EXHIBIT 10.4
EXECUTION COPY
CONTINUING GUARANTY
FOR VALUE RECEIVED, the sufficiency of which is hereby acknowledged, and
in consideration of credit and/or financial accommodation heretofore or
hereafter from time to time made or granted to Lakes Gaming and Resorts, LLC
(the "Borrower") by the Lenders (as defined in the Credit Agreement)
(collectively the "Lenders"), the undersigned Guarantors (whether one or more
the "Guarantor", and if more than one jointly and severally) hereby furnishes
its guaranty of the Guaranteed Obligations (as hereinafter defined) as follows:
1. GUARANTY. The Guarantor hereby absolutely and unconditionally
guarantees, as a guaranty of payment and performance and not merely as a
guaranty of collection, prompt payment when due, whether at stated maturity, by
required prepayment, upon acceleration, demand or otherwise, and at all times
thereafter, of any and all existing and future indebtedness and liabilities of
every kind, nature and character, direct or indirect, absolute or contingent,
liquidated or unliquidated, voluntary or involuntary and whether for principal,
interest, premiums, fees indemnities, damages, costs, expenses or otherwise, of
the Borrower to the Secured Parties, arising under that certain Credit Agreement
dated June 22, 2006 between the Borrower, Holdings, the Lenders and Bank of
America, N.A. as administrative agent (the "Credit Agreement") and any other
Loan Documents (including all renewals, extensions, amendments, refinancings and
other modifications thereof and all costs, attorneys' fees and expenses incurred
by the Secured Parties in connection with the collection or enforcement
thereof), and whether recovery upon such indebtedness and liabilities may be or
hereafter become unenforceable or shall be an allowed or disallowed claim under
any proceeding or case commenced by or against the Guarantor or the Borrower
under the Bankruptcy Code (Title 11, United States Code), any successor statute
or any other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally (collectively, "Debtor Relief Laws"), and including interest
that accrues after the commencement by or against the Borrower of any proceeding
under any Debtor Relief Laws (collectively, the "Guaranteed Obligations"). The
Lender's books and records showing the amount of the Guaranteed Obligations
shall be admissible in evidence in any action or proceeding, and shall be
binding upon the Guarantor and conclusive for the purpose of establishing the
amount of the Guaranteed Obligations. This Guaranty shall not be affected by the
genuineness, validity, regularity or enforceability of the Guaranteed
Obligations or any instrument or agreement evidencing any Guaranteed
Obligations, or by the existence, validity, enforceability, perfection,
non-perfection or extent of any collateral therefor, or by any fact or
circumstance relating to the Guaranteed Obligations which might otherwise
constitute a defense to the obligations of the Guarantor under this Guaranty,
and the Guarantor hereby irrevocably waives any defenses it may now have or
hereafter acquire in any way relating to any or all of the foregoing.
2. NO SETOFF OR DEDUCTIONS; TAXES; PAYMENTS. The Guarantor represents and
warrants that it is organized and resident in the United States of America. The
Guarantor shall make all payments hereunder without setoff or counterclaim and
free and clear of and without deduction for any taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or levied by any jurisdiction
or any political subdivision thereof or taxing or other authority therein unless
the Guarantor is compelled by law to make such deduction or withholding. If any
such obligation (other than one arising with respect to taxes based on or
measured by the income or profits of the Secured Parties) is imposed upon the
Guarantor with respect to any amount payable by it hereunder, the Guarantor will
pay to the Secured Parties, on the date on which such amount is due and payable
hereunder, such additional amount in U.S. dollars as shall be necessary to
enable the
Guaranty Agreement
Secured Parties to receive the same net amount which the Secured Parties would
have received on such due date had no such obligation been imposed upon the
Guarantor. The Guarantor will deliver promptly to the Secured Parties
certificates or other valid vouchers for all taxes or other charges deducted
from or paid with respect to payments made by the Guarantor hereunder. The
obligations of the Guarantor under this paragraph shall survive the payment in
full of the Guaranteed Obligations and termination of this Guaranty. Anything
contained herein to the contrary notwithstanding, the obligations of the
Guarantor hereunder at any time shall be limited to an aggregate amount equal to
the largest amount that would not render its obligations hereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of the
Bankruptcy Code (Title 11, United States Code) or any comparable provisions of
any similar federal or state law.
3. RIGHTS OF LENDER. The Guarantor consents and agrees that the Secured
Parties may, at any time and from time to time, without notice or demand, and
without affecting the enforceability or continuing effectiveness hereof: (a)
amend, extend, renew, compromise, discharge, accelerate or otherwise change the
time for payment or the terms of the Guaranteed Obligations or any part thereof;
(b) take, hold, exchange, enforce, waive, release, fail to perfect, sell, or
otherwise dispose of any security for the payment of this Guaranty or any
Guaranteed Obligations; (c) apply such security and direct the order or manner
of sale thereof as the Administrative Agent and the Lenders in their sole
discretion may determine; and (d) release or substitute one or more of any
endorsers or other guarantors of any of the Guaranteed Obligations. Without
limiting the generality of the foregoing, the Guarantor consents to the taking
of, or failure to take, any action which might in any manner or to any extent
vary the risks of the Guarantor under this Guaranty or which, but for this
provision, might operate as a discharge of the Guarantor.
4. CERTAIN WAIVERS. The Guarantor waives (a) any defense arising by reason
of any disability or other defense of the Borrower or any other guarantor, or
the cessation from any cause whatsoever (including any act or omission of any
Secured Party) of the liability of the Borrower; (b) any defense based on any
claim that the Guarantor's obligations exceed or are more burdensome than those
of the Borrower; (c) the benefit of any statute of limitations affecting the
Guarantor's liability hereunder; (d) any right to require the Secured Parties to
proceed against the Borrower, proceed against or exhaust any security for the
Indebtedness, or pursue any other remedy in the Secured Parties' power
whatsoever; (e) any benefit of and any right to participate in any security now
or hereafter held by any Secured Party; and (f) to the fullest extent permitted
by law, any and all other defenses or benefits that may be derived from or
afforded by applicable law limiting the liability of or exonerating guarantors
or sureties. The Guarantor expressly waives all setoffs and counterclaims and
all presentments, demands for payment or performance, notices of nonpayment or
nonperformance, protests, notices of protest, notices of dishonor and all other
notices or demands of any kind or nature whatsoever with respect to the
Guaranteed Obligations, and all notices of acceptance of this Guaranty or of the
existence, creation or incurrence of new or additional Guaranteed Obligations.
The Guarantor waives any rights and defenses that are or may become available to
the Guarantor by reason of Sections 2787 to 2855, inclusive, 2899 and 3433 of
the California Civil Code. As provided below, this Guaranty shall be governed
by, and construed in accordance with, the laws of the State of New York. The
foregoing waivers and the provisions hereinafter set forth in this Guaranty
which pertain to California law are included solely out of an abundance of
caution, and shall not be construed to mean that any of the above referenced
provisions of California law are in any way applicable to this Guaranty or the
Guaranteed Obligations.
5. OBLIGATIONS INDEPENDENT. The obligations of the Guarantor hereunder are
those of primary obligor, and not merely as surety, and are independent of the
Guaranteed Obligations and the obligations of any other guarantor, and a
separate action may be brought against the Guarantor to enforce this Guaranty
whether or not the Borrower or any other person or entity is joined as a party.
Guaranty Agreement
6. SUBROGATION. The Guarantor shall not exercise any right of subrogation,
contribution, indemnity, reimbursement or similar rights with respect to any
payments it makes under this Guaranty until all of the Guaranteed Obligations
and any amounts payable under this Guaranty have been indefeasibly paid and
performed in full and any commitments of the Lenders or facilities provided by
the Lender with respect to the Guaranteed Obligations are terminated. If any
amounts are paid to the Guarantor in violation of the foregoing limitation, then
such amounts shall be held in trust for the benefit of the Secured Parties and
shall forthwith be paid to the Secured Parties to reduce the amount of the
Guaranteed Obligations, whether matured or unmatured.
7. TERMINATION; REINSTATEMENT. This Guaranty is a continuing and
irrevocable guaranty of all Guaranteed Obligations now or hereafter existing and
shall remain in full force and effect until all Guaranteed Obligations and any
other amounts payable under this Guaranty are indefeasibly paid in full in cash
and any commitments of the Lenders or facilities provided by the Lenders with
respect to the Guaranteed Obligations are terminated. Notwithstanding the
foregoing, this Guaranty shall continue in full force and effect or be revived,
as the case may be, if any payment by or on behalf of the Borrower or the
Guarantor is made, or any Lender exercises its right of setoff, in respect of
the Guaranteed Obligations and such payment or the proceeds of such setoff or
any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Secured Parties in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any proceeding under
any Debtor Relief Laws or otherwise, all as if such payment had not been made or
such setoff had not occurred and whether or not the Secured Parties is in
possession of or has released this Guaranty and regardless of any prior
revocation, rescission, termination or reduction. The obligations of the
Guarantor under this paragraph shall survive termination of this Guaranty.
8. SUBORDINATION. The Guarantor hereby subordinates the payment of all
obligations and indebtedness of the Borrower owing to the Guarantor, whether now
existing or hereafter arising, including but not limited to any obligation
(other than, unless a Default or Event of Default has occurred and is
continuing, any cash management arrangements entered into in the ordinary course
of business and consistent with past practice) of the Borrower to the Guarantor
as subrogee of the Secured Parties or resulting from the Guarantor's performance
under this Guaranty, to the indefeasible payment in full in cash of all
Guaranteed Obligations. If the Secured Parties so request, any such obligation
or indebtedness of the Borrower to the Guarantor shall be enforced and
performance received by the Guarantor as trustee for the Secured Parties and the
proceeds thereof shall be paid over to the Secured Parties on account of the
Guaranteed Obligations, but without reducing or affecting in any manner the
liability of the Guarantor under this Guaranty.
9. STAY OF ACCELERATION. In the event that acceleration of the time for
payment of any of the Guaranteed Obligations is stayed, in connection with any
case commenced by or against the Guarantor or the Borrower under any Debtor
Relief Laws, or otherwise, all such amounts shall nonetheless be payable by the
Guarantor immediately upon demand by the Secured Parties.
10. EXPENSES. The Guarantor shall pay on demand all reasonable
out-of-pocket expenses (including reasonable attorneys' fees and expenses but
excluding the allocated cost and disbursements of internal legal counsel) in any
way relating to the enforcement or protection of the Secured Parties' rights
under this Guaranty or in respect of the Guaranteed Obligations, including any
incurred during any "workout" or restructuring in respect of the Guaranteed
Obligations and any incurred in the preservation, protection or enforcement of
any rights of the Secured Parties in any proceeding any Debtor Relief Laws. The
obligations of the Guarantor under this paragraph shall survive the payment in
full of the Guaranteed Obligations and termination of this Guaranty.
Guaranty Agreement
11. MISCELLANEOUS. No provision of this Guaranty may be waived, amended,
supplemented or modified, except by a written instrument executed by the Secured
Parties and the Guarantor. No failure by the Secured Parties to exercise, and no
delay in exercising, any right, remedy or power hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy or
power hereunder preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law or in equity. The
unenforceability or invalidity of any provision of this Guaranty shall not
affect the enforceability or validity of any other provision herein. Unless
otherwise agreed by the Secured Parties and the Guarantor in writing, this
Guaranty is not intended to supersede or otherwise affect any other guaranty now
or hereafter given by the Guarantor for the benefit of the Secured Parties or
any term or provision thereof.
12. CONDITION OF BORROWER. The Guarantor acknowledges and agrees that it
has the sole responsibility for, and has adequate means of, obtaining from the
Borrower and any other guarantor such information concerning the financial
condition, business and operations of the Borrower and any such other guarantor
as the Guarantor requires, and that none of the Secured Parties has any duty,
and the Guarantor is not relying on the Secured Parties at any time, to disclose
to the Guarantor any information relating to the business, operations or
financial condition of the Borrower or any other guarantor (the guarantor
waiving any duty on the part of the Secured Parties to disclose such information
and any defense relating to the failure to provide the same).
13. SETOFF. If and to the extent any payment is not made when due
hereunder, the Secured Parties may setoff and charge from time to time any
amount so due against any or all of the Guarantor's accounts or deposits with
the Secured Parties.
14. REPRESENTATIONS AND WARRANTIES. The Guarantor represents and warrants
that (a) it is duly organized and in good standing under the laws of the
jurisdiction of its organization and has full capacity and right to make and
perform this Guaranty, and all necessary authority has been obtained; (b) this
Guaranty constitutes its legal, valid and binding obligation enforceable in
accordance with its terms; (c) the making and performance of this Guaranty does
not and will not violate the provisions of any applicable law, regulation or
order, and does not and will not result in the breach of, or constitute a
default or require any consent under, any material agreement, instrument, or
document to which it is a party or by which it or any of its property may be
bound or affected; and (d) all consents, approvals, licenses and authorizations
of, and filings and registrations with, any governmental authority required
under applicable law and regulations for the making and performance of this
Guaranty have been obtained or made and are in full force and effect.
15. INDEMNIFICATION AND SURVIVAL. Without limitation on any other
obligations of the Guarantor or remedies of the Secured Parties under this
Guaranty, the Guarantor shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless the Secured Parties from and
against, and shall pay on demand, any and all damages, losses, liabilities and
expenses (including attorneys' fees and expenses and the allocated cost and
disbursements of internal legal counsel) that may be suffered or incurred by the
Secured Parties in connection with or as a result of any failure of any
Guaranteed Obligations to be the legal, valid and binding obligations of the
Borrower enforceable against the Borrower in accordance with their terms. The
obligations of the Guarantor under this paragraph shall survive the payment in
full of the Guaranteed Obligations and termination of this Guaranty.
16. GOVERNING LAW; ASSIGNMENT; JURISDICTION; NOTICES. THIS GUARANTY SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF NEW YORK. This Guaranty shall (a) bind the Guarantor and its
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successors and assigns, provided that the Guarantor may not assign its rights or
obligations under this Guaranty without the prior written consent of the Secured
Parties (and any attempted assignment without such consent shall be void), and
(b) inure to the benefit of the Secured Parties and its successors and assigns
and the Secured Parties may, without notice to the Guarantor and without
affecting the Guarantor's obligations hereunder, assign, sell or grant
participations in the Guaranteed Obligations and this Guaranty, in whole or in
part. The Guarantor hereby irrevocably (i) submits to the non-exclusive
jurisdiction of any United States Federal or State court sitting in New York,
New York in any action or proceeding arising out of or relating to this
Guaranty, and (ii) waives to the fullest extent permitted by law any defense
asserting an inconvenient forum in connection therewith. Service of process by
the Secured Parties in connection with such action or proceeding shall be
binding on the Guarantor if sent to the Guarantor by registered or certified
mail at its address specified below or such other address as from time to time
notified by the Guarantor. The Guarantor agrees that the Secured Parties may
disclose to any assignee of or participant in, or any prospective assignee of or
participant in, any of its rights or obligations of all or part of the
Guaranteed Obligations any and all information in the Secured Parties'
possession concerning the Guarantor, this Guaranty and any security for this
Guaranty. All notices and other communications to the Guarantor under this
Guaranty shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopier to the
Guarantor at its address set forth below or at such other address in the United
States as may be specified by the Guarantor in a written notice delivered to the
Secured Parties at such office as the Secured Parties may designate for such
purpose from time to time in a written notice to the Guarantor.
17. WAIVER OF JURY TRIAL; FINAL AGREEMENT. TO THE EXTENT ALLOWED BY
APPLICABLE LAW, THE GUARANTOR AND THE SECURED PARTIES EACH IRREVOCABLY WAIVES
TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING ON, ARISING
OUT OF OR RELATING TO THIS GUARANTY OR THE GUARANTEED OBLIGATIONS. THIS GUARANTY
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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Guaranty Agreement
Executed as of the date first written above.
Borders Land Company, LLC
Great Lakes Gaming of Michigan, LLC
Lakes Cloverdale, LLC
Lakes Game Development, LLC
Lakes Gaming -- Mississippi, LLC
Lakes Iowa Consulting, LLC
Lakes Iowa Management, LLC
Lakes Jamul Development, LLC
Lakes Jamul, Inc.
Lakes KAR- Shingle Springs, LLC
Lakes Kean Argovitz Resorts - California, LLC
Lakes Kickapoo Consulting, LLC
Lakes Kickapoo Management, LLC
Lakes Nipmuc, LLC
Lakes Pawnee Consulting, LLC
Lakes Pawnee Management, LLC
Lakes Poker Tour, LLC
Lakes Shingle Springs, Inc.
By: /s/ Timothy J. Cope
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Name: Timothy J. Cope
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Title: President and Chief Financial Officer
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Guaranty Agreement