Exhibit 10.2


 


GUARANTY BY CORPORATION


 


This Guaranty, dated as
of October 20, 2005, is made by Southwest Casino Corporation, a Nevada
corporation (the “Guarantor”), for the benefit of Crown Bank, a Minnesota state
banking corporation (with its participants, successors and assigns, the “Lender”).


 


The Lender and Southwest
Casino and Hotel Corp., a Minnesota corporation, (the “Borrower”), are parties
to a Revolving Credit and Term Loan Agreement of even date herewith pursuant to
which the Lender may make advances and extend other financial accommodations to
the Borrower.


 


As a condition to
extending such credit to the Borrower, the Lender has required the execution
and delivery of this Guaranty.


 


ACCORDINGLY, the
Guarantor, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
hereby agrees as follows:


 


1.             Definitions.  All terms defined in the Credit Agreement
that are not otherwise defined herein shall have the meanings given them in the
Credit Agreement.


 


2.             Indebtedness
Guaranteed.  The Guarantor hereby
absolutely and unconditionally guarantees to the Lender the full and prompt
payment when due, whether at maturity or earlier by reason of acceleration or
otherwise, of (i) the Obligations and (ii) each and every other sum
now or hereafter owing to the Lender by the Borrower, including but not limited
to, debts, liabilities and obligations arising out of loans, credit
transactions, financial accommodations, discounts, purchases of property or
other transactions with the Borrower or for the Borrower’s account or out of
any other transaction or event, owed to the Lender or owed to others by reason
of participations granted to or interests acquired or created for or sold to
them by the Lender, in each case whether now existing or hereafter arising,
whether arising directly in a transaction or event involving the Lender or
acquired by the Lender from another by purchase or assignment or as collateral
security, whether owed by the Borrower as drawer, maker, endorser,
accommodation party, guarantor, principal, surety or as a member of any
partnership, syndicate, association or group or in any other capacity, whether
absolute or contingent, direct or indirect, primary or secondary, sole, joint,
several or joint and several, secured or unsecured, due or not due,
contractual, tortious or statutory, liquidated or unliquidated, arising by
agreement or imposed by law or otherwise (all of said sums being hereinafter
called the “Indebtedness”).


 


3.             Guarantor’s
Representations and Warranties.  The
Guarantor represents and warrants to the Lender that (i) the Guarantor is
a corporation, duly organized and existing in good standing and has full power
and authority to make and deliver this Guaranty; (ii) the execution,
delivery and performance of this Guaranty by the Guarantor have been duly
authorized by all necessary action of its directors and stockholders and do not
and will not violate the provisions of, or constitute a default under, any
presently applicable law or its articles of incorporation or bylaws or any
agreement presently binding on it; (iii) this Guaranty has been duly
executed and delivered by the authorized officers of the Guarantor and
constitutes its lawful, binding and


 





















 


legally enforceable
obligation; and (iv) the authorization, execution, delivery and
performance of this Guaranty do not require notification to, registration with,
or consent or approval by, any federal, state or local regulatory body or
administrative agency.  The Guarantor
represents and warrants to the Lender that the Guarantor has a direct and
substantial economic interest in the Borrower and expects to derive substantial
benefits therefrom and from any loans, credit transactions, financial
accommodations, discounts, purchases of property and other transactions and
events resulting in the creation of the Indebtedness guarantied hereby, and
that this Guaranty is given for a corporate purpose.  The Guarantor agrees to rely exclusively on
the right to revoke this Guaranty prospectively as to future transactions, in
accordance with paragraph 4, if at any time, in the opinion of the directors or
officers, the benefits then being received by the Guarantor in connection with
this Guaranty are not sufficient to warrant the continuance of this Guaranty as
to the future Indebtedness of the Borrower. 
Accordingly, so long as this Guaranty is not revoked prospectively in
accordance with paragraph 4, the Lender may rely conclusively on a continuing
warranty, hereby made, that the Guarantor continues to be benefited by this
Guaranty and the Lender shall have no duty to inquire into or confirm the
receipt of any such benefits, and this Guaranty shall be effective and
enforceable by the Lender without regard to the receipt, nature or value of any
such benefits.


 


4.             Unconditional
Nature.  No act or thing need occur
to establish the Guarantor’s liability hereunder, and no act or thing, except
full payment and discharge of all of the Indebtedness, shall in any way
exonerate the Guarantor hereunder or modify, reduce, limit or release the
Guarantor’s liability hereunder.  This is
an absolute, unconditional and continuing guaranty of payment of the
Indebtedness and shall continue to be in force and be binding upon the
Guarantor, whether or not all of the Indebtedness is paid in full, until this
Guaranty is revoked prospectively as to future transactions, by written notice
actually received by the Lender, and such revocation shall not be effective as
to the amount of Indebtedness existing or committed for at the time of actual
receipt of such notice by the Lender, or as to any renewals, extensions,
refinancings or refundings thereof.


 


5.             Dissolution
or Insolvency of Guarantor.  The
dissolution or adjudication of bankruptcy of the Guarantor shall not revoke
this Guaranty, except upon actual receipt of written notice thereof by the
Lender and only prospectively, as to future transactions, as herein set
forth.  If the Guarantor shall be
dissolved or shall be or become insolvent (however defined), then the Lender
shall have the right to declare immediately due and payable, and the Guarantor
will forthwith pay to the Lender, the full amount of all of the Indebtedness
whether due and payable or unmatured.  If
the Guarantor voluntarily commences or there is commenced involuntarily against
the Guarantor a case under the United States Bankruptcy Code, the full amount
of all Indebtedness, whether due and payable or unmatured, shall be immediately
due and payable without demand or notice thereof.


 


6.             Subrogation,
etc.  The Guarantor will not exercise
or enforce any rights that the Guarantor may now have or hereafter acquire,
whether by subrogation, contribution, reimbursement, recourse, exoneration,
contract or otherwise, to recover from the Borrower or from any property of the
Borrower any sums paid under this Guaranty until all of the Indebtedness shall
have been fully paid and discharged.  The
Guarantor will not exercise or enforce any right of contribution to recover any
such sums from any person who is a co-obligor


 


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with the Borrower or a
guarantor or surety of the Indebtedness or from any property of any such person
until all of the Indebtedness shall have been fully paid and discharged.


 


7.             Enforcement
Expenses.  The Guarantor will pay or
reimburse the Lender for all costs, expenses and attorneys’ fees paid or
incurred by the Lender in endeavoring to collect and enforce the Indebtedness
and in enforcing this Guaranty.


 


8.             Lender’s
Rights.  The Lender shall not be
obligated by reason of its acceptance of this Guaranty to engage in any
transactions with or for the Borrower. 
Whether or not any existing relationship between the Guarantor and the
Borrower has been changed or ended and whether or not this Guaranty has been
revoked, the Lender may enter into transactions resulting in the creation or
continuance of the Indebtedness and may otherwise agree, consent to or suffer
the creation or continuance of any of the Indebtedness, without any consent or
approval by the Guarantor and without any prior or subsequent notice to the
Guarantor.  The Guarantor’s liability
shall not be affected or impaired by any of the following acts or things (which
the Lender is expressly authorized to do, omit or suffer from time to time,
both before and after revocation of this Guaranty, without consent or approval
by or notice to the Guarantor): (i) any acceptance of collateral security,
guarantors, accommodation parties or sureties for any or all of the
Indebtedness; (ii) one or more extensions or renewals of the Indebtedness
(whether or not for longer than the original period) or any modification of the
interest rates, maturities, if any, or other contractual terms applicable to
any of the Indebtedness or any amendment or modification of any of the terms or
provisions of any loan agreement or other agreement under which the
Indebtedness or any part thereof arose; (iii) any waiver or indulgence
granted to the Borrower, any delay or lack of diligence in the enforcement of
the Indebtedness or any failure to institute proceedings, file a claim, give
any required notices or otherwise protect any of the Indebtedness; (iv) any
full or partial release of, compromise or settlement with, or agreement not to
sue, the Borrower or any guarantor or other person liable in respect of any of
the Indebtedness; (v) any release, surrender, cancellation or other
discharge of any evidence of the Indebtedness or the acceptance of any
instrument in renewal or substitution therefor; (vi) any failure to obtain
collateral security (including rights of setoff) for the Indebtedness, or to
see to the proper or sufficient creation and perfection thereof, or to
establish the priority thereof, or to preserve, protect, insure, care for,
exercise or enforce any collateral security; or any modification, alteration,
substitution, exchange, surrender, cancellation, termination, release or other
change, impairment, limitation, loss or discharge of any collateral security; (vii) any
collection, sale, lease or disposition of, or any other foreclosure or
enforcement of or realization on, any collateral security; (viii) any
assignment, pledge or other transfer of any of the Indebtedness or any evidence
thereof; (ix) any manner, order or method of application of any payments
or credits upon the Indebtedness; and (x) any election by the Lender under
Section 1111(b) of the United States Bankruptcy Code.  The Guarantor waives any and all defenses and
discharges available to a surety, guarantor or accommodation co-obligor.


 


9.             Waivers
by Guarantor.  The Guarantor waives
any and all defenses, claims, setoffs and discharges of the Borrower, or any
other obligor, pertaining to the Indebtedness, except the defense of discharge
by payment in full.  Without limiting the
generality of the foregoing, the Guarantor will not assert, plead or enforce
against the Lender any defense of waiver, release, discharge or disallowance in
bankruptcy, statute of limitations, res judicata, statute of frauds,
anti-deficiency statute, fraud, incapacity, minority, usury, illegality or
unenforceability which


 


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may be available to the
Borrower or any other person liable in respect of any of the Indebtedness, or
any setoff available against the Lender to the Borrower or any other such
person, whether or not on account of a related transaction.  The Guarantor expressly agrees that the
Guarantor shall be and remain liable for any deficiency remaining after
foreclosure of any mortgage or security interest securing the Indebtedness,
whether or not the liability of the Borrower or any other obligor for such
deficiency is discharged pursuant to statute or judicial decision.  The liability of the Guarantor shall not be
affected or impaired by any voluntary or involuntary liquidation, dissolution,
sale or other disposition of all or substantially all of the assets,
marshalling of assets and liabilities, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of, or other similar event or proceeding affecting,
the Borrower or any of its assets.  The
Guarantor will not assert, plead or enforce against the Lender any claim,
defense or setoff available to the Guarantor against the Borrower.  The Guarantor waives presentment, demand for
payment, notice of dishonor or nonpayment and protest of any instrument
evidencing the Indebtedness.  The Lender
shall not be required first to resort for payment of the Indebtedness to the
Borrower or other persons, or their properties, or first to enforce, realize
upon or exhaust any collateral security for the Indebtedness, before enforcing
this Guaranty.


 


10.           If
Payments Set Aside, etc.  If any
payment applied by the Lender to the Indebtedness is thereafter set aside, recovered,
rescinded or required to be returned for any reason (including, without
limitation, the bankruptcy, insolvency or reorganization of the Borrower or any
other obligor), the Indebtedness to which such payment was applied shall for
the purpose of this Guaranty be deemed to have continued in existence,
notwithstanding such application, and this Guaranty shall be enforceable as to
such Indebtedness as fully as if such application had never been made.


 


11.           Additional
Obligation of Guarantor.  The Guarantor’s
liability under this Guaranty is in addition to and shall be cumulative with
all other liabilities of the Guarantor to the Lender as guarantor, surety,
endorser, accommodation co-obligor or otherwise of any of the Indebtedness or
obligation of the Borrower, without any limitation as to amount, unless the
instrument or agreement evidencing or creating such other liability
specifically provides to the contrary.


 


12.           No
Duties Owed by Lender.  The Guarantor
acknowledges and agrees that the Lender (i) has not made any
representations or warranties with respect to, (ii) does not assume any
responsibility to the Guarantor for, and (iii) has no duty to provide
information to the Guarantor regarding, the enforceability of any of the
Indebtedness or the financial condition of the Borrower or any guarantor.  The Guarantor has independently determined
the creditworthiness of the Borrower and the enforceability of the Indebtedness
and until the Indebtedness is paid in full will independently and without
reliance on the Lender continue to make such determinations.


 


13.           Miscellaneous.  This Guaranty shall be effective upon
delivery to the Lender, without further act, condition or acceptance by the
Lender, shall be binding upon the Guarantor and the successors and assigns of
the Guarantor and shall inure to the benefit of the Lender and its
participants, successors and assigns. 
Any invalidity or unenforceability of any provision or application of
this Guaranty shall not affect other lawful provisions and application thereof,
and to this end the provisions of this Guaranty are declared to be
severable.  This Guaranty may not be
waived, modified, amended, terminated, released or otherwise changed except by
a writing


 


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signed by the Guarantor
and the Lender.  This Guaranty shall be
governed by and construed in accordance with the substantive laws (other than
conflict laws) of the State of Minnesota. 
The Guarantor hereby (i) consents to the personal jurisdiction of
the state and federal courts located in the State of Minnesota in connection
with any controversy related to this Guaranty; (ii) waives any argument
that venue in any such forum is not convenient, (iii) agrees that any
litigation initiated by the Lender or the Guarantor in connection with this
Guaranty shall be venued in either the District Court of Hennepin County,
Minnesota, or the United States District Court, District of Minnesota, Fourth
Division; and (iv) agrees that a final judgment in any such suit, action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.


 


14.           Waiver
of Jury Trial.  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.


 


IN WITNESS WHEREOF, this
Guaranty has been duly executed by the Guarantor the date first written above.


 


 


	
   

  	
  SOUTHWEST CASINO
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Thomas E. Fox

  
	
   

  	
   

  	
  Its:

  	
    President

  



 


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