MANAGEMENT AGREEMENT
Exhibit
10.169
THIS
MANAGEMENT AGREEMENT
(the
"Agreement"), is made and entered into as of the 18th day of November 2005,
by
and between
BALELE
LEISURE (PROPRIETARY) LIMITED, Registration
No. 1998/002723/07, a private company duly registered and incorporated with
limited liability in accordance with the company laws of the Republic of South
Africa (the “Owner”)
and
CENTURY
CASINOS AFRICA (PROPRIETARY) LIMITED,
Registration No. 1996/010501/07, a private company duly registered and
incorporated with limited liability in accordance with the company laws of
the
Republic of South Africa (the “Manager”)
WHEREAS, Owner
operates a temporary gaming/entertainment facility situated at erf 6350
Newcastle (Extension No. 34), registration division HS in the Newcastle
Transitional Local Council Area, Province of Kwazulu Natal, measuring 28,9284
hectares, held under deed of transfer no. T 1149/99; and
WHEREAS,
Owner
shall use its best efforts to obtain all necessary approvals from the Gaming
Board of the South African Province of Kwazulu Natal and all other relevant
authorities to develop and operate as soon as reasonably possible a permanent
gaming/hotel/entertainment facility to be situated at a site located in Xxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx xx Xxxxxxx Xxxxx [
+
25
hectare; Erf 15450 Newcastle]; and
WHEREAS,
Owner
has
secured/controls the Facility and represents that the Facility is suitable
for
the development and operation of gaming/hotel/entertainment business; and
WHEREAS,
Owner is
seeking experience and expertise in the operation of the gaming/entertainment
business to be conducted at/on the Facility; and
WHEREAS,
Manager
has experience and expertise in the operation and management of gaming
facilities and in the gaming/hotel/entertainment business; and
WHEREAS, Owner
desires to engage Manager to provide the management necessary to manage and
operate the gaming/hotel/entertainment business to be conducted at/on the
Facility; and
WHEREAS, Manager
is willing to provide such services on behalf of and for the account of Owner
on
the terms and conditions set forth herein;
-
1
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NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants herein contained, the
parties hereto agree as follows:
| 1. |
DEFINITIONS
|
As
used
in this Agreement, the following terms shall have the respective meanings
indicated.
| 1.1. |
Act. The
term "Act" shall mean the Gaming/Casino Act of the Province of Kwazulu
Natal as well as South Africa, as the case may be, and the regulations
promulgated pursuant thereto.
|
| 1.2. |
Affiliate. The
term "Affiliate" shall mean a Person that directly or indirectly,
or
through one or more intermediaries, Controls, is Controlled by, or
is
under common Control with the Person in question and any stockholder
or
partner of any Person referred to in the preceding clause owning
(i) more
than fifty percent (50%) or more of such Person if such Person is
a
publicly traded corporation, or (ii) more than fifty percent (50%)
or more
of an ownership or beneficial interest in any other
Person.
|
| 1.3. |
Annual
Operating Budget.
The term "Annual Operating Budget" shall have the meaning set forth
in
Section 5.1.
|
| 1.4. |
Annual
Operating Plan. The
term "Annual Operating Plan" shall have the meaning set forth in
Section
5.1.
|
| 1.5. |
Approval. The
term "Approval" means any license, finding of suitability, qualification,
approval or permit by or from any Gaming
Authority.
|
| 1.6. |
Approved
Legal Counsel.
The term "Approved Legal Counsel" shall have the meaning set forth
in
Section 5.17.
|
| 1.7. |
Bank
Accounts.
The term "Bank Accounts" shall have the meaning set forth in
Section 5.19.
|
| 1.8. |
Books
and Records. The
term "Books and Records" shall have the meaning set forth in
Section 5.10.
|
| 1.9. |
Business
Day.
The term "Business Day" shall have the meaning set forth in
Section 16.14.
|
| 1.10. |
Capital
Replacements.
The term "Capital Replacements" shall have the meaning set forth
in
Section 5.8.
|
| 1.11. |
Casino. The
term "Casino" means the casino improvements and fixtures (temporary
and/or
permanent), including Casino Gaming Activities, to be constructed
at the
Facility, consistent with the concepts set forth in the Development
Plan
and in accordance with the Plans and
Specifications.
|
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2
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| 1.12. |
Casino
Bankroll.
The term "Casino Bankroll" shall mean an amount of monies determined
by
Manager as necessary to provide cash-on-hand monies required to operate
and maintain Casino Gaming Activities, but in no event shall such
amount
be less than the amount required by Law. In no event shall the Casino
Bankroll include amounts necessary to provide for the payment of
Operating
Expenses, Working Capital or initial cash needs as described in Section
7.3 herein. The Casino Bankroll shall include the funds in the separate
accounts in Manager's name plus any funds located on the casino tables,
in
the gambling devices, cages, vault, counting rooms, or in any other
location in the Casino where funds may be
found.
|
| 1.13. |
Casino
Gaming Activities.
The term "Casino Gaming Activities" shall mean the casino cage, table
games (such as blackjack, baccarat, roulette, craps, mini-baccarat,
pai
gow, poker or pai gow poker, or any other table game), gaming machines,
and other casino-type games operated by Manager in the
Casino.
|
| 1.14. |
Century.
The term "Century" shall mean Century Casinos, Inc., a Delaware,
USA
corporation, or any of its subsidiaries or
assignees.
|
| 1.15. |
Condemnation.
The term "Condemnation" shall mean any taking by eminent domain,
condemnation or any other governmental
action.
|
| 1.16. |
Consumer
Price Index.
The term "Consumer Price Index" shall mean the Consumer Price Index
from
time to time published by the relevant South African
authority.
|
| 1.17. |
Control.
The term "Control" (including derivations such as "controlled" and
"controlling") means with respect to a Person, the ownership of more
than
fifty percent (50%) or more of the beneficial interest or voting
power of
such Person.
|
| 1.18. |
Credit
Policy.
The term "Credit Policy" means the policy prepared by Manager and
approved
by Owner regarding the extension and collection of credit to customers
of
the Casino, which Credit Policy shall be based on (i) the target
markets
of the Casino, (ii) the business issues involved, and (iii) such
changes
and refinements as Owner shall reasonably recommend, all of which
shall
comply and conform in all respects with any applicable Governmental
Requirements (including, without limitation, the rules and regulations
of
the Gaming Commission).
|
| 1.19. |
term
"Default" shall have the meaning set forth in Section
6.1.
|
| 1.20. |
Default
Rate.
The term "Default Rate" shall mean the lesser of (i) the reference
or
prime commercial lending rate in South Africa, plus two percent (2%)
per
annum, or (ii) the highest rate permitted by applicable Law, to the
extent
applicable Law establishes a maximum rate of interest which may be
charged
with respect to obligations of the type of questions, until
paid.
|
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3
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| 1.21. |
Department.
The term "Department" shall have the meaning set forth in Section
5.9.
|
| 1.22. |
EBITDA.
The term "EBITDA" shall mean Owner's earnings before interest expense,
income taxes, depreciation and amortization excluding management
fees and
also before any and all costs/expenses beyond the control of Manager
(such
as F,F&E reserve, any leasing, rental or similar costs/expenses) for
the subject monthly, quarterly or annual period, as reported in the
financial statements prepared by the
Manager.
|
| 1.23. |
Effective
Date.
The term "Effective Date" shall mean the execution date of this
Agreement.
|
| 1.24. |
Enforcement
Division.
The term "Enforcement Division" shall mean the relevant authority
to grant
casino gaming licenses.
|
| 1.25. |
Environmental
Damages.
The term "Environmental Damages" shall mean all claims, judgments,
damages, losses, penalties, fines, liabilities (including strict
liability), encumbrances, liens, costs, and expenses of investigation
and
defense of any claim, whether or not such claim is ultimately defeated,
and of any good faith settlement of judgment, of whatever kind or
nature,
contingent or otherwise, matured or unmatured, foreseeable or
unforeseeable, including without limitation reasonable attorneys'
fees and
disbursements and consultants' fees, any of which are incurred at
any time
as a result of the existence of Hazardous Material upon, about, beneath
the Site, or migrating or threatening to migrate to or from the Site,
or
the existence of a violation of Environmental Requirements pertaining
to
the Site, regardless of whether the existence of such Hazardous Material
or the violation of Environmental Requirements arose prior to the
present
ownership or operation of the Site.
|
| 1.26. |
Environmental
Requirements.
The term "Environmental Requirements" shall mean all applicable federal,
state and local laws, rules, regulations, ordinances and requirements
relating to public health and safety, worker health and safety and
pollution and protection of the environment, all as amended or hereafter
amended.
|
| 1.27. |
Event
of Default.
The term "Event of Default" shall have the meaning set forth in Section
6.1.
|
| 1.28. |
Extended
Term.
The term "Extended Term" shall have the meaning set forth in
Section 3.1.
|
| 1.29. |
Facility.
The term "Facility" shall mean the temporary gaming/entertainment
facility
situated at erf 6350 Newcastle (Extension No. 34), registration division
HS in the Newcastle Transitional Local Council Area, Province of
Kwazulu
Natal, measuring 28,9284 hectares, held under deed of transfer no.
T
1149/99; and the permanent gaming/hotel/entertainment facility to
be
situated at a site located in Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx xx
Xxxxxxx
Xxxxx [
+
25
hectare; Erf 15450 Newcastle];
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4
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| 1.30. |
Facility
Employee.
The term "Facility Employee" shall mean any employee of Owner directed
by
Manager to work at the Facility or in any capacity related to the
Facility.
|
| 1.31. |
FF&E.
The term "FF&E" shall mean all furniture, furnishings, equipment, and
fixtures, including gaming equipment, computers, housekeeping and
maintenance equipment, necessary or appropriate to operate the Facility
in
conformity with this Agreement.
|
| 1.32. |
Financial
Statements.
The term "Financial Statements" shall mean an income statement, balance
sheet and a cash flows statement, all prepared in conformity with
Generally Accepted Accounting Principles and on a basis consistent
in all
material respects with that of the preceding period (except as to
those
changes or exceptions disclosed in such Financial
Statements).
|
| 1.33. |
Fiscal
Year.
The term "Fiscal Year" shall mean the period beginning on January
1 and
ending on December 31 of each calendar
year.
|
| 1.34. |
Gaming
Authorities.
The term "Gaming Authorities" or "Authority" shall mean all agencies,
authorities and instrumentalities of any state, nation, or other
governmental entity, or any subdivision thereof, regulating gaming
or
related activities in South Africa, including, without limitation,
the
Gaming Commission and the Enforcement
Division.
|
| 1.35. |
Gaming
Commission.
The term "Gaming Commission" shall mean the Kwazulu Natal Gambling
Board.
|
| 1.36. |
Gaming
License.
The term "Gaming License" shall have the meaning set forth in
Section 3.1.
|
| 1.37. |
Gaming/hotel/entertainment
operations.
The term "Gaming/hotel/entertainment operations" shall mean all activities
pertaining to the development and construction of the Casino and
the
Casino thereon, all Casino Gaming Activities conducted in the Casino
and
all activities conducted at the Facility related to any of the
foregoing.
|
| 1.38. |
General
Laws.
The term "General Laws" shall mean any statute, ordinance, promulgation,
law, treaty, rule, regulation, code, judicial or administrative precedent
or order of any court or other body of South Africa and any state
law or
subdivision thereof, any foreign countries or subdivisions thereof,
and
shall include all Laws.
|
| 1.39. |
Generally
Accepted Accounting Principles.
The term "Generally Accepted Accounting Principles" shall mean generally
accepted accounting principles in all material respects as established
from time to time by the American Institute of Certified Public
Accountants; provided, however, that to the extent there are changes
in,
or there are implemented by mandates now-existing elective treatments
under, Generally Accepted Accounting Principles from and after the
date
hereof, such changes or implementations shall not be taken into
consideration for purposes of defining the term
EBITDA.
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5
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| 1.40. |
Governmental
Authority.
The term "Governmental Authorities" or "Authority" means South Africa,
Province of Kwazulu Natal and any other political subdivision in
which the
Facility is located, and any court or political subdivision, agency,
commission, board or instrumentality or officer thereof, whether
federal,
state, local, having or exercising a jurisdiction over Owner, Manager
or
the Facility, including, without limitation, any Gaming
Authority.
|
| 1.41. |
Governmental
Requirements.
The term "Governmental Requirements" means all Laws and agreements
with
any Governmental Authority that are applicable to the acquisition,
development, construction and operation of the Facility and including,
without limitation, the Purchase, all Required Contracts, Approvals
and
any rules, guidelines or restrictions created by or imposed by
Governmental Authorities (including, without limitation, any Gaming
Authority).
|
| 1.42. |
Gross
Casino Revenue.
The terms “Gross Gaming Revenue” and "Gross Casino Revenue" shall mean all
gross revenues generated by or in the Casino, including gaming receipts
less all sums paid out as winnings in connection
therewith.
|
| 1.43. |
Hazardous
Materials.
The term "Hazardous Materials" shall mean without limitation: (i)
hazardous materials, hazardous substances, extremely hazardous substances
or hazardous wastes, (ii) petroleum, including, without limitation,
crude
oil or any fraction thereof which is liquid at standard conditions
of
temperature and pressure (60 degrees Fahrenheit and 14.7 pounds per
square
inch absolute); (iii) any radioactive material, including, without
limitation, any source, special nuclear, or by-product material,
and (iv)
asbestos in any form or condition.
|
| 1.44. |
Initial
Term.
The term "Initial Term" shall have the meaning set forth in Section
3.1.
|
| 1.45. |
Law.
The term "Law" means any statute, ordinance, promulgation, law, treaty,
rule, regulation, code, judicial or administrative precedent or order
of
any court or any other Governmental Authority, as well as the orders
or
requirements of any local board of fire underwriters or any other
body
which may exercise similar
functions.
|
| 1.46. |
Major
Casualty.
The term "Major Casualty" shall mean any casualty or accident which
prevents or substantially impairs the conduct of the Facility's business
and the ability to earn or generate revenues and income or its ability
to
make payments under the Purchase.
|
| 1.47. |
Major
Condemnation.
The term "Major Condemnation" shall mean any Condemnation which prevents
or substantially impairs the conduct of the Facility and the ability
to
earn or generate revenues and income and/or its ability to make payments
under the Purchase.
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6
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| 1.48. |
Management
Fee.
The term "Management Fee" shall have the meaning set forth in Section
4.1.
|
| 1.49. |
Manager
Denial.
The term "Manager Denial" shall have the meaning set forth in Section
8.3.
|
| 1.50. |
Manager
Indemnitees.
The term "Manager Indemnitees" shall have the meaning set forth in
Section
14.2.
|
| 1.51. |
Manager
Operating Permits.
The term "Manager Operating Permits" shall mean all licenses, permits,
approvals, consents and authorizations which Manager is required
to obtain
from any Governmental Authority to perform and carry out its obligations
under this Agreement.
|
| 1.52. |
Manager's
Advances.
The term "Manager's Advances" shall have the meaning set forth in
Section
7.7.
|
| 1.53. |
Manager's
Default.
The term "Manager's Default" shall mean those occurrences described
in
Section 6.2.
|
| 1.54. |
Minor
Casualty.
The term "Minor Casualty" shall mean any casualty or accident other
than a
Major Casualty.
|
| 1.55. |
Minor
Condemnation.
The term "Minor Condemnation" shall mean any Condemnation other than
a
Major Condemnation.
|
| 1.56. |
Net
Gaming Proceeds.
The term “Net Gaming Proceeds” shall have the exact same meaning as “Gross
Gaming Revenue”.
|
| 1.57. |
Operating
Expenses.
The term "Operating Expenses" shall mean those reasonable operating
expenses, including payroll, marketing and administration incurred
on
behalf of Owner after the Opening Date in connection with conducting
and
operating the Facility, computed on an accrual basis, deductible
under
Generally Accepted Accounting Principles in determining "Operating
Income"
(as defined in casino industry practice) for purpose of preparing
a
statement of operations for the Facility. VAT and other taxes shall
not be
included in Operating Expenses. Further, Operating Expenses shall
not
include depreciation or amortization with respect to the Facility
or the
F, F&E, Debt Service or Capital Replacements deposits.
|
| 1.58. |
Operating
Guidelines.
The term "Operating Guidelines" means the general guidelines for
the
operation of the Facility which shall be prepared by Manager and
shall be
included in and constitute a part of each Annual Operating Plan.
Operating
Guidelines shall include the Credit Policy, Manager's policies regarding
(i) restricting access to the Casino to those under the legal age
for
gaming in South Africa, (ii) assisting compulsive gamblers, and (iii)
employee travel, employee expense reimbursement and employee gambling
at
the Casino.
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| 1.59. |
Operating
Permits.
The term "Operating Permits" shall mean Manager Operating Permits
and
Owner Operating Permits.
|
| 1.60. |
Operating
Supplies.
The term "Operating Supplies" shall mean gaming supplies, paper supplies,
cleaning materials, food and beverage, fuel, marketing materials,
maintenance supplies, linen, china, glassware, silverware, kitchen
utensils, uniforms and all other consumable supplies and materials
used in
the operation of the Facility.
|
| 1.61. |
Owner
Denial.
The term "Owner Denial" shall have the meaning set forth in
Section 8.1.
|
| 1.62. |
Owner
Indemnitees.
The term "Owner Indemnitees" shall have the meaning set forth in
Section
14.1.
|
| 1.63. |
Owner
Operating Permits.
The term "Owner Operating Permits" shall mean all licenses, permits,
approvals, consents and authorizations from Governmental Authorities
that
are necessary to own, develop, open, operate and occupy the Facility
other
than Manager Operating Permits and the Construction
Permits.
|
| 1.64. |
Owner's
Advances.
The term "Owner's Advances" shall mean the amounts to be advanced
by Owner
to Manager pursuant to Section 7.1.
|
| 1.65. |
Owner's
Default.
The term "Owner's Default" shall have the meaning set forth in Section
6.3.
|
| 1.66. |
Person.
The term "Person" shall mean any individual, partnership, corporation,
association or other entity, including, but not limited to, any government
or agency or subdivision thereof, and the heirs, executors,
administrators, legal representatives, successors and assigns of
such
Person where the context so admits.
|
| 1.67. |
Pre-Opening
Budget.
The term "Pre-Opening Budget" shall mean the budget of expenses to
be
incurred prior to the Opening Date pursuant to Section 6.1 of the
Agreement and with respect to any other provision of the Agreement
pertaining to the period prior to the Opening Date. Such expenses
shall
include, without limitation, all budgeted expenses incurred by Manager
or
by any of Manager's Affiliates in performing the Pre-Opening Services,
the
cost of recruitment and training for all employees of the Facility,
costs
of licensing or other qualification of Facility employees prior to
the
Opening Date, the cost of pre-opening sales, marketing, advertising,
promotion and publicity, the cost of obtaining all Construction Permits
and Owner Operating Permits, permits for employees, including the
fees of
lawyers and other consultants incident thereto, and other Pre-Opening
Expenses.
|
| 1.68. |
Property
Insurance.
The term "Property Insurance" shall have the meaning set forth in
Section
12.2.
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| 1.69. |
Purchase.
The term "Purchase" shall mean the Purchase or lease agreement for
the
Site.
|
| 1.70. |
Required
Coverage.
The term "Required Coverage" shall have the meaning set forth in
Section
12.1.
|
| 1.71. |
Senior
Staff.
The term "Senior Staff" shall have the meaning set forth in Section
5.4.
|
| 1.72. |
Site.
The term "Site" shall have the meaning set forth in the "WHEREAS"
clause
of this Agreement.
|
| 1.73. |
Term.
The term "Term" shall mean the Initial Term and any Extended Term
for
which the option to extend as provided in the Agreement has been
properly
exercised.
|
| 1.74. |
Unavoidable
Delay.
The term "Unavoidable Delay" shall have the meaning set forth in
Article
11.
|
| 1.75. |
Working
Capital.
The term "Working Capital" shall mean such amount in the Bank Accounts
as
will be sufficient to reasonably assure the timely payment of all
current
liabilities of the Facility and the uninterrupted and efficient operation
of the Facility during the Term of this Agreement to permit Manager
to
perform its responsibilities and obligations hereunder, all as
contemplated by the applicable Annual Operating Plan with reasonable
reserves for unanticipated contingencies and for short term business
fluctuations resulting from monthly variations between the Annual
Operating Plan and actual operating
expenses.
|
| 2. |
APPOINTMENT
OF MANAGER
|
| 2.1. |
Appointment. Owner
hereby appoints, hires and employs Manager, as Owner's exclusive
agent, to
manage the gaming/hotel/entertainment operations on behalf of and
for the
account of Owner during the term of this Agreement. Manager hereby
accepts
such appointment upon and subject to the terms, conditions, covenants
and
provisions set forth herein.
|
| 2.2. |
No
Interference.
Owner hereby agrees that, subject to the limitations described herein,
Manager shall have uninterrupted control and supervision of the management
of the gaming/hotel/entertainment operations during the Term of this
Agreement, and that Manager may manage the gaming/hotel/entertainment
operations free of molestation, eviction or disturbance by Owner
or any
third party claiming by, through or under
Owner.
|
| 2.3. |
Employment
of Affiliates.
Manager may, acting in its sole discretion in the best interests
of Owner,
employ or retain as consultants or agents any of Manager's Affiliates,
or
any other entity or Person related to Manager, in fulfilling its
obligations pursuant to this Agreement; provided, however, that Manager
shall disclose all transactions with any entity related to Manager,
as
required by Generally Accepted Accounting Principles on the quarterly
financial statements required under Section 5.11. All such service
agreements shall be on economic terms comparable with agreements
negotiated on an arms-length basis and subject to Owner’s
approval.
|
| 2.4. |
Notwithstanding
anything to the contrary contained in this agreement, the Manager
shall
not administer or procure the administration of any affairs of Owner
which
are specifically designated to be the sole prerogative of the board
of
directors of Owner.
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| 3. |
TERM
OF AGREEMENT
|
| 3.1. |
Term.
The Agreement shall commence on the Closing Date of the Sale of Shares
Agreement, entered into as of the 18th day of October 2005, by and
between Chicory Investments (Pty) Limited, Dynamo Investments Limited,
Harvest Moon Investment Holdings (Pty) Limited, Izulu Gaming (Pty)
Limited, Khulani Holdings Limited, Libalele Leisure (Pty) Limited,
Malesela Gaming (Pty) Limited, Oakland Leisure-Newcastle (Pty) Limited,
Purple Rain (Pty) Limited, Ruvuma Investment (Pty) Limited, Saphila
Health
Investments (Pty) Limited, Sky Props (Pty) Limited, Viva Leisure
Investment Holdings (Pty) Limited, The Viva Trust and Century Casinos
Africa (Pty) Limited, and remains in force while the Manager owns
shares
in the Company and is only subject to notice of termination by the
manager, at the manager’s sole discretion, on not less than 6 (six) months
written notice.
|
| 3.2. |
Effect
of Termination.
All sums owed by either party to the other shall be paid immediately
upon
termination of this Agreement. In the event of any termination of
this
Agreement, Owner shall, notwithstanding such termination, be liable
to
Manager for the fees earned and reasonable out-of-pocket expenses
incurred
by Manager in conformity with this Agreement prior to such termination
as
follows: (i) any unpaid accrued portion of the Management Fee and
Manager's Advances (including any unpaid accrued interest thereon),
if
any, plus (ii) all reimbursable costs to Manager which were properly
incurred prior to termination in connection with the performance
of
Manager's obligations in conformity with this Agreement. If the
termination of this Agreement is a consequence of Owner's Default,
Owner
shall also be liable to Manager for all reasonable costs (including,
but
not limited to, severance pay or settlements and moving expenses
of
Manager's employees, if any, and any attorney's fees, expenses, and
losses
as the result of such severance) incurred as a direct result of Owner's
Default. If the termination of this Agreement is a consequence of
Manager's Default, Manager shall not have the right to collect any
amounts
due Manager under this Section 3.2 from the Bank Accounts. In such
event,
Owner shall pay Manager within five (5) Business Days of the date
of
termination the amounts owed Manager described in clauses (i) and
(ii)
above through the date of termination.
|
| 3.3. |
Survival
of Representations and Indemnifications.
Notwithstanding anything contained herein to the contrary, the parties
acknowledge that the representations, covenants and indemnifications
set
forth in Articles 9, 12, 14 and Sections 16.2, 16.6, 16.8 and 16.9
shall
survive the termination or expiration of this Agreement. All amounts
due
and payable from either party to the other shall survive the termination
of this Agreement.
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| 4. |
FEE; EXPENSES
|
| 4.1. |
Management
Fee.
During the Term of this Agreement, Manager shall be paid the Management
Fee set forth herein. Failure to pay the Management Fee in accordance
with
the time periods set forth in this Agreement shall constitute a breach
of
this Agreement.
|
| 4.2. |
Calculation
of Management Fee.
The Management Fee shall be equal
to:
|
| 4.2.1. |
3,75%
(Three comma seven five percent) of the total gross revenues (excluding
VAT and any other taxes) generated by the company or generated on
the
Facility, for the applicable Fiscal Year, plus
|
| 4.2.2. |
7,5%
(Seven comma five percent) of the company’s EBITDA for the applicable
Fiscal Year.
|
| 4.3. |
Time
of Payment of Management Fee.
All out-of-pocket costs and expenses incurred by Manager shall be
invoiced
to Owner and Owner shall pay these amounts to Manager within ten
days. The
fee described in 4.2. above shall be paid from Owner to Manager on
the
fifth (5th)
day of each month, for the preceding month. The aggregate of the
Management Fees so paid monthly shall be adjusted within 120 (one
hundred
and twenty) days of the end of each Fiscal Year. A partial Fiscal
Year at
the beginning and end of this Agreement shall be treated as a Fiscal
Year
for purposes of this Section 4.3. Owner hereby authorizes Manager
to pay
itself the monthly Management Fee due from the Bank Accounts. Owner
shall
pay all applicable taxes or fees on the Management Fee. For the last
month
of the term of this Agreement, Owner shall pay Manager the Management
Fee
directly. The fee in 4.2.2. shall not take into account any losses
carried
forward from any prior financial year and shall not take paid or
payable
management fees into account.
|
| 4.4. |
Place
of Payment of Management Fee.
It shall be Owner's obligation to ensure that the Management Fees
are paid
to Manager at such account as may be determined by Manager from time
to
time.
|
| 4.5. |
Expenses.
In addition to the Management Fee, within ten (10) Business Days
after
presentation of expense vouchers or billing invoices, as the case
may be,
Owner shall reimburse Manager on a monthly basis for (i) all documented
expenses properly incurred under this Agreement by Manager, its officers
and employees and/or agents in rendering the services provided for
in this
Agreement, and (ii) all amounts billed to Manager by Persons for
such
Persons' reasonable fees, charges, costs and expense properly incurred
under this Agreement in connection with Manager's performance of
its
duties hereunder. Notwithstanding the foregoing, all Operating Expenses
shall be paid directly from the Bank Accounts pursuant to Section
7.19
herein. Any amounts not reimbursed within ten (10) business days
shall
bear interest at the Default Rate. No expenses payable to Manager’s
Affiliates shall be paid out without Owner prior
consent.
|
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11
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| 5. |
FACILITY
OPERATIONS
|
| 5.1. |
Annual
Operating Plan and Budget.
|
| 5.1.1. |
On
or before the forty-fifth (45th) day preceding the first day of each
Fiscal Year subsequent to the Opening Date, Manager shall submit
to Owner
for its approval an annual operating plan for the operation of the
Casino
for the forthcoming Fiscal Year (each such annual operating plan
that is
approved by Owner is referred to herein as an "Annual Operating Plan"),
which shall include an annual marketing plan, annual operating budget
by
month (the "Annual Operating Budget"), annual estimate of key operating
statistics, annual projection of sources of cash by month, and a
two (2)
year projection of capital expenditures. The Annual Operating Plan
shall
include sufficient amounts for maintenance and repairs to keep the
Facility in good operating condition. Manager will consult with Owner
and
the Facility Manager in preparing the Annual Operating Plan, provided
that
Owner and Facility Manager make their representatives readily available
for such consultations.
|
| 5.1.2. |
Within
thirty (30) days after the date Manager submits the proposed Annual
Operating Plan, Owner shall inform Manager in writing whether it
disapproves of the proposed Annual Operating Plan and, if so, the
specific
portions thereof of which it disapproves. Any notice that disapproves
a
proposed Annual Operating Plan must contain reasonably detailed objections
along with suggestions as to what corrective measures can be taken
to make
such proposed Annual Operating Plan acceptable to Owner. If Owner
fails to
provide written notice to Manager of its objections within thirty
(30)
days after the submission of the proposed Annual Operating Plan,
such
proposed Annual Operating Plan shall be deemed to be approved as
submitted.
|
| 5.1.3. |
If
Owner reasonably disapproves or objects to the proposed Annual Operating
Plan or any portion thereof, Manager shall endeavor to make such
modifications to the Annual Operating Plan as are necessary to resolve
the
objections raised in Owner's notice, and within thirty (30) days
of the
Owner's notice, to resubmit such Annual Operating Plan for review
by Owner
under the terms of Section 5.1 and, if necessary, to make further
revisions under this Section 5.1.
|
| 5.1.4. |
If
Owner's objection relates only to certain portions of the proposed
Annual
Operating Plan or an Annual Operating Budget contained therein, the
undisputed portions of the proposed Annual Operating Plan or Annual
Operating Budget shall be deemed to be adopted and approved. With
respect
to objectionable items in any proposed Annual Operating Budget, prior
to
the adoption of a new Annual Operating Budget, the corresponding
item
contained in the Annual Operating Budget for the preceding Fiscal
Year
shall be substituted in lieu of the disputed portions of the proposed
Annual Operating Budget, excluding, however, line items in the previous
Annual Operating Budget for extraordinary expenses or revenues. In
any
instance where a portion of an Annual Operating Budget from a preceding
Fiscal Year is deemed to be applicable to the Annual Operating Budget
in
effect until a new Annual Operating Budget is fully approved,
corresponding items contained in the Annual Operating Budget for
the
preceding Fiscal Year shall be automatically adjusted by a percentage
equal to the percentage change in the Consumer Price Index during
the
preceding Fiscal Year. Such calculation of percentage change in the
Consumer Price Index shall be made by Manager based upon the most
recently
published Consumer Price Index data at the time the calculation is
made.
|
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12
-
| 5.1.5. |
If
Owner and Manager are unable to agree on the amount of any capital
expenditure or reserve item in an Annual Operating Budget, only those
capital expenditures (or the undisputed amount when the amount is
in
dispute) with respect to which Owner and Manager have reached an
agreement
that are approved by Owner or are required to be made by any Governmental
Authority shall be made until Owner and Manager otherwise agree on
the
terms of such Annual Operating Budget or the matter is decided by
arbitration. The Annual Operating Plan will be appropriately adjusted
to
reflect the effect of any delay in capital
expenditures.
|
| 5.1.6. |
Each
proposed Annual Operating Plan shall be prepared by Manager based
on the
actual and projected results of the current Fiscal Year, the standard
of
maintaining the Facility in good operating condition, information
with
respect to possible occurrences which may impact the marketing and/or
operation of the Facility in the future, changes from the previous
Fiscal
Year results, reasonable predictions for the future and such other
information and assumptions that shall be reasonable under the
circumstances.
|
| 5.1.7. |
Except
as otherwise provided in Sections 5.22 or 5.23, Manager shall not,
without
Owner's prior written consent, incur any expenses or make any
disbursements that are either not provided for in an Annual Operating
Budget or are in excess of one hundred and fifty percent (150%) of
the
amount approved for a particular item in such Annual Operating Budget
unless otherwise permitted by Sections 5.22 or 5.23. Any request
by
Manager to make any expenditure or incur any obligation in excess
of one
hundred fifty percent (150%) of an amount set forth in the Annual
Operating Budget contained in the applicable Annual Operating Plan
or
which falls into any category of expenditures which is required by
any Law
to have the prior approval of Owner, shall be submitted to Owner
in
writing with an explanation of such expenditure. Owner shall respond
to
any request within fifteen (15) days after the receipt thereof. If
Owner
fails to respond within such fifteen (15) day period, the proposed
expenditure shall be deemed
approved.
|
| 5.2. |
Contracts
and Expenses.
Manager may make, enter into and perform, in the name of, for the
account
of, on behalf of, and at the expense of Owner, any contracts and
agreements provided for under this Agreement and each Annual Operating
Plan and Annual Operating Budget, so long as Manager has complied
with all
the requirements of this Agreement with respect to such contracts
and
agreements. All costs and expenses incurred by Manager or an Affiliate
of
Manager in accordance with this Agreement, the Annual Operating Plan
and
the Annual Operating Budget shall be for and on behalf of Owner and
for
Owner's account. All debts and liabilities incurred by Manager under
this
Agreement to third parties on behalf of either Owner or the Facility
are
and shall remain the sole obligations of Owner. Manager shall use
commercially reasonable efforts to promote and enforce the goals
of the
Advancement Plan by Owner's contractors, to the extent required by
the
Advancement Plan.
|
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13
-
| 5.3. |
Recruitment.
Manager shall establish and implement procedures, techniques, and
programs
consistent with all applicable rules and regulations, the Annual
Operating Plan, the Annual Operating Budget and the Advancement Plan
to
recruit, screen, evaluate, hire, orient and train qualified applicants
to
become Facility Employees. Manager shall have the sole authority
to
recruit, hire, provide orientation to, train, supervise, promote,
determine the compensation of, and discharge all Facility
Employees.
|
| 5.4. |
Manager's
Personnel Decisions.
Manager shall have the authority to recruit, hire, provide orientation
to,
train, supervise, promote, determine the compensation of, and discharge
all personnel, including all management personnel (“Senior Staff”) at the
Facility on behalf of Owner. Except as otherwise decided by Manager,
all
of the Senior Staff shall be employees of Owner. Regardless of whether
they are employed by Owner or Manager, expenses and costs pertaining
to
the employment of the Senior Staff, including without limitation,
affiliate incentive and stock plans, severance pay and the costs
of
retirement benefits pertaining to such persons, shall be Operating
Expenses of the Facility and reimbursed to Manager on a current
basis.
|
| 5.5. |
Union
Contracts.
Manager shall assist Owner to negotiate with any labor union lawfully
entitled to represent the Facility Employees. All decisions regarding
union contracts applicable to the Facility shall be made by
Manager.
|
| 5.6. |
Payroll
Checks.
Payroll checks for all Facility Employees shall be in a form, contain
such
identifications and be signed by persons specified by Owner (provided
such
checks shall not identify Manager without Manager's
consent).
|
| 5.7. |
Financial
Management.
Manager shall be responsible for the administration of the day-to-day
financial affairs of the Facility.
|
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14
-
| 5.8. |
Capital
Replacements.
|
| 5.8.1. |
Manager
shall have the responsibility and sole authority to plan, contract
for,
account for and supervise all capital replacements and improvements
to the
Casino and the Facility or any portion thereof (collectively "Capital
Replacements") that are contemplated in any Annual Operating Plan.
Manager
shall have the right to approve plans and specifications and select
architects, engineers, general contractors, subcontractors, suppliers,
and
material men with respect to Capital Replacements, taking into
consideration the criteria set forth in the Development Plan and
all
Annual Operating Plans. Any changes in the Casino structure itself
or the
structure of any of the buildings located at the Facility shall comply
with any requirements in the Purchase, or any Governmental Requirements.
Manager shall adhere to the Owner's empowerment policies when contracting
for such services.
|
| 5.8.2. |
Manager
shall have the right to supervise the general contractor or other
person
responsible for the Capital Replacements work. To the extent the
proposed
Capital Replacements will have a material adverse effect on the operation
of the Facility during the performance of the work, the plans and
specifications applicable thereto shall comply with the terms of
the
Purchase and any applicable Governmental
Requirements.
|
| 5.9. |
Revisions
to Annual Operating Plan and Reallocations of Funds.
If, after approval of an Annual Operating Plan for a particular Fiscal
Year, in Manager's reasonable business judgment, revisions to the
Annual
Operating Plan are appropriate, Manager shall revise the Annual Operating
Plan and submit such revised Annual Operating Plan to Owner for approval
in accordance with the procedures set forth in Section 5.1. Owner
shall
have the right to suggest revisions to the Annual Operating Plan
subject
to Manager's approval with disagreements being resolved as set forth
in
Section 5.1. Manager, without Owner's consent, may reallocate all
or any
portion of any line item in an Annual Operating Budget to another
item in
the same Department in an amount not to exceed fivehundred thousand
Rands
(R500,000) in the aggregate in any Fiscal Year but may not reallocate
from
one Department to another without Owner's approval. The term "Department"
means those general divisional categories in the Annual Operating
Budgets
and shall not mean or refer to subcategories appearing in a divisional
category. Manager shall not make any payments or disbursements in
excess
of one hundred fifty percent (150%) of the Department or total operating
expense amounts in an Annual Operating Plan, except as
follows:
|
| 5.9.1. |
Pursuant
to Sections 5.22 or 5.23;
|
| 5.9.1.1. |
If
expenditures for Operating Expenses bear the same relationship (ratio)
to
the amount budgeted for such items as actual gross revenue for such
month
bears to the projected gross revenue for such month (provided that
any
increase in Operating Expenses is, in Manager's reasonable business
judgment, a necessary consequence of the increase in gross
revenue);
|
| 5.9.1.2. |
Any
expenditures for which written approval in advance has been obtained
from
Owner;
|
-
15
-
| 5.9.1.3. |
For
taxes, insurance and utilities to reflect actual costs thereof, subject
to
Owner's right to contest the validity of such items;
and
|
| 5.9.1.4. |
For
payment of any final judgment in litigation involving the
Facility.
|
| 5.10. |
Accounting
Records.
During the Term of this Agreement, Manager shall maintain full and
adequate books of account and records ("Books and Records") reflecting
the
results of the operation of the Casino on an accrual basis, all in
accordance with Generally Accepted Accounting Principles consistently
applied in all material respects. The Books and Records shall be
kept
separate and distinct from all other operations and businesses of
Manager
or Affiliates of Manager. Manager shall keep all Books and Records,
including, without limitation, current vendor invoices, payroll records,
general ledgers, credit transactions and other records relating to
the
Casino at the Facility or at such other location as shall be approved
by
Owner in writing, subject to such record retention and storage policies
and access rights required by any Gaming Authority and any other
applicable Governmental Requirements. All such Books and Records
shall at
all times be the property of Owner and shall not be removed from
the
Facility or other approved location by Manager without Owner's written
approval except as required by General Laws. Upon any termination
of this
Agreement, all Books and Records shall immediately by turned over
to Owner
so as to ensure the orderly continuance of the operation of the Facility,
but (i) Manager may make and retain copies of all or any portion
of the
Books and Records needed for its own record keeping and (ii) such
Books
and Records shall be available to Manager for a period of five years
after
termination of this Agreement at all reasonable times for inspection,
audit, examination and transcription of particulars relating to the
period
in which Manager managed the
Facility.
|
| 5.11. |
Financial
Statements; Meetings.
Manager shall provide Owner with reasonably accurate unaudited Financial
Statements of the Casino sixty (60) days after the end of each calendar
quarter. The annual Financial Statements shall be audited by Owner's
auditors at Owner's expense and provided to Owner within ninety (90)
days
after the end of the Fiscal Year. In addition, Manager shall provide
Owner
with daily results (including cash drop) for all games and with a
copy of
Manager’s monthly casino report.
|
| 5.12. |
Access,
Review and Audit.
Owner (or its duly appointed agents) and any Gaming Authority (as
permitted by Law) shall have the right at reasonable times and during
normal business hours, after reasonable written notice to Manager,
to
examine, audit, inspect and transcribe the Book and Records. With
respect
to such reviews, Owner and its respective agents shall be subject
to the
confidentiality covenants in Section
16.8.
|
| 5.13. |
Limitation
of Responsibility for Annual Operating Budgets.
All Annual Operating Budgets are intended only to be reasonable estimates
based on Manager's best business judgment and Manager shall not be
liable
or responsible in any event if any of the budgeted figures are not
attained or there is any variance between the actual revenues and
expenditures and the amounts set forth in any Annual Operating Budgets.
Owner acknowledges that Manager has not made any guarantees, warranty
or
representation of any nature concerning or related to the amounts
of Gross
Gaming Revenue to be generated and Operating Expenses to be incurred
from
the operation of the Facility during the Term of this
Agreement.
|
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16
-
| 5.14. |
Management.
Subject at all times to the Operating Guidelines and those rights
of Owner
specifically provided in this Agreement, Manager shall have the discretion
and authority to determine operating policies and procedures, standards
of
operation, staffing levels and organization, win payment arrangements,
standards of service and maintenance, food and beverage quality and
service, pricing, and other policies affecting the Facility, or the
operation thereof, to implement all such policies and procedures,
and to
perform any act on behalf of Owner which Manager deems necessary
or
desirable in its good faith business judgment for the operation and
maintenance of the Facility on behalf, for the account and at the
expense
of Owner, including but not limited to the following, as
applicable:
|
| 5.14.1. |
Manager
shall negotiate and consummate such agreements necessary for the
furnishing of utilities, services, security, and supplies for the
maintenance of utilities, services, security, and supplies for the
maintenance and operation of the
Facility.
|
| 5.14.1.1. |
If
consistent with the Development Plan, Manager may negotiate and grant
concessions and purchases for space in the
Facility.
|
| 5.14.1.2. |
Manager
shall have sole authority to make all repairs, replacements, and
improvements which are necessary or
appropriate.
|
| 5.14.2. |
Manager
shall report directly to the Board of Directors of Owner as well
as to the
Board of Directors of Century Casinos, Inc. on all
matters.
|
| 5.15. |
Licenses,
Permits, Reports and Accreditation.
|
| 5.15.1. |
Manager
shall use its best efforts to apply for, process, obtain and maintain
all
Manager Operating Permits and, to the extent requested by Owner,
Owner
Operating Permits, in a manner and within the time periods that will
permit the Facility to be operated on a continuous and uninterrupted
basis
after the Opening Date. If reasonably requested by Owner, Manager
shall
(i) apprise Owner of the need to renew, reapply or requalify for
any Owner
Operating Permits and filing any reports relating thereto or required
by
any Governmental Authority, and (ii) assist Owner in processing all
such
matters in a timely fashion. All reasonable out-of-pocket costs and
expenses reasonably necessary to obtain and maintain Manager Operating
Permits shall be reimbursable by Owner and shall constitute Operating
Expenses. Owner shall provide all required information for all of
the
above promptly upon request and such information shall be
accurate.
|
-
17
-
| 5.15.2. |
If
Owner fails to apply (or fails to request that Manager apply on behalf
of
Owner) for a necessary Owner Operating Permit, and Manager makes
a
good-faith determination that such failure jeopardizes the ability
to
operate the Facility on a continuous and uninterrupted basis after
the
Opening Date, then Manager may take all necessary or desirable steps
to
obtain the Owner Operating Permit on behalf of Owner and Owner hereby
grants Manager an irrevocable power of attorney, which Owner acknowledges
is coupled with an interest, to implement the foregoing. Manager
shall be
reimbursed by Owner for all expenses incurred in obtaining such Owner
Operating Permit.
|
| 5.16. |
Government
Regulations.
Upon five (5) Business Days' written notice to Owner, Manager shall
be
permitted to contest the validity and/or application of any Law or
Governmental Requirement pertaining to Gaming/hotel/entertainment
operations before any court or appropriate administrative body unless
Owner shall object to such action in writing during said notice
period.
|
| 5.17. |
Legal
Actions.
All matters of a legal nature involving the Facility shall be handled
by
legal counsel selected by Manager and approved by Owner (such legal
counsel is hereinafter referred to as "Approved Legal Counsel").
Manager
shall notify Owner in writing of the commencement of any legal action
or
proceeding concerning the Facility as soon as practicable after Manager
receives actual notice of the commencement of such legal action which
could reasonably be anticipated to involve liability or damage to
Owner
for which Manager reasonably anticipates liability. Notwithstanding
the
foregoing, Manager shall notify Owner immediately of any action filed
against the business, the Facility, Owner, Manager or the Casino
which
could result in seizure of the Casino. Except with respect to those
legal
matters in which Owner advises Manager that it desires to be directly
involved, Manager shall be responsible for retaining on behalf of
Owner
the Approved Legal Counsel to take any reasonable or necessary legal
actions to protect the assets of the Facility and to insure compliance
with the contractual obligations of others and all Governmental
Requirements. In any legal action or proceeding for damages in which
Owner
is to be the plaintiff or complainant, then Manager may not commence
such
legal action or proceeding without first notifying Owner in writing.
Owner
shall, by written notice to Manager, within five (5) days of the
date of
such notice, consent to the commencement of such legal action or
proceeding or provide Manager with a good faith material basis for
not
commencing such legal action or
proceeding.
|
| 5.18. |
Accounting
Services.
Manager shall establish and maintain accounting systems, internal
controls, and reporting systems in accordance with the Operating
Guidelines that are (i) consistent in all material respects with
customary
policies and procedures used by Managers' Affiliates engaged in such
business and (ii) which comply with all Governmental Requirements
and
requirements of Gaming Authorities and has obtained all Gaming Authority
approvals which Owner or Manager are required to
obtain.
|
| 5.19. |
Bank
Accounts.
Owner shall establish one or more bank accounts that are necessary
for the
operation of the Facility at various banking institutions chosen
by
Manager and reasonably acceptable to Owner (such accounts are hereinafter
collectively referred to as the "Bank Accounts"). The accounts shall
be in
the name of Owner, but, except as provided in the following sentence,
Manager's designees shall be the only persons authorized to draw
upon the
Bank Accounts. If Manager has committed an Event of Default which
continues during the term of any applicable cure periods, or if Manager
has acted in bad faith with respect to Owner's funds in the Bank
Accounts,
then Owner shall have the right to assume sole control of the Bank
Accounts upon two (2) Business Days' prior written notice to Manager,
whereupon the signatures of two (2) members of Owner shall be required
to
draw upon the Bank Accounts. Manager's designated signatories must
be
covered by the fidelity insurance described in Section 12.1. The
Bank
Accounts shall be interest bearing accounts if such accounts are
reasonably available and all interest thereon shall be credited to
the
Bank Accounts. All gross revenues received by Manager from the operations
of the Facility shall be deposited in the Bank Accounts and Manager
shall
pay out of the Bank Accounts, to the extent of the funds therein,
from
time to time, all Operating Expenses and other amounts required by
Manager
to perform its obligations under this Agreement. All funds in the
Bank
Accounts shall be separate from any other funds and Manager may not
commingle any of Manager's funds with the funds in the Bank Accounts.
Owner shall bear the risk of the insolvency of any financial institution
holding such Bank Accounts.
|
-
18
-
| 5.20. |
Credit.
All decisions regarding the granting and collection of credit, if
allowed
under the Act, shall be governed by the Credit Policy to be developed
by
Manager and approved by Owner. All credit shall be for the account
of and
at the sole risk of Owner.
|
| 5.21. |
Sales
Taxes, Etc.
If
reasonably requested by Owner and agreed to by Manager, Manager shall
use
its best efforts to comply in all material respects with all applicable
Laws with respect to collecting, accounting for and paying to the
appropriate Governmental Authorities all applicable excise, sales
and use
taxes and other similar governmental charges resulting from the operation
of the Facility.
|
| 5.22. |
Emergency
Expenditures.
Without limiting the generality of this Section 5.22, in the event
that a condition exists in, on, or about the Facility of a nature
reasonably believed by Manager to be an emergency, including structural
repairs, which Manager believes requires immediate repair to preserve
and
protect the Facility and assure its continued operation or to protect
the
safety and welfare of the Facility customers, guests or employees,
Manager, on behalf of and at the expense of Owner, shall take all
reasonable steps and make all reasonable expenditures necessary to
repair
and correct any such condition, whether or not provisions have been
made
in the applicable budgets for any such emergency expenditures.
Expenditures made by Manager in connection with an emergency shall
be paid
from the Bank Accounts. Owner shall replenish funds paid from the
Bank
Accounts with any insurance proceeds received by Owner with respect
to
such emergency condition or situation, and Owner shall replace any
difference between the insurance proceeds and the amount used for
such
emergency from the Bank Accounts. Manager shall promptly notify Owner
of
any emergency expenditures made pursuant to this Section
5.22.
|
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19
-
| 5.23. |
Expenditures
Required for Compliance with Law.
Without limiting the generality of this Article VII, if at any time
during
the Term of this Agreement repairs, additions, changes or corrections
in
the Facility of any nature shall be required by reason of any Governmental
Requirements now or hereafter in force, such repairs, additions,
changes
or corrections shall be made at the direction of Manager and shall
be paid
for by Owner. Manager shall inform Owner of the existence of any
Governmental Requirements which require expenditures under this Section
5.23 as soon as practicable after learning of such Governmental
Requirements and the repairs, additions, changes or corrections which
Manager believes are required to be made and the estimated expenditures
to
be incurred. If compliance with any Governmental Requirements that
are the
subject of this Section 5.23 will require expenditures which will
make the
continued operation of the Facility uneconomical to Owner, Owner
shall
have the right to cease operating the Facility (to the extent the
cessation of Facility operations will not result in any material
liability
to Manager) and in connection therewith, to terminate this Agreement,
which termination shall not constitute a Default by Owner hereunder.
In
the event Owner reopens the Facility or the Casino at a site different
from the Site within three hundred sixty-five (365) days after so
ceasing
operations, Manager shall have the option to be reinstated and resume
as
Manager in accordance with the terms of this
Agreement.
|
| 5.24. |
Marketing
Programs.
Manager shall develop a marketing program to implement the marketing
plans
contained in each Annual Operating Plan. Manager may, at its option,
also
provide for the Facility, or seek to cause an Affiliate to so provide
the
following: (i) joint marketing or advertising with similar properties
owned or operated by Affiliates of Manager and (ii) major entertainment,
sporting events or special attractions sponsored by the Facility.
Manager
shall use its best efforts to cooperate with Owner in the development
of
any joint marketing efforts which it determines at its option to
provide
for the Facility.
|
| 5.25. |
Limitations
on Use of Names and Logos.
Owner acknowledges that neither this Agreement nor the exercise of
any of
Owner's rights in respect of the Facility, shall give Owner any rights
to
the names "Century", “All Stars”, “Celebrations” or
“Legends”.
|
| 5.26. |
Manager's
Expenses.
In connection with Manager's obligations under this Agreement and
with
Owner’s prior approval, Manager may at its option arrange for Century or
its Affiliates to provide such reasonable supervisory, accounting,
administrative and operational services to Manager as are generally
provided by Century or its Affiliates to its other gaming units.
Owner
shall pay Century (or its Affiliates, as the case may be) a commercially
reasonable hourly rate for such services and shall bear the cost
of
reasonable travel and related expenses for any staff of Century or
its
Affiliates visiting the Facility for purposes of providing such services
to the Facility. Owner shall also have the right, but not any obligation,
to consider Winlan (a shareholder in Owner) for certain of such
services.
|
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20
-
| 6. |
DEFAULT/STEP-IN
RIGHTS
|
| 6.1. |
Default
or Event of Default.
The occurrence of any one or more of the events described in this
Sections
6.1.1. and 6.1.2., which is not cured within the time permitted,
shall
constitute a default under this Agreement (hereinafter referred to
as a
"Default" or an "Event of Default") as to the party failing in the
performance or effecting the breaching
act.
|
| 6.2. |
Manager's
Defaults.
Manager shall have committed a "Manager's Default" if Manager
shall:
|
| 6.2.1. |
file
a voluntary petition in bankruptcy or insolvency, or a petition for
relief
or reorganization under any bankruptcy or insolvency
law;
|
| 6.2.2. |
consent
to an involuntary petition in
bankruptcy;
|
| 6.2.3. |
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 Manager of all or any substantial part
of its
assets;
|
| 6.2.4. |
fail
to materially perform or materially comply with any of the covenants,
agreements, terms or conditions contained in this Agreement applicable
to
Manager (other than monetary payments) and such failure shall continue
for
a period of forty-five (45) days after written notice thereof from
Owner
to Manager 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, be cured within forty-five (45) days, if Manager fails
to
proceed promptly and with all due diligence and in good faith to
cure the
same and thereafter to prosecute the curing of such failure to completion
with all due diligence within ninety (90) days thereafter;
|
| 6.2.5. |
take
or fail to take any action to the extent required of Manager under
this
Agreement that creates a default under any Governmental Requirement
unless
Manager cures such default or breach prior to the expiration of applicable
notice, grace and cure periods, if
any.
|
| 6.2.6. |
If
the only result of the failure by Manager to act is a monetary loss
to
Owner which is not otherwise capable of being cured by Manager, then
Manager shall not be in Default if Manager reimburses Owner for such
losses within thirty (30) Business Days of incurring such loss or
otherwise protects Owner against such loss in a manner reasonably
acceptable to Owner.
|
| 6.3. |
Owner's
Default.
Owner shall have committed an "Owner's Default" if Owner
shall:
|
-
21
-
| 6.3.1. |
file
a voluntary petition in bankruptcy or insolvency, or a petition for
relief
or reorganization under any bankruptcy or insolvency
law;
|
| 6.3.2. |
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;
|
| 6.3.3. |
have
entered against it an order for relief under any bankruptcy code
(or any
successor statute) or any other order, judgment or decree by any
court of
competent jurisdiction on the application of a creditor adjudicating
such
Owner insolvent or approve a petition seeking reorganization or appointing
a receiver, trustee, custodian or liquidator of all or a substantial
part
of Owner's assets, and such order, judgment or decree continues unstayed
and in effect for a period of ninety (90)
days;
|
| 6.3.4. |
have
appointed for it a receiver or custodian of or for all or a substantial
portion of the assets of Owner unless removed within sixty (60)
days;
|
| 6.3.5. |
assign
for the benefit of its creditors all or any substantial part of its
assets, or the consent to the appointment of a receiver, liquidator,
custodian or trustee in bankruptcy for all or any substantial part
of its
assets;
|
| 6.3.6. |
fail
to make any monetary payment required under this Agreement, including,
but
not limited to, the Management Fee or Owner's Advances, on or before
the
due date recited herein and said failure continues for five (5) Business
Days after written notice from Manager specifying such failure;
or
|
| 6.3.7. |
fail
to perform or materially comply with any of the other covenants,
agreements, terms or conditions contained in this Agreement applicable
to
Owner (other than monetary payments) and such failure shall continue
for a
period of forty-five (45) days after written notice thereof from
Manager
to Owner 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 forty-five (45) days, if Owner fails to proceed
promptly and with all due diligence and in good faith to cure the
same and
thereafter to prosecute the curing of such failure to completion
with all
due diligence within ninety (90) days
thereafter.
|
| 6.4. |
Delays
and Omissions.
No delay or omission as to the exercise of any right or power accruing
upon any Event of Default shall impair the non-defaulting party's
exercise
of any right or power or shall be construed to be a waiver of any
Event of
Default shall impair the non-defaulting party's exercise of any right
or
power or shall be construed to be a waiver of any Event of Default
or
acquiescence therein.
|
| 6.5. |
Owner's
Remedies.
Upon the occurrence of a Manager's Default, Owner shall be entitled
to (i)
terminate this Agreement by Owner's written notice of termination
to
Manager and such termination shall be effective forty-five (45) days
after
delivery of such notice; (ii) obtain specific performance of Manager's
obligations hereunder and injunctive relief; or (iii) exercise Owner's
step-in rights as described in Section 6.7
herein.
|
-
22
-
| 6.6. |
Manager's
Remedies.
Upon the occurrence of an Owner's Default, Manager shall be entitled
to
(i) terminate this Agreement by Manager's written notice of termination
to
Owner, and such termination shall be effective forty-five (45) days
after
delivery of such notice or such time as a new manager is appointed,
whichever is earlier; or (ii) obtain specific performance of Owner's
obligations hereunder and injunctive relief. In the event of a termination
of this Agreement pursuant to clause (i)
of this Section 6.6, Manager shall be entitled to accelerated payment
of
all of its projected Management Fees for the remainder of the then
applicable ten year period this Agreement or thirty six (36) month
period
following the termination date of this Agreement, whatever is longer, such
projected Management Fees to be based on last year’s Management Fee
increased by 15% (fifteen percent) per annum. The parties hereby
agree
that the amount payable as liquidated damages described above is
a
reasonable estimate of the amount of damages for termination of this
Agreement arising out of such Owner Default and the termination of
this
Agreement and upon payment thereof Manager shall have no further
rights,
claims or entitlement to damages as a consequence of such
termination.
|
| 6.7. |
Step-In
Rights.
|
| 6.7.1. |
If
Owner's funds are available, and Manager fails to pay when due any
amount
which it is Manager's responsibility to pay from such Owner's funds
pursuant to this Agreement, then Owner, after five (5) days' written
notice to Manager with respect to any Operating Expense, and with
respect
to any non-Operating Expense with such notice, if any, as may be
reasonable under the circumstances (except in the event that Manager
has
exposure to potential liability in connection with making such payments
in
which case Owner shall give Manager five (5) days' written notice),
may
(but shall not be required to) pay such amounts (including fines,
penalty,
interest and late payment fees) and take all such action as may be
necessary in respect thereof. Manager shall, following such payments
by
Owner, promptly reimburse Owner from the Bank Accounts to the extent
funds
are available in the amount which Manager failed to pay when
due.
|
| 6.7.2. |
If
Manager fails to take any action which it is Manager's responsibility
under this Agreement to take, and the result is to expose Owner to
a
material loss or Facility patrons to a material risk of physical
safety,
then Owner, upon five (5) days' written notice to Manager (except
in any
emergency in which case Owner shall give Manager such notice, if
any, as
is reasonable under the circumstances), may (but shall not be required
to)
take such actions as may be necessary to protect Owner's assets from
such
a material loss and/or to protect the Facility customers. Manager
shall,
following any payments by Owner made with respect to such actions,
promptly reimburse Owner from the Bank Accounts, to the extent funds
are
available, the amount which Owner has
expanded.
|
| 6.8. |
Remedies
Nonexclusive.
No remedy granted to either Owner or Manager under Sections 6.5,
6.6 and
6.7, respectively, is intended to be exclusive of any other remedy
herein
or by General Law provided, but each shall be cumulative and shall
be in
addition to every other remedy given hereunder or now or hereafter
existing at law or in equity.
|
-
23
-
| 6.9. |
Manager
Responsibilities.
In the event of termination of this Agreement, Manager will relinquish
control of the Bank Accounts. Manager shall make its Senior Staff
available to Owner for a period of sixty (60) days at Owner's expense
to
ensure an orderly and uninterrupted transition of the management
of the
Facility. Owner shall reimburse Manager for all out-of-pocket expenses,
personnel costs and allocated overhead incurred during said sixty
(60) day
period.
|
| 7. |
CERTAIN
RIGHTS AND RESPONSIBILITIES OF
OWNER
|
| 7.1. |
Owner's
Advances.
Owner shall advance to Manager on a timely and prompt basis immediately
available funds with which to conduct the affairs of and maintain
the
Facility (hereafter referred to as "Owner's Advances") as set forth
in
this Agreement and as otherwise provided
hereunder.
|
| 7.2. |
Working
Capital.
During the Term of this Agreement, within five (5) Business Days
after
receipt of written notice from Manager, Owner shall fund Owner's
Advances
adequate to insure that the Working Capital set forth in the applicable
Annual Operating Plan as revised pursuant to the provisions of Section
5.
is sufficient to support the uninterrupted and efficient ongoing
operation
of the Facility. The written request for any additional Working Capital
shall be submitted by Manager to Owner on a monthly basis based on
the
Financial Statements and the applicable Annual Operating Plan as
revised
pursuant to the provisions of Section
5.9.
|
| 7.3. |
Payment
of Expenses.
Manager shall pay from Net Gaming Proceeds the following items in
the
order of priority listed below, subject to the General Laws, on or
before
their applicable due date:
|
| 7.3.1. |
Operating
Expenses (including the Management Fee), expenditures permitted pursuant
to Sections 5.22 and 5.23, and other payments due under the Purchase;
and
|
| 7.3.2. |
If
applicable, payments due on any Purchase or other financing arrangements
relating to the FF&E, and any other expenditures permitted by any
Annual Operating Plan; and
|
| 7.3.3. |
If
applicable, any other taxes, expenses or fees which Owner is obligated
to
pay out of Net Gaming Proceeds by contract and Owner has asked Manager
to
administer such payments (as long as such contract has been brought
to the
attention of Manager) or under law.
|
-
24
-
| 7.3.4. |
Manager's
responsibility to make any of the foregoing payments is subject to
and
conditioned upon Owner making available funds sufficient to make
such
payments from Net Gaming Proceeds or otherwise in the order set forth
above. Owner shall have the right to elect to pay directly (rather
than
have Manager pay) rental, fees and other payments due under the Purchase,
or debt service, upon five (5) days' written notice to Manager and
in such
event Manager shall disburse to Owner from gross revenues (subject
to the
prior payment of expenses listed in clause (i) above) funds in such
amounts and at such times as may be necessary to pay such expenses
on or
before the date such expenses are due, subject to various Casino
Bankroll
and Working Capital requirements and the availability of such funds
otherwise. Owner shall timely make all payments under this Section
7.3.4
where Owner has requested the right to make such payments directly
and if
Owner fails to make such payments, Owner's right to make such payments
directly shall cease until Owner has brought all such obligations
current.
Nothing in this Section 7.3.4 shall be deemed to relieve Owner from
its
obligations to pay Management Fees in a timely manner in accordance
with
Article IV or to comply with the time requirements set forth in Articles
IV and VIII or to pay any other obligation of Owner under this Agreement.
Notwithstanding anything to the contrary in this Agreement, Manager
shall
have the right to offset any amounts due from Manager, if any, under
this
Agreement against any unpaid Management
Fee.
|
| 7.4. |
Optional
Funding by Manager.
In the event Owner fails to fund any Owner's Advance within the specific
time period set forth in this Article 7 or make any other payment
required
to be made by Owner hereunder, or if sums are required prior to such
time
as Owner is obligated to advance the same, Manager may, at its sole
option, upon five (5) days' written notice to Owner, without assuming
any
liability for the payment of any account, advance the amount required,
or
any portion thereof, on behalf of Owner. The amount advanced and
paid on
behalf of Owner ("Manager's Advances") shall be reimbursed on demand
and
shall bear interest at the Default Rate until Manager is reimbursed
in
full, including all accrued interest. The funding of any Manager's
Advance
does not in any manner waive any rights or remedies granted to Manager
under the terms of this Agreement, including the right to declare
Owner in
Default as provided in Article 6 and to proceed with any remedies
granted
under Article 6.
|
| 7.5. |
Cooperation
of Owner and Manager.
Owner and Manager shall cooperate fully with each other during the
Term of
this Agreement to facilitate the performance by Manager of Manager's
obligations and responsibilities set forth in this Agreement and
to
procure and maintain all Construction and Operating Permits. Owner
shall
provide Manager with such information pertaining to the Purchase,
Governmental Requirements and the Facility necessary to the performance
by
Manager of its obligations hereunder as may be reasonably and specifically
requested by Manager from time to
time.
|
-
25
-
| 8. |
LICENSE
PROTECTION
|
| 8.1. |
Owner
Denial.
If at any time (i) either Owner or any Person owning any partnership
interest or any of the issued and outstanding stock of (or beneficial
interest in) either Owner or an Affiliate of Owner, or a partner,
limited
partner, officer or director of either is (x) denied a license, found
unsuitable, or is denied any other Approval with respect to the Facility
or any other gaming operation anywhere by a Gaming Authority because
of
such Person's misconduct or association with any other Person who
is
reputed to be controlled by Persons known to be engaged in criminal
activities, or (y) is required by any Gaming Authority to apply for
an
Approval and does not apply within any required time limit (including
extensions, if any), wrongfully withdraws any application for Approval,
and if the result of the foregoing has or would have an adverse affect
on
Manager or any Affiliate of Manager with respect to its operation,
or
ownership of a casino under any Gaming Authority or does or would
materially delay obtaining any Approval affecting Manager or any
Affiliate
of Manager, or (ii) any Gaming Authority commences any suit or proceeding
against either Manager or an Affiliate or to terminate or deny any
right
or Approval of Manager or any Affiliate because of a final determination
of unsuitability or similar finding concerning Owner, any Affiliate
of
Owner or any Person owning a beneficial interest in Owner or an Affiliate
of Owner or (iii) the compliance committee of Manager reasonably
determines that Owner, or any Person owning any partnership interest
or
any of the issued and outstanding stock of (or beneficial interest
in)
Owner or an Affiliate of Owner may jeopardize Approvals held by Manager
or
its Affiliates, or the current status of Manager or its Affiliates
with
any Gaming Authority (all of the foregoing events described in clauses
(i)-(iii) above are collectively referred to as an "Owner Denial"),
said
Owner Denial shall be a Default and shall entitle Manager to its
remedies
under Article VIII. Said Owner Denial shall not be an Event of Default,
however, providing Owner ends such association within such period
of time,
if any, as the Gaming Authority and/or Manager’s compliance committee
gives for terminating such association. Owner and all Persons associated
with Owner shall promptly, and in all events within any time limit
established by Law or such Gaming Authority, furnish each Gaming
Authority
any information requested by such Gaming Authority and shall otherwise
fully cooperate with all Gaming Authorities including any required
inspections.
|
| 8.2. |
Manager's
South Africa Licensing.
Manager shall apply for and pursue all Manager Operating Permits
or
licenses, and use best efforts to assist Owner in obtaining Owner
Operating Permits or licenses, as expeditiously as possible. Manager
shall
not be obligated to accept any conditions to obtain any Manager Operating
Permit which imposes any liabilities, financial obligations or performance
obligations not required by this
Agreement.
|
| 8.3. |
Manager
Denial.
If at any time (i) either Manager, any Affiliate of Manager or any
Person
associated in any way with Manager is denied a license, found unsuitable,
or is denied any other Approval with respect to the Facility or any
other
gaming operation by a Gaming Authority or is required by any Gaming
Authority to apply for an Approval and does not apply within any
required
time limit (including extensions, if any), wrongfully withdraws any
application for Approval, and if the result of the foregoing has
or would
have an adverse effect on Owner or any Affiliate of Owner or any
officer
or director of Owner or its Affiliates with respect to such person's
or
its operation of a casino under any Gaming Authority, or does or
would
materially delay obtaining any Approval affecting Owner or any Affiliate
of Owner, or (ii) any Gaming Authority commences any suit or proceeding
against either Owner or any Affiliate because of a final determination
of
unsuitability or similar finding concerning Manager, any Affiliate
of
Manager or any Person owning a beneficial interest in Manager (all
of the
foregoing events described in clauses (i) and (ii) above are collectively
referred to as a "Manager Denial"), said Manager Denial shall entitle
Owner to terminate this Agreement. If Owner exercises its right to
terminate this Agreement pursuant to this Section 8.3 solely as the
result
of an association of Manager or any Person associated with Manager,
this
Agreement shall not terminate if Manager ends such association within
such
period of time, if any, as the Gaming Authority gives for terminating
such
association. Manager and all Persons associated with Manager shall
promptly, and in all events within any time limit established by
General
Law or such Gaming Authority, furnish each Gaming Authority any
information requested by such Gaming Authority including any required
inspections. The purpose of this Section 8.3 is solely to protect
existing
licenses of Owner and Owner's Affiliates and of their respective
officers
and directors. This Section 8.3 does not apply to any event described
above that does not jeopardize the continued viability of such licenses.
Any Manager Denial that is attributable in whole or in part to the
acts or
omissions of Owner shall not entitle Owner to terminate this
Agreement.
|
-
26
-
| 8.4. |
Owner's
South Africa Licensing. Owner
shall timely obtain and maintain any Owner Operating Permits the
responsibility for the maintenance of which Owner has not requested
of
Manager pursuant to this Agreement.
|
| 9. |
OWNER'S
COVENANTS AND
REPRESENTATIONS
|
Owner
makes the following covenants and representations to Manager, which
representations and covenants shall, unless otherwise stated herein, survive
the
execution and delivery of this Agreement and the Opening Date and shall continue
to be true during the Term of this Agreement
| 9.1. |
Corporate
Status.
Owner is a company duly organized, validly existing, and in good
standing
under the laws of South Africa and has full corporate power to enter
into
this Agreement and execute all documents required
hereunder.
|
| 9.2. |
Authorization.
The making, execution, delivery and performance of this Agreement
by Owner
has been duly authorized and approved by all requisite action of
the Board
of Directors of Owner, and this Agreement has been duly executed
and
delivered by Owner and constitutes a valid and binding obligation
of
Owner, enforceable in accordance with its
terms.
|
-
27
-
| 9.3. |
Other
Agreements.
Neither the execution and delivery of this Agreement by Owner nor
Owner's
performance of its obligations hereunder will result in a violation
or
breach of, or constitute a default with respect to or accelerate
the
performance required under any other agreement or obligation to which
Owner is a party or is otherwise bound or to which the Facility or
any
part thereof is subject, and will not constitute a violation of any
General Law to which Owner or the Facility is
subject.
|
| 9.4. |
Documentation.
If necessary to carry out the intent of this Agreement, Owner agrees
to
execute and provide to Manager, on or after the date hereof, any
and all
other instruments, documents and agreements necessary to make this
Agreement fully and legally effective, binding and enforceable between
the
parties hereto and as against third
parties.
|
| 9.5. |
Related
Contracts.
Owner shall cause the timely payment and performance of all its
obligations under the Purchase, loan documents and all other contracts
related to the development and operation of the Facility other than
such
responsibilities as are imposed upon Manager pursuant to this Agreement;
provided, however, that Owner shall fund all such obligations to
the
extent gross revenues are sufficient
therefore.
|
| 10. |
MANAGER'S
COVENANTS AND
REPRESENTATIONS
|
Manager
makes the following covenants and representations to Owner, which covenants
and
representations shall, unless otherwise stated herein, survive the execution
and
delivery of this Agreement and the Opening Date and continue to be true during
the Term of this Agreement.
| 10.1. |
Corporate
Status.
Manager is a corporation duly organized, validly existing, and in
good
standing with full corporate power to enter into this Agreement and
execute all documents required
hereunder.
|
| 10.2. |
Authorization.
The making, execution, delivery and performance of this Agreement
by
Manager has been duly authorized and approved by all requisite action
of
the Board of Directors of Manager, and this Agreement has been duly
executed and delivered by Manager and constitutes a valid and binding
obligation of Manager, enforceable in accordance with its
terms.
|
| 10.3. |
Other
Agreements.
Neither the execution and delivery of this Agreement by Manager nor
Manager's performance of its obligations hereunder will result in
a
violation or breach of, or constitute a default with respect to or
accelerate the performance required under any other agreement or
obligation to which Manager is a party or is otherwise bound and
will not
constitute a violation of any General Law to which Manager is
subject.
|
-
28
-
| 10.4. |
Documentation.
If necessary to carry out the intent of this Agreement, Manager agrees
to
execute and provide to Owner, on or after the date hereof, any and
all
other instruments, documents and agreements that may be necessary
to make
this Agreement fully and legally effective, binding and enforceable
between the parties hereto and against third
parties.
|
| 11. |
UNAVOIDABLE
DELAYS
|
The
provisions of this Article 11 shall be applicable if there shall occur during
the Term of this Agreement any (i) strike(s), lockout(s) or labor dispute(s),
(ii) inability to obtain labor or materials, or reasonable substitutes therefor,
(iii) acts of God, governmental restrictions, regulations or controls, enemy
or
hostile governmental action, civil commotion, fire or other casualty, (iv)
delay
attributable to the failure to obtain any Construction Permit, Operating Permit
or any Approval of any Governmental Authority for reasons that are not the
fault
of or beyond the reasonable control of the party obligated, or (v) other
conditions similar to those enumerated in this Article 11 beyond the reasonable
control of the party obligated to perform (collectively referred to as
"Unavoidable Delay"). If Manager or Owner shall, as the result of any
Unavoidable Delay fail punctually to perform any obligation on its part under
this Agreement, then, upon written notice to the other within five (5) Business
Days of such event, such failure shall be excused and not be a breach of this
Agreement by the party claiming an Unavoidable Delay, but only to the extent
occasioned by such event. If any right or option of either party to take any
action under or with respect to the Term of this Agreement is conditioned upon
the same being exercised within any prescribed period of time or at or before
a
named date, then such prescribed period of time or such named date shall be
deemed to be extended or delayed, as the case may be, upon written notice,
as
provided above, for a time equal to the period of the Unavoidable Delay.
Notwithstanding anything contained herein to the contrary, the provisions of
this Article 11 shall not be applicable to the time periods for satisfying
Manager's or Owner's obligation to make any payments to the other pursuant
to
the terms of this Agreement nor shall this Article operate to extend any time
period set forth in Article 8.
| 12. |
INSURANCE
|
| 12.1. |
Operating
Insurance.
|
| 12.1.1. |
Owner
shall procure all insurance coverage deemed necessary and adequate
by
Manager (the "Required Coverage").
|
| 12.1.2. |
The
premiums for all insurance obtained in accordance with this Section
12.1
shall be Operating Expenses.
|
| 12.1.3. |
Manager
shall be required to provide the
following:
|
| 12.1.3.1. |
Prompt
reporting of any incident or potential claim on or about the
premises;
|
| 12.1.3.2. |
Assist
and cooperate in the adjustment of all
claims;
|
| 12.1.3.3. |
Implementation
and monitoring of all loss control practices as required by Owner
or
various insurance companies; and
|
| 12.1.3.4. |
Advise
Owner of any unsafe conditions or hazards brought to the attention
of
Manager during the Term of this
Agreement.
|
-
29
-
| 12.2. |
Other
Insurance.
Owner shall procure and maintain at all times during the Term of
this
Agreement insurance (subject to reasonable deductible amounts as
determined by Manager and as available and consistent with market
conditions) protecting the real and personal property of the Facility
against fire, with all risks coverage against fire, with all risk
coverage
against other perils, including vandalism, malicious mischief, flood,
hurricane, tornado, earthquake, lightning, aircraft and explosion,
and
also including boiler and machinery and business interruption with
ordinary payroll coverage and such other insurance as is required
by the
Purchase or the loan documents (excluding, however, insurance described
in
Section 12.3) or commonly or prudently maintained by owners of similar
properties similarly used, in the full replacement value at an agreed
amount, including cost of debris removal and increased cost of
construction ("Property Insurance"). Owner shall obtain builder's
risk and
xxxxxxx'x compensation, commercial general liability and automobile
liability coverage during all construction. Owner shall also obtain
all
insurance necessary to insure the Facility as provided for in the
Management Agreement. Owner shall also procure such additional kinds
of
coverage that Manager determines shall be reasonable and prudent
with
respect to the Facility or as reasonably required by lender(s) or
the
terms of the Purchase.
|
| 12.3. |
Parties
to be Covered by Insurance; Location of Policies.
All policies of insurance procured pursuant to Sections 12.1, 12.2
and any
Governmental Requirements shall name Manager (and, if such insurance
is
procured by Century, Owner) as an additional insured by policy endorsement
where permitted by the terms and conditions of the various policies
but in
all events with respect to all liability insurance. All policies
shall
name such other parties as may be required by the loan documents,
the
Purchase and any Governmental Requirements as the insured persons
thereunder, as their respective interests may appear, and shall provide
that they shall not be canceled, modified or denied renewal without
at
least thirty (30) days prior written notice (or such longer period
as is
required by Law) to each party that is a named or additional insured
thereunder. Owner shall not be required to cause any Person other
than
those Persons required to be named pursuant to this Section 12.3
to be
insured by any insurance policy until thirty (30) days after Owner
has
received notice of such Person's
interest.
|
| 12.4. |
Rights
of Manager and Owner to Receive Information on Insurance
Matters.
Owner and Manager shall furnish each other with certificates of insurance,
evidencing that the insurance required herein has been procured,
no later
than thirty (30) days after the approval of the Development Plan.
Any
binder issued as interim proof must be replaced within thirty (30)
days of
issuance with a certificate of insurance indicating a policy
number.
|
-
30
-
| 12.5. |
Termination
of Agreement.
In the event of the termination of this Agreement for any reason,
Owner
shall, at Owner's sole cost and expense, continue to name Manager
as an
additional insured on the liability insurance coverage required by
this
Agreement following the date of the termination of this Agreement,
provided that Owner's obligations under this sentence are subject
to the
availability of such coverage from the existing insurance carrier.
Owner
shall provide Manager with evidence of the foregoing coverages following
the date of the termination of this Agreement by the delivery of
certificates of insurance evidencing the current in place coverage,
together with such other information as may be reasonably requested,
from
time to time, by Manager.
|
| 12.6. |
Other
Insurance Requirements.
All the insurance required under this Agreement shall be issued by
insurance companies authorized to do business in South Africa with
a
financial rating of at least an A- status as rated in the most recent
edition of Best Insurance Reports, or an equivalent rating by a
responsible company providing similar services if Best Insurance
Reports
ceases to be regularly published.
|
| 13. |
DAMAGE
AND CONDEMNATION
|
| 13.1. |
Minor
Casualty.
In the event of a Minor Casualty, Manager shall repair any damage
or
destruction at Owner's sole cost and
expense.
|
| 13.2. |
Major
Casualty. Major Condemnation.
In
the event of a Major Casualty or a Major Condemnation, this Agreement
shall remain in full force and effect if the Casino or the Facility
is
repaired or restored within one (1) year from the date of the Major
Casualty or the Major Condemnation. If not repaired or restored within
one
year, Owner shall pay to Manager the greater of a sum equivalent
to five
percent (5%) of all insurance monies received or the projected Management
Fees for the remainder of this Agreement. Such projected Management
Fees
shall be equal to the last year’s Management Fee increased by 15% (fifteen
percent) per annum.
|
| 13.3. |
Minor
Condemnation.
In the event a Minor Condemnation occurs, this Agreement shall not
terminate and Owner shall use the award to repair and restore the
Facility, including, without limitation, to the extent required under
the
Purchase or the loan documents. Manager may separately claim for,
prove
and receive an award for any separately compensable rights of Manager
that
are taken in any such condemnation
action.
|
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31
-
| 14. |
INDEMNIFICATION
|
| 14.1. |
Owner
Indemnity.
Owner hereby covenants and agrees to indemnify, save, and defend,
at
Owner's sole cost and expense, and hold harmless, Manager and its
officers, directors and Affiliates (collectively, "Owner Indemnitees"),
from and against the full amount of any and all Losses. The term
"Losses"
shall include, but not be limited to, any and all liabilities, claims,
suits, administrative proceedings, losses, damages or costs, which
may be
asserted against an Owner Indemnitee arising from, or relating to
the
financing, construction or operation of the Facility and shall include
expenses of defense including, without limitation, attorneys' fees.
Each
Owner Indemnitee will promptly notify Owner of such action, suit
or
proceeding which relates to any matter covered by the indemnity in
this
Section 14.1.
|
| 14.2. |
Manager
Indemnity.
Manager hereby covenants and agrees to indemnify, save and defend,
at
Manager's sole cost and expense, and hold harmless, Owner and its
officers
and directors (collectively, "Manager Indemnitees") from and against
liabilities, claims, losses, damages, costs or expenses that may
be
asserted against a Manager Indemnitee solely arising from or relating
to
the gross negligence, criminal misconduct or fraud of Manager in
breach of
any of its duties and obligations under this Agreement. Owner will
promptly notify Manager of such action, suit or proceeding which
relates
to any matter covered by the indemnity in this Section
14.2.
|
| 14.3. |
Special
Environmental Indemnity.
Owner agrees to indemnify, defend, reimburse and hold harmless Manager
from and against any and all Environmental Damages arising from the
presence of Hazardous Materials upon, about or beneath the Site,
or
migrating to or from same, or arising in any manner whatsoever out
of the
violation of any Environmental Requirements pertaining to the Site,
whether or not arising out of Manager's negligence, or the breach
of any
warranty or covenant or the inaccuracy of any representation of Owner
contained in this Agreement.
|
| 14.4. |
Legal
Fees, Etc.; Procedures.
Each indemnitor under this Article 14 shall reimburse each indemnitee
for
any legal fees and costs, including reasonable attorneys' fees and
other
litigation or proceeding expenses, even if the claim is groundless,
false,
or fraudulent, reasonably incurred by such indemnitee in connection
with
investigating or defending against Losses with respect to which indemnity
is provided hereunder; provided, however, that an indemnitor shall
not be
required to indemnify an indemnitee for any payment made by such
indemnitee to any claimant in settlement of Losses unless such settlement
has been previously approved by the indemnitor. If Losses are asserted,
or
if any action or suit is commenced with respect thereto, for which
indemnity may be sought against an indemnitor hereunder, the indemnitee
shall notify the indemnitor in writing within ten (10) days after
the
indemnitee shall have had actual knowledge of the assertion or
commencement of the Losses or a claim which could give rise to Losses,
which notice shall specify in reasonable detail the matter for which
indemnity may be sought. The indemnitor shall have the right, upon
notice
to the indemnitee given within thirty (30) days following its receipt
of
the indemnitee's notice (or shorter period if such notice specifies
such
shorter period and provides reasonable reason therefor), to take
primary
responsibility for the prosecution, defense or settlement of such
matter,
including the employment of counsel chosen by the indemnitor with
the
approval of the indemnitee, which approval shall not be unreasonably
withheld or delayed, and payment of expenses in connection therewith.
The
indemnitee shall provide, without cost to the indemnitor, all relevant
records and information reasonably required by the indemnitor for
such
prosecution, defense or settlement and shall cooperate with the indemnitor
to the fullest extent possible. The indemnitee shall have the right
to
employ its own counsel in any such matter with respect to which the
indemnitor has elected to take primary responsibility for prosecution
(without regard to Section 5.17), defense or settlement, but the
fees and
expenses of such counsel shall be the expense of the indemnitee except
when indemnitee has engaged its own counsel due to a conflict of
interest
between indemnitor's and indemnitee's interests in which case such
fees
and expenses shall be paid in accordance with this Section
14.4.
|
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32
-
| 15. |
RELATIONSHIP,
AUTHORITY AND FURTHER
ACTIONS
|
| 15.1. |
No
Joint Venture or Ownership.
Nothing contained in this Agreement nor any acts of the parties shall
be
deemed or construed by the parties or by any third party as (i) creating
the relationship of a partnership or joint venture between the parties
to
this Agreement, or (ii) creating or vesting any right, title, interest,
estate, equity participation or beneficial ownership interest in
favor of
Manager in or to the Facility except the contractual rights created
in
Manager by this Agreement. Neither any provisions contained herein
nor any
acts of the parties shall be deemed to create any relationship between
the
parties other than the relationship of Owner and Manager, as provided
in
this Agreement.
|
| 15.2. |
Manager
Affiliates.
The parent of Manager and/or other Affiliates of Manager may provide
service to, provide loans and funds to, negotiate for, provide personnel
to, and, from time to time take actions on behalf of or for the benefit
of
Manager by direct dealings with Owner or those acting for it. The
parent
corporation(s) or Affiliates of Manager shall not be liable to Owner
for
obligations or liabilities of
Manager.
|
| 15.3. |
Arbitration.
|
| 15.3.1. |
If
a dispute occurs between the parties concerning any matter relating
to the
budget, expenses or calculation of any amount under this Agreement,
the
disputing party shall promptly advise the other party and the parties
together shall use all reasonable efforts to resolve the
dispute.
|
| 15.3.2. |
If
the parties are unable to resolve the dispute informally within five
(5)
Business Days, of one party advising the other of the dispute under
Section 15.3.1, or such other time period as may be mutually agreed,
the
dispute shall be resolved as
follows:
|
-
33
-
| 15.3.2.1. |
the
disputing party shall give to the other party written particulars
of the
complaint, which particulars shall include the
following:
|
| 15.3.2.1.1. |
a
detailed description of the nature of the
complaint;
|
| 15.3.2.1.2. |
a
list of the relevant provisions of the Agreement;
and
|
| 15.3.2.1.3. |
an
evaluation by the disputing party of the matters in
dispute;
|
| 15.3.2.2. |
if
the other party accepts the position of the disputing party, the
parties
shall enter into a written agreement to reflect the
resolution;
|
| 15.3.2.3. |
if
the other party rejects the position of the disputing party and/or
if the
dispute is not resolved within fifteen (15) Business Days of the
disputing
party giving the other party written particulars of the complaint
as
provided in Section 15.3.2.1 or such other time period as may be
mutually
agreed, then the parties shall proceed to arbitration. The arbitration
proceedings shall be conducted in accordance with the provisions
of the
Arbitration Act, No. 42 of 1965 (as amended or replaced from time
to
time), save that the proceedings shall be held on an informal basis,
it
being the intention that a decision should be reached as expeditiously
and
as inexpensively as possible. The arbitrator shall have the fullest
and
freest discretion to determine the procedure to be adopted, it being
the
intention that, if possible, the arbitration shall be held and concluded
within twenty-one (21) Business Days after the referral to arbitration
was
made. The arbitrator shall be a senior partner or director of the
chartered accountancy firm which is the auditor of the Owner appointed
by
that firm. The parties irrevocably agree that the decision of the
arbitrator in the arbitration proceedings shall be final and binding
on
each of them and may, if required by either party, be made an order
of any
court of competent jurisdiction.
|
| 16. |
MISCELLANEOUS
|
| 16.1. |
Notices.
All notices, demands, consents, requests, approvals, and other
communications required or permitted hereunder shall be in writing
and
shall be deemed effective only upon delivery (whether receipt is
accepted
or refused) at the addresses set forth below (or at such other addresses
as shall be given in writing by any party to the others in accordance
with
this Section 16.1). Notices may be delivered by hand, registered
or
certified mail, return receipt requested, or bonded private courier
service.
|
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34
-
| 16.1.1. |
If
to Owner: Khulani
House - 0
Xxxxxxx Xxxxx
|
Xxxxxxx
Xxxxx 0000
X.
Xxxxx
| 16.1.2. |
with
a copy to: Xxxxx
Xxxxxx and
Associates
|
00
Xxx Xxxx Xxxx
Xxxxxxxx
- 0000
| 16.1.3. |
If
to Manager:
Century
Casinos Africa (Pty) Limited
|
Attn:
0
Xxxxxxxx Xxxxxx, 00xx
Xxxxx
Xxxx Xxxx
| 16.1.4. |
with
a copy to:
Century
Casinos Europe GmbH
|
Xxxxxxxxxxxxxxxxx 00, 0.Xxxxx
0000
Xxxxxx, Xxxxxxx
| 16.2. |
Governing
Law.
This Agreement shall be governed by the laws of South Africa, without
giving effect to the principles of conflicts of law. Not-with-standing
the
foregoing, this Agreement shall be deemed to include all provisions
required by the Act, and shall be conditioned upon the approval of
the
Gaming Commission and the Enforcement Division. To the extent that
any term or provision contained in this Agreement shall be inconsistent
with the Act, the provisions of the Act shall govern. All provisions
of
the Act, to the extent required by law to be included in this Agreement,
are incorporated herein by reference as if fully restated in this
Agreement. The forum for any actions between Owner and Manager will
be a
court of competent jurisdiction in the Province where the Facility
is
located.
|
| 16.3. |
Limitations
on Rights of Third Parties.
Except as otherwise set forth herein, nothing in this Agreement is
intended or shall be construed to confer upon or give any Person,
other
than the parties hereto and their respective successors, any rights
or
remedies under or by reason of this Agreement or any transaction
contemplated hereby. Provisions herein referring to Century or its
Affiliates are included herein for the benefit of such
Persons.
|
| 16.4. |
Assignments.
This Agreement will be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns
but
will not be assignable or delegable by any party without the prior
written
consent of the other party; provided, however, that nothing in this
Agreement is intended to limit Manager's ability to assign its rights
or
delegate its responsibilities under this Agreement to any directly
or
indirectly controlled Affiliate of Manager, in which case Owner needs
to
be notified.
|
-
35
-
| 16.5. |
Unenforceability.
If any provision herein shall be held invalid or unenforceable, such
provision shall not affect the validity or enforceability of any
other
provisions hereof, all of which other provisions shall, in such case,
remain in full force and effect.
|
| 16.6. |
Entire
Agreement and Amendments.
This Agreement constitutes the entire understanding of the parties
with
respect to the subject matter hereof and supersedes all other oral
or
written agreements between the parties. This Agreement may not be
amended,
modified, altered or waived, in whole or in part, except by a subsequent
writing signed by each of the parties hereto. No amendments may be
made to
this Agreement without the approval of the Gaming
Commission.
|
| 16.7. |
Limitation
on Damages.
Neither party shall be liable to the other party for any consequential
damages resulting from a breach
hereof.
|
| 16.8. |
Confidentiality.
Except as otherwise set forth in Article X, both parties shall maintain
confidentiality with respect to material developments in the course
of
development and operation of the Facility subject to Governmental
Requirements and General Law. Except as required by any General Law
(including, without limitation, federal securities exchange and stock
exchange or NASD requirements) and Gaming Authorities, material
confidential information shall only be made available to such of
a party's
employees and consultants as are required to have access to the same
in
order for the recipient party to adequately use such information
for the
purposes for which it was furnished. Any Person to whom such information
is disclosed shall be informed of its confidential nature and shall
agree
to keep it confidential as provided herein. Information provided
by one
party to the other shall be presumed confidential unless the information
is (i) published or in the public domain other than as a result of
any
action by the recipient thereof, (ii) disclosed to the recipient
by a
third party or (iii) presented to the recipient under circumstances
which
clearly and directly indicate the delivering party does not intend
such
information to be confidential.
|
| 16.9. |
Securities
Law Requirements.
Owner acknowledges that Century’s parent company, Century Casinos, Inc. is
a publicly held company and that trading in its securities based
on
non-public information or unauthorized disclosure or other use of
material
developments could expose Manager and Owner to significant penalties.
Owner shall take appropriate precautions to inform its employees
and
independent contractors of such requirements. In the event Owner
or any
Affiliate of Owner becomes a publicly-held company, Manager shall
take
appropriate precautions to inform its employees and independent
contractors that trading in the securities of Owner or such Affiliate
based on non-public information or unauthorized disclosure or other
use of
material developments could expose Owner and Manager to significant
penalties.
|
| 16.10. |
Payment
of Fees.
In the event of litigation or arbitration of any dispute or controversy
arising from, in, under or concerning this Agreement and any amendments
hereof, including, without limiting the generality of the foregoing,
any
claimed breach hereof, any suit for accounting, or action for dissolution,
the prevailing party in such action or arbitration shall be entitled
to
recover from the other party in such action or arbitration, such
sum as
the court or arbitrator shall fix as reasonable attorneys' fees and
expenses incurred by such prevailing
party.
|
-
36
-
| 16.11. |
No
Waiver of Default.
No consent or waiver, express or implied, by any party to or of any
breach
or default by any other party in the performance by the other of
its
obligations hereunder shall be deemed or construed to be a consent
or
waiver to or of any other breach or default in the performance by
the
other party of the same or any other obligations of such party hereunder.
Failure on the part of any party to complain of any act or failure
to act
of the other party or to declare the other party in default, irrespective
of how long such failure continues, shall not constitute a waiver
by any
such party of its rights hereunder.
|
| 16.12. |
Counterparts.
This Agreement may be execute in any number of counterparts, all
of which,
when taken together, shall constitute one and the same
instrument.
|
| 16.13. |
Future
Deliveries.
Each party will, from time to time, execute and deliver such further
instruments and do such further acts and things as may be reasonably
requested by any other party to carry out the intent and purposes
of this
Agreement.
|
| 16.14. |
Computation
of Time.
In the computation of any period of time provided for in this Agreement,
the day of the act or event from which said period of time runs shall
be
excluded, and the last day of such period shall be included unless
it is a
Saturday, Sunday, or national United States or South African holiday,
in
which case the period shall be deemed to run until the end of the
next day
which is not a Saturday, Sunday, or national United States or South
African holiday. As used in this Agreement "Business Day" for any
party
shall be a day which is not a Saturday, Sunday or national United
States
or South African holiday.
|
| 16.15. |
First
Right of Refusal.During
the term of this Agreement, so long as no events of default by Manager
have occurred, Owner shall grant Manager the first right of refusal
on all
of its and/or its Affiliates’ future gaming casino projects. Such right
shall be on terms similar to those outlined in this Agreement. Manager
shall have sixty (60) days upon receipt of notice from Owner to either
accept or reject an offer to act as manager of Owner's and/or Owner’s
Affiliates’ future gaming casino
project(s).
|
-
37 -
IN
WITNESS WHEREOF,
the
parties hereto have caused this Agreement to be duly executed as of the date
and
year first above written.
FOR
BALELE LEISURE (PTY) LTD:
By:
_/s/ X. Xxxxx ___________________ Witness:
__/s/ C. dos Xxxxxx _
a
duly
authorized signatory Print
name: __C. dos Santos_____
Position:
Chairman
Print
name: X. Xxxxx
FOR
CENTURY CASINOS AFRICA (PTY) LTD:
By:__/s/
Christian Gernert_______________ Witness:
/s/ Xxxxx Jackson______
a
duly
authorized signatory Print
name: _Clint Jackson_______
Position:
Director
Print
name: Xxxxxxxxx Xxxxxxx
