AND

EXHIBIT 10.12
EXECUTION COPY

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THE MOHEGAN TRIBE OF INDIANS OF CONNECTICUT

AND

FLEET NATIONAL BANK,

AS ESCROW AGENT

FOR THE BENEFIT OF

THE MOHEGAN TRIBAL GAMING AUTHORITY
AND

THE ADMINISTRATIVE AGENT ON BEHALF OF THE LENDERS

AND

THE TRUSTEES ON BEHALF OF THE HOLDERS

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CONSTRUCTION RESERVE DISBURSEMENT AGREEMENT

DATED AS OF MARCH 3 , 1999

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INDEX

ARTICLE I. DEFINITIONS AND OTHER GENERAL PROVISIONS......................................... 1
Section 1.1. Definitions................................................................. 1
Section 1.2. Rules of Construction....................................................... 5

ARTICLE II. ESTABLISHMENT OF ESCROW......................................................... 5
Section 2.1. Appointment of Escrow Agent................................................. 5
Section 2.2. Establishment of Escrow Account............................................. 5

ARTICLE III. DISBURSEMENTS FROM ESCROW...................................................... 6
Section 3.1. Condition to Disbursement................................................... 6
Section 3.2. Method of Disbursement...................................................... 6
Section 3.3. Timing; Amount.............................................................. 6
Section 3.4. Disbursement of Compensation................................................ 6

ARTICLE IV. CONDITIONS PRECEDENT TO DISBURSEMENT............................................ 7
Section 4.1. Conditions to Disbursements Requested by the Authority...................... 7
Section 4.2. Requests for Disbursements by the Tribe..................................... 7
Section 4.3. Final Disbursement of Funds Following Operating Date........................ 7

ARTICLE V. LIMITATION OF LIABILITY.......................................................... 8
Section 5.1. Limitation of Escrow Agent's Liability...................................... 8
Section 5.2. Liability of Administrative Agent and Trustees.............................. 8

ARTICLE VI. INDEMNITY AND INSURANCE......................................................... 9
Section 6.1. Indemnity of Escrow Agent................................................... 9

ARTICLE VII. TERMINATION.................................................................... 9

ARTICLE VIII. SUBSTITUTION OR RESIGNATION................................................... 10
Section 8.1. Substitution of Escrow Agent or Resignation................................. 10

ARTICLE IX. ESCROW ACCOUNT STATEMENT........................................................ 10

ARTICLE X. NOTICE........................................................................... 11

ARTICLE XI. MISCELLANEOUS................................................................... 11
Section 11.1. Waiver..................................................................... 11
Section 11.2. Invalidity................................................................. 11

Section 11.3. No Authority............................................................... 11
Section 11.4. Assignment................................................................. 11
Section 11.5. Benefit.................................................................... 12
Section 11.6. Time....................................................................... 12
Section 11.7. Choice of Law.............................................................. 12
Section 11.8. Entire Agreement; Amendments............................................... 12
Section 11.9. Notices.................................................................... 12
Section 11.10. Counterparts.............................................................. 13
Section 11.11. Captions.................................................................. 14
Section 11.12. Right to Consult Counsel.................................................. 14
Section 11.13. Disbursement and Escrow Fee............................................... 14

ARTICLE XII. CONSENT TO SUIT................................................................ 14

CONSTRUCTION RESERVE DISBURSEMENT AGREEMENT

THIS AGREEMENT (this "Agreement" or "Disbursement Agreement") is made as of this
3rd day of March, 1999 by and among the Mohegan Tribe of Indians of Connecticut
(the "Tribe"), Fleet National Bank, as escrow agent ("Escrow Agent") and the
Mohegan Tribal Gaming Authority (the "Authority") for the benefit of the
Administrative Agent on behalf of the Lenders and the Trustees, on behalf of the
Holders.

A. WHEREAS the Authority has arranged for financing from the Lenders
and Holders, among others, (the "Financing") in connection with its plans to
expand the Mohegan Sun Casino (as defined below);

B. WHEREAS the plans for the Expansion are in the preliminary stages
and final construction budgets are yet to be completed;

C. WHEREAS the Tribal Council has issued a formal resolution capping
the scope of the Expansion at $800 million;

D. WHEREAS, the Tribe desires to ensure sufficient funds are
available to the Authority and in connection with the Lenders and the Holders
providing the Financing, the Tribe has agreed to deposit $40 million in the
Reserve Account to pay Vendors for Project Costs incurred in excess of the
Construction Budget;

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

ARTICLE I.

DEFINITIONS AND OTHER GENERAL PROVISIONS

Section 1.1 Definitions.
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The following terms, as used herein, have the following meanings:

"Administrative Agent" means Bank of America National Trust and
Savings Association, until a successor Administrative Agent is named pursuant to
the terms of the Loan Agreement or any successor Administrative Agent under a
successor loan agreement.

"Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), when used with respect to any specified
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.

"Cash Equivalents" means: (i) United States dollars; (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof (provided that the full
faith and credit of the United States is pledged in support thereof)

having maturities of not more than six months from the date of acquisition;
(iii) certificates of deposit and eurodollar time deposits with maturities of
six months or less from the date of acquisition, bankers' acceptances with
maturities not exceeding six months and overnight bank deposits, in each case
with any lender party to the Loan Agreement or with any domestic commercial bank
having capital and surplus in excess of $500 million and a Xxxxxxxx Bank Watch
Rating of "B" or better; (iv) repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clauses (ii)
and (iii) above entered into with any financial institution meeting the
qualifications specified in clause (iii) above; (v) commercial paper having one
of the two highest ratings obtainable from Xxxxx'x Investor Service, Inc. or
Standard & Poor's Rating Group and in each case maturing within six months after
the date of acquisition; and (vi) money market funds at least 95% of the assets
of which constitute Cash Equivalents of the kinds described in clauses (i) - (v)
of this definition.

"Completed" means, with respect to the Expansion, the first time that:
(i) all liens (other than Permitted Liens or liens which relate to Disputed
Amounts) relating to the construction of the Expansion have been paid; (ii) the
general contractor and the project architect for the Expansion, or an
independent construction expert appointed by the Authority, certify that the
Expansion is completed in all material respects in accordance with the Plans
therefor and in compliance with all applicable laws, ordinances, and regulations
(including gaming laws, ordinances and the Compact (as defined in the
Indentures) requirements) with respect to the physical structure, health and
safety, environmental and hazardous materials, fire, equipment, security and
physical operating (gaming and other) requirements of the Expansion; and (iii)
the Expansion is in a condition (including installation of furnishings, fixtures
and equipment sufficient for the Expanded Resort and provision of adequate
expansion operating capital) and including all operating supplies, sufficient
coin for the slot machines, sufficient operating cash for the other games and
trained employees (or sufficient funds to hire and train such employees), so
that the Expanded Resort is fit to receive guests in the ordinary course of
business.

"Construction Budget" means the construction budget established by the
Authority as such may be amended from time to time for the construction of the
Expansion.

"Credit Facilities" means, with respect to the Authority, one or more
debt facilities (including, without limitation, the Loan Agreement) or
commercial paper facilities with banks or other institutional lenders providing
for revolving credit loans, term loans, receivables financing (including through
the sale of receivables to such lenders or to special purpose entities formed to
borrow from such lenders against such receivables) or letters of credit, in each
case, as amended, restated, modified, renewed, refunded, replaced or refinanced
in whole or in part from time to time.

"Disputed Amounts" means amounts disputed in good faith between the
Authority and any Vendor providing goods, materials or services in connection
with the Expansion construction.

"Escrow Agent" means Fleet National Bank or such substitute Escrow
Agent as may be designated in accordance with Section 8 hereof.

"Escrow Agent's Office" means 000 Xxxxx Xxxxxx, Xxx Xxxxxx,
Xxxxxxxxxxx or such other office as to which Escrow Agent provides all parties
to this Agreement notice as provided in Section 11.9 hereof.

"Escrow Agent Statement" means a statement in form and substance
satisfactory to the Authority prepared by the Escrow Agent setting forth in
reasonable particularity the balance of funds in the Reserve Account and the
manner in which such funds are invested.

"Exchange Act" means the United States Securities Exchange Act of
1934, as amended.

"Expanded Resort" means the Mohegan Sun casino after the Expansion is
completed.

"Expansion" means the project to expand the existing Mohegan Sun
Casino as described in the Authority's Offering Memorandum, dated February 24,
1999.

"Final Plans" means, with respect to any particular work or
improvement, Plans which (i) have received final approval from all governmental
authorities required to approve such Plans prior to completion of the work or
improvements; and (ii) contain sufficient specificity to permit the completion
of the work or improvement.

"Financing Documents" means all documentation relating to the
Authority's Credit Facilities (including the Loan Agreement) and the Indentures.

"Financing Obligations" means all obligations relating to or arising
from the Financing Documents.

"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of the Indentures.

"Gaming Regulatory Authority" means any agency, authority, board,
bureau, commission, department, office or instrumentality of any nature
whatsoever of the United States or a foreign government, any state, province or
any city or other political subdivision, whether now or hereafter existing, or
any officer or official thereof, including, without limitation, any division of
the Authority or any other agency with authority to regulate any gaming
operation (or proposed gaming operation) owned, managed or operated by the Tribe
or the Authority.

"guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.

"Holders" means the Holders of the Authority's 8 1/8% Senior Notes due
2006 and the Authority's 8 3/4% Senior Subordinated Notes due 2009 both as
issued, authenticated and

delivered under the respective Indentures. The Holders shall include all Holders
of any or all of the Initial Notes, Definitive Registered Notes or Exchange
Notes (as defined in the Indentures).

"Indentures" means the Indentures, dated the date thereof relating to
the Authority's 8 1/8% Senior Notes due 2006 and the Authority's 8 3/4% Senior
Subordinated Notes due 2009 as amended or supplemented from time to time.

"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.

"Lenders" means all lenders under the Loan Agreement.

"Loan Agreement" means that certain Agreement, dated as of March 3,
1999, by and among the Tribe, the Authority and Bank of America National Trust
and Savings Association and certain Lenders as parties thereto, including any
related notes, guarantees, instruments and agreements executed in connection
therewith, and in each case as amended, modified, renewed, refunded, replaced or
refinanced from time to time.

"Management Board" means the Management Board of the Authority or any
authorized committee of the Management Board of the Authority, as applicable.

"NIGC" means the National Indian Gaming Commission.

"Notes" means the Authority's 8 1/8% Senior Notes due 2006 and the
Authority's 8 3/4% Senior Subordinated Notes due 2009.

"Permitted Liens" has the meaning set forth in the Indentures.

"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof (including any subdivision
or ongoing business of any such entity or substantially all of the assets of any
such entity, subdivision or business).

"Plans" means all drawings, plans and specifications prepared by or on
behalf of the Authority as the same may be amended or supplemented from time to
time, and, if required, submitted to and approved by the appropriate Gaming
Regulatory Authorities, which describe and show the Expansion and the labor and
materials necessary for the construction thereof.

"Project Costs" means all costs of developing, designing,
constructing, equipping and furnishing the Expansion, including all costs
related to land acquisition, professional services, pre-opening costs and
expansion operating capital, provided that all Project Costs shall be allocated
in accordance with GAAP, consistently applied, but excluding any debt service
costs (such as principal, premium or interest on Credit Facilities or the
Notes).

"Reserve Account" means the reserve account established pursuant to
this Agreement.

"Tribal Council" means the nine-member duly elected governing council
of the Tribe.

"Tribe" means the Mohegan Tribe of Indians of Connecticut, a sovereign
tribe recognized by the United States of America pursuant to 25 C.F.R. (S) 83.

"Trustees" means the Persons acting as Trustees under the Indentures
until any successor Trustee shall have become such pursuant to the applicable
provisions of either such Indenture, and thereafter "Trustees" shall mean each
such successor Trustee.

"Vendor" means any third party who is not an Affiliate of the
Authority and who has provided materials or services used in connection with the
completion of the Expanded Resort.

Section 1.2. Rules of Construction.
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Unless the context otherwise requires:

(1) a term has the meaning assigned to it;

(2) "or" is not exclusive;

(3) "including" means including without limitation;

(4) words in the singular include the plural and words in the plural
include the singular; and

(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.

ARTICLE II.

ESTABLISHMENT OF ESCROW

Section 2.1. Appointment of Escrow Agent.
---------------------------

The Tribe and the Authority hereby appoint Escrow Agent, and Escrow
Agent hereby accepts appointment, as escrow agent under the terms and conditions
of this Agreement. By execution and delivery of this Agreement, Escrow Agent
hereby acknowledges its receipt of $40.0 million (as such amounts may be reduced
from time to time, the "Escrow Principal") from the Tribe.

Section 2.2. Establishment of Escrow Account. Concurrently with the
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execution and delivery hereof, Escrow Agent shall establish an account (the
"Reserve Account") in the name of the Escrow Agent at Escrow Agent's office with
the funds to be held in trust and not commingled with any ordinary deposit or
commercial bank account. All funds accepted by the Escrow Agent pursuant to this
Agreement shall be held in the Reserve Account for the benefit of the Authority,
the Administrative Agent and the Trustees subject to the terms and conditions of
this Agreement and

shall also be under the sole dominion and control of such Escrow Agent as agent
for the Authority. Accordingly, all such funds and assets shall not be within
the bankruptcy "estate" (as such term is used in 11 U.S.C. (S) 541) of the
Escrow Agent. All such funds and all earnings accruing from time to time thereon
shall be held in the Reserve Account until disbursed in accordance with the
terms hereof. All interest, dividends or other earnings resulting from the
investment of the Escrow Principal shall not become part of the Escrow Principal
and shall be disbursed to the Tribe pursuant to Section 3.4(b). All funds
contained in such Reserve Account shall be invested in cash or Cash Equivalents
as are specified, from time to time, by the Authority in writing pending
disbursement of such funds pursuant to this Agreement. If no such instructions
are received by the Escrow Agent after request, such funds shall be invested in
Cash Equivalents.

ARTICLE III.

DISBURSEMENTS FROM ESCROW

Section 3.1. Condition to Disbursement. Except as provided in
-------------------------
Sections 3.4, 4.2 and 4.3 hereof, the Escrow Agent shall disburse the Escrow
Principal from the Reserve Account only to the extent and in the manner directed
by the Authority in a written authorization (each, a "Disbursement
Authorization") delivered by the Authority to the Escrow Agent (in the form of
Exhibit A attached hereto). In no event may the Authority deliver a Disbursement
Authorization authorizing and directing the Escrow Agent to disburse an amount
greater than the then remaining Escrow Principal.

Section 3.2. Method of Disbursement. Upon receipt of a Disbursement
----------------------
Authorization as set forth in Section 3.1 above, the Escrow Agent shall disburse
the Escrow Principal from the Reserve Account to the appropriate Vendor as
specified in the Disbursement Authorization. The Escrow Agent shall rely
entirely upon the accuracy of the certifications of the Authority set forth in a
Disbursement Authorization. The Escrow Agent shall be under no duty to inquire
as to the satisfaction of the conditions set forth in Section 4.1 with regard to
any Disbursement Authorization. Such disbursement shall be effected within five
business days of the Escrow Agent's receipt of a Disbursement Authorization.

Section 3.3. Timing; Amount. The Authority shall not request
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disbursement from the Reserve Account more frequently than twice a month.

Section 3.4. Disbursement of Compensation.
----------------------------

(a) Escrow Agent's Compensation. Escrow Agent shall disburse from
---------------------------
the Reserve Account the fees as set forth on Exhibit B attached hereto and made
a part hereof to Escrow Agent as compensation for services to be performed by
Escrow Agent under this Agreement. The Escrow Agent shall be entitled to
disburse and receive such fees without the requirement of obtaining any further
consent or action on the part of the Authority or with respect to the payment.

(b) Earnings on Escrow Principal. Escrow Agent shall disburse to the
-----------------------------
Tribe from the Reserve Account on the last business day of each calendar
quarter, all interest, dividends or other earnings resulting from the investment
of the Escrow Principal. The Tribe shall receive such disbursements without the
requirement of obtaining any further consent or action on the part of the
Authority or any other party.

ARTICLE IV.

CONDITIONS PRECEDENT TO DISBURSEMENT

Section 4.1. Conditions to Disbursements Requested by the Authority.
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The Authority's right to request any disbursements from the Reserve Account
shall be subject to the following conditions:

(a) The Authority has expended at least $500 million towards
Completion of the Expansion in accordance with the Construction Budget
(including at least $300 million pursuant to the terms of the Loan Agreement
unless the Commitment (as defined therein) has then been terminated);

(b) The Authority has certified that it does not have funds available
to cause the Expansion to be Completed in accordance with the Plans;

(c) The Authority has provided the Tribe and the Escrow Agent with
invoices from Vendors and has certified that such invoices are for Project Costs
incurred in accordance with the Construction Budget; and

(d) The Disbursement Request on its face has been completed as to the
information required therein and attachments, if any, are attached.

Section 4.2. Requests for Disbursements by the Tribe. The Tribe may,
---------------------------------------
at any time in its sole discretion by delivering a Disbursement Request in the
form of Exhibit C to the Escrow Agent, request that the Escrow Agent make
disbursements from the Reserve Account consistent with the terms of Sections
3.4(b) and 4.1(c) and (d). In conjunction with such Disbursement Request, the
Tribe shall provide the Escrow Agent with invoices from Vendors and shall
certify that such invoices are for Project Costs incurred in accordance with the
Construction Budget.

Section 4.3. Final Disbursement of Funds Following Operating Date.
----------------------------------------------------
If the Authority provides written certification to the Escrow Agent that (a) the
Expanded Resort is Completed, has commenced operations and the Expanded Resort
continues to be operating as of the date of the certification and (b) funds
remain in the Reserve Account as of the date of the certification then, the
Escrow Agent shall disburse all remaining funds in the Reserve Account to the
Tribe within five business days.

ARTICLE V.

LIMITATION OF LIABILITY

Section 5.1. Limitation of Escrow Agent's Liability. The Escrow
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Agent's responsibility and liability under this Agreement shall be limited as
follows:

(a) the Escrow Agent does not represent, warrant or guarantee to the
Tribe the performance of the Authority, any contractor, subcontractor or
provider of materials or services in connection with construction of the
Expansion;

(b) the Escrow Agent shall have no responsibility to the Authority,
the Tribe, the Administrative Agent, the Trustees or any other party as a
consequence of performance by the

Escrow Agent of its duties hereunder except for any gross negligence or willful
misconduct of the Escrow Agent or failure to account for funds held on deposit;

(c) the Authority shall remain solely responsible for all aspects of
its business and conduct in connection with the Expansion, including, but not
limited to, the quality and suitability of the Plans, the supervision of the
construction work, the qualifications, financial condition and performance of
all architects, engineers, contractors, subcontractors, suppliers, consultants
and property managers, the accuracy of all applications for payment, and the
proper application of all disbursements;

(d) the Escrow Agent is not obligated to supervise, inspect or
inform, the Authority, the Tribe, the Administrative Agent, the Trustees or any
other party or any third party of any aspect of the construction of the
Expansion or any other party to protect against, or to inform the Authority of,
any negligent, faulty, inadequate or defective design or construction of the
Expansion. The Escrow Agent shall have no duties or obligations hereunder
except as expressly set forth herein, shall be responsible only for the
performance of such duties and obligations, shall not be required to take any
action otherwise than in accordance with the terms hereof and shall not be in
any manner liable or responsible for any loss or damage arising by reason of any
act or omission to act by it hereunder or in connection with any of the
transactions contemplated hereby, including, but not limited to, any loss that
may occur by reason of forgery, false representations, the exercise of its
discretion, or any other reason, except for its gross negligence (including but
not limited to its failure to account for funds on deposit) or willful
misconduct.

Section 5.2. Liability of Administrative Agent and Trustees.
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(a) The Administrative Agent and the Trustees shall not be liable to
the Authority or the Tribe for any damages caused by the performance or exercise
of their rights hereunder.

(b) The Administrative Agent and the Trustees shall have no
responsibility to the Authority, the Tribe or Escrow Agent hereunder except for
any gross negligence or willful misconduct of the Administrative Agent or the
Trustees, as the case may be.

ARTICLE VI.

INDEMNITY AND INSURANCE

Section 6.1. Indemnity of Escrow Agent. The Authority and the Tribe
-------------------------
shall indemnify and hold harmless and defend the Escrow Agent and its officers,
directors, agents and employees from and against any and all claims, actions,
obligations, liabilities and expenses, including defense costs, investigative
fees and costs, legal fees, and claims for damages, arising from the Escrow
Agent's performance under this Agreement, except to the extent that such
liability, expense or claim is attributable to the gross negligence or willful
misconduct of the Escrow Agent.

ARTICLE VII.

TERMINATION

(a) This Agreement shall terminate automatically and immediately upon
disbursement of all funds remaining in the Reserve Account; provided, however,
that (i) the agreements and obligations of the Authority and the Tribe under
Section 6.1 and Article XII of this Agreement shall survive termination of this
Agreement or the resignation of the Escrow Agent.

(b) Notwithstanding any foreclosure of any lien of any deed of trust
or security agreement relating to any or all of the real or personal property
secured by such lien, whether by the exercise of the power of sale contained
therein, by an action for judicial foreclosure or by an acceptance of a deed in
lieu of foreclosure, the Tribe and the Authority shall remain bound under this
Agreement.

(c) The Tribe and the Authority shall continue to be liable under
this Agreement and the provisions of this Agreement shall remain in full force
and effect notwithstanding:

(i) Any modification, agreement, or stipulation between the
Authority, the Administrative Agent on behalf of the Lenders, and either of the
Trustees on behalf of the Holders or their respective successors and assigns,
concerning the Financing Documents or the obligations encompassed by them;

(ii) Any modification of or amendments or addenda to the Plans;

(iii) Any Administrative Agent's or Trustees' waiver of or
failure to enforce any of the terms, covenants or conditions
contained in the Financing Documents or in any modification thereof;

(iv) Any discharge or release of the Authority (or any of its
subsidiaries) from any liability with respect to the Financing
Obligations;

(v) Any discharge, release, exchange or subordination of any
real or personal property then held by any Lender as security for the
performance of the Financing Obligations;

(vi) Any additional security taken for the Financing
Obligations, whether real or personal property;

(vii) Any foreclosure or other realization on any security for
the Financing Obligations;

(viii) Any additional loans or financial accommodations to the
Authority; and

(ix) Any claims whatsoever that the Authority or the Tribe
may have against any Vendor.

ARTICLE VIII.

SUBSTITUTION OR RESIGNATION

Section 8.1. Substitution of Escrow Agent or Resignation.
-------------------------------------------

(a) The Tribe or the Authority shall each have the right, upon the
expiration of 30 days following delivery of written notice of substitution to
Escrow Agent, and to the other parties, to cause Escrow Agent to be relieved of
its duties hereunder and to select a substitute escrow agent to serve hereunder.
The Escrow Agent may resign at any time upon 30 days written notice to all
parties hereto. Such resignation shall take effect upon receipt by the Escrow
Agent of an instrument of acceptance executed by a successor escrow agent and
consented to by the Tribe and the Authority. Upon selection of such substitute
escrow agent, the Authority, the Tribe and the substitute escrow agent shall
enter into an agreement substantially identical to this Agreement and,
thereafter, the Escrow Agent shall be relieved of its duties and obligation to
perform hereunder, except that the Escrow Agent shall transfer to the substitute
escrow agent upon request therefor all funds and Cash Equivalents maintained by
the Escrow Agent hereunder and originals of all books, records, plans and other
documents in the Escrow Agent's possession relating to such funds or Cash
Equivalents or this Agreement. If no successor escrow agent is appointed and
executes and delivers to the Escrow Agent an instrument of acceptance within 30
days of the notice of resignation, the Escrow Agent shall deliver all funds and
Cash Equivalents maintained by the Escrow Agent hereunder and originals of all
books, records, plans and other documents in the Escrow Agent's possession
relating to such funds or Cash Equivalents or this Agreement into a court of
competent jurisdiction.

ARTICLE IX.

ESCROW ACCOUNT STATEMENT

Upon the request of the Authority or the Tribe from time to time, the
Escrow Agent shall deliver to the Authority and the Tribe a statement prepared
by the Escrow Agent in a form reasonably satisfactory to the Tribe and the
Authority setting forth with reasonable particularity the balance of funds then
in the Reserve Account and the manner in which such funds are invested;
provided, however, that the Escrow Agent shall not be required to provide such
statements more often than monthly.

ARTICLE X.

NOTICE

The parties hereto irrevocably instruct the Escrow Agent that on the
first date upon which the balance in the Reserve Account is reduced to zero, the
Escrow Agent shall deliver to the Tribe, the Administrative Agent, the Trustees,
and the Authority a notice that the balance in the Reserve Account has been
reduced to zero.

ARTICLE XI.

MISCELLANEOUS

Section 11.1. Waiver. Any party hereto may specifically waive any
------
breach of this Agreement by any other party, but no such waiver shall be deemed
to have been given unless such

waiver is in writing, signed by the waiving party and specifically designates
the breach waived, nor shall any such waiver constitute a continuing waiver of
similar or other breaches.

Section 11.2. Invalidity. If, for any reason whatsoever, any one or
----------
more of the provisions of this Agreement shall be held or deemed to be
inoperative, unenforceable or invalid in a particular case or in all cases, such
circumstances shall not have the effect of rendering any of the other provisions
of this Agreement inoperative, unenforceable or invalid, and the inoperative,
unenforceable or invalid provision shall be construed as if it were written so
as to effectuate, to the maximum extent possible, the parties' intent.

Section 11.3. No Authority. The Escrow Agent shall not have any
------------
authority to, and the Escrow Agent shall not make any warranty or representation
or incur any obligation on behalf of, or in the name of, the Tribe.

Section 11.4. Assignment. This Agreement shall not be assignable by
----------
any of the parties except with the prior written consent of the other parties,
provided that the rights of the Administrative Agent on behalf of the Lenders
and the Trustees on behalf of the Holders are assignable to their successors. In
any event, this Agreement shall inure to and be binding upon the parties and
their successors and permitted assigns. Notwithstanding the foregoing, the
parties hereto understand that the Lenders, pursuant to the terms of the Loan
Agreement, have a security interest in all the assets of the Authority,
including the Authority's rights hereunder and each party hereto consents to
that security interest. It is expressly understood by the parties hereto that in
no circumstances whatsoever shall the Escrow Principal be used to pay charges or
expenses relating to Financing Obligations including, without limitation, any
debt service.

Section 11.5. Benefit. The parties hereto, the Administrative Agent,
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the Trustees, and their respective successors and assigns, but no others, shall
be express third party beneficiaries and entitled to the benefits hereof.
Notwithstanding the foregoing, the rights of the Administrative Agent and the
Trustees as express third party beneficiaries hereunder are limited to the right
to enforce this agreement, pursuant to its terms and the right to consent to any
amendment to this Agreement, as provided in Section 11.8 hereof.

Section 11.6. Time. Time is of the essence of each provision of this
----
Agreement.

Section 11.7. Choice of Law. The existence, validity, construction,
-------------
operation and effect of any and all terms and provisions of this Agreement shall
be determined in accordance with and governed by the substantive laws of the
state of Connecticut, without giving effect to its conflicts of law principles.

Section 11.8. Entire Agreement; Amendments. This Agreement contains
----------------------------
the entire agreement among the parties with respect to the subject matter hereof
and supersedes any and all prior agreements, understandings and commitments,
whether oral or written. This Agreement may be amended only by a writing signed
by duly authorized representatives of all parties who are signatories hereto and
the express written consent of the Administrative Agent, on behalf of the
Lenders and the Trustees on behalf of the Holders.

Section 11.9. Notices. All notices and other communications required
-------
or permitted to be given or made under this Agreement shall be in writing and
shall be deemed to have been duly given and received, regardless of when and
whether received, either: (a) on the day of hand delivery; or (b) on the day
sent, when sent by United States certified mail, postage and certification fee
prepaid, return receipt requested, addressed as follows:

To the Escrow Agent:

Fleet National Bank
000 Xxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Senior Vice President

To the Trustees on behalf of the Holders:

First Union National Bank
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attention: W. Xxxxxxx Xxxxxx
Vice President
Corporate Trust

and: Xxxxxxx & Xxxxxx
00 Xxxxx Xxxxx Xxxxxx - 0xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.

To the Authority:

Xxxxxx X. Xxxxxx
Mohegan Tribal Gaming Authority
0 Xxxxxxx Xxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000

To the Tribe:

Xxxxxx X. Xxxxxx
Mohegan Tribal of Indians of Connecticut
0 Xxxxxxx Xxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000

To the Administrative Agent on behalf of the Lenders:

Xxx Xxxxxxx
Bank of America National Trust and Savings Association

000 Xxxxx Xxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000

or at such other address as the specified entity most recently may have
designated in writing in accordance with this paragraph and others.

Section 11.10. Counterparts. This Agreement may be executed in one
------------
or more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

Section 11.11. Captions. Captions in this Agreement are for
--------
convenience only and shall not be considered or referred to in resolving
questions of interpretation of this Agreement.

Section 11.12. Right to Consult Counsel. The Escrow Agent, may, if
------------------------
it deems necessary or appropriate, consult with and be advised by counsel in
respect of its duties hereunder. The Escrow Agent shall be entitled to rely upon
the advice of its counsel in any action taken in its capacity as the Escrow
Agent hereunder and shall be protected from any liability of any kind for
actions taken in reasonable reliance upon such opinion of counsel. The Authority
agrees to pay all such reasonable counsel fees.

Section 11.13. Disbursement and Escrow Fee. The Escrow Agent shall
---------------------------
receive its respective compensation as set forth in Section 3.4 hereof during
the term of this Agreement, as provided in said Section.

ARTICLE XII.

CONSENT TO SUIT

The Tribe does not consent to the enforcement, levy or other execution
of any judgment for money or other damages against any assets, real or personal,
of the Tribe, except that the Tribe and the Authority each do herewith consent
to the enforcement and execution of any judgment, whether obtained as a result
of judicial, administrative, or arbitrational proceedings, against any assets of
the Authority. Subject to the foregoing, the Tribe and the Authority each does
herewith waive its sovereign immunity from unconsented suit, whether such suit
be brought in law or in equity, or in administrative proceedings or proceedings
in arbitration, to permit the commencement, maintenance, and enforcement of any
action, by any person with standing to maintain an action, to interpret or
enforce the terms of this Agreement, and to enforce and execute any judgment
resulting therefrom against the Authority or the assets of the Authority.
Notwithstanding any other provision of law or canon of construction, the Tribe
and the Authority each intend this waiver to be interpreted liberally to permit
the full litigation of disputes arising under or out of this Agreement. Without
limiting the generality of the foregoing, the Tribe and the Authority waive
their immunity from unconsented suit to permit the maintenance of the following
actions:

(a) Courts. The Tribe and the Authority each waive their immunity
------
from unconsented suit to permit any court of competent jurisdiction to (i)
enforce and interpret the terms

of this Agreement, and award and enforce the award of damages owing as a
consequence of a breach thereof, whether such award is the product of
litigation, administrative proceedings, or arbitration; (ii) determine whether
any consent or approval of the Tribe or the Authority has been improperly
granted or unreasonably withheld; (iii) enforce any judgment prohibiting the
Tribe or the Authority from taking any action, or mandating or obligating the
Tribe and the Authority to take any action, including a judgment compelling the
Tribe and the Authority to submit to binding arbitration; and (iv) adjudicate
any claim under the Indian Civil Rights Act of 1968, 25 U.S.C (S) 1302 (or any
successor statute).

(b) Arbitration. The Tribe and the Authority each waive their
-----------
immunity from unconsented suit to permit arbitrators, appointed and acting under
the commercial arbitration rules of the American Arbitration Association,
whenever and to the extent any agreement to submit a matter to arbitration is
made by the Tribe and the Authority, to (i) enforce and interpret the terms of
this Agreement, and to award and enforce the award of any damages owing as a
consequence thereof; (ii) determine whether any consent or approval of the Tribe
and the Authority has been unreasonably withheld; and (iii) enforce any judgment
prohibiting the Tribe or the Authority from taking any action, or mandating or
obligating the Tribe and the Authority to take any action, including a judgment
compelling the Tribe and the Authority to submit to binding arbitration.

XXXXXXX XXXXX XX XXXXXXX XX XXXXXXXXXXX

By:/s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
Chairman

MOHEGAN TRIBAL GAMING AUTHORITY

By:/s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
Chairman

FLEET NATIONAL BANK, as
Escrow Agent

By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Title: Senior Vice President

EXHIBIT A TO CONSTRUCTION RESERVE DISBURSEMENT AGREEMENT

Form of Authority Request for Disbursement
------------------------------------------

____________, ____

Fleet National Bank
000 Xxxxx Xxxxxx
Xxx Xxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Senior Vice President

Re: The Mohegan Tribal Gaming Authority
of the Mohegan Tribe of Indians of Connecticut
Construction Reserve Disbursement Agreement

Ladies and Gentlemen:

This request is delivered to you pursuant to that certain Construction
Reserve Disbursement Agreement dated March 3, 1999 between and among Fleet
National Bank as Escrow Agent, the Mohegan Tribal Gaming Authority of the
Mohegan Tribe of Indians of Connecticut (the "Authority"), and the Mohegan Tribe
of Indians of Connecticut (the "Tribe"). Capitalized terms used herein shall
have the meanings assigned to such terms in the Construction Reserve
Disbursement Agreement (the "Agreement").

We hereby certify to each of you as follows as contemplated by Article IV
of the above-referenced Agreement:

(1) The Authority has expended at least $500 million towards
Completion of the Expansion in accordance with the Construction Budget
(including at least $300 million pursuant to the terms of the Loan Agreement or
the Commitment (as defined therein) has been terminated);

(2) We do not have funds available to cause the Expansion to be
Completed in accordance with the Plans.

(3) We have provided the Tribe with invoices from Vendors and
certify that such invoices are for Project Costs incurred in accordance with the
Construction Budget.

A-1

The foregoing representations, warranties and certifications are true and
correct and you are entitled to rely on the foregoing in connection with the
requested disbursement.

In accordance with the terms of the Agreement, the Escrow Agent is hereby
authorized and directed to disburse funds from the Escrow Principal in the
amounts and to the Vendors identified by name and address on Schedule A attached
----------
hereto and made a part hereof.

THE MOHEGAN TRIBAL GAMING AUTHORITY

By:
Name:_______________________
Title:

A-2

EXHIBIT B TO CONSTRUCTION RESERVE DISBURSEMENT AGREEMENT

For performance of all duties and responsibilities as Escrow Agent described in
the Construction Reserve Disbursement Agreement dated March 3, 1999 between the
Mohegan Tribe of Indians of Connecticut, the Mohegan Tribal Gaming Authority and
Fleet National Bank, compensation shall be as follows:

Escrow Agent shall distribute to Escrow Agent quarterly, in arrears, from the
Reserve Account, an amount equal to 0.03% of the average principal balance
maintained in the Reserve Account.

B-1

EXHIBIT C TO CONSTRUCTION RESERVE DISBURSEMENT AGREEMENT

Form of Tribe Request for Disbursement
--------------------------------------

____________, ____

Fleet National Bank
000 Xxxxx Xxxxxx
Xxx Xxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Senior Vice President

Re: The Mohegan Tribal Gaming Authority
of the Mohegan Tribe of Indians of Connecticut
Construction Reserve Disbursement Agreement

Ladies and Gentlemen:

This request is delivered to you pursuant to Sections 4.1 and 4.2 of that
certain Construction Reserve Disbursement Agreement dated March 3, 1999 between
and among Fleet National Bank as Escrow Agent, the Mohegan Tribal Gaming
Authority of the Mohegan Tribe of Indians of Connecticut (the "Authority"), and
the Mohegan Tribe of Indians of Connecticut (the "Tribe"). Capitalized terms
used herein shall have the meanings assigned to such terms in the Construction
Reserve Disbursement Agreement (the "Agreement").

We certify that the attached invoices from Vendors are for Project Costs
incurred in accordance with the Construction Budget.

The foregoing certification is true and correct and you are entitled to
rely on the foregoing in connection with the requested disbursement.

THE MOHEGAN TRIBE OF INDIANS OF CONNECTICUT

By:________________________
Name:
Title:

C-1

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