SUBORDINATION, CESSION AND PLEDGE AGREEMENT
1 PARTIES
1.1 The parties to this agreement are ~
1.1.1 PSG Investment Bank Limited;
1.1.2 Century Casinos Africa (Proprietary) Limited;
1.1.3 Caledon Overberg Investments (Proprietary) Limited;
1.1.4 Caledon Casino Bid Company (Proprietary) Limited; and
1.1.5 Xxxxxx Xxxx Hospitality (Proprietary) Limited.
1.2 The parties agree as set out below.
2 INTERPRETATION
2.1 In this agreement, unless inconsistent with or otherwise
indicated by the context ~
2.1.1 "THE/THIS AGREEMENT" means the agreement as set out herein,
together with all appendices hereto;
2.1.2 "THE CASINO MANAGEMENT AGREEMENT" means the Casino
management agreement concluded between the Company and
Century on 3 December 1999;
2.1.3 "CENTURY" means Century Casinos Africa (Proprietary) Limited,
a private company duly incorporated in accordance with
the Company
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laws of the Republic of South Africa, with registration
number 96/10501/07;
2.1.4 "COIL" means Caledon Overberg Investments (Proprietary) Limited,
a private company duly incorporated in accordance with the Company
laws of the Republic of South Africa, with registration number
96/06728/07;
2.1.5 "THE COMPANY" means Caledon Casino Bid Company (Proprietary)
Limited, a private company duly incorporated in accordance
with the Company laws of the Republic of South Africa, with
registration number 96/010708 /07;
2.1.6 "THE EFFECTIVE DATE" means, notwithstanding the date on
which this agreement is signed by the party signing last in time,
the effective date of the loan agreement;
2.1.7 "FINAL DATE" means the final date as defined in the loan
agreement;
2.1.8 "XXXXXX" means Xxxxxx King Hospitality (Proprietary) Limited, a
private company duly incorporated in accordance with the Company
laws of the Republic of South Africa, with registration number
80/00096/07;
2.1.9 "THE HOTEL MANAGEMENT AGREEMENT" means the hotel management
agreement entered into between the Company and Xxxxxx on
3 December 1999;
2.1.10 "THE LOAN AGREEMENT" means the loan agreement to be concluded
between PSGIB and the Company contemporaneously with the
conclusion of this agreement, in terms of which PSGIB is to
advance certain capital sums to the Company;
2.1.11 "THE MINIMUM RATIOS" means the minimum ratios as defined
in the loan agreement;
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2.1.11 "PSGIB" means PSG Investment Bank Limited, a public company with a
share capital duly incorporated in accordance with the Company
laws of the Republic of South Africa, with registration number
98/17396/06;
2.1.12 "THE SHAREHOLDERS" means collectively Century and Coil;
2.1.13 "THE SHAREHOLDERS' LOANS" means all loans by the shareholders
to the Company from time to time;
2.1.15 any reference to the singular includes the plural and
VICE VERSA;
2.1.16 any reference to natural persons includes legal persons and
VICE VERSA;
2.1.17 any reference to gender includes the other genders;
2.2 The clause headings in this agreement have been inserted for
convenience only and shall not be taken into account in its
interpretation.
2.3 Words and expressions defined in any sub~clause shall, for the
purpose of the clause of which that sub~clause forms part, bear
the meaning assigned to such words and expressions in that
sub~clause.
2.4 If any provision in a definition is a substantive provision
conferring rights or imposing obligations on any party, effect
shall be given to it as if it were a substantive clause in the
body of the agreement, notwithstanding that it is only contained
in the interpretation clause.
2.5 If any period is referred to in this agreement by way of
reference to a number of days, the days shall be reckoned
exclusively of the first and inclusively of the last day unless
the last day falls on a day which is not a business day, in which
case the day shall be the next succeeding business day.
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2.6 This agreement shall be governed by and construed and interpreted
in accordance with the law of the Republic of South Africa.
3 INTRODUCTION
.1 In terms of the loan agreement PSGIB will, from time to time,
advance certain amounts of money to the Company.
3.2 The shareholders have made shareholders' loans to the Company and
may, in future, make further shareholders' loans to the Company.
3.3 The Company has entered into -
3.3.1 the casino management agreement with Century;
3.3.2 the hotel management agreement with Xxxxxx.
3.4 PSGIB requires that ~
3.4.1 the shareholders must subordinate their claims arising out
of the shareholders' loans against the Company to the claims
of PSGIB against the Company arising out of the loan agreement
in the manner envisaged in this agreement;
3.4.2 the shareholders must cede the shareholders' loans to PSGIB as
security for the due payment by the Company of all and any
amounts that may become due and payable by the Company to
PSGIB in terms of the loan agreement; the shareholders must
pledge all and any shares held by them in the Company as further
security for the Company's obligations to repay to PSGIB all
amounts that will become payable by it in terms of the
loan agreement;
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3.4.4 the Company must withhold portion of the management fees payable to
Century and Xxxxxx under the agreements referred to in 3.3 above
if the minimum ratios, as set out in the loan agreement are
not met
4 SUBORDINATION OF SHAREHOLDERS' LOANS
4.1 Until the final date, the claims of the shareholders against the
Company, arising from the shareholders' loans, shall be
subordinated to the claims of PSGIB against the Company arising
out of the loan agreement, in the manner set out herein.
4.2 For the purposes of this paragraph 4, the expression "CASH ON HAND"
means all and any cash available to the Company on any particular
date, excluding ~
4.2.1 the amounts held by it in the reserve account, as defined in
the loan agreement;
4.2.2 cash equal to the total operating expenses incurred by the Company
during the 3 (three) completed months immediately prior to the
date in question;
4.2.3 cash equal to the amount of any capital expenditure which the
Company will incur in the 3 (three) months following immediately
after the date in question.
4.3 The Company shall not, until the final date, pay to the shareholders
either on account of interest which accrues on the shareholders' loan
or on account of capital redemptions of those shareholders' loans,
any amount ~
4.3.1 other than out of cash on hand;
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4.3.2 if, at any time, the Company fails to comply with all or any of
the minimum ratios as set out in the loan agreement; or
4.3.3 if, as a result of any such a payment, the Company will no longer
comply with any one or more of the aforesaid minimum ratios.
4.4 If, prior to the final date, the Company is placed into
liquidation, whether provisional or final and whether voluntary
or otherwise ~
4.4.1 PSGIB shall be entitled to prove, against the Company, the claim
of each shareholder in the name of each shareholder;
4.4.2 PSGIB shall prove, against the Company, both its claims arising out
of the loan agreement and the claims of the shareholders
arising out of the shareholders' loans;
4.4.3 if the amount paid to PSGIB on account of those claims by the
liquidator of the Company exceeds the amounts due to PSGIB by the
Company, PSGIB shall, within 5 (five) days of receipt of payment of
any amount by it from the liquidator, pay that excess to the
shareholders in the proportion that the shareholders held the
shareholders' loans in the Company immediately prior to such
liquidation.
5 CESSION AND PLEDGE
5.1 As security for the proper and timeous payment by the Company
of all amounts whatever (including all damages of whatever nature
and all costs, both as between party and party and as between
attorney and own client), which the Company may now or in the future
owe to PSGIB in terms of the provisions of the loan agreement,
together with all interest thereon the shareholders hereby ~
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5.1.1 cede in security and pledge the ordinary shares held by them in the
Company to PSGIB; and
5.1.2 cede in security and pledge their shareholders' loans (whether
currently in existence or whether they come into existence at
a future date) to PSGIB.
5.2 In order to perfect the cession and pledge in terms of
5.1, the shareholders undertake to deliver simultaneously
with the signing hereof to PSGIB ~
5.2.1 the original share certificates reflecting the shares held
by the shareholders; and
5.2.2 duly signed, undated and completed share transfer forms.
5.3 The shareholders jointly and severally warrant to PSGIB that:~
5.3.1 they are the legal and beneficial owners of the shares;
5.3.2 the shares are not subject to any rights of retention or other
limitations or encumbrances and may be ceded and pledged by the
shareholders in terms hereof without any limitation;
5.3.3 save for any rights in favour of PSGIB, no rights of pre~emption or
options or other similar rights exist or will exist in
respect of the shares.
5.4 If the Company fails to pay to PSGIB any amount whatever owing to
PSGIB in terms of the provisions of the loan agreement and
thereafter fails for a period of 7 (seven) days after receipt of a
written demand by PSGIB to the Company to remedy such breach,
PSGIB shall be entitled, notwithstanding anything to the contrary
contained in the loan agreement, without prejudice to any rights
which PSGIB may otherwise have as a result of that breach, to sell
or dispose of or realise in any other
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manner (on such terms and conditions as PSGIB may in its sole
discretion deem fit) any of or all the shares and to retain the
proceeds thereof in settlement of the Company's indebtedness.
5.5 The shareholders hereby irrevocably authorise and empower PSGIB in
REM SUAM to sell, collect, realise, transfer, negotiate, endorse
or dispose of the shares or any of them in such manner and on
such terms and conditions as PSGIB may reasonably deem necessary,
to institute, conduct and prosecute to finality or settle any
claims or legal proceedings (including appeals) which PSGIB may
reasonably deem necessary in connection therewith, to give
good, valid and sufficient receipts and discharges from all
sums of money paid to PSGIB in connection therewith, and to cede,
assign, transfer and deliver the shares in terms thereof.
5.6 The shareholders hereby renounce the legal benefits and
exceptions of excussion, division, cession of action, NON
NUMERATAE PECUNIAE, NON CAUSA DEBITI, revision of accounts,
ERRORE CALCULI and all other benefits or exceptions which might
or could be taken to the shareholders' liability in terms
of this cession, the shareholders declaring themselves to be fully
acquainted with the full meaning and effect of this renunciation.
5.7 The cession and pledge in terms of this paragraph 5 shall not
prevent a shareholder from selling its shares in the Company
subject to compliance with any applicable provisions of the
loan agreement, and PSGIB shall on written request by a shareholder
release its shares from such cession and pledge for the purposes of
such a sale on condition that the sale in question does not
contravene the applicable provisions of the loan agreement.
6 MANAGEMENT FEES AND PARTIAL SUBORDINATION THEREOF
6.1 The parties record that ~
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6.1.1 in terms of section 4.2 of the Casino management agreement certain
management fees will become payable by the Company to Century;
6.1.2 in terms of paragraph 8 of the hotel management agreement,
certain management fees will become payable by the Company
to Xxxxxx.
6.2 The provisions of paragraphs 6.3 and 6.4 below shall apply if,
at any particular time ~
6.2.1 the Company fails to comply with any of the minimum ratios;
or
6.2.2 if as a result of the payment of those management fees the Company
will no longer comply with the minimum ratios.
6.3 In the circumstances envisaged in 6.2 above ~
6.3.1 the Company shall, for so long as those circumstances exist, pay to
Century only the management fees envisaged in sections 4.2(a)
and 4.2(b) read with 4.2(d) of the casino management agreement;
6.3.2 the Company shall, whilst those circumstances exist, not pay to
Century the management fees envisaged in section 4.2(c) of the
casino management agreement (those fees are referred to herein as
the "CENTURY RETAINED FEES") and Century shall not be entitled
to receive the Century retained fees;
6.3.3 the failure by the Company to pay the Century retained fees to
Century shall, notwithstanding anything to the contrary
contained in the casino management agreement, not constitute a
breach of the casino management agreement by the Company;
6.3.4 the Company shall pay to Xxxxxx only the management fees envisaged
in paragraphs 8.1.1 and 8.1.2 of the hotel management
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agreement ("THE XXXXXX BASIC FEE") provided that if the Xxxxxx
basic fee is less than the guaranteed minimum determined in
terms of 6.4 below ("THE GUARANTEED MINIMUM") the Company shall
pay the guaranteed minimum to Xxxxxx;
6.3.5 notwithstanding anything to the contrary contained in the hotel
management agreement, the Company shall not pay the management
fees envisaged in 8.1.3 of the hotel management agreement
("THE XXXXXX INCENTIVE FEE") to Xxxxxx, and Xxxxxx shall not
be entitled to receive payment of the Xxxxxx incentive fee,
provided that if the guaranteed minimum exceeds the Xxxxxx
basic fees that excess, if paid by the Company to Xxxxxx, shall
constitute part~payment of the Xxxxxx incentive fee;
6.3.6 the Xxxxxx incentive fee or, if applicable, the remaining balance
of that fee, is referred to herein as the "XXXXXX
RETAINED FEE";
6.3.7 the failure by the Company to pay the Xxxxxx retained
fee shall, notwithstanding anything to the contrary
contained in the hotel management agreement, not constitute a
breach by the Company of the hotel management agreement.
6.4 The guaranteed minimum management fees that shall be paid by the
Company to Xxxxxx whilst the conditions set out in 6.2 above
prevail, shall be equal to R60 000,00 (sixty thousand Rand) per
month, excluding value~added tax, escalated on each anniversary
of the commencement of operations by the percentage increase in
the Consumer Price Index (all items) during the period of 12
(twelve) months immediately preceding the applicable
anniversary of the commencement of operations.
6.5 The Company shall, within a period of 10 (ten) business days
after the date on which the circumstances envisaged in 6.2 above
cease to exist, pay the Century retained fees to Century and
the Xxxxxx retained fees to
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Xxxxxx, and Century and Xxxxxx shall, on that date, respectively
become entitled to payment of the Century retained fees and
the Xxxxxx retained fees.
6.6 If the Company is placed into liquidation (whether provisional or
final) ~
6.6.1 the claims of both Century in respect of any Century retained
fees that have not been paid to it and the claims of Xxxxxx
in respect of any Xxxxxx retained fees that have not been paid to
it shall be subordinated to the claims of PSGIB against the
Company arising in any manner whatsoever out of or in connection
with the loan agreement; the provisions of 4.4 above shall
apply, MUTATIS MUTANDIS.
7 NOTICES AND DOMICILIA
7.1 The parties choose as their DOMICILIA CITANDI ET EXECUTANDI
their respective addresses set out in this clause for all purposes
arising out of or in connection with this agreement at which
addresses all processes and notices arising out of or in connection
with this agreement, its breach or termination may validly be
served upon or delivered to the parties.
7.2 For purposes of this agreement the parties' respective addresses
shall be ~
7.2.1 PSGIB at 0xx Xxxxx, 000 Xxx Xxxxx Xxxxxx, Xxxxxxxx marked
"FOR THE ATTENTION OF XXXXX XXXXXXX"; facsimile number
(011) 788-4361;
7.2.2 Century at x/x Xxxxxxxxx, 00 Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxxx,
marked "FOR THE ATTENTION OF WILDU DU PLESSIS";
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facsimile number (011) 484 3100;
7.2.3 Coil at 0 Xxxxx Xxxxxx, Xxxxxxx, Xxxx Xxxx;
facsimile number (021) 418 9288;
7.2.4 the Company at 0 Xxxxxx Xxxxxx, Xxxxxxx, 0000, marked
"FOR THE ATTENTION OF THE MANAGING DIRECTOR";
facsimile number (028) 214 1270;
7.2.5 Xxxxxx at 0 Xxxxx Xxxxx, Xxxxxxxxx Xxxx, X&X Xxxxxxxxxx,
Xxxx Xxxx , facsimile number (021) 425-3861,
or at such other address in the Republic of South Africa of
which the party concerned may notify the others in writing
provided that no street address mentioned in this sub~clause
shall be changed to a post office box or POSTE RESTANTE.
7.3 Any notice given in terms of this agreement shall be in writing and
shall ~
7.3.1 if delivered by hand be deemed to have been duly received by the
addressee on the date of delivery;
7.3.2 if posted by prepaid registered post be deemed to have been received
by the addressee on the 8th (eighth) day following the date
of such posting;
7.3.3 if transmitted by facsimile be deemed to have been received
by the addressee 1 (one) business day following the date of
dispatch, unless the contrary is proved.
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Notwithstanding anything to the contrary contained or implied in this
agreement, a written notice or communication actually received by
one of the parties from another including by way of facsimile
transmission shall be adequate written notice or communication
to such party.
8 WHOLE AGREEMENT
This agreement constitutes the whole agreement between the
parties as to the subject matter hereof and no agreements,
representations or warranties between the parties regarding the
subject matter hereof other than those set out herein are binding
on the parties.
9 VARIATION
No addition to or variation, consensual cancellation or
novation of this agreement and no waiver of any right arising from
this agreement or its breach or termination shall be of any
force or effect unless reduced to writing and signed by all the
parties or their duly authorised representatives.
10 RELAXATION
No latitude, extension of time or other indulgence which may be
given or allowed by any party to the other parties in
respect of the performance of any obligation hereunder, and no
delay or forbearance in the enforcement of any right of any party
arising from this agreement, and no single or partial exercise
of any right by any party under this agreement, shall in any
circumstances be construed to be an implied consent or election by
such party or operate as a waiver or a novation of or otherwise
affect any of the party's rights in terms of or arising from this
agreement or estop or preclude any such party from enforcing at
any time and without notice, strict and punctual compliance with
each and every provision or term hereof.
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SIGNED at Capetown On 13 April 2000
AS WITNESS:
------------
/s/ Xxxxx Xxxxxx For: PSG INVESTMENT BANK LIMITED
/s/ Xxxxx Xxxxxx /s/ Xxxxxx Xxxxxxx
(Names of witness in block letters) Duly Authorised
SIGNED at Capetown On April 13, 2000
AS WITNESS:
------------
/s/ Gert Bunendag For: CENTURY CASINOS AFRICA
(PROPRIETARY) LIMITED
/s/ Gert Bunendag /s/ Xxxxx Xxxxxx
(Names of witness in block letters) Duly Authorised
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SIGNED at Capetown On April 13,2000
AS WITNESS:
------------
/s/ Xxxxxx Xxxxxxx For: CALEDON OVERBERG INVESTMENTS
(PROPRIETARY) LIMITED
/s/ Xxxxxx Xxxxxxx /s/ Xxxx Xxxxxx
(Names of witness in block letters) Duly Authorised
SIGNED at Capetown On April 13, 2000
AS WITNESS:
------------
/s/ Xxxxxx Xxxxxx For: CALEDON CASINO BID COMPANY
(PROPRIETARY) LIMITED
/s/ Xxxxxx Xxxxxx /s/Xxxxx Xxxxxx
(Names of witness in block letters) Duly Authorised
SIGNED at Capetown On April 13, 2000
AS WITNESS:
------------
/s/ Gert Bunendag For: XXXXXX XXXX HOSPITALITY
(PROPRIETARY) LIMITED
/s/ Gert Bunendag /s/ Xxxx Xxxxxx
(Names of witness in block letters) Duly Authorised
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__________________________________________________________________
SCHEDULE 1
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SHARES :
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CERTIFICATE NOS.
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