LAKES ENTERTAINMENT INC
RELEASE AND INDEMNIFICATION AGREEMENT
<DOCUMENT>
<TYPE>EX-10.17
<SEQUENCE>18
<FILENAME>c06339exv10w17.txt
<DESCRIPTION>RELEASE AND INDEMNIFICATION AGREEMENT
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.17


                      RELEASE AND INDEMNIFICATION AGREEMENT

            RELEASE AND INDEMNIFICATION AGREEMENT (this "Agreement"), dated as
of June 22, 2006, by and among Lakes Entertainment, Inc. ("Lakes"), Great Lakes
Gaming of Michigan, LLC (the "Manager" and, together with Lakes, the "Lakes
Parties"), Banc of America Securities LLC ("BofA Securities"), Banc of America
Leasing & Capital, LLC ("Banc of America Leasing"), Bank of America National
Association, a national banking association ("BANA"), Fifth Third Bank, Wells
Fargo Bank Northwest, National Association, as collateral agent under the FF&E
Documents (defined below) and U.S. Bank National Association ("U.S. Bank").

                                   WITNESSETH:

            WHEREAS, the Pokagon Band of Potawatomi Indians, an Indian tribe
recognized by the Secretary of the Interior pursuant to federal law (the
"Tribe") plans to develop and operate a gaming and entertainment facility to be
known as the Four Winds Casino and Resort (the "Project"), which will be located
on Indian lands consisting of approximately 51 acres and held in trust by the
United States government for the Tribe;

            WHEREAS, the Tribe established the Pokagon Gaming Authority (the
"Authority"), a wholly owned, unincorporated instrumentality of the Tribe, to
develop and operate all gaming and related businesses of the Tribe, including
the Project;

            WHEREAS, the Manager is a subsidiary of Lakes;

            WHEREAS, pursuant to the Third Amended and Restated Development
Agreement dated as of January 25, 2006 (the "Development Agreement"), between
the Tribe and the Manager, and the Third Amended and Restated Management
Agreement dated as of January 25, 2006 (the "Management Agreement"), between the
Tribe and the Manager, in each case, as amended as of the date hereof, the Tribe
has retained the Manager to assist with the development of and to manage the
Project;

            WHEREAS, in connection with the Development Agreement and Management
Agreement, the Tribe and the Manager have entered into, among other agreements,
a First Amended and Restated Lakes Facility Note, a First Amended and Restated
Lakes Working Capital Advance Note, a First Amended and Restated Lakes Minimum
Payments Note, a Third Amended and Restated Lakes Development Note and a First
Amended and Restated Security Agreement, each dated as of January 25, 2006 (all
such agreements and instruments, whether or not specifically referred to herein,
collectively with the Development Agreement and the Management Agreement, the
"Lakes Agreements");

            WHEREAS, pursuant to a Second Amended and Restated Unlimited
Guaranty dated January 25, 2006, Lakes has guaranteed the performance of the
Manager's obligations under the Lakes Agreements;


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            WHEREAS, pursuant to the Assignment and Assumption Agreement dated
as of June 1, 2006, among the Authority and the Tribe, certain of the Tribe's
rights and obligations under the Lakes Agreements have been assigned to the
Authority;

            WHEREAS, the National Indian Gaming Commission has approved the
Management Agreement;

            WHEREAS, the Development Agreement and the Management Agreement
contemplate that certain costs related to the Project will be funded, in part,
through the issuance and sale of notes, equipment financing and funds loaned to
the Tribe by the Manager;

            WHEREAS, concurrently with the execution of this Agreement, (1) the
Tribe, the Authority, the guarantors party thereto, the Manager and BofA
Securities, as initial purchaser, have entered into a Purchase Agreement dated
June 15, 2006 (the "Purchase Agreement"), pursuant to which the Authority will
issue $305.0 million of 10 3/8% Senior Notes due 2014 (the "Notes"). The Notes
will be issued pursuant to an Indenture dated June 22, 2006 (the "Indenture"),
among the Authority, the guarantors party thereto and U.S. Bank, as trustee, the
proceeds of which will fund a portion of the development and construction costs
of the Project (the Purchase Agreement, the Indenture, all security and other
documents and instruments entered into pursuant thereto or in connection
therewith and any engagement letter entered into with respect thereto are
collectively referred to as the "Notes Documents") and (2) the Authority, Banc
of America Leasing and Wells Fargo Bank Northwest, National Association, as
collateral agent, have entered into a furniture and equipment financing facility
(the "FF&E Facility") pursuant to a loan agreement dated June 22, 2006 (the
"Loan Agreement"), among the Authority, the Tribe, Wells Fargo Bank Northwest,
National Association, as collateral agent and the lenders named therein (the
Loan Agreement, all security and other documents and instruments entered into
pursuant thereto or in connection therewith and instruments and a commitment
letter with respect thereto are collectively referred to as the "FF&E
Documents") for the purchase of furniture and equipment for the Project, the
proceeds of which will fund costs of $75.0 million;

            WHEREAS, certain provisions of the Notes Documents and the FF&E
Documents may be in conflict with or otherwise require performance contrary to
certain provisions of the Lakes Agreements (such conflicting provisions in the
Notes Documents and the FF&E Documents being referred to herein as the
"Conflicting Terms");

            WHEREAS, to induce BofA Securities and U.S. Bank to enter into the
Note Documents to which they are a party, in each of the capacities noted
therein, and to induce Banc of America Leasing to enter into the FF&E Documents,
the Tribe and the Authority have requested the Lakes Parties to, and the Lakes
Parties have agreed to, enter into this Agreement as follows and take the
actions set forth therein;

            NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:

            Section 1. Release. Each of the Lakes Parties hereby generally,
irrevocably, and unconditionally acquits, remises, discharges and forever
releases BofA Securities, Banc of



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America Leasing, BANA, Fifth Third Bank, U.S. Bank, Wells Fargo Bank Northwest,
National Association, any holder of Notes from time to time, any current or
future lender under the FF&E Facility (each an "FF&E lender"), any trustees,
agents, lenders, noteholders for future indebtedness incurred by the Authority,
any counsel of the foregoing, or any of its respective affiliates of any of the
foregoing, and any officer, director, partner, employee or agent of any of the
foregoing (or any of such affiliates) and any entity or person controlling
(within the meaning of Section 20(a) of the Exchange Act) any of them (including
any of their respective affiliated companies) (collectively, the "Released
Parties") of and from any and all sums of money, actions, awards, causes of
action, suits, judgments, damages, demands, debts, contracts, accounts,
agreements, liabilities, obligations, representations, rights, setoffs, torts,
wrongs, losses, expenses, claims and counterclaims of any and all kind
whatsoever, whether known or unknown, suspected or unsuspected, of every name
and nature, both in law and in equity, which each of the Lakes Parties now has,
or which each of the Lakes Parties or its respective successors or assigns
hereafter may have, against any of the Released Parties arising out of any
matters, causes, acts, conduct, claims, circumstances or events arising or
occurring as a result of (i) the Conflicting Terms existing in the Notes
Documents or the FF&E Documents, (ii) the entering into the Notes Documents and
the FF&E Documents, the terms of any of the Notes Documents and/or the FF&E
Documents or the FF&E Documents to the extent they include the Conflicting Terms
or (iii) the performance of any of the Conflicting Terms.

            Section 2. Indemnification. Each of the Lakes Parties agrees to
indemnify and hold harmless each Released Party for any loss, claim, damage,
liability or expense, as incurred, arising out of or in connection with the
entering into of this Agreement or arising or occurring as a result of (i) the
Conflicting Terms being in conflict with or otherwise requiring performance
contrary to provisions in the Lakes Agreements, (ii) the entering into the Notes
Documents and the FF&E Documents, the terms of any of the Notes Documents and/or
the FF&E Documents or the FF&E Documents to the extent they include the
Conflicting Terms or (iii) the performance of any of the Conflicting Terms or in
connection with the entering into of the Notes Documents or the FF&E Documents,
the terms of any of the Notes Documents and/or the FF&E Documents or the
performance of any of the Notes Documents or the FF&E Documents.

            Section 3. Release of Liens. In consideration for the noteholders
and BofA Securities entering into the Indenture, and for Banc of America Leasing
and BANA entering into the FF&E Documents, each of the Lakes Parties hereby
unconditionally and irrevocably releases its mortgages (the "Released
Mortgages") in the Non-Gaming Land (as defined in the Indenture). In furtherance
of the foregoing, the Lakes Parties shall execute and deliver such
satisfactions, terminations, or releases of the Released Mortgages as may be
necessary or advisable to affect, record and evidence the release or the
Released Mortgages.

            Section 4. Counterparts. This Agreement may be executed in two or
more counterparts, all of which together shall be considered a single
instrument, and this Agreement will be effective as of the date first above
written when executed by the Manager.

            Section 5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, OTHER
THAN SECTION 5-1401 OF THE NEW YORK GENERAL



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OBLIGATIONS LAW, APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.

            Section 6. Third Party Beneficiaries. The parties hereto acknowledge
and agree that each Released Party hereby shall be an express third-party
beneficiary of this Agreement and shall be entitled to rely upon and enforce the
provisions set forth herein.

            Section 7. Successors and Assigns. Any party to this Agreement other
than the Manager may assign any of its rights or obligations under this
Agreement. The Manager may not assign any of its rights or obligations under
this Agreement.

            Section 8. General Provisions. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may not be amended or
modified unless in writing by all of the parties hereto, and no condition herein
(express or implied) may be waived unless waived in writing by each party whom
the condition is meant to benefit. The section headings herein are for the
convenience of the parties only and shall not affect the construction or
interpretation of this Agreement.

                         [SIGNATURES ON FOLLOWING PAGE]



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


                                  LAKES ENTERTAINMENT, INC.

                                  By: /s/ Timothy Cope
                                      ----------------------------------
                                      Name: Timothy Cope
                                      Title: President/CFO


                                  GREAT LAKES GAMING OF MICHIGAN, LLC

                                  By: /s/ Timothy Cope
                                      ----------------------------------
                                      Name: Timothy Cope
                                      Title: President/CFO


                                  BANC OF AMERICA SECURITIES LLC

                                  By: /s/ R. Sean Snipes
                                      ----------------------------------
                                      Name:  R. Sean Snipes
                                      Title: Managing Director


                                  BANC OF AMERICA LEASING & CAPITAL, LLC

                                  By: /s/ Sonia T. Delen
                                      ----------------------------------
                                      Name:  Sonia T. Delen
                                      Title: Senior Vice President


                                  U.S. BANK NATIONAL ASSOCIATION

                                  By: /s/ Raymond S. Haverstock
                                      ----------------------------------
                                      Name:  Raymond S. Haverstock
                                      Title: Vice President


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                                  FIFTH THIRD BANK

                                  By: /s/ David C. Eifler
                                      --------------------------------
                                      Name: David C. Eifler
                                      Title: Vice President


                                  WELLS FARGO BANK NORTHWEST,
                                  NATIONAL ASSOCIATION

                                  By: /s/ Nancy M. Dahl
                                      --------------------------------
                                      Name:  Nancy M. Dahl
                                      Title: Vice President


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