Exhibit 10.9


 


 


PERSONAL GUARANTY


 


BY


 










 


TO


 


CROWN BANK


 


 


Dated:  October 20, 2005


 


 


This instrument was drafted by:


 


David E. Moran, Esq.

WINTHROP & WEINSTINE, P.A.

Suite 3500

225 South Sixth Street

Minneapolis, Minnesota 55402

(612) 604-6400


 





















 


PERSONAL GUARANTY


 


In consideration of and in order to induce Crown Bank, a Minnesota
state banking corporation, with its banking house located in Minneapolis,
Minnesota (the “Lender”), to extend financial accommodations to Southwest
Casino and Hotel Corp., a Minnesota corporation, (the “Borrower”), pursuant to
that certain Revolving Credit and Term Loan Agreement of even date herewith by
and between the Lender and the Borrower (the “Credit Agreement”), and as
evidenced by the Notes (as defined in the Credit Agreement) the undersigned
(the “Guarantor”) hereby:


 


1.             Unconditionally and
absolutely guarantees to the Lender:


 


a.             the full
and prompt payment, when due, whether at the maturity dates specified therein
or theretofore upon acceleration of maturity pursuant to the provisions
thereof, of principal, accrued interest and late charges, if any, on the Notes,
and any and all renewals thereof including notes taken in substitution
therefor; and


 


b.             the
payment and performance by the Borrower of all of its obligations under and
pursuant to the Notes, the Credit Agreement, the other Loan Documents and any
and all documents related thereto;


 


(the Notes, the Credit Agreement, the other Loan Documents and such
other liability, indebtedness and obligations are herein collectively referred
to as the “Obligations”); together with the full and prompt payment of any and
all costs and expenses of and incidental to the collection of the Obligations
for the enforcement of this Guaranty, including, without limitation, reasonable
attorneys’ fees.  All capitalized terms
not otherwise defined herein shall have the meaning assigned thereto in the
Credit Agreement.


 


2.             Agrees that the
Lender may demand payment from the Guarantor of any installment (or portion
thereof) of principal or interest on either or both of the Notes, when due and
unpaid, and the Guarantor shall immediately pay the same to the Lender, and the
Lender may demand payment or performance of any or all of the other
Obligations, when such payment or performance is due or required (subject to
any applicable grace period), and the Guarantor shall immediately pay or
perform the same, whether or not the Lender has (i) declared an Event of
Default (as defined in the Credit Agreement), or (ii) accelerated payment
of either or both of the Notes, or (iii) commenced repossession of, or
foreclosure of any security interest, mortgage or other lien in, any or all of
the collateral securing either or both of the Notes, or (iv) otherwise
exercised its rights and remedies hereunder or under either or both of the
Notes, the documents related thereto or applicable law.


 


3.             Waives
(i) presentment, demand, notice of nonpayment, protest and notice of
protest and dishonor on the Obligations; (ii) notice of acceptance of this
Guaranty by the Lender; and (iii) notice of the creation or incurrence of
the Obligations by the Borrower.


 


4.             Agrees that the
Lender may from time to time, without notice to the Guarantor, which notice is
hereby waived by the Guarantor, extend, modify, renew or compromise the Obligations,


 





















 


in whole or in part, without releasing, extinguishing or affecting in
any manner whatsoever the liability of the Guarantor hereunder, the foregoing
acts being hereby consented to by the Guarantor.


 


5.             Agrees that the
Lender shall not be required to first resort for payment to the Borrower or any
other person, corporation or entity, or their properties or estates, or any
other right or remedy whatsoever, prior to enforcing this Guaranty.


 


6.             Agrees that this
Guaranty shall be construed as a continuing, absolute, and unconditional
guaranty without regard to (i) the validity, regularity or enforceability
of the Obligations or the disaffirmance thereof in any insolvency or bankruptcy
proceeding relating to the Borrower, or (ii) any event or any conduct or
action of the Borrower or the Lender or any other party which might otherwise
constitute a legal or equitable discharge of a surety or guarantor but for this
provision.


 


7.             Agrees that this
Guaranty shall remain in full force and effect and be binding upon the
Guarantor until the Obligations are paid in full.


 


8.             Agrees that the
Lender is expressly authorized to forward or deliver any or all collateral and
security which may at any time be placed with it by the Borrower, the Guarantor
or any other person, directly to the Borrower for collection and remittance or
for credit, or to collect the same in any other manner and to renew, extend,
compromise, exchange, release, surrender or modify the installments of, any or
all of such collateral and security with or without consideration and without
notice to the Guarantor and without in any manner affecting the absolute
liability of the Guarantor hereunder; and that the liability of the Guarantor
hereunder shall not be affected or impaired by any failure, neglect or omission
on the part of the Lender to realize upon the Obligations, or upon any
collateral or security therefor, nor by the taking by the Lender of any other
guaranty or guaranties to secure the Obligations or any other indebtedness of
the Borrower to the Lender, nor by the taking by the Lender of collateral or
security of any kind nor by any act or failure to act whatsoever which, but for
this provision, might or could in law or in equity act to release or reduce the
Guarantor’s liability hereunder.


 


9.             Waives any right that
the Guarantor may have to collect or seek to collect from the Borrower the
claim, if any, by subrogation or otherwise, acquired by the Guarantor through
payment of any part or all of the Obligations until the Obligations have been
paid in full.


 


10.           Agrees that the
liability of the Guarantor hereunder shall not be affected or impaired by the
existence or creation from time to time, with or without notice to the
Guarantor, which notice is hereby waived, of indebtedness from the Borrower to
the Lender in addition to the indebtedness evidenced by the Notes; the creation
or existence of such additional indebtedness being hereby consented to by the
Guarantor.


 


11.           Agrees that the
possession of this instrument of guaranty by the Lender shall be conclusive
evidence of due execution and delivery hereof by the Guarantor.


 


12.           Agrees that this
Guaranty shall be binding upon the legal representatives, successors and
assigns of the Guarantor, and shall inure to the benefit of the Lender and its
successors, assigns and legal representatives; that notwithstanding the
foregoing, the Guarantor shall not have the 


 


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right to assign or otherwise transfer his rights and obligations under
this Guaranty to any third party without the prior written consent of the
Lender; and that any such assignment or transfer shall not release or affect
the liability of the Guarantor hereunder in any manner whatsoever.


 


13.           Agrees that the
Guarantor may be joined in any action or proceeding commenced against the
Borrower in connection with or based upon the Obligations and recovery may be
had against the Guarantor in any such action or proceeding or in any
independent action or proceeding against the Guarantor should the Borrower fail
to duly and punctually pay any of the principal of or interest on the
Obligations without any requirement that the Lender first assert, prosecute or
exhaust any remedy or claim against the Borrower.


 


14.           Agrees that upon the
occurrence at any time of an Event of Default, the Lender shall have the right
to set off any and all amounts due hereunder by the Guarantor to the Lender
against any indebtedness or obligation of the Lender to the Guarantor.


 


15.           Agrees that the
Guarantor shall be liable to the Lender for any deficiency remaining after
foreclosure of any mortgage in real estate or any security interest in personal
property granted by the Borrower, the Guarantor or any third party to the
Lender to secure repayment of the Obligations and the subsequent sale by the
Lender of the property subject thereto to a third party (whether at a
foreclosure sale or at a sale thereafter by the Lender in the event the Lender
purchases said property at the foreclosure sale) notwithstanding any provision of
applicable law which may prevent the Lender from obtaining a deficiency
judgment against, or otherwise collecting a deficiency from, the Borrower
including, without limitation, Minnesota Statutes Section 582.30.


 


16.           Agrees that this
Guaranty shall be deemed a contract made under and pursuant to the laws of the
State of Minnesota and shall be governed by and construed under the laws of
such state without giving effect to the choice of law provisions thereof; and
that, wherever possible, each provision of this Guaranty shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Guaranty shall be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity without invalidating the remainder of such provision or the
remaining provisions of the Guaranty.


 


17.           Agrees that no failure
on the part of the Lender to exercise, and no delay in exercising, any right or
remedy hereunder shall operate as or constitute a waiver thereof; nor shall any
single or partial exercise of any right or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right or remedy
granted hereby or by any related document or by law.


 


18.           Waives any and all
claims against the Lender and defenses to performance and payment hereunder
relating in any way, directly or indirectly, to the performance of the Lender’s
obligations or exercise of any of its rights under the Notes and the documents
related thereto.


 


19.           Warrants and represents
to the Lender as follows:


 


a.             Enforceability.  This Guaranty
constitutes the legal, valid and binding obligation of the Guarantor
enforceable in accordance with its terms (subject, as to enforceability, to


 


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limitations resulting from bankruptcy, insolvency or
other similar laws affecting creditors’ rights generally).


 


b.             Litigation.  There is no action,
suit or proceeding pending or, to the knowledge of the Guarantor, threatened
against or affecting the Guarantor which, if adversely determined, would have a
Material Adverse Effect (as defined in the Credit Agreement) on the Guarantor,
or which would question the validity of this Guaranty or any instrument,
document or other agreement related hereto or required hereby, or impair the
ability of the Guarantor to perform his obligations hereunder or thereunder.


 


c.             Default.  The Guarantor is not in
default of a material provision under any material agreement, instrument,
decree or order to which he is a party or by which he or his property is bound
or affected.


 


d.             Consents.  To the Guarantor’s
knowledge, no consent, approval, order or authorization of, or registration,
declaration or filing with, or notice to, any governmental authority or any
third party is required in connection with the execution and delivery of this
Guaranty or any of the agreements or instruments herein mentioned to which the
Guarantor is a party or the carrying out or performance of any of the
transactions required or contemplated hereby or thereby or, if required, such
consent, approval, order or authorization has been obtained or such
registration, declaration or filing has been accomplished or such notice has
been given prior to the date hereof.


 


e.             Taxes.  The Guarantor has filed all
tax returns required to be filed and has paid all taxes shown thereon to be
due, including interest and penalties, which are not being contested in good
faith and by appropriate proceedings and has no information or knowledge of any
objections to or claims for additional taxes in respect of federal income or
excess profits tax returns for prior years.


 


20.           Agrees that the
liability of the Guarantor and any other guarantor of the Obligations shall be
joint and several.  The Lender
acknowledges that certain of the guarantors have guarantied only the Term Note
and interest and costs and expenses related thereto.  Nothing in this Paragraph 20 shall be
construed to extend the guaranty of such guarantors to include the Revolving
Note or interest or costs and expenses related thereto.


 


21.           Agrees to deliver to
the Lender financial information and related documents as set forth in
Section 5.1 of the Credit Agreement with respect to the Guarantor.


 


22.           Agrees that (i) the
Guarantor will indirectly benefit by and from the making of the loans by the
Lender to the Borrower evidenced by the Notes; (ii) the Guarantor has
received legal and adequate consideration for the execution of this Guaranty
and has executed and delivered this Guaranty to the Lender in good faith in
exchange for reasonably equivalent value (including, without limitation,
receiving warrants issued by the Borrower in consideration and exchange for the
execution of this Guaranty); (iii) the Guarantor is not presently
insolvent and will not be rendered insolvent by virtue of the execution and
delivery of this Guaranty; (iv) the Guarantor has not executed or
delivered this Guaranty with actual intent to hinder, delay or defraud the


 


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Guarantor’s creditors; and (v) the Lender has agreed to make such
loans in reliance upon this Guaranty.


 


23.           Agrees that if, at any
time, all or any part of any payment previously applied by the Lender to any of
the Obligations must be returned by the Lender for any reason, whether by court
order, administrative order or settlement, the Guarantor shall remain liable
for the full amount returned as if said amount had never been received by the
Lender, notwithstanding any term of this Guaranty or the cancellation or return
of any note or other agreement evidencing the Obligations.


 


24.           Irrevocably submits to
the jurisdiction of any Minnesota state court or federal court over any action
or proceeding arising out of or relating to this Guaranty, the Notes and any
instrument, agreement or document related thereto; agrees that all claims in
respect of such action or proceeding may be heard and determined in such
Minnesota state or federal court; irrevocably waives, to the fullest extent he
may effectively do so, the defense of an inconvenient forum to the maintenance
of such action or proceeding; irrevocably consents to the service of copies of
the summons and complaint and any other process which may be served in any such
action or proceeding by the mailing by United States certified mail, return
receipt requested, of copies of such process to the Guarantor’s last known
address; and agrees that judgment final by appeal, or expiration of time to
appeal without an appeal being taken, in any such action or proceeding shall be
conclusive and may be enforced in any other jurisdictions by suit on the
judgment or in any other manner provided by law; provided that nothing in this
paragraph shall affect the right of the Lender to serve legal process in any
other manner permitted by law or affect the right of Lender to bring any action
or proceeding against the Guarantor or his property in the courts of any other
jurisdiction to the extent permitted by law.


 


25.           THE
GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF, BASED ON OR PERTAINING TO THIS
GUARANTY.


 


26.           Notwithstanding the aggregate amount of the Obligations which may from
time to time be outstanding, the Guarantor’s liability hereunder shall be
limited to $100,000.00 plus all attorney’s fees, collection costs and
enforcement expenses incurred in connection with the enforcement of this
Guaranty.  The Obligations may be created
and continued in any amount, whether or not in excess of such amount, without
affecting or impairing the Guarantor’s liability hereunder, and the Lender may
pay (or allow for the payment of) the excess out of any sums received by or
available to the Lender on account of the Obligations from the Borrower or any
other person (except the Guarantor) from their properties, out of any
collateral security, or from any other source, and such payment (or allowance)
shall not reduce, affect, or impair the Guarantor’s liability hereunder.  Any payment made by the Guarantor under this
Guaranty shall be effective to reduce or discharge such liability only if
accompanied by a written transmittal document, received by the Lender, advising
the Lender that such payment is made under this Guaranty for such purpose.


 


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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 


Dated as of this      day of October, 2005.


 


 


	
  STATE OF MINNESOTA

  	
  )

  	
   

  
	
   

  	
  ) ss

  	
   

  
	
  COUNTY OF                              

  	
  )

  	
   

  



 


The foregoing instrument was acknowledged before me this             
day of                       ,
2005, by                                      ,
a                               
individual.


 


 


	
   

  	
   

  
	
   

  	
  Notary Public

  



 


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