March 27, 1996
CHC Casinos Canada Limited
c/o CHC International, Inc.
3250 Mary Street
Miami, Florida
U.S.A. 33133
Attention: Sherwood M. Weiser
Peter Temling
Dear Sirs:
Carnival Corporation (the "Lender"), a Panama Corporation,
understands that CHC Casinos Canada Limited (the "Borrower"), a Nova
Scotia corporation created for the sole purpose of operating and
managing the Rama Casino (as defined below), has entered into an
operating agreement dated March 18, 1996 (the "Rama Operating
Agreement") with Casino Rama Inc. ("Rama"), an Ontario corporation,
certain affiliates of Rama and the Ontario Casino Corporation
("OCC"), whereunder the Borrower will provide casino management
services to OCC and Rama with respect to the operation of the Rama
Casino (as defined below) in consideration for base management fees
and incentive fees. The Lender understands that, pursuant to the
provisions of the Rama Operating Agreement, the Borrower is obliged
to provide an unsecured, subordinated, limited recourse loan to Rama
in the principal amount of up to U.S.$25,000,000 (the "Rama Loan")
all in accordance with the Rama Operating Agreement. The Lender
further understands that the availability of the Rama Senior Debt
(as defined below) is contingent on Rama obtaining the Rama Loan
from the Borrower.
Accordingly, the Lender is pleased to offer the Borrower a
term credit facility in the amount of U.S.$25,000,000 (the
"Amount"), subject to the terms and conditions set out below (the
"Credit Facility"). It is a condition to the provision of the
Credit Facility that the obligations of the Borrower under the
Credit Facility shall be guaranteed by CHC International, Inc. (the
"Guarantor"), a Florida corporation.
SECTION 1 - INTERPRETATION
1.1 Definitions. In this Agreement,
(a) "Accrued Opening Date Interest Amount" has the meaning given to
it in Section 5(a).
(b) "Agreement" means this letter agreement as the same may be
amended, modified, supplemented, restated or replaced from time to
time.
(c) "Amount" has the meaning given to it in the forepart of this
Agreement.
(d) "Available Cash Flow" means in respect of any month, all amounts
payable to the Borrower during such month on account of (i)
management or other fees pursuant to the Rama Operating Agreement,
and (ii) payment or repayment of all or any part of the Rama Loan
including, without limitation, all payments or repayments on account
of principal, interest and fees in respect of the Rama Loan but
excluding, in either case, amounts which may be limited by the loan
documents to be executed in connection with the Rama Senior Debt;
provided that Available Cash Flow in respect of each of the six
months immediately following the Opening Date shall be the Available
Cash Flow calculated in respect of such month in accordance with the
foregoing sentence less Cdn.$166,670.
(e) "Borrowing" has the meaning given to it in Section 2.
(f) "Business Day" means a day, excluding Saturday, Sunday, and any
other day which shall be in the City of Toronto or the City of Miami
a legal holiday or a day on which banking institutions are closed.
(g) "Canadian Dollars" and the symbols "Cdn$" and "$" each means
lawful money of Canada.
(h) "Credit Facility" has the meaning given to it in the forepart
of this Agreement.
(i) "Encumbrance" means any mortgage, charge, lien, hypothec, trust,
encumbrance, charge, pledge, assignment, security interest, title
retention or any other security arrangement of whatsoever nature or
kind.
(j) "Equivalent Amount" means, with respect to any given amount of
any currency, the amount of any other currency required to purchase
that amount of the first currency in Toronto in accordance with the
Lender's usual procedures.
(k) "Event of Default" has the meaning given to it in Section 10.
(l) "GAAP" means U.S. generally accepted accounting principles.
(m) "Guaranty Agreement" means the guaranty agreement of date even
herewith given by the Guarantor in favour of the Lender with respect
to the obligations of the Borrower hereunder.
(n) "Initial Payment Date" has the meaning given to it in Section
5(b).
(o) "OCC" has the meaning given to it in the forepart of this
Agreement.
(p) "Opening Date" means the date on which the Rama Casino opens to
the public at large.
(q) "Operating Year" means:
(i) the period commencing on the Opening Date and ending on the
first Repayment Date, inclusive,
and thereafter,
(ii) a period commencing on the day immediately following a
Repayment Date and ending on the next following
Repayment Date, inclusive.
(r) "Post-Opening Interest" has the meaning given to it in Section
5(b).
(s) "Promissory Note" has the meaning given to it in Section 2(c).
(t) "Rama" has the meaning given to it in the forepart of this
Agreement.
(u) "Rama Casino" means the casino operation of Rama located on the
reserve of the Chippewas of Rama First Nation, Ontario, Canada.
(v) "Rama Commitment Letter" means the commitment letter dated
February 22, 1996 addressed to the Guarantor from The Bank of Nova
Scotia in respect of the Rama Senior Debt as supplemented by a
letter dated February 29, 1996 from Aird & Berlis, counsel to The
Bank of Nova Scotia.
(w) "Rama Loan" has the meaning given to it in the forepart of this
Agreement.
(x) "Rama Operating Agreement" has the meaning given to it in the
forepart of this Agreement.
(y) "Rama Senior Debt" means the credit facilities to be provided
to Rama pursuant to the loan agreement to be entered into between
Rama as borrower, OCC, Borrower, certain affiliates of Rama and
Borrower, the lenders named therein and The Bank of Nova Scotia as
agent for the lenders, in accordance with the terms of the Rama
Commitment Letter.
(z) "Repayment Date" has the meaning given to it in Section 5(c).
(aa) "Termination Date" has the meaning given to it by Section
5(c).
(bb) "US Dollars" and "US$" each means lawful money of the
United States of America in same day immediately available funds or,
if such funds are not available, the form of money of the United
States of America that is customarily used in the settlement of
international banking transactions on the day payment is due
hereunder.
1.2 Headings. The division of this Agreement into articles,
sections, subsections, paragraphs, subparagraphs, clauses and
schedules and the insertion of headings are for convenience of
reference only and do not affect the construction or interpretation
of this Agreement.
1.3 References. Unless otherwise specified, references to Articles,
Sections and Schedules are to Articles and Sections of, and
Schedules to, this Agreement.
1.4 Number and Gender. Unless otherwise specified, words importing
the singular include the plural and vice versa and words importing
gender include all genders.
1.5 Time of Day. Unless otherwise specified, references to time of
day or date mean local time or date in the City of Toronto, Province
of Ontario.
1.6 Governing Law. This Agreement and each of the documents
contemplated by or delivered under or in connection with this
Agreement is governed by, and will be construed and interpreted in
accordance with, the laws of the Province of Ontario and the laws
of Canada applicable in the Province of Ontario without regard to
principles of conflicts of laws.
1.7 Attornment. Each of the parties irrevocably attorns to the non-exclusive
jurisdiction of the courts of the Province of Ontario.
1.8 Conflict. If there is a conflict between the provisions of this
Agreement and the provisions of any other document contemplated by,
or delivered under or in connection with, this Agreement, the
provisions of this Agreement prevail.
1.9 Severability. If any provision of this Agreement is or becomes
illegal, invalid or unenforceable in any jurisdiction, the
illegality, invalidity or unenforceability of that provision will
not affect:
(a) the legality, validity or enforceability of the remaining
provisions of this Agreement; or
(b) the legality, validity or enforceability of that provision
in any other jurisdiction.
1.10 Time of Essence. Time is of the essence for every
provision of this Agreement.
1.11 Statutory References. Each reference to an enactment is
deemed to be a reference to that enactment, and to the regulations
made under that enactment, as amended or re-enacted from time to
time.
1.12 Schedules. The following Schedules are attached to and
form part of this Agreement:
Schedule Description
Schedule A Form of Promissory Note
Schedule B Form of Certificate of the Borrower's
Chief Financial Officer.
1.13 Entire Agreement. This Agreement together with all
documents contemplated by or delivered under or in connection with
this Agreement, constitutes the entire agreement between the parties
with respect to the subject matter and supersedes all prior
agreements, negotiations, discussions, undertakings,
representations, warranties and understandings, whether written or
verbal.
1.14 GAAP. Unless otherwise specified, each accounting term not
otherwise defined in this Agreement has the meaning given to it, and
each calculation is to be made and each financial statement is to
be prepared, in accordance with GAAP.
1.15 Rules of Construction. Each party acknowledges that it and
its legal counsel have reviewed and participated in settling the
terms of this Agreement and that any rule of construction or
interpretation to the effect that any ambiguity is to be resolved
against the drafting party will not be applicable in the
construction or interpretation of this Agreement.
1.16 No Waiver. No failure, omission or delay on the part of
the Lender in exercising any right, power or privilege hereunder
shall impair such right, power or privilege or operate as a waiver
thereof nor shall any single or partial exercise of any right, power
or privilege preclude any further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies
herein provided are cumulative and not exclusive of any rights and
remedies provided by law.
SECTION 2 - CREDIT FACILITY
The Credit Facility is available as follows:
(a) The Borrower may, at any time and from time to time
prior to the Opening Date, draw down amounts which shall be not less
than US$5,000,000 and in an integral multiple of US$1,000,000 if in
excess thereof (each such amount being referred to herein as a
"Borrowing"), provided that the aggregate amount of all Borrowings
shall not exceed the Amount. After the Opening Date, no new
Borrowings shall be available under the Credit Facility. Upon the
occurrence and continuance of an Event of Default, the Lender shall
be under no further obligation to advance any new Borrowing
hereunder.
(b) The Lender shall advance to the Borrower the amount of
each Borrowing drawn down by the Borrower in accordance with
paragraph (a) above within two (2) Business Days of receipt by the
Lender of written notice of such drawdown in the form attached
hereto as Schedule C. Such advance shall be in immediately
available funds by wire transfer to such account as the Borrower may
direct in writing. For greater certainty, no written notice of a
drawdown hereunder made within five (5) Business Days of the Opening
Date shall be binding on the Lender and no advance to the Borrower
shall be made by the Lender after the Opening Date.
(c) The obligation of the Borrower to repay the Credit
Facility shall be further evidenced by a promissory note the form
attached hereto as Schedule A (the "Promissory Note"), which shall
be dated as of the date hereof and shall be executed and delivered
to the Lender simultaneously with the execution and delivery of this
Agreement. The Promissory Note shall be deemed to reflect the
aggregate unpaid principal amount of all indebtedness outstanding
under the Credit Facility, whether or not the face amount of such
note is in excess of the amount actually outstanding from time to
time. The Promissory Note will be executed by the Borrower in
Toronto, Ontario and delivered to the Lender in Toronto, Ontario.
(d) The Borrower may not reborrow any portion of the Credit
Facility repaid to the Lender.
SECTION 3 - PURPOSES
The proceeds of the Credit Facility shall be used by the
Borrower only for the purpose of advancing such proceeds to Rama by
way of the Rama Loan as provided in the Rama Operating Agreement.
The terms of the Rama Loan shall provide, inter alia, that the
proceeds of the Rama Loan shall be used only for the purpose of the
development and construction of the Rama Casino.
SECTION 4 - INTEREST
(a) The Borrower shall pay interest on the outstanding
amount of the Credit Facility from time to time at the rate of 30%
per annum, calculated monthly in arrears based on the actual number
of days elapsed during such month in a year of 365 days, payable as
prescribed by Section 5, with interest on overdue interest at the
same rate set out above, compounded monthly.
(b) Interest payable under this provision is payable both
before and after any or all of default, demand and judgement.
(c) The annual rate of interest to which the rate set out
in Section 4(a) is equivalent for the purposes of the Interest Act
(Canada) is the rate so determined multiplied by the number of days
in the applicable calendar year and divided by 365.
(d) Notwithstanding the provisions of this Section 4 or any
other provision of this Agreement, in no event shall the aggregate
"interest" (as that term is defined in Section 347 of the Criminal
Code (Canada)) payments payable to the Lender hereunder exceed the
effective annual rate of interest on the "credit advanced" (as
defined therein) lawfully permitted under Section 347 of the
Criminal Code (Canada). In the event that any such payments are
prohibited as provided in this paragraph, such payments shall be
made at the highest rate permitted.
SECTION 5 - REPAYMENT AND REDUCTION OF CREDIT FACILITY
The Borrower shall repay the Credit Facility as follows:
(a) Interest shall accrue on each Borrowing in accordance
with Section 4 from the date of drawdown of such Borrowing until
immediately prior to the Opening Date. The aggregate amount of
interest accrued on all Borrowings immediately prior to the Opening
Date is herein referred to as the "Accrued Opening Date Interest
Amount". The Accrued Opening Date Interest Amount together with
interest thereon, shall be repaid in twenty-four equal monthly
instalments, payable on the first day of each month, commencing on
the first day of the third month following the month in which the
Opening Date falls. For greater certainty, interest shall continue
to accrue on the outstanding balance of the Accrued Opening Date
Interest Amount in accordance with Section 4 until such amount is
repaid in full.
(b) Interest shall accrue on the amount of each Borrowing
outstanding from time to time in accordance with Section 4 from and
including the Opening Date (interest so accruing is herein referred
to as "Post-Opening Interest"). Post-Opening Interest shall be
payable monthly in arrears on the first day of each month commencing
on the first day of the month immediately following the month in
which the Opening Date falls (the "Initial Payment Date").
(c) The principal amount of the Borrowings shall be repaid
in the amount of United States Dollars set forth next to the dates
of repayment (each a "Repayment Date") as follows:
Repayment Date Amount
First Anniversary of the Initial Five (5%) percent of the
aggregate principal Payment Date amount of all
Borrowings
outstanding on the
Opening Date
Second Anniversary of the Initial Five (5%) percent of the
aggregate principal
Payment Date amount of all Borrowings outstanding
on the Opening Date
Third Anniversary of the Initial Five (5%) percent of the
aggregate principal
Payment Date amount of all Borrowings outstanding
on the Opening Date
Fourth Anniversary of the Initial Five (5%) percent of the
aggregate principal
Payment Date amount of all Borrowings outstanding
on the Opening Date
Fifth Anniversary of the Initial Five (5%) percent of the
aggregate principal
Payment Date amount of all Borrowings outstanding
on the Opening Date
Sixth Anniversary of the Initial Aggregate amount of all
Payment Date outstanding Borrowings at the
(the "Termination Date") Termination Date.
(d) (i) Notwithstanding the provisions of Sections 5(a),
(b) and (c), the Borrower shall, commencing on the
Initial Payment Date, make monthly payments to
Lender on the first day of each month equal to
seventy-five (75%) percent of Available Cash Flow
in respect of the immediately preceding month
which shall be applied to pay the amounts referred
to in Sections 5(a), (b) and (c) in respect of the
Operating Year in which the relevant month occurs,
subject, in each case, to the limitation that the
aggregate amount payable under this Section
5(d)(i) in any Operating Year shall not exceed the
aggregate of the amounts payable pursuant to
Sections 5(a), (b) and (c) in respect of such
Operating Year.
(ii) Within sixty (60) days following each
Repayment Date, the Borrower shall pay to the
Lender the amount, if any, equal to the
difference between
(A) the aggregate amount paid by the Borrower to
the Lender pursuant to Section 5(d)(i) during
the Operating Year ending on such Repayment
Date, and
(B) the aggregate of all amounts that would, but
for the provisions of Section 5(d)(i), have
been payable by the Borrower to the Lender
pursuant to Sections 5(a), (b) and (c) in
respect of such Operating Year,
together with all accrued interest thereon.
(iii) All payments made pursuant to this Section
5(d) shall be applied as follows:
(A) firstly, to Post-Opening Interest and accrued
interest thereon,
(B) secondly, to the Accrued Opening Date Interest
Amount and accrued interest thereon, and
(C) the balance thereof to principal,
or, after the occurrence and continuance of an
Event of Default, otherwise as the Lender, in its
sole discretion, may determine.
(e) For greater certainty, all amounts outstanding
hereunder including, without limitation, all principal, interest and
expenses of Lender under this Agreement shall be immediately due and
payable on the earlier of (i) the Termination Date, and (ii) the
date on which the Lender declares all amounts outstanding under the
Credit Facility to be immediately due and payable in accordance with
Section 10.
(f) All payments of principal and interest hereunder shall
be made to the Lender in lawful money of the United States of
America in immediately available funds. Whenever payment shall be
due on a day other than a Business Day payment shall be made on the
immediately preceding Business Day.
SECTION 6 - INCREASED COSTS
(a) The Borrower will reimburse or compensate the Lender
for any increase in cost to the Lender or any reduction in income
or effective return to the Lender in respect of the Credit Facility
resulting from an imposition of or change in any condition or
requirement (whether or not having the force of law) of any
government, governmental agency or body, tribunal or regulatory
authority including, without limitation, an imposition of or change
in any tax payable by the Lender (other than a tax on the net income
of the Lender derived from sources other than the transactions
contemplated hereby) or any other requirement applicable to the
Lender. If and whenever at any time or from time to time the Lender
determines that it is entitled to be reimbursed or compensated
hereunder, it will so notify the Borrower and will provide to the
Borrower a statement in writing setting forth the amount of such
compensation or reimbursement and the calculation thereof (which may
include the use of reasonable averages and allocations) which shall
be, in the absence of manifest error, conclusive evidence of the
amount of such reimbursement or compensation required to be paid
hereunder.
(b) Without limiting the generality of Section 6(a), the
Borrower shall make all payments to the Lender in respect of the
Credit Facility without setoff, counterclaim, restrictions or
conditions of any kind and free and clear of, and without deduction
or withholdings for or on account of, any present or future duties,
taxes, levies, imposts, fees, deductions, assessments, withholdings
or other charges of any nature whatsoever or interest, penalties or
other amounts in respect thereof (collectively, "Taxes") unless such
deduction or withholding is required by law or the administrative
practice of any taxation authority. If any such deduction or
withholding is so required, the Borrower shall (i) pay such
additional amounts as may be necessary in order that the Lender
receives a net amount after such deduction or withholding (including
any deduction or withholding in respect of such additional amounts)
equal to the full amount that the Lender would have received had no
such deduction or withholding been required, and (ii) pay the full
amount deducted or withheld to the relevant taxation authority in
accordance with applicable law and forthwith after payment furnish
the Lender with a receipt evidencing such payment. If the Borrower
fails to pay to the relevant taxation authority when due any Taxes
that it was required to deduct or withhold under this paragraph 6(b)
in respect of any payment to Lender hereunder or fails to furnish
Lender with the receipt referred to above, the Borrower shall
indemnify the Lender on an after-tax basis for any Taxes that may
become payable as a result of such failure. The Borrower's
obligations under this Section 6(b) shall survive the termination
or revocation of this Agreement and the payment of all amounts
payable under this Agreement and the Credit Facility.
(c) (i) The Lender shall notify the Borrower in writing of
any assessment or reassessment (a "Claim")
pertaining to a matter in respect of which the
Borrower may be liable to make payments under
Section 6(a) or 6(b) within 30 days of the date on
which the Lender receives such a Claim provided
that in the event of failure to give such notice,
such failure shall not reduce the obligations of
the Borrower hereunder (except to the extent that
such failure materially prejudices the contest of
such Claim).
(ii) The Borrower shall have the right, by notice
to the Lender given not later than 10 days
after receipt by the Borrower of notice of a
Claim to assume control of the defence,
compromise or settlement of the Claim at its
own expense but only so long as the Borrower
is not in default under any provision of this
Agreement.
(iii) Upon the assumption of control of any Claim by
the Borrower, the Borrower shall diligently
proceed with the defence, compromise or
settlement of the Claim at its sole expense
and, in connection therewith, the Lender shall
cooperate fully, but at the expense of the
Borrower to take such steps as in the
reasonable opinion of the Borrower, are
necessary to enable the Borrower to negotiate,
defend, settle or compromise such Claim. The
Borrower shall consult with the Lender and its
counsel in good faith with respect to the
Lender's interest with respect to any Claim
and shall diligently keep the Lender informed
of the progress of any Claim. No settlement,
compromise or disposition of any Claim may be
made by the Borrower without the written
consent of the Lender.
(iv) Nothing herein shall oblige the Lender to
defend, compromise or settle any Claim or
request any refund of taxes referred to in
Section 6(b).
(d) If the Lender receives any refund of taxes (i) in
respect of which the Lender received reimbursement or compensation
from the Borrower under Section 6(a), or (ii) which were paid by the
Borrower to a relevant taxation authority under Section 6(b), the
Lender shall, within 15 days of the date on which any right of any
taxing authority to dispute the Lender's entitlement to such refund
expires, pay to the Borrower the net amount of such refund (after
deducting any taxes payable by the Lender with respect to such
refund); provided that the Lender shall not be required to make a
payment under this Section 6(c) if an Event of Default has occurred
and is continuing.
SECTION 7 - PREPAYMENT
The Borrower may, at any time and from time to time, upon
three (3) Business Days written notice to the Lender, prepay any
portion of the Borrowings outstanding in minimum amounts of
U.S.$100,000.00. Concurrently with any prepayment, the Borrower
shall pay a prepayment premium of ten (10%) percent of the amount
of Borrowings being prepaid in compensation for lost income to the
Lender.
SECTION 8 - REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender:
(a) it is a corporation validly incorporated and subsisting
under the laws of the Province of Nova Scotia, and that it
is duly registered or qualified to carry on business in all
jurisdictions where the nature of its properties, assets or
its business makes such registration or qualification
necessary;
(b) the execution and delivery of this Agreement and of all
Promissory Notes contemplated hereby have been duly
authorized by all necessary actions and do not (i) violate
any law, regulation or rule by which it is bound, (ii)
violate any provision of its memorandum or articles of
incorporation or other incorporation or organization
documents, by-laws or any unanimous shareholders' agreement
to which it is subject, or (iii) result in a breach of, a
default under, or the creation of any Encumbrance on its
properties and assets under any agreement or instrument to
which it is a party or by which it or any of its properties
and assets may be bound or affected;
(c) no event has occurred which constitutes, or which with
giving of notice, lapse of time or other condition would
constitute, a default having a material adverse effect on
its financial condition under or in respect of any
agreement, undertaking or instrument to which it or any of
its properties or assets may be subject;
(d) the principal place of business of the Borrower is at the
Rama Casino in Ontario, Canada; and
(e) the issued and outstanding shares in the capital of the
Borrower consists of one hundred (100) common shares of no
par value, all of which are held legally and beneficially
by CHC Casinos Corp., a Florida corporation. All of the
issued and outstanding shares in the capital of CHC Casinos
Corp. are held legally and beneficially by the Guarantor.
SECTION 9 - COVENANTS
The Borrower covenants and agrees with the Lender, while
this Agreement is in effect or any Borrowings are outstanding:
(a) to pay all sums of money when due under this Agreement;
(b) to maintain its corporate existence as a validly subsisting
corporate entity;
(c) to provide the Lender with the following:
(i) monthly, consolidated Borrower-prepared financial
statements, including an income statement, balance
sheet and cash flow statement (in appropriate form and
sufficient detail to support all calculations required
in connection with the Borrower's obligations under
this Agreement including, without limitation, Section
5(d) hereof) all in form satisfactory to Lender within
30 days of each month-end, together with a certificate
of the Chief Financial Officer of the Borrower as to
the accuracy and completeness of such statements and as
to other matters in the form attached as Schedule "B",
(ii) annual, consolidated audited financial statements
within 120 days of each fiscal year end
accompanied by an auditor's report,
(iii) annual business plans, budgets and all other
information provided to Rama or the OCC pursuant
to the Rama Operating Agreement (as the same may
be amended, restated, supplemented or replaced
from time to time), simultaneously with the
delivery of such materials to such parties, unless
such information is required to be kept
confidential by the provisions of the Rama
Operating Agreement (as the same may be amended,
restated, supplemented or replaced from time to
time),
(iv) monthly financial statements of Rama, including an
income statement, balance sheet and cash flow
statement within 30 days of each month-end and any
other financial statements or similar statements
of Rama received by the Borrower whether pursuant
to the Rama Loan or the Rama Operating Agreement,
and
(v) such other financial and operating statements and
reports as the Lender may reasonably request;
(d) to notify the Lender promptly of any change in the
information provided under the representations and
warranties contained in Sections 8(c), (d) or (e);
(e) to give the Lender prompt notice of any Event of Default or
any event which, with notice or lapse of time, or both,
would constitute an Event of Default;
(f) to enter into the documents and agreements contemplated by
the Rama Commitment Letter to be entered into by the
Borrower no later than April 30, 1996 on terms and
conditions substantially as set out in the Rama Commitment
Letter, with such changes as the Lender may approve, acting
reasonably, and deliver to the Lender a copy of all such
documents and agreements forthwith after the execution and
delivery thereof, and not to agree to or suffer to exist,
without the express written consent of the Lender, any
surrender or termination of such documents and agreements
or any amendment or waiver of any provision in respect of
payments or repayments under or the term of such documents
and agreements;
(g) to file all income tax returns which are or will be
required to be filed by it, to pay or make provision for
payment of all taxes (including interest and penalties)
which are or will become due and payable by it and to
provide adequate reserves for the payment of any tax the
payment of which is being contested;
(h) except as contemplated by the Rama Commitment Letter or the
documents and agreements entered into in connection
therewith, not to grant, create, assume or suffer to exist
any Encumbrance affecting any of its properties, assets or
other rights, without the prior written consent of the
Lender;
(i) not to incur any indebtedness of any nature or kind without
the prior written consent of the Lender except:
(i) indebtedness owing to trade creditors of the Borrower
incurred in the ordinary course of the Borrower's
business,
(ii) indebtedness related to guarantees given by the
Borrower in favour of Rama and the OCC in respect
of cost overruns and operating deficits incurred
in connection with the operation of the Rama
Casino pursuant to the Rama Operating Agreement,
and
(iii) indebtedness related to guarantees given by the
Borrower in favour of The Bank of Nova Scotia (as
agent under the Rama Senior Debt) as contemplated
by the Rama Commitment Letter;
(j) except as contemplated by the Rama Operating Agreement or
the Rama Commitment Letter, not to invest in any other
person by way of equity investment or otherwise or provide
any financial assistance (by way of loan, guarantee or
otherwise) to any other person, without the prior written
consent of the Lender;
(k) not to sell, transfer, convey, lease or otherwise dispose
of any material part of its property or assets;
(l) not to engage in or carry on any business other than the
operation of the Rama Casino in accordance with the
provisions of the Rama Operating Agreement and the making
of the Rama Loan;
(m) not to issue any additional shares from treasury or to
cause any of its subsidiaries to issue any shares from
their respective treasuries; and
(n) not to change its name or merge, amalgamate or consolidate
with any other corporation or take part in any capital or
corporate reorganization or similar proceeding or
arrangement.
SECTION 10 - EVENTS OF DEFAULT
The occurrence of any one or more of the following events
or circumstances constitutes an "Event of Default" under this
Agreement:
(a) the Borrower fails to pay any principal, interest, fees or
other amounts under this Agreement when due, whether by
acceleration or otherwise and such failure continues
unremedied for a period of three (3) days following the
date on which written notice thereof is given by the Lender
to the Borrower;
(b) the Borrower fails to comply with any covenant or other
provision of this agreement or any other agreement with the
Lender and such failure continues unremedied for a period
of ten (10) days following the date on which written notice
thereof is given by the Lender to the Borrower or, if such
failure is not capable of being remedied within such ten
(10) day period, if the Borrower does not commence in good
faith the remedying thereof within such period or does not
thereafter prosecute to completion with diligence and
continuity the remedying thereof;
(c) any representation or warranty made herein or in any
document, agreement or certificate delivered pursuant
hereto shall be false or inaccurate in any material
respect;
(d) the Rama Casino is not open to the public by August 15,
1996;
(e) any voluntary or involuntary case or proceeding (including
the filing of any notice) is commenced under any
bankruptcy, insolvency, incorporation or other applicable
law in any jurisdiction in respect of the:
(i) bankruptcy, liquidation, winding-up, dissolution or
suspension of general operations,
(ii) composition, rescheduling, reorganization,
arrangement or readjustment of, or other relief
from, or stay or proceedings to enforce, some or
all of the debts or obligations,
(iii) appointment of a trustee, receiver, receiver and
manager, liquidator, administrator, custodian or
other official for, or for all or a substantial
part of the assets, or
(iv) possession, foreclosure, seizure or retention, or
sale or other disposition of, or other proceedings
to enforce security over, all or a substantial
part of the assets,
of the Borrower and, in the case of an involuntary case or
proceeding, the Borrower acquiesces to such case or
proceeding or the Borrower does not actively and diligently
contest such case or proceeding in good faith and such case
or proceeding is not dismissed, vacated or stayed within
sixty (60) days of institution;
(f) the Borrower is unable to meet its liabilities generally as
they become due, or is, or is adjudged or declared to be,
or admits to being, bankrupt or insolvent;
(g) the Borrower:
(i) fails at any time to pay any indebtedness in the
aggregate amount of U.S.$75,000 (or the Equivalent
Amount thereof in any currency) or more when due and
such failure continues unremedied for a period of ten
(10) days, or
(ii) fails to perform or observe any material covenant
or agreement contained in any agreement or in any
instrument evidencing, securing or relating to any
indebtedness in the aggregate amount of
U.S.$75,000 (or the Equivalent Amount thereof in
any currency) or more and, as a result of that
failure, any other party to that agreement or
instrument exercises a right to accelerate the
maturity of any amount owing under that agreement
or instrument;
(h) any writ, execution, attachment or similar process is
threatened, issued or levied against all or any part of the
assets of the Borrower in connection with any judgment
against the Borrower unless it is being actively and
diligently contested in good faith by appropriate and
timely proceedings or where the assets affected or the
amount involved do not, in the opinion of the Lender,
materially affect the assets or business of the Borrower;
(i) any secured creditor, encumbrancer or lienor, or any
trustee, receiver, receiver and manager, agent, bailiff or
other similar official appointed by or acting for any
secured creditor, encumbrancer or lienor, takes possession
of, or forecloses, seizes or retains, or sells or otherwise
disposes of, or otherwise proceeds to enforce security
over, all or a substantial part of the assets of the
Borrower or gives notice of its intention to do any of the
foregoing;
(j) the Borrower suspends or threatens to suspend or cease to
carry on business;
(k) the Guarantor fails to perform or observe any material
covenant or agreement contained in, or is in default under,
the Guaranty Agreement; and
(l) the Borrower ceases to be the operator of the Rama Casino
or receives proper notice of termination as operator of the
Rama Casino in accordance with the provisions of the Rama
Operating Agreement or the documents evidencing or securing
the Rama Senior Debt.
Upon the occurrence and continuance of an Event of Default, the
Lender may, by written notice to the Borrower, declare all amounts
outstanding under the Credit Facility to be immediately due and
payable. The Borrower shall immediately pay to the Lender all such
outstanding amounts, including, without limitation all principal,
interest and expenses of Lender under or in connection with this
Agreement.
SECTION 11 - CONDITIONS TO EFFECTIVENESS
The effectiveness of this agreement is subject to and
conditional upon the receipt, in form and substance satisfactory to
the Lender of:
(a) a duly executed copy of this Agreement;
(b) a duly executed copy of the Guaranty Agreement;
(c) certified copy of the Rama Operating Agreement duly
executed by all parties thereto;
(d) certified copy of the Rama Commitment Letter duly
executed by all parties thereto;
(e) a certificate of the chief financial officer of the
Borrower attaching monthly projections of Available
Cash Flow in respect of the fifteen month period
commencing with the month in which the Opening Date
falls;
(f) an officer's certificate of each of the Borrower and
the Guarantor with respect to:
(i) its articles, by-laws and shareholder agreements
(if any),
(ii) resolutions of its board of directors
authorizing it to execute, deliver and perform
its obligations under this Agreement and any
documents delivered pursuant hereto or in
connection herewith, and
(iii) the names, offices and specimen signatures of
the persons authorized to sign this Agreement
and the agreements and documents contemplated
hereby;
(g) an officer's certificate of the Borrower with respect
to the accuracy of the representations and warranties
contained herein and the absence of any defaults;
(h) certificate of status in respect of the Borrower;
(i) certificate of good standing status in respect of the
Guarantor;
(j) an opinion of legal counsel to the Borrower;
(k) an opinion of legal counsel to the Guarantor;
(l) such other documents as the Lender may reasonably
request; and
(m) payment of Lender's legal and other fees and expenses
incurred in connection with this Agreement and the
transactions contemplated hereby.
The obligation of the Lender to make available the Borrowings is
further subject to and conditional upon the Lender being of the
opinion that a material adverse change in the financial condition,
ownership, or operation of the Borrower or any subsidiary has not
occurred.
SECTION 12 - INDEMNITY
The Borrower shall indemnify the Lender from and against
all losses, damages, expenses and liabilities which the Lender
sustains or incurs as a consequence of any default by the Borrower
under any of the provisions of this agreement or any
misrepresentation by the Borrower contained in or delivered in
writing in connection with this agreement.
SECTION 13 - EXPENSES
The Borrower shall pay the reasonable fees (including, but
not limited to, all fees of the Lender's counsel on a solicitor and
client basis) and expenses incurred by the Lender in connection with
the preparation, negotiation, documentation and operation of the
Credit Facility including the enforcement of the Lender's rights
under the Credit Facility whether or not any amounts are advanced
under the Credit Facility.
SECTION 14 - CURRENCY CONVERSION
If, for the purpose of obtaining judgement in any court,
determining the amount outstanding under this agreement or for any
other purpose, it is necessary to convert an amount in one currency
(the "Original Currency") into another currency (the "Second
Currency"), the Equivalent Amount of the Second Currency shall be
used. If the conversion relates to a judgement, the conversion
shall be performed as of the date 2 Business Days preceding that on
which judgement is given. For all other purposes, the conversion
shall be performed as of the date and time of determination.
The Borrower agrees that any obligations in respect of any
Original Currency due from it to the Lender shall, notwithstanding
any judgement or payment in any Second Currency, be discharged only
to the extent that, on the Business Day following receipt of any sum
so paid or adjudged to be due in the Second Currency, the Lender
may, in accordance with normal banking procedures, purchase, in the
Toronto foreign exchange market, the Original Currency with the
amount of the Second Currency so paid or so adjudged to be due; and
if the amount of the Original Currency so purchased is less than the
amount of the Original Currency due to the Lender, the Borrower
agrees, as a separate obligation and notwithstanding any such
payment or judgement, to pay the Lender the amount of the Second
Currency required to purchase the amount of the Original Currency
necessary to make up such difference on such date together with
interest (at the rate per annum set forth in the Interest provision
hereof) and expenses (including legal fees on a solicitor and client
basis) from such date to the date of payment.
SECTION 15 - ASSIGNMENT AND PARTICIPATION
This agreement shall be binding upon and enure to the
benefit of the Lender and the Borrower and their respective
successors and permitted assigns. The Lender may assign or transfer
its rights, benefits and obligations to any other Person
("Assignee"). After any such assignment or transfer, the term
"Lender" as used in this agreement shall be deemed to be the
Assignee to the extent of its interest.
In assigning or transferring all or any part of its rights
or obligations as aforesaid, the Lender may reveal to potential
Assignees or participants all or any information regarding the
Borrower as the Lender deems necessary or desirable.
This Agreement may not be assigned by the Borrower without
the prior written consent of the Lender, which consent may be
arbitrarily withheld.
SECTION 16 - NOTICE
Unless otherwise specified, any notice to a party must be
given in writing and delivered personally or by courier, sent by
prepaid registered or certified mail to the party as follows:
If to the Lender:
Carnvial Corporation
3655 N.W. 87th Avenue
Miami, Florida
U.S.A. 33178-2428
Attention: Vice President of Finance
If to the Guarantor:
CHC International, Inc.
3250 Mary Street
Miami, Florida
U.S.A. 33133
Attention: Robert Sturges and Peter Temling
If to the Borrower:
CHC Casinos Canada Limited
c/o CHC International, Inc.
3250 Mary Street
Miami, Florida
U.S.A. 33133
Attention: Robert Sturges and Peter Temling
or to any other address or Person that the party designates. Any
such notice will be deemed to have been given when actually
received.
SECTION 17 - EXPIRY DATE
This offer is open for acceptance until March 27, 1996
unless extended in writing by the Lender.
Please acknowledge your acceptance of the above terms and
conditions by signing the attached copy of this letter under your
corporate seal in the space provided below and returning it to the
undersigned.
Yours truly,
Howard S. Frank
Vice Chairman
We acknowledge and accept the terms
and conditions of this agreement as
of the date first above written.
CHC CASINOS CANADA LIMITED
By:/s/ W. Peter Temling
Title:Sr. Vice President
CHC INTERNATIONAL, INC.
By:/s/ W. Peter Temling
Title:Sr. Vice President
Schedule "A" to the agreement dated as of the 27th day of March,
1996 between CHC Casinos Canada Limited as Borrower, CHC
International, Inc. as Guarantor and Carnival Corporation as Lender.
PROMISSORY NOTE
U.S.$25,000,000 Principal Sum March 27, 1996
FOR VALUE RECEIVED, the undersigned (the "Borrower") promises to pay
to or to the order of Carnival Corporation (the "Lender") at its
office at 3655 N.W. 87th Avenue, Miami, Florida, U.S.A. 33178-2428,
the lesser of:
(i) the sum of TWENTY-FIVE MILLION United States Dollars
(U.S.$25,000,000) (the "Amount"), and
(ii) the aggregate unpaid principal balance of all advances
made to the Borrower by the Lender, as determined on
the grids appearing on any attachment hereto,
together with interest thereon at the rate of 30% per annum,
calculated and compounded monthly in arrears, with interest on
overdue interest at the same rate set out above, at the times and
otherwise in accordance with the terms of the letter agreement dated
March 27, 1996 between the Borrower, CHC International, Inc. and the
Lender (the "Agreement").
This promissory note is the promissory note referred to in and is
subject to, and the Borrower and the holder of this promissory note
are entitled to the benefits of, the Agreement. The Agreement
contains, inter alia provisions regarding (i) the payment of
principal and interest provided for herein, and (ii) the
acceleration of the maturity hereof upon the occurrence of certain
stated events. All capitalized terms used herein and not otherwise
defined herein shall have the same meanings as are prescribed in the
Agreement.
Interest payable under this promissory note is payable both before
and after any or all of default, demand and judgement.
All payments of principal and interest hereunder shall be made to
the Lender in lawful money of the United States of America in
immediately available funds. Whenever payment shall be due on a
day other than a Business Day payment shall be made on the
immediately preceding Business Day.
The Borrower hereby waives presentment for payment, demand, notice
of dishonour, protest and all other notices of any kind relating to
this promissory note of the enforcement hereof.
The Borrower hereby irrevocably authorizes the Lender to record on
any attachments hereto, all advances and repayments and the unpaid
principal balance of advances from time to time. The Borrower
agrees that, in the absence of manifest error in such recordations,
they shall be prima facie evidence of the amount of the unpaid
principal balance, except for the failure of the Lender to correctly
record the amount of any advance or any claim for the repayment of
such advance and the interest thereon.
This promissory note and each of the documents contemplated by or
delivered under or in connection with this promissory note is
governed by, and will be construed and interpreted in accordance
with, the laws of the Province of Ontario and the laws of Canada
applicable in the Province of Ontario.
The Borrower and the holder of this promissory note irrevocably
attorns to the non-exclusive jurisdiction of the courts of the
Province of Ontario.
If any provision of this promissory note is or becomes illegal,
invalid or unenforceable in any jurisdiction, the illegality,
invalidity or unenforceability of that provision will not affect:
(a) the legality, validity or enforceability of the remaining
provisions of this promissory note; or
(b) the legality, validity or enforceability of that provision
in any other jurisdiction.
Time is of the essence for every provision of this promissory note.
In witness whereof the undersigned has executed this promissory note
as of the date first written above.
CHC CASINOS CANADA LIMITED
By:__________________________
Title:_______________________
(Seal)
Executed before me at City of Toronto,
in the Province of Ontario,
this 27th day of March,
1996
A Notary Public in and for
the Province of Ontario.
Schedule of Advances and Reductions of Principal
Date
Amount of
Principal
Advanced
Amount of
Principal
Paid
Unpaid
Principal
Balance
Notation
Made By
Schedule "B" to the agreement dated as of the 27th day of March,
1996 between CHC Casinos Canada Limited as Borrower, CHC
International, Inc. as Guarantor and Carnival Corporation as Lender.
MONTHLY CERTIFICATE OF THE BORROWER'S CHIEF FINANCIAL OFFICER
To: CARNIVAL CORPORATION
3655 N.W. 87th Avenue
Miami, Florida
33178-2428
U.S.A.
Attention: Gerald R. Cahill
Dear Sirs/Mesdames:
I, ________________________, the undersigned, in my
capacity as Chief Financial Officer of CHC Casinos Canada Limited
(the "Borrower"), after due inquiry, hereby certify that:
1. This Certificate is delivered pursuant to Section 9(c)(i)
of the letter agreement dated March 27, 1996 between Carnival
Corporation as Lender, CHC International, Inc. as guarantor and the
Borrower as borrower (the "Loan Agreement"). All capitalized terms
appearing in this certificate shall have the meaning assigned to
such terms pursuant to the Loan Agreement.
2. I am familiar with and have examined the provisions of the
Loan Agreement and have made such reasonable investigations of
corporate records and inquiries of other officers and senior
personnel of the Borrower and others which in my opinion are
sufficient to enable me to make an informed statement herein.
3. Based on the foregoing, the Borrower is not in default in
the performance or observance of any of the terms, covenants,
agreements or conditions of the Loan Agreement, nor has any event
or circumstance occurred which, with notice or lapse of time, or
both, would constitute an Event of Default [except for those set
forth in Exhibit A hereto].
4. Attached hereto as Exhibit [A or B as applicable] are the
monthly, consolidated financial statements, of the Borrower which
I verily believe to be complete and accurate in all material
respects as of the dates thereof and for the periods covered
thereby.
5. Attached as Exhibit [B or C as applicable] is the
calculation of the amount payable pursuant to Section 5(d) of the
Loan Agreement in respect of the month ended on the date of the
financial statements attached hereto as Exhibit [A or B applicable].
Dated at _____________, this ___________ day of
___________________, _____.
CHC CASINOS CANADA LIMITED
By:
Name:
Title: Chief Financial Officer
Schedule "C" to the agreement dated as of the 27th day of March,
1996 between CHC Casinos Canada Limited as Borrower, CHC
International, Inc. as Guarantor and Carnival Corporation as Lender.
DRAWDOWN NOTICE
To: CARNIVAL CORPORATION
3655 N.W. 87th Avenue
Miami, Florida
33178-2428
U.S.A.
Attention: Gerald R. Cahill
Dear Sirs/Mesdames:
This Drawdown Notice is delivered pursuant to Section 2 of
the letter agreement dated March 27, 1996 between Carnival
Corporation as Lender, CHC International, Inc. as guarantor and the
undersigned as borrower (the "Loan Agreement"). All capitalized
terms appearing in this certificate shall have the meaning assigned
to such terms pursuant to the Loan Agreement.
We hereby request a Borrowing pursuant to Section 2 of the
Loan Agreement as follows:
1. Drawdown Date: / /
day month year
2. Payment Instructions:
3. Amount of Borrowing: [minimum U.S.$5,000,000 and integral
multiples of U.S.$1,000,000 in excess thereof]
Dated at _____________, this ___________ day of
___________________, _____.
CHC CASINOS CANADA LIMITED
By:
Name:
Title: Chief Financial Officer