sagebrushex1022.htm










Exhibit 10.22


 


 




	 	
The Empire Sports & Entertainment, Co.


110 Greene Street, Suite 403


New York, New York 10012


Telephone:          (212) 810-6193


Fax:                      (646) 370-4283










April 26, 2011


 


Capital Hoedown Inc.


152 Boul. De Lucerne


Suite 201


Gatineau, QC J9A 3V8Attention:  Denis Benoit, President and Chief Executive Officer







Gentlemen:


 


Revolving Demand Loan


 


We are pleased to confirm that The Empire Sports & Entertainment, Co.(the “Lender”) is prepared to make the Revolving Demand Loan (the “Loan”) to you (the “Borrower”), subject to the terms and conditions in this letter agreement (this “Agreement”) set forth below:


 



	
Principal Terms of the Loan:


	
Borrower:

	
Capital Hoedown Inc.


	
Lender:

	
The Empire Sports & Entertainment, Co.


	
Type of Facility:

	
Revolving demand loan


	
Maximum Amount:

	
US$4,000,000


	
Interest Rate:

	
Ten percent (10%) per annum, compounded annually


	
Closing Date:

	
April __, 2011


	
Termination Date:

	
January 15, 2012


	
Purpose:

	
The Loan to be used exclusively for the operation and management of Capital Hoedown Inc.







 


Terms applicable to the Loan:





	
1. 

	
Definitions:

	
Certain defined terms are set out in Schedule A hereto.


 

	  
	
2. 

	
Schedules and Exhibits:

	
The attached Schedules and Exhibits are incorporated herein by reference.


 

	  
	
3. 

	
Utilization:

	
The Lender may, but shall have no obligation to, make the Loan and the Borrowings available to the Borrower on a revolving basis, subject to (i) the Lender’s sole and exclusive discretion to do so, (ii) fulfillment by the Borrower of the conditions precedent to the making of the Loan as set forth in this Agreement and (iii) subject to all other terms and conditions of this Agreement.

	  



 




  





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4. 

	
Borrowing Requests:

	
To request a Borrowing, the Borrower shall notify the Lender of such request by written Borrowing Request, not later than 11:00 a.m. (Toronto time) three Business Days before the date of the proposed borrowing.  Each Borrowing Request shall specify the aggregate amount of each requested Borrowing, the date of such Borrowing (which shall be a Business Day) and, if the Borrowing shall be by wire transfer, the location and number of the Borrower’ account to which funds are to be disbursed.


 

	  
	
5. 

	
Funding of Borrowing:

	
The Lender may, but shall have no obligation to, make the Loan, which Loan may be made by cheque or wire transfer directly to the Borrower as directed in the applicable Borrowing Request.


 

	  
	
6. 

	
Evidence of Debt:

	
The indebtedness of the Borrower under this Agreement shall be evidenced by the accounts and records of the Lender.  Such accounts and records shall record the aggregate outstanding amount of the Loan (including all Borrowings) and all payments and prepayments made in respect thereof.  The Lender’s accounts and records shall constitute, in the absence of manifest error, prima facie evidence of the indebtedness of the Borrower to the Lender and such other information as may be set out therein.  The Loan and any Borrowing made under this Agreement shall be evidenced by a promissory note.


 


The Borrower hereby acknowledge and agree that each of the advances made by the Lender prior to the date hereof which are set forth on Schedule B constitute Borrowings under the Loan.


 

	  
	
7. 

	
Termination of Loan:

	
Unless previously terminated, the Loan shall terminate on the Termination Date.


 

	  
	
8. 

	
Repayment of Loan:

	
The Borrower shall be obligated to repay the aggregate outstanding principal amount of the Loan (including all Borrowings), accrued interest thereon and all other amounts owing hereunder (including but not limited to any fees and expenses) on the earlier of (i) the Termination Date, and (ii) upon demand by the Lender.


 


Payments to the Lender shall be made to the following account or such other account as may be specified by the Lender in writing from time to time:


 


Bank:                             JP Morgan Chase Bank, N.A.


Address:                       1450 Brickell Avenue, Suite 3200, Miami, FL 33131


Account Holder:          EXCX Funding Corp.


Account No.:                877155101


 





 




  





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All such payments shall be deemed to have been made on account of the repayment of the Loan.


 


At any time, and from time to time, the Borrower shall be entitled, at their sole discretion to repay any or all of the outstanding principal amount of the Loan (including all Borrowings), accrued interest thereon and all other amounts owing hereunder (including but not limited to any fees and expenses).


 


In the event of any repayment, the amount paid by the Borrower shall be applied in the following priority: (i) first, against any fees and/or expenses owed by the Borrower pursuant to the Loan and all Borrowings hereunder; (ii) thereafter, against all accrued interest on the Loan and all Borrowings hereunder; and (iii) thereafter, against the outstanding principal amount of the Loan and all Borrowings hereunder.


 


All repayments shall be made by cheque or wire transfer payable to the Lender in United States Dollars in same day funds.


 







	
9. 

	
Interest Rate:

	
Interest on the Loan shall accrue at the Interest Rate on the daily balance of the outstanding Loan and all other amounts owed hereunder.


For the purposes of the Interest Act (Canada) and disclosure thereunder, whenever any interest to be paid hereunder or in connection herewith is to be calculated on the basis of any period of time that is less than a calendar year, the yearly rate of interest to which the rate used in such calculation is equivalent is the rate so used multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by 360.


 


	
10. 

	
Interest on


Overdue Amounts:

	
If any principal, interest or any other amount payable hereunder is not paid when due, the Borrower shall pay on demand interest on such overdue amount both before or after judgment at a rate per annum equal to fifteen percent (15%).  Such interest shall accrue on a daily basis and shall be payable on demand.


 


	
11. 

	
Currency Indemnity:

	
Any payment on account of an amount due in United States Dollars that is paid in any other currency for any reason (including, without limitation, pursuant to a court order) shall constitute a discharge of the obligations of the Borrower hereunder only to the extent of the United States Dollar amount that the Lender is able to purchase with the foreign currency amount so received on the date of receipt and the Borrower shall indemnify the Lender in respect of any shortfall.


 


	
12. 

	
Security:

	
CHI shall grant to the Lender a security interest in all of its present and future assets and shall deliver to the Lender a security agreement (the “CHI Security Agreement”) in a form satisfactory to the Lender.


 





 




  





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13. 

	
Conditions


Precedent to


Borrowing:

	
No Borrowing shall be advanced unless the Borrower have satisfied, and continue to satisfy, the following conditions:


	  	  	
(a) The Borrower shall cause the following to have been executed and delivered to the Lender:


 


	  	  	
(i) the CHI Security Agreement; and


 


(ii) all other security documentation and/or deliveries reasonably requested by the Lender as security for the Loan.


 


	  	  	
(b) The Lender shall have registered personal property security registrations against the Borrower in all jurisdictions where such registrations are required in order to perfect the security interest granted to the Lender pursuant to the CHI Security Agreement


 


(c) All representations and warranties contained herein shall be true and correct on the date of the advance of the Loan.


 


	  	  	
(d) The Borrower shall not be in default under any agreement with respect to any indebtedness on the date of the advance of the Loan.


 


	
14. 

	
Representations


and


Warranties:

	
The Borrower jointly and severally represent and warrant to the Lender, which representations and warranties shall be deemed to be repeated at the time the Loan or any Borrowing is advanced hereunder, that:


	  	  	
(a) each of the Borrower is solvent and neither of them is aware of any conditions that would render either of them insolvent;


 


(b) this Agreement and the CHI Security Agreement delivered by the Borrower constitute, and the transactions contemplated hereunder shall constitute, legal, valid and binding obligations of the Borrower, enforceable against them in accordance with their terms;


 


	  	  	
(c) upon execution and delivery of the CHI Security Agreement, the Lender shall have a perfected first priority security interest in the collateral described therein;


 





 




  





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(d) no event has occurred that constitutes, or that with the giving of notice, lapse of time or other condition would constitute, a default under or in respect of any agreement, undertaking or instrument to which the Borrower or any of their respective properties or assets may be subject;


 


	  	  	
(e) none of the documents, financial statements or other materials provided to the Lender by the Borrower in connection with this Agreement or the Event contain any untrue statement of a material fact, or omit to state any material fact, necessary to make the information contained therein not misleading, or are in any other manner inaccurate or misleading in any material respect;


 


(f) there are no legal or administrative proceedings pending, or to the knowledge of the Borrower threatened, against them; and


 


(g) the Borrower have not incurred any liabilities (including any guarantees or other contingent liabilities) or indebtedness, other than the Borrower’ incurring of indebtedness under this Agreement.


 


	
15. 

	
Covenants:

	
The Borrower covenants that,


(a) except with the prior written consent of the Lender, the Borrower shall not incur any liabilities (including any guarantees or other contingent liabilities) or indebtedness, other than indebtedness incurred under this Agreement;


 


(b) the Borrower will keep proper books or record and account in which full, true and correct entries are made of all dealings and transactions in relation to their business and activities; and


 


(c) the Borrower will permit the Lender or any of its representatives, upon prior notice, to visit and inspect its books and records, and to otherwise be provided with any information regarding its affairs, finances and condition as requested by the Lender.


 


	
16. 

	
Reporting


Requirements:

	
The Borrower agrees with the Lender:


	  	  	
(a) to promptly give notice to the Lender of:


 


(i) any default by either of the Borrower under any material agreement;


 


(ii) the insolvency of the Borrower or the institution by the 





 




  





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Borrower or any creditor thereof of any proceeding under any bankruptcy or insolvency law or the appointment of a receiver or trustee for the Borrower, the execution by the Borrower of any assignment for the benefit of creditors, or any execution, seizure, stay, moratorium, distress or similar process that is enforceable against the Borrower or any of their assets;


 


(iii) any change in the ability of the Borrower to meet its obligations to the Lender; and


 


(iv) the commencement of any litigation or proceeding to which the Borrower is a party.







	  	  	
(b) to provide from time to time such further information regarding the business, property, financial condition or other condition of the Borrower as the Lender may reasonably request.


 


	
17. 

	
Set-Off:

	
All payments to be made by the Borrower hereunder shall be made without deduction, set-off or counterclaim by the Borrower.  The Lender may set-off any liabilities owing by it to the Borrower from time to time against all amounts owing by the Borrower hereunder.  For certainty, the provisions of the CHI Security Agreement shall not restrict or otherwise affect the Lender’s exercise of its rights of set-off at any time.


 

	  
	
18. 

	
Notice:

	
Any notice or demand contemplated hereunder shall be given in writing by telecopier or by hand delivery and shall be addressed as follows:


 

	  
	  	  	
To the Lender:


 

	  
	  	  	
The Empire Sports & Entertainment Company


 


110 Greene Street, Suite 403


New York, NY 10012

	  
	  	  	
Facsimile: (646) 370-4283


Attention: Mr. Shelly Finkel, Chief Executive Officer


 

	  
	  	  	
To the Borrower:


 

	  
	  	  	
Capital Hoedown Inc.


 


152 Boul. De Lucerne


Suite 201

	  



 




  





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Gatineau, QC J9A 3V8


Attention:  Denis Benoit, President and Chief Executive Officer


 




Facsimile:                      (866) 343-3981


 

	  
	  	  	
Any such notice or demand if telecopied before 4:00 p.m. on a Business Day shall be deemed to be given and received on that day and otherwise on the Business Day next following the date of transmission, and if hand delivered, when delivered if delivered on a Business Day, otherwise on the Business Day next following the date of delivery.


 

	  
	
19. 

	
Expenses:

	
The Borrower shall pay all expenses incurred by the Lender in connection with the enforcement of the Lender’s rights under or in connection with this Agreement and any other documentation or actions contemplated thereby.


 

	  
	
20. 

	
Severability:

	
Any provision of this Agreement that is invalid or unenforceable in any jurisdiction shall be, as to such jurisdiction only, ineffective to the extent of such invalidity or unenforceability without invalidating or otherwise affecting the remaining provisions hereof, and any invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provisions in any other jurisdiction.


 

	  
	
21. 

	
Time:

	
Time shall be of the essence of all provisions of this Agreement.


 

	  
	
22. 

	
Governing Law:

	
This Agreement shall be construed in accordance with and governed by the laws of the Province of Ontario and the laws of Canada applicable therein and the parties attorn to the non-exclusive jurisdiction of the courts of Ontario.


 

	  
	
23. 

	
Assignment:

	
The Borrower shall not assign or transfer all or any part of their rights or obligations under this Agreement without the prior written consent of the Lender.  The Lender may assign all or any part of its rights and obligations hereunder upon giving written notice to the Borrower.


 

	  
	
24. 

	
Whole Agreement:

	
This Agreement and any documents and instruments delivered pursuant to or referenced in this Agreement constitute the whole and entire agreement between the Borrower and the Lender in connection with the subject matter hereof.


 

	  





 


[Signature Page Follows]


 







 




  





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Please acknowledge your acceptance of the above terms and conditions by signing the attached copy of this letter in the space provided below and returning it to the undersigned.


 


Yours very truly,


 


          




 



	 	

THE EMPIRE SPORTS & ENTERTAINMENT, CO.


 



	 
	 	
 

	  	 
	 	By:	
 

	 
	 	Title:	 	 




 


 


We acknowledge and accept the terms and conditions of this Agreement as of the date first above written.


 




	 	


CAPITAL HOEDOWN INC.



	 
	 	
 

	 	 
	 	By:	
 

	 
	 	Title:	 	 







 




 


 







 




  





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Schedule A – Definitions


 


“Borrowing” means any availment of the Loan.


 


“Borrowing Request” means a request by the Borrower for a Borrowing, substantially in the form of Exhibit A.


 


“Business Day” means a day, excluding Saturday, Sunday and any other day which shall be in the City of Toronto or New York City a legal holiday or a day on which banking institutions are closed.


 


“CHI Security Agreement” has the meaning provided herein in Section 12.


 


“Event” means an annual country music festival in Ottawa, Ontario to be operated by Capital Hoedown Inc. and named “Capital Hoedown”


 


“Guarantee” has the meaning provided herein in Section 12.


 


“Person” includes any natural person, corporation, company, limited liability company, trust, joint venture, association, incorporated organization, partnership, governmental authority or other entity.


 


“Pledge Agreement” has the meaning provided herein in Section 12.


 


“Termination Date” means January 15, 2012.


 


“United States Dollars” and the symbol “US$” means lawful money of the United States of America.


 














  





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Schedule B – Prior Advances


 







 



	
Date

	
Amount


	
February 24, 2011

	
US$1,305,000


	
February 25, 2011

	
US$200,000


	
March 2, 2011

	
US$25,000


	
March 14, 2011

	
US$20,000


	
March 21, 2011

	
US$10,560


	
March 22, 2011

	
US$22,275


	
March 28, 2011

	
US$23,900


	
March 30, 2011

	
US$297,500


	
April 4, 2011

	
US$40,000









 


 




  





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Exhibit A


 


Form of Borrowing Request


 



	
TO:

	
The Empire Sports & Entertainment Company







 



	
RE:

	
Loan Agreement dated as of April __, 2011 made between the undersigned (the “Borrower”), and you, as Lender, (as amended, supplemented or otherwise modified from time to time, the “Loan Agreement”)







 


We hereby give you notice that on [insert date] we wish to obtain a Borrowing in the aggregate amount of US$[ ].







The Borrowing requested hereby is pursuant to the Loan and shall be advanced to the Borrower by the following means:







[          ]                      by cheque


[          ]                      by wire transfer, at the following account:







[Insert wire transfer details if applicable]







We hereby certify, after due and careful investigation, that: each of the representations and warranties made by the Borrower in the Loan Agreement are true and correct on and as of the date hereof except to the extent that (i) any change to the representations and warranties has been disclosed to the Lender and accepted by the Lender, or (ii) any representation and warranty is stated to be made as of a particular time.


 


All terms defined in the Loan Agreement and used herein have the meanings given to them by the Loan Agreement.







DATED:  [·]






	 	


Capital Hoedown Inc.



	 
	 	
 

	 	 
	 	By:	
 

	 
	 	Name:	 	 
	 	Title:	 	 







 


 


 


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