PERSONAL GUARANTY

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 either or both of the Notes, 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

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