Exhibit 10.4

 Loan Number: 2757521066
UNCONDITIONAL GUARANTY

THIS UNCONDITIONAL GUARANTY (this “Guaranty”) is executed by the undersigned as
of the 17th day of December, 2012.

LAKES ENTERTAINMENT, INC. (the “Guarantor”), hereby requests and authorizes
CENTENNIAL BANK (“Lender”) to extend credit to EVITTS RESORT, LLC (“Borrower”),
an affiliate of the Guarantor, pursuant to the terms and conditions of that
certain Secured Construction Loan Agreement between Borrower and Lender dated as
of even date herewith (as the same may hereafter be amended or otherwise
modified from time to time, the “Secured Construction Loan Agreement”).

It is recognized and agreed that Guarantor owns, either directly or indirectly,
an equity position in the Borrower and will receive substantial financial
consideration, benefit and gain as a result of Guarantor’s execution of this
document.

In consideration of the granting of said financial and credit accommodations by
Lender to Borrower and for other good and valuable consideration, and
recognizing that Lender would not otherwise advance a loan to Borrower pursuant
to the Secured Construction Loan Agreement absent the execution of this
Unconditional Guaranty by Guarantor, Guarantor hereby covenants and agrees with
Lender as follows:

1.           Performance.  Guarantor hereby guarantees the prompt performance
and the punctual payment when the same shall become due and payable (whether at
stated maturity or upon acceleration) of all of Borrower’s obligations,
financial and otherwise, as are set forth and specified in the documents
constituting the Credit Agreement (as defined in the Secured Construction Loan
Agreement), including without limitation all present and future obligations and
indebtedness of Borrower created pursuant to the documents constituting the
Credit Agreement (all such obligations being referred to collectively herein as
the “Obligations”).

Time is of the essence in connection with the performance of Guarantor’s
obligations hereunder.  Payment shall be made in any certified and
readily-available funds which at the time of payment are legal tender in the
United States of America for public and private debts. Guarantor’s obligations
hereunder are unconditional and irrevocable.

2.           Change of Terms.  In such manner, upon such terms and at such times
as Lender deems best and without notice to the undersigned, by agreement between
them, Lender and Borrower may alter, compromise, accelerate, extend or change
the time or manner for the payment or  performance of any Obligations, release
Borrower, by acceptance of a deed in lieu of foreclosure or otherwise, as to all
or any portion of the Obligations, release, substitute or add any one or more
guarantors or endorsers, accept additional or substituted security therefor, or
exchange, release, surrender, realize upon, or subordinate any security therefor
or deal with it in any manner that Lender may determine.  No exercise or
non-exercise by Lender of any right hereby given Lender, no dealing by Lender
with Borrower or any guarantor, endorser or any other person, and no change,
impairment or suspension of any right or remedy of Lender shall in any way
affect any of the obligations of Guarantor hereunder or any security furnished
by Guarantor or give Guarantor any recourse against Lender.
 
 
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Loan Number: 2757521066

3.           Continuing Guaranty.  This is a continuing guaranty relating to the
Obligations.

4.           All Liability Included.  The Obligations include without limit all
liability of the Borrower to the Lender whether now or hereafter incurred under
the Credit Agreement and any other document executed by Borrower in connection
therewith.  Termination of this guaranty shall be effective only as to that
portion of the Obligations incurred after written notice of termination has been
received by an officer of Lender, and this guaranty shall remain in full force
and effect as to all Obligations incurred before that time including loan
commitments.  Regardless of when a renewal, extension or pretermination of any
Obligations hereby occurs (with or without adjustment of interest rate or other
terms), such Obligations are deemed to have been incurred prior to termination
to the extent of the renewal or extension and to be fully covered by this
guaranty.

5.           Security Interest.  In addition to all liens and rights of setoff
given to Lender by law against any property of Borrower or of Guarantor, Lender
shall have a general lien on and security interest in and a right of setoff
against all property of Guarantor now or hereafter in the physical possession of
or on deposit with Lender whether held in a general or special account, on
deposit or for safekeeping or otherwise.  Each such lien, security interest and
right of setoff may be enforced or exercised without demand upon or notice to
Guarantor (unless such notice or demand is required by statute), shall continue
in full force unless specifically waived or released by Lender in writing and
shall not be deemed waived by any conduct of Lender, by any failure of Lender to
exercise any such right of setoff or to enforce any such lien or security
interest or by any neglect or delay in so doing.

6.           Consent of Lender.  By accepting this Guaranty, Lender, as a party
to that certain Secured Line of Credit Loan Agreement dated as of October 28,
2008 between Lender (f/k/a First State Bank) and Guarantor (as amended, the
“Existing Loan Agreement”), hereby consents to the execution, delivery and
performance by Borrower and Guarantor of the documents constituting the Credit
Agreement  (including without limitation, with respect to Guarantor, this
Guaranty and the Mortgage, as defined in the Secured Construction Loan
Agreement) and hereby agrees that, notwithstanding anything to the contrary in
the Existing Loan Agreement or in any instrument, agreement or other document
securing the obligations or indebtedness of Guarantor under the Existing Loan
Agreement or otherwise executed in connection with the Existing Loan Agreement,
arising out of the transaction contemplated thereby or otherwise relating
thereto (collectively, “Existing Loan Documents”), the execution, delivery and
performance by Borrower and Guarantor of the Credit Agreement shall not be
deemed to be a breach of or otherwise a default under the terms of any of the
Existing Loan Documents, any such breach or default hereby being waived by
Lender.

7.           Waiver.  Guarantor hereby waives and agrees not to assert or take
advantage of:

 
(a)
Any right to require Lender to proceed against Borrower or any other person or
to proceed against or exhaust any security held by Lender at any time or to
pursue any other remedy in Lender’s power before proceeding against Guarantor;

 
 
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Loan Number: 2757521066
 
 
(b)
The defense of the statute of limitations in any action hereunder or in any
action for the collection of the Credit Agreement or the performance of any
other obligation hereby guaranteed;

 
(c)
Any defense that may arise by reason of the incapacity, illegality, lack of
authority, death or disability of any other person or persons or the failure of
Lender to file or enforce a claim against the estate (in administration,
bankruptcy or any other proceeding) of any other person or persons;

 
(d)
Demand, protest and notice of any kind including without limiting the generality
of the foregoing, notice of the existence, creation or incurring of any new or
additional indebtedness or obligation or of any action or non-action on the part
of Borrower, Lender, and endorser or creditor of Borrower or Guarantor or on the
part of any other person whomsoever under this or any other instrument in
connection with any obligation or evidence of indebtedness held by Lender as
collateral or in connection with the Credit Agreement or any other obligation
hereby guaranteed;

 
(e)
Any defense based upon an election of remedies by Lender, including without
limitation an election to proceed by non-judicial rather than judicial
foreclosure, which destroys or otherwise impairs the subrogation rights of
Guarantor or the rights of Guarantor to proceed against Borrower for
reimbursement, or both; and

 
(f)
Any duty on the part of Lender to disclose to Guarantor any facts Lender may now
or hereafter know about Borrower, regardless of whether Lender has reasons to
believe that any such facts materially increase the risk beyond that which
Guarantor intends to assume or has reason to believe that such facts are unknown
to Guarantor or has a reasonable opportunity to communicate such facts to
Guarantor, it being understood and agreed that Guarantor is fully responsible
and has the means available for being and keeping informed of the financial
condition of Borrower and of all circumstances bearing on the risk of
non-payment of the Credit Agreement or nonperformance of any other obligation
hereby guaranteed.

The foregoing is not to be construed as a waiver of any notice requirement
explicitly set forth in the Credit Agreement or related documents.

8.           Guarantor Information.  Guarantor warrants to Lender that it has
adequate means to obtain from Borrower on a continuing basis, information
concerning the financial condition of Borrower and that it is not relying on
Lender to provide such information either now or in the future. Guarantor shall
supply to Lender such information as it makes publicly available to its
shareholders on each anniversary date of this Credit Agreement and otherwise as
reasonably requested by Lender. Guarantor covenants and agrees that it will
always be fully informed regarding the status of the Credit Agreement, all
advances of principal under the Credit Agreement, the in-balance or
out-of-balance nature of the Credit Agreement, and all other financial and other
aspects of every nature pertaining to the Credit Agreement.  Lender will possess
no obligation of any nature to provide Guarantor with any information regarding
the status of the Credit Agreement.
 
 
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Loan Number: 2757521066

 
9.           Subrogation.  Unless and until the Obligations have been paid in
full, (a) Guarantor shall have no right of subrogation and waives any right to
enforce any remedy that Lender now has or may hereafter have against Borrower
and any benefit of, and any right to participate in, any security now or
hereafter held by Lender, (b)  Guarantor shall not be a creditor with respect to
this Guaranty in any bankruptcy proceeding by or against Borrower, but instead
Guarantor shall be an “entity” under the bankruptcy code in any such proceeding,
and (c) Guarantor shall have neither a contingent nor a non-contingent claim
against Borrower under this Guaranty.

10.           Subordination.  Except as otherwise provided in this Paragraph,
all existing and future indebtedness of Borrower to Guarantor or to any person
owned in whole or in part by Guarantor and, if Borrower is a partnership, the
right of Guarantor to cause or permit any person owned in whole or in part by
Guarantor to withdraw any capital invested by such person in Borrower, is hereby
subordinated to the Obligations and, following the occurrence and during the
continuance of an Event of Default (as defined in the Secured Construction Loan
Agreement), without the prior written consent of Lender, such subordinated
indebtedness shall not be paid or withdrawn in whole or in part nor will
Guarantor cause or permit any person owned in whole or in part by Guarantor to
accept any payment of or on account of any such indebtedness or as a withdrawal
of capital while this Guaranty is in effect.  At Lender’s request, Guarantor
shall cause Borrower to pay to Lender all or any part of such subordinated
indebtedness and any capital which any such person owned by any Guarantor is
entitled to withdraw.  Each such payment by Borrower in violation of this
Guaranty following the occurrence and during the continuance of an Event of
Default shall be received by the person to whom paid in trust for Lender, and
Guarantor shall cause the same to be paid to Lender immediately on account of
the indebtedness.

11.           Bankruptcy.  Except as provided in Paragraph 8 above, Guarantor
shall file in any bankruptcy or other proceeding in which the filing of claims
is required by law, all claims which such Guarantor may have against Borrower
relating to any indebtedness of Borrower to such Guarantor and will assign to
Lender all rights of such Guarantor thereunder.  If a Guarantor does not file
any such claim, Lender, as attorney-in-fact for Guarantor, is hereby authorized
to do so in the name of Guarantor or, in Lender’s discretion, to assign the
claim to a nominee and to cause proof of claim to be filed in the name of
Lender’s nominee.  In all such cases, whether in administration, bankruptcy or
otherwise, the person or persons authorized to pay such claim shall pay to
Lender the full amount hereof and, to the full extent necessary for that
purpose, each Guarantor hereby assigns to Lender all of such Guarantor’s rights
to any such payment or distributions to which such Guarantor would otherwise be
entitled.

12.           Application of Payment.  With or without notice to Guarantor,
Lender, in Lender’s sole discretion and at any time and from time to time and in
such manner and upon such terms as Lender deems fit, may apply any or all
payments or recoveries from Borrower or from any other guarantor or endorser
under any other instrument or realized from any security, in such manner and
order of priority as Lender may determine, to any of the Obligations.
 
 
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Loan Number: 2757521066

13.           Cumulative Rights.  The amount of Guarantor’s liability and all
rights, powers and remedies of Lender hereunder shall be cumulative and not
alternative and such rights, powers and remedies shall be in addition to all
rights, powers and remedies given to Lender by law.  This Guaranty is in
addition to and exclusive of the guarantee of any other guarantor of any of the
Obligations.

14.           Independent Obligations.  The obligations of Guarantor hereunder
are independent of the Obligations and, in the event of any default hereunder, a
separate action or actions may be brought and prosecuted against Guarantor
whether or not Borrower is joined therein or a separate action or actions are
brought against Borrower.  In this regard, Guarantor waives any right to require
Lender to (a) proceed against Borrower, (b) proceed against or exhaust any
security held by Lender for payment of the Obligations, or (c) pursue any other
remedy that Lender has or to which it may be entitled.  Without limiting the
foregoing, Guarantor waives any necessity or requirement, substantive or
procedural, that an action previously be commenced or a judgment previously be
rendered against Borrower or any other person or entity or that any other person
or entity be joined in such cause or that a separate action be brought against
Borrower or any other person or entity.  Lender may maintain successive actions
for other defaults.  Lender’s rights hereunder shall not be exhausted by its
exercise of any of its rights or remedies or by any such action or by any number
of successive actions until and unless all Obligations have been paid in full
and fully performed.

15.           Costs and Fees.  Guarantor shall pay to Lender, promptly upon
demand, reasonable attorneys’ fees and all costs and other expenses that Lender
expends or incurs in enforcing this Guaranty against such Guarantor whether or
not suit is filed, expressly including without limitation all costs, attorneys’
fees and expenses incurred by Lender in connection with any insolvency,
bankruptcy, reorganization, arrangement or similar proceedings involving such
Guarantor that in any way affect the exercise by Lender of its rights and
remedies hereunder.

16.           Severability.  Should any one or more provisions of this Guaranty
be determined to be illegal or unenforceable, all other provisions shall
nevertheless be effective.

17.           Binding Effect.  This Guaranty shall inure to the benefit of
Lender, its successors and assigns, including the assignees of any indebtedness
hereby guaranteed, and shall bind the heirs, executors, administrators,
successors and assigns of a Guarantor.  This Guaranty may be assigned by Lender
with respect to all or any portion of the Obligations, and when so assigned
Guarantor shall be liable under this Guaranty to the assignee(s) of the
portion(s) of the Obligations so assigned without in any manner affecting the
liability of Guarantor hereunder to Lender with respect to any portion of the
Obligations retained by Lender.

18.           Expiration.  Upon the full performance and payment in full to
Lender of the Obligations, this Guaranty shall be of no further force or effect.

19.           Reasonableness.  Guarantor warrants and agrees that each of the
waivers set forth in this Guaranty are made with Guarantor’s full knowledge of
its significance and consequences, and that under the circumstances, the waivers
are reasonable and not contrary to public policy or law.  No provisions of this
Guaranty or right of Lender hereunder can be waived nor can Guarantor be
released from its obligations hereunder except by a writing duly executed by an
authorized officer of Lender.
 
 
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Loan Number: 2757521066

20.           Terminology.  When the context and construction so require, all
words used in the singular herein shall be deemed to have been used in the
plural and the masculine shall include the feminine and neuter and vice
versa.  The word “person” as used herein shall include any individual, company,
firm, association, partnership, corporation, trust or other legal entity of any
kind whatsoever.

21.           Exclusive Statement.  This writing is intended by the parties as a
final expression of this Unconditional Guaranty and is also intended as a
complete and exclusive statement of the terms hereof.  No course of dealing,
course of performance or trade usage, and no parol evidence of any nature shall
be used to supplement or modify any terms.  Nor are there any conditions to the
full effectiveness of this agreement.

22.           Joint and Several Liability.  If two or more persons are signing
this Guaranty as Guarantor, then all such persons shall be jointly and severally
liable for the obligations of Guarantor hereunder.

23.           Waiver of Change.  The Guarantor hereby expressly waives notice of
(a) any renewals or extensions of time for payment of the Obligations, (b) any
changes in the terms of the Obligations including increase or decrease in
installment payments or any interest rate adjustments, or (c) any other change
with respect to the Obligations including a change in the business structure of
the Borrower.

24.           Dealing with Security Interest.  The undersigned Guarantor hereby
expressly waives (a) surrender, release, exchange, substitution, dealing with or
taking any additional collateral, (b) abstaining from taking advantage of or
realizing upon any security interest, or other guarantee, (c) any impairment of
collateral by Lender including but not limited to, failure to perfect a security
interest in the collateral, and (d) any impairment by Lender of Guarantor’s
rights of recourse against other parties.

25.           Unconditional Liability.  Each of the persons who have signed this
Unconditional Guaranty has unconditionally delivered it to Lender, and failure
to sign this or any other guaranty by any other person shall not discharge the
liability of any signer.  The unconditional liability of the signer applies
whether signer is jointly and severally liable for the entire amount of the
debt, or for only a pro rata portion.  The release of one or more guarantors
shall not release to any extent, any other guarantors.

26.           Errors and Omissions.  The Guarantor hereby waives all errors and
omissions in connection with Lender’s administration of the Obligations, except
behavior which amounts to bad faith or gross negligence.
 
 
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Loan Number: 2757521066

27.           Acts and Omissions.  Without in any way limiting the foregoing,
the Guarantor hereby waives any other act or omission of Lender (except acts or
omissions due to the gross negligence of Lender or bad faith) which changes the
scope of the Guarantor’s risk.

28.           Remedies.  As a condition of the payment or performance by
Guarantor, Lender is not required to enforce any remedies against Borrower or
Guarantor or any other party liable to Lender on account of the
Obligations.  Nor is Lender required to seek to enforce or resort to any
remedies with respect to any security interest, lien or encumbrance to Lender by
the Borrower or any other party.

29.           Enforceability.  This Unconditional Guaranty remains fully
enforceable irrespective of any defenses which Borrower may assert on the
underlying debt, including but not limited to failure of consideration, breach
of warranty, payment, statute of frauds, statute of limitations, accord and
satisfaction, and usury.

30.           Liability for Full Amount.  The Guarantor agrees that, if at any
time all or any part of any payment previously applied by Lender to any of the
guaranteed debt must be returned by Lender for any reason, whether by court
order, or settlement, the Guarantor remains liable for the full amount returned
as if such amount had never been received by Lender notwithstanding any
termination of this Guaranty or cancellation of any note or other agreement
evidencing the Obligations.

31.           Governing Law.  This Guaranty shall be governed by and construed
in accordance with the laws of the State of Arkansas.  Except as provided in any
other written agreement now or at any time hereafter in force between Lender and
Guarantor, this Guaranty shall constitute the entire agreement of Guarantor with
Lender with respect to the subject matter hereof, and no representation,
understanding, promise or condition concerning the subject matter hereof shall
be binding upon Lender unless expressed herein.  Guarantor does hereby
irrevocably consent to the exclusive jurisdiction of the court of the State of
Arkansas with respect to any action or proceedings arising between the parties
and expressly covenant and agree that the exclusive jurisdiction for all
disputes and enforcement actions arising hereunder shall occur in Faulkner
County, Arkansas.

32.           JURY WAIVER.  GUARANTOR AND LENDER EACH HEREBY WAIVES ITS RIGHT TO
A JURY TRIAL IN THE EVENT OF ANY DISPUTE OR LITIGATION ARISING HEREUNDER OR
UNDER ANY RELATED DOCUMENTS EXECUTED IN CONNECTION HEREWITH.

33.           Multiple Counterpart Execution.  It is expressly agreed and
understood that this document is being executed in multiple counterparts and
with multiple signature pages and that all signature pages, when attached to and
assembled with this document, shall constitute and comprise a single document
that is enforceable against all parties on all signature pages in accordance
with this document’s terms.

34.           Notices.  All notices or other written communications hereunder
shall be deemed to have been properly given (a) upon delivery, if delivered in
person or by facsimile transmission with receipt acknowledged by the recipient
thereof, (b) one (1) Business Day (defined below) after having been deposited
for overnight delivery with any reputable overnight courier service, or (c)
three (3) Business Days after having been deposited in any post office or mail
depository regularly maintained by the U.S. Postal Service and sent by
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
 
 
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Loan Number: 2757521066
 
If to Guarantors:

Lakes Entertainment, Inc.
Attn:  Timothy J. Cope, President
130 Cheshire Lane, Suite 101
Minnetonka, MN 55305

With a copy to:

Lakes Entertainment, Inc.
Attn:  Damon Schramm, Esq., General Counsel
130 Cheshire Lane, Suite 101
Minnetonka, MN 55305

And to:

Gray Plant Mooty
Attn: David M. Morehouse
500 IDS Center
80 South Eighth Street
Minneapolis, MN 55402

If to Lender:
CENTENNIAL BANK
Attn:  Randy Crowell
P.O. Box 966
Conway Arkansas 72033
Facsimile: 501-328-4650
With a copy to:
GILL RAGON OWEN, P.A.
Attn:  Daniel Goodwin
425 West Capitol Avenue, Suite 3801
Little Rock, Arkansas  72201
Fax: (501) 372-3359

or addressed as such party may from time to time designate by written notice to
the other parties.
 
 
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Loan Number: 2757521066

Either party by notice to the other may designate additional or different
addresses for subsequent notices or communications.

For purposes of this Subsection, “Business Day” shall mean a day on which
commercial banks are authorized to conduct business or Lender is open for
business in the State of Arkansas.

35.           Changes to Guarantor. Without the prior written consent of Lender,
Guarantor shall not: amend its organizational or governing documents in a manner
that materially adversely affects Lender’s rights hereunder; dissolve; or fail
to remain in good standing and authorized to do business in all jurisdictions
where such standing or authorization is required with respect to Guarantor and
where the failure to do so would have a material adverse impact on Guarantor or
its assets or operations.

[The remainder of this page intentionally left blank;
signatures appear on next page.]
 
 
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Loan Number: 2757521066

[Signature Page To Unconditional Guaranty]

THIS UNCONDITIONAL GUARANTY is executed on the date set forth in the preface.

GUARANTOR:

LAKES ENTERTAINMENT, INC.
By: __/s/ Damon Schramm____________
Title: __VP-General Counsel__________

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