to this Section, the Manager shall have no further
interest in the Dominion Account or the funds on deposit therein, and shall deliver written notice
thereof to the Collateral Agent and the Bank. Thereafter, the Manager or the Collateral Agent (as
applicable) shall direct the Bank to follow the transfer instructions of the Authority and the
Authority shall transfer all of the funds held in the Dominion Account to a separate deposit
account (the “Collateral Agent Deposit Account”) that is (i) subject to an account control
agreement in favor of the Collateral Agent for the benefit of the First Lien Secured Parties in
form and substance satisfactory to the Collateral Agent, and (ii) in which the Collateral Agent
holds a first priority security interest to all of the Authority’s right, title and interest in
such funds and such account for the benefit of the First Lien Secured Parties. Following such
transfer, this Agreement shall terminate and all future Gross Revenues shall be deposited in the
Collateral Agent Deposit Account and the terms of the account control agreement for such Collateral
Agent Deposit Account shall govern the treatment of such Gross Revenues. In conjunction with such
transfer and termination of this Agreement: (a) the Authority shall deliver to the Collateral Agent
a legal opinion in form and substance reasonably acceptable to the Collateral Agent opining as to
the due authorization, execution, and delivery of the account control agreement for the Collateral
Agent Deposit Account by the Authority, together with opinions as to the Authority’s sovereign
immunity waiver, noncontravention with laws and agreements, and validity of the security interest
in favor of the Collateral Agent for the benefit of the First Lien Secured Parties, and (b) the
Authority and the Manager shall each take such actions as may be reasonably required by the
Collateral Agent to effect the provisions of this paragraph. The Manager also acknowledges and
agrees that it shall cause the termination of this Agreement as and when required pursuant to the
applicable terms and provisions of the Development and Management Agreement.

     (b) Collateral Agent. The pledge and security interests granted herein in the
Collateral will continue with respect to the Collateral Agent, subject to the terms of the
Intercreditor and Subordination Agreement, until either (i) the security interests of Collateral
Agent under the Senior Security Agreement terminate, or (ii) the Discharge of all of the First Lien
Secured Obligations otherwise occurs. Upon termination of the pledge and security interests of the
Collateral Agent set forth herein, the Collateral Agent shall provide written notice of same to the
Bank and the Manager, and upon receipt by the Bank of such notice, the Collateral Agent shall cease
to be a party to this Agreement and shall have no further interest in the Dominion Account or the
funds on deposit therein, whereupon the Manager may (but shall not be required to), by written
notice to the Bank and the Authority, terminate this Agreement and direct that all of the funds and
other property held in the Dominion Account be deposited in such other dominion account or accounts
as the Manager shall specify in such notice.

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     Section 3.5 Transfers Free of Security Interest. Without modifying the terms of
Section 2.1 and Section 2.3 hereof, except with respect to funds on deposit in the
Dominion Account transferred from the Dominion Account relating to sweep investments made in
accordance with this Agreement (which shall remain subject to the pledge and security interest of
the Manager), all funds transferred from the Dominion Account as provided herein (but only as
provided herein), including without limitation any funds transferred by or at the direction of the
Manager to the Enterprise Accounts (as defined in the Development and Management Agreement)
pursuant to Sections 3.8(b) of the Development and Management Agreement, as well as all
Minimum Guaranteed Monthly Payments (as such term is defined in Section 6.3(a) of the
Development and Management Agreement) and other funds distributed to the Authority, shall be free
of the pledge and security interest of the Manager hereunder immediately upon their transfer from
the Dominion Account.

ARTICLE 4

AUTHORITY COVENANTS

     Section 4.1 Covenants of the Authority. During the term of this Agreement, the
Authority will observe and comply with the following requirements:

     (a) Further Assurances. The Authority will promptly execute and deliver all
instruments and documents, and take such actions that may be necessary or that the Bank, the
Manager or the Authority may reasonably request, in order to give effect to the terms of this
Agreement and to perfect and protect the security interests granted hereby or, after a Manager
Event of Default or First Lien Secured Obligations Event of Default and in accordance with the
Intercreditor and Subordination Agreement, to enable each of the Bank, the Manager or the
Collateral Agent, as applicable, to exercise and enforce its rights and remedies hereunder with
respect to any Collateral in which it holds a security interest in accordance with this Agreement.
The Authority hereby authorizes the Manager or the Collateral Agent to file this Agreement (if the
Authority shall fail to provide an appropriate financing statement within ten (10) Business Days
after request) or one or more continuation statements in respect thereof, relating to all or any
part of the Collateral without the additional signature or consent of the Authority where permitted
by law. A photocopy or other reproduction of this Agreement or any financing statement covering
the Collateral or any part thereof shall be sufficient as a financing statement where permitted by
law.

     (b) No Revocation. The Authority shall not revoke any direction or authorization
required or authorized to be given to the Bank pursuant to Article 2 or elsewhere herein;
provided, however, that the Authority may revoke any direction or authorization
required or authorized to be given to the Bank pursuant to Article 2 or elsewhere herein if
authorized pursuant to an arbitration award to which the Manager and the Authority are parties;
provided, further that any such revocation pursuant to an arbitration award to
which the Manager and the Authority are parties shall only be with respect to any rights of the
Manager or the Authority and may not affect the rights of the Collateral Agent.

16

 

     (c) Financial Statements. After the occurrence of a Transaction Document Event of
Default and termination of the Development and Management Agreement, the Authority will furnish the
following to the Manager upon request:

	 	(i)	 	Within thirty (30) calendar days after the end of each month
and one hundred twenty (120) calendar days after the end of each fiscal year,
financial and operating statements of the Enterprise for such month (and
year-to-date) or fiscal year, as applicable, including a balance sheet and a
profit and loss statement, all in reasonable detail and conforming to generally
accepted accounting principles for casinos. The monthly statements shall be
prepared and certified by the Authority as being true and correct
representations of the information set forth therein and the annual financial
statements shall be prepared, audited and certified by independent certified
public accountants with casino auditing experience employed or retained by the
Authority. The Manager agrees that any such information, as well as any other
information it may receive from the Authority relating to the Enterprise, shall
be and remain subject to the provisions of Section 10.20 of the
Development and Management Agreement.
	 
	 	(ii)	 	Within fifteen (15) calendar days after the filing thereof, a
copy of the Authority’s regulatory filings under IGRA and the Tribal-State
Compact for each calendar year during the term hereof, with all schedules
attached.
	 
	 	(iii)	 	With each of the annual audited and monthly unaudited
financial statements delivered pursuant to this subsection a certificate of the
chief financial officer of the Authority or an appropriate officer of the
manager of the Enterprise substantially in the form set forth in Exhibit
A stating that, except as explained in reasonable detail in such
certificate, all Enterprise Revenues have been deposited into the Dominion
Account for the period covered by such financial statement. If such
certificate discloses an exception to such certification, such certificate
shall set forth what action the Authority has taken or proposes to take with
respect thereto.

     (d) Insurance. At such time as the Manager shall no longer be the manager of the
Enterprise, the Authority shall cause to be maintained such insurance as required by the
Development and Management Agreement (except that the Manager shall not be a named insured or
additional insured but will be named as a certificate holder if permitted by the insurer without
granting an insurable interest). Upon request, the Authority shall provide to the Bank and the
Manager certificates of insurance or copies of insurance policies evidencing that such insurance is
in effect at all times.

     (e) Other Accounts. So long as the Collateral Agent continues to hold a security
interest in the Collateral, the Authority shall not establish any demand, time, savings, passbook

17

 

or other deposit account other than those accounts comprising the Dominion Account and other
Permitted Accounts, unless otherwise consented to in writing by the Collateral Agent.

ARTICLE 5

EVENTS OF DEFAULT/REMEDIES

     Section 5.1 Events of Default.

     (a) Manager Events of Default. Each of the following occurrences shall constitute a
“Manager Event of Default”:

	 	(i)	 	Any material representation or warranty made by or on behalf of
the Authority herein or in any report, certificate or other document furnished
by or on behalf of the Authority pursuant to this Agreement shall prove to be
false or misleading in any material respect when made, and such false or
misleading statement shall cause a material loss or have a material adverse
effect on any Collateral or any Transaction Documents and such loss or adverse
effect is not cured by the Authority within sixty (60) calendar days after
providing notice thereof to the Authority.
	 
	 	(ii)	 	The Authority shall default in the due observance or
performance of any of its material obligations hereunder and such default shall
continue for thirty (30) calendar days after written notice thereof has been
sent to the Authority by the Manager or the Bank; provided, however,
that if the nature of such default (but specifically excluding defaults curable
by the payment of money) is such that it is not possible to cure such default
within such cure period, such cure period shall be extended for so long as the
Authority shall be using diligent efforts to effect a cure thereof.
	 
	 	(iii)	 	A Transaction Document Event of Default shall occur.

     (b) First Lien Secured Obligations Event of Default. A “First Lien Secured
Obligations Event of Default” shall mean any Event of Default under the Senior Security
Agreement.

     Section 5.2 Remedies on Default.

     (a) Remedies of the Manager. Subject at all times to the Intercreditor and
Subordination Agreement, and provided that a First Lien Secured Obligations Event of Default Period
is not then continuing, whenever a Manager Event of Default shall have occurred and be continuing
(if such default is not cured within any applicable cure period), the Manager may thereafter give
the Bank and the Authority a Manager Notice of Exclusive Control, and the Bank (for and on behalf
and at the direction of the Manager) or the Manager, as applicable, shall be entitled to pay to the
Manager from Enterprise Collateral all amounts otherwise payable to the Authority with respect to
the Monthly Distribution Payment and to apply the same towards the repayment of the Manager
Obligations, and to endorse in the name of the Authority any checks,

18

 

drafts, notes or other instruments or documents received in payment of or on account of the
Enterprise Collateral; and any such proceeds so received and prepaid shall be applied to
installments of principal on the Manager Obligations in the inverse order of their maturity; and
provided further that the Manager may obtain any injunctive or other relief as is necessary for the
enforcement of this Agreement and the terms and provisions set forth herein; provided,
however, that any and all obligations of the Authority and remedies of the Manager shall be
Limited Recourse and shall be subject to the limitations set forth in the Resolution of Limited
Waiver; and provided further that, notwithstanding any term or provision contained herein, the
Manager shall take all steps necessary to continue to permit and cause the necessary withdrawals
and transfers to be made from the Dominion Account in accordance with Section 2.3 hereof so
long as such withdrawals and transfers are both otherwise required to be made by the Development
and Management Agreement and permitted to be made by the Indenture, with the exception that the
Manager shall be entitled to retain all amounts otherwise payable to the Authority with respect to
the Monthly Distribution Payment and apply the same towards the repayment of the Manager
Obligations; and in no event shall the Manager exercise any remedy against the Authority (excluding
third parties) with respect to the Enterprise Revenues other than such remedies as are necessary to
require their deposit into the Dominion Account or seeking an accounting and turnover of any
Enterprise Revenues held in trust by the Authority as required under Section 2.2 hereof
until such time that the Authority shall have ceased business operations at the Enterprise, at
which time the Manager may exercise all rights and remedies under applicable law or by agreement
and apply all proceeds of the Enterprise Collateral to the repayment of the Manager Obligations;
and, as to third parties, in no event shall the Manager seek to recover funds paid to third parties
through transfers from the Dominion Account in accordance with Section 2.3. The Authority
agrees that, to the extent notice of sale shall be required by law with respect to the disposition
of any Collateral, at least ten (10) calendar days notice to the Authority of the time and place of
any public sale or the time after which a private sale is to be made shall constitute reasonable
notification. The Manager agrees that it shall withdraw and terminate any Manager Notice of
Exclusive Control at such time that all outstanding Manager Events of Default have been cured by
the Authority. Notwithstanding the foregoing, in the event that the Collateral Agent provides a
Collateral Agent Notice of Exclusive Control, then during the continuation of the First Lien
Secured Obligations Event of Default Period commenced by such Collateral Agent Notice of Exclusive
Control the provisions of Section 5.2(b) shall control and this Section 5.2(a)
shall not apply and any Manager Notice of Exclusive Control shall cease to be of effect.

     (b) Remedies of the Collateral Agent. Notwithstanding Section 5.2(a),
whenever a First Lien Secured Obligations Event of Default shall have occurred and be continuing
and, if such default is not cured within any applicable cure period, the Collateral Agent may
thereafter give the Bank and the Authority (and provide the Manager with a copy of) a Collateral
Agent Notice of Exclusive Control, and the Bank (for and on behalf and at the direction of the
Collateral Agent) or the Collateral Agent, as applicable, shall, during the continuation of the
First Lien Secured Obligations Event of Default Period commenced by such Collateral Agent Notice of
Exclusive Control, be entitled to pay to the Collateral Agent from the Dominion Account all amounts
otherwise payable to the Authority, and to endorse in the name of the Authority any checks, drafts,
notes or other instruments or documents received in payment of or on account of

19

 

the Gross Revenues or other Collateral, and the Collateral Agent shall have all remedies of a
secured party under the Uniform Commercial Code and may provide any Deposit Account Order with
respect to the Dominion Account or instruct the Bank to pay to or deliver to, or to the order of,
Collateral Agent any or all amounts or assets on deposit in or credited to the Dominion Account;
and provided further that the Collateral Agent may obtain any injunctive or other relief as is
necessary for the enforcement of this Agreement and the terms and provisions set forth herein; and,
as to third parties, in no event shall the Collateral Agent seek to recover funds paid to third
parties through transfers from the Dominion Account in accordance with Section 2.3. The
Authority agrees that, to the extent notice of sale shall be required by law with respect to the
disposition of any Collateral, at least ten (10) calendar days notice to the Authority of the time
and place of any public sale or the time after which a private sale is to be made shall constitute
reasonable notification.

     (c) Each of the parties hereto acknowledge and agree that all reasonable costs and expenses
incurred by the Bank, the Manager or the Collateral Agent after a Manager Event of Default or a
First Lien Secured Obligations Event of Default, as the case may be, in connection with the
exercise of any remedy hereunder, including reasonable attorneys’ fees, are the costs, expense and
responsibility of the Authority and shall be paid from the Dominion Account notwithstanding any
other terms, provisions or priorities set forth in this Agreement.

     Section 5.3 Waivers; Remedies. Any waiver given by the Manager or the Collateral
Agent hereunder shall be effective if it is in writing and only in the specific instance and for
the specific purpose given. Mere delay or failure to act shall not preclude the exercise or
enforcement of any rights and remedies available to the Manager or the Collateral Agent. All
rights and remedies of the Bank, the Manager or the Collateral Agent shall be cumulative and may be
exercised singularly in any order or concurrently, at the option of the Manager or the Collateral
Agent, as applicable, and the exercise or enforcement of any such right or remedy shall neither be
a condition to nor a bar to the exercise or enforcement of any other.

ARTICLE 6

THE BANK

     Section 6.1 Bank’s Rights and Duties.

     (a) The Bank’s sole agency and duty with respect to the Manager and the Collateral Agent under
this Agreement is for the purposes of perfecting the Manager’s and the Collateral Agent’s pledge
and security interest in the Collateral and the Bank shall have no other duty or obligation,
fiduciary or otherwise to the Manager or the Collateral Agent except to the extent expressly set
forth herein. Notwithstanding anything to the contrary contained herein, the Bank shall not be
liable to any party hereto for any transfer from the Dominion Account which the Bank, in its
commercially reasonable judgment, believes was authorized by the appropriate Person under this
Agreement, whether or not such transfer violates any contractual or fiduciary obligations of such
Person.

20

 

     (b) The Bank undertakes to perform such duties as are specifically set forth in this
Agreement, and no implied covenants or obligations shall be read into this Agreement against the
Bank.

     (c) In the absence of bad faith on its part, the Bank may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Bank and conforming to the requirements of this Agreement; but in the
case of any such certificates or opinions which by any provision hereof are specifically required
to be furnished to the Bank, the Bank shall be under a duty to examine the same to determine
whether or not they conform to the requirements hereof.

     (d) In case that a Manager Event of Default or a First Lien Secured Obligations Event of
Default has occurred and is continuing and the Bank has been so notified in writing, the Bank shall
exercise such of the rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise, as a prudent Person would exercise or use under the circumstances
in the conduct of such Person’s own affairs.

     (e) No provision of this Agreement shall be construed to relieve the Bank from liability for
its own willful misconduct, gross negligence or breach of duty hereunder, except that:

	 	(i)	 	this subsection shall not be construed to limit the effect of
subsections (a) or (b) of this Section;
	 
	 	(ii)	 	the Bank shall not be liable for any error of judgment made in
good faith by an officer, employee or agent of the Bank, unless it shall be
proved that the Bank was grossly negligent in ascertaining the pertinent facts;
and
	 
	 	(iii)	 	no provision of this Agreement shall require the Bank to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

     (f) Except for the requirements under Section 3.3 hereof, the safekeeping of any funds
in its possession, the accounting for funds actually received by it hereunder and the investment of
the funds in accordance with instructions given in accordance with this Agreement, the Bank shall
have no duty to the Authority as to any Gross Revenues or other Collateral or as to the taking of
any necessary steps to preserve rights against any Persons or any other rights pertaining to any
Gross Revenues or other Collateral.

     (g) Except as specifically provided in this Agreement, the Dominion Account and services of
the Bank relating thereto shall be subject to, and the Bank’s operation of the Dominion Account and
the services of the Bank relating thereto (including without limitation any sweep product services)
shall be in accordance with, the terms and provisions of the Bank’s

21

 

customary account opening and other account and service-related documentation (as in effect
from time to time, collectively, the “Account Documentation”). The Authority agrees, upon
the Bank’s request, to promptly execute and deliver the Account Documentation to the Bank. In the
event of any inconsistency between this Agreement and any Account Documentation, the terms of this
Agreement shall control.

     (h) IN NO EVENT WILL THE BANK BE LIABLE FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT
OR PUNITIVE DAMAGES, WHETHER ANY CLAIM IS BASED ON CONTRACT OR TORT, WHETHER THE LIKELIHOOD OF SUCH
DAMAGES WAS KNOWN TO THE BANK AND REGARDLESS OF THE FORM OF THE CLAIM OR ACTION, INCLUDING, BUT NOT
LIMITED TO, ANY CLAIM OR ACTION ALLEGING GROSS NEGLIGENCE, WILLFUL MISCONDUCT, FAILURE TO EXERCISE
REASONABLE CARE OR FAILURE TO ACT IN GOOD FAITH.

     Section 6.2 Indemnification.

     (a) The Authority agrees to indemnify, to hold the Bank harmless and to defend the Bank
against any claims, causes of action, damages or expenses, including all reasonable fees and
expenses of counsel (such claims, causes of action, damages and expenses being herein referred to
collectively as “Losses and Liabilities”) arising out of any claim against the Bank by any
Person with respect to amounts due to such Person from sums paid to the Bank hereunder, other than
with respect to claims arising out of the breach of this Agreement, or the willful misconduct or
gross negligence, by the Bank, its officers, agents or employees, in the performance of its duties
under this Agreement, and, as among the Authority, the Manager and the Collateral Agent, any such
amounts shall be deemed to be Costs of Construction under the Development and Management Agreement
with respect to all such amounts occurring prior to the Commencement Date and thereafter shall be
deemed Costs of Gaming Operations under the Development and Management Agreement and subject to the
terms of Section 3.9 thereof.

     (b) To the extent to Authority fails to so indemnify, hold harmless and defend the Bank
against any Losses and Liabilities in accordance with the provisions of Section 6.2(a)
within fifteen (15) calendar days after the Bank’s demand to the Authority therefor, then (a) the
Collateral Agent will indemnify the Bank against any such Losses and Liabilities the Bank may
suffer or incur as a result of or in connection with the Bank having followed, in accordance with
the provisions of this Agreement, any instruction or request of the Collateral Agent (provided that
such indemnification obligation shall be limited to the amount of funds that have been disbursed to
the Collateral Agent under this Agreement), and (b) the Manager will indemnify the Bank against any
such Losses and Liabilities the Bank may suffer or incur as a result of or in connection with the
Bank having followed, in accordance with the provisions of this Agreement, any instruction or
request of the Manager (provided that such indemnification obligation shall be limited to the
amount of funds that have been disbursed to the Manager under this Agreement). The Authority will
promptly indemnify the Collateral Agent or the Manager, as the case may be, with respect to any
Losses and Liabilities so paid pursuant to this Section 6.2(b), and, if such
indemnification is not promptly made, the Losses and Liabilities so paid shall be deemed to be
Costs of Gaming Operations under the Development and Management Agreement.

22

 

     Section 6.3 Fees and Expenses. The Authority agrees to pay the Bank Fees as provided
in Section 2.1(f). The Authority further agrees, after a Manager Event of Default or First
Lien Secured Obligations Event of Default, to pay and reimburse the Bank on demand for all
out-of-pocket expenses (including in each case all filing and recording fees and taxes and all
reasonable fees and expenses of counsel) incurred or expended by the Bank in connection with the
creation, perfection, satisfaction, foreclosure or enforcement of the security interests granted
hereby and the preparation, administration and enforcement of this Agreement.

     Section 6.4 Certain Rights of Bank. Except as otherwise provided in Section
6.1:

     (a) The Bank may rely and shall be protected in acting or remaining from acting upon any
certificate, statement, instrument, opinion, report, notice, request, direction, consent, order or
other paper or documents believed by it to be genuine and to have been signed or presented by the
proper party or parties.

     (b) Whenever in the administration of this Agreement the Bank shall deem it desirable that a
matter be proved or established prior to taking, suffering, or omitting any action hereunder, the
Bank (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon a certificate of an officer of the Manager and a certificate of an authorized
employee the Collateral Agent; provided, however, during a First Lien Secured
Obligations Event of Default Period, the Bank may only rely on a certificate of the Collateral
Agent.

     (c) The Bank shall not be bound to make any investigation into the facts or matters stated in
any certificate, statement, instrument, opinion, report, notice, request, direction, consent, order
or other paper or document, but the Bank, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.

     Section 6.5 Bank Required, Eligibility. There shall at all times be a Bank hereunder
which shall be a corporation organized and doing business under the laws of the United States of
America or of any State, having a combined capital, undivided profits and surplus of at least
$500,000,000.00. If at any time the Bank shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.

     Section 6.6 Resignation and Removal, Appointment of Successor.

     (a) No resignation or removal of the Bank and no appointment of a successor Bank pursuant to
this Article shall become effective until the acceptance of appointment by the successor Bank under
Section 6.7 and execution by such successor Bank of an agreement assuming the obligations
of such resigning Bank hereunder or of a Dominion Account Agreement substantially in the form of
this Agreement. Following the resignation of the Bank, the Manager (pursuant to Section
6.6(d)(i)) or the Collateral Agent (pursuant to Section 6.6(d)(ii)) will act promptly
and in good faith to appoint a successor Bank.

23

 

     (b) The Bank may resign (i) if any party should fail at any time to make any payment when due
to the Bank under the terms of this Agreement (following the expiration of any cure or grace period
provided in this Agreement with respect to such payment obligation and, with respect to any payment
obligation of the Authority, any period allowed for indemnification by another party of such
obligation), the Bank may resign by giving fifteen (15) calendar days prior written notice to the
Authority, the Manager and the Collateral Agent if such payment failure is not cured by the end of
such fifteen-day notice period, and (ii) otherwise, by giving thirty (30) calendar days prior
written notice thereof to the Authority, the Manager and the Collateral Agent. If an instrument of
acceptance by a successor Bank shall not have been delivered to the Bank within thirty (30)
calendar days after the giving of such notice of resignation, the resigning Bank may close the
Dominion Account and commence an interpleader or other appropriate action seeking a court order for
disposition of the proceeds of the Dominion Account or petition any court of competent jurisdiction
for the appointment of a successor Bank.

     (c) Subject to subsection (a) above, (i) other than during a First Lien Secured Obligations
Event of Default Period, the Bank may be removed at any time by an instrument in writing executed
by the Manager and the Collateral Agent, and (ii) during a First Lien Secured Obligations Event of
Default Period, the Bank may only be removed by an instrument in writing executed solely by the
Collateral Agent (in which case the Collateral Agent shall promptly provide the Manager written
notice of such removal in accordance with the provisions of Section 6.6(e). In either case
any successor Bank must satisfy the eligibility requirements set forth in Section 6.5).

     (d) If the Bank shall resign or be removed for any cause,

          (i) other than during a First Lien Secured Obligations Event of Default Period, the Manager
shall promptly appoint a successor Bank and promptly provide the Collateral Agent written notice
of such appointment in accordance with the provisions of Section 6.6(e); and

          (ii) during a First Lien Secured Obligations Event of Default Period, the Collateral Agent
shall promptly appoint a successor Bank and promptly provide the Manager written notice of such
appointment in accordance with the provisions of Section 6.6(e);

provided, however, that any successor Bank must satisfy the eligibility
requirements set forth in Section 6.5.

     (e) Any party required to give written notice of the removal of the Bank and the appointment
of a successor Bank in accordance with the provisions of the foregoing Sections 6.6(c) and
(d) shall give such notice promptly, and in any event within five (5) Business Days of such
event, by certified mail, return receipt requested, postage prepaid. Such notice shall include the
name of the successor Bank and the address of its principal corporate trust office. The recipient
of the notice, within five (5) Business Days of its receipt of such notice, shall have the right to
reject the choice of the successor Bank by providing return written notice if (i) the

24

 

successor Bank fails to comply with Section 6.5 hereof, (ii) the successor Bank is adjudged
a bankrupt or an insolvent or an order for relief is entered with respect to the successor Bank
under any bankruptcy law, (iii) a custodian or public officer takes charge of the successor Bank or
its property, or (iv) the successor Bank becomes incapable of acting.

     Section 6.7 Acceptance of Appointment by Successor. Every successor Bank appointed
hereunder shall execute, acknowledge, and deliver to the Authority, the Manager and the Collateral
Agent, and to the retiring Bank an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Bank shall become effective and such Bank, without any
further act, deed, or conveyance, shall become vested with all the rights, powers, trusts, and
duties of the retiring Bank, but, on request of the Authority, the Manager, the Collateral Agent or
the successor Bank, such retiring Bank shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Bank all the rights, powers and trusts of the retiring
Bank, and shall duly assign, transfer and deliver to such successor Bank all property and money
held by such retiring Bank hereunder. Upon request of any such successor Bank, the Authority shall
execute any and all instruments for more fully and certain vesting in and confirming to such
successor Bank for all such rights, powers and trusts.

     Section 6.8 Merger, Conversion, Consolidation or Succession to Business. Any
corporation into which the Bank may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion, or consolidation to which the Bank shall be
a party, or any corporation succeeding to all or substantially all of the corporate trust business
of the Bank, shall be the successor of the Bank hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto.

     Section 6.9 No Set-Off. The Bank shall not set off from the Collateral any
obligations or other amounts which may be payable to the Bank by the Authority, the Manager, the
Collateral Agent or by any other Person, other than amounts due pursuant to Sections 2.1(f)
and 6.3.

ARTICLE 7

MISCELLANEOUS

     Section 7.1. Notices. Except as otherwise provided herein, any notice or demand
which, by provision of this Agreement, is required or permitted to be given or served any party to
the others shall be deemed to have been sufficiently given and served for all purposes: (a) (if
mailed) three (3) calendar days after being deposited, postage prepaid, in the United States Mail,
registered or certified mail; or (b) (if delivered by express courier) one Business Day after being
delivered to such courier; or (c) (if delivered in person) the same day as delivery, or until
another address or addresses are given in writing by a party as follows:

	 	 	 
	To Authority:

	 	Shingle Springs Tribal Gaming Authority
	 

	 	P. O. Box 1660
	 

	 	El Dorado, CA 95623-1660

25

 

	 	 	 
	 

	 	Attention: Chairman
	 
	 	 
	To Bank:

	 	Wells Fargo Bank, N.A.
	 

	 	Gaming Division
	 

	 	5340 Kietzke Lane, Suite 200
	 

	 	Reno, NV 89511-2065
	 

	 	Attention: Erna Stuckey
	 
	 	 
	To Manager:

	 	Lakes KAR-Shingle Springs, LLC
	 

	 	c/o Lakes Entertainment, Inc.
	 

	 	130 Cheshire Lane
	 

	 	Minnetonka, MN 55305
	 

	 	Attn: Timothy J. Cope
	 
	 	 
	 

	 	With a copy to:
	 
	 	 
	 

	 	Gray, Plant, Mooty, Mooty & Bennett
	 

	 	500 IDS Center
	 

	 	80 South Eighth Street
	 

	 	Minneapolis, MN 55402-3796
	 

	 	Attn: Daniel R. Tenenbaum
	 
	 	 
	To Collateral Agent:

	 	The Bank of New York Trust Company, N.A.
	 

	 	2 North LaSalle Street
	 

	 	Suite 1020
	 

	 	Chicago, IL 60602
	 

	 	Attention: Corporate Trust

     Any notice given under this Agreement by any party shall be given to all parties.

     Section 7.2 Severability. If any provision of this Agreement is prohibited by, or is
unlawful or unenforceable under, any applicable law of any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such prohibition without invalidating the
remaining provisions hereof, provided, however that where the provisions of any
such applicable law may be waived, they hereby are waived by the parties hereto to the fullest
extent permitted by law to the end that this Agreement shall be deemed to be a valid and binding
agreement in accordance with its terms.

     Section 7.3 Survival. The warranties, representations, covenants and agreements set
forth herein shall survive the execution and delivery of this Agreement and shall continue in full
force and effect until all the Manager Obligations and First Lien Secured Obligations shall have
been paid and performed in full. The terms and provisions of the Indenture referred to herein are
incorporated herein by reference and shall have the original meaning thereof notwithstanding any
termination, expiration or amendment of the Indenture.

26

 

     Section 7.4 Captions. Captions herein are for convenience only and shall not be
deemed part of this Agreement.

     Section 7.5 Binding Effect. Subject to any limitations on assignment set forth in the
Development and Management Agreement, this Agreement shall be binding upon and inure to the benefit
of the parties hereto, their respective successors and assigns.

     Section 7.6 Amendments. This Agreement may not be amended, modified, waived, canceled
or terminated, except in writing executed by all of the parties hereto. The Collateral Agent may
execute such a writing only with the consent of the Required Secured Parties (as defined in the
Intercreditor and Subordination Agreement).

     Section 7.7 Rights, Powers, Waivers, etc. Each and every right, remedy and power
granted to the Bank, the Manager or the Collateral Agent hereunder or to the Manager with respect
to the Manager Obligations or the Collateral Agent under the Intercreditor and Subordination
Agreement shall be cumulative and may be exercised by the Bank, the Manager or the Collateral
Agent, as applicable, from time to time concurrently or independently as often and in such order as
the Bank, the Manager or the Collateral Agent may deem expedient; provided,
however, that any and all remedies of the Bank and the Manager shall be Limited Recourse
(as defined in the Development and Management Agreement). No failure on the part of the Bank, the
Manager or the Collateral Agent to exercise and no delay in exercising, any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any power
or right preclude any other or further exercise thereof of any other power or right.

     Section 7.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original but together shall constitute one and
the same instrument.

     Section 7.9 Sovereign Immunity Waiver; Arbitration; Submission to Jurisdiction;
Limitation on Damages.

          (a) Manager. This Agreement constitutes a Transaction Document. Unless and until the
Discharge of the First Lien Secured Obligations occurs, and thereafter until a dominion account
agreement to which the Authority and the Manager are parties becomes effective and no further
Collateral is deposited in the Dominion Account established hereby, this Agreement constitutes the
Dominion Account Agreement as defined and referred to in the Development and Management Agreement.
As such and without limiting the scope of such Development and Management Agreement, the provisions
of Sections 2.11, 10.10 and Article 11 of the Development and Management
Agreement apply to this Agreement and are hereby incorporated by reference, including, without
limitation, the limited sovereign immunity waiver, limitations on recourse and arbitration and
jurisdiction provisions contained therein and the Resolution of Limited Waiver referred to therein.
Such provisions are for the benefit of the Manager and not for the benefit of the Trustee, the
holders of the Senior Notes or the Collateral Agent.

27

 

          (b) Indenture. This Agreement constitutes the Notes Dominion Account Agreement as
defined and referred to in the Indenture, and the provisions of such Indenture are hereby
incorporated by reference, including, without limitation, the limited sovereign immunity waiver,
limitations on recourse and arbitration provisions contained therein. Such provisions are for the
benefit of the Trustee and the holders of the Senior Notes and not for the benefit of the Manager.
In addition, the Authority expressly agrees that all limited sovereign immunity waivers,
limitations on recourse and arbitration provisions set forth in the Indenture for the benefit of
the Trustee or any of the First Lien Secured Parties are hereby incorporated by reference and shall
be deemed to apply equally to the Collateral Agent and the Bank to the full extent set forth in the
Indenture.

     Section 7.10 Agreements Control. With respect to the Dominion Account, in the event
of inconsistency (a) between the Development and Management Agreement and this Agreement, this
Agreement shall control or (b) between the Intercreditor and Subordination Agreement and this
Agreement, the Intercreditor and Subordination Agreement shall control; provided,
however, the duties and obligations of the Bank shall be governed solely by this Agreement.

     Section 7.11 Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the internal law of the State of New York (including the Uniform
Commercial Code, which Uniform Commercial Code shall apply without regard to any provision therein
that would otherwise provide that such Uniform Commercial Code is inapplicable to the Tribe or any
Tribal Party, whether based upon the fact that the Tribe or any Tribal Party is deemed to be a
governmental body or otherwise); except that (i) to the extent that New York law does not recognize
or provide for the creation, attachment, perfection, priority or enforcement of any security
interest granted hereby in any Collateral that is recognized or provided for under the Tribal UCC
Code, then the Tribal UCC Code shall apply thereto so as to give effect to such creation,
attachment, perfection, priority or enforcement, and (ii) to the extent that such Tribal UCC Code
shall under any circumstances otherwise be more favorable to a secured party hereunder than to the
Authority, then under such circumstances and to such extent the Tribal UCC Code shall apply. As
used in this provision, “Tribal Party” shall have the meaning ascribed to such term in the Tribal
UCC Code.

     Section 7.12 Compliance with Intercreditor and Subordination Agreement. The
Collateral Agent and the Manager hereby acknowledge and agree as between themselves that,
notwithstanding anything herein to the contrary, the exercise of any right or remedy by the Manager
hereunder (including, without limitation, its right to give any instructions to the Bank and to
withdraw funds from the Dominion Account) is subject to the provisions of the Intercreditor and
Subordination Agreement.

     Section 7.13 Successors and Assigns.

     (a) None of the Authority, the Collateral Agent or the Manager may assign or transfer its
rights or obligations under this Agreement to any other Person without the prior written consent of
the Bank, which consent will not be unreasonably withheld (provided, however, that

28

 

no such consent of the Bank will be required if (i) such party provides prompt written notice of
such assignment or transfer to the Bank, (ii) the assignee or transferee is not entitled to any
rights or benefits under this Agreement until it provides evidence in writing reasonably acceptable
to the Bank that such assignee or transferee agrees to be bound by the terms and provisions of this
Agreement, and (iii) such assignment or transfer does not violate applicable laws).

     (b) The Bank may not assign or transfer its rights or obligations under this Agreement to any
other Person without the prior written consent of the Manager and the Collateral Agent, which
consent will not be unreasonably withheld (provided, however, that no such consent
of the Manager and the Collateral Agent will be required if such assignment or transfer takes place
as a part of a merger, acquisition or corporate reorganization affecting the Bank).

[The remainder of this page has been intentionally left blank.]

29

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement, in counterparts, as of
the Effective Date.

	 	 	 	 	 	 	 
	 	 	“AUTHORITY”	 	 
	 
	 	 	 	 	 	 
	 	 	SHINGLE SPRINGS TRIBAL GAMING AUTHORITY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ Nicholas H. Fonseca	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Nicholas H. Fonseca	 	 
	 	 	Its: Tribal Chairman	 	 
	 
	 	 	 	 	 	 
	 

	 	And:
	 	/S/ Richard Lawson	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Richard Lawson	 	 
	 	 	Its: Authority Chairman	 	 

30

 

	 	 	 	 	 	 	 
	 	 	“BANK”	 	 
	 
	 	 	 	 	 	 
	 	 	WELLS FARGO BANK, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	/s/ Erna Stuckey	 	 
	 

	 	 	 	 	 
	 	 	Name:	Erna Stuckey	 	 
	 	 	Its:	Vice President	 	 

31

 

	 	 	 	 	 	 	 
	 	 	“MANAGER”	 	 
	 
	 	 	 	 	 	 
	 	 	LAKES KAR-SHINGLE SPRINGS, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/S/ Damon E. Schramm	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Damon E. Schramm	 	 
	 	 	Its: General Counsel	 	 

32

 

	 	 	 	 	 	 	 
	 	 	“COLLATERAL AGENT”	 	 
	 
	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK TRUST COMPANY, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	/s/ Kristine E. Brustman	 	 
	 

	 	 	 	 	 
	 	 	Name:	Kristine E. Brustman	 	 
	 	 	Its:	Vice President	 	 

33

 

EXHIBIT “A”

COMPLIANCE CERTIFICATE

Dated                     , 200_

     I, the Chief Financial Officer of the Shingle Springs Tribal Gaming Authority (the
“Authority”), do hereby provide this Compliance Certificate in connection with that certain
Notes Dominion Account Agreement dated June [___], 2007 (the “Dominion Agreement”), by and
between the Authority, the Manager, the Collateral Agent and the Bank (the “Bank”);
capitalized terms used but not otherwise defined herein shall have the meaning set forth in the
Dominion Agreement.

     I certify that as of the date hereof:

	 	1)	 	All Enterprise Revenues arising from the operations of the Enterprise from
                    , 200 ___ to                     , 200 ___ have been deposited into the Dominion
Account with the Bank.

	 	 	 	 	 	 	 
	 	 	SHINGLE SPRINGS TRIBAL GAMING AUTHORITY	 	 
	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 

i

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