EXHIBIT 10.17


 


GROUND LEASE AGREEMENT


 


This
Ground Lease Agreement (the “Agreement”),
is made and entered into by and between Dakota\Blackhawk,
LLC, a Colorado limited liability company (hereinafter referred to
as “Lessor”) and Jacobs Entertainment, Inc.,
a Delaware corporation and/or assigns (hereinafter referred to as “Lessee”)
(sometimes Lessor and Lessee are referred to singularly as a “Party” and
collectively as the “Parties”).


 


P R E M I S E S:


 


WHEREAS, Lessor and Lessee are the Parties to that certain “Option Purchase
Agreement” dated September 12, 2005, 2005 (the “Option Agreement”), a copy
of which is attached hereto as Exhibit “A” and incorporated herein
by reference as if fully copied and set forth at length;


 


WHEREAS, attached to the Option Agreement, as an exhibit, is that certain “Real
Estate Sales Contract” (the “Real Estate Contract”) which is to be executed by
Lessor and Lessee pursuant to the terms of the Option Agreement, an unsigned
copy of which is attached hereto as Exhibit “B” and incorporated
herein by reference as if fully copied and set forth at length;


 


WHEREAS, Lessor is the owner of that certain tract of real property
(hereinafter referred to as the “Property”), as more particularly described on Exhibit “C”
attached hereto and incorporated herein by reference as if fully copied and set
forth at length; and


 


WHEREAS, pursuant to the Option Agreement, Lessor desires to lease to Lessee
and Lessee desires to lease from Lessor the Property upon the terms and
conditions herein provided.


 


A G R E E M E N T:


 


NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and
agreements set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged and confirmed, the Parties
agree to the lease of the Property upon the following terms and conditions:


 


1.                                      PROPERTY. 
Lessor hereby leases to Lessee and Lessee hereby leases from Lessor the
Property.


 


2.                                      TERM.  The
term of this Agreement (“Term”) shall begin on the date hereof and end on the
date the Option Agreement terminates or, if the Option thereunder is exercised
and the Real Estate Contract is signed, on the termination or Closing of the
Real Estate Contract.


 


3.                                      RENT. 
Lessee agrees to pay to Lessor as rent due under this Agreement the sum
of $1.00, at Lessor’s address described in Section 13, below.


 


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4.                                      USE OF PROPERTY. 
Lessee may use the Property for any and all lawful purposes including
all inspection, testing and examination purposes as described in the Option
Agreement and the Real Estate Contract. 
Lessee shall not use the Property in any manner that violates any
statute applicable thereto or for any illegal purpose.  Lessee shall have the right to erect fencing
of Lessee’s discretion (with locked gates) surrounding the perimeter of the
Property in order to limit access to the Property (subject to the rights of
Lessor set out in this Agreement). 
Lessor shall not erect any other improvement on the Property without the
written consent of Lessor which may be withheld in Lessor’s sole
discretion.  If Lessee does not obtain
title to the Property, Lessee shall remove the fence and any other permitted
improvements at Lessee’s expense at the end of the Term of the Lease.


 


5.                                      CONDITION OF PROPERTY. 
Lessee accepts the Property in its present condition and state of
repair.


 


6.                                      INSPECTIONS. 
Lessor may enter upon the Property at all reasonable times upon
forty-eight (48) hours prior written notice to Lessee to inspect the condition
of the Property.


 


7.                                      REPAIRS AND MAINTENANCE.  At
the end of the Term, Lessee shall bear all expenses of restoring the Property
to its prior condition subject to and in accordance with the terms of the
Option Agreement and the Real Estate Contract.


 


8.                                      ASSIGNMENT. 
Lessee may assign its rights under this Agreement at any time during the
Term without the prior written consent of Lessor, provided such assignment is
effected as part of an assignment of contract rights pursuant to the terms of
the Option Agreement and/or Real Estate Contract.


 


9.                                      DEFAULT AND REMEDIES.  Should Lessee default in the payment of rent as and when due and not
correct same within five (5) days after receipt of written notice from
Lessor to Lessee, Lessor may declare this Agreement, and all rights and
interest created by it, to be terminated.


 


10.                               WARRANTY OF TITLE.  Lessor hereby represents and warrants that it is the owner of the
Property and has the express actual authority to execute this Agreement.  Lessor covenants and agrees that as long as
Lessee pays the rent as provided in this Agreement and observes and keeps the
covenants, conditions, and terms of this Agreement, Lessee shall lawfully and
quietly hold, occupy, and enjoy the Property during the Term.


 


11.                               NOTICES.  All
notices, demands, requests, and other communications under this Agreement shall
be in writing or electronic format and shall be deemed properly served and
delivered when: (a) delivered by hand to the Party to whose attention it
is directed; or (b) posted, if sent by registered or certified mail,
return receipt requested, postage pre-paid addressed; or (c) actually
received by the addressee thereof, after being sent by overnight delivery (such
as Federal Express); or (d) sent to the addressee by confirmed telecopier,
facsimile, electronic transmission (email) or similar transmission, as follows
(or at such changed address as the Parties may from time to time specify in
writing):


 


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  If to Lessor:

  
	
   

  
	
   

  	
  Dakota/Blackhawk, LLC

  
	
   

  	
  1700 Kylie Drive,
  Suite 240

  
	
   

  	
  Longmont, Colorado
  80501

  
	
   

  	
  Attn: Wendell Pickett
  and Roger Pomainville

  
	
   

  	
  303-772-8348

  
	
   

  	
  303-772-8565
  (facsimile)

  
	
   

  
	
  With A Required Copy
  To:

  
	
   

  
	
   

  	
  Christopher C. O’Dell

  
	
   

  	
  O’Dell & Fell,
  LLC

  
	
   

  	
  1600 Jackson Street

  
	
   

  	
  Suite 250

  
	
   

  	
  Golden, Colorado 80401

  
	
   

  	
  (303) 436-9200

  
	
   

  	
  (303) 436-9700
  (facsimile)

  
	
   

  
	
  If to Lessee:

  
	
   

  
	
   

  	
  Jacobs
  Entertainment, Inc.

  
	
   

  	
  240 Main Street

  
	
   

  	
  Black Hawk, Colorado 80224

  
	
   

  	
  Attention: Stephen R.
  Roark, President

  
	
   

  	
  (303) 582-1117

  
	
   

  	
  (303) 582-0239
  (facsimile)

  
	
   

  
	
  With A Required Copy
  To:

  
	
   

  
	
   

  	
  Jones &
  Keller, P.C.

  
	
   

  	
  1625 Broadway, 16th
  Floor

  
	
   

  	
  Denver, Colorado 80202

  
	
   

  	
  Attention:

  	
  Samuel E.
  Wing, Esq.

  
	
   

  	
   

  	
  R. Steven
  Jones, Esq.

  
	
   

  	
  (303) 573-1600

  
	
   

  	
  (303) 893-6506
  (facsimile)

  



 


12.                               EXPENSES. 
Lessee shall not be responsible for any expenses associated with the
ownership, operation and/or possession of the Property except for the
maintenance of casualty and liability insurance (in such amounts and coverage
scope as Lessee may elect, in its sole discretion), maintenance of commercial
general liability coverage (including contractual coverage and a waiver of
subrogation) with limits of no less that $3,000,000 and snow removal, litter
removal and weed cutting as required by the City of Blackhawk.  Lessor shall be responsible for all other
costs and expense associated with the ownership, operation and/or possession of
the Property including but not limited to property taxes, assessments,
insurance and utilities. Lessee hereby indemnifies, holds harmless and agrees
to defend Lessor of and from any and all claims, demands, liabilities, actions,
costs, expenses or causes of action, including,


 


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but
not limited to, attorneys’ fees and costs, arising our of or related to the use
or possession of the Property by Lessee under this Lease except when caused
solely by Lessor or its agents’ or employees’: (a)  negligence; (b) willful
misconduct; or (c) breach of this Lease.


 


13.                               NO PARTNERSHIP.  The
relationship between Lessor and Lessee at all times shall remain solely that of
lessor and lessee and not be deemed a partnership or a joint venture.


 


14.                               EXHIBITS.  The
first page of all exhibits to this Agreement shall bear the initials of
each party hereto, and when so initialed, shall be conclusively deemed to be an
Exhibit hereto, whether or not physically attached to this Agreement.


 


15.                               ENTIRE AGREEMENT.  With
the exception of Section 33 of the Option Agreement, this Agreement
contains the entire understanding between the Parties hereto concerning the
lease of the Property.


 


16.                               ADVICE OF COUNSEL.  Each
of the Parties hereto represent that they have the advice and counsel of their
own attorneys and that no representation or statement made by any other party
has influenced them in executing or induced them to execute this Agreement.


 


17.                               FURTHER ACTS.  Each
Party hereto agrees to perform any and all such further and additional acts and
execute and deliver any and all such further and additional instruments and
documents as may be reasonably necessary in order to carry out the provisions
and effectuate the intent of this Agreement.


 


18.                               MODIFICATION.  Any
modification of this Agreement shall be in writing and agreed to by all
Parties.


 


19.                               AUTHORITY.  Each
Party hereto represents and warrants that it has full authority to execute the
Agreement and bind to the Agreement its respective partners, trustees,
beneficiaries, remaindermen, directors, officers, employees, agents, advisors,
attorneys, successors, assigns and personal representatives.


 


20.                               SEVERABILITY.  If
any provision hereof is held to be illegal, invalid, or unenforceable under
present or future laws effective during the Term, such provisions shall be duly
severable; this Agreement shall be construed and enforced as if such illegal,
invalid, or unenforceable provision had never comprised a part hereof; and the
remaining provisions hereof shall remain in full force and effect and shall not
be affected by the severance of the illegal, invalid, or unenforceable
provision or provisions.


 


21.                               GOVERNING LAW AND VENUE.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of Colorado.  The terms of this
Agreement shall be specifically performable in Gilpin County, Colorado.


 


22.                               BREACH. 
Should any party breach any part of this Agreement, and litigation
ensue, the Parties agree that the prevailing party shall be entitled to its
reasonable attorneys’ fees and costs in prosecuting or defending its claims.


 


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23.                               BENEFIT. 
Except as otherwise provided herein, this Agreement shall be binding
upon and inure to the benefit of the Parties hereto and their successors,
assigns, legal representatives, heirs and legatees.


 


24.                               PARAGRAPH HEADINGS.  All
paragraph headings set forth in this Agreement are for purposes of
identification and are intended for convenience only, and shall not control or
affect the meaning, construction or effect of this Agreement or any provision
hereof.


 


25.                               COUNTERPART EXECUTION.  This
Agreement may be executed in multiple counterparts, each of which shall be
fully effective as an original, for which together shall constitute only one (1) instrument.


 


26.                               MEMORANDUM OF LEASE. 
Lessee shall have the right to file a “Memorandum of Lease” with the
Office of the Clerk and Recorder or other appropriate public record custodian
having jurisdictional authority over the Property in the State of Colorado as
to the existence of this Lease.


 


IN WITNESS WHEREOF, the Parties hereunto set their hands and
seals as of the date above first stated.


 


	
   

  	
  LESSOR:

  
	
   

  	
   

  
	
   

  	
  DAKOTA/BLACKHAWK, LLC,

  a Colorado limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Roger Pomanville

  	
   

  
	
   

  	
   

  	
  Roger Pomanville,
  Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wendell Gene
  Pickett

  	
   

  
	
   

  	
   

  	
  Wendell Gene Pickett,
  Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LESSEE:

  
	
   

  	
   

  
	
   

  	
  JACOBS ENTERTAINMENT,
  INC.,

  a Delaware corporation

  
	
   

  	
  And/Or Assigns

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen R. Roark

  	
   

  
	
   

  	
  Printed Name: Stephen
  R. Roark

  
	
   

  	
  Title:  President/Chief
  Financial Officer

  
						



 


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EXHIBIT “A”


 


OPTION PURCHASE AGREEMENT


 


This
Option Purchase Agreement (“Agreement”) is entered into this          
day of September 2005 to be effective on the Effective Date (defined in Section 19,
below) by and between Dakota\Blackhawk, LLC,
a Colorado limited liability company (hereafter collectively, the “Dakota Group”)
and Jacobs Entertainment, Inc.,
a Delaware corporation and/or assigns (hereafter “JEI”) (sometimes Dakota Group
and JEI are referred to singularly as a “Party” and collectively as the “Parties”).


 


RECITALS:


 


WHEREAS,
Dakota Group is the owner of approximately 2.2258 acres of undeveloped land
situated in Gilpin County, Colorado,
(containing 96,956 square feet), the legal description of which is attached
hereto as Exhibit “A” and incorporated herein by reference as if
set out word for word (the “Property”);


 


WHEREAS,
40,788 square feet of the Property is situated in the Gaming District of Gilpin
County, Colorado as established by The Colorado Limited Gaming Act, C.R.S. 12-47.1-105
and the ordinances adopted by the City of Black Hawk, Colorado;


 


WHEREAS,
JEI desires to purchase from Dakota Group an exclusive, non-revocable option to
acquire the Property (the “Option”);


 


NOW,
THEREFORE, in consideration of the mutual covenants contained herein and other
good and valuable consideration (including the consideration paid pursuant to Section 25,
below) the receipt and sufficiency of same is hereby acknowledged and confirmed
by the Parties, it is mutually agreed by the Parties as follows:


 


AGREEMENT


 


1.                                      Grant of Exclusive Option.  For
the consideration expressed in Sections 3 and 25 below, Dakota
Group hereby grants to JEI the exclusive, non-revocable right and option (the “Option”)
to purchase the Property at the price of $13,000,000.00 (the “Purchase Price”)
under and pursuant to the terms set forth in that certain “Real Estate Sales
Contract” attached hereto as Exhibit “B” and incorporated herein by
reference as if set out word for word (the “Real Estate Sales Contract”).


 


2.                                      Initial Option Period.  The
Option shall commence on the Effective Date and continue until 11:59 p.m.
on the date which is one (1) calendar year from the Effective Date (the “Initial
Option Period”), unless same is extended pursuant to the provisions of Section 4,
below.


 


3.                                      Consideration.  The
Option is granted in partial consideration of: 
(a) the payment by JEI to Escrow Agent (defined in Section 5,
below) for the conditional benefit of Dakota Group of the sum of $250,000.00,
on or before the Effective Date (the “Initial Deposit”) and (b) the payment
to Dakota Group of the sum of $250,000.00, no later than the date which is one
hundred eighty


 


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(180)
calendar days from the Effective Date (collectively, the amounts identified in Section 3(a) and
(b) above, the “Initial Option Fee”).  JEI shall also pay to Dakota Group of the sum
of $100.00 pursuant to Section 25, below (the “Independent
Agreement Consideration”).  The Initial
Deposit shall be deposited by the Escrow Agent in an interest bearing account
of JEI’s election and all interest accruing thereon shall belong to JEI.    All references in this Agreement to the “Total
Option Fee” shall include: (i) the Initial Option Fee; (ii) any
Extension Fee paid pursuant to Section 4, below; and (iii) all
interest amounts accruing on the Initial Option Fee and the Extension Fee.


 


4.                                      Extension Right.  Notwithstanding anything in this
Agreement to the contrary, JEI, at its sole election, shall have the right to
extend the Initial Option Period (the “Extension Right”), for an additional
time period of one (1) calendar year (the “Extension Period”) upon the
payment by JEI of the additional sum of $500,000.00 to Dakota Group (the “Extension
Fee”). The Extension Period shall be computed by excluding the expiration date
of the Initial Option Period and counting the last day of the Extension Period
(expiring at 11:59 p.m., local time). 
JEI shall have the option to exercise the Extension Right at any time
prior to the expiration of the Initial Option Period.


 


5.                                      Escrow Agent.  The
term “Escrow Agent” as used in this Agreement shall mean Gilpin Title, LLC of
Golden, Colorado.  The Escrow Agent shall
hold the Initial Deposit pursuant to the terms of this Agreement.


 


6.                                      Exercise of Option.


 


(a)                                  Exercise Notice.  JEI
may exercise the Option at any time during the Initial Option Period or the
Extension Period (if the Extension Right is exercised) by delivery of a written
or electronic notice to Dakota Group as to such election (the “Exercise Notice”).  Within ten (10) days of the delivery of
the Exercise Notice to Dakota Group, Dakota Group and JEI shall execute the
Real Estate Sales Contract and cause a fully executed original of same to be
delivered to Escrow Agent (and a fully executed copy of same shall be delivered
to each Party).  Delivery of the Exercise
Notice shall be effected in accordance with the notice provisions of Section 22,
below.  If JEI fails to execute the Real
Estate Sales Contract within the ten (10) days provided and if either the
Initial Option Period or the Extension Period (if the Extension Right is
exercised) has run, then the Option shall be deemed waived and JEI shall no
longer have the right to purchase the Property.


 


(b)                                 Exercise Condition.  JEI
may not exercise this Option if it is in default for failure to pay the Initial
Option Fee when due or for failure to pay the Extension Fee when due and same
has not been cured within ten (10) days after receipt of written notice
from Dakota Group that any such amount has not been received.


 


(c)                                  Release of Option Fees Upon Exercise of
Option.   Escrow Agent shall release to the Dakota
Group, on demand (without the necessity of the consent of JEI),the Initial
Option Fee upon the first to occur of:  (i) the
exercise of the Option pursuant to this Agreement or (ii) upon the
expiration of the 60th day from the Effective Date, in the event JEI
has not elected to terminate this Agreement pursuant to Sections 9 and 14,
below).


 


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7.                                      Application To Purchase
Price.   If the
Option is exercised pursuant to this Agreement, then fifty percent (50%) of the
Initial Option Fee and fifty percent (50%) of the Extension Fee (if paid),
shall be applied to the Purchase Price at the Closing of the Real Estate Sales
Contract (and otherwise administered pursuant to the terms of such instrument).


 


8.                                      Recording of Options.  JEI
shall have the right to file a “Memorandum of Option” with the Office of the
Clerk and Recorder or other appropriate public record custodian having
jurisdictional authority over the Property in the State of Colorado as to the
existence of this Option or any extension of same.  The form of Memorandum of Option which JEI is
authorized to file of record is attached hereto as Exhibit “C” and
incorporated herein by reference as if set out word for word.


 


9.                                      Inspection Period; Inspection
Rights.


 


(a)                                  Inspection
Rights.  During the term of this
Agreement, JEI shall have the right to conduct an inspection and examination of
the Property (the “Inspection Period”).  During the Inspection Period,
JEI, or JEI’s authorized agents or representatives, shall be entitled (and
permitted) to enter upon the Property for the purpose of inspecting, examining
and making tests upon and/or conducting an evaluation of the Property
(including, but not limited to, those inspections described in Section 10,
below).


 


(b)                                 Termination
Right.  If JEI, in JEI’s sole
discretion, is dissatisfied with the results of JEI’s inspection of the
Property (for any reason or no reason), JEI may, by written or electronic
notice delivered to Dakota Group or Escrow Agent prior to the expiration of the
60th day from the Effective Date (the “Refund Inspection Period”),  terminate this Agreement and upon such event,
the Initial Deposit, as well as all interest accrued thereon, shall be returned
to JEI (by Escrow Agent) on demand (without the necessity of the consent of
Dakota Group), and neither Dakota Group nor JEI shall have any further
obligations hereunder except as provided in Section 9(d). If JEI
does not terminate this Agreement by delivery of such notice prior to the
expiration of the Refund Inspection Period, JEI’s shall still have the right to
terminate this Agreement during the Inspection Period but shall not be entitled
to receive a refund of the Total Option Fee, except as set out in Section 9
(c), below.


 


(c)                                  Refund
Right Beyond Refund Inspection Period. 
Notwithstanding anything herein to the contrary, JEI shall be entitled
to receive a refund of the Total Option Fee under the following conditions:


 


(i)                                     the
refusal by Dakota Group to close under the Real Estate Sales Contract upon the
proper exercise of the Option by JEI; or


 


(ii)                                  the
failure or inability of Dakota Group to deliver fee simple title to the
Property, free and clear of all mortgages, liens, claims, encumbrances,
easements, encroachments and judgments as provided in the Deed to be delivered
at Closing and as otherwise required pursuant to the Real Estate Sales
Contract; or


 


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(iii)                               pursuant
to Section 5.1(c) of the Real Estate Sales Contract.


 


(d)                                 Indemnity
Obligation.  In the event JEI fails
to consummate the closing of the purchase of the Property (other than for
Dakota Group’s breach of this Agreement), JEI agrees to indemnify and hold
Dakota Group harmless from all costs and expenses actually paid by Dakota Group
(supported by verified evidence of same) which arise from damages to the Real
Property in connection with JEI’s inspection of the Property.  JEI agrees to indemnify and hold Dakota Group
harmless from damages arising out of injuries sustained by third parties in
connection with JEI’s inspection of the Property. The obligations of JEI under
this Section 9 (d) shall survive the termination of this
Agreement for a period of three (3) months.


 


10.                               Environmental Inspection.  The inspection and examination of the
Property in relation to the environmental condition of the Property shall be
governed by the following:


 


(a)                                  Examination
Authority.  JEI shall have the right
to conduct a “Phase I”, “Phase II” and/or a “Phase III” environmental site
assessment (collectively or singularly as the context requires, the “Environmental
Survey”) of the Property.,   If an
Environmental Survey is conducted, then JEI shall cause a copy of the written
report setting forth the findings obtained in that Environmental Survey to be
delivered to Dakota Group.


 


(b)                                 Remediation/Termination.  If, as a result of the Environmental Survey,
or by any other means, JEI or Dakota Group becomes aware of the existence of
Hazardous Substances (as hereinafter defined in Section 10(c),
below), or other environmental contamination, on or within the Property, then
JEI shall have the right to terminate this Agreement. If JEI terminates this
Agreement prior to the expiration of the Refund Inspection Period pursuant to
this Section 10, then the Total Option Fee shall be returned to JEI
on demand (without the necessity of the consent of Dakota Group) and the
Parties shall have no further obligations under this Agreement, except for
those obligations that expressly survive termination of this Agreement.


 


(c)                                  “Hazardous
Substances.” For purposes of this Agreement, the term “Hazardous       Substances”
shall mean and include all hazardous and toxic substances, waste or other
materials, any pollutants or contaminants as defined in Section 101 (14)
of the Comprehensive Environmental Response Compensation and Liability Act, as
amended, 42 U.S.C. Section 9301 (14) (including, without limitation,
asbestos and raw materials which include hazardous constituents), or other
similar substances, or materials which are included under or regulated by any
local, state, or federal law, rule, or regulation pertaining to environmental
regulation, contamination or clean-up, including, without limitation, “CERCLA”,
“RCRA”, or state superlien or environmental clean-up statutes, as may be
amended, (all such laws, rules and regulations being referred to
collectively as “Environmental Laws”).


 


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11.                               Document Inspection.


 


(a)                                  Dakota
Group Obligation.  To facilitate JEI’s
inspection of the Property, Dakota Group shall provide to JEI, at Dakota Group’s
sole cost and expense, within three (3) days of the Effective Date, the
following:


 


(i)                                     True, correct
and complete copies of all leases relating to the Property, if any, and any
amendments thereto.  Additionally, Dakota
Group will provide JEI access to Dakota Group’s records regarding expense and
income items in order to enable JEI to complete an audit of such leases;


 


(ii)                                  A
true, correct and complete schedule (the “Operating Schedule”) reflecting,
with respect to the Property, for the twelve (12) month period preceding the
month of execution of this Agreement (including any interim reports): (i) all
operating expenses and capital expenditures of the Property; and (ii) the
aggregate rent collected from tenants of the Property during such period, if
any;


 


(iii)                               A
true, correct and complete inventory of all personal property located upon the
Property;


 


(iv)                              A
true, correct and complete copy of all service and other agreements, as well as
any amendments thereto, pertaining to the Property on which Dakota Group is
obligated (the “Third Party Agreements”), showing: (i) the names of the
parties to each agreement; (ii) the service rendered or to be rendered
under each agreement; (iii) the compensation payable by Dakota Group under
each agreement; and (iv) the term and expiration date of each agreement;


 


(v)                                 True,
correct and complete copies of all certificates of occupancy, licenses and
permits required by law and issued by all governmental authorities having
jurisdiction, if any, concerning the Property;


 


(vi)                              True,
correct and complete copies of all engineering, soils, historical preservation
and other professional reports in the possession, custody or control of Dakota
Group and which relate to the Property;


 


(vii)                           True,
correct and complete copies of all utility bills for the Property for the
previous twelve (12) months;


 


(viii)                        True,
correct and complete copies of instruments, evidencing any actual or threatened
litigation relating to or with respect to the Property;


 


(ix)                                True,
correct and complete copies of all ad valorem and personal property tax
statements as well as all related assessment notices (including valuation
assessment documents) covering the Property for the current tax year (if
available);


 


(x)                                   A
true, correct and complete report for the Property of any prepaid rent by
tenants;


 


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(xi)                                True,
correct and complete copies of any Environmental Site Assessments or other
environmental reports with regard to the Property which are in Dakota Group’s
possession, custody or control;


 


(xii)                             True,
correct and complete copies of all warranties and guaranties relating to the
Property;


 


(xiii)                          True,
correct and complete copies of all leasing or other commission agreements with
third parties with respect to the Property, with a summary of unpaid
commissions, if any;


 


(xiv)                         True,
correct and complete topographic, construction, engineering and architectural
plans and specifications with respect to the Property;


 


(xv)                            True,
correct and complete copies of appraisals, surveys and plats of the Property;


 


(xvi)                         Access
to all maintenance and other records which pertain to the Property;


 


(xvii)                      True,
correct and complete copies of all bids and estimates received by Dakota Group
or its agents during the twelve (12) month period prior to the Effective Date
for work to be performed at or for the benefit of the Property, which exceeds
in each instance, the sum of $500.00;


 


(xviii)                   True,
correct and complete copies of all documents and instruments evidencing rights
of ingress and egress to land from the Property, whether recorded in the public
records of Gilpin County, Colorado or otherwise;


 


(xix)                           True,
correct and complete copies of all agreements with owners or tenants of any
property adjacent to the Property (and which pertain in any manner to the
Property); and


 


(xx)                              All
documents and instruments relating in any manner to any pending, threatened or
anticipated condemnation or eminent domain proceeding or actions which affect
or relate to the Property including, but not limited to, that condemnation
proceeding referenced in Section 15(b)(iii), below.


 


(b)                                 Return of Materials.  JEI agrees that if for any reason the Closing
is not consummated, JEI will promptly return to Dakota Group all materials
furnished to JEI pursuant to this Section 11.


 


(c)                                  Third
Party Agreements.  Commencing upon the Effective Date, Dakota
Group will not enter into any Third Party Agreements (or modify same) without
the prior written consent of JEI.


 


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12.                               Survey.


 


(a)                                  Dakota Group Obligations. 
Dakota Group, at Dakota Group’s sole cost and expense, shall provide to
JEI within five (5) days after the Effective Date, a current survey dated
within the sixty (60) day time period prior to the Effective Date (hereinafter
referred to as the “Survey”), of the Property prepared by a licensed surveyor
or professional engineer, which Survey:  (i) shall
be in form and content sufficient to delete the standard survey exception from
the Owner Policy; (ii) shall be accompanied by a metes and bounds
description of the Property which description shall tie the Property to the
adjacent property boundaries setting forth the acreage and square feet within
the Property; (iii) shall locate, and identify by volume and page reference,
if applicable, all existing improvements, fences, waterways, lakes, ponds,
encumbrances, encroachments, conflicts, protrusions, uses, highways, streets,
roads, easements, alleys and rights-of-way, upon or adjacent to the Property,
which are visible on the ground or listed in the Commitment; (iv) shall
show the location of the “100-year frequency flood plain” on the Property, if
applicable, or, if inapplicable, shall certify that such flood plain does not
affect the Property; (v) shall set forth the number of gross acres and
square feet contained in the Property; (vi) shall identify and establish
the square footage and location of the portion of the Property situated within
the Gaming District of Gilpin County, Colorado as established by the Colorado
Limited Gaming Act, C.R.S. 12-47.1-105 and the ordinances adopted by the City
of Black Hawk, Colorado; and (vii) shall meet or exceed in all aspects the
“Minimum Standard Detail Requirements for Land Title Surveys” jointly
established and adopted by the American Land Title Association, the American
Congress on Surveying and Mapping and the National Society of Professional
Surveyors in 1999, as amended from time to time.


 


(b)                                 Certification.  The
Survey shall further contain a certificate by the surveyor or engineer,
addressed to Dakota Group, JEI, the Title Company and any lender of JEI
(designated by JEI) in the form and substance set out on Exhibit “D”
attached hereto and incorporated herein, as if set out word for word.


 


13.                               Title. 
Within fifteen (15) days after the Effective Date,  Dakota Group, at its sole cost and expense,
shall cause to be delivered to JEI a Commitment for Title Insurance, Colorado
standard form (hereinafter referred to as the “Commitment”), together with
true, correct, complete and legible copies of all instruments and documents
referred to therein as exceptions to title covering the Property, in the amount
of the Purchase Price, in favor of JEI, pursuant to which the Title Company
agrees, subject to the provisions thereof, to issue at the Closing of the Real
Estate Sales Contract an Owner Policy of Title Insurance (hereinafter referred
to as the “Owner Policy”).


 


14.                               Termination.


 


(a)                                  Refund Inspection Period.  At
any time prior to the expiration of the Refund Inspection Period, JEI shall be
entitled, for any reason, to terminate this Agreement by giving a written or
electronic notice of same to either Dakota Group or the Escrow Agent (the “Refund
Inspection Period Termination Notice”). 
Upon delivery of the Refund Inspection Period Termination Notice to
either Dakota Group or Escrow Agent: (i) this Agreement shall become
automatically null and void and of no effect without the necessity of further
action or consent of either Party; and (ii) the Escrow


 


12

















 


Agent shall be deemed authorized and
instructed by the Parties to return the Initial Deposit (and all interest
accrued thereon) to JEI, free and clear of all liens, claims, encumbrances and
charges, minus a reasonable escrow fee to be agreed upon by JEI and the Escrow
Agent.


 


(b)                                 Post-Refund Inspection Period Termination.  At
any time after the expiration of the Refund Inspection Period and prior to the
Closing of the Real Estate Sales Contract, JEI shall have the right, for any
reason, to terminate this Agreement by giving a written or electronic notice to
either Dakota Group or Escrow Agent (the “Post-Refund Inspection Period Termination
Notice”). Upon delivery of the Post-Refund Inspection Period Termination Notice
to either Dakota Group or Escrow Agent, this Agreement shall become
automatically null and void and of no effect without the necessity of further
action or consent of either Party. Provided, however, upon the issuance of a
Post-Refund Inspection Period Termination Notice, the Initial Option Fee and
any Extension Fee, if paid, shall be deemed non-refundable to JEI.


 


(c)                                  Refund Exception. 
Notwithstanding the immediately preceding Section 14(b), the
Total Option Fee shall be refundable to JEI after the expiration of the
Inspection Period pursuant to the provisions of Section 9(c),
above.


 


(d)                                 Expiration of Option.  Upon
the expiration of the Initial Option Period (or the Extension Period, if the
Extension Right is exercised), without the Refund Inspection Period Termination
Notice or the Post-Refund Inspection Period Termination Notice or the Exercise
Notice having been given by JEI under this Agreement, then:  (i) this Agreement shall automatically
terminate without the necessity of further action or consent of either Party;
and (ii) the Escrow Agent shall record the quitclaim deed in accordance
with Section 18, below.


 


15.                               Dakota Group Representations,
Warranties and Covenants.


 


(a)                                  Dakota Group Covenants.  In addition to any other agreements or covenants
set out in this Agreement, Dakota Group further agrees to the following:


 


(i)                                     Access.  During the term of this
Agreement (including but not limited to the Inspection Period), Dakota Group
agrees to provide JEI with reasonable access to the Property from time to time
in the discretion of JEI, in order for JEI to inspect the Property.


 


(ii)                                  Cooperation.  Dakota Group agrees to undertake all
reasonable efforts to cooperate with JEI in connection with any matter
involving JEI’s inspection of the Property.


 


(iii)                               No Further Encumbrance; Standstill Obligation. 
Dakota Group agrees that, commencing on the Effective Date, it will
not:  (i)  cause or allow the
Property to be encumbered by any claim, lien (other than liens of record
existing as of the Effective Date or any refinancing or extension thereof in an
amount not to exceed the current amount) or contaminated by any Hazardous
Substances; or (ii) negotiate to enter


 


13

















 


into or enter into a back-up contract for the sale of all or part of
the Property; or (iii) negotiate to enter into or enter into an agreement
for an option to purchase all or part of the Property, unless and until this
Agreement expires or is otherwise terminated.


 


(b)                                 Dakota Group Representations and Warranties.
Dakota Group represents and warrants to JEI as of the Effective Date (and
restates and reaffirms each and every item below as of the Closing Date of the
Real Estate Sales Contract) the following:


 


(i)                                     Subject
to the provisions of the Deed to be delivered at Closing, Dakota Group has
good, indefeasible, and fee simple title to the Property, free and clear of all
mortgages, liens, claims, encumbrances, leases, tenancies, security interest,
covenants, conditions restrictions, rights-of-way, easements, judgments or
other matters affecting title other than those shown on the Commitment and
otherwise permitted herein.


 


(ii)                                  This
Agreement has been duly authorized and executed by Dakota Group and is a valid
and binding obligation of, and is enforceable, in accordance with its terms,
against Dakota Group.  The documents
delivered to JEI at Closing will be duly authorized and executed by Dakota
Group and will be a valid and binding obligation of, and will be enforceable in
accordance with their terms, against Dakota Group.


 


(iii)                               There
is no pending or threatened condemnation or similar proceeding affecting the
Property or any portion thereof, or pending public improvements, liens, or
special assessments, in, about or outside the Property which will in any manner
affect the Property or affect access to the Property or affect JEI’s use of the
Property (as a gaming facility, hotel or otherwise). Provided, however, Dakota
Group shall receive all compensation relating to the pending condemnation of
street (the “Bobtail Street Condemnation Area”) and sidewalk (the “Sidewalk
Easement Condemnation Area”) described and depicted on Exhibit “E”
attached hereto and incorporated herein as if set out word for word.  Seller further represents and warrants that
the Bobtail Street Condemnation Area is comprised of five hundred seven square
feet (507 sq. ft.), does not constitute part of the Property and is not situated
within the Gaming District of Gilpin County, Colorado.  Seller further represents and warrants that
the Sidewalk Easement Condemnation Area is comprised of three thousand two
hundred eighty square feet (3,280 sq. ft.), none of which is situated within
the Gaming District of Gilpin County, Colorado but all of which is included in
the description of the Property.


 


(iv)                              Except
as provided in Subsection (iii) above, there is no pending or
threatened legal action of any kind or character whatsoever affecting the
Property or any portion thereof which will in any manner affect JEI upon the
consummation of the Closing, nor is any such action presently contemplated.


 


(v)                                 Dakota
Group has complied with all applicable laws, ordinances, regulations, statutes,
rules and restrictions pertaining to and affecting the Property, and
Dakota Group’s performance of this Agreement will not result in any breach of,
or constitute any default under, or result in the imposition of, any lien or
encumbrance upon the Property under any agreement or other instrument to which
Dakota Group is a party or by which Dakota Group or the Property might be
bound.


 


14

















 


(vi)                              Subject
to the Lease provided for below, Dakota Group will operate and manage the
Property in substantially the same manner it has been operated and managed
prior to the execution of this Agreement and will maintain the physical
condition of the Property in the same or better condition as it presently
exists to the date of Closing, reasonable wear and tear excepted.


 


(vii)                           All
documents delivered pursuant to Section 11 are the most recent
documents in existence in connection with the operation and maintenance of the
Property.  The balance of such statements
for the preceding thirty-six (36) months shall be made available to JEI within
five (5) days of JEI’s request.


 


(viii)                        No
action has been taken with respect to work performed or delivery of material
which would give rise to a lien on the Property and at Closing, there will be
no claim in favor of any person or entity which is or could become a lien on
the Property, arising out of the furnishing of labor or materials at Dakota
Group’s request; there will be no unpaid assessments against the Property,
except for property taxes assessed but not due and payable at the time of
Closing; and there will be no claim in favor of any person or entity (including
the present management company) for any unpaid commissions or fees for leasing
of the Property.  In the event of any such
claims at Closing, Dakota Group shall, at JEI’s option:  (aa) establish with the Title Company an
escrow of funds in an amount and upon conditions reasonably acceptable to
Dakota Group and JEI, or (bb) provide a bond in favor of JEI or Title Company
(or Title Company’s underwriter) in such amount, upon such conditions and for
such purposes as may be satisfactory to JEI, Dakota Group and Title Company, in
either case for the purpose of providing for such claims and/or inducing the
Title Company to insure JEI’s title to the Property free and clear of such
claims.


 


(ix)                                Dakota
Group agrees that benefits or compensation accrued prior to Closing, and due or
claimed to be due either before or after the Closing of the Real Estate Sales
Contract, to employees or former employees of Dakota Group shall constitute
obligations of Dakota Group only, and Dakota Group agrees to indemnify, defend
and hold JEI harmless from all such obligations and claims.


 


(x)                                   Dakota
Group will not borrow any money or do, or fail to do, any other act or thing
which would cause the Property to become pledged or otherwise utilized as
collateral or in any way stand as security for any indebtedness or obligation
(excepting encumbrances existing of record as of the Effective Date or any refinancing or extension thereof in
an amount not to exceed the current amount).


 


(xi)                                All
due and owing ad valorem taxes and personal property taxes, together with all
assessments or other charges for utilities, roads,  the widening of roads, sidewalks or any other
public infrastructure or any other fees imposed by any governmental authority
with respect to the Property which are currently due and payable, have been
paid in full.


 


(xii)                             To
the current knowledge of Dakota Group, no Hazardous Substances (as defined in Section 10,
above) are located on or about the Property.


 


15

















 


(xiii)                          The
portion of the Property depicted on Exhibit “F” attached hereto and
incorporated herein as if set out word for word is situated within the Gaming
District of Gilpin County, Colorado.


 


(xiv)                         To
the current knowledge of Dakota Group, there are no pending assessments or
other charges for utilities, roads, widening of roads, sidewalks or any other
public infrastructure imposed by any governmental authority with respect to the
Property which will become due and owing after the Closing of the Real Estate
Sales Contract.


 


(c)                                  Continuing
Effect.  The representations,
warranties and covenants of Dakota Group contained in this Agreement or in any
document delivered to JEI pursuant to the terms of this Agreement (whether in
this Section 15 or elsewhere in this Agreement) shall be true and
correct in all material respects and not in default at the time of Closing of
the Real Estate Sales Contract, just as though they were made at such time,
Dakota Group shall deliver to JEI, at Closing of the Real Estate Sales
Contract, an affidavit to that effect.


 


(d)                                 Survival.  The provisions of this Section 15,
shall expressly survive the exercise of the Option and the Closing of the Real
Estate Sales Contract and shall not merge with the Deed or any conveyance
thereof for a period of one year from the date of Closing.


 


16.                               Condemnation.   During the period from the Effective Date of
this Agreement to the Closing of the Real Estate Sales Contract, all risk of
loss from condemnation or eminent domain, shall be borne by Dakota Group except
as set out in Section 15(b)(iii). 
If any condemnation proceedings are instituted or threatened, between
the Effective Date and the Closing of the Real Estate Sales Contract, JEI shall
have a period of twenty (20) calendar days (regardless of whether the Refund
Inspection Period has expired) to elect to: 
(a) terminate this Agreement and upon such event Dakota Group shall
within seven (7) days of JEI’s issuance of such notice, refund the Total
Option Fee to JEI and thereafter the Parties shall have no further obligations
to each other; or (b) proceed under this Agreement (and upon the exercise
of the Option, to proceed under the Real Estate Sales Contract), in which event
Dakota Group shall, at the Closing, assign to JEI its entire right, title and
interest in and to any condemnation or eminent domain award.  Notwithstanding any other language in this Section 16
to the contrary, if the condemnation or eminent domain is for less than 5% of
the total land area of the Property, JEI shall not be entitled to terminate
this Agreement and receive a refund of the Total Option Fee (unless JEI’s
notice of termination described above is delivered to Dakota Group prior to the
expiration of the Refund Inspection Period). 
The parties recognize that the property which the City of Blackhawk (“City”)
needs for Bobtail Street has been excluded from the description of the
Property.  Notwithstanding this Section 16
or any other provision of this Agreement, if the City condemns a sidewalk
easement on the lands shown in Exhibit E, Dakota Group shall be entitled
to retain all compensation paid for said easement and the amount of land
condemned thereby shall not be counted in the 5% described above in this Section 16.


 


17.                               Risk of Loss.  In
the event of material loss or damage to the Property prior to the Closing of
the Real Estate Sales Contract (and while this Agreement is in full force and
effect),


 


16

















 


which
results in a diminution in the value of the Property (in Purchaser’s reasonable
determination) (each, a “Casualty Event”) and Seller cannot restore the
Property to its original condition and value within thirty (30) days
thereafter, to Purchaser’s satisfaction, JEI shall be entitled, within thirty (30) days of the occurrence of
such Casualty Event, to terminate this Agreement (and if the Option has been
exercised, to terminate the Real Estate Sales Contract) by giving a Refund
Inspection Period Termination Notice or a Post-Refund Inspection Period
Termination Notice to Dakota Group . 
Within seven (7) days of issuance of the applicable termination
notice described in the immediately preceding sentence, Dakota Group shall
refund the Total Option Fee to JEI.  In
the event JEI elects not to terminate this Agreement, JEI shall be entitled, on
exercise of the Option, to the rights set out in Section 9.1 of the
Real Estate Sales Contract.  The
provisions of this Section 17 shall expressly survive the exercise
of the Option.


 


18.                               Quitclaim Deed. 
Concurrently with the execution of this Agreement, JEI agrees to execute
and acknowledge a quitclaim deed quitclaiming its interest in the Property, and
to deliver the quitclaim deed to the Escrow Agent, who shall hold such
quitclaim deed in accordance with this provision.  On termination of this Agreement (without the
exercise of the Option pursuant to Section 6) or upon termination
of the Real Estate Sales Contract without Closing (except as a result of a
breach thereof by Dakota Group),  Escrow
Agent shall cause the quitclaim deed to be recorded in the Office of the Clerk
and Recorder, Gilpin County, Colorado. Dakota Group shall be responsible for
all reasonable costs of Escrow Agent for its performance in accordance with
this Section 18.


 


19.                               Effective Date. This Agreement (or a counterpart hereof) must
be executed by the Parties and a fully executed copy hereof (or executed
counterparts) deposited with the Escrow Agent not later than five (5) days
after execution hereof by the latter of the Parties (the confirmed date of
receipt by Escrow Agent of a fully executed original of this Agreement being
herein referred to as the “Effective Date”), or this Agreement shall become
null, void and of no effect whatsoever.


 


20.                               Successors and Assigns.  This
Agreement shall be binding upon and shall inure to the benefit of the Parties
hereto and their respective heirs, executors, personal representatives,
successors and assigns.  Dakota Group may
not assign this Agreement without the prior written consent of JEI except that
Dakota Group may assign this Agreement to a related entity without the consent
of JEI.  JEI may assign this Agreement if
such assignment is effected to an entity organized as a corporation, limited
liability company, limited partnership, limited liability partnership, limited
liability limited partnership, partnership or joint venture, the controlling
ownership and/or management of which resides in JEI so long as such assignee
assumes, in writing in an instrument delivered promptly to Dakota Group, all
obligations of JEI under this Agreement.


 


21.                               Counterparts.  This
Agreement may be executed in any number of identical counterparts, any or all
of which may contain the signatures of less than all of the Parties, and all of
which shall be construed together as a single instrument.


 


22.                               Notices.  All
notices, demands, requests, and other communications under this Agreement shall
be in writing or electronic format and shall be deemed properly served and
delivered when: (a) delivered by hand to the Party to whose attention it
is directed; or (b) posted, if sent by registered or certified mail,
return receipt requested, postage pre-paid addressed; or (c)


 


17

















 


actually received by the addressee thereof, after
being sent by overnight delivery (such as Federal Express); or (d) sent to
the addressee by confirmed telecopier, facsimile, electronic transmission
(email) or similar transmission, as follows (or at such changed address as the
Parties may from time to time specify in writing):


 


	
  If to Dakota Group:

  
	
   

  
	
   

  	
  Dakota/Blackhawk, LLC

  
	
   

  	
  1700 Kylie Drive,
  Suite 240

  
	
   

  	
  Longmont, Colorado
  80501

  
	
   

  	
  Attn: Wendell Pickett
  and Roger Pomainville

  
	
   

  	
  303-772-8348

  
	
   

  	
  303-772-8565
  (facsimile)

  
	
   

  
	
  With A Required Copy
  To:

  
	
   

  
	
   

  	
  Christopher C. O’Dell

  
	
   

  	
  O’Dell & Fell,
  LLC

  
	
   

  	
  1600 Jackson Street

  
	
   

  	
  Suite 250

  
	
   

  	
  Golden, Colorado 80401

  
	
   

  	
  (303) 436-9200

  
	
   

  	
  (303) 436-9700
  (facsimile)

  
	
   

  
	
  If to JEI:

  
	
   

  
	
   

  	
  Jacobs
  Entertainment, Inc.

  
	
   

  	
  240 Main Street

  
	
   

  	
  Black Hawk, Colorado 80224

  
	
   

  	
  Attention: Stephen R.
  Roark, President

  
	
   

  	
  (303) 582-1117

  
	
   

  	
  (303) 582-0239
  (facsimile)

  
	
   

  
	
  With A Required Copy
  To:

  
	
   

  
	
   

  	
  Jones &
  Keller, P.C.

  
	
   

  	
  1625 Broadway, 16th
  Floor

  
	
   

  	
  Denver, Colorado 80202

  
	
   

  	
  Attention:

  	
  Samuel E.
  Wing, Esq.

  
	
   

  	
   

  	
  R. Steven Jones, Esq.

  
	
   

  	
  (303) 573-1600

  
	
   

  	
  (303) 893-6506
  (facsimile)

  



 


18

















 


23.                               Entire Agreement.  The Parties agree that all the terms and conditions of this Agreement
are contained herein and declare that no promises, representations, guarantees,
warranties or agreements other than those expressly herein contained have been
made or relied upon by either of the Parties hereto.  This Agreement represents the complete
understanding between the Parties hereto as the subject matter hereof, and
supersedes all prior written or oral negotiations, statements, or agreements
between the Parties hereto as to the Property or this Agreement, the condition
thereof, or any other matter whatsoever, made or furnished by any real estate
broker, agent, employee or other person representing or purporting to represent
either Party hereto.


 


24.                               Governing Law.  This
Agreement shall be construed in accordance with the laws of the State of
Colorado.


 


25.                               Independent Consideration.  Upon execution of this Agreement by the Parties, JEI shall pay to
Dakota Group the sum of One Hundred and No/100 Dollars ($100.00) as independent
agreement consideration for Dakota Group’s execution, delivery and agreement to
be bound by all of the provisions of this Agreement (the “Independent Agreement
Consideration”).  The Independent
Agreement Consideration shall be non-refundable to JEI and not applicable to
the Purchase Price at the Closing of the Real Estate Sales Contract.


 


26.                               Significance of Headings.  All
paragraph headings set forth in this Agreement are for purposes of
identification and are intended for convenience only.


 


27.                               Exhibits.  All exhibits to this Agreement, if any, shall bear the initials of each
Party hereto, and when so initiated, shall be conclusively deemed to be an Exhibit hereto,
whether or not physically attached to this Agreement.


 


28.                               Advice of Counsel.  Each of the Parties hereto represent that they have had the opportunity
to seek the advice and counsel of their own attorneys; that they are relying
upon their own judgment, belief, and knowledge with respect to the nature and
extent of this Agreement; and that no representation or statement made by any
other party has influenced them in executing or induced them to execute this
Agreement.


 


29.                               Further Acts.  Each
Party hereto agrees to perform, without delay, any and all such further and
additional acts and execute and deliver any and all such further and additional
instruments and documents as may be reasonably necessary in order to carry out
the provisions and effectuate the intent of this Agreement.


 


30.                               Authority.  Each Party hereto represents and warrants that it has full authority to
execute this Agreement and bind to this Agreement its respective partners,
trustees, beneficiaries, remaindermen, directors, officers, employees, agents,
advisors, attorneys, successors, assigns and personal representatives.


 


31.                               Breach.  Should any Party breach any part of this Agreement and litigation
ensue, the Parties agree that the prevailing Party shall be entitled to its
reasonable attorneys’ fees and costs in prosecuting or defending its claim.


 


19

















 


32.                               Construction.  This Agreement is the result of negotiations between the Parties,
neither of whom has acted under any duress or compulsion, whether legal,
economic or otherwise.  Accordingly, the
terms and provisions hereof shall be construed in accordance with their usual
and customary meanings.  The Parties
hereby waive the application of any rule of law which otherwise would be
applicable in connection with the construction of this Agreement that ambiguous
or conflicting terms or provisions should be construed against the Party who
(or whose attorney) prepared the executed Agreement or any earlier draft of the
same.


 


33.                               Lease of Property. 
Effective upon execution of this Agreement by the Parties and continuing
until the first to occur of:  (a) the
expiration or earlier termination of this Agreement or (b) the Closing or
termination of the Real Estate Sales Contract, Dakota Group hereby leases to
JEI for the sum of One Dollar and No/100 ($1.00) the Property (the “Lease”).  The Lease shall be evidenced by a written
lease agreement setting out such terms as may be satisfactory to JEI, in its
sole discretion, including, but not limited to: 
(a) the right of JEI to erect a fence around the perimeter of the
Property; (b) the right of JEI to the exclusive possession of the
Property; and (c) the right of JEI to record a Memorandum of Lease in the
public records of Gilpin County, Colorado. 
The Lease to be executed by JEI and Dakota Group is attached to this
Agreement as Exhibit “G” and incorporated herein as if set out word
for word.  Prior to the commencement date
of the Lease, Dakota Group shall be solely responsible for the proper and
complete termination of all rights of tenancy to the Property vested with any
third party as of the Effective Date.


 


34.                               Date Computation.  If
any date of significance hereunder falls upon a Saturday, Sunday or recognized
Federal holiday, such date will be deemed moved forward to the next day which
is not a Saturday, Sunday or recognized Federal holiday.  The terms “working day” shall mean days
elapsed exclusive of Saturday, Sunday or recognized Federal holidays.


 


35.                               Dispute Resolution/Mediation/Arbitration.


 


(a)                                  Informal Resolution.  The
Parties shall attempt amicably to resolve any controversy, dispute or
difference arising out of this Agreement.


 


(b)                                 Mediation Predicate.


 


(i)                                     In the event the Parties are unable to
resolve such dispute, the Parties shall submit same to mediation.


 


(ii)                                  Each Party covenants and agrees that, within
seven (7) days after receipt of the other Party’s written request for
mediation, it will participate in at least two (2) hours with a mediator
for each issue brought forward by any Party. 
Any mediation proceeding shall be conducted in Denver, Colorado.  The fees of the mediator shall be borne
equally by all Parties to the dispute, unless otherwise agreed by them in
writing and all other court fees (including attorneys’ fees) and expenses
incurred by any Party shall be borne solely by the Party incurring same;
provided, however, should any Party fail or refuse to follow the terms of this
paragraph in pursuit of mediation, then such Party shall be fully liable for
the fees of the mediator and all costs, fees (including reasonable attorneys’
fees) and expenses incurred by both Parties in the other Party’s pursuit of
such


 


20

















 


mediation. 
An agreement by the Parties to settle any issues of such dispute shall
be regarded as a contract which provisions are conclusive as to those issues of
the dispute.


 


(c)                                  Arbitration.


 


(i)                                     After satisfaction of the mediation predicate
set out in Section 35(b), above), upon demand of either Party,
(whether made before or after the institution of any judicial proceeding) any
controversy or claim whatsoever arising out of or relating to this Agreement,
or the breach thereof, shall be settled by binding arbitration in Denver,
Colorado in accordance with the rules of the American Arbitration
Association (“AAA”) and judgment upon the award rendered by the arbitrator(s)
may be entered by any court having jurisdiction thereof.  THE PARTIES UNDERSTAND THAT BY AGREEING TO
BINDING ARBITRATION FOR THE RESOLUTION OF ANY DISPUTES THEY ARE WAIVING THEIR
RESPECTIVE RIGHT TO A JURY TRIAL.


 


(ii)                                  Any dispute submitted for arbitration shall
be referred to a panel of three (3) arbitrators.  The Party submitting (“Submitting Party”)
the intention to arbitrate (the “Submission”) shall nominate one
arbitrator.  Within thirty (30) days of
receipt of the Submission, the Party receiving the Submission (“Answering Party”)
shall nominate one arbitrator.  If the
Answering Party fails to timely nominate an arbitrator, then the second
arbitrator shall be appointed by the AAA in accordance with the industry
applicable AAA Rules (the “Rules”). 
If the arbitrator chosen by the Submitting Party and the arbitrator
chosen by or selected for the Answering Party can agree upon a neutral
arbitrator within fifteen (15) days of the choice or selection of the Answering
Party’s arbitrator, then such individual shall serve as the third
arbitrator.  If no such agreement is
reached, a third neutral arbitrator shall be appointed by the AAA in accordance
with the Rules.  The Parties agree that
they shall consent to an expedited proceeding under the Rules, to the full
extent the AAA can accommodate such a request.


 


(iii)                               The ruling of the arbitrators shall be
binding and conclusive upon all Parties hereto and any other person with an
interest in the matter.


 


(iv)                              Except as to either Party’s right to seek
injunctive relief under applicable law, the arbitration provision set forth
herein shall be a complete defense to any suit, action or other proceeding
instituted in any court regarding any controversy or claim (including, without
limitation, whether any controversy or claim is subject to arbitration) arising
out of or relating to this Agreement, or the breach thereof (whether, in any
case, involving: (x) a Party hereto, (y) their beneficiaries, successors,
assigns and subcontractors, or (z) such Party’s or successor’s directors,
officers, partners, members, managers, assigns or subcontractors,
representatives or agents); provided, however, that: (aa) any of the
parties to the arbitration may request a Colorado state court in Denver County,
Colorado, to provide interim injunctive relief in aid of arbitration hereunder
or to prevent a violation of this Agreement pending arbitration hereunder (and
any such request shall not be deemed a waiver of the obligations to arbitrate
set forth in this Section 35); (bb) any ruling on the award
rendered by the arbitrators may be entered as a final judgment in state or
federal court having jurisdiction over the Parties (and each of the Parties
hereto irrevocably submits to the jurisdiction of such court for such
purposes); and (cc) application may be made by a Party to any court of
competent jurisdiction


 


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wherever situated for enforcement of any such final judgment and the
entry of whatever orders are necessary for such enforcement.  In any proceeding with respect hereto, all
direct, reasonable costs and expenses (including, without limitation, AAA
administration fees and arbitrator fees) incurred by the Parties to the
proceeding shall, at the conclusion of the proceeding, be paid by the Parties
incurring same.


 


(d)                                 Injunctive Relief. 
Nothing in this Section 35 shall prevent or prohibit a Party’s
right to seek injunctive relief under applicable law.


 


36.                               Recitals.  The
terms, definitions and provisions of the Recitals set out above are expressly
incorporated herein by reference as if set out word for word.


 


37.                               Defined/Capitalized Terms.  Any
capitalized terms which are not defined in this Agreement shall have the
meaning ascribed to such term in the Real Estate Sales Contract.


 


38.                               Survival. 
The provisions of Sections 7, 13, 15, 16, 17, 20, 22, 23,
24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 and 38 of this
Agreement shall survive the exercise of the Option and the Closing of the Real
Estate Sales Contract and remain in full force and effect after Closing as
between the Parties hereto except to the extent limited herein and in the Real
Estate Sales Contract.  Provided,
further, nothing in this Section 38 shall construed or applied to
limit or negate the survival of other provisions in this Agreement which are
specified to expressly survive the exercise of the Option and the Closing of
the Real Estate Sales Contract but which may not be listed in this Section 38.


 


IN
WITNESS WHEREOF, the Parties have duly executed this Agreement on the 12th
day of September 2005.


 


 


	
   

  	
  DAKOTA
  GROUP:

  
	
   

  	
   

  
	
   

  	
  DAKOTA/BLACKHAWK, LLC,

  a Colorado limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Roger Pomanville

  	
   

  
	
   

  	
   

  	
  Roger Pomanville,
  Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wendell G. Prichett

  	
   

  
	
   

  	
   

  	
  Wendell G. Prichett,
  Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JEI:

  
	
   

  	
   

  
	
   

  	
  JACOBS ENTERTAINMENT,
  INC.,

  
	
   

  	
  And/Or Assigns

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen R. Roark

  	
   

  
	
   

  	
  Printed Name: Stephen
  R. Roark

  
	
   

  	
  Title: President/Chief
  Financial Officer

  
					



 


22

















 


ACCEPTANCE
BY ESCROW AGENT


 


The undersigned title company, as Escrow Agent, hereby acknowledges
receipt of a fully executed original (or executed original counterparts) of the
foregoing Agreement and the sum of $250,000.00 as the Initial Deposit referred
to therein, and accepts the obligations of the Escrow Agent as set forth
therein.  The Effective Date of the
Agreement is the date identified below.


 


 


	
   

  	
  GILPIN
  TITLE, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Mari O’Brien

  	
   

  
	
   

  	
  Name:

  	
    Mari
  O’Brien

  	
   

  
	
   

  	
  Title:

  	
  Commercial
  Escrow Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
  September 13,
  2005

  	
   

  
	
   

  	
   

  	
  “Effective Date”

  
									



 


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