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Exhibit 10.5
GUARANTY AGREEMENT
THIS
AGREEMENT is made as of this 15th day of December, 2005, by the
undersigned for the benefit of LYLE BERMAN
FAMILY PARTNERSHIP, a Minnesota
general partnership(herein, with its
participants, successors and assigns,
called "LENDER").
For good
and valuable consideration, the receipt and sufficiency of
which
are hereby acknowledged, and to induce
Lender from time to time to make one or
more loans or extend other financial
accommodations at the discretion of the
Lender to LAKES ENTERTAINMENT, INC., a
Minnesota corporation and LAKES POKER
TOUR, LLC, a Minnesota limited liability
company (each a "BORROWER" and
collectively the "BORROWERS"), each of the
undersigned hereby guarantee(s) and
agree(s) as follows:
The
undersigned hereby absolutely and unconditionally guarantee(s)
to
Lender the full and prompt payment when due
(whether on demand or at a stated
maturity or earlier by reason of
acceleration or otherwise) of any and all
present and future debts, liabilities and
obligations owed to Lender by
Borrowers; and the undersigned
represent(s), warrant(s) and agree(s) that:
1. The
debts, liabilities and obligations guaranteed hereby
(collectively
referred to herein as the "Indebtedness")
shall include, but shall not be
limited to, debts, liabilities and
obligations of the Borrowers arising out of
Loan Agreement.
2. No act
or thing need occur to establish the liability of the
undersigned hereunder, and no act or thing,
except full payment and discharge of
all Indebtedness, shall in any way
exonerate the undersigned or modify, reduce,
limit or release the liability of the
undersigned 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 undersigned, whether
or not all Indebtedness is paid in full,
until this Guaranty is revoked
prospectively as to future transactions, by
written notice actually received by
Lender, and such revocation shall not be
effective as to Indebtedness existing
or committed for at the time of actual
receipt of such notice by Lender, or as
to any renewals, extensions and
refinancings thereof. Any adjudication of
bankruptcy or death or disability or
incapacity of the undersigned shall not
revoke this guaranty, except upon actual
receipt of written notice thereof by
Lender and then only prospectively, as to
future transactions, as herein set
forth.
3. If the
undersigned shall die, shall be or become insolvent or shall
initiate or have initiated against the
undersigned any act, process or
proceeding under the United States
Bankruptcy Code or any other bankruptcy,
insolvency or reorganization law or
otherwise for the modification or adjustment
of the rights of creditors, then the
undersigned will forthwith pay to Lender,
the full amount of all Indebtedness then
outstanding, whether or not any
Indebtedness is then due and payable.
4. Until
all of the Indebtedness and the obligations of the undersigned
hereunder have been paid in full, the
undersigned (i) shall not have and waives
any right or subrogation to any of the
rights of Lender against Borrower, any
other guarantor, maker or endorser, and
waives its rights to
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any reimbursement, contribution, recourse
and indemnity therefrom, (ii) waives
any right to enforce any remedy which
Lender now has or may hereafter have
against Borrower, and any other guarantor,
maker or endorser, and (iii) waives
any benefit of, and any other right to
participate in, any collateral security
for the Indebtedness or any guaranty of the
Indebtedness now or hereafter held
by Lender.
5. If any
payment received and applied by Lender to Indebtedness is
thereafter set aside, recovered or required
to be returned for any reason
(including, without limitation, the
bankruptcy, insolvency or reorganization of
Borrower or such other person), the
Indebtedness to which such payment was
applied shall, for the purposes 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 not been
made.
6. Lender
shall not be obligated by reason of its acceptance of this
Guaranty to engage in any transactions with
or for Borrower. Whether or not any
existing relationship between the
undersigned and Borrower has been changed or
ended and whether or not this Guaranty has
been revoked in accordance with
Paragraph 2, Lender may enter into
transactions resulting in the creation or
continuance of Indebtedness and may
otherwise agree, consent to, or suffer the
creation or continuance of any
Indebtedness, without any consent or approval by
the undersigned and without any prior or
subsequent notice to the undersigned.
The liability of the undersigned shall not
be affected or impaired by any of the
following acts or things (which 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 undersigned): (i) any acceptance
of collateral security, guarantors,
accommodation parties or sureties for any or
all Indebtedness; (ii) one or more
extensions or renewals of Indebtedness
(whether or not for longer than the
original period) or any modification of the
interest rates, maturities or other
contractual terms applicable to any
Indebtedness; (iii) any waiver or
indulgence granted to Borrower, any delay or
lack of diligence in the enforcement of
Indebtedness, or any failure to
institute proceedings, file a claim, give
any required notices or otherwise
protect any Indebtedness; (iv) any full or
partial release of, compromise or
settlement with, or agreement not to sue
Borr
