Exhibit 10.2


LEASE


This Lease (the “Lease”) is made and entered into as of December
20, 2006 by and between Pinnacle Casinos and
Resorts, LLC, a Michigan limited liability company (“Pinnacle”), Colorado Casino Resorts, Inc., a Texas corporation (“CCRI”)
(except where otherwise specifically provided in this Lease, Pinnacle and CCRI
are collectively referred to as “Landlord”),
and Southwest Eagle, LLC, a Minnesota
corporation (“Southwest”) or its subsidiary (except where otherwise
specifically provided in this Lease, Southwest and its subsidiary are
collectively referred to as “Tenant”). Landlord
and Tenant are sometimes referred to in this Lease as a party or the parties.


BACKGOUND


A.            The current shareholders of CCRI
have entered into a Securities Purchase Agreement with Pinnacle dated October
7, 2005, under which Pinnacle will acquire all of the outstanding shares of
CCRI. Simultaneous with the closing of Pinnacle’s acquisition of the CCRI
Stock, Pinnacle agrees to cause CCRI to enter into this Lease and act as
Landlord, all in accordance with the terms and conditions stated in this Lease.


WITNESSETH:


1.             Premises.
In consideration of the payment of rent and the keeping and performance of the
covenants and agreements by Tenant as stated in this Lease, Landlord hereby
leases and demises to Tenant the “Premises”, which consists of:


A.            That certain real property commonly
referred to as the Double Eagle Hotel and Casino and Gold Creek Casino at
400-442 East Bennett Avenue, Cripple Creek, Colorado, together with all improvements
thereon and all rights, easements and appurtenances thereto, comprising the
building currently known as the Double Eagle Hotel and Casino, the legal
description of which is stated on Exhibit A to this Lease (the “Double
Eagle”), together with all furniture, fixtures and equipment located therein
and owned or controlled by Landlord; and


B.            That certain additional real
property and improvements owned by Landlord or its affiliates and situated in
Cripple Creek, Colorado that is not physically connected with the Double Eagle
but is, or could be, used in connection with the Double Eagle’s operation, the
legal description of which is stated on Exhibit B to this Lease (the “Off-Site
Properties”), together with all furniture, fixtures and equipment located
therein and owned or controlled by Landlord.


2.             Term.


A.            Lease
Term/Conditions Precedent. The term of the Lease commences when each and
all of the following conditions (the “Conditions Precedent”) have been
satisfied: (i) conclusion of Tenant’s due diligence examination (as described
in section 2.B of this Lease) in manner and substance satisfactory to Tenant,
in Tenant’s 










 



sole discretion; (ii)
execution of this Lease by the parties, together with all exhibits and
appendices thereto; (iii) execution of each and all of the Transaction
Documents as defined in section 2.B below; (iv) closing on each and all of the
transactions contemplated by the Transaction Documents, including without
limitation, Pinnacle’s acquisition of CCRI and Tenant’s acquisition of the
assets (other than real property and improvements) of the Double Eagle; (v)
Pinnacle, CCRI and Tenant obtaining financing on terms and conditions
satisfactory to Pinnacle and Tenant, respectively, with which to conclude the
transactions contemplated by the Transaction Documents; (vi) approval of the
Lease and of Tenant’s operation of the Double Eagle by the Colorado Limited
Gaming Control Commission (the “Gaming Commission”); (vii) receipt of all such
other regulatory approvals and licenses, if any, as may be required for Tenant
to operate the Double Eagle as a casino hotel (including, without limitation, a
gaming license and a liquor license); (viii) Landlord’s providing Tenant with
an opinion of Landlord’s counsel, or such other assurance in form and substance
satisfactory to Tenant, that Landlord owns and has the legal right to lease the
Premises; (ix) the absence of any adverse change in the condition or use of the
Premises and the Off-Site Properties between the date the due diligence period
ends and closing on the Lease; and (x) approval of the Lease by Tenant’s Board
of Directors.


B.            Due Diligence Period. Tenant
will have full and complete access at any time to the Premises and the Off-Site
Properties commencing as of the date that each and all of (i) this Lease, (ii)
the Term sheet between Southwest and Pinnacle, (iii) the Asset Purchase
Agreement between Southwest, Pinnacle, and CCRI (and their respective
affiliates, if any, as stated in the Asset Purchase Agreement), and (iv)
documents effecting acquisition of the Premises and the Off-Site Properties by
Pinnacle (collectively, the “Transaction Documents”) are executed, which access
will continue for a period of not less than thirty (30) days thereafter (the “Due
Diligence Period”). Such access will be for the purposes of conducting such due
diligence examination of the Premises and the Off-Site Properties and public
and private records relating thereto as Tenant deems necessary and appropriate
in its sole discretion. Upon execution of this Lease, Landlord will deliver to
Tenant copies of all soil tests, design or engineering studies, drawings,
plans, and other documents and materials relating to the Premises and the
Off-Site Properties in Landlord’s possession or subject to Landlord’s control. In
the event Tenant is satisfied with the results of its due diligence examination
and elect to commence the payment of rent as in this Lease described, Landlord
will assign to Tenant all Landlord’s right, title and interest in such
documents and materials, provided however, that, unless Tenant exercises
its right of first refusal to purchase the Premises or the Of-Site Property as
provided in this Lease, Tenant will, upon expiration of the Lease Term (as
defined in section 2.F below), assign back to Landlord all Tenant’s right,
title and interest in these documents and materials.


C.            Initial Term. The initial
term of the Lease commences upon the date (the “Commencement Date”) that Tenant
opens the Double Eagle as a public casino under Tenant’s management (the Conditions
Precedent stated in section 2.A above having been fully satisfied) and then
continues for a period of thirty (30) years (the “Initial Term”).



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D.            Extension Term. The term of
the Lease may be extended, at Tenant’s option, for up to an additional fifteen
(15) years in the form of three (3) five-year options (the “Extension Term”),
all or any of which Tenant may exercise by providing Landlord with written
notice of Tenant’s intention to extend the lease term no less than sixty (60)
days before expiration of the Initial Term or any Extension Term.


E.             Holding Over. Nothing in
this Lease may be deemed to permit Tenant to use or occupy the Premises after
the expiration of the Initial Term or, if applicable any Extension Term of the
Lease. If Tenant continues to occupy the Premises after such expiration, Tenant’s
occupancy will (unless the parties otherwise agree in writing) be deemed to
create a month-to-month tenancy at a monthly rental equal to one hundred ten
percent (110%) of the annual rent, prorated on a monthly basis for the month
before commencement of the holdover period, and Tenant will remain liable for
all other charges payable by Tenant under the Lease. Such holdover occupancy is
subject to all of the terms and conditions of this Lease.


F.             Definition of Lease Term. The
phrase “Lease Term” means the Initial Term together with, if applicable, any
Extension Term.


G.            Definition of Lease Year. The
term “Lease Year” means a period of twelve (12) full consecutive calendar
months. The first Lease Year commences on the Commencement Date. Each Extension
Term will commence on the anniversary of the commencement date of the first
Lease Year.


3.             Rent.


A.            During the Lease Term. Tenant
must pay annual rent in the following amounts during the Initial Term of the Lease
(annual amounts to be paid in 12 equal monthly installments during each Lease
Year):




	
  ·

  	
   

  	
  Lease Year 1

  	
   

  	
  $4 million

  
	
  ·

  	
   

  	
  Lease Year 2

  	
   

  	
  $4.1 million

  
	
  ·

  	
   

  	
  Lease Year 3

  	
   

  	
  $4.2 million

  
	
  ·

  	
   

  	
  Lease Years 4, 5, 6

  	
   

  	
  $4.3 million

  
	
  ·

  	
   

  	
  Lease Years 7, 8, 9

  	
   

  	
  $4.5 million

  
	
  ·

  	
   

  	
  Lease Years 10, 11, 12

  	
   

  	
  $4.635 million

  
	
  ·

  	
   

  	
  Lease Years 13, 14, 15

  	
   

  	
  $4.774 million

  
	
  ·

  	
   

  	
  Lease Years 16, 17, 18

  	
   

  	
  $4.887 million

  
	
  ·

  	
   

  	
  Lease Years 19, 20, 21

  	
   

  	
  $5.033 million

  
	
  ·

  	
   

  	
  Lease Years 22, 23, 24

  	
   

  	
  $5.183 million

  
	
  ·

  	
   

  	
  Lease Years 25, 26, 27

  	
   

  	
  $5.338 million

  
	
  ·

  	
   

  	
  Lease Years 28, 29, 30

  	
   

  	
  $5.498 million

  






 


If Tenant
exercises any or all of its three five-year extensions, annual rent will
increase by three percent (3%) for each three-year period of any Extension Term
(for 



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example, if Tenant
exercises the first of its three five-year options, annual rent during Lease
Years 31, 32 and 33 will be $5.663 million, which is a three percent (3%)
increase over $5.498 million, etc.).


B.            Deposit. On the Commencement
Date, Tenant must pay to Landlord, in advance, a deposit of first month’s rent
in the amount of $330,000 and last month’s rent in the amount of $330,000, an
aggregate of $660,000 (the “Deposit”). Tenant must pay the Deposit in
accordance with Section 3.D. of this Agreement.


C.            Net Lease. It is
the intent of the Landlord and Tenant that the rent to be paid during the Lease
Term will be a net return to Landlord, free of expense, charge, or reduction
with respect to the Premises. Except as otherwise provided in this Lease,
Tenant must pay all Operating Expenses of the Premises during the Lease Term. For
purposes of this Lease, “Operating Expenses” to be paid by Tenant are defined
as:


(i)            All real property taxes and
assessments levied against the Premises by any governmental authority, provided
however that the term “taxes and assessments,” as used in this Lease, does
not include any net federal or state income taxes levied or assessed on
Landlord, unless such taxes are a specific substitute for real property taxes. The
term “assessment” includes so-called special assessments imposed by any
authority having the direct power to tax, including any city, county, state or
federal government. For purposes of this Lease, any special assessment will be
deemed payable in such number of installments as is permitted by law.


(ii)           Costs incurred in connection with
providing energy for the Premises, including costs of propane, butane, natural
gas, steam, electricity, solar energy and fuel oils, coal or any other energy
sources.


(iii)          Costs of water and sanitary and storm
drainage services.


(iv)          Costs of general maintenance and
repairs occasioned by normal wear and tear on the Premises experienced during
the Lease Term, including the cost of maintaining and repairing (but not
replacing) HVAC and other mechanical systems.


(v)           Costs of maintenance and replacement
of landscaping.


(vi)          Costs of obtaining insurance insuring
the Premises, which insurance policies must name Landlord as an additional
insured, and Tenant’s personal property located on the Premises.


“Operating
Expenses” does not include the following expenses, which will be paid by
Landlord:


(i)            Costs of repair of structural
defects, including the roof, walls and floors of the Premises, or of
replacement of the HVAC, plumbing (except in 



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the event of damage
caused by freezing pipes), or sprinkler system (except in the event of damage
caused by freezing pipes). Landlord has represented to Tenant that the Premises’
structural integrity is sound and that all essential operating equipment and
components were properly installed and maintained. As such, Landlord warrants
and represents to Tenant that the Premises and all its major components are in
good working order, free from defects and deficiencies. Landlord further
warrants and represents that the Premises complies with all permits,
certificates, laws, rules building and other codes and regulations of
governmental agencies or authorities (collectively, the “Codes”) now in effect,
and that Landlord will, at its expense, cause the Premises to continue to
comply with such Codes as are now in effect during the Lease Term.


(ii)           Costs of repairs or other work
occasioned by fire, windstorm or other insured casualty to the extent of
insurance proceeds received.


(iii)          Costs of repairs or rebuilding
necessitated by condemnation.


(iv)          Any interest on borrowed money or debt
amortization.


If Landlord and
Tenant disagree as to whether a particular expense is an “Operating Expense”
for purposes of this Lease, Tenant may make and pay for the repair, and the
parties will then each select an expert who will determine the nature of the
expense and its apportionment, if any, between Landlord and Tenant. If the two
experts are unable to agree on the nature of the apportionment of the expense,
the two experts must together appoint a third expert, whose decision as to both
elements of the determination will be final and binding upon Landlord and
Tenant. Landlord and Tenant must each bear their own costs in retaining their
own experts, and they will share equally in the costs associated with the
retention and work of the third expert, if one is appointed.


D.            Place and Method of Payment. Rent
is payable at Landlord’s notice address reflected in Section 18.E below. Tenant
must issue to Tenant’s bank irrevocable instruction to pay rent due to
Landlord, as stated in Section 3.B., by wire transfer from Tenant’s primary
operating account on or before the [1st] business
day of each month.


4.             Use of
Premises.


A.            Tenant may use the Premises for any
lawful purpose, including, without limitation, hotel operations, restaurant
operations, parking, retail sales operations, and a casino as contemplated by
the Colorado Limited Gaming Act, C.R.S. §12-47.1-101, et  seq.
(the “Gaming Act”) (the Gaming Act and all amendments and gaming regulations
now existing or hereafter adopted, and all gaming-related laws of the City of
Cripple Creek and the County of Teller, are sometimes collectively referred to
in this Lease as the “Gaming Laws”), and for any other ancillary or related
use(s) as may be permitted by law. Landlord will have no control over or power
to influence decisions concerning operation of the Premises.



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B.            Landlord agrees to cooperate as
reasonably required by Tenant to assist Tenant in obtaining and maintaining
such licenses for the Premises as Tenant requires and will, in particular,
execute any and all documents necessary to obtain such licenses. Landlord will
not cause any such licenses to be denied, revoked, not renewed, or suspended,
whether through actions of Landlord prior to the issuance of such licenses or
thereafter during the Lease Term.


C.            Landlord further agrees that from
and after the date the parties execute this Lease, Landlord must not grant or
convey any easement, lease, encumbrance, license, permit, or any other legal or
beneficial interest in or to the Premises without the prior written consent of
Tenant, nor may Landlord violate, or allow the violation of, any law,
ordinance, rule or regulation affecting the Premises. Landlord will do or cause
to be done all things reasonably within its control to preserve intact and
unimpaired any and all rights of way, easements, grants, appurtenances,
privileges, and licenses in favor of or constituting any portion of the
Premises.


D.            Subject to section 3.B of this Lease,
Tenant will, at its own expense, keep the Premises in good repair and
tenantable condition and indemnify Landlord against any loss, damage or expense
arising by reason of any failure of Tenant so to keep the Premises or due to
any act of neglect of Tenant, its agents, employees, contractors, invitees,
licensees, tenants or assigns. If Tenant fails to perform, or cause to be
performed, such maintenance and repairs, then at the option of Landlord, any
such maintenance and repair may be performed or caused to be performed by
Landlord, and the reasonable cost and expense thereof charged to Tenant, and
Tenant will pay the amount thereof to Landlord on demand as additional rent.


E.             Except as otherwise provided in
this Lease, Tenant will, at its own expense, comply with all statutes,
regulations, rules, ordinances and orders of any governmental body, department
or agency thereof that apply to or result from Tenant’s use or occupancy of the
Premises.


5.             Additional
Improvements/Mechanics Liens


A.            Additional Improvements. Tenant
may, from time to time, at Tenant’s expense, construct or install other
improvements at the Double Eagle or any portion of the Premises contiguous with
or adjacent to the Double Eagle, and make such changes, alterations and
additions to the Premises as Tenant deems necessary or desirable (the “Additional
Improvements”). Where appropriate or required, Additional Improvements will be
made under the supervision of an architect or engineer licensed in the state of
Colorado and selected by Tenant in its sole discretion.


B.            Mechanic’s Liens. In
connection with the construction of any Additional Improvements, Tenant must
cause the payment of all proper and valid invoices and charges of all
contractors, subcontractors, suppliers, materialmen and similar parties who
furnish services or materials in connection with the construction 



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process. If any party
records a mechanic’s lien to enforce any claim for services or materials
alleged to have been provided in connection with the Premises, Tenant must so
advise Landlord in writing and cause the same to be released of record within
sixty (60) days after the recordation thereof, and Tenant is liable to satisfy
and cause a discharge of any such mechanic’s lien claim.


Notwithstanding
the foregoing, Tenant has the right to contest any such mechanic’s lien
provided that Tenant conducts such contest in a timely manner and with due
diligence, and that Tenant provides Landlord with either cash, a surety bond or
a letter of credit (as Tenant decides in Tenant’s sole discretion) in an amount
equal to the lien claim. If Tenant loses any such contest, and all further
rights of appeal have expired, Tenant must satisfy the mechanic’s lien claim in
full prior to any foreclosure sale or other disposition of the Premises in order
to satisfy the claim.


6.             Improvements to Off-Site Properties.


A.            Improvements by Landlord. Landlord
may, after providing Tenant with at least ninety (90) days prior written
notice, improve or permit the improvement of any portion of the Off-Site
Properties not contiguous with or adjacent to the Double Eagle for any purpose
other than in support of the Double Eagle’s operation, except:


(i)            Landlord may not use or permit the
use of the Off-Site Properties to compete with the Double Eagle in any way,
directly or indirectly, whether for a casino or ancillary casino facilities or
improvements (by way of example and not limitation, parking by or for hotels or
casinos other than the Double Eagle) or otherwise; and


(ii)           If the portion of the Off-Site
Properties to be developed is use by Tenant at the time the notice is
delivered, Landlord must provide Tenant with alternative property (which may or
may not be part of the Off-Site Properties) for Tenant’s use that is reasonably
acceptable to Tenant, at no additional cost to Tenant.


B.            Effect of Development by Landlord.
Any portion of the Off-Site Properties improved by Landlord in accordance with
Section 6.A. will no longer be subject to this Lease and Exhibit B, will be
deemed amended by deletion of the legal description of such property. Termination
of this Lease with regard to any portion of the Off-Site Properties in
accordance with Section 6.A. will not affect any other provision of this Lease.


C.            Improvements by Tenant. Tenant
is permitted, subject to Landlord’s prior written approval, to improve any
portion of the Off-Site Properties for any purpose. If Tenant improves any
portion of the Off-Site Properties as provided in this Section 6.C.:


(i)            the provisions of Section 5.B. of
this Lease will apply to any such improvement; and



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(ii)           Landlord’s right to improve such
property under Section 6.A. of this Lease terminates.


7.             Title to Assets and Improvements.


A.            As a condition precedent to Tenant
entering into this Lease, Landlord must, at Landlord’s expense, obtain a title
insurance policy insuring Tenant’s leasehold interest in the Premises, which
title insurance policy must evidence Landlord’s fee simple interest ownership
in the Premises subject only to (i) mortgage liens totaling no more than $60,000,000.00, (ii) general property
taxes for the current year, and (iii) such easements, rights of way,
restrictions and other title matters as Tenant deems, in Tenant’s sole
discretion, not to adversely affect the value of Tenant’s intended use of the
Premises (collectively, the “Permitted Exceptions”). The title insurance policy
is attached to this Lease as Exhibit 1 and incorporated in this Lease by
reference. Landlord warrants that it has fee simple title to the Premises, free
and clear of all encumbrances save for the Permitted Exceptions.


B.            Except as otherwise provided in this
Lease, Landlord is the owner of all improvements paid for and constructed by
Tenant upon the Premises, as the same may be altered, expanded and/or or
improved in accordance with this Lease, except that any gaming or other
equipment purchased by Tenant for use in operating the Double Eagle is the
property of Tenant. Except as provided in this Lease, upon the expiration or
earlier termination of this Lease, all improvements then existing upon the Premises
will revert to and become the property of Landlord without compensation to
Tenant.


C.            Tenant must surrender the Premises
at the end of the Lease Term or upon earlier termination of the Lease in good
condition and repair, reasonable wear and tear and fire and other casualty
excepted.


8.             Quiet Enjoyment.
So long as Tenant is not in material, uncured default under this Lease,
Landlord must permit Tenant to peaceably and quietly use and enjoy the Premises
during the Lease Term without hindrance or interruption by Landlord or any
other person or persons lawfully or equitably claiming by, through or under
Landlord. Notwithstanding the foregoing, Landlord may conduct reasonable
inspections of the Premises upon providing ten (10) days prior written notice
of such inspection to Tenant.


9.             Casualty and Restoration of the Premises.
If the Premises are damaged by fire or other casualty during the Lease Term,
Tenant may, at its option, (i) terminate the Lease, retain such insurance
proceeds as relate to improvements made by Tenant on the Premises before the
casualty, and permit use of whatever portion of the remaining process is
necessary to restore the Premises to their condition as of the Commencement
Date of this Lease, or (ii) retain all insurance proceeds received as a result
of the casualty, use the same to restore the Premises to their condition as of
the Commencement Date of this Lease, and continue to make rent payments during
the Lease Term. Tenant must notify Landlord in writing within thirty (30) days
following the occurrence of any 



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casualty concerning which
of these two options Tenant has chosen, and rent will abate during the thirty
(30) day period.


10.          Condemnation.
If any portion of the Premises is taken by right of eminent domain or by
condemnation, or is conveyed in lieu of any such taking, Tenant may terminate
this Lease and retain those condemnation proceeds that relate to improvements
made by Tenant on the Premises before the taking or condemnation.


11.          Right of First Refusal.
If Landlord desires to transfer, assign or otherwise convey all or any portion
of its interest in the Premises, whether initiated by Landlord or by an offer
to purchase from a third party, Landlord must so notify Tenant in writing (the “Notice”),
specifying the terms and conditions and the price at which Landlord intends to
offer its interest (collectively, the “Terms”). Tenant will have thirty (30)
days (or any longer period stated in any offer received from a third party)
after receipt of the Notice within which to notify Landlord that Tenant desires
to purchase the interest being offered on the Terms. If Tenant fails to so
notify Landlord, Landlord will be free to consummate a transaction with a third
party on the Terms at any time within the three (3) months immediately following
expiration of Tenant’s notification period without re-offering the transaction
to Tenant. If no sale occurs with that three (3) month period, then prior to
consummating any transaction, the provisions of this Section 11 must again be
complied with. If Tenant timely notifies Landlord that Tenant desires to
exercise the right to purchase contemplated by this Section 11, the closing
will occur on the Terms within ninety (90) days of the date of Tenant’s giving
such notice.


12.          Tenant’s Right to Encumber. Tenant
may at any time during the Lease Term encumber the leasehold estate by mortgage
or deed of trust. This right of Tenant to encumber the leasehold estate is a
continuing right and will not be deemed to be exhausted by the exercise of this
right on one or more occasions. Any such encumbrance must be expressly subject
to the provisions of this Lease, must not encumber Landlord’s fee simple
interest in the Premises, and must be subordinate to any loans to which
Landlord has subordinated its fee simple interest.


13.          Assignment.


A.            By Landlord. Landlord may
assign this Lease upon written notice to Tenant, provided that such
assignment is permitted by the Gaming Laws, and further provided that
any such assignment is subject to Tenant’s right of first refusal stated in
Section 11 of this Lease.


B.            By Tenant. Tenant may assign
this Lease upon written notice to Landlord, provided that such
assignment is permitted by the Gaming Laws. Notwithstanding any assignment,
Tenant will at all times remain liable for the payment of rent and all other
payment obligations in this Lease specified to be paid by Tenant, and for
compliance with all Tenant’s other obligations under this Lease.



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14.          Default by Tenant.


A.            Definition of Event of Default.
Each one of the following events constitutes an “Event of Default”:


(i)            Any failure by Tenant to pay rent or
other monetary sums required to be paid hereunder on the date such sums are due
and the continuance of such failure for a period of thirty (30) days after
written notice of such failure from Landlord.


(ii)           The filing of any petition or the
commencement of any case or proceeding by Tenant under any provision or chapter
of the federal Bankruptcy Act, the federal Bankruptcy Code, or any other
federal or state law relating to insolvency, bankruptcy, or reorganization, or
the adjudication that Tenant is insolvent or bankrupt, or the entry of an order
for relief under the federal Bankruptcy Code with respect to Tenant.


(iii)          The filing of any petition or the
commencement of any case or proceeding described in Section 14.A.(ii) above
against Tenant, unless such petition and all proceedings initiated thereby are
dismissed within sixty (60) days from the date of such filing; the filing of an
answer by Tenant admitting the allegations of any such petition; the
appointment of or taking possession by a custodian, trustee or receive for all
or any assets of Tenant, unless such appointment is vacated or dismissed within
sixty (60) days from the date of such appointment.


(iv)          Tenant fails to perform any of the
other material agreements, terms, covenants or conditions of the Lease on
Tenant’s part to be performed, and such non-performance continues for a period
of thirty (30) days after written notice thereof by Landlord to Tenant or, if
such performance cannot reasonably be attained within such thirty (30) day
period, Tenant does not in good faith commence such performance within such
thirty (30) day period and does not diligently proceed therewith to completion.


B.            Remedies of Landlord. If any
one or more Events of Default occurs, then Landlord has the right, at Landlord’s
election, either to:


(i)            Make any payment or take any action
to cure any the Event of Default by Tenant in a manner and to an extent that
the Landlord in good faith deems necessary or desirable.


(ii)           Subject to the Gaming Laws, give
Tenant written notice in accordance with the Colorado forcible entry and
detainer laws, terminate this Lease as of the date of Tenant’s default or as of
any later date specified in Landlord’s notice of default, and demand and
recover possession of the Premises from Tenant.


(iii)          Subject to the Gaming Laws, re-enter
and take possession of all or any part of the Premises and expel Tenant
therefrom. After recovering possession of the Premises, Landlord must use
reasonable efforts to re-let the Premises.



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C.            Management Agreement. Notwithstanding
the foregoing, if Landlord elects to pursue the remedies in either or both or subparagraphs
14.B(ii) or (iii) above, (1) Tenant may remove from the Premises, without
payment or liability to Landlord, all gaming-related assets, including gaming
equipment, and (2) subject to approval by the Gaming Commission, Landlord and
Tenant will enter into a management agreement pursuant to which Tenant manages
the Double Eagle on terms to be agreed upon until the date agreed upon by
Landlord and Tenant in the management agreement, or licensing by the Gaming
Commission of a new operator.


D.            Remedies Cumulative. Each of
the remedies described above, and all of the remedies available to Landlord at
law or in equity upon a default by Tenant, are cumulative with and in addition
to one another, and may be exercised simultaneously or successively, as Landlord
may deem appropriate, without any exercise of one remedy being deemed an
election of remedies or a waiver to the exclusion of any other remedy.


15.          Default by Landlord.


A.            Definition of Default. Landlord
will be in default under this Lease if Landlord fails to comply with any
material term, condition or obligation of Landlord under the Lease, and that
failure continues for a period of thirty (30) days after Tenant gives Landlord
written notice of failure, unless that failure cannot reasonably be cured with
the thirty (30) day period, in which event the cure period will extend so long
as Landlord has in good faith begun to take action to cure the default with the
thirty (30) day period and diligently proceeds to completion thereafter.


B.            Remedies of Tenant. Upon the
occurrence of any default by Landlord, Tenant has the right, at its election,
then or at any time thereafter, to exercise any one or more of the following
remedies:


(i)            Make any payment or take any action
to cure any such default by Landlord in a manner and to an extent that Tenant
in good faith deems necessary or desirable.


(ii)           Terminate this Lease as of the date
of the default by Landlord, or as of any later date specified in a written
notice of termination to Landlord.


(iii)          Commence an action to specifically
enforce any of the Landlord’s obligations under the Lease.


C.            Management Agreement. Notwithstanding
the foregoing, if Tenant elects to pursue the remedies in subparagraphs
14.B(ii) above, (1) Tenant may remove from the Premises, without payment or
liability to Landlord, all gaming-related assets, including gaming equipment,
and (2) subject to approval by the Gaming Commission, Landlord and Tenant will
enter into a management agreement under which Tenant manages the Double Eagle
on terms to be agreed upon until the dated agreed upon 



 11
 






 



by Landlord and Tenant in
the management agreement, or licensing by the Gaming Commission of a new
operator.


D.            Remedies Cumulative. Each of
the remedies described above, and all of the remedies available to Tenant at
law or in equity upon a default by Landlord, are cumulative with and in
addition to one another, and may be exercised simultaneously or successively,
as Tenant may deem appropriate, without any exercise of one remedy being deemed
an election of remedies or a waiver to the exclusion of any other remedy.


16.          Landlord’s Additional
Representations and Warranties. Landlord represents and
warrants that to the best of Landlord’s knowledge and belief as of the
Commencement Date of this Lease:


A.            There is no litigation pending or
threatened that in any manner affects the Premises.


B.            There are no violations of any
federal, state, or local law, code, ordinance, rule, regulation, or requirement
affecting the Premises.


C.            The Premises have full and free
access to and from public highways, streets, and/or roads adjacent to the
Premises, and Landlord has no knowledge of any fact or condition that would
result in the termination of such access.


D.            Landlord has not received any
notices, demands, or deficiency comments from any mortgagee of the Premises or
from any state, municipal, or county government or any agency thereof with
regard to the Premises.


E.             Landlord has not received any
notice of, and has no other knowledge or information of, any pending or
contemplated change in any applicable law, ordinance, or restriction; or of any
pending or threatened judicial or administrative action; or of any action
pending or threatened by adjacent landowners; or of any natural or artificial
condition upon the Premises, or any part thereof, any of which would result in
any material change in the condition of the Premises, or any part thereof, or
in any way limit or impede the operation of the Double Eagle.


F.             Landlord has not entered into any
agreements with the City of Cripple Creek, the County of Teller, or the State
of Colorado, or any other governmental entity with respect to the Premises that
may result in liability or expense to Tenant, and further, that there are no
special improvement assessments relating to the Premises.


G.            Each and every document, schedule,
item and other information to be delivered to Tenant by Landlord under this
Lease is true, accurate and correct, and no such document, schedule or
information contains or will contain any untrue statement of a material fact,
or omits or will omit a material fact.



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17.          Miscellaneous.


A.            No Implied Waiver. No failure
by either party to insist upon the strict performance of any term, covenant or
agreement in this Lease, or to exercise any right or remedy in connection with
this Lease, and no acceptance of full or partial payment during the continuance
of any default by Landlord or Tenant, will constitute a waiver of any term,
covenant or agreement or any right or remedy or any default by Landlord or
Tenant.


B.            Survival of Provisions. Notwithstanding
any termination of this Lease, the Lease will continue in full force and effect
as to any provisions of this Lease that specifically contemplate and require
observance or performance by Landlord or Tenant subsequent to termination.


C.            Binding Effect. This Lease
extends to and binds the heirs, executors, legal representatives, successors,
and permitted assign of Landlord and Tenant. The terms, covenants, agreements
and conditions in this Lease must be construed as covenants running with the
Premises.


D.            Recording, Subordination and
Attornment. This Lease and/or any Memorandum of this Lease may, at Tenant’s
sole option, be recorded in a manner and at a time selected by Tenant in its
sole discretion. In addition, upon execution of this Lease and as a condition
precedent to the commencement of the Term of this Lease, Landlord must obtain
from Landlord’s mortgage lender(s) subordination and attornment agreements in
form and substance satisfactory to Tenant.


E.             Notices. All notices required
or permitted under this Lease must be given by registered or certified mail,
return receipt requested, correctly addressed and postage prepaid, or by hand
or commercial carrier delivery, or by facsimile as follows:


	
  

  	
  If to Southwest:

  	
   

  	
  With a copy to:

  
	
   

  	
  Mr. Thomas E.
  Fox

  Southwest Casino Corporation

  2001 Killebrew Drive, Suite 350

  Minneapolis, MN 55425

  (952) 853-9990

  	
   

  	
  Thomas Snook, Esq.

  General Counsel

  Southwest Casino Corporation

  2001 Killebrew Drive, Suite 350

  Minneapolis, MN 55425

  (952) 853-9990



  



 



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  If to Pinnacle:

  	
   

  	
  With a copy to:

  
	
   

  	
  Dorian N. Lange

  2127 University Park Drive

  Suite 300

  Okemos, MI 48864

  (517) 349-7200

  	
   

  	
  Richard F. Fabiano

  6629 Denham Court SE

  Grand Rapids, MI 49546

  (616) 481-2756

  



 


Any notice delivered by
mail in accordance with this section will be deemed to have been duly given on
the third business day after the same is deposited in any post office or postal
box regularly maintained by the United States Postal Service, properly
addressed, postage prepaid. Any notice delivered by facsimile will be deemed to
have been duly given upon receipt if receipt is confirmed mechanically or by
the recipient. Any notice delivered by hand or commercial carrier will be
deemed to have been given upon actual receipt. Either party, by notice given as
in this Lease provided, may change the address to which future notices may be
sent.


F.             Time of the Essence. Time is
of the essence under this Lease for the performance and observance of all
obligations of Landlord and Tenant, and all provisions of this Lease must be
strictly construed.


G.            Captions for Convenience. The
headings and captions of this Lease are for convenience only and must not be
considered in interpreting the provisions of this Lease.


H.            Severability. If any
provision of this Lease is held invalid or unenforceable by a court of
competent jurisdiction, the remainder of the Lease will not be affected by that
holding, it being the intent of the parties that the provisions of this Lease
are enforceable to the fullest extent permitted by law. There is deemed
substituted for any invalid or unenforceable provision a valid and enforceable
provision as similar as possible to the invalid provision.


I.              Venue and Governing Law. This
Lease is governed by and interpreted under the laws of Colorado without
reference to Colorado’s conflicts of law principles, and will be enforced in
the courts of Colorado.


J.             Integration/Entire Agreement.
This Lease, the Exhibits to this Lease, and the other documents expressly
referenced in this Lease constitute the entire agreement between the parties
concerning the subject matter of this Lease, and supersede all prior or
contemporaneous oral or written negotiations, understandings or agreements.


K.            Modification/Amendment. This
Lease may not be amended, changed or modified except in a writing signed by all
parties.


Signatures
on next page.



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IN WITNESS WHEREOF, the parties have caused this Lease to be
executed as of the day and year first written above.


	
  Landlord:

  	
   

  	
  Tenant:

  
	
   

  	
   

  	
   

  
	
  Pinnacle Casinos and Resorts, LLC

  	
   

  	
  Southwest Eagle, LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Dorian N. Lange

  	
   

  	
  By:

  	
  /s/ Thomas E. Fox

  
	
   

  	
  Managing Member

  	
   

  	
   

  	
  Thomas E. Fox, President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Colorado Casino Resorts, Inc.

  	
   

  	
   

  	
   

  
	
  (to be executed upon acquisition of CCRI

  	
   

  	
   

  	
   

  
	
  by Pinnacle)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 



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