Document:

Exhibit 10.10

 

 

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 the Note, 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

 

2

 

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

 

3

 

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.

 

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 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

 

4

 

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.

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

5

 

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

  

 

6Exhibit 10.11

 

GUARANTY BY TRUST

 

This Guaranty, dated as
of October 20, 2005, is made by the                               
Trust (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 principal, accrued interest and late charges, if any, on that
certain $2,500,000 Term Note of even date herewith executed by the Borrower and
payable to the order of the Lender (the “Term Note”) and any and all renewals
thereof including notes taken in substitution therefore, together with the full
and prompt payment of any and all costs and expenses of and incidental to the
collection of the Term Note and the enforcement of this Guaranty including,
without limitation, reasonable attorney’s fees (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 trust, 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 trust and do not and will not violate the
provisions of, or constitute a default under, any presently applicable law or
its trust agreement or any agreement presently binding on it; (iii) this
Guaranty has been duly executed and delivered by the trustee(s) 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 proper trust purpose.  The Guarantor agrees (i) that 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 Guarantor’s creditors; and (v) the Lender has agreed to
make such loans in reliance upon this Guaranty. 
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 trustee(s), 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 

 

2

 

enforce any right of
contribution to recover any such sums from any person who is a co-obligor 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
as against the Lender 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

 

3

 

judicata, statute of
frauds, anti-deficiency statute, fraud, incapacity, minority, usury, illegality
or unenforceability which 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

 

4

 

be waived, modified,
amended, terminated, released or otherwise changed except by a writing 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.

 

15.           Notwithstanding the aggregate amount of the
Indebtedness which may from time to time be outstanding, the Guarantor’s
liability hereunder shall be limited to $400,000 plus all attorney’s fees,
collection costs and enforcement expenses incurred in connection with the
enforcement of this Guaranty.  The
Indebtedness 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
Indebtedness 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.

 

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

 

 

	
   

  	
   

  
	
   

  	
                                  ,
  Trustee of the

  
	
   

  	
                                                     
  Trust

  
	
   

  	
   

  
	
  STATE OF
  MINNESOTA

  	
  )

  
	
   

  	
  ) ss

  
	
  COUNTY OF

  	
  )

  
			

 

5

 

The foregoing instrument
was acknowledged before me this       day of            ,
2005, by                     ,
the trustee of the                             
Trust, on behalf of the trust.

 

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

6

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