GRAND CASINOS INC, 10-Q, 1996-08-14

GRAND CASINOS INC
10-Q, 1996-08-14
MISCELLANEOUS AMUSEMENT & RECREATION

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------

FORM 10-Q

(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --------- EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 1996

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- --------- SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to _______________

Commission File No. 1-12962

GRAND CASINOS, INC.
(Exact name of registrant as specified in its charter)

Minnesota 41-1689535
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

13705 First Avenue North
Minneapolis, Minnesota 55441
(Address of principal executive offices) (Zip Code)

(612) 449-9092
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes __X__ No _______

As of August 12, 1996, there were 41,748,022 shares of Common Stock, $0.01 par
value per share, outstanding.

GRAND CASINOS, INC. AND SUBSIDIARIES

INDEX

<S> <C>
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Consolidated Balance Sheets as of
June 30, 1996 and December 31, 1995

Consolidated Statements of Earnings
for the three months ended June 30, 1996
and July 2, 1995

Consolidated Statements of Earnings for
the six months ended June 30, 1996 and
July 2, 1995.

Consolidated Statements of Cash Flows
for the six months ended June 30, 1996
and July 2, 1995

Notes to Consolidated Financial Statements

ITEM 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

ITEM 4. Submission of Matters to a Vote of
Security Holders

ITEM 6. Exhibits and Reports On Form 8-K

</TABLE>

<TABLE>
<CAPTION>
GRAND CASINOS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED) *
JUNE 30, 1996 DECEMBER 31, 1995
---------- ----------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 201,173 $ 334,772
Current installments of notes receivable 10,541 13,750
Accounts receivable 18,662 10,864
Deferred income taxes 6,507 6,747
Other current assets 9,725 13,736
---------- ----------
Total Current Assets 246,608 379,869
---------- ----------
Property and Equipment, Net 727,517 542,838
---------- ----------
Other Assets:
Cash and cash equivalents-restricted 7,746 6,902
Securities available for sale 38,575 14,200
Notes receivable, less current installments 38,793 43,594
Investments in and notes from unconsolidated affiliates 109,303 109,413
Debt issuance and deferred licensing costs-net 24,244 20,582
Other long-term assets 21,576 10,710
---------- ----------
Total Other Assets 240,237 205,401
---------- ----------
TOTAL ASSETS $1,214,362 $1,128,108
========== ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable-trade $ 8,687 $ 6,252
Accounts payable-construction 37,629 12,517
Current installments of long-term debt and capital leases 6,559 11,562
Accrued interest 3,882 4,030
Accrued payroll and related expenses 18,982 17,157
Other accrued expenses 25,517 16,314
---------- ----------
Total Current Liabilities 101,256 67,832
---------- ----------
Long-term Liabilities:
Long-term debt-less current installments 457,439 459,070
Deferred income taxes 75,343 75,106
---------- ----------
Total Long-Term Liabilities 532,782 534,176
---------- ----------
TOTAL LIABILITIES 634,038 602,008
---------- ----------

COMMITMENTS AND CONTINGENCIES
Shareholders' Equity:
Common stock, $.01 par value; authorized 100,000 shares;
issued and outstanding 41,607 and 40,988
at June 30, 1996 and December 31, 1995, respectively 416 410
Additional paid-in-capital 410,312 397,298
Net unrealized gains on securities available for sale 6,251 2,102
Retained earnings 163,345 126,290
---------- ----------
Total Shareholders' Equity 580,324 526,100
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,214,362 $1,128,108
========== ==========

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

*DERIVED FROM AUDITED CONSOLIDATED FINANCIAL STATEMENTS.

</TABLE>

<TABLE>
<CAPTION>
GRAND CASINOS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE)

(UNAUDITED)
THREE MONTHS ENDED
------------------------------
JUNE 30, 1996 JULY 2, 1995
--------- ---------
<S> <C> <C>
REVENUES:
Casino $ 80,297 $ 68,311
Hotel 6,622 2,650
Food and beverage 9,889 8,594
Management fee income 20,400 16,905
Retail and other income 2,965 1,924
--------- ---------
Gross Revenues 120,173 98,384
Less: Promotional allowances (7,196) (3,680)
--------- ---------
NET REVENUES 112,977 94,704
--------- ---------

COSTS AND EXPENSES:
Casino 26,407 21,037
Hotel 1,580 1,025
Food and beverage 4,963 4,087
Other operating expenses 2,658 1,840
Depreciation and amortization 6,832 5,976
Lease expense 4,141 3,620
Selling, general and administrative 29,138 25,585
--------- ---------
Total Costs and Expenses 75,719 63,170
--------- ---------

EARNINGS FROM OPERATIONS 37,258 31,534
--------- ---------

OTHER INCOME (EXPENSE):
Interest income 4,119 4,231
Interest expense (4,840) (7,561)
Gain on sale of investments 0 987
Equity in loss of unconsolidated affiliates (4,697) (120)
--------- ---------
Total other income (expense), net (5,418) (2,463)
--------- ---------

Earnings before income taxes and minority interest 31,840 29,071
Provision for income taxes 12,432 11,839
--------- ---------

Earnings before minority interest 19,408 17,232
Minority interest 0 1,033
--------- ---------
NET EARNINGS $ 19,408 $ 18,265
========= =========

EARNINGS PER COMMON SHARE $ 0.45 $ 0.52
========= =========

WEIGHTED AVERAGE COMMON SHARES AND COMMON
STOCK EQUIVALENTS OUTSTANDING 43,262 34,800
========= =========

</TABLE>

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
GRAND CASINOS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT EARNINGS PER SHARE)

(UNAUDITED)
SIX MONTHS ENDED
------------------------------
JUNE 30, 1996 JULY 2, 1995
--------- ---------
<S> <C> <C>
REVENUES:
Casino $ 154,600 $ 130,507
Hotel 12,039 2,650
Food and beverage 19,068 16,290
Management fee income 39,092 31,013
Retail and other income 5,335 2,988
--------- ---------
Gross Revenues 230,134 183,448
Less: Promotional allowances (13,320) (7,188)
--------- ---------
NET REVENUES 216,814 176,260
--------- ---------

COSTS AND EXPENSES:
Casino 50,686 40,650
Hotel 3,048 1,052
Food and beverage 9,521 7,682
Other operating expenses 5,575 2,956
Depreciation and amortization 13,339 10,381
Lease expense 8,173 6,897
Selling, general and administrative 61,848 50,133
--------- ---------
Total Costs and Expenses 152,190 119,751
--------- ---------

EARNINGS FROM OPERATIONS 64,624 56,509
--------- ---------

OTHER INCOME (EXPENSE):
Interest income 9,438 6,744
Interest expense (10,566) (12,212)
Gain on sale of investment (0) 1,621
Equity in loss of unconsolidated affiliates (3,839) (270)
--------- ---------
Total other (expense), net (4,967) (4,117)
--------- ---------

Earnings before income taxes and minority interest 59,657 52,392
Provision for income taxes 22,601 20,506
--------- ---------

Earnings before minority interest 37,056 31,886
Minority interest 0 1,456
--------- ---------
NET EARNINGS $ 37,056 $ 33,342
========= =========

EARNINGS PER COMMON SHARE $ 0.86 $ 0.98
========= =========

WEIGHTED AVERAGE COMMON SHARES AND COMMON
STOCK EQUIVALENTS OUTSTANDING 43,063 34,126
========= =========

</TABLE>

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

<TABLE>
<CAPTION>
GRAND CASINOS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

(UNAUDITED)
SIX MONTHS ENDED
-----------------------------
JUNE 30, 1996 JULY 2, 1995
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 37,056 $ 33,342
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 12,227 9,273
Amortization of original issue discount and debt issuance costs 1,112 2,853
Gain on sale of investment 0 (1,621)
Equity in loss of unconsolidated affiliate 3,839 270
Decrease in minority interest 0 (1,456)
Change in deferred income taxes 616 0
Changes in operating assets and liabilities:
Current assets (9,050) (2,651)
Accounts payable - trade 27,547 (126)
Accrued expenses and income taxes 15,997 16,665
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 89,344 56,549
--------- ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for notes receivable 505 (4,123)
Investment in and notes receivable from unconsolidated affiliates (4,364) (6,434)
Proceeds from repayment of notes receivable 7,304 10,116
(Increase) decrease in cash and cash equivalents-restricted (843) (181,128)
Payments for property and equipment (195,946) (59,117)
Purchases of securities available for sale (19,750) 0
Proceeds from sale of investment 0 1,562
Increase in other long-term assets (11,461) (532)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (224,555) (239,656)
--------- ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in accounts payable-construction 0 (1,562)
Proceeds from issuance of common stock-net 13,020 763
Debt issuance costs and deferred financing costs (4,774) (11,163)
Proceeds from issuance of long-term debt 0 220,500
Payments on long-term debt and capital lease obligations (6,634) (8,864)
--------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 1,612 199,674
--------- ---------

Net increase (decrease) in cash and cash equivalents (133,599) 16,567
Cash and cash equivalents - beginning of period 334,772 29,797
--------- ---------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 201,173 $ 46,364
========= =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of capitalized interest $ 10,714 $ 11,109
Income taxes $ 8,000 $ 11,367
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of common stock for debt issuance costs $ 0 $ 4,000
Increase in goodwill due to an increase in ownership of Stratosphere Corporation $ 0 $ 7,960
Increase in minority interest due to an increase in ownership of Stratosphere Corporation $ 0 $ 11,922

</TABLE>

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

GRAND CASINOS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
(UNAUDITED)

NOTE 1 UNAUDITED FINANCIAL STATEMENTS

Grand Casinos, Inc. and Subsidiaries, collectively the
Company, develop, construct, and manage land-based and
dockside casinos and related hotel and entertainment
facilities primarily in emerging gaming jurisdictions. The
Company owns and operates two dockside casinos on the
Mississippi Gulf Coast, one dockside casino in Tunica, County,
Mississippi, and manages two Indian-owned casinos in Minnesota
and two Indian-owned casinos in Louisiana. The Company
operates Grand Casino Tunica in Tunica County, Mississippi, a
dockside casino which opened on June 24, 1996. It is also an
owner of approximately 42% of Stratosphere Corporation
(Stratosphere), which constructed the Stratosphere project in
Las Vegas, Nevada, which opened on April 29, 1996. Related
hotel and entertainment facilities at the Grand Casino Tunica
and Stratosphere projects are currently under construction and
will open at various times.

The consolidated financial statements include the accounts of
Grand Casinos, Inc. and its wholly-owned and majority-owned
subsidiaries. The prior year's accompanying consolidated
financial statements include the accounts of Stratosphere from
October 2, 1994, the date on which the Company first owned
over 50% of the voting stock of Stratosphere, to December 20,
1995, the date on which the Company again owned less than 50%
of the voting stock of Stratosphere. Investments in
unconsolidated subsidiaries representing between 20% and 50%
of voting stock are accounted for on the equity method. All
material intercompany balances and transactions have been
eliminated in the consolidation.

The accompanying unaudited consolidated financial statements
have been prepared by the Company in accordance with generally
accepted accounting principles for interim financial
information, in accordance with the rules and regulations of
the Securities and Exchange Commission. Pursuant to such rules
and regulations, certain financial information and footnote
disclosures normally included in the consolidated financial
statements have been condensed or omitted. In the opinion of
management, all adjustments (consisting of normal recurring
adjustments) considered necessary for fair presentation have
been included. Operating results for the six months ended June
30, 1996, are not necessarily indicative of the results that
may be expected for the fiscal year ending December 29, 1996.

The consolidated financial statements should be read in
conjunction with the consolidated financial statements and
notes thereto included in the Company's annual report on Form
10-K for the fiscal year ended December 31, 1995.

NOTE 2 INCOME RECOGNITION

The Company recognizes revenues from its owned and operated
casinos in accordance with industry practice. Casino revenue
is the net win from gaming activities (the difference between
gaming wins and losses). Casino revenues are net of accruals
for anticipated payouts of progressive and certain other slot
machine jackpots. Revenues include the retail value of food
and beverage and other items which are provided to customers
on a complimentary basis. A corresponding amount is deducted
as promotional allowances. The costs of such complimentaries
are included in casino costs and expenses in the accompanying
Consolidated Statements of Earnings. Revenue from the
management of Indian-owned casino gaming facilities is
recognized when earned according to the terms of the
management contracts.

NOTE 3 INVENTORIES

Inventories, consisting of food and beverage, retail and
operating supplies, are stated at the lower of cost or market.
Cost is determined using the first in, first out method.

NOTE 4 PREOPENING EXPENSES

Preopening expenses incurred prior to opening of Company-owned
facilities are capitalized and amortized to expense using the
straight-line method over the six months following the opening
of the respective facilities. These costs include payroll,
training, and marketing costs incurred prior to commencement
of operations. Depreciation and amortization for the six
months ended June 30, 1996 and July 2, 1995 includes
approximately $.3 million and $.3 million of preopening
amortization expense, respectively.

NOTE 5 EARNINGS PER COMMON SHARE

Earnings per common share was determined by dividing net
earnings by the weighted average number of common shares and
common stock equivalents outstanding during the six and three
months ended June 30, 1996 and July 2, 1995.

NOTE 6 PROPERTY AND EQUIPMENT

Property and equipment are stated at cost, except in the case
of capitalized lease assets, which are stated at the lower of
the present value of the future minimum lease payments or fair
market value at the inception of the lease. Expenditures for
additions, renewals and improvements are capitalized. Costs of
repairs and maintenance are expensed when incurred.
Depreciation of property and equipment is computed using the
straight-line method over useful lives of three to thirty
years. Leasehold acquisition costs are amortized over the
shorter of the estimated useful life or the term of the
respective leases once the assets are placed in service.

NOTE 7 AMORTIZATION OF ORIGINAL ISSUE DISCOUNT AND DEBT
ISSUANCE COSTS

Original issue discounts are amortized using the effective
interest method, over the life of the related indebtedness.
Debt issuance costs are amortized using the straight-line and
effective interest methods, over the life of the related
indebtedness.

NOTE 8 INTEREST COSTS

Interest is capitalized in connection with the construction of
major facilities. The capitalized interest is recorded as part
of the asset to which it relates and is amortized over the
asset's estimated useful life once the assets are placed in
service. For the six months ended June 30, 1996 and July 2,
1995, approximately $13.1 million and $8.1 million,
respectively, of interest cost was capitalized. For the three
months ended June 30, 1996 and July 2, 1995, approximately
$6.9 million and $4.9 million, respectively, of interest cost
was capitalized.

NOTE 9 NOTES RECEIVABLE

Notes receivable consist of the following (in thousands):

<TABLE>
<CAPTION>
June 30, 1996 Dec. 31, 1995
------------- -------------
<S> <C> <C>
Notes from the Coushatta Tribe with interest at a defined
reference rate plus 1% (not to exceed 16%), receivable in 84
monthly installments through January 2002 $25,247 $26,903

Notes from the Tunica-Biloxi Tribe with interest at a defined
reference rate plus 1% (not to exceed 16%), receivable in 84
monthly installments through June
2001 13,570 14,529

Notes from the Mille Lacs Band with interest at a defined
reference rate plus 1% (not to exceed 16%), receivable in
varying installments through October 1997 2,240 3,071

Notes from the Mille Lacs Band, with
interest at 9.75%, receivable in 60 monthly
installments through December 1997 1,870 2,435

Note from Casino Magic Corp. related to
sale of assets with interest at 12% per annum,
principal and interest due May 26, 1996 0 2,773

Other 6,407 7,633
----- -----
$49,334 $57,344
Less current installments of notes receivable 10,541 13,750
------ ------
Notes receivable-less current installments $38,793 $43,594
======= =======

</TABLE>

NOTE 10 LONG-TERM DEBT

On November 30, 1995, the Company completed its public
offering of $450.0 million of eight year 10.125% First
Mortgage Notes due December 1, 2003, realizing net cash
proceeds of approximately $434.5 million after underwriting
and other related offering costs. The Company used $132.6
million of net proceeds to extinguish $115.0 million aggregate
principal amount of 12.5% First Mortgage Notes due on February
1, 2000 (including accrued interest of $4.8 million and $12.8
million related to a tender offer premium and expenses), and
$25.3 million to retire all outstanding principal and interest
due under a credit facility with First Interstate Bank of
Nevada, N.A. (F.I.B. Note). The balance of net proceeds of
approximately $275.7 million is to be used to develop and open
Grand Casino Tunica and to construct additional hotel rooms
and entertainment and gaming-related amenities at Grand Casino
Biloxi and Grand Casino Gulfport.

The 10.125% First Mortgage Notes are secured by substantially
all the assets of Grand Casino Biloxi and Grand Casino
Gulfport, Grand Casino Tunica assets included in Phase 1
development, capital stock owned by the Company in
Stratosphere, and certain existing notes receivable due the
Company from Tribes. The notes require semi-annual payments of
interest only on June 1 and December 1 of each year commencing
June 1, 1996, until December 1, 2003, at which time the entire
principal plus accrued interest is due and payable. The notes
may be redeemed at the Company's option, in whole or in part,
anytime after December 1, 1999, at a premium, declining
ratably thereafter to par value on December 1, 2002, to
maturity.

On May 10, 1996, the Company completed a $120 million Senior
Secured Term Loan through BankAmerica Leasing and Capital
Group. The five-year Senior Secured Term Loan Facility, with
varying interest rates ranging from 1.75% to 2.50% over the
LIBO Rate, will be used for the continued development of the
Company's Grand Casino Tunica project, located in northern
Mississippi, just outside of Memphis,Tennessee. Approximately
$90 million of the loan will be used for furniture, fixtures
and equipment for the 340,000 square foot casino complex. The
balance of approximately $30 million will be used to construct
a 600-room hotel at Grand Casino Tunica. As of July 31, 1996
and June 30, 1996, $18.4 million and $0 million had been
advanced under the Senior Secured Term Loan Facility,
respectively.

NOTE 11 COMMITMENTS AND CONTINGENCIES

STRATOSPHERE CORPORATION

On March 9, 1995, the Company converted $33.5 million of
outstanding advances to Stratosphere into an aggregate 8.25
million shares of common stock. The Company has agreed to
provide credit enhancements, subject to certain limitations,
to guarantee completion of construction of the project to a
limit of $50.0 million (the "Completion Guarantee") and to
purchase up to $20.0 million of additional equity in
Stratosphere during each of the first three years (up to $60.0
million total) Stratosphere is operating to the extent
Stratosphere's consolidated cash flow does not reach $50.0
million in each of such years. Stratosphere has notified the
Company that Stratosphere believes that the Company will be
obligated to loan Stratosphere $48.5 million pursuant to the
Completion Guarantee.

Stratosphere has announced that its cash on hand and projected
internally generated funds will not be sufficient to fund both
Stratosphere's cash requirements for existing operations,
including debt service, and Stratosphere's currently
anticipated capital requirements to complete Phase II of the
Stratosphere project. Stratosphere is exploring a variety of
means to obtain additional financing, including, to the extent
permitted under Stratosphere's First Mortgage Note Indenture,
debt and equity financing. There can be no assurance that
additional financing will be available, or that if available,
will be on terms favorable to Stratosphere. Stratosphere
currently plans to continue construction of Phase II. In the
event Stratosphere does not obtain additional financing in a
timely manner, Stratosphere will be required to restructure
its existing indebtedness. If Stratosphere cannot restructure
its existing indebtedness there will be serious doubt as to
whether Stratosphere will be able to continue as a going
concern. If Stratosphere does not continue as a going concern,
the Company would be required to write-off all or a
substantial portion of the Company's investment in
Stratosphere which would have a material adverse effect on the
Company's results of operations.

LOAN GUARANTY AGREEMENTS

The Company has guaranteed a loan and security agreement
entered into by the Tunica-Biloxi Tribe of Louisiana for $14.1
million for the purpose of financing casino equipment. The
agreement extends through 1998, and as of June 30, 1996, the
amount outstanding was $8.5 million. In addition, the Company
has guaranteed loan and security agreements entered into by
the Coushatta Tribe of Louisiana for $22.3 million for the
purpose of financing casino equipment. The agreements are for
three years and have various maturity dates through 1998, and
as of June 30, 1996, the amounts outstanding were $14.7
million.

The Company has entered into a master hotel development
agreement with Casino Resource Corporation for the hotel
adjacent to Grand Casino Hinckley. The Company has guaranteed
the mortgage related to the hotel in the amount of $2.8
million as of June 30, 1996.

OTHER

The Company, in connection with the development and
construction of Grand Casino Tunica in Tunica County,
Mississippi, has entered into a fixed price construction
contract in the amount of $212.9 million. As of June 30, 1996,
the balance remaining to complete under the contract is
approximately $98.3 million.

The Company is a defendant in various pending litigation. In
management's opinion, the ultimate outcome of such litigation
will not have a material adverse effect on the results of
operations or the financial position of the Company.

GRAND CASINOS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(UNAUDITED)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The Company develops, constructs and manages land-based and
dockside casinos primarily in emerging gaming jurisdictions.
The Company's revenues are derived from the Company-owned
casinos of Grand Casino Biloxi, Grand Casino Gulfport, and
Grand Casino Tunica, and from management fee income from Grand
Casino Mille Lacs, Grand Casino Hinckley, Grand Casino
Avoyelles, and Grand Casino Coushatta.

Pursuant to the Mille Lacs, Hinckley, Avoyelles, and Coushatta
management contracts, the Company receives a fee equal to 40%
of the net distributable profits generated by Grand Casino
Mille Lacs, Grand Casino Hinckley, Grand Casino Avoyelles, and
Grand Casino Coushatta.

The Company commenced operations in August 1990, and opened
its Company-owned casinos, Grand Casino Gulfport, Grand Casino
Biloxi and Grand Casino Tunica in May 1993, January 1994 and
June 1996, respectively. Therefore, the Company's limited
operating history may not be indicative of the Company's
future performance. In addition, a comparison of results from
year to year may not be meaningful due to the opening of new
facilities during such years. The Company's growth strategy
contemplates expanding existing operations and establishing
additional gaming operations. The successful implementation of
this growth strategy is contingent upon the satisfaction of
various conditions and the occurrence of certain events,
including obtaining governmental approvals and increased
competition, many of which are beyond the control of the
Company. The following discussion and analysis should be read
in conjunction with the consolidated financial statements and
notes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 1995.

The casino operations of Grand Casino Tunica opened to the
public on June 24, 1996. Accordingly, only five days of Grand
Casino Tunica's operations are included in the results of
operations for the three and six month periods ended June 30,
1996. The Company's long term plan was, and continues to be,
to develop Grand Casino Tunica into a destination resort with
the development of hotels and other amenities over the next
several months. An 188 room hotel is scheduled to open in
September 1996 and 1,200 additional rooms are currently under
development. Until such time that such hotels and other
amenities are fully operational, Grand Casino Tunica will be
dependent on the highly competitive day trip market. Although
Grand Casino Tunica has only been open for a short period of
time, gaming revenue for the first seven weeks of operation of
Grand Casino Tunica was approximately $19.0 million, which is
below expectations. The average weekly gaming revenue for the
four week period ended August 11, 1996 was approximately $2.2
million. The Company believes that the addition of hotels and
other amenities will improve Grand Casino Tunica's
performance. However, there can be no assurance that results
will improve as such additional amenities are added.

Revenues from owned and operated casinos are calculated in
accordance with generally accepted accounting principles and
presented in a manner consistent with industry practice. Net
distributable profits from Grand Casino Mille Lacs, Grand
Casino Hinckley, Grand Casino Avoyelles, and Grand Casino
Coushatta are computed using a modified cash basis of
accounting in accordance with the management contracts. The
effect of the use of the modified cash basis of accounting is
to accelerate the write-off of capital equipment and leased
assets, which thereby impacts the timing of net distributable
profits.

RESULTS OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO THE SIX MONTHS
ENDED JULY 2, 1995

Earnings Per Common Share and Net Earnings

Earnings per common share for the six months ended June 30,
1996 were $.86 versus $.98 for the prior year's comparable
period based upon weighted average common shares outstanding
of 43.1 million and 34.1 million for the six month periods
ended June 30, 1996 and July 2, 1995, respectively. The
increase in the weighted average common shares outstanding was
primarily a result of the acquisition with Gaming Corporation
of America and Grand Gaming Corp. on November 30, 1995 in
which 7.3 million shares of common stock were issued.

Net earnings increased $3.7 million to $37.1 million for the
six months ended June 30, 1996 compared to the prior year
principally due to an increase in revenues in 1996 for Grand
Casino Biloxi, Grand Casino Gulfport and management fee
income. Included in Net earnings is the Company's 42% share of
Stratosphere Corporation's net loss. The Company's share was
$3.8 million or $.09 loss per Common Share.

Net Revenues

Net revenues for the Company increased $40.6 million for the
six months ended June 30, 1996 compared to the same period in
the prior year. The increase in net revenues is primarily due
to increased revenues at Company owned facilities Grand Casino
Biloxi, and Grand Casino Gulfport in the amount of $32.8
million and increased management fee income from Indian-owned
casinos in the amount of $7.2 million. Grand Casino Tunica
opened on June 24, 1996. Accordingly, only five days of Grand
Casino Tunica's operations are included in the results for the
six months ended June 30, 1996.

Grand Casino Biloxi, Grand Casino Gulfport and Grand Casino
Tunica generated $154.6 million in gross casino revenue and
$36.4 million in gross hotel, food, beverage, retail, and
entertainment revenue during the six months ended June 30,
1996. During the six months ended July 2, 1995, these
properties generated $130.5 million in gross casino revenue
and $21.9 million in gross food, beverage and retail revenue.
The increase in gross revenue is primarily a result of hotels
opened at both Grand Casino Biloxi and Grand Casino Gulfport
for the entire six months ended June 30, 1996. The Biloxi
hotel opened in April 1995. The Gulfport hotel opened in
September 1995.

Costs and Expenses

Total costs and expenses increased $32.4 million from $119.8
million for the six months ended July 2, 1995 to $152.2
million for the six month period ended June 30, 1996.

Casino expenses were $50.7 million for the six month period
June 30, 1996 compared to $40.7 million for the comparable
period. This increase is principally related to the increase
of $24.1 million in casino revenues. As a result of additional
overnight guests at Biloxi and Gulfport, additional casino
expenses in the form of complimentary rooms and entertainment
have increased casino expenses. Food and beverage expenses
increased $1.8 million to $9.5 million for the six month
period ended June 30, 1996.

Increases in selling, general and administrative expenses in
the amount of $11.7 million are primarily attributable to
increases in marketing expenses in the amount of $7.1 million
for the Biloxi and Gulfport properties as a result of air
charter programs and additional promotions and increases in
indirect expenses associated with the Biloxi and Gulfport
hotels as well as the opening of Grand Casino Tunica in the
aggregate amount of $3.1 million.

Other

Interest income increased by $2.7 million to $9.4 million for
the six months ended June 30, 1996. This increase is primarily
attributable to interest income earned on the proceeds of the
Company's $450.0 million First Mortgage Note offering that
closed on November 30, 1995. In addition, interest expense
decreased by $1.6 million to $10.6 million for the six months
ended June 30, 1996 compared to $12.2 million for the six
months ended July 2, 1995, as a result of additional
capitalized interest in the amount of $5.0 million. The
capitalized interest relating to Grand Casino Tunica during
the six months ended June 30, 1996 was $9.3 million and
capitalized interest for Stratosphere Corporation, which was
included in consolidated results until December 1995, for the
six months ended July 2, 1995 was $3.8 million.

THREE MONTHS ENDED JUNE 30, 1996 COMPARED TO THE THREE MONTHS
ENDED JULY 2, 1995

Earnings Per Common Share and Net Earnings

Earnings per common share for the three months ended June 30,
1996 were $.45 versus $.52 for the prior year's comparable
period based upon weighted average common shares outstanding
of 43.3 million and 34.8 million for the three month periods
ended June 30, 1996 and July 2, 1995, respectively. The
increase in the weighted average common shares outstanding was
primarily a result of the acquisition with Gaming Corporation
of America and Grand Gaming Corp. on November 30, 1995 in
which 7.3 million shares of common stock were issued.

Net earnings increased $1.1 million to $19.4 million for the
three months ended June 30, 1996 compared to the prior year
principally due to an increase in revenues in 1996 for Grand
Casino Biloxi, Grand Casino Gulfport and management fee
income. Included in net earnings is the Company's 42% share of
Stratosphere Corporation's net loss. The Company's share was
$4.7 million or $.11 loss per common share.

Net Revenues

Net revenues for the Company increased $18.3 million for the
three months ended June 30, 1996 compared to the same period
in the prior year. The increase in net revenues is primarily
due to increased revenues at Company owned facilities Grand
Casino Biloxi, Grand Casino Gulfport and Grand Casino Tunica
and increased management fee income from Indian owned casinos.
Grand Casino Biloxi, Gulfport and Tunica generated net
revenues of $92.6 million during the three months ended June
30, 1996, an increase of $15.1 million compared to the
comparable period in the prior year. Management fee income
from Indian owned casinos increased by $3.0 million during the
three month period ended June 30, 1996 compared to the
comparable period. Only five days of Grand Casino Tunica's
results were included in the three months ended June 30, 1996.

Grand Casino Biloxi, Grand Casino Gulfport and Grand Casino
Tunica generated $80.3 million in gross casino revenue and
$19.5 million in gross hotel, food, beverage, retail and
entertainment revenue during the three months ended June 30,
1996. During the three months ended July 2, 1995, Grand Casino
Biloxi and Grand Casino Gulfport generated $68.3 million in
gross casino revenue and $13.2 million in gross food, beverage
and retail revenue. The increase in gross revenue is primarily
a result of hotels opened at both Grand Casino Biloxi and
Grand Casino Gulfport for the entire three months ended June
30, 1996, whereas, only the Biloxi Hotel was open during the
three months ended July 2, 1995. In addition, increase in
gross revenue resulted from marketing programs such as air
charter.

Costs and Expenses

Total costs and expenses increased $12.5 million from $63.2
million for the three months ended July 2, 1995 to $75.7
million for the three month period ended June 30, 1996.

Casino expenses were $26.4 million for the three month period
ended June 30, 1996 compared to $21.0 million for the
comparable period, principally due to the increase of $12.0
million in casino revenues. As a result of additional
overnight guests at Biloxi and Gulfport, additional casino
expenses in the form of complimentary rooms and entertainment
have increased casino expenses. Food and beverage expenses
increased $.9 million to $5.0 million for the three month
period ended June 30, 1996. Increases in selling, general and
administrative expenses in the amount of $3.6 million are
primarily attributable to increases in marketing expenses in
the amount of $3.2 million for the Biloxi and Gulfport
properties, increases in indirect expenses associated with the
Gulfport Hotel and Grand Casino Tunica in the amount of $1.4
million which were offset by a decrease in corporate expenses.

Other

Interest expense decreased by $2.7 million to $4.8 million for
the three months ended June 30, 1996 compared to $7.6 million
for the three months ended July 2, 1995, as a result of
capitalized interest on the Grand Casino Tunica project in the
amount of $6.0 million during the three months ended June 30,
1996. This was offset by increased interest expense related to
the increased principal amount of indebtedness incurred in
November 1995.

CAPITAL RESOURCES AND LIQUIDITY

As of June 30, 1996, the Company had cash and cash equivalents
of $201.2 million. For the six months ended June 30, 1996,
capital expenditures were $195.9 million compared to $59.1
million for the comparable period in the prior year. The
majority of expenditures, $179.0 million for the six months
ended June 30, 1996, related to construction of Grand Casino
Tunica. Based upon current construction plans, the Company
expects that development, construction, equipping and
furnishing Grand Casino Tunica will require an aggregate of
approximately $470 million, of which $294.2 million was
expended as of June 30, 1996.

The Company secured $120.0 million in Senior Secured Term Loan
Facility financing for the Grand Casino Tunica project. Based
on the current construction plans, the continued development
of Grand Casino Tunica will require $176 million of capital,
of which $120 million is anticipated to be funded through the
Senior Secured Term Loan Facility for the Grand Casino Tunica
project. These estimates are based upon current construction
plans, which are subject to change, and the scope and cost of
each of the Company's projects may vary significantly from
that which is currently anticipated.

The Company, in conjunction with the closing of Stratosphere
Corporation's First Mortgage Notes, agreed to provide credit
enhancements, subject to certain limitations, to guarantee
completion of construction of the project up to a limit of
$50.0 million and to purchase up to $20.0 million of
additional equity in Stratosphere Corporation during each of
the first three years (up to $60.0 million total) after
Stratosphere Corporation commences operations to the extent
Stratosphere's consolidated cash flow does not reach $50.0
million in each of such years.

Stratosphere has notified the Company that Stratosphere
believes that the Company will be obligated to loan
Stratosphere $48.5 million pursuant to the Completion
Guarantee. Based on Stratosphere's net loss reported for the
second quarter of 1996 in the amount of $11.1 million and the
factors discussed below, there can be no assurance that
Stratosphere will generate sufficient cash flow to service
this debt. Pursuant to the terms of the Completion Guarantee,
Stratosphere is permitted to defer the payment of interest and
principal on such indebtedness.

The Company is not obligated to provide funds to Stratosphere
other than as noted above.

Pursuant to the Company's covenants related to the $450.0
million First Mortgage Notes, the Company is restricted from
paying cash dividends and from transferring funds from certain
subsidiaries to the Company. Because of such restrictions and
to provide funds for the growth of the Company, no cash
dividends are expected to be paid on common shares in the
foreseeable future.

PRIVATE SECURITIES LITIGATION REFORM ACT

The Private Securities Litigation Reform Act of 1995 provides
a "safe harbor" for forward-looking statements. Certain
information included in this Form 10-Q and other materials
filed or to be filed by the Company with the Securities and
Exchange Commission (as well as information included in oral
statements or other written statements made or to be made by
the Company) contains statements that are forward-looking,
such as statements relating to plans for future expansion and
other busines development activities as well as other capital
spending, financing sources and the effects of regulation
(including gaming and tax regulation) and competition. Such
forward-looking information involves important risks and
uncertainties that could significantly affect anticipated
results in the future and, accordingly, such results may
differ from those expressed in any forward-looking statements
made by or on behalf of the Company. These risks and
uncertainties include, but are not limited to, those relating
to development and construction activities, dependence on
existing management, leverage and debt service (including
sensitivity to fluctuations in interest rates), domestic or
global economic conditions, changes in federal or state tax
laws or the administration of such laws and changes in gaming
laws or regulations (including the legalization of gaming in
certain jurisdictions).

GRAND CASINOS, INC. AND SUBSIDIARIES
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS

On August 6, 1996, a complaint was filed in the United States District
Court for the District of Nevada (Michael Caesar, et al. v.
Stratosphere Corporation, et al.) against the Company, Lyle A. Berman
(an officer and director of the Company and Stratosphere Corporation
("Stratosphere"), Robert E. Stupak (a former officer and director of
Stratosphere), Bob Stupak Enterprises, David R. Wirshing (a former
officer and director of Stratosphere), Thomas A. Lettero (an officer of
Stratosphere), Andrew S. Blumen (an officer and director of
Stratosphere), Thomas G. Bell (a director of Stratosphere) and
Stratosphere. The complaint purports to seek relief on behalf of a
class of plaintiffs who purchased Stratosphere's common stock during
the period from December 19, 1995 through July 22, 1996, inclusive.
The complaint alleges that the defendants made misrepresentations and
engaged in other wrongdoing. The Company believes that the claims made
in the complaint are without merit. The Company plans to vigorously
defend such claims.

See the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 and the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended March 31, 1996 for information regarding other
pending legal proceedings.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

(a) The Annual Meeting of Shareholders was held on May 6, 1996.

(b) Matters voted upon:

(1) Directors elected at meeting:

Affirmative Negative
Votes Votes Abstentions
----- ----- -----------
Lyle Berman 36,248,061 124,823 5,204,981
Patrick R. Cruzen 36,247,990 124,894 5,204,981
Morris Goldfarb 36,248,781 124,103 5,204,981
Ronald Kramer 36,245,671 127,213 5,204,981
David L. Rogers 36,248,781 124,103 5,204,981
Neil I. Sell 36,247,856 125,028 5,204,981
Stanley M. Taube 36,248,031 124,853 5,204,981
Joel N. Waller 36,248,701 124,183 5,204,981

(2) To approve and adopt the Company's 1995 Director
Stock Option Plan for the issuance of up to a maximum
of 200,000 shares.

Affirmative Negative
Votes Votes Abstentions
----- ----- -----------
25,593,203 5,314,445 10,670,217

(3) Proposal to amend the Company's 1991 Stock Option and
Compensation Plan to increase the number of shares of
Common Stock reserved for issuance thereunder by
2,575,000 shares.

Affirmative Negative
Votes Votes Abstentions
----- ----- -----------
21,556,108 9,004,765 11,016,992

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)

Exhibit
No.

10.1 Participation Agreement dated as of May 10, 1996
among BL Development Corp., Grand Casinos, Inc.,
Hancock Bank, Certain Financial Institutions, Bank of
Scotland, First Interstate Bank of Nevada and Societe
Generale, Credit Lyonnais, Los Angeles Branch and BA
Leasing & Capital Corporation

10.2 Lease Agreement and Deed of Trust dated as of May 10,
1996 between Hancock Bank and BL Development Corp.

10.3 Loan Agreement dated as of May 10, 1996 among Hancock
Bank; BA Leasing & Capital Corporation; Bank of
Scotland, First Interstate Bank of Nevada and Societe
Generale; and Credit Lyonnais, Los Angeles Branch

10.4 Trust Agreement dated as of May 10, 1996 between BL
Development Corp., as Guarantor, and Hancock Bank, as
Trustee

10.5 Security Agreement and Assignment of Rents and Leases
dated as of May 10, 1996 between Hancock Bank and BA
Leasing & Capital Corporation

10.6 Construction Agency Agreement dated as of May 10,
1996 between Hancock Bank and BL Development Corp.

10.7 Guaranty dated as of May 10, 1996 of Grand Casinos,
Inc. and its Subsidiaries in favor of The
Beneficiaries Named

10.8 Deed of Trust, Assignment of Rents and Leases and
Security Agreement dated as of May 10, 1996 by and
among BL Development Corp., Hancock Bank, James R.
McIlwain and BA Leasing & Capital Corporation (Resort
Hotel)

10.9 Deed of Trust, Assignment of Rents and Leases and
Security Agreement dated as of May 10, 1996 by and
among BL Development Corp., Hancock Bank,, James R.
McIlwain and BA Leasing & Capital Corporation (Barge
Equipment)

10.10 Third Preferred Mortgage of BL Development Corp. in
favor of First Security Bank of Utah, National
Association, as Trustee and Mortgagee for BA Leasing
& Capital Corporation, as Agent

10.11 Master Vessel Trust Agreement dated as of May 10,
1996 between BA Leasing & Capital Corporation,
"Agent" and First Security Bank of Utah, N.A.,
"Vessell Trustee"

10.12 Ground Lease dated as of May 10, 1996 by and between
BL Development Corp. and Hancock Bank

10.13 Letter Agreement dated May 10, 1996 (Landlord Waiver
and Consent)

10.14 Intercreditor Agreement dated as of May 10, 1996
among American Bank National Association, First
Security Bank of Utah, Grand Casinos, Inc., GCA
Acquisition Subsidiary, Inc., and BA Leasing &
Capital Corporation, and acknowledged and accepted by
each of Grand Casinos Resorts, Inc., Grand Casinos of
Mississippi, Inc. - Gulfport, Grand Casinos of
Mississippi, Inc. - Biloxi, Grand Casinos Biloxi
Theater, Inc., GCI Biloxi Hotel Acquisition
Corporation, GCI Gulfport Hotel Acquisition
Corporation, Mille Lacs Gaming Corporation, Grand
Casinos of Louisiana, Inc. - Tunica-Biloxi, Grand
Casinos of Louisiana, Inc. - Coushatta, GCA, and BL
Development Corp.

27 Financial Data Schedule

(b) A Form 8-K was filed during the fiscal quarter ended June 30,
1996 on June 6, 1996 reporting under Item 5.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Dated: August 13, 1996 GRAND CASINOS, INC.
-------------------
Registrant

By: / S /PATRICK R. CRUZEN
Patrick R. Cruzen, President

/ S / TIMOTHY J. COPE
Timothy J. Cope, Chief Financial Officer
EXHIBIT INDEX
GRAND CASINOS, INC.

EXHIBIT
NO. PAGE
- --------- ----

10.1 Participation Agreement dated as of May 10, 1996 among BL
Development Corp., Grand Casinos, Inc., Hancock Bank, The
Persons Listed on Schedule II, Bank of Scotland, First
Interstate Bank of Nevada and Societe Generale, Credit
Lyonnais, Los Angeles Branch, and BA Leasing & Capital
Corporation ..............................

10.2 Lease Agreement and Deed of Trust dated as of May 10, 1996
between Hancock Bank and BL Development
Corp.......................................

10.3 Loan Agreement dated as of May 10, 1996 among Hancock Bank;
BA Leasing & Capital Corporation; Bank of Scotland, First
Interstate Bank of Nevada and Societe Generale; and Credit
Lyonnais, Los Angeles Branch

10.4 Trust Agreement dated as of May 10, 1996 between BL
Development Corp., as Guarantor, and Hancock Bank, as Trustee
.....................................................................

10.5 Security Agreement and Assignment of Rents and Leases dated
as of May 10, 1996 between Hancock Bank and BA Leasing &
Capital Corporation
.......................................................................

10.6 Construction Agency Agreement dated as of May 10, 1996
between Hancock Bank and BL Development Corp.
.............................................

10.7 Guaranty dated as of May 10, 1996 of Grand Casinos, Inc. and
its Subsidiaries in favor of The Beneficiaries Named
..................................

10.8 Deed of Trust, Assignment of Rents and Leases and Security
Agreement dated as of May 10, 1996 by and among BL
Development Corp., Hancock Bank, James R. McIlwain and BA
Leasing & Capital Corporation (Resort Hotel)
......................................

10.9 Deed of Trust, Assignment of Rents and Leases and Security
Agreement dated as of May 10, 1996 by and among BL
Development Corp., Hancock Bank, James R. McIlwain and BA
Leasing & Capital Corporation (Barge Equipment)
..................................

10.10 Third Preferred Mortgage by BL Development Corp. in favor of
First Security Bank of Utah, National Association, as Trustee
and Mortgagee for BA Leasing & Capital Corporation, as Agent
..........................

10.11 Master Vessel Trust Agreement dated as of May 10, 1996
between BA Leasing & Capital Corporation, "Agent" and First
Security Bank of Utah, N.A., "Vessel Trustee"
..............................................

10.12 Ground Lease dated as of May 10,1 996 by and between BL
Development Corp. and Hancock Bank
................................................

10.13 Letter Agreement dated May 10, 1996 (Landlord Waiver and
Consent) ........................................

10.14 Intercreditor Agreement dated as of May 10, 1996 among
American Bank National Association First Security Bank of
Utah, Grand Casinos, Inc., GCA Acquisition Subsidiary, Inc.,
and BA Leasing & Capital Corporation, and acknowledged and
accepted by each of Grand Casinos Resorts, Inc., Grand
Casinos of Mississippi, Inc. - Gulfport, Grand Casinos of
Mississippi, Inc. - Biloxi, Grand Casinos Biloxi Theater,
Inc., GCI Biloxi Hotel Acquisition Corporation, GCI Gulfport
Hotel Acquisition Corporation, Mille Lacs Gaming Corporation,
Grand Casinos of Louisiana, Inc. - Tunica - Biloxi, Grand
Casinos of Louisiana, Inc. - Coushatta, GCA, and BL
Development Corp. ...................................

PARTICIPATION AGREEMENT

dated as of May 10, 1996

among

BL DEVELOPMENT CORP.,
as Lessee and Construction Agent,

GRAND CASINOS, INC.
AND ITS SUBSIDIARIES LISTED ON SCHEDULE I,
as Guarantors,

HANCOCK BANK,
not in its individual capacity except as
expressly stated herein, but solely
as Lessor, Borrower and Trustee

THE PERSONS LISTED ON SCHEDULE II,
as Lenders,

BANK OF SCOTLAND,
FIRST INTERSTATE BANK OF NEVADA, and
SOCIETE GENERALE,
as Co-Agents,

CREDIT LYONNAIS, LOS ANGELES BRANCH,
as Lead Manager

and

BA LEASING & CAPITAL CORPORATION,
as Arranger and Agent

---------------------------------------------

Construction and Acquisition Financing
For a Hotel and Equipment Associated with
Grand Casino Tunica in Tunica County, Mississippi

TABLE OF CONTENTS

SECTION PAGE

ARTICLE I

DEFINITIONS

ARTICLE II

EFFECTIVENESS; ACQUISITION AND LEASE; GENERAL PROVISIONS

2.1. Effectiveness of Agreement.................................... 2
2.2. Advances...................................................... 5
2.3. Notes......................................................... 8
2.4. Procedures for Advances; Use of Proceeds...................... 8
2.5. Postponement of Advance.......................................10
2.6. The Account...................................................10
2.7. Obligations Several...........................................11
2.8. Timing of Advances to the Trustee and Payments to
the Lenders...............................................11
2.9. Lenders' Instructions to Agent................................12
2.10. Computations..................................................12
2.11. Commitment Fee................................................13
2.12. Fees..........................................................13
2.13. Legal and Tax Representation..................................13
2.14. Replacement of Equipment......................................13

ARTICLE III

CONDITIONS TO
ADVANCES AND COMPLETION

3.1. Initial Advance Date..........................................14
3.2. Conditions Precedent to All Advances..........................15
3.3. Conditions to the Initial Advance for Hotel Costs.............17
3.4. Conditions to all Advances for Hotel Costs....................21
3.5. Deliveries with Respect to the Advances for Hotel
Costs After a Default.....................................22
3.6. Conditions to Advances for Equipment Costs....................24
3.7. Conditions to Completion Date of Hotel........................26
3.8. Amortization Schedule.........................................27

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

4.1. Representations and Warranties of Lessee,
Construction Agent and Guarantors.........................28
4.2. Representations and Warranties of Each Lender.................38
4.3. Representations and Warranties of the Trustee.................40
4.4. Representations and Warranties of the Agent...................42

ARTICLE V

COVENANTS OF LESSEE, CONSTRUCTION AGENT AND PARENT

5.1. Further Assurances............................................43
5.2. Consolidation, Merger, Sale, etc..............................44
5.3. Corporate Existence...........................................47
5.4. Ownership of Lessee...........................................47
5.5. Liens.........................................................48
5.6. Financial Covenant Compliance Certificates....................48
5.7. Investigation by Governmental Authorities.....................49
5.8. Books and Records.............................................50
5.9. Payment of Taxes, Etc.........................................50
5.10. Inspection....................................................50
5.11. Maintenance of Property, etc..................................51
5.12. Maintenance of Insurance......................................51
5.13. Change of Name or Principal Place of Business.................51
5.14. Financial and Other Information...............................51
5.15. Securities....................................................54
5.16. Financial Covenants...........................................54
5.17. Ship Mortgage.................................................55
5.18. Searches and Estoppel Certificates............................56
5.19. Amendment of Levee Board Lease................................56
5.20. Changes to Contracts for a System.............................56
5.21. Compliance with Laws..........................................57
5.22. No Vessel Redocumentation.....................................57

ARTICLE VI

COVENANTS OF TRUSTEE, AGENTS AND LENDERS

6.1. Covenants of Trustee, Agents and the Lenders..................57
6.2. Restrictions On and Effect of Transfer........................60
6.3. Participations................................................62
6.4. Required Transfers............................................63

ARTICLE VII

GENERAL INDEMNITY

7.1. General Indemnification.......................................64
7.2. Environmental Indemnity.......................................67

ARTICLE VIII

GENERAL TAX INDEMNITY

8.1. General Tax Indemnity.........................................69
8.2. Exclusions from General Tax Indemnity.........................70
8.3. Contests......................................................71
8.4. Payments......................................................73
8.5. Reports.......................................................73
8.6. Withholding Tax Exemption.....................................74

ARTICLE IX

MISCELLANEOUS

9.1. Survival of Agreements........................................74
9.2. No Broker, etc................................................74
9.3. Notices.......................................................75
9.4. Counterparts..................................................75
9.5. Amendments....................................................75
9.6. Headings, etc.................................................76
9.7. Governing Law.................................................76
9.8. Transaction Costs.............................................76
9.9. Severability..................................................77
9.10. Successors and Assigns........................................77
9.11. Final Agreement...............................................77
9.12. No Third-Party Beneficiaries..................................77
9.13. Release of Lien; Termination of Ground Lease..................78
9.14. Reproduction of Documents.....................................80
9.15. Submission to Jurisdiction....................................80
9.16. Jury Trial....................................................81
9.17. Payments Set Aside............................................81
9.18. Trust Agreement...............................................81
9.19. Consent to Conflict of Interest...............................81

Schedule I -- List of Subsidiary Guarantors
Schedule II -- Lender Commitments
Schedule III -- Notice Information, Funding Offices and Wire
Instructions
Schedule IV -- Recordings, Filings and Registrations
Schedule V -- Required Licenses
Schedule VI -- Amortization Schedule
Schedule VII -- Description of Gaming and Non-Gaming
Equipment
Schedule VIII -- Disclosure Schedule
Schedule IX -- Description of Land
Appendix 1 -- Definitions
Exhibit A -- Form of Lease
Exhibit B -- Form of Loan Agreement
Exhibit C -- Form of Trust Agreement
Exhibit D -- Form of Security Agreement
Exhibit E -- Form of Construction Agency Agreement
Exhibit F -- Form of Guaranty
Exhibit G-1-A -- Form of Deed of Trust (Resort Hotel)
Exhibit G-1-B -- Form of Deed of Trust
(Equipment on Casino Barges)
Exhibit G-2 -- Form of Ship Mortgage
Exhibit G-3 -- Form of Ground Lease
Exhibit H -- Form of Landlord's Waiver and Consent
Exhibit I -- Form of Advance Request
Exhibit J -- Form of Bill of Sale
Exhibit K -- Form of Certificate of Acceptance
Exhibit L -- Form of Investor's Letter
Exhibit M -- Form of Purchase Order Assignment
Exhibit N-1 -- Form of Opinion of Counsel to Lessee,
Construction Agent and Guarantors
Exhibit N-2 -- Form of Opinion of Mississippi Counsel to
Lessee
Exhibit N-3 -- Form of Opinion of Maritime Counsel to Lessee
Exhibit N-4 -- Form of Opinion of Special New York Counsel
to Agent
Exhibit N-5 -- Form of Opinion of Maritime Counsel to Agent
Exhibit O -- Form of Architect's Certificate
Exhibit P -- Form of Prime Contractor's Certificate
Exhibit Q -- Form of Financial Covenant Compliance
Certificate
Exhibit R -- Form of Pricing Ratio Certificate
Exhibit S -- Form of Intercreditor Agreement
Exhibit T -- Form of Improvements Deed
Exhibit U -- Form of Officer's Certificate of Parent
Exhibit V -- Form of Construction Certificate
Exhibit W -- Form of Master Vessel Trust Agreement
Exhibit X -- Form of Officer's Certificate of Lessee

PARTICIPATION AGREEMENT

This PARTICIPATION AGREEMENT (this "Agreement"), dated as of May 10,
1996, is entered into by and among BL DEVELOPMENT CORP., a Minnesota
corporation, as Lessee and Construction Agent; GRAND CASINOS, INC., a Minnesota
corporation, and each of its Subsidiaries listed on Schedule I hereto, as
Guarantors; HANCOCK BANK, not in its individual capacity, except as expressly
stated herein, but solely as Lessor, Borrower and Trustee; the persons listed on
Schedule II hereto, as Lenders; BANK OF SCOTLAND, FIRST INTERSTATE BANK OF
NEVADA, and SOCIETE GENERALE, as Co-Agents; CREDIT LYONNAIS, LOS ANGELES BRANCH,
as Lead Manager and BA LEASING & CAPITAL CORPORATION, a California corporation,
as Arranger and Agent.

W I T N E S S E T H:

WHEREAS, pursuant to the terms of the Lease, Lessor will lease to
Lessee, and the Lessee will lease from Lessor, the Leased Property; and

WHEREAS, pursuant to the Trust Agreement, Lessee will apply Advances
from the Trust to finance the construction of the Hotel and the acquisition of
the Equipment subject to the terms of the Lease; and

WHEREAS, the Lenders are willing, on the terms and conditions
hereinafter set forth (including Article III), to provide financing to Lessor in
an aggregate principal amount not to exceed the Commitment Amount to fund
payment of Hotel Costs and Equipment Costs; and

WHEREAS, to secure such financing by the Lenders, Agent, on behalf of
the Lenders, will have the benefit of a Lien from Lessor on all of Lessor's
right, title and interest in and to the Leased Property and other Collateral and
an assignment of Lessor's rights in the Operative Documents; and

WHEREAS, Lessee's obligations under the Operative Documents
will be guaranteed pursuant to the terms of the Guaranty;

NOW, THEREFORE, in consideration of the mutual terms and conditions
herein contained, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Unless the context shall otherwise require, capitalized terms used but
not defined herein (including those used in the foregoing recitals) shall have
the meanings specified in Appendix 1 hereto for all purposes hereof; and the
rules of interpretation set forth in Appendix 1 hereto shall apply to this
Agreement.

ARTICLE II

EFFECTIVENESS; ACQUISITION AND LEASE; GENERAL PROVISIONS

SECTION 2.1. Effectiveness of Agreement. This Agreement shall become
effective upon the occurrence of each of the following conditions (the "Closing
Date"):

(a) Authorization, Execution and Delivery of the Operative
Documents. Subject to the requirements of Section 5.17, each of the
Operative Documents shall have been duly authorized, executed and
delivered by each of the parties thereto, and shall be in full force
and effect. No Default or Event of Default shall exist under any of the
Operative Documents to which Lessee is a party (either before or after
giving effect to the transactions contemplated by the Operative
Documents).

(b) Articles of Incorporation, Bylaws, Corporate
Resolutions and Certificates of Good Standing. Agent shall
have received from each of Lessee and each Guarantor:

(i) certificates of existence and good standing
issued by the Secretary of State of the State of Minnesota
with respect to Lessee and the Secretary of State of the state
of its incorporation with respect to each Guarantor,
respectively, each dated within thirty Business Days of the
Closing Date;

(ii) copies of the respective articles of incorporation
and by-laws certified to be true and correct by a Responsible
Officer of Lessee and each Guarantor, respectively; and

(iii) certificates of a Responsible Officer of
each of Lessee and each Guarantor certifying as to (A)
the resolutions of the Board of Directors duly authorizing the
execution, delivery and performance by Lessee and each
Guarantor, respectively, of each Operative Document to which
they are or will be a party, (B) the incumbency and signature
of Persons authorized to execute and deliver such documents
and agreements on behalf of Lessee and Guarantor, respectively
and (C) the accuracy of all representations and warranties and
absence of Defaults.

(d) Opinions of Counsel. Agents, Trustee and each Lender shall
have received the legal opinions set forth below, each dated as of
Closing Date and addressed to Agents, Trustee and each Lender:

(i) from Maslon Edelman Borman Brand PLLP, counsel to
Lessee, Construction Agent and Guarantors, as to the matters
set forth in the form of Exhibit N-1;

(ii) from Watkins Ludlam & Stennis, P.A., Mississippi
counsel to Lessee, as to the matters set forth in the form of
Exhibit N-2;

(iii) from Mayer, Brown & Platt, special New York
counsel to Agent, as to the matters set forth in the form of
Exhibit N-4; and

(iv) from Haight, Gardner, Poor & Havens, maritime
counsel to Lenders, as to the matters set forth in the form of
Exhibit N-5.

(e) Environmental Report. Agent shall have received (with
copies for Trustee and each Lender) and the Lenders shall have approved
(i) the existing studies, reports, surveys and analyses in the
possession of Lessee with respect to environmental matters relating to
the Property and (ii) except as otherwise described on the Disclosure
Schedule, the existing Environmental Assessment for the Resort,
prepared and certified by the Environmental Engineer, in form and
substance satisfactory to the Lenders, certifying that no toxic or
hazardous substance, waste, pollutant or contaminant (as those terms
are defined or described in federal or Mississippi state laws) are
presently stored or contained on, in or under any portion of
the Property in violation of Environmental Laws. Together with delivery
of such reports, Agent shall have also received a letter from the
Environmental Engineer indicating that Agent, Trustee and the Lenders
may rely on such report.

(f) Financial Statements. Agent shall have received (with
copies for Trustee and each Lender) copies of the audited consolidated
financial statements of the Parent and its Consolidated Subsidiaries
for the last Fiscal Year ended December 31, 1995, together with a
statement or certificate from the controller, treasurer or chief
financial officer of the Parent to the effect that (i) such financial
statements are true, complete and correct, (ii) the financial condition
of the Parent and its Consolidated Subsidiaries has not materially
adversely changed since the date of such financial statements and (iii)
no other event affecting the Parent and its Consolidated Subsidiaries
shall have occurred since the date of such financial statements which
could reasonably be expected to have a Material Adverse Effect.

(g) Indenture. Agent shall have received (with copies for
Trustee and each Lender) a true and correct copy of (i) the Indenture,
(ii) the Notes Completion Guaranty and (iii) the Standby Equity
Commitment Agreement, together with all exhibits and schedules and all
amendments and modifications to each of the foregoing documents.

(h) Levee Board Lease. Agent shall have received (with copies
for Trustee and each Lender) a true and correct copy of the Levee Board
Lease (with all exhibits and schedules thereto) and of all amendments
and modifications thereto.

(i) Purchase Order Assignment. Agent shall have
received (with copies for Trustee and each Lender) a
Purchase Order Assignment, fully executed by Lessee and
Lessor.

(j) Recordation. Agent shall have received evidence
satisfactory to the Lenders that each of the Deeds of Trust on the
Trustee's leasehold estate in the Hotel Site and on the Casino Barges
in respect of the Equipment, the Ground Lease or a memorandum thereof
and the Lease or a memorandum thereof shall have been or are being
recorded with the appropriate Governmental Authorities, and the UCC
Financing Statements with respect to the Collateral shall have been or
are being filed with the appropriate Governmental Authorities.

(k) Recognition of Assignment. Agent shall have received
executed written instruments satisfactory to Agent, Trustee and the
Lenders pursuant to which each of the Architect and the Prime
Contractor shall have agreed to perform its obligations under the
Construction Documents to which it is a party for the benefit of
Trustee and the Lenders, when and if the Trustee and the Lenders shall
exercise their rights under the Construction Documents Assignment.

(l) Payment of Fees. Trustee and each Lender shall have
received payment of all fees (including the Trustee's acceptance fee
set forth in a letter agreement between the Bank and Lessee, dated May
10, 1996) which are due and payable on the Closing Date pursuant to
this Agreement, the Arranger Fee Letter and the Co-Agents Fee Letter.
Arranger shall have received payment of the Arrangement Fee. Arranger
shall have received, for the account of each Co- Agent, payment of the
Co-Agents Fee. Lessee shall pay all Transaction Costs for which payment
has been requested as evidenced by an invoice or other acceptable
documentation.

SECTION 2.2. Advances.

(a) Subject to the terms and conditions hereinafter
set forth, and in reliance on the representations and
warranties contained herein or made pursuant hereto, upon
receipt of an Advance Request, on the Advance Date specified
therein, each Lender shall finance a portion of the
applicable Advance by making a Loan to the Trustee (in
accordance with the Trustee's payment instructions set forth
on Schedule III) in an amount in immediately available funds
equal to such Lender's Commitment Percentage of the aggregate
amount of the Advance being funded on such Advance Date.
Notwithstanding any other provision hereof, no Lender shall
be permitted or required to fund any Loan to the extent that,
after giving effect thereto, the aggregate amount advanced
would exceed such Lender's Commitment, or the aggregate
original principal amount of all Loans made since the Closing
Date would exceed the Commitment Amount. No amounts paid or
prepaid with respect to the Loans may be readvanced.

(b) Subject to Section 2.2(a), the aggregate amount
disbursed by the Lenders through the Trustee hereunder and
under the Loan Agreement with respect to each of the
categories of Leased Property described below shall not be
more than and not less than the amounts set forth opposite
such category below:

Maximum Minimum
Category Amount Amount

Gaming Equipment $25,000,000 $20,000,000
Non-Gaming Equipment $80,000,000 $70,000,000

The aggregate amount disbursed with respect to the Hotel Costs shall
not exceed the lesser of (i) the Fair Market Sales Value of the Hotel
as determined by the Appraisal delivered pursuant to Section 3.3(i) and
(ii) $30,000,000.

(c) Failure of Lender to Fund. If Agent determines that any
Lender (a "Defaulting Lender") will not make available the amount (the
"Defaulted Amount") which would constitute its portion of the Advance
specified in an Advance Request, Agent shall promptly notify each other
Lender (each, a "Non-Defaulting Lender") and specify the additional
amounts required to be funded by each Non-Defaulting Lender. Each
Non-Defaulting Lender, as soon as practical after receipt of notice but
not before the Advance Date, shall transfer to Bank, in immediately
available funds, its pro rata share of the Defaulted Amount, determined
in the same proportion that such Non-Defaulting Lender's Commitment
bears to the aggregate Commitments of all Non-Defaulting Lenders;
provided that such amount, together with all amounts previously funded
by each Non-Defaulting Lender, shall not exceed the Non-Defaulting
Lender's Commitment and provided further that if and to the extent that
the Defaulted Amount is not funded by the Non-Defaulting Lenders, Agent
shall reduce the amount of the Advance Request so that the total
Advance specified in the Advance Request equals the aggregate revised
fundings for the Advance Date.

If the Defaulted Amount cannot be fully funded by the
Non-Defaulting Lenders, Agent shall so notify the Non-Defaulting
Lenders and give to all Non-Defaulting Lenders the opportunity to
increase their respective Commitments by notice in writing to Agent;
provided that should the aggregate proposed increased Commitments by
one or more Non-Defaulting Lenders exceed the Defaulted Amount, Agent
shall increase the Commitments of the participating Non-Defaulting
Lenders on a pro-rata basis in accordance with the respective amounts
by which such Non-Defaulting Lenders have offered to participate, it
being understood that in no event shall the aggregate amount funded by
any Lender exceed the amount of such Lender's Commitment, after giving
effect to any increase in such Commitment pursuant to this sentence.

In the event of any funding of all or a portion of the Defaulted Amount
by the Non-Defaulting Lenders, the following rules shall apply notwithstanding
any other provision in any Operative Document:

(i) The Commitment of the Defaulting Lender shall be
decreased in an amount equal to the total aggregate
increase, if any, in the Commitments of the
Non-Defaulting Lenders pursuant to this Section
2.2(c) and the Commitment Percentages of the
Lenders shall be revised accordingly;

(ii) A Defaulting Lender shall be obligated to fund
any Advances occurring after its default based
upon its revised Commitment Percentage, if the
Commitment Percentages are revised in accordance
with the immediately preceding clause (i); and
to the extent that the Commitment Percentage of
any Defaulting Lender shall not be so revised,
Agent may thereafter call upon such Defaulting
Lender to fund a share of one or more future
Advances in an amount greater than such
Defaulting Lender's Commitment Percentage so
that the aggregate amount disbursed by such
Defaulting Lender shall equal (after giving
effect to such Advance or Advances) its
Commitment Percentage of the aggregate amount of
all Advances then and theretofore made by all
Lenders;

(iii) A Defaulting Lender shall not have the right to
fund its Defaulted Amount without the written
consent of the Agents and Lessee and then only to
the extent such Defaulted Amount has not been
funded by the Non-Defaulting Lenders in a manner
that resulted in a decrease in the Defaulting
Lender's Commitment Percentage; and

(iv) The Defaulting Lender shall not be responsible for
any incidental or consequential damages suffered by
Lessee or any of Lessee's Affiliates as a result of
its failure to so fund.

(d) Continuation Notice. Upon a timely request of any Lender,
Trustee shall deliver to the Agents and the Lender making such request,
not more than five and not less than three Business Days prior to the
commencement of each Interest Period an irrevocable written notice
confirming that all Loans outstanding at such time (subject to
prepayment or partial prepayment as provided in the Operative
Documents) shall be continued as LIBO Rate Loans (subject to such rate
changing to the Alternate Base Rate as provided in the Operative
Documents) at the Interest Rate to be determined by the Agent two
Business Days prior to the commencement of the Interest Period.

SECTION 2.3. Notes. Each amount made available by a Lender pursuant to
Section 2.2 shall be evidenced by one or more Notes issued by the Trustee
payable to the order of such Lender in a maximum principal amount equal to such
Lender's Commitment and shall be repayable in accordance with the terms of the
Loan Agreement.

SECTION 2.4. Procedures for Advances; Use of Proceeds.

(a) Request. With respect to each funding of an Advance,
Lessee shall deliver to Trustee, Agent and the Lenders, not later than
12:00 noon, Gulfport, Mississippi time, three Business Days prior to
the proposed Advance Date, an irrevocable written notice substantially
in the form of Exhibit I (an "Advance Request"), specifying (i) the
proposed Advance Date, (ii) the amount of the Advance requested, which
shall be made in an amount not less than $5,000,000, or in the unused
amount of the applicable Commitments, (iii) the portion of such Advance
to be applied to pay to Persons unaffiliated with Lessee for Hotel
Costs and Equipment Costs, including any payments applied towards the
purchase price or invoice cost of Systems or other items of Equipment
described on Schedule VII hereto, in each case in sufficient detail to
identify the types of Hotel Costs, items of Equipment or Systems that
are being funded with the proceeds of the Advance, as the case may be,
and (iv) the portion of such Advance to be applied to reimburse Lessee
or an Affiliate of Lessee for Hotel Costs and Equipment Costs,
including progress payments made by such Person on account of Systems
or other items of Equipment described on Schedule VII hereto, in each
case in sufficient detail to identify the types of Hotel Costs
previously paid or the items of Equipment or Systems for which payments
have been made.

(b) Funding. All amounts to be paid by the Lenders pursuant to
Section 2.2 shall be paid to the Bank. Upon satisfaction or waiver of
each of the applicable conditions set forth in Sections 3.1, 3.2, 3.3,
3.4, 3.5 or 3.6, as applicable, the Bank shall make such funds
available to the Trustee. On the scheduled Advance Date, upon (i)
receipt by Trustee of all amounts to be paid by the Lenders pursuant to
Section 2.2 and (ii) satisfaction or waiver of each of the applicable
conditions set forth in Sections 3.1, 3.2, 3.3, 3.4, 3.5 or 3.6, as
applicable, (A) Lessor shall purchase, and Lessee, Construction Agent
or a vendor shall deliver a bill of sale or deed, as applicable,
conveying to Lessor, as collateral security, all of such Person's
right, title and interest in the Leased Property described in the
Advance Request, and (B) in consideration therefor, Trustee shall
deposit, from funds made available by the Lenders pursuant to Section
2.2 and the Loan Agreement, the amount specified in the Advance Request
in immediately available funds remitted by wire transfer to the
Account. Deposits in the Account representing proceeds from Advances
shall be disbursed in accordance with Section 2.6.

(c) Number and Dates of Advances. During the Construction
Period, there may not be more than one Advance in any calendar month.
No Advances shall be made after March 31, 1997.

(d) Termination of Commitments. Notwithstanding anything in
this Agreement or any other Operative Document to the contrary, no
party hereto shall be obligated to make any Advances after 12:00 noon,
Gulfport, Mississippi time, on the Commitment Termination Date, or such
earlier date as the Commitments are terminated, and no Advance Date may
occur following such dates or when the Commitments are suspended.

(e) Use of Proceeds. All Advances shall be used
solely for the purpose of funding Equipment Costs and Hotel
Costs.

(f) Interest Rate. Each determination of an Interest
Rate pursuant to any provision of the Loan Agreement shall
be conclusive and binding on the Trustee, the Lessee and the
Lenders in the absence of manifest error.

SECTION 2.5. Postponement of Advance. If the Lenders make a Loan
requested pursuant to an Advance Request and the conditions precedent to such
Advance have not been satisfied on the date specified in the Advance Request,
the Lessee shall pay to the Bank, for the benefit of each Lender, interest on
the amount funded by each Lender at a rate equal to the Assumed Rate for the
period from the date of each such Advance to the date such Advance is returned
to such Lender or such Advance Date shall have occurred, less any interest
earned by the Bank on behalf of the Lenders by investing such funded amounts.
Bank (or its assignee) shall not be required to invest such funds in
interest-bearing investments, but Bank (or its assignee) shall upon direction of
Lessee (or, if an Event of Default exists, the Required Lenders) invest such
funds in Cash Equivalents to the extent it is practicably able to do so. Such
interest shall be due and payable by the Lessee upon the occurrence of such
Advance Date or upon return of such funds to the Lenders. Such payment of
interest shall be an additional condition precedent to such Advance Date. If any
Advance Date shall not have occurred by the third Business Day following the
proposed Advance Date in respect thereof, then all such interest shall be due
and payable on such date, and the Bank shall refund to each Lender all amounts
funded by such Lender and all accrued interest allocable to such Lender. No
additional Advance Request shall be required if an Advance Date is postponed and
thereafter consummated.

SECTION 2.6. The Account. Trustee shall establish and maintain (or
cause to be established and maintained) with Trustee a deposit account (the
"Account") in its name in favor of Agent into which (i) proceeds of Loans on
each Advance Date shall be remitted upon satisfaction of the applicable
provisions of Section 3.1, 3.2, 3.3, 3.4, 3.5 or 3.6 and (ii) amounts expressly
required to be deposited by any Operative Document shall be remitted. Lessee is
hereby granted a power of attorney to make withdrawals from the Account, so long
as on any date of withdrawal no Default or Event of Default exists. Lessee shall
apply any monies withdrawn from the Account in accordance with any Advance
Request previously delivered (in the case of monies deposited pursuant to clause
(i) above) and in all events in accordance with the Operative Documents. The
power of attorney granted in the preceding sentence shall be automatically
revoked at any time when a Default or Event of Default exists and shall be
automatically reinstated when any such Default or Event of Default is cured or
waived by the Required Lenders. Trustee shall not allow the Lessee to make
withdrawals from the Account at any time after it is notified a Default or Event
of Default exists, either by the Lessee or any Lender, unless and until any such
Default or Event of Default is cured or waived pursuant to Section 6.2 of the
Loan Agreement and Section 10.2 of the Lease.

SECTION 2.7. Obligations Several. The obligations of the Lenders hereto
or elsewhere in the Operative Documents shall be several and not joint; and,
except with respect to Lessee and Guarantors in connection with the Guaranty and
the other Operative Documents, no party shall be liable or responsible for the
acts or defaults of any other party hereunder or under any other Operative
Document.

SECTION 2.8. Timing of Advances to the Trustee and Payments
to the Lenders.

(a) Timing of Advances to Trustee. Any Advance Request
delivered by the Lessee to the Trustee, Agent and the Lenders later
than 12:00 noon, Gulfport, Mississippi time, on any day shall be deemed
to have been delivered on the next Business Day. Subject to timely
delivery of an Advance Request pursuant to Section 2.4(a) and the other
terms and conditions of the Operative Documents, each Lender shall make
its Commitment Percentage of the requested Advance available to the
Bank by 1:00 p.m., Gulfport, Mississippi time, on the requested Advance
Date, and the Bank will deposit any such amounts so received into the
Account as soon after receipt as practicable, but not later than 3:00
p.m., Gulfport, Mississippi time, on such Advance Date.

(b) Payments to Lenders. So long as there are obligations
outstanding under the Operative Documents, Trustee has assigned all
payments of Rent to the Agent pursuant to Section 2.1 of the Security
Agreement, and Agent has appointed the Bank as its agent to receive
such payments of Rent under Section 7.12 of the Loan Agreement. Any
payments received by the Agent (or the Bank as agent to the Agent) from
or on behalf of the Lessee or Trustee not later than 11:00 a.m.,
Gulfport, Mississippi time, shall be paid by the Agent (or the Bank) to
the Lenders in immediately available funds no later than 2:00 p.m.,
Gulfport, Mississippi time, on the same day, and any payments received
by the Agent (or the Bank) from or on behalf of the Lessee or Trustee
or the Construction Agent after 11:00 a.m., Gulfport, Mississippi time,
shall be paid by the Agent or the Bank to the Lenders as soon after
receipt as practicable, but not later than 11:00 a.m., Gulfport,
Mississippi time, on the next succeeding Business Day. Rent and all
other payments due to Trustee, Agent or any Lender under the Operative
Documents shall be paid in immediately available funds, at its
respective office specified in Schedule III or at such other office as
it may from time to time specify to the Trustee, Agent and Lessee in a
notice pursuant hereto. All such payments shall be received by the
Trustee (in its individual or trust capacity), the Agent or such
Lender, as applicable, not later than 11:00 a.m., Gulfport, Mississippi
time, on the date due. Funds received after such time shall for all
purposes of the Operative Documents be deemed to have been received on
the next succeeding Business Day.

(c) Agency. So long as the Notes remain outstanding, Rent
shall be paid by Lessee to the Bank as agent for the Agent and as
Trustee's assignee under the Operative Documents.

SECTION 2.9. Lenders' Instructions to Agent. By making its Advance
pursuant to Section 2.2, each Lender agrees that such act shall constitute,
without further act, (i) evidence that the applicable conditions precedent set
forth in Article III have been satisfied or waived; provided that any Lender's
failure to raise the issue of noncompliance with respect to any such condition
as to any third party shall not be deemed to be a waiver of such condition
unless such Lender shall have acknowledged such waiver in writing, (ii)
authorization and direction by such Lender to Agent to make a Loan pursuant to
Section 2.3 of the Loan Agreement, (iii) authorization and direction by such
Lender to Bank (as agent for the Agent) to deposit the amount so loaned into the
Account in reliance upon the Lessee's certificate delivered pursuant to Section
3.2(j) confirming that all conditions precedent to the relevant Advance have
been satisfied and (iv) authorization and direction to Trustee to permit Lessee
to withdraw funds from the Account, subject to Sections 2.4 and 2.6. Bank and
each Lender agree that any monies advanced to Bank prior to deposit into the
Account shall be returned to a Lender if such Lender so requests.

SECTION 2.10. Computations.

(a) Determination of the Interest Rate. All computations of
accrued amounts pursuant to the Operative Documents shall be made on
the basis of actual number of days elapsed in a 360-day year or, in the
case of the Alternate Base Rate or commitment fee, on the basis of
actual number of days elapsed in a 365-day or 366-day year.

(b) Dollars. All payments required to be made by the Lessee,
the Trustee, or the Agent, including any Advance or payment of Rent,
shall be made only in Dollars in immediately available funds.

SECTION 2.11. Commitment Fee. Lessee shall pay to the Agent, for the
account of each Lender, for the period (including any portion thereof when any
of its Commitments are suspended by reason of the Lessee's inability to satisfy
any condition of Article III) commencing on the Closing Date and continuing
through the Commitment Termination Date, a nonrefundable, fully- earned
commitment fee (the "Commitment Fee") at the Applicable Commitment Fee Rate on
the average daily unused portion of each such Lender's Commitment during such
period, payable quarterly in arrears on the last Business Day of each calendar
quarter and on the Commitment Termination Date.

SECTION 2.12. Fees. Lessee shall pay to the Agent, for the account of
each Lender, a nonrefundable upfront fee in an amount equal to the fee set forth
opposite such Lender's name on Schedule II, payable upon the Closing Date.
Lessee shall pay to Agent, for the account of each Co-Agent, the Co-Agents Fee.

SECTION 2.13. Legal and Tax Representation. Lessee acknowledges and
agrees that neither Agent, Arranger, Trustee, Bank nor any Lender has made any
representation or warranty concerning the tax, accounting or legal
characteristics of the Lease or any of the other Operative Documents, and that
Lessee has obtained and relied on such tax, accounting and legal advice
regarding the Lease and the other Operative Documents as it deems appropriate.
Each of Trustee and each Lender acknowledges and agrees that it has obtained and
relied on the Operative Documents and the various items delivered in connection
therewith, and on such tax, accounting and legal advice regarding the Lease and
the other Operative Documents as it deems appropriate.

SECTION 2.14. Replacement of Equipment. Trustee and Agent shall release
from the lien of the Security Documents and the Lease items of Equipment which
Lessee has elected to replace under Sections 7.3 or 9.1 of the Lease, upon
satisfaction by Lessee of the conditions contained in Section 9.1(b) of the
Lease.

ARTICLE III

CONDITIONS TO
ADVANCES AND COMPLETION

SECTION 3.1. Initial Advance Date. The obligation of the Trustee and
each Lender to perform their respective obligations on the Initial Advance Date
shall be subject to the fulfillment to the satisfaction of, or the waiver in
writing by, each Lender of the conditions precedent set forth in this Section
3.1 on or before the Initial Advance Date (except that the obligation of any
party hereto shall not be subject to such party's own performance or
compliance).

(a) Filings and Recordings. All filings, registrations and
recordings set forth on Schedule IV shall have been made in the
appropriate places or offices and all fees and taxes with respect to
any recordings, filings or registrations made pursuant to this Section
3.1(a) shall have been paid in full, and satisfactory evidence thereof
shall have been delivered to Trustee and Agent, or arrangements for
such payment shall have been made to the satisfaction of Trustee and
the Agents.

(b) Searches. Agent shall have received a report, as of a
current date, prepared by a search company reasonably satisfactory to
the Agents, of judgment liens, tax liens, Uniform Commercial Code
filings and other encumbrances of record with respect to Lessee, the
Hotel Site and the Leased Property with the applicable filing offices
in the States of Minnesota and Mississippi, and such report shall show
no Liens other than Permitted Liens or Liens with respect to which a
release has been filed subsequent to the date of such report.

(c) Insurance. Agent shall have received (with copies for
Trustee and each Lender) evidence of each of the insurance policies
required to be maintained pursuant to the Lease, setting forth the
respective coverages, limits of liability, carrier, policy number and
period of coverage, accompanied by affidavits, certificates, paid bills
or other documents evidencing that all premium payments are current.

(d) Governmental Approvals, Permits, Consents, etc. Agent
shall have received copies of all material permits, approvals or
consents by all Governmental Authorities required for the construction,
use and operation of the Hotel and the transactions provided for in
this Agreement which can be obtained as of the Initial Advance Date,
together with all supporting documents and materials reasonably
requested by the Agent, the Trustee or any Lender, including a copy of
each order or license issued by a Gaming Authority and a Liquor
Authority, as then available or required by Applicable Law, evidencing
approval of the Lessee as the licensed operator of the Casino and the
Hotel and a copy of the letter or other evidence that the Parent has
been registered as the publicly traded holding company of the Lessee.

(e) Partial Release of Indenture Lien. Agent shall have
received a fully-executed release of lien in recordable form relating
to any and all deeds of trust or other instruments executed with
respect to the Indenture affecting the Hotel Site, the Hotel and the
items of Equipment identified on Schedule VII hereto, together with
executed copies of Uniform Commercial Code partial release statements
(Form UCC-3) sufficient to release the Hotel Site, the Hotel and the
items of Equipment identified on Schedule VII hereto and evidence of
the filing of such releases.

SECTION 3.2. Conditions Precedent to All Advances. In addition to the
conditions precedent set forth in Section 3.3 and Section 3.6 of this Agreement,
the obligation of each Lender hereunder on any Advance Date shall be subject to
the fulfillment to the satisfaction of, or the waiver in writing by, each Lender
(or by the Agents) of the conditions precedent (including, with respect to
writings, such writings being in form and substance reasonably satisfactory to
the Agents) set forth in this Section 3.2 on or prior to such Advance Date
(except that the obligation of any party hereto shall not be subject to such
party's own performance or compliance):

(a) Advance Request. With respect to any Advance, Agent,
Trustee and each Lender shall have received, at least three Business
Days before each Advance Date, a fully executed Advance Request duly
executed by Lessee in accordance with Section 2.4(a). Each of the
delivery of an Advance Request and the acceptance by Lessee of the
proceeds of such Advance shall constitute a representation and warranty
by the Lessee that on the date of such Advance (both immediately before
and after giving effect to such Advance and the application of the
proceeds thereof) the statements made in Section 2.2(b), Section 3.2(b)
and in such Advance Request, are true and correct.

(b) Accuracy of Representations and Warranties, No
Default, etc. On the applicable Advance Date, the following
statements shall be true and correct:

(i) All of the representations and warranties of
Lessee, Trustee and each Guarantor contained herein and in
each of the other Operative Documents are true and correct in
all material respects on and as of such Advance Date as though
made on and as of that date, except to the extent that such
representations and warranties relate solely to an earlier
date, in which case such representations and warranties shall
have been true and correct in all material respects on and as
of such earlier date;

(ii) No Event of Default exists; and

(iii) Except as set forth in the Disclosure
Schedule, no labor controversy, litigation, arbitration or
governmental investigation or proceeding shall be pending or,
to the knowledge of the Lessee and/or the Parent, threatened
against the Lessee and/or the Parent or any other Guarantor
which might have a Material Adverse Effect.

(c) Officer's Certificate of the Parent. Agent shall have
received (with copies for Trustee and each Lender) a certificate of a
Responsible Officer of Parent with respect to Parent and each
Subsidiary of Parent which is a Guarantor, substantially in the form of
Exhibit U, stating that all of the representations and warranties of
such Person contained herein and in each of the other Operative
Documents are true and correct on and as of such Advance Date in all
material respects as though made on and as of that date, except to the
extent that such representations and warranties relate solely to an
earlier date, in which case such representations and warranties shall
have been true and correct in all material respects on and as of such
earlier date.

(d) Gaming Permits. Lessee and Parent shall have obtained all
Gaming Permits as required for or in connection with the conduct of its
gaming business and the conduct of games of chance, each as conducted
as of the date of such Advance, at the Casino and such Gaming Permits
shall not then be suspended, enjoined or prohibited (for any length of
time) by any Gaming Authority or any other Governmental Authority.

(e) Liquor Permits. Lessee and Parent shall have obtained all
Liquor Permits as required for or in connection with the operation and
use of the Casino and the Hotel, each as operated and used as of the
date of such Advance, and the Liquor Permits shall not then be
suspended, enjoined or prohibited (for any length of time) by any
Governmental Authority having or asserting jurisdiction over the Casino
and/or the Hotel.

(f) Taxes. All Taxes other than Charges due and payable by
Lessee on or prior to such Advance Date in connection with the
execution, delivery, recording and filing of any of the Operative
Documents, in connection with the filing of any of the financing
statements or in connection with the consummation of any of the
transactions contemplated hereby or by the Operative Documents shall
have been paid in full.

(g) Further Assurances, etc. Agents shall have received such
other and further instruments, duly executed, acknowledged (if
appropriate) and delivered, as Agents reasonably shall have requested
in connection with each Advance and this Agreement.

(h) Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of the Lessee and Parent
shall be satisfactory in form and substance to Agents and their
counsel; Agents and their counsel shall have received all information,
approvals, opinions, documents or instruments as Agent or its counsel
may reasonably request.

(i) Litigation. No law or regulation shall prohibit, and no
order, judgement or decree of any Governmental Authority shall, and no
action or proceeding shall be pending or threatened which in the
reasonable judgement of the Agent would or might, enjoin, prohibit,
limit or restrain the making of the initial Advance.

(j) Officer's Certificate of Lessee. Agents, Trustee and each
Lender shall have received a certificate of a Responsible Officer of
Lessee, substantially in the form of Exhibit X, confirming the
satisfaction of, or the waiver in writing by, each Lender (or by the
Agents) of the applicable conditions precedent to the relevant Advance
on or prior to such Advance Date.

SECTION 3.3. Conditions to the Initial Advance for Hotel Costs. In
addition to the conditions precedent set forth in Section 3.1, Section 3.2 and
Section 3.4 of this Agreement, the obligation of each Lender hereunder to make
the initial Advance for the payment of Hotel Costs shall be subject to the
fulfillment to the satisfaction of, or the waiver in writing by, each Lender (or
by Agents) of the conditions precedent (including, with respect to writings,
such writings being in form and substance reasonably satisfactory to the Agents)
set forth in this Section 3.3 on or prior to such Advance Date (except that the
obligation of any party hereto shall not be subject to such party's own
performance or compliance):

(a) Contracts. Agent shall have received true copies of the
Prime Construction Contract and the Architect's Agreement, which
agreements shall be (i) in form and substance acceptable to Agents,
(ii) in full force and effect, and (iii) free from material default by
the parties thereto and the Lessee shall so certify to the Agents.

(b) Survey. Agent shall have received a boundary and location
survey of the Land, dated November 15, 1995, recertified to the Agent
and the Trustee and a current boundary and location survey of the Hotel
Site thereon, each dated not earlier than thirty (30) days prior to the
date of the initial Advance, prepared in accordance with the current
Minimum Standard Detail Requirements for Land Title Surveys, as adopted
by the American Land Title Association and American Congress on
Surveying and Mapping in 1992, which shall (i) be certified to Agents,
Trustee, Lessee, and the Title Insurance Company by a surveyor or
engineer licensed by the State of Mississippi, (ii) be satisfactory in
all respects to Agents and their counsel and to the Title Insurance
Company, (iii) show the Hotel Site to be free of encroachments,
overlaps, and other survey defects unless otherwise approved by the
Agents in writing, (iv) show the courses and distances of the lot lines
for the Hotel Site, (v) show that all existing improvements are located
within said lot and building lines, and (vi) show the location of all
above and below ground easements, proposed improvements, appurtenances,
rights-of-way, water rights and ingress and egress, by reference to
book and page numbers and/or filed map reference. Such survey shall
include a certification by the surveyor that the Hotel Site is not
located in an area designated by the Secretary of Housing and Urban
Development as a special flood area.

(c) Title Insurance Policy. Agent shall have received (with
copies for Agents, Trustee and each Lender) a mortgagee's construction
loan title insurance policy in favor of Agent as the agent for the
Lenders and the Trustee, in an amount equal to $37,000,000, which
policy shall contain customary pending disbursement provisions and
which shall otherwise be in form and substance and issued by the Title
Insurance Company satisfactory to Agents, with respect to the Hotel
Site, insuring that title to the Hotel Site is marketable and that the
interests created by the Deed of Trust relating to the Hotel Site and
the Lease constitute valid first Liens on the Hotel Site and the
leasehold interest free and clear of all defects and encumbrances
unless otherwise approved by Agents and its counsel in writing. Such
policy shall also include a comprehensive endorsement, variable rate
endorsement, access and utilities endorsements, a mechanic's lien
endorsement, an environmental and zoning endorsement (which shall
insure that the contemplated use of the Hotel by Lessee will comply in
all material respects with all applicable zoning and land use laws), an
endorsement protecting against forfeiture or reversion due to
covenants, restrictions or encroachments, last-dollar endorsement and
such other endorsements as Agents shall request. All premiums, title
examination, survey, departmental violations, judgment and Uniform
Commercial Code search charges and other charges and fees shall have
been paid in full and the Agent shall have received satisfactory
evidence of such payment. For purposes of reinsurance, the share of
liability assumed by each such company shall be satisfactory to Agents.

(d) Leases. Agent shall have received certified true and
complete copies, and approved the form and substance, of each of the
leases, licenses, occupancy and use agreements, concessions and other
arrangements, oral or written, entered into as of the date of such
Advance whereby any Person agrees to pay money or any other
consideration for the use, possession or occupancy of the Hotel or any
portion thereof, and, in addition, shall have received such
subordination agreements, subordination, non-disturbance and attornment
agreements, estoppel certificates, and other instruments as Agent may
request.

(e) Architect's Statement of Professional Opinion. Agent shall
have received (with copies for Agents, Trustee, and each Lender) a
statement of professional opinion from Architect, substantially in the
form of Exhibit O, stating that upon completion of the Hotel in
accordance with the Plans and Specifications, the Hotel will comply in
all material respects with the applicable design and building codes of
Tunica County, Mississippi.

(f) Plans and Specifications, Construction Contracts,
Architect's Agreements, etc. Agent shall have received (i) detailed
Plans and Specifications for the Hotel which have been signed by
Construction Agent and the Architect which shall show the design of a
first-class Hotel which can accommodate at least 575 rooms, with
sufficient parking therefor pursuant to applicable zoning regulations,
and (ii) a detailed construction schedule for the Hotel (the "Hotel
Schedule"), together with a detailed breakdown of the estimated costs
of constructing the Hotel (the "Hotel Cost Analysis").

(g) Evidence of Availability of Utilities. Agent shall have
received evidence in form and substance satisfactory to the Agents of
the availability of water, sewer, electric, gas and telephone service
to the Hotel adequate for the use and occupancy of the Hotel Site for
its intended purpose.

(h) Building Permits. All building permits required by any
Governmental Authority in connection with the then current phase of
construction for which the applicable Advance is being made shall have
been obtained.

(i) Appraisal. Agent shall have received (with copies for
Trustee and each Lender) and the Lenders shall have approved an
appraisal report with respect to the Hotel on an as-built basis in
accordance with the Plans and Specifications, prepared by a qualified
appraiser satisfactory to the Lenders in compliance with the
requirements of FIRREA establishing the aggregate Fair Market Sales
Value of the Hotel as of the Completion Date. Such appraisal shall be
prepared at the cost and expense of Lessee.

(j) Environmental Reports. Agent shall have received (with
copies for Trustee and each Lender) and the Lender shall have approved
an update of the Environmental Assessment as it relates to the Hotel
and the Hotel Site delivered pursuant to Section 2.1(e) addressed to
the Agent, the Trustee and the Lenders. Such update shall include a
statement by the Environmental Engineer (1) more clearly identifying
the location of certain above-ground storage tanks, (2) detailing the
Environmental Engineer's recommendations, if any, for remediation with
respect to such above-ground storage tanks and (3) if remediation is
recommended, describing the nature and scope of the remediation
procedures.

SECTION 3.4. Conditions to all Advances for Hotel Costs. In addition to
the conditions precedent set forth in Section 3.1, Section 3.2 and Section 3.3
of this Agreement, the obligation of each Lender hereunder to make any Advance
for the payment of Hotel Costs shall be subject to the fulfillment to the
satisfaction of, or the waiver in writing by, each Lender (or by the Agents) of
the conditions precedent (including, with respect to writings, such writings
being in form and substance reasonably satisfactory to Agent) set forth in this
Section 3.4 on or prior to such Advance Date (except that the obligation of any
party hereto shall not be subject to such party's own performance or
compliance):

(a) Construction Certificate. With respect to the Hotel Costs
to be paid or reimbursed using the proceeds of such Advance, Agent
shall have received, at least three (3) Business Days prior to the
applicable Advance Date, a certificate, dated the date of such Advance,
substantially in the form of Exhibit V, from Construction Agent (i) to
the effect that the Hotel has, as of the date of such certificate, been
constructed in accordance with the Plans and Specifications (as amended
in conformity with Section 2.4(c) of the Construction Agency
Agreement), and that the contemplated use thereof by the Lessee will
comply with all Requirements of Law, (ii) to the effect that an amount
not less than the requested amount of such Advance is then due in
respect of Hotel Costs, which amount has not been included in any
previous certificate delivered hereunder, (iii) specifies in reasonable
detail the Hotel Costs to which such Advance relates, and (iv) as to
such other matters as Agents may reasonably request.

(b) Title Insurance Policy Endorsement. Agent shall have
received on the applicable Advance Date, a date-down endorsement, dated
the date of such Advance, to the title insurance policy delivered by
the Title Insurance Company pursuant to Section 3.3(c) (or such other
evidence of the lack of recorded and unrecorded mechanics' liens
affecting (or inchoate rights thereto which could affect) the Hotel
Site as Agents shall request). Upon each Advance, such title policy
shall protect the Lenders through the date of such Advance against
mechanics' lien Claims for all Advances with respect to the Hotel up to
and including the date of such Advance.

(c) Cost of Completion. Agent shall have received and approved
a certificate from the Prime Contractor, substantially in the form of
Exhibit P, certifying the estimated cost of completing the Hotel
pursuant to the Plans and Specifications and evidencing that such
estimated cost does not then exceed the Available Commitments allocable
to the Hotel under Section 2.2(b).

(d) Certificate of Acceptance. Lessee shall have delivered to
Agent a fully-executed Certificate of Acceptance substantially in the
form of Exhibit K with respect to each portion of the Hotel identified
in an Advance Request.

SECTION 3.5. Deliveries with Respect to the Advances for Hotel Costs
After a Default. If Agents, at the direction of the Lenders, elect to make any
Advance for the payment of Hotel Costs during the existence of a Default or an
Event of Default, Lessee, in addition to the conditions precedent set forth in
Section 3.1, Section 3.2 and Section 3.4 of this Agreement, shall deliver the
following items with respect to each such Advance:

(a) Construction Certificate. In addition to the certificate
delivered by Construction Agent pursuant to Section 3.4(a), Agent shall
have received, at least three (3) Business Days prior to the applicable
Advance Date, a certificate, dated the date of such Advance, from
Construction Agent (i) to the effect that the Available Commitments
allocable to the Hotel pursuant to Section 2.2(b) are adequate to pay
for all Hotel Costs yet to be paid for to complete the Hotel, and (ii)
the progress of the construction is such that completion of the Hotel
can occur on or prior to the Construction Termination Date (and
specifying the stage and percentage of completion which has been
achieved by each of the various trades engaged in the construction of
the Hotel), and the amount of such Advance is not greater than the
actual value of the materials incorporated into the Hotel and the work
and labor performed in connection therewith.

(b) In Balance; Deposit of Additional Funds. If the Lenders
and/or Inspecting Engineer shall determine in their sole discretion at
the time that the costs to complete the Hotel are greater than the
amount of the Available Commitments allocable to the Hotel, Lessee
shall deposit all funds with Trustee necessary to remove any such
deficiency within ten (10) days of receipt of notice from Agent. Any
such funds not used by Lessee to pay the costs of completing
construction of the Hotel shall be held by Trustee in the Account until
no Event of Default or Default exists.

(c) Inspecting Engineer Approvals and Report. The independent
firm of professional engineers or consulting architects approved by
Agents (the "Inspecting Engineer") shall have received and approved in
its sole discretion (i) all detailed Plans and Specifications (together
with all Change Orders) for the Hotel, (ii) confirmation that the Hotel
Schedule is accurate and complete, a detailed breakdown of the
estimated costs of completing the Hotel, and (iii) each subcontract
(involving an expenditure of $1,000,000 or more) relating to work to be
performed and materials to be supplied in connection with the Hotel.
Agents shall have received a report satisfactory to Agent in their sole
discretion prepared by Inspecting Engineer with respect to the Hotel
Site and the Hotel and all relevant aspects thereof and other
satisfactory evidence, in Agents' reasonable discretion, that the Hotel
can be completed in accordance with the costs set forth in the Hotel
Cost Analysis pursuant to the Hotel Schedule and when completed in
accordance with the Plans and Specifications, will comply in all
respects with all applicable Requirements of Law and insurance
requirements and that all structural elements and other systems and
components of the facilities will be in good working order and
condition, free from any latent or patent defects and conditions
requiring extraordinary maintenance or remedial action.

(d) Contracts. Agent shall have received a complete list and
summary (including the parties, term, general subject matter,
compensation and cancellation terms), together with certified true
copies of all Primary Construction Contracts necessary or appropriate
as of such date for the construction of the work in respect of the
Hotel, which Primary Construction Contracts shall be (i) in form and
substance acceptable to Agents, (ii) in full force and effect, and
(iii) free from material default by the parties thereto (or if not,
specifying the material defaults thereunder) and the Lessee shall so
certify to Agents.

(e) Architect's Statement of Professional Opinion. Agent shall
have received (with copies for Agents, Trustee, and each Lender) a
statement of professional opinion from Architect, in form and scope
satisfactory to Agents stating that (i) the contemplated use of the
Hotel by Lessee will comply in all material respects with the
applicable design and building codes of Tunica County, Mississippi and
(ii) the Hotel is being improved in a good and workmanlike manner and
in accordance with the Plans and Specifications and applicable design
and building codes of Tunica County, Mississippi.

(f) Cost of Completion. Agent shall have received a
certificate from Prime Contractor approved by Inspecting Engineer, in
form and scope satisfactory to Agents, certifying that (i) after giving
effect to the applicable Advance and, if required, the deposits made by
Lessee pursuant to Section 3.5(b), the estimated as yet unpaid cost of
completing the Hotel pursuant to the Plans and Specifications and such
estimated cost shall not exceed the Available Commitments allocable to
the Hotel under Section 2.2(b) and (ii) the estimated completion date
for construction of the Hotel and that such estimation is in accordance
with the Hotel Schedule.

(g) Change Orders. Inspecting Engineer shall have received all
Change Orders to the Plans and Specifications requested during the
existence of a Default or Event of Default and Agents shall have
approved and consented to each such Change Order (or any number of
related Change Orders) the result of which is to increase or decrease
the cost of the Hotel by $500,000 or more or otherwise have a material
adverse effect on the scope or quality of the Hotel, issued from the
date of the last Advance.

(h) Contractor Receipts. On or prior to the date of such
Advance, Agent shall have received (i) receipts with respect to any
invoice which is the subject of such Advance and which is in excess of
$50,000 from Prime Contractor and all subcontractors engaged in the
construction of the Hotel evidencing that all sums previously advanced
for Hotel Costs have been expended for such Hotel Costs and that no
further amounts are owing with respect to such previously invoiced
Hotel Costs and (ii) copies of all documents required to be submitted
by the Prime Contractor or Lessee as of such date pursuant to the terms
of the Construction Contracts have been submitted.

SECTION 3.6. Conditions to Advances for Equipment Costs. The obligation
of each Lender to perform its obligations on any Advance Date for the payment of
costs associated with any item of Equipment shall be subject to the fulfillment
to the satisfaction of each Lender (including, with respect to writings, such
writings being in form and substance reasonably satisfactory to, or the waiver
in writing by, Agents) of the conditions precedent set forth in this Section 3.6
(in addition to the conditions precedent set forth in Section 3.1 and Section
3.2) on or prior to such Advance Date (except that the obligation of any party
hereto shall not be subject to such party's own performance or compliance).

(a) Bill of Sale. Lessee shall have delivered to Agent a
fully-executed Bill of Sale substantially in the form of Exhibit J with
respect to the items of Equipment identified in an Advance Request.

(b) Certificates of Acceptance. Lessee shall have delivered to
Agent a fully-executed Certificate of Acceptance substantially in the
form of Exhibit K with respect to each item of Equipment or completed
System identified in such Advance Request (it being understood that no
Certificate of Acceptance shall be required for any System prior to the
earlier of the System being placed in service or payment in full of the
purchase price therefor).

(c) Third Party Approvals. To the extent not previously
delivered all third party approvals necessary in the reasonable opinion
of Agents for the operation and use of the Equipment and for Lessee to
perform its obligations with respect to the applicable Lease Supplement
shall have been obtained.

(d) Financing Statements. To the extent not previously filed,
Agent shall have received acknowledgment copies of properly filed UCC
Financing Statements (Form UCC-1), dated a date reasonably near to the
Advance Date, or such other evidence of filing as may be acceptable to
Agent, naming Lessee as the debtor and Trustee as the secured party,
and assigning to Agent, for the benefit of the Lenders, all of
Trustee's interest in the Collateral, and any other similar instruments
or documents, filed under the Uniform Commercial Code of all
jurisdictions as may be necessary or, in the opinion of Agent,
desirable to perfect the security interest of Agent pursuant to the
Security Documents.

(e) Additional Items. Agents and each Lender shall have
received such other documents as they may reasonably request and which
are consistent with the terms hereof including any third party
approvals.

(f) Equipment Costs. In respect of any funding of any System,
Agent shall have received an Application and Certificate for payment
AIA Document G702 with attached continuation sheet AIA Document G703
executed by a Responsible Officer of Lessee and the Prime Contractor.

SECTION 3.7. Conditions to Completion Date of Hotel. The date upon
which the Hotel shall be deemed to have been constructed and completed pursuant
to the Construction Agency Agreement (the "Completion Date") shall be deemed to
have occurred upon the date that each of the following conditions has been
satisfied:

(a) Construction Agent shall have delivered to Agent an AIA
Certificate of Completion, signed by the Architect, Prime Contractor
and Construction Agent, evidencing that the construction of the Hotel
shall have been completed substantially in accordance with the
Construction Contract, the Plans and Specifications and Change Orders
and applicable design and building codes of Tunica County, Mississippi.

(b) Construction Agent shall have delivered to Agent a
Certificate of Acceptance, or if construction of the Hotel is not
completed under the Construction Contract, then other comparable
certificates reasonably satisfactory to Trustee, Agents and the
Lenders.

(c) Construction Agent shall have furnished to Trustee and
Agent a certificate from a Responsible Officer of Construction Agent
which will indicate that it is made in favor of and for the benefit of
Trustee, Agent and each of the Lenders certifying, representing and
warranting that:

(i) the Hotel has been constructed and installed on
the Hotel Site in accordance with the Plans and Specifications
(as amended in accordance with Section 2.4(c) of the
Construction Agency Agreement) and the Primary Construction
Contract;

(ii) the Hotel is in compliance with all Applicable
Laws, except for such violations which, individually or in the
aggregate, would not have a Material Adverse Effect on Lessee;

(iii) the representations and warranties with
respect to the Hotel set forth at Sections 4.1(x), 4.1(y),
4.1(z) and 4.1(aa) through (jj) are true and correct as of the
date of such certificate;

(iv) all amounts then due or owing to third parties
for the construction of the Hotel have been paid in full and
the Construction Agent has made adequate reserves for any
contingent obligations arising out of the construction of the
Hotel); and

(v) Trustee has good and marketable title to the
Hotel free and clear of all Liens, other than Permitted Liens.

(d) Agent shall have received (a) a final "as built" survey
showing the completed Hotel which shall be reasonably satisfactory to
the Lenders and (b) final Plans and Specifications and as-built
mechanical drawings of underground site work and of interior utility
and other building systems.

SECTION 3.8. Amortization Schedule.

(a) Schedule VI sets forth four separate Group Amortization
Schedules. Mandatory principal payments are required on each Scheduled
Payment Date in an amount equal to the sum of the principal maturities
due on such date on each Group Amortization Schedule, plus any other
amounts due on such date under Section 3.8(b). The amount of a
principal payment due on any Scheduled Payment Date in respect of a
Group Amortization Schedule is the product of (u) the percentage set
forth opposite each Scheduled Payment Date on the Group Amortization
Schedule and (v) the Specific Advances relating to the Group
Amortization Schedule as calculated immediately before the Initial
Principal Payment Date (subject to Section 3.8(b) below). Each Note or
Notes evidencing a Lender's Commitment will reflect mandatory principal
amortization equal to the product of (w) such Lender's Commitment
Percentage and (x) the aggregate amount payable to the Lenders on such
Payment Date pursuant to the preceding sentence.

(b) Should there occur one or more Advances in respect of the
Loans on or after the Initial Principal Payment Date, each such Advance
shall be amortized as follows: each Specific Advance made on or after
the Initial Principal Payment Date shall be amortized in level
principal payments to the Specific Balloon Amount over the Base Period
of the Lease Supplement for which the Specific Advance was made,
commencing on the first Scheduled Payment Date and each Scheduled
Payment Date thereafter until the end of the related Base Period. For
example, Hotel Advances made on or after the Initial Principal Payment
Date will commence amortization on the first Scheduled Payment Date
after the date of such Advance occurring during the Base Period for the
Lease Supplement related to the Hotel.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

SECTION 4.1. Representations and Warranties of Lessee, Construction
Agent and Guarantors. Lessee, Construction Agent and each Guarantor jointly and
severally represent and warrant to each of the other parties hereto as follows:

(a) Due Organization, etc. Lessee, Construction Agent and
Guarantors are corporations duly organized, validly existing and in
good standing under the laws of the State of Minnesota and are duly
qualified or licensed and in good standing as foreign corporations
authorized to do business in all jurisdictions where failure to so
qualify could reasonably be expected to have a Material Adverse Effect,
and each has the requisite power and authority to execute, deliver and
perform its respective obligations under each of the Operative
Documents to which it is a party and each other agreement, instrument
and document executed and delivered by it on each Advance Date in
connection with or as contemplated by each such Operative Document. The
"principal place of business" and "chief executive office" (as such
terms are used in Section 9-103(3) of the UCC) of the Lessee,
Construction Agent, and each Guarantor is located at 13705 First Avenue
North; Plymouth, Minnesota 55441.

(b) Authorization; No Conflict; No Approvals, Etc. The
execution and delivery by each of the Lessee, the Construction Agent
and the Guarantors of each of the Operative Documents to which it is a
party, and the performance by each such Person of its respective
obligations under such Operative Documents, have been duly authorized
by all necessary corporate action (including any necessary stockholder
action) on its part, and do not and will not: (i) contravene any
Applicable Laws currently in effect applicable to or binding on it or
the Leased Property; (ii) violate any provision of its respective
charter or bylaws; (iii) result in a breach of or constitute a default
under (with or without the giving of notice or lapse of time or both)
any indenture, mortgage, deed of trust, lease, loan or credit
agreement, or any other agreement or instrument to which the Lessee,
the Construction Agent or the Guarantors is a party or by which the
Lessee, the Construction Agent or the Guarantors or their respective
properties may be bound or affected, except for such breaches or
defaults which, individually or in the aggregate, would not have a
Material Adverse Effect; or (iv) require any Governmental Approval by
any Governmental Authority, except for (x) the filings and recordings
listed on Schedule IV to perfect the rights of the Trustee, the Lenders
and the Agent intended to be created by the Operative Documents and (y)
the required licenses and approvals listed on Schedule V; and neither
the Lessee, the Construction Agent nor the Guarantors is in default
under or in violation of its respective charters or bylaws.

(c) Enforceability. Each Operative Document to which the
Lessee, the Construction Agent or any Guarantor is a party constitutes
the legal, valid and binding obligation of such Person, enforceable
against such Person in accordance with the terms thereof, except as
such enforceability may be limited by applicable bankruptcy, insolvency
or similar laws affecting creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

(d) Litigation. Except as set forth on Schedule VIII, there is
no action, suit or proceeding, or any governmental investigation or any
arbitration, in each case pending or, to the knowledge of the Lessee,
the Construction Agent or any Guarantor, threatened against such Person
or the Leased Property or before any Governmental Authority (i) which
challenges the validity of the Operative Documents to which such Person
is a party or any action taken or to be taken pursuant to the Operative
Documents to which such Person is a party, or (ii) which if adversely
determined would have, individually or in the aggregate, a Material
Adverse Effect.

(e) Ownership. Parent has sole beneficial and record
ownership, directly or indirectly, of 100% of the issued and
outstanding capital stock of each of the Lessee, the Construction Agent
and each other Guarantor. Except as set forth on the Schedule VIII,
there are no outstanding subscriptions, options, warrants, calls,
rights (including preemptive rights) or other arrangements or
commitments of any nature relating to any capital stock of the Lessee,
the Construction Agent or any other Guarantor.

(f) Financial Statements. The audited consolidated financial
statements of the Parent and its Consolidated Subsidiaries for the
Fiscal Year ended December 31, 1995 fairly present the financial
condition of the Parent and its Consolidated Subsidiaries on such date,
and the results of its consolidated operations for the period then
ended, and there has been no Material Adverse Effect with respect to
the Parent and its Consolidated Subsidiaries since such date.

(g) No Other Agreements. Neither the Lessee, the Construction
Agent nor any Guarantor is a party to any agreement to sell any
interest in the Leased Property or the Hotel Site or any portion
thereof, whether under construction pursuant to the Construction Agency
Agreement or subject to the Lease (except as otherwise contemplated in
the Operative Documents).

(h) Compliance With Law. With respect to the Leased Property
and the operation of the Hotel, the Lessee, the Construction Agent and
the Guarantors have at all times complied and is in compliance with all
Applicable Laws, except for any violations which, individually or in
the aggregate, would not have a Material Adverse Effect.

(i) Investment Company Act. Neither Lessee, Construction Agent
nor any Guarantor is an "investment company" or a company "controlled"
by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended.

(j) Public Utility Holding Company. Neither Lessee,
Construction Agent nor any Guarantor is subject to regulation as a
"holding company," an "affiliate" of a "holding company", or a
"subsidiary company" of a "holding company", within the meaning of the
Public Utility Holding Company Act of 1935, as amended.

(k) Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA
and the Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and
the Code with respect to each Plan. No member of the ERISA Group has
(i) sought a waiver of the minimum funding standard under Section 412
of the Code in respect of any Plan, (ii) failed to make any
contribution or payment due any Plan or Multiemployer Plan or in
respect of any Benefit Arrangement, or made any amendment to any Plan
or Benefit Arrangement, which has resulted or could result in the
imposition of a Lien or the posting of a bond or other security under
ERISA or the Code or (iii) incurred any liability under Title IV of
ERISA other than a liability to the PBGC for premiums under Section
4007 of ERISA. No Plan Termination Event has occurred with respect to
any Plan or Multiemployer Plan. No member of the ERISA Group has any
knowledge of any event that could result in a liability of any such
member to the PBGC, whether under a Plan, a Multiemployer Plan or
otherwise. There have not been any nor are there now existing any
events or conditions that would permit any Plan to be terminated under
circumstances that would cause the lien provided under Section 4068 of
ERISA to attach to the material assets of the Lessee or its ERISA
Affiliates. The value of the Plans' benefits guaranteed under Title IV
of ERISA on the date hereof does not exceed the value of such Plans'
assets allocable to such benefits as of the date of this Agreement. No
"Prohibited Transaction" within the meaning of Section 406 of ERISA
exists or will exist upon the execution and delivery of this Agreement
or any Operative Document with respect to any Plan or Benefit
Arrangement.

(l) Environmental Matters. (i) There are no conditions
existing currently which would be likely to subject the Trustee, the
Agent, the Lenders or the Lessee, the Construction Agent or any
Guarantor to damages, penalties, injunctive relief or cleanup costs
under any Environmental Laws or assertions thereof, or which require or
are likely to require cleanup, removal, remedial action or other
response at or with respect to the Leased Property or the Land pursuant
to Environmental Laws; (ii) neither the Lessee, the Construction Agent
nor any Guarantor is a party to any litigation or administrative
proceeding for which it has received service of process or other
similar notification, and to the knowledge of the Lessee, the
Construction Agent and any Guarantor, any litigation or administrative
proceeding threatened against any of them, which asserts or alleges
that the Lessee, the Construction Agent or any Guarantor, the Leased
Property or the Project has violated or is violating Environmental Laws
with respect to the Leased Property or the Project or that the Lessee,
the Construction Agent or any Guarantor is required to clean up, remove
or take any remedial or other responsive action due to the disposal,
depositing, discharge, leaking or other release of any Hazardous
Materials at or from the Leased Property, or the Project; (iii) neither
the Lessee, the Construction Agent nor any Guarantor is subject to any
judgment, decree or order or citation arising out of Environmental Laws
which relates to the Leased Property or the Land (or any interest
therein); and (iv) neither the Lessee, the Construction Agent nor any
Guarantor has been named or listed as a potentially responsible party
by any governmental body in a manner arising under any Environmental
Laws with respect to or which affects the Leased Property, the Hotel or
the Project.

(m) Subjection to Government Regulation. Except in the case of
the ownership of, or the holding of an interest in, the Leased Property
following the exercise of remedies under the Lease, no Agent or Lender
will become subject to ongoing regulation of its operations by a
Governmental Authority (excluding foreign Governmental Authorities)
solely by reason of entering into the Operative Documents or the
consummation of the transactions contemplated thereby; provided,
however, that the Mississippi Gaming Commission may at any time require
the Trustee, any Agent or any Lender to file an application, at
Lessee's expense, for a finding of suitability to be affiliated with
the Lessee. The exercise of remedies by the Trustee, any Agent or any
Lender under any of the Operative Documents with respect to the
Collateral will not require the approval of or filing with any Gaming
Authority except as otherwise disclosed on Schedule V hereto.

(n) Securities Act. Neither the Lessee nor anyone authorized
to act on its behalf has, directly or indirectly, offered or sold any
interest in the Notes, the Leased Property, the Lease or any of the
Operative Documents in violation of Section 5 of the Securities Act or
any state securities laws.

(o) Federal Reserve Regulations. Neither the Parent nor any of
its Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of
purchasing or carrying any margin stock (within the meaning of
Regulation U of the Board). No part of any Advance will be used
directly or indirectly for the purpose of purchasing or carrying any
such margin stock, to extend credit to others for the purpose of
purchasing or carrying any such margin stock or for any other purpose
violative of or inconsistent with any of the provisions of Regulation
G, T, U or X of the Board.

(p) Taxes. Lessee, Construction Agent and the Guarantors have
filed all tax returns and reports required by law to have been filed by
each of them and have paid all taxes and governmental charges thereby
shown to be owing, except any such taxes or charges which are being
diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set
aside on their books.

(q) Accuracy of Information. All factual information
heretofore or contemporaneously furnished by or on behalf of the
Lessee, the Construction Agent and any Guarantor in writing to the
Agent, the Trustee and the Lenders for purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all
other such factual information hereafter furnished by or on behalf of
the Lessee, the Construction Agent and any Guarantor to the Agent, the
Trustee and the Lenders will be, true and accurate in every material
respect on the date as of which such information is dated or certified
and as of the date of execution and delivery of this Agreement by the
Agent, the Trustee and the Lenders, and such information is not, or
shall not be, as the case may be, incomplete by omitting to state any
material fact necessary to make such information not misleading.

(r) Licenses, Registrations and Permits. As of any date on
which this representation is made, all licenses, registrations and
permits (other than Gaming Permits and Liquor Permits) required of
Lessee as of such date by any Governmental Authority having
jurisdiction shall have been obtained for (i) the use and occupancy of
the Land, (ii) the operation of the facilities (including the Hotel) on
the Land, including certificates of occupancy for the Hotel or other
legally equivalent permission to occupy the Hotel, and (iii) the
construction and installation of the Hotel, except where the failure to
obtain the same would not have, individually or the aggregate, a
Material Adverse Effect.

(s) Title to Property. Parent has good and marketable title to
all of its material assets reflected on the financial statements
delivered pursuant to Section 2.1(f), except for such material assets
as have been disposed of in the ordinary course of business, and all
such material assets are free and clear of any Lien, except as
reflected in the financial statements and/or notes thereto or as
otherwise permitted by the provisions hereof or under the Operative
Documents, and except for Permitted Liens. Parent has such trademarks,
trademark rights, trade names, trade name rights, franchises,
copyrights, patents, patent rights and licenses as to allow it to
conduct its business as now operated, without known conflict with the
rights of others.

(t) Insurance. Lessee has obtained or caused to be obtained
insurance coverage covering the Leased Property which meets in all
respects the requirements of the Lease, and such coverage is in full
force and effect. Lessee carries insurance with reputable insurers, or
self-insures, in respect of its material assets, in such manner, in
such amounts and against such risks as is customarily maintained by
other Persons of similar size engaged in similar business.

(u) Defaults. Neither the Lessee, the Parent nor any other
Guarantor is in default under any Operative Document, instrument
evidencing any Debt, or under any material agreement relating thereto
or any indenture, mortgage, deed of trust, security agreement, lease,
franchise or other agreement or other instrument to which any such
Person is a party or by which any such Person or any of its material
assets is subject to or bound including the Indenture which would
result in a Material Adverse Effect.

(v) Solvency. The consummation by the Lessee or any Guarantor
of the transactions contemplated by the Operative Documents did not and
will not render the Lessee or any Guarantor insolvent, nor was it made
in contemplation of the Lessee's or any Guarantor's insolvency; the
value of the assets and properties of each of the Lessee and each
Guarantor at fair valuation and at their then present fair salable
value is and, after the transactions, will be greater than the
respective total liabilities, including contingent liabilities, as they
become due of the Lessee and each Guarantor; the property remaining in
the hands of the Lessee and of each Guarantor was not and will not be
an unreasonably small amount of capital.

(w) Appraisal Data. The information provided by the Lessee and
its Affiliates to the Appraiser and forming the basis for the
conclusions set forth in the Appraisal, taken as a whole, was true and
correct in all material respects and did not omit any information known
and available to the Lessee or any of its Affiliates necessary to make
the information provided not materially misleading.

(x) Zoning. The Hotel and the Hotel Site complies in all
material respects with all applicable zoning and subdivision laws,
ordinances, regulations and restrictive covenants, and all requirements
thereof necessary for the use, occupancy and operation of the Hotel and
the Hotel Site as operated and used on each date this representation is
made have been satisfied in all material respects, and the current use
and intended use under the Lease of the Hotel and the Hotel Site is a
conforming use.

(y) Perfection of Security Interests. Upon (i) execution and
delivery of the Intercreditor Agreement, (ii) the partial release of
Liens described in Section 3.1(e), (iii) execution and delivery of the
Landlord Consent and Waiver, and (iv) the filing of appropriate UCC
Financing Statements with the Secretary of State of Minnesota, the
Secretary of State of Mississippi and the office of the Chancery Clerk
of Tunica County, Mississippi and, together with a fixture filing or
deed of trust on the Hotel Site (if necessary) in the office of the
Chancery Clerk of Tunica County, Mississippi, Agent, for the benefit of
the Lenders, will have an enforceable, perfected first priority Lien of
record in the Collateral granted pursuant to the Lease as against all
Persons, including Lessee and its creditors.

(z) Use and Operation of Leased Property. To the best
knowledge of the Parent, and the Lessee after due inquiry, on and after
the Completion Date (i) all material agreements, easements and other
rights, public or private, which are necessary to permit the lawful use
and operation of the Hotel and the Hotel Site as the Lessee intends to
use the Hotel and the Hotel Site under the Lease and which are
necessary to permit the lawful intended use and operation of all
presently intended utilities, driveways, roads and other means of
egress and ingress to and from the same (including certificates of
occupancy) have been obtained and are in full force and effect and the
Lessee has no actual knowledge of any pending modification or
cancellation of any of the same; (ii) the use of the Hotel and the
Hotel Site does not (and the intended use of the Hotel and the Hotel
Site by Lessee under the Lease will not) depend on any variance,
special exception or other municipal approval, permit or consent that
has not been obtained for its continuing legal use; and (iii) all
required building and use related permits, approvals and consents
material to the use and operation of the Hotel and the Hotel Site have
been issued and will be in full force and effect and all utilities
required for the operation of the Hotel and the Hotel Site, as the
Lessee intends to use the Hotel and the Hotel Site under the Lease,
will be available as of such date.

(aa) Gaming Permits; Liquor Permits. All Gaming Permits and
Liquor Permits required to be held by Lessee as of each date this
representation is made for the conduct of its business as then
conducted are current and in good standing and upon opening of the
Casino the Lessee will hold all Gaming Permits and Liquor Permits
necessary for the operation of the Casino and the sale of alcoholic
beverages at the Resort.

(bb) Location of Gaming Activities. No gaming activities
requiring a Gaming Permit will be maintained at any location at the
Resort other than at a location that has obtained all requisite Gaming
Permits.

(cc) Leased Property. Upon substantial completion of the
Hotel, the Hotel Site as improved and the contemplated use thereof by
Lessee and its agents, assignees, employees, lessees, licensees and
tenants will comply in all material respects with all Requirements of
Law (including all zoning and land use laws and Environmental Laws) and
the requirements of all insurance policies required to be maintained
under the Lease and the Construction Agency Agreement.

(dd) Plans and Specifications. Except as set forth on the
Disclosure Schedule, there is no action, suit or proceeding (including
any proceeding in condemnation or eminent domain or under any
Environmental Law) pending or threatened with respect to Lessee, Casino
or the Hotel which adversely affects the title to, or the use,
operation or value of the Hotel or Casino. No fire or other casualty
with respect to the Hotel or Casino has occurred which fire or other
casualty has had a material adverse effect on the Hotel or Casino. Upon
substantial completion of each of the Hotel and Casino, each such
facility will have available all material services, public facilities
and other utilities necessary for use and operation of the Hotel and
Casino for their primary intended purposes including adequate water,
gas and electrical supply, storm and sanitary sewerage facilities,
telephone, other required public utilities and means of access between
the Hotel and Casino and public highways for motor vehicles. All
utilities serving the Hotel, or proposed to serve the Hotel in
accordance with the related Plans and Specifications, are located in,
and vehicular access to the Hotel is provided by, either public
rights-of-way abutting the Hotel or Appurtenant Rights. All
Requirements of Law, easements and rights-of-way, including proof and
dedication, required for (x) the use, treatment, storage, transport,
disposal or disposition of any Hazardous Substance on, at, under or
from the Hotel Site during the construction of the Hotel and Casino,
and (y) construction of the Hotel and the Casino in accordance with the
Plans and Specifications, and the Construction Agency Agreement have
either been irrevocably obtained from the appropriate Governmental
Authorities having jurisdiction or from private parties, as the case
may be, or will be irrevocably obtained from the appropriate
Governmental Authorities having jurisdiction or from private parties,
as the case may be, prior to commencing any such construction or use
and operation, as applicable.

(ee) Title. The Deed of Trust and the Lease are in form and
substance sufficient to grant a valid first priority Lien in the Hotel
Site to Agent, for the benefit of the Lenders, subject only to
Permitted Liens. The Ground Lease is in form and substance sufficient
to convey a valid leasehold estate in the Hotel Site to the Lessor,
subject only to Permitted Liens. Lessor will at all times during the
Lease Term have a valid leasehold estate in the Hotel Site pursuant to
the Ground Lease and good and marketable title in fee simple to the
Hotel pursuant to the Improvements Deed, subject only to Permitted
Liens. Lessee will at all times during the Lease Term have marketable
title in fee simple to the Hotel Site subject only to Permitted Liens.
The Deed of Trust relating to the Barge Equipment is in form and
substance sufficient to grant a valid, first priority Lien in the Barge
Equipment to the Agent, for the benefit of the Lenders, subject only to
Permitted Liens.

(ff) Flood Hazard Areas. Except as otherwise identified on the
survey delivered pursuant to Section 3.3(b), no portion of the Hotel
Site is located in an area identified as a special flood hazard area by
the Federal Emergency Management Agency or other applicable agency. If
the Hotel Site is located in an area identified as a special flood
hazard area by the Federal Emergency Management Agency or other
applicable agency, then flood insurance has been obtained for the Hotel
Site in accordance with the Lease and in accordance with the National
Flood Insurance Act of 1968, as amended.

(gg) Condition and Use of Leased Property. To the best
knowledge of Parent and the Lessee after due inquiry, the present
condition and use of the Leased Property conforms in all material
respects with all conditions or requirements of all existing permits
and approvals issued with respect to the Leased Property, and the
present use of the Leased Property and each Lessee's future intended
use of the Leased Property under the Lease does not, in any material
respect, violate any Applicable Laws. To the best knowledge of Parent
and the Lessee after due inquiry, (i) no notices, complaints or orders
of violation or non-compliance or liability of any nature whatsoever
have been issued or threatened by any Person with respect to the Land
or any Leased Property or any present or intended future use thereof,
except for such violations and instances of non-compliance as could not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, and it is not aware of any circumstances which
could give rise to the issuance of any such notices, complaints or
orders, and (ii) the Land complies in all material respects with
Applicable Laws to the extent that non-compliance would not have a
Material Adverse Effect.

(hh) Burdensome Agreements. Lessee is not (i) a party to any
agreement, indenture, lease or instrument, or (ii) subject to any
organizational document restriction or any judgment, order, writ,
injunction, decree, rule or regulation that presently, or in the future
may, so far as Lessee can now foresee, have a Material Adverse Effect
on Lessee.

(ii) No Change in Name or Entity. Lessee has not prior to the
date of this Agreement, changed its name, or been the surviving entity
of a merger or consolidation, except for the merger of GCI Acquisition
Subsidiary, Inc. and Grand Gaming Corporation into Lessee (with Lessee
as the surviving entity) in connection with the transactions
contemplated by the Indenture.

(jj) Purchase Price. The Fair Market Value of the items of
Equipment accepted on the Advance Date is approximately equal to the
invoice cost for the items of Equipment identified in such Advance
Request plus the Charges properly attributable thereto.

SECTION 4.2. Representations and Warranties of Each Lender. Each Lender
represents and warrants, severally and only as to itself, to each of the other
parties hereto as follows:

(a) Due Organization, etc. It is duly organized and validly
existing under the laws of the jurisdiction of its organization and has
the requisite power and authority to enter into and perform its
obligations as a Lender under each Operative Document to which it is or
will be a party and each other agreement, instrument and document to be
executed and delivered by it in connection therewith.

(b) Authorization; No Conflict. The execution and delivery by
it of, the consummation by it of the transactions provided for in, and
the compliance by it with all the provisions of, each Operative
Document to which it is or is to be a party as Lender have been duly
authorized by all necessary corporate action on its part; and neither
the execution and delivery thereof, nor the consummation of the
transactions contemplated thereby, nor compliance by it as Lender with
any of the terms and provisions thereof (i) requires any approval of
its stockholders or approval or consent of any trustee or holders of
any of its indebtedness or obligations, (ii) contravenes or will
contravene any Applicable Laws currently in effect applicable to or
binding on it (except no representation or warranty is made as to any
Applicable Laws to which it or the Leased Property, directly or
indirectly, may be subject because of the lines of business or other
activities of the Lessee) or (iii) results in any breach of or
constitutes any default under, any indenture, mortgage, chattel
mortgage, deed of trust, lease, conditional sales contract, loan or
credit arrangement, other material agreement or instrument, corporate
charter, by-laws or other agreement or instrument to which it is a
party or by which it or its properties may be bound or affected.

(c) ERISA. It is purchasing its interest in the Note with
assets that are either (i) not assets of any Plan or Benefit
Arrangement (or its related trust) that is subject to Title I of ERISA
or Section 4975 of the Code, or (ii) assets of any Plan or Benefit
Arrangement (or its related trust) that is subject to Title I of ERISA
or Section 4975 of the Code, but for which there is available an
exemption from the prohibited transaction rules under Section 406(a) of
ERISA and Section 4975 of the Code and such exemption is immediately
applicable to each transaction contemplated by the Operative Documents
to the extent that any other party to such transaction is a "party in
interest" as defined in Section 3(14) of ERISA, or a "disqualified
person" as defined in Section 4975(e)(2) of the Code, with respect to
such plan assets.

(d) Investment in Notes. It is acquiring the Note for its own
account for investment and not with a view to any distribution (as such
term is used in Section 2(11) of the Securities Act) thereof, and if in
the future it should decide to dispose of all or any portion its
interest in its Note or other Operative Documents, it understands that
it may do so only in compliance with the Securities Act and the rules
and regulations of the SEC thereunder and any applicable state
securities laws. Neither it nor anyone authorized to act on its behalf
has taken or will take any action which would subject the issuance or
sale of any Note, the Trust Estate (including the Leased Property
constituting a part thereof), the Collateral or the Lease to the
registration requirements of Section 5 of the Securities Act. Subject
to the foregoing, it is understood among the parties that the
disposition of each Lender's property shall be at all times within its
control.

(e) Lessor Liens. The Leased Property is free and clear of all
Lessor Liens attributable to it.

SECTION 4.3. Representations and Warranties of the Trustee. Bank, in
its individual capacity, represents and warrants to each of the other parties
hereto as follows:

(a) Chief Executive Office. Bank's "chief executive office"
and "principal place of business" as such terms are used in Section
9-103(3) of the UCC and the place where the documents, accounts and
records relating to the transactions contemplated by the Operative
Documents are kept is located at One Hancock Plaza; Gulfport,
Mississippi 39502.

(b) Due Organization, etc. Bank is a duly organized and
validly existing banking corporation in good standing under the laws of
the State of Mississippi and has full power and authority to execute,
deliver and perform its obligations (i) in its individual capacity
under the Trust Agreement and, to the extent it is a party hereto in
its individual capacity, this Agreement, and (ii) as Trustee under the
Trust Agreement, under this Agreement and each other Operative Document
to which it is or will be a party as Trustee.

(c) Due Authorization; Enforceability. The Operative Documents
to which the Bank is or will be a party have been or will be, on the
date required to be delivered hereby, duly authorized, executed and
delivered by or on behalf of the Bank (in its individual capacity) and
are, or upon execution and delivery by the Bank will be, legal, valid
and binding obligations of the Bank (in its individual capacity),
enforceable against it in accordance with their respective terms,
except as such enforcement may be limited by applicable bankruptcy,
insolvency, or similar laws affecting creditors' rights generally and
by general equitable principles.

(d) No Conflict. The execution and delivery by (i) the Bank,
in its individual capacity, of the Trust Agreement and, to the extent
it is a party hereto in its individual capacity, this Agreement, and
(ii) the Bank, in its capacity as Trustee, of each Operative Document
to which Trustee is or will be a party, are not and will not be, and
the performance by the Bank, in its individual capacity or as Trustee,
as the case may be, of its obligations under each are not and will not
be inconsistent with the articles of association or by-laws of the
Bank, do not and will not contravene any Applicable Laws of the United
States of America or the State of Mississippi relating to the banking
or trust powers of the Bank, and do not and will not result in a breach
of or constitute a default under (with or without the giving of notice
or lapse of time or both) any indenture, mortgage, deed of trust,
lease, loan or credit agreement or any other agreement or instrument to
which the Bank is a party or by which it or its properties may be bound
or affected.

(e) No Approvals, etc. Neither the execution and delivery by
Trustee in its individual capacity or as Trustee, as the case may be,
of any of the Operative Documents to which it is a party requires any
Governmental Approval by any Governmental Authority under any
Applicable Laws of the United States of America or the State of
Mississippi relating to the banking or trust powers of the Bank.

(f) Litigation. There is no action, proceeding or
investigation pending or threatened against the Bank (in its individual
capacity or as Trustee) which questions the validity of the Operative
Documents or which is reasonably likely to result, individually or in
the aggregate, in any material adverse effect on the ability of the
Bank (in its individual capacity or as Trustee) to perform its
obligations (in either capacity) under the Operative Documents to which
it is a party.

(g) Lessor Liens. The Leased Property is free and
clear of all Lessor Liens attributable to the Bank (in its
individual capacity).

(h) Securities Act. Neither the Bank (in its individual
capacity or as Trustee) nor anyone authorized to act on its behalf has,
directly or indirectly, in violation of Section 5 of the Securities Act
or any state securities laws, offered or sold any interest in the
Notes, the Leased Property or the Lease, or in any security or lease
the offering of which, for purposes of the Securities Act or any state
securities laws, would be deemed to be part of the same offering as the
offering of the aforementioned securities or leases, or solicited any
offer to acquire any of the aforementioned securities or leases.

SECTION 4.4. Representations and Warranties of the Agent. BA Leasing &
Capital Corporation, in its individual capacity, hereby represents and warrants
to each of the other parties hereto as follows:

(a) Due Organization, etc. Agent is duly organized and validly
existing under the laws of the jurisdiction of its organization and has
the requisite power and authority to execute, deliver and perform its
obligations under the Operative Documents to which it is or will be a
party.

(b) Due Authorization; Enforceability. The Operative Documents
to which the Agent is or will be a party have been or will be, on the
date required to be delivered hereby, duly authorized, executed and
delivered by the Agent, and are, or, upon execution and delivery will
be, legal, valid and binding obligations of the Agent, enforceable
against it in accordance with their respective terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, or
similar laws affecting creditors' rights generally and by general
equitable principles.

(c) No Conflict. Neither the execution and delivery by the
Agent of the Operative Documents to which it is or will be a party,
either in its individual capacity or as the Agent, or both, nor
performance of its obligations thereunder in either such capacity,
results in a breach of, or constitutes a default under (with or without
the giving of notice or lapse of time or both), or violates the terms,
conditions or provisions of: (i) the articles of incorporation of the
Agent; (ii) any agreement, to which the Agent, either in its individual
capacity, as Agent, or both, is now a party or by which it or its
property, either in its individual capacity, as Agent, or both, is
bound or affected, where such breach, default or violation would be
reasonably likely to materially and adversely affect the ability of the
Agent, either in its individual capacity or as Agent or both, to
perform its obligations under any Operative Document to which it is or
will be a party, either in its individual capacity or as Agent, or
both; or (iii) any Applicable Laws of the United States of America or
the State of New York relating to the banking or trust powers of the
Agent, where such conflict, breach, default or violation would be
reasonably likely to materially and adversely affect the ability of the
Agent, either in its individual capacity, as Agent or both, to perform
its obligations under any Operative Document to which it is or will be
a party.

(d) No Approvals, etc. No Governmental Approval by any
Governmental Authority under any Applicable Laws of the United States
of America or the State of New York relating to the banking or trust
powers of the Agent is or will be required in connection with the
execution and delivery by the Agent of the Operative Documents to which
it is party or the performance by the Agent of its obligations under
such Operative Documents.

ARTICLE V

COVENANTS OF LESSEE, CONSTRUCTION AGENT AND PARENT

SECTION 5.1. Further Assurances. Each of the Lessee and the
Construction Agent, at its own cost and expense, will cause to be promptly and
duly taken, executed, acknowledged and delivered all such further acts,
documents and assurances as any Lender, the Trustee or the Agent reasonably may
request from time to time in order to carry out more effectively the intent and
purposes of this Agreement and the other Operative Documents to which it is a
party and the transactions contemplated thereby. Parent, at its own cost and
expense, will cause all financing statements (including precautionary financing
statements), fixture filings, Deeds of Trust and other documents, to be recorded
or filed at such places and times in such manner, and will take all such other
actions or cause such actions to be taken, as may be necessary or as may be
reasonably requested by any Lender, the Trustee or the Agent in order to
establish, preserve, protect and perfect the title of the Trustee to the Leased
Property and the Trustee's rights under this Agreement and the other Operative
Documents and to perfect, preserve and protect the first and prior Lien of the
Security Agreement on the Trust Estate in favor of the Agent for the benefit of
the Lenders. Without limiting the foregoing, the Parent shall furnish to each
Lender, the Trustee and the Agent, annually commencing on the fifth anniversary
of the Closing Date, an opinion of counsel with respect to the continued
perfection of the security interests created pursuant to the Operative
Documents.

SECTION 5.2. Consolidation, Merger, Sale, etc.

(a) Subject to Section 5.4, Lessee shall not consolidate with
any Person, merge with or into any Person or convey, transfer or lease
to any Person all or substantially all of its assets in any single
transaction (or series of related transactions), unless, immediately
after giving effect to such transaction, the conditions set forth in
clauses (i) through (vii) shall have been satisfied:

(i) the Person formed by such consolidation with or
into which Lessee shall be merged or the Person which shall
acquire by conveyance, transfer or lease all or substantially
all of the assets of Lessee (the "Surviving Company") shall be
a corporation, partnership, association or other business
entity that is organized under the laws of the United States
of America, a state thereof or the District of Columbia;

(ii) the Surviving Company (if other than Lessee)
shall execute and deliver to each of the parties hereto an
agreement, in form and substance reasonably satisfactory to
the Lenders, the Trustee and the Agent, containing the
assumption by the Surviving Company of the due and punctual
payment, performance and observation of each obligation,
covenant and agreement of Lessee under this Agreement and each
other Operative Document to which, immediately prior to such
transaction, Lessee was a party;

(iii) each Guarantor shall execute and deliver to
each of the parties hereto a reaffirmation, in form and
substance satisfactory to the Lenders, the Trustee and the
Agent, that each and all of the obligations of such Guarantor
under this Agreement and the Guaranty remain, and will remain,
in full force and effect, notwithstanding the transaction or
transactions giving rise to the requirement that such
reaffirmation be delivered hereunder;

(iv) no Lease Default, Lease Event of Default,
Event of Loss or Construction Agency Event of Default shall
have occurred or would occur as a result thereof;

(v) the title of the Trustee to the Leased Property
and the Trustee's rights under this Agreement and the other
Operative Documents and the first and prior Lien granted to
the Trustee in the Lease shall not be adversely affected;

(vi) the Surviving Company (if other than Lessee)
shall have obtained all Gaming Permits and Liquor Permits
necessary for the continued operation of the Casino and the
Resort; and

(vii) Lessee shall have delivered to the Lenders,
the Trustee and the Agent a certificate of a Responsible
Officer of the Lessee and an opinion of counsel reasonably
satisfactory to each such Person stating that such transaction
complies with this Section 5.2(a), that all conditions to the
consummation of such transaction have been fulfilled and that
all Governmental Action required in connection with such
transaction has been obtained, given or made.

Upon the consummation of such transaction, the Surviving
Company shall succeed to, and be substituted for, and may exercise
every right and power of, Lessee immediately prior to such transaction
under this Agreement and each other Operative Document to which Lessee
was a party immediately prior to such transaction, with the same effect
as if the Surviving Company had been named herein and therein.
Notwithstanding the foregoing provisions of this Section 5.2(a), no
conveyance, transfer or lease of all or substantially all of the assets
of Lessee shall release the Lessee, the Construction Agent or any
Guarantor from its respective payment or other obligations under this
Agreement or any other Operative Document without the written consent
of the Trustee, the Agent and each Lender.

(b) Each Guarantor shall not consolidate with any Person,
merge with or into any Person or convey, transfer or lease to any
Person all or substantially all of its assets in any single transaction
(or series of related transactions), unless, immediately after giving
effect to such transaction, the conditions set forth in clauses (i)
through (vii) shall have been satisfied:

(i) the Person formed by such consolidation with or
into which the Guarantor shall be merged or the Person which
shall acquire by conveyance, transfer or lease all or
substantially all of the assets of the Guarantor (the
"Surviving Company"), if other than the Guarantor immediately
prior to such transaction, shall be a corporation,
partnership, association or other business entity that is
organized under the laws of the United States of America, a
state thereof or the District of Columbia;

(ii) the Surviving Company (if other than the
Guarantor) immediately prior to such transaction, shall
execute and deliver to each of the parties hereto an
agreement, in form and substance reasonably satisfactory to
the Lenders, the Trustee and the Agent, containing the
assumption by the Surviving Company of the due and punctual
payment, performance and observation of each obligation,
covenant and agreement of the Guarantor under this Agreement
and each other Operative Document to which, immediately prior
to such transaction, the Guarantor was a party;

(iii) Such Guarantor shall execute and deliver to
each of the parties hereto a reaffirmation, in form and
substance satisfactory to the Lenders, the Trustee and the
Agent, that each and all of the obligations of such Guarantor
under this Agreement and the Guaranty remain, and will remain,
in full force and effect, notwithstanding the transaction or
transactions giving rise to the requirement that such
reaffirmation be delivered hereunder;

(iv) no Lease Default, Lease Event of Default,
Event of Loss or Construction Agency Event of Default shall
have occurred or would occur as a result thereof;

(v) the Surviving Company (if other than the
Guarantor) shall have obtained all Gaming Permits and Liquor
Permits, including a finding that if the Guarantor is the
Parent that it is suitable to own the capital stock of Lessee,
as then required by Applicable Law;

(vi) the Parent and such Guarantor shall have
delivered to the Lenders, the Trustee and the Agent a
certificate of a Responsible Officer of the Parent and such
Guarantor and an opinion of counsel reasonably satisfactory to
each such Person stating that such transaction complies with
this Section 5.2(b), that all conditions to the consummation
of such transaction have been fulfilled and that all
Governmental Action required in connection with such
transaction has been obtained, given or made; and

(vii) immediately after the consummation of such
transaction, no Change of Control shall have occurred.

Upon the consummation of such transaction, the Surviving
Company shall succeed to, and be substituted for, and may exercise
every right and power of, the Parent immediately prior to such
transaction under this Agreement and each other Operative Document to
which the Parent was a party immediately prior to such transaction,
with the same effect as if the Surviving Company had been named herein
and therein. Notwithstanding the foregoing provisions of this Section
5.2(b), no conveyance, transfer or lease of all or substantially all of
the assets of the Parent shall release the Lessee or the Construction
Agent or any Guarantor from its payment or other obligations under this
Agreement or any other Operative Document without the written consent
of the Trustee, the Agent, and each Lender.

SECTION 5.3. Corporate Existence. Subject to Section 5.2, each
Guarantor, the Lessee and the Construction Agent shall at all times maintain its
existence as a corporation in good standing under the laws of its respective
jurisdiction of incorporation and shall use commercially reasonable efforts to
preserve and keep in full force and effect its franchises material to its
business.

SECTION 5.4. Ownership of Lessee. Parent shall at all times maintain
ownership of 100% of the issued and outstanding capital stock of the Lessee and
the Construction Agent (including all rights to subscribe for, purchase
(including by conversion of any other security) or otherwise acquire any such
capital stock), free and clear of all Liens other than a pledge of the all of
the issued and outstanding shares of capital stock of Lessee to the Indenture
Trustee.

SECTION 5.5. Liens. Neither the Lessee, the Construction Agent, any
Guarantor nor the Parent shall incur or suffer to exist any Lien on any of the
Leased Property or the Collateral other than (i) Permitted Liens, (ii) Liens
created under a ship mortgage in respect of the Barge Equipment and Casino
Barges that collateralize Pari Passu Indebtedness (as defined in the Indenture)
only, but only if the lender or lenders of the Pari Passu Indebtedness are bound
by the Intercreditor Agreement, (iii) Liens in respect of the Casino Barges
securing Pari Passu Indebtedness (as defined in the Indenture) in compliance
with Section 9.13(g) and (iv) security interests created or purported to be
created under the Uniform Commercial Code on Financed Property (as defined in
Section 9.13(f)) to be located on the Casino Barges, Levee Land, the Hotel or
the Hotel Site; it being understood that Lessee will not secure such Financed
Property (as defined in Section 9.13(f)) by granting a ship mortgage under the
Ship Mortgage Act contained in Chapter 313 of Title 46 United States Code with
respect thereto.

SECTION 5.6. Financial Covenant Compliance Certificates.

(a) Annual Certificate. Within 90 days after the close of each
Fiscal Year, the Lessee shall deliver to the Trustee, the Agent, and
each Lender a certificate of the Lessee signed by a Responsible Officer
of the Lessee to the effect that the signer is familiar with or has
reviewed the relevant terms of this Agreement, the Lease and each other
Operative Document to which the Lessee is a party and has made, or
caused to be made under his or her supervision, a review of the
transactions contemplated hereby and thereby and the condition of the
Leased Property during the preceding Fiscal Year, and that such review
has not disclosed the existence during such Fiscal Year of any
condition or event which constitutes a Lease Event of Default or
Casualty (except as described therein), nor does the signer have
knowledge, after due inquiry, of the existence as at the date of such
certificate, of any condition or event which constitutes a Lease
Default, a Lease Event of Default or Casualty or, if any such condition
or event existed or exists, specifying the nature and period of
existence thereof and what action such Lessee has taken or is taking or
proposes to take with respect thereto.

(b) Financial Covenant Compliance Certificate. Within 45 days
after the end of each Fiscal Quarter, Lessee shall deliver or cause to
be delivered to Agent and Trustee a Financial Covenant Compliance
Certificate (with appropriate insertions) of the Parent signed by a
Responsible Officer of the Parent showing (in reasonable detail and
with appropriate calculations and computations in all respects
satisfactory to Agent) compliance with the financial covenants set
forth in Section 5.16 and any other related information requested by
Agent.

(c) Pricing Ratio Certificate. Within 15 Business Days after
the end of each Fiscal Quarter, the Lessee shall deliver or cause to be
delivered to Agent and Trustee a Pricing Ratio Certificate of the
Parent signed by a Responsible Officer of the Parent (in reasonable
detail and with appropriate calculations and computations in all
respects satisfactory to Agent). Except as otherwise set forth below,
the Applicable Commitment Fee Rate for any Fiscal Quarter and
Applicable Margin for any Interest Period commencing in any Fiscal
Quarter shall be based on the Pricing Ratio determined as of the end of
the immediately preceding Fiscal Quarter. If Lessee fails to deliver or
cause to be delivered such Pricing Ratio Certificate on or before the
date such information is required to be delivered, then (i) for the
purposes of Section 2.6 of the Loan Agreement and Section 2.11, the
Applicable Commitment Fee Rate shall be .500% for the period commencing
on the first date of the Fiscal Quarter in which such Pricing Ratio
Certificate was supposed to be delivered and ending on the date of
delivery of the Pricing Ratio Certificate (at which time the Applicable
Commitment Fee Rate shall be calculated based on the Pricing Ratio
Certificate), and (ii) the Applicable Margin shall be 2.50% for each
Interest Period occurring during each month of the Fiscal Quarter in
which the Pricing Ratio Certificate was supposed to be delivered (and
upon delivery of the Pricing Ratio Certificate, the next commencing
Interest Period shall be based upon such Pricing Ratio Certificate
unless a more current Pricing Ratio Certificate has been delivered in
respect of a new Fiscal Quarter).

SECTION 5.7. Investigation by Governmental Authorities. Lessee shall
deliver to the Trustee, each Lender and to the Agent promptly upon the Lessee's
receiving written notice of the intent by a Governmental Authority to (w)
revoke, suspend, enjoin, restrict or modify any Gaming Permit or Liquor Permit
necessary for the ownership or operation of the Casino or gaming operations in
respect thereof, or the Hotel, (x) take an action which would constitute a
requisition of title to any of the Leased Property, (y) investigate the Leased
Property for a material violation of any Applicable Laws with respect to the
Leased Property, including any Environmental Law, under which liability may be
imposed upon the Trustee, any Lender, the Agent or the Lessee, or (z)
investigate the Leased Property (other than routine fire, life-safety and
similar inspections) for any violation of Applicable Laws under which criminal
liability may be imposed upon the Trustee, any Lender, Agent or the Lessee.

SECTION 5.8. Books and Records. Lessee will, at all times maintain
corporate books and records separate from those of any other Person in
accordance with GAAP.

SECTION 5.9. Payment of Taxes, Etc. Lessee shall pay and discharge
before the same shall become delinquent, (i) all taxes, assessments and
governmental charges or levies imposed upon it or upon its property (including
the Leased Property), and (ii) all lawful claims that, if unpaid, might by law
become a Lien upon its property, other than those arising from Permitted Liens.

SECTION 5.10. Inspection. Lessee shall permit the Agent, the Trustee
and the Lenders or any agents or representatives thereof annually (or upon
demand during an Event of Default) to (upon reasonable notice) examine and make
copies of and abstracts from the records and books of account of, the Lessee
(except for any proprietary information which involves trade secrets of the
Lessee) and to discuss the affairs, finances and accounts of the Lessee with any
of its officers. Agent, Trustee, the Lenders and any agents or representatives
thereof shall keep confidential and not disclose any confidential written
information received from Lessee in connection with such inspections, subject to
the Agent's, Trustee's or the Lenders' (a) obligation to disclose such
information pursuant to an order under Applicable Laws and regulations or
pursuant to a subpoena or other legal process, (b) right to disclose any such
information to its bank examiners, Affiliates, auditors, counsel and other
professional advisors but only on a need to know basis in connection with the
Operative Documents and only if such Persons are similarly bound in a separate
writing to the provisions of this Section 5.10, (c) right to disclose any such
information in connection with any litigation or dispute involving the Parent
and the Lessee or any of its Subsidiaries and Affiliates and (d) right to
provide such information to participants to which sales of participating
interests are permitted pursuant to this Participation Agreement and prospective
assignees to which assignments of interest are permitted pursuant to this
Participation Agreement, but only if such participant or prospective assignee
agrees in writing to maintain the confidentiality of such information on terms
substantially similar to those of this Section as if it were a "Lender" party
hereto. Notwithstanding the foregoing, any such information supplied to a
participant or prospective assignee under this Participation Agreement shall
cease to be confidential information if it is or becomes known to such Person by
other than unauthorized disclosure, or if it becomes a matter of public
knowledge. Lessee shall upon reasonable notice from the Agent (except that no
notice shall be required if an Event of Default has occurred and is continuing)
permit the Agent, the Trustee and the Lenders and their respective authorized
representatives to inspect the Leased Property during normal business hours,
provided that such inspections shall not unreasonably interfere with the
Lessee's business operations at the Leased Property. Annual inspections by the
Agent and all inspections following the occurrence of an Event of Default shall
be conducted at the cost and expense of Lessee.

SECTION 5.11. Maintenance of Property, etc. Lessee shall maintain and
preserve all material assets used or useful in the conduct of its business in
good working order and condition.

SECTION 5.12. Maintenance of Insurance. Lessee shall maintain insurance
coverage covering the Leased Property which meets in all respects the
requirements of Article IX of the Lease, and such coverage shall remain in full
force and effect. Without limiting the foregoing, Lessee shall carry insurance
with reputable insurers, or self-insure, in respect of its material assets, in
such manner, in such amounts and against such risks as is customarily maintained
by other Persons of similar size engaged in similar business.

SECTION 5.13. Change of Name or Principal Place of Business. Lessee
shall furnish to the Trustee, the Agent and the Lenders notice on or before the
thirtieth day before any relocation of its chief executive office, principal
place of business or the office where it keeps its records concerning its
accounts or contract rights relating to the Leased Property or the Property or
Lessee changes its name, identity or corporate structure.

SECTION 5.14. Financial and Other Information. Parent and
the Lessee shall deliver to the Trustee, each Lender and the
Agent the following financial and other information:

(a) Audited Statements. As soon as available and in any event
within 90 days after the end of each Fiscal Year of the Parent, a
consolidated balance sheet of the Parent and its Consolidated
Subsidiaries as of the end of such Fiscal Year and the related
consolidated statements of operations, cash flows and common
shareholders' equity for such Fiscal Year, setting forth in each case
in comparative form the figures for the previous Fiscal Year, with such
consolidated financial statements audited by independent public
accountants of nationally recognized standing acceptable to the Agent,
which such report shall be without qualifications other than
qualifications acceptable to all Lenders, together with a certificate
from such accountant containing a computation of, and showing
compliance with, each of the financial ratios and levels contained in
Section 5.16 and to the effect that, in making the examination
necessary for the signing of such annual report by such accountants,
they have not become aware of any Default or Event of Default that has
occurred and is continuing, or, if they have become aware of such
Default or Event of Default, describing such Default or Event of
Default and the steps, if any, being taken to cure it.

(b) Quarterly Statements. As soon as available and in any
event within 45 days after the end of each of the first three quarters
of each Fiscal Year of the Parent, the consolidated balance sheet of
the Parent and its Consolidated Subsidiaries as of the end of such
quarter and the related consolidated statement of operations and cash
flows of the Parent and its Consolidated Subsidiaries for the portion
of the Parent's Fiscal Year ended at the end of such quarter, setting
forth in each case in comparative form the figures for the
corresponding quarter of, and the corresponding portion of the Parent's
preceding Fiscal Year, all certified (subject, in the case of such
quarterly financial statements, to normal year-end auditing
adjustments) by the chief financial officer of Parent as to fairness of
presentation and preparation in accordance with GAAP applied on a basis
consistent with those used in preparing the financial statements
referred to in Section 5.14(a) (subject to such changes in accounting
principles as shall be described in such certificate and shall have
been approved in writing attached to such certificate by the Parent's
independent accountants).

(c) Pension Plan. If and when any member of the ERISA Group
(1) gives or is required to give notice to the PBGC of any "reportable
event" (as defined in Section 4043 of ERISA) with respect to any Plan
which might constitute grounds for a termination of such Plan under
Title IV of ERISA, or knows that the plan administrator of any Plan has
given or is required to give notice of any such reportable event, a
copy of the notice of such reportable event given or required to be
given to the PBGC; (2) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been
terminated, a copy of such notice; (3) receives notice from the PBGC
under Title IV of ERISA of an intent to terminate, impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or
appoint a trustee to administer any Plan, a copy of such notice; (4)
applies for a waiver of the minimum funding standard under Section 412
of the Code, a copy of such application; (5) gives notice of intent to
terminate any Plan under Section 4041(c) of ERISA, a copy of such
notice and other information filed with the PBGC; (6) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of
such notice; or (7) fails to make any payment or contribution due any
Plan or Multiemployer Plan or in respect of any Benefit Arrangement or
makes any amendment to any Plan or Benefit Arrangement which has
resulted or could result in the imposition of a Lien or the posting of
a bond or other security, a certificate of the chief financial officer
or the chief accounting officer of the Parent setting forth details as
to such occurrence and action, if any, which the Parent or applicable
member of the ERISA Group is required or proposes to take.

(d) Default. As soon as possible and in any event within three
Business Days after the occurrence of each Default or Event of Default
under any Operative Document a statement of an officer of the Parent
setting forth details of such Default or Event of Default and the
action that the Parent proposes to take with respect thereto.

(e) Condition. Promptly upon becoming aware thereof,
written notice of any Material Adverse Effect.

(f) Proceedings. Promptly upon becoming aware thereof, written
notice of the commencement or existence of any proceeding against the
Parent or any Affiliate of the Parent by or before any Governmental
Authority that might, in the reasonable judgment of the Parent, result
in a Material Adverse Effect.
(g) Environmental. As soon as possible and in any event within
ten days after the occurrence of any Environmental Violation or alleged
Environmental Violation, a statement of an authorized officer setting
forth the details of such violation or alleged violation and the action
which the Parent proposes to take with respect thereto.

(h) Security Reports. As soon as available and in any event
within 60 days after the end of each of the first three Fiscal Quarters
of each Fiscal Year of Parent, Form 10Qs of Parent shall have been
delivered to Trustee (with copies for each Lender) and within 105 days
after the end of each Fiscal Year of Parent, Form 10K of Parent shall
have been delivered to the Trustee (with copies for each Lender).

(i) Other Information. Promptly upon written
request therefore, any other information in respect of the
Parent or Lessee reasonably requested by the Agent.

SECTION 5.15. Securities. Neither the Lessee nor the Parent, nor anyone
authorized to act on behalf of any of them, will take any action which would
subject the issuance or sale of the Notes, the Leased Property or the Lease, or
in any security or lease the offering of which, for purposes of the Securities
Act or any state securities laws, would be deemed to be part of the same
offering as the offering of the aforementioned securities or leases to the
registration requirements of Section 5 of the Securities Act or any state
securities laws.

SECTION 5.16. Financial Covenants.

(a) Fixed Charge Coverage. Parent shall maintain a ratio of
Consolidated Adjusted EBITDA to Consolidated Fixed Charges, calculated
as of the last day of each Computation Period, of not less than the
ratio set forth below:

Period Ratio

Closing Date through 12/30/97 1.15:1.0
12/31/97 and thereafter 1.25:1.0

(b) Consolidated Net Worth. The Consolidated Net Worth of the
Parent shall not at any time be less than an amount equal to the sum of
(x) the Consolidated Net Worth of the Parent for the Fiscal Year ended
December 31, 1995 plus (1) 75% of Consolidated Net Income of the Parent
beginning with the first Fiscal Quarter of the 1996 Fiscal Year, and
calculated quarterly thereafter for each subsequent Fiscal Quarter,
plus (2) 100% of the proceeds from the issuance by the Parent of an
equity interest in the Parent or a Subsidiary (other than Stratosphere
Corporation and its Subsidiaries) to one or more Persons unaffiliated
with Parent, or the Ownership Percentage Interest of the proceeds from
the issuance by a Subsidiary (other than Stratosphere Corporation and
its Subsidiaries) of an equity interest in such Subsidiary to one or
more Persons unaffiliated with the Parent. Any Consolidated Net Losses
of Parent incurred in the 1996 Fiscal Year and thereafter shall not be
subtracted in computing Consolidated Net Worth of Parent.

(c) Consolidated Adjusted Senior Funded Debt/Consolidated
Adjusted EBITDA Ratio. Parent shall maintain a ratio of Consolidated
Adjusted Senior Funded Debt to Consolidated Adjusted EBITDA, calculated
as of the last day of each Computation Period, of not greater than the
ratio set forth below:

Period Ratio

Closing Date through 12/30/96 4.25:1.0
12/31/96 through 6/29/97 3.75:1.0
6/30/97 through 12/30/97 3.50:1.0
12/31/97 and thereafter 3.00:1.0

(d) Consolidated Adjusted Total Funded Debt/Consolidated
Adjusted EBITDA Ratio. Parent shall maintain a ratio of Consolidated
Adjusted Total Funded Debt to Consolidated Adjusted EBITDA, calculated
as of the last day of each Computation Period, of not greater than the
ratio set forth below:

Closing Date through 12/30/96 4.25:1.0
12/31/96 and thereafter 4.00:1.0

(e) For purposes of computing the financial covenants set
forth in Sections 5.16(a), (c) and (d), acquisitions, dispositions and
discontinued operations that have been made by Parent or any of its
Consolidated Subsidiaries, including all mergers, consolidations and
dispositions, during the Computation Period, shall be calculated on a
pro forma basis assuming that all such acquisitions, dispositions,
discontinued operations, mergers and consolidations (and the reduction
of any associated fixed charge obligations resulting therefrom) had
occurred on the first day of the Computation Period in question.

SECTION 5.17. Ship Mortgage. Subject to the terms of the Intercreditor
Agreement, immediately following the filing of the first priority ship mortgage
with respect to the Casino Barge pursuant to Section 4.20(c) of the Indenture,
Lessee shall file and record in the appropriate United States Coast Guard
offices an executed Ship Mortgage, substantially in the form of Exhibit G-2, and
take or cause to be taken all further action required to cause the Equipment
subject to the Lease and located on the Casino Barges to become subject to a
Lien in favor of the Agent and the Lenders and shall deliver or cause to be
delivered to Agent such legal opinions, certificates or other documents with
respect to such Ship Mortgage as the Agent may reasonably request, including a
legal opinion from Terriberry, Carroll & Yancy, LLP, maritime counsel to Lessee,
as to the matters set forth in the form of Exhibit N-3. Immediately prior to the
date of filing the Ship Mortgage, Lessee shall deliver to Agent a report, as of
a date immediately prior to such filing, of Liens and other encumbrances of
record with respect to the Casino Barge with the United States Coast Guard.

SECTION 5.18. Searches and Estoppel Certificates. Within 30 days after
the earlier to occur of (i) the Completion Date and (ii) June 30, 1997, Lessee
shall deliver to Agent (a) a report prepared by a search company reasonably
acceptable to Agent, of judgment liens, lis pendens, tax liens and UCC filings
with respect to Lease Supplements, which are filed of record with the applicable
state and local filing offices in the jurisdictions or jurisdictions in which
such Leased Property is located and the state in which Lessee has its "principal
place of business" and "chief executive office" (as such terms are used in
Section 9- 103(c) of the UCC), (b) an estoppel certificate addressed to the
Agent and the Trustee from each vendor listed on the Disclosure Schedule to the
effect that the purchase price for the items of Equipment sold to the Lessee by
the vendor pursuant to the purchase orders or purchase contracts listed on the
Disclosure Schedule opposite its name have been paid in full and (c) a revised
Schedule VII indicating the total Equipment Cost for all items of Equipment then
subject to the Lease. Such revised Schedule VII shall be based upon the purchase
orders and purchase contracts, as modified from time to time after the Closing
Date, in accordance with the Operative Documents.

SECTION 5.19. Amendment of Levee Board Lease. Lessee agrees that it
shall at all times comply with and diligently perform its obligations under the
Levee Board Lease. No amendment, modification, change or supplement to the Levee
Board Lease shall be entered into by the Lessee that is adverse to the interests
of the Trustee, the Agents or the Lenders, unless the Lessee has obtained the
prior consent of the Lenders. Lessee shall deliver to the Trustee, (with
sufficient copies for the Lenders) copies of all amendments, modifications,
changes or supplements to the Levee Board Lease.

SECTION 5.20. Changes to Contracts for a System. Lessee may enter into
modifications of the contracts for the System, provided that any modifications,
when taken together with any previous modifications to any System, that would
reduce the fair market value or economic useful life or utility of any System
shall not be made without the Agents' prior written consent.

SECTION 5.21. Compliance with Laws. With respect to the Leased Property
and the operation of the Hotel, Lessee, Construction Agent and Guarantors shall
comply with Applicable Laws, except for any violations which, individually or in
the aggregate, would not have a Material Adverse Effect.

SECTION 5.22. No Vessel Redocumentation. Lessee will not attach a barge
or vessel to a Casino Barge in such a manner that would cause the Casino Barge
or the Casino Barges to need to be redocumented under the maritime laws.

ARTICLE VI

COVENANTS OF TRUSTEE, AGENTS AND LENDERS

SECTION 6.1. Covenants of Trustee, Agents and the Lenders.

(a) Discharge of Liens. Each of the Lenders and the Trustee
covenants as to itself, and not jointly with any other Lender, that it
will not, directly or indirectly, create, incur, assume or permit to
exist at any time, and will, at its own cost and expense, take such
action as may be necessary to promptly discharge, or to cause to be
discharged, any Lessor Liens attributable to it, and will indemnify the
Trust Estate in the amount of any diminution of the value thereof and
any costs and expenses associated therewith as a result of its failure
to comply with its obligations under this Section 6.1(a).
Notwithstanding the foregoing, none of the Lenders or the Trustee, as
the case may be, shall be required to so discharge any such Lessor Lien
while the same is being contested in good faith by appropriate
proceedings diligently prosecuted so long as such proceedings shall not
involve any risk of invalidity or the loss of priority of the Lien of
the Deed of Trust or any risk of the sale, forfeiture, foreclosure or
loss of, and shall not interfere with the use or disposition of, any
part of the Leased Property, the Lease or the Trust Estate or title
thereto or any interest therein or the payment of Rent; provided,
however, that each Lender and the Trustee shall discharge any such
Lessor Lien, whether or not subject to contest as provided above, upon
the purchase of the Leased Property by the Lessee pursuant to the
Lease.

(b) Trust Agreement. Without prejudice to any right under the
Trust Agreement of the Trustee to resign, or the Lenders' or Lessee's
right under the Trust Agreement to remove the Trustee, the Trustee
hereby agrees with the Lessee, the Lenders and the Agent (i) not to
terminate or revoke the trust created by the Trust Agreement except as
permitted by Article IV of the Trust Agreement prior to the later of
the Lease Termination Date or the payment in full of the obligations
under the Notes, (ii) not to amend, supplement or otherwise modify or
consent to any amendment, supplement or modification of any provision
of the Trust Agreement prior to the Lease Termination Date in any
manner which would have a Material Adverse Effect on the rights of any
such party thereto, and (iii) to comply with all of the terms of the
Trust Agreement applicable to it except for such nonperformance which
would adversely affect the Trustee in its individual capacity.

(c) Successor Trustee. Trustee or any successor may resign or
be removed by the Lenders or Lessee as Trustee, a successor Trustee may
be appointed, and a corporation may become the Trustee under the Trust
Agreement, only in accordance with the provisions of Article III of the
Trust Agreement. Notwithstanding anything to the contrary contained in
this Agreement or the Trust Agreement, so long as no Event of Default
shall be continuing, the appointment of a successor Trustee shall be
subject to the consent of the Lessee (such consent is not to be
unreasonably withheld or delayed).

(d) Indebtedness; Other Business. Trustee on behalf of the
Trust shall not contract for, create, incur or assume any indebtedness,
or enter into any business or other activity, other than pursuant to or
under the Operative Documents and, for the benefit of the Lessee, the
Agent and the Lenders, agrees to be bound by Section 1.2(b) of the
Trust Agreement.

(e) Change of Principal Place of Business. Trustee shall give
prompt notice to the Lenders, the Lessee and the Agent if the Trustee's
principal place of business or chief executive office, or the office
where the records concerning the accounts or contract rights relating
to the Hotel or the transactions contemplated by the Operative
Documents are kept, shall cease to be located at One Hancock Plaza;
Gulfport, Mississippi 39502, or if it shall change its name, identity
or corporate structure.

(f) Loan Agreement. Trustee, Agent, Lessee and each Lender
hereby agree that, so long as the Lease is in effect, the Trustee shall
not consent to or permit any amendment of the terms and provisions of
the Loan Agreement, the Deed of Trust, the Ship Mortgage, the Ground
Lease or any Note, whether or not any Lease Event of Default shall have
occurred and be continuing, if any such amendment or action would have
the effect of increasing the obligations of the Lessee or decreasing
the rights of the Lessee, in each case without the prior written
consent of the Lessee, except that without such consent, the Trustee
may waive performance by the Agent of obligations to the Trustee the
non-performance of which does not adversely affect the Lessee. Each
Lender agrees to comply with Section 7.7 of the Loan Agreement.

(g) Funding. Trustee shall give prompt notice to the Lenders,
the Lessee and the Agent in the event any Lender does not fund the full
amount to be funded by such Lender on any Advance Date as described in
Article II.

(h) Lessee Financing Party Removal. If any of the Lessor, the
Trustee, the Lenders, the Co-Agents, the Lead Manager, the Arranger or
Agent (and any successors thereto) (each a "Lease Financing Party") is
found by any Gaming Authority to be unsuitable or unqualified for any
license, registration, approval or finding of suitability to serve as
Lessor, Trustee, Lender, Co-Agent, Lead Manager, Arranger or Agent, or
otherwise to be associated with the Lessee or any Guarantor, or the
Board of Directors of the Parent determines in its reasonable judgment
that such Lease Financing Party's continued association with the Lessee
or any Guarantor may result in (i) the disapproval, modification, or
non-renewal of any contract under which the Parent or any Subsidiary
thereof has sole or shared authority to manage any gaming operations,
or (ii) the loss or non-reinstatement of any license, registration,
approval, finding of suitability or franchise from any Gaming Authority
held by the Parent or any Subsidiary thereof to conduct any portion of
the business of the Parent or any Subsidiary thereof, such Lease
Financing Party agrees, upon receiving payment in cash in full of all
outstanding principal amounts, accrued interest, fees and all other
amounts payable to it under the Operative Documents, to cooperate with
the Parent with respect to the assignment, sale or transfer of such
Lease Financing Party's interest in the Operative Documents as Lessor,
Trustee, Lender, Co- Agent, Lead Manager, Arranger or Agent, as
appropriate, to a suitable party and complete such assignment, sale or
transfer within thirty (30) days of a request by the Parent to do so
(or such lesser period of time as required by any Gaming Authority).

SECTION 6.2. Restrictions On and Effect of Transfer. No Lender shall
assign and delegate all or any portion of its right, title or interest in, to or
under any of the Operative Documents, its Commitment, the Loans or any Note,
except that (x) any Lender may pledge, assign or grant a security interest in
its interest to any Federal Reserve Board or any other central bank authority
with respect to such Lender, (y) upon satisfaction of the conditions set forth
in clauses (a) through (e) of this Section 6.2 any Lender may transfer all or
any ratable portion of its interest to an Affiliate or to any other existing
Lender or any Affiliate of such Lender and, upon compliance with any applicable
provisions of Section 6.3(a), may sell, assign or otherwise transfer a
participation in its interest in any of the foregoing; provided, that no
Participating Entity (as hereinafter defined) shall become, by means of such
transfer, a Lender under the Operative Documents, and the Lessee shall be
entitled to continue to deal for all purposes under the Operative Documents
exclusively with the Lender who has transferred such participation, and (z) any
Lender may assign and delegate any ratable portion or all of such right, title
and interest upon the satisfaction of each of the following conditions (which
conditions will not be applicable to a transfer pursuant to clause (x) or (y) of
this Section 6.2):

(a) Required Notice and Effective Date. Any Lender desiring to
effect a transfer of its interest shall give written notice of each
such proposed transfer to Parent, Lessee and Agent at least seven (7)
Business Days prior to such proposed transfer, setting forth the name
of such proposed transferee, the percentage of interest to be retained
by such Lender, if any, and the date on which such transfer is proposed
to become effective. All reasonable out-of-pocket costs incurred by
Trustee or Agent in connection with any such disposition by a Lender
under this Section 6.2 shall be borne by such Lender. In the event of a
transfer under this Section 6.2(a), any expenses incurred by the
transferee in connection with its review of the Operative Documents and
its investigation of the transactions contemplated thereby shall be
borne by such transferee or the relevant Lender, as they may determine,
but shall not be considered costs and expenses which the Lessee is
obligated to pay or reimburse under Section 9.8.

(b) Assumption of Obligations. Any transferee pursuant to this
Section 6.2 shall have executed and delivered to the Agent and the Bank
a letter in substantially the form of the Investor's Letter attached
hereto as Exhibit L, and thereupon the obligations of the transferring
Lender under the Operative Documents shall be proportionately released
and reduced to the extent of such transfer. Upon any such transfer as
above provided, (i) the transferring Lender shall still be entitled to
the benefit of Article VII, and (ii) the transferee shall be deemed to
be bound by all obligations (whether or not yet accrued) under, and to
have become a party to, all Operative Documents to which its transferor
was a party, shall be deemed the pertinent "Lender" for all purposes of
the Operative Documents and shall be deemed to have made that portion
of the payments pursuant to this Agreement previously made or deemed to
have been made by the transferor represented by the interest being
conveyed; and each reference herein and in the other Operative
Documents to the pertinent "Lender" shall thereafter be deemed a
reference to the transferee, to the extent of such transfer, for all
purposes. Upon any such transfer, Schedules I, II, and III to this
Agreement, as applicable, shall be deemed to be revised to reflect the
relevant information for such new Lender and the Commitment of such new
Lender (and the revised Commitment of the transferor Lender if it shall
not have transferred its entire interest).

(c) Employee Benefit Plans. No Lender may make any such
assignment, conveyance or transfer to or in connection with any
arrangement or understanding in any way involving any Plan or Benefit
Arrangement (or its related trust), or with the assets of any such Plan
or Benefit Arrangement (or its related trust), within the meaning of
Section 4975(e)(1) of the Code (other than a governmental plan, as
defined in Section 3(32) of ERISA), with respect to which the Lessee or
such Lender or any of their Affiliates is a party in interest within
the meaning of ERISA Section 3(14) or a "disqualified person" within
the meaning of Section 4975(e)(2) of the Code.

(d) Representations and Warranties. Notwithstanding anything
to the contrary set forth above, no Lender may assign, convey or
transfer its interest to any Person unless such Person shall have
delivered to the Agent and the Lessee a certificate confirming the
accuracy of the representations and warranties set forth in Section 4.2
with respect to such Person (other than as such representation or
warranty relates to the execution and delivery of Operative Documents).

(e) Amounts. Any transfer of Notes shall be in a principal
amount which is equal to or greater than $5,000,000, or, if less, the
full amount of such Lender's Loan or Commitment.

(f) Financial Condition of Transferee. So long as the
Commitments are outstanding, no transfer by a Lender shall be effective
against the other parties to this Agreement unless the transferee is
(A) a bank or other financial institution with a combined capital,
surplus and undivided profits of at least $100,000,000, or (B) any
subsidiary of such a bank or financial institution, provided that such
bank or financial institution furnishes a guaranty with respect to the
transferee's obligations as a Lender, or (C) any other entity, provided
the transferee's obligations as a Lender are guaranteed by the
transferor Lender.

(g) Effect. From and after any transfer of its Notes, the
transferring Lender shall be released, to the extent assumed by the
transferee, from its liability and obligations hereunder and under the
other Operative Documents relating to the Leased Property to which such
transferor is a party in respect of obligations to be performed on or
after the date of such transfer. Upon any transfer by a Lender as above
provided, any such transferee shall be deemed a "Lender" for all
purposes of such documents and each reference herein to a Lender shall
thereafter be deemed a reference to such transferee for all purposes,
except as the context may otherwise require.

(h) Lessee Consent. So long as the Commitments are
outstanding, the transferees of an interest transferred pursuant to
this Section 6.2(h) shall have obtained the prior written consent of
the Lessee (so long as Lessee is not in Default under the terms of any
Operative Document), which consent may not be unreasonably withheld or
delayed by the Lessee.

Notwithstanding any transfer pursuant to this Section 6.2, the transferor shall
continue to be entitled to all benefits accrued and all rights vested prior to
such transfer, including rights to indemnification under this Agreement or any
other Operative Document.

SECTION 6.3. Participations.

(a) Participations. Each Lender covenants and agrees that it
will not grant participations in its Notes to any Person (a
"Participating Entity") unless such Person (i) is a bank or other
financial institution and (ii) represents and warrants, in writing, to
such Lender for the benefit of the Lenders and the Lessee that no part
of the funds used by it to acquire an interest in the Notes constitutes
assets of any Employee Benefit Plan or its related trust. Any such
transferor Lender shall require any transferee of its interest in the
Notes to make the representations and warranties set forth in the
preceding sentence, in writing, to such Person for its benefit and the
benefit of the Lenders and the Lessee. In the event of any such sale by
a Lender of a participating interest to a Participating Entity such
Lender's obligations under this Agreement and under the other Operative
Documents shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the
holder of its Note for all purposes under this Agreement and under the
other Operative Documents, and the Trustee, the Agent and, except as
set forth in Section 6.3(b), the Lessee shall continue to deal solely
and directly with such Lender in connection with such Lender's rights
and obligations under this Agreement and under the other Operative
Documents, and such Lender shall retain the sole right to enforce the
obligations of the Lessee and the Guarantors under the Operative
Documents and to approve any amendment, modification or waiver of any
provision of any Operative Document. Any Lender selling a participation
shall give notice thereof to the Lessee and the Parent within ten (10)
Business Days after such sale.

(b) Transferee Indemnities. Each Participating Entity shall be
entitled to the benefits of Sections 2.9, 2.10, 2.11 and 2.12 of the
Loan Agreement and Articles VII and VIII with respect to its
participation in the Notes and Advances outstanding from time to time;
provided, that no Participating Entity in respect of its participation
shall be entitled to receive any greater amount pursuant to such
Sections than the transferor Lender would have been entitled to receive
in respect of the amount of the participation in the Notes transferred
by such transferor Lender to such Participating Entity had no such
transfer of a participation occurred.

SECTION 6.4. Required Transfers. If at any time during the Lease Term
any Lender shall request from the Trustee or the Lessee reimbursement for any
costs pursuant to Section 2.9, 2.10 or 2.11 of the Loan Agreement (which cost
Lessee is obligated to pay as Supplemental Rent under Section 3.2 of the Lease),
such Lender shall, upon request of the Lessee or the Agent, attempt in good
faith to promptly sell to a Person who would qualify under Section 6.3(a) the
Notes held by such Lender, the Commitment of such Lender and any other interests
of such Lender hereunder and under the other Operative Documents, in accordance
with this Section 6.4, in exchange for an amount equal to the outstanding
principal amount of such Lender's Notes together with all interest accrued
thereon and unpaid to the date of such purchase and all other amounts then due
and payable hereunder or under the other Operative Documents to such Lender
(including any requested reimbursement amounts).

ARTICLE VII

GENERAL INDEMNITY

SECTION 7.1. General Indemnification. Lessee and the Parent agree,
whether or not any of the transactions contemplated hereby shall be consummated,
to assume liability for, and to indemnify, protect, defend, save and keep
harmless each Indemnitee on an After-Tax Basis from and against any and all
Claims that may be imposed on, incurred by or asserted against such Indemnitee
(whether because of action or omission by such Indemnitee or otherwise), whether
or not such Indemnitee shall also be indemnified as to any such Claim by any
other Person and whether or not such Claim arises or accrues prior to the
Closing Date or after the Lease Termination Date, in any way relating to or
arising out of (a) any of the Operative Documents or any of the transactions
contemplated thereby or any investigation, litigation or proceeding in
connection therewith, and any amendment, modification or waiver in respect
thereof; or (b) the Land or any part thereof or interest therein; or (c) the
acquisition, mortgaging, design, construction, preparation, installation,
inspection, delivery, non-delivery, acceptance, rejection, purchase, ownership,
possession, rental, lease, sublease, repossession, maintenance, repair,
alteration, modification, addition or substitution, storage, transfer of title,
redelivery, use, financing, refinancing, operation, condition, sale (including
any transfer pursuant to Section 5.2 of the Lease or any sale pursuant to
Section 5.1 of the Lease), return or other disposition of all or any part of any
interest in the Leased Property or the imposition of any Lien (or incurring of
any liability to refund or pay over any amount as a result of any Lien) thereon,
including: (i) Claims or penalties arising from any violation of law or in tort
(strict liability or otherwise), (ii) latent or other defects, whether or not
discoverable, and (iii) any Claim for patent, trademark or copyright
infringement, provided that the matters in this clause (c) shall be without
duplication of any matter for which indemnification is provided pursuant to the
Environmental Indemnity contained in Section 7.2; (d) the offer, issuance, sale
or delivery of the Notes; (e) the breach or alleged breach by the Lessee of any
representation or warranty made by it or deemed made by it in any Operative
Document; (f) the transactions contemplated hereby or by any other Operative
Document (except for any violation of Section 4.2(c), in respect of the
application of Parts 4 and 5 of Subtitle B of Title I of ERISA and any
prohibited transaction described in Section 4975(c) of the Code or (g) any other
agreement entered into or assumed by the Lessee in connection with the Leased
Property; provided, however, neither Lessee nor Parent shall be required to
indemnify under this Section 7.1 for any of the following: (1) as to an
Indemnitee, any Claim to the extent resulting from the willful misconduct or
gross negligence of such Indemnitee or, if such Indemnitee is the Bank, ordinary
negligence for the handling of funds (other than willful misconduct or gross
negligence imputed to such Indemnitee by reason of its participation in the
transactions contemplated hereby) or the breach by such Indemnitee of any
representation, warranty or covenant of such Indemnitee set forth in any
Operative Document, (2) as to an Indemnitee, any Claim resulting from a transfer
by such Indemnitee of all or any part of its interest in the Lease, the other
Operative Documents or the Leased Property, other than any such transfer either
required by the Lease (including a transfer as a result of a Casualty or a
transfer pursuant to Section 5.1 or 5.2 of the Lease) or any other Operative
Document or while a Lease Event of Default shall have occurred and be
continuing, (3) any Claims in respect of Taxes (such Claims to be subject to
Article VIII), other than a payment necessary to make payments under this
Section 7.1 on an After-Tax Basis, provided, that this exclusion does not apply
to any taxes or penalties included in Claims against which the Indemnitee is
provided an indemnification under subsection (f) of this Section 7.1 and (4) as
to an Indemnitee, any Claim resulting from Lessor Liens which such Indemnitee is
responsible for discharging under the Operative Documents. Lessee shall be
entitled to credit against any payments due under this Section 7.1 any insurance
recoveries received by an Indemnitee in respect of the related Claim under or
from insurance paid for by the Lessee or assigned to the Trustee by the Lessee.

If the Lessee shall obtain actual knowledge of any Claim indemnified
against under this Section 7.1, the Lessee shall give prompt notice thereof to
the appropriate Indemnitee or Indemnitees, and if any Indemnitee shall obtain
actual knowledge of any Claim indemnified under this Section 7.1, such
Indemnitee shall give prompt notice thereof to the Lessee, provided that failure
to so notify the Lessee shall release the Lessee from its obligations to
indemnify hereunder only if and to the extent that such failure results in a
forfeiture by the Lessee of substantive rights and defenses. With respect to any
amount that the Lessee is requested by an Indemnitee to pay by reason of this
Section 7.1, such Indemnitee shall, if so requested by the Lessee and prior to
any payment, submit such additional information to the Lessee as the Lessee may
reasonably request and which is reasonably available to such Indemnitee to
substantiate properly the requested payment.

In case any action, suit or proceeding shall be brought against any
Indemnitee for which the Indemnitee is indemnified under this Section 7.1 or
7.2, such Indemnitee shall notify the Lessee of the commencement thereof, and
the Lessee shall be entitled, at its expense, acting through counsel reasonably
acceptable to such Indemnitee, to participate in, and, to the extent that the
Lessee desires to, assume and control the defense thereof; provided, however,
that the Lessee shall have acknowledged in writing its obligation to fully
indemnify such Indemnitee in respect of such action, suit or proceeding; and
provided, further, that the Lessee shall not be entitled to assume and control
the defense of any such action, suit or proceeding if and to the extent that,
(A) in the reasonable opinion of such Indemnitee, (x)(i) such action, suit or
proceeding involves any risk of imposition of criminal liability or (ii) such
action, suit or proceeding involves any material risk of material civil
liability on such Indemnitee or will involve a material risk of the sale,
forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien)
on the Leased Property, the Trust Estate or any part thereof, unless, in the
case of this clause (x)(ii), the Lessee shall have posted a bond or other
security satisfactory to the relevant Indemnitees in respect to such risk or (y)
the control of such action, suit or proceeding would involve a bona fide
conflict of interest, (B) such proceeding involves Claims not fully indemnified
by the Lessee which the Lessee and the Indemnitee have been unable to sever from
the indemnified Claim(s), (C) a Default or a Lease Event of Default has occurred
and is continuing or (D) such action, suit or proceeding involves matters which
extend beyond or are unrelated to the transactions contemplated by the Operative
Documents and if determined adversely could be materially detrimental to the
interests of such Indemnitee notwithstanding indemnification by the Lessee.
Indemnitee, on the one hand, and Lessee and Parent, on the other hand, may
participate in a reasonable manner at its own expense and with its own counsel
in any proceeding conducted by the other in accordance with the foregoing.

Each Indemnitee shall at the Lessee's expense supply the Lessee with
such information and documents reasonably requested by the Lessee as are
necessary or advisable for the Lessee to participate in any action, suit or
proceeding to the extent permitted by this Section 7.1 or 7.2. Unless a Lease
Event of Default shall have occurred and be continuing, no Indemnitee shall
enter into any settlement or other compromise with respect to any Claim which is
entitled to be indemnified under this Section 7.1 or 7.2 without the prior
written consent of the Lessee, which consent shall not be unreasonably withheld
or delayed, unless such Indemnitee waives its right to be indemnified under this
Section 7.1 or 7.2 with respect to such Claim. In addition, if an Indemnitee, in
violation of Lessee's right to assume and control the defense of any Claim,
refuses to permit Lessee to control the defense after written demand by Lessee
for such control, such Indemnitee waives its right to be indemnified under
Section 7.1 or 7.2 with respect to such Claim.

Upon payment in full of any Claim by the Lessee pursuant to this
Section 7.1 to or on behalf of an Indemnitee, the Lessee, without any further
action, shall be subrogated to any and all claims that such Indemnitee may have
relating thereto (other than claims in respect of insurance policies maintained
by such Indemnitee at its own expense), and such Indemnitee shall execute such
instruments of assignment and conveyance, evidence of claims and payment and
such other documents, instruments and agreements as may be necessary to preserve
any such claims and otherwise cooperate with the Lessee and give such further
assurances as are necessary or advisable to enable the Lessee vigorously to
pursue such claims.

Any amount payable to an Indemnitee pursuant to this Section 7.1 shall
be paid to such Indemnitee promptly upon receipt of a written demand therefor
from such Indemnitee, accompanied by a written statement describing the basis
for such indemnity and the computation of the amount so payable and, if
requested by the Lessee, such determination shall be verified by a nationally
recognized independent accounting firm mutually acceptable to the Lessee and the
Indemnitee at the Lessee's expense.

SECTION 7.2. Environmental Indemnity. Without limitation of the other
provisions of this Article VII, Lessee hereby agrees to indemnify, hold harmless
and defend each Indemnitee on an After-Tax Basis from and against any and all
Claims (including third party Claims for personal injury or real or personal
property damage), all costs incurred in connection with any investigation or
monitoring of site conditions or any clean-up, remedial, removal or restoration
work by any federal, state or local government agency, arising in whole or in
part, out of or in any way relating to

(i) the presence or alleged presence on or under the Land of
any Hazardous Material, or any releases or discharges of any Hazardous
Material on, under, from or onto the Land,

(ii) any activity, including construction, carried on or
undertaken on or off the Land, whether by Lessee or any predecessor in
title or any employees, agents, contractors or subcontractors of Lessee
or any predecessor in title, or any other Persons (including such
Indemnitee), in connection with the handling, treatment, removal,
storage, decontamination, clean-up, transport or disposal of any
Hazardous Material that are located or present on or under or that
migrate, flow, percolate, diffuse or in any way move onto or under the
Land,

(iii) loss of or damage to any property or the environment
(including clean-up costs, response costs, remediation and removal
costs, costs of corrective action, costs of financial assurance, fines
and penalties and natural resource damages), or death or injury to any
Person, and all expenses associated with the protection of wildlife,
aquatic species, vegetation, flora and fauna, and any mitigative action
required by or under Environmental Laws, in connection with the Land,
any activities undertaken thereon or the actions of Lessee or
Construction Agent,

(iv) in connection with the Land, any activities undertaken
thereon or the actions of Lessee or Construction Agent, any claim
concerning lack of compliance with Environmental Laws, or any act or
omission causing an environmental condition that requires remediation
or would allow any Governmental Authority to record a Lien on the land
records, or

(v) any residual contamination on or under the Land, including
any such contamination affecting any natural resources, and any
contamination of any property or natural resources arising in
connection with the generation, use, handling, storage, transport or
disposal of any Hazardous Substances on the Land or by Lessee or
Construction Agent, and irrespective of whether any of such activities
were or will be undertaken in accordance with applicable laws,
regulations, codes and ordinances;

but Lessee shall not be required to indemnify any Indemnitee under this Section
7.2 for (1) any Claim to the extent resulting from the willful misconduct or
gross negligence of such Indemnitee, or any Affiliate of such Indemnitee (it
being understood that, unless the applicable Indemnitee was in possession of the
Land and caused the Claim, Lessee shall be required to indemnify an Indemnitee
even if the ordinary (but not gross) negligence of such Indemnitee, or any
Affiliate of such Indemnitee, caused or contributed to such Claim) or (2) except
with respect to the Trustee, any Claim to the extent attributable to acts or
events occurring after the expiration of the Lease Term so long as Trustee and
the Lenders are not exercising remedies against Lessee in respect of the
Operative Documents. The indemnity provided for herein shall not include any
matters with respect to Taxes. The indemnity provided for herein shall survive
the expiration or termination of and shall be separate and independent from any
remedy under the Lease or any other Operative Document.

ARTICLE VIII

GENERAL TAX INDEMNITY

SECTION 8.1. General Tax Indemnity. Except as otherwise provided in
this Section 8.1, the Lessee shall pay on an After- Tax Basis, and on written
demand shall indemnify and hold each Indemnitee harmless from and against, any
and all fees (including documentation, recording, license and registration
fees), taxes (including income (whether net, gross or adjusted gross, whether
domestic or foreign), gross receipts, sales, rental, use, turnover, value-added,
property, excise and stamp taxes), levies, imposts, duties, charges, assessments
or withholdings of any nature whatsoever, together with any penalties, fines or
interest thereon or additions thereto (any of the foregoing being referred to
herein as "Taxes" and individually as a "Tax") imposed on or with respect to any
Indemnitee, the Land, the Leased Property or any portion thereof, any Operative
Document or the Lessee or any sublessee or user of the Leased Property, by any
foreign authority, the United States or by any state or local government or
other taxing authority in the United States in connection with or in any way
relating to (i) the acquisition, mortgaging, design, construction, preparation,
installation, inspection, delivery, non-delivery, acceptance, rejection,
purchase, ownership, possession, rental, lease, sublease, repossession,
maintenance, repair, alteration, modification, addition or substitution,
storage, transfer of title, redelivery, use, financing, refinancing, operation,
condition, sale, return or other application or disposition of all or any part
of the Land or the Leased Property or the imposition of any Lien (or incurrence
of any liability to refund or pay over any amount as a result of any Lien)
thereon, (ii) Rent or the receipts or earnings arising from or received with
respect to the Leased Property or any part thereof, or any interest therein or
any applications or dispositions thereof, (iii) any other amount paid or payable
pursuant to the Notes, or any other Operative Documents, the property or the
income or other proceeds with respect to the property held in the Trust Estate,
(iv) the Leased Property or any part thereof or any interest therein, (v) all or
any of the Operative Documents, any other documents contemplated thereby and any
amendments and supplements thereto, and (vi) otherwise with respect to or in
connection with the transactions contemplated by the Operative Documents;
provided, that the Lessee's indemnification obligation hereunder in respect of
any Tax shall be net of any foreign, federal,state or local income tax benefits
which are recognized by the relevant Tax Indemnitee as a result of the
imposition of such Tax).

SECTION 8.2. Exclusions from General Tax Indemnity. Section 8.1 shall
not apply to:

(a) Taxes on, based on, or measured by or with respect to the
net income of an Indemnitee (including minimum Taxes, capital gains
Taxes, Taxes on or measured by items of tax preference or alternative
minimum Taxes) other than (A) any such Taxes that are, or are in the
nature of, sales, use, rental (other than Taxes imposed on net rental
income) or property Taxes, (B) withholding Taxes imposed by the United
States or Mississippi (I) on payments with respect to the Notes, or
(II) on Rent, to the extent the net payment of Rent after deduction of
such withholding Taxes would be less than amounts currently payable
with respect to the Notes and (C) any such Taxes imposed on such
Indemnitee by any state (other than Mississippi) or local taxing
authority in such state to the extent such Taxes are imposed as a
result of the Lessee moving the Leased Property or any part thereof to
such state;

(b) Taxes that are based on, measured by or imposed with
respect to the fees or other compensation received by a Person acting
as Trustee or Agent (in their respective individual capacities) or any
Affiliate of any thereof for acting as trustees under the Trust
Agreement or the Loan Agreement, respectively;

(c) Taxes that result from any act, event or omission, or are
attributable to any period of time, that occurs after the earliest of
(A) the expiration of the Lease Term with respect to the Leased
Property and, if the Leased Property is required to be returned to the
Trustee in accordance with the Lease, such return and (B) the discharge
in full of the Lessee's obligations to pay the Lease Balance, or any
amount determined by reference thereto, with respect to the Leased
Property and all other amounts due under the Lease and other Operative
Documents, unless such Taxes (and interest, penalties and late charges
related thereto) relate to acts, events or matters occurring prior to
the earliest of such times or are imposed on or with respect to any
payments due or actions required under the Operative Documents after
such expiration or discharge; or

(d) Taxes imposed on an Indemnitee that result from any
voluntary sale, assignment, transfer or other disposition by such
Indemnitee or any related Indemnitee of any interest in the Leased
Property or any part thereof, or any interest therein or any interest
or obligation arising under the Operative Documents or any Notes, or
from any sale, assignment, transfer or other disposition of any
interest in such Indemnitee or any related Indemnitee, it being
understood that each of the following shall not be considered a
voluntary sale, assignment, transfer or other disposition: (A) any
substitution, replacement or removal of any of the Leased Property by
Lessee, (B) any sale or transfer resulting from the exercise by Lessee
of any early termination option, (C) any transfer under Section 5.2 of
the Lease or Section 3.11 of the Trust Agreement and (D) any sale or
transfer while a Lease Event of Default shall have occurred and be
continuing under the Lease.

SECTION 8.3. Contests. If any Claim shall be made against any
Indemnitee or if any proceeding shall be commenced against any Indemnitee
(including a written notice of such proceeding) for any Taxes as to which Lessee
may have an indemnity obligation pursuant to Section 8.1, or if any Indemnitee
shall determine that any Taxes as to which Lessee may have an indemnity
obligation pursuant to Section 8.1 may be payable, such Indemnitee shall
promptly notify Lessee. Lessee shall be entitled, at its expense, acting through
counsel reasonably acceptable to such Indemnitee, to participate in, and, to the
extent that Lessee desires to, assume and control the defense thereof; provided,
however, that Lessee shall have acknowledged in writing its obligation to
indemnify fully such Indemnitee in respect of such action, suit or proceeding;
and, provided, further, that Lessee shall not be entitled to assume and control
the defense of any such action, suit or proceeding if and to the extent that (A)
Lessee is not able to provide such Indemnitee with a legal opinion of counsel
reasonably acceptable to such Indemnitee that such action, suit or proceeding
does not involve (x) a risk of imposition of criminal liability or (y) any
material risk of material civil liability on such Indemnitee and will not
involve a material risk of the sale, forfeiture or loss of, or the creation of
any Lien (other than a Permitted Lien) on the Leased Property, the Deed of Trust
Estate, the Trust Estate or any part thereof, unless, in the case of this clause
(y), Lessee contemporaneously with such opinion shall have posted a bond or
other security satisfactory to the relevant Indemnitee in respect to such risk,
(B) the control of such action, suit or proceeding would involve a bona fide
conflict of interest, (C) such proceeding involves Claims not fully indemnified
by Lessee which Lessee and the Indemnitee have been unable to sever from the
indemnified claim(s), (D) a Lease Event of Default has occurred and is
continuing or (E) such action, suit or proceeding involves matters which extend
beyond or are unrelated to the transaction contemplated by the Operative
Documents and if determined adversely could be materially detrimental to the
interests of such Indemnitee notwithstanding indemnification by Lessee. The
Indemnitee, on the one hand, and Lessee and Parent, on the other hand, may
participate in a reasonable manner at its own expense and with its own counsel
in any proceeding conducted by each other in accordance with the foregoing.

Each Indemnitee shall at Lessee's expense supply Lessee with such
information and documents reasonably requested by Lessee as are necessary or
advisable for Lessee to participate in any action, suit or proceeding to the
extent permitted by this Section 8.3. Unless a Lease Event of Default shall have
occurred and be continuing, no Indemnitee shall enter into any settlement or
other compromise with respect to any Claim which is entitled to be indemnified
under this Section 8.3 without the prior written consent of Lessee, which
consent shall not be unreasonably withheld, unless such Indemnitee waives its
right to be indemnified under this Section 8.3 with respect to such Claim. In
addition, if an Indemnitee, in violation of Lessee's right to assume and control
the defense of any Claim, refuses to permit Lessee to control the defense, such
Indemnitee waives its right to be indemnified under Section 8.1 with respect to
such Claim.

Notwithstanding anything contained herein to the contrary, an
Indemnitee will not be required to contest (and Lessee shall not be permitted to
contest) (a) a Claim with respect to the imposition of any Tax if such
Indemnitee shall waive its right to indemnification under this Section 8.3 with
respect to such claim (and any related claim with respect to other taxable years
the contest of which is precluded or otherwise adversely affected as a result of
such waiver) and (b) any Claim if the subject matter thereof shall be of a
continuing nature and shall have previously been decided adversely. Each
Indemnitee and Lessee shall consult in good faith with each other concerning
each step and decision regarding the conduct of such contest controlled by
either, including the forum in which the claim is most likely to be favorably
resolved.

SECTION 8.4. Payments. Any Tax indemnifiable under this Article VIII
shall be paid directly when due to the applicable taxing authority if direct
payment is practicable and permitted. If direct payment to the applicable taxing
authority is not permitted or is otherwise not made, any amount payable to an
Indemnitee pursuant to Section 8.1 shall be paid within thirty days after
receipt of a written demand therefor from such Indemnitee accompanied by a
written statement describing in reasonable detail the amount so payable, but not
before the date that the relevant Taxes are due. Any payments made pursuant to
Section 8.1 directly to the Indemnitee entitled thereto or Lessee, as the case
may be, shall be made in immediately available funds at such bank or to such
account as specified by the payee in written directions to the payor, or, if no
such direction shall have been given, by check of the payor payable to the order
of the payee by certified mail, postage prepaid at its address as set forth in
this Agreement. Upon the request of any Indemnitee with respect to a Tax that
Lessee is required to pay, Lessee shall furnish to such Indemnitee the original
or a certified copy of a receipt for Lessee's payment of such Tax or such other
evidence of payment as is reasonably acceptable to such Indemnitee.

SECTION 8.5. Reports. If any report, return or statement is required to
be filed with respect to any Taxes that are subject to indemnification under
this Article VIII, Lessee shall, if Lessee is permitted by Applicable Laws,
timely prepare and file such report, return or statement; provided, however,
that if Lessee is not permitted by Applicable Laws to file any such report
Lessee will promptly so notify the appropriate Indemnitee, in which case the
Indemnitee will file any such report after preparation thereof by Lessee.

SECTION 8.6. Withholding Tax Exemption. At least ten Business Days
prior to the first date on which any payment is due under any Note for the
account of any Lender which is a "foreign" corporation or partnership or
"foreign" trust" within the meaning of the Code and such Lender claims exemption
from, or a reduction of U.S. withholding tax under Section 1441 or 1442 of the
Code, such Lender agrees that it will have delivered to each of the Lessee, the
Trustee and the Agent two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224, certifying in either case that such Lender is
entitled to receive payments under the Operative Documents without deduction or
withholding of any United States Federal income taxes in accordance with Section
7.10 of the Loan Agreement.

ARTICLE IX

MISCELLANEOUS

SECTION 9.1. Survival of Agreements. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Operative Documents, and the parties' obligations under any and all thereof,
shall survive the execution and delivery and the termination or expiration of
this Agreement and any of the Operative Documents, the transfer of the interest
in the Land and the Hotel to or by the Trustee as provided herein or in any
other Operative Documents (and shall not be merged into the Deed of Trust or any
other conveyance or transfer document), any disposition of any interest of the
Trustee in the Leased Property, the purchase and sale of the Notes, payment
therefor and any disposition thereof and shall be and continue in effect
notwithstanding any investigation made by any party hereto or to any of the
other Operative Documents and the fact that any such party may waive compliance
with any of the other terms, provisions or conditions of any of the Operative
Documents.

SECTION 9.2. No Broker, etc. Except for the Lessee's engagement of BA
Leasing & Capital Corporation as Arranger in connection with the transactions
contemplated hereby, none of the Lenders has retained or employed any broker,
finder or financial advisor to act on its behalf in connection with this
Agreement, nor authorized any broker, finder or financial advisor retained or
employed by any other Person so to act, nor incurred any fees or commissions to
which Trustee or any Lender might be subjected by virtue of their entering into
the transactions contemplated by this Agreement. BA Leasing & Capital
Corporation's compensation for acting hereunder other than as a Lender is the
receipt of the amounts provided for in the Operative Documents and in the
Arranger Fee Letter. Any party who is in breach of this representation shall
indemnify and hold the other parties harmless from and against any liability
arising out of such breach of this representation.

SECTION 9.3. Notices. Unless otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to have been given (i) in the case of notice by letter,
the earlier of when delivered to the addressee by hand or courier if delivered
on a Business Day and, if not delivered on a Business Day, the first Business
Day thereafter or on the fourth Business Day after depositing the same in the
mails, registered or certified mail, postage prepaid, return receipt requested,
and (ii) in the case of notice by facsimile or bank wire, when receipt is
confirmed if delivered on a Business Day and, if not delivered on a Business
Day, the first Business Day thereafter, addressed as provided in Schedule III,
or to such other address as any of the parties hereto may designate by written
notice.

SECTION 9.4. Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement.

SECTION 9.5. Amendments. Neither this Agreement nor any of the other
Operative Documents nor any of the terms hereof or thereof may be terminated,
amended, supplemented, waived or modified orally, but only by an instrument in
writing signed by the party against which the enforcement of the termination,
amendment, supplement, waiver or modification shall be sought and consented to
by the Required Lenders; and no such termination, amendment, supplement, waiver
or modification shall be effective unless a signed copy thereof shall have been
delivered to the Trustee, the Lessee and the Agent. Trustee and the Lessee shall
not be permitted to amend, modify or supplement the Lease without the written
consent of the Required Lenders; provided, that without the prior written
consent of each Lender, the Trustee shall not:

(a) modify any of the provisions of this Section 9.5, change
the definition of "Required Lenders", or modify or waive any provision
of any Operative Document requiring action by any of the foregoing, or
release any Collateral (except as otherwise specifically provided in
any Operative Document);

(b) reduce the amount or change the time of payment of any
amount of principal owing or payable under any Note or interest owing
or payable on any Note, reduce the amount or change the time of payment
of any fee, or modify any of the provisions of Section 2.2 of the Trust
Agreement;

(c) modify, amend, waive or supplement any of the provisions
of Sections 3.1, 3.2, 3.4, 4, 5.1, 5.2, Article VII and Article X of
the Lease;

(d) reduce, modify, amend or waive any indemnities in favor of
any Lender;

(e) reduce the amount or change the time of payment of Rent or
the Lease Balance, or reduce the amount or change the time of payment
of any such payment under any Guaranty with respect to any such
payment;

(f) consent to any assignment of Lease releasing Lessee from
its obligations to pay Rent or the Lease Balance or changing the
absolute and unconditional character of such obligations;

(g) modify, amend, waive or supplement the Guaranty,
consent to any amendment thereof or release any of the
guarantees of any Guarantor; or

(h) permit the creation of any Lien on the Trust Estate or any
part thereof except as contemplated by the Operative Documents, or
deprive any Lender of the benefit of the security interest and Lien
secured by the Trust Estate.

SECTION 9.6. Headings, etc. The Table of Contents and headings of the
various Articles and Sections of this Agreement are for convenience of reference
only and shall not modify, define, expand or limit any of the terms or
provisions hereof.

SECTION 9.7. Governing Law. THIS AGREEMENT HAS BEEN DELIVERED IN, AND
SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES OF
SUCH STATE, EXCEPT TO THE EXTENT THAT THE EXERCISE OF CERTAIN RIGHTS OR REMEDIES
HEREUNDER OR UNDER THE OTHER OPERATIVE DOCUMENTS MAY REQUIRE COMPLIANCE WITH THE
GAMING LAWS.

SECTION 9.8. Transaction Costs. Lessee shall pay all Transaction Costs
whether or not the transactions contemplated hereby are consummated. In
addition, the Lessee agrees to pay or reimburse the Indemnitees on demand for
all other out-of-pocket costs and expenses, including attorneys' fees (and the
reasonable charges of in-house counsel of Arranger), reasonably incurred in
connection with: (a) entering into, or the giving or withholding of, any future
amendments, supplements, waivers or consents with respect to the Operative
Documents; (b) any Casualty or termination of the Lease or any other Operative
Documents; (c) the negotiation and documentation of any restructuring or
"workout," whether or not consummated, of any Operative Document; (d) the
enforcement or attempted enforcement, or preservation of any rights or remedies
under the Operative Documents; (e) any transfer by an Indemnitee of any interest
in the Loan or the Notes during the continuance of an Event of Default; and (f)
any transfer by the Trustee to a successor Trustee.

SECTION 9.9. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law; but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

SECTION 9.10. Successors and Assigns. This Agreement shall be binding
upon the parties hereto and their respective successors and permitted assigns,
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.

SECTION 9.11. Final Agreement. THIS AGREEMENT, TOGETHER WITH THE
OPERATIVE DOCUMENTS, REPRESENT THE ENTIRE FINAL AGREEMENT BETWEEN THE PARTIES
WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY AND THE OTHER OPERATIVE
DOCUMENTS. THIS AGREEMENT CANNOT BE MODIFIED, SUPPLEMENTED, AMENDED, RESCINDED
OR CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES, EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY THE
PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

SECTION 9.12. No Third-Party Beneficiaries. Nothing in this Agreement
or the other Operative Documents shall be deemed to create any right in any
Person not a party hereto or thereto (other than the permitted successors and
assigns of Lessee, and Parent), and such agreements shall not be construed in
any respect to be a contract in whole or in part for the benefit of any third
party except as aforesaid.

SECTION 9.13. Release of Lien; Termination of Ground Lease. (a) Each
Lender hereby instructs the Trustee to release, and Agent shall also release,
(i) the Liens created by the Lease and Security Documents, respectively, against
the Leased Property promptly upon Lessee's payment in full in immediately
available funds of the Lease Balance and of all other amounts then due and owing
under the Operative Documents, and (ii) the Liens created by the Lease and
Security Documents, respectively, against the Gaming Equipment only, promptly
upon Lessee's payment in full in immediately available funds of the Allocated
Share of the Lease Balance related to the Gaming Equipment Lease Supplement, if
no Default or Event of Default has occurred and is continuing.

(b) If Lessee elects to purchase the Hotel and the Hotel Equipment
pursuant to Section 5.1 of the Lease, each Lender hereby instructs the Trustee
upon receipt of all amounts due under the Operative Documents to release, and
Agent shall also release, the Liens created by the Lease and the Security
Documents, respectively, against the Hotel and the Hotel Equipment.

(c) No sooner than the later of (i) the end of the Commitment Period
and (ii) the delivery by Lessee to Agent of the search reports required under
Section 5.18, and then only if no Default or Event of Default exists, Lessee may
deliver to Trustee (with sufficient copies for the Agents and the other Lenders)
a request to release the Liens created by the Lease and the Security Documents
against the items of Equipment (but not Systems) described in the request,
together with a certificate to the effect that (A) all vendors of items of
Equipment (including Systems) that are to remain subject to the Lease have been
paid in full, (B) Agent, for the benefit of the Lenders, has a first priority
lien of record on the Equipment (including Systems) that remains subject to the
Lease (other than the released Equipment) as against all Persons, including
Lessee and its creditors, (C) after taking into account the releases of the
liens in respect of the items of Equipment, there is at least $20,000,000 and
$70,000,000 respectively, (by cost of such Equipment) of Gaming Equipment and
Non-Gaming Equipment that remains subject to the Lease, (D) no Default or Event
of Default exists and (E) Trustee has made Advances for Hotel Costs, which when
added to the Equipment Costs for items of Equipment that are to remain subject
to the Lease, shall equal $120,001,000. Each Lender hereby instructs the Trustee
to release upon receipt of the request and a conformed certificate of release,
and Agent shall also release, their respective Liens against the items of
Equipment described in the request.

(d) Each Lender, Agent and Trustee, at the expense of the Lessee, will
promptly and duly execute and deliver all documents and take such further action
as may be necessary to release the Liens in accordance with Section 9.13(a), (b)
or (c), including if requested by Lessee the recording or filing of any document
evidencing the release of such Liens in accordance with the laws of the
appropriate jurisdictions.

(e) If the Lessee elects to purchase the Hotel and the Hotel Equipment
pursuant to Section 5.1 of the Lease or upon Lessee's payment in full in
immediately available funds of the Lease Balance and of all other amounts due
and owing under the Operative Documents, each Lender hereby instructs the
Trustee upon receipt of all amounts due under the Operative Documents to execute
a termination statement in recordable form in respect of the Ground Lease.

(f) Each Lender, Agent and Trustee shall at any time and from time to
time during the Lease Term, promptly, but in no event later than twenty (20)
Business Days after the request by the Lessee or Parent, execute and deliver to
Lessee, Parent and any prospective lessor, lender, mortgagee or assignee of Debt
(if (i) such financing party has signed a commitment letter to lease or lend to
Lessee or Parent, (ii) the real or personal property (the "Financed Property")
that is to be leased or encumbered thereby does not constitute any Leased
Property, and (iii) the Financed Property is to be located on or at the Casino
Barges, the Levee Land, the Hotel and/or the Hotel Site) (1) a certificate
stating that neither the Lenders, Agents nor the Trustee has any right, title or
interest in the Financed Property, and (2) if requested by any such financing
party, partial releases covering the Financed Property mutually acceptable to
such financing party, Lessee and the Lenders to confirm such interests and to
provide for the respective rights of such financing party and the Lenders in
their respective collateral securing any such Debt. The certificate delivered
pursuant to this Section 9.13(f) is rendered only to such financing party and
may not be relied upon by any other Person.

(g) Notwithstanding anything in the Operative Documents to the
contrary, the Lenders shall also permit the prospective lessor, lender,
mortgagee or assignee of Pari Passu Indebtedness (as defined in the Indenture)
to file a ship mortgage in respect of the Casino Barges and the Barge Equipment
subject to the Lease and the equipment to be financed, so long as such lessor,
lender, mortgagee or assignee of Pari Passu Indebtedness (as defined in the
Indenture) concurrently agrees to be bound by the Intercreditor Agreement and
acknowledges that it has no right, title or interest in or to the Barge
Equipment subject to the Lease or any proceeds therefrom other than pursuant to
a preferred ship mortgage in its favor.

SECTION 9.14. Reproduction of Documents. This Agreement, all documents
constituting Schedules or Exhibits hereto, and all documents relating hereto
received by a party hereto, including: (a) consents, waivers and modifications
that may hereafter be executed; (b) documents received by Lessor in connection
with Lessor's receipt and/or acquisition of the Equipment; and (c) financial
statements, certificates, and other information previously or hereafter
furnished to Lessor may be reproduced by Lessor by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other similar
process. Each of the Lenders agrees and stipulates that, to the extent permitted
by law, any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding (whether or not the original
is in existence and whether or not such reproduction was made by Lessor in the
regular course of business) and that, to the extent permitted by law, any
enlargement, facsimile, or further reproduction of such reproduction shall
likewise be admissible in evidence; provided, however, that no such reproduction
shall be presented or accepted in lieu of the original of such reproduction for
purposes of Article 9 of the U.C.C. or any other applicable laws regarding
chattel paper.

SECTION 9.15. Submission to Jurisdiction. Lessor may bring suit to
enforce any claim arising out of the Operative Documents in any state or Federal
court located in New York, New York having subject matter jurisdiction, and with
respect to any such claim. Each of Lessee and each Guarantor hereby irrevocably:
(a) submits to the jurisdiction of such courts; and (b) consents to the service
of process out of said courts by mailing a copy thereof, by registered mail,
postage prepaid, to Lessee or any Guarantor at their respective addresses
specified in this Agreement, and agrees that such service, to the fullest extent
permitted by law: (i) shall be deemed in every respect effective service of
process upon it in any such suit, action or proceeding; and (ii) shall be taken
and held to be valid personal service upon and personal delivery to it. Each of
Lessee and any Guarantor irrevocably waives, to the fullest extent permitted by
law: (A) any claim, or any objection, that it now or hereafter may have, that
venue is not proper with respect to any such suit, action or proceeding brought
in such a court located in New York, New York, including any claim that any such
suit, action or proceeding brought in such court has been brought in an
inconvenient forum; and (B) any claim that any of Lessee or any Guarantor is not
subject to personal jurisdiction or service of process in such forum. Nothing
herein contained shall preclude Trustee, Lessor or any Lender from bringing an
action or proceeding in respect hereof in any other state or federal court
within the United States having subject matter jurisdiction with respect to such
action and personal jurisdiction over the parties to such action. Lessee and
each Guarantor agree that a final judgment in any action or proceeding in a
state or Federal court within the United States may be enforced in any other
jurisdiction by suit on the judgment or in any other manner provided by law.

SECTION 9.16. Jury Trial. LESSEE AND EACH GUARANTOR WAIVE ANY RIGHT TO
A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER THIS AGREEMENT OR ANY OPERATIVE DOCUMENT OR UNDER ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OPERATIVE DOCUMENT AND AGREES
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY.

SECTION 9.17. Payments Set Aside. To the extent that Lessee makes a
payment to Trustee, Agent or the Lenders, or Trustee, Agent or the Lenders
exercise their right of set-off, and such payment or the proceeds of such
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any insolvency of Lessee, any Guarantor or any Subsidiary that
is a sublessee, assignee or transferee of any Leased Property or otherwise, then
(a) to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Lender severally agrees to pay to Agent upon demand its pro rata share of
any amount so recovered for distribution by Agent in accordance with the Loan
Agreement.

SECTION 9.18. Trust Agreement. The provisions of Section 5.1 of the
Trust Agreement limiting the reimbursement and indemnification obligations of
the Lenders are incorporated by reference into this Agreement.

SECTION 9.19. Consent to Conflict of Interest. The parties hereto
acknowledge that the Bank is entering into and will be bound by the Operative
Documents in multiple capacities, including individually, as Trustee, as Lessor,
as Borrower, as Lender and as agent to the Agent. Each party hereto consents to
the same and hereby waives any conflict of interest which may exist or arise as
a result thereof.

SECTION 9.20. No Marshalling/Other Loans and Set-Off. Notwithstanding
any provisions in documents related to other credit facilities or other
agreements between any Lender and the Lessee or any Guarantor, no Lender
hereunder may be compelled to marshall any collateral or other assets it may
hold from or for the benefit of any such Lessee or Guarantor. Any Lender may
make other extensions of credit, or renew or extend any existing extensions of
credit to Lessee or any Guarantor or have other relationships with Lessee or any
Guarantor. No Lender shall have any right or interest in any property taken as
collateral for such other extensions of credit or in any property or deposit in
the possession or control of any other Lender that may be or become collateral
for or otherwise available for payment of the obligations hereunder by reason of
the inclusion of any "cross-reference" provisions in the documentation
associated with such other extensions of credit, provided, however, if any
Lender with such rights elects to exercise any such right of cross-
collateralization or set-off, all Lenders shall be entitled to a pro rata share
of such proceeds realized as a result of such exercise.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.

BL DEVELOPMENT CORP., as Lessee

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

GRAND CASINOS, INC., as Guarantor

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

GRAND CASINOS RESORTS, INC.,
as Guarantor

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

GRAND CASINOS OF MISSISSIPPI, INC.
- GULFPORT, as Guarantor

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

GRAND CASINOS OF MISSISSIPPI, INC.
- BILOXI, as Guarantor

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

GRAND CASINOS OF BILOXI THEATER,
INC., as Guarantor

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

GCI BILOXI HOTEL ACQUISITION
CORPORATION, as Guarantor

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

GCI GULFPORT HOTEL ACQUISITION
CORPORATION, as Guarantor

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

MILLE LACS GAMING CORPORATION,
as Guarantor

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

GRAND CASINOS OF LOUISIANA, INC.
TUNICA - BILOXI, as Guarantor

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

GRAND CASINOS OF LOUISIANA, INC. -
COUSHATTA, as Guarantor

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

GCA ACQUISITION SUBSIDIARY, INC.,
as Guarantor

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

HANCOCK BANK, not in its individual
capacity except as expressly stated
herein, but solely as Lessor,
Borrower and Trustee

By: /s/ C.H. Gibbons
Name: C.H. Gibbons
Title: Vice President & Trust Officer

BA LEASING & CAPITAL CORPORATION,
not in its individual capacity
except as expressly stated herein,
but solely as Agent

By: /s/ David F. Scully
Name: David F. Scully
Title: Vice President

BANK OF SCOTLAND, as Co-Agent and
as Lender

By: /s/ Catherine M. (Illegible)
Name: Catherine M. (Illegible)
Title: Vice President

FIRST INTERSTATE BANK OF NEVADA, as
Co-Agent and as Lender

By: /s/ Steve Byrne
Name: Steve Byrne
Title: Vice President

SOCIETE GENERALE, as Co-Agent and
as Lender

By: /s/ Donald L. Schubert
Name: Donald L. Schubert
Title: Vice President

CREDIT LYONNAIS, LOS ANGELES
BRANCH, as Co-Agent and as
Lender

By: /s/ Thierry Vincent
Name: Thierry Vincent
Title: Vice President

BA LEASING & CAPITAL CORPORATION,
as Lender

By: /s/ David F. Scully
Name: David F. Scully
Title: Vice President

THE CIT GROUP/EQUIPMENT FINANCING,
INC., as Lender

By: /s/ John H. Beville
Name: John H. Beville
Title: Senior Vice President

UNITED STATES NATIONAL BANK OF
OREGON, as Lender

By: (Illegible)
Name: (Illegible)
Title: (Illegible)

BANK OF BOSTON, as Lender

By: /s/ Reginald T. Dawson
Name: Reginald T. Dawson
Title: Director

IMPERIAL BANK, as Lender

By: /s/ Steven K. Johnson
Name: Steven K. Johnson
Title: Senior Vice President

TRUSTMARK NATIONAL BANK, as Lender

By: /s/ John W. Ray, Jr.
Name: John W. Ray, Jr.
Title: Vice President

FIRST SECURITY BANK OF UTAH, N.A.,
as Lender

By: /s/ David P. Williams
Name: David P. Williams
Title: Vice President

FIRST NATIONAL BANK OF COMMERCE, as
Lender

By: /s/ (Illegible)
Name: (Illegible)
Title: Vice President

HANCOCK BANK, as Lender

By: /s/ Watson Butts
Name: Watson Butts
Title: Vice President

DEPOSIT GUARANTY NATIONAL BANK, as
Lender

By: /s/ Larry C. Ratzlaff
Name: Larry C. Ratzlaff
Title: Senior Vice President

SCHEDULE I
TO
PARTICIPATION AGREEMENT

SUBSIDIARY GUARANTORS

Grand Casinos Resorts, Inc.
Grand Casinos of Mississippi, Inc. - Gulfport
Grand Casinos of Mississippi, Inc. - Biloxi
Grand Casinos Biloxi Theater, Inc.
GCI Biloxi Hotel Acquisition Corporation
GCI Gulfport Hotel Acquisition Corporation
Mille Lacs Gaming Corporation
Grand Casinos of Louisiana, Inc. - Tunica - Biloxi
Grand Casinos of Louisiana, Inc. - Coushatta
GCA Acquisition Subsidiary, Inc.

[EXECUTION COPY]

LEASE AGREEMENT AND DEED OF TRUST

dated as of May 10, 1996

between

HANCOCK BANK,
not in its individual capacity,
except as expressly stated herein,
but solely as Trustee, as Lessor,

and

BL DEVELOPMENT CORP.,
as Lessee.

ALL RIGHT, TITLE AND INTEREST OF LESSOR UNDER THIS LEASE AND THE PROPERTY RIGHTS
SUBJECT HERETO HAVE BEEN ASSIGNED TO, AND ARE SUBJECT TO A LIEN AND SECURITY
INTEREST IN FAVOR OF BA LEASING & CAPITAL CORPORATION, AS AGENT ("AGENT"), UNDER
THE SECURITY AGREEMENT, DATED AS OF MAY 10, 1996, FOR THE BENEFIT OF THE AGENT
AND THE LENDERS REFERRED TO IN SUCH SECURITY AGREEMENT. THIS LEASE HAS BEEN
EXECUTED IN SEVERAL COUNTERPARTS. TO THE EXTENT, IF ANY, THAT THIS LEASE
CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL
CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS
LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART
HEREOF OTHER THAN THE ORIGINAL EXECUTED "LESSOR'S COPY", WHICH SHALL BE
IDENTIFIED AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY AGENT
ON OR FOLLOWING THE SIGNATURE PAGE THEREOF.

THIS COUNTERPART IS THE ORIGINAL EXECUTED LESSOR'S COPY.

This instrument secures a line of credit to be used primarily for business,
commercial or agricultural purposes and is entitled to the lien protection
provisions in Section 89-1-49 of the Mississippi Code of 1972 as amended.

INDEXING INSTRUCTIONS:

Part of the Northwest 1/4 and Southwest 1/4 of Section 5, Township 3 South,
Range 10 West of Tunica County, Mississippi.

<TABLE>
<CAPTION>
TABLE OF CONTENTS

Section Page
<S> <C>

ARTICLE I

DEFINITIONS; LESSEE LIABILITY . . . . . . . . . . . . . 1

ARTICLE II

LEASE OF HOTEL AND EQUIPMENT; LEASE TERM. . . . . . . . . . . 1

2.1. Acceptance and Lease of Hotel and Equipment . . . . . . . . . . . . . . . . 1
2.2. Acceptance Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.3. Lease Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

ARTICLE III

RENT; QUIET ENJOYMENT; NET LEASE; SUBLEASING. . . . . . . . . . 2

3.1. Periodic Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.2. Supplemental Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.3. Place and Manner of Payment . . . . . . . . . . . . . . . . . . . . . . . . 2
3.4. Late Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.5. Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.6. Net Lease; No Setoff, Etc.. . . . . . . . . . . . . . . . . . . . . . . . . 3
3.7. No Bar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.8. Intent of the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

ARTICLE IV

POSSESSION AND SUBLEASING . . . . . . . . . . . . . . 6

ARTICLE V

LEASE TERMINATION . . . . . . . . . . . . . . . . 8

5.1. Early Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.2. Termination and Transfer. . . . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE VI

DISCLAIMER AND ASSIGNMENT OF WARRANTIES. . . . . . . . . . . 9

6.1. Disclaimer of Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.2. Assignment of Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . 10

ARTICLE VII

MAINTENANCE AND REPAIR;
ALTERATIONS ADDITIONS AND SUBSTITUTIONS. . . . . . . . . . . 10

7.1. Maintenance and Repair; Compliance With Law . . . . . . . . . . . . . . . . 10
7.2. Alterations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.3. Replacement and Substitution. . . . . . . . . . . . . . . . . . . . . . . . 11
7.4. Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.5. Maintenance and Repair Reports. . . . . . . . . . . . . . . . . . . . . . . 12

ARTICLE VIII

USE; UTILITY CHARGES. . . . . . . . . . . . . . . . 12

8.1. Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
8.2. Utility Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

ARTICLE IX

CASUALTY; REPLACEMENT; INSURANCE. . . . . . . . . . . . . 13

9.1. Casualty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
9.2. Non-Casualty Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
9.3. Required Coverages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9.4. Delivery of Insurance Certificates. . . . . . . . . . . . . . . . . . . . . 17

ARTICLE X

LEASE EVENTS OF DEFAULT. . . . . . . . . . . . . . . 18

10.1. Lease Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.2. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10.3. Waiver of Certain Rights. . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.4. Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.5. Remedies Cumulative; No Waiver; Consents. . . . . . . . . . . . . . . . . . 26

ARTICLE XI

LESSOR'S RIGHT TO CURE . . . . . . . . . . . . . . . 27

11.1. Lessor's Right to Cure Lessee's Lease Defaults. . . . . . . . . . . . . . . 27

ARTICLE XII

WARRANT OF TITLE; EASEMENTS; ADDITIONAL FINANCINGS . . . . . . . . 27

12.1. Warrant of Title. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
12.2. Grants and Releases of Easements; Lessor's Waivers. . . . . . . . . . . . . 28
12.3. Additional Financings . . . . . . . . . . . . . . . . . . . . . . . . . . . .28

ARTICLE XIII

ASSIGNMENTS. . . . . . . . . . . . . . . . . . 29

ARTICLE XIV

GRANT OF LIEN . . . . . . . . . . . . . . . . . 29

14.1. Grant of Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
14.2. Retention of Title or Proceeds in the Case of Default . . . . . . . . . . . 33

ARTICLE XV

MISCELLANEOUS . . . . . . . . . . . . . . . . . 33

15.1. Applicable Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
15.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
15.3. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
15.4. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
15.5. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
15.6. Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
15.7. Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . 34
15.8. Captions; Table of Contents.. . . . . . . . . . . . . . . . . . . . . . . . 34
15.9. Schedules and Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
15.10. No Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Exhibit A - Form of Lease Supplement

Exhibit B - Description of Hotel Site

Appendix I - Definitions

</TABLE>

LEASE AGREEMENT AND DEED OF TRUST

This LEASE AGREEMENT AND DEED OF TRUST (as amended, supplemented, or
otherwise modified from time to time, this "Lease"), dated as of May 10, 1996,
is between HANCOCK BANK, not in its individual capacity, except as expressly
stated herein, but solely as Trustee under the Trust Agreement, as Lessor
("Lessor"), and BL DEVELOPMENT CORP., a Minnesota corporation, as Lessee
("Lessee").

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, intending to be legally bound hereby, hereby
agree as follows:

ARTICLE I

DEFINITIONS; LESSEE LIABILITY

For all purposes hereof, the capitalized terms used herein and not
otherwise defined shall have the meanings assigned thereto in Appendix 1 to that
certain Participation Agreement, dated as of May 10, 1996 (the "Participation
Agreement"), among Grand Casinos, Inc. a Minnesota corporation, and certain of
its subsidiaries, as Guarantors; Lessee; Lessor; the Lenders, Co-Agents and Lead
Manager identified therein; and BA Leasing & Capital Corporation, as Arranger
and Agent. A true copy of such Appendix 1 is attached hereto and incorporated
herein. All obligations imposed on the "Lessee" in this Lease shall be the full
recourse liability of Lessee.

ARTICLE II

LEASE OF HOTEL, EQUIPMENT AND HOTEL SITE; LEASE TERM

SECTION 2.1. Acceptance and Lease of Hotel, Equipment and Hotel Site.

(a) On each Advance Date, Lessor, subject to the satisfaction or
waiver of the applicable conditions set forth in Article III of the
Participation Agreement, shall accept under a Certificate of Acceptance the
Hotel and Equipment theretofore delivered, and simultaneously lease to Lessee
hereunder, and Lessee shall lease from Lessor hereunder, the Hotel and Equipment
for the term of the applicable Lease Supplement.

(b) Subject to the terms and conditions of this Lease, on the date
hereof the Lessor shall demise and sublease to the Lessee hereunder for the
Lease Term the Lessor's interest in the Hotel Site, and Lessee hereby agrees,
expressly for the direct benefit of the Lessor, to sublease from the Lessor for
the Lease Term the Lessor's interest in the Hotel Site.

(c) A description of the Hotel Site upon which the Hotel will be
constructed and certain of the Equipment located is attached to this Lease as
Exhibit B and incorporated herein.

SECTION 2.2. Acceptance Procedure. Lessee hereby agrees that the
execution and delivery by Lessee of this Lease and a Certificate of Acceptance
pursuant to Section 3.4(d) or 3.6(b) of the Participation Agreement, as the case
may be (appropriately completed) shall, without further act, irrevocably
constitute acceptance by Lessee on behalf of itself and Lessor of the Hotel and
Equipment which are the subject of a Certificate of Acceptance and the Lease
Supplement referred to in the Certificate of Acceptance for all purposes of this
Lease, such Lease Supplement and the other Operative Documents.

SECTION 2.3. Lease Term. The term of this Lease (the "Lease Term")
shall commence on the date of execution of this Lease by Lessor and Lessee, and
shall expire on the Final Maturity Date. Unless earlier terminated, the term of
each Lease Supplement relating to the Equipment and the Hotel shall consist of
(i) an Interim Period and (ii) a Base Period.

SECTION 2.4. Title. The Hotel Site is leased to the Lessee without
any representation or warranty, express or implied, by the Lessor and subject to
the rights of the parties in possession, the existing state of title (including
Permitted Liens other than Lessor Liens) and all applicable Requirements of Law.
Lessee shall in no event have any recourse against the Lessor for any defect in
or exception to title to the Hotel Site other than to the extent resulting from
Lessor Liens.

ARTICLE III

RENT; QUIET ENJOYMENT; NET LEASE; SUBLEASING

SECTION 3.1. Periodic Rent. During the Lease Term, Lessee shall pay
to Lessor Periodic Rent on each Payment Date in the amount determined in
accordance with the definition of "Periodic Rent".

SECTION 3.2. Supplemental Rent. During the Lease Term, Lessee shall
pay to Lessor, or to whomever shall be entitled to payment thereof as expressly
provided herein or in any other Operative Document (and Lessor hereby directs
Lessee, on behalf of Lessor, so to pay any such other Person) any and all
Supplemental Rent promptly as the same shall become due and payable, and, in the
event of any failure on the part of Lessee to pay any Supplemental Rent, Lessor
shall have all rights, powers and remedies provided for herein or by law or in
equity or otherwise in the case of nonpayment of Periodic Rent. Lessee hereby
reaffirms its obligation to pay as Supplemental Rent (i) an amount equal to
Additional Costs as the same become due and payable, (ii) all amounts determined
to be due and payable pursuant to Section 5.1 of the Trust Agreement in
accordance with its terms and (iii) any Premium that becomes due and payable
pursuant to the Section 2.4(d) of the Loan Agreement.

SECTION 3.3. Place and Manner of Payment. Subject to Section 3.2,
Rent and all other sums due to Lessor, Agent or any Lender hereunder shall be
paid in accordance with Section 2.8 of the Participation Agreement.

SECTION 3.4. Late Payment. If any Periodic Rent shall not be paid
when due, Lessee shall pay to Lessor, or if any Supplemental Rent payable to or
on behalf of or for the account of Lessor, Trustee, any Lender, Agent or any
other Indemnitee is not paid when due, Lessee shall pay to whomever shall be
entitled thereto, in each case as Supplemental Rent, interest at the Overdue
Rate on such overdue amount from and including the due date (not taking into
account any grace period) thereof to but excluding the Business Day of payment
thereof.

SECTION 3.5. Quiet Enjoyment. Subject to the rights of Lessor
contained in Article X and the other terms of the Operative Documents to which
Lessee is a party, Lessee shall peaceably and quietly have, hold and enjoy the
Leased Property for the Lease Term, free of any claim or other action by Lessor
or anyone claiming by, through or under Lessor (other than Lessee) with respect
to any matters arising from and after the Initial Advance Date. Such right of
quiet enjoyment is independent of, and shall not affect Lessor's rights
otherwise to initiate legal action to enforce the obligations of Lessee under
this Lease.

SECTION 3.6. Net Lease; No Setoff, Etc. THIS LEASE SHALL CONSTITUTE
A NET LEASE AND, NOTWITHSTANDING ANY OTHER PROVISION OF THIS LEASE, IT IS
INTENDED THAT PERIODIC RENT AND SUPPLEMENTAL RENT SHALL BE PAID WITHOUT
COUNTERCLAIM, SETOFF, DEDUCTION OR DEFENSE OF ANY KIND AND WITHOUT ABATEMENT,
SUSPENSION, DEFERMENT, DIMINUTION OR REDUCTION OF ANY KIND, AND LESSEE'S
OBLIGATION TO PAY ALL SUCH AMOUNTS, THROUGHOUT THE LEASE TERM IS ABSOLUTE AND
UNCONDITIONAL. The obligations and liabilities of Lessee hereunder shall in no
way be released, discharged or otherwise affected for any reason, including,
without limitation, to the maximum extent permitted by law: (a) any defect in
the condition, merchantability, design, construction, quality or fitness for use
of any portion of the Hotel Site, the Hotel or any item of Equipment, or any
failure of any portion of the Hotel Site, the Hotel or any item of Equipment to
comply with all Applicable Laws, including any inability to use any portion of
the Hotel Site, the Hotel or any item of Equipment by reason of such
non-compliance; (b) any damage to, abandonment, loss, destruction, requisition,
taking or contamination of or Release from any portion of the Hotel Site, the
Hotel or any item of Equipment, including eviction; (c) any restriction,
prevention or curtailment of or interference with any use of any portion of the
Hotel Site, the Hotel or any item of Equipment, including eviction; (d) any
defect in title to or rights to the Hotel Site or any Lien on such title or
rights or on the Hotel Site; (e) the attachment of any Lien of any third party
to any portion of the Hotel Site, the Hotel or any item of Equipment; (f) any
prohibition or restriction of or interference with Lessee's use of any or all of
the Hotel Site, the Hotel or the Equipment by any Person; (g) any change,
waiver, extension, indulgence or other action or omission or breach in respect
of any obligation or liability of or by Lessor, Agent or any Lender; (h) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceedings relating to Lessee, Lessor, Agent, any
Lender or any other Person, or any action taken with respect to this Lease by
any trustee or receiver of Lessee, Lessor, Agent, any Lender or any other
Person, or by any court, in any such proceeding; (i) any claim that Lessee has
or might have against any Person, including, without limitation, Lessor, Agent
or any Lender; (j) any failure on the part of Lessor to perform or comply with
any of the terms of this Lease, any other Operative Document or of any other
agreement whether or not related to the transactions contemplated by the
Operative Documents; (k) any invalidity or unenforceability or disaffirmance
against or by Lessee of this Lease or any provision hereof or any of the other
Operative Documents or any provision of any thereof; (l) the impossibility of
performance by Lessee, Lessor or both; (m) any action by any court,
administrative agency or other Governmental Authority; (n) any restriction,
prevention or curtailment of or any interference with the construction or any
use of any portion of the Hotel Site, the Hotel or any item of Equipment; or (o)
any other occurrence whatsoever, whether similar or dissimilar to the foregoing,
whether or not Lessee shall have notice or knowledge of any of the foregoing.
Except as specifically set forth in Articles IV or X of this Lease, this Lease
shall be noncancellable by Lessee for any reason whatsoever, and Lessee, to the
extent permitted by Applicable Laws, waives all rights now or hereafter
conferred by statute or otherwise to quit, terminate or surrender this Lease, or
to any diminution, abatement or reduction of Rent payable by Lessee hereunder.
If for any reason whatsoever this Lease shall be terminated in whole or in part
by operation of law or otherwise, except as expressly provided in Articles IV or
X of this Lease, Lessee shall, unless prohibited by Applicable Laws, nonetheless
pay to Lessor (or, in the case of Supplemental Rent, to whomever shall be
entitled thereto) an amount equal to each Rent payment at the time and in the
manner that such payment would have become due and payable under the terms of
this Lease if it had not been terminated in whole or in part, and in such case,
so long as such payments are made and no Lease Event of Default shall have
occurred and be continuing, Lessor will deem this Lease to have remained in
effect. Each payment of Rent made by Lessee hereunder shall be final and, absent
manifest error in the determination of the amount thereof, Lessee shall not seek
or have any right to recover all or any part of such payment from Lessor, Agent
or any party to any agreements related thereto for any reason whatsoever. Lessee
assumes the sole responsibility for the condition, use, operation, maintenance
and management of the Hotel Site, the Hotel and the Equipment, and Lessor shall
have no responsibility in respect thereof and shall have no liability for damage
to the property of Lessee or any subtenant of Lessee or any property leased
hereunder or subleased to any subtenant of Lessee on any account or for any
reason whatsoever other than by reason of Lessor's willful misconduct or gross
negligence or breach of any of its obligations under any Operative Document.

SECTION 3.7. No Bar. Notwithstanding the foregoing, nothing set
forth herein shall bar, limit, preclude, prevent, stay or otherwise adversely
affect Lessee's right or ability to bring and pursue any action for monetary
damages against Lessor or any other Person for any breach or alleged breach of
its obligations hereunder or under any other Operative Document.

SECTION 3.8. Intent of the Parties. Lessor and Lessee further
intend and agree that this Lease is a conditional sales agreement and that, with
respect to that portion of the Leased Property constituting Equipment, for the
purpose of securing Lessee's obligations for the repayment of the Loans from
Lessor and the Lenders to Lessee, (i) the Lease shall also be deemed to be a
security agreement and financing statement within the meaning of Article 9 of
the UCC; (ii) the conveyance provided for hereby shall be deemed to be a grant
by Lessee to Lessor, for the benefit of the Lenders, of a lien and security
interest in all of Lessee's present and future right, title and interest in and
to such portion of the Hotel Site, the Hotel and the Equipment, including but
not limited to Lessee's fee and/or leasehold estate therein and all proceeds of
the conversion, voluntary or involuntary, of the foregoing into cash,
investments, securities or other property, whether in the form of cash,
investments, securities or other property to secure such loans, effective on the
date hereof, to have and to hold such interests in the Hotel Site, the Hotel and
the Equipment unto Lessor, for the benefit of the Lenders and their respective
successors and assigns, forever, provided always that these presents are upon
the express condition that, if all amounts due under the Lease and the other
Operative Documents shall have been paid and satisfied in full, then this
instrument and the estate hereby granted shall cease and become void; (iii) the
possession by Lessor of notes and such other items of property as constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" for purposes of perfecting the security
interest pursuant to Section 9-305 of the UCC; and (iv) notifications to Persons
holding such property, and acknowledgements, receipts or confirmations from
financial intermediaries, bankers or agents (as applicable) of Lessee shall be
deemed to have been given for the purpose of perfecting such security interest
under Applicable Law. Lessor and Lessee shall, to the extent consistent with the
Lease, take such actions and execute, deliver, file and record such other
documents, financing statements, mortgages and deeds of trust as may be
necessary to ensure that the security interest and lien created in the Hotel
Site, the Hotel and the Equipment in accordance with this Lease will be a
perfected lien and security interest with priority over all Liens other than
Permitted Liens, under Applicable Law and will be maintained as such throughout
the Lease Term.

ARTICLE IV

POSSESSION AND SUBLEASING

LESSEE SHALL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR,
SUBLEASE ANY OR ALL OF THE HOTEL SITE, THE HOTEL OR EQUIPMENT OR ASSIGN,
TRANSFER OR ENCUMBER ITS RIGHTS, INTERESTS OR OBLIGATIONS HEREUNDER, AND ANY
ATTEMPTED SUBLEASE, ASSIGNMENT, TRANSFER OR ENCUMBERING BY LESSEE SHALL BE NULL
AND VOID, except as provided hereafter in this Article IV or pursuant to a
transaction permitted under Section 5.2 of the Participation Agreement. Lessee
may, with Lessor's and all of the Lender's prior written consent, which shall
not be unreasonably withheld or delayed, sublease or assign both the Hotel Site
and the Hotel, the Non-Gaming Equipment or the Gaming Equipment, each as an
integrated whole, if such sublease or assignment permitted by this Article IV (a
"Sublease") (a) is expressly subject and subordinate to all of the provisions of
this Lease and the rights and interests of Lessor and the Lenders hereunder in
respect of the Hotel or Equipment covered by such Sublease upon the occurrence
of an Event of Default thereunder or hereunder, (b) expressly requires the Hotel
or Equipment subject thereto to be returned as directed by Lessor or the
Required Lenders upon notice to such assignee or sublessee that an Event of
Default exists and (c) expressly prohibits any further sublease or assignment of
the Hotel or Equipment subject thereto. Lessee shall remain primarily liable for
its obligations under this Lease notwithstanding the existence of any such
Sublease. All of Lessee's right, title and interest in, to and under such
Sublease shall be pledged by Lessee to Lessor, as collateral for Lessee's
obligations under this Lease, and Lessee shall, at its expense, do any further
act and execute, acknowledge, deliver, file, register and record any further
documents which Lessor or any Lender may reasonably request in order to create,
perfect, preserve and protect Lessor's security interest in such Sublease.

Subject to the conditions set forth above, the Lessee may sublease
space in the Hotel, provided that the aggregate amount of such subleased space
does not exceed 33% of the aggregate space in the Hotel, and provided that (i)
the proposed subtenant shall be engaged in a business complementary to the
business of Lessee, and propose to use the subleased space in a manner in
keeping with the standards set forth in this Lease, (ii) the character of the
business to be conducted or the proposed use of the subleased space by the
proposed subtenant shall not violate any provision or restriction herein
relating to the use or occupancy of the Hotel, (iii) the Sublease contains fair
market rental terms reflective of the then current market rates for comparable
space of similar size being maintained for such business in the applicable
leasing market in which the Hotel is located ("Fair Market Rental Terms"), (iv)
the Sublease does not provide for disproportionately skewed rental payments
throughout the term of the Sublease not reflective of Fair Market Rental Terms
and (v) Lessee is not required to, and there exists no option in favor of the
proposed subtenant which could require Lessee to, perform any tenant finish
improvement work after the later of (x) the Turnover Date (as defined below) and
(y) the Lease Termination Date.

In the case of any proposed Sublease, not less than thirty days
prior to the consummation of such Sublease, Lessee shall deliver to Lessor each
of the following: (i) the identity of the proposed subtenant establishing that
the proposed subtenant and Sublease satisfy the criteria set forth above, (ii) a
copy of the proposed Sublease, and (iii) the non-disturbance and attornment
agreement for execution and delivery by Lessor and, if applicable, Agent. Each
Sublease shall contain the following language:

"The Tenant hereunder agrees that this Lease is subject and subordinate to
the lease under which the Landlord hereunder occupies the Hotel (the
"Overlease", with the landlord under the Overlease and its successors and
assigns in interest to the Hotel or this Lease being hereinafter referred
to as the "Overlandlord"), and that in the event of the termination of the
Overlease or in the event the Overlandlord terminates the Landlord's right
of possession under the Overlease (the date on which either such
termination becomes effective being referred to herein as the "Turnover
Date"), the Tenant hereunder will attorn to the Overlandlord and pay the
Overlandlord all of the rents and other monies required to be paid by the
Tenant hereunder, and perform all of the terms, covenants, conditions and
obligations contained in this Lease, and the Overlandlord shall recognize
Tenant hereunder; and this Lease shall continue as a direct lease between
the Tenant hereunder and Overlandlord upon all of the terms and conditions
hereof except that in no event shall Overlandlord have any obligation to
perform any obligation of the Landlord hereunder with respect to
obligations of Overlandlord (or any successor Overlandlord) hereunder
arising after the Turnover Date which shall be without recourse to
Overlandlord (other than the interest of the Overlandlord in the property
demised by the Lease.)"

At the request of Lessee, Lessor and Agent shall deliver to Lessee, for the
benefit of the subtenant, within ten Business Days after Lessee's request
therefor, a non-disturbance and attornment agreement on Lessor's standard form,
duly executed and acknowledged by Lessor and Agent, and Lessee shall cause such
subtenant to execute and acknowledge such agreement and return fully executed
and acknowledged counterparts thereof to Lessor and Agent.

ARTICLE V

LEASE TERMINATION

SECTION 5.1. Early Termination. On any date after the commencement
of the last commencing Base Period, Lessee may, at its option, upon at least 30
days' advance written notice to Lessor, either:

(a) Purchase all (but not less than all) of the Hotel and the
Equipment for an amount equal to the sum of (i) accrued and unpaid
Rent payable on or before such date, (ii) the Lease Balance (after
giving effect to any payments pursuant to clause (i)), (iii) any
Premium payable in respect of the Notes, and (iv) all other fees
and expenses and other amounts (including all Supplemental Rent)
then due and payable pursuant to this Lease and the other Operative
Documents; or

(b) Purchase the Hotel and Hotel Equipment for an amount equal
to the sum of (i) the Lease Supplement Balances relating to the
Hotel and Hotel Equipment, (ii) any Premium payable in respect of
the Notes, and (iii) all other fees and expenses and other amounts
(including all Supplemental Rent) then due and payable pursuant to
this Lease and the other Operative Documents.

SECTION 5.2. Termination and Transfer. Upon payment in full in cash
of all amounts then due and owing hereunder on the Lease Termination Date, or if
the Lease Supplement Balance relating to the Gaming Equipment has been paid in
full as of the last day of the term of such Lease Supplement, Lessor shall
release the Leased Property then subject to the Lease on the Lease Termination
Date, or the Gaming Equipment on the expiration of the related Lease Supplement,
from the Lien created by this Lease and transfer all of Lessor's right, title
and interest thereto to Lessee ("AS IS" and without any representations or
warranties and with the disclaimers set forth in Section 6.1, except that such
Leased Property is free and clear of Lessor Liens), all at Lessee's sole cost
and expense.

ARTICLE VI

DISCLAIMER AND ASSIGNMENT OF WARRANTIES

SECTION 6.1. Disclaimer of Warranties. LESSEE ACKNOWLEDGES AND
AGREES THAT, ALTHOUGH LESSOR WILL OWN AND HOLD TITLE TO THE HOTEL SITE, THE
HOTEL AND EQUIPMENT THAT ARE THE SUBJECT OF LEASE SUPPLEMENTS, LESSEE IS SOLELY
RESPONSIBLE UNDER THE TERMS OF THE CONSTRUCTION AGENCY AGREEMENT FOR THE DESIGN,
DEVELOPMENT, BUDGETING AND CONSTRUCTION OF THE HOTEL AND EQUIPMENT AND ANY
ALTERATIONS. The Hotel Site, the Hotel and Equipment are let by Lessor "AS IS"
in their present or then condition, as the case may be, subject to (a) any
rights of any parties in possession thereof, (b) the state of the title thereto
existing at the time Lessor acquired its interest in the Hotel Site, the Hotel
and Equipment, (c) any state of facts which a physical inspection might show,
(d) all Applicable Laws, and (e) any violations of Applicable Laws which may
exist at the commencement of the term of the applicable Lease Supplement. Lessee
has examined the Hotel Site, the Hotel and Equipment (insofar as Lessor is
concerned) has found the same to be satisfactory. NEITHER LESSOR, AGENT NOR ANY
LENDER HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO
THE TITLE TO THE HOTEL SITE, THE HOTEL OR THE EQUIPMENT OR TO THE VALUE,
MERCHANTABILITY, HABITABILITY, CONDITION, OR FITNESS FOR USE OF THE SAME, OR ANY
PART THEREOF, OR ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR
IMPLIED, WITH RESPECT TO THE HOTEL SITE, THE HOTEL OR EQUIPMENT OR ANY PART
THEREOF, AND NEITHER LESSOR, AGENT NOR ANY LENDER SHALL BE LIABLE FOR ANY
LATENT, HIDDEN, OR PATENT DEFECT THEREIN OR THE FAILURE OF THE HOTEL OR
EQUIPMENT, OR ANY PART THEREOF, TO COMPLY WITH ANY APPLICABLE LAWS, except that
Lessor hereby represents and warrants that the Hotel Site, the Hotel and
Equipment are and shall be free of Lessor Liens (such Lessor representation and
warranty being made by (x) the Bank with respect to any Lessor Liens
attributable to the Bank, and (y) Trustee with respect to any Lessor Liens
attributable to Trustee). Lessee has been afforded full opportunity to inspect
the Hotel Site, the Hotel and Equipment, is satisfied with the results of its
inspections and is entering into this Lease solely on the basis of the results
of its own inspections, and all risks incident to the matters discussed in the
preceding sentence, as between Lessor, Agent and the Lenders, on the one hand,
and Lessee, on the other, are to be borne by Lessee. The provisions of this
Article VI have been negotiated, and, except to the extent otherwise expressly
stated, the foregoing provisions are intended to be a complete exclusion and
negation of any representations or warranties by any of Lessor, Agent or the
Lenders, express or implied, with respect to the Hotel Site, the Hotel and
Equipment (or any interest therein), that may arise pursuant to any law now or
hereafter in effect, or otherwise.

SECTION 6.2. Assignment of Warranties. Lessor assigns to Lessee, to
the extent assignable, all of its interest, if any, in any warranties, covenants
and representations of any manufacturer or vendor of any item of Equipment;
provided that such assignment shall be effective only when no Event of Default
exists; and provided, further, that any action taken by Lessee by reason thereof
shall be at the expense of Lessee and shall be consistent with Lessee's
obligations pursuant to this Lease.

ARTICLE VII

MAINTENANCE AND REPAIR;
ALTERATIONS ADDITIONS AND SUBSTITUTIONS

SECTION 7.1. Maintenance and Repair; Compliance With Law. Without
limiting Lessee's obligations under Section 5.11 of the Participation Agreement
or Section 3.7 of the Construction Agency Agreement, Lessee, at its own expense,
shall at all times (a) maintain the Hotel in a first class condition (ordinary
wear and tear excepted) and make all necessary repairs thereto, of every kind
and nature whatsoever, whether interior or external, ordinary or extraordinary,
structural or non-structural or foreseen or unforeseen, in each case as required
by all Requirements of Law, the standards imposed by insurance policies required
to be maintained hereunder with respect to the Hotel and on a basis consistent
with the repair and maintenance of properties comparable in type and location to
the Hotel, but in any case the Hotel shall be maintained at least in conformity
with the maintenance and repair guidelines of Lessee and its Affiliates for
similar property owned or leased by them, and (b) maintain the Equipment in good
and safe order, operating condition and repair (ordinary wear and tear
excepted), substantially in conformance with the maintenance and repair
standards and procedures as are set forth in the manufacturer's manuals
pertaining to the Equipment and as otherwise required to enforce claims against
each vendor or manufacturer of each item of Equipment and in compliance in all
material respects with Applicable Law and the standards imposed by insurance
policies required to be maintained hereunder with respect to the Equipment, but
in any event such Leased Property shall be maintained at a standard that is no
less than the standard used by the Lessee for similar hotels and equipment it
owns or leases.

In addition, Lessee, at its own expense, shall make all necessary
or appropriate repairs, replacements, substitutions and modifications in respect
of the Leased Property (or any component thereof) which may be required to keep
the Leased Property in the condition required by clause (a) or (b) above.

SECTION 7.2. Alterations.

(a) If any item of Equipment or individual component thereof or,
after the Completion Date, the Hotel or individual component
thereof, is required to be altered, added to, replaced, improved or
modified in order to comply with Applicable Law (a "Required
Alteration"), Lessee shall notify Lessor and diligently proceed to
make such Required Alteration at its own expense.

(b) Lessee, at its own expense, may make any alteration,
addition, replacement, improvement or modification to the Hotel or
any item of Equipment (a "Permitted Alteration"), or remove any
part that becomes worn out, broken or obsolete, if Lessee continues
to be in compliance with Section 7.1 and such action, when
completed, will be of such character as not to materially adversely
affect (i) the current fair market value of the Hotel or item of
Equipment, (ii) the originally anticipated use or function thereof,
as applicable, and (iii) the originally anticipated residual value
of the Hotel or item of Equipment. In addition, the Permitted
Alteration shall not cause the Hotel or item of Equipment to become
suitable for use only by Lessee.

(c) All Alterations shall be completed in a commercially
reasonable manner and shall not, when completed, violate the terms
of any restriction, easement, condition, covenant or other matter
affecting the Land or the Leased Property.

(d) Neither Lessor nor Agent need inquire into or confirm that
Alterations were made in conformity with these requirements.

SECTION 7.3. Replacement and Substitution. Lessee may replace an
item of Equipment subject to this Lease with a replacement item of equipment
that meets the suitability standards set forth in Section 9.1(d). Lessee may
request the replacement of an item of Equipment by delivery of a replacement
notice to Lessor at least 20 days prior to the date of the proposed
substitution. Upon a permitted substitution of equipment pursuant to this
Section 7.3 and subject to receipt of approval from the Gaming Authorities with
respect to the Gaming Equipment, as required by Applicable Law, Lessor shall
execute and deliver to Lessee an assignment of purchase orders and a bill of
sale (without representations or warranties, except that the substituted item is
free and clear of all Lessor Liens) and such other documents as may be required
to release the substituted item from the terms of this Lease, all at Lessee's
expense. Leased items of Equipment that have been substituted or replaced
pursuant to this Section 7.3 shall become the property of Lessee, and title
thereto shall automatically vest in Lessee upon such permitted substitution or
replacement.

SECTION 7.4. Removal. No Required Alteration may be removed or
severed from the Hotel or item of Equipment to which it is attached (unless no
longer required by Applicable Law so long as clauses (i) and (ii) below are
satisfied). A Permitted Alteration (or component thereof) may be removed by
Lessee at its expense if (i) it is readily removable without causing material
damage to the Hotel or item of Equipment to which it is attached, (ii) the
removal does not violate Applicable Law and (iii) no Default or Event of Default
is continuing.

SECTION 7.5. Maintenance and Repair Reports. Lessee shall keep
maintenance and repair reports in sufficient detail, and as customary for owners
or operators of hotels or casinos, to indicate the nature and date of major work
done. Such reports shall be kept on file by Lessee at its offices during the
Lease Term, and shall be made available to Lessor upon reasonable request.
Lessee shall give notice to Lessor and Agent of any Condemnation or Casualty the
cost to repair which is reasonably expected by Lessee to exceed $500,000,
promptly after Lessee has knowledge thereof.

ARTICLE VIII

USE; UTILITY CHARGES

SECTION 8.1. Use. Without limiting Lessee's obligations under
Section 5.11 of the Participation Agreement or Construction Agent's obligations
under Sections 3.6 or 3.7(a) of the Construction Agency Agreement, Lessee shall
use and operate the Leased Property in compliance with any and all Applicable
Laws. Lessee shall procure and maintain in effect all licenses, registrations,
certificates, permits, approvals and consents required by Applicable Law or any
Governmental Authority in connection with the ownership, delivery, installation,
use and operation of the Leased Property. The Leased Property will at all times
be and remain in the possession and control of Lessee, subject, however, to
Articles IV and X. The Hotel shall be located on the Hotel Site, and the
Equipment shall in no event be located outside of (i) the Resort or the Land
without prior written notice to Lessor, (ii) the State of Mississippi without
prior written notice to Lessor and the taking (before such relocation) of all
actions necessary to maintain the perfection of the security interest of Lessor
and Agent therein, and (iii) the continental United States.

SECTION 8.2. Utility Charges. Lessee shall pay or cause to be paid
all charges for electricity, power, gas, oil, water, telephone, sanitary sewer
service and all other rents and utilities used in or on the Leased Property
during the Lease Term. Lessee shall be entitled to receive any credit or refund
with respect to any utility charge paid by Lessee and the amount of any credit
or refund received by Lessor on account of any utility charges paid by Lessee,
net of the costs and expenses reasonably incurred by Lessor in obtaining such
credit or refund, shall be promptly paid over to Lessee.

ARTICLE IX

CASUALTY; REPLACEMENT; INSURANCE

SECTION 9.1. Casualty.

(a) If at any time before the Completion Date the Hotel suffers
a Casualty, Lessee and Lessor agree that the provisions of the
Construction Agency Agreement shall apply.

(b) If the Hotel suffers a Casualty on or after the Completion
Date, Lessee shall (i) give prompt written notice of such
occurrence and the date thereof to Lessor and (ii) purchase the
Hotel on the next Payment Date at least 60 days after such Casualty
(but in no event later than the Lease Termination Date) for the
related Lease Supplement Balance. All Casualty Recoveries held by
Lessor shall be applied on the next following Payment Date in
reduction of Lessee's obligations to Lessor. Lessor shall remit to
Lessee any such Casualty Recoveries which it has received and which
remain after reducing the Lease Balance to zero.

(c) If a Casualty occurs with respect to an item or items of
Equipment, Lessee shall (i) give prompt written notice of such
occurrence and the date thereof to Lessor and (ii) either (A)
replace such item or items of Equipment with respect to which the
Casualty has occurred pursuant to the following provisions of
Section 9.1(d) or (B) purchase such item or items of Equipment from
Lessor, no later than the next Payment Date occurring at least 60
days after such Casualty (but in no event later than the Lease
Termination Date), at a purchase price equal to the Casualty Item
Amount. The Lease Supplement Balance of the Lease Supplement to
which the item or items of Equipment were subject shall be reduced,
upon payment by Lessee, by an amount equal to the Casualty Item
Amount.

(d) If any item of Equipment is to be replaced, no later than
the earlier of (i) 60 days after the occurrence of a Casualty or
(ii) the Lease Termination Date, Lessee will substitute equipment
meeting the suitability standards set forth in this Section 9.1(d)
for the item of Equipment suffering the Casualty. To be suitable as
a replacement, such replacement item of equipment must be of the
same general type, year of construction (or a later year of
construction), function, utility, state of repair and operating
condition as the item of Equipment suffering the Casualty, must
have a fair market value of not less than the fair market value
(immediately preceding the Casualty assuming that such item of
Equipment had been maintained in accordance with Article VII) of
the item of Equipment suffering the Casualty, and be free and clear
of any Liens other than Permitted Liens. Lessee shall cause a Bill
of Sale and a Certificate of Acceptance to be executed and
delivered to Lessor in order to subject such replacement item of
Equipment to this Lease, and upon such execution and delivery and
the receipt by Lessor, Agent and the Lenders of (i) a certificate
of insurance in accordance with Section 9.4 evidencing Lessee's
compliance with the insurance provisions of Section 9.3 with
respect to such replacement item of Equipment, and (ii) an opinion
of counsel to Lessor in form and substance reasonably satisfactory
to the Agent and the Lenders to the effect that properly prepared
financing statements have been filed and recorded in all public
offices where necessary to perfect the security interest of Lessor
in the replacement item of Equipment, that the description of the
replacement item of Equipment is adequate and that no other filing
or recording or giving of notice with or to any other Governmental
Authority is necessary to perfect Lessor's security interest in
such replacement item of Equipment. Such replacement item of
Equipment shall be deemed an item of Equipment for all purposes
hereof.

(e) If no Event of Default exists and Lessee elects to replace
any item of Equipment suffering a Casualty, Lessee shall be
entitled to receive from Lessor the Casualty Recoveries with
respect thereto, to be used to reimburse Lessee for the cost of
replacement of such item of Equipment after Lessee fully applies
the Casualty Recoveries properly received by it in replacement of
such item of Equipment pursuant to Section 9.1(f). Lessor, subject
to the rights of any insurer insuring such item of Equipment as
provided herein, shall execute and deliver to Lessee, or to its
assignee or nominee, a quitclaim bill of sale (without
representations or warranties except that such item of Equipment is
free and clear of Lessor Liens) for such item of Equipment, and
such other documents as may be required to release such item of
Equipment from the terms of this Lease, in such form as may
reasonably be requested by Lessee. All fees, costs and expenses
relating to a substitution as described herein shall be borne by
Lessee.

(f) All Casualty Recoveries in excess of $2,000,000 in respect
of a Casualty to the Hotel or any item of Equipment shall be paid
directly to Lessor for deposit into the Account, or if paid to
Lessee, such excess funds shall be immediately paid by Lessee to
Lessor for deposit into the Account; provided, however, that all
such excess funds received by Lessor in respect of a Casualty to
the Hotel or any item of Equipment occurring before the
Construction Completion Date shall be applied by Lessor in
accordance with the Construction Agency Agreement. Subject to the
proviso of the preceding sentence, if an Event of Default exists,
Lessor may retain all Casualty Recoveries as cash collateral or, if
no Event of Default exists, Lessee shall be entitled to apply all
Casualty Recoveries in accordance with Section 9.1(b) or (e), as
applicable, and any balance remaining after compliance with Section
9.1(b) or (e), as the case may be, shall be retained by or returned
to Lessee. Lessee shall not be entitled to any Casualty Recoveries
in excess of $2,000,000 until it applies all amounts received in
relation to such Casualty Recovery equal to such amount in repair
or replacement of the affected item of Equipment or Hotel.

SECTION 9.2. Non-Casualty Losses.

(a) If at any time before the Construction Completion Date an
item of Equipment or the Hotel suffers any condemnation, loss,
physical harm or damage not constituting a Casualty (a
"Non-Casualty Loss"), Lessee and Lessor agree that the provisions
of the Construction Agency Agreement shall apply.

(b) If any item of Equipment or the Hotel suffers any
Non-Casualty Loss, Lessee shall repair or replace such item of
Equipment or the Hotel.

(c) All Non-Casualty Recoveries in excess of $2,000,000 in
respect of any Non-Casualty Loss to an item of Equipment or the
Hotel (including any component thereof) shall be paid directly to
Lessor for deposit into the Account, or if paid to Lessee, such
excess funds shall be immediately paid by Lessee to Lessor for
deposit into the Account; provided, however, that all such excess
funds received by Lessor in respect of a Non-Casualty Loss to an
item of Equipment or the Hotel occurring before the Construction
Completion Date shall be applied by Lessor in accordance with the
Construction Agency Agreement. Subject to the proviso of the
preceding sentence, if an Event of Default exists, Lessor may
retain all Non-Casualty Recoveries as cash collateral or, if no
Event of Default exists, Lessee shall be entitled to apply all
Non-Casualty Recoveries in accordance with Lessee's obligations
under Section 9.2(b), and any balance remaining after compliance
with Section 9.2(b) shall be retained by Lessee (without
diminishing Lessee's other obligations hereunder). Lessee shall not
be entitled to any Non-Casualty Recoveries in excess of $2,000,000
until it applies all amounts received in relation to such Casualty
Recovery of less than or equal to such amount in repair or
replacement of the affected item of Equipment.

SECTION 9.3. Required Coverages. Lessee will keep the Hotel and the
Equipment insured by financially sound and reputable insurers against loss or
damage of the kinds and in the amounts customarily insured against by similar
corporations engaged in similar operations and carry such other insurance as is
usually carried by such corporations, provided that in any event Lessee will
maintain:

(a) Comprehensive General Liability Insurance. Combined single
limit insurance against claims for bodily injury, death or
third-party property damage occurring on, in or about the Hotel and
the Equipment in an amount at least equal to $25,000,000 per
occurrence with such deductibles as are carried by similarly
situated companies involved in operating similar facilities and
equipment.

(b) Insurance Against "All Risk" of Loss or Damage. Insurance
against "all risk" of loss or damage covering the Hotel and the
Equipment or any portion thereof included in the special causes of
loss form, including flood and earthquake coverage if available at
commercially reasonable rates, in an amount and with such
deductibles as are carried by companies similar to Lessee owning or
leasing equipment similar to the Hotel and the Equipment; provided,
however, that at no time shall the amount of such coverage be less
than one hundred and ten percent of the Lease Balance.

(c) Builder's Risk Insurance. During the construction,
procurement and installation of the Hotel, all-risk builders'
insurance in respect of the Hotel.

(d) Other Insurance. Such other insurance including workers
compensation and business interruption insurance, in each case as
generally carried by owners of similar facilities and equipment in
the State of Mississippi, in such amounts and against such risks as
are then customary for equipment and property similar in use.

Such insurance shall be written by reputable insurance companies that are
financially sound and solvent and otherwise reasonably appropriate considering
the amount and type of insurance being provided by such companies. In the case
of liability insurance maintained by Lessee, each policy shall name Trustee,
Agent, Lessor and all Lenders, as additional insureds. In the case of property
insurance maintained by Lessee, each policy shall name the Trustee and Agent as
mortgagee and as additional loss payee. Each policy referred to in this Section
9.3 (other than workers compensation insurance) shall provide that: (i) it will
not be cancelled or its limits reduced, or allowed to lapse without renewal,
except after not less than 30 days' prior written notice to each additional
insured; (ii) such insurance is primary with respect to any other insurance
carried by or available to Trustee, Agent, Lessor and all Lenders; (iii) the
insurer shall waive any right of subrogation, setoff, counterclaim, or other
deduction, whether by attachment or otherwise, against the Agent or Lessor; and
(iv) such policy shall contain a severability of interest clause providing for
coverage of Trustee, Agent, Lessor and each Lender as if separate policies had
been issued to each of them. Lessee will notify Trustee and Agent promptly of
any policy cancellation, reduction in policy limits, modification or amendment.

SECTION 9.4. Delivery of Insurance Certificates. On or before the
Closing Date and thereafter not less than 30 days prior to the expiration date
of the expiring policies which are required to be maintained pursuant to Section
9.3 and upon written request of Lessor after a Lease Event of Default, Lessee
shall deliver to Trustee and Agent certificates of insurance satisfactory to
Agent evidencing the existence of all insurance required to be maintained
hereunder and setting forth the respective coverages, limits of liability,
carrier, policy number and period of coverage.

ARTICLE X

LEASE EVENTS OF DEFAULT

SECTION 10.1. Lease Events of Default. The occurrence of any one or
more of the following events, whether any such event shall be voluntary or
involuntary or come about or be effected by operation of law or pursuant to or
in compliance with any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body, shall constitute a
"Lease Event of Default":

(a) Any payment of Rent or any other payment payable by Lessee
hereunder or under any other Operative Document shall not be paid
when due and such failure shall continue unremedied for a period of
3 Business Days;

(b) Any representation or warranty on the part of Lessee or any
Guarantor contained in any Operative Document or in any
certificate, letter or other writing or instrument furnished or
delivered to Lessor, Agent or any Lender or pursuant thereto, shall
at any time prove to have been incorrect in any material respect
when made, deemed made or reaffirmed, as the case may be;

(c) Parent shall default in the performance or observance of any
term, covenant, condition or agreement on its part to be performed
or observed under Sections 5.2 or 5.16 of the Participation
Agreement or the Guaranty;

(d) Lessee shall default in any material respect in the
performance or observance of any term, covenant, condition or
agreement on its part to be performed or observed under Section
9.3;

(e) Lessee or Parent shall default in any material respect in
the performance or observance of any other term, covenant,
condition or agreement on their part to be performed or observed
hereunder or under any Operative Document (and not constituting an
Event of Default under any other clause of this Section 10.1), and
such default shall continue unremedied for a period of 30 days
after: (i) written notice thereof by Lessor, Agent or any Lender to
Lessee or any Guarantor; or (ii) Lessee or Parent has knowledge
thereof;

(f) (i) Lessee, any Guarantor or any Subsidiary that is a
sublessee, assignee or transferee of any Leased Property shall
generally fail to pay, or admit in writing its inability to pay,
its debts as they become due, or shall voluntarily commence any
case or proceeding or file any petition under any bankruptcy,
insolvency or similar law or seeking dissolution, liquidation or
reorganization or the appointment of a receiver, trustee, custodian
or liquidator for itself or a substantial portion of its property,
assets or business or to effect a plan or other arrangement with
its creditors, or shall file any answer admitting the jurisdiction
of the court and the material allegations of any involuntary
petition filed against it in any bankruptcy, insolvency or similar
case or proceeding, or shall be adjudicated bankrupt, or shall make
a general assignment for the benefit of creditors, or shall consent
to, or acquiesce in the appointment of, a receiver, trustee,
custodian or liquidator for itself or a substantial portion of its
property, assets or business; or (ii) corporate action shall be
taken by Lessee, any Guarantor or any Subsidiary that is a
sublessee, assignee or transferee of any Leased Property for the
purpose of effectuating any of the foregoing;

(g) Involuntary proceedings or an involuntary petition shall be
commenced or filed against Lessee, any Guarantor or any Subsidiary
that is a sublessee, assignee or transferee of the Leased Property
under any bankruptcy, insolvency or similar law or seeking the
dissolution, liquidation or reorganization of Lessee, any Guarantor
or any Subsidiary that is a sublessee, assignee or transferee of
any Leased Property or the appointment of a receiver, trustee,
custodian or liquidator for Lessee, any Guarantor or any Subsidiary
that is a sublease, assignee or transferee of any Leased Property
or of a substantial part of the property, assets or business of
Lessee, or any writ, judgment, warrant of attachment, execution or
similar process shall be issued or levied against a substantial
part of the property, assets or business of Lessee, any Guarantor
or any Subsidiary that is a sublease, assignee or transferee of any
Leased Property, and such proceedings or petition shall not be
dismissed or stayed, or such writ, judgment, warrant of attachment,
execution or similar process shall not be released, vacated or
fully bonded, within 60 days after commencement, filing or levy, as
the case may be;

(h) A Plan shall fail to maintain the minimum funding standard
required by Section 412(d) of the Code for any plan year or a
waiver of such standard is sought or granted under Section 412(d),
or a Plan is or shall have been terminated or the subject of
termination proceedings under ERISA, or the Lessee or an ERISA
Affiliate has incurred a liability to or on account of a Plan under
Section 4062, 4063, 4064, 4201 or 4204 of ERISA, and there shall
result from any such event or events a Material Adverse Effect;

(i) Any Operative Document or any Lien granted under any
Operative Document shall (except in accordance with its terms), in
whole or in part, terminate, cease to be effective or cease to be
the legally valid, binding and enforceable obligation of Lessee, or
any Guarantor, as the case may be; or Lessee, any Guarantor, or any
Affiliate of any of them shall, directly or indirectly, contest in
any manner the effectiveness, validity, binding nature or
enforceability thereof; or the Liens securing Lessee's or Trustee's
obligations under the Operative Documents shall, in whole or in
part, cease to be a perfected first priority Lien, subject only to
Permitted Liens;

(j) Any default (subject to any applicable grace period) occurs
under any other agreement for borrowing money or receiving credit,
in each case individually or in the aggregate equal to or greater
than $10,000,000, under which Parent, Lessee or any Guarantor may
be obligated as borrower or guarantor;

(k) A final judgment or final judgments for the payment of money
are entered by a court or courts of competent jurisdiction against
the Parent, Lessee or any Guarantor and such judgment or judgments
(to the extent not covered by insurance provided by a recognized
insurance carrier) remain undischarged for a period (during which
execution shall not be effectively stayed) of 30 days, provided
that the aggregate of all such judgments exceeds $10,000,000;

(l) There has occurred any revocation, suspension or loss of any
Gaming Permit of Lessee or Parent (after the same shall have been
obtained) which results in the cessation of business at the Casino
or any other gaming location of Lessee for a period of more than 5
consecutive days;

(m) Any Event of Default under and as defined in the Indenture
(or under any documentation evidencing a refinancing or replacement
of the indebtedness created thereunder) has occurred and is
continuing;

(n) Any Construction Agency Event of Default has occurred and is
continuing;

(o) There shall have occurred a Change of Control;

(p) The Casino shall not have commenced gaming operations by
July 31, 1996;

(q) Parent has materially breached its obligations under the
Standby Equity Commitment Agreement; or

(r) Any "Event of Default" under and as defined in the Levee
Board Lease.

SECTION 10.2. Remedies. If any Lease Event of Default exists and is
continuing, Lessor shall have the rights, options and remedies of a beneficiary
of a deed of trust and secured party at law or in equity and, without limiting
the foregoing, Lessor may, so long as such Lease Event of Default is continuing,
do one or more of the following as Lessor in its sole discretion shall
determine, without limiting any other right or remedy Lessor may have on account
of such Lease Event of Default:

(a) Lessor may, by notice to Lessee, rescind or terminate this
Lease as of the date specified in such notice; however, (i) no
reletting, reentry or taking of possession of the Leased Property
(or any portion thereof) by Lessor will be construed as an election
on Lessor's part to terminate this Lease unless a written notice of
such intention is given to Lessee, (ii) notwithstanding any
reletting, reentry or taking of possession, Lessor may at any time
thereafter elect to terminate this Lease for a continuing Lease
Event of Default and (iii) no act or thing done by Lessor or any of
its agents, representatives or employees and no agreement accepting
a surrender of the Leased Property shall be valid unless the same
be made in writing and executed by Lessor;

(b) Lessor may (i) demand that Lessee, and Lessee shall upon the
written demand of Lessor, return the Hotel promptly to Lessor in
the manner and condition required by, and otherwise in accordance
with all of the provisions of, Articles VII, and Lessor shall not
be liable for the reimbursement of Lessee for any costs and
expenses incurred by Lessee in connection therewith and (ii)
without prejudice to any other remedy which Lessor may have for
possession of the Hotel, and to the extent and in the manner
permitted by Applicable Law, enter upon the Hotel and take
immediate possession of (to the exclusion of Lessee) the Hotel or
any part thereof and expel or remove Lessee and any other Person
who may be occupying the Hotel, by summary proceedings or
otherwise, all without liability to Lessee for or by reason of such
entry or taking of possession, whether for the restoration of
damage to property caused by such taking or otherwise and, in
addition to Lessor's other damages, Lessee shall be responsible for
all costs and expenses incurred by Lessor, Agent or the Lenders in
connection with any reletting, including reasonable brokers' fees
and all costs of any alterations or repairs made by Lessor;

(c) Lessor may demand that Lessee marshall and return the
Equipment to a location chosen by Lessor in the State of
Mississippi and Lessee shall upon written demand of Lessor,
promptly undertake to marshall and return the Equipment no later
than 30 days from the date of the written demand, or in the
alternative, Lessor may, upon notice to Lessee, enter upon the
Casino Barges for the purpose of taking possession and removing the
Equipment from the Casino Barges, and Lessor shall not be liable
for any cost and expenses, or direct or consequential damages
incurred by Lessee in connection therewith; it being understood
that Lessor's removal of the Equipment may cause the suspension of
operations at the Casino during the period of removal and
thereafter;

(d) (i) Lessor may demand, by written notice to Lessee
specifying a Payment Date (the "Final Rent Payment Date") not
earlier than ten days after the date of such notice, that Lessee
pay to Lessor, and Lessee shall pay to Lessor, on the Final Rent
Payment Date (in lieu of Periodic Rent due after the Final Rent
Payment Date), an amount equal to the sum of (A) the Lease Balance
computed as of the Final Rent Payment Date, plus (B) all accrued
and unpaid Rent due and payable to and including the Final Rent
Payment Date, and upon payment of such amount, and the amount of
all other sums due and payable by Lessee under this Lease and the
other Operative Documents (and interest at the Overdue Rate on the
amounts payable under this clause (A) from the Final Rent Payment
Date to the date of actual payment), Lessor shall comply with the
transfer provisions of Section 5.2 or Lessor may sell all or any
part of the Leased Property at public or private sale free and
clear of any rights of Lessee and without any duty to account to
Lessee with respect to such action or inaction or any proceeds with
respect thereto (except to the extent required by clause (ii) below
if Lessor shall elect to exercise its rights thereunder) in which
event Lessee's obligation to pay Periodic Rent hereunder for
periods commencing after the date of such sale shall be terminated
or proportionately reduced, as the case may be; and (ii) Lessee
shall pay to Lessor, on the date of such sale (in lieu of Periodic
Rent due for periods commencing on or after the Payment Date
coinciding with such date of sale (or, if the sale date is not a
Payment Date, the Payment Date next preceding the date of such
sale)), an amount equal to (A) the excess, if any, of (1) the Lease
Balance calculated as of such Payment Date (including all Rent due
and unpaid to and including such Payment Date), over (2) the net
proceeds of such sale (that is, after deducting all costs and
expenses incurred by Lessor, Agent and the Lenders incident to such
conveyance, including repossession costs, brokerage commissions,
prorations, transfer taxes, fees and expenses for counsel, title
insurance fees, survey costs, recording fees, and any repair
costs); plus (B) interest at the Overdue Rate on the foregoing
amount from such Payment Date until the date of payment;

(e) Lessor may, at its option, elect not to terminate this Lease
and continue to collect all Periodic Rent, Supplemental Rent, and
all other amounts due Lessor (together with all costs of
collection) and enforce Lessee's obligations under this Lease as
and when the same become due, or are to be performed, and at the
option of Lessor, upon any abandonment of the Leased Property by
Lessee or re-entry of same by Lessor, Lessor may, in its sole and
absolute discretion, elect not to terminate this Lease and may make
the necessary repairs in order to relet the Leased Property, and
relet the Leased Property or any part thereof for such term or
terms (which may be for a term extending beyond the Lease Term) and
at such rental or rentals and upon such other terms and conditions
as Lessor in its reasonable discretion may deem advisable; and upon
each such reletting all rentals actually received by Lessor from
such reletting shall be applied to Lessee's obligations hereunder
and the other Operative Documents in such order, proportion and
priority as Lessor may elect in Lessor's sole and absolute
discretion. If such rentals received from such reletting during any
period are less than the Rent with respect to the Leased Property
to be paid during that period by Lessee hereunder, Lessee shall pay
any deficiency, as calculated by Lessor, to Lessor on the next
Payment Date, it being understood that upon payment in full of the
Lease Balance and all other amounts due and payable under the
Operative Documents, Lessor will transfer possession of the Leased
Property to Lessee in accordance with Section 5.2, but subject to
any existing leases entered into pursuant to this paragraph (e);

(f) Unless the Leased Property has been sold in its entirety,
Lessor may, whether or not Lessor shall have exercised or shall
thereafter at any time exercise any of its rights under paragraph
(b), (c) or (d) of this Section 10.2 with respect to the Leased
Property or portions thereof, demand, by written notice to Lessee
specifying a date (a "Termination Date") not earlier than 10 days
after the date of such notice, that Lessee purchase, on such
Termination Date, the Leased Property (or the remaining portion
thereof) in accordance with the provisions of Section 5.1(a);

(g) Lessor may exercise any other right or remedy that may be
available to it under Applicable Law, or proceed by appropriate
court action, either at law or in equity, to enforce the terms
hereof or to recover damages for the breach hereof. Separate suits
may be brought to collect any such damages for any period(s), and
such suits shall not in any manner prejudice Lessor's right to
collect any such damages for any subsequent period(s), or Lessor
may defer any such suit until after the expiration of the Lease
Term, in which event such suit shall be deemed not to have accrued
until the expiration of the Lease Term;

(h) Lessor may retain and apply against Lessor's damages all
sums which Lessor would, absent such Lease Event of Default, be
required to pay to, or turn over to, Lessee pursuant to the terms
of this Lease;

(i) If a Lease Event of Default shall have occurred and be
continuing, Lessor, as a matter of right and without notice to
Lessee, shall have the right to apply to any court having
jurisdiction to appoint a receiver or receivers of the Leased
Property, and Lessee hereby irrevocably consents to any such
appointment. Any such receiver(s) shall have all of the usual
powers and duties of receivers in like or similar cases and all of
the powers and duties of Lessor in case of entry, and shall
continue as such and exercise such powers until the date of
confirmation of the sale of the Leased Property unless such
receivership is sooner terminated;

(j) To the maximum extent permitted by law, Lessee hereby waives
the benefit of any appraisement, valuation, stay, extension,
reinstatement and redemption laws now or hereafter in force and all
rights of marshalling in the event of any sale of the Leased
Property or any interest therein;

(k) Lessor shall be entitled to enforce payment of the
indebtedness and performance of the obligations secured hereby and
to exercise all rights and powers under this instrument or under
any of the other Operative Documents or other agreement or any laws
now or hereafter in force, notwithstanding some or all of the
obligations secured hereby may now or hereafter be otherwise
secured, whether by mortgage, security agreement, pledge, lien,
assignment or otherwise. Neither the acceptance of this instrument
nor its enforcement, shall prejudice or in any manner affect
Lessor's right to realize upon or enforce any other security now or
hereafter held by Lessor, it being agreed that Lessor shall be
entitled to enforce this instrument and any other security now or
hereafter held by Lessor in such order and manner as Lessor may
determine in its absolute discretion. No remedy herein conferred
upon or reserved to Lessor is intended to be exclusive of any other
remedy herein or by law provided or permitted, but each shall be
cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by
statute. Every power or remedy given by any of the Operative
Documents to Lessor or to which it may otherwise be entitled, may
be exercised, concurrently or independently, from time to time and
as often as may be deemed expedient by Lessor. In no event shall
Lessor, in the exercise of the remedies provided in this instrument
(including in connection with the assignment of rents to Lessor, or
the appointment of a receiver and the entry of such receiver on to
all or any part of the Property), be deemed a "mortgagee in
possession," and Lessor shall not in any way be made liable for any
act, either of commission or omission, in connection with the
exercise of such remedies; or

(l) An action of deed of trust foreclosure as now provided by
Section 89-1-55 of the Mississippi Code of 1972, as amended or
other appropriate proceedings now or hereafter prescribed by law,
may forthwith be commenced and prosecuted to judgment, execution
and sale, for the collection of the whole amount of such Lease
Balance, together with all fees, costs and expenses of such
proceedings, including reasonable attorney's fees and expenses. And
all errors in such proceedings, together with any stays of or
exemptions from execution, or extensions of time of payment, which
may be given by any Applicable Laws now in force, or which may be
enacted hereafter, are hereby forever waived and released.

Amounts received by Lessor from the Account will be applied against Lessee's
liabilities hereunder. If, pursuant to the exercise by Lessor of its remedies
pursuant to this Section 10.2, the Lease Balance and all other amounts due and
owing from Lessee under this Lease and the other Operative Documents have been
paid in full, then Lessor shall remit to Lessee any excess amounts received by
Lessor.

SECTION 10.3. Waiver of Certain Rights. If this Lease shall be
terminated pursuant to Section 10.2, Lessee waives, to the fullest extent
permitted by law, (a) any notice of re-entry or the institution of legal
proceedings to obtain re-entry or possession; (b) any right of redemption,
re-entry or repossession; (c) the benefit of any laws now or hereafter in force
exempting property from liability for rent or for debt or limiting Lessor with
respect to the election of remedies; and (d) any other rights which might
otherwise limit or modify any of Lessor's rights or remedies under this Article
X.

SECTION 10.4. Power of Attorney. Lessee unconditionally and
irrevocably appoints Lessor as its true and lawful attorney-in-fact, with full
power of substitution, to the extent permitted by Applicable Laws, in its name
and stead and on its behalf, for the purpose of effectuating any sale,
assignment, transfer or delivery hereunder, if a Lease Event of Default occurs,
whether pursuant to foreclosure or power of sale or otherwise, and in connection
therewith to execute and deliver all such deeds, bills of sale, assignments,
releases (including releases of this Lease on the records of any Governmental
Authority) and other proper instruments as Lessor may reasonably consider
necessary or appropriate. Lessee ratifies and confirms all that such attorney or
any substitute shall lawfully do by virtue hereof. If requested by Lessor or any
purchaser, Lessee shall ratify and confirm any such lawful sale, assignment,
transfer or delivery by executing and delivering to Lessor or such purchaser,
all deeds, bills of sale, assignments, releases and other proper instruments to
effect such ratification and confirmation as may be designated in any such
request.

SECTION 10.5. Remedies Cumulative; No Waiver; Consents. To the
extent permitted by, and subject to the mandatory requirements of, Applicable
Laws, each and every right, power and remedy herein specifically given to Lessor
or otherwise in this Lease shall be cumulative and shall be in addition to every
other right, power and remedy herein specifically given or now or hereafter
existing at law, in equity or by statute, and each and every right, power and
remedy whether specifically herein given or otherwise existing may be exercised
from time to time and as often and in such order as may be deemed expedient by
Lessor, and the exercise or the beginning of the exercise of any power or remedy
shall not be construed to be a waiver of the right to exercise at the same time
or thereafter any right, power or remedy. No delay or omission by Lessor in the
exercise of any right, power or remedy or in the pursuit of any remedy shall
impair any such right, power or remedy or be construed to be a waiver of any
default on the part of Lessee or be an acquiescence therein. Lessor's consent to
any request made by Lessee shall not be deemed to constitute or preclude the
necessity for obtaining Lessor's consent, in the future, to all similar
requests. No express or implied waiver by Lessor of any Lease Event of Default
shall in any way be, or be construed to be, a waiver of any future or subsequent
Lease Event of Default. To the extent permitted by Applicable Laws, Lessee
hereby waives any rights now or hereafter conferred by statute or otherwise that
may require Lessor to sell, lease or otherwise use the Hotel Site, the Hotel or
Equipment in mitigation of Lessor's damages upon the occurrence of a Lease Event
of Default or that may otherwise limit or modify any of Lessor's rights or
remedies under this Article X.

ARTICLE XI

LESSOR'S RIGHT TO CURE

SECTION 11.1. Lessor's Right to Cure Lessee's Lease Defaults.
Lessor, upon two (2) Business Days prior notice (except that in any circumstance
in which there is a risk of imminent harm to any Person or property or any
possibility of criminal liability to any Lender, no notice shall be required),
without waiving or releasing any obligation or Lease Event of Default, may (but
shall be under no obligation to) remedy any Lease Default or Lease Event of
Default for the account and at the sole cost and expense of Lessee, including
the failure by Lessee to maintain the insurance required by Article IX, and may,
to the fullest extent permitted by law, and notwithstanding any right of quiet
enjoyment in favor of Lessee, enter upon the Leased Property for such purpose
and take all such action thereon as may be necessary or appropriate therefor. No
such entry shall be deemed an eviction of Lessee. All reasonable out-of-pocket
costs and expenses so incurred (including fees and expenses of counsel including
allocated time charges of internal counsel) together with interest thereon at
the Overdue Rate from the date on which such sums or expenses are paid by
Lessor, shall be paid by Lessee to Lessor on demand.

ARTICLE XII

WARRANT OF TITLE; EASEMENTS; ADDITIONAL FINANCINGS

SECTION 12.1. Warrant of Title. Nothing contained in this Lease
shall be construed as constituting the consent or request of Lessor, expressed
or implied, to or for the performance by any contractor, mechanic, laborer,
materialman, supplier or vendor of any labor or services or for the furnishing
of any materials for any construction, alteration, addition, repair or
demolition of or to the Property or any part thereof. NOTICE IS HEREBY GIVEN
THAT NEITHER LESSOR, AGENT, BANK NOR ANY LENDER IS OR SHALL BE LIABLE FOR ANY
LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO LESSEE, OR TO
ANYONE HOLDING THE LEASED PROPERTY OR ANY PART THEREOF THROUGH OR UNDER LESSEE,
AND THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS
SHALL ATTACH TO OR AFFECT THE INTEREST OF LESSOR OR ANY LENDER IN AND TO THE
LEASED PROPERTY.

SECTION 12.2. Grants and Releases of Easements; Lessor's Waivers.
Provided that no Lease Event of Default shall have occurred and be continuing
and subject to the provisions of Articles VII, IX and X Lessor hereby consents
in each instance to the following actions by Lessee, in the name and stead of
Lessor, but at Lessee's sole cost and expense: (a) the granting of easements,
licenses, rights-of-way and other rights and privileges in the nature of
easements reasonably necessary or desirable for the use, repair, or maintenance
of the Leased Property as herein provided; (b) the release of existing easements
or other rights in the nature of easements which are for the benefit of the
Leased Property; (c) if required by applicable Governmental Authority in
connection with the construction, the dedication or transfer of unimproved
portions of the Leased Property for road, highway or other public purposes; and
(d) the execution of amendments to any covenants and restrictions affecting the
Leased Property; provided, however, that in each case (i) such grant, release,
dedication, transfer or amendment does not impair the value, utility or
remaining useful life of the Leased Property, (ii) such grant, release,
dedication, transfer, annexation or amendment is reasonably necessary in
connection with the use, maintenance, alteration or improvement of the Leased
Property, (iii) such grant, release, dedication, transfer, annexation or
amendment will not cause the Leased Property or any portion thereof to fail to
comply in any respect with the provisions of this Lease or any other Operative
Documents and all Requirements of Law (including, without limitation, all
applicable zoning, planning, building and subdivision ordinances, all applicable
restrictive covenants and all applicable architectural approval requirements);
(iv) all governmental consents or approvals required prior to such grant,
release, dedication, transfer, annexation or amendment have been obtained, and
all filings required prior to such action have been made; (v) such grant,
release, dedication, transfer, annexation or amendment will not result in any
down-zoning of the Leased Property or any portion thereof or a material
reduction in the maximum density or development rights available to the Property
under all Requirements of Law; (vi) Lessee shall remain obligated under this
Lease and under any instrument executed by Lessee consenting to the assignment
of Lessor's interest in this Lease as security for indebtedness, in each such
case in accordance with their terms, as though such grant, release, dedication,
transfer, annexation or amendment had not been effected and (vii) Lessee shall
pay and perform any obligations of Lessor under such grant, release, dedication,
transfer, annexation or amendment.

SECTION 12.3. Additional Financings. Without limiting the
obligations of the Lessee set forth in Article VII, Lessor acknowledges Lessee's
right to acquire, finance and secure under the UCC and other Applicable Laws,
inventory, furnishings, furniture, equipment, machinery, leasehold, and
improvements located at the Hotel, the Casino Barges, the Levee Land and the
Hotel Site.

ARTICLE XIII

ASSIGNMENTS

All or any of the right, title or interest and obligations of
Lessor in and to this Lease and the rights, benefits, advantages and obligations
of Lessor hereunder, including the rights to receive payment of rental or any
other payment hereunder, and the rights, titles and interests in and to the
Hotel Site, the Hotel and the Equipment, may be assigned or transferred by
Lessor only in accordance with the provisions set forth in the Trust Agreement.

ARTICLE XIV

GRANT OF LIEN

SECTION 14.1. Grant of Lien. Title to the Hotel Site, the Hotel and
the Equipment is held by Lessor as collateral security for the obligations of
Lessee hereunder and under the Operative Documents to which it is a party until
such time as Lessee has fulfilled all of its obligations hereunder and under
such Operative Documents. Lessee hereby assigns, grants and pledges to Lessor
and the Lenders a security interest and Lien in (a) the Hotel Site, (b) the
Hotel, (c) the Equipment, (d) all of Lessee's right, title and interest, whether
now or hereafter existing or acquired, in to and under each of the items,
accounts, agreements listed in Section 2.1 of the Security Agreement, and (e)
the proceeds thereof (collectively, the "Lessee Collateral"), to secure the
payment of all sums due hereunder and under the Operative Documents to which it
is a party and the performance of all obligations hereunder and the other
Operative Documents to which it is a party.

As additional security for the Rent, the Lease Balance and all
other sums owed to Lessor by Lessee hereunder and under the other Operative
Documents to which it is a party, Lessee does hereby grant, bargain, sell,
transfer and convey unto Watson Butts, trustee (together with his successors and
assigns, the "Local Trustee"), whose address is Gulfport, Harrison County,
Mississippi, his successors in trust and assigns all of the Lessee's right,
title and interest in and to the Hotel Site, the Hotel and Equipment, including,
without limitation, all buildings, structures and other improvements to the
extent any of the foregoing constitute interests in real property, and all
fixtures and other property now or hereafter attached to or affixed to any such
buildings, structures or other improvements to the extent any of the foregoing
constitute interests in real property, and any additions and alterations thereto
or replacements thereof, now or hereafter built, constructed or located upon the
Hotel Site to the extent any of the foregoing constitute interests in real
property, all rents, additional rents, issues, income, revenues, distributions,
royalties and profits now or in the future payable in respect of the Hotel and
Equipment, together with all of the right, power and authority of Lessee to
alter, modify or change the terms, conditions and provisions of this Lease, and
any other real property lease pertaining to the Hotel Site or the Hotel, to
consent to any request made by a tenant or landlord pursuant thereto, or to
surrender, cancel or terminate the same or to accept any surrender, cancellation
or termination of the same, together with all of the options, rights, powers and
privileges of the Lessee under any real property lease pertaining to the Hotel
Site or the Hotel, whether heretofore or hereafter existing, including, without
limitation, and all present and future right, title and interest of the Lessee
in and to (i) all refunds, tax abatement agreements, rebates, reserves, deferred
payments, deposits, cost savings, awards and payments of any kind due from or
payable by (a) any Governmental Authority, or (b) any insurance or utility
company, in each case under clause (a) or (b) above in respect of the Leased
Property, and (ii) all refunds, rebates and payments of any kind due from or
payable by any Governmental Authority for any taxes, assessments, or
governmental or quasi-governmental charges or levies imposed upon the Lessee in
respect of the Hotel Site, the Hotel Site, the Hotel and Equipment, all proceeds
(including claims and demands therefor) of the conversion, voluntary or
involuntary, of any of the foregoing into cash or liquidated claims, including
without limitation the proceeds of insurance and condemnation awards in respect
of the Hotel Site, the Hotel and Equipment or any portion thereof, all
additional estates, rights and interests hereafter acquired by the Lessee in the
Hotel Site, the Hotel or item of Equipment, or any portion thereof to the extent
any of the foregoing constitutes an interest in real property, including,
without limitation, a fee simple interest in the Hotel Site, the Hotel or item
of Equipment, or any portion thereof, and the Lessee further grants to the
Lessor, pursuant to the UCC, a security interest in all of the foregoing to the
extent any of the foregoing is personal property together with all proceeds of
the conversion, whether voluntary or involuntary, of any of the Hotel or
Equipment into cash or other liquid claims, including without limitation, all
awards, payments or proceeds, including interest thereon, and the right to
receive the same, which may be made as a result of any Casualty, any exercise of
the right of eminent domain or deed in lieu thereof, any injury to the Hotel
Site, the Hotel or Equipment and any defect in title in the Hotel Site, the
Hotel or Equipment or other matter insured under any policy of title insurance,
together with attorney's fees, costs and disbursements incurred by the Lessor or
any Lender (including allocated time charges of internal counsel) in connection
with the collection of such awards, payments and proceeds.

To have and to hold the same whether now owned or held or hereafter
acquired unto Local Trustee, his successor-in-trust forever, in trust, however,
to secure to the Lessor the payment of the Rent, the Lease Balance and all other
sums owing to Lessor under this Lease and under the other Operative Documents
and the performance and observation of the terms, covenants, warranties,
conditions, agreements and obligations under this Lease and under the other
Operative Documents. If the Lessee shall pay all sums due hereunder when due
according to the terms hereof and shall otherwise fully and properly perform and
comply with all of the Obligations, then this conveyance shall be come null and
void. If a Lease Event of Default has occurred and is continuing and at the
request of the Lessor, the Local Trustee or his successor is hereby authorized
and empowered, upon giving notice of the sale or sales by advertisement for
three consecutive weeks preceding the sale in a newspaper published in the
county where the Hotel Site is located and posting one notice at the courthouse
of said county for such time, describing the time, place and terms of sale, and
such other additional advertising, if any, as Local Trustee, in his sole
discretion, shall deem advisable, to sell the Hotel and Equipment at public
outcry at the courthouse door in said county to the highest bidder for cash, in
bar of all rights and equities of redemption, homestead, spouse's elective share
and all other rights or exemptions of every kind, including, without limitation,
the statutory right of redemption, all of which are hereby expressly waived.
Local Trustee may sell the Hotel and Equipment as a whole or in such parcels or
parts as he in his judgment may deem advisable. Lessor may bid at any sale and
may purchase the Hotel and Equipment, or any part thereof, if it is the highest
bidder therefor. Lessor shall be entitled to apply all or any part of the
indebtedness secured hereby as a credit to the purchase price. Upon such sale,
Local Trustee, or his successors-in-trust, is authorized to execute and deliver
a deed or deeds to the Hotel and Equipment to the purchaser and place the
purchaser in quiet and peaceful possession thereof. Lessee agrees that in the
event Local Trustee has not entered and taken possession of the Hotel and
Equipment prior to the sale, that the purchaser shall be entitled to immediate
possession thereof upon the delivery to him by Local Trustee of the deed for the
Hotel and Equipment. In the event of the sale of the Hotel and Equipment under
and by virtue of this provision, Lessee and all persons holding under it, shall
be and become tenants at will of the purchaser of the same, from and after the
execution and delivery of a deed to such purchaser.

Either prior to or at the time of the sale if Local Trustee shall
deem it proper for any reason to postpone or continue said sale, he may do so
from time to time, in which event notice of the date to which the sale is
continued may be published before such sale is held or the sale may be adjourned
from time to time by Local Trustee or his agent or successor and reset at a
later date without additional publication; provided, that an announcement to
that effect is made at the scheduled place of sale at the time and on the date
the sale was originally set. One or more exercises of the powers herein granted
shall not extinguish nor exhaust such powers until the Hotel and all Equipment
is sold or until the entire indebtedness secured hereby is paid in full. Local
Trustee may require the successful bidder at any sale to deposit immediately
with Local Trustee cash or a certified check in the amount not to exceed five
percent (5) of his bid, provided notice of such requirement is contained in the
advertisement of the sale. Out of the proceeds of such sale, Local Trustee shall
first pay all expenses in connection with the execution of this Trust, including
reasonable attorneys' fees and auctioneers' fees and the remainder of the
proceeds shall be paid to and applied as to provided in the Loan Agreement.

If Lessor, in its sole and absolute discretion, shall desire for
any reason whatsoever to have a substitute trustee appointed, then Lessor is
hereby authorized and empowered to appoint, at any time and from time to time,
by an instrument duly executed and acknowledged and filed for recordation
wherever this instrument is recorded, a substitute trustee, in the place and
stead of the Local Trustee initially named herein or subsequently appointed by
Lessor, which substitute trustee shall have the rights, powers and authority and
be charged with all the duties and responsibilities that are conferred or
charged upon Local Trustee initially named herein.

The necessity of Local Trustee or any successor trustee making
oath, filing inventory or giving bond for the security of this trust, as may be
required by the laws of Mississippi, is hereby expressly waived.

SECTION 14.2. Retention of Title or Proceeds in the Case of
Default. If Lessee would be entitled to any amount (including any Casualty
Recoveries or Non-Casualty Recoveries) or title to the Hotel or any item of
Equipment hereunder but for the existence of any Event of Default or event which
with the giving of notice and/or passage of time could become an Event of
Default, Lessor shall hold such amount or portion of the Hotel or item of
Equipment as part of the Lessee Collateral and shall be entitled to apply such
amounts against any amounts due hereunder; provided that Lessor shall distribute
such amount or transfer the Hotel or Equipment in accordance with the other
terms of this Lease if and when no Event of Default or event which with the
giving of notice and/or passage of time could become an Event of Default exists.

ARTICLE XV

MISCELLANEOUS

SECTION 15.1. Applicable Law. THIS LEASE HAS BEEN DELIVERED IN NEW
YORK AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS LEASE SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF NEW
YORK, INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT
EXCLUDING ALL OTHER CHOICE OF LAWS AND CONFLICTS RULES OF SUCH STATE, EXCEPT AS
TO MATTERS RELATING TO PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION
OF THE SECURITY INTEREST AND LIENS CREATED HEREUNDER OR REMEDIES PROVIDED WITH
RESPECT TO THE HOTEL SITE AND THE LEASED PROPERTY, WHICH SHALL BE GOVERNED BY
THE LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED AND TO THE EXTENT THAT THE
EXERCISE OF CERTAIN RIGHTS OR REMEDIES HEREUNDER OR UNDER THE OTHER OPERATIVE
DOCUMENTS MAY REQUIRE COMPLIANCE WITH GAMING LAWS.

SECTION 15.2. Notices. Unless otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be in writing and shall be delivered and shall be deemed to
have been given in accordance with Section 9.3 of the Participation Agreement.

SECTION 15.3. Counterparts. This Lease has been executed in several
counterparts. One counterpart has been prominently marked "Lessor's Copy" and
the other counterparts have been prominently marked "Lessee's Copy" or "Copy."
Only the counterpart marked "Lessor's Copy" shall evidence a monetary obligation
of Lessee or shall be deemed to be an original or to be chattel paper for
purposes of the UCC, and such copy shall be held by Lessor.

SECTION 15.4. Severability. Whenever possible, each provision of
this Lease shall be interpreted in such manner as to be effective and valid
under Applicable Law; but if any provision of this Lease shall be prohibited by
or invalid under Applicable Law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Lease.

SECTION 15.5. Successors and Assigns. This Lease shall be binding
upon the parties hereto and their respective successors and assigns and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.

SECTION 15.6. Parties in Interest. Except as expressly provided
herein, none of the provisions of this Lease is intended for the benefit of any
Person except the parties hereto, their successors and permitted assigns;
provided that each of Lessor and Lessee agrees that the Lenders shall benefit
from all of the provisions of this Lease applicable to them.

SECTION 15.7. Limitation of Liability. It is expressly understood
and agreed by the parties hereto that (a) this Lease is executed and delivered
by Bank, not individually or personally but solely as Trustee of the Trust, as
Lessor, in the exercise of the power and authority conferred and vested in it
under the Trust Agreement; (b) each of the representations, undertakings and
agreements herein made on the part of Lessor is made and intended not as
personal representations, undertakings and agreements by Bank but is made and
intended for the purpose of binding only Trustee in its trust capacity and as
Lessor; (c) nothing herein contained shall be construed as creating any
liability on Bank, individually or personally to perform any covenant either
expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties hereto and by any other Person claiming by,
through or under this Lease; and (d) under no circumstances shall Bank be
personally liable for the payment of any indebtedness or expenses of Lessor or
be liable for the breach or failure of any obligation, representation, warranty
or covenant made or undertaken by Lessor under this Lease or any of the other
Operative Documents; provided that Bank shall be liable in its individual
capacity for its own willful misconduct or gross negligence (or negligence in
the handling of funds) or for any Taxes based in or measured by any fees,
commission or compensation received by it for acting as Trustee.

SECTION 15.8. Captions; Table of Contents. Section captions and the
table of contents used in this Lease (including the Schedules, Exhibits and
Annexes hereto) are for convenience of reference only and shall not affect the
construction of this Lease.

SECTION 15.9. Schedules and Exhibits. The Schedules and Exhibits
hereto, along with all attachments referenced in any of such items, are
incorporated herein by reference and made a part hereof.

SECTION 15.10. No Merger. If the fee simple interest in the Leased
Property and the leasehold interest therein shall be held by the same party, the
interest in the Leased Property granted to Trustee pursuant to the Ground Lease
and the interest of Lessee in the Lease shall not terminate or be merged and the
Ground Lease and the Lease shall remain in full force and effect.

[Signature page to follow]

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

HANCOCK BANK,
not in its individual capacity, except as
expressly stated herein, but solely as
Trustee, as Lessor

By: /s/ C.H. Gibbons
Name Printed: C.H. Gibbons
Title: Vice President & Trust Officer

Address:
2510 14th Street
Gulfport, MS 39501

Telephone No.: (601) 868-4400

Telecopier No.:(601) 868-4333

BL DEVELOPMENT CORP.,
as Lessee

By: /s/ Timothy J. Cope
Name Printed: Timothy J. Cope
Title: Chief Financial Officer

Address:
13705 First Avenue North
Plymouth, MN 55441-5451

Telephone No.: (612) 449-7030

Telecopier No.:(612) 449-7022

CORPORATE ACKNOWLEDGMENT
(LESSOR-TRUSTEE)

STATE OF MISSISSIPPI)
) ss:
COUNTY OF HARRISON )

Personally appeared before me, the undersigned authority in and for the
said county and state, on this 13th day of May, 1996, within my jurisdiction,
the within named C.H. Gibbons, duly identified before me, who acknowledged that
__he is Vice President & Trust Officer of Hancock Bank, a state banking
corporation, and that for and on behalf of said bank, and as its act and deed in
the representative capacity herein stated, __he executed the above and foregoing
instrument, after first having been duly authorized by said bank so to do.

/s/ Haz Jeannette Lee
NOTARY PUBLIC

My Commission Expires:

My Commission Expires Dec. 26, 1998
- -------------------------
(Affix official seal)

CORPORATE ACKNOWLEDGMENT
(LESSEE)

STATE OF MINNESOTA)
) ss:
COUNTY OF HENNEPIN)

Personally appeared before me, the undersigned authority in and for the
said county and state, on this 16th day of May, 1996, within my jurisdiction,
the within named Timothy J. Cope, duly identified before me, who acknowledged
that he is Chief Financial Officer of BL Development Corp., a Minnesota
corporation, and that for and on behalf of said corporation, and as its act and
deed, he executed the above and foregoing instrument, after first having been
duly authorized by said corporation so to do.

/s/ PATRICIA L. BUFFHAM
------------------------------
NOTARY PUBLIC

My Commission Expires:

- -------------------------
(Affix official seal)

Prepared by and when Lease Supplement
recorded mail to:
Exhibit A
Mayer, Brown & Platt to Lease
1675 Broadway, Suite 1900
New York, New York 10019
Attn: Barry K. Gassman, Esq.
(212) 506-2500

FORM OF LEASE SUPPLEMENT

THIS LEASE SUPPLEMENT, dated May 10, 1996 (this "Lease Supplement"), is
between HANCOCK BANK, not in its individual capacity, except as expressly stated
herein, but solely as Trustee under the Trust Agreement, as Lessor (the
"Lessor"), and BL DEVELOPMENT CORP., a Minnesota corporation, as Lessee (the
"Lessee");

W I T N E S S E T H:

WHEREAS, Lessee and Lessor have heretofore entered into that certain Lease
dated as of May 10, 1996 filed for record in Book ___ at Page __ in the Office
of the Chancery Clerk of Tunica County, Mississippi (as amended, supplemented,
or otherwise modified from time to time, the "Lease"). Unless otherwise defined
herein, capitalized terms used herein shall have the meanings specified in the
Lease; and

WHEREAS, the Lease provides for the execution and delivery of a Lease
Supplement on the Closing Date substantially in the form hereof for the purpose
of confirming the acceptance and lease of [a] certain [Hotel] [Equipment],
specifying the Rent applicable to such [Hotel] [Equipment] and setting forth
certain other matters, all as required pursuant to the Lease;

NOW, THEREFORE, in consideration of the premises and other good and
sufficient consideration, Lessor and Lessee hereby agree as follows:

==============================================================================
ALL RIGHT, TITLE AND INTEREST OF LESSOR UNDER THIS LEASE AND THE PROPERTY
RIGHTS SUBJECT HERETO HAVE BEEN ASSIGNED TO, AND ARE SUBJECT TO A LIEN AND
SECURITY INTEREST IN FAVOR OF BA LEASING & CAPITAL CORPORATION, AS AGENT
("AGENT"), UNDER THE SECURITY AGREEMENT, DATED AS OF MAY 10, 1996, AS AMENDED
FROM TIME TO TIME, FOR THE BENEFIT OF THE AGENT AND THE LENDERS REFERRED TO IN
SUCH SECURITY AGREEMENT. THIS LEASE HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS.
TO THE EXTENT, IF ANY, THAT THIS LEASE SUPPLEMENT CONSTITUTES CHATTEL PAPER (AS
SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY
APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS LEASE SUPPLEMENT MAY BE
CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART HEREOF OTHER THAN
THE ORIGINAL EXECUTED "LESSOR'S COPY", WHICH SHALL BE IDENTIFIED AS THE
COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY AGENT ON OR FOLLOWING
THE SIGNATURE PAGE THEREOF.

THIS COUNTERPART IS [NOT] THE ORIGINAL EXECUTED LESSOR'S COPY.

INDEXING INSTRUCTIONS:

Part of the Northwest 1/4 and Southwest 1/4 of Section 5, Township 3 South,
Range 10 West of Tunica County, Mississippi.

1. [Hotel] [Equipment] Subject to Lease Supplement. [The portion of the
Hotel that Lessor has had constructed for its use pursuant to the Construction
Agency Agreement] [The Equipment] identified in the Certificate of Acceptance
dated ______________], attached hereto as Exhibit A and incorporated herein,
located on the [Hotel Site] [Land] shall become, upon satisfaction or waiver of
the conditions set forth in Article III of the Participation Agreement, subject
to the terms and conditions of this Lease Supplement and the Lease. The Lessee
does hereby grant a Lien and security interest in the Hotel or the Equipment
identified herein to secure the Obligations.

[2. Interim and Base Periods. The Interim Period for the [Equipment]
[Hotel] shall commence on the date of the initial Advance for Equipment and
shall end [insert applicable date from definition of "Interim Period"] and the
Base Period shall immediately follow and end on the [third] [fifth] anniversary
of the Base Date.]

3. Confirmation. Lessee hereby confirms its agreement, in accordance with
the Lease as supplemented by this Lease Supplement to pay Rent to Lessor for the
[Hotel] [Equipment] leased hereunder. Nothing herein shall reduce Lessee's
obligation to make all other payments required under the Lease, including those
payments to be made on the last day of the Lease Term.

4. Incorporation into Lease. This Lease Supplement shall be construed in
connection with and as part of the Lease, and all terms, conditions and
covenants contained in the Lease, as supplemented by this Lease Supplement,
shall be and remain in full force and effect.

5. References. Any and all notices, requests, certificates and other
instruments executed and delivered concurrently with or after the execution and
delivery of this Lease Supplement may refer to the "Lease, dated as of May 10,
1996", or may identify the Lease in any other respect without making specific
reference to this Lease Supplement, but nevertheless all such references shall
be deemed to include this Lease Supplement, unless the context shall otherwise
require.

6. Counterparts. This Lease Supplement may be executed in any number of
counterparts, each executed counterpart constitute an original but all together
one and the same instrument.

7. Governing Law. THIS LEASE SUPPLEMENT HAS BEEN DELIVERED IN, AND SHALL IN
ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE. PROVIDED THAT MATTERS RELATING TO PERFECTION AND THE EFFECT OF
PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST AND LIENS GRANTED
HEREUNDER OR REMEDIES PROVIDED WITH RESPECT TO THE LAND AND THE LEASED PROPERTY
SHALL BE GOVERNED BY THE LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED AND TO
THE EXTENT THAT THE EXERCISE OF CERTAIN RIGHTS OR REMEDIES HEREUNDER OR UNDER
THE OTHER OPERATIVE DOCUMENTS MAY REQUIRE COMPLIANCE WITH GAMING LAWS.

[Signature page to follow]

IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement to
be duly executed and delivered as of the day and year first above written with
actual execution on the dates set forth in the respective acknowledgements
below.

HANCOCK BANK, not in its individual capacity except as
expressly stated herein, but solely as Trustee, as
Lessor

By___________________________
Name:
Title:

Address:

Telephone No.:

Telecopier No.:

BL DEVELOPMENT CORP., as Lessee

By___________________________
Name: Timothy J. Cope
Title: Chief Financial Officer

Address: 13705 First Avenue North
Plymouth, MN 55441-5451

Telephone No.: (612) 449-7030

Telecopier No.:(612) 449-7022

CORPORATE ACKNOWLEDGMENT
(LESSOR-TRUSTEE)

STATE OF ________________)
) ss:
COUNTY OF _______________)

Personally appeared before me, the undersigned authority in and for
the said county and state, on this ____ day of ________, 19__, within my
jurisdiction, the within named ________________________________, duly identified
before me, who acknowledged that __he is __________________________________ of
_________________________, a state banking corporation, and that for and on
behalf of said bank, and as its act and deed in the representative capacity
herein stated, __he executed the above and foregoing instrument, after first
having been duly authorized by said bank so to do.

------------------------------
NOTARY PUBLIC

My Commission Expires:

- -------------------------
(Affix official seal)

CORPORATE ACKNOWLEDGMENT
(LESSEE)

STATE OF ________________)
) ss:
COUNTY OF _______________)

Personally appeared before me, the undersigned authority in and for the
said county and state, on this ____ day of ________, 19__, within my
jurisdiction, the within named ___________________________, duly identified
before me, who acknowledged that __he is _____________________________ of
__________________________, a _____________________ corporation, and that for
and on behalf of said corporation, and as its act and deed, __he executed the
above and foregoing instrument, after first having been duly authorized by said
corporation so to do.

------------------------------
NOTARY PUBLIC

My Commission Expires:

- -------------------------
(Affix official seal)

Exhibit B
to Lease

DESCRIPTION OF HOTEL SITE

LEGAL DESCRIPTION

All that tract or parcel of land lying and being in Section 5, Township 3
South, Range 10 West, Tunica County, Mississippi, as shown as containing 10.14
acres on that certain plat prepared by Rosser Lowe, a division of Rosser
International, Inc. (William J. Daniel III, MS PLS No. 2031), entitled Boundary
Survey of Hotel I Site, dated 19 April 1996, last revised May 6, 1996 and being
more particularly described as follows:

BEGINNING at a point at the intersection of the northerly line of a
proposed private drive and the easterly right-of-way line of Village Center Road
(variable width right-of-way);

THENCE along a curve to the left having a radius of 1937.62 feet and an arc
length of 221.26 feet, being subtended by a chord of North 14 degrees 46 minutes
54 seconds East for a distance of 221.14 feet, along said easterly right-of-way
line, to a point;
THENCE North 11 degrees 30 minutes 26 seconds East for a distance of 213.54
feet, continuing along said right-of-way line, to a point;
THENCE along a curve to the right having a radius of 925.97 feet and an arc
length of 518.60 feet, being subtended by a chord of South 60 degrees 42 minutes
33 seconds East for a distance of 511.85 feet, leaving said right-of-way line,
to a point;
THENCE South 44 degrees 39 minutes 53 seconds East for a distance of 203.07
feet, to a point;
THENCE South 73 degrees 47 minutes 51 seconds East for a distance of 69.49
feet to a point;
THENCE South 16 degrees 02 minutes 06 seconds West for a distance of 247.62
feet, to a point;
THENCE South 28 degrees 48 minutes 07 seconds East for a distance of 136.12
feet, to a point;
THENCE South 73 degrees 48 minutes 08 seconds East for a distance of 246.92
feet, to a point;
THENCE South 16 degrees 11 minutes 43 seconds West for a distance of 86.34
feet, to a point;
THENCE North 74 degrees 22 minutes 51 seconds West for a distance of 212.82
feet, to a point;
THENCE South 61 degrees 11 minutes 56 seconds West for a distance of 118.17
feet, to a point;
THENCE North 28 degrees 48 minutes 15 seconds West for a distance of 186.36
feet, to a point;
THENCE South 61 degrees 12 minutes 34 seconds West for a distance of 26.14
feet, to a point;
THENCE along a curve to the right having a radius of 108.24 feet and an arc
length of 90.46 feet, being subtended by a chord of South 85 degrees 48 minutes
34 seconds West for a distance of 87.85 feet, to a point;
THENCE along a curve to the left having a radius of 24.01 feet and an arc
length of 20.84 feet, being subtended by a chord of South 86 degrees 04 minutes
56 seconds West for a distance of 20.20 feet, to a point;
THENCE along a curve to the right having a radius of 325.60 feet and an arc
length of 63.89 feet, being subtended by a chord of South 65 degrees 53 minutes
40 seconds West for a distance of 63.78 feet, to a point on the easterly line of
a proposed private drive;
THENCE along a curve to the left having a radius of 491.46 feet and an arc
length of 677.16 feet, being subtended by a chord of North 37 degrees 13 minutes
01 seconds West for a distance of 624.85 feet, along said line of a proposed
private drive northwesterly and westerly to the point of BEGINNING.

[EXECUTION COPY]

LOAN AGREEMENT

dated as of May 10, 1996

among

HANCOCK BANK,
not in its individual capacity, except
as expressly provided herein, but
solely as Trustee, as Borrower,

BA LEASING & CAPITAL CORPORATION,
as Agent

BANK OF SCOTLAND,
FIRST INTERSTATE BANK OF NEVADA,
and
SOCIETE GENERALE,
as Co-Agents

CREDIT LYONNAIS, LOS ANGELES BRANCH,
as Lead Manager

and

THE PERSONS NAMED ON SCHEDULE I,
as Lenders

TABLE OF CONTENTS

Section Page

ARTICLE I

DEFINITIONS

1.1. Defined Terms . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II

AMOUNT AND TERMS OF COMMITMENTS;
REPAYMENT AND PREPAYMENT OF LOANS

2.1. Commitment; Term. . . . . . . . . . . . . . . . . . . . . 2
2.2. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3. Procedure for Borrowing . . . . . . . . . . . . . . . . . 3
2.4. Prepayments; Lease Termination Payments and Premium . . . 3
2.5. Interest Rates. . . . . . . . . . . . . . . . . . . . . . 4
2.6. Determination of Interest Rate. . . . . . . . . . . . . . 4
2.7. Pro Rata Treatment among Loans. . . . . . . . . . . . . . 5
2.8. Payment from Trust Estate Only. . . . . . . . . . . . . . 5
2.9. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.10. Illegality . . . . . . . . . . . . . . . . . . . . . . 7
2.11. Increased Costs and Reduction of Return. . . . . . . . 7
2.12. Funding Losses . . . . . . . . . . . . . . . . . . . . 8
2.13. Inability to Determine Rates . . . . . . . . . . . . . 9
2.14. Survival . . . . . . . . . . . . . . . . . . . . . . . 9

ARTICLE III

RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME
FROM THE TRUST ESTATE

3.1. Rent Distribution . . . . . . . . . . . . . . . . . . . . 9
3.2. Distribution of Mandatory Prepayments . . . . . . . . . . 10
3.3. Distribution of Payments After Loan Event of Default. . . 11
3.4. Other Payments. . . . . . . . . . . . . . . . . . . . . . 12
3.5. Distribution of Excluded Amounts and Additional Costs. . 12
3.6. Guaranty Payments. . . . . . . . . . . . . . . . . . . . 12

ARTICLE IV

CONDITIONS PRECEDENT

ARTICLE V

AFFIRMATIVE COVENANTS OF THE BORROWER

5.1. Performance by the Borrower. . . . . . . . . . . . . . . 13
5.2. Waiver by the Borrower . . . . . . . . . . . . . . . . . 13

ARTICLE VI

LOAN EVENTS OF DEFAULT; REMEDIES

6.1. Loan Events of Default . . . . . . . . . . . . . . . . . 14
6.2. Remedies . . . . . . . . . . . . . . . . . . . . . . . . 15

ARTICLE VII

AGENT

7.1. Appointment and Authorization. . . . . . . . . . . . . . 17
7.2. Delegation of Duties . . . . . . . . . . . . . . . . . . 17
7.3. Liability of Agent . . . . . . . . . . . . . . . . . . . 17
7.4. Reliance by Agent. . . . . . . . . . . . . . . . . . . . 18
7.5. Notice of Default. . . . . . . . . . . . . . . . . . . . 19
7.6. Credit Decision. . . . . . . . . . . . . . . . . . . . . 19
7.7. Indemnification of Agent . . . . . . . . . . . . . . . . 20
7.8. Agent in Individual Capacity . . . . . . . . . . . . . . 20
7.9. Successor Agent. . . . . . . . . . . . . . . . . . . . . 21
7.10. Withholding Tax . . . . . . . . . . . . . . . . . . . . 21
7.11. Acceptance of Agency. . . . . . . . . . . . . . . . . 23
7.12. Distribution and Receipt of Payments by Bank. . . . . . 24
7.13. Lead Manager. . . . . . . . . . . . . . . . . . . . . . 25

ARTICLE VIII

MISCELLANEOUS

8.1. Amendments and Waivers . . . . . . . . . . . . . . . . . 25
8.2. Notices. . . . . . . . . . . . . . . . . . . . . . . . . 25
8.3. Successors and Assigns; Transfers and Participations . . 25
8.4. Counterparts . . . . . . . . . . . . . . . . . . . . . . 26
8.5. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . 26
8.6. Survival and Termination of Agreement. . . . . . . . . . 26
8.7. Entire Agreement . . . . . . . . . . . . . . . . . . . . 26
8.8. Severability . . . . . . . . . . . . . . . . . . . . . . 26

SCHEDULE I - Lenders

EXHIBIT A - Form of Note

LOAN AGREEMENT

THIS LOAN AGREEMENT (as amended and supplemented from time to time, this
"Loan Agreement"), dated as of May 10, 1996, is entered into by and among
HANCOCK BANK, not in its individual capacity, except as specifically provided
herein, but solely as Trustee under the Trust Agreement of even date herewith
(the "Borrower"); BA LEASING & CAPITAL CORPORATION, a California corporation, as
Agent; Bank of Scotland, First Interstate Bank of Nevada, and Societe Generale
(collectively, the "Co-Agents"); Credit Lyonnais, Los Angeles Branch, as Lead
Manager and the Persons named on Schedule I hereto, as Lenders.

W I T N E S S E T H:

WHEREAS, the Borrower desires to pay costs associated with the acquisition
of Equipment and the construction of the Hotel, all as more particularly
described in the Participation Agreement of even date herewith and in each of
the other Operative Documents; and

WHEREAS, the Borrower desires to borrow from the Lenders a portion of the
costs associated with the acquisition of the Equipment and the construction of
the Hotel;

NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1. Defined Terms. The capitalized terms used herein and not
otherwise defined shall have the meanings ascribed thereto in Appendix 1 to the
Participation Agreement dated as of the date hereof among BL Development Corp.,
as Lessee and Construction Agent; Grand Casinos, Inc. and certain of its
Subsidiaries, as Guarantors; the Borrower; the Trustee; the Arranger and Agent;
the Co-Agents; the Lead Manager and the Lenders identified therein (the
"Participation Agreement") for all purposes hereof.

ARTICLE II

AMOUNT AND TERMS OF COMMITMENTS;
REPAYMENT AND PREPAYMENT OF LOANS

SECTION 2.1. Commitment; Term. Subject to the terms and conditions hereof
and of the Participation Agreement, each Lender severally, but not jointly,
agrees to make term loans to the Borrower ("Loans") from time to time through
the Commitment Termination Date for the purpose of enabling the Trustee to pay
Hotel Costs and Equipment Costs, in an aggregate principal amount at any one
time outstanding not to exceed the amount of such Lender's Commitment.

SECTION 2.2. Notes.

(a) The Loans made by each Lender shall be evidenced by a promissory note
of the Borrower, substantially in the form of Exhibit A (as amended, modified,
supplemented, extended or renewed from time to time, a "Note"), with appropriate
insertions as to payee and principal amount, duly executed by the Borrower and
payable to the order of such Lender and in a maximum principal amount equal to
such Lender's Commitment. Each Note shall be dated the Closing Date and
delivered to the related Lender in accordance with Section 2.3 of the
Participation Agreement. Each Note shall (i) be stated to mature on the Final
Maturity Date and (ii) bear interest on the unpaid principal amount thereof from
time to time outstanding at the applicable interest rate per annum determined as
provided in, and payable as specified in, Section 2.6.

(b) Upon the consummation of each Advance, each Lender shall, and is hereby
authorized by the Borrower and the Lessee to, record in its records the amount
of the Loan advanced by such Lender on such Advance Date, the date and amount of
each continuation or conversion of such Loan, the length of each Interest Period
with respect thereto and the date and amount of each payment of principal and/or
interest relating thereto; provided, that the failure to make any such
recordation shall not affect the obligation of the Trustee under the Notes or
the corresponding obligation of the Lessee to pay Rent. In all events, prior to
any transfer of its Note, a Lender shall indicate in writing to its transferee
the date, amount and maturity of each Loan made by it which is still outstanding
and the amounts of accrued but unpaid interest thereon.

SECTION 2.3. Procedure for Borrowing.

(a) Subject to the terms and conditions of the Participation Agreement and
this Loan Agreement, the Borrower shall borrow under the Commitments on each
Advance Date upon receipt by the Trustee, Agent and the Lenders from the Lessee
of an Advance Request in accordance with Section 2.4(a) of the Participation
Agreement.

(b) Any Advance Request shall be delivered to the Trustee, Agent and the
Lenders in accordance with Section 2.4 of the Participation Agreement. Each
Lender will fund its pro rata share of the Advance in accordance with Section
2.2 of the Participation Agreement.

SECTION 2.4. Prepayments; Lease Termination Payments and Premium.

(a) Borrower shall repay in full the unpaid principal amount of each Loan
(including any Additional Costs) upon the Final Maturity Date.

(b) On each Scheduled Payment Date on or after the Initial Principal
Payment Date, the Borrower shall make a mandatory repayment of a portion of the
outstanding principal amount of each Note in an amount determined pursuant to
Section 3.8(a) of the Participation Agreement subject to the adjustment of
Section 3.8(b) of the Participation Agreement. If any Loans are made after the
Initial Principal Payment Date, then promptly after the Commitment Termination
Date the Agent shall deliver to each Lender an amortization schedule for its
Note showing the actual dollar amount of principal payable on each Note on each
Scheduled Payment Date, including any principal payments required to be paid
pursuant to Section 3.8(b) of the Participation Agreement.

(c) No other principal amortization of the Loans will be required prior to
the Final Maturity Date, except that upon the occurrence of (i) a Casualty or
Non-Casualty Loss that results in a purchase by Lessee of the Leased Property
suffering the Casualty or Non-Casualty Loss, (ii) Lessee exercising the early
termination option to purchase all or a portion of the Leased Property pursuant
to Section 5.1 of the Lease or (iii) a Lease Event of Default that results in
Lessor exercising its right to have Lessee purchase all of the Leased Property,
Borrower shall prepay the aggregate outstanding principal amount of the Loans
equal to the amount of principal that Lessee is required to pay as a result of
any of the foregoing pursuant to the applicable terms of the Lease, together
with interest accrued to the date of such prepayment on the principal amount so
prepaid, plus, Additional Costs, if any.

(d) If Lessee elects to exercise the early termination option (other than
as a result of a Casualty or Non-Casualty Loss) to purchase all or a portion of
the Leased Property pursuant to Section 5.1 of the Lease prior to the first
anniversary of the first day of the last commencing Base Period, Lessee shall
pay to the Agent for the account of the Lenders a premium (the "Premium") in an
amount equal to one percent of the amount of such prepayment on the date of such
prepayment.

(e) The Amortization Schedule is a composite of amortization schedules for
each of the Gaming Equipment, the Non-Gaming Equipment and the Hotel, each of
which is set forth on Schedule VI to the Participation Agreement (together with
the maturities for the related schedule under Section 3.8(b) of the
Participation Agreement, each a "Group Amortization Schedule"). In the event of
a partial prepayment of principal under clauses (c) or (d) above, any such
prepayment shall be applied pro rata, against the remaining scheduled maturities
set forth on the related Group Amortization Schedule and each of those
maturities shall be added for each Scheduled Payment Date, to the corresponding
maturities on the remaining Group Amortization Schedules. The additions shall
constitute the revised Amortization Schedule.

SECTION 2.5. Interest Rates. The Loans shall accrue interest at the
applicable Interest Rate from time to time in effect. The Interest Period for
which a LIBO Rate applies shall be one month unless the duration is shortened as
required by the definition of "Interest Period". Interest accrued on each Loan
shall be payable in arrears on each applicable Payment Date.

If all or a portion of the principal amount of or interest on the Notes
shall not be paid when due (whether at the Final Maturity Date thereof, by
acceleration or otherwise), such overdue amount shall, without limiting the
rights of any Lender under Section 6.2, bear interest at the Overdue Rate, in
each case from the date first due until paid in full (as well after as before
judgment) payable on demand.

SECTION 2.6. Determination of Interest Rate.

(a) During such time as a LIBO Rate applies to any of the Notes, interest
in respect of such Notes shall be calculated on the basis of a 360 day year and
the actual days elapsed. During such time as the Alternate Base Rate applies to
any of the Notes, interest in respect of such Notes shall be calculated on the
basis of a 365 (or 366, as applicable) day year and the actual number of days
elapsed. Agent shall, as soon as practicable, but in no event later than 2:00
p.m., Gulfport, Mississippi time, one Business Day prior to the first day of
each Interest Period, notify the Borrower, who shall notify the Lessee and the
Lenders, of the LIBO Rate. Any change in the Interest Rate on the Loans
resulting from a change in the Alternate Base Rate shall become effective as of
the opening of business on the day on which such Alternate Base Rate changes as
provided herein.

(b) Except as provided in Section 2.10 or Section 2.13, all Loans shall be
LIBO Rate Loans. LIBO Rate Loans shall be made by each Lender at its LIBOR
Office. At the end of each Interest Period, all LIBO Rate Loans shall
automatically be continued.

SECTION 2.7. Pro Rata Treatment among Loans. Except as otherwise expressly
set forth in Article III, and subject to Section 2.4(e), each payment (including
each prepayment) by the Borrower on account of principal of and interest on the
Loans shall be made pro rata among the Loans. The Agent shall apply any
prepayments in reduction of Loans so that the Borrower's funding losses under
Section 2.12 are minimized. All payments (including prepayments) to be made by
the Borrower hereunder and under the Notes shall be made without set-off or
counterclaim and shall be made to the Agent (or Bank as agent to the Agent), for
the account of the Lenders, at the Agent's office referred to in Schedule III of
the Participation Agreement (or Bank's office), in lawful money of the United
States of America and in immediately available funds. The Agent or Bank shall
distribute such payments to each Lender at its LIBOR Office, promptly upon
receipt in like funds as received.

SECTION 2.8. Payment from Trust Estate Only. All payments and expenses to
be made by or paid by the Borrower in respect of the Loans, this Loan Agreement
and the Security Documents shall be made only from the income and the proceeds
from the Trust Estate and only to the extent that the Borrower shall have
received sufficient income or proceeds from the Trust Estate to make such
payments in accordance with the terms of Article III. Each Lender agrees that it
will look solely to the income and proceeds from the Trust Estate for
distribution to such Lender as herein provided and that none of the Borrower or
the Agent is or shall be personally liable to any Lender for any amount or
expense payable hereunder or under any Note or Security Document except as
specifically provided for in the Trust Agreement, the Participation Agreement or
any other Operative Document. The provisions of this Section 2.8 shall apply
whether or not a Loan Event of Default shall have occurred and be continuing.

SECTION 2.9. Taxes.

(a) Subject to clause (c) of this Section 2.9, any and all payments by the
Borrower to each Lender or the Agent under this Loan Agreement and any other
Operative Document shall be made free and clear of, and without deduction or
withholding for any Taxes. In addition, the Borrower shall pay all Other Taxes.

(b) Borrower agrees to indemnify and hold harmless each Lender and the
Agent for the full amount of Taxes or Other Taxes (including any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this Section) paid by
each Lender or the Agent and any liability (including penalties, interest,
additions to tax and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Payment under this indemnification shall be made within 30 days after the date
any Lender or the Agent makes written demand therefor.

(c) If the Borrower shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, then:

(i) the sum payable shall be increased as necessary so that after
making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section) such
Lender or the Agent, as the case may be, receives an amount equal to the sum it
would have received had no such deductions or withholdings been made;

(ii) the Borrower shall make such deductions and withholdings;

(iii) the Borrower shall pay the full amount deducted or withheld
to the relevant taxing authority or other authority in accordance with
Applicable Law; and

(iv) the Borrower shall also pay to the Agent for the account of
each Lender, at the time interest is paid, all additional amounts which the
respective Lender specifies as necessary to preserve the after-tax yield the
Lender would have received if such Taxes or Other Taxes had not been imposed.

(d) Within 30 days after the date of any payment by the Borrower of Taxes
or Other Taxes, the Borrower shall furnish the Agent the original or a certified
copy of a receipt evidencing payment thereof, or other evidence of payment
satisfactory to the Agent.

(e) If the Borrower is required to pay additional amounts to any Lender or
the Agent pursuant to subsection (c) of this Section, then such Lender shall use
reasonable efforts (consistent with legal and regulatory restrictions) to change
the jurisdiction of its Lending Office so as to eliminate any such additional
payment by the Borrower which may thereafter accrue, if such change in the
judgment of such Lender is not otherwise disadvantageous to such Lender.

SECTION 2.10. Illegality.

(a) If any Lender determines that the introduction of any Requirement of
Law, or any change in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make LIBO Rate Loans, then,
on notice thereof by the Lender to the Borrower through the Agent, any
obligation of that Lender to make LIBO Rate Loans shall be suspended until the
Lender notifies the Agent and the Borrower that the circumstances giving rise to
such determination no longer exist.

(b) If a Lender determines that it is unlawful to maintain any LIBO Rate
Loan, the Borrower shall, upon its receipt of notice of such fact and demand
from such Lender (with a copy to the Agent), prepay in full such LIBO Rate Loans
of that Lender then outstanding, together with interest accrued thereon, either
on the last day of the Interest Period thereof, if the Lender may lawfully
continue to maintain such LIBO Rate Loans to such day, or immediately, if the
Lender may not lawfully continue to maintain such LIBO Rate Loans. If the
Borrower is required to so prepay any LIBO Rate Loan, then concurrently with
such prepayment, the Borrower shall borrow from the affected Lender, in the
amount of such repayment, an Alternate Base Rate Loan.

SECTION 2.11. Increased Costs and Reduction of Return.

(a) If any Lender determines that, due to either (i) the introduction of or
any change in or in the interpretation of any law or regulation or (ii) the
compliance by that Lender with any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost of such Lender of agreeing to make or making,
funding or maintaining any LIBO Rate Loans, then the Borrower shall be liable
for, and shall from time to time, upon demand (with a copy of such demand to be
sent to the Agent), pay to the Agent for the account of such Lender, additional
amounts as are sufficient to compensate such Lender for such increased costs.

(b) If any Lender shall have determined that (i) the introduction of any
Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation,
(iii) any change in the interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or (iv) compliance by such Lender (or
its Lending Office) or any corporation controlling such Lender with any Capital
Adequacy Regulation, affects or would affect the amount of capital required or
expected to be maintained by such Lender or any corporation controlling such
Lender and (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy and such Lender's desired return on
capital) determines that the amount of such capital is increased as a
consequence of its Commitments, Loans, credits or obligations under this Loan
Agreement, then, upon demand of such Lender to the Borrower through the Agent,
the Borrower shall pay to such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender for such
increase.

SECTION 2.12. Funding Losses. The Borrower shall reimburse each Lender and
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of:

(a) the failure of the Borrower to make on a timely basis any payment of
principal of any LIBO Rate Loan;

(b) the failure of the Borrower to borrow, continue or convert a Loan after
the Borrower has given (or is deemed to have given) an Advance Request;

(d) the prepayment or other payment (including after acceleration thereof)
of a LIBO Rate Loan on a day that is not the last day of the relevant Interest
Period; or

(e) the automatic conversion of any LIBO Rate Loan to an Alternate Base
Rate Loan on a day that is not the last day of the relevant Interest Period;
including any such loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds obtained by it to make, continue or
maintain its LIBO Rate Loans or from fees payable to terminate the deposits from
which such funds were obtained; provided, that such Lender shall have delivered
to the Borrower a certificate as to the amount of such loss or expense, which
certificate shall be conclusive in the absence of manifest error.

SECTION 2.13. Inability to Determine Rates. If the Agent determines that
for any reason adequate and reasonable means do not exist for determining the
LIBO Rate for any requested Interest Period with respect to a proposed LIBO Rate
Loan, or that the LIBO Rate applicable for any requested Interest Period with
respect to a proposed LIBO Rate Loan does not adequately and fairly reflect the
cost to the Lenders of funding such Loan, the Agent will promptly so notify the
Borrower and each Lender. Thereafter, the obligation of the Lenders to make or
maintain LIBO Rate Loans hereunder shall be suspended until the Agent revokes
such notice in writing. Upon receipt of such notice, the Borrower may revoke any
Advance Request then submitted by it. If the Borrower does not revoke such
notice, the Lenders shall make, convert or continue the Loans, as proposed by
the Borrower, in the amount specified in the applicable notice submitted by the
Borrower, but such Loans shall be made, converted or continued as Alternate Base
Rate Loans instead of LIBO Rate Loans.

SECTION 2.14. Survival. The agreements and obligations of the Borrower in
this Article II shall survive the payment of all other obligations.

ARTICLE III

RECEIPT, DISTRIBUTION AND APPLICATION OF INCOME
FROM THE TRUST ESTATE

SECTION 3.1. Rent Distribution. Except as otherwise provided in Section 3.3
and subject to Section 3.5, each payment of Rent as well as any payment of
interest on overdue installments of Rent under the Lease, and any other monies
paid over by the Lessee or the Borrower to the Agent for such purpose, shall be
distributed as promptly as possible (it being understood that any payments of
Rent received by or on behalf of the Agent under the Lease on a timely basis and
in accordance with the provisions of the Lease shall be distributed on the date
received in the funds so received) in the following order of priority:

first, an amount equal to the aggregate amount of the payment of
interest as well as any interest on (to the extent permitted by Applicable Laws)
overdue interest then due and payable on the Notes shall be distributed and paid
to the Lenders; and

second, an amount equal to the aggregate amount of the payment of
principal on the Notes then due and payable shall be distributed and paid to the
Lenders.

SECTION 3.2. Distribution of Mandatory Prepayments.

(a) Except as otherwise provided in Section 3.2(b) and Section 3.3, the
amount of any prepayment received pursuant to Section 2.4 (other than any
Premium paid pursuant to Section 2.4(d)) shall in each case be distributed and
paid in the following order of priority:

first, an amount equal to the aggregate amount of
accrued interest (as well as any interest on (to the extent
permitted by Applicable Loans) overdue interest) then due and
payable on the Notes shall be distributed and paid to the Lenders;
and

second, an amount equal to the aggregate amount of the
payment of principal on the Notes then due and payable shall be
distributed and paid to the Lenders.

(b) Any Casualty Recovery or Non-Casualty Recovery that is not required to
be paid to the Lessee pursuant to the Lease, solely because a Lease Default or
Lease Event of Default exists shall be held by the Trustee as security for the
obligations of the Lessee under the Lease and the other Operative Documents and
invested in Cash Equivalents and at such time as there shall not be continuing
any such Lease Default or Lease Event of Default, such portion shall be paid to
the Lessee, unless the Agent (as assignee of the Borrower) shall have
theretofore declared the Lease to be terminated pursuant to Section 5.2 thereof,
in which event such portion shall be distributed forthwith upon such declaration
in accordance with the provisions of Section 3.3 hereof.

SECTION 3.3. Distribution of Payments After Loan Event of Default.

(a) Except as otherwise provided in Section 3.4(b), all payments received
and amounts (other than Excluded Amounts) realized by the Agent after a Loan
Event of Default shall have occurred and be continuing, as well as all payments
or amounts then held or thereafter received by the Agent as part of the Trust
Estate while such Loan Event of Default shall be continuing, shall be
distributed forthwith by the Agent in the following order of priority:

first, so much of such payments or amounts as shall be
required to reimburse the Agent or Trustee for any tax, expense or
other loss incurred by the Agent or Trustee (to the extent not
previously reimbursed and to the extent incurred in connection with
its duties as the Agent or Trustee, respectively) and any unpaid
ongoing fees of the Agent or Trustee shall be distributed to the
Agent or Trustee as the case may be;

second, so much of such payments or amounts as shall
be required to reimburse the then existing or prior Lenders (so
long as the Loan Events of Default that have occurred and are
continuing arise solely from a Lease Event of Default) for payments
made by them to the Agent or Trustee pursuant to Section 7.7 (to
the extent not previously reimbursed), and to pay such then
existing or prior Lenders (so long as the Loan Events of Default
that have occurred and are continuing arise solely from a Lease
Event of Default) the amounts payable to them pursuant to any
expense reimbursement or indemnification provisions of the
Participation Agreement, the Lease or this Loan Agreement, shall be
distributed to each such Person, without priority of one over the
other, in accordance with the amount of such payment or payments
payable to each such Person;

third, so much of such amount as shall be required to
pay in full the aggregate unpaid principal amount of the Notes,
together with any Additional Costs and the accrued but unpaid
interest on the Notes to the date of distribution shall be
distributed to the Lenders holding Notes, and in the case the
amount so to be distributed shall be insufficient to pay in full as
aforesaid, then, pro rata among such Lenders, without priority of
one such Lender over the other, in the proportion that the unpaid
principal amount of the Notes held by each Lender bears to the
aggregate unpaid principal amount of the Notes;

fourth, the balance, if any, of such payments or
amounts remaining thereafter shall be promptly distributed to, or
as directed by, the Borrower.

(b) During the occurrence and continuance of any Loan Event of Default, all
amounts (other than Excluded Amounts) received or realized by the Agent and
otherwise distributable pursuant to Section 3.1 or 3.2 shall be distributed as
provided in Section 3.3(a).

SECTION 3.4. Other Payments.

(a) Any payments received by the Agent for which no provision as to the
application thereof is made in the Operative Documents or elsewhere in this
Article III shall be distributed forthwith by the Agent in the order of priority
set forth in Section 3.1.

(b) All payments received and amounts realized by the Agent under the Lease
or otherwise with respect to the Leased Property to the extent received or
realized at any time after payment in full of the principal of and interest on
all Loans, as well as any other amounts remaining as part of the Trust Estate
after payment in full of the principal of and interest on (and any Additional
Costs in respect of) all Loans issued hereunder, shall be distributed forthwith
by the Agent in the order of priority set forth in Section 3.3(a) omitting
clause "third" of such Section 3.3(a).

(c) Except after a Loan Event of Default has occurred and is continuing,
any payment received by the Agent for which provision as to the application
thereof is made in an Operative Document but not elsewhere in this Article III
shall be distributed forthwith by the Agent to the Person for the purpose for
which such payment was made in accordance with the terms of such Operative
Document.

SECTION 3.5. Distribution of Excluded Amounts and Additional Costs. All
amounts constituting Excluded Amounts and Additional Costs received by the Agent
shall be distributed to the Person or Persons entitled thereto.

SECTION 3.6. Guaranty Payments. Any payment received by the Agent from a
Guarantor pursuant to the Guaranty shall be distributed forthwith or retained by
the Trustee in the same manner and subject to the same conditions as provided in
this Article III with respect to payments received by the Trustee in respect of
the Borrower's obligation as to which such payment relates, all as if such
payment had been made by the Borrower out of Rent received under the Lease.

ARTICLE IV

CONDITIONS PRECEDENT

The agreement of each Lender to make the Loan requested to be made by it on
any Advance Date is subject to the satisfaction on the Advance Date of the
applicable conditions precedent set forth in Article III of the Participation
Agreement.

ARTICLE V

AFFIRMATIVE COVENANTS OF THE BORROWER

SECTION 5.1. Performance by the Borrower. Subject to Section 2.8, so long
as any Note remains outstanding and unpaid or any other amount is owing to any
Lender hereunder, the Borrower will promptly pay all amounts payable by it under
this Loan Agreement and the Notes in accordance with the terms hereof and
thereof and shall duly perform each of its obligations under this Loan Agreement
and the Notes.

SECTION 5.2. Waiver by the Borrower.

(a) To the extent permitted by Applicable Laws, the Borrower is hereby
deemed to have irrevocably waived:

(i) the protection of any stay (automatic or otherwise) arising out
of or in connection with any proceedings for the reorganization or liquidation
of the Borrower under the Bankruptcy Code or otherwise of the exercise by the
Lenders or the Agent of rights and remedies under the Operative Documents; and

(ii) any right that the Borrower might otherwise have to enjoin,
limit or restrict the good faith exercise of such rights and remedies.

(b) To the extent permitted by Applicable Laws, the Lenders and the Agent
are hereby expressly relieved from any obligation to comply with any such stay
which might otherwise affect their exercise at any time of such rights and
remedies.

ARTICLE VI

LOAN EVENTS OF DEFAULT; REMEDIES

SECTION 6.1. Loan Events of Default. Each of the following events shall
constitute a "Loan Event of Default" (whether any such event shall be voluntary
or involuntary or come about or be effected by operation of law or pursuant to
or in compliance with any judgment, decree or order of any court or any order,
rule or regulation of any governmental authority) and each such Loan Event of
Default shall continue so long as, but only as long as, it shall not have been
remedied:

(a) the Borrower shall fail to pay any principal of or interest on any Note
when due and such failure shall continue unremedied for a period of 3 Business
Days; or

(b) the failure by the Borrower in any material respect to timely perform
any other covenant or condition herein or in any other Operative Document to
which the Borrower is a party and such failure shall continue for a period of 30
days after written notice thereof to Borrower and the Lessee from the Agent; or

(c) any representation or warranty by the Borrower in any Operative
Document or in any certificate or document delivered thereunder shall have been
incorrect in a material respect when made and shall remain material when
discovered and if curable shall continue for a period of 30 days after written
notice thereof to the Borrower and the Lenders from the Agent; or

(d) the filing by the Borrower of any petition for dissolution or
liquidation of the Borrower; or the commencement by the Borrower of a voluntary
case under any applicable bankruptcy, insolvency or other similar law for the
relief of debtors, foreign or domestic, now or hereafter in effect; or the
Borrower shall have consented to the entry of an order for relief in an
involuntary case under any such law; or the failure of the Borrower generally to
pay, or the admission by the Borrower in writing that it is unable to pay, its
debts as such debts become due (within the meaning of the Bankruptcy Code); or
the failure by the Borrower promptly to satisfy or discharge any execution,
garnishment or attachment of such consequence as will impair its ability to
carry out its obligations under the Operative Documents; or the appointment of
or taking possession by a receiver, custodian or trustee (or other similar
official) for the Borrower or any substantial part of its property; or a general
assignment by the Borrower for the benefit of creditors; or the entry by the
Borrower into an agreement of composition with its creditors; or the Borrower
shall have taken any corporate action in furtherance of any of the foregoing; or
the filing against the Borrower of an involuntary petition in bankruptcy which
results in an order for relief being entered or, notwithstanding that an order
for relief has not been entered, the petition is not dismissed within 60 days of
the date of the filing of the petition; or the filing under any law relating to
bankruptcy, insolvency or relief of debtors of any petition against the Borrower
which either (i) results in a finding or adjudication of insolvency of the
Borrower or (ii) is not dismissed within 60 days of the date of the filing of
such petition; or

(e) a Lease Event of Default shall occur and be continuing.

SECTION 6.2. Remedies.

(a) Upon the occurrence of a Loan Event of Default hereunder, (i) if such
event is a Loan Event of Default specified in clause (d) of Section 6.1 or
clauses (f) or (g) of Section 10.1 of the Lease, the Commitment (if not
theretofore terminated) shall automatically terminate and the outstanding
principal amount of the Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Loan Agreement and the Notes shall automatically
be and become immediately due and payable, and (ii) if such event is any other
Loan Event of Default, upon the written instructions of the Required Lenders,
the Agent shall, by notice of default to the Borrower, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Loan Agreement and the Notes to be due and payable forthwith, whereupon the same
shall immediately become due and payable; provided that the sole remedies of the
Agent upon the occurrence of a Loan Event of Default specified in clause (b),
(c) (but only to the extent the representation was made in the Borrower's
individual capacity) or (d) of Section 6.1 that does not also constitute a Lease
Event of Default shall be to cause the Lenders to remove and replace the
Borrower as the Trustee and to bring suit against Borrower for damages. Except
as expressly provided above in this Article VI, presentment, demand, protest and
all other notices of any kind are hereby expressly waived.

(b) Upon the occurrence of any Loan Event of Default and at any time
thereafter so long as any Loan Event of Default shall be continuing, the Agent
may, and upon the written instructions of the Required Lenders shall, exercise
any or all of the rights and powers and pursue any and all of the remedies
available to it hereunder and (subject to the terms thereof) under the other
Operative Documents, the Lease, the Guaranty and the other Operative Documents
and shall have and may exercise any and all rights and remedies available under
the Uniform Commercial Code or any provision of law.

(c) Upon the occurrence of any Loan Event of Default and at any time
thereafter so long as any Loan Event of Default shall be continuing, the Agent
may proceed to protect and enforce this Loan Agreement, the Notes, the other
Operative Documents, the Lease and the Guaranty by suit or suits or proceedings
in equity, at law or in bankruptcy, and whether for the specific performance of
any covenant or agreement herein contained or in execution or aid of any power
herein granted, or for foreclosure hereunder, or for the appointment of a
receiver or receivers for the Leased Property or any other property subject to
the Deed of Trust, or for the recovery of judgment for the indebtedness secured
thereby or for the enforcement of any other proper, legal or equitable remedy
available under Applicable Laws.

(d) The Borrower shall be liable for any and all accrued and unpaid amounts
due hereunder before, after or during the exercise of any of the foregoing
remedies, including all reasonable legal fees and other reasonable costs and
expenses incurred by the Agent or any Lender by reason of the occurrence of any
Loan Event of Default or the exercise of remedies with respect thereto.

(e) Except as expressly provided above, no remedy under this Section 6.2 is
intended to be exclusive, but each shall be cumulative and in addition to any
other remedy provided under this Section 6.2 or under the other Operative
Documents or otherwise available at law or in equity. The exercise by Agent or
any Lender of any one or more of such remedies shall not preclude the
simultaneous or later exercise of any other remedy or remedies. No express or
implied waiver by the Agent or any Lender of any Loan Event of Default shall in
any way be, or be construed to be, a waiver of any future or subsequent Loan
Event of Default. The failure or delay of the Agent or any Lender in exercising
any rights granted it hereunder upon any occurrence of any of the contingencies
set forth herein shall not constitute a waiver of any such right upon the
continuation or recurrence of any such contingencies or similar contingencies
and any single or partial exercise of any particular right by the Agent or any
Lender shall not exhaust the same or constitute a waiver of any other right
provided herein.

(f) No failure to exercise and no delay in exercising, on the part of the
Agent or any Lender, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.

ARTICLE VII

AGENT

SECTION 7.1. Appointment and Authorization. Each Lender hereby irrevocably
(subject to Section 7.9) appoints, designates and authorizes the Agent to take
such action on its behalf under the provisions of this Loan Agreement and to
exercise such powers and perform such duties as are expressly delegated to the
Agent by the terms of this Loan Agreement and the other Operative Documents,
together with such powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary contained elsewhere in this Loan Agreement or in
any other Operative Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein or in any other
Operative Document, nor shall the Agent have or be deemed to have any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Loan Agreement or any other Operative Document or otherwise exist against the
Agent.

SECTION 7.2. Delegation of Duties. Agent may execute any of its duties
under this Loan Agreement or any other Operative Document by or through agents
(including the Bank), employees or attorneys-in-fact- and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. Agent shall
not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.

SECTION 7.3. Liability of Agent. None of the Agent-Related Persons shall
(i) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Loan Agreement or any other Operative Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct or as otherwise provided in the Security Agreement), or (ii) be
responsible in any manner to any of the Lenders for any recital, statement,
representation or warranty made by the Borrower or any Subsidiary or Affiliate
of the Borrower, or any officer thereof, contained in this Loan Agreement or in
any other Operative Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by Agent under or in
connection with, this Loan Agreement or any other Operative Document, or for the
value of or title to any Collateral, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Loan Agreement or any other
Operative Document, or for any failure of the Borrower or any other party to any
Operative Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Loan Agreement or any other Operative
Document, or to inspect the properties, books or records of the Borrower or any
of the Borrower's Subsidiaries or Affiliates.

SECTION 7.4. Reliance by Agent.

(a) Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to the Borrower), independent
accountants and other experts selected by the Agent. Agent shall be fully
justified in failing or refusing to take any action under this Loan Agreement or
any other Operative Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Loan
Agreement or any other Operative Document in accordance with a request and any
action taken or consent of the Required Lenders and such request and any action
taken upon failure to act pursuant thereto shall be binding upon all of the
Lenders.

(b) Each Lender that has executed this Loan Agreement shall be deemed to
have consented to, approved or accepted or to be satisfied with, each document
or other matter either sent by Agent to such Lender for consent, approval,
acceptance or satisfaction, or required thereunder to be consented to or
approved by or acceptable or satisfactory to the Lender.

SECTION 7.5. Notice of Default. Agent shall not be deemed to have knowledge
or notice of the occurrence of any Loan Default or Loan Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent directly for the account of the Lenders, unless the
Agent shall have received written notice from a Lender or the Lessee referring
to this Loan Agreement, describing such Loan Default or Loan Event of Default
and stating that such notice is a "notice of default". Agent will notify the
Lenders of its receipt of any such notice. Agent shall take such action with
respect to such Loan Default or Loan Event of Default as may be requested by the
Required Lenders; provided, however, that unless and until the Agent has
received any such request, the Agent may (but shall not be obligated to) take
such action regarding such Loan Default or Loan Event of Default as it shall
deem advisable or in the best interest of the Lenders.

SECTION 7.6. Credit Decision. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Parent, Lessee and its Subsidiaries, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it
has deemed appropriate, made its own appraisal of any investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Parent, Lessee and its Subsidiaries, the value of and
title to any Collateral, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Loan Agreement and to extend credit to the Borrower and the Lessee hereunder.
Each Lender also represents that it will independently and without reliance upon
any Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Loan
Agreement and the other Operative Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Lessee and
Parent. Except for notices, reports and other documents expressly herein
required to be furnished to the Lenders by the Agent, the Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of the Lessee and Parent which may come
into the possession of any of the Agent-Related Persons.

SECTION 7.7. Indemnification of Agent. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand any
Agent-Related Person (to the extent not reimbursed by or on behalf of the Lessee
and without limiting the obligation of the Lessee to do so), pro rata, from and
against any and all Indemnified Liabilities; provided, however, that no Lender
shall be liable for the payment to any Agent-Related Person of any portion of
such Indemnified Liabilities resulting solely from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender shall reimburse the Agent upon demand for its ratable share of any costs
or out-of-pocket expenses (including attorney costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Loan Agreement, any other Operative Document, or
any document contemplated by or referred to herein, to the extent that the Agent
is not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive the payment of all obligations
hereunder and the resignation or replacement of the Agent.

SECTION 7.8. Agent in Individual Capacity. BA Leasing & Capital Corporation
and its Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, acquire equity interests in and generally engage in
any kind of banking, trust, financial advisory, underwriting or other business
with the Parent and its Subsidiaries and Affiliates as though BA Leasing &
Capital Corporation were not the Agent hereunder and without notice to or
consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, BA Leasing & Capital Corporation or its Affiliates may receive
information regarding the Parent or its Affiliates (including information that
may be subject to confidentiality obligations in favor of the Parent or such
Affiliate) and acknowledge that the Agent shall be under no obligation to
provide such information to them. With respect to its Loans, BA Leasing &
Capital Corporation shall have the same rights and powers under this Loan
Agreement as any other Lender and may exercise the same as though it were not
the Agent, and the terms "Lender" and "Lenders" include BA Leasing & Capital
Corporation in its individual capacity.

SECTION 7.9. Successor Agent. Agent may, and at the request of the Required
Lenders shall, resign as Agent upon 30 days' notice to the Lenders. If the Agent
resigns under this Agreement, the Required Lenders shall appoint from among the
Lenders a successor agent for the Lenders. If no successor agent is appointed
prior to the effective date of the resignation of the Agent, the Agent may
appoint, after consulting with the Lenders and the Borrower, a successor agent
from among the Lenders. Upon the acceptance of its appointment as successor
agent hereunder, such successor agent shall succeed to all the rights, powers
and duties of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement. If
no successor agent has accepted appointment as Agent by the date which is 30
days following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Lenders shall
perform all of the duties of the Agent hereunder until such time, if any, as the
Required Lenders appoint an successor agent as provided for above. If required
by Applicable Law, the Mississippi Gaming Commission shall have made a
determination of suitability with respect to a successor agent.

SECTION 7.10. Withholding Tax.

(a) If any Lender is a "foreign" "corporation" or "partnership" or "foreign
trust" within the meaning of the Code and such Lender claims exemption from, or
a reduction of U.S. withholding tax under Sections 1441 or 1442 of the Code,
such Lender agrees with and in favor of the Agent, to deliver to the Agent:

(i) if such Lender claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, properly completed IRS Forms
1001 and W-8 before the payment of any interest in the first calendar year and
before the payment of any interest in each third succeeding calendar year during
which interest may be paid under this Loan Agreement;

(ii) if such Lender claims that interest paid under this Loan
Agreement is exempt from United States withholding tax because it is effectively
connected with a United States trade or business of such Lender, two properly
completed and executed copies of IRS Form 4224 before the payment of any
interest is due in the first taxable year of such Lender and in each succeeding
taxable year of such Lender during which interest may be paid under this Loan
Agreement; and

(iii) such other form or forms as may be required under the Code or
other laws of the United States as a condition to exemption from, or reduction
of, United States withholding tax.

Such Lender agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.

(b) If any Lender claims exemption from, or reduction of, withholding tax
under a United States tax treaty by providing IRS Form 1001 and such Lender
sells, assigns, grants a participation in, or otherwise transfers all or part of
the obligations of the Borrower to such Lender, such Lender agrees to notify the
Agent of the percentage amount in which it is no longer the beneficial owner of
obligations of the Borrower to such Lender. To the extent of such percentage
amount, the Agent will treat such Lender's IRS Form 1001 as no longer valid.

(c) If any Lender claiming exemption from United States withholding tax by
filing IRS Form 4224 with the Agent sells, assigns, grants a participation in,
or otherwise transfers all or part of the obligations of the Borrower to such
Lender, such Lender agrees to undertake sole responsibility for complying with
the withholding tax requirements imposed by Sections 1441 and 1442 of the Code.

(d) If any Lender is entitled to a reduction in the applicable withholding
tax, the Agent may withhold from any interest payment to such Lender an amount
equivalent to the applicable withholding tax after taking into account such
reduction. If the forms or other documentation required by subsection (a) of
this Section are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.

(e) If the Internal Revenue Service or any other Governmental Authority of
the United States or other jurisdiction asserts a claim that the Agent (or its
designee or agent) did not properly withhold tax from amounts paid to or for the
account of any Lender (because the appropriate form was not delivered, was not
properly executed, or because such Lender failed to notify the Agent of a change
in circumstances which rendered the exemption from, or deduction of, withholding
tax ineffective, or for any other reason) such Lender shall indemnify the Agent
(or its designee or agent, as the case may be) fully for all amounts paid,
directly or indirectly, by the Agent (or its designee or agent) and including
any taxes imposed by any jurisdiction on the amounts payable to the Agent (or
its designee or agent) under this Section, together with all costs and expenses
(including attorney costs and the allocated cost of internal counsel services
and all disbursements of internal counsel). The obligation of the Lenders under
this subsection shall survive the payment of all obligations and the resignation
or replacement of the Agent.

SECTION 7.11. Acceptance of Agency.

(a) Agent accepts the agency hereby created applicable to it and agrees to
cause the Bank (or its successor) to receive all payments and proceeds pursuant
to the Operative Documents and disburse such payments or proceeds in accordance
with the Operative Documents.

(b) Upon discharge of the indebtedness secured by the Security Documents or
security interest or Lien provided therein, Agent shall execute and deliver, at
the Lessee's cost and expense, such satisfactions and terminations of said Liens
as may be required. Upon satisfaction of the Lien or security interest provided
for in any such instrument, such instrument shall be deemed withdrawn from the
Collateral.

(c) In the event that the Required Lenders shall notify Agent that an event
of default under a security instrument has occurred, Agent shall take such
action with respect thereto as the Required Lenders may require by written
instructions, but Agent shall not be required to take any action not expressly
set forth in such written instructions.

(d) Agent shall not have any duty or obligation to manage, operate,
control, use, sell, dispose of or otherwise deal with the Leased Property or any
other part of the Collateral or to otherwise take or refrain from taking any
action under, or in connection with, the security instruments, except as
expressly provided by the terms of this Loan Agreement or as expressly provided
in written instructions from the Required Lenders received pursuant to the terms
of Section 7.11(c) hereof.

(e) Except in accordance with written instruction furnished pursuant to
Section 7.11(c) hereof, and without limiting the generality of Section 7.11(d)
hereof, the Agent shall have no duty (i) to see to any recording, filing or
depositing of any security instrument or amendment thereof, (ii) to see to any
insurance on the Leased Property or to effect or maintain any such insurance,
(iii) to see to the payment or discharge of any tax, assessment, or other
governmental charge or any Lien or encumbrance of any kind owing with respect
to, assessed or levied against, any part of the Collateral, (iv) to confirm or
verify any notices or reports of the Lessee other than to furnish (to the extent
not otherwise furnished) the Lenders with a copy of each notice or report
furnished to the Agent by the Lessee pursuant to a security instrument or (v) to
inspect the Leased Property at any time or ascertain or inquire as to the
performance or observance of the Lessee's covenants under any security
instrument.

(f) In accepting the agency hereby created, the Agent acts solely as agent
hereunder and not in its individual capacity, and all persons, other than the
Lenders, having any claim against the Agent by reason of the transactions
contemplated hereby shall look only to the Collateral for payment or
satisfaction thereof.

(g) The agency created hereby shall be terminated by notice given by the
Agent to the Lenders at any time upon the final disposition of all Collateral
and the final distribution by Agent of all monies or other property or proceeds
received pursuant to the Operative Documents in accordance with their terms.

SECTION 7.12. Distribution and Receipt of Payments by Bank. Agent, for the
benefit of the Lenders, hereby appoints the Bank as the agent of the Lenders for
purposes of receiving proceeds of Advances, payments under the Lease and making
distributions to the Lenders, Lessee and other Persons under this Loan
Agreement. Agent may at any time by notice in writing terminate the Bank's
appointment hereby as agent of collection and payment of the payments under the
Lease, in which event Lessee, upon receipt of copy of such notice, shall pay any
and all payments payable to Agent hereunder and under the other Operative
Documents directly to Agent at the account set forth in Schedule III of the
Participation Agreement

SECTION 7.13. Lead Manager. The "lead manager" shall not have any right,
power, obligation, liability, responsibility or duty under this Loan Agreement
other than those applicable to all Lenders as such. Without limiting the
foregoing, none of the Lenders so identified as "co-agent" or "lead manager"
shall have or be deemed to have any fiduciary relationship with any Lender. Each
Lender acknowledges that it has not relied, and will not rely, on any of the
Lenders so identified in deciding to enter into this Agreement or in taking or
not taking action hereunder. Without limiting the foregoing, to the extent the
Co-Agents make determinations pursuant to the terms of any Operative Document,
the Co-Agents shall have the same rights afforded to the Agent under this
Article VII.

ARTICLE VIII

MISCELLANEOUS

SECTION 8.1. Amendments and Waivers. Neither this Loan Agreement, any Note
nor any terms hereof or thereof may be amended, supplemented or modified except
in accordance with the provisions of the Participation Agreement.

SECTION 8.2. Notices. Unless otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be delivered in accordance with, and shall be deemed to have been
given as provided in, Section 9.3 of the Participation Agreement; provided, that
any notice, request, demand or other communication to or upon Agent or the
Lenders pursuant to Section 2.3 shall not be effective until received.

SECTION 8.3. Successors and Assigns; Transfers and Participations.

(a) This Loan Agreement shall be binding upon and inure to the benefit of
the Borrower, the Lenders, the Agent, all future holders of the Notes and their
respective successors and assigns.

(b) Any transfer by a Lender of its Note or any sale by a Lender of any
participating interest in the Loans evidenced by its Note shall comply with
Sections 6.2, 6.3 and 6.4 of the Participation Agreement. Any Lender
transferring its Note shall pay, or cause the transferee to pay, the costs and
expenses (including reasonable counsel fees) incurred by the Agent in connection
with such transfer.

SECTION 8.4. Counterparts. This Loan Agreement may be executed by one or
more of the parties to this Loan Agreement on any number of separate
counterparts and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Loan
Agreement signed by all the parties hereto shall be lodged with the Borrower and
the Agent.

SECTION 8.5. GOVERNING LAW. THIS LOAN AGREEMENT AND THE NOTES HAVE BEEN
DELIVERED IN, AND THIS LOAN AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS LOAN AGREEMENT AND THE NOTES SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK, INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW
BUT EXCLUDING ALL OTHER CHOICE OF LAWS AND CONFLICTS OF LAWS RULES OF SUCH
STATE, EXCEPT AS TO MATTERS RELATING TO PERFECTION AND THE EFFECT OF PERFECTION
OR NON-PERFECTION OF THE SECURITY INTEREST CREATED HEREUNDER, WHICH SHALL BE
GOVERNED BY THE LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED, AND TO THE
EXTENT THAT THE EXERCISE OF CERTAIN RIGHTS OR REMEDIES HEREUNDER OR UNDER THE
OTHER OPERATIVE DOCUMENTS MAY REQUIRE COMPLIANCE WITH GAMING LAWS.

SECTION 8.6. Survival and Termination of Agreement. All covenants,
agreements, representations and warranties made herein and in any certificate,
document or statement delivered pursuant hereto or in connection herewith shall
survive the execution and delivery of this Loan Agreement and the Notes and
shall continue in full force and effect so long as any Note or any amount
payable to any Lender under or in connection with this Loan Agreement or the
Notes is unpaid, at which time this Loan Agreement shall terminate, it being
expressly understood that the obligations of the Borrower, as the case may be,
to the Agent and each Lender under Article II and the obligations of the Lenders
to the Agent under Section 7.7 shall survive the payment in full of the Notes.

SECTION 8.7. Entire Agreement. This Loan Agreement sets forth the entire
agreement of the parties hereto with respect to its subject matter, and
supersedes all previous understandings, written or oral, with respect thereto.

SECTION 8.8. Severability. Any provision of this Loan Agreement or of the
Notes which is prohibited, unenforceable or not authorized in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition, unenforceability or non-authorization without invalidating the
remaining provisions hereof or thereof or affecting the validity, enforceability
or legality of any such provision in any other jurisdiction.

[Signature pages follow]

IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.

HANCOCK BANK, not in its individual capacity,
except as specifically provided herein, but solely
as Trustee and as Borrower

By: /s/ C.H.Gibbons
Name: C.H. Gibbons
Title: Vice President & Trust Officer

BA LEASING & CAPITAL CORPORATION, as Agent and as
Lender

By: /s/ David F. Scully
Name: David F. Scully
Title: Vice President

BANK OF SCOTLAND, as Co-Agent and as Lender

By: /s/ Catherine M. (Illegible)
Name: Catherine M. (Illegible)
Title: Vice President

FIRST INTERSTATE BANK OF NEVADA, as Co-Agent and as
Lender

By: /s/ Steve Byrne
Name: Steve Byrne
Title: Vice President

SOCIETE GENERALE, as Co-Agent and as Lender

By: /s/ Donald L. Schubert
Name: Donald L. Schubert
Title: Vice President

CREDIT LYONNAIS, LOS ANGELES BRANCH, as Lead
Manager and as Lender

By: /s/ Thierry Vincent
Name: Thierry Vincent
Title: Vice President

BA LEASING & CAPITAL CORPORATION, as Lender

By: /s/ David F. Scully
Name: David F. Scully
Title: Vice President

THE CIT GROUP/EQUIPMENT FINANCING INC., as Lender

By: /s/ John H. Beville
Name: John H. Beville
Title: Senior Vice President

UNITED STATES NATIONAL BANK OF OREGON, as Lender

By: /s/ Dale Parshall
Name: Dale Parshall
Title: Assistant Vice President

BANK OF BOSTON, as Lender

By: /s/ Reginald T. Dawson
Name: Reginald T. Dawson
Title: Director

IMPERIAL BANK, as Lender

By: /s/ Steven K. Johnson
Name: Steven K. Johnson
Title: Senior Vice President

TRUSTMARK NATIONAL BANK, as Lender

By: /s/ John W. Ray, Jr.
Name: John W. Ray, Jr.
Title: Vice President

FIRST SECURITY BANK OF UTAH, N.A., as Lender

By: /s/ David P. Williams
Name: David P. Williams
Title: Vice President

FIRST NATIONAL BANK OF COMMERCE, as Lender

By: /s/ Stephen M. (Illegible)
Name: Stephen M. (Illegible)
Title: Vice President

HANCOCK BANK, as Lender

By: /s/ Watson Butts
Name: Watson Butts
Title: Vice President

DEPOSIT GUARANTY NATIONAL BANK, as Lender

By: /s/ Larry C. Ratzlaff
Name: Larry C. Ratzlaff
Title: Senior Vice President

SCHEDULE I
TO
LOAN AGREEMENT

LENDERS
Commitment
Lender Commitment Percentage
- ------ ---------- ----------
BA Leasing & Capital Corporation $ 16,258,000 13.54822043
Bank of Scotland 16,258,000 13.54822043
Societe Generale 13,006,000 10.83824301
First Interstate Bank of Nevada 13,006,000 10.83824301
The CIT Group/Equipment Financing, Inc. 9,755,000 8.12909892
Credit Lyonnais, Los Angeles Branch 9,755,000 8.12909892
United States National Bank of Oregon 6,503,000 5.41912151
Bank of Boston 6,503,000 5.41912151
Imperial Bank 6,503,000 5.41912151
Trustmark National Bank 6,401,000 5.33412222
First Security Bank of Utah, N.A 3,252,000 2.70997742
First National Bank of Commerce 8,534,000 7.11160740
Hancock Bank 2,560,000 2.13331556
Deposit Guaranty National Bank 1,707,000 1.42248815
--------- ----------
TOTAL (Lenders) $120,001,000 100.00%

EXHIBIT A
TO LOAN AGREEMENT

FORM OF NOTE

NOTE NO. __

U.S. $________________ ________________, 1996

FOR VALUE RECEIVED, the undersigned, HANCOCK BANK, not in its individual
capacity but solely as Trustee under the Trust Agreement for the Lenders named
therein (the "Borrower"), promises to pay to the order of [NAME OF LENDER], (the
"Lender"), the principal sum of $_________ United States Dollars or, if less,
the aggregate unpaid principal amount of all Loans made by the Lender to, or for
the benefit of, the Borrower, or purchased by the Lender, as recorded either on
the grid attached to this Note or in the records of the Lender; provided,
however, that the failure to make any such recordation or any error in such
recordation shall not in any way affect the Borrower's obligation to repay this
Note. The principal amount of each Loan evidenced hereby shall be payable on or
prior to the Final Maturity Date as provided in that certain Loan Agreement,
dated as of May 10, 1996, among the Borrower, BA Leasing & Capital Corporation,
a California corporation, as agent (the "Agent"), and the various lenders named
therein (the "Loan Agreement").

The Borrower also promises to pay interest on the unpaid principal amount
hereof from time to time outstanding at the rates per annum, on the dates
specified in, and in accordance with the terms of the Loan Agreement.

Payments of both principal and interest are to be made in lawful money of
the United States of America in same day or immediately available funds to the
account designated by the Lender pursuant to the Loan Agreement.

This Note is one of the Notes referred to in, and evidences indebtedness
incurred under, the Loan Agreement, to which reference is made for a statement
of the terms and conditions on which the Borrower is required to make
prepayments and repayments of principal of the indebtedness evidenced by this
Note and on which such indebtedness may be declared to be immediately due and
payable. Capitalized terms used herein without definition shall have the
meanings provided in the Loan Agreement. This Note is secured pursuant to the
Security Documents made by the Borrower in favor of the Agent referred to in the
Loan Agreement and reference is hereby made to the Loan Agreement and such
Security Documents for a statement of the terms and provisions of such security.

Anything to the contrary herein notwithstanding, the Borrower's liability
for any sums due hereunder shall be limited in accordance with Section 2.8 of
the Loan Agreement.

All parties hereto, whether as makers, endorsers, or otherwise, severally
waive presentment for payment, demand, protest, and notice of dishonor, notice
of the existence, creation or nonpayment of all or any of the Loans and all
other notices whatsoever.

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE OF LAWS AND CONFLICTS OF LAWS
RULES OF SUCH STATE.

[signature page follows]

IN WITNESS WHEREOF, the Trustee has caused this Note to be executed in its
corporate name by its duly authorized officer as of the date hereof.

HANCOCK BANK, not in its individual capacity but
solely as Trustee, as Borrower

By: _______________________________
Name:
Title:

GRID ATTACHED TO NOTE
DATED AS OF ____________, 1996 OF
[ ]
AS TRUSTEE
PAYABLE TO THE ORDER OF [INSERT LENDER'S NAME]

Loans made by the Lender to the Trustee, as Borrower, and payments of principal
of such Loans.

<TABLE>
<CAPTION>
Principal Amount Interest
Principal Bearing Paid
Amount Interest
Period Base LIBO Principal Notation
Date Advances (If Applicable) Base Rate LIBO Rate Rate Rate Amount Total Made By
<S> <C>

</TABLE>

AMORTIZATION SCHEDULE ATTACHED TO NOTE
DATED _____________, 1996 OF
[ ]
AS TRUSTEE
PAYABLE TO THE ORDER OF [INSERT LENDER'S NAME]

Principal
Date Repayment Amount

[SCHEUDLE I TO LOAN AGREEMENT MISSING]

[EXECUTION COPY]

TRUST AGREEMENT

dated as of May 10, 1996

between

BL DEVELOPMENT CORP.,
as Grantor,

and

HANCOCK BANK
as Trustee

INDEXING INSTRUCTIONS:

Part of the Northwest 1/4 and Soutwest 1/4 of Section 5, Township 3 South, Range
10 West of Tunica County, Mississippi.

TABLE OF CONTENTS

Section Page

ARTICLE I

THE TRUST ESTATE

1.1. Appointment, Authorization and Direction
to Trustee. . . . . . . . . . . . . . . . . . . 1
1.2. Declaration and Purpose. . . . . . . . . . . . . . . . . 2

ARTICLE II

COLLECTIONS AND DISTRIBUTIONS

2.1. Collections and Remittances by the
Trustee . . . . . . . . . . . . . . . . . . . . 2
2.2. Distribution of Payments . . . . . . . . . . . . . . . . 3
2.3. Effect of Sales by the Trustee . . . . . . . . . . . . . 3

ARTICLE III

CERTAIN PROVISIONS RESPECTING TRUSTEE

3.1. Acceptance of Trusts and Duties. . . . . . . . . . . . . 4
3.2. Limitation of Power. . . . . . . . . . . . . . . . . . . 4
3.3. Notice of Event of Default . . . . . . . . . . . . . . . 4
3.4. Action Upon Instructions . . . . . . . . . . . . . . . . 5
3.5. Certain Duties and Responsibilities of
the Trustee . . . . . . . . . . . . . . . . . . 5
3.6. Certain Rights of Trustee. . . . . . . . . . . . . . . . 7
3.7. NO REPRESENTATIONS OR WARRANTIES AS TO
THE LEASED PROPERTY OR DOCUMENTS. . . . . . . . 9
3.8. Status of Moneys Received. . . . . . . . . . . . . . . . 9
3.9. Permitted Activities . . . . . . . . . . . . . . . . . . 9
3.10. Resignation or Removal of Trustee. . . . . . . . . . . . 9
3.11. Estate and Rights of Successor Trustee . . . . . . . . . 10
3.12. Merger or Consolidation of Trustee . . . . . . . . . . . 10
3.13. Co-Trustees. . . . . . . . . . . . . . . . . . . . . . . 11
3.14. Books and Records. . . . . . . . . . . . . . . . . . . . 11

ARTICLE IV

TERMINATION OF AND AMENDMENTS TO TRUST

4.1. Termination. . . . . . . . . . . . . . . . . . . . . . . 11
4.2. Distribution of Trust Estate Upon
Termination . . . . . . . . . . . . . . . . . . 12
4.3. Amendments . . . . . . . . . . . . . . . . . . . . . . . 12

ARTICLE V

MISCELLANEOUS

5.1. Compensation and Indemnification . . . . . . . . . . . . 13
5.2. Notices. . . . . . . . . . . . . . . . . . . . . . . . . 14
5.3. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . 14
5.4. Tax Reports; Information Reporting;
Withholding Taxes . . . . . . . . . . . . . . . 14
5.5. Headings . . . . . . . . . . . . . . . . . . . . . . . . 15
5.6. Successors and Assigns . . . . . . . . . . . . . . . . . 15
5.7. Severability . . . . . . . . . . . . . . . . . . . . . . 15
5.8. Only Written Waivers . . . . . . . . . . . . . . . . . . 15
5.9. Counterparts . . . . . . . . . . . . . . . . . . . . . . 15
5.10. Rights in Trust Agreement. . . . . . . . . . . . . . . . 15
5.11. Payment of Trustee Fees, Costs and Expenses. . . . . . . 15
5.12. Identification of Trust. . . . . . . . . . . . . . . . . 16

TRUST AGREEMENT

THIS TRUST AGREEMENT (as amended and supplemented from time to time, this
"Trust Agreement") dated as of May 10, 1996, is entered into by and between
HANCOCK BANK, a Mississippi banking corporation (in its individual capacity, the
"Bank"; the Bank, not in its individual capacity but solely as trustee, and any
institution that shall act as a successor trustee in accordance with the terms
of Section 3.10, the "Trustee"); and BL Development Corp., as grantor (the
"Grantor"). For purposes hereof, capitalized terms used in this Trust Agreement
without specific definition herein shall have the meanings assigned thereto in
Appendix 1 to the Participation Agreement, dated as of May 10, 1996, among the
Trustee; the Lenders; the Co-Agents; the Lead Manager; the Grantor; Grand
Casinos, Inc. and certain of its Subsidiaries, as Guarantors; and BA Leasing &
Capital Corporation, as Arranger and Agent.

ARTICLE I

THE TRUST ESTATE

SECTION 1.1 Appointment, Authorization and Direction to Trustee. Grantor
hereby requests that the Bank act as Trustee of the trust created hereunder (the
"Trust") and Bank hereby accepts its appointment as trustee of the Trust,
effective as of the date hereof. The Lenders and the Grantor authorize and
direct the Trustee, subject to the Lenders' satisfaction or waiver of all
appropriate conditions set forth in the Participation Agreement, to enter into,
execute and deliver:

(a) on the Closing Date and from time to time thereafter (including on
each Advance Date), the Operative Documents to which the Trust or the
Trustee is to become a party on each such date;

(b) from time to time, the Notes in the manner and subject to the
terms and conditions provided in the Participation Agreement and the Loan
Agreement; and

(c) all other documents, and to do all such things and take all such
actions, as may be necessary or convenient to consummate the transactions
contemplated by the Operative Documents and to perform the terms and
conditions of this Trust Agreement, all as contemplated herein or in the
Operative Documents.

SECTION 1.2 Declaration and Purpose.

(a) Trustee hereby declares, undertakes and agrees that it will and
does receive, take and hold all estate, right, title and interest of the
Trustee in and to the Trust Estate in trust for the use and benefit of the
Grantor subject to the terms of the Operative Documents.

(b) The purpose of the Trust is to acquire and hold title to the
Leased Property and the remainder of the Trust Estate, including leasehold
interests in the Hotel Site described in Exhibit A attached hereto and made
a part hereof, as collateral security for the obligations of the Trustee
under the Loan Agreement, to discharge such obligations in accordance with
the provisions of the Loan Agreement and the other Operative Documents and
to engage in activities ancillary and incidental thereto as set forth in
the Operative Documents. Except in connection with the foregoing, the
Trustee in its capacity as Trustee shall not (i) engage in any business or
activity, (ii) have any property, rights or interest, whether real or
personal, tangible or intangible, (iii) incur any legal liability or
obligation, whether fixed or contingent, matured or unmatured, other than
in the normal course of the administration of the Trust or (iv) subject any
of the Trust Estate to any mortgage, lien, security interest or other claim
or encumbrance, other than in favor of the Agent and the Lenders pursuant
to the provisions of the Operative Documents. THE TRUST IS NOT A BUSINESS
TRUST. THE SOLE PURPOSE OF THE TRUST IS TO ACQUIRE AND HOLD TITLE TO THE
LEASED PROPERTY AND TO COLLECT AND CONSERVE THE VALUE THEREOF AND OF THE
TRUST ESTATE, SUBJECT TO THE RIGHTS OF THE AGENT AND THE GRANTOR, FOR THE
BENEFIT OF THE LENDERS. THE TRUSTEE MAY NOT TRANSACT BUSINESS OF ANY KIND
WITH RESPECT TO THE TRUST ESTATE NOR SHALL THIS TRUST AGREEMENT BE DEEMED
TO BE, OR CREATE OR EVIDENCE THE EXISTENCE OF A CORPORATION DE FACTO OR DE
JURE, OR A MASSACHUSETTS TRUST, OR ANY OTHER TYPE OF BUSINESS TRUST,
ASSOCIATION OR JOINT VENTURE BETWEEN THE TRUSTEE, THE AGENT AND THE
LENDERS.

ARTICLE II

COLLECTIONS AND DISTRIBUTIONS

SECTION 2.1 Collections and Remittances by the Trustee. Trustee agrees
that, subject to the provisions of this Trust Agreement, it will, during the
term of this Trust, administer the Trust Estate and, at the direction of the
Grantor, or if the Loan Agreement has not been fully discharged, the Agents (the
appropriate Person permitted to give instructions being hereafter called the
"Instructing Party") take steps to collect all sums payable to the Trustee by
the Grantor or any other Person under the Lease and the other Operative
Documents. The Trustee agrees to distribute all proceeds received from the Trust
Estate in accordance with the Loan Agreement and Sections 2.2 and 2.3. The
Trustee shall make such distribution promptly upon receipt of such proceeds (if
such proceeds are available for distribution) by the Trustee, it being
understood and agreed that the Trustee shall not be obligated to make such
distribution until the funds for such distribution have been received by the
Trustee in cash or its equivalent reasonably acceptable to the Trustee. All
distributions to a Lender shall be made by the Trustee to the order of such
Lender at its address referred to in Section 9.3 of the Participation Agreement.

SECTION 2.2 Distribution of Payments.

(a) Payments to the Trustee for the benefit of the Lenders and Agent.
Until the Loan Agreement shall have been fully discharged pursuant to its
terms, all Rent, insurance proceeds and requisition or other payments of
any kind included in the Trust Estate (other than Excluded Amounts) payable
to and received by the Trustee shall be held by Trustee for the benefit of
the Lenders and the Agent for distribution in accordance with the
provisions of Article III of the Loan Agreement; provided, however, that
any payments received by the Trustee from the Grantor with respect to the
Trustee's fees and disbursements, or pursuant to Section 5.1, shall be
retained by the Trustee and applied toward the purpose for which such
payments were made.

(b) Excluded Amounts. Any Excluded Amounts received by the Trustee at
any time shall be promptly paid by the Trustee to the Person to whom such
Excluded Amounts are payable under the provisions of the Participation
Agreement or any other Operative Document.

SECTION 2.3 Effect of Sales by the Trustee. Any sale of all or any part of
the Trust Estate by the Trustee permitted hereunder shall bind the Lenders and
shall be effective for the benefit of the purchasers thereof and their
respective successors and assigns to divest and transfer all right, title and
interest vested in the Trustee or the Lenders hereunder in the property so sold,
and no purchaser shall be required to inquire as to compliance by the Trustee
with any of the terms hereof or to see to the application of any consideration
paid for such property.

ARTICLE III

CERTAIN PROVISIONS RESPECTING TRUSTEE

SECTION 3.1 Acceptance of Trusts and Duties. Bank accepts the trusts hereby
created and agrees to perform the same as herein expressed and agrees to receive
and disburse all moneys constituting part of the Trust Estate in accordance with
the terms hereof.

SECTION 3.2 Limitation of Power. Trustee shall have no power, right, duty
or authority to manage, control, possess, use, sell, lease, dispose of or
otherwise deal with the Leased Property or any other property at any time
constituting a part of the Trust Estate, or otherwise to take or refrain from
taking any action under or in connection with the Operative Documents, except
(a) to execute and deliver the Operative Documents to which the Trustee is to be
a party, (b) to exercise and carry out or cause to be exercised and carried out
the rights, duties and obligations of the Trustee hereunder, (c) to exercise and
carry out or cause to be exercised and carried out the rights, duties and
obligations of the Trustee under the Operative Documents, (d) to receive,
collect and distribute and deal with the sums due under the Lease and with the
Leased Property and the proceeds thereof as provided in the Lease, the Loan
Agreement and in this Trust Agreement, and (e) as expressly provided in written
instructions from the Instructing Party given pursuant to Section 3.3 or 3.4.
Other than as expressly provided in this Trust Agreement, the Trustee shall not
have the authority to make management decisions relating to the Trust Estate and
may take only ministerial actions without consent of the Agents. For purposes of
this Trust Agreement neither the Grantor nor, if applicable, the Parent, shall
have the right to direct the Trustee to exercise and carry out or cause to be
exercised and carried out the rights, duties and obligations of the Trustee
hereunder and under the Operative Documents until the Loan Agreement and Notes
have been paid and discharged in full.

SECTION 3.3 Notice of Event of Default. If a Responsible Officer of the
Trustee has actual knowledge of a Lease Event of Default or Loan Event of
Default, the Trustee shall give prompt written notice of such event to the
Lenders, the Grantor and the Agent in the manner specified in Section 5.2.
Subject to Section 3.4, the Trustee shall take such action, and only such
action, with respect to any such event as shall be specified in written
instructions from the Instructing Party. For all purposes of the Operative
Documents, in the absence of such actual knowledge, the Trustee shall not be
deemed to have knowledge of a Lease Event of Default or a Loan Event of Default
unless any of its Responsible Officers is notified in writing by a Lender or the
Agent. Trustee shall have no obligation and shall not take any action in the
event it receives no direction from the applicable Instructing Party.

SECTION 3.4 Action Upon Instructions. Subject to Sections 3.5, 3.6 and 5.1
and the Loan Agreement, upon the written instructions at any time and from time
to time of the Instructing Party, the Trustee shall take such of the following
actions, and only such actions, as may be specified in such instructions:

(a) give such notice or direction or exercise such right or power
under the Lease or any other Operative Document as shall be specified in
such instructions;

(b) approve as satisfactory to it all matters required by the terms of
any Operative Document to be satisfactory to the Trustee;

(c) upon expiration of the Lease Term and discharge in full of the
Loan Agreement and the Notes pursuant to its terms, convey all of Trustee's
right, title and interest in and to the Trust Estate (including the Leased
Property) to the Grantor; and

(d) any other action as specified by the Instructing Party.

SECTION 3.5 Certain Duties and Responsibilities of the Trustee.

(a) (i) The Trustee undertakes to perform such duties and only such
duties as are specifically set forth herein and in the other Operative
Documents, and no implied covenants or obligations shall be read into this
Trust Agreement against the Trustee, and the Trustee agrees that it shall
not, nor shall it have a duty to, manage, control, use, sell, maintain,
insure, register, lease, operate, modify, dispose of or otherwise deal with
the Leased Property or any other part of the Trust Estate in any manner
whatsoever, except as required by the Operative Documents and as otherwise
provided herein.

(ii) In the absence of bad faith or gross negligence on its part,
the Trustee 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 Trustee and conforming to
the requirements of this Trust Agreement.

(b) No provision of this Agreement or any other Operative Document,
including, without limitation, Articles VII and VIII of the Participation
Agreement, shall be construed to relieve the Bank or the Trustee of
liability for its gross negligence or willful misconduct or its negligence
in the handling of funds, it being understood that, without limiting the
foregoing:

(i) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Trustee, unless it
shall be proved that the Trustee was grossly negligent;

(ii) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with
the direction of the Instructing Party pursuant to the express
provisions hereof; it being understood that the Trustee shall be
liable if it takes any action pursuant to instructions from the
Grantor prior to receiving notice from Agent that the Loan Agreement
has been discharged in full pursuant to its terms;

(iii) no provision hereof shall require the Bank or Trustee to
expend or risk its own funds in the performance of any of its duties
hereunder or under any of the other Operative Documents, or in the
exercise of any of its rights or powers; and

(iv) the Bank shall be liable for (A) any taxes on, with respect
to or measured by any amounts paid to it as compensation for services
as the Trustee hereunder or otherwise under the Operative Documents,
(B) acts or omissions not related to the transactions contemplated by
the Operative Documents, (C) the inaccuracy of representations and
warranties made by the Bank in the Participation Agreement or any
certificate or document delivered pursuant thereto, and (D) its
negligence in the handling of funds.

(c) Trustee shall not be required to take any action hereunder or
under the other Operative Documents, nor shall any other provision of this
Trust Agreement or any other Operative Document be deemed to impose a duty
on the Trustee to take any action, if the Trustee determines, or is advised
by counsel, that such action is likely to result in personal liability or
is contrary to Applicable Law or the Operative Documents.

(d) Whether or not therein expressly so provided, except where
expressly provided otherwise, every provision of this Trust Agreement
relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this
Section 3.5.

SECTION 3.6 Certain Rights of Trustee. Except as otherwise provided in
Section 3.5:

(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any signature, resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order or other paper or document reasonably believed by it to be
genuine and to have been signed or presented by the proper party or
parties;

(b) any request, direction or authorization by any party hereto or to
any other Operative Document shall be sufficiently evidenced by a request,
direction or authorization in writing, delivered to the Trustee and signed
in the name of such party by the president, any vice president, the
treasurer or the secretary of such party, as the case may be, and any
resolution of the board of directors or committee thereof of such party
shall be sufficiently evidenced by a copy of such resolution certified by
the secretary or an assistant secretary of such party, as the case may be,
to have been duly adopted and to be in full force and effect on the date of
such certification, and delivered to the Trustee;

(c) whenever in the administration of this Trust Agreement the Trustee
deems it desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Trustee may in good faith
rely upon a certificate in writing, delivered to the Trustee and signed by
the president, any vice president, any assistant vice president, the
treasurer, any assistant treasurer, the secretary or any assistant
secretary of a Lender;

(d) the Trustee may exercise its powers and perform its duties by or
through such attorneys, agents and servants as it may appoint, and it shall
not be liable for the conduct or misconduct of such attorneys, agents and
servants, provided, that the Trustee shall use due care in the appointment
of such attorneys, agents and servants; and it shall be entitled to the
advice of counsel and shall be protected by the advice of such counsel in
anything done or omitted to be done in accordance with such advice if such
advice pertains to such matters as the Trustee may reasonably presume to be
within the scope of such counsel's area of expertise;

(e) Trustee shall not be under any obligation to exercise any of the
rights or powers vested in it by this Trust Agreement or any other
Operative Document at the request or direction of the Instructing Party,
unless the Instructing Party offers to the Trustee reasonable security or
indemnity against the costs, expenses (including reasonable fees and
expenses of its legal counsel) and liabilities which may be incurred by it
in compliance with such request or direction; and

(f) provided no Responsible Officer has actual knowledge of the
inaccuracy thereof, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee determines to make such
further inquiry or investigation, it shall be entitled to examine the books
and records of the Grantor related to the Leased Property to reasonably
determine whether the Grantor is in compliance with the terms and
conditions of the Lease and to examine the Leased Property, by agent or
attorney, all upon the terms and conditions contained in the Lease.

Notwithstanding Section 3.5, the Trustee shall not have any duty (i) to see
to any recording or filing of the Operative Documents or any Uniform Commercial
Code financing statements or to see to the maintenance of any such recording or
filing, (ii) to see to any insurance on the Leased Property or to effect or
maintain any such insurance, whether or not the Grantor is in default with
respect thereto, other than to forward promptly to the Lenders copies of all
certificates, reports and other written information it receives from the Grantor
pursuant to the Lease (unless the Lenders are to receive such certificates,
reports and other written information directly from the Grantor), (iii) to see
to the payment or discharge of any tax, assessment or other government charge or
any Lien owing with respect to, assessed or levied against any part of the Trust
Estate, other than Lessor Liens attributable to it, (iv) to confirm or verify
any financial statements of the Grantor or any other Person, or (v) to inspect
the Leased Property at any time or ascertain or inquire as to the performance or
observance of any of the Grantor's or any other Person's (other than its or the
Bank's) covenants under the Operative Documents with respect to the Leased
Property.

SECTION 3.7 NO REPRESENTATIONS OR WARRANTIES AS TO THE LEASED PROPERTY OR
DOCUMENTS. THE BANK IS NOT A BUILDER, DEVELOPER OR MANUFACTURER OF THE LEASED
PROPERTY OR A DEALER IN OR VENDOR OF SIMILAR LEASED PROPERTY AND HAS NOT
INSPECTED THE LEASED PROPERTY BEFORE DELIVERY TO AND ACCEPTANCE BY THE GRANTOR.
THE BANK HAS NOT MADE NOR DOES IT MAKE (A) ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, AS TO ANY ENVIRONMENTAL MATTER OR CONDITION, VALUE, DESIGN,
OPERATION, CONDITION, QUALITY, DURABILITY, SUITABILITY, MERCHANTABILITY OR
FITNESS FOR USE OR FITNESS FOR A PARTICULAR PURPOSE, ABSENCE OF LATENT OR OTHER
DEFECTS WHETHER OR NOT DISCOVERABLE, ABSENCE OF ANY INFRINGEMENT OF ANY PATENT,
TRADEMARK OR COPYRIGHT, OR ANY OTHER WARRANTY WHATSOEVER, EXPRESS OR IMPLIED,
WITH RESPECT TO THE LEASED PROPERTY, OR AS TO TITLE THERETO, OR (B) ANY
REPRESENTATION OR WARRANTY AS TO THE VALIDITY, LEGALITY OR ENFORCEABILITY OF THE
OPERATIVE DOCUMENTS (OTHER THAN AS TO THIS TRUST AGREEMENT AGAINST THE BANK), OR
AS TO THE CORRECTNESS OF ANY STATEMENT CONTAINED IN ANY THEREOF, EXCEPT AS SET
FORTH IN SECTION 4.3 OF THE PARTICIPATION AGREEMENT.

SECTION 3.8 Status of Moneys Received. All moneys received by the Trustee
or the Bank under or pursuant to this Trust Agreement or any other Operative
Document (other than Excluded Amounts to be paid to the Bank) shall constitute
trust funds for the purpose for which they were paid or are held, but need not
be segregated in any manner from any other moneys and may be deposited by the
Trustee under such conditions as may be prescribed or permitted by Applicable
Law for trust funds, or, at the direction of the Agents may be invested in Cash
Equivalents.

SECTION 3.9 Permitted Activities. The Trustee or any corporation in or with
which the Trustee may be interested or affiliated or any officer or director of
any such corporation may have commercial relations and otherwise deal with the
Grantor or any other Person or with any other corporation having relations with
the Grantor to the full extent permitted by Applicable Law.

SECTION 3.10 Resignation or Removal of Trustee. Bank or any successor
thereto as Trustee may resign as Trustee at any time without cause by giving at
least 60 days' prior written notice to each Lender, the Agent and the Grantor,
and the Required Lenders (or Grantor, if there exists no Event of Default and at
the expense of Grantor) may at any time remove the Trustee without cause by an
instrument in writing delivered to the Trustee, the Agent and the Grantor, such
resignation or removal to be effective on the later of the date specified in
such notice or written instrument or the date on which a successor trustee is
appointed hereunder. With the written consent of the Agent and, so long as a
Lease Event of Default shall not have occurred and be continuing, the Grantor,
the Required Lenders may, at any time upon 30 days' prior written notice to the
Agent and the Grantor by an instrument in writing, appoint a successor trustee;
provided, however, so long a Lease Event of Default shall not have occurred and
be continuing and with the written consent of the Required Lenders and at the
expense of Grantor, the Grantor may, after 30 days from the date of such consent
by an instrument in writing, appoint a successor trustee; provided, further,
that any successor trustee shall be a bank or trust company organized under the
laws of the United States of America or any state thereof that has a combined
capital and surplus of at least $100,000,000, and provided, further, that, if
required by Applicable Law, the Mississippi Gaming Commission shall have made a
determination of suitability with respect to such successor trustee. If the
Required Lenders do not appoint a successor trustee within 30 days after the
giving of notice of such resignation or removal, the Agent or the Trustee may
apply to any court of competent jurisdiction to appoint a successor trustee to
act until a successor or successors is appointed by the Required Lenders as
above provided. Any successor trustee so appointed by such court shall
immediately and without further act be superseded by a successor trustee
appointed by the Required Lenders within one year from the date of the
appointment by such court.

SECTION 3.11 Estate and Rights of Successor Trustee. Any successor trustee,
whether appointed by the Required Lenders or a court, shall execute and deliver
to the predecessor Trustee an instrument accepting such appointment, and
thereupon each successor trustee, without further act, shall become vested with
all the estates, properties, rights, powers, duties and trusts of the
predecessor Trustee in the trusts hereunder with like effect as if originally
named Trustee herein, but nevertheless upon the written request of such
successor trustee, such predecessor Trustee shall execute and deliver an
instrument transferring to such successor Trustee, upon the trusts herein
expressed, all the estates, properties, rights, powers and trusts of such
predecessor Trustee, and such predecessor Trustee shall duly assign, transfer,
deliver and pay over to such successor trustee any property or moneys then held
by such predecessor Trustee upon the trusts herein expressed.

SECTION 3.12 Merger or Consolidation of Trustee. Any corporation into which
the Bank serving as Trustee may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the Bank
serving as Trustee is a party, or any corporation to which substantially all of
the business of the Trustee may be transferred, shall be a successor trustee
under this Trust Agreement without further act.

SECTION 3.13 Co-Trustees. At any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the Trust Estate may at
the time be located, the Instructing Party and the Trustee jointly shall have
the power, and shall execute and deliver all instruments, to appoint one or more
Persons approved by the Required Lenders and the Trustee, to act as co-trustee,
or co-trustees, jointly with the Trustee, or separate trustee or separate
trustees, of all or any part of the Trust Estate, and to vest in such Person or
Persons, in such capacity, such title to the Trust Estate or any part thereof,
and such rights, powers, duties, trusts or obligations as the Required Lenders
and the Trustee may consider necessary or desirable. If the Instructing Party
has not joined in such appointment within 15 days after the receipt by it of a
request to do so, the Trustee alone shall have power to make such appointment.
The Trustee shall not be liable for any act or omission of any co-trustee or
separate trustee appointed under this Section 3.13.

SECTION 3.14 Books and Records. Trustee shall be responsible for keeping
the customary books and records relating to the receipt and disbursement of all
moneys actually received and disbursed by it.

ARTICLE IV

TERMINATION OF AND AMENDMENTS TO TRUST

SECTION 4.1 Termination. The Trust created and provided for hereby shall
cease and be terminated in any one of the following events, whichever shall
first occur:

(a) If the Required Lenders shall by notice in writing to the Trustee,
the Lenders, the Agent and the Grantor revoke and terminate the Trust on
and as of a date stated in such notice, which date shall not be less than
ten nor more than thirty days from the date of mailing such notice, then on
the date specified in such notice the Trust created and provided for hereby
shall cease and terminate, provided, however, that this Trust shall not be
subject to revocation or termination by the Lenders prior to the payment in
full and discharge of the Loans and all other indebtedness secured by the
Operative Documents and the termination of the Operative Documents and the
release of the Liens granted thereby; or

(b) the sale or other final disposition by the Trustee of all property
constituting the Trust Estate and the final disposition by the Trustee of
all moneys or other property or proceeds constituting part of the Trust
Estate in accordance with the terms hereof; provided, however, that the
Trust Estate shall not be subject to sale or other final disposition by the
Trustee prior to the payment in full and discharge of the Loans and all
other indebtedness secured by the Operative Documents and the release of
the Operative Documents and the Liens granted thereby and the payment in
full of the Commitment Amounts; or

SECTION 4.2 Distribution of Trust Estate Upon Termination. Upon any
termination of this Trust pursuant to Section 4.1, the Trustee shall convey the
Trust Estate to such purchaser or purchasers thereof or other Persons entitled
thereto and for such amount and on such terms as are specified in written
instructions from the Required Lenders delivered to the Trustee before the date
of termination; provided that (a) if at the time of any termination the Lease
remains in force and effect, then the Trust Estate shall be conveyed as a unit
subject to the Lease and not in parcels, and (b) if such written instructions
are not delivered to the Trustee on or before the date of termination, the
Trustee shall transfer title to the Trust Estate to the Lenders. Upon making
such transfer or sale the Trustee shall be entitled to immediate receipt of any
sums due and owing to the Trustee, including, without limitation, any expenses
(including reasonable attorneys' fees and expenses) incurred pursuant hereto or
as compensation for services rendered hereunder and not theretofore paid and the
Trustee shall be discharged and free of any further liability hereunder subject
to Section 3.5(b).

SECTION 4.3 Amendments. Subject to Section 6.1(b) and Section 9.5 of the
Participation Agreement, at any time and from time to time, upon the written
request of the Instructing Party, (i) the Trustee shall execute a supplement
hereto for the purpose of adding provisions to, or changing or eliminating
provisions of, this Trust Agreement as specified in such request, and (ii) the
Trustee shall enter into or consent to such written amendment of or supplement
to the other Operative Documents as the Grantor or the Agent, as the case may
be, may agree to and as may be specified in such request, or execute and deliver
such written waiver or modification of the terms of the Operative Documents as
may be specified in such request; provided, however, if in the reasonable
opinion of the Trustee, any document required to be executed by it pursuant to
this Section 4.3 affects any right or duty of, or immunity or indemnity in favor
of, the Trustee under this Trust Agreement or the other Operative Documents, the
Trustee may in its reasonable discretion decline to execute such document.

ARTICLE V

MISCELLANEOUS

SECTION 5.1 Compensation and Indemnification. Trustee shall receive
reasonable compensation for its services hereunder from the Grantor and shall be
reimbursed by the Grantor for the Trustee's reasonable fees and expenses
(including the reasonable disbursements and fees of counsel). If a Lease Event
of Default or a Loan Event of Default shall have occurred and be continuing and
the Trustee is required pursuant to this Trust Agreement to take any action in
connection therewith, it shall be reimbursed by the Grantor for any expenses it
may incur in relation to taking any such action. Subject to any limitations and
rights agreed to by Trustee in the Participation Agreement, including, without
limitation, the terms and provisions set forth in Articles VII and VIII of the
Participation Agreement, whether or not the transactions contemplated by the
Operative Documents are consummated, Grantor shall reimburse and indemnify and
save the Trustee harmless from and against any and all losses, damages,
liabilities, claims, actions, suits, obligations, penalties, demands,
disbursements and expenses, including taxes, counsel fees, and including tort
claims for which the Trustee is strictly liable, which may be asserted against
or incurred by reason of the Bank's being the Trustee or acting as the Trustee
hereunder or under the other Operative Documents or the performance or
enforcement of any of the terms hereof, or arising out of or relating to this
Trust Agreement or the other Operative Documents or the Leased Property, the
Trust Estate or the Rent and other sums payable therefor, or the building,
manufacture, purchase, installation, acceptance, rejection, ownership, delivery,
lease, possession, use, operation, condition, sale, return or other disposition
of the Leased Property or in any way relating to or arising out of the Trust
Estate or the action or the inaction of the Trustee hereunder or by reason of
any occurrence while so acting. In no event shall the Grantor be so obligated in
respect of any such losses, damages, liabilities, claims, actions, suits,
obligations, penalties, demands, disbursements and expenses, including taxes and
counsel fees pursuant to this Section 5.1, arising from or as a result of (a)
the willful misconduct or gross negligence of the Bank or the negligence of the
Bank in the handling of funds, (b) any taxes on, with respect to or measured by
any amounts paid to the Bank as compensation for services as Trustee hereunder
or otherwise under the Operative Documents, or (c) the inaccuracy of
representations and warranties made by the Bank in the Participation Agreement
or in any certificate or documents delivered pursuant thereto. The provisions of
this Section 5.1 and Articles VII and VIII of the Participation Agreement (other
than the requirements for compensation of the Trustee after its resignation,
which shall terminate upon the resignation or removal of the Trustee) shall
continue in force and effect notwithstanding the termination of this Trust, the
resignation or removal of the Trustee or the obligation of any other party to
any other Operative Document to make any payment to the Trustee which the
Grantor is required to make pursuant to this Section 5.1.

SECTION 5.2 Notices. All notices and communications provided for herein
shall be in writing and shall be deemed to have been given in accordance with
Section 9.3 of the Participation Agreement. Trustee shall deliver to each Lender
promptly after receipt copies of all notices, certificates and reports delivered
to it pursuant to any Operative Document.

SECTION 5.3 GOVERNING LAW. THIS TRUST IS BEING CREATED IN THE STATE OF NEW
YORK AND THE VALIDITY, CONSTRUCTION AND ALL RIGHTS UNDER THIS TRUST SHALL BE
GOVERNED BY THE LAWS OF THAT STATE, INCLUDING SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE OF LAWS AND CONFLICTS OF
LAWS RULES OF SUCH STATE; PROVIDED, HOWEVER, THAT THE EXERCISE OF CERTAIN RIGHTS
OR REMEDIES HEREUNDER AND UNDER THE OPERATIVE DOCUMENTS MAY REQUIRE COMPLIANCE
WITH GAMING LAWS. IF ANY PROVISION OF THIS TRUST SHALL BE INVALID OR
UNENFORCEABLE, THE REMAINING PROVISIONS HEREOF SHALL CONTINUE TO BE FULLY
EFFECTIVE, PROVIDED THAT SUCH REMAINING PROVISIONS DO NOT INCREASE THE
OBLIGATIONS OR LIABILITIES OF THE TRUSTEE.

SECTION 5.4 Tax Reports; Information Reporting; Withholding Taxes. If any
tax report or tax return is required to be made by the Trustee with respect to
the Trust Estate and the Grantor is not required to prepare and file the same
pursuant to the Leases, each Lender will prepare such tax report or return in
respect of its interest in the Trust and deliver a copy thereof to the Trustee.
The Trustee agrees to promptly forward to each Lender any communications with
respect to taxes pertaining to the Trust Estate received by the Trustee from tax
authorities or from the Grantor.

SECTION 5.5 Headings. The headings of the various Sections herein are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.

SECTION 5.6 Successors and Assigns. All covenants and agreements contained
herein shall be binding upon, and inure to the benefit of, the parties hereto
and their respective successors and assigns. Grantor may not assign, transfer or
otherwise dispose of its interest in the Trust, except as expressly contemplated
in the Operative Documents.

SECTION 5.7 Severability. Any provision of this Trust Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition on unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction.

SECTION 5.8 Only Written Waivers. No term or provision of this Trust
Agreement may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party or other person against whom
enforcement of the change, waiver, discharge or termination is sought; and any
waiver of the terms hereof shall be effective only in the specific instance and
for the specific purpose given.

SECTION 5.9 Counterparts. This instrument may be simultaneously executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original, and such counterparts together shall constitute and be one and the
same instrument.

SECTION 5.10 Rights in Trust Agreement. Except as expressly provided to the
contrary in the Operative Documents, nothing in this Trust Agreement, whether
express or implied, shall be construed to give any Person other than the Trustee
and each Lender and their respective successors and assigns, any legal or
equitable right, remedy or claim under or in respect of this Trust Agreement.

SECTION 5.11 Payment of Trustee Fees, Costs and Expenses. Grantor shall pay
to the Trustee for its services hereunder such fees and expenses as heretofore
have been agreed upon by Trustee and Grantor and shall also pay to Trustee such
fees and expenses as may be reasonably incurred by the Trustee as a result of
taking any direction of the Instructing Party. Trustee agrees that it shall have
no right against the Lenders or Agent for any fee as compensation for its
services hereunder, except as hereafter expressly agreed upon by the Lenders,
the Agent and the Trustee.

SECTION 5.12 Identification of Trust. The name of the trust created hereby
is the GCI Trust 1996-1.

[Signature page follows]

IN WITNESS WHEREOF, the Bank and the Grantor have caused this Trust
Agreement to be duly executed all as of the day and year first above written
with actual execution on the dates set forth in the respective acknowledgements
below.

HANCOCK BANK,
as Bank and as Trustee

By: /s/ C. H. GIBBONS
Name: C. H. Gibbons
Title: Vice President & Trust Officer

Address: 2510 14th Street
One Hancock Plaza
Gulfport, MS 39501

Telephone No.: (601) 868-4400

Telecopier No.: (601) 868-4333

BL DEVELOPMENT CORP.,
as Grantor

By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer

Address: 13705 First Avenue North
Plymouth, MN 55441-5451

Telephone No.: (612) 449-7030

Telecopier No.:(612) 449-7022

STATE OF MISSISSPIIE )
) ss:
COUNTY OF HARRISON )

Personally appeared before me, the undersigned authority in and for the
said county and state, on this 13th day of May, 1996, within my jurisdiction,
the within named C. H. Gibbons who acknowledged that he is Vice President &
Trust Officer of Hancock Bank, a state banking association, and that for and on
behalf of the said bank, and as its act and deed in the representative capacity
therein stated, he executed the above and foregoing instrument, after first
having been duly authorized by said bank to do so.

Haz Jeannette Lee
----------------------------------
NOTARY PUBLIC

My Commission expires:

Ny Commission Expires Dec. 26, 1998
- --------------------------------
(Affix official seal, if applicable)

STATE OF MINNESOTA )
) ss:
COUNTY OF HENNEPIN )

Personally appeared before me, the undersigned authority in and for
the said county and state, on this 16th day of May, 1996, within my
jurisdiction, the within named Timothy J. Cope who acknowledged that he is the
Chief Financial Officer of BL Development Corp., a Minnesota corporation, and
that for and on behalf of the said corporation, and as its act and deed he
executed the above and foregoing instrument, after first having been duly
authorized by said corporation to do so.

/s/ PATRICIA L. BUFFHAM
----------------------------------
NOTARY PUBLIC

My Commission expires:

- --------------------------------
(Affix official seal, if applicable)

EXHIBIT A
TO
TRUST AGREEMENT

LEGAL DESCRIPTION

BEGINNING at a point at the intersection of the northerly line of a
proposed private drive and the easterly right-of-way line of Village Center Road
(variable width right-of-way);

EXHIBIT B
TO
TRUST AGREEMENT

[DEFINITIONS]

(SEE ITEM NO. 2 (APPENDIX I TO PARTICIPATION AGREEMENT).

[EXECUTION COPY]

SECURITY AGREEMENT AND ASSIGNMENT OF RENTS AND LEASES

dated as of May 10, 1996

between

HANCOCK BANK,
not in its individual capacity,
but solely as Trustee,

and

BA LEASING & CAPITAL CORPORATION,
as Agent.

*****************************************************************

THIS INSTRUMENT IS TO BE FILED AND INDEXED IN THE REAL ESTATE RECORDS OF
TUNICA COUNTY, MISSISSIPPI UNDER THE NAMES OF HANCOCK BANK, NOT IN ITS
INDIVIDUAL CAPACITY, EXCEPT AS EXPRESSLY STATED HEREIN, BUT SOLELY AS TRUSTEE,
AND BA LEASING & CAPITAL CORPORATION FEDERAL I.D. 94-1627057 AS "AGENT."

THIS IS A FIXTURE FILING AND THE RECORD OWNERS OF THE PROPERTY LOCATED IN THE
COUNTY OF TUNICA, STATE OF MISSISSIPPI ARE HANCOCK BANK AND BA LEASING & CAPITAL
CORPORATION.

THIS INSTRUMENT IS A "SECURITY AGREEMENT" AS THAT TERM IS DEFINED IN SECTION
75-9-105(l) OF THE MISSISSIPPI CODE OF 1972, AS AMENDED.

THIS SECURITY AGREEMENT AND ASSIGNMENT OF RENTS AND LEASES SECURES A LINE OF
CREDIT TO BE USED PRIMARILY FOR BUSINESS OR COMMERCIAL PURPOSES AND IS ENTITLED
TO THE LIEN PROTECTION PROVISIONS IN SECTION 89-1-49 OF THE MISSISSIPPI CODE OF
1972, AS AMENDED.

INDEXING INSTRUCTIONS:

Part of the Northwest 1/4 and Southwest 1/4 of Section 5, Township 3 South,
Range 10 West of Tunica County, Mississippi.

SECURITY AGREEMENT AND ASSIGNMENT OF RENTS AND LEASES

THIS SECURITY AGREEMENT AND ASSIGNMENT OF RENTS AND LEASES (this "Security
Agreement"), dated as of May 10, 1996, is made by HANCOCK BANK, not in its
individual capacity but solely as Trustee ("Grantor") under that certain Trust
Agreement dated as of May 10, 1996, between BL Development Corp. and Grantor, in
favor of BA LEASING & CAPITAL CORPORATION, as Agent ("Agent") for the Lenders.

W I T N E S S E T H:

WHEREAS, Grantor, Agent, Co-Agents, the Lead Manager, the Lenders,
Guarantors and BL Development Corp., a Minnesota corporation, as Lessee
("Lessee") and Construction Agent, have entered into that certain Participation
Agreement, dated as of May 10, 1996 (as amended, modified or supplemented from
time to time, the "Participation Agreement"); and

WHEREAS, concurrently herewith pursuant to the Participation Agreement, (i)
Grantor will obtain Loans from the Lenders pursuant to the Loan Agreement, the
proceeds of which will be used to provide funding for the purchase, construction
and installation of the Hotel and certain items of Equipment, and (ii) Grantor,
as lessor, and Lessee, as lessee, are entering into the Lease; and

WHEREAS, it is a condition precedent to the consummation by the Lenders of
the transactions to be consummated on each Advance Date that Grantor execute and
deliver this Security Agreement as security for Grantor's obligations under the
Loan Agreement; and

WHEREAS, it is in the best interests of Grantor that the transactions
contemplated by the Operative Documents occur; and

WHEREAS, Grantor has duly authorized the execution, delivery and
performance of this Security Agreement;

NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Lenders
to enter into the transactions contemplated by the Operative Documents, Grantor
agrees as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Security Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):

"Collateral" is defined in Section 2.1.

"Secured Obligations" is defined in Section 2.2.

SECTION 1.2. Participation Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Security Agreement,
including its preamble and recitals, have the meanings provided in Appendix 1 to
the Participation Agreement, a copy of which is attached hereto as Annex I.

SECTION 1.3. UCC Definitions. Unless otherwise defined herein or the
context otherwise requires, terms for which meanings are provided in the UCC are
used in this Security Agreement, including its preamble and recitals, with such
meanings.

ARTICLE II

SECURITY INTEREST

SECTION 2.1. Grant of Security. Grantor hereby assigns and pledges to
Agent, and hereby grants to Agent, for the benefit of the Lenders, a security
interest in and to all of the following, whether now existing or hereafter
arising or acquired (the "Collateral"):

(i) all of Grantor's right, title and interest in, to and under
the Hotel and each item of Equipment;

(ii) all of Grantor's right, title and interest in, to and under
each Bill of Sale and each Certificate of Acceptance;

(iii) all of Grantor's right, title and interest in, to and under the
Participation Agreement, the Lease, each Deed of Trust and each Lease
Supplement, including the security interest granted thereunder in favor of
the Grantor and including all rights to receive payments thereunder
(including Rent) other than Excluded Amounts;

(iv) all of Grantor's right, title and interest in, to and under
the Guaranty, the Construction Agency Agreement, the Security
Documents and the other Operative Documents;

(v) all of Grantor's right, title and interest in, to and under the
Construction Documents and any and all contracts and permits (to the extent
assignable) necessary to operate and maintain the Hotel, or any portion
thereof;

(vi) all books, records, writings, databases, information and other
property relating to, used or useful in connection with, evidencing,
embodying, incorporating or referring to, any of the foregoing; and

(vii) all products, accessions, rents (including, without limitation,
all hotel room rents or related accounts receivable), issues, profits,
returns, income and proceeds and Cash Collateral (as defined in the
Bankruptcy Code) of and from any and all of the foregoing Collateral
(including proceeds which constitute property of the types described in the
foregoing clauses of this Section 2.1, proceeds deposited from time to time
in any lockboxes of the Grantor, and, to the extent not otherwise included,
all payments under insurance (whether or not the Agent is the loss payee
thereof), or any indemnity, warranty or guaranty payable by reason of loss
or damage to or otherwise with respect to any of the foregoing Collateral).

Grantor hereby assigns, transfers and conveys to Agent all payments (except
Excluded Amounts) payable by Lessee under the Lease.

SECTION 2.2. Security for Obligations. This Security Agreement secures the
payment of all obligations of Grantor now or hereafter existing under the Notes,
the Loan Agreement and any other Operative Document to which it is a party,
whether for principal, interest, costs, fees, expenses or otherwise, and all
other obligations of Grantor to the Lenders howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent or now or
hereinafter existing or due or to become due (all such obligations being the
"Secured Obligations").

SECTION 2.3. Continuing Security Interest; Transfer of Notes. This
Security Agreement shall create a continuing security interest in the
Collateral and shall

(a) remain in full force and effect until the payment in full of all
Secured Obligations and the termination of the Commitments and any other
commitments of the Lenders to or for the benefit of Grantor;

(b) be binding upon Grantor, its successors, transferees and
assigns; and

(c) inure, together with the rights and remedies of Agent hereunder,
to the benefit of Agent and its successors, transferees and assigns.

Without limiting the generality of the foregoing clause (c), each transferee of
a Note shall, upon such transfer, become vested with all the rights and benefits
in respect thereof granted under any Operative Document (including this Security
Agreement) or otherwise, subject, however, to any contrary provisions in such
assignment or transfer. Upon the payment in full and performance of all Secured
Obligations and the termination of the Commitments, and any other commitments of
the Lenders to Grantor, the security interest granted herein shall terminate and
all rights to the Collateral shall revert to Grantor. Upon any such termination,
Agent will, on behalf of the Lenders and at Grantor's sole expense, execute and
deliver to Grantor such documents as Grantor shall reasonably request to
evidence such termination.

SECTION 2.4. Grantor Remains Liable. Anything herein to the contrary
notwithstanding

(a) Grantor shall remain liable under the contracts and agreements
included in the Collateral to the extent set forth therein, and shall
perform all of its duties and obligations under such contracts and
agreements to the same extent as if this Security Agreement had not been
executed;

(b) the exercise by Agent of any of its rights hereunder shall not
release Grantor from any of its duties or obligations under any such
contracts or agreements included in the Collateral; and

(c) Agent shall not have any obligation or liability under any such
contracts or agreements included in the Collateral by reason of this
Security Agreement, nor shall Agent be obligated to perform any of the
obligations or duties of Grantor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

SECTION 3.1. Representations and Warranties. Grantor represents and
warrants unto Agent as set forth in this Article.

SECTION 3.1.1. Ownership, No Liens, etc. To the extent provided in the
Operative Documents, Grantor owns the Collateral free and clear of any lien,
security interest, charge or encumbrance except for the security interest
created by the Security Documents, Permitted Liens and Lessee's interest in the
Lease.

SECTION 3.1.2. Compliance with Laws. Grantor is in compliance with all
Applicable Laws of every Governmental Authority, the non-compliance with which
might have a Material Adverse Effect.

ARTICLE IV

COVENANTS

SECTION 4.1. Certain Covenants. Grantor covenants and agrees that, so long
as any portion of the Secured Obligations shall remain unpaid or the Lenders
shall have any outstanding Commitments to Grantor, Agent may exercise, in its
sole and absolute discretion, any and all rights and powers set forth in this
Section.

SECTION 4.1.1. As to Collateral.

(a) Agent may, at the expense of Grantor (subject to Section 2.8 of
the Loan Agreement), endeavor to collect, as and when due, all amounts due
with respect to any of the Collateral. Agent, as assignee hereunder of the
Lease, may, at any time, enforce collection of any of the Collateral by
suit or otherwise and surrender, release, or exchange all or any part
thereof, or compromise or extend or renew for any period (whether or not
longer than the original period) any indebtedness thereunder or evidenced
thereby.

(b) Agent is authorized to endorse, in the name of Grantor, any item,
howsoever received by Agent, representing any payment on or other proceeds
of any of the Collateral.

(c) If a Lease Default shall have occurred and be continuing, then the
Agent, as assignee hereunder of the Lease may declare, in its sole and
absolute discretion, a Lease Event of Default and may, in its sole and
absolute discretion, exercise any or all of the rights and powers and
pursue any or all of the remedies of Lessor pursuant to Article X of the
Lease.

SECTION 4.1.2. Transfers and Other Liens. Except as provided in the
Operative Documents, Grantor shall not:

(a) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral;

(b) cancel or terminate the Assigned Agreements or consent to or
accept any cancellation or termination thereof;

(c) amend or otherwise modify the Assigned Agreements or give any
consent, waiver or approval thereunder, except pursuant to Section 9.5 of
the Participation Agreement;

(d) waive any default under or breach of the Assigned
Agreements;

(e) create or suffer to exist any Lien or other charge or encumbrance
upon or with respect to any of the Collateral to secure indebtedness of any
Person or entity, except for the security interest created by this Security
Agreement, Permitted Liens or Lessee's interest in the Lease; or

(f) take any other action in connection with the Assigned Agreements
which would impair the value of the interest or rights of Grantor
thereunder or which would impair the interest or rights of Agent.

SECTION 4.1.3. Further Assurances, etc. Grantor agrees that, from time to
time and at its own expense (subject to Section 2.8 of the Loan Agreement), it
will promptly execute and deliver all further instruments and documents, and
take all further action that may be necessary or desirable, or that Agent may
request, in order to perfect, preserve and protect any security interest granted
or purported to be granted hereby or to enable Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, Grantor will:

(a) execute and file or record such instruments or notices as may be
necessary or desirable, or as Agent may request, in order to perfect and
preserve the security interests and other rights granted or purported to be
granted to Agent hereby; and

(b) furnish to Agent, from time to time at Agent's request, statements
and schedules further identifying and describing the Collateral and such
other reports in connection with the Collateral as Agent may reasonably
request, all in reasonable detail.

ARTICLE V

THE AGENT

SECTION 5.1. Agent Appointed Attorney-in-Fact. Grantor hereby irrevocably
appoints Agent as Grantor's attorney-in-fact, with full authority in the place
and stead of Grantor and in the name of Grantor or otherwise, from time to time
in Agent's discretion, after the occurrence of a Loan Event of Default (subject
to Section 6.2 of the Loan Agreement) to take any action and to execute any
instrument which Agent may deem necessary or advisable to accomplish the
purposes of this Security Agreement, including, without limitation:

(a) to ask, demand, collect, sue for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;

(b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause
(a) above;

(c) to file any claims or take any action or institute any proceedings
which Agent may deem necessary or desirable for the collection of any of
the Collateral or otherwise to enforce the rights of Agent with respect to
any of the Collateral; and

(d) to perform the affirmative obligations of Grantor hereunder
(including all obligations of Grantor pursuant to Section 4.1.3).

Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.

SECTION 5.2. Agent May Perform. If Grantor fails to perform any agreement
contained herein, Agent may itself perform, or cause performance of, such
agreement, and the expenses of Agent incurred in connection therewith shall be
payable by Grantor pursuant to Section 6.2.

SECTION 5.3. Agent Has No Duty. In addition to, and not in limitation of,
Section 2.4, the powers conferred on Agent hereunder are solely to protect
Agent's interest in the Collateral and shall not impose any duty on it to
exercise any such powers. Except for the reasonable care of any Collateral in
its possession and the accounting for moneys actually received by it hereunder,
Agent shall not have any duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.

SECTION 5.4. Reasonable Care. Agent is required to exercise reasonable care
in the custody and preservation of any of the Collateral in its possession;
provided, however, that Agent shall be deemed to have exercised reasonable care
in the custody and preservation of any of the Collateral if it takes such action
for that purpose as Grantor reasonably requests in writing at times other than
upon the occurrence and during the continuance of any Loan Event of Default, but
failure of Agent to comply with any such request at any time shall not in itself
be deemed a failure to exercise reasonable care.

ARTICLE VI

REMEDIES

SECTION 6.1. Certain Remedies. If any Loan Event of Default shall
have occurred and be continuing:

(a) Agent may exercise in respect of the Collateral, in addition to
other rights and remedies provided for herein or otherwise available to it,
all the rights and remedies of a secured party on default under the UCC
(whether or not the UCC applies to the affected Collateral), and also may
exercise any and all rights and remedies of Grantor under or in connection
with the Collateral, including, without limitation, any and all rights of
Grantor to demand or otherwise require payment of any amount under, or
performance of any provision of, the Assigned Agreements. Grantor agrees
that, to the extent notice of sale shall be required by law, at least ten
(10) days' prior notice to Grantor of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification. Agent shall not be obligated to make any sale of
Collateral regardless of whether notice of sale has been given. Agent may
adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.

(b) All payments, except for Excluded Amounts, received by Grantor
under or in connection with the Assigned Agreements or otherwise in respect
of the Collateral shall be received in trust for the benefit of Agent,
shall be segregated from other funds of Grantor, and shall be forthwith
paid over to Agent in the same form as so received (with any necessary
endorsement).

(c) All cash proceeds received by Agent in respect of any sale of,
collection from, or other realization upon all or any part of the
Collateral may, in the discretion of Agent, be held by Agent as collateral
for, and/or then or at any time thereafter applied (after payment of any
amounts payable to Agent pursuant to Section 6.2 and the Trustee pursuant
to the Operative Documents) in whole or in part by Agent against, all or
any part of the Secured Obligations in such order as Agent shall elect. Any
surplus of such cash or cash proceeds held by Agent and remaining after
payment in full of all the Secured Obligations shall be paid over to
Grantor or to whomsoever may be lawfully entitled to receive such surplus.

SECTION 6.2. Indemnity and Expenses.

(a) Subject to Section 2.8 of the Loan Agreement, Grantor agrees to
indemnify Agent from and against any and all claims, losses and liabilities
arising out of or resulting from this Security Agreement (including,
without limitation, enforcement of this Security Agreement), except claims,
losses or liabilities resulting from Agent's gross negligence or wilful
misconduct.

(b) Subject to Section 2.8 of the Loan Agreement, Grantor will upon
demand pay to Agent the amount of any and all reasonable expenses,
including the reasonable fees and disbursements of its counsel and of any
experts and agents, which Agent may incur in connection with

(i) the administration of this Security Agreement,

(ii) the custody, preservation, use or operation of, or the
sale of, collection from, or other realization upon, any of the
Collateral,

(iii) the exercise or enforcement of any of the rights of
Agent hereunder or

(iv) the failure by Grantor to perform or observe any of
the provisions hereof.

ARTICLE VII

MISCELLANEOUS PROVISIONS

SECTION 7.1. Operative Document. This Security Agreement is an Operative
Document executed pursuant to the Participation Agreement and shall (unless
otherwise expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof.

SECTION 7.2. Amendments; etc. No amendment to or waiver of any provision of
this Security Agreement nor consent to any departure by Grantor herefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Agent, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

SECTION 7.3. Addresses for Notices. Unless otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be delivered in accordance with, and shall be deemed to
have been given as provided in, Section 9.3 of the Participation Agreement.

SECTION 7.4. Section Captions. Section captions used in
this Security Agreement are for convenience of reference only, and shall
not affect the construction of this Security Agreement.

SECTION 7.5. Severability. Wherever possible, each provision of this
Security Agreement shall be interpreted in such manner as to be effective and
valid under Applicable Laws, but if any provision of this Security Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Security Agreement.

SECTION 7.6. Counterparts. This Security Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement.

SECTION 7.7. Governing Law, Entire Agreement, etc. THIS SECURITY AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF, EXCEPT TO
THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER,
OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY
THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK AND TO THE EXTENT
THAT THE EXERCISE OF CERTAIN RIGHTS OR REMEDIES HEREUNDER OR UNDER THE OTHER
OPERATIVE DOCUMENTS MAY REQUIRE COMPLIANCE WITH THE GAMING LAWS. THIS SECURITY
AGREEMENT AND THE OTHER OPERATIVE DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING
AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE
ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.

[signature page follows]

IN WITNESS WHEREOF, Grantor has caused this Security Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written with actual execution on the dates set forth in the
respective acknowledgements below.

HANCOCK BANK, not in its individual capacity but
solely as Trustee under the Trust Agreement

By: /s/ C. H. GIBBONS
Name: C. H. Gibbons
Title: Trust Officer

Address: 2510 14th Street
One Hancock Plaza
Gulfport, MS 39501

Attention:

Telephone No.: (601) 868-4400

Telecopier No.: (601) 868-4333

BA LEASING & CAPITAL CORPORATION, as Agent under
the Participation Agreement

By: /s/ DAVID F. SCULLY
Name: David F. Scully
Title: Vice President

Address: Four Embarcadero Center
Suite 1200
San Francisco, CA 94111

Attention: Sonia Delen, AVP

Telephone No.: (415) 765-7372

Telecopier No.:(415) 765-7373

CORPORATE ACKNOWLEDGMENT
(TRUSTEE)

STATE OF MISSISSIPPI )
) ss:
COUNTY OF HARRISON )

Personally appeared before me, the undersigned authority in and for the
said county and state, on this 13th day of May, 1996, within my jurisdiction,
the within named C. H. Gibbons, duly identified before me, who acknowledged that
__he is Vice President & Trust Officer of Hancock Bank, a state banking
association, and that for and on behalf of said bank, and as its act and deed in
the representative capacity herein stated, __he executed the above and foregoing
instrument, after first having been duly authorized by said bank so to do.

------------------------------
NOTARY PUBLIC

My Commission Expires:
My Commission Expires Jan. 15, 2000
- -------------------------
(Affix official seal)

CORPORATE ACKNOWLEDGMENT
(AGENT)

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

Personally appeared before me, the undersigned authority in and for
the said county and state, on this 15th day of May, 1996, within my
jurisdiction, the within named David F. Scully, duly identified before me, who
acknowledged that he is Vice President of BA Leasing & Capital Corporation, a
California corporation, and that for and on behalf of said corporation, and as
its act and deed in the representative capacity therein stated, he executed the
above and foregoing instrument, after first having been duly authorized by said
corporation so to do.

/s/ KEITH D. ARNOLD
------------------------------
NOTARY PUBLIC

My Commission Expires:

- -------------------------
(Affix official seal)

ANNEX I

[DEFINITIONS]
Missing Copy

ANNEX II

LEGAL DESCRIPTION

All that tract or parcel of land lying and being in Section 5,
Township 3 South, Range 10 West, Tunica County, Mississippi, as shown as
containing 10.14 acres on that certain plat prepared by Rosser Lowe, a division
of Rosser International, Inc. (William J. Daniel III, MS PLS No. 2031), entitled
Boundary Survey of Hotel I Site, dated 19 April 1996, last revised May 6, 1996
and being more particularly described as follows:

BEGINNING at a point at the intersection of the northerly line of a
proposed private drive and the easterly right-of-way line of Village Center Road
(variable width right-of-way);

THENCE along a curve to the left having a radius of 1937.62 feet and
an arc length of 221.26 feet, being subtended by a chord of North 14 degrees 46
minutes 54 seconds East for a distance of 221.14 feet, along said easterly
right-of-way line, to a point;
THENCE North 11 degrees 30 minutes 26 seconds East for a distance of
213.54 feet, continuing along said right-of-way line, to a point;
THENCE along a curve to the right having a radius of 925.97 feet and
an arc length of 518.60 feet, being subtended by a chord of South 60 degrees 42
minutes 33 seconds East for a distance of 511.85 feet, leaving said right-of-way
line, to a point;
THENCE South 44 degrees 39 minutes 53 seconds East for a distance of
203.07 feet, to a point;
THENCE South 73 degrees 47 minutes 51 seconds East for a distance of
69.49 feet to a point;
THENCE South 16 degrees 02 minutes 06 seconds West for a distance of
247.62 feet, to a point;
THENCE South 28 degrees 48 minutes 07 seconds East for a distance of
136.12 feet, to a point;
THENCE South 73 degrees 48 minutes 08 seconds East for a distance of
246.92 feet, to a point;
THENCE South 16 degrees 11 minutes 43 seconds West for a distance of
86.34 feet, to a point;
THENCE North 74 degrees 22 minutes 51 seconds West for a distance of
212.82 feet, to a point;
THENCE South 61 degrees 11 minutes 56 seconds West for a distance of
118.17 feet, to a point;
THENCE North 28 degrees 48 minutes 15 seconds West for a distance of
186.36 feet, to a point;
THENCE South 61 degrees 12 minutes 34 seconds West for a distance of
26.14 feet, to a point;
THENCE along a curve to the right having a radius of 108.24 feet and
an arc length of 90.46 feet, being subtended by a chord of South 85 degrees 48
minutes 34 seconds West for a distance of 87.85 feet, to a point;
THENCE along a curve to the left having a radius of 24.01 feet and an
arc length of 20.84 feet, being subtended by a chord of South 86 degrees 04
minutes 56 seconds West for a distance of 20.20 feet, to a point;
THENCE along a curve to the right having a radius of 325.60 feet and
an arc length of 63.89 feet, being subtended by a chord of South 65 degrees 53
minutes 40 seconds West for a distance of 63.78 feet, to a point on the easterly
line of a proposed private drive;
THENCE along a curve to the left having a radius of 491.46 feet and an
arc length of 677.16 feet, being subtended by a chord of North 37 degrees 13
minutes 01 seconds West for a distance of 624.85 feet, along said line of a
proposed private drive northwesterly and westerly to the point of BEGINNING.

[EXECUTION COPY]

CONSTRUCTION AGENCY AGREEMENT

dated as of May 10, 1996

between

HANCOCK BANK,
not in its individual capacity,
except as expressly provided herein,
but solely as Trustee

and

BL DEVELOPMENT CORP., as Construction Agent.

TABLE OF CONTENTS

Section Page

ARTICLE I

DEFINITIONS

1.1. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . .2

ARTICLE II

APPOINTMENT OF CONSTRUCTION AGENT; AUTHORITY; TERM

2.1. Appointment of Construction Agent . . . . . . . . . . . . . .2
2.2. Acceptance of Appointment . . . . . . . . . . . . . . . . . .2
2.3. Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
2.4. Scope of Authority. . . . . . . . . . . . . . . . . . . . . .3
2.5. No Construction Agency Fee. . . . . . . . . . . . . . . . . .5
2.6. Delegation; Construction Documents. . . . . . . . . . . . . .5

ARTICLE III

COVENANTS OF CONSTRUCTION AGENT

3.1. Completion of Construction. . . . . . . . . . . . . . . . . .6
3.2. Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
3.3. Casualty; Non-Casualty Loss . . . . . . . . . . . . . . . . .6
3.4. Construction Documents. . . . . . . . . . . . . . . . . . . .8
3.5. Construction Documents; Security Agreement and Collateral
Assignment of Primary Construction Contract . . . . . . . .8
3.6. Environmental Matters . . . . . . . . . . . . . . . . . . . .9
3.7. Other Covenants of Construction Agent . . . . . . . . . . . .9

ARTICLE IV

PAYMENT OF FUNDS

4.1. Funding of Hotel Costs. . . . . . . . . . . . . . . . . . . 10

ARTICLE V

CONSTRUCTION AGENCY EVENTS OF DEFAULT

5.1. Construction Agency Events of Default . . . . . . . . . . . 10
5.2. Survival. . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.3. Remedies; Remedies Cumulative . . . . . . . . . . . . . . . 12

ARTICLE VI

MISCELLANEOUS

6.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.2. Successors and Assigns. . . . . . . . . . . . . . . . . . . 12
6.3. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . 13
6.4. Amendments and Waivers. . . . . . . . . . . . . . . . . . . 13
6.5. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 13
6.6. Severability. . . . . . . . . . . . . . . . . . . . . . . . 13
6.7. Headings and Table of Contents. . . . . . . . . . . . . . . 13
6.8. Limitations of Recourse . . . . . . . . . . . . . . . . . . 13
6.9. Knowledge of Trustee and Bank . . . . . . . . . . . . . . . 14

EXHIBIT A Form of Security Agreement and Collateral
Assignment of Construction Documents

EXHIBIT B Form of Acknowledgment of and Consent to Security Agreement
and Collateral Assignment of Primary
Construction Contract

CONSTRUCTION AGENCY AGREEMENT

THIS CONSTRUCTION AGENCY AGREEMENT (as amended and supplemented from time
to time, this "Construction Agency Agreement"), dated as of May 10, 1996, is
entered into by and between HANCOCK BANK, not in its individual capacity except
as expressly set forth herein but solely as Trustee ("Trustee"), and BL
DEVELOPMENT CORP., a Minnesota corporation (in its capacity as construction
agent, "Construction Agent").

W I T N E S S E T H:

WHEREAS, Construction Agent, as lessee ("Lessee") and Trustee, as lessor,
are parties to (i) that certain Lease Agreement and Deed of Trust dated as of
even date herewith (as amended, supplemented or otherwise modified from time to
time pursuant thereto, "Lease") pursuant to which, among other things, Lessee
has agreed to lease from Trustee, and Trustee has agreed to lease to Lessee,
Trustee's interest in the Hotel and (ii) that certain Participation Agreement
pursuant to which Trustee and the Lenders will fund Hotel Costs; and

WHEREAS, subject to the terms and conditions hereof, (i) Trustee and Agent
desire that Construction Agent act as Construction Agent for the benefit of
Trustee and each Lender for the design, engineering, identification,
acquisition, construction, installation, testing and placement into service of
the Hotel in accordance with the Construction Documents and the Plans and
Specifications and pursuant to the Lease, and (ii) Construction Agent desires,
for the benefit of Trustee and each Lender, to cause the Hotel to be designed,
engineered, identified, acquired, constructed, installed, tested and placed into
service in accordance with the Construction Documents, the Plans and
Specifications and this Construction Agency Agreement and pursuant to the Lease,
in each case in accordance with the terms herein set forth;

NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1. Defined Terms. Capitalized terms used but not otherwise
defined in this Construction Agency Agreement shall have the meanings set forth
in Appendix 1 to the Participation Agreement (as defined in the Lease).

ARTICLE II

APPOINTMENT OF CONSTRUCTION AGENT; AUTHORITY; TERM

SECTION 2.1. Appointment of Construction Agent. Pursuant and subject to the
terms and conditions set forth herein and in the Participation Agreement and the
other Operative Documents, Trustee hereby irrevocably designates and appoints
Construction Agent as its exclusive agent to act on Trustee's behalf for the
design, engineering, identification, acquisition, construction, installation,
testing and placement into service of the Hotel.

SECTION 2.2. Acceptance of Appointment. Construction Agent hereby
unconditionally and irrevocably accepts the designation and appointment as
Construction Agent for the purposes set forth in Section 2.1. Construction Agent
agrees to perform its duties and obligations as set forth in this Construction
Agency Agreement.

SECTION 2.3. Term. This Construction Agency Agreement shall commence on the
date hereof and shall terminate upon the first to occur of:

(a) payment by Lessee of the Lease Balance together with all other
amounts due and owing under the Operative Documents and termination of the
Lease in accordance with Article V of the Lease;

(b) termination of this Construction Agency Agreement pursuant to
Article V;

(d) by mutual agreement of Construction Agent and Trustee; provided,
Trustee's agreement shall be subject to the requirements of Section 9.5 of
the Participation Agreement.

SECTION 2.4. Scope of Authority.

(a) Subject to the terms, conditions, restrictions and limitations set
forth in the Operative Documents, Trustee hereby expressly authorizes
Construction Agent, or any agent or contractor of Construction Agent, and
Construction Agent unconditionally agrees, for the benefit of Trustee, to
take or cause to be taken all action necessary or desirable for the
performance and satisfaction of all of Construction Agent's obligations
hereunder relating to the construction and placement into service of the
Hotel, such actions to include, without limitation:

(i) identifying and assisting with the acquisition of the Hotel;

(ii) performing all design and supervisory functions relating to
the construction, design, engineering, installation, testing and/or
placement into service of the Hotel, including determining feasible
construction methods, available materials and labor, and time
requirements for procurement, installation and construction of
materials, supplies for the Hotel;

(iii) negotiating and entering into all contracts or arrangements
(including any amendments or modifications thereto) to procure the
equipment and materials necessary to construct, install, test and/or
place into service the Hotel on such terms and conditions as are
customary and reasonable in light of local standards and practices;

(iv) paying, or causing to be paid, in accordance with the
Construction Documents, all Hotel Costs and performing all obligations
under the Construction Documents and otherwise in connection with the
construction and installation of the Hotel in the manner contemplated
by the Construction Documents;

(v) determining, evaluating, accepting and validating completion
of construction of the Hotel in accordance with the Construction
Documents and the Operative Documents;

(vi) enforcing performance by the Prime Contractor and of each
party to each Construction Document of their respective warranties and
other construction obligations with respect to the design,
engineering, construction and installation of the Hotel or pursuing
remedies with respect to the breach of these obligations;

(vii) to the extent permitted under the Operative Documents,
using the proceeds of any insurance maintained by Lessee to complete
construction of or rebuild any portion of the Hotel suffering a
Casualty;

(viii) entering into financing arrangements to construct and
install the Hotel subject to the terms and conditions set forth in the
Operative Documents;

(ix) obtaining all necessary permits, licenses, consents,
approvals and other authorizations, including those required under
Applicable Law, from all Governmental Authorities in connection with
the development, construction, installation, testing and placement
into service of the Hotel in accordance with the Plans and
Specifications;

(x) handling any Hazardous Materials in compliance with all
Environmental Laws;

(xi) functioning as the on-site representative of Lessee and, in
such capacity, monitoring, testing and inspecting the progress of the
construction and installation of the Hotel, reviewing all invoices and
all costs and expenses relating to the Hotel;

(xii) giving all notices and providing all certificates and other
information required to be given by Lessee under the Lease;

(xiii) maintaining all books and records with respect to the
design, engineering, identification, acquisition, construction,
installation, testing, placement into service, operation and
management of the Hotel; and

(xiv) performing any other acts necessary in connection with the
design, engineering, identification, acquisition, construction,
installation, testing, placement into service and development of the
Hotel.

(b) Subject to the terms and conditions of this Construction Agency
Agreement and the other Operative Documents, Construction Agent shall have
sole management and control over the construction means, methods, sequences
and procedures with respect to the construction and installation of the
Hotel.

(c) Construction Agent may, subject to the conditions, restrictions
and limitations set forth herein and in the other Operative Documents, at
any time during the term hereof revise, amend or modify the Plans and
Specifications without the consent of Trustee; provided, however, that
Trustee's prior written consent will be required if the aggregate effect of
such revision, amendment or modification, when taken together with any
previous or contemporaneous revisions, amendment or modification to any of
the Plans and Specifications, would be to reduce the Fair Market Sales
Value of the Hotel in any material respect when completed, or to have a
material adverse effect on the economic life and utility of the Hotel as
built and installed in accordance with the original Plans and
Specifications.

SECTION 2.5. No Construction Agency Fee. All obligations, duties and
requirements imposed upon or allocated to Construction Agent shall be performed
by Construction Agent at Construction Agent's sole cost and expense, and
Construction Agent will not be entitled to, and Trustee shall have no obligation
to pay, any agency fee or other fee or compensation, and Construction Agent
shall not be entitled to, and neither Trustee nor any other Person shall have
any obligation to make or pay, any reimbursement therefor, it being understood
that this Construction Agency Agreement is being entered into as consideration
for and as an inducement to Trustee to enter into the Lease and the other
Operative Documents.

SECTION 2.6. Delegation; Construction Documents. Trustee acknowledges that
Construction Agent has previously entered into the Construction Documents and
that Construction Agent will cause substantially all of its obligations
hereunder to be performed by the Prime Contractor pursuant to the Construction
Documents. Construction Agent may from time to time also enter into other
agreements with third parties as Construction Agent deems necessary or desirable
in order to cause the Hotel to be constructed and installed pursuant to this
Construction Agency Agreement. If for any reason the Prime Contractor under the
Construction Documents or any other third party under any other such agreement
defaults or fails to perform or otherwise complete construction of the Hotel in
accordance with the time schedule set forth in the Construction Documents and in
conformance with the Plans and Specifications, Construction Agent shall remain
liable hereunder and shall be fully responsible for completion and installation
of the Hotel in accordance with the Plans and Specifications by not later than
the Construction Termination Date. The Primary Construction Contract and the
Architect's Agreement shall provide that the Primary Contractor and the
Architect will look solely to Construction Agent for performance under such
agreements, and in the event of default or failure to perform by Construction
Agent, none of Trustee, Agent or any Lender will have any liability under any
such agreements.

ARTICLE III

COVENANTS OF CONSTRUCTION AGENT

SECTION 3.1. Completion of Construction. Construction Agent shall,
unconditionally and for the benefit of Trustee and the Lenders, cause the
Completion Date to occur on or before the Construction Termination Date.
Construction Agent's obligations shall not be limited or reduced by virtue of
any failure of Trustee to provide any funds (or any lack of funds of
Construction Agent), except if such failure constitutes (or such lack of funds
is caused by the failure of Trustee to provide any funds to Construction Agent,
or of the Lenders to provide any funds to Trustee, which failure in either case
constitutes) a breach of Trustee's or any Lender's obligations under the
Participation Agreement after all conditions to such funding are duly and timely
satisfied.

SECTION 3.2. Costs. If, for any reason, the aggregate cost to complete the
design, engineering, identification, acquisition, construction, installation,
testing and placement into service of the Hotel exceeds the Fair Market Sales
Value determined pursuant to the Appraisal delivered pursuant to Section 3.3(i)
of the Participation Agreement, then all such costs in excess of such amount
shall be borne by Construction Agent from its own funds. Construction Agent's
obligation under this Section 3.2 shall be absolute and unconditional,
notwithstanding any excess of the cost of construction of the Hotel over the
Fair Market Sales Value thereof, the payment of which excess shall be the
recourse obligation of Construction Agent.

SECTION 3.3. Casualty; Non-Casualty Loss.

(a) If, at any time before the Completion Date, there occurs a
Casualty in respect of the Hotel, then, Construction Agent shall give
prompt notice thereof (including the date of such occurrence) to Trustee
and the Lenders and will either (i) purchase the Hotel as is existing at
the time of such Casualty or (ii) promptly repair or replace the portions
of the Hotel suffering the Casualty, and promptly and diligently continue
to complete the design, engineering, identification, acquisition,
construction, installation, testing and placement into service of the Hotel
in accordance with the Construction Documents, the Plans and Specifications
and the terms hereof, and shall cause the Completion Date to occur on or
before the Construction Termination Date. If Construction Agent does not
notify Trustee within 30 days of the Casualty that it elects to purchase
the Hotel, then it will be deemed to have elected to repair or replace the
portions of the Hotel suffering the Casualty. If Construction Agent elects
to purchase the Hotel, it must pay the purchase price thereof to Trustee
not later than 45 days after the Casualty. The purchase price for the Hotel
shall be the amount of the then outstanding applicable Lease Supplement
Balance relating to the Hotel, plus an amount equal to the accrued but
unpaid interest on the Notes and all other amounts then due and payable
under the Lease and the Notes. If Construction Agent elects to repair or
replace the Hotel, Construction Agent shall be entitled to reimbursement
for amounts expended in connection therewith from the Casualty Recoveries,
which proceeds shall be paid to Construction Agent (x) first by Lessee in
accordance with Section 9.1(f) of the Lease and (y) after the proceeds
received pursuant to clause (x) have been used in accordance with this
Section 3.3(a), by Trustee, which shall promptly remit Casualty Recoveries
held by it to Construction Agent upon delivery by Construction Agent to
Trustee of written request for such reimbursement; provided, however, that
(1) if Construction Agent elects to purchase the Hotel, all Casualty
Recoveries received by Trustee shall be immediately applied by Trustee in
reduction of the purchase price payable hereunder upon written notice of
such election and (2) if not already received by Trustee and an Event of
Default has occurred and is continuing, Trustee may retain such proceeds as
cash collateral (without releasing Construction Agent from its obligation
under this Section 3.3(a) to purchase, or to repair or replace, the Hotel).

(b) If at any time before the Completion Date the Hotel or individual
component thereof suffers any Non-Casualty Loss, Construction Agent shall
(i) give prompt written notice of such occurrence and the date thereof to
Trustee and (ii) repair or replace the Hotel or component, as the case may
be. Construction Agent shall be entitled to reimbursement for amounts
expended to repair or replace the Hotel or component, as the case may be,
from Non-Casualty Recoveries, which proceeds shall be paid to Construction
Agent (x) first by Lessee in accordance with Section 9.2(c) of the Lease
and (y) after the proceeds received pursuant to clause (x) have been used
in accordance with this Section 3.3(b), by Trustee, which shall promptly
remit Non-Casualty Recoveries held by it to Construction Agent upon
delivery by Construction Agent to Trustee of written request for such
reimbursement; provided, however, that if an Event of Default has occurred
and is continuing, Trustee may retain such proceeds as cash collateral
(without releasing Construction Agent from its obligation under this
Section 3.3(b) to repair or replace the Hotel or individual component
thereof).

SECTION 3.4. Construction Documents. Construction Agent has entered into
the Construction Documents before the date hereof. Construction Agent shall
deliver to Trustee certified copies of the Construction Documents in which it
has a total payment obligation in excess of $1,000,000 ("Primary Construction
Contracts") promptly upon execution thereof. Without limiting Construction
Agent's obligations under Sections 3.1 and Section 3.7(a), Construction Agent
may, without the consent of Trustee, enter into any amendment, modification or
supplement to any such Primary Construction Contract.

SECTION 3.5. Construction Documents; Security Agreement and Collateral
Assignment of Primary Construction Contract. Subject to Section 3.4,
Construction Agent may perform any of its duties under this Construction Agency
Agreement by or through agents, contractors, employees or attorneys-in-fact, and
Construction Agent shall enter into such Construction Documents as Construction
Agent deems necessary or desirable; provided, however, that no such delegation
shall limit or reduce in any way Construction Agent's duties and obligations
under this Construction Agency Agreement. Contemporaneously with the execution
and delivery of this Construction Agency Agreement, Construction Agent will
execute and deliver to Trustee the Security Agreement and Collateral Assignment
of Primary Construction Contracts in the form of Exhibit A, pursuant to which
Construction Agent shall assign to Trustee, among other things, all of
Construction Agent's rights under and interest in the Primary Construction
Contracts. Construction Agent agrees that each of the Prime Construction
Contract and the Architect's Agreement contains an Acknowledgment of and Consent
to Security Agreement and Assignment, executed by the contractor party to such
agreement. Such acknowledgment and consent shall be in substantially the form of
Exhibit B or otherwise acceptable to Trustee.

SECTION 3.6. Environmental Matters. During the Construction Period,
Construction Agent shall (i) conduct its activities hereunder in compliance with
all Environmental Laws, keep all necessary permits, approvals, certificates,
licenses and other authorizations relating to environmental matters in effect
and remain in material compliance therewith, and handle all Hazardous Material
in compliance with all applicable Environmental Laws, except where such
noncompliance or failure to obtain authorizations is not reasonably likely to
have a Material Adverse Effect with respect to Trustee; (ii) as soon as possible
and in any event within ten days after the occurrence of any violation or
alleged violation of an Environmental Law the violation or alleged violation of
which could result in (x) Trustee or any Lender being exposed to criminal
sanctions or civil penalties, (y) remedial costs in excess of $2,000,000 or (z)
loss of perfected first priority security status of the Lien granted to Trustee
for the benefit of the Lenders by Lessee pursuant to the Lease, provide to
Trustee and each Lender a statement of an authorized officer setting forth the
details of such violation or alleged violation and the action which Construction
Agent proposes to take with respect thereto; (iii) promptly cure and have
dismissed with prejudice to the satisfaction of the Required Lenders any actions
and proceedings described in clause (ii) above; provided, however, that
Construction Agent may contest any such actions and proceedings pursuant to a
Permitted Contest; and (iv) provide such information and certifications which
Trustee or any Lender may reasonably request from time to time to evidence
compliance with this Section 3.6.

SECTION 3.7. Other Covenants of Construction Agent. Construction Agent
hereby covenants and agrees that it will:

(a) cause the design, engineering, identification, acquisition,
construction, installation, testing and placement into service of the Hotel
to be prosecuted diligently in accordance in all material respects with the
Plans and Specifications, all Applicable Laws, the terms and conditions of
any insurance policy required by the Lease to be maintained by Lessee and
good engineering, construction and other applicable industry standards, and
perform all of the duties and obligations of the owner or purchaser, as
appropriate, under the Construction Documents;

(b) cause all Liens on the Hotel or the Hotel Site, other than
Permitted Liens, to be promptly discharged;

(c) at all times during the construction, installation, testing and
placement into service of the Hotel, cause all record title to the Hotel to
be and remain vested in Trustee as collateral security; and

(d) furnish, upon request of Trustee, copies of any invoices relating
to the Hotel.

ARTICLE IV

PAYMENT OF FUNDS

SECTION 4.1. Funding of Hotel Costs. Any Advance made to Trustee to pay
Hotel Costs shall be made available to Construction Agent in accordance with the
Advance Request relating thereto and the terms of the Participation Agreement,
and Construction Agent will cause all such proceeds to be used only to pay Hotel
Costs. If, for any reason, the aggregate cost to complete construction of the
Hotel, including any amounts payable to Prime Contractor under the Construction
Documents, exceeds the sum of the then available Commitments allocable to the
Hotel under Section 2.2 of the Participation Agreement, then all such costs in
excess of such available Commitments including any value added tax, sales tax,
purchase tax or other similar taxes or duties, if any, shall be borne by
Construction Agent from its own funds. Any accrued interest that is due and
payable during the Construction Period and which is not paid by Lessee pursuant
to Section 3.1(a) of the Lease shall be paid by Construction Agent on behalf of
Trustee to the Agent for distribution pursuant to the terms of the Loan
Agreement.

ARTICLE V

CONSTRUCTION AGENCY EVENTS OF DEFAULT

SECTION 5.1. Construction Agency Events of Default. If any one or more of
the following events (each a "Construction Agency Event of Default") shall
occur:

(a) Construction Agent uses funds advanced by Trustee to Construction
Agent for Hotel Costs for purposes not permitted by this Construction
Agency Agreement;

(b) the Completion Date shall fail to occur for any reason on or prior
to the Construction Termination Date;

(c) Construction Agent shall fail to observe or perform in any
material respect any term, covenant or condition of this Construction
Agency Agreement (except those specified in clauses (a) and (b) above), and
such failure shall remain unremedied for a period of thirty (30) days after
receipt of written notice thereof;

(d) an Event of Default exists; or

(e) a material breach by Construction Agent shall have occurred under
the Construction Contracts and such failure or breach shall remain
unremedied for a period of thirty (30) days after receipt of written notice
thereof;

then, in any such event, and at any time thereafter so long as the same shall be
continuing, Trustee may at its option, in addition to the other rights and
remedies provided for in this Article, declare this Construction Agency
Agreement to be in default and, with written notice thereof to Construction
Agent, immediately terminate this Construction Agency Agreement, and upon the
giving of such notice, this Construction Agency Agreement shall terminate and
all obligations of Trustee under this Construction Agency Agreement shall cease;
provided, further, such termination shall be automatic and without notice to
Construction Agent upon the occurrence of a Lease Event of Default described in
Section 10.1(g) of the Lease. Construction Agent shall pay upon demand to
Trustee all costs, expenses, losses, expenditures and damages (including
attorneys' fees and the fees and expenses of any construction agent thereafter
appointed by Trustee from time to time) incurred by or on behalf of Trustee in
connection with any Construction Agency Event of Default, and the obligations of
Construction Agent under this sentence shall survive any termination of this
Construction Agency Agreement. Notwithstanding the foregoing, if a Construction
Agency Event of Default shall have occurred and be continuing, Trustee shall
have the right to require Construction Agent to purchase the Hotel for the then
outstanding applicable Lease Supplement Balance relating to the Hotel, plus an
amount equal to the accrued but unpaid interest on the Notes and all other
amounts then due and payable under the Lease and Notes (whereupon Trustee shall
convey title to the Hotel to Lessee in accordance with Section 5.3 of the
Lease). Payment by Construction Agent shall be in immediately available funds
and paid to Trustee on the date of purchase.

SECTION 5.2. Survival. The termination of this Construction Agency
Agreement pursuant to Section 5.1 shall in no event relieve Construction Agent
of (i) its liability and obligations hereunder which accrued prior to such
termination, all of which shall survive any such termination, or (ii) its
liability under Section 5.1, including, upon request, its obligation to purchase
the Hotel pursuant to Section 5.1.

SECTION 5.3. Remedies; Remedies Cumulative. No failure to exercise and no
delay in exercising, on the part of Trustee, any right, remedy, power or
privilege under this Construction Agency Agreement or under the other Operative
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege under this Construction Agency
Agreement preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges provided in this Construction Agency Agreement are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law or any
other rights, remedies, powers or privileges which the Trustee, the Agent or the
Lenders may have under any other Operative Document.

ARTICLE VI

MISCELLANEOUS

SECTION 6.1. Notices. All notices, consents, directions, approvals,
instructions, requests, demands and other communications required or permitted
by the terms hereof to be given to any Person shall be given in writing in the
manner provided in, shall be sent to the respective addresses set forth in, and
the effectiveness thereof shall be governed by the provisions of, Section 9.3 of
the Participation Agreement.

SECTION 6.2. Successors and Assigns. The terms and provisions of this
Construction Agency Agreement, and the respective rights and obligations
hereunder of Trustee, Construction Agent, Agent and the Lenders shall be binding
upon them and their respective successors, legal representatives and assigns
(including, in the case of Trustee, any Person to whom Trustee may transfer the
Hotel or any interest therein in accordance with the provisions of the Operative
Documents), and inure to their benefit and the benefit of their respective
permitted successors, legal representatives and assigns. Construction Agent
shall not assign any of its rights or, except as permitted by Section 2.6,
delegate any of its duties or obligations under this Construction Agency
Agreement without the prior written consent of Trustee, which consent may be
granted or withheld in Trustee's reasonable discretion.

SECTION 6.3. GOVERNING LAW. THIS CONSTRUCTION AGENCY AGREEMENT HAS BEEN
DELIVERED IN NEW YORK, AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF NEW YORK, INCLUDING ARTICLE
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE OF
LAWS AND CONFLICTS OF LAWS RULES OF SUCH STATE, EXCEPT TO THE EXTENT THAT THE
EXERCISE OF CERTAIN RIGHTS OR REMEDIES HEREUNDER OR UNDER THE OTHER OPERATIVE
DOCUMENTS MAY REQUIRE COMPLIANCE WITH GAMING LAWS.

SECTION 6.4. Amendments and Waivers. Subject to the restrictions set forth
in the Participation Agreement, Trustee and Construction Agent may from time to
time enter into written amendments, supplements or modifications hereto.

SECTION 6.5. Counterparts. This Construction Agency Agreement may be
executed on any number of separate counterparts, and by different parties on
different counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

SECTION 6.6. Severability. Any provision of this Construction Agency
Agreement prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

SECTION 6.7. Headings and Table of Contents. The headings and table of
contents contained in this Construction Agency Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

SECTION 6.8. Limitations of Recourse. In addition to the limitations on
liability, indemnities and other rights provided to the Bank and Trustee under
the Operative Documents, the parties hereto agree that the Bank shall have no
personal liability whatsoever to Construction Agent or its successors and
assigns for any claim based on or in respect of this Construction Agency
Agreement or any of the other Operative Documents or arising in any way from the
transactions contemplated hereby or thereby; provided, however, that the Bank
shall be liable in its individual capacity (a) for its own willful misconduct or
gross negligence (or negligence in the handling of funds), (b) for liabilities
that may result from the incorrectness of any representation or warranty
expressly made by it in its individual capacity in Section 4.3 of the
Participation Agreement or from the failure of the Bank to perform its covenants
and agreements set forth in Section 6.1(a) of the Participation Agreement, or
(c) for any Tax based on or measured by any fees, commission or compensation
received by it for acting as Trustee as contemplated by the Operative Documents.
It is understood and agreed that, except as provided in the preceding proviso:
(i) the Bank shall have no personal liability under any of the Operative
Documents as a result of acting pursuant to and consistent with any of the
Operative Documents; (ii) all obligations of the Bank to Construction Agent are
solely nonrecourse obligations (with liability payable solely out of the Trust
Estate) except to the extent that it has received payment from others; (iii) all
such personal liability of the Bank is expressly waived and released as a
condition of, and as consideration for, the execution and delivery of the
Operative Documents by the Bank; and (iv) this Construction Agency Agreement is
executed and delivered by the Bank solely in the exercise of the powers
expressly conferred upon it as Trustee under the Trust Agreement.

SECTION 6.9. Knowledge of Trustee and Bank. For all purposes of this
Construction Agency Agreement and the other Operative Documents, in the absence
of actual knowledge of an officer in the Corporate Trust Department of Bank,
Trustee and the Bank shall not be deemed to have knowledge of any Construction
Agency Event of Default unless Trustee or the Bank receives written notice
thereof given by or on behalf of a Lender, Construction Agent or Lessee.

[Signature pages follow]

IN WITNESS WHEREOF, the parties hereto have caused this Construction Agency
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.

BL DEVELOPMENT CORP.

By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer

HANCOCK BANK,
not in its individual capacity,
except as expressly set forth
herein, but solely as Trustee

By: /s/ C. H. GIBBONS
Name: C. H. Gibbons
Title: Vice President & Trust Officer

[EXHIBIT A
TO
CONSTRUCTION AGENCY AGREEMENT]

[Form of]
Security Agreement and
Collateral Assignment of Construction Documents

FOR VALUE RECEIVED, and to secure the performance by BL DEVELOPMENT
CORP., a Minnesota corporation (hereinafter referred to as "Assignor"), of all
of its obligations under that certain Construction Agency Agreement dated as of
May 10, 1996 (as the same may be amended, modified or restated from time to
time, and together with all substitutions therefor and replacements thereof, the
"Agreement") between Construction Agent and Hancock Bank, not in its individual
capacity but solely as Trustee ("Secured Party"), and under the other Operative
Documents, Assignor does hereby assign and grant a security interest in and Lien
upon, to Secured Party and its successors and assigns, all of Assignor's right,
title and interest in and to the following, now or hereafter existing (referred
to collectively herein as the "Construction Agency Collateral"):

(i) all engineering, procurement and construction contracts
relating to the design, engineering, identification, acquisition,
construction, installation, testing and placement into service of the
Hotel, as each such agreement may heretofore or hereafter be entered
into, supplemented, modified or amended from time to time
(collectively, the "Construction Contracts");

(ii) all plans, specifications and drawings of any and every kind
heretofore or hereafter prepared for use in connection with the
design, engineering, identification, acquisition, construction,
installation, testing and/or placement into service of the Hotel, and
any supplements, amendments or modifications thereto (collectively,
the "Plans");

(iii) all building and other permits, licenses and government
approvals which are necessary or useful to the commencement and
completion of the design, engineering, identification, acquisition,
construction, installation, testing and/or placement into service of
the Hotel, or otherwise relate thereto, heretofore or hereafter
obtained or applied for by or on behalf of Assignor or any architects,
engineers or contractors working on any aspect thereof, and any
deposits made in connection therewith (collectively, the "Permits");
and

(iv) all proceeds of any of the foregoing;

provided, however, that Secured Party shall have no obligation or liability of
any kind under or with respect to the Construction Contracts, the Permits, the
Plans or the other Construction Agency Collateral, either before or after its
exercise of any rights hereby granted to it, and Assignor agrees to save and
hold Secured Party harmless of and from, and to indemnify it against, any and
all such obligations and liabilities, contingent or otherwise.

All capitalized but undefined terms used herein shall have the same
respective meanings as in Appendix 1 to the Participation Agreement (as defined
in the Construction Agency Agreement).

This Security Agreement and Collateral Assignment of Construction
Documents shall inure to the benefit of the Secured Party and its successors and
assigns, and shall be binding upon the Assignor and its successors and assigns,
and shall continue in full force and effect until all obligations, liabilities
and indebtedness of any kind now or hereafter due the Secured Party from the
Assignor under or with respect to the Construction Agency Agreement or any of
the other Operative Documents, or which are otherwise secured hereby, whether
now existing or hereafter arising or incurred (collectively, the "Liabilities"),
have been fully paid, performed and satisfied, at which time this Security
Agreement and Collateral Assignment of Construction Documents will terminate.
Secured Party will not exercise any of its rights hereunder until a Construction
Agency Event of Default occurs.

For purposes of completing the design, engineering, identification,
acquisition, construction, installation, testing and/or placement into service
of the Hotel after a Construction Agency Event of Default shall have occurred,
the Secured Party may, at its option, further assign its right, title and
interest in the Construction Agency Collateral without the consent of Assignor,
any contractor or any other Person.

This Security Agreement and Collateral Assignment of Construction
Documents is a present security interest and collateral assignment; provided,
however, that the Secured Party shall not have the right to undertake completion
of the design, engineering, identification, acquisition, construction,
installation, testing and/or placement into service of the Hotel or directly to
enforce the provisions of any Construction Contract until a Construction Agency
Event of Default has occurred and is continuing; provided, further, that in such
event, the Secured Party shall have the right, but not the obligation, to
undertake the same. During the continuance of any such Construction Agency Event
of Default, the Secured Party may (but shall not be required to), without
affecting any other right or remedy available to it, exercise its rights under
this Security Agreement and Collateral Assignment of Construction Documents as
provided herein in any manner permitted by law. If any notice to Assignor is
required by law, such notice shall be deemed commercially reasonable if given at
least 10 days prior to the date of intended action.

Assignor represents and warrants that its principal place of business
and chief executive office, as such terms are used in Section 9-103(3) of the
UCC, are each located at 13705 First Avenue North; Plymouth, Minnesota 55441.

Assignor represents and warrants that upon the filing of an
appropriate UCC financing statement with the Secretary of State of Mississippi
and Minnesota, in the office of the Chancery Clerk of Tunica County,
Mississippi, the Secured Party will have an enforceable, perfected first
priority security interest of record in the Construction Agency Collateral as
against all Persons, including Assignor and its creditors.

Assignor, at its own cost and expense, will cause all financing
statements (including precautionary financing statements), fixture filings and
other documents, to be recorded or filed at such places and times in such
manner, and will take all such other actions or cause such actions to be taken,
as may be reasonably requested by the Secured Party in order to establish,
preserve, protect and perfect the first and prior Lien of the Secured Party to
the Construction Agency Collateral.

This Security Agreement and Collateral Assignment of Construction
Documents may be effectively waived, modified, amended or terminated only by a
written instrument executed by the Secured Party. Any waiver by the Secured
Party shall be effective only with respect to the specific instance described
therein. Delay or course of conduct shall not constitute a waiver of any right
or remedy of the Secured Party.

THIS SECURITY AGREEMENT AND COLLATERAL ASSIGNMENT OF CONSTRUCTION
DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
OF SUCH STATE PROVIDED THAT MATTERS RELATING TO PERFECTION AND THE EFFECT OF
PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST GRANTED HEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH ARTICLE 9-103-(1)(b) OF THE UCC.

IN WITNESS WHEREOF, Assignor has caused this Security Agreement and
Collateral Assignment of Construction Documents to be executed by its duly
authorized officer as of this _____ day of __________________, 1996.

BL DEVELOPMENT CORP.,
as Assignor

By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer

[EXHIBIT B
TO
CONSTRUCTION AGENCY AGREEMENT]

[Form of]
Acknowledgment of and Consent to
Security Agreement and
Collateral Assignment of Primary Construction Contract

____________________________ (the "Company") hereby:

(a) acknowledges and consents to the assignment by BL Development
Corp. ("Assignor") to [Name of Trust] ("Assignee") of all of
Assignor's right, title and interest in, to and under the
_____________ Agreement dated ________, 19__ (the "Assigned
Agreement") between Assignor and Company pursuant to the Security
Agreement and Collateral Assignment of Construction Documents dated as
of ___, ____________1996 (as amended or otherwise modified from time
to time, the "Security Agreement") from Assignor to Assignee;

(b) confirms that the Company has reviewed the Security
Agreement and this instrument and does not object to the terms
thereof;

(c) agrees that Assignee may, without affecting any other right
or remedy available to it, exercise its rights under the Security
Agreement and the Assigned Agreement as provided in the Security
Agreement or in any manner permitted by law and further agrees that it
will not exercise any right it may have under the Assigned Agreement
to cancel, suspend or terminate the Assigned Agreement without first
giving the Secured Party notice of any default of Assignor thereunder
and the opportunity to cure any such monetary default (which cure
period shall be the cure period in the Assigned Agreement, but in any
event at least 60 days), or if such default is non-monetary, to
rectify to the Company's reasonable satisfaction the effect upon the
Company of any such non-monetary default by Assignor;

(d) agrees not to place any Lien on the Hotel; and

(e) agrees to look solely to Construction Agent and that it shall
have no recourse to Assignee with respect to any claims arising under
the Construction Contract, except to the extent that Assignee has
assumed in writing any obligations under the Construction Contract.

Dated: ______________, 19___

[NAME OF COMPANY]

By:_______________________________
Name:_____________________________
Title:____________________________

[EXECUTION COPY]

GUARANTY

dated as of May 10, 1996

GRAND CASINOS, INC.
AND ITS SUBSIDIARIES NAMED HEREIN

in favor of

THE BENEFICIARIES NAMED HEREIN

TABLE OF CONTENTS

Section Page

1. Guaranty . . . . . . . . . . . . . . . . . . . . . 1

2. Guarantor's Guaranteed Obligations Unconditional . 3

3. Waiver and Agreement . . . . . . . . . . . . . . . 5

4. Assignment . . . . . . . . . . . . . . . . . . . . 6

5. Waiver of Subrogation. . . . . . . . . . . . . . . 7

6. Rights of the Beneficiaries. . . . . . . . . . . . 7

7. Term of Guaranty . . . . . . . . . . . . . . . . . 7

8. Agreement of Guarantor . . . . . . . . . . . . . . 8

9. Representations and Warranties . . . . . . . . . . 8

10. Completion Guaranty. . . . . . . . . . . . . . . . 9

11. Further Assurances . . . . . . . . . . . . . . . . 9

12. Notices, Etc . . . . . . . . . . . . . . . . . . . 9

13. Amendments, Etc. . . . . . . . . . . . . . . . . . 10

14. Severability . . . . . . . . . . . . . . . . . . . 10

15. Choice of Law. . . . . . . . . . . . . . . . . . . 10

16. Successors and Assigns . . . . . . . . . . . . . . 10

GUARANTY

THIS GUARANTY (this "Guaranty"), dated as of May 10, 1996, made by GRAND
CASINOS, INC., a Minnesota corporation ("Parent"), and each of the undersigned
corporations (each, including Parent, a "Guarantor"), in favor of the
Beneficiaries named below pursuant to that certain Participation Agreement,
dated as of May 10, 1996 (the "Participation Agreement"), among BL Development
Corp., a Minnesota corporation, as Lessee ("Lessee") and as Construction Agent,
HANCOCK BANK, not in its individual capacity but solely as Lessor and Trustee,
BA Leasing & Capital Corporation, a California corporation, as Arranger and
Agent, the Co-Agents identified therein, the Lead Manager, and the Lenders
identified therein. Capitalized terms used and not otherwise defined in this
Guaranty shall have the meaning assigned to such term in Appendix 1 to the
Participation Agreement.

WHEREAS, Parent is the indirect beneficial owner of all the issued and
outstanding capital stock of Lessee and Construction Agent; and

WHEREAS, pursuant to the Lease and the Participation Agreement, Trustee has
agreed, on behalf of the Trust and each Lender, to purchase the Hotel and
Equipment and lease such Hotel and Equipment to Lessee pursuant to the Lease;
and

WHEREAS, each Guarantor is entering into this Guaranty in order to induce
the parties to the Participation Agreement to enter into the transactions
contemplated thereby;

NOW, THEREFORE, each Guarantor covenants and agrees as follows:

SECTION 1. Guaranty. Each Guarantor jointly and severally hereby
absolutely, unconditionally and irrevocably guarantees to Trustee (both
individually and in its capacity as Trustee), Agent, each Lender and each other
Indemnitee and their respective successors and assigns (individually, a
"Beneficiary" and, collectively, the "Beneficiaries"):

(a) the due, punctual and full payment of all amounts (including
amounts payable as damages in case of default and any amounts due pursuant
to Article VII of the Participation Agreement and Section 3.2 and Article
IV of the Construction Agency Agreement) payable by Lessee or Construction
Agent pursuant to the Lease, the Construction Agency Agreement, the
Participation Agreement, or any other Operative Document to which Lessee or
Construction Agent is or is to be a party, whether such obligations now
exist or arise hereafter, as and when the same shall become due and payable
in accordance with the terms thereof (including in all cases all such
amounts which would become due but for the operation of the automatic stay
under Section 362(a) of the United States Bankruptcy Code, 11 U.S.C.
362(a), the operation of Sections 502(b) and 506(b) of the United States
Bankruptcy Code, 11 U.S.C. 502(b) and 506(b) or the commencement or
operation of any other bankruptcy, insolvency, reorganization or like
proceeding relating to Lessee or Construction Agent); and

(b) the due, prompt and faithful performance of, and compliance with,
all other obligations, covenants, terms, conditions and undertakings of
Lessee contained in the Participation Agreement, the Lease or any other
Operative Documents to which Lessee is or may be a party in accordance with
the terms thereof or of Construction Agent contained in the Participation
Agreement

(such obligations referred to in clauses (a) and (b) above being hereinafter
called the "Guaranteed Obligations"); provided, however, that such Guarantor
shall be liable under this Guaranty only for the maximum amount of such
liability that can be hereby incurred without rendering this Guaranty, as it
relates to such Guarantor, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer, and not for any greater amount.

Each Guarantor further will pay any and all reasonable costs and expenses
(including reasonable fees and disbursements of counsel, which may include
allocated costs of staff counsel of any Beneficiary) that may be paid or
incurred by any Beneficiary in collecting any Guaranteed Obligations or in
preserving or enforcing any rights under this Guaranty or under the Guaranteed
Obligations, it being understood that no Guarantor shall be obligated to pay
hereunder to the extent that Lessee has made such corresponding payments under
the Operative Documents.

This Guaranty constitutes an unconditional and irrevocable guaranty of
payment, performance and compliance and not of collectability, is in no way
conditioned or contingent upon any attempt to collect from or enforce
performance or compliance by Lessee or Construction Agent or upon any other
event, contingency or circumstance whatsoever, and shall be binding upon and
against each Guarantor without regard to the validity or enforceability of the
Lease, the Participation Agreement, the Construction Agency Agreement or any
other Operative Document.

If for any reason whatsoever Lessee or Construction Agent shall fail or be
unable duly, punctually and fully to pay such amounts as and when the same shall
become due and payable or to perform or comply with any such obligation,
covenant, term, condition or undertaking, each Guarantor will immediately pay or
cause to be paid such amounts to the Person or Persons entitled to receive the
same under the terms of the Operative Documents, as appropriate, together with
interest at the Overdue Rate on any amount due and owing from the date the same
shall have become due and payable to the date of payment, or perform or comply
with any such obligation, covenant, term, condition or undertaking or cause the
same to be performed or complied with.

SECTION 2. Guarantor's Guaranteed Obligations Unconditional. The covenants
and agreements of each Guarantor set forth in this Guaranty shall be primary
obligations of such Guarantor, and shall be continuing, absolute and
unconditional, shall not be subject to any counterclaim, setoff, deduction,
diminution, abatement, recoupment, suspension, deferment, reduction or defense
(other than full and strict compliance by such Guarantor with its obligations
hereunder), whether based upon any claim that Lessee, Construction Agent, such
Guarantor, or any other Person may have against any Beneficiary or any other
Person or otherwise, and shall remain in full force and effect without regard
to, and shall not be released, discharged or in any way affected by, any
circumstance or condition whatsoever (whether or not such Guarantor, Lessee or
Construction Agent shall have any knowledge or notice thereof) including,
without limitation:

(a) any amendment, modification, addition, deletion, supplement or
renewal to or of or other change in the Guaranteed Obligations, the Lease,
the Construction Agency Agreement or any Operative Document, or any of the
agreements referred to in any thereof, or any other instrument or agreement
applicable to any such agreements or any of the parties to such agreements,
or to the Hotel, or any assignment, mortgage or transfer thereof or of any
interest therein, or any furnishing or acceptance of additional security
for, guaranty of or right of offset with respect to, any of the Guaranteed
Obligations; or the failure of any security or the failure of any
Beneficiary to perfect or insure any interest in any collateral;

(b) any failure, omission or delay on the part of Lessee, Construction
Agent, any Beneficiary or any other Person to conform or comply with any
term of any instrument or agreement referred to in clause (a) above;

(c) any waiver, consent, extension, indulgence, compromise, release or
other action or inaction under or in respect of any instrument, agreement,
guaranty, right of offset or security referred to in clause (a) above or
any obligation or liability of Lessee, Construction Agent or any
Beneficiary, or any exercise or non-exercise by any Beneficiary or any
other Person of any right, remedy, power or privilege under or in respect
of any such instrument, agreement, guaranty, right of offset or security or
any such obligation or liability;

(d) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or similar proceeding with respect
to Lessee or Construction Agent, any Beneficiary or any other Person, or
any of their respective properties or creditors, the imposition of any stay
or injunction in connection with any such proceeding, or any action taken
by any trustee or receiver or by any court in any such proceeding;

(e) any limitation on (i) the liability or obligations of Lessee,
Construction Agent, such Guarantor or any other Person under any agreement
or instrument referred to in clause (a) above, or (ii) the Guaranteed
Obligations, any collateral security for the Guaranteed Obligations;

(f) any other guaranty of the Guaranteed Obligations or any discharge,
termination, cancellation, frustration, irregularity, invalidity or
unenforceability, in whole or in part, of any of the foregoing, or any
other agreement or instrument, referred to in clause (a) above or any term
of any thereof;

(g) any defect in the title, compliance with specifications,
condition, design, operation or fitness for use of, or any damage to or
loss or destruction of, or any interruption or cessation in the
construction or use of the Hotel by Lessee, Construction Agent or any other
Person for any reason whatsoever (including any governmental prohibition or
restriction, condemnation, requisition, seizure or any other act on the
part of any governmental or military authority, or any act of God or of the
public enemy) regardless of the duration thereof (even though such duration
would otherwise constitute a frustration of the Lease or the Construction
Agency Agreement), whether or not resulting from accident and whether or
not without fault on the part of Lessee, Construction Agent, or any other
Person;

(h) any merger or consolidation of Lessee, Construction Agent or such
Guarantor into or with any other Person or any sale, lease or transfer of
any of the assets of Lessee, Construction Agent or such Guarantor to any
other Person;

(i) any change in the ownership of any shares of capital
stock of Lessee or Construction Agent or any corporate change in
Lessee or Construction Agent;

(j) a failure of the Lease to become effective;

(k) any assignments, transfers or subleases of the Lease or any of
Lessee's rights thereunder including an assignment, transfer or sublease
pursuant to Article IV of the Lease; or

(l) any other occurrence or circumstance whatsoever, whether similar
or dissimilar to the foregoing and any other circumstance that might
otherwise constitute a legal or equitable defense or discharge of the
liabilities of a guarantor or surety or that might otherwise limit recourse
against such Guarantor.

The unconditional obligations of each Guarantor set forth herein constitute
the full recourse obligations of such Guarantor enforceable against it to the
full extent of all its assets and properties.

SECTION 3. Waiver and Agreement. Each Guarantor waives any and all notice
of the creation, renewal, extension or accrual of any of the Guaranteed
Obligations and notice of or proof of reliance by any Beneficiary upon this
Guaranty or acceptance of this Guaranty, and the Guaranteed Obligations, and any
of them, shall conclusively be deemed to have been created, contracted or
incurred in reliance upon this Guaranty. Each Guarantor unconditionally waives,
to the extent permitted by law: (a) acceptance of this Guaranty and proof of
reliance by any Beneficiary hereon; (b) notice of any of the matters referred to
in Section 2, or any right to consent or assent to any thereof; (c) all notices
that may be required by statute, rule of law or otherwise, now or hereafter in
effect, to preserve intact any rights against such Guarantor, including without
limitation, any demand, presentment, protest, proof or notice of nonpayment
under any agreement or instrument referred to in clause (a) of Section 2, and
notice of default or any failure on the part of Lessee to perform and comply
with any covenant, agreement, term or condition of any agreement or instrument
referred to in clause (a) of Section 2; (d) any right to the enforcement,
assertion or exercise against Lessee or Construction Agent of any right, power,
privilege or remedy conferred in any agreement or instrument referred to in
clause (a) of Section 2 or otherwise; (e) any requirement of diligence on the
part of any Person; (f) any requirement of any Beneficiary to take any action
whatsoever, to exhaust any remedies or to mitigate the damages resulting from a
default by any Person under any agreement or instrument referred to in clause
(a) of Section 2; (g) any notice of any sale, transfer or other disposition by
any Person of any right under, title to or interest in any agreement or
instrument referred to in clause (a) of Section 2 or the Collateral; and (h) any
other circumstance whatsoever that might otherwise constitute a legal or
equitable discharge, release or defense of a guarantor or surety, or that might
otherwise limit recourse against such Guarantor.

Each Guarantor agrees that this Guaranty shall be automatically reinstated
if and to the extent that for any reason any payment by or on behalf of Lessee
or Construction Agent is rescinded or must be otherwise restored by any of the
Beneficiaries, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise.

Each Guarantor further agrees that, without limiting the generality of this
Guaranty, if a Lease Event of Default or Construction Agency Event of Default
shall have occurred and be continuing and Trustee or its assignee is prevented
by applicable law from exercising its remedies under the Lease or if the
Construction Agency Agreement or any agreement or instrument referred to in
clause (a) of Section 2 shall be terminated as a result of the rejection or
disaffirmance thereof by any trustee, receiver or liquidating agent of Lessee,
Construction Agent, or any other Person upon the insolvency, bankruptcy or
reorganization of Lessee, Construction Agent or such other Person, such
Guarantor's Guaranteed Obligations hereunder shall continue to the same extent
as if Trustee had exercised any remedies available under the Lease or the
Construction Agency Agreement, and any such agreement or instrument had not been
rejected or disaffirmed.

SECTION 4. Assignment. Each Guarantor hereby acknowledges that it is
contemplated that on the date hereof the Trustee will assign to the Agent for
the benefit of the Lenders all of the Trustee's rights, title and interest in
and to this Guaranty in respect of any Guaranteed Obligations hereunder which
are part of the Trust Estate and such Guarantor hereby agrees to such
assignment.

SECTION 5. Waiver of Subrogation. Each Guarantor hereby irrevocably waives
any claim or other rights which it may now or hereafter acquire against Lessee
or Construction Agent that arise from the existence, payment, performance or
enforcement of such Guarantor's obligations under this Guaranty or any other
Operative Document, including any right of subrogation, reimbursement,
exoneration, or indemnification, any right to participate in any claim or remedy
of Beneficiaries against Lessee or Construction Agent or any Collateral which
Agent now has or hereafter acquires, whether or not such claim, remedy or right
arises in equity or under contract, statute or common law, including the right
to take or receive from Lessee or Construction Agent, directly or indirectly, in
cash or other property or by set-off or in any manner, payment or security on
account of such claim or other rights. If any amount shall be paid to any
Guarantor in violation of the preceding sentence and the Guaranteed Obligations
shall not have been indefeasibly paid in cash, such amount shall be deemed to
have been paid to such Guarantor for the benefit of, and held in trust for, the
Beneficiaries, and shall forthwith be paid to Agent to be credited and applied
pursuant to the terms of the Loan Agreement and the Trust Agreement. Each
Guarantor acknowledges that it will receive substantial economic benefits from
the financing arrangements contemplated by the Operative Documents and that the
waiver set forth in this Section 5 is knowingly made in contemplation of such
benefits. Each Guarantor hereby absolutely, unconditionally and irrevocably
waives and agrees not to assert or take advantage of any defense based upon an
election of remedies by Agent, including an election to proceed by non-judicial
rather than judicial foreclosure, which destroys or impairs any right of
subrogation of such Guarantor or the right of such Guarantor to proceed against
any Person for reimbursement or both.

SECTION 6. Rights of the Beneficiaries. This Guaranty is made for the
benefit of, and shall be enforceable by, each Beneficiary as its interest may
appear or by the Agent on behalf of the Beneficiaries.

SECTION 7. Term of Guaranty. This Guaranty and all guaranties, covenants
and agreements of each Guarantor contained herein shall continue in full force
and effect and shall not be discharged until such time as all the Guaranteed
Obligations shall be indefeasibly paid in full in cash and all the agreements of
such Guarantor hereunder and the Lessee and the Construction Agent hereunder and
under the Lease, the Participation Agreement and the other Operative Documents
shall have been duly performed. If, as a result of any bankruptcy, dissolution,
reorganization, insolvency, arrangement or liquidation proceedings (or
proceedings similar in purpose or effect), or if for any other reason any
payment received by any Beneficiary in respect of the Guaranteed Obligations is
rescinded or must be returned by such Beneficiary, this Guaranty shall continue
to be effective as if such payment had not been made and, in any event, as
provided in the preceding sentence.

SECTION 8. Agreement of Guarantor. Each Guarantor assumes the
responsibility for being and keeping itself informed of the financial condition
of Lessee and Construction Agent and of all other circumstances with respect to
any of the Guaranty Obligations, and such Guarantor agrees that no Beneficiary
shall be under any duty to advise such Guarantor of information known to it
regarding such condition or any such circumstance; whether or not any
Beneficiary has a reasonable opportunity to communicate such information or has
reason to believe that any such information is unknown to such Guarantor or
materially increases the risk to such Guarantor beyond the risk such Guarantor
intends to assume hereunder.

SECTION 9. Representations and Warranties. Each Guarantor
(other than Parent) hereby represents and warrants to each Beneficiary
as follows:

(a) Such Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation, and has full corporate power and authority to enter into
this Guaranty and the other Operative Documents to which it is a party and
to carry out the transactions contemplated hereby and thereby.

(b) The execution and delivery by such Guarantor of this Guaranty and
the other Operative Documents to which it is a party and the consummation
by such Guarantor of the transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate action of such Guarantor.
This Guaranty and the other Operative Documents to which such Guarantor is
a party have each been duly executed and delivered by such Guarantor and
each constitutes the legal, valid and binding obligation of such Guarantor
enforceable against such Guarantor in accordance with its terms, subject to
the effect of bankruptcy, insolvency, reorganization, moratorium or similar
laws at the time in effect affecting the rights of creditors generally and
subject to the effects of general principles of equity (regardless of
whether considered in a proceeding in law or equity).

(c) The execution and delivery of this Guaranty and the other
Operative Documents to which such Guarantor is a party and the consummation
by such Guarantor of the transactions contemplated hereby do not (i)
contravene or result in a default under such Guarantor's articles of
incorporation or bylaws, (ii) contravene or result in a default under any
contractual restriction, law or governmental regulation or court decree or
order binding on such Guarantor, (iii) require any filings, consents or
authorizations which have not been duly obtained or (iv) result in the
creation or imposition of any Lien on such Guarantor's properties, other
than Permitted Liens.

SECTION 10. Completion Guaranty. Each Guarantor jointly and severally
hereby absolutely, unconditionally and irrevocably guarantees to each
Beneficiary that if Construction Agent fails to cause the Completion Date of the
Hotel to occur on or before the Construction Termination Date, such Guarantor
shall within five days thereafter, with the written consent of Construction
Agent, acknowledging that it will not be released thereby from any obligations
under the Operative Documents, which consent may be waived by Trustee, notify
Trustee that such Guarantor will perform in place of Construction Agent all
obligations of Construction Agent then remaining unperformed to cause title to
the Hotel to be conveyed to Trustee and to complete the construction and
installation of the Hotel in accordance with the provisions of the Construction
Agency Agreement and the Participation Agreement, including any obligation of
Construction Agent under the Construction Agency Agreement or any other
Operative Document to pay to Trustee, the Prime Contractor or any other Person
at any time any amount which Trustee may determine is required to complete
installation and construction of the Hotel or to reimburse Trustee, any Lender
or any Person for any amount incurred at any time by Trustee, such Lender or
such Person in performing such obligations on behalf of Construction Agent as
permitted by the Construction Agency Agreement or the other Operative Documents.

SECTION 11. Further Assurances. Each Guarantor hereby agrees to execute and
deliver all such instruments and take all such action as any Beneficiary may
from time to time reasonably request in order to fully effectuate the purposes
of this Guaranty.

SECTION 12. Notices, Etc. All notices, demands, requests, consents,
approvals and other instruments hereunder shall be in writing and shall be
deemed to have been properly given if given as provided for in Section 9.3 of
the Participation Agreement.

SECTION 13. Amendments, Etc. No amendment to or waiver of any provision of
this Guaranty, nor consent to any departure by any Guarantor herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Beneficiaries, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

SECTION 14. Severability. In case any provisions of this Guaranty or any
application thereof shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions and statements and any
other application thereof shall not in any way be affected or impaired thereby.
To the extent permitted by law, each Guarantor hereby waives any provision of
law that renders any term or provision hereof invalid or unenforceable in any
respect.

SECTION 15. Choice of Law. THIS GUARANTY HAS BEEN DELIVERED IN AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS GUARANTY SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF NEW YORK,
INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING
ALL OTHER CHOICE OF LAWS AND CONFLICTS RULES OF SUCH STATE, EXCEPT TO THE EXTENT
THAT THE EXERCISE OF CERTAIN RIGHTS OR REMEDIES HEREUNDER OR UNDER THE OTHER
OPERATIVE DOCUMENTS MAY REQUIRE COMPLIANCE WITH GAMING LAWS.

SECTION 16. Successors and Assigns. This Guaranty shall be binding upon
each Guarantor and its successors, transferees and assigns and inure to the
benefit of and be enforceable by the respective successors, transferees, and
assigns of the Beneficiaries; provided, however, that such Guarantor may not
delegate any of its obligations hereunder without the prior written consent of
the Trustee and each Lender.

[Signature page follows]

IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed
as of the date first above written.

GRAND CASINOS, INC.

By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer

GRAND CASINOS RESORTS, INC.

By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer

GRAND CASINOS OF MISSISSIPPI, INC. - GULFPORT

By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer

GRAND CASINOS OF MISSISSIPPI, INC. - BILOXI

By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer

GRAND CASINOS OF BILOXI THEATER, INC.

By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer

GCI BILOXI HOTEL ACQUISITION CORPORATION

By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer

GCI GULFPORT HOTEL ACQUISITION CORPORATION

By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer

MILLE LACS GAMING CORPORATION

By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer

GRAND CASINOS OF LOUISIANA, INC.
TUNICA - BILOXI

By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer

GRAND CASINOS OF LOUISIANA, INC. - COUSHATTA

By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer

GCA ACQUISITION SUBSIDIARY, INC.

By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer

[EXECUTION COPY]

TUNICA
(MISSISSIPPI)
RESORT HOTEL

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

Dated as of May 10, 1996
BY AND AMONG

BL DEVELOPMENT CORP.,
a Minnesota corporation,
as Trustor

HANCOCK BANK,
not in its individual capacity,
but solely as Lessor and Trustee pursuant
to the Lease and Trust Agreement,
as Ground Lease Trustor

JAMES R. McILWAIN
an individual,
as Trustee

and

BA LEASING & CAPITAL CORPORATION, a
California corporation, in its capacity as Agent,
as Beneficiary

*******************************************************************************

THIS INSTRUMENT IS TO BE FILED AND INDEXED IN THE REAL ESTATE RECORDS
OF TUNICA COUNTY, MISSISSIPPI UNDER THE NAMES OF BL DEVELOPMENT CORP.
(FEDERAL I.D. NO. 41-1754530) AS "TRUSTOR" AND HANCOCK BANK (FEDERAL I.D.
NO. [640169065]) AS "TRUSTOR."

THIS IS A FIXTURE FILING AND THE RECORD OWNER OF THE PROPERTY LOCATED IN
THE COUNTY OF TUNICA, STATE OF MISSISSIPPI IS BL DEVELOPMENT CORP.

THIS INSTRUMENT IS A "CONSTRUCTION MORTGAGE" AS THAT TERM IS DEFINED IN
SECTION 75-9-313 OF THE MISSISSIPPI CODE OF 1972, AS AMENDED, AND SECURES AN
OBLIGATION INCURRED FOR THE CONSTRUCTION OF AN IMPROVEMENT UPON LAND.

INDEXING INSTRUCTIONS:

This instrument affects real and personal property situated, lying and being in
the County of Tunica, State of Mississippi, known as follows:
Part of the Northwest 1/4 and Southwest 1/4 of

Section: 5
Township: 3 South
Range: 10 West

TABLE OF CONTENTS

Section Page

ARTICLE I

COVENANTS OF TRUSTORS

1.1 Performance of Operative Documents . . . . . . . . . . . . . . 9
1.2 General Representations, Covenants and Warranties. . . . . . . 9
1.3 Compliance with Legal Requirements . . . . . . . . . . . . . . 9
1.4 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.5 Insurance/Casualty . . . . . . . . . . . . . . . . . . . . . . 10
1.6 Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.7 Care of Trust Estate . . . . . . . . . . . . . . . . . . . . . 10
1.8 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . 10
1.9 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.10 Treatment of Ground Lease in Bankruptcy. . . . . . . . . . . . 11
1.11 Rejection of Ground Lease by Trustor . . . . . . . . . . . . . 11
1.12 Assignment of Claims to Beneficiary. . . . . . . . . . . . . . 12
1.13 Intentionally Omitted. . . . . . . . . . . . . . . . . . . . . 12
1.14 Ground Lease Trustor's Acquisition of Interest in Leased
Parcels . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.15 Intentionally Omitted. . . . . . . . . . . . . . . . . . . . . 12
1.16 Further Encumbrance. . . . . . . . . . . . . . . . . . . . . . 12
1.17 Intentionally Omitted. . . . . . . . . . . . . . . . . . . . . 12
1.18 Further Assurances . . . . . . . . . . . . . . . . . . . . . . 12
1.19 Intentionally Omitted. . . . . . . . . . . . . . . . . . . . . 13
1.20 Assignment of Rents and Leases . . . . . . . . . . . . . . . . 13
1.21 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.22 Beneficiary's Cure of Trustors' Default. . . . . . . . . . . . 13
1.23 Compliance with Permitted Lien Agreements. . . . . . . . . . . 14
1.24 Use of Hotel Site. . . . . . . . . . . . . . . . . . . . . . . 14
1.25 Taxes on Beneficiary . . . . . . . . . . . . . . . . . . . . . 14
1.26 Additional Taxes . . . . . . . . . . . . . . . . . . . . . . . 14
1.27 Defense of Actions . . . . . . . . . . . . . . . . . . . . . . 14
1.28 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.29 Future Advances. . . . . . . . . . . . . . . . . . . . . . . . 14
1.30 Security Agreement and Financing Statements. . . . . . . . . . 14

ARTICLE II

CORPORATE LOAN PROVISIONS

2.1 Interaction with other Operative Documents.. . . . . . . . . . 16

ARTICLE III

DEFAULTS

3.1 Event of Default . . . . . . . . . . . . . . . . . . . . . . . 16

ARTICLE IV

REMEDIES

4.1 Acceleration of Maturity . . . . . . . . . . . . . . . . . . . 16
4.2 Protective Advances. . . . . . . . . . . . . . . . . . . . . . 16
4.3 Institution of Equity Proceedings. . . . . . . . . . . . . . . 17
4.4 Beneficiary's Power of Enforcement . . . . . . . . . . . . . . 17
4.5 Beneficiary's Right to Enter and Take Possession, Operate
and Apply Income. . . . . . . . . . . . . . . . . . . . . 18
4.6 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.7 Purchase by Beneficiary. . . . . . . . . . . . . . . . . . . . 19
4.8 Waiver of Appraisement, Valuation, Stay, Extension and
Redemption Laws . . . . . . . . . . . . . . . . . . . . . 19
4.9 Receiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.10 Suits to Protect the Trust Estate. . . . . . . . . . . . . . . 20
4.11 Proofs of Claim. . . . . . . . . . . . . . . . . . . . . . . . 20
4.12 Deficiencies; Application of Monies by Beneficiary . . . . . . 20
4.13 Delay or Omission, No Waiver . . . . . . . . . . . . . . . . . 20
4.14 No Waiver of One Default to Affect Another . . . . . . . . . . 20
4.15 Discontinuance of Proceedings; Position of Parties Restored. . 21
4.16 Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . 21
4.17 Interest After Event of Default. . . . . . . . . . . . . . . . 21
4.18 Foreclosure, Expenses of Litigation. . . . . . . . . . . . . . 21
4.19 Deficiency Judgments . . . . . . . . . . . . . . . . . . . . . 22
4.20 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . 22

ARTICLE V

RIGHTS AND RESPONSIBILITIES OF TRUSTEE;
OTHER PROVISIONS RELATING TO TRUSTEE

5.1 Exercise of Remedies by Trustee. . . . . . . . . . . . . . . . 22
5.2 Rights and Privileges of Trustee . . . . . . . . . . . . . . . 22
5.3 Resignation or Replacement of Trustee. . . . . . . . . . . . . 23
5.4 Authority of Beneficiary . . . . . . . . . . . . . . . . . . . 23
5.5 Effect of Appointment of Successor Trustee . . . . . . . . . . 23
5.6 Confirmation of Transfer and Succession. . . . . . . . . . . . 23
5.7 Ratification . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.8 Exculpation. . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.9 Endorsement and Execution of Documents . . . . . . . . . . . . 24
5.10 Multiple Trustees. . . . . . . . . . . . . . . . . . . . . . . 24
5.11 Terms of Trustee's Acceptance. . . . . . . . . . . . . . . . . 24

ARTICLE VI

MISCELLANEOUS PROVISIONS

6.1 Heirs, Successors and Assigns Included in Parties. . . . . . . 24
6.2 Intentionally Omitted. . . . . . . . . . . . . . . . . . . . . 25
6.3 Addresses for Notices, Etc . . . . . . . . . . . . . . . . . . 25
6.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.5 Invalid Provisions to Affect No Others . . . . . . . . . . . . 26
6.6 Changes and Priority Over Intervening Liens. . . . . . . . . . 26
6.7 Estoppel Certificates. . . . . . . . . . . . . . . . . . . . . 26
6.8 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 26
6.9 Required Notices . . . . . . . . . . . . . . . . . . . . . . . 27
6.10 Reconveyance . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.11 Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . . 27
6.12 Late Charges . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.13 Cost of Accounting . . . . . . . . . . . . . . . . . . . . . . 27
6.14 Right of Entry . . . . . . . . . . . . . . . . . . . . . . . . 27
6.15 Corrections. . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.16 Statute of Limitations . . . . . . . . . . . . . . . . . . . . 28
6.17 Joint and Several Liability. . . . . . . . . . . . . . . . . . 28
6.18 Context. . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.19 Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.20 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . 28
6.21 Limitation of Liability. . . . . . . . . . . . . . . . . . . . 28

ARTICLE VII

POWER OF ATTORNEY

7.1 Grant of Power . . . . . . . . . . . . . . . . . . . . . . . . 28

ARTICLE VIII

SUBORDINATION

Schedule A Legal Description

Appendix I -- Definitions

RESORT HOTEL

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

THIS DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES AND SECURITY AGREEMENT
(hereinafter called "Deed of Trust') is made as of May 10, 1996, by BL
DEVELOPMENT CORP., a Minnesota corporation, whose address is 13705 First Avenue
North, Plymouth, Minnesota 55441-5451 ("Trustor"), HANCOCK BANK, not in its
individual capacity, but solely in its capacity as Lessor and Trustee pursuant
to the Lease and Trust Agreement, whose address is One Hancock Plaza, Gulfport,
Mississippi 39501 ("Ground Lease Trustor") (Ground Lease Trustor and Trustor are
sometimes collectively referred to as "Trustors"), to JAMES R. McILWAIN, an
individual, whose address is c/o Hancock Bank, One Hancock Plaza, Gulfport,
Mississippi 39501 ("Trustee") and BA LEASING & CAPITAL CORPORATION, a California
corporation, as Agent for the benefit of the Lenders pursuant to the Loan
Agreement and Lease, whose address is Four Embarcadero Center, Suite 1200, San
Francisco, California 94111 ("Beneficiary").

DEFINITIONS - For all purposes hereof, the capitalized terms used herein
and not otherwise defined shall have the meanings assigned thereto in Appendix 1
annexed hereto. As used in this Deed of Trust, the following terms have the
meanings hereinafter set forth:

"Accounts Receivable" shall mean with respect to the Hotel, all accounts,
accounts receivable and other receivables, including, without limitation,
revenues, rentals, rent equivalents, receipts, income and profits from guest
rooms, meeting rooms, food and beverage facilities, vending machines, telephone
systems, guest laundry and any other items of revenue, receipts and/or income as
identified in the Uniform System of Accounts for Hotels, 8th Edition,
International Association of Hospitality Accountants (1986), as from time to
time amended.

"Affiliate" shall have the meaning set forth in Appendix 1 to the
Participation Agreement.

"Agent" means BA Leasing & Capital Corporation, a California corporation,
and its successors and/or assigns pursuant to the terms of the Operative
Documents.

"Appurtenant Rights" means all and singular the tenements, hereditaments,
rights, reversions, remainders, development rights, privileges, benefits,
easements (in gross or appurtenant), rights-of-way, gores or strips of land,
streets, ways, alleys, passages, sewer rights, water courses, water rights and
powers, and all appurtenances whatsoever and claims or demands of Trustors at
law or in equity, in any way belonging, benefitting, relating or appertaining to
the Hotel Site, the airspace over the Hotel Site, the Improvements or any of the
Trust Estate encumbered by this Deed of Trust, or which hereinafter shall in any
way belong, relate or be appurtenant thereto, whether now owned or hereafter
acquired by Trustors.

"Bankruptcy" means, with respect to any Person, that such Person is or
becomes bankrupt or insolvent or: (a) is the subject of any order for relief
under any Bankruptcy Law; (b) commences a voluntary proceeding under any
Bankruptcy Law; (c) consents to the entry of an order for relief in an
involuntary proceeding under any Bankruptcy Law; (d) consents to the appointment
of, or taking possession by, any Receiver; (e) makes any assignment for the
benefit of creditors; (f) is unable or fails, or admits in writing, its
inability to pay its debts as such debts become due; (g) is the subject of any
involuntary proceeding under any Bankruptcy Law or involuntary appointment of a
Receiver, and such involuntary proceeding or appointment is not dismissed and
terminated within 90 days; (h) is the subject of any other proceeding or relief
similar to any of the foregoing under any law; (i) is the subject of a warrant
of attachment, execution, or similar process with respect to such Person or any
substantial part of such Person's property, which warrant or similar process
remains in effect for sixty days without having been bonded or discharged; or
otherwise ceases to do business as a going concern.

"Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C.
101 et seq.

"Bankruptcy Law" means Title 11, United States Code, and any other state or
federal insolvency, reorganization, moratorium or similar law for the relief of
debtors.

"Beneficiary" means BA Leasing & Capital Corporation, a California
corporation, its successors and/or assigns.

"Business Day" shall have the meaning set forth in Appendix 1.

"Casualty" shall have the meaning set forth in Appendix 1.

"Casualty Recoveries" shall have the meaning set forth in Appendix 1.

"Environmental Law" shall have the meaning set forth in Appendix 1.

"Event of Default" shall have the meaning set forth in Section 3.1
hereof.

"FF&E" means all furniture, fixtures, equipment, appurtenances and personal
property now or in the future contained in, used in connection with, attached
to, or otherwise useful or convenient to the use, operation, or occupancy of, or
placed on, but unattached to, any part of the Hotel Site or Improvements whether
or not the same constitutes real property or fixtures in the State of
Mississippi, including all removable window and floor coverings, all furniture
and furnishings, heating, lighting, plumbing, ventilating, air conditioning,
refrigerating, incinerating and elevator and escalator plants, cooking
facilities, vacuum cleaning systems, public address and communications systems,
sprinkler systems and other fire prevention and extinguishing apparatus and
materials, motors, machinery, pipes, appliances, equipment, fittings, fixtures,
and building materials, together with all venetian blinds, shades, draperies,
drapery and curtain rods, brackets, bulbs, cleaning apparatus, mirrors, lamps,
ornaments, cooling apparatus and equipment, ranges and ovens, garbage disposals,
dishwashers, mantels, and any and all such property which is at any time
hereinafter installed in, affixed to or placed upon the Hotel Site or
Improvements.

"Gaming Control Act" means the Mississippi Gaming Control Act, Miss.
Code Ann. Section 75-76-1, et seq., as from time to time amended, or any
successor provision of law, and the regulations promulgated thereunder,
including the Mississippi Gaming Commission Regulations.

"Governmental Authority" shall have the meaning set forth in
Appendix 1.

"Ground Lease" means the ground lease, dated as of the date hereof, between
Trustor, as lessor, and Ground Lease Trustor, as lessee, pursuant to which
Trustor has leased the Hotel Site to Ground Lease Trustor.

"Ground Lease Damage Claims" means all of Ground Lease Trustor's claims and
rights to the payment of damages that may arise from Trustor's failure to
perform under the Ground Lease, or rejection of the Ground Lease under any
Bankruptcy Law.

"Ground Lease Trustor" shall have the meaning set forth in the
preamble.

"Hotel Site" means the real property situated in the County of Tunica,
State of Mississippi, more specifically described in Schedule A attached hereto
and incorporated herein by reference, including any after acquired title
thereto, upon which the Hotel shall be constructed.

"Improvements" means (1) all the buildings, structures, facilities and
improvements of every nature whatsoever now or hereafter situated on the Hotel
Site or any real property encumbered hereby including the Hotel, and (2) all
fixtures, machinery, appliances, goods, building or other materials, equipment,
including, without limitation all gaming equipment and devices, and all
machinery, equipment, engines, appliances and fixtures for generating or
distributing air, water, heat, electricity, light, fuel or refrigeration, or for
ventilating or sanitary purposes, or for the exclusion of vermin or insects, or
for the removal of dust, refuse or garbage; all wall-beds, wall-safes, built-in
furniture and installations, shelving, lockers, partitions, doorstops, vaults,
motors, elevators, dumb-waiters, awnings, window shades, venetian blinds, light
fixtures, fire hoses and brackets and boxes for the same, fire sprinklers,
alarm, surveillance and security systems, computers, drapes, drapery rods and
brackets, mirrors, mantels, screens, linoleum, carpets and carpeting, plumbing,
bathtubs, sinks, basins, pipes, faucets, water closets, laundry equipment,
washers, dryers, ice-boxes and heating units; all kitchen and restaurant
equipment, including but not limited to silverware, dishes, menus, cooking
utensils, stoves, refrigerators, ovens, ranges, dishwashers, disposals, water
heaters, incinerators, furniture, fixtures and furnishings, communication
systems, and equipment; all cocktail lounge supplies, including but not limited
to bars, glassware, bottles and tables used in connection with the Hotel Site;
all chaise lounges, hot tubs, swimming pool heaters and equipment and all other
recreational equipment (computerized and otherwise), beauty and barber
equipment, and maintenance supplies used in connection with the Hotel Site; all
specifically designed installations and furnishings, and all furniture,
furnishings and personal property of every nature whatsoever now or hereafter
owned or leased by Trustors or in which Trustors have any right or interest and
located in or on, or attached to, or used or intended to be used or which are
now or may hereafter be appropriated for use on or in connection with the
operation of the Hotel Site or any real or personal property encumbered hereby
or any other Improvements, or in connection with any construction being
conducted or which may be conducted thereon, and all extensions, additions,
accessions, improvements, betterments, renewals, substitutions, and replacements
to any of the foregoing, and all of the right, title and interest of Trustors in
and to any such property (subject to any Permitted Liens), which, to the fullest
extent permitted by law, shall be conclusively deemed fixtures and improvements
and a part of the real property hereby encumbered.

"Insolvent" means with respect to any person or entity, that such person or
entity shall be deemed to be insolvent if he or it is unable to pay his or its
debts as they become due and/or if the fair market value of his or its assets
does not exceed his or its aggregate liabilities.

"Intangible Collateral" means with respect to the Hotel and the Hotel Site
(a) the rights to use all names and all derivations thereof now or hereafter
used by Trustor in connection with the Hotel or Improvements, together with the
goodwill associated therewith, and all names, logos, and designs used by
Trustor, or in connection with the Hotel or in which Trustor has rights, with
the exclusive right to use such names, logos and designs wherever they are now
or hereafter used in connection with the Hotel, and any and all other trade
names, trademarks or service marks, whether or not registered, now or hereafter
used in the operation of the Hotel, including, without limitation, any interest
as a lessee, licensee or franchisee, and, in each case, together with the
goodwill associated therewith; (b) subject to the absolute assignment contained
herein, the Rents; (c) any and all books, records, customer lists, concession
agreements, supply or service contracts, licenses, permits, governmental
approvals (to the extent such licenses, permits and approvals may be pledged),
signs, goodwill, casino and hotel credit and charge records, supplier lists,
checking accounts, safe deposit boxes (excluding the contents of such deposit
boxes owned by persons other than Trustors and their subsidiaries), cash,
instruments, chattel papers, documents, unearned premiums, deposits, refunds,
including but not limited to income tax refunds, prepaid expenses, rebates, tax
and insurance escrow and impound accounts, if any, actions and rights in action,
and all other claims including, without limitation condemnation awards and
insurance proceeds, and all other contract rights and general intangibles
resulting from or used in connection with the operation of the Trust Estate and
in which Trustor now or hereafter has rights; and (d) all of Trustors'
documents, instruments, contract rights, and general intangibles including,
without limitation, all permits, licenses, franchises and agreements required
for the use, occupancy or operation of any Improvements (to the extent such
licenses, permits and approvals are not prohibited from being pledged); and (e)
general intangibles, vacation license resort agreements or other time share
license or right to use agreements including, without limitation all rents,
issues, profits, income and maintenance fees resulting therefrom, whether any of
the foregoing is now owned or hereafter acquired.

"Lease" means the lease, dated as of the date hereof, between Ground Lease
Trustor, as lessor, and Trustor, as lessee, pursuant to which Ground Lease
Trustor has leased the Hotel to Trustor.

"Legal Requirements" means all applicable restrictive covenants, applicable
zoning and subdivision ordinances and building codes, all applicable health and
environmental laws and regulations, all applicable gaming laws and regulations,
and all other applicable laws, ordinances, rules, regulations, judicial
decisions, administrative orders, and other requirements of any Governmental
Authority having jurisdiction over Trustors, all or any portion of the Trust
Estate and/or any Affiliate of Trustors, in effect either at the time of
execution of this Deed of Trust or at any time during the term hereof.

"Lenders" shall have the meaning set forth in Appendix 1.

"Lien" shall have the meaning set forth in Appendix 1.

"Loan Agreement" means the loan agreement, dated as of the date hereof,
among Ground Lease Trustor, as borrower, and the Lenders.

"Non-Casualty Recoveries" shall have the meaning set forth in Appendix
1.

"Obligations" shall mean all obligations (monetary or otherwise) of the
Ground Lease Trustor under the Loan Agreement and under the Ground Lease and all
obligations (monetary or otherwise) of Trustor under the Ground Lease and the
Lease, together with any and all other obligations (monetary or otherwise) of
Trustors under the Operative Documents to which each is a party.

"Operative Documents" shall have the meaning set forth in Appendix 1.

"Overdue Rate" shall have the meaning set forth in Appendix 1.

"Participation Agreement" means that certain Participation Agreement,
dated as of the date hereof, among BL Development Corp., as Lessee and
Construction Agent; Grand Casinos, Inc. and certain of its subsidiaries, as
Guarantors; Ground Lease Trustor, as Lessor and Trustee; the Lenders, Co-Agents
and Lead Manager identified therein and BA Leasing & Capital Corporation, as
Arranger and Agent.

"Permitted Liens" shall have the meaning set forth in Appendix 1.

"Person" shall have the meaning set forth in Appendix 1.

"Proceeds" has the meaning assigned to it under the UCC and, in any
event, shall include but not be limited to all Casualty Recoveries and
Non-Casualty Recoveries and (i) any and all proceeds of any insurance
(including, without limitation property casualty and title insurance),
indemnity, warranty or guaranty payable from time to time with respect to any of
the Trust Estate; (ii) any and all proceeds in the form of accounts (as such
term is defined in the UCC), security deposits, tax escrows (if any), down
payments (to the extent the same may be pledged under applicable law),
collections, contract rights, documents, instruments, chattel paper, liens and
security instruments, guaranties or general intangibles relating in whole or in
part to the Trust Estate and all rights and remedies of whatever kind or nature
Trustors may hold or acquire for the purpose of securing or enforcing any
obligation due Trustors thereunder; (iii) any and all payments in any form
whatsoever made or due and payable from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Trust Estate by any Governmental Authority; (iv) subject to the
absolute assignment contained herein, the Rents or other benefits arising out
of, in connection with or pursuant to the Ground Lease; and (v) any and all
other amounts from time to time paid or payable in connection with any of the
Trust Estate; provided, however, that Trustors are not authorized to dispose of
any of the Trust Estate.

"Receiver" means, with respect to any Person (including Trustors), any
receiver, trustee, custodian, debtor in possession, liquidator, sequestrator,
administrator, conservator, or other successor appointed (whether by a court or
otherwise) pursuant to any creditor's exercise of remedies against such Person,
or pursuant to a Bankruptcy of such Person, or for purposes of reorganization or
liquidation, or otherwise for the benefit of such Person's creditors, or under
any similar circumstances, or otherwise having similar powers over such Person
or its property, whether such Receiver acts on an interim, temporary, or final
basis and whether such appointment applies to all or any significant portion of
such Person's assets or property, including or not including any of the Trust
Estate.

"Rents" means all rents, hotel rents, income, receipts, issues, profits,
revenues and maintenance fees, room, food and beverage revenues, license and
concession fees, income, proceeds and other benefits including, but not limited
to, all fees, charges, accounts or other payments for the use or occupancy of
rooms and other public facilities in hotels, motels or other lodging properties,
to which Trustors may now or hereafter be entitled from the Hotel Site, the
Hotel, the Ground Lease, the Space Leases, the Lease or any property encumbered
hereby or any business or other activity conducted by Trustors at the Hotel
Site.

"Space Leases" means any and all leases, including the Ground Lease and the
Lease, subleases, lettings, licenses, concessions, operating agreements,
management agreements, and all other agreements affecting the Trust Estate that
Trustors have entered into or will hereafter enter into, taken by assignment or
will hereafter take by assignment, taken subject to or will hereafter take
subject to, assumed or will hereafter assume, or has or will hereafter otherwise
become bound by, now or in the future, that give any person the right to conduct
its business on, or otherwise use, operate or occupy, all or any portion of the
Hotel Site and any leases, agreements or arrangements permitting anyone to enter
upon or use any of the Trust Estate to extract or remove natural resources of
any kind, together with all amendments, extensions, and renewals of the
foregoing entered into in compliance with this Deed of Trust, together with all
rental, occupancy, service, maintenance or any other similar agreements
pertaining to use or occupation of, or the rendering of services at the Hotel
Site or any part hereof.

"Tangible Collateral" means with respect to the Hotel and the Hotel Site,
all personal property, goods, equipment, supplies, building and other materials
of every nature whatsoever and all other tangible personal property constituting
a part or portion of the Hotel Site or Improvements and/or used in the operation
of the Hotel, casino, restaurants, stores, parking facilities, special events
arena, theme park, and all other commercial operations on the Hotel Site or
Improvements, including but not limited to communication systems, visual and
electronic surveillance systems and transportation systems and including all
property and materials stored therein in which Trustors have an interest and all
tools, utensils, food and beverage, liquor, uniforms, linens, housekeeping and
maintenance supplies, vehicles, fuel, advertising and promotional material,
blueprints, surveys, plans and other documents relating to the Hotel Site or
Improvements, and all construction materials and all furnishings, fixtures and
equipment, including, but not limited to, all gaming equipment and devices which
are to be installed and used in connection with the operation of the Hotel Site
or Improvements, including, without limitation those items of furniture,
fixtures and equipment which are to be purchased or leased by Trustors,
machinery and any other item of personal property in which Trustors now or
hereafter own or acquire an interest or right, and which are used or useful in
the construction, operation, use and occupancy of the Hotel Site or
Improvements; to the extent permitted by the applicable contract or applicable
law, all gaming and financial equipment, computer equipment, calculators, adding
machines, video game and slot machines, and any other electronic equipment of
every nature used or located on any part of the Hotel Site or Improvements, and
all present and future right, title and interest of Trustors in and to any
casino operator's agreement, license agreement or sublease agreement used in
connection with the Hotel Site or Improvements.

"365(h) Election" means Trustors' election to treat the Ground Lease as
terminated under Section 365(h) of the Bankruptcy Code or any similar Bankruptcy
Law, or any comparable right provided under any other Bankruptcy Law, together
with all rights, remedies and privileges related thereto.

"Trustee" shall have the meaning set forth in the preamble.

"Trustor" shall have the meaning set forth in the preamble.

"Trustors" shall have the meaning set forth in the preamble.

"Trust Estate" means all of the property described in Granting Clauses (A)
through (R) below, inclusive, and each item of property therein described.

"UCC" means the Uniform Commercial Code in effect in the State of
Mississippi from time to time.

WITNESSETH:

IN CONSIDERATION OF TEN DOLLARS AND OTHER GOOD AND VALUABLE CONSIDERATION;
THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED AND FOR THE PURPOSE
OF SECURING as a Lien in favor of Beneficiary (1) the due and punctual payment
of the Obligations the last installment of which is due on March 30, 2002; (2)
the performance of each covenant and agreement of Trustors contained herein, in
the Loan Agreement, the Lease or in the Ground Lease; (3) the satisfaction of
those terms and conditions contained herein applicable to Trustors or within
Trustors' control; (4) the payment of such additional loans or advances as
hereafter may be made to Ground Lease Trustor for the benefit of Trustor, or
their successors or assigns, it being agreed that such additional loans or
advances, together with interest at the Overdue Rate, shall be automatically
secured hereby unless such a note or instrument evidencing such advances
specifically recites that it is not intended to be secured hereby and (5) the
payment of all sums expended or advanced by Beneficiary under or pursuant to the
terms hereof or to protect the security hereof, together with interest thereon
as herein provided, Trustor and Ground Lease Trustor to the maximum extent of
their respective interests and in consideration of the premises, and for-the
purposes aforesaid, do hereby BARGAIN, CONVEY, WARRANT, HYPOTHECATE, TRANSFER
AND ASSIGN UNTO THE TRUSTEE IN TRUST FOR THE BENEFIT OF BENEFICIARY:

(A) The Hotel Site.

(B) TOGETHER WITH the Improvements.

(D) TOGETHER WITH the Tangible Collateral.

(E) TOGETHER WITH the Intangible Collateral.

(F) TOGETHER WITH Trustor's fee simple right, title and interest in the
Hotel Site and Trustor's right, title and interest in the Ground Lease, it being
agreed to by Trustor that Trustor's fee simple interest in the Hotel Site shall
be expressly subordinate to the Ground Lease as provided for in Article VIII of
this Deed of Trust.

(G) TOGETHER WITH all of Ground Lease Trustor's estate, right, title and
interest in, to and under the Ground Lease now or hereafter on or affecting any
of the property described in Granting Clauses (A) through (E) hereof or any part
thereof, together with all credits, deposits, options (including any options to
purchase or renew set forth in the Ground Lease), privileges, rights, estate,
title and interest of Ground Lease Trustor as tenant under the Ground Lease, and
all books and records which contain records of payments of rent or security made
under the Ground Lease and all Ground Lease Damage Claims.

(H) TOGETHER WITH (i) all the estate, right, title and interest of Trustors
of, in and to all judgments and decrees, insurance proceeds, awards of damages
and settlements hereafter made resulting from condemnation proceedings or the
taking of any of the property described in Granting Clauses (A) through (E)
hereof or any part thereof under the power of eminent domain, or for any damage
(whether caused by such taking or otherwise) to the property described in
Granting Clauses (A) through (E) hereof or any part thereof, or to any
Appurtenant Rights thereto, and Beneficiary is hereby authorized to collect and
receive said awards and proceeds and to give proper receipts and acquittance
therefor, and (subject to the terms hereof) to apply the same toward the payment
of the indebtedness and other sums secured hereby, notwithstanding the fact that
the amount owing thereon may not then be due and payable; (ii) all proceeds of
any sales or other dispositions of the property or rights described in Granting
Clauses (A) through (E) hereof or any part thereof whether voluntary or
involuntary, provided, however, that the foregoing shall not be deemed to permit
such sales, transfers, or other dispositions except as specifically permitted
herein; and (iii) whether arising from any voluntary or involuntary disposition
of the property described in Granting Clauses (A) through (E), all Proceeds,
products, replacements, additions, substitutions, renewals and accessions,
remainders, reversions and after-acquired interest in, of and to such property.

(I) TOGETHER WITH the absolute assignment of the Space Leases, together
with all of the following (including all "Cash Collateral" within the meaning of
the Bankruptcy Code) arising from the Space Leases (provided however, that (i)
permission is hereby given to Trustors, so long as no Event of Default has
occurred hereunder and so long as the same is in accordance with the Operative
Documents, to collect and use the Rents, as they become due and payable, but not
in advance thereof and (ii) upon the occurrence of an Event of Default, the
permission hereby given to Trustors to collect the Rents shall automatically
terminate, but such permission may, in the sole discretion of Beneficiary, be
reinstated upon a cure of such Event of Default): (a) Rents (subject, however,
to the aforesaid absolute assignment to Beneficiary and the conditional
permission hereinabove given to Trustors to collect the Rents), (b) all
guaranties, letters of credit, security deposits, collateral, cash deposits, and
other credit enhancement documents, arrangements and other measures with respect
to the Space Leases, (c) all of Trustors' right, title, and interest under the
Space Leases, including the following: (i) the right to receive and collect the
Rents under the Space Leases and (ii) the right to enforce against any tenants
thereunder and otherwise any and all remedies under the Space Leases, including
Trustors' right to evict from possession any tenant thereunder or to retain,
apply, use, draw upon, pursue, enforce or realize upon any guaranty of the Space
Leases; to terminate, modify, or amend the Space Leases; to obtain possession
of, use, or occupy, any of the real or personal property subject to the Space
Leases; and to enforce or exercise, whether at law or in equity or by any other
means, all provisions of the Space Leases and all obligations of the tenants
thereunder based upon (A) any breach by such tenants under the Space Leases
(including any claim that Trustors may have by reason of a termination,
rejection, or disaffirmance of the Space Leases pursuant to any Bankruptcy Law)
and (B) the use and occupancy of the premises demised, whether or not pursuant
to the Space
Leases (including any claim for use and occupancy arising under landlord-tenant
law of the State of Mississippi or any Bankruptcy Law).

Notwithstanding anything to the contrary contained herein, the foregoing
provisions shall not constitute an assignment for purposes of security but shall
constitute an absolute and present assignment of the Rents and Space Leases to
Beneficiary, subject, however, to the conditional permission given to Trustors
to collect and use the Rents and Space Leases as hereinabove provided; and the
existence or exercise of such right of Trustors shall not operate to subordinate
this assignment to any subsequent assignment, in whole or in part, by Trustors.

(J) TOGETHER WITH all of Trustor's right, title and interest in and to any
and all maps, plans, specifications, surveys, studies, tests, reports, data and
drawings relating to the development of the Hotel Site, including, without
limitation, all marketing plans, feasibility studies, soils tests, design
contracts and all contracts and agreements of Trustor relating thereto
including, without limitation, construction contracts and architectural,
structural, mechanical and engineering plans and specifications, studies, data
and drawings prepared for or relating to the development of the Hotel Site or
the extraction of minerals, sand, gravel or other valuable substances from the
Hotel Site.

(K) TOGETHER WITH all of Trustors' right, title, and interest in and to any
and all licenses, permits, variances, special permits, franchises, certificates,
rulings, certifications, validations, exemptions, filings, registrations,
authorizations, consents, approvals, waivers, orders, rights and agreements
(including options, option rights and contract rights) now or hereafter obtained
by Trustors from any Governmental Authority having or claiming jurisdiction over
the Hotel Site, or any other element of the Trust Estate or providing access
thereto, or the operation of any business on, at, or from the Hotel Site.

(L) TOGETHER WITH all water stock, water permits and other water rights
relating to the Hotel Site.

(M) TOGETHER WITH all oil and gas and other mineral rights, if any, in or
pertaining to the Hotel Site and all royalty, leasehold and other rights of
Trustors pertaining thereto.

(N) TOGETHER WITH all mooring rights, if any, relating to the Hotel Site.

(O) TOGETHER WITH (i) all of Trustors' present and future "accounts",
"deposits" and "instruments" (as said quoted terms are defined in the UCC)
arising from the business operations at the Hotel, and (ii) any and all monies
and other property, real or personal, which may from time to time be subjected
to the lien hereof by Trustors or by anyone on its behalf or with its consent,
or which may come into the possession or be subject to the control of the
Trustee or Beneficiary pursuant to this Deed of Trust or any Operative Document,
including, without limitation, any Advance or Protective Advance (as defined in
Section 4.2 below); and all of Trustors' right, title, and interest in and to
all extensions, improvements, betterments, renewals, substitutes for and
replacements of, and all additions, accessions, and appurtenances to, any of the
foregoing that Trustors may subsequently acquire or obtain by any means, or
construct, assemble, or otherwise place on any of the Trust Estate, and all
conversions of any of the foregoing; it being the intention of Trustors that all
property hereafter acquired by Trustors and required by any Operative Document
or this Deed of Trust to be subject to the lien of this Deed of Trust or
intended so to be shall forthwith upon the acquisition thereof by Trustors be
subject to the lien of this Deed of Trust as if such property were now owned by
Trustors and were specifically described in this Deed of Trust and granted
hereby or pursuant hereto, and the Trustee and the Beneficiary are hereby
authorized to receive any and all such property as and for additional security
for the Obligations secured or intended to be secured hereby. Trustors agree to
take any action as may reasonably be necessary to evidence and perfect such
liens or security interests, including, without limitation, the execution of any
documents necessary to evidence and perfect such liens or security interests.

(P) TOGETHER WITH any and all Accounts Receivable, royalties, earnings,
income, proceeds, products, rents, revenues, reversions, remainders, issues,
profits, avails, production payments, and other benefits directly or indirectly
derived or otherwise arising from the Hotel or any of the foregoing, all of
which are hereby assigned to Beneficiary, who, except as otherwise expressly
provided in this Deed of Trust, is authorized to collect and receive the same,
to give receipts and acquittances therefor and to apply the same to the
Obligations secured hereunder, whether or not then due and payable.

(Q) TOGETHER WITH any and all FF&E.

(R) TOGETHER WITH (i) Trustors' rights, if any, further to assign, sell,
encumber or otherwise transfer or dispose of the property described in Granting
Clauses (A) through (J) inclusive, above, for debt or otherwise.

Trustors, for themselves and their successors and assigns, covenant and
agree to and with the Trustee that, at the time or times of the execution of and
delivery of these presents or any instrument of further assurance with respect
thereto, Trustors have good right, full power and lawful authority to assign,
grant, convey, warrant, transfer, bargain or sell their respective interests in
the Trust Estate in the manner and form as aforesaid, and that the same are free
and clear of all liens and encumbrances whatsoever, except for Permitted Liens,
and Trustors shall warrant and forever defend the above-bargained property in
the quiet and peaceable possession of the Trustee and its successors and assigns
against all and every person or persons lawfully or otherwise claiming or to
claim the whole or any part thereof, except for Permitted Liens. Trustors agree
that any greater title to the Trust Estate hereafter acquired by Trustors during
the term hereof shall be automatically subject hereto.

ARTICLE I

COVENANTS OF TRUSTORS

The Beneficiary, the Agent and the Lenders have been induced to enter into
the Participation Agreement, pursuant to which Advances shall be made, and each
of the other Operative Documents, on the basis of the following material
covenants, all agreed to by Trustors:

1.1 Performance of Operative Documents. Trustors shall perform, observe and
comply with each and every provision hereof, and with each and every provision
contained in the Operative Documents, as applicable, and shall promptly pay to
Beneficiary, when payment shall become due, the principal with interest thereon
and all other sums required to be paid by Trustors under this Deed of Trust and
the Operative Documents in accordance with the terms of the Operative Documents.

1.2 General Representations, Covenants and Warranties. Trustor represents,
covenants and warrants that: (a) Trustor has good and marketable fee simple
title to the Hotel Site; (b) Trustor has good and marketable title to the Trust
Estate, free and clear of all encumbrances except Permitted Liens, and has the
right to hold, occupy and enjoy its interest in the Trust Estate, and has good
right, full power and lawful authority to mortgage and pledge the same as
provided herein and Beneficiary may at all times peaceably and quietly enter
upon, hold, occupy and enjoy the entire Trust Estate in accordance with the
terms hereof; (c) neither Trustor nor any Affiliate of Trustor is Insolvent and
no bankruptcy or insolvency proceedings are pending or contemplated by or, to
the best of Trustor's knowledge, against Trustor or any Affiliate of Trustor;
(d) the Hotel Site has frontage on, and direct access for ingress and egress to
dedicated street(s); (e) Trustor shall at all times conduct and operate the
Trust Estate in a manner so as not to lose the right to conduct gaming
activities at the Resort or on the Casino Barges (as such terms are defined in
Appendix 1) (f) no material part of the Trust Estate has been damaged,
destroyed, condemned or abandoned; and (g) each of the representations and
warranties contained in the Operative Documents are true and correct in all
material respects and are hereby incorporated herein by reference.

1.3 Compliance with Legal Requirements. Trustor shall promptly, fully, and
faithfully comply with all Legal Requirements and shall cause all portions of
the Trust Estate and its use and occupancy to fully comply with Legal
Requirements at all times, whether or not such compliance requires work or
remedial measures that are ordinary or extraordinary, foreseen or unforeseen,
structural or nonstructural, or that interfere with the use or enjoyment of the
Trust Estate.

1.4 Taxes. Trustor shall not suffer to exist, permit or initiate the joint
assessment of the real and personal property, or any other procedure whereby the
lien of the real property taxes and the lien of the personal property taxes
shall be assessed, levied or charged to the Hotel Site as a single lien, except
as may be required by law, except for Permitted Liens. In the event of the
passage of any law deducting from the value of real property for the purposes of
taxation any lien thereon, or changing in any way the taxation of deeds of trust
or obligations secured thereby for state or local purposes, or the manner of
collecting such taxes and imposing a tax, either directly or indirectly, on this
Deed of Trust, Trustor shall pay all such taxes. Beneficiary may, but shall not
be obligated to pay all such taxes in the event that Trustor fails to make such
payment and any such payment by Beneficiary shall be secured by this Deed of
Trust as a future advance as set forth in Section 1.29 below.

1.5 Insurance/Casualty.

(a) Trustor shall at its sole expense obtain for, deliver to, assign and
maintain for the benefit of Beneficiary, during the term of this Deed of Trust,
insurance policies insuring the Trust Estate and liability insurance policies,
all in accordance with the requirements set forth in the Ground Lease, Article
IX of the Lease and in the other Operative Documents. Trustor shall pay promptly
when due any premiums on such insurance policies and on any renewals thereof. In
the event of the foreclosure of this Deed of Trust or any other transfer of
title to the Trust Estate in extinguishment of the indebtedness and other sums
secured hereby, all right, title and interest of Trustor in and to all insurance
policies, following the occurrence of such foreclosure or other transfer, shall
pass to the purchaser or grantee. Beneficiary may, but shall not be obligated to
pay for any required insurance policies in the event that Trustor fails to make
such payment and any such payment by Beneficiary shall be secured by this Deed
of Trust as a future advance as set forth in Section 1.29 below.

(b) Any insurance proceeds or other Casualty Recoveries shall be governed
by and disbursed in accordance with the terms of the Ground Lease, Article IX of
the Lease and the other Operative Documents.

1.6 Condemnation. In the event that any part of the Trust Estate is
condemned (whether by one or successive condemnation proceedings), proceeds of
such condemnation shall be applied in accordance with the provisions of the
Ground Lease, Article IX of the Lease and the other Operative Documents.

1.7 Care of Trust Estate.

Trustor shall preserve and maintain the Trust Estate in good condition and
repair, and Trustor shall not permit, commit or suffer to exist any waste,
impairment or deterioration of the Trust Estate or of any part thereof that in
any manner materially impairs Beneficiary's security hereunder and shall not
take any action which will increase the risk of fire or other hazard to the
Trust Estate or to any part thereof.

1.8 Environmental Laws.

(a) Trustor shall comply with all Environmental Laws. If Trustor fail to do
so, then Beneficiary may cause the Trust Estate to so comply and Trustor shall
indemnify Beneficiary with respect to any expenditures that Beneficiary incurs
in doing so. This shall not limit any other rights or remedies available to
Beneficiary.

(b) Trustor shall notify Beneficiary of all Environmental Violations
relating to the Trust Estate in accordance with the terms and conditions of the
Participation Agreement.

1.9 Leases.

(a) Trustor shall not enter into any new leases of all or any portion of
the Trust Estate or any modifications, assignments or amendments of the Space
Leases except in accordance with the terms and conditions of the Operative
Documents.

(b) No default now exists under the Space Leases. No event has occurred
that, with the giving of notice or the passage of time or both, would constitute
such a default or would entitle Trustors, as applicable, or any other party
under the Space Leases to cancel the same or otherwise avoid its obligations.

(c) Trustors shall pay, when due and payable, the rentals, additional
rentals, and other charges required by, and payable under, the Space Leases, as
applicable, in accordance with the Space Leases.

(d) Trustor shall perform and observe all terms, covenants, and conditions
that Trustor must perform and observe under the Space Leases, and do everything
necessary to preserve and to keep unimpaired the Trust Estate.

(e) Trustors hereby irrevocably delegate to Beneficiary the nonexclusive
authority to exercise any or all of Trustors' rights, under the Space Leases,
whether or not Trustors have failed to exercise any such right. Nothing in the
foregoing delegation of authority shall be deemed to impose any obligation or
duty upon Beneficiary.

1.10 Treatment of Ground Lease in Bankruptcy.

(a) 365(h) Election. If Trustor rejects or disaffirms, or seeks or purports
to reject or disaffirm, the Ground Lease pursuant to any Bankruptcy Law (it
being agreed to by Trustor that to the maximum extent permitted by law, Trustor
shall not reject or disaffirm the Ground Lease and shall permit Ground Lease
Trustor to remain in possession of the premises demised under the Ground Lease),
then Ground Lease Trustor shall not exercise the 365(h) Election except as
otherwise provided in this paragraph. To the extent permitted by law, Ground
Lease Trustor shall not suffer or permit the termination of the Ground Lease by
exercise of the 365(h) Election or otherwise without Beneficiary's consent.
Ground Lease Trustor acknowledges that because the Ground Lease is a primary
element relating to Beneficiary's security for the Obligations secured hereunder
and in connection with the financing of the construction of the Hotel, it is not
anticipated that Beneficiary would consent to termination of the Ground Lease.
If Ground Lease Trustor makes any 365(h) Election in violation of this Deed of
Trust, then such 365(h) Election shall be void and of no force or effect.

(b) Assignment to Beneficiary. Ground Lease Trustor hereby assigns to
Beneficiary the 365(h) Election with respect to the Ground Lease. Ground Lease
Trustor acknowledges and agrees that the foregoing assignment of the 365(h)
Election and related rights is one of the rights that Beneficiary may use at any
time to protect and preserve Beneficiary's other rights and interests under this
Deed of Trust. Ground Lease Trustor further acknowledges that exercise of the
365(h) Election in favor of terminating the Ground Lease would constitute waste
prohibited by this Deed of Trust. Ground Lease Trustor acknowledges and agrees
that the 365(h) Election is in the nature of a remedy available to Ground Lease
Trustor under the Ground Lease, and is not a property interest that Ground Lease
Trustor can separate from the Ground Lease as to which it arises. Therefore,
Ground Lease Trustor agrees and acknowledges that exercise of the 365(h)
Election in favor of preserving the right to possession under the Ground Lease
shall not be deemed to constitute Beneficiary's taking or sale of the Trust
Estate (or any element thereof) and shall not entitle Ground Lease Trustor to
any credit against the Obligations secured hereunder or otherwise impair
Beneficiary's Remedies.

1.11 Rejection of Ground Lease by Trustor. If Trustor rejects or disaffirms
the Ground Lease or purports or seeks to disaffirm the Ground Lease pursuant to
any Bankruptcy Law, then Ground Lease Trustor shall remain in possession of the
premises demised under the Ground Lease and shall perform all acts necessary for
Ground Lease Trustor to remain in such possession for the unexpired term of the
Ground Lease (including all renewals), whether the then existing terms and
provisions of the Ground Lease require such acts or otherwise. Ground Lease
Trustor shall be deemed to be in possession of the premises demised under the
Ground Lease regardless of whether any portion of such premises has been leased
to Trustor pursuant to the Lease for purposes of Section 365(h) of the
Bankruptcy Code or any other similar Bankruptcy Law.

1.12 Assignment of Claims to Beneficiary. Ground Lease Trustor, immediately
upon learning that the Trustor has failed to perform the terms and provisions
under the Ground Lease (including by reason of a rejection or disaffirmance or
purported rejection or disaffirmance of the Ground Lease pursuant to any
Bankruptcy Law), shall notify Beneficiary of any such failure to perform. Ground
Lease Trustor unconditionally assigns, transfers and sets over to Beneficiary
the Ground Lease Damage Claims. This assignment constitutes a present,
irrevocable, and unconditional assignment of the Ground Lease Damage Claims, and
shall continue in effect until the Obligations secured hereunder have been paid
in full.

1.13 Intentionally Omitted.

1.14 Ground Lease Trustor's Acquisition of Interest in Leased Parcels. If
Ground Lease Trustor acquires the fee or any other interest in any part of the
Hotel Site, such acquired interest shall immediately become subject to the lien
of this Deed of Trust as fully and completely, and with the same effect, as if
Ground Lease Trustor now owned it and as if this Deed of Trust specifically
described it, without need for the delivery and/or recording of a supplement to
this Deed of Trust or any other instrument. In the event of any such
acquisition, the fee and leasehold interests in such Hotel Site, unless
Beneficiary elects otherwise in writing, remain separate and distinct and shall
not merge, notwithstanding any principle of law to the contrary.

1.15 Intentionally Omitted.

1.16 Further Encumbrance. Trustors covenant that at all times prior to the
payment in full of the indebtedness secured hereby, except for Permitted Liens,
Trustors shall neither make nor suffer to exist, nor enter into any agreement
for, any sale, assignment, exchange, mortgage, transfer, Lien, hypothecation or
encumbrance of all or any part of the Trust Estate, including, without
limitation, the Rents. As used herein, "transfer" includes the actual transfer
or other disposition, whether voluntary or involuntary, by law, or otherwise,
except those transfers specifically permitted herein, provided, however, that
"transfer" shall not include the granting of utility or other beneficial
easements with respect to the Trust Estate which have been or may hereafter be
granted by Trustors and are reasonably necessary to the operation of the Trust
Estate.

1.17 Intentionally Omitted.

1.18 Further Assurances.

(a) At its sole cost and without expense to the Trustee or the Beneficiary,
Trustor shall do, execute, acknowledge and deliver any and all such further
acts, deeds, conveyances, notices, requests for notices, financing statements,
continuation statements, certificates, assignments, notices of assignments,
agreements, instruments and further assurances, and shall mark any chattel
paper, deliver any chattel paper or instruments to the Beneficiary and take any
other actions that are necessary, desirable or requested by Beneficiary or
Trustee to perfect or continue the perfection and first priority of
Beneficiary's security interest in the Trust Estate, to protect the Trust Estate
against the rights, claims, or interests of third persons other than holders of
Permitted Liens or to effect the purposes of this Deed of Trust, including the
security agreement and the absolute assignment of Rents and Space Leases
contained herein, or for the filing, registering or recording thereof.

(b) Trustor shall forthwith upon the execution and delivery of this Deed of
Trust, and thereafter from time to time, cause this Deed of Trust and each
instrument of further assurance to be filed, indexed, registered, recorded,
given or delivered in such manner and in such places as may be required by any
present or future law in order to publish notice of and fully to protect the
lien hereof upon, and the title of the Trustee and/or the Beneficiary to, the
Trust Estate.

1.19 Intentionally Omitted.

1.20 Assignment of Rents and Leases. The assignment of Space Leases and
Rents set out above in the Granting Clauses shall constitute an absolute and
present assignment to Beneficiary, subject to the license herein given to
Trustors, and shall be fully operative without any further action on the part of
any party, and specifically Beneficiary shall be entitled upon the occurrence of
an Event of Default hereunder to all Rents, whether or not Beneficiary takes
possession of the Trust Estate, or any portion thereof. The absolute assignment
shall not be deemed to impose upon Beneficiary any of the obligations or duties
provided in any Space Lease.

1.21 Expenses.

(a) Trustor shall pay when due and payable all costs, including, without
limitation, appraisal fees, recording fees, taxes, brokerage fees and
commissions, abstract fees, title policy fees, escrow fees, attorneys' and
paralegal fees, travel expenses, fees for inspecting architect(s) and
engineer(s) and all other costs and expenses of every character which have been
incurred or which may hereafter be incurred by Beneficiary or any assignee of
Beneficiary in connection with the preparation and execution of loan documents,
amendments thereto or instruments, agreements or documents of further assurance,
the funding of the loan secured hereby, and the enforcement of any Operative
Document; and

(b) Trustor shall, upon demand by Beneficiary, reimburse Beneficiary or any
assignee of Beneficiary for all such reasonable expenses which have been
incurred or which shall be incurred by it; and

(c) Trustor shall indemnify Beneficiary with respect to any transaction or
matter in any way connected with any portion of the Trust Estate, this Deed of
Trust, including any occurrence at, in, on, upon or about the Trust Estate
(including any personal injury, loss of life, or property damage), or Trustor's
use, occupancy, or operation of the Trust Estate, or the filing or enforcement
of any mechanic's lien, or otherwise caused in whole or in part by any act,
omission or negligence occurring on or at the Trust Estate, including failure to
comply with any Legal Requirement or with any requirement of this Deed of Trust
that applies to Trustor, or any Person's violation of any environmental law or
any contamination of any portion of the Trust Estate in accordance with the
applicable provisions of Articles VII and VIII of the Participation Agreement.
Trustor shall pay all costs and expenses, including legal costs, that
Beneficiary pays or incurs in connection with any such litigation. Any amount
payable under any indemnity in this Deed of Trust shall be a demand obligation,
shall be added to, and become a part of, the secured obligations under this Deed
of Trust, shall be secured by this Deed of Trust, and shall bear interest at the
Overdue Rate. Such indemnity shall survive any release of this Deed of Trust and
any foreclosure.

1.22 Beneficiary's Cure of Trustors' Default. If Trustors default in the
payment of any tax, assessment, lien, encumbrance or other imposition, in its
obligation to furnish insurance hereunder, or in the performance or observance
of any other covenant, condition or term of this Deed of Trust, the Loan
Agreement or the Space Leases, Beneficiary may, but is not obligated to, to
preserve its interest in the Trust Estate, perform or observe the same, and all
payments made (whether such payments are regular or accelerated payments) and
costs and expenses incurred or paid by Beneficiary in connection therewith shall
become due and payable immediately. The amounts so incurred or paid by
Beneficiary, together with interest thereon at the Overdue Rate from the date
incurred until paid by Trustors, shall be added to the indebtedness and secured
by the lien of this Deed of Trust. Beneficiary is hereby empowered to enter and
to authorize others to enter upon the Hotel Site or any part thereof for the
purpose of performing or observing any such defaulted covenant, condition or
term, without thereby becoming liable to Trustors or any person in possession
holding under Trustors. No exercise of any rights under this Section by
Beneficiary shall cure or waive any Event of Default or notice of default
hereunder or invalidate any act done pursuant hereto or to any such notice, but
shall be cumulative of all other rights and remedies.

1.23 Compliance with Permitted Lien Agreements. Trustors or any Affiliate
of Trustors shall comply with each and every material obligation contained in
any agreement pertaining to a material Permitted Lien.

1.24 Use of Hotel Site. Trustor covenants that the Trust Estate will be
used in accordance with all Applicable Laws and pursuant to the terms and
conditions set forth in the Ground Lease and the Lease.

1.25 Taxes on Beneficiary. Trustor shall pay any taxes, other than income
taxes, imposed on the Beneficiary by reason of its ownership of this Deed of
Trust by reason of any payments made pursuant to this Deed of Trust. If any time
any Governmental Authority shall require internal revenue or other documentary
stamps or any other tax on this Deed of Trust, then, if Trustor lawfully may pay
for such stamps or tax, including interest and penalties thereon, to or for
Beneficiary, Trustor shall pay, when payable, for all such stamps and taxes,
including interest and penalties thereon.

1.26 Additional Taxes. Trustor shall pay any taxes resulting from the
passage of any law deducting from the value of real property, for the purposes
of taxation of any lien thereon, or changing in any way the taxation of deeds of
trust or obligations secured thereby for state or local purposes, or the manner
of collecting such taxes, or the imposition of a tax, either directly or
indirectly, on this Deed of Trust.

1.27 Defense of Actions. Trustor shall appear in and defend any action or
proceeding affecting or purporting to affect the security hereof or the rights
or powers of Beneficiary or Trustee, and shall pay all costs and expenses,
including costs of title search and insurance or other evidence of title,
preparation of surveys, and reasonable attorneys' fees in any such action or
proceeding in which Beneficiary or Trustee may appear or may be joined as a
party and in any suit brought by Beneficiary based upon or in connection with
this Deed of Trust. Nothing contained in this section shall, however, limit the
right of Beneficiary to appear in such action or proceeding with counsel of its
own choice, either on its own behalf or on behalf of Trustor.

1.28 Affiliates.

(a) Subject to Trust Deed. Trustors shall cause all of their Affiliates in
any way involved with the operation of the Trust Estate to observe the covenants
and conditions of this Deed of Trust to the extent necessary to give the full
intended effect to such covenants and conditions and to protect and preserve the
security of Beneficiary hereunder. Trustors shall, at Beneficiary's request,
cause any such Affiliate to execute and deliver to Beneficiary or Trustee such
further instruments or documents as Beneficiary may reasonably deem necessary to
effectuate the terms of this Section.

(b) Restriction on Use of Subsidiary or Affiliate. Trustors shall not use
any Affiliate in the operation of the Trust Estate if such use would in any way
impair the security hereunder or circumvent any covenant or condition of this
Deed of Trust.

1.29 Future Advances. All funds advanced in the reasonable exercise of
Beneficiary's judgment to protect its security hereunder are deemed to be
obligatory advances and are to be added to the total indebtedness secured by
this Deed of Trust and such indebtedness shall be increased accordingly. All
sums so advanced including, but not limited to, any advances for the payment of
utilities, taxes or insurance shall be secured by this Deed of Trust with the
same priority of Lien as the security for the Obligations secured hereunder.

1.30 Security Agreement and Financing Statements. Trustors (as debtors)
hereby grant to Beneficiary (as creditor and secured party) a present and future
security interest in all Tangible Collateral, Intangible Collateral, FF&E and
any other personal property now or hereafter owned or leased by Trustors or in
which Trustors have or will have any interest, to the extent that such property
constitutes a part of the Trust Estate (whether or not such items are stored on
the premises or elsewhere), Proceeds of the foregoing comprising a portion of
the Trust Estate and all proceeds of insurance policies and condemnation awards
arising therefrom and all proceeds, products, substitutions, and accessions
therefor and thereto, subject to Beneficiary's rights to treat such property as
real property as herein provided (collectively, the "Personal Property").
Trustors shall execute any and all documents and writings, including, without
limitation financing statements pursuant to the UCC, as Beneficiary may
reasonably request, to preserve and maintain the priority of the security
interest granted hereby on property which may be deemed subject to the foregoing
security agreement, and shall pay to Beneficiary on demand any expenses incurred
by Beneficiary in connection with the preparation, execution and filing of any
such documents. Trustors hereby authorize and empower Beneficiary to execute and
file, on Trustors' behalf, all financing statements and refiling and
continuations thereof as Beneficiary deems necessary or advisable to create,
preserve and protect said security interest. This Deed of Trust shall be deemed
a security agreement as defined in the UCC and the remedies for any violation of
the covenants, terms and conditions of the agreements herein contained shall be
(i) as prescribed herein, or (ii) as available under applicable law, or (iii) as
available under the UCC, all at Beneficiary's sole election. In addition, a
photographic or other reproduction of this Deed of Trust shall be sufficient as
a financing statement for filing wherever filing may be necessary to perfect or
continue the security interest granted herein.

Trustors and Beneficiary agree that the filing of a financing statement in
the records normally having to do with personal property shall never be
construed as in anyway derogating from or impairing the express declaration and
intention of the parties hereto as hereinabove stated that everything used in
connection with the production of income from the Trust Estate and/or adapted
for use therein and/or which is described or reflected in this Deed of Trust is,
and at all times and for all purposes and in all proceedings both legal or
equitable, shall be regarded as part of the real property encumbered by this
Deed of Trust irrespective of whether (i) any such item is physically attached
to any improvements, (ii) serial numbers are used for the better identification
of certain equipment items capable of being thus identified in a recital
contained herein or in any list filed with Beneficiary, or (iii) any such item
is referred to or reflected in any such financing statement so filed at any
time. The mention in any such financing statement of (1) rights in or to the
proceeds of any fire and/or hazard insurance policy, or (2) any award in eminent
domain proceedings for a taking or for loss of value, or (3) Trustors' rights to
Rents, shall never be construed as in anyway altering any of the rights of
Beneficiary as determined by this Deed of Trust or impugning the priority of
Beneficiary's real property lien granted hereby or by any other recorded
document, but such mention in the financing statement is declared to be for the
protection of Beneficiary in the event any court or judge shall at any time hold
with respect to the matters set forth in the foregoing clauses that notice of
Beneficiary's priority of interest to be effective against a particular class of
persons, including but not limited to, the federal government and any
subdivisions or entity of the federal government, must be filed in the UCC
records.

(a) Priority. All Personal Property of any nature whatsoever, which is
subject to the provisions of this security agreement, shall be purchased or
obtained by Trustors in their respective names and free and clear of any lien or
encumbrance, except for Permitted Liens and the lien hereof, for use only in
connection with the business and operation of the Hotel, and shall be and at all
times remain free and clear of any lease or similar arrangement, chattel
financing, installment sale agreement, security agreement and any encumbrance of
like kind, except for Permitted Liens, so that Beneficiary's security interest
shall attach to and vest in Trustors for the benefit of Beneficiary, with the
priority herein specified, immediately upon the installation or use of the
Personal Property at the Hotel Site and Trustors warrant and represent that
Beneficiary's security interest in the Personal Property is a validly attached
and binding security interest, properly perfected and prior to all other
security interests therein except as otherwise permitted in this Deed of Trust.

(b) Removal of Trust Estate. None of the Trust Estate shall be removed from
the Trust Estate without Beneficiary's prior written consent, unless otherwise
permitted under the Operative Documents.

(c) Change of Name. Trustors shall not change their corporate or business
names, or do business within the State of Mississippi under any name other than
such name, or any trade name(s) other than those as to which Trustors give prior
written notice to Beneficiary of its intent to use such trade names, or any
other business names (if any) specified in the financing statements delivered to
Beneficiary for filing in connection with the execution hereof, without
providing Beneficiary with the additional financing statement(s) and any other
similar documents deemed reasonably necessary by Beneficiary to assure that its
security interest remains perfected and of undiminished priority in all such
Personal Property notwithstanding such name change.

ARTICLE II

CORPORATE LOAN PROVISIONS

2.1 Interaction with other Operative Documents. The terms and provisions of
this Deed of Trust shall be subject and subordinate to the terms of the other
Operative Documents. To the extent that the other Operative Documents provide
Trustors with a particular cure or notice period, other rights, or establishes
any limitations or conditions on Beneficiary's actions with regard to a
particular set of facts, Trustors shall be entitled only to the cure periods and
notice periods provided for in the other Operative Documents, and Beneficiary
shall be subject to the same limitations and conditions. In the event of any
conflict or inconsistency between the provisions of this Deed of Trust and those
of the other Operative Documents, including, without limitation, any conflicts
or inconsistencies in any definitions herein or therein, the provisions or
definitions of the other Operative Documents shall govern. Notwithstanding the
foregoing, to the extent that this Deed of Trust addresses matters not addressed
in the other Operative Documents, such fact shall not be deemed to be an
inconsistency for purposes of this Article II.

ARTICLE III

DEFAULTS

3.1 Event of Default. The term "Event of Default," wherever used in this
Deed of Trust, shall have the meaning given to the term "Lease Event of Default"
in Appendix 1.

ARTICLE IV

REMEDIES

4.1 Acceleration of Maturity. Upon the occurrence and during the
continuance of an Event of Default, Beneficiary may (except that such
acceleration shall be automatic if the Event of Default is caused by Trustor's
or Ground Lease Trustor's Bankruptcy), declare the Obligations to be due and
payable immediately, and upon such declaration the Obligations shall immediately
become due and payable without demand, presentment, notice or other requirements
of any kind (all of which Trustors waive) notwithstanding anything in this Deed
of Trust or applicable law to the contrary.

4.2 Protective Advances. If Trustor fails to make any payment or perform
any other obligation under the Operative Documents, then without thereby
limiting Beneficiary's other rights or remedies, waiving or releasing any of
Trustor's obligations, or imposing any obligation on Beneficiary, Beneficiary
may either advance any amount owing or perform any or all actions that
Beneficiary considers necessary or appropriate to cure such default. All such
advances shall constitute "Protective Advances." No sums advanced or performance
rendered by Beneficiary shall cure, or be deemed a waiver of any Event of
Default.

4.3 Institution of Equity Proceedings. Upon the occurrence and during the
continuance of an Event of Default, Beneficiary may institute an action, suit or
proceeding in equity for specific performance of the Operative Documents, all of
which shall be specifically enforceable by injunction or other equitable remedy.
Trustors waive any defense based on laches or any applicable statute of
limitations.

4.4 Beneficiary's Power of Enforcement.

(a) Upon the occurrence and during the continuance of any Event of Default,
Beneficiary may, either with or without entry or taking possession of the Trust
Estate, and without regard to whether or not the indebtedness and other sums
secured hereby shall be due and without prejudice to the right of Beneficiary
thereafter to bring an action or proceeding to foreclose or any other action for
any default existing at the time such earlier action was commenced, proceed by
any appropriate action or proceeding: (1) to enforce payment of the Obligations,
to the extent permitted by law, or the performance of any term hereof or any
other right; (2) to foreclose this Deed of Trust in any manner provided by law
for the foreclosure of mortgages or deeds of trust on real property and to sell,
as an entirety or in separate lots or parcels, the Trust Estate or any portion
thereof pursuant to the laws of the State of Mississippi or under the judgment
or decree of a court or courts of competent jurisdiction, and Beneficiary shall
be entitled to recover in any such proceeding all costs and expenses incident
thereto, including reasonable attorneys' fees in such amount as shall be awarded
by the court; (3) to exercise any or all of the rights and remedies available to
it under the Operative Documents in addition to, and not in limitation of, any
remedies provided for in this Deed of Trust; and (4) to pursue any other remedy
available to it. Beneficiary shall take action either by such proceedings or by
the exercise of its powers with respect to entry or taking possession, or both,
as Beneficiary may determine.

(b) Upon the occurrence and during the continuance of any Event of Default,
Trustee shall, at the request of Beneficiary, sell the Trust Estate conveyed, or
a portion thereof, to satisfy the obligations hereof at public outcry to the
highest bidder for cash. Sale of the property shall be advertised for three
consecutive weeks preceding the sale in a newspaper published in the county
where the Hotel Site and leaseholds are situated, or if none is so published,
then in some newspaper having a general circulation therein, and by posting a
notice for the same time at the courthouse of the same county. The notice and
advertisement shall disclose the names of the original debtors in this Deed of
Trust. Trustors waive the provisions of Section 89-1-55 of the Mississippi Code
of 1972, as amended, if any, as far as this section restricts the right of
Trustee to offer at sale more than 160 acres at a time, and Trustee may offer
the property herein conveyed as a whole, regardless of how it is described. Sale
of any real property and personal property secured hereby may occur together and
Trustors acknowledge that any such sale shall be deemed commercially reasonable.

If the Trust Estate is situated in two or more counties, or in two judicial
districts of the same county, Trustee shall have full power to select in which
county, or judicial district, the sale of the property is to be made, newspaper
advertisement published and notice of sale posted, and Trustee's selection shall
be binding upon Trustors but subject to the consent of Beneficiary. Should
Beneficiary be a corporation or an unincorporated association, then any officer
thereof may declare Trustors to be in default and request Trustee to sell the
Trust Estate. Beneficiary shall have the same right to purchase the property at
the foreclosure sale as would a purchaser who is not a party to this Deed of
Trust.

(c) The Trustee shall sell the Trust Estate or any portion thereof at the
time and place fixed by it in said notice, either as a whole or in separate
parcels, and in such order as it may determine, at public auction to the highest
bidder, for cash in lawful money of the United States payable at the time of
sale. The Trustee may, for any cause it deems expedient, postpone the sale of
all or any portion of said property until it shall be completed and, in every
case, notice of postponement shall be given by public announcement thereof at
the time and place last appointed for the sale and from time to time thereafter
the Trustee may postpone such sale by public announcement at the time fixed by
the preceding postponement. Any sale or sales may be held by an agent on behalf
of the Trustee and the appointment thereof need not be recorded. The Trustee
shall execute and deliver to the purchaser its Deed, Bill of Sale, or other
instrument conveying said property so sold. The recitals in such instrument of
conveyance of any matters or facts shall be conclusive proof of the truthfulness
thereof. Any person, including Beneficiary, may bid at the sale.

(1) After deducting all costs, fees and expenses of the Trustee and of
this Deed of Trust, including, without limitation, costs of evidence of title
and reasonable attorneys' fees of the Trustee or Beneficiary in connection with
a sale as provided in Section 4.4 (b) above, the Trustee shall apply the
proceeds of such sale to payment of all sums expended under the terms hereof not
then repaid, with accrued interest at the rate then in effect pursuant to the
terms of the Loan Agreement, then to the payment of all other sums then secured
hereby and the remainder, if any, to any person entitled by law.

4.5 Beneficiary's Right to Enter and Take Possession, Operate and
Apply Income.

(a) Upon the occurrence and during the continuance of an Event of Default,
(i) Trustors upon demand of Beneficiary, shall forthwith surrender to
Beneficiary the actual possession and, if and to the extent permitted by law,
Beneficiary itself, or by such officers or agents as it may appoint, may enter
and take possession of all the Trust Estate and Beneficiary may, at its option,
succeed to the interests of Trustors under the Space Leases, without liability
for trespass, damages or otherwise, and may exclude Trustors and their agents
and employees wholly therefrom and may have joint access with Trustors to the
books, papers and accounts of Trustors; and (ii) Trustors shall pay monthly in
advance to Beneficiary on Beneficiary's entry into possession, or to any
receiver appointed to collect the Rents, all Rents then due and payable.

(b) If Trustors shall for any reason fail to surrender or deliver the Trust
Estate, or any part thereof after Beneficiary's demand, Beneficiary may obtain a
judgment or decree conferring on Beneficiary or the Trustee the right to
immediate possession or requiring Trustors to deliver immediate possession of
all or part of such property to Beneficiary or the Trustee and Trustors hereby
specifically consent to the entry of such judgment or decree. Trustors shall pay
to Beneficiary or the Trustee, upon demand, all costs and expenses of obtaining
such judgment or decree and reasonable compensation to Beneficiary or the
Trustee, their attorneys and agents, and all such costs, expenses and
compensation shall, until paid, be secured by the lien of this Deed of Trust.

(c) Upon every such entering upon or taking of possession, the Beneficiary
or the Trustee may hold, store, use, operate, manage and control the Trust
Estate and conduct the business thereof, and, from time to time in its sole and
absolute discretion and without being under any duty to so act:

(1) make all necessary and proper maintenance, repairs, renewals,
replacements, additions, betterments and improvements thereto and thereon and
purchase or otherwise acquire additional fixtures, personalty and other
property;

(2) insure or keep the Trust Estate insured;

(3) manage and operate the Trust Estate and exercise all the rights
and powers of Trustors in their name or otherwise with respect to the same;

(4) enter into agreements with others to exercise the powers herein
granted the Beneficiary or the Trustee, all as Beneficiary or the Trustee from
time to time may determine; and, subject to the absolute assignment of the Space
Leases and Rents to Beneficiary, Beneficiary or the Trustee may collect and
receive all the Rents, including those past due as well as those accruing
thereafter; and shall apply the monies so received by the Beneficiary or the
Trustee in such priority as Beneficiary may determine to (1) the payment of
interest and principal due and payable under the Loan Agreement, (2) the
deposits for taxes and assessments and insurance premiums due, (3) the cost of
insurance, taxes, assessments and other proper charges upon the Trust Estate or
any part thereof; (4) the compensation, expenses and disbursements of the
agents, attorneys and other representatives of Beneficiary or the Trustee; and
(5) any other charges or costs required to be paid by Trustors under the terms
hereof;

(5) rent or sublet the Trust Estate or any portion thereof for any
purpose permitted by this Deed of Trust.

Beneficiary or the Trustee shall surrender possession of the Trust Estate
to Trustors only when all Obligations shall have been paid and all defaults made
good. The same right of taking possession, however, shall exist if any
subsequent Event of Default shall occur.

4.6 Leases. Trustors are entitled to enter into leases and subleases of the
Trust Estate only in accordance with the Operative Documents. The failure to
make any subtenants of the Trust Estate parties defendant to any such
foreclosure proceedings and to foreclose their rights shall not be, nor be
asserted by Trustors to be, a defense to any proceedings instituted by
Beneficiary to collect the sums secured hereby or to collect any deficiency
remaining unpaid after the foreclosure sale of the Trust Estate, or any portion
thereof.

4.7 Purchase by Beneficiary. Upon any foreclosure sale (whether judicial or
nonjudicial) Beneficiary may bid for and purchase the property subject to such
sale and, upon compliance with the terms of sale, may hold, retain and possess
and dispose of such property in its own absolute right without further
accountability.

4.8 Waiver of Appraisement, Valuation, Stay, Extension and Redemption Laws.
Trustors agree to the full extent permitted by law that if an Event of Default
occurs, neither Trustors nor anyone claiming through or under them shall or will
set up, claim or seek to take advantage of any appraisement, valuation, stay,
extension or redemption laws now or hereafter in force, in order to prevent or
hinder the enforcement or foreclosure of this Deed of Trust or the absolute sale
of the Trust Estate or any portion thereof or the final and absolute putting
into possession thereof, immediately after such sale, of the purchasers thereof,
and Trustors for themselves and all who may at any time claim through or under
them, hereby waive, to the full extent that they may lawfully so do, the benefit
of all such laws, and any and all right to have the assets comprising the Trust
Estate marshaled upon any foreclosure of the lien hereof and agree that the
Trustee or any court having jurisdiction to foreclose such lien may sell the
Trust Estate in part or as an entirety.

4.9 Receiver. Upon the occurrence and during the continuance of any Event
of Default, Beneficiary, to the extent permitted by law and without regard to
the value, adequacy or occupancy of the security for the indebtedness and other
sums secured hereby, shall be entitled as a matter of right if it so elects to
the appointment of a receiver to enter upon and take possession of the Trust
Estate and to collect all Rents and apply the same as the court may direct, and
such receiver may be appointed by any court of competent jurisdiction upon
application by Beneficiary. Beneficiary may have a receiver appointed without
notice to Trustors or any third party, and Beneficiary may waive any requirement
that the receiver post a bond. Beneficiary shall have the power to designate and
select the Person who shall serve as the receiver and to negotiate all terms and
conditions under which such receiver shall serve. Any receiver appointed on
Beneficiary's behalf may be an Affiliate of Beneficiary. The expenses, including
receiver's fees, attorneys' fees, costs and agent's compensation, incurred
pursuant to the powers herein contained shall be secured by this Deed of Trust.
The right to enter and take possession of and to manage and operate the Trust
Estate and to collect all Rents, whether by a receiver or otherwise, shall be
cumulative to any other right or remedy, available to Beneficiary under this
Deed of Trust, under the Operative Documents or otherwise available to
Beneficiary and may be exercised concurrently therewith or independently
thereof. Beneficiary shall be liable to account only for such Rents (including,
without limitation, security deposits) actually received by Beneficiary, whether
received pursuant to this section or any other provision hereof. Notwithstanding
the appointment of any receiver or other custodian, Beneficiary shall be
entitled as pledgee to the possession and control of any cash, deposits, or
instruments at the time held by, or payable or deliverable under the terms of
this Deed of Trust to, Beneficiary.

4.10 Suits to Protect the Trust Estate. Beneficiary shall have the power
and authority to institute and maintain any suits and proceedings as
Beneficiary, in its sole and absolute discretion, may deem advisable (a) to
prevent any impairment of the Trust Estate by any acts which may be unlawful or
any violation of this Deed of Trust, (b) to preserve or protect its interest in
the Trust Estate, and (c) to restrain the enforcement of or compliance with any
legislation or other Legal Requirement that may be unconstitutional or otherwise
invalid, if the enforcement of or compliance with such enactment, rule or order
might impair the security hereunder or be prejudicial to Beneficiary's interest.

4.11 Proofs of Claim. In the case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceedings affecting Trustors, any Affiliate or any guarantor,
co-maker or endorser of any of Trustors' obligations, its creditors or its
property, Beneficiary, to the extent permitted by law, shall be entitled to file
such proofs of claim or other documents as it may deem be necessary or advisable
in order to have its claims allowed in such proceedings for the entire amount
due and payable by Trustors under this Deed of Trust or any other Operative
Document, at the date of the institution of such proceedings, and for any
additional amounts which may become due and payable by Trustors after such date.

4.12 Deficiencies; Application of Monies by Beneficiary.

(a) In case of a foreclosure sale of all or any part of the Trust Estate
and of the application of the proceeds of sale to the payment of the sums
secured hereby, Beneficiary shall be entitled to enforce payment from Trustors
of any additional amounts then remaining due and unpaid and to recover judgment
against Trustors for any portion thereof remaining unpaid, with interest at the
Overdue Rate.

(b) Trustors hereby agree to the extent permitted by law, that no recovery
of any such judgment by Beneficiary or other action by Beneficiary and no
attachment or levy of any execution upon any of the Trust Estate or any other
property shall in any way affect the Lien and security interest of this Deed of
Trust upon the Trust Estate or any part thereof or any Lien, rights, powers or
remedies of Beneficiary hereunder, but such Lien, rights, powers and remedies
shall continue unimpaired as before.

(c) Any monies collected or received by Beneficiary under this Section 4.12
shall be first applied to the payment of compensation, expenses and
disbursements of the agents, attorneys and other representatives of Beneficiary,
and the balance remaining shall be applied to the payment of amounts due and
unpaid under this Deed of Trust.

4.13 Delay or Omission, No Waiver. No delay or omission of Beneficiary to
exercise any right, power or remedy upon any Event of Default shall exhaust or
impair any such right, power or remedy or shall be construed to waive any such
Event of Default or to constitute acquiescence therein. Every right, power and
remedy given to Beneficiary whether contained herein or in the other Operative
Documents or otherwise available to Beneficiary may be exercised from time to
time and as often as may be deemed expedient by Beneficiary.

4.14 No Waiver of One Default to Affect Another. No waiver of any Event of
Default hereunder shall extend to or affect any subsequent or any other Event of
Default then existing, or impair any rights, powers or remedies consequent
thereon. If Beneficiary (a) grants forbearance or an extension of time for the
payment of any sums secured hereby; (b) takes other or additional security for
the payment thereof; (c) waives or does not exercise any right granted in this
Deed of Trust or any other Operative Document; (d) releases any part of the
Trust Estate from the lien or security interest of this Deed of Trust or any
other instrument securing the Obligations; (e) consents to the filing of any
map, plat or replat of the Hotel Site; (f) consents to the granting of any
easement on the Hotel Site; or (g) makes or consents to any agreement changing
the terms of this Deed of Trust or any Operative Document subordinating the lien
or any charge hereof, no such act or omission shall release, discharge, modify,
change or affect the original liability under this Deed of Trust or otherwise of
Trustors, or any subsequent purchaser of the Trust Estate or any part thereof or
any maker, co-signer, surety or guarantor. No such act or omission shall
preclude Beneficiary from exercising any right, power or privilege herein
granted or intended to be granted in case of any Event of Default then existing
or of any subsequent Event of Default, nor, except as otherwise expressly
provided in an instrument or instruments executed by Beneficiary, shall the lien
or security interest of this Deed of Trust be altered thereby, except to the
extent expressly provided in any releases, maps, easements or subordinations
described in clause (d), (e), (f) or (g) above of this Section 4.14. In the
event of the sale or transfer by operation of law or otherwise of all or any
part of the Trust Estate, Beneficiary, without notice to any person, firm or
corporation, is hereby authorized and empowered to deal with any such vendee or
transferee with reference to the Trust Estate or the indebtedness secured
hereby, or with reference to any of the terms or conditions hereof, as fully and
to the same extent as it might deal with the original parties hereto and without
in any way releasing or discharging any of the liabilities or undertakings
hereunder, or waiving its right to declare such sale or transfer an Event of
Default as provided herein. Notwithstanding anything to the contrary contained
in this Deed of Trust or any Operative Document (including, but not limited to,
any remedy provided for and in the manner set forth in the Loan Agreement), (i)
in the case of any non-monetary Event of Default, Beneficiary may continue to
accept payments due hereunder without thereby waiving the existence of such or
any other Event of Default and (ii) in the case of any monetary Event of
Default, Beneficiary may accept partial payments of any sums due hereunder
without thereby waiving the existence of such Event of Default if the partial
payment is not sufficient to completely cure such Event of Default.

4.15 Discontinuance of Proceedings; Position of Parties Restored. If
Beneficiary shall have proceeded to enforce any right or remedy under this Deed
of Trust by foreclosure, entry or otherwise and such proceedings shall have been
discontinued or abandoned for any reason, or such proceedings shall have
resulted in a final determination adverse to Beneficiary, then and in every such
case Trustors and Beneficiary shall be restored to their former positions and
rights hereunder, and all rights, powers and remedies of Beneficiary shall
continue as if no such proceedings had occurred or had been taken.

4.16 Remedies Cumulative. No right, power or remedy, including, without
limitation remedies with respect to any security for the Obligations, conferred
upon or reserved to Beneficiary by this Deed of Trust or any Operative Document
is exclusive of any other right, power or remedy, but each and every such right,
power and remedy shall be cumulative and concurrent and shall be in addition to
any other right, power and remedy given hereunder or under any Operative
Document, now or hereafter existing at law, in equity or by statute, and
Beneficiary shall be entitled to resort to such rights, powers, remedies or
security as Beneficiary shall in its sole and absolute discretion deem
advisable.

4.17 Interest After Event of Default. If an Event of Default shall have
occurred and is continuing, all sums outstanding and unpaid under this Deed of
Trust and the Operative Documents shall, at Beneficiary's option, bear interest
at the Overdue Rate until such Event of Default has been cured. Trustors'
obligation to pay such interest shall be secured by this Deed of Trust.

4.18 Foreclosure, Expenses of Litigation. If foreclosure be made by the
Trustee, reasonable attorneys' fees for services in the supervision of said
foreclosure proceeding shall be allowed to the Trustee and Beneficiary as part
of the foreclosure costs. In the event of foreclosure of the lien hereof, there
shall be allowed and included as additional indebtedness all reasonable
expenditures and expenses which may be paid or incurred by or on behalf of
Beneficiary for attorneys' fees, appraiser's fees, outlays for documentary and
expert evidence, stenographers' charges, publication costs, and costs (which may
be estimated as to items to be expended after foreclosure sale or entry of the
decree) of procuring all such abstracts of title, title searches and
examinations, title insurance policies and guaranties, and similar data and
assurances with respect to title as Beneficiary may deem reasonably advisable
either to prosecute such suit or to evidence to a bidder at any sale which may
be had pursuant to such decree the true condition of the title to or the value
of the Trust Estate or any portion thereof. All expenditures and expenses of the
nature in this section mentioned, and such expenses and fees as may be incurred
in the protection of the Trust Estate and the maintenance of the lien and
security interest of this Deed of Trust, including the fees of any attorney
employed by Beneficiary in any litigation or proceeding affecting this Deed of
Trust or any Operative Document, the Trust Estate or any portion thereof,
including, without limitation, civil, probate, appellate and bankruptcy
proceedings, or in preparation for the commencement or defense of any proceeding
or threatened suit or proceeding, shall be immediately due and payable by
Trustors, with interest thereon at the Overdue Rate, and shall be secured by
this Deed of Trust. Trustee waives its right to any statutory fee in connection
with any judicial or nonjudicial foreclosure of the lien hereof and agrees to
accept a reasonable fee for such services.

4.19 Deficiency Judgments. If after foreclosure of this Deed of Trust or
Trustee's sale hereunder, there shall remain any deficiency with respect to any
amounts payable under the Operative Documents or hereunder or any amounts
secured hereby, and Beneficiary shall institute any proceedings to recover such
deficiency or deficiencies, all such amounts shall continue to bear interest at
the Overdue Rate. Trustors waive any defense to Beneficiary's recovery against
Trustors of any deficiency after any foreclosure sale of the Trust Estate.
Trustors expressly waive any defense or benefits that may be derived from any
statute granting Trustors any defense to any such recovery by Beneficiary. In
addition, Beneficiary and Trustee shall be entitled to recovery of all of their
reasonable costs and expenditures (including without limitation any court
imposed costs) in connection with such proceedings, including their reasonable
attorneys' fees, appraisal fees and the other costs, fees and expenditures
referred to in Section 4.18 above. This provision shall survive any foreclosure
or sale of the Trust Estate, any portion thereof and/or the extinguishment of
the lien hereof.

4.20 Waiver of Jury Trial. Beneficiary and Trustors each waive any right to
have a jury participate in resolving any dispute, whether sounding in contract,
tort or otherwise arising out of, connected with, related to, or incidental to
the relationship established between them in connection with this Deed of Trust
or any Operative Document. Any such disputes shall be resolved in a bench trial
without a jury.

ARTICLE V

RIGHTS AND RESPONSIBILITIES OF TRUSTEE;
OTHER PROVISIONS RELATING TO TRUSTEE

Notwithstanding anything to the contrary in this Deed of Trust, Trustors
and Beneficiary agree as follows.

5.1 Exercise of Remedies by Trustee. To the extent that this Deed of Trust
or applicable law authorizes or empowers Beneficiary to exercise any remedies
set forth in Article IV hereof or otherwise, or perform any acts in connection
therewith, Trustee (but not to the exclusion of Beneficiary unless so required
under the law of the State of Mississippi) shall have the power to exercise any
or all such remedies, and to perform any acts provided for in this Deed of Trust
in connection therewith, all for the benefit of Beneficiary and on Beneficiary's
behalf in accordance with applicable law of the State of Mississippi. In
connection therewith, Trustee: (a) shall not exercise, or waive the exercise of,
any Beneficiary's Remedies (other than any rights or Trustee to any indemnity or
reimbursement), except at Beneficiary's request, and (b) shall exercise, or
waive the exercise of, any or all of Beneficiary's remedies at Beneficiary's
request, and in accordance with Beneficiary's directions as to the manner of
such exercise or waiver. Trustee may, however, decline to follow Beneficiary's
request or direction if Trustee shall be advised by counsel that the action or
proceeding, or manner thereof, so directed may not lawfully be taken or waived.

5.2 Rights and Privileges of Trustee. To the extent that this Deed of Trust
requires Trustors to indemnify Beneficiary or reimburse Beneficiary for any
expenditures Beneficiary may incur, Trustee shall be entitled to the same
indemnity and the same rights to reimbursement of expenses as Beneficiary,
subject to such limitations and conditions as would apply in the case of
Beneficiary. To the extent that this Deed of Trust negates or limits
Beneficiary's liability as to any matter Trustee shall be entitled to the same
negation or limitation of liability. To the extent that Trustors, pursuant to
this Deed of Trust, appoint Beneficiary as Trustors' attorney in fact for any
purpose, Beneficiary or (when so instructed by Beneficiary) Trustee shall be
entitled to act on Trustors' behalf without joinder or confirmation by the
other.

5.3 Resignation or Replacement of Trustee. Trustee may resign by an
instrument in writing addressed to Beneficiary, or Trustee may be removed at any
time with or without cause (i.e., in Beneficiary's sole and absolute discretion)
by an instrument in writing executed by Beneficiary. In case of the death,
resignation, removal or disqualification of Trustee or if for any reason
Beneficiary shall deem it desirable to appoint a substitute, successor or
replacement Trustee to act instead of the Trustee originally named (or in place
of any substitute, successor or replacement Trustee), then Beneficiary shall
have the right and is hereby authorized and empowered to appoint a successor,
substitute or replacement Trustee, without any formality other than appointment
and designation in writing executed by Beneficiary, which instrument shall be
recorded if required by the law of the State of Mississippi. The law of the
State of Mississippi shall govern the qualifications of any Trustee. The
authority conferred upon Trustee by this Deed of Trust shall automatically
extend to any and all other successor, substitute and replacement Trustee(s)
successively until the Obligations have been paid in full or the Trust Estate
has been sold hereunder or released in accordance with the provisions of the
Operative Documents. Beneficiary's written appointment and designation of any
Trustee shall be full evidence of Beneficiary's right and authority to make the
same and of all facts therein recited. No confirmation, authorization, approval
or other action by Trustors shall be required in connection with any resignation
or other replacement of Trustee.

5.4 Authority of Beneficiary. If Beneficiary is a corporation or a national
banking association and the instrument of appointment of any successor or
replacement Trustee is executed on Beneficiary's behalf by an officer of such
corporation or national banking association, then such appointment shall be
conclusively presumed to be executed with authority and shall be valid and
sufficient without proof of any action by the board of directors or any superior
officer of Beneficiary.

5.5 Effect of Appointment of Successor Trustee. Upon the appointment and
designation of any successor, substitute or replacement Trustee, Trustee's
entire estate and title in the Trust Estate shall vest in the designated
successor, substitute or replacement Trustee. Such successor, substitute or
replacement Trustee shall thereupon succeed to and shall hold, possess and
execute all the rights, powers, privileges, immunities and duties herein
conferred upon Trustee. All references herein to Trustee shall be deemed to
refer to Trustee (including any successor or substitute appointed and designated
as herein provided) from time to time acting hereunder.

5.6 Confirmation of Transfer and Succession. Upon the written request of
Beneficiary or of any successor, substitute or replacement Trustee, any former
Trustee ceasing to act shall execute and deliver an instrument transferring to
such successor, substitute or replacement Trustee all of the right, title,
estate and interest in the Trust Estate of the Trustee so ceasing to act,
together with all the rights, powers, privileges, immunities and duties herein
conferred upon Trustee, and shall duly assign, transfer and deliver all
properties and moneys held by said Trustee hereunder to said successor,
substitute or replacement Trustee.

5.7 Ratification. Trustors hereby ratify and confirm any and all acts that
any Trustee may take or perform by virtue of this Deed of Trust.

5.8 Exculpation. Trustee shall not be liable for any error of judgment or
act done by Trustee in good faith, or otherwise be responsible or accountable
under any circumstances whatsoever, except for Trustee's gross negligence,
willful misconduct or knowing violation of law. Trustee shall have the right to
rely on any instrument, document or signature authorizing or supporting any
action taken or proposed to be taken by it hereunder, believed by it in good
faith to be genuine. All moneys received by Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were
received, but need not be segregated in any manner from any other moneys (except
to the extent required by law). Trustee shall be under no liability for interest
on any moneys received by it hereunder.

5.9 Endorsement and Execution of Documents. Upon Beneficiary's written
request, Trustee shall, without liability or notice to Trustors, execute,
consent to, or join in any instrument or agreement in connection with or
necessary to effectuate the purposes of the Operative Documents. Trustors hereby
irrevocably designate Trustee as their attorney in fact to execute, acknowledge
and deliver, on Trustors' behalf and in Trustors' name, all instruments or
agreements necessary to implement any provision(s) of this Deed of Trust or to
further perfect the lien created by this Deed of Trust on the Trust Estate. This
power of attorney shall be deemed to be coupled with an interest and shall
survive any disability of Trustors.

5.10 Multiple Trustees. If Beneficiary appoints multiple trustees, then any
Trustee, individually, may exercise all powers granted to Trustee under this
instrument, without the need for action by any other Trustee(s).

5.11 Terms of Trustee's Acceptance. Trustee accepts the trust
created by this Deed of Trust upon the following terms and conditions.

(a) Delegation. Trustee may exercise any of its powers through
appointment of attorney(s) in fact or agents.

(b) Counsel. Trustee may select and employ legal counsel (including any law
firm representing Beneficiary). Trustors shall reimburse all reasonable legal
fees and expenses that Trustee may thereby incur.

(c) Security. Trustee shall be under no obligation to take any action upon
any Event of Default unless furnished security or indemnity, in form
satisfactory to Trustee, against costs, expenses, and liabilities that Trustee
may incur.

(d) Costs and Expenses. Trustors shall reimburse Trustee, as part of the
Obligations secured hereunder, for all reasonable disbursements and expenses
(including legal fees and expenses) incurred by reason of and as provided for in
this Deed of Trust, including any of the foregoing incurred in Trustee's
administering and executing the trust created by this Deed of Trust and
performing Trustee's duties and exercising Trustee's powers under this Deed of
Trust.

(e) Release. Upon payment of the Obligations secured hereunder, Beneficiary
shall request Trustee to release this Deed of Trust and shall surrender all the
Obligations secured hereunder to Trustee. Trustors shall pay all costs of
recordation, if any.

ARTICLE VI

MISCELLANEOUS PROVISIONS

6.1 Heirs, Successors and Assigns Included in Parties. Whenever one of the
parties hereto is named or referred to herein, the heirs, successors and assigns
of such party shall be included, and subject to the limitations set forth in
Section 1.16, all covenants and agreements contained in this Deed of Trust, by
or on behalf of Trustors or Beneficiary shall bind and inure to the benefit of
its heirs, successors and assigns, whether so expressed or not.

6.2 Intentionally Omitted.

6.3 Addresses for Notices, Etc.

(a) Any notice, report, demand or other instrument authorized or required
to be given or furnished under this Deed of Trust to Trustors, Trustee or
Beneficiary shall be deemed given or furnished when addressed to the party
intended to receive the same, at the address of such party set forth below, and
delivered at such address:

Beneficiary: BA Leasing & Capital Corporation
Four Embarcadero Center - Suite 1200
San Francisco, California 94111
Attention: Ms. Sonia T. Delen

With a copy to: Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: Douglas L. Wisner, Esq.

Trustor: BL Development Corp.
13705 First Avenue North
Plymouth, Minnesota 55441-5451
Attention: Chief Financial Officer

With a copy to: Brian J. Klein, Esq.
Maslon Edelman Borman & Brand
3300 Norwest Center
Minneapolis, Minnesota 55402

Ground Lease
Trustor: Hancock Bank
2510 14th Street
One Hancock Plaza
Gulfport, Mississippi 39501
Attention: Ms. Karen Thigpen

With a copy to: Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: Douglas L. Wisner, Esq.

Trustee: Mr. James R. McIlwain
c/o Hancock Bank
One Hancock Plaza
Gulfport, Mississippi 39501

With a copy to: Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: Douglas L. Wisner, Esq.

(b) Any person may change the address to which any such notice, report,
demand or other instrument is to be delivered or mailed to that person, by
furnishing written notice of such change to the other party, but no such notice
of change shall be effective unless and until received by such other party.

6.4 Headings. The headings of the articles, sections, paragraphs and
subdivisions of this Deed of Trust are for convenience of reference only, are
not to be considered a part hereof, and shall not limit or expand or otherwise
affect any of the terms hereof.

6.5 Invalid Provisions to Affect No Others. In the event that any of the
covenants, agreements, terms or provisions contained herein or in any Operative
Document shall be invalid, illegal or unenforceable in any respect, the validity
of the lien hereof and the remaining covenants, agreements, terms or provisions
contained herein or in any other Operative Document shall be in no way affected,
prejudiced or disturbed thereby. To the extent permitted by law, Trustors waive
any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.

6.6 Changes and Priority Over Intervening Liens. Neither this Deed of Trust
nor any term hereof may be changed, waived, discharged or terminated orally, or
by any action or inaction, but only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge or termination
is sought. Any agreement hereafter made by Trustors and Beneficiary relating to
this Deed of Trust shall be superior to the rights of the holder of any
intervening lien or encumbrance.

6.7 Estoppel Certificates. Within ten Business Days after Beneficiary's
written request, Trustors shall from time to time execute a certificate, in
recordable form (an "Estoppel Certificate), stating: (a) the current amount of
the Obligations secured hereunder and all elements thereof, including principal,
interest, and all other elements; (b) Trustors have no defense, offset, claim,
counterclaim, right of recoupment, deduction, or reduction against any of the
Obligations secured hereunder; (c) none of the Operative Documents have been
amended, whether orally or in writing or, if there have been any amendments, the
date and nature of each amendment; (d) Trustors have no claim against
Beneficiary of any kind; (e) any power of attorney granted to Beneficiary is in
full force and effect; and (f) such other matters relating to this Deed of
Trust, any Operative Documents and the relationship of Trustors and Beneficiary
as Beneficiary shall request.

6.8 Governing Law. This Deed of Trust was negotiated in New York, and made
by Beneficiary and accepted by Trustors in the State of New York, which State
the parties agree has a substantial relationship to the parties and to the
underlying transaction embodied hereby. This Deed of Trust and the Obligations
arising hereunder shall be governed by, and construed in accordance with, the
laws of the State of New York applicable to contracts made and performed in such
State and any applicable law of the United States of America, including, without
limiting the generality of the foregoing, matters of construction, validity and
performance, except that at all times the provisions for the creation,
perfection, and enforcement of the liens and security interests created pursuant
hereto shall be governed by and construed according to the law of Mississippi,
including Gaming Laws, it being understood that, to the fullest extent permitted
by law of Mississippi, the law of the State of New York shall govern the
validity and the enforceability of this Deed of Trust and the Obligations
arising hereunder. To the fullest extent permitted by law, Trustors hereby
unconditionally and irrevocably waive any claim to assert that the law of any
other jurisdiction governs this Deed of Trust, the Note and the other Operative
Documents and this Deed of Trust, the Note and the other Operative Documents
shall be governed by and construed in accordance with the laws of the State of
New York pursuant to 5-1401 of the New York General Obligations Law.

Any legal suit, action or proceeding against Beneficiary, Trustee or
Trustors arising out of or relating to this Deed of Trust shall be instituted in
any federal or state court in New York, New York, pursuant to 5-1402 of the
New York General Obligations Law, or at Beneficiary's option, in the State of
Mississippi with respect to the exercise by Beneficiary of any of its rights and
remedies relating to any portion of the Trust Estate within Mississippi, and
Trustors waive any objection which it may now or hereafter have to the laying of
venue of any such suit, action or proceeding. Trustors hereby irrevocably submit
to the jurisdiction of any such court in any suit, action or proceeding.
Trustors hereby accept and acknowledge service of any and all process which may
be served in any such suit, action or proceeding in any federal or state court
in New York, New York, and agree that service of process at the address provided
for herein shall be deemed in every respect effective service of process upon
Trustors, in any such suit, action or proceeding in the State of New York.

6.9 Required Notices. Trustors shall notify Beneficiary promptly of the
occurrence of any of the following and provide Beneficiary a copy of any notice
or documents referred to: (i) receipt of notice from any Governmental Authority
relating to all or any material part of the Trust Estate if such notice relates
to a default, act, occasion or circumstance that could materially affect the
lien hereby granted against the Trust Estate or the value of the Trust Estate as
collateral; (ii) receipt of notice from a tenant leasing all or any material
portion of the Trust Estate if such notice relates to a default or act, omission
or circumstance that could materially affect the lien hereby granted against the
Trust Estate or the value of the Trust Estate as collateral; (iii) receipt of
notice from the holder of any Permitted Lien relating to a default if such
default could materially affect the lien hereby granted against the Trust Estate
or the value of the Trust Estate as collateral; (iv) the commencement of any
proceeding or the entry of any judgment, decree or order having a Material
Adverse Effect on all or any portion of the Trust Estate; or (v) commencement of
any judicial or administrative proceeding or the entry of any judgment, decree
or order by or against or otherwise affecting Trustors or any Affiliate of
Trustors, a material portion of the Trust Estate or material portion of any
personal property or any other action by any creditor or lessor thereof that
could materially affect the lien hereby granted against the Trust Estate or the
value of the Trust Estate as collateral.

6.10 Reconveyance. Upon written request of Beneficiary stating that all
sums secured hereby have been paid, and upon surrender of this Deed of Trust to
the Trustee for cancellation and retention and upon payment of its fees, the
Trustee shall reconvey, without warranty, the property then held hereunder. The
recitals in such reconveyance of any matters or facts shall be conclusive proof
of the truthfulness thereof. The grantee in such reconveyance may be described
as "the person or persons legally entitled thereto."

6.11 Attorneys' Fees. Without limiting any other provision contained
herein, Trustors agree to pay all costs of Beneficiary or Trustee incurred in
connection with the enforcement of this Deed of Trust, including without
limitation all reasonable attorneys' fees whether or not suit is commenced, and
including, without limitation, fees incurred in connection with any probate,
appellate, bankruptcy, deficiency or any other litigation proceedings, all of
which sums shall be secured hereby.

6.12 Late Charges. By accepting payment of any sum secured hereby after its
due date, Beneficiary does not waive its right to collect any late charge
thereon or interest thereon at the Overdue Rate, if so provided, not then paid
or its right either to require prompt payment when due of all other sums so
secured or to declare default for failure to pay any amounts not so paid.

6.13 Cost of Accounting. Trustors shall pay to Beneficiary, for and on
account of the preparation and rendition of any accounting, which Trustors may
be entitled to require under any law or statute now or hereafter providing
therefor, the reasonable costs thereof.

6.14 Right of Entry. Beneficiary may at any reasonable time or times make
or cause to be made entry upon and inspections of the Trust Estate or any part
thereof in person or by agent; provided that any such entry or inspections shall
be made in such a manner so as to minimize any disruption to the business
operations of Trustors.

6.15 Corrections. Trustors shall, upon request of Trustee, promptly correct
any defect, error or omission which may be discovered in the contents of this
Deed of Trust or in the execution or acknowledgment hereof, and shall execute,
acknowledge and deliver such further instruments and do such further acts as may
be necessary or as may be reasonably requested by Trustee to carry out more
effectively the purposes of this Deed of Trust, to subject to the lien and
security interest hereby created in any of Trustors' properties, rights or
interest covered or intended to be covered hereby, and to perfect and maintain
such lien and security interest.

6.16 Statute of Limitations. To the fullest extent allowed by the law, the
right to plead, use or assert any statute of limitations as a plea or defense or
bar of any kind, or for any purpose, to any debt, demand or obligation secured
or to be secured hereby, or to any complaint or other pleading or proceeding
filed, instituted or maintained for the purpose of enforcing this Deed of Trust
or any rights hereunder, is hereby waived by Trustors.

6.17 Joint and Several Liability. All obligations of Trustor hereunder, if
more than one, are joint and several. Recourse for deficiency after sale
hereunder may be had against the property of Trustor, without, however, creating
a present or other lien or charge thereon.

6.18 Context. In this Deed of Trust, whenever the context so requires, the
neuter includes the masculine and feminine, and the singular including the
plural, and vice versa.

6.19 Time. Time is of the essence of each and every term, covenant
and condition hereof. Unless otherwise specified herein, any reference to
"days" in this Deed of Trust shall be deemed to mean "calendar days."

6.20 Interpretation. As used in this Deed of Trust unless the context
clearly requires otherwise: The terms "herein" or "hereunder" and similar terms
without reference to a particular section shall refer to the entire Deed of
Trust and not just to the section in which such terms appear; the term "lien"
shall also mean a security interest, and the term "security interest" shall also
mean a lien.

6.21 Limitation of Liability. Notwithstanding anything herein to the
contrary, the parties hereto acknowledge and agree (a) that the obligations
herein imposed on the Ground Lease Trustor and representations, covenants and
warranties made herein by Ground Lease Trustor are all subject to the other
Operative Documents, and (b) Ground Lease Trustor, its officers, employees and
agents shall have no personal liability whatsoever arising from or in any way
relating to (i) failure of the Ground Lease Trustor to fulfill any obligation
herein imposed on the Ground Lease Trustor, (ii) any misrepresentation made
herein by the Ground Lease Trustor (iii) the breach of any covenant or warranty
made herein by Ground Lease Trustor, it being understood that the liability of
the Ground Lease Trustor hereunder for any such failure, misrepresentation or
breach is limited to the Trust Estate.

ARTICLE VII

POWER OF ATTORNEY

7.1 Grant of Power. Trustors irrevocably appoint Beneficiary and any
successor thereto as their attorney-in-fact, with full power and authority,
including the power of substitution, exercisable upon an Event of Default to act
for Trustors in their name, place and stead as hereinafter provided:

(a) Possession and Completion. To take possession of the Trust Estate,
remove all employees, contractors and agents of Trustors therefrom, complete or
attempt to complete the work of construction, and market, sell or lease the
Trust Estate.

(b) Employment of Others. To employ such contractors, subcontractors,
suppliers, architects, inspectors, consultants, property managers and other
agents as Beneficiary, in its discretion, deems proper for the protection or
clearance of title to the Trust Estate, or for the protection of Beneficiary's
interests with respect thereto.

(d) Compromise Claims. To pay, settle or compromise all bills and claims
then existing or thereafter arising against Trustors, which Beneficiary, in its
discretion, deems proper for the protection or clearance of title to the Trust
Estate, or for the protection of Beneficiary's interests with respect thereto.

(e) Legal Proceedings. To prosecute and defend all actions and
proceedings in connection with the Trust Estate.

(f) Other Acts. To execute, acknowledge and deliver all other instruments
and documents in the name of Trustors that are necessary or desirable, to
exercise Trustors' rights under all contracts concerning the Trust Estate,
including, without limitation, under the Ground Lease, and to do all other acts
with respect to the Trust Estate that Trustors might do on their own behalf, as
Beneficiary, in its reasonable discretion, deems proper.

ARTICLE VIII

SUBORDINATION

Trustor hereby acknowledges and agrees that the fee ownership interest of
the Trustor in the Hotel Site shall be subject and subordinate to all right,
title and interest of Ground Lease Trustor under the Ground Lease in and to the
Hotel Site, and to all right, title and interest of Beneficiary under this Deed
of Trust. Trustor acknowledges that it has no rights in and to the Trust Estate
and Trustor has entered into this Deed of Trust as a means of subordinating its
fee simple interest in the Hotel Site to the Ground Lease.

DEED OF TRUST (RESORT HOTEL)

IN WITNESS WHEREOF, the undersigned have executed this Deed of Trust,
Assignment of Rents and Leases and Security Agreement as of the day and year
first above written with the actual execution on the dates set forth in the
respective acknowledgments below.

BL DEVELOPMENT CORP.
a Minnesota corporation,
as Trustor

By:/s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer

STATE OF MINNESOTA)
) ss:
COUNTY OF HENNEPIN)

Personally appeared before me, the undersigned authority in and for
the said county and state, on this 16th day of May, 1996, within my
jurisdiction, the within named Timothy J. Cope who acknowledged that he is the
Chief Financial Officer of BL Development Corp., a Minnesota corporation, and
that for and on behalf of the said corporation, and as its act and deed he
executed the above and foregoing instrument, after first having been duly
authorized by said corporation to do so.

/s/ PATRICIA L. BUFFHAM
----------------------------------
NOTARY PUBLIC

My Commission expires:

- --------------------------------
(Affix official seal, if applicable)

DEED OF TRUST (RESORT HOTEL)

HANCOCK BANK, not in its individual capacity but solely as Lessor and Trustee
pursuant to the Participation Agreement, as Ground Lease Trustor

By: /s/ C. H. GIBBONS
Name: C. H. Gibbons
Title: Vice President & Trust Officer

STATE OF MISSISSIPPI)
) ss:
COUNTY OF HARRISON )

Personally appeared before me, the undersigned authority in and for the
said county and state, on this 13th day of May, 1996, within my jurisdiction,
the within named C. H. Gibbons who acknowledged that he is Vice President &
Trust Officer of Hancock Bank, a state banking association, and that for and on
behalf of the said bank, and as its act and deed in the representative capacity
therein stated he executed the above and foregoing instrument, after first
having been duly authorized by said bank to do so.

----------------------------------
NOTARY PUBLIC

My Commission expires:

My Commission Expires Dec. 26, 1998
- --------------------------------
(Affix official seal, if applicable)

SCHEDULE A

LEGAL DESCRIPTION

All that tract or parcel of land lying and being in part of the Northwest
1/4 and the Southwest 1/4 of Section 5, Township 3 South, Range 10 West, Tunica
County, Mississippi, as shown as containing 10.14 acres on that certain plat
prepared by Rosser Lowe, a division of Rosser International, Inc. (William J.
Daniel III, MS PLS No. 2031), entitled Boundary Survey of Hotel I Site, dated 19
April 1996, last revised May 6, 1996 and being more particularly described as
follows:

BEGINNING at a point at the intersection of the northerly line of a
proposed private drive and the easterly right-of-way line of Village Center Road
(variable width right-of-way);

This instrument prepared by TUNICA
and when recorded mail to: (MISSISSIPPI)
EQUIPMENT ON CASINO BARGES
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attn: Douglas L. Wisner, Esq.
(212) 506-2500

DEED OF TRUST AND SECURITY AGREEMENT

Dated as of May 10, 1996

BY AND AMONG

BL DEVELOPMENT CORP.,
a Minnesota corporation,
as Trustor

HANCOCK BANK,
not in its individual capacity,
but solely as Lessor and Trustee pursuant
to the Lease and Trust Agreement,
as Trustor

JAMES R. McILWAIN
an individual,
as Trustee

and

HANCOCK BANK,
not in its individual capacity,
but solely as Lessor and Trustee pursuant
to the Lease and Trust Agreement,
as Beneficiary

and

BA LEASING & CAPITAL CORPORATION, a
California corporation, in its capacity as Agent,
as Beneficiary

*******************************************************************************

THIS INSTRUMENT IS TO BE FILED AND INDEXED IN THE REAL ESTATE RECORDS
OF TUNICA COUNTY, MISSISSIPPI UNDER THE NAME OF BL DEVELOPMENT CORP.
(FEDERAL I.D. NO. 41-1754530) AS "TRUSTOR" AND HANCOCK BANK (FEDERAL I.D.
NO. 640169065) AS "TRUSTOR".

THIS IS A FIXTURE FILING AND THE RECORD OWNER OF THE PROPERTY LOCATED
IN THE COUNTY OF TUNICA, STATE OF MISSISSIPPI IS THE BOARD OF LEVEE
COMMISSIONERS FOR THE YAZOO-MISSISSIPPI DELTA.

INDEXING INSTRUCTIONS:

This instrument affects real and personal property situated, lying and being in
the County of Tunica, State of Mississippi, known as follows:

Sections: 5 and 6
Township: 3 South
Range: 10 West

This instrument secures a line of credit to be used primarily for business,
commercial or agricultural purposes and is entitled to the lien protection
provisions of Section 89-1-49 of the Mississippi Code of 1972, as amended.

TABLE OF CONTENTS

Section Page

ARTICLE I

COVENANTS OF TRUSTOR

1.1 Performance of Port Facility Lease and Operative Documents . . 5
1.2 General Representations, Covenants and Warranties. . . . . . . 5
1.3 Compliance with Legal Requirements . . . . . . . . . . . . . . 6
1.4 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.5 Insurance/Casualty . . . . . . . . . . . . . . . . . . . . . . 6
1.6 Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.7 Care of Trust Estate . . . . . . . . . . . . . . . . . . . . . 6
1.8 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . 6
1.9 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.10 Further Encumbrance. . . . . . . . . . . . . . . . . . . . . . 7
1.11 Further Assurances . . . . . . . . . . . . . . . . . . . . . . 7
1.12 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.13 Beneficiary's Cure of Trustor' Default . . . . . . . . . . . . 8
1.14 Compliance with Permitted Lien Agreements. . . . . . . . . . . 8
1.15 Use of Levee Board Land. . . . . . . . . . . . . . . . . . . . 8
1.16 Taxes on Beneficiary . . . . . . . . . . . . . . . . . . . . . 9
1.17 Additional Taxes . . . . . . . . . . . . . . . . . . . . . . . 9
1.18 Defense of Actions . . . . . . . . . . . . . . . . . . . . . . 9
1.19 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.20 Future Advances. . . . . . . . . . . . . . . . . . . . . . . . 9
1.21 Security Agreement and Financing Statements. . . . . . . . . . 9

ARTICLE II

CORPORATE LOAN PROVISIONS

2.1 Interaction with other Operative Documents.. . . . . . . . . . 11

ARTICLE III

DEFAULTS

3.1 Event of Default . . . . . . . . . . . . . . . . . . . . . . . 11

<PAGE>

ARTICLE IV

REMEDIES

4.1 Acceleration of Maturity . . . . . . . . . . . . . . . . . . . 11
4.2 Protective Advances. . . . . . . . . . . . . . . . . . . . . . 11
4.3 Institution of Equity Proceedings. . . . . . . . . . . . . . . 11
4.4 Beneficiary's Power of Enforcement . . . . . . . . . . . . . . 12
4.5 Beneficiary's Right to Enter and Take Possession, Operate
and Apply Income. . . . . . . . . . . . . . . . . . . . . 13
4.6 Purchase by Beneficiary. . . . . . . . . . . . . . . . . . . . 13
4.7 Waiver of Appraisement, Valuation, Stay, Extension and
Redemption Laws . . . . . . . . . . . . . . . . . . . . . 13
4.8 Receiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.9 Suits to Protect the Trust Estate. . . . . . . . . . . . . . . 14
4.10 Proofs of Claim. . . . . . . . . . . . . . . . . . . . . . . . 14
4.11 Deficiencies; Application of Monies by Beneficiary . . . . . . 14
4.12 Delay or Omission, No Waiver . . . . . . . . . . . . . . . . . 15
4.13 No Waiver of One Default to Affect Another . . . . . . . . . . 15
4.14 Discontinuance of Proceedings; Position of Parties Restored. . 15
4.15 Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . 16
4.16 Interest After Event of Default. . . . . . . . . . . . . . . . 16
4.17 Foreclosure, Expenses of Litigation. . . . . . . . . . . . . . 16
4.18 Deficiency Judgments . . . . . . . . . . . . . . . . . . . . . 16
4.19 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . 16

ARTICLE V

RIGHTS AND RESPONSIBILITIES OF TRUSTEE;
OTHER PROVISIONS RELATING TO TRUSTEE

5.1 Exercise of Remedies by Trustee. . . . . . . . . . . . . . . . 17
5.2 Rights and Privileges of Trustee . . . . . . . . . . . . . . . 17
5.3 Resignation or Replacement of Trustee. . . . . . . . . . . . . 17
5.4 Authority of Beneficiary . . . . . . . . . . . . . . . . . . . 18
5.5 Effect of Appointment of Successor Trustee . . . . . . . . . . 18
5.6 Confirmation of Transfer and Succession. . . . . . . . . . . . 18
5.7 Ratification . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.8 Exculpation. . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.9 Endorsement and Execution of Documents . . . . . . . . . . . . 18
5.10 Multiple Trustees. . . . . . . . . . . . . . . . . . . . . . . 18
5.11 Terms of Trustee's Acceptance. . . . . . . . . . . . . . . . . 18

<PAGE>

ARTICLE VI

MISCELLANEOUS PROVISIONS

6.1 Heirs, Successors and Assigns Included in Parties. . . . . . . 19
6.2 Intentionally Omitted. . . . . . . . . . . . . . . . . . . . . 19
6.3 Addresses for Notices, Etc . . . . . . . . . . . . . . . . . . 19
6.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.5 Invalid Provisions to Affect No Others . . . . . . . . . . . . 20
6.6 Changes and Priority Over Intervening Liens. . . . . . . . . . 21
6.7 Estoppel Certificates. . . . . . . . . . . . . . . . . . . . . 21
6.8 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 21
6.9 Required Notices . . . . . . . . . . . . . . . . . . . . . . . 21
6.10 Reconveyance . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.11 Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . . 22
6.12 Late Charges . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.13 Cost of Accounting . . . . . . . . . . . . . . . . . . . . . . 22
6.14 Right of Entry . . . . . . . . . . . . . . . . . . . . . . . . 22
6.15 Corrections. . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.16 Statute of Limitations . . . . . . . . . . . . . . . . . . . . 22
6.17 Joint and Several Liability. . . . . . . . . . . . . . . . . . 23
6.18 Context. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.19 Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.20 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . 23
6.21 Limitation of Liability. . . . . . . . . . . . . . . . . . . . 23

ARTICLE VII

POWER OF ATTORNEY

7.1 Grant of Power . . . . . . . . . . . . . . . . . . . . . . . . 23

Schedule A Legal Description
Schedule B Equipment

Appendix 1 - Definitions

DEED OF TRUST AND SECURITY
AGREEMENT

THIS DEED OF TRUST AND SECURITY AGREEMENT (hereinafter called "Deed of
Trust") is made as of May 10, 1996, by BL DEVELOPMENT CORP., a Minnesota
corporation, whose address is 13705 First Avenue North, Plymouth, Minnesota
55441-5451 and HANCOCK BANK, not in its individual capacity, but solely in its
capacity as Lessor and Trustee pursuant to the Lease and Trust Agreement, whose
address is One Hancock Plaza, Gulfport, Mississippi 39501 (Hancock Bank,
together with BL Development Corp., collectively, as "Trustor"), to JAMES R.
McILWAIN, an individual, whose address is c/o Hancock Bank, One Hancock Plaza,
Gulfport, Mississippi 39501 ("Trustee"), HANCOCK BANK, not in its individual
capacity, but solely in its capacity as Lessor and Trustee pursuant to the Lease
and Trust Agreement, whose address is One Hancock Plaza, Gulfport, Mississippi
39501 and BA LEASING & CAPITAL CORPORATION, a California corporation, as Agent
for the benefit of the Lenders pursuant to the Loan Agreement, whose address is
Four Embarcadero Center, Suite 1200, San Francisco, California 94111 (together
with Hancock Bank, collectively the "Beneficiary").

"Affiliate" shall have the meaning set forth in Appendix 1.

"Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C.
Section 101 et seq.

"Bankruptcy Law" means Title 11, United States Code, and any other state or
federal insolvency, reorganization, moratorium or similar law for the relief of
debtors.

"Beneficiary" shall have the meaning provided for in the preamble.

"Business Day" shall have the meaning set forth in Appendix 1.

"Casino Barges" means collectively, the following vessels: Diamond
Lakes I (Official No. 1029587), Diamond Lakes II (Official No. 1029588),
Diamond Lakes III (Official No. 1029589), Cape Cod (Official No. 1039646)
and St. Clair (Official No. 1039647).

"Casualty" shall have the meaning set forth in Appendix 1.

"Casualty Recoveries" shall have the meaning set forth in Appendix 1.

"Environmental Law" shall have the meaning set forth in Appendix 1.

"Equipment" shall mean each item listed on Schedule B attached hereto and
incorporated herein by reference, together with any substitutions therefor,
replacements thereof and additions thereto from time to time pursuant to the
Operative Documents.

"Event of Default" shall have the meaning set forth in Section 3.1
hereof.

"Gaming Control Act" means the Mississippi Gaming Control Act, Miss.
Code Ann. 75-76-1, et seq., as from time to time amended, or any
successor provision of law, and the regulations promulgated thereunder,
including the Mississippi Gaming Commission Regulations.

"Governmental Authority" shall have the meaning set forth in
Appendix 1.

"Legal Requirements" means all applicable restrictive covenants, applicable
zoning and subdivision ordinances and building codes, all applicable health and
environmental laws and regulations, all applicable gaming laws and regulations,
and all other applicable laws, ordinances, rules, regulations, judicial
decisions, administrative orders, and other requirements of any Governmental
Authority having jurisdiction over Trustor, all or any portion of the Trust
Estate and/or any Affiliate of Trustor, in effect either at the time of
execution of this Deed of Trust or at any time during the term hereof.

"Lenders" shall have the meaning set forth in Appendix 1.

"Levee Board Consent" means that certain agreement dated May 10, 1996,
between Port Facility Lessor and BA Leasing & Capital Corporation, as Agent.

"Levee Board Land" means the real property situated in the County of
Tunica, State of Mississippi, more specifically described in Schedule A attached
hereto and incorporated herein by reference, including any after acquired title
thereto.

"Lien" shall have the meaning set forth in Appendix 1.

"Loan Agreement" means the loan agreement, dated as of the date hereof,
among Hancock Bank, as borrower, and the Lenders.

"Non-Casualty Recoveries" shall have the meaning set forth in Appendix
1.

"Obligations" shall mean all obligations (monetary or otherwise) of Trustor
under the Operative Documents.

"Operative Documents" shall have the meaning set forth in Appendix 1.

"Overdue Rate" shall have the meaning set forth in Appendix 1.

"Participation Agreement" means that certain Participation Agreement, dated
as of the date hereof, among BL Development Corp., as Lessee and Construction
Agent; Grand Casinos, Inc. and certain of its subsidiaries, as Guarantors;
Hancock Bank, as Lessor and Trustee; the Lenders, Co-Agents and Lead Manager
identified therein and BA Leasing & Capital Corporation, as Arranger and Agent.

"Permitted Liens" shall have the meaning set forth in Appendix 1.

"Person" shall have the meaning set forth in Appendix 1.

"Port Facility Lease" means all of BL Development Corp.'s estate, right,
title and interest in, to and under that certain Port Facility Lease Agreement,
dated as of December 29, 1993, as amended, by and between Port Facility Lessor
and BL Development Corp., by which Port Facility Lessor has leased to BL
Development Corp. the Levee Board Land upon which the Casino Barges shall be
located, as such lease may be amended from time to time, including that certain
First Amendment to Lease effective as of November 30, 1995. A Memorandum of
Lease with respect to the Port Facility Lease was recorded in the Office of the
Chancery Clerk of Tunica County, Mississippi in Book E-5 at Page 467.

"Port Facility Lease Damage Claims" means all of BL Development Corp.'s
claims and rights to the payment of damages solely with respect to the Trust
Estate that may arise from Port Facility Lessor's failure to perform under the
Port Facility Lease, or rejection of the Port Facility Lease under any
Bankruptcy Law.

"Port Facility Lessor" means the Board of Levee Commissioners for the
Yazoo-Mississippi Delta.

"Proceeds" has the meaning assigned to it under the UCC and, in any
event, shall include but not be limited to all Casualty Recoveries and
Non-Casualty Recoveries and (i) any and all proceeds of any insurance
(including, without limitation property casualty and title insurance),
indemnity, warranty or guaranty payable from time to time with respect to any of
the Trust Estate; (ii) any and all proceeds in the form of accounts (as such
term is defined in the UCC), security deposits, tax escrows (if any), down
payments (to the extent the same may be pledged under applicable law),
collections, contract rights, documents, instruments, chattel paper, liens and
security instruments, guaranties or general intangibles relating in whole or in
part to the Trust Estate and all rights and remedies of whatever kind or nature
Trustor may hold or acquire for the purpose of securing or enforcing any
obligation due Trustor thereunder; (iii) any and all payments in any form
whatsoever made or due and payable from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Trust Estate by any Governmental Authority; and (iv) any and all
other amounts from time to time paid or payable in connection with any of the
Trust Estate; provided, however, that Trustor is not authorized to dispose of
any of the Trust Estate.

"Receiver" means, with respect to any Person (including Trustor), any
receiver, trustee, custodian, debtor in possession, liquidator, sequestrator,
administrator, conservator, or other successor appointed (whether by a court or
otherwise) pursuant to any creditor's exercise of remedies against such Person,
or pursuant to a Bankruptcy of such Person, or for purposes of reorganization or
liquidation, or otherwise for the benefit of such Person's creditors, or under
any similar circumstances, or otherwise having similar powers over such Person
or its property, whether such Receiver acts on an interim, temporary, or final
basis and whether such appointment applies to all or any significant portion of
such Person's assets or property, including or not including any of the Trust
Estate.

"365(h) Election" means BL Development Corp.'s election to treat the Port
Facility Lease, as terminated under 365(h) of the Bankruptcy Code or any
similar Bankruptcy Law, or any comparable right provided under any other
Bankruptcy Law, together with all rights, remedies and privileges related
thereto.

"Trustee" shall have the meaning provided for in the preamble.

"Trustor" shall have the meaning provided for in the preamble.

"Trust Estate" means all of the property described in Granting Clauses (A)
through (F) below, inclusive, and each item of property therein described.

"UCC" means the Uniform Commercial Code in effect in the State of
Mississippi from time to time.

WITNESSETH:

IN CONSIDERATION OF TEN DOLLARS AND OTHER GOOD AND VALUABLE CONSIDERATION;
THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED AND FOR THE PURPOSE
OF SECURING as a Lien in favor of Beneficiary (1) the due and punctual payment
of the Obligations the last installment of which is due on March 30, 2002; (2)
the performance of each covenant and agreement of Trustor contained herein, and
in the Operative Documents; (3) the satisfaction of those terms and conditions
contained herein applicable to Trustor or within Trustor's control; (4) the
payment of such additional loans or advances as hereafter may be made for the
benefit of Trustor, or its successors or assigns, it being agreed that such
additional loans or advances, together with interest at the Overdue Rate, shall
be automatically secured hereby unless such a note or instrument evidencing such
advances specifically recites that it is not intended to be secured hereby and
(5) the payment of all sums expended or advanced by Beneficiary or the Lenders
under or pursuant to the terms hereof or to protect the security hereof,
together with interest thereon as herein provided, Trustor in consideration of
the premises, and for the purposes aforesaid, does hereby BARGAIN, CONVEY,
WARRANT, HYPOTHECATE, TRANSFER AND ASSIGN UNTO THE TRUSTEE IN TRUST FOR THE
BENEFIT OF BENEFICIARY:

(A) The Equipment,

(B) TOGETHER WITH BL Development Corp.'s right, title and interest as
lessee under the Port Facility Lease to the extent that the Equipment is deemed
to be a part of such leasehold estate, and then solely with respect to the
deemed leasehold interest in the Equipment under the Port Facility Lease,

(C) TOGETHER WITH (i) all the estate, right, title and interest of Trustor
of, in and to all judgments and decrees, insurance proceeds, awards of damages
and settlements hereafter made resulting from condemnation proceedings or the
taking of any of the property described in Granting Clauses (A) and (B) hereof
or any part thereof under the power of eminent domain, or for any damage
(whether caused by such taking or otherwise) to the property described in
Granting Clauses (A) or (B) hereof or any part thereof, and Beneficiary is
hereby authorized to collect and receive said awards and proceeds and to give
proper receipts and acquittance therefor, and (subject to the terms hereof) to
apply the same toward the payment of the indebtedness and other sums secured
hereby, notwithstanding the fact that the amount owing thereon may not then be
due and payable; (ii) all proceeds of any sales or other dispositions of the
property or rights described in Granting Clauses (A) or (B) hereof or any part
thereof whether voluntary or involuntary, provided, however, that the foregoing
shall not be deemed to permit such sales, transfers, or other dispositions
except as specifically permitted herein; (iii) whether arising from any
voluntary or involuntary disposition of the property described in Granting
Clauses (A) or (B), all Proceeds, products, replacements, additions,
substitutions, renewals and accessions, remainders, reversions and
after-acquired interest in, of and to such property and (iv) all products,
accessions, rents, issues, profits, returns, income and proceeds and Cash
Collateral (as defined in the Bankruptcy Code) of and from the Equipment or any
of the property described in Granting Clauses (A) or (B) hereof or any part
thereof,

(D) TOGETHER WITH all of Trustor's right, title and interest in and to any
and all maps, plans, specifications, surveys, studies, tests, reports, data and
drawings relating to the development of the Trust Estate, including, without
limitation, all marketing plans, feasibility studies, soils tests, design
contracts and all contracts and agreements of Trustor relating thereto
including, without limitation, architectural, structural, mechanical and
engineering plans and specifications, studies, data and drawings prepared for or
relating to the development of the Trust Estate,

(E) TOGETHER WITH all of Trustor's right, title, and interest in and to, to
the extent assignable, any and all licenses, permits, variances, special
permits, franchises, certificates, rulings, certifications, validations,
exemptions, filings, registrations, authorizations, consents, approvals,
waivers, orders, rights and agreements (including options, option rights and
contract rights) now or hereafter obtained by Trustor from any Governmental
Authority having or claiming jurisdiction over any element of the Trust Estate
or providing access thereto, or the operation of any business on, at, or from
the Trustee, and

(F) TOGETHER WITH (i) Trustor' rights, if any, further to assign, sell,
encumber or otherwise transfer or dispose of the property described in Granting
Clauses (A) through (E) inclusive, above, for debt or otherwise.

Trustor, for itself and its successors and assigns, covenants and agrees to
and with the Trustee that, at the time or times of the execution of and delivery
of these presents or any instrument of further assurance with respect thereto,
Trustor has good right, full power and lawful authority to assign, grant,
convey, warrant, transfer, bargain or sell its interest in the Trust Estate in
the manner and form as aforesaid, and that the same are free and clear of all
liens and encumbrances whatsoever, except for Permitted Liens and Trustor shall
warrant and forever defend the above-bargained property in the quiet and
peaceable possession of the Trustee and its successors and assigns against all
and every person or persons lawfully or otherwise claiming or to claim the whole
or any part thereof, except for Permitted Liens. Trustor agrees that any greater
title to the Trust Estate hereafter acquired by Trustor during the term hereof
shall be automatically subject hereto.

ARTICLE I

COVENANTS OF TRUSTOR

The Beneficiary, the Agent and the Lenders have been induced to enter into
the Participation Agreement, and each of the other Operative Documents, pursuant
to which Advances shall be made, on the basis of the following material
covenants, all agreed to by Trustor:

1.1 Performance of Port Facility Lease and Operative Documents. Trustor
shall perform, observe and comply with each and every provision hereof, and with
each and every provision contained in the Port Facility Lease and the Operative
Documents, and shall promptly pay to Beneficiary, when payment shall become due,
the principal with interest thereon and all other sums required to be paid by
Trustor under this Deed of Trust and the Operative Documents.

1.2 General Representations, Covenants and Warranties. BL Development Corp.
represents, covenants and warrants that: (a) it has good and marketable title to
the Casino Barges and the Equipment; (b) it has good and marketable leasehold
title to the Levee Board Land pursuant to the Port Facility Lease; (c) except as
limited by the foregoing subparagraph 1.2(b), BL Development Corp. has good and
marketable title to the Trust Estate, free and clear of all encumbrances except
Permitted Liens, and has the right to hold, occupy and enjoy its interest in the
Trust Estate, and has good right, full power and lawful authority to mortgage
and pledge the same as provided herein and Beneficiary may at all times
peaceably and quietly enter upon, hold, occupy and enjoy the entire Trust Estate
in accordance with the terms hereof and pursuant to the terms of the Levee Board
Consent; (d) neither BL Development Corp. nor any Affiliate thereof is Insolvent
and no bankruptcy or insolvency proceedings are pending or contemplated by or,
to the best of BL Development Corp.'s knowledge, against BL Development or any
Affiliate thereof; (e) the Levee Board Land has frontage on, and direct access
for ingress and egress to dedicated street(s); (f) BL Development shall at all
times conduct and operate the Trust Estate in a manner so as not to lose the
right to conduct gaming activities at the Casino Barges; (g) no material part of
the Trust Estate has been damaged, destroyed, condemned or abandoned; and (h)
each of the representations and warranties contained in the Port Facility Lease
and the Operative Documents to which BL Development Corp. is a party are true
and correct in all material respects and are hereby incorporated herein by
reference.

1.3 Compliance with Legal Requirements. BL Development Corp. shall
promptly, fully, and faithfully comply with all Legal Requirements and shall
cause all portions of the Trust Estate and its use and occupancy to fully comply
with Legal Requirements at all times, whether or not such compliance requires
work or remedial measures that are ordinary or extraordinary, foreseen or
unforeseen, structural or nonstructural, or that interfere with the use or
enjoyment of the Trust Estate.

1.4 Taxes. BL Development Corp. shall not suffer to exist, permit or
initiate the joint assessment of the real and personal property, or any other
procedure whereby the lien of the real property taxes and the lien of the
personal property taxes shall be assessed, levied or charged to the Levee Board
Land as a single lien, except as may be required by law, except for Permitted
Liens. In the event of the passage of any law deducting from the value of real
property for the purposes of taxation any lien thereon, or changing in any way
the taxation of deeds of trust or obligations secured thereby for state or local
purposes, or the manner of collecting such taxes and imposing a tax, either
directly or indirectly, on this Deed of Trust, BL Development Corp. shall pay
all such taxes.

1.5 Insurance/Casualty.

(a) BL Development Corp. shall at its sole expense obtain for, deliver to,
assign and maintain for the benefit of Beneficiary, during the term of this Deed
of Trust, insurance policies insuring the Trust Estate and liability insurance
policies, all in accordance with the requirements set forth in the Operative
Documents. BL Development Corp. shall pay promptly when due any premiums on such
insurance policies and on any renewals thereof. In the event of the foreclosure
of this Deed of Trust or any other transfer of title to the Trust Estate in
extinguishment of the indebtedness and other sums secured hereby, all right,
title and interest of BL Development Corp. in and to all insurance policies,
following the occurrence of such foreclosure or transfer, shall pass to the
purchaser or grantee. BL Development Corp. shall at all times, at its sole
expense, comply with all insurance requirements set forth in the Port Facility
Lease.

(b) Any insurance proceeds or other Casualty Recoveries shall be governed
by and disbursed in accordance with the terms of the Operative Documents.

1.6 Condemnation. In the event that any Levee Board Land is condemned
(whether by one or successive condemnation proceedings), proceeds of such
condemnation relating to the Trust Estate shall be applied in accordance with
the provisions of the Operative Documents.

1.7 Care of Trust Estate.

BL Development Corp. shall preserve and maintain the Trust Estate in good
condition and repair, and BL Development Corp. shall not permit, commit or
suffer to exist any waste, impairment or deterioration of the Trust Estate or of
any part thereof that in any manner materially impairs Beneficiary's security
hereunder and shall not take any action which will increase the risk of fire or
other hazard to the Trust Estate or to any part thereof.

1.8 Environmental Laws.

(a) BL Development Corp. shall comply with all Environmental Laws.
If BL Development Corp. fails to do so, then Beneficiary may cause the
Trust Estate to so comply and BL Development Corp. shall indemnify
Beneficiary with respect to any expenditures that Beneficiary incurs in
doing so. This shall not limit any other rights or remedies available to
Beneficiary.

(b) BL Development Corp. shall notify Beneficiary of all
Environmental Violations relating to the Trust Estate in accordance with
the terms of the Participation Agreement.

1.9 Leases.

(a) BL Development Corp. shall not enter into any new leases of all or any
portion of the Trust Estate or any modifications, assignments or amendments of
the Port Facility Lease except in accordance with the terms and conditions of
Section 5.19 of the Participation Agreement.

(b) No default now exists under the Port Facility Lease. No event has
occurred that, with the giving of notice or the passage of time or both, would
constitute such a default or would entitle BL Development Corp., as applicable,
or any other party under the Port Facility Lease to cancel the same or otherwise
avoid its obligations.

(c) BL Development Corp. shall pay, when due and payable, the rentals,
additional rentals, and other charges required by, and payable under, the Port
Facility Lease in accordance with the Port Facility Lease.

(d) BL Development Corp. shall perform and observe all terms,
covenants, and conditions that BL Development Corp. must perform and
observe under the Port Facility Lease, and do everything necessary to
preserve and to keep unimpaired the Trust Estate.

1.10 Further Encumbrance. BL Development Corp. covenants that at all times
prior to the payment in full of the indebtedness secured hereby, except for
Permitted Liens and/or any other express provision contained in the Operative
Documents to the contrary, BL Development Corp. shall neither make nor suffer to
exist, nor enter into any agreement for, any sale, assignment, exchange,
mortgage, transfer, Lien, hypothecation or encumbrance of all or any part of the
Trust Estate. As used herein, "transfer" includes the actual transfer or other
disposition, whether voluntary or involuntary, by law, or otherwise, except
those transfers specifically permitted herein, provided, however, that
"transfer" shall not include the granting of utility or other beneficial
easements with respect to the Trust Estate which have been or may hereafter be
granted by BL Development Corp. and are reasonably necessary to the operation of
the Trust Estate.

1.11 Further Assurances.

(a) At its sole cost and without expense to the Trustee or the Beneficiary,
Trustor shall do, execute, acknowledge and deliver any and all such further
acts, deeds, conveyances, notices, requests for notices, financing statements,
continuation statements, certificates, assignments, notices of assignments,
agreements, instruments and further assurances, and shall mark any chattel
paper, deliver any chattel paper or instruments to the Beneficiary and take any
other actions that are necessary, desirable or requested by Beneficiary or
Trustee to perfect or continue the perfection and first priority (subject to
Permitted Liens) of Beneficiary's security interest in the Trust Estate, to
protect the Trust Estate against the rights, claims, or interests of third
persons other than holders of Permitted Liens or to effect the purposes of this
Deed of Trust, including the security agreement contained herein, or for the
filing, registering or recording thereof.

(b) BL Development Corp. shall forthwith upon the execution and delivery of
this Deed of Trust, and thereafter from time to time, cause this Deed of Trust
and each instrument of further assurance to be filed, indexed, registered,
recorded, given or delivered in such manner and in such places as may be
required by any present or future law in order to publish notice of and fully to
protect the lien hereof upon, and the title of the Trustee and/or the
Beneficiary to, the Trust Estate.

1.12 Expenses.

(a) BL Development Corp. shall pay when due and payable all costs,
including, without limitation, appraisal fees, recording fees, taxes, brokerage
fees and commissions, abstract fees, title policy fees, escrow fees, attorneys'
and paralegal fees, travel expenses, fees for inspecting architect(s) and
engineer(s) and all other costs and expenses of every character which have been
incurred or which may hereafter be incurred by Beneficiary or any assignee of
Beneficiary in connection with the preparation and execution of loan documents,
amendments thereto or instruments, agreements or documents of further assurance,
the funding of the loan secured hereby, and the enforcement of any Operative
Document; and

(b) BL Development Corp. shall, upon demand by Beneficiary, reimburse
Beneficiary or any assignee of Beneficiary for all such reasonable expenses
which have been incurred or which shall be incurred by it; and

(c) BL Development Corp. shall indemnify Beneficiary with respect to any
transaction or matter in any way connected with any portion of the Trust Estate,
this Deed of Trust, including any occurrence at, in, on, upon or about the Trust
Estate (including any personal injury, loss of life, or property damage), or BL
Development Corp.' use, occupancy, or operation of the Trust Estate, or the
filing or enforcement of any mechanic's lien, or otherwise caused in whole or in
part by any act, omission or negligence occurring on or at the Trust Estate,
including failure to comply with any Legal Requirement or with any requirement
of this Deed of Trust that applies to BL Development Corp., or any Person's
violation of any environmental law or any contamination of any portion of the
Trust Estate in accordance with the applicable provisions of Articles VII and
VIII of the Participation Agreement. BL Development Corp. shall pay all costs
and expenses, including legal costs, that Beneficiary pays or incurs in
connection with any such litigation. Any amount payable under any indemnity in
this Deed of Trust shall be a demand obligation, shall be added to, and become a
part of, the secured obligations under this Deed of Trust, shall be secured by
this Deed of Trust, and shall bear interest at the Overdue Rate. Such indemnity
shall survive any release of this Deed of Trust and any foreclosure.

1.13 Beneficiary's Cure of Trustor's Default. If Trustor defaults in the
payment of any tax, assessment, lien, encumbrance or other imposition, in its
obligation to furnish insurance hereunder, or in the performance or observance
of any other covenant, condition or term of this Deed of Trust or the Operative
Documents, Beneficiary may, but is not obligated to, to preserve its interest in
the Trust Estate, perform or observe the same, and all payments made (whether
such payments are regular or accelerated payments) and costs and expenses
incurred or paid by Beneficiary in connection therewith shall become due and
payable immediately. The amounts so incurred or paid by Beneficiary, together
with interest thereon at the Overdue Rate from the date incurred until paid by
Trustor, shall be added to the indebtedness and secured by the lien of this Deed
of Trust. Beneficiary is hereby empowered to enter and to authorize others to
enter upon the Levee Board Land (to the extent permitted under the Levee Board
Consent) or any part thereof for the purpose of performing or observing any such
defaulted covenant, condition or term, without thereby becoming liable to
Trustor or any person in possession holding under Trustor. No exercise of any
rights under this Section by Beneficiary shall cure or waive any Event of
Default or notice of default hereunder or invalidate any act done pursuant
hereto or to any such notice, but shall be cumulative of all other rights and
remedies.

1.14 Compliance with Permitted Lien Agreements. BL Development Corp.
or any Affiliate of BL Development Corp. shall comply with each and every
material obligation contained in any agreement pertaining to a material
Permitted Lien.

1.15 Use of Levee Board Land. BL Development Corp. covenants that
the Trust Estate will be used in accordance with all Applicable Laws and
pursuant to the terms and conditions set forth in the Operative Documents.

1.16 Taxes on Beneficiary. BL Development Corp. shall pay any taxes, other
than income taxes, imposed on the Beneficiary by reason of its ownership of this
Deed of Trust by reason of any payments made pursuant to this Deed of Trust. If
any time any Governmental Authority shall require internal revenue or other
documentary stamps or any other tax on this Deed of Trust, then, if BL
Development Corp. lawfully may pay for such stamps or tax, including interest
and penalties thereon, to or for Beneficiary, BL Development Corp. shall pay,
when payable, for all such stamps and taxes, including interest and penalties
thereon.

1.17 Additional Taxes. BL Development Corp. shall pay any taxes resulting
from the passage of any law deducting from the value of real property, for the
purposes of taxation of any lien thereon, or changing in any way the taxation of
deeds of trust or obligations secured thereby for state or local purposes, or
the manner of collecting such taxes, or the imposition of a tax, either directly
or indirectly, on this Deed of Trust.

1.18 Defense of Actions. BL Development Corp. shall appear in and defend
any action or proceeding affecting or purporting to affect the security hereof
or the rights or powers of Beneficiary or Trustee, and shall pay all costs and
expenses, including costs of title search and insurance or other evidence of
title, preparation of surveys, and reasonable attorneys' fees in any such action
or proceeding in which Beneficiary or Trustee may appear or may be joined as a
party and in any suit brought by Beneficiary based upon or in connection with
this Deed of Trust or the Operative Documents. Nothing contained in this section
shall, however, limit the right of Beneficiary to appear in such action or
proceeding with counsel of its own choice, either on its own behalf or on behalf
of BL Development Corp..

1.19 Affiliates.

(a) Subject to Trust Deed. BL Development Corp. shall cause its Affiliates
in any way involved with the operation of the Trust Estate to observe the
covenants and conditions of this Deed of Trust to the extent necessary to give
the full intended effect to such covenants and conditions and to protect and
preserve the security of Beneficiary hereunder. BL Development Corp. shall, at
Beneficiary's request, cause any such Affiliate to execute and deliver to
Beneficiary or Trustee such further instruments or documents as Beneficiary may
reasonably deem necessary to effectuate the terms of this Section.

(b) Restriction on Use of Subsidiary or Affiliate. BL Development
Corp. shall not use any Affiliate in the operation of the Trust Estate if
such use would in any way impair the security hereunder or circumvent any
covenant or condition of this Deed of Trust or the Operative Documents.

1.20 Future Advances. All funds advanced in the reasonable exercise of
Beneficiary's judgment to protect its security hereunder are deemed to be
obligatory advances and are to be added to the total indebtedness secured by
this Deed of Trust and such indebtedness shall be increased accordingly. All
sums so advanced shall be secured by this Deed of Trust with the same priority
of Lien as the security for the Obligations secured hereunder.

1.21 Security Agreement and Financing Statements. Trustor (as debtor)
hereby grants to Beneficiary (as creditor and secured party) a present and
future security interest in the Equipment, Proceeds of the foregoing comprising
a portion of the Trust Estate and all proceeds of insurance policies and
condemnation awards arising therefrom and all proceeds, products, substitutions,
and accessions therefor and thereto, subject to Beneficiary's rights to treat
such property as real property as herein provided (collectively, the "Personal
Property"). Trustor shall execute any and all documents and writings, including,
without limitation financing statements pursuant to the UCC, as Beneficiary may
reasonably request, to preserve and maintain the priority of the security
interest granted hereby on property which may be deemed subject to the foregoing
security agreement, and shall pay to Beneficiary on demand any expenses incurred
by Beneficiary in connection with the preparation, execution and filing of any
such documents. Trustor hereby authorizes and empowers Beneficiary to execute
and file, on Trustor's behalf, all financing statements and refiling and
continuations thereof as Beneficiary deems necessary or advisable to create,
preserve and protect said security interest. This Deed of Trust shall be deemed
a security agreement as defined in the UCC and the remedies for any violation of
the covenants, terms and conditions of the agreements herein contained shall be
(i) as prescribed herein, or (ii) as available under applicable law, or (iii) as
available under the UCC, all at Beneficiary's sole election. In addition, a
photographic or other reproduction of this Deed of Trust shall be sufficient as
a financing statement for filing wherever filing may be necessary to perfect or
continue the security interest granted herein.

Trustor and Beneficiary agree that the filing of a financing statement in
the records normally having to do with personal property shall never be
construed as in anyway derogating from or impairing the express declaration and
intention of the parties hereto as hereinabove stated that everything used in
connection with the production of income from the Trust Estate and/or adapted
for use therein and/or which is described or reflected in this Deed of Trust is,
and at all times and for all purposes and in all proceedings both legal or
equitable, shall be regarded as part of the real property encumbered by this
Deed of Trust irrespective of whether (i) any such item is physically attached
to the Levee Board Land (although should it be determined that the Equipment is
a part of the Levee Board Land, Beneficiary shall continue to have a first
priority security interest (subject to Permitted Liens) in such Equipment
pursuant to the terms of this Deed of Trust), (ii) serial numbers are used for
the better identification of certain equipment items capable of being thus
identified in a recital contained herein or in any list filed with Beneficiary,
or (iii) any such item is referred to or reflected in any such financing
statement so filed at any time. The mention in any such financing statement of
(1) rights in or to the proceeds of any fire and/or hazard insurance policy, or
(2) any award in eminent domain proceedings for a taking or for loss of value,
Trustor's shall never be construed as in anyway altering any of the rights of
Beneficiary as determined by this Deed of Trust or impugning the priority of
Beneficiary's real property lien granted hereby or by any other recorded
document, but such mention in the financing statement is declared to be for the
protection of Beneficiary in the event any court or judge shall at any time hold
with respect to the matters set forth in the foregoing clauses (1) and (2) that
notice of Beneficiary's priority of interest to be effective against a
particular class of persons, including but not limited to, the federal
government and any subdivisions or entity of the federal government, must be
filed in the UCC records.

(a) Priority. All Personal Property of any nature whatsoever, which is
subject to the provisions of this security agreement, shall be purchased or
obtained by Trustor in its name and free and clear of any lien or encumbrance,
except for Permitted Liens and the lien hereof, for use only in connection with
the terms of the Operative Documents and shall be and at all times remain free
and clear of any lease or similar arrangement, chattel financing, installment
sale agreement, security agreement and any encumbrance of like kind, except
Permitted Liens, so that Beneficiary's security interest shall attach to and
vest in Trustor for the benefit of Beneficiary, with the priority herein
specified, immediately upon the installation or use of the Personal Property at
the Levee Board Land and Trustor warrants and represents that Beneficiary's
security interest in the Personal Property is a validly attached and binding
security interest, properly perfected and prior to all other security interests
therein except as otherwise permitted in this Deed of Trust.

(b) Removal of Trust Estate. None of the Trust Estate shall be
removed from the Trust Estate without Beneficiary's prior written consent.

(c) Change of Name. BL Development Corp. shall not change its corporate or
business name, or do business within the State of Mississippi under any name
other than such name, or any trade name(s) other than those as to which BL
Development Corp. gives prior written notice to Beneficiary of its intent to use
such trade names, or any other business name (if any) specified in the financing
statements delivered to Beneficiary for filing in connection with the execution
hereof, without providing Beneficiary with the additional financing statement(s)
and any other similar documents deemed reasonably necessary by Beneficiary to
assure that its security interest remains perfected and of undiminished priority
in all such Personal Property notwithstanding such name change and without
complying with the terms and conditions of the Operative Documents.

ARTICLE II

CORPORATE LOAN PROVISIONS

2.1 Interaction with other Operative Documents. The terms and provisions of
this Deed of Trust shall be subject and subordinate to the terms of the other
Operative Documents. To the extent that the other Operative Documents provide BL
Development Corp. with a particular cure or notice period, other rights or
establishes any limitations or conditions on Beneficiary's actions with regard
to a particular set of facts, Trustor shall be entitled to only the cure periods
and notice periods provided for in the other Operative Documents, and
Beneficiary shall be subject to the same limitations and conditions. In the
event of any conflict or inconsistency between the provisions of this Deed of
Trust and those of the other Operative Documents, including, without limitation,
any conflicts or inconsistencies in any definitions herein or therein, the
provisions or definitions of the other Operative Documents shall govern.

ARTICLE III

DEFAULTS

3.1 Event of Default. The term "Event of Default," wherever used in this
Deed of Trust, shall have the meaning given to the term "Lease Event of Default"
in Appendix 1.

ARTICLE IV

REMEDIES

4.1 Acceleration of Maturity. Upon the occurrence and during the
continuance of an Event of Default, Beneficiary may (except that such
acceleration shall be automatic if the Event of Default is caused by BL
Development Corp.'s Bankruptcy), declare the Obligations to be due and payable
immediately, and upon such declaration the Obligations shall immediately become
due and payable without demand, presentment, notice or other requirements of any
kind (all of which Trustor waives) notwithstanding anything in this Deed of
Trust or applicable law to the contrary.

4.2 Protective Advances. To the extent permitted by the Port Facility
Lessor and by the terms of the Indenture, if Trustor fails to make any payment
or perform any other obligation under the Port Facility Lease, then without
thereby limiting Beneficiary's other rights or remedies, waiving or releasing
any of Trustor's obligations, or imposing any obligation on Beneficiary,
Beneficiary may, at its option, either advance any amount owing or perform any
or all actions that Beneficiary considers necessary or appropriate to cure such
default. All such advances shall constitute "Protective Advances." No sums
advanced or performance rendered by Beneficiary shall cure, or be deemed a
waiver of any Event of Default.

4.3 Institution of Equity Proceedings. Upon the occurrence and during the
continuance of an Event of Default, Beneficiary may institute an action, suit or
proceeding in equity for specific performance of this Deed of Trust or any
Operative Document, all of which shall be specifically enforceable by injunction
or other equitable remedy. Trustor waives any defense based on laches or any
applicable statute of limitations.

4.4 Beneficiary's Power of Enforcement.

(a) Upon the occurrence and during the continuance of any Event of Default,
Beneficiary may, either with or without entry or taking possession of the Trust
Estate, and without regard to whether or not the indebtedness and other sums
secured hereby shall be due and without prejudice to the right of Beneficiary
thereafter to bring an action or proceeding to foreclose or any other action for
any default existing at the time such earlier action was commenced, proceed by
any appropriate action or proceeding: (1) to enforce payment of the Obligations,
to the extent permitted by law, or the performance of any term hereof or any
other right; (2) to foreclose this Deed of Trust in any manner provided by law
for the foreclosure of mortgages or deeds of trust on real property and to sell,
as an entirety or in separate pieces, the Trust Estate or any portion thereof
pursuant to the laws of the State of Mississippi or under the judgment or decree
of a court or courts of competent jurisdiction, and Beneficiary shall be
entitled to recover in any such proceeding all costs and expenses incident
thereto, including reasonable attorneys' fees in such amount as shall be awarded
by the court; (3) to exercise any or all of the rights and remedies available to
it under the Operative Documents in addition to, and not in limitation of, any
remedies provided for in this Deed of Trust; and (4) to pursue any other remedy
available to it. Beneficiary shall take action either by such proceedings or by
the exercise of its powers with respect to entry or taking possession, or both,
as Beneficiary may determine.

(b) Upon the occurrence and during the continuance of any Event of Default,
Trustee shall, at the request of Beneficiary, sell the Trust Estate conveyed, or
a portion thereof, to satisfy the obligations hereof at public outcry to the
highest bidder for cash. Sale of the property shall be advertised for three
consecutive weeks preceding the sale in a newspaper published in the county
where the Levee Board Land and leaseholds are situated, or if none is so
published, then in some newspaper having a general circulation therein, and by
posting a notice for the same time at the courthouse of the same county. The
notice and advertisement shall disclose the names of the original debtors in
this Deed of Trust. Trustor waives the provisions of Section 89-1-55 of the
Mississippi Code of 1972, as amended, if any, as far as this section restricts
the right of Trustee to offer at sale more than 160 acres at a time, and Trustee
may offer the property herein conveyed as a whole, regardless of how it is
described.

If the Trust Estate is situated in two or more counties, or in two judicial
districts of the same county, Trustee shall have full power to select in which
county, or judicial district, the sale of the property is to be made, newspaper
advertisement published and notice of sale posted, and Trustee's selection shall
be binding upon Trustor but subject to the consent of Beneficiary. Should
Beneficiary be a corporation or an unincorporated association, then any officer
thereof may declare Trustor to be in default and request Trustee to sell the
Trust Estate. Beneficiary shall have the same right to purchase the property at
the foreclosure sale as would a purchaser who is not a party to this Deed of
Trust.

(c) The Trustee shall sell the Trust Estate or any portion thereof at the
time and place fixed by it in said notice, either as a whole or in separate
pieces, and in such order as it may determine, at public auction to the highest
bidder, for cash in lawful money of the United States payable at the time of
sale. The Trustee may, for any cause it deems expedient, postpone the sale of
all or any portion of said property until it shall be completed and, in every
case, notice of postponement shall be given by public announcement thereof at
the time and place last appointed for the sale and from time to time thereafter
the Trustee may postpone such sale by public announcement at the time fixed by
the preceding postponement. Any sale or sales may be held by an agent on behalf
of the Trustee and the appointment need not be recorded. The Trustee shall
execute and deliver to the purchaser its Deed, bill of sale, or other instrument
conveying said property so sold. The recitals in such instrument of conveyance
of any matters or facts shall be conclusive proof of the truthfulness thereof.
Any person, including Beneficiary, may bid at the sale.

4.5 Beneficiary's Right to Enter and Take Possession, Operate and
Apply Income.

(a) Upon the occurrence and during the continuance of an Event of Default,
Trustor upon demand of Beneficiary, shall forthwith surrender to Beneficiary the
actual possession and, if and to the extent permitted by law and pursuant to the
terms of the Levee Board Consent, Beneficiary itself, or by such officers or
agents as it may appoint, may enter and take possession of all the Trust Estate
and Beneficiary may to the extent permitted by the Indenture, at its option,
succeed to the interests of Trustor under the Port Facility Lease, without
liability for trespass, damages or otherwise, and may exclude Trustor and its
agents and employees wholly therefrom and may have joint access with Trustor to
the books, papers and accounts of Trustor.

(b) If Trustor shall for any reason fail to surrender or deliver the Trust
Estate, or any part thereof after Beneficiary's demand, Beneficiary may obtain a
judgment or decree conferring on Beneficiary or the Trustee the right to
immediate possession or requiring Trustor to deliver immediate possession of all
or part of such property to Beneficiary or the Trustee and Trustor hereby
specifically consents to the entry of such judgment or decree. Trustor shall pay
to Beneficiary or the Trustee, upon demand, all costs and expenses of obtaining
such judgment or decree and reasonable compensation to Beneficiary or the
Trustee, their attorneys and agents, and all such costs, expenses and
compensation shall, until paid, be secured by the lien of this Deed of Trust.

(2) insure or keep the Trust Estate insured;

(3) to the extent permitted by the Indenture, manage and operate the
Trust Estate and exercise all the rights and powers of Trustor in its name or
otherwise with respect to the same;

(4) rent or sublet the Trust Estate or any portion thereof for any
purpose permitted by this Deed of Trust.

Beneficiary or the Trustee shall surrender possession of the Trust Estate
to Trustor only when all Obligations shall have been paid and all defaults made
good. The same right of taking possession, however, shall exist if any
subsequent Event of Default shall occur.

4.6 Purchase by Beneficiary. Upon any foreclosure sale (whether judicial or
nonjudicial) Beneficiary may bid for and purchase the property subject to such
sale and, upon compliance with the terms of sale, may hold, retain and possess
and dispose of such property in its own absolute right without further
accountability.

4.7 Waiver of Appraisement, Valuation, Stay, Extension and Redemption Laws.
Trustor agrees to the full extent permitted by law that if an Event of Default
occurs, neither Trustor nor anyone claiming through or under it shall or will
set up, claim or seek to take advantage of any appraisement, valuation, stay,
extension or redemption laws now or hereafter in force, in order to prevent or
hinder the enforcement or foreclosure of this Deed of Trust or the absolute sale
of the Trust Estate or any portion thereof or the final and absolute putting
into possession thereof, immediately after such sale, of the purchasers thereof,
and Trustor for itself and all who may at any time claim through or under it,
hereby waives, to the full extent that it may lawfully so do, the benefit of all
such laws, and any and all right to have the assets comprising the Trust Estate
marshaled upon any foreclosure of the lien hereof and agrees that the Trustee or
any court having jurisdiction to foreclose such lien may sell the Trust Estate
in part or as an entirety.

4.8 Receiver. Upon the occurrence and during the continuance of any Event
of Default, Beneficiary, to the extent permitted by law and without regard to
the value, adequacy or occupancy of the security for the indebtedness and other
sums secured hereby, shall be entitled as a matter of right if it so elects to
the appointment of a receiver to enter upon and take possession of the Trust
Estate and such receiver may be appointed by any court of competent jurisdiction
upon application by Beneficiary. Beneficiary may have a receiver appointed
without notice to Trustor or any third party, and Beneficiary may waive any
requirement that the receiver post a bond. Beneficiary shall have the power to
designate and select the Person who shall serve as the receiver and to negotiate
all terms and conditions under which such receiver shall serve. Any receiver
appointed on Beneficiary's behalf may be an Affiliate of Beneficiary. The
expenses, including receiver's fees, attorneys' fees, costs and agent's
compensation, incurred pursuant to the powers herein contained shall be secured
by this Deed of Trust. The right to enter and take possession of and to manage
and operate the Trust Estate, whether by a receiver or otherwise, shall be
cumulative to any other right or remedy, available to Beneficiary under this
Deed of Trust, under the Operative Documents or otherwise available to
Beneficiary and may be exercised concurrently therewith or independently
thereof. Notwithstanding the appointment of any receiver or other custodian,
Beneficiary shall be entitled as pledgee to the possession and control of any
cash, deposits, or instruments at the time held by, or payable or deliverable
under the terms of this Deed of Trust to, Beneficiary.

4.9 Suits to Protect the Trust Estate. Beneficiary shall have the power and
authority to institute and maintain any suits and proceedings as Beneficiary, in
its sole and absolute discretion, may deem advisable (a) to prevent any
impairment of the Trust Estate by any acts which may be unlawful or any
violation of this Deed of Trust, (b) to preserve or protect its interest in the
Trust Estate, and (c) to restrain the enforcement of or compliance with any
legislation or other Legal Requirement that may be unconstitutional or otherwise
invalid, if the enforcement of or compliance with such enactment, rule or order
might impair the security hereunder or be prejudicial to Beneficiary's interest.

4.10 Proofs of Claim. In the case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceedings affecting Trustor, any Affiliate or any guarantor, co-maker
or endorser of any of Trustor's obligations, its creditors or its property,
Beneficiary, to the extent permitted by law, shall be entitled to file such
proofs of claim or other documents as it may deem be necessary or advisable in
order to have its claims allowed in such proceedings for the entire amount due
and payable by Trustor under this Deed of Trust or any other Operative Document,
at the date of the institution of such proceedings, and for any additional
amounts which may become due and payable by Trustor after such date.

4.11 Deficiencies; Application of Monies by Beneficiary.

(a) In case of a foreclosure sale of all or any part of the Trust Estate
and of the application of the proceeds of sale to the payment of the sums
secured hereby, Beneficiary shall be entitled to enforce payment from Trustor of
any additional amounts then remaining due and unpaid and to recover judgment
against Trustor for any portion thereof remaining unpaid, with interest at the
Overdue Rate.

(b) Trustor hereby agrees to the extent permitted by law, that no recovery
of any such judgment by Beneficiary or other action by Beneficiary and no
attachment or levy of any execution upon any of the Trust Estate or any other
property shall in any way affect the Lien and security interest of this Deed of
Trust upon the Trust Estate or any part thereof or any Lien, rights, powers or
remedies of Beneficiary hereunder, but such Lien, rights, powers and remedies
shall continue unimpaired as before.

(c) Any monies collected or received by Beneficiary under this Section 4.11
shall be first applied to the payment of compensation, expenses and
disbursements of the agents, attorneys and other representatives of Beneficiary,
and the balance remaining shall be applied to the payment of amounts due and
unpaid under this Deed of Trust.

4.12 Delay or Omission, No Waiver. No delay or omission of Beneficiary to
exercise any right, power or remedy upon any Event of Default shall exhaust or
impair any such right, power or remedy or shall be construed to waive any such
Event of Default or to constitute acquiescence therein. Every right, power and
remedy given to Beneficiary whether contained herein or in the other Operative
Documents or otherwise available to Beneficiary may be exercised from time to
time and as often as may be deemed expedient by Beneficiary.

4.13 No Waiver of One Default to Affect Another. No waiver of any Event of
Default hereunder shall extend to or affect any subsequent or any other Event of
Default then existing, or impair any rights, powers or remedies consequent
thereon. If Beneficiary (a) grants forbearance or an extension of time for the
payment of any sums secured hereby; (b) takes other or additional security for
the payment thereof; (c) waives or does not exercise any right granted in this
Deed of Trust or any other Operative Document; (d) releases any part of the
Trust Estate from the lien or security interest of this Deed of Trust or any
other instrument securing the Obligations; (e) consents to the filing of any
map, plat or replat of the Levee Board Land; (f) consents to the granting of any
easement on the Levee Board Land; or (g) makes or consents to any agreement
changing the terms of this Deed of Trust or any Operative Document subordinating
the lien or any charge hereof, no such act or omission shall release, discharge,
modify, change or affect the original liability under this Deed of Trust or
otherwise of Trustor, or any subsequent purchaser of the Trust Estate or any
part thereof or any maker, co-signer, surety or guarantor. No such act or
omission shall preclude Beneficiary from exercising any right, power or
privilege herein granted or intended to be granted in case of any Event of
Default then existing or of any subsequent Event of Default, nor, except as
otherwise expressly provided in an instrument or instruments executed by
Beneficiary, shall the lien or security interest of this Deed of Trust be
altered thereby, except to the extent expressly provided in any releases, maps,
easements or subordinations described in clause (d), (e), (f) or (g) above of
this Section 4.13. In the event of the sale or transfer by operation of law or
otherwise of all or any part of the Trust Estate, Beneficiary, without notice to
any person, firm or corporation, is hereby authorized and empowered to deal with
any such vendee or transferee with reference to the Trust Estate or the
indebtedness secured hereby, or with reference to any of the terms or conditions
hereof, as fully and to the same extent as it might deal with the original
parties hereto and without in any way releasing or discharging any of the
liabilities or undertakings hereunder, or waiving its right to declare such sale
or transfer an Event of Default as provided herein. Notwithstanding anything to
the contrary contained in this Deed of Trust or any Operative Document, (i) in
the case of any non-monetary Event of Default, Beneficiary may continue to
accept payments due hereunder without thereby waiving the existence of such or
any other Event of Default and (ii) in the case of any monetary Event of
Default, Beneficiary may accept partial payments of any sums due hereunder
without thereby waiving the existence of such Event of Default if the partial
payment is not sufficient to completely cure such Event of Default.

4.14 Discontinuance of Proceedings; Position of Parties Restored. If
Beneficiary shall have proceeded to enforce any right or remedy under this Deed
of Trust by foreclosure, entry or otherwise and such proceedings shall have been
discontinued or abandoned for any reason, or such proceedings shall have
resulted in a final determination adverse to Beneficiary, then and in every such
case Trustor and Beneficiary shall be restored to their former positions and
rights hereunder, and all rights, powers and remedies of Beneficiary shall
continue as if no such proceedings had occurred or had been taken.

4.15 Remedies Cumulative. No right, power or remedy, including, without
limitation remedies with respect to any security for the Obligations, conferred
upon or reserved to Beneficiary by this Deed of Trust or any Operative Document
is exclusive of any other right, power or remedy, but each and every such right,
power and remedy shall be cumulative and concurrent and shall be in addition to
any other right, power and remedy given hereunder or under any Operative
Document (including, but not limited to, any remedy provided for and in the
manner set forth in the Loan Agreement), now or hereafter existing at law, in
equity or by statute, and Beneficiary shall be entitled to resort to such
rights, powers, remedies or security as Beneficiary shall in its sole and
absolute discretion deem advisable.

4.16 Interest After Event of Default. If an Event of Default shall have
occurred and is continuing, all sums outstanding and unpaid under this Deed of
Trust and the Operative Documents shall, at Beneficiary's option, bear interest
at the Overdue Rate until such Event of Default has been cured. Trustor's
obligation to pay such interest shall be secured by this Deed of Trust.

4.17 Foreclosure, Expenses of Litigation. If foreclosure be made by the
Trustee, reasonable attorneys' fees for services in the supervision of said
foreclosure proceeding shall be allowed to the Trustee and Beneficiary as part
of the foreclosure costs. In the event of foreclosure of the lien hereof, there
shall be allowed and included as additional indebtedness all reasonable
expenditures and expenses which may be paid or incurred by or on behalf of
Beneficiary for attorneys' fees, appraiser's fees, outlays for documentary and
expert evidence, stenographers' charges, publication costs, and costs (which may
be estimated as to items to be expended after foreclosure sale or entry of the
decree) of procuring all such abstracts of title, title searches and
examinations, title insurance policies and guaranties, and similar data and
assurances with respect to title as Beneficiary may deem reasonably advisable
either to prosecute such suit or to evidence to a bidder at any sale which may
be had pursuant to such decree the true condition of the title to or the value
of the Trust Estate or any portion thereof. All expenditures and expenses of the
nature in this section mentioned, and such expenses and fees as may be incurred
in the protection of the Trust Estate and the maintenance of the lien and
security interest of this Deed of Trust, including the fees of any attorney
employed by Beneficiary in any litigation or proceeding affecting this Deed of
Trust or any Operative Document, the Trust Estate or any portion thereof,
including, without limitation, civil, probate, appellate and bankruptcy
proceedings, or in preparation for the commencement or defense of any proceeding
or threatened suit or proceeding, shall be immediately due and payable by
Trustor, with interest thereon at the Overdue Rate, and shall be secured by this
Deed of Trust. Trustee waives its right to any statutory fee in connection with
any judicial or nonjudicial foreclosure of the lien hereof and agrees to accept
a reasonable fee for such services.

4.18 Deficiency Judgments. If after foreclosure of this Deed of Trust or
Trustee's sale hereunder, there shall remain any deficiency with respect to any
amounts payable under the Operative Documents or hereunder or any amounts
secured hereby, and Beneficiary shall institute any proceedings to recover such
deficiency or deficiencies, all such amounts shall continue to bear interest at
the Overdue Rate. Trustor waives any defense to Beneficiary's recovery against
Trustor of any deficiency after any foreclosure sale of the Trust Estate.
Trustor expressly waives any defense or benefits that may be derived from any
statute granting Trustor any defense to any such recovery by Beneficiary. In
addition, Beneficiary and Trustee shall be entitled to recovery of all of their
reasonable costs and expenditures (including without limitation any court
imposed costs) in connection with such proceedings, including their reasonable
attorneys' fees, appraisal fees and the other costs, fees and expenditures
referred to in Section 4.17 above. This provision shall survive any foreclosure
or sale of the Trust Estate, any portion thereof and/or the extinguishment of
the lien hereof.

4.19 Waiver of Jury Trial. Beneficiary and Trustor each waive any right to
have a jury participate in resolving any dispute, whether sounding in contract,
tort or otherwise arising out of, connected with, related to, or incidental to
the relationship established between them in connection with this Deed of Trust
or any Operative Document. Any such disputes shall be resolved in a bench trial
without a jury.

ARTICLE V

RIGHTS AND RESPONSIBILITIES OF TRUSTEE;
OTHER PROVISIONS RELATING TO TRUSTEE

Notwithstanding anything to the contrary in this Deed of Trust, Trustor and
Beneficiary agree as follows.

5.1 Exercise of Remedies by Trustee. To the extent that this Deed of Trust
or applicable law authorizes or empowers Beneficiary to exercise any remedies
set forth in Article IV hereof or otherwise, or perform any acts in connection
therewith, Trustee (but not to the exclusion of Beneficiary unless so required
under the law of the State of Mississippi) shall have the power to exercise any
or all such remedies, and to perform any acts provided for in this Deed of Trust
in connection therewith, all for the benefit of Beneficiary and on Beneficiary's
behalf in accordance with applicable law of the State of Mississippi. In
connection therewith, Trustee: (a) shall not exercise, or waive the exercise of,
any Beneficiary's remedies (other than any rights of Trustee to any indemnity or
reimbursement), except at Beneficiary's request, and (b) shall exercise, or
waive the exercise of, any or all of Beneficiary's remedies at Beneficiary's
request, and in accordance with Beneficiary's directions as to the manner of
such exercise or waiver. Trustee may, however, decline to follow Beneficiary's
request or direction if Trustee shall be advised by counsel that the action or
proceeding, or manner thereof, so directed may not lawfully be taken or waived.

5.2 Rights and Privileges of Trustee. To the extent that this Deed of Trust
requires Trustor to indemnify Beneficiary or reimburse Beneficiary for any
expenditures Beneficiary may incur, Trustee shall be entitled to the same
indemnity and the same rights to reimbursement of expenses as Beneficiary,
subject to such limitations and conditions as would apply in the case of
Beneficiary. To the extent that this Deed of Trust negates or limits
Beneficiary's liability as to any matter Trustee shall be entitled to the same
negation or limitation of liability. To the extent that Trustor, pursuant to
this Deed of Trust, appoints Beneficiary as Trustor's attorney in fact for any
purpose, Beneficiary or (when so instructed by Beneficiary) Trustee shall be
entitled to act on Trustor's behalf without joinder or confirmation by the
other.

5.3 Resignation or Replacement of Trustee. Trustee may resign by an
instrument in writing addressed to Beneficiary, or Trustee may be removed at any
time with or without cause (i.e., in Beneficiary's sole and absolute discretion)
by an instrument in writing executed by Beneficiary. In case of the death,
resignation, removal or disqualification of Trustee or if for any reason
Beneficiary shall deem it desirable to appoint a substitute, successor or
replacement Trustee to act instead of the Trustee originally named (or in place
of any substitute, successor or replacement Trustee), then Beneficiary shall
have the right and is hereby authorized and empowered to appoint a successor,
substitute or replacement Trustee, without any formality other than appointment
and designation in writing executed by Beneficiary, which instrument shall be
recorded if required by the law of the State of Mississippi. The law of the
State of Mississippi shall govern the qualifications of any Trustee. The
authority conferred upon Trustee by this Deed of Trust shall automatically
extend to any and all other successor, substitute and replacement Trustee(s)
successively until the Obligations have been paid in full or the Trust Estate
has been sold hereunder or released in accordance with the provisions of the
Operative Documents. Beneficiary's written appointment and designation of any
Trustee shall be full evidence of Beneficiary's right and authority to make the
same and of all facts therein recited. No confirmation, authorization, approval
or other action by Trustor shall be required in connection with any resignation
or other replacement of Trustee.

5.7 Ratification. Trustor hereby ratifies and confirms any and all acts
that any Trustee may take or perform by virtue of this Deed of Trust.

5.9 Endorsement and Execution of Documents. Upon Beneficiary's written
request, Trustee shall, without liability or notice to Trustor, execute, consent
to, or join in any instrument or agreement in connection with or necessary to
effectuate the purposes of the Operative Documents. Trustor hereby irrevocably
designates Trustee as its attorney in fact to execute, acknowledge and deliver,
on Trustor's behalf and in Trustor's name, all instruments or agreements
necessary to implement any provision(s) of this Deed of Trust or to further
perfect the lien created by this Deed of Trust on the Trust Estate. This power
of attorney shall be deemed to be coupled with an interest and shall survive any
disability of Trustor.

5.11 Terms of Trustee's Acceptance. Trustee accepts the trust
created by this Deed of Trust upon the following terms and conditions.

(a) Delegation. Trustee may exercise any of its powers through
appointment of attorney(s) in fact or agents.

(b) Counsel. Trustee may select and employ legal counsel (including any law
firm representing Beneficiary). Trustor shall reimburse all reasonable legal
fees and expenses that Trustee may thereby incur.

(d) Costs and Expenses. Trustor shall reimburse Trustee, as part of the
Obligations secured hereunder, for all reasonable disbursements and expenses
(including legal fees and expenses) incurred by reason of and as provided for in
this Deed of Trust, including any of the foregoing incurred in Trustee's
administering and executing the trust created by this Deed of Trust and
performing Trustee's duties and exercising Trustee's powers under this Deed of
Trust.

ARTICLE VI

MISCELLANEOUS PROVISIONS

6.1 Heirs, Successors and Assigns Included in Parties. Whenever one of the
parties hereto is named or referred to herein, the heirs, successors and assigns
of such party shall be included, and subject to the limitations set forth in
Section 1.11, all covenants and agreements contained in this Deed of Trust, by
or on behalf of Trustor or Beneficiary shall bind and inure to the benefit of
its heirs, successors and assigns, whether so expressed or not.

6.2 Intentionally Omitted.

6.3 Addresses for Notices, Etc.

(a) Any notice, report, demand or other instrument authorized or required
to be given or furnished under this Deed of Trust to Trustor, Trustee or
Beneficiary shall be deemed given or furnished when addressed to the party
intended to receive the same, at the address of such party set forth below, and
delivered at such address:

Beneficiary: BA Leasing & Capital Corporation
Four Embarcadero Center - Suite 1200
San Francisco, California 94111
Attention: Ms. Sonia T. Delen

With a copy to: Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: Douglas L. Wisner, Esq.

Trustor: Hancock Bank
2510 14th Street
One Hancock Plaza
Gulfport, Mississippi 39501
Attention: Ms. Karen Thigpen

With a copy to: Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: Douglas L. Wisner, Esq.

Trustor: BL Development Corp.
13705 First Avenue North
Plymouth, Minnesota 55441-5451
Attention: Chief Financial Officer

With a copy to: Brian J. Klein, Esq.
Maslon Edelman Borman & Brand
3300 Norwest Center
Minneapolis, Minnesota 55402

Trustee: Mr. James R. McIlwain
c/o Hancock Bank
2510 14th Street
One Hancock Plaza
Gulfport, Mississippi 39501

With a copy to: Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: Douglas L. Wisner, Esq.

6.5 Invalid Provisions to Affect No Others. In the event that any of the
covenants, agreements, terms or provisions contained herein or in any Operative
Document shall be invalid, illegal or unenforceable in any respect, the validity
of the lien hereof and the remaining covenants, agreements, terms or provisions
contained herein or in any other Operative Document shall be in no way affected,
prejudiced or disturbed thereby. To the extent permitted by law, Trustor waives
any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.

6.6 Changes and Priority Over Intervening Liens. Neither this Deed of Trust
nor any term hereof may be changed, waived, discharged or terminated orally, or
by any action or inaction, but only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge or termination
is sought. Any agreement hereafter made by Trustor and Beneficiary relating to
this Deed of Trust shall be superior to the rights of the holder of any
intervening lien or encumbrance.

6.7 Estoppel Certificates. Within ten Business Days after Beneficiary's
written request, Trustor shall from time to time execute a certificate, in
recordable form (an "Estoppel Certificate), stating: (a) the current amount of
the Obligations secured hereunder and all elements thereof, including principal,
interest, and all other elements; (b) Trustor has no defense, offset, claim,
counterclaim, right of recoupment, deduction, or reduction against any of the
Obligations secured hereunder; (c) none of the Operative Documents have been
amended, whether orally or in writing or, if there have been any amendments, the
date and nature of each amendment; (d) Trustor has no claim against Beneficiary
of any kind; (e) any power of attorney granted to Beneficiary is in full force
and effect; and (f) such other matters relating to this Deed of Trust, any
Operative Documents and the relationship of Trustor and Beneficiary as
Beneficiary shall request.

6.8 Governing Law. This Deed of Trust was negotiated in New York, and made
by Beneficiary and accepted by Trustor in the State of New York, which State the
parties agree has a substantial relationship to the parties and to the
underlying transaction embodied hereby. This Deed of Trust and the Obligations
arising hereunder shall be governed by, and construed in accordance with, the
laws of the State of New York applicable to contracts made and performed in such
State and any applicable law of the United States of America, including, without
limiting the generality of the foregoing, matters of construction, validity and
performance, except that at all times the provisions for the creation,
perfection, and enforcement of the liens and security interests created pursuant
hereto shall be governed by and construed according to the law of Mississippi,
including the Gaming Laws, it being understood that, to the fullest extent
permitted by law of Mississippi, the law of the State of New York shall govern
the validity and the enforceability of this Deed of Trust and the Obligations
arising hereunder. To the fullest extent permitted by law, Trustor hereby
unconditionally and irrevocably waives any claim to assert that the law of any
other jurisdiction governs this Deed of Trust and the other Operative Documents
and this Deed of Trust and the other Operative Documents shall be governed by
and construed in accordance with the laws of the State of New York pursuant to
5-1401 of the New York General Obligations Law.

Any legal suit, action or proceeding against Beneficiary, Trustee or
Trustor arising out of or relating to this Deed of Trust shall be instituted in
any federal or state court in New York, New York, pursuant to 5-1402 of the
New York General Obligations Law, or at Beneficiary's option, in the State of
Mississippi with respect to the exercise by Beneficiary of any of its rights and
remedies relating to any portion of the Trust Estate within Mississippi, and
Trustor waives any objection which it may now or hereafter have to the laying of
venue of any such suit, action or proceeding. Trustor hereby irrevocably submits
to the jurisdiction of any such court in any suit, action or proceeding. Trustor
hereby accepts and acknowledges service of any and all process which may be
served in any such suit, action or proceeding in any federal or state court in
New York, New York, and agrees that service of process at the address provided
for herein shall be deemed in every respect effective service of process upon
Trustor, in any such suit, action or proceeding in the State of New York.

6.9 Required Notices. Trustor shall notify Beneficiary promptly of the
occurrence of any of the following and provide Beneficiary a copy of any notice
or documents referred to: (i) receipt of notice from any Governmental Authority
relating to all or any material part of the Trust Estate if such notice relates
to a default, act, occasion or circumstance that could materially affect the
lien hereby granted against the Trust Estate or the value of the Trust Estate as
collateral; (ii) receipt of notice from a tenant leasing all or any material
portion of the Trust Estate if such notice relates to a default or act, omission
or circumstance that could materially affect the lien hereby granted against the
Trust Estate or the value of the Trust Estate as collateral; (iii) receipt of
notice from the holder of any Permitted Lien relating to a default if such
default could materially affect the lien hereby granted against the Trust Estate
or the value of the Trust Estate as collateral; (iv) the commencement of any
proceeding or the entry of any judgment, decree or order having a Material
Adverse Effect on all or any portion of the Trust Estate; or (v) commencement of
any judicial or administrative proceeding or the entry of any judgment, decree
or order by or against or otherwise affecting Trustor or any Affiliate of
Trustor, a material portion of the Trust Estate or material portion of any
personal property or any other action by any creditor or lessor thereof that
could materially affect the lien hereby granted against the Trust Estate or the
value of the Trust Estate as collateral.

6.11 Attorneys' Fees. Without limiting any other provision contained
herein, Trustor agrees to pay all costs of Beneficiary or Trustee incurred in
connection with the enforcement of this Deed of Trust, including without
limitation all reasonable attorneys' fees whether or not suit is commenced, and
including, without limitation, fees incurred in connection with any probate,
appellate, bankruptcy, deficiency or any other litigation proceedings, all of
which sums shall be secured hereby.

6.13 Cost of Accounting. Trustor shall pay to Beneficiary, for and on
account of the preparation and rendition of any accounting, which Trustor may be
entitled to require under any law or statute now or hereafter providing
therefor, the reasonable costs thereof.

6.15 Corrections. Trustor shall, upon request of Trustee, promptly correct
any defect, error or omission which may be discovered in the contents of this
Deed of Trust or in the execution or acknowledgment hereof, and shall execute,
acknowledge and deliver such further instruments and do such further acts as may
be necessary or as may be reasonably requested by Trustee to carry out more
effectively the purposes of this Deed of Trust, to subject to the lien and
security interest hereby created in any of Trustor's properties, rights or
interest covered or intended to be covered hereby, and to perfect and maintain
such lien and security interest.

6.18 Context. In this Deed of Trust, whenever the context so requires, the
neuter includes the masculine and feminine, and the singular including the
plural, and vice versa.

6.21 Limitation of Liability. Notwithstanding anything herein to the
contrary, the parties hereto acknowledge and agree (a) that the obligations
herein imposed on Hancock Bank, as Trustor and the representations, covenants
and warranties made herein by Hancock Bank, as Trustor are all subject to the
other Operative Documents, and (b) Hancock Bank, as Trustor, its officers,
employees and agents shall have no personal liability whatsoever arising from or
in any way relating to (i) failure of Hancock Bank, as Trustor to fulfill any
obligation herein imposed on Hancock Bank, as Trustor, (ii) any
misrepresentation made herein by Hancock Bank, as Trustor, or (iii) the breach
of any covenant or warranty made herein by Hancock Bank, as Trustor, it being
understood the liability of Hancock Bank, as Trustor hereunder for any such
failure, misrepresentation or breach is limited to the Trust Estate.

ARTICLE VII

POWER OF ATTORNEY

7.1 Grant of Power. Trustor irrevocably appoints Beneficiary and any
successor thereto as its attorney-in-fact, with full power and authority,
including the power of substitution, exercisable upon an Event of Default to act
for Trustor in its name, place and stead as hereinafter provided:

(a) Possession and Completion. To take possession of the Trust Estate,
remove all employees, contractors and agents of Trustor therefrom, complete or
attempt to complete the work of construction, and market, sell or lease the
Trust Estate.

(d) Compromise Claims. To pay, settle or compromise all bills and claims
then existing or thereafter arising against Trustor, which Beneficiary, in its
discretion, deems proper for the protection or clearance of title to the Trust
Estate, or for the protection of Beneficiary's interests with respect thereto.

(e) Legal Proceedings. To prosecute and defend all actions and
proceedings in connection with the Trust Estate.

(f) Other Acts. To execute, acknowledge and deliver all other instruments
and documents in the name of Trustor that are necessary or desirable, to
exercise Trustor's rights under all contracts concerning the Trust Estate and to
do all other acts with respect to the Trust Estate that Trustor might do on its
own behalf, as Beneficiary, in its reasonable discretion, deems proper.

DEED OF TRUST (CASINO BARGE EQUIPMENT)

IN WITNESS WHEREOF, the undersigned have executed this Deed of Trust and
Security Agreement as of the day and year first above written with actual
execution on the date set forth in the acknowledgment below.

BL DEVELOPMENT CORP.
a Minnesota corporation,
as Trustor

By:/s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer

STATE OF MINNESOTA )
) ss:
COUNTY OF HENNEPIN )

Personally appeared before me, the undersigned authority in and for
the said county and state, on this 16th day of May, 1996, within my
jurisdiction, the within named Timothy J. Cope who acknowledged that he is the
Chief Financial Officer of BL Development Corp., a Minnesota corporation, and
that for and on behalf of the said corporation, and as its act and deed he
executed the above and foregoing instrument, after first having been duly
authorized by said corporation to do so.

/s/ PATRICIA L. BUFFMAN
----------------------------------
NOTARY PUBLIC

My Commission expires:

- --------------------------------
(Affix official seal, if applicable)

DEED OF TRUST (CASINO BARGE EQUIPMENT)

HANCOCK BANK,
not in its individual capacity
but solely as Lessor and Trustee
pursuant to the Participation
Agreement, as Trustor

By: /s/ C. H. Gibbons
Name: C. H. Gibbons
Title: Vice President & Trust Officer

STATE OF MISSISSIPPI)
) ss:
COUNTY OF HARRISON )

Personally appeared before me, the undersigned authority in and for the
said county and state, on this 13th day of May, 1996, within my jurisdiction,
the within named C. H. Gibbons who acknowledged that he is the Vice President &
Trust Officer of Hancock Bank, a state banking association, and that for and on
behalf of the said bank, and as its act and deed in the representative capacity
therein stated he executed the above and foregoing instrument, after first
having been duly authorized by said bank to do so.

----------------------------------
NOTARY PUBLIC

My Commission expires:
My Commission Expires Jan. 15, 2000

- --------------------------------
(Affix official seal, if applicable)

SCHEDULE A

LEGAL DESCRIPTION

The following described real property located in Sections 5 and 6, Township 3
South, Range 10 West, Tunica County, Mississippi:

Commencing at a point in the centerline of the Levee of the Yazoo-Mississippi
Delta Levee Board at Levee Centerline Station 18/50 + 30; thence northeastwardly
at an azimuth based on true South 1960 44' 19" a distance of 458.21 feet to the
true POINT OF BEGINNING; thence northeastwardly at an azimuth 2140 44' 25" a
distance of 3308.66 feet to a point; thence northwestwardly at an azimuth 1240
52' 30" a distance 641.48 feet to a point; thence southwestwardly at an azimuth
390 39' 34" a distance of 709.96 feet to a point; thence westwardly at an
azimuth 970 22' 11" to the state line between Arkansas and Mississippi; thence
in a general southwardly direction along the state line between Arkansas and
Mississippi to the point of intersection with azimuth 1240 40' 34" from the
POINT OF BEGINNING; thence southeastwardly at an azimuth 3040 40' 34" to the
POINT OF BEGINNING;

All azimuths stated herein running clockwise from true South;

The area of such real property lying easterly of the east meander line of Buck
Lake being 52.8 acres, more or less.

SCHEDULE B

EQUIPMENT

[Missing the text for this schedule B]

[EXECUTION COPY]

THIRD PREFERRED MORTGAGE
ON THE WHOLE OF THE
[NAME OF REDOCUMENTED VESSEL]
(Official Number )

BL DEVELOPMENT CORP.
13705 FIRST AVENUE NORTH
PLYMOUTH, MINNESOTA 55441-5451
as Owner and Mortgagor

In Favor Of

FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION
79 MAIN STREET
SALT LAKE CITY, UTAH 84111
as Trustee and Mortgagee

For

BA LEASING & CAPITAL CORPORATION
FOUR EMBARCADERO CENTER, SUITE 1200
SAN FRANCISCO, CALIFORNIA 94111
as Agent

Dated as of May 10, 1996

Discharge Amount: $120,001,000.00 Together
With Interest and Performance
of Mortgage Covenants

TABLE OF CONTENTS

Page

ARTICLE I

DEFINITIONS AND RULES OF CONSTRUCTION

SECTION 1.1. Definition of Terms. . . . . . . . . . . . . 5
SECTION 1.2. Rules of Construction. . . . . . . . . . . . 6

ARTICLE II

GENERAL MORTGAGE PROVISIONS

SECTION 2.1. General. . . . . . . . . . . . . . . . . . . 6

ARTICLE III

REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MORTGAGOR

SECTION 3.1. Corporate Status of Mortgagor. . . . . . . . 7
SECTION 3.2. Liens. . . . . . . . . . . . . . . . . . . . 7
SECTION 3.3. Compliance With Law. . . . . . . . . . . . . 7
SECTION 3.4. Operation of Vessel. . . . . . . . . . . . . 8
SECTION 3.5. Payment of Taxes, etc. . . . . . . . . . . . 8
SECTION 3.6. Notice of Mortgage . . . . . . . . . . . . . 8
SECTION 3.7. Release From Arrest. . . . . . . . . . . . . 9
SECTION 3.8. Maintenance of Vessel. . . . . . . . . . . . 9
SECTION 3.9. Access to Vessel . . . . . . . . . . . . . . 9
SECTION 3.10. Documentation of Vessel. . . . . . . . . . . 9
SECTION 3.11. Sale, Charter or Mortgage of Vessel. . . . . 9
SECTION 3.12. Insurance. . . . . . . . . . . . . . . . . . 9
SECTION 3.13. Requisition of Title to Vessel . . . . . . . 10
SECTION 3.14. Requisition of Vessel but not Title. . . . . 10
SECTION 3.15. Execution of Additional Documents. . . . . . 11

ARTICLE IV

EVENTS OF DEFAULT AND REMEDIES

SECTION 4.1.A. Events of Default . . . . . . . . . . . . .11
B Remedies . . . . . . . . . . . . . . . . . 12
SECTION 4.2. Sale of Vessel by Mortgagee. . . . . . . . 14
SECTION 4.3. Mortgagee to Sign for
Mortgagor. . . . . . . . . . . . . . . . . 14
SECTION 4.4. Mortgagee to Collect Hire, etc. . . . . . .14
SECTION 4.5. Mortgagee's Right to
Possession. . . . . . . . . . . . . . . . .15
SECTION 4.6. Appearance by Mortgagee on
Behalf of Mortgagor . . . . . . . . . . . .15
SECTION 4.7. Acceleration of Indebtedness
Secured Hereby. . . . . . . . . . . . . . .15
SECTION 4.8. Right of Mortgagee. . . . . . . . . . . . .16
SECTION 4.9. Cure of Defaults. . . . . . . . . . . . . .16
SECTION 4.10. Restoration of Position . . . . . . . . . .16
SECTION 4.11. Proceeds of Sale. . . . . . . . . . . . . .17
SECTION 4.12. Repairs to Vessel and Sale of
Equipment. . . . . . . . . . . . . . . . . 17
SECTION 4.13. Advances by Mortgagee . . . . . . . . . . .18

ARTICLE V

MISCELLANEOUS PROVISIONS

SECTION 5.1. Addresses . . . . . . . . . . . . . . . . 18
SECTION 5.2. Counterparts. . . . . . . . . . . . . . . 20
SECTION 5.3. Interest of Mortgagor . . . . . . . . . . 20
SECTION 5.4. Survivorship of Covenants . . . . . . . . 20
SECTION 5.5. Amendments. . . . . . . . . . . . . . . . 20
SECTION 5.6. Discharge of Lien . . . . . . . . . . . . 20
SECTION 5.7. Incorporation into Mortgage . . . . . . . 20
SECTION 5.8. Governing Law . . . . . . . . . . . . . . 20

SCHEDULE I - - Equipment

EXHIBIT A - - Master Vessel Trust Agreement
EXHIBIT B - - Participation Agreement and Appendix 1
EXHIBIT C - - Loan Agreement
EXHIBIT D - - Notes
EXHIBIT E - - Lease
EXHIBIT F - - Intercreditor Agreement

THIRD PREFERRED MORTGAGE

THIS THIRD PREFERRED MORTGAGE dated as of _______, 1996, is granted by:

BL DEVELOPMENT CORP.
13705 First Avenue North
Plymouth, Minnesota 55441-5451

a corporation organized and existing under and by virtue of the laws of the
State of Minnesota (the "Mortgagor") in favor of:

FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION
79 South Main Street
Salt Lake City, Utah 84111

a national banking association organized and existing under and by virtue of the
laws of the United States, not in its individual capacity but solely as trustee
(the "Mortgagee") pursuant to a Master Vessel Trust Agreement, dated as of May
10, 1996 (the "Master Vessel Trust Agreement") with and for:

BA LEASING & CAPITAL CORPORATION Four Embarcadero Center, Suite 1200 San
Francisco, California 94111

a corporation organized and existing under and by virtue of the laws of the
State of California (the "Agent") for the Lenders party to the Participation
Agreement referred to below.

WHEREAS:

A. The Mortgagor is the sole owner of the whole of the
vessel identified and described in the Granting Clause of this
Third Preferred Mortgage (this "Mortgage").

B. The Mortgagor has directly and indirectly granted first priority mortgage
liens on such vessel in favor of American Bank National Association, as
indenture trustee (the "Indenture Trustee") under that certain Indenture, dated
as of November 30, 1995 (the "Indenture") to secure the payment of principal and
interest on the 10 1/8% First Mortgage Notes due November 30, 2003 in the
aggregate principal amount of $450,000,000 issued by Grand Casinos, Inc., a
Minnesota corporation ("GCI") pursuant to the Indenture (the "Indenture
Obligations").

C. The Mortgagor and GCI and certain of its subsidiaries have entered into
that certain Participation Agreement, dated as of May 10, 1996 (as amended,
modified or supplemented from time to time, the "Participation Agreement"), with
the Borrower, the Agent, and the Co-Agents, the Lead Manager and the Lenders
named therein.

D. The Mortgagor has entered into a grantor Trust with Hancock Bank as
Trustee pursuant to the terms of a Trust Agreement, dated as of May 10, 1996. In
its capacity as Trustee under said Trust Agreement, Hancock Bank is herein
referred to as the "Borrower". The Borrower, the Agent, the Co-Agents, the Lead
Manager and the Lenders named therein have entered into a Loan Agreement as
contemplated by the Participation Agreement.

E. Pursuant to the Participation Agreement and the Loan Agreement, the
Lenders have committed to lend to the Borrower a maximum principal amount not to
exceed $120,001,000. Such loans are evidenced by promissory notes (as amended,
modified, supplemented, renewed or extended from time to time, the "Notes")
executed by the Borrower in favor of each Lender. The proceeds of said loans
evidenced by the Notes have been and will be used to finance the purchase and
installation of certain equipment on such Vessel.

F. The Borrower, as lessor, has entered into a Lease Agreement, dated as of
May 10, 1996 (as amended, modified or supplemented from time to time, the
"Lease"), with the Mortgagor, as lessee, respecting the equipment described
above in Paragraph E.

G. Forms of each of the Master Vessel Trust Agreement, Participation
Agreement, Loan Agreement, Notes, and Lease are attached hereto respectively as
Exhibits A, B, C, D, and E and are hereby made a part hereof.

H. The Indenture Trustee, Bank of America National Trust and Savings
Association, the Agent, the Mortgagor, Grand Casinos, Inc. and certain of its
subsidiaries have entered into an Intercreditor Agreement, dated May 10, 1996
(as amended, modified or supplemented from time to time, the "Intercreditor
Agreement"), the form of which is attached hereto as Exhibit F and hereby made a
part hereof.

I. In order to secure the performance of Mortgagor's obligations under the
Lease, the Participation Agreement and the Borrower's obligations under the
Participation Agreement, the Notes, and the Loan Agreement, the Mortgagor has
agreed to execute and deliver and does hereby execute and deliver this Mortgage
as follows:

GRANTING CLAUSE

NOW, THEREFORE, THIS MORTGAGE WITNESSETH:

THAT, in consideration of the premises and of the additional covenants
herein contained and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and for the purpose of securing as a
second priority lien in favor of the Mortgagee (1) the payment and performance
of all obligations, undertakings and liabilities of Mortgagor and the Borrower,
now existing or hereafter incurred, under, arising out of, or in connection with
the Lease and the other Operative Documents (as defined below) to which
Mortgagor or the Borrower is a party, (2) the satisfaction of those terms and
conditions contained herein applicable to the Mortgagor, (3) the payment of any
and all future advances to the Mortgagor made for the improvement, protection or
preservation of such vessel, together with interest at the Overdue Rate (as
defined below), and (4) the payment of all sums expended or advanced by the
Mortgagee under or pursuant to the terms hereof or to protect the security
hereof (including under Sections 4.7 and 4.13), together with interest thereon
as herein provided, whether any of the foregoing obligations now exist or are
hereafter created or incurred, and whether they are or may be direct or
indirect, due or to become due, absolute or contingent, primary or secondary,
liquidated or unliquidated, or sole, joint, several or joint and several
(collectively, the "Obligations"), THE MORTGAGOR HAS granted, conveyed,
mortgaged, pledged, hypothecated, set over and confirmed AND THE MORTGAGOR DOES
BY THESE PRESENTS grant, convey, mortgage, pledge, hypothecate, set over and
confirm UNTO AND IN FAVOR OF THE MORTGAGEE FOR THE AGENT, the whole of the
following named and described vessel including the Equipment defined below
(collectively, the "Vessel") to wit:

OFFICIAL HOME
NAME NUMBER PORT

TOGETHER WITH all equipment, parts and accessories integral to the operation of
or otherwise now or from time to time installed on the Vessel or substitutions
thereof, including, but not limited to, all of its boilers, engines, machinery,
masts, spars, boats, cables, motors, tools, anchors, chains, booms, cranes,
rigs, pumps, pipe, tanks, tackle, apparel, furniture, fixtures, rigging,
supplies, fittings, communication systems, visual and electronic surveillance
systems all gaming machinery, equipment, devices, accessories and several
improvements listed on Schedule I hereto (the "Equipment") relating to the
gaming operations and the conduct of Mortgagor's gaming business and games of
chance on the Vessel, and transportation systems, tools, utensils, food and
beverage, liquor, uniforms, linens, housekeeping and maintenance supplies, fuel,
computer equipment, calculators, adding machines, video game and slot machines,
and any other electronic equipment of every nature used in connection with the
operation of the Vessel, all machinery, equipment, engines, appliances and
fixtures for generating or distributing air, water, heat, electricity, light,
fuel or refrigeration, or for ventilating or sanitary purposes, or for the
exclusion of vermin or insects, or for the removal of dust, refuse or garbage,
all wall-beds, wall-- safes, built-in furniture and installations, shelving,
lockers, partitions, doorstops, vaults, motors, elevators, dumb-waiters,
awnings, window shades, venetian blinds, light fixtures, fire hoses and brackets
and boxes for the same, fire sprinklers, alarm, surveillance and security
systems, computers, drapes, drapery rods and brackets, mirrors, mantels,
screens, linoleum, carpets and carpeting, plumbing, bathtubs, sinks, basins,
pipes, faucets, water closets, laundry equipment, washers, dryers, ice-boxes and
heating units, all kitchen and restaurant equipment, including but not limited
to silverware, dishes, menus, cooking utensils, stoves, refrigerators, ovens,
ranges, dishwashers, disposals, water heaters, incinerators, furniture, fixtures
and furnishings, all cocktail lounge supplies, including but not limited to
bars, glassware, bottles and tables used in connection with the Vessel, all
chaise lounges, hot tubs, swimming pool heaters and equipment, and all other
recreational equipment (computerized and otherwise), beauty and barber
equipment, and maintenance supplies used in connection with the Vessel, all
specifically designed installations and furnishings, and all furniture,
furnishings and personal property of every nature whatsoever now or hereafter
owned or leased by Mortgagor or in which Mortgagor has any rights or interest
and located in or on, or attached to, or used or intended to be used or which
are now or may hereafter be appropriated for use on or in connection with the
operation of the Vessel, or in connection with any construction being conducted
or which may be conducted thereon, and all extensions, additions, accessions,
improvements, betterments, renewals, substitutions, and replacements to any of
the foregoing, all of which (to the fullest extent permitted by law) shall be
conclusively deemed appurtenances to the Vessel, and all other appurtenances to
the Vessel appertaining or belonging thereto, whether now owned or hereafter
acquired, whether on board or not, and all additions, improvements and
replacements hereafter made in or to the Vessel. Mortgagor and Mortgagee
acknowledge that significant structures, improvements, additions, equipment and
other appurtenances may be added to the Vessel after the execution of this
Mortgage, and the Mortgagor specifically affirms and agrees that all such
appurtenances to the Vessel shall be subject to this Mortgage.

TO HAVE AND HOLD the same unto Mortgagee, its successors and assigns,
forever upon the terms herein set forth to secure the performance and observance
of and compliance with the covenants, terms and conditions in the and the other
obligations secured hereby.

PROVIDED, only, and the condition of these presents is such, that the
mortgage lien on the Vessel shall be subject, subordinate and junior to the
Indenture Trustee Mortgages and any Pari Passu Secured Mortgages (as such terms
are defined in the Intercreditor Agreement) to secure the Indenture Obligations
until such time as all Indenture Obligations shall have been paid in full.

AND NOW, THE PARTIES HEREBY FURTHER AGREE, COVENANT AND DECLARE that the
Vessel is to be held subject to the following covenants, conditions, provisions,
terms and uses:

ARTICLE I

DEFINITIONS AND RULES OF CONSTRUCTION

For all purposes of this Mortgage, unless the context otherwise requires:

SECTION 1.1. Definition of Terms.

(a) Act shall mean Chapter 313 of Title 46 United States Code.

(b) Office of the Documentation Officer shall mean the Office of the
Documentation Officer of the United States Coast Guard at New Orleans,
Louisiana or the United States Coast Guard National Vessel Documentation
Center.

For all purposes hereof, the capitalized terms used herein and not otherwise
defined shall have the meanings assigned thereto in Appendix 1 to the
Participation Agreement which is attached hereto and incorporated herein.

SECTION 1.2. Rules of Construction. Unless the context otherwise requires:

(a) A term has the meaning assigned to it;

(b) "Or" is not exclusive;

(d) All references herein to particular articles or sections, unless
otherwise provided, are references to articles or sections of this
Mortgage;

(e) The headings herein are solely for convenience of reference and
shall not constitute a part of this Mortgage nor shall they affect its
meaning, construction or effect;

(f) References to the Participation Agreement, the Lease and any other
Operative Documents and other instruments shall be deemed to refer to the
Participation Agreement, the Lease, the Operative Documents and any other
related documents as the same may from time to time be amended,
supplemented or modified by the parties hereto in accordance with the terms
thereof.

ARTICLE II

GENERAL MORTGAGE PROVISIONS

SECTION 2.1. General. For purposes of this Mortgage and in order to comply
with Title 46, Section 31321(b)(3), the parties to this Mortgage hereby declare
that the indebtedness which is now or will in the future be owed under the Lease
and the Notes and the other Obligations hereby secured is an amount up to the
sum of $120,001,000.00, as the total of all possible advances that may be made,
together with interest and performance of the covenants of this Mortgage, the
Lease and the other Operative Documents. The discharge amount is the same as the
total amount, together with interest and performance of the covenants of this
Mortgage, the Lease and the other Operative Documents.

ARTICLE III

REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MORTGAGOR

The Mortgagor represents, warrants, covenants and agrees with Mortgagee as
follows:

SECTION 3.1. Corporate Status of Mortgagor. The Mortgagor is a corporation
organized and existing under and by virtue of the laws of the State of Minnesota
and is and will remain a citizen of the United States of America within the
meaning of Title 46, Section 802, of the United States Code, entitled to own and
document the Vessel to engage in the coastwise trade under the laws of the
United States of America.

SECTION 3.2. Liens. (a) The Mortgagor lawfully owns and is lawfully
possessed of the Vessel free and clear of all liens, mortgages, taxes and
encumbrances, subject to the Indenture Trustee Mortgages and except liens
permitted under the Participation Agreement or under the Indenture in favor of
the Indenture Trustee and the noteholders; and the Mortgagor will and does
hereby warrant and defend the title and possession thereto and to every part
thereof for the benefit of Mortgagee against the claims and demands of all
persons whomsoever.

(b) Neither the Mortgagor nor any Master of the Vessel nor any other
person has or shall have the right, power or authority to create, incur or
permit to be placed or imposed or continued upon the Vessel any lien
whatsoever other than for crew's wages, salvage, any mortgages recorded
prior to the recording of this Mortgage, and this Mortgage.

(c) Except for the lien of any Mortgage recorded prior to this
Mortgage and this Mortgage and except for Permitted Liens (as defined in
Appendix 1 to the Participation Agreement), the Mortgagor will not suffer
to be continued any lien, encumbrance or charge on the Vessel, and in due
course and in any event within thirty (30) days after the same becomes due
and payable will pay or cause to be discharged or make adequate provision
for the satisfaction or discharge of all such liens, encumbrances or
charges or will cause the Vessel to be released or discharged from any such
lien, encumbrance or charge therefor.

SECTION 3.3. Compliance With Law. The Mortgagor will comply with and satisfy
all applicable formalities and provisions of the laws and regulations of the
United States of America in order to perfect, establish and maintain this
Mortgage, any supplement or amendment thereto and any assignment thereof by the
Mortgagee as a second preferred mortgage upon the Vessel and upon all additions,
improvements and replacements made in or to the same. The Mortgagor shall
furnish to Mortgagee, from time to time, such proofs as Mortgagee may reasonably
request with respect to the Mortgagor's compliance with the foregoing covenant.
The Mortgagor shall promptly pay and discharge all United States Coast Guard
fees and expenses in connection with the recordation of this Mortgage, any
supplement or amendment thereto and any assignment thereof by the Mortgagee. In
the event that the Lease, the Notes or the other Operative Documents secured
hereby, or any provisions hereto or thereof, shall be deemed invalidated in
whole or in part by reason of any present or future law or any decision of any
court, the Mortgagor will execute, on its behalf, such other and further
assurances and documents as in the opinion of Mortgagee may be required to more
effectually subject the Vessel to the payment and the performance of the terms
and provisions of the Lease, the Notes and the other Operative Documents. In
addition, the Mortgagor will furnish to Mortgagee such additional information as
Mortgagee may reasonably require.

SECTION 3.4. Operation of Vessel. The Mortgagor will not cause or permit the
Vessel to be operated in any manner contrary to law and the Mortgagor will not
engage in any unlawful trade or violate any law or expose the Vessel to penalty
or forfeiture, and will not do, or suffer or permit to be done, anything which
can or may injuriously affect the registration or flag of the Vessel under the
laws and regulations of the United States of America. Mortgagor will never
operate the Vessel outside the navigation limits of the insurance carried
pursuant to Section 3.12 of Article III of this Mortgage.

SECTION 3.5. Payment of Taxes, etc. The Mortgagor will pay or cause to be
paid prior to delinquency, all taxes, assessments, governmental levies, fines
and penalties lawfully imposed on the Mortgagor or on the Vessel; provided,
however, that the Mortgagor shall not be required to pay or discharge any such
tax, assessment, charge, fine or penalty so long as the legality thereof shall
be contested in good faith and by appropriate proceedings and the failure to pay
would not have a Material Adverse Effect on the Mortgagor unless and until
foreclosure, distraint, sale or other similar proceedings shall have been
commenced with respect to the property which is subject to any such tax,
assessment, charge, fine or penalty.

SECTION 3.6. Notice of Mortgage. The Mortgagor will place, and at all times
will retain, properly certified copies of this Mortgage and a Notice of this
Mortgage with the Certificate of Documentation of the Vessel on board the
Vessel.

SECTION 3.7. Release From Arrest. If a complaint be filed against the
Vessel, or if the Vessel is otherwise attached, arrested, levied upon or taken
into custody by virtue of any legal proceeding in any court, the Mortgagor will
promptly notify Mortgagee thereof by telephone facsimile, confirmed by letter,
and within three (3) days will cause the Vessel to be released by posting
security in the form of a Letter of Undertaking or a Release Bond, and will
promptly notify Mortgagee thereof in the manner aforesaid.

SECTION 3.8. Maintenance of Vessel. The Mortgagor will at its own expense at
all times maintain, preserve and keep the Vessel in good condition, working
order and repair and will from time to time make all necessary and proper
repairs, renewals, replacements, betterments and improvements, including without
limitation those replacements required by Section 4.12 of Article IV. The Vessel
shall, and the Mortgagor covenants that it will, at all times comply with all
applicable laws, treaties and covenants and rules and regulations issued
thereunder.

SECTION 3.9. Access to Vessel. The Mortgagor at all reasonable times will
afford Mortgagee or its authorized representatives full and complete access to
the Vessel for the purpose of inspecting the same and its papers and records.

SECTION 3.10. Documentation of Vessel. The Mortgagor will keep the Vessel
duly documented as a vessel of the United States of America, under the flag of
the United States of America, entitled to engage in the operations conducted by
the Mortgagor and eligible for the trade in which the Vessel is operating.

SECTION 3.11. Sale, Charter or Mortgage of Vessel. Except for the Indenture
Trustee Mortgages, the Mortgagor will not mortgage, transfer, or demise charter
the Vessel without the written consent of Mortgagee first had and obtained; and
any such written consent to any one mortgage, transfer, or demise charter shall
not be construed to be a waiver of this provision in respect of any subsequent
proposed mortgage, transfer, or demise charter. Any such mortgage, transfer, or
demise charter of the Vessel shall be subject to the provisions of this Mortgage
and the lien it creates, unless released therefrom by the Mortgagee.

SECTION 3.12. Insurance. Mortgagor shall at its own expense keep the Vessel
insured in accordance with the terms of the Indenture. Mortgagor agrees,
nonetheless, that it will adjust the amounts and nature of coverages if
reasonably requested by the Mortgagee as necessary or advisable in light of the
nature of business conducted thereon. If Mortgagor shall at any time fail to
comply with the foregoing, Mortgagee may, but shall not be obligated to, procure
such insurance and pay any unpaid premiums or calls, the costs and expenses of
said procurement and payment, together with interest at the Overdue Rate from
the date of such expenditure, and which thereby shall become an additional
indebtedness due from Mortgagor to Mortgagee and part of the Obligations secured
by this Mortgage and which shall be paid by Mortgagor on demand. In the case all
insurance monies, awards or other payments shall be paid over to the Mortgagee
and the Mortgagee shall pay such amounts over to the Mortgagor subject to any
applicable conditions set forth in the Intercreditor Agreement.

SECTION 3.13. Requisition of Title to Vessel. In the event that the title or
ownership of the Vessel shall be requisitioned, purchased or taken by the United
States of America or any government of any State of the United States or any
other country or any department, agency or representative thereof, pursuant to
any present or future law, proclamation, decree, order or otherwise, the lien of
this Mortgage shall be deemed to attach to the claim for compensation, and the
compensation, purchase price, reimbursement or award for such requisition,
purchase or other taking of such title or ownership is hereby declared payable
to Mortgagee, who shall be entitled to receive the same and shall apply it as
provided in the Intercreditor Agreement. In the event of any such requisition,
purchase or taking, the Mortgagor shall promptly execute and deliver to
Mortgagee such documents, if any, as in the opinion of counsel for Mortgagee may
be necessary or useful to facilitate or expedite the collection by Mortgagee of
such compensation, purchase price, reimbursement or award.

SECTION 3.14. Requisition of Vessel but not Title. In the event that the
United States of America or any government of any other country or any
department, agency or representative thereof shall not take the title or
ownership of the Vessel but shall requisition, charter, or in any manner take
over the use of the Vessel pursuant to any present or future law, proclamation,
decree, order or otherwise, and in the event Mortgagor is in default of the
terms of this Mortgage, all charter hire and compensation resulting therefrom
shall be payable to Mortgagee, and if, as a result of such requisitioning,
chartering or taking of the use of the Vessel such government, department,
agency or representative thereof shall pay or become liable to pay any sum by
reason of the loss of or injury to or depreciation of the Vessel any such sum is
hereby made payable to Mortgagee, who shall be entitled to receive the same and
shall apply any such sums referred to in this Section as provided in the
Intercreditor Agreement. In the event of any such requisitioning, chartering or
taking of the use of the Vessel, the Mortgagor shall promptly execute and
deliver to Mortgagee such documents, if any, and shall promptly do and perform
such acts, if any, as in the opinion of counsel for Mortgagee may be necessary
or useful to facilitate or expedite the collection by Mortgagee of such claims
arising out of the requisitioning, chartering or taking of the use of the
Vessel.

SECTION 3.15. Execution of Additional Documents. Mortgagor agrees to execute
all additional documents, instruments, UCC Financing Statements and other
agreements that Mortgagee may deem necessary and appropriate, within its sole
discretion, in form and substance satisfactory to Mortgagee, to keep this
Mortgage in effect, to better reflect the true intent of this Mortgage, and to
consummate fully all of the transactions contemplated by the Lease and the other
Operative Documents and hereby.

ARTICLE IV

EVENTS OF DEFAULT AND REMEDIES

SECTION 4.1. A. Events of Default. The term "Event of Default," wherever
used in this Mortgage, shall mean any one or more of the following events
(whether any such event shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulations of any
administrative or governmental body):

(1) The occurrence of an Event of Default (as defined in Appendix 1 to
the Participation Agreement); or

(2) Default in the due observance or performance of any of the other
covenants and conditions herein required to be kept and performed and
continuance of such default for sixty (60) days after notice by Mortgagee
provided, however, that the Mortgagor shall not be deemed to be in default
for failure to keep the Vessel in good condition, working order and repair
pursuant to Section 3.08 of Article III if the Mortgagor shall be
diligently taking steps to comply with the requirements of said Section; or

(3) The Mortgagor shall (i) abandon the Vessel without due cause; or
(ii) cease to be a citizen of the United States of America within the
meaning of Title 46, Section 802 of the United States Code entitled to
engage in the trade in which the Vessel is operating; or

(4) The title or ownership of the Vessel shall be requisitioned,
purchased or taken by the government of any country or by any department,
agency or representative thereof and there shall not have been paid to
Mortgagee an amount in cash in United States dollars equal to the fair
value of the Vessel within ninety (90) days after such event occurs.

B. Remedies. Then and in each and every such case Mortgagee
shall have the right to:

(1) Declare all the Obligations, with the interest accrued thereon,
and all other indebtedness or sums secured hereby, to be due and payable
immediately, and upon such declaration such principal with interest and
other sums shall immediately become due and payable without demand,
presentment, notice or other requirements of any kind (all of which the
Mortgagor waives) notwithstanding anything in this Mortgage or any
Operative Document or applicable law to the contrary;

(2) (a) Exercise all the rights and remedies in foreclosure and
otherwise given to Mortgagee by the laws and regulations of the United
States of America or of the country wherein the Vessel shall then be found
or of any country wherein the Vessel may thereafter be found or of any
other applicable jurisdiction and (b) exercise all the rights and remedies
given to the Mortgagee by the laws and regulations of the state in which
the Vessel is located or any other relevant state;

(3) Bring suit at law, in equity or in admiralty, as it may be
advised, to recover judgment for any and all amounts due under this
Mortgage, or otherwise hereunder, and collect the same from the Mortgagor
and/or out of any and all property of the Mortgagor whether covered by this
Mortgage or otherwise;

(4) Take the Vessel without legal process wherever the same may be;
and the Mortgagor or other person in possession, forthwith upon demand of
Mortgagee shall surrender to Mortgagee possession of the Vessel and
Mortgagee may, without being responsible for loss or damage, hold, lay up,
lease, charter, operate or otherwise use the Vessel for such time and upon
such terms as it may deem to be for its best advantage, accounting only for
the net profits, if any, arising from such use of the Vessel and charging
upon all receipts from the use of the Vessel or from the sale thereof by
court proceedings or pursuant to Subsection (5) of Section 4.01 next
following, all costs, expenses, charges, damages or losses by reason of
such use; and if at any time Mortgagee shall avail itself of the right
herein given it to take the Vessel, Mortgagee shall have the right to dock
the Vessel for any length of time at any dock, pier, or other premises of
the Mortgagor or leased by the Mortgagor without charge, or to dock it at
any other place at the cost and expense of the Mortgagor;

(5) Without being responsible for loss or damage, sell the Vessel at
any place and at such time as Mortgagee may specify and in such manner as
Mortgagee may deem advisable free from any claim by the Mortgagor in
admiralty, in equity, at law or by statute, after first giving notice of
the time and place of sale with a general description of the property in
the following manner:

(a) By publishing such notice for three (3) times a week for two
consecutive weeks, with the last date of publication not more than
twenty (20) nor less than five (5) days immediately preceding the
sale, in a daily newspaper of general circulation published within the
jurisdiction encompassed by the Northern District of Mississippi,
Delta Division and in the Journal of Commerce;

(b) If the place of sale should not be Tunica County,
Mississippi, then also by publication of a similar notice in a daily
newspaper, if any, published at the place of sale; and

Mortgagee may adjourn any such sale from time to time by announcement at the
time and place appointed for such sale or for such adjourned sale, and without
further notice or publication Mortgagee may make any such sale at the time and
place to which the same shall be so adjourned. Any such sale may be conducted
without bringing the Vessel to be sold to the place designated for such sale and
in such manner as Mortgagee may deem to be for its best advantage. Any sale made
by the Mortgagee in accordance with the terms of this Section 4.1(5) shall be
deemed made in a commercially reasonable manner insofar as the Mortgagor is
concerned.

(6) Mortgagor hereby consents to the appointment of a consent keeper
or substitute custodian by Mortgagee with the costs thereof to be a cost of
the sale to be paid from the proceeds of the sale or by Mortgagor.

SECTION 4.2. Sale of Vessel by Mortgagee. Any sale of the Vessel made in
pursuance of this Mortgage, whether under the power of sale hereby granted or
any judicial proceedings, shall operate to divest all right, title and interest
of any nature whatsoever of the Mortgagor therein and thereto, and shall bar the
Mortgagor, its successors and assigns, and all persons claiming by, through or
under them. At any such sale Mortgagee may bid for and purchase the Vessel and
upon compliance with the terms of sale may hold, retain and dispose of such
property without further accountability therefor. In case of any such sale the
Mortgagee shall be entitled, for the purpose of making settlement or payment for
the property purchased, to use and apply the Notes or any portion thereof in
order that there may be credited against the amount remaining due and unpaid
thereon the sums payable to the Mortgagee out of the net proceeds of such sale
after allowing for the costs and expense of sale and other charges; and
thereupon the Mortgagee shall be credited, on account of such purchase price,
with the net proceeds that shall have been so credited upon the Notes. No
purchaser shall be bound to inquire whether notice has been given, or whether
any default has occurred, or as to the propriety of the sale or as to the
application of the proceeds thereof.

SECTION 4.3. Mortgagee to Sign for Mortgagor. For purposes of any sale of
the Vessel made in pursuance of this Mortgage, whether under the power of sale
hereby granted or any judicial proceedings, Mortgagee is hereby appointed
attorney-in-fact of the Mortgagor to execute and deliver to any purchaser
aforesaid and is hereby vested with full power and authority to make, in the
name and in behalf of the Mortgagor, a good conveyance of the title to the
Vessel so sold. In the event of any sale of the Vessel, under any power herein
contained, the Mortgagor will, if and when required by Mortgagee, execute such
form of conveyance of the Vessel as Mortgagee may direct or approve.

SECTION 4.4. Mortgagee to Collect Hire, etc. Mortgagee is hereby appointed
attorney-in-fact of the Mortgagor upon the happening of any Event of Default, in
the name of the Mortgagor to demand, collect, receive, compromise and sue for,
so far as may be permitted by law, all earnings, tolls, rents, issues, revenues,
income and profits of the Vessel and all amounts due from underwriters under any
insurance thereon as payment of losses or as return premiums or otherwise, and
all other sums, due or to become due at the time of the happening of any Event
of Default in respect of the Vessel, or in respect of any insurance thereof from
any person whomsoever, and to make, give and execute in the name of the
Mortgagor acquittances, receipts, releases, or other discharges for the same,
whether under seal or otherwise, and to endorse and accept in the name of the
Mortgagor all checks, notes, drafts, warrants, agreements and all other
instruments in writing with respect to the foregoing. All amounts so received
shall first be applied to operating expenses and then to unpaid Obligations
pursuant to the Intercreditor Agreement.

SECTION 4.5. Mortgagee's Right to Possession. Whenever any right to enter
and take possession of the Vessel accrues to Mortgagee, it may require the
Mortgagor to deliver, and the Mortgagor shall on demand, at its own cost and
expense, deliver the Vessel to Mortgagee as demanded. If any legal proceedings
shall be taken to enforce any right under this Mortgage, Mortgagee shall be
entitled as a matter of right to the appointment of a receiver of the Vessel and
the earnings, tolls, rents, issues, revenues, income and profits due or to
become due and arising from the operation thereof.

SECTION 4.6. Appearance by Mortgagee on Behalf of Mortgagor. The Mortgagor
authorizes and empowers Mortgagee or its appointees or any of them to appear in
the name of the Mortgagor, its successors and assigns, in any court where a suit
is pending against the Vessel because of or on account of any alleged lien
against the Vessel from which the Vessel has not been released and to take such
proceedings as to them or any of them may seem proper towards the defense of
such suit and the discharge of such lien, in the event that the Mortgagor shall
not be taking proceedings reasonably satisfactory to Mortgagee, and in such case
all expenditures made or incurred by Mortgagee or his appointees for the purpose
of such defense or discharge shall be a debt due from the Mortgagor, its
successors and assigns, to Mortgagee, and shall be secured by the lien of this
Mortgage in like manner and extent as if the amount and description thereof were
written herein.

SECTION 4.7. Acceleration of Indebtedness Secured Hereby. The Mortgagor
covenants that upon the happening of any one or more of the Events of Default,
then upon written demand of Mortgagee, each of the Borrower and the Mortgagor
will perform its respective obligations to Mortgagee, the Agent or the Lenders
under the Lease and the other Operative Documents and this Mortgage, and in case
the Mortgagor shall fail to pay the same forthwith upon such demand, Mortgagee
shall be entitled to recover judgment for the whole amount so due and unpaid,
together with such further amounts as shall be sufficient to cover the
reasonable costs and expenses of collection, including a reasonable compensation
to Mortgagee's agents, attorneys and counsel and any necessary advances,
expenses and liabilities made or incurred by them hereunder. All moneys
collected by Mortgagee under this Section shall be applied by Mortgagee in
accordance with the provisions of Section 4.11 of this Article.

SECTION 4.8. Right of Mortgagee. Each and every power and remedy herein
given to Mortgagee shall be cumulative and shall be in addition to every other
power and remedy herein given or now or hereafter existing at law, in equity, in
admiralty or by statute, and each and every power and remedy whether herein
given or otherwise existing may be exercised from time to time and as often and
in such order as may be deemed expedient by Mortgagee, and the exercise or the
beginning of the exercise of any power or remedy shall not be construed to be a
waiver of the right to exercise at the same time or thereafter any other power
or remedy. No delay or omission by Mortgagee in the exercise of any right or
power or in the pursuance of any remedy accruing upon any default as above
defined shall impair any such right, power or remedy or construed to be a waiver
of any such Event of Default or to be any acquiescence therein; nor shall the
acceptance by Mortgagee of any security or of any payment of or on account of
any Operative Document after any Event of Default or of any payment on account
of any past default be construed to be a waiver of any right to take advantage
of any future Event of Default or of any past Event of Default not completely
cured thereby.

SECTION 4.9. Cure of Defaults. If at any time after an Event of Default and
prior to the actual sale of the Vessel or the Equipment by Mortgagee or prior to
any foreclosure proceedings, Events of Default and any accelerations of the
maturity of the Notes may be rescinded as provided in the Intercreditor
Agreement.

SECTION 4.10. Restoration of Position. In case Mortgagee shall have
proceeded to enforce any right, power or remedy under this Mortgage by
foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to Mortgagee, then and in every such case the Mortgagor and Mortgagee shall be
restored to their former positions and rights hereunder with respect to the
property subject or intended to be subject to this Mortgage, and all rights,
remedies and powers of Mortgagee shall continue as if no such proceedings had
been taken.

SECTION 4.11. Proceeds of Sale. The proceeds of any sale of the Vessel or
the Equipment and the net earnings from the hire or from any operation or use of
the Vessel by Mortgagee under any of the powers herein specified and any and all
other money received by Mortgagee pursuant to or under the terms of this
Mortgage or in any proceedings hereunder, the application of which has not
elsewhere herein been specifically provided, shall be applied at the discretion
of Mortgagee with Mortgagee having the right to impute payments as it may desire
among the following:

FIRST: To the payment of all reasonable expenses and charges,
including the expenses of any sale, and expenses of any retaking,
attorneys' fees, court costs, keepers' fees, necessary repairs and any
other expenses or advances made or incurred by Mortgagee in the protection
of its rights or the pursuance of its remedies hereunder, and to provide
adequate indemnity against liens claiming priority over or equality with
the lien of this Mortgage;

SECOND: To the payment in full of any amounts then due and unpaid in
accordance with the Intercreditor Agreement.

THIRD: To the payment of any surplus thereafter remaining to
whomsoever may be entitled thereto.

SECTION 4.12. Repairs to Vessel and Sale of Equipment. Until one or more of
the Events of Default hereinabove described shall happen, the Mortgagor (a)
shall be suffered and permitted to retain actual possession and use of the
Vessel; (b) may at any time alter, repair, change or re-equip the Vessel,
subject, however, to the provisions of Section 3.8 of Article III; and (c) shall
have the right, from time to time in its discretion and without obtaining a
release thereof by Mortgagee, to dispose of, free from the lien hereof, (1)
equipment or other appurtenances, including any gaming machinery or equipment
and accessories relating to the gaming operations of the Vessel that may become
worn out or obsolete or otherwise are no longer useful, necessary, profitable or
advantageous in the operation of the Vessel, provided that such does not
materially affect the value of the Vessel or (2) any other equipment or
accessories provided that the provisions of the Lease are complied with. Either
prior to or promptly following such removal any replacement property that shall
be free of any security interest of any other person (subject to Permitted
Liens), which shall forthwith become subject to the lien of this Mortgage as a
preferred mortgage thereon.

SECTION 4.13. Advances by Mortgagee. The Mortgagor authorizes the Mortgagee
in the Mortgagee's discretion to advance any sums necessary for the purpose of
paying (i) insurance premiums, (ii) any and all excise, property, sales, use and
other taxes, forced contributions, service charges, local assessments and
governmental charges on any of the Vessel, (iii) any Liens affecting the Vessel
(whether superior or subordinate to the lien of this Mortgage) not permitted by
the Participation Agreement, (iv) necessary repairs and maintenance expenses of
the Vessel, or (v) any other amounts which the Mortgagee deems necessary and
appropriate to preserve the validity and ranking of this Mortgage, to cure any
Default or Event of Default, to protect or preserve the Vessel or to prevent the
occurrence of any Default or Event of Default (collectively, the "Credit
Extensions") of whatever kind; provided, however, that nothing herein contained
shall be construed as making such Credit Extensions obligatory upon the
Mortgagee, or as making the Mortgagee liable for any loss, damage, or injury
resulting from the nonpayment thereof. The Mortgagor covenants and agrees that
within five (5) Business Days after written demand therefor by the Mortgagee,
the Mortgagor will repay the Credit Extensions to the Mortgagee, together with
interest thereon at the Overdue Rate, and in addition will repay any other
reasonable costs, attorneys' fees and expenses, charges and expenses of any and
every kind incurred by the Mortgagee in connection with the expenditures under
items (i) through (v) above, including payments required in respect to any Lien
affecting the Vessel, together with interest thereon at the Overdue Rate. All
such Advances and amounts (including interest) shall be included in the
Obligations secured hereby.

ARTICLE V

MISCELLANEOUS PROVISIONS

SECTION 5.1. Addresses. Any notice to be given under this Mortgage shall,
except as otherwise expressly provided herein, be served by registered or
certified mail or hand delivered, addressed as follows:

(a) To Mortgagor:

BL Development Corp.
13705 First Avenue North
Plymouth, Minnesota 55441-5451
Attention: Chief Financial Officer

with a copy to:

Russell F. Lederman, Esq.
Maslon Edelman Borman & Brand
3330 Norwest Center
Minneapolis, Minnesota 55401

and

Grand Casinos, Inc.
13705 First Avenue North
Plymouth, Minnesota 55441-5444
Attention: Chief Financial Officer

(b) To Mortgagee:

First Security Bank of Utah, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Service

with a copy to:

Barry K. Gassman, Esq.
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019

BA Leasing & Capital Corporation
Four Embarcadero Center, Suite 1200
San Francisco, California 94111
Attention:

with a copy to:

Barry K. Gassman, Esq.
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019

unless another address shall be furnished in writing by the party to receive
such notice to the party giving such notice, and any such notice shall be deemed
made as of the date of mailing or hand delivery.

SECTION 5.2. Counterparts. This Mortgage may be executed in
any number of counterparts and all such counterparts executed and
delivered each as an original shall constitute but one and the
same instrument.

SECTION 5.3. Interest of Mortgagor. The interest of the Mortgagor in the
Vessel and the interest mortgaged by this Mortgage is that of one hundred
percent (100%) absolute and sole ownership.

SECTION 5.4. Survivorship of Covenants. All the covenants, promises,
stipulations and agreements of the Mortgagor and the Obligations secured hereby
shall bind the Mortgagor and its successors and assigns and shall inure to the
benefit of Mortgagee and its successors and assigns.

SECTION 5.5. Amendments. The Lease, the Operative Documents and this
Mortgage may not be modified, supplemented or amended in any respect, or any
waiver given in regard to any of the provisions hereof, in any case which might
affect the rights of Mortgagee or Agent hereunder, except with the written
consent of Mortgagee or Agent, as the case may be, and so long as Mortgagor
shall do all acts and things necessary to maintain the preferred status of this
Mortgage.

SECTION 5.6. Discharge of Lien. When the Mortgagor's and Borrower's
obligations to the Mortgagee and the Lenders arising under the Lease and the
other Operative Documents have been satisfied in full, Mortgagee shall, at the
Mortgagor's expense, execute and deliver to the Mortgagor such documents as the
Mortgagor shall reasonably request to evidence the surrender and discharge of
the lien hereof upon the Vessel.

SECTION 5.7. Incorporation into Mortgage. The Whereas
Clauses and the Granting Clause of this Mortgage are incorporated
in and are made a part of this Mortgage.

SECTION 5.8. Governing Law. This Mortgage shall be governed by and construed
according to the provisions of the Act, and where silent, by the General
Maritime Law of the United States; provided, however, that the exercise of
certain rights hereunder or under the Operative Documents may require compliance
with the Gaming Laws.

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

IN WITNESS WHEREOF, the undersigned has caused this instrument to be duly
executed as of the date first above written.

BL DEVELOPMENT CORP.

BY: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer

STATE OF MINNESOTA)
) ss:
COUNTY OF HENNEPIN)

Personally appeared before me, the undersigned authority in and for the
said county and state, on this 16th day of May, 1996, the within named Timothy
J. Cope who upon being duly sworn did confirm and acknowledge to me that he is
Chief Financial Officer of BL Development Corp., a Minnesota corporation, and
that for and on behalf of the said corporation, and as its free act and deed he
executed the above and foregoing instrument, after first having been duly
authorized by said corporation so to do.

/s/ PATRICIA L. BUFFHAM
--------------------------------------
NOTARY PUBLIC

My Commission expires: ______________

[EXECUTION COPY]

MASTER VESSEL TRUST AGREEMENT

Dated as of May 10, 1996

Between

BA LEASING & CAPITAL CORPORATION,

"Agent"

and

FIRST SECURITY BANK OF UTAH, N.A.,

"Vessel Trustee"

TABLE OF CONTENTS

Page

Article I

Definitions .......................................... 2

Article II

Declaration of Vessel Trust ................................. 5

Article III

Transfer of Property to Vessel Trust
and Vessel Trust Receipt ...................................... 5

Article IV

Duties of the Vessel Trustee ................................ 8

Article V

Concerning the Vessel Trustee ..............................11

Article VI

Indemnification of the Vessel Trustee by the
Agent ..............................................15

Article VII

Transfer of the Agent's Interest ...................17

Article VIII

Procedure for Enforcement ........................... 18

Article IX

Payments to the Agent as Beneficiary ............... 20

Article X

Compensation of the Vessel Trustee ......................... 21

Article XI

Removal, Disqualification or Resignation of the Vessel Trustee;
Successor Vessel Trustees ......................... 22

Article XII

Termination and Discharge of Vessel Trust .................. 26

Article XIII

Amendment of Vessel Trust Agreement ........................ 27

Article XIV

Miscellaneous ....................................... 28

EXHIBITS

A. Vessel Trust Receipt

B. Vessel Security Instruments Constituting the Initial Part of the
Vessel Trust Estate

MASTER VESSEL TRUST AGREEMENT

THIS MASTER VESSEL TRUST AGREEMENT (this "Vessel Trust Agreement") is made
and entered into as of this 10th day of May 1996, between BA LEASING & CAPITAL
CORPORATION, a California corporation with an office at Four Embarcadero Center,
Suite 1200, San Francisco, California 94111, as Agent (the "Agent") for the
Lenders party to the Participation Agreement referred to below, and FIRST
SECURITY BANK OF UTAH, N.A. a national banking association organized and
existing under the laws of the United States with an office at 79 South Main
Street, Salt Lake City, Utah 84111 (the "Vessel Trustee").

W I T N E S S E T H:

WHEREAS,

A. BL Development Corp., a Minnesota corporation, Grand Casinos, Inc., a
Minnesota corporation, and certain of its subsidiaries have entered into that
certain Participation Agreement, dated as of May 10, 1996 (as amended, modified
or supplemented from time to time, the "Participation Agreement"), with Hancock
Bank, not in its individual capacity but solely as trustee (in such capacity,
the "Borrower"), the Agent, and the Co-Agents, the Lead Manager, the Arranger
and the Lenders named therein.

B. The Lenders contemplate that they will from time to time make loans to
be secured by preferred ship mortgages and other security interests in United
States flag vessels;

C. The Agent understands that the Vessel Trustee is an approved Vessel
Trustee within the meaning of the Chapter 313 of Title 46 of the United States
Code Annotated, as amended, qualified to hold preferred mortgages and other
security interests in vessels of the United States for the benefit of persons
such as the Agent on behalf of the Lenders;

D. The Agent wishes to agree with the Vessel Trustee that the preferred
mortgages and other security in vessels of the United States to be given to the
Agent as security for loans made by the Lenders either at the time of the
delivery of this Vessel Trust Agreement or subsequently shall be granted to and
held by the Vessel Trustee pursuant to the provisions of this Vessel Trust
Agreement; and

E. The Vessel Trustee is willing to accept such conveyance and to hold such
mortgages and security interests in accordance with the provisions of the Vessel
Trust Agreement, all as hereinafter set forth,

NOW, THEREFORE, in consideration of the mutual premises, and subject to the
terms and conditions provided herein, the parties hereto agree as follows:

ARTICLE I
DEFINITIONS

Section 1.01 For all purposes of the Vessel Trust Agreement, the following
terms shall have the meanings specified below:

"Agent" shall mean BA Leasing & Capital Corporation, as Agent and any
successor Agent.

"Agent Request" shall mean a request which is signed by the Agent addressed
to the Vessel Trustee to take certain action described therein with respect to
any Vessel Security Instrument named therein which has been accepted by the
Vessel Trustee as part of the Vessel Trust Estate.

"Enforcement" shall mean the exercise of any remedy provided for under a
Vessel Security Instrument or otherwise available by applicable law upon the
occurrence of an event of default under a Vessel Security Instrument.

"Lenders" shall mean the Lenders party to the Participation Agreement
and any successors thereto.

"Loan Agreement" shall mean the Loan Agreement, dated as of May 10, 1996,
among Hancock Bank, as Borrower, the Agent, and the Co-Agents, the Lead Manager,
the Arranger and the Lenders named therein, as such agreement is amended,
modified or supplemented from time to time.

"MARAD" shall mean the United States Maritime Administration, and any
predecessor or successor agency or the Secretary of Transportation of the United
States of America, acting by and through the Maritime Administrator, as the
context of the United States Maritime Laws may require.

"United States Maritime Laws" shall mean all provisions of United States
law restricting or pertaining to the operation of a Vessel or to the transfer to
persons not citizens of the United States of any interest of whatsoever nature
in, or of beneficial control of, Vessels, including, but not limited to, the
Shipping Act, 1916, as amended (46 U.S.C. 801 et seq.) and particularly
Sections 2, 9 and 37 thereof (46 U.S.C. 802, 808 and 835) and Chapter 313 Of
Title 46 of the United States Code Annotated, as amended and pertinent
regulations of the United States Coast Guard and MARAD.

"United States Vessel" shall mean any Vessel, which without violating the
United States Maritime Laws, cannot be owned by, mortgaged to, or operated by
any person who is not a citizen of the United States within the meaning of
Section 2 of the Shipping Act, 1916 as amended, qualified to engage in the trade
listed on such Vessel's Certificate of Documentation, without the approval of
MARAD.

"Vessel" shall mean, collectively, the following vessels: Diamond
Lakes I (Official No. 1029587), Diamond Lakes II (Official No. 1029588) and
Diamond Lakes III (Official No. 1029589), each of which is documented as a
vessel under the laws of the United States and as redocumented as a single
vessel whose number is yet to be determined.

"Vessel Loan" shall mean any loan made by the Lenders pursuant to the Loan
Agreement and secured by any interest in a United States Vessel.

"Vessel Security Instrument" shall refer to the Third Preferred Ship
Mortgage, dated as of May 10, 1996, made by BL Development Corp. in favor of the
Vessel Trustee on behalf of the Agent pursuant to the Ship Mortgage Act, 1920,
as amended, or other agreement or document creating any security interest or any
other interest in a United States Vessel.

"Vessel Trust Agreement" shall mean this Agreement as amended or
supplemented from time to time, together with all Exhibits thereto.

"Vessel Trust Estate" shall mean, and consist of, (i) Vessel Security
Instruments accepted by the Vessel Trustee pursuant to the provisions of Article
III hereof; and (ii) Vessels, funds and other property which the Vessel Trustee
acquires in its capacity as Vessel Trustee in connection with any Vessel
Security Instrument.

"Vessel Trust Receipt" shall mean a receipt, substantially in the form of
Exhibit A hereto, given by the Vessel Trustee to the Agent upon receipt by the
Vessel Trustee of any Vessel Security Instrument.

"Vessel Trustee" shall mean First Security Bank of Utah, N.A. and any
successor Vessel Trustee.

ARTICLE II
DECLARATION OF VESSEL TRUST

Section 2.01 The Vessel Trustee hereby declares that it will hold each item
of the Vessel Trust Estate when received upon the trusts hereinafter set forth,
subject to, and upon the terms and conditions of this Vessel Trust Agreement,
for the sole use and benefit of the Agent on behalf of the Lenders.

ARTICLE III

TRANSFER OF PROPERTY TO VESSEL TRUST
AND VESSEL TRUST RECEIPT

Section 3.01 The Vessel Trustee hereby accepts as a part of the Vessel
Trust Estate all of the Vessel Security Instruments, if any, referred to in
Exhibit B hereto, and the Vessel Trustee shall issue to the Agent Vessel Trust
Receipts therefor. If requested by the Agent, the Vessel Trustee shall, at any
time hereafter and from time to time, execute, as Vessel Trustee, any amendments
of or supplements to any such Vessel Security Instrument.

Section 3.02 The Agent may, from time to time, notify the Vessel Trustee,
in writing, of the Lenders' intent to advance a Vessel Loan. Such notice shall
identify all relevant parties and documents. Upon the advance of such Vessel
Loan, the Vessel Trustee shall accept the Vessel Security Instruments provided
for therein as part of the Vessel Trust Estate. If requested by the Agent, the
Vessel Trustee shall execute, as Vessel Trustee, such Vessel Security
Instruments or any amendments thereof or supplements thereto. The Vessel Trustee
shall issue to the Agent a Vessel Trust Receipt for any Vessel Security
Instrument accepted by it. When a Vessel Security Instrument secures a Note or
similar obligation, on Agent Request and on presentation to the Vessel Trustee
of such Note or obligation, the Vessel Trustee will place a notation on same for
identification in substantially the following form:

"The undersigned certifies for identification only that the foregoing
(Secured Promissory Note) is one of the (Notes) secured by the (Second Preferred
Mortgage) in favor of the undersigned mentioned in said (Note).

________________, AS VESSEL TRUSTEE

By "
Title:

and will keep a record of all such Notes as similar obligations on which it has
placed such a notation.

Section 3.03 Upon discharge of the indebtedness secured by the lien or
security interest provided for in any Vessel Security Instrument, the Agent
shall so notify the Vessel Trustee. On receipt of such notification or upon
receipt of an Agent Request, whether or not there has been a discharge of such
indebtedness, the Vessel Trustee shall execute and deliver to the Borrower such
satisfaction, discharge or release of mortgage or termination of security
interest as the Agent shall supply to the Vessel Trustee. Upon satisfaction,
discharge or release of the lien or security interest provided for in any Vessel
Security Instrument, the Agent shall return the Vessel Trust Receipt in
connection therewith to the Vessel Trustee for cancellation and thereafter the
Vessel Trustee shall return such Vessel Security Instrument to the Agent at
which time the Vessel Security Instrument shall be deemed withdrawn from the
Vessel Trust Estate.

ARTICLE IV
DUTIES OF THE VESSEL TRUSTEE

Section 4.01 (a) If an Event of Default shall exist under any Vessel
Security Instrument the Vessel Trustee shall only give notice of default or
acceleration thereunder and exercise such remedies provided in such Vessel
Security Agreement as so directed by an Agent Request. In the absence of such
directions, the Vessel Trustee shall refrain from taking any action, including
the giving of any notice.

(b) In the event that the Agent shall notify the Vessel Trustee that an
Event of Default under a Vessel Security Instrument has occurred, the Vessel
Trustee shall take such action with respect thereto as the Agent may request by
an Agent Request, but the Vessel Trustee shall not be required to take any
action not expressly set forth in such Agent Request or which in the opinion of
the Vessel Trustee's counsel is not necessary or appropriate to fulfill such
request and for which the Vessel Trustee is not properly indemnified by the
Agent. If, in accordance with the applicable United States Maritime Laws, the
approval of MARAD is required in order to carry out the request of the Agent,
the Vessel Trustee shall not be required to carry out such instructions unless
such approval shall have been obtained.

Section 4.02 The Vessel Trustee shall not have any duty or obligation to
manage, operate, control, use, sell, dispose of or otherwise deal with any
Vessel, any Vessel Security Instrument or any other part of the Vessel Trust
Estate or to otherwise take or refrain from taking any action under, or in
connection with, the Vessel Security Instruments, except as expressly provided
by the terms of this Vessel Trust Agreement or as expressly provided in an Agent
Request from the Agent received pursuant to the terms of Section 4.01 hereof.

Section 4.03 The Vessel Trustee's duties shall not include preparation of
loan documents or Vessel Security Instruments, administration of Vessel Loans,
collection of payments or giving of notices in connection therewith or other
accounting in conjunction with any Vessel Loan (except as may be required in its
capacity as holder of any Vessel Security Instrument, and then only upon written
request to do so from the Agent). The Vessel Trustee shall be responsible only
for providing such documents to the Agent or other parties to any Vessel
Security Instrument as are expressly provided for herein.

Section 4.04 (a) The Vessel Trustee shall use its best efforts to maintain
itself as an approved trustee by MARAD and properly comply with all regulations
of MARAD in connection therewith including, without limitation, making such
reports, annual filings and accountings as may be required. If the Vessel
Trustee learns of the occurrence of events which will or could, in its opinion,
result or has resulted in its disqualification, the Vessel Trustee shall
promptly so advise the Agent.

(b) In the event the Vessel Trustee shall no longer qualify as an approved
trustee, the sole obligations of the Vessel Trustee hereunder shall be to give
the notice set forth in the preceding sentence and, if requested by the Agent,
to resign under this Vessel Trust Agreement. The Vessel Trustee shall have no
liability to the Agent, any borrower, any shipowner, or any other person by
reason of its failure to remain qualified as an approved trustee, except that
the Vessel Trustee agrees to pay its own costs and expenses, including those of
its legal counsel, in connection with any resignation or any transfer of its
interests as Vessel Trustee under this Section 4.04.

Section 4.05 The Vessel Trustee shall furnish to the Agent promptly each
communication received by it or a copy thereof relating to any Vessel Security
Instrument, but shall have no duty to act upon or reply to any such
communication in the absence of an Agent Request.

Section 4.06 The Vessel Trustee shall keep custody of any cover notes,
insurance policies, brokers' opinion letters, or other documents delivered to it
from time to time as may be required by any Vessel Security Instrument and shall
promptly give copies thereof to the Agent. The Vessel Trustee shall have no duty
to advise the Agent of its failure to receive in a timely fashion any such
insurance document and the responsibility of advising the Vessel Trustee if any
insurance document does not comply with the requirements of the Vessel Security
Instrument to which it relates shall be solely that of the Agent.

ARTICLE V
CONCERNING THE VESSEL TRUSTEE

Section 5.01 The Vessel Trustee accepts the trust hereby created and agrees
to perform such trust but only upon the terms of this Vessel Trust Agreement.
The Vessel Trustee agrees that it shall not operate any Vessel under a Vessel
Security Instrument without the prior consent of MARAD in any case where such
consent is required by law and that it shall not sell any Vessel under a Vessel
Security Instrument to a person who is not a citizen of the United States within
the meaning of Section 2 of the Shipping Act, 1916, as amended, without the
prior written consent of MARAD in any case where such consent is required by
law. The Agent shall be responsible for furnishing the Vessel Trustee with
satisfactory evidence of MARAD approval or of citizenship in such cases. The
Vessel Trustee shall not be answerable or accountable to the Agent under any
circumstances, except for its own willful misconduct or gross negligence or
negligence in the handling of funds.

Section 5.02 Except in accordance with an Agent Request furnished pursuant
to Section 4.01 hereof, and without limiting the generality of Section 4.02
hereof, the Vessel Trustee shall have no duty (a) to see to any recording,
filing or depositing of any Vessel Security Instrument or amendment thereof, or
any Uniform Commercial Code financing statement, (b) to see to any insurance on
any Vessel or to effect or maintain any such insurance, (c) to see to the
payment or discharge of any tax, assessment, or other governmental charge or any
lien or encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Vessel Trust Estate, (d) to confirm or verify any
notices or reports of any borrower other than to furnish the Agent with a copy
of each notice or report furnished the Vessel Trustee by any borrower pursuant
to a Vessel Security Instrument or (e) to inspect any Vessel at any time or
ascertain or inquire as to the performance or observance of any borrower's
covenants under any Vessel Security Instrument or whether any default shall have
occurred thereunder.

Section 5.03 THE VESSEL TRUSTEE MAKES NO REPRESENTATION OR WARRANTY AS TO:
(a) THE VALIDITY, LEGALITY OR ENFORCEABILITY OF OR THE NATURE OF ANY INTEREST
CREATED BY, ANY VESSEL SECURITY INSTRUMENT, OR AS TO THE CORRECTNESS OF ANY
STATEMENT CONTAINED IN ANY THEREOF, OR AS TO ITS TITLE THERETO; (b) THE VALUE,
CONDITION OR FITNESS FOR USE OF ANY VESSEL, OR AS TO ITS TITLE THERETO, OR ANY
OTHER REPRESENTATION OR WARRANTY WITH RESPECT THERETO; OR (c) THE VALIDITY,
LEGALITY OR ENFORCEABILITY OF THIS VESSEL TRUST AGREEMENT, EXCEPT THAT THE
VESSEL TRUSTEE REPRESENTS AND WARRANTS THAT THIS VESSEL TRUST AGREEMENT HAS BEEN
EXECUTED BY AN OFFICER DULY AUTHORIZED TO EXECUTE IT ON ITS BEHALF.

Section 5.04 The Vessel Trustee shall use its best efforts to maintain
records showing the Vessel Security Instrument to which any money received by it
relate, but otherwise, no monies received by the Vessel Trustee hereunder need
be segregated in any manner except to the extent required by law, and the Vessel
Trustee shall not be liable for any interest thereon in the absence of a special
agreement therefor between it and the Agent in particular cases.

Section 5.05 The Vessel Trustee shall incur no liability to anyone in
acting upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond or other document or paper believed by
it to be genuine and believed by it to be signed by the proper party or parties.
The Vessel Trustee may accept a copy of a resolution of the board of directors
of any corporate party, certified by the secretary, an assistant secretary or
any other officer of said party, as duly adopted and in full force and effect,
as conclusive evidence that such resolution has been adopted by said board and
is in full force and effect. As to any fact or matter, the manner of
ascertainment of which is not specifically described herein, the Vessel Trustee
may for all purposes hereof rely on a certificate, signed by or on behalf of the
party executing such certificate, as to such fact or matter, and such
certificate shall constitute full protection to the Vessel Trustee for any
action taken or omitted to be taken by it in good faith in reliance thereof. In
the administration of the Vessel Trust Estate, the Vessel Trustee may perform
its powers and duties hereunder directly or through other agents or attorneys
and may, at the cost and expense of the Agent, seek advice of counsel (including
counsel for the Agent), accountants and other skilled persons to be selected and
employed by it, and the Vessel Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the actions, advice
or opinion of any such counsel, agents, accountants or other skilled persons.
The Vessel Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in accordance with an Agent Request or other
instruction of the Agent.

Section 5.06 In accepting the trust hereby created, the Vessel Trustee acts
solely as trustee hereunder and not in its individual capacity, and all persons,
other than the Agent, having any claim against the Vessel Trustee by reason of
the transactions contemplated hereby shall look only to the Vessel Trust Estate
for payment or satisfaction thereof.

Section 5.07 The Vessel Trustee shall be entitled to receive reasonable
compensation for its services hereunder, as provided below.

ARTICLE VI
INDEMNIFICATION OF THE VESSEL TRUSTEE BY THE AGENT

Section 6.01 Whether or not any of the transactions contemplated hereby
shall be consummated, the Agent does assume liability for, and indemnify,
protect, save and keep harmless the Vessel Trustee and its respective
successors, assigns, agents and servants, from and against any and all
liabilities, obligations, losses, damages, penalties, taxes (such term "taxes"
or the term "tax" as used in this Section 6.01 shall include, without
limitation, all taxes specifically related to this Vessel Trust Agreement and
the Vessel Trust Estate created hereby excluding, however, any income taxes on
fees or other compensation received by the Vessel Trustee in its capacity as
Vessel Trustee), claims, actions, suits, costs, expenses or disbursements
(including, without limitation, legal fees and expenses) of any kind and nature
whatsoever which may be imposed on or incurred by or asserted against the Vessel
Trustee, its respective successors, assigns, agents or servants, by whomsoever
asserted, in any way specifically relating to or arising out of this Vessel
Trust Agreement or a Vessel Security Instrument, or the performance or
enforcement of any of the terms thereof, or in any way relating to or arising
out of the manufacture, purchase, acceptance, rejection, ownership, mortgaging,
delivery, lease, possession, repossession, use, operation, condition, sale,
return or other disposition of any Vessel (including without limitation latent
and other defects, whether or not discoverable, and any claim for patent,
trademark or copyright infringement), or in any way relating to or arising out
of the administration of the Vessel Trust Estate, or to the action or inaction
of the Vessel Trustee hereunder, except only in the case of willful misconduct
or gross negligence or negligence in the handling of funds by the Vessel
Trustee. The Agent shall indemnify the Vessel Trustee against any costs assumed
by the Vessel Trustee or expenses made by the Vessel Trustee in connection with
any activity requested by the Agent in connection with any Vessel Security
Instrument and in particular with respect to any enforcement thereof, and the
Vessel Trustee shall not be obliged to act upon any Agent's request with respect
to such activity or enforcement without receiving such deposit in advance as the
Vessel Trustee may deem sufficient to cover reasonably anticipated expenses and
receiving a particular assurance of indemnity from the Agent in each particular
case. Nevertheless, the right of the Vessel Trustee to be indemnified shall not
depend on its timely request for funds or its failure to receive such specific
agreement of indemnity. The indemnities contained in this Section shall survive
the termination of this Vessel Trust Agreement or any particular Vessel Security
Instrument. If the Vessel Trustee shall be entitled to indemnification, the
Vessel Trustee shall have a lien on the Vessel Trust Estate prior to any
interest therein of the Agent.

Section 6.02 The indemnity provided in Section 6.01 shall not apply to any
costs, expenses or other liabilities incurred by the Vessel Trustee in the
preservation of its current status as an approved trustee by MARAD or any other
status which it holds at the date of entering into this Vessel Trust Agreement.

ARTICLE VII
TRANSFER OF THE AGENT'S INTEREST

Section 7.01 The Agent may require the Vessel Trustee to assign, convey or
transfer title to any part of the Vessel Trust Estate if such part shall not,
after such assignment, conveyance or transfer, be part of the Vessel Trust
Estate. In connection with any such assignment, conveyance or transfer, the
Vessel Trustee shall execute and deliver such instruments or do such acts as the
Agent may require, at the cost and expense of the Agent, in order to consummate
such assignment, conveyance or transfer. If, as a consequence of any such
assignment, conveyance or transfer, the Vessel Trustee is no longer acting as
trustee of property subject thereto, the Agent shall return to the Vessel
Trustee the relevant Vessel Trust Receipts for cancellation.

ARTICLE VIII
PROCEDURE FOR ENFORCEMENT

Section 8.01 Upon receipt of a notice provided for in Section 4.01 hereof,
the Vessel Trustee shall proceed to exercise such rights and remedies available
to it under the applicable Vessel Security Instruments as the Agent shall, from
time to time, request it to exercise. The Agent acknowledges that it cannot
require the Vessel Trustee to operate a Vessel or to sell any Vessel to a person
who is not a citizen of the United States within the meaning of Section 2 of the
Shipping Act, 1916, as amended, without the prior written consent of MARAD in
any case where such consent is required by law or to do any other act which is
not lawful for mortgagees of United States Vessels.

Section 8.02 If so requested by the Agent and at Agent's expense, the
Vessel Trustee shall, in connection with any Enforcement, employ attorneys,
experts, consultants, managers, security guards, surveyors, insurance brokers,
inspectors or any other persons or entities deemed desirable by the Agent.

Section 8.03 If so requested by the Agent, the Vessel Trustee shall file
such suits or actions or bring such proceedings before any court or agency in
connection with the enforcement of any Vessel Security Instruments, in its own
name in its capacity as Vessel Trustee, or shall join in any such suits, actions
or proceedings as co-plaintiff with the Agent, as the Agent deems necessary or
desirable. The conduct of such suits, actions or proceedings shall be in
accordance with an Agent Request from the Agent.

Section 8.04 If so requested by the Agent, the Vessel Trustee shall, in
connection with any Enforcement, provided the same be lawful, do any or all of
the following:

(a) Operate a Vessel under the applicable Vessel Security Instrument;

(b) Conduct a private sale of any Vessel or other collateral covered
by a Vessel Security Instrument and execute and deliver an appropriate bill
of sale transferring title to a Vessel or other collateral to a purchaser
thereof at such a private sale;

(c) Bid upon or purchase a Vessel at any judicial sale or other
auction, provided that the Agent shall have made funds available in advance
to the Vessel Trustee for this purpose; and

(d) Operate any Vessel acquired by it as a result of an Enforcement.

Section 8.05 Upon the acquisition of title to any Vessel, as contemplated
by Section 8.04 above, the Vessel Trustee shall have no obligation to protect,
conserve or deal with any such Vessel, except as expressly instructed by the
Agent in writing.

Section 8.06 The Agent shall pay all costs and expenses incurred in
connection with any Enforcement, and the Vessel Trustee may, in its discretion,
require that the Agent make funds available to the Vessel Trustee to satisfy any
such cost or expense prior to the time of incurring such cost or expense.

ARTICLE IX
PAYMENTS TO THE AGENT AS BENEFICIARY

Section 9.01 Provided that the Agent is not in default under this Vessel
Trust Agreement with respect to the payment of fees, compensation,
reimbursement, or other sums owed to the Vessel Trustee pursuant hereto, the
Vessel Trustee shall pay to the Agent, promptly upon receipt thereof, all sums
collected under any Vessel Security Instrument. Such payments shall be made in
immediately available funds and directed to the office of the Agent set forth
below in Section 14.03 or such other branch or department within the Agent as it
from time to time may direct.

Section 9.02 The Vessel Trustee shall furnish to the Agent monthly a
statement and accounting of any monies, or funds or other things of value (other
than Vessel Security Instruments) held by it as Vessel Trustee for the benefit
of the Agent. The form of such monthly report shall be as mutually agreed by the
Vessel Trustee and the Agent.

Section 9.03 In the event the Agent is in default in respect of any payment
to the Vessel Trustee of fees or any other sums owed by the Agent, the Vessel
Trustee shall be allowed to deduct any such fees or amounts from the Vessel
Trust Estate before being required to make any payment thereof to the Agent. In
the event any such deduction is made, the Vessel Trustee shall promptly furnish
the Agent a statement giving complete details of any such deduction and the
basis upon which such deduction is made.

ARTICLE X
COMPENSATION OF THE VESSEL TRUSTEE

Section 10.01 The Vessel Trustee shall receive as compensation for its
services hereunder such fees as have been agreed upon in a letter agreement,
dated April 18, 1996, addressed to the Agent by the Vessel Trustee.

Section 10.02 The compensation provided for in Section 10.01 above shall be
in addition to those costs, expenses and liabilities for which the Vessel
Trustee is entitled to be reimbursed or indemnified by the Agent as set forth in
this Vessel Trust Agreement.

ARTICLE XI
REMOVAL, DISQUALIFICATION OR RESIGNATION OF
THE VESSEL TRUSTEE; SUCCESSOR VESSEL TRUSTEES

Section 11.01 (a) The Agent may, in its discretion, remove the Vessel
Trustee at any time, without cause, by directing a written notice to the Vessel
Trustee of such removal. No removal shall be effective unless a qualified
successor trustee shall have been appointed on or prior to the effective date of
such removal.

(b) In the event that the Vessel Trustee becomes disqualified as an
approved trustee by MARAD, the Agent shall: (i) remove the Vessel Trustee
and appoint a qualified successor trustee or (ii) take the action provided
for in Section 11.03.

(c) The Vessel Trustee may resign at any time without cause by giving
at least sixty (60) days prior written notice to the Agent, such
resignation to be effective, subject to the provisions of the last sentence
of this paragraph, on the date specified in such notice. If the Agent shall
not have appointed a successor trustee within sixty (60) days after such
notice of resignation, the Vessel Trustee may apply at the Agent's expense
to any court of competent jurisdiction to appoint a qualified successor
trustee to act until such time, if any, as a successor trustee shall have
been appointed by the Agent. Any successor trustee so appointed by such
court shall immediately and without further act be superseded by any
successor trustee appointed by the Agent. In any event, however, no
resignation shall be effective until a qualified trustee shall have been
appointed by the Agent or a court.

Section 11.02 (a) A successor trustee shall be appointed by an instrument
in writing which shall state the effective date said successor trustee shall
become the Vessel Trustee hereunder, which document shall contain the executed
acknowledgement of acceptance by the successor trustee of the trust, the Vessel
Trust Estate and the duties of the Vessel Trustee as herein provided. The Vessel
Trustee, the successor trustee and the Agent shall execute, acknowledge and
deliver such assignments as may be required, in recordable form, and a
sufficient number of counterparts, whereby the successor trustee becomes vested
with all of the estates, properties, rights, remedies and trusts of its
predecessor to the trust hereunder and such instruments shall be duly recorded
forthwith in accordance with Chapter 313 of Title 46 of the United States Code
Annotated, as amended, or other laws or statutes governing any Vessel Security
Instruments included in the Vessel Trust Estate. The Vessel Trustee shall duly
assign, transfer, deliver and pay over to any successor trustee any monies and
other property or things of value subject to the trust hereunder and held by the
Vessel Trustee. Should any act or further instrument from the Vessel Trustee or
the Agent be required by any successor trustee for more fully and certainly
vesting in and confirming to such successor trustee such estates, properties,
rights, remedies and trusts, then on request any and all such acts and
instruments shall be done, made, executed, acknowledged and delivered by the
Agent and the Vessel Trustee.

(b) The Agent shall pay all recording fees, transfer taxes and similar
charges and attorneys' fees arising out of the transfer of the Vessel Trust
Estate from the Vessel Trustee to a successor trustee occasioned by the
Agent's removal of the Vessel Trustee. If the Agent's removal of the Vessel
Trustee is by reason of the Vessel Trustee's failure to remain qualified as
an approved trustee by MARAD, the provisions of Section 4.04 shall govern.

(c) Upon the removal or resignation of the Vessel Trustee, the Vessel
Trustee's compensation shall cease as of the effective date thereof, but
its rights of indemnification shall survive such removal or resignation.
Within thirty (30) days following the effective date of such removal or
resignation, the Vessel Trustee shall furnish to the Agent a complete
accounting of the Vessel Trust Estate and its compensation, costs and
expenses as of the date of removal or resignation.

(d) Any successor trustee, however appointed, shall be a trustee
approved by MARAD in accordance with the provisions of the Shipping Act,
1916, as amended, and Chapter 313 of Title 46 of the United States Code
Annotated, as amended.

(e) Any corporation into which the Vessel Trustee 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 Vessel
Trustee shall be a party, or any corporation to which substantially all the
business of the Vessel Trustee may be transferred, shall be the Vessel
Trustee under this Vessel Trust Agreement without any further act, provided
the successor corporation remains qualified as an approved trustee.

Section 11.03 If at any time: (a) events occur which will or could, in the
opinion of the Agent or the Vessel Trustee, result in the disqualification of
the Vessel Trustee; or (b) the Vessel Trustee becomes disqualified, the Vessel
Trustee or the Agent, or both of them, may petition the United States District
Court for the Southern District of New York for instructions to the Vessel
Trustee in order that the trust may be preserved to prevent the Agent or the
Vessel Trustee from falling in violation of law, including without limitation,
the United States Maritime Laws. To the extent that such may be required or
necessary, the parties hereto agree that said court has jurisdiction for this
purpose; however, if in the interest of justice, the said court determines to
transfer the matter to any other United States Court, the parties hereby agree
to the jurisdiction of such transferee Court. Any such petition shall be served
upon the other party hereto. The Vessel Trustee, the Agent and any successor
trustee hereby agree to abide by the instructions of the Court and to do all
acts, execute such agreements and instruments as may be required in connection
therewith and all other instruments and/or documents necessary to preserve the
Vessel Trust Estate for the benefit of the Agent, as beneficiary, under the
terms hereunder.

ARTICLE XII
TERMINATION AND DISCHARGE OF TRUST

Section 12.01 This trust is hereby declared to be irrevocable except that
this trust may be terminated by notice given by the Agent to the Vessel Trustee
at any time that: (a) there is no Vessel Security Instrument held as a part of
the Vessel Trust Estate and termination of the trust would not create an
interest in a United States Vessel on the part of the Agent or otherwise cause
the Agent to be in violation of law; or (b) the continuation of this trust is no
longer necessary in order for the Agent to comply with the United States
Maritime Laws. Within thirty (30) days following the date of such notice, the
Vessel Trustee shall furnish to the Agent a complete accounting of the Vessel
Trust Estate and its compensation, costs and expenses. This trust shall
terminate, cease and determine upon: (i) the assignment, conveyance and transfer
by the Vessel Trustee to the Agent of any property then comprising the Vessel
Trust Estate and (ii) the acceptance of such accounting of the Vessel Trustee by
the Agent.

ARTICLE XIII
AMENDMENT OF VESSEL TRUST AGREEMENT

Section 13.01 No term or provision of this Vessel Trust Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the Agent and the Vessel Trustee; and any waiver of the terms
hereof shall be effective only in the specific instance and for the specific
purpose given; provided, however, because of the irrevocable nature of this
trust and the reasons for which it is created the trust may not be amended to in
any way vest or revest in the Agent any interest in a United States Vessel
contrary to applicable law, and without limitation, particularly the United
States Maritime Laws.

ARTICLE XIV
MISCELLANEOUS

Section 14.01 The headings of the various Articles are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.

Section 14.02 Any assignment, sale, transfer or other conveyance by the
Vessel Trustee of the interest of the Vessel Trustee in any Vessel Security
Instrument or any Vessel made pursuant to this Vessel Trust Agreement or any
Vessel Security Instrument shall bind the Agent and shall be effective to
transfer or convey all right, title and interest of the Vessel Trustee and the
Agent therein. No purchaser or other grantee shall be required to inquire as to
the authorization, necessity, expediency or regularity of such assignment, sale,
transfer or conveyance or as to the application of any sale or other proceeds
with respect thereto by the Vessel Trustee.

Section 14.03 Unless otherwise expressly specified or permitted by the
terms hereof, all notices shall be in writing, delivered or mailed by regular
mail, postage prepaid, (i) if to the Vessel Trustee, addressed to the Vessel
Trustee at its offices at 79 South Main Street, Salt Lake City, Utah 84111,
Attention: Corporate Trust Services, and (ii) if to the Agent at its offices at
Four Embarcadero Center, Suite 1200, San Francisco, California 94122, Attention:
Sonia Delen, Assistant Vice President, or such other address as the Vessel
Trustee or the Agent may designate by notice to the other.

Section 14.04 Any provision of the Vessel Trust Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

Section 14.05 This Vessel Trust Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.

Section 14.06 All covenants and agreements contained herein shall be
binding upon, and inure to the benefit of, the Vessel Trustee and its successors
and assigns, and the Agent and its successors and assigns. Any request, notice,
direction, consent, waiver or other instrument or action by the Agent shall bind
its successors and assigns.

Section 14.07 Nothing expressed or implied herein is intended or shall be
construed to confer upon or give to any person or entity, other than the parties
hereto, their successors or assigns, any right, remedy or claim under or by
reason of the Vessel Trust Agreement or of any term, covenant or condition
hereof, and all of the terms, covenants, conditions, promises and agreements
contained herein shall be for the sole and exclusive benefit of the parties
hereto and their successors and assigns.

Section 14.08 This Vessel Trust Agreement, and all of the rights and
obligations of the parties hereunder, and their successors and assigns, shall be
governed by the laws of the State of New York; provided, however, that the
exercise of certain rights and remedies hereunder may require compliance with
the Mississippi Gaming Control Act and the regulations promulgated thereunder.

Section 14.09 No provision of this Vessel Trust Agreement or any action
taken pursuant hereto shall be considered to be a waiver of the preferred status
of any United States preferred ship mortgage transferred to the Vessel Trustee
hereunder or in derogation of any of the benefits, privileges, rights or
remedies provided for by the United States Maritime Laws or other applicable law
or any Vessel Security Instrument.

IN WITNESS WHEREOF, the parties hereto, have caused this Master Vessel
Trust Agreement to be executed by their respective officers thereunto duly
authorized as of the day and year first above written.

BA LEASING & CAPITAL CORPORATION,
as Agent

By:
Title: Vice President

FIRST SECURITY BANK OF UTAH,
National Association

By:
Title: Asst. Vice President

ACKNOWLEDGMENT

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

On the 16th day of May, 1996, before me personally came David F.
Scully, to me known, who being by me duly sworn, stated that he resides at
Burlingame, California; that he is Vice President of BA Leasing & Capital
Corporation, one of the corporations described in and which executed the above
instrument; and that he signed his name thereto pursuant to the By-laws of said
corporation.

/s/ Keith D. Arnold
----------------------------
Notary Public

ACKNOWLEDGMENT

STATE OF UTAH )
) ss:
COUNTY OF SALT LAKE CITY)

On the 16th day of May, 1996, before me personally came Greg A. Hawley, to
me known, who being by me duly sworn, stated that he resides at Salt Lake City,
Utah; that he is a Assistant Vice President of First Security Bank of Utah,
National Association , one of the corporations described in and which executed
the above instrument; and that he signed his name thereto pursuant to the
By-laws of said corporation.

/s/ Dianne Moreno
---------------------------
Notarty Public

EXHIBIT A

Vessel Trust Receipt

Date:_______________________ Number_________________

To:

From:

The Vessel Trustee hereby acknowledges the delivery to the Vessel
Trustee, as trustee under the Master Vessel Trust Agreement dated as of
___________, 19__ between ______________________ and ________________ as Vessel
Trustee, of the below listed Vessel Security Instrument(s):

- --------------------------------------------------------------

These Vessel Security Instrument(s) secure a Vessel Loan in
the original principal amount of $ , made by
to [name of borrower].

By_____________________________
Its:

EXHIBIT B

Vessel Security Instruments
Constituting the Initial
Part of the Vessel Trust Estate

[Intentionally Omitted]

[EXECUTION COPY]

GROUND LEASE

THIS GROUND LEASE (this "Ground Lease"), dated as of May 10, 1996, by and
between BL DEVELOPMENT CORP., a Minnesota corporation ("BL"), having an office
at 13705 First Avenue North; Plymouth, Minnesota 55441 ("Landlord"), and HANCOCK
BANK, not in its individual capacity but as Trustee, having an office at One
Hancock Plaza, Gulfport, Mississippi 39502 ("Tenant").

W I T N E S S E T H:

WHEREAS, Landlord is the fee simple owner of the land described on
Exhibit A attached hereto and made a part hereof (together with all
rights-of-way or use, easements, servitudes, licenses, tenements, driveways,
approaches, pavements, hereditaments, curbs and street front privileges and
appurtenances thereunto belonging (the "Land"));

WHEREAS, simultaneously with the execution and delivery of this Ground
Lease, Tenant is entering into that certain Lease Agreement and Deed of Trust,
dated as of the date hereof (the "Lease"), by and between Tenant, as lessor, and
Landlord, as lessee, covering, among other things, the Hotel to be constructed
on the Land;

NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the parties hereto agree as follows:

1. Land. Landlord, for and in consideration of the rents herein reserved
and of the agreements herein contained on the part of Tenant to be kept,
observed and performed, does by these presents, demise and lease to Tenant, and
Tenant hereby hires and leases from Landlord, the Land, subject to all Permitted
Liens (such capitalized term, and all other capitalized terms contained herein
and not otherwise defined, shall have the respective meanings ascribed thereto
in the Lease, whether or not such agreement is still in effect).

2. Term and Use. (a) The term of this Ground Lease shall commence on the
date hereof (hereinafter referred to as the "Commencement Date") and shall end
(unless extended in accordance with Section 2(b) below), on the date which is
the thirtieth (30th) anniversary after the Commencement Date (the "Initial
Term").

(b) The term of this Ground Lease shall thereafter be extended
automatically for twelve (12) additional periods of time, at the rent and upon
all of the other terms, conditions, covenants and provisions set forth herein,
and shall each be for a term of five (5) years; provided, however, that Tenant
may cancel this Ground Lease, effective as of the date of the expiration of the
Initial Term or as of the date of the expiration of any of the extended periods
of time above specified, by giving Landlord written notice of such cancellation
on or prior to a date one hundred and eighty (180) days before the effective
date of such cancellation. Such extensions shall be automatic without the
necessity of any new Ground Lease or other instruments or agreements or any
notice being executed or given. The "Term" of this Ground Lease shall mean the
Initial Term, and any renewal or extended Terms of this Ground Lease. The Land
may be used for any lawful purpose. Notwithstanding anything herein to the
contrary contained herein or in any Operative Document, from and after the date
the Lease terminates (other than as a result of a Lease Event of Default) or
expires, this Ground Lease may be terminated immediately by Tenant upon notice
to Landlord.

3. Rent. (a) The obligation of Tenant to pay rent ("Rent") reserved under
this Section 3 shall commence on the earlier of (i) that date in which Tenant
(or Tenant's permitted sublessees or assignees) commences business operations on
the Land and (ii) March 31, 1997 (such date being hereinafter referred to as the
"Rent Commencement Date"). During the period from the Commencement Date to the
Rent Commencement Date, no basic rent shall be payable hereunder. Tenant
covenants and agrees to pay Landlord for the Land, without abatement, offset or
deduction, and without previous demand therefor, basic rent at the rate per
annum equal to the sum of One Thousand Dollars, commencing on the Rent
Commencement Date and continuing for a period of one hundred twenty months (the
"First Rental Term"). Thereafter, Tenant shall pay basic rent under this Ground
Lease in an annual amount as determined by the Rent Appraisal (as defined in
Section 3(c) below). All basic rent per annum shall be payable by Tenant in
equal yearly installments on the last day of December of each and every calendar
year during the Term and shall be payable at the office of the Landlord first
above set forth or at such other place of which Landlord shall have given Tenant
written notice at least thirty (30) days in advance.

(b) All sums, other than basic rent, for which Tenant is obligated to
pay hereunder (whether to Landlord or otherwise) shall be additional rent.
As used herein the term "rent" shall be deemed to include the basic rent
and the additional rent.

(c) At least ninety (90) days and no more than one hundred twenty
(120) days prior to the expiration of the First Rental Term (and prior to
the expiration of the Initial Term and each extended Term), Landlord and
Tenant shall each select an MAI appraiser to perform an appraisal of the
Land to determine the fair market annual basic rent for the Land for
remainder of the Initial Term or the next extended Term, as the case may
be. Landlord and Tenant shall promptly notify one another of the name and
address of the MAI appraiser which they have selected. Such fair market
annual basic rent shall be based on the rental value of the Land (taking
into account that such rent shall be payable in equal installments on the
last day of December of each year) with no improvements thereon, except
that all utilities needed to utilize the Land for hotel use shall be deemed
to be available for use by Tenant. Within twenty days after such selection,
and in any event at least sixty days prior to the expiration of the First
Rental Term, the Initial Term or the extended Term, as the case may be, the
appraisers shall select a date for the simultaneous delivery of the
appraisals, and on such agreed upon date, each appraiser shall
simultaneously submit to the parties and to each other a written
determination of the fair market annual basic rent for the Land based only
on the criteria set forth above. If the appraisers are unable to agree upon
a date for the delivery of the appraisals, then such date shall be the date
which is sixty days prior to the expiration of the First Rental Term, the
Initial Term or the extended Term, as the case may be. If either Landlord
or Tenant fails to select an appraiser as provided herein, then the fair
market rent calculated by the sole appraiser who was selected shall be
binding upon Landlord and Tenant. If the results of the two appraisals do
not vary by more than five percent per annum, then the fair market annual
basic rent shall be deemed to be the mean average of the figures calculated
by the appraisers. If the results of the two appraisals vary by more than
five percent per annum, then the two appraisers shall jointly select a
third appraiser, who shall within ten days of such selection, choose either
the fair market annual basic rent calculated by the Landlord's appraiser or
by the Tenant's appraiser, based upon the professional analysis of the
third appraiser as to which of the two appraisals has most accurately
calculated the fair market basic rent for the Land applying only the
criteria set forth above. Such conclusion shall be binding on both Landlord
and Tenant. If the two appraisers are unable to select a third appraiser
within ten days after submission of their appraisals, such selection shall
be made by the American Arbitration Association. Annual basic rent shall be
modified based on the conclusions of the appraisals as set forth above. A
rent appraisal shall be performed in the manner described in this Section
for the remainder of the Initial Term following the First Rental Term and
for each extended Term of this Ground Lease, and annual basic rent
determined by such Rent Appraisal shall become the annual basic rent to be
paid by Tenant during such period as applicable.

4. Mechanic's Lien. If any mechanic's, materialman's or other similar lien
shall at any time be filed against the Land on account of any work, labor or
services performed or claimed to have been performed, or on account of any
materials furnished or claimed to have been furnished, for or at the direction
of Tenant or anyone holding or occupying the Land through or under Tenant,
Tenant shall, without cost or expenses to Landlord, with all due diligence,
cause the same to be (1) discharged of record by payment, bond, order of a court
of competent jurisdiction or otherwise; or (2) contested, in which event any
judgment or other process issued in such contest shall be paid or discharged
before execution thereof; or (3) provide Landlord with an indemnity therefor.

5. Real Estate Taxes. During the term of this Ground Lease, Tenant will pay
all real estate taxes and assessments, both general and special, which shall
become due and payable on the Land. If any such tax or assessment may, at the
option of the taxpayer, be paid in installments, Tenant may exercise the option
to pay the same in installments. If Tenant shall elect to pay any such tax or
assessment on an installment basis, then Tenant will pay only those installments
which become due and payable during the term of this Ground Lease. All real
estate taxes and assessments that shall be assessed with respect to the fiscal
tax years falling wholly or partially within the first and last calendar years
of the term of this Ground Lease shall be apportioned pro rata between Landlord
and Tenant on a per diem basis in accordance with the respective numbers of days
in said fiscal tax years during which this Ground Lease is in effect.

Tenant, at its expense, shall have the right to contest or review by
legal, administrative or other proceedings the amount or validity of any such
tax or assessment imposed against the Land. Nothing contained herein shall imply
any right on the part of Tenant to postpone such payment unless such proceedings
or security given shall stay the collection thereof and the sale of the Land to
satisfy same. Landlord, at Tenant's request, shall join in any such proceedings,
but Landlord shall not be liable for any expenses in connection therewith. The
proceedings referred to herein shall include, but shall not be limited to,
appropriate appeals from any judgments, decrees or orders made in any such
proceedings. In the event of any reduction, cancellation or discharge of such
taxes or assessments as a result of such proceedings, and if Tenant has not
already paid same, then Tenant will do so forthwith as they are finally levied,
assessed or imposed. If there shall be any refund payable by the governmental
authority with respect thereto, Tenant shall be entitled to receive and retain
same.

Nothing contained herein shall obligate Tenant to pay any income,
inheritance, estate, gift, succession, sales, use, revenue or transfer tax (or
any substitution therefor) of, or levied or assessed against Landlord; nor any
other tax, assessment, charge or levy (or any substitution therefor) against
Landlord with respect to or because of the rent and other income derived by
Landlord under this Ground Lease; nor shall Tenant be deemed obligated to pay
any personal property, corporation, franchise, capital stock, payroll, excise,
privilege or any other tax of similar nature (or any substitution therefor)
which may be levied or assessed against Landlord.

6. Utilities. Tenant will pay all charges for sewer usage or
rental, refuse removal, and utilities, including gas, water and
electricity, consumed on the Land during the term of this Ground Lease as
same shall become due and payable.

7. Insurance.

(a) Tenant shall, at its sole cost and expense, at all times during
the term hereof maintain and/or cause to be maintained, in full force and
effect, comprehensive general liability insurance covering Tenant's
operations at the Land, including Landlord as an additional insured. Tenant
shall deliver to Landlord a certificate from each insurance carrier as to
each such insurance policy.

(b) Landlord agrees that Tenant or a subtenant of Tenant who is
required to maintain the insurance required under this Section 7 may comply
with this Section in whole or in part by means of a self-insurance program.

(c) Tenant, or its designee, shall have the sole and exclusive right
(without the participation of Landlord) to adjust and settle any and all
claims under insurance policies obtained by Tenant or those claiming by or
through Tenant in connection with or relating to the Land to receive the
proceeds of any such claims.

8. Indemnity.

(a) Tenant shall indemnify, defend and hold harmless Landlord from and
against any and all claims arising from Tenant's use of the Land, or from
the conduct of Tenant's business, or from any activity, work or things done
by Tenant (or anyone acting by through or under Tenant, other than
Landlord, or anyone acting by, through or under Landlord) in or about the
Land or elsewhere, and shall further indemnify, defend and hold harmless
Landlord from and against any and all claims arising from any breach or
default in the performance of any obligation on Tenant's part to be
performed under the terms of this Ground Lease. Notwithstanding anything
herein to the contrary, Landlord shall be liable for its own negligence and
willful misconduct, and for any act or omission of Landlord, or anyone
acting by, through or under Landlord, and shall not be entitled to any
indemnity in connection with any of the foregoing.

9. Compliance with Laws and Ordinances. Tenant, at its expense, will comply
with all federal, state, county and city laws, ordinances and regulations of any
duly constituted authority affecting the Land. Tenant, at its expense, shall
have the right to contest or review by legal, administrative or other
proceedings the validity of any such law, ordinance and regulation, or the
application thereof. During such proceedings, compliance with any such law,
ordinance or regulation may be deferred by Tenant. Landlord shall join in such
proceedings if necessary to do so in order to prosecute such proceedings
properly, but Landlord shall not be liable for any expenses in connection
therewith. The proceedings referred to herein shall include, but shall not be
limited to, appropriate appeals from any judgments, decrees or orders made in
any such proceedings.

10. Landlord's Access to Land. Landlord will have access to the Land, at
its own risk and expense, at any and all reasonable times during the term of
this Ground Lease for the purpose of examining and inspecting same upon
reasonable prior notice.

11. Assignment and Subletting. Tenant, without the consent of Landlord, at
any time and from time to time during the term of this Ground Lease, shall have
the right to assign this Ground Lease, and its rights hereunder, and to sublet
all or any part of the Land or any portion thereof. In the event this Ground
Lease shall be assigned by Tenant, then all liabilities and obligations on the
part of Tenant accruing after such assignment shall terminate, provided that any
such assignee shall execute an instrument in writing assuming all of those
liabilities and obligations imposed upon Tenant hereunder which accrue after the
effective date of such assignment and deliver the same to Landlord. Nothing
contained herein, however, shall be construed to release Tenant from any
liability or obligation which accrued prior to the effective date of such
assignment.

12. Performance by Subtenants and Occupancy Tenants. Landlord shall accept
performance by any subtenant or occupant of any of the terms and provisions of
this Ground Lease required to be performed by Tenant with the same force and
effect as though performed by Tenant.

13. Casualty and Condemnation. If the Hotel, or any part thereof, suffers a
Casualty, Tenant's obligations under this Ground Lease shall not be affected.
Following any Casualty on the Land, Tenant shall have no obligation to restore,
repair or rebuild the Hotel, or any part thereof, on the Land.

As used herein, a "Condemnation" means taking of title to the Land
resulting in the loss or use of possession of a material portion of the Land as
reasonably determined in good faith by the Tenant.

In the event of a Condemnation, the entire award, or the aggregate of
any separate awards, shall be during the Lease Term distributed in accordance
with the Lease and thereafter shall be apportioned as follows:

A. There shall be first paid any and all costs, fees and expenses
reasonably incurred by Landlord and Tenant in connection with the
collection thereof;

B. There shall be next paid to Landlord an amount as shall represent
compensation for the value of the Land (excluding the Hotel) as encumbered
by the Ground Lease determined in accordance with the fair market appraisal
terms and procedures set forth in Section 22 hereof;

C. Any balance of the award shall be paid to Tenant (and if the Lease
is in effect, the same shall be distributed in accordance with the Lease);

and this Ground Lease shall terminate on the following date: (x) if the Lease is
in effect on the date of the Condemnation, the date the Lease terminates with
respect to the Leased Property pursuant to Section 10.2 of the Lease and (y) in
all other cases on the date of such Condemnation, and in either case the Rent
and other charges shall be apportioned and paid to the date of such
Condemnation. The provisions of this Section as to the apportionment of any such
awards shall survive such termination.

In the event of a condemnation or exercise of eminent domain which is
not a Condemnation, there shall be no abatement of rent and the entire award, or
the aggregate of the separate awards to Landlord and Tenant, as the case may be
(less costs, fees and expenses reasonably incurred by Landlord and Tenant in
connection with the collection thereof) shall be paid to Tenant.

14. Ground Lease Events of Default.

(a) Tenant agrees that the following shall be considered a "Ground
Lease Event of Default": Tenant shall default in any of the covenants or
agreements herein contained to be kept, observed and performed by Tenant
(other than as a result of, or in connection with, a default by Tenant
under the Lease) and such default shall continue for thirty (30) days after
notice thereof in writing to Tenant; provided, however, that if such
default is of a nature that it cannot be reasonably cured within such
30-day period, then Tenant shall have such time as is reasonably required
to cure such default.

(b) Upon the occurrence of any Ground Lease Event of Default, it shall
be lawful for Landlord, at its election, to declare the term ended and
either with or without process of law, to re-enter and to expel, remove and
put out, Tenant and re-enter the Land again to repossess and enjoy the
same, without such re-entry and repossession working a discharge of the
rents unpaid and the covenants unperformed by Tenant prior to such
re-entry.

(c) The foregoing provisions for the termination of this Ground Lease
for any default in any of its covenants shall not operate to exclude or
suspend any other remedy of Landlord for breach of any of said covenants or
for the recovery of unpaid accrued rent, but Tenant shall not be liable for
any rent or other obligations which would have accrued under this Ground
Lease after the date of such termination had the Ground Lease not been
terminated. In the event any action is commenced for non-performance of any
provisions of this Ground Lease, Tenant agrees to pay Landlord's reasonable
attorneys' fees.

(d) Subject to the limitations set forth herein, no remedy herein
reserved to Landlord shall be considered exclusive of any other remedy, but
the same shall be cumulative and shall be in addition to every other remedy
existing at law or in equity, and every remedy given by this Ground Lease
to Landlord may be exercised from time to time and as often as occasion may
arise.

(e) Notwithstanding anything to the contrary contained herein, the
Landlord's rights and remedies and Tenant's obligations and liabilities are
subject to Section 22 of this Ground Lease.

(f) Notwithstanding anything in this Ground Lease to the contrary,
prior to the date ("Transition Date") that either (i) BL has acquired the
Tenant's interest in this Ground Lease or (ii) a third party has acquired
the Tenant's interest in this Ground Lease pursuant to Article V of the
Lease:

(A) Landlord will look solely to BL, as lessee under the Lease,
directly for the performance of all Tenant's obligations hereunder,
including, without limitation, Tenant's indemnification obligations
hereunder; provided, however, that in the event of any conflict
between any obligation of Tenant under this Ground Lease and the
obligation of BL as the lessee under the Lease, nothing herein is
intended to amend or limit BL's obligations as the lessee under the
Lease;

(B) Tenant shall have no liability to Landlord for any
obligations of Tenant arising or accruing hereunder, including,
without limitation, for any indemnity obligation hereunder;

(C) Landlord shall not have any right to declare a "Ground Lease
Event of Default" hereunder or exercise any right or remedy against
Tenant in respect thereof nor shall any "Ground Lease Event of
Default" be deemed to exist hereunder; to the extent that any of
Tenant's obligations hereunder are not performed by BL or Tenant when
and as required hereby, then so far as Tenant is concerned the
Tenant's obligation to perform the same for the benefit of the
Landlord shall be deemed waived; and

(D) Tenant's right to quiet and peaceful enjoyment of the Land
shall not be disturbed.

15. Tenant's Right to Mortgage.

Tenant may at any time and from time to time (and as many times as it
desires) mortgage, hypothecate or pledge this Ground Lease and the leasehold
estate created hereby and the interest of the Tenant in and to this Ground
Lease, together with Tenant's right, title and interest in any and all subleases
and in and to all rents due or to become due thereunder (herein called a
"Leasehold Mortgage"; and the holder of any such Leasehold Mortgage, whether or
not the same is recorded of record, is herein called a "Leasehold Mortgagee").

Landlord and Tenant agree that so long as any such Leasehold Mortgage
exists:

A. Landlord will simultaneously mail to any Leasehold Mortgagee a
copy of any notice given by Landlord to Tenant at the address given by
such Leasehold Mortgagee to Landlord for the receipt of such notice.

B. Landlord and Tenant acknowledge that the defaults or other
events described in Section 14 may be classified as (i) "Curable
Defaults" and (ii) "Non-Curable Defaults". The Non-Curable Defaults
are any defaults which are by their nature not susceptible of being
cured by a third person such as the Leasehold Mortgagee; and the
Curable Defaults are all other defaults.

C. If a Curable Default occurs and if, prior to the expiration of
the applicable grace period provided for in Section 14, the Leasehold
Mortgagee shall give to Landlord written notice that it intends to
undertake a curing of all Curable Defaults and within such grace
period the Leasehold Mortgagee commences upon a curing and thereafter
pursues to conclusion the curing of all Curable Defaults continuously
and diligently in good faith, then Landlord will not take action to
effect a termination of this Ground Lease or to re-enter or take
possession of the Land as a consequence of such Curable Default.
However, if (i) a Curable Default is of such a nature that the curing
thereof cannot be effected by the Leasehold Mortgagee until it shall
have obtained possession of the Land and (ii) prior to the effective
date of a termination of this Ground Lease by Landlord or Landlord's
re-entering or taking possession of the Land pursuant to the
provisions of Section 14, the Leasehold Mortgagee shall give to
Landlord written notice that it intends to institute foreclosure or
other legal proceedings or to exercise any of its remedies under the
Leasehold Mortgage concerned in order to gain possession of the Land
and within such grace period takes action to institute such remedies,
then Landlord will not take any action to effect a termination of this
Ground Lease or to re-enter or take possession of the Land as a
consequence of such Curable Default so long as such Leasehold
Mortgagee shall continue to prosecute its remedies under the Leasehold
Mortgage (except during any such time it may be stayed or otherwise
legally prevented from doing so) and cure all other Curable Defaults
(if any) which may occur from time to time and which are susceptible
of being cured by the Leasehold Mortgagee without its obtaining
possession of the Land and such Leasehold Mortgagee shall upon taking
possession of the Land cure such Curable Defaults within the period
reasonably required to cure the same.

D. If a Non-Curable Default occurs and (i) the Leasehold
Mortgagee shall then be in the process of curing all then existing
Curable Defaults pursuant to the provisions of subsection (C) above
and (ii) the Leasehold Mortgagee shall give to Landlord written notice
that it intends to institute foreclosure or other legal proceedings or
to exercise any of its remedies under the Leasehold Mortgage concerned
in order to gain possession of the Land, then Landlord will not take
any action to effect a termination of this Ground Lease or to re-enter
or take possession of the Land as a consequence of such Non-Curable
Default so long as such Leasehold Mortgagee shall continue diligently
to prosecute its remedies under the Leasehold Mortgage (except during
any such time it may be stayed or otherwise legally prevented from
doing so) and cure all Curable Defaults (if any) which may occur from
time to time and which are susceptible of being cured by the Leasehold
Mortgagee without its obtaining possession of the Land and such
Leasehold Mortgagee shall upon taking possession of the Land cure such
Curable Defaults within the period reasonably required to cure the
same.

E. In the event a Leasehold Mortgagee or its nominee designated
for that purpose acquires the leasehold estate pursuant to any
proceedings for foreclosure of such Leasehold Mortgage, or by a
voluntary assignment or transfer of this Ground Lease and the
leasehold estate in lieu of foreclosure or otherwise, the Leasehold
Mortgagee or its nominee or assignee as aforesaid shall be deemed an
assignee of all the rights of Tenant under this Ground Lease.

F. If this Ground Lease shall be rejected or disaffirmed pursuant
to any bankruptcy law or other law affecting creditors' rights or if
this Ground Lease is terminated for any other reason whatsoever,
Landlord will enter into a new lease of the Land with the Leasehold
Mortgagee or its nominee not less than ten (10) nor more than thirty
(30) days after the request of the Leasehold Mortgagee referred to
below, for the remainder of the term of this Ground Lease effective as
of the date of such rejection or disaffirmance or termination, upon
all the terms and provisions contained in this Ground Lease; provided
that (i) the Leasehold Mortgagee makes a written request to Landlord
for such new Ground Lease within ninety (90) days after the effective
date of such rejection or disaffirmance or termination, as the case
may be, and such written request is accompanied by a copy of such new
lease, duly executed and acknowledged by the Leasehold Mortgagee or
its nominee and (ii) upon taking possession of the Land the Leasehold
Mortgagee cures any outstanding Curable Defaults within the period
reasonably required to cure the same. Any new lease made pursuant to
this paragraph shall have the same priority with respect to other
interests in the Land as this Ground Lease. The provisions of this
paragraph shall survive the rejection or disaffirmance or termination
of this Ground Lease and shall continue in full force and effect
thereafter to the same extent as if this paragraph were a separate and
independent contract made by Landlord and the Leasehold Mortgagee. G.
So long as a Leasehold Mortgage is in effect (i) Landlord will not
accept a voluntary surrender of this Ground Lease and (ii) the Ground
Lease shall not be modified in any material respect without, in each
case, the prior written consent of the Leasehold Mortgagee. Any
violation of this paragraph shall be void.

The provisions of this Section 15 are for the benefit of any Leasehold
Mortgagee and may be relied upon and shall be enforceable by any Leasehold
Mortgagee. No Leasehold Mortgagee shall be liable upon the covenants, agreements
or obligations of Tenant contained in this Ground Lease, except as expressly
provided herein.

Landlord shall execute any instruments any such Leasehold Mortgagee
may reasonably request or require from Landlord, with respect to the provisions
of this Section 15.

16. Right to Mortgage or Sell. Landlord shall not have the right to place a
mortgage or other Lien on the Land or Landlord's interest in this Ground Lease
at any time during the term of this Ground Lease, except for Liens expressly
permitted pursuant to the terms of the Operative Documents. Landlord shall not
have the right to sell the Land, or any interest therein, so long as the Lease
is in effect.

17. Landlord's and Tenant's Certificates. Landlord and Tenant, on written
request from each other, shall execute and deliver to the other party, or any
Leasehold Mortgagee if so requested, without charge, a certificate certifying
whether or not this Ground Lease is in full force and effect, and whether it has
been modified (or if there have been modifications, stating them), and whether
or not the party executing the certificate knows of any default, breach or
violation by the other party under any of the terms of this Ground Lease, and
such other matters as may reasonably be requested.

18. Quiet Enjoyment. Landlord agrees that, so long as no Ground Lease Event
of Default exists under the terms of this Ground Lease after the Transition
Date, Tenant's quiet and peaceful enjoyment of the Land shall not be disturbed
or interfered with by Landlord, or by any person or party claiming by, through
or under Landlord.

19. Recording of Ground Lease. Upon the execution hereof, Landlord
and Tenant shall record this Ground Lease in the Chancery Clerk's Office of
Tunica County, Mississippi.

20. Inability to Perform. Anything in this Ground Lease to the contrary
notwithstanding, Tenant's inability to fulfill any of Tenant's agreements and
undertakings under this Ground Lease shall not be considered Ground Lease Events
of Default if Tenant is prevented or delayed from so doing by reason of strikes,
labor troubles, lockouts, riots, civil commotions, acts of God, governmental
restrictions, unavailability of services or materials or any other cause beyond
the control of Tenant.

21. Notices. All notices to or demands upon Landlord or Tenant desired or
required to be given under the provisions hereof shall be in writing and shall
be deemed to have been duly given upon the earlier of actual receipt or, if
mailed, three days after being deposited in the United States mails, registered
or certified, return receipt requested, postage prepaid and addressed as
follows:

If to Landlord: BL Development Corp.
13705 First Avenue North
Plymouth, Minnesota 55441
Attention: Chief Financial Officer

with a copy to:
Maslon Edelman Borman & Brand PLLP
3300 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402-4140
Attention: Russell L. Lederman, Esq.

If to Tenant: Hancock Bank
One Hancock Plaza
Gulfport, Mississippi 39502
Attention: Watson Butts

with a copy to:
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: Barry K. Gassman, Esq.

or at such other address within the continental United States as any party may
notify the other party as herein specified.

22. Liability of Tenant. Anything in this Ground Lease to the contrary
notwithstanding, Landlord acknowledges and agrees that each of the covenants,
undertakings and agreements herein made on the part of Tenant, while in form
purporting to be covenants, undertakings, and agreements of Tenant, are,
nevertheless, made and intended not as personal covenants, undertakings and
agreements by Tenant, or for the purpose of binding Tenant or its assets
personally, but are made and intended for the purpose of binding only Tenant's
interest in the Land; and that no personal liability or personal responsibility
is assumed by, nor shall at any time be asserted or enforceable against Tenant,
any Agent or any Lender (each as defined in the Lease) or any past, present or
future stockholder, subscriber of capital stock, officer, director, incorporator
or partner of Tenant, any Agent or any Lender or any successors or assigns of
any of them whether by virtue of any constitutional provision, statute or rule
of law or by enforcement of any liability or claim under or in connection with
this Ground Lease from any source other than the Tenant's interest in the Land,
it being agreed that all such personal liability is hereby waived.

23. Miscellaneous. (a) All agreements, terms, provisions and
conditions in this Ground Lease shall extend and inure to the benefit of,
and be binding upon, the successors and assigns of the parties hereto.

(b) The captions of this Ground Lease are for convenience only, and
are not to be construed as a part of this Ground Lease, and shall not be
construed as defining or limiting in any way the scope or intent of the
provisions hereof.

(c) If any term or provision of this Ground Lease shall be to any
extent held invalid or unenforceable, the remaining terms and provisions of
this Ground Lease shall not be affected thereby, but each term and
provision of this Ground Lease shall be valid and be enforced to the
fullest extent permitted by law.

(d) This Ground Lease has been delivered in, and shall in all respects
be construed and enforced in accordance with, the laws of the State of New
York, without regard to the conflicts of laws principles of such state,
except to the extent that the provisions for the creation, perfection and
enforcement of the liens and security interests created pursuant hereto
shall be governed and construed in accordance with the laws of the state
where the Land is located, including the Gaming Laws.

(e) This Ground Lease represents the entire agreement between the
parties hereto and supersedes all prior negotiations, representations or
agreements, either written or oral, including but not limited to any
letters of intent.

(f) This Ground Lease may be executed in multiple counterparts each of
which taken together shall constitute one and the same instrument.

(g) Nothing herein contained shall be deemed or constructed by the
parties hereto, nor by any third party, as creating the relationship of
principal and agent or of partnership or of joint venture between the
parties hereto, it being understood and agreed that neither the method of
computation of rent, nor any other provision contained herein, nor any acts
of the parties hereto, shall be deemed to create any relationship other
than Landlord and Tenant.

(h) Any waiver given by either party with respect to performance by
the other party of any provision of this Ground Lease shall be construed
only as a waiver of the particular provision in question and only then with
respect to the particular failure to comply, and such waiver shall not be
construed as a waiver of any separate failure to comply or of any other
provisions of this Ground Lease.

(i) In the event Tenant remains in possession of the Land after
expiration of this Ground Lease without the execution of a new lease, it
shall be deemed to be occupying the Land as a tenant at sufferance at a
monthly rental equal to 125% of the then current monthly rental, and
otherwise subject to all the conditions, provisions and obligations of this
Ground Lease insofar as the same are applicable to a tenancy at sufferance.

(j) Whenever herein the singular number is used, the same shall
include the plural and words of any gender shall include each other gender.

(k) The individuals executing this instrument on behalf of Landlord
and Tenant, respectively, represent that each has been duly authorized so
to do by appropriate action taken by Landlord or Tenant, as the case may
be.

24. Subordination of Fee Interest. Landlord hereby acknowledges and agrees
that the fee ownership interest of the Landlord in the Land shall be subject and
subordinate to all right, title and interest of the Tenant under this Ground
Lease and the Lease in and to the Land, and to all right, title and interest of
any Leasehold Mortgagee in any of the foregoing, and the Landlord shall from
time to time execute such documents and instruments as requested by the Tenant
to evidence such subordination.

25. No Merger. Neither the leasehold interest in the Land and the fee
interest of Tenant in the Hotel nor the fee interest of the Landlord in the Land
and the leasehold interest of the Landlord in the Hotel shall in any way merge,
it being the express intention of the parties that such separate interests in
the Land and the Hotel shall remain separate and shall not merge during the term
of this Ground Lease.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Ground Lease as of the date first above written with actual execution on the
dates set forth in the respective acknowledgements below.

LANDLORD:

BL DEVELOPMENT CORP.

By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer
Address: 13705 First Avenue North
Plymouth, MN 55441-5451
Telephone No.: (612) 449-7030
Telecopier No.:(612) 449-7022

TENANT:

HANCOCK BANK,
not individually but as
Trustee as aforesaid

By: /s/ C. H. GIBBONS
Name: C. H. Gibbons
Title: Vice President & Trust Officer
Address:2510 14th Street
Gulfport, MS 39501

Telephone No.: (601) 868-4400
Telecopier No.: (601) 868-4333

Landlord

CORPORATE ACKNOWLEDGMENT

STATE OF MINNESOTA)
) ss:
COUNTY OF HENNEPIN)

Personally appeared before me, the undersigned authority in and for the
said county and state, on this 16th day of May, 1996, within my jurisdiction,
the within named Timothy J. Cope, duly identified before me, who acknowledged
that he is the Chief Financial Officer of BL Development Corp., a Minnesota
corporation, and that for and on behalf of said corporation, and as its act and
deed, he executed the above and foregoing instrument, after first having been
duly authorized by said corporation so to do.

/s/ Patricia L. Buffham
------------------------------
NOTARY PUBLIC

My Commission Expires:

- -------------------------
(Affix official seal)

Tenant

CORPORATE ACKNOWLEDGMENT

STATE OF MISSISSIPPI)
) ss:
COUNTY OF HARRISON )

Personally appeared before me, the undersigned authority in and for the
said county and state, on this 13th day of May, 1996, within my jurisdiction,
the within named C. H. Gibbons, duly identified before me, who acknowledged that
__he is Vice President & Trust Officer, of Hancock Bank, a state banking
association, and that for and on behalf of said bank, and as its act and deed in
the representative capacity therein stated, __he executed the above and
foregoing instrument, after first having been duly authorized by said bank so to
do.

------------------------------
NOTARY PUBLIC

My Commission Expires:
My Commission Expires Dec. 26, 1998

- -------------------------
(Affix official seal)

This Instrument Prepared by and when recorded return to:

Mayer, Brown & Platt
1675 Broadway, Suite 1900
New York, New York 10019
Attn: Barry K. Gassman, Esq.

INDEXING INSTRUCTIONS:

This instrument affects real property situated, lying and being in the County of
Tunica, State of Mississippi, known as follows:

Section: 5, Northwest 1/4 and Southwest 1/4
Township 3 South
Range 10 West

EXHIBIT A

PROPERTY DESCRIPTION
[MISSING TEXT]

BOARD OF LEVEE COMMISSIONERS FOR THE
YAZOO-MISSISSIPPI DELTA
140 Delta Avenue
P.O. Drawer 160
Clarksdale, Mississippi

May 10, 1996

LETTER AGREEMENT

BA Leasing & Capital Corporation, as Agent
Four Embarcadero Center
Suite 1200
San Francisco, California 94111

Re: Lease and Deed of Trust (the "Capital Lease"), dated as of May 10, 1996
between Hancock Bank, not in its individual capacity but as trustee, as
lessor (the "Lessor") and BL Development Corp., as lessee (BL
Development"), with respect to the personalty described on Exhibit B to
this Letter Agreement ("Letter Agreement")

Ladies and Gentlemen:

The Board of Levee Commissioners for the Yazoo-Mississippi Delta (the "Levee
Board") and BL Development Corp. ("BL Development") have entered into that
certain Port Facility Lease Agreement dated December 29, 1993 ("Lease
Agreement"), as amended by that certain First Amendment to Lease between the
Levee Board and BL Development (as amended, the "Port Facility Lease"), whereby
the Levee Board leased to BL Development the premises (the "Premises") as
described in the Lease Agreement. The Lessor has entered into the Capital Lease
with BL Development covering, among other things, the Gaming Equipment. The
lenders listed on Exhibit C to this Letter Agreement (the "Lenders") have agreed
to provide financing (the "Credit Facility") to the Lessor and the Lessor, in
turn, pursuant to that certain Trust Agreement of even date, has agreed with BL
Development to make advances to it in an amount not to exceed $120,000,000.00
which BL Development will apply to finance the acquisition of the Gaming
Equipment, the Equipment and the Inventory (as such terms are hereinafter
defined) and the construction of a 600 room hotel on the land adjacent to the
Premises. To secure the Credit Facility, BA Leasing & Capital Corporation, as
the agent (the "Agent"), on behalf of the Lenders will have the benefit of
certain security interests granted by the Lessor on all of the Lessor's right,
title and interest in and to the personalty (as hereinafter defined).

In connection with the Credit Facility, the Agent has requested and the Levee
Board has agreed to execute and deliver this Letter Agreement.

1. Representations of the Levee Board. The Levee Board
represents to the Agent that:

a) the Levee Board is the record owner of the Premises as described in
the Lease Agreement which is attached hereto as Exhibit A and made a part
hereof, with full power and authority to execute and deliver this Letter
Agreement;

b) attached hereto as Exhibit A is a true and correct copy of the Port
Facility Lease; the Port Facility Lease is valid, in full force and effect,
has not been assigned, modified, supplemented or amended (except as
specified herein) in any way and represents the entire agreement between
the parties thereto with respect to the Premises;

c) to the best of its knowledge, neither the Levee Board nor BL
Development is in default under the Port Facility Lease, and no event has
occurred or condition exists which with the passage of time or the giving
of notice, or both, would constitute an event of default thereunder; and

d) the commencement date of the Port Facility Lease was December 29,
1993, the expiration date of the Port Facility Lease is December 31, 1999,
and, subject to the terms of the Port Facility Lease, the term of the Port
Facility Lease may be extended for nine (9) additional renewal terms of six
(6) years each.

2. Personalty of BL Development. (i) The Levee Board acknowledges that BL
Development may place or attach, or has placed or attached, on or to the
Premises the gaming equipment and other trade fixtures, machinery and equipment
leased to BL Development pursuant to the Capital Lease (such trade fixtures,
machinery and equipment, together with all additions thereto, and substitutions,
parts, replacements and proceeds thereof, whether now owned or hereafter
acquired, are collectively referred to as the "Equipment"). Moreover, the Levee
Board acknowledges that BL Development may place or has placed on the Premises
inventory and other personal property of BL Development, including, without
limitation, finished goods, work-in-process and raw materials (such inventory
and other personal property, together with all proceeds and products thereof,
whether now owned or existing or hereafter acquired or arising, are collectively
referred to as the "Inventory"). The Levee Board further acknowledges that the
Equipment and the Inventory are or will be subject to a security interest and
lien in favor of the Agent. The Equipment, the Inventory and any other personal
property in the possession of BL Development which is subject to and covered by
the Capital Lease and this Letter Agreement is specifically and exclusively
listed on Exhibit B are collectively referred to as the "Personalty" for the
purposes of this Letter Agreement and, to the extent located on the casino
vessels on the Premises shall be referred to as "Casino Personalty" for purposes
of this Letter Agreement.

(ii) The Levee Board agrees with the Agent (on behalf of the Lenders
and itself) that as between the Levee Board and Agent and the Lenders that
(a) the Personalty is and will remain personal property and will be subject
to and covered by the Capital Lease, (b) disclaims any title, right or
interest in the Personalty, (c) disclaims any title, right or interest in
the Casino Personalty whether or not installed or affixed to the casino
vessels located on the Premises, and (d) agrees that the security interest
of the Agent in the Personalty and the Casino Personalty granted pursuant
to any security interest, lien or other instrument shall be superior to any
interest which the Levee Board may now or in the future acquire in the
Personalty or Casino Personalty pursuant to the Port Facility Lease or any
statute, law or ordinance. The Levee Board subordinates any such interest
which it may have in the Personalty and the Casino Personalty to the prior
and superior interest of the Agent.

(iii) For only the time that this Letter Agreement is in effect as
defined in paragraph 5 hereunder, the Levee Board waives its right under
the laws of the State of Mississippi or any other State, the Port Facility
Lease or any other agreement now in effect or hereafter executed by the
Levee Board and BL Development, to levy or distrain upon the Personalty for
rent, damages, or expenses, in arrears, in advance or both, or to claim or
assert title to, or a security interest in, the Personalty.

3. Remedies of Agent Against Personalty. The Agent or its designee may sell or
may remove the Personalty from the Premises whenever the Agent (or such
designee) in its sole discretion determines it necessary to do so to protect the
Agent's interest in the Personalty and/or the Casino Personalty after prior
written notification to Levee Board of Agent's intention to so remove the
Personalty and/or the Casino Personalty. Agent will, within a commercially
reasonably time as determined by the Levee Board, repair or replace any damaged
property or improvements within the Premises (other than on the casino vessels
located on the Premises) to the condition said property or improvements were in
immediately before such damage occurred, where such damage is caused either
directly or indirectly by said removal of the Personalty and/or the Casino
Personalty by the Agent or Agent's designee. Subject to the notification of the
Levee Board as required by this paragraph, Agent or its designee shall have the
right of entry at any time to remove the Personalty from the Premises, except
that at any time the Mississippi River exceeds 40 on the Cairo, Illinois gage or
41 on the Helena, Arkansas gage, Agent will only enter the Premises after prior
approval by the Levee Board's Chief Engineer, whose approval or disapproval
shall be conclusive and final.

4. Assurance. Upon request of BL Development, but no more often than once
during each calendar year and at no cost to the Levee Board, the Levee Board
shall execute, acknowledge and deliver to BL Development within 45 days
following BL Development's written request therefor a statement in writing
certifying to the best knowledge of the Levee Board that the Port Facility Lease
is in full force and effect; that the lessee is not in default thereunder (or
specifying any defaults by the lessee); and that the Port Facility Lease has not
been modified, or if it has been modified, the terms of such modification.

5. Duration. This Letter Agreement may be recorded by either party hereto and
will remain in effect until (a) the indefeasible payment in full of all amounts
payable under the Capital Lease and all documents evidencing and securing the
obligations of BL Development with respect to the Personalty and/or the Casino
Personalty, and (b) thirty (30) days after written notification, as required by
paragraph 6 hereunder to Levee Board that the Capital Lease has been terminated.
It is expressly understood and agreed that all obligations, covenants, and
assurances of Levee Board with respect to this Letter Agreement shall cease and
be considered void at the termination of this Letter Agreement.

6. Demands. All demands or documents which are required or permitted to be
given or served hereunder shall be deemed given when sent by certified or
registered mail, return receipt requested, addressed to the Levee Board or the
Agent at its address set forth above; provided that such addresses may be
changed from time to time by any party serving notice to the other parties as
provided above. Agent shall give written notice to the Levee Board after all
obligations under the Capital Lease are paid in full and the Capital Lease has
been terminated.

7. Severability. Whenever possible, each provision of this Letter Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Letter Agreement shall be
prohibited or be invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Letter Agreement.

8. Binding Agreement. This Letter Agreement shall inure to the benefit of and
be binding upon the Levee Board and the Levee Board's successors and assigns and
inure to the benefit of and be binding upon the Agent and the Agent's successors
and assigns.

9. Modification by Writing. This Letter Agreement may not be modified orally
or in any manner other than in writing signed by the parties hereto or their
respective successors or assigns. The section headings used herein are for
convenience or reference only and shall not define or limit the provisions of
this Letter Agreement.

10. Liability of Lessor. Lessor agrees that it shall be responsible and liable
to the Levee Board for any damages to the Premises and/or any property owned by
the Levee Board or injuries to Levee Board Employees resulting from the removal
of the Personalty and/or the Casino Personalty located on the Premises (except
for damage to the casino vessels) by Agent or Agent's designee.

11. Protection of Levee Paramount. Lessor and Agent understand and agree that
the maintenance and protection of the levee is paramount. Agent agrees that it
shall have no claim to the Levee Board for loss or damage to the Personalty
and/or Casino Personalty attached to the Premises where such damages and or
alterations occur as the result of flood fight activities by the Levee Board or
its agents to protect the safety, security, and integrity of the levee system at
river stages above bank full.

Very truly yours,

BOARD OF LEVEE COMMISSIONERS FOR THE
YAZOO-MISSISSIPPI DELTA

By: /s/ T. M. SIMONS
Name: T. M. Simons
Title: President

STATE OF MISSISSIPPI)
) ss:
COUNTY OF __________ )

Personally appeared before me, the undersigned authority in and for the said
county and state, on this 9th day of May, 1996, within my jurisdiction, the
within named T. M. Simmons who acknowledged that he is President of BOARD OF
LEVEE COMMISSIONERS FOR THE YAZOO-MISSISSIPPI DELTA, and that for and on behalf
of said BOARD OF LEVEE COMMISSIONERS FOR THE YAZOO-MISSISSIPPI DELTA, and as its
act and deed he executed the above and foregoing instrument, after first having
been duly authorized by said BOARD OF LEVEE COMMISSIONERS FOR THE
YAZOO-MISSISSIPPI DELTA to do so.

Notary Public

My Commission expires:
My Commission expires July 4, 1998

(Affix official seal, if applicable)

Agent Acceptance:
ACCEPTED AND AGREED TO:

BA LEASING & CAPITAL CORPORATION, as the Agent

By: /s/ DAVID F. SCULLY
Name: David F. Scully
Title: Vice President

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

Personally appeared before me, the undersigned authority in and for the said
county and state, on this 16th day of May, 1996, within my jurisdiction, the
within named David F. Scully who acknowledged that he is Vice President of BA
LEASING & CAPITAL CORPORATION, a California corporation, and that for and on
behalf of said corporation, and as its act and deed he executed the above and
foregoing instrument, after first having been duly authorized by said
corporation to do so.

Notary Public

My Commission expires:

(Affix official seal, if applicable)

[MISSING TEXT FOR EXHIBITS A - B AND C]

[EXECUTION COPY]

INTERCREDITOR AGREEMENT

THIS INTERCREDITOR AGREEMENT, dated as of May 10, 1996 (this "Agreement"),
among American Bank National Association, as trustee (the "Indenture Trustee")
under the Indenture (as hereinafter defined), First Security Bank of Utah, as
trustee (under the Master Trust Vessel Agreement dated the date hereof with
Agent) and mortgagee (the "Vessel Trustee") under the Third Mortgage (as
hereinafter defined), any lender that constitutes a "Pari Passu Lender" under
the Indenture and who becomes a signatory to this Agreement (a "Pari Passu
Lender"), Grand Casinos, Inc., a Minnesota corporation ("GCI"), under the GCI
First Mortgage (as hereinafter defined), GCA Acquisition Subsidiary, Inc., a
Minnesota corporation and successor by merger to Gaming Corporation of America
("GCA"), under the GCA First Mortgage (as hereinafter defined), the Mortgagor
(as hereinafter defined) and BA Leasing & Capital Corporation, as Agent (the
"Agent") under the Participation Agreement (as hereinafter defined) for certain
lenders named therein (the "Lenders") and acknowledged and accepted by each of
Grand Casinos Resorts, Inc., Grand Casinos of Mississippi, Inc. - Gulfport,
Grand Casinos of Mississippi, Inc. - Biloxi, Grand Casinos Biloxi Theater, Inc.,
GCI Biloxi Hotel Acquisition Corporation, GCI Gulfport Hotel Acquisition
Corporation, Mille Lacs Gaming Corporation, Grand Casinos of Louisiana, Inc. -
Tunica - Biloxi, Grand Casinos of Louisiana, Inc. - Coushatta, GCA (collectively
and together with GCA, the "Guarantors"), and BL Development Corp. (the
"Mortgagor"; and together with the Guarantors, collectively, the "Subsidiaries"
and individually, a "Subsidiary"),

W I T N E S S E T H:

WHEREAS, Mortgagor has granted a First Preferred Fleet Mortgage to GCI
covering the certain barges more fully described therein (the "Barges"), dated
as of February 9, 1995, filed for record at the Port of St. Louis, Missouri on
February 14, 1995 and recorded in Book 9502, Page 338, as amended by that
certain First Amendment to First Preferred Fleet Mortgage dated August 16, 1995
and filed of record at the Port of New Orleans on August 31, 1995, and recorded
in Book 9509, Page 97, and as further amended by that certain Second Amendment
to First Preferred Fleet Mortgage dated November 30, 1995, and filed for record
at the National Vessel Documentation Center on December 6, 1995, and recorded in
Book 96-03, Page 806 (collectively, the "GCI First Mortgage");

WHEREAS, Mortgagor has granted a First Preferred Fleet Mortgage to GCA
covering the Barges, dated as of February 9, 1995, filed for record at the Port
of St. Louis, Missouri on February 14, 1995 and recorded in Book 9502, Page 337,
as amended by that certain First Amendment to First Preferred Fleet Mortgage
dated August 16, 1995 and filed of record at the Port of New Orleans on August
31, 1995, and recorded in Book 9509, Page 96, and as further amended by that
certain Second Amendment to First Preferred Fleet Mortgage dated November 30,
1995, and filed for record at the National Vessel Documentation Center on
December 6, 1995, and recorded in Book 96-03, Page 804 (collectively, the "GCA
First Mortgage"; and together with GCI First Mortgage, collectively referred to
as the "First Mortgages");

WHEREAS, GCI has issued its 10 1/8% First Mortgage Notes due December 1,
2003 (collectively, the "First Mortgage Notes") under that certain indenture
dated as of November 30, 1995, by and among GCI, the Subsidiaries (as defined
therein) and the Indenture Trustee (the "Indenture");

WHEREAS, in connection with the execution and delivery of the Indenture,
GCI and GCA have irrevocably transferred and assigned the GCI First Mortgage and
the GCA First Mortgage, respectively, to the Indenture Trustee pursuant to (i)
that certain Assignment of First Preferred Fleet Mortgage dated as of November
30, 1995, executed by GCI in favor in the Indenture Trustee and filed for record
at the National Vessel Documentation Center on December 7, 1995 and recorded in
Book 96-03, Page 807 (the "GCI Assignment") and (ii) that certain Assignment of
First Preferred Fleet Mortgage dated as of November 30, 1995, executed by GCA in
favor of the Indenture Trustee and filed for record at the National Vessel
Documentation Center on December 7, 1995 and recorded in Book 96-03, page 805
(the "GCA Assignment");

WHEREAS, pursuant to Section 4.20(c) of the Indenture (relating to
redocumentation of the Barges upon completion of the casino), GCI shall as soon
as practical submit to the United States Coast Guard an application and any
other materials/ documents to request a redocumentation of the Barges (following
such redocumentation, the Barges shall be referred to as the "Vessel") and the
Indenture Trustee will file a preferred ship mortgage subject only to the First
Mortgages (the "Second Mortgage" together with the First Mortgages,
collectively, the "Indenture Trustee Mortgages") with respect to the Vessel;

WHEREAS, pursuant to that certain Deed of Trust, Assignment of Rents and
Security Agreement (Tunica, Mississippi) dated as of November 30, 1995 (the
"Indenture Deed of Trust") among the Mortgagor, as Trustor, James K. Merrihew,
an individual as Trustee, and the Indenture Trustee (the "Indenture Deed of
Trust"), the Mortgagor has granted a first priority lien for the benefit of the
Indenture Trustee on certain real and personal property of the Mortgagor located
in Tunica County, Mississippi and more fully described therein (the "Indenture
Deed of Trust Collateral"), excluding expressly, however, any FF&E (as such term
is defined in the Indenture Deed of Trust and herein referred to as "FF&E")
which is the subject of an FF&E Financing Agreement permissible under the terms
of the Indenture (herein referred to as an "FF&E Financing Agreement");

WHEREAS, subject to the terms and provisions of the Indenture, GCI and its
Restricted Subsidiaries (as such term is defined in the Indenture) are permitted
to, among other things, incur capital lease obligations from other sources to
finance the costs of various improvements and equipment;

WHEREAS, GCI and the Subsidiaries may from time to time provide one or more
Pari Passu Lenders with a lien and security interest in certain real and
personal property of GCI, the Mortgagor and the other Subsidiaries (the "Pari
Passu Collateral"), as more fully described in an intercreditor agreement, to be
executed and amended from time to time, (each a "Pari Passu Intercreditor
Agreement"), among the Indenture Trustee, GCI, the Subsidiaries and each Pari
Passu Lender in the form contemplated by and attached to the Indenture, as
security for certain Indebtedness (as such term is defined in the Indenture and
herein referred to as "Indebtedness") owing to the Pari Passu Lender (the "Pari
Passu Indebtedness") pursuant to certain agreements, documents and instruments
among GCI, the Subsidiaries and the Pari Passu Lender to be executed and
delivered (the "Pari Passu Collateral Agreements");

WHEREAS, GCI intends to grant each Pari Passu Lender as security for the
Pari Passu Indebtedness, among other things, a preferred ship mortgage on the
Vessel pari passu with the Indenture Trustee Mortgages (each a "Pari Passu
Second Mortgage");

WHEREAS, subject to the terms and conditions set forth below, the Agent on
behalf of the Lenders hereby consents to the recordation and filing of each Pari
Passu Second Mortgage;

WHEREAS, GCI, the Mortgagor and the Subsidiaries have entered into that
certain Participation Agreement, dated as of the date hereof (as amended,
modified or supplemented from time to time, the "Participation Agreement"), with
the Agent, Hancock Bank, not in its individual capacity but solely as Trustee
(the "Trustee"), and the Co-Agents, the Lead Manager and the Lenders named
therein, for the purpose of obtaining funds for construction and acquisition
financing for a hotel and equipment associated with Grand Casino Tunica Resort
in Tunica County, Mississippi being developed by the Mortgagor;

WHEREAS, the Participation Agreement requires, among other matters, (i)
that each Lender advance funds to the Trustee to fund the acquisition of certain
equipment described on Schedule 1 hereto (including all substitutions,
replacements, modifications and alterations thereof, all additions or accessions
thereto, all related bills of sale, purchase orders, purchase agreements and
documents of title thereto, and all proceeds, including, without limitation,
insurance proceeds derived therefrom, collectively, the "Barge Equipment"), (ii)
that the Trustee enter into a lease, dated the date hereof (as amended or
modified, the "Capital Lease") with Mortgagor for such Barge Equipment, with a
lease term ending March 30, 2002, (iii) that the Trustee assign all of its
right, title and interest in the Barge Equipment, the Capital Lease, the
guaranty of the Capital Lease made by GCI and all other rights to the Agent as
collateral security for the advances made by the Lenders pursuant to a loan
agreement, dated the date hereof, and (iv) that the Trustee collateralize the
advances to the Agent for the benefit of the Lenders by granting a lien and
security interest against the Barge Equipment pursuant to that certain Security
Agreement and Assignment of Rents, the Third Mortgage and the Deed of Trust and
Security Agreement, each dated the date hereof, among the Agent and the Trustee
as beneficiaries, and the Lessee and Trustee, as borrowers;

WHEREAS, pursuant to the Partial Release of the Deed of Trust and
Collateral Documents dated the date hereof (the "Partial Release"), the
Indenture Trustee has, among other things, released its liens on the Barge
Equipment under its Collateral Documents (as defined in the Indenture, but
specifically excluding the Indenture Trustee Mortgages);

WHEREAS, because certain restrictions under maritime law prevent the
Indenture Trustee from granting a partial release of its liens with respect to
the Barge Equipment under the Indenture Trustee Mortgages, the Indenture Trustee
has agreed to permit the granting of a junior ship mortgage by the Mortgagor to
the Vessel Trustee for the benefit of the Lenders in and to the whole of the
Vessel for purposes of providing a lien with respect to the Barge Equipment
under and to the extent that the Vessel is governed by the Ship Mortgage Act;
and

WHEREAS, pursuant to Section 5.17 of the Participation Agreement (relating
to redocumentation of the Barges upon completion of the Casino) the Mortgagor
will file and record a preferred mortgage lien (subject only to the First
Mortgages, the Second Mortgage and any Pari Passu Second Mortgage) in favor of
the Vessel Trustee for the benefit of the Lenders on the Vessel pursuant to that
certain Preferred Mortgage, to be entered into concurrently with the
redocumentation of the Casino Barges (the "Third Mortgage");

WHEREAS, the parties hereto (the "Intercreditor Parties") intend to agree
hereby, as more fully described herein and subject to the terms and conditions
hereof, that:

(a) with respect to the Barges and after redocumentation, the
Vessel:

(i) as between the Indenture Trustee and the Pari Passu Lenders,
on the one hand, and the Vessel Trustee, on the other hand, (x) the
Indenture Trustee and the Pari Passu Lenders shall have a first
priority lien on the Vessel, and (y) the Vessel Trustee shall have a
second priority lien on the Vessel;

(ii) as between the Vessel Trustee, on the one hand, and GCI and
GCA, on the other hand, (x) the Vessel Trustee shall have a first
priority lien on the Vessel and (y) GCI and GCA (to the extent of
their interests in the First Mortgages) shall have a second priority
lien on the Vessel; and

(b) with respect to the Barge Equipment, the Indenture Trustee
acknowledges (i) that the Capital Lease, the Participation Agreement and
ancillary documents constitute FF&E Financing Agreements (which expressly
require the release of the Indenture Trustees' liens except as limited in
this Agreement and the Partial Release) and (ii) the Barge Equipment
constitutes FF&E and, therefore, the Indenture Trustee shall have no lien
or other security interest in the Barge Equipment, except as reserved under
the Partial Release with respect to the Indenture Trustee Mortgages, and
then only under such Mortgages for purposes of the Ship Mortgage Act,
subject, however, to the rights in the proceeds of the Vessel and the Barge
Equipment pursuant to the terms of this Agreement;

(c) as between the Agent and each Pari Passu Lender, the Pari Passu
Lender shall have no lien or any other security interest in the Barge
Equipment, other than pursuant to the Pari Passu Second Mortgage,
regardless of the terms of any of the Pari Passu Intercreditor Agreement or
the Pari Passu Collateral Documents; and

(d) without limiting the validity and enforceability of the GCI
Assignment or the GCA Assignment or the rights of the Indenture Trustee
under each Indenture Trustee Mortgage or under clause (a)(i) above, as
between the Agent, on the one hand, and GCI and GCA, on the other hand, (x)
the Agent shall have a first priority lien on the Barge Equipment and (y)
neither GCI nor GCA shall have a lien or other security interest on the
Barge Equipment.

NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Intercreditor Parties agree as
follows:

Section 1. Effect of this Agreement. The priorities of the liens,
mortgages, pledges or security interests established, altered or specified
herein are applicable irrespective of:

(a) the time or order of attachment or perfection thereof;

(b) the method of perfection;

(d) any amendments to the liens, mortgages or security interest
established, altered or specified herein, provided that such amendment does
not alter the aggregate principal amount of the Indebtedness secured by
such lien, mortgage or security interest; or

(e) the time or order of foreclosure, taking of possession or
the exercise of any remedy;

provided, however, that the priorities of any liens, mortgages or security
interests which are not established, altered or specified herein shall be
unaffected and shall exist and continue in accordance with applicable law. The
agreements in Section 2 hereof are solely for the purpose of establishing the
relative priorities of the interests of the Intercreditor Parties in the Vessel
and the Barge Equipment (collectively, the "Intercreditor Collateral") and do
not alter or amend any right which the Intercreditor Parties, or any one of
them, have against parties not a signatory hereto.

Section 2. The Vessel and the Barge Equipment.

(a) Priority of Liens.

(i) So long as any Indebtedness with respect to the Indenture or
any Pari Passu Indebtedness remains outstanding and unpaid, the lien,
mortgage, pledge or security interest of the Indenture Trustee and the
Pari Passu Lenders with respect to the Intercreditor Collateral
pursuant to the Indenture Trustee Mortgages and the Pari Passu Second
Mortgages shall be prior to the lien, mortgage, pledge or security
interest of the Vessel Trustee with respect to the Intercreditor
Collateral pursuant to the Third Mortgage.

(ii) If clause (i) does not apply and so long as any indebtedness
contemplated by the Participation Agreement remains outstanding and
unpaid, the lien, mortgage, pledge or security interest of the Vessel
Trustee with respect to the Intercreditor Collateral pursuant to the
Third Mortgage shall be prior to the lien, mortgage, pledge or
security interest of GCI and/or GCA with respect to the Intercreditor
Collateral pursuant to the First Mortgages.

(b) Actions to be Taken.

(i) Subject to Section 17(b) hereof, so long as any Indebtedness
with respect to the Indenture and/or the Pari Passu Indebtedness
remains outstanding and unpaid, the Indenture Trustee, or the
Controlling Party (as defined in the Pari Passu Intercreditor
Agreement if such Pari Passu Intercreditor Agreement is in effect),
shall have the sole right without the affirmative consent of the
Agent, Vessel Trustee or the Trustee to take or fail to take each of
the actions described in this Section 2(b), except as otherwise
expressly provided herein:

(A) Commence an in rem foreclosure proceeding in respect of the
Intercreditor Collateral under the Indenture Trustee
Mortgages and/or the Pari Passu Mortgages; provided that the
Vessel Trustee may file claims and exercise rights to prove
such claims under the Third Mortgage in an in rem
foreclosure proceeding commenced by the Indenture Trustee or
the Controlling Party, as the case may be, or a third party,
which in rem proceeding the Indenture Trustee or Controlling
Party has joined. The Indenture Trustee or Controlling
Party shall control the in rem proceeding, except as
provided below. If the Indenture Trustee and/or Controlling
Party discontinues such in rem foreclosure proceeding, and
such proceedings are actually discontinued, then the Vessel
Trustee shall also withdraw its in rem claims under the
Third Mortgage.

Vessel Trustee acknowledges and agrees that it shall not commence
an in rem foreclosure proceeding in respect of the Intercreditor
Collateral, except as set forth in Sections 2(b)(i)(A) and
2(b)(ii) or as approved in writing by the Indenture Trustee or
Controlling Party, as applicable.

(B) In any proceeding (a "Bankruptcy Proceeding") commenced
under the United States Bankruptcy Code, 11 U.S.C. 101 et
seq. (the "Bankruptcy Code"), and any other state or federal
insolvency, reorganization, moratorium or similar law for
the relief of debtors ("Bankruptcy Law"), make a motion to
lift the automatic stay (or similar motion under other state
or federal laws) in respect of the Intercreditor Collateral;
provided that the Vessel Trustee, Trustee and/or Agent on
behalf of the Lenders may join in to support any motion made
by the Indenture Trustee or Controlling Party to lift the
automatic stay (or similar state motion) in respect of the
Intercreditor Collateral. Neither Vessel Trustee, Trustee
or Agent shall file a similar motion on their own behalf.
If the automatic stay (or similar state motion) is lifted in
respect of the Intercreditor Collateral, Section 2(b)(i)(A)
above shall apply.

(ii) If the Indenture Trustee Mortgages are held invalid and
unenforceable for any reason whatsoever, (A) Vessel Trustee may
commence an in rem foreclosure proceeding in respect of the
Intercreditor Collateral, (B) if such proceeding has been commenced,
remain a party to the in rem foreclosure proceeding and control its
claims or (C) if a Bankruptcy Proceeding has been commenced, bring a
motion to lift the automatic stay against the Intercreditor Collateral
or, if the motion has been commenced, control and litigate such
claims.

(iii) Subject to Section 17(a) hereof, each of the Intercreditor
Parties agrees to and with each other that none of them shall at any
time contest in any manner, under any applicable law, the legal
validity, enforceability and priority of each Intercreditor Party's
respective ship mortgage and lien as established thereby and hereby or
(ii) the allocation of proceeds from the sale or other disposition of
the Intercreditor Collateral under Section 2(b)(ix) hereof.

(iv) In the event that the Indenture Trustee or the Controlling
Party, if a Pari Passu Intercreditor Agreement is in effect, shall
take any action permitted pursuant to Section 2(b)(i) hereof, and
shall thereafter realize and receive any proceeds (net of any
reasonable collection costs and expenses of sale, including, without
limitation reasonable attorney's fees not otherwise paid by the
Mortgagor or Guarantor) from the sale or other disposition of the
Barge Equipment, all such amounts allocable to the Barge Equipment
pursuant to Section 2(b)(viii) or (ix), without taking account of any
set off, claims or deductions, and otherwise free and clear of any
liens or other security interests created by, through or under the
Indenture Trustee or Pari Passu Lender, shall be immediately deposited
by the Indenture Trustee or the Controlling Party, as the case may be,
in an account notified to the Indenture Trustee or Controlling Party
by the Agent, for the sole use by the Agent for the benefit of the
Lenders. Each Pari Passu Lender agrees to cause the release of any
lien or security interests created by, through or under such party in
the foregoing proceeds, if any, upon request by the Agent or the
Indenture Trustee.

(v) Subject to Section 17(b) hereof, if the Indebtedness with
respect to the Indenture and the Pari Passu Lenders has been paid in
full and discharged, then upon the occurrence and continuance of a
Lease Event of Default (as defined in the Capital Lease), the Vessel
Trustee shall have the sole right without the affirmative consent of
GCA or GCI to take or fail to take the actions described in Section
2.2(b)(i) (A) and (B) above, as if it were the Indenture Trustee and
GCA and GCI shall have the same rights that the Vessel Trustee has
under such Sections.

(vi) In connection with Section 2(b)(i) hereof, the Indenture
Trustee, each Pari Passu Lender, GCI, GCA and the Mortgagor shall at
all times permit the Agent and the Vessel Trustee and their employees,
agents and representatives to have full access to the Intercreditor
Collateral in order to assemble, remove and/or dispose of the Barge
Equipment under all applicable laws.

(vii) In the event the Vessel Trustee shall take any action
permitted pursuant to Section 2(b)(iii), and shall thereafter realize
any proceeds (net of any reasonable collection costs and expenses of
sale, including, without limitation reasonable attorney's fees and any
appraisal expenses incurred pursuant to Section 2(b)(vi) below not
otherwise paid by the Mortgagor or Guarantor) from the sale or other
disposition of the Intercreditor Collateral, all such amounts
attributable to the Intercreditor Collateral, without taking account
of any set off, claims or deductions, and otherwise free and clear of
any liens or other security interests of the Indenture Trustee or the
Pari Passu Lenders or any other party, except the Agent, shall be
applied to repayment of the indebtedness contemplated by the
Participation Agreement and any remaining amounts realized from the
sale or other disposition of the Vessel shall be applied to the
repayment of GCI and GCA Indebtedness, pro rata in accordance with the
principal amounts owing to each.

(viii) In the event the Barge Equipment is sold or otherwise
disposed of pursuant to Section 2(b)(iv) in such manner that the Barge
Equipment is separately sold, then the proceeds from such Barge
Equipment shall be deposited in accordance with Section 2(b)(iv).

(ix) In the event of a sale or other disposition of the
Intercreditor Collateral as a whole pursuant to Section 2(b)(i)
hereof, then the total net proceeds from the sale or other disposition
of the Intercreditor Collateral shall be allocated between the Vessel
Trustee, on the one hand, and the Indenture Trustee or the Controlling
Party and the Pari Passu Lender, on the other hand, by multiplying the
net proceeds realized from the sale or other disposition of the
Intercreditor Collateral times the Vessel Trustee Sharing Percentage
and the Controlling Party Sharing Percentage, with the former amount
being paid to the Vessel Trustee for the benefit of the Agent and the
Lenders and the latter amount being paid to the Controlling Party (or
the Indenture Trustee for application in accordance with the
applicable Pari Passu Intercreditor Agreements).

"Vessel Trustee Sharing Percentage" for any date with respect to
the net proceeds from the sale or other disposition of the
Intercreditor Collateral means the percentage specified for the Vessel
Trustee in Exhibit A hereto for the date coinciding with or next
preceding the date of the transfer of title to the Intercreditor
Collateral pursuant to such sale or other disposition.

"Controlling Party Sharing Percentage" for any date with respect
to the net proceeds from the sale or other disposition of the
Intercreditor Collateral means the percentage specified for the
Controlling Party (including the Indenture Trustee and any Pari Passu
Lender) in Exhibit A hereto for the date coinciding with or next
preceding the date of the transfer of title to the Intercreditor
Collateral pursuant to such sale or other disposition.

Notwithstanding anything in this Section 2(b)(ix) to the
contrary, if the Indenture Trustee or Controlling Party is dismissed
from or not a party to an in rem foreclosure proceeding as a result of
the invalidity or unenforceability of the Indenture Trustee Mortgages
and the Vessel Trustee successfully forecloses on the Intercreditor
Collateral, the Vessel Trustee shall share the net proceeds from the
sale of the Intercreditor Collateral as a whole as follows: the Vessel
Trustee shall be entitled to receive an amount equal to the Vessel
Trustee Percentage Share times the net proceeds realized from the sale
or other disposition of the Intercreditor Collateral and the Indenture
Trustee or Controlling Party, as applicable, shall receive the
remaining amount of net proceeds received by the Vessel Trustee from
such sale or other disposition.

(x) Except as otherwise expressly provided herein, neither the
Vessel Trustee nor the Agent shall exercise any remedies under the
Third Mortgage in respect of the Vessel (excluding the Barge
Equipment), although it may exercise remedies under the Third Mortgage
or any other collateral document in respect of the Barge Equipment.

Section 3. Acknowledgement of FF&E Financing Agreements.

(a) The Intercreditor Parties agree and acknowledge that the Capital
Lease and the Participation Agreement constitute FF&E Financing Agreements,
and the Barge Equipment constitutes FF&E and, therefore, the Indenture
Trustee shall have no lien or other security interest in the Barge
Equipment, except as reserved under the Partial Release with respect to the
Indenture Trustee Mortgages, and then only under such Mortgages and this
Agreement for purposes of the Ship Mortgage Act. Neither the Indenture
Trustee nor any Pari Passu Lender shall have any liens, security interests
or related rights in the Barge Equipment that may otherwise arise under
applicable real estate laws, the Uniform Commercial Code as in effect in
the governing jurisdiction or any other law, except as may otherwise be
provided under the Indenture Trustee Mortgages, the Pari Passu Mortgages
and the Ship Mortgage Act. The Indenture Trustee and each of GCI and the
Subsidiaries agrees to execute and deliver each and every necessary
document, instrument and agreement necessary, in the opinion of the Agent
to evidence the foregoing release of any such lien or security interest as
of the date hereof, including, without limitation, all such documents,
instruments or agreements required in connection with the terms and
conditions of the Indenture or any of the related Collateral Documents (as
defined in the Indenture) with respect to any such release.

(b) So long as any indebtedness contemplated by the Participation
Agreement remains outstanding and unpaid, neither GCI nor any Subsidiary
shall grant to the Indenture Trustee or any Pari Passu Lender on or after
the date hereof any lien, mortgage, pledge or security interest with
respect to the Barge Equipment except (i) Pari Passu Second Mortgages in
accordance with the terms of the Indenture and this Agreement and (ii) any
document or instrument required under any "further assurances" provision of
the Indenture Trustee Mortgages and any Pari Passu Second Mortgage.

Section 4. Other Rights and Remedies. Each of the Intercreditor Parties
agrees not to take any action whatsoever to enforce any of its rights in respect
of the Vessel under any ship's mortgage, except in accordance with Section 2
hereof; provided, however, that this Agreement shall not prevent any party
hereto from enforcing or exercising any right or remedy with respect to any
collateral which is not the Vessel. Nothing contained herein is intended to
alter the respective rights and obligations of either the Indenture Trustee or
the Pari Passu Lender vis-a-vis each other with respect to the Pari Passu
Intercreditor Agreement.

Section 5. Money to be Held in Trust. GCI and each Subsidiary agree that if
any Intercreditor Party receives any money, funds or other property in respect
of the Vessel in violation of the terms and conditions of this Agreement, such
money, funds or other property shall not discharge any secured obligation held
by the Intercreditor Party receiving such money, funds or other property. In the
event that any payment in respect of, or distribution to, an Intercreditor Party
is made in breach of Section 2 hereof before all Indebtedness secured by
Intercreditor Collateral is paid in full, such payment or distribution shall be
held in trust for the benefit of, and shall be paid over to, the Intercreditor
Parties in accordance with Section 2 hereof.

Section 6. Communications. Each of the Intercreditor Parties agrees to
transmit to each of the other Intercreditor Parties a copy of any communication
sent by such party to GCI, any Subsidiary or any other Person (contemporaneously
with the transmittal of any such communication) with respect to any event of
default any acceleration of any Indebtedness, or any notice of sale of any
Intercreditor Collateral as a result of a default. Any failure by any
Intercreditor Party to furnish a notice pursuant to this Section 6 hereof shall
in no way diminish the rights of such party hereunder.

Section 7. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, and shall be binding upon
and inure to, the benefit of the Intercreditor Parties, GCI, the Subsidiaries,
and their respective successors, designees and assigns.

Section 8. UCC Terms. All terms used herein which are defined in the New
York Uniform Commercial Code shall have the meanings therein stated, unless the
context otherwise requires.

Section 9. Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be given by personal delivery
or United States mail, first class, registered or certified, postage prepaid,
return receipt requested, addressed to the parties at the addresses indicated on
the signature pages hereof. Each such notice or other communication shall be
deemed given on (a) the date of receipt of personal delivery thereof, or (b) if
not by mail (as aforesaid), the date which is three (3) business days after such
communication is deposited in the mail postage prepaid as aforesaid). Any party
may change its address for notice by notice to the other Intercreditor Parties
in accordance with the foregoing.

Section 10. Additional Actions. Each of the Intercreditor Parties
(including the Indenture Trustee), upon the request of any Intercreditor Party,
shall execute and deliver and cause to be recorded in all applicable filing
offices an intercreditor agreement substantially in the form of this Agreement,
which intercreditor agreement shall be effective if and only if all
Intercreditor Parties shall have executed and delivered the same or a
counterpart thereof. Simultaneously with the repayment or other discharge of any
Indebtedness and other obligations secured by any Intercreditor Collateral, the
Intercreditor Party whose Indebtedness is so repaid or discharged shall execute
and deliver such instruments as may be reasonably required by any of the other
Intercreditor Parties to release or extinguish such Intercreditor Party's
interest in the Intercreditor Collateral.

Section 11. No Liability. No Intercreditor Party shall be liable to any
other Intercreditor Party for any action taken by it, including the payment of
any monies hereunder, in connection with this Agreement, provided the same was
taken in good faith and did not constitute gross negligence or willful
misconduct.

Section 12. Confirmation of Rights. Except as otherwise provided in this
Agreement, each Intercreditor Party shall have the right to alter or amend its
respective loan agreements (including leases) and documents and to release or
take additional collateral pursuant thereto. Nothing in this agreement is
intended to alter or amend the obligations of any Intercreditor Party with
respect to GCI or any of its Subsidiaries under its respective loan agreements
(including leases) and documents. Except as expressly stated in this Agreement,
nothing herein is intended to confer upon GCI or any of its Subsidiaries any
right or benefit with respect to any other Intercreditor Party, and GCI and its
Subsidiaries hereby acknowledge that except as to such rights, they have no
right to enforce the terms hereunder against any Intercreditor Party. Except as
limited by this Section 12, the signatures of the Subsidiaries of GCI hereto
(except GCA which is an Intercreditor Party) are merely to acknowledge this
Agreement, which is for the sole benefit of the Intercreditor Parties.

Section 13. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.

Section 14. Headings. The headings of the parts of this Agreement are for
convenience only and shall have no legal effect or otherwise be used in
connection with the construction or interpretation of this Agreement. Indenture
Trustee, on the one hand, and Vessel Trustee, on the other hand, agree to give
to the other party written notice at least 10 days prior to (or
contemporaneously within the event of exigent circumstances) the commencement of
any foreclosure proceedings in respect of the Intercreditor Collateral.

Section 15. Notices; Indemnification. Each of the Intercreditor Parties
covenant to keep the proceeds of the Vessel free of all liens, claims,
deductions or set-off created by, through or under each of them and any losses
suffered as a result any such lien shall be indemnified by such person.

Section 16. Pari Passu Lender Bound by This Agreement. By executing and
delivering signature pages to this Agreement, countersigned by the parties
hereto, each Pari Passu Lender who signs this Agreement agrees to be bound by
the terms and conditions of this Agreement as of the date it obtained an
interest in the Intercreditor Collateral.

Section 17. Termination of this Intercreditor Agreement.

(a) Notwithstanding anything in this Agreement to the contrary, the
Trustee, Vessel Trustee, Agent and any Lender shall have the right to
contest in an appropriate judicial or administrative forum (including in a
Bankruptcy Proceeding) (i) the characterization of the Casino Barges (or
after redocumentation, the Vessel) as a "vessel" under the Ship Mortgage
Act and/or general maritime law or (ii) whether the Barge Equipment
constitutes "appurtenances" under maritime law.

(b) Upon a final, non-appealable determination by a court or
administrative authority of competent jurisdiction that the Casino Barges
(or the Intercreditor Collateral, after redocumentation) is not a "vessel"
under the Ship Mortgage Act and general maritime law, or the Barge
Equipment is not an "appurtenance" to such Vessel, this Agreement shall
terminate and all of the rights and obligations of the Intercreditor
Parties under this Agreement shall become unenforceable.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the Indenture Trustee, the Agent, the Vessel Trustee,
the Trustee, any Pari Passu Lender and GCI and GCA have caused this Agreement to
be duly executed as of the date first above written.

INTERCREDITOR PARTIES

BA LEASING & CAPITAL CORPORATION, as Agent

By: /s/ DAVID F. SCULLY
Name: David F. Scully
Title: Vice President

Address for notices:
BA Leasing & Capital Corporation
Four Embarcadero Center
Suite 1200
San Francisco, CA 94111

Attention: Sonia Delen, Assistant Vice President
Telephone: (415) 765-7372
Facsimile: (415) 765-7373

AMERICAN BANK NATIONAL ASSOCIATION,
as Indenture Trustee

By: /s/ FRANK P. LESLIE III
Name: Frank P. Leslie III
Title: Vice President

By:
Name:
Title:

Address for notices:
American Bank National Association
101 East Fifth Street
St. Paul, MN 55101

Attention: Frank P. Leslie III, VP
Telephone: (612) 229-2600
Facsimile: (612) 229-6415

FIRST SECURITY BANK OF UTAH, N.A.,
in its capacity as Vessel Trustee

By: /s/ GREG A. HAWLEY
Name: Greg A. Hawley
Title: Vice President

Address for notices:
79 South Main Street
Salt Lake City, Utah 84111

Attention: Corporate Trust Services
Telephone: (801) 246-5630
Facsimile: (801) 246-5053

GRAND CASINOS, INC.

By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer

Address for notices:
13705 First Avenue North
Plymouth, MN 55441

Attention: Timothy J. Cope
Telephone: (612) 449-7030
Facsimile: (612) 449-7022

GCA ACQUISITION SUBSIDIARY, INC.,
as Guarantor

By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer

Address for notices:
13705 First Avenue North
Plymouth, MN 55441

Attention: Timothy J. Cope
Telephone: (612) 449-7030
Facsimile: (612) 449-7022

BL DEVELOPMENT CORP.

By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer

Address for notices:
13705 First Avenue North
Plymouth, MN 55441

Attention: Timothy J. Cope
Telephone: (612) 449-7030
Facsimile: (612) 449-7022

ACKNOWLEDGED AND ACCEPTED:

GRAND CASINOS RESORTS, INC.
GRAND CASINOS OF MISSISSIPPI, INC.-GULFPORT
GRAND CASINOS OF MISSISSIPPI, INC.-BILOXI
GRAND CASINOS BILOXI THEATER, INC.
GCI BILOXI HOTEL ACQUISITION CORPORATION
GCI GULFPORT HOTEL ACQUISITION CORPORATION
GRAND CASINOS OF LOUISIANA, INC.-TUNICA-BILOXI
GRAND CASINOS OF LOUISIANA, INC.-COUSHATTA
MILLE LACS GAMING CORPORATION

By: /s/ TIMOTHY J. COPE
Name: Timothy J. Cope
Title: Chief Financial Officer

<ARTICLE> 5
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