Document:

Exhibit 10.2

 

LIMITED
COVENANT NOT TO SUE AND RELEASE OF LIMITED GUARANTY

 

This Limited Covenant Not to Sue and Release of Limited Guaranty (“Agreement”)
is made and entered into as of October 19, 2008 by and among Southwest
Casino Corporation, a Nevada corporation (“SCC”), Southwest Casino and
Hotel Corp., a Minnesota corporation (“SCH”) (SCC and SCH are referred
to herein each individually as a “Guarantor” and collectively, as the “Southwest
Guarantors”), and Black Diamond Commercial Finance, L.L.C., a Delaware
limited liability company, as Agent (“Agent”). Unless otherwise
specified herein, capitalized terms used in this Agreement shall have the
meanings ascribed to them in the Credit Agreement (as hereinafter defined).

 

WITNESSETH:

 

WHEREAS, pursuant to
that certain Credit Agreement, dated as of April 20, 2007 (as heretofore
amended, amended and restated, supplemented or otherwise modified, the “Credit
Agreement”), by and among Borrower, North Metro Hotel, LLC, a Minnesota
limited liability company, as a guarantor and a Loan Party (“Hotel LLC”),
the financial institutions party thereto from time to time as lenders
(collectively, the “Lenders”), and Agent, Lenders have made certain
loans and financial accommodations to Borrower;

 

WHEREAS, SCC, SCH
and Agent are parties to that certain Limited Guaranty dated as of July 1,
2008 (the “Southwest Guaranty”), pursuant to which the Southwest
Guarantors unconditionally guaranteed the Obligations on a limited basis as set
forth therein, and SCH and Agent are parties to that certain Pledge Agreement,
dated as of April 20, 2007 (as amended, restated, supplemented or
otherwise modified from time to time, the “Southwest Pledge Agreement”),
pursuant to which SCH pledged to Agent, for the benefit of itself and the
benefit of Lenders, a first priority security interest in the Pledged
Collateral (as defined in the Southwest Pledge Agreement);

 

WHEREAS, MTR-Harness, Inc.,
a Minnesota corporation (“MTR Harness”), MTR Gaming Group, Inc., a Delaware corporation (“MTR Gaming”)
(MTR Harness and MTR Gaming are referred to herein each individually as
an “MTR Guarantor” and collectively, as the “MTR Guarantors”) and
Agent are parties to that certain Limited Guaranty dated as of July 1,
2008 (the “MTR Guaranty”), and MTR Harness and Agent are parties to that
certain Pledge Agreement, dated as of April 20, 2007 (as amended,
restated, supplemented or otherwise modified from time to time, the “MTR
Pledge Agreement”);

 

WHEREAS, certain
Events of Default have occurred and are continuing under the Credit Agreement
as of the date hereof (the “Existing Defaults”), and as a result of the
Existing Defaults, Agent and the Lenders have terminated their obligation to
make further extensions of credit to or for the benefit of Borrower and are
entitled to exercise any and all default-related rights and remedies under the
Credit Agreement, other Loan Documents (which term, for purposes of this
Agreement, does not include the MTR Pledge Agreement or the MTR Guaranty)
and/or applicable law;

 

 

WHEREAS, the parties
hereto are also party to that certain Settlement Agreement of even date
herewith, which contemplates the execution of this Agreement in conjunction
with certain other Agreements to be executed concurrently herewith; and

 

WHEREAS, in
consideration of SCH’s entry into the Settlement Agreement, Agent has agreed
that, subject to the terms and conditions hereof, it would not sue to enforce
the Southwest Guaranty.

 

NOW THEREFORE, in
consideration of one dollar and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:

 

1.                                      Conditions
Precedent. The obligations of Agent under this Agreement are subject to the
satisfaction of all of the applicable conditions set forth below:

 

(a) Agent shall have received a fully executed copy of
that certain Settlement Agreement among SCH, SCC and Agent, dated as of the date hereof (the “Settlement
Agreement”);

 

(b) Agent shall have received a fully executed copy of
that certain Limited Liability Company Interest Purchase Agreement
between SCH and Agent, dated as of the date hereof (the “Purchase Agreement”);

 

(c) Agent shall have received a fully executed
Consulting Agreement between SCH and Agent, dated as of the date hereof (the “Consulting
Agreement,” and, collectively with this Agreement, the Settlement Agreement
and the Purchase Agreement, the “Transaction Documents”); and

 

(d) The transactions contemplated by the Purchase
Agreement shall have closed and been consummated by no later than October 19,
2008.

 

2.                                      Covenant
Not To Sue. Agent, on behalf of itself and its affiliates, successors and assigns, hereby agrees not to initiate
against the Southwest Guarantors or any of their respective successors,
assigns, insurers, administrators, heirs, and beneficiaries (the “Southwest
Parties”), any proceeding of any nature based on any claim seeking to
enforce the Southwest Guaranty or otherwise recover any amounts due thereunder
from any of the Southwest Parties during the period from the date hereof until
the earliest to occur of any of the following:

 

(a) the occurrence of any default or
event of default under any of the Transaction Documents (other than a default
or event of default arising as a result of the action or inaction of Agent), or
the breach (by any party other than Agent) of any term or condition of any of
the Transaction Documents; and

 

2

 

(b) the date on which any
court or any federal, state or local agency, or any other tribunal or body of
competent jurisdiction determines, or the date on which one or more of the
Southwest Guarantors asserts or alleges (whether in a claim or cause of action
commenced by any party in any court or before any federal, state or local
agency, or any other tribunal or body, or otherwise in any writing to Agent)
that any of the Transaction Documents or any of the transactions contemplated
thereby are invalid or unenforceable in whole or in part.

 

3.                                      Release
and Termination of Southwest Guaranty. Any and all rights and obligations
of SCC, SCH, Agent and Lenders under the Southwest Guaranty will be released
on, and the Southwest Guaranty will be of no further force and effect as of,
the later to occur of:

 

(a) the earlier to occur
of the following:

 

(1)             a final determination by a court of
competent jurisdiction that Agent: (i) has duly and properly acquired all
right, title and interest in and to the Acquired Interest (as such term is
defined in the Purchase Agreement, the “Acquired Interest”) formerly
owned by SCH, (ii) has properly succeeded to SCH’s Membership Interest (as
such term is defined in the Purchase Agreement, the “Membership Interest”)
in North Metro Harness Initiative, LLC, a Minnesota limited liability company (“North
Metro”), except that portion of the Membership Interest comprising the
Retained Interest (as such term is defined in the Purchase Agreement, the “Retained
Interest”), and (iii) is a “Member,” “Substitute Member” and “Managing
Member” (as such terms are defined in the Member Control Agreement) for all
purposes and in all respects under the Member Control Agreement (as such term
is defined in the Purchase Agreement, the “Member Control Agreement”);
and

 

(2)             the receipt by Agent of documentation, in
form and substance reasonably acceptable to Agent, executed and delivered by
all of the Members (as such term is defined in the Member Control Agreement) of
North Metro: (i) acknowledging and consenting to Agent’s acquisition of
the Acquired Interest; (ii) admitting Agent as a “Member,” “Substitute
Member” and “Managing Member” (as such terms are defined in the Member Control
Agreement) under the Member Control Agreement for all purposes and in all
respects; and (iii) acknowledging and consenting to Agent’s succession to
SCH’s Membership Interest in North Metro, except that portion of the Membership
Interest comprising the Retained Interest; and

 

(b) the satisfaction of all obligations
of SCH under the Consulting Agreement.

 

4.                                      Reservation
of Rights; No Effect on Obligations or Liens of Agent. Except to the extent
explicitly set forth herein and in the Transaction Documents, Agent expressly
reserves all of its rights, powers, privileges and remedies under the Credit
Agreement, 

 

3

 

the Southwest Guaranty, the MTR Guaranty, the
Southwest Pledge Agreement, the MTR Pledge Agreement and all other Loan
Documents and/or applicable law, including, without limitation, its right at
any time, as applicable, (i) to accelerate the Obligations, (ii) to
commence any legal or other action to collect any or all of the Obligations
from any or all of the Borrower and the other Loan Parties and/or any
Collateral or any property pledged by any other person or entity as security
for the Obligations (the “Other Collateral”), (iii) to foreclose or
otherwise realize on any or all of the Collateral or Other Collateral and/or as
appropriate (including to foreclose on the Pledged Collateral under the
Southwest Pledge Agreement and/or the MTR Pledge Agreement), set-off or apply
to the payment of any or all of the Obligations, any or all of the Collateral
or Other Collateral, (iv) to take any other enforcement action or
otherwise exercise any or all rights and remedies provided for by any or all of
the Credit Agreement, the Southwest Guaranty, the MTR Guaranty, the Southwest
Pledge Agreement, the MTR Pledge Agreement and all other Loan Documents and/or
applicable law, and (v) to reject any forbearance, financial restructuring
or other proposal, other than the transactions contemplated in this Agreement
and the Transaction Documents, made by or on behalf of the Borrower, any other
Loan Party or any creditor or equity holder. No oral representations or course
of dealing on the part of Agent, any Lender or any of its officers, employees
or agents, and no failure or delay by Agent or any Lender with respect to the
exercise of any right, power, privilege or remedy under any of the Credit
Agreement, the Southwest Guaranty, the MTR Guaranty, the Southwest Pledge
Agreement, the MTR Pledge Agreement or any of the other Loan Documents or
applicable law shall operate as a waiver thereof, and the single or partial
exercise of any such right, power, privilege or remedy shall not preclude any
later exercise of any other right, power, privilege or remedy. Nothing herein
or in the Settlement Agreement, the Purchase Agreement or the Consulting
Agreement shall have any effect on the validity or enforceability of the
Obligations or the liens and security interests of Agent securing the
Obligations.

 

5.                                      Severability.
If any provision of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal or unenforceable, such provision shall be severed and
enforced to the extent possible or modified in such a way as to make it
enforceable, and the invalidity, illegality or unenforceability thereof shall
not affect the validity, legality or enforceability of the remaining provisions
of this Agreement.

 

6.                                      Governing
Law. THIS AGREEMENT AND EACH OF THE OTHER TRANSACTION DOCUMENTS WHICH DOES
NOT EXPRESSLY SET FORTH APPLICABLE LAW SHALL BE GOVERNED BY AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK.

 

7.                                      Consent
to Jurisdiction. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY CONSENTS TO
THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN NEW YORK COUNTY,
STATE OF NEW YORK AND IRREVOCABLY AGREES THAT, SUBJECT TO AGENT’S ELECTION, 

 

4

 

ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS SHALL BE
LITIGATED IN SUCH COURTS. EACH OF THE PARTIES TO THIS AGREEMENT EXPRESSLY
SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY
DEFENSE OF FORUM NON CONVENIENS. EACH OF THE SOUTHWEST GUARANTORS HEREBY WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF
PROCESS  MAY BE MADE UPON THE
SOUTHWEST GUARANTORS BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED,
ADDRESSED TO THE SOUTHWEST GUARANTORS, AT THE ADDRESS SET FORTH IN THIS
AGREEMENT AND SERVICE  SO MADE
SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.

 

8.                                      Waiver
of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY WAIVES ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS. EACH OF THE
PARTIES TO THIS AGREEMENT ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE
WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS AND
THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS.
EACH OF THE PARTIES TO THIS AGREEMENT WARRANTS AND REPRESENTS THAT IT HAS HAD
THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

 

9.                                      Notices.
Any notice or other communication required shall be in writing addressed to the
respective party as set forth below and may be personally served, sent by
e-mail, telecopied, sent by overnight courier service or U.S. mail and shall be
deemed to have been given:  (a) if
delivered in person, when delivered; (b) if delivered by fax, on the date
of transmission if transmitted on a Business Day before 4:00 p.m. New York
time;  (c) if sent by e-mail,
by the sender’s receipt of an e-mail acknowledgment confirming delivery
thereof, (d) if delivered by overnight courier, one (1) Business Day
after delivery to the courier properly addressed; or (e) if delivered by
U.S. mail, four (4) Business Days after deposit with postage prepaid and
properly addressed

 

5

 

Notices shall be addressed as follows:

 

	
  If to the
  Southwest Guarantors:

  	
  Southwest
  Casino Corporation and Southwest

  
	
   

  	
  Casino and
  Hotel Corp

  
	
   

  	
  2001
  Killebrew Drive, Suite 350

  
	
   

  	
  Minneapolis,
  MN 55425

  
	
   

  	
  ATTN:
  President

  
	
   

  	
  Fax:
  952-853-9991

  
	
   

  	
   

  
	
  With a copy
  to:

  	
  Oppenheimer
  Wolff & Donnelly, LLP

  
	
   

  	
  Plaza VII,
  Suite 3200

  
	
   

  	
  35 South 7th
  Street

  
	
   

  	
  Minneapolis,
  MN 55402

  
	
   

  	
  ATTN: D.
  William Kaufman

  
	
   

  	
  Fax:
  612-607-7100

  
	
   

  	
   

  
	
  If to Agent:

  	
  Black
  Diamond Commercial Finance, L.L.C.

  
	
   

  	
  100 Field
  Drive

  
	
   

  	
  Lake Forest,
  IL  60045-2580

  
	
   

  	
  ATTN: Hugo
  H. Gravenhorst

  
	
   

  	
  Fax:
  847-615-9064

  
	
   

  	
   

  
	
  With a copy
  to:

  	
  Black
  Diamond Capital Management, L.L.C.

  
	
   

  	
  One Sound
  Shore Drive

  
	
   

  	
  Suite 200

  
	
   

  	
  Greenwich,
  Connecticut 06830

  
	
   

  	
  ATTN: Bob
  Rosenbloom

  
	
   

  	
  Fax:
  203-552-1014

  
	
   

  	
   

  
	
  And to:

  	
  Latham &
  Watkins LLP

  
	
   

  	
  233 South
  Wacker Drive

  
	
   

  	
  Suite 5800,
  Sears Tower

  
	
   

  	
  Chicago,
  Illinois 60606

  
	
   

  	
  ATTN: Jeff
  Moran

  
	
   

  	
  Fax:
  312-993-9767

  

 

10.                                References,
Pronouns And Headings. Except as otherwise specifically indicated, all
references to Section or Subsection numbers refer to Sections and
Subsections of this Agreement and all references to Exhibits refer to the
Exhibits attached hereto. The words “hereby,” “hereof,” “herein,” “hereto,” “hereunder,”
and words of similar import refer to this Agreement as a whole and not to any
particular Section or Subsection hereof. The word “hereafter” shall mean
after, and the term “heretofore” shall mean before, the date of this Agreement.
The word “or” means “and/or” and the words “include” and “including” shall not
be construed as terms of limitation. As used herein, all pronouns shall include
the masculine, feminine, neuter, singular and 

 

6

 

plural thereof wherever the context and facts
require such construction. The headings, titles and subtitles herein are
inserted for convenience of reference only and are to be ignored in any
construction of the provisions hereof.

 

11.                                Assignment.
This Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties hereto, and their respective heirs, personal
representatives, successors and permitted assigns. Notwithstanding the
foregoing, no party hereto may assign any of its rights or obligations under
this Agreement without the prior written consent of Agent, in the case of an
assignment by SCC or SCH, or of SCC and SCH, in the case of an assignment by
Agent, and any purported assignment without such consent shall be null and
void; provided, however, that (a) SCC, SCH and Agent may
make such an assignment without consent to (i) its affiliates or (ii) a
successor to all or a material portion of its assets or business, whether in a
merger, sale of stock, sale of assets or other transaction, the definitive
written agreement for which shall contain an express assumption by the
successor or assignee of the obligations of SCC, SCH or Agent, as the case may
be, hereunder and (b) Agent may make such assignment without consent to
any Lender under the Credit Agreement.

 

12.                                No
Waiver. Any extension or waiver of the obligations herein of either party
shall be valid only if set forth in an instrument in writing referring to this
section and signed by the party to be bound thereby. Any waiver of any term or
condition shall not be construed as a waiver of any subsequent breach or a
subsequent waiver of the same term or condition, or a waiver of any other term
or condition, of this Agreement. The failure of any party to assert any of its
rights hereunder shall not constitute a waiver of any of such rights.

 

13.                                No
Oral Modification. Neither this Agreement nor any of its terms or
provisions may be amended, modified, waived, discharged or terminated, except
by a written instrument signed by the parties hereto.

 

14.                                Expenses.
Except as otherwise specified in this Agreement, all costs and expenses,
including, without limitation, fees and disbursements of counsel, financial
advisors and accountants, incurred in connection with this Agreement shall be
paid by the party incurring such cost and expenses.

 

15.                                Entire
Agreement. This Agreement, including the other documents referred to herein
which form a part hereof (including the Transaction Documents), contains the
full agreement between the parties hereto on its subject matters, and
supersedes and renders null and void all prior agreements or understandings,
whether written or oral, which exist or may have existed between the parties
with respect to its subject matters.

 

16.                                Construction.
Each of the parties hereto acknowledges that it has had the benefit of legal
counsel of its own choice and has been afforded an opportunity to review this
Agreement and the other Transaction Documents and that this Agreement and the 

 

7

 

other Transaction Documents shall be
construed as if jointly drafted by the parties hereto and thereto.

 

17.                                Additional
Documents. The parties hereto will, without additional consideration,
execute and deliver such further instruments and take such other action as may
be reasonably requested by any other party hereto in order to carry out the
purposes of this Agreement and the other Transaction Documents.

 

18.                                No
Third Party Beneficiaries. Nothing in this Agreement, express or implied,
is intended to confer upon any person or entity other than the parties hereto
any rights or remedies of any nature whatsoever under or by reason of this
Agreement or any provision of this Agreement. This Agreement and all of its
provisions and conditions are for the sole and exclusive benefit of the parties
to this Agreement and their respective successors and permitted assigns.

 

19.                                Counterparts.
This Agreement may be executed in counterparts, each of which shall be an
original, and all of which, taken together, shall constitute one and the same
instrument. The parties agree that telecopied copies of signatures will be
sufficient, with original signature pages to be supplied and exchanged at
a later date.

 

Signature page follows.

 

8

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

 

 

	
   

  	
  SOUTHWEST CASINO CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Thomas E. Fox

  
	
   

  	
  Name:

  	
  Thomas E. Fox

  
	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SOUTHWEST CASINO AND HOTEL CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Thomas E. Fox

  
	
   

  	
  Name:

  	
  Thomas E. Fox

  
	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BLACK DIAMOND COMMERCIAL FINANCE,

  L.L.C., as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Hugo H. Gravenhorst

  
	
   

  	
  Name:

  	
  Hugo H. Gravenhorst

  
	
   

  	
  Its:

  	
  Managing Director

  
				

 

9Exhibit 10.3

 

SETTLEMENT AGREEMENT

 

This
Settlement Agreement (“Agreement”) is made and entered into as of October 19,
2008 by and among Southwest Casino Corporation, a Nevada corporation (“SCC”),
Southwest Casino and Hotel Corp., a Minnesota corporation (“SCH”) (SCC and SCH
are referred to herein each individually as a “Guarantor” and
collectively, as the “Southwest Guarantors”) and Black Diamond
Commercial Finance, L.L.C., a Delaware limited liability company, as Agent (“Agent”).  Unless otherwise specified herein,
capitalized terms used in this Agreement shall have the meanings ascribed to
them in the Credit Agreement (as hereinafter defined).

 

WITNESSETH:

 

WHEREAS,
SCC owns 100% of the capital stock of SCH;

 

WHEREAS,
SCH owns a 50% Membership Interest (as such term is defined in the Member
Control Agreement, as defined below) (the “Membership Interest”) in
North Metro Harness Initiative, LLC, a Minnesota limited liability company (the
“Borrower”), whose business and affairs are governed by that certain Member
Control Agreement of North Metro Harness Initiative, LLC, entered into and
effective as of June 8, 2004 (as has been and may hereafter be amended,
restated, supplemented or otherwise modified from time to time, the “Member
Control Agreement”);

 

WHEREAS,
SCH’s Membership Interest in the Company includes a 50% Percentage Interest (as
such term is defined in the Member Control Agreement) in the Borrower;

 

WHEREAS,
MTR-Harness, Inc., a Minnesota corporation (“MTR Harness”), is
owner of a 50% Membership Interest (as such term is defined in the Member
Control Agreement) in the Borrower;

 

WHEREAS,
pursuant to that certain Credit Agreement, dated as of April 20, 2007 (as
heretofore amended, amended and restated, supplemented or otherwise modified,
the “Credit Agreement”), by and among Borrower, North Metro Hotel, LLC,
a Minnesota limited liability company, as a guarantor and a Loan Party (“Hotel
LLC”), the financial institutions party thereto from time to time as
lenders (collectively, the “Lenders”), and Agent, Lenders have made
certain loans and financial accommodations to Borrower;

 

WHEREAS,
SCC, SCH and Agent are parties to that certain Limited Guaranty dated as of July 1,
2008 (the “Southwest Guaranty”), pursuant to which the Southwest
Guarantors unconditionally guaranteed the Obligations on a limited basis as set
forth therein, and SCH and Agent are parties to that certain Pledge Agreement,
dated as of April 20, 2007 (as amended, restated, supplemented or
otherwise modified from time to time, the “Southwest Pledge Agreement”),
pursuant to which SCH pledged to Agent, for the benefit of itself and the
benefit of Lenders, a first priority security interest in the Pledged
Collateral (as defined in the Southwest Pledge Agreement);

 

 

WHEREAS,
MTR Harness, MTR Gaming Group, Inc.,
a Delaware corporation (“MTR Gaming”) (MTR Harness and MTR Gaming
are referred to herein each individually as an “MTR Guarantor” and
collectively, as the “MTR Guarantors”) and Agent are parties to that
certain Limited Guaranty dated as of July 1, 2008 (the “MTR Guaranty”),
and MTR Harness and Agent are parties to that certain Pledge Agreement, dated
as of April 20, 2007 (as amended, restated, supplemented or otherwise
modified from time to time, the “MTR Pledge Agreement”);

 

WHEREAS,
certain Events of Default have occurred and are continuing under the Credit
Agreement as of the date hereof, including the Event of Default arising as a
result of the failure to comply with Section 6.16 of the Credit Agreement,
the Event of Default arising as a result of the failure to comply with Section 7.1
(b) of the Credit Agreement for the period ending June 30, 2008, the
anticipated Event of Default arising from the anticipated failure to comply
with Section 7.1 (b) of the Credit Agreement for the period ending September 30,
2008, and the Event of Default arising as a result of the failure to make an
interest payment to Agent due on October 17, 2008 (each such Event of
Default, an “Existing Default,” and, collectively, the “Existing
Defaults”), and as a result of the Existing Defaults, Agent and the Lenders
terminated their obligation to make further extensions of credit to or for the
benefit of Borrower on September 11, 2008 and are entitled to exercise any
and all default-related rights and remedies under the Credit Agreement, the
Southwest Guaranty, the MTR Guaranty, the Southwest Pledge Agreement, the MTR
Pledge Agreement and the other Loan Documents (which term, for purposes of this
Agreement, does not include the MTR Guaranty or the MTR Pledge Agreement)
and/or applicable law, including but not limited to foreclose on the Pledged
Collateral, as defined in and pursuant to the provisions of the Southwest
Pledge Agreement and the MTR Pledge Agreement, respectively; and

 

WHEREAS, as
a result of the Existing Defaults and the financial difficulties of the
Borrower, the parties hereto desire to enter into the documents and
transactions identified and described herein.

 

NOW
THEREFORE, in consideration of one dollar and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

 

1.                                       Concurrent
Transactions.  Concurrently herewith,
the parties hereto intend to execute and deliver the following agreements and
effect the following transactions, all of which, collectively, are intended to
constitute one transaction.  All documents or other deliveries
required to be made by the parties hereto at Closing (as defined below), and
all transactions required to be consummated concurrently with Closing, shall be
deemed to have been delivered and to have been consummated simultaneously with
all other transactions and all other deliveries, and no delivery shall be
deemed to have been made, and no transaction shall be deemed to have been
consummated, until all deliveries required by the parties hereto have been
made, and all concurrent or other transactions shall have been consummated.

 

(a)          Purchase Agreement.  On
the date hereof, Agent and SCH shall enter into that 

 

2

 

certain Limited Liability Company Interest Purchase Agreement dated of
the date hereof (the “Purchase Agreement”);

 

(b)         Limited
Covenant Not to Sue.  On the date
hereof, Agent and the Southwest Guarantors shall enter into that certain
Limited Covenant Not to Sue and Release of Limited Guaranty dated as of the
date hereof (the “Covenant Not to Sue”);

 

(c)          Consulting
Agreement.  On the date hereof, Agent
and SCH shall enter into that certain
Consulting Agreement dated as of the date hereof (the “Consulting
Agreement,” and, collectively with this Agreement, the Purchase Agreement
and the Covenant Not to Sue, the “Transaction Documents”);

 

(d)         Closing.  The transactions contemplated
by the Purchase Agreement, the Covenant Not to Sue and the Consulting Agreement
shall have closed and been consummated by no later than October 19, 2008
(the “Closing”); and

 

(e)          Delivery.  The obligation of Agent to
consummate the transactions contemplated by this Agreement is subject to the
delivery by each of the Southwest Guarantors of certified copies of resolutions
of the governing bodies of each of the Southwest Guarantors authorizing and
approving the transactions contemplated by this Agreement.

 

2.                                       Acknowledgements
of Southwest Guarantors; Existing Defaults; Outstanding Obligations.

 

(a)          Outstanding
Obligations.  Each of the Southwest
Guarantors acknowledges and agrees that the aggregate balance of the
outstanding Obligations under and as defined in the Credit Agreement as of October 17,
2008 was not less than $42,192,394.

 

The foregoing amount does not include any of the interest, fees, costs,
and expenses to which Agent and/or any Lender is entitled under the Credit
Agreement or other Loan Documents.  All
of the foregoing Obligations are outstanding, and each of the Southwest
Guarantors acknowledges and agrees that (i) they are jointly and severally
liable for the Obligations to the extent provided under the Southwest Guaranty,
and (ii) they have no right of offset, defense, or counterclaim with
respect to any of the Obligations.

 

Pursuant to the Credit Agreement and other Loan Documents, each of the
Southwest Guarantors acknowledges, ratifies, reaffirms, confirms and agrees
that the Agent and Lenders have, and shall continue to have, valid, enforceable
and perfected first priority Liens, subject to Permitted Encumbrances that are
entitled to priority under applicable law, upon all of the Collateral as
security for payment of the Obligations to the extent provided under the Credit
Agreement and other Loan Documents.

 

(b)         Existing
Defaults.  Each of the Southwest
Guarantors acknowledges and agrees 

 

3

 

that (i) each of the Existing Defaults has occurred and is
continuing as of the date hereof, (ii) none of the Existing Defaults has
been cured as of the date hereof, (iii) except for the Existing Defaults,
no other Defaults and/or Events of Default have occurred and are continuing as
of the date hereof and (iv) as a result of each of the Existing Defaults,
Agent and the Lenders have no obligation to make further extensions of credit
to or for the benefit of Borrower, and the Agent is entitled to exercise any
and all default-related rights and remedies under the Credit Agreement, the
other Loan Documents and/or applicable law, including, without limitation, its
right at any time, as applicable, (1) to accelerate the Obligations, (2) to
commence any legal or other action to collect any or all of the Obligations
from any or all of the Borrower and the other Loan Parties and/or any
Collateral or any property pledged by the Southwest Guarantors as security for
the Obligations (the “Other Collateral”), (3) to foreclose or
otherwise realize on any or all of the Collateral or Other Collateral and/or as
appropriate (including to foreclose on the Pledged Collateral under the
Southwest Pledge Agreement), set-off or apply to the payment of any or all of
the Obligations, any or all of the Collateral or Other Collateral, (4) to
take any other enforcement action or otherwise exercise any or all rights and
remedies provided for by any or all of the Credit Agreement, the Southwest
Guaranty, the Southwest Pledge Agreement and all other Loan Documents and/or
applicable law, and (5) to reject any forbearance, financial restructuring
or other proposal made by or on behalf of the Borrower, any other Loan Party or
any creditor or equity holder.

 

(c)          Directors
of Borrower.  The parties hereto
acknowledge, agree and consent to the following:  (i) immediately prior to the Closing,
Agent has rescinded its letter to SCH and MTR Harness dated October 16,
2008 regarding “Removal and Appointment of Directors” and (ii) immediately
prior to the Closing, SCH has removed the two Directors previously appointed by
SCH to the Board of Directors of the Borrower and has appointed in their place
Mark D. Thompson and Erwin A. Marks to the Board of Directors of the Borrower
in accordance with Article VII, Section 4.2 of the Member Control
Agreement.

 

3.                                       Reservation
of Rights; No Effect on Obligations or Liens of Agent.  Except to the extent explicitly set forth
herein and in the Transaction Documents, Agent expressly reserves all of its
rights, powers, privileges and remedies under the Credit Agreement, the
Southwest Guaranty, the MTR Guaranty, the Southwest Pledge Agreement, the MTR
Pledge Agreement and all other Loan Documents and/or applicable law, including,
without limitation, its right at any time, as applicable, (i) to
accelerate the Obligations, (ii) to commence any legal or other action to
collect any or all of the Obligations from any or all of the Borrower and the
other Loan Parties and/or any Collateral or Other Collateral, (iii) to
foreclose or otherwise realize on any or all of the Collateral or Other
Collateral and/or as appropriate (including to foreclose on the Pledged
Collateral under the Southwest Pledge Agreement and/or the MTR Pledge
Agreement), set-off or apply to the payment of any or all of the Obligations,
any or all of the Collateral or Other Collateral, (iv) to take any other
enforcement action or otherwise exercise any or all rights and remedies
provided for by any or all of the 

 

4

 

Credit Agreement, the Southwest Guaranty, the
MTR Guaranty, the Southwest Pledge Agreement, the MTR Pledge Agreement and all
other Loan Documents and/or applicable law, and (v) to reject any
forbearance, financial restructuring or other proposal, other than the
transactions contemplated in this Agreement and the Transaction Documents, made
by or on behalf of the Borrower, any other Loan Party or any creditor or equity
holder.  No oral representations or
course of dealing on the part of Agent, any Lender or any of its officers,
employees or agents, and no failure or delay by Agent or any Lender with
respect to the exercise of any right, power, privilege or remedy under any of
the Credit Agreement, the Southwest Guaranty, the MTR Guaranty, the Southwest
Pledge Agreement, the MTR Pledge Agreement or any of the other Loan Documents
or applicable law shall operate as a waiver thereof, and the single or partial
exercise of any such right, power, privilege or remedy shall not preclude any
later exercise of any other right, power, privilege or remedy.  Nothing herein or in the Covenant Not to Sue,
the Purchase Agreement or the Consulting Agreement shall have any effect on the
validity or enforceability of the Obligations or the Liens and security
interests of Agent securing the Obligations.

 

4.                                       Release.  In exchange for the agreements of Agent set
forth in the Covenant Not to Sue and the other Transaction Documents, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each of the Southwest Guarantors, on behalf of itself and
its affiliates, successors and assigns, fully
and forever remises, releases and discharges Agent, Lenders and each of their
subsidiaries and affiliates, and each and all of their directors, officers,
employees, attorneys, accountants, consultants, and other agents, of and from
all manner of actions, choses in action, causes of action, expenses, losses,
damages, judgments, executions, claims and demands, of whatsoever kind or
nature, of law or in equity, whether known or unknown, arising out of or
relating in any manner, to any cause or thing whatsoever, which any Southwest
Guarantor may have had, now has, or which any Southwest Guarantor hereafter
can, shall or may have, for or by reason of any manner, cause or thing
whatsoever, whenever arising, to and including the date of the Closing,
including, without limitation, any and all claims in any way relating to the
Credit Agreement, the other Loan Documents, the MTR Guaranty, or the MTR Pledge
Agreement.  Notwithstanding any of the
foregoing, if the Agent initiates against the Southwest Guarantors or any of
their respective successors, assigns, insurers, administrators, heirs, and
beneficiaries (the “Southwest Parties”), any proceeding of any nature
based on any claim seeking to enforce the Southwest Guaranty or otherwise
recover any amounts due thereunder from any of the Southwest Parties, then the
release set forth in this paragraph shall be null and void and of no further
force or effect.

 

5.                                       Representations
and Warranties of Southwest Guarantors. 
Each of the Southwest Guarantors represents and warrants to Agent as follows:

 

(a)          Status.  Each of the Southwest Guarantors is a duly
formed, validly existing corporation in good standing under the laws of the
state of its formation and has all 

 

5

 

requisite
power and authority to own its properties and assets and to carry on its
business as currently conducted.

 

(b)         Authority.  Each of the Southwest Guarantors has full
power, right and authority to execute and deliver this Agreement and the other
Transaction Documents, and, subject to the terms of the Member Control
Agreement, to perform its obligations hereunder and under the other Transaction
Documents and consummate the transactions contemplated hereby and thereby.  The Southwest Guarantors’ execution, delivery
and performance of this Agreement and the other Transaction Documents, and the
consummation by the Southwest Guarantors of the transactions contemplated
hereby have been duly authorized and approved by all necessary action on the
part of each of the Southwest Guarantors.

 

(c)          Enforceability.  This Agreement and each of the other
Transaction Documents has been duly and validly executed by each of the
Southwest Guarantors and, upon delivery thereof by the Southwest Guarantors,
will constitute a legally valid and binding obligation of the Southwest
Guarantors enforceable against the Southwest Guarantors in accordance with its
terms, except to the extent that such enforceability may be subject to, and
limited by, applicable bankruptcy, insolvency, reorganization, moratorium,
receivership and similar laws affecting the enforcement of creditors’ rights
generally, and general equitable principles.

 

(d)         No Conflict.  The execution, delivery and performance of
this Agreement and the other Transaction Documents, and the consummation by the
Southwest Guarantors of the transactions contemplated hereby and thereby, and
compliance with the terms and provisions hereof and thereof, do not and will
not:  (i) conflict with, violate,
result in the breach of, or constitute a default under any provision of the
Southwest Guarantors’ respective charter or by-laws; (ii) conflict with,
violate, result in the breach of, constitute a default under, give rise to any
right of acceleration, cancellation or termination of any right or obligation
of the Southwest Guarantors under, or require any consent, approval,
authorization or action or filing pursuant to, any agreement or other
instrument to which either of the Southwest Guarantors is a party or by which
either of the Southwest Guarantors or any of their properties or assets are
bound; or (iii) violate or require any consent, approval, authorization or
action or filing pursuant to, any Laws applicable to the Southwest Guarantors,
or any of their properties or assets, except laws and regulations of the State
of Minnesota applicable to the acquisition of an ownership interest in an
entity licensed to engage in pari-mutuel wagering.

 

6.                                       Representations
and Warranties of Agent.  The Agent
represents and warrants to the other parties hereto as follows:

 

(a)          Status.  The Agent is a duly formed, validly existing
limited liability company in good standing under the laws of Delaware and has
all requisite power and authority to 

 

6

 

own its
properties and assets and to carry on its business as currently conducted.

 

(b)         Authority.  The Agent has full power, right and authority
to execute and deliver this Agreement and the other Transaction Documents, to
perform its obligations hereunder and under the other Transaction Documents,
and to consummate the transactions contemplated hereby and thereby.  The Agent’s execution, delivery and
performance of this Agreement and the other Transaction Documents, and the
consummation by Agent of the transactions contemplated hereby have been duly
authorized and approved by all necessary action on the part of the Agent.

 

(c)          Enforceability.  This Agreement and each of the other
Transaction Documents has been duly and validly executed by the Agent and, upon
delivery thereof by the Agent, will constitute a legally valid and binding
obligation of the Agent enforceable against the Agent in accordance with its
terms, except to the extent that such enforceability may be subject to, and
limited by, applicable bankruptcy, insolvency, reorganization, moratorium,
receivership and similar laws affecting the enforcement of creditors’ rights
generally, and general equitable principles.

 

(d)         No Conflict.  The execution, delivery and performance of
this Agreement and the other Transaction Documents, and the consummation by the
Agent of the transactions contemplated hereby and thereby, and compliance with
the terms and provisions hereof and thereof, do not and will not:  (i) conflict with, violate, result in
the breach of, or constitute a default under any provision of the Agent’s
charter or by-laws; (ii) conflict with, violate, result in the breach of,
constitute a default under, give rise to any right of acceleration,
cancellation or termination of any right or obligation of the Agent under, or
require any consent, approval, authorization or action or filing pursuant to,
any agreement or other instrument to which the Agent is a party or by which the
Agent or any of its properties or assets are bound; or (iii) violate or
require any consent, approval, authorization or action or filing pursuant to,
any Laws applicable to the Agent, or any of its properties or assets, except
laws and regulations of the State of Minnesota applicable to the acquisition of
an ownership interest in an entity licensed to engage in pari-mutuel wagering.

 

7.                                       Enforceability;
Severability.  If any provision of
this Agreement or any of the other Transaction Documents is held by a court of
competent jurisdiction to be invalid, illegal or unenforceable, such provision
shall be severed and enforced to the extent possible or modified in such a way
as to make it enforceable, and the invalidity, illegality or unenforceability
thereof shall not affect the validity, legality or enforceability of the
remaining provisions of this Agreement and the other Transaction
Documents.  Notwithstanding the
foregoing, in the event that the sale contemplated by the Purchase Agreement is
held to be wholly or partially unenforceable or invalid in any circumstance,
then each of the Transaction Documents shall be invalid and unenforceable in
their entirety, and of no further force or effect.

 

7

 

8.                                       Governing
Law.  THIS AGREEMENT AND EACH OF THE
OTHER TRANSACTION DOCUMENTS WHICH DOES NOT EXPRESSLY SET FORTH APPLICABLE LAW
SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK.

 

9.                                       Consent
to Jurisdiction.  EACH OF THE PARTIES
TO THIS AGREEMENT HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL
COURT LOCATED WITHIN NEW YORK COUNTY, STATE OF NEW YORK AND IRREVOCABLY AGREES
THAT, SUBJECT TO AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS SHALL BE
LITIGATED IN SUCH COURTS.  EACH OF THE
PARTIES TO THIS AGREEMENT EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF
THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS.  EACH OF THE SOUTHWEST GUARANTORS HEREBY
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE
OF PROCESS  MAY BE MADE UPON
THE SOUTHWEST GUARANTORS BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, ADDRESSED TO THE SOUTHWEST GUARANTORS, AT THE ADDRESS SET FORTH IN
THIS AGREEMENT AND SERVICE  SO MADE
SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.

 

10.                                 Waiver
of Jury Trial.  EACH OF THE PARTIES
TO THIS AGREEMENT HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT AND THE
OTHER TRANSACTION DOCUMENTS.  EACH OF THE
PARTIES TO THIS AGREEMENT ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE
WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS AND
THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE
DEALINGS.  EACH OF THE PARTIES TO THIS
AGREEMENT WARRANTS AND REPRESENTS THAT IT HAS HAD THE OPPORTUNITY OF REVIEWING
THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS.

 

11.                                 Notices.  Any notice or other communication required
shall be in writing addressed to the respective party as set forth below and
may be personally served, sent by e-mail, telecopied, sent by overnight courier
service or U.S. mail and shall be deemed to have been given:  (a) if delivered in person, when
delivered; (b) if delivered by fax, on the date of transmission if
transmitted on a Business Day before 4:00 p.m. New York time;  (c) if sent by e-mail, by the sender’s
receipt of an e-mail acknowledgment confirming delivery thereof, (d) if
delivered by overnight courier, one (1) Business 

 

8

 

Day after delivery to the courier properly
addressed; or (e) if delivered by U.S. mail, four (4) Business Days
after deposit with postage prepaid and properly addressed

 

Notices shall be addressed as follows:

 

	
  If to the
  Southwest Guarantors:

  	
   

  	
  Southwest
  Casino Corporation and Southwest

  
	
   

  	
   

  	
  Casino and
  Hotel Corp

  
	
   

  	
   

  	
  2001
  Killebrew Drive, Suite 350

  
	
   

  	
   

  	
  Minneapolis,
  MN 55425

  
	
   

  	
   

  	
  ATTN:
  President

  
	
   

  	
   

  	
  Fax:
  952-853-9991

  
	
   

  	
   

  	
   

  
	
  With a copy
  to:

  	
   

  	
  Oppenheimer
  Wolff & Donnelly, LLP

  
	
   

  	
   

  	
  Plaza VII,
  Suite 3200

  
	
   

  	
   

  	
  35 South 7th
  Street

  
	
   

  	
   

  	
  Minneapolis,
  MN 55402

  
	
   

  	
   

  	
  Attn: D.
  William Kaufman

  
	
   

  	
   

  	
  Fax:
  612-607-7100

  
	
   

  	
   

  	
   

  
	
  If to Agent:

  	
   

  	
  Black
  Diamond Commercial Finance, L.L.C.

  
	
   

  	
   

  	
  100 Field
  Drive

  
	
   

  	
   

  	
  Lake Forest,
  IL  60045-2580

  
	
   

  	
   

  	
  ATTN: Hugo
  H. Gravenhorst

  
	
   

  	
   

  	
  Fax:
  847-615-9064

  
	
   

  	
   

  	
   

  
	
  With a copy
  to:

  	
   

  	
  Black
  Diamond Capital Management, L.L.C.

  
	
   

  	
   

  	
  One Sound
  Shore Drive

  
	
   

  	
   

  	
  Suite 200

  
	
   

  	
   

  	
  Greenwich,
  Connecticut 06830

  
	
   

  	
   

  	
  ATTN: Bob
  Rosenbloom

  
	
   

  	
   

  	
  Fax:
  203-552-1014

  
	
   

  	
   

  	
   

  
	
  And to:

  	
   

  	
  Latham &
  Watkins LLP

  
	
   

  	
   

  	
  233 South
  Wacker Drive

  
	
   

  	
   

  	
  Suite 5800,
  Sears Tower

  
	
   

  	
   

  	
  Chicago,
  Illinois 60606

  
	
   

  	
   

  	
  ATTN: Jeff
  Moran

  
	
   

  	
   

  	
  Fax: (312)
  993-9767

  

 

12.                                 References,
Pronouns And Headings.  Except as
otherwise specifically indicated, all references to Section or Subsection
numbers refer to Sections and Subsections of this Agreement and all references
to Exhibits refer to the Exhibits attached hereto.  The words “hereby,” “hereof,” “herein,” “hereto,”
“hereunder,” and words of similar 

 

9

 

import refer to this Agreement as a whole and
not to any particular Section or Subsection hereof.  The word “hereafter” shall mean after, and
the term “heretofore” shall mean before, the date of this Agreement.  The word “or” means “and/or” and the words “include”
and “including” shall not be construed as terms of limitation.  As used herein, all pronouns shall include
the masculine, feminine, neuter, singular and plural thereof wherever the
context and facts require such construction. 
The headings, titles and subtitles herein are inserted for convenience
of reference only and are to be ignored in any construction of the provisions
hereof.

 

13.                                 Assignment.  This Agreement shall be binding upon, inure
to the benefit of and be enforceable by the parties hereto, and their
respective heirs, personal representatives, successors and permitted
assigns.  Notwithstanding the foregoing,
no party hereto may assign any of its rights or obligations under this
Agreement without the prior written consent of Agent, in the case of an
assignment by SCC or SCH, or of SCC and SCH, in the case of an assignment by
Agent, and any purported assignment without such consent shall be null and
void; provided, however, that (a) SCC, SCH and Agent may
make such an assignment without consent to (i) its affiliates or (ii) a
successor to all or a material portion of its assets or business, whether in a
merger, sale of stock, sale of assets or other transaction, the definitive
written agreement for which shall contain an express assumption by the successor
or assignee of the obligations of SCC, SCH or Agent, as the case may be,
hereunder and (b) Agent may make such assignment without consent to any
Lender under the Credit Agreement.

 

14.                                 No
Waiver.  Any extension or waiver of
the obligations herein of either party shall be valid only if set forth in an
instrument in writing referring to this section and signed by the party to be
bound thereby.  Any waiver of any term or
condition shall not be construed as a waiver of any subsequent breach or a
subsequent waiver of the same term or condition, or a waiver of any other term
or condition, of this Agreement.  The
failure of any party to assert any of its rights hereunder shall not constitute
a waiver of any of such rights.

 

15.                                 No
Oral Modification.  Neither this
Agreement nor any of its terms or provisions may be amended, modified, waived,
discharged or terminated, except by a written instrument signed by the parties
hereto.

 

16.                                 Expenses.  Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement shall be paid by the party incurring such cost
and expenses.

 

17.                                 Entire
Agreement.  This Agreement, including
the other documents referred to herein which form a part hereof (including the
Transaction Documents), contains the full agreement between the parties hereto
on its subject matters, and supersedes and renders null and void all prior
agreements or understandings, whether written or oral, which exist or may have
existed between the parties with respect to its subject 

 

10

 

matters.

 

18.                                 Construction.  Each of the parties hereto acknowledges that
it has had the benefit of legal counsel of its own choice and has been afforded
an opportunity to review this Agreement and the other Transaction Documents and
that this Agreement and the other Transaction Documents shall be construed as
if jointly drafted by the parties hereto and thereto.

 

19.                                 Additional
Documents.  The parties hereto will,
without additional consideration, execute and deliver such further instruments
and take such other action as may be reasonably requested by any other party
hereto in order to carry out the purposes of this Agreement and the other
Transaction Documents.

 

20.                                 No
Third Party Beneficiaries.  Nothing
in this Agreement, express or implied, is intended to confer upon any person or
entity other than the parties hereto any rights or remedies of any nature
whatsoever under or by reason of this Agreement or any provision of this
Agreement.  This Agreement and all of its
provisions and conditions are for the sole and exclusive benefit of the parties
to this Agreement and their respective successors and permitted assigns.

 

21.                                 Counterparts.  This Agreement may be executed in
counterparts, each of which shall be an original, and all of which, taken
together, shall constitute one and the same instrument.  The parties agree that telecopied copies of
signatures will be sufficient, with original signature pages to be
supplied and exchanged at a later date.

 

Signature page follows.

 

11

 

IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first written above.

 

 

	
   

  	
  SOUTHWEST
  CASINO CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas E. Fox

  
	
   

  	
  Name: 

  	
  Thomas E.
  Fox

  
	
   

  	
  Its: 

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SOUTHWEST
  CASINO AND HOTEL CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas E. Fox

  
	
   

  	
  Name: 

  	
  Thomas E.
  Fox

  
	
   

  	
  Its: 

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BLACK DIAMOND COMMERCIAL FINANCE,

  L.L.C., as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas E. Fox

  
	
   

  	
  Name: 

  	
  Hugo H.
  Gravenhorst

  
	
   

  	
  Its: 

  	
  Managing
  Director

  
					

 

12

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