Silver Dollar Purchase Agreement dated as of November 6, 2009 by and between Century Casinos Europe GmbH and Grant Thornton Limited in is capacity as interim receiver and receiver and manager of EGC Holdings Ltd. and not in its personal capacity

 

THIS PURCHASE AGREEMENT made as of November 6, 2009 (the “Agreement”)

 

BETWEEN:

 

GRANT THORNTON LIMITED in its capacity as interim receiver and receiver and manager of EGC Holdings Ltd. and not in its personal capacity

(“Receiver”)

 

AND:                      CENTURY CASINOS EUROPE GMBH

(“Purchaser”)

 

WHEREAS:

 

 

 

 

 

 

 

IN CONSIDERATION of the mutual agreements in this Agreement and subject to the terms and conditions specified in this Agreement, the Parties agree as follows:

 

1. Interpretation.

 

1.1 In this Agreement, including the recitals and the exhibits and schedules, the following words and expressions have the following meanings unless the context otherwise requires:

 

(a)	“AGLC” means the Alberta Gaming and Liquor Commission;

 

(b)

“Agreed Accounting Principles” means Canadian GAAP, subject to normal year-end adjustments and except that such balance sheets do not contain footnotes, as such principles were applied in the preparation of the May 31, 2009 balance sheet of EGC Holdings, a copy of which is attached hereto as Schedule “A”; provided, however, that solely for purposes of making the calculations provided for in Section 3, the Intercompany Indebtedness (and all interest thereon), all other indebtedness of either Subsidiary that is compromised pursuant to the Plans of Arrangement, the compromise of the Intercompany Indebtedness and such other indebtedness pursuant to the Plans of Arrangement, and all related tax items, shall be excluded from the definition of, and shall not constitute, Current Liabilities.

 

(c)	“Applicant Disclosure Forms” means the AGLC application forms attached collectively hereto as Schedule “B”;

 

(d)	“Assets” means all of the assets owned by the Subsidiaries in connection with the Undertaking, including but not limited to the Real Property;

 

(e)	“Business Day” means any day except Saturdays, Sundays and statutory holidays in Vancouver, British Columbia;

 

(f)	“Claim” has the meaning specified in Schedule “C” attached hereto;

 

(g)	“Closing” means the completion of the sale to and purchase by Purchaser of the Shares for the Purchase Price;

 

(h)	“Closing Date” means the date on which the Closing occurs;

 

(i)

“Current Assets” means, as to each Subsidiary, cash, accounts receivable, inventory, deposits and prepaid expenses and other current assets, all calculated in accordance with the Agreed Accounting Principles; provided, however, that for purposes of calculating Current Assets, prepaid expenses that do not provide any benefit for Silver Dollar’s operations after the Plan Implementation Date shall be excluded; provided, further, that prepaid expenses that do provide benefit for Silver Dollar’s operations after the Plan Implementation Date shall include, but not be limited to, license fees, bowling services, bowling parts and business taxes;

 

 

 

(j)

“Current Liabilities” means accounts payable, accrued expenses, municipal property tax arrears, jackpot liabilities and other current liabilities, all calculated in accordance with the Agreed Accounting Principles, but excluding any such items relating to liabilities and obligations to be compromised on or prior to the Plan Implementation Date pursuant to the Plans of Arrangement;

 

(k)	“Due Diligence Period” means the period commencing on the Effective Date and ending on November 30, 2009, the date that is fifteen (15) Business Days after the Effective Date;

 

(l)	“Effective Date” means the date first written above;

 

(m)	“Encumbrances” means all security interests, trusts, liens, charges and other interests, statutory or otherwise, encumbering the Shares;

 

(n)	“Fortress” means Fortress Credit Corp. as agent for Fortress Credit Opportunities I, L.P. and Fortress Credit Funding II, L.P.;

 

(o)	“Fortress Indemnity” means an indemnity agreement in the form of Schedule “E” attached hereto;

 

(p)

“Fortress Release” means a release and acknowledgement, duly executed by Fortress, pursuant to which Fortress acknowledges and agrees that upon consummation of the Closing, the Subsidiaries will have no further obligation or liability whatsoever (whether absolute, contingent or otherwise) to (i) Fortress, (ii) any affiliate of Fortress, or (iii) any person or party for whom Fortress or any affiliate of Fortress has acted as agent or trustee;

 

(q)	“Indemnitor” means Fortress Credit Corp. as agent for the parties specified in the Fortress Indemnity;

 

(r)	“Intercompany Indebtedness” means any and all indebtedness of either Subsidiary to EGC Holdings, Evergreen or any other affiliate of Evergreen;

 

(s)	“Parties” means Receiver and Purchaser, and “Party” means either one of them;

 

(t)	“Permit” means a permit, license or other authorization or approval issued by a governmental authority and required in the operation of the Undertaking;

 

(u)	“Permitted Liens” means security interests, mortgages, liens and encumbrances directly related to the Purchaser Approved Retained Liabilities;

 

(v)	“Plan Implementation Date” has the meaning ascribed to that term in Schedule “C” attached hereto;

 

 

 

(w)	“Purchaser Approved Retained Liabilities” means those contracts, leases, licenses and other obligations and liabilities binding on the Subsidiaries or their respective Assets that Purchaser wishes to survive the Plan Implementation Date;

 

(x)	“Representatives” means, with respect to any party, any officer, director or employee of, or any attorney, solicitor, accountant, consultant or other advisor or representative, of such party;

 

(y)	“Subsidiaries” means EGC Properties and Silver Dollar;

 

(z)	“Undertaking” means the ownership and operation of the Casino and the Real Property; and

 

(aa)	“Working Capital” means, as to each Subsidiary, the difference (positive or negative), if any, between Current Assets and Current Liabilities.

 

1.2 Each of the following terms is defined in the Section set forth opposite such term below:

 

1.3 The following rules of interpretation apply throughout this Agreement:

 

(a)

The word “including” (and “include” and variations thereof) means including without limiting the generality of any description preceding such term.  The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement.

 

(b)

The headings in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  Except as otherwise indicated, all references in this Agreement to “Sections,” “Exhibits” and “Schedules” are intended to refer to Sections of this Agreement and Exhibits and Schedules to this Agreement, and references to Sections include all Sections subsidiary thereto.

 

(c)	Whenever used herein, the singular shall include the plural, the plural shall include the singular, and the use of any gender shall be applicable to both genders.

 

(d)	Unless otherwise specified, all references to monetary amounts are to the currency of Canada.

 

(e)

When calculating the period of time before which, within which or following which any act is to be done or step is to be taken under this Agreement, the reference date in calculating such period shall be excluded.  If the last day of such period is a non-Business Day, the period in question shall end on the next succeeding Business Day.

 

(f)

The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual agreement; any law, regulation, or rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement.

 

 

 

1.4 The following schedules and exhibits are attached to and form part of this Agreement:

Schedule	Title
A	EGC Holdings Ltd. May 2009 Balance Sheet
B	Applicant Disclosure Forms
C	Plans of Arrangement
D	Vesting Order
E	Indemnity Agreement

Exhibit	Title
1	Legal Description(s) of Real Property
2	Accounting Arbitration Procedures

 

2. Sale And Purchase

 

 

3. Purchase Price and Payment; Allocation of Purchase Price; Adjustment; Preservation of Liens; Proceeds Held for Benefit of Creditors

 

 

(a)

Concurrently with the execution and delivery hereof, Purchaser shall pay to Receiver’s solicitors, by wire transfer of immediately available funds to an account designated by the Receiver’s solicitors, an amount equal to One Million Dollars (U.S. $1,000,000) (including any interest accrued thereon, the “Deposit”);

 

(b)

Within three (3) Business Days after the satisfaction of all of the conditions specified in Sections 11.1(a) through and including Section 11.1(f), Purchaser shall pay to Receiver’s solicitors, by wire transfer of immediately available funds to an account designated by the Receiver’s solicitors, an amount equal to the Base Amount less the amount of the Deposit as of the date such payment is made (the “Section 3.1(b) Payment”);

 

(c)	At the Closing, the aggregate amount paid by Purchaser to Receiver’s solicitors pursuant to Sections 3.1(a) and (b) shall be paid by Receiver’s solicitors to Receiver, by wire transfer of immediately available funds; and

 

(d)	The Adjustment Amount shall be paid as specified in Section 3.6.

 

 

 

 

 

3.6 The Adjustment Amount shall be calculated and paid as follows:

 

(a)

Not more than five (5) Business Days prior to the scheduled Closing Date, Receiver shall in good faith prepare or cause to be prepared an estimated balance sheet of each Subsidiary determined as of 3:30 a.m. (Calgary time) on the Closing Date (the “Estimated Closing Balance Sheets”), which shall be prepared in accordance with the Agreed Accounting Principles, and an estimation of the Working Capital of each Subsidiary that Receiver estimates will exist as of as 3:30 a.m. (Calgary time) on the Closing Date (as to each Subsidiary, the “Estimated Working Capital”).  If the Estimated Working Capital of Silver Dollar plus the Estimated Working Capital of EGC Properties exceeds CDN $1.00, then in addition to the balance of the Base Amount, Purchaser shall pay to Receiver at the Closing an amount equal to such excess.  If the Estimated Working Capital of Silver Dollar plus the Estimated Working Capital of EGC Properties is less than CDN $1.00, Purchaser shall deduct from the balance of the Base Amount an amount equal to such deficiency.

 

(b)

As promptly as practicable, but no later than thirty (30) days after the Closing Date, Purchaser will prepare in good faith, based upon the financial information included in the Subsidiaries’ records as theretofore delivered to Purchaser, and deliver to Receiver, a balance sheet of each Subsidiary determined as of 3:30 a.m. (Calgary time) on the Closing Date (the “Final Closing Balance Sheets”) and a certificate (the “Certificate”) setting forth Purchaser’s calculation of the Working Capital of each Subsidiary as of 3:30 a.m. (Calgary time) on the Closing Date (as to each Subsidiary, the “Final Working Capital”).  The Final Closing Balance Sheets will be prepared in accordance with the Agreed Accounting Principles on a basis consistent with the Estimated Closing Balance Sheets.  Purchaser will make available to Receiver and its accountants, solicitors and other advisors all records and work papers used in preparing the calculation of Final Working Capital, and Purchaser acknowledges that Receiver will consult with Fortress with respect to such calculation.

 

 

 

(c)

If within thirty (30) days following delivery of the Final Closing Balance Sheets and the Certificate, Receiver has not given Purchaser notice (an “Objection Notice”) of Receiver’s disagreement with one or both of the Final Closing Balance Sheets or the Certificate (which notice must contain a statement of the basis of Receiver’s disagreement and a reasonably detailed calculation of Receiver’s proposed Final Closing Balance Sheet and/or Final Working Capital if and to the extent that Receiver disagrees with Purchaser’s calculation of the same), which disagreement shall be limited to whether the preparation of the Final Closing Balance Sheets and the calculation of Final Working Capital for each Subsidiary was done in a manner consistent with the Agreed Accounting Principles and the terms of this Agreement and whether there were mathematical or factual errors in the preparation of either Final Closing Balance Sheet or the calculation of Final Working Capital of either Subsidiary), then the Final Working Capital reflected in the Closing Balance Sheets will be used in computing the Adjustment Amount.  If Receiver delivers an Objection Notice to Purchaser, Purchaser and Receiver will endeavor to resolve any disagreements noted in the Objection Notice in good faith as soon as practicable after the delivery of such Objection Notice.  If such parties do not obtain a final resolution within 30 days after Purchaser has received the Objection Notice, then the issues in dispute will be submitted to the Accountants for resolution pursuant to the provisions of Exhibit 2.

 

(d)

The amount of Working Capital of each Subsidiary as of 3:30 a.m. (Calgary time) on the Closing Date as agreed to by Receiver and Purchaser or as determined by the Accountants, as applicable, shall be final and binding on all of the parties hereto and shall be deemed the “Actual Working Capital” for all purposes herein.

 

(e)

On the third (3rd) Business Day following the final determination of the Actual Working Capital of each Subsidiary (the “Adjustment Payment Date”), either (i) Purchaser shall pay to Receiver an amount equal to the amount, if any, by which the Actual Working Capital of Silver Dollar plus the Actual Working Capital of EGC Properties exceeds the sum of the Estimated Working Capital of Silver Dollar plus the Estimated Working Capital of EGC Properties, or (ii) Receiver shall pay to Purchaser an amount equal to the amount, if any, by which the Estimated Working Capital of Silver Dollar plus the Estimated Working Capital of EGC Properties exceeds the sum of the Actual Working Capital of Silver Dollar plus the Actual Working Capital of EGC Properties.  The amount paid by Receiver to Purchaser or by Purchaser to Receiver pursuant to this Section 3.6(e) is herein referred to as the “Adjustment Amount”.  All payments will be made together with interest at an annual rate of five percent (5%), calculated on the basis of a 365-day year and compounded daily beginning on the Closing Date and ending on the date of payment.  Payments must be made in immediately available funds.  Payments to Receiver shall be made by wire transfer to an account as designated by the Receiver.  Payments to Purchaser shall be made by wire transfer to an account as designated by Purchaser.

 

(f)

Notwithstanding the provisions of Section 3.6(e), if any amount payable by Receiver to Purchaser pursuant to Section 3.6(e) is instead paid to Purchaser by Indemnitor pursuant to Section 1 of the Fortress Indemnity, then upon the making of such payment by Indemnitor, Receiver shall have no further obligation to pay such amount to Purchaser pursuant to this Section 3.6.

 

 

4. Applicant Disclosure

 

 

5. Risk

 

5.1 The Shares and Assets shall be at the risk of Receiver up to but not including the Closing and shall be at the risk of Purchaser from the time of Closing and thereafter.

 

6. Termination

 

6.1 Without limiting the termination right provided in Section 10.2, this Agreement may be terminated prior to the Closing as follows:

 

(a)	Purchaser may terminate this Agreement with the express written consent of Receiver, and Receiver may terminate this Agreement with the express written consent of Purchaser;

 

(b)

Receiver may terminate this Agreement if there has been a material default under or material breach of any representation, warranty or covenant of Purchaser contained in this Agreement, which default or breach shall be incapable of being cured or, if capable of being cured, shall not have been cured by the earlier of (i) the tenth (10th) day following receipt by Purchaser of written notice of such default or breach (specifying in reasonable detail the claimed default or breach and demanding its cure or satisfaction) or (ii) March 31, 2010;

 

(c)

Receiver may terminate this Agreement if the Closing has not occurred on or before March 31, 2010; provided, however, that if the Closing has not occurred on or before such date due to a material breach by Receiver of any representations, warranties, covenants or agreements contained in this Agreement, then Receiver may not terminate this Agreement pursuant to this Section 6.1(c);

 

(d)

Receiver may terminate this Agreement if the consummation of this Agreement would violate any non-appealable final order, decree or judgment of any court or other governmental authority having jurisdiction, other than an order or decree of the Court described in Section 6.1(f); provided, however, that if such order, decree or judgment was entered due to a material breach by Receiver of any representations, warranties, covenants or agreements contained in this Agreement, then Receiver may not terminate this Agreement pursuant to this Section 6.1(d);

 

 

 

(e)

Receiver may terminate this Agreement if Purchaser fails to use commercially reasonable efforts to obtain as soon as practicable all Permits necessary to consummate the transactions contemplated by this Agreement including, without limitation, all regulatory approvals and consents needed from the AGLC and any other municipal, provincial or federal governmental entities;

 

(f)	Receiver may terminate this Agreement if the Court approves a transaction by Receiver with a party other than Purchaser which transaction would prevent the consummation of the transactions contemplated by this Agreement;

 

(g)

Purchaser may terminate this Agreement if there has been a material default under or material breach of any representation, warranty or covenant of Receiver contained in this Agreement, which default or breach shall be incapable of being cured or, if capable of being cured, shall not have been cured by the earlier of (i) the tenth (10th) day following receipt by Receiver of written notice of such default or breach (specifying in reasonable detail the claimed default or breach and demanding its cure or satisfaction) or (ii) March 31, 2010;

 

(h)

Purchaser may terminate this Agreement if the Closing has not occurred on or before March 31, 2010; provided, however, that if the Closing has not occurred on or before such date due to a material breach by Purchaser of any representations, warranties, covenants or agreements contained in this Agreement, then Purchaser may not terminate this Agreement pursuant to this Section 6.1(h); and

 

(i)

Purchaser may terminate this Agreement if the consummation of this Agreement would violate any non-appealable final order, decree, or judgment of any court or governmental authority having jurisdiction; provided, however, that if such order, decree or judgment was entered due to a material breach by Purchaser of any representations, warranties, covenants or agreements contained in this Agreement, then Purchaser may not terminate this Agreement pursuant to this Section 6.1(i)

 

Any termination of this Agreement pursuant to this Section 6.1 shall be effected by written notice given by the terminating Party to the other Party, and shall be effective upon delivery of such notice.

 

6.2 Upon any termination of this Agreement pursuant to Section 6.1, the Deposit and (if then held by Receiver’s solicitors) the Section 3.1(b) Amount shall be applied as follows:

 

(a)	Upon a termination of this Agreement pursuant to Section 6.1(a), the Deposit and (if then held by Receiver’s solicitors) the Section 3.1(b) Amount shall be paid to such party or parties as Purchaser and Receiver shall agree upon;

 

(b)	Upon a termination of this Agreement pursuant to Section 6.1(b), the Deposit shall be paid to Receiver and the Section 3.1(b) Amount, if then held by Receiver’s solicitors, shall be paid to Purchaser; or

 

(c)	Upon a termination of this Agreement pursuant to any other section of Section 6.1, the Deposit and (if then held by Receiver’s solicitors) the Section 3.1(b) Amount shall be paid to Purchaser.

 

 

 

 

 

6.4 Nothing in this Section 6 is intended to limit the remedies of injunction and specific performance, which shall remain available to the Parties.

 

 

 

 

7. Receiver’s Representations and Warranties

 

7.1 Receiver, in its capacity as such and not in its personal capacity, represents and warrants to Purchaser that, as of the Effective Date and the Closing Date:

 

(a)	Receiver and EGC Holdings are not non-residents of Canada within the meaning of Section 116 of the Income Tax Act (Canada); and

 

(b)

Receiver is the duly appointed interim receiver and receiver and manager of all of the assets and undertakings of EGC Holdings and the Subsidiaries, and, pursuant to the powers granted to it under the Receivership Order, had the right to seek the Meeting and Claims Process Order and has the right to sell the Shares and to seek the Final Order and the Vesting Order;

 

(c)	Receiver has not incurred any obligations that attach to the Shares, other than those obligations, if any, that will be fully discharged at the Plan Implementation Date; and

 

(d)

neither Receiver nor its agents have incurred as a result of the action of Receiver or its agents any obligation or liability, contingent or otherwise, for brokerage or finders’ fees or agents’ commissions or other similar payment in connection with this Agreement (other than fees and expenses payable to HLT Advisory, which shall be paid by Receiver), and Receiver will indemnify and hold Purchaser harmless from any such payment alleged to be due by or through Receiver as a result of the action of Receiver or its agents, which indemnification will survive the Closing or the termination of this Agreement.

 

 

8. Purchaser's Representations and Warranties

 

8.1 Purchaser represents and warrants to Receiver that, as of the Effective Date and the Closing Date:

 

(a)	it is a non-resident of Canada for the purposes of the Income Tax Act (Canada);

 

(b)	it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation;

 

(c)	it has the power and authority to enter into this Agreement and to perform its obligations hereunder;

 

 

 

(d)

its execution and performance of this Agreement does not violate any lawful obligation applicable to it or its assets, including without limitation any applicable laws, any provision of its constating documents, any contract to which it is a party or any order or judgment of a court of competent jurisdiction;

 

(e)	the information to be provided by Purchaser in the Applicant Disclosure Forms delivered to the AGLC will be complete and accurate in all respects;

 

(f)	it will have on the Closing Date (and it together with its affiliates have on the Effective Date) all of the funds required in order to complete the transaction contemplated by this Agreement, on the terms contemplated in this Agreement;

 

(g)

its obligations hereunder are legal, valid and binding, enforceable in accordance with their respective terms, subject to applicable bankruptcy or similar laws affecting creditors’ rights generally and subject, as to enforceability, to equitable principles of general application regardless of whether enforcement is sought in a proceeding in equity or at law;

 

(h)

there is no action, claim, proceeding or governmental review in progress (or, to Purchaser’s knowledge, threatened) against Purchaser that challenges, or may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the transactions contemplated by this Agreement; and

 

(i)

neither Purchaser nor its agents have incurred as a result of the action of Purchaser or its agents any obligation or liability, contingent or otherwise, for brokerage or finders’ fees or agents’ commissions or other similar payment in connection with this Agreement, and Purchaser will indemnify and hold Receiver harmless from any such payment alleged by any party to be due by or through Purchaser as a result of the action of Purchaser or its agents, which indemnification will survive the Closing or the termination of this Agreement.

Receiver acknowledges that Purchaser received in January 2009 from Capital West Partners, acting as financial advisor to Evergreen, an “Investment Opportunity Executive Summary” with respect to the opportunity to purchase assets or equity securities of, and/or to provide financing to, Evergreen, and that Purchaser’s receipt of such materials shall not be deemed “action of Purchaser or its agents” for purposes of this Section 8.1(i).

 

9. Purchaser’s Acknowledgments

 

9.1 Purchaser acknowledges and agrees that:

 

(a)	by purchasing the Shares, it will assume control over and ownership of the Undertaking and the Assets on an “as is, where is” basis on the Closing Date, and it is purchasing the Shares based entirely on its own inspections of the Undertaking;

 

(b)

any forecasts or projections included in any due diligence or similar materials are not to be viewed as facts and that actual results achieved by the Subsidiaries or either of them during the period or periods covered by any such forecasts or projections may vary materially from those contained in such forecasts or projections; and

 

 

 

(c)

neither Receiver nor any of its affiliates or representatives nor any other person will have or be subject to any liability to Purchaser or any other person resulting from the distribution to Purchaser or its representatives or Purchaser’s use of, any information or documents provided to Purchaser or its representatives pursuant to Purchaser’s investigation of the Undertaking, including any confidential memoranda distributed on behalf of Receiver relating to the Shares, the Subsidiaries or the Assets or other publications or data room information provided to Purchaser or its representatives in connection with the sale of the Shares and the transactions contemplated hereby.

 

Without limiting the generality of the foregoing, Purchaser acknowledges that Receiver is not responsible for any defects relating to any of the Assets, whether or not latent, which may exist as of the Closing Date.

 

 

10. Purchaser’s Due Diligence; Procedures re Plans of Arrangement and Court Approval

 

Without limiting the generality of the immediately preceding paragraph, commencing on the Effective Date and continuing thereafter until the Closing or the earlier termination of this Agreement, Purchaser and its agents and contractors shall have the right, at Purchaser’s sole cost and expense, to enter onto and into the Real Property at reasonable times and in a reasonable manner as agreed to with Receiver prior to such entry (including but not limited to with Receiver’s agents as escorts), for the purpose of making such tests and inspections as Purchaser deems necessary in connection with this Agreement and as are otherwise in accordance with this Agreement; provided, however, that Purchaser shall not make any test in connection with a Phase II environmental report or any other test that involves drilling, boring or similar intrusive or invasive action on, in or under the Real Property without Receiver’s prior written consent, which may be granted or withheld in Receiver’s sole and absolute discretion. Purchaser shall not unreasonably disturb or annoy any other Person then on or in the Real Property in the course of making such tests and inspections.  Prior to commencement of any investigative activity on the Real Property, Purchaser shall, at its sole cost and expense, obtain a policy of comprehensive general liability insurance coverage covering any and all liability of Purchaser with respect to or arising out of any work to be performed by or for Purchaser as set forth in this Agreement, and Purchaser shall thereafter maintain such insurance in force throughout the term of this Agreement.  The policy of insurance shall have limits of not less than CDN $2,000,000 combined single limit per occurrence, shall be issued by a reputable insurance company qualified to do business in the Province of Alberta and shall name Receiver as an additional named insured, and Purchaser shall provide evidence to Receiver of such coverage prior to making any such test or inspection.  After making such tests and inspections, Purchaser at Purchaser’s cost shall restore the Property to substantially the same condition as existed prior to such tests and inspections. Further, in the event Purchaser fails to acquire the Shares pursuant this Agreement, Purchaser shall deliver to Receiver, promptly after the same are received by Purchaser, copies of all reports of the results of all tests, inspections and analyses of the Real Property.  Purchaser hereby indemnifies and agrees to defend and hold Receiver harmless from any loss, damage, cost or expense (including without limitation attorneys’ and solicitors’ fees) incurred by Receiver by reason of, any claim, mechanics lien, cause of action or liability arising out of any work performed on the Real Property for or by Purchaser or any acts or omissions of Purchaser or its agents or contractors on the Real Property, including but not limited to any actual physical damage to the Real Property or injury to persons caused by Purchaser or its agents or contractors in exercising its rights under this Section 10.1.

Receiver will, at the request of Purchaser, reasonably cooperate with Purchaser, without cost or liability to Receiver, in Purchaser’s dealings with the City of Calgary and other government authorities and agencies with respect to the Assets and the Shares, and will execute any documents reasonably required to enable Purchaser to complete its due diligence as described in this Section 10.1; provided, however, that Receiver shall not be obligated to incur any liability or obligation in connection threrewith.

 

10.2 If Purchaser is not satisfied with the results of its due diligence in Purchaser’s sole discretion, then at, or at any time before, 5:00 pm Vancouver time on the final day of the Due Diligence Period, Purchaser may terminate this Agreement by giving written notice of termination to Receiver.

 

 

 

 

11. Mutual Conditions Precedent

 

 

(a)	Receiver having obtained from the Court the Vesting Order, and the Vesting Order being substantially similar to the form of order attached hereto as Schedule “D”;

 

(b)	Receiver having obtained from the Alberta Court of Queen’s Bench an order recognizing the Vesting Order and approving and affirming the transactions contemplated herein, including without limitation the vesting of the Shares as provided in the Vesting Order;

 

(c)	Receiver having obtained from the Court the Final Order, and the Final Order confirming Plans of Arrangement substantially similar to the forms of plans attached hereto as Schedule “C”;

 

(d)	Each of the conditions precedent to the effectiveness of the Plans of Arrangement (including but not limited to the conditions precedent in Section 8.1 of each Plan of Arrangement) other than the consummation of the Closing having been satisfied;

 

(e)

Purchaser having obtained from the AGLC either a licence to operate the Casino in substantially the manner, and on substantially the same terms and conditions, as the Casino is currently operated (the “Gaming Licence”) or the consent of the AGLC to the change in ownership of Silver Dollar, which consent is in substance approved by Purchaser, whose approval shall not be unreasonably withheld (obtaining the Gaming License or such consent “Gaming Approval”);

 

 

(f)

There being no actions, claims, proceedings or governmental reviews in progress or pending that may affect the validity of the transactions contemplated hereby or that allege a competing claim to the ownership or control of the Shares or the Assets (including without limitation any appeal of, or any leave to appeal, the Final Order or the Vesting Order); and

 

(g)	The 21 calendar day statutory time for filing an appeal or application for leave to appeal of the Final Order and the 21 calendar day statutory time for filing an appeal or application for leave to appeal of the Vesting Order shall have expired.

For purposes of this Section 11.1:

 provided, however, that:

 

 

12. Purchaser’s Conditions Precedent

 

 

(a)	The representations and warranties of Receiver are true and correct as of the Effective Date and as of the Closing Date;

 

(b)

Any material liability, obligation or encumbrance that is provided in the forms of plans of arrangement attached hereto as Schedule “C” to be discharged (other than, for the avoidance of doubt, Permitted Liens) prior to or at the Closing but that is not to be discharged pursuant to the applicable Plan of Arrangement as confirmed by the Court, is discharged prior to or at the Closing as a result of any action taken by Receiver or any other party other than Purchaser;

 

(c)	Any Encumbrance provided in the form of vesting order attached hereto as Schedule “D” to be discharged but not discharged pursuant to the Vesting Order is discharged prior to or at the Closing as a result of any action taken by Receiver or any other party other than Purchaser;

 

(d)	Purchaser’s receipt of the Fortress Release, duly executed by Fortress; and

 

(e)	Receiver delivers, or causes to be delivered, to Purchaser the items referred to in Section 16.2.

Purchaser understands and acknowledges that Fortress shall have no obligation to execute and deliver the Fortress Release unless the Vesting Order obtained by the Receiver includes a provision that the release of any claims of Fortress against the Subsidiaries and the liens of Fortress in the Assets and the Shares is without prejudice to and does not in any way adversely affect the claims of Fortress against, and the liens of Fortress in the assets of, any of the other Evergreen subsidiaries and Fortress has obtained from the Receiver, acting on behalf of those other Evergreen subsidiaries, reaffirmations of the obligations of such other Evergreen subsidiaries to Fortress which reaffirmations are in form acceptable to Fortress and are executed and delivered pursuant to such court authorization as Fortress, the Receiver or its counsel shall deem necessary.  Receiver expressly agrees that it shall use Receiver’s best efforts to deliver to Fortress the reaffirmations described in the immediately preceding sentence, including without limitation obtaining any further Court approval as Fortress, the Receiver or its counsel may deem necessary therefor.

 

 

The parties acknowledge that that they have been advised by Fortress that Fortress Credit Opportunities I, L.P. and Fortress Credit Funding II, L.P. intend to assign their respective Claims (as defined in the Plans of Arrangement) against the Subsidiaries to Drawbridge Special Opportunities Fund LP (“DSOF LP”) and Drawbridge Special Opportunities Fund Ltd. (“DSOF Ltd.”), respectively.  If such assignments occur, the Fortress Release shall, upon Purchaser’s request, be executed and delivered at the Closing by Fortress Credit Corp. as agent for DSOF LP and DSOF Ltd.

 

12.2 Purchaser’s conditions are for the sole benefit of Purchaser.  None of Purchaser’s Conditions shall be waived except by written notice from Purchaser or its solicitors to Receiver or its solicitors.

 

13. Receiver’s Conditions Precedent

 

13.1 The obligations of Receiver to assign and transfer to Purchaser all right and interest in and to the Shares on the Closing Date shall be subject to, in addition to the conditions precedent set forth in Section 11, the following conditions precedent (“Receiver’s Conditions”) being fulfilled, performed or waived at or prior to Closing:

 

(a)	The representations and warranties of Purchaser are true and correct as of the Effective Date and as of the Closing Date; and

 

(b)	Purchaser delivers, or causes to be delivered, to Receiver the items referred to in Section 16.3.

 

13.2 Receiver’s Conditions are for the sole benefit of Receiver.  None of Receiver’s Conditions shall be waived except by written notice from Receiver or its solicitors to Purchaser or its solicitors.

 

14. Regulatory Approvals and Preservation of Business; Notification of Failure of Conditions; Other Obligations Prior to Closing

 

Between the Effective Date and the Closing (or any earlier termination of this Agreement in accordance with its terms):

 

 

14.2 Except (i) as otherwise required by applicable law, rule or regulation, (ii) as otherwise expressly contemplated by this Agreement, (iii) as approved in the Proceedings, or (iv) with the prior written consent of Purchaser, Receiver shall, until the Closing and taking into account the Proceedings, and subject in each case to Section 10.3:

 

(a)	use commercially reasonable efforts to operate, and cause EGC Holdings, EGC Properties and Silver Dollar to operate, the Undertaking in the ordinary and usual course; and

 

(b)

not sell, lease, or otherwise transfer or dispose of any of the Shares or cause EGC Properties or Silver Dollar to sell, lease, or otherwise transfer or dispose of any of the Real Property or any other material Asset, other than transfers and dispositions of non-material Assets in the ordinary course of business;

 

 

 

15. Receiver’s Obligations

 

15.1 Receiver shall on behalf of the Subsidiaries:

 

(a)	pay all amounts of the type required to be paid by the Subsidiaries under S. 18.2(1) of the CCAA with respect to the period beginning on June 24, 2009 and ending on the Closing Date to the party or parties to whom such amounts are required to be paid under said section; and

 

(b)

pay or discharge all Claims described in Sections 2.2(a), 2.2(c) and 2.2(d) of each plan attached hereto as Schedule “C”; provided, however, that Receiver shall not be obligated to pay any such Claim if and to the extent that such Claim (i) constitutes a “Current Liability” as defined in this Agreement and is properly included in the calculation of Estimated Working Capital and Final Working Capital pursuant to Section 3.6, or (ii) is or will be compromised or discharged pursuant to the Vesting Order.

Upon receipt of the Purchase Price, Receiver shall use such funds, together with all other assets available to Receiver, to make the payments required to be made by Receiver pursuant to this Section 15.1, and shall disburse to Fortress only such portion of the proceeds of the sale of the Shares as is in excess of the funds required to make such payments, as reasonably estimated by the Receiver, and only as permitted by an order of the Court.  As promptly as practicable thereafter, Receiver shall determine (or, if necessary, submit to the Court for determination) the amount of any additional proceeds of the sale due and owing to Fortress, and upon Receiver's receipt of the appropriate Court order, shall remit that amount to Fortress.

 

16. Closing

 

16.1 The Closing will be at 10:00 a.m., local time, on the first Business Day after all of the mutual conditions referred to in Section 11.1 have been satisfied, in Vancouver, at the offices of Fasken Martineau DuMoulin, LLP at 2900 – 550 Burrard Street, Vancouver, British Columbia, V6C 0A3 or at such other time or date or such other place as may be agreed upon by the Parties.

 

16.2 At the Closing, Receiver will deliver, or cause to be delivered, to Purchaser:

 

(a)	original share certificates in the name of EGC Holdings representing the Shares, duly endorsed for transfer by Receiver on behalf of EGC Holdings;

 

(b)	a copy of a letter terminating the Casino Management Agreement dated June 24, 2009 between Receiver and Penguin Management Services, Inc. effective as of the Closing;

 

(c)	the Fortress Release, duly executed by Fortress, and a counterpart of the Fortress Indemnity, duly executed by Indemnitor; and

 

(d)	such other documents and instruments as reasonably required by Purchaser to give effect to the transactions contemplated hereby.

 

16.3 At the Closing Purchaser will deliver, or cause to be delivered, to Receiver:

 

(a)	the amount, if any, payable by the Purchaser pursuant to the penultimate sentence of Section 3.6(a);

 

(b)	a certificate executed by an officer of Purchaser dated on the Closing Date to the effect that the representations and warranties of Purchaser are true and correct as of the Closing Date;

 

(c)	evidence satisfactory to Receiver that as of the Closing Date, or concurrently with the completion of the transactions contemplated herein, all Permits required in the operation of the Undertaking having been issued to Purchaser by the applicable governmental authority;

 

(d)	a counterpart of the Fortress Indemnity, duly executed by Purchaser; and

 

(e)	such other documents and instruments as reasonably required by Receiver to give effect to the transactions contemplated hereby.

 

 

16.5 Subject to compliance with the terms and conditions of this Agreement, the transfer of the Shares to Purchaser will be deemed to take effect as at the Closing.

 

17. Transfer Taxes; Notification of Tax Status

 

 

 

18. Costs

 

 

19. General

 

 

(a)	To Receiver at:

 

Grant Thornton Ltd.

Suite 1600 Grant Thornton Place

333 Seymour Street

Vancouver, BC V6B 0A4

Canada

Attention: Roger Burgon

Fax No.: (604) 685-6569

Email:            ***@***

 

with a copy to:

 

Fasken Martineau DuMoulin LLP

2900 - 550 Burrard St

Vancouver, BC  V6C 0A3

Canada

Attn:  John F. Grieve

Fax No.:   ###-###-####

Email:   ***@***

 

(b)	To Purchaser at:

 

Century Casinos Europe GmbH

Untere Viaduktgasse 2

3rd Floor

Vienna 1030

Austria

Attention:  Peter Hoetzinger

Fax No.:  + 431 5336 3334

Email:            ***@***

 

with a copy to:

 

Field LLP

2000 Oxford Tower

10235 101 Street

Edmonton AB  T5J 3G1

Canada

Attn:  Rick H. Pabst

Fax No.:   ###-###-####

Email:   ***@***

 

 

 

 

 

19.5 If any provision hereof is unenforceable it will be severed from this Agreement and the remainder of the Agreement will remain in full force and effect.

 

 

19.7 No change or modification of this Agreement is valid unless it is in writing and signed by each Party.

 

19.8 Time is of the essence of this Agreement.

 

 

19.10 This Agreement may be executed in any number of counterparts, each of which will be deemed an original and all of which together constitute one and the same instrument.  Executed copies of this Agreement may be delivered by facsimile transmission or other electronic means and it is not necessary to confirm execution by delivery of originally executed documents.

[signature page follows]

 

IN WITNESS WHEREOF the Parties have executed this Agreement effective as of the day and year first above written notwithstanding the date of execution.

GRANT THORNTON LIMITED in its capacity as interim receiver and receiver and manager of EGC Holdings Ltd., and not in its personal capacity			CENTURY CASINOS EUROPE GMBH
Per:	/s/ Mark Wentzell		Per:	/s/ Larry Hannappel
	Authorized Signatory			Authorized Signatory
	Mark Wentzell			Larry Hannappel
	Name			Name
	Senior Vice President			Authorized Signatory
	Title			Title
	6 November 2009			6 November 2009
	Date of Execution			Date of Execution

The undersigned, as solicitors for Grant Thornton Limited in its capacity as interim receiver and receiver and manager of EGC Holdings Ltd., and not in its personal capacity, agree to be bound by the provisions of Sections 3 and 6 of this Agreement relating to the Deposit and the Section 3.1(b) Amount.

FASKEN MARTINEAU DUMOULIN LLP

Per:	/s/ Kibben Jackson
	Authorized Signatory
	Kibben Jackson
	Name
	Partner
	Title
	6 November 2009
	Date of Execution

Fortress agrees that subject to satisfaction (or express written waiver by Fortress) of each of the following conditions, Fortress shall execute the Fortress Release and deliver the Fortress Release to Purchaser at the Closing: (i)  the Vesting Order obtained by the Receiver includes a provision that the release of any claims of Fortress against the Subsidiaries and the liens of Fortress in the Assets and the Shares is without prejudice to and does not in any way adversely affect the claims of Fortress against, and the liens of Fortress in the assets of, any of the other Evergreen subsidiaries, and (ii) Fortress receives from the Receiver, acting on behalf of such other Evergreen subsidiaries, reaffirmations of the obligations of such other Evergreen subsidiaries to Fortress which reaffirmations are in form acceptable to Fortress and are executed and delivered pursuant to such court authorization as Fortress, the Receiver or its counsel may deem necessary.

FORTRESS CREDIT CORP., as Agent for Fortress Credit Opportunities I, LP and Fortress Credit Funding II, LP

EXHIBIT 1

Legal Description(s) of Real Property

1.	Lands and premises municipally described as 1010 - 42nd Avenue SE, Calgary, Alberta and legally described as:

 

PLAN 8368HA

BLOCK 24

EXCEPTING THEREOUT ALL MINES AND MINERALS

 

2.	Lands municipally described as 4412 - 9th Street SE, Calgary, Alberta and legally described as:

 

PLAN 8121 HN

BLOCK 4

THE SOUTH 236.27 FEET

CONTAINING 0.421 HECTARES (1.04 ACRES) MORE OR LESS

EXCEPTING THEREOUT ALL MINES AND MINERALS

 

3.	Lands municipally described as 1007 - 42nd Avenue SE, Calgary, Alberta and legally described as:

 

PLAN CALGARY 8121HN

BLOCK FOUR (4)

CONTAINING TWO AND TWENTY NINE HUNDREDTHS (2.29) ACRES MORE OR LESS

EXCEPTING THE SOUTH TWO HUNDRED AND THIRTY SIX AND TWENTY SEVEN ONE HUNDREDTHS (236.27) FEET CONTAINING ONE AND FOUR HUNDREDTHS (1.04) ACRES MORE OR LESS

EXCEPTING THEREOUT ALL MINES AND MINERALS

 

EXHIBIT 2

 

Accounting Arbitration Procedures

 

Any dispute submitted for resolution pursuant to Section 3.2 or Section 3.6 shall be resolved pursuant to the provisions of the International Commercial Arbitration Act, R.S.B.C. 1996, c.233 and for that purpose the Accountants will be asked to select a senior member of their firm to serve as sole arbitrator and the individual so selected will be deemed to have been duly appointed with the agreement of both parties as sole arbitrator under ss.11(2) of that act; provided, however, that if at such time either Receiver or Purchaser shall discover a bona fide conflict with respect to the Accountants (including, without limitation, that the Accountants provided any advice to either party with respect to any matter provided for in this Agreement), the parties shall submit the matter to another mutually agreeable independent firm of chartered accountants to resolve the remaining matters in dispute, and such firm shall be the Accountants for all purposes of this Agreement.

 

Purchaser and Receiver shall direct the Accountants to use their best efforts to render a determination within 30 days of submitting to the Accountants for resolution either (i) the disputed allocation of the Purchase Price (in the case of a dispute submitted pursuant to Section 3.2) or (ii) the matters set forth in the Objection Notice (in the case of a dispute submitted pursuant to Section 3.6), and Receiver and Purchaser and their respective Representatives will cooperate with the Accountants during their resolution of any and all such matters.

 

In the case of a dispute submitted pursuant to Section 3.6, the Accountants will consider only those items and amounts set forth in the Objection Notice that Purchaser and Receiver are unable to resolve, and in resolving any such disputed item, the Accountants may not assign a value to any item greater than the greatest value for such item claimed by either Party or less than the smallest value for such item claimed by either Party. The scope of the disputes to be arbitrated by the Accountants pursuant to Section 3.6 is limited to whether the preparation of the disputed Final Closing Balance Sheet(s) and the calculation of the disputed Final Working Capital were consistent with the Agreed Accounting Principles and the terms of Section 3.6 (including but not limited to the definitions of Final Working Capital, Current Assets and Current Liabilities) and whether there were mathematical errors in the preparation of the disputed Final Closing Balance Sheet or the calculation of the disputed Final Working Capital and the Accountants are not to make any other determination.

 

The fees and expenses of the Accountants incurred pursuant to Section 3.6 shall be paid by the Party whose calculation of the total amount of disputed Final Working Capital was furthest from the total amount of disputed Final Working Capital as determined by the Accountants.  The fees and expenses of the Accountants incurred pursuant to Section 3.2 shall be paid by the Party whose allocation of the Purchase Price was furthest from the allocation of the Purchase Price determined by the Accountants.

 

The determination of the Accountants as to any disputed matters shall be set forth in a written statement delivered to Purchaser and Receiver and shall be final, conclusive and binding on the parties.  The parties agree that judgment may be entered upon the award of the Accountants in any court having jurisdiction pursuant to the terms of this Agreement.

 

If issues in dispute are submitted to the Accountants for resolution, each Party will furnish to the Accountants such workpapers and other documents and information relating to the disputed issues as the Accountants may request and are available to that party (or its independent chartered accountants), and will be afforded the opportunity to present to the Accountants any material relating to the determination and to discuss the determination with the Accountants.