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 unmature
