Financial Agreements
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15 (d) of the Securities Exchange Act of
1934
Date
of Report: September 27, 2005
(Date
of
earliest event reported: September 22, 2005)
CENTURY
CASINOS, INC.
(Exact
Name of Registrant as specified in its charter)
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Delaware
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0-22290
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84-1271317
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(State
or other jurisdiction
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(Commission
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(I.R.S.
Employer
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of
incorporation)
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File
Number)
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Identification
Number)
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1263
Lake Plaza Drive Suite A, Colorado Springs, CO
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80906
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code:
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719-527-8300
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
‘
Written
communication pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
’
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
’
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
’
Pre-commencement pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01 Entry Into a Material Definitive Agreement
On
September 22 and 23, 2005, Century Casinos, Inc. (the
“Company”) and
its
subsidiaries consummated a number of financing arrangements or amendments
thereto.
On
September 23, 2005 Wells Fargo Bank advised CC Tollgate LLC via a letter of
commitment that it was prepared to provide a total of $35 million in financing
in the form of a $32.5 million construction term loan and a $2.5 million
revolving credit facility to develop a casino and hotel in Central City,
Colorado subject to finalization of closing documentation and satisfaction
of
other conditions stated in the previously agreed upon commitment letter and
term
sheet. A facility fee of approximately $1 million will be payable regardless
of
whether the credit facility closes, unless the failure to close is caused by
Wells Fargo or by one or more of the lenders.
This
summary of the terms of the letter is qualified in its entirety by the text
of
the letter, a copy of which is attached to this Form 8-K as exhibit 10.152
and
is incorporated herein by reference.
On
September 23, 2005, the Company and certain of its subsidiaries entered into
an
amendment to its existing revolving credit facility with Wells Fargo Bank,
N.A.
Pursuant to the terms of a Fourth Amendment to Amended and Restated Credit
Agreement (the “Fourth Amendment”), the Company, WMCK
Venture Corp. and subsidiaries (“the
Borrower Consolidation”)
and
Wells Fargo agreed to the following principal changes to the credit facility
(capitalized terms have the meanings ascribed to them in the Fourth Amendment
and in Section 1.01 of the existing credit facility):
| 1) |
The
Guarantor Funded Debt to Borrower Consolidation EBITDA Ratio Requirements
were eliminated from the credit
facility;
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| 2) |
The
definition of “EBITDA” used in the credit facility was revised to exclude
any cash and non-cash income (including, but not limited to, interest
income), transfers, loans and advances from the Company or any of
its
Subsidiaries that are not members of the Borrower
Consolidation;
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| 3) |
The
ability of the Company, or a subsidiary of the Company, to enter
into a
management agreement with the Borrowers was permitted but made subject
to
bank approval, subordination, interest rate and payment
limitations;
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| 4) |
The
Leverage Ratio financial covenant was amended to require the Borrower
Consolidation to maintain a maximum Leverage Ratio of 3.00 to 1.00
as of
the quarter ending September 30, 2005, decreasing, as scheduled in
the
Fourth Amendment, to 2.00 to 1.00 as of the quarter ending June 30,
2007
and for all remaining quarters until credit facility
terminates.
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This
summary of the terms of the Fourth Amendment is qualified in its entirety by
the
text of the Fourth Amendment, a copy of which is attached to this Form 8-K
as
exhibit 10.153 and is incorporated herein by reference.
On
September
22,
2005, CC Tollgate LLC (“Tollgate”), a 65% owned subsidiary of the Company,
entered into a Change in Terms Agreement (“Amendment”) with Colorado Business
Bank. The Amendment extends the maturity date of the previously disclosed
outstanding debt owed by Tollgate to Colorado Business Bank from October 4,
2005
to January 4, 2006. All other terms and conditions of the agreement remain
the
same. In conjunction with the continued development of the Company’s Central
City, Colorado project, the Company anticipates
repaying this debt with funds obtained from the Wells Fargo syndicated credit
facility.
This
summary of the terms of the Amendment is qualified in its entirety by the text
of the Amendment, a copy of which is attached to this Form 8-K as exhibit 10.155
and is incorporated herein by reference. A copy of the original agreement has
also been attached to this 8-K for reference.
On
September 23, 2005, the Company, through its subsidiary Century Resorts Alberta
Inc
(“CRA”)
agreed
to the terms of a $20.0 million CAD (approximately $17.1 million USD) credit
facility with Canadian Western Bank
(“the
Bank”)
for the
development of the Celebrations Casino and Hotel in Edmonton, Alberta, Canada.
The credit facility, which is subject to finalization of closing documentation,
is initially structured as a construction loan maturing on the earlier of 18
months from the initial construction draw or the receipt of a certified
architectural completion certificate, certificate of occupancy and casino
license. Upon maturity of the construction loan, the Bank
will
issue a term loan to CRA, maturing within one to five years at CRA’s preference.
Proceeds from the term loan will be used to pay the outstanding balance of
the
construction loan.
The
construction loan bears interest bears
interest at 1.25% per annum above the Bank’s Prime Lending Rate (currently 4.5%)
and is payable on the first day of each month. No principal payments are
required on the construction
loan. The interest rate on the term loan will be based on the maturity date
selected by CRA. Current interest rates range from 5.55% to 6.20%, depending
upon the maturity selected. Monthly principal and interest payments on the
term
loan, payable on the first day of each month, are based on a 10-year
amortization term. The loan facility is secured by the assets of CRA and
guaranteed by the Company.
The
most
significant conditions precedent to drawdown of the construction loan
are:
| 1) |
CRA
must sign a stipulated price construction contract for the entire
project.
The contract is currently being
negotiated.
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| 2) |
CRA
must obtain the typical building permits necessary to begin construction
of the casino.
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CRA
has
the option to prepay the construction loan, without penalty. CRA may elect
to
prepay up to 10% of the original principal amount of the term loan annually
without penalty or bonus; prepayment of any additional amounts is subject to
three months interest at the fixed interest rate.
This
summary of the terms of the credit facility is qualified in its entirety by
the
text of the commitment letters and amendments, a copy of which are attached
to
this Form 8-K as exhibit 10.154 and is incorporated herein by
reference.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant
The
disclosure contained in "Item 1.01 Entry into a Material Definitive Agreement"
of this Current Report on Form 8-K is incorporated in this Item 2.03 by
reference.
Item
9.01 Financial Statements and Exhibits.
(c)
Exhibits
10.148
Promissory
Note and Business Loan Agreement between Tollgate LLC and Colorado Business
Bank
dated April 8, 2005, and associated Commercial Guarantee provided by Century
Casinos, Inc.
10.152 Letter
of
Commitment from Wells Fargo Bank issued to CC Tollgate LLC for $35 million
in
financing dated as of September 23, 2005.
10.153 Fourth
Amendment to Amended and Restated Credit Agreement, dated as of September 23,
2005.
10.154 Commitment
letter by and between Century Resorts Alberta Inc. and Canadian Western Bank
dated September 23, 2005,
original commitment letter dated August 3, 2005 and amendments dated September
8, 2005 and September 21, 2005.
10.155 Change
in
Terms Agreement to Colorado Business Bank Loan, dated as of September 22,
2005.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
Century
Casinos, Inc.
(Registrant)
Date:
September 27, 2005
By: /s/ Ray Sienko
Ray
Sienko, Chief Accounting Officer