Delaware
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0-22290
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84-1271317
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(State or other jurisdiction
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(Commission
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(I.R.S. Employer
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of incorporation)
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File Number)
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Identification Number)
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2860 South Circle Drive, Suite 350, Colorado Springs, CO
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80906
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(Address of principal executive offices)
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(Zip Code)
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Registrant's telephone number, including area code:
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719-527-8300
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SIGNATURE
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Century Casinos, Inc.
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(Registrant)
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Date: December 3, 2012
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By : /s/ Margaret Stapleton
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Margaret Stapleton
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Executive Vice President and Principal Financial/Accounting Office
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(a)
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interest expense for such period in accordance with GAAP (as the same would be set forth or reflected in a statement of net earnings of the Borrower for that period), to the extent deducted in determining the net earnings of the Borrower;
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(b)
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all amounts deducted in the calculation of net earnings of the Borrower in respect of the provision for income taxes, including any interest and penalties thereon but excluding from such deduction any loss carry-forwards, tax credits or tax benefits and any income taxes so deducted and attributable to amounts included in paragraph (e) below; and
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(c)
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all amounts deducted in the calculation of net earnings of the Borrower in respect of non-cash items, including depreciation, depletion, amortization, asset impairment, goodwill impairment, future taxes, foreign currency obligations, non-cash losses resulting from marking-to-market the outstanding financial instruments of the Borrower (in accordance with GAAP) and stock-based compensation; and
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(d)
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all costs and expenses incurred in respect of the Lender’s involvement with respect to the REC Project including any management or other fees paid to the Lender pursuant to the Management Services Agreement or otherwise and any costs and expenses arising under or with respect to the Credit Agreement or any Security related thereto;
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(e)
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all amounts included in the calculation of net earnings of the Borrower in respect of extraordinary and non-recurring earnings and gains;
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(f)
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unless the same were deducted in the calculation of net earnings of the Borrower, all amounts in respect of equity loss and extraordinary and non-recurring losses and any non-cash impairment charges; and
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(g)
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any other non-cash items increasing net earnings of the Borrower for such period.
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(a)
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all charges, fees, assessments, application, renewal and commitment fees, monthly administration or account charges, review fees and service fees payable by the Borrower to the Lender under this Credit Agreement or otherwise by which the Borrower has agreed to become liable;
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(b)
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all charges and costs in connection with legal fees and disbursements incurred by the Lender, as between the Lender and its' own solicitors on a full indemnity basis in connection with the preparation, execution, amendment, registration, discharge, enforcement, collection, or realization of the Security and this Credit Agreement, and all documents and agreements incidental or collateral thereto;
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(c)
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all fees, disbursements, charges and expenses incurred by the Lender in collecting or attempting to collect any monies due hereunder, including the preservation, protection, realization, collection, and crystallization of any of the Security;
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(d)
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all costs, expenses, liabilities, and charges howsoever arising, paid or agreed to be paid by the Lender under this Credit Agreement, including the payment of taxes, assessments, or any other sums deemed by the Lender necessary with respect to any Encumbrances or with respect to any of the property forming a part of the Security hereunder, including all appraisers', receivers', receiver-managers', or agents' or representatives' fees, disbursements, charges or liabilities arising in connection with this Credit Agreement and the Security, and all costs, expenses, liabilities and charges howsoever arising, paid or agreed to be paid by the Lender under this Credit Agreement relating to consultants' or solicitors' fees, disbursements, charges or liabilities, collectively, including those arising pursuant to Article 4; and
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(e)
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all losses, costs, expenses, damages and amounts of whatsoever nature or kind, including without limitation, all legal costs incurred by the Lender, as between a solicitor and his own client, and all claims of third parties that the Lender may suffer, incur or sustain as a direct or indirect result of any representation or warranty of the Borrower whether herein or elsewhere being false or materially misleading, or the Borrower failing to observe or perform its covenants contained herein.
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(a)
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The Lender has received such documents as it in its sole discretion deems satisfactory, confirming the Borrower shall have obtained all necessary approvals and consents from AGLC relating to the REC Project and related documents.
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(b)
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The Lender has received such documents as it in its sole discretion deems satisfactory, confirming the Borrower shall have obtained all necessary approvals and consents from HRA relating to the REC Project and related documents.
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(c)
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The Lender has received such documents as it in its sole discretion deems satisfactory, confirming the Borrower has satisfied all obligations under and is otherwise in compliance with this Credit Agreement including, without limitation, the Development Schedule, and the Securities.
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(d)
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The Lender has received such documents as it in its sole discretion deems satisfactory, confirming the Borrower is in full compliance with the Purchase Agreement, excepting only one single breach representing a claim against the Borrower under such agreement, of not more than $100,000.00.
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(e)
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All Securities and related documentation shall have been executed and delivered to the Lender, be in good standing and be registered at such registry offices in the priority required by the Lender, subject only to the Permitted Encumbrances, all in a form satisfactory to the Lender in its sole discretion.
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(f)
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The Lender shall be satisfied with the provisions of the Ground Lease, municipal subdivision approval and registration thereof, the freehold title to the Lands, the Borrower’s leasehold title to the Lands and the registration thereof, and title to all other property and assets of the Borrower.
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(g)
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The Lender shall be satisfied with the provisions of the Borrower’s articles of incorporation, bylaws, Unanimous Shareholders Agreement and the voting and lock-up agreement among certain shareholders of the Borrower.
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(h)
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The Lender has received legal opinions from the solicitors for the Borrower, in a form and substance satisfactory to the Lender, with respect to the capacity and power of the Borrower to enter into this Credit Agreement, to execute the Securities, and other documentation required by the Lender, to perform its obligations hereunder and under the Securities and to such other matters as the Lender or its counsel may require.
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(i)
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Such other documents, securities, assurances, certificates, consents, statutory declarations, by-laws, opinions, and resolutions as the Lender in its discretion requires of any person, firm or corporation have been delivered to the Lender.
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(j)
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Assurances in a form satisfactory to the Lender's solicitors, acting reasonably, have been provided by the Borrower to confirm that all necessary corporate action has been taken by the Borrower in respect of this Credit Agreement to ensure that this Credit Agreement and all of the Securities required to be delivered hereunder are valid and binding obligations of the Borrower.
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(k)
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The Lender has, in its sole discretion, otherwise deemed all conditions precedent to advance have been satisfied.
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(l)
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Four nominees of the Lender shall have been duly elected to and be on the Borrower’s board of directors.
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(a)
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Mortgage of Leasehold Interest, duly registered at Alberta Land Titles, providing a first mortgage and charge over the Borrower’s entire leasehold estate and interest in the Lands which the Borrower derived pursuant to the Ground Lease, and to include assignment of Borrower’s option to purchase the Lands (Ground Lease to be registered so as to create a separate leasehold title to the Lands);
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(b)
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Leasehold Acknowledgement Agreement among the Lender, the Borrower and 1685258 Alberta Ltd.;
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(c)
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General Assignment of Leases and Rents, from Borrower duly registered at Alberta Land Titles;
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(d)
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General Security Agreement, duly registered in all applicable jurisdictions, providing a security interest in all Borrower’s present and after-acquired personal property, and land charge, in priority to all other registered security interests;
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(e)
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Assignment of Material Contracts, from Borrower;
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(f)
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Environmental Indemnity and Agreement, from the Borrower;
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(g)
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Conversion Options from Borrower, permitting Lender to convert debt to equity in the form attached as Schedule “F” hereto;
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(h)
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Management Services Agreement between Borrower and Century Casinos Europe LLC;
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(i)
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Indemnity Agreement from each shareholder;
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(j)
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Securities Pledge Agreement from each Shareholder, duly registered at Lender’s option in all applicable jurisdictions, providing a security interest in all shares in the capital of the Borrower, in priority to all other registered security interests against such shares (original share certificates to be delivered to Lender duly endorsed for transfer);
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(k)
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Consent from each shareholder as to disposition of Shares by other shareholders;
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(l)
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Assignment and Postponement of Creditor’s Claims, from each shareholder, duly registered in all applicable jurisdictions;
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(m)
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Voting and lock-up agreement among certain shareholders;
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(n)
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Covenant Agreement from each employee of Borrower, who is in Lender’s opinion important for the development or operation of the REC Project, to observe prohibitions in Unanimous Shareholders Agreement;
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(o)
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Assignment of property insurance coverage, with loss payable firstly to the Lender, subject to standard mortgage clause endorsement. Such insurance may, at the Lender's option, be reviewed by a Lender approved Insurance Risk Management firm to ensure adequate coverage and insurance terms satisfactory to the Lender. Such a review shall be at the cost of the Borrower;
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(p)
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Such additional securities (including direction to pay, resolutions, certificates, opinions and other supporting documents) as the Lender may deem necessary or advisable in connection with the foregoing Security.
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(a)
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The Borrower is a body corporate duly incorporated pursuant to the laws of Canada and is validly existing and authorized to carry on business in all territories and provinces in which it conducts business.
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(b)
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The Borrower has full power, legal right and corporate authority and capacity to enter into and perform its obligations and covenants under this Credit Agreement and has taken the necessary corporate action to authorize the execution, delivery and performance of this Credit Agreement and the Securities, and no such action requires the consent, approval or authority of any regulatory or governmental authority having jurisdiction over the Borrower, not already obtained.
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(c)
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There is no civil, criminal or administrative action, suit, demand, claim, hearing, notice of demand letter, notice of violation, investigation or proceeding pending or threatened against the Borrower or the REC Project, nor, to the best knowledge of the Borrower, are any of the foregoing threatened against the Borrower whether related in any way to any Environmental Law or to any act or occurrence of Environmental Contamination.
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(d)
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Bob Allen and Alberta Downs, Inc. have waived all actual or potential claims against the Borrower.
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(e)
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The Borrower does not have any debts, liabilities, long-term contracts or other material contractual obligations other than the Existing Debt.
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(f)
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The Borrower has not granted or promised to grant or issue any certificates, warrants or other evidences of conversion privileges, options or rights to acquire securities of the Borrower to any person, other than the Lender.
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(g)
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All registered holders of shares in the capital stock of the Borrower, and their respective shareholdings are as set out in the schedule of Initial Shareholders attached hereto.
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(h)
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The Initial Shareholders have filed, or are able and will file, all necessary background investigation forms and other such paperwork as may be required by AGLC from time to time and if any Initial Shareholder fails to pass AGLC requirements, any acquisition by the Borrower of such Initial Shareholder’s shares in the Borrower will not result in any adverse consequence to the Lender or to the development or operation of the REC Project.
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(i)
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The Borrower is the legal and beneficial owner of a leasehold estate in and to the Lands as described in the Ground Lease.
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(j)
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The Borrower is not in default in any material respect under any material obligation or under any licence or permit to own or operate assets or to carry on its business as conducted on the date hereof.
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(k)
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All permits, licences, consents and other authorizations or approvals, whether from governments, regulatory or other bodies or from private persons requisite for this Credit Agreement and the borrowing and granting of the Security provided herein, have been, or will be prior to any advances hereunder, obtained by the Borrower as appropriate, and all necessary filings and reports to all regulatory agencies in respect thereof have been or will have been properly made prior to any advance hereunder.
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(l)
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Neither the execution nor the delivery of this Credit Agreement, nor the execution or delivery of any of the Securities, does or will violate or constitute a default under any agreement, declaration, trust deed, debenture, mortgage, indenture, bond, instrument, agreement, charter, bylaw, provision, statute, judgment, regulation or order of law to which the Borrower is bound or by which any of its assets are bound or affected.
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(m)
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The Borrower has no liability for income, corporate, sales, value added, goods and services, property, customs and excise tax, business or other taxes or charges including duties and import taxes assessed by any applicable taxing authority not disclosed by the financial statements of the Borrower except current taxes accrued in the ordinary course of business.
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(n)
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The Borrower does not know of any security interest, registered or unregistered, pertaining to the assets of the Borrower other than those to be discharged as a condition of funding.
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(o)
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With respect to environmental matters:
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(i)
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The Borrower, to the best of its knowledge after having performed all due diligent investigations and inquiries in the ordinary course of its business, has obtained all permits, licences and other authorizations which are required under Environmental Laws and is and shall continue to be in compliance therewith;
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(ii)
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The Borrower is not aware of, nor has it received notice of, any past, present or future events, conditions, circumstances, activities, practices, incidents, actions or plans which may interfere with and prevent the compliance or continued compliance by the Borrower with Environmental Laws or any regulation, code, plan, order, decree, promulgated or approved thereunder by any federal, provincial or local Court or any other governmental authority, agency or instrumentality, which may give rise to any common law or legal liability, or otherwise form the basis of any claim, action, demand, suit, proceeding, hearing or investigation, based on or related to any act or occurrence of Environmental Contamination;
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(iii)
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To the best knowledge of the Borrower, after having performed all due diligent investigations and inquiries in the ordinary course of its business, no hazardous materials, waste, pollutants or similar substances and no other material used in or generated by the business of the Borrower has been used, stored, treated or otherwise disposed of, in violation of any Environmental Laws.
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(p)
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Except for that which has already been disclosed in writing to the Lender, there is no existing litigation, action, proceeding or investigation pending or, to the best of the knowledge of the Borrower, after due inquiry, threatened before any court or arbitrator, or before any government department, commission, agency or regulatory authority (including, without limitation the Department of Transport), which might result, singly or in the aggregate, in any material or adverse change in the business, or proposed business, operations, affairs, financial or other condition, properties or assets of the Borrower.
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(q)
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The Credit Agreement and the Securities, insofar as they pertain to the Borrower, constitute legal, valid and binding obligations of the Borrower, enforceable against it in accordance with their respective terms (except as such enforcement may be the subject of any applicable bankruptcy, insolvency or similar laws generally affecting the enforcement of creditors’ rights and the discretion exercisable by the courts in granting equitable remedies, such as specific performance).
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(r)
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The Credit Agreement and the Securities do not violate any of the provisions of the Borrower's constating documents or, to the best of the Borrower's knowledge, any contracts, agreements, trust agreements, laws, regulations, orders, injunctions, judgements or decrees to which the Borrower is subject.
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(s)
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All Creditors have been paid in the ordinary course of business with the exception of such Creditors, if any, with whom a valid and subsisting dispute has been raised and maintained by the Borrower, and which dispute is reasonable and prudent to raise and maintain, and such dispute has been previously disclosed in writing to the Lender.
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(t)
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Each of those descriptions and definitions set out therein pursuant to Article 1 are true, complete and accurate representations of the described subjects.
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(u)
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The Borrower's chief executive office is located in the City of Calgary, Alberta.
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(v)
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All assets of the Borrower are in good repair and condition and are insured as required pursuant to this Credit Agreement.
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(w)
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It has assets that have been capitalized such that they can be expensed once the Borrower sells its interest in the Lands or depreciated once the REC Project becomes operational, that the Borrower will be entitled to expense the same under previous fiscal years, and otherwise has capitalized assets and losses carried forward that will entitle the Borrower to use in the future to indirectly benefit all shareholders, including the Lender or its affiliate should it become a shareholder of the Borrower, subject to AGLC approval.
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(x)
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The Borrower has not relied, nor shall it in the future rely, upon any written or verbal representations, warranties or agreements of the Lender, its officers, agents, employees or any other person in executing this Credit Agreement or granting the Security, except such representations, warranties or agreements as are set out in this Agreement.
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(y)
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Each of the warranties and representations made pursuant to Section 8.1 shall be valid and effective as if made once again as of and on the dates of each and every advance of the Loan, except as may be communicated in writing by the Borrower to the Lender, prior to any such advance of the Loan.
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(a)
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The Borrower will operate a minimum of 625 gaming machines, to be provided by AGLC, back-of-house facilities, entrance area, bar and lounge facilities, off-track-betting area, limited food and beverage facilities as well as a small stage in accordance with Applicable Laws.
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(b)
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The Borrower will observe and perform the terms of its articles of incorporation, and bylaws, the Unanimous Shareholders Agreement, the Purchase Agreement, the Management Services Agreement, the Ground Lease and all other land leases and agreements in accordance with their respective terms.
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(c)
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If the Borrower shall require additional funds to complete the REC Project beyond the amount advanced by the Lender, the Borrower will use its best efforts to arrange for such additional funding on the open market and pursuit of any such additional financing and the terms thereof, shall be subject to the Lender’s prior written approval.
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(d)
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The Borrower shall maintain its corporate existence and shall do all such acts and things as are necessary to permit it to carry on its business as presently carried on.
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(e)
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The Borrower will cause the shares in the capital stock of the Borrower held by any Initial Shareholder that does not pass AGLC background investigations to be acquired by the Borrower or by one or more other Initial Shareholders, with no resulting adverse consequence to the Lender or to the development or operation of the REC Project.
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(f)
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The Borrower hereby indemnifies and saves the Lender, its officers, directors, agents, employees, subsidiaries, and affiliates, completely harmless from and against any and all losses, costs, expenses, damages and amounts of whatsoever nature or kind, including without limitation, all legal costs incurred by the Lender, as between a solicitor and his own client, and all claims of third parties that the Lender may suffer, incur or sustain as a direct or indirect result of the Borrower failing to observe or perform its covenants contained herein or in any of the Securities.
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(g)
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The Borrower shall maintain all permits, licences, and consents, from all local, municipal, provincial, and federal authorities, and shall pay all income, corporate, sales, value added, goods and services, property, employee, business or other taxes, assessments, charges, and the like assessed by any such governmental authority, as and when required by law, including, without limitation, any such sums required to be remitted in respect of employees of the Borrower, save and except for those income, corporate, sales, value added, goods and services, property, business or other taxes, assessments, charges and the like which are being disputed in good faith by the Borrower and which have been disclosed in writing to, and acknowledged in writing by, the Lender.
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(h)
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The Borrower shall, at its sole cost, pursue and obtain on a diligent and timely basis all necessary applications, approvals and related agreements including, but not limited to, those required by AGLC, and HRA, so as to allow the Borrower to develop and operate the REC Project on a continuous, uninterrupted basis.
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(i)
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The Borrower shall, at its sole cost, pursue all necessary building and other development permits and approvals from governmental authorities entitling it to commence development and construction of the REC Project and thereafter develop and construct the REC Project promptly and in a good and workmanlike manner all in accordance with the Development Schedule, plans and specifications approved by the Lender and to a standard of quality that is consistent with other facilities in Canada of a type and size similar to the REC Project.
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(j)
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The Borrower will immediately advise the Lender of any notices received from AGLC, HRA or from any other governmental authority (including under any Environmental Laws or any other legislation), which may be issued through any formal or informal inspection or otherwise.
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(k)
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The Borrower shall at all times maintain its chief executive office in the City of Calgary, Alberta.
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(l)
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The Borrower shall at all times carry and maintain, at its own cost, public liability, D&O liability and property damage insurance on its operations, directors and officers, and assets, as the case may be. Such insurance coverage shall be in amounts and form acceptable to the Lender, placed with insurance companies and underwriters acceptable to the Lender.
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(m)
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Without limiting the generality of the foregoing Sub-Section, all public liability insurance coverage provided for in this Article shall be at all times in amounts not less than are carried by prudent owners of similar operations in Canada. All liability and property damage insurance shall, in any event, be in amounts acceptable to the Lender. All liability policies shall name the Lender as additional insured. All property insurance policies shall name the Lender as loss payee. All policies shall provide that no cancellation or modification thereof shall be effective against the Lender until the insurer has given the Lender at least thirty days' prior written notice of cancellation or modification, shall waive the insurer's right to subrogation with respect to the Lender, shall provide that no act or omission of the Borrower or breach of representation or warranty by the Borrower shall, as against the Lender, constitute a defence to payment or otherwise discharge or reduce the insurer's obligations under the policy, and shall provide that such insurance shall be primary to any other insurance available to the Borrower or the Lender in respect of any loss.
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(n)
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In addition to the specific types and amounts of insurance coverage referred to above, the Borrower shall also obtain, in respect of the assets intended to be charged by the Security, such other insurance as is reasonably required by the Lender.
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(o)
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At all reasonable times and from time to time the Borrower shall permit the Lender by its agents, employees and representatives to examine during normal business hours all books of account, records, reports and other papers, assets, business and inventory relating to the operations of the Borrower and shall permit such representatives to take extracts therefrom.
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(p)
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The Borrower shall maintain its operating account at the HSBC Bank Canada, 347 – 58 Ave SE, Calgary, Alberta.
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(q)
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The Borrower shall operate and maintain its business and assets in conformity with all Applicable Laws, orders, rules, regulations, and directives of governmental departments, boards, or authorities, including, without limiting the generality of the foregoing, those of the AGLC and HRA.
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(r)
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The Borrower shall pay when due all licence fees and other fees and assessments necessary for the securing of licences and permits for the operation of the REC Project and shall pay when due all taxes, fees, assessments, or other levies now or hereafter imposed by any government upon the assets or upon the use or operation thereof whether assessed to the Borrower or the Lender or others; provided that upon payment of such fees, assessments, taxes, or levies, the Borrower shall immediately deliver the receipts for such payments to the Lender, upon request. If the Lender pays any sum that is an obligation of the Borrower under this Credit Agreement, then the amount of such payment shall be added to the Loans and shall be repaid to the Lender immediately on demand.
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(s)
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The Borrower shall indemnify and hold the Lender harmless from and against all claims, demands, actions, and causes of actions for loss or damage or injury (including death) to persons or property arising from or in any way relating in any way to the REC Project during the term of this Credit Agreement.
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(t)
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The Borrower shall be entirely responsible to the Lender for any loss, cost, or damage suffered by the Lender as a result of
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(iii)
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any wilful act of any person (other than Lender’s employees or authorized agents of the Lender acting on the instructions of the Lender),
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(u)
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The Borrower shall execute all such further documents and do all such further acts and things as the Lender may reasonably require for the purpose of registering any Security under this Credit Agreement (or financing statements, notices or the like in relation thereto) at any registries or offices of governmental departments, boards, or authorities, so as to evidence and/or protect the interest of the Lender under this Credit Agreement or the Securities.
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(v)
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The Borrower shall forthwith provide upon request any further information, data, financial reports and records, accounting or banking statements, inventory and asset lists, or assurances which the Lender may from time to time require in its sole discretion.
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(w)
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Except as provided herein, the Borrower shall, from its own account, forthwith pay and fund all deficiencies and shortfalls of principal and interest, costs or other expense shortfalls to strictly repay all Indebtedness as required under this Credit Agreement as such cash flow deficiencies or shortfalls may occur from time to time.
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(x)
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With respect to environmental matters, the Borrower shall ensure that no material used in or generated by the business of the Borrower or otherwise, will be used, stored, treated, transported or otherwise disposed of in violation of any Environmental Laws.
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(y)
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The Borrower shall provide to the Lender each and every month following the date of execution of this Credit Agreement, a monthly report, certified by the Borrower as complete and correct, outlining in a form acceptable to the Lender the following:
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(i)
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by the last day of each month, internally prepared financial statements, including a monthly balance sheet and profit and loss statement for the previous month; and
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(ii)
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such other monthly reports pertaining to the operation of the Borrower in such form as the Lender may determine in its sole discretion.
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(z)
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The Borrower shall provide audited annual financial statements of the Borrower signed by a firm of qualified professional accountants within 120 days of the Borrower's fiscal year end, together with profit and loss statement, cash budget and capital expenditures forecast for the current fiscal year.
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(aa)
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The Borrower shall provide to the Lender, quarterly on a date specified by the Lender, a certificate of compliance, signed by authorized signing officers of the Borrower, certifying that all lending conditions and requirements of the Credit Agreement and the Security are being complied with.
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(bb)
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The Borrower shall apply those funds advanced pursuant to the Loans strictly for the purposes previously approved by the Lender in writing.
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(cc)
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The Borrower shall at all times do such acts and things and provide and execute such documents and assurances as shall be necessary to maintain, perform and keep in good standing at all times, all leases, licenses and agreements which are of a material nature in the Lender's sole discretion.
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(dd)
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The Borrower shall immediately advise the Lender in writing of any default under any other agreements to which the Borrower is a party.
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(ee)
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The Borrower shall provide to the Lender copies of all notices of demand, default or dispute received or sent from the date hereof with respect to any material agreement to which the Borrower may be a party.
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(ff)
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The Borrower will use its reasonable commercial efforts to diligently and expeditiously cause the removal of Instrument #7040AM from the fee simple title to the Lands within 120 days of the date of this Agreement.
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(a)
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Make any single expenditure in excess of $100,000.00.
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(b)
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Issue or sell certificates, warrants or other evidences of conversion privileges, options or rights to acquire securities of the Borrower.
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(c)
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Take out a loan or otherwise borrow funds in excess of $100,000.00.
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(d)
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Make changes to the REC Project, or any associated budget.
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(e)
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Make changes to the Development Schedule, any development and construction plan, business plan, financial and marketing strategy, or employment or termination of key employees.
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(f)
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Make changes to the Management Services Agreement.
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(g)
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Make or permit changes to the Ground Lease.
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(h)
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Make or permit changes to the Purchase Agreement.
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(i)
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Exercise or purport to exercise the Option to Purchase or any other option to purchase land.
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(j)
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Take any steps to cause or permit the development of the Hotel.
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(k)
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Select or enter into contracts with major contractors, architects, auditors, consultants or similar third parties.
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(l)
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Cause to form or become shareholder of any subsidiary corporation.
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(m)
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Sell or dispose of asset(s) valued in excess of $100,000.00 in any one year.
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(n)
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Permit any amendment to its articles of incorporation, bylaws or Unanimous Shareholders Agreement, or permit or authorize the reorganization, subdivision, increase, decrease or alteration of the issued or unissued share capital of the Borrower or permit or authorize the transfer, cancellation, retraction, redemption or purchase of any of its capital stock.
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(o)
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Acquire, amalgamate or enter into any partnership, joint venture or syndicate with any corporation, person or other entity.
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(p)
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Make any loan to or invest in or give any guarantee on behalf of or provide any financial assistance to any other person, firm or corporation whatsoever.
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(q)
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Allow the Debt Serviceability Ratio to fall below 2.6:1. For the purposes of determining compliance of the Borrower with this covenant, such ratio shall be tested against year-end audited financial statements and quarterly against internally generated financial statements on a trailing four quarter basis.
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(r)
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Following the date that is 90 days after the date of Full Operation, allow the Current Ratio to be below 1.0. For the purposes of determining compliance of the Borrower with this covenant, such ratio shall be tested against year-end audited financial statements and quarterly against internally generated financial statements.
|
(s)
|
Repay any amounts currently listed on its records as accounts payable to the Initial Shareholders.
|
(t)
|
Repay any subordinated debt, make any investments or pay any dividends whatsoever.
|
(u)
|
Change the nature of its business as conducted on the date hereof.
|
(v)
|
Create any Encumbrances ranking or purportedly ranking ahead of or pari passu with the Security held or required to be provided in favour of the Lender.
|
(w)
|
Refuse any reasonable request for information or financial data regarding the business or operations of the Borrower by the Lender.
|
(x)
|
Sell, convey or dispose of (other than in the ordinary course of business), or encumber any of its assets to anyone other than the Lender.
|
(y)
|
Redeem, cancel or purchase any shares or reduce the capital of the Borrower in any manner whatsoever.
|
(z)
|
Conduct any banking business with a financial institution other than HSBC Bank Canada, 347 – 58 Ave SE, Calgary, Alberta.
|
(aa)
|
Use or operate the Borrower’s property or permit it to be used or operated illegally or contrary to any Applicable Laws, regulations, orders, rules, or directives of any government or agency thereof having jurisdiction or contrary to any requirements under applicable insurance policies.
|
(bb)
|
Fail to perform any covenant required to be performed under this Credit Agreement, or any of the Securities.
|
(cc)
|
Discontinue, alter or cancel its Alberta corporate registration.
|
(dd)
|
Allow the ratio of Indebtedness to EBITDA to rise above 1.30:1. For the purposes of determining compliance of the Borrower with this covenant, such ratio shall be tested against year-end audited financial statements commencing with the year-end that is not less than twelve months after the date of Full Operation.
|
(a)
|
If the Borrower makes default in the payment of any sum due to the Lender pursuant to this Credit Agreement or the Securities.
|
(b)
|
If the Borrower defaults in the performance or observance of any other covenant, condition, stipulation or term whether under this Credit Agreement or any of the Securities or under any other agreement the Borrower may have with the Lender, or any affiliate of the Lender.
|
(c)
|
If the Borrower defaults in the performance or observance of any other covenant, condition, stipulation or term under any other agreement to which the Borrower is a party, including the Purchase Agreement, the Ground Lease, the Leasehold Acknowledgement Agreement, and the Management Services Agreement, and the Borrower has not corrected such breach within 15 days (or such lesser period of time as may be required under any such agreement) of notice having been given to the Borrower.
|
(d)
|
If the REC Project is not at Full Operation, as determined by the Lender acting reasonably, by October 15, 2013, or such later date as the Borrower may elect to extend such date in compliance with the Ground Lease, for reasons not caused by the Lender.
|
(e)
|
If any default in the performance or observance of any covenant, condition, stipulation or term of any of the Securities (including without limitation the voting and lock-up agreement among certain shareholders) has not been corrected within 15 days of notice to the person obligated to perform or observe such covenant, as the case may be.
|
(f)
|
If any warranty, covenant, representation or promise made under this Credit Agreement, the Securities or in any document, certificate, assurance, commitment, report, financial statement or the like provided or furnished to the Lender now or at any time hereafter shall prove to have been false or to have otherwise failed to deal with any material particulars, in either case so as to have made such instrument materially misleading upon the date when made or deemed to have been made.
|
(g)
|
If an order is made or effective resolution passed for the winding up, of the Borrower, or a petition is filed by the liquidator for the winding up of the Borrower or if a receiver is appointed with respect to all or any part of its assets.
|
(h)
|
If the Borrower becomes insolvent or makes a general assignment for the benefit of Creditors or otherwise acknowledges insolvency or if a bankruptcy petition or receiving order is filed or made against the Borrower and is not disputed in good faith.
|
(i)
|
If final judgment is rendered against the Borrower and any such judgment or judgments, as the case may be, shall not have been discharged or there has not been a stay of execution within thirty days of the entry thereof.
|
(j)
|
If the Borrower ceases or threatens to cease to carry on any of its businesses or commences or threatens to commence any act of bankruptcy under the Bankruptcy and Insolvency Act of Canada.
|
(k)
|
If any material adverse change occurs in relation to the Borrower or its business or assets including, without limitation, a material adverse change in financial position, environmental condition, or resulting from re-organization or litigation proceeding, as determined in the sole discretion of the Lender.
|
(l)
|
If the Borrower fails or neglects to pay any other sum outstanding to the Lender, or to any affiliate of the Lender, whether or not the subject of this Credit Agreement.
|
(m)
|
If any of the licenses, permits or approvals granted by any governmental authority or agency essential to the business of the Borrower is withdrawn or cancelled.
|
(n)
|
If the Borrower permits any sum which has been admitted as due by the Borrower but not disputed by it and which forms, or is capable of being made, a charge upon the real property or personal property of the Borrower in priority to or pari passu with any of the Securities and such sum remains unpaid for fifteen days after proceedings have been taken to enforce the same as a prior or pari passu charge.
|
(o)
|
If the Borrower grants or intends to grant any form of security to any person other than the Lender ranking or purporting to rank in priority to or pari passu with any of the Securities or which security affects any of the subject matter forming part of the Securities.
|
(p)
|
If the Borrower sells or attempts to sell or parts with possession of any of its assets that are secured by any of the Securities, or removes or abandons any part of its assets, or if the Lender deems its Security, or any portion thereof, is in danger of being sold or removed contrary to the provisions hereof, or if the Lender otherwise feels insecure in being able to recover any sums then owed to the Lender by the Borrower.
|
(q)
|
If, through no fault of the Lender, the Borrower’s board of directors shall fail to have four nominees of the Lender.
|
(a)
|
prepaid registered mail, on the fourth business day following the date of deposit with Canada Post;
|
(b)
|
fax on the business day following the day of such sending;
|
(c)
|
personal delivery in writing to the designated officer of the addressee, in the case of a corporation on the business day of actual receipt;
|
(a)
|
To the Borrower:
|
(b)
|
To the Lender:
|
CENTURY CASINOS EUROPE GmbH (registered in Alberta under the assumed name, Century Casinos Europe LLC)
|
|
Per: /s/ Andreas Terler
|
|
Per: _____________________________
|
UNITED HORSEMEN OF ALBERTA INC.
|
|
Per: /s/ Darcy Marler
|
|
Per: ______________________________ c/s
|
·
|
Submit application for subdivision and consolidation of the titles to the Lands, whereby that portion of the south half of LSD4, 10-26-29 W4th situated north of the road depicted on Road Plan No. 071 6118 is to be consolidated with the title to Lot 1, Block 1, Plan 101 2410 by November 30, 2012;
|
·
|
Obtain a full set of architectural drawings and engineering drawings for the REC Project sufficient for a development permit application by December 31, 2012;
|
·
|
Submit a development permit application for the REC Project to the applicable governmental authorities by January 31, 2013;
|
·
|
Submit an application, or an amendment to an existing application as the case may be, to AGLC and to HRA for approval of the development of the REC Project by November 30, 2012;
|
·
|
Obtain subdivision and consolidation approval, issuance of consolidated certificates of title, an approved and non-appealable development permit for the REC Project all on terms satisfactory to each of the Borrower and the Lender by August 15, 2013;
|
·
|
Obtain a full set of architectural drawings and engineering drawings for the REC Project sufficient to proceed with construction tendering by August 15, 2013;
|
·
|
Obtain release from applicable governmental authorities of all building permits for the REC Project by August 15, 2013;
|
·
|
Issue a request for tenders for the REC Project by March 30, 2013;
|
·
|
Select successful tender for construction of the REC Project by May 31, 2013;
|
·
|
Enter into construction contract with selected contractor, for construction of the REC Project by June 30, 2013;
|
·
|
Obtain Substantial Completion (as that term is defined in the Ground Lease) of the REC Project by September 15, 2013, or such later date as the Borrower may elect to extend such date in compliance with the Ground Lease; and
|
·
|
Achieve Full Operation of the REC Project by October 15, 2013, or such later date as the Borrower may elect to extend such date in compliance with the Ground Lease.
|
Lynn Chouniard / Bar None Ranches Ltd. | $9,064,270 |
Rocky View County | $107,500 |
Box Modular | $107,493 |
BDO Canada LLP | $17,640 |
NAME
|
NO. OF SHARES
|
CLASS OF SHARES
|
|||
783036 Alberta Ltd.
|
100 |
"A" Common
|
|||
945722 Alberta Ltd.
|
500 |
"A" Common
|
|||
Bar None Ranches Ltd.
|
15,550 |
"A" Common
|
|||
Borders Racing Stable Ltd.
|
100 |
"A" Common
|
|||
Brimacombe, Ronald A.
|
3,100 |
"A" Common
|
|||
Bryan, Gordon
|
100 |
"A" Common
|
|||
C & C Holdings Inc.
|
1,100 |
"A" Common
|
|||
CREG Racing Inc.
|
600 |
"A" Common
|
|||
Code, William E.
|
200 |
"A" Common
|
|||
Corner Group 2024 Investments Inc.
|
100 |
"A" Common
|
|||
D.I.A. Holdings Ltd.
|
1,400 |
"A" Common
|
|||
Fortier, Roger
|
1,000 |
"A" Common
|
|||
G S L Developments Ltd.
|
100 |
"A" Common
|
|||
Gordon Church and Rosemary Church, Jointly
|
500 |
"A" Common
|
|||
Ham, Barbara Lynne
|
200 |
"A" Common
|
|||
Ham, Wayne Wilbur
|
300 |
"A" Common
|
|||
Highfield Stock Farm Inc.
|
550 |
"A" Common
|
|||
Juris Livestock Limited
|
100 |
"A" Common
|
|||
KPM Investments Ltd.
|
2,850 |
"A" Common
|
|||
Rexilius, Sandra
|
100 |
"A" Common
|
|||
Rocky Mountain Turf Club Inc.
|
100 |
"A" Common
|
|||
Saskatoon Valve & Fitting Ltd.
|
200 |
"A" Common
|
|||
Seabiscuit Ventures Inc.
|
3,667 |
"A" Common
|
|||
Texas Hedge Capital Corporation
|
100 |
"A" Common
|
3.1
|
During the Term of this Agreement, the net service fees payable from UHA to CENTURY shall be a series and combination of percentage fees, calculated as follows (collectively the “Net Service Fees”):
|
a)
|
A base fee of sixty percent (60%) of UHA’s NPBT. This base fee may be revised under three possible scenarios:
|
(i) | UHA may terminate this base fee if CENTURY’S interest in the Century Loan has, pursuant to the Century Loan Agreement and with AGLC’s approval, been converted into shares in the capital of UHA and CENTURY has thereby acquired ownership of the majority of the issued shares in the capital of UHA. If those conditions exist and UHA wishes to terminate the base fee pursuant to this section 3.1(a)(i), then UHA must first give CENTURY written notice of such election, whereupon the accrual of the base fee shall then terminate from and after the second calendar month after the month in which such written notice is given to CENTURY, unless, within ten (10) days of CENTURY receiving UHA’s notice, CENTURY gives UHA written notice that CENTURY is disputing that the conditions for the termination of the base fee under this section 3.1(a)(i) have been satisfied. If CENTURY gives such notice to UHA, then unless CENTURY and UHA otherwise agree in writing, the issue of whether the conditions for termination of the base fee have been satisfied, shall be determined by arbitration pursuant to section 9.2 and the base fee shall not terminate until the month following a determination by the arbitrators that such conditions for termination have all been satisfied; |
(ii) | UHA may reduce this base fee percentage from sixty percent (60%) to thirty percent (30%) of UHA’s NPBT, if (A) AGLC has not approved a request or attempt by CENTURY to convert all or part of CENTURY’S interest in the Century Loan into a majority ownership of the issued shares in the capital of UHA, and (B) if UHA has repaid the Century Loan, including interest, in full, in accordance with the terms of the Century Loan Agreement. If those conditions exist and UHA wishes to reduce the base fee percentage pursuant to this section 3.1(a)(ii), then UHA must first give CENTURY written notice of such election, whereupon the reduction in the base fee percentage shall take effect from and after the second calendar month after the month in which such written notice is given to CENTURY, unless, within ten (10) days of CENTURY receiving UHA’s notice, CENTURY gives UHA written notice that CENTURY is disputing that the conditions for the reduction of the base fee under this section 3.1(a)(ii) have been satisfied. If CENTURY gives such notice to UHA, then unless CENTURY and UHA otherwise agree in writing, the issue of whether the conditions for this reduction of the base fee have been satisfied, shall be determined by arbitration pursuant to section 9.2 and the base fee shall not be reduced until the month following a determination by the arbitrators that such conditions for reduction have all been satisfied; and |
(iii)
|
UHA may change this base fee to be based on another arm’s length management fee calculation (a fee that is usual and customary for projects of the size and nature of the REC and that is typically charged by reputable international casino management companies, but without having regard to the fees payable under (b), (c) and (d) below in this section 3.1), if (A) AGLC does approve in writing (without attaching any conditions of such approval that are not acceptable to CENTURY) a request or attempt by CENTURY to convert all or part of CENTURY’S interest in the Century Loan into a majority ownership of the issued shares in the capital of UHA, (B) CENTURY chooses not to convert all or part of CENTURY’S interest in the Century Loan into a majority ownership of the issued shares in the capital of UHA, and (C) UHA has repaid the Century Loan, including interest, in full, in accordance with the terms of the Century Loan Agreement. If those conditions exist and UHA wishes to change the base fee percentage pursuant to this section 3.1(a)(iii), then UHA must first give CENTURY written notice of such election, and UHA and CENTURY shall attempt to agree upon the new base fee, each acting reasonably. If the parties cannot agree upon the new base fee within thirty (30) days of UHA’s notice to CENTURY, then the issued shall be determined by arbitration in accordance with section 9.2. The change in the base fee shall take effect from and after the second calendar month after the month in which written agreement as to the changed base fee is obtained between the parties, or after an arbitrator’s decision is rendered, whichever is later;
|
b)
|
a fee equal to:
|
(i)
|
two percent (2%) of UHA’s NPBT as long as the average Horse Racing Alberta (“HRA”) fee in any calendar month on the REC’s Pari-Mutuel Handle is higher than 2.5% but lower than 4% (net of any grants from HRA to the REC in that month); or
|
(ii)
|
four percent (4%) of UHA’s NPBT as long as the average HRA fee in any calendar month on Pari-Mutuel Handle is higher than 4% (net of any grants from HRA to the REC in that month);
|
c)
|
a fee equal to four percent (4%) of UHA’s NPBT as long as the percentage of slot revenue received by UHA from HRA in any calendar month from HRA is less than 25.75% of the REC’s gross slot revenues for that month;
|
d)
|
a fee equal to:
|
(i)
|
two percent (2%) of UHA’s NPBT as long as the Lease Assist Money received by UHA from HBPA and ASHA purse money is less than two million dollars ($2,000,000.00) for that fiscal year but more than one million dollars ($1,000,000.00) for that fiscal year; or
|
(ii)
|
four percent (4%) of UHA’s NPBT as long as the Lease Assist Money received by UHA from HBPA and ASHA purse money is less than $1 million for that fiscal year.
|
|
(i)
|
assist in the review of specific operational and functional criteria to be prepared by UHA’s architects and designers in preparation of the development and/or potential extension plans and specifications for the REC;
|
|
(ii)
|
review and make recommendations to UHA’s architects and designers re the REC layout;
|
|
(iii)
|
recommend orders for the REC equipment.
|
a)
|
Expenditure of any amount of $100,000 or more, as well as any draw down on the Century Loan;
|
b)
|
Any issuance, sale or similar action in respect of any UHA shares, ownership interest, options, or similar rights to acquire any shares or ownership interest whatsoever.
|
c)
|
The incurring of any debt, loan or other financial obligation over $100,000/year.
|
d)
|
Change of the REC project or any associated budgets.
|
e)
|
Development and Construction Plan, Business Plan, Financial and Marketing Strategy, employment or termination of employment of Key Employees, and any terms thereof.
|
f)
|
Any change to any terms of the Management Services Agreement or any termination thereof.
|
g)
|
Any change to any terms of the Land Lease or any termination thereof.
|
h)
|
Exercise of option to buy the Land as contemplated by the Land Lease, or to extend the term of the Land Lease.
|
i)
|
Selection of major contractors, architects, auditors, consultants and similar parties dealing with UHA in relation to the REC.
|
j)
|
Formation of subsidiaries, purchase of any asset over $100,000/year, sale of any asset over $100,000/year. For these purposes, $100,000 per year means any asset(s) that collectively are purchased or sold for not less than $100,000 in any fiscal year.
|
k)
|
Any other decisions that may have a significant impact on the short-term and/or long-term business results and/or strategy of UHA.
|
(i)
|
file a voluntary petition in bankruptcy or insolvency, or a petition for relief or reorganization under any bankruptcy or insolvency law;
|
(ii)
|
consent to an involuntary petition in bankruptcy or fail to vacate any order approving an involuntary petition within sixty (60) days from the date of entry thereof;
|
(iii)
|
assign for the benefit of its creditors all or any substantial part of its assets, or consent to the appointment of a receiver, liquidator, custodian or trustee in bankruptcy for CENTURY of all or any substantial part of its assets;
|
(iv)
|
materially breach the substantial terms and conditions contained in this Agreement applicable to CENTURY (other than monetary payments) and such material breach shall continue for a period of sixty (60) days after written notice thereof from UHA to CENTURY specifying in detail the nature of such material breach, or, in the case such material breach is of a nature that it cannot, with due diligence and good faith, be cured within sixty (60) days, if CENTURY fails to proceed promptly to cure the same and thereafter to prosecute the curing of such material breach to completion within ninety (90) days thereafter.
|
(i)
|
file a voluntary petition in bankruptcy or insolvency, or a petition for relief or reorganization under any bankruptcy or insolvency law;
|
(ii)
|
consent to an involuntary petition in bankruptcy or fail to vacate any order approving an involuntary petition within sixty (60) days from the date of entry thereof;
|
(iii)
|
assign for the benefit of its creditors all or any substantial part of its assets, all or any substantial part of the REC, or the consent to the appointment of a receiver, liquidator, custodian or trustee in bankruptcy for all or any substantial part of its assets;
|
(iv)
|
fail to make any monetary payment required under this Agreement, including, but not limited to, the Net Service Fees or UHA's Advances, on or before the due date recited herein and said failure continues for ten (10) business days after written notice from CENTURY specifying such failure;
|
(v)
|
fail to materially perform or materially comply with any of the other covenants, agreements, terms or conditions contained in this Agreement applicable to UHA (other than monetary payments) and such failure shall continue for a period of sixty (60) days after written notice thereof from CENTURY to UHA specifying in detail the nature of such failure, or, in the case such failure is of a nature that it cannot, with due diligence and good faith, cure within sixty (60) days, if UHA fails to proceed promptly to cure the same and thereafter to prosecute the curing of such failure to completion within ninety (90) days thereafter; or
|
(vi)
|
default under the Land Lease or any provision of any other agreement to which UHA and CENTURY (or any CENTURY Affiliate) are parties, including without limitation the Century Loan Agreement or any other agreement or instrument collateral thereto.
|
|
If to UHA:
|
|
If to CENTURY:
|
--
|
(a)
|
Revenue minus (i) cost of sales and other direct costs, and (ii) overheads and other indirect costs; plus
|
(b)
|
non-operating and interest income minus (i) non-operating and interest expense, and (ii) other non-recurring costs;
|
--
|
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