CENTURY RESORTS ALBERTA, INC.
CENTURY
RESORTS ALBERTA, INC.
September
16, 2005
Canadian
Western Bank
0000
- 00
Xxxxxx
Edmonton,
Alberta
T6N
1L2
Attention:
Xxxxx X. Xxxxxx
RE: Century
Resorts Alberta Inc. (the “Borrower”)
loan
from
Canadian Western Bank (the “Bank”)
commitment
letter dated August 3, 2005 (the “Commitment Letter”)
We
refer
to the Commitment Letter and in particular the various conditions to funding
of
the credit facilities thereunder. As discussed with you, we need some comfort
from the Bank as to which conditions remain outstanding and the status of
those
outstanding conditions. Our understanding is that only the following remain
outstanding:
1. Schedule
A to the Commitment Letter- the execution, delivery and registration (where
required) of the security listed in Schedule A is outstanding, except
that:
(a) the
guarantee of 746306 Alberta Ltd. in item 6 is not required;
(b) the
assignment of the casino license is not required and in lieu a letter
from AGLC
confirming the non-assignability of the license has been obtained and
provided
to the Bank’s counsel;
(c) item
12
has already been obtained by the Bank;
(d) item
13(i) has already been obtained by the Bank except that an updated
real property
report with municipal compliance will be required when the construction
has
been completed;
(e) items
(ii) and (iv) have been obtained by the Bank; and
(f) item
13(vi) is not required.
2. Schedule
C item 5 is the preliminary budget which has been delivered to the Bank and
is
being reviewed by the Bank’s cost consultant.
3. Schedule
C item 6 final cost budget is to be provided.
4. Schedule
C
item 7 - this is an ongoing requirement during construction and therefore
not a
pre-funding condition.
5. Schedule
C item 8 - this is outstanding, but it will be satisfied if:
(a) The
Borrower enters into the construction contract(s) with Chandos Construction
Ltd.
or
another reputable general contractor in the Edmonton area;
(b) The
form
of those construction contract(s) is the CCDC-2 stipulated price contract
with such non-material amendments to that form as the parties agree;
and
(c) The
scope
of work in such contract(s) is not materially different from the scope
of
construction work that we have provided to the Bank.
6. Schedule
C item 10 - this is outstanding and will be satisfied prior to the first
drawdown.
7. Schedule
C item 11 - the demolition permit and the parkade construction building permit
have
been
provided to the Bank and are acceptable, but the major hotel and casino
renovation
building permit remains outstanding and we expect to provide it
soon.
Please
confirm that subject to finalizing the above outstanding items, the loan
commitment in the Commitment Letter is binding on the Bank, by signing below
where indicated and faxing this letter back to us at (586) 816 - 1642. Thanks
for your attention to this and we look forward to completing the financing
arrangements with you.
Yours
truly,
CENTURY
RESORTS ALBERTA INC.
Per:
Xxxxx
Xxxxxxxxx
Secretary
and Treasurer
Agreed
to
this 23rd
day of
September, 2005.
CANADIAN
WESTERN BANK
Per:
Xxxxx
X.
Xxxxxx
August
3,
2005
Century
Resorts Alberta Inc.
000
X.
Xxxxxx Xxxxxx,
Cripple
Creek, Colorado
80813
Attention:
Xx. Xxxxx Xxxxxxxxx
Dear
Sir:
On
the
basis of the financial statements and other information provided by Century
Resorts Alberta Inc. (“CRA”), in connection with this request for financing,
Canadian Western Bank (the “Bank”) has authorized the following loans subject to
the terms and conditions outlined in this Commitment Letter (the
“Agreement”).
| 1. |
BORROWER:
|
|
Century
Resorts Alberta Inc. ( “CRA”) carrying on business and registered in the
Province of Alberta.
|
| 2. |
LOAN
AMOUNT:
|
| 2.1. |
Loan
Facility 1: Non Revolving Demand Interim Construction Loan
|
-
up to
$20,000,000.00*.
Loan
Facility 2: Non Revolving Long Term Take Out Commercial Mortgage - up to
$20,000,000.00*.
Loan
Facility 3 & 4: Letters of Credit - Loan 3 - $71,155.00*; Loan 4 -
$25,000.00*.
*Maximum
aggregate drawn loans outstanding at any one time can not exceed
$20,000,000.00
| 3. |
PURPOSE
OF LOAN:
|
Amounts
advanced by the Bank are to be used by CRA as follows:
| 3.1 |
Loan
Facility 1: To provide interim construction financing for the development
of the Celebrations Casino and Hotel at 00000 Xxxx Xxxx, Xxxxxxxx
Xxxxxxx
(“Celebrations Casino”). The program can be summarized as
follows:
|
South
Edmonton Common
0000
- 00
Xxxxxx, Xxxxxxxx, Xxxxxxx, X0X 0X0
|
PROGRAM
COSTS
|
FINANCING
|
||
|
Land
Value
Soft
Costs
Construction
Costs
Casino
FF&E
Bankroll,
pre-op, W/C
|
$
2,319,000.00
$
3,778,585.00
$19,016,522.00
$
2,855,018.00
$
3,294,685.00
|
CRA
Equity Requirement:
CWB
loans:
Real
Estate Construction/Term Loan
|
$11,263,810.00
$20,000,000.00
|
|
Total
Costs
|
$31,263,810.00
|
Total
Financing
|
$31,263,810.00
|
No
material change may be made in the program without the prior written consent
of
the Bank.
If
it
becomes evident, as the program progresses, that the cost will be greater than
the above figures, the Bank may, at its sole discretion, withhold further
disbursements of the Loan until the amount of the overrun has been provided
by
CRA or otherwise arranged on a basis acceptable to the Bank. In the event that
the cost exceeds, or CRA becomes aware that it will exceed, the above figures,
CRA shall immediately notify and provide particulars to the Bank. If the actual
cost should be less than the above figures, the Bank may, at its sole
discretion, reduce the amount of the Loan accordingly.
| 3.2 |
Loan
Facility 2: To provide long term commercial mortgage financing to
take out
the interim construction loan upon completion of the Celebrations
Casino.
|
| 3.3 |
Loan
Facilities 3 & 4: To provide Letters of Credit to third parties as
performance guarantees under servicing and development agreements
entered
into to develop the casino. The outstanding letters of credit are
to be
included in the outstanding loan amounts of loan 1 or loan 2 so that
the
outstanding aggregate loan amount at any time will not exceed
$20,000,000.
|
|
4
|
INTEREST
RATE:
|
Loans
shall
bear interest while outstanding before and after maturity and default at the
following rates:
| 4.1 |
Loan
Facility 1: Interest to float at a rate of 1.25% per annum above
the
Bank’s Prime Lending Rate (“Prime”). As of the date of this Agreement,
Prime is 4.25 %.
|
| 4.2 |
Loan
Facility 2: The interest rate payable shall be a fixed annual rate
at the
Banks Commercial Prime
Fixed Rates,
calculated and compounded monthly,
not in advance which, subject to availability for the term selected,
shall
be fixed for terms of 1 to 5 years at CRA’s option. The following loan
rates are cased on the existing Prime Fixed Rates at the time of
writing
and are provided for reference purposes only and are subject to
fluctuations up to and including the date of
drawdown.
|
TERM LOAN
RATE INITIAL
CHOICE OF TERM
1
Year
5.55%
2
Years
5.70%
3
Years 5.90%
4
Years
6.00%
5
Years 6.20%
| 5 |
ADVANCES:
|
| 5.1 |
Loan
facility 1: shall be advanced in monthly progress draws of no less
than
$50,000.00 subject to satisfaction of Conditions Precedent as set
forth in
Schedule “C” herein attached.
|
| 5.2 |
Loan
facility 2: Shall be advanced on a lump sum basis following satisfaction
of the take out financing conditions as set forth in Schedule “C” herein
attached.
|
| 6 |
TERM
AND LOAN MATURITY DATE:
|
| 6.1 |
Loan
facility 1: The interim construction loan shall be for a term not
to
exceed 18 months however the loan shall be repaid from the proceeds
of
loan facility 2 within 60 days of completion as evidenced by expiry
of the
substantial completion certificate, the architect shall have certified
the
construction of the Celebrations Casinos as complete and the occupancy
certificate and Casino License shall have been
issued.
|
| 6.2 |
Loan
facility 2: CRA shall select a term, upon advance of this loan facility,
of one to five years, at CRAs
preference.
|
| 6.3 |
With
respect to loan facility 2, if CRA does not repay the Loan in full
by the
Loan Maturity Date then CRA shall be deemed to have elected to extend
the
term of the Loan to the earlier of one year, or the date payment
is
demanded following the occurrence of an event of default, at the
Banks
sole and absolute discretion. The Bank may provide this extension
at its
discretion in the event the Loan is not repaid by the original Loan
Maturity Date and the loan is in compliance of all terms and
conditions.
|
These
loans are repayable in full the earlier of the Loan Maturity Date or the date
payment is demanded as a result of default by CRA unless otherwise extended
by
the Bank.
| 7 |
REPAYMENT
AND AMORTIZATION:
|
| 7.1 |
Loan
Facility 1: CRA shall make monthly payments of interest only due
and
payable on the first day of each
month.
|
| 7.2 |
Loan
Facility 2: An interest adjustment shall be payable for the period
from
the date of advance to the first day of the month following the date
of
advance and shall be deducted from the amount of the advance. Thereafter,
so long as the loan is not in default, CRA shall make monthly blended
payments of principal and interest each in an amount sufficient to
amortize the loan, at the interest rate, over a ten (10) year period,
payable the first day of each
month.
|
| 8 |
PREPAYMENT:
|
| 8.1 |
Loan
facilities 1. - This loan facility shall be open for prepayment without
bonus or penalty.
|
| 8.2 |
Loan
facility 2. - Upon fixing the rate of interest, no prepayment of
principal
shall be allowed except once during each calendar year CRA may elect
to
prepay up to 10% of the original principal amount without penalty
or
bonus.
|
| 9 |
CENTURY
RESORTS ALBERTA INC. EQUITY:
|
Total
authorized construction equity of at least $11,263,810 shall be maintained
in
the Project at all times until repayment in full of the Loan.
| 10 |
SECURITY
AND SUPPORTING DOCUMENTS:
|
The
attached Schedule “A” forms part of this Agreement.
| 11 |
INSURANCE:
|
The
attached Schedule “B” forms part of this Agreement.
| 11.1 |
Assignment
of all risk (including earthquake, flood and collapse), fire and
theft
replacement cost insurance satisfactory to the Bank covering all
machinery, equipment, fixtures and building which shall contain the
Standard Mortgage Clause approved by the Insurance Bureau of Canada.
The
policy shall contain comprehensive general Public Liability coverage
of
not less than $10,000,000.00 and Satisfactory Business Interruption
Insurance.
|
| 11.2 |
A
copy of the Bank’s detailed insurance requirements is attached as Schedule
“B-1” to this Agreement. The Bank's approved risk management firm shall
review and approve all required insurance, including any changes
made
during the term of the loan, at the cost of
CRA.
|
| 12 |
CONDITIONS
PRECEDENT TO DRAWDOWN:
|
The
attached Schedule “C” forms part of this Agreement.
| 13 |
GENERAL
CONDITIONS/EVENTS OF DEFAULT:
|
The
attached Schedule “D” forms part of this Agreement.
| 14 |
REPORTING
REQUIREMENTS:
|
The
attached Schedule “E” forms part of this Agreement.
| 15 |
STANDARD
LOAN TERMS & DEFINITIONS:
|
The
attached Schedule “F” forms part of this Agreement.
| 16 |
FEES:
|
| 16.1 |
CRA
shall pay an non-refundable commitment fee of $50,000.00 along with
the
acceptance of this commitment letter. The commitment fee is consideration
to the Bank for the issuing of this Agreement. On acceptance of this
Agreement by the Borrower, the entire fee shall be deemed to have
been
fully earned and shall not be refundable.
|
| 16.2 |
Upon
the first advance of Loan 1, an additional commitment fee of $150,000.00
shall be due, and payable. The
fee shall be deemed to have been fully earned and shall not be
refundable.
|
| 16.3 |
Letter
of Credit fees - The Borrower shall pay a fee of 1% of the amount
issued
for issuance or annual renewals of any letters of
credit.
|
| 16.4 |
Upon
drawing down the long term commercial mortgage, the Borrower shall
pay an
annual review fee of $5,000.00 per year commencing on the first
anniversary date of draw down of the long term commercial mortgage.
|
| 17 |
COSTS:
|
The
cost
of all appraisals and environmental reports, the legal costs of the Bank on
a
solicitor-client basis, costs of the Bank’s insurance consultant and all other
reasonable out-of-pocket expenses incurred in the approval and making of the
Loan and the preparation, execution, delivery and registration of the Security
and Supporting Documents (including the cost of delivering copies of any
documents required by law to be given to CRA or any other party) or in the
collection of any amount owing under the terms of the Loan shall be for the
account of CRA and may be debited to advances to be made under the terms of
the
Loan. Until paid, all such costs and expenses shall bear interest at the rate
described in Section 3 of this Agreement.
| 18 |
ASSIGNMENT
BY CRA:
|
CRA
shall
not assign or encumber its rights and obligations under the Loan, this Agreement
or the whole or any part of any advance to be made hereunder, without the prior
written consent of the Bank.
| 19 |
BANK’S
COUNSEL:
|
Legal
work and documentation to be performed at CRA’s expense through the Bank’s
counsel:
Xxxxxxxx
& Tussman LLP
Attention:
Xxxx Xxxxxxxx
#1400,
00000 000 X Xxxxxx
Edmonton,
Alberta
T5J
2Z2.
Tel.
-
(000) 000 0000
| 20 |
MATERIAL
CHANGE:
|
Acceptance
of this Agreement by CRA provides full and sufficient acknowledgement that
if,
in the opinion of the Bank, any material adverse change in risk occurs,
including without limiting the generality of the foregoing, any material adverse
change in the financial condition of CRA, any obligation by the Bank to advance
all or any portion of the loan may be withdrawn or cancelled at the sole
discretion of the Bank, acting in a commercially reasonable manner.
| 21 |
NON-MERGER:
|
The
terms
and conditions set out herein shall not be superseded by nor merge in and shall
survive the execution, delivery and/or registration of any instruments of
security or evidences of indebtedness granted by CRA hereafter, and the
advancement of any funds by the Bank. In the event of a conflict between the
security documents and the terms of this letter, the terms of the security
documents shall govern.
ACCEPTANCE:
To
become
effective, this Agreement must be accepted in writing by CRA .
If
you
are in agreement with the above terms and conditions (which includes by
reference, all of those terms and conditions set forth in all of the attached
Schedules), please sign and return the enclosed copy of this letter together
with your cheque for $50,000.00, representing the commitment fee. This Agreement
will expire if not accepted by August 10, 2005.
The
foregoing Agreement is offered in good faith and is to be held in strict
confidence.
Yours
truly,
CANADIAN
WESTERN BANK
/s/
Xxxxx
X.
Xxxxxx
/s/ Xxx Xxxxx
Xxxxx
X.
Xxxxxx
Xxx Xxxxx
Assistant
Vice
President
Assistant Vice President
&
Branch
Manager
Commercial Banking
ACKNOWLEDGEMENT:
CRA
certifies that all information provided to the Bank is true and hereby accept
the terms and conditions set forth in the above Agreement (including all
Schedules attached thereto).
CRA:
Century
Resorts Alberta Inc.
Signed: Xxxxx
Xxxxxxxxx,
Secretary
Signed:
/s/ Xxxxx Xxxxxxxxx
Accepted:
August 4, 2005
Date
GUARANTORS
We
acknowledge receiving advice of the Agreement described above and agree our
guarantee is binding even if the Bank changes or waives compliance with the
terms of this Agreement.
Century
Casinos, Inc.
Signed:
Xxxxx
Xxxxxxxxxx,
Vice Chairman and Co CEO
Signed:
/s/ Xxxxx Xxxxxxxxxx
Accepted:
August 4, 2005
Date
SCHEDULE
“A” - TERM LOANS/MORTGAGES
SECURITY
All
security documentation described herein must be prepared, executed and
registered, as required by the Bank, prior to drawdown of any funds. The types
of security, supporting resolutions and agreements to be provided by CRA to
the
Bank will be in form and content satisfactory to the Bank and/or its solicitors,
and without restricting the generality of the foregoing, will
include:
| 1. |
Promissory
Notes as required;
|
| 2. |
Demand
Collateral First Mortgage Charge in the amount of $20,000,000.00
on real
property described in Section 3 and owned by CRA. The mortgage document
shall contain a “Due on Sale” clause, as well as a clause addressing the
appointment of a Receiver Manager of the property in the event of
default;
|
| 3. |
General
Security Agreement providing
a first security interest in all fixed assets, accounts receivable,
inventory and all present and after acquired
property
|
| 4. |
Assignment
of Rents and Leases, registered on
title;
|
| 5. |
Unconditional
and Unlimited Environmental Agreement and Indemnity (Form 1164) executed
by CRA.
|
| 6. |
A
joint and several $20,000,000.00 corporate guarantee and postponement
of
claim from Century Casinos, Inc. and 746306 Alberta
Ltd.
|
| 7. |
Specific
assignment of the Alberta Gaming and Liquor Commissions Casino License
(if
available).
|
| 8. |
Hypothecation
of the interest reserve account and the deposit account for the
Pre-opening costs and working capital costs duly registered at the
Alberta
Personal Property Registration.
|
| 9. |
Undertaking
by CRA and the Guarantors to fund all cost overruns as they
occur;
|
| 10. |
An
Assignment of Material Contracts including the general contractor
and
major subtrade contracts;
|
| 11. |
Assignment
of all risk Casualty and Liability insurance as set out under “Insurance”,
of the Agreement;
|
| 12. |
Letter
of Credit Application and Agreements and Assignment of Bank Instruments
registered at Personal Property Registry, as required.
|
| 13. |
Such
of the following supporting documents as may be required by the Bank’s
solicitors:
|
| (i) |
satisfactory
Real Property Report/Surveyor’s Certificate with respect to the mortgaged
property previously described in Section
2;
|
| (ii) |
satisfactory
Zoning or Building Memorandum, or Letter from applicable Zoning official
(Compliance Certificate), from the applicable municipal
authority;
|
| (iii) |
Tax
Certificate showing all property taxes and charges paid or a holdback
sufficient to pay taxes when due;
|
| (iv) |
standard
form documents relating to authorization of the borrowing and operation
of
the loan account;
|
| (v) |
Statutory
Declaration from CRA or the Officer or an officer of CRA as to residency,
title, use of premises, actions or claims and such other matters
as
Canadian Western Bank’s counsel may
advise;
|
| (vi) |
| (vii) |
Opinion
of counsel as to the events of default clauses included in this commitment
letter adhere to United States of America’s laws, rules and regulations
with respect to Century Casino’s,
Inc.
|
| (viii) |
opinion
of CRA’s counsel on the security and supporting documents and title to the
Property.
|
| 14. |
such
additional security instruments, assurances and supporting documents
(including legal opinion of CRA’s solicitor) as the Bank may deem
necessary or advisable for the purpose of obtaining and perfecting
the
foregoing security.
|
CRA
acknowledge and agrees to give the Bank other reasonable documents, assurances,
information and covenants as the solicitors for the Bank may reasonably require
with regard to the loan or the security documents to be given
hereunder.
SCHEDULE
“B” - TERM LOANS/MORTGAGES
INSURANCE
| 1. |
All
policies must show CRA as a named insured.
|
| 2. |
All
policies covering physical loss or damage (that is, property, builders
risk and boiler and machinery insurance) must be on a full replacement
cost basis and:
|
| (a) |
provide
coverage for all risks of physical loss or damage, including earthquake,
flood, sewer back-up and collapse;
|
| (b) |
include
insurance on the foundation and all parts below ground
level;
|
| (c) |
provide
in case of destruction:
|
| (i) |
that
reconstruction will not be limited to “on the same or an adjacent
site”;
|
| (ii) |
coverage
for increased costs of reconstruction through by-law and code changes
and
demolition and debris removal for damaged and undamaged property
and
resultant loss of income;
|
| (d) |
either
contain a stated amount co-insurance clause or not be subject to
co-insurance.
|
| 3. |
The
Bank is to be shown both as mortgagee and loss payee under all policies
covering physical loss or damage. Loss is to be payable using this
wording:
|
“CANADIAN
WESTERN BANK, 0000 - 00 Xxxxxx, Xxxxxxxx, Xxxxxxx X0X 0X0 as
first mortgagee
and loss payee.”
COVERAGE DURING CONSTRUCTION
| 1. |
The
property must be insured on an all builders risk a form providing
coverage
at least equivalent to the
following:
|
| (a) |
coverage
for 100% of total hard construction
costs;
|
| (b) |
coverage
for an amount in respect of soft costs that is acceptable to the
Bank but
which is in any event not less than 25% of total soft
costs;
|
| (c) |
delayed
income for a limit representing 100% of the anticipated annual revenue
from the property (assuming full
occupancy);
|
| (d) |
permission
for partial or full occupancy.
|
| 2. |
Contractor’s
Liability Insurance for bodily injury and/or death and damage to
property
of others in an amount acceptable to the Bank but in any case not
less
than $5,000,000 for any one occurrence shall be in place and shall
cover
construction operations at the project site. CRA and Bank are to
be shown
as Additional Insured.
|
| 3. |
Wrap-up
Liability is required for projects with a construction cost greater
than
$10,000,000. The insurance shall have a limit of not less than $10,000,000
and shall cover CRA, all contractors, sub-contractors and
suppliers.
|
| 4. |
Evidence
of Professional Liability Insurance maintained by the Project architects
and engineers is required.
|
| 5. |
Performance
and Labour and Material Payment Bonds are required in an amount not
less
than 50% of the total contract price. The Bank is to be shown as
a Dual
Obligee.
|
SCHEDULE “B-1”
CANADIAN
WESTERN BANK
INSURANCE REQUIREMENTS FOR REAL ESTATE LOANS
ALL
POLICIES MUST BE REVIEWED AND APPROVED, BEFORE THE FIRST LOAN ADVANCE, BY THE
BANK’S INSURANCE CONSULTANT:
INTECH
RISK MANAGEMENT LTD.
000
Xxxxxxxxxx Xxxxxx, 00xx
Xxxxx
Toronto,
Ontario M5G 1V2
Attention:
Xxxx Xxxxxx
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
email: Xxxxxxx@xxxxxxxxxx.xxx
So
that there is no delay in funding because of changes needed to insurance
policies, please give a copy of this Schedule to your insurance broker and
ask
that the coverages described below be issued immediately and proof forwarded
to
Intech Risk Management Ltd. for review purposes.
GENERAL
REQUIREMENTS
| 1. |
These
Insurance Requirements outline only the protection required for the
Bank’s
interests. CRA’s interests will be different than the Bank’s and CRA must
obtain its own advice as to appropriate coverages and
details.
|
| 2. |
The
forms, insurers, coverages, amounts, exclusions and deductibles are
always
subject to the Bank’s descretion, having regard to the nature, location,
value and risks of the Project. Without restricting that discretion,
the
Bank may require coverages not specifically mentioned or required,
such as
but not limited to, terrorism and pollution
insurance.
|
| 3. |
Original
policies and signatures on behalf of the insurer are required. The
insurer(s), policy number(s) and policy term(s) must be shown on
all
insurance documentation. If actual policies are not available for
the
initial loan advance signed Binders or Certificates of Insurance
will be
accepted, provided the form and contents are satisfactory. NB:
CS10-form, Xxxxx Form 25 or their equivalents are not
acceptable.
|
| 4. |
All
policies must show CRA as a named
insured.
|
| 5. |
All
policies covering physical loss or damage (that is, property, builders
risk and boiler and machinery insurance) must be on a full replacement
cost basis and:
|
| (a) |
provide
coverage for all risks of physical loss or damage, including earthquake,
flood, sewer back-up and collapse;
|
| (b) |
include
insurance on the foundation and all parts below ground
level;
|
| (c) |
provide
in case of destruction:
|
| (i) |
that
reconstruction will not be limited to “on the same or an adjacent
site”;
|
| (ii) |
coverage
for increased costs of reconstruction through by-law and code changes
and
demolition and debris removal for damaged and undamaged property
and
resultant loss of income;
|
| (d) |
either
contain a stated amount co-insurance clause or not be subject to
co-insurance.
|
| 6. |
The
Bank is to be shown both as mortgagee and loss payee under all policies
covering physical loss or damage. Loss is to be payable using this
wording:
|
“CANADIAN
WESTERN BANK, 0000 - 00 Xxxxxx, Xxxxxxxx, Xxxxxxx X0X 0X0 as
first
mortgagee
and loss payee.”
and
a
standard IAO mortgage clause must be part of the policy.
| 7. |
The
insurer may reserve the right to cancel the policy as permitted by
statute
but must agree that it will not terminate, make any adverse material
change or otherwise alter the policy to the Bank’s prejudice except by
registered letter giving 30 days notification to the
Bank.
|
| 8. |
The
legal description of the property insured must be specified. Municipal
address alone is not acceptable.
|
| 9. |
Commercial
General Liability Insurance for bodily injury and/or death and damage
to
property of others in an amount acceptable to the Bank but in any
case not
less than $5,000,000 for any one occurrence shall
be in place for all loans.
The Bank is to be shown as an Additional Insured under all Liability
Insurance policies. At the option of the Bank, the policy shall include
limited pollution liability (IBC 2313 or equivalent wording) to cover
sudden and accidental pollutants and smoke from a hostile
fire.
|
COVERAGE
DURING CONSTRUCTION
| 1. |
The
property must be insured on an all risk builders risk a form providing
coverage at least equivalent to the
following:
|
| (a) |
coverage
for 100% of total hard construction
costs;
|
| (b) |
coverage
for an amount in respect of soft costs that is acceptable to the
Bank but
which is in any event not less than 25% of total soft
costs;
|
| (c) |
delayed
income for a limit representing 100% of the anticipated annual revenue
from the property (assuming full
occupancy);
|
| (d) |
permission
for partial or full occupancy.
|
| 2. |
Contractor’s
Liability Insurance for bodily injury and/or death and damage to
property
of others in an amount acceptable to the Bank but in any case not
less
than $2,000,000 for any one occurrence shall be in place and shall
cover
construction operations at the project site. CRA(s) and Bank are
to be
shown as Additional Insureds.
|
| 3. |
Wrap-up
Liability is required for projects with a construction cost greater
than
$10,000,000. The insurance shall have a limit of not less than $10,000,000
and shall cover CRA, all contractors, sub-contractors and
suppliers.
|
| 4. |
Evidence
of Professional Liability Insurance maintained by the Project architects
and engineers is required.
|
| 5. |
Performance
and Labour and Material Payment Bonds are required in an amount not
less
than 50% of the total contract price. The Bank is to be shown as
a Dual
Obligee.
|
ON
COMPLETION OF PROJECT
| 1. |
All
Risk coverage equivalent to the IAO Commercial Building Form
(CBF).
|
| 2. |
Broad
form boiler insurance for explosion, electrical and mechanical breakdown
covering pressure vessels, air-conditioning equipment, miscellaneous
electrical apparatus (and production machinery where applicable)
and
providing comprehensive coverage for repair and replacement and use
and
occupancy. A joint loss agreement must be provided if the insurer
is
different than the all risks
insurer.
|
| 3. |
Rental
insurance coverage sufficient to cover 100% of the projected gross
annual
rents and, if on a net basis, the equivalent gross rentals, for a
minimum
period of one year.
|
SCHEDULE
“C” - TERM LOANS/MORTGAGES
CONDITIONS
PRECEDENT TO DRAWDOWN
The
following conditions must be fulfilled prior to draw down of Loan Facility
1:
| 1. |
The
Bank shall be satisfied with the business assets and financial condition
of CRA and all security documentation and supporting agreements and
documents must be completed in a form satisfactory to the Bank and
its
solicitors, and must be executed and registered as appropriate, and
the
Bank shall have received a solicitor’s letter of opinion with respect to
same;
|
| 2. |
The
Bank shall be provided with a transmittal letter from Colliers
International indicating that their June 2005 appraisal of the subject
property may be relied on for information
purposes.
|
| 3. |
CRA
shall cause to be conducted environmental assessments, audit and
other
inspections with respect to the mortgaged property and the business
of CRA
and the obligation of the Bank to advance funds hereunder shall be
subject
to the Bank receiving reports prepared by a Bank approved Environmental
Consultant, satisfactory to the Bank in its sole discretion and subject
to
the Bank being satisfied in its sole discretion that there are no
environmental matters that are adverse to the value of the mortgage
property or the business of CRA.
|
| 4. |
It
is the intention of this commitment letter to fund all certified
budgeted
development costs, over and above the equity requirement, as determined
by
the Banks cost consultant, providing the total certified development
costs
do not exceed the total authorized costs. CRAs equity requirement
shall be
free and clear of any financial charges. No secondary financing shall
be
permitted under this program without the express written consent
of the
Bank. The Bank acknowledges and agrees to the Century Casinos, Inc.
securing a portion of their investment as a secondary charge against
the
subject property, subject to a satisfactory review of the terms and
conditions of the charge, providing that the charge is fully postponed
to
the Bank debt.
|
| 5. |
CRA
shall provide to the Bank along with acceptance of this commitment
letter
a preliminary construction budget detailing all land, servicing,
hard and
soft construction costs.
|
| 6. |
CRA
shall provide to the Bank, prior to the initial advance of funds,
a final
cost budget, certified by the Banks Cost Consultant. Progress draws
shall
be accompanied by a Progress Claim approved by CRA and certified
by the
Banks Cost Consultant detailing the original budget, the present
budget,
the percent complete, the work in place, the costs to complete and
the
value of the amount being claimed. Prior to each advance each Property
Titles shall be search at Alberta Land Titles to ensure that no liens
have
been registered on title. Such searches shall be conducted by the
Bank but
at the Borrowers Expense. Each
progress claim shall be accompanied by a Statutory Declaration. Progress
draws shall be for not less than $50,000 and shall be available no
more
than once a month. Requests for advance must be accompanied by invoices
evidencing the costs being claimed. Progress draws shall be calculated
on
a cost to complete basis, i.e. sufficient loan amounts will at all
times
be available to complete the Celebrations Casino. Should at any time,
it
be determined that cost overruns have resulted in the remaining authorized
loan amount being insufficient to complete the Celebrations Casino,
CRA
and guarantors shall, upon notice, invest sufficient equity to cover
the
cost overruns.
|
| 7. |
CRA
shall provide to the Bank a satisfactory final cost breakdown, certified
by an acceptable construction cost consultant. The cost consultant
is to
be appointed by the Bank with all costs to CRA’s
account.
|
| 8. |
CRA
shall have entered into fixed price contracts for all major components
of
construction. The sub-contracts are to be at least 50% bonded or
satisfactory evidence of the financial ability of the contractors
is to be
provided. Any major change order in excess of $10,000 to these contracts
will be subject to written approval by the Bank. Copies of all such
Celebrations Casino contracts are to be provided to the Bank prior
to the
initial Advance of Funds
|
| 9. |
CRA
shall establish and maintain with the Bank an operating account for
the
Celebrations Casino, through which all cash flows generated by the
Celebrations Casino shall be processed at terms and conditions reasonably
competitive in Alberta.
|
| 10. |
CRA
is to deposit the $3,294,685 required for working capital and Pre-opening
costs into a hypothecated deposit account at Canadian Western Bank
prior
to first draw of the construction loan. No more than twice per month,
draws may be released based on a signed direction to pay by the Borrower
detailing the original budget, the budget YTD, identifying the budgeted
amount required and confirming sufficient draw amounts will at all
times
be available to complete the Pre-opening Costs and fund the start
up
working capital.
|
| 11. |
CRA
shall provide servicing plans and specifications, together with all
the
necessary building permits and development agreements required for
the
development and completion of the Celebrations
Casino;
|
| 12. |
The
Bank shall be satisfied as to the zoning of the Celebrations Casino
and
the availability of all municipal and regulatory permits and approvals
required for the operation of the Celebrations
Casino.
|
| 13. |
Any
participation by way of equity, shareholders’ loan, or other cash
injection required under the terms of this agreement must be in place.
The
Borrower shall provide to the Bank written confirmation as to the
sources
of funds being used to meet the proposed equity
requirements.
|
| 14. |
The
Bank reserves the sole and absolute right to syndicate part or all
of the
loan facility contemplated herein, with various syndication partners
with
whom the Bank syndicates loans from time to time, on terms and conditions
satisfactory to the Bank;
|
| 15. |
The
Bank will require two (2) full business days prior written notice
of
disbursement.
|
The
following conditions must be fulfilled prior to draw down of Loan Facility
2:
| 1. |
CRA
is to have posted the substantial completion certificate and the
builders
lien period shall have expired, the architect shall have certified
the
Celebrations Casinos as complete and the occupancy certificate and
Casino
License shall have been issued.
|
| 2. |
The
proceeds of this loan advance will retire the outstanding construction
advances of Loan Facility 1.
|
SCHEDULE
“D” - TERM LOANS/MORTGAGES
GENERAL
CONDITIONS
CRA
agrees:
| 1. |
no
Event of Default has occurred and is
continuing;
|
| 2. |
the
Loan Maturity Date has not
occurred;
|
| 3. |
the
conditions of this Agreement and of all previous advances have been
satisfied or waived;
|
| 4. |
to
maintain a “Cash Flow Coverage Ratio” of not less than 1.20
times, tested annually commencing based on the Borrowers audited
annual
accountant prepared financial statements. Cash Flow coverage ratio
shall
be defined as the Borrowers EBITDA less capital expenditures not
funded by
debt (current construction budget exempted), divided by the annual
total
fixed charge principal due in the next twelve months and the current
years
interest expense.
|
| 5. |
no
other loans may be secured against the Celebrations Casino, except
the
Subordinate Mortgages satisfactory to the Bank and, at CRA’s option, a
mortgage to secure CRA’s Equity contributed by the Guarantor or other
affiliate of CRA, provided such mortgage is fully subordinated to
the
Security and supporting documents in accordance with a Priority and
Standstill Agreement;
|
| 6. |
the
Bank’s opinions, approvals and decisions are in its sole discretion and
are not subject to judicial review as to their
reasonableness;
|
| 7. |
CRA
shall remain the sole registered and beneficial owner of the Celebrations
Casino until the Loan has been repaid in full, unless otherwise approved
by the Bank;
|
| 8. |
to
maintain adequate insurance on the property and acknowledges that
failure
to do so will hereby authorize the Bank to purchase insurance to
protect
the Bank’s interest in the Celebrations Casino to the value of the
outstanding loan/mortgage. CRA authorizes the Bank to add the cost
of said
insurance to the loan/mortgage
balance.
|
EVENTS
OF DEFAULT:
| 1. |
The
full amount of the indebtedness and liability of CRA then outstanding,
together with accrued interest and any other charges then owing by
CRA to
the Bank shall, at the option of the Bank, forthwith be accelerated
and be
due and payable, and upon being declared to be due and payable, the
securities shall immediately become enforceable and the Bank may
proceed
to realize and enforce the same upon the occurrence and during the
continuance of any of the following events or circumstances (which
events
or circumstances are herein referred to as the “Events of
Default”):
|
| (a) |
CRA
or any Guarantor fails to make due, whether on demand or at a fixed
payment date, by acceleration or otherwise any payment of interest,
principal, fees, commissions or other amounts payable to the
Bank;
|
| (b) |
there
is a breach by CRA of any other term or condition contained in this
Agreement or in any other agreement to which CRA and the Bank are
parties
and CRA has not corrected such breach within 30 days of notice having
been
provided to CRA;
|
| (c) |
any
default occurs under the terms of any security to be provided in
accordance with this Agreement or under any other credit, loan or
security
agreement to which CRA are party and CRA have not corrected such
breach
within 30 days of notice having been provided to
CRA;
|
| (d) |
any
bankruptcy, re-organization, compromise, arrangement, insolvency
or
liquidation proceedings or other analogous proceedings are instituted
by
or against CRA and, if instituted against CRA are allowed against
or
consented to by CRA or are not dismissed or stayed within 60 days
after
such institution;
|
| (e) |
a
receiver is appointed over any property of CRA or any judgement or
order
or any process of any court becomes enforceable against CRA or any
property or any creditor takes possession of any property of
CRA;
|
| (f) |
any
adverse change occurs in the financial condition of CRA or any
Guarantor;
|
| (g) |
any
adverse change occurs in the environmental condition
of:
|
| (i) |
CRA,
or
|
|
|
| (iii) |
any
property, equipment, or business activities of
CRA.
|
| (h) |
CRA
acknowledges that failure by any Guarantor of this Agreement to comply
with the disclosure requirements set out in Section 45 of the Business
Corporations Act (BCA) of Alberta shall constitute a default of CRA
pursuant to this Agreement.
|
MISCELLANEOUS
CONDITIONS:
| 1. |
The
rights and remedies of the Bank pursuant to this Agreement and the
securities taken pursuant hereto are cumulative and not alternative,
and
not in substitution for any other rights, remedies, or power of the
Bank.
|
| 2. |
Any
failure or delay by the Bank to exercise, or exercise fully, its
rights
and remedies pursuant to this Agreement and the securities taken
pursuant
hereto shall not be construed as a waiver of such rights and
remedies.
|
| 3. |
In
the absence of a formal Loan Agreement being entered into, this Agreement
shall continue in full force and effect and shall not merge in any
securities provided by CRA to the
Bank.
|
| 4. |
This
Agreement and the security documentation to be provided by CRA pursuant
hereto shall be construed in accordance with and governed by the
laws of
the Province of Alberta.
|
)
SCHEDULE
“E” - TERM LOANS/MORTGAGES
REPORTING
REQUIREMENTS
CRA
agrees to provide the following information to the Bank:
| 1. |
The
annual audited financial statements of CRA prepared by a firm of
qualified
professional accountants (minimum standard - Review Engagement Report)
within 90 days
of CRA’s fiscal year-end, together with the annual Review Engagement
Report financial statements of 746306 Alberta Ltd. and the 10K filing
for
Century Casinos, Inc..
|
| 2. |
The
annual budget/cash flow projections along with their annual financial
statements.
|
| 3. |
Monthly
internally prepared interim financial statements with 25 days of
each
month end.
|
| 4. |
Provide
the Bank with written advice of any change in shareholders representing
more than 5% of the outstanding shares of CRA or the
guarantors.
|
| 5. |
Annual
confirmation that the current years property taxes have been paid
by July
25th
each year.
|
| 6. |
Copy
of the Alberta Gaming and Liquor Commission license, and annual
renewal/licenses.
|
| 7. |
Copies
of any notices sent by AGLC of any changes, amendments, breaches,
or
defaults under the AGLC license.
|
| 8. |
any
further information, data, financial reports and records, accounting
or
banking statements, certificates, evidence of insurance and other
assurances which the Bank may from time to time require in its sole
discretion, acting reasonably.
|
SCHEDULE
“F” - TERM LOANS/MORTGAGES
SCHEDULE
- STANDARD LOAN TERMS
ARTICLE
1 - GENERAL
| 1.1. |
Interest
Rate.
You will pay interest on each Loan at nominal rates per year at the
rate
specified in this Agreement.
|
| 1.2. |
Floating
rate of interest.
Each floating rate of interest provided for under this Agreement
will
change automatically, without notice, whenever the Bank’s Prime Rate or
the U.S. Base Rate, as the case may be,
changes.
|
| 1.3. |
Payment
of interest. Interest
is calculated on the daily balance of the Loan at the end of each
day.
Interest is due once a month, unless the Agreement states otherwise.
Unless you have made other arrangements with us, we will automatically
debit your Operating Account for interest amounts owing. If your
Operating
Account is in overdraft and you do not deposit to the account an
amount
equal to the monthly interest payment, the effect is that we will
be
charging interest on overdue interest (which is known as compounding).
Unpaid interest continues to compound whether or not we have demanded
payment from you or started a legal action, or get judgment, against
you.
|
| 1.4. |
Fees.
You
will pay the Bank’s fees for the Loans as outlined in the Agreement. You
will also reimburse us for all reasonable fees (including legal fees
on a
solicitor and his own client basis) and out-of-pocket expenses incurred
in
registering any security, and in enforcing our rights under this
Agreement
or any security. We will automatically debit your Operating Account
for
fee amounts owing.
|
| 1.5. |
Our
rights re demand Loans.
We
believe that the banker-customer relationship is based on mutual
trust and
respect. It is important for us to know all the relevant information
(whether good or bad) about your business. Canadian Western Bank
is itself
a business. Managing risks and monitoring our customers’ ability to repay
is critical to us. We can only continue to lend when we feel that
we are
likely to be repaid. As a result, if you do something that jeopardizes
that relationship, or if we no longer feel that you are likely to
repay
all amounts borrowed, we may have to act. We may decide to act, for
example, because of something you have done, information we receive
about
your business, or changes to the economy that affect your business.
Some
of the actions that we may decide to take include requiring you to
give us
more financial information, negotiating a change in the interest
rate or
fees, or asking you to get further accounting assistance, put more
cash
into the business, provide more security, or produce a satisfactory
business plan. It is important to us that your business succeeds.
We may
demand immediate repayment of any outstanding amounts under any demand
Loan. We may also, at any time and for any cause, cancel the unused
portion of any demand Loan.
|
| 1.6. |
Payments.
If
any payment is due on a day other than a Business Day, then the payment
is
due on the next Business Day.
|
| 1.7. |
Applying
money received.
If
you have not made payments as required by this Agreement, or if you
have
failed to satisfy any term of this Agreement (or any other agreement
you
have that relates to this Agreement), or at any time before default
but
after we have given you appropriate notice, we may decide how to
apply any
money that we receive. This means that we may choose which Loan to
apply
the money against, or what mix of principal, interest, fees and overdue
amounts within any Loan will be
paid.
|
| 1.8. |
Information
requirements.
We
may from time to time reasonably require you to provide further
information about your business. We may require information from
you to be
in a form acceptable to us.
|
| 1.9. |
Insurance.
You
will keep all our business assets and property insured (to the full
insurable value) against loss or damage by fire and all other risks
usual
for property such as yours (plus for any other risks we may reasonably
require). If we request, these policies will include a loss payee
clause
(and if you are giving us mortgage security, a Standard Mortgagee
Clause).
As further security, you assign all insurance proceeds to us. If
we ask,
you will give us either the policies themselves or adequate evidence
of
their existence. If your insurance coverage for any reason stops,
we may
(but do not have to) insure the property. We will automatically debit
your
Operating Account for this amount. In the event there are no funds
on
deposit, we may add the insurance cost to your Loan. Finally, you
will
notify us immediately of any loss or damage to the
property.
|
| 1.10. |
Environmental
Matters.
You will carry on your business, and maintain your assets and property,
in
accordance with all applicable environmental laws and regulations.
If (a)
there is any release, deposit, discharge or disposal of pollutants
of any
sort (collectively, a “Discharge”) in connection with either your business
or your property, and we pay any fines or for any clean-up, or (b)
we
suffer any loss or damage as a result of any Discharge, you will
reimburse
the Bank, its directors, officers, employees and agents for any and
all
losses, damages, fines, costs and other amounts (including amounts
spent
preparing any necessary environmental assessment or other reports,
or
defending any lawsuits) that result. If we ask, you will defend any
lawsuits, investigations or prosecutions brought against the Bank
or any
of its directors, officers, employees and agents in connection with
any
Discharge. Your obligation to us under this section continues even
after
all Loans have been repaid and this Agreement has
terminated.
|
| 1.11. |
Consent
to release information.
We
may from time to time give any loan or other information about you
to, or
receive such information from, (a) any financial institution, credit
reporting agency, rating agency or credit bureau, (b) any person,
firm or
corporation with whom you may have or propose to have financial dealings,
and (c) any person, firm or corporation in connection with any dealings
you have or propose to have with us. You agree that we may use that
information to establish and maintain your relationship with us and
offer
any services as permitted by law, including services and products
offered
by our subsidiaries when it is considered that this may be suitable
to
you.
|
| 1.12. |
Proof
of debt.
This Agreement provides the proof, between the Bank and you, of the
loans
made available to you. There may be times when the type of loan you
have
requires you to sign additional documents. Throughout the time that
we
provide you loans under this Agreement, our loan accounting records
will
provide complete proof of all terms and conditions of your loan (such
as
principal loan balances, interest calculations, and payment
dates).
|
| 1.13. |
Renewals
of this Agreement.
This Agreement will remain in effect for your Loans for as long as
they
remain unchanged. If there are no changes to the Loans this Agreement
will
continue to apply, and you will not need to sign anything further.
If
there are any changes, we will provide you with either an amending
agreement, or a new replacement Letter, for you to
sign.
|
| 1.14. |
Confidentiality.
The terms of this Agreement are confidential between you and the
Bank. You
therefore agree not to disclose the contents of this Agreement to
anyone
except your professional advisors and where required by
law.
|
| 1.15. |
Pre-conditions.
You may use the Loans granted to you under this Agreement only
if:
|
| (a) |
we
have received properly signed copies of all documentation that we
may
require in connection with the operation of your accounts and your
ability
to CRA and give security;
|
| (b) |
all
the required security has been received and registered to our
satisfaction;
|
| (c) |
any
special provisions or conditions set forth in the Agreement have
been
complied with; and
|
| (d) |
if
applicable, you have given us the required number of days notice
for a
drawing under a Loan.
|
| 1.16. |
Notices.
We
may give you any notice in person or by telephone, or by letter that
is
sent either by fax or by mail.
|
| 1.17. |
Non-Revolving
Loans.
The following terms apply to each Non-Revolving
Loan:
|
| (a) |
Non-revolving
Loans.
Unless otherwise stated in the Agreement, any principal payment made
permanently reduces the available Loan Amount. Any payment we receive
is
applied first to overdue interest, then to current interest owing,
then to
overdue principal, then to any fees and charges owing, and finally
to
current principal.
|
| (b) |
Floating
Rate Non-Revolving Loans.
Floating Rate Loans may have either (i) blended payments or (ii)
payments
of fixed principal amounts, plus interest as described
below:
|
| (i) |
Blended
payments.
If
you have a Floating Rate Loan that has blended payments, the amount
of
your monthly payment is fixed for the term of the loan, but the interest
rate varies with changes in the Prime Rate or U.S. Base Rate (as
the case
may be). If the Prime Rate or U.S. Base Rate during any month is
lower
than what the rate was at the outset, you may end up paying off the
loan
before the scheduled end date. If, however, the Prime Rate or U.S.
Base
Rate is higher than what it was at the outset, the amount of principal
that is paid off is reduced. As a result, you may end up still owing
principal at the end of the term because of these changes in the
Prime
Rate or U.S. Base Rate. We will advise you from time to time of any
changes in the blended payment necessary to maintain the original
amortization period, should we chose to do
so.
|
| (ii) |
Payments
of fixed principal plus interest.
If
you have a Floating Rate Loan that has regular principal payments,
plus
interest, the principal payment amount of your Loan is due on the
payment
date specified in the Agreement. Although the principal payment amount
is
fixed, your interest payment will usually be different each month,
for at
least one and possibly more reasons, namely: the reducing principal
balance of your loan, the number of days in the month, and changes
to the
Prime Rate or U.S. Base Rate (as the case may
be).
|
| (c) |
Demand
of Fixed Rate Term.
If
you have a Fixed Rate Term Loan and we make demand for payment, you
will
owe us (i) all outstanding principal, (ii) interest, (iii) any other
amount due under this Agreement, and (iv) a prepayment charge. The
prepayment charge is equal to the greater of three (3) months interest
calculated on the unpaid balance at the rate authorized or the Bank’s
Unwinding Costs.
|
ARTICLE
2 - DEFINITIONS
| 2.1. |
Definitions.
In
this Agreement, the following terms have the following
meanings:
|
“Agreement”
means
the letter agreement between you and Canadian Western Bank to which this
Schedule and any other Schedules are attached.
“Business
Day”
means
any day (other than a Saturday or a Sunday) that the CWB Branch/Centre is open
for business.
“Cash
Collateral Account”
means
funds on deposit held by the Bank in an interest bearing account pending
satisfaction of certain terms and/or conditions.
“Customer
Automated Funds Transfer (CAFT)”
is a
WEB based service that provides non-personal customers the ability to make
multiple electronic transactions for purposes of direct deposit for payroll
or
direct payment of accounts payable.
“CWB
Branch/Centre”
means
the Canadian Western Bank branch or banking centre noted on the first page
of
this Agreement, as changed from time to time by agreement between the
parties.
“Demand
Non-Revolving Loan”
means an
installment loan that is payable upon demand. Such a Loan may be either at
a
fixed or a floating rate of interest.
“Fixed
Rate Loan”
means
any loan drawn down, converted or extended under a Loan at an interest rate
which was fixed for a term, instead of referenced to a floating rate such as
the
Prime Rate or U.S. Base Rate, at the time of such drawdown, conversion or
extension.
“Intangibles”
means
assets of the business that have no value in themselves but represent value.
They include such things as copyright, goodwill, patents and trademarks;
franchises, licenses, leases, research and development costs, and deferred
development costs.
“Lease-Up
Reserve”
means
the amount of the Loan that is funded into a Cash Collateral Account pending
lease-up of the Celebrations Casino in accordance with the Loan
authorization.
“Letter
of Credit”
or
“L/C”
means a
documentary or stand-by Letter of Credit, a Letter of Guarantee, or a similar
instrument in form and substance satisfactory to us.
“Lien”
includes
a mortgage, charge, lien, security interest or encumbrance of any sort on an
asset, and includes conditional sales contracts, title retention agreements,
capital trusts and capital leases.
“Loan”
means
any loan facility referred to in the Agreement and if there are two or more
facilitys, “Loan” includes reference to each facility.
“Loan
Amount”
of any
Loan means the amount specified in the Agreement and if there are two or more
facilitys, “Loan Amount” includes reference to each facility.
“Loan
Maturity Date”
means
the date the loan is to be repaid or extended by for further term, at the option
of the Bank.
“Mandatory
Capital Expenditures”
means
net capital expenditures incurred by you not financed by long term debt. Net
capital expenditures means all capitalized fixed asset purchases less fixed
asset sales.
“Normal
Course Lien”
means a
Lien that (a) arises by operation of law or in the ordinary course of business
as a result of owning any such asset (but does not include a Lien given to
another creditor or to secure debts owed to that Loan) and (b) taken together
with all other Normal Course Liens, does not materially affect the value of
the
asset or its use in the business.
“Operating
Account”
means
the account that you normally use for the day-to-day cash needs of your
business, and may be either or both of a Canadian dollar and a U.S. dollar
account.
“Postponed
Debt”
means
any debt owed by you that has been formally postponed to the Bank.
“Prime
Rate”
means
the variable reference rate of interest per year declared by the Bank from
time
to time to be its prime rate for Canadian dollar loans made by the Bank in
Canada.
“Principal
Sum”
means
the loan balance outstanding.
“Priority
Claims”
means
priorities that are created when a CRA does not remit monies due for Income
Tax,
Workers Compensation, Canada Pension Plan, Employment Insurance, GST, Provincial
Sales Tax, wage claims including unpaid holiday entitlement, unpaid utility
bills and arrears of rent for business premises. These are considered to be
deemed trust and rank in priority to all security interests.
“Purchase
Money Lien”
means a
Lien incurred in the ordinary course of business only to secure the purchase
price of an asset, or to secure debt used only to finance the purchase of the
asset.
“Shareholders’
Equity”
means
paid-in capital, retained earnings and attributed or contributed
surplus.
“Standard
Overdraft Rate”
means
the variable reference interest rate per year declared by the Bank from time
to
time to be its standard overdraft rate on overdrafts in Canadian or U.S. dollar
accounts maintained with the Bank in Canada.
“Tangible
Net Worth”
means
the total Shareholders’ Equity, minus (a) amounts due from/investments in
related parties, and the value of all intangibles, plus (b) all postponed
debt.
“Unwinding
Costs”
means
the costs the Bank incurs when a fixed rate loan is paid out early. The
unwinding costs are based on an interest rate differential between the loan
rate
and the bid side yield for Government of Canada securities with the same
maturity as the loan, for the remaining term of the loan at the time of
repayment.
“U.S.
Base Rate”
means
the variable reference rate of interest per year as declared by the Bank from
time to time to be its base rate for U.S. dollar loans made by the Bank in
Canada.
Canadian
Western Bank
September
8, 2005
Century
Resorts Alberta Inc.
0000
X
Xxxx Xxxxx Xxxxx
Colorado
Springs, Colorado
80906
ATTENTION:
Xx.
Xxxxx Xxxxxxxxx
Dear
Sir:
RE: Amendment
to the August 3, 2005 Commitment to Provide Construction and Takeout Financing
for the Development of the Celebrations Casino in Edmonton
The
Canadian Western Bank is pleased to advise that we have authorized to the
following revised terms and conditions to our August 3, 2005 Commitment
Letter:
Amendment
1.0 - Guarantee -
|
The
requirement for a $20,000,000.00 joint and several guarantee and
postponement of claim from Century Casinos, Inc. and 746306 Alberta
Ltd as
detailed in Schedule A, item 6, shall be amended to a $20,000,000.00
guarantee and postponement of claim from Century Casinos,
Inc.
|
All
other
terms and conditions of the August 3, 2005 Commitment Letter remain
unchanged.
Yours
truly,
CANADIAN
WESTERN BANK
/s/ Xxxxx X.
Xxxxxx
/s/ Xxx Xxxxx
Xxxxx X.
Xxxxxx
Xxx Xxxxx
Assistant Vice
President Assistant
Vice President
and Branch
Manager Commercial
Banking
Agreed
to and Accepted this 10th day
of September
A.D. 2005.
BORROWER:
CENTURY
RESORTS ALBERTA LTD.
PER:
/s/ Xxxxx Xxxxxxxxxx
September 9,
2005
Xxxxx Xxxxxxxxx,
Secretary
PER:
GUARANTOR: CENTURY
CASINOS, INC.
PER:
/s/ Xxxxx Xxxxxxxxxx
September 10,
2005
Xxxxx Xxxxxxxxxx,
Vice Chairman and Co CEO
PER:
September
21, 2005
Century
Resorts Alberta Inc.
0000
X
Xxxx Xxxxx Xxxxx
Colorado
Springs, Colorado
80906
ATTENTION:
Xx.
Xxxxx Xxxxxxxxx
Dear
Sir:
RE: Amendment
to the August 3, 2005 Commitment to Provide Construction and Takeout Financing
for the Development of the Celebrations Casino in Edmonton
The
Canadian Western Bank is pleased to advise that we have authorized to the
following revised terms and conditions to our August 3, 2005 Commitment Letter
and the September 8, 2005 amendment to the August 3, 2005 Commitment Letter
:
Amendment
1.0 - Non Merger Clause -
The
Non
Merger Clause contained on page 6 of the commitment letter, item number 21
shall
be amended as follows;
The
terms
and conditions set out herein shall not be superseded by nor merge in and shall
survive the execution, delivery and/or registration of any instruments of
security or evidences of indebtedness granted by CRA hereafter, and the
advancement of any funds by the Bank. In the event of a conflict between the
security documents and the terms of this letter, the terms of the commitment
letter and the amendments to the commitment letter shall govern.
Amendment
2.0 - Schedule “D” amendments -
The
events of default shall be amended as follows;
f)
any
material adverse change occurs in the financial condition of CRA or any
Guarantor;
g)
any
material adverse change occurs in the environmental condition of:
| (i) |
CRA,
or
|
| (ii) |
any
property, equipment, or business activities of
CRA.
|
|
|
All other terms and conditions of the August 3, 2005 Commitment Letter and the September 8, 2005 amendment to the August 3, 2005 Commitment Letter remain unchanged.
Yours
truly,
CANADIAN
WESTERN BANK
/s/ Xxxxx X. Xxxxxx /s/ Xxx Xxxxx
Xxxxx
X.
Xxxxxx
Xxx Xxxxx
Assistant
Vice
President
Assistant Vice President
and
Branch
Manager
Commercial Banking
Agreed
to and Accepted this 23rd day
of September,
A.D. 2005.
BORROWER:
CENTURY
RESORTS ALBERTA LTD.
PER:
/s/ Xxxxx Xxxxxxxxx
September 23,
2005
Xxxxx Xxxxxxxxx,
Secretary
PER:
GUARANTOR: CENTURY
CASINOS, INC.
PER:
/s/ Xxxxx Xxxxxxxxxx
September 23,
2005
Xxxxx Xxxxxxxxxx, Vice
Chairman and Co CEO
PER:
