Document:

Exhibit 4.1

 

NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK
PURCHASED UPON EXERCISE OF THIS WARRANT MAY BE TRANSFERRED WITHOUT (I) THE
OPINION OF COUNSEL SATISFACTORY TO SOUTHWEST CASINO CORPORATION THAT SUCH
TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE FEDERAL
SECURITIES ACT OF 1933 AND APPLICABLE STATE LAW; OR (II) SUCH
REGISTRATION.  IN ADDITION, THE
UNDERLYING SHARES OF COMMON STOCK ARE SUBJECT TO RESTRICTION AND RIGHTS OF
REDEMPTION CONTAINED IN THE COMPANY’S AMENDED AND RESTATED ARTICLES OF
INCORPORATION, AS THE SAME MAY BE AMENDED FROM TIME TO TIME.

 

SOUTHWEST
CASINO CORPORATION

WARRANT
TO PURCHASE SHARES OF COMMON STOCK

 

Void after 4:00 p.m.,
Minneapolis, Minnesota time on March 9, 2013

 

This warrant (“Warrant”) certifies that                                                         
(“Holder”), is entitled to purchase,
subject to fulfillment of the terms and conditions in this Warrant (including,
to the extent required, the approval of all state and federal regulatory
authorities having jurisdiction over Southwest Casino Corporation (the “Company”)), from the Company at any time
before 4:00 p.m. Minneapolis time on March 9, 2013 (the “Exercise Period”),                                     
shares of Common Stock of the Company (“Common Stock”)
at the purchase price of $0.39 per share. 
The number of shares of Common Stock Holder will receive upon exercise
of this Warrant and the price to be paid for a share of Common Stock may be
adjusted from time to time as stated in this Warrant. The shares of Common
Stock deliverable upon exercise of this Warrant are sometimes referred to as “Warrant Shares” and the purchase price of each share of
Common Stock under this Warrant is sometimes referred to as the “Exercise Price.”  The
term “Warrant” as used in this Warrant
includes any warrants issued in exchange for, substitution for, and replacement
of this Warrant or into which this Warrant may be divided or exchanged.

 

Section 1.                                          Exercise of Warrant. 
Subject to the provisions of this Warrant (including, but not limited
to, the approval of all state and federal regulatory authorities that have
jurisdiction over the Company), this Warrant may be exercised at any time by
the presentation and surrender to the Company of this Warrant with (1) the
Purchase Form attached as Exhibit A, duly executed by the Holder, and
(2) payment, in cash, by wire transfer to an account of the Company, or by
certified or official bank check payable to the order of the Company, of the
Exercise Price payable for the Warrant Shares being purchased (payment must
include all applicable federal and state taxes).  If the Holder purchases less than all of the
Warrant Shares, the Company will execute and deliver to the Holder a new
Warrant evidencing the right of the Holder to purchase the balance of the
shares purchasable under the Warrant Shares on the terms provided in this
Warrant.

 

As soon as practicable
after the exercise of this Warrant and payment of the Exercise Price, the
Company will cause to be issued in the name of and delivered to the Holder, or
as the Holder may direct, a certificate or certificates representing the number
of Warrant Shares purchased.  The Company
may require that the certificate or certificates contain a legend substantially
as follows:

 

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“The securities
represented by this certificate (i) have not been registered under the
Securities Act of 1933, as amended, or any state securities laws; (ii) may
not be sold, offered for sale, or transferred in the absence of either an
effective registration under the Securities Act of 1933, as amended, and under
the applicable state securities laws, or an opinion of counsel for the Company
that such transaction is exempt from registration under the Securities Act of 1933,
as amended, and under the applicable state securities laws; and (iii) a
holder of the securities will be required to comply with all federal and state rules and
regulations regarding gaming operations applicable to the Company and its
subsidiaries and may be required to sell the securities to the Company or
otherwise dispose of the securities if continued ownership of the securities by
the holder may result in a violation of applicable rules or regulations or
the disapproval, modification, loss or non-renewal of any contract or license
or other consent or approval related to the gaming operations of the Company or
any subsidiary of the Company.”

 

Section 2.                                          Reservation of Shares. 
The Company agrees that, at all times until the expiration of this Warrant,
it will reserve for issuance and delivery upon exercise of this Warrant the
number of shares of its Common Stock required for issuance or delivery upon
exercise of this Warrant.

 

Section 3.                                          Assignment or Loss of
Warrant.  This Warrant is issued subject to the
following terms, conditions, and limitations:

 

3.1                               Assignment/Transfer of
Warrant.  This Warrant is not assignable or
transferable unless accompanied by a favorable opinion of counsel satisfactory
to the Company, as stated in Section 6 of this Warrant; except that it may
be transferred according to the terms of the will of the Holder, or the law of
intestate succession, upon the death of the Holder.  Any assignment must be made by surrender of
this Warrant to the Company with a Form of Assignment acceptable to the
Company and duly executed and with funds sufficient to pay any transfer tax;
whereupon the Company, without charge, will execute and deliver a new warrant
in the name of the assignee named in the instrument of assignment and this
Warrant will be promptly canceled.

 

3.2                               Loss of Warrant. 
Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction, or mutilation of this Warrant, and (in the case of loss,
theft or destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Warrant if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date to the Holder or such
Holder’s designee.

 

Section 4.                                          Rights of the Holder. 
The Holder, by virtue of this Warrant, is not entitled to any rights of
a stockholder in the Company, either at law or in equity, and the rights of the
Holder are limited to those expressed in this Warrant and are not enforceable
against the Company except to the extent stated in this Warrant.

 

Section 5.                                          Registration Rights. 
The shares of Common Stock issuable upon exercise of this Warrant are
subject to the registration rights stated in the separate Registration Rights
Agreement between the Company and the Holder dated the same date as this
Warrant.

 

Section 6.                                          Anti-Dilution Provisions.

 

6.1                               Issuance of Dividends
and/or Stock Splits.  If, before this Warrant is
exercised or expires, the Company declares and issues any shares of its Common
Stock as a stock dividend or subdivides the number of outstanding shares of its
Common Stock into a greater number of shares, the 

 

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then applicable Exercise
Price will be proportionately reduced and the number of shares then purchasable
under this Warrant will be proportionately increased.  Conversely, if the Company reduces the number
of outstanding shares of Common Stock by combining shares into a smaller number
of shares (e.g. reverse stock split), the then applicable Exercise Price will
be proportionately increased and the number of shares of Common Stock then
purchasable under this Warrant will be proportionately decreased.  Any dividend paid or distributed upon the
Common Stock in securities convertible into shares of Common Stock will be
treated as a dividend paid in Common Stock to the extent that shares of Common
Stock are issuable upon the conversion of such convertible security.

 

6.2                               Fractional Shares. 
No fractional shares or script representing fractional shares of Common
Stock will be issued upon the exercise of this Warrant.  With respect to any fraction of a share
called for upon any exercise of this Warrant, the Company will pay to the
Holder an amount in cash equal to that fraction multiplied by the market value
of a full share of Common Stock on the day of exercise, as determined in good
faith by the Company.

 

6.3                               Reclassification,
Reorganization or Merger.  In case of
any reclassification, capital reorganization, or other change of outstanding
shares of Common Stock of the Company (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of an issuance of Common Stock by way of dividend or other distribution
or of a subdivision or combination), or in case of any consolidation or merger
of the Company with or into another corporation (other than a merger with a
subsidiary in which the Company is the continuing corporation and which does
not result in any reclassification, capital reorganization, or other change of
outstanding shares of Common Stock), or in case of any sale or conveyance of
all or substantially all of the assets of the Company to another corporation,
the Company shall cause effective provision to be made so that the Holder shall
have the right thereafter, by exercising this Warrant, to purchase the kind and
amount of shares of stock and other securities and property receivable upon
that reclassification, capital reorganization, or other change, consolidation,
merger, sale or conveyance as may be issued or payable with respect to or in
exchange for the number of shares of Common Stock of the Company purchasable
upon the exercise of this Warrant had that recapitalization, capital
reorganization, or other change, consolidation, merger, sale or conveyance not
taken place.  Any such provisions shall
include provision for adjustments, which shall be as nearly equivalent, as may
be practicable to the adjustments provided for in this Warrant.  The foregoing provisions of this Section 5
will similarly apply to successive reclassifications, capital reorganizations,
changes of shares of Common Stock, and to successive consolidations, mergers,
sales or conveyances.

 

Section 7.                                          Transfer to Comply With
the Securities Act.  This Warrant and the Warrant
Shares or any other security issued or issuable upon exercise of this Warrant
may not be transferred without (i) the opinion of counsel satisfactory to
the Company that such transfer may lawfully be made without registration under
the Federal Securities Act of 1933, as amended (the “Securities
Act”), and applicable state law; or (ii) such
registration.  Each certificate
representing Warrant Shares or other securities issued upon exercise of this
Warrant may bear a legend substantially as set forth in Section 1 above.

 

Section 8.                                          Representations and
Warranties of Holder.  The Holder represents and
warrants to the Company the following:

 

8.1                               Holder is an “Accredited Investor” as
defined in Rule 501(a) of Regulation D under the Securities Act of
1933, as amended (the “Act”).

 

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8.2                               As a sophisticated investor, the Holder
has such knowledge and experience in financial business matters that the Holder
is capable of evaluating the merits and risks of the prospective investment in
the Warrant and the Warrant Shares.

 

8.3                               The Holder recognizes that an investment
in the Warrant and the Warrant Shares of Common Stock involves a high degree of
risk, that transferability and resale is restricted and that the Holder could
sustain a loss of Holder’s entire investment the Warrant and the Warrant
Shares.

 

8.4          In
connection with the acquisition of the Warrant, the Holder represents and
warrants that the Holder intends to acquire the Warrant and the Warrant Shares
for investment purposes and not with a view to or for resale in connection with
any distribution of the Warrant or the Warrant Shares, and agrees that the
Holder will not sell or assign the Warrant or the Warrant Shares without
registration under all applicable securities laws or appropriate exemption from
applicable registration requirements. 
The Holder understands and acknowledges that neither the Warrant nor the
Warrant Shares have been registered under the Securities Act nor applicable
state securities laws and therefore will not be freely transferable.  The Holder also understands and acknowledges
that the Company is under no obligation to register the Warrant or the Warrant
Shares.

 

Section 9.                                          Survival of
Representations and Warranties.  The
representations and warranties set forth in Section 6 above will survive
the exercise of the Warrant.

 

Section 10.                                   Applicable Law. 
This Warrant is governed by and must be construed in accordance with the
laws of the State of Minnesota.

 

IN WITNESS WHEREOF, this Warrant has been duly executed by the
undersigned as of March 10, 2008.

 

	
   

  	
  SOUTHWEST CASINO
  CORPORATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accepted and agreed to:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Holder

  	
   

  	
   

  	
   

  

 

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EXHIBIT A

 

PURCHASE FORM

 

To be signed upon
exercise of Warrant.

 

The undersigned, the
Holder of the attached Warrant (the “Warrant”),
irrevocably elects to exercise the purchase right represented by the Warrant
for, and to purchase under the Warrant,                             
of the shares of Common Stock of Southwest Casino Corporation (the “Company”) to which the Warrant relates and makes payment of
$                                                
($                  
per share) for those shares in cash or by certified check, which payment is
included with this Purchase Form.  The
undersigned requests that a certificate representing the shares purchased be
delivered to the undersigned at the address stated below:

 

(a)           The shares of common stock
purchasable upon exercise of the attached Warrant (the “Warrant Shares”) have not been registered
under the Securities Act of 1933, as amended (the “Act”)
or applicable state securities laws and are being issued by the Company under
exemptions from such registration requirements. 
Neither the Securities and Exchange Commission nor any state securities
division has made an independent determination that the Securities are exempt
from registration.  Any representation to
the contrary is a criminal offense.

 

(b)           The Warrant Shares are subject to
restrictions on transferability and resale and may not be transferred or resold
except as permitted under the Company’s Articles of Incorporation and Bylaws,
the Act and the applicable state laws, pursuant to registration or exemption
therefrom, and, if applicable, upon receipt of the prior written approval of
the Colorado Limited Gaming Control Commission, South Dakota Commission on
Gaming and such other state regulatory authorities as may have jurisdiction.

 

(c)           The undersigned Holder represents,
warrants, and agrees that (i) the Company has made no representations as
to the value of the Warrant Shares; (ii) the Holder has been provided with
the opportunity to ask such information of the Company’s management and to
obtain such information regarding the Company, its business and affairs as the
Holder deems necessary or appropriate in determining to accept the Securities
under the terms and conditions of this Agreement; (iii) the Holder is
accepting the Warrant Shares for Holder’s own account, for long-term investment
and without the intention of reselling or redistributing the Warrant Shares, (iv) the
Company has no obligation to register the Warrant Shares; and (v) any
transfer of the Warrant Shares is restricted by applicable state and federal
securities laws and will be further restricted by a restrictive legend placed
on the certificate(s) representing the Warrant Shares.

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Address:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-1EXHIBIT 4.2

 

REGISTRATION RIGHTS AGREEMENT

 

SOUTHWEST CASINO CORPORATION, a Minnesota corporation (“Southwest”), and                                                                    
                             (“Investor”) enter into this Registration Rights
Agreement (“Agreement”)
effective March 10, 2008 (Investor and each other Investor listed on Schedule
1 to this Agreement are referred to collectively as the “Investors”).

 

BACKGROUND

 

A.            Southwest and Investor
have entered into a
Subscription Agreement and Letter of Investment Intent (the “Subscription Agreement”),
under which Investor has subscribed to purchase warrants (the “Warrants”) to acquire shares of Southwest
common stock, par value $0.001 (the “Common
Stock”) by co-signing with Southwest a promissory note for a bank
loan to Southwest.

 

B.            As a condition to the obligations of the
Investors under the Subscription Agreement, Southwest has agreed to grant the
registration rights with respect to the shares of Common Stock issuable upon
exercise of the Warrants on the terms and conditions stated in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing, and
for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, Southwest and the Holders hereby agree as follows.

 

Section 1.              Definitions.
The following
terms have the following meanings in this Agreement:

 

1.1           “Holders”
means the (a) the Investors, each of whom is a party to this Agreement,
and (b) any subsequent legal or beneficial owner of the Warrants or shares
of Common Stock issued upon exercise of the Warrants, who has become a party to
this Agreement in accordance with Section 11.9 of this Agreement.

 

1.2           “Person”
means an individual, partnership, limited partnership, corporation, business
trust, limited liability company, association, joint stock company, trust,
unincorporated organization, joint venture or other entity of whatever nature.

 

1.3           “Registrable Common”
means (a) any shares of Common Stock issued or issuable upon exercise of
the Warrants, and (b) any share of Common Stock issued as a dividend,
stock split, reclassification, recapitalization or other distribution with
respect to or in exchange for or replacement of the Warrants or any shares of
Common Stock issuable upon exercise of the Warrants.  Registrable Common does not include shares of
Common Stock (x) that have been effectively registered under the
Securities Act and sold by a Holder in accordance with that registration, (y) that
have been sold by a Holder under Rule 144, or (z) for which
registration under the Securities Act is no longer required for the immediate
public distribution of as a result of the provisions of Rule 144.

 

1.4           “Register,”  “registered” and “registration”  refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act and the
declaration or ordering of the effectiveness of that registration statement.

 

1.5           “Rule 144”
means Rule 144 promulgated by the Commission under the Securities Act, as
the rule may be amended from time to time, or any successor to Rule 144.

 

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1.6           “Securities Act”
means the Securities Act of 1933, as amended, and the rules and
regulations promulgated from time to time under the Securities Act.

 

Section 2.              Registration
Rights.

 

2.1           If
Southwest determines to prepare and file a registration statement under the
Securities Act (other than a registration on a Form S-8 or similar form,
or a registration on a form that does not permit the inclusion of shares by its
security holders), then Southwest must give written notice of its determination
to all record Holders of Registrable Common (a “Participation
Notice”) at least 30 days before filing that registration statement.  Upon the written request of a Holder of
Registrable Common given within 15 days after receipt of a Participation
Notice, Southwest will, except as provided in this Agreement, include in that
registration statement all shares of Registrable Common for which a Holder
requests registration.  If any
registration under this Section 2.1 is underwritten in whole or in part,
Southwest may require that the Registrable Common requested for inclusion in
the registration statement under this Section 2.1 be included in the
underwriting on the same terms and conditions as the securities otherwise being
sold through the underwriters.

 

2.2           Nothing
in this Agreement prevents Southwest from, at any time, abandoning or delaying
any registration Southwest initiates. 
Southwest must bear all expenses related to the abandonment or delay of
a registration.

 

2.3           If,
in the judgment of Southwest’s managing underwriter of an underwritten
registration, the inclusion of any or all of the Registrable Common requested
for inclusion in the registration under this Section 2 would interfere
with the successful marketing of the shares of Common Stock offered by
Southwest or would negatively impact the trading market of the Common Stock,
then the number of Registrable Common included in the registration under this Section 2
may be reduced pro rata (by
number of shares) among the Holders and any other shareholder with pari passu registration rights requesting
inclusion in the registration, or eliminated completely.

 

2.4           The
right of any Holder to include Registrable Common in any underwritten
registration under this Agreement is conditioned upon Holder’s full
participation in the underwriting and the inclusion of Holder’s Registrable
Common in the underwriting.  All Holders
proposing to distribute their securities through the underwriting must
(together with Southwest and any other selling shareholders) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected.

 

2.5           Southwest
is not obligated to effect or take any action to effect, any registration under
Section 2.1 more than 2 times.

 

2.6           Nothing
in this Agreement restricts Southwest from, at any time, granting registration
rights on the same or different terms to any other holder or acquirer of
Southwest securities.

 

Section 3.              Registration
Procedures.  Subject to the terms of this Agreement, if
Southwest is required by the terms of this Agreement to include shares of
Registrable Common in a registration under the Securities Act, Southwest will
do the following:

 

3.1           Filing.  Prepare and file with the United States
Securities and Exchange Commission (the “Commission”)
a registration statement that includes the shares of Registrable Common to be
included in the registration in accordance with Section 2, and use its
commercially reasonable efforts to cause the registration statement to become
and remain effective for a period as may be reasonably necessary to effect the
sale of such securities, not to exceed 6 months;

 

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3.2           Period of Effectiveness.  Prepare and file with the Commission any
amendments to the registration statement or supplements to the prospectus in
the registration statement that may be necessary to keep the registration
statement effective for a period as may be reasonably necessary to effect the
sale of the Registrable Common, not to exceed 6 months;

 

3.3           Copies.  Furnish to the Holders participating in the
registration and to the underwriters of the securities being registered a
reasonable number of copies of the registration statement, preliminary
prospectus, formal prospectus and other documents as the Holders and
underwriters may reasonably request in order to facilitate the public offering
of the Regsitrable Common included in the registration;

 

3.4           Blue Sky.  Use its commercially reasonable efforts to
register or qualify the Registrable Common covered by the registration
statement under the state securities or blue sky laws of those jurisdictions
that participating Holders reasonably request in writing within 20 days after
the original filing of the registration statement, except that Southwest will
not for any purpose be required to execute a general consent to service of
process or to qualify to do business as a foreign corporation in any
jurisdiction where it is not so qualified;

 

3.5           Notification.  Notify the Holders participating in the
registration, promptly after Southwest receives notice, of the time when the
registration statement becomes effective or a supplement to any prospectus
forming a part of the registration statement has been filed;

 

3.6           Amendment Notice.  Notify the Holders participating in the
registration promptly of any request by the Commission for the amending or
supplementing of the registration statement or prospectus or for additional
information;

 

3.7           Update.  Prepare and promptly file with the Commission
and promptly notify the Holders of the filing of any amendment or supplement to
the registration statement or prospectus as necessary to correct any statements
or omissions if, at the time when a prospectus relating to the securities is
required to be delivered under the Securities Act, any event has occurred that
causes the prospectus or any other prospectus then in effect to include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements in the prospectus, in light of the
circumstances in which they were made, not misleading;

 

3.8           Stop Orders.  Advise the Holders participating in the
registration, promptly after Southwest receives notice or otherwise becomes
aware, of the issuance of any stop order by the Commission suspending the
effectiveness of the registration statement or the initiation or threatening of
any proceeding for that purpose. 
Southwest must then promptly use its best efforts to prevent the
issuance of any stop order or to obtain the withdrawal of any stop order that
has been issued; and

 

3.9           Compliance Issues.  Southwest must provide to Holders
participating in the registration a copy of any amendment or supplement at
least 2 business days before filing. 
Southwest must not file any amendment or supplement to the registration
statement or prospectus to which a majority in interest of the Holders
participating in the registration have reasonably objected on the grounds that
the amendment or supplement does not comply in all material respects with the
requirements of the Securities Act unless, in the opinion of counsel for
Southwest, the filing of the amendment or supplement is reasonably necessary to
protect Southwest from any liabilities under any applicable federal or state
law and the filing will not violate applicable law.

 

Section 4.              Furnish Information.  It is a condition precedent to the
obligations of Southwest to include any Holders shares of Registrable Common in
a registration that the Holder must furnish to 

 

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Southwest any information regarding itself, the
Registrable Common held by the Holder, and the intended method of disposition
of the Registrable Common as required to effect the registration of the Holder’s
Registrable Common.

 

Section 5.              Expenses. 
With respect to the inclusion of Registrable Common in a registration as
requested under Section 2.1 of this Agreement (except as otherwise
provided in Section 2), Southwest will bear the following fees, costs and
expenses: all registration, filing and NASD (or exchange) fees, printing
expenses, fees and disbursements of counsel and accountants for Southwest, fees
and disbursements of counsel for the underwriter or underwriters of the
securities included in the registration (if Southwest or selling security
Holders are required to bear these fees and disbursements), all internal
Company expenses, all legal fees and disbursements and other expenses of
complying with state securities or blue sky laws of any jurisdictions in which
the securities to be offered are to be registered or qualified, and the
premiums and other costs of policies of insurance against liability (if any)
arising out of the public offering.  All
fees and disbursements of any legal counsel, accountants or advisors for the
selling security Holders, underwriting discounts and commissions and transfer
taxes relating to the shares included in the offering by the selling security
Holders, and any other expenses incurred by the selling security Holders not
expressly included above, must be borne by the selling security Holders.

 

Section 6.              Delay of Registration. 
No Holder shall have any right to obtain or seek an injunction restraining
or otherwise delaying any registration as the result of any controversy that
might arise with respect to the interpretation or implementation of this
Agreement.

 

Section 7.              Indemnification. 
In the event that any Registrable Common is included in a registration
statement in accordance with Section 2 of this Agreement:

 

7.1            Indemnification by Company.  To the fullest extent permitted by law,
Southwest will indemnify and hold harmless each Holder of Registrable Common
that is included in a registration statement under the provisions of this
Agreement, the Holder’s directors, officers, partners, shareholders and legal
counsel and any underwriter (as defined in the Securities Act) for the Holder
and each Person, if any, who controls the Holder or the underwriter within the
meaning of the Securities Act, from and against, and will reimburse the Holder
and the underwriter and controlling Person with respect to, any and all loss,
damage, claims or liability (collectively, “Losses”),
joint or several, to which any of them may become subject under the Securities
Act, state securities laws or otherwise, and Southwest will pay to each Holder,
director, officer, partner, shareholder, legal counsel, underwriter or
controlling person any legal or other costs or expenses reasonably incurred by
that person in connection with investigating or defending any Loss, insofar as
the Losses are caused by any untrue or alleged untrue statement of any material
fact in the registration statement, any prospectus in the registration statement
or any amendment or supplement to the registration statement, or arise out of
or are based upon the omission or the alleged omission to state in the
registration statement a material fact required to be stated in the
registration statement or necessary to make the statements in the registration
statement, in light of the circumstances in which they were made, not
misleading; provided, however, that Southwest will not be liable to the extent
that any Loss arises out of or is based upon an untrue statement or omission so
made in conformity with information furnished by the Holder, director, officer,
partner, shareholder, legal counsel, underwriter or controlling Person;
provided further, however, that the indemnity agreement in this Section 7.1
will not apply to amounts paid in settlement of any Loss if the settlement is
effected without the consent of Southwest, which consent Southwest will not
withhold unreasonably.  With respect to
any preliminary prospectus, the foregoing indemnity obligation will not inure
to the benefit of any Holder on account of any Loss whatsoever arising from the
sale of any Registrable Common by the Holder to any person if (A) a copy
of the prospectus (as amended or supplemented if amendments or supplements have
been furnished to the Holder before the confirmation of the sale involved) was
not sent or given by or on behalf of the Holder to that person, if required by
law, with or prior to the written confirmation of the sale 

 

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involved, and (B) the untrue statement or
omission of a material fact in the preliminary prospectus from which the Loss
arose was corrected in the prospectus (as amended or supplemented if the
amendments or supplements have been furnished as aforesaid).

 

7.2           Indemnification by Holders.  Each Holder of Registrable Common that is
included in a registration statement under the provisions of this Agreement
will indemnify and hold harmless Southwest, its directors and officers, each
Person, if any, who controls Southwest within the meaning of the Securities
Act, any other Holder selling securities under the registration statement, any
controlling Person of any selling Holder, any underwriter and any controlling
Person of any underwriter (each, an “Indemnitee”)
from and against, and will reimburse any Indemnitee with respect to, any and
all Losses to which Indemnitee may become subject under the Securities Act,
state securities laws or otherwise, and the Holder will pay to each Indemnitee
any legal or other costs or expenses reasonably incurred by that person in
connection with investigating or defending any Losses, insofar as the Losses
are caused by any untrue or alleged untrue statement of any material fact in
the registration statement, any prospectus in the registration statement or any
amendment or supplement to the registration statement, or arise out of or are
based upon the omission or the alleged omission to state in the registration
statement, prospectus, amendment or supplement a material fact required to be
stated in the registration statement, prospectus, amendment or supplement or
necessary to make the statements in the registration statement, prospectus,
amendment or supplement, in light of the circumstances in which they were made,
not misleading, in each case to the extent, but only to the extent, that the
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with information furnished in
writing by the Holder to Southwest specifically for use in the preparation of
the registration statement, prospectus, amendment or supplement, and provided,
however, that the indemnity agreement in this Section 7.2 does not apply
to amounts paid in settlement of any Loss if the settlement is effected without
the consent of the indemnifying Holder, which consent the indemnifying Holder
must not withhold unreasonably.  With
respect to any preliminary prospectus, the foregoing indemnity obligation will
not inure to the benefit of Southwest on account of any Loss arising from the
sale of any Registrable Common by a Holder to any person if (A) a copy of
the prospectus (as amended or supplemented if the amendments or supplements are
furnished to a Holder before the confirmation of the sale involved) was not
sent or given by or on behalf of a Holder to the person, if required by law,
with or prior to the written confirmation of the sale involved, and (B) the
indemnifying Holder corrected the untrue statement or alleged untrue statement
or omission or alleged omission of a material fact in the prospectus (as
amended or supplemented if the amendments or supplements were furnished as
aforesaid).  The indemnification
obligations of each Holder under this Section 7.2 are limited to an amount
equal to the net proceeds received by each Holder of Registrable Common sold as
contemplated in this Agreement.

 

7.3           Indemnification Procedures.  Promptly after receipt by a party entitled to
indemnification under this Section 7 (each, an “Indemnified
Party”) of notice of the commencement of any action involving the
subject matter of the foregoing indemnity provisions, the Indemnified Party
will, if a claim is to be made against the party obligated to provide
indemnification under this Section 7 (each, an “Indemnifying
Party”), promptly notify the Indemnifying Party of the commencement
of the action.  The failure to provide
such notice will not relieve the Indemnifying Party from any liability under
this Agreement, except to the extent that the delay in giving, or failing to
give, notice has a material adverse effect upon the ability of the Indemnifying
Party to defend against the claim.  In
case an action is brought against an Indemnified Party, the Indemnifying Party
has the right to participate in and, at the Indemnifying Party’s option, to
assume the defense of the action, singly or jointly with any other Indemnifying
Party similarly notified, with counsel satisfactory to the Indemnified Party;
provided, however, that if the defendants in any action include both the
Indemnified Party and the Indemnifying Party and the Indemnified Party
reasonably concludes that there may be legal defenses available to any
Indemnified Parties that are different from or additional to those available to
the Indemnifying Party, or if there is a conflict of interest which would
prevent counsel for the Indemnifying Party from also 

 

E-5

 

representing the Indemnified Party, the Indemnified
Party will have the right to select counsel to participate in the defense of
the action on behalf of the Indemnified Party at the expense of the
Indemnifying Party; provided that if there is more than one Indemnified Party,
the Indemnifying Party will be responsible for the expense of only one special
counsel selected jointly by the Indemnified Parties.  After notice from an Indemnifying Party to
any Indemnified Party of the Indemnifying Party’s election to assume the
defense of the action, the Indemnifying Party will not be liable to the
Indemnified Party under this Section 7 for any legal or other expense
subsequently incurred by the Indemnified Party in connection with the defense
of the action other than reasonable costs of investigation, unless (i) the
Indemnified Party employed separate counsel in accordance with the proviso of
the preceding sentence, or (ii) the Indemnifying Party does not employ
counsel satisfactory to the Indemnified Party to represent the Indemnified
Party within a reasonable time after the notice of the commencement of the
action, or (iii) the Indemnifying Party has authorized the employment of
counsel for the Indemnified Party at the expense of the Indemnifying Party.

 

Section 8.              Exceptions
to and Termination of Registration Obligations.  Southwest is not obligated to honor a request
under Section 2 to include Registrable Common in a registration statement
if the Registrable Common is otherwise eligible for immediate sale by the
Holder under Rule 144.  This
Agreement, and the registration rights stated in this Agreement, terminate on
the earlier to occur of (a) 2 years after the date of this Agreement or (b) at
any time after the date of this Agreement that all Holders are able to sell
their entire holdings during any 90 day period under Rule 144(k).

 

Section 9.              Cooperation. 
Any Holder whose Registrable Common are to be included in a registration
statement filed by Southwest agrees to cooperate with all reasonable requests
by Southwest necessary to effectuate the purposes of this Agreement, including
by timely providing Southwest with all information necessary to file a
registration statement.

 

Section 10.            “Lock-Out” Agreement.  Each
Holder hereby agrees that, for a period of 180 days after the effective date of
any registration statement for Southwest securities (the “Lock-Out Period”), Holder will not sell,
offer to sell, contract to sell (including, without limitation, any short
sale), grant any option to purchase or otherwise transfer or dispose of any
securities of Southwest held by Holder, directly or indirectly, whether through
trade in the public securities markets, OTCBB or private transactions or
through any other means, except transfers to donees who agree to be similarly
bound.  Each Holder acknowledges and
agrees that Southwest may impose stop-transfer instructions during the Lock-Out
Period with respect to the securities of each Holder subject to this
restriction if necessary to enforce such restrictions.

 

Section 11.            Miscellaneous.

 

11.1         Waivers, Amendments and
Approvals.  In each case
in which the approval of the Holders is required by the terms of this
Agreement, that requirement will be satisfied by a vote or the written action
of Holders of at least a majority of
the Registrable Common.  Any term or
provision of this Agreement requiring performance by or binding upon Southwest
or Holders may be amended, and the observance of any term of this Agreement may
be waived (either generally or in a particular instance and either
retroactively or prospectively), only by a writing signed by Southwest and the
Holders of at least a majority of the then outstanding Registrable Common.  Any amendment or waiver affected in
accordance with this Section shall be binding upon the Holders (including
permitted assigns under Section 11.9 of this Agreement).  The waiver by a party of any breach of this
Agreement or default in payment of any amount due under this Agreement or
default in the performance of this Agreement will not be deemed to constitute a
waiver of any other default or succeeding breach or default.  Written notice of any waiver, consent or
agreement of amendment, modification or supplement will be given to the record
Holders of Registrable Common who did not give written consent to the waiver,
consent, agreement or amendment.

 

E-6

 

11.2         Written Changes, Waivers,
Etc.  Neither this
Agreement nor any provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by a statement in writing signed by
Southwest and approved by the Holders as provided in Section 11.1.

 

11.3         Notices.  All notices, demands or other communications
to be given or delivered under this Agreement must be in writing and will be
deemed given when delivered personally to the recipient, sent to the recipient
by reputable overnight courier service (charges prepaid), mailed to the
recipient by certified or registered mail, return receipt requested and postage
prepaid, or transmitted by facsimile or electronic mail (with request for
immediate confirmation of receipt in a manner customary for electronic mail and
with physical delivery of the communication being made by one of the other
means specified in this section promptly thereafter), as follows:

 

11.3.1                                          To a Holder, addressed to the Holder at
the address(es) stated on Schedule 1.

 

11.3.2                                          To Southwest, to:

 

Southwest Casino
Corporation

Attention:  Thomas E. Fox, President

2001 Killebrew Drive, Suite 350

Minneapolis, MN  55425

Facsimile:   952-853-9991

Telephone:  952-853-9990

 

Any party may
change its address for such communications by giving notice of the change to
the other parties in conformity with this Section.

 

11.4         Delays or Omissions.  Except as expressly provided in this
Agreement, no delay or omission to exercise any right, power or remedy accruing
to any party under this Agreement will impair that right, power or remedy nor
will it be construed as a waiver of any breach or default, or an acquiescence
to a breach or default, or of a similar breach of default occurring later; nor
shall any waiver of any single breach or default be deemed a waiver of any
other breach or default.  Any waiver,
permit, consent or approval of any kind or character of any breach or default
under this Agreement, or any waiver of any provisions or conditions of this
Agreement, must be in writing and will be effective only to the extent
specifically stated in that writing.

 

11.5         Other Remedies.  Any and all remedies in this Agreement
expressly conferred upon a party will be deemed cumulative with, and not
exclusive of, any other remedy conferred by this Agreement or by law on that
party, and the exercise of any one remedy will not preclude the exercise of any
other.

 

11.6         Attorneys’ Fees.  If suit is brought to enforce or interpret
any part of this Agreement, the prevailing party is entitled to recover, as an
element of the costs of suit and not as damages, reasonable attorneys’ fees to
be fixed by the court (including, without limitation, costs, expenses and fees
on any appeal).  The prevailing party is
the party entitled to recover its costs of suit, regardless of whether the suit
proceeds to final judgment.  A party not
entitled to recover its costs is not entitled to recover attorneys’ fees.  No sum for attorneys’ fees will be counted in
calculating the amount of a judgment for purposes of determining if a party is
entitled to recover costs or attorneys’ fees.

 

11.7         Entire Agreement.  This Agreement, the schedules to this
Agreement, the documents referenced in this Agreement and the exhibits to those
documents, constitute the entire understanding and agreement of the parties to this
Agreement with respect to the subject matter of this Agreement and 

 

E-7

 

supersede all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied, written or oral,
between the parties with respect to the subject matter of this Agreement.  The express terms of this Agreement control
and supersede any course of performance or usage of the trade inconsistent with
any of the terms of this Agreement.

 

11.8         Severability.  If any provision of this Agreement or of any
agreement entered into under this Agreement is determined to be illegal or
unenforceable, all other provisions of this Agreement and of each other
agreement entered into under this Agreement, will be given effect separately
from the provision or provisions determined to be illegal or unenforceable and
will not be affected by that determination.

 

11.9         Successors and Assigns.  The terms and conditions of this Agreement
inure to the benefit of, and bind and are enforceable by, the respective heirs,
successors and assigns of the parties to this Agreement; provided, however,
that the rights of a Holder under this Agreement may be assigned only (a) to
a partner or retired partner of the assigning Holder if that assigning Holder
is a partnership or to any Affiliate of an assigning Holder which is also an
accredited investor within the meaning of the Securities Act, (b) to any
family member of, or trust for the benefit of, the assigning Holder, (c) to
any affiliated entities of the assigning Holder if the affiliated entities are
managed by the same manager or managing partner or management company, or
managed by an entity controlling, controlled by or under common control with
that manager, managing partner or management company, or (d) concurrent
with the sale or transfer to an assignee of at least 25,000 shares (subject to adjustment for any stock dividend, stock
split, subdivision, combination or other recapitalization of Southwest) of
Registrable Common then held by the Holder. 
No transfer of rights under this Agreement will be effective unless the
transferee of such rights executes and agrees to be bound by the terms of this
Agreement.  Any Holder making an
assignment in connection with the sale or transfer of only a portion of its
shares will retain its rights under this Agreement for the shares not sold or
transferred.  Nothing in this Agreement,
express or implied, is intended to confer upon any party, other than the parties
to this Agreement or their respective successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement. 
Notwithstanding any provision contained elsewhere in this Agreement,
upon the transfer of shares by any of the parties to this Agreement, no claims
or causes of action arising out of or related to this Agreement existing as of
the transfer date may be transferred to any respective heir, successor, assign
or permitted transferee, provided that the transfer of shares will not be
deemed a waiver by the transferring party of any claim or cause of action.  “Affiliate”
means any Person which controls, is controlled by or is under common control
with any other Person or Persons.  For
the purposes of this definition, “control” has the meaning specified as of the
date of this Agreement for that word in Rule 405 promulgated by the
Commission under the Securities Act.

 

11.10       Governing Law.  This Agreement is governed by and construed
under the laws of the State of Minnesota.

 

11.11       Counterparts.
This Agreement may be executed concurrently in two or more counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. 
Signatures delivered by facsimile will have the same legal force and
effect as original signatures.

 

Remainder of page intentionally blank.

Signatures on next page.

 

E-8

 

Signature Page for

Registration Rights Agreement

 

In witness of this Registration Rights Agreement,
Southwest and Investor have executed this instrument as of the date first
written above.

 

	
  SOUTHWEST CASINO CORPORATION 
  

  	
   

  	
  INVESTOR:

  

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  

 

	
  Its:

  	
   

  	
   

  	
  Print Name:

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