EXHIBIT 10.4

 

[LETTERHEAD OF ROTHBART DEVELOPMENT]

 

January 16, 2003

 

Sandra G. Kanengiser, Esq.

Irell & Manella, LLP

1800 Avenue of the Stars, Suite 900

Los Angeles, CA 90067-4276

 

Re:   Inglewood, California

Purchase Agreement: dated June 14, 2002 (“Purchase Agreement”)

Amendment to Purchase Agreement: dated November 14, 2002 (“Amendment”)

Buyer: Rothbart Development Corporation (“Rothbart”)

Seller: Pinnacle Entertainment, Inc. (“Seller”)

 

Dear Ms. Kanengiser:

 

On connection with the above-referenced transaction, this will letter will serve
to clarify the following matters that have been approved by Rothbart and/or
waived by Seller. Terms not otherwise defined herein shall have the meaning set
forth in the Purchase Agreement and/or Amendment.

 

  1.   Section 4 of Amendment. Rothbart hereby approves the matters subject to
Rothbart’s approval, set forth in Section 4 of the Amendment. Seller hereby
waives any objection to Rothbart’s failure to approve or disapprove such matters
on, or before, December 15, 2002, as required by Section 4 of the Amendment.

 

  2.   Additional Deposit. Pursuant to Section 5.a of the Amendment, Rothbart is
required to make the Additional Deposit on, or before, November 18, 2002 (by
cash or by allocation to the Letter of Credit). The Additional Deposit was
allocated to the Letter of Credit on December 6, 2002. Pinnacle hereby waives
any objection to Rothbart’s failure to make the Additional Deposit on, or
before, November 18, 2002.

 

  3.   Milestone Schedule. Pursuant to the Purchase Agreement, Rothbart is
required to make reasonable efforts to adhere to the Milestone Schedule attached
as Exhibit “J” to the Purchase Agreement. Pursuant to the Milestone Schedule,
entitlement applications were scheduled to be filed on October 16, 2002. As of
the date hereof, project entitlement applications have not been filed, and
Rothbart does not anticipate filing them before February 3, 2003. Seller hereby
waives any objection to Rothbart’s failure to file project entitlement
applications on, or before, February 3, 2003, and Seller and Rothbart hereby
agree that all of the dates set forth in the Milestone Schedule shall be
adjusted accordingly.

 

  4.   Closing Date. Sections 18.A and 18.B. of the Purchase Agreement provide
for certain termination rights for Seller, and extension rights for Rothbart. As
a result of the adjustment to the Milestone Schedule, it is also necessary to
confirm the

--------------------------------------------------------------------------------

January 16, 2003

Page 2

 

corresponding changes to Seller’s termination rights and Rothbart’s extension
rights, as set forth in Sections 18.A and 18.B. Accordingly, Seller and Rothbart
hereby agree that the second sentence of Section 18.A is hereby deleted and
replaced with the following: “Notwithstanding any other provision or contingency
in this Agreement to the contrary, including, without limitation, the preceding
sentence, if the Closing has not occurred on, or before, September 15, 2003,
Seller shall have the right, in its sole and absolute discretion, to terminate
this Agreement; provided, however, that in the event Seller so elects to
terminate the Agreement, Rothbart shall have the one-time option (in addition to
Rothbart’s Section 18.B extension rights) to continue the Agreement and extend
the Closing for up to three (3) additional months.” Seller and Rothbart further
hereby agree that the last sentence of Section 18.A is hereby deleted and
replaced with the following: “Notwithstanding any other provision of this
Agreement (including without limitation Section 15 hereof), if Rothbart validly
extends the Closing, but the Closing has not occurred on, or before, December
15, 2003, and Rothbart has not extended the Closing in accordance with Section
18.B hereof, then Seller shall have the right, in its sole and absolute
discretion, to terminate this Agreement.” Seller and Rothbart further hereby
agree that the third sentence of Section 18.B is hereby deleted and replaced
with the following: “Rothbart may exercise its initial 6-month extension right
relating to such Litigation by providing written notice to Seller of its
intention to exercise such right prior to September 15, 2003, as such date may
be extended pursuant to Section 18.A hereof.”

 

Rothbart and Seller hereby expressly reinstate the Purchase Agreement, as
amended, as the result of any automatic termination for any of the matters set
forth above, and Rothbart and Seller hereby reaffirm the Purchase Agreement, as
amended by the Amendment and the matters set forth herein.

 

If the foregoing comports to your understanding of the agreement between Seller
and Rothbart, please have Seller countersign this letter where indicated and
return Seller’s original signature to me.

 

 

Very truly yours,      

Stanley G. Rothbart, for

ROTHBART DEVELOPMENT

CORPORATION

 

PINNACLE ENTERTAINMENT, INC.

 

By:    

 

/s/    JOHN A. GODFREY            

--------------------------------------------------------------------------------

Its:

 

Senior VP, Secretary and General Counsel            

--------------------------------------------------------------------------------