Document:

Exhibit 10.6

 

MEMBERSHIP INTEREST PLEDGE AGREEMENT

(50% North Metro Harness Initiative, LLC)

 

This PLEDGE AGREEMENT, dated as of October 20,
2005 (together with all amendments, if any, from time to time hereto, this “Agreement”)
between SOUTHWEST CASINO AND HOTEL CORP., a Minnesota corporation (the “Pledgor”)
and CROWN BANK, a Minnesota state banking corporation (“Lender”).

 

W  I  T  N  E
S  S  E  T  H:

 

WHEREAS, pursuant to that certain Revolving Credit and
Term Loan Agreement of even date herewith by and among Pledgor as Borrower, and
Lender (including all exhibits and schedules thereto, and as from time to time
amended, restated, supplemented or otherwise modified (the “Credit Agreement”)
the Lender has agreed to extend certain financial accommodations to the Pledgor;

 

WHEREAS, Pledgor is the record and beneficial owner of
the membership interests in the Pledged Entity (the “Membership Interests”) listed in Schedule I hereto;
and

 

WHEREAS, in order to induce Lender to extend the
financial accommodations provided for in the Credit Agreement, Pledgor has
agreed to pledge the Pledged Collateral to Lender in accordance herewith.

 

NOW, THEREFORE, in consideration of the premises and
the covenants hereinafter contained and to induce Lender to extend the
financial accommodations provided for in the Credit Agreement, it is agreed as
follows:

 

1.  Definitions.  Unless otherwise defined herein, terms
defined in the Credit Agreement are used herein as therein defined, and the
following shall have (unless otherwise provided elsewhere in this Agreement)
the following respective meanings (such meanings being equally applicable to
both the singular and plural form of the terms defined):

 

“Bankruptcy Code” means title 11, United States
Code, as amended from time to time, and any successor statute thereto.

 

“Member Control Agreement” means the Member
Control Agreement of North Metro Harness Initiative, LLC, a Minnesota limited
liability company, dated June 8, 2004.

 

“MTR” means MTR-Harness, Inc., a Minnesota
corporation.

 

“Pledged Collateral” has the meaning assigned
to such term in Section 2 hereof.

 

“Pledged Entity” means an issuer of Pledged Interests.

 

“Pledged Interests” means those Membership Interests listed on Schedule I
hereto.

 

 

“Right of First Refusal” means the right of first
refusal granted to MTR under the Member Control Agreement.

 

“Secured Obligations” has the meaning assigned
to such term in Section 3 hereof.

 

2.  Pledge.  Pledgor hereby pledges to Lender, a
first -priority security interest in all of the following (collectively,
the “Pledged Collateral”):

 

(a) 
the Pledged Interests and
the certificates, if any, representing the Pledged Interests, and all dividends, distributions, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Pledged Interests; and

 

(b) 
any additional Membership
Interests of a Pledged Entity from time to time acquired by Pledgor in
any manner (which Membership Interests
shall be deemed to be part of the Pledged
Interests), and the certificates representing such additional Membership Interests, and all
dividends, distributions, cash, instruments and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such Membership Interests.

 

3.  Security for Obligations.  This Agreement secures, and the Pledged
Collateral is security for, the prompt payment in full when due, whether at
stated maturity, by acceleration or otherwise, and performance of all
Obligations of any kind under or in connection with the Credit Agreement and
the other Loan Documents and all obligations of Pledgor now or hereafter
existing under this Agreement including, without limitation, all fees, costs
and expenses whether in connection with collection actions hereunder or
otherwise (collectively, the “Secured Obligations”).

 

4.  Delivery of Pledged Collateral.  All certificates, if any, evidencing the
Pledged Collateral shall be delivered to and held by Lender, pursuant
hereto.  All Pledged Interests shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to Lender.

 

5.  Representations and Warranties.  Pledgor represents and warrants to Lender
that:

 

(a) 
Pledgor is, and at the time of delivery of the Pledged Interests to Lender will be, the sole holder of record and
the sole beneficial owner of such Pledged Collateral pledged by Pledgor free
and clear of any lien or security interest thereon or affecting the title
thereto, except for the Right of First Refusal and the lien and security
interest created by this Agreement;

 

(b) 
All of the Pledged Interests
have been duly authorized and validly issued;

 

(c) 
Subject to the Right of First Refusal, Pledgor has the right and
requisite authority to pledge, assign, transfer, deliver, deposit and set over
the Pledged Collateral pledged by Pledgor to Lender as provided herein;

 

2

 

(d) 
None of the Pledged Interests
has been issued or transferred in violation of the securities registration,
securities disclosure or similar laws of any jurisdiction to which such
issuance or transfer may be subject;

 

(e) 
All of the Pledged Interests
are presently owned by Pledgor, and are presently represented by the
certificates, if any, listed on Schedule I hereto.  As of the date hereof, except for the Right
of First Refusal and the provisions of the Member Control Agreement, there are
no existing options, warrants, calls or commitments of any character whatsoever
relating to the Pledged Interests;

 

(f) 
Except for the MRC Statement and the MTR-Harness Consent, both of which
have been received, and the Right of First Refusal, no consent, approval,
authorization or other order or other action by, and no notice to or filing
with, any Governmental Authority or any other Person is required (i) for
the pledge by Pledgor of the Pledged Collateral pursuant to this Agreement or
for the execution, delivery or performance of this Agreement by Pledgor, or (ii) for
the exercise by Lender of any rights provided for in this Agreement or the
remedies in respect of the Pledged Collateral pursuant to this Agreement,
except as may be required in connection with such disposition by laws affecting
the offering and sale of securities generally;

 

(g) 
The pledge, assignment and delivery of the Pledged Collateral pursuant
to this Agreement will create, subject to the Right of First Refusal a valid
first priority lien on and a first priority perfected security interest in
favor of the Lender in such Pledged Collateral and the proceeds thereof,
securing the payment of the Secured Obligations, subject to no other lien;

 

(h) 
This Agreement has been duly authorized, executed and delivered by
Pledgor and constitutes a legal, valid and binding obligation of Pledgor
enforceable against Pledgor in accordance with its terms;

 

(i) 
The Pledgor hereby authorizes
the Lender to file all of the Lender’s financing statements and amendments to
financing statements, and all terminations of the filings of other secured
parties, all with respect to the Pledged Collateral, in such form and substance
as the Lender, in its sole discretion, may from time to time determine; and

 

(j) 
That the Pledgor hereby unconditionally consents to the pledge and
assignment of the Pledged Interests contemplated by this Agreement as required
by Section 1.1 of Article XIII of the North Metro Member Control
Agreement.

 

The representations and warranties set forth in this Section 5
shall survive the execution and delivery of this Agreement.

 

6.  Covenants.  Pledgor covenants and agrees that until the
Termination Date:

 

(a) 
Without the prior written consent of Lender, Pledgor will not sell,
assign, transfer, pledge, or otherwise encumber any of its rights in or to the
Pledged Collateral, or any unpaid dividends, interest or other distributions or
payments with respect to the Pledged Collateral or grant a lien in the Pledged
Collateral;

 

3

 

(b) 
Pledgor will, at its expense, promptly execute, acknowledge and deliver
all such instruments and take all such actions as Lender from time to time may
request in order to ensure to Lender the benefits of the lien in and to the
Pledged Collateral intended to be created by this Agreement, including the
filing of any necessary UCC financing statements, which may be filed by Lender
and will cooperate with Lender, at Pledgor’s expense, in obtaining all
necessary approvals and making all necessary filings under federal, state,
local or foreign law in connection with such liens or any sale or transfer of
the Pledged Collateral;

 

(c) 
Pledgor has and will defend the title to the Pledged Collateral and the
liens of Lender in the Pledged Collateral against the claim of any Person and
will maintain and preserve such liens;

 

(d) 
Pledgor will, upon obtaining ownership of any additional Membership Interests of a Pledged
Entity or Membership Interests
otherwise required to be pledged to Lender pursuant to any of the Loan
Documents which Membership Interests,
notes or instruments are not already Pledged Collateral, promptly (and in any
event within three (3) Business Days) deliver to Lender a Pledge
Amendment, duly executed by Pledgor, in substantially the form of Schedule II
hereto (a “Pledge Amendment”) in respect of any such additional Membership Interests, pursuant to
which Pledgor shall pledge to Lender all of such additional Membership Interests, notes and
instruments.  Pledgor hereby authorizes
Lender to attach each Pledge Amendment to this Agreement and agrees that all Pledged Interests and Pledged
Indebtedness listed on any Pledge Amendment delivered to Lender shall for all
purposes hereunder be considered Pledged Collateral; and

 

(e)  Other than “Tax Distributions” (as defined in
the Member Control Agreement) which may be retained by the Pledgor pursuant to Section 7(b) hereof,
all distributions in respect of the Pledged Interest, whenever paid or made,
shall be delivered to Lender to be applied to the Secured Obligations in such
manner of application as the Lender may deem appropriate, and shall, if
received by Pledgor, be received in trust for the benefit of Lender, be
segregated from the other property or funds of Pledgor, and be forthwith
delivered to Lender in the same form as so received (with any necessary
endorsement).  If the Pledgor fails to
make any endorsement required under this Agreement, the Lender, or any of its
officers or employees or agents on behalf of the Lender, is hereby irrevocably appointed
as the attorney in fact (which appointment is coupled with an interest) for the
Pledgor to make such endorsement in the Pledgor’s name.

 

7.  Pledgor’s Rights.  As long as no Default or Event of Default
shall have occurred and be continuing and until written notice shall be given
to Pledgor in accordance with Section 8(a) hereof:

 

(a)  Pledgor shall have the right, from time to
time, to vote and give consents with respect to the Pledged Collateral, or any
part thereof for all purposes not inconsistent with the provisions of this
Agreement, the Credit Agreement or any other Loan Document; provided, however,
that no vote shall be cast, and no consent shall be

 

4

 

given or action taken, which would have the effect of impairing the
position or interest of Lender in respect of the Pledged Collateral; and
Pledgor shall be entitled, from time to time, to collect and receive for its
own use all Tax Distributions.

 

8.  Defaults and Remedies; Proxy.

 

(a) 
Upon the occurrence of an Event of Default and during the continuation
of such Event of Default, and concurrently with written notice to Pledgor,
Lender (personally or through an agent) is hereby authorized and empowered
subject to the provisions of the Member Control Agreement, to transfer and
register in its name or in the name of its nominee the whole or any part of the
Pledged Collateral, to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of smaller or
larger denominations to collect and receive all cash dividends, interest and
other distributions made thereon (including, without limitation, all Tax
Distributions) to sell in one or more sales after ten (10) days’ notice of
the time and place of any public sale (which notice of sale shall include a
description of the Right of First Refusal) or of the time at which a private
sale is to take place (which notice Pledgor agrees is commercially reasonable)
the whole or any part of the Pledged Collateral and to otherwise act with
respect to the Pledged Collateral as though Lender was the outright owner
thereof.  Any sale shall be made at a
public or private sale at Lender’s place of business, or at any place to be
named in the notice of sale, either for cash or upon credit or for future
delivery at such price as Lender may deem fair, and Lender may be the purchaser
of the whole or any part of the Pledged Collateral so sold and hold the same
thereafter in its own right free from any claim of Pledgor or any right of
redemption.  Each sale shall be made to
the highest bidder, but Lender reserves the right to reject any and all bids at
such sale which, in its discretion, it shall deem inadequate.  Demands of performance, except as otherwise
herein specifically provided for, notices of sale, advertisements and the
presence of property at sale are hereby waived and any sale hereunder may be
conducted by an auctioneer or any officer or agent of Lender.  PLEDGOR HEREBY IRREVOCABLY CONSTITUTES AND
APPOINTS MTR AS THE PROXY AND ATTORNEY-IN-FACT OF PLEDGOR WITH RESPECT TO THE
PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE THE PLEDGED INTERESTS, WITH FULL POWER OF SUBSTITUTION TO DO SO.  THE APPOINTMENT OF MTR AS PROXY AND
ATTORNEY-IN-FACT IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE
TERMINATION DATE.  IN ADDITION TO THE
RIGHT TO VOTE THE PLEDGED INTERESTS,
THE APPOINTMENT OF MTR AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO
EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF
THE PLEDGED INTERESTS WOULD BE
ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF MEMBERS, CALLING
SPECIAL MEETINGS OF MEMBERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE
EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY
TRANSFER OF ANY PLEDGED INTERESTS
ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER
OF THE PLEDGED INTERESTS OR ANY
OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE OF AN EVENT OF DEFAULT.

 

5

 

NOTWITHSTANDING THE FOREGOING, MTR SHALL NOT HAVE ANY DUTY TO
EXERCISE ANY SUCH RIGHT OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY
FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO.

 

(b) 
If, at the original time or times appointed for the sale of the whole or
any part of the Pledged Collateral, the highest bid, if there be but one sale,
shall be inadequate to discharge in full all the Secured Obligations, or if the
Pledged Collateral be offered for sale in lots, if at any of such sales, the
highest bid for the lot offered for sale would indicate to Lender, in its
discretion, that the proceeds of the sales of the whole of the Pledged
Collateral would be unlikely to be sufficient to discharge all the Secured
Obligations, Lender may, on one or more occasions and in its discretion,
postpone any of said sales by public announcement (which public announcement
sale shall include a description of the Right of First Refusal) at the time of
sale or the time of previous postponement of sale, and no other notice of such
postponement or postponements of sale need be given, any other notice being
hereby waived; provided, however, that any sale or sales made after such
postponement shall be after ten (10) days’ notice to Pledgor.

 

(c) 
Pledgor recognizes that Lender may be unable to effect a public sale of
any or all the Pledged Collateral and may be compelled to resort to one or more
private sales thereof in accordance with applicable law and the terms of the
Loan Documents.  Pledgor also
acknowledges that any such private sale may result in prices and other terms
less favorable to the seller than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall not
be deemed to have been made in a commercially unreasonable manner solely by
virtue of such sale being private. 
Lender shall be under no obligation to delay a sale of any of the
Pledged Collateral for the period of time necessary to permit the Pledged
Entity to register such securities for public sale under the Securities Act of
1933, as amended (or any similar statute then in effect), or under applicable
state securities laws, even if Pledgor and the Pledged Entity would agree to do
so.

 

(d) 
Pledgor agrees to the maximum extent permitted by applicable law that
following the occurrence and during the continuance of an Event of Default it
will not at any time plead, claim or take the benefit of any appraisal,
valuation, stay, extension, moratorium or redemption law now or hereafter in
force in order to prevent or delay the enforcement of this Agreement, or the
absolute sale of the whole or any part of the Pledged Collateral or the
possession thereof by any purchaser at any sale hereunder, and Pledgor waives
the benefit of all such laws to the extent it lawfully may do so.  Pledgor agrees that it will not interfere
with any right, power and remedy of Lender provided for in this Agreement or
now or hereafter existing at law or in equity or by statute or otherwise, or
the exercise or beginning of the exercise by Lender of any one or more of such
rights, powers or remedies.  No failure
or delay on the part of Lender to exercise any such right, power or remedy and
no notice or demand which may be given to or made upon Pledgor by Lender with
respect to any such remedies shall operate as a waiver thereof, or limit or
impair Lender’s right to take any action or to exercise any power or remedy
hereunder, without notice or demand, or prejudice its rights as against Pledgor
in any respect.

 

6

 

(e) 
Pledgor further agrees that a breach of any of the covenants contained
in this Section 8 will cause irreparable injury to Lender, that Lender
shall have no adequate remedy at law in respect of such breach and, as a
consequence, agrees that each and every covenant contained in this Section 8
shall be specifically enforceable against Pledgor, and Pledgor hereby waives
and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that the Secured Obligations
are not then due and payable in accordance with the agreements and instruments
governing and evidencing such obligations.

 

9.  Waiver.  No delay on Lender’s part in exercising any
power of sale, lien, option or other right hereunder, and no notice or demand
which may be given to or made upon Pledgor by Lender with respect to any power
of sale, lien, option or other right hereunder, shall constitute a waiver
thereof, or limit or impair Lender’s right to take any action or to exercise
any power of sale, lien, option, or any other right hereunder, without notice
or demand, or prejudice Lender’s rights as against Pledgor in any respect.

 

10.  Assignment.  Subject to the provisions of the Member
Control Agreement, Lender may assign, endorse or transfer any instrument
evidencing all or any part of the Secured Obligations as provided in, and in
accordance with, the Credit Agreement, and the holder of such instrument shall
be entitled to the benefits of this Agreement.

 

11.  Termination.  Immediately following the Termination Date,
Lender shall deliver to Pledgor the Pledged Collateral pledged by Pledgor at
the time subject to this Agreement, and all instruments of assignment executed
in connection therewith, free and clear of the liens hereof and, except as
otherwise provided herein, all of Pledgor’s obligations hereunder shall at such
time terminate.

 

12.  Lien Absolute.  All rights of Lender hereunder, and all
obligations of Pledgor hereunder, shall be absolute and unconditional
irrespective of:

 

(a) 
any lack of validity or enforceability of the Credit Agreement, any
other Loan Document or any other agreement or instrument governing or
evidencing any Secured Obligations;

 

(b) 
any change in the time, manner or place of payment of, or in any other
term of, all or any part of the Secured Obligations, or any other amendment or
waiver of or any consent to any departure from the Credit Agreement, any other
Loan Document or any other agreement or instrument governing or evidencing any
Secured Obligations;

 

(c) 
any exchange, release or non-perfection of any other Collateral, or any
release or amendment or waiver of or consent to departure from any guaranty,
for all or any of the Secured Obligations;

 

(d) 
the insolvency of the Borrower or any Guarantor; or

 

(e) 
any other circumstance which might otherwise constitute a defense
available to, or a discharge of, Pledgor.

 

7

 

13.  Release.  Pledgor consents and agrees that Lender may
at any time, or from time to time, in its discretion:

 

(a) 
renew, extend or change the time of payment, and/or the manner, place or
terms of payment of all or any part of the Secured Obligations; and

 

(b) 
exchange, release and/or surrender all or any of the Collateral
(including the Pledged Collateral), or any part thereof, by whomsoever
deposited, which is now or may hereafter be held by Lender in connection with
all or any of the Secured Obligations; all in such manner and upon such terms as
Lender may deem proper, and without notice to or further assent from Pledgor,
it being hereby agreed that Pledgor shall be and remain bound upon this
Agreement, irrespective of the value or condition of any of the Collateral, and
notwithstanding any such change, exchange, settlement, compromise, surrender,
release, renewal or extension, and notwithstanding also that the Secured
Obligations may, at any time, exceed the aggregate principal amount thereof set
forth in the Credit Agreement, or any other agreement governing any Secured
Obligations.  Pledgor hereby waives
notice of acceptance of this Agreement, and also presentment, demand, protest
and notice of dishonor of any and all of the Secured Obligations, and promptness
in commencing suit against any party hereto or liable hereon, and in giving any
notice to or of making any claim or demand hereunder upon Pledgor.  No act or omission of any kind on Lender’s
part shall in any event affect or impair this Agreement.

 

14.  Reinstatement.  This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
Pledgor or any Pledged Entity for liquidation or reorganization, should Pledgor
or any Pledged Entity become insolvent or make an assignment for the benefit of
creditors or should a receiver or trustee be appointed for all or any
significant part of Pledgor’s or a Pledged Entity’s assets, and shall continue
to be effective or be reinstated, as the case may be, if at any time payment
and performance of the Secured Obligations, or any part thereof, is, pursuant
to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Secured Obligations, whether as a “voidable
preference”, “fraudulent conveyance”, or otherwise, all as though such payment
or performance had not been made.  In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Secured Obligations shall be reinstated and deemed reduced only
by such amount paid and not so rescinded, reduced, restored or returned.

 

15.  Miscellaneous.

 

(a) 
Lender may execute any of its duties hereunder by or through agents or
employees and shall be entitled to advice of counsel concerning all matters
pertaining to its duties hereunder.

 

(b) 
Pledgor agrees to promptly reimburse Lender for actual out-of-pocket
expenses, including, without limitation, reasonable counsel fees, incurred by
Lender in connection with the administration and enforcement of this Agreement.

 

8

 

(c) 
Neither Lender, nor any of its respective officers, directors,
employees, agents or counsel shall be liable for any action lawfully taken or
omitted to be taken by it or them hereunder or in connection herewith, except
for its or their own gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.

 

(d) 
THIS AGREEMENT SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF PLEDGOR
AND ITS SUCCESSORS AND ASSIGNS (INCLUDING A DEBTOR IN POSSESSION ON BEHALF OF
PLEDGOR), AND SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF, AND BE
ENFORCEABLE BY, LENDER AND ITS SUCCESSORS AND ASSIGNS, AND SHALL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MINNESOTA
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE.

 

16.  Severability.  If for any reason any provision or provisions
hereof are determined to be invalid and contrary to any existing or future law,
such invalidity shall not impair the operation of or effect those portions of
this Agreement which are valid.

 

17.  Notices.  Except as otherwise provided herein, whenever
it is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other party, or whenever any of the parties desires to
give and serve upon any other party any communication with respect to this
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and shall be given in the manner, and
deemed received, as provided for in the Credit Agreement.  Lender shall deliver to MTR in care of Robert
L. Ruben, Esquire at Ruben & Aronson, LLP, 4800 Montgomery Lane, Suite 150,
Bethesda, Maryland, 20814, copies of any notices sent to Pledgor.

 

18.  Section Titles.  The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.

 

19.  Counterparts.  This Agreement may be executed in any number
of counterparts, which shall, collectively and separately, constitute one
agreement.

 

20.  Benefit of Lender.  All security interests granted or
contemplated hereby shall be for the benefit of the Lender, and all proceeds or
payments realized from the Pledged Collateral in accordance herewith shall be
applied to the Obligations in accordance with the terms of the Credit
Agreement.

 

21.  Amendment.  If a Pledged Entity issues any Membership Interests to Pledgor after
the date hereof, this Agreement may be amended by the execution of a Pledge
Amendment in the form of Schedule II hereto, without the consent or
approval of Pledgor.  All other
amendments, modifications and waivers with respect to this Agreement shall be
effective only if they are in writing and executed by Lender and the Pledgor
with an interest of the Pledged Collateral.

 

9

 

22.  Member Control Agreement.  All of the Lender’s rights hereunder are
subject to the provisions of the Member Control Agreement, including, without
limitation, any provision thereof which requires the prior consent of MTR,
which consent may be granted or withheld in MTR’s sole and absolute discretion.

 

23.  No Banking Obligation.  The Pledged Entity does not have any
obligation under or in connection with this Agreement, the Credit Agreement or
any agreement or document entered into in connection with the Credit Agreement
to maintain its accounts or establish any banking relationship with Lender.

 

[Signature
Page Follows]

 

10

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the date first written above.

 

 

	
   

  	
  SOUTHWEST
  CASINO AND HOTEL CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Thomas
  E. Fox

  
	
   

  	
   

  	
  Its:

  	
   President

  
	
   

  	
   

  	
   

  
	
   

  	
  CROWN
  BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Mark W. Lucke

  
	
   

  	
   

  	
  Mark W. Lucke

  
	
   

  	
   

  	
  Its: Vice
  President

  

 

 

[Signature Page to Pledge
Agreement]

 

 

SCHEDULE I

 

PLEDGED INTERESTS

 

	
  Name and Address of Pledgor

  	
   

  	
  Pledged Entity

  	
   

  	
  Percentage Interest

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Southwest Casino
  and Hotel Corp.

  	
   

  	
  North Metro Harness Initiative, LLC

  	
   

  	
  50

  	
  %

  
	
  2001 Killebrew
  Drive, Suite 350

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minneapolis, MN
  55425

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

I-1Exhibit 10.7

 

MEMBERSHIP
INTEREST PLEDGE AGREEMENT

(Gold Rush I, LLC, Southwest Casino Deadwood, LLC and SW Missouri, LLC)

 

This
PLEDGE AGREEMENT, dated as of October 20, 2005 (together with all amendments,
if any, from time to time hereto, this “Agreement”) between SOUTHWEST CASINO
AND HOTEL CORP., a Minnesota corporation (the “Pledgor”) and CROWN BANK, a
Minnesota state banking corporation (“Lender”).

 

W
I  T  N  E  S  S  E  T  H:

 

WHEREAS,
pursuant to that certain Revolving Credit and Term Loan Agreement of even date
herewith by and among Pledgor as Borrower, and Lender (including all exhibits
and schedules thereto, and as from time to time amended, restated, supplemented
or otherwise modified (the “Credit Agreement”) the Lender has agreed to extend
certain financial accommodations to the Pledgor;

 

WHEREAS,
Pledgor is the record and beneficial owner of the membership interests in each
Pledged Entity (the “Membership
Interests”) listed in Schedule I hereto; and

 

WHEREAS,
in order to induce Lender to extend the financial accommodations provided for
in the Credit Agreement, Pledgor has agreed to pledge the Pledged Collateral to
Lender in accordance herewith.

 

NOW,
THEREFORE, in consideration of the premises and the covenants hereinafter
contained and to induce Lender to extend the financial accommodations provided
for in the Credit Agreement, it is agreed as follows:

 

1.     Definitions.  Unless
otherwise defined herein, terms defined in the Credit Agreement are used herein
as therein defined, and the following shall have (unless otherwise provided
elsewhere in this Agreement) the following respective meanings (such meanings
being equally applicable to both the singular and plural form of the terms
defined):

 

“Bankruptcy
Code” means title 11, United States Code, as amended from time to time, and
any successor statute thereto.

 

“Pledged
Collateral” has the meaning assigned to such term in Section 2 hereof.

 

“Pledged
Entity” means an issuer of Pledged
Interests.

 

“Pledged
Interests” means those Membership
Interests listed on Schedule I hereto.

 

“Secured
Obligations” has the meaning assigned to such term in Section 3 hereof.

 

2.     Pledge.  Pledgor
hereby pledges to Lender, a first -priority security interest in all of
the following (collectively, the “Pledged Collateral”):

 

 

(a)   the Pledged Interests and the certificates, if any, representing the Pledged Interests, and all dividends,
distributions, cash, instruments and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of the Pledged Interests;
and

 

(b)   any additional Membership Interests of a Pledged
Entity from time to time acquired by Pledgor in any manner (which Membership Interests shall be deemed
to be part of the Pledged Interests),
and the certificates representing such additional Membership Interests, and all dividends, distributions, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such Membership Interest.

 

3.     Security for Obligations. 
This Agreement secures, and the Pledged Collateral is security for, the
prompt payment in full when due, whether at stated maturity, by acceleration or
otherwise, and performance of all Obligations of any kind under or in
connection with the Credit Agreement and the other Loan Documents and all
obligations of Pledgor now or hereafter existing under this Agreement
including, without limitation, all fees, costs and expenses whether in
connection with collection actions hereunder or otherwise (collectively, the “Secured
Obligations”).

 

4.     Delivery of Pledged Collateral. 
All certificates, if any, evidencing the Pledged Collateral shall be
delivered to and held by Lender, pursuant hereto.  All Pledged
Interests shall be accompanied by duly executed instruments of transfer
or assignment in blank, all in form and substance satisfactory to Lender.

 

5.     Representations and Warranties. 
Pledgor represents and warrants to Lender that:

 

(a)   Pledgor is, and at the time of
delivery of the Pledged Interests
to Lender will be, the sole holder of record and the sole beneficial owner of
such Pledged Collateral pledged by Pledgor free and clear of any lien or
security interest thereon or affecting the title thereto, except for the lien
and security interest created by this Agreement;

 

(b)   All of the Pledged Interests have been duly authorized and validly issued;

 

(c)   Pledgor has the right and requisite
authority to pledge, assign, transfer, deliver, deposit and set over the
Pledged Collateral pledged by Pledgor to Lender as provided herein;

 

(d)   None of the Pledged Interests has been issued or transferred in violation of
the securities registration, securities disclosure or similar laws of any
jurisdiction to which such issuance or transfer may be subject;

 

(e)   All of the Pledged Interests are presently owned by Pledgor, and are
presently represented by the certificates listed on Schedule I
hereto.  As of the date

 

2

 

hereof,
there are no existing options, warrants, calls or commitments of any character
whatsoever relating to the Pledged
Interests;

 

(f)    No consent, approval, authorization
or other order or other action by, and no notice to or filing with, any
Governmental Authority or any other Person is required (i) for the pledge by
Pledgor of the Pledged Collateral pursuant to this Agreement or for the
execution, delivery or performance of this Agreement by Pledgor, or (ii) for
the exercise by Lender of any rights provided for in this Agreement or the
remedies in respect of the Pledged Collateral pursuant to this Agreement,
except as may be required in connection with such disposition by laws affecting
the offering and sale of securities generally;

 

(g)   The pledge, assignment and delivery
of the Pledged Collateral pursuant to this Agreement will create a valid first
priority lien on and a first priority perfected security interest in favor of
the Lender in such Pledged Collateral and the proceeds thereof, securing the
payment of the Secured Obligations, subject to no other lien;

 

(h)   This Agreement has been duly
authorized, executed and delivered by Pledgor and constitutes a legal, valid
and binding obligation of Pledgor enforceable against Pledgor in accordance
with its terms; and

 

(i)    The Pledgor hereby authorizes the Lender to file all of the Lender’s
financing statements and amendments to financing statements, and all
terminations of the filings of other secured parties, all with respect to the
Pledged Collateral, in such form and substance as the Lender, in its sole
discretion, may from time to time determine.

 

The
representations and warranties set forth in this Section 5 shall survive the
execution and delivery of this Agreement.

 

6.     Covenants.  Pledgor
covenants and agrees that until the Termination Date:

 

(a)   Without the prior written consent of
Lender, Pledgor will not sell, assign, transfer, pledge, or otherwise encumber
any of its rights in or to the Pledged Collateral, or any unpaid dividends,
interest or other distributions or payments with respect to the Pledged
Collateral or grant a lien in the Pledged Collateral;

 

(b)   Pledgor will, at its expense,
promptly execute, acknowledge and deliver all such instruments and take all
such actions as Lender from time to time may request in order to ensure to
Lender the benefits of the lien in and to the Pledged Collateral intended to be
created by this Agreement, including the filing of any necessary UCC financing
statements, which may be filed by Lender and will cooperate with Lender, at
Pledgor’s expense, in obtaining all necessary approvals and making all
necessary filings under federal, state, local or foreign law in connection with
such liens or any sale or transfer of the Pledged Collateral;

 

3

 

(c)   Pledgor has and will defend the
title to the Pledged Collateral and the liens of Lender in the Pledged
Collateral against the claim of any Person and will maintain and preserve such
liens;

 

(d)   Pledgor will, upon obtaining ownership
of any additional Membership Interests
of a Pledged Entity or Membership
Interests otherwise required to be pledged to Lender pursuant to any of
the Loan Documents which Membership
Interests, notes or instruments are not already Pledged Collateral, promptly
(and in any event within three (3) Business Days) deliver to Lender a Pledge
Amendment, duly executed by Pledgor, in substantially the form of Schedule
II hereto (a “Pledge Amendment”) in respect of any such additional Membership Interests, pursuant to
which Pledgor shall pledge to Lender all of such additional Membership Interests, notes and
instruments.  Pledgor hereby authorizes
Lender to attach each Pledge Amendment to this Agreement and agrees that all Pledged Interests and Pledged
Indebtedness listed on any Pledge Amendment delivered to Lender shall for all
purposes hereunder be considered Pledged Collateral; and

 

7.     Pledgor’s Rights.  As long as no
Default or Event of Default shall have occurred and be continuing and until
written notice shall be given to Pledgor in accordance with Section 8(a)
hereof.

 

(a)           Pledgor shall have the right, from
time to time, to vote and give consents with respect to the Pledged Collateral,
or any part thereof for all purposes not inconsistent with the provisions of this
Agreement, the Credit Agreement or any other Loan Document; provided, however,
that no vote shall be cast, and no consent shall be given or action taken,
which would have the effect of impairing the position or interest of Lender in
respect of the Pledged Collateral or which would authorize, effect or consent
to (unless and to the extent expressly permitted by the Credit Agreement):

 

(i)            the dissolution or liquidation, in
whole or in part, of a Pledged Entity;

 

(ii)           the consolidation or merger of a Pledged
Entity with any other Person;

 

(iii)          the sale, disposition or encumbrance
of all or substantially all of the assets of a Pledged Entity, except for liens
in favor of Lender;

 

(iv)          any change in the authorized number
of membership or economic interests in a Pledged Entity or the issuance of any
additional Membership Interests unless such issuance is conditioned upon the
recipient thereof pledging such Membership Interests to Lender in accordance
herewith; or

 

(v)           the alteration of the voting rights
with respect to the Membership Interests of a Pledged Entity; and

 

4

 

(b)           Pledgor
shall be entitled, from time to time, to collect and receive for its own use
all cash dividends, interest and the distributions in respect of the Pledged
Collateral.

 

8.     Defaults and Remedies; Proxy.

 

(a)   Upon the occurrence of an Event of
Default and during the continuation of such Event of Default, and concurrently
with written notice to Pledgor, Lender (personally or through an agent) is
hereby authorized and empowered to transfer and register in its name or in the
name of its nominee the whole or any part of the Pledged Collateral, to
exchange certificates or instruments representing or evidencing Pledged
Collateral for certificates or instruments of smaller or larger denominations,
to collect and receive all cash dividends, interest and other distributions
made thereon to sell in one or more sales after ten (10) days’ notice of the
time and place of any public sale or of the time at which a private sale is to
take place (which notice Pledgor agrees is commercially reasonable) the whole
or any part of the Pledged Collateral and to otherwise act with respect to the
Pledged Collateral as though Lender was the outright owner thereof.  Any sale shall be made at a public or private
sale at Lender’s place of business, or at any place to be named in the notice
of sale, either for cash or upon credit or for future delivery at such price as
Lender may deem fair, and Lender may be the purchaser of the whole or any part
of the Pledged Collateral so sold and hold the same thereafter in its own right
free from any claim of Pledgor or any right of redemption.  Each sale shall be made to the highest
bidder, but Lender reserves the right to reject any and all bids at such sale
which, in its discretion, it shall deem inadequate.  Demands of performance, except as otherwise
herein specifically provided for, notices of sale, advertisements and the
presence of property at sale are hereby waived and any sale hereunder may be
conducted by an auctioneer or any officer or agent of Lender.  PLEDGOR HEREBY IRREVOCABLY CONSTITUTES AND
APPOINTS LENDER AS THE PROXY AND ATTORNEY-IN-FACT OF PLEDGOR WITH RESPECT TO
THE PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE THE PLEDGED INTERESTS, WITH FULL POWER OF SUBSTITUTION TO DO SO.  THE APPOINTMENT OF LENDER AS PROXY AND
ATTORNEY-IN-FACT IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE
TERMINATION DATE.  IN ADDITION TO THE
RIGHT TO VOTE THE PLEDGED INTERESTS,
THE APPOINTMENT OF LENDER AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT
TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER
OF THE PLEDGED INTERESTS WOULD
BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF MEMBERS,
CALLING SPECIAL MEETINGS OF MEMBERS AND VOTING AT SUCH MEETINGS). SUCH PROXY
SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION
(INCLUDING ANY TRANSFER OF ANY PLEDGED
INTERESTS ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON
(INCLUDING THE ISSUER OF THE PLEDGED
INTERESTS OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE OF AN
EVENT OF DEFAULT.  NOTWITHSTANDING THE
FOREGOING, LENDER SHALL NOT HAVE ANY DUTY TO EXERCISE ANY SUCH RIGHT OR TO
PRESERVE THE SAME

 

5

 

AND
SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO.

 

(b)   If, at the original time or times
appointed for the sale of the whole or any part of the Pledged Collateral, the
highest bid, if there be but one sale, shall be inadequate to discharge in full
all the Secured Obligations, or if the Pledged Collateral be offered for sale
in lots, if at any of such sales, the highest bid for the lot offered for sale
would indicate to Lender, in its discretion, that the proceeds of the sales of
the whole of the Pledged Collateral would be unlikely to be sufficient to
discharge all the Secured Obligations, Lender may, on one or more occasions and
in its discretion, postpone any of said sales by public announcement at the
time of sale or the time of previous postponement of sale, and no other notice
of such postponement or postponements of sale need be given, any other notice
being hereby waived; provided, however, that any sale or sales made after such
postponement shall be after ten (10) days’ notice to Pledgor.

 

(c)   Pledgor recognizes that Lender may
be unable to effect a public sale of any or all the Pledged Collateral and may
be compelled to resort to one or more private sales thereof in accordance with
applicable law and the terms of the Loan Documents.  Pledgor also acknowledges that any such
private sale may result in prices and other terms less favorable to the seller
than if such sale were a public sale and, notwithstanding such circumstances,
agrees that any such private sale shall not be deemed to have been made in a
commercially unreasonable manner solely by virtue of such sale being
private.  Lender shall be under no
obligation to delay a sale of any of the Pledged Collateral for the period of
time necessary to permit the Pledged Entity to register such securities for
public sale under the Securities Act of 1933, as amended (or any similar
statute then in effect), or under applicable state securities laws, even if
Pledgor and the Pledged Entity would agree to do so.

 

(d)   Pledgor agrees to the maximum extent
permitted by applicable law that following the occurrence and during the
continuance of an Event of Default it will not at any time plead, claim or take
the benefit of any appraisal, valuation, stay, extension, moratorium or
redemption law now or hereafter in force in order to prevent or delay the
enforcement of this Agreement, or the absolute sale of the whole or any part of
the Pledged Collateral or the possession thereof by any purchaser at any sale
hereunder, and Pledgor waives the benefit of all such laws to the extent it
lawfully may do so.  Pledgor agrees that
it will not interfere with any right, power and remedy of Lender provided for
in this Agreement or now or hereafter existing at law or in equity or by
statute or otherwise, or the exercise or beginning of the exercise by Lender of
any one or more of such rights, powers or remedies.  No failure or delay on the part of Lender to
exercise any such right, power or remedy and no notice or demand which may be
given to or made upon Pledgor by Lender with respect to any such remedies shall
operate as a waiver thereof, or limit or impair Lender’s right to take any
action or to exercise any power or remedy hereunder, without notice or demand,
or prejudice its rights as against Pledgor in any respect.

 

(e)   Pledgor further agrees that a breach
of any of the covenants contained in this Section 8 will cause irreparable
injury to Lender, that Lender shall have no

 

6

 

adequate
remedy at law in respect of such breach and, as a consequence, agrees that each
and every covenant contained in this Section 8 shall be specifically
enforceable against Pledgor, and Pledgor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants
except for a defense that the Secured Obligations are not then due and payable
in accordance with the agreements and instruments governing and evidencing such
obligations.

 

9.     Waiver.  No delay on
Lender’s part in exercising any power of sale, lien, option or other right
hereunder, and no notice or demand which may be given to or made upon Pledgor
by Lender with respect to any power of sale, lien, option or other right
hereunder, shall constitute a waiver thereof, or limit or impair Lender’s right
to take any action or to exercise any power of sale, lien, option, or any other
right hereunder, without notice or demand, or prejudice Lender’s rights as
against Pledgor in any respect.

 

10.   Assignment.  Lender may
assign, endorse or transfer any instrument evidencing all or any part of the
Secured Obligations as provided in, and in accordance with, the Credit
Agreement, and the holder of such instrument shall be entitled to the benefits
of this Agreement.

 

11.   Termination.  Immediately
following the Termination Date, Lender shall deliver to Pledgor the Pledged
Collateral pledged by Pledgor at the time subject to this Agreement, and all
instruments of assignment executed in connection therewith, free and clear of
the liens hereof and, except as otherwise provided herein, all of Pledgor’s
obligations hereunder shall at such time terminate.

 

12.   Lien Absolute.  All rights of
Lender hereunder, and all obligations of Pledgor hereunder, shall be absolute
and unconditional irrespective of:

 

(a)   any lack of validity or
enforceability of the Credit Agreement, any other Loan Document or any other
agreement or instrument governing or evidencing any Secured Obligations;

 

(b)   any change in the time, manner or
place of payment of, or in any other term of, all or any part of the Secured
Obligations, or any other amendment or waiver of or any consent to any
departure from the Credit Agreement, any other Loan Document or any other
agreement or instrument governing or evidencing any Secured Obligations;

 

(c)   any exchange, release or non-perfection
of any other Collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured Obligations;

 

(d)   the insolvency of the Borrower or
any Guarantor; or

 

(e)   any other circumstance which might
otherwise constitute a defense available to, or a discharge of, Pledgor.

 

13.   Release.  Pledgor
consents and agrees that Lender may at any time, or from time to time, in its discretion:

 

7

 

(a)   renew, extend or change the time of
payment, and/or the manner, place or terms of payment of all or any part of the
Secured Obligations; and

 

(b)   exchange, release and/or surrender
all or any of the Collateral (including the Pledged Collateral), or any part
thereof, by whomsoever deposited, which is now or may hereafter be held by
Lender in connection with all or any of the Secured Obligations; all in such
manner and upon such terms as Lender may deem proper, and without notice to or
further assent from Pledgor, it being hereby agreed that Pledgor shall be and
remain bound upon this Agreement, irrespective of the value or condition of any
of the Collateral, and notwithstanding any such change, exchange, settlement,
compromise, surrender, release, renewal or extension, and notwithstanding also
that the Secured Obligations may, at any time, exceed the aggregate principal
amount thereof set forth in the Credit Agreement, or any other agreement governing
any Secured Obligations.  Pledgor hereby
waives notice of acceptance of this Agreement, and also presentment, demand,
protest and notice of dishonor of any and all of the Secured Obligations, and
promptness in commencing suit against any party hereto or liable hereon, and in
giving any notice to or of making any claim or demand hereunder upon
Pledgor.  No act or omission of any kind
on Lender’s part shall in any event affect or impair this Agreement.

 

14.   Reinstatement.  This
Agreement shall remain in full force and effect and continue to be effective
should any petition be filed by or against Pledgor or any Pledged Entity for
liquidation or reorganization, should Pledgor or any Pledged Entity become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of Pledgor’s
or a Pledged Entity’s assets, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment and performance of the
Secured Obligations, or any part thereof, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or returned by
any obligee of the Secured Obligations, whether as a “voidable preference”, “fraudulent
conveyance”, or otherwise, all as though such payment or performance had not
been made.  In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Secured Obligations shall be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.

 

15.   Miscellaneous.

 

(a)   Lender may execute any of its duties
hereunder by or through agents or employees and shall be entitled to advice of
counsel concerning all matters pertaining to its duties hereunder.

 

(b)   Pledgor agrees to promptly reimburse
Lender for actual out-of-pocket expenses, including, without limitation,
reasonable counsel fees, incurred by Lender in connection with the
administration and enforcement of this Agreement.

 

(c)   Neither Lender, nor any of its
respective officers, directors, employees, agents or counsel shall be liable
for any action lawfully taken or omitted to be taken by it or them hereunder or
in connection herewith, except for its or their own gross

 

8

 

negligence
or willful misconduct as finally determined by a court of competent
jurisdiction.

 

(d)   THIS AGREEMENT SHALL BE BINDING UPON
AND INURE TO THE BENEFIT OF PLEDGOR AND ITS SUCCESSORS AND ASSIGNS (INCLUDING A
DEBTOR IN POSSESSION ON BEHALF OF PLEDGOR), AND SHALL BE BINDING UPON AND INURE
TO THE BENEFIT OF, AND BE ENFORCEABLE BY, LENDER AND ITS SUCCESSORS AND
ASSIGNS, AND SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF MINNESOTA APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN THAT STATE.

 

16.   Severability.  If for any
reason any provision or provisions hereof are determined to be invalid and
contrary to any existing or future law, such invalidity shall not impair the
operation of or effect those portions of this Agreement which are valid.

 

17.   Notices.  Except as
otherwise provided herein, whenever it is provided herein that any notice,
demand, request, consent, approval, declaration or other communication shall or
may be given to or served upon any of the parties by any other party, or
whenever any of the parties desires to give and serve upon any other party any
communication with respect to this Agreement, each such notice, demand,
request, consent, approval, declaration or other communication shall be in
writing and shall be given in the manner, and deemed received, as provided for
in the Credit Agreement.

 

18.   Section Titles.  The Section
titles contained in this Agreement are and shall be without substantive meaning
or content of any kind whatsoever and are not a part of the agreement between
the parties hereto.

 

19.   Counterparts.  This
Agreement may be executed in any number of counterparts, which shall,
collectively and separately, constitute one agreement.

 

20.   Benefit of Lender.  All security
interests granted or contemplated hereby shall be for the benefit of the
Lender, and all proceeds or payments realized from the Pledged Collateral in
accordance herewith shall be applied to the Obligations in accordance with the
terms of the Credit Agreement.

 

21.   Amendment.  If a Pledged
Entity issues any Membership Interests
to Pledgor after the date hereof, this Agreement may be amended by the
execution of a Pledge Amendment in the form of Schedule II hereto,
without the consent or approval of Pledgor. 
All other amendments, modifications and waivers with respect to this
Agreement shall be effective only if they are in writing and executed by Lender
and the Pledgor with an interest of the Pledged Collateral.

 

[Signature Page Follows]

 

9

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first written above.

 

 

	
   

  	
  SOUTHWEST
  CASINO AND HOTEL CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Thomas E. Fox

  
	
   

  	
   

  	
  Its:

  	
    President

  
	
   

  	
   

  	
   

  
	
   

  	
  CROWN
  BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Mark W. Lucke

  
	
   

  	
   

  	
  Mark W. Lucke

  
	
   

  	
   

  	
  Its: Vice President

  

 

 

[Signature
Page to Membership Interest Pledge Agreement]

 

 

SCHEDULE I

 

PLEDGED INTERESTS

 

	
  Name and Address of Pledgor

  	
   

  	
  Pledged Entity

  	
   

  	
  Percentage Interest

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Southwest Casino and
  Hotel Corp.

  2001 Killebrew Drive, Suite 350

  Minneapolis, MN 55425

  	
   

  	
  Gold Rush I, LLC

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Southwest Casino and
  Hotel Corp.

  2001 Killebrew Drive, Suite 350

  Minneapolis, MN 55425

  	
   

  	
  Southwest Casino
  Deadwood, LLC

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Southwest Casino and
  Hotel Corp.

  2001 Killebrew Drive, Suite 350

  Minneapolis, MN 55425

  	
   

  	
  SW Missouri, LLC

  	
   

  	
  100

  	
  %

  

 

I-1

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