Document:

Exhibit 4.9

 

DIRECTOR
STOCK OPTION AGREEMENT

(NON-QUALIFIED
STOCK OPTION)

 

THIS DIRECTOR STOCK
OPTION AGREEMENT (the “Agreement”) is entered into and effective January 10,
2006 (the “Date of Grant”), by and between Southwest Casino Corporation (the “Company”)
and David H. Abramson (the “Optionee”).

 

A.                 The Company has
adopted its 2004 Stock Incentive Plan (the “Plan”) which authorizes the Board
of Directors of the Company, or a committee as provided for in the Plan (the
Board or this committee are referred to as the “Committee” in this Agreement),
to grant incentive stock options to directors of the Company (as defined in the
Plan).

 

B.                   The Company
desires to give the Optionee an inducement to acquire a proprietary interest in
the Company and an added incentive to advance the interests of the Company by
granting to the Optionee an option to purchase shares of common stock of the
Company under the Plan.

 

C.                   Terms stated
but not otherwise defined in this Agreement have the meanings assigned to those
terms in the Plan.

 

Accordingly, the parties
agree as follows:

 

1.                                      Grant of Option.

 

The Company hereby
grants to the Optionee the right, privilege, and option (the “Option”) to
purchase 75,000 shares (the “Option Shares”) of the Company’s common stock,
$.001 par value (the “Common Stock”), according to the terms and subject to the
conditions stated in this Agreement and as stated in the Plan. This Option is not
intended to be an “incentive stock option,” as that term is used in Section 422
of the Internal Revenue Code of 1986, as amended (the “Code”).

 

2.                                      Option Exercise Price.

 

The per share price to be
paid by Optionee upon exercise of this Option will be $0.65.

 

3.                                      Duration of Option and
Time of Exercise.

 

3.1                                 Initial Period of Exercisability. Subject to Sections 3.2 and 3.3 below,
this Option will become exercisable with respect to the Option Shares in 12
quarterly installments beginning on December 31, 2005 and continuing on
the last day of each fiscal quarter of the Company, as provided in the table
below. The table below states the initial dates of exercisability of each
installment and the number of Option Shares as to which this Option will become
exercisable on those dates:

 

	
  Initial Date of

  Exercisability

  	
   

  	
  Number of Option Shares

  Available for

  Exercise at each Date

  
	
  Mar. 31, June 30, Sept. 30, Dec. 31,
  2006

  	
   

  	
  6,250

  
	
  Mar. 31, June 30, Sept. 30, Dec. 31,
  2007

  	
   

  	
  6,250

  
	
  Mar. 31, June 30, Sept. 30, Dec. 31,
  2008

  	
   

  	
  6,250

  

 

The right to exercise
this Option is cumulative with respect to the Option Shares becoming exercisable
on the dates stated above; provided, however, that in no event will this Option
be

 

 

exercisable after, and
this Option will become void and expire as to all unexercised Option Shares at,
5:00 p.m. (Minnesota time) on January 9, 2016 (the “Time of Termination”).

 

3.2                                 Termination of Service.

 

(a)                                  Termination Due to Mandatory Retirement. If Optionee’s service with the Board of
Directors of the Company is terminated by reason of the Optionee’s mandatory
retirement in accordance with the policies of the Company and its Board of
Directors, this Option will continue to become exercisable and remain
exercisable as if the Optionee continued to serve as a Director of the Company
(but not after the Time of Termination).

 

(b)                                 Termination Due to Death or Disability. If Optionee’s service with the Board of
Directors of the Company is terminated by reason of the Optionee’s death or
Disability, this Option will become immediately exercisable in full as of the
date of death or Disability and remain exercisable for a period of 12 months
after such termination (but not after the Time of Termination).

 

(c)                                  Termination for Reasons Other Than Death,
Disability or Retirement. Except as provided in Section 3.3, if Optionee’s service with
the Board of Directors is terminated for any reason other than death,
Disability or mandatory retirement, this Option will remain exercisable to the
extent exercisable on the date of termination of Optionee’s service on the
Board of Directors and remain exercisable for a period of 90 days after such
termination.

 

3.3                                 Change in Control.

 

(a)                                  Impact of Change in Control. If a Change in Control of the Company
occurs whereby the acquiring entity or successor to the Company does not assume
this Option or replace it with a substantially equivalent incentive award,
then, as of the date of the Change of Control, this Option will vest as to all
shares and become immediately exercisable in full and will remain exercisable
until the Time of Termination, regardless of whether the Optionee remains in
the service of the Company. In addition, if a change in control occurs, the
Committee, in its sole discretion and without consent of the Optionee, may determine
that the Optionee will receive, with respect to some or all of the Option
Shares, cash in the amount of the excess of the Fair Market Value (as defined
in the Plan) of those Option Shares immediately before the effective date of
the Change in Control over the per share exercise price of this Option.

 

(b)                                 Limitation on Change in Control Payments. Notwithstanding anything in this Section 3.3
to the contrary, if, with respect to the Optionee, the acceleration of the
vesting of this Option as provided above (which acceleration could be deemed a “payment”
within the meaning of Section 280G(b)(2) of the Code), together with
any other payments that the Optionee has the right to receive from the Company
or any corporation which is a member of an “affiliated group” (as defined in Section 1504(a) of
the Code without regard to Section 1504(b) of the Code) of which the Company
is a member, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of
the Code), the payments to the Optionee stated herein will be reduced to the
largest amount that will result in no portion of the payments being subject to
the excise tax imposed by Section 4999 of the Code; provided, however,
that if the Optionee is subject to a separate agreement with the Company that
expressly addresses the potential

 

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application of Sections 280G or 4999 of the Code
(including, without limitation, that “payments” under such agreement or
otherwise will be reduced, that the Optionee will have the discretion to
determine which “payments” will be reduced, that such “payments” will not be
reduced or that such “payments” will be “grossed up” for tax purposes), then
this Section 3.3(b) will not apply, and any payments to the Optionee
under Section 3.3(a) of this Agreement will be treated as payments
arising under such separate agreement.

 

4.                                      Manner of Option Exercise.

 

4.1                                 Notice. Optionee may exercise this Option, in whole or
in part from time to time, subject to the conditions in the Plan and in
this Agreement, by delivery, in person, by facsimile or electronic transmission
(if confirmed) or through the mail, to the Company at its principal executive
office (Attention: Chief Financial Officer), of a written notice of exercise. This
notice must (a) be in a form substantially similar to the form attached
to this Agreement as Exhibit A, or such other form as is
satisfactory to the Committee, (b) identify this Option, (c) specify
the number of Option Shares with respect to which this Option is being
exercised, and (d) be signed by the person or persons so exercising this
Option. The notice must be accompanied by payment in full of the total purchase
price of the Option Shares purchased. If this Option is being exercised as
provided by the Plan and Section 3.2 above, by any person or persons other
than the Optionee, the notice must be accompanied by appropriate proof of right
of that person or persons to exercise this Option. As soon as practicable after
the effective exercise of this Option, the Optionee will be recorded on the
stock transfer books of the Company as the owner of the Option Shares purchased,
and the Company will deliver to the Optionee one or more duly issued stock
certificates evidencing ownership.

 

4.2                                 Payment. At the time of exercise of this Option, the
Optionee must pay the total purchase price of the Option Shares to be purchased
entirely in cash (including a check, bank draft or money order, payable to the
order of the Company); provided, however, that the Committee, in its sole
discretion, may allow such payment to be made, in whole or in part, by
tender of a promissory note (on terms acceptable to the Committee in its sole
discretion) or a Broker Exercise Notice or Previously Acquired Shares, or by a
combination of such methods. If Optionee is permitted to pay the total purchase
price of this Option in whole or in part with Previously Acquired Shares,
the value of those shares will equal their Fair Market Value on the date of
exercise, in whole or in part, of this Option.

 

5.                                      Rights of Optionee;
Transferability.

 

5.1                                 Rights as a Shareholder. The Optionee has no rights as a
shareholder with respect to the Option Shares issuable upon exercise of this
Option unless and until all conditions to the effective exercise of this Option
(including, without limitation, the conditions stated in Sections 4 and 6 of
this Agreement) have been satisfied and the Optionee has become the holder of
record of the Option Shares. No adjustment will be made for dividends or
distributions for which the record Date precedes the date the Optionee becomes
the holder of record of the Option Shares, except as may otherwise be
provided in the Plan or determined by the Committee in its sole discretion.

 

5.2                                 Restrictions on Transfer. Except under testamentary will or the
laws of descent and distribution or as otherwise expressly permitted by the
Plan, no right or interest of the Optionee in this Option before exercise may be
assigned or transferred, or subjected to any lien, during the lifetime of the
Optionee, either voluntarily or involuntarily, directly or indirectly, by

 

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operation of law or
otherwise. The Optionee will, however, be entitled to designate a beneficiary
to receive this Option upon Optionee’s death, and, in the event of the Optionee’s
death, exercise of this Option (to the extent permitted under Section 3.2(a) of
this Agreement) may be made by the Optionee’s legal representatives, heirs
and legatees.

 

5.3                                 Breach of Confidentiality, Assignment of
Inventions or Non-Compete Agreements. Notwithstanding anything in this Agreement or the
Plan to the contrary, if Optionee materially breaches the terms of any written
confidentiality, assignment of inventions or non-compete agreement entered into
with the Company or any Subsidiary, whether such breach occurs before or after
termination of the Optionee’s service to the Company, the Committee may immediately
terminate all rights of the Optionee under the Plan and this Agreement.

 

6.                                      Securities Law and Other
Restrictions.

 

Notwithstanding any other
provision of the Plan or this Agreement, the Optionee may not sell, assign,
transfer or otherwise dispose of, any Option Shares unless (a) there is in
effect with respect to the Option Shares a registration statement under the
Securities Act and any applicable state or foreign securities laws or an
exemption from such registration, and (b) there has been obtained any
other consent, approval or permit from any other regulatory body that the
Committee, in its sole discretion, deems necessary or advisable. The Company may condition
a sale or transfer by Optionee upon the receipt of any representations or
agreements from the parties involved, and the placement of any legends on
certificates representing Option Shares, as may be deemed necessary by the
Company in order to comply with such securities law or other restrictions.

 

7.                                      Withholding Taxes.

 

The Company is entitled
to (a) withhold and deduct from future amounts owed to Optionee, or make
other arrangements for the collection of, all legally required amounts
necessary to satisfy any federal, state or local withholding and employment-related
tax requirements attributable to this Option including, without limitation, the
grant or exercise of this Option or a disqualifying disposition of any Option
Shares, or (b) require the Optionee promptly to remit the amount of such
withholding to the Company before acting on the Optionee’s notice of exercise
of this Option. If the Company is unable to withhold such amounts, for whatever
reason, the Optionee agrees to pay to the Company an amount equal to the amount
the Company would otherwise be required to withhold under federal, state or
local law.

 

8.                                      Adjustments.

 

If any reorganization,
merger, consolidation, recapitalization, liquidation, reclassification, stock
dividend, stock split, combination of shares, rights offering, divestiture or
extraordinary dividend (including a spin-off), or any other similar change in
the corporate structure or shares of the Company occurs, the Committee (or, if
the Company is not the surviving corporation in any such transaction, the board
of directors of the surviving corporation), in order to prevent dilution or
enlargement of the rights of the Optionee, must make appropriate adjustment to
the number and kind of securities or other property (including cash) subject
to, and the exercise price of, this Option.

 

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9.                                      Subject to Plan.

 

This Option and the
Option Shares granted and issued under this Agreement have been granted and
issued under, and are subject to the terms of, the Plan. The terms of the Plan
are incorporated by reference in this Agreement in their entirety, and the
Optionee, by execution of this Agreement, acknowledges having received a copy
of the Plan. The provisions of this Agreement will be interpreted as to be
consistent with the Plan, and any ambiguities in this Agreement will be
interpreted by reference to the Plan. If any provision of this Agreement is
inconsistent with the terms of the Plan, and the Plan does not permit that
provision to vary from the terms of the Plan, the terms of the Plan will
prevail.

 

10.                               Miscellaneous.

 

10.1                           Binding Effect. This Agreement will be binding upon the
heirs, executors, administrators and successors of the parties to this
Agreement.

 

10.2                           Governing Law. This Agreement and all rights and
obligations under this Agreement will be construed in accordance with the Plan
and governed by the laws of the State of Minnesota, without regard to conflicts
of laws provisions. Any legal proceeding related to this Agreement will be
brought in an appropriate Minnesota court and the parties to this Agreement
consent to the exclusive jurisdiction of the court for this purpose.

 

10.3                           Entire Agreement. This Agreement and the Plan state the
entire agreement and understanding of the parties to this Agreement with
respect to the grant and exercise of this Option and the administration of the
Plan and supersede all prior agreements, arrangements, plans and understandings
relating to the grant and exercise of this Option and the administration of the
Plan.

 

10.4                           Amendment and Waiver. Other than as provided in the Plan,
this Agreement may be amended, waived, modified or canceled only by a
written instrument executed by the parties to this Agreement or, in the case of
a waiver, by the party waiving compliance.

 

The parties to this
Agreement have executed this Agreement effective the day and year first above
written.

 

	
   

  	
  SOUTHWEST CASINO CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Thomas E. Fox, President

  
	
   

  	
   

  
	
  By execution of this Agreement,

  	
  OPTIONEE

  
	
  the Optionee acknowledges having

  	
   

  
	
  received a copy of the Plan.

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
  David H. Abramson

  
	
   

  	
  (Name and Address)

  
	
   

  	
  Parkdale Plaza

  
	
   

  	
  1660 South Highway 100, Suite 500

  
	
   

  	
  St. Louis Park, MN 55416

  

 

5Exhibit 10.35

 

INDEMNIFICATION AGREEMENT

 

Southwest
Casino Corporation (“Company”) and                       (“Indemnitee”) enter into this Indemnification Agreement (the
“Agreement”) effective December 7,
2005.

 

WHEREAS,
prudent persons may be reluctant to serve as directors or officers of the
Company unless such persons are provided with adequate protection through
insurance and/or adequate indemnification against inordinate risks of claims
and actions against them arising out of their service to and activities on
behalf of the Company; and

 

WHEREAS,
the Board of Directors of the Company has determined that the inability to
attract and retain such persons is detrimental to the best interests of the
Company; and

 

WHEREAS,
it is reasonable, prudent and necessary for the Company to obligate itself by
contract to indemnify such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the Company free
from undue concern that they will not be so indemnified; and

 

WHEREAS,
Indemnitee is willing to serve, continue to serve and to take on additional
service for or on behalf of the Company on the condition that Indemnitee be so
indemnified;

 

NOW,
THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:

 

ARTICLE I

DEFINITIONS

 

For
purposes of this Agreement the following terms shall have the meaning given
here:

 

1.1                                 “Board”
shall mean the Board of Directors of the Company.

 

1.2                                 “Change
of Control” shall mean any of the following events:

 

(a)                                  Unless
approved by the affirmative vote of at least two-thirds (2/3) of those members
of the Board who are in office immediately prior to the event(s) and who are
not employees of the Company:

 

(1)                                  the
merger or consolidation of the Company with, or the sale of all or
substantially all of the assets of the Company to, any person or entity or
group of associated persons or entities; or

 

(2)                                  the
direct or indirect beneficial ownership in the aggregate of securities of the
Company representing thirty-three and one-third percent (33-1/3%) or more of
the total combined voting power of the Company’s then issued and outstanding
securities by any person or entity, or group of associated persons or entities
acting in concert, not affiliated (within the meaning of the Securities Act of
1933) with the Company as of the date of this Agreement; or

 

(3)                                  the
stockholders of the Company approve any plan or proposal for the liquidation or
dissolution of the Company.

 

(b)                                 A
change in the composition of the Board at any time during any consecutive
twenty-four (24) month period such that the “Continuity Directors”
cease for any reason to constitute at least a seventy percent (70%) majority of
the Board. For purposes of this clause (b), “Continuity Directors”
means those members of the Board who either:

 

1

 

(1)                                  were
directors at the beginning of such consecutive twenty-four (24) month period;
or

 

(2)                                  were
elected by, or on the nomination or recommendation of, at least a majority of
the then-existing Board.

 

1.3                                 “Corporate
Status” describes the status of a person who is or was a director, officer,
employee, agent or fiduciary of the Company or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
which such person is or was serving at the express written request of the
Company.

 

1.4                                 “Disinterested
Director” means a director of the Company who is not and was not a party to
the Proceeding in respect of which indemnification is sought by Indemnitee.

 

1.5                                 “Enterprise”
shall mean the Company and any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise of which Indemnitee is or was
serving at the express written request of the Company as a director, officer,
employee, agent or fiduciary.

 

1.6                                 “Expenses”
shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees, and all other disbursements or expenses of the types customarily incurred
in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, or being or preparing to be a witness in a Proceeding.

 

1.7                                 “Good
Faith” shall mean Indemnitee having acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal Proceeding, having had no
reasonable cause to believe Indemnitee’s conduct was unlawful.

 

1.8                                 “Independent
Counsel” means a law firm, or a member of a law firm, that is experienced
in matters of corporation law and neither presently is, nor in the past five
years has been, retained to represent:  (i) the
Company or Indemnitee in any matter material to either such party, or (ii) any
other party to the Proceeding giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Company or Indemnitee in an action to
determine Indemnitee’s rights under this Agreement.

 

1.9                                 “Proceeding”
includes any action, suit, arbitration, alternate dispute resolution mechanism,
investigation, administrative hearing or any other actual, threatened or
completed proceeding whether civil, criminal, administrative or investigative, other
than one initiated by Indemnitee. For purposes of the foregoing sentence, a “Proceeding” shall not be deemed to have been initiated by
Indemnitee where Indemnitee seeks pursuant to Article VIII of this
Agreement to enforce Indemnitee’s rights under this Agreement.

 

ARTICLE II

TERM OF AGREEMENT

 

This
Agreement shall continue until and terminate upon the later of:  (a) 10 years after the date that
Indemnitee shall have ceased to serve as a director, officer, employee, agent
or fiduciary of the Company or of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise which Indemnitee
served at the express written request of the Company; or (b) the final
termination of all pending Proceedings in respect of which Indemnitee is
granted rights of indemnification or advancement of expenses hereunder and of
any proceeding commenced by Indemnitee pursuant to Article VIII of this
Agreement relating thereto.

 

2

 

ARTICLE III

SERVICES BY INDEMNITEE, NOTICE OF PROCEEDINGS

 

3.1                                 Services.
Indemnitee agrees to serve as a director and/or an officer of the Company. Indemnitee
may at any time and for any reason resign from such position (subject to
any other contractual obligation or any obligation imposed by operation of
law).

 

3.2                                 Notice
of Proceeding. Indemnitee agrees to notify the Company promptly, in
writing, upon being served with any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding or matter
which may be subject to indemnification or advancement of Expenses covered
hereunder.

 

ARTICLE IV

INDEMNIFICATION

 

4.1                                 In
General. In connection with any Proceeding, the Company shall indemnify,
and advance Expenses to Indemnitee as provided in this Agreement and to the
fullest extent permitted by applicable law in effect on the date hereof and to
such greater extent as applicable law may thereafter from time to time
permit. This indemnification obligation includes, without limitation,
indemnification in the case of any Proceeding arising from or related to a
director’s alleged failure to deliberate, take any action or make any decision
in connection with activities of the Company that are regulated by the NIGC
before such time as the director is approved to serve on the Board of Directors
of the Company by the NIGC.

 

4.2                                 Proceedings
Other Than Proceedings by or in the Right of the Company. Indemnitee shall
be entitled to the rights of indemnification provided in this Section 4.2
if, by reason of Indemnitee’s Corporate Status, Indemnitee is, or is threatened
to be made, a party to any Proceeding, other than a Proceeding by or in the
right of the Company. Indemnitee shall be indemnified against Expenses,
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with
such Proceeding or any claim, issue or matter therein, if Indemnitee acted in
Good Faith.

 

4.3                                 Proceedings
by or in the Right of the Company. Indemnitee shall be entitled to the
rights of indemnification provided in this Section 4.3 if, by reason of
Indemnitee’s Corporate Status, Indemnitee is, or is threatened to be made, a
party to any Proceeding brought by or in the right of the Company to procure a
judgment in its favor. Indemnitee shall be indemnified against Expenses,
judgments, penalties, and amounts paid in settlement, actually and reasonably
incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding
if Indemnitee acted in Good Faith. Notwithstanding the foregoing, no such
indemnification shall be made in respect of any claim, issue or matter in such
Proceeding as to which Indemnitee shall have been adjudged to be liable to the
Company if applicable law prohibits such indemnification; provided,
however, that, if applicable law so permits,
indemnification shall nevertheless be made by the Company in such event if and
only to the extent that the court in which such Proceeding shall have been
brought or is pending, or other court of competent jurisdiction shall
determine.

 

4.4                                 Indemnification
of a Party Who Is Wholly or Partly Successful. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of
Indemnitee’s Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, Indemnitee shall be indemnified to the maximum
extent permitted by law, against all Expenses, judgments, penalties, fines, and
amounts paid in settlement, actually and reasonably incurred by Indemnitee or
on Indemnitee’s behalf in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as
to one or more but less than all claims, issues or matters in such Proceeding,
the Company shall indemnify Indemnitee to the maximum extent permitted by law,
against

 

3

 

all Expenses, judgments,
penalties, fines, and amounts paid in settlement, actually and reasonably
incurred by Indemnitee or on Indemnitee’s behalf in connection with each
successfully resolved claim, issue or matter. For purposes of this Section 4.4
and without limitation, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter, so long as there has been
no finding (either adjudicated or pursuant to Article VI) that Indemnitee
did not act in Good Faith.

 

4.5                                 Indemnification
for Expenses of a Witness. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of Indemnitee’s
Corporate Status, a witness in any Proceeding, Indemnitee shall be indemnified
against all Expenses actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection therewith.

 

ARTICLE V

ADVANCEMENT OF EXPENSES

 

Notwithstanding
any provision to the contrary in Article VI, the Company shall advance all
reasonable Expenses which, by reason of Indemnitee’s Corporate Status, were
incurred by or on behalf of Indemnitee in connection with any Proceeding,
within twenty days after the receipt by the Company of a statement or
statements from Indemnitee requesting such advance or advances, whether prior
to or after final disposition of such Proceeding. Such statement or statements
shall reasonably evidence the Expenses incurred by Indemnitee and shall include
or be preceded or accompanied by an undertaking by or on behalf of Indemnitee
to repay any Expenses if it shall ultimately be determined that Indemnitee is
not entitled to be indemnified against such Expenses. Any advance and
undertakings to repay pursuant to this Article V shall be unsecured and
interest free.

 

ARTICLE VI

PROCEDURES FOR DETERMINATION OF

ENTITLEMENT TO INDEMNIFICATION

 

6.1                                 Initial
Request. To obtain indemnification under this Agreement, Indemnitee shall
submit to the Company a written request, including therein or therewith such
documentation and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Company shall promptly advise
the Board in writing that Indemnitee has requested indemnification.

 

6.2                                 Method
of Determination. A determination (if required by applicable law) with
respect to Indemnitee’s entitlement to indemnification shall be made as
follows:

 

(a)                                  if
a Change in Control has occurred, unless Indemnitee shall request in writing
that such determination be made in accordance with clause (b) of this Section 6.2,
the determination shall be made by Independent Counsel in a written opinion to
the Board, a copy of which shall be delivered to Indemnitee;

 

(b)                                 if
a Change of Control has not occurred, and subject to Section 6.5, the
determination shall be made by the Board by a majority vote of a quorum
consisting of Disinterested Directors. In the event that a quorum of the Board
consisting of Disinterested Directors is not obtainable or, even if obtainable,
such quorum of Disinterested Directors so directs, the determination shall be
made by Independent Counsel in a written opinion to the Board, a copy of which
shall be delivered to Indemnitee.

 

6.3                                 Selection,
Payment, Discharge, of Independent Counsel. In the event the determination
of entitlement to indemnification is to be made by Independent Counsel pursuant
to Section 6.2 of this Agreement, the Independent Counsel shall be
selected, paid, and discharged in the following manner:

 

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(a)                                  If
a Change of Control has not occurred, the Independent Counsel shall be selected
by the Board, and the Company shall give written notice to Indemnitee advising
Indemnitee of the identity of the Independent Counsel so selected.

 

(b)                                 If
a Change of Control has occurred, the Independent Counsel shall be selected by
Indemnitee  (unless Indemnitee shall
request that such selection be made by the Board, in which event clause (a) of
this section shall apply), and Indemnitee shall give written notice to the
Company advising it of the identity of the Independent Counsel so selected.

 

(c)                                  Following
the initial selection described in clauses (a) and (b) of this Section 6.3,
Indemnitee or the Company, as the case may be, may, within 7 days after
such written notice of selection has been given, deliver to the other party a
written objection to such selection. Such objection may be asserted only
on the ground that the Independent Counsel so selected does not meet the
requirements of “Independent Counsel” as defined
in Section 1.9 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper and timely
objection, the person so selected shall act as Independent Counsel. If such written
objection is made, the Independent Counsel so selected may not serve as
Independent Counsel unless and until a court has determined that such objection
is without merit.

 

(d)                                 Either
the Company or Indemnitee may petition the District Court of the State of
Minnesota or other court of competent jurisdiction if the parties have been
unable to agree on the selection of Independent Counsel within 20 days after
submission by Indemnitee of a written request for indemnification pursuant to Section 6.1
of this Agreement. Such petition may request a determination whether an
objection to the party’s selection is without merit and/or seek the appointment
as Independent Counsel of a person selected by the Court or by such other
person as the Court shall designate. A person so appointed shall act as
Independent Counsel under Section 6.2 of this Agreement.

 

(e)                                  The
Company shall pay any and all reasonable fees and expenses of Independent
Counsel incurred by such Independent Counsel in connection with acting pursuant
to this Agreement, and the Company shall pay all reasonable fees and expenses
incident to the procedures of this Section 6.3, regardless of the manner
in which such Independent Counsel was selected or appointed.

 

(f)                                    Upon
the due commencement of any judicial proceeding or arbitration pursuant to Section 8.1(c) of
this Agreement, Independent Counsel shall be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).

 

6.4                                 Cooperation.
Indemnitee shall cooperate with the person, persons or entity making the
determination with respect to Indemnitee’s entitlement to indemnification under
this Agreement, including providing to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or expenses (including attorneys’ fees and disbursements) incurred by
Indemnitee in so cooperating with the person, persons or entity making such
determination shall be borne by the Company (irrespective of the determination
as to Indemnitee’s entitlement to indemnification) and the Company hereby
indemnifies and agrees to hold Indemnitee harmless therefrom.

 

6.5                                 Payment.
If it is determined that Indemnitee is entitled to indemnification, payment
to Indemnitee shall be made within ten (10) days after such determination.

 

5

 

ARTICLE VII

PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS

 

7.1                                 Burden
of Proof. In making a determination with respect to entitlement to
indemnification hereunder, the person or persons or entity making such
determination shall presume that Indemnitee is entitled to indemnification
under this Agreement if Indemnitee has submitted a request for indemnification
in accordance with Section 6.1 of this Agreement, and the Company shall
have the burden of proof to overcome that presumption in connection with the
making by any person, persons or entity of any determination contrary to that
presumption.

 

7.2                                 Effect
of Other Proceedings. The termination of any Proceeding or of any claim,
issue or matter therein, by judgment, order, settlement or conviction, or upon
a plea of nolo contendere or its equivalent, shall not (except as otherwise
expressly provided in this Agreement) of itself adversely affect the right of
Indemnitee to indemnification or create a presumption that Indemnitee did not act
in Good Faith.

 

7.3                                 Reliance
as Safe Harbor. For purposes of any determination of Good Faith, Indemnitee
shall be deemed to have acted in Good Faith if Indemnitee’s action is based on
the records or books of account of the Company, including financial statements,
or on information supplied to Indemnitee by the officers of the Enterprise in
the course of their duties, or on the advice of legal counsel for the
Enterprise or on information or records given or reports made to the Enterprise
by an independent certified public accountant or by an appraiser or other
expert selected with reasonable care by the Enterprise. The provisions of this Section 7.3
shall not be deemed to be exclusive or to limit in any way the other
circumstances in which the Indemnitee may be deemed to have met the
applicable standard of conduct set forth in this Agreement.

 

7.4                                 Actions
of Others. The knowledge and/or actions, or failure to act, of any
director, officer, agent or employee of the Enterprise shall not be imputed to
Indemnitee for purposes of determining the right to indemnification under this
Agreement.

 

ARTICLE VIII

REMEDIES OF INDEMNITEE

 

8.1                                 Application.
This Article VIII shall apply in the event of a Dispute. For purposes
of this Article, “Dispute” shall mean any of the
following events:

 

(a)                                  a
determination is made pursuant to Article VI of this Agreement that
Indemnitee is not entitled to indemnification under this Agreement;

 

(b)                                 advancement
of Expenses is not timely made pursuant to Article V of this Agreement;

 

(c)                                  the
determination of entitlement to be made pursuant to Section 6.2 of this
Agreement has not been made within 90 days after receipt by the Company of the
request for indemnification;

 

(d)                                 payment
of indemnification is not made pursuant to Section 4.5 of this Agreement
within ten (10) days after receipt by the Company of a written request
therefor; or

 

(e)                                  payment
of indemnification is not made within ten (10) days after a determination
has been made that Indemnitee is entitled to indemnification or such determination
is deemed to have been made pursuant to Article VI of this Agreement.

 

8.2                                 Adjudication.
In the event of a Dispute, Indemnitee shall be entitled to an adjudication
in an appropriate court of the State of Minnesota, or in any other court of
competent jurisdiction, or Indemnitee’s entitlement to such indemnification or
advancement of Expenses. Alternatively,

 

6

 

Indemnitee, at Indemnitee’s
option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the rules of the American Arbitration Association. Indemnitee
shall commence such proceeding seeking an adjudication or an award in
arbitration within 180 days following the date on which Indemnitee first has
the right to commence such proceeding pursuant to this Section 8.2. The
Company shall not oppose Indemnitee’s right to seek any such adjudication or
award in arbitration.

 

8.3                                 De
Novo Review. In the event that a determination shall have been made
pursuant to Article VI of this Agreement that Indemnitee is not entitled
to indemnification, any judicial proceeding or arbitration commenced pursuant
to this Article VIII shall be conducted in all respects as a de novo
trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by
reason of that adverse determination. In any such proceeding or arbitration,
the Company shall have the burden of proving that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.

 

8.4                                 Company
Bound. If a determination shall have been made or deemed to have been made
pursuant to Article VI of this Agreement that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration absent (i) a misstatement by Indemnitee
of a material fact, or an omission of a material fact necessary to make
Indemnitee’s statement not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification
under applicable law.

 

8.5                                 Procedures
Valid. The Company shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Article VIII that the
procedures and presumptions of this Agreement are not valid, binding and enforceable
and shall stipulate in any such court or before any such arbitrator that the
Company is bound by all the provisions of this Agreement.

 

8.6                                 Expenses
of Adjudication. In the event that Indemnitee, pursuant to this Article VIII,
seeks a judicial adjudication of or an award in arbitration to enforce
Indemnitee’s rights under, or to recover damages for breach of, this Agreement,
Indemnitee shall be entitled to recover from the Company, and shall be
indemnified by the Company against, any and all expenses (of the types
described in the definition of Expenses in Section 1.7 of this Agreement)
actually and reasonably incurred by Indemnitee in such adjudication or
arbitration, but only if Indemnitee prevails therein. If it shall be determined
in such adjudication or arbitration that Indemnitee is entitled to receive part but
not all of the indemnification or advancement of expenses sought, the expenses
incurred by Indemnitee in connection with such adjudication or arbitration
shall be appropriately prorated.

 

ARTICLE IX

NON-EXCLUSIVITY, INSURANCE, SUBROGATION

 

9.1                                 Non-exclusivity. The rights of indemnification and to
receive advancement of Expenses as provided by this Agreement shall not be
deemed exclusive of any other rights to which Indemnitee may at any time
be entitled under applicable law, the Certificate of Incorporation, the By-Laws,
any agreement, a vote of stockholders or a resolution of directors, or
otherwise. No amendment, alteration, rescission or replacement of this
Agreement or any provision hereof shall be effective as to Indemnitee with
respect to any action taken or omitted by such Indemnitee in Indemnitee’s
Corporate Status prior to such amendment, alteration, rescission or
replacement.

 

9.2                                 Insurance.
The Company may maintain an insurance policy or policies against
liability arising out of this Agreement or otherwise. The obligations of the
Company under this Agreement are independent of the availability or lack of
availability of insurance coverage with regard to an indemnified claim. If insurance
coverage is available, it is the responsibility of the Company, and not the
Indemnitee, to pursue claims under such coverage.

 

9.3                                 Subrogation.
In the event of any payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute

 

7

 

all papers required and
take all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Company to bring suit to enforce such
rights.

 

9.4                                 No
Duplicative Payment. The Company shall not be liable under this Agreement
to make any payment of amounts otherwise indemnifiable hereunder if and to the
extent that Indemnitee has otherwise actually received such payment under any
insurance policy, contract, agreement or otherwise.

 

ARTICLE X

GENERAL PROVISIONS

 

10.1                           Successors and Assigns. This Agreement shall be binding upon
the Company and its successors and assigns and shall inure to the benefit of
Indemnitee and Indemnitee’s heirs, executors and administrators.

 

10.2                           Severability.
If any provision or provisions of this Agreement shall be held to be
invalid, illegal or unenforceable for any reason whatsoever:

 

(a)                                  the
validity, legality and enforceability of the remaining provisions of this
Agreement (including without limitation, each portion of any Section of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby; and

 

(b)                                 to
the fullest extent possible, the provisions of this Agreement (including,
without limitation, each portion of any Section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable,
that is not itself invalid, illegal or unenforceable) shall be construed so as
to give effect to the intent manifested by the provision held invalid, illegal
or unenforceable.

 

10.3                           No
Adequate Remedy. The parties declare that it is impossible to measure in
money the damages that will accrue to either party by reason of a failure to
perform any of the obligations under this Agreement. Therefore, if either
party shall institute any action or proceeding to enforce the provisions
hereof, such party against whom such action or proceeding is brought hereby
waives the claim or defense that such party has an adequate remedy at law, and
such party shall not urge in any such action or proceeding the claim or defense
that the other party has an adequate remedy at law.

 

10.4                           Identical
Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute one and the same Agreement. Only one
such counterpart signed by the party against whom enforceability is sought
needs to be produced to evidence the existence of this Agreement.

 

10.5                           Headings.
The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.

 

10.6                           Modification
and Waiver. No supplement, modification or amendment of this Agreement
shall be binding unless executed in writing by both of the parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions hereof (whether or not similar) nor
shall such waiver constitute a continuing waiver.

 

10.7                           Notices.
All notices, requests, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given if (i) delivered by
hand and receipted for by the party to whom said notice or other communication
shall have been directed, or (ii) mailed by certified or registered mail
with postage prepaid, on the third business day after the date on which it is
so mailed:

 

If to
Indemnitee, to:                                        As
shown with Indemnitee’s Signature below.

 

8

 

	
  If to
  the Company, to:

  	
   

  	
  Southwest Casino
  and Hotel Corp.

  
	
   

  	
   

  	
  2001 Killebrew
  Drive, Suite 350

  
	
   

  	
   

  	
  Minneapolis, Minnesota 55425

  

 

or to such other address
as may have been furnished to Indemnitee by the Company or to the Company
by Indemnitee, as the case may be.

 

10.8                           Entire
Agreement. This Agreement constitutes the entire agreement and
understanding between the parties hereto in reference to all the matters herein
agreed upon. This Agreement replaces in full all prior indemnification
agreements or understandings of the parties hereto, and any and all such prior
agreements or understandings are hereby rescinded by mutual agreement.

 

IN
WITNESS WHEREOF, the parties hereto have executed this
Agreement on the dates indicated below to be effective as of December       ,
2005.

 

	
  SOUTHWEST
  CASINO CORPORATION

  
	
   

  
	
   

  
	
  By

  	
   

  	
   

  
	
  Thomas E. Fox, President

  
	
   

  
	
   

  
	
  INDEMNITEE

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  
	
  Mailing Address
  of Indemnitee:

  

 

 

9

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