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,