SECOND ADDENDUM TO LOAN AGREEMENT
1. PARTIES
1.1 The parties to this agreement are
1.1.1 PSG Investment Bank Limited; and
1.1.2 Century Casinos Caledon (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 in this document;
2.1.2 "Bidco" means Century Casinos Caledon (Proprietary) Limited
(previously known as Caledon Casino Bid Company
(Proprietary) Limited), registration number 1996/010708/07,
a private company duly incorporated in accordance with the
company laws of the Republic of South Africa;
2.1.3 "business day" means a day which is not a Saturday, Sunday or South
African public holiday;
2.1.4 "EBITDA" means, for each financial year of Bidco, Bidco's earnings
for such financial year ~
2.1.4.1 before interest, tax, depreciation and amortisation; and
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2.1.4.2 after deducting any management fees incurred by Bidco during such
financial year if Bidco has not, by the end of such
financial year, paid those management fees to the persons
entitled to receive them and if, pursuant to the
subordination agreement, the persons entitled to payment of
such management fees have subordinated their claims for
payment to the claims of PSGIB in respect of the principal
loan and the standby loan;
2.1.5 the "first addendum" means an addendum to the principal loan
agreement concluded between PSGIB and Bidco on 21 April
2001 pursuant to which, inter alia, PSGIB made the standby
facility available to Bidco;
2.1.6 "interest period" means any period which commences on one
payment date and terminates on the day immediately
preceding the next payment date;
2.1.7 the "loan agreement" means a loan agreement concluded
between PSGIB and Bidco on 12 April 2000 (as amended by
the first addendum) pursuant to which, inter alia, PSGIB
made the principal loan available to Bidco;
2.1.8 "management fees" means any management fees payable by Bidco
pursuant to either the casino management agreement or
the hotel management agreement;
2.1.9 "payment dates" means 31 March, 30 June, 30 September and 31
December of each year or, if any such day is not a
business day, the immediately preceding business day;
2.1.10 "quarterly payment" means, in respect of each payment date,
the aggregate of all amounts (both in respect of
principal and interest)
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payable by Bidco to PSGIB on such payment date pursuant to the
provisions of 6 below;
2.1.11 "reserve account" means the bank account which, pursuant to
paragraph 7.3 of the first addendum, Bidco has opened with
PSGIB, which reserve account bear the number CCBC1;
2.1.12 "signature date" means the date on which this agreement
is signed by the last party signing it;
2.1.13 the "standby facility" means a standby facility for a maximum
principal amount of R4 500 000 (four million five
hundred thousand Rand) made available by PSGIB to Bidco
pursuant to the first addendum (which said facility is
regulated both by the first addendum and by the principal
loan agreement);
2.1.14 save where otherwise indicated, all expressions defined in
the loan agreement and the first addendum have the meanings
assigned to them therein;
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.
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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, subject to 2.6 below,
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.
2.6 If any period for which interest is to be calculated is referred to in
this agreement by way of a reference to a number of days, the days
shall be reckoned inclusively of the first and exclusively of the last
day.
2.7 This agreement shall be governed by, construed and interpreted in
accordance with the law of the Republic of South Africa.
3 RECORDAL
3.1 The parties have concluded the loan agreement and the first addendum.
Subsequent to the conclusion of the loan agreement and the first
addendum, Bidco's name was changed from Caledon Casino Bid Company
(Proprietary) Limited to Century Casinos Caledon (Proprietary)
Limited.
3.2 Pursuant to the first addendum, PSGIB made the standby facility
to Bidco.
3.3 The parties have agreed to amend the loan agreement and the
first addendum in the manner set out herein.
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4 RATIOS
4.1 The definition of "debt service cover ratio" contained in
paragraph 2.1.18 of the loan agreement is hereby deleted and is
hereby replaced with the following definition ~
"2.1.18 "debt service cover ratio" means, for any financial year, the
ratio between ~
2.1.18.1 EBITDA as reflected in Bidco's management accounts or in Bidco's
unqualified audited financial statements for such financial year,
both prepared in accordance with generally accepted accounting
principles, on the basis that if there is any conflict between
such management accounts and such audited financial statements,
the audited financial statements shall prevail; and
2.1.18.2 all the quarterly payments which become payable during such
financial year".
4.2 The definition of "interest cover ratio" contained in paragraph
2.1.25 of the loan agreement is hereby deleted and is hereby
replaced with the following definition ~
"2.1.25 "interest cover ratio" means, in respect of any one of Bidco's
financial years, the ratio between ~
2.1.25.1 EBITDA determined on the basis set out in 2.1.18.1 above; and
2.1.25.2 the difference between all interest incurred by Bidco
during the applicable financial year in respect of all
its interest-bearing debt of any nature whatsoever
including, without limitation,
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any dividends which Bidco has contracted to pay during that
financial year in respect of any cumulative, redeemable
preference shares issued by it, and the interest actually
received by Bidco during that financial year, all as
reflected in Bidco's management accounts or in Bidco's
unqualified audited financial statements for such financial
year, both prepared in accordance with generally accepted
accounting principles, on the basis that if there is any
conflict between such management accounts and such audited
financial statements, the audited financial statements shall
prevail,
provided that interest which accrues on any shareholders'
loans shall be disregarded if, by the last day of the applicable
financial year, such interest has not been paid and if, pursuant
to the subordination agreement, the applicable shareholders have
subordinated their claims in respect of such interest to PSGIB's
claims arising out of the principal loan and the standby
facility".
4.3 The definition of "loan life cover ratio" contained in paragraph 2.1.27
of the loan agreement is hereby deleted and is hereby replaced with
the following definition ~
"2.1.27 "loan life cover ratio" means, at any particular point in time, the
ratio between ~
2.1.27.1 the net present value of EBITDA which Bidco is forecasted,
pursuant to the most recently updated project forecast, to
derive out of the project for the period which commences on
the 1st (first) day of
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Bidco's then current financial year and which terminates on the
final date; and
2.1.27.2 the net present value of all the quarterly payments which will
become payable during the same period,
both such net present values to be determined at a discount rate of
16,87% (sixteen comma eight seven per centum) nominal annual
compounded monthly in arrears (which rate the parties record is
equal to the weighted average cost to Bidco of the principal loan
and the standby facility).
4.4 The debt service cover ratio and the interest cover ratio for each of
Bidco's financial years shall be measured within 60 (sixty) days of
the last day of such financial year. The loan life cover ratio
shall be measured annually within 60 (sixty) days of the last day
of each of Bidco's financial years.
4.5 The debt equity ratio shall be measured as at the 31st (thirty-first)
day of December of each year, such measurement to be undertaken
within 60 (sixty) days of the 31st (thirty-first) day of December
of each applicable year.
4.6 Paragraph 10.1.1 of the principal loan agreement is hereby deleted
and is hereby replaced with the following paragraph ~
"maintain a debt equity ratio no worse than 45:55 (forty five to fifty
five) with effect from the last day of the 12th (twelfth) month after
the commencement of operations and maintain a debt equity ratio of
40:60 (forty to sixty) with effect from the last day of the 24th
(twenty-fourth) month after the commencement of operations;".
4.7 Paragraph 10.1.3 of the principal loan agreement is hereby deleted and
is hereby replaced with the following paragraph ~
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"10.1.3 maintain, in respect of each of its financial years,
commencing with the 1st (first) financial year following upon the
expiry of 12 (twelve) months after the commencement of
operations, a debt service cover ratio of at least 1,34 (one
comma three four);".
4.8 Paragraph 10.1.4 of the principal loan agreement is hereby deleted
and is hereby replaced with the following paragraph ~
"10.1.4 maintain, in respect of each of its financial years,
commencing with the 1st (first) financial year following upon the
commencement of operations, a loan life cover ratio of at least
1,5 (one comma five);".
5 THE RESERVE ACCOUNT
5.1 PSGIB and Bidco confirm that Bidco has failed to comply with the
obligations imposed on it pursuant to paragraph 7.2 of the first
addendum more particularly in that, as at 31 December 2001, Bidco
had not maintained the debt service reserve required pursuant to
the aforesaid paragraph. PSGIB hereby ~
5.1.1 condones the aforesaid failure; and
5.1.2 waives any rights which it may have against Bidco arising
out of the aforesaid failure.
5.2 Paragraph 7.2 of the principal loan agreement is hereby deleted
and is hereby replaced with the following paragraph ~
"7.2 Bidco shall, out of the revenue from time derived by
it, cause amounts to be deposited into the reserve account
so that, on each payment date, and before the quarterly
payment which becomes payable on such date is made
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by Bidco, the amount held by Bidco in the reserve
account is equal to such quarterly payment.
Bidco shall ~
7.2.1 be entitled, on each payment date, to withdraw, from the deposit
account, an amount not exceeding the quarterly payment which becomes
payable by it on such payment date , and not reducing the balance
on the deposit account to less than R4 million (four million
rand) , and ;
7.2.2 be obliged, if it exercises its aforesaid right of withdrawal, to
deposit, into the deposit account, on the last day of each of the
succeeding 3 (three) months thereafter, an amount equal to 1/3
(one-third) of the quarterly payment which will become payable by
it on the next payment date (so that, on such next payment date,
the amount held in the reserve account is equal to the applicable
quarterly payment)".
5.3 Paragraph 7 of the principal loan agreement is hereby amended
as follows ~
5.3.1 by deleting the words "subject to 7.4 below" in the first line
of paragraph 7.3;
5.3.2 by deleting the words "six months' call deposit" in the sixth and
seventh lines of paragraph 7.3.1 and by replacing those words with the
words "3 (three) months' call deposit", such amendment to take
effect on the date on which this addendum is signed;
5.3.3 by deleting paragraph 7.4 in its entirety.
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6 PAYMENTS
6.1 Paragraph 8 of the first addendum is hereby deleted.
6.2 Bidco and PSGIB confirm that, on 1 January 2002 ~
6.2.1 the principal amount owing by Bidco to PSGIB on account of the
principal loan amounted to R 42 765 644 (forty two million seven
hundred and sixty five thousand six hundred and forty four rand);
and
6.2.2 the principal amount owing by Bidco to PSGIB on account of the
standby facility amounted to R 4 309 532 (four million three hundred
and nine thousand five hundred and thirty two rand).
6.3 Bidco shall repay the aforesaid principal amounts to PSGIB in 18
(eighteen) equal quarterly instalments, the first such instalment to
be paid on 28 March 2002 and each subsequent instalment to be
paid on each subsequent payment date thereafter.
6.4 The parties have calculated the instalments envisaged in 6.3
above and those instalments are reflected in ANNEXURE A hereto on the
basis that ~
6.4.1 the item "cash flow 1" reflects the total instalment payable, on each
payment date, by Bidco to PSGIB on account of the principal and
interest amount of the principal loan;
6.4.2 the item "cash flow 2", reflects the total instalment payable, on
each payment date, by Bidco to PSGIB on account of the principal
and interest amount of the standby facility; and
6.4.3 the item "cash flow 3" reflects, in respect of each payment date, the
aggregate of the aforesaid 2 (two) instalments.
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7 REMAINDER
Subject to the amendments contained herein, the loan agreement
and the first addendum shall continue to be of full force
and effect.
8 BREACH
In the event of any of the parties (the "DEFAULTING PARTY")
committing a breach of any of the terms of this agreement and
failing to remedy such breach within a period of 10 (ten) days
after receipt of a written notice from another party (the
"AGGRIEVED PARTY") calling upon the defaulting party so to
remedy, then the aggrieved party shall be entitled, at its sole
discretion and without prejudice to any of its other rights in
law, either to claim specific performance of the terms of this
agreement or to cancel this agreement forthwith and without
further notice, and to claim and recover damages from the
defaulting party.
SIGNED at Rosebank on 26th March 2002
AS WITNESS:
/s/Xxxxx Xxxxxxx For: PSG INVESTMENT BANK
---------------- LIMITED
Xxxxx Xxxxxxx /s/Xxxxx Xxxxxx /s/Xxxx Xxxxxx
---------------- -------------------------------
(Name of witness in print) Duly authorised
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SIGNED at Onrys Rivier on 28th March 2002
AS WITNESS:
------------
/s/Xxxxxx Xxxx For: CENTURY CASINOS
-------------- CALEDON (PTY) LIMITED
Xxxxxx Xxxx /s/Xxxxxx Xxxxxx
-------------- ----------------
(Name of witness in print) Duly authorised
------------------------------ ----------------
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