EXHIBIT 10
EXECUTION COPY
February 24, 2006
President Casinos, Inc.
President Riverboat Casinos-Missouri, Inc.
0000 Xxxxx Xxxxxx X. Xxxxxxxx Xxxx.
St. Louis, MO 63102-2568
Re: Parking area known as "Cherrick Lot"
Gentlemen:
This letter is being delivered to you simultaneously with the execution and
delivery of a Riverboat Casino Sale and Purchase Agreement, dated the date
of this letter, among Pinnacle Entertainment, Inc., as "Buyer," President
Casinos, Inc., as "Seller," and President Riverboat Casinos-Missouri, Inc.,
as "Company" (the "Purchase Agreement"). Capitalized terms used in this
letter, that are not defined in this letter, have the meanings given to them
in the Purchase Agreement.
We understand that the parking lot primarily used by the Company's patrons
for the last several years is located directly across Xxxxxx X. Xxxxxxxx
Blvd. (formerly known as Wharf Street) from the Riverboat Casino, which lot
is commonly referred to as the "Cherrick Lot", and which has the following
legal description:
Parcel 1:
Lot "A" of Xxxxxxxx'x Subdivision, according to the plat thereof recorded
in Plat Book 70 page 29 of the St. Louis City Records and in City Block
17 and 18 of the City of St. Louis, State of Missouri
Parcel 2:
Lot "C" of Xxxxxxxx'x Subdivision, according to the plat thereof recorded
in Plat Book 70 page 29 of the St. Louis City Records and in City Block
18 of the City of St. Louis, State of Missouri
The Cherrick Lot is the subject of a condemnation proceeding commenced by
the Land Clearance for Redevelopment Authority for the City of St. Louis,
Missouri ("LCRA"). Buyer is building a new casino project near the Cherrick
Lot and has acquired an option from the LCRA to purchase the Cherrick Lot
after it has been taken by the LCRA in the condemnation proceeding (the
"Option Agreement"). The Company and the Unsecured Creditors' Committee in
the Company's bankruptcy case have filed a proceeding in the Bankruptcy
Court seeking, among other things, an injunction against the LCRA's
prosecution of the condemnation proceeding (the "Condemnation Injunction
Litigation"). Both the LCRA and the Buyer are defendants in the Condemnation
Injunction Litigation.
We understand that Wimar Tahoe Corporation, an affiliate of Columbia Sussex
Corporation ("Wimar"), is the current record owner of the Cherrick Lot, that
the Company has requested the Bankruptcy Court to enjoin Wimar from denying
the Company and its patrons access to the Cherrick Lot, and that the Company
and Wimar are presently involved in various discussions and negotiations
50
concerning the Company's potential purchase of the Cherrick Lot, or the
negotiation of a lease or other arrangement by which the Cherrick Lot may be
available for use in connection with the operation of the Riverboat Casino.
Seller and Company have requested that Buyer confirm its intentions with
respect to the Cherrick Lot in the event that Buyer or an affiliate of the
Buyer acquires an interest therein.
By its signature to this letter, Buyer hereby covenants and agrees as
follows:
(1) In the event that the LCRA condemns the Cherrick Lot, Buyer shall
exercise the option, pursuant to its legal rights under the Option
Agreement, to acquire title to the Cherrick Lot from the LCRA, provided the
aggregate price required to be paid as compensation for the Cherrick Lot
does not exceed Five Million Dollars ($5,000,000).
(2) If Buyer or any affiliate of Buyer acquires the Cherrick Lot, whether as
contemplated by paragraph (1) above or otherwise, Buyer or Buyer's affiliate
shall permit patrons of the Company (or any successor of the Company) the
exclusive right to park on the Cherrick Lot for a validation fee not
exceeding $1.50 per day for each vehicle parked on the Cherrick Lot, such
fee to be billed to the Company (or the Company's successor). This exclusive
validation arrangement shall extend for a term ending on the earlier of (a)
the date on which the Buyer opens its new casino project on Laclede's
Landing, or (b) December 31, 2008.
By their signatures to this letter, in consideration of Xxxxx's covenants
and agreements set forth herein, Seller and Company agree to dismiss or
withdraw the Condemnation Injunction Litigation without prejudice.
This letter is executed in connection with, and is further consideration
for, the various covenants and undertakings of the parties in the Purchase
Agreement. The undertakings of the parties in this letter shall survive any
termination of the Purchase Agreement, regardless of the reason for such
termination.
This agreement is subject to approval of the United States Bankruptcy Court
for the Eastern District of Missouri. The parties hereby agree to continue
the Condemnation Injunction Litigation pending such approval.
If this comports with your understanding, please sign all three counterparts
of this letter, and return one (1) fully signed original of this letter to
the undersigned.
Very truly yours,
Pinnacle Entertainment, Inc.
By /s/ Xxxx Xxxxxxx
----------------------------
Title President
-------------------------
Accepted and Agreed this 24th day of February, 2006:
President Casinos, Inc. President Riverboat Casinos-Missouri, Inc.
51
By /s/ Xxxxx X. Xxxxxxxx By /s/ Xxxxx X. Xxxxxxxx
---------------------------- ----------------------------
Title Senior VP & CFO Title Senior VP & CFO
------------------------- -------------------------
