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Exhibit
10.4
THIRD AMENDMENT TO LEASE AND
DEVELOPMENT AGREEMENT
This THIRD AMENDMENT TO LEASE
AND DEVELOPMENT AGREEMENT (the “Amendment”) is made and
entered into this ___ day of August, 2006 by and between the ST.
LOUIS COUNTY PORT AUTHORITY, a public body corporate and politic of
the State of Missouri (the “Landlord”) and PINNACLE
ENTERTAINMENT, INC., a Delaware corporation (the
“Tenant”).
RECITALS
A. Landlord and Tenant
entered into a Lease and Development Agreement dated as of
August 12, 2004 as amended by letter agreement between the
Landlord and the Tenant of even date, as further amended by letter
agreement between the Landlord and Tenant dated October 4,
2005, and as further amended by Second Amendment to Lease and
Development Agreement dated October 28, 2005 between the
Landlord and Tenant (collectively, the “Lease and Development
Agreement”) pursuant to which the Tenant agreed, subject to
the terms and conditions in the Lease and Development Agreement, to
construct and develop the gaming and mixed use Project in
unincorporated Lemay, Missouri, including an access road (the
“Project”).
B. The Landlord and Tenant
desire to extend certain times in which Tenant and Landlord have to
complete specific tasks and development of the Project under the
Lease and Development Agreement and to make certain other
amendments to the Lease and Development Agreement.
C. Capitalized terms used
herein and not otherwise defined shall have the meanings ascribed
to them in the Lease and Development Agreement.
D. The Landlord and Tenant
are parties to an Intergovernmental Cooperation Agreement dated
August 10, 2005 with other parties signatory thereto (the
“Intergovernmental Agreement”) which provides, among
other things, that Landlord will use its best efforts to acquire
all necessary property interest in the property owned by the United
States of America (“United States”) which is legally
described on Exhibit A attached hereto (the “NIMA
Property”), a portion of which will be used for the Access
Road (“Access Road Property”), and the remainder of
which another third party may purchase from Landlord (the
“Remaining Property”).
E. The Landlord and Tenant
contracted for the preparation of a survey, a plat of which is
attached hereto as Exhibit B for the purpose of constructing
the Access Road and which plat shows the boundaries of the Access
Road Property and the Remaining Property.
F. The preferred alignment
for Tenant’s Access Road is shown on Exhibit C
attached hereto as the “Red Route”. The Red Route can
be constructed for less money and is a more direct approach to the
Property and to the NIMA Property. The Red Route requires that the
Access Road traverse certain real property that are restricted by
the Federal Emergency Management Agency (“FEMA”).
Landlord has requested that FEMA grant Landlord an easement and
other approvals permitting the Red Route to traverse these
properties.
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G. Pursuant to the
Intergovernmental Agreement, the Landlord has now entered into an
Agreement for Lease and Transfer with the United States acting by
and through the Secretary of Air Force and the Administrator of the
General Services Administration (the “United States”)
dated February 27, 2006 (the “Transfer Agreement”)
under which the Landlord has leased the NIMA Property from the
United States and pursuant to which the United States will transfer
the NIMA Property to the Landlord. Pursuant to the Transfer
Agreement and subject to certain conditions set forth therein, the
Landlord has agreed to assume responsibility for remediation of
Known Conditions (as defined in the Transfer Agreement), and the
United States has agreed to retain remedial responsibility for any
Unknown Conditions (as defined in the Transfer
Agreement).
H. The Landlord has entered
into an Interim Remediation Agreement dated February 21, 2006
(the “IRA”) with the State of Missouri acting through
the Missouri Department of Natural Resources (“MDNR”)
and the Missouri Attorney General’s office enabling but not
requiring remediation work on the Access Road Property prior to the
United States’ transfer of ownership of the NIMA Property to
the Landlord.
I. The Landlord and MDNR have
entered into an Abatement Order on Consent (“AOC”) with
respect to the NIMA Property, effective upon transfer of ownership
of the NIMA Property from the United States to the Landlord,
governing remediation of the NIMA Property after such transfer
using risk-based corrective standards and requirements of MDNR
under the Missouri Brownfields/Voluntary Cleanup
Program.
J. The Tenant and St. Louis
County, Missouri (“County”) have entered into a Road
Development Agreement (“Road Development Agreement”)
dated August 26, 2005, whereby the Tenant has made certain
agreements concerning the Access Road.
NOW, THEREFORE, in
consideration of the mutual covenants and agreements of the parties
contained herein, Landlord and Tenant agree to amend the Lease and
Development Agreement as follows:
1. Title and Survey
Condition . The period in Section 2(b) in which Landlord
has to advise Tenant whether Landlord will cure or remove matters
or exceptions relating to the title and survey, and objected to by
Tenant, shall be extended to August 31, 2006. The period in
Section 2(b) in which Tenant has to cancel the Lease and
Development Agreement because of title and or survey objections or
waive its objections shall be extended to August 31,
2006.
2. Environmental
Condition . Subject to the remediation condition in
Section 2(h), the environmental condition in Section 2(e)
of the Lease is waived. For purposes of Section 2(h) of the
Lease and Development Agreement, Landlord and Tenant confirm that
they have previously agreed that the remediation budget exclusively
for the NL property shall mean $20,000,000.
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3. Submission of Plans to
Landlord . The date in Section 4(b) by which Tenant has to
submit to Landlord for Landlord’s approval, a final site
plan, footprints, utility plans, exterior renderings, elevations
and offsite improvements plans, together with a proposed schedule
of the applicable work shall be extended to August 18,
2006.
4. Waiver . The time
set out in Section 2(d) in which Tenant has to investigate the
Property from the standpoint of soil and subsurface conditions and
the period in Section 2(g) in which Tenant has to obtain Site
Permits are hereby waived and deemed satisfied.
5. Community
Facilities. Subject to and contingent upon the Landlord
obtaining the necessary FEMA easement and approvals to construct
the Red Route, the first sentence of Section 4(h) shall be
amended to provide that the Aquatic Center shall have a minimum
budget of $5,000,000.
6. NIMA Property
Obligations . The Landlord and the Tenant agree to modify
Section 4 of the Lease and Development Agreement by the
addition of new paragraphs 4(r), 4(s), 4(t), 4(u) and 4(v) to
provide for the obligations of the Landlord and the Tenant
concerning the NIMA Property as follows:
A. “4(r).
Tenant’s NIMA Property Obligations . Tenant hereby
agrees as follows:
(i) Tenant agrees, at its
expense and in partial satisfaction of the Landlord’s
obligations under the Transfer Agreement, to remediate Known
Conditions (as that term is defined in the Transfer Agreement)
within the Access Road Property to the extent required by the MDNR
(or any other governmental authority having jurisdiction over or
which is charged with the responsibility of approving or otherwise
reviewing such remediation work) for issuance of a “no
further action letter” or equivalent closure certification,
consistent with the intended use and construction of the Access
Road thereon including any ongoing activities required by MDNR such
as groundwater monitoring within the boundaries of the Access Road
Property. Landlord shall have no obligation to perform or pay for
any investigation or Environmental Remediation of a Known Condition
on the Access Road Property, including but not limited to
professional service fees and MDNR oversight fees except as
provided in Section 4(u). Tenant shall not perform any
Environmental Remediation or otherwise initiate construction on the
Access Road Property prior to the United States’ transfer of
ownership of the NIMA Property to the Landlord without an amendment
to this Lease approved in writing by Landlord and Tenant which
shall address the procedures for proceeding under the IRA and for
which Landlord shall impose no amendment fee. Environmental
Remediation of Known Conditions that Tenant undertakes or completes
after the Landlord obtains ownership of the NIMA Property shall be
performed in accordance with the requirements of the AOC,
considering and allowing for appropriate engineering controls and
risk-based cleanup levels or standards for non-residential
development. Tenant shall also demolish, or cause to be demolished,
Building 89004 located on the Access Road
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Property in furtherance of
Tenant’s construction of the Access Road. In connection with
such demolition and Environmental Remediation work, Tenant shall
undertake (1) the removal and/or abatement of asbestos in
Building 89004; (2) the pre-demolition removal and disposal of
other environmental items of concern, including but not limited to
light tubes and/or ballasts, mercury containing thermostats,
refrigeration units, oil impacted boiler equipment, electrical
transformers, or miscellaneous containerized environmental items,
if any, from Building 89004; and (3) the disposal of debris
containing lead-based paint from the demolition of Building
89004.
(ii) Subject to the
provisions of subsection (i) of this Section 4 (r),
Tenant shall deal directly with MDNR and any other governmental
agencies with jurisdiction over any Environmental Remediation of
Known Conditions and demolition of Building 89004 on the Access
Road Property and shall keep the Landlord fully apprised of the
work being performed by Tenant. The Landlord shall have the right
to review and approve all such actions undertaken by Tenant;
provided, however, that to the extent permissible under the
Transfer Agreement and the AOC, Tenant shall not be restrained by
the Landlord regarding the details or schedule proposed by Tenant
for any such Environmental Remediation or building demolition work.
All Environmental Remediation and demolition work required of
Tenant within the boundaries of the Access Road Property shall be
performed by one or more contractors, selected by Tenant and
approved in advance in writing by the Landlord (which approval
shall not be unreasonably withheld, conditioned or delayed). Tenant
shall proceed promptly, continuously, and diligently with such
Environmental Remediation and demolition work to enable Tenant to
complete the construction of the Access Road prior to the opening
of the Project to the public for gaming, provided always that such
Environmental Remediation and demolition work shall be performed in
compliance with all applicable federal, state, and local laws,
ordinances, and regulations. In addition, any such Environmental
Remediation and demolition work shall be completed to the
satisfaction of and in accordance with the requirements of MDNR or
any other governmental agencies or authorities having jurisdiction
over or which are charged with the responsibility of approving or
reviewing the work. All such work shall be performed in a good and
safe manner, consistent with generally accepted engineering
practices. Tenant shall have no obligation to begin Environmental
Remediation of Known Conditions and/or demolition work on the
Access Road Property prior to the United States’ transfer of
ownership of the NIMA Property to the Landlord.
(iii) The Environmental
Remediation of Known Conditions Tenant hereby agrees to perform
within the Access Road Property boundaries shall be undertaken in
partial satisfaction of the Landlord’s obligations under the
Transfer Agreement. The Landlord shall have the right to review and
approve any necessary transportation and disposal documents that
may be required in connection with the transportation and disposal
of any Hazardous Substances as part of any assessment, remediation,
or demolition work performed within the boundaries of the Access
Road Property.
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(iv) Tenant and its
representatives or contractors are hereby authorized to release any
and all analytical geotechnical data and/or other site assessment
information obtained in furtherance of Tenant’s obligations
hereunder to MDNR and any other applicable regulatory agencies.
Tenant agrees to provide the Landlord with copies of all reports of
such data and information submitted to any regulatory agency.
Tenant, or its contractors, shall maintain complete and accurate
records of all such data and information for such time as required
by applicable federal and Missouri laws and regulations.
(v) Subject to ongoing
remedial activities such as groundwater monitoring within the
Access Road Property and subject to MDNR’s ongoing
enforcement authority with respect to Environmental Remediation of
the Access Road Property, Tenant’s obligation to perform
Environmental Remediation of Known Conditions on behalf of the
Landlord within the boundaries of the Access Road Property shall
terminate at such time that MDNR issues a written acknowledgment
that no further action will be required on the Access Road
Property, provided, however, that Tenant has performed and paid for
all applicable obligations of Tenant under this Amendment and in
partial satisfaction of the Landlord’s obligations under the
Transfer Agreement. Tenant shall use its best efforts to obtain a
“no further action” letter or equivalent closure
certification with respect to the Access Road Property upon
completion of remedial activities required thereon, even if
Environmental Remediation and/or demolition work on the Remaining
Property remains ongoing or otherwise is incomplete.
(vi) Tenant shall not permit
any liens to stand against the NIMA Property for work done or
materials furnished to Tenant in connection with any work or
activities authorized or required of Tenant under this Amendment.
Tenant hereby indemnifies and holds the Landlord harmless from and
against any loss, cost, damage, claim, demand or expense (including
reasonable attorney’s fees and expenses) incurred by the
Landlord on account of any negligence or intentional misconduct in
the performance of work by Tenant under this Amendment, including
without limitation any death or injury to persons or loss of or
damage to property, real or personal, or any breach of this
Amendment by Tenant. The foregoing indemnity shall survive the
expiration or any earlier termination of this Amendment. Tenant
shall cause its insurers under the Road Development Agreement to
provide certificates of insurance in favor of the Landlord and the
United States as additional named insureds under the liability
policies maintained by Tenant with respect to the work being
performed under this Amendment.
(vii) Except as provided in
Section 4(u), Tenant shall have no obligation to pay for or
perform any investigation or remediation of the Remaining Property
including, but not limited to, groundwater monitoring. In addition,
Tenant shall have no obligation to perform or pay for any
investigation or remediation of Hazardous Substances on, under, or
about any portion of the NIMA Property for which the United States
has retained liability under the Transfer Agreement, except that
Tenant, at its sole option, may investigate or
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remediate such Hazardous
Substances to accelerate the completion of construction of the
Access Road and in such event the Landlord sha
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