Document:

sagebrushex1020.htm

Exhibit 10.20

MANAGEMENT SERVICES AGREEMENT

 

THIS AGREEMENT is made as of the 26th day of April, 2011

 

BETWEEN

 

CAPITAL HOEDOWN INC., a corporation incorporated under the laws of the Province of Ontario (the “Company”),

 

AND

 

CONCERT INTERNATIONAL INC., a corporation incorporated under the laws of the Province of Ontario (the “Manager” or “CII”),

 

AND

 

DENIS BENOIT, an individual residing in the Province of Ontario (“Benoit”).

 

 

WHEREAS the Company wishes to appoint the Manager to provide management and administrative services, including without limitation, making available the services of Benoit to the Company with respect to the Event (as defined herein), and the Manager wishes to accept such appointment, on the terms set forth in this Agreement;

 

 

AND WHEREAS, Benoit is the sole owner of the Manager and, consequently, in consideration of the Company entering into this Agreement with the Manager, hereby acknowledges and agrees, in a personal capacity, to be bound by Section 6.4 and Articles 7, 8, 9, 10, 13, 14 and 15;

 

NOW THEREFORE THIS AGREEMENT WITNESSES:

 

	
1.  

	
DEFINITIONS

 

In this Agreement, unless the subject matter or context otherwise requires, the expression

 

	
(a)  

	
“Affiliate” means, with respect to any person, any other person who directly or indirectly Controls, is Controlled by, or is under direct or indirect common Control with, such person, and includes any person in like relation to an Affiliate.  A person shall be deemed to “Control” another person if such person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other person, whether through the ownership of voting securities, by contract or otherwise; and the terms “Controlled” and “Controlling” shall have similar meanings.

 

	
(b)  

	
“Agreement”, “hereof, “hereby”, “herein”, “hereunder”, and similar expressions refer to this instrument in its entirety and any and every Schedule hereto, each as amended, from time to time, and not to any particular Article, Section or portion

 

  

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hereof, and includes any and every instrument supplemental or ancillary hereto and any and every Schedule thereof;

 

	
(c)  

	
“Applicable Laws” means, unless the context otherwise dictates, any applicable statute of Canada or of a province or territory of Canada or any applicable regulations, rules, orders, policies or other laws made under statutory authority by any governmental or regulatory body or agency having jurisdiction over the Company;

 

	
(d)  

	
“Board of Directors” means the board of directors of the Company;

 

	
(e)  

	
“Business” means the business carried on by the Company and its Subsidiaries which involves the operation of the Event and related activities;

 

	
(f)  

	
“business day” means a day which is not a Saturday, Sunday or legal holiday in Toronto, Ontario;

 

	
(g)  

	
“Common Shares” means the common shares in the capital of the Company;

 

	
(h)  

	
“Company” means Capital Hoedown Inc.;

 

	
(i)  

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

 

	
(j)  

	
“Manager” means Concert International Inc., or any successor duly appointed as manager in accordance with the provisions of this Agreement;

 

	
(k)  

	
“Management Fee” has the meaning set forth in section 4.1;

 

	
(l)  

	
“person” means an individual, partnership, association, body corporate, trustee, executor, administrator or legal representative;

 

	
(m)  

	
“Shareholders” means holders of Common Shares;

 

	
(n)  

	
“Subsidiary” means a subsidiary within the meaning of the Business Corporations Act (Ontario) as the same may be amended, restated or replaced from time to time and any successor legislation thereto, except as otherwise expressly provided; and

 

	
(o)  

	
“Tax Act” means the Income Tax Act (Canada) and regulations thereunder, as amended.

 

	
2.  

	
APPOINTMENT OF MANAGER

 

2.1 The Company hereby appoints the Manager as the manager of the Company with respect to the Event and the Manager hereby accepts the appointment.

 

2.2 The Manager will be responsible for the day-to-day administration of the activities of the Company with respect to the Event subject in all cases to the control and approval of the Board 

 

  

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of Directors.  The Manager shall at all times provide the services of Benoit to the Company to provide, and supervise the provision by other employees of the Manager, the services required of the Manager hereunder.  Such services of Benoit are of the essence of this Agreement.  The Manager may from time to time employ other persons, under the supervision of Benoit, to assist the Manager in managing or providing administrative services or in performing other duties of the Manager as set out in this Agreement. Without limiting the generality of the foregoing, the Manager’s duties will include:

 

	
(a)  

	
managing the day-to-day administration of the activities of the Company with respect to the Event; and

 

	
(b)  

	
authorizing the payment of operating expenses incurred on behalf of the Company, provided that such expenses are specifically included in the Annual Budget of the Company (as “Annual Budget” is defined in the Unanimous Shareholder Agreement of even date herewith by and among The Empire Sports & Entertainment, Co. (“Empire”), the Manager and the Company) ; and ensuring that the Company complies with all other regulatory requirements.

 

2.3 The Manager undertakes to obtain and maintain such registrations and permits in such jurisdictions as may be necessary or appropriate to enable the Manager to carry out its duties hereunder in compliance with all Applicable Laws.

 

2.4 The Company, by decision of the Board of Directors, shall have the right, at its own expense, to procure life and/or disability insurance on Benoit for the benefit of the Company in such amount or amounts as it shall deem appropriate, and Benoit hereby agrees to cooperate, upon reasonable notice from the Company, in obtaining such insurance from time to time, including, without limitation, submission to physical examination and execution of any documents pertaining to such insurance.

 

	
3.  

	
RECORDS AND REPORTING

 

3.1 The Manager will keep at all times proper books of account and records relating to services performed hereunder, which books of account and records will be accessible for inspection by the Company at any time during ordinary business hours.  The Manager shall, in consultation with Empire, be responsible for retaining on behalf of the Corporation (i) a firm of certified public accountants to produce financial statements (including without limitation a balance sheet, profit and loss statement, and statement of changes in cash flows) in accordance with each of United States and Canadian generally accepted accounting principles, which financial statements shall be delivered directly by such accountants to each of Empire, the Manager and the Company, and (ii) a bookkeeper to maintain the Company’s books and records, provided that the retention of such accountants and bookkeeper shall be subject at all times to the continuing approval of Empire.

 

3.2 The Company will make available to the Manager all information, reports and financial statements with regard to its affairs as the Manager may from time to time reasonably request for the purposes of its functions hereunder.

 

  

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3.3 Without limiting the foregoing, the Manager shall deliver to Empire copies of all invoices to or by the Company and of all executed agreements to which the Company is a party promptly upon the Manager’s or the Company’s receipt thereof.

 

	
4.  

	
MANAGEMENT FEES 

 

4.1 Subject to the terms of this Agreement, the Company will pay to the Manager an annual management fee (the “Management Fee”) equal to CAD$12,500 per month for such number of months as during which the Manager shall actively perform services to the Company in connection with the Event payable in each year in which the Event is produced.  During 2011, the Company shall pay the Manager the Management Fee for the eight (8) months from January through August, 2011, for a total of CAD$100,000.  The Company and the Manager shall agree on the number of months with respect to which the Management Fee shall be paid for each year in which the Event is produced subsequent to 2011, such agreement not to be unreasonably withheld, delayed or conditioned by either party.

 

4.2 The Management Fee will be paid in monthly instalments equal to one-twelfth of the Management Fee within ten days after the end of each month.

 

	
5.  

	
EXPENSES OF THE COMPANY

 

5.1 The Company will be responsible for paying all fees and expenses incurred in connection with the operation and administration of its Business except as expressly provided herein.

 

5.2 The Company will not be responsible for the payment of any fees or expenses for services provided by Benoit or any other service provider retained by the Manager. The fees or expenses of Benoit and any other such service providers shall be obligations of, and shall be paid by, the Manager.

 

	
6.  

	
MANAGER AS INDEPENDENT CONTRACTOR

 

6.1 The Manager will perform its duties as manager hereunder as an independent contractor.

 

6.2 Neither the Manager nor any of its partners or employees are for the purposes of this Agreement employees of the Company and nothing herein shall be construed so as to make them employees or to impose any liability on the Company in the context of employer or employee.

 

6.3 The Manager will bear the sole and complete responsibility and liability for the employment, conduct and control of its partners, employees, agents and contractors and for the injury of such persons or injury to others through the actions or omissions of such persons.

 

6.4 Benoit acknowledges that he is not an employee of the Company and that he provides services to the Company solely through his role as an employee of or contractor to the Manager.

 

	
7.  

	
STANDARD OF PERFORMANCE

 

7.1 The Manager shall exercise its powers and discharge its duties to the Company in a professional, diligent and ethical manner and on a basis which is fair and reasonable to the 

 

  

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Company, shall act honestly, in good faith and in the best interests of the Company and the Shareholders and shall exercise the degree of care, diligence and skill that a prudent and qualified manager would exercise in comparable circumstances.

 

7.2 The Company acknowledges that the Manager and Benoit may devote a material portion of their time and attention to commercial activities other than the services to be performed hereunder, provided that such activities do not materially interfere with the duties and obligations of the Manager hereunder and are not competitive with the Business.

 

	
8.  

	
TERM AND TERMINATION OF AGREEMENT; DISABILITY OF BENOIT

 

8.1 This Agreement will be effective on the reference date of this Agreement and will thereafter continue in force until terminated in accordance with the provisions herein.

 

8.2 Each of the Company and the Manager may terminate this Agreement without cause upon providing 180 days prior written notice to the other party.

 

8.3 The Company may also immediately terminate the Manager if:

 

	
(a)  

	
the Manager is in material default of its obligations under this Agreement and such default continues for 10 business days from the date that the Manager receives notice requiring it to cure such default;

 

	
(b)  

	
the Manager has been declared or has filed a petition seeking to be declared bankrupt or insolvent or has entered into liquidation or winding-up, whether compulsory or voluntary (but not merely a voluntary liquidation for the purposes of an amalgamation or reorganization);

 

	
(c)  

	
the Manager makes a general assignment for the benefit of its creditors or otherwise acknowledges its insolvency; or

 

	
(d)  

	
the assets of the Manager have become subject to seizure or confiscation by any public or governmental authority.

 

8.4 In the event of the Disability of Benoit for a consecutive period of not less fourteen (14) days, and in the further event that, upon or after such fourteen (14) day period of Benoit’s disability the Company reasonably determines that Benoit is likely to continue to be disabled for an additional consecutive period of not less than fourteen (14) days, the Company shall have the right to engage or employ another person (a “Replacement Manager”) to discharge the duties of the Manager hereunder.In such event, the Management Fee which would be otherwise payable hereunder to CII and Benoit for the continuing period of Benoit’s disability shall instead be payable by the Company to the Replacement Manager.  For the purposes of this Agreement, “Disability” shall be defined as Benoit’s inability to perform all or a material portion of his material duties to CII and to the Corporation as set forth in the Management Services Agreement,

 

  

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9.  

	
CONFIDENTIALITY OF INFORMATION

 

The Manager and Benoit will at all times maintain the confidentiality of financial and other information which they may have or obtain through or on behalf of the Company, the disclosure of which may adversely affect the interests of the Company.  However, the Manager and Benoit may disclose such information to the extent that disclosure of all or any part of it is required by law or if the Company advises that such disclosure is in the best interests of the Company or is otherwise required to be disclosed pursuant to the terms of this Agreement. The Manager and Benoit will use such information and data only for the benefit of the Company.

 

	
10.  

	
AMENDMENTS

 

10.1 This Agreement shall not be changed, modified, terminated or discharged in whole or in part, except by instrument in writing signed by the parties hereto, or their respective successors or permitted assigns, or otherwise as provided herein.

 

	
11.  

	
ASSIGNMENT AND DELEGATION

 

11.1 The Manager may assign its rights and obligations under this Agreement to another company owned or controlled by Benoit, subject to the consent of Empire, which consent shall not be unreasonably withheld or delayed, provided that the assignee is assigned all of the obligations of the Manager.

 

11.2 The Company may assign its rights and obligations under this Agreement at any time upon 30 days’ prior written notice to the Manager.

 

	
12.  

	
ACTION UPON TERMINATION

 

12.1 From and after the effective date of termination of this Agreement pursuant to Section 8, the Manager will be entitled to receive accrued compensation to which it is entitled pursuant to this Agreement up to and including the effective date of termination. Termination of this Agreement in accordance with its terms will not result in any penalty or fee.

 

12.2 Upon resignation or removal, the Manager shall do all things necessary to effectively transfer the management of the Company to the successor manager.

 

	
13.  

	
NOTICES

 

Any notice, request or other communication in connection with this Agreement must be in writing and will be sufficiently given if delivered by hand, mailed by registered prepaid first class mail (receipt requested) or sent by facsimile transmission as follows:

 

to the Company at:

 

Capital Hoedown, Inc.

c/o The Empire Sports & Entertainment, Co.

110 Green Street, Suite 403

New York, New York 10012

 

  

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Attention:  Shelly Finkel, Chief Executive Officer

Facsimile:  (646) 370-4823

to the Manager or Benoit at:

 

152 Boul. De Lucerne

Suite 201

Gatineau, QC J9A 3V8

 

Attention:  Denis Benoit, President and Chief Executive Officer

Facsimile:  (866) 343-3981

 

Any such communication shall be deemed to have been validly and effectively given (i) if personally delivered, on the date of such delivery if such date is a business day and such delivery was made prior to 4:00 p.m. (Toronto time) and otherwise on the next business day, (ii) if sent by recognized overnight courier, return receipt requested, on the date of delivery thereof, or (iii) if transmitted by facsimile or similar means of recorded communication on the business day following the date of transmission.  Any party may change its address for service from time to time by notice given in accordance with the foregoing and any subsequent notice shall be sent to such party at its changed address.

 

	
14.  

	
GOVERNING LAW

 

This Agreement is governed by the law of Ontario.

 

	
15.  

	
ENUREMENT

 

This Agreement will be binding on and enure to the benefit of the Company and the Manager and their successors and permitted assigns.

 

  

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IN WITNESS WHEREOF the parties hereto have executed this Agreement on the day and year first above written.

 

	 	
CAPITAL HOEDOWN INC.

	 
	 	
Per:

	  	 
	 	  	
Name: Denis Benoit

Title: President

	 
	 	
Per:

	  	 
	 	  	
Name: Shelly Finkel

Title: Chief Executive Officer and    Secretary

	 
	 	
 

CONCERT INTERNATIONAL INC.

	 
	 	
Per:

	 	 
	 	  	
Name: Denis Benoit

Title: President and Chief Executive Officer

 

	 

I hereby acknowledge and agree, in a personal capacity, to be bound by the terms and conditions set forth in Section 6.4 and Articles 7, 8, 9, 10, 13, 14 and 15.

Dated as of the 26th_day of April, 2011.

____________________________

DENIS BENOIT

 

8sagebrushex1021.htm

Exhibit 10.21

 

 

	 	
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

 

Concert International Inc.

 

and

 

Mr. Denis Benoit

 

152 Boul. De Lucerne

Suite 201

Gatineau, QC J9A 3V8

Attention:  Denis Benoit, President and Chief Executive Officer

Dear Denis:

 

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 and Concert International Inc., jointly and severally in all respects (together, the “Borrowers”), subject to the terms and conditions in this letter agreement (this “Agreement”) set forth below:

 

	
Principal Terms of the Loan:

	
Borrowers:

	
Concert International Inc. (“CII”)

Denis Benoit (“DB”)

	
Lender:

	
The Empire Sports & Entertainment Company

	
Type of Facility:

	
Revolving demand loan

	
Maximum Amount:

	
US$500,000

	
Interest Rate:

	
Ten percent (10%) per annum, compounded annually

	
Closing Date:

	
April 26, 2011

	
Termination Date:

	
January 15, 2012

	
Purpose:

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

Terms applicable to the Loan:

  

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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 Borrowers on a revolving basis, subject to (i) the Lender’s sole and exclusive discretion to do so, (ii) fulfillment by the Borrowers 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.

 

	  
	
4. 

	
Borrowing Requests:

	
To request a Borrowing, the Borrowers 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 Borrowers’ 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 Borrowers as directed in the applicable Borrowing Request.

 

	  
	
6. 

	
Evidence of Debt:

	
The indebtedness of the Borrowers 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 Borrowers 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 Borrowers 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 Borrowers 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.

 

 

 

  

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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

 

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 Borrowers 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 Borrowers shall be applied in the following priority: (i) first, against any fees and/or expenses owed by the Borrowers 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 Borrowers 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.

  

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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 Borrowers 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:

	
CII 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 “CII Security Agreement”) in a form satisfactory to the Lender and shall pledge to the Lender all the shares of Capital Hoedown Inc. owned by it from time to time and shall deliver to the Lender a pledge agreement (the “Pledge Agreement”) in a form satisfactory to the Lender.  Benoit shall provide to Lender a personal guarantee (the “Guarantee”) of the obligations of CII and under the Loan and shall grant to the Lender a security interest in all of his present and future assets (the “Benoit Security Agreement”) and shall deliver to the Lender the Guarantee and Benoit Security Agreement each in a form satisfactory to the Lender.

 

	
13. 

	
Conditions

Precedent to

Borrowing:

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

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

 

	  	  	
(i) the CII Security Agreement, the Pledge Agreement, the Benoit Security Agreement and the Guarantee; 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 Borrowers in all jurisdictions where such registrations are required in order to perfect the security interest granted to the Lender pursuant to the CII Security Agreement, the Pledge Agreement and the Benoit 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 Borrowers shall not be in default under any agreement with respect to any indebtedness on the date of the advance of the Loan.

 

  

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14. 

	
Representations

and

Warranties:

	
The Borrowers 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 Borrowers is solvent and neither of them is aware of any conditions that would render either of them insolvent;

 

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

 

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

 

	  	  	
(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 Borrowers 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 Borrowers 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 Borrowers threatened, against them; and

 

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

 

	
15. 

	
Covenants:

	
The Borrowers covenants that,

 

  

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

 

(b) the Borrowers 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) each of the Borrowers 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 Borrowers agree with the Lender:

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

 

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

 

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

 

(iii) any change in the ability of the Borrowers to meet their obligations to the Lender; and

 

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

 

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

 

	
17. 

	
Set-Off:

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

	  

  

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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 Borrowers:

 

	  	  	
Concert International Inc. or Denis Benoit

152 Boul. De Lucerne

Suite 201

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 Borrowers 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, the CII Security Agreement, the Pledge Agreement, the Benoit Security Agreement, the Guarantee 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.

  

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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 Borrowers 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 Borrowers.

 

	
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 Borrowers and the Lender in connection with the subject matter hereof.

 

[Signature Page Follows]

 

 

 

  

8

  

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.

 

	 	
CONCERT INTERNATIONAL INC.

	 
	 	
 

	 	 
	 	By:	
 

	 
	 	Title:	 	 

 

 

	
DENIS BENOIT, individually

 

	 	 	 
	 	 	 	 
	 	 	Witness	 

 

  

9

  

Schedule A – Definitions

 

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

 

“Borrowing” means any availment of the Loan.

 

“Borrowing Request” means a request by the Borrowers 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.

 

“CII 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.

 

  

10

  

Schedule B – Prior Advances

 

 

	
Date

	
Amount

	
February 24, 2011

	
US$82,000

	
March 14, 2011

	
US$ 30,000

	
March 22, 2011

	
US$29,775

	
March 28, 2011

	
US$8,100

	
April 15, 2011

	
US$24,500

	
April 16, 2011

	
US$10,000

	  	  
	  	  
	  	  

 

  

11

  

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 “Borrowers”), 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 Borrowers 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 Borrowers 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:  [·]

	 	
Concert International Inc.

	 
	 	
 

	 	 
	 	By:	
 

	 
	 	Name:	 	 
	 	Title:	 	 
	 	 	 	 
	 	 	 
	 	Denis Benoit	 

 

12

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