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EXHIBIT 10.2
COMMERCIAL GUARANTY AGREEMENT
This Commercial Guaranty Agreement (this "Agreement") is made
and entered into effective as of February 15, 1999 (the "Effective Date"), by
LAKES GAMING, INC., a Minnesota corporation (herein sometimes referred to as
"Lakes"), GRAND CASINOS OF LOUISIANA, LLC - COUSHATTA, a Minnesota limited
liability company (herein sometimes referred to as "Grand Casinos/Coushatta")
[Lakes and Grand Casinos/Coushatta are herein referred to individually as a
"Guarantor" and collectively as the "Guarantors"]) in favor of HIBERNIA NATIONAL
BANK (the "Lender"), guaranteeing the Indebtedness (as hereinafter defined) of
the COUSHATTA TRIBE OF LOUISIANA and the COUSHATTA TRIBE OF LOUISIANA BUILDING
AUTHORITY (collectively the "Borrower" whether one or more).
W I T N E S S E T H:
FOR VALUE RECEIVED, and in consideration of and for credit and
financial accommodations extended, to be extended, or continued to or for the
account of the above named Borrower, each of the undersigned Guarantors, whether
one or more, hereby jointly, severally and solidarily, agrees as follows:
SECTION 1. Guaranty of Borrower's Indebtedness. Each Guarantor does
hereby absolutely and unconditionally guarantee the prompt and punctual payment
of all of the indebtedness, including principal, interest, attorneys' fees and
other amounts, of the Borrower to Lender incurred by the Borrower: (a) pursuant
to that certain Commercial Loan Agreement dated as of May 1, 1997, between
Borrower, as borrower, and Lender, as lender, under the terms of which Lender
agreed to loan to Borrower the principal sum of Twenty- Five Million and No/100
Dollars ($25,000,000.00), as amended by that certain First Amendment to
Commercial Loan Agreement dated ________, 1998, and by that certain Second
Amendment to Commercial Loan Agreement dated ________, 1998 (collectively, the
"Loan Agreement"); and (b) pursuant to that certain Promissory Note (the "Note")
also dated as of May 1, 1997, executed by the Borrower in favor of the Lender in
the original principal amount of Twenty-Five Million and No/100 Dollars
($25,000,000.00) in connection with the Loan Agreement, as amended by that
certain First Allonge to Promissory Note dated ________, 1998 and as amended by
that certain Second Allonge to Promissory Note dated ________, 1998 (all such
indebtedness referred to herein as the "Indebtedness"). Notwithstanding anything
to the contrary contained herein, the maximum amount of Indebtedness secured
hereby is Twenty-Five Million and No/100 Dollars ($25,000,000.00) (the "Maximum
Amount").
SECTION 2. Joint, Several and Solidary Liability. Each Guarantor
further agrees that its obligations and liabilities for the prompt and punctual
payment, performance and satisfaction or purchase of all of Borrower's
Indebtedness shall be on a "joint and several" and "solidary" basis with
Borrower to the same degree and extent as if Guarantor had been and/or will be a
co-borrower, co-principal obligor and/or co-maker of all of Borrower's
Indebtedness, up to the Maximum Amount. In the event that there is more than one
guarantor under this Agreement, or in the event that there are other guarantors,
endorsers, or sureties of all or any portion of Borrower's Indebtedness,
Guarantor's obligations and liabilities hereunder shall be on
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a "joint and several" and "solidary" basis along with such other guarantor or
guarantors, endorsers and/or sureties.
SECTION 3. Duration. This Agreement and each Guarantor's obligations
and liabilities hereunder shall remain in full force and effect until such time
as all of Borrower's Indebtedness shall be paid, performed and/or satisfied in
full, in principal, interests costs and attorney's fees, and the Loan Agreement
terminated.
SECTION 4. Default by Borrower.
A. Should an Event of Default as defined in the Loan Agreement
occur, Lender shall notify each of the Guarantors of such an
event. Guarantors shall have the right (but not the
obligation) to attempt to remedy an Event of Default within
the time periods specified in the Loan Agreement. Such notice
shall be given to Guarantors concurrently with notice thereof
being given to the Borrower under the Loan Agreement.
Guarantors may attempt to remedy such an Event of Default and,
if Guarantors cure such an Event of Default, Lender will
accept such a cure thereof by Guarantors.
B. Should an Event of Default as defined in the Loan Agreement
occur and not be timely cured, each Guarantor unconditionally
and absolutely agrees to pay within one-hundred and twenty
days after Lender notifies the Guarantors of such an Event of
Default the full unpaid amount of all of Borrower's
Indebtedness guaranteed hereunder. Such payment or payments
shall be made at Lender's offices as specified in the Loan
Agreement immediately following demand by Lender. Each
Guarantor hereby waives notice of acceptance of this Agreement
and of any Indebtedness to which it applies or may apply. Each
Guarantor further waives presentment and demand for payment of
Borrower's Indebtedness, notice of dishonor, notice of
intention to accelerate, protest and notice of protest,
collection or institution of any suit or other action by
Lender in collection. Each Guarantor additionally waives any
and all rights and pleas of division and discussion as
provided under Louisiana law, as well as, to the degree
applicable, any similar rights as may be provided under the
laws of any other state.
SECTION 5. Guarantor's Subordination of Rights. In the event that a
Guarantor should for any reason (A) advance or lend monies to Borrower, whether
or not such funds are used by Borrower to make payment(s) under Borrower's
Indebtedness, and/or (B) make any payment(s) to Lender or others for and on
behalf of Borrower under Borrower's Indebtedness, and/or (C) make any payment to
Lender in total or partial satisfaction of Guarantor's obligations and
liabilities under this Agreement, each such Guarantor hereby agrees that any and
all rights that Guarantor may have or acquire to collect from or to be
reimbursed by Borrower (or from or by any other guarantor, endorser or surety of
Borrower's Indebtedness), whether Guarantor's rights of collection or
reimbursement arise by way of subrogation to the rights of Lender or otherwise,
shall in all respects, whether or not Borrower is presently or subsequently
becomes insolvent, be subordinate, inferior and junior to the rights of Lender
to collect and enforce payment, performance and
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satisfaction of Borrower's then remaining Indebtedness, until such time as
Borrower's Indebtedness is fully paid and satisfied. So long as no Event of
Default as defined in the Loan Agreement exists, Guarantor may be repaid by
Borrower as to any subordinated debt permitted by the Loan Agreement. In the
event of Borrower's insolvency or consequent liquidation of Borrower's assets,
through bankruptcy, by an assignment for the benefit of creditors, by voluntary
liquidation, or otherwise, the assets of Borrower applicable to the payment of
claims of both Lender and Guarantor shall be paid to Lender and shall be first
applied by Lender to Borrower's then remaining Indebtedness. Notwithstanding
the foregoing, unless and until Lender notifies Guarantors of an Event of
Default pursuant to Section 4(A), each Guarantor may continue to receive from
the Borrower any scheduled payments due under existing indebtedness owed by the
Borrower to the Guarantors.
SECTION 6. Covenants Relating to the Indebtedness. No course of dealing
between Lender and Borrower (or any other Guarantor, surety or endorser of
Borrower's Indebtedness), nor any failure or delay on the part of Lender to
exercise any of Lender's rights and remedies, or any other agreement or
agreements by and between Lender and Borrower (or any other Guarantor, surety or
endorser) shall have the effect of impairing or releasing any Guarantor's
obligations and liabilities to Lender or of waiving any of Lender's rights and
remedies. Any partial exercise of any rights and remedies granted to Lender
shall furthermore not constitute a waiver of any of Lender's other rights and
remedies, it being each Guarantor's intent and agreement that Lender's rights
and remedies shall be cumulative in nature. Each Guarantor further agrees that,
should Borrower default under any of Borrower's Indebtedness, any waiver or
forbearance on the part of Lender to pursue the rights and remedies available to
Lender shall be binding upon Lender only to the extent that Lender specifically
agrees to such waiver or forbearance in writing. A waiver or forbearance on the
part of Lender as to one event of default shall not constitute a waiver or
forbearance as to any other default.
SECTION 7. No Release of Guarantor. Each Guarantor's obligations and
liabilities under this Agreement shall not be released, impaired, reduced or
otherwise affected by, and shall continue in full force and effect,
notwithstanding the occurrence of any event, including without limitation any
one or more of the following events:
A. Insolvency, bankruptcy, arrangement, adjustment,
composition, liquidation, disability, dissolution or
lack of authority (whether corporate, partnership or
trust) of Borrower (or any person acting on
Borrower's behalf), or any other guarantor, surety or
endorser of any of Borrower's Indebtedness;
B. Partial payment or payments of any amount due and/or
outstanding under any of Borrower's Indebtedness;
C. Any payment by Borrower or any other party to Lender
is held to constitute a preferential transfer or a
fraudulent conveyance under any applicable law, or
for any reason, Lender is required to refund such
payment or pay such amount to Borrower or to any
other person;
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D. Any dissolution of Borrower or any sale, lease or
transfer of all or any part of Borrower's assets;
and/or
E. Any failure of Lender to notify Guarantor of the
acceptance of this Agreement or of the making of
loans or other extensions of credit in reliance on
this Agreement.
This Agreement and each Guarantor's obligations and liabilities hereunder shall
continue to be effective, and/or shall automatically and retroactively be
reinstated if a release or discharge has occurred, as the case may be, if at any
time any payment or part thereof to Lender with respect to any of Borrower's
Indebtedness is rescindedor must otherwise be restored by Lender pursuant to 25
U.S.C. 81 et seq. or to any insolvency, bankruptcy, reorganization,
receivership, or any other debt relief granted to Borrower or to any other
party. In the event that Lender must rescind or restore any payment received by
Lender in satisfaction of Borrower's Indebtedness, any prior release or
discharge from the terms of this Agreement given to Guarantor shall be without
effect, and this Agreement and each Guarantor's obligations and liabilities
hereunder shall automatically be renewed or reinstated and shall remain in full
force and effect to the same degree and extent as if such a release or discharge
was never granted. It is the intention of Lender and each Guarantor that
Guarantor's obligations and liabilities hereunder shall not be discharged except
by Guarantor's full and complete performance of such obligations and liabilities
and then only to the extent of such performance.
SECTION 8. Representations and Warranties. Each Guarantor
represents and warrants to the Lender that:
A. To the best of its knowledge, the execution and
delivery of this Agreement will not result in any
violation of, or be in conflict with, or constitute a
default under any mortgage, indenture, deed of trust,
security agreement, lease, contract, agreement,
instrument, obligation, judgment, decree, order,
statute, regulation, or rule applicable to such
Guarantor;
B. This Agreement is valid, enforceable, and binding
upon the Guarantor in accordance with its terms,
conditions, and provisions; and
C. Each Guarantor has received and reviewed an executed
copy of the Loan Agreement.
SECTION 9. Enforcement of Guarantor's Obligations and Liabilities.
Subject to the provision of Section 4 hereof, each Guarantor agrees that
following the occurrence of an Event of Default as defined in the Loan
Agreement, should Lender deem it necessary to file an appropriate collection
action to enforce Guarantor's obligations and liabilities under this Agreement,
Lender may commence such a civil action against Guarantor without the necessity
of first (i) attempting to collect Borrower's Indebtedness from Borrower or from
any other guarantor, surety or endorser, whether through filing of suit or
otherwise, (ii) attempting to exercise against any collateral directly or
indirectly securing repayment of any of Borrower's Indebtedness, whether through
the filing of an appropriate foreclosure action or otherwise, or (iii) including
Borrower or any other guarantor, surety or endorser of any of Borrower's
Indebtedness as an additional party
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defendant in such a collection action against Guarantor. If there is more than
one guarantor under this Agreement, each Guarantor additionally agrees that
Lender may file an appropriate collection and/or enforcement action against any
one or more of them, without impairing the rights of Lender against any other
Guarantor under this Agreement. In the event that Lender should ever deem it
necessary to refer this Agreement to an attorney-at-law for the purpose of
enforcing Guarantor's obligations and liabilities hereunder, or of protecting or
preserving Lender's rights hereunder, each Guarantor agrees to reimburse Lender
for the reasonable fees of such an attorney. Each Guarantor additionally agrees
that Lender shall not be liable for failure to use diligence in the collection
of any of Borrower's Indebtedness or any collateral security therefor, or in
creating or preserving the liability of any person liable on any such
Indebtedness, or in creating, perfecting or preserving any security for any such
Indebtedness.
SECTION 10. Environmental Condition. Neither Guarantor is obligated
pursuant to this Agreement to remediate any environmental or other condition
located in, or on the Property (as defined in the Loan Agreement).
SECTION 11. No Changes. Lender shall not alter, change or amend the
Loan Agreement, the Note or the other documents executed by the Borrower and/ or
Lender in connection therewith, without the prior written consent of the
Guarantors.
SECTION 12. Additional Documents. Upon the reasonable request of
Lender, each Guarantor will, at any time, and from time to time, duly execute
and deliver to Lender any and all such further instruments and documents, and
supply such additional information, as may be necessary or advisable in the
opinion of Lender, to further evidence or perfect this Agreement, provided that
the foregoing does not expand the scope of the Guarantors' obligation or limit
Guarantors' rights hereunder.
SECTION 13. Transfer of Indebtedness.
A. This Agreement is for the benefit of Lender and for
such other person or persons as may from time to time
become or be the holders of any of Borrower's
Indebtedness hereby guaranteed and this Agreement
shall be transferrable and negotiable, with the same
force and effect and to the same extent as Borrower's
Indebtedness may be transferrable, it being
understood that, upon the transfer or assignment by
Lender of any of Borrower's Indebtedness hereby
guaranteed, the legal holder of such Indebtedness
shall have all of the rights granted to Lender under
this Agreement.
B. Each Guarantor hereby recognizes and agrees that
Lender may, from time to time, one or more times,
transfer any portion (but not all) of Borrower's
Indebtedness to one or more third parties provided
that the Lender retains a portion of the
Indebtedness. Such transfers may include, but are not
limited to, sales of a participation interest in such
Indebtedness in favor of one or more third party
lenders, provided that the Lender remains the lead or
agent bank. Each Guarantor specifically agrees and
consents to all such transfers and assignments and
each Guarantor further waives any
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subsequent notice of and right to consent to any such
transfers and assignments as may be provided under
applicable Louisiana law. Each Guarantor additionally
agrees that the purchaser of a participation interest
in Borrower's Indebtedness will be considered as the
absolute owner of a percentage interest of such
Indebtedness and that such a purchaser will have all
of the rights granted to the purchaser under any
participation agreement governing the sale of such a
participation interest.
SECTION 14. Notice. Lender agrees to deliver to each Guarantor a copy
of each and every written notice Lender is required to deliver to Borrower under
the Loan Agreement and the Loan Documents (as that term is defined in the Loan
Agreement). Lender shall deliver such notices to the Guarantors in the manner
required by the Loan Agreement, to the following address:
Lakes Gaming, Inc.
000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Grand Casinos of Louisiana, LLC - Coushatta
Xxxx Xxxxxx Xxx 0000
Xxxxxx, XX 00000
SECTION 15. Subrogation. In the event Guarantors, or any of them, pays
to Lender all sums due under Borrower's Indebtedness up to the Maximum Amount,
then immediately upon such payment, the paying Guarantor or Guarantors, as the
case may be, shall automatically subrogate to any and all rights and remedies
available to Lender against Borrower under the Loan Agreement and the Loan
Documents.
SECTION 16. Miscellaneous.
A. Construction. The provisions of this Agreement shall be in
addition to and cumulative of, and not in substitution, novation or discharge
of, any and all prior or contemporaneous guaranty or other agreements by
Guarantor (or any one or more of them), in favor of Lender or assigned to Lender
by others, all of which shall be construed as complementing each other. Nothing
herein contained shall prevent Lender from enforcing any and all such other
guaranties or agreements in accordance with their respective terms.
B. Amendment. No amendment, modification, consent or waiver of
any provision of this Agreement, and no consent to any departure by Guarantor
therefrom, shall be effective unless the same shall be in writing signed by a
duly authorized officer of Lender, and then shall be effective only to the
specific instance and for the specific purpose for which given.
C. Successors and Assigns Bound. Each Guarantor's obligations
and liabilities under this Agreement shall be binding upon Guarantor's
successors, heirs, legatees, devisees, administrators, executors and assigns.
The rights and remedies granted to Lender under this Agreement shall also inure
to
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the benefit of Lender's successors and assigns, as well as to any and all
subsequent holder or holders of any of Borrower's Indebtedness subject to this
Agreement.
D. Caption Headings. Caption headings of the sections of this
Agreement are for convenience purposes only and are not to be used to interpret
or to define their provisions. In this Agreement, whenever the context so
requires, the singular includes the plural and the plural also includes the
singular.
E. Governing Law. This Agreement shall be governed and
construed in accordance with the substantive laws of the State of Louisiana.
F. Severability. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable, this Agreement
shall be construed and enforceable as if the illegal, invalid or unenforceable
provision had never comprised a part of it, and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance herefrom.
G. Consent to Jurisdiction. EACH GUARANTOR HEREBY IRREVOCABLY
CONSENTS TO THE JURISDICTION OF THE STATE COURTS OF LOUISIANA AND THE FEDERAL
COURTS IN LOUISIANA, AND AGREES THAT ANY ACTION OR PROCEEDING ARISING OUT OF OR
BROUGHT TO ENFORCE THE PROVISIONS OF THIS AGREEMENT MAY BE BROUGHT IN ANY COURT
HAVING SUBJECT MATTER JURISDICTION.
IN WITNESS WHEREOF, each Guarantor has executed this Agreement in favor
of Lender on the date shown below the following signatures, but effective as of
the Effective Date.
WITNESSES: LAKES GAMING, INC
By:/s/ Xxxxxxx Xxxx
---------------- ----------------
Xxxxxxx Xxxx, Its Chief Financial Officer
---------------- Date: Xxxxx 0, 0000
XXXXX XXXXXXX OF LOUISIANA, LLC -- COUSHATTA
By:/s/ Xxxxxxx Xxxx
---------------- ----------------
Xxxxxxx Xxxx, Its Chief Financial Officer
---------------- Date: March 5, 1999
ACCEPTED:
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HIBERNIA NATIONAL BANK
By:
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Date:
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STATE OF MINNESOTA,
COUNTY OF __________.
On this day of , 1998, before me
appeared XXXXXXX XXXX, to me known, who, being by me duly sworn, did say:
That he is the Chief Financial Officer of LAKES GAMING, INC.,
a Minnesota corporation, and that the foregoing instrument was signed in behalf
of said corporation by authority of its Board of Directors, and said Appearer
acknowledged said instrument to be the free act and deed of said corporation.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
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NOTARY PUBLIC in and for
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STATE OF MINNESOTA,
COUNTY OF __________.
On this day of , 1998, before me
appeared XXXXXXX XXXX, to me known, who, being by me duly sworn, did say:
That he is the Chief Financial Officer of GRAND CASINOS OF
LOUISIANA, LLC-- COUSHATTA, a Minnesota limited liability company, and that the
foregoing instrument was signed in behalf of said limited liability company by
authority of its Members, and said Appearer acknowledged said instrument to be
the free act and deed of said limited liability company.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
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NOTARY PUBLIC in and for
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