Exhibit 10.79
Casino Services Agreement dated January 4, 1999 by and between Casino Millennium
a.s., Century Casinos Management, Inc. and B.H. Centrum a.s.
CASINO SERVICES AGREEMENT
THIS CASINO SERVICES AGREEMENT (the "Agreement"), is made and entered
into as of the 4th day of January 1999, by and between CASINO MILLENNIUM a.s., a
corporation duly organized in the Czech Republic ("Owner") and CENTURY CASINOS
MANAGEMENT, INC., a corporation duly organized under the laws of Delaware, USA
("CCM"). B. H. CENTRUM a. s., a corporation duly organized in the Czech
Republic, shall be party to this Agreement for certain select paragraphs only
("BHC").
WITNESSETH
WHEREAS, Owner shall use its best efforts to obtain all necessary
approvals from the relevant authorities in the Czech Republic to develop and
operate a gaming/entertainment facility to be situated in the Marriott Hotel in
Praha, Czech Republic (the "Casino"), which is currently under construction and
scheduled to open in the second quarter of 1999, being developed by BHC, the
landlord of the gaming/entertainment facility to be developed and operated by
Owner; and
WHEREAS, this Agreement shall become effective only if Owner has
successfully secured all licenses and approvals necessary to develop and operate
the Casino as outlined in the above Whereas paragraph; and
WHEREAS, Owner desires to engage CCM to provide the expertise necessary
for the management of the Casino and CCM is willing to provide such services on
behalf of and for the account of Owner on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
I. APPOINTMENT OF CCM
1.1 Owner hereby appoints, hires and employs CCM, as Owner's exclusive
agent, to provide services for the management of the Casino on behalf of and for
the account of Owner during the term of this Agreement. CCM hereby accepts such
appointment upon and subject to the terms, conditions, covenants and provisions
set forth herein. CCM agrees to act in compliance with this Agreement and in
conformity with the approved Annual Operating Plan.
1.2 Owner hereby agrees that, subject to the limitations described
herein, CCM shall have uninterrupted control of the management of the Casino
during the term of this Agreement, and that CCM may provide its services free of
eviction or disturbance by Owner or any third party through or under Owner.
1.3 Prior to CCM's recommendation of employment of the general manager
of the Casino, CCM shall submit to Owner and BHC the resume of such individual
and Owner and BHC shall have the right to interview such individual prior to
such individual being hired for the Casino. CCM shall not employ (for Owner) any
individual as general manager, if Owner and BHC have a reasonable and good faith
material basis for disapproving, as asserted in a writing expressing such basis
for Owner's and BHC's disapproval. If Owner and BHC have a reasonable and good
faith material objection to the performance of any individual employed by CCM
(for Owner) as general manager at the Casino, Owner and BHC shall notify CCM of
such objection and CCM shall meet with Owner and BHC with respect to such
objection. Subject to compliance with applicable rules and regulations, CCM
shall take such steps as Owner and BHC may reasonably request with respect to
any objectionable general manager that are reasonably necessary to satisfy
Owner's and BHC's reasonable objections. CCM shall promptly notify Owner of any
actual or contemplated replacement of the general manager and shall comply with
the requirements of the preceding with respect to any such replacement.
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II. TERM OF AGREEMENT
2.1 Unless sooner terminated pursuant to the provisions of this
Agreement, the initial term of this Agreement shall be deemed to have commenced
as of the Effective Date and shall expire on the twentieth (20th) anniversary of
the Opening Date of the Casino. The term of this Agreement shall automatically
continue for a further period of five (5) years unless one party serves notice
to the other party of their intention to terminate this Agreement at the end of
the initial twenty (20) year term as defined above. Such notice must be in
writing and delivered to the other party by registered mail no later than six
months before the end of the initial twenty (20) year term.
2.2 This Agreement shall terminate upon the occurrence of any of the
following events: (i) the expiration of the term of Agreement; (ii) the
agreement by both parties in writing to terminate this Agreement; (iii) the
exercise of any termination right expressly granted to either Owner or CCM in
this Agreement.
2.3 All sums owed by either party to the other shall be paid
immediately upon termination of this Agreement. In the event of any termination
of this Agreement, Owner shall, notwithstanding such termination, be liable to
CCM for the fees earned and reasonable out-of-pocket expenses incurred by CCM in
conformity with this Agreement prior to such termination as follows: (i) any
unpaid accrued portion of the management fee (including any unpaid accrued
interest thereon), if any, plus (ii) all reimbursable costs to CCM which were
properly incurred prior to termination in connection with the performance of
CCM's obligations in conformity with this Agreement. If the termination of this
Agreement is a consequence of Owner's Default, Owner shall also be liable to CCM
for all reasonable costs (including, but not limited to, severance pay or
settlements and moving expenses of CCM's employees, if any, and any attorney's
fees, expenses, and losses as the result of such severance) incurred as a direct
result of Owner's Default. If the termination of this Agreement is a consequence
of CCM's Default, CCM shall not have the right to collect any amounts due CCM
under this section from the Bank Accounts. If Owner shall have properly
instituted a proceeding in arbitration or litigation arising from CCM's Default,
Owner shall have the right to place in escrow that portion of the amount due CCM
under clauses (i) and (ii) which is equal to the damages and expenses sought in
such proceeding by Owner as a result of CCM's Default, pending the release of
such funds to the appropriate party upon (i) the entry of any final
non-appealable award of damages or expenses to Owner, or (ii) any final
non-appealable decision by the relevant court or arbitrator in favor of CCM.
III. MANAGEMENT FEE
3.1 During the Term of this Agreement, CCM shall be paid the
management fee by Owner set forth herein. Failure to pay the management fee in
accordance with the time periods set forth in this Agreement shall constitute a
breach of this Agreement. The management fee shall be equal to ten percent (10%)
of the Casino's Gross Revenue, plus applicable VAT (DHP). The applicable
exchange rate for the computation of the management fee and VAT (DHP) shall be
the average exchange rate valid on the payment date as announced by the Czech
National Bank.
3.2 The fee described above shall be paid from Owner to CCM on the
first (1st) day of each month, for the preceding month. Owner hereby authorizes
CCM to pay itself the monthly management fee due from the Bank Accounts.
Notwithstanding the foregoing, all Operating Expenses shall be paid directly
from the Bank Accounts.
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IV. CASINO DEVELOPMENT, PRE-OPENING
4.1 As soon as practicable after the Effective Date of this Agreement
and after Owner and BHC have demonstrated and represented, to CCM's reasonable
satisfaction, that the hotel and Casino will be finished and ready-to-use on a
certain date, until the Casino is substantially completed (including the
installation of FF&E), CCM, either directly or through one or more of its
Affiliates, shall provide the technical and pre-opening services described
below:
(i) Approx. three months prior to the Estimated Opening Date, CCM
shall present to Owner and BHC for approval within thirty (30)
days, such approval shall not be unreasonably withheld, CCM's
development plan and schedule for developing the Casino as
well as a development and pre-opening budget for the Casino.
CCM shall consult with Owner and BHC in the preparation of the
development plan, provided Owner and BHC make its
representatives readily available for such consultation.
(ii) CCM will prepare specific operational and functional criteria
for the Casino for use by the architects and the designers in
the preparation of the plans and specifications;
(iii) CCM shall advise and consult with the architects in the
development of schematic, preliminary and working plans and
specifications and the designers in the selection and
specifications of FF&E;
(iv) CCM shall review, critique and make recommendations to
architects and the designers in the selection and layout of
the FF&E in accordance with the FF&E specifications and the
plans and specifications.
(v) CCM shall start to implement the marketing portion of the
development plan, including, but not limited to, direct sales,
media and direct mail advertising, promotion, publicity and
public relations designed to attract customers to the Casino
from and after the opening date.
(vi) CCM shall, and shall have the sole authority to, recruit,
hire, provide orientation to, train, supervise, promote and
determine the compensation (which must be within normal and
reasonable industry standards) of and discharge all executive
and general staff of the Casino on behalf of Owner, including
all Casino personnel to be utilized during the period from the
Effective Date hereto until the opening date in accordance
with the development plan.
4.2 Owner shall engage and retain, at Owner's sole cost and expense,
such architects, engineers, contractors, designers and other specialists as CCM
and Owner deem necessary to prepare all site plans, grading plans, construction
drawings, surveys, materials, specifications, architectural plans and drawings,
elevations, engineering plans and drawings, approved plans and all other plans,
drawings, studies or reports required for the construction of the Casino and for
the purchase and installation of the FF&E.
4.3 The FF&E shall (i) bear the name or identifying characteristic or
logo of the Casino, where appropriate, (ii) be generally consistent in quality
and relative scope with other public areas of the Marriott hotel, (iii) comply
with all applicable laws, rules and regulations, and (iv) upon CCM's request and
at CCM's discretion, identify, clearly visible to the customers, that the Casino
is operated in cooperation with Century Casinos.
4.4 The Casino shall be opened to the public on a date established by
Owner, BHC and CCM ("Estimated Opening Date") upon satisfaction of the
following: (i) the construction project managers have issued to Owner a
certificate of substantial completion confirming that the Casino and the hotel
have been substantially completed in accordance with the plans and
specifications, (ii) all operating permits (including, without limitation, a
certificate of occupancy or local equivalent, gaming/casino, currency exchange,
liquor and restaurant licenses and all permits, certificates and other licenses
required by any authority) have been obtained, (iii) the initial cash needs and
the working capital for the Casino as determined by CCM and the Casino Bankroll
have been furnished by Owner, (iv) CCM is satisfied that all operational systems
have been adequately tested on a "dry-run" basis to the satisfaction of CCM and
any appropriate governmental authorities, and (v) all other governmental
requirements necessary to open, occupy and operate the Casino have been
satisfied. CCM shall use all reasonable efforts in the performance of its duties
under this Agreement to assist Owner in achieving the satisfaction of all of the
foregoing requirements by the Estimated Opening Date.
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4.5 All costs and expenses properly incurred in connection with the
technical and pre-opening services of CCM ("Pre-Opening Expenses") shall be paid
from the Bank Accounts. Owner shall deposit, in advance, such sums in accordance
with the schedule as shall be established by the parties in the development plan
and Owner shall maintain sufficient funds therein to pay all Pre-Opening
Expenses in accordance with monthly schedules to be prepared by CCM and
submitted to, and approved by, Owner and BHC. CCM shall not incur any expenses
or make any disbursements that are not provided for, or are in excess of one
hundred twenty percent (120%) of any line item, in the development plan without
Owner's prior written consent; provided, however, that if a savings of up to
forty percent (40%) is obtained for a line item, such amount may be reallocated
so as to allow an excess disbursement in an amount up to the amount saved with
respect to another line item.
4.6 All development plans and schedules and cost budgets are intended
only to be reasonable estimates based on CCM's best business judgment and CCM
shall not be liable or responsible in any event if any of the budgeted figures
are not attained or there is any variance between the actual numbers and the
amounts set forth in any development plans, schedules or cost budgets. Owner
acknowledges that CCM has not made any guarantees, warranty or representation of
any nature in this regard.
V. CASINO OPERATIONS
5.1 On or before November 15 of each year, CCM shall submit to Owner
and BHC for approval within thirty (30) days, such approval shall not be
unreasonably withheld, an annual operating plan for the operation of the Casino
for the forthcoming year (each such approved annual operating plan is referred
to herein as an "Annual Operating Plan"), which shall include an annual
marketing plan, annual operating budget by month (the "Annual Operating
Budget"), annual estimate of key operating statistics, annual projection of
sources of cash, and a two (2) year projection of capital expenditures. The
Annual Operating Plan shall include sufficient amounts for maintenance and
repairs to keep the Casino in good operating condition. CCM will consult with
Owner and BHC in preparing the Annual Operating Plan, provided that Owner and
BHC make its representatives readily available for such consultations. If Owner
and CCM cannot agree on certain portions of the proposed Annual Operating Plan
or an Annual Operating Budget contained therein, the undisputed portions of the
proposed Annual Operating Plan or Annual Operating Budget shall be deemed to be
adopted and approved. With respect to objectionable items in any proposed Annual
Operating Budget, the corresponding item contained in the Annual Operating
Budget for the preceding year shall be substituted in lieu of the disputed
portions of the proposed Annual Operating Budget, excluding, however, line items
in the previous Annual Operating Budget for extraordinary expenses or revenues.
In any instance where a portion of an Annual Operating Budget from a preceding
year is deemed to be applicable to the Annual Operating Budget in effect until a
new Annual Operating Budget is fully approved, corresponding items contained in
the Annual Operating Budget for the preceding year shall be automatically
adjusted by a percentage equal to the percentage change in the Consumer Price
Index during the preceding year.
5.2 Except as provided elsewhere in this Agreement, CCM shall not,
without Owner's prior written consent, incur any expenses or make any
disbursements that are either not provided for in an Annual Operating Budget or
are in excess of one hundred and twenty percent (120%) of the amount approved
for a particular item in such Annual Operating Budget unless otherwise
permitted; provided, however, that if a savings of up to forty percent (40%) is
obtained for a line item, such amount may be reallocated so as to allow an
excess disbursement in an amount up to the amount saved with respect to another
line item. Any request by CCM to make any expenditure or incur any obligation in
excess of one hundred twenty percent (120%) of an amount set forth in the Annual
Operating Budget contained in the applicable Annual Operating Plan or which
falls into any category of expenditures which is required by any law to have the
prior approval of Owner, shall be submitted to Owner in writing with an
explanation of such expenditure. Owner shall respond to any request within ten
(10) days after the receipt thereof. If Owner fails to respond within such ten
(10) day period, the proposed expenditure shall be deemed approved.
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5.3 CCM may make, enter into and perform, in the name of, for the
account of, on behalf of, and at the expense of Owner, any contracts and
agreements provided for under this Agreement and each Annual Operating Plan and
Annual Operating Budget, so long as CCM has complied with all the requirements
of this Agreement with respect to such contracts and agreements. All costs and
expenses reasonably incurred by CCM or an Affiliate of CCM in accordance with
this Agreement, the Annual Operating Plan and the Annual Operating Budget shall
be for and on behalf of Owner and for Owner's account. All debts and liabilities
properly incurred by CCM under this Agreement to third parties on behalf of
either Owner or the Casino are and shall remain the sole obligations of Owner.
5.4 During the Term of this Agreement, CCM shall maintain full and
adequate books of account and records ("Books and Records") reflecting the
results of the operation of the Casino on an accrual basis, all in accordance
with generally accepted accounting principles and Czech accounting regulations
consistently applied in all material respects. The Books and Records shall be
kept separate and distinct from all other operations and businesses of CCM or
Affiliates of CCM. CCM shall keep all Books and Records, including, without
limitation, current vendor invoices, payroll records, general ledgers, credit
transactions and other records relating to the Casino at such location as shall
be approved by Owner in writing, subject to such record retention and storage
policies and access rights required by any casino authority and any other
applicable governmental requirements. All such Books and Records shall at all
times be the property of Owner and shall not be removed from the approved
location by CCM without Owner's written approval except as required by general
laws. Upon any termination of this Agreement, all Books and Records shall
immediately be turned over to Owner so as to ensure the orderly continuance of
the operation of the Casino, but (i) CCM may make and retain copies of all or
any portion of the Books and Records needed for its own record keeping and (ii)
such Books and Records shall be available to CCM for a period of five years
after termination of this Agreement at all reasonable times for inspection,
audit, examination and transcription of particulars relating to the period in
which CCM managed the Casino.
5.5 All Annual Operating Plans and Budgets are intended only to be
reasonable estimates based on CCM's best business judgment and CCM shall not be
liable or responsible in any event if any of the budgeted figures are not
attained or there is any variance between the actual revenues and expenditures
and the amounts set forth in any Annual Operating Plans and Budgets. Owner
acknowledges that CCM has not made any guarantees, warranty or representation of
any nature concerning or related to the amounts of Gross Gaming Revenue to be
generated and Operating Expenses to be incurred from the operation of the Casino
during the term of this Agreement.
5.6 CCM shall have the discretion and authority to determine operating
policies and procedures, standards of operation, staffing levels and
organization, win payment arrangements, standards of service and maintenance,
pricing, and other policies affecting the Casino, or the operation thereof, to
implement all such policies and procedures, and to perform any act on behalf of
Owner which CCM deems necessary or desirable in its good faith business judgment
for the operation and maintenance of the Casino on behalf, for the account and
at the expense of Owner in order to maximize Owner's benefits from the operation
of the Casino. CCM shall apply the same standards of care and diligence as if it
were the Owner.
5.7 Owner shall establish one or more bank accounts that are necessary
for the operation of the Casino at various banking institutions chosen by Owner
and CCM (such accounts are hereinafter collectively referred to as the "Bank
Accounts"). The accounts shall be in the name of Owner, but, except as provided
in the following sentence, CCM's designees shall be the only persons authorized
to draw upon the Bank Accounts. If CCM has committed an Event of Default which
continues during the term of any applicable cure periods, or if CCM has acted in
bad faith with respect to Owner's funds in the Bank Accounts, then Owner shall
have the right to assume sole control of the Bank Accounts upon ten (10)
business days' prior written notice to CCM, whereupon the signatures of two (2)
members of Owner shall be required to draw upon the Bank Accounts. The Bank
Accounts shall be interest bearing accounts if such accounts are reasonably
available and all interest thereon shall be credited to the Bank Accounts. All
Gross Revenues received by CCM from the operations of the Casino shall be
deposited in the Bank Accounts and CCM shall pay out of the Bank Accounts, to
the extent of the funds therein, from time to time, all Operating Expenses and
other amounts required by CCM to perform its obligations under this Agreement.
Owner shall bear the risk of the insolvency of any financial institution holding
such Bank Accounts.
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5.8 Without limiting the generality of this section, in the event that
a condition exists in, on, or about the Casino of a nature reasonably believed
by CCM to be an emergency, including structural repairs, which CCM believes
requires immediate repair to preserve and protect the Casino and assure its
continued operation or to protect the safety and welfare of the Casino's
customers, guests or employees, CCM, on behalf of and at the expense of Owner,
shall take all reasonable steps and make all reasonable expenditures necessary
to repair and correct any such condition, whether or not provisions have been
made in the applicable budgets for any such emergency expenditures. Expenditures
made by CCM in connection with an emergency shall be paid from the Bank
Accounts. Owner shall replenish funds paid from the Bank Accounts with any
insurance proceeds, if any, received by Owner with respect to such emergency
condition or situation, and Owner shall replace any difference between the
insurance proceeds, if any, and the amount used for such emergency from the Bank
Accounts. CCM shall promptly notify Owner of any emergency expenditures made
pursuant to this section.
5.9 CCM shall provide Owner and BHC with daily revenue and monthly
financial statements concerning the operation of the Casino without delay for
appropriate invoicing under Owner's Lease Agreement with BHC.
VI. EVENTS OF DEFAULT
6.1 The occurrence of any one or more of the events described in this
section which is not cured within the time permitted shall constitute a default
under this Agreement (hereinafter referred to as a "Default" or an "Event of
Default") as to the party failing in the performance or effecting the breaching
act.
a) CCM's Defaults. CCM shall have committed a "CCM's Default" if
CCM shall:
(i) file a voluntary petition in bankruptcy or
insolvency, or a petition for relief or
reorganization under any bankruptcy or insolvency
law;
(ii) consent to an involuntary petition in bankruptcy or
fail to vacate any order approving an involuntary
petition within sixty (60) days from the date of
entry thereof;
(iii) assign for the benefit of its creditors all or any
substantial part of its assets, or consent to the
appointment of a receiver, liquidator, custodian or
trustee in bankruptcy for CCM of all or any
substantial part of its assets;
(iv) fail to materially perform or materially comply with
any of the covenants, agreed terms or conditions
contained in this Agreement applicable to CCM (other
than monetary payments) and such failure shall
continue for a period of forty-five (45) days after
written notice thereof from Owner to CCM specifying
in detail the nature of such failure, or, in the case
such failure is of a nature that it cannot, with due
diligence and good faith, be cured within forty-five
(45) days, if CCM fails to proceed promptly and with
all due diligence and in good faith to cure the same
and thereafter to prosecute the curing of such
failure to completion with all due diligence within
ninety (90) days thereafter.
If the only result of the failure by CCM to act is a monetary loss to Owner
which is not otherwise capable of being cured by CCM, then CCM shall not be in
Default if CCM reimburses Owner for such losses within ninety (90) business days
of incurring such loss or otherwise protects Owner against such loss in a manner
reasonably acceptable to Owner.
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b) Owner's Default. Owner shall have committed an "Owner's Default" if
Owner shall:
(i) file a voluntary petition in bankruptcy or
insolvency, or a petition for relief or
reorganization under any bankruptcy or insolvency
law;
(ii) consent to an involuntary petition in bankruptcy or
fail to vacate any order approving an involuntary
petition within sixty (60) days from the date of
entry thereof;
(iii) assign for the benefit of its creditors all or any
substantial part of its assets, or the consent to the
appointment of a receiver, liquidator, custodian or
trustee in bankruptcy for all or any substantial part
of its assets;
(iv) fail to make any monetary payment required under this
Agreement, including, but not limited to, the
management fee or Owner's Advances, on or before the
due date recited herein and said failure continues
for thirty (30) business days after written notice
from CCM specifying such failure; or
(v) fail to perform or materially comply with any of the
other covenants, agreements, terms or conditions
contained in this Agreement applicable to Owner and
such failure shall continue for a period of
forty-five (45) days after written notice thereof
from CCM to Owner specifying in detail the nature of
such failure, or, in the case such failure is of a
nature that it cannot, with due diligence and good
faith, cure within forty-five (45) days, if Owner
fails to proceed promptly and with all due diligence
and in good faith to cure the same and thereafter to
prosecute the curing of such failure to completion
with all due diligence within ninety (90) days
thereafter.
6.2 Upon the occurrence of a CCM's Default, Owner shall be entitled to
(i) terminate this Agreement by Owner's written notice of termination to CCM and
such termination shall be effective fifteen (15) days after delivery of such
notice; or (ii) obtain specific performance of CCM's obligations hereunder and
injunctive relief. In the event of a termination of this Agreement pursuant to
clause (i) of this section, Owner shall be entitled to a payment, as liquidated
damages, in the amount of the projected Management Fee for the twelve (12) month
period following the termination. Upon the occurrence of an Owner's Default, CCM
shall be entitled to (a) terminate this Agreement by CCM's written notice of
termination to Owner, and such termination shall be effective thirty (30) days
after delivery of such notice or such time as a new management services company
is appointed, whichever is earlier; or (b) obtain specific performance of
Owner's obligations hereunder and injunctive relief. In the event of a
termination of this Agreement pursuant to clause (a) of this section, CCM shall
be entitled to accelerated payment of its projected Management Fee for the
twelve (12) month period following the termination date of this Agreement. The
projection for the Management Fee shall be based on the estimated revenues for
the Casino in the Casino's most recent Annual Operating Budget. The parties
hereby agree that the amount payable as liquidated damages described above is a
reasonable estimate of the amount of damages for termination of this Agreement
arising out of such CCM or Owner Default and the termination of this Agreement
and upon payment thereof CCM or Owner, respectively, shall have no further
rights, claims or entitlement to damages as a consequence of such termination.
6.3 No delay or omission as to the exercise of any right or power
accruing upon any Event of Default shall impair the non-defaulting party's
exercise of any right or power or shall be construed to be a waiver of any Event
of Default.
7. CERTAIN RIGHTS AND RESPONSIBILITIES OF OWNER
7.1 Owner shall advance to CCM on a timely and prompt basis immediately
available funds with which to conduct the affairs of and maintain the Casino
(hereafter referred to as "Owner's Advances") as set forth in this Agreement and
as otherwise provided hereunder.
7.2 Owner shall timely fund to CCM the initial amounts agreed to by the
parties set forth in the development plan or any revisions thereof approved by
Owner. In the event that Owner or CCM anticipates a delay in the opening of the
Casino beyond the Estimated Opening Date, each shall be obligated to immediately
notify the other in writing and Owner shall, at the request of CCM, at any time
and from time to time, deposit with CCM any additional amounts that are
reasonably necessary to pay the additional Pre-Opening Expenses attributable to
the delay, which shall include, without limitation, wages and other expenses
relating to the Casino's personnel already employed.
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7.3 Thirty (30) days prior to the Estimated Opening Date, Owner shall
fund to CCM the working capital necessary to commence operating the Casino, as
established by CCM. During the term of this Agreement, within five (5) business
days after receipt of written notice from CCM, Owner shall fund Owner's Advances
adequate to insure that the working capital is sufficient to support the
uninterrupted and efficient ongoing operation of the Casino. The written request
for any additional working capital shall be submitted by CCM to Owner on a
quarterly basis based.
7.4 CCM shall pay from Gross Gaming Revenues the following items
on or immediately before their applicable due date:
(i) Operating Expenses (including the management fee) and
emergency expenditures, if any; and
(ii) Payments due on any purchase or other financing
arrangements relating to the FF&E, and any other
expenditures permitted by any Annual Operating Plan;
and
(iii) Any other taxes, expenses or fees which Owner is
obligated to pay out of Gross Revenues by contract,
as long as such contract has been brought to the
attention of CCM and Owner has requested, in writing,
that CCM shall provide this service for the account
of Owner, or under law.
CCM's responsibility to make any of the foregoing payments is subject to and
conditioned upon Owner making available funds sufficient to make such payments
from Gross Revenue or otherwise in the order set forth above.
7.5 In addition to the initial cash needs, at least fifteen (15) days
prior to the Estimated Opening Date, Owner shall provide the initial Casino
Bankroll and shall maintain such amount throughout the term of this Agreement.
If the Casino Bankroll required to be provided by Owner is not sufficient or is
depleted as a result of losses, Owner shall fund the Casino Bankroll in an
amount sufficient to carry on the Casino's operations and in a manner which
complies with governmental requirements
7.6 Owner and CCM shall cooperate fully with each other during the term
of this Agreement to facilitate the performance by CCM of CCM's obligations and
responsibilities set forth in this Agreement and to procure and maintain all
permits. Owner shall provide CCM with all such information necessary to the
performance by CCM of its obligations hereunder as may be reasonably and
specifically requested by CCM from time to time.
7.7 CCM acknowledges that BHC has the right to terminate the
lease/rental contract (entered into between BHC and Owner) for the casino
premises in the Marriott Hotel Praha, in case both of the following conditions
apply: (i) the average rental payment (which is calculated as a percentage of
the Casino's Gross Revenue) equals less than twenty-five Deutsche Xxxx (DM 25)
per square meter per month during any twelve months period, beginning after the
second anniversary of the Opening Date, and (ii) the Annual Operating Plan and
Budget for the next (after a twelve month period as defined under (i) above)
twelve months period fails to show a trend towards achieving such DM 25
benchmark. Should both conditions apply and BHC elect to terminate the
lease/rental contract, the Owner shall have the right to terminate this
Agreement. This DM 25 benchmark is subject to indexation applying the German
Consumer Price Index.
7.8 Owner shall further have the right to terminate this Agreement, in
case more than one of the members of CCM's Prague Project Committee of the Board
of Directors loses or be removed from the management and control of CCM.
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VIII. INSURANCE, DAMAGE
8.1 Owner and CCM shall procure all insurance coverages deemed
necessary and adequate, subject in each case to reasonable deductible amounts as
determined by Owner and CCM. The premiums for all insurance obtained and the
uninsured portion of any loss to which such insurance relates shall be Operating
Expenses.
8.2 In the event of a Minor Casualty, CCM shall repair any damage or
destruction at Owner's sole cost and expense. In the event of a Major Casualty,
Owner shall have the option, to repair and restore the damaged or destroyed
premises.
IX. MISCELLANEOUS
9.1 All notices, demands, consents, requests, approvals, and other
communications required or permitted hereunder shall be in writing and shall be
deemed effective only upon delivery (whether receipt is accepted or refused) at
the addresses set forth below (or at such other addresses as shall be given in
writing by any party to the others in accordance with this section). Notices may
be delivered by hand, registered or certified mail, return receipt requested, or
bonded private courier service.
If to Owner: Casino Millennium a.s.
Xx Xxxxxxxx 00
000 00 Xxxxx 1
Att.: Vorsitzender des Vorstands
Gernot Leuthmetzer
with a copy to: B. H. Centrum a.s.
Xxxxxxxxx 0
000 00 Xxxxx 0
If to CCM: Xxxxx Haitzmann
200 - 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx Xxxxx, XX. 00000, XXX
with a copy to: Schellmann & Partner
Xxxxxxxxxxxx 0
0000 Xxxxxxx, Xxxxxxx
9.2 This Agreement shall be governed by the laws of the Czech Republic.
The forum for any actions between Owner and CCM will be a court of competent
jurisdiction in Prague.
9.3 This Agreement shall 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 CCM's ability to assign its rights or delegate its
responsibilities under this Agreement to any directly or indirectly controlled
Affiliate of Century Casinos, Inc.
9.4 If any provision herein shall be held invalid or unenforceable,
such provision shall not affect the validity or enforceability of any other
provisions hereof, all of which other provisions shall, in such case, remain in
full force and effect.
9.5 This Agreement constitutes the entire understanding of the parties
with respect to the subject matter hereof and supersedes all other oral or
written agreements between the parties. This Agreement may not be amended,
modified, altered or waived, in whole or in part, except by a subsequent writing
signed by each of the parties hereto.
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9.6 Except as otherwise set forth elsewhere in this Agreement, both
parties shall maintain confidentiality with respect to any developments in the
course of the development and operation of the Casino. Except as required by any
general law (including, without limitation, federal securities exchange and
stock exchange or NASD requirements) and casino authorities, material
confidential information shall only be made available to such of a party's
employees and consultants as are required to have access to the same in order
for the recipient party to adequately use such information for the purposes for
which it was furnished. Any person to whom such information is disclosed shall
be informed of its confidential nature and shall agree to keep it confidential
as provided herein. Information provided by one party to the other shall be
presumed confidential unless the information is (i) published or in the public
domain other than as a result of any action by the recipient thereof, (ii)
disclosed to the recipient by a third party, or (iii) presented to the recipient
under circumstances which clearly and directly indicate the delivering party
does not intend such information to be confidential.
9.7 In the event of litigation or arbitration of any dispute or
controversy arising from, in, under or concerning this Agreement and any
amendments hereof, including, without limiting the generality of the foregoing,
any claimed breach hereof, any suit for accounting, or action for dissolution,
the prevailing party in such action or arbitration shall be entitled to recover
from the other party in such action or arbitration, such sum as the court or
arbitrator shall fix as reasonable attorneys' fees and expenses incurred by such
prevailing party.
9.8 No consent or waiver, express or implied, by any party to or of any
breach or default by any other party in the performance by the other of its
obligations hereunder shall be deemed or construed to be a consent or waiver to
or of any other breach or default in the performance by the other party of the
same or any other obligations of such party hereunder. Failure on the part of
any party to complain of any act or failure to act of the other party or to
declare the other party in default, irrespective of how long such failure
continues, shall not constitute a waiver by any such party of its rights
hereunder.
9.9 During the term of this Agreement, so long as no events of default
by CCM have occurred, Owner shall grant CCM the first right of refusal on all of
its and/or its Affiliates' future gaming casino projects. Such right shall be on
terms substantially similar to those outlined in this Agreement. CCM shall have
sixty (60) days upon receipt of notice from Owner to either accept or reject an
offer to act as CCM of Owner's and/or Owner's Affiliates' future gaming casino
project(s).
9.10 CCM, or any of its Affiliates, shall not, during the term of this
Agreement, manage or operate any other casino in Prague without the previous
written consent of Owner and BHC.
9.11 CCM has the right to remove itself from (terminate) this Agreement
in case it reasonably determines that any casino license currently held or
applied for by any company within the Century Casinos group of companies might
be threatened or put in jeopardy because of this Agreement. In addition, CCM
shall have the right to immediately terminate this Agreement in case any of the
following conditions occur:
The composition of Owner's members of the board or members of the
supervisory board is changed without CCM's written consent; Any of the
shareholders of Owner sells, pledges or otherwise disposes of his (her)
shares in Owner without CCM's written consent.
9.12 Exhibit A ("Definitions") shall be an integral part of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date and year first above written.
FOR CASINO MILLENNIUM a. s.
By:/s/ Xxxxx Xxxxxxxx By:/s/ Xxxxxx Xxxxxx
---------------------------- --------------------------------
a duly authorized signatory a duly authorized signatory
Position: Shareholder Position: Shareholder
Print name: Xxxxx Xxxxxxxx Print name: Xxxxxx Xxxxxx
By:/s/ Gernot Leuthmetzer By:/s/ Xxxxx Xxxxxxxxxx
---------------------------- --------------------------------
a duly authorized signatory a duly authorized signatory
Position: Member of the Board Position: Member of the Board
Print name: Gernot Leuthmetzer Print name: Xxxxx Xxxxxxxxxx
FOR CENTURY CASINOS MANAGEMENT, INC.
By:/s/ Xxxxx Haitzmann By:/s/ Xxxxx Xxxxxxxxxx
---------------------------- --------------------------------
a duly authorized signatory a duly authorized signatory
Position: Chairman Position: Vice Chairman
Print name: Xxxxx Haitzmann Print name: Xxxxx Xxxxxxxxxx
B. H. CENTRUM a. s. for paragraphs 1.3, 4.1 (i), 4.4, 5.1, 5.9, 7.7, 9.10 and
the first WHEREAS clause only:
By:/s/ Gernot Leuthmetzer By:/s/ Xxxxxx Xxxxxxxxxx
---------------------------- --------------------------------
a duly authorized signatory a duly authorized signatory
Position: Member of the Board Position: Member of the Board
Print name: Gernot Leuthmetzer Print name: Xxxxxx Xxxxxxxxxx
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DEFINITIONS EXHIBIT A
Affiliate. The term "Affiliate" shall mean a Person that directly or indirectly,
or through one or more intermediaries, controls, is controlled by, or is under
common control with the person in question and any stockholder or partner of any
person referred to in the preceding clause owning more than fifty percent (50%)
or more of such person.
Casino. The term "Casino" means the casino facility, including improvements and
fixtures, at the Praha Marriott Hotel, consistent with the concepts set forth in
the development plan and in accordance with the plans and specifications.
Casino Bankroll. The term "Casino Bankroll" shall mean an amount of monies
determined by CCM as necessary to provide cash-on-hand monies required to
operate and maintain the Casino's operation, but in no event shall such amount
be less than the amount required by law. In no event shall the Casino Bankroll
include amounts necessary to provide for the payment of Operating Expenses,
Working Capital or initial cash needs. The Casino Bankroll shall include the
funds in the separate accounts in CCM's name plus any funds located on the
casino tables, in the gambling devices, cages, vault, counting rooms, or in any
other location in the Casino where funds may be found.
Default Rate. The term "Default Rate" shall mean the lesser of (i) the reference
or prime commercial lending rate in the Czech Republic, plus three percent (3%)
per annum, or (ii) the highest rate permitted by applicable law, to the extent
applicable law establishes a maximum rate of interest which may be charged with
respect to obligations of the type of questions, until paid.
Effective Date. The term "Effective Date" shall mean the date when Owner has
received Owner's Gaming License.
CCM's Prague Project Committee of the Board of Directors. The term "CCM's Prague
Project Committee of the Board of Directors" shall mean Xxxxx Haitzmann, Xxxxx
Xxxxxxxxxx and Xxxxxxx Teufelberger.
FF&E. The term "FF&E" shall mean all furniture, furnishings, equipment, and
fixtures, including gaming equipment, computers, housekeeping and maintenance
equipment, necessary or appropriate to operate the Casino in conformity with
this Agreement.
Gross Revenue. The term "Gross Revenue" shall mean all gaming receipts less all
sums paid out as winnings in connection therewith, plus all other revenue
generated within the Casino, such as bar, merchandise, currency exchange, and
similar.
Major Casualty. The term "Major Casualty" shall mean any casualty or accident
which prevents or substantially impairs the conduct of the Casino's business and
the ability to earn or generate revenues.
Minor Casualty. The term "Minor Casualty" shall mean any casualty or accident
other than a Major Casualty.
Opening Date. The term "Opening Date" shall mean the first date a revenue-paying
customer is admitted to the Casino.
Operating Expenses. The term "Operating Expenses" shall mean those necessary or
reasonable operating expenses, including, without limitation, costs of operating
supplies, payroll and benefits, marketing, administration, maintenance, energy
and all costs and expenses of licensing CCM's or Owner's employees, incurred on
behalf of Owner after the Opening Date in connection with conducting and
operating the Casino, computed on an accrual basis, deductible under Generally
Accepted Accounting Principles in determining "Operating Income" (as defined in
casino industry practice) for purpose of preparing a statement of operations for
the Casino as well as taxes and other payments due any governmental authorities;
provided, however, Operating Expenses shall not include depreciation or
amortization with respect to the Casino or the F, F&E, debt service or capital
replacements deposits. Operating Expenses shall include the management fee under
this Agreement and the rent under the Lease Agreement between Owner and BHC.
Owner's Gaming License. The term "Owner's Gaming License " shall mean the
license necessary to operate the Casino.
Working Capital. The term "Working Capital" shall mean such amount in the Bank
Accounts as will be sufficient to reasonably assure the timely payment of all
current liabilities of the Casino and the uninterrupted and efficient operation
of the Casino during the term of this Agreement to permit CCM to perform its
responsibilities and obligations hereunder, all as contemplated by the
applicable Annual Operating Plan with reasonable reserves for unanticipated
contingencies and for short term business fluctuations resulting from monthly
variations between the Annual Operating Plan and actual operating expenses.
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