Document:

Exhibit 10.1

 

CHANGE IN
TERMS AGREEMENT

 

	
  Principal

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No.

  	
   

  	
  Call/Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  	
   

  	
  Initials

  	
   

  
	
  $

  	
  1,625,000.00

  	
   

  	
  05-05-2008

  	
   

  	
  02-04-2013

  	
   

  	
  7015103

  	
   

  	
  1E/45

  	
   

  	
   

  	
   

  	
  CH

  	
   

  	
   

  	
   

  
																	

 

	
  References in the boxes above
  are for Lender’s use only and do not limit the applicability of this document
  to any particular loan or item.  Any
  item above containing “***” has been omitted due to text length limitations

  

 

	
  Borrower:

  	
   

  	
  AWI GAMING, INC.

  P.O. Box 56

  Lovelock, NV 89419

  	
   

  	
  Lender:

  	
   

  	
  GREAT BASIN BANK OF

  NEVADA

  Fallon Office

  498 W. Williams Avenue

  Fallon, NV 89406

  

 

	
  Principal Amount:  $1,625,000.00

  	
   

  	
  Interest Rate:  8.00%

  	
   

  	
  Date of Agreement:  May 5, 2008

  

 

DESCRIPTION OF EXISTING INDEBTEDNESS.  Promissory Note dated February 21, 2006
between Borrower and Lender in the principal amount of $1,500,000.00 and all
subsequent modifications together with other previously signed documents that
remain in effect.

 

DESCRIPTION OF COLLATERAL.  Borrower acknowledges this Note is secured by
the following collateral described in the security instrument listed herein,
all the terms and conditions of which are hereby incorporated and made a part
of this Agreement:

 

(A)          A Deed of Trust dated February 21,
2006, Recorded February 28, 2006, Document Number 247484, to a trustee in
favor of lender for all real property located at 1420 Cornell Avenue, Lovelock,
Pershing County, Nevada.

 

(B)          A Commercial Security Agreement dated February 21,
2006 between Borrower and Lender, for all Furniture, Fixtures, Equipment, and
all Gaming Equipment.

 

DESCRIPTION OF CHANGE IN TERMS.  Increase Loan Amount, payment amount and
payment stream change.

 

PROMISE TO PAY. 
AWI GAMING, INC. (“Borrower”) promises to pay to GREAT BASIN BANK OF
NEVADA (“Lender”), or order, in lawful money of the United States of America,
the principal amount of One Million Six Hundred Twenty-five Thousand &
00/100 Dollars ($1,625,000.00), together with interest at the rate of 8.000%
per annum on the unpaid principal balance from May 5, 2008, until paid in
full. The interest rate may change under the terms and conditions of the “INTEREST
AFTER DEFAULT” section.

 

PAYMENT. 
Borrower will pay this loan in 56 regular payments of $13,710.00 each
and one irregular last payment estimated at $1,450,635.05. Borrower’s first
payment is due June 4, 2008, and all subsequent payments are due on the
same day of each month after that. 
Borrower’s final payment will be due on February 4, 2013, and will
be for all principal and all accrued interest not yet paid.  Payments include

 

1

 

principal and interest.  Unless otherwise agreed or required by
applicable law, payments will be applied first to any late charges; then to any
accrued unpaid interest; and then to principal. 
Interest on this loan is computed on a 365/360 simple interest basis;
that is, by applying the ratio of the annual interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding.  Borrower will pay Lender at Lender’s address
shown above or at such other place as Lender may designate in writing.

 

PREPAYMENT PENALTY; MINIMUM INTEREST CHARGE.  Borrower agrees that all loan fees and other
prepaid finance charges are earned fully as of the date of the loan and will
not be subject to refund upon early payment (whether voluntary or as a result
of default), except as otherwise required by law.  In any event, even upon full prepayment of
this Agreement, Borrower understands that Lender is entitled to a minimum
interest charge of $15.00.  Upon
prepayment of this Agreement, Lender is entitled to the following prepayment
penalty: The Borrower may prepay up to 20% of the principal balance in any year
without penalty.  Principal prepayments
in excess of that amount shall be subject to a prepayment penalty equal to 2%
of the excess the first year and 1% of the excess the second year.  Other than Borrower’s obligation to pay any
minimum interest charge and prepayment penalty, Borrower may pay all or a
portion of the amount owed earlier than it is due.  Early payments will not, unless agreed to by
Lender in writing, relieve Borrower of Borrower’s obligation to continue to
make payments under the payment schedule. 
Rather, early payments will reduce the principal balance due and may
result in Borrower’s making fewer payments. 
Borrower agrees not to send Lender payments marked “paid in full”, “without
recourse”, or similar language.  If
Borrower sends such a payment, Lender may accept it without losing any of
Lender’s rights under this Agreement, and Borrower will remain obligated to pay
any further amount owed to Lender.  All
written communications concerning disputed amounts, including any check or
other payment instrument that indicates that the payment constitutes “payment
in full” of the amount owed or that is tendered with other conditions or
limitations or as full satisfaction of a disputed amount must be mailed or
delivered to:

 

	
  Great Basin bank of Nevada

  P.O. Box 2808

  Elko, NV 89803

  

 

LATE CHARGE.  If
a payment is 15 days or more late, Borrower will be charged 5.000% of the
unpaid portion of the regularly scheduled payment or $15.00, whichever is
greater.

 

INTEREST AFTER DEFAULT.  Upon default, including failure to pay upon
final maturity, the interest rate on this loan shall be increased by 2.000
percentage points.  However, in no event
will the interest rate exceed the maximum interest rate limitations under
applicable law.

 

DEFAULT.  Each
of the following shall constitute an Event of Default under this Agreement.

 

2

 

Payment Default.  Borrower fails to make any payment when due
under the Indebtedness.

 

Other Defaults.  Borrower fails to comply with or to perform
any other term, obligation, covenant or condition contained in this Agreement
or in any of the Related Documents or to comply with or to perform any term,
obligation, covenant or condition contained in any other agreement between
Lender and Borrower.

 

False Statements.  Any warranty, representation or statement
made or furnished to Lender by Borrower or on Borrower’s behalf under this
Agreement or the Related Documents is false or misleading in any material
respect, either now or at the time made or furnished or becomes false or
misleading at any time thereafter.

 

Insolvency. 
The dissolution or termination of Borrower’s existence as a going
business, the insolvency of Borrower, the appointment of a receiver for any
part of Borrower’s property, any assignment for the benefit of creditors, any
type of creditor workout, or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against Borrower.

 

Creditor or Forfeiture Proceedings.  Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or by any governmental agency against
any collateral securing the Indebtedness. 
This includes a garnishment of any of Borrower’s accounts, including
deposit accounts, with Lender.  However,
this Event of Default shall not apply if there is a good faith dispute by
Borrower as to the validity or reasonableness of the claim which is the basis
of the creditor or forfeiture proceeding and if Borrower gives Lender written
notice of the creditor or forfeiture proceeding and deposits with Lender monies
or a surety bond for the creditor or forfeiture proceeding, in an amount
determined by Lender, in its sole discretion, as being an adequate reserve or
bond for the dispute.

 

Events Affecting Guarantor.  Any of the preceding events occurs with
respect to any Guarantor of any of the Indebtedness or any Guarantor dies or
becomes incompetent, or revokes or disputes the validity of, or liability
under, any Guaranty of the Indebtedness evidenced by this Note.

 

Change in Ownership.  Any change in ownership of twenty-five
percent (25%) or more of the common stock of Borrower.

 

Adverse Change.  A material adverse change occurs in Borrower’s
financial condition, or Lender believes the prospect of payment or performance
of the Indebtedness is impaired.

 

LENDER’S RIGHTS. 
Upon default, Lender may declare the entire unpaid principal balance
under this Agreement and all accrued unpaid interest immediately due, and then
Borrower will pay that amount.

 

ATTORNEYS’ FEES; EXPENSES.  Lender may hire or pay someone else to help
collect this Agreement if Borrower does not pay.  Borrower will pay Lender that amount.  This includes, subject to any limits under
applicable law, Lender’s attorneys’ fees and Lender’s legal expenses, whether
or not there is a lawsuit, including attorneys’ fees, expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), and appeals.  If not
prohibited by applicable law, Borrower also will pay any court costs, in addition
to all other sums provided by law.

 

GOVERNING LAW. 
This Agreement will be governed by federal law applicable to Lender and,
to the extent not preempted by federal law, the laws of the State of Nevada
without regard to its conflicts of law provisions.  This Agreement has been accepted by Lender in
the State of Nevada.

 

3

 

RIGHT OF SETOFF. 
To the extent permitted by applicable law, Lender reserves a right of
setoff in all Borrower’s accounts with Lender (whether checking, savings, or
some other account).  This includes all
accounts Borrower holds jointly with someone else and all accounts Borrower may
open in the future.  However, this does
not include any IRA or Keogh accounts, any trust accounts for which setoff
would be prohibited by law, or monies in any accounts that were received
pursuant to the federal Social Security Act, including, without limitation,
retirement and survivors’ benefits, supplemental security income benefits and
disability insurance benefits.  Borrower
authorizes Lender, to the extent permitted by applicable law, to charge or
setoff all sums owing on the indebtedness against any and all such accounts.

 

COLLATERAL. 
Borrower acknowledges this Agreement is secured by the following collateral
described in the security instrument listed herein, all the terms and
conditions of which are hereby incorporated and made a part of this Agreement:

 

(A)          A Deed of Trust dated February 21,
2006, Recorded February 28, 2006, Document Number 247484, to a trustee in
favor of lender for all real property located at 1420 Cornell Avenue, Lovelock,
Pershing County, Nevada.

 

(B)          A Commercial Security Agreement dated February 21,
2006 between Borrower and Lender, for all Furniture, Fixtures, Equipment, and all
Gaming Equipment.

 

CONTINUING VALIDITY. 
Except as expressly changed by this Agreement, the terms of the original
obligation or obligations, including all agreements evidenced or securing the
obligation (s}, remain unchanged and in full force and effect.  Consent by Lender to this Agreement does not
waive Lender’s right to strict performance of the obligation(s) as
changed, nor obligate Lender to make any future change in terms.  Nothing in this Agreement will constitute a
satisfaction of the obligation(s).  It is
the intention of Lender to retain as liable parties all makers and endorsers of
the original obligation(s), including accommodation parties, unless a party is
expressly released by Lender in writing. 
Any maker or endorser, including accommodation makers, will not be
released by virtue of this Agreement.  If
any person who signed the original obligation does not sign this Agreement
below, then all persons signing below acknowledge that this Agreement is given
conditionally, based on the representation to Lender that the non-signing party
consents to the changes and provisions of this Agreement or otherwise will not
be released by it.  This waiver applies
not only to any initial extension, modification or release, but also to all
such subsequent actions.

 

SUCCESSORS AND ASSIGNS.  Subject to any limitations stated in this
Agreement on transfer of Borrower’s interest, this Agreement shall be binding
upon and inure to the benefit of the parties, their successors and
assigns.  If ownership of the Collateral
becomes vested in a person other than Borrower, Lender, without notice to
Borrower, may deal with Borrower’s successors with reference to this Agreement
and the Indebtedness by way of forbearance or extension without releasing
Borrower from the obligations of this Agreement or liability under the
Indebtedness.

 

MISCELLANEOUS PROVISIONS.  If any part of this Agreement cannot be
enforced, this fact will not affect the rest of the Agreement.  Lender may delay or forgo enforcing any of
its rights or remedies under this Agreement without losing them.  Borrower and any other person who signs,
guarantees or endorses this Agreement, to the extent allowed by law, waive
presentment, demand for payment, and notice of dishonor.  Upon any change in the terms of this
Agreement, and unless otherwise expressly stated in writing, no party who signs
this Agreement, whether as maker, guarantor, accommodation maker or endorser,
shall be released from liability.  All
such parties agree that Lender may renew or extend (repeatedly and for any
length of time) this loan or release any party or guarantor or collateral; or
impair, 

 

4

 

fail to realize upon or perfect Lender’s security
interest in the collateral; and take any other action deemed necessary by
Lender without the consent of or notice to anyone.  All such parties also agree that Lender may
modify this loan without the consent of or notice to anyone other than the
party with whom the modification is made. 
The obligations under this Agreement are joint and several.

 

5

 

Prior to signing this Agreement,
Borrower read and understood all the provisions of this Agreement.  Borrower agrees to the terms of the
Agreement.

 

CHANGE IN TERMS SIGNERS:

 

	
  AWI GAMING, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John M. Salerno

  	
   

  	
  By:

  	
  /s/ Bruce E. Dewing

  
	
   

  	
  JOHN M. SALERNO, Secretary/

  Treasurer of AWI GAMING, INC.

  	
   

  	
  BRUCE E. DEWING, President of

  AWI GAMING, INC.

  
					

 

6

 

	
  STATE OF NEVADA

  	
  }ss.

  	
   

  
	
  COUNTY OF PERSHING

  	
   

  

 

This instrument was
acknowledged before me on May 7th, 2008 by Bruce E. Dewing, who
acknowledged to me, that he is the President of AWI Gaming, Inc.

 

	
   

  	
  /s/ Shelly Iniguez

  
	
   

  	
  NOTARY PUBLIC

  
	
  [Notary Seal]

  	
  Notary Public in and for State
  of

  Nevada

  
	
   

  	
  My Commission Expires:
  July 11,

  2011

  

 

	
  STATE OF NEVADA

  	
  }ss.

  	
   

  
	
  COUNTY OF CLARK

  	
   

  

 

This instrument was
acknowledged before me on May 9th, 2008 by John M. Salerno, who
acknowledged to me, that he is the Secretary/Treasurer of AWI Gaming, Inc.

 

	
   

  	
  /s/ Karen Marquardt

  
	
   

  	
  NOTARY PUBLIC

  
	
  [Notary Seal]

  	
  Notary Public in and for State
  of

  Nevada

  
	
   

  	
  My Commission Expires: April 25,

  2010

  

 

7Exhibit 10.2

 

COMMERCIAL
GUARANTY

 

	
  Principal

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No.

  	
   

  	
  Call/Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  	
   

  	
  Initials

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  7015103

  	
   

  	
  1E/45

  	
   

  	
   

  	
   

  	
  CH

  	
   

  	
   

  

 

References in the boxes above are for Lender’s use
only and do not limit the applicability of this document to any particular loan
or item.  Any item above containing “***”
has been omitted due to text length limitations

 

	
  Borrower:

  	
   

  	
  AWI GAMING, INC.

  P.O. Box 56

  Lovelock, NV 89419

  	
   

  	
  Lender:

  	
   

  	
  GREAT BASIN BANK OF

  NEVADA

  Fallon Office

  498 W. Williams Avenue

  Fallon, NV 89406

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Guarantor:

  	
   

  	
  STURGEON’S, LLC

  P. O. Box 56

  Lovelock, NV  89419

  	
   

  	
   

  	
   

  	
   

  

 

CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE.  For good and valuable consideration,
Guarantor absolutely and unconditionally guarantees full and punctual payment
and satisfaction of the Indebtedness of Borrower to Lender, and the performance
and discharge of all Borrower’s obligations under the Note and the Related
Documents.  This is a guaranty of payment
and performance and not of collection, so Lender can enforce this Guaranty
against Guarantor even when Lender has not exhausted Lender’s remedies against
anyone else obligated to pay the Indebtedness or against any collateral
securing the Indebtedness, this Guaranty or any other guaranty of the
Indebtedness.  Guarantor will make any
payments to Lender or its order, on demand, in legal tender of the United
States of America, in same-day funds, without set-off or deduction or
counterclaim, and will otherwise perform Borrower’s obligations under the Note
and Related Documents.  Under this
Guaranty, Guarantor’s liability is unlimited and Guarantor’s obligations are
continuing.

 

INDEBTEDNESS. 
The word “Indebtedness” as used in this Guaranty means all of the
principal amount outstanding from time to time and at any one or more times,
accrued unpaid interest thereon and all collection costs and legal expenses
related thereto permitted by law, attorneys’ fees, arising from any and all
debts, liabilities and obligations of every nature or form, now existing or
hereafter arising or acquired, that Borrower individually or collectively or
interchangeably with others, owes or will owe Lender.  “Indebtedness” includes, without limitation,
loans, advances, debts, overdraft indebtedness, credit card indebtedness, lease
obligations, liabilities and obligations under any interest rate protection
agreements or foreign currency exchange agreements or commodity price
protection agreements, other obligations, and liabilities of Borrower, and any
present or future judgments against Borrower, future advances, loans or
transactions that renew, extend, modify, refinance, consolidate or substitute
these debts, liabilities and obligations whether: voluntarily or involuntarily
incurred; due or to become due by their terms or acceleration; absolute or contingent;
liquidated or unliquidated; determined or undetermined; direct or 

 

1

 

indirect; primary or secondary in nature or arising
from a guaranty or surety; secured or unsecured; joint or several or joint and
several; evidenced by a negotiable or non-negotiable instrument or writing;
originated by Lender or another or others; barred or unenforceable against
Borrower for any reason whatsoever; for any transactions that may be voidable
for any reason (such as infancy, insanity, ultra vires or otherwise); and
originated then reduced or extinguished and then afterwards increased or
reinstated.

 

If Lender presently holds one or more guaranties, or
hereafter receives additional guaranties from Guarantor, Lender’s rights under
all guaranties shall be cumulative.  This
Guaranty shall not (unless specifically provided below to the contrary) affect
or invalidate any such other guaranties. Guarantor’s liability will be
Guarantor’s aggregate liability under the terms of this Guaranty and any such
other unterminated guaranties.

 

CONTINUING GUARANTY. 
THIS IS A “CONTINUING GUARANTY” UNDER WHICH GUARANTOR AGREES TO
GUARANTEE THE FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE
INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR
ACQUIRED, ON AN OPEN AND CONTINUING BASIS. 
ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL NOT DISCHARGE OR
DIMINISH GUARANTOR’S OBLIGATIONS AND LIABILITY UNDER THIS GUARANTY FOR ANY
REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF THE
OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME.

 

DURATION OF GUARANTY. 
This Guaranty will take effect when received by Lender without the
necessity of any acceptance by Lender, or any notice to Guarantor or to
Borrower, and will continue in full force until all the indebtedness incurred
or contracted before receipt by Lender of any notice of revocation shall have
been fully and finally paid and satisfied and all of Guarantor’s other
obligations under this Guaranty shall have been performed in full.  If Guarantor elects to revoke this Guaranty,
Guarantor may only do so in writing. 
Guarantor’s written notice of revocation must be mailed to Lender, by
certified mail, at Lender’s address listed above or such other place as Lender
may designate in writing.  Written
revocation of this Guaranty will apply only to new Indebtedness created after
actual receipt by Lender of Guarantor’s written revocation.  For this purpose and without limitation, the
term “new Indebtedness” does not include the Indebtedness which at the time of
notice of revocation is contingent, unliquidated, undetermined or not due and
which later becomes absolute, liquidated, determined or due.  For this purpose and without limitation, “new
Indebtedness” does not include all or part of the Indebtedness that is:
incurred by Borrower prior to revocation; incurred under a commitment that
became binding before revocation; any renewals, extensions, substitutions, and
modifications of the Indebtedness.  This
Guaranty shall bind Guarantor’s estate as to the Indebtedness created both
before and after Guarantor’s death or incapacity, regardless of Lender’s actual
notice of Guarantor’s death.  Subject to
the foregoing, Guarantor’s executor or administrator or other legal
representative may terminate this Guaranty in the same manner in which
Guarantor might have terminated it and with the same effect.  Release of any other guarantor or termination
of any other guaranty of the Indebtedness shall not affect the liability of
Guarantor under this Guaranty.  A
revocation Lender receives from any one or more Guarantors shall not affect the
liability of any remaining Guarantors under this Guaranty.  It is anticipated that fluctuations may occur
in the aggregate amount of the Indebtedness covered by this Guaranty, and
Guarantor specifically acknowledges and agrees that reductions in the amount of
the Indebtedness, even to zero dollars ($0.00), shall not constitute a
termination of this Guaranty.  This
Guaranty is binding upon Guarantor and Guarantor’s heirs, successors and
assigns so long as any of the Indebtedness remains unpaid and even though the
Indebtedness may from time to time be zero dollars ($0.00).

 

2

 

GUARANTOR’S AUTHORIZATION TO LENDER.  Guarantor authorizes Lender, either before or
after any revocation hereof, without notice or demand and without lessening
Guarantor’s liability under this Guaranty, from time to time: (A) prior to
revocation as set forth above, to make one or more additional secured or
unsecured loans to Borrower, to lease equipment or other goods to Borrower, or
otherwise to extend additional credit to Borrower; (B) to alter,
compromise, renew, extend, accelerate, or otherwise change one or more times
the time for payment or other terms of the Indebtedness or any part of the
Indebtedness, including increases and decreases of the rate of interest on the
Indebtedness; extensions may be repeated and may be for longer than the
original loan term; (C) to take and hold security for the payment of this
Guaranty or the Indebtedness, and exchange, enforce, waive, subordinate, fail
or decide not to perfect, and release any such security, with or without the
substitution of new collateral; (D) to release, substitute, agree not to
sue, or deal with any one or more of Borrower’s sureties, endorsers, or other
guarantors on any terms or in any manner Lender may choose; (E) to
determine how, when and what application of payments and credits shall be made
on the Indebtedness; (F) to apply such security and direct the order or
manner of sale thereof, including without limitation, any nonjudicial sale
permitted by the terms of the controlling security agreement or deed of trust,
as Lender in its discretion may determine: (G) to sell.  transfer, assign or grant participations in
all or any part of the Indebtedness; and (H) to assign or transfer this
Guaranty in whole or in part.

 

GUARANTOR’S REPRESENTATIONS AND WARRANTIES.  Guarantor represents and warrants to Lender
that (A) no representations or agreements of any kind have been made to
Guarantor which would limit or qualify in any way the terms of this Guaranty; (B) this
Guaranty is executed at Borrower’s request and not at the request of Lender; (C) Guarantor
has full power, right and authority to enter into this Guaranty; (D) the
provisions of this Guaranty do not conflict with or result in a default under
any agreement or other instrument binding upon Guarantor and do not result in a
violation of any law, regulation, court decree or order applicable to
Guarantor; (E) Guarantor has not and will not, without the prior written
consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or
otherwise dispose of all or substantially all of Guarantor’s assets, or any
interest therein; (F) upon Lender’s request, Guarantor will provide to
Lender financial and credit information in form acceptable to Lender, and all
such financial information which currently has been, and all future financial
information which will be provided to Lender is and will be true and correct in
all material respects and fairly present Guarantor’s financial condition as of
the dates the financial information is provided; (G) no material adverse
change has occurred in Guarantor’s financial condition since the date of the
most recent financial statements provided to Lender and no event has occurred
which may materially adversely affect Guarantor’s financial condition; (H) no
litigation, claim, investigation, administrative proceeding or similar action
(including those for unpaid taxes) against Guarantor is pending or threatened; (I) Lender
has made no representation to Guarantor as to the creditworthiness of Borrower;
and (J) Guarantor has established adequate means of obtaining from Borrower
on a continuing basis information regarding Borrower’s financial
condition.  Guarantor agrees to keep
adequately informed from such means of any facts, events, or circumstances
which might in any way affect Guarantor’s risks under this Guaranty, and Guarantor
further agrees that, absent a request for information, Lender shall have no
obligation to disclose to Guarantor any information or documents acquired by
Lender in the course of its relationship with Borrower.

 

GUARANTOR’S FINANCIAL STATEMENTS.  Guarantor agrees to furnish Lender with the
following:

 

Annual Statements.  As soon as available, but in no event later
than sixty (60) days after the end of each fiscal year, Guarantor’s balance
sheet and income statement for the year ended, prepared by Guarantor.

 

3

 

Tax Returns.  As soon as available, but in no event later
than thirty (30) days after the applicable filing date for the tax reporting
period ended, Federal and other governmental tax returns, prepared by a tax
professional satisfactory to Lender.

 

All financial reports required to be provided under
this Guaranty shall be prepared in accordance with GAAP, applied on a
consistent basis, and certified by Guarantor as being true and correct.

 

GUARANTOR’S WAIVERS. 
Except as prohibited by applicable law, Guarantor waives any right to
require Lender (A) to continue lending money or to extend other credit to
Borrower; (B) to make any presentment, protest, demand, or notice of any
kind, including notice of any nonpayment of the indebtedness or of any
nonpayment related to any collateral, or notice of any action or nonaction on
the part of Borrower, Lender, any surety, endorser, or other guarantor in
connection with the Indebtedness or in connection with the creation of new or
additional loans or obligations; (C) to resort for payment or to proceed
directly or at once against any person, including Borrower or any other
guarantor; (D) to proceed directly against or exhaust any collateral held
by Lender from Borrower, any other guarantor, or any other person; (E) to
give notice of the terms, time, and place of any public or private sale of
personal property security held by Lender from Borrower or to comply with any
other applicable provisions of the Uniform Commercial Code; (F) to pursue
any other remedy within Lender’s power; or (G) to commit any act or
omission of any kind, or at any time, with respect to any matter whatsoever.

 

Guarantor also waives any and all rights or defenses
based on suretyship or impairment of collateral including, but not limited to,
any rights or defenses arising by reason of (A) any “one action” or “anti-deficiency”
law or any other law which may prevent Lender from bringing any action,
including a claim for deficiency, against Guarantor, before or after Lender’s
commencement or completion of any foreclosure action, either judicially or by
exercise of a power of sale; (B) any election of remedies by Lender which
destroys or otherwise adversely affects Guarantor’s subrogation rights or Guarantor’s
rights to proceed against Borrower for reimbursement, including without
limitation, any loss of rights Guarantor may suffer by reason of any law
limiting, qualifying, or discharging the Indebtedness; (C) any disability
or other defense of Borrower, of any other guarantor, or of any other person,
or by reason of the cessation of Borrower’s liability from any cause
whatsoever, other than payment in full in legal tender, of the Indebtedness; (D) any
right to claim discharge of the Indebtedness on the basis of unjustified
impairment of any collateral for the Indebtedness; (E) any statute of
limitations, if at any time any action or suit brought by Lender against
Guarantor is commenced, there is outstanding Indebtedness which is not barred
by any applicable statute of limitations; or (F) any defenses given to
guarantors at law or in equity other than actual payment and performance of the
Indebtedness.  If payment is made by
Borrower, whether voluntarily or otherwise, or by any third party, on the Indebtedness
and thereafter Lender is forced to remit the amount of that payment to Borrower’s
trustee in bankruptcy or to any similar person under any federal or state
bankruptcy law or law for the relief of debtors, the Indebtedness shall be
considered unpaid for the purpose of the enforcement of this Guaranty.

 

Guarantor further waives and agrees not to assert or
claim at any time any deductions to the amount guaranteed under this Guaranty
for any claim of setoff, counterclaim, counter demand, recoupment or similar
right, whether such claim, demand or right may be asserted by the Borrower, the
Guarantor, or both.

 

GUARANTOR’S UNDERSTANDING WITH RESPECT TO
WAIVERS.  Guarantor warrants and agrees
that each of the waivers set forth above is made with Guarantor’s full
knowledge of its significance and consequences and that, under the
circumstances, the waivers are reasonable and not contrary to public 

 

4

 

policy or law. 
If any such waiver is determined to be contrary to any applicable law or
public policy, such waiver shall be effective only to the extent permitted by
law or public policy.

 

SUBORDINATION OF BORROWER’S DEBTS TO GUARANTOR.  Guarantor agrees that the Indebtedness,
whether now existing or hereafter created, shall be superior to any claim that
Guarantor may now have or hereafter acquire against Borrower, whether or not
Borrower becomes insolvent.  Guarantor
hereby expressly subordinates any claim Guarantor may have against Borrower,
upon any account whatsoever, to any claim that Lender may now or hereafter have
against Borrower.  In the event of
insolvency and consequent liquidation of the assets of Borrower, through
bankruptcy, by an assignment for the benefit of creditors, by voluntary
liquidation, or otherwise, the assets of Borrower applicable to the payment of
the claims of both Lender and Guarantor shall be paid to Lender and shall be
first applied by Lender to the Indebtedness. 
Guarantor does hereby assign to Lender all claims which it may have or
acquire against Borrower or against any assignee or trustee in bankruptcy of
Borrower; provided however, that such assignment shall be effective only for
the purpose of assuring to Lender full payment in legal tender of the
Indebtedness.  If Lender so requests, any
notes or credit agreements now or hereafter evidencing any debts or obligations
of Borrower to Guarantor shall be marked with a legend that the same are
subject to this Guaranty and shall be delivered to Lender.  Guarantor agrees, and Lender is hereby
authorized, in the name of Guarantor, from time to time to file financing
statements and continuation statements and to execute documents and to take
such other actions as Lender deems necessary or appropriate to perfect,
preserve and enforce its rights under this Guaranty.

 

MISCELLANEOUS PROVISIONS.  The following miscellaneous provisions are a
part of this Guaranty:

 

Amendments.  This Guaranty, together, with any Related
Documents, constitutes the entire understanding and agreement of the parties as
to the matters set forth in this Guaranty. 
No alteration of or amendment to this Guaranty shall be effective unless
given in writing and signed by the party or parties sought to be charged or
bound by the alteration or amendment.

 

Attorneys’ Fees; Expenses.  Guarantor agrees to pay upon demand all of
Lender’s costs and expenses, including Lender’s attorneys’ fees and Lender’s
legal expenses, incurred in connection with the enforcement of this
Guaranty.  Lender may hire or pay someone
else to help enforce this Guaranty, and Guarantor shall pay the costs and
expenses of such enforcement.  Costs and
expenses include Lender’s attorneys’ fees and legal expenses whether or not
there is a lawsuit, including attorneys’ fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post judgment collection
services.  Guarantor also shall pay all
court costs and such additional fees as may be directed by the court.

 

Caption Headings.  Caption headings in this Guaranty are for
convenience purposes only and are not to be used to interpret or define the
provisions of this Guaranty.

 

Governing Law.  This Guaranty will be governed by federal law
applicable to Lender and, to the extent not preempted by federal law, the laws
of the State of Nevada without regard to its conflicts of law provisions.

 

Integration.  Guarantor further agrees that Guarantor has
read and fully understands the terms of this Guaranty; Guarantor has had the
opportunity to be advised by Guarantor’s attorney with respect to this
Guaranty; the Guaranty fully reflects Guarantor’s intentions and parol evidence
is not required to interpret the terms of this Guaranty.  Guarantor hereby indemnifies and holds Lender
harmless from all losses, claims, damages, and costs (including Lender’s
attorneys’ fees) suffered or incurred by Lender as a result of any breach by
Guarantor of the warranties, representations and agreements of this paragraph.

 

5

 

Interpretation.  In all cases where there is more than one
Borrower or Guarantor, then all words used in this Guaranty in the singular
shall be deemed to have been used in the plural where the context and
construction so require; and where there is more than one Borrower named in
this Guaranty or when this Guaranty is executed by more than one Guarantor, the
words “Borrower” and “Guarantor” respectively shall mean all and any one or
more of them.  The words “Guarantor,” “Borrower,”
and “Lender” include the heirs, successors, assigns, and transferees of each of
them.  If a court finds that any
provision of this Guaranty is not valid or should not be enforced, that fact by
itself will not mean that the rest of this Guaranty will not be valid or enforced.  Therefore, a court will enforce the rest of
the provisions of this Guaranty even if a provision of this Guaranty may be
found to be invalid or unenforceable.  If
any one or more of Borrower or Guarantor are corporations, partnerships,
limited liability companies, or similar entities, it is not necessary for
Lender to inquire into the powers of Borrower or Guarantor or of the officers,
directors, partners, managers, or other agents acting or purporting to act on
their behalf, and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed under this Guaranty.

 

Notices.  Any notice required to be given under this
Guaranty shall be given in writing, and, except for revocation notices by
Guarantor, shall be effective when actually delivered, when actually received
by telefacsimile (unless otherwise required by law), when deposited with a
nationally recognized overnight courier, or, if mailed, when deposited in the
United States mail, as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the beginning of this
Guaranty.  All revocation notices by
Guarantor shall be in writing and shall be effective upon delivery to Lender as
provided in the section of this Guaranty entitled “DURATION OF GUARANTY.” Any
party may change its address for notices under this Guaranty by giving formal
written notice to the other parties, specifying that the purpose of the notice
is to change the party’s address.  For
notice purposes, Guarantor agrees to keep Lender informed at all times of
Guarantor’s current address.  Unless
otherwise provided or required by law, if there is more than one Guarantor, any
notice given by Lender to any Guarantor is deemed to be notice given to all
Guarantors.

 

No Waiver by Lender.  Lender shall not be deemed to have waived any
rights under this Guaranty unless such waiver is given in writing and signed by
Lender.  No delay or omission on the part
of Lender in exercising any right shall operate as a waiver of such right or
any other right.  A waiver by Lender of a
provision of this Guaranty shall not prejudice or constitute a waiver of Lender’s
right otherwise to demand strict compliance with that provision or any other
provision of this Guaranty.  No prior
waiver by Lender, nor any course of dealing between Lender and Guarantor, shall
constitute a waiver of any of Lender’s rights or of any of Guarantor’s
obligations as to any future transactions. 
Whenever the consent of Lender is required under this Guaranty, the
granting of such consent by Lender in any instance shall not constitute
continuing consent to subsequent instances where such consent is required and
in all cases such consent may be granted or withheld in the sole discretion of
Lender.

 

Successors and Assigns.  Subject to any limitations stated in this
Guaranty on transfer of Guarantor’s interest, this Guaranty shall be binding
upon and inure to the benefit of the parties, their successors and assigns.

 

DEFINITIONS. 
The following capitalized words and terms shall have the following
meanings when used in this Guaranty. 
Unless specifically stated to the contrary, all references to dollar
amounts shall mean amounts in lawful money of the United States of America.  Words and terms used in the singular shall
include the plural, and the plural shall include the singular, as the context
may require.  Words and terms not
otherwise defined in this Guaranty shall have the meanings attributed to such
terms in the Uniform Commercial Code:

 

Borrower.  The word “Borrower” means AWI GAMING, INC.
and includes all co-signers and co-makers signing the Note and all their
successors and assigns.

 

6

 

GAAP.  The word “GAAP” means generally accepted
accounting principles.

 

Guarantor.  The word “Guarantor” means everyone signing
this Guaranty, including without limitation STURGEON’S, LLC, and in each case,
any signer’s successors and assigns.

 

Guaranty.  The word “Guaranty” means this guaranty from
Guarantor to Lender.

 

Indebtedness.  The word “Indebtedness” means Borrower’s
indebtedness to Lender as more particularly described in this Guaranty.

 

Lender.  The word “Lender” means GREAT BASIN BANK OF
NEVADA, its successors and assigns.

 

Note.  The word “Note” means and includes without
limitation all of Borrower’s promissory notes and/or credit agreements
evidencing Borrower’s loan obligations in favor of Lender, together with all
renewals of, extensions of, modifications of, refinancings of, consolidations
of and substitutions for promissory notes or credit agreements.

 

Related Documents.  The words “Related Documents” mean all
promissory notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust, security deeds,
collateral mortgages, and all other instruments, agreements and documents,
whether now or hereafter existing, executed in connection with the
Indebtedness.

 

EACH UNDERSIGNED
GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND
AGREES TO ITS TERMS.  IN ADDITION, EACH
GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR’S
EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL
CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED “DURATION
OF GUARANTY”.  NO FORMAL ACCEPTANCE BY
LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE.  THIS GUARANTY IS DATED MAY 5, 2008.

 

	
  GUARANTOR:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  STURGEON’S, LLC

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  AWI GAMING, INC., Manager of

  STURGEON’S, LLC

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  John M. Salerno

  	
   

  	
  By:

  	
  /s/
  Bruce E. Dewing

  
	
   

  	
  JOHN M.
  SALERNO,

  	
   

  	
   

  	
    BRUCE
  E. DEWING,

  
	
   

  	
       Secretary/
  Treasurer of AWI

  	
   

  	
   

  	
     President of AWI GAMING,

  
	
   

  	
     GAMING,
  INC.

  	
   

  	
   

  	
     INC.

  
						

 

7

 

LIMITED LIABILITY COMPANY
ACKNOWLEDGMENT

 

	
  STATE OF NEVADA

  	
  }ss.

  	
   

  
	
  COUNTY OF PERSHING

  	
   

  

 

This instrument was
acknowledged before me on May 7th, 2008 by JOHN M. SALERNO,
Secretary/Treasurer of AWI GAMING, INC., Manager of STURGEON’S, LLC and BRUCE
E. DEWING, President of AWI GAMING, INC., Manager of STURGEON’S, LLC, as
designated agents of STURGEON’S, LLC.

 

	
   

  	
  /s/ Shelly Iniguez

  
	
   

  	
  NOTARY PUBLIC

  
	
  [Notary Seal]

  	
  Notary Public in and for State
  of

  Nevada

  

 

8

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