SIGNATURES
Pursuant to the requirements of
the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto duly authorized.
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SOUTHWEST
CASINO CORPORATION
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Date:
March 13, 2008
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By:
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/s/
Thomas E. Fox
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Name:
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Thomas
E. Fox
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Title:
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President
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5
SOUTHWEST CASINO CORPORATION
CURRENT REPORT ON FORM 8-K
EXHIBIT INDEX
Exhibit No.
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Description
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Method
of Filing
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4.1
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Form of
Warrant issued March 10, 2008 issued by Southwest Casino Corporation
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Filed herewith
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4.2
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Form of
Registration Rights Agreement dated March 10, 2008 between Southwest
Casino Corporation and warrantholders
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Filed herewith
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10.1
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Form of
Promissory Note among Southwest Casino & Hotel Corp., Crown Bank
N.A. and co-signers entered into March 7, 2008.
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Filed herewith
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10.2
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Contribution
Agreement among Southwest Casino & Hotel Corp., co-signers and
guarantors dated March 7, 2008.
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Filed herewith
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10.3
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Stock
Pledge Agreement dated March 7, 2008 among Southwest Casino Corporation,
co-signers and guarantors.
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Filed herewith
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10.4
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Form of
Amended and Restated Personal Guaranty by James Druck, Thomas Fox and Jeffrey
Halpern, officers of Southwest Casino Corporation, dated March 7, 2008
for the benefit of Crown Bank
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Filed herewith
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*
Pursuant to
Item 601(b)(2) of Regulation S-B, the registrant agrees to furnish,
supplementally, a copy of any exhibit or schedule omitted from any as filed
exhibit to this report to the Securities and Exchange Commission upon request.
6
Exhibit 4.1
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK
PURCHASED UPON EXERCISE OF THIS WARRANT MAY BE TRANSFERRED WITHOUT (I) THE
OPINION OF COUNSEL SATISFACTORY TO SOUTHWEST CASINO CORPORATION THAT SUCH
TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE FEDERAL
SECURITIES ACT OF 1933 AND APPLICABLE STATE LAW; OR (II) SUCH
REGISTRATION. IN ADDITION, THE
UNDERLYING SHARES OF COMMON STOCK ARE SUBJECT TO RESTRICTION AND RIGHTS OF
REDEMPTION CONTAINED IN THE COMPANYS AMENDED AND RESTATED ARTICLES OF
INCORPORATION, AS THE SAME MAY BE AMENDED FROM TIME TO TIME.
SOUTHWEST
CASINO CORPORATION
WARRANT
TO PURCHASE SHARES OF COMMON STOCK
Void after 4:00 p.m.,
Minneapolis, Minnesota time on March 9, 2013
This warrant (
Warrant
) certifies that
(
Holder
), is entitled to purchase,
subject to fulfillment of the terms and conditions in this Warrant (including,
to the extent required, the approval of all state and federal regulatory
authorities having jurisdiction over Southwest Casino Corporation (the
Company
)), from the Company at any time
before 4:00 p.m. Minneapolis time on March 9, 2013 (the
Exercise Period
),
shares of Common Stock of the Company (
Common Stock
)
at the purchase price of $0.39 per share.
The number of shares of Common Stock Holder will receive upon exercise
of this Warrant and the price to be paid for a share of Common Stock may be
adjusted from time to time as stated in this Warrant. The shares of Common
Stock deliverable upon exercise of this Warrant are sometimes referred to as
Warrant Shares
and the purchase price of each share of
Common Stock under this Warrant is sometimes referred to as the
Exercise Price
. The
term
Warrant
as used in this Warrant
includes any warrants issued in exchange for, substitution for, and replacement
of this Warrant or into which this Warrant may be divided or exchanged.
Section 1.
Exercise of Warrant
.
Subject to the provisions of this Warrant (including, but not limited
to, the approval of all state and federal regulatory authorities that have
jurisdiction over the Company), this Warrant may be exercised at any time by
the presentation and surrender to the Company of this Warrant with (1) the
Purchase Form attached as Exhibit A, duly executed by the Holder, and
(2) payment, in cash, by wire transfer to an account of the Company, or by
certified or official bank check payable to the order of the Company, of the
Exercise Price payable for the Warrant Shares being purchased (payment must
include all applicable federal and state taxes). If the Holder purchases less than all of the
Warrant Shares, the Company will execute and deliver to the Holder a new
Warrant evidencing the right of the Holder to purchase the balance of the
shares purchasable under the Warrant Shares on the terms provided in this
Warrant.
As soon as practicable
after the exercise of this Warrant and payment of the Exercise Price, the
Company will cause to be issued in the name of and delivered to the Holder, or
as the Holder may direct, a certificate or certificates representing the number
of Warrant Shares purchased. The Company
may require that the certificate or certificates contain a legend substantially
as follows:
1
The securities
represented by this certificate (i) have not been registered under the
Securities Act of 1933, as amended, or any state securities laws; (ii) may
not be sold, offered for sale, or transferred in the absence of either an
effective registration under the Securities Act of 1933, as amended, and under
the applicable state securities laws, or an opinion of counsel for the Company
that such transaction is exempt from registration under the Securities Act of 1933,
as amended, and under the applicable state securities laws; and (iii) a
holder of the securities will be required to comply with all federal and state rules and
regulations regarding gaming operations applicable to the Company and its
subsidiaries and may be required to sell the securities to the Company or
otherwise dispose of the securities if continued ownership of the securities by
the holder may result in a violation of applicable rules or regulations or
the disapproval, modification, loss or non-renewal of any contract or license
or other consent or approval related to the gaming operations of the Company or
any subsidiary of the Company.
Section 2.
Reservation of Shares
.
The Company agrees that, at all times until the expiration of this Warrant,
it will reserve for issuance and delivery upon exercise of this Warrant the
number of shares of its Common Stock required for issuance or delivery upon
exercise of this Warrant.
Section 3.
Assignment or Loss of
Warrant
. This Warrant is issued subject to the
following terms, conditions, and limitations:
3.1
Assignment/Transfer of
Warrant
. This Warrant is not assignable or
transferable unless accompanied by a favorable opinion of counsel satisfactory
to the Company, as stated in Section 6 of this Warrant; except that it may
be transferred according to the terms of the will of the Holder, or the law of
intestate succession, upon the death of the Holder. Any assignment must be made by surrender of
this Warrant to the Company with a Form of Assignment acceptable to the
Company and duly executed and with funds sufficient to pay any transfer tax;
whereupon the Company, without charge, will execute and deliver a new warrant
in the name of the assignee named in the instrument of assignment and this
Warrant will be promptly canceled.
3.2
Loss of Warrant
.
Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction, or mutilation of this Warrant, and (in the case of loss,
theft or destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Warrant if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date to the Holder or such
Holders designee.
Section 4.
Rights of the Holder
.
The Holder, by virtue of this Warrant, is not entitled to any rights of
a stockholder in the Company, either at law or in equity, and the rights of the
Holder are limited to those expressed in this Warrant and are not enforceable
against the Company except to the extent stated in this Warrant.
Section 5.
Registration Rights
.
The shares of Common Stock issuable upon exercise of this Warrant are
subject to the registration rights stated in the separate Registration Rights
Agreement between the Company and the Holder dated the same date as this
Warrant.
Section 6.
Anti-Dilution Provisions
.
6.1
Issuance of Dividends
and/or Stock Splits
. If, before this Warrant is
exercised or expires, the Company declares and issues any shares of its Common
Stock as a stock dividend or subdivides the number of outstanding shares of its
Common Stock into a greater number of shares, the
2
then applicable Exercise
Price will be proportionately reduced and the number of shares then purchasable
under this Warrant will be proportionately increased. Conversely, if the Company reduces the number
of outstanding shares of Common Stock by combining shares into a smaller number
of shares (e.g. reverse stock split), the then applicable Exercise Price will
be proportionately increased and the number of shares of Common Stock then
purchasable under this Warrant will be proportionately decreased. Any dividend paid or distributed upon the
Common Stock in securities convertible into shares of Common Stock will be
treated as a dividend paid in Common Stock to the extent that shares of Common
Stock are issuable upon the conversion of such convertible security.
6.2
Fractional Shares
.
No fractional shares or script representing fractional shares of Common
Stock will be issued upon the exercise of this Warrant. With respect to any fraction of a share
called for upon any exercise of this Warrant, the Company will pay to the
Holder an amount in cash equal to that fraction multiplied by the market value
of a full share of Common Stock on the day of exercise, as determined in good
faith by the Company.
6.3
Reclassification,
Reorganization or Merger
. In case of
any reclassification, capital reorganization, or other change of outstanding
shares of Common Stock of the Company (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of an issuance of Common Stock by way of dividend or other distribution
or of a subdivision or combination), or in case of any consolidation or merger
of the Company with or into another corporation (other than a merger with a
subsidiary in which the Company is the continuing corporation and which does
not result in any reclassification, capital reorganization, or other change of
outstanding shares of Common Stock), or in case of any sale or conveyance of
all or substantially all of the assets of the Company to another corporation,
the Company shall cause effective provision to be made so that the Holder shall
have the right thereafter, by exercising this Warrant, to purchase the kind and
amount of shares of stock and other securities and property receivable upon
that reclassification, capital reorganization, or other change, consolidation,
merger, sale or conveyance as may be issued or payable with respect to or in
exchange for the number of shares of Common Stock of the Company purchasable
upon the exercise of this Warrant had that recapitalization, capital
reorganization, or other change, consolidation, merger, sale or conveyance not
taken place. Any such provisions shall
include provision for adjustments, which shall be as nearly equivalent, as may
be practicable to the adjustments provided for in this Warrant. The foregoing provisions of this Section 5
will similarly apply to successive reclassifications, capital reorganizations,
changes of shares of Common Stock, and to successive consolidations, mergers,
sales or conveyances.
Section 7.
Transfer to Comply With
the Securities Act
. This Warrant and the Warrant
Shares or any other security issued or issuable upon exercise of this Warrant
may not be transferred without (i) the opinion of counsel satisfactory to
the Company that such transfer may lawfully be made without registration under
the Federal Securities Act of 1933, as amended (the
Securities
Act
), and applicable state law; or (ii) such
registration. Each certificate
representing Warrant Shares or other securities issued upon exercise of this
Warrant may bear a legend substantially as set forth in Section 1 above.
Section 8.
Representations and
Warranties of Holder
. The Holder represents and
warrants to the Company the following:
8.1
Holder is an Accredited Investor as
defined in Rule 501(a) of Regulation D under the Securities Act of
1933, as amended (the Act).
3
8.2
As a sophisticated investor, the Holder
has such knowledge and experience in financial business matters that the Holder
is capable of evaluating the merits and risks of the prospective investment in
the Warrant and the Warrant Shares.
8.3
The Holder recognizes that an investment
in the Warrant and the Warrant Shares of Common Stock involves a high degree of
risk, that transferability and resale is restricted and that the Holder could
sustain a loss of Holders entire investment the Warrant and the Warrant
Shares.
8.4
In
connection with the acquisition of the Warrant, the Holder represents and
warrants that the Holder intends to acquire the Warrant and the Warrant Shares
for investment purposes and not with a view to or for resale in connection with
any distribution of the Warrant or the Warrant Shares, and agrees that the
Holder will not sell or assign the Warrant or the Warrant Shares without
registration under all applicable securities laws or appropriate exemption from
applicable registration requirements.
The Holder understands and acknowledges that neither the Warrant nor the
Warrant Shares have been registered under the Securities Act nor applicable
state securities laws and therefore will not be freely transferable. The Holder also understands and acknowledges
that the Company is under no obligation to register the Warrant or the Warrant
Shares.
Section 9.
Survival of
Representations and Warranties
. The
representations and warranties set forth in Section 6 above will survive
the exercise of the Warrant.
Section 10.
A
pplicable Law
.
This Warrant is governed by and must be construed in accordance with the
laws of the State of Minnesota.
IN WITNESS WHEREOF, this Warrant has been duly executed by the
undersigned as of March 10, 2008.
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SOUTHWEST CASINO
CORPORATION
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By:
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Its:
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Accepted and agreed to:
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Holder
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4
EXHIBIT A
PURCHASE FORM
To be signed upon
exercise of Warrant.
The undersigned, the
Holder of the attached Warrant (the
Warrant
),
irrevocably elects to exercise the purchase right represented by the Warrant
for, and to purchase under the Warrant,
of the shares of Common Stock of Southwest Casino Corporation (the
Company
) to which the Warrant relates and makes payment of
$
($
per share) for those shares in cash or by certified check, which payment is
included with this Purchase Form. The
undersigned requests that a certificate representing the shares purchased be
delivered to the undersigned at the address stated below:
(a) The shares of common stock
purchasable upon exercise of the attached Warrant (the
Warrant Shares
) have not been registered
under the Securities Act of 1933, as amended (the
Act
)
or applicable state securities laws and are being issued by the Company under
exemptions from such registration requirements.
Neither the Securities and Exchange Commission nor any state securities
division has made an independent determination that the Securities are exempt
from registration. Any representation to
the contrary is a criminal offense.
(b) The Warrant Shares are subject to
restrictions on transferability and resale and may not be transferred or resold
except as permitted under the Companys Articles of Incorporation and Bylaws,
the Act and the applicable state laws, pursuant to registration or exemption
therefrom, and, if applicable, upon receipt of the prior written approval of
the Colorado Limited Gaming Control Commission, South Dakota Commission on
Gaming and such other state regulatory authorities as may have jurisdiction.
(c) The undersigned Holder represents,
warrants, and agrees that (i) the Company has made no representations as
to the value of the Warrant Shares; (ii) the Holder has been provided with
the opportunity to ask such information of the Companys management and to
obtain such information regarding the Company, its business and affairs as the
Holder deems necessary or appropriate in determining to accept the Securities
under the terms and conditions of this Agreement; (iii) the Holder is
accepting the Warrant Shares for Holders own account, for long-term investment
and without the intention of reselling or redistributing the Warrant Shares, (iv) the
Company has no obligation to register the Warrant Shares; and (v) any
transfer of the Warrant Shares is restricted by applicable state and federal
securities laws and will be further restricted by a restrictive legend placed
on the certificate(s) representing the Warrant Shares.
Dated:
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(Signature)
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Address:
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A-1
EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
SOUTHWEST CASINO CORPORATION, a Minnesota corporation (
Southwest
), and
(
Investor
) enter into this Registration Rights
Agreement (
Agreement
)
effective March 10, 2008 (Investor and each other Investor listed on
Schedule
1
to this Agreement are referred to collectively as the
Investors
).
BACKGROUND
A. Southwest and Investor
have entered into
a
Subscription Agreement and Letter of Investment Intent (the
Subscription
Agreement
),
under which Investor has subscribed to purchase warrants (the
Warrants
) to acquire shares of Southwest
common stock, par value $0.001 (the
Common
Stock
) by co-signing with Southwest a promissory note for a bank
loan to Southwest.
B. A
s a condition to the obligations of the
Investors under the Subscription Agreement, Southwest has agreed to grant the
registration rights with respect to the shares of Common Stock issuable upon
exercise of the Warrants on the terms and conditions stated in this Agreement.
AGREEMENT
NOW, THEREFORE,
in consideration of the foregoing, and
for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, Southwest and the Holders hereby agree as follows.
Section 1.
Definitions
.
T
he following
terms have the following meanings in this Agreement:
1.1
Holders
means the (a) the Investors, each of whom is a party to this Agreement,
and (b) any subsequent legal or beneficial owner of the Warrants or shares
of Common Stock issued upon exercise of the Warrants, who has become a party to
this Agreement in accordance with Section 11.9 of this Agreement.
1.2
Person
means an individual, partnership, limited partnership, corporation, business
trust, limited liability company, association, joint stock company, trust,
unincorporated organization, joint venture or other entity of whatever nature.
1.3
Registrable Common
means (a) any shares of Common Stock issued or issuable upon exercise of
the Warrants, and (b) any share of Common Stock issued as a dividend,
stock split, reclassification, recapitalization or other distribution with
respect to or in exchange for or replacement of the Warrants or any shares of
Common Stock issuable upon exercise of the Warrants. Registrable Common does not include shares of
Common Stock (x) that have been effectively registered under the
Securities Act and sold by a Holder in accordance with that registration, (y) that
have been sold by a Holder under Rule 144, or (z) for which
registration under the Securities Act is no longer required for the immediate
public distribution of as a result of the provisions of Rule 144.
1.4
Register
,
registered
and
registration
refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act and the
declaration or ordering of the effectiveness of that registration statement.
1.5
Rule 144
means Rule 144 promulgated by the Commission under the Securities Act, as
the rule may be amended from time to time, or any successor to Rule 144.
E-1
1.6
Securities Act
means the Securities Act of 1933, as amended, and the rules and
regulations promulgated from time to time under the Securities Act.
Section 2.
Registration
Rights
.
2.1 If
Southwest determines to prepare and file a registration statement under the
Securities Act (other than a registration on a Form S-8 or similar form,
or a registration on a form that does not permit the inclusion of shares by its
security holders), then Southwest must give written notice of its determination
to all record Holders of Registrable Common (a
Participation
Notice
) at least 30 days before filing that registration statement. Upon the written request of a Holder of
Registrable Common given within 15 days after receipt of a Participation
Notice, Southwest will, except as provided in this Agreement, include in that
registration statement all shares of Registrable Common for which a Holder
requests registration. If any
registration under this Section 2.1 is underwritten in whole or in part,
Southwest may require that the Registrable Common requested for inclusion in
the registration statement under this Section 2.1 be included in the
underwriting on the same terms and conditions as the securities otherwise being
sold through the underwriters.
2.2 Nothing
in this Agreement prevents Southwest from, at any time, abandoning or delaying
any registration Southwest initiates.
Southwest must bear all expenses related to the abandonment or delay of
a registration.
2.3 If,
in the judgment of Southwests managing underwriter of an underwritten
registration, the inclusion of any or all of the Registrable Common requested
for inclusion in the registration under this Section 2 would interfere
with the successful marketing of the shares of Common Stock offered by
Southwest or would negatively impact the trading market of the Common Stock,
then the number of Registrable Common included in the registration under this Section 2
may be reduced
pro rata
(by
number of shares) among the Holders and any other shareholder with
pari passu
registration rights requesting
inclusion in the registration, or eliminated completely.
2.4 The
right of any Holder to include Registrable Common in any underwritten
registration under this Agreement is conditioned upon Holders full
participation in the underwriting and the inclusion of Holders Registrable
Common in the underwriting. All Holders
proposing to distribute their securities through the underwriting must
(together with Southwest and any other selling shareholders) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected.
2.5 Southwest
is not obligated to effect or take any action to effect, any registration under
Section 2.1 more than 2 times.
2.6 Nothing
in this Agreement restricts Southwest from, at any time, granting registration
rights on the same or different terms to any other holder or acquirer of
Southwest securities.
Section 3.
Registration
Procedures
. Subject to the terms of this Agreement, if
Southwest is required by the terms of this Agreement to include shares of
Registrable Common in a registration under the Securities Act, Southwest will
do the following:
3.1
Filing
. Prepare and file with the United States
Securities and Exchange Commission (the
Commission
)
a registration statement that includes the shares of Registrable Common to be
included in the registration in accordance with Section 2, and use its
commercially reasonable efforts to cause the registration statement to become
and remain effective for a period as may be reasonably necessary to effect the
sale of such securities, not to exceed 6 months;
E-2
3.2
Period of Effectiveness
. Prepare and file with the Commission any
amendments to the registration statement or supplements to the prospectus in
the registration statement that may be necessary to keep the registration
statement effective for a period as may be reasonably necessary to effect the
sale of the Registrable Common, not to exceed 6 months;
3.3
Copies
. Furnish to the Holders participating in the
registration and to the underwriters of the securities being registered a
reasonable number of copies of the registration statement, preliminary
prospectus, formal prospectus and other documents as the Holders and
underwriters may reasonably request in order to facilitate the public offering
of the Regsitrable Common included in the registration;
3.4
Blue Sky
. Use its commercially reasonable efforts to
register or qualify the Registrable Common covered by the registration
statement under the state securities or blue sky laws of those jurisdictions
that participating Holders reasonably request in writing within 20 days after
the original filing of the registration statement, except that Southwest will
not for any purpose be required to execute a general consent to service of
process or to qualify to do business as a foreign corporation in any
jurisdiction where it is not so qualified;
3.5
Notification
. Notify the Holders participating in the
registration, promptly after Southwest receives notice, of the time when the
registration statement becomes effective or a supplement to any prospectus
forming a part of the registration statement has been filed;
3.6
Amendment Notice
. Notify the Holders participating in the
registration promptly of any request by the Commission for the amending or
supplementing of the registration statement or prospectus or for additional
information;
3.7
Update
. Prepare and promptly file with the Commission
and promptly notify the Holders of the filing of any amendment or supplement to
the registration statement or prospectus as necessary to correct any statements
or omissions if, at the time when a prospectus relating to the securities is
required to be delivered under the Securities Act, any event has occurred that
causes the prospectus or any other prospectus then in effect to include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements in the prospectus, in light of the
circumstances in which they were made, not misleading;
3.8
Stop Orders
. Advise the Holders participating in the
registration, promptly after Southwest receives notice or otherwise becomes
aware, of the issuance of any stop order by the Commission suspending the
effectiveness of the registration statement or the initiation or threatening of
any proceeding for that purpose.
Southwest must then promptly use its best efforts to prevent the
issuance of any stop order or to obtain the withdrawal of any stop order that
has been issued; and
3.9
Compliance Issues
. Southwest must provide to Holders
participating in the registration a copy of any amendment or supplement at
least 2 business days before filing.
Southwest must not file any amendment or supplement to the registration
statement or prospectus to which a majority in interest of the Holders
participating in the registration have reasonably objected on the grounds that
the amendment or supplement does not comply in all material respects with the
requirements of the Securities Act unless, in the opinion of counsel for
Southwest, the filing of the amendment or supplement is reasonably necessary to
protect Southwest from any liabilities under any applicable federal or state
law and the filing will not violate applicable law.
Section 4.
Furnish Information
.
It is a condition precedent to the
obligations of Southwest to include any Holders shares of Registrable Common in
a registration that the Holder must furnish to
E-3
Southwest any information regarding itself, the
Registrable Common held by the Holder, and the intended method of disposition
of the Registrable Common as required to effect the registration of the Holders
Registrable Common.
Section 5.
Expenses
.
With respect to the inclusion of Registrable Common in a registration as
requested under Section 2.1 of this Agreement (except as otherwise
provided in Section 2), Southwest will bear the following fees, costs and
expenses: all registration, filing and NASD (or exchange) fees, printing
expenses, fees and disbursements of counsel and accountants for Southwest, fees
and disbursements of counsel for the underwriter or underwriters of the
securities included in the registration (if Southwest or selling security
Holders are required to bear these fees and disbursements), all internal
Company expenses, all legal fees and disbursements and other expenses of
complying with state securities or blue sky laws of any jurisdictions in which
the securities to be offered are to be registered or qualified, and the
premiums and other costs of policies of insurance against liability (if any)
arising out of the public offering. All
fees and disbursements of any legal counsel, accountants or advisors for the
selling security Holders, underwriting discounts and commissions and transfer
taxes relating to the shares included in the offering by the selling security
Holders, and any other expenses incurred by the selling security Holders not
expressly included above, must be borne by the selling security Holders.
Section 6.
Delay of Registration
.
No Holder shall have any right to obtain or seek an injunction restraining
or otherwise delaying any registration as the result of any controversy that
might arise with respect to the interpretation or implementation of this
Agreement.
Section 7.
Indemnification
.
In the event that any Registrable Common is included in a registration
statement in accordance with Section 2 of this Agreement:
7.1
Indemnification by Company
. To the fullest extent permitted by law,
Southwest will indemnify and hold harmless each Holder of Registrable Common
that is included in a registration statement under the provisions of this
Agreement, the Holders directors, officers, partners, shareholders and legal
counsel and any underwriter (as defined in the Securities Act) for the Holder
and each Person, if any, who controls the Holder or the underwriter within the
meaning of the Securities Act, from and against, and will reimburse the Holder
and the underwriter and controlling Person with respect to, any and all loss,
damage, claims or liability (collectively,
Losses
),
joint or several, to which any of them may become subject under the Securities
Act, state securities laws or otherwise, and Southwest will pay to each Holder,
director, officer, partner, shareholder, legal counsel, underwriter or
controlling person any legal or other costs or expenses reasonably incurred by
that person in connection with investigating or defending any Loss, insofar as
the Losses are caused by any untrue or alleged untrue statement of any material
fact in the registration statement, any prospectus in the registration statement
or any amendment or supplement to the registration statement, or arise out of
or are based upon the omission or the alleged omission to state in the
registration statement a material fact required to be stated in the
registration statement or necessary to make the statements in the registration
statement, in light of the circumstances in which they were made, not
misleading; provided, however, that Southwest will not be liable to the extent
that any Loss arises out of or is based upon an untrue statement or omission so
made in conformity with information furnished by the Holder, director, officer,
partner, shareholder, legal counsel, underwriter or controlling Person;
provided further, however, that the indemnity agreement in this Section 7.1
will not apply to amounts paid in settlement of any Loss if the settlement is
effected without the consent of Southwest, which consent Southwest will not
withhold unreasonably. With respect to
any preliminary prospectus, the foregoing indemnity obligation will not inure
to the benefit of any Holder on account of any Loss whatsoever arising from the
sale of any Registrable Common by the Holder to any person if (A) a copy
of the prospectus (as amended or supplemented if amendments or supplements have
been furnished to the Holder before the confirmation of the sale involved) was
not sent or given by or on behalf of the Holder to that person, if required by
law, with or prior to the written confirmation of the sale
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involved, and (B) the untrue statement or
omission of a material fact in the preliminary prospectus from which the Loss
arose was corrected in the prospectus (as amended or supplemented if the
amendments or supplements have been furnished as aforesaid).
7.2
Indemnification by Holders
. Each Holder of Registrable Common that is
included in a registration statement under the provisions of this Agreement
will indemnify and hold harmless Southwest, its directors and officers, each
Person, if any, who controls Southwest within the meaning of the Securities
Act, any other Holder selling securities under the registration statement, any
controlling Person of any selling Holder, any underwriter and any controlling
Person of any underwriter (each, an
Indemnitee
)
from and against, and will reimburse any Indemnitee with respect to, any and
all Losses to which Indemnitee may become subject under the Securities Act,
state securities laws or otherwise, and the Holder will pay to each Indemnitee
any legal or other costs or expenses reasonably incurred by that person in
connection with investigating or defending any Losses, insofar as the Losses
are caused by any untrue or alleged untrue statement of any material fact in
the registration statement, any prospectus in the registration statement or any
amendment or supplement to the registration statement, or arise out of or are
based upon the omission or the alleged omission to state in the registration
statement, prospectus, amendment or supplement a material fact required to be
stated in the registration statement, prospectus, amendment or supplement or
necessary to make the statements in the registration statement, prospectus,
amendment or supplement, in light of the circumstances in which they were made,
not misleading, in each case to the extent, but only to the extent, that the
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with information furnished in
writing by the Holder to Southwest specifically for use in the preparation of
the registration statement, prospectus, amendment or supplement, and provided,
however, that the indemnity agreement in this Section 7.2 does not apply
to amounts paid in settlement of any Loss if the settlement is effected without
the consent of the indemnifying Holder, which consent the indemnifying Holder
must not withhold unreasonably. With
respect to any preliminary prospectus, the foregoing indemnity obligation will
not inure to the benefit of Southwest on account of any Loss arising from the
sale of any Registrable Common by a Holder to any person if (A) a copy of
the prospectus (as amended or supplemented if the amendments or supplements are
furnished to a Holder before the confirmation of the sale involved) was not
sent or given by or on behalf of a Holder to the person, if required by law,
with or prior to the written confirmation of the sale involved, and (B) the
indemnifying Holder corrected the untrue statement or alleged untrue statement
or omission or alleged omission of a material fact in the prospectus (as
amended or supplemented if the amendments or supplements were furnished as
aforesaid). The indemnification
obligations of each Holder under this Section 7.2 are limited to an amount
equal to the net proceeds received by each Holder of Registrable Common sold as
contemplated in this Agreement.
7.3
Indemnification Procedures
. Promptly after receipt by a party entitled to
indemnification under this Section 7 (each, an
Indemnified
Party
) of notice of the commencement of any action involving the
subject matter of the foregoing indemnity provisions, the Indemnified Party
will, if a claim is to be made against the party obligated to provide
indemnification under this Section 7 (each, an
Indemnifying
Party
), promptly notify the Indemnifying Party of the commencement
of the action. The failure to provide
such notice will not relieve the Indemnifying Party from any liability under
this Agreement, except to the extent that the delay in giving, or failing to
give, notice has a material adverse effect upon the ability of the Indemnifying
Party to defend against the claim. In
case an action is brought against an Indemnified Party, the Indemnifying Party
has the right to participate in and, at the Indemnifying Partys option, to
assume the defense of the action, singly or jointly with any other Indemnifying
Party similarly notified, with counsel satisfactory to the Indemnified Party;
provided, however, that if the defendants in any action include both the
Indemnified Party and the Indemnifying Party and the Indemnified Party
reasonably concludes that there may be legal defenses available to any
Indemnified Parties that are different from or additional to those available to
the Indemnifying Party, or if there is a conflict of interest which would
prevent counsel for the Indemnifying Party from also
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representing the Indemnified Party, the Indemnified
Party will have the right to select counsel to participate in the defense of
the action on behalf of the Indemnified Party at the expense of the
Indemnifying Party; provided that if there is more than one Indemnified Party,
the Indemnifying Party will be responsible for the expense of only one special
counsel selected jointly by the Indemnified Parties. After notice from an Indemnifying Party to
any Indemnified Party of the Indemnifying Partys election to assume the
defense of the action, the Indemnifying Party will not be liable to the
Indemnified Party under this Section 7 for any legal or other expense
subsequently incurred by the Indemnified Party in connection with the defense
of the action other than reasonable costs of investigation, unless (i) the
Indemnified Party employed separate counsel in accordance with the proviso of
the preceding sentence, or (ii) the Indemnifying Party does not employ
counsel satisfactory to the Indemnified Party to represent the Indemnified
Party within a reasonable time after the notice of the commencement of the
action, or (iii) the Indemnifying Party has authorized the employment of
counsel for the Indemnified Party at the expense of the Indemnifying Party.
Section 8.
Exceptions
to and Termination of Registration Obligations
.
Southwest is not obligated to honor a request
under Section 2 to include Registrable Common in a registration statement
if the Registrable Common is otherwise eligible for immediate sale by the
Holder under Rule 144. This
Agreement, and the registration rights stated in this Agreement, terminate on
the earlier to occur of (a) 2 years after the date of this Agreement or (b) at
any time after the date of this Agreement that all Holders are able to sell
their entire holdings during any 90 day period under Rule 144(k).
Section 9.
Cooperation
.
Any Holder whose Registrable Common are to be included in a registration
statement filed by Southwest agrees to cooperate with all reasonable requests
by Southwest necessary to effectuate the purposes of this Agreement, including
by timely providing Southwest with all information necessary to file a
registration statement.
Section 10.
Lock-Out
Agreement
. Each
Holder hereby agrees that, for a period of 180 days after the effective date of
any registration statement for Southwest securities (the
Lock-Out Period
), Holder will not sell,
offer to sell, contract to sell (including, without limitation, any short
sale), grant any option to purchase or otherwise transfer or dispose of any
securities of Southwest held by Holder, directly or indirectly, whether through
trade in the public securities markets, OTCBB or private transactions or
through any other means, except transfers to donees who agree to be similarly
bound. Each Holder acknowledges and
agrees that Southwest may impose stop-transfer instructions during the Lock-Out
Period with respect to the securities of each Holder subject to this
restriction if necessary to enforce such restrictions.
Section 11.
Miscellaneous
.
11.1
Waivers, Amendments and
Approvals
. In each case
in which the approval of the Holders is required by the terms of this
Agreement, that requirement will be satisfied by a vote or the written action
of Holders of at least a majority of
the Registrable Common. Any term or
provision of this Agreement requiring performance by or binding upon Southwest
or Holders may be amended, and the observance of any term of this Agreement may
be waived (either generally or in a particular instance and either
retroactively or prospectively), only by a writing signed by Southwest and the
Holders of at least a majority of the then outstanding Registrable Common. Any amendment or waiver affected in
accordance with this Section shall be binding upon the Holders (including
permitted assigns under Section 11.9 of this Agreement). The waiver by a party of any breach of this
Agreement or default in payment of any amount due under this Agreement or
default in the performance of this Agreement will not be deemed to constitute a
waiver of any other default or succeeding breach or default. Written notice of any waiver, consent or
agreement of amendment, modification or supplement will be given to the record
Holders of Registrable Common who did not give written consent to the waiver,
consent, agreement or amendment.
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11.2
Written Changes, Waivers,
Etc.
Neither this
Agreement nor any provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by a statement in writing signed by
Southwest and approved by the Holders as provided in Section 11.1.
11.3
Notices
. All notices, demands or other communications
to be given or delivered under this Agreement must be in writing and will be
deemed given when delivered personally to the recipient, sent to the recipient
by reputable overnight courier service (charges prepaid), mailed to the
recipient by certified or registered mail, return receipt requested and postage
prepaid, or transmitted by facsimile or electronic mail (with request for
immediate confirmation of receipt in a manner customary for electronic mail and
with physical delivery of the communication being made by one of the other
means specified in this section promptly thereafter), as follows:
11.3.1
To a Holder, addressed to the Holder at
the address(es) stated on
Schedule 1
.
11.3.2
To Southwest, to:
Southwest Casino
Corporation
Attention: Thomas E. Fox, President
2001 Killebrew Drive, Suite 350
Minneapolis, MN 55425
Facsimile: 952-853-9991
Telephone: 952-853-9990
Any party may
change its address for such communications by giving notice of the change to
the other parties in conformity with this Section.
11.4
Delays or Omissions
. Except as expressly provided in this
Agreement, no delay or omission to exercise any right, power or remedy accruing
to any party under this Agreement will impair that right, power or remedy nor
will it be construed as a waiver of any breach or default, or an acquiescence
to a breach or default, or of a similar breach of default occurring later; nor
shall any waiver of any single breach or default be deemed a waiver of any
other breach or default. Any waiver,
permit, consent or approval of any kind or character of any breach or default
under this Agreement, or any waiver of any provisions or conditions of this
Agreement, must be in writing and will be effective only to the extent
specifically stated in that writing.
11.5
Other Remedies
. Any and all remedies in this Agreement
expressly conferred upon a party will be deemed cumulative with, and not
exclusive of, any other remedy conferred by this Agreement or by law on that
party, and the exercise of any one remedy will not preclude the exercise of any
other.
11.6
Attorneys Fees
. If suit is brought to enforce or interpret
any part of this Agreement, the prevailing party is entitled to recover, as an
element of the costs of suit and not as damages, reasonable attorneys fees to
be fixed by the court (including, without limitation, costs, expenses and fees
on any appeal). The prevailing party is
the party entitled to recover its costs of suit, regardless of whether the suit
proceeds to final judgment. A party not
entitled to recover its costs is not entitled to recover attorneys fees. No sum for attorneys fees will be counted in
calculating the amount of a judgment for purposes of determining if a party is
entitled to recover costs or attorneys fees.
11.7
Entire Agreement
. This Agreement, the schedules to this
Agreement, the documents referenced in this Agreement and the exhibits to those
documents, constitute the entire understanding and agreement of the parties to this
Agreement with respect to the subject matter of this Agreement and
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supersede all prior and contemporaneous agreements or
understandings, inducements or conditions, express or implied, written or oral,
between the parties with respect to the subject matter of this Agreement. The express terms of this Agreement control
and supersede any course of performance or usage of the trade inconsistent with
any of the terms of this Agreement.
11.8
Severability
. If any provision of this Agreement or of any
agreement entered into under this Agreement is determined to be illegal or
unenforceable, all other provisions of this Agreement and of each other
agreement entered into under this Agreement, will be given effect separately
from the provision or provisions determined to be illegal or unenforceable and
will not be affected by that determination.
11.9
Successors and Assigns
. The terms and conditions of this Agreement
inure to the benefit of, and bind and are enforceable by, the respective heirs,
successors and assigns of the parties to this Agreement; provided, however,
that the rights of a Holder under this Agreement may be assigned only (a) to
a partner or retired partner of the assigning Holder if that assigning Holder
is a partnership or to any Affiliate of an assigning Holder which is also an
accredited investor within the meaning of the Securities Act, (b) to any
family member of, or trust for the benefit of, the assigning Holder, (c) to
any affiliated entities of the assigning Holder if the affiliated entities are
managed by the same manager or managing partner or management company, or
managed by an entity controlling, controlled by or under common control with
that manager, managing partner or management company, or (d) concurrent
with the sale or transfer to an assignee of at least 25,000 shares (subject to adjustment for any stock dividend, stock
split, subdivision, combination or other recapitalization of Southwest) of
Registrable Common then held by the Holder.
No transfer of rights under this Agreement will be effective unless the
transferee of such rights executes and agrees to be bound by the terms of this
Agreement. Any Holder making an
assignment in connection with the sale or transfer of only a portion of its
shares will retain its rights under this Agreement for the shares not sold or
transferred. Nothing in this Agreement,
express or implied, is intended to confer upon any party, other than the parties
to this Agreement or their respective successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
Notwithstanding any provision contained elsewhere in this Agreement,
upon the transfer of shares by any of the parties to this Agreement, no claims
or causes of action arising out of or related to this Agreement existing as of
the transfer date may be transferred to any respective heir, successor, assign
or permitted transferee, provided that the transfer of shares will not be
deemed a waiver by the transferring party of any claim or cause of action.
Affiliate
means any Person which controls, is controlled by or is under common control
with any other Person or Persons. For
the purposes of this definition, control has the meaning specified as of the
date of this Agreement for that word in Rule 405 promulgated by the
Commission under the Securities Act.
11.10
Governing Law
. This Agreement is governed by and construed
under the laws of the State of Minnesota.
11.11
Counterparts
.
This Agreement may be executed concurrently in two or more counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
Signatures delivered by facsimile will have the same legal force and
effect as original signatures.
Remainder of page intentionally blank.
Signatures on next page.
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Signature Page for
Registration Rights Agreement
In witness of this Registration Rights Agreement,
Southwest and Investor have executed this instrument as of the date first
written above.
SOUTHWEST CASINO CORPORATION
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INVESTOR:
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Exhibit 10.1
PROMISSORY NOTE
(Commercial Single
Advance)
DATE AND PARTIES. The date of this Promissory Note (Note) is
January 11,2008. The parties and their addresses are:
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LENDER:
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CROWN BANK
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601 Marquette Avenue,
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Ste 125 Minneapolis,
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Minnesota 55402
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Telephone: (612)
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746-5050
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B0RROWER:
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SOUTHWEST CASINO & HOTEL
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CORPORATION
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a Minnesota Corporation
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2001 KILLEBREW DRIVE SUITE
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350 BLOOMINGTON Minnesota
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55425
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1. DEFINITIONS.
As used in this Note. the terms have the following
meanings:
A. Pronouns.
The pronouns 1, me, and my refer
to each Borrower signing this Note, individually and together. You and Your refer to the Lender.
B. Note.
Note refers to this document. and any
extensions, renewals. modifications and substitutions of this Note.
C. Loan.
Loan refers to this transaction
generally, including obligations and duties arising from the terms of all
documents prepared or submined for this transaction such as applications.
security agreements, disclosures or notes, and this Note.
D. Loan Documents.
Loan Documents refer to all the
documents executed as a pan of or in connection with the Loan.
E. Property.
Property is any property, real. personal
or intangible, that secures my performance of the obligations of this Loan.
F. Percent.
Rates and rate change limitations are
expressed as annualized percentages.
2. PROMISE TO PAY.
For value received. I promise to pay you or your
order, at your address, or at such other location as you may designate. the
principal sum of
$
(Principal) plus interest from January 11, 2008 on the unpaid Principal balance
until this Note matures or this obligation is accelerated.
3. INTEREST.
Interest will accrue on the unpaid Principal balance
of this Note at the rate of 8.75 percent (Interest Rate) until January 12,
2008, after which time it may change as described in the Variable Rate
subsection ..
A. Interest After Default.
If you declare a default under the terms
of the Loan, including for failure to pay in full at maturity, you may increase
the Interest Rate otherwise payable as described in this section. In such
event, interest will accrue on the unpaid Principal balance of this Note at a
rate equal to the rate in effect prior to default, plus.2.000 percent. until
paid in full.
B. Maximum Interest Amount.
Any amount assessed or collected as
interest under the terms of this Note will be limited to the maximum lawful
amount of interest allowed by state or federal law, whichever is greater.
Amounts collected in excess of the maximum lawful amount will be applied first
to the unpaid Principal balance. Any remainder will be refunded to me.
C. Statutory Authority.
The amount assessed or collected on this
Note is authorized by the Minnesota usury laws under Minn. Stat. § 47.59.
D. Accrual.
Interest accrues using an Actual/360
days counting method.
E. Variable Rate.
The Interest Rate may change during the
term of this transaction.
(1) Index. Beginning with the first Change Date,
the Interest Rate will be based on the following index: the base rate on
corporate loans posted by at least 75% of the 30 largest·U.S. banks known as
the Wall Street Journal U.S. Prime Rate.
The Current index is the most recent index figure available
on each Change Date. You do not guaranty by selecting this index, or the
margin, that the Interest Rate on this Note will be the same rate you charge on
any other loans or class of loans you make to me or other borrowers. If this
Index is no longer available, you will substitute a similar index. You will
give me notice of your choice,
(2)
Change Date. Each date on which the
Interest Rate may change is called a Change Date. The Interest Rate may change
January 12. 2008 and daily thereafter.
(3) Calculation Of Change. On each Change Date
you will calculate the Interest Rate, which will be the Current Index plus
1.500 percent. The result of· this calculation will be rounded up to the
nearest .001 percent. Subject to any limitations, this will be the Interest
Rate until the next Change Date. The new Interest Rate will become effective on
each Change Date. The Interest Rate and other charges on this Note will never
excaed the highest rate or charge allowed by law for this Note.
(4) Limitations. The lnterest Rate changes are
subject to the following limitations:
(a) Lifetime. The Interest Rate will never be
less than 7.000 percent.
(5) Effect Of Variable Rate. A change in the
Interest Rate will have the following effect on the payments: The amount of scheduled
payments will change.
4. ADDITIONAL CHARGES.
As additional consideration, I agree to
pay, or have paid, these additional fees and charges:
A. Nonrefundable Fees and
Charges.
The
following fees are earned when collected and will not be refunded if I prepay
this Note before the scheduled maturity date.
ORIGINATION FEE
. A(n) ORIGINATION FEE fee of
$ payable from separate funds
on or before todays date.
5. REMEDIAL CHARGES.
In addition to interest or other finance
charges, I agree that I will pay these additional fees based on my method and
pattern of payment. Additional remedial charges may be described elsewhere in
this Note.
A. Late Charge.
If a payment is more than 10 days late,
I will be charged 5.000 percent of the Unpaid Portion of Payment. I will pay
this late charge promptly but only once for each late payment. This amount may
then increase so as to always be the highest amount allowed by law under
Minnesota Statutes § 47.59.
6. PAYMENT.
I agree to pay this Note on demand, but if no demand
is made, I agree to pay as follows: 12 INTEREST ONLY PAYMENTS BEGINNING
FEBRUARY 11 2008 AND CONTINUING AT MONTHLY TIME INTERVALS THEREAFTER. BEGINNING
ON FEBRUARY 11, 2009 THE PAYMENT METHOD WILL CHANGE TO PRINCIPAL PAYMENTS OF
$ PLUS
ANY OUTSTANDING INTEREST PER MONTH UNTIL THE MATURITY DATE OF JAUARY 11,2010.
Payments will be rounded up to the nearest $.01. With the final payment
I also agree to pay any additional fee or charges owing and the amount of any
advances you have made to others on my behalf. Payments scheduled to be paid on
the 29th, 30th or 31st day of a month that contains no such day will, instead,
be made on the last day of such month.
Each payment I make on this Note will be applied first to interest that
is due then to principal that is due, and finally to any charges that I owe
other than principal and interest. If you and I agree to a different
application of payments, we will describe our agreement on this Note. You may
change how payments are applied in your sole discretion without notice to me.
The actual amount of my final payment will depend on my payment record.
7. PREPAYMENT.
I may prepay this loan in full or in part at any time. Any partial
prepayment will not excuse any later scheduled payments until I pay in full.
8. LOAN PURPOSE.
The purpose of this loan is FUND BUSINESS
INVESTMENTS.
9. DEFAULT.
I understand that you may demand payment any time at
your discretion. For example. you may demand payment in full If any of the
following occur:
A. Payments.
I fail to make a payment in full when
due.
B. Insolvency or Bankruptcy.
The death, dissolution or insolvency of,
appointment of a receiver by or on behalf of, application of any debtor relief
law, the assignment for the benefit of creditors by or on behalf of, the
voluntary or involuntary termination of existence by, or the commencement of
any proceeding under any present or future federal or state insolvency,
bankruptcy, reorganization, composition or debtor relief law by or against me
or any co-signer, endorser, surety or guarantor of this Note or any other
obligations I have with you.
C. Death or Incompetency.
I die or am declared legally
incompetent.
D. Business Termination.
I merge, dissolve. reorganize, end my
business or existence, or a partner or majority owner dies or is declared
legally incompetent.
E. Failure to Perform.
I fail to perform any condition or to
keep any promise or covenant of this Note.
F. Other Documents.
A default occurs under the terms of any
other Loan Document.
G. Other Agreements.
I am in default on any other debt or
agreement I have with you.
H. Misrepresentation.
I make any verbal or written statement
or provide any financial information that is untrue, inaccurate, or conceals a
material fact at the time it is made or provided.
I. Judgment.
I fail to satisfy or appeal any Judgment
against me.
J. Forfeiture.
The Property is used in a manner or for
a purpose that threatens confiscation by a legal authority.
K. Name Change.
I change my name or assume an additional
name without notifying you before making such a change.
L. Property Tranfer.
I transfer all or a substantial part of
my money or property.
M. Property Value.
You determine in good faith that the
value of the Property has declined or is impaired.
N. Material Change.
Without first notifying you, there is a
material change in my business, including ownership, management, and financial
conditions.
O. lnsecurity.
You determine in good faith that a
material adverse change has occurred in my financial condition from the
conditions set forth in my most recent financial statement before the date of
this Note or that the prospect for payment or performance of the Loan is
impaired for any reason.
10. DUE ON SALE OR ENCUMBRANCE.
You may, at your option, declare the
entire balance of this Note to be due and payable upon the creation of, or
contract for the creation of, any lien, encumbrance, transfer or sale of all or
any part of the Property. This right is subject to the restrictions imposed by
federal law (12 C.F.A. 591), as applicable.
11. WAIVERS AND CONSENT.
To the extent not prohibited by law, I
waive protest, presentment for payment, demand, notice of acceleration, notice
of intent to accelerate and notice of dishonor.
A. Additional Waivers By
Borrower.
In addition,
I, and any party to this Note and Loan, to the extent permitted by law, consent
to certain actions you may take, and generally waive defenses that may be
available based on these actions or based on the status of a party to this
Note,
(1) You may renew or extend payments on this
Note, regardless of the number of such renewals or extensions
(2) You may release any Borrower, endorser,
guarantor, surety, accommodation maker or any other co-signer.
(3) You may release, substitute or impair any
Property securing this Note.
(4) You, or any institution participating in this
Note, may invoke your right of set-off.
(5) You may enter into any sales, repurchases or
participations of this Note to any person in any amounts and I waive notice of
such sales, repurchases or participations.
(6) I agree that any of us signing this Note as a
Borrower is authorized to modify the terms of this Note or any instrument
securing, guarantying or relating to this Note.
B. No Waiver By Lender.
Your course of dealing, or your
forbearance from, or delay in, the exercise of any of your rights, remedies,
privileges or right to insist upon my strict performance of any provisions
contained in this Note, or any other Loan Document, shall not be construed as a
waiver by you, unless any such waiver is in writing and is signed by you.
12. REMEDIES.
After I default, you may at your option do anyone or
more at the following.
A. Acceleration.
You may make all or any part of the
amount owing by the terms of this Note immediately due.
B. Sources.
You may use any and all remedies you
have under State or federal law or in any loan Document
C. Insurance Benefits.
You may make a claim for any and all
insurance benefits or refunds that may be available on my default
D. Payments Made On My Behalf.
Amounts advanced on my behalf will be
immediately due and may be added to the balance owing under the terms of this
Note, and accrue interest at the highest post-maturity interest rate.
E. Attachment.
You may attach or garnish my wages or
earnings.
F. Set-Off.
You may use the right of set-off. This
means you may set-off any amount due and payable under the terms of this Note
against any right I have to receive money from you.
My right to receive money from you includes any
deposit or share account balance I have with you; any money owed to me on an
item presented to you or in your possession for collection or exchange; and any
repurchase agreement or other non-deposit obligation. Any amount due and
payable under the terms of this Note means the total amount to which you are
entitled to demand payment under the terms of this Note at the time you
set-offl.
Subject to any other written contract, if my right to
receive money from you is also owned by someone who has not agreed to pay this
Note, your right of set-off will apply to my interest in the obligation and to
any other amounts I could withdraw on my sole request or endorsement.
Your right of set-off does not apply to an account or
other obligation where my rights arise only in a representative capacity. It
also does not apply to any Individual Retirement Account or other tax-deferred
retirement account.
You will not be liable for the dishonor of any check
when the dishonor occurs because you set-off against any of my accounts. I
agree to hold you harmless from any such claims arising as a result of your
exercise of your right of set·oH.
G. Waiver.
Except as otherwise required by law, by
choosing anyone or more of these remedies you do not give up your right to use
any other remedy. You do not waive a default if you choose not to use a remedy.
By electing not to use any remedy, you do not waive your right to later
consider the event a default and to use any remedies. If the default continues
or occurs again.
13. COLLECTION EXPENSES AND ATTORNEYS FEES.
On or after Default, to the extent
permitted by law, I agree to pay all expenses of collection, enforcement or
protection of your rights and remedies under this Note or any other Loan
Document. Expenses include, but are not limited to, attorneys fees, court
costs and other legal expenses. If not paid immediately, these expenses will
bear interest from the date of payment until paid in full at the highest
interest in effect as provided in the terms of this Note. All fees and expenses
will be secured by the Property I have granted to you, jf any. In addition, to
the extent permitted by the United States Bankruptcy Code, I agree to pay the
reasonable attorneys fees incurred by you to protect your rights and interests
in connection with any bankruptcy proceedings initiated by or against me ..
14. COMMISSIONS.
I understand and agree that you or your affiliate I
will earn commissions or fees on any insurance products, and may earn such fees
on other services that I buy through you or your affiliate.
15. WARRANTIES·AND REPRESENTATIONS
I make to you the following warranties
and representations which will continue as long as this Note is in effect.
A. Power.
I am duly organized, and validly
existing and in good standing in all jurisdictions in which I operate. I have
the power and authority to enter into this transaction and to carry on my
business or activity as it is now being conducted and, as applicable, am
qualified to do so in each jurisdiction in which I operate.
B. Authority.
The execution, delivery and performance
of this Note and the obligation evidenced by this Note are within my powers,
have been duly authorized, have received all necessary governmental approval,
will not violate any provision of law, or order of court or governmental agency,
and will not violate any agreement to which I am a party or to which I am or any
of my Property is subject.
C. Name and Place of Business.
Other than previously disclosed in
writing to you I -have not changed my name or principal place of business within
the last 10 years and have not used any other trade or fictitious name. Without
your prior written consent, I do not and will not use any other name and will
preserve my existing name, trade names and franchises.
16. APPLICABLE LAW
This Note is governed by the laws of MinNesota, the
United States of America, and to the extent required, by the laws of the
jurisdiction where the Property is located, except to the extent such state
laws are·preempted by federal law. In the event of a dispute, the exclusive forum,
venue and place of jurisdiction wiII be in Minnesota, unless otherwise required
by law.
17. JOINT AND INDIVIDUAL LIABILITY AND SUCCESSORS.
My obligation to pay the Loan is
independent of the obligation of any other person who has also agreed to pay
it. You may sue me alone, or anyone else who is obligated on the Loan, or any
number of us together, to collect the Loan. Extending the Loan or new
obligations under the loan, will not affect my duty under the Loan and I will
still be obligated·to pay·the Loan. This Note shall inure to the benefit of and
be enforceable by you and your successors and assigns and shall be binding upon
and enforceable against me and my personal representatives, successors, heirs
and assigns,
18. AMENDMENT, INTEGRATION AND SEVERABILITY.
This Note may not be amended or modified
by oral agreement. No amendment or modification of this Note is effective
unless made in writing and executed by you and me. This Note and the other loan
Documents are the complete and final expression of the agreement. If any
provision of this Note is unenforceable, then the unenforceable provision will
be severed and the remaining provisions will still be enforceable.
19. INTERPRETATION.
Whenever used, the singular includes the plural and
the plural includes the singular. The section headings are for convenience only
and are not to be used to interpret or define the terms of this Note.
20. NOTICE, FINANCIAL REPORTS AND ADDITIONAL
DOCUMENTS.
Unless
otherwise required by law, any notice will be given by delivering it or mailing
it by first class mail to the appropriate partys address listed in the DATE
AND PARTIES section, or to any other address designated in writing. Notice to
one Borrower will be deemed to be notice to all Borrowers. I will inform you in
writing of any change in my name, address or other application information. I
will provide you any financial statement or information you request. All
financial statements and information I give you will be correct and complete. I
agree to sign, deliver, and file any additional documents or certifications
that you may consider necessary to perfect, continue, and preserve my
obligations under this Loan and to confirm your lien status on any Property.
Time is of the essence.
21. CREDIT INFORMATION.
I agree to supply you with whatever
information you reasonably request. You will make requests for this information
without undue frequency, and will give me reasonable time in which to supply
the information,
22. ERRORS AND OMISSIONS.
I agree, if requested by you, to fully
cooperate in the correction, if necessary, in the reasonable discretion of you
of any and all loan closing documents so that all documents accurately describe
the loan between you and me. I agree to assume all costs including by way of
illustration and not limitation, actual expensss, legal fees and marketing
losses for failing to reasonably comply with your requests within thirty (30)
days.
23. SIGNATURES.
By signing, I agree to the terms contained In this
Note. I also acknowledge receipt of a copy of this Note.
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BORROWER:
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Individually
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SOUTHWEST CASINO & HOTEL CORPORATION
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By
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Authorized Signer
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EXHIBIT 10.2
CONTRIBUTION AGREEMENT
Southwest Casino Corporation (
Southwest
) and each of the
parties listed as a co-signer or guarantor on Exhibit 1
(the
Co-Signers
) enter into this Contribution Agreement (the
Agreement
) effective March 7, 2008. Each of the Co-Signers or
guarantors is referred to
individually as a
Co-Signer
and collectively as the
Co-Signers
.
BACKGROUND
A.
Under the terms of Subscription Agreements dated the
same date as this Agreement, each of the Co-Signers has agreed to co-sign a
promissory note (each, a
Note
and collectively, the
Notes
) or
a guarantee (each a
Guarantee
and collectively the
Guarantees
)
in favor of Crown Bank (the Bank).
B.
Southwest and the Co-Signers wish to enter into an
arrangement under which Southwest agrees to repay certain amounts to Co-Signers
and the Co-Signers agree to indemnify each other for any amounts paid by a
Co-Signer under a Note or a Guarantee that exceeds that Co-Signers Pro Rata
Portion of the Aggregate Contribution Amount (as those terms are defined in
this Agreement).
AGREEMENT
In consideration of the
above premises and the mutual covenants in this Agreement, the Co-Signers agree
as follows:
Section 1
.
Technical Default
. If any Co-Signer makes payment to the Bank
based upon a technical default under a Note or Guarantee, Southwest agrees that
it will repay to Co-Signer all amounts paid by Co-Signer to the Bank on the
same terms and conditions as the terms of the Note issued by the Bank. For purposes of this Agreement, a technical
default means any default that results from any event or circumstance other
than the failure or inability of Southwest to make a payment on a Note when
due.
Section 2.
Contribution and Subrogation
.
The Co-Signers
agree that, to the extent that any Co-Signer (a
Claiming Co-Signer
) makes a payment as a co-signer of a
promissory note or under a Guaranty (a
Claim
),
the other Co-Signers will indemnify the Claiming Co-Signer for the total amount
paid by the Claiming Co-Signer under a Note, a Guaranty, and to other Claiming
Co-Signers under this Section 2, if applicable, that exceeds the Claiming
Co-Signers Pro Rata Portion of the Aggregate Contribution Amount at the time
of that Claim. Except, that each
Co-Signers obligation to indemnify a Claiming Co-Signer under this Section 2
will only arise to the extent that the total amount paid by that Co-Signer,
whether under a Note, a Guaranty or to other Claiming Co-Signers under this Section 2,
is less than that Co-Signers Pro Rata Portion of the Aggregate Contribution
Amount at the time of such Claim. For
the purposes of this Agreement, (i) a Co-Signers
Pro Rata Portion
means the percentage
determined by dividing the original principal amount of the promissory note or
guaranty signed by a co-signer divided by the total principal amount of all
Notes and Guarantees executed by the Co-Signers, and (ii) the
Aggregate Contribution Amount
means the
aggregate amount paid by all of the Co-Signers under the Notes and Guaranties.
Any Co-Signer making a payment
to a Claiming Co-Signer under this Section 2 will be subrogated to the
rights of that Claiming Co-Signer to the extent of that payment.
Section 3. Termination
.
This Agreement
will survive and be in full force and effect until all of the Notes and
Guaranties are indefeasibly and forever fully released and discharged.
G-1
Section 4. Miscellaneous
.
4.1
Assignment; Successors and Assigns
. None of the Co-Signers can assign or
otherwise transfer their rights and obligations under this Agreement, except
with the prior written consent of all of the Co-Signers. This Agreement binds each party to this
Agreement and their respective heirs and permitted successors and assigns and
inures to the benefit of the parties to this Agreement and their respective
heirs and permitted successors and assigns.
4.2
Amendment
.
This Agreement may not be deemed or construed to be modified or amended,
in whole or part, other than by written amendment signed by all of the parties
to this Agreement.
4.3
Severability
. If any term or provision of this Agreement is
invalid or unenforceable, that term or provision will be deemed stricken from
this Agreement. The invalidity or
unenforceability of any term or provision of this Agreement will not invalidate
this Agreement, and the remaining terms and provisions of this Agreement will
continue in full force and effect.
4.4
Waiver
.
No failure by any party to take any action or assert any right under
this Agreement will be deemed to be a waiver of any rights or remedies under
this Agreement or at law.
4.5
Governing Law; Jurisdiction.
This Agreement must be construed,
interpreted and governed according to the laws of the State of Minnesota. Any litigation instigated in connection with
this Agreement must be venued in either the District Courts of Hennepin County,
Minnesota, or the United States District Court for the District of Minnesota,
Fourth Division.
4.6
Counterparts
. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original and all of which will
constitute one and the same instrument.
Remainder
of Page Intentionally Blank.
Signatures on Next Page.
G-2
Signature Page for
Contribution Agreement
IN WITNESS WHEREOF
,
the parties to this Agreement have executed this
instrument as of the day and year first above written.
CO-SIGNER:
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CO-SIGNER:
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Print Name:
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CO-SIGNER:
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CO-SIGNER:
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Print Name:
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Print Name:
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CO-SIGNER:
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CO-SIGNER:
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Print Name:
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Print Name:
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CO-SIGNER:
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CO-SIGNER:
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Print Name:
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Print Name:
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CO-SIGNER:
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CO-SIGNER:
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CO-SIGNER:
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CO-SIGNER:
(GUARANTOR):
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Print Name:
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James B. Druck
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CO-SIGNER:
(GUARANTOR):
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CO-SIGNER:
(GUARANTOR):
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Print Name:
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Thomas E. Fox
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Print Name:
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Jeffrey S.
Halpern
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SOUTHWEST
CASINO CORPORATION
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By:
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Its:
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G-3
EXHIBIT 10.3
PLEDGE
AGREEMENT
Southwest Casino Corporation (
Southwest
)
and each of the
parties listed as Co-Signers on Exhibit 1 (the
Co-Signers
) enter into this Pledge Agreement (the
Agreement
) effective March 7, 2008. Each of the
Co-Signers
is referred to
individually as a Co-Signer and collectively, the Co-Signers.
BACKGROUND
A. Under
the terms of Subscription Agreements
among Southwest and the Co-Signers dated the same date as this Agreement
(collectively, the
Subscription Agreements
),
each of the Co-Signers have agreed to co-sign with Southwest a promissory note
(each, a
Note
and collectively,
the
Notes
) or to execute and
deliver a guaranty (each, a
Guaranty
and collectively, the
Guaranties
)
in favor of Crown Bank (the
Bank
).
B. Southwest is the sole shareholder of
Southwest Casino & Hotel Corp., a Minnesota corporation (
Casino &
Hotel
) and currently holds 1,000 shares of Casino & Hotel
common stock (the
Shares
).
C. In consideration of co-signing the
Notes or entering into the Guaranties, Southwest has agreed to execute and
deliver this Agreement to the Co-Signers.
AGREEMENT
In consideration
of the accommodations made and to be made by the Co-Signers to Southwest, the
mutual promises, covenants and agreements contained in this Agreement, and
other good and valuable consideration, the receipt and sufficiency of which
each of the parties to this Agreement acknowledges, Southwest and the
Co-Signers agree as follows:
1.
THE PLEDGE
1.1
The Pledge.
Southwest pledges and grants to the Co-Signers, as agents for and on
behalf of the Co-Signers, a first priority security interest (the
Pledge
) in the Shares
(the
Collateral
), including:
a.
All securities, instruments, other investment
property and other rights or interests of any kind or description, at any time
issued or issuable as an addition to, in substitution or exchange for, or with
respect to, the Shares, including, without limitation, any shares or other
ownership interest issued as dividends or as the result of any reclassification,
split-up or other reorganization;
b.
All cash, proceeds, dividends, interest or other
property, paid, payable, received, receivable or otherwise distributed in
respect of, in exchange for, or upon the sale or other disposition of the Shares;
but before the occurrence of an Event of Default, not including any cash
dividends or distributions payable with respect to the Membership Interest,
which will remain the property of Southwest; and
c.
All records, books, ledgers, computer tapes or disks,
printouts and other information in whatsoever form regarding the Shares.
1.2
Secured Obligations
. The Pledge granted in this Agreement is given
to secure (i) all liabilities and obligations incurred by the Co-Signers
under the Notes, (ii) all liabilities and obligations incurred by the
Co-Signers under the Guarantees, and (iii) all amounts expended or
incurred by the Co-
Signers in negotiating with the Company or Southwest
in conjunction with Southwests obligations under this Agreement or in exercising
any rights or remedies consequent upon any default under this Agreement,
including, without limitation, UCC filing fees, court costs, and attorneys fees
and expenses of counsel for the Co-Signers incurred in connection with the
enforcement of this Agreement whether or not suit has been filed (all of which
are referred to in this Agreement collectively as the
Secured Obligations
).
1.3
Limitations
on Pledged Securities
.
Southwest represents and warrants to Co-Signers that Southwest holds
title to the shares of Southwest Casino and Hotel Corp. common stock free and
clear of any liens, pledges or encumbrances, except liens in favor of the
Co-Signers. Provided, however, that
Southwest Casino and Hotel Corp. owns a 50% membership interest in North Metro
Harness Initiative, LLC (the
North Metro
Interest
) and Southwest Casino and Hotel Corp.s ownership of the
North Metro Interest is subject to a prior pledge of the North Metro Interest
to Black Diamond Commercial Finance, LLC (the
Black Diamond Pledge
).
Any attempt by Southwest Casino and Hotel Corp. or by Co-Signers to
transfer the North Metro Interest is subordinate to the prior Black Diamond
Pledge and cannot occur without the consent of Black Diamond Commercial
Finance, LLC, which Black Diamond may withhold in its sole discretion. The North Metro Interest is also subject to
the terms of the North Metro Harness Initiative, LLC Member Control Agreement
dated June 4, 2004 that further limits the ability of Southwest Casino and
Hotel Corp. to dispose of the North Metro Interest. In addition to the consent of Black Diamond
Commercial Finance, LLC, Southwest Casino and Hotel Corp. or Co-Signers must
obtain the consent of MTR-Harness, Inc., which also holds a 50% membership
interest in North Metro an may also withhold its consent in its sole
discretion, prior to any transfer of the North Metro Interest.
1.4
Proxies, Stock Powers,
Other Endorsements
.
After the occurrence of an Event of Default and upon demand of
Co-Signers representing a majority of the total principal amount of the Notes
and the Guarantees, Southwest will execute, assign and endorse to the
Co-Signers all proxies, endorsements, applications, acceptances, powers,
documents, instruments or other evidences of payment or writing constituting or
relating to any of the Collateral. All
assignments and endorsements will be in form and substance reasonably
satisfactory to the Co-Signers.
1.5
Duty of the Co-Signers
. The Co-Signers are not be obligated to take
any action to exercise any rights, warrants or options with respect to the
Collateral, to present any coupon(s) for payment, to effect redemption of,
or to make any presentment, protest, notice of protest or to otherwise protect
any optional right(s) on the Collateral.
1.6
Security Interest is
Continuing
.
Southwest agrees and acknowledges that the Pledge granted in this
Agreement is a continuing security interest and must continue in full force and
effect until all of the Secured Obligations are paid in full. Except as expressly provided in this
Agreement, the Co-Signers must release their interest in the Collateral only
upon payment in full of all of the Secured Obligations and the indefeasible
termination, release and discharge of the Guaranties; provided, however, that
the Co-Signers will execute and deliver to Southwest the proper instruments
(including UCC termination statements) acknowledging the termination of this
Agreement, and will duly assign, transfer and deliver to Southwest any
Collateral that may be in the possession of the Co-Signers and has not been
disposed of, applied or released.
1.7
Actions Not Affecting the
Pledge
. The
Co-Signers may (and each of the Co-Signers is authorized to make from time to
time, without notice to anyone) without impairing or affecting the Pledge
granted in this Agreement:
a.
Sell, pledge, surrender, compromise,
settle, release, renew, extend, grant an indulgence, alter, substitute, change,
modify, or otherwise dispose of any of the Secured Obligations or any contract
evidencing the same or any part of the Secured Obligations or any security
interest for the Secured Obligations;
b.
Accept additional security for or
additional parties or other Co-Signers upon any of the Secured Obligations or
release any portion of the Collateral or any maker, endorser, security or
Co-Signer or other party liable on any portion of the Secured Obligations;
c.
Apply any and all payments a Co-Signer
receives on account of the Secured Obligations and the proceeds of the
Collateral or any other security for the Collateral against any item or items
of the Secured Obligations as the Co-Signers, each in its sole discretion, may
determine, whether the same is then due or not; and
d.
Settle or compromise any liability
secured by this Agreement, any security for that liability or any liability
(including any of those under this Agreement) incurred directly or indirectly
in respect of the liability secured by this Agreement, and may subordinate the
payment of all or part of that liability to the payment of any liability of
Southwest to creditors of Southwest, other than the Co-Signers.
2.
WARRANTIES AND REPRESENTATIONS OF SOUTHWEST
2.1
Power and Authority
. Southwest has full power and authority to
execute and deliver this Agreement and to perform its obligations under this
Agreement.
2.2
Enforceability
. This Agreement is the legal, valid and
binding obligation of Southwest, enforceable against Southwest according to its
terms, subject only to bankruptcy, insolvency, moratorium, reorganization or
similar laws, rulings or decisions at the time in effect affecting the
enforceability of rights of creditors generally and to applicable equitable
principles.
2.3
Title to the Collateral
. Southwest warrants and represents to the
Co-Signers that it holds title to the Collateral free and clear of any liens,
pledges or encumbrances, except liens or encumbrances in favor of the
Co-Signers, and no financing statement or registration of pledge covering all
or any part of the Collateral is on file in any public office or private office,
except those in favor of the Co-Signers.
3.
EVENTS OF DEFAULT AND REMEDIES
3.1
Events
of Default
. An
Event of Default
will occur if the Bank
requires and any co-signer makes any payment on a Note or the Bank calls all or
any portion of any Guaranty given by any of the Co-Signers and Southwest is
unable to reimburse the amount paid by the Co-Signer or Co-Signers within 30
days. After occurrence of an Event of
Default and upon written demand from Co-Signers representing a majority in
interest of the total amount co-signed or guaranteed, Southwest will assign to
the Co-Signers, that portion of the Collateral reasonably determined by
Co-Signer to be of value necessary to repay to Co-Signer any amounts paid by
Co-Signer in connection with the Event of Default. Southwest and Co-Signer agree that the intent
of this provision is to reimburse Co-Signer only for amounts actually paid in
connection with an Event of Default. For
that reason, strict foreclosure in accordance with Section 9-620 of the
Uniform Commercial Code (
UCC
) is
not available to Co-Signers. If
Co-Signer disposes of the assigned Collateral in accordance with Section 3.2
of this Agreement within 90 days of its assignment to Co-Signer and does not
receive sufficient value to repay to Co-Signer any
amounts paid by Co-Signer in connection with the Event
of Default, Co-Signer shall have the right to assignment of additional
Collateral in accordance with the terms of this Agreement.
3.2
Co-Signers Right to Sell
the Collateral
.
Subject to the terms and conditions of the Black Diamond Pledge and the
Member Control Agreement, upon the occurrence of an Event of Default and
assignment of the Collateral, each Co-Signer:
a.
will be entitled to sell that portion of
the Collateral reasonably necessary to repay to Co-Signer any amounts paid by
Co-Signer in connection with the Event of Default. The disposition of the Collateral after an
Event of Default shall be by public proceedings under UCC 9-610, and not by
private proceeding, unless consented to by Southwest in writing subsequent to
an Event of Default; or
b.
may cause that portion of the Collateral
assigned to that Co-Signer to be registered in the Co-Signers name and to
receive all dividends, interest and other distributions on that portion of the
Collateral and apply the same to the Secured Obligations as the Co-Signer deems
appropriate.
3.3
Waiver of Redemption; No
Liability for Value Decline
. Any and all sales of the Collateral held by
the Co-Signers under Section 3.2 above will be free from any right of
redemption, which Southwest expressly waives.
In addition, the Co-Signers will have no liability for any increase or
decrease in the value of any of the Collateral at any time.
3.4
Application of Sales
Proceeds
. The
proceeds of the sale(s) of the Collateral under Section 3.2 above
will be applied as follows:
a.
First, to the payment of all costs and
expenses incurred by the Co-Signers under this Agreement, including all costs
and expenses of collection, whether or not a suit has been filed, including,
but not limited to, all sales commissions, brokers fees and attorneys fees;
b.
Second, to the satisfaction of the
Secured Obligations;
c.
Third, to the payment of any other
amounts required by applicable law; and
d.
Fourth, any balance then remaining will
be paid to Southwest, unless it is the subject of tax lien or levy, attachment,
restraining order, injunction or other such distraint.
3.5
Rights Cumulative
. All remedies of the Co-Signers under this
Agreement are in addition to remedies afforded to the Co-Signers under any
other document evidencing or securing any of the Secured Obligations or any
other document or under law. All
remedies are cumulative and may be exercised by the Co-Signers concurrently or
consecutively. No failure or omission of
the Co-Signers to exercise any right or remedy will constitute a waiver.
4.
MISCELLANEOUS
4.1
Agreement Binding
. This Agreement binds the successors and
assigns of Southwest and the insolvency, bankruptcy, or release of any such
party will not release or discharge any other borrower, pledgor, endorser, or
Co-Signer from liability under this Agreement; provided, however, that the
rights of Southwest under this Agreement may not be assigned without the prior
written consent of the Co-Signers.
4.2
Severability
. If one or more provisions of this Agreement
should be declared to be invalid, illegal or unenforceable in any respect by a
court of competent jurisdiction, the validity, legality and enforceability of
the remaining provisions in this Agreement will not in any way be affected or
impaired.
4.3
Regarding
the Secured Parties
. All actions taken by the Co-Signers
under this Agreement will be taken only upon the mutual agreement of Co-Signers
representing a majority of the total amount Guaranteed under the Subscription
Agreements.
4.4
Attorney in Fact
. Effective upon the occurrence of an Event of
Default, Southwest appoints the Co-Signers as Southwests attorney-in-fact for
the purpose of carrying out the terms of this Agreement and taking any action
and executing any instrument which it may deem advisable or necessary to
accomplish the purposes of this Agreement, which appointment is irrevocable and
coupled with an interest. Without
limiting the generality of the foregoing, upon the occurrence of an Event of
Default, the Co-Signers have the right, power and authority to endorse and
collect all checks and other orders for the payment of money made payable to
Southwest representing any dividend, interest payment or other distribution in
respect of the Collateral or any part of the Collateral.
4.5
Notices
. Any notice required under this Agreement will
be deemed given on the third banking day after deposit in the U.S. Mail, proper
postage prepaid addressed to Southwest and to the Co-Signers at the following
addresses:
Southwest Casino
Corporation
2001 Killebrew Drive, Suite 350
Minneapolis, MN 55425
Attn: Thomas E. Fox,
President
The Co-Signers:
At the address listed on Exhibit 1
to this Agreement.
Any changes in a partys
address may be made by giving written notice to the other parties in accordance
with this Section.
4.6
Governing Law;
Jurisdiction
.
This Agreement must be construed, interpreted and governed according to
the laws of the State of Minnesota. Southwest and each of the Co-Signers consent
to the personal jurisdiction of the state and federal courts located in the
State of Minnesota in connection
with any controversy related to this Agreement, waive any argument that venue
in such forums is not convenient and agree that any litigation instigated in
connection with this Agreement must be venued in either the District Courts of Hennepin County, Minnesota, or the
United States District Court for the District
of Minnesota, Fourth Division.
4.7
Further Assurances
. Southwest agrees to do any further act and
things, and to execute and deliver any additional conveyances, assignments,
agreements and instruments, as the Co-Signers may at any time request in
connection with the administration or enforcement of this Agreement or related
to the Collateral or any part of the Collateral or in order better to assure
and confirm unto the Co-Signers its rights, powers and remedies under this
Agreement. Southwest consents and agrees
that the issuers of or obligors in respect of the Collateral or any registrar
or transfer agent or trustees for any of the Collateral are entitled to accept
the provisions of this Agreement as conclusive evidence of the right of the
Co-Signers to effect any transfer, notwithstanding any other notice or direction
to the contrary given by Southwest or any other person to any issuers or
obligors or to any registrar or transfer agent or trustees.
Signature Page for
Pledge Agreement
IN WITNESS WHEREOF
,
the parties to this Agreement have executed this
instrument as of the day and year first above written.
SOUTHWEST
CASINO CORPORATON
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CO-SIGNER
or GUARANTOR
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Exhibit 10.4
AMENDED
AND RESTATED
PERSONAL
GUARANTY
BY
TO
CROWN BANK
Dated: March 7, 2008
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 a series of promissory notes dated
the same date as this Amended and Restated Guaranty and identified on Exhibit 1
to this Guaranty (the Notes) and that certain Line of Credit dated April 19,
2007 (the Line of Credit) all by and between the Lender and the Borrower, the
undersigned (the Guarantor) hereby amends and restates the Amended and Restated
Personal Guaranty between Lender and Borrow dated April 16, 2007 and
hereby:
1. Unconditionally and absolutely
guarantees to the Lender 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 the Line of Credit, and any and all renewals
thereof including notes taken in substitution therefore (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
Notes or the Line of Credit.
2. Agrees that the Lender may demand
payment from the Guarantor of any installment (or portion thereof) of principal
or interest on either the Notes or the Line of Credit, 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, or (ii) accelerated
payment of the Notes or the Line of Credit, or (iii) commenced
repossession of, or foreclosure of any security interest, mortgage or other
lien in, any or all of the collateral securing the Notes or the Line of Credit,
or (iv) otherwise exercised its rights and remedies under this Guaranty or
under the Notes, the Line of Credit, 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 Guarantors 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 and the Line of Credit; 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 right to assign or otherwise transfer his rights
and obligations under this Guaranty to any third party without the prior written
consent of the Lender; and that any such assignment or transfer shall not
release or affect the liability of the Guarantor hereunder in any manner
whatsoever.
13. Agrees that the Guarantor may be
joined in any action or proceeding commenced against the Borrower in connection
with or based upon the Obligations and recovery may be had against the
Guarantor in any such action or proceeding or in any independent action or
proceeding
2
against
the Guarantor should the Borrower fail to duly and punctually pay any of the
principal of or interest on the Obligations without any requirement that the
Lender first assert, prosecute or exhaust any remedy or claim against the
Borrower.
14. Agrees that upon the occurrence at
any time of an Event of Default, the Lender shall have the right to set off any
and all amounts due hereunder by the Guarantor to the Lender against any
indebtedness or obligation of the Lender to the Guarantor.
15. Agrees that the Guarantor shall be
liable to the Lender for any deficiency remaining after foreclosure of any
mortgage in real estate or any security interest in personal property granted
by the Borrower, the Guarantor or any third party to the Lender to secure
repayment of the Obligations and the subsequent sale by the Lender of the
property subject thereto to a third party (whether at a foreclosure sale or at
a sale thereafter by the Lender in the event the Lender purchases said property
at the foreclosure sale) notwithstanding any provision of applicable law which
may prevent the Lender from obtaining a deficiency judgment against, or
otherwise collecting a deficiency from, the Borrower including, without
limitation, Minnesota Statutes Section 582.30.
16. Agrees that this Guaranty shall be
deemed a contract made under and pursuant to the laws of the State of Minnesota
and shall be governed by and construed under the laws of such state without
giving effect to the choice of law provisions thereof; and that, wherever
possible, each provision of this Guaranty shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Guaranty shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or the remaining
provisions of the Guaranty.
17. Agrees that no failure on the part of
the Lender to exercise, and no delay in exercising, any right or remedy hereunder
shall operate as or constitute a waiver thereof; nor shall any single or
partial exercise of any right or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right or remedy granted hereby or
by any related document or by law.
18. Waives any and all claims against the
Lender and defenses to performance and payment hereunder relating in any way,
directly or indirectly, to the performance of the Lenders obligations or
exercise of any of its rights under the Notes and the documents related
thereto.
19. Warrants
and represents to the Lender as follows:
a.
Enforceability
. This
Guaranty constitutes the legal, valid and binding obligation of the Guarantor
enforceable in accordance with its terms (subject, as to enforceability, to
limitations resulting from bankruptcy, insolvency or other similar laws
affecting creditors rights generally).
b.
Litigation
. There
is no action, suit or proceeding pending or, to the knowledge of the Guarantor,
threatened against or affecting the Guarantor which, if adversely determined,
would have a Material Adverse Effect (as defined in the Credit Agreement) on
the Guarantor, or which would question the validity of this Guaranty or any
3
instrument,
document or other agreement related hereto or required hereby, or impair the
ability of the Guarantor to perform his obligations hereunder or thereunder.
c.
Default
. The
Guarantor is not in default of a material provision under any material
agreement, instrument, decree or order to which he is a party or by which he or
his property is bound or affected.
d.
Consents
. To
the Guarantors knowledge, no consent, approval, order or authorization of, or
registration, declaration or filing with, or notice to, any governmental
authority or any third party is required in connection with the execution and
delivery of this Guaranty or any of the agreements or instruments herein
mentioned to which the Guarantor is a party or the carrying out or performance
of any of the transactions required or contemplated hereby or thereby or, if
required, such consent, approval, order or authorization has been obtained or
such registration, declaration or filing has been accomplished or such notice
has been given prior to the date hereof.
e.
Taxes
. The
Guarantor has filed all tax returns required to be filed and has paid all taxes
shown thereon to be due, including interest and penalties, which are not being
contested in good faith and by appropriate proceedings and has no information
or knowledge of any objections to or claims for additional taxes in respect of
federal income or excess profits tax returns for prior years.
20. Agrees that the liability of the
Guarantor and any other guarantor of the Obligations shall be joint and
several.
21. Agrees to deliver to the Lender
financial information and related documents as set forth in Section 5.1 of
the Credit Agreement with respect to the Guarantor.
22. Agrees that (i) the Guarantor
will indirectly benefit by and from the making of the loans by the Lender to
the Borrower evidenced by the Notes and the Line of Credit; (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 Guarantors creditors; and (v) the Lender has agreed to make
such loans in reliance upon this Guaranty.
23. Agrees that if, at any time, all or
any part of any payment previously applied by the Lender to any of the
Obligations must be returned by the Lender for any reason, whether by court
order, administrative order or settlement, the Guarantor shall remain liable
for the full amount returned as if said amount had never been received by the
Lender, notwithstanding any term of this Guaranty or the cancellation or return
of any note or other agreement evidencing the Obligations.
24. Irrevocably submits to the
jurisdiction of any Minnesota state court or federal court over any action or
proceeding arising out of or relating to this Guaranty, the Notes and any
4
instrument,
agreement or document related thereto; agrees that all claims in respect of
such action or proceeding may be heard and determined in such Minnesota state
or federal court; irrevocably waives, to the fullest extent he may effectively
do so, the defense of an inconvenient forum to the maintenance of such action
or proceeding; irrevocably consents to the service of copies of the summons and
complaint and any other process which may be served in any such action or
proceeding by the mailing by United States certified mail, return receipt
requested, of copies of such process to the Guarantors last known address; and
agrees that judgment final by appeal, or expiration of time to appeal without
an appeal being taken, in any such action or proceeding shall be conclusive and
may be enforced in any other jurisdictions by suit on the judgment or in any
other manner provided by law; provided that nothing in this paragraph shall
affect the right of the Lender to serve legal process in any other manner permitted
by law or affect the right of Lender to bring any action or proceeding against
the Guarantor or his property in the courts of any other jurisdiction to the
extent permitted by law.
25.
THE
GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF, BASED ON OR PERTAINING TO THIS
GUARANTY.
26. Notwithstanding the aggregate amount
of the Obligations which may from time to time be outstanding, the Guarantors
liability hereunder with respect to the Promissory Notes and the Line of Credit
shall be limited to an aggregate of $250,000.00 plus all attorneys fees,
collection costs and enforcement expenses incurred in connection with the
enforcement of this Guaranty. The
Obligations may be created and continued in any amount without affecting or
impairing the Guarantors liability hereunder, and the Lender may apply any
sums received by or available to the Lender on account of the Obligations from
the Borrower or any other person (except the Guarantor) from their properties,
out of any collateral security, or from any other source, to the Obligations in
any manner as the Lender may determine in its sole discretion, and such
payment, allowance or application shall not reduce, affect, or impair the
Guarantors liability hereunder. Any
payment made by the Guarantor under this Guaranty shall be applied by the
Lender to the Obligations in the Lenders sole discretion.
Remainder of Page Intentionally Blank
Signatures
on Next Page
5
Signature Page for
Personal
Guarantee
Dated
as of this 7th day of March 2008.
STATE OF MINNESOTA
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COUNTY OF
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The
foregoing instrument was acknowledged before me this
day of January 2008,
by ,
a
individual.
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