EXHIBIT
10.12


 


AMENDED AND RESTATED


CONSULTING AGREEMENT


 


THIS AMENDED AND RESTATED CONSULTING AGREEMENT (this “Agreement”), to be effective only upon
the closing of the Refinancing (as hereinafter defined), and upon such closing
shall be deemed to have been effective as of the 1st day of January,
2006 (“Amendment and Restatement Date”), by and between Jacobs Entertainment,
Inc., a Delaware corporation (the “Company”), and Jacobs Investments Management
Co., Inc., an Ohio corporation (the “Consultant”).


 


RECITALS


 


A.           Consultant owns, operates and
develops various retail, commercial and residential real estate development
projects;


 


B.            Company owns, operates and develops
various land-based casinos, video draw poker truck stops, a thorough-bred race
track facility and off-tract betting parlors, in addition to other businesses (collectively,
the “Business”);


 


C.            Company desires to
retain Consultant as a consultant to assist in the development of new projects
and the expansion of existing projects, on the terms and subject to the conditions
hereinafter provided;


 


D.            Company and Consultant had
previously entered into that certain Consulting Agreement, dated January 1,
2003, which is hereby replaced, amended and restated, in toto,
by this Agreement as of the Amendment and Restatement Date; and


 


E.            Company is anticipating refinancing
its 117/8% Senior Secured Notes due 2009 (the “Refinancing”).


 


NOW THEREFORE, in consideration of the mutual covenants and premises
set forth herein, the parties agree as follows:


 


1.            Incorporation. The foregoing recitals are incorporated
herein as if fully rewritten herein.


 


2.            Relationship of Parties.  Company hereby retains Consultant and
Consultant hereby agrees to serve as a consultant to Company, upon the terms
and subject to the conditions hereinafter set forth. Consultant shall be an
independent contractor and shall not be an employee of or a joint venturer with
the Company.


 


3.             Term. Subject to Section 7 of this Agreement, the
term during which Consultant shall render services hereunder (the “Consulting
Term”) shall begin on the Amendment and Restatement Date (also referred to as the
“Commencement Date”) and continue until December 31, 2026 (“Termination Date”).
The parties may extend the Consulting Term on such terms and subject to the conditions
upon which they shall mutually agree.


 

















 


4.            Scope of Duties. During the Consulting Term, Consultant shall
provide Company with consulting services from time to time to assist Company in
connection with the Business. This shall include such consulting services as
the Company may from time to time reasonably direct and Consultant shall devote
its best efforts to the Business while performing the services. It is
understood and agreed that Consultant is free at all times to arrange the time
and manner of performing the consulting services requested by Company and they
shall in no event require Consultant to be active in the day-to-day operations
of the Company, unless the parties shall otherwise agree.


 


5.            Compensation. Subject to the provisions of this Agreement,
Consultant shall be entitled to receive the following Base Fee, Development Fee
and reimbursement of expenses:


 


(a)       Base
Fee. Consultant shall receive as compensation for rendering its services
hereunder the sum of ONE MILLION TWO HUNDRED
FIFTY THOUSAND DOLLARS   AND   00/100  
DOLLARS ($1,250,000.00) per year (the “Base Fee”). The Base
Fee shall be payable in two equal payments of Six Hundred Twenty-Five Thousand
and no/100 Dollars ($625,000.00) on each of  January 1st   and July 1st of each year during the
Consulting Term.


 


(b)  Development
Fee. In addition to all other compensation hereunder and not in lieu
thereof, Consultant shall be entitled to a development fee (“Development Fee”)
equal to two and one-half percent (2.5%) of the Budgeted Cost (as hereinafter
defined) of any Development (as hereinafter defined) undertaken by Company, to
be paid the first day of each calendar quarter, in arrears, ratably as Budgeted
Costs of each Development are incurred, or as the parties may otherwise agree
in writing.


 


(i)            “Development” shall mean any
construction of any new facility undertaken by the Company or any expansion of
any existing facility owned by the Company, including the acquisition of any
real property, in which construction, expansion or acquisition Consultant has
been asked to participate by the Company;


 


(ii)           “Budgeted Cost” shall mean the budget
for the Development as agreed upon between the Company and the Consultant and
any approved changes thereto; provided, however, “Budgeted
Cost” shall not include any actual cost overruns or savings; and


 


(iii)          “Development” shall specifically
include each of the following projects that are pending as of the Amendment and
Restatement Date: (i) the acquisition of real property across from the Lodge
Casino in Blackhawk, Colorado; (ii) the acquisition and development of real
property and improvements in DakotaWorks, Blackhawk, Colorado; (iii) the
acquisition and development of real property and improvements in Elko, Nevada;
and (iv) the renovation of the Lodge Casino as part of the “South Entrance and
Trash Room” Project.


 


(c)
Reimbursement. Company shall reimburse Consultant for all reasonable
business expenses, including those for travel and transportation, incurred by
it for or on behalf of Company directly in performance of its duties under this
Agreement provided such expenses shall be authorized by the Company. For such
purpose, Consultant shall submit to Company expenses vouchers and reports of
such expenses and other disbursements in accordance with the standard
procedures of Company with respect to such items.


 

















 


(d)
Taxes and Other. The Consultant shall be responsible for all state and
federal income and self-employment taxes, applicable insurance, including workers’
compensation, and liability.


 


6.             Records and Files.              All books, records, ledgers, journals, drawings, reports, or other
information relative to the Business or its development plans shall at all
times belong to and remain the property of Company. During the Consulting Term
and thereafter, except as shall be necessary to carry out its responsibilities
under this Agreement, Consultant shall not be entitled to retain, reproduce or
otherwise remove any such records from the business premises of Company and it
shall forthwith upon the termination hereof return to Company such records of
the Company and any copies thereof in its possession or control.


 


7.             Termination With Cause.  The parties agree that Company shall be entitled to terminate this
Agreement after giving thirty (30) days’ notice to Consultant for Cause. Cause
shall mean: (i) a material breach of this Agreement by the Consultant, its
employees or agent; (ii) an act of theft by the Consultant, its employees or
agents; (iii) conviction of the Consultant, its employees or agents for the
commission of a felony; or (iv) the misappropriation of any property belonging
to the Company by the Consultant, its employees or agents. In the event that Consultant
is terminated pursuant to this Section 7,


 


(a)
This Agreement shall be immediately terminated;


 


(b)
Company shall pay to Consultant the prorated portion of its Base Fee and Development
Fee, if any, accrued to the date of termination or the Consultant shall
reimburse the Company for any unearned portion; and


 


(c) Company shall have no further financial obligation to Consultant or
its assigns under this Agreement.


 


8.           Binding Effect and Assignment.  This Agreement and all the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however,
that this Agreement may not be assigned without the prior written consent of
the other party hereto; and, further provided, that
this Agreement may be assigned without consent to any person, corporation or
other entity which acquires all or a substantial portion of the assets of
Company or Consultant.


 


9.           Notices.  All notices, requests, demands and other
communications made hereunder shall be in writing and shall be deemed duly
given when: (i) personally delivered; (ii) sent by nationally recognized
overnight courier; (iii) sent by facsimile transmission, receipt confirmed; or (iv)
by registered or certified mail, postage prepaid, as follows, or to such other
address or person as any party may designate by notice to the other parties;


 


	
   

  	
  If to Consultant:

  	
   

  	
  David C. Grunenwald

  
	
   

  	
   

  	
  Vice-President of
  Development/Leasing

  
	
   

  	
   

  	
  Jacobs Investments
  Management Co., Inc.

  
	
   

  	
   

  	
  1231 Main Avenue
  Cleveland, Ohio 44113

  
	
   

  	
   

  	
  Facsimile: 216-861-6315

  



 

















 


	
  If to Company:

  	
   

  	
  Stephen R. Roark

  
	
   

  	
   

  	
  President of Casino
  Operations and CFO

  
	
   

  	
   

  	
  Jacobs Entertainment, Inc.

  
	
   

  	
   

  	
  17301 West Colfax Avenue,
  Suite 250

  
	
   

  	
   

  	
  Golden, Colorado 80401

  
	
   

  	
   

  	
  Facsimile: 303-215-5219

  



 


10.          Waiver of Breach. The waiver by either party of a breach of any
condition of this Agreement by the other shall be in writing and shall not be
construed as a waiver of any subsequent breach by the other.


 


11.          Governing Law.  This Agreement shall
be construed under and governed by the laws of the State of Ohio.


 


12.          Unenforceability. If any provision of this Agreement shall be
invalid or unenforceable, in whole or in part, then such provision shall be deemed to
be modified or restricted to the extent and in the manner necessary to render
the same valid and enforceable, as the case may be, and this Agreement shall be
construed, interpreted and enforced to the maximum extent permitted by law, as
if such provision had been initially incorporated herein as so modified or
restricted or as if such provision had not been initially incorporated herein,
as the case may be, and any such modification or restriction shall not affect
the validity of any other provision herein.


 


13.          Prior
Agreements. This Agreement amends and supplants any and all prior consulting
agreements between the parties hereto.


 


14.          Entire Agreement. This Agreement constitutes the complete
understanding and agreement of the parties with respect to the subject matter
hereof and may only be modified or amended upon the written consent of the
parties.


 

















 


IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized agents to sign this Agreement as of the Amendment and Restatement
Date.


 


	
  CONSULTANT:

  
	
  JACOBS INVESTMENTS MANAGEMENT CO., INC.,

  
	
  an Ohio corporation

  
	
   

  
	
  By:

  	
  /s/
  David C. Grunenwald

  	
   

  
	
  David C. Grunenwald, Vice President Development/Leasing

  
	
  Date: May 24, 2006

  
	
   

  
	
  COMPANY:

  
	
  JACOBS ENTERTAINMENT, INC.,

  
	
  A Delaware corporation

  
	
   

  
	
  By:

  	
  /s/
  Stephen R. Roark

  	
   

  
	
  Stephen R. Roark, President of Casino Operations
  and CFO

  
	
  Date: May 24, 2006