exv10w68



 







Exhibit 10.68




December 14, 2004




Grand Casinos Nevada I, Inc.

c/o Lakes Entertainment, Inc.

130 Cheshire Lane

Minnetonka, MN 55305



     RE:Metroflag Polo, LLC Operating Agreement; Option Agreements



     This letter serves to confirm our agreement as follows:



     1. Delay of Special Member Subordinated Interest Repurchase. Pursuant to Section
15.1(a) of the Operating Agreement of Metroflag Polo, LLC, as amended by a First Amendment dated as
of May 15, 2003 (the “Agreement”), upon payment in full of the Travelodge Purchase Note or the
Travelodge Deficit Note (collectively the “Notes”), the Special Member Subordinated Interest
Repurchase is required to occur within sixty (60) days of such payment. Notwithstanding the
provisions of Section 15.1(a) or any other provisions of the Agreement to the contrary, if the
Notes are paid in full on or before December 31, 2004, then the closing of the Special Member
Subordinated Interest Repurchase shall occur on or before June 30, 2005; provided, however, that if
the Company provides at least thirty (30) days written notice to the Special Member prior to June
30, 2005, and also pays $20,000 in cash to the Special Member before that date, the Company shall
have the absolute right to extend the time for closing of the Special Member Subordinated Interest
Repurchase to a date on or before December 31, 2005. The Special Member Subordinated Return shall
continue to accrue until the closing of the Special Member Subordinated Interest Repurchase is
completed.



     2. Termination of 2001 Option Agreement. In the event the Notes are paid in full on
or before December 31, 2004, all rights of Lakes Entertainment, Inc. (formerly called Lakes Gaming,
Inc.) under that certain Option Agreement between Metroflag BP, LLC and Lakes Gaming, Inc. dated
December 28, 2001, as subsequently amended (the “2001 Option Agreement”), shall terminate. Lakes
Entertainment, Inc. (“Lakes”) shall, simultaneously with such repayment of the Notes, deliver to
Metroflag BP, LLC an instrument in recordable form acknowledging the termination of the 2001 Option
Agreement.



     3. Membership Interests Purchase Option. The Members acknowledge that the 2001 Option
Agreement was entered into in part as security for the timely closing of the Special Member
Subordinated Interest Repurchase. If Lakes terminates the 2001 Option Agreement pursuant to the
preceding Section 2, Metro One, LLC and Flag Luxury Polo, LLC (as the “Members” under the
Agreement) each hereby grants to Lakes, or its successors and assigns, the right and option to
purchase such Member’s respective Member Interest for a purchase price equal to $1.00 for each such
Member Interest, at any time during the five (5) year period beginning on the final due date for
the closing of the Special Member Subordinated Interest Repurchase under Section 1 above; provided,



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however, that the following conditions shall have been satisfied before such purchase may be
completed:





     (a) The Company shall have breached its obligation under Section 15.1(a) of the
Agreement to complete the Special Member Subordinated Interest Repurchase by the final due
date provided under Section 1 above; and




     (b) Lakes shall have given the Company and the Members a written notice of Lakes’
intention to exercise its option to purchase their Member Interests under this Section 3 on
a specified date at least three (3) months after the date the Company has received such
notice;


provided further that such Member Interests purchase option shall have no force or effect: (i) if
the Special Member Subordinated Interest Repurchase is completed before or during such three-month
period; and (ii) if the Company has also breached its obligation under the Agreement to complete
the Special Member Priority Interest Repurchase before the beginning of such three-month period,
the Special Member Priority Interest Repurchase is also completed during such three-month period.
Notwithstanding anything in the Agreement to the contrary, any failure of the Company to complete
the Special Member Subordinated Interest Repurchase shall not, solely for purposes of Section
14.3(b) of the Agreement, constitute a material breach of the Company’s obligations under the
Agreement.




     4. Company’s Right to Redeem Unaltered. Nothing contained herein is intended to
affect the Company’s right to redeem the Special Member Subordinated Interest or the Special Member
Priority Interest (at par plus the respective accrued return) at any time irrespective of whether
the Special Member shall have at such time the right to demand such redemption.



     5. Confirmation of Agreement. Except to the extent amended by this letter agreement,
the Agreement remains in full force and effect. All terms not otherwise defined herein shall have
the meanings ascribed to them in the Agreement.



[SIGNATURE PAGE FOLLOWS]




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     The undersigned hereby agree as set forth above.



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Metro One, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Brett Torino	 	 
	 	 	 	 	Brett Torino, Manager	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Flag Luxury Polo, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Flag Luxury Properties, LLC, its sole member
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Flag Leisure Group, LLC, its managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:
	 	Paul Kanavos	 	 
	 

	 	 	 	 	 	 	 	 	 	Paul Kanavos, President	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Grand Casinos Nevada I, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Timothy Cope	 	 
	 	 	 	 	Timothy Cope, President	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Metroflag BP, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Paul Kanavos	 	 
	 	 	Name:	 	Paul Kanavos	 	 
	 

	 	Title:	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Lakes Entertainment, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Timothy Cope	 	 
	 	 	 	 	Timothy Cope, President	 	 






     The Company hereby consents to the foregoing agreement of its Members and Lakes Entertainment,
Inc.



	 	 	 	 	 	 	 
	 	Metroflag Polo, LLC
	 
	 	 	 	 	 	 
	 	By its Member:
	 
	 	 	 	 	 	 
	 	 	 	 	Metro One, LLC
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	Brett Torino
	 

	 	 	 	 	 	Brett Torino, Manager






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