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EXHIBIT 10.87
SHAREHOLDERS AGREEMENT
between
CALEDON CASINO BID COMPANY (PTY) LIMITED ("Bidco")
and
CALEDON OVERBERG INVESTMENTS (PTY) LIMITED ("Caledon")
and
CENTURY CASINOS AFRICA (PTY) LTD ('Century SA")
and
CENTURY CASINOS, INC. (not as a shareholder or party, but for clauses 4.2.3. and
6.7. of this agreement only)
and
CALEDON HOTEL SPA AND CASINO RESORT (PTY) LIMITED ("Devco")
and
▇▇▇▇▇▇ ▇▇▇▇ HOSPITALITY (PTY) LIMITED ("Hospitality")
and
▇▇▇▇▇▇▇▇▇▇ COUNTRY HOTEL AND SPA (PTY) LIMITED ("Hotelco")
and
SENATOR TRUST
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1. DEFINITIONS AND INTERPRETATION
1.1 Clause headings in this agreement are used for reference purposes only
and shall not be used in its interpretation.
1.2 In this agreement, unless the context clearly indicates the contrary
intention:
1.2.1 An expression which denotes:
1.2.1.1 the singular includes the plural and vice versa;
1.2.1.2 any one gender includes the other genders;
1.2.1.3 a natural person includes created entities (corporate or
unincorporate) and vice versa;
1.2.2 The following expressions bear the meanings assigned to them below and
cognate expressions bear corresponding meanings:
1.2.2.1 "ACT" means the Companies Act, 1973;
1.2.2.2 "THE BOARD" means the Western Cape Gambling and Racing Board;
1.2.2.3 "THE CASINO BUSINESS" means the casino business owned by the company
excluding, without limitation, the hotel, health spa, tourist village which will
be owned by the company;
1.2.2.4 "COMPANY" means Bidco;
1 2 2 5 "LICENCE" means a casino licence for Caledon in the Western Cape;
1 2 2 6 "THE LICENCE APPLICATION" means the licence application submitted by
Bidco on 15 October 1999 for the licence;
1.2.2.7 "THE PREFERENCE SHAREHOLDERS" and "MINORITY SHAREHOLDERS" means
Overberg Empowerment Company Ltd ("Empowerco"), and The Overberg Community Trust
("Trust");
1.2.2.8 "THE PROJECT" means the project contemplated in the licence
application;
1.2.2.9 "THE REMAINING BIDCO BUSINESS" means the business of Bidco but
excluding the casino business;
1.2.2.10 "THE SHAREHOLDERS" means ordinary shareholders and preference
shareholders;
1.2.2.11 "THE ORDINARY SHAREHOLDERS" means Century SA and Caledon and
any other holder of ordinary shares in Bidco from time to time
1.2.2.12 "THE CALEDON GROUP" means Senator Trust, Caledon, Devco,
Hospitality, Hotelco;
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1.2.2.13 "THE HOTEL BUSINESS" means the ▇▇▇▇▇▇▇▇▇▇ Hotel in
Caledon and the land on which it is situated, being Portion 1 Farm 812 Caledon
Division
1.2.2.14 "THE ORIGINAL SHAREHOLDERS AGREEMENT" means the agreement entered
into between Devco, Bidco, Caledon, Century SA and other parties dated 13
October 1999.
1.2.2.15 "PARTIES" to this agreement are Caledon Group and Century SA.
1.3 Words and expressions defined in the Act, shall bear the same meanings
in this agreement.
1.4 If any provision in the definition is a substantive provision conferring
rights or imposing obligations on anyone, effect shall be given to it as if it
were a substantive provision in the body of this agreement.
1.5 Where any number of days is prescribed in this agreement, same shall be
reckoned exclusively of the first and inclusively of the last day unless the
last day falls on a Saturday, Sunday or public holiday in the Republic of South
Africa, in which case, the last day shall be the next succeeding day which is
not a Saturday, Sunday or public holiday in the Republic of South Africa.
2. INTRODUCTION
2.1 On 13 October 1999, Devco, Bidco, Caledon, Century SA and other parties
entered into a binding agreement (the original Shareholders Agreement) whereby a
bid for a casino licence would be made by those parties.
2.2 On 15 October 1999 Bidco submitted an application for a casino licence
for the town of Caledon which inter a/ia provided that a casino resort project
be implemented through Bidco. The project consisted of a casino, hotel, health
spa, and small tourist village; the casino will be managed by Century SA, the
hotel, food & beverage and parking elements will be managed by Hospitality (or
the entity to which the agreement referred to in 5.2 has been assigned). The
management of all other elements of the resort shall be decided upon by the
Board of Directors of the company.
2.3 The parties wish to give effect to the above and the ordinary
shareholders of Bidco wish to regulate their relationship inter se as
shareholders of Bidco.
3. CONDITIONS PRECEDENT
3.1 The whole of this agreement (with the exception of clauses 1, 2, 3,
6,15,16, 17, 18 and 19 by which the parties shall nevertheless be bound) is
subject to the following conditions precedent:
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3.1.1 The casino licence being granted and irrevocable debt financing
undertakings given by funders for the required amount set out in the license
application on terms and conditions reasonably satisfactory to Century SA, Bidco
and Caledon Group and all the suspensive conditions to which such licence is
subject being fulfilled;
3.2 The parties shall use their best endeavours to procure that all the
conditions precedent referred to herein are fulfilled as soon as possible after
the date of signing of this agreement. Caledon Group represents and warrants
that Bidco will have all necessary water rights for the proposed development;
3.3 If all the conditions are not fulfilled or waived in writing by
Bidco, Caledon Group and Century SA by 31 December 2000 or if the licence
application is formally rejected by the Board, this agreement (save for the
provisions of clauses 1, 2, 3, 6, 15, 16, 17, 18 and 19) shall cease to be of
any force or effect. No party shall have any claim against any other in
consequence of such non-fulfilment, save in circumstances where a party has
deliberately frustrated the fulfilment thereof or has breached the provisions of
this clause 3.
4. SHAREHOLDING OF BIDCO
4.1 Before the transactions described below take effect, Caledon Group owns
100% of the entire issued ordinary share capital of Bidco.
4.2 The parties shall procure that forthwith (but in any event no later than
30 days) after the conditions precedent have been fulfilled that:
4.2.1 The Caledon Group will sell to Bidco the Hotel Business and the land
as scheduled in "Appendix C" as a going concern, both free and clear of any and
all debt, financial liens and liabilities, encumbrances, or similar (except for
operational undertakings in the ordinary course of business), at their agreed
values, which will result in the fulfilment of article 4.2.4 below. The Caledon
Group undertakes to procure that to the extent its aggregate loan accounts
("Caledon Group Loan Account") in Bidco exceed R15 000 000 (fifteen million),
such excess be transferred to the share premium of Bidco. It is recorded that it
is anticipated this transfer will amount to R10 000 000 (ten million) less the
nominal value of the issued share capital of Bidco.
4.2.2 Provided that the transactions set out in 4.2.1 have been implemented
and all conditions precedent been fulfilled, Century SA will pay (within three
days) R10 000 000 (ten million) to Bidco to subscribe for shares constituting
50% of the issued ordinary share capital in Bidco at the time through the
issuing of further shares in Bidco and Century SA will (at the same time) loan
R15 000 000 (fifteen million) to Bidco by way of loan account1 "Century SA Loan
Account".
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4.2.3 Century jointly and severally with Century SA undertake to provide
Bidco with the funds necessary to fulfil clause 4.2.2.
4.2.4 After all the transactions described in this article 4.2 have been
completed, the total shareholdings and total loan accounts in Bidco will be as
follows:
Both Century SA and Caledon will each own 50% (fifty percent) of the entire
issued ordinary share capital of Bidco (collectively 100%);
Century SA and Caledon Group will each have R15 000 000 (fifteen million)
in loan accounts in Bidco, and no other loan accounts shall be outstanding.
4.2.5 All such transactions shall be effected in the most tax efficient
manner for both Century SA and Caledon Group.
4.3 The ordinary shareholders and Bidco shall procure that forthwith after
the fulfilment or waiver of the condition precedent that:
4.3.1 The authorised share capital of Bidco shall be increased to include
200 preference shares ("the preference shares") of R1,00 each the preference
shares having the rights and privileges as set out in annexure A hereto;
4.3.2 200 preference shares shall be allotted and issued to the minority
shareholders as follows:
4.3.2.1 100 preference shares shall be allotted and issued to the Trust
(which shall subscribe therefor) at par;
4.3.2.2 100 preference shares shall be allotted and issued to the Empowerco
(which shall subscribe therefor) at par;
4.4 Century SA shall pay the amount of R100,00 payable by the Trust and
Caledon the R100-00 for Empowerco for the subscription of their preference
shares.
4.5 After the completion of the transactions referred to above the
preference shareholding of Bidco shall be as follows:
4.5.1 Empowerco, will own 100 preference shares of R1,00 each, being 50% of
the issued preference shares of Bidco;
4.5.2 the Trust, will own 100 preference shares of R1,00 each, being 50% of
the issued preference shares of Bidco.
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5. MANAGEMENT AGREEMENTS
The following Management Agreements will be signed simultaneously with the
signature of this agreement.
5.1 CASINO MANAGEMENT AGREEMENT
5.1 .1 Century SA will be awarded and will sign the casino management
agreement on the following terms and conditions:
Period: For duration of the licence initially 10 years with a guaranteed option
to renew for further ten year periods
Fees: 1. 4% of gaming revenue (after VAT, but before all other taxes)
up to R40 million per year, plus
2. 5% of gaming revenue (after VAT, but before all other taxes) above R40
million per year, plus
3. 7.5% of EBITDA (Earnings before interest, tax, depreciation, amortization
and any non-casino management controllable
items such as leases, rent or similar).
5.1.2 The percentage referred to in 1 above shall be reduced to three
percent (3%) for the first twelve months of casino operation.
5.1.3 The casino department shall report directly to the Board of Directors
of Bidco as well as to Century SA.
5.2 HOTEL AND RESORT MANAGEMENT CONTRACT
5.2.1 Hospitality will be awarded and will sign the hotel and resort
management agreement (for hotel, food & beverage and parking, and any other
element the board of directors of Bidco decides, excluding casino and any other
areas in respect of which the company contracts with a third party) on the
following terms and conditions:
Period: 10 years with a guaranteed option to renew for further ten year
periods
Fees: 6,5% (six and a half percent) of all hotel/resort revenue (after VAT),
excluding casino and any other and any other areas in respect of which a third
party may receive management fees, plus 15% of EBITDA of the hotel and resort
complex (excluding casino and any other areas in respect of which a third party
may receive management fees).
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5.2.2 The EBITDA percentage referred to above (15%) shall be reduced to ten
percent (10%) for the first twelve months of casino/hotel/resort operation.
5.2.3 The hotel and resort department will report directly to the board of
directors of Bidco and Hospitality.
5.3 Hospitality shall operate the Hotel for its own account until such a
time a~ the casino licence is granted. Hospitality and/or the Caledon Group
shall be paid by Bidco simultaneously with the fulfilment of the conditions
precedent and the fulfilment of clause 4.2.1, for all refurbishments and
improvements (incl. new and additional F, F&E) expended on the Hotel Business
since 3 September 1999 up to an amount of R2,5 million (two and one half million
rands) by bank guaranteed cheque.
5.4 Bidco has entered, on the same date of this Agreement, into a Hotel
Management Agreement with Hospitality for the management of the hotel and into a
Casino Management Agreement with Century SA for the management of the casino.
Bidco, Hospitality and Century SA agree that the provisions that deal with
general (non-hotel or non-casino specific) terms and conditions (such as term,
termination rights, timing of fees and expenses payable, arbitration, budget
approvals, insurance protection, indemnification, and similar) shall be equal
and interpreted equally in both the Hotel Management Agreement and the Casino
Management Agreement. If any provisions in either one or both of these Hotel and
Casino Management Agreements are in conflict with this clause 5.4, this clause
5.4 shall take precedent.
6. BID FEES
6.1 The bid fees have been budgeted at R800 000, but the final cost depends
on the probiety cost and other potential costs/expenses. Caledon and Century SA
shall jointly decide on how that budget is actually being spent.
6.2 Century SA has already contributed R250 000 by cheque deposit on 15
October 1999 to Bidco account.
6.3 Basil Read has contributed bid fees of R300 000 in exchange for a fixed
competitive priced contributions contract for the work to be down under the
casino bid.
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6.4 The Caledon Group through their associate companies have contributed
R250 000 to Bidco and has in conjunction with the parties, prepared the bid and
will provide secretarial and administrative support (including printing,
stationery, files, etc) as part of this amount. They have already spent as part
of their R250 000 the following amounts for the bid (approximate):
Registration Fees R20 000
Market Survey R 9 000
Legal Fees Council R14 000
Legal Fee Ladbroke RI5 000
--------
R58 000
--------
The balance in the amount of R192 000 has been put into the bank account of
Bidco. Any further amounts that may have been in credit with the Board prior as
at 10 October 1999 will be regarded as part of the Caledon Group's contribution
to the bid and can be repaid on demand unless agreed by them otherwise.
6.5 Should the casino licence be awarded and the project proceeded with, all
bid money will be paid back to the relevant parties on completion of the
building contract unless agreed otherwise by written agreement with Bidco as may
be the case with Basil Read.
6.6 If no licence is awarded to or the project not proceeded with, the fees
will not be paid back and no party shall have any claim against any other party
for the fees.
6.7 If any parties probiety investigation causes the bid budget to exceed
the R250 000 allocated to probity, then the said party will pay in the direct
proportional cost thereof.
7. RIGHT OF FIRST REFUSAL
7.1 Should any ordinary shareholder decide to sell directly or indirectly
its shares or part thereof in Bidco to a third party (that is an entity not
majority controlled by Century SA or the Caledon Group and excluding their
holding companies or fellow controlled subsidiaries) then the party wishing to
sell shares must offer the shares to the other party on the same terms and
conditions as the offer from the third party. The offer shall remain open for 45
working days and should the other parties not accept such an offer, the seller
is free to sell his shares on the same terms and conditions to the third party,
subject to the approval of the Gambling Board. The parties agree that,
notwithstanding article 13.1 of this agreement, the parties will amend article
94. of the articles of association of the company based on the principle set out
in this clause 7.1. but making use of the standard for the right of first
refusal wording of the existing wording of the articles of association of Bidco.
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7.2 The parties agree that, in case any shareholder of the company is found
unsuitable to hold a casino/gaming license, article 95. of the company's
articles of association shall apply mutatis mutandis, provided that the
remaining ordinary shareholders, in case no other purchaser acceptable to the
Gambling Board pays the purchase price in cash, shall have the right to pay the
purchase price using redemption securities (i.e. loan account). The board of
directors of the company shall then decide when payment under such loan account
will be made, giving consideration to the cash flow and other financial
situations of the company, but acting in a reasonable manner to facilitate
payment.
8. DIVIDEND POLICY
The shareholders agree that the dividend policy will be determined by the Board
of Directors taking into account the capital commitments, earnings and all other
relevant matters.
9. SHAREHOLDERS LOANS
Interest will be paid on shareholders loans (Century SA Loan Account and Caledon
Group Loan Account) at the lower of: prime overdraft rate or the cost of debt
funding to the company for sums in excess of R1 million (one million rands),
unless the board of directors of the company determines otherwise. Shareholders'
loan accounts will be treated equally in all respects and no repayment or
payment on interest thereon shall be made without the permission of Century SA
and Caledon.
10. BOARD OF DIRECTORS
10.1 Both the Trust and Empowerco will be entitled to nominate and appoint
one board member each to Bidco. Century SA and Caledon will be able to nominate
and appoint up to four (4) board members each. Initially, however, Century SA
and Caledon will appoint three (3) members each. The increase from three to four
members each shall be undertaken, if at all, simultaneously by Century SA and
Caledon.
10.2 All decisions of the board of directors to be approved will require at
least 70% of the directors of the board members agreement.
10.3 The chairman of the directors of the board meetings of the directors
shall not have casting vote.
11. ORIGINAL SHAREHOLDERS AGREEMENT
11.1 If any provision of this agreement is in conflict with the original
shareholders agreement this agreement should take precedent.
11.2 The following clauses are cancelled in the original shareholders
agreement and are of no further full or effect: clauses: 1, 2, 3, 4, 5, 7. 1,
7.2.
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12. PAYMENT TO LADBROKE OF R7 MILLION
12.1 Notwithstanding any previous agreement or anything contained in this
agreement Ladbroke Casino Holdings (SA) (Pty) Ltd will be paid by Bidco the R7
million due in terms of an agreement between them and various other parties
including Caledon, (and referred to in clause 20.1 of this agreement) upon
request of Caledon, which shall be no sooner than 28 days from the award of a
gaming licence. The purpose of this clause is to ensure that all potential or
other liabilities, indemnification's and any other commitments have been met by
Ladbroke Casino Holdings (SA) (Pty) Ltd and their group companies in terms of
the agreement referred to in terms of clause 20.1 of this agreement. Caledon and
the Caledon Group shall not request such payment of R7 million, or parts
thereof, from Bidco unless Caledon/Caledon Group immediately pays all such
monies to Ladbroke or to other parties which were, in the reasonable view of
Caledon, indemnified by Ladbroke. All monies not paid out by Caledon/Caledon
Group within five days after receipt of monies from Bidco shall be paid back to
Bidco immediately. Caledon, Caledon Group or any of its affiliates shall under
no circumstance realize any benefit, financial or otherwise, out of this
transactions.
12.2 Notwithstanding anything to the contrary herein contained, Century SA
shall be entitled on written notice to such effect to the Caledon Group, to
require the relevant members of the Caledon Group to exercise any and all rights
that they may have against Ladbroke Casino Holdings (SA) Pty Ltd and/or
Landbroke Casino (Holding) Ltd. and/or any subsidiary or holding company of
that. Should the Caledon Group not do so within a reasonable period after
receipt of such notice, the Caledon Group hereby authorizes and empowers Century
SA to do so and, for such purposes, each of the members of the Caledon Group
hereby appoint Century SA as its duly authorized agent, in rem suam.
12.3 Notwithstanding anything in this clause 12., Bidco shall in absolutely
no way be obligated to pay more than. R7 million under this clause 12.
13. AMENDMENT OF THE MEMORANDUM AND ARTICLES OF ASSOCIATION OF THE COMPANY
13.1 Where there is a conflict between the memorandum and articles of
association of the company and this agreement, the provisions of this agreement
shall prevail. Should it be required by any party hereto, the parties undertake
to procure that the articles of association of the company shall be amended to
accord with the provisions of this agreement.
13.2 In addition to 7.1, 7.2 and 13.1 and without derogating from the
provisions thereof, the ordinary shareholders agree to procure that the
memorandum and articles of association shall be amended as follows:
10
13.2.1 the main business should be changed in paragraph 2 of the memorandum
to read:
"the main business which the company is to carry on to own, develop and operate
a hotel, spa, casino and resort in so far as the relevant laws permit and
subject to approval by the relevant authorities";
13.2.2 paragraph 3 of the memorandum be deleted and substituted with the
following:
"the main object of the company is, to own, develop and operate a hotel, spa,
casino and resort in so far as the relevant laws permit and subject to approval
by the relevant authorities"~
13.2.3 in article 9 add "The issue of preference shares however to Empowerco
and the Trust may not have their rights varied without the unanimous consent of
the ordinary shareholders";
13.2.4 in article 27.2 delete "Ladbroke Casino Holdings SA (Pty) Ltd" and
add "all directors nominated by Caledon Overberg Investments (Pty) Ltd and all
directors nominated by Century Casinos Africa (Pty) Ltd";
13.2.5 in article 28 delete "Ladbroke Casino Holdings (SA) Pty) Ltd'
and insert "all directors nominated by Caledon Overberg Investments (Pty) Ltd
and all directors nominated by Century Casinos Africa (Pty) Ltd";
13.2.6 in article 29.3 delete "Ladbroke Casino Holdings SA (Pty) Ltd"
and insert Caledon Overberg Investments (Pty) Ltd and Century Casinos Africa
(Pty) Ltd.
13.2.7 in article 45.1 delete "Caledon Overberg Investments (Pty) Ltd'
and insert after the Overberg Empowerment Company Ltd the word "and". In
addition the word "any" shall be replaced by the word "one";
13.2.8 in article 45.2 delete "Ladbroke Casino Holdings SA (Pty) Ltd"
and add the words "Caledon Overberg Investments (Pty) Ltd" and "Century Casinos
Africa (Pty) Ltd". Substitute the words "as it" for the words "they are"; add
"Caledon Overberg Investments (Pty) Ltd and Century Casinos Africa (Pty) Ltd
cannot replace, appoint or remove each others directors";
13.2.9 in article 49 the name "Ladbroke Casino Holdings SA (Pty) Ltd"
shall be substituted by "the Overberg Empowerment Company Ltd and Century
Casinos Africa (Pty) Ltd";
13.2.10 delete article 59.4.1;
13.2.11 delete article 59.4.2;
13.2.12 delete the first paragraph of article 61.1 and replace with the
following:"The quorum necessary for the transactions of the business of the
directors shall be all directors from Caledon Overberg Investments (Pty) Ltd and
all directors from Century Casinos Africa (Pty) Ltd.;
13.2.13 in article 61.3 substitute the words "Ladbroke" with the words
"Caledon Overberg Investments (Pty) Ltd and Century Casinos Africa (Pty) Ltd;
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13.2.14 in article 96.1.1.1 to be cancelled and substituted with a new
articles 9.6.1.1.1 which is to read: "any company or close corporation or trust
or any other legal entity which is controlled directly or indirectly by the
controlling shareholders of Caledon Overberg Investments (Pty) Ltd";
13.2.15 delete articles 96.1.1.2 and 96.1.1.3
13.2.16 change article 96.1.2 by deleting the contents and substitute a new
article 96.1.2 to read: "Century Casinos Africa (Pty) Ltd means any company,
close corporation, trust or any other legal entity or person that is controlled
directly or indirectly by Century Casinos Africa (Pty) Ltd and/or Century
Casinos Incorporated.
13.2.17 in article 56, add clause 56.4 which must read "if required to do so
in terms of the Western Cape Gambling and Racing Board or any other similar
gambling authority.
13.2.18 in article 59.2, change 7 days to 21 (twenty-one) days.
13.2.19 The name of the company shall be changed to "Century Casinos Caledon
(Pty) Ltd.".
13.2.20 A new article shall be included to give effect to the following:
should the casino assets of the project be sold and it be necessary to effect
the sale, the preference shareholders shall be bought out at the fair market
value, as determined by the company's auditors.
13.2.21 Add the following at the end: "Notwithstanding the above, each vote
of the preference shareholders shall require ten shares".
13.3. Notwithstanding 13.2.19, Century SA and/or Century Inc shall at
any time be entitled, on written notice to the company, to require the company
to change its name so as not to include the word "Century" or any word
confusingly similar thereto. The company and the ordinary shareholders shall,
within 30 days after receipt of such notice, procure that the company changes
its name accordingly.
14. BASIS OF ACCOUNTING FOR THE CASINO BUSINESS
The basis of accounting for the casino business for the sole purpose of
determining the profits available for distribution to the preference
shareholders and the amount to be distributed to the preference shareholders are
set out in annexure B hereto which annexure shall not be exhaustive.
15. ANNOUNCEMENTS
15.1 The provisions of this agreement shall remain confidential at all times
and, save as provided in this agreement, shall not be disclosed to any person.
15.2 Subject to 15.3, no public announcement, communication or circular
concerning the transactions referred to or contemplated in this agreement shall
be made or dispatched at any time without the prior written consent of the board
of directors of the company, such consent not to be unreasonably withheld or
delayed.
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15.3 Where the announcement, communication or circular is required by
law or by any rule or any regulatory authority, it shall be made by a party only
after reasonable consultation with the other party, if practicable. Caledon
acknowledges that Century is a publicly traded company with certain disclosure
requirements.
16. WHOLE AGREEMENT, NO AMENDMENT
16.1 This agreement constitutes the whole agreement between the parties
relating to the subject matter hereof.
16.2 No amendment or consensual cancellation of this agreement or any
provision or term thereof or of any agreement, ▇▇▇▇ of exchange or other
document issued or executed pursuant to or in terms of this agreement and no
settlement of any disputes arising under this agreement and no extension of
time, waiver or relaxation or suspension of any of the provisions or terms of
this agreement or of any agreement, ▇▇▇▇ of exchange or other document issued
pursuant to or in terms of this agreement shall be binding unless recorded in a
written document signed by the parties. Any such extension, waiver or relaxation
or suspension which is so given or made shall be strictly construed as relating
strictly to the matter in respect whereof it was made or given.
16.3 No extension of time or waiver or relaxation of any of the
provisions or terms of this agreement or any agreement, ▇▇▇▇ of exchange or
other document issued or executed pursuant to or in terms of this agreement,
shall operate as an estoppel against any party in respect of its rights under
this agreement, nor shall it operate so as to preclude such party thereafter
from exercising its rights strictly in accordance with this agreement.
16.4 No party shall be bound by any express or implied term, representation,
warranty, promise or the like not recorded herein.
17. DOMICILIUM CITANDI ET EXECUTANDI
17.1 The parties choose as their dornicilia citandi et execulandi for all
purposes under this agreement, whether in respect of court process, notices or
other documents all communications of whatsoever nature (including the exercise
of any option), the following addresses:
Century SA: c/o Deloitte & Touche
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Att: ▇▇▇▇▇ ▇▇▇▇▇▇
Deloitte & Touche Place
The Woodlands
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
Telefax: 0912536817531
Century Inc: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
Telefax: 0917079827586
FKC: ▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇
Telefax: 021 425 3861
Bidco: ▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇
Telefax: 021 425 3861
Devco: ▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇
Telefax: 021 425 3861
Hotelco: ▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇
Telefax: 021 425 3861
Caledon: ▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇
Telefax: 021 425 3861
Hospitality: ▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇
Telefax: 021 425 3861
Century: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
Telefax: 0917079827586
FKC: ▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇
Telefax:: 021 425 3861
Bidco ▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇
Telefax:: 021 425 3861
Devco: ▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇
Telefax:: 021 425 3861
Hotelco: ▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇
Telefax:: 021 425 3861
Caledon: ▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇
Telefax:: 021 425 3861
Hospitality: ▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇
Telefax:: 021 425 3861
14
17.2 Any notice or communication required or permitted to be given in terms
of this agreement shall be valid and effective only if in writing but it shall
be competent to give notice by telefax.
17.3 Any party may by notice to any other party change the physical address
chosen as its domiciliurn citandi et executandi vis-a-vis that party to another
physical address or telefax number, provided that the change shall become
effective vis--a-vis that addressee on the tenth business day from the deemed
receipt of the notice by the addressee.
17.4 Any notice to a party sent by telefax to its chosen telefax shall be
deemed to have been received on the date of despatch (unless the contrary is
proved).
17.5 Notwithstanding anything to the contrary herein contained a written
notice or communication actually received by a party shall be an adequate
written notice of communication to it notwithstanding that it was not sent to or
delivered at its chosen domicilium citandi et executandi.
18. ARBITRATION
18.1 Save in respect of those provisions of this agreement which provide for
their own remedies which would be incompatible with arbitration, a dispute which
arises in regard to:
18.1.1 the interpretation of; or
18.1.2 the carrying into effect of; or
18.1.3 any of the parties' rights and obligations arising from; or
18.1.4 the termination or purported termination of or arising from the
termination of; or
18.1 .5 the rectification or proposed rectification of;
this agreement or out of or pursuant to this agreement or on any matter which in
terms of this agreement requires agreement by the parties, other than where an
urgent interdict is sought or urgent relief may be obtained from a court of
competent jurisdiction, shall be submitted to and decided by arbitration in
accordance with the rules of Arbitration Foundation of Southern Africa (or its
successor) by an arbitrator appointed by the Foundation.
18.2 Nothing in this agreement shall preclude any party from seeking an
urgent interdict or urgent relief from a court of competent jurisdiction.
15
19. COSTS
The legal fees and disbursements incidental to the negotiation, preparation and
implementation of this agreement and the stamp duty thereon shall be borne by
the company, except where any party seeks its own legal advice in which case it
will be borne by the party seeking such advice.
20. ALLOCATION OF AMOUNTS TO CASINO BUSINESS
Without in any way purporting to be exhaustive and without derogating from the
other provisions of this agreement (including annexure B) for the sole purpose
of determining the profits available for distribution to the preference
shareholders, the following shall be allocated to the casino business and
notwithstanding that such amounts may have been incurred prior to the date of
this agreement:
20.1 the fee of R7 million payable to Ladbroke Casino Holdings SA (Pty) Ltd
in terms of agreement dated 3 September 1999 between Ladbroke Casino (Holdings)
Limited; Ladbroke Casino Holdings (SA) (Pty) Limited; ▇▇▇▇▇▇ King Properties
(Pty) Limited; ▇▇▇▇ ▇▇▇▇▇▇; Caledon Casino Bid Company (Pty) Limited; Caledon
Hotel Spa and Casino Resort (Pty) Limited; ▇▇▇▇▇▇▇▇▇▇ Country Hotel and Spa
(Pty) Limited; Caledon Overberg Investments (Pty) Limited; ▇▇▇▇▇▇ ▇▇▇▇
Hospitality (Pty) Limited and ▇▇▇▇▇ ▇▇▇▇.
20.2 all direct and indirect costs and fees relating to the licence
application or the establishment and development of the casino business. The bid
fees of approximately R800 000 shall be repaid to the parties who provided the
funding.
20.3 all costs expenses and fees payable or paid by Bidco in terms of
agreements or undertakings entered into or given by Bidco prior to the date of
this agreement.
21. The parties agree to forthwith enter into an agreement with the minority
shareholders to give effect to the terms and conditions contained in this
agreement. The parties agree that it is this agreement that shall take precedent
over any agreement (i.e. the agreement with the minority shareholders)
regulating the relationship and dealings between the parties to this agreement.
All terms and conditions of any dealings between the parties to this agreement
shall be interpreted according to this agreement only (and not according to the
agreement which includes the minority shareholders).
22. An international auditing firm (such as Deloitte & Touche, KPMG or Ernst
& Young) nominated by Century SA shall be the joint auditor of the company,
together with a joint auditing firm chosen by Caledon.
23. This agreement shall not become effective unless approved by the Board
of Directors of Century SA and Century Inc. Such approval shall be forthcoming
within five days of the board approval of the Caledon Group.
16
24. The obligations of Caledon Group under this Agreement shall be joint and
several.
25. LIMITED RESTRAINT
25.1 For one particular potential opportunity, in the town of Worcester or
in the Breeriver Valley in the Western Cape Province of South Africa, the
following shall apply, but only during the first two years of this shareholders
agreement: should Century or Century SA become involved in this Worcester
project, they shall use their best efforts to include Bidco or Caledon Group in
this project in a meaningful and substantial manner, similar to the present
structure of the Caledon bid. If Caledon Group cannot be included in this
project, Century or Century SA, if they become involved and a casino
actuallyopens in Worcester with Century or Century SA as casino managers, shall
pay to Caledon Group an amount equal to five percent (5%) of the net income
stream Century or Century SA derive from this project during the first five
years of operation of that project. If Century or Century SA become involved in
this Worcester or Breeriver project after two years of this shareholders
agreement have elapsed, this provision 25.1 shall be null and void.
25.2 Century, Century SA and the Caledon Group shall endeavour to include
each other in a casino bid for Club Mykonos, Westem Cape.
26. ASSIGNMENT
This shareholder agreement will be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns but will
not be assignable or delegable by any party without the prior written consent of
the other party; provided, however, that nothing in this agreement is intended
to limit one signatory's or party's ability to assign its rights and
responsibilities to any directly controlled affiliate, in which case all other
parties need to be notified. Once a party or signatory has assigned its rights
and responsibilities, it shall no longer be party or signatory to this
agreement.
17
THUS DONE AND SIGNED by Bidco at CAPE TOWN this 3 day of December 1999.
/s/ ▇▇▇▇ ▇▇▇▇▇▇
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THUS DONE AND SIGNED by Caledon at CAPE TOWN this 3 day of December 1999.
/s/ ▇▇▇▇ ▇▇▇▇▇▇
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THUS DONE AND SIGNED by CenturySA at CAPE TOWN this 3 day of December 1999.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Vice Chairman
Century Casinos Inc. signs for clauses 4.2.3 and 6.7 of this agreement only:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,Vice Chairman
THUS DONE AND SIGNED by Hotelco at CAPE TOWN this 3 day of December 1999.
/s/▇▇▇▇ ▇▇▇▇▇▇
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.
THUS DONE AND SIGNED by Hospitality at CAPE TOWN this 3 day of December 1999.
/s/▇▇▇▇ ▇▇▇▇▇▇
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THUS DONE AND SIGNED by Devco at CAPE TOWN this 3 day of December 1999.
/s/▇▇▇▇ ▇▇▇▇▇▇
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THUS DONE AND SIGNED by Senator at CAPE TOWN this 3 day of December 1999.
/s/▇▇▇▇ ▇▇▇▇▇▇
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18
ANNEXURE A
The following rights, privileges and conditions shall apply to the preference
shares (which for the avoidance of doubt shall not be cumulative) having a par
value of R1 each ("preference shares") in the capital of the company -
1. Each preference share shall confer on the holder the right to receive by
way of dividend in respect of each financial year of Bidco 0.1% (one tenth of
one per cent) of the after tax profits directly attributable to the Caledon
casino business in that year and prior to the payment of interest or capital on
shareholders' loans (other than shareholders loans provided in respect of the
casino business), subject to, as determined by the directors of Bidco in their
sole and absolute discretion, any working capital, capital expenditure
requirements, loan obligations and liabilities, attributable to the casino
business and after taking into account the amount of STC payable in relation to
the dividends on the preference shares and distributable reserves of the casino
business. The dividend (if any) shall be payable within 3 months after the
financial statements of Bidco have been audited and signed by the directors of
Bidco.
2. Should the casino business be wound up, each preference share shall
confer the right on the holder to receive out of funds which may lawfully be
applied for that purpose, in priority to the holders of all other classes of
shares in the share capital of the company, 0.1% (one tenth of one per cent) of
any surplus directly attributable to the casino business available for
distribution after payment of all other liabilities attributable to such casino
business.
3. Save as set out herein, the holders of the preference shares shall
not be entitled to participate in the profits of the company or any dividend
payable on the winding-up of the company.
4. The preference shareholders shall have the right to attend general
meetings and adjourned meetings of the company but shall not, save in
circumstances envisaged in section 194. of the Company's ▇▇▇ ▇▇▇▇, have the
right to vote at any such meeting.
5. Should any preference shareholder wish to dispose of its shares, it
shall be required to do so in accordance with the preemptive rights provisions
contained in the articles of association of the company.
6. The terms of the preference shares may not be modified, altered, varied,
added to or abrogated.
7. The preference shares shall not be redeemable except by agreement between
the company and the holders of the preference share willing to have them
redeemed.
19
ANNEXURE B
Basis of accounting for the casino business of Bidco for the sole purpose of
determining the profits available for distribution to the preference
shareholders and the amount to be distributed to the preference shareholders
1. DEFINITIONS
Words and expressions defined in this annexure shall bear the same meanings as
the agreement to which the annexure is annexed.
2. BOOKS OF ACCOUNT
2.1 Bidco shall maintain separate books of account for the casino business.
The casino business will be accounted for as a branch of Bidco with "branch
accounting" being used.
2.2 The branch accounts of the casino business ("branch accounts") will be
used to determine the profits available for distribution to the minority
shareholders.
3. CASINO BRANCH CAPITAL AND UNDISTRIBUTED PROFITS
3.1 The casino business will have an initial branch capital of R2.5 million
3.2 The cumulative branch profits of the casino business which have not been
distributed, whether by way of dividend to the minority shareholders or by
transfer to the remaining Bidco business, will be included as "retained
undistributed profits" in the branch accounts.
4. FINANCE FOR CASINO BUSINESS
Any finance obtained by Bidco (including for the avoidance of doubt,
shareholders' loans) which is related to the operation of the casino business
will be allocated directly to the casino business. The interest and other costs
and capital repayments of such finance will be met by the casino business prior
to the distribution of dividends to minority shareholders.
20
5. BRANCH FIXED ASSETS
All fixed assets directly relating to the casino business (for the avoidance of
doubt, excluding the casino premises which will be an asset of the remaining
Bidco business), will be included within the books of account of the casino
business. Similarly all liabilities directly attributable to the casino business
shall be recorded as such in the branch accounts and shall be taken into account
in determining the profits of the casino business available for distribution.
6. BANK ACCOUNTS AND WORKING CAPITAL
6.1 Separate bank accounts will be maintained for the casino business.
6.2 Surplus funds generated by the casino business will either be placed on
deposit with approved banking institutions or may be lent to the remaining Bidco
business on terms and conditions as to the repayment of capital and interest
only which reflect an arm's length basis.
6.3 If any working capital facilities are arranged by the remaining Bidco
business for the casino business, the casino business will be charged with the
cost of providing those facilities.
6.4 If any additional working capital is provided by the remaining Bidco
business to the casino business, the casino business will be charged for these
funds on an arm s length basis and will be required to repay such working
capital together with interest prior to any payments of dividends to the
minority shareholders.
7. SERVICES PROVIDED BY THE REMAINDER
7.1 Where services are provided to the casino business by the remaining
Bidco business, a charge will be made to the casino business on an arm's length
basis. Such services include but are not limited to the provision of the casino
premises and central resort services and the basis of these charges is set out
below.
21
7.2 Rent for the casino premises shall be based on the aggregate of cost of
the casino premises to Bidco and the premises leased to the Trust, commencing at
20% of cost and escalating at 9% per annum. The casino business shall bear all
costs attributable to such premises including but not limited to maintenance,
repairs, insurance and the like.
7.3 Central resort services and other shared services shall be based on the
actual cost of providing the services which will be allocated on a basis that
reflects usage.
7.4 The cost of any other services provided by the remaining Bidco business
shall be charged to the casino business on an arm's length basis.
8. COSTS AND INCOME OF THE CASINO OPERATION
It is intended that all costs and all income directly relating to the casino
business should be reflected in the branch accounts.
9. TAXATION
For the purposes of the branch accounts, the taxation charge relating to the
casino business will be calculated as if the casino business is a stand alone
company. STC relating to the payment of dividends to the minority shareholders
will be charged to the minority shareholders' portion of the casino business.
Payments of income tax (including advance payments of taxation) attributable to
the casino business will be charged to the casino business on the dates that the
payments are or would have been made to the authorities
10. BASIS OF PREPARATION OF BRANCH ACCOUNTS
The accounts of the casino business should be prepared using the same accounting
policies as used by Bidco in its statutory accounts and the manner of their
application thereof, subject to any differences which arise from the
intra-company transactions which will be eliminated on the preparation of the
company's statutory accounts (e.g. the intra-company charges for central
services and rent).
22
11. BRANCH ACCOUNTS TO BE PREPARED ANNUALLY
The branch accounts prepared at the financial year end of Bidco will be prepared
using an equivalent format, mutatis mutandis, to that used for the statutory
accounts of Bidco. In particular, the branch accounts will include a profit and
loss account, a balance sheet, a statement of source and application of funds
and a statement of the planned capital expenditure over the next two years. The
branch accounts will be sent to the minority shareholders. The costs of the
branch accounts shall be borne by the casino business.
12. BASIS OF DETERMINATION OF THE DISTRIBUTION TO BE MADE FROM THE BRANCH
On the basis of the position shown in those branch accounts, the directors of
Bidco will determine in their sole and absolute discretion the amount which can
properly be distributed from the after-tax profits shown in the branch accounts
having regard to any working capital, capital expenditure requirements, loan
obligations and liabilities of the casino business and after taking account of
the secondary tax payable in relation to the preference dividends and the
distributable reserves within Bidco. Notwithstanding the aforegoing the
directors shall in determining such distribution have regard to the fact that
the tax reflected in the 1999 branch accounts may be more than the amount
actually payable by Bidco as a consequence of any losses incurred by the
remaining business.
13. TRANSFER OF RESERVES TO THE REMAINING BIDCO BUSINESS
Simultaneously with the distribution of dividends to minority shareholders, the
balance of the after tax profits determined by the directors of the company as
available for distribution shall be transferred to the remaining Bidco business.
14. PREPARATION OF FINAL BRANCH ACCOUNTS
In the event that Bidco were to lose its casino licence, final accounts would be
prepared for the branch which would inter alia record the profit/loss arising on
the disposal of the fixed assets.
23
APPENDIX C
THE PROPERTIES
1. The properties owned by Caledon Hotel Spa & Casino Resort (Pty) Limited
are the following:
Remaining extent of the farm Oatlands South 408, Caledon Division Held by
Deed of Transfer No T 11255/1997
Portion 1 of the farm Oatlands South 408, Caledon Division Held by Deed of
Transfer No T 34201/1 997
Portion 3 of the farm Caledon Baths 560, Caledon Division Held by Deed of
Transfer T 44647/1 997
Erf2842Caledon
Held by Deed of Transfer T90028/1 998
Erf 2843 Caledon
Held by Deed of Transfer T 90032/1 998
Erf 2844 Caledon
Held by Deed of Transfer T 90032/1998
24
ADDENDUM TO THE AGREEMENT
between
CALEDON CASINO BID COMPANY (PTY) LIMITED
("Bidco")
and
CALEDON OVERBERG INVESTMENTS (PTY) LIMITED
("Caledon')
and
CENTURY CASINO'S AFRICA (PTY) LIMITED
and
CENTURY CASINO'S INC. (not as a shareholder or party. but for clauses 4.2.3
and 6.7 of this agreement only)
and
CALEDON HOTEL SPA AND CASINO RESORT (PTY) LIMITED
("Devco")
and
▇▇▇▇▇▇ ▇▇▇▇ HOSPITALITY (PTY) LIMITED
("Hospitality")
and
▇▇▇▇▇▇▇▇▇▇ COUNTRY HOTEL AND SPA (PTY) LIMITED ("Hotelco")
and
SENATOR TRUST
Dated 3 December 1999
25
It is hereby agreed that clause 26 of this agreement be deleted and that the
following new clause 26 is substituted.
26. ASSIGNMENT
This shareholder agreement will be binding upon aid inure to the benefit of the
parties hereto and their respective successors and permitted assigns but will
not be assignable or delegable by any party without the prior written consent of
the other party; provided, however, that nothing in this agreement is intended
to limit one signatory's or party's ability to assign its rights arid
responsibilities to any directly controlled affiliate, provided the prior
written consent of the other parties are obtained which' consent shall not
unreasonably be withheld.
THUS DONE AND SIGNED by Bidco at CAPE TOWN this 9 day of December 1999,
/s/▇▇▇▇ ▇▇▇▇▇▇
---------------
THUS DONE AND SIGNED by Caledon at CAPE TOWN this 9 day of December 1999.
/s/▇▇▇▇ ▇▇▇▇▇▇
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THUS DONE AND SIGNED by Century SA at CAPE TOWN this 9 day or December 1999
/s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------
▇▇▇▇▇ Hoetzlnger, Vice Chairman
Century Casino's Inc. signs for clauses 4.2.3 and 6.7 of this agreement
only;
. /s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Vice Chairman
Century Casino's Inc.
THUS DONE AND SIGNED by Hotelco at CAPE TOWN this 9 day of December 1999.
/s/▇▇▇▇ ▇▇▇▇▇▇
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THUS DONE AND SIGNED by Hospitality at CAPE TOWN this 9 day of December 1999.
/s/▇▇▇▇ ▇▇▇▇▇▇
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THUS DONE AND SIGNED by Devco at CAPE TOWN this 9 day of December 1999.
/s/▇▇▇▇ ▇▇▇▇▇▇
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THUS DONE AND SIGNED by Senator at CAPE TOWN this 9 day of December 1999.
/s/ ▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇. Trustee
26
