Document:

exv10w6

 

Exhibit 10.6   

NORTEL NETWORKS LIMITED

DIRECTORS’ DEFERRED

SHARE COMPENSATION PLAN

AS AMENDED AND RESTATED

Amended on June 29, 2005 and Restated effective June 29, 2005

 

 

NORTEL NETWORKS LIMITED

DIRECTORS’ DEFERRED

SHARE COMPENSATION PLAN

AS AMENDED AND RESTATED

1. BACKGROUND; PURPOSE OF THE PLAN

The Nortel Networks Limited Directors’ Deferred Share Compensation Plan was amended and restated to
reflect the transactions contemplated by the plan of arrangement (the “Plan of Arrangement”)
described in the Amended and Restated Arrangement Agreement, made as of January 26, 2000, as
amended and restated March 13, 2000, among BCE Inc., Nortel Networks Corporation, New Nortel Inc.
and the other parties thereto. On May 1, 2000, the effective date of the Plan of Arrangement, New
Nortel Inc. acquired from the holders of the common shares (other than BCE Inc. and its affiliates)
of Nortel Networks Corporation all of the Nortel Networks Corporation common shares then held by
such shareholders in exchange for an equal number of common shares of New Nortel Inc. and each
shareholder of BCE Inc. received approximately 0.78 common shares of New Nortel Inc. for each
common share of BCE Inc. then held by such BCE shareholder. In addition, the common shares of New
Nortel Inc. were listed on the New York Stock Exchange and The Toronto Stock Exchange in
substitution for the common shares of Nortel Networks Corporation. Also, as part of the Plan of
Arrangement, Nortel Networks Corporation changed its name to Nortel Networks Limited (“Nortel
Limited”) and New Nortel Inc. changed its name to Nortel Networks Corporation (“Nortel
Corporation”).

In connection with, and effective as of May 1, 2000, Share Units granted or to be granted under the
Plan and the shares subject to the Plan were adjusted and common shares of Nortel Corporation were
substituted for common shares of Nortel Limited. In all other respects, the terms and provisions
of the Plan were reaffirmed, as therein provided.

On May 25, 2000, the Board suspended the operation of the Plan, effective April 27, 2000, with the
effect that, notwithstanding any other provision of the Plan, (i) no further Share Units would be
credited to Participants in respect of Annual Retainer Fees (as defined in the Plan as at that
date) or any other fees payable on or after April 27, 2000 in respect of services rendered by
Participants to Nortel Limited or Nortel Corporation, (ii) Share Units, as so adjusted, credited to
Participants’ accounts prior to April 27, 2000 would remain outstanding, (iii) Share Units, as so
adjusted, would continue to be credited under Section 7 of the Plan for the period prior to the
Settlement Date, and (iv) Share Units, as so adjusted, would be settled subject to and in
accordance with the Plan and the terms and conditions of the Share Units.

 

 

On June 9, 2000, the Board approved the amendment and restatement of the Plan, (i) effective as of
May 1, 2000, to provide that Share Units would be credited to Participants in respect of services
rendered by Participants to Nortel Limited only and that the Plan would be administered by the
Board or by a Committee of the Board, and (ii) to reflect the suspension of the operation of the
Plan, effective April 27, 2000, until otherwise specifically determined by the Board, with respect
to the payment of Annual Retainer Fees (as defined in the Plan as at that date) or other fees
payable to Participants after April 27, 2000.

On January 24, 2002, the Board approved a further amendment and restatement of the Plan, effective
as of January 1, 2002, (i) to provide for the crediting of Share Units to Participants in respect
of all services rendered by such Participants as members of the Board; (ii) to provide that each
member of the Board who qualifies as an Eligible Director shall receive all fees payable to such
member for services as a member of the Board in the form of Share Units credited in respect of such
member under the Plan; and (iii) to reflect the re-commencement of the operation of the Plan as
amended and restated herein.

On May 29, 2003, the Board approved an amendment to the Plan, effective immediately, to permit
Eligible Directors to elect to receive between 0 — 100% of all fees payable to such member for
services as a member of the Board in the form of Share Units, with the remainder of such fees to be
settled in cash.

On December 18, 2003, the Board approved an amendment to the Plan, effective immediately, with
respect to the manner in which Eligible Directors may elect to receive cash in lieu of Share Units
under the Plan. On June 29, 2005, the Board approved amendments to the Plan, effectively
immediately, with respect to the election by Eligible Directors to receive Fees in the form of
Share Units, with the remainder of such Fees payable in cash.

The purpose of the Plan is to assist Nortel Limited in attracting and retaining individuals with
experience and ability to serve as members of the Board and to promote a greater alignment of
interests between Eligible Directors and the shareholders of Nortel Corporation.

2. DEFINITIONS

For the purposes of the Plan, the terms contained in this Section shall have the following
meanings.

“Administrator” shall mean such administrator as may be appointed by Nortel Limited from time to
time to assist in the administration of the Plan in accordance with Section 3 hereof.

“affiliated companies” shall have the meaning ascribed to the term “affiliated bodies corporate” in
Section 2(2) of the CBCA or such other meaning, and shall include such other entities, as may be
determined by the Committee.

“Election Form and Agreement” shall mean the election form and agreement, as it may be amended from
time to time, entered into between Nortel Limited and an Eligible Director in accordance with
Section 6 hereof.

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“Aggregate Purchase Price” shall have the meaning assigned thereto in Section 8 hereof.

“Board” shall mean the Board of Directors of Nortel Limited.

“Broker” shall have the meaning assigned thereto in Section 10 hereof.

“Business Day” shall mean a day, other than a Saturday or Sunday, on which banking institutions in
Canada and the United States are not authorized or obligated by law to close.

“CBCA” shall mean the Canada Business Corporations Act, R.S.C. 1985, c.C-44, as amended from time
to time.

“Committee” shall mean such committee of the Board comprised of members of the Board as the Board
shall from time to time appoint to administer the Plan; provided, however, that if the Board does
not appoint a Committee to administer the Plan, all references to the Committee shall be deemed to
be references to the Board, mutatis mutandis.

“Common Share” shall mean a common share of Nortel Corporation, subject to Section 16.

“Eligible Director” shall mean each member of the Board who, at the relevant time, is not an
employee of a Nortel Networks Company and such member shall continue to be an Eligible Director for
so long as such member continues to be a member of the Board and is not an employee of a Nortel
Networks Company; provided, however, that the Committee, in its sole discretion, may determine from
time to time that one or more members of the Board who is or are employees of a Nortel Networks
Company shall be an Eligible Director or Eligible Directors or that one or more members of the
Board, who would otherwise be an Eligible Director or Eligible Directors, shall not be.

“Fees” shall mean the amount, expressed in U.S. dollars, of all fees payable by Nortel Limited to
an Eligible Director (i) for all services rendered as a member of the Board, and/or any committees
thereof, and (ii) for all services rendered as an executive or non-executive chairperson of the
Board, and/or any committees thereof; except that, Fees shall not include any other fee that may be
payable by Nortel Limited to the Eligible Director in connection with services rendered by such
Eligible Director to Nortel Limited in any capacity other than as a member or chairperson of the
Board, and/or any committees thereof.

“Market Value” of a Common Share shall mean the fair market value thereof, which shall be the price
per common share which is equal to the average of the high and low prices for a board lot of the
Common Shares traded in Canadian dollars on The Toronto Stock Exchange (“TSE”) on the relevant day
or, if the volume of Common Shares traded on the composite tape in the United States exceeds the
volume of Common Shares traded in Canadian dollars on the TSE on such relevant day, the average of
the high and low prices for a board lot of Common Shares on the New York Stock Exchange (“NYSE”).
The Market Value so determined may be in Canadian dollars or in U.S. dollars. As a result, the
Market Value of a Common Share covered by a Share Unit shall be either (a) such Market Value as
determined above, if in Canadian dollars, or (b) such Market Value as determined above converted
into Canadian dollars at the noon rate of exchange of the Bank of Canada on the relevant day, if in
U.S. dollars. If on the relevant day, there is not a board lot trade in the Common Shares on the
TSE or NYSE, any of such exchanges

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are not open for trading, or there is not a noon rate of exchange of the Bank of Canada, if
required, then the Market Value of a Common Share shall be determined as provided above on the
first day immediately preceding the relevant day for which there were such board lot trades in the
Common Shares and a noon rate of exchange. If at any time the Common Shares are no longer listed
or traded on the TSE or the NYSE, the Market Value shall be calculated in such manner as may be
determined by the Committee from time to time, but shall always be established in relation to the
fair market value of a Common Share. The Market Value of a Common Share shall be rounded up to the
nearest whole cent.

“Nortel Corporation” shall mean Nortel Networks Corporation (known prior to May 1, 2000 as New
Nortel Inc.) or its successors.

“Nortel Limited” shall mean Nortel Networks Limited (known prior to May 1, 2000 as Nortel Networks
Corporation) or its successors.

“Nortel Networks Companies” shall mean, collectively, Nortel Corporation, Nortel Limited and their
respective Subsidiaries and affiliated companies or, individually, any corporate entity included
within such group, as the context indicates, and Nortel Networks Company shall mean any one of such
corporate entities.

“Participant” shall mean an Eligible Director who participates in the Plan.

“Plan” shall mean the Nortel Networks Limited Directors’ Deferred Share Compensation Plan (as
amended and restated) set forth herein and as may be further amended or restated from time to time.

“Plan of Arrangement” shall have the meaning assigned to such term in Section 1 hereof.

“Price per Common Share” shall have the meaning assigned thereto in Section 8 hereof.

“Quarter” means any of the four quarters of any financial year of Nortel Limited as may be adopted
from time to time and, until the financial year of Nortel Limited is changed, shall mean the
quarters ending March 31, June 30, September 30 and December 31.

“Quarterly Fee” shall mean the Fees earned for services rendered by an Eligible Director in the
applicable Quarter.

“Reference Date” shall mean, with respect to any Quarter, the date used to determine the Market
Value of a Common Share for purposes of determining the number of Share Units to be credited in
respect of such Quarter to a Participant’s account and the Canadian dollar equivalent of the
Quarterly Fee in respect to such Quarter pursuant to Section 4 hereof; which date shall be, unless
otherwise determined by the Committee and approved by the Board,

	 	(i)	 	the last trading day of such Quarter on which the Market Value of a Common
Share may be determined and on which the Bank of Canada published a noon rate of
exchange for U.S. dollars, or

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	 	(ii)	 	the Resignation Date of such Participant, if the Settlement Date with respect
to a Participant occurs during the Quarter prior to the last trading day of such
Quarter; provided that, if such Resignation Date is not a trading day on which the
Market Value of a Common Share or, if required, a day on which the Bank of Canada noon
rate of exchange for U.S. dollars may be determined, the Reference Date shall be the
immediately preceding trading day on which such Market Value and, if required, the Bank
of Canada noon rate of exchange for U.S. dollars may be determined.

“Resignation Date” shall mean, in respect of a Participant, the earliest date on which both of the
following conditions are met:

	(a)	 	the Participant has ceased to be a member of the Board for any reason whatsoever, including
the death of the Participant; and
	 
	(b)	 	the Participant is neither an employee nor a member of the board of directors of any Nortel
Networks Company.

“Settlement Date” shall mean, unless otherwise determined by the Committee for the purpose of
Section 8, the date on which Common Shares shall be delivered in settlement of Share Units in
accordance with Section 8 hereof.

“Share Unit” shall mean a unit credited to a Participant’s account in accordance with the terms and
conditions of the Plan.

“Subsidiary” shall mean a body corporate that is a subsidiary of Nortel Limited or Nortel
Corporation within the meaning of Section 2(5) of the CBCA.

3. ADMINISTRATION OF THE PLAN

Except as herein otherwise specifically provided, the Plan shall be administered by the Committee
in accordance with its terms, the whole subject to applicable law. The Committee shall have full
and complete authority to interpret the Plan, to prescribe such rules and regulations and to make
such other determinations as it deems necessary or desirable for the administration of the Plan.
The Committee may from time to time, subject to the terms of the Plan, delegate to officers or
employees of a Nortel Networks Company or to third parties, including an Administrator if one is
appointed, the whole or any part of the administration of the Plan and shall determine the scope
and terms and conditions of such delegation, including the authority to prescribe rules and
regulations. Any interpretation, rule, regulation or determination made or other act of the
Committee shall be final and binding on the Participants and their beneficiaries and legal
representatives and Nortel Limited and its shareholders.

No member of the Committee or the Board shall be liable for any action or determination made in
good faith pursuant to the Plan. To the full extent permitted by law, Nortel Limited shall
indemnify and save harmless each person made, or threatened to be made, a party to any action or
proceeding by reason of the fact that such person is or was a member of the Committee or is or was
a member of the Board and, as such, is or was required or entitled to take action pursuant to the
terms of the Plan.

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Except as Participants may otherwise be advised by prior written notice of at least thirty (30)
days, all costs of the Plan, including any administration fees and reasonable brokerage fees
related to the purchase of Common Shares pursuant to Section 8, shall be paid by Nortel Limited.
For greater certainty, Nortel Limited shall not pay or be responsible for brokerage or other fees
incurred by Participants in respect of the disposition of any Common Shares.

4. PARTICIPATION

All Eligible Directors shall participate in the Plan. Each Eligible Director shall be paid one
hundred percent (100%) of his or her Fees in the form of cash, unless the Eligible Director elects
prior to the beginning of a calendar year to receive between 0-100% of his or her Fees for the next
calendar year (and each calendar year thereafter unless and until such Eligible Director changes
such election with respect to Fees payable for the calendar year commencing after such change in
election is made) in the form of Share Units, with the remainder of such Fees to be paid in cash.
Fees payable to an Eligible Director in the calendar quarter in which such Eligible Director is
first appointed or elected to the Board shall be paid one hundred percent (100%) in the form of
cash, unless such Eligible Director elects prior to becoming an Eligible Director to receive,
effective on the date he or she becomes an Eligible Director, between 0-100% of his or her Fees for
the remainder of such calendar year (and future calendar years) in the form of Share Units, with
the remainder of such Fees to be paid in cash. The Board may, in its sole discretion, permit an
Eligible Director who is not subject to income tax under the US Internal Revenue Code of 1986, as
amended, to elect at a time other than the times specified in this paragraph to receive between
0-100% of his of her Fees in the form of Share Units, with the remainder of such Fees to be paid in
cash.

The number of Share Units (including fractional Share Units rounded to four decimal places) to be
credited on a quarterly basis with effect on the last day of each Quarter to an Eligible Director’s
account under Section 9 hereof with respect to each Quarter shall be equal to the quotient
determined by dividing: (i) the entire amount, expressed in U.S. dollars, of the Eligible
Director’s Quarterly Fee for such Quarter which is to be paid in Share Units, converted into
Canadian dollars at the noon rate of exchange of the Bank of Canada on the Reference Date for such
Quarter; by (ii) the Market Value of a Common Share on the Reference Date for such Quarter,
expressed in Canadian dollars.

A Participant who becomes an employee of a Nortel Networks Company or who, as a result of a
determination by the Committee, shall no longer be eligible to continue to participate in the Plan,
shall not be entitled to receive Share Units under this Section 4 in respect of any of his or her
future Fees. Share Units already credited to any such Participant’s account shall remain governed
by the Plan and the Election Form and Agreement, and such Participant shall be entitled to continue
to receive Share Units under Section 7 until such Participant’s Settlement Date.

5. SHARES SUBJECT TO THE PLAN

Neither Nortel Limited nor Nortel Corporation shall be required to cause to be delivered Common
Shares or certificates evidencing Common Shares pursuant to the Plan unless and until such delivery
is in compliance with all applicable laws, regulations, rules, orders of

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governmental or regulatory authorities and the requirements of any stock exchange upon which shares
of Nortel Corporation are listed or traded. Neither Nortel Corporation nor Nortel Limited shall in
any event be obligated to the Participants to take any action to comply with any such laws,
regulations, rules, orders or requirements. Subject to the foregoing, Nortel Limited may from time
to time provide a Broker with funds on the Settlement Date as herein provided to purchase Common
Shares on behalf of Participants on the open market or by private transaction as required in order
to administer the Plan in accordance with its terms.

In the event Nortel Limited or Nortel Corporation determines that Common Shares or certificates
evidencing Common Shares shall not be delivered to a Participant or Participants in accordance with
the foregoing, the Participant shall be entitled to receive from Nortel Limited, in cash, an amount
equal to the Market Value of the Common Shares that would otherwise be delivered in settlement of
Share Units on the Settlement Date, less any amounts withheld by Nortel Limited in accordance with
Section 14 in respect of taxes payable or other source deductions in respect of such cash payment.

6. EXECUTION OF ELECTION FORM AND AGREEMENT

Each Eligible Director shall, in accordance with Section 4 and the Plan or at such other times as
Nortel Limited deems appropriate, enter into an Election Form and Agreement in writing with Nortel
Limited and, if applicable, the Administrator with respect to his or her participation in the Plan.
Such Election Form and Agreement shall set out certain rights and obligations of the parties
thereto pursuant to and in accordance with the Plan, and shall remain in full force and effect
until all such Share Units credited to the account of such Participant shall have been settled
and/or cancelled.

7. DIVIDENDS AND RELATED AMOUNTS

A Participant shall, from time to time during such Participant’s period of participation under the
Plan, including the period following the Resignation Date and until the Settlement Date referred to
in Section 8 hereof, be credited on each dividend payment date in respect of Common Shares with
additional Share Units, the number of which shall be equal to the quotient determined by dividing:
(i) the product determined by multiplying (a) one hundred percent (100%) of each dividend declared
and paid by Nortel Corporation on its Common Shares on a per share basis (excluding stock dividends
payable in Common Shares, but including dividends which may be paid in cash or in shares at the
option of the shareholder), which, if declared in U.S. dollars, shall be converted into Canadian
dollars at the noon rate of exchange of the Bank of Canada on the dividend payment date for such
dividend, or if on such dividend payment date a noon rate of exchange of the Bank of Canada is not
available, converted into Canadian dollars at the noon rate of exchange of the Bank of Canada on
the immediately preceding day on which such exchange rate may be determined, by (b) the number of
Share Units recorded in the Participant’s account on the record date for the payment of any such
dividend, by (ii) the Market Value of a Common Share on the dividend payment date for such
dividend, in each case, with fractions computed to four decimal places.

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8. SETTLEMENT OF SHARE UNITS

Except as may be otherwise determined by the Committee or except as set forth below in this Section
8, the settlement date (“Settlement Date”) for a Participant with respect to whom a Resignation
Date shall have occurred shall be the fourth trading day following the release of Nortel
Corporation’s quarterly or annual financial results immediately following the Resignation Date with
respect to such Participant, provided that, if such Resignation Date occurs on the same date as the
release of Nortel Corporation’s financial results, the Settlement Date shall, in such a case, be
the fifth trading day immediately following such release of Nortel Corporation’s financial results.
A Participant shall receive, in full satisfaction of the number of Share Units recorded in the
Participant’s account on the Settlement Date, a whole number of Common Shares equal to the whole
number of Share Units then recorded in the account of the Participant (or as may be adjusted
pursuant to Section 16 hereof), reduced to reflect the amount of any applicable withholding taxes
and other source deductions withheld by Nortel Limited in connection with the satisfaction of the
Participant’s Share Units in accordance with Section 14. Any entitlement to fractional Common
Shares shall be paid in cash by Nortel Limited based on the Price per Common Share (as defined
below) on the Settlement Date.

If the Settlement Date would otherwise fall between the record date for a dividend on the Common
Shares and the related dividend payment date, the Settlement Date shall be the day immediately
following the date of payment of such dividend for purposes of recording in the account of the
Participant the additional Share Units referred to in Section 7 hereof and making the calculation
of Share Units recorded in the Participant’s account pursuant to this Section 8. Notwithstanding
any other provision of the Plan, the Settlement Date shall not be later than the last day of the
first calendar year that begins after the Resignation Date.

In the event that Nortel Limited is unable, by a Participant’s Settlement Date, to compute the
final number of Share Units credited to such Participant’s account by reason of the fact that any
of the data required in order to compute the Market Value of a Common Share is not available to
Nortel Limited, then the Settlement Date shall be the next following trading day on which such data
is available to Nortel Limited.

On the Settlement Date, Nortel Limited shall notify the Broker as to the number of Common Shares to
be purchased by the Broker on behalf of the Participant on the TSE, the NYSE, or any other stock
exchange approved by the Committee. As soon as practicable thereafter, the Broker shall purchase
the number of Common Shares which Nortel Limited has requested the Broker to purchase on behalf of
the Participant and shall notify the Participant and Nortel Limited of:

	(a)	 	the aggregate purchase price (“Aggregate Purchase Price”) of the Common Shares;
	 
	(b)	 	the purchase price per Common Share or, if the Common Shares were purchased at different
prices, the average purchase price (computed on a weighted average basis) per Common Share
(“Price per Common Share”);
	 
	(c)	 	the amount of any reasonable brokerage commission related to such purchase of Common Shares;
and
	 
	(d)	 	the Settlement Date for such purchase of Common Shares.

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On such Settlement Date, upon payment of the Aggregate Purchase Price and related reasonable
brokerage commission by Nortel Limited, the Broker shall deliver to the Participant, or to his
designated representative, the certificate representing the Common Shares purchased on behalf of
such Participant or shall cause such Common Shares to be transferred electronically to an account
designated by such Participant.

If a Participant is a citizen or resident of a country other than Canada, Nortel Limited shall have
the right, in its sole discretion, to pay entirely in cash on the Settlement Date an amount equal
to the Market Value of the Common Shares as of the Settlement Date that would otherwise be
delivered in settlement of Share Units (less any applicable tax withholdings or required source
deductions), should it deem it desirable to do so in light of the regulatory or other requirements
of the applicable foreign jurisdiction associated with the purchase of, or payment in, Common
Shares.

9. PARTICIPANT’S ACCOUNT

Nortel Limited shall maintain or cause to be maintained in its records an account for each
Participant recording at all times the number of Share Units credited to the Participant. Upon
payment in satisfaction of Share Units pursuant to Section 8 herein, such Share Units shall be
cancelled. A written notification of the balance in the account maintained for each Participant
shall be mailed by Nortel Limited or by an Administrator on behalf of Nortel Limited to each
Participant at least annually. A Participant shall not be entitled to any certificate or other
document evidencing the Share Units.

10. PURCHASES ON THE OPEN MARKET

Purchases of Common Shares pursuant to the Plan shall be made on the open market by a broker
independent from Nortel Corporation and Nortel Limited designated by the Participant and who is a
member of the TSE, the NYSE, or any such other stock exchange as may be determined by the Committee
from time to time (the “Broker”). Any such designation of a Broker may be changed from time to
time. Upon designation of a Broker or at any time thereafter, Nortel Limited may elect to provide
the designated Broker with a letter agreement to be executed by the Broker, the Participant and
Nortel Limited, setting forth, inter alia:

	(a)	 	the Broker’s agreement with being so designated, to acting for the Participant’s account in
accordance with customary usage of the trade with a view to obtaining the best share price for
the Participant in respect of the Common Shares to be purchased for the Participant, and to
delivering to the Participant, or his or her representative, the share certificate for, or to
transferring electronically to an account designated by the Participant, the Common Shares
purchased upon receipt from Nortel Limited of payment of the Aggregate Purchase Price and
related reasonable brokerage commission; and
	 
	(b)	 	Nortel Limited’s agreement to notify the Broker of the number of Common Shares to be
purchased and to pay the Aggregate Purchase Price and the related reasonable brokerage
commission,

provided, however, that none of the terms of such letter agreement shall have the effect of making
the Broker or deeming the Broker to be an affiliate of, or not independent from, Nortel

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Corporation or Nortel Limited for purposes of any applicable corporate, securities or stock
exchange requirement.

The Share Units, and any related Common Shares that may be delivered under the Plan, have not been
registered under the U.S. Securities Act of 1933, as amended, as of the effective date of the Plan
and neither Nortel Corporation nor Nortel Limited has any obligation to register such Share Units
or Common Shares. Accordingly, the Common Shares delivered under the Plan may not be offered or
sold in the United States unless they become registered or an exemption from registration is
otherwise available.

11. RIGHTS OF PARTICIPANTS

Except as specifically herein provided or provided in the Election Form and Agreement, no Eligible
Director, Participant or other person shall have any claim or right to any Common Shares to be
delivered in settlement of Share Units credited pursuant to the Plan. Nothing herein shall provide
any Participant with an entitlement or right to be elected or appointed a director of Nortel
Limited.

Under no circumstances shall Share Units be considered Common Shares nor shall they entitle any
Participant to exercise voting rights or any other rights attaching to the ownership or control of
Common Shares, nor shall any Participant be considered the owner of any Common Shares to be
delivered under the Plan until after the date of purchase of such Common Shares for the account of
such Participant as specifically provided herein.

12. DEATH OF PARTICIPANT

In the event of a Participant’s death, any and all Share Units then credited to the Participant’s
account shall become payable to a dependant or relation of the Participant designated in writing by
the Participant and provided to Nortel Limited, failing which to the Participant’s legal
representative.

13. COMPLIANCE WITH APPLICABLE LAWS

Any obligation of Nortel Limited with respect to Common Shares pursuant to the terms of the Plan is
subject to compliance with all applicable laws, regulations, rules, orders of governmental or
regulatory authorities and the requirements of any stock exchange upon which shares of Nortel
Corporation are listed or traded. Should Nortel Limited, in its sole discretion, determine that it
is not desirable or feasible to provide for the settlement of Share Units in Common Shares pursuant
to Section 8 hereof, including by reason of any such laws, regulations, rules, orders or
requirements, such obligation shall be satisfied by means of a cash payment by Nortel Limited equal
to the Market Value of the Common Shares that would otherwise be delivered to a Participant in
settlement of Share Units on the Settlement Date (less any applicable tax withholdings or required
source deductions). Each Participant shall comply with all such laws, regulations, rules, orders
and requirements, and shall furnish Nortel Limited with any and all information and undertakings as
may be required to ensure compliance therewith.

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14. WITHHOLDING TAXES

Nortel Limited may withhold from any payment to or for the benefit of a Participant any amount
required to comply with the applicable provisions of any federal, provincial, state or local law
relating to the withholding of tax or the making of any other source deductions, including on the
amount, if any, included in income of a Participant and may adopt and apply such rules and
regulations that in its opinion will ensure that Nortel Limited will be able to so comply.

15. TRANSFERABILITY

The rights or interests of a Participant under the Plan, including the Share Units, shall not be
assignable or transferable, otherwise than in case of death as set out in the Plan, and such rights
or interests shall not be encumbered.

16. ALTERATION OF NUMBER OF SHARE UNITS SUBJECT TO THE PLAN

In the event that:

	(a)	 	a dividend shall be declared upon the Common Shares or other securities of Nortel Corporation
payable in Common Shares or other securities of Nortel Corporation (other than a dividend
which may be paid in cash or in Common Shares at the option of the shareholder);
	 
	(b)	 	the outstanding Common Shares shall be changed into or exchanged for a different number or
kind of shares or other securities of Nortel Corporation or of another corporation, whether
through an arrangement, plan of arrangement, amalgamation or other similar statutory
procedure, or a share recapitalization, subdivision or consolidation or otherwise;
	 
	(c)	 	there shall be any change, other than those specified in paragraphs (a) and (b) of this
Section 16, in the number or kind of outstanding Common Shares or of any shares or other
securities into which such Common Shares shall have been changed or for which they shall have
been exchanged; or
	 
	(d)	 	there shall be a distribution of assets or shares to shareholders of Nortel Corporation out
of the ordinary course of business,

then, if the Board shall in its sole discretion determine that such change equitably requires an
adjustment in the number of Share Units credited to Participants pursuant to the Plan but not yet
settled and cancelled, and/or a substitution, for each Common Share, of the kind of securities into
which each outstanding Common Share has been so changed or exchanged and/or any other adjustment,
then such adjustment and/or substitution shall be made by the Board and shall be effective and
binding for all purposes.

In the case of any such substitution, change or adjustment as provided for in this Section 16, the
variation shall generally require that the dollar value of the Share Units then recorded in the
Participant’s account prior to such substitution, change or adjustment will be proportionately and

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appropriately varied so that it shall be approximately equal to such dollar value after the
variation.

No adjustment provided for in this Section shall entitle a Participant to receive a fractional
Common Share or other security and the total adjustment with respect to each Share Unit shall be
limited accordingly.

In the event that, at the time contemplated for the purchase of Common Shares under the Plan, there
is no public market for the Common Shares or for securities substituted therefor as provided by
this Section 16, the obligations of Nortel Limited under the Plan shall be met by a payment in cash
on the Settlement Date in such amount as is reasonably determined by the Committee to be fair and
equitable in the circumstances, but shall always be established in relation to the fair market
value of a Common Share within the period that begins one year before the Resignation Date and ends
on the Settlement Date.

17. UNSECURED PLAN

Unless otherwise determined by the Committee, the obligations of Nortel Limited under the Plan
shall be general unsecured obligations of Nortel Limited.

18. EFFECTIVE DATE OF THE PLAN

The Plan was originally effective with respect to certain fees payable to Eligible Directors on or
after June 30, 1998. The Plan was amended and restated on April 27, 2000, effective as of May 1,
2000; was suspended on May 25, 2000, effective April 27, 2000; was amended and restated on June 9,
2000, effective May 1, 2000; was amended and restated and the suspension lifted on January 24,
2002, effective January 1, 2002; and was amended and restated on May 29, 2003. The Plan was
amended and restated on December 18, 2003, effective immediately. The Plan was amended on June 29,
2005 and restated effective June 29, 2005.

19. AMENDMENTS TO, SUSPENSION OR TERMINATION OF, THE PLAN

The Board may from time to time amend, suspend or terminate, in whole or in part, the Plan or amend
the terms of Share Units credited in accordance with the Plan. If any such amendment will
materially adversely affect the rights of a Participant with respect to Share Units credited to
such Participant or under any Election Form and Agreement, the written consent of such Participant
to such amendment shall be obtained. Notwithstanding the foregoing, the obtaining of the written
consent of any Participant to an amendment which materially adversely affects the rights of such
Participant with respect to any credited Share Unit or under any Election Form and Agreement shall
not be required if such amendment is required to comply with applicable laws, regulations, rules,
orders of governmental or regulatory authorities or the requirements of any stock exchange on which
shares of Nortel Corporation are listed or traded.

If the Board terminates the Plan, Share Units previously credited to Participants shall, at the
discretion of the Board, either (a) become immediately payable in accordance with the terms of

12

 

the Plan in effect at such time, or (b) remain outstanding and in effect and settled subject to and
in accordance with their applicable terms and conditions.

20. GOVERNING LAW

Consent to membership on the Board and the resulting participation in the Plan by any Participant
shall be construed as acceptance of the terms and conditions of the Plan by the Participant and as
to the Participant’s agreement to be bound thereby. The Plan shall be construed in accordance with
and governed by the laws of the Province of Ontario.

13Exhibit 10.151

    SECURED
      PROMISSORY NOTE

    

    
      	
              $4,500,000.00

            	
              August
                2, 2005

            

    

    

    FOR
      VALUE
      RECEIVED, the undersigned, CENTURY CASINOS, INC., a Delaware corporation
      ("Borrower"), promises to pay to the order of DAVID R. BELDING ("Lender")
      c/o Hacienda Hotel, U.S. Highway 93, Boulder City, Nevada 89005, or at such
      other place as the legal holder of this Secured Promissory Note (the "DRB Note")
      shall designate in writing, in coin or currency which at the time or times
      of
      payment shall be legal tender for the payment of public and private debts in
      the
      United States of America, the principal sum of Four Million Five Hundred
      Thousand Dollars ($4,500,000.00) together with interest thereon in the amount
      of
      Two Thousand Fifty-Four Dollars and Seventy-Nine Cents ($2,054.79) per day
      (the
      "Note Rate"), accruing from the date the Net Principal Amount, as defined below,
      is transferred by Lender in accordance with Section 1(b) below (the
      "Funding Date") and continuing until the entire principal amount has been paid
      in full. In the event of a partial principal reduction, the amount of interest
      accruing on a daily basis shall be proportionately reduced. 

    

    THE
      ENTIRE UNPAID PRINCIPAL BALANCE HEREUNDER PLUS ALL INTEREST WHICH IS THEN
      ACCRUED HEREUNDER AND REMAINS UNPAID SHALL BE PAID IN FULL ON OR BEFORE AUGUST
      2, 2007 (THE "MATURITY DATE"). 

    

    IN
      ADDITION TO THE FOREGOING, THIS DRB NOTE SHALL BE SUBJECT TO THE FOLLOWING
      TERMS
      AND CONDITIONS:

    

    1. Loan
      Fee, Funding and Prepayment Fee.

    

    (a) In
      consideration of Lender's funding of the loan transaction which is evidenced
      by
      this DRB Note (the "DRB Loan"), Borrower shall pay Lender a non-refundable
      loan
      fee on the Funding Date in the amount of One Hundred Eighty Thousand Dollars
      ($180,000.00) (the "Loan Fee"). The Loan Fee shall be deemed fully earned upon
      occurrence of the Funding Date.

    

    (b) The
      principal amount of the DRB Loan shall be disbursed on the Closing Date (as
      defined by Section 10 below) as follows:

    

    
      	 	 	
              (i)

            	
              Lender
                shall deduct the Loan Fee from the principal amount of the DRB Loan
                and
                the remaining balance of Four Million Three Hundred Twenty Thousand
                Dollars ($4,320,000.00) (the "Net Principal Amount") shall be delivered
                on
                the Funding Date to Borrower c/o the escrow created for the purpose
                of
                closing the DRB Loan, via wire transfer, pursuant to written wiring
                instructions which have been provided to Lender by Borrower;
                and

            

    

    

    
      	 	 	 	
              (ii)

            	
              The
                proceeds of the DRB Loan shall be used by Borrower to fund a subordinated
                term loan (the "Subordinated Loan") to be advanced by Borrower to
                CC
                Tollgate LLC, a Colorado limited liability company ("Tollgate") in
                order
                to finance a portion of the costs of the construction of a casino,
                hotel
                and parking structure (collectively, the "Construction Project")
                to-be-built by Tollgate. The Subordinated Loan shall be secured by
                a real
                estate lien and personal property security interest on, and in, all
                assets
                of Tollgate (collectively, the "Century Casinos Lien"). The Century
                Casinos Lien shall be a second priority lien, subject only to the
                lien(s)
                and security interest(s) securing a loan made by Colorado Business
                Bank to
                Tollgate in the original principal amount of Five Million Dollars
                ($5,000,000.00) (the "Colorado Bank Loan"). The documentation setting
                forth the terms and conditions of the Colorado Bank Loan shall be
                subject
                to review and approval by Lender. Borrower intends to refinance the
                Colorado Bank Loan and to finance the remaining portion of the costs
                of
                constructing and developing the Construction Project through a proposed
                senior secured construction and term loan facility in the principal
                amount
                of Thirty Two Million Five Hundred Thousand Dollars ($32,500,000.00)
                (the
                "C/T Facility") and a senior secured revolving credit facility (the
                "Revolving Facility" and together with the C/T Facility, collectively
                the
                "WFB Bank Facilities") to be funded by a syndication of banks and
                financial institutions as the lenders and Wells Fargo Bank, National
                Association as the administrative and collateral agent ("WFB
                Agent").

            

    

    

    
      	 	 	 	 	
              Concurrently
                with the closing of the WFB Bank Facilities, Borrower agrees and
                Lender by
                accepting this instrument and funding the DRB Loan shall be deemed
                to have
                agreed to each to execute and deliver to the WFB Agent any documents
                and
                instruments deemed reasonably necessary by the WFB Agent to confirm
                the
                subordination of the Subordinated Loan and Century Casinos Lien to
                the WFB
                Bank Facilities, including, without limitation, the prohibition of
                the
                right to receive any payments of principal or interest on the Subordinated
                Loan and the waiver of all enforcement rights under the Subordinated
                Loan
                and Century Casinos Lien until the WFB Bank Facilities have been
                full
                repaid and terminated.

            

    

    

    Borrower
      agrees that the DRB Loan shall be fully funded upon disbursement of the Net
      Principal Amount in accordance herewith.

    

    (c) During
      the period commencing on the Funding Date, and ending on the 182nd
      day
      following the Funding Date (the "Guaranteed Interest Period"), Borrower shall
      not be entitled to prepay any portion of the principal balance under this DRB
      Note unless such payment (a "Principal Prepayment") is accompanied by an
      additional payment (a "Guaranteed Interest Payment") in an amount which is
      equal
      to the difference between the actual interest accrued to the date of such
      Principal Prepayment and the interest that would accrue on such Principal
      Prepayment for 183 consecutive days. Any payment which Borrower is required
      to
      make during the Guaranteed Interest Period by reason of the occurrence of an
      Event of Default and an Acceleration under Section 5 of this DRB Note,
      shall constitute a Principal Prepayment which must be accompanied by a
      Guaranteed Interest Payment in an amount determined in accordance with this
      Subsection 1(c). Provided,
      however, that in the event (X) Lender is called forward by the Colorado Gaming
      Authorities for a showing of suitability or otherwise in connection with the
      DRB
      Loan: (a) Lender may elect to not go forward and upon such election
      by
      Lender, Borrower shall have the right to fully pay the DRB Loan without regard
      to the Guaranteed Interest Payment set forth above, or (b) if Lender
      consents to go forward but Borrower reasonably believes that the costs of going
      forward with such proceeding will exceed Ten Thousand Dollars ($10,000.00),
      or
      (Y) Borrower fails to complete the Documentary Conditions Precedent
      to
      Closing on or before 10:00 a.m. on August 12, 2005, to the consequence that
      the
      proceeds of the DRB Loan are returned to Lender, then in each of the case of
      (X)(a), (X)(b) or (Y) above, Borrower shall have the right to pay the DRB Loan
      in full without regard to the Guaranteed Interest Payment. In no event shall
      Lender be obligated to incur any costs or expenses in connection with any
      requirements of the Colorado Gaming Authorities regarding a showing of
      suitability or otherwise in connection with the DRB Loan or any of the security
      interests securing repayment of the DRB Loan . 

    

    (d) Borrower
      shall not have the right to reborrow any amounts so prepaid or
      repaid.

    

    2. Security.

    

          
      (a) The
      payment and performance of the DRB Loan shall be secured by pledge agreements,
      a
      security agreement, financing statements and related instruments more
      particularly described as items (1) through (13) on Schedule I affixed hereto
      and by this reference incorporated herein and made a part hereof (collectively,
      the "Security Documentation") to be executed by Borrower in favor of Lender
      for
      the purpose of creating and perfecting security interests in each of the
      following (collectively, the "Collateral"):

     

                    (i) A
      pledge
      and security interest (the "CCTI Stock Pledge") in all of Borrower's ownership
      interests in Century Casinos Tollgate, Inc., a Delaware corporation ("CCTI")
      consisting of 100% of the issued and outstanding common voting stock of CCTI,
      shall be granted by Borrower in favor of Lender (any requirements imposed by
      the
      Colorado gaming authorities as a condition of such pledge shall be acceptable
      to
      Lender, and Borrower shall be responsible for all costs incurred by Lender
      in
      complying with such requirements including, without limitation, travel expenses
      incurred by him or his representatives); and

     

     
(ii) A
      pledge
      and security interest (the "Tollgate Membership Pledge") in all of CCTI's equity
      and membership interests in Tollgate (the "Tollgate Membership Interest"),
      to be
      a minimum of a 65% ownership interest, shall be granted by CCTI in favor of
      Lender (any requirements imposed by the Colorado gaming authorities as a
      condition of such pledge shall be acceptable to Lender, and Borrower shall
      be
      responsible for all costs incurred by Lender in complying with such requirements
      including, without limitation, travel expenses incurred by him or his
      representatives); and

     

         
(iii) The
      promissory note and each other loan document evidencing the Subordinated Loan,
      together with all documents and instruments securing repayment of the
      Subordinated Loan (collectively, the "Subordinated Loan Documents") shall be
      collaterally assigned and pledged and a security interest perfected in favor
      of
      Lender (the "Subloan Security Interest"), including, without limitation,
      delivery of the original promissory note evidencing the Subordinated Loan.
      The
      Subordinated Loan Documents shall be subject to review and approval by
      Lender.

    

    3. Representations,
      Warranties and Covenants.
      To
      induce Lender to make the DRB Loan, Borrower makes the following
      representations, warranties and covenants which shall be deemed to be continuing
      representa-tions, warranties and covenants until payment in full of all amounts
      due and owing under this DRB Note:

    

    (a) Each
      of
      Borrower and CCTI is a corporation duly organized and validly existing under
      the
      laws of the State of Delaware and has all requisite power, authority and legal
      right to execute and deliver this DRB Note, the Security Documentation and
      any
      other document, agreement or certificate to which it is a party, or to which
      it
      is bound in connection with the DRB Loan. Borrower has taken all necessary
      action to authorize the execution, delivery and performance of this DRB Note,
      CCTI Stock Pledge, Subloan Security Interest and of each other document to
      which
      Borrower is a party or by which Borrower is bound in connection herewith. CCTI
      has taken all necessary action to authorize the execution, delivery and
      performance of the Tollgate Membership Pledge and of each other document to
      which CCTI is a party or by which CCTI is bound in connection
      herewith.

    

    (b) CC
      Tollgate LLC, is a limited liability company duly organized and validly existing
      under the laws of the State of Delaware. CCTI holds a 65% ownership/membership
      interest in Tollgate and is the sole manager of Tollgate and
      is
      entitled to execute and deliver all documents and instruments on behalf of
      Tollgate which may be required as a condition of the Subordinated Loan, and
      to
      perform and to take all other actions on behalf of Tollgate which may be
      necessary or advisable in connection with the Subordinated Loan, all without
      the
      consent of any other party (other than such consents which have been obtained
      as
      of the date hereof).

    

    (c) A
      true
      and correct copy of the Certificate of Formation of Tollgate and of the Limited
      Liability Company Agreement of CC Tollgate LLC dated as of October 12, 2004,
      as
      amended by First Amendment to Limited Liability Company Agreement dated March
      21, 2005 (collectively, the "Tollgate Operating Agreement") have been delivered
      to Lender. The Certificate of Formation and Tollgate Operating Agreement set
      forth the entire understanding between the members of Tollgate with respect
      to
      the ownership, management and other matters set forth therein and have not
      been
      modified, supplemented or amended in any way other than as specifically
      described above.

    

    (d) CCTI
      is a
      wholly owned subsidiary of Borrower. Borrower shall not and shall not permit
      CCTI to (i) modify or amend the Tollgate Operating Agreement without the prior
      written consent of Lender, or (ii) make any "Transfer", as defined in the
      Tollgate Operating Agreement, other than the pledge of the Tollgate Membership
      Interest in favor of Lender.

    

    (e) Neither
      this DRB Note, the Tollgate Membership Pledge, the CCTI Stock Pledge, the
      Subloan Security Interest nor any other document to which either Borrower or
      CCTI is a party (or by which Borrower or CCTI is bound) in connection herewith
      (collectively, the "Loan Documents") is prevented by, limited by, conflicts
      in
      any material respect with, or will result in a material breach of, violation
      of,
      or a material default (with due notice or lapse of time, or both) under, or
      the
      creation or imposition of any lien, charge or encumbrance of any nature
      whatsoever upon any of Borrower's or CCTI's, as the case may be, property or
      assets by virtue of the terms, conditions or provisions of: (i) any indenture,
      evidence of indebtedness, loan or financing agreement, or other agreement or
      instrument of whatever nature to which Borrower or CCTI is a party or by which
      Borrower or CCTI is bound that has not consented to the transactions
      contemplated by this DRB Note, or (ii) any provision of any existing
      law,
      rule, regulation, order, writ, injunction or decree of any court or governmental
      authority to which Borrower or CCTI is subject.

    

    (f) This
      DRB
      Note, the Tollgate Membership Pledge, the CCTI Stock Pledge, the Subloan
      Security Interest and the other Loan Documents will constitute legal, valid
      and
      binding obligations of Borrower and CCTI, as applicable, enforceable against
      Borrower and CCTI as applicable in accordance with their respective terms.
      Borrower and CCTI are the owners of the Collateral, without exception or
      condition of title, other than the conditions imposed by the Loan Documents.
      

    

    (g) All
      timely consents, approvals, orders or authorizations of, or registrations,
      declarations, notices or filings with any governmental authority (or judicial
      proceeding), which may be required in connection with the valid execution and
      delivery of this DRB Note, the Tollgate Membership Pledge, the CCTI Stock
      Pledge, the Subloan Security Interest and the other Loan Documents, and the
      performance of any of the obligations hereunder, or there-under, have been
      obtained or accomplished, or will be obtained or accomplished as and when due,
      or are in full force and effect.

    

    (h) None
      of
      Borrower, Tollgate or CCTI is in violation of or in default with respect to
      any
      applicable laws and/or regulations which materially and adversely affect its
      respective business, financial condition or properties. None of Borrower,
      Tollgate or CCTI are in violation or default in any material and adverse respect
      under any inden-ture, evidence of Indebtedness, loan or financing agreement
      or
      other agreement or instrument of whatever nature to which they, or any of them,
      is a party or by which they, or any of them, is bound, a default under which
      might have consequences that would materially adversely affect its business,
      financial condition, properties or operations.

    

     (i) Borrower
      shall reimburse Lender for all attorneys' fees of Henderson & Morgan,
      LLC, recording fees, escrow costs and similar costs incurred in connection
      with
      the preparation of Loan Documents. 

    

    4. Events
      of Default.
      The
      occurrence of any of the following events and the passage of any applicable
      notice and cure periods shall consti-tute an "Event of Default"
      here-under:

    

    (a) Any
      representation or warranty made by Borrower or CCTI in Section 3 of
      this
      DRB Note, or in the Tollgate Membership Pledge, or the CCTI Stock Pledge or
      in
      the Subloan Security Interest or in any of the other Loan Documents, or
      otherwise in connection with this DRB Loan shall prove to be false, incorrect
      in
      any material respect as of the date when made, or shall hereafter become false
      or incorrect in any material respect;

    

    (b) Borrower
      shall have failed to pay the accrued interest and/or principal on or before
      the
      tenth (10th)
      day
      following the date upon which such payment is due;

    

    (c) Borrower
      shall fail duly and punctually to perform or comply with any term, covenant,
      condition or promise contained in this DRB Note or any other Loan Document
      and
      such failure shall continue ten (10) days after written notice thereof is
      delivered to Borrower by Lender or his attorneys of such failure;

    

    (d) Borrower
      or CCTI shall commence a voluntary case or other proceeding seeking liquidation,
      re-organization or other relief with respect to its debts under the Bankruptcy
      Code or any bankruptcy, insolvency or other similar law now or hereafter in
      effect or seeking the appointment of a trustee, receiver, liquidator, custodian
      or other similar official, for any substantial part of its property, or shall
      consent to any such relief or to the appointment or taking possession by any
      such official in any involuntary case or other pro-ceeding commenced against
      it;

    

    (e) An
      involuntary case or other proceeding shall be commenced against Borrower or
      CCTI
      seeking liquidation, reorganiza-tion or other relief with respect to its debts
      under the Bankruptcy Code or any bankruptcy, insolvency or other similar law
      now
      or hereafter in effect or seeking the appointment of a trustee, receiver,
      liquidator, custodian or other similar official, for any substantial part of
      its
      property;

    

    (f) Borrower
      or CCTI shall make an assignment for the benefit of its creditors or admit
      in
      writing its inability to pay its debts generally as they become
      due;

    

    (g) Any
      of
      the Security Documentation or any provision thereof: (i) shall cease
      to be
      in full force and effect in any material respect, or (ii) shall cease to give
      the Lender in any material respect the liens, rights, powers and privileges
      purported to be created thereby, or (iii) the Borrower shall default
      in the
      due performance or observance of any term, covenant or agreement on its part
      to
      be performed or observed pursuant to the Security Documentation for a period
      of
      ten (10) days after written notice thereof is delivered to Borrower by Lender
      or
      his attorneys of such failure (or such shorter period following such notice
      as
      may be specifically required in any Loan Document); or Borrower shall repudiate,
      revoke or terminate any of the Loan Documents prior to the full payment of
      the
      DRB Loan;

    

    (h) Tollgate
      shall have defaulted beyond any applicable grace period under the Colorado
      Bank
      Loan or the WFB Bank Facilities;

    

    (i) Borrower
      shall fail to satisfy any obligation which it may have to make payments to
      Lender under any Loan Document (a "Monetary Obligation"), other than the payment
      of principal, interest or late charges and shall fail to satisfy such
      obligations within ten (10) days after written notice of such failure from
      Lender;

    

    (j) Borrower
      shall fail to satisfy any material obligation (other than a Monetary Obligation)
      which it may have under any of the Loan Documents and shall fail to satisfy
      such
      obligations within thirty (30) days after written notice of such failure from
      Lender; 

    

    (k) Borrower
      shall fail to pay when due in accordance with its terms and provisions any
      material indebt-edness (indebtedness in excess of One Hundred Thousand Dollars
      ($100,000.00) being deemed material) of Borrower which failure continues for
      thirty (30) days beyond the period of grace, if any, therefor, unless such
      failure is cured or waived or contested in good faith and as to which adequate
      reserves (determined in accordance with GAAP) have been provided;

    

    (l) Borrower
      shall hold less than 100% of the issued and outstanding common voting stock
      of
      CCTI; or

    

    (m) CCTI
      shall have less than a 65% Membership Interest in Tollgate or CCTI shall make
      any "Transfer" as defined in the Tollgate Operating Agreement, other than in
      favor of Lender, without the prior written consent of Lender.

    

    5. Acceleration
      and Default Rate.
      Borrower promises and agrees that if any Event of Default (as defined above)
      shall occur, and so long as said Event of Default is continuing: (i) the whole
      sum of principal and interest on this DRB Note which shall then remain unpaid
      shall, at the option of the Lender, become immediately due and payable although
      the time of maturity as expressed herein shall not have arrived (an
      "Acceleration") (except that, with respect to Events of Default under
      Subsec-tions 4(d), 4(e) or 4(f) of this DRB Note, said Acceleration
      shall
      be automatic); and (ii) the total of the unpaid balance of principal
      and
      the then accrued unpaid interest and any unpaid late charges shall, at the
      option of Lender, collectively commence accruing interest at a rate equal to
      the
      Note Rate plus five percent (5%) per annum on the unpaid principal balance
      to be
      added to such Note Rate until such time as such Event(s) of Default have been
      cured, at which time the interest rate shall revert to the Note
      Rate.

    

    6. Costs
      and Attorneys' Fees.
      In the
      event of the occurrence of an Event of Default, the undersigned agrees to pay
      all costs of collection, including a reasonable attorney's fee, in addition
      to
      and at the time of the payment of such sum of money and/or the performance
      of
      such acts as may be required to cure such default. In the event legal action
      is
      commenced for the collection of any sums owing hereunder the undersigned agrees
      that any judgment issued as a consequence of such action against Borrower shall
      bear interest at a rate equal to the Note Rate plus five percent (5%) per annum
      on the unpaid principal balance to be added to such Note Rate until fully
      paid.

    

    7. Late
      Charges.
      If any
      payment due hereunder (including, without limitation, the payment due on the
      Maturity Date) is not paid within ten (10) days from the day it becomes due,
      the
      undersigned promises to pay a late charge or collection charge in the amount
      of
      five percent (5%) of the amount of the payment not so paid.

    

    8. Application
      of Payments.
      All
      payments which are made, and proceeds which are received, hereunder shall be
      applied as follows:

    

    (a) First,
      towards complete satisfaction of any costs and attorneys' fees which may be
      payable pursuant to Section 6 of this DRB Note;

    

    (b) Second,
      towards complete satisfaction of any late charges which may be payable pursuant
      to Section 7 of this DRB Note;

    

    (c) Third,
      towards complete satisfaction of any other amounts due hereunder, or under
      any
      other Loan Document (other than principal and interest hereunder);

    

    (d) Fourth,
      towards complete satisfaction of any accrued interest which may be unpaid under
      this DRB Note; and

    

    (e) Thereafter,
      towards satisfaction of the unpaid principal amount under this DRB
      Note.

    

    9. Waivers.
      

    

    (a) Borrower
      waives presentment, demand, protest and notice of non-payment.

    

    (b) For
      the
      purpose of complying with NRS 99.050, Borrower hereby declares its understanding
      that the terms and conditions of this DRB Note will, under certain
      circumstances, result in a compounding of interest which compounding is agreed
      to by Borrower as part of the terms of this DRB Note.

    

    10. Closing
      Date.
      All
      references herein to the "Closing Date" shall be to the business day following
      the date upon which Borrower has delivered or caused to be delivered to Lender,
      c/o Henderson & Morgan, LLC at the address set forth in Paragraph 11(c)
      hereinbelow on or before 2:00 p.m., Reno, Nevada, time, each of the items
      described on Schedule I, affixed hereto and by this reference incorporated
      herein and made a part hereof, setting forth the Documentary Conditions
      Precedent to Closing. 

    

    11. Miscellaneous.

    

    (a) Nothing
      herein contained shall impose upon Lender any obligation to enforce any terms,
      covenants or conditions contained herein. Failure of Lender in any one or more
      instances, to insist upon strict performance by Borrower of any terms, covenants
      or conditions of this DRB Note shall not be considered or taken as a waiver
      or
      relinquishment by Lender of his right to insist upon and to enforce in the
      future, by injunction or other appropriate legal or equitable remedy, strict
      compliance by Borrower with all the terms, covenants and conditions of this
      DRB
      Note. The consent of Lender to any act or omission by Borrower shall not be
      construed to be a consent to any other or subsequent act or omission or to
      waive
      the requirement for Lender's consent to be obtained in any future or other
      instance.

    

    (b) All
      of
      the terms, covenants, warranties and conditions contained in this DRB Note
      shall
      be binding upon and inure to the parties hereto and their successors and
      assigns. Provided, however, that (i) Borrower may not assign its rights
      hereunder or any interest herein without the prior written consent of Lender,
      and (ii) Lender may not assign his rights hereunder or any interest
      herein
      except to an Eligible Assignee. "Eligible Assignee" as used herein shall mean
      (i) any entity owned by Lender or in which Lender holds a controlling
      interest, (ii) any intervivos trust or other estate planning trust created
      for the benefit of Lender's children or other heirs, (iii) any commercial bank
      or recognized financial institution that is organized under the Laws of the
      United States of America, any State thereof or the District of Columbia, or
      (iv)
      any individual or business entity organized under the laws of the United States
      of America, any State thereof or the District of Columbia, in any case of which
      no finding of unsuitability has been made or determined by any Colorado Gaming
      Authority or the gaming authorities of any other States of the United States
      of
      America.

    

    (c) All
      notices, requests, reports, information or demand which any party hereto may
      desire or may be required to give to any other party hereunder, shall be in
      writing and shall be sent by facsimile or first-class certified or registered
      United States mail, postage prepaid, return receipt requested, and sent to
      the
      party at its address appearing below or such other address as any party shall
      hereafter inform the other party hereto by written notice given as
      aforesaid:

    

    If
      to
      Borrower:                     
      Century Casinos, Inc.

    1263
      Lake Plaza Drive

    Colorado
      Springs, CO 80906

    Attention:
      Larry Hannappel, Senior Vice President

    Facsimile:
      (810) 816-1642 

    

    With
      a copy
      to:                   
      Douglas R. Wright 

    Faegre
      & Benson LLP

    1700
      Lincoln Street, Ste. 3200 

    Denver,
      CO 80203

    Facsimile
      No. (303) 607-3600

    

    If
      to
      Lender:                         
      David R. Belding

                            c/o
      Hacienda Hotel

    U.S.
      Highway 93

    Boulder
      City, NV 89005

    Facsimile
      No. (702) 293-7392

    

    With
      a copy
      to:                   
      Bruce Hampton

    Hacienda
      Hotel

    U.S.
      Highway 93

    Boulder
      City, NV 89005

    Facsimile
      No. (702) 293-7392

    

    and    Timothy
      J. Henderson

    Henderson
      & Morgan, LLC

    4600
      Kietzke Lane, Suite K228

    Reno,
      NV
      89502

    Facsimile
      No. (775) 825-7738

     

    All
      notices, payments, requests, reports, information or demands so given shall
      be
      deemed effective on the first business day after transmission by industry
      standard facsimile machine, provided actual receipt of the transmission is
      confirmed by telephone, or, if mailed, upon receipt or the expiration of the
      fifth (5th) day following the date of mailing, whichever occurs first, except
      that any notice of change of address shall be effective only upon receipt by
      the
      party to whom said notice is addressed.

    

    (d) None
      of
      the rights, powers and remedies conferred upon or reserved to Lender in this
      DRB
      Note are intended to be exclusive of any other available right, power or remedy,
      but each and every such right, power and remedy shall be cumulative and not
      alternative, and shall be in addition to every right, power and remedy herein
      specifically given or now or hereafter existing at law, in equity or by statute.
      Any forbearance, delay or omission by Lender in the exercise of any right,
      power
      or remedy shall not impair any such right, power or remedy or be considered
      or
      taken as a waiver or relinquishment of the right to insist upon and to enforce
      in the future, by injunction or other appropriate legal or equitable remedy,
      any
      of said rights, powers and remedies given to Lender herein. The exercise of
      any
      right or partial exercise thereof by Lender shall not preclude the further
      exercise thereof and the same shall continue in full force and effect until
      specifically waived by an instrument in writing executed by Lender, as the
      case
      may be.

    

    (e) All
      agree-ments, representations and warranties made herein shall survive the
      execution and delivery of the DRB Note.

    

    (f) Time
      shall be of the essence of this DRB Note.

    

    (g) This
      DRB
      Note is in all respects to be governed by the laws of the State of Nevada and
      if
      any action is taken to enforce the terms of this DRB Note such action shall
      be
      commenced and maintained within the State of Nevada, save and except for the
      enforcement of the Security Documentation to the extent such enforcement may,
      at
      the election of Lender be commenced and maintained in the State of
      Colorado.

    

    (h) In
      no
      event shall Lender be deemed or construed to be joint venturer or partner of
      Borrower.

    

    (i) In
      the
      event any one or more of the provisions contained in this DRB Note shall be
      invalid, illegal or unenforceable in any respect, the validity, legality and
      enforceability of the remaining provisions contained herein shall not in any
      way
      be affected or impaired thereby.

    

    (j) If
      any
      action or proceeding is brought by any party against any other party under
      this
      DRB Note, the prevailing party shall be entitled to recover such costs and
      attorney's fees as the court in such action or proceeding may adjudge
      reasonable.

    

    IN
      WITNESS WHEREOF, this Secured Promissory Note has been executed as of the date
      first hereinabove written.

    

    
      	 	
              BORROWER:

               

              CENTURY
                CASINOS, INC.,

              a
                Delaware corporation

              By:
                /s/ Larry Hannappel 

               

              _______________  

              Larry
                Hannappel, 

              Senior
                Vice President

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