Exhibit 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
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