Document:

exv10w1

Exhibit 10.1

Execution Copy

LIMITED LIABILITY COMPANY AGREEMENT

OF

KANSAS GAMING PARTNERS LLC

INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE AND ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED BY SUCH ACT AND SUCH LAWS.

 

INTERESTS ARE ALSO SUBJECT TO CONTRACTUAL RESTRICTIONS ON TRANSFER.

 

 

LIMITED LIABILITY COMPANY AGREEMENT

OF KANSAS GAMING PARTNERS LLC

     THIS LIMITED LIABILITY COMPANY AGREEMENT is entered into and shall be effective as of the
24th day of September, 2009, and is made by and among Kansas Gaming Holdings LLC, a
Delaware limited liability company (“KGH”), CVG Kansas Gaming LLC, a Delaware limited liability
company (“Clairvest”), and Lakes Kansas Casino Management, LLC, a Minnesota limited liability
company (“Lakes” and with KGH and Clairvest, each a “Member” and, collectively, the “Members”), and
each other person who becomes a Member from time to time. All capitalized terms not otherwise
defined herein shall have the meaning set forth for such terms in
Appendix I.

RECITALS

     WHEREAS, Kansas Gaming Partners LLC (the “Company”) was formed as a Delaware limited liability
company pursuant to the filing of the Certificate in the office of the Secretary of State of the
State of Delaware on September 24, 2009;

     WHEREAS, on the Effective Date, the Company entered into a contribution agreement pursuant to
which, among other things, KGH contributed all of the membership interests in Chisholm Creek Casino
Resort, LLC, a Delaware limited liability company (“Chisholm”), to the Company, such that Chisholm
is a wholly owned Subsidiary of the Company;

     WHEREAS, the Members by this document intend to establish the operating rules by which the
Company is to be governed; and

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Members agree as follows:

SECTION 1

THE COMPANY

     1.1 Formation; Limited Liability Company Agreement. The Company was formed as a limited
liability company under and pursuant to the provisions of the Act by filing the Certificate with
the Secretary of State, State of Delaware on September 24, 2009. The fact that the Certificate is
on file in the office of the Secretary of State, State of Delaware, shall constitute notice that
the Company is a limited liability company. Simultaneously with the execution of this Agreement,
the Members are admitted as members of the Company. Subject to Section 8 and the other terms
hereof, by execution of an amendment hereto, or a joinder agreement, additional persons may be
admitted as Members and the Capital Contribution made shall be as set forth in the amendment, or,
if appropriate, such joinder agreement. The rights and liabilities of the Members shall be as
provided under the Act, the Certificate and this Agreement.

     1.2 Name. The name of the Company is “Kansas Gaming Partners LLC” and all business of the
Company shall be conducted in such name. The Board may change the name of the Company upon ten (10)
Business Days notice to the Members.

 

 

     1.3 Purpose; Powers.

          (a) The purpose of the Company is to operate the Business.

          (b) The Company has the power to do any and all acts necessary, appropriate, proper,
advisable, incidental or convenient to or in furtherance of the purposes of the Company set forth
in Section 1.3(a) hereof.

     1.4 Principal Place of Business. The principal place of business of the Company shall be
determined by the Board. The Board may change the principal place of business of the Company to any
other place within or without the State of Delaware upon ten (10) Business Days notice to the
Members. The registered office of the Company in the State of Delaware initially is located at the
address set forth in the Certificate.

     1.5 Term. The term of the Company commenced on the date the Certificate was filed in the
office of the Secretary of State of the State of Delaware in accordance with the Act and shall
continue perpetually until the winding up and liquidation of the Company and its business is
completed following a Dissolution Event, as provided in Section 9 hereof.

     1.6 Title to Property. All Property owned by the Company shall be owned by the Company (or a
Subsidiary of the Company) as an entity and no Member shall have any ownership interest in such
Property in its individual name, and each Member’s interest in the Company shall be personal
property for all purposes. At all times after the Effective Date, the Company shall hold title to
all of its Property in the name of the Company and not in the name of any Member.

SECTION 2

CAPITAL CONTRIBUTIONS

     2.1 Initial Capital Contribution. Each of the Members has made an initial Capital Contribution
on or prior to the Effective Date in the amount set forth opposite
its name on Appendix II. The
Members hereby agree that no Member shall be entitled to credit for making any Capital Contribution
or other expenditure on or prior to the Effective Date except as set
forth on Appendix II.

     2.2 Subsequent Fundings; Capital Commitments.

          (a) In the event it is determined by the Board in the Board’s sole discretion that funds in
excess of the initial Capital Contributions are required (x) in connection with any of the purposes
set forth in Section 1.3, (y) to pay for fees, costs or expenses payable by the Company or its
Subsidiaries pursuant to this Agreement or (z) otherwise to meet the Company’s then-existing
obligations, then:

               (i) The Board may make a written request (a “Call Notice”) of each Member for such Member’s
pro rata portion of any such additional funds, as determined in accordance with this Section
2.2(a). Notwithstanding the foregoing, it is understood and agreed that the Members shall cause
their Voting Representatives to the Board not to withhold or delay a Call Notice prior to the
Members reaching their Capital Commitments for the purpose of

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obtaining any concession or other benefit from the other Members. Any such Call Notice shall set
forth (x) the use(s) for the proceeds of the capital call, (y) the total amount of the capital call
for all Members and such Member’s pro rata portion and (z) the date upon which such Capital
Contribution is to be paid to the Company by the Members, which date shall be no less than 21 days
with respect to any Call Notice for any Capital Contribution in excess of the Capital Commitment
for such Member.

               (ii) After the initial Capital Contributions set forth in Section 2.1 have been funded and
until the time any adjustment of the Capital Commitments is made pursuant to Sections 2.2(b)(ii) or
2.2(b)(iii), Capital Contributions in response to a Call Notice shall be made by each of the
Members (x) first, in the ratio of the amounts necessary to bring the Members’ respective Net
Notional Capital Contributions into the same ratio as (or as close as possible to) their respective
Percentage Interests (until such balancing has first been achieved) and (y) from and after the time
the Members’ respective Net Notional Capital Contributions have first been brought into the same
ratio as their respective Percentage Interests, in the ratio of the Members’ respective Percentage
Interests.

               (iii) Notwithstanding anything to the contrary contained in this Agreement, in the event that
(x) Distributions (other than Distributions of the Privilege Fee following a Licensing Withdrawal)
are about to be made by the Company to the Members, (y) the Capital Commitments and Percentage
Interests have not been reset in accordance with Sections 2.2(b)(ii) or 2.2(b)(iii), and (z) the
Members’ respective Net Notional Capital Contributions as of the date of such Distributions have
never been in the ratio of their respective Percentage Interests, then prior to making such
Distributions, the Board shall be required to issue a Call Notice requiring any Member whose Net
Notional Contribution Percentage is less than such Member’s Percentage Interests to make a Capital
Contribution (a “Catch-Up Contribution”) and the Catch-Up Contributions shall be distributed to any
Member whose Net Notional Contribution Percentage exceeds its Percentage Interests (a “Catch-Up
Distribution”). Such Catch-Up Contributions and Catch-Up Distributions shall be in the amounts
necessary to bring the Members’ respective Net Notional Capital Contributions into the ratio of
their respective Percentage Interests as amended. Any Member required to make a Catch-Up
Contribution pursuant to this Section 2.2(a)(iii) may elect by providing written notice of such
election to each of the Members to instead have the amount of such Catch-Up Contribution offset
against Distributions it would otherwise be entitled to receive on or about such date in favor of
the Member or Members entitled to receive a Catch-Up Distribution.

          (b) Notwithstanding anything to the contrary contained in this Agreement:

               (i) Subject to Sections 2.2(b)(ii), 2.2(b)(iii) and 2.2(b)(iv) hereof, (x) no Member shall be
required to make any Capital Contribution in excess of the Capital Commitment for such Member set
forth on Appendix II, (y) Capital Contributions called by the Board in excess of Capital
Commitments are voluntary and (z) the Capital Commitment of a Member may not be altered without
such Member’s prior written consent. No Member shall be required to make a Capital Contribution
except as provided in this Section 2.

               (ii) Notwithstanding Section 2.2(b)(i) hereof, the Board shall have the right prior to April
15, 2010 to amend the Capital Commitments of the Members based on the

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Estimated Total Equity at the time of such amendment in accordance with the Commitment Amendment
Rules. Any such amendment shall also amend the Percentage Interests to be in the ratio of the
revised Capital Commitments (subject to Post-Conversion Adjustment). Any amendment made pursuant
to this Section 2.2(b)(ii) shall be deemed an amendment to this Agreement retroactive to the
Effective Date as if included in this Agreement on the Effective Date, and the Board shall prepare
and attach a substitute Appendix II and provide each Member with a copy thereof. Notwithstanding
Section 2.2(a)(ii) hereof, Capital Contributions in response to a Call Notice after any such
amendment shall be made by each of the Members (x) first, in the ratio of the amounts necessary to
bring the Members’ respective Net Notional Capital Contributions into the ratio of (or as close as
possible to) their respective Percentage Interests as amended in accordance with this Section
2.2(b)(ii) (until such balancing has first been achieved) and (y) from and after the time the
Members’ respective Net Notional Capital Contributions have first been brought into the same ratio
as their respective Percentage Interests as amended in accordance with this Section 2.2(b)(ii), in
the ratio of the Members’ respective Percentage Interests as so amended.

               (iii) It is anticipated that the Board will have all information necessary to calculate the
final Estimated Total Equity and to make final adjustments, if any, in connection with Section
2.2(b)(ii) on or prior to April 15, 2010. If, however, subsequent to such date but prior to April
15, 2011, the Board determines that the assumptions on which such prior determination was based are
no longer accurate, then notwithstanding Section 2.2(b)(i) hereof, the Board shall have the further
right until April 15, 2011 to amend the Capital Commitments of the Members based on the Estimated
Total Equity at the time of such amendment in accordance with the Commitment Amendment Rules. Any
such amendment shall also amend the Percentage Interests to be in the ratio of the revised Capital
Commitments (subject to Post-Conversion Adjustment). Any amendment made pursuant to this Section
2.2(b)(iii) shall be deemed an amendment to this Agreement retroactive to January 1, 2010 as if
included in this Agreement on January 1, 2010, and the Board shall prepare and attach a substitute
Appendix II and provide each Member with a copy thereof. Notwithstanding Section 2.2(a)(ii)
hereof, Capital Contributions in response to a Call Notice after any such amendment shall be made
by each of the Members (x) first, in the ratio of the amounts necessary to bring the Members’
respective Net Notional Capital Contributions into the ratio of (or as close as possible to) their
respective Percentage Interests as amended in accordance with this Section 2.2(b)(iii) (until such
balancing has first been achieved) and (y) from and after the time the Members’ respective Net
Notional Capital Contributions have first been brought into the same ratio as their respective
Percentage Interests as amended in accordance with this Section 2.2(b)(iii), in the ratio of the
Members’ respective Percentage Interests as so amended.

               (iv) Notwithstanding anything to the contrary contained in this Agreement, in the event that
(x) an amendment has been made pursuant to Section 2.2(b)(ii) and/or Section 2.2(b)(iii), (y) the
Board determines in its reasonable discretion at a time after such amendment that no further
Capital Contributions will be needed and (z) the Members’ respective Net Notional Capital
Contributions as of the date of such determination are not in the ratio of their respective
Percentage Interests as amended by Section 2.2(b)(ii) and/or Section 2.2(b)(iii), then the Board
may issue a Call Notice requiring any Member whose Net Notional Contribution Percentage is less
than such Member’s Percentage Interests to make a Catch-Up Contribution and a corresponding
Catch-Up Distribution shall be made to any Member whose

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Net Notional Contribution Percentage exceeds its Percentage Interests. Such Catch-Up Contributions
and Catch-Up Distributions shall be in the amounts necessary to bring the Members’ respective Net
Notional Capital Contributions into the ratio of their respective Percentage Interests as amended.

               (v) In the event of any adjustment of the Percentage Interests as a result of the operation of
the provisions of this Section 2.2(b) that occurs after a Contribution Loan has been converted in
accordance with Section 2.3(b), the Capital Accounts of the Members shall be readjusted to be
allocated amongst the Members such that (x) if the Members made the Capital Contributions necessary
to bring the Members’ respective Net Notional Capital Contributions into the ratio of their
respective (adjusted) Percentage Interests, then (y) the Capital Accounts would be allocated
amongst the Members in the ratio of their respective (adjusted) Percentage Interests.

          (c) The Members acknowledge that the adjustment of Capital Commitments and Percentage
Interests pursuant to Sections 2.2(b)(ii) or 2.2(b)(iii) and the making of Catch-Up Contributions
and Catch-Up Distributions pursuant to Sections 2.2(a)(iii) and 2.2(b)(iv) shall not trigger any
alteration of the governance of the Company. Notwithstanding the foregoing, (A) the failure of any
Member to make (x) a Catch-Up Contribution required pursuant to Section 2.2(a)(iii) or 2.2(b)(iv)
or (b) any Capital Contribution required pursuant to Section 2.2(b) shall be subject to the
provisions of Sections 2.3 and 4.1(g) and (B) if, as a result of a Member’s failure to timely make
a Catch-Up Contribution, another Member does not timely receive a Catch-Up Distribution to which
such Member is entitled, the Member that was entitled to receive the Catch-Up Distribution shall be
treated as if it received such Catch-Up Distribution and re-contributed such amount in respect of
the unfunded Catch-Up Contribution as a Funding Member funding a Contribution Loan in respect of an
Unfunded Capital Contribution.

     2.3 Member Loans for Failure to Fund Capital Contributions.

          (a) If any Member shall fail to timely make a Capital Contribution pursuant to Section 2.2
(such Member hereinafter referred to as a “Non-Funding Member” and any such unfunded amount by a
Non-Funding Member hereinafter referred to as the “Unfunded Capital Contribution”) and such failure
is not cured within ten (10) days of the due date for such Capital Contribution (as such due date
shall be set forth in the applicable Call Notice and for purposes hereof the tenth (10th) day
following such due date, the “Determination Date”), then:

               (i) Any other Member who is not a Non-Funding Member (each a “Funding Member”) may fund all or
part of such Funding Member’s pro-rata portion (which shall be determined by calculating the
percentage obtained by dividing any such Funding Member’s Percentage Interest (expressed as a
decimal) by the aggregate sum of all Funding Members’ Percentage Interests (expressed as a
decimal)) of such Unfunded Capital Contribution by providing written notice to the Board (a
“Funding Notice”) within ten (10) days after the Determination Date (the “Determination Period”);
provided that if both (x) the Capital Commitments have been adjusted pursuant to Section 2.2(b) and
the Estimated Total Equity has been determined to be less than $100 million and (y) either KGH or
Clairvest (but not both) is a Non-Funding Member, then solely Clairvest or KGH (whichever is not
the Non-Funding Member) may fund all or part of such Unfunded Capital Contribution by providing a
Funding

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Notice within the Determination Period. All such funding shall be complete on or prior to the fifth
(5th) Business Day following the expiration of the Determination Period (the “Funding
Deadline”).

               (ii) In the event any Funding Member chooses to fund less than all of the portion of an
Unfunded Capital Contribution that such Funding Member is entitled to fund pursuant to Section
2.3(a)(i), each of the other Funding Members (if any) shall have the right, on a pro-rata basis
(which shall be determined by calculating the percentage obtained by dividing any such Funding
Member’s Percentage Interest (expressed as a decimal) by the aggregate sum of all Funding Members’
(other than the Funding Member which did not fund its complete pro-rata share of the Unfunded
Capital Contribution) Percentage Interests (expressed as a decimal)), to fund such remaining
Unfunded Capital Contribution until either (x) all of such Unfunded Capital Contribution is funded
or (y) each of the Funding Member(s) no longer desires to fund any remaining portion of such
Unfunded Capital Contribution. The Board shall provide the Funding Member(s) (other than the
Funding Member which did not fund the Unfunded Capital Contribution) written notice (each an
“Additional Funding Notice”) of the right to fund the Unfunded Capital Contribution (as to each
respective Call Notice, such written notice shall be initially given within five (5) days after the
Funding Deadline and thereafter promptly following any Additional Funding Date (as defined below))
and any Funding Member(s) shall thereafter have ten (10) Business Days following receipt of any
Additional Funding Notice to fund all or a part of its pro-rata portion of such Unfunded Capital
Contribution as set forth herein. Any day during such ten Business Day period on which a Funding
Member funds an additional amount shall be hereinafter referred to as a “Additional Funding Date.”

               (iii) The funding of amounts by a Funding Member in respect of an Unfunded Capital
Contribution shall be made directly to the Company but shall be treated as (x) a non-recourse loan
(except to the extent of the Non-Funding Member’s Interest) made by the Funding Member to the
Non-Funding Member, bearing interest at a rate of eighteen percent (18%) per annum with interest
compounding quarterly (a “Contribution Loan”), followed by (y) a Capital Contribution (including
for Capital Account purposes) by such Non-Funding Member to the Company. Any such Contribution
Loan shall only be repaid directly by the Company on behalf of the Non-Funding Member to the
Funding Member only from Distributions otherwise distributable to the Non-Funding Member, and shall
have priority over any other amounts to be distributed to the Non-Funding Member. Amounts paid
directly by the Company to the Funding Member on account of the loan shall be deemed Distributions
to the Non-Funding Member. Any Distributions used to repay such loan shall be applied first to the
interest and then to the principal of such loan.

               (iv) Notwithstanding Section 2.3(a)(iii), from and after the date of the Commitment
Completion, the funding of amounts by a Funding Member in respect of a Non-Funding Member’s
Unfunded Capital Contribution shall be treated as a Capital Contribution to the Company by such
Funding Member, and the Members’ Percentage Interests shall automatically be adjusted as follows:
As of the later of the Funding Deadline or the last Additional Funding Date to occur, (x) the
Percentage Interest of such Non-Funding Member shall be reduced (but not below zero) by an amount
equal to a fraction (expressed as a percentage), the numerator of which is the amount of such
Unfunded Capital Contribution and the denominator of which is the Net Notional Capital
Contributions of all the Members at such

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time, and (y) the Percentage Interest of each Funding Member shall be increased by its pro rata
portion (based on the respective portions of the Unfunded Capital Contribution funded by each
Funding Member) of the amount of the reduction in the Percentage Interest of the Non-Funding
Member.

          (b) A Contribution Loan may be converted into a Conversion Interest (x) at any time if all
Members holding Contribution Loans agree to effect such conversion or (y) at any time after the
one-month anniversary of the date on which all Catch-Up Contributions became due in accordance with
Section 2.2(a)(iii) or Section 2.2(b)(iv) or (z) at any time after the Project Opening has
occurred; provided that in any event, a conversion of a Contribution Loan shall only be permitted
if at some point in time after the Effective Date either (A) the Members’ respective Net Notional
Capital Contributions were brought into the same ratio as their respective Percentage Interests or
(B) the Capital Commitments were adjusted in accordance with Sections 2.2(b)(ii) or 2.2(b)(iii).
Notwithstanding the foregoing, (1) all outstanding Contribution Loans shall become convertible at
the option of the holder immediately prior to any Sale or refinancing of the Company (in which all
or a portion of the proceeds of such refinancing would be distributed to the Members), and (2) all
outstanding Contribution Loans shall become convertible at the option of the holder immediately
upon the occurrence of the Commitment Completion. The Funding Member holding such Contribution Loan
shall effect any such conversion by sending a written notice to each of the Members setting forth
the Funding Member’s desire to cause such conversion, upon delivery of which:

               (i) If at the time the converting Contribution Loan was made, the Actual Capital Contributions
previously made by the Non-Funding Member were less than such Non-Funding Member’s Capital
Commitment as of such time, then the Percentage Interest of such Non-Funding Member shall be
reduced (but not below zero) by an amount equal to the product of (A) two times (2x) (B) a fraction
(expressed as a percentage), the numerator of which is the unpaid principal amount of such
Contribution Loan at the time of conversion and the denominator of which is the lesser of (x) the
Net Notional Capital Contributions of all the Members or (y) the sum of the Members’ aggregate
Capital Commitments, in each case at the time the converting Contribution Loan was made. The
Percentage Interest of the Funding Member holding such Contribution Loan shall be increased by the
amount of the reduction in the Percentage Interest of the Non-Funding Member.

               (ii) If at the time the converting Contribution Loan was made, the Actual Capital
Contributions previously made by the Non-Funding Member were equal to or greater than such
Non-Funding Member’s Capital Commitment as of such time, then the Percentage Interest of such
Non-Funding Member shall be reduced (but not below zero) by an amount equal to a fraction
(expressed as a percentage), the numerator of which is the unpaid principal amount of such
Contribution Loan at the time of conversion and the denominator of which is the Net Notional
Capital Contributions of all the Members at the time such Contribution Loan was made. The
Percentage Interest of the Funding Member holding such Contribution Loan shall be increased by the
amount of the reduction in the Percentage Interest of the Non-Funding Member.

               (iii) Notwithstanding Sections 2.3(b)(i) and 2.3(b)(ii), if at the time the converting
Contribution Loan was made, (x) the Actual Capital Contributions previously made by the Non-Funding
Member were less than such Non-Funding Member’s Capital Commitment

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as of such time and (y) the addition of the Unfunded Capital Contribution (in respect of which the
Contribution Loan was made) to such Actual Capital Contributions would cause such Non-Contributing
Member to have exceeded its Capital Commitment as of such time (i.e., when aggregated, a portion of
such Unfunded Capital Contribution is below such Non-Funding Member’s Capital Commitment and a
portion is above such Capital Commitment), then the conversion of all Contribution Loans made in
respect of such Unfunded Capital Contribution shall be effected (A) in accordance with Section
2.3(b)(i) for a portion of each such Contribution Loan that is proportional to the portion of such
Unfunded Capital Contribution that is above such Capital Commitment and (B) in accordance with
Section 2.3(b)(ii) for the remaining portion of such Contribution Loan.

               (iv) Upon such conversion, any accrued and unpaid interest on such Contribution Loan shall be
deemed canceled.

               (v) In the event of an adjustment of the Percentage Interests as a result of the operation of
the provisions of this Section 2.3(b), the Capital Accounts of the Members shall be readjusted such
that the Capital Accounts are allocated amongst the Members in the ratio of their respective
adjusted Percentage Interests. For illustration purposes only, an example of the operation of this
Section 2.3(b) is set forth on Schedule 2.3 delivered to each of the Members in connection with
this Agreement.

          (c) Notwithstanding anything to the contrary contained herein, the Board shall be authorized
to effect all calculations and provide copies of notices to all relevant Members which may be
required, in the Board’s reasonable discretion, in connection with the operation of this Section
2.3.

     2.4 Reserved.

     2.5 Capital Accounts. A Capital Account shall be maintained for each Member. Each Member’s
Capital Account shall be (a) increased by (i) the amount of cash and the fair market value of any
property (net of liabilities that the Company is considered to assume or take subject to)
contributed by such Member to the Company, and (ii) allocations to such Member of Net Profits and
any other allocations to such Member of items of income and gain pursuant to this Agreement, and
(b) decreased by (i) the amount of cash and the fair market value of any property (net of
liabilities that such Member is considered to assume or take subject to) distributed to such Member
by the Company, and (ii) allocations to such Member of Net Losses and other allocations to such
Member of items of loss and deduction pursuant to this Agreement. Determinations of fair market
value pursuant to this Section 2.5 shall be made by the Board acting by Unanimous Action.

     2.6 Transfers. Upon a Transfer of an Interest in the Company that results in the Transferee
becoming the owner of an Interest in the Company for United States federal income tax purposes, the
Capital Account of the Member Transferring its Interest shall, to the extent of the Interest
Transferred, become the Capital Account of the Person to whom such Interest is Transferred in
accordance with Section 1.704-1(b)(2)(iv)(l) of the Regulations.

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     2.7 Deficit Capital Account. Except as otherwise required in the Act or this Agreement, no
Member shall have any liability to restore all or any portion of a deficit balance in a Capital
Account.

     2.8 Modifications. The manner in which Capital Accounts are to be maintained pursuant to this
Section is intended to comply with the requirements of Section 704(b) of the Code. If the Board
determines that the manner in which Capital Accounts are to be maintained pursuant to this
Agreement are reasonably required to be modified to comply with Section 704(b) of the Code, then
the method in which Capital Accounts are maintained shall be so
modified; provided, however, that
any change in the manner of maintaining Capital Accounts shall not materially alter the economic
agreement between or among the Members.

     2.9 Priority and Return of Capital. Except as otherwise provided herein, no Member shall have
priority over any other Member, whether for the return of a Capital Contribution or for Net
Profits, Net Losses or a Distribution; provided, however, that this Section 2.9 shall not apply to
any loan, guaranty, endorsement, collateral or other indebtedness (as distinguished from a Capital
Contribution) given, made or incurred by a Member to the Company or any creditor of the Company or
to any indebtedness of the Company to a Member in connection with any business transaction.

SECTION 3

ALLOCATIONS; DISTRIBUTIONS

     3.1 Allocations of Profits and Losses. For purposes of maintaining the Capital Accounts of
the Company, Net Profits and Net Losses for any Allocation Year shall be allocated among the
Members, to the extent possible, in such a manner as to cause the sum of (a) the balance in the
Capital Account of each Member, (b) such Member’s share of Company (partnership) minimum gain (as
determined according to Section 1.704-2(g) of the Regulations), and (c) such Member’s Member
(partner) nonrecourse debt minimum gain (as defined in Section 1.704-2(i)(3) of the Regulations),
to be equal to the aggregate amount of cash such Member would receive if all of the assets of the
Company were sold for an amount of cash equal to their respective “book values” (as determined
under the principles of the substantial economic effect safe harbor provisions of Section
1.704-1(b) of the Regulations, including adjustments to book value contemplated therein), all debt
obligations (limited with respect to each nonrecourse liability to the “book value” of the assets
securing such liability) were satisfied in accordance with their respective terms, and the
remaining cash were distributed as provided in Section 3.5.

     3.2 Required Special Allocations. Notwithstanding Section 3.1 hereof:

          (a) Appropriate adjustments shall be made to the allocations of Net Profits and Net Losses
(and the 704(b) “book value” of Company property), to the extent required under Sections
1.704-1(b)(2)(iv)(d), (e), (f) and (g) of the Regulations. Any determinations of fair market value
in connection with the foregoing shall be made by the Board acting by Unanimous Action.

          (b) Any Member Nonrecourse Deductions shall be specially allocated to the Member(s) that
bear(s) the economic risk of loss with respect to the Member Nonrecourse Debt

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to which the Member Nonrecourse Deductions are attributable in accordance with Section
1.704-2(i)(1) of the Regulations. Nonrecourse Deductions shall be allocated among the Members in
proportion to their respective Percentage Interests.

          (c) Appropriate adjustments shall be made to the allocations of Net Profits and Net Losses to
the extent required to comply with the “qualified income offset” provisions of Section
1.704-1(b)(2)(ii)(d) of the Regulations, limitations on allocations of losses pursuant to the
alternate test for substantial economic effect set forth in Section 1.704-1(b)(2)(ii)(d) of the
Regulations, the Company “minimum gain chargeback” provisions of Section 1.704-2(f) of the
Regulations, and the Member “minimum gain chargeback” provisions of Section 1.704-2(i)(4) of the
Regulations, all issued pursuant to Section 704(b) of the Code. To the extent permitted by such
Regulations, the allocations in such year and subsequent years shall be further adjusted (to the
extent that offsetting allocations would not otherwise occur in the current or future periods) so
that the cumulative effect of all the allocations shall be the same as if all such allocations were
made pursuant to Section 3.1 hereof (as adjusted by Section 3.2(a) hereof) without regard to
Section 3.2(b) and this Section 3.2(c).

          (d) Notwithstanding anything to the contrary in this Agreement, if any allocation in this
Agreement would cause the Company’s allocations to violate Section 514(c)(9)(B)(vi) of the Code
(taking into account its incorporation by reference of the “substantial economic effect”
requirement of Section 704(b)(2) of the Code), then such allocation shall not be made and such
allocation shall be adjusted to comply with Section 514(c)(9)(B)(vi) of the Code, taking into
account, to the extent possible, the intent of this Agreement.

     3.3 Tax Allocations.

          (a) Except as provided below, for income tax purposes under the Code and the Regulations, each
Company item of income, gain, loss and deduction shall be allocated between the Members as its
correlative item of “book” income, gain, loss or deduction is allocated pursuant to Sections 3.1
and 3.2.

          (b) Notwithstanding the foregoing, in accordance with Section 704(c) of the Code and the
Regulations thereunder, income, gain, loss and deduction with respect to any property contributed
to the Company or that is revalued pursuant to Section 1.704-1(b)(2)(iv)(f) of the Regulations,
shall solely for tax purposes and not for purposes of maintaining Capital Accounts, be allocated
among the Members so as to take account of any variation between the adjusted basis of such
property to the Company for federal income tax purposes and its fair market value at the time of
contribution or revaluation. Any elections as to the method (traditional, traditional with curative
allocations, remedial or other) to take account of any such variation shall be made by the Board
acting by Unanimous Action.

     3.4 Distributions. The Board may from time to time make Distributions at such times and in
such amounts as it shall determine; provided that Available Cash shall be distributed no later than
60 days after the end of each calendar quarter. At such times as a Distribution is made, the Board
shall provide the Members with a statement setting forth, in reasonable detail, the manner in which
the Distributions were calculated and determined. Notwithstanding any

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provisions to the contrary in this Agreement, the Company shall not make a Distribution if such
Distribution would violate the Act. All Distributions must be in cash except as otherwise provided
in Section 9.9 of this Agreement. In the event the Privilege Fee is returned to the Company in
connection with a Licensing Withdrawal, unless otherwise agreed by the Board acting by Special
Unanimous Action, the Privilege Fee (less the amount of any expenses incurred by the Company) shall
be promptly distributed by the Company to the Members in the ratio in which the Members contributed
the Privilege Fee as set forth on Appendix II.

     3.5 Priority of Distributions.

          (a) Any Distributions (other than Distributions of the Privilege Fee following a Licensing
Withdrawal) shall be distributed to the Members pro rata in accordance with their respective
Percentage Interests in the Company.

          (b) Any reference in this Agreement to a Distribution pursuant to this Section 3.5 shall, as
the context requires, include a corresponding Distribution pursuant to Section 9.2(c).

     3.6 Offset. The Company may offset all amounts owing to the Company by a Member against any
Distribution to be made to such Member.

     3.7 Interest on and Return of Capital Contributions. No Member shall be entitled to interest
on its Capital Contribution or to a return of its Capital Contribution, except as specifically set
forth in this Agreement.

     3.8 Accounting Period. The accounting period of the Company shall be the Allocation Year.

     3.9 Withholding. All amounts withheld pursuant to the Code or any provision of any state or
local law with respect to any Distribution or allocation to one or more of the Members shall be
treated as amounts distributed to the applicable Member(s) for all purposes of this Agreement and
therefore shall reduce subsequent Distributions to which such Member(s) are otherwise entitled. The
Company is authorized to withhold from Distributions and with respect to allocations to the Members
and to pay over to any federal, state or local government any amounts required to be so withheld
therefrom or with respect thereto pursuant to the Code or any provision of any other federal, state
or local law.

SECTION 4

MANAGEMENT

     4.1 Board of Managers.

          (a) The management of the Company shall be the responsibility of a board of managers (the
“Board”), acting alone as a group as described below and without the consent of any Member (except
as otherwise expressly provided herein), which shall have the full right, power, authority and
discretion to take any action on behalf of the Company, subject to Section 4.1(c) below and the
provisions herein that require approval of all of the Voting Representatives.

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          (b) Subject to Section 4.1(g), the Board shall consist of five (5) Representatives, of whom
three (3) shall be Voting Representatives and two (2) shall be Non-Voting Representatives. KGH
shall appoint two (2) individuals to serve as Voting Representatives to the Board to act on its
behalf with respect to matters covered by this Agreement. Clairvest shall appoint one (1)
individual to serve as a Voting Representative to the Board to act on its behalf with respect to
matters covered by this Agreement and one (1) individual to serve as a Non-Voting Representative.
Lakes shall appoint one (1) individual to serve as a Non-Voting Representative. The names and
addresses of the initial Representatives of the Board, who are to hold such positions from and after the date of this Agreement until
their removal or resignation pursuant to this Agreement or until their respective successors are
elected and qualified pursuant to this Agreement, are as set forth
on Appendix III. Any Member may
replace its Representatives or revoke any such appointment at any time and from time to time by
giving written notice to the Board and the other Members. Each Member shall promptly fill any
vacancy caused by the death, removal or resignation of any of its Representatives by written notice
to the Board and the other Members. Subject to Section 4.1(g), no Member other than KGH or
Clairvest shall have a right to appoint Voting Representatives to the Board.

          (c) Any action of the Board will require the majority approval of the Voting Representatives
then serving, except that (i) the actions set forth on
Appendix IV and as otherwise provided for
herein (collectively, the “Unanimous Actions”) shall require the unanimous approval of the Voting
Representatives then serving and (ii) the actions set forth on
Appendix V (the “Special Unanimous
Actions”) shall require both the unanimous approval of the Voting Representatives then serving and
the approval of Lakes. A Representative may delegate its authority as a Representative to any
other Representative appointed by the same Member by providing the Board and all the Members with
written notice of such delegation.

          (d) The Board shall hold meetings as and when reasonably requested by any Representative. At
least two (2) Business Days prior notice by the requesting Representative via telephone, electronic
mail or facsimile (unless otherwise waived) shall be required with respect to meetings of the
Board. If any Voting Representative is unable to attend on the designed date, such Voting
Representative may defer the meeting by up to three Business Days after the date set forth in the
original notice (unless there is a bona fide third party requirement that the meeting occur
earlier) by providing written notice (which may be by electronic mail) of such deferral to each of
the other Representatives no later than six (6) hours prior to the proposed time of the meeting.
All meetings of the Board shall be held either (i) in person, and/or (ii) by telephone conference
or similar means of communication by which Representatives can participate in the meeting and hear
each other (and such participation in a meeting in this manner shall constitute presence in person
at the meeting), as mutually agreed by the Representatives and if agreement cannot be reached the
parties shall meet in person but shall make the option of attending such meeting by telephone
conference available to any Representative that cannot attend in person for whatever reason.
Whenever the Board is required or permitted to take any action by vote, such action may be taken
without a meeting and without a vote, if (x) a consent or consents in writing (including in
electronic format), setting forth the action so taken, shall be signed by (A) all of the Voting
Representatives then serving (except that if a Voting Representative has delegated its authority in
accordance with Section 4.1(c), its signature shall not be required but that of its delegate, in
such capacity, shall be required) and (B) solely with respect to Special Unanimous Actions, Lakes,
and (y) copies of all notices and other material information delivered to the

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Voting Representatives in connection with obtaining such consent were (A) to the extent
practicable, simultaneously delivered to the Non-Voting Representatives and (B) in any event
delivered to the Non-Voting Representatives prior to obtaining such consent.

          (e) Any Representative exercising management powers or responsibilities expressly authorized
by the Board shall be deemed to be a manager for purposes of applying the provisions of the Act,
unless the context requires otherwise. Notwithstanding the foregoing or Section 18-402 of the Act
(including the last sentence thereof), except as expressly provided for in this Agreement or in a
resolution of the Board duly made in accordance with the terms of this Agreement, no Representative
may bind the Company and no such Representative is an agent of the Company solely by virtue of
being on the Board, and no such Representative has authority to sign, act for or bind the Company
solely by virtue of being on the Board, all of such powers being vested in the Board acting as a
group in accordance with the provisions of this Section 4.1. Any Representative that executes any
document or instrument or otherwise takes any action to bind the Company in violation of this
Section 4.1(e) shall be solely responsible for, and shall indemnify, defend and hold harmless the
Company and each Member against, any losses that the Company, or such Member, as the case may be,
may at any time become subject to or liable for by reason of the actions specified above.

          (f) Each Member shall be responsible for the compensation of its Representatives.

          (g) In the event that any Member fails to fund any Capital Contribution up to its Capital
Commitment in response to a Call Notice (a “Defaulting Member”), then (x) except as otherwise
provided in Sections 4.1(g)(iii) or 4.1(g)(iv), such Defaulting Member shall no longer have the
right to appoint any Representatives to the Board and any Representatives previously appointed by
such Defaulting Member shall immediately be removed from the Board, and (y) such Defaulting Member
shall no longer have the right to approve any action otherwise requiring such Member’s approval
under this Agreement (other than with regard to any amendment hereto). In addition to the
foregoing:

               (i) If, following the Effective Date, the sole Defaulting Member has been KGH and both
Clairvest and Lakes funded their full pro rata portions of KGH’s Unfunded Capital Contribution(s),
then notwithstanding anything to the contrary herein, each of Clairvest and Lakes shall be entitled
to appoint one (1) additional Voting Representative to the Board (such that Clairvest has a total
of two (2) Voting Representatives and Lakes has a total of one (1) Voting Representative following
such additional appointments).

               (ii) If, following the Effective Date, the sole Defaulting Member has been Clairvest and the
operation of Section 2.3 has caused Lakes’s Percentage Interest to be at least fifteen (15)
percentage points greater than Lakes’s Commitment Percentage at such time, then notwithstanding
anything to the contrary herein, Lakes shall be entitled to appoint one (1) Voting Representative
to the Board.

               (iii) If, following the Effective Date, each of KGH and Clairvest has been a Defaulting
Member, but Lakes has not been a Defaulting Member and Lakes’s Contribution Percentage exceeds 50%,
then notwithstanding anything to the contrary herein, Lakes shall be

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entitled to appoint three (3) Voting Representatives to the Board and each of KGH and Clairvest
shall be entitled to appoint one (1) Voting Representative to the Board.

               (iv) If either (x) since the Effective Date, each of KGH and Clairvest has been a Defaulting
Member, but Lakes’s Contribution Percentage is less than or equal to 50% or (y) since the Effective
Date, each of KGH, Clairvest and Lakes has been a Defaulting Member, then notwithstanding anything
to the contrary herein, each of the Members shall be entitled to appoint one (1) Voting
Representative to the Board.

               (v) Notwithstanding anything to the contrary herein, (x) upon the removal of Representatives
or appointment of additional Representatives pursuant to this Section 4.1(g), the number and
classes of Representatives on the Board shall be adjusted to reflect such removals and appointments
and (y) the changes to the composition of the Board contemplated by this Section 4.1(g) shall not
affect the provisions of Section 4.1(c).

     4.2 Lakes Management Agreement. As provided in the Management Agreement, Lakes shall conduct
the Project Operations until the termination of the Management Agreement pursuant to its terms.
Except as set forth in the Management Agreement, Lakes shall not be entitled to compensation for
conducting the Project Operations. Following the termination of the Management Agreement, the
appointment of a new Person (who may but need not be a Member) to conduct the Project Operations
shall be subject to approval of the Board acting by Unanimous Action.

     4.3 Officers and Authorized Persons.

          (a) The Board may designate one or more individuals as officers or agents of the Company (an
“Authorized Person”), who may but need not have titles, and shall exercise and perform such powers
and duties as shall be assigned and delegated to them from time to time by the Board; provided that
an Authorized Person may only take a Unanimous Action or Special Unanimous Action with the
applicable approval in accordance with Section 4.1(c) and may only take an action which requires
approval of one or more Members upon such approval. Any such Authorized Person may be removed by
the decision of the Board at any time, with or without cause but without prejudice to such
Authorized Person’s contractual rights (if any). Each officer shall hold office until his or her
successor is elected and qualified, unless earlier removed in accordance with this Section 4.3. Any
number of offices may be held by the same individual.

          (b) The Authorized Persons, to the extent of their powers set forth in this Agreement or
otherwise vested in them by action of the Board not inconsistent with this Agreement, are agents of
the Company for the purpose of the Company’s business and the actions of the Authorized Persons
taken in accordance with such powers shall bind the Company.

          (c) The Board hereby designates and appoints Steven E. Orbuch as the initial Authorized Person
of the Company. Each of the Voting Representatives and each of the Members hereby agrees that the
Company is authorized to execute, deliver and perform, and Mr. Orbuch, as an Authorized Person,
acting alone on behalf of the Company, is hereby authorized to execute and deliver on the date
hereof, (i) in the name of the Company (A) a contribution agreement with the Members and certain
other parties, pursuant to which, among other things,

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KGH shall contribute to the Company all right, title and interest in and to Chisholm, and (B) an
amended and restated limited liability company agreement of Chisholm, in substantially the form
attached as an exhibit to such contribution agreement, and (ii) in the Company’s capacity as the
sole member of Chisholm, (x) the Management Agreement and (y) an assignment and assumption
agreement dated the date hereof (a copy of which has been provided to Clairvest), pursuant to which
Chisholm shall acquire the right to purchase certain land in connection with the Project.

     4.4 Management of Subsidiaries. The provisions of this Agreement regarding the management and
governance of the Company shall apply to the management and governance of any of its Subsidiaries,
whether any such Subsidiary is managed or controlled directly or indirectly by the Company, as
member, manager, partner, stockholder or otherwise. Any action to be taken by any of the Company’s
Subsidiaries shall be construed as an action taken by the Company and shall be subject to the same
rights and limitations granted and imposed on the Members and the Board under this Agreement. Any
and all references herein to the Company, the Board or any Member causing or directing any action
on behalf of a Subsidiary of the Company shall be deemed to refer to the Company causing (or the
Board or such Member causing the Company to cause), in its capacity as the sole member of such
Subsidiary, such action to be taken for and on behalf of such Subsidiary.

     4.5 Budgets.

          (a) Lakes shall prepare an Initial Capital Budget and an initial Operating Budget and submit
each to KGH (with a copy to the Board) for KGH’s review and approval.

               (i) To the extent the Initial Capital Budget is less than or equal to $150 million (or such
greater amount if the conditions to construction of the Non-Core Amenities set forth in the
definition of Minimum Amenities are satisfied) and is within the parameters of the Minimum
Amenities, the Initial Capital Budget shall become final upon approval by KGH. To the extent the
Initial Capital Budget exceeds $150 million (or such greater amount if the conditions to
construction of the Non-Core Amenities set forth in the definition of Minimum Amenities are
satisfied) or is not within the parameters of the Minimum Amenities, KGH shall, within three days
of approving such Initial Capital Budget, present such approved budget to Clairvest for Clairvest’s
review and approval.

               (ii) KGH shall, within three days of approving the initial Operating Budget, present such
approved budget to Clairvest for Clairvest’s review and approval, which approval shall not be
unreasonably withheld.

               (iii) Clairvest shall have ten days from its receipt of any Initial Capital Budget or initial
Operating Budget presented to it by KGH (which budget has been previously approved by KGH in
accordance with Sections 4.5(a)(i) and 4.5(a)(ii)) to review such budget and to request and timely
receive any additional information regarding any such budget as it may reasonably require (to the
extent such information is reasonably available to the Company, Lakes or KGH), after which such
budget shall be deemed final and approved by Clairvest unless Clairvest earlier notifies KGH in
writing that it objects to such budget, in which case the Members will work together in good faith
to resolve any dispute in an expeditious manner, and

15

 

such budget shall be deemed final when approved by Clairvest. If Clairvest and KGH cannot resolve
any dispute within 15 days of Clairvest’s notice to KGH of its objection, each of the expense items
not approved by Clairvest will be reduced to the lower of the number approved by KGH or the number
proposed by Clairvest.

          (b) The Initial Capital Budget approved in accordance with Section 4.5(a) shall remain in
effect until the Project Opening. The initial Operating Budget approved in accordance with Section 4.5(a) shall remain in effect until the end of the Fiscal Year in
which the Project Opening occurs.

          (c) (i) At least 30 days before the date on which it is anticipated the Project Opening will
occur, and on or before November 30 of each year after the Project Opening (including November 30
of the year in which the Project Opening occurs, unless the Project Opening occurs during the month
of December), Lakes shall prepare an annual Capital Budget and submit the same to KGH (with a copy
to the Board) for KGH’s review and approval, and (ii) on or before November 30 of each year after
Project Opening (including November 30 of the year in which the Project Opening occurs, unless the
Project Opening occurs during the month of December), Lakes shall prepare an annual Operating
Budget and submit the same to KGH (with a copy to the Board) for KGH’s review and approval. KGH
shall, within three days of approving the annual Capital Budget or Operating Budget, present such
approved budget to Clairvest for Clairvest’s review and approval. Clairvest shall have the right in
its reasonable discretion to veto any operating expense line item on such budget that is in excess
of the lesser of 105% of the previous year’s actual or budgeted amount for such line item by
providing written notice to KGH within ten days of Clairvest’s receipt of such budget. Lakes, KGH
and the Company shall provide any additional information regarding such budget as Clairvest may
reasonably require (to the extent such information is reasonably available to Lakes, KGH or the
Company). If Clairvest approves the annual proposed Capital Budget or Operating Budget or fails to
notify KGH in writing of its veto within such ten day period, such budget shall become final. If
Clairvest vetoes any line item, such line item shall be set at the lower of the previous year’s
actual or budgeted number increased by the percentage by which the U.S. Consumer Price Index, All
Urban Consumers (CPI-U), All Items, has increased since the date of the immediately preceding
budget through the date such index is most recently made available prior to the date such line item
is vetoed by Clairvest.

          (d) Notwithstanding the foregoing, it shall not be “reasonable” to veto any expense required
by law.

          (e) During the term of the Management Agreement, Lakes shall fulfill its responsibilities as
set forth in this Section 4.5. Following the termination of the Management Agreement, the Company
shall cause the Person responsible for the Project Operations to fulfill the obligations of Lakes
under this Section 4.5.

     4.6 Company Expenses. Each of the Members shall be responsible for (a) its own formation and
organizational expenses with respect to the entities constituting each of the Members and (b) its
own due diligence expenses and all other costs and expenses incurred by such Member in connection
with the negotiation and execution of this Agreement and its acquisition of its Interest,
including, without limitation, all attorneys’ fees. Notwithstanding the

16

 

foregoing, fees incurred by any of the Members from and after August 18, 2009, with regard to
approved predevelopment expenses, due diligence and regulatory efforts for the benefit of the
Company and Chisholm shall be deemed expenses of the Company, and any Member who pays such
fees shall be entitled to reimbursement therefor. In connection therewith, such Member shall
submit reasonably detailed evidence of such fees for review by the Board, and the Board acting
by Unanimous Action shall review and have the power to approve such fees (such approval not to be unreasonably withheld).

SECTION 5

ROLE OF MEMBERS: WITHDRAWAL, PARTITION AND OTHER ISSUES

     5.1 Withdrawal/Resignation.

          (a) Except as otherwise provided in Section 5.1(b), or Section 9 hereof or Schedule 8.1
delivered to each of the Members in connection with this Agreement, no Member shall demand or
receive a return of its Capital Contributions or withdraw from the Company without the
approval of the Board acting by Unanimous Action. Under circumstances requiring a return of
any Capital Contributions, no Member has the right to receive Property other than cash.

          (b) NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, AT ANY TIME PRIOR TO THE TIME THAT
THE COMPANY OR ITS SUBSIDIARY HAS RECEIVED FINAL APPROVAL FROM THE KANSAS RACING AND GAMING
COMMISSION AND THE PRIVILEGE FEE BECOMES NONREFUNDABLE (THE “HARD DEPOSIT TIME”), ANY MEMBER
MAY CAUSE THE COMPANY AND/OR ITS SUBSIDIARY TO REQUEST ON BEHALF OF THE COMPANY AND/OR ITS
SUBSIDIARY A REFUND OF THE PRIVILEGE FEE (THE “LICENSING WITHDRAWAL”), WHICH, WHEN RECEIVED,
SHALL PROMPTLY BE DISTRIBUTED BY THE COMPANY IN ACCORDANCE WITH THE LAST SENTENCE OF SECTION
3.4.

               (i) If the Member causing the Licensing Withdrawal (the “Discontinuing Member”) in its
sole discretion believes that less than five (5) Business Days remain until the Hard Deposit
Time, the Discontinuing Member may immediately cause the Licensing Withdrawal without giving
prior notice to, or receiving approval from, any other Member, but shall make reasonable
efforts to contact the other Members as soon as practicable (each, a “Continuing Member”).

               (ii) If the Discontinuing Member in its sole discretion believes that at least five (5)
Business Days remain until the Hard Deposit Time, then prior to causing the Licensing
Withdrawal, the Discontinuing Member first shall be required to send a written notice (which
may be sent by facsimile or e-mail) to the Continuing Members setting forth the Discontinuing
Member’s intent to cause the Licensing Withdrawal.

               (iii) The Continuing Members shall have two (2) Business Days after receipt of such
notice to decide among themselves whether to stop the Licensing Withdrawal, either (x) by
reimbursing (in equal portions unless otherwise agreed by the Continuing Members) the
Discontinuing Member for the Discontinuing Member’s contributed share of the Privilege

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Fee or (y) by one of the Continuing Members becoming a Discontinuing Member and the remaining
Continuing Member reimbursing both of the Discontinuing Members for their respective contributed
shares of the Privilege Fee; provided that if any Discontinuing Member has not been reimbursed for
its contributed share of the Privilege Fee prior to the expiration of such two (2) Business Day
period for any reason, the original Discontinuing Member may immediately cause the Licensing Withdrawal without obtaining the approval of any other
Member.

               (iv) If the Continuing Member(s) timely make(s) such Privilege Fee reimbursement, each
Discontinuing Member shall, at the time the Company and/or Chisholm finally obtains Licensing, also
be entitled to reimbursement by the Continuing Member(s) of (x) any documented expenses incurred by
such Discontinuing Member in connection with the pursuit of the Licensing prior to the date of the
Discontinuing Member’s withdrawal to the extent the Continuing Member(s) continued to benefit from
such items in the ongoing pursuit of Licensing and such items would otherwise have qualified as
expenses reimbursable by the Company in accordance with Section 4.6 above and (y) any Capital
Contributions contributed by such Discontinuing Member in excess of its contributed share of the
Privilege Fee. In the event of a dispute as to the amount of any expenses to be reimbursed in
connection with this Section 5.1(b)(iv), any such dispute shall be resolved by an audit performed
by an independent accounting firm selected by the Members that documents the actual documented
expenses paid by each Discontinuing Member. The reimbursement of expenses under this Section
5.1(b)(iv) shall (x) occur after the expiration of the two (2) Business Day period set forth in the
preceding paragraph, (y) be independent of (and shall not delay) the distribution of the Privilege
Fee after the Licensing Withdrawal and (z) if there is more than one Continuing Member, be made in
the ratio of the Continuing Members’ respective Percentage Interests. Following the reimbursement
of the Privilege Fee and any expenses and additional Capital Contributions, (A) each Discontinuing
Member shall be deemed to have withdrawn from the Company and shall no longer have an Interest in
the Company, (B) such Discontinuing Member shall accordingly have no further right to participate
in the management of the Company or to receive any Distributions, (C) such Discontinuing Member
shall have no further rights with respect to the Project (although such Discontinuing Member’s
obligations under Section 11.1 hereof shall continue to apply) and (D) the Continuing Member(s)
shall amend and restate this Agreement to reflect the withdrawal of the Discontinuing Member(s) in
a form mutually satisfactory to the Continuing Member(s) and, to the extent possible, consistent
with the relative rights and obligations of the Continuing Member(s) as of the Effective Date.
Notwithstanding anything to the contrary in the Management Agreement, if Lakes is a Discontinuing
Member, Lakes agrees that the Continuing Member(s) shall have the right, but not the obligation, to
cause Chisholm to terminate the Management Agreement at any time following the withdrawal of Lakes
under this Section 5.1(b).

               (v) Each of the Voting Representatives and each of the Members hereby acknowledges and agrees
that notwithstanding anything to the contrary herein, the original Discontinuing Member, acting
alone, shall have the authority necessary to bind the Company, each of its Subsidiaries and each of
the Members and to execute (and/or cause any Representative appointed by it to execute) any and all
documents that may be required in connection with effecting the Licensing Withdrawal pursuant to
the terms of this Section 5.1(b).

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               (vi) Each of the Members agrees not to divulge to third parties that any Member has exercised
its right to cause a Licensing Withdrawal until the earlier of (x) the date the Privilege Fee has
been returned to the Company or its Subsidiary or (y) the date the Discontinuing Member has
received a reimbursement of its contributed portion of the Privilege Fee.

               (vii) To the extent that at the time a request for a Licensing Withdrawal is being made,
Chisholm does not have a bank account that the Company controls, the Company will direct that the
Privilege Fee be refunded in accordance with the wire instructions set forth on Schedule 5.1
delivered to each of the Members in connection with this Agreement, and KGH will cause such amounts
to be held in trust for the benefit of the Company and its Members and will cause the Privilege Fee
to be distributed to the Members in accordance with this Section 5.1(b) and the last sentence of
Section 3.4.

     5.2 Member Compensation. No Member shall receive any interest, salary or drawing with respect
to its Capital Contributions or Capital Account or for services rendered on behalf of the Company
or its Subsidiaries, or otherwise, in its capacity as a Member.

     5.3 Members Liability. No Member shall be liable, whether under a judgment, decree or order
of a court, or in any other manner for the Debts or any other obligations or liabilities of the
Company. A Member shall be liable only to make its Capital Contributions and shall not be required
to restore a deficit balance in its Capital Account or to lend any funds to the Company or, after
its Capital Contributions have been made, to make any additional contributions, assessments or
payments to the Company (subject to Section 2 herein).

     5.4 Partition. While the Company remains in effect or is continued, each Member agrees and
waives its rights to have any Property partitioned, or to file a complaint or to institute any
suit, action or proceeding at law or in equity to have any Property partitioned, and each Member,
on behalf of itself, its successors and its assigns hereby waives any such right.

     5.5 Other Instruments. Each Member hereby agrees to execute and deliver to the Company within
five (5) Business Days after receipt of a written request therefor, such other and further
documents and instruments, statements of interest and holdings, designations, powers of attorney
and other instruments and to take such other action as the Board acting by Unanimous Action
reasonably deems necessary to comply with any laws, rules or regulations as may be necessary to
enable the Company to fulfill its responsibilities under this Agreement.

     5.6 Tax Status. The Company shall be treated as a partnership for federal and state income tax
purposes, and each Subsidiary of the Company (including Chisholm) shall be treated as a disregarded
entity for such purposes. Any election by or for the Company or any Subsidiary to (a) be taxed as a
“C” corporation for federal and state income tax purposes, (b) convert its form of organization to
a corporation pursuant to Section 7.2 or (c) take any other action that would cause such status as
a partnership or disregarded entity, as applicable, for tax purposes to change, shall require
approval of the Board acting by Unanimous Action.

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SECTION 6

ACCOUNTING, BOOKS AND RECORDS

     6.1 Accounting, Books and Records.

          (a) The Company shall keep at its principal place of business each of the following:

               (i) Separate books of account for the Company which shall show a true and accurate record of
all costs and expenses incurred, all charges made, all credits made and received, all Capital
Contributions made, all Distributions made and all income derived in connection with the conduct of
the Company and the operation of the Business in accordance with this Agreement;

               (ii) A current list of the full name and last known business, residence, or mailing address of
each Member, both past and present, together with the Percentage Interest of each Member;

               (iii) A copy of the Certificate and all amendments thereto, together with executed copies of
any powers of attorney pursuant to which any amendment has been executed;

               (iv) Copies of the Company’s federal, state, and local income tax returns and reports, if any,
for the three most recent years;

               (v) Copies of this Agreement, as may be amended from time to time;

               (vi) Copies of any writings permitted or required under the Act regarding the obligation of a
Member to perform any enforceable promise to contribute cash or property or to perform services as
consideration for such Member’s Capital Contribution; and

               (vii) All material agreements entered into by the Company or any of its subsidiaries.

          (b) In accordance with Section 18-305 of the Act, any Member or its designated representative
for a proper purpose related to its position as a Member has the right to have reasonable access to
and inspect and copy the contents of such books or records.

     6.2 Reports. The Tax Matters Member of the Company shall be responsible for causing the
preparation of financial reports of the Company as any Member may reasonably request from time to
time.

     6.3 Tax Matters.

          (a) Tax Elections. Without any further consent of the Members being required (except as
specifically required herein, including without limitation Section 5.6), the Board shall make any
and all elections for federal, state, local, and foreign tax purposes, including without limitation
any election, if permitted by applicable law to adjust the basis of

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Property pursuant to Code Sections 754, 734(b) and 743(b), or comparable provisions of state, local
or foreign law, in connection with Transfers of Interests and Company Distributions.

          (b)
Tax Matters Member. KGH, or such other Member designated by the Board from time to time,
is specifically authorized to act as the “tax matters partner” under the Code and in any similar
capacity under state or local law (the “Tax Matters Member”) and shall have the rights and
responsibilities set forth in the Code for a “tax matters partner” and the rights and responsibilities set forth in this Agreement. Notwithstanding the
foregoing, in exercising its authority as Tax Matters Member: (i) the Tax Matters Member shall give
prompt notice to the Members of the receipt of any written notice that the Internal Revenue Service
or any state or local taxing authority intends to examine Company income tax returns for any year,
receipt of written notice of the beginning of an administrative or judicial proceedings at the
Company level relating to federal income tax matters, receipt of written notice of the final
Company administrative adjustment relating to the Company pursuant to Section 6223 of the Code, and
receipt of any request from the Internal Revenue Service for waiver of any applicable statute of
limitations with respect to the filing of any tax return by the Company; (ii) during the pendency
of any administrative or judicial proceeding at the Company or Subsidiary level relating to income
tax matters, the Tax Matters Member shall furnish to each Member reports concerning the status of
such proceeding at least once annually and more often as necessary to keep each Member reasonably
informed of the progress of such proceeding; (iii) unless the issue in dispute with the Internal
Revenue Service or other taxing authority would not disproportionately impact Clairvest in relation
to the other Members, the Tax Matters Member shall not enter into any extension of the period of
limitations for making assessments on behalf of Clairvest (or any direct or indirect owner thereof)
unless approved by Clairvest, (iv) unless the issue in dispute with the Internal Revenue Service or
other taxing authority would not disproportionately impact Clairvest in relation to the other
Members, the Tax Matters Member shall not bind Clairvest (or any direct or indirect owner thereof)
to any settlement agreement in respect of any administrative or judicial proceeding at the Company
level relating to federal, state, or local income tax matters unless approved by Clairvest, and (v)
the Tax Matters Member shall promptly notify each of the Members if the Board (or the Tax Matters
Member) does not intend to file for judicial review with respect to any final Company
administrative adjustment relating to the Company. Moreover, nothing in this Section 6.3 shall be
interpreted to permit the taking of any action (including settling any material legal action) that
would otherwise constitute a Unanimous Action without the appropriate consent otherwise required by
this Agreement.

SECTION 7

AMENDMENTS; CONVERSION

     7.1 Amendments. Amendments to the Certificate or this Agreement may be proposed by any
Member. A proposed amendment shall be adopted and be effective as an amendment hereto if it
receives the approval of the Board acting by Unanimous Action, except that notwithstanding Section
4.1(g), no proposed amendment to the Certificate or this Agreement shall be effective without the
prior approval of each Member that such amendment materially and adversely affects.

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     7.2 Conversion.

          (a) In the event the Company (upon the approval of the Board acting by Unanimous Action)
changes the form of organization in which the Company conducts its business from a limited
liability company to a corporation, which change shall be in accordance with Section 5.6 above and
Section 7.2(c) below, either directly, through a merger with an existing corporation, or in any
other manner elected by the Board acting by Unanimous Action, the Company may make all exchanges,
and take all other actions, if any, as are reasonably necessary in connection with any conversion pursuant to this Section 7.2(a).

          (b) The shares of capital stock of the corporation resulting from a conversion of the Company
to a corporation pursuant to Section 7.2(a) shall be distributed among the Members so that each
Member shall receive an amount of such capital stock having a fair market value equal to the amount
that would have been distributed to such Member pursuant to Section 9.2 (after adjusting the
Members’ Capital Accounts for the hypothetical gain or loss that would be realized by the Company
if all of the assets and business, subject to all liabilities, of the Company had been sold
immediately prior to the conversion pursuant to Section 9.9 for an aggregate fair market value
equal to the aggregate fair market value of such capital stock as reasonably determined by the
Board acting by Unanimous Action).

          (c) Notwithstanding such conversion, the shares of capital stock issued shall, to the fullest
extent possible, reflect the preferences and priorities set forth in Section 3 hereof.

SECTION 8

TRANSFERS

     8.1 Restrictions on Transfers.

          (a) Except as otherwise permitted by this Agreement, no Member shall Transfer, directly or
indirectly, all or any of its Interest without the approval of the Board acting by Unanimous Action
(any such Transfer so consented to or otherwise permitted hereunder being referred to in this
Agreement as a “Permitted Transfer”). Notwithstanding the foregoing, no Transfer to an Unsuitable
Party or a Company Competitor shall be permitted; provided that for the avoidance of doubt a Sale
to a Company Competitor in accordance with Section 8.10 shall be permitted. Except for a Permitted
Ownership Change, any direct or indirect change in the ultimate beneficial ownership of a Member’s
Interest shall be deemed a Transfer for purposes of this Agreement. Notwithstanding the foregoing,
without the prior written consent of any party, the following shall be deemed Permitted Transfers:
(i) KGH may, directly or indirectly, Transfer its Interest in whole or in part so long as the
Transferee is not an Unsuitable Party or a Company Competitor and following such Transfer Och-Ziff
Real Estate Advisors LP or an Affiliate thereof retains (A) control over such Interest and (B)
control over Investment Vehicles beneficially owning at least 51% of such Interest; and (ii)
Clairvest may, directly or indirectly, Transfer its Interest in whole or in part so long as the
Transferee is not an Unsuitable Party or Company Competitor and following such Transfer Clairvest
Group Inc. or an Affiliate thereof retains (A) control over such Interest and (B) control over
Investment Vehicles beneficially owning at least 51% of such Interest (the Permitted Transfers
described in clauses (i) and (ii) being hereafter referred to as “Non-Control Transfers”). For
purposes hereof, the term “KGH”

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shall be deemed to include any Transferee of KGH, the term “Clairvest” shall be deemed to include
any Transferee of Clairvest and the term “Lakes” shall be deemed to include any Transferee of
Lakes.

          (b) Notwithstanding Section 8.1(a), the Members hereby agree to the procedures set forth on
Schedule 8.1 delivered to each of the Members in connection with this Agreement with respect to
regulatory conflicts.

     8.2 Conditions to Permitted Transfers. A Transfer shall not be treated as a Permitted
Transfer under Section 8.1(a) hereof unless and until all the following conditions are satisfied
(each in the reasonable determination of Company Counsel, except for Section 8.2(e), which shall be
determined as provided therein) or waived by the Board acting by Unanimous Action:

          (a) Such Transfer is made in compliance with the provisions of the Securities Act and
applicable state securities laws and regulations.

          (b) Except in the case of a Transfer involuntarily by operation of law, the Transferor and
Transferee shall execute and deliver to the Company such documents and instruments of conveyance as
may be reasonably necessary or appropriate in the opinion of Company Counsel to effect such
Transfer. In the case of a Transfer of Interests involuntarily by operation of law, the Transfer
shall be confirmed by presentation to the Company of legal evidence of such Transfer, in form and
substance reasonably satisfactory to Company Counsel. In all cases, the Company shall be reimbursed
by the Transferor and/or Transferee for all costs and expenses that it reasonably incurs in
connection with such Transfer.

          (c) Such Transfer would not cause the Company to be treated as a “publicly traded partnership”
within the meaning of Section 7704 of the Code and the regulations promulgated thereunder and would
not make the Company ineligible for “safe harbor” treatment under Section 7704 of the Code and the
regulations promulgated thereunder.

          (d) Such Transfer would not (i) affect the classification of the Company for income tax
purposes, (ii) cause the Company or any Member to become subject to regulation under either the
Investment Company Act of 1940, as amended, or the Investment Advisers Act of 1940, as amended,
(iii) violate or cause the Company or its Subsidiary to violate the Lottery Contract or Gaming
Laws.

          (e) Solely with respect to Transfers occurring prior to Project Opening, such Transferee shall
furnish to the Company one of (i) evidence of its creditworthiness and its financial ability to
perform in a timely manner all of its obligations as a Member under this Agreement, the sufficiency
of which evidence shall be determined by the Company’s outside auditor, (ii) an executed guaranty
from the Transferor guaranteeing the Capital Commitment of such Transferee, (iii) a clean,
unconditional and irrevocable letter of credit that (A) is issued by a reputable bank or similar
financial institution having a net worth of $250,000,000 or more, (B) is for an amount not less
than such Transferee’s expected remaining Capital Commitment, and (C) expires not less than six (6)
months after the anticipated Project Opening (as provided in the Initial Capital Budget or
otherwise reasonably determined by the Board), or (iv) evidence that

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the Transferee has deposited cash in an escrow account for the Company’s benefit in the amount of
such Transferee’s expected Capital Commitment.

     8.3 Prohibited Transfers. Except as otherwise specifically provided herein, any purported
direct or indirect Transfer of Interests that is not a Permitted Transfer shall be null and void
and of no force or effect whatsoever; provided that, if the Company is required to recognize a
Transfer that is not a Permitted Transfer, the Interests Transferred shall be strictly limited to
the Transferor’s rights to allocations and Distributions as provided by this Agreement with respect to the Transferred Interests, which allocations and Distributions may
be applied (without limiting any other legal or equitable rights of the Company) to satisfy any
debts, obligations, or liabilities for damages that the Transferor or Transferee of such Interests
may have to the Company. In the case of a Transfer or attempted Transfer of Interests that is not a
Permitted Transfer, the parties engaging or attempting to engage in such Transfer shall be liable
to indemnify and hold harmless the Company and the other Members from all cost, liability, and
damage that any of such indemnified Members may incur (including, without limitation, incremental
tax liabilities, lawyers’ fees and expenses) as a result of such Transfer or attempted Transfer and
efforts to enforce the indemnity granted hereby.

     8.4 Rights of Unadmitted Assignees. A Person who acquires Interests but who is not admitted as
a substituted Member pursuant to Section 8.5 hereof shall be entitled only to allocations and
Distributions with respect to such Interests in accordance with this Agreement, and shall have no
right to any information or accounting of the affairs of the Company, shall not be entitled to
inspect the books or records of the Company, and shall not have any of the rights of a Member under
the Act or this Agreement.

     8.5 Admission of Substituted Members. Subject to the other provisions of this Section 8, a
Transferee of Interests may be admitted to the Company as a substituted Member only upon
satisfaction of the conditions set forth in this Section 8.5 (each in the reasonable determination
of Company Counsel):

          (a) The Interests with respect to which the Transferee is being admitted were acquired by
means of a Permitted Transfer;

          (b) The Transferee of Interests (other than, with respect to clauses (i) and (ii) below, a
Transferee that was a Member prior to the Transfer) shall, by written instrument in form and
substance reasonably satisfactory to Company Counsel (and, in the case of clause (ii) below, the
Transferor Member), (i) accept and adopt the terms and provisions of this Agreement and (ii) assume
the obligations of the Transferor Member under this Agreement with respect to the Transferred
Interests. The Transferor Member shall be released from all such assumed obligations except (x)
those obligations or liabilities of the Transferor Member prior to transfer arising out of a breach
of this Agreement by the Transferor Member and (y) in the case of a Transfer to any of its
Affiliates, any Capital Contribution or other financing obligation of the Transferor Member under
this Agreement;

          (c) The Transferee pays or reimburses the Company for all reasonable legal, filing, and
publication costs that the Company incurs in connection with the admission of the Transferee as a
Member with respect to the Transferred Interests; and

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          (d) Except in the case of a Transfer involuntarily by operation of law, if required by the
Board, the Transferee (other than a Transferee that was a Member prior to the Transfer) shall
deliver to the Company evidence of the authority of such Person to become a Member and to be bound
by all of the terms and conditions of this Agreement, and the Transferee and Transferor shall each
execute and deliver such other instruments as Company Counsel deems necessary or appropriate to
effect, and as a condition to, such Transfer, amendments to the Certificate or any other instrument
filed with the State of Delaware or any other state or governmental authority.

     8.6 Distributions and Allocations in Respect of Transferred Interests.

          (a) If any Interests are Transferred during any Allocation Year in compliance with the
provisions of this Agreement, Net Profits, Net Losses, each item thereof, and all other items
attributable to the Transferred Interests for such Allocation Year shall be divided and allocated
between the Transferor and the Transferee by taking into account their varying holdings of
Interests during the calendar year in accordance with Code Section 706(d), using any conventions
permitted by law and selected by the Board acting by Unanimous Action. All Distributions on or
before the date of such Transfer shall be made to the Transferor, and all Distributions thereafter
shall be made to the Transferee. Solely for purposes of making such allocations and Distributions,
the Company shall recognize such Transfer not later than the end of the calendar month during which
it is given notice of such Transfer, provided that, if the Company is given notice of a Transfer at
least ten (10) Business Days prior to the Transfer, the Company shall recognize such Transfer as of
the date of such Transfer, and provided further that if the Company does not receive a notice
stating the date such Interests were Transferred and such other information as the Tax Matters
Member may reasonably require within thirty (30) days after the end of the Allocation Year during
which the Transfer occurs, then all such items shall be allocated, and all Distributions shall be
made, to the Person who, according to the books and records of the Company, was the owner of the
Interests on the last day of such Allocation Year. Neither the Company nor any Member shall incur
any liability for making allocations and Distributions in accordance with the provisions of this
Section 8.6, whether or not the Company has knowledge of any Transfer of ownership of any
Interests.

          (b) Any allocations or Distributions pursuant to Section 3 or Section 9.2 to a Member shall be
made by taking into account all prior allocations and Distributions made to a Transferor of the
Interests owned by such Member.

     8.7 Government Approvals. Notwithstanding anything to the contrary contained herein, any
Transfer of a Member’s Interest pursuant to this Section 8 shall be subject to, and shall occur
within a reasonable time after, all requisite approvals thereof have been obtained pursuant to the
Lottery Contract and any other applicable federal, state or local law (as reasonably determined by
Company Counsel).

     8.8 Preemptive Rights.

          (a) Notwithstanding anything to the contrary contained herein, each Member is hereby granted a
preemptive right to purchase up to such Member’s Percentage Interest of all (or any part) of any
Interest which the Company (by approval of the Board acting by Unanimous

25

 

Action) may, from time to time, propose to issue and sell, at the price and on the terms applicable
to such proposed sale.

          (b) If the Company proposes to issue any Equity Security that is not outstanding on the
Effective Date (each, an “Additional Interest”), it shall give each Member written notice (the
“Preemptive Notice”) of its intention, describing the price and the terms upon which the Company
proposes to issue and sell such Additional Interest. Each Member shall have ten (10) Business Days
from the date of receipt of any such Preemptive Notice to agree to purchase up to such Member’s
Percentage Interest of such Additional Interest for the price and upon the terms specified in the
Preemptive Notice by giving written notice to the Company and stating therein the exact percentage
(up to such Member’s Percentage Interest) of the Additional Interest to be purchased by such
Member.

          (c) In the event any Member fails to exercise its preemptive rights hereunder, the Company
shall have ninety (90) days thereafter to sell or enter into an agreement (pursuant to which the
sale of the Additional Interest covered thereby shall be closed) to sell such Additional Interest
in respect of which such Members’ rights were not exercised on substantially the same terms or
terms more favorable to the Company than specified in the applicable Preemptive Notice or as
otherwise expressly approved by each of the Members. If the Company has not sold such Additional
Interest in accordance with the foregoing within such ninety (90) day period, the Company shall not
thereafter issue or sell any of such Additional Interest without first offering such Additional
Interest to the Members in the manner provided in this Section 8.8.

     8.9 Tag-Along Rights.

          (a) If at any time or from time to time either KGH or Clairvest (such Member, the “Tagged
Member”) proposes to Transfer any of its Interest in the Company to a non-Affiliate of such Tagged
Member in one or more transactions (other than a Non-Control Transfer) and such Transfer has been
approved in accordance with Section 8.1(a), each other Member shall be afforded the opportunity to
join in each such Transfer as provided in Section 8.9(b), with each such Member being entitled to
Transfer a portion of its Interest equal to such Member’s Percentage Interest of the Interest the
Tagged Member proposes to Transfer.

          (b) Prior to the consummation of any transaction subject to this Section 8.9, the Tagged
Member shall offer (the “Tag-Along Offer”) in writing to each other Member to cause the proposed
Transferee to acquire from each Member a pro rata share of the Interests (as determined in
accordance with Section 8.9(a)) being purchased by the proposed Transferee on the same terms and
conditions as such proposed Transferee shall purchase the Interests from the Tagged Member. The
Tag-Along Offer shall set forth the name of the prospective Transferee and the price, form of
consideration and other material terms and conditions of the proposed purchase. Each of the
Members shall receive from the proposed Transferee the same consideration in the same form and at
the same time and such purchase shall be on the same terms and conditions. Each Member may accept
the Tag-Along Offer by irrevocably notifying the Tagged Member in writing within ten (10) days from
the receipt of the Tag-Along Offer (such notice, a “Tag-Along Acceptance”). If one or more Members
has delivered a Tag-Along Acceptance to the Tagged Member, the Tagged Member may not Transfer any
portion of its Interests to the proposed Transferee unless the proposed Transferee shall
simultaneously

26

 

purchase the entire pro rata share of the Interests (as determined in accordance with Section
8.9(a)) of each Member that has delivered a Tag-Along Acceptance to the Tagged Member (each such
Member a “Tag-Along Member”).

          (c) Each Tag-Along Member shall make the same representations, warranties, covenants,
indemnities and agreements to the proposed Transferee as the Tagged Member severally (as to itself
and its Interests) and not jointly, and each Tag-Along Member shall bear its pro rata share of any
closing costs associated with a Transfer in which it participates. In no event shall the aggregate
liability of any Member to the proposed Transferee exceed such Member’s pro rata portion of any
such liability, based on such Member’s portion of the total Interests included in the proposed
Transfer, or such Member’s net proceeds of such sale. The Tag-Along Members shall not be required
to enter into any non-competition agreement as a condition to participating in a Transfer in
accordance with this Section 8.9, and the Tagged Member shall represent to each Tag-Along Member
that there are no undisclosed side agreements or arrangements between the Tagged Member and any
Transferee.

          (d) A Transferee of Interests under this Section 8.9, may be admitted to the Company as a
substituted Member only upon satisfaction of the conditions set forth in this Section 8.

     8.10 Right of First Offer.

          (a) From and after the applicable Lockout Date, either KGH or Clairvest (such Member, the
“Selling Member”) may at any time give written notice (“ROFO Sale Notice”) to the other Members
setting forth the Selling Member’s intention to cause a Sale, subject to such other Members’ right
of first offer as set forth in this Section 8.10.

          (b) Either Clairvest or KGH (whichever is not the Selling Member, the “ROFO Offeror”) shall
have ten (10) days after receipt of the ROFO Sale Notice (the “ROFO Offer Period”) to send to the
Selling Member and Lakes a written offer to purchase the Selling Member’s entire Interest (the
“ROFO Offer”), subject to Lakes’s right to participate in such ROFO Offer as provided below. The
ROFO Offer shall set forth (i) an all cash gross purchase price for the Company without deduction
for any Company Debt (the “ROFO Valuation Amount”) and (ii) the net proceeds to be paid to the
Selling Member in respect of the Selling Member’s Interest, which shall be the amount that would be
distributed to the Selling Member under this Agreement if the Sale were consummated at the ROFO
Valuation Amount and all Company Debt or other payments required to be made as a result of the Sale
were repaid (the “ROFO Purchase Price”). The ROFO Offeror’s failure to deliver a ROFO Offer prior
to the expiration of the ROFO Offer Period shall have the same effect as if the ROFO Offeror sent a
ROFO Offer with a ROFO Valuation Amount and ROFO Purchase Price of zero and the Selling Member
delivered a ROFO Rejection as of the date of the expiration of the ROFO Offer Period. Lakes shall
have five (5) days after receipt of the ROFO Offer to send to the ROFO Offeror and the Selling
Member a written offer to purchase its ROFO Participation Percentage of the Selling Member’s
Interest on the terms set forth in the ROFO Offer (the “ROFO Participation Notice”). If Lakes
timely sends a ROFO Participation Notice, (x) the ROFO Offer shall be deemed to be amended, such
that the ROFO Offer shall constitute an offer by the ROFO Offeror and Lakes to collectively
purchase all of, and to each individually purchase its ROFO

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Participation Percentage of, the Selling Member’s Interest, and (y) Lakes shall be deemed to have
irrevocably appointed the ROFO Offeror as its agent for purposes of this Section 8.10 and the ROFO
Offeror may bind Lakes in connection herewith. The failure of Lakes to send a ROFO Participation
Notice prior to the expiration of such five (5) day period shall constitute an irrevocable waiver
by Lakes of its right to participate in such ROFO Offer (but shall not extinguish Lakes’s right to
send a ROFO Participation Notice with respect to any future ROFO Offer). The Selling Member shall
have ten (10) days after receipt of the ROFO Offer to send written notice to the other Members of
the Selling Member’s intention to accept or reject the ROFO Offer, as amended by the ROFO
Participation Notice, if any (a “ROFO Acceptance” or “ROFO Rejection,” respectively).

          (c) If the Selling Member sends a ROFO Acceptance:

               (i) Lakes (solely to the extent Lakes sent a ROFO Participation Notice) and the ROFO Offeror
shall within five (5) Business Days after delivery of the ROFO Acceptance pay to the Selling Member
a non-refundable cash down payment in an amount equal to ten percent (10%) of the ROFO Purchase
Price (the “ROFO Deposit”), which shall be paid entirely by the ROFO Offeror if Lakes does not send
a ROFO Participation Notice or pro rata in accordance with their respective ROFO Participation
Percentages by the ROFO Offeror and Lakes if Lakes has sent a ROFO Participation Notice. If the
ROFO Offeror fails to timely pay the ROFO Deposit (or its ROFO Participation Percentage thereof, as
applicable), then the ROFO Offeror’s rights under this Section 8.10 shall be deemed extinguished
and the Selling Member shall thereafter be free, at any time and from time to time, to cause a Sale
in an arms-length transaction with a third party at such price as the Selling Member determines to
be satisfactory without compliance with the provisions of this Section 8.10. If Lakes fails to
timely pay its ROFO Participation Percentage of the ROFO Deposit, then (x) the ROFO Offer shall be
deemed to revert to its original form as sent by the ROFO Offeror (as if Lakes never sent a ROFO
Participation Notice), (y) Lakes’s rights under this Section 8.10 shall be deemed extinguished and
(z) the ROFO Offeror shall be required to pay the remainder (i.e., Lakes’s ROFO Participation
Percentage) of the ROFO Deposit within an additional three (3) Business Days after the original
ROFO Deposit was due, or else shall be deemed to have failed to timely pay the ROFO Deposit in
accordance with the preceding sentence and the Selling Member shall be entitled to retain the
portion of the ROFO Deposit paid by the ROFO Offeror.

               (ii) If the ROFO Offeror (together with Lakes, as applicable) timely pays the ROFO Deposit,
the Selling Member, as seller, and the ROFO Offeror (on behalf of itself and Lakes, as applicable),
as purchaser, shall proceed to close the sale of the Selling Member’s Interest at the ROFO Purchase
Price on a date (the “ROFO Closing Date”) that is mutually acceptable to the Selling Member and the
ROFO Offeror, but in no event later than ninety (90) days after the date of the ROFO Acceptance
(subject to Section 8.10(e)), at a mutually agreeable location. On the ROFO Closing Date, (A) the
ROFO Offeror (together with Lakes, as applicable) shall pay to the Selling Member the ROFO Purchase
Price less the amount of the ROFO Deposit by wire transfer of immediately available funds and (B)
the Selling Member shall sell to the ROFO Offeror (and Lakes, as applicable) all of its Interest in
the Company, free and clear of all liens, encumbrances, claims, rights and options (but subject to
this Agreement) by the Selling Member. The Members shall each execute and deliver such documents as
are reasonably necessary to effectuate the Transfer of the Selling Member’s Interest to ROFO
Offeror.

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               (iii) The ROFO Offeror (and Lakes, as applicable) shall pay any transfer or similar taxes due
upon the sale to the ROFO Offeror (and Lakes, as applicable) of the Selling Member’s Interest under
this Section 8.10. Each of the Members shall be responsible for all of their respective other costs
and expenses, including attorneys’ fees, arising out of such sale.

               (iv) If the closing of the sale of the Selling Member’s Interest fails to occur by reason of a
default of the ROFO Offeror, then the Selling Member shall be entitled to retain the ROFO Deposit
as liquidated damages (except that to the extent Lakes paid a portion of the ROFO Deposit and did
not cause such failure to close, the Selling Member shall return to Lakes its ROFO Participation
Percentage of the ROFO Deposit), the defaulting ROFO Offeror shall no longer have the right to
appoint Voting Representatives to the Board and any Voting Representatives previously appointed by
the defaulting ROFO Offeror shall immediately be removed from the Board. The Members acknowledge
that it would be impractical and extremely difficult to estimate the damages which the Selling
Member may suffer in connection with a default by the ROFO Offeror under this Section. Therefore,
the parties have agreed that a reasonable estimate of the total net detriment that the Selling
Member would suffer in such event is and shall be the right of the Selling Member to retain the
ROFO Deposit (or the ROFO Offeror’s portion thereof) as liquidated damages and to cause the
defaulting ROFO Offeror to lose all representation to the Board, as its sole and exclusive remedy
under this Section 8.10. Such liquidated damages are not intended as a forfeiture or penalty within
the meaning of applicable law. In addition, the ROFO Offeror’s rights under this Section 8.10 shall
be deemed extinguished and the Selling Member shall thereafter be free, at any time and from time
to time, to cause a Sale in an arms-length transaction with a third party at such price as the
Selling Member determines to be satisfactory without compliance with the provisions of this Section
8.10.

               (v) If the closing of the sale of the Selling Member’s Interest fails to occur by reason of a
default of Lakes, then the Selling Member shall be entitled to retain Lakes’s ROFO Participation
Percentage of the ROFO Deposit as liquidated damages and Lakes shall be deemed a Defaulting Member
for purposes of Section 4.1(g). The Members acknowledge that it would be impractical and extremely
difficult to estimate the damages which the Selling Member may suffer in connection with a default
by Lakes under this Section 8.10(c)(v). Therefore, the parties have agreed that a reasonable
estimate of the total net detriment that the Selling Member would suffer in such event is and shall
be the right of the Selling Member to retain Lakes’s portion of the ROFO Deposit as liquidated
damages and to cause Lakes to be deemed a Defaulting Member, as its sole and exclusive remedy under
this Section 8.10. Such liquidated damages are not intended as a forfeiture or penalty within the
meaning of applicable law. In addition, Lakes’s rights under this Section 8.10 shall be deemed
extinguished. Following such failure to close (except to the extent the ROFO Offeror also caused
such failure to close, in which case the provisions of Section 8.10(c)(iv) shall apply) the ROFO
Offeror may elect to purchase the Selling Member’s entire Interest for the full ROFO Purchase Price
as if Lakes had never sent a ROFO Participation Notice by providing the Selling Member with a
written notice to such effect within two (2) Business Days after the originally scheduled ROFO
Closing Date (the “ROFO Continuation Period”). If the ROFO Offeror sends such notice within the
ROFO Continuation Period, the ROFO Closing Date shall be deferred by five (5) Business Days (or as
otherwise mutually agreed by the Selling Member and ROFO Offeror) and the ROFO Offeror’s failure to
timely close such sale shall be subject to the provisions of Section 8.10(c)(iv). The

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ROFO Offeror’s failure to send such notice prior to the expiration of the ROFO Continuation Period
shall have the same effect as if the Selling Member delivered a ROFO Rejection with respect to the
original ROFO Offer as of the date of expiration of the ROFO Continuation Period, and the ROFO
Offeror shall be entitled to a prompt refund of its ROFO Participation Percentage of the ROFO
Deposit.

               (vi) If the closing fails to occur solely by reason of default of the Selling Member (and not
by reasons beyond the direct or indirect control of the Selling Member), then the ROFO Offeror (on
behalf of itself and Lakes, as applicable) shall have the right to specific performance (for a
purchase price equal to the ROFO Purchase Price net of the ROFO Offeror’s and Lakes’s actual costs
incurred in connection with obtaining such specific performance), in addition to any other remedies
available at law or equity.

          (d) If the Selling Member sends a ROFO Rejection:

               (i) The Selling Member shall have a period of twelve months (the “ROFO Sale Period”), subject
to Section 8.10(e), from the date of the ROFO Rejection to cause the Company to enter into a
definitive agreement to effectuate the Sale (a “Sale Agreement”) with a bona fide third party
(other than an Affiliate of the Selling Member or any Permitted Transferee of the Selling Member)
for a purchase price based on a valuation of the Company of no less than 100% of the ROFO Valuation
Amount and payable at least eighty percent (80%) in cash and Marketable Securities and the balance
in any form, and the Selling member shall drag along each of the Members in connection with such
Sale. Each of the Members shall cooperate in such Sale and shall execute and deliver any and all
documents and instruments reasonably required to effectuate such Sale, including, without
limitation, the Sale Agreement; provided that the Sale Agreement shall include without limitation
that (A) the Selling Member, acting alone, shall have the authority necessary as aforesaid to bind
the Company and each of the Members and to execute any and all documents that may be required in
connection with such sale, (B) each of the Members shall receive from the proposed Sale the same
consideration in the same form and at the same time on the same terms and conditions, (C) each of
the Members shall make the same representations, warranties, covenants, indemnities and agreements
to the proposed purchaser as the Selling Member severally (as to itself and, if applicable, its
Interests) and not jointly, (D) each Member shall bear its own pro rata share of any closing costs
associated with the Sale, (E) in no event shall the aggregate liability of any Member to the
purchaser of the Company exceed such Member’s pro rata portion of any such liability, based on such
Member’s net proceeds of such Sale, (F) the Members shall not be required to enter into any
non-competition agreement in connection with such Sale and (G) the Selling Member shall represent
to each of the other Members that there are no undisclosed side agreements or arrangements between
the Selling Member and the purchaser of the Company.

               (ii) If the Selling Member fails to enter into a Sale Agreement prior to the expiration of the
ROFO Sale Period, the Selling Member shall again be required to comply with the provisions of this
Section 8.10 prior to effecting any Sale.

          (e) Notwithstanding anything to the contrary in this Section 8.10, (i) no Member shall be
permitted to purchase or sell an Interest in the Company or cause a Sale if the resulting Transfer
of Interest or Sale would be prohibited under the terms of any loan agreement

30

 

(that would not be paid off in connection with such Transfer or Sale) or would otherwise violate
any applicable Gaming Laws or otherwise jeopardize the License or any other approval by a Kansas
Gaming Authority, and (ii) the ROFO Closing Date and end of the ROFO Sale Period shall each be
extended solely to the extent a delay of the applicable signing or closing is required to comply
with any applicable Gaming Laws or to maintain the License or any other approval by a Kansas Gaming
Authority.

SECTION 9

DISSOLUTION AND WINDING UP

     9.1 Dissolution Events. The Company shall dissolve and shall commence winding up and
liquidating upon the first to occur of any of the following (each a “Dissolution Event”):

          (a) With the approval of Board acting by Unanimous Action to dissolve, wind up, and liquidate
the Company;

          (b) Upon the return of the Privilege Fee to the Company in connection with a Licensing
Withdrawal, except to the extent the Board acting by Special Unanimous Action agrees to continue
the Company; or

          (c) A judicial determination that an event has occurred that makes it unlawful, impossible or
impractical to carry on the Business.

The Members hereby agree that, notwithstanding any provision of the Act, the Company shall not
dissolve prior to the occurrence of a Dissolution Event.

     9.2 Winding Up. Upon the occurrence of a Dissolution Event, the Company shall continue solely
for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and
satisfying the claims of its creditors and Members, and no Member shall take any action that is
inconsistent with, or not necessary to or appropriate for, the winding up of the Company’s business
and affairs, provided that all covenants contained in this Agreement and obligations provided for
in this Agreement shall continue to be fully binding upon the Members until such time as the
Property has been distributed pursuant to this Section 9.2 and the Certificate has been canceled
pursuant to the Act. The Board, by Unanimous Action, shall be responsible for overseeing the
winding up and dissolution of the Company, which winding up and dissolution shall, to the extent
practical, be completed within ninety (90) days of the occurrence of the Dissolution Event. The
Board, by Unanimous Action, shall take full account of the Company’s liabilities and Property and
shall cause the Property or the proceeds from the sale thereof, to the extent sufficient therefor,
to be applied and distributed, to the maximum extent permitted by law, in the following order:

          (a) First, to creditors (including Members who are creditors, to the extent otherwise
permitted by law) in satisfaction of all of the Company’s Debts and other liabilities (whether by
payment or the making of reasonable provision for payment thereof), other than liabilities for
which reasonable provision for payment has been made and liabilities for Distribution to Members
under Section 18-601 or 18-604 of the Act;

31

 

          (b) Second, except as provided in this Agreement, to Members and former Members of the Company
in satisfaction of liabilities for Distribution under Section 18-601 or 18-604 of the Act; and

          (c) The balance, if any, to the Members in accordance with the positive balances in their
Capital Accounts, after giving effect to all contributions, Distributions and allocations for all
periods up to and including the date of the Distributions set forth in this Section 9.2.

Notwithstanding any other provision herein (but subject to Section 3.2(d)), in the event of a
liquidation and winding up of the Company, items of income, gain, gross revenue, deduction and loss
for the Allocation Year in which such liquidation and winding up occur, and for the preceding
Allocation Year if the federal income tax return of the Company for such Allocation Year has not
yet been filed, shall be specially allocated to the extent necessary first to cause the respective
Capital Account balances of the Members to be equal to the amounts that would be distributed to
them if the proceeds available for Distribution to the respective Members pursuant to Section
9.2(c) were instead distributed pursuant to Section 3.5. No Member shall receive additional
compensation for any services performed pursuant to this Section 9.

     9.3 Compliance With Certain Requirements of Regulations; Deficit Capital Accounts. If any
Member has a deficit balance in its Capital Account (after giving effect to all contributions,
Distributions and allocations for all Allocation Years, including the Allocation Year during which
such liquidation occurs), such Member shall have no obligation to make any contribution to the
capital of the Company with respect to such deficit, and such deficit shall not be considered a
debt owed to the Company or to any other Person for any purpose whatsoever. In the discretion of
the Liquidator, a pro rata portion of the Distributions that would otherwise be made to the Members
pursuant to this Section 9 may be:

          (a) Distributed to a trust established for the benefit of the Members for the purposes of
liquidating Company assets, collecting amounts owed to the Company, and paying any contingent or
unforeseen liabilities or obligations of the Company. The assets of any such trust shall be
distributed to the Members from time to time, in the reasonable discretion of the Liquidator, in
the same proportions as the amount distributed to such trust by the Company would otherwise have
been distributed to the Members pursuant to Section 9.2 hereof; or

          (b) Withheld to provide a reasonable reserve for Company liabilities (contingent or otherwise)
and to reflect the unrealized portion of any installment obligations owed to the Company, provided
that such withheld amounts shall be distributed to the Members as soon as practicable.

     9.4 Rights of Members. Except as otherwise provided in this Agreement, each Member shall look
solely to the Property of the Company for its rights to Distributions and has no right or power to
demand or receive Property other than cash from the Company. If the assets of the Company remaining
after payment or discharge of the debts or liabilities of the Company are insufficient to return
such Capital Contribution, the Members shall have no recourse against the Company or any other
Member.

32

 

     9.5 Notice of Dissolution/Termination.

          (a) In the event a Dissolution Event occurs or an event occurs that would, but for provisions
of Section 9.1, result in a dissolution of the Company, the Board shall, within thirty (30) days
thereafter, provide written notice thereof to each of the Members and to all other parties with
whom the Company regularly conducts business (as determined in the discretion of the Board).

          (b) Upon completion of the Distribution of the Company’s Property as provided in this Section
9, the Company shall be terminated, and the Liquidator shall cause the filing of the Certificate of
Cancellation pursuant to Section 18-203 of the Act and shall take all such other actions as may be
necessary to terminate the Company.

     9.6 Allocations During Period of Liquidation. Except as otherwise provided in Section 9.2
hereof, during the period commencing on the first day of the year during which a Dissolution Event
occurs and ending on the date on which all of the assets of the Company have been distributed to
the Members pursuant to Section 9.2 hereof, the Members shall continue to share Net Profits, Net
Losses, gain, loss and other items of Company income, gain, loss or deduction in the manner
provided in Section 3 hereof taking into account the provisions of Section 9.2 hereof.

     9.7 Character of Liquidating Distributions. All payments made in liquidation of the Interest
of a Member in the Company shall be made, to the maximum extent permitted by the Code, in exchange
for the interest of such Member in Property pursuant to Section 736(b)(1) of the Code, including
the interest of such Member in Company goodwill.

     9.8 The Liquidator.

          (a) Definition. The “Liquidator” shall mean a Person selected by the Board acting by Unanimous
Action.

          (b) Fees. If the Liquidator is not a Member or an Affiliate thereof, the Company is
authorized to pay a reasonable fee to the Liquidator for its services performed pursuant to this
Section 9 and to reimburse the Liquidator for its reasonable costs and expenses incurred in
performing those services.

          (c) Indemnification. The Company shall indemnify, save harmless, and pay all judgments and
claims against such Liquidator or any officers, directors, agents or employees of the Liquidator
relating to any liability or damage incurred by reason of any act performed or omitted to be
performed by the Liquidator, or any officers, directors, agents or employees of the Liquidator in
connection with the liquidation of the Company, including reasonable attorneys’ fees incurred by
the Liquidator, officer, director, agent or employee in connection with the defense of any action
based on any such act or omission, which attorneys’ fees may be paid as incurred, except to the
extent such liability or damage is caused by the gross negligence, fraud, intentional misconduct
of, or a knowing violation of the laws by the Liquidator which was material to the cause of action.

33

 

     9.9 Form of Liquidating Distributions. For purposes of making Distributions required by
Section 9.2 hereof, the Liquidator may determine whether to distribute all or any portion of
the Property in-kind or to sell all or any portion of the Property and distribute the proceeds
therefrom. In the case of an in-kind Distribution of any item of Property (whether in
liquidation or otherwise), the Capital Accounts of the Members shall be adjusted in accordance
with Section 1.704-1(b)(2)(iv)(e)(1) of the Regulations to reflect the manner in which the
unrealized income, gain, loss and deduction inherent in the Property (that has not previously
been reflected in the Capital Accounts) would be allocated among the Members if there were a
taxable disposition of the Property for its fair market value (taking into account Code
Section 7701(g)) on the date of the Distribution. Notwithstanding anything to the contrary
contained herein, the Liquidator may not make any in-kind Distribution of the Property unless
it is both (i) made pro rata in accordance with the respective Percentage Interests of the
Members and (ii) consented to by the Board acting by Unanimous Action.

SECTION 10

INDEMNIFICATION

     10.1 General. The Company, its receiver or its trustee, shall indemnify, defend and save
harmless and pay all judgments and claims against each of the Members and their control
persons, each Representative, in his or her capacity as such, and each Authorized Person
(except to the extent the Board expressly denies any Authorized Person the right to
indemnification pursuant to this Section 10.1), if any, of the Company (each, an “Indemnitee”)
from any liability, loss or damage incurred by any Indemnitee by reason of any act performed
or omitted to be performed by any Indemnitee in connection with the business of the Company,
including costs and attorneys’ fees and any amounts expended in the settlements of any claims
of liability, loss or damage; provided that if the liability, loss or claim arises out of any
action or inaction of an Indemnitee: (a) such Indemnitee must have determined, in good faith,
that his course of conduct was in the best interests of the Company; and (b) the action or
inaction did not constitute fraud, breach of fiduciary duty, gross negligence or willful
malfeasance by such Indemnitee; and, provided further, that the indemnification shall be
recoverable only from the assets of the Company and not any assets of the Members. The Company
shall advance to the Indemnitee the amount of such expenses and fees at the time they become
due, unless the Board (excluding any Representative who is an Indemnitee or an Affiliate of an
Indemnitee) makes a good faith reasonable determination that such Indemnitee will not be
entitled to indemnification according to the standard set forth above. If expenses have been
advanced to the Indemnitee and it is ultimately determined that such Indemnitee did not meet
the above standard then the amounts advanced to the Indemnitee shall be repaid by such
Indemnitee. If expenses have not been advanced to the Indemnitee and it is ultimately
determined that such Indemnitee met the above standard, then the Indemnitee shall be entitled
to indemnification as provided in the first sentence of this Section 10.1. The Company shall,
however, purchase and pay for insurance, including directors and officers liability insurance,
liability coverage and casualty and worker’s compensation, as would be customary for any
Person engaging in a similar business, and name the Indemnitees as additional or primary
insured parties, and the directors and officers liability insurance policy shall meet or
exceed the minimum requirements set forth on Schedule 10.1 delivered to each of the Members in
connection with this Agreement.

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     SECTION 11

MISCELLANEOUS

     11.1 Exclusivity. Each Member and each Member Parent agrees, on behalf of itself and its
Affiliates, that from the Effective Date until August 18, 2010, the Company and its Subsidiaries
shall be the exclusive entities through which such Member, such Member Parent and their respective
Affiliates shall pursue the License and Lottery Contract and any development, ownership, operation
or management opportunity relating to a casino in the South Central Gaming Zone in Kansas (each, an
“Opportunity”). Each Member and each Member Parent further agrees, on behalf of itself and its
Affiliates, that notwithstanding anything to the contrary herein, during the period commencing with
the earlier to occur of (i) its (or its Affiliate’s) withdrawal from the Company or (ii) the
dissolution of the Company, and ending on August 18, 2010, neither it nor any of its Affiliates
shall pursue or participate in any Opportunity without the prior written consent of each of the
Persons that are members of the Company as of the Effective Date, such consent to be given or
withheld in such Members’ sole discretion.

     11.2 Information. Each Member has the right, to the fullest extent granted under the Act, to
obtain from the Company: (a) a current list of the full name and last known business, residence or
mailing address of each Member; (b) a copy of the Certificate and of this Agreement (as well as any
signed powers of attorney pursuant to which any such document was executed); (c) a copy of the
Company’s federal, state and local income tax returns and reports for all Fiscal Years; (d) copies
of all material agreements of the Company; (e) copies of all additional information available to
the Company pursuant to the Management Agreement or otherwise reasonably available to the Company
and (f) to the extent such information is available to the Company, similar information to that set
forth in clauses (a) through (e) of this sentence related to any Subsidiary of the Company. In
addition, the Company shall deliver to each Member: (i) annual audited financial statements of the
Company within one hundred twenty (120) days after the close of each Fiscal Year, (ii) quarterly
unaudited financial statements of the Company within forty-five (45) days after the close of each
fiscal quarter, (iii) monthly unaudited financial statements within thirty (30) days after the end
of each fiscal month and (iv) K-1’s for each Member within ninety (90) days of the close of each
Fiscal Year.

     11.3 Notices. Any notice, payment, demand, or communication required or permitted to be given
by any provision of this Agreement shall be in writing and shall be deemed to have been delivered,
given, and received for all purposes (i) if delivered personally to the Person or to an officer of
the Person to whom the same is directed, or (ii) when the same is actually received, if sent either
by registered or certified mail, postage and charges prepaid, or by facsimile, if such facsimile is
followed by a hard copy of the facsimile communication sent promptly thereafter by registered or
certified mail, postage and charges prepaid, addressed as follows, or to such other address as such
Person may from time to time specify by notice to the Company: (a) if to the Company, to the
address determined pursuant to Section 1.4 hereof; (b) if to the Members, to the addresses set
forth on Appendix II; (c) if to the Representatives, to the addresses set forth on Appendix III;
and (d) if to the Board, then to each of the Representatives.

     11.4 Binding Effect. Except as otherwise provided in this Agreement, every covenant, term, and
provision of this Agreement shall be binding upon and inure to the benefit of the Members and their
respective successors, Transferees, and assigns.

35

 

     11.5 Construction. Every covenant, term, and provision of this Agreement shall be construed
simply according to its fair meaning and not strictly for or against any Member.

     11.6 Time. In computing any period of time pursuant to this Agreement, the day of the act,
event or default from which the designated period of time begins to run shall not be included, but
the time shall begin to run on the next succeeding day. The last day of the period so computed
shall be included, unless it is a Saturday, Sunday or legal holiday, in which event the period
shall run until the end of the next day which is not a Saturday, Sunday or legal holiday.

     11.7 Headings. Section and other headings contained in this Agreement are for reference
purposes only and are not intended to describe, interpret, define, or limit the scope, extent, or
intent of this Agreement or any provision hereof.

     11.8 Severability. Except as otherwise provided in the succeeding sentence, every provision
of this Agreement is intended to be severable, and, if any term or provision of this Agreement is
illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the
validity or legality of the remainder of this Agreement. The preceding sentence of this Section
11.8 shall be of no force or effect if the consequence of enforcing the remainder of this Agreement
without such illegal or invalid term or provision would be to cause any Member to lose the material
benefit of its economic bargain.

     11.9 Incorporation by Reference. Every exhibit, appendix, schedule, and other addendum
attached to or delivered in connection with this Agreement and referred to herein is incorporated
in this Agreement by reference unless this Agreement expressly otherwise provides.

     11.10 Variation of Terms. All terms and any variations thereof shall be deemed to refer to
masculine, feminine, or neuter, singular or plural, as the identity of the Person or Persons may
require.

     11.11 Governing Law; Venue; Waiver of Jury Trial. The laws of the State of Delaware shall
govern the validity of this Agreement, the construction of its terms, and the interpretation of the
rights and duties arising hereunder. The Members hereby agree that if any action is brought to
enforce or interpret this Agreement, exclusive venue for such action shall be in the Courts of the
State of Delaware or the Courts of the United States sitting in the State of Delaware, and each
Member hereby irrevocably consents, on behalf of itself and its Affiliates, to the personal and
subject matter jurisdiction of such Courts. Each Representative and each Member hereby waives any
right to trial by jury.

     11.12 Counterpart Execution. This Agreement may be executed in any number of counterparts
with the same effect as if all of the Members had signed the same document. All counterparts shall
be construed together and shall constitute one agreement.

     11.13 Specific Performance. Each Member agrees with the other Members that the other Members
would be irreparably damaged if any of the provisions of this Agreement are not performed in
accordance with their specific terms and that monetary damages would not provide an adequate remedy
in such event. Accordingly, it is agreed that, in addition to any other remedy to which the
nonbreaching Members may be entitled, at law or in equity, the nonbreaching

36

 

Members shall be entitled to injunctive relief to prevent breaches of the provisions of this
Agreement and specifically to enforce the terms and provisions hereof in any action instituted in
any court of the United States or any state thereof having subject matter jurisdiction thereof.

     11.14 Representations and Warranties.

          (a) Each of the Members, severally and not jointly, represents, warrants and covenants to each
other Member and to the Company as of the date hereof that with respect only to such Member and
(where specified herein) all holders of equity interests in such Member:

               (i) this Agreement has been duly executed and delivered by such Member and constitutes the
valid and legally binding agreement of such Member enforceable in accordance with its terms against
such Member except as enforceability hereof may be limited by bankruptcy, insolvency, moratorium
and other similar laws relating to creditors’ rights generally and by general equitable principles;

               (ii) the execution and delivery of this Agreement by such Member does not, and the performance
of its duties and obligations hereunder will not, result in a breach of any of the terms,
conditions or provisions of, or constitute a default under, or give rise to a right to terminate,
cancel or accelerate under, or the creation of a lien, pledge or other encumbrance pursuant to, any
indenture, mortgage, deed of trust, credit agreement, note or other evidence of indebtedness, or
any material lease or other agreement, or any material license, permit, franchise or certificate,
to which such Member is a party or by which it is bound or to which its properties are subject, or
require any authorization or approval under or pursuant to any of the foregoing, or violate any
statute, regulation, law, order, writ, injunction, judgment or decree to which such Member or its
property is subject, and which would adversely affect such Member’s ability to carry out its
obligations under this Agreement;

               (iii) such Member is not in default (nor has any event occurred that with notice, lapse of
time or both, would constitute a default) in the performance of any material obligation, agreement
or condition contained in any indenture, mortgage, deed of trust, credit agreement, note or other
evidence of indebtedness or any lease or other agreement, or any license, permit, franchise or
certificate, to which it is a party or by which it is bound or to which its properties are subject,
nor is it in violation of any statute, regulation, law, order, writ, injunction, judgment or decree
to which it or its property is subject, which default or violation would adversely affect such
Member’s ability to carry out its obligations under this Agreement;

               (iv) there is no litigation, investigation or other proceeding pending or, to the knowledge of
such Member, threatened against such Member or any of its Affiliates or their property that, if
adversely determined, would materially and adversely affect such Member’s ability to carry out its
obligations under this Agreement;

               (v) to such Member’s knowledge no consent, approval or authorization of, or filing,
registration or qualification with, any Governmental Entity (other than Kansas Gaming Authorities)
on the part of such Member is required for the execution and delivery of this Agreement by such
Member and the performance of its obligations and duties hereunder;

37

 

          (b) Each of the Members, severally and not jointly, represents, warrants and covenants to each
other Member and to the Company as of the date hereof that with respect only to such Member and
(where specified herein) all holders of equity interests in such Member:

               (i) such Member has acquired its Interest for its own account for investment purposes and not
with a view to the resale or distribution thereof, and has had access to any and all information
necessary to arrive at its decision to acquire its Interest;

               (ii) such Member and all holders of equity interests in such Member (in each case to the
extent an individual), is over the age of 21 years and a resident or citizen of the United States
or Canada and has no present intention of becoming a resident of any other jurisdiction;

               (iii) such Member or any holder of equity interests in such Member has not authorized any
Person to act as its purchaser representative in connection with this transaction; each such Member
and each such holder of equity interests in such Member is experienced in investment and business
matters and is familiar with limited liability companies and, with the assistance of such
independent legal counsel or other advisors to assist in evaluating a proposed investment in the
Company (herein “Investor Advisor”), have such knowledge and experience in financial and business
matters that such Member and each holder of equity interests in such Member is capable of
evaluating the merits and risks of the prospective investment in the Company on the terms and
conditions set forth in the Agreement, which such Member and each holder of equity interests in
such Member has read and understood; in connection with the review of this Agreement, each such
Member and each holder of equity interests in such Member has been provided with such other
information or documentation such Member or each holder of equity interests in such Member or the
Investor Advisor thereto may have requested and received; and such Member and each holder of equity
interests in such Member has consulted with such independent legal counsel or other advisors to the
extent considered appropriate by such Member and each holder of equity interests in such Member in
order to assist such Member and each holder of equity interests in such Member in evaluating the
proposed investment in the Company;

               (iv) such Member and each holder of equity interests in such Member acknowledges it is an
“accredited investor” as that term is defined in Regulation D under the Securities Act; that the
Interests are speculative investments, which involve a high degree of risk of loss of the entire
investment; that there are substantial restrictions on the transferability of the Interests held by
Members and that they will not be, and such Member has no rights to require that the Interests be,
registered under the Securities Act; that there will be no public market for the Interests and,
accordingly, each Member may have to hold its Interests indefinitely; and that it may not be
possible to liquidate at any time the investment in the Company;

               (v) such Member and each holder of equity interests in such Member has adequate means of
providing for its current needs and possible personal contingencies, and have no need for liquidity
of the proposed investment in the Company; and (a) can afford to (x) hold unregistered securities
for an indefinite period of time; and (y) sustain a complete loss of the entire amount of its
proposed investment in the Company and, at the same time, bear any tax liability that may result if
such investment in the Company is lost;

38

 

               (vi) such Member and each holder of equity interests in such Member (i) has been furnished
with a copy of this Agreement, and such other information and documentation in connection with its
acquisition of its Interest as has been requested; (ii) has been afforded the opportunity to ask
questions of, and receive answers from, the Company and those persons acting on its behalf
concerning the terms and conditions of its acquisition of its Interest and to obtain any additional
information, to the extent such persons possess such information or can acquire it without
unreasonable effort or expense, necessary to verify the information furnished; and (iii) has
availed itself of such opportunity to the extent considered appropriate in order to evaluate the
merits and risks of the proposed investment; and

               (vii) such Member and each holder of equity interests in such Member understands that the
Company has no obligation or present intention to register the Interests under the Securities Act
or to make available public information (in the form of reports pursuant to Sections 13 or 15 of
the Exchange Act or otherwise) without which information, resale without registration pursuant to
Rule 144 under the Securities Act will not be available and no representations to the contrary have
been made in connection with this proposed investment.

          (c) In addition to the representations, warranties and covenants set forth in Sections
11.14(a) and 11.14(b), KGH represents, warrants and covenants to each of the other Members and the
Company as of the date hereof that the ownership and control structure of KGH is shown on Schedule
11.14 delivered to each of the Members in connection with this Agreement and KGH shall promptly
notify the Board of any changes in such ownership or control structure.

          (d) In addition to the representations, warranties and covenants set forth in Sections
11.14(a) and 11.14(b), each of Clairvest and Lakes, severally and not jointly, represents, warrants
and covenants to KGH and to the Company as of the date hereof that the ownership and control
structure of such Member is shown on Schedule 11.14 delivered to each of the Members in connection
with this Agreement and such Member shall promptly notify the Board of any changes in such
ownership or control structure.

     11.15 Entire Agreement. This Agreement constitutes the entire agreement among the parties with
respect to the subject matter hereof and supersedes all prior agreements between the parties with
respect thereto.

     11.16 Waiver of Rights and Breaches. No failure or delay on the part of any party to exercise
any rights given to such party hereunder or by law shall constitute a waiver thereof, or act to
estop such party from asserting or exercising such rights at a later time, nor shall any single or
partial exercise of such right preclude the further exercise thereof or of any other right. The
waiver by a party of any breach of any provision hereof shall not be deemed to be a waiver of any
subsequent breach thereof, or of any breach of any other provision hereof.

     11.17 Time of Essence. Time is of the essence of the Agreement and each of its provisions.

     11.18 Non-disclosure. The Members agree not to divulge to third parties the terms of this
Agreement or any other proprietary or confidential information exchanged between the

39

 

Members pursuant to or in connection with this Agreement, unless (a) the information is required to
be disclosed by law or regulations or pursuant to judicial order, (b) information is at the time of
disclosure already in the public domain through no fault of such party, (c) such information is
disclosed to potential Transferees or potential investors in the Members or their Affiliates, or in
the ordinary course of the Business, in each case on a confidential basis or (d) mutually agreed by
the Members. This prohibition shall not apply to disclosures by any Member to its attorneys,
accountants or other professional advisers, or disclosure by the Members to their respective
Affiliates (provided that each of the Members shall cause its respective Affiliates to comply with
the terms of this Section 11.18). In situations where disclosure of the terms of this Agreement to
regulatory, governmental or judicial entities is required by law or regulations (or otherwise
required by a Kansas Gaming Authority or Member Gaming Authority), the parties will make reasonable
efforts to secure confidential treatment of the economic terms of this Agreement by such entities;
provided, however, this disclosure restriction shall not prohibit any Member from making any
filings in compliance with federal or state securities laws as it deems legally necessary. The
parties agree to consult with each other and cooperate regarding any press releases regarding this
Agreement and the relationships described herein.

[The remainder of this page is intentionally left blank.]

40

 

     IN WITNESS WHEREOF, the Members have executed and entered into this
Agreement as of the day first above set forth.

	 	 	 	 	 
	 	KANSAS GAMING HOLDINGS LLC

 	 
	 	By:  	Kansas Gaming Holdings Investor LLC,                                                                                                   	 
	 	 	its Managing Member 	 
	 	 	 
	 	By:  	

 	 
	 	 	Name:  	Steven E.  Orbuch 	 
	 	 	Title:  	Authorized Person 	 
	 
	 	

As a Member Parent solely for purposes of Section
11.1:

OCH-ZIFF REAL ESTATE ADVISORS LP

 	 
	 	By:  	
 	 
	 	 	Name:  	Steven E. Orbuch 	 
	 	 	Title:  	Authorized Person 	 

Limited Liability Company Agreement of Kansas Gaming Partners LLC

 

 

	 	 	 	 	 
	 	As a Member Parent solely for purposes of Section 11.1:

    FOXWOODS DEVELOPMENT COMPANY, LLC
 	 
	 	By:  	
 	 
	 	 	Name:  	Gary D. Armentrout 	 
	 	 	Title:  	President 	 

Limited Liability Company Agreement of Kansas Gaming Partners LLC

 

 

	 	 	 	 	 
	 	CVG KANSAS GAMING LLC

 	 
	 	By:  	
 	 
	 	 	Name:  	Jeff Parr	 
	 	 	Title:  	Co-Chief Executive Officer / Managing Director 	 
	 
	 	As a Member Parent solely for purposes of Section 11.1:

CLAIRVEST GROUP, INC.

 	 
	 	By:  	
 	 
	 	 	Name:  	Jeff Parr 	 
	 	 	Title:  	Co-Chief Executive Officer / Managing Director 	 
	 
	 	 	 
	 	By:  	                                          
 	 
	 	 	Name:  	Ken Rotman 	 
	 	 	Title:  	Co-Chief Executive Officer / Managing Director 	 

Limited Liability Company Agreement of Kansas Gaming Partners LLC

 

 

	 	 	 	 	 
	 	LAKES KANSAS CASINO MANAGEMENT,

LLC

 	 
	 	By:  	
 	 
	 	 	Name:  Timothy J. Cope	 	 
	 	 	Title:     President / CFO	 
	 
	 	As a Member Parent solely for purposes of Section 11.1:

LAKES ENTERTAINMENT, INC.

 	 
	 	By:  	
 	 
	 	 	Name:  Timothy J. Cope	 	 
	 	 	Title:     President / CFO	 	 

Limited Liability Company Agreement of Kansas Gaming Partners LLC

 

 

APPENDIX
I

DEFINED TERMS

     “Act”
means the Delaware Limited Liability Company Act, 6 Del. C.
§18-101 et seq., as amended
from time to time (or any corresponding provisions of succeeding law).

     “Actual Capital Contributions” means, with respect to a Member as of a given time, the sum of
all Capital Contributions actually made by such Member (including any Catch-Up Contribution), but
excluding amounts funded by such Member as a Contribution Loan and the amount of any Unfunded
Capital Contributions of such Member that were funded as a Contribution Loan by another Member.

     “Additional Funding Date” has the meaning provided in Section 2.3(a)(ii).

     “Additional Funding Notice” has the meaning provided in Section 2.3(a)(ii).

     “Additional Interest” has the meaning provided in Section 8.8(b).

     “Affiliate” means, with respect to any Person, (i) any Person directly or indirectly
controlling, controlled by or under common control with such Person or (ii) any officer, director,
member or trustee of such Person. For purposes of this definition, the terms “controlling,”
“controlled by” or “under common control with” shall mean the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of a Person or entity,
whether through the ownership of voting securities, by contract or otherwise, or the power to elect
at least 25% of the directors, members, or Persons exercising similar authority with respect to
such Person or entities. Notwithstanding anything to the contrary herein, a Representative will be
deemed an Affiliate of a Person if the Representative is (x) appointed to the Board by such Person,
(y) appointed to the Board by an Affiliate of such Person or (z) otherwise an Affiliate of such
Person under the terms of this definition.

     “Agreement” means this Limited Liability Company Agreement of Kansas Gaming Partners LLC,
including the Appendices and any Schedules attached hereto, as the same shall be amended from time
to time. Words such as “herein,” “hereinafter,” “hereof,” “hereto” and “hereunder” refer to this
Agreement as a whole, unless the context otherwise requires.

     “Allocation Year” means (i) the period commencing on the Effective Date and ending on the
first December 31 after the Effective Date, (ii) any subsequent twelve (12) month period commencing
on January 1 and ending on December 31 or (iii) any portion of the period described in clauses (i)
or (ii) for which the Company is required to allocate Net Profits, Net Losses and other items of
Company income, gain, loss, deduction or other items pursuant to Section 3 hereof.

     “Authorized Person” has the meaning provided in Section 4.3(a).

     “Available Cash” means, for any period, all receipts of the Company and its Subsidiaries
during such period derived from the conduct of the Business (excluding Capital Contributions but
including any amounts released from Reserves), reduced by (a) all cash expenditures

Appendix I—Page 1

 

 

(including without limitation any management fees) made by the Company or its Subsidiaries during
such period (but not including expenditures made from Capital Contributions or Reserves during such
period), (b) additions to Reserves, (c) debt service payments and (d) taxes. For purposes of this
definition, “Reserves” means funds or other amounts set aside or otherwise allocated or designated
for the next fiscal quarter by the Board, in its reasonable discretion, (i) to pay taxes, insurance
premiums, reasonably necessary future or contingent obligations, and all other costs, expenses, and
liabilities incident to the Business, including amounts that may be needed to fund the Company’s
operating deficits or to service the Company’s debt obligations or to otherwise comply with the
requirements of such debt obligations; or (ii) to allow the Company to make repairs, capital
replacements, or renewals.

     “Board” has the meaning provided in Section 4.1(a).

     “Business” means, on behalf of the Company and/or any of its Subsidiaries, (i) to apply for
the Lottery Contract, (ii) to develop, construct, operate, own, repair, replace, maintain and
manage the Project, (iii) to conduct such lawful business activities as the Board, by Unanimous
Action, may deem appropriate related to the ownership, development and operation of the Project,
(iv) to conduct such other lawful business activities related or incidental to any of the
foregoing, provided that all of the foregoing are substantially consistent with clauses (i), (ii)
and (iii) hereof and (v) to exercise all powers enumerated in the Act necessary to the conduct,
promotion or attainment of the purposes set forth herein and for the protection and benefit of the
Company.

     “Business Day” means a non-weekend day of the year on which banks are not authorized to close
in Wichita, Kansas.

     “Call Notice” has the meaning provided in Section 2.2(a)(i).

     “Capital Account” when used with respect to any Member means the capital account maintained
for such Member in accordance with Section 2.5 hereof, as such capital account may be increased or
decreased from time to time pursuant to the provisions of Section 2.5 and otherwise adjusted
pursuant to the terms of this Agreement.

     “Capital Budget” means the annual budget for estimated replacement and maintenance capital
expenditures (including, without limitation expenditures for furniture, fixtures and equipment, as
well as for renovations, alterations, and rebuilding of the Project) relating to the Project after
Project Opening.

     “Capital Commitment” when used with respect to any Member means the amount set forth opposite
such Member’s name on Appendix II hereto, as such
Appendix II may be amended in accordance with
Section 2.2(b) hereof.

     “Capital Contributions” means the amount of money contributed, or deemed by the Board acting
by Unanimous Action to be contributed pursuant to the terms of this Agreement, to the Company by a
Member on the date of contribution and shall include (i) the contributions of such Member made
pursuant to Sections 2.1, 2.2 and 2.3 and (ii) to the extent agreed to by the Board acting by
Unanimous Action, a Member’s payments made to third party creditors of the Company with respect to
Company obligations to the extent such Member is required by this

Appendix I—Page 2

 

 

Agreement to make such additional Capital Contributions, unless and until reimbursed by the
Company.

     “Catch-up Contribution” has the meaning provided in Section 2.1(a)(iii).

     “Catch-up Distribution” has the meaning provided in Section 2.1(a)(iii).

     “Certificate” means the certificate of formation filed with the Secretary of State of the
State of Delaware pursuant to the Act to form the Company, as originally executed and amended,
modified, supplemented or restated from time to time, as the context requires.

     “Certificate of Cancellation” means a certificate filed in accordance with Section 18-203 of
the Act.

     “Chisholm” has the meaning set forth in the recitals hereof.

     “Clairvest” has the meaning provided in the caption to this Agreement.

     “Code” means the United States Internal Revenue Code of 1986, as amended from time to time.

     “Commitment Amendment Rules” means:

     (a) To the extent the Estimated Total Equity is greater than or equal to $100 million at the
time of an amendment of the Members’ Capital Commitments pursuant to Sections 2.2(b)(ii) or
2.2(b)(iii), such amendment shall (i) not increase the Capital Commitments of KGH and Clairvest to
be greater than their respective Capital Commitments as of the Effective Date, (ii) leave the
Capital Commitments of KGH and Clairvest in the same ratio as they are on the date hereof, (iii)
not alter the Capital Commitment of Lakes and (iv) result in the sum of the Members’ Capital
Commitments being equal to the Estimated Total Equity at such time; and

     (b) To the extent the Estimated Total Equity is less than $100 million at the time of an
amendment of the Members’ Capital Commitments pursuant to Sections 2.2(b)(ii) or 2.2(b)(iii), then
each of KGH and Clairvest shall promptly send a notice to each of the other Members setting forth
(A) whether or not it desires to reduce Lakes’s Capital Commitment and (B) if so, whether it
desires to assume all of such reduction or only its pro rata portion of such reduction, and the
following procedures shall apply:

          (i) If neither KGH nor Clairvest elects to reduce Lakes’s Capital Commitment, then the Capital
Commitments shall be adjusted in accordance with clause (a) of this definition notwithstanding that
the Estimated Total Equity is less than $100 million;

          (ii) If both KGH and Clairvest elect to reduce Lakes’s Capital Commitment, then the Members’
Capital Commitments shall be adjusted such that (x) the Members’ Capital Commitments are in the
same ratio as if the Estimated Total Equity were equal to $100 million (and the Capital Commitments
were adjusted in accordance with clause (a) of this definition) and (y) the sum of the Members’
Capital Commitments is equal to the Estimated Total Equity at such time;

Appendix I—Page 3

 

 

          (iii) If only one of KGH or Clairvest elects to reduce Lakes’s Capital Commitment and such
Member (the “Electing Member,” with the other of KGH or Clairvest being referred to as the
“Non-Electing Member”) desires to assume all of such reduction, then the Members’ Capital
Commitments shall be adjusted such that (x) the Non-Electing Member’s Capital Commitment is equal
to what it would be under clause (b)(i) of this definition, (y) Lakes’s Capital Commitment is equal
to what it would be under clause (b)(ii) of this definition and (z) the Electing Member’s Capital
Commitment is equal to the difference of the Estimated Total Equity minus the sum of Lakes’s and
the Non-Electing Member’s Capital Commitments; or

          (iv) If only one of KGH or Clairvest elects to reduce Lakes’s Capital Commitment and the
Electing member desires to assume only its pro rata portion of such reduction, then the Members’
Capital Commitments shall be adjusted such that (x) the Non-Electing Member’s Capital Commitment is
equal to what it would be under clause (b)(i) of this definition, (y) the Electing Member’s Capital
Commitment is equal to what it would be under clause (b)(ii) of this definition and (z) Lakes’s
Capital Commitment is equal to the difference of the Estimated Total Equity minus the sum of the
Electing Member’s and the Non-Electing Member’s Capital Commitments.

     “Commitment Completion” means the date on which each of the Members either (a) has funded
Actual Capital Contributions greater than or equal to its Capital Commitment or (b) if all
outstanding Contribution Loans as of such date were converted pursuant to Section 2.3(b), such
Member’s Percentage Interest would be reduced to zero.

     “Commitment Percentage” means, with respect to a Member, a fraction, expressed as a
percentage, the numerator of which is such Member’s Capital Commitment and the denominator of which
is the sum of all the Members’ Capital Commitments.

     “Company” has the meaning set forth in the recitals hereof.

     “Company Competitor” means any Person (other than a Member or an Affiliate of a Member) owning
or operating a casino within 100 miles of the Project.

     “Company Counsel” means outside legal counsel to the Company selected by the mutual agreement
of (a) Vedder Price P.C. and Bryan Cave LLP or (b) two law firms selected by the Board acting by
Unanimous Action.

     “Continuing Member” has the meaning provided in Section 5.1(b)(i).

     “Contribution Loan” has the meaning provided in Section 2.3(a)(iii).

     “Contribution Percentage” means, with respect to a Member, a fraction, expressed as a
percentage, the numerator of which is the sum of such Member’s Actual Capital Contributions and any
amounts funded by such Member as a Contribution Loan and the denominator of which is the sum of all
the Members’ Actual Capital Contributions and any amounts funded by any Member as a Contribution
Loan.

Appendix I—Page 4

 

 

     “Conversion Interest” means the Interest in the Company that, in connection with the
conversion of a Contribution Loan in accordance with Section 2.3(b), is effectively transferred
from a Non-Funding Member to the Funding Member holding such Contribution Loan, by means of the
reduction of such Non-Funding Member’s Percentage Interest and the increase in such Funding
Member’s Percentage Interest.

     “Court” means any court or arbitration tribunal of the United States, any domestic state, or
any foreign country, and any political subdivision thereof.

     “Debt” means (i) any indebtedness for borrowed money or the deferred purchase price of
property as evidenced by a note, bonds, or other instruments, (ii) obligations as lessee under
capital leases, (iii) obligations secured by any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind existing on any asset owned or held by the Company whether or not the
Company has assumed or become liable for the obligations secured thereby, (iv) any obligation under
any interest rate swap agreement, (v) accounts payable and (vi) obligations under direct or
indirect guarantees of (including obligations (contingent or otherwise) to assure a creditor
against loss in respect of) indebtedness or obligations of the kinds referred to in clauses (i),
(ii), (iii), (iv) and (v) above, provided that Debt shall not include obligations in respect of any
accounts payable that are incurred in the ordinary course of the Company’s business and are not
delinquent or are being contested in good faith by appropriate proceedings.

     “Defaulting Member” has the meaning provided in Section 4.1(g).

     “Determination Date” has the meaning provided in Section 2.3(a).

     “Determination Period” has the meaning provided in Section 2.3(a)(i).

     “Discontinuing Member” has the meaning provided in Section 5.1(b)(i).

     “Dissolution Event” has the meaning provided in Section 9.1.

     “Distribution” means any cash, securities, property or other assets distributed to a Member by
the Company.

     “Effective Date” means the date of this Agreement.

     “Equity Securities” means any equity securities of the Company and its successors and assigns,
whether now or hereafter authorized, and any instrument, including any Debt instrument, convertible
into or exchangeable for such equity securities.

     “Estimated Total Equity” means the Board’s (by Unanimous Action) good faith estimate as of a
given time of the aggregate Capital Contributions that will be required from the Members to
complete the Project (including Capital Contributions made both before and after the determination
of Estimated Total Equity) based on the Board’s reasonable estimate of the total third party debt
financing that it expects the Company and/or its Subsidiary to obtain; provided that to the extent
the Board is unable to agree by Unanimous Action on the Estimated Total Equity and the Company
enters into any term sheet, commitment letter or agreement to obtain bona fide third party debt
financing in accordance with the terms of this Agreement, then

Appendix I—Page 5

 

 

upon execution of such term sheet, commitment letter or agreement the Estimated Total Equity shall
be deemed to be equal to the difference of $150 million minus the amount of debt financing provided
for by such documents.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, together with the rules
and regulations promulgated thereunder.

     “Fiscal Year” means the period commencing on the Effective Date and ending on the first
December 31 after the Effective Date or any subsequent twelve (12) month period commencing on
January 1 and ending on December 31.

     “Funding Deadline” has the meaning provided in Section 2.3(a)(i).

     “Funding Member” has the meaning provided in Section 2.3(a)(i).

     “Funding Notice” has the meaning provided in Section 2.3(a)(i).

     “Gaming Laws” means the Kansas Expanded Lottery Act, as amended, and the rules and regulations
promulgated pursuant thereto.

     “Governmental Entity” means any government body, agency, authority, bureau, board, commission,
Court, department, official, political subdivision, tribunal, tribal regulatory authority or other
instrumentality of any government, whether federal, state, local, domestic or foreign.

     “Hard Deposit Time” has the meaning provided in Section 5.1(b).

     “Indemnitee” has the meaning provided in Section 10.1.

     “Initial Capital Budget” means the all-inclusive capital and overall budget for the
development of the Project, including without limitation the Privilege Fee; the cost of land
acquired by Chisholm; all hard and soft costs of construction, design and development of the
Project; the cost of acquiring furniture, fixtures and equipment attached to or used within the
Project (including without limitation gaming equipment and all operating systems); the cost of
on-site and off-site infrastructure improvements (including public and private roadways and
utilities); professional fees (including construction, design, and legal professionals and other
consultants); all expenses, charges or fees chargeable to Chisholm by a Kansas Gaming Authority
Lottery or any local Governmental Entity in conjunction with or incurred for endorsement or any
other required approvals; and pre-opening costs and working capital.

     “Interest” means collectively, a Member’s share of the profits and losses of the Company and a
Member’s right to receive Distributions.

     “Investment Vehicle” means, with respect to a Member, a limited liability company, limited
partnership or other Person (a) in which the Member Parent (or Affiliate of such Member Parent)
that is an Affiliate of such Member is (directly or indirectly) the managing member, general
partner or equivalent control person and (b) in which the non-managing members, limited partners or
equivalent equity holders (or their respective Affiliates) (i) held such interests

Appendix I—Page 6

 

 

as of the Effective Date or (ii) have historically invested in investment funds or other investment
entities managed by such Member Parent or its Affiliates.

     “Investor Advisor” has the meaning provided in Section 11.14(b)(iii).

     “Kansas Gaming Authority” means the Kansas Lottery Commission and the Kansas Racing and Gaming
Commission and their respective successors and assigns.

     “KGH” has the meaning provided in the caption to this Agreement.

     “Lakes” has the meaning provided in the caption to this Agreement.

     “License” means any license, permit, authorization, consent, approval, finding of suitability
or qualification issued or made by a Kansas Gaming Authority, and required in order to conduct a
gaming business, either alone or in combination with any one or more other businesses.

     “Licensing” means the execution of the final Lottery Contract by the Company or its Subsidiary
and the Kansas Lottery Commission, final selection of the Company or its Subsidiary by the Lottery
Gaming Facility Review Board, and final approval of the Company’s or its Subsidiary’s suitability
to operate the Project by the Kansas Racing and Gaming Commission, including all approvals related
thereto.

     “Licensing Withdrawal” has the meaning provided in Section 5.1(b).

     “Liquidator” has the meaning provided in Section 9.8(a).

     “Lockout Date” means (a) with respect to KGH, the second anniversary of the Project Opening
and (b) with respect to Clairvest, the fourth anniversary of the Project Opening.

     “Lottery Contract” means the management agreement between Chisholm and the Kansas Lottery
Commission, dated as of August 25, 2009, pursuant to which Chisholm will serve as manager for the
single gaming facility approved under the Kansas Expanded Lottery Act to be located in Sumner
County, Kansas.

     “Management Agreement” means any Development Services and Management Agreement to be entered
into by and between Lakes and Chisholm.

     “Marketable Securities” means publicly tradable securities that meet each of the following
tests, assuming (whether or not such assumption is actually true) that no Member owned any
securities issued by the issuer of such securities prior to obtaining such Marketable Securities:

     (a) Acquisition of the Marketable Securities by a Member would not cause such Member to be
required to file a Schedule 13G or 13D pursuant to Regulation 13D promulgated under the Exchange
Act, or any equivalent filing required in Canada; and

Appendix I—Page 7

 

 

     (b) The total amount of such securities to be acquired by all of the Members is less than
thirty (30) times the average daily trading volume of such securities during the thirty (30) day
period immediately preceding such determination.

     “Member” has the meaning provided in the caption to this Agreement.

     “Member Nonrecourse Debt” has the same meaning as the term “partner nonrecourse debt” in
Section 1.704-2(b)(4) of the Regulations.

     “Member Nonrecourse Deductions” has the same meaning as the term “partner nonrecourse
deductions” in Sections 1.704-2(i)(1) and 1.704-2(i)(2) of the Regulations.

     “Member Parent” means each of Och-Ziff Real Estate Advisors LP; Foxwoods Development Company,
LLC; Clairvest Group Inc.; and Lakes Entertainment, Inc.

     “Minimum Amenities” means, for the initial phase of the Project, (a) 1,300 to 1,500 slot
machines, (b) a buffet, (c) a snack bar and (d) the Non-Core Amenities; provided that to the extent
the Non-Core Amenities cannot be built within a Capital Budget of $150 million or less, the
Non-Core Amenities can only be built if (i) construction financing acceptable to the Board is
procured in an amount equal to at least 50% of the total Capital Budget and (ii) the incremental
cost of the Non-Core Amenities does not exceed $10 million.

     “Net Losses” means the net losses of the Company, if any, determined in accordance with
federal income tax principles, including such adjustments as are necessary to arrive at “book”
income or loss for Capital Account maintenance purposes under Section 1.704-1(b) of the
Regulations.

     “Net Notional Capital Contributions” means, with respect to a Member as of a given time, (a)
the sum of all Capital Contributions actually made by such Member (including any Catch-Up
Contribution) prior to such time plus the amount of all Unfunded Capital Contributions of such
Member that were funded as a Contribution Loan by another Member, but excluding amounts funded by
such Member as a Contribution Loan, less (b) the amount of any Catch-Up Distribution received by
such Member prior to such time.

     “Net Notional Contribution Percentage” means, with respect to a Member as of a given time, a
fraction, expressed as a percentage, the numerator of which is such Member’s Net Notional Capital
Contributions as of such time and the denominator of which is the aggregate Net Notional Capital
Contributions of all the Members as of such time.

     “Net Profits” means the net income of the Company, if any, determined in accordance with
federal income tax principles, including such adjustments as are necessary to arrive at “book”
income or loss for Capital Account maintenance purposes under Section 1.704-1(b) of the
Regulations.

     “Non-Control Transfer” has the meaning provided in Section 8.1(a).

     “Non-Core Amenities” means (a) up to 20 table games, (b) up to a 10-table poker room and (c) a
steakhouse or similar upscale restaurant.

Appendix I—Page 8

 

 

     “Non-Funding Member” has the meaning provided in Section 2.3(a).

     “Non-Voting Representative” means Representatives to the Board not entitled to vote on any
matters to be determined by the Board except to the extent expressly provided otherwise in this
Agreement.

     “Nonrecourse Deductions” has the meaning set forth in Sections 1.704-2(b)(1) and 1.704-2(c) of
the Regulations.

     “Operating Budget” means the annual operating budget of all costs and expenses of any kind or
nature of operating, maintaining and owning the Project.

     “Opportunity” has the meaning provided in Section 11.1.

     “Percentage Interest” means the percentage interest of each Member set forth opposite such
Member’s name on Appendix II hereto, as may be adjusted from time to time in accordance with
Sections 2.2(b) and/or 2.3(b) hereof.

     “Permitted Ownership Change” means:

          (a) With respect to KGH, (i) any direct or indirect change in the beneficial ownership
of any Investment Vehicle controlled by Och-Ziff Real Estate Advisors LP (or an Affiliate
thereof) so long as such Investment Vehicle continues to be controlled by Och-Ziff Real
Estate Advisors LP (or an Affiliate thereof) or (ii) any direct or indirect change in the
control or ultimate beneficial ownership of Och-Ziff Real Estate Advisors LP;

          (b) With respect to Clairvest, (i) any direct or indirect change in the beneficial
ownership of any Investment Vehicle controlled by Clairvest Group Inc. so long as such
Investment Vehicle continues to be controlled by Clairvest Group Inc. or (ii) any direct or
indirect change in the control or ultimate beneficial ownership of Clairvest Group Inc.;
and

          (c) With respect to Lakes, any change in ownership of Lakes Entertainment, Inc.

     “Permitted Transfer” has the meaning provided in Section 8.1(a).

     “Person” means any individual, partnership (whether general or limited), limited liability
company, corporation, trust, estate, association, nominee or other entity.

     “Post Conversion Adjustment” means: (a) if one or more Contribution Loans have been converted
into Conversion Interests in accordance with Section 2.3(b) prior to the date of an adjustment of
the Capital Commitments pursuant to either of Sections 2.2(b)(ii) or 2.2(b)(iii), then (b)
following any such adjustment of the Capital Commitments, the Members’ respective Percentage
Interests shall (i) first be adjusted to be in the ratio of their respective adjusted Capital
Commitments and (ii) immediately thereafter be further adjusted as if the Contribution Loans that
converted prior to such adjustment had instead converted on the date of such adjustment.

Appendix I—Page 9

 

 

     “Preemptive Notice” has the meaning provided in Section 8.8(b).

     “Privilege Fee” means the $25,000,000 fee payable by the Company to the Kansas Lottery in
connection with the Project.

     “Project” means the development and operation of a gaming facility in Sumner County, Kansas,
pursuant to the Lottery Contract.

     “Project Opening” means the date on which the gaming facility in Sumner County, Kansas that is
the subject of the Project is opened to the public for gaming with no less than the Minimum
Amenities.

     “Project Operations” means the day-to-day operations of the Project.

     “Property” means all real and personal property acquired by the Company, directly or
indirectly, including cash, and any improvements thereto, and shall include both tangible and
intangible property.

     “Regulations” means the Income Tax Regulations, including Temporary Regulations, promulgated
under the Code, as such regulations are amended from time to time.

     “Regulatory Counsel” means the Company’s primary outside legal counsel responsible for
advising the Company and its Subsidiaries with respect to matters involving Licensing, the Lottery
Contract and compliance with Gaming Laws, selected by the mutual agreement of (a) Vedder Price P.C.
and Bryan Cave LLP or (b) two law firms selected by the Board acting by Unanimous Action.

     “Representatives” means the individuals who are members of the Board as appointed by the
Members in accordance with the terms of this Agreement, in their capacity as managers of the
Company.

     “ROFO Acceptance” has the meaning provided in Section 8.10(b).

     “ROFO Closing Date” has the meaning provided in Section 8.10(c)(ii).

     “ROFO Continuation Period” has the meaning provided in Section 8.10(c)(v).

     “ROFO Deposit” has the meaning provided in Section 8.10(c)(i).

     “ROFO Offer” has the meaning provided in Section 8.10(b).

     “ROFO Offer Period” has the meaning provided in Section 8.10(b).

     “ROFO Offeror” has the meaning provided in Section 8.10(b).

     “ROFO Participation Notice” has the meaning provided in Section 8.10(b).

     “ROFO Participation Percentage” means, with respect to each of the ROFO Offeror and Lakes, a
fraction, expressed as a percentage, the numerator of which is such Member’s

     Appendix I—Page 10

 

 

Percentage Interest and the denominator of which is the sum of the Percentage Interests of the ROFO
Offeror and Lakes.

     “ROFO Purchase Price” has the meaning provided in Section 8.10(b).

     “ROFO Rejection” has the meaning provided in Section 8.10(b).

     “ROFO Sale Notice” has the meaning provided in Section 8.10(a).

     “ROFO Sale Period” has the meaning provided in Section 8.10(d)(i).

     “ROFO Valuation Amount” has the meaning provided in Section 8.10(b).

     “Sale” means the sale of the Company or Chisholm, in a single transaction or series of
transactions, pursuant to the acquisition of all or virtually all of the outstanding Interests of
the Company or Chisholm (whether by merger, consolidation, recapitalization, reorganization,
purchase of the outstanding Interests or otherwise) or all or substantially all of the assets of
the Company or Chisholm.

     “Sale Agreement” has the meaning provided in Section 8.10(d)(i).

     “Securities Act” means the Securities Act of 1933, as amended, together with the rules and
regulations promulgated thereunder.

     “Selling
Member” has the meaning provided in
Section 8.10(a).

     “Special Unanimous Action” has the meaning provided in Section 4.1(c).

     “Subsidiary” or “Subsidiaries” means, with respect to any Person, any corporation,
partnership, joint venture, limited liability company, trust or other legal entity of which such
Person (either alone or through or together with any other Subsidiary) owns, directly or
indirectly, at least a majority of the stock or other equity interests in such entity.

     “Tag-Along Acceptance” has the meaning provided in Section 8.9(b).

     “Tag-Along Member” has the meaning provided in Section 8.9(b).

     “Tag-Along Offer” has the meaning provided in Section 8.9(b).

     “Tagged Member” has the meaning provided in Section 8.9(a).

     “Tax Matters Member” has the meaning set forth in Section 6.3(b) hereof.

     “Transfer” means, as a noun, any voluntary or involuntary, direct or indirect, transfer, sale,
pledge or hypothecation or other disposition of an Interest and, as a verb, voluntarily or
involuntarily (whether directly or indirectly) to transfer, sell, pledge or hypothecate or
otherwise dispose of an Interest. Transferred, Transferor and Transferee shall have comparable
meanings. For the avoidance of doubt, reallocations among the Members of their respective Capital

     Appendix I—Page 11

 

 

Commitments, Capital Accounts, Percentage Interests or governance rights in accordance with Section
2 and Section 4.1(g) hereof shall not be deemed Transfers.

     “Unanimous Action” has the meaning provided in Section 4.1(c).

     “Unfunded Capital Contribution” has the meaning provided in Section 2.3(a).

     “Unsuitable Party” means (a) a potential Transferee who is (or in the reasonable determination
of Regulatory Counsel, is likely to be) an “unsuitable party” for purposes of the License (b) a
potential Transferee whom the National Indian Gaming Commission has found to be unsuitable or whom
Regulatory Counsel has reasonably determined is likely to be found unsuitable by the National
Indian Gaming Commission or (c) any Person listed on Schedule U delivered to each of the Members in
connection with this Agreement.

     “Voting Representative” means Representatives to the Board entitled to vote on all matters to
be determined by the Board.

     Appendix I—Page 12

 

 

APPENDIX II

MEMBERS, INITIAL CAPITAL CONTRIBUTIONS,

PERCENTAGE INTERESTS AND CAPITAL COMMITMENTS

	 	 	 	 	 	 	 
	 	 	Initial Capital	 	Percentage	 	Capital
	Name and Address	 	Contributions	 	Interest	 	Commitment
	 
	 	 	 	 	 	 
	 
	 	$166,666.50 credit for	 	 	 	 
	 
	 	amounts pre-funded in	 	 	 	 
	 
	 	respect of regulatory	 	 	 	 
	Kansas Gaming Holdings LLC

	 	costs	 	 	 	 
	c/o Och-Ziff Real Estate
	 	$8,366,666.67 cash in	 	50.00%	 	$75,000,000
	9 West 57th Street, 39th Floor
	 	respect of the Privilege	 	 	 	 
	New York, NY 10019
	 	Fee and county	 	 	 	 
	Fax: 212-790-0005
	 	modification fee	 	 	 	 
	 
	 	
$111,099.88 credit for	 	 	 	 
	 
	 	amounts pre-funded in	 	 	 	 
	 
	 	respect of regulatory	 	 	 	 
	CVG Kansas Gaming LLC

	 	costs	 	 	 	 
	c/o Clairvest Group Inc.
	 	$8,366,666,67 cash in	 	33.33%	 	$50,000,000
	22 St. Clair Ave. E., 17th Floor
	 	respect of the Privilege	 	 	 	 
	Toronto, ON
	 	Fee and county	 	 	 	 
	M4T 2S3
 Fax: 416-925-5753

	 	modification fee	 	 	 	 
	 
	 	$55,566.62 credit for	 	 	 	 
	 
	 	amounts pre-funded in	 	 	 	 
	 
	 	respect of regulatory	 	 	 	 
	Lakes Kansas Casino Management, LLC

	 	costs	 	 	 	 
	c/o Lakes Entertainment, Inc.
	 	$8,366,666.66 cash in	 	16.67%	 	$25,000,000
	Attn: Damon Schramm
	 	respect of the Privilege	 	 	 	 
	130 Cheshire Lane, Suite 101
	 	Fee and county	 	 	 	 
	Minnetonka, MN 55305
 Fax: 952-449-7069
	 	modification fee	 	 	 	 
	 
	 	 	 	 	 	 
	Total:
	 	$25,433,333.00	 	100.00%	 	$150,000,000

Appendix II—Page 1

 

 

APPENDIX III

REPRESENTATIVES TO THE BOARD OF MANAGERS

	 	 	 	 	 	 	 
	Name	 	Appointed By	 	Voting	 	Contact Information
	 

	 	 	 	 	 	c/o Och-Ziff Real Estate
	 

	 	 	 	 	 	9 West 57th Street, 39th Floor
	Steven E. Orbuch

	 	KGH
	 	Yes
	 	New York, NY 10019
	 

	 	 	 	 	 	Fax: 212-790-0005
	 

	 	 	 	 	 	Email: sorbuch@ozcap.com
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	c/o Och-Ziff Real Estate
	 

	 	 	 	 	 	9 West 57th Street, 39th Floor
	Nicholas E. Hecker

	 	KGH
	 	Yes
	 	New York, NY 10019
	 

	 	 	 	 	 	Fax: 212-719-7487
	 

	 	 	 	 	 	Email: nicholas.hecker@ozcap.com
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	c/o Clairvest Group Inc.
	 

	 	 	 	 	 	22 St. Clair Ave. E., 17th Floor
	 

	 	 	 	 	 	Toronto, ON
	B. Jeffrey Parr

	 	Clairvest
	 	Yes	 	M4T 2S3
	 

	 	 	 	 	 	Fax: 416-925-5753
	 

	 	 	 	 	 	Email: jeffp@clairvest.com
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	c/o Clairvest Group Inc.
	 

	 	 	 	 	 	22 St. Clair Ave. E., 17th Floor
	 

	 	 	 	 	 	Toronto, ON
	Aly Champsi

	 	Clairvest
	 	No	 	M4T 2S3
	 

	 	 	 	 	 	Fax: 416-925-5753
	 

	 	 	 	 	 	Email: alyc@clairvest.com
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	c/o Lakes Entertainment, Inc.
	 

	 	 	 	 	 	130 Cheshire Lane, Suite 101
	Tim Cope

	 	Lakes
	 	No
	 	Minnetonka, MN 55305
	 

	 	 	 	 	 	Fax: 952-449-9353
	 

	 	 	 	 	 	Email: tcope@lakesentertainment.com

Appendix III—Page 1

 

 

APPENDIX IV

UNANIMOUS ACTIONS

Each of the following actions of the Company (including each Subsidiary) shall constitute, in
addition to the other Unanimous Actions set forth in the Agreement, a Unanimous Action for purposes
of the Agreement:

     1. Approving any material deviation by Lakes or the Company from the Initial Capital Budget, Capital Budget or Operating Budget approved in accordance with Section 4.5 of the
Agreement.

     2. Incurring any debt for borrowed money or any liens or other security for debt (excluding ordinary course trade payables) where (a) such debt will cause the total debt of the
Company to exceed 400% of the last twelve months’ Company EBITDA (or, prior to the first
anniversary of the Project Opening, budgeted Company EBITDA, (b) the total cost of the Company’s
debt is greater than 15% per annum or (c) the terms of such debt would materially, adversely and
disproportionately restrict the rights of one or more Members (but not all of the Members) under
Section 8.10 of the Agreement. “Company EBITDA” means net income of the Company (determined in
accordance with GAAP, before extraordinary transactions) for the applicable Project operating year,
before interest, income taxes, depreciation and amortization.

     3. Admitting new members of the Company other than in connection with a Permitted Transfer.

     4. Entering into any agreement providing for the sale of all or a material portion of the
Company’s assets or a plan of exchange, merger or consolidation, other than as contemplated by the
Agreement.

     5. Making any payment in favor of any Representative or Authorized Person other than salary
and bonus and reimbursement of expenses agreed upon pursuant to the Agreement or under such Person’s employment or consulting agreement with the Company or its
Subsidiary.

     6. Entering into or amending any agreement with an Affiliate of the Company.

     7. Qualifying the Company to do business in a jurisdiction in which the Company is not
currently qualified (other than Kansas).

     8. Creating or acquiring any subsidiary other than (i) in the ordinary course of business
(e.g., to effect a financing) or (ii) Chisholm.

     9. Providing a guarantee in respect of the obligations of a third party other than a
wholly-owned Subsidiary.

     10. Increasing the size of the Board.

     11. Creating any committee of the Board or making any change to a committee of the Board.

Appendix IV—Page 1

 

 

     12. Changing the Company’s auditors, accounting policies (other than as required by GAAP) or
any change to the definitions of “Allocation Year” or “Fiscal Year” in the Agreement.

     13. Amending or terminating the Lottery Contract; provided that the Licensing Withdrawal shall
not be deemed a Unanimous Action.

     14. Appointing a new Person to conduct the Project Operations.

     15. Undertaking an initial public offering of equity interests in the Company.

     16. Instituting or settling any material legal action.

     17. Resolving or settling any regulatory matters or actions, including but not limited to
those regarding the Kansas Lottery (other than ordinary course matters), subject to Item #7 on
Appendix V to the Agreement.

     18. Taking any voluntary action to commence any bankruptcy or insolvency proceeding on behalf
of the Company or to admit any allegations in any bankruptcy or insolvency proceeding brought
against the Company.

     19. Winding up, liquidating or dissolving the Company.

     20. Acquiring any significant interest in any business (whether by purchase of assets,
purchase of equity, merger or otherwise).

     21. Entering into any related-party transactions.

     22. Any material change to the Minimum Amenities or Non-Core Amenities following the
termination (if any) of the Management Agreement.

Appendix IV—Page 2

 

 

APPENDIX V

SPECIAL UNANIMOUS ACTIONS

Each of the following actions of the Company (including each Subsidiary) shall constitute a Special
Unanimous Action for purposes of the Agreement:

     1. Issuing a Call Notice for Capital Contributions to be made on a disproportionate basis
(except as specifically provided in Section 2.2(b)).

     2. Acquiring any significant interest in any business (whether by purchase of assets, purchase
of equity, merger or otherwise) where such acquisition is not of a business that is ancillary to
the operation of the Project.

     3. Instituting, modifying or terminating any profit sharing, stock option or similar incentive
arrangement (distinct from ordinary course employee bonuses pursuant to the Operating Budget).

     4. Entering into a new line of business other than the Business or making any material change
to the Business of the Company.

     5. Making or incurring any liability to purchase or acquire any outstanding Interests other
than in connection with Schedule 8.1 delivered to each of the Members in connection with this
Agreement.

     6. Any material change to the Minimum Amenities or Non-Core Amenities prior to the termination
(if any) of the Management Agreement.

     7. Resolving or settling any regulatory matters or actions, including but not limited to those
regarding the Kansas Lottery (other than ordinary course matters) to the extent (i) such matters
directly relate to Lakes and (ii) the Management Agreement has not been terminated.

     8. Creating any new class of Equity Securities.

Appendix V—Page 1exv10w2

Exhibit 10.2

DEVELOPMENT SERVICES AND MANAGEMENT AGREEMENT

between

CHISHOLM CREEK CASINO RESORT, LLC,

a Delaware limited liability company,

as the Enterprise,

and

LAKES KANSAS CASINO MANAGEMENT, LLC,

a Minnesota limited liability company,

as Manager

 

 

TABLE
OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	ARTICLE 1 Definitions	 	 	1	 
	1.1

	 	Definitions
	 	 	1	 
	1.2

	 	Other Interpretive Provisions
	 	 	9	 
	 
	 	 	 	 	 	 
	ARTICLE 2 Gaming Facility Site Selection; Construction	 	 	10	 
	2.1

	 	Gaming Facility Site Selection
	 	 	10	 
	2.2

	 	Development Services
	 	 	10	 
	2.3

	 	Furnishings and Equipment
	 	 	10	 
	2.4

	 	Advances for Costs of Construction
	 	 	10	 
	2.5

	 	Title to Facility; Other Assets
	 	 	10	 
	 
	 	 	 	 	 	 
	ARTICLE 3 Authority and Duty of Manager	 	 	12	 
	3.1

	 	Appointment and Operating Standard
	 	 	12	 
	3.2

	 	Limitations on Power and Authority
	 	 	13	 
	3.3

	 	Overall Responsibilities
	 	 	13	 
	3.4

	 	Compliance with Laws
	 	 	14	 
	3.5

	 	Security
	 	 	15	 
	3.6

	 	Accounting, Financial Records, and Audits
	 	 	15	 
	3.7.

	 	Cash Monitoring
	 	 	- 16 -
	 
	3.8

	 	Bank Accounts, Reserve Funds and Permitted Investments
	 	 	- 16 -
	 
	3.9

	 	Intentionally Omitted
	 	 	- 17 -
	 
	3.10

	 	Fire and Safety Services
	 	 	- 17 -
	 
	3.11

	 	Timely Payment of Costs of Operations
	 	 	- 17 -
	 
	3.12

	 	Acquisition of Gaming and Other Equipment
	 	 	- 17 -
	 
	3.13

	 	Hours of Operation
	 	 	- 18 -
	 
	3.14

	 	Access to Operations
	 	 	- 18 -
	 
	3.15

	 	Increased Public Safety
Services
	 	 	- 18 -
	 
	3.16

	 	Advertising
	 	 	- 18 -
	 
	3.17

	 	Certain Meetings
	 	 	- 18 -
	 
	3.18

	 	Maintenance
	 	 	- 18 -
	 
	3.19

	 	Term
	 	 	- 18 -
	 
	3.20

	 	Representatives
	 	 	- 19 -
	 
	3.21

	 	Service Contracts; Purchase Orders
	 	 	- 19 -
	 
	3.22

	 	Taxes; Mortgages
	 	 	- 20 -
	 
	 
	 	 	 	 	 	 
	ARTICLE 4 Personnel Matters	 	 	- 20 -
	 
	4.1

	 	Employees
	 	 	- 20 -
	 
	4.2

	 	Project Employee Policies
	 	 	- 21 -
	 
	4.3

	 	Employee Background Checks
	 	 	- 21 -
	 
	 
	 	 	 	 	 	 
	ARTICLE 5 Insurance	 	 	- 22 -
	 
	5.1

	 	Duty to Maintain
	 	 	- 22 -
	 
	5.2

	 	The Manager to be Additional Insured
	 	 	- 22 -
	 
	5.3

	 	Manager Insurance
	 	 	- 22 -
	 
	5.4

	 	Evidence of Insurance
	 	 	- 22 -
	 
	5.5

	 	Insurance Proceeds
	 	 	- 22 -
	 
	 
	 	 	 	 	 	 
	ARTICLE 6 Budgets, Operating Plans, Compensation and Reimbursement	 	 	- 23 -
	 
	6.1

	 	Projections and Budgets
	 	 	- 23 -
	 
	6.2

	 	Monthly Statements
	 	 	- 24 -
	 
	6.3

	 	Distribution of Revenues
	 	 	- 25 -
	 

i

 

	 	 	 	 	 	 	 
	6.4

	 	Annual Audit; Termination Audit
	 	- 26 -

	 
	 	 	 	 	 	 
	ARTICLE 7 Termination/Material Breach	 	- 28 -

	7.1

	 	Termination for Material Breach
	 	- 28 -

	7.2

	 	Mutual Consent
	 	- 30 -

	7.3

	 	Involuntary Termination Due to Changes in Law
	 	- 30 -

	7.4

	 	Other Rights upon Expiration or Termination; Ownership of
Assets and Repayment of Obligations on
Termination
	 	- 31 -

	7.5

	 	Notice of Termination
	 	- 32 -

	7.6

	 	Cessation of Gaming at the Gaming Facility
	 	- 32 -

	7.7

	 	Pre-Opening Termination Rights
	 	- 34 -

	7.8

	 	Cumulative Remedies
	 	- 35 -

	7.9

	 	PUNITIVE DAMAGES WAIVER
	 	- 35 -

	 
	 	 	 	 	 	 
	ARTICLE 8 Release and Indemnity	 	- 35 -

	8.1

	 	Third-Party Claims
	 	- 35 -

	8.2

	 	Indemnity from the Manager
	 	- 35 -

	8.3

	 	Indemnity from the Enterprise
	 	- 35 -

	8.4

	 	Indemnity Against Unauthorized Debt and Liabilities
	 	- 36 -

	 
	 	 	 	 	 	 
	ARTICLE 9 Miscellaneous	 	- 36 -

	9.1

	 	Assignment and Subcontractors
	 	- 36 -

	9.2

	 	Notices
	 	- 36 -

	9.3

	 	Amendments
	 	- 37 -

	9.4

	 	Counterparts
	 	- 37 -

	9.5

	 	Force Majeure
	 	- 38 -

	9.6

	 	Time is Material
	 	- 38 -

	9.7

	 	Further Assurances
	 	- 38 -

	9.8

	 	Severability
	 	- 38 -

	9.9

	 	Representations and Warranties of the Manager
	 	- 38 -

	9.10

	 	Representations and Warranties of the Enterprise
	 	- 38 -

	9.11

	 	Applicable Law
	 	- 39 -

	9.12

	 	Entire Agreement
	 	- 39 -

	9.13

	 	No Partnership or Joint Venture; Limited Agency
	 	- 39 -

	9.14

	 	Approvals
	 	- 39 -

	9.15

	 	No Third-Party Beneficiaries
	 	- 39 -

	9.16

	 	Non-disclosure
	 	- 39 -

	9.17

	 	Non-Recourse
	 	- 40 -

	9.18

	 	No Recording
	 	- 40 -

	9.19

	 	Non-Compete
	 	- 40 -

	9.20

	 	Alterations
	 	- 41 -

	 
	 	 	 	 	 	 
	ARTICLE 10 Dispute Resolution	 	- 41 -

	10.1

	 	Disputes Between the Enterprise and Project Employees
	 	- 41 -

	10.2

	 	Disputes Between the Enterprise and the Manager
	 	- 41 -

	 
	 	 	 	 	 	 
	ARTICLE 11 Financing; Estoppel Certificates	 	- 43 -

	11.1

	 	Subordination
	 	- 43 -

	11.2

	 	Financing
	 	- 43 -

	11.3

	 	Estoppel Certificates
	 	- 43 -

ii

 

DEVELOPMENT SERVICES AND MANAGEMENT AGREEMENT

THIS DEVELOPMENT SERVICES AND MANAGEMENT AGREEMENT (this “Agreement”) is made and entered into as
of the 24th day of September, 2009 (“Effective Date”) by and among Chisholm Creek Casino
Resort, LLC, a Delaware limited liability company (the “Enterprise”), and Lakes Kansas Casino
Management, LLC, a Minnesota limited liability company (“Manager”)

RECITALS

     A. The Enterprise has (or intends to use reasonable efforts to obtain) all legal right, title
and interest to own and operate the Casino, which will conduct gaming activities in accordance with
all applicable Legal Requirements.

     B. Manager has represented to the Enterprise that it has the managerial and operational
capacity and skill to develop and construct the Gaming Facility and to commence operation of the
Casino; and Manager agrees to provide the management expertise necessary to the conducting of
successful gaming operations.

     C. The Enterprise presently desires to retain the services of a management company, with
knowledge and experience in the gaming industry, to manage and operate its gaming operations at the
Gaming Facility.

     D. Manager is willing to provide such services, subject to the terms and conditions of this
Agreement.

     NOW, THEREFORE, in consideration of the hereinafter mutual promises and covenants, and for
other good and valuable consideration as set forth herein, the receipt and sufficiency of which are
expressly acknowledged, the Enterprise and Manager agree as follows:

ARTICLE 1

Definitions

     1.1
Definitions. As used in this Agreement, the terms listed below shall have the meanings
assigned to them:

     “Affiliate” means, with respect to any specified Person, any other Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or is under common
control with the specified Person. For the purposes of this definition, “control” (including the
terms controlling, controlled by, or under common control with) means the possession, direct or
indirect, or the power to direct or cause the direction of the management and policies of a person,
whether through the ownership of voting securities, partnership or member interests, by contract or
otherwise.

     “Annual Report” has the meaning ascribed thereto Section 6.4(a).

     “Applicable Rate” means a variable annual rate of interest equal to the prime interest rate of
Chase Manhattan Bank U.S.A., N.A. (or any successor bank) plus two percent (2%). The Applicable
Rate shall change when and as the rate used to determine the Applicable Rate changes.

     “Approved Budget” has the meaning ascribed thereto in Section 6.1(b).

1

 

     “Approved Operating Plan” has the meaning ascribed thereto in Section 6.1(b).

     “Casino” means the Gaming Facility, together with all gaming operations and ancillary
operations therein, including food and beverage outlets and retail outlets.

     “Casino
Marks” has the meaning ascribed thereto in
Section 2.5(b).

     “Casino Name” has the meaning ascribed thereto in Section 2.5(b).

     “Control Agreements” shall mean all Loan Documents, the Lottery Facility Management Contract,
the Predevelopment Agreement and any other development agreement with local governmental
authorities, any ground leases, space leases, license agreements, licenses (including any license
or trademark agreements governing the use of the intellectual property of others at the Gaming
Facility), equipment leases, service contracts, maintenance agreements, construction contracts,
utility contracts, insurance policies, any covenants, restrictions, easements and similar
instruments affecting the Casino or any part thereof, and any other material agreements with other
third parties or governmental entities affecting the Casino or any part thereof.

     “Core Positions” means, collectively, the employment positions which are defined as “Key
Employees” from time to time under the Lottery Facility Management Contract and, whether or not
included therein, the positions listed in Exhibit F attached hereto.

     “Cost of Operations” means the total amount of all expenses and costs of any kind or nature of
operating, maintaining and owning the Casino in accordance with GAAP (each, a “Cost of Operation”
or, in plural, “Costs of Operation”), including without limitation:

	 	(i)	 	the cost of all food and beverages sold by the Casino and of all operating supplies
related thereto;
	 
	 	(ii)	 	salaries, wages and other benefits of the Casino’s personnel, including costs of
payroll taxes and employee benefits;
	 
	 	(iii)	 	the cost of all other materials, supplies, goods and services in connection with the
operation of the Casino including, without limitation, utilities, trash removal, office
supplies, security and all other services performed by third parties, telephone and data processing
equipment and other equipment;
	 
	 	(iv)	 	the cost of repairs to and maintenance of the Casino that are not required to be
capitalized pursuant to GAAP;
	 
	 	(v)	 	insurance and bonding premiums with respect to the Casino;
	 
	 	(vi)	 	all assessments, water/sewer charges, and other fees and charges payable by or
assessed against the Enterprise with respect to the operation of the Casino;
	 
	 	(vii)	 	legal, consulting, lobbying, accounting and other fees for professionals for services
related to the operation of the Casino;
	 
	 	(viii)	 	all expenses payable to the Kansas Lottery and the Kansas Racing and Gaming
Commission for oversight and regulation pursuant to the Lottery Facility Management
Contract, and any and all other regulatory or oversight expenses payable by the

2

 

Enterprise;

	 	(ix)	 	all expenses for marketing the Casino, including all expenses of advertising, sales,
and public relations activities;
	 
	 	(x)	 	all promotional allowances, including all items “comped” to customers of the Casino and
described in clause (xviii) of the definition of “Revenue Exclusions”; and
	 
	 	(xi)	 	all excise, sales, gross receipts, admission, entertainment, tourist or use taxes, and
device fees, real estate taxes, ad valorem taxes, personal property taxes, utility taxes
and other taxes (as those terms are defined by GAAP), assessments for public improvements,
and municipal, county and state license and permit fees.

The Cost of Operations shall not include federal, state, or local income tax payable by the
Enterprise or its members (by way of clarification and not limitation, all other taxes and
assessments with regard to the Casino shall be included in the Cost of Operations, including
sales taxes, real estate taxes and assessments and impact fees and gaming taxes) and any costs
incurred by Manager or its Affiliates that are not expressly reimbursable by the Enterprise
pursuant to the terms of this Agreement. For purposes of calculating EBITDAM, the Cost of
Operations shall not include: (A) depreciation; (B) amortization of the principal amount of any
loans to the Enterprise; (C) interest expenses payable to any Lender under any Loan Documents;
and (D) Management Fees.

     “County” means Sumner County, Kansas.

     “Designated Court” means, collectively, (i) the United States District Court located in
Wichita, Kansas, (ii) for any dispute with respect to which such court determines it is without
jurisdiction, the courts of the State, and (iii) in either case, all courts to which an appeal
therefrom may be available.

     “Development
Services” has the meaning ascribed thereto in
Section 3.1(a).

     “EBITDAM”
the amount equal to Total Revenues less Cost of Operations.

     “Effective Date”
means the date referenced in the pre-amble of this Agreement.

     “Employment Laws” means, collectively, any federal, state, local and foreign statutes, laws,
ordinances, regulations, rules, permits, judgments, orders and decrees affecting labor union
activities,civil rights or employment in the United States, including the Civil Rights Act of 1870, 42 U.S.C.
§1981, the Civil Rights Acts of 1871, 42 U.S.C. §1983 the Fair Labor Standards Act, 29 U.S.C. §201,
et seq., the Civil Rights Act of 1964, 42 U.S.C. §2000e, et seq., as amended, the Age
Discrimination in Employment Act of 1967, 29 U.S.C. §621, et seq., the Rehabilitation Act, 29
U.S.C. §701, et seq., the Americans With Disabilities Act of 1990, 29 U.S.C. §706, 42 U.S.C.
§12101, et seq., the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 301, et seq., the
Equal Pay Act, 29 U.S.C. §201, et seq., the National Labor Relations Act, 29 U.S.C. §151, et seq.,
and any regulations promulgated pursuant to such statutes, as amended from time to time, and
together with any similar laws now or hereafter enacted, including all rules, regulations and
policies imposed by the Kansas Racing and Gaming Commission now or in the future concerning
employment, such as qualifications and any required certifications, credentialing or licensing of
officers, directors, board members and employees.

     “Enterprise Intellectual Property” has the meaning ascribed thereto in Section 2.5(c).

     “Enterprise Marks” has the meaning ascribed thereto in Section 2.5(b).

3

 

     “Enterprise-Provided IP” has the meaning ascribed thereto in Section 2.5(c).

     “Executive Director” means the executive director of the Kansas Lottery.

     “Facility Loan” means the financing by the Enterprise, as borrower, for any costs of the
development and construction of the Gaming Facility.

     “Fiscal Year” means the accounting year used for the operation of the Casino, which shall be
consistent with the accounting year of the Enterprise.

     “Furnishings and Equipment” means all fixtures, furniture, and equipment required for the
operation of the Casino in accordance with the standards set forth in this Agreement, including,
without limitation:

          (i) cashier, money sorting and money counting equipment, surveillance and
communication equipment, and security equipment (including software);

          (ii) slot machines, video games of chance, table games, keno equipment and other
gaming equipment (including software);

          (iii) office furnishings and equipment;

          (iv) specialized equipment necessary for the operation of any portion of the Casino
for accessory purposes, including equipment for kitchens, laundries, dry cleaning, cocktail
lounges, restaurants, public rooms, commercial and parking spaces, and recreational
facilities;

          (v) all other operating supplies, signage, trade fixtures, furnishings and equipment
now or hereafter located and installed in or about the Gaming Facility which are used in
the operation of the Casino in accordance with the Operating Standard.

     “GAAP” means generally accepted accounting principles, as 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, consistently applied.

     “Gaming Facility” means, whether now existing or hereafter constructed or acquired, the
building (to be built) and the land on which such building, as constructed, sits, together with all
parking areas, access drives, walkways, utility facilities, and similar improvements constructed
appurtenant to and serving such building and all Furnishings and Equipment and personal property
(whether tangible or intangible) used or to be used in connection with the gaming operations and
ancillary operations to be conducted therein, including food and beverage outlets and retail
outlets, all of which are to be located on a portion of the tract of land described on attached
Exhibit A, as determined by the Enterprise. As used herein, “Gaming Facility” shall not include any
other buildings (including hotels) which may be constructed on the balance of, or adjacent to, said
tract of land.

     “Gaming Laws” means, collectively, the Gaming Ordinance and any other gaming regulations
applicable to the Casino.

     “Gaming License” means (i) with respect to Manager, collectively, all necessary governmental
permits, approvals, consents and licenses/certifications which Manager may be required to obtain
and

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maintain under any Gaming Laws, as amended, from time to time, or under this Agreement in
connection with the operation of the Lottery Gaming Enterprise (as defined in the Lottery Facility
Management Contract) at the Gaming Facility and (ii) with respect to the Enterprise, collectively,
all other necessary governmental permits, approvals, consents and licenses/certifications which the
Enterprise may be required to obtain and maintain under any Gaming Laws, as amended, from time to
time (subject to the terms of this Agreement regarding Manager’s responsibilities), in connection
with the operation of the Lottery Gaming Enterprise (as defined in the Lottery Facility Management
Contract) at the Gaming Facility.

     “Gaming Ordinance” means the Kansas Expanded Lottery Act enacted by the governing body of the
State regulating the operation of gaming activities conducted at the Gaming Facility.

     “General Operating Account” has the meaning ascribed thereto in Section 3.8(a).

     “Governmental Authority(ies)” means the United States, the State, the County and any
governmental court, agency, department, commission, board, bureau or instrumentality of the
foregoing and any quasi-governmental authority (including sewer district, storm water management
district or tollway authority), but only to the extent it has legal jurisdiction over gaming at the
Gaming Facility, the operation of the Casino, or the obligations of the Enterprise or the Manager
under this Agreement or any other Control Agreement.

     “Kansas Expanded Lottery Act” means the provisions contained in K.S.A. 2008 Supp. 74-8733
et.seq., and amendments thereto which may hereinafter become effective.

     “Kansas Lottery” means the state agency created by the Kansas Lottery Act to operate a lottery
or lotteries pursuant to the Kansas Lottery Act or the Kansas Expanded Lottery Act.

     “Kansas Lottery Act” means the provisions contained in K.S.A. 74-8701 et.seq., and amendments
thereto which may hereinafter become effective.

     “Legal Requirements” means any and all present and future judicial, administrative, and
federal, state or local rulings or decisions, and any and all present and future federal, state or
local ordinances, rules, regulations, permits, licenses and certificates, in any way applicable to
the Enterprise, the Manager, or the Casino, including the Gaming Laws and Employment Laws.

     “Lender” means any third party who makes any Facility Loan or any other loan to the
Enterprise.

     “LLC Agreement” means that certain Limited Liability Company Agreement of Kansas Gaming
Partners LLC, dated on or about the date hereof, by and among Kansas Gaming Holdings LLC, CVG
Kansas Gaming LLC, and Lakes Kansas Casino Management, LLC, as the same may be amended and/or
restated from time to time.

     “Loan Documents” shall mean any and all notes or other instruments of indebtedness of the
Enterprise with regard to the Casino (including the Facility Loan, if any), and any mortgages,
deeds of trust, loan agreements, credit agreements, security instruments, environmental indemnities
or other loan documents executed in connection therewith.

     “Lottery Facility Account” has the meaning ascribed thereto in Section 3.8(a).

     “Lottery Facility Management Contract” means the Lottery Gaming Facility Management Contract
entered into by and between Chisholm Creek Casino Resort, LLC and the Kansas Lottery on
August 25, 2009, as amended or supplemented from time to time.

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     “Lottery Gaming Facility Revenues” has the meaning ascribed thereto in the Lottery Facility
Management Agreement.

     “Major Capital Project” means a project undertaken to expand the Casino (as opposed to
maintenance capital expenditures) with a total budget of no less than $10 million.

     “Manager-Owned IP” has the meaning ascribed thereto in Section 2.5(c).

     “Manager-Provided IP” has the meaning ascribed thereto in Section 2.5(c).

     “Manager
Parent” means Lakes Entertainment, Inc., a Minnesota corporation.

     “Management Fees” has the meaning ascribed thereto in Section 6.3(c).

     “Marketing Plan” has the meaning ascribed thereto in Section 3.23.

     “Material Breach” has the meaning ascribed thereto in Section 7.1(c) and Section 7.1(d).

     “Measurement Period” has the meaning ascribed thereto in Section 6.3(c).

     “Minimum Yield-on-Cost” has the meaning ascribed thereto in Section 7.1(c)(vii)(a).

     “Och-Ziff” means Kansas Gaming Holdings Investor LLC.

     “Opening Date” means the first day that all or any part of the Casino is open to the public.
Manager and the Enterprise agree that the Project Schedule (as defined in Exhibit B) shall include
the anticipated Opening Date and that, upon the written request of the Enterprise, the Enterprise
and the Manager shall execute and deliver written confirmation of the actual Opening Date.

     “Operating Standard” has the meaning ascribed thereto in Section 3.1(a).

     “Permitted Disclosures” means reasonably necessary disclosures in or in connection with
regulatory filings or proceedings which in the good faith judgment of Manager are required by
applicable federal or state securities laws provided that Manager shall have afforded the
Enterprise with prior written notice of any such disclosure and an opportunity to comment on the
same (such prior written notice being reasonable, under the circumstances) and Manager agrees to
consider in good faith the comments of the Enterprise in such disclosure; provided, however, no
such disclosure shall identify Och-Ziff or Clairvest or any Affiliate of either of them by name or
trade name unless Manager’s counsel has advised Manager in writing that failure to do so in such
disclosure would violate applicable federal or state securities laws.

     “Person” means any person or entity, whether an individual, trustee, corporation, general
partnership, limited partnership, limited liability company, limited liability partnership, joint
stock company, trust, estate, unincorporated organization, business association, instrumentality,
firm, joint venture, Governmental Authority, or otherwise.

     “Plans and Specifications” has the meaning ascribed thereto in Section 2.2(b).

     “Player Lists” means and includes any documents or records (and any copies thereof),
electronic or otherwise, including any player lists developed as part of a player’s club, similar
promotional or

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incentive program, tracking system or otherwise and any documents or records maintained solely for
security purposes, created by or upon the request of Manager, any Affiliate of Manager, the
Enterprise, or any Affiliate of the Enterprise containing any information whatsoever concerning the
players, customers, visitors or other individuals participating in the gaming operations or other
operations of the Casino, together with the information contained therein or otherwise known or
developed by Manager or the Enterprise (or any of their respective Affiliates and any of their
respective Employees) in connection with the Casino, which documents and records and information,
shall be and remain, at all times, the sole property of the Enterprise.

     “Predevelopment Agreement” means the Predevelopment Agreement entered into as of May 11, 2009
between The Board of County Commissioners of Sumner County, Kansas and Chisholm Creek Casino
Resort, LLC, as amended.

     “Pre-Opening
Services” has the meaning ascribed thereto in
Exhibit E.

     “Pre-Opening Period” has the meaning ascribed thereto in Exhibit E.

     “Privilege Fee” has the meaning ascribed thereto in the Lottery Facility Management Contract.

     “Project Accounts” has the meaning ascribed thereto in Section 3.8(a).

     “Project Budget” has the meaning ascribed thereto in Exhibit B.

     “Project Employee Policies” has the meaning ascribed thereto in Section 4.2.

     “Prohibited Activities” has the meaning ascribed thereto in Exhibit C.

     “Proposed Budget” has the meaning ascribed thereto in Section 6.1(b).

     “Proposed Operating Plan” has the meaning ascribed thereto in Section 6.1(b).

     “Revenue Exclusions” means, collectively, any and all (i) gratuities to employees of the
Casino paid directly by the player or included as a service charge; (ii) amounts paid to or
revenues generated by third parties in connection with catering inside or outside the Gaming
Facility (including rental of equipment or other personal property); (iii) sales taxes, excise
taxes, gross receipts taxes, admission taxes, entertainment taxes, tourist taxes, use taxes or
similar impositions collected directly from players, customers, tenants, licensees or
concessionaires or included as part of the sales price of any goods or services and remitted to the
appropriate taxing authorities in the amount collected; (iv) accounts receivable written off as
uncollectible, except to the extent amounts are subsequently collected or are recovered by the sale
of such accounts or otherwise; (v) proceeds of insurance (other than (A) business interruption
insurance proceeds received by the Enterprise after deducting therefrom all expenses incurred in
the adjustment or collection thereof and (B) any insurance proceeds received by the Enterprise to
reimburse it for any Costs of Operations actually incurred); (vi) proceeds of awards received in
condemnation (other than compensation received by the Enterprise for loss of business to the extent
attributable to the period in question after deducting therefrom all expenses incurred in obtaining
such compensation); (vii) proceeds of the sale or disposition of the Casino or any portion thereof
or any capital assets or any loan proceeds, including proceeds of any loans to the Enterprise or
refinancing of the Casino or any portion thereof and any capital contributions made to the
Enterprise; (viii) amounts reimbursed by the Enterprise to Manager or otherwise advanced and
deposited into the General Operating Account or other bank accounts used for the operation of the
Casino; (ix) interest earned on any amounts deposited into any such bank accounts; any security
deposits or similar deposits (except as applied or forfeited); (x)

7

 

credits or refunds to players, customers, tenants, licensees or concessionaires; (xi) any discounts
to players for goods or services provided; (xii) non-cash and exchanges for services or barter;
(xiii) any gain or loss on the extinguishment of debt or any gain or loss on the sale of an asset
not in the ordinary course of business or other extraordinary items; (xiv) all revenues that would
be classified as non-operating for purposes of GAAP; (xv) revenues of tenants, licensees and
concessionaires from their respective business operations at the Gaming Facility (other than any
portion thereof received by the Enterprise in the form of rents and fees pursuant to their
respective leases, licenses and concession agreements); and (xvi) complimentary services, items,
goods, promotions, credits or discounts provided to any player, any permitted or awarded “free
play” and credits, coupons and vouchers issued for redemption by a player for use at the Casino.

     “State” means the State of Kansas.

     “Surviving Obligations” means, collectively, (i) the obligation of Manager to pay to the
Enterprise any amounts under this Agreement which accrued prior to the date of the expiration or
earlier termination of this Agreement, (ii) the obligation of the Enterprise to pay to Manager any
amounts under this Agreement (including any Management Fees) which accrued prior to the date of the
expiration or earlier termination of this Agreement, (iii) Sections 4.1(e)-(f), 7.4, Article 8,
Sections 9.9, 9.10, 9.16 and 9.19 and Article 10, and (iv) any other obligations set forth herein
that expressly survive the expiration or earlier termination of this Agreement.

     “Terminating Party” has the meaning ascribed thereto Section 7.1(a).

     “Termination Report” has the meaning ascribed thereto Section 6.4(b).

     “Total Investment in Gaming Facility” means, as of the date of determination, the total amount
expended in the development and construction of the Gaming Facility, including but not limited to:

	 	(i)	 	all hard and soft costs of construction, design, development, maintenance, renovation,
and expansion of the Gaming Facility;
	 
	 	(ii)	 	the Privilege Fee;
	 
	 	(iii)	 	the cost of land acquired by the Enterprise;
	 
	 	(iv)	 	the cost of acquiring furniture, fixtures, and equipment attached to or used within
the Gaming Facility (including gaming equipment and all operating systems);
	 
	 	(v)	 	on-site and off-site infrastructure improvements (including public and private roadways
and utilities);
	 
	 	(vi)	 	professional fees (including construction, design, and legal professionals and other
consultants);
	 
	 	(vii)	 	all expenses, charges or fees billed or charged to Enterprise by the Kansas Lottery,
the Kansas Racing and Gaming Commission or any local governmental entity in conjunction
with or incurred for endorsement or any other required approvals;
	 
	 	(viii)	 	pre-opening costs and working capital;
	 
	 	(ix)	 	interest reserves, interest payments, upfront or commitment fees and similar charges
accrued or paid to any Lender prior to the Opening Date; and

8

 

	 	(x)	 	broker’s fees (including, without limitation, those fees payable to Macquarie Capital
(USA) Inc.).

Total Investment in Gaming Facility shall not include (i) the cost of improvements paid for by
insurance proceeds as described in clause (v) of the definition of “Revenue Exclusions” in Section
1.1 hereof and (ii) maintenance capital expenditures made pursuant to the then-current Approved
Budget (but shall include all other capital expenditures). Total Investment in Gaming Facility
shall be reduced by (i) condemnation proceeds as described in clause (vi) of the definition of
“Revenue Exclusions” in Section 1.1 hereof and (ii) proceeds of asset sales as described in clause
(vii) of the definition of “Revenue Exclusions” in Section 1.1 hereof.

     “Total Revenues” means all revenues and income (excluding the Revenue Exclusions and any
non-cash items) received by the Enterprise from the operation of the Casino in accordance with
GAAP, including without limitation:

	 	(i)	 	the payment of 73% of Lottery Gaming Facility Revenues to the Enterprise by the Kansas
Lottery pursuant to Paragraph 26 of the Lottery Facility Management Contract (for the
avoidance of doubt, Lottery Gaming Facility Revenues are payable to the Kansas Lottery and
shall not be included in this definition of “Total Revenues”);
	 
	 	(ii)	 	retail sale of food, beverages, and merchandise by the Enterprise; and
	 
	 	(iii)	 	rental or fees paid by the tenants, licensees and concessionaires (if any) at the
Gaming Facility.

     “Tribe” means the Iowa Tribe of Oklahoma, a federally recognized Indian tribe.

     “Yield-on-Cost” shall mean, as of the date of determination, an amount equal to the trailing
twelve months of EBITDAM, divided by the Total Investment in Gaming Facility, each as of such date;
provided, however, if a Major Capital Project was completed during any such trailing twelve-month
period, EBITDAM for purposes of this definition shall be calculated based on annualizing actual
EBITDAM achieved from and after the completion date of such Major Capital Project until the
applicable date of such determination (with adjustments for seasonality based on historic
performance of the Casino).

     1.2 Other Interpretive Provisions.

          (a) The definitions of terms herein shall apply equally to the singular and plural forms of
the terms defined.

          (b) The words “include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.”

          (c) Unless the context requires otherwise, (i) any definition of or reference to any
agreement, instrument or other document shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or otherwise modified,
subject to applicable Legal Requirements, if any, (ii) any reference herein to any Person shall be
construed to include such Person’s successors, personal representatives, heirs and permitted
assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used
in this Agreement (including in the

9

 

Exhibits hereto), shall be construed to refer this Agreement in its entirety and not to any
particular provision thereof, (iv) all references in this Agreement to Articles, Sections, Exhibits
and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules
to, this Agreement in which such references appear, and (v) any reference to any law shall include
all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law
and any reference to any law or regulation shall, unless otherwise specified, refer to such law or
regulation as amended, modified or supplemented from time to time.

          (d) All recitals above and all Exhibits referenced herein are incorporated herein by this
reference.

          (e) No provisions of this Agreement shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial authority by reason
of such party having or being deemed to have structured or drafted such provision.

ARTICLE 2

Gaming Facility Site Selection; Construction

     2.1 Gaming Facility Site Selection. The Gaming Facility shall be constructed on a portion of
the land described in Exhibit A.

     2.2 Development Services. Manager and the Enterprise agree that Manager shall provide certain
development services as set forth in the terms and conditions of
Exhibit B attached hereto.

     2.3 Furnishings and Equipment. Manager shall select and procure vendors, in consultation with
the Enterprise, for purchase by the Enterprise of Furnishings and Equipment required to operate the
Casino in conformity with the Operating Standard and the terms and conditions of this Agreement,
subject to compliance with the Project Budget (as defined in the
attached Exhibit B) and obtaining
the Enterprise’s approval with respect to the identity of each vendor, the details of the
Furnishings and Equipment (e.g., kind, specs, quantity etc.) and the terms and conditions
(including price) of the acquisition by lease or sale for those items (by category) of Furnishings
and Equipment.

     2.4 Advances for Costs of Construction. Nothing herein contained shall obligate or permit
Manager to arrange for a Lender to advance any costs of the construction of the Gaming Facility, or
make advances directly to the Enterprise, for payment of any item not included in or in an amount
in excess of the Project Budget.

     2.5 Title to Facility; Other Assets.

          (a) Except as otherwise provided in the Lottery Facility Management Contract, the Gaming
Facility, the Furnishings and Equipment, and all related improvements and assets shall be the sole
and exclusive property of the Enterprise.

          (b) During the term of this Agreement, the Casino shall at all times be known as, operated,
and promoted under a name selected by the Enterprise (the “Casino Name”). The Enterprise may change
and/or modify the Casino Name from time to time and/or may designate one or more other trade names,
trademarks, logos, distinctive names, service marks, certification marks, logo designs, insignia or
other words or symbols (collectively, “Casino Marks”) to be used in connection with the Casino
and/or goods or services offered by and/or on behalf of the Casino. The Enterprise shall have the
sole and exclusive ownership of any and all right, title, and interest in and to the Casino Name,
the Casino Marks, and any derivatives, modifications, or alterations thereof (collectively, the
“Enterprise Marks”),

10

 

and any and all rights related thereto. At the Enterprise’s expense, the Manager shall take such
action as the Enterprise may reasonably request to effect, perfect, or confirm the Enterprise’s
ownership of, and any other rights in, the Enterprise Marks. Any and all goodwill associated with
the use of the Enterprise Marks shall inure solely to the benefit of the Enterprise. The Manager
agrees that, upon termination of this Agreement for any reason, all goodwill in the Enterprise
Marks that may be held by the Manager hereby is assigned to the Enterprise, without the need for
any further action by any person, and the Manager agrees to reasonably cooperate with the
Enterprise to effectuate the foregoing assignment.

          (c) The Enterprise shall own any and all other intellectual property of any kind (including
but not limited to any and all tangible works of expression, inventions, game and systems licenses
and software, Player Lists and related information, developed game concepts, systems or other
gaming or administrative improvement rights,) conceived, made, used, developed, generated,
provided, and/or prepared by or on behalf of the Enterprise in connection with and/or associated
with the Casino (“Enterprise-Provided IP”) and shall own any and all intellectual property developed, generated, or
prepared by Manager (1) for use specifically at the Casino in connection with its operation,
management, advertisement, marketing, and/or promotion and not for use by Manager in its ordinary
and customary business operations, or (2) at the direction of
the Enterprise,or (3) in connection
with the performance of its duties under this Agreement (“Manager-Provided IP”) (collectively,
Enterprise-Provided IP and Manager-Provided IP are “Enterprise Intellectual Property”). At the
Enterprise’s expense, the Manager shall take such action as the Enterprise may reasonably request
to effect, perfect, or confirm the Enterprise’s ownership of, and any other rights in, the
Enterprise Intellectual Property. To the extent Manager uses any intellectual property at the
Casino in connection with its operation, management, advertisement, marketing, and/or promotion
that is or was (1) owned by it prior to the Effective Date of this Agreement, or (2) developed,
generated, or prepared by it after the Effective Date of this Agreement that is not Manger-Provided
IP, excluding casino game concepts and equipment that are not Enterprise Intellectual Property, but
developed by Manager for separate lease or license to third parties (the “Manager-Owned IP”),
Manager hereby grants to Enterprise a perpetual, nonexclusive, irrevocable, royalty-free license to
use the Manager-Owned IP in connection with the operation, management, advertisement, marketing and
promotion of the Casino; the Enterprise may assign and/or sublicense its rights in the
Manager-Owned IP to any successor, affiliate, and/or subsidiary; provided, however, such license
shall not extend to any table games which may constitute Manager-Owned IP as defined herein (it
being understood that the usage of such Manager-Owned IP shall be subject to the terms of a license
agreement approved by the Enterprise and the Manager, if and when such usage is approved by the
Enterprise).

          (d) The Manager shall have no right, title or interest in or to any Enterprise Mark,
Enterprise Intellectual Property, and/or other trademark, service mark, or other intellectual
property of the Enterprise, other than such limited rights as may be necessary or desirable for
performance of the Manager’s duties under this Agreement. Manager’s use of the Enterprise Marks
and the Enterprise Intellectual Property shall be subject to the terms and conditions of this
Agreement, including but not limited to Sections 2.3 and 3. Manager shall not use the name of the
Enterprise without the prior approval of the Enterprise (other than as part of any Permitted
Disclosures).

          (e) Any use by Manager of the Kansas Lottery’s trademarks, trade names and service marks shall
be subject to and in strict accordance with the applicable provisions of the Lottery Facility
Management Contract.

          (f) Manager shall do and execute all and such further lawful and reasonable acts, conveyances
and assurances for the better and more effective carrying out of the intents and purposes of this
Section 2.5, as the Enterprise shall reasonably require from time to time

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ARTICLE 3 Authority and Duty of Manager

     3.1 Appointment and Operating Standard.

          (a) Manager shall be deemed to be an independent contractor to the Enterprise for purposes of
providing the services described in Section 2.2 hereof and the
attached Exhibit B referenced
therein (the “Development Services”) and Manager shall not be the agent of the Enterprise and shall
not have authority to act on behalf of the Enterprise except and only to the extent specifically so
provided for in this Agreement.

          (b) Subject to Section 3.1(a) above, the Enterprise hereby appoints the Manager as agent for
and on account of the Enterprise during the term of this Agreement for purposes of providing the
services and fulfilling the obligations required of Manager under this Agreement, subject to the
terms and conditions hereof. Manager accepts such appointment as the manager of the Casino for the
term of this Agreement on and subject to the terms and conditions set forth herein and agrees to
manage the Casino, providing such services as are set forth herein and such additional services as
may be customarily provided by operators of other first-class gaming facilities.

          (c) In connection with such appointment, the Manager is hereby granted the necessary power and
authority to act in order to fulfill all of its responsibilities under this Agreement, subject to
the terms of this Agreement and subject to obtaining the Enterprise’s approval as and when required
under the terms and conditions of this Agreement. Without limiting the generality of the
foregoing, subject in each case to obtaining the Enterprise’s approval, the Manager shall have, and
the Enterprise does hereby grant to the Manager, the power and authority, as agent for the
Enterprise, to exercise the rights of the Enterprise under and to execute, amend or otherwise
modify any contracts associated with the operation of the Casino, including, without limitation,
purchase orders, equipment and retail leases, and contracts for utilities, maintenance and repair
services, and other services relating to the operation of the Casino; provided, however, Manager
shall not have any such authority with regard to any Contract
Documents (as defined in Exhibit B)
or otherwise in connection with carrying out the Developer Services.

          (d) Manager agrees to provide the Development Services and to manage the Casino in accordance
with the “Operating Standard”, which is defined as follows: (i)(A) in a commercially reasonable,
prudent, diligent and professional and workmanlike manner and (B) at least at a level of service,
operation and quality generally considered to be first-class for casinos taking into account the
size, scope and level of capital investment, (ii) in accordance with the terms and conditions of
this Agreement and in conformity in all material respects with the then current Approved Budget and
Approved Operating Plan, (iii) in accordance with the terms and provisions of the Control
Agreements, including the Lottery Facility Management Contract and any business plan and other
plans and policies concerning Casino operations as required thereunder subject to Section 6.1(e)
hereof, (iv) in accordance with the requirements of any carrier having insurance on the Casino or
any part thereof, (v) in compliance with all Legal Requirements, including all reporting, security,
systems and other requirements imposed by the Kansas Racing and Gaming Commission, the Kansas
Lottery, or any other governmental agency with jurisdiction over the Casino, and (vi) in a manner
reasonably expected to protect and preserve the assets that comprise the Gaming Facility. Manager
shall act in a fiduciary capacity with respect to the property protection and accounting of the
Enterprise’s assets. In its capacity, Manager shall deal at arm’s length with all third parties and
its Affiliates and the Affiliates of the Enterprise. Manager may not enter into agreements with
Affiliates of Manager without the prior written consent of the Enterprise (and, in such event,
Manager shall have advised the Enterprise of the contracting party’s status as an Affiliate of
Manager).

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(e) The duties and authorities of the Manager shall be subject to the Control Agreements.

     3.2 Limitations on Power and Authority.

          
(a) The exercise by the Manager of its power and authority granted pursuant to Section 3.1(b)
as the Enterprise’s agent shall be limited as provided in this Section 3.2 and in the budget
provisions of Article 6.

(b) Notwithstanding its appointment as the Enterprise’s agent pursuant to Section 3.1(b):

(i) The Manager shall have no power or authority to act for or represent the
Enterprise except as specified in this Agreement.

(ii) The Manager shall have no power or
 authority to exercise the rights of the Enterprise under or to execute, amend or otherwise modify this Agreement on behalf
of the Enterprise, and the Enterprise shall retain the sole and exclusive such
power and authority with respect to this Agreement.

(iii) Except as stated herein, the Manager shall have no power or authority,
without the prior written approval of the Enterprise in each instance unless the
specific transaction is described in the Approved Budget approved in writing by the
Enterprise, to (A) incur costs which are in excess of the expenditures to be agreed
upon in the Approved Budget, (B) sell, encumber or otherwise dispose of the Casino
or the Enterprise or any part thereof or interest therein, including any
Furnishings and Equipment or other personal property located in the Gaming
Facility, except for inventory sold in the regular course of business and other
items which must be replaced due to age, obsolescence, or wear and tear, subject to
the Approved Budget, or (C) subject to the Approved Budget, purchase any
Furnishings and Equipment or other personal property or services from the Manager
or any Affiliate of the Manager, if such purchase is to be included as a Cost of
Operations, unless such arrangement is specifically approved in writing by the
Enterprise.

           (c) Except as specifically authorized in this Article 3, the Manager shall not hold itself out
to any third party as the agent or representative of the Enterprise.

           (d) Notwithstanding anything to the contrary herein, the Manager shall have no power or
authority to do any of the prohibited activities as set forth on
Exhibit C, attached hereto and
incorporated herein by reference

     3.3 Overall Responsibilities.

        (a) The Manager’s responsibilities shall include, among other things, maintenance and
improvement of the Gaming Facility and management and operation of the Casino, provided that all
such responsibilities shall be carried out in accordance with the Operating Standard. The Manager
shall conduct and direct all business and affairs in connection with the day-to-day operation,
management and maintenance of the Casino, including the establishment of operating days and hours,
it being understood that the Enterprise and the Manager intend that the Gaming Facility will be
open 24 hours daily, seven days a week, in accordance with the Operating Standard.

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         (b) Without limiting the generality of the foregoing, the Manager’s responsibilities and
duties under this Agreement shall include the following:

(i) The Manager shall use reasonable measures for the orderly physical
administration, management, and operation of the Casino;

(ii) The Manager shall comply with all applicable provisions of the Internal
Revenue Code, including the prompt filing of any cash transaction reports and W-2G
reports that may be required by the Internal Revenue Service of the United States;

(iii) The Manager shall comply with all applicable terms and conditions of the
Control Agreements;

(iv) The Manager shall perform those additional responsibilities and duties set
forth on Exhibit D, attached hereto and incorporated herein by reference; and

(v) The Manager shall perform those additional Pre-Opening Services set forth on
Exhibit E, attached hereto and incorporated herein by reference.

Manager’s obligations with respect to any Control Agreement shall be limited to the extent (a) a
complete and accurate copy of such Control Agreement or, in lieu of such copy, summaries of the
relevant provisions thereof (Manager shall be entitled to rely upon the accuracy and completeness
of such summaries) have been delivered to Manager sufficiently in advance to allow Manager to
perform such obligations and (b) the provisions thereof and/or compliance with such provisions by
Manager (i) do not require contribution of capital or payments of Manager’s own funds (nothing
herein shall modify or affect any capital contribution or payment obligations of Manager set forth
in the LLC Agreement) and (ii) do not limit or purport to limit any corporate activity or
transaction with respect to Manager or its affiliates or any other activity, transfer, transaction,
property or other matter involving Manager or its affiliates other than at the site of the Casino
or with regard to Casino operations. The Enterprise acknowledges and agrees, without limiting the
foregoing, that any failure of Manager or the Casino to comply with the provisions of any Control
Agreement arising out of (1) written instructions from the Enterprise to operate the Casino in a
manner inconsistent with the Control Agreements and/or (2) the Enterprise’s failure to approve any
matter requested by Manager in Manager’s reasonable good faith business judgment as necessary or
appropriate to achieve compliance with any Control Agreement shall not be deemed a breach by
Manager of its obligations under this Agreement.

     3.4 Compliance with Laws.

          (a) The Manager shall be responsible for complying with all applicable Legal Requirements,
including the Gaming Laws, in connection with the Casino. The Enterprise agrees to cooperate with
the Manager and aid the Manager in ensuring such compliance. In managing and operating the Casino,
the Manager shall comply with all Legal Requirements and all other agreements affecting the same,
including the Gaming Laws. Subject to the Approved Budget or subject to the approval of the
Enterprise as to an unbudgeted expenditure, Manager shall promptly remedy any violation of any such
laws, rules, regulations, ordinances, compacts or other agreements which comes to its attention and
shall give written notice to the Enterprise in the event that Manager or any Affiliate of Manager
receives any notice issued by the applicable governmental authorities pursuant to the Gaming Laws
which threatens suspension or revocation of the Enterprise’s license or may be reasonably
interpreted to prevent Manager from fulfilling its duties under this Agreement. Manager shall also
promptly give written notice to the Enterprise in the event that Manager or any Affiliate of
Manager receives any notice (written or oral) from any governmental authority relating to any of
the other gaming facilities Manager manages with

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regard to compliance (or lack thereof) with any laws, regulations, orders, compacts, permits,
licenses, rules or contracts or agreements regulating, authorizing or otherwise applicable to
gaming operations (including the ability to conduct such operations).

          (b) The Enterprise agrees to cooperate with the Manager and the Manager agrees to take all
appropriate steps and execute all appropriate applications and documents to obtain all licenses,
approvals and permits required in connection with the Casino, including all necessary approvals of
Governmental Authorities of this Agreement and all liquor licenses for the contemplated beverage
operations at the Casino, all in accordance with the Approved Operating Plan.

          (c) The Manager shall not commit any act of default under the terms and conditions contained
in any Control Agreement, provided, in the case of a monetary default, that funds are available to
Manager in the Approved Budget, shall not act or omit to act in the performance of its duties and
obligations under this Agreement in a manner giving rise to any liability under any indemnification
provisions set forth therein and shall promptly notify the Enterprise of any such default which
comes to the attention and knowledge of the Enterprise.

     3.5 Security. The Manager shall provide for appropriate security for the operation of the
Casino in accordance with the Approved Budget and Approved Operating Plan. Upon agreement of the
Enterprise and the Manager, any security officer may be bonded and insured in an amount
commensurate with his or her enforcement duties and obligations. The cost of any charge for
security and increased public safety services will constitute a Cost of Operations.

     3.6 Accounting, Financial Records, and Audits.

          (a) The Manager shall maintain full and accurate records and books of account for operations
of gaming activities and related ancillary operations managed by the Manager. Such records shall be
maintained at the Gaming Facility and shall be made available for immediate inspection and
verification at all times. In addition, Manager shall not, at any time, prevent or hinder the
Enterprise’s access to all gaming machines and related systems and system-produced gaming machine
financial reports for any applicable period (Manager shall, in addition, provide such reports
promptly upon request of the Enterprise). The books and records and all other records relating to
or reflecting the operation of the Casino shall at all times be the property of the Enterprise.

          (b) Upon any termination of this Agreement, all of such books and records forthwith shall be
turned over to the Enterprise so as to insure the orderly continuance of the operation of the
Casino. The Enterprise shall be responsible for filing with the IRS all required year-end income
tax returns, and Manager shall cooperate with and provide information requested by the Enterprise’s
accountants in regard to the preparation by such accountants and filing by the Enterprise of such
tax returns and any other income or other tax returns required by any governmental authority. This
Section 3.6(b) shall survive the expiration or earlier termination of this Agreement.

          (c) During the Pre-Opening Period, the Manager shall establish (subject to the Enterprise’s
approval) and maintain satisfactory accounting systems and procedures that shall, at a minimum:

          (i) include an adequate system of internal accounting controls;

          (ii) permit the preparation of financial statements in accordance with GAAP;

          (iii) be susceptible to audit;

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(iv) permit the calculation of the Management Fees; and

(v) provide for the allocation of operating expenses or overhead expenses among the
Enterprise, the Manager and any other user of shared facilities or services.

The system of internal accounting controls will require the maintenance of records that, in
reasonable detail: (w) accurately and fairly reflect the transactions and dispositions of the
assets of the Casino; (x) provide reasonable assurance that gaming transactions are recorded as
necessary to permit preparation of Casino financial statements in accordance with GAAP, and
receipts and expenditures of the Casino are being made only in accordance with authorizations of
Casino management; (y) provide reasonable assurance regarding prevention or untimely detection of
unauthorized acquisition, use or disposition of the Casino’s assets that could have a material
effect on the Casino’s financial statements; and (z) provide reasonable assurance of continued
compliance with the terms and conditions of all Control Agreements. Supporting records and the
agreed upon accounting system shall be sufficiently detailed to permit the calculation and payment
of the Management Fees and to permit the performance of any fee or contribution computations
required under the Lottery Facility Management Contract and applicable laws or regulations.
Manager shall promptly correct any weaknesses in internal controls or errors in recordkeeping upon
discovery.

          (d) All Lottery Gaming Facility Revenues, Total Revenues and other income and revenue of every
kind resulting from the operation of the Casino will be calculated by the Manager for purposes of
distribution daily and distribution monthly, as the case may be, in accordance with Section 6.3 and
copies of such calculations shall be promptly supplied to the Enterprise as required by Section
6.2.

          (e) All records shall be maintained so as to permit the preparation of financial statements in
accordance with GAAP. The Manager shall furnish to the Enterprise monthly financial reports in
accordance with Section 6.2. Such reports shall provide reasonable detail as requested by the
Enterprise with respect to revenues and expenses of each profit center of the Casino. The Manager
shall make, or cause to be made, any reports or presentations to the Enterprise as are requested,
including any reports as may be required by the Lender or any Governmental Authorities. In
connection therewith, Manager shall provide, or cause to be provided, to the Enterprise, upon
request, copies of (i) bank statements, bank deposit slips and bank reconciliations, (ii) detailed
cash receipts and disbursement records, (iii) detailed trial balance (if available), (iv) paid
invoices, (v) summaries of adjusting journal entries, (vi) supporting documentation for payroll,
payroll taxes and employee benefits, and (vii) all other financial reports and/or information
reasonably requested by the Enterprise.

     3.7.
Cash Monitoring. The Manager will promulgate (subject to the Enterprise’s approval), and
all parties and their respective employees, agents, and representatives will obey, operational
policies with respect to the handling of cash, security systems, and access to cash cage, counting
rooms, and other places where cash is kept and handled. Manager shall not, at any time, prevent or
hinder the Enterprise in monitoring and investigating systems for cash management implemented by
the Manager and to verify daily Lottery Gaming Facility Revenues and all other revenues and income
of any kind and nature of the Casino.

     3.8
Bank Accounts, Reserve Funds and Permitted Investments.

          (a) During the Pre-Opening Period, the Enterprise shall create two accounts (one, the “General
Operating Account” and the other, the “Lottery Facility Account”) at a commercial bank that is
organized under the laws of the United States of America or any state thereof, and is a member of
the Federal Deposit Insurance Corporation. In addition, the Enterprise shall be responsible to
create any

16

 

other bank accounts required under the Lottery Facility Management Contract. Manager shall deposit,
or cause to be deposited, daily all Lottery Facility Gaming Revenue into the Lottery Facility
Account and all other income and revenue of every kind resulting from the operation of the Casino
into the General Operating Account. The Manager, with the approval of the Enterprise, shall also
establish other segregated bank accounts for use in connection with the operation of the Casino
(collectively, the “Project Accounts”), each of which must indicate the custodial nature of the
accounts. The Enterprise shall have the right to control the General Operating Account, Lottery
Facility Account and Project Accounts and to authorize deposits and withdrawals of any size, with
regard thereto. The signatures of authorized representatives of the Manager shall be the only
signatures required to make withdrawals (by check or otherwise) from the General Operating Account
or any Project Account for single withdrawals of less than $500,000, provided that the monies
withdrawn by the Manager are to be used only in accordance with the Approved Budget and only for
the purposes set forth herein. If the amount of any single withdrawal exceeds $500,000 (excluding
amounts to be applied to payouts and prizes, transfers to any designated payroll accounts, taxes,
cash for day-to-day operational purposes, or Management Fees), then the signature of the
Enterprise’s designated representative will also be required.

          (b) Unless instructed otherwise by the Enterprise, Manager agrees that subject to the terms of
Sections 6.3(b) and 7.4(a), the Manager shall make, or cause to be made, timely transfers from the
General Operating Account to the Project Accounts of all funds needed to pay (i) Costs of
Operations; (ii) payments required pursuant to the Lottery Facility Management Contract (other than
the Lottery Facility Gaming Revenues which are to be deposited and distributed from the Lottery
Facility Account); and (iii) disbursements required pursuant to Section 6.3.

          (c) Surplus funds deposited in the General Operating Account and the Project Accounts may be
invested by the Enterprise in a money market mutual fund registered under the Investment Company
Act of 1940 that invests exclusively in (A) marketable direct obligations issued or unconditionally
guaranteed by the United States Government or issued by an agency thereof and backed by the full
faith and credit of the United States, or (B) commercial paper having, at the time of acquisition,
a rating of A-1 or P-1 or better from either Standard & Poor’s Corporation or Moody’s Investors
Service, Inc., respectively, or otherwise as the Enterprise may determine.

     3.9 Intentionally Omitted.

     3.10 Fire and Safety Services. The Manager shall be responsible for obtaining adequate
coverage for fire and safety services and may, in its discretion, have such services provided on a
contractual basis by the local fire and police departments, provided the costs of such services are
in accordance with the Approved Budget and Approved Operating Plan.

     3.11 Timely Payment of Costs of Operations. The Manager shall be responsible for paying, or
causing to be paid, all Costs of Operations on behalf of the Enterprise from the General Operating
Account or the Project Accounts, pursuant to procedures approved by Manager, so as to avoid any
late-payment penalties (except those incurred as a result of good faith payment disputes) to the
extent funds of the Casino are available in accordance with the Approved Budget; provided, however,
that payment of all such Costs of Operations shall be solely the legal responsibility of the
Enterprise, subject to the terms and conditions of this Agreement.

     3.12 Acquisition of Gaming and Other Equipment. Subject to the provisions of Sections 2.3 and
3.21 hereof, all acquisitions of Furnishings and Equipment for the Casino, either prior to or after
the public opening of the Gaming Facility shall be purchased by the Manager as agent for the
Enterprise in accordance with the Approved Budget and Approved Operating Plan, on behalf of the
Casino on a cash on delivery basis, unless otherwise agreed by the Enterprise.

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     3.13 Hours of Operation. The Manager shall be responsible for the establishment of operating
days and hours in accordance with the Approved Operating Plan. It is intended that the Gaming
Facility shall be operated seven days per week and twenty-four hours per day, subject to any
restrictions in the Legal Requirements.

     3.14 Access to Operations. Manager shall not take any action to block or hinder immediate
access by the Enterprise’s designated representative to (i) the gaming operation, including gaming
machine and table software, for inspection and generation of reports on payouts and operations,
(ii) reports of all gaming machine and gaming table software’s compliance with the Gaming Laws, and
(iii) all books and records relating to the gaming operation.

     3.15 Increased Public Safety Services. Increased actual costs of law enforcement and police
protection services required as a result of gaming activities in the Gaming Facility shall be paid
as Costs of Operations in accordance with the Approved Budget.

     3.16 Advertising. Subject to obtaining the Enterprise’s approval, the Manager shall contract
for and place advertising in accordance with the Approved Budget and Approved Operating Plan.
Advertising costs will be included in the operating budgets prepared in accordance with Article 6.
Manager shall prepare advertising plans and promotional material, and place advertising as
appropriate in compliance with applicable laws, as contemplated in the Approved Operating Plan and
subject to the Approved Budget.

     3.17 Certain Meetings. To facilitate oversight of the activities conducted pursuant to this
Agreement and to maintain communication generally between the individuals who will be involved in
supervising those activities, the Enterprise or its designated representative and the Manager’s
principal individuals will meet at least quarterly to review operations of the Gaming Facility and
any current issues pertaining thereto.

     3.18 Maintenance. The Manager will cause the Gaming Facility to be repaired and maintained and
operated in a clean, good and orderly condition, including interior and exterior cleaning, painting
and decorating, plumbing, carpentry, grounds and landscaping maintenance, snow and ice removal and
such other maintenance and repair work as may be desirable. Repairs and maintenance will be paid
in accordance with the Approved Budget as Costs of Operations. Notwithstanding anything to the
contrary contained in this Section, Manager shall not perform the foregoing services with respect
to any repairs or improvements to the Gaming Facility, unless (a) the expenditure thereunder is
provided for in the Approved Budget, or (b) such repair or improvement is otherwise agreed to in
writing by the Enterprise. In addition, notwithstanding the Approved Budget, the Enterprise may,
from time to time, make such alterations, additions or improvements (including structural changes)
to the Casino and cause Furnishings and Equipment to be changed, upgraded, replaced or added, as
the Enterprise deems to be desirable and all as Costs of the Operations, and Manager shall
cooperate with the Enterprise in such regard.

     3.19 Term.

          (a) Except as provided for in Section 3.19(b), this Agreement shall become effective on the
Effective Date and will terminate fifteen (15) years after the Commencement Date (as defined in the
Lottery Facility Management Contract), unless terminated earlier in accordance with the terms of
this Agreement, it being the intent of the parties to make this Agreement coterminous with the
Lottery Facility Management Contract. If, at the time of the expiration of the initial fifteen (15)
year term, the Lottery Facility Management Contract has been successfully renewed between the
Kansas Lottery and the Enterprise on the same terms and conditions applying during the initial term
thereof and no requirement

18

 

of additional payment of fees or investment in infrastructure, the Enterprise shall negotiate in
good faith a renewal of this Agreement, subject to the conditions that such renewal shall be (i)
for a term equal to that of the renewal term (excluding any unexercised options to renew
thereunder) of the Lottery Facility Management Contract, and (ii) upon the same terms and
conditions as set forth herein.

          (b) Notwithstanding Section 3.19(a), this Agreement shall terminate: (i) on the date the
Lottery Facility Management Contract expires or terminates for any reason; (ii) if, prior to the
fourth anniversary of the Opening Date of the Casino, Manager is terminated as manager upon a sale
of the Casino or the Enterprise, provided that in such case Manager shall be paid an amount equal
to the Management Fees paid to Manager during the trailing twelve month period (trailing the date
of such termination) multiplied by the difference between four and the number of years between the
Opening Date of the Casino and the date of such sale; (iii) if Manager is terminated as manager
upon a sale of the Casino or the Enterprise on or after the fourth anniversary of the Opening Date
of the Casino, in which case Manager shall not be entitled to any further payments; or (iv) as set
forth in Article 7 herein.

     3.20 Representatives. To the extent any authorization, consent or other approval of the
Enterprise is required under this Agreement and the Enterprise shall have provided to the Manager a
resolution naming any individual or individuals authorized to represent the Enterprise for purposes
of any such authorization, consent or other approval, the Manager, absent actual knowledge that
such individual or individuals are not so authorized, shall be entitled to rely on all decisions,
authorizations, consents, and approvals provided by such individual or individuals so named until
such time as the Enterprise shall deliver to the Manager an additional resolution revoking or
otherwise modifying such authority. To the extent any authorization, consent or other approval of
Manager is required under this Agreement and Manager shall have provided to the Enterprise a
resolution naming any individual or individuals authorized to represent Manager for purposes of any
such authorization, consent or other approval, the Enterprise, absent actual knowledge that such
individual or individuals are not so authorized, shall be entitled to rely on all decisions,
authorizations, consents, and approvals provided by such individual or individuals so named until
such time as Manager shall deliver to the Enterprise an additional resolution revoking or otherwise
modifying such authority.

     3.21 Service Contracts; Purchase Orders. Manager shall cooperate with and assist the
Enterprise in the negotiation of service contracts and leases for Furnishings and Equipment
reasonably necessary or desirable in connection with the operation of the Casino in the usual
course of business, pursuant to the Approved Budget and Approved Operating Plan. Unless approved by
the Enterprise, all such contracts shall contain an obligation on the part of the vendor to
indemnify the Enterprise to a customary and reasonable degree and require the vendor to obtain
insurance coverages as required by any Control Agreements and as otherwise necessary to protect the
Enterprise to the extent customary for similar contracts. In the case of any service contract for
labor or materials, the nonpayment of which could give rise to lien rights on the part of the
contracting party against the Casino, then prior to and as a condition of any payment, Manager
shall use reasonable efforts to obtain appropriate lien waivers at the time of execution and shall
obtain appropriate lien waivers from the contracting party conditioned upon receipt of the
specified payment and thereafter upon completion of the contract work, a full, unconditional lien
waiver from the contracting party. Manager shall supervise and, utilizing the funds available or
made available for this purpose pursuant to terms hereof and in accordance with the Approved Budget
and Approved Operating Plan, purchase, or arrange for the purchase of, all Furnishings and
Equipment which in the normal course of business are necessary and proper to maintain the Casino in
accordance with the Operating Standard, provided, however, that Manager may not purchase or arrange
for the purchase of Furnishings and Equipment, without obtaining the Enterprise’s approval with
respect to the identity of each vendor, the details of the Furnishings and Equipment (e.g., kind,
specs, quantity etc.) and the terms and conditions (including price) of the acquisition by lease or
sale for those items (by category) of Furnishings and Equipment.

19

 

     3.22 Taxes; Mortgages. Manager shall, if and when requested by the Enterprise to do so, (i)
obtain and verify bills for real estate and personal property taxes, improvement assessments and
other like charges which are or may become liens against the Casino or the Enterprise, and pay such
items in accordance with the Approved Budget in time to avoid penalty for late payment and (ii)
make payments on account of any applicable provision of any Control Agreement to the extent the
amounts of such projected expenditures are included in the Approved Budget. Manager’s
responsibility for the foregoing shall be limited to funds authorized in the Approved Budget and
available in the General Operating Account.

ARTICLE 4

Personnel Matters

     4.1 Employees.

          (a) All employees involved with operation of the Casino throughout the Gaming Facility subject
to management by the Manager under this Agreement shall be employees of the Enterprise (excluding
the employees of tenants, licensees and concessionaires and similarly situated third parties and
any employees of Manager or its Affiliates). The Manager shall be responsible, and shall be
required, to (i) solicit, recruit and identify candidates and make recommendations to the
Enterprise as to the hiring, training, promoting, supervising and firing of all employees and (ii)
train employees in Core Positions, in each case as may be required to maintain the standard of
quality of management and operation at the level consistent with the Operating Standard, in
accordance with Employment Laws, Project Employee Policies, the staffing plan approved by the
Executive Director pursuant to the Lottery Facility Management Contract and the Approved Budget and
Approved Operating Plan; provided, however, notwithstanding the foregoing, the employment,
advancement and termination of employees in any of the Core Positions shall be subject to the
approval of the Enterprise, and in addition, the Enterprise shall have the sole authority to
terminate any such employees, subject to the following caveats: (i) the Enterprise shall not hire
any person to initially fill the Core Positions of the General Manager or the Chief Financial
Officer unless Manager has not recommended any candidates acceptable to the Enterprise by the date
which is eight months prior to the scheduled Opening Date and (ii) the Enterprise shall not hire
any person to replace any person in the Core Positions of the General Manager or the Chief
Financial Officer unless Manager has not recommended any candidates acceptable to the Enterprise
within forty-five (45) days of the date on which the need for any such replacement first becomes
known to Manager. Prior to making a recommendation as to the hiring of any employees in any of the
Core Positions, Manager shall deliver to the Enterprise the candidate’s resume and any other
information reasonably requested by the Enterprise, including background check information, and
shall provide the Enterprise with an opportunity to interview such person, if requested by the
Enterprise. With regard to any requests for approvals concerning employees, the Enterprise shall
use reasonable efforts to respond promptly.

          (b) Manager shall prepare the staffing plan and budget for employee compensation, for the
approval of the Enterprise and, upon approval, submit the same to the Executive Director for
approval pursuant to the terms of the Lottery Facility Management Contract (unless the Enterprise
notifies Manager that the Enterprise will handle a submission to the Executive Director).

          (c) Manager shall develop a policy and procedure in conjunction with the Enterprise, to
implement an executive development program for employees who are members of the Enterprise whereby
members will be prepared through training and education to assume key management positions within
the gaming and ancillary operations of the Casino.

          (d) All salaries, wages, employee insurance, worker compensation premiums,

20

 

employment taxes, government exactions of any kind related to employment, benefits, and overhead
related to the hiring, supervising, and discharge of employees, will be Costs of Operations, in
accordance with and subject to the Approved Budget and Approved Operating Plan.

          (e) Manager shall promptly reimburse the Enterprise for any damages or losses resulting from
any theft or misappropriation, fraud, felony and other similar acts committed by Manager or an
Affiliate of Manager or any of their respective employees and, upon learning of any such act by an
such employee, Manager shall immediately terminate, or cause to be terminated, the employment of
such employee. Upon learning any theft or misappropriation, fraud, felony and other similar act
committed by any employees of the Enterprise at the Casino, Manager shall immediately terminate, or
cause to be terminated, the employment of such employee.

          (f) Notwithstanding any other provision in this Agreement to the contrary, (i) Manager shall
indemnify and hold harmless the Enterprise for any and all claims, demands, obligations or
liabilities, including reasonable attorneys’ fees, that may arise against the Enterprise from or as
a result of actions, inactions or decisions made by Manager in connection with any personnel
matters, and (ii) the Enterprise shall indemnify and hold harmless Manager for any and all claims,
demands, obligations or liabilities, including reasonable attorneys’ fees, that may arise against
Manager from or as a result of actions, inactions, or decisions made by the Enterprise in
connection with any personnel matters.

          (g) Only the Enterprise (and not the Manager) shall have the right to enter into a collective
bargaining agreement (including any amendments thereto or modifications thereof) or deal with any
labor unions with respect to the employees at the Casino. The Manager shall not have any authority
to negotiate on behalf of the Enterprise with any labor organization or union with regard to such
employees.

     4.2 Project Employee Policies. The Manager shall prepare a draft of personnel policies and
procedures (the “Project Employee Policies”), including a job classification system with salary
levels and scales and job descriptions (including duties), in accordance with all applicable
Employment Laws and Gaming Laws, any staffing plan approved by the Executive Director under the
Lottery Facility Management Contract and the Operating Standard, which policies and procedures
shall be subject to approval by the Enterprise. The Project Employee Policies shall include a
grievance procedure in order to establish fair and uniform standards for the Casino employees,
which will include procedures for the resolution of disputes between the Casino and Project
employees. The Manager shall be responsible for administering the Project Employee Policies.
Manager will not discriminate against any employee or applicant for employment because of race,
creed, color, sex, age, or national origin nor violate any applicable law, regulation or local
ordinance governing employer obligations.

     4.3 Employee Background Checks. Manager shall be responsible for ensuring that a background
investigation is conducted in compliance with all Legal Requirements including Employment Laws, to
the extent applicable, on each applicant for employment as soon as reasonably practicable. No
individual whose prior activities, criminal record, if any, or reputation, habits and associations
are known to pose a threat to the public interest, the effective regulation of gaming activities,
or to the gaming licenses of the Manager or the Casino, or to create or enhance the dangers of
unsuitable, unfair, or illegal practices and methods and activities in the conduct of Casino gaming
activities, shall knowingly be recommended for employment by Manager or be employed by the
Enterprise. The background investigation procedures shall be formulated by the Manager so as to
ensure that personnel meet all applicable regulatory requirements imposed by the Kansas Lottery
Commission or the Kansas Racing and Gaming Commission and to satisfy all Gaming Laws; such
background investigation procedures shall be subject to the review and approval of the Enterprise.
Any cost associated with obtaining such background investigations shall constitute a Cost of
Operations subject to the Approved Budget.

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ARTICLE 5

Insurance

     5.1 Duty to Maintain. The Enterprise (or the Manager, acting as agent for the Enterprise, at
the Enterprise’s sole discretion), shall obtain and maintain, in accordance with and subject to the
Approved Budget, insurance coverages in forms and amounts consistent with comparable facilities
that will adequately protect the Enterprise and the Manager, but in no case less than the amounts
set forth in this Article, or as required by any Lender requirements, Legal Requirements or Control
Agreements, including the following coverages:

          (a) Workers’ Compensation. Adequate workers’ compensation insurance in accordance with all
applicable laws, including employer’s liability insurance, in amounts consistent with comparable
facilities.

          (b) Commercial General Liability. Commercial general liability insurance covering operations
of the Casino, including blanket contractual liability coverage, broad form property liability
coverage, and personal injury coverage in the amount of $1,000,000 per person/$3,000,000 per
occurrence for bodily injury and $1,000,000 per person/$3,000,000 per occurrence for property
damage.

          (c) Automobile. Comprehensive automobile liability insurance covering operations of the
Casino, including all owned, hired and non-owned automobiles, trucks, buses, trailers, motorcycles
or other equipment licensed for highway use with limits and coverage consistent with comparable
facilities.

          (d) Property Insurance. Replacement value all-risk casualty and extended hazard insurance in
coverage amounts consistent with comparable facilities that shall insure the Gaming Facility and
any fixtures, improvements and contents located therein against loss or damage by fire, theft and
vandalism.

          (e) Fidelity Bond. Fidelity bonds on Casino employees in amounts consistent with comparable
facilities.

          (f) Unemployment Insurance. Unemployment compensation/disability insurance with respect to
the Casino employees in amounts consistent with comparable facilities.

     5.2 The Manager to be Additional Insured. Insurance policies referred to in Sections 5.1(b)
and (c) shall name the Manager as an additional insured.

     5.3 Manager Insurance. Manager shall obtain and maintain all insurance coverages consistent
with insurance maintained by managers, for their own account, of facilities of comparable size and
scope and such other insurance reasonably required by the Enterprise. The cost of such insurance
shall be borne by Manager and shall not be included as a Cost of Operations or otherwise
reimbursable by the Enterprise. The Enterprise shall be named as an additional insured on such
policies.

     5.4 Evidence of Insurance. From time to time as reasonably requested by the Enterprise, the
Manager shall supply to the Enterprise and any necessary Governmental Authorities copies of the
insurance policies required by this Article applicable to the Casino.

     5.5 Insurance Proceeds. The Enterprise shall have sole discretion to determine how to apply
any insurance proceeds received with respect to the Casino, subject only to the terms and
conditions of

22

 

the Control Agreements; provided, however, that if there is any insurance recovery for a claim
related to the operation of the Casino for which either the Enterprise or the Manager has
previously paid from its own separate funds, then, to the extent of amounts paid by either of such
parties, the insurance proceeds will be paid over to them and the balance shall be retained by the
Enterprise.

ARTICLE 6

Budgets, Operating Plans, Compensation and Reimbursement

     6.1 Projections and Budgets.

          (a) The Manager shall use its best efforts to project expected revenues and expenses for the
first two (2) years of the Manager’s operation of the Casino.

          (b) The Manager shall prepare an initial operating budget and business plan for the first
Fiscal Year of Casino operations under its management pursuant to this Agreement and submit the
same to the Enterprise for approval by the Enterprise at least one hundred twenty (120) days prior
to the anticipated Opening Date. Annual operating budgets and business plans shall be submitted by
the Manager to the Enterprise thereafter by no later than thirty (30) days prior to the
commencement of the next Fiscal Year. The proposed initial operating budget and plan and each
subsequent proposed annual operating budget and plan (the “Proposed Budget” and the “Proposed
Operating Plan” respectively) shall be subject to approval or disapproval in the Enterprise’s sole
discretion. The Proposed Budget and Proposed Operating Plan shall (i) set forth an estimated
projection of all income and expenses for the ensuing Fiscal Year, projected revenue and
miscellaneous income, and (ii) be prepared based on the best then current information available to
Manager and although not intended to be a guarantee thereof, shall constitute Manager’s best
efforts to accurately project levels of revenue and expenditures. The Proposed Operating Plan shall
include Manager’s detailed plan of operation for the Casino, including but not limited to marketing
and advertising, game mix (including denominations and theoretical hold percentages), promotional
items, hours of operation for all food and beverage venues, special events (including gaming
tournaments and concerts), and surveillance and security. Manager shall review the Proposed Budget
and Proposed Operating Plan with the Enterprise. The Enterprise may approve or disapprove of any
item on the Proposed Budget and any item on or aspect of the Proposed Operating Plan. Upon
approval by the Enterprise, the Proposed Budget, as and to the extent revised during the review
process, shall become the budget for the next full or partial Fiscal Year, as the case may be
(together with the maintenance capital expenditure budget approved by the Enterprise under Section
6.1(d) below for the same period, collectively, the “Approved Budget”). Upon approval by the
Enterprise, the Proposed Operating Plan, as and to the extent revised during the review process,
shall become the business plan for the next full or partial Fiscal Year, as the case may be (the
“"Approved Operating Plan”). The Proposed Budget, as well as the Approved Budget, shall provide for
reserves if and to the extent required under any of the Control Agreements or otherwise directed by
the Enterprise. The Enterprise and the Manager recognize that adjustments may be proposed by
Manager and, if approved by the Enterprise, made, to previously Approved Budget and Approved
Operating Plan from time to time during any Fiscal Year, to reflect the impact of unforeseen
circumstances, financial constraints, or other events. The Manager agrees to promptly inform the
Enterprise regarding any items of revenue or expense that are reasonably anticipated to cause a
material change in the Cost of Operations or the performance of the Casino not in keeping with the
Approved Budget or the Approved Operating Plan. The Manager shall operate the Casino and make
expenditures in connection therewith in accordance with the Approved Budget and Approved Operating
Plan. In the event the Enterprise does not approve the Proposed Budget before commencement of the
Fiscal Year, the Approved Budget for the prior Fiscal Year shall be deemed to be in effect for that
Fiscal Year until such time as the Enterprise approves the Proposed Budget. Similarly, in the event
the Enterprise does not approve the Proposed Operating Plan before commencement of the Fiscal Year,
the Approved Operating Plan for the prior Fiscal Year shall be deemed to be in effect for that
Fiscal Year until such time
as the Enterprise approves the Proposed Operating Plan.

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          (c) Manager shall monitor the Approved Budget and Approved Operating Plan throughout the
Fiscal Year and shall meet (on-site or by telephone) not less than one (1) time per calendar month
with the Enterprise for purposes of reviewing Casino operations and to make any revisions to the
Approved Budget and/or Approved Operating Plan as may be required by the Enterprise to maintain or
improve profits and margins as originally budgeted and projected. In addition, upon the request of
either party, from time to time, the other party shall meet (on-site or by telephone) with the
requesting party to review and discuss the status of the Approved Budget and Approved Operating
Plan as compared to the actual income and expenses of the Casino. To the extent necessary, Manager
shall prepare and deliver to the Enterprise revised projections of the income and expenses for the
Casino for the balance of the then current Fiscal Year and, to the extent approved by the
Enterprise, such revised projections shall become part of the Approved Budget and Approved
Operating Plan.

          (d) At the same time that Manager prepares and submits any Proposed Budget to the Enterprise,
Manager shall prepare and submit an annual summary of the estimated replacement and maintenance
capital expenditures for the ensuing Fiscal Year and two Fiscal Years thereafter to the Enterprise
for approval. The proposed capital expenditure budgets shall (i) include estimates of (x)
expenditures for Furnishings and Equipment, (y) expenditures for capital equipment not included in
Furnishings and Equipment, and (z) expenditures for renovations, alterations, and rebuilding of the
Casino, and (ii) be subject to approval by the Enterprise. Manager shall review said maintenance
capital expenditure budgets with the Enterprise. For budgeting purposes, Manager shall obtain bids
for items contemplated in the replacement and capital expenditures estimated for the first Fiscal
Year of said budget, to the best of Manager’s ability; however, any expenditures reflected in said
budget shall not be made by Manager without the approval of the Enterprise (except to the extent
any particular expenditure is also contemplated and expressly included in the Approved Budget). The
Enterprise may approve or disapprove of any item on such proposed budget. The Enterprise and the
Manager recognize that mutually agreeable adjustments may be made to previously approved
maintenance capital expenditure budgets from time to time during any Fiscal Year to reflect the
impact of unforeseen circumstances, financial constraints, or other events. The Manager agrees to
promptly inform the Enterprise and obtain the Enterprise’s approval regarding any projects or
expenditures that are reasonably anticipated to cause a material change in the Cost of Operations
not in keeping with the maintenance capital expenditure budget previously approved by the
Enterprise. The Manager shall make maintenance capital expenditures in accordance with such
approved maintenance capital expenditure budget.

          (e) Manager shall prepare and submit to the Enterprise for approval any business plan,
including policies for comping and a marketing plan, floor plan, surveillance plan, security plan
and any other plans required by the Kansas Lottery, all of which shall comply with the terms of the
Lottery Facility Management Contract and be consistent with the Approved Budget and Approved
Operating Plan. Manager agrees that all communications with Kansas Lottery or any other
Governmental Authorities responsible for the implementation or administration of any Gaming Laws
concerning the condition of the Casino, the details of development, construction, operations,
submission of any business plan required under the Lottery Facility Management Contract and the
renewal or modification of any Gaming License shall be subject to the prior approval and direction
of the Enterprise; provided, however, the Manager and the Enterprise shall work together to develop
a written protocol acceptable to the Enterprise pursuant to which certain ordinary-course
communications between Manager and such Governmental Authorities may be permitted and a written
protocol acceptable to the Enterprise for the handling, through the Enterprise, of all other
communications with Governmental Authorities.

     6.2 Monthly Statements. The Manager shall be responsible for preparation of monthly financial
statements and shall furnish to the Enterprise’s designated representative financial statements

24

 

identifying, for each day for which such reports are normally available, the Lottery Gaming
Facility Revenues and all other revenues and income of any kind or nature attributable to operation
of the Casino on such day. Within twenty one (21) days after the end of each calendar month, the
Manager shall provide verifiable financial statements in accordance with GAAP to the Enterprise
covering the preceding month’s operation of the Casino, including operating statements, balance
sheets, income statements and statements reflecting the amounts computed to be distributed in
accordance with Section 6.3. Without limiting the generality of the foregoing, such monthly
financial statements shall also include (i) a profit and loss statement comparing actual results to
both budget and the previous year’s actual results (if available), for both the current month and
Fiscal Year to date, (ii) a summary of operating expenses and net operating income, (iii) an
accounting of all inflows and expenditures relating to any reserves, (iv) a comparison of capital
expenditures to the then current capital budget, (v) working capital requests (if any), and (vi) a
narrative to include an executive summary and discussion of any variances from the Approved Budget
with respect to such month or year to date, together with such additional information as the
Enterprise may require from time to time.

     6.3 Distribution of Revenues.

          (a) Following the Opening Date and continuing thereafter for the remainder of the term of this
Agreement, Manager (and not the Enterprise) shall be responsible to distribute all Lottery Gaming
Facility Revenues daily from the Lottery Facility Account to the Executive Director as provided by
applicable regulation and in accordance with Paragraphs 23 and 24 of the Lottery Facility
Management Contract (time being of the essence).

          (b) Following the Opening Date and continuing thereafter for the remainder of the term of this
Agreement, all amounts on deposit in the General Operating Account, net of amounts for the Costs of
Operations in accordance with the Approved Budget, shall be disbursed on a monthly basis as set
forth below, paid on or about the twentieth (20th) day of each calendar month for the
preceding month. Such amounts shall be disbursed from the General Operating Account in the
following order of priority (subject to adjustment as determined by the Enterprise):

	 	(i)	 	Current (and past due, if any) principal, interest and any other payments due
on any obligations to repay funding provided by the Lender in connection the
Facility Loan, any other loan to the Enterprise and/or equipping of the Gaming
Facility;
	 
	 	(ii)	 	Management Fees due the Manager under Section 6.3(c) below and payment due
Och-Ziff under Section 6.3(c) below (provided that if the distribution under this
subsection in any month is insufficient to fund such payment in full, the unpaid
amount shall be deferred and paid under subsection
(iii) below);

	 
	 	(iii)	 	Payment of amounts previously payable under subsection (ii) above, but
payment of which was previously deferred (including, with respect to any deferred
Management Fees and payments due to Och-Ziff under Section 6.3, interest accrued
thereon at the Applicable Rate from the date on which such Management Fees and
payments otherwise would have been due and payable);
	 
	 	(iv)	 	Any monthly capital replacement or other reserve contributions which have been created
with the written approval of the Enterprise; and
	 
	 	(v)	 	All remaining of such amounts deposited in the General Operating Account shall
be disbursed to the Enterprise at the same time the Management Fees are paid to
the Manager and the payments to Och-Ziff, subject to the terms of any
Control Agreement.

25

 

          (c) For so long as this Agreement shall remain in effect during the term hereof and as
provided for in this Agreement:

(i) As compensation for the Manager’s management services hereunder (such
compensation being herein referred to as “Management Fees”), for each twelve (12)
month period following the Opening Date (each a “Measurement Period,” with a new
such Measurement Period commencing on each anniversary of the Opening Date), the
Manager shall be entitled to management compensation equal to (x) eight percent
(8%) of EBITDAM for such Measurement Period minus (y) the fee payable to Och-Ziff
in Section 6.3(c)(iii) below.

(ii) For each month during any Measurement Period, the Enterprise shall pay to the
Manager an amount, to be applied against the Management Fees for such Measurement
Period, equal to eight percent (8%) of EBITDAM for such month, less the fee payable
to Och-Ziff in Section 6.3(c)(iii).

(iii) For each month during any Measurement Period, the Enterprise shall pay to
Och-Ziff an amount, to be applied against its fees hereunder for such Measurement
Period, equal to 15% of the Management Fees for such month.

(iv) Notwithstanding anything to the contrary in Section 6.3(b)(ii) above, Manager
or Och-Ziff, at their respective election, may demand payment from the Enterprise
of any amount deferred for more than sixty (60) days under Section 6.3(b)(ii)
above, together with interest accrued thereon at the Applicable Rate from the date
on which such Management Fees and payments otherwise would have been due and
payable (as contemplated in Section 6.3(b)(iii)). Failure of the Enterprise to make
any such payment to the Manager within thirty (30) calendar days after receipt of
such written demand from the Manager shall constitute a Material Breach by the
Enterprise.

          (d) The Manager, on behalf of the Casino, is responsible for making the disbursements from the
General Operating Account, as contemplated by this Section 6.3, to the appropriate parties.

          (e) The Manager shall, upon request from the Enterprise from time to time, agree in writing to
subordinate its rights under this Agreement, including the priority of any disbursement to be made
to the Manager or any Affiliate of the Manager pursuant to this Section, to the lien of any Lender
and any lender or holder of any security interest in the Casino, furniture, fixtures and equipment,
accounts and/or other assets of the Enterprise; provided, however, that Manager shall not be
obligated to waive or forbear from receiving, on a current basis and as and when due under this
Agreement, any and all fees due to it under this Agreement.

     6.4 Annual Audit; Termination Audit.

          (a) For each Fiscal Year, the Enterprise shall be responsible for causing an audit to be
conducted by an independent certified public accountant from a nationally recognized accounting
firm with more than five (5) years of experience in audits of gaming resort operations selected and
approved by the Enterprise and reasonably acceptable to the Manager, and shall use reasonable
efforts to cause such accounting firm shall issue, on or before seventy five (75) days after the
end of such Fiscal Year, a report

26

 

(an “Annual Report”) with financial statements in accordance with GAAP with respect to the
operations of the Casino during such Fiscal Year (or portion thereof in the case of the first
Fiscal Year), including operating statements, balance sheets, income statements and statements
reflecting the amounts computed to be distributed in accordance with Section 6.3, such Annual
Report to be approved at an annual meeting to be held at a location mutually agreed upon by the
Enterprise and the Manager.

          (b) Following termination of this Agreement in accordance with its terms, such accounting firm
shall conduct an audit, and on or before ninety (90) days after the termination date shall issue a
report (a “Termination Report”) setting forth the same information as is required in the annual
report, in each case with respect to the portion of the Fiscal Year ending on the termination date.

          (c) If any such Annual Report or Termination Report reveals that the amounts paid to the
Enterprise, the Manager or Och-Ziff in accordance with Section 6.3 above or otherwise for the
relevant period are different from the amount that should have been paid to such party based upon
the provisions of this Agreement, then to the extent either party received an overpayment, such
party shall pay the amount of such overpayment to the other party within twenty-five (25) days
after the receipt by the parties of such report, and to the extent either party was underpaid, such
party shall receive a payment from the other party of the amount of such underpayment within ten
(10) days after the receipt by the parties of such report.

     6.5 Collection of Revenues. All Total Revenues and any other income and revenue of every kind
resulting from the operation of the Casino shall be received and held in trust by Manager for the
benefit of the Enterprise and upon such receipt, Manager shall daily deposit the Lottery Gaming
Facility Revenues in the Lottery Facility Account and all other such income and revenue into the
General Operating Account. Manager shall use diligent efforts to collect and account to the
Enterprise for all revenues and other charges which may become due the Enterprise at any time from
occupants or others for sales or services provided in connection with or for the use of the Casino
or any portion thereof. In addition, Manager shall collect and account to the Enterprise for any
income from miscellaneous services provided to occupants or the public, including restaurant
income, parking income, occupant storage and coin-operated machines of all types.

     6.6 Manager’s Cost Not to be Reimbursed. Except to the extent that such costs and expenses are
approved in writing for payment by the Enterprise, the following expenses or costs incurred by or
on behalf of Manager in connection with the management of the Casino shall be borne solely by
Manager and shall not be reimbursed by the Enterprise (without intending to expand hereby any
category of the reimbursable costs):

          (a) Costs of salary and wages, bonuses, payroll taxes, insurance, worker’s compensation and
other benefits of the employees of Manager and any of its Affiliates, including all executive level
employees of Manager; it being agreed that Manager shall at all times have in its employ sufficient
personnel in order for Manager to perform the duties and services required of it hereunder and that
the normal consulting services of the corporate officers and employees of Manager and its
Affiliates with regard to operations, gaming operations, food and beverage, sales and marketing,
finance and administration and real estate, shall be rendered from time to time in connection with
the Casino at Manager’s sole cost and expense;

          (b) General accounting and reporting services which are within the reasonable scope of
Manager’s responsibility to the Enterprise;

          (c) Overhead, administrative and general expenses of Manager;

27

 

          (d) Cost of comprehensive crime insurance or fidelity bonds purchased by Manager for its own
account and the costs of the insurance described in Section 5.3 hereof;

          (e) All costs and expenses incurred in connection with training employees in Core Positions;
it being agreed that such training shall take place at the Gaming Facility and Manager shall be
responsible for all its own costs and expenses relating thereto including any costs and expenses
for travel, food, and lodging; and

          (f) Any other costs and expenses incurred by the Manager or its Affiliate not set forth in the
Approved Budget.

ARTICLE 7

Termination/Material Breach

     7.1 Termination for Material Breach.

          (a) Either the Enterprise or the Manager (the “Terminating Party”) may terminate this
Agreement if the other commits or allows to be committed a Material Breach or a Material Breach
with respect to the other occurs.

          (b) Except as otherwise expressly set forth herein, termination is not an exclusive remedy for
claims of a Material Breach, and the parties shall be entitled to other rights and remedies as may
be available pursuant to the terms of this Agreement or under applicable law.

          (c) For purposes of this Agreement, a “Material Breach” by or with respect to Manager is any
of the following circumstances:

(i) failure of Manager to perform any obligation under this Agreement in any material respect
for reasons not excused under Section 9.5 hereof (Force Majeure), and failure to cure such breach
within thirty (30) calendar days after receipt of written notice from the Enterprise identifying
the nature of the breach in specific detail and its intention to terminate this Agreement;
provided, however, that if the nature of such breach (but specifically excluding breaches curable
by the payment of money) is such that it is not possible to cure such breach within thirty (30)
days, such thirty-day period shall be extended for so long as Manager shall be using diligent
efforts to effect a cure thereof, but such period shall not be so extended for more than an
additional sixty (60) days (i.e., ninety (90) days in the aggregate);

(ii) (A) the commission of theft or misappropriation, fraud, felony, and other similar acts
(each a “Theft”) if such Theft is detrimental to the Casino and such Theft was committed by
Manager, its Affiliates, or any of their respective employees, agents, officers or directors and
if, (x) after learning of such Theft, Manager does not promptly remove such employee from
employment in connection with the operations of the Casino and reimburse the Enterprise for any
damages or losses caused by the Theft in accordance with Section 4.1(e) hereof, or (y) there have
been at least three prior unrelated incidents of Theft by any of Manager, its Affiliates, or any
employees, agents, officers or directors of Manager or its Affiliates (or group of such employees
acting in concert) and involving $1,000 or more (in each instance), to occur during the same
calendar year; or

     (B) the commission of a Theft if such Theft is detrimental to the Casino and such Theft was
committed by an employee of the Casino at the vice president level or above

28

 

and if, (y) after learning of such Theft, Manager does not promptly cause to be
terminated such employee from employment in connection with the operations of the Casino
or (z) there have been at least four prior unrelated incidents of Theft, each by a
different person (or group of people acting in concert) and involving $1,000 or more (in
each instance), to occur during the same calendar year.

(iii) the commission of gross negligence or willful misconduct by the Manager or any
Affiliate of Manager or their respective officers, directors or employees in connection
with the Manager’s performance of this Agreement (including any breach of this
Agreement) or which otherwise results in damages or losses to the Enterprise;

(iv) if Manager loses its Gaming License, commits an act that causes the Enterprise to
lose (through revocation, suspension or other similar means) or be threatened with the
loss of its
Gaming License or the termination of the Lottery Facility Management Contract, or is
determined to be an “unsuitable party” for purposes of either party’s Gaming License or
is subject to any other determination or direction by any governmental authority by
which the Enterprises continuation of Manager as the manager of the Casino under this
Agreement would put the Enterprise’s Gaming License or the Lottery Facility Management
Contract at risk of revocation, suspension, termination or similar material adverse
effect, or if Manager’s Gaming License is suspended;

(v) any representation or warranty made by the Manager pursuant to Section 9.9 proves to
be false or erroneous in any material respect when made;

(vi) Manager’s failure to fund any “Capital Contribution” up to its noticed “Capital
Commitment” in response to a “Call Notice”, as such terms are defined in the LLC
Agreement;

(vii) the Casino’s failure to achieve the Minimum Yield-on-Cost commencing upon the
second anniversary of the Opening Date, in which case Manager shall be entitled to
receive a termination fee as described below.

	 	a.	 	“Minimum Yield-on-Cost” shall mean a 15% Yield-on-Cost (the “First Hurdle”) and, commencing upon
the fourth anniversary of the Opening Date, shall also mean a 25% Yield-on-Cost (the “Second
Hurdle”). Where Manager does not satisfy the Second Hurdle in any given year but generates a
Yield-on-Cost of greater than 20%, Manager can only be terminated where it does not satisfy the
Second Hurdle the following year as well.
	 
	 	b.	 	Upon termination under this provision, if such termination was due to failure to achieve the
First Hurdle and occurs prior to the fourth anniversary of the opening of the Casino, Manager shall
be entitled to a termination fee equal to the management fees paid to Manager during the trailing
twelve month period (trailing the date of such termination), and if such termination was due to
failure to achieve the Second Hurdle, Manager shall be entitled to a termination fee equal to the
management fees paid to Manager during the trailing twelve month period multiplied by the
following:

29

 

	 	 	 
	Years Since Opening Date

	 	Multiple
	4

	 	3x
	5

	 	2x
	6

	 	1x
	Thereafter

	 	0x

(viii) Manager or any Affiliate of Manager develops, constructs, operates, manages, owns,
controls or has a financial interest of any kind (directly or indirectly) in a casino or other
gaming operation of any kind which is both within the States of Kansas or Oklahoma and within 150
miles of the Casino (Manager shall provide the Enterprise with written notice of any such
occurrence within ten (10) days of any such occurrence).Notwithstanding the foregoing, the following shall not be considered a Material
Breach hereunder: (i) any development, construction, operation, management,
consultation and financing activity of Manager involving the Tribe with respect to
the casino currently located in Perkins, Oklahoma and (ii) any development,
construction, operation, management, consultation and financing activity of Manager
involving the Tribe with respect to a casino to be located in Chandler, Oklahoma.

             (d) For purposes of this Agreement, a “Material Breach” by or with respect to the Enterprise
is any of the following circumstances:

(i) failure of the Enterprise to perform any obligation under this Agreement in any material
respect for reasons not excused under Section 9.5 hereof (Force Majeure) and failure to cure such
breach within thirty (30) calendar days after receipt of written notice from the Manager
identifying the nature of the breach in specific detail and its intention to terminate this
Agreement; provided, however, that if the nature of such breach (but specifically excluding
breaches curable by the payment of money) is such that it is not possible to cure such breach
within thirty (30) days, such thirty-day period shall be extended for so long as the Enterprise
shall be using diligent efforts to effect a cure thereof, but such period shall not be so extended
for more than an additional sixty (60) days (i.e., ninety (90) days in the aggregate); or

(ii) any representation or warranty made by the Enterprise pursuant to Section 9.10 proves to
be false or erroneous in any material respect when made.

              (e) Any final notice of termination hereunder shall be in writing detailing the reason the
Terminating Party considers the Material Breach not to be cured and must be delivered to the other
party before such termination becomes effective.

     7.2 Mutual Consent. This Agreement may be terminated at any time upon the mutual written
consent and approval of the Enterprise and the Manager.

     7.3 Involuntary Termination Due to Changes in Law.

          (a) Subject to the terms and provisions of this Agreement, the Enterprise and the Manager
agree to use commercially reasonable efforts to conduct gaming activities in accordance with this
Agreement and to ensure that such activities and this Agreement conform to and comply with all
Legal Regulations.

          (b) In the event of any change in state or federal law that results in a final determination
by a Designated Court that this Agreement is unlawful, the Enterprise and the Manager

30

 

shall each use good-faith commercially reasonable efforts to amend this Agreement in a mutually
satisfactory manner which will comply with the change in applicable laws and not materially change
the rights, duties and obligations of the parties hereunder. In the event such amendment can not be
legally effected following exhaustion of all such good-faith commercially reasonable efforts
(including the lapse of all legal proceedings and appeal periods without favorable results),
performance of this Agreement shall be automatically suspended effective upon the date that
performance of this Agreement becomes unlawful by such final determination, and either party shall
have the right to terminate this Agreement upon written notice to the other party.

     7.4 Other Rights upon Expiration or Termination; Ownership of Assets and Repayment of
Obligations on Termination.

(a) Following expiration or earlier termination of this Agreement for any reason:

(i) As between the Manager and the Enterprise, the Enterprise will retain full ownership
of the Casino, the Furnishings and Equipment, the Enterprise Intellectual Property, the
Enterprise Marks and its assets and all assets of the Casino (including the Gaming
Facility, all plans and specifications therefor, and any equipment, books and records,
materials or furnishings therein the acquisition of which constituted Costs of
Operations).

(ii) Whether such termination was voluntary or involuntary, the Enterprise shall have
the obligation to pay any unpaid Management Fees to the extent accruing and attributable
to any period prior to the expiration or earlier termination of this Agreement, which
obligation shall survive the expiration or earlier termination of this Agreement.

(iii) The Surviving Obligations shall survive expiration or earlier termination of this
Agreement.

(iv) In the event of the expiration of the term or the termination of this Agreement for
any reason, Manager shall cooperate with the Enterprise in the orderly transition of
management of the Casino, and shall provide the Enterprise or its designee prior to the
expiration or termination with any and all books, records, documents, contracts, and all
other information relating to the Casino, whether such information shall be in
electronic, hard copy or any other form. In addition, Manager Manager shall (i)
immediately cease any and all use of the Enterprise Marks and the Enterprise
Intellectual Property, and (ii), if and as directed by the Enterprise, destroy all
materials bearing the Enterprise Marks and/or incorporating Enterprise Intellectual
Property and/or deliver all materials bearing the Enterprise Marks and/or incorporating
Enterprise Intellectual Property to the Enterprise. In connection therewith, Manager
shall:

(A) promptly account for and deliver to the Enterprise all revenues, charges and
income from the Casino and any other monies of the Enterprise held by Manager and
cooperate with the Enterprise to close bank accounts related to the operation of the
Casino;

(B) deliver to the Enterprise, as and when received, any monies due the Enterprise
and received by Manager after the termination of this Agreement;

(C) deliver to the Enterprise, or to such other persons as the Enterprise may
designate in writing, all materials, records, ledgers, files, books, contracts,

31

 

documents and instruments relating to the Gaming Facility and in the possession
of Manager (including all Player Lists and information, accounting data and
records, rent rolls, payroll records, employment records, originals and copies
of all leases, service contracts and agreements, checkbooks and any other
financial records or instruments), together with any computer software used in
connection with the operation of the Casino and gaming equipment, excluding any
such computer software which is either proprietary or licensed to Manager
(provided, however, that Manager shall reasonably cooperate with the Enterprise,
at no out-of-pocket cost to Manager, in the Enterprise’s efforts to obtain the
right to use any such computer software which is licensed to Manager);

(D) assign to the Enterprise all existing contracts, purchase orders, service
contracts, permits, licenses and other similar instruments relating to the
operation and maintenance of the Casino in the event that such contracts,
purchase orders, service contracts, permits, licenses and instruments are in the
name of Manager (excluding any such contracts, purchase orders, service
contracts, permits, licenses and instruments which shall have been issued in Manager’s name and may not under
law be assignable to the Enterprise, provided, however, in such event Manager
shall reasonably cooperate, at no out-of-pocket cost to Manager, in the
Enterprise’s efforts to obtain replacement contracts, purchase orders, service
contracts, permits, licenses and instruments);

(E) deliver to the Enterprise (i) all keys and lock combinations for all lock
and security devices contained in the Casino, and (ii) a current inventory of
all operating equipment; and

(F) take any and all actions (including the execution of documents or
instruments) necessary or appropriate in the Enterprise’s reasonable judgment to
assist the Enterprise in the orderly termination of management of the Casino by
Manager and the orderly transition of such management to a new manager
designated by the Enterprise.

     7.5 Notice of Termination. In the event of a proposed termination pursuant to this Article,
the Enterprise shall provide notice of the termination to the Kansas Lottery or other appropriate
Governmental Authorities within ten (10) days after the termination if and to the extent the
Enterprise reasonably determines that such notice is required under applicable law or the terms of
the Lottery Facility Management Contract.

     7.6 Cessation of Gaming at the Gaming Facility.

          (a) If, during the term of this Agreement, the level or type of the gaming operations legally
permitted at the Gaming Facility as of the Effective Date cannot be lawfully conducted at the
Gaming Facility by reason of the application of any legislation or court or administrative agency
order or decree adopted or issued by a governmental entity having the authority to do so, such
gaming shall be discontinued as of the effective date of the legislation, order or decree; and the
Enterprise shall, within sixty (60) days after such legislation, order or decree becomes effective,
elect one of the following three options:

(i) Suspend the term of this Agreement until such date on which such gaming at the Gaming
Facility becomes lawful again (during which period the term of the Agreement will be tolled until
such gaming at the Gaming Facility becomes lawful again and can be

32

 

recommenced operationally or the Enterprise and the Manager mutually agree
otherwise, and the period of cessation shall not be deemed to have been part of the
term of this Agreement and the term shall be extended by the length of time of the
cessation); or

(ii) Suspend the term of this Agreement until such date on which such gaming at the Gaming
Facility becomes lawful again (during which period the term of the Agreement will be tolled until
such gaming at the Gaming Facility becomes lawful again and can be recommenced operationally at the
Gaming Facility or the Enterprise and the Manager mutually agree otherwise, and the period of
cessation shall not be deemed to have been part of the term of the Agreement and the term shall be
extended by the length of time of the cessation), and with the prior approval of the Manager (which
approval shall not be unreasonably withheld), use the Gaming Facility for any other lawful purpose
pursuant to a use agreement containing terms reasonably acceptable to the Manager and the
Enterprise; or

(iii) Terminate this Agreement, whereupon this Agreement shall terminate and of no further
force and effect except with respect to the duties, liabilities and obligations of the parties
which arose or accrued prior to termination.

The Enterprise shall give Manager written notice of the Enterprise’s election within such sixty-day
period. If the Enterprise elects, in the sole and absolute discretion, to suspend the term of this
Agreement under this Section 7.6 (a)(i) or (ii) above, the Enterprise shall have the right (but not
the obligation) to reinstate this Agreement within sixty (60) days after the date on which gaming
becomes lawful. The Enterprise may exercise such right by giving Manager written notice of such
reinstatement within said 60-day period after the date on which gaming becomes lawful.

          (b) If, during the term of this Agreement, the Gaming Facility or any portion thereof is
damaged by casualty or other occurrence or taken by eminent domain or similar proceedings to the
extent, as reasonably determined by the Enterprise, that the level or type of the gaming operations
conducted at the Gaming Facility as of the Effective Date cannot be conducted at the Gaming
Facility, the Enterprise shall elect one of the following two options:

(i) suspend the term of this Agreement pending repair, restoration or
reconstruction of the Gaming Facility (during which period the term of the
Agreement will be tolled until such gaming can again be conducted at the Gaming
Facility or the Enterprise and the Manager mutually agree otherwise, and the period
of cessation shall not be deemed to have been part of the term of the Agreement and
the term shall be extended by the length of time of the cessation), and arrange for
such repair, restoration or reconstruction; or

(ii) terminate this Agreement, such termination to be effective on the sixtieth
(60th) day after written notice of termination shall have been delivered
to Manager, whereupon this Agreement shall terminate and of no further force and
effect except with respect to the duties, liabilities and obligations of the
parties which arose or accrued prior to termination.

The Enterprise shall give Manager written notice of the Enterprise election under subsection within
sixty (60) days after such casualty or occurrence. The Enterprise alone has the authority to
submit, adjust and settle, on behalf of the Enterprise, all insurance claims associated with the
casualty or occurrence and conduct and settle or otherwise resolve any condemnation proceedings;
provided, however, that the Manager shall cooperate with the Enterprise’s efforts in such regard
and assist in the preparation of any submissions.

33

 

          (c) Subject to making any payment required under Section 3.19(b)(ii) hereof, the Enterprise
shall have the right to terminate this Agreement upon the sale or conveyance of the Casino (or the
Enterprise’s interest therein by lease or otherwise) or the Enterprise to any third party,
whereupon this Agreement shall terminate and be of no further force and effect except with respect
to the duties, liabilities and obligations of the parties which arose or accrued prior to
termination.

          (d) If the Lottery Facility Management Contract expires or terminates for any reason, this
Agreement shall terminate automatically and be of no further force and effect except with respect
to the duties, liabilities and obligations of the parties which arose or accrued prior to
termination, unless such termination of the Lottery Facility Management Contract arose out of or
resulted from a Material Breach by Manager or a Material Breach willfully made by the Enterprise in
bad faith primarily for the purpose of allowing the Enterprise to cause the termination of this
Agreement under this Section 7.6(d) in the absence of any other grounds for termination pursuant to
the terms of this Agreement (in which event Section 7.1(b) hereof shall apply).

          (e) If for any reason either the Enterprise, Manager or the Casino, as applicable, fails to
obtain or loses its Gaming License(s) or any other governmental or quasi-governmental permits,
licenses, approvals or certificates under any applicable Legal Requirements required to operate the
Casino, the Enterprise and Manager, each, shall have the right to terminate this Agreement
upon written notice to the other, whereupon this Agreement shall terminate and be of no
further force and effect except with respect to the duties, liabilities and obligations of the
parties which arose or accrued prior to termination, unless such failure or loss arose out of or
resulted from a Material Breach by the Manager or a Material Breach willfully made by the
Enterprise in bad faith primarily for the purpose of allowing the Enterprise to terminate this
Agreement under this Section 7.6(e) in the absence of any other grounds for termination pursuant to
the terms of this Agreement (in which event Section 7.1(b) hereof shall apply).

     7.7 Pre-Opening Termination Rights.

          (a) At any time prior to the Opening Date in the event the Enterprise elects, in the sole and
absolute discretion, not develop, complete construction of or otherwise open the Casino for gaming
operations for any reason (or no reason), the Enterprise shall have the right to terminate this
Agreement upon written notice to the Manager, whereupon this Agreement shall terminate and be of no
further force and effect except with respect to the duties, liabilities and obligations of the
parties which arose or accrued prior to termination; provided, however, that if the Enterprise
subsequently elects to develop, complete construction of or otherwise open the Casino, then, if the
Manager has an ownership interest in the Enterprise at that time, this Agreement shall be
reinstated by the Manager and the Enterprise (with no modification to the terms and conditions of
this Agreement).

          (b) If the Kansas Lottery, the Kansas Racing & Gaming Commission or the Lottery Facility
Review Board states in writing that any application of the Enterprise to operate the Casino will be
rejected or denied or suffer a similar adverse effect so long as Manager or any of its Affiliates
develops, constructs, operates, manages, consults, owns or finances any casino or gaming operation
for the Tribe in the State of Oklahoma, the Enterprise shall have the right to terminate this
Agreement upon written notice to the Manager, whereupon this Agreement shall terminate and be of no
further force and effect except with respect to the duties, liabilities and obligations of the
parties which arose or accrued prior to termination, unless within thirty (30) days following
written notice from the Enterprise of its intent to exercise its termination right under this
Section 7.7(b), Manager agrees, in writing, to divest itself of any interest in such operation (or
cease the applicable activity with regard thereto) to the satisfaction of such Governmental
Authority and, thereafter, so divests (or so cease, as the case may be) such interest within

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ninety (90) days after the expiration of said thirty (30) day period or such earlier deadline (if
any) as may be imposed by such Governmental Authority.

     7.8 Cumulative Remedies. All rights or remedies of the Enterprise or the Manager under this
Agreement shall be cumulative and may be exercised singularly in any order or concurrently, at such
party’s option, and the exercise or enforcement of any such right or remedy shall neither be a
condition to nor bar to the exercise or enforcement of any other right or remedy.

     7.9 PUNITIVE DAMAGES WAIVER. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT OR
UNDER APPLICABLE LAW, IN ANY ARBITRATION, LAW SUIT, LEGAL ACTION OR PROCEEDING BETWEEN THE PARTIES
ARISING FROM OR RELATING TO THIS AGREEMENT OR THE CASINO, THE PARTIES UNCONDITIONALLY AND
IRREVOCABLY WAIVE AND DISCLAIM, TO THE FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW ALL RIGHTS TO
ANY PUNITIVE, EXEMPLARY, OR TREBLE DAMAGES, AND ACKNOWLEDGE AND AGREE THAT THE RIGHTS AND REMEDIES
IN THIS AGREEMENT, AND ALL OTHER RIGHTS AND REMEDIES AT LAW AND IN EQUITY, WILL BE ADEQUATE IN ALL
CIRCUMSTANCES FOR ANY CLAIMS THE PARTIES MIGHT HAVE WITH RESPECT THERETO.

ARTICLE 8

 Release and Indemnity

     8.1 Third-Party Claims. Except as provided for herein, the Enterprise shall not be entitled to
recover from, and expressly releases, the Manager, its agents, directors, officers, employees and
Affiliates, and the Manager shall not be entitled to recover from, and expressly releases, the
Enterprise and its respective agents, directors, officers, employees and Affiliates, from or for
any third-party damages, claims, causes of action, losses and expenses of whatever kind or nature,
including attorneys’ fees and expenses incurred in defending such claims, in connection with the
lawful operation of the Casino in accordance with the terms of this Agreement; and such claims,
damages, losses or expenses shall be considered Costs of Operations, depending on the circumstances
and nature of the claim, payable from the Project Account(s) with the approval of the Enterprise.

     8.2 Indemnity from the Manager. Notwithstanding Section 8.1, the Manager shall upon request
indemnify and hold the Enterprise and its respective agents, directors, officers, employees and
Affiliates harmless against any and all damages, claims, losses or expenses of whatever kind or
nature, including reasonable attorneys’ fees and expenses incurred in defending such claims,
resulting from the gross negligence or willful or criminal misconduct of the Manager or any
Affiliate of Manager or their respective officers, directors or employees in connection with the
Manager’s performance of this Agreement (including any breach of this Agreement), and no such
damages, losses or expenses shall be paid from the Project Account(s), nor shall such losses or
expenses to the extent paid by Manager in full be considered Costs of Operations.

     8.3 Indemnity from the Enterprise. Notwithstanding Section 8.1, the Enterprise shall upon
request indemnify and hold the Manager, its agents, directors, officers, employees and Affiliates
harmless against any and all damages, claims, losses or expenses of whatever kind or nature,
including reasonable attorneys’ fees and expenses incurred in defending such claims, resulting from
the gross negligence or willful or criminal misconduct of the Enterprise or any Affiliate of the
Enterprise (other than Manager and its Affiliates) or their respective officers or directors in
connection with the Enterprise’s performance of this Agreement (including any breach of this
Agreement) and no such damages, losses or expenses shall be considered Costs of Operations unless
the inclusion of such damages, losses or expenses as Costs of Operations, is reasonably appropriate
under the circumstances and based on the nature of the claim.

35

 

	 
	     8.4 Indemnity Against Unauthorized Debt and Liabilities. Neither this Agreement nor its
performance (a) creates or implies a partnership between the Manager and the Enterprise, or (b)
authorizes the Enterprise to act as agent for the Manager, or, except to the extent expressly
provided herein, the Manager to act as agent for the Enterprise. The Manager hereby agrees to
indemnify and hold the Enterprise harmless from any third-party claims, actions and liabilities,
including reasonable attorneys’ fees, on account of obligations or debts of the Manager or the
Enterprise that the Manager is not authorized to undertake pursuant to the terms of this Agreement.

     ARTICLE 9

Miscellaneous

     9.1 Assignment and Subcontractors.

          (a) Manager shall not assign this Agreement or delegate its duties hereunder, in whole or in
part, without the express prior written consent of the Enterprise. For purposes of this Agreement,
any change in or any sale, conveyance, transfer or other disposition, whether voluntarily,
involuntarily or otherwise, of the direct or indirect ownership interests in Manager shall be
deemed to be an assignment hereunder; provided, however, the following shall not be deemed an
assignment hereunder: (i) any change in or any sale, conveyance, transfer or other disposition,
whether voluntarily, involuntarily or otherwise, of the ownership interests in Manager Parent or
(ii) the sale,conveyance, transfer or other disposition, whether voluntarily, involuntarily or otherwise, of all
or substantially all the assets of Manager Parent in a single transaction. Manager hereby
represents and warrants that the direct and indirect ownership of Manager as of the date hereof is
shown on Exhibit G, attached hereto and incorporated herein by reference, and is true and complete
in all respects. For purposes of clarification and not limitation, Manager represents, warrants and
covenants that Manager is, as of the Effective Date, wholly owned and controlled, directly or
indirectly, by the Manager Parent.

          (b) The Enterprise may assign its rights and obligations under this Agreement at any time,
without the consent of Manager; provided however, that the Enterprise shall use reasonable efforts
to notify Manager in writing of any such assignment at least thirty (30) days in advance thereof
and any transfer or assignment of this Agreement by the Enterprise shall include an express
assumption by the transferee or assignee of the Enterprise’s obligations hereunder arising from and
after the date of such assignment and provided further than such transferee or assignee is either
the purchaser, lessee or other transferee of all or substantially all of the Casino or an Affiliate
of the Enterprise (provided, however, nothing herein shall restrict the Enterprise from assigning
this Agreement to any Lender as security or otherwise as contemplated in any of the Control
Agreements). For purposes of this Agreement, any change in or any sale, conveyance, transfer or
other disposition of, whether voluntarily, involuntarily or otherwise, the direct or indirect
ownership interests in the Enterprise or a change in control of the Enterprise shall not be deemed
to be an assignment hereunder.

          (c) Any assigning party engaging in a permitted assignment described above shall, and shall
cause its assignee, to execute and deliver to the other party such assignment and assumption
agreements together with evidence of the due authorization, execution, delivery and enforceability
of such assignment documents as may be reasonably requested. Any attempted assignment or
subcontracting without any consent and approval, to the extent such consent and approval is
required hereunder, shall be void. Subject to the preceding requirements, this Agreement shall be
binding upon and shall inure to the benefit of the parties and their respective successors and
permitted assigns.

     9.2 Notices. Any notice, consent or any other communication permitted or required by this
Agreement shall be in writing and shall be effective on the date sent and shall be delivered by
personal

36

 

service, via telecopier with reasonable evidence of transmission, express delivery or by certified
or registered mail, postage prepaid, return receipt requested, and, until written notice of a new
address or addresses is given, shall be addressed as follows:

	 	 	 
	If to the Enterprise:

	 	Chisholm Creek Casino Resort, LLC
	 

	 	c/o Kansas Gaming Holdings LLC
	 

	 	c/o Och-Ziff Real Estate
	 

	 	9 West 57th Street, 39th Floor
	 

	 	New York, NY 10019
	 

	 	Attention: Steven E. Orbuch
	 

	 	Fax: 212-790-0005
	 
	 	 
	With a copy to:

	 	Ronald B. Emanuel
	 

	 	Bryan Cave LLP
	 

	 	1290 Avenue of the Americas
	 

	 	New York, NY 10104
	 

	 	Fax: 212-541-1434
	 
	 	 
	With a copy to:

	 	CVG Kansas Gaming LLC
	 

	 	c/o Clairvest Group Inc.
	 

	 	22 St. Clair Ave. E., 17th Floor
	 

	 	Toronto, ON
	 

	 	M4T 2S3
	 

	 	Attention: B. Jeffrey Parr
	 

	 	Fax: 416-925-5753
	 
	 	 
	With a copy to:

	 	William J. Bettman
	 

	 	Vedder Price P.C.
	 

	 	222 North LaSalle Street, Suite 2200
	 

	 	Chicago, Illinois 60601
	 

	 	Fax: 312-609-5005
	 
	 	 
	If to the Manager:

	 	Damon E. Schramm
	 

	 	Vice President – General Counsel
	 

	 	Lakes Kansas Casino Management, LLC
	 

	 	130 Cheshire Lane
	 

	 	Minnetonka, MN 55305
	 

	 	Facsimile: (952) 449-7068
	 
	 	 
	With a copy to:

	 	Daniel R. Tenenbaum, Esq.
	 

	 	Gray Plant Mooty
	 

	 	500 IDS Center
	 

	 	80 South Eighth Street
	 

	 	Minneapolis, MN 55402-3796
	 

	 	Facsimile: (612) 632-4050

     9.3 Amendments. This Agreement may be amended only by written instrument duly
executed by all of the parties hereto and with any and all necessary regulatory approvals
previously obtained.

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     9.4 Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
agreement. This Agreement may be executed and delivered by telecopier or other facsimile or
electronic mail transmission all with the same force and effect as if the same were a fully
executed and delivered original manual counterpart.

     9.5 Force Majeure. No party shall be in default in performance due hereunder if such failure
or performance is due to causes beyond its reasonable control, including acts of God, war,
terrorism, fires, floods, or accidents causing damage to or destruction of the Gaming Facility or
property necessary to operate the Casino, or any other causes, contingencies, or circumstances not
subject to its reasonable control which prevent or hinder performance of this Agreement; provided,
however, that the foregoing shall not excuse any obligations of the Enterprise or any other
Affiliate of the Enterprise to make monetary payments to the Manager or any Affiliate of the Manager as and when
required hereunder.

     9.6 Time is Material. The parties agree that time is of the essence and the time and schedule
requirements set forth in this Agreement are material terms of this Agreement.

     9.7 Further Assurances. The parties hereto agree to do all acts and deliver necessary
documents as shall from time to time be reasonably required to carry out the terms and provisions
of this Agreement.

     9.8 Severability. In the event that any provision of this Agreement is, by final order of a
Designated Court or Governmental Authority, held to be illegal or void, the validity of the
remaining portions of this Agreement shall be enforced as if this Agreement did not contain such
illegal or void clauses or provisions, and the parties shall use commercially reasonable efforts to
negotiate an amendment to this Agreement which will comply with the judicial order and maintain the
originally contemplated rights, duties and obligations of the parties hereunder.

     9.9 Representations and Warranties of the Manager. The Manager hereby represents and warrants
as follows:

          (a) This Agreement has been duly authorized, executed and delivered by the Manager and
constitutes a valid and binding obligation, enforceable against the Manager in accordance with its
terms.

          (b) The execution and delivery of this Agreement by Manager, the performance by the Manager of
its obligations hereunder and the consummation by the Manager of the transactions contemplated
hereby will not violate any contract or agreement to which the Manager or any Affiliate of Manager
is a party or any law, regulation, rule or ordinance or any order, judgment or decree of any
federal, state, or local court or require any regulatory approval beyond those contemplated herein.

          (c) The Manager has the full legal right, power and authority and has taken all action
necessary to enter into this Agreement, to perform its obligations hereunder, and to consummate all
other transactions contemplated by Agreement.

          (d) The Manager has been validly formed and is in good standing as a corporation,
partnership, limited liability company or other lawful entity, as the case may be.

     9.10 Representations and Warranties of the Enterprise. The Enterprise hereby represents and
warrants as follows:

          (a) This Agreement has been duly authorized, executed and delivered by the Enterprise
and constitutes a valid and binding obligation, enforceable against the Enterprise in accordance
with its terms.

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          (b) The execution and delivery of this Agreement by the Enterprise, the performance by the
Enterprise of its obligations hereunder and the consummation by the Enterprise of the transactions
contemplated hereby will not violate any contract or agreement to which the Enterprise or any
Affiliate of the Enterprise is a party or any law, regulation, rule or ordinance or any order,
judgment or decree of any federal, state, or local court or require any regulatory approval beyond
those contemplated herein.

          (c) The Enterprise has the full legal right, power and authority and has taken all action
necessary to enter into this Agreement, to perform its obligations hereunder, and to consummate all
other transactions contemplated by Agreement.

          (d) The Enterprise has been validly formed and is in good standing as a corporation,
partnership, limited liability company or other lawful entity, as the case may be.

     9.11 Applicable Law. This Agreement shall be interpreted and construed in accordance with the
laws of the State (without regard to its conflict of laws provisions) and applicable federal laws.

     9.12 Entire Agreement. This Agreement, including all exhibits, represents the entire agreement
between the parties and supersedes all prior agreements relating to management of gaming and
ancillary operations conducted by the Enterprise at the Gaming Facility.

     9.13 No Partnership or Joint Venture; Limited Agency. Nothing contained in this Agreement
shall constitute or be construed to be or to create a partnership or joint venture between the
Enterprise, its successors or assigns, and Manager, its successors or assigns. Manager shall act
as an independent contractor with the limited powers of agency expressly authorized by the
Enterprise in this Agreement (which agency shall not be coupled with an interest) and, in
exercising such powers of agency, Manager shall be an agent of the Enterprise solely for the
purpose of performing the applicable management functions for the Enterprise within the scope of
this Agreement. This Agreement does not create in Manager any interest in the Casino, including
any of the Furnishings and Equipment.

     9.14 Approvals. Whenever pursuant to this Agreement, the Enterprise exercises any right given
to it to approve or disapprove or to provide or withhold consent or any arrangement or term is to
be satisfactory or acceptable to the Enterprise, all such decisions, directions and determinations
made by the Enterprise shall be in the sole and absolute discretion of the Enterprise, except as
otherwise expressly provided for in this Agreement, and shall be final and conclusive.

     9.15 No Third-Party Beneficiaries. This Agreement shall not confer any rights or remedies on
any Person other than (i) the parties and their respective successors and permitted assigns, (ii)
any indemnitee to the extent such indemnitee is expressly granted certain rights of defense and
indemnification in this Agreement and (iii) Och-Ziff. Manager and the Enterprise acknowledge and
agree that Och-Ziff shall have the right to enforce the provisions concerning or impacting the fees
to which it is entitled under Section 6.3(c)(iii) hereof and Manager and the Enterprise shall not
modify or amend, or take any action or omit to take any action, which would have a material adverse
effect on such fees or Och-Ziff’s right to receive such fees.

     9.16 Non-disclosure. The parties agree not to divulge to third parties the terms of this
Agreement or any other proprietary or confidential information exchanged between the parties
pursuant to or in connection with this Agreement, unless (i) the information is required to be
disclosed pursuant to judicial order or Legal Requirements, (ii) the information is at the time of
disclosure already in the public

39

 

domain through no fault of such party, or (iii) unless mutually agreed. This prohibition shall not
apply to disclosures by either party to their attorneys, accountants, or other professional
advisers, or disclosure by the Manager or the Enterprise to their respective Affiliates (provided
that the Enterprise and the Manager shall cause their respective Affiliates to comply with the
terms of this Section). In situations where disclosure of the terms of this Agreement to
regulatory, governmental or judicial entities is required by law or regulations, the parties will
make reasonable efforts to secure confidential treatment of the economic terms of this Agreement by
such entities; provided, however, this disclosure restriction shall not prohibit the Manager making
any filings in compliance with federal or state securities laws as it deems legally necessary. The
parties agree to consult with each other and cooperate regarding any press releases regarding this
Agreement and the relationships described herein.

     9.17 Non-Recourse.

     (a) Manager shall look only to the Enterprise’s estate and interest in the Gaming Facility for
the satisfaction of Manager’s remedies or for the collection of a judgment (or other judicial
process) requiring the payment of money by the Enterprise in the event of any default by the
Enterprise hereunder, and no other property or assets of the Enterprise or its past, present or
future managers, members, partners, officers, directors, shareholders, principals or employees,
disclosed or nondisclosed, shall be subject to levy, execution or other enforcement procedure for
satisfaction of Manager’s remedies under or with respect to this Agreement or have any liability
for any obligation or liabilities of the Enterprise under this Agreement.

     (b) The Enterprise shall look only to Manager and its property and assets, including its
rights under this Agreement and its interest in the Enterprise, for the satisfaction of the
Enterprise’s remedies or for the collection of a judgment (or other judicial process) requiring the
payment of money by the Manager in the event of any default by the Manager hereunder, and no
property or assets of Manager Parent or its past, present or future officers, directors,
shareholders, principals or employees, disclosed or nondisclosed, shall be subject to levy,
execution or other enforcement procedure for satisfaction of the Enterprise’s remedies under or
with respect to this Agreement or have any liability for any obligation or liabilities of the
Manager under this Agreement.

     9.18 No Recording. This Agreement shall not be recorded in the public records of any
jurisdiction. This Agreement shall not create an interest in real property in favor of Manager and
nothing herein shall create an agency coupled with an interest; Manager expressly waives any such
interests.

     9.19 Non-Compete. Manager acknowledges that the Enterprise, among other things, is trying to
and will develop and preserve goodwill and loyalty with the customers, players and employees of the
Casino, which goodwill and loyalty will be associated with, among other things, the Casino. Manager
agrees that at all times neither Manager nor any Affiliate of Manager, nor any Person acting on
behalf of, at the request of, or for the benefit of, Manager or any Affiliate of Manager, shall:

          (a) develop, construct, operate, manage, own, control or have a financial interest of any kind
(directly or indirectly) in a casino or other gaming operation of any kind which is both within the
States of Kansas or Oklahoma and within 150 miles of the Casino (Manager shall provide the
Enterprise with written notice of any such occurrence within ten (10) days of any such occurrence).
Notwithstanding the foregoing, Manager and its Affiliates shall be permitted to engage in: (i) any
development, construction, operation, management, consultation and financing activity of Manager
involving the Tribe with respect to the casino currently located in Perkins, Oklahoma and (ii) any
development, construction, operation, management, consultation and financing activity of Manager
involving the Tribe with respect to a casino to be located in Chandler, Oklahoma.

40

 

          (b) retain, use in any way or disclose any information contained on any Player List, except in
connection with the fulfillment of Manager’s duties and obligations with regard to the Casino in
accordance with the terms of this Agreement;

          (c) hire, employ, or otherwise retain the services of, for compensation or otherwise, any
individual holding, from time to time, any of the Core Positions; or

          (d) solicit, for employment or otherwise, any individual employed by the Enterprise or at the
Casino.

The terms of this Section 9.19 shall survive the expiration or early termination of this Agreement;
provided, however, (i) the survival of Sections 9.19(a) and (c) shall be limited to two (2) years
(provided, further, that any claims for breach written notice of which is given to Manager prior to
the expiration of said two (2) year period shall survive the termination of this Agreement
indefinitely) and (ii) the survival of Sections 9.19(d) shall be limited to one (1) year (provided,
further, that any claims for breach written notice of which is given to Manager prior to the
expiration of said one (1) year period shall survive the termination of this Agreement
indefinitely). Manager recognizes the territorial and durational scope of this covenant, but
acknowledges and agrees that it is reasonable and enforceable in view of, among other things, the
narrow range of the activities prohibited. Manager recognizes and agrees that the restraints
contained in this Section 9.19, both separately and in total, are reasonable and enforceable in
view of the Enterprise’s legitimate interests in protecting the Enterprise’s business and business
relationships, including, without limitation, the Enterprise’s customers’ and employees’ goodwill
and loyalty. In the event of a breach or threatened breach of this Section 9.19, the Enterprise
shall be entitled, in addition to any other legal or equitable remedies it may have in connection
therewith (including any right to damages that it may suffer), to temporary,
preliminary and permanent injunctive relief restraining such breach or threatened breach. Manager
hereby expressly acknowledges that the harm which might result to the Enterprise’s business as a
result of any noncompliance by Manager with any of the provisions of this Section 9.19 would be
largely irreparable.

     9.20 Alterations. The Enterprise may, from time to time, make such changes, additions,
alterations, improvements and modifications to the Gaming Facility, including within the gaming
floor as to the location, configuration and mix of gaming machines and stations, as the Enterprises
determines to be desirable. Manager agrees to cooperate with the Enterprise, without fee, in
connection with any such changes, additions, alterations, improvements and modifications.

ARTICLE 10

Dispute Resolution

     10.1 Disputes Between the Enterprise and Project Employees. The Manager shall develop an
employee dispute resolution policy for the Enterprise’s approval, and the Manager, as agent of the
Enterprise, shall ensure that the Casino’s general manager shall implement and administer the
employee dispute resolution policy after its adoption, subject to Approved Budget.

     10.2 Disputes Between the Enterprise and the Manager. All disputes between the Manager and
the Enterprise with respect to this Agreement or a party’s performance hereunder shall be resolved
by the following dispute resolution process:

          (a) The parties shall use commercially reasonable efforts to settle the dispute. To this
effect, they shall consult and negotiate with each other in good faith and, recognizing their
mutual interests, attempt to reach a mutually satisfactory just and equitable solution.

41

 

          (b) If the parties do not reach such a solution within ten (10) days after the initiation of
such consultation and negotiation, then any party to such dispute may, by written notice to the
others, require such dispute to be settled by arbitration administered by the American Arbitration
Association in accordance with the provisions of its Commercial Arbitration Rules in effect at the
time of submission. Notwithstanding any such provision to the contrary, (i) the question whether
such dispute is arbitrable shall be a matter for binding arbitration by the arbitrators, such
question shall not be determined by any court and, in determining any such question, all doubts
shall be resolved in favor of arbitrability, and (ii) all arbitrators shall be selected in
accordance with Section 10.2(c) below. Unless the parties otherwise agree to in writing,
arbitration proceedings shall be held in Kansas City, Kansas.

          (c) The arbitration proceedings shall be conducted before a panel of three neutral
arbitrators, all of whom shall be currently licensed attorneys, actively engaged in the practice of
law for at least ten (10) years, one of which shall have at least five (5) years of experience in
the gaming industry. Each party shall designate in a written notice given to the other party,
within ten (10) days after service of the notice of arbitration, an arbitrator satisfying the above
conditions. The arbitrator selected by the claimant and the arbitrator selected by respondent
shall, within ten (10) days of their appointment, select a third neutral arbitrator. In the event
that they are unable to do so, the parties or their attorneys may request the American Arbitration
Association to appoint the third neutral arbitrator. Prior to the commencement of hearings, each of
the arbitrators appointed shall provide an oath or undertaking of impartiality.

          (d) Any arbitration award shall be in writing signed by each of the arbitrators, state the
basis for the award, and set forth in reasonable detail its findings of fact and law and the basis
for the determination of the award form and amount.

          (e) Except to the extent such enforcement will be inconsistent with a specific provision of
this Agreement, arbitration awards made pursuant to this Article 10 shall be enforceable
in state or federal court under any applicable federal or state law governing the enforcement
of arbitration awards.

          (f) Any party to an arbitration shall have the right to seek and obtain a court order from a
Designated Court requiring that the circumstances specified in the order be maintained pending
completion of the arbitration proceedings, to the extent permitted by applicable law.

          (g) Judgment on any arbitration award may be entered in any Designated Court. Notwithstanding
anything in Article 10 to the contrary, the arbitration requirement in this Agreement does not
limit, restrict or prohibit, and the Manager may commence a civil action in any Designated Court
against the Enterprise, to collect sums of money due to the Manager which sums of money the
Enterprise does not dispute that it owes to the Manager hereunder. Notwithstanding anything in
Article 10 to the contrary, the arbitration requirement in this Agreement does not limit, restrict
or prohibit, and the Enterprise may commence a civil action in any Designated Court against
Manager, to collect sums of money due to the Enterprise which sums of money the Manager does not
dispute that it owes to the Enterprise hereunder. The arbitrators are instructed that they are not
to decide this matter as ex aequo et bono; the decision is to be based on the terms of this
Agreement and applicable law. In addition, the arbitrators shall not have the authority to issue an
award that provides interim or final relief to the extent that such relief would not have been
available if the dispute had been submitted for judicial resolution in a Designated Court under
Kansas law. Notwithstanding the foregoing or any provision of the commercial arbitration rules to
the contrary, the arbitrators shall not have the power to award punitive, exemplary or
consequential damages, or any damages excluded by or in excess of any damage limitations expressed
in this Agreement.

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          (h) Each party shall bear its own costs in connection with any arbitration pursuant to the
Commercial Arbitration Rules in connection with any arbitration and the parties shall share equally
the fees and costs of all the arbitrators; provided that the arbitrators shall have the right to
award; provided, however, the prevailing party in any arbitration, litigation or other legal
proceeding arising out of or relating to this Agreement shall be entitled to recover from the
losing party all reasonable fees, costs and expenses for attorneys, experts and other third parties
(including its share of the AAA fees and costs) incurred by the prevailing party in connection with
such arbitration, litigation or other legal proceeding (including any appeals and actions to
enforce any arbitration awards and court judgments). If a party prevails on some, but not all, of
its claims, such party shall be entitled to recover an equitable amount of such fees, costs and
expenses, as determined by the applicable arbitrator(s) or court.

ARTICLE 11

Financing; Estoppel Certificates

     11.1 Subordination. This Agreement and Manager’s rights and benefits under this Agreement are
and shall be subject and subordinate to all mortgages, deeds of trust and other security
instruments which may now or hereafter affect the Enterprise or the Enterprise’s interest in the
Casino (collectively, “Superior Mortgages”), to each and every advance made or hereafter to be made
under such Superior Mortgages, and to all renewals, modifications, replacements, extensions,
spreaders and consolidations thereof. The Enterprise agrees to request a non-disturbance agreement
in favor of Manager from the holders of the Superior Mortgages; provided, however, the Enterprise
shall not be under any obligation to obtain such an agreement. This Section shall be self-operative
and no further instrument of subordination shall be required. However, upon the Enterprise’s
request, Manager shall execute any documentation concerning such subordination as may be reasonably
requested by any owner or holder of any such Superior Mortgage; provided, however, that Manager shall not be
obligated to waive or forbear from receiving, on a current basis and as and when due under this
Agreement, any and all fees due to it under this Agreement.

     11.2 Financing. Manager agrees that it shall make such modifications to this Agreement as may
be requested by the Enterprise in connection with the Enterprise obtaining financing for the
Casino, as long as such amendments to do not materially adversely affect Manager’s rights or impose
material new obligations on Manager, and shall cooperate (without fee) with the Enterprise in its
efforts to obtain such financing.

     11.3 Estoppel Certificates. Manager and the Enterprise agree, at any time and from time to
time, upon not less than fifteen (15) days prior written notice by the other or any holder of any
Superior Mortgage or prospective lender, purchaser or other party designated by the Enterprise, to
execute, acknowledge and deliver to each other or such other person or entity a statement in
writing certifying that this Agreement has not been modified and is in full force and effect (or,
if there have been modifications, that the same is in full force and effect as modified and
specifying the modification), stating whether or not to the actual knowledge of the party providing
such certificate there exists any default hereunder and certifying such other matters as reasonably
requested by the requesting party.

43

 

     IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the above written date.

	 	 	 	 	 
	 	Lakes Kansas Casino Management, LLC

 	 
	 	By:  	
    	 
	 	 	Timothy J. Cope 	 
	 	Its:  	 President and Chief Financial Officer 	 
	 

[Signature Page of Lakes Kansas Casino Management, LLC to the Development Services and Management Agreement]

 

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the above
written date.

	 	 	 	 	 
	 	Chisholm Creek Casino Resort, LLC

 	 
	 	By:  	Kansas Gaming Partners LLC, its sole member
 	 
	 	 	 
	 	By:  	                                                             
 	 
	 	 	Steven E. Orbuch, Authorized Person 	 

[Signature Page of Chisholm Creek Casino Resort, LLC to the Development Services and Management Agreement]

 

 

LIST OF EXHIBITS

	 	 	 
	Exhibit A

	 	Legal Description
	Exhibit B

	 	Development Services
	Exhibit C

	 	Prohibited Activities
	Exhibit D

	 	Manager Responsibilities and Duties
	Exhibit E

	 	Pre-Opening Services
	Exhibit F

	 	Additional Core Positions
	Exhibit G

	 	Direct and Indirect Ownership of Manager

 

 

EXHIBIT
A

 LEGAL DESCRIPTION 

A portion of the property described below, as determined by the Enterprise, which will generally be
located within the northern portion of such property:

THE SOUTHWEST QUARTER (SW/4) OF SECTION 4, TOWNSHIP 30 SOUTH,

RANGE 1 EAST OF THE 6TH P.M., SUMNER COUNTY, KANSAS,

EXCEPT TRACTS CONDEMNED AND DEEDED FOR

TURNPIKE AND EXCEPT TRACT DEEDED FOR HIGHWAY PURPOSES.

Upon request of the Enterprise, the parties shall amend this Agreement to substitute the foregoing
description with a more particular description of the land comprising the land on which the Casino
is located.

 

 

EXHIBIT B

DEVELOPMENT SERVICES

SECTION 1:

CONSTRUCTION MANAGER - ADVISOR

1.1 GENERAL STATEMENT OF SERVICES

     1.1.1 This Exhibit is intended to, and shall, govern all work and services provided by Manager
for the Development Project (defined below), whether initiated or performed prior or subsequent to
the execution of the Agreement. While this Exhibit is intended to set forth certain general
guidelines for such work and services, the parties acknowledge that Manager is an experienced
developer of casino properties similar to the Casino and the parties’ ultimate intent is for
Manager to perform its development services duties consistent with Manager’s best past practices.
To facilitate the efficient completion of the Development Project, the Enterprise shall designate a
representative or representatives authorized to act on the Enterprise’s behalf with respect to the
Development Project (collectively, the “Enterprise’s Representative”) and the procedures required
for Manager to communicate and obtain any approvals and the like from the Enterprise’s
Representatives, including a procedure whereby Manager may obtain approvals of the Enterprise
hereunder by e-mail (approval by e-mail from the Enterprise, pursuant to such procedure, shall
qualify as the written approval of the Enterprise under this Exhibit to the extent the terms of
this Exhibit require a written approval).

     1.2.1 As provided in greater detail throughout this Exhibit, Manager has been retained by the
Enterprise to advise and assist the Enterprise in connection with the development, design,
construction and commissioning of the Gaming Facility for use as a Casino and the selection,
acquisition and installation of Furnishings and Equipment (the “Development Project”), including
the following: (1) assist and advise the Enterprise in the development of the Program, the Project
Budget and the Project Schedule (each as defined herein), as well as the delineation of the scope
and nature of work on the Development Project; (2) assist and advise the Enterprise in assessing
and monitoring the pre-construction costs and schedule for the purpose of facilitating the
performance and completion of the Development Project within the time and budgetary limitations
established as provided herein; (3) advise the Enterprise with respect to value-engineering
matters; (4) assist and advise the Enterprise in the selection and acquisition of Furnishings and
Equipment; (5) coordinate bidding procedures, vendor cost estimates and the award of the
contract(s) for all construction-related work, development work, and any other work, as well as for
all purchases of materials, supplies, Furnishings and Equipment and any other item or service, in
any and all cases as needed in connection with the Development Project on behalf of the Enterprise
(the “Construction Contract(s)”, and together with the final schematic design documents, the design
development documents and the construction documents, and all other design documents to be prepared
for the Development Project (the “Design Documents”), the “Contract Documents”); (6) assess and monitor costs
incurred on the Development Project for compliance with the Project Budget; (7) assess and monitor
the construction on the Development Project for compliance with the Design Documents, the Project
Schedule and the Construction Contract(s); (8) administer the construction of the Development
Project in accordance with the terms hereof and the Construction Contract(s); (9) coordinate and
manage the services of the Enterprise’s Contractors; (10) report to the Enterprise; and (11)
perform such additional services as are described herein.

     1.3.1 Manager shall not be responsible for the acts and/or omissions of the Enterprise’s
Contractors and/or other persons performing work on the Development Project that are not employed
by or on behalf of Manager. Manager shall have no responsibility pursuant to this Exhibit for
design errors, omissions or inconsistencies committed by Architect or any engineer employed by the
Enterprise to design the Development Project. Nothing contained in herein, however, shall diminish
Manager’s responsibility for any damages incurred by the Enterprise as a consequence of Manager’s
own failure to perform in accordance with this Exhibit.

1.2 PERFORMANCE STANDARDS AND RELATIONSHIP

     1.2.1 Pursuant to this Exhibit, Manager agrees to provide those technical services described
herein as well as those services required for the proper completion of, or reasonably contemplated
by, this Exhibit. Manager accepts the relationship of trust and confidence established between it
and the Enterprise by this Exhibit. Manager covenants with the Enterprise to furnish its best skill
and judgment (consistent with the standards of skill, care and

B-1

 

diligence established by this Exhibit), and to cooperate and coordinate with the services of an
architect recommended by Manager and approved in writing by the Enterprise (“Architect”), and
design professionals, engineers, contractors, vendors and any consultants retained by the
Enterprise in connection with the Development Project (collectively referred to as the
“Enterprise’s Contractors”), and all other persons and entities involved with the Development
Project, in order to further the interests of the Enterprise and accomplish the timely and proper
construction of the Development Project. Manager agrees to assist the Enterprise in the
administration and completion of the Development Project in an expeditious and economical manner in
accordance with the requirements of the Enterprise and as set forth in this Exhibit.

     1.2.2 In connection with all services performed by or under the supervision of Manager
pursuant to this Exhibit, Manager shall, consistent with the standards of professional skill, care
and diligence established by this Exhibit, maintain close communication and shall coordinate its
activities with the Enterprise’s Contractors and any other persons or entities performing work on
or involved with the Development Project and all governmental agencies having jurisdiction over the
Development Project, as necessary to facilitate the timely and proper performance and completion of
the Development Project. Manager’s services shall be performed in a manner, sequence and timing so
as to be coordinated with the work of the Enterprise’s Contractors and any other persons or
entities providing work or services in connection with the Development Project.

     1.2.3 Manager represents that it and its Affiliates possess experience and knowledge in
projects similar to this Development Project. Accordingly, Manager agrees that the services
provided by Manager pursuant to this Exhibit shall be performed in a manner consistent with those
standards of skill, care and diligence applicable to project/construction managers possessing
comparable experience, expertise and knowledge in similar circumstances. Manager shall be
responsible for the quality, technical accuracy and the coordination of all services provided by
Manager (or any consultants or subcontractors hired by Manager) in connection with this Exhibit.

     1.2.4 Manager has no authority to modify the terms of any contract for design or construction
or any other agreement between the Enterprise and Architect or any person or entity providing work
or services for the Development Project. Manager shall not have authority to make decisions with
respect to the Development Project without the Enterprise’s prior written approval if such
decisions involve a change
to the then-current Design Documents, Project Budget or Project Schedule or involve any change in
compensation to any of the Enterprise’s Contractors or other persons or entities providing
services, labor or materials on the Development Project. Such limitations of authority of Manager
shall not be modified or extended without the written consent of the Enterprise.

     1.2.5 Manager shall not hire or utilize any third-party consultants or subcontractors
(including the “project consultant” referenced in this Exhibit) to perform any of the services
required of Manager under this Exhibit, unless (and only to the extent that) the Enterprise first
approves in writing the retention or use of such person or entity; moreover, the Enterprise
reserves the right to employ the project consultant directly and to approve all terms and
conditions of the project consultant’s engagement. The approved costs of the project consultant
shall be set forth in the Project Budget. In all such events, Manager shall be responsible for the
acts and omissions of, as well as the quality and timeliness of the services provided by, such
third-party consultant or subcontractor (including the “project consultant” referenced in this
Exhibit, regardless of whether said project consultant is retained by Manager or by the
Enterprise).

1.3 SPECIFIC SERVICES

     1.3.1 Pursuant to this Exhibit, Manager agrees to provide the Enterprise with those technical,
professional and other services described herein and otherwise customary to its role as
contemplated herein and with such information, suggestions, evaluations and assessments as are
requested by the Enterprise in connection with the Development Project.

     1.3.2 Manager shall meet and consult with the Enterprise, the Enterprise’s Contractors and
such other persons and entities involved with the Development Project as the Enterprise reasonably
may direct, to discuss and evaluate the Development Project and matters relating thereto. Manager
shall keep minutes of any substantive meetings, if Manager is asked prior to the commencement of
such meeting to do so, and furnish them to the Enterprise after completion of the meeting to which
they pertain promptly upon the Enterprise’s demand.

B-2

 

     1.3.3 Promptly following execution of the Agreement, Manager shall prepare or procure and
submit a proposed preliminary Project budget and Project schedule for the Enterprise’s review, and as
the design and cost-estimating work proceeds, Manager shall refine and revise, from time to time
(and, in any event, promptly upon the Enterprise’s request), preliminary Project budget and Project
schedule for the Enterprise’s review. In addition, promptly following execution of the Agreement,
Manager shall meet with the Enterprise, at such times and places as reasonably acceptable to the
Enterprise, to discuss the Enterprise’s goals and desires for the design and construction of the
Development Project, to assist the Enterprise in the further developing and delineating the scope,
size and character of the Development Project, and to identify additional design and construction
requirements for the Development Project. The results of such meetings shall be set forth by
Manager in a detailed, programmatic description of Development Project requirements, which shall be
submitted to the Enterprise for its review and written approval. Once such description is approved
in writing by the Enterprise (the “Program”), Manager’s services shall be consistent with the
requirements of the Program, except and only as it may be modified by the Enterprise. The inclusion
of or failure to include any particular item in the Program shall not relieve Manager of its
obligation to perform its services, consistent with applicable standards of professional skill,
care and diligence established herein, in an manner that produces a fully connected, complete,
operational and functional Development Project.

     1.3.4 Based upon the Program, Manager shall assist the Enterprise in the preparation of a
proposed financial plan for the Development Project, with Manager to prepare the initial draft of
such plan for the Enterprise’s review. Such plan shall provide information reasonably necessary to
complete an overall, detailed budget for the Development Project and a preliminary schedule for the
completion of the Development Project. Manager shall revise or procure revisions to the then
current preliminary Project budget and Project schedule accordingly and submit a proposed final
Project budget and Project schedule for the Enterprise’s written approval not later than thirty
(30) days after Architect’s completion of Schematic Design Documents for each of the Design
Packages described in Section 1.3.5 herein. The Project budget and schedule (and all preliminary
versions of the same) shall contain such detail as the Enterprise may request and, without limiting
the generality of the foregoing, shall show estimated costs for
design, construction, tests, inspections, approvals and permits, as well as the estimated costs of
Furnishings and Equipment and schedule for all major phases of the development and construction,
including the delivery and installation of the Furnishings and Equipment. As used herein, the
final Project budget and Project schedule as approved in writing by the Enterprise hereunder shall be
referred to as the “Project Budget” and the “Project Schedule”.

     1.3.5 Upon Enterprise’s request, Manager shall coordinate the preparation by Architect of all
plans, specifications and drawings for the Development Project and the delivery of the “Design
Packages” (include the Site Development Package, Primary Building Package, and Interior Design
Package and such other design packages as determined by the Enterprise) required to be delivered by
Architect pursuant to the agreement between the Enterprise and Architect. Manager shall
expeditiously review Architect’s (and its consultants’ and engineers’) Design Documents during
their development and Manager shall provide advice to Architect concerning development of the
design for the Development Project, including the outline specifications for the Development
Project, and shall render Manager’s independent advice and judgment pertaining to the Development
Project. Manager shall recommend alternative solutions whenever design details adversely affect
construction feasibility, the Project Budget or the Project Schedule. Any design errors or
omissions noted by Manager during its review shall be reported promptly to the Enterprise. Any
non-conformity made known to Manager or discovered upon review of the Design Documents shall be
reported promptly to the Enterprise.

     1.3.6 As Architect progresses with the preparation of the Design Documents, Manager shall
provide an update, at appropriate intervals agreed to by the Enterprise, Manager and Architect,
estimates of construction cost of increasing detail and refinement. The estimated cost of each
construction contract shall be indicated with supporting detail. Such estimates shall be provided
for the Enterprise’s written approval. Manager shall advise the Enterprise and Architect if it
appears that the construction cost may exceed the latest approved Project Budget and make
recommendations for corrective action.

     1.3.7 During its communications and meetings with the Enterprise and Architect, Manager shall
discuss when appropriate procedures, progress, problems (including, without limitation,
interpretations of the drawings and specifications) and scheduling, and as necessary, and shall
render periodic oral and written status reports on the progress of the Development Project and any
other status reports or information or documentation concerning the

B-3

 

development or construction work as Kansas Lottery may require or as the Enterprise may request or
any Lender may require (provided, however, notwithstanding anything to the contract in the
Agreement, including this Exhibit, any communications with Kansas Lottery or Lenders about such
matters shall be subject to the prior written approval of and coordination with the Enterprise).
Manager shall send to the Enterprise, promptly after receipt, copies of all notices and other
written communications received or sent by Manager to or from third parties related to the
Development Project which the Enterprise has requested and involve matters that affect the quality,
scope, character, schedule or cost of the Development Project. The Enterprise shall be timely
advised of and may participate in any discussions or negotiations that may be conducted with
Architect.

     1.3.8 Manager shall independently evaluate the Design Documents and subsequent revisions
thereto, and shall advise the Enterprise with respect to relative construction feasibility,
availability of materials and labor, the sufficiency of the Project Budget and the adequacy of the
Project Schedule. Evaluations made by Manager with respect to the Project Budget shall be based on
Manager’s experience, judgment and knowledge. Manager shall recommend alternative solutions if it
determines that design details adversely affect construction feasibility, the Project Budget or the
Project Schedule.

     1.3.9 Manager shall review the construction bid packages and Design Documents for the
Development Project and shall notify the Enterprise and Architect if the responsibilities of the
Enterprise’s Contractors are not properly identified or assigned, or if Manager actually discovers
any errors, omissions, inconsistencies or areas of conflict and/or overlap in the work described in
such documents. Manager shall assist Architect with regard to questions from bidders and with the
issuance of addenda.

     1.3.10 Manager represents that it is or will become familiar with and knowledgeable about the
terms and provisions of the Control Agreements (including the Lottery Facility Management Contract)
and Gaming Laws (but Manager makes no representation about any other Legal Requirements) and that
Manager shall perform all services hereunder in compliance with such Gaming Laws and the Control
Agreements, as applicable. Manager shall advise and direct the Enterprise, Architect and the
Enterprise’s Contractor(s) regarding measures required to cause the Development Project to be
designed and constructed in compliance with applicable requirements of the Control Agreements and
all applicable Gaming Laws (excluding, however, in either case, any Legal Requirements other than
Gaming Laws unless such other Legal Requirements are known to Manager).

     1.3.11 Manager shall: (1) discuss strategy for Development Project team composition with the
Enterprise and assist in selection of agreement and contract forms to be used in engagement by the
Enterprise of the Enterprise’s Contractors; (2) research existing designers, contractors and
vendors and perform pre-qualifications and insurance inquires for review and selection by the
Enterprise; (3) if requested, identify for the Enterprise’s written approval specialized team
members in required disciplines; (4) issue requests for proposals, acceptable to the Enterprise, to
additional design professionals, contractors, furniture vendors, and utility vendors, all as
required by the Enterprise or Development Project needs; (5) conduct pre-bid conferences to
familiarize bidders with the bidding documents and the Development Project and coordinate bidding
procedures; and (6) assist the Enterprise in the evaluation of bids, the negotiation of the best
possible terms for contracts on the Enterprise’s behalf, if and when authorized by the Enterprise,
and the award of Construction Contract(s). Manager shall not bid on or perform any of the actual
construction on the Development Project, nor shall any Affiliate of Manager be allowed by Manager
to bid on or perform work on the Development Project.

     1.3.12 Manager shall assist the Enterprise in obtaining proper insurance coverage for the
Development Project. Manager shall receive certificates of insurance from the Enterprise’s
Contractors and forward them to the Enterprise. Manager shall advise the Enterprise if the
certificates of insurance provided by any of the Enterprise’s Contractors fail to meet the
requirements of the Construction Contract(s) or the Control Agreements. In addition, Manager shall
take reasonable measures to ensure that all required certificates of insurance are maintained by
each Contractor through to the substantial completion of the work furnished by each of the
Enterprise’s Contractors. Manager shall receive and review for compliance all performance and
payment bonds, if any, required from each of the Enterprise’s Contractors and shall forward them to
the Enterprise.

     1.3.13 Manager shall direct and assist the Enterprise in obtaining all necessary approvals and
permits required to be obtained for the construction and operation of the Development Project,
including all permits and approvals required in connection with the relocation of utilities and
assuring the availability of utilities to the

B-4

 

Development Project and all special permits for permanent improvements. In this regard, Manager
shall coordinate: (1) liaising and negotiating efforts with governmental authorities having
jurisdiction over the Development Project to obtain necessary governmental approvals from and
agreements with governmental authorities and, with the Enterprise’s written approval, shall attend
all meetings with governmental authorities, regulators and other governmental entities; (2) the
coordination, administration and expediting of all planning requirements, and the identification
and coordination of all needs and requirements of all governmental authorities; (3) the
identification of all governmental approvals and applicable fees payable that are necessary to
permit the completion of the Development Project and the proper functioning of the Development
Project for its intended purposes; and (4) assisting the Enterprise and Architect in connection
with the Enterprise’s responsibility for filing documents required for the approvals of any
governmental authorities having jurisdiction over the Development Project.

     1.3.14 Manager shall provide administration of the Construction Contract(s) as set forth
herein and in the Construction Contract(s). Manager shall provide administrative, management and
related services to coordinate scheduled activities and responsibilities of the Enterprise’s
Contractors with each other and with those of Manager, the Enterprise and Architect to manage the
Development Project in accordance with the Project Budget, the Project Schedule and the
Construction Contract(s).

     1.3.15 A project consultant, under Manager’s supervision, shall daily monitor the construction
work on the Development Project and shall diligently endeavor to guard the Enterprise against
defects in the work and violations of the Construction Contract(s) by the Enterprise’s Contractors.
Manager shall recommend to the Enterprise any additional inspection or testing of the work
reasonably required to determine whether it is in accordance with the provisions of the
Construction Contract(s), whether or not such work is fabricated, installed or completed. Manager
shall take all reasonable actions to require that the Enterprise’s Contractors perform and complete
the construction work on the Development Project in a good and workmanlike manner and in accordance
with: (1) the terms of the Construction Contract(s); (2) the Project Budget; (3) the Project
Schedule; and (4) all applicable terms of the Control Agreements. Manager shall promptly notify the
Enterprise in writing of work which is defective or which does not conform to such requirements,
and shall recommend appropriate courses of action to the Enterprise.

     1.3.16 Manager shall schedule and attend pre-construction, construction and progress meetings
with the Enterprise and the Enterprise’s Contractors, as necessary and at such times and places as
shall be appropriate to discuss procedures, progress, problems (including, without limitation,
interpretations of the drawings and specifications) and scheduling, and as necessary to render
periodic oral and written status reports on the progress of the work for the Development Project.
Manager shall send to the Enterprise, promptly after receipt, copies of all notices and other
written communications received or sent by Manager to or from third parties related to the
Development Project which: (1) the Enterprise has requested and involve matters that affect the
quality, scope, character, schedule or cost of the Development Project or involve communications
required to be submitted to Manager pursuant to the Contract Documents, including those relating to
product data, materials, samples, or schedules. The Enterprise shall be timely advised of and may
participate in any discussions or negotiations that may be conducted with any of the Enterprise’s
Contractors. Manager shall transmit to Architect (with a copy to the Enterprise) requests for
interpretations of the meaning and intent of the Design Documents, and assist in the resolution of
questions that may arise.

     1.3.17 Manager shall receive submittals from the Enterprise’s Contractors and shall review and
assist the Enterprise in evaluating submittals. Manager shall coordinate such items with
information contained in related Construction Contract(s) and transmit recommendations to Architect
for approval or disapproval, as appropriate. In collaboration with Architect, Manager shall
establish and implement procedures for expediting the processing and approval of shop drawings,
product data, samples and other submittals. Manager shall also assist Architect and the
Enterprise’s Contractors in developing a detailed request for information log that lists all
requests for clarification or interpretation of the Contract Documents, and monitor the responses
to ensure that all are being issued in a timely manner and comply with the intent of the relevant
Contract Documents and all contractual requirements. Manager’s actions shall be taken with such
reasonable promptness as to cause no delay in the work or activities of the Enterprise or the
Enterprise’s Contractors.

     1.3.18 Manager shall cause the general contractor to keep a daily log containing a record of
weather, the work of each of the Enterprise’s Contractor, the number of workers, identification of
equipment, the work

B-5

 

accomplished, problems encountered, and other similar relevant data as the Enterprise reasonably
may require. Manager shall prepare a monthly “Project Status Report”, revised to describe the
current status of all construction-related activities, and informing the Enterprise of all relevant
events during construction, (e.g. substantive discussions with the Enterprise’s Contractors,
results of coordination process, shop drawing status, status of requests for information from the
Enterprise’s Contractors, changes to the construction drawings, punch list summary, change order
log, coordination issues, etc.). Such monthly Project Status Report shall concisely advise on
Development Project management issues and address all aspects of the Development Project including
cost, schedule, design, etc. In the event Manager encounters any materials on the site which
Manager believes to be hazardous, Manager shall immediately report the condition to the Enterprise.

     1.3.19 Utilizing the construction schedules provided by the Enterprise’s Contractors, Manager
shall regularly update the Project Schedule incorporating the activities of the Enterprise’s
Contractors on the Development Project, including the activity sequences and durations, allocation of labor and
materials, processing of shop drawings, product data and samples, and delivery of products
requiring long lead time and procurement. Manager shall update and reissue the Project Schedule as
required to show current conditions. If an update indicates that the previously approved Project
Schedule may not be met, Manager shall recommend corrective action to the Enterprise and Architect
so that the Development Project can be completed on or before the originally established completion
date.

     1.3.20 Manager shall monitor the approved Project Budget, the actual costs incurred on the
Development Project and the contract sums in the Construction Contract(s). On a regular basis,
Manager shall provide written reports to the Enterprise regarding project costs and the Project
Budget. Manager shall show actual costs for activities in progress and estimates for uncompleted
tasks by way of comparison with the Project Budget and the aforementioned contract sums, and shall
indicate the areas in which actual and/or reasonably projected costs exceed initial estimates.
Following the submission of such reports, Manager shall update and/or revise the Project Budget, if
so directed by the Enterprise. Manager shall take all reasonable actions to require the
Enterprise’s Contractors to complete the Development Project within the Project Budget and the
Project Schedule.

     1.3.21 Manager shall develop and implement procedures for the review and processing of
applications by the Enterprise’s Contractors for progress and final payments. Based on Manager’s
observations and evaluations of work performed by the Enterprise’s Contractors, Manager shall
review and certify to the Enterprise the amounts due based on Manager’s observations and
evaluations of work performed by the Enterprise’s Contractors.

     1.3.22 Manager shall require that the applications for payment submitted by each of the
Enterprise’s Contractors be accompanied by lien waivers, executed by each of the Enterprise’s
Contractors (and by each subcontractor and sub-subcontractor providing work or materials to the
Development Project covering all labor and materials that have been paid for by the Enterprise in
any previous application. In addition, Manager shall require that the applications for payment
submitted by each of the Enterprise’s Contractor be notarized, if required by the Enterprise, and
accompanied by such substantiating data as the Enterprise or Architect may require, such as copies
of requisitions and/or invoices. Manager shall not recommend to the Enterprise payment of any
application for payment until all lien waivers or other information required by the Enterprise has
been submitted. Manager’s issuance of a recommendation for payment shall be based on the
inspection of the work required hereby, which shall include a review of the quality and quantity of
the work. In addition, in connection with the issuance of each recommendation for payment, a
project consultant, under Manager’s supervision, shall obtain and review copies of invoices,
requisitions and other information relating to the work of the Enterprise’s Contractors and their
subcontractors and material suppliers, to the extent necessary to assure that the payments being
made for such work are appropriate and in conformance with the schedule of values and contract sum
applicable to the Construction Contract(s). Manager’s recommendation for payment shall constitute a
representation to the Enterprise, based on Manager’s determinations at the site and on the data
comprising the Enterprise’s Contractors’ applications for payment, that, to the best of Manager’s
knowledge, information and belief, the work has progressed to the point indicated and the quality
of the work is in accordance with the Contract Documents and the applicable requirements of this
Exhibit have been met. In addition to such review of applications for payment and sending such
applications with the recommendations of the Manager regarding payment, Manager shall code and
record the payments of the Enterprise with regard thereto and keep full, complete and accurate
records with the regard to the same.

B-6

 

     1.3.23 Manager shall establish and implement a change order system to monitor and report job
cost events, including approved change orders, pending change orders and anticipated change orders
and which includes a time line for the change order process that does not interfere with the
progress of the work. Manager will review and evaluate with the Enterprise and Architect all change
order requests submitted by the Enterprise’s Contractors to determine whether the changes are
necessary, and if so, whether the amount sought is reasonable. Manager will advise the Enterprise
of necessary or desirable changes to the Development Project and assist in negotiation of the
Enterprise’s Contractors’ proposals for these
changes. No change shall be made in any bid documents, Construction Contract(s) or other the
Enterprise contract without the Enterprise’s prior, written approval.

     1.3.24 Manager shall establish a presence at the Gaming Facility site to receive, inspect and
accept or  reject, on behalf of the Enterprise, furniture, furnishings and equipment (including the
Furnishings and Equipment) at the time of their delivery and installation. A project consultant,
under Manager’s supervision, shall review the safety programs developed by each of the Enterprise’s
Contractors for purposes of coordinating the safety programs with those of other the Enterprise’s
Contractors. Manager shall monitor the implementation of such safety programs, and shall provide
for the general security and the safekeeping of all the Enterprise-purchased materials, equipment
and improvements located at the Development Project, consistent with the provisions of the
Construction Contract(s).

     1.3.25 Manager shall use reasonable efforts to ensure that the Enterprise’s Contractors
maintain at the Gaming Facility site, on a current basis: a record copy of all agreements,
drawings, specifications, addenda, change orders and other modifications, in good order and marked
to record all changes made during construction; shop drawings; product data; samples; submittals;
purchases; materials; equipment; applicable handbooks; maintenance and operating manuals and
instructions; and all other documents and revisions related to the
Development Project. Manager
shall require the Enterprise’s Contractors to make all such records available to the Enterprise.
At the completion of the Development Project, Manager shall deliver all such records to the
Enterprise.

     1.3.26 If requested in writing by the Enterprise, Manager shall assist the Enterprise in the
review, evaluation and documentation of claims made by or against the Enterprise or the
Enterprise’s Contractors.

     1.3.27 With the Enterprise’s maintenance personnel, Manager shall observe the final testing
and start-up of utilities, operational systems and equipment (including Furnishings and Equipment) and
shall coordinate and schedule any adjustments, corrections or balancing required by the
Construction Contract(s).

     1.3.28 When Manager considers the work for the Development Project or a designated portion
thereof substantially complete, Manager shall, jointly with the Enterprise’s Contractors, review
the relevant certificate of substantial completion and prepare a list of incomplete or unsatisfactory
items and a schedule for their completion. Manager shall conduct inspections to determine whether
the work or designated portion thereof is substantially complete. Manager shall prepare for the
Enterprise a summary of the status of the work of the Enterprise’s Contractors, listing changes in
the previously issued certificates of substantial completion of the work and recommending the times
within which the Enterprise’s Contractors shall complete uncompleted items. Manager shall develop
a punch list of those items remaining to be completed at the time of substantial completion of the
Development Project or a designated portion thereof and recommend an amount reasonably sufficient
to complete these items to be withheld from payment to the Enterprise’s Contractors to ensure the
completion of this punch-list and follow up with corrective actions.

     1.3.29 Manager shall coordinate the correction and completion of the work. Following issuance
of a certificate of substantial completion of the work on the Development Project or a designated
portion thereof, Manager shall evaluate the completion of the work of the Enterprise’s Contractors
and make recommendations to the Enterprise when work is ready for final inspection. Manager shall
conduct final inspections. Manager shall verify to the Enterprise the completion and correction of
the work set forth in any punchlist.

     1.3.30 Promptly after issuance of a certificate of substantial completion as to the
Development Project in its entirety, Manager shall begin the commissioning and closeout requirements
for the Development Project. Manager shall manage the close-out of the contracts of all of the
Enterprise’s Contractors. In this regard, a project consultant, under Manager’s supervision, shall:
(1) review the marked set of record (as-built) Construction Documents prepared by the Enterprise’s
Contractors and notify the Enterprise and the Enterprise’s
Contractors of

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any changes or markings which Manager believes, based on such review, should be corrected or
included to accurately reflect the Work actually installed on the Development Project; (2) within
30 days after
substantial completion, coordinate the transfer to the Enterprise of all final as-built drawings,
warranties, O&M manuals and all other construction related documents and all materials prepared by
the Enterprise’s Contractors and Architect as reasonably necessary for full operation of the
facility; (3) monitor all testing and commissioning of critical systems, inspections, tests and
certifications of completed equipment (including Furnishings and Equipment); (4) in conjunction
with the Architect, witness and document the results of startup and acceptance testing activities
in advance of all integrated systems and commissioning tests; review and advise the Enterprise
regarding the Enterprise’s Contractors’ as-built documentation, summaries of warranties,
maintenance requirements, and operation procedures imposed in the specifications for the work and
provide a closeout and commissioning summary, certifying acceptance of the documents and completion
of all closeout requirements pursuant to all Construction Contract(s), when appropriate. At all
times, Manager shall comply with the requirements of all applicable provisions of any Control
Agreement and the requirements and requests of the Executive Director and any Lender pursuant
thereto; without limiting the generality of the foregoing, Manager shall cooperate with any Lender
requirements applicable to the release of any amounts in retainage or contingency.

     1.3.30
When, as determined by Manager and the Enterprise, all items are considered complete,
Manager will coordinate the issuance of a certificate of final completion. Promptly after final
completion, Manager will coordinate the submission to the Enterprise by Architect, of a complete
set of record Construction Documents incorporating all revisions made during construction.

1.4  MANAGER’S PROJECT REPRESENTATIVE

     Manager shall designate a representative authorized to act on Manager’s behalf (“Manager’s
Project Representative”). Manager’s Project Representative shall be responsible for coordinating,
scheduling and supervising Manager’s performance of all of the services and activities required by
this Exhibit through to completion of the Development Project, and shall be the person responsible
for communicating, on behalf of Manager, with the Enterprise and Architect as reasonably necessary
to facilitate the timely and proper performance of Manager’s services and activities hereunder.
Manager’s Project Representative shall not be discontinued by Manager and no new individuals shall
be designated as the Project Representative without the prior, written approval of the Enterprise,
which approval shall not be unreasonably withheld. In addition to Manager’s Project Representative,
the Enterprise and Manager shall meet and agree on the nature and amount of any additional
supervision to be provided by Manager with respect to the Development Project. Manager agrees that
at a minimum, one project consultant under the supervision of Manager shall be at the Gaming
Facility site at all times during construction of the Development Project. Manager agrees that it
shall not utilize any person (whether a member or employee of Manager or its Affiliate or of any
independent contractor retained by Manager) to perform the services required of Manager hereunder
on the Development Project if the Enterprise makes reasonable written objection to such person,
based on the quality of work performed by such person and/or the nature of the working relationship
between such person and the Enterprise or Architect. In the event the Enterprise makes such
reasonable objection to any such person, Manager agrees that it shall promptly remove such person
from the Development Project and thereafter shall not utilize such person to perform any of the
services required by this Exhibit, unless the Enterprise later agrees to such use in advance and in
writing.

1.5 OWNERSHIP OF DOCUMENTS

     As between Manager and the Enterprise, all Design Documents and drawings, plans,
specifications, correspondence, memoranda and other work generated in connection with the
Development Project as contemplated herein (collectively, the “Development Documents”) shall be the
sole property of the Enterprise whether the Development Project is executed or not, and shall not
be used by any person other than the Enterprise on projects other than the Development Project
unless expressly authorized in writing by the Enterprise. Manager hereby releases any claim to any
right or interest to or in the Development Documents.

SECTION 2:
 THE
ENTERPRISE

2.1 THE ENTERPRISE’S PROJECT REPRESENTATIVE

B-8

 

     Subject to the limitations set forth herein and/or established by law, the
Enterprise’s Representative shall be authorized to render necessary decisions pertaining
to documents submitted to the Enterprise for review. Unless otherwise agreed in writing
between the parties or otherwise provided in this Exhibit, Manager shall communicate
with the Enterprise through the Enterprise’s Representative, and Manager shall not
accept requests for work or services or other directions in connection with the
performance of work on the Development Project unless such request or direction is
issued by the Enterprise’s Representative. Any replacement of the Enterprise’s
Representative may be designated by the Enterprise by providing Manager with written
notice of same.

2.2 OBSERVATION OF SERVICES

     Manager shall make reasonable accommodations to facilitate observation by the
Enterprise, through the Enterprise’s Representative or other designee(s), of the
services and work throughout the progress on the Development Project. The presence or
observations of the Enterprise’s Representative shall not relieve Manager from any
obligation to perform in accordance with this Exhibit. Specifically, in this regard,
Manager agrees that the failure of the Enterprise (or any third party retained by the
Enterprise to participate in, supervise or observe Manager’s activities) to give notice
of or to observe, discover or otherwise notice any error, omission, deficiency or breach
of contract in the services provided by Manager shall not constitute a waiver or
acceptance of such error, omission, deficiency or breach and shall not affect or reduce
Manager’s responsibilities to the Enterprise under this Exhibit.

2.3 TESTING

     To the extent that structural, mechanical, chemical, air and water pollution tests,
tests for hazardous materials, and other laboratory and environmental tests, inspections
and reports to the extent that such tests, inspections or reports are required by law or
the proper design or construction of the Development Project would be traditionally
performed, and/or are reasonably required on the Development Project, Manager shall
advise the Enterprise if and when such tests, inspections and reports are appropriate.

SECTION 3:

TIME FOR PERFORMANCE; MISCELLANEOUS

3.1 COMMENCEMENT AND PERFORMANCE

     Manager’s services shall commence when so directed by the Enterprise and thereafter
shall be performed as expeditiously as possible, consistent with the standards of
professional care and diligence established in this Exhibit, so as to cause no delay in
the Development Project and so as not to interfere with the schedule of any other person
or entity retained to perform work or services for the Development Project. The time
limits, if any, established for the performance of Manager’s services in any schedule
agreed to by the Enterprise and Manager shall not be exceeded by Manager except for
delays beyond Manager’s reasonable control. Manager agrees, as part of its services, to
take such measures as are necessary to comply with any such agreed time limits. In the
event Manager fails to complete a service or activity that is the responsibility of
Manager within the time limits, if any, established by any schedule agreed to by the
Enterprise and Manager, and after receiving notice of such failure from the Enterprise
does not proceed with diligence and promptness to correct the same (provided Manager has
not already been terminated), the Enterprise shall, without limitation to any other
remedies for such breach of contract, have the right, but not the obligation, without
terminating this Exhibit, to hire another person or entity to perform such service or
activity and Manager shall be responsible to the Enterprise for all additional costs
paid by the Enterprise to procure such performance to the extent allowed by law.
Notwithstanding anything herein to the contrary, Manager shall not be responsible for
any delays resulting from Enterprise’s delay in granting any approvals or consents
required hereunder.

3.2 MISCELLANEOUS

     3.2.1 This Exhibit shall not be deemed to be amended or superseded by any
provisions in the agreements between the Enterprise and the Enterprise’s Contractors, or
in the various contract documents describing the work to be performed on the Development
Project (except to the extent such provisions are incorporated herein

B-9

 

by reference and except that Manager shall still be required to administer and coordinate its
services with the requirements of such other documents as set forth herein). The Enterprise shall
have the unilateral right to reduce the scope of services and work to be provided by Manager
pursuant to this Exhibit by formal written notice to Manager, from time to time.

     3.2.2 All terms and phrases defined in this Exhibit shall have the meanings and definitions
set forth herein. All words which have well known technical or construction industry meanings are
used in this Exhibit in accordance with such recognized meanings, unless defined differently herein
or the context clearly indicates otherwise. All references to “days” herein shall mean calendar
days, unless otherwise specified.

     3.2.3 Except with the Enterprise’s knowledge and express written consent, Manager shall not
engage in an activity, or accept any employment, interest or contribution that would, or reasonably
appear to, compromise Manager’s professional judgment with respect to its obligations under this
Exhibit. Manager shall not engage in any activity that would, or would reasonably appear to,
conflict with any Gaming Laws or the Control Agreements. Manager shall not knowingly engage in any
activity that would, or would reasonably appear to, conflict with any other Legal Requirements.

B-10

 

EXHIBIT C 
 PROHIBITED ACTIVITIES

     In addition to the limitations set forth elsewhere in this Agreement, the Manager shall have
no authority on behalf of the Enterprise to do, and shall not do, any of the following prohibited
activities (the “Prohibited Activities”) without the Enterprise’s approval in each instance unless
the specific transaction is described and authorized in the Approved Budget:

	1.	 	Remove any fixed assets, supplies, furniture, fixtures, equipment, inventories or operating
supplies from the Gaming Facility (including Furnishings and Equipment), except in the
ordinary course of business or in connection with the disposition of obsolete, worn-out
damaged items;
	 
	2.	 	Borrow money, guaranty the debts of any third person, or mortgage, pledge, grant a security
interest in or otherwise encumber all or any part of the Gaming Facility;
	 
	3.	 	Make, execute or deliver on behalf of the Enterprise any assignment for the benefit of
creditors, or any guaranty, indemnity bond, or surety bond;
	 
	4.	 	Confess any judgment on behalf of the Enterprise or the Casino;
	 
	5.	 	File a voluntary or consent to an involuntary bankruptcy with respect to the Casino or the
Enterprise;
	 
	6.	 	Enter into, modify or terminate any lease, agreement to lease, option to lease, license,
franchise agreement (if any), operating agreement, management agreement or similar arrangement
relating to any portion of the Casino or otherwise or the approval of any sublease of space;
	 
	7.	 	Select or retain a construction manager, general contractor, architect, managing agent, legal
counsel, rental agent, accountant or insurance carrier for Gaming Facility or the Enterprise,
or the election as to whether and when to have an audit conducted of the fiscal affairs of the
Casino or the Enterprise;
	 
	8.	 	Institute or defend litigation on behalf of the Casino or the Enterprise;
	 
	9.	 	Enter into, amend or terminate any Control Agreement including any service contract, contract
for goods or services of any kind or similar agreement, except in accordance with Section
3.21;
	 
	10.	 	Forward any incident report or similar documentation or information on the Enterprise’s
behalf concerning any incident of property damage, personal injuries or other losses occurring
at or around the Gaming Facility to an insurance carrier or otherwise deal with an insurance
adjuster or any attorney representing the Casino or the Enterprise;
	 
	11.	 	Communicate with the media or other third parties concerning any such incident;
	 
	12.	 	Communicate with the media in any written or oral form which names the Enterprise, Och-Ziff,
Clairvest or any Affiliate of either of them or otherwise communicate with media about any
matter concerning the Casino other than related to day-to-day operations or marketing of the
Casino, except for Permitted Disclosures;
	 
	13.	 	Write-off, forgive or otherwise defer any receivable or rent in excess of $2,500 in any
instance, subject to an aggregate cap of $10,000 in any given calendar year;

C-1

 

	14.	 	Make any change to the Approved Budget, Approved Operating Plan or any plans applicable to
the Casino and approved by Kansas Lottery under the Lottery Facility Management Contract.
	 
	15.	 	Communicate (orally, or in writing) with, or provide any notices, reports or information,
concerning the condition of the Gaming Facility, details concerning its repair, maintenance
and capital improvement program or capital expenditures, the financial performance of the
Casino (including, budgets, forecast, profit and loss statements), capital structure and
ownership structure, to any third party, except for Permitted Disclosures;
	 
	16.	 	Incur or pay any Costs of Operations which are not in accordance with the Approved Budget,
unless such Cost of Operations has been approved in advance, in writing by the Enterprise;
	 
	17.	 	Direct any employee of the Enterprise to take any action which Manager does not have the
authority to take or, if taken by Manager, would constitute a breach of Manager’s obligations
under the Agreement;
	 
	18.	 	Accept, directly or indirectly (including through an Affiliate of Manager), kickbacks or
rebates of any kind, including remuneration intended to induce or reward the purchasing,
leasing, or ordering of, or arranging for or recommending the purchasing, leasing, or ordering
of, any good, facility, service or item reimbursable by the Enterprise; and
	 
	19.	 	Take any other action or decision outside the scope of the ordinary day-to-day business
affairs of the Casino.

C-2

 

EXHIBIT D
 MANAGER RESPONSIBILITIES AND DUTIES

     In addition to the other responsibilities and duties set forth in this Agreement (including in
Article 3) and subject to the terms and conditions of the Agreement, including the Approved Budget
and applicable limitations of authority, Manager shall:

	1.	 	Cooperate with the Enterprise (but not act as leasing agent) in the Enterprise’s efforts to
lease any office, restaurant or retail space at the Casino or on adjacent outparcels available
for lease to third parties; it being agreed that all such leases shall be in Enterprise’s name
and shall be executed only by the Enterprise;
	 
	2.	 	Check all bills received for the services, work and supplies ordered in connection with
maintaining and operating the Casino and, to the extent there are funds available from the
Enterprise and subject to the Approved Budget, pay such bills as and when the same shall
become due and payable;
	 
	3.	 	Inspect the Casino at adequate intervals and submit in writing to the Enterprise any
recommendations concerning the condition of the Casino and its operations;
	 
	4.	 	Cooperate in all reasonable respects with any sale by the Enterprise of all or any part of
the Enterprise or the Casino or any portion of the Gaming Facility;
	 
	5.	 	Report to the Enterprise any incident which occurs on or around the Gaming Facility that
could lead to legal liability resulting from property damage (including due to theft,
vandalism or fire) or personal injuries (including slip and falls and assaults) promptly (but,
in any event, within 48 hours of Manager learning of such incident) and reasonably comply with
the Enterprise’s policies and procedures disclosed in writing to Manager concerning the
reporting, investigating and handling of any such incidents and/or subsequent claims (and
Manager shall cause its employees to comply with the same) and timely prepare and maintain
written incident reports of all accidents and other incidents and provide copies of same to
the Enterprise promptly;
	 
	6.	 	Pay (prior to imposition any penalty, late fee or adverse consequence), on the Enterprise’s
behalf (this duty shall not be construed as placing any obligation on Manager to advance or
use its own funds to make any such payments in connection with any of Manager’s duties as set
forth herein), all Costs of Operations of the Casino in accordance with the Approved Budget
and, at the option of the Enterprise, any or all other costs and expenses associated with the
Casino, as and when the same are due, but in any case subject to the Enterprise’s direction,
including in the context of any contest or dispute over the applicable expenses and costs (and
shall advise the Enterprise in writing upon learning that the funds in the Approved Budget
will be insufficient to make such payments);
	 
	7.	 	Take all commercially reasonable steps (including by obtaining lien waivers in connection
with any payments to contractors, material suppliers or other vendors when nonpayment of same
could give rise to lien rights under applicable laws) to prevent the creation of any claim for
lien or encumbrance or security interest against the Gaming Facility or any part thereof or
any fund, account receivable or other asset of the Enterprise, other than liens, encumbrances
and security interests created or consented to by the Enterprise;
	 
	8.	 	In making any arrangements for service contracts, maintenance or the provision of any
services, materials or labor in connection with the performance by Manager of its duties under
the

D-1

 

	 	 	Agreement in the operation of the Casino, Manager shall take full advantage of, and see that
Enterprise receives credit for, all available rebates, commissions, discounts, warranties and
allowances (it being understood and agreed that any refunds, rebates, or credits received by
Manager pursuant to any service contract or purchase order or other contracts relating to the
Casino shall be applied for the benefit of the Casino and the Enterprise, and the benefits of
any discounts received by Manager pursuant thereto shall be applied for the benefit of the
Casino and the Enterprise);
	 
	9.	 	Supervise and purchase or arrange for the purchase in the most economical manner of all
inventories, provisions and operating supplies, which, in the normal course of business are
necessary and proper to maintain and operate the Casino;
	 
	10.	 	Perform any other service or activity incidental to the normal and professional operation of
a property of a similar type and character to the Casino, including entering into service
contracts, website agreements and other services as agent for Enterprise subject to any
applicable limitations on such authority hereunder (including as set forth in Section 3.2,
Section 3.21 and Exhibit C hereof);
	 
	11.	 	[Intentionally omitted];
	 
	12.	 	Provide the Enterprise with written notice of any suspension, revocation, termination or
default under any Control Agreement and any threatened suspension, revocation, termination or
default thereunder promptly (but, in any event, within 48 hours of Manager learning of the
same) and Manager shall promptly (but, in any event, within 48 hours) notify the Enterprise in
writing of any defects, governmental notices, threats of condemnation or litigation or other
issues that may impede or preclude Manager from providing any or all of the services required
of it hereunder, or otherwise from discharging its duties and obligations hereunder or that
may materially and adversely affect Casino operations or the physical condition of the Gaming
Facility, upon Manager learning of same;
	 
	13.	 	Obtain and verify (if requested by the Enterprise) bills for real estate and personal
property taxes, including assessments and other charges and recommend payment or appeal with
regard to the same;
	 
	14.	 	Provide such other services as are customary for managers of first-class gaming facilities;
and
	 
	15.	 	Do any and all acts and things as reasonably requested by the Enterprise in writing or as
Manager may reasonably deem necessary or appropriate to carry out its responsibilities under
the terms of this Agreement and in accordance with the Operating Standard.

D-2

 

EXHIBIT E 
 PRE-OPENING SERVICES

     Prior to the Opening Date (such period after the date hereof until the Opening Date being the
“Pre-Opening Period”), in order to prepare the Casino for full operation, Manager shall render the
following services to the Enterprise (the “Pre-Opening Services”):

	1.	 	Prepare a pre-opening budget, concept plans for food and beverage outlets and pre-opening
marketing plan for the Enterprise’s approval.
	 
	2.	 	Prepare and put into effect a plan for the organization, services and sales promotion for the
Casino, subject to the approval of the Enterprise;
	 
	3.	 	Engage a third-party provider to develop and design the content of the website for the
Casino, for the Enterprise’s approval, and implement and administer same;
	 
	4.	 	Identify, recommend to the Enterprise, procure, and coordinate installation of software for
Casino operations, as approved by the Enterprise;
	 
	5.	 	Procure Furnishings and Equipment as necessary to open the Casino, as approved by the
Enterprise;
	 
	6.	 	Coordinate with the Enterprise’s development manager to transition closeout of construction
to Casino opening;
	 
	7.	 	Participate in the punch list walkthrough of the Casino with the Enterprise;
	 
	8.	 	Obtain and maintain all warranties, guaranties and related information related to the
construction of, and Furnishings and Equipment procured for the Casino;
	 
	9.	 	Engage third-party service providers, per the Approved Budget, and enter into contracts and
arrangements with regard to the same, subject in each instance to the other terms and
provisions of this Agreement relating to such matters (including Section 3.21);
	 
	10.	 	Recruit and train the employees of the Casino, subject to Article 4 and engage in test
operations of the Casino, as and to the extent approved by the Enterprise;
	 
	11.	 	Apply for and secure all governmental licenses and permits needed for Casino operations,
including food and beverage services;
	 
	12.	 	Prepare and carry out a program for the grand opening of the Casino, in a manner approved by
the Enterprise; and
	 
	13.	 	Render such other services incidental to the preparation and organization of the Casino’s
management and operation in contemplation of the Casino opening for business as may be
reasonably necessary or advisable.

 

 

EXHIBIT F
 ADDITIONAL CORE POSITIONS

General Manager

Assistant General Manager

Chief Financial Officer

Tables Director

Slots Director

Food and Beverage Director

Human Resource Director

Security Director

Surveillance Director

Marketing Director

 

 

EXHIBIT G
 DIRECT AND INDIRECT OWNERSHIP OF MANAGER

*
  Lakes Entertainment is a publicly traded company (NASDAQ: LACO).

 

 

     The following schedules to this Agreement have been omitted and the Company agrees to furnish
supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon
request.

	 	 	 
	Schedule	 	Description
	 
	 	 
	2.3

	 	Conversion Example
	5.1

	 	Wire Instructions
	8.1

	 	Regulatory Conflicts
	10.1

	 	Minimum Insurance Requirements
	11.14

	 	Diagrams of Member Ownership Structure
	U

	 	List of Unsuitable Parties

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