LEASE AND DEVELOPMENT AGREEMENT

 

BY AND BETWEEN

 

ST. LOUIS COUNTY PORT AUTHORITY

 

AND

 

PINNACLE ENTERTAINMENT, INC.

 

DATED: August 12, 2004

 

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TABLE OF CONTENTS

 

1.

  

Effectiveness of Lease/Demise of Property

   2     

(a)    Landlord’s Ownership

   2     

(b)    Landlord’s Property Documents

   2     

(c)    Escrow Agreement, Prepaid Rent and Deposits

   3     

(d)    Letters of Credit

   4     

(e)    Tenant’s Access to Property

   4

2.

  

Commencement Date Conditions and Pre-Commencement Date Covenants

   5     

(a)    Commencement Date Conditions Generally

   5     

(b)    Title and Survey Condition

   6     

(c)    Zoning Condition

   6     

(d)    Soils and Engineering Suitability Condition

   6     

(e)    Environmental Condition

   7     

(f)     Commission Acceptance Date Condition

   7     

(g)    Site Permit Condition

   9     

(h)    Environmental Remediation Condition

   9     

(i)     Landlord’s Obligations

   12     

(j)     Acceptance of Property

   12

3.

  

Term of Lease

   12     

(a)    Commencement Date

   12     

(b)    Early Termination of Lease by Tenant

   12     

(c)    Memorandum of Commencement Date

   13

4.

  

Project Construction and Development

   13     

(a)    On-Site Project

   13     

(b)    Submission of Plans

   13     

(c)    Approval of Plans

   13     

(d)    Construction and Occupancy Permit Applications

   14     

(e)    Delivery of Property

   14     

(f)     Coordination and Inspection of the Work

   14     

(g)    The Work

   14     

(h)    Community Facilities

   15     

(i)     Commercial Facilities

   16     

(j)     Control of Work

   16     

(k)    Community Improvement District

   17     

(1)    Transportation Development District

   17     

(m)   Project Opening

   17     

(n)    Unavoidable Delays

   17     

(o)    Gaming Related Licensing

   18     

(P)    Project Access

   18     

(q)    Great Rivers Greenway

   19

5.

  

Rent

   20     

(a)    Prepaid Rent and Annual Rent

   20     

(b)    Minimum Rent

   20     

(c)    AGR

   20     

(d)    Payment of Annual Rent

   20     

(e)    Payment in Lieu of Taxes

   21

 

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6.

  

Triple Net Obligation

   22

7.

  

Landlord’s Participation Goals and Tenant’s Affirmative Action Plan

   22     

(a)    Affirmative Action Plan

   22     

(b)    Satisfaction of Landlord’s Goals

   23     

(c)    List of Qualified Participants

   23     

(d)    Implementation

   24     

(e)    Reporting

   24

8.

  

Representations and Warranties

   24

9.

  

Use of Property and Quiet Enjoyment

   26     

(a)    Designated Use

   26     

(b)    Alterations and Improvements

   26     

(c)    Compliance With Governmental Requirements

   26     

(d)    Permitted Contests

   27     

(e)    Quiet Enjoyment

   27

10.

  

Exclusivity and Restrictive Covenant

   27     

(a)    Grant of Exclusivity

   27     

(b)    Conditions of Grant

   27     

(c)    Restrictive Covenant

   28     

(d)    Right of First Refusal

   28     

(e)    Memorandum of Restrictive Covenant

   28

11.

  

Covenants Regarding Operation

   28     

(a)    Maximization of Revenues

   28     

(b)    Particular Operations

   29     

(c)    Illegality of Gaming Operations

   29     

(d)    Compliance with Rules of American Gaming Association

   29     

(e)    Landlord Inspections

   29

12.

  

Assignment and Subletting

   30     

(a)    Landlord’s Consent Generally

   30     

(b)    Procedures for Assignment and Subletting

   30     

(c)    Stated Criteria

   31     

(d)    Consideration and Expenses

   31

13.

  

Reporting Covenants

   32

14.

  

Insurance

   33     

(a)    Insurance During Work

   33     

(b)    Insurance Upon Project Opening

   34     

(c)    Quality of Coverage

   35     

(d)    Renewal of Coverage

   35     

(e)    Waiver of Subrogation

   36     

(f)     Additional Insurance

   36

15.

  

Damage and Destruction

   36     

(a)    Casualty Termination

   36     

(b)    Casualty Reconstruction

   36

16.

  

Condemnation

   37     

(a)    Definitions

   37     

(b)    Defense of Taking

   37

 

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(c)    Total Taking

   37     

(d)    Termination from Taking

   38     

(e)    Partial Taking - Termination or Arbitration

   38     

(f)     Partial Taking - Reconstruction

   38     

(g)    Temporary Taking

   39

17.

  

Non-Disturbance and Attornment

   39

18.

  

Leasehold Mortgages

   40     

(a)    Right to Leasehold Mortgage

   40     

(b)    Terms of Leasehold Mortgage

   40

19.

  

Indemnification

   42     

(a)    Indemnity Generally

   42     

(b)    Defense

   42     

(c)    Environmental Indemnity and Release

   42     

(d)    Survival of Indemnity

   43

20.

  

Right of Entry

   43

21.

  

Limitation of Claims

   43

22.

  

Attorneys’ Fees and Expenses

   43

23.

  

Late Payments

   43

24.

  

Tenant’s Right to Terminate the Lease

   44

25.

  

Default and Remedies

   44     

(a)    Tenant’s Default

   44     

(b)    Cure or Remedies

   45     

(c)    Surrender of Property

   45     

(d)    Reletting of Property

   46     

(e)    Direct Damages

   46     

(f)     Additional Damages

   46     

(g)    Waiver of Automatic Stay

   47     

(h)    Waiver of Jury Trial

   47     

(i)     Additional Remedies

   47     

(j)     Landlord’s Default

   47

26.

  

Remedies Cumulative

   48

27.

  

Surrender of Property

   48

28.

  

Cure of Tenant’s Default

   48

29.

  

Notices

   49

30.

  

Arbitration of Certain Disputes

   49     

(a)    Arbitration of Specific Disputes

   49     

(b)    Arbitration Procedures

   49

31.

  

Estoppels

   50

32.

  

Relationship of Parties

   50

33.

  

No Broker

   50

34.

  

Conflict of Interest

   50

35.

  

Entire Lease

   51

36.

  

Survival of Covenants

   51

37.

  

Binding Effect

   51

38.

  

Time of the Essence

   51

39.

  

Venue

   51

 

4

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LEASE AND DEVELOPMENT AGREEMENT

 

THIS LEASE AND DEVELOPMENT AGREEMENT (the “Lease”) is made and entered into as
of this                      day of     , 2004 (the “Effective Date”), by and
between the ST. LOUIS COUNTY PORT AUTHORITY, a public body corporate and politic
of the State of Missouri (“Landlord”) and PINNACLE ENTERTAINMENT, INC., a Nevada
corporation (“Tenant”);

 

R E C I T A L S

 

A. Landlord has been created as a public body corporate and politic duly
organized and existing pursuant to Chapter 68 of the Revised Statutes of
Missouri and is charged with the responsibility of developing the riverfront
area of the unincorporated portion of St. Louis County. In connection with such
duties and responsibilities, to promote the general welfare, to encourage
capital investment in St. Louis County generally, Landlord solicited the
submission of proposals for the development and operation of a gaming facility
and related development.

 

B. Landlord is the owner, subject to the Exceptions (defined herein) of an
approximate 80 acre tract of Land, together with the improvements thereon,
located in the Lemay area of St. Louis County (“Landlord’s Property”), as
described on Exhibit A attached hereto.

 

C. In response to Landlord’s request for development proposals, Tenant submitted
to Landlord a certain Project Proposal (the “Project Proposal”) for the
construction and development of (1) a minimum 90,000 square foot “indoor
floating” gaming facility to be located on an approximate 56 acre portion of
Landlord’s Property (the “Property”), configured generally as depicted in the
preliminary site plan (the “Preliminary Site Plan”) shown on Exhibit B or as
otherwise agreed to by Landlord and Tenant pursuant to the provisions of this
Lease (the “Gaming Facilities”), (2) approximately 280,000 square feet of
retail, entertainment and/or commercial facilities to be located on the Property
(the “Commercial Facilities”), (3) additional community and recreational
facilities to be located on the remaining 24 acre tract of Landlord’s Property
(the “Park Property”) configured generally as depicted in the Preliminary Site
Plan shown on Exhibit B or in the Lemay area (the “Community Facilities”), and
(4) an access route to the Property (the “Project Roadway”), all as hereinafter
described or provided for, together with the further commitments and
undertakings described herein and aggregating a total investment of not less
than $300,000,000 (collectively, the “Project”).

 

D. Tenant agreed to apply to the Missouri Gaming Commission (the “Commission”)
for one or more licenses, as necessary, to operate the Gaming Facilities
(including the Casino, as hereinafter defined) at and from the Property (“Gaming
Licensure”), to pay certain rentals to Landlord in consideration of the
opportunity to develop and operate the Gaming Facilities and the Commercial
Facilities, and to designate the County as the “home dock” for the On-Site
Project, all as hereinafter set forth.

 

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E. Upon satisfaction of certain conditions described herein and receipt of the
required approvals from the Commission, Tenant has agreed, at Tenant’s sole cost
and expense, to construct, develop and operate the Gaming Facilities and the
Commercial Facilities (together, including the required Project Roadway, the
“On-Site Project”) and to construct and develop or cause the construction and
development of the Community Facilities, all in accordance with the terms and
conditions of this Lease.

 

F. In order to promote the economic development of the Lemay area and the
County, and in consideration of the Project Proposal, the financial incentives
to Landlord, the special and unique qualifications of the Tenant in the
development and operation elsewhere of gaming projects, and the covenants and
promises of the Tenant under this Lease, Landlord approved the Project Proposal,
and the St. Louis County Council (the “Council”) enacted Ordinance Number
             that approves this Lease, and passed Ordinance Number             
requesting that the Missouri Gaming Commission (the “Commission”) select such
proposal for its priority investigation.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements of the
parties contained herein, Landlord and Tenant agree as follows:

 

1. Effectiveness of Lease/Demise of Property. This Lease shall be deemed
effective and binding on the parties as of the Effective Date subject to the
satisfaction of the conditions set forth in Section 2 hereof and the occurrence
of the Commencement Date pursuant to Section 3 hereof. Subject to the terms and
conditions of this Lease, Landlord hereby demises and leases to Tenant, and
Tenant hereby leases and takes from Landlord, the Property, for the Term (as
hereinafter defined).

 

(a) Landlord’s Ownership. Landlord represents and warrants to Tenant that
Landlord is the owner of the Landlord Property, subject to the following matters
(collectively, the “Exceptions”): (i) covenants, restrictions, easements, liens,
encumbrances and any other matters of record affecting the Property; (ii)
present and future federal, state and local zoning and land use laws, ordinances
and restrictions affecting the Landlord Property or the use thereof; (iii) any
state of facts which an accurate survey or an inspection of the Landlord
Property and the Mississippi River would show; (iv) the Lease dated April 1,
2002 between Landlord and Jefferson Barracks Marine Service, Inc. (v) special
assessments now or hereafter becoming a lien against the Landlord Property; and
(vi) general property taxes and assessments for the current and subsequent tax
fiscal years affecting the Landlord Property.

 

(b) Landlord’s Property Documents. Except as expressly provided in this Lease,
Landlord makes no representation and provides no warranty to Tenant of any kind
whatsoever regarding (i) the existence or nature of any Exceptions, (ii) the
condition of the Landlord Property or the Mississippi River (including, without
limitation, any environmental matters), (iii) the suitability of the Landlord
Property for any aspect of the Project, or (iv) the feasibility of Tenant’s
development and operation of the Project on, at or from the Landlord Property.
Tenant acknowledges receipt from Landlord of the following: (i) an owner’s
policy of title insurance dated October 9, 1987 relating to the Landlord
Property and issued by Ticor Title Insurance Company; (ii) a survey dated July

 

2

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7, 1987 relating to the Landlord Property and prepared by Pitzman’s & Co.
Surveyors and Engineers, (iii) certain environmental reports and studies
conducted in respect of the Landlord Property dated January 30, 1981, March 12,
1981, January 1986 and June 1986, respectively, and prepared by Envirodyne
Engineers, Inc., and (iv) Phase I Environmental Site Assessment 30 Acres-NL
Industries Site dated August 8, 1995 prepared by Thompson Engineering Testing,
Inc., Phase II Subsurface Assessment dated October 20, 1995 prepared by Thompson
Engineering Testing, Inc., Final Report Demolition and Select Environmental
Remediation dated December 27, 2001, Site Investigation Report dated September
7, 2000 prepared by Shannon & Wilson, Inc., PCB Investigation Report dated
October 25, 2001 prepared by Shannon & Wilson, Inc., PCB 6 Investigation Report
dated May 22, 2003 prepared by Shannon and Wilson, Inc., and miscellaneous
correspondence as provided by Shannon and Wilson in the Report Summary dated
March 8, 2004 delivered on compact disc. In addition, promptly after the
Effective Date, Landlord shall make reasonable efforts to locate all documents
in its possession, custody or control relating to the Property and to make same
available to Tenant for Tenant’s examination (and copying, at Tenant’s sole
expense), at Landlord’s offices during Landlord’s regular office hours, subject
to the same understandings and disclaimers as govern the delivery of the title
policy, survey and environmental reports described in Section 2(a), and subject
to the further understanding that Landlord makes no representation or warranty
that any documents which are provided Tenant constitute the only documents in
Landlord’s possession or control relating to the Landlord Property. Tenant
acknowledges that all materials delivered to Tenant by Landlord or any
department, agency or office of the County are provided solely for informational
purposes to assist Tenant in Tenant’s due diligence, that the same do not
constitute representations or warranties by Landlord or the County, and that
Tenant shall rely on Tenant’s own evaluations, inspections and testing of the
Landlord Property in determining the suitability of the Landlord Property and
the feasibility of the Project.

 

(c) Escrow Agreement, Prepaid Rent and Deposits. Landlord and Tenant have
established the following escrow accounts (the “Escrow”) with an escrow agent
mutually acceptable to Landlord and Tenant (the “Escrow Agent”) pursuant to an
agreement dated as of the date hereof by and among Landlord, Tenant and the
Escrow Agent (the “Escrow Agreement”):

 

(i) Not later than one Business Day following the Effective Date, Tenant shall
deposit the amount of One Million Five Hundred Thousand Dollars ($1,500,000) as
prepaid rent (the “Prepaid Rent”) in the Escrow which shall be held in trust by
the Escrow Agent in accordance with the Escrow Agreement and the provisions
hereof. The Escrow Agent shall release the Prepaid Rent to the Landlord on the
Commission Acceptance Date (as hereafter defined in Section 2(f)(iii)); provided
the Title and Survey Condition and the Zoning Condition (as defined in Section
2(a) below) have been satisfied or waived. The Prepaid Rent shall be deemed
earned in full by Landlord as of the Commission Acceptance Date (provided the
Title and Survey Condition and the Zoning Condition have been satisfied or
waived) but shall be applied to and credited against Tenant’s rental obligations
under Section 5 if the Commencement Date shall occur.

 

3

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(ii) Not later than one Business Day following the Effective Date, Tenant shall
deliver to the Escrow Agent two (2) deposits, one in the amount of Two Hundred
Fifty Thousand Dollars ($250,000) (the “First Deposit”) and one in the amount of
Seven Hundred Fifty Thousand Dollars ($750,000) (the “Second Deposit”). The
Prepaid Rent, the First Deposit and the Second Deposit shall be released by the
Escrow Agent to Tenant if Tenant shall timely elect to cancel or terminate this
Lease due to a failure of the Title and Survey Condition pursuant to Section
2(b), or a failure of the Zoning Condition pursuant to . Section 2(c). The
Prepaid Rent, and the Second Deposit shall be released by the Escrow Agent to
the Tenant if the Tenant shall timely elect to cancel or terminate this Lease
due to a failure of the Suitability Condition pursuant to Section 2(d) and the
First Deposit shall be released to the Landlord. If Tenant shall fail to timely
cancel or terminate this Lease in accordance with the provisions of Section
2(b), 2(c) or 2(d), then the Escrow Agent shall release the First Deposit to
Landlord, and the Escrow Agent shall continue to hold the Prepaid Rent and the
Second Deposit, subject to the provisions of subsection (i) above and subsection
(iii) below. The First Deposit shall be deemed earned in full by Landlord upon
receipt but shall be applied to and credited against Tenant’s rental obligations
under Section 5 if the Commencement Date shall occur.

 

(iii) The Second Deposit shall be released by the Escrow Agent to Tenant if
Tenant shall timely elect to cancel or terminate this Lease due to a failure of
the Environmental Condition in accordance with the provisions of Section 2(e) or
a failure of the Suitability Condition pursuant to Section 2(d). If Tenant shall
fail to timely cancel or terminate this Lease in accordance with the provisions
of Section 2(d) or 2(e), the Escrow Agent shall deliver the Second Deposit to
Landlord as consideration for Tenant’s continuing right to terminate this Lease
in the event of a failure of the Site Permit Condition pursuant to Section 2(g)
or of the Remediation Condition pursuant to Section 2(h). The Second Deposit
shall be deemed earned in full by Landlord upon receipt but shall be applied to
and credited against Tenant’s rental obligations under Section 5 if the
Commencement Date shall occur.

 

(d) Letters of Credit. Each of the Prepaid Rent, the First Deposit and the
Second Deposit may be delivered to the Escrow Agent in the form of a standby
letter of credit (a “Letter of Credit”) issued by a national bank which shall
state that such letter of credit may be drawn upon by the Escrow Agent (and the
cash realized from such draw applied as provided in this Lease) upon delivery to
the Escrow Agent of a certificate signed by an official of the Landlord stating
that all conditions to Landlord’s entitlement to the sums to be drawn thereon
set forth in this Lease have been satisfied (a “Draw Certificate”). Upon Escrow
Agent’s receipt of the Draw Certificate or in the event that the applicable
Letter of Credit is not renewed prior to its expiration, the applicable Letter
of Credit shall be drawn down and the cash realized shall be delivered to the
Landlord.

 

(e) Tenant’s Access to Property. Tenant shall have access to the Property, and
the Park Property, if applicable, at any and all times after the Effective Date
for the purposes of enabling Tenant to satisfy the Conditions (defined in
Section 2

 

4

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hereof), including, but not limited to, title work, surveying, environmental
testing, evaluation and inspections of the Property for determining the
feasibility of the construction and operation of the On-Site Project, which
inspections shall include, but shall not be limited to soil tests and subsurface
borings, and for environmental remediation (the “Predevelopment Work”). Tenant
hereby indemnifies and holds Landlord harmless from and against any and all
loss, cost, damage, claim, demand or expense resulting from any death or injury
to persons or loss of or damage to property, real or personal, or the filing of
any lien for labor or materials or any other claim whatsoever, arising out of or
in connection with the Predevelopment Work performed on the Property by Tenant,
its employees, agents, contractors and invitees, and such indemnity and hold
harmless shall survive any termination of this Lease for whatever reason. If
this Lease is canceled or terminated prior to the Commencement Date (defined in
Section 3 hereof), Landlord shall have the right by delivery of written notice
to Tenant, to require Tenant, at Tenant’s sole cost and expense, to demolish and
remove any and all improvements theretofore constructed on the Property by
Tenant.

 

2. Commencement Date Conditions and Pre-Commencement Date Covenants.

 

(a) Commencement Date Conditions Generally. Tenant shall have the respective
periods set forth below following the Effective Date within which to satisfy or
waive certain conditions subsequent to the continuing effectiveness of this
Lease (individually, a “Condition” and collectively, the “Conditions”). The
Conditions relate to (i) Tenant’s approval of the quality of Landlord’s title to
the Property (the “Title and Survey Condition”), (ii) the occurrence of the
rezoning of the Property required by Tenant (the “Zoning Condition”), (iii)
Tenant’s initial determination that the cost to remediate environmental
conditions affecting Landlord’s Property in accordance with the requirements of
this Lease (the “Environmental Remediation”) and elsewhere in conjunction with
road development will not exceed the amount established for such work in
Tenant’s Project budget (the “Remediation Budget”) provided to and approved by
Landlord (the “Environmental Condition”), (iv) Tenant’s determination that it
has no other objections to the soils and subsurface conditions of the Property
from the standpoint of design and Project engineering within the overall limits
of the Project budget for the proposed On-Site Project (“Soils and Engineering
Suitability Condition”), (v) Tenant’s determination after commencement of the
Environmental Remediation that the Remediation Budget will not be exceeded (the
“Remediation Condition”), (vi) the occurrence of the Commission Acceptance Date
(the “Commission Acceptance Date Condition”); and (vii) Tenant’s receipt of all
permits required to construct and develop the On-Site Project on terms and
conditions which are acceptable to Tenant, including without limitation all
governmental permits and approvals required to construct and develop the
Required Roadway along either of the two optional routes depicted in Exhibit D
attached hereto (the “Site Permit Condition”) (collectively; the “Conditions”).
In the event that Tenant fails to provide Landlord with timely notice with
respect to whether or not a Condition has been satisfied or waived, such
Condition shall be deemed to have been waived. Each of the Conditions shall also
constitute a covenant on the part of Tenant to utilize its commercially
reasonable efforts to satisfy such Condition, to the extent satisfaction of such
Condition is within the control of the Tenant.

 

5

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(b) Title and Survey Condition. On or before one hundred twenty (120) days after
the Effective Date, Tenant shall obtain, at Tenant’s sole risk, cost and
expense, copies of all Exceptions appearing in the commitment for a leasehold
policy of title insurance issued to Tenant on the Effective Date and a survey
and resubdivision plat to be prepared by a licensed Missouri surveyor which will
show the Property and the Park Property in accordance with the Preliminary Site
Plan and the legal descriptions thereto and which shall become Exhibit F to this
Lease. Landlord agrees to cooperate fully with Tenant in connection with
Tenant’s preparation of the legal descriptions and designation of easements
affecting the Park Property as reflected on the resubdivision plat, and Landlord
further agrees not to unreasonably withhold its approval with regard to such
matters. In the event Tenant in its discretion objects to any matter contained
in the commitment, to any of the Exceptions or to any matter disclosed on the
survey, Tenant shall so advise Landlord prior to the expiration of such 120 day
period, whereupon Landlord shall have 10 days within which to advise Tenant
whether Landlord will cure or remove the matter or Exception objected to by
Tenant. If Landlord fails to timely notify Tenant that it will cure or remove
the matter or Exception objected to by Tenant, or elects not to do so, Tenant
shall have the option, if exercised by delivery of written notice to Landlord
not later than 20 days after expiration of Landlord’s 10 day response period, to
cancel this Lease without further obligation or liability on the part of either
party to the other, subject to the provisions of Section l(c). All matters and
Exceptions which are not objected to, or which are waived, by Tenant shall be
deemed “Permitted Exceptions” for all purposes under this Lease. If Tenant fails
to cancel this Lease within such 20 day period, Tenant’s objection to such
Exception or matter shall be deemed waived.

 

(c) Zoning Condition. On or before sixty (60) days after the Effective Date,
Landlord shall apply to the County Planning Commission for rezoning of the
Property to the “C-8” classification, so as to enable Tenant to construct and
operate the On-Site Project as contemplated by Tenant in the Project Proposal at
and from the Property; provided, however that Landlord shall not be obligated to
incur any out-of-pocket or third-party costs and expenses in connection with
such application. Tenant shall provide to Landlord such information and
documentation as may be necessary and appropriate to enable Landlord to apply
for the rezoning. In the event the Property is not so rezoned (or, if so
rezoned, in the event the conditions of such rezoning are not acceptable to
Tenant in its reasonable discretion) pursuant to County ordinance within 180
days after the Effective Date (which deadline may be extended upon mutual
agreement of the parties), Tenant shall have the option, if exercised by
delivery of written notice to the other party not later than the expiration of
such 180 period, to cancel this Lease without further obligation or liability on
the part of either party to the other, subject to the provisions of Section
l(c). Tenant shall be responsible for providing the County Planning Commission
with all information required of Tenant by the County Planning Commission.

 

(d) Soils and Engineering Suitability Condition. Tenant shall have a period of
one hundred twenty days to otherwise investigate the property and to determine
that it has no other objections to the suitability of the Property from the
standpoint of soil and subsurface conditions for engineering and design within
the overall limits of the Project budget. If within 120 days of the Effective
Date, Tenant in its discretion objects

 

6

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to the suitability of the Property on account of said conditions (the
“Suitability Condition”), Tenant shall so advise Landlord prior to the
expiration of such 120 day period and said Lease shall be canceled without
further obligation or liability on the part of either party to the other,
subject to the provisions of Section l(c). If Tenant fails to cancel this Lease
within such 120 day period, the Suitability Condition shall be deemed satisfied.

 

(e) Environmental Condition. On or before one hundred eighty (180) days after
the Effective Date, Tenant shall conduct, at Tenant’s sole risk, cost and
expense, such inspections, investigations, evaluations, testing, and sampling of
Landlord’s Property as Tenant may require in order to determine whether and to
what extent any hazardous waste, pollutant, toxic pollutant, hazardous
substance, extremely hazardous substance, hazardous material, toxic substance,
infectious waste, radioactive material, solid waste or similar material or
substance, including but not limited to waste oil, petroleum, natural gas,
and/or their components and distillates, polychlorinated biphenyls, and/or
asbestos containing materials, exist or have been released on or from Landlord’s
Property (collectively, “Hazardous Substances”), and the estimated cost to
Tenant to remediate such Hazardous Substances to a level or levels sufficient to
meet the applicable requirements of the Missouri Department of Natural Resources
(or any other governmental authority having jurisdiction over or which are
charged with the responsibility of approving or otherwise reviewing such
remediation work) for issuance of a “no further action letter” or equivalent
closure certification considering and allowing for appropriate engineering
controls and applicable cleanup levels (“Environmental Remediation”). It is
understood and agreed that the environmental inspections to be conducted by
Tenant may include tests for among other things, oil drums or barrels, or other
refuse, underground storage tanks, oil substances, printer’s ink, or chemicals
in the ground, or on or within Landlord’s Property, or within the water,
asbestos, and other waste piles on or below the surface of Landlord’s Property.
In the event a qualified environmental contractor engaged by Tenant and approved
in writing by Landlord shall certify to Tenant and Landlord that the cost of the
Environmental Remediation will likely exceed the Remediation Budget, Tenant
shall have the right to terminate this Lease by delivery to Landlord of written
notice of such election within 30 days following the issuance of such
certificate, and neither party shall have any further obligation or liability to
the other, subject to the provisions of Section l(c). If Tenant fails to cancel
this Lease within such 30 day period, Tenant shall be deemed to have waived the
Environmental Condition and, subject only to Tenant’s satisfaction or waiver of
the Remediation Condition, to have accepted the environmental condition of
Landlord’s Property.

 

(f) Commission Acceptance Date Condition. The continuing effectiveness of this
Lease shall be subject to satisfaction of the Commission Acceptance Date
Condition as described below:

 

(i) Not later than thirty (30) days following the Effective Date, Tenant shall
apply to the Commission for a license permitting Tenant to construct, develop
and operate the Casino and the balance of the On-Site Project as contemplated in
this Lease (“Gaming Licensure”). Tenant shall use its best efforts to obtain
Gaming Licensure, and Landlord shall fully and actively support,

 

7

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endorse and diligently assist Tenant in such effort, provided Landlord shall not
be obligated to incur any out-of-pocket or third party expenses for Tenant’s
benefit or pay any monies to Tenant or any other party.

 

(ii) Tenant agrees to deliver to Landlord a copy of the transmittal
correspondence for Tenant’s application to the Commission and a copy of each and
every material notice delivered to or received from the Commission by Tenant. As
used in this subsection (ii), a “material notice” shall be any notice
substantively bearing upon the availability of Gaming Licensure or affecting the
occurrence of the Commencement Date or Project Opening. Except as provided in
subsection (iii) below, Tenant shall not withdraw Tenant’s application for
Gaming Licensure prior to any termination of this Lease.

 

(iii) The date following when the Investigation Date (as hereafter defined) has
occurred; and when the Commission has approved the Tenant’s Preliminary Site
Plan, “Permanent Docking Plan,” compliance with the Commission’s rules on
riverboat gaming history and location within 1000 feet of the main channel of
the Mississippi River shall have occurred; and Landlord shall have accepted
Tenant’s Preliminary Site Plan, is hereinafter referred to as the “Commission
Acceptance Date.” For purposes hereof, the term “Investigation Date” shall mean
the date the Tenant is selected for a suitability investigation by the
Commission. Landlord or Tenant shall have the right to terminate this Lease if,
notwithstanding Tenant’s timely application for and diligent pursuit of Gaming
Licensure, (A) the Commission Acceptance Date has not occurred on or before the
expiration of the fourteen (14) month period commencing on the Effective Date
(the “Acceptance Date Deadline”); provided however, that if Tenant has timely
applied for and diligently pursued Gaming Licensure, Tenant may at its option
extend the Acceptance Date Deadline by an additional 12 month period by
providing written notice to Landlord, or (B) Tenant reasonably determines, based
on communications with or information received from the Commission staff, that
the Commission will not commence the Investigation before the Acceptance Date
Deadline. In no event will the Commission Acceptance Date be extended on account
of claimed Unavoidable Delays pursuant to Section 4(n).

 

(iv) Landlord acknowledges that Commission approval of the Preliminary Site Plan
attached hereto as Exhibit B shall constitute a fundamental requirement for
Gaming Licensure. Accordingly, the parties agree to cooperate with each other in
good faith to address and implement such changes to the Preliminary Site Plan
(including roadway access) as may be required by the Commission as a condition
to Gaming Licensure, and each party agrees not to unreasonably withhold or
condition its consent to any such required change.

 

(v) If Landlord or Tenant desire to cancel or terminate the Lease in accordance
with the provisions of subsection (iii) above, then the party desiring to so
cancel the Lease shall so advise the other party within 30 days of the
expiration of the period described in subsection (iii) above and said Lease
shall be canceled without further obligation or liability on the part of either
party

 

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to the other, subject to the provisions of Section l(c). If Landlord or Tenant
fails to cancel this Lease within such 30 day period, the Commission Acceptance
Date Condition shall be deemed satisfied.

 

(g) Site Permit Condition. As used in this Lease, the term “Site Permits” shall
mean all land use, construction and operational permits or licenses which the
U.S. Army Corps of Engineers (the “Corps”) or any other governmental entity
having jurisdiction over Landlord’s Property deems necessary in order for Tenant
to construct and operate the On-Site Project (including roadway construction) in
accordance with the requirements of this Lease; provided, however, that Site
Permits shall not include permits which are to be issued following the
commencement of construction of the On-Site Project, such as, by way of example,
plumbing, electrical and similar type permits and occupancy permits, all of
which shall be obtained following commencement of construction in due course by
Tenant. Similarly, the Gaming License issued following completion of
construction and readiness for public opening of the Casino shall not be deemed
a Site Permit. Tenant shall make application for all Site Permits at the
earliest practical opportunity. Tenant shall use its best efforts to obtain the
Site Permits, and Landlord shall fully and actively support, endorse and
diligently assist Tenant in all such efforts, provided Landlord shall not be
obligated to incur any out-of-pocket or third party expenses for Tenant’s
benefit or pay any monies to Tenant or any third party. Tenant agrees to keep
Landlord apprised as to Tenant’s progress in securing Site Permits and to
deliver to Landlord a copy of each and every material notice delivered to or
received by Tenant. As used in this subsection (g), a “material notice” shall be
any notice substantively bearing upon the availability of the Site Permits or
affecting Project Opening. Tenant shall not withdraw Tenant’s application for
any of the Site Permits prior to any termination of this Lease. If the Site
Permit Condition has not been satisfied or waived by Tenant within six (6)
months following the Commission Acceptance Date, which date may be extended by
Tenant on account of Unavoidable Delay delays pursuant to Section 4(n) for a
period not to exceed the later to occur of twenty-four (24) months following the
Effective Date or eighteen (18) months following the Commission Acceptance Date,
Tenant shall have the right to terminate this Lease by delivery of written
notice of such election to Landlord; provided, however, that if Tenant shall
terminate this Lease pursuant to this subsection (g) after Tenant has commenced
the construction of improvements on Landlord’s Property, Landlord shall have the
right to require Tenant, as a condition to termination of this Lease, to
demolish and remove all such improvements, and in any event the indemnity and
hold harmless provisions of Section l(e) shall remain in full force and effect.

 

(h) Environmental Remediation Condition. Not later than sixty (60) days next
following the later to occur of (1) the Commission Acceptance Date and (2) the
date that Tenant has satisfied or waived all Conditions other than the
Remediation Condition, Tenant shall perform the following obligations:

 

(i) Tenant shall reimburse Landlord for the full amount of all HUD Empowerment
Zone funds previously expended by Landlord in the amount of up to $500,000 in
conjunction with environmental studies and remediation performed on Landlord’s
Property as a result of the release of Hazardous

 

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Substances on or from Landlord’s Property and for which Landlord is required to
reimburse HUD for all amounts (“Empowerment Zone Reimbursement”). Landlord
presently holds an additional $1,000,000 in Empowerment Zone funds and Tenant
shall reimburse all or any portion of said funds expended by Landlord in the
environmental remediation of Landlord’s Property, concurrently with payment of
the Empowerment Zone Reimbursement, provided, however, (1) Landlord shall use
commercially reasonable efforts to hold such funds until Tenant is able to
commence the Environmental Remediation and to consult with Tenant prior to using
such funds to determine whether use of such funds is consistent with Tenant’s
plans for the Project; (2) if Landlord determines that it is obligated to refund
said $1,000,000 or perform environmental remediation prior to the date Tenant is
required to commence the Environmental Remediation, and if Landlord elects to
spend all or any portion of said funds toward environmental remediation,
Landlord agrees to first provide Tenant with a remediation work plan for
Tenant’s review and approval, which approval shall not be unreasonably withheld,
conditioned or delayed, for the purpose of assuring that Landlord’s expenditures
will be consistent with Tenant’s objectives and obligations in performing the
Environmental Remediation, such that Tenant will not lose any material benefit
in reimbursing Landlord for the cost of Landlord’s work pursuant to this
subsection (h)(i); and (3), if and to the extent Landlord has not theretofore
applied the $1,000,000 as provided in clause (2), at such time as Tenant shall
have spent $1,000,000 in site remediation costs, or such lesser amount as
Landlord shall have spent under clause (2) (exclusive of administrative costs,
consulting fees and the like), Landlord shall refund to HUD said $1,000,000, or
the unspent balance of said $1,000,000, as applicable. The Empowerment Zone
Reimbursement and all other costs to perform Environmental Remediation,
including all subsequent reimbursement of Empowerment Zone Funds pursuant to
this subsection (h)(i), shall be fully credited against the $300,000,000
aggregate investment requirement and the Remediation Budget Landlord shall
assign to Tenant all of Landlord’s rights to obtain cost recovery, indemnity, or
other reimbursement for any such funds paid by Tenant under this paragraph from
any insurance company, state or federal Brownfields program, the Missouri
Petroleum Storage Tank Insurance Fund, or other third party, including but not
limited to NL Industries, and shall cooperate with and assist Tenant in
obtaining such cost recovery, indemnity, or other reimbursement; provided,
however, (1) Tenant shall indemnify and hold Landlord harmless from and against
any loss, cost, damage, claim, demand or expense, including reasonable
attorneys’ fees and expenses, arising out of Tenant’s pursuit of said claim or
its defense of any counterclaim; (2) if Tenant’s recovery pursuant to such
assignment shall exceed the amounts expended by Tenant on Environmental
Remediation and Tenant’s related out-of-pocket litigation costs, including
attorneys’ and third party experts’ fees and expenses, the excess funds shall be
divided equally between Landlord and Tenant; and (3), upon any termination of
this Lease occurring prior to the end of the tenth (10th) Lease Year, Tenant
shall re-assign all claims to Landlord at Landlord’s request and Tenant shall
have no further right to share in any damage or settlement award or claim.

 

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(ii) Tenant shall submit to Landlord for Landlord’s approval, its plan for
remediation of Landlord’s Property (the “Remediation Plan”) and a proposed
schedule of the Environmental Remediation of Landlord’s Property (the
“Remediation Schedule”). Landlord’s approval of the Remediation Plan shall not
be unreasonably withheld or delayed. In all events, Landlord shall approve or
disapprove of the Remediation Plan within 30 business days after Landlord’s
receipt of same, and any disapproval shall be specific as to the reasons. Tenant
shall be given adequate time and opportunity to correct such matters which
Landlord has identified as the basis for such disapproval. If Landlord does not
approve or disapprove such Remediation Plan within 30 business days after
Tenant’s submission, then such Remediation Plan shall be deemed approved for all
purposes under this Lease. Landlord’s approval of the Remediation Plan shall not
be deemed to constitute acceptance by Landlord of any liability in connection
with the Remediation Plan. Provided this Lease shall remain in full force and
effect, Tenant shall have the right to pursue cost recovery, indemnity or other
reimbursement from third parties for any environmental assessment or remediation
work performed by Tenant as contemplated in this Lease. Landlord hereby assigns
to Tenant all of Landlord’s rights to obtain such cost recovery, indemnity, or
other reimbursement from any insurance company, state or federal Brownfields
program, the Missouri Petroleum Storage Tank Insurance Fund, or other third
party, including but not limited to NL Industries, and shall cooperate with and
assist Tenant in obtaining such cost recovery, indemnity or other reimbursement,
subject to the three (3) provisos set forth at the end of subsection (h)(i)
above. If Tenant has commenced Environmental Remediation, any delays in
completion of Environmental Remediation beyond the completion date projected in
the Remediation Schedule shall be allowed on account of Unavoidable Delay
properly claimed and documented by Tenant, and any such Unavoidable Delay shall
allow Tenant to delay commencement of construction of improvements pursuant to
Section 3(a).

 

(iii) In the event that after commencement of Environmental Remediation, Tenant
shall discover that the Remediation Budget will likely be exceeded, Tenant shall
have the right to terminate this Lease by delivery of written notice to
Landlord; provided, however, (1) Tenant shall obtain the same certification
required under Section 2(e), and (2) Landlord shall have received the Second
Deposit from the Escrow Agent. If Tenant shall terminate this Lease pursuant to
this subsection (iii), the indemnity and hold harmless provisions of Section
l(e) shall remain in full force and effect, and, if any part of Landlord’s
Property shall have been excavated but not remediated prior to such termination,
Tenant shall complete the Environmental Remediation applicable to such excavated
area or fill the excavated area in accordance with applicable Governmental
Requirements.

 

(iv) Landlord agrees to enter into any agreements and record any restrictive
covenants, easements or other instruments reasonably necessary or appropriate to
establish institutional controls as may be reasonably required by the Missouri
Department of Natural Resources to achieve final site closure under the

 

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Voluntary Cleanup Program or to allow Tenant to enter into such agreements and
record such institutional controls will be compatible, and will not prohibit or
substantially interfere, with the development, construction, and/or use of
Landlord’s Property as intended by Tenant and shall be in a form generally
acceptable to the Tenant and Landlord.

 

(v) In the event Tenant elects to obtain environmental insurance, Landlord shall
cooperate with Tenant in it obtaining such insurance, and Landlord shall be an
additional named insured with respect to such insurance, as its interest may
appear.

 

(i) Landlord’s Obligations. In connection with Tenant’s review of matters
relating to the Conditions, Landlord agrees to cooperate with Tenant and to use
its best efforts to cure any objection raised by Tenant which Landlord, as owner
of the Property, has the ability to cure; provided, however, such “best efforts”
shall not be deemed to require Landlord to undertake litigation or to pay monies
to third parties or to Tenant. In electing to cure any objection raised by
Tenant, Landlord shall advise Tenant concerning the manner and timing of such
cure, and Tenant shall have the right to approve or disapprove such matters.
Failure of the parties to agree as to the manner or timing of the cure offered
by Landlord shall have the same effect as though Landlord had not offered to
cure such objection.

 

(j) Acceptance of Property. Tenant’s satisfaction or waiver of each of the
Conditions shall constitute Tenant’s unconditional acceptance of the Property
and Landlord’s substantial and material compliance with any commitment made by
Landlord to satisfy any objection raised by Tenant. From and after the Effective
Date, Landlord shall not subject the Property to any liens or encumbrances not
expressly permitted by this Lease without the prior written consent of Tenant.

 

3. Term of Lease.

 

(a) Commencement Date. The term of this Lease (the “Term”) shall commence on the
date any part of the Casino is open to the public for gaming (“Project Opening”
or the “Commencement Date”). The Commencement Date shall occur, subject to the
terms of this Lease, including without limitation Section 2(h)(ii), not later
than 36 months following the later of the Commission Acceptance Date or that
date when the Tenant has received all of the Site Permits. The Term shall expire
on the 99th anniversary of the day prior to the Commencement Date.

 

(b) Early Termination of Lease by Tenant. Except as provided in Section 24, this
Lease may be terminated by Tenant solely upon (i) the repeal or invalidation of
the law permitting gaming in the State of Missouri and consequent cessation of
Tenant’s business at the Property, (ii) the occurrence of a condemnation in
accordance with the applicable provisions of Section 15, or (iii) if there is an
enactment by a governmental authority of taxes or similar impositions so
significant that the operation of the casino business at the Gaming Facilities
is no longer profitable based on Missouri riverboat gaming industry expected
rates of return for the invested assets in

 

12

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question as substantiated by a financial analysis performed by an independent
third party acceptable to both the Landlord and the Tenant.

 

(c) Memorandum of Commencement Date. Landlord and Tenant shall each execute a
memorandum prepared by Landlord and reasonably acceptable to Tenant confirming
the Commencement Date of this Lease, such memorandum to become an Exhibit to
this Lease. Each successive 12 month annual period occurring subsequent to the
Commencement Date shall be deemed a “Lease Year” for all purposes under the
Lease.

 

4. Project Construction and Development.

 

(a) On-Site Project. Not later than 12 months following the later of the
Commission Acceptance Date or the date upon which Tenant receives all Site
Permits, but subject to Unavoidable Delay except as may be limited by Section
2(g) and delays caused by Landlord or the County, Tenant shall commence to
construct the On- Site Project (including related roadway construction) in a
first class manner in accordance with all laws, regulations, ordinances and
permit requirements (collectively, “Governmental Requirements”) and otherwise in
accordance with the requirements of this Lease (the “Work”). The On-Site Project
shall at a minimum, contain the elements and features set forth on Exhibit C
(the “Essential Elements”), except as hereinafter provided (the “Project”).
Title to Tenant’s personalty and fixtures and Tenant’s Casino comprising the
On-Site Project shall at all times during the term of this Lease remain with
Tenant, subject to the provisions of Section 5(e).

 

(b) Submission of Plans. Upon the Commission Acceptance Date, Tenant will
undertake completion of architectural plans and working drawings for the On-Site
Project (including the roadway and the Gaming Facilities but without elaboration
for the Commercial Facilities which Tenant shall be permitted to develop at a
later date), consistent with the Preliminary Site Plan comprising Exhibit B (as
the same may have been modified pursuant to this Lease) and containing the
applicable Essential Elements. Not later than six (6) months following the
Commission Acceptance Date, Tenant shall submit to Landlord for Landlord’s
approval, a final site plan, footprints, utility plans, exterior renderings,
elevations and offsite improvement plans (together, the “Plans”) and a proposed
schedule of the applicable Work (the “Work Schedule”) for the construction and
development of the On-Site Project.

 

(c) Approval of Plans. Landlord’s approval of the Plans shall not be
unreasonably withheld or delayed; provided that Landlord shall have the right to
disapprove the Plans if approval of the same shall preclude the development and
construction of the Commercial Facilities in their entirety. In all events,
Landlord shall approve or disapprove any proposed Plans within 30 business days
after Landlord’s receipt of same, and any disapproval shall be specific as to
the reasons. Tenant shall be given adequate time and opportunity to correct such
matters which Landlord has identified as the basis for such disapproval. If
Landlord does not approve or disapprove such Plans within 30 business days after
Tenant’s submission, then such Plans shall be deemed approved for all purposes
under this Lease. Landlord agrees that the Property

 

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shall be subject to any utility easements referenced in the approved Plans and
to execute such easement agreements for the benefit of the On-Site Project.
Landlord’s approval of the Plans shall not be deemed to constitute acceptance by
Landlord of any liability in connection with the Plans or the applicable Work,
such liability and risk being expressly and exclusively borne by Tenant.

 

(d) Construction and Occupancy Permit Applications. Tenant, at Tenant’s sole
cost and expense, shall apply for all permits required to enable Tenant to
commence and complete construction of the On-Site Project. Landlord shall
endorse and support Tenant’s permit applications to the extent the same are
materially consistent with the approved Plans; provided Landlord shall not be
required to incur any out-of-pocket or third-party costs or expenses in
connection therewith.

 

(e) Delivery of Property. Landlord’s Property shall be made available to Tenant
for commencement of the Work from and after the Commission Acceptance Date,
provided Tenant has first obtained such permits as are necessary for
commencement of the applicable Work, executed and delivered the necessary
construction contracts, established the construction disbursing escrow and
delivered to Landlord the insurance certificates, contract assignments, consents
and bonds provided for in Section 4(g). Landlord shall have caused the Landlord
Property to be lawfully subdivided into the Park Property and the Property and
shall be consistent with Tenant’s contemplated ingress and egress by the public
to the Project and Tenant’s access to service roads and work areas as shown on
the Project design plans and renderings and shall reflect all easements and
rights-of way that Tenant has over Landlord’s Property.

 

(f) Coordination and Inspection of the Work. Landlord shall have the right to
inspect and monitor the progress of the Work during regular business hours, on
reasonable prior notice to Tenant and without material interference with the
Work. Tenant shall advise Landlord as to any material claim pending or
threatened in writing by or against Tenant or otherwise involving the On-Site
Project and of any anticipated delays in Project Opening during the Work. Within
30 days after the Effective Date, each party will appoint a named representative
who shall meet at regularly scheduled intervals. The Landlord’s business
representative will work with the Landlord’s representatives and officials and
departments of the County to help assure that the On- Site Project obtains
timely review of all requested governmental approvals. The Landlord’s
representative and the representative of Tenant will also document and notify
the appropriate parties regarding any occurrences of Unavoidable Delay during
the governmental approval and construction process (if applicable). The Project
Representatives shall confer by telephone and fax communication, and shall meet
with each other regularly or otherwise on reasonable prior request for the
purpose, of conveying and obtaining information and approvals required in
connection with the Work. Notices provided by Project Representatives shall be
sent and received in accordance with the provisions of Section 29 regarding
delivery of Notices.

 

(g) The Work. Tenant shall proceed in accordance with the applicable Work
Schedule with reasonable diligence to obtain all construction permits and to
commence and complete the applicable Work in accordance with the applicable
Plans,

 

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and, subject only to Unavoidable Delays and delays caused by Landlord or the
County, the Work Schedule, and to obtain all Occupancy Permits and to open the
Gaming Facilities to the public (“Project Opening”) within 24 months following
the commencement of the Work. All Work shall be performed by Tenant at the sole
risk, cost and expense of Tenant (i) in a first class, workmanlike manner, (ii)
free of liens for labor and materials (subject to Tenant’s right to contest
liens as provided in this Lease), (iii) subject to commercial liability,
builder’s risk and worker’s compensation insurance coverage required under this
Lease, (iv) free of all other claims against Landlord or the Project (subject to
Tenant’s right to contest liens as provided in this Lease), (v) in compliance
with the permits and all Governmental Requirements, and (vi)-as to the Work
performed on the Property only, subject to fully-funded construction disbursing
escrows with properly qualified, licensed and bonded contractors. Tenant shall
be responsible for timely delivery to Landlord of all insurance certificates,
construction contracts, bonds, construction disbursing escrows, collateral
assignments of construction contracts and the contractors’ consents thereto.
Tenant shall obtain and maintain in full force and effect, at Tenant’s sole cost
and expense, payment and performance bonds (in a form and issued by a carrier
reasonably acceptable to Landlord) equal to 100% of the total cost of the
On-Site and Off-Site Projects. Tenant shall deliver to Landlord a certificate of
Substantial Completion of the applicable Work issued by Tenant’s architect, and
Tenant shall provide evidence of payment of all construction costs. As used
herein, “Substantial Completion” shall mean that only insubstantial details of
finish construction and installation remain to be performed, and that the
applicable Facilities may nonetheless be opened to the public. Tenant agrees
that all punch-list items shall be completed as soon as reasonably practical and
in no event later than 180 days after Substantial Completion. Tenant shall
deliver to Landlord a certificate of Final Completion issued by Tenant’s
architect and evidencing the completion of all punch-list items.

 

(h) Community Facilities. The Community Facilities shall include Tenant’s
improvements to the Park Property and the County’s park as shown on the
Preliminary Site Plan attached hereto as Exhibit B and the construction of the
“Aquatic Center” which Aquatic Center shall have a minimum budget of $4 million.
The Tenant and the Landlord shall form a Development Assistance Committee to
serve as an advisory board on the location and development of the Community
Facilities. The Development Assistance Committee shall have a representative of
the Tenant and the Landlord. The County Executive shall appoint up to 5
additional members to serve on the Development Assistance Committee which shall
include one representative from the Hancock School District, one representative
each from the Lemay and South St. Louis County Chambers of Commerce, one
representative from the community at large, and the County Council Member
representing the 6th District. The Tenant shall exercise best efforts to
complete the Community Facilities within the later to occur of eighteen (18)
months following the Commencement Date or the date Landlord shall have acquired
ownership and delivered to Tenant control of land where such improvements are to
be constructed. The parties agree that Tenant will construct a shell in the park
adjacent to the Property and that Tenant will have a license throughout the Term
to hold concerts at the shell from time to time. The license shall provide that
the Tenant may use the shell for up to four (4) nights a month at no charge to
Tenant, provided however, that Tenant shall reimburse the owner of the Park
Property for the cost of security and cleanup.

 

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Tenant has established a budget of $20 million to construct the Project Roadway
and other off-site improvements and the designated Community Facilities. If
following the completion of all improvements within the $20 million budget,
there is a surplus budget amount over and above the minimum $4 million, the
budget for the Aquatic Center shall be increased by such surplus amount. The
Tenant shall complete the Community Facilities at Tenant’s cost and expense. In
the event certain Community Facilities and/or the Aquatic Center are located
outside of the Park Property, the Landlord and the County shall provide real
property at its expense for such offsite Community Facilities. Upon the
completion of the construction of the Community Facilities on the Park Property,
the Landlord or the County shall take all necessary actions to dedicate the Park
Property to the County or the Park District as a park. Subject to the foregoing,
if the Tenant fails to complete the Community Facilities within eighteen (18)
months following the Commencement Date subject to Unavoidable Delays and other
provisions of this Lease, the Landlord may, in its discretion, require that the
Tenant forfeit the remaining monies budgeted for the Community Facilities not
yet completed to the Landlord (including all funds allocated for the Aquatic
Center) together with the sum of $250,000 as liquidated damages for the delay in
completion and not as a penalty. In such event, the Tenant shall have no further
liability for the Community Facilities and the Landlord shall use all of said
such monies to construct improvements not completed by Tenant.

 

(i) Commercial Facilities. Not later than three (3) years following the
Commencement Date, Tenant, at Tenant’s sole cost and expense, shall
substantially complete the development and construction of the Commercial
Facilities, and place not less than seventy-five percent of the rentable footage
of same into service; provided, however, that such three (3) year deadline shall
be extended for an additional period of twelve (12) months if Tenant
demonstrates that it has pursued such development and construction with
reasonable diligence. Tenant shall have the right in Tenant’s discretion to
engage any one or more third party developers, retail tenants, contractors,
retail consultants, a master retail developer or tenant, or other qualified
person or corporation to develop, construct and operate all or any portion of
the Commercial Facilities. In the event Tenant fails to timely perform the
obligations set forth in this subsection (i), Tenant shall pay to Landlord an
additional payment hereunder of $1,000,000 per year (or pro rated if less than
year) until Tenant shall have caused the completion of the Commercial Facilities
or paid a total of $5,000,000 to the Landlord, which sums will be collected by
Landlord as liquidated damages and not as a penalty and in such event, the
Landlord shall not have any other rights or remedies against the Tenant with
respect to Tenant’s failure to open and operate the Commercial Facilities;
provided, however, that if this Lease shall be terminated by Tenant pursuant to
the provisions of Section 24 after any such annual payments of $1,000,000 have
been paid or have become due and payable, then Landlord’s recovery of amounts
due for failure to open and operate the Commercial Facilities, in addition to
any payments due under Section 24, shall be limited, effective as of the date
this Lease is terminated, to the greater of $3,000,000 or the total amount
theretofore paid or due Landlord pursuant to this subsection (i).

 

(j) Control of Work. Landlord and Tenant agree, subject to applicable
Governmental Requirements that performance of the Work shall be subject to the
following terms and conditions: (i) Tenant shall have the sole and exclusive
right to

 

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select any architect construction manager, general contractor and engineer in
connection with the design and construction of the Project; (ii) Tenant shall
have the sole and exclusive right to select any additional subcontractors,
material men, suppliers or any other persons or companies in connection with the
construction of the Project; (iii) Tenant shall have the sole and exclusive
right to manage, direct, control, coordinate and prosecute the completion and
operation of the Project, and Landlord shall cooperate fully in such regard, but
at no cost or expense to Landlord; and (iv) Tenant will enter into a mutually
beneficial project labor agreement for construction of the Project.

 

(k) Community Improvement District. At the option of the Tenant, the Tenant and
the Landlord, at no additional cost or expense to Landlord, shall cooperate to
design and form a Community Improvement District (“CID”) which will, at a
minimum, include an agreed-upon area that will generate revenues for the purpose
of security, public improvements, maintenance and improving and enhancing the
environs in the immediate vicinity of the Project area. The Tenant shall
participate in the CID and its representation on the CID Board of Directors
shall reflect its financial contribution to the CID. The revenues for the CID
shall be in the nature of a special assessment which shall not be based on
parking availability or gaming revenues.

 

(1) Transportation Development District. In the event that the Tenant determines
to construct the First Priority Route, the Landlord shall lend all reasonable
cooperation, at no additional cost or expense to Landlord, to the County, the
City of St. Louis, Tenant and other interested parties in connection with the
formation of a Transportation Development District (“TDD”) on mutually agreeable
terms and conditions, for the purpose of facilitating the financing,
construction, ownership and ongoing maintenance and repair of the First Priority
Route by the TDD or any one or more governmental sponsors, and in connection
with obtaining any other governmentally required approvals for the First
Priority Route.

 

(m) Project Opening. On or before the date of Project Opening, the parties shall
execute a memorandum prepared by Landlord and reasonably acceptable to Tenant
confirming the Project Opening date (and the date payments of Minimum Rent or
Percentage Rent, as the case may be, shall be due under Section 5), which
memorandum shall become an Exhibit to this Lease.

 

(n) Unavoidable Delays. Neither the Landlord nor the Tenant nor any successor in
interest or permitted assign shall be considered in breach or default of their
respective obligations under this Lease, and times for performance of
obligations hereunder shall be extended in the event of any delay caused by
force majeure, including without limitation damage or destruction by fire or
casualty; strike; lockout; civil disorder; war; terrorist act; restrictive
non-gaming government regulations; lack of issuance of any permits and/or legal
authorization by the governmental entity necessary for the Tenant to proceed
with construction of the Work or any portion thereof; shortage or delay in
shipment of material or fuel; acts of God; unusually adverse weather or wet soil
conditions; or other like causes beyond the parties’ reasonable control,
including without limitation any litigation, court order or judgment resulting
from any litigation affecting the validity of the On-Site Project or this Lease
(individually, an “Unavoidable

 

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Delay” and collectively, “Unavoidable Delays”); provided that such Unavoidable
Delay shall not be deemed to exist as to any matter where the period of
Unavoidable Delay is expressly limited or as to any matter initiated or
sustained by the Tenant in bad faith, and provided further that a claim of
Unavoidable Delay shall be conditioned upon Tenant notifying the Landlord in
writing within sixty (60) days of the commencement of any such claimed event of
Unavoidable Delay.

 

(o) Gaming Related Licensing. The Landlord agrees to cooperate with the Tenant
during all phases of licensing for the Project before the Commission including
the following:

 

(i) the Landlord shall recommend to the Commission the selection of Tenant for
investigation and licensing for the Project; and

 

(ii) the parties hereby agree that design changes and regulatory requirements
dictated by Commission or other legal or governmental authorities shall be
accepted by the parties and implemented by Tenant using its reasonable best
efforts and shall not be considered material modifications to the Project unless
said changes or requirements have the effect in quantity and/or quality of
reducing any of the Project.

 

(p) Project Access

 

The Tenant agrees to exercise immediate due diligence to explore two alternative
routes for access to the Project defined as the “First Priority Route” and the
“Second Priority Route” on the site plan that is attached hereto as Exhibit “E”
and incorporated herein by reference. The Tenant’s objective shall be to work
with the Landlord and the County at the Tenant’s expense to designate either the
First Priority Route or the Second Priority Route as the designated access road
for the Project (“Project Roadway”). The Tenant and the Landlord agree as
follows:

 

(i) The Tenant agrees to designate and construct the Project Roadway subject to
the terms of this Lease. In the event that the Project Roadway is within the
County, the Tenant agrees to submit all original conceptual design and
construction plans and specifications for constructing the Project Roadway and
any subsequent changes thereto to the County’s Director of the Department of
Highways and Traffic for review and approval. The Tenant agrees to construct the
Project Roadway, in accordance with the County Code and the terms of its permit.
The Tenant agrees to submit completed improvements to the County for its review
and acceptance in accordance with applicable provisions of the County Code and
the terms of its permit.

 

(ii) The Tenant agrees to obtain all County permits and fulfill all requirements
normally applicable to such Project Roadway. The Tenant shall obtain all
necessary and appropriate engineering and land surveying services, ownership and
encumbrance reports, legal descriptions, maps, and consulting services related
to the design and construction or the Project Roadway. The

 

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Tenant agrees to coordinate with the Landlord the preparation of a plat of
survey depicting the ownership and boundaries of all property affected by the
construction of the Project Roadway.

 

(iii) In the event that the First Priority Route is designated as the Project
Roadway by the Tenant, the Landlord agrees to lend all reasonable assistance to
Tenant in connection with obtaining any required governmental approvals for the
First Priority Route and, if applicable, the formation of a TDD, but at no cost
or expense to Landlord.

 

(iv) In the event that the Second Priority Route is designated as the Project
Roadway by the Tenant, the Landlord agrees to cooperate with the Tenant and take
reasonable actions, at no additional cost or expense to Landlord, in support of
the Tenant to obtain state and federal funding for the Project Roadway, to seek
Brownfields and/or other incentives from the state of Missouri, to remove any
federal encumbrance or regulatory issue, to seek the assistance of the United
States Air Force and the Governmental Services Administration to obtain the
defense mapping facilities and to obtain all necessary approval and funding from
the Missouri Department of Transportation. The cooperation of the Landlord shall
include, if necessary, the exercise of the Landlord’s power of eminent domain to
acquire any fee or lesser title to any properties within St. Louis County that
are necessary to develop and construct the Project Roadway, provided all funds
are made available for land acquisition, relocation and related legal and
administrative expenses. In such event, the Tenant shall pay for the expenses of
the Landlord and shall comply with any requirements under applicable law as to
exercise of the power of eminent domain. Landlord shall have the right to enlist
the assistance of the County in connection with any of the foregoing actions.

 

(v) If so recommended by Tenant, Landlord shall request that the County assume
responsibility for construction of the Project Roadway at the expense of the
Tenant as a Public Works project subject to satisfaction of the above
requirements and the economic development objectives of the Landlord and the
Tenant under this Lease.

 

(q) Great Rivers Greenway. The Landlord and the St. Louis Metropolitan Park and
Recreation District dba Great Rivers Greenway shall enter into an agreement
reasonably acceptable to Tenant pursuant to which, among other things, the
Landlord will provide for an easement of no more than 100 feet across the
Property as depicted on the Preliminary Site Plan for use as a recreation trail
and a right of first refusal to obtain an additional easement over the balance
of Landlord’s Property not included in the Property leased to Tenant for the
purpose of park and green space development. The easement agreement shall
include requirements for the use and maintenance of the property that are
acceptable to Tenant. The easement shall permit Tenant to place underground
infrastructure under the recreation trail and to take other necessary action to
construct the Project subject to reasonable provisions that Tenant shall be
responsible for any damages it may cause with respect to the same. In
consideration of Tenant’s rights thereunder, Tenant shall reimburse Great Rivers

 

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Greenway for out-of-pocket costs in connection with the Landlord’s Property
through March 23, 2004 not to exceed $500,000.

 

5. Rent.

 

(a) Prepaid Rent and Annual Rent. Tenant shall pay to Landlord, without setoff
or deduction, by corporate or cashiers check or by wire transfer as directed by
Landlord in immediately available U.S. funds, the following rentals
(collectively, “Rent”):

 

(i) subject to the provisions of Section 1(c)(i), the Prepaid Rent on the
Commission Acceptance Date; and

 

(ii) as annual rent (“Annual Rent”), commencing on the date of Project Opening
and continuing until the expiration of the Term, the greater of (a) 2.5% of
annual Adjusted Gross Receipts (“AGR”) (“Percentage Rent”) or (b) applicable
Minimum Rent.

 

(b) Minimum Rent. As used in this Lease, the term “Minimum Rent” shall mean $4
million or the prorata portion thereof if the Commencement Date is other than
January 1 of any year; provided that in the first year of operations, the
Prepaid Rent, the First Deposit and the Second Deposit shall be fully credited
against the payment of such Minimum Rent.

 

(c) AGR. As used in this Lease, the term “AGR” shall mean the annual gross
receipts from licensed gambling games and devices less (i) winnings paid to
wagerers for the same period, and (ii) amounts required to be paid during the
same period to the owners of participation games (not affiliated with Tenant)
such as Wheel of Fortune provided such games cannot be purchased by Tenant at a
commercially reasonable price.

 

(d) Payment of Annual Rent. The Prepaid Rent, the First Deposit and the Second
Deposit shall be applied against the Minimum Rent that would have been otherwise
due and owing by Tenant to Landlord during the first seven and one-half months
following Project Opening. On the tenth day of the month after the eighth full
month of operation Tenant shall pay to Landlord an amount equal to One Hundred
Sixty-Six Thousand Six Hundred Sixty-Six and 67/100 Dollars ($166,666.67) and
beginning on or before the 10th day of each month thereafter to and including
the last month of the Term, Tenant shall pay to Landlord the amount of Three
Hundred Thirty-Three Thousand Three Hundred Thirty-Three and 33/100 Dollars
($333,333.33), as Minimum Rent. On or before the 45th day following the end of
each calendar year following the Commencement Date, Tenant shall pay to Landlord
an amount equal to 2.5% of AGR less the total monthly payments of Minimum Rent
made for such year. Tenant shall report AGR to Landlord on a yearly basis in
accordance with the provisions of Section 13. If the Tenant shall owe Minimum
Rent to the Landlord for a partial month under the terms of this Lease, the
payment thereof shall be made pro rata on the basis of the number of actual days
due and owing.

 

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(e) Payments in Lieu of Taxes. Following the satisfaction or waiver of the
conditions set forth in subsections (b) through (f) of Section 2, Landlord will
commence preparation of an agreement for payments in lieu of taxes (the “PILOTS
Agreement”), which shall be subject to the approval of the St. Louis County
Council and the Tenant. Under the PILOTS Agreement, from and after December 31st
of the first full year following the Commencement Date, Tenant shall make,
subject to all terms and conditions of the Pilots Agreement, annual payments in
lieu of taxes (“PILOTS”) in two equally ratable components:

 

(i) to a charitable foundation established to benefit the Hancock Place,
Mehlville, Lindbergh, Affton and Bayless school districts and such other
qualifying South St. Louis County schools as the foundation may designate (and
in the respective amounts which the foundation shall determine from year to
year, without triggering an offset in State school aid funding for any such
beneficiary), that amount which equals the school tax rate applied to the
assessed value of the On-Site Project (i.e., the amount that the Hancock Place
School District alone would have received absent the PILOTS Agreement, and
disregarding any offset in the State school aid funding formula resulting
therefrom), but not less than the sum of $4,300,000 during any tax year
(“Foundation PILOTS”); and

 

(ii) to the Collector of Revenue, for distribution to the same recipients that
would have received such sums in the form of taxes (excluding the Hancock Place
School District, which shall only receive Foundation PILOTS), and in the same
amounts that such recipients would have received without a PILOTS Agreement
under the then-current tax rates and assessed valuation.

 

Under the PILOTS Agreement, Tenant shall have no obligation to pay to any party,
whether prospectively or retroactively, any sums of real property or other taxes
that the terms of the PILOTS Agreement are intended by the Landlord and the
County to supersede or supplant. In addition, the PILOTS Agreement shall contain
provisions dealing with the handling of legal challenges to the PILOTS Agreement
and claims brought by taxing authorities, including contest rights and outcomes,
so as to preserve the rights and objectives set forth in the preceding sentence
and to protect the Tenant from increased costs resulting from any duplication of
tax payments, interest, penalties and costs of litigation. To that end, the
PILOTS Agreement shall contain remedial mechanisms acceptable in the discretion
of Tenant that protect and prevent Tenant from sustaining any cost or expense as
a result of any challenge by any party of the terms and the validity of the
PILOTS Agreement or the foundation or its operation, or any claims against
Tenant or the Property for taxes which the PILOTS Agreement is designed by the
County and the Landlord to supersede or supplant, and which Tenant has paid or
may be obligated to pay under the PILOTS Agreement, including interest,
penalties and litigation expenses.

 

In the event the parties are unable to adopt a PILOTS Agreement as required by
the foregoing provisions of this subsection (e), or in the event the PILOTS
Agreement shall be invalidated by a court of competent jurisdiction after
exhaustion of appeals, the parties agree to cooperate with each other in making
such, changes to the PILOTS Agreement as may be required to legally restore and
implement the same, subject however, to Tenant’s rights and the objectives of
the Landlord and County set forth in this subsection (e), and in all events to
the requirements of the preceding paragraph.

 

6. Triple Net Obligation. The Lease shall be what is commonly known as a “Triple
Net” Lease, and Tenant shall be responsible for the full and timely performance
of all obligations and payment of all costs, charges, fees, expenses and other
sums incurred by or for Tenant’s benefit in connection with Tenant’s ownership,
leasing, construction, development, equipping, management, maintenance, repair,
replacement, operation or use of the On-Site Project or any component thereof,
including without limitation all salaries, fees, commissions, rentals, license
or permit fees, loan or mortgage payments, utility charges, trash, sewage and
waste water disposal charges, fuel charges, insurance premiums and deductibles,
and all general real estate, ad valorem, sales, use and other taxes and
assessments, special or general, allocable to the Property, the On-Site Project
or the leasehold estate of Tenant All sums other than Rent payable by Tenant
hereunder, and the amounts due Landlord pursuant to this Section 6 (whether
directly or by reimbursement of any sum paid by Landlord to a third party in the
cure of a default by Tenant as permitted under this Lease) shall be deemed
“Additional Rent” as to which Landlord shall have the same rights and remedies
for enforcement of payment and collection as Landlord has in respect of Rent.

 

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7. Landlord’s Participation Goals and Tenant’s Affirmative Action Plan.

 

(a) Affirmative Action Plan. Not later than sixty (60) days following the
Commission Acceptance Date, Tenant shall file an “Affirmative Action Plan” with
Landlord for Landlord’s review and approval, such approval not to be
unreasonably withheld. Tenant’s Affirmative Action Plan shall include provisions
that prohibit discrimination on the basis of race, color, age, national origin
or sex. In addition, Tenant’s Affirmative Action Plan shall establish an ongoing
program responding to an overall goal of Landlord of at least 19% (i)
participation of minorities and women in the construction of the Project; and
(ii) participation of minority and women-owned suppliers and vendors in the
construction of the Project. The Affirmative Action Plan shall include specific
goals and objectives for the employment of minorities and women, and the use of
minority and women vendors, in connection with Tenant’s operating of the Gaming
Facilities. The Affirmative Action Plan will be modified by Tenant to reflect
the inclusion of the Commercial Facilities as plans for the construction of
these are developed. The Affirmative Action Plan shall include women, and
minorities and shall meet the certification requirements set forth below
(“Qualified Participants”), including:

 

(i) Black (all persons having origins in any of the Black African racial groups
not of Hispanic origin);

 

(ii) Hispanic (all persons of Mexican, Puerto Rican, Cuban, Central or South
American or other Spanish culture or origin, regardless of race);

 

(iii) Asian and Pacific Islander (all persons having origins in any of the
original peoples of the Far East, Southeast Asia, the Indian subcontinent, or
the Pacific Islands); and

 

(iv) American Indian or Alaskan Native (all persons having origins in any of the
original peoples of North America and maintaining identifiable tribal
affiliations through membership and participation or community identification).

 

(b) Satisfaction of Landlord’s Goals: Except for good cause shown, Landlord
shall accept the certifications of Qualified Participants made by the State of
Missouri or any political subdivision thereof for all purposes in the
implementation of the Affirmative Action Plan. Qualified Participants shall be
counted toward meeting the Landlord’s 19% goals addressed by the Affirmative
Action Plan as follows:

 

(i) Once a firm is determined to be a Qualified Participant, whether through
certification under this subsection (b) or by agreement between Landlord and
Tenant, the total dollar value of the contract or subcontract awarded to the
firm is counted toward the goal.

 

(ii) Tenant may count toward meeting the goals of the Affirmative Action Plan a
portion of the total dollar value of a subcontract with a joint venture eligible
under the minority standards equal to the percentage of the ownership and
controls of the minority partner in the joint venture.

 

(iii) Tenant may count toward meeting the goals of the Affirmative Action Plan
expenditures to minorities who perform a commercially useful function in the
contract. A Qualified Participant is considered to perform a commercially useful
function when responsible for execution of a distinct element of the work of a
contract and the carrying out of the responsibilities by actually performing,
managing, and supervising the work involved.

 

(iv) Tenant may count toward meeting the goals of the Affirmative Action Plan
one hundred percent (100%) of its expenditures for materials and supplies
required under a contract and obtained from a Qualified Participant owned dealer
or manufacturer.

 

(v) Tenant is encouraged to use the services of banks owned and controlled by
minorities and women.

 

(vi) Tenant shall, where practicable, seek Qualified Participants in the same
geographic area in which the solicitation for subcontracts and materials is
made.

 

(c) List of Qualified Participants. Prior to commencement of work on the
Property (including Environmental Remediation), Tenant shall file with Landlord
its

 

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list of Qualified Participants Tenant expects will be used for Project
construction. Tenant shall, from time to time, update its list of Qualified
Participants Tenant intends to utilize for the Project.

 

(d) Implementation. In connection with implementation of the Affirmative Action
Plan, Tenant agrees to take the following steps, in addition to those steps
which might be included in the plan developed by Tenant:

 

(i) Conduct a pre-bid meeting to inform potentially Qualified Participants of
contracting and subcontracting opportunities;

 

(ii) Advertise in general circulation trade association and economically
disadvantaged business-directed media concerning the sub-contracting
opportunities;

 

(iii) Provide written notice to a reasonable number of potentially Qualified
Participants that their interest in the contract is solicited, in sufficient
time to allow said persons and entities they own to participate effectively,

 

(iv) Follow up on initial solicitations of interest by contacting to determine
with certainty whether potentially Qualified Participants are interested,

 

(v) Select portions of the work to be performed by Qualified Participants in
order to increase the likelihood of meeting the goals of the Affirmative Action
Plan;

 

(vi) Provide interested and potentially Qualified Participants adequate
information about plans, specifications and requirements of the applicable
contract; and

 

(vii) Use the services of available disadvantaged business organizations,
minority contractors’ groups, local, state and federal disadvantaged business
assistance offices, and other organizations that provide assistance in the
recruitment and placement of economically disadvantaged persons.

 

(e) Reporting. Following Landlord’s approval of the Affirmative Action Plan,
Tenant shall file quarterly reports with Landlord detailing the efforts and
achievements of Tenant in endeavoring to meet Landlord’s participation goals and
providing such other information as Landlord may reasonably request. Each party
shall designate a representative, and the two shall meet periodically, at the
request of either party, to review the status and implementation of the
Affirmative Action Plan.

 

8. Representations and Warranties.

 

(a) In order to induce Landlord to enter into this Lease, Tenant makes the
following representations and warranties to Landlord, all of which
representations and warranties shall be deemed restated as of the Commencement
Date:

 

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(i) Tenant is duly formed and validly existing as a Delaware corporation;

 

(ii) the execution and delivery of this Lease and the performance by Tenant of
Tenant’s obligations hereunder have been duly authorized by all requisite
corporate action;

 

(iii) this Lease constitutes the legal, valid and binding obligation of Tenant
and is enforceable against Tenant in accordance with its terms;

 

(iv) no litigation is pending or, to the best of Tenant’s knowledge, threatened
against Tenant which, if adversely determined, would likely have a material
adverse impact on Tenant or the Project;

 

(v) Tenant is not a party to, and neither Tenant nor Tenant’s properties, real
or personal, are subject to, any agreement, order, proceeding, ruling or other
matter in conflict with any provision of this Lease or which materially and
adversely affects its ability to perform its obligations hereunder;

 

(vi) Tenant is solvent and is not a party to any assignment for the benefit of
creditors or bankruptcy proceeding; and

 

(vii) Tenant is not in material default of any contract or agreement to which it
is a party which materially and adversely affects Tenant’s ability to perform
its obligations under this Lease.

 

(b) In order to induce Tenant to enter into this Lease, Landlord makes the
following representations and warranties to Tenant, all of which representations
and warranties shall be deemed restated as of the Commencement Date:

 

(i) Landlord is a corporate and political body lawfully existing and in good
standing under the laws of the State of Missouri and has the power and authority
to enter into this Lease, and the execution and delivery of this Lease and the
performance by Landlord of Landlord’s obligations hereunder have been duly
authorized by all requisite governmental action;

 

(ii) this Lease constitutes the legal, valid and binding obligation of Landlord
and is enforceable against Landlord in accordance with its terms;

 

(iii) no litigation is pending or, to the best of Landlord’s knowledge,
threatened against Landlord which, if adversely determined, would likely have a
material adverse impact on the Project;

 

(iv) Landlord is solvent and is not a party to any assignment for the benefit of
creditors or bankruptcy proceeding;

 

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(v) Landlord is not a party to any agreement, order, proceeding, ruling or other
matter in conflict with any provision of this Lease;

 

(vi) Landlord is not in default of any contract or agreement to which it is a
party which materially and adversely affects its ability to perform its
obligations under this Lease; and

 

(vii) The Park Property is zoned “C-8”.

 

9. Use of Property and Quiet Enjoyment.

 

(a) Designated Use. Tenant shall use the Property for the operation of the
Gaming Facility (a Casino containing a minimum of 90,000 square feet of Las
Vegas style gaming area) and the Commercial Facility (comprising not less than
approximately 280,000 square feet) and for the other Essential Elements, and for
such additional installations as are required by Tenant in connection therewith.

 

(b) Alterations and Improvements. Subject to the provisions of Section 9(a),
Tenant may from time to time, at Tenant’s sole risk, cost and expense, make
alterations and improvements, (i) without Landlord’s prior written consent, to
the interior, non-structural components of the Project which do not reduce the
minimum square footage devoted to Casino gaming or to the Commercial Facilities,
and (ii) with Landlord’s prior written consent, which consent shall not be
unreasonably withheld or delayed, to the exterior or structural components of
the Project; provided, however, that Landlord shall not be required to consent
to any reduction in the square footage of the Project devoted to Casino gaming
or to the Commercial Facilities. In the event of a dispute between the parties
as to whether Landlord’s consent is required or has been unreasonably withheld,
the issue shall be submitted to binding arbitration in accordance with the
procedures of Section 30. In order to rule in favor of Landlord, the arbitrators
must determine that such proposed new construction would be detrimental to the
Project, Landlord’s realization of the benefits of this Lease or to the number
of jobs afforded by the operation of the Gaming Facilities or the Commercial
Facilities.

 

(c) Compliance With Governmental Requirements. During the Term, Tenant shall, at
its sole cost and expense, promptly observe and comply with all Governmental
Requirements and the requirements of all insurance companies writing policies
covering the On-Site Project or the parking areas, streets, sidewalks, vaults,
curbs and gutters included within the On-Site Project, or the use and occupation
or franchises and privileges connected therewith, whether or not such
Governmental Requirements or insurance requirements shall necessitate structural
changes, improvements, interference with the use and enjoyment of the On-Site
Project, replacements or repairs, extraordinary as well as ordinary, foreseen or
unforeseen. The Casino shall be located within the On- Site Project in such a
manner so as not to violate any applicable Gaming Licensure requirements of the
Commission or any Permits obtained by Tenant. Tenant shall pay all costs,
expenses, claims, fines, penalties and damages that may in any manner arise out
of or be imposed because of the failure of Tenant to comply with any of the
foregoing requirements.

 

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(d) Permitted Contests. Tenant, after notice to Landlord, may, by appropriate
legal proceedings conducted at Tenant’s sole expense, contest in good faith the
validity or enforcement of any Governmental Requirement and may defer compliance
therewith, provided that (i) such noncompliance shall not constitute a crime,
(ii) Tenant shall diligently prosecute such contest to final determination by a
court, governmental authority, agency, department or other body having final
jurisdiction, (iii) the contest conducted by Tenant will not operate to extend
the Investigation Deadline, and (iv) the contest conducted by Tenant will not
result in the closing of the On-Site Project, any foreclosure or forfeiture of
Tenant’s leasehold estate or the imposition of any charge, fine, lien, penalty
or claim against Landlord. Tenant, after notice to Landlord, may, by appropriate
legal proceedings conducted at Tenant’s sole expense, contest in good faith the
validity of any lien for labor or materials imposed against Tenant or the On-Ste
Project, provided that Tenant first discharges such lien from the records of the
County by posting of bond or other security reasonably adequate to secure
Tenant’s performance, and provided further that such contest will not result in
the closing of the On-Site Project or any foreclosure or forfeiture of Tenant’s
leasehold estate.

 

(e) Quiet Enjoyment. Landlord covenants and agrees that Tenant shall be entitled
to lawfully and quietly hold, occupy and enjoy the Property during the Term
without hindrance or interference by Landlord or by any party claiming by,
through or under Landlord, in accordance with and subject to the terms and
conditions of this Lease.

 

10. Exclusivity and Restrictive Covenant.

 

(a) Grant of Exclusivity. To the fullest extent permitted by law, and subject
only to the provisions of Section 10(b), Landlord hereby grants to Tenant and
its permitted successors and assigns, for a period commencing on the Effective
Date and continuing through the 25th Lease Year (the “Exclusive Rights Period”),
the exclusive right to operate any type of excursion gaming boat, land based or
other type of gaming or gambling facility or facilities on any property which is
at any time during the Exclusive Rights Period owned or controlled by Landlord
and located south of the River des Peres or, with respect to the development
thereof or to uses which may be made thereof by the owner, tenant or occupant,
under the administrative jurisdiction of Landlord. Such exclusive rights shall
in addition to the above include an obligation on the part of Landlord to not
authorize, endorse, support or otherwise assist, directly or indirectly, in
connection with issuance by any governmental entity, including the Commission,
of any additional license or permit to or for the development or operation of
any potentially competing gaming project south of the River des Peres at any
location regardless of ownership of the concerned location for the duration of
the Exclusive Rights Period unless such license is to be held by the Tenant.

 

(b) Conditions of Grant. Landlord’s grant to Tenant of exclusivity is subject to
the following express conditions: (i) the Casino shall remain in operation after
Project Opening; (ii) no Event of Default shall have occurred and be continuing
under this Lease on the part of Tenant; and (iii) Tenant shall honor the
restrictive covenant contained or referenced in Section 10(c).

 

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(c) Restrictive Covenant. Tenant covenants and agrees that during the Exclusive
Rights Period, Tenant shall not participate in any manner in the ownership,
sponsorship, control, management, operation or use of any other riverboat or
land based gaming facility along either the Illinois or Missouri banks of the
Mississippi River from the southern boundary of the City of St. Louis to the
northern boundary of Jefferson County. Tenant acknowledges that the restrictive
covenant contained in this Section 10(c) is reasonable under all of the
circumstances.

 

(d) Right of First Refusal. In the event Landlord shall elect to support
issuance of a second gaming license south of the River des Peres after the
termination of the Exclusive Rights Period, and provided Tenant is in compliance
with the conditions described in clauses (i), (ii) and (iii) of Section 10(b),
Landlord shall grant Tenant a 120- day right of first refusal to commit in
writing to construct and operate a second gaming project in unincorporated St.
Louis County at a mutually acceptable location (and on terms and conditions
mutually acceptable to the parties) which, if constructed and opened for
operation by Tenant within 24 months after Tenant’s election (which 24 month
period shall be subject to extension on account of Unavoidable Delays), shall
operate, so long as the Tenant is in compliance with respect to clauses (i),
(ii) and (iii) above, as the same pertain to both projects, to divest Landlord
of the right to implement or to authorize the implementation of any proposal
from another prospective tenant, developer or operator of a second gaming
facility, whether the proposal in question involves the sale, lease or licensing
of property owned or leased by Landlord or Landlord’s support before the
Commission and the Council with respect to an operation proposed to be located
on privately-owned land. Tenant’s failure to elect to construct and operate a
second gaming project by timely written notice to Landlord shall constitute a
waiver of Tenant’s right of first refusal, unless Landlord’s proposal does not
result in a sale or lease of the site in question, in which event Tenant’s right
of first refusal shall be deemed reinstated. Landlord agrees to lend all
reasonable cooperation to Tenant in connection with any timely exercise by
Tenant of Tenant’s right of first refusal to construct and operate a second
gaming project. In the event of a dispute between Landlord and Tenant regarding
any aspect of Tenant’s specific plans for the construction and operation of a
second gaming project or the terms of a lease or other agreement with Landlord
with respect to such second gaming project (other than rent, which shall be
equal to the then-current Rent payable under this Lease), either party shall
have the right to submit such dispute to binding arbitration in accordance with
the procedures of Section 30.

 

(e) Memorandum of Restrictive Covenant. The provisions of this Section 10 shall
be incorporated into a memorandum prepared and recorded by Landlord against any
property now or hereafter owned by Landlord and located south of the River des
Peres.

 

11. Covenants Regarding Operation.

 

(a) Maximization of Revenues. The On-Site Project shall be maintained, managed,
operated, staffed, serviced, equipped and repaired in accordance with all
Governmental Requirements, insurance requirements and the highest standards of
similar projects. The Casino shall remain in operation after Project Opening 24
hours

 

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a day, 7 days a week, 365 days a year, so as to maximize the opportunity of
Landlord to earn Percentage Rent under Section 5(a)(ii), provided, however, that
Tenant shall have the right to close the Casino for such hourly periods as
Tenant may determine in its discretion from time to time that operation of the
Casino is not profitable. The Commercial Facilities shall remain in operation
after Commercial Project Opening on such days and for such periods of time as
shall be customary for similar kinds of fully operational facilities elsewhere,
subject to occasional tenant vacancies. Operating hours for the On-Site Project
shall be further subject to limitations imposed by applicable Governmental
Requirements, Unavoidable Delays, casualty or condemnation or by repairs,
replacements or alterations made by Tenant in accordance with the provisions of
Section 9. Tenant shall provide a reasonably adequate complement of properly
trained and equipped security personnel for the On-Site Project at all times.

 

(b) Particular Operations. The On-Site Project and all On-Site Project signage
shall be fully illuminated at all times during which the On-Site Project is
open. Subject to applicable laws, Tenant shall have the right to erect or affix
such signs and banners as Tenant may require in its discretion for directional,
informational, promotional or advertising purposes upon windows, doors and walls
(interior and exterior) of On-Site Project structures and otherwise on or about
the Project. All signs and banners shall be in good taste and generally
consistent with the themes and aesthetics of the Project.

 

(c) Illegality of Gaming Operations. Notwithstanding the foregoing provisions of
this Section 11, in the event casino gaming shall become illegal in the State of
Missouri by virtue of legislative action taken by the Missouri General Assembly,
popular referendum or otherwise, and in the further event that the Casino is
closed for a period of 30 consecutive days due to such legal impediment, then
the Tenant shall have the right to cancel this Lease by delivery of written
notice of such election to the Landlord at any time prior to the date casino
gaming again becomes legal in the State of Missouri. For so long as the Project
remains closed due to such legal impediment, Tenant’s obligation to operate the
Project and to pay Rent shall be suspended. Landlord or Tenant shall have the
right but not the obligation to contest the validity of any legal impediment to
the operation of the Project arising under this subsection (c), and in the event
either party elects to contest such impediment, the other party shall lend all
non-financial assistance reasonably required by the contesting party.

 

(d) Compliance with Rules of American Gaming Association. Tenant shall establish
a written plan and related policies to assure conformance of operation of the
Casino with the Rules of the American Gaming Association on compulsive and
problem gamblers in effect from time to time.

 

(e) Landlord Inspections. Landlord shall have the right to physically inspect
the Property and the Project (including the Gaming Facilities, Commercial
Facilities, Community Facilities (while under Tenant’s control) and roadway work
site) from time to time on reasonable prior written notice to Tenant (except in
an emergency when prior written notice shall not be required) for the purposes,
as applicable, of verifying Tenant’s compliance with its obligations under this
Lease, approving proposed alterations, monitoring work, and exhibiting the
Property for sale or lease; provided,

 

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however, that Tenant shall have the right (except in the event of an emergency)
to have a representative accompany all Landlord inspections; and provided
further, however, that Tenant shall have the absolute right to control access to
all non-public areas of the Casino for security purposes.

 

12. Assignment and Subletting.

 

(a) Landlord’s Consent Generally. No assignment of Tenant’s interest in this
Lease and no subletting (including a license or other agreement providing for
operation or management) of the Gaming Facilities shall be allowed without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld; provided that Landlord’s consent shall not be required if Tenant
assigns Tenant’s interest in this Lease or sublets the Gaming Facilities to any
wholly owned subsidiary of Tenant or a subsidiary in which Tenant owns 90% of
the outstanding stock or equity interest (a “Tenant Affiliate”). Tenant shall be
permitted to assign its interest hereunder to Casino One Corporation, a
Mississippi corporation, as Tenant’s Class A applicant (and a Tenant Affiliate)
to the Missouri Gaming Commission for licensing of the Project. In no event
shall any assignment or subletting, whether to Tenant’s Affiliate or otherwise,
constitute permission for any further subletting or assignment or operate to
release Tenant from any obligation or liability under this Lease, except as
expressly provided in Section 12(d) below. Consent to any one proposed
assignment or sublease shall not be deemed consent to further proposed
assignments or subleases. The assignment or pledge of the assets of the On-Site
Project as collateral for financing purposes shall not be considered an
assignment pursuant to this Section 12 but shall be governed by the provisions
of Section 18. Landlord’s consent shall not be required in connection with the
subletting or licensing of portions of the On-Site Project for bar, restaurant,
retail or entertainment purposes, including the Commercial Facilities, which are
incidental to the operation of the Casino and which do not reduce the floor
space dedicated to Casino gaming under Section 9; provided that no such
subletting or licensing shall operate to relieve Tenant of any liability under
this Lease.

 

(b) Procedures for Assignment and Subletting. In the event Tenant desires to
assign its interest in this Lease or to sublet or license the use of all or any
portion of the On-Site Project, whether or not Landlord’s consent shall be
required in connection therewith, Tenant shall deliver notice of the proposed
transaction to Landlord, together with detailed information regarding the
financial condition and operating history of the proposed assignee or subtenant
(including any licensee, manager or operator of the Gaming Facilities), the
terms of the proposed assignment or subletting and, if requested by Landlord, a
copy of the assignment or sublease. In the event of a proposed assignment of
Tenant’s interest in this Lease or a proposed sublease of all or any portion of
the Gaming Facilities, Tenant’s notice to Landlord shall provide the information
required to demonstrate whether the assignee, subtenant or licensee meets the
“Stated Criteria” defined in subsection (c) below. In the event the assignee,
subtenant or licensee is a Tenant Affiliate or, if not, in the event the
qualifications of the proposed assignee, subtenant or licensee shall meet or
surpass the Stated Criteria, Landlord’s consent shall be granted; provided
Tenant shall deliver to Landlord a copy of the assignment, sublease or license
agreement, and provided further that except as set forth in Section 12(d), such

 

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consent shall not operate to release Tenant from any liability or obligation
under this Lease. Landlord may reject Tenant’s proposal within 30 days after
receipt of the foregoing information if (i) the assignee, subtenant or licensee
is not a Tenant Affiliate or fails to meet any of the “Stated Criteria” as
hereinafter defined, or (ii) an Event of Default has occurred and is continuing,
and Landlord shall specifically state the grounds for Landlord’s rejection. If
Landlord shall fail to respond to Tenant within 30 days after receipt of
Tenant’s proposal, Landlord shall be deemed to have accepted such proposal. In
the event Tenant shall object to Landlord’s rejection of Tenant’s proposal,
Tenant’s sole remedy shall be to commence arbitration proceedings in accordance
with the provisions of Section 30. The arbitrators shall either approve or
disapprove the proposed assignment or sublease based on compliance with the
Stated Criteria or the occurrence of an uncured Event of Default and shall make
no other award or determination. Tenant hereby indemnifies and holds Landlord
harmless from and against any loss, cost, damage, claim, demand or expense
(including attorneys’ fees and expenses) incurred by Landlord in connection with
any action brought by or for the benefit of the proposed assignee or subtenant
or seeking relief other than arbitration as provided herein. In the event an
assignment is approved by Landlord or through arbitration, the assignee shall be
subject to all of the provisions of this Lease.

 

(c) Stated Criteria. With respect to any proposed assignee of Tenant’s interest
in this Lease or any subtenant or operator of all or any portion of the Gaming
Facilities other than Tenant’s Affiliate, the following shall constitute the
Stated Criteria for any assignee of Tenant’s interest in this Lease or any
subtenant or operator of the Gaming Facilities, whether or not Landlord’s
consent thereto shall be required:

 

(i) a net worth at least equal to that of the Tenant;

 

(ii) a credit rating equal to or better than that of the Tenant by Moody’s
Investment Service, Standard and Poor’s or an equivalent credit rating agency;

 

(iii) a sufficient casino gaming operating history or reputation in the industry
or community in the reasonable judgment of Landlord; and

 

(iv) a gaming license to operate the Gaming Facilities.

 

(d) Consideration and Expenses. Except in connection with an assignment or
sublease to a Tenant Affiliate, any assignment of this Lease or any sublease or
licensing of the Gaming Facilities (other than non-gaming operations within the
Gaming Facilities, such as food service, hotel operations and incidental
entertainment, or the Commercial Facilities), Tenant shall pay to Landlord an
amount equal to $20,000,000 if such assignment, sublease or license occurs
during the 1st Lease Year; $16,000,000 if such assignment, sublease or license
occurs during the 2nd Lease Year, $12,000,000 if such assignment, sublease or
license occurs during the 3rd, 4th or 5th Lease Year and $4,000,000 if such
assignment, sublease or license occurs during or after the 6th Lease Year.
Tenant shall pay all reasonable attorneys’ fees and expenses of Landlord in
connection with the review and approval of any such request and of the

 

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documentation implementing same whether or not approved by Landlord. Upon any
assignment of Tenant’s interest in this Lease in compliance with the provisions
of this Section 12, including without limitation, to the extent applicable,
payment of all sums due Landlord pursuant to this subsection (d), and provided
no Event of Default has occurred and is continuing, Tenant shall be released
from all obligations and liabilities accruing under this Lease after the
effective date of such assignment, provided, that in the event the assignee is a
Tenant Affiliate, then, from and after the expiration of the 10th Lease Year,
Tenant shall be released from all obligations and liabilities accruing under
this Lease after the effective date of the assignment to such Tenant Affiliate;
provided the assignee shall expressly assume and agree to perform all
obligations and liabilities of the Tenant under this Lease.

 

13. Reporting Covenants. Tenant shall report each month in writing to Landlord
the progress of the Gaming Licensure and Permit application process, the
progress of construction, and, after the Commencement Date, on a monthly basis,
gross receipts realized by Tenant, and on a quarterly basis AGR. Tenant also
shall provide Landlord with such other information regarding the development and
operation of the Project as Landlord may reasonably request, including the
status of Tenant’s obligations under the Lease. All reports of AGR shall be
certified as to accuracy and completeness by an officer of Tenant. In addition,
copies of annual audit statements shall be provided to Landlord by Tenant, and
Landlord shall have the right, at Landlord’s sole cost and expense, except as
hereinafter provided, to conduct an audit of the books and records of Tenant,
not more frequently than once during any Lease Year, in order to verify the
accuracy of AGR reported by Tenant and Tenant’s compliance with the various
operating and reporting covenants contained in this Lease. Tenant shall maintain
Tenant’s books and records in support of Tenant’s computations and reporting of
AGR in accordance with generally accepted principles of accounting consistently
applied. Tenant’s books and records shall be retained in the St. Louis
metropolitan area, available for inspection and audit by Landlord during regular
business hours on reasonable prior notice to Tenant and without material
interruption of Tenant’s business. In the event Landlord’s audit or any audit
conducted by the Commission discloses that AGR has been under-reported such that
Landlord is entitled to receive an additional payment of Annual Rent, Tenant
shall promptly make payment to Landlord of the entire sum due Landlord. In the
event the amount due exceeds 5% of the amount paid by Tenant, Tenant also shall
pay Landlord’s expenses in conducting such audit. Upon Landlord’s request,
Tenant also shall provide Landlord with a copy of each financial statement,
report and filing issued by or on its behalf and provided to any regulatory
body, including, without limitation, the Missouri Gaming Commission, the
Securities and Exchange Commission and other authorities, agencies and
commissions having jurisdiction over Tenant’s operations. Tenant shall promptly
report to Landlord any notice received by it from any governmental authority or
in respect of any proceedings at law or in equity to which Tenant is a party
alleging violation of any Governmental Requirements by Tenant, and Tenant shall
provide to Landlord such information as Landlord may request in connection
therewith. Tenant hereby irrevocably designates St. Louis County as the “home
dock” for the Project during the Term for all purposes under Section 313.822 of
the Revised Missouri Statutes, and Tenant agrees to confirm the status of the
County as the “home dock” for the Project as and when requested to do so by
Landlord or the Commission.

 

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14. Insurance.

 

(a) Insurance During Work. Prior to the commencement of work on the Property or
any roadway construction, including any site preparation or Environmental
Remediation, and at all times until completion of such work (including the
period of any construction work occurring after Project Opening), Tenant shall
maintain or cause Tenant’s contractor to maintain in full force and effect the
following insurance coverage:

 

(i) All-risk Property insurance providing for the full replacement value of the
Project to its then-current state of completion. The property insurance for the
Project shall have a deductible of not more than $500,000. Contractor shall pay
all costs not covered because of such deductible. Materials and supplies stored
away from the job site or in transit shall be covered to a limit of $5,000,000.

 

(ii) Commercial General Liability insurance in the amounts set forth below,
including all major divisions of coverage, on a comprehensive basis, including:

 

(a) Premises Operations (including X C/U as applicable);

 

(b) Contractor’s Protective;

 

(c) Products and Completed Operations;

 

(d) Personal Injury Liability with Employment Exclusion deleted or a separate
Employment Practices Liability Policy;

 

(e) Non owned and hired motor vehicles automobile liability;

 

(f) Removal of the Care, Custody and Control exclusion; and

 

(g) Umbrella Excess Liability

 

If Tenant or Tenant’s contractor cannot procure underground liability (XC/U)
coverage, such coverage shall be procured and maintained by each subcontractor
responsible for structural support, structural rehabilitation and/or concrete
work, and such coverage shall be in the limits required below, shall protect the
interests of the Landlord in the Project.

 

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(iii) The coverages and limits of liability contained in the liability insurance
required hereunder shall be not less than the following:

 

(A)

   WORKMEN’S COMPENSATION               Applicable Federal, State      Statutory
       Employer’s Liability:              

Each Accident:

   $ 5,000,000       

Bodily Injury by disease:

   $ 5,000,000  policy limit     

Bodily Injury by disease:

   $ 5,000,000  each employee

(B)

   COMMERCIAL GENERAL LIABILITY               Including Premises - Operations   
          

(including explosion, collapse and underground);

              Products/Completed Operations    $ 10,000,000        Each
Occurrence    $ 10,000,000        General Aggregate    $ 10,000,000       
Personal & Advertising Injury    $ 10,000,000        Products/Completed
Operations Aggregate    $ 10,000,000  

(C)

   PERSONAL INJURY               Each Person Aggregate    $ 10,000,000       
General Aggregate    $ 10,000,000  

(D)

   Completed operations and Products Liability shall be maintained for 5 years
after final payment  

(E)

   COMMERCIAL AUTOMOBILE LIABILITY              

Owned, Non-Owned and Hired Combined Single Limit (Bodily Injury & Property
damage)

   $ 5,000,000  

(F)

   Contractual Liability    $ 5,000,000  

(G)

   UMBRELLA LIABILITY              

Each Occurrence

   $ 10,000,000       

Aggregate

   $ 10,000,000  

 

(b) Insurance Upon Project Opening. From and after Project Opening, Tenant shall
maintain in full force and effect the following insurance coverage:

 

(i) commercial liability insurance on an “occurrence basis” against claims for
“personal injury” including, without limitation, bodily injury, death or
property damage occurring on, in or about the Project or in connection with any
other operations of Tenant related to the Project (such as, by way of example,
off-site bus or shuttle service), such insurance to afford immediate minimum
protection of $5 million combined single limit/per occurrence and $10 million
aggregate, and, with respect to the Project, a deductible not greater than
$500,000;

 

(ii) property insurance against loss or damage to the Project (including the
Casino) by fire and other risks covered by insurance of the type now known as
“fire and extended coverage” in an amount equal to the replacement value of the
Casino and remainder of the Project and with a deductible not greater than
$500,000 from the loss payable for any casualty;

 

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(iii) worker’s compensation insurance in full compliance with all applicable
state and federal laws and regulations;

 

(iv) employers liability insurance in the minimum amounts of $1 million per
individual claim, not to exceed $100 million in the aggregate, covering injury
or death to any employee which may be outside of or in addition to liability
under any worker’s compensation statutory coverage;

 

(v) excess or umbrella insurance providing a minimum of $10 million in excess of
underlying limits and coverage provided by commercial general liability,
protection and indemnity and employer’s liability policies; and

 

(vi) personal property insurance covering Tenant’s trade fixtures, equipment,
goods and inventory in an amount not less than 95% replacement value.

 

(c) Quality of Coverage. All such policies shall be issued by insurance
companies licensed to do business in the State of Missouri and approved by
Landlord as to form and as to surety and reserving the right of recovery by the
Landlord in the event of damage to its property and issued in the name of Tenant
and naming Landlord as additional insured, as its interest may appear. Included
in the property and, if applicable, maritime policies shall be coverage
providing for the removal of any improvements when damaged from any cause
whatsoever and this clause shall be expressed as a specific warranty by the
insurance company regardless of cause. In addition, one or more of the policies
shall include special dram shop, and vehicular and, if applicable, maritime
operations, endorsements and a contractual liability endorsement covering the
indemnification agreements of Tenant contained in this Lease. Policy
certificates shall be delivered to Landlord on the Effective Date and shall
state that the coverage afforded thereby shall not be modified or canceled
without 60 days’ prior written notice to Landlord, delivered by registered mail.
Provided no Event of Default has occurred and is continuing, all loss proceeds
shall be made available to Tenant to restore and repair the Project (including
the Casino) as provided in Section 15. Permitted deductibles may be increased by
an amount equal to any increased inflation in the value of U. S. currency.

 

(d) Renewal of Coverage. Certificates of insurance with reasonably satisfactory
evidence of payment of the premium thereof, shall be delivered to Landlord on or
before the commencement of the applicable work or the date of Project Opening,
as appropriate, and upon renewals of such policies, not less than 30 days after
renewal. Not less than 60 days prior to the expiration of any such coverage,
Tenant will provide evidence to Landlord of continuing insurability by means of
letters from qualified carriers confirming intent to renew or provide the
required coverage. If Tenant at any time fails or refuses to procure or maintain
the required amount of insurance, then the Landlord may, and without notice to
Tenant, obtain same for and on behalf of Tenant and charge the cost thereof to
Tenant, such charge to be due and payable upon demand and to constitute
Additional Rent hereunder.

 

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(e) Waiver of Subrogation. All insurance policies of Tenant shall contain an
endorsement containing an express waiver of any right of subrogation by the
insurance company against Landlord and the County.

 

(f) Additional Insurance. Tenant shall obtain such other insurance in such
amounts as may from time to time be reasonably required by the Landlord against
other insurable hazards. Tenant shall not carry separate or additional insurance
concurrent in form or contributing in the event of any loss or damage with any
insurance required to be obtained by Tenant under this Lease, if the effect of
such insurance would be to reduce the protection or payment to be made under
insurance required hereunder. In the event Tenant objects to any additional
coverage required by Landlord, the issue shall be submitted to binding
arbitration in accordance with the provisions of Section 30 hereof.

 

15. Damage and Destruction.

 

(a) Casualty Termination. If, at any time following Project Opening, the Gaming
Facilities shall be damaged by any cause or casualty, and the cost of repair and
reconstruction shall be reasonably estimated by the insurance carrier to exceed
$100,000,000 (a “Material Casualty”), Tenant shall have the right, by delivery
of written notice to Landlord not later than ninety (90) days following the date
of such damage or destruction, to terminate this Lease without further
obligation or liability to Landlord (except that Tenant shall discharge all
accrued liabilities under this Lease (including this Section 15) and make all
payments as are required upon a termination of this Lease under Section 24, if
applicable), and such termination shall be deemed to relate back to the date of
damage or destruction; provided, however, that if the Gaming Facilities or any
part thereof shall be kept open for business after the date of damage and prior
to the surrender of possession of the Property, the termination date shall be
the date upon which Tenant shall discontinue the conduct of its business on the
Property. If Tenant shall timely elect to terminate this Lease pursuant to this
subsection (a), Tenant shall have the right to retain all loss proceeds,
provided, however, that Landlord shall have the right to require Tenant, at
Tenant’s sole cost and expense, within one hundred twenty (120) days following
the date of Tenant’s notice of termination, to (i) raze and remove the entire
On-Site Project or only such particular damaged improvements as Landlord may
require, and/or (ii) to construct temporary fencing, barricades and structures
in order shore up, cover or secure damaged improvements so as to minimize the
risk of further damage through collapse, fire, inclement weather, unauthorized
entry and other hazards, to the extent reasonably practicable.

 

(b) Casualty Reconstruction. In the event Tenant shall fail to timely terminate
this Lease following a Material Casualty or in the event of damage or
destruction occurring to the On-Site Project (including the Gaming Facilities)
which is not a Material Casualty under subsection (a) above, Tenant shall repair
and rebuild the On-Site Project (including the Casino), and restore the On-Site
Project to its prior state and quality (both Gaming Facilities and Commercial
Facilities) as nearly as practical and to full operation with reasonable
diligence. Tenant shall direct, control, coordinate and approve all such
repairs, reconstruction and restoration contemplated by this provision,

 

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and Tenant shall have the right to select any architects, engineers and
contractors for such repairs, reconstruction or restoration, subject to the
remaining provisions of this Lease. All loss proceeds shall be made available to
Tenant and shall be applied to effect such repair, reconstruction or restoration
of the On-Site Project. No component of Annual Rent or Additional Rent shall
abate as a result of any such damage or destruction, it being understood and
agreed that Tenant shall maintain such business interruption insurance as Tenant
may require in order to assure Tenant of the ability to continue to meet
Tenant’s financial obligations under this Lease. Any dispute regarding the
occurrence of a Material Casualty, Tenant’s right to retain insurance proceeds
under subsection (a) above or Tenant’s obligations with respect to
reconstruction and other repairs under this Section 15 shall be subject to the
dispute resolution provisions of Section 30.

 

16. Condemnation.

 

(a) Definitions. Whenever used in this section, the following words shall have
the following respective definitions and meanings: (i) “condemnation” or
“condemnation proceedings” - any action or proceeding brought by competent
authority for the purpose of the taking of the fee of the Property, the Project
or any part thereof, as a result of the exercise of the power of eminent domain,
including a voluntary sale to such authority either under threat of or in lieu
of condemnation or while such action or proceedings is pending; (ii) “taking” -
the event of vesting of title to the fee of the Property, or the Project or any
part thereof, in the competent authority pursuant to condemnation; (iii)
“vesting date” - the date of the taking.

 

(b) Defense of Taking. Landlord, immediately upon obtaining knowledge of the
institution of any proceedings for the condemnation of the Property or any part
thereof, shall notify Tenant of the pendency of such proceedings. Landlord shall
then, if requested by Tenant, file or defend its rights thereunder and prosecute
the same with due diligence to its final disposition. Tenant may, but shall not
be required to, participate in any such proceedings and Landlord from time to
time will deliver to Tenant all instruments requested by it to permit such
participation. In the event Tenant chooses to participate in any such
proceedings, Landlord may be the nominal party in such proceedings, but Tenant
shall be entitled to control and direct the same and to be represented therein
by counsel of its choice, at Tenant’s cost. Landlord covenants and agrees that
it will use its best efforts and take all actions necessary and appropriate to
cause the County not to exercise its powers of eminent domain with regard to the
Property, the Project or any part thereof, and otherwise to assure to the
greatest extent possible that neither the Property, the Project nor any part
thereof, shall be condemned during the Term.

 

(c) Total Taking. In the case of a taking of all of the Property and the
Project, this Lease shall terminate as of the vesting date and the Rent under
this Lease shall be apportioned to the date of termination, and upon surrender
of the Property to Landlord, Landlord shall refund to Tenant any unearned
portion of Annual Rent prepaid by Tenant.

 

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(d) Termination from Taking. In any case of any taking, regardless of any
provision hereof to the contrary and the legal basis for the making of same,
Landlord shall be entitled to receive all of the award attributable to the
concerned land taken, exclusive of improvements, and Tenant shall be entitled to
all of the award attributable to the improvements subject to the terms of
subsection (e) below.

 

(e) Partial Taking - Termination or Arbitration. In the case of a taking of less
than all of the Property and Project (other than for a temporary use) Landlord
and Tenant mutually shall determine within a reasonable time after the vesting
date whether the remainder thereof can economically and feasibly be used by
Tenant. If Landlord and Tenant cannot mutually agree upon such matter within 90
days after the vesting date, it shall be determined by binding arbitration
pursuant to the provisions of Section 30. If it is determined by mutual
agreement or by arbitration that the remaining Property and Project cannot
economically and feasibly be used by Tenant, Tenant may terminate this Lease on
not less than 10 days nor more than 30 days notice to Landlord to such effect,
provided that such notice is given within 30 days after such determination, and
the Rent shall be apportioned to the date of termination. If Tenant does not
elect to terminate this Lease within the period aforementioned, it shall
continue in full force and effect with respect to the remaining portion of the
Property. If this Lease shall terminate pursuant to this provision, the award
for the Project shall be apportioned and paid, to the extent available, in the
following order of priority: (i) Landlord and Tenant first shall be entitled to
their reasonable expenses and charges including, without limitation, reasonable
attorneys’ fees incurred in connection with the taking; (ii) Landlord shall be
entitled to the value of the fee interest in the land exclusive of the value of
this Lease; and (iii) Tenant shall be entitled to the balance of the award
attributable to the improvements. If the court in which the condemnation
proceedings are brought fails or refuses to apportion its award between Landlord
and Tenant, and if Landlord and Tenant cannot agree upon the allocation defined
in the above order of priority, such values, allocation and apportionment shall
be determined by binding arbitration under the provisions of this Lease. The
provisions of this section also shall apply in the case of a partial taking
where this Lease is terminated pursuant to the provisions hereof.

 

(f) Partial Taking - Reconstruction. In the case of a partial taking where the
Tenant does not elect to terminate this Lease pursuant to the provisions set
forth above, Tenant shall commence and proceed with reasonable diligence to
repair and reconstruct the remaining improvements to a complete, economically
usable, architectural unit or units, including, without limitation, temporary
repairs, changes and installations required to accommodate space subtenants and
all other work and replacements and additions of furniture and furnishings
incidental to and appropriate in connection with all of the foregoing (all such
repair, reconstruction, replacements and additions and work being referred to in
this section as “restoration”), and the total award of the condemnation
proceedings, including the award for the Project shall be apportioned and paid
to the extent available in the following order of priority: (i) Landlord and
Tenant first shall be entitled to their reasonable expenses and charges
including, without limitation, reasonable attorneys’ fees incurred in connection
with the taking; (ii) Tenant shall be entitled to an amount equal to the cost of
restoration to the extent contemplated by this section, such sums shall be
turned over to Tenant to be held

 

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in trust for the purpose of paying for the cost of restoration; (iii) Landlord
shall be entitled to the value of the fee exclusive of the value of this Lease;
(iv) Tenant next shall be entitled to the value of its leasehold estate under
this Lease, the value of the Project, the value of the furniture, fixtures and
equipment of the Project and the balance of the award.

 

(g) Temporary Taking. In the event of a taking of all or any portion of the
Property and the Project for temporary use, the foregoing provisions of this
Section 16 shall be inapplicable thereto. This Lease shall remain in full force
and effect and Tenant alone shall be entitled to make claim for, recover and
retain any award recoverable in respect of such temporary use, so long as Rent
is first paid from such award. If any portion of the award for such temporary
use is intended to cover the cost of restoring the Property and the Project to
the condition they were in prior to such temporary use, such portion of the
award shall be paid to Tenant to cover the cost of such restoration and repair.

 

17. Non-Disturbance and Attornment. Landlord shall have the right to obtain a
mortgage secured by Landlord’s interest in the Property and/or this Lease;
provided, however, that this Lease, including all of the rights of Tenant under
or pursuant to this Lease, shall be paramount to, and shall not be subject or
subordinate to, any mortgage, deed of trust or other security interest
instrument (“Mortgage”) that may now or hereafter affect Tenant’s interest in
the Property. Any Mortgage shall contain, as required terms, the express
acknowledgment that Tenant shall not be liable for the payment of the sum
secured by such Mortgage, nor for any expenses in connection with the same.
Neither such Mortgage nor any instrument collateral thereto shall contain any
covenant or other obligation on Tenant’s part to pay such debt, or any part
thereof, or to take any affirmative action of any kind whatsoever; provided,
however, that Tenant shall remain liable under this Lease notwithstanding any
foreclosure of Landlord’s interest in the Property or any transfer of title to
the Property, and provided further that Tenant shall agree to attorn to such
transferee. Such Mortgage shall expressly provide that the Mortgagee shall not
seek any money judgment against Tenant related to any Mortgage obligation of
Landlord. Each Mortgagee shall agree to a non-disturbance and attornment
agreement which will require the Mortgagee to recognize that this Lease is
superior to Mortgagee’s Mortgage, (ii) that Tenant shall be entitled to use and
occupy the Property and the Project in accordance with the terms of this Lease,
(iii) that Tenant shall be entitled to all of its rights under this Lease, (iv)
that insurance and condemnation awards and proceeds shall be disbursed as
provided in this Lease, and (v) Tenant’s possession of the Property and the
Project shall not be disturbed by Mortgagee or by any person whose rights are
acquired through foreclosure proceedings or through a deed in lieu of
foreclosure except as may be expressly provided in this Lease, and any
subsequent transferee of such rights shall be so bound provided no Event of
Default occurs and is continuing under this Lease. The non-disturbance and
attornment agreement may require (x) that as a condition to the making of any
amendment or modification to this Lease Landlord receive the prior written
consent of such Mortgagee, (y) that such Mortgagee shall receive notice of any
default claimed by or through Tenant against Landlord, and (z) that such
Mortgagee shall have the same right to cure such default as is provided the
holder of any Leasehold Mortgage obtained by Tenant. Tenant shall within 10 days
after

 

38

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receipt from Landlord execute and deliver to Landlord and Landlord’s Mortgagee
such estoppels and attornment agreements as may be required in connection with
any proposed financing or refinancing involving the Property, provided the terms
and conditions of such estoppels or attornment agreements are consistent with
the provisions of this Section 17 and the same do not constitute a modification
of this Lease.

 

18. Leasehold Mortgages.

 

(a) Right to Leasehold Mortgage. Tenant shall have the right to mortgage and to
refinance this Lease and Tenant’s leasehold estate and any improvements thereon,
including but not limited to the Project, (“Leasehold Mortgage”) at any time,
and from time to time, on any terms Tenant may deem desirable and to assign this
Lease and any existing and future subleases, license agreements and concession
agreements, and the rentals and fees payable to Tenant thereunder to the holder
of such mortgage (“Leasehold Mortgagee”), as additional collateral security for
the indebtedness secured by the Leasehold Mortgage. In connection therewith,
Landlord agrees to timely execute and deliver an estoppel certificate, a
non-disturbance agreement, and such other documents in reasonably satisfactory
form as shall be requested by any Leasehold Mortgagee, so long as such
certificates, agreements or other documents are not inconsistent with this
Lease. Any Leasehold Mortgage shall be subject and subordinate to Landlord’s
rights under this Lease and its fee interest in the Property, except as
otherwise provided herein.

 

(b) Terms of Leasehold Mortgage. If Tenant shall have executed and delivered a
Leasehold Mortgage or Mortgages and the Leasehold Mortgagee shall have notified
Landlord in writing to such effect giving its name and address:

 

(i) Landlord concurrently shall serve upon such Leasehold Mortgagee a copy of
each notice, consent, approval, request or demand given to Tenant under this
Lease including, without limitation, any notice, consent, approval, request or
demand under this Lease. No such notice to Tenant shall be deemed to have been
given nor shall be effective unless copies thereof are thus served upon the
Leasehold Mortgagee at such address and in the manner provided pursuant to the
Notice provisions hereof.

 

(ii) Subject to the provisions set forth below, such Leasehold Mortgagee shall
have the right, for a period of 30 days more than is given to Tenant, to remedy
or cause to be remedied any default which is the basis of a notice; and Landlord
shall accept performance by such Leasehold Mortgagee as performance by Tenant.
In the event that Tenant has contested an event of default, such Leasehold
Mortgagee shall be given a 20 day period after the date of a final decision
affirming the contested default within which to cure such default on behalf of
Tenant.

 

(iii) In the case of default by Tenant under this Lease which is susceptible of
being cured only when such Leasehold Mortgagee has obtained possession of the
Property and the Project, other than a default in the payment of Rent or
Additional Rent, Landlord shall take no action to effect a termination of

 

39

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this Lease by service of a notice or otherwise without first giving to such
Leasehold Mortgagee a reasonable period of time (not to exceed 6 months) within
which diligently to obtain possession of the Property and the Project (including
possession by a receiver) and to cure such default and/or diligently to
institute and complete foreclosure proceedings or otherwise acquire Tenant’s
leasehold estate under this Lease and to cure such defaults.

 

(iv) Upon acquisition of Tenant’s interest in this Lease by the Leasehold
Mortgagee, or by any purchaser of this Lease pursuant to any foreclosure
proceeding instituted by the Leasehold Mortgagee, Landlord’s right to serve a
notice of election to end the Term based upon the occurrence of any default
(other than non-payment of Rent or Additional Rent, or non-compliance with the
provisions of Sections 9,10,12,14,15 or 19) which cannot with the exercise of
due diligence be remedied by such Leasehold Mortgagee or purchaser shall be
deemed waived.

 

(v) If, prior to any foreclosure sale brought by a Leasehold Mortgagee, or if
prior to the date upon which Tenant’s interest in this Lease shall have been
otherwise acquired by Leasehold Mortgagee or other purchaser, the default in
respect of which Landlord shall have given the notice shall have been remedied
and possession of the Property and the Project restored to Tenant, the
obligation of the Leasehold Mortgagee to assume this Lease shall be null and
void and of no further effect.

 

(vi) Notwithstanding anything contained in this Section 18 to the contrary, if
for any reason this Lease shall terminate prior to the expiration of the Term,
Landlord shall give written notice thereof to the Leasehold Mortgagee. Subject
to the curing of any Event of Default and the payment of all Rent and Additional
Rent owed Landlord by the Tenant, and provided such cure occurs not later than
60 days after Landlord’s termination of this Lease, Landlord shall enter into a
new lease for the Property and the Project with the Leasehold Mortgagee or with
any person, firm, corporation or entity designated by the Leasehold Mortgagee
for the remainder of the Term, subject to approval by Landlord, which approval
shall not be unreasonably withheld or delayed as provided in clause (vii) below,
commencing as of the date of such termination, at the Rent and upon the same
terms, covenants and conditions contained in this Lease (except those which by
their terms are no longer applicable). Such new lease shall have priority equal
to this Lease. Concurrently with the execution and delivery of such new lease,
Landlord shall turn over and/or assign to the new tenant all of its right, title
and interest in and to moneys (including insurance proceeds) if any, then held
by or subsequently paid to Landlord, which Tenant would have been entitled to
receive but for such termination.

 

(vii) Landlord shall have no obligation (i) to waive Landlord’s lien rights (it
being understood and agreed that Landlord shall be required only to subordinate
such lien rights to the security interests of the Leasehold Mortgagee) or (ii)
to agree to any modification of any express term, covenant or provision of

 

40

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this Lease, including, without limitation, the disposition of the proceeds of a
condemnation or casualty contrary to the provisions of this Lease. Landlord’s
refusal to accept any proffered successor tenant or operator of the Project
shall be deemed reasonable to the extent such party fails to meet any of the
Stated Criteria. Tenant shall require any Mortgagee to provide Landlord with
notice of any default under the terms of any loan agreements, mortgages or
promissory notes entered or provided to the Mortgagee. In the event Landlord
shall refuse to approve a successor to Tenant proffered by the Leasehold
Mortgagee, the sole remedy available to the Leasehold Mortgagee shall be to
commence arbitration proceedings in accordance with the provisions of Section
30. The arbitrators shall either approve or disapprove the proposed successor
based on compliance with the Stated Criteria and shall make no other award or
determination.

 

19. Indemnification.

 

(a) Indemnity Generally. Tenant shall defend, pay, indemnify and hold harmless
Landlord and its agents, employees, servants and representatives (together, the
“Indemnified Parties”) from and against any and all claims, demands, injuries,
damages, fines, penalties, lawsuits, actions, proceedings, orders, decrees,
judgments or liability of any kind or nature by or in favor of anyone whomsoever
and from and against any and all costs and expenses incurred by any of the
Indemnified Parties, including reasonable attorneys’ fees and expenses,
resulting or arising from or in connection with (i) any accident, bodily injury,
death, personal injury, or property damage arising out of any work performed by
Tenant or in connection with Tenant’s management or operation of the On-Site
Project, including without limitation Tenant’s operation of gaming activities or
the Casino; (ii) any use, occupancy, non-use, or condition of the Project during
the term of this Lease, including any failure to comply with applicable
Governmental Requirements; and (iii) any failure on the part of the Tenant to
perform or comply with any of the terms, covenants and conditions of this Lease.

 

(b) Defense. In case any action, suit or proceeding is brought against any of
the Indemnified Parties by reason of any occurrence described in clauses (i)
through (iv) of subsection (a) above, Tenant or Tenant’s insurer, upon the
request of Landlord, will, at no expense to Landlord or the Indemnified Party,
resist and defend such action, suit or proceeding or cause same to be resisted
and defended by counsel reasonably acceptable to Landlord. The obligations of
Tenant under this Section shall survive the termination of this Lease.

 

(c) Environmental Indemnity and Release. In addition to the foregoing, Tenant
agrees to indemnify and hold harmless the Indemnified Parties and to defend them
against any lawsuits or claims for any liability, injuries, damages, penalties
or fines (including reasonable attorneys’ fees and expenses) arising from or
relating to the disposal, discharge, release or spilling into or onto the air,
water, soil, sewer system or similar media of any Hazardous Substance which
disposal, discharge, release or spill, whether accidental or intentional, occurs
on, within or from the Project (including the Casino, wherever located) during
the Term except to the extent such disposal, discharge, release or spill is
caused by the negligent or willful misconduct of Landlord, its agents,

 

41

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employees, servants or representatives, provided that negligence or willful
misconduct shall not be alleged solely on the basis of Landlord’s ownership or
control of the Property or on any action or inaction on the part of Landlord
with respect to the remediation of Hazardous Substances released on or from the
Property by parties other than any of the Indemnified Parties.

 

(d) Survival of Indemnity. The provisions of this Section 19 shall survive any
termination of this Lease.

 

20. Right of Entry. Landlord and its authorized agents and employees shall, upon
reasonable notice and during all reasonable business hours, have the right to
enter upon the On-Site Project to examine same; provided, however, that any such
entry shall not interfere with Tenant’s use or the operation of the On-Site
Project, and provided further that Tenant shall have the right to have a
representative or employee of Tenant accompany any such inspection by Landlord.
Landlord shall have the right from time to time to inspect the Property and to
conduct tests and evaluations to confirm whether Hazardous Substances have been
released on or from the Property in violation of applicable Governmental
Requirements as a result of Tenant’s operations on the Property during the Term
of the Lease. Such tests shall be conducted at Landlord’s sole risk, cost and
expense, except that if it is determined that Tenant shall have caused such a
release of Hazardous Substances, then Tenant shall, in addition to performing
such remediation as may be required, pay to Landlord all costs incurred by
Landlord in connection with such tests and evaluations, and such additional
tests and evaluations as Landlord may conduct to confirm satisfactory completion
of Tenant’s remediation work.

 

21. Limitation of Claims. Landlord shall not be responsible for any damage or
loss to the On-Site Project, its furnishings, fixtures, equipment or other goods
thereon due to any cause whatsoever, including, but not limited to, theft,
vandalism, public disorder, fire, weather, collisions, floating or underwater
hazards. Additionally, Landlord shall not be responsible for any damage or
injury to Tenant’s patrons, wherever located, arising from any source, and
Tenant shall perform all acts necessary to provide for the safety of its patrons
while on the Property or in the On-Site Project. Upon any sale of the Property
by Landlord, Landlord shall be released from all obligations and liabilities
accruing under this Lease prior to the effective date of such sale, provided the
transferee shall expressly assume and agree to perform for the benefit of Tenant
all obligations of Landlord under this Lease accruing after the effective date
of such transfer.

 

22. Attorneys’ Fees and Expenses. Except as otherwise expressly provided in this
Lease, each party shall pay its own attorneys’ fees and expenses in connection
with any matter arising under this Lease.

 

23. Late Payments. Late payments shall be subject to a 3% penalty and interest
on late payments shall accrue from the date of delinquency until paid at the
rate of 2% in excess of the from time to time publicly announced prime rate of
interest of Bank of America, N.A.

 

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24. Tenant’s Right to Terminate the Lease. Notwithstanding any other provision
of this Lease to the contrary, Tenant may terminate this Lease and surrender the
Property to Landlord in accordance with the provisions of this Section 24. From
and after the Commencement Date, except for a termination occurring pursuant to
Section 3(b), Tenant may terminate this Lease and surrender the Property to
Landlord upon 120 days prior written notice to Landlord of Tenant’s early
termination and Tenant’s payment to Landlord at the expiration of said 120 day
notice period of the following sums:

 

Lease Year

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

   Amount

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

1

   $ 20,000,000

2

   $ 16,000,000

3, 4 or 5

   $ 12,000,000

6 or after

   $ 4,000,000

 

(Such payment shall be referred to herein as the “Termination Payment”.) The
Termination Payment shall not be prorated and shall be due and payable in
addition to, and not in lieu of, Rent and Additional Rent under Section 5 and
damages under Section 4(h) or 4(i) if applicable, which, in any instance, have
accrued but remain unpaid prior to the effective date of termination and
Tenant’s final surrender of the Property as provided for herein. Upon any such
termination of the Lease by Tenant, the parties hereto shall have no further
obligations under the Lease, except, that Tenant shall remove all of Tenant’s
trade fixtures, movable equipment, furnishings and other personalty from the
Property, and, upon the request of Landlord (made during the 120 day notice
period), Tenant shall demolish and remove all improvements placed on the
Property by Tenant.

 

25. Default and Remedies.

 

(a) Tenant’s Default. It shall be an Event of Default if any one or more of the
events described in the following clauses (i) through (viii) shall occur and be
continuing after expiration of the applicable notice and cure period provided
for in such clause or otherwise provided for in subsection (b):

 

(i) if default be made in the punctual payment of any Rent payable to Landlord
hereunder, when and as the same shall become due and payable, and such default
shall continue for a period often (10) days after written notice to Tenant
(except that Landlord shall not be required to deliver notice of non-payment of
Rent on more than two occasions during any Lease Year), or if default be made in
the punctual payment of any Additional Rent payable hereunder, when and as the
same shall become due and payable, and such default shall continue for a period
of thirty (30) days after written notice to Tenant;

 

(ii) if this Lease be mortgaged by Tenant except as provided in Section 18, or
if this Lease be assigned or the On-Site Project (including the Casino) or any
part thereof be sublet, except as provided in Section 12;

 

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(iii) except for abandonments and terminations allowed under Section 24, if
Tenant shall abandon the Work or the On-Site Project or the Off-Site Project, or
if Tenant shall otherwise fail to continuously or fully operate the On-Site
Project after Project Opening as required under Section 11;

 

(iv) if Tenant shall fail to timely file its application for Gaming Licensure,
or if Tenant shall withdraw or effectively abandon such application prior to
termination of this Lease in accordance with its terms or, after first obtaining
Gaming Licensure, if Tenant for any reason ceases to be licensed to conduct a
gaming operation at the Project pursuant to the laws of the State of Missouri;

 

(v) if Tenant shall fail to observe, perform or comply with any of the terms,
covenants and conditions in this Lease other than those specified in subsections
(i) through (iv) above, within 30 days after notice from Landlord specifying the
nature of such default;

 

(vi) if Tenant shall file a voluntary petition in bankruptcy or shall be
adjudicated bankrupt or insolvent or shall file any petition or answer seeking
any reorganization, readjustment, liquidation, dissolution or similar relief
under any bankruptcy or insolvency statute or law of the United States or any
State, or shall seek or consent to or acquiesce in the appointment of any
bankruptcy or insolvency trustee, receiver or liquidator of Tenant, or of all or
any substantial part of its properties or the Project;

 

(vii) if within 60 days after the commencement of any involuntary proceeding
against Tenant seeking reorganization, readjustment, liquidation, dissolution or
similar relief under any bankruptcy or insolvency statute or law, Tenant fails
to secure a dismissal and discharge thereof;

 

(viii) if Tenant shall make a material misrepresentation in any representation
or warranty provided to Landlord under this Lease.

 

(b) Cure or Remedies. No Event of Default shall be deemed to have occurred under
clauses (ii) through (viii) unless Tenant shall fail to cure such default within
30 days after delivery by Landlord of written notice of such default to Tenant,
unless the same cannot be cured within 30 days, in which event an Event of
Default shall not be deemed to have occurred if Tenant commences the cure of
such default within 30 days and thereafter diligently pursues such cure to
completion. Upon an Event of Default, Landlord, at its option, may at any time
thereafter declare this Lease and all rights of Tenant under this Lease as
expired and terminated and Tenant shall remain liable as hereinafter provided.

 

(c) Surrender of Property. Upon any such expiration or termination of this
Lease, Tenant shall quit and peacefully surrender the Project to Landlord, and
Landlord, upon any such expiration or termination, may without further notice
enter upon and re-enter the Project and possess and repossess itself thereof, by
force, summary

 

44

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proceedings, ejectment or otherwise, and may dispossess Tenant and remove Tenant
and all persons and property from the Project.

 

(d) Reletting of Property. If this Lease shall expire or be terminated, or if
the Project or any part thereof shall be abandoned by Tenant, or shall become
vacant during the Term, Landlord may in its own name, or as agent for Tenant if
this Lease not be terminated, enter into possession of and relet the Project or
any part thereof for such term or terms (which may be greater or less than the
period which would otherwise have constituted the balance of the Term) and on
such conditions as Landlord, in its discretion, may determine and may collect
and receive the rents therefor.

 

(e) Direct Damages. In the event of Landlord’s termination of this Lease under
this Section 25, in lieu of all other damages (other than those set forth in
subsection (f) below), Tenant shall pay Landlord the liquidated sums described
below:

 

Lease Year

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

   Amount

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

1

   $ 20,000,000

2

   $ 16,000,000

3, 4 or 5

   $ 12,000,000

6 or after

   $ 4,000,000

 

(f) Additional Damages. If this Lease be terminated by Landlord as provided in
this Section 25, or if the Project is abandoned or becomes vacant in a manner
not allowed under Section 24, and whether or not the Project be relet, Landlord
shall be entitled to recover from Tenant, and Tenant shall pay to Landlord, in
addition to the liquidated damages becoming due under subsection (e) above, the
following: Rent and Additional Rent under Section 5 and damages under Section
4(h) or 4(i) if applicable, which, in any instance, have accrued but remain
unpaid prior to the effective date of termination and Tenant’s final surrender
of the Property as provided for herein, all expenses, if any, including
reasonable attorneys’ fees, incurred by Landlord in recovering possession of the
Project (whether or not litigation be commenced in aid thereof), repairing any
damage to the Project, and all reasonable costs and charges for the care of said
Project while vacant, which damages shall be due and payable by Tenant to
Landlord at such time or times as such expenses are incurred by Landlord. Tenant
hereby expressly waives, as far as permitted by law, the service of any notice
of intention to re-enter provided for in any statute, and except as is herein
otherwise provided Tenant, for and on behalf of itself and all persons claiming
through or under Tenant (including any leasehold mortgagee or other creditor),
also waives any and all right of redemption or re-entry or repossession in case
Tenant shall be dispossessed by a judgment or by warrant of any court or judge
or in case of re-entry or repossession by Landlord or in case of any expiration
or termination of this Lease except as expressly provided in this Lease. The
terms “enter,” “re-enter,” “entry” or “re-entry” as used in this Lease are not
restricted to their technical legal meanings.

 

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(g) Waiver of Automatic Stay. In view of the public interest in the integrity of
the gaming process and the involvement of the County and Landlord in the
Project, in the event of any voluntary or involuntary petition in bankruptcy
involving Tenant, Tenant hereby waives, to the fullest extent permitted by law,
any right it may have to object to the waiver of vacation of the automatic stay
in all respects as to the rights of Landlord under the Lease.

 

(h) Waiver of Jury Trial. Tenant and Landlord hereby waive all right to trial by
jury in any action or proceeding hereafter instituted by either Landlord or
Tenant against the other with respect to this Lease or the Project.

 

(i) Additional Remedies. In the event of any breach by Tenant of any of the
agreements, terms, covenants or conditions contained in this Lease, Landlord
shall have the right to invoke any right and remedy allowed at law or in equity
including the right to seek specific performance of Tenant’s obligations under
this Lease and to enjoin violations of this Lease by Tenant.

 

(j) Landlord’s Default. It shall be an event of default on the part of Landlord
(a “Landlord Default”) if any one or more of the events described in the
following clauses (i) through (iii) shall occur and be continuing after
expiration of the applicable notice and cure period provided for in such clause:

 

(i) Landlord shall fail to make any payment which Landlord agrees to make to or
for the benefit of Tenant pursuant to Section 2 or to otherwise cure on a timely
basis any objection raised by Tenant under Section 2 which Landlord has
theretofore agreed in writing to cure, after 30 days prior written notice to
Landlord;

 

(ii) Landlord shall make a material misrepresentation in any representation or
warranty provided to Tenant under Section 8(b) of this Lease, and such
misrepresentation shall materially and adversely affect any right or benefit
available to Tenant under this Lease; or

 

(iii) Landlord shall breach any express covenant of Landlord under this Lease
and shall fail to cure such breach within 30 days after notice from Tenant
specifying the nature of such breach, unless the same cannot be cured within 30
days, in which event Landlord shall not be deemed in default provided Tenant
commences the cure of such default within 30 days and thereafter diligently
pursues such cure to completion.

 

If a Landlord Default shall occur, Tenant shall have the right to pursue any
remedy available to Tenant at law or in equity on account of such Landlord
Default; provided, however, in no event shall Tenant be entitled to (i)
withhold, deduct or offset Rent or Additional Rent, (ii) seek or recover
expenses incurred by Tenant or consequential damages (such as for lost profits)
from Landlord, or (iii) seek or recover damages or equitable relief in violation
of the provisions of Sections 19(c) or Section 21. In all

 

46

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events, any recovery of monetary damages by Tenant shall be limited solely to
the interest of Landlord in the Property, which shall include the Rentals and
avails thereof.

 

26. Remedies Cumulative. Each right and remedy provided for in this Lease shall
be cumulative and shall be in addition to every other right or remedy provided
for in this Lease or now or hereafter existing at law or in equity or by statute
or otherwise, and the exercise or beginning of the exercise by Landlord or
Tenant or any one or more of the rights or remedies provided for in this Lease
or now or hereafter existing at law or in equity or by statute or otherwise
shall not preclude the simultaneous or later exercise by Landlord or Tenant of
any or all other rights or remedies provided for in this Lease or now or
hereafter existing at law or in equity or by statute or otherwise.

 

27. Surrender of Property. Upon the expiration or termination of this Lease,
Tenant agrees to quit and surrender the Property, clean and free of any and all
hazardous or toxic substances, hazardous wastes, infectious wastes, solid waste,
pollutants and contaminants which were released, spilled or discharged into or
on the Project during the Tenant’s tenancy and in the same condition and repair
as on the date of execution hereof, and Tenant shall remove the all or such
portion of the Project, at the discretion of Landlord, and any other
improvements, fixtures or structures installed or located within the Property or
any public right of way at Tenant’s sole cost and expense and without expense to
Landlord. If Tenant shall fail to remove any of Tenant’s property within 30 days
after the receipt of notice of termination or expiration of this Lease, Tenant’s
property shall, at the option of Landlord, either be deemed abandoned and become
the exclusive property of Landlord, or Landlord shall have the right to remove
Tenant’s property at the expense of Tenant, without further notice to or demand
upon Tenant and hold Tenant responsible for any and all charges and expenses
incurred by Landlord therefor. If the Property is not surrendered as and when
aforesaid, Tenant shall indemnify Landlord against all loss or liability
resulting from the delay of Tenant in so surrendering the same including without
limitation, any claims made by any succeeding occupant founded on such delay.
Tenant’s obligations under this Section shall survive the expiration or sooner
termination of the Term.

 

28. Cure of Tenant’s Default. If Tenant shall fail to make any payment or
perform any act required hereunder to be made or performed by Tenant then
Landlord may, but shall be not be obligated to, make such payment or perform
such act with the same effect as if made or performed by Tenant. Entry by
Landlord upon the Project for such purpose shall not waive or release Tenant
from any default or obligation hereunder. Tenant shall reimburse Landlord for
all sums paid and all costs incurred by Landlord in performing the obligations
of Tenant hereunder, including attorneys’ fees, upon Landlord’s demand therefor
which shall be Additional Rent hereunder.

 

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29. Notices. All notices, demands, request or other communications (“notices”)
required or permitted by this Lease shall be in writing and shall be deemed to
be received when actually received by any person at the intended address if
personally served or if sent by courier or facsimile, whether actually received
or not, twenty-four (24) hours after the date and time of delivery to a
nationally recognized courier, addressed as follows:

 

To Landlord:

  

St. Louis County Port Authority

Economic Council of St. Louis County

121 South Meramec, Suite 900

Clayton, Missouri 63105

Attention: Director of Real Estate

Copies to:

  

Economic Council of St. Louis County

121 South Meramec, Suite 900

Clayton, Missouri 63105

Attention: General Counsel

    

St. Louis County

41 South Central

Clayton, Missouri 63105

Attention: County Counselor

If to Tenant:

  

Pinnacle Entertainment, Inc.

3800 Howard Hughes Parkway, Suite 1800

Las Vegas, Nevada 89109

Attention: John A. Godfrey, General Counsel

Copies to:

  

Lathrop & Gage, L.C.

10 South Broadway, Suite 1300

St. Louis, Missouri 63102

Attention: Jerry Riffel

 

Either party may, in substitution of the foregoing, designate a different
address and addresses within the continental United States for purposes of this
section by written notice delivered to the other party in the manner prescribed,
at least ten (10) days in advance of the date upon which such change of address
is to be effective. Any notices relating to maintenance shall be given to those
parties locally responsible as hereinafter designated by the parties upon
completion of the anticipated improvements.

 

30. Arbitration of Certain Disputes.

 

(a) Arbitration of Specific Disputes. In the event of a dispute between the
parties pursuant to Sections 7, 9, 10, 11, 12, 14, 15, 16 or 18, the issue
requiring resolution may be submitted by either party to expedited arbitration
in accordance with the following procedures:

 

(b) Arbitration Procedures. Arbitration shall be commenced by written notice
thereof from the party seeking arbitration to the other party. Not later than 10
days after delivery of such notice, each party shall select an independent
arbitrator who shall be an attorney licensed to practice law in any state and
practicing law for not less than 20 years. Not later than 20 days after their
selection, the two arbitrators shall jointly select a third arbitrator having
the same qualifications as themselves. The arbitration panel shall meet and
determine the rules for submission and hearing of

 

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evidence and so advise Landlord and Tenant not later than 10 days after their
selection. The panel shall convene and conduct a hearing according to the rules
established by them and shall render a written decision which shall be binding
on the parties not later than 60 days after the date the third arbitrator has
been selected. The decision of the arbitration panel shall be final and binding
on the parties. Each party shall bear the fees and expenses of its own
arbitrator and shall share equally in the payment of the fees and expenses of
the third arbitrator.

 

31. Estoppels. Each party acknowledges that from time to time the other party
may request, for the benefit of third parties, information relating to the
effectiveness of this Lease, whether this Lease has been modified or amended,
the status of payments of Rent and Additional Rent due hereunder, whether an
Event of Default or a Landlord Default has occurred and is continuing, and other
information reasonably and customarily required by lenders, accountants and
other parties having an interest in the Project, or in Landlord or Tenant and
their respective operations. Each party agrees to respond in writing to any
request it may receive from the other party within 10 days after its receipt of
such request, and to provide all such requested information.

 

32. Relationship of Parties. Nothing contained in this Lease shall be deemed to
constitute or be construed or implied to create the relationship of principal
and agent, partnership, joint venture or any other relationship between the
parties hereto, other than the relationship of the landlord and tenant. The term
“Landlord” as used in this Lease means only the owner of the current interest of
Landlord in the Property or, as the case may be, the successor thereto from time
to time.

 

33. No Broker. Tenant covenants, warrants and represents to Landlord that there
was no broker instrumental in consummating this Lease and that no conversations
or prior negotiations were had by Tenant with any broker concerning the renting
of the Property. Tenant agrees to indemnify and hold the Landlord harmless
against and from all liabilities, including reasonable attorneys’ fees, arising
from any claims for brokerage commissions or finders’ fees resulting from or
arising out of any conversations or negotiations had by Tenant directly with any
broker.

 

34. Conflict of Interest. The parties agree to abide by all Governmental
Requirements relating to conflict of interest. Additionally, but not in
limitation of the foregoing, no member, officer, commissioner or employee of
Landlord or any branch of County government who has any power of review or
approval of any of the undertakings herein, shall participate in any decisions
relating thereto which affect his/her personal interests or the interests of any
corporation or partnership in which he or she is directly or indirectly
interested. No member, official or employee of Landlord shall have any personal
interest direct or indirect, in this Lease, nor participate in any decisions
relating thereto which affect his or her personal interests or the interests of
any corporation or partnership in which he or she is directly or indirectly
interested. In the construction and/or operation of the Project, Tenant shall
not knowingly, after due inquiry, employ or contract with any person if a member
of his or her immediate family is a member, officer, commissioner or employee of
Landlord or any branch of County government in an administrative capacity, by
which is meant those who have selection,

 

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hiring, supervisory or operational responsibility for the work to be performed
pursuant to this Lease. For the purposes of this section, “immediate family”
includes: wife, husband, son, daughter, mother, father, brother, sister,
brother-in-law, sister-in-law, father-in-law, mother-in-law, aunt, uncle, niece,
nephew, step-parent and stepchild.

 

35. Entire Lease. This Lease sets forth the entire agreement between the
parties. There are no understandings, agreements, statements, promises, or
representations or warranties, express or implied, in respect of the Property,
the Project or this Lease Which are not specified herein. This Lease shall not
be modified, amended or supplemented except by a writing subscribed to by the
party to be charged, nor may this Lease be canceled by Tenant or the Project
surrendered except in accordance with the express provisions of this Lease.

 

36. Survival of Covenants. All representations, warranties and indemnities set
forth in this Lease shall survive the execution hereof.

 

37. Binding Effect. This Lease binds the parties hereto and inures to the
benefit of their respective heirs, personal representatives, successors or
assigns.

 

38. Time of the Essence. Time is of the essence with respect to the performance
of this Lease and each and every provision contained herein.

 

39. Venue. If and in the event of a dispute arising hereunder, venue shall be
vested in the Circuit Court of St. Louis County, State of Missouri. Tenant
acknowledges that it has negotiated this Lease in the County, and has made
numerous business contacts and entered into agreements relating to real estate
and other matters sufficient to confer jurisdiction of the courts of St. Louis
County, State of Missouri.

 

40. Authorization and Capacity. The parties hereto represent to each other that
each has the full right, power and authority to enter into this Lease and to
fully perform its obligations. The persons executing this Lease warrant and
represent that each has the authority to execute in the capacity stated and to
bind the parties hereto.

 

41. Third-Party Beneficiaries. Landlord and Tenant are the only parties to this
Lease and the only parties capable of or entitled to the enforcement of such
provisions. Each party confirms that no other parties are intended to be third
party beneficiaries of any covenant or provision of this Lease. Notwithstanding
the foregoing provisions of this Section 41, the parties acknowledge that the
County shall be a third party beneficiary of Tenant’s designation of the County
as the “home dock” for the Project.

 

42. Severability. In the event any provision of this Lease is rendered void or
unenforceable by a court of competent jurisdiction, the remaining provisions of
this Lease shall be construed so as to constitute a complete agreement, and this
Lease, as so reformed, shall remain in full force and effect.

 

43. Non-Waiver Provision. Failure by either party hereto, at any time, to
require the performance by the other of any term of this Lease, shall not in any
way

 

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effect the right of either party to enforce such terms, nor shall any waiver by
either party of any term hereof be taken or held to be a waiver of any other
provision of this Lease. No waiver of any term or provision of this Lease shall
be effective unless the same is in writing, signed by the parties hereto.

 

44. Governing Law. This Lease is entered into in the State of Missouri and shall
be construed, enforced and governed, as to both validity and performance, in
accordance with the laws of the State of Missouri and all of the rights and
obligations of the parties hereunder shall be determined in pursuant to the laws
of the State of Missouri.

 

45. Recording of Lease. From and after the Commission Acceptance Date, either
party may, at its own expense, cause a memorandum of this Lease, approved by the
other party, to be recorded in the Office of the Recorder of Deeds for the
County of St. Louis.

 

46. Exhibits. All exhibits attached to this Lease are incorporated herein and
made part hereof by reference.

 

47. Headings. The captions, headings and arrangements in this Lease are for
convenience only and do not in any way define, limit or modify the terms or
provisions hereof.

 

48. Number and Gender of Words. Whenever the singular number is used in this
Lease, the same shall include the plural where appropriate and words of any
gender shall include the other gender where appropriate.

 

49. Business Days. Except as provided in Section 11, whenever it is provided in
this Lease that an event shall occur on a day which is a Saturday, Sunday or
legal holiday in the State of Missouri, such event shall occur instead on the
next business day.

 

50. Approval of the Board of Directors of Tenant. This Lease is subject to the
approval of the Board of Directors of Tenant. In the event Tenant shall fail to
provide to Landlord a resolution of the Board of Directors approving this Lease
within one business day next following the Effective Date, this Lease shall be
null and void and neither party shall have any further obligation or liability
to the other hereunder.

 

51. Multiple Counterparts. This Lease may be executed in a number of identical
counterparts and if so executed, each such counterpart is deemed an original for
all purposes, and all such counterparts shall collectively constitute one Lease.

 

SIGNATURE PAGE FOLLOWS

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Lease as the date
first above written.

 

THIS LEASE CONTAINS A BINDING ARBITRATION PROVISION

WHICH MAY BE ENFORCED BY THE PARTIES

 

LANDLORD:

ST. LOUIS COUNTY PORT

AUTHORITY

By:   /s/    DENNIS G. COLEMAN            

Name:

  Dennis G. Coleman    

Title:

  Executive Director

 

APPROVED AS TO FORM

/s/    STEVE KORENBLAT         Counsel, Economic Council of St. Louis County

 

TENANT:

PINNACLE ENTERTAINMENT, INC.

By:   /s/    JOHN A. GODFREY            

Name:

  John A. Godfrey    

Title:

  Senior VP, Secretary & General Counsel

 

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Exhibit A

 

Parcel No. 1:

 

Part of Blocks 1 and 2 of ALLEN’S SUBDIVISION in the CHOUQUETTE TRACT in U.S.
Survey 904, Township 44 North, Range 7 East, St. Louis County, Missouri and
being more particularly described as follows:

 

Beginning at the Southwest comer of property described as Tract No. 3, in deed
to the National Lead Company, recorded in Book 2269, Page 137, St. Louis County
Recorder’s office, being in the Eastern line of the Missouri Pacific Railroad
Company, right-of-way, 80 feet wide; thence North 1 degree 15 minutes East
796.50 feet along the Western line of said National Lead Company property, and
along the Eastern line of said Missouri Pacific Railroad Company, right-of-way,
to the Northwestern comer of said National Lead Company property, in the
Southern line of East Ariee Avenue, 30 feet wide; thence North 89 degrees 59
minutes East 136.04 feet along the Northern line of said National Lead Company
property, and along the Southern line of said East Ariee Avenue, to the
Northeastern line of said National Lead Company property; thence South 37
degrees 49 minutes East 14.83 feet along the Northeastern line of said National
Lead Company property, to the Western line of property described as Tract No. 1,
in said deed to the National Lead Company, recorded in said Book 2269, Page 137;
thence North 22 degrees 11 minutes East 437.86 feet, North 29 degrees 07 minutes
East 453.32 feet, and North 41 degrees 11 minutes East 475.93 feet along the
Western line of said property described as Tract No. 1 in said deed to the
National Lead Company, to its Northwestern corner, being also the Southwestern
comer of property described in deed to the National Lead Company, recorded in
Book 2667, Page 190, St. Louis County Recorder’s Office; thence North 28 degrees
45 minutes East 547.99 feet along the Western line of said property described in
deed to the National Lead Company, recorded in said Book 2667, Page 190, to its
intersection with the Western line of property described in deed to the National
Lead Company, recorded in Book 3727, Page 1, St. Louis County Recorder’s Office;
thence North 7 degrees 41 minutes East 270.57 feet North 33 degrees 14 minutes
East 41229 feet, and North 45 degrees 39 minutes East 308.34 feet along the
Western line of said property described in deed to the National Lead Company,
recorded in said Book 3727, Page 1, to its most Northern comer, being also the
Northwestern comer of property described in deed to the National Lead Company,
recorded in Book 1672, Page 509, and re-recorded in the Deed of Correction, in
Book 1701, Page 501, St. Louis County Recorder’s Office; thence South 58 degrees
00 minutes East 67.16 feet along the Northern line of said National Lead Company
property, described in deed re-recorded in said Book 1701, Page 501, to its
Northeastern comer, being in the Western line of property described in deed to
National Pigments & Chemical Company, recorded in Book 1238, Page 99, St. Louis
County Recorder’s Office; thence North 32 degrees 00 minutes East 346.52 feet
and North 40 degrees 59 minutes East 69.47 feet along the Western One of said
National Pigments & Chemical Company property, to its Northwestern comer in the
Southern line of the River Des Peres Drainage Works, right-of-way, 280 feet
wide; thence South 50 degrees 01 minutes 30 seconds East 675 feet more or less,
along the Northern line of said National Pigments & Chemical Company property,
and along the Southern line of said River Des Peres Drainage Works,
right-of-way, to the Mississippi River; thence Southwardly 3800 feet more or
less, along the Mississippi river, to the Southern line of said property
described as Tract No. 3 in deed to the National Lead Company, recorded in said
Book 2269, Page 137; thence North 67 degrees 49 minutes West 735 feet, more or
less, and North 90 degrees 00 minutes West 112.19 feet along the Southern line
of said property described as Tract No. 3, to its Southwestern comer in the
Eastern line of said Missouri Pacific Railroad Company, right-ofway, and the
point of beginning, according to survey executed by Pitzman’s Co. Surveyors &
Engineers during the month of June 1987.

 

Parcel No. 2:

 

Easement for ingress and egress for the benefit of the land described herein as
Parcel No. 1 as created and established by General Warranty Deed and Agreement
dated July 19, 1923, executed by and between Casper P. De Lore and Amalia De
Lore, his wife, and Titanium Pigment Company, Inc., recorded July 26, 1923 in
Book 607 Page 98, as confirmed and affected by instrument recorded August 16,
1933 in Book 1238 Page 99.

 

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Parcel No. 3:

 

Easement for ingress and egress for the benefit of the land described herein as
Parcel No. 1 as created and established by City of St. Louis Ordinance No.
40034, approved April 12, 1933 and Grant of Easements, dated as of August 1,
1933, executed by and between Casper P. De Lore, otherwise known and designated
as C. P. De Lore and Amalia De Lore, his wife and National Pigments & Chemical
Company, recorded August 16, 1933 in Book 1255 Page 96.

 

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EXHIBIT B

 

[MAP APPEARS HERE]

 

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EXHIBIT C

 

Essential Elements

 

     PINNACLE ENTERTAINMENT, INC. COMMITMENT Total Project Investment:    $300
million Casino size:   

90,000 sq. ft. — on a single level

 

3,000 slots

 

60 tables

Gaming Facilities to further include:   

100 hotel rooms

 

1 multiplex movie theatre and 1 multi-lane bowling alley

Commercial Facilities:    280,000 square feet of a combination of retail,
commercial and/or entertainment Community Facilities:   

Hatch shell to be developed by Tenant on Park Property.

 

At least one baseball field and at least one soccer field, together costing a
minimum of $100,000, to be developed on the Park Property or in Lemay as
determined by Landlord and Tenant.

 

Aquatic Center to be developed in Lemay in location to be selected by Landlord.

Parking    Parking will include parking garage and surface parking sufficient to
serve the Project Restaurants/ Entertainment Lounge    At least one
entertainment venue and restaurants (included in either or both of the Gaming
Facilities or the Commercial Facilities). Retail and Other Amenities:    Gift,
retail shops, full service salon and spa (included in either or both of the
Gaming Facilities or the Commercial Facilities). Infrastructure/ Improvements   
Project Roadway

 

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EXHIBIT D

 

[MAP APPEARS HERE]