0000912057-01-533001.txt : 20011009
0000912057-01-533001.hdr.sgml : 20011009
ACCESSION NUMBER: 0000912057-01-533001
CONFORMED SUBMISSION TYPE: F-4
PUBLIC DOCUMENT COUNT: 17
FILED AS OF DATE: 20010921
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN COVE LTD
CENTRAL INDEX KEY: 0001037521
STANDARD INDUSTRIAL CLASSIFICATION: []
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-28
FILM NUMBER: 1741995
BUSINESS ADDRESS:
STREET 1: 1415 EAST SUNRISE BLVD 10TH FLOOR
CITY: FORT LAUDERDALE
STATE: FL
ZIP: 33304
BUSINESS PHONE: 2423632516
MAIL ADDRESS:
STREET 2: 1415 EAST SUNRISE BLVD 10TH FL
CITY: FORT LAUDERDALE
STATE: FL
ZIP: 33304
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN INTERNATIONAL MANAGEMENT LTD
CENTRAL INDEX KEY: 0001037519
STANDARD INDUSTRIAL CLASSIFICATION: []
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-29
FILM NUMBER: 1741996
BUSINESS ADDRESS:
STREET 1: 1415 EAST SUNRISE BLVD 10TH FLOOR
CITY: FORT LAUDERDALE
STATE: FL
ZIP: 33304
BUSINESS PHONE: 2423632516
MAIL ADDRESS:
STREET 2: 1415 EAST SUNRISE BLVD 10TH FL
CITY: FORT LAUDERDALE
STATE: FL
ZIP: 33304
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: PARADISE BEACH INN LTD
CENTRAL INDEX KEY: 0001037518
STANDARD INDUSTRIAL CLASSIFICATION: []
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-30
FILM NUMBER: 1741997
BUSINESS ADDRESS:
STREET 1: 1415 EAST SUNRISE BLVD 10TH FLOOR
CITY: FORT LAUDERDALE
STATE: FL
ZIP: 33304
BUSINESS PHONE: 2423632516
MAIL ADDRESS:
STREET 2: 1415 EAST SUNRISE BLVD 10TH FL
CITY: FORT LAUDERDALE
STATE: FL
ZIP: 33304
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: ISLAND HOTEL CO LTD
CENTRAL INDEX KEY: 0001037517
STANDARD INDUSTRIAL CLASSIFICATION: []
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-31
FILM NUMBER: 1741998
BUSINESS ADDRESS:
STREET 1: 1415 EAST SUNRISE BLVD 10TH FLOOR
CITY: FORT LAUDERDALE
STATE: FL
ZIP: 33304
BUSINESS PHONE: 2423632516
MAIL ADDRESS:
STREET 2: 1415 EAST SUNRISE BLVD 10TH FL
CITY: FORT LAUDERDALE
STATE: FL
ZIP: 33304
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: PARADISE ENTERPRISES LTD
CENTRAL INDEX KEY: 0001037516
STANDARD INDUSTRIAL CLASSIFICATION: []
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-32
FILM NUMBER: 1741999
BUSINESS ADDRESS:
STREET 1: 1415 EAST SUNRISE BLVD 10TH FLOOR
CITY: FORT LAUDERDALE
STATE: FL
ZIP: 33304
BUSINESS PHONE: 2423632516
MAIL ADDRESS:
STREET 2: 1415 EAST SUNRISE BLVD 10TH FL
CITY: FORT LAUDERDALE
STATE: FL
ZIP: 33304
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: PARADISE ISLAND LTD
CENTRAL INDEX KEY: 0001037515
STANDARD INDUSTRIAL CLASSIFICATION: []
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-33
FILM NUMBER: 1742000
BUSINESS ADDRESS:
STREET 1: 1415 EAST SUNRISE BLVD 10TH FLOOR
CITY: FORT LAUDERDALE
STATE: FL
ZIP: 33304
BUSINESS PHONE: 2423632516
MAIL ADDRESS:
STREET 2: 1415 EAST SUNRISE BLVD 10TH FL
CITY: FORT LAUDERDALE
STATE: FL
ZIP: 33304
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: PARADISE ACQUISITIONS LTD
CENTRAL INDEX KEY: 0001037514
STANDARD INDUSTRIAL CLASSIFICATION: []
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-34
FILM NUMBER: 1742001
BUSINESS ADDRESS:
STREET 1: 1415 EAST SUNRISE BLVD 10TH FLOOR
CITY: FORT LAUDERDALE
STATE: FL
ZIP: 33304
BUSINESS PHONE: 2423632516
MAIL ADDRESS:
STREET 2: 1415 EAST SUNRISE BLVD 10TH FL
CITY: FORT LAUDERDALE
STATE: FL
ZIP: 33304
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN INTERNATIONAL BAHAMAS LTD
CENTRAL INDEX KEY: 0001037520
STANDARD INDUSTRIAL CLASSIFICATION: []
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-35
FILM NUMBER: 1742002
BUSINESS ADDRESS:
STREET 1: 1415 EAST SUNRISE BLVD 10TH FLOOR
CITY: FORT LAUDERDALE
STATE: FL
ZIP: 33304
BUSINESS PHONE: 2423632516
MAIL ADDRESS:
STREET 2: 1415 EAST SUNRISE BLVD 10TH FL
CITY: FORT LAUDERDALE
STATE: FL
ZIP: 33304
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: PARADISE SECURITY SERVICES LTD
CENTRAL INDEX KEY: 0001159235
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 000000000
STATE OF INCORPORATION: C5
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-01
FILM NUMBER: 1741967
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN INTERNATIONAL HOTELS LTD
CENTRAL INDEX KEY: 0000914444
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990]
IRS NUMBER: 980136554
STATE OF INCORPORATION: C5
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780
FILM NUMBER: 1741968
BUSINESS ADDRESS:
STREET 1: 1415 EAST SUNRISE BLVD
STREET 2: 10TH FLOOR
CITY: FORT LAUDERDALE
STATE: FL
ZIP: 33304
BUSINESS PHONE: 9547132500
MAIL ADDRESS:
STREET 1: 1414 EAST SUNRISE BLVD
STREET 2: CORAL TOWERS
CITY: FORT LAUDERDALE
STATE: FL
ZIP: 33304
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN INTERNATIONAL NETWORK SERVICES LTD
CENTRAL INDEX KEY: 0001159265
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 000000000
STATE OF INCORPORATION: X0
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-02
FILM NUMBER: 1741969
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN INTERNATIONAL MARKETING UK LTD
CENTRAL INDEX KEY: 0001159264
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 000000000
STATE OF INCORPORATION: X0
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-03
FILM NUMBER: 1741970
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: PURPOSEFUL BV
CENTRAL INDEX KEY: 0001159263
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 000000000
STATE OF INCORPORATION: P8
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-04
FILM NUMBER: 1741971
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN HOTELS INTERNATIONAL MANAGEMENT NV
CENTRAL INDEX KEY: 0001159262
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 000000000
STATE OF INCORPORATION: P8
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-05
FILM NUMBER: 1741972
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: BIRBO NV
CENTRAL INDEX KEY: 0001159260
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 000000000
STATE OF INCORPORATION: P8
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-06
FILM NUMBER: 1741973
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN VACANCES SA
CENTRAL INDEX KEY: 0001159258
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 000000000
STATE OF INCORPORATION: I0
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-07
FILM NUMBER: 1741974
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: ABERDEEN MANAGEMENT LTD
CENTRAL INDEX KEY: 0001159256
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 000000000
STATE OF INCORPORATION: D8
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-08
FILM NUMBER: 1741975
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN INTERNATIONAL FINANCE LTD
CENTRAL INDEX KEY: 0001159254
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 000000000
STATE OF INCORPORATION: D8
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-09
FILM NUMBER: 1741976
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN HOTELS INTERNATIONAL BERMUDA LTD
CENTRAL INDEX KEY: 0001159251
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 000000000
STATE OF INCORPORATION: D0
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-10
FILM NUMBER: 1741977
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN INTERNATIONAL DEVELOPMENT TIMESHARE LTD
CENTRAL INDEX KEY: 0001159249
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 000000000
STATE OF INCORPORATION: C5
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-11
FILM NUMBER: 1741978
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUNONLINE IOM LTD
CENTRAL INDEX KEY: 0001159246
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 000000000
STATE OF INCORPORATION: C5
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-12
FILM NUMBER: 1741979
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN INTERNATIONAL NETWORK DATA LTD
CENTRAL INDEX KEY: 0001159242
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 000000000
STATE OF INCORPORATION: C5
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-13
FILM NUMBER: 1741980
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: BAHAMAS E-TRADING LTD
CENTRAL INDEX KEY: 0001159241
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 000000000
STATE OF INCORPORATION: C5
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-14
FILM NUMBER: 1741981
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUNONLINE LTD
CENTRAL INDEX KEY: 0001159238
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 000000000
STATE OF INCORPORATION: C5
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-15
FILM NUMBER: 1741982
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN INTERNATIONAL DEVELOPEMENT LTD
CENTRAL INDEX KEY: 0001159234
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 000000000
STATE OF INCORPORATION: C5
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-16
FILM NUMBER: 1741983
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: PARADISE ISLAND FUTURE LTD
CENTRAL INDEX KEY: 0001159230
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 000000000
STATE OF INCORPORATION: C5
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-17
FILM NUMBER: 1741984
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN INTERNATIONAL TIMESHARE LTD
CENTRAL INDEX KEY: 0001159228
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 650746089
STATE OF INCORPORATION: NJ
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-18
FILM NUMBER: 1741985
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN INTERNATIONAL DEVELOPEMENT GROUP INC
CENTRAL INDEX KEY: 0001159225
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 650746089
STATE OF INCORPORATION: NJ
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-19
FILM NUMBER: 1741986
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN INTERNATIONAL NEW YORK INC
CENTRAL INDEX KEY: 0001159224
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 134027976
STATE OF INCORPORATION: NY
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-20
FILM NUMBER: 1741987
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN COVE NEW YORK INC
CENTRAL INDEX KEY: 0001159222
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 651069728
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-21
FILM NUMBER: 1741988
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN COVE CALIFORNIA INC
CENTRAL INDEX KEY: 0001159219
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 650932228
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-22
FILM NUMBER: 1741989
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN INTERNATIONAL MARKETING INC
CENTRAL INDEX KEY: 0001159218
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 650880994
STATE OF INCORPORATION: FL
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-23
FILM NUMBER: 1741990
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: ISS INC /FL
CENTRAL INDEX KEY: 0001159216
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 650483536
STATE OF INCORPORATION: FL
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-24
FILM NUMBER: 1741991
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: PIV INC
CENTRAL INDEX KEY: 0001159214
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 650483531
STATE OF INCORPORATION: FL
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-25
FILM NUMBER: 1741992
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN INTERNATIONAL RESORTS INC
CENTRAL INDEX KEY: 0001159212
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 650483525
STATE OF INCORPORATION: FL
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-26
FILM NUMBER: 1741993
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN INTERNATIONAL NEVADA INC
CENTRAL INDEX KEY: 0001159211
STANDARD INDUSTRIAL CLASSIFICATION: []
IRS NUMBER: 650922984
STATE OF INCORPORATION: NV
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-27
FILM NUMBER: 1741994
BUSINESS ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
BUSINESS PHONE: (242) 363-6000
MAIL ADDRESS:
STREET 1: C/O SUN INTERNATIONAL HOTELS LTD
STREET 2: ATLANTIS, CORAL TOWERS-EXECUTIVE OFFICES
CITY: PARADISE ISLANDS, BAHAMAS
STATE: C5
ZIP: 00000
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SUN INTERNATIONAL NORTH AMERICA INC
CENTRAL INDEX KEY: 0000083394
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990]
IRS NUMBER: 590763055
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: F-4
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-69780-36
FILM NUMBER: 1742003
BUSINESS ADDRESS:
STREET 1: 1415 EAST SUNRISE BLVD.
CITY: FT. LAUDERDALE
STATE: FL
ZIP: 33304
BUSINESS PHONE: 9547132500
MAIL ADDRESS:
STREET 1: 4651 SHERIDAN ST
STREET 2: SUITE 355
CITY: HOLLYWOOD
STATE: FL
ZIP: 33021
FORMER COMPANY:
FORMER CONFORMED NAME: CARTER MARY PAINT CO
DATE OF NAME CHANGE: 19680724
FORMER COMPANY:
FORMER CONFORMED NAME: GRIFFIN GAMING & ENTERTAINMENT INC
DATE OF NAME CHANGE: 19950810
FORMER COMPANY:
FORMER CONFORMED NAME: RESORTS INTERNATIONAL INC
DATE OF NAME CHANGE: 19920703
F-4
1
a2058552zf-4.txt
F-4
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 21, 2001
REGISTRATION NO. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM F-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
SUN INTERNATIONAL HOTELS LIMITED
SUN INTERNATIONAL NORTH AMERICA, INC.
(Exact name of Registrant as specified in its charter)
COMMONWEALTH OF THE BAHAMAS 7011 98-0136554
DELAWARE 7011 59-0763055
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification Number)
------------------------------
SUN INTERNATIONAL HOTELS LIMITED SUN INTERNATIONAL NORTH AMERICA, INC.
CORAL TOWERS 1415 E. SUNRISE BLVD.
PARADISE ISLAND, THE BAHAMAS FT. LAUDERDALE, FL 33304
(242) 363-6000 (954) 713-2500
(Address, including zip code, and telephone number, including area code, of Registrant's principal executive
offices)
------------------------------
WILLIAM C. MURTHA, ESQ.
SUN INTERNATIONAL NORTH AMERICA, INC.
2106 NEW ROAD - C7
LINWOOD, NJ 08221
(609) 653-8116
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPIES OF ALL COMMUNICATIONS TO:
JOHN W. WHITE, ESQ. CHARLES D. ADAMO, ESQ.
CRAVATH, SWAINE & MOORE SUN INTERNATIONAL HOTELS LIMITED
WORLDWIDE PLAZA CORAL TOWERS
825 EIGHTH AVENUE PARADISE ISLAND, THE BAHAMAS
NEW YORK, NY 10019-7475 (242) 363-6000
(212) 474-1000 (242) 363-4581 (FACSIMILE)
(212) 474-3700 (FACSIMILE)
------------------------------
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after this Registration Statement becomes
effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
------------------------------
CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED(1) REGISTERED UNIT(1) PRICE(1) REGISTRATION FEE(2)
8 7/8% Senior Subordinated Notes due
2011.................................. $200,000,000 100% $200,000,000 $50,000
Guarantees of Notes..................... (4) (4) (4) (5)
(1) Estimated solely for the purposes of calculating the registration fee
pursuant to Rule 457(f)(2) under the Securities Act of 1933.
(2) Calculated by multiplying the aggregate offering amount by .00025.
(3) See inside facing page for table of registrant guarantors.
(4) No separate consideration will be received for the guarantees.
(5) No further fee is payable pursuant to Rule 457(n).
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
REGISTRANT GUARANTORS
PRIMARY STANDARD
INDUSTRIAL I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION IDENTIFICATION
EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER ORGANIZATION CODE NUMBER NUMBER
---------------------------------------------------- ---------------------- ---------------- ---------------
Sun International Bahamas Limited(+).......... Commonwealth of The 7011 Not Applicable
Bahamas
Paradise Acquisitions Limited(+).............. Commonwealth of The 7011 Not Applicable
Bahamas
Paradise Island Limited(+).................... Commonwealth of The 7011 Not Applicable
Bahamas
Paradise Enterprises Limited(+)............... Commonwealth of The 7011 Not Applicable
Bahamas
Island Hotel Company Limited(+)............... Commonwealth of The 7011 Not Applicable
Bahamas
Paradise Beach Inn Limited(+)................. Commonwealth of The 7011 Not Applicable
Bahamas
Sun International Management Limited(+)....... British Virgin Islands 7011 Not Applicable
Sun Cove, Ltd.*............................... Connecticut 7011 36-4041616
Sun International Nevada, Inc.*.............. Nevada 7011 65-0922984
Sun International Resorts Inc.*............... Florida 7011 65-0483525
PIV, Inc.*................................... Florida 7011 65-0483531
ISS, Inc.*................................... Florida 7011 65-0483536
Sun International Marketing, Inc.*........... Florida 7011 65-0880994
Sun Cove California, Inc.*................... Delaware 7011 65-0932228
Sun Cove New York, Inc.*..................... Delaware 7011 65-1069728
Sun International New York, Inc.*............ New York 7011 13-4027976
Sun International Development Group, Inc.(+).. New Jersey 7011 65-0746089
Sun International Timeshare Limited(+)........ Commonwealth of The 7011 Not Applicable
Bahamas
Paradise Island Futures Limited(+)............ Commonwealth of The 7011 Not Applicable
Bahamas
Sun International Development Limited(+)...... Commonwealth of The 7011 Not Applicable
Bahamas
Paradise Security Services Limited(+)......... Commonwealth of The 7011 Not Applicable
Bahamas
Sunonline Limited(+).......................... Commonwealth of The 7011 Not Applicable
Bahamas
Bahamas e-Trading Limited(+).................. Commonwealth of The 7011 Not Applicable
Bahamas
Sun International Network Data Limited(+)..... Commonwealth of The 7011 Not Applicable
Bahamas
PRIMARY STANDARD
INDUSTRIAL I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION IDENTIFICATION
EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER ORGANIZATION CODE NUMBER NUMBER
---------------------------------------------------- ---------------------- ---------------- ---------------
Sunonline (IOM) Limited(+).................... Isle of Man 7011 Not Applicable
Sun International Development (Timeshare)
Limited(+).................................. Commonwealth of The 7011 Not Applicable
Bahamas
Sun Hotels International (Bermuda) Limited(+)... Bermuda 7011 Not Applicable
Sun International Finance Limited(+).......... British Virgin Islands 7011 Not Applicable
Aberdeen Management Limited(+)................ Channel Islands 7011 Not Applicable
Sun Vacances SA(+)............................ France 7011 Not Applicable
Birbo NV(+)................................... Netherlands Antilles 7011 Not Applicable
Sun Hotels International Management NV(+)..... Netherlands Antilles 7011 Not Applicable
Purposeful BV(+).............................. Netherlands 7011 Not Applicable
Sun International Marketing (UK) Ltd.(+)...... United Kingdom 7011 Not Applicable
Sun International Network Services Limited(+)... United Kingdom 7011 Not Applicable
------------------------
+ The address, including zip code, and telephone number, including area code,
of the registrant guarantor is as follows:
Coral Towers
Paradise Island, The Bahamas
(242) 363-6000
* The address, including zip code, and telephone number, including area code,
of the registrant guarantor is as follows:
10th Floor, 1415 E. Sunrise Blvd.
Ft. Lauderdale, FL 33304
(954) 713-2500
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION RELATING TO THESE SECURITIES IS EFFECTIVE.
THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING
AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION, DATED SEPTEMBER 21, 2001
PROSPECTUS
SUN INTERNATIONAL HOTELS LIMITED
[LOGO] SUN INTERNATIONAL NORTH
AMERICA, INC.
OFFER TO EXCHANGE
ALL OUTSTANDING 8 7/8% SENIOR
SUBORDINATED NOTES DUE 2011
($200,000,000 AGGREGATE PRINCIPAL
AMOUNT)
FOR
8 7/8% SENIOR SUBORDINATED NOTES
DUE 2011
($200,000,000 AGGREGATE PRINCIPAL
AMOUNT)
WHICH HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933
------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
, 2001, UNLESS WE EXTEND THE EXCHANGE OFFER IN OUR SOLE AND ABSOLUTE
DISCRETION.
We do not intend to list the New Notes on any national securities exchange,
and no established trading market for the New Notes is anticipated.
------------------------
SEE THE SECTION ENTITLED "RISK FACTORS" BEGINNING ON PAGE FOR A
DISCUSSION OF FACTORS THAT YOU SHOULD CONSIDER BEFORE TENDERING YOUR
OLD NOTES IN THE EXCHANGE OFFER.
None of the Securities and Exchange Commission, any state securities
commission, any state gaming commission or any other gaming authority or other
regulatory agency has approved or disapproved of these securities or passed upon
the adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
------------------------
THE DATE OF THIS PROSPECTUS IS , 2001
TABLE OF CONTENTS
PAGE
--------
Summary..................................................... 1
Risk Factors................................................ 11
Organizational Structure.................................... 21
Use of Proceeds............................................. 22
Capitalization.............................................. 22
Unaudited Pro Forma Consolidated Statements of Operations... 23
Selected Historical Consolidated Financial Data............. 28
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 31
Business.................................................... 42
Management.................................................. 54
Major Shareholders and Related Party Transactions........... 56
The Exchange Offer.......................................... 59
Description of New Notes.................................... 67
Description of Other Indebtedness........................... 101
Certain Tax Considerations.................................. 103
Plan of Distribution........................................ 104
Legal Matters............................................... 105
Experts..................................................... 105
Index to Financial Statements............................... F-1
------------------------
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form F-4 under the
Securities Act of 1933, as amended, relating to the exchange offer that
incorporates important business and financial information about us that is not
included in or delivered with this prospectus. This prospectus does not contain
all of the information included in the registration statement. The information
is available from us without charge to holders of the Old Notes as specified
below. If we have made references in this prospectus to any contracts,
agreements or other documents and also filed any of those contracts, agreements
or documents as exhibits to the registration statement, you should read the
relevant exhibit for a more complete understanding of the document or matter
involved.
We are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended, applicable to foreign issuers, and in accordance
therewith file reports, including annual reports on Form 20-F, and other
information with the SEC. We make available to our shareholders annual reports
containing audited financial statements within 180 days of the end of each
fiscal year and publish quarterly reports containing selected financial data for
the first three quarters of the fiscal year within 60 days from the end of such
fiscal quarter (in each case, prepared in accordance with generally accepted
accounting principles in the United States). We are exempt from the rules under
the Exchange Act prescribing the furnishing and content of proxy statements to
shareholders. However, we furnish shareholders with statements with respect to
annual or extraordinary meetings of shareholders, as well as such other reports
as may from time to time be authorized by the board of directors or be required
under law. Sun International North America, Inc. is subject to the informational
requirements of the Exchange Act, and in accordance therewith files reports and
other information with the SEC.
You may read and copy this information at the SEC's public reference
facilities, Judiciary Plaza, 450 Fifth Street, NW, Room 1024, Washington, D.C.
20549 and at the following SEC regional offices: Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661; and 7 World Trade
i
Center, 13th Floor, New York, New York 10048. The public may obtain information
on the operation of the public reference facilities by telephone at
(800)-732-0330.
You may also obtain copies of such information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, NW, Washington, D.C. 20549, at
prescribed rates.
The SEC also maintains a website at http://www.sec.gov that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the SEC.
You can inspect copies of such materials filed by Sun International Hotels
Limited at the offices of the New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10005, on which Sun International Hotels Limited's ordinary
shares are listed.
In addition, for so long as any of the Notes remain outstanding and during
any period in which we are not subject to Section 13 or 15(d) of the Exchange
Act, we will make available to any prospective purchaser or beneficial owner of
the Notes in connection with any sale thereof the information required by
Rule 144A(d)(4) under the Securities Act of 1933.
Information with respect to us also may be obtained from us at Sun
International Hotels Limited, Coral Towers, The Bahamas or by telephone at
(242) 363-6017.
TO OBTAIN TIMELY DELIVERY OF ANY OF OUR FILINGS, AGREEMENTS OR OTHER
DOCUMENTS, YOU MUST MAKE YOUR REQUEST TO US NO LATER THAN FIVE BUSINESS DAYS
BEFORE THE EXPIRATION DATE OF THE EXCHANGE OFFER. THE EXCHANGE OFFER WILL EXPIRE
AT 5:00 P.M., NEW YORK CITY TIME ON , 2001. THE EXCHANGE OFFER MAY BE
EXTENDED BY US IN OUR SOLE DISCRETION. SEE THE SECTION ENTITLED "THE EXCHANGE
OFFER" FOR MORE DETAILED INFORMATION.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Sun International Hotels Limited has filed the following documents with the
SEC and they are incorporated by reference in this prospectus:
- Annual Report on Form 20-F for the year ended December 31, 2000; and
- Form 6-K filed on September 20, 2001; Form 6-K filed on August 24, 2001;
Form 6-K filed on August 9, 2001; Form 6-K filed on August 3, 2001; Form
6-K filed on August 2, 2001; Two Forms 6-K filed on August 1, 2001;
Form 6-K filed on July 24, 2001; Form 6-K filed on July 20, 2001;
Form 6-K filed on July 19, 2001; Form 6-K filed on July 10, 2001; and
Form 6-K filed on July 3, 2001.
Sun International North America, Inc. has filed the following documents with
the SEC and they are incorporated herein by reference:
- Annual Report on Form 10-K for the year ended December 31, 2000;
- Quarterly Report on Form 10-Q for the quarter ended March 31, 2001; and
- Form 8-K filed on September 20, 2001; Form 8-K filed on August 24, 2001;
Form 8-K filed on August 9, 2001; Form 8-K filed on August 3, 2001; Form
8-K filed on August 2, 2001; Form 8-K filed on July 24, 2001; Form 8-K
filed on July 20, 2001; Form 8-K filed on July 19, 2001; and Form 8-K
filed on July 10, 2001.
Any statement contained in a document incorporated or deemed to be
incorporated by reference in this prospectus is modified or superseded for
purposes of this prospectus to the extent that a statement contained in this
prospectus or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded does not, except as so
modified or superseded, constitute a part of this prospectus. In addition, all
other documents filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this prospectus and prior to the
consummation of the
ii
exchange offer for the New Notes shall be deemed incorporated by reference into
this prospectus and to be a part hereof from the date of filing of such
documents or reports, to the extent not superseded by documents or reports
subsequently filed.
We will provide without charge to each person to whom a copy of this
prospectus is delivered, upon the request of such person, a copy of any or all
of the documents that are incorporated by reference herein, other than exhibits
to such documents, unless such exhibits are specifically incorporated by
reference into such documents. Written requests should be directed to the
Secretary, Sun International Hotels Limited, Coral Towers, The Bahamas.
Telephone requests for such copies should be directed to the general counsel at
(242) 363-6017.
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference in this
prospectus include forward-looking statements. We have based these
forward-looking statements on our current expectations, estimates, projections,
management's beliefs and assumptions made by management. We use "expects,"
"anticipates," "intends," "plans," "believes," "estimates," and similar
expressions to identify forward-looking statements. Forward-looking statements
include statements relating to our plans for future expansion and other business
activities as well as other capital spending, financing sources and the effects
of regulation (including gaming and tax regulation) and competition. These
forward-looking statements involve important risks and uncertainties that could
significantly affect anticipated results in the future. Accordingly, our results
may differ from those expressed in such forward-looking statements made in this
prospectus and our public filings. These risks and uncertainties include, but
are not limited to, the risk factors discussed under the heading "Risk Factors"
in this prospectus and in our filings with the SEC.
You should not place undue reliance on any forward-looking statements. Other
than as required by applicable law or the applicable rules of any exchange on
which our securities may be listed, we have no intention or obligation to update
forward-looking statements.
MARKET DATA
Market data used in this prospectus, including the information relating to
our relative position in the resort and gaming markets, is based upon our good
faith estimates, which are based upon our review of internal surveys,
independent industry publications and other publicly available information.
Although we believe that these sources are reliable, we have not independently
verified the information and cannot guarantee its accuracy and completeness.
iii
SUMMARY
THE FOLLOWING SUMMARY CONTAINS BASIC INFORMATION ABOUT THIS OFFERING. IT
DOES NOT CONTAIN ALL OF THE INFORMATION THAT IS IMPORTANT TO YOU. YOU SHOULD
READ THIS ENTIRE PROSPECTUS AND THE DOCUMENTS WE HAVE REFERRED YOU TO,
ESPECIALLY THE RISKS OF INVESTING IN THE NEW NOTES DISCUSSED UNDER "RISK
FACTORS," BEFORE INVESTING IN THE NEW NOTES. UNLESS THE CONTEXT OTHERWISE
INDICATES AND EXCEPT WITH RESPECT TO ANY DESCRIPTION OF THE NEW NOTES,
REFERENCES TO "WE," "US," AND "OUR" ARE TO SUN INTERNATIONAL HOTELS LIMITED, OR
SUN INTERNATIONAL, AND ITS SUBSIDIARIES (INCLUDING SUN INTERNATIONAL NORTH
AMERICA, INC., OR SINA), TAKEN AS A WHOLE.
WHEN WE USE THE TERM "NOTES" IN THIS PROSPECTUS, THE TERM INCLUDES THE OLD
NOTES AND THE NEW NOTES.
THE COMPANY
We are a leading developer and operator of premier casinos, resorts and
luxury hotels. We focus our operations on two distinct businesses: destination
casino resorts and luxury resort hotels.
In our destination casino resort business, we own and operate the Atlantis
resort located on Paradise Island, The Bahamas. We believe that the ocean-themed
Atlantis, which features the world's largest open-air aquarium and the largest
hotel and casino in the Caribbean market, is a "one of a kind" destination
resort. We also developed and receive certain revenue from the Mohegan Sun
casino in Uncasville, Connecticut, which we believe is one of the most
profitable casinos in the United States.
In our luxury resort hotel business, we operate eight beach resorts in
Mauritius, Dubai, the Maldives and The Bahamas.
BUSINESSES
DESTINATION CASINO RESORTS
Our destination casino resort business consists of large-scale, premier
destination resorts that we believe are "must see" properties. The existing
properties in this business are Atlantis and Mohegan Sun. These properties
feature distinctive themes, unique architectural designs and decors, and offer a
wide range of gaming, entertainment and other amenities. We believe these
properties maintain competitive advantages due to their scale, location, design,
variety of amenities and significant barriers to entry in the markets in which
they operate.
ATLANTIS
Our flagship destination casino resort is Atlantis, a 2,317-room,
ocean-themed resort located on Paradise Island, The Bahamas. Since we acquired
the property in 1994, we have spent approximately $1.0 billion to create a
unique destination casino resort that caters to multiple segments of the resort
and casino gaming markets. Atlantis features three interconnected hotel towers
built around a 7-acre lagoon and a 34-acre marine environment that includes the
world's largest open-air aquarium. Atlantis also features a 100,000 square foot
entertainment complex which includes the largest casino in the Caribbean market,
containing approximately 1,000 slot machines and 80 table games, 17 restaurants,
approximately 100,000 square feet of convention space, a sports center and over
30,000 square feet of high-end retail space. The 63-slip, full service Marina at
Atlantis enjoys some of the highest average docking rates in the Caribbean
market and can accommodate yachts up to 200 feet in length. We also developed
Harborside at Atlantis, a timeshare project located adjacent to Atlantis,
through a joint venture with Starwood Hotels and Resorts Worldwide, Inc.
Atlantis is master-planned for expansion, and we believe the approximate 100
acres of undeveloped land we own on Paradise Island gives us the capacity to add
more than 2,000 new hotel rooms as well as condominiums and additional timeshare
units, restaurants, retail space and other facilities. We are
1
evaluating plans for a 1,000-room hotel expansion at Atlantis that will cater
primarily to the middle-market customer segment. This expansion is contingent
upon a number of factors, including continued strong demand at Atlantis.
MOHEGAN SUN
We believe the Native American-themed Mohegan Sun is one of the premier
casino gaming properties in the Northeast and one of the most profitable casinos
in the United States. The property features a 176,500 square foot casino with
approximately 3,600 slot machines, 153 table games and various other amenities.
For the fiscal year ended September 30, 2000, Mohegan Sun reported gross revenue
of $809.3 million and a gross win per slot per day of $488. We believe Mohegan
Sun benefits from a superior location and strong demographics. It is located
approximately one mile from the interchange of Interstate 395 and Connecticut
Route 2A in Uncasville, Connecticut, and is within 150 miles of approximately
22 million adults. Mohegan Sun has spent approximately $40.0 million for
infrastructure improvements providing direct highway access to the property from
Boston, Providence and New York.
We developed Mohegan Sun and managed the property from its opening in 1996
until January 2000 through Trading Cove Associates, or TCA, a partnership in
which we own a 50% interest. On January 1, 2000, TCA turned over management of
the property to the Mohegan Tribe and TCA now receives payments equal to 5% of
gross revenues generated by the property from January 2000 through
December 2014, including the expansion described below.
We are also overseeing the development of an approximate $960.0 million
expansion of the property through TCA. This expansion includes 115,000 square
feet of additional gaming space containing approximately 2,550 slot machines and
80 table games, a 34-story, 1,200-room luxury hotel, 100,000 square feet of
convention space, a 10,000-seat arena, 5,275 additional parking spaces, 130,000
square feet of retail space, specialty retail shops and additional restaurants.
The expanded casino is expected to open in Fall 2001, with the remainder of the
expansion expected to open in phases through April 2002. Upon completion of the
Mohegan Sun expansion, we believe the gross revenues of the property will
significantly increase and that Mohegan Sun will be one of the largest and most
unique destination casino resorts in the world.
LUXURY RESORT HOTELS
Our luxury resort hotel business consists of a collection of premier beach
resort hotels that operate primarily in the five-star, deluxe-end of the resort
market. The properties in our luxury resort hotel business are as follows:
- In Mauritius, we manage and own interests in five beach resorts:
- the recently renovated 175-room Le Saint Geran Hotel;
- the 200-room Le Touessrok Hotel & Ile Aux Cerfs;
- the 248-room La Pirogue Hotel;
- the 333-room Le CoCo Beach; and
- the 238-room Sugar Beach Resort Hotel.
- In the Maldives, located off the southern tip of India, we manage the
Kanuhura Resort & Spa, a 120-room luxury resort located on Kanuhura
Island.
- In the Middle East, we manage the Royal Mirage Hotel in Dubai, a luxury
258-room hotel which opened in August 1999, and we will manage a new
225-room luxury hotel that is to be constructed adjacent to the Royal
Mirage Hotel.
2
- In The Bahamas, we own and operate the Ocean Club, a high-end luxury
resort hotel with 106 rooms and suites located on Paradise Island,
including a 50-room addition completed in October 2000. In January
2001, we completed the Tom Weiskopf-designed championship Ocean Club
Golf Course and Clubhouse and created Ocean Club Estates, with 121
luxury homesites set around the golf course.
BUSINESS STRATEGY AND COMPETITIVE STRENGTHS
Our strategy is to develop and manage premier, "one of a kind" destination
casino resorts and luxury resort hotels through direct ownership, joint ventures
or other contractual arrangements. We believe our business infrastructure,
including our development and marketing expertise, marketing programs and tour
and travel distribution channels will enable us to leverage and expand our
business in existing and new markets.
We believe our competitive strengths to be as follows:
- Unique Destination Casino Resorts and Luxury Resort Hotels
- Significant Recent Capital Expenditures
- Locations in Attractive Markets with Significant Barriers to Entry
- Strong Cash Flow
- Proven Track Record of Developing and Operating Destination Casino Resorts
- Extensive Management Experience in Developing and Operating Luxury Resort
Hotels
- Geographically Diverse Clientele in Multiple Price Segments
- Atlantis Offers a Variety of Amenities Resulting in a Diverse Revenue
Stream
RECENT DEVELOPMENTS
REVOLVING CREDIT FACILITY
We are currently engaged in discussions with various lenders to amend and
restate our existing revolving credit facility, which matures in August 2002.
MAJORITY SHAREHOLDER REORGANIZATION
On July 3, 2001, we announced the restructuring of our majority shareholder,
Sun International Investments Limited, or SIIL. In connection with this
restructuring, among other things, SIIL will be dissolved and the shareholders
agreement governing SIIL was terminated. In addition, SIIL's shareholders have
agreed to, among other things, certain standstill provisions in effect through
June 2006, pursuant to which each of them will refrain from proposing or
consummating certain extraordinary corporate transactions involving us,
including any merger or the sale of substantially all of our assets. See "Major
Shareholders and Related Party Transactions."
ATLANTIC CITY SALE
On April 25, 2001, we sold Resorts Atlantic City and certain related assets
for approximately $144.8 million and granted the purchaser a two-year option to
acquire certain undeveloped real estate adjacent to the property for an
additional $40.0 million. We believe that Resorts Atlantic City was a property
that did not fit with our business strategy. We initially planned to develop the
property into a "must-see" destination resort, but due to the difficulty in
acquiring the requisite land and other obstacles to development, we concluded
our capital could be better deployed elsewhere.
3
SUMMARY CONSOLIDATED FINANCIAL DATA
The following table contains summary financial and other data that has been
derived from the following sources:
- as of and for each of the years in the three-year period ended
December 31, 2000, from our audited consolidated financial statements
prepared in accordance with U.S. GAAP included in this prospectus;
- as of June 30, 2001, from our unaudited interim consolidated financial
statements, which include all adjustments, consisting only of normal
recurring adjustments, that in our opinion are necessary for a fair
presentation of our financial position and results of operations as of and
for such periods, included in this prospectus; and
- as of June 30, 2001 and for the six-month periods ended June 30, 2000 and
2001, and for the year ended December 31, 2000, on a pro forma as adjusted
basis to give effect to the disposition of Resorts Atlantic City and this
offering, from our unaudited pro forma financial statements included in
this prospectus under the heading "Unaudited Pro Forma Consolidated
Statements of Operations."
The information set forth below is not necessarily indicative of future
operations and should be read in conjunction with Management's Discussion and
Analysis of Financial Condition and Results of Operations and other financial
information included elsewhere in this prospectus. Amounts are reported in U.S.
dollars.
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
-------------------------------------------------- -------------------
PRO FORMA PRO FORMA
ACTUAL AS ADJUSTED AS ADJUSTED
------------------------------------ ----------- -------------------
1998 (A)(B) 1999 (B) 2000 (B)(C) 2000 2000 2001
----------- -------- ----------- ----------- -------- --------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
(IN THOUSANDS)
CONSOLIDATED STATEMENT OF OPERATIONS
DATA:
Gross Revenues
Gaming............................. $319,342 $351,545 $367,935 $132,108 $ 74,565 $ 73,819
Rooms.............................. 94,942 164,831 194,008 177,596 101,300 110,604
Food and beverage.................. 86,593 137,100 147,718 121,679 67,108 72,678
Tour operations.................... 14,757 28,714 33,192 33,192 15,926 20,711
Real estate related................ -- -- 108,650 108,650 96,091 7,757
Management fees.................... 40,645 46,898 35,763 35,763 16,670 18,323
Other.............................. 35,391 45,910 49,208 45,435 21,627 32,989
Insurance recovery................. -- 14,209 -- -- -- --
-------- -------- --------- --------- -------- --------
Total gross revenues................. 591,670 789,207 936,474 654,423 393,287 336,881
Net revenues......................... 550,878 738,967 884,695 627,932 376,751 322,417
Write-down of net assets held for
sale............................... -- -- (229,208) -- -- --
Income (loss) from operations........ 52,206 114,432 (74,844) 147,534 120,414 78,174
Equity in earnings of associated
companies.......................... 2,730 2,628 4,225 4,225 1,014 2,804
Net income (loss).................... $ 57,746 $ 69,822 $(119,104) $112,371 $101,677 $ 54,814
4
AS OF JUNE 30,
--------------------------
PRO FORMA
ACTUAL AS ADJUSTED
------------ -----------
2001 2001
------------ -----------
(UNAUDITED)
(IN THOUSANDS)
CONSOLIDATED BALANCE SHEET DATA AT END OF PERIOD:
Cash and cash equivalents, including restricted cash....................................... $ 42,488 $ 42,488
Total assets............................................................................... 1,362,231 1,368,231
Long-term debt, including current portion.................................................. 521,304 527,304
Shareholders' equity....................................................................... 698,813 698,813
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
-------------------------------------------- -------------------
PRO FORMA PRO FORMA
AS ADJUSTED AS ADJUSTED
----------- -------------------
1998 (A) 1999 2000 2000 2000 2001
-------- -------- -------- ----------- -------- --------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS, EXCEPT RATIOS AND OPERATING DATA)
OTHER FINANCIAL DATA:
EBITDA (d)................................. $110,248 $176,360 $164,041 $140,993 $89,872 $101,199
Depreciation and amortization.............. 32,081 57,230 60,223 44,005 20,749 24,116
Capital expenditures....................... 443,996 205,046 155,892 144,576 62,630 33,606
Cash interest expense (e).................. 30,703 49,784 48,439 39,458 19,095 22,117
ATLANTIS OPERATING DATA:
Average number of rooms.................... 1,196 2,325 2,319 2,319 2,319 2,317
Average occupancy.......................... 87.0% 81.4% 83.2% 83.2% 88.2% 89.7%
Average daily room rate.................... $187 $211 $242 $242 $263 $273
Average number of slot machines............ 823 979 975 975 978 959
Average win per slot machine per day....... $115 $136 $144 $144 $154 $158
Average number of table games.............. 69 77 79 79 79 79
Average win per table game per day......... $ 1,987 $ 2,934 $ 2,813 $ 2,813 $ 3,295 $ 3,239
--------------------------
(a) The results of operations for the year ended December 31, 1998 include only
two weeks of operations of the Royal Towers on Paradise Island after its
opening in mid-December 1998.
(b) The results of operations for the years ended December 31, 1998, 1999 and
2000 include pre-opening expenses of $26.0 million, $5.4 million and
$7.6 million, respectively.
(c) The results of operations for the year ended December 31, 2000 include a
$229.2 million write-down of the carrying value of Resorts Atlantic City in
connection with the sale of the property and the related option to its
realizable value.
5
(d) EBITDA is defined as income from operations before interest, taxes,
depreciation and amortization, real estate related gains and non-recurring
items. The real estate related gains and non-recurring items excluded in the
calculation of EBITDA for the periods presented are set forth below:
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
-------------------------------------------- -------------------
PRO FORMA PRO FORMA
ACTUAL AS ADJUSTED AS ADJUSTED
------------------------------ ----------- -------------------
1998 1999 2000 2000 2000 2001
-------- -------- -------- ----------- -------- --------
(IN THOUSANDS)
Gain on real estate related sales...... $ -- $ -- $(76,378) $(76,378) $(70,197) $(5,446)
Pre-opening expenses................... 25,961 5,398 7,616 7,616 690 4,355
Write-down of net assets held for
sale................................. -- -- 229,208 -- -- --
Gain on sale of airplane............... -- (700) -- -- -- --
Purchase termination costs............. -- -- 11,202 11,202 11,202 --
Transaction costs...................... -- -- 7,014 7,014 7,014 --
------- ------ -------- -------- -------- -------
Total.................................. $25,961 $4,698 $178,662 $(50,546) $(51,291) $(1,091)
======= ====== ======== ======== ======== =======
Purchase termination costs relate to the termination of our agreement to
acquire the Desert Inn. Transaction costs represent costs in connection with
our self-tender offer in June 2000 and the termination of the proposal by
SIIL to acquire all our ordinary shares it did not already own.
We believe that EBITDA provides useful information regarding our ability to
service our indebtedness but should not be considered in isolation from or
as a substitute for operating income or cash flow data prepared in
accordance with U.S. GAAP as an indicator of our operating performance or as
a measure of our liquidity.
(e) Cash interest expense includes capitalized interest and excludes
amortization of deferred financing costs and interest income.
6
THE OFFERING
SUMMARY OF TERMS OF THE EXCHANGE OFFER
BACKGROUND................................ On August 14, 2001, we completed a private placement of
the Old Notes. In connection with that private
placement, we entered into a registration rights
agreement in which we agreed, among other things, to
complete an exchange offer.
EXCHANGE OFFER............................ We are offering to exchange our New Notes which have
been registered under the Securities Act of 1933 for a
like principal amount of our outstanding, unregistered
Old Notes. Old Notes may only be tendered in integral
multiples of $1,000 principal amount.
RESALE OF NEW NOTES....................... We believe that New Notes issued pursuant to the
exchange offer in exchange for Old Notes may be offered
for resale, resold and otherwise transferred by you
without compliance with the registration and prospectus
delivery provisions of the Securities Act of 1933,
provided that:
- you are acquiring the New Notes in the ordinary
course of your business;
- you have not engaged in, do not intend to engage
in, and have no arrangement or understanding with
any person to participate in the distribution of
the New Notes; and
- you are not our affiliate as defined under
Rule 405 of the Securities Act of 1933.
Each participating broker-dealer that receives New Notes
for its own account pursuant to the exchange offer in
exchange for Old Notes that were acquired as a result of
market-making or other trading activity must acknowledge
that it will deliver a prospectus in connection with any
resale of New Notes. See "Plan of Distribution."
CONSEQUENCES IF YOU DO NOT EXCHANGE YOUR
OLD NOTES............................... Old Notes that are not tendered in the exchange offer or
are not accepted for exchange will continue to bear
legends restricting their transfer. You will not be able
to offer or sell the Old Notes unless:
- each offer or sale is made pursuant to an
exemption from the requirements of the Securities
Act of 1933; or
- the Old Notes are registered under the Securities
Act of 1933.
After the exchange offer is closed, we will no longer
have an obligation to register the Old Notes, except for
some limited exceptions. See "Risk Factors--Holders who
fail to exchange their Old Notes will continue to be
subject to restrictions on transfer."
7
EXPIRATION DATE........................... 5:00 p.m., New York City time, on , 2001,
unless extended in our sole and absolute discretion.
WITHDRAWAL; NON-ACCEPTANCE................ You may withdraw any Old Notes tendered in the exchange
offer at any time prior to 5:00 p.m., New York City
time, on , 2001.
CONDITIONS TO THE EXCHANGE OFFER.......... The exchange offer is subject to customary conditions,
which we may waive. See the discussion below under the
caption "The Exchange Offer--Conditions to the Exchange
Offer" for more information regarding the conditions to
the exchange offer.
SPECIAL PROCEDURES FOR BENEFICIAL
HOLDERS................................. If you beneficially own Old Notes which are registered
in the name of a broker, dealer, commercial bank, trust
company or other nominee and you wish to tender in the
exchange offer, you should contact such registered
holder promptly and instruct such person to tender on
your behalf. If you wish to tender in the exchange offer
on your own behalf, you must, prior to completing and
executing the letter of transmittal and delivering your
Old Notes, either arrange to have the Old Notes
registered in your name or obtain a properly completed
bond power from the registered holder. The transfer of
registered ownership may take a considerable period of
time.
ACCOUNTING TREATMENT...................... We will not recognize any gain or loss for accounting
purposes upon the completion of the exchange offer. The
expenses of the exchange offer that we pay will increase
our deferred financing costs in accordance with
generally accepted accounting principles. See "The
Exchange Offer--Accounting Treatment."
CERTAIN FEDERAL INCOME TAX
CONSIDERATIONS.......................... The exchange of the Old Notes for New Notes in the
exchange offer generally should not be a taxable
transaction for United States Federal income tax
purposes.
USE OF PROCEEDS........................... We will not receive any cash proceeds from the exchange
offer. See "Use of Proceeds."
EXCHANGE AGENT............................ The Bank of New York is the exchange agent for the
exchange offer. You can find the address and telephone
number of the exchange agent below under the caption
"The Exchange Offer--Exchange Agent."
8
SUMMARY DESCRIPTION OF THE SECURITIES TO BE REGISTERED
THE NEW NOTES HAVE THE SAME FINANCIAL TERMS AND COVENANTS AS THE OLD NOTES,
WHICH ARE AS FOLLOWS:
Issuers................................... Sun International Hotels Limited and Sun International
North America, Inc.
Securities Offered........................ $200 million aggregate principal amount of 8 7/8% senior
subordinated notes due 2011.
Maturity.................................. August 15, 2011.
Interest Payment Dates.................... Interest will be payable semiannually in arrears on
February 15 and August 15, commencing on February 15,
2002.
Ranking................................... The New Notes will:
- be our unsecured senior subordinated obligations;
- rank junior to all of our existing and future
senior debt, including debt under our revolving
credit facility; and
- rank equal to our existing and future subordinated
debt.
The guarantees of the New Notes by all of our
subsidiaries will:
- be unsecured senior subordinated obligations of
such subsidiaries;
- rank junior to all of the existing and future
senior debt of such subsidiaries, including
guarantees of borrowings under our revolving
credit facility; and
- rank equal to all of the existing and future
subordinated debt of such subsidiaries.
As of June 30, 2001, as adjusted for the offering of the
Old Notes, we estimate that we and our subsidiaries
would have had $27.9 million of senior debt outstanding,
with approximately $345.8 million of unused availability
under our revolving credit facility, and approximately
$500.0 million in subordinated debt.
Guarantees................................ All of our subsidiaries will unconditionally guarantee
the New Notes. If we cannot make payments required by
the New Notes, our guarantor subsidiaries must make
them, subject to the ranking limitations discussed
above. The guarantees may be released under certain
circumstances.
Optional Redemption....................... On or after August 15, 2006, we may redeem some or all
of the New Notes at the redemption prices listed in the
"Description of New Notes" section under the heading
"Optional Redemption," plus accrued interest.
Optional Redemption After Equity
Offerings............................... At any time (which may be more than once) before
August 15, 2004, we can choose to redeem up to 35% of
the Notes (including any additional Notes) with the net
proceeds
9
that we raise in one or more specified equity offerings,
as long as:
- we pay 108.875% of the face amount of the Notes,
plus accrued and unpaid interest to the date of
redemption;
- we redeem the Notes within 60 days of completing
the equity offering; and
- at least 65% of the aggregate principal amount of
Notes issued (including any additional Notes)
remain outstanding afterwards.
Redemption Based upon Gaming Laws......... The Notes are subject to redemption requirements imposed
by gaming laws and regulations of gaming authorities in
jurisdictions in which we conduct gaming operations. See
"Description of New Notes--Required Regulatory
Redemption."
Change of Control Offer................... If a change of control of our company occurs and there
is a ratings decline of the Notes within 90 days of such
change in control, we must give holders of the Notes the
opportunity to sell us their Notes at 101% of their face
amount, plus accrued and unpaid interest.
Asset Sale Proceeds....................... If we or any of the guarantors engage in asset sales, we
generally must either invest the net cash proceeds from
such sales in our business within a specified period of
time, prepay senior debt or make an offer to purchase a
principal amount of the Notes equal to the excess net
cash proceeds. The purchase price of the Notes would be
100% of their principal amount, plus accrued and unpaid
interest.
Certain Indenture Provisions.............. The indenture governing the New Notes contains covenants
limiting our (and substantially all of our
subsidiaries') ability to:
- incur additional debt;
- pay dividends or distributions on our capital
stock or repurchase our capital stock;
- make certain investments;
- create liens on our assets to secure subordinated
debt;
- enter into transactions with affiliates;
- merge or consolidate with another company; and
- transfer and sell assets.
These covenants are subject to a number of important
limitations and exceptions.
Use of Proceeds........................... We will not receive any proceeds from the exchange
offer.
Risk Factors.............................. See "Risk Factors" for a description of certain of the
risks you should consider before tendering your Old
Notes in the exchange offer.
10
RISK FACTORS
YOU SHOULD CONSIDER CAREFULLY THE FOLLOWING FACTORS, AS WELL AS THE OTHER
INFORMATION SET FORTH OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS, BEFORE
TENDERING YOUR OLD NOTES IN THE EXCHANGE OFFER. WHEN WE USE THE TERM "NOTES" IN
THIS PROSPECTUS, THE TERM INCLUDES THE OLD NOTES AND THE NEW NOTES.
RISKS RELATED TO THE EXCHANGE OFFER AND HOLDING THE NEW NOTES
HOLDERS WHO FAIL TO EXCHANGE THEIR OLD NOTES WILL CONTINUE TO BE SUBJECT TO
RESTRICTIONS ON TRANSFER.
If you do not exchange your Old Notes for New Notes in the exchange offer,
you will continue to be subject to the restrictions on transfer of your Old
Notes described in the legend on the certificates for your Old Notes. The
restrictions on transfer of your Old Notes arise because we issued the Old Notes
under exemptions from, or in transactions not subject to, the registration
requirements of the Securities Act of 1933 and applicable state securities laws.
In general, you may only offer or sell the Old Notes if they are registered
under the Securities Act of 1933 and applicable state securities laws, or
offered and sold under an exemption from these requirements. We do not plan to
register the Old Notes under the Securities Act of 1933.
Because we anticipate that most holders of Old Notes will elect to exchange
such Old Notes, we expect that the liquidity of the market for any Old Notes
remaining after the completion of the exchange offer may be substantially
limited. Any Old Notes tendered and exchanged in the exchange offer will reduce
the aggregate principal amount at maturity of the Old Notes outstanding.
Following the exchange offer, if you did not tender your Old Notes you generally
will not have any further registration rights (subject to limited exceptions),
and such Old Notes will continue to be subject to certain transfer restrictions,
as described above. Accordingly, the liquidity of the market for such Old Notes
could be adversely affected. The Old Notes are currently eligible for sale
pursuant to Rule 144A and Regulation S through the Private Offerings, Resale and
Trading through Automated Linkages market of the National Association of
Securities Dealers, Inc.
YOU MUST COMPLY WITH THE EXCHANGE OFFER PROCEDURES IN ORDER TO RECEIVE NEW,
FREELY TRADABLE NOTES.
Delivery of New Notes in exchange for Old Notes tendered and accepted for
exchange pursuant to the exchange offer will be made only after timely receipt
by the exchange agent of the following:
- certificates for Old Notes or a book-entry confirmation of a book-entry
transfer of Old Notes into the Exchange Agent's account at DTC, New York,
New York as depository, including an Agent's Message (as defined) if the
tendering holder does not deliver a letter of transmittal,
- a completed and signed letter of transmittal (or facsimile thereof), with
any required signature guarantees, or, in the case of a book-entry
transfer, an Agent's Message in lieu of the letter of transmittal, and
- any other documents required by the letter of transmittal.
Therefore, holders of Old Notes who would like to tender Old Notes in
exchange for New Notes should be sure to allow enough time for the Old Notes to
be delivered on time. We are not required to notify you of defects or
irregularities in tenders of Old Notes for exchange. Old Notes that are not
tendered or that are tendered but we do not accept for exchange will, following
consummation of the exchange offer, continue to be subject to the existing
transfer restrictions under the Securities Act of 1933 and, upon consummation of
the exchange offer, certain registration and other rights under the registration
rights agreement will terminate. See "The Exchange Offer--Procedures for
Tendering" and "The Exchange Offer--Consequences of Failures to Properly Tender
Old Notes in the Exchange."
11
SOME HOLDERS WHO EXCHANGE THEIR OLD NOTES MAY BE DEEMED TO BE UNDERWRITERS.
If you exchange your Old Notes in the exchange offer for the purpose of
participating in a distribution of the New Notes, you may be deemed to have
received restricted securities and, if so, will be required to comply with the
registration and prospectus delivery requirements of the Securities Act of 1933
in connection with any resale transaction.
HOLDERS OF THE OLD NOTES PARTICIPATING IN THE EXCHANGE OFFER WILL NOT RECOGNIZE
GAIN OR LOSS IN THE EXCHANGE.
The exchange of Old Notes for New Notes in the exchange offer will not be a
taxable transaction to holders for U.S. federal income tax purposes. See
"Certain Tax Considerations."
RISKS RELATED TO THE NOTES
OUR SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT OUR OPERATIONS AND FINANCIAL
RESULTS AND PREVENT US FROM FULFILLING OUR OBLIGATIONS UNDER THE NOTES.
We have now, and after the offering will continue to have, a significant
amount of indebtedness. As of June 30, 2001, after giving effect to the offering
of the Old Notes (and the application of the proceeds therefrom), we would have
had approximately $527.9 million of indebtedness and shareholders' equity of
approximately $698.8 million.
Our substantial indebtedness could have important consequences for you. For
example, it could:
- make it more difficult for us to satisfy our obligations with respect to
the Notes;
- increase our vulnerability to general adverse economic and industry
conditions;
- require us to dedicate a substantial portion of our cash flow from
operations to payments on our indebtedness, which would reduce the
availability of our cash flow to fund working capital, capital
expenditures, expansion efforts and other general corporate requirements;
- limit our flexibility in planning for, or reacting to, changes in our
business and industry;
- place us at a competitive disadvantage to competitors with less
indebtedness; and
- limit, along with the financial and other restrictive covenants in our
indebtedness, among other things, our ability to borrow additional funds.
Failure to comply with the covenants in the agreements governing our
indebtedness could result in an event of default which, if not cured or waived,
could have a significant adverse effect on us.
SERVICING OUR INDEBTEDNESS WILL REQUIRE A SIGNIFICANT AMOUNT OF CASH. OUR
ABILITY TO GENERATE CASH DEPENDS ON MANY FACTORS, SOME OF WHICH ARE BEYOND OUR
CONTROL.
Our ability to make payments on and to refinance our indebtedness, including
the Notes, and to fund planned capital expenditures and expansion efforts
depends on our ability to generate cash in the future. To some extent, this is
subject to general economic, financial, competitive, legislative and regulatory
factors and other factors that are beyond our control. In addition, our ability
to borrow funds under our revolving credit facility in the future will depend on
our continued compliance with certain financial covenants in the revolving
credit facility and any amendments thereto.
We cannot assure you that our business will generate cash flow from
operations or that future borrowings will be available to us in an amount
sufficient to enable us to pay our indebtedness, including the Notes,
indebtedness under our existing revolving credit facility, our 9.000% senior
subordinated notes or 8.625% senior subordinated notes, or to fund our other
liquidity needs. As a result, we may need to refinance all or a portion of such
indebtedness on or before maturity. We cannot assure you that we will be able to
refinance or amend the terms of any of our indebtedness on
12
commercially reasonable terms or at all. Our inability to generate sufficient
cash flow or refinance our indebtedness on commercially reasonable terms would
have a material adverse effect on our financial condition, results of operations
and ability to satisfy our obligations under the Notes.
YOUR RIGHT TO RECEIVE PAYMENT ON THE NOTES AND THE GUARANTEES IS JUNIOR TO ALL
OF OUR AND THE GUARANTORS' SENIOR INDEBTEDNESS.
The Notes will be general unsecured obligations, junior in right of payment
to all existing and future senior indebtedness of the issuers and each
guarantor, including obligations under our revolving credit facility. The Notes
will not be secured by any of our or the guarantors' assets, and as such will be
effectively subordinated to any secured indebtedness that we or the guarantors
may have now or may incur in the future to the extent of the value of the assets
securing that indebtedness.
If one of the issuers or a guarantor is declared bankrupt, becomes insolvent
or is liquidated or reorganized, any indebtedness that ranks ahead of the Notes
and the guarantees will be entitled to be paid in full from our assets or the
assets of the guarantors before any payment may be made with respect to the
Notes or the guarantees. In any such case, we cannot assure you that we would
have sufficient assets to pay amounts due on the Notes. As a result, holders of
the Notes may receive less, proportionally, than the holders of indebtedness
senior to the Notes and the guarantees. The subordination provisions of the
indenture will also provide that we can make no payment to you during the
continuance of payment defaults on our senior indebtedness, and payments to you
may be suspended for a period of up to 180 days if a non-payment default exists
under our senior indebtedness. See "Description of New Notes--Subordination."
At June 30, 2001, after giving effect to the offering of the Old Notes (and
the application of the proceeds therefrom), the Notes and the guarantees would
have ranked junior to $27.9 million of our senior indebtedness and an additional
$345.8 million of unused availability under our revolving credit facility. In
addition, the indenture and our revolving credit facility permit, subject to the
terms and conditions of such agreements, the incurrence of additional
indebtedness, some or all of which may be senior indebtedness. See "Description
of New Notes--Certain Covenants" and "Description of Other Indebtedness."
WE AND OUR SUBSIDIARIES MAY STILL BE ABLE TO INCUR SUBSTANTIALLY MORE
INDEBTEDNESS. THIS COULD FURTHER EXACERBATE THE RISKS DESCRIBED ABOVE.
We and our subsidiaries may be able to incur substantial additional
indebtedness in the future. The terms of the indenture do not fully prohibit us
or our subsidiaries from doing so. After giving effect to the offering of the
Old Notes, including the application of the net proceeds therefrom, as of
June 30, 2001, we would have had approximately an additional $345.8 million of
unused availability under our revolving credit facility. All of the indebtedness
outstanding under our revolving credit facility is senior to the Notes, and any
indebtedness we may incur under any amended and restated revolving credit
facility will be senior to the Notes. If new indebtedness is added to our and
our subsidiaries' current debt levels, the related risks that we and they now
face could intensify.
THE ISSUERS ARE HOLDING COMPANIES AND DEPEND ON THE BUSINESS OF THEIR
SUBSIDIARIES TO SATISFY THEIR OBLIGATIONS UNDER THE NOTES.
The issuers are holding companies. The issuers' subsidiaries conduct
substantially all of our consolidated operations and own substantially all of
our consolidated assets. Consequently, our cash flow and our ability to pay our
indebtedness depends on our subsidiaries' cash flow and their payment of funds
to us. Our non-guarantor subsidiaries, if any, may not be obligated to make
funds available to us for payment on the Notes or otherwise. In addition, our
subsidiaries' ability to make any payments to us will depend on their earnings,
the terms of their indebtedness, business and tax considerations, legal and
regulatory restrictions and economic conditions. In addition, our subsidiaries'
ability to make any payments to us will depend on their earnings, the terms of
their indebtedness, business and tax
13
considerations, legal and regulatory restrictions and economic conditions. The
ability of our subsidiaries to make payments to us is also governed by the
gaming laws of certain jurisdictions, which may place limits on the amount of
funds which may be transferred to us and may require prior or subsequent
approval for any payments to us. Payments to us are also subject to legal and
contractual restrictions.
WE MAY REQUIRE YOU TO DISPOSE OF YOUR NOTES OR REDEEM YOUR NOTES IF REQUIRED BY
APPLICABLE GAMING REGULATIONS.
Gaming authorities to whom we or any of our subsidiaries are or may become
subject have the power to investigate any of our debt security holders,
including holders of the Notes. Generally, these gaming authorities may, in
their discretion, require a holder of any of our debt securities to file
applications, be investigated and be found suitable to own our debt securities,
and the costs of the investigation of such finding of suitability generally will
be the responsibility of such holder. Any person who fails or refuses to apply
for a finding of suitability or a license within a specified time after being
ordered to do so by such gaming authorities may be found unsuitable. In
addition, under certain circumstances, we have the right, at our option, to
cause a holder to dispose of our Notes or to redeem our Notes in order to comply
with gaming laws to which we are subject. See "Description of New
Notes--Required Regulatory Redemption."
AN ACTIVE TRADING MARKET MAY NOT DEVELOP FOR THE NOTES.
The New Notes are new issues of securities for which there is currently no
trading market. We do not intend to apply for listing of the New Notes on any
securities exchange or to seek approval for quotation through an automated
quotation system. Accordingly, there can be no assurance that an active market
will develop upon completion of the exchange offer or, if developed, that such
market will be sustained or as to the liquidity of any market. In addition, the
liquidity of the trading market in the New Notes, if developed, and the market
price quoted for the New Notes, may be adversely affected by changes in the
overall market for high yield securities and by changes in our financial
performance or prospects or in the financial performance or prospects of
companies in our industry generally.
WE MAY NOT HAVE THE ABILITY TO RAISE THE FUNDS NECESSARY TO FINANCE A CHANGE OF
CONTROL OFFER REQUIRED BY THE INDENTURE.
Upon the occurrence of certain specific kinds of change of control events
and a credit rating downgrade on the Notes within 90 days of any such change of
control event, we will be required to offer to repurchase all outstanding Notes.
However, it is possible that we will not have sufficient funds at such time to
make the required repurchase of the Notes or that restrictions in our existing
revolving credit facility, or our proposed amended and restated revolving credit
facility, or other agreements related to our indebtedness will not allow such
repurchase. See "Description of New Notes--Repurchase of Notes at the Option of
the Holder upon a Change of Control."
Our failure to repurchase the Notes would be a default under the indenture.
The occurrence of certain of the events that would require us to repurchase the
Notes may constitute a default under our existing revolving credit facility. If
we are required to make a change of control offer for the Notes, we also likely
will need to offer to repurchase our 9.000% senior subordinated notes, of which
an aggregate principal amount of $200.0 million is outstanding as of June 30,
2001, and our 8.625% senior subordinated notes, of which an aggregate principal
amount of $100.0 million is outstanding as of June 30, 2001. Future indebtedness
we incur may have similar provisions. We cannot assure you that sufficient funds
will be available when necessary to make any required purchases.
14
THE GUARANTEES MAY NOT BE ENFORCEABLE BECAUSE OF FRAUDULENT CONVEYANCE LAWS.
The obligation of each of the guarantors of the Notes may be subject to
review under state, federal or foreign fraudulent transfer laws. Under state and
federal laws, if a court, in a lawsuit by an unpaid creditor or representative
of creditors of a guarantor, such as a trustee in bankruptcy or such guarantor
as debtor-in possession, were to find that at the time such obligation was
incurred, such guarantor, among other things:
- did not receive fair consideration or reasonably equivalent value
therefore; and
- either
- was insolvent,
- was rendered insolvent,
- was engaged in a business or transaction for which its assets
constituted unreasonably small capital, or
- intended to incur, or believed that it would incur, debts beyond its
ability to pay as such debts matured,
such court could avoid such guarantor's obligation under its guarantee, and
direct the return of any payments made under the guarantee to such guarantor or
to a fund for the benefit of its creditors.
Moreover, regardless of the factors identified above, such court could avoid
such obligation, and direct such repayment, if it found that the obligation was
incurred with the intent to hinder, delay, or defraud such guarantor's
creditors. In that event, the holder of the Notes would have to look for
repayment to other guarantors whose guarantee obligations had not been avoided.
The measure of insolvency for purposes of the above will vary depending upon
the law of the jurisdiction being applied. Generally, however, an entity would
be considered insolvent:
- if the sum of its debts is greater than the fair value of all of its
property;
- if the present fair salable value of its assets is less than the amount
that will be required to pay its probable liability on its existing debts
as they become absolute and mature; or
- it could not pay its debts as they become due.
RISKS RELATED TO OUR BUSINESS
THE RESORT AND CASINO INDUSTRIES ARE HIGHLY COMPETITIVE, AND INCREASES IN
COMPETITION COULD ADVERSELY AFFECT OUR FINANCIAL PERFORMANCE.
The resort and casino industries are highly competitive. Our destination
casino resorts compete with other resorts and casinos, including land-based
casinos, riverboat, dockside and cruise ship casinos and other forms of gaming,
as well as other forms of entertainment. Our luxury resort hotels compete with
other resorts and hotels located in markets where we conduct business. If other
properties operate more successfully, if existing properties are enhanced or
expanded, or if additional hotels or casinos are established in and around the
markets where we conduct business, we may lose market share. In particular, the
expansion, upgrading or construction of competing resort or casino properties in
or near any market from which we attract or expect to attract a significant
number of customers could have a significant adverse effect on our business,
financial condition and results of operations.
A number of our competitors are larger and have greater financial and other
resources than us. In addition, a number of jurisdictions have recently
legalized gaming and other jurisdictions are considering the legalization of
gaming. This could open markets in which we currently compete to new entrants,
and could create new markets which may compete as tourist destinations. Our
gaming
15
operations compete, and will in the future compete, with all forms of existing
legalized gaming and with new forms of gaming that may be legalized in the
future. Our competitive position could be materially adversely affected by
larger competing companies, new entrants, new markets and new forms of gaming,
and our revenues could decline, harming our financial condition.
NEW PROJECTS AND EXPANSION AND RENOVATION EFFORTS ARE INHERENTLY SUBJECT TO
SIGNIFICANT DEVELOPMENT AND CONSTRUCTION RISKS.
We regularly evaluate potential development opportunities and engage in
expansion, development and renovation projects at properties that we develop or
operate, including expansions and upgrades at Atlantis. Each of these projects
will be subject to the many risks in expanding or renovating an existing
enterprise or developing new projects, including unanticipated design,
construction, regulatory, environmental and operating problems, and the
significant risks commonly associated with implementing an expansion strategy in
new markets. In particular, any such projects are subject to the risks
associated with the following:
- the availability of financing and the terms and covenants in our credit
facilities and other debt, including the Notes;
- shortages in materials;
- shortages of skilled labor or work stoppages;
- unforeseen construction, scheduling, engineering, environmental or
geological problems;
- weather interference, floods, fires or other casualty losses;
- the failure to obtain required licenses, permits or approvals; and
- unanticipated cost increases.
The anticipated costs and construction period for projects are based upon
budgets, conceptual design documents and construction schedule estimates
prepared by us in consultation with architects and contractors. The cost of any
project may vary from initial expectations, and we, or the owners of the
property, may have a limited amount of capital resources to fund cost overruns
on any project. If cost overruns cannot be financed on a timely basis, the
completion of one or more projects may be delayed until adequate funding is
available. The completion dates of development projects could also differ
significantly from expectations for construction-related or other reasons. We
cannot assure you that any project will be completed, if at all, on time or
within established budgets. Significant delays or cost overruns on projects
could have a material adverse effect on our business, financial condition or
results of operations.
In addition, although we design our projects for existing facilities to
minimize disruption of business operations, expansion and renovation projects
require, from time to time, portions of the existing operations to be closed or
disrupted. Any extended disruptions in our operations could have a material
adverse effect on our business, financial condition or results of operations.
IF WE ARE UNABLE TO FINANCE OUR EXPANSION, DEVELOPMENT AND RENOVATION PROJECTS
AS WELL AS CAPITAL EXPENDITURES THROUGH CASH FLOW AND BORROWINGS UNDER OUR
REVOLVING CREDIT FACILITY, OUR EXPANSION, DEVELOPMENT AND RENOVATION EFFORTS
COULD BE JEOPARDIZED.
If we are unable to finance existing or future projects with cash flow from
operations or borrowings, we will have to adopt one or more alternatives, such
as reducing or delaying planned expansion, development and renovation projects
and other capital expenditures, selling assets, restructuring indebtedness,
obtaining additional equity financing or joint venture partners, or modifying
our revolving credit facility. These sources of additional funds may not be
sufficient to finance existing or future projects, and other financing may not
be available on acceptable terms, in a timely manner or
16
at all. In addition, our existing indebtedness contains certain restrictions on
our ability to incur additional indebtedness. If we are unable to secure
additional financing, we could be forced to limit or expand expansion,
development or renovation projects, which may adversely affect our business,
financial condition and results of operations.
WE ARE SUBJECT TO EXTENSIVE GOVERNMENTAL GAMING REGULATION, WHICH MAY HARM OUR
BUSINESS.
Our operation of gaming facilities is subject to extensive governmental
regulations. Regulatory authorities typically require various registrations,
licenses, findings of suitability and approvals to be held by operators of
gaming facilities. The regulatory authorities in these jurisdictions generally
have broad discretion in the granting, renewal, suspension and revocation of
licenses and require that such registrations, licenses, findings and approvals
be renewed or updated periodically. We and our necessary key personnel are
currently qualified to do business in all the jurisdictions in which we operate.
We cannot assure you that any new or permanent licenses, permits or approvals
that may be required by us, our key employees and our partners, if applicable,
in the future will be granted or that our existing licenses, permits and
approvals will be renewed or will not be suspended or revoked in the future. The
failure to receive or renew licenses or the suspension or revocation of licenses
could harm our reputation and result in a loss of revenue, which could
materially adversely affect our financial condition and results of operations.
THE RECENT TERRORISTS' ATTACKS ON THE UNITED STATES ARE LIKELY TO NEGATIVELY
AFFECT OUR REVENUES AND PROFITS.
On September 11, 2001, the United States was attacked by terrorists using
hijacked jets. The effects of these events are likely to include a decline in
vacation travel, group conventions and tourism due to, among other things, fears
regarding additional acts of terrorism, as well as reduced operations by
airlines due to, among other things, decreased demands for air travel, new
security directives and increased costs. The magnitude and duration of these
effects is unknown and cannot be predicted. We have already experienced a
material decline in occupancy at our resorts and in particular many customers
have cancelled booked individual vacations and group conventions at Atlantis in
the coming months. Continued negative market conditions related to those
terrorist actions, any future occurrences of similar events, and potential
responsive action by the United States and other countries which perpetuates a
climate of war, could cause further existing and potential customers to delay
and cancel travel, convention and vacation plans. Our operating results are
being adversely effected and the duration and magnitude of this effect is
unknown.
OUR GAMING OPERATIONS ARE SUBJECT TO SIGNIFICANT TAXATION AND FEES THAT INCREASE
OUR COSTS.
Our gaming operations are subject to significant taxation and fees. Such
taxes and fees are subject to increase at any time. We pay substantial taxes and
fees with respect to our gaming operations in The Bahamas and will likely incur
significant taxes and fees in any other jurisdictions in which we conduct gaming
operations in the future. Any material increase in existing taxes and fees, the
adoption of new taxes or fees, or the loss or reduction of any existing or
future tax incentives, could have a material adverse effect on our
profitability.
OUR BUSINESS IS SEASONAL AND SEVERE WEATHER CONDITIONS CAN ADVERSELY AFFECT OUR
BUSINESS, RESULTS OF OPERATIONS OR FINANCIAL CONDITION, OR FURTHER INCREASE OUR
INSURANCE PREMIUMS.
Historically, our revenues and operating profits in The Bahamas have been
higher during the first calendar quarter, the prime tourist season, than in
successive quarters. Higher revenues and earnings are typically realized from
the Mauritius properties during the fourth quarter of the year and from Mohegan
Sun during the middle third of the year. If any of these properties were unable
to accommodate guests during such periods for any reason, including disruptions
caused by weather, our revenues and profits could be adversely affected.
17
The Bahamas and Mauritius are subject to tropical weather and storms, which,
if severe, could adversely affect our operations and tourism. Similarly,
inclement weather can adversely affect the revenues that we derive from Mohegan
Sun, as the principal means of transportation to this property is by automobile
or bus. In September 1999, our Paradise Island properties were hit by Hurricane
Floyd, a hurricane rated by the United States National Weather Service as a
category five, its highest rating. These properties suffered approximately
$45.0 million of property damage that took three months to repair. Although this
property damage was covered by our insurance policies, we incurred significant
increases in our property and windstorm insurance costs as a result. We cannot
assure you that our insurance costs will not further increase in the future or
that appropriate coverage will be available on acceptable terms or at all. In
addition, we cannot assure you that our business will not be adversely affected
by severe weather conditions in the future, which could cause significant damage
and suspension in service provided to our patrons and could harm our business,
results of operations or financial condition.
WORK STOPPAGES AND OTHER LABOR DISPUTES COULD HARM OUR FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
In The Bahamas, a union represents approximately 3,800 of our approximately
6,000 employees. We participate in an employer association whose existing
contract with the union expires January 1, 2003. Labor relations in The Bahamas
have been unstable at times over the last few years, and there have been
occasional work stoppages. As the country's largest private employer, we are
sometimes the target of labor disputes. Any protracted labor disputes or work
stoppages affecting any of the properties that we own or operate could reduce
our revenues. In addition, many of the public sector industries in The Bahamas,
such as electricity, telecommunication and airport facilities, are unionized.
The Bahamian government's labor relations with these unions have been unstable
at times and there have been work stoppages on occasion that have been
disruptive to our business.
LACK OF SUFFICIENT AIR SERVICE COULD ADVERSELY AFFECT OUR REVENUES AND PROFITS.
Most patrons of our resorts and hotels arrive by air. Although prior to the
events of September 11, 2001 we considered the level of air service to The
Bahamas, Mauritius, Dubai and the Maldives to be adequate, the interruption or
reduction of air service to any such locations could restrict the growth of our
businesses, negatively affect our competitive position and adversely affect our
revenues and profits. The magnitude and duration of the adverse impact of the
events of September 11, 2001 (and any subsequent events) is, at this time,
unknown.
WE ARE SUBJECT TO ENVIRONMENTAL, HEALTH AND SAFETY LAWS AND REGULATIONS AND OUR
NONCOMPLIANCE OR A SIGNIFICANT REGULATORY CHANGE COULD ADVERSELY AFFECT OUR
BUSINESS, RESULTS OF OPERATIONS OR FINANCIAL CONDITION.
Our operations are regulated under a number of federal, provincial, state
and local laws and regulations that govern, among other things, the handling of
waste materials, some of which are classified as hazardous materials, and the
discharge of hazardous materials into the environment. Our operations are
subject to stringent regulations relating to protection of the environment and
waste handling. In addition to liability for our own noncompliance, these laws
and regulations may expose us to liability for the noncompliance of other
parties, without regard to whether we were negligent. Sanctions for
noncompliance with applicable environmental laws and regulations may include
administrative, civil and criminal penalties, revocation of permits and
corrective action orders. Furthermore, we may be liable for costs for
environmental cleanup at currently or previously owned or operated properties or
off-site locations. Our failure to comply with existing laws or regulations, the
adoption of new laws or regulations with additional or more rigorous compliance
standards, or the more vigorous enforcement of environmental laws or regulations
could significantly harm our business by increasing our expenses and limiting
our future opportunities.
18
A SMALL NUMBER OF OUR SHAREHOLDERS CONTROL A SIGNIFICANT PERCENTAGE OF OUR
ORDINARY SHARES AND MAY BE ABLE TO CONTROL DECISIONS AFFECTING OUR COMPANY.
On July 3, 2001, we announced the restructuring of our majority shareholder,
SIIL, which is beneficially owned by World Leisure Group Limited, or WLG, and
Caledonia Investments plc, or Caledonia, and Kersaf Investments Limited, or
Kersaf. As a result of certain proxy arrangements granted in the restructuring,
WLG and Caledonia currently have the right to vote approximately 27% and 32%,
respectively, of our issued and outstanding ordinary shares, respectively.
Consequently, if WLG and Caledonia act together they will be able to effectively
control the outcome of substantially all matters requiring shareholder approval,
including the election of our directors, thereby controlling our management,
policies and business operations. For example, WLG and Caledonia could use this
voting power to block our ability to obtain certain types of financing for
development plans, renovations or expansions, which could materially adversely
affect our ability to develop our business and pursue our strategies. See "Major
Shareholders and Related Party Transactions."
YOU MAY HAVE DIFFICULTY ENFORCING JUDGMENTS AGAINST US OR OUR DIRECTORS OR
MANAGEMENT OUTSIDE THE UNITED STATES.
Sun International is a Bahamian international business company incorporated
under the laws of the Commonwealth of The Bahamas. Certain of our directors and
executive officers reside outside the United States. In addition, a substantial
portion of the assets of our directors and officers and of our assets is located
outside the United States. As a result, it may be difficult or impossible to:
- effect service of process within the United States upon us or these
persons; or
- enforce, against us or these persons, in the United States, court
judgments obtained in the United States courts, including judgments
relating to U.S. federal securities laws.
It is unlikely that Bahamian courts would entertain original actions against
Bahamian companies, their directors or officers predicated solely upon U.S.
federal securities laws. Furthermore, judgments based upon any civil liability
provisions of the U.S. federal securities laws are not directly enforceable in
The Bahamas. Rather, a lawsuit must be brought in The Bahamas on any such
judgment. Subject to consideration of private international law, in general, a
judgment obtained after due trial by a court of competent jurisdiction, which is
final and conclusive as to the issues in connection, is actionable in Bahamian
courts and is impeachable only upon the grounds of fraud, public policy and
natural justice.
WE MAY HAVE DIFFICULTY ENFORCING GAMING DEBTS IN CERTAIN FOREIGN JURISDICTIONS
OR IN CERTAIN JURISDICTIONS WITHIN THE UNITED STATES, WHICH COULD NEGATIVELY
AFFECT OUR REVENUES.
Gaming debts may not be legally enforced in certain foreign jurisdictions or
in certain jurisdictions within the United States. A substantial portion of the
customers at Atlantis and Mohegan Sun reside in the United States. As a result,
we and the Mohegan Tribe may be unable to collect gaming debts from patrons of
those casinos who reside in such jurisdictions, which could reduce our revenues.
REASSESSMENTS OF AND CHANGES TO OUR BUSINESS PLANS COULD HINDER OUR DEVELOPMENT
AND RESULT IN CHARGES OR FEES THAT COULD HARM OUR FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
We are regularly reviewing our development plans in light of a variety of
factors, including the availability of financing, regulatory and political
considerations, competition and other business and strategic concerns. As a
result of such assessments, our management may choose to change such plans,
which could result in failure to expand and could also cause us to incur fees or
charges. For example, in 2000, we agreed to terminate our agreement with
Starwood to acquire the Desert Inn Hotel and Casino in Las Vegas, which Starwood
later sold to a third party. Consequently, we were required to pay Starwood
$7.2 million and we incurred an additional $4.0 million of costs relating to the
Desert Inn transaction. We had plans for a 700-room hotel project at Atlantis
that we postponed, which caused the Bahamian government to suspend annual tax
incentives of approximately $3.0 million. Any future
19
changes in our plans could result in additional costs and fees which could harm
our financial condition and results of operations. We cannot assure you that we
will carry forward and complete any proposed business plans.
ENERGY PRICE INCREASES MAY ADVERSELY AFFECT OUR COST OF OPERATIONS AND OUR
REVENUES.
Our destination casino resorts use significant amounts of electricity,
natural gas and other forms of energy. Although we have not experienced
shortages of energy, substantial increases in the cost of electricity or natural
gas may negatively affect our operating results. The extent of any impact is
subject to the magnitude and duration of the energy price increases, but this
impact could be material. In addition, energy price increases in locations that
constitute a significant source of customers for our properties could result in
a decline in disposable income of potential customers and a decrease in
visitation and spending at our properties, which could negatively impact
revenues.
DETERIORATION IN GENERAL ECONOMIC AND MARKET CONDITIONS COULD ADVERSELY AFFECT
OUR BUSINESS.
Our business is affected by general economic and market conditions,
particularly in the United States and Europe. A large portion of our business at
Atlantis is generated by group convention sales and individual tour and travel.
A recession or economic slowdown could cause a reduction in group sales bookings
or the willingness or ability of tourists to book vacations at Atlantis, which
could adversely affect our operating results. We are already experiencing
reductions in bookings and cancellations in bookings as a consequence of the
events of September 11, 2001. The magnitude and duration of the adverse impact
of the events of September 11, 2001 (and any subsequent events) is, at this
time, unknown.
20
ORGANIZATIONAL STRUCTURE
The following chart summarizes our organizational structure:
[LOGO]
---------------------------
(1) Owns the Mauritius properties.
(2) Own and operate our Paradise Island operations, including Atlantis
and the Ocean Club.
(3) Own and operate our United States operations and interests, including
our 50% interest in TCA.
(4) Manages our luxury resort hotels, excluding the Ocean Club.
21
USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of the New Notes in
the exchange offer. In consideration for issuing the New Notes as contemplated
by this prospectus, we will receive the Old Notes in like principal amount. The
Old Notes surrendered in exchange for the New Notes will be retired and
cancelled. Accordingly, the issuance of the New Notes will not result in any
increase in our indebtedness or capital stock.
We used the net proceeds from the issuance of the Old Notes to repay a
portion of the indebtedness outstanding under our revolving credit facility.
As of June 30, 2001, the weighted average interest rate on indebtedness
outstanding under the revolving credit facility was 7.3%. Our revolving credit
facility matures on August 12, 2002. See "Description of Other Indebtedness."
CAPITALIZATION
The following table sets forth our cash position and our unaudited
historical consolidated capitalization:
- as of June 30, 2001; and
- as adjusted to give effect to the offering of the Old Notes and the use of
the net proceeds from the offering of the Old Notes, in each case as if
the offering of the Old Notes had occurred on June 30, 2001.
AS OF JUNE 30, 2001
------------------------
ACTUAL AS ADJUSTED
---------- -----------
(UNAUDITED)
(IN THOUSANDS)
Cash and cash equivalents................................... $ 34,099 $ 34,099
Restricted cash equivalents................................. 8,389 8,389
---------- ----------
Total cash and cash equivalents........................... $ 42,488 $ 42,488
========== ==========
Long-term debt (including current maturities)
Revolving credit facility (a)............................. $ 221,230 $ 27,230
9.000% senior subordinated notes due 2007 (b)............. 200,000 200,000
8.625% senior subordinated notes due 2007................. 100,000 100,000
8.875% senior subordinated notes due 2011................. -- 200,000
Capitalized leases and other debt......................... 697 697
---------- ----------
Total long-term debt.................................... 521,927 527,927
Shareholders' equity........................................ 698,813 698,813
---------- ----------
Total capitalization........................................ $1,220,740 $1,226,740
========== ==========
------------------------
(a) The revolving credit facility currently permits aggregate borrowings of
$373.0 million. As described under the section entitled "Use of Proceeds,"
we used the net proceeds from the issuance of the Old Notes to repay a
portion of the indebtedness outstanding under our revolving credit facility.
(b) Excludes $0.6 million unamortized discount.
22
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
The following unaudited pro forma consolidated financial statements are
based on our historical financial statements included in this prospectus,
adjusted to give effect to the disposition of Resorts Atlantic City and this
offering.
The unaudited pro forma consolidated statements of operations for the year
ended December 31, 2000, the six months ended June 30, 2000 and the six months
ended June 30, 2001 give effect to the disposition of Resorts Atlantic City and
this offering as though each such transaction had occurred on January 1, 2000.
The disposition of Resorts Atlantic City and this offering and the related
adjustments are described in the accompanying notes to unaudited pro forma
consolidated statements of operations. The pro forma adjustments are based on
available information and certain assumptions that we believe are reasonable.
The unaudited pro forma financial statements do not purport to represent what
our results of operations or financial condition would actually have been had
the disposition of Resorts Atlantic City and this offering in fact occurred on
such dates or to project our results of operations or financial condition for
any future period. The unaudited pro forma financial statements should be read
in conjunction with our historical consolidated financial statements included
elsewhere in this prospectus and Management's Discussion and Analysis of
Financial Condition and Results of Operations.
23
SUN INTERNATIONAL HOTELS LIMITED
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2000
RESORTS NOTES
ATLANTIC CITY OFFERING PRO FORMA
HISTORICAL ADJUSTMENTS ADJUSTMENTS AS ADJUSTED
---------- ------------- ----------- -----------
(IN THOUSANDS)
Revenues:
Gaming................................... $ 367,935 $(235,827)(a) $ -- $132,108
Rooms.................................... 194,008 (16,412)(a) -- 177,596
Food and beverage........................ 147,718 (26,039)(a) -- 121,679
Tour operations.......................... 33,192 -- -- 33,192
Real estate related...................... 108,650 -- -- 108,650
Management and other fees................ 35,763 -- -- 35,763
Other revenues........................... 49,208 (4,973)(a) -- 45,435
-- 1,200 (b) -- --
--------- --------- ------- --------
Gross revenues......................... 936,474 (282,051) -- 654,423
Less: promotional allowances............. (51,779) 25,288 (a) -- (26,491)
--------- --------- ------- --------
Net revenues........................... 884,695 (256,763) -- 627,932
--------- --------- ------- --------
Cost and expenses:
Gaming................................... 224,765 (158,708)(a) -- 66,057
Rooms.................................... 33,915 (4,186)(a) -- 29,729
Food and beverage........................ 98,288 (14,716)(a) -- 83,572
Other operating expenses................. 96,605 (25,667)(a) -- 70,938
Real estate related...................... 32,272 -- -- 32,272
Selling, general and administrative...... 103,465 (30,438)(a) -- 73,027
Tour operations.......................... 29,626 -- -- 29,626
Corporate expenses....................... 25,340 -- -- 25,340
Depreciation and amortization............ 60,223 (16,218)(a) -- 44,005
Purchase termination costs............... 11,202 -- -- 11,202
Transaction costs........................ 7,014 -- -- 7,014
Pre-opening expenses..................... 7,616 -- -- 7,616
Write-down of net assets held for sale... 229,208 (229,208)(c) -- --
--------- --------- ------- --------
Cost and expenses...................... 959,539 (479,141) -- 480,398
--------- --------- ------- --------
Income (loss) from operations.............. (74,844) 222,378 -- 147,534
--------- --------- ------- --------
Other income (expense):
Interest income.......................... 4,194 (1,557)(a) -- 4,824
-- 2,187 (d) -- --
Interest expense, net of
capitalization......................... (45,678) 10,067 (a) (2,316)(e) (37,927)
Equity in earnings of associated
companies.............................. 4,225 -- -- 4,225
Other, net............................... (688) 716 (a) -- 28
--------- --------- ------- --------
Other income (expense), net ..... (37,947) 11,413 (2,316) (28,850)
--------- --------- ------- --------
Income (loss) before provision for income
taxes.................................... (112,791) 233,791 (2,316) 118,684
Provision for income taxes................. (6,313) -- -- (6,313)
--------- --------- ------- --------
Net income (loss)...................... $(119,104) $ 233,791 $(2,316) $112,371
========= ========= ======= ========
The accompanying notes are an integral part of the unaudited pro forma
consolidated statements of operations.
24
SUN INTERNATIONAL HOTELS LIMITED
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
RESORTS NOTES
ATLANTIC CITY OFFERING PRO FORMA
HISTORICAL ADJUSTMENTS ADJUSTMENTS AS ADJUSTED
---------- ------------- ----------- -----------
(IN THOUSANDS)
Revenues:
Gaming................................... $188,086 $ (113,521)(a) $ -- $ 74,565
Rooms.................................... 109,415 (8,115)(a) -- 101,300
Food and beverage........................ 80,006 (12,898)(a) -- 67,108
Tour operations.......................... 15,926 -- -- 15,926
Real estate related...................... 96,091 -- -- 96,091
Management and other fees................ 16,670 -- -- 16,670
Other revenues........................... 23,214 (2,187)(a) -- 21,627
600 (b) --
-------- ----------- ------- --------
Gross revenues......................... 529,408 (136,121) -- 393,287
Less: promotional allowances............. (28,745) 12,209 -- (16,536)
-------- ----------- ------- --------
Net revenues........................... 500,663 (123,912) -- 376,751
-------- ----------- ------- --------
Cost and expenses:
Gaming................................... 113,337 (77,481)(a) -- 35,856
Rooms.................................... 17,587 (1,986)(a) -- 15,601
Food and beverage........................ 50,520 (7,750)(a) -- 42,770
Other operating expenses................. 46,970 (12,920)(a) -- 34,050
Real estate related...................... 25,894 -- -- 25,894
Selling, general and administrative...... 51,055 (15,183)(a) -- 35,872
Tour operations.......................... 14,447 -- -- 14,447
Corporate expenses....................... 12,192 -- -- 12,192
Depreciation and amortization............ 29,278 (8,529)(a) -- 20,749
Purchase termination costs............... 11,202 -- -- 11,202
Transaction costs........................ 7,014 -- -- 7,014
Pre-opening expenses..................... 690 -- -- 690
Write-down of net assets held for sale... -- -- -- --
-------- ----------- ------- --------
Cost and expenses...................... 380,186 (123,849) -- 256,337
-------- ----------- ------- --------
Income (loss) from operations.............. 120,477 (63) -- 120,414
-------- ----------- ------- --------
Other income (expense):
Interest income.......................... 1,972 (878)(a) -- 2,188
1,094 (d) -- --
Interest expense, net of
capitalization......................... (23,320) 4,872 (a) (1,158)(e) (19,606)
Equity in earnings of associated
companies.............................. 1,014 -- -- 1,014
-------- ----------- ------- --------
Other income (expense), net............ (20,334) 5,088 (1,158) (16,404)
-------- ----------- ------- --------
Income (loss) before provision for income
taxes.................................... 100,143 5,025 (1,158) 104,010
Provision for income taxes................. (2,333) -- -- (2,333)
-------- ----------- ------- --------
Net income (loss)...................... $ 97,810 $ 5,025 $(1,158) $101,677
======== =========== ======= ========
The accompanying notes are an integral part of the unaudited pro forma
consolidated statements of operations.
25
SUN INTERNATIONAL HOTELS LIMITED
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2001
RESORTS NOTES
ATLANTIC CITY OFFERING PRO FORMA
HISTORICAL ADJUSTMENTS ADJUSTMENTS AS ADJUSTED
---------- ------------- ----------- -----------
(IN THOUSANDS)
Revenues:
Gaming............................................. $ 73,819 $ -- $ -- $ 73,819
Rooms.............................................. 110,604 -- -- 110,604
Food and beverage.................................. 72,678 -- -- 72,678
Tour operations.................................... 20,711 -- -- 20,711
Real estate related................................ 7,757 -- -- 7,757
Management and other fees.......................... 18,323 -- -- 18,323
Other revenues..................................... 32,609 380 (b) -- 32,989
-------- ------- ------- --------
Gross revenues................................... 336,501 380 -- 336,881
Less: promotional allowances....................... (14,464) -- -- (14,464)
-------- ------- ------- --------
Net revenues..................................... 322,037 380 -- 322,417
-------- ------- ------- --------
Cost and expenses:
Gaming............................................. 35,345 -- -- 35,345
Rooms.............................................. 16,150 -- -- 16,150
Food and beverage.................................. 46,914 -- -- 46,914
Other operating expenses........................... 42,170 -- -- 42,170
Real estate related................................ 2,311 -- -- 2,311
Selling, general and administrative................ 42,628 -- -- 42,628
Tour operations.................................... 18,041 -- -- 18,041
Corporate expenses................................. 12,213 -- -- 12,213
Depreciation and amortization...................... 24,116 -- -- 24,116
Pre-opening expenses............................... 4,355 -- -- 4,355
-------- ------- ------- --------
Cost and expenses................................ 244,243 -- -- 244,243
-------- ------- ------- --------
Income (loss) from operations........................ 77,794 380 -- 78,174
-------- ------- ------- --------
Other income (expense):
Interest income.................................... 4,270 (1,965)(d) -- 2,305
Interest expense, net of capitalization............ (26,836) 3,101 (a) (1,720)(e) (25,455)
Equity in earnings of associated companies......... 2,804 -- -- 2,804
Other, net......................................... (60) -- -- (60)
-------- ------- ------- --------
Other income (expense), net...................... (19,822) 1,136 (1,720) (20,406)
-------- ------- ------- --------
Income (loss) before provision for income taxes...... 57,972 1,516 (1,720) 57,768
Provision for income taxes........................... (2,954) -- -- (2,954)
-------- ------- ------- --------
Net income (loss)................................ $ 55,018 $ 1,516 $(1,720) $ 54,814
======== ======= ======= ========
The accompanying notes are an integral part of the unaudited pro forma
consolidated statements of operations.
26
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(a) Represents the elimination of the results of operations of Resorts
Atlantic City, exclusive of Sun International intercompany charges.
(b) In connection with the sale of Resorts Atlantic City, we entered into a
lease agreement with Colony pursuant to which Colony is leasing from us
10 acres of undeveloped real estate adjacent to Resorts Atlantic City. We
receive $1.2 million per year from Colony under the lease agreement. For
the six months ended June 30, 2001 and the twelve months ended June 30,
2001, such amount is reduced by $0.2 million, the actual amount of lease
income we recorded from the date of the closing of the Resorts Atlantic
City sale (April 25, 2001) through June 30, 2001.
(c) As a result of entering into the agreement to sell Resorts Atlantic City
at a purchase price less than its carrying value, we incurred a loss of
$229.2 million in the fourth quarter of 2000. The adjustment represents
the elimination of such loss.
(d) As part of the purchase price for Resorts Atlantic City, Colony issued
to us a note in the amount of $17.5 million. Interest accrues on the note
at an annual rate of 12.5%. The adjustment represents interest income in
respect of the Colony note. For the six months ended June 30, 2001 and
the twelve months ended June 30, 2001, such amount is reduced by
(1) $2.7 million of interest earned on the purchase price paid by Colony
and (2) the actual amount of interest income we recorded in respect of
the Colony note from the date of the closing of the sale (April 25, 2001)
through June 30, 2001.
(e) Represents net increase in interest expense assuming an interest rate of
8 7/8% on the Old Notes offered and the application of the net proceeds
from the offering of the Old Notes to repay amounts outstanding under our
revolving credit facility. The weighted average cost of borrowing
increased as follows: from 8.3% for the twelve months ended December 31,
2000 to 8.9% on a pro forma basis for the same period; from 8.7% for the
six months ended June 30, 2000 to 8.9% on a pro forma basis for the same
period; and from 7.6% for the six months ended June 30, 2001 to 8.9% on a
pro forma basis for the same period. For each 0.125% change in the
interest rate payable on the Old Notes offered, annual interest expense
on the Old Notes would change by approximately $0.3 million.
DETAIL OF NET INCREASE IN INTEREST EXPENSE
YEAR ENDED SIX MONTHS SIX MONTHS
DECEMBER 31, ENDED JUNE 30, ENDED JUNE 30,
2000 2000 2001
------------ --------------- ---------------
(IN THOUSANDS)
Interest on Notes............................ $17,750 $8,875 $8,875
Non-cash increase in amortization associated
with deferred financing costs incurred in
connection with the issuance of the Notes,
amortized over 10 years.................... 600 300 300
------- ------ ------
Sub-total interest expense................. 18,350 9,175 9,175
Elimination of interest expense and
associated fees on borrowings estimated to
be repaid with the net proceeds of the
offering of the Old Notes.................. 16,034 8,017 7,455
------- ------ ------
Net increase in interest expense............. $ 2,316 $1,158 $1,720
======= ====== ======
27
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The following table contains selected financial and other data that has been
derived from the following sources:
- as of and for each of the years in the five-year period ended
December 31, 2000, from our audited consolidated financial statements
prepared in accordance with U.S. GAAP, certain of which are included in
this prospectus; and
- as of and for the six month periods ended June 30, 2000 and 2001, from our
unaudited interim consolidated financial statements, which include all
adjustments, consisting only of normal recurring adjustments, that in our
opinion are necessary for a fair presentation of our financial position
and results of operations as of and for such periods, included in this
prospectus.
The information set forth below is not necessarily indicative of future
operations and should be read in conjunction with Management's Discussion and
Analysis of Financial Condition and Results of Operations and other financial
information included elsewhere in this prospectus. Amounts are reported in U.S.
dollars and presented in accordance with U.S. GAAP.
SIX MONTHS ENDED
TWELVE MONTHS ENDED DECEMBER 31, JUNE 30,
-------------------------------------------------------------- -----------------------
1996 1997 1998 1999 2000 2000 2001
---------- ---------- ---------- ---------- ---------- ---------- ----------
(A)(E) (B)(E) (C)(D)(E) (D)(E)(F) (D)(E)(G) (UNAUDITED)
(IN THOUSANDS, EXCEPT RATIOS)
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Gross Revenues
Gaming..................... $ 77,342 $ 329,610 $ 319,342 $ 351,545 $ 367,935 $ 188,086 $ 73,819
Rooms...................... 67,243 96,846 94,942 164,831 194,008 109,415 110,604
Food and beverage.......... 60,372 91,329 86,593 137,100 147,718 80,006 72,678
Tour operations............ 15,048 15,403 14,757 28,714 33,192 15,926 20,711
Real estate related........ -- -- -- -- 108,650 96,091 7,757
Management fees............ 8,896 22,979 40,645 46,898 35,763 16,670 18,323
Other...................... 23,317 44,503 35,391 45,910 49,208 23,214 32,609
Insurance recovery......... -- -- -- 14,209 -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total gross revenues....... 252,218 600,670 591,670 789,207 936,474 529,408 336,501
Net revenues................. 240,116 558,912 550,878 738,967 884,695 500,663 322,037
Write-down of net assets held
for sale................... -- -- -- -- (229,208) -- --
Income (loss) from
operations................. 34,258 84,624 52,206 114,432 (74,844) 120,477 77,794
Equity in earnings from
associated companies....... 2,530 2,214 2,730 2,628 4,225 1,014 2,804
Net income (loss)............ $ 45,722 $ 83,008 $ 57,746 $ 69,822 $ (119,104) $ 97,810 $ 55,018
CONSOLIDATED BALANCE SHEET
DATA AT END OF PERIOD:
Cash and cash equivalents,
including restricted
cash....................... $ 122,864 $ 153,161 $ 63,123 $ 40,210 $ 24,148 $ 61,179 $ 42,488
Total assets................. 1,122,619 1,374,740 1,625,733 1,671,471 1,460,791 1,703,185 1,362,231
Long-term debt, including
current portion............ 263,365 412,615 568,134 579,133 669,138 510,418 521,304
Shareholders' equity......... 702,989 790,283 850,621 899,831 641,827 997,678 698,813
28
SIX MONTHS ENDED
TWELVE MONTHS ENDED DECEMBER 31, JUNE 30,
---------------------------------------------------- -------------------
1996 1997 1998 1999 2000 2000 2001
-------- -------- -------- -------- -------- -------- --------
(UNAUDITED)
OTHER FINANCIAL DATA:
EBITDA (h)................................ $45,700 $113,263 $110,248 $176,360 $164,041 $98,464 $100,819
Depreciation and amortization............. 11,442 28,639 32,081 57,230 60,223 29,278 24,116
Capital expenditures...................... 79,476 219,700 443,996 205,046 155,892 66,209 33,606
Cash interest expense
(income) (i)............................ (3,191) 21,781 30,703 49,784 48,439 23,325 21,833
Ratio of earnings to fixed charges (j).... 11.81x 3.65x 1.73x 2.32x -- 4.36x 2.98x
ATLANTIS OPERATING DATA:
Average number of rooms available......... 1,147 1,147 1,196 2,325 2,319 2,319 2,317
Average occupancy......................... 86.6% 87.7% 87.0% 81.4% 83.2% 88.2% 89.7%
Average daily room rate................... $158 $173 $187 $211 $242 $263 $273
Average number of slot machines........... N/A 801 823 979 975 978 959
Average win per slot machine per day...... N/A $128 $115 $136 $144 $154 $158
Average number of table games............. N/A 64 69 77 79 79 79
Average win per table game per day........ N/A $ 2,062 $ 1,987 $ 2,934 $ 2,813 $ 3,295 $ 3,239
--------------------------
(a) Mohegan Sun opened in October 1996. Accordingly, our results for the year
ended December 31, 1996 reflect our share of TCA's management fees from two
months of operations at this property.
(b) The results of operations for the year ended December 31, 1997 included a
gain of $13.4 million on the sale of our casino interest in France.
(c) The results of operations for the year ended December 31, 1998 include only
two weeks of operations of the Royal Towers on Paradise Island after its
opening in mid-December.
(d) The results of operations for the years ended December 31, 1998, 1999 and
2000 include pre-opening expenses of $26.0 million, $5.4 million, and
$7.6 million, respectively.
(e) We acquired SINA on December 16, 1996. Accordingly, the results of
operations for each of the years in the four-year period ended December 31,
2000 include results of operations related to SINA, including Resorts
Atlantic City. The results of operations for the last 16 days of 1996 were
considered immaterial and were not included in our results of operations for
that year.
(f) The results of operations for the year ended December 31, 1999 include
pre-opening expenses of $5.4 million related to a renovation completed at
Resorts Atlantic City in July 1999.
(g) The results of operations for the year ended December 31, 2000 include a
$229.2 million write-down of the carrying value of Resorts Atlantis City in
connection with the sale of the property and the related option to their
realizable value.
29
(h) EBITDA is defined as income from operations before interest, taxes,
depreciation and amortization, real estate related gains and non-recurring
items. The real estate related gains and non-recurring items excluded in the
calculation of EBITDA for the periods presented are set forth below:
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
---------------------------------------------------- -------------------
1996 1997 1998 1999 2000 2000 2001
-------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS)
Gain on real estate related
sales.......................... $ -- $ -- $ -- $ -- $(76,378) $(70,197) $(5,446)
Pre-opening expenses............. -- -- 25,961 5,398 7,616 690 4,355
Write-down of net assets held for
sale........................... -- -- -- -- 229,208 -- --
Gain on sale of airplane......... -- -- -- (700) -- -- --
Purchase termination costs....... -- -- -- -- 11,202 11,202 --
Transaction costs................ -- -- -- -- 7,014 7,014 --
------- ------- ------- ------ -------- -------- -------
Total............................ $ -- $ -- $25,961 $4,698 $178,662 $(51,291) $(1,091)
======= ======= ======= ====== ======== ======== =======
Purchase termination costs relate to the termination of our agreement to
acquire the Desert Inn. Transaction costs represent costs in connection with
our self-tender offer in June 2000 and the termination of the proposal by
SIIL to acquire all our ordinary shares it did not already own.
We believe that EBITDA provides useful information regarding our ability to
service our indebtedness but should not be considered in isolation from or
as a substitute for operating income or cash flow data prepared in
accordance with U.S. GAAP as an indicator of our operating performance or as
a measure of our liquidity.
(i) Cash interest expense includes capitalized interest and excludes
amortization of deferred financing costs and interest income.
(j) For purposes of computing the ratio of earnings to fixed charges, earnings
represents income from continuing operations before income taxes and
extraordinary items, plus fixed charges exclusive of capitalized interest,
cash distributions received from equity investees, and amortization of
capitalized interest, less equity earnings in equity investees. Fixed
charges consist of interest, whether expensed or capitalized, the interest
element of rentals, and amortization of deferred financing fees. For the
year ended December 31, 2000, fixed charges exceeded earnings available for
fixed charges by $123.7 million.
30
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
We are a leading developer and operator of premier casinos, resorts and
luxury hotels. We focus our operations on two distinct businesses: destination
casino resorts and luxury resort hotels.
In our destination casino resort business, we own and operate the Atlantis
resort located on Paradise Island, The Bahamas. We believe that the ocean-themed
Atlantis, which features the world's largest open-air aquarium and the largest
hotel and casino in the Caribbean market, is a "one of a kind" destination
resort. We also developed and receive certain revenue from the Mohegan Sun
casino in Uncasville, Connecticut, which we believe is one of the most
profitable casinos in the United States.
In our luxury resort hotel business, we operate eight beach resorts in
Mauritius, Dubai, the Maldives and The Bahamas.
OPERATING RESULTS
CONSOLIDATED RESULTS
SIX MONTHS ENDED JUNE 30, 2001 VS. SIX MONTHS ENDED JUNE 30, 2000. We
recorded net income of $55.0 million for the six months ended June 30, 2001
compared to net income of $97.8 million for the same period in 2000. Net income
in the first six months of 2001 included $4.4 million of pre-opening costs
related to the opening of the newly redesigned Ocean Club Golf Course and
Clubhouse and the design and development of an online gaming site. Also in the
first six months of 2001, we recorded a net gain of $5.4 million from the sale
of luxury homesites around the Ocean Club Golf Course. Net income in the first
six months of 2000 included $11.2 million of purchase termination costs related
to the cancellation of our agreement to acquire the Desert Inn, $7.0 million of
transaction costs incurred in connection with our self-tender offer in
June 2000 and the termination of the proposal by SIIL, our majority shareholder,
to acquire all our ordinary shares that it did not already own and $0.7 million
of pre-opening expenses primarily related to the Ocean Club Golf Course. Also in
the first six months of 2000, we recorded a net gain of $70.2 million from the
sale of homesites at Ocean Club Estates. Net revenues for the first six months
of 2001, excluding the sale of homesites at Ocean Club Estates, were
$314.3 million as compared to $404.6 million in 2000. Operating expenses
excluding non-recurring items were $237.6 million in the first six months of
2001 versus $335.4 million for the same period in 2000. Excluding non-recurring
items, we earned net income of $53.9 million in the first six months of 2001
compared to net income of $46.5 million in the first six months of 2000.
Our operating earnings decreased by $42.7 million for the first six months
of 2001 compared to the same period in 2000. This was due to a decrease of
$64.8 million in the gain realized on the sale of homesites, as a substantial
portion of the lots at Ocean Club Estates were sold in the first six months of
2000. This decrease was partially offset by improved performance at our Paradise
Island operations over the same period in 2000 as well as higher amounts due
from TCA related to Mohegan Sun. In addition, operating earnings in the first
six months of 2000 were impacted by the non-recurring purchase termination costs
and transaction costs described in the preceding paragraph. The sale of Resorts
Atlantic City did not have a significant impact on operating earnings as the
first six months of 2000 included operating earnings of only $0.7 million from
that property.
During the fourth quarter of 2000, we entered into a definitive agreement to
sell Resorts Atlantic City, which subsequently closed on April 25, 2001. As of
December 31, 2000, we reflected Resorts Atlantic City as an asset held for sale.
Accordingly, commencing January 1, 2001, the operations of Resorts Atlantic City
are no longer included in our consolidated financial statements. Pro forma net
income for the first six months of 2001 of $54.8 million, excluding
non-recurring items, compares to pro forma net income of $101.7 million for the
same period in 2000, giving effect to the sale of Resorts Atlantic City as
though it had occurred on January 1, 2000. On the same basis, pro forma net
revenues of $322.4 million in the first six months of 2001 compare to pro forma
net revenues of $376.8 million for the first six months of 2000, and pro forma
operating expenses of $244.2 million in the first six
31
months of 2001 compare to pro forma operating expenses of $256.3 million for the
comparable prior year period. See "Unaudited Pro Forma Consolidated Statements
of Operations."
2000 VS. 1999. We recorded a net loss of $119.1 million in 2000 compared to
net income of $69.8 million in 1999. The net loss in 2000 included a
$229.2 million write-down of the net assets related to the sale of Resorts
Atlantic City and the related option to their realizable value. Other
non-recurring items in 2000 included $11.2 million of purchase termination costs
related to the cancellation of our agreement to acquire the Desert Inn,
$7.0 million of transaction costs incurred in connection with our self-tender
offer in June 2000 and the termination of the proposal by our former majority
shareholder to acquire all of our outstanding ordinary shares that it did not
already own and $7.6 million of pre-opening expenses primarily related to the
expansion of the Ocean Club and the redesign of the Ocean Club Golf Course. Also
in 2000, we recorded a net gain of $76.4 million from the sale of homesites at
Ocean Club Estates. Net income in 1999 included the write-off of $5.4 million of
pre-opening expenses related to the 1999 renovation of Resorts Atlantic City.
Net revenues in 2000, excluding the sale of homesites at Ocean Club Estates,
were $776.0 million as compared to $739.0 million in 1999. Operating expenses
excluding non-recurring items were $672.2 million in 2000 versus $619.1 million
in 1999. Excluding non-recurring items, we earned net income of $59.6 million
and $75.2 million in 2000 and 1999, respectively.
1999 VS. 1998. We recorded net income of $69.8 million in 1999 compared to
$57.7 million in 1998. Net income in 1999 included the write-off of pre-opening
expenses of $5.4 million related to the renovation of Resorts Atlantic City. In
1998, net income included the write-off of pre-opening expenses of
$26.0 million related primarily to the opening in December 1998 of the Royal
Towers at Atlantis, a 1,200 room deluxe hotel, a new 100,000 square-foot casino
and entertainment center, expanded marine environments and other entertainment
attractions. Net revenues were $739.0 million in 1999 as compared to
$550.9 million in 1998, excluding income of $0.8 million from a real estate
lease in Atlantic City that was terminated in February 1998. Operating expenses
excluding the write-off of pre-opening expenses were $619.1 million in 1999
versus $472.7 million in 1998. This increase was largely due to the opening of
the Royal Towers. Excluding non-recurring items, we earned net income of
$75.2 million and $83.7 million in 1999 and 1998, respectively.
SEGMENT RESULTS
PARADISE ISLAND
SIX MONTHS ENDED JUNE 30, 2001 VS. SIX MONTHS ENDED JUNE 30, 2000. Our
Paradise Island operations generated income from operations, excluding the gain
on the sale of luxury homesites and pre-opening expenses of $70.0 million in the
first six months of 2001, as compared to $64.3 million in the first six months
of 2000. Our largest property on Paradise Island, Atlantis, achieved an average
occupancy of 89.7% for the first six months of 2001, compared to 88.2% in the
same period of 2000, and the average daily room rate increased from $263 for the
first six months of 2000 to $273 for the same period of 2001. Due to the
increase in average occupancy and average daily room rate, we experienced growth
in the contribution to operating earnings from our rooms and food and beverage
operations on Paradise Island. In addition, the overall contribution to
operating earnings from the casino increased in the first six months of 2001 as
compared to the first six months of 2000. These variances were partially offset
by increased selling, general and administrative costs. The increased earnings
at the casino amounted to $1.8 million as compared to the first six months of
2000, primarily due to a reduction in promotional allowances provided to casino
patrons. The amount of gaming win at the casino decreased by $0.8 million,
primarily as a result of lower table game win. The casino generated gaming win
of pro forma $73.8 million in the first six months of 2001 as compared to pro
forma $74.6 million in the first six months of 2000. The lower table game win
was due to a decrease of $10.5 million in table game drop (the dollar amount of
chips purchased) which was partially offset by the effect of an increase in hold
percentage (ratio of table game win to dollar amount of chips purchased) from
14.4% in the first six months of 2000 as compared to 14.7% in the first six
months of 2001. Slot win for the first six months of 2001 was flat compared to
the comparable prior year period
32
as an increase of $16.7 million in slot handle (dollar amount wagered) was
offset by a decrease in hold percentage from 9.8% in the first six months of
2000 to 9.3% for the same period in 2001.
Selling, general and administrative expenses decreased by $8.4 million for
the first six months of 2001 compared to the same period in 2000. This was
primarily due to the exclusion of the results of Resorts Atlantic City,
partially offset by an increase of $2.7 million in premiums we paid for property
and windstorm insurance due to reduced availability in the catastrophic
insurance market. In addition, we experienced an increase in costs related to
information technology and process re-engineering projects in an effort to
improve operational efficiency, computer systems and gathering of marketing
information.
Paradise Island operating income was also impacted by an increase in
depreciation expense for the first six months of 2001 as compared to the same
period in 2000. Depreciation expense increased by $2.9 million largely due to
the completion in December 2000 of the newly redesigned Ocean Club Golf
Clubhouse and the expansion of the Ocean Club in October 2000, which included
the addition of 50 luxury rooms and suites.
2000 VS. 1999. Our Paradise Island operations generated income from
operations of $85.7 million in 2000, as compared to $93.6 million in 1999.
Atlantis achieved an average occupancy of 83.2% in 2000, compared to 81.4% in
1999, and the average daily room rate increased by 15% from $211 in 1999 to $242
in 2000. While we experienced growth in the contribution to operating earnings
from the rooms and food and beverage operations on Paradise Island, a decrease
in earnings generated by the casino and increased selling, general and
administrative costs resulted in the lower income from operations. The casino
generated gaming win of $132.1 million in 2000 as compared to $130.5 million in
1999. While casino revenues increased slightly, the overall contribution to
operating earnings from the casino in 2000 decreased by $10.4 million as
compared to 1999. Higher casino operating expenses, which included promotional
and marketing costs, resulted in increased play in the casino, the effects of
which were not fully realized due to a poor hold percentage in table games
(ratio of table game win to dollar amount of chips purchased). In 2000, table
game win of $81.3 million, a decrease of $1.2 million (or 1.5%), was the result
of a decrease in hold percentage from 16.1% to 14.2%, which more than offset an
increase of $58.2 million (or 11.3%) in table game drop (the dollar amount of
chips purchased). Slot win of $50.8 million in 2000 reflected an increase of
$2.7 million (or 5.6%) as compared to 1999 due to an increase in handle (dollar
amount wagered) of $31.7 million (or 6.3%).
Selling, general and administrative expense increased by $8.3 million (or
14.4%) in 2000 as compared to 1999. We experienced increases in costs related to
information technology and process re-engineering projects as part of an effort
to improve operational efficiency, computer systems and gathering of marketing
information. Sales and marketing costs increased primarily due to more special
events on Paradise Island. We also incurred additional property and windstorm
insurance costs as a result of the effects of Hurricane Floyd in September 1999
as well as overall premium increases in the industry.
In the fourth quarter of 1999, operations at Atlantis were negatively
impacted by the effects of Hurricane Floyd which occurred in September 1999. We
recorded net revenues of $14.2 million from business interruption insurance
recoveries.
1999 VS. 1998. Our Paradise Island operations generated income from
operations of $93.6 million in 1999, as compared to $42.1 million in 1998.
Atlantis achieved an average occupancy of 81.4% in 1999 compared to 87.0% in
1998, while the average daily room rate increased by 13% from $187 in 1998 to
$211 in 1999. The number of room nights available at Atlantis nearly doubled
over 1998 as a result of the opening of the Royal Towers in December 1998. The
casino generated gaming win of $130.5 million in 1999 as compared to
$84.6 million in 1998. In 1999, table game win of $82.5 million, an increase of
$32.5 million from 1998, was a result of increased table game drop of
$177.7 million (or 52%), as well as increased hold percentage from 14.9% to
16.1%. Slot win of $48.1 million in 1999 reflected an increase from
$34.6 million achieved in 1998 as a result of an increase in handle of
$147.2 million (or 41.6%), partially offset by a reduction in hold percentage
from 9.8% to 9.7%.
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The increase in income from operations reflects a substantial contribution
in 1999 from Atlantis' new 1,200-room Royal Towers and 100,000 square foot
entertainment complex. As previously mentioned, in 1999 we recorded net revenues
of $14.2 million from business interruption insurance recoveries as a result of
the negative impact Hurricane Floyd had on operations at Atlantis in the fourth
quarter. During the fourth quarter of 1999, the average occupancy at Atlantis
was 74% with an average room rate of $204.
Other factors affecting Paradise Island income from operations were
increases in depreciation expense and management services fees paid to an
affiliate. Depreciation expense increased by $23.6 million largely due to the
opening of the Royal Towers and related facilities in December 1998. In 1999,
management fees paid to affiliates increased by approximately $4.3 million as a
result of changes in our management services agreement.
HARBORSIDE AT ATLANTIS
In 1999, through one of our Bahamian subsidiaries, we formed a joint venture
with Starwood to develop a timeshare project on Paradise Island, Harborside at
Atlantis, which is adjacent to Atlantis. Sun International and Starwood each
have a 50% interest in the joint venture. Construction of the first phase,
consisting of 82 two-bedroom units, began in 2000 and was completed in
February 2001. Sales of the timeshare units began in May 2000. In the first six
months of 2001, we earned $0.9 million in fees for marketing and development
services provided to Harborside at Atlantis. Equity earnings for the first six
months of 2001 were $1.4 million. In the first six months of 2000 we earned fees
of $1.3 million for development services provided to Harborside at Atlantis, and
we incurred an equity loss of $0.5 million in the period. In 2000, we earned
$3.4 million in fees for marketing and development services, and we realized
equity earnings of $0.8 million for the period.
CONNECTICUT
We have a 50% interest in, and are a managing partner of, TCA, a Connecticut
general partnership that developed and, until January 1, 2000, managed Mohegan
Sun, a casino and entertainment complex in Uncasville, Connecticut. TCA managed
Mohegan Sun from its opening in 1996 to January 2000 pursuant to a management
agreement and earned management fees based on a percentage of Mohegan Sun's
earnings after depreciation and interest.
In 1998, the Mohegan Tribe appointed TCA to develop its approximately
$960.0 million expansion of Mohegan Sun for a development fee of $14.0 million.
The expansion includes an additional 115,000 square foot casino, a 34-story,
1,200-room luxury hotel, an arena and additional retail space. The expanded
casino is expected to open in Fall 2001, and the remainder of the expansion is
expected to be opened in phases through April 2002. In addition, TCA and the
Mohegan Tribe entered into an agreement, which we refer to as the relinquishment
agreement, whereby, effective January 1, 2000, TCA turned over management of
Mohegan Sun (which comprises the existing operations and the proposed future
expansion) to the Mohegan Tribe. Pursuant to the relinquishment agreement, the
management agreement was terminated and, beginning January 1, 2000, TCA receives
payments of 5% of the gross revenues of Mohegan Sun, including the current and
any future expansions, for a 15-year period. The payments received by TCA under
the relinquishment agreement are currently less than was previously earned under
the management agreement. However, the relinquishment agreement will expire at
the end of 2014, whereas the management agreement would have expired in 2003.
SIX MONTHS ENDED JUNE 30, 2001 VS. SIX MONTHS ENDED JUNE 30, 2000. During
the first six months of 2001, Mohegan Sun generated gross revenues of
$422.5 million as compared to $399.4 million for the same period in 2000. Gross
revenues included gaming win of $372.7 million and $353.6 million for the first
six months of 2001 and 2000, respectively. We reported revenues pursuant to the
relinquishment agreement of $13.2 million and $10.0 million for the first six
months of 2001 and 2000, respectively. We also recorded development fees from
TCA of $1.0 million in the first six months of 2000.
34
2000 VS. 1999. During the fiscal year ended September 30, 2000, Mohegan Sun
generated gross revenues of $809.3 million as compared to $725.5 million for the
comparable period in 1999. Gross revenues included gaming win of $709.6 million
and $641.1 million for the fiscal year ended September 30, 2000 and for the
comparable period 1999, respectively. Slot win increased by $51.8 million to
$537.0 million in the fiscal year ended September 30, 2000 from $485.2 million
for the comparable period in 1999. This was largely due to an increase in handle
of $585.8 million to approximately $6.8 billion, and to a lesser extent, an
increase in hold percentage to 7.9% in the fiscal year ended September 30, 2000
from 7.8% for the comparable period in 1999. The gross win per slot machine per
day increased from $447 in 1999 to $488 in 2000. Table game win increased by
$12.9 million to $164.0 million for the fiscal year ended September 30, in 2000
from $151.1 million for the comparable period in 1999. This was primarily a
result of an increase in table game drop of $73.4 million (or 8.2%) while table
game hold percentage was virtually flat at approximately 17.0% in both the
fiscal year ended September 30, 2000 and for the comparable period in 1999.
In 2000, TCA received payments under the relinquishment agreement of
$41.0 million as compared to $59.6 million of management fees earned in 1999
under the former management agreement. We received payments from TCA of
$19.8 million and $32.6 million in 2000 and 1999, respectively. We also earned
development fees of $3.8 million and $6.7 million in 2000 and 1999,
respectively.
1999 VS. 1998. During the fiscal year ended September 30, 1999, Mohegan Sun
generated net revenues of $684.3 million as compared to $605.6 million for the
comparable period in 1998. Net revenues included gaming win of $653.4 million
and $576.7 million in the fiscal year ended September 30, 1999 and for the
comparable period in 1998, respectively. Slot win increased by $63.1 million to
$485.2 million in the fiscal year ended September 30, 1999 from $422.1 million
for the comparable period in 1998. This was due to an increase in handle of
$913.4 million to approximately $6.2 billion, partially offset by a slight
decrease in hold percentage. The gross win per slot machine per day increased
from $395 in the fiscal year ended September 30, 1998 to $447 for the comparable
period in 1999. Table game win increased by $7.8 million to $151.1 million in
the fiscal year ended September 30, 1999 from $143.3 million for the comparable
period in 1998. An increase in table game drop of $89.5 million (or 11.2%) was
partially offset by a decreased hold percentage, from 17.9% in the fiscal year
ended September 30, 1998 to 17% for the comparable period in 1999. Operating
earnings before bingo (which was not managed by TCA while the management
agreement was in place) increased by $9.6 million (or 4.8%) to $209.0 million in
the fiscal year ended September 30, 1999 from $199.4 million for the comparable
period in 1998.
TCA earned management fees of $59.6 million in 1999 as compared to
$53.7 million in 1998. We received payments from TCA of $32.6 million and
$34.6 million in 1999 and 1998, respectively. We also earned development fees of
$6.7 million in 1999.
SUN RESORTS LIMITED EQUITY OWNERSHIP
Through June 16, 2000, Sun International owned a 22.8% interest in Sun
Resorts Limited. Effective June 16, 2000, Sun Resorts Limited issued additional
shares of stock under a rights issue in which we did not participate,
effectively reducing our ownership interest to 20.4%. Sun Resorts Limited owns
five beach resort hotels in Mauritius and, until late 2000, owned one hotel in
the Comoro Islands. In November 2000, Sun Resorts Limited sold the property in
the Comoro Islands to an unaffiliated party. Equity earnings from Sun Resorts
Limited were $1.4 million and $1.5 million for the first six months of 2001 and
2000, respectively. Equity earnings from Sun Resorts Limited were $2.7 million,
$2.6 million and $3.4 million in 1998, 1999 and 2000, respectively.
MANAGED LUXURY RESORT HOTELS
In addition to our equity interest in Sun Resorts Limited, we have long-term
management contracts for the Mauritius properties owned by Sun Resorts Limited
that expire in 2008. We also manage the Royal Mirage Hotel, a 258-room beach
resort hotel on Jumeira Beach in Dubai, which
35
opened in August 1999. The Royal Mirage Hotel management contract expires
20 years from the date the property opened. We refer to the hotels in Mauritius,
the hotel in the Comoro Islands (prior to its disposition), and the Royal Mirage
Hotel, collectively, as the management properties.
SIX MONTHS ENDED JUNE 30, 2001 VS. SIX MONTHS ENDED JUNE 30, 2000. During
the first six months of 2001, the management properties generated revenues of
$65.2 million as compared to $68.8 million for the same period in 2000 and had
net income of $13.3 million in the first six months of 2001 compared to
$11.5 million for the same period in 2000. Our increased earnings from Sun
Resorts Limited were offset by the devaluation of the Mauritian Rupee relative
to the U.S. dollar. The increase in earnings, before the devaluation, resulted
from improved performance at the Mauritian properties, particularly Le Saint
Geran, a high-end luxury resort hotel, as well as from the disposition of the
property on the Comoro Islands (which incurred a loss in the first six months of
2000). Earnings at the Royal Mirage Hotel in Dubai increased by $1.8 million in
the first six months of 2001 compared to the prior year, as a result of
increased average occupancy and a higher average daily room rate. At the Royal
Mirage Hotel, the average occupancy and average daily room rate for the first
six months of 2001 were 85.1% and $252 as compared to 84.1% and $210 for the
same period in 2000. In the first six months of 2001, the average occupancy and
average daily room rate for the Mauritian properties were 77.9% and $161, as
compared to 83.7% and $159 for the same period of 2000.
We earned management fees from the management properties of $4.3 million and
$4.4 million for the first six months of 2001 and 2000, respectively. Our future
earnings from Sun Resorts Limited could be negatively impacted by any further
devaluation of the Mauritian Rupee relative to the U.S. dollar.
2000 VS. 1999. In 2000, the management properties generated revenues of
$133.7 million as compared to $92.9 million in 1999 and net income of
$23.8 million in 2000 compared to $12.4 million in 1999. The increased earnings
were largely a result of higher operating profits from Le Saint Geran, which
operated for a full year in 2000, whereas in 1999 the hotel was closed in April
for renovations and did not re-open until December 1999. In addition, as noted
above, the Royal Mirage Hotel in Dubai commenced operations in August 1999 and
thus operated for a full year in 2000 compared to four months in 1999. In 2000,
the average occupancy and average daily room rate for the Mauritian properties
were 83.1% and $160, as compared to 82.3% and $132 in 1999. At the Royal Mirage
Hotel in Dubai, the average occupancy and average daily room rate in 2000 were
81.7% and $202 as compared to 67.7% and $185 for its first four months of
operation in 1999.
In 2000, we earned management fees from the management properties of
$8.7 million as compared to $6.2 million in 1999. We also earned development
fees of $0.8 million in 1999 related to the renovation of Le Saint Geran.
1999 VS. 1998. In 1999, the management properties generated revenues of
$92.9 million as compared to $88.8 million in 1998 and net income of
$12.4 million in 1999 compared to $10.8 million in 1998. Increased revenues were
a result of the Royal Mirage Hotel in Dubai commencing operations in
August 1999, partially offset by a slight decrease in revenues earned in
Mauritius. Revenues from the Mauritian properties decreased in 1999 compared to
1998, primarily due to reduced revenues at Le Saint Geran, which closed in
April 1999 for renovations and did not reopen until December. Operating results
included approximately $4.6 million of costs associated with the closing and
re-opening of Le Saint Geran. Exclusive of Le Saint Geran, the other four hotels
in the Mauritius had aggregate increases in revenues and operating profits of
$9.0 million and $5.2 million, respectively. These results were partially offset
by reduced operating profits in the Comoro Islands. In 1999, the average
occupancy and average daily room rate for the Mauritian properties were 82.3%
and $136, as compared to 80% and $133 in 1998.
In 1999, we earned management fees from the management properties of
$6.2 million as compared to $5.9 million in 1998. We also earned $0.8 million of
development fees related to the renovation of Le Saint Geran in 1999 as compared
to $0.1 million in 1998.
36
OTHER FACTORS AFFECTING EARNINGS
SIX MONTHS ENDED JUNE 30, 2001 VS. SIX MONTHS ENDED JUNE 30, 2000. In the
first six months of 2001, non-recurring items included a gain of $5.4 million
from the sale of luxury homesites at Ocean Club Estates. For the same period of
2000, the gain on the sale of homesites was $70.2 million. During 2000, we
completed the development of the infrastructure for Ocean Club Estates. Of the
19 lots remaining as of December 31, 2000, six lots were sold during the first
six months of 2001. The first 90 of these lots were sold during the first six
months of 2000.
In addition, non-recurring expenses in the first six months of 2001 included
$4.4 million of pre-opening expenses as compared to $0.7 million in the same
period of 2000. In 2001, these cost related to the opening of the newly
redesigned Ocean Club Golf Course and Clubhouse and the design and development
of an online gaming site, while in 2000 the pre-opening expenses related solely
to the re-opening of the golf course. For the first six months of 2000,
non-recurring expenses included purchase termination costs of $11.2 million
related to the cancellation of our agreement to acquire the Desert Inn from
Starwood. These costs included $7.2 million paid to Starwood pursuant to the
terms of cancelling the agreement. Also in 2000, we incurred $7.0 million of
transaction costs in connection with our self-tender offer in June 2000 and the
termination of the proposal by SIIL to acquire all our ordinary shares that it
did not already own.
Depreciation and amortization for the first six months of 2001 decreased by
$5.2 million as compared to the same period in 2000. The increase in
depreciation expense at our Paradise Island operations was more than offset by
the elimination of depreciation and amortization expense at Resorts Atlantic
City. Depreciation and amortization expense at Resorts Atlantic City was
$8.5 million in the first six months of 2000.
In the first six months of 2001, interest income was $4.3 million as
compared to $2.0 million for the same period in 2000. The increase was primarily
due to $2.7 million of interest income related to the sale of Resorts Atlantic
City.
Interest expense, net of capitalized interest, in the first six months of
2001 was $26.8 million as compared to $23.3 million for the same period in 2000.
Interest costs capitalized during the first six months of 2001 were
$0.8 million as compared to $4.5 million in the same period in 2000.
2000 VS 1999. In 2000, non-recurring items included a gain of
$76.4 million from the sale of 102 of the 121 homesites at Ocean Club Estates.
Non-recurring expenses in 2000 included a write-down of the carrying value
of Resorts Atlantic City and the related option to their realizable value. As a
result of entering into the agreement to sell Resorts Atlantic City at a
purchase price less than its carrying value, we recorded a loss of
$229.2 million in the fourth quarter of 2000. We also incurred purchase
termination costs of $11.2 million in 2000 related to the cancellation of our
agreement to acquire the Desert Inn from Starwood. These costs included
$7.2 million paid to Starwood pursuant to the terms of the purchase agreement
for the property. Also in 2000, we incurred $7.0 million of transaction costs in
connection with our June 2000 self-tender offer and the termination of the
proposal by SIIL to acquire all our ordinary shares that it did not already own.
Pre-opening expenses were $7.6 million in 2000 as compared to $5.4 million in
1999. These costs in 2000 related primarily to the expansion of the Ocean Club
and the newly redesigned Ocean Club Golf Course. In 1999, all of the pre-opening
expenses related to the opening of the newly renovated Resorts Atlantic City.
General corporate expenses increased by $9.0 million (or 55%) to
$25.3 million in 2000 as compared to $16.3 million in 1999. The increase was
largely due to higher information technology costs incurred in connection with
the enhancement of computer software programs and improving the overall
structure of our computer systems. Also contributing to the increase in
corporate expenses, to a lesser extent, were new project costs incurred as we
continue to research the possibility of new investment and/or development
opportunities. Additionally, corporate expenses were affected by slight
increases in corporate marketing and public relations costs as well as increased
exchange losses on foreign currency transactions.
37
Other segments in 2000 contributed $1.7 million to consolidated operating
income as compared to $2.3 million in 1999. In 2000, $3.0 million was received
from Kersaf Investments Limited, or Kersaf, pursuant to a long-term contract.
This payment was established at $2.4 million in 1994 and increases at a rate of
3.0% per year and has been paid annually. These revenues were partially offset
by costs relating to undeveloped real estate owned in Atlantic City, primarily
real estate taxes. Other segments in 1999 include net revenues of $2.9 million
received from Kersaf, a $1.0 million gain from the cancellation of notes that
were previously included in long-term debt and $0.6 million received as a final
installment on the 1996 sale of a management contract. These items were
partially offset by costs incurred as part of our Year 2000 information
technology compliance program as well as real estate taxes.
In 2000, interest income was $4.2 million as compared to $12.7 million in
1999. In connection with the development of Mohegan Sun in 1996, we held
subordinated notes issued by the Mohegan Tribal Gaming Authority. The aggregate
principal balance of these notes, including accrued interest, was $94.1 million
at December 31, 1999 at which time they were repaid in full. Interest earned in
1999 on the subordinated notes amounted to $9.9 million.
Interest expense, net of capitalized interest, in 2000 was lower than the
previous year by $5.0 million. Interest costs capitalized during 2000 amounted
to $11.1 million as compared to $4.9 million in 1999.
1999 VS. 1998. In 1999, pre-opening expenses were $5.4 million compared to
$26.0 million in 1998. All of the pre-opening expenses in 1999 related to the
opening of the newly renovated Resorts Atlantic City in July. In 1998,
pre-opening expenses related to the opening of the Royal Towers amounted to
$25.3 million. These represented non-recurring charges specifically associated
with the expansion and included payroll during the training period,
non-recurring marketing of the new resort and the cost of an opening promotion.
In addition, in 1998, $0.6 million of pre-opening expenses were incurred related
to the establishment of a new tour operation subsidiary in France. Such costs
were not related to our ongoing operations and included no allocations of
operating department costs.
General corporate expenses were $16.9 million in 1999 as compared to
$19.5 million in 1998. The decrease was due primarily to lower payroll and
related costs as no bonuses were paid in 1999 under our executive incentive
bonus plan. Bonuses under this plan are based on our meeting certain earnings
per share thresholds.
Other segments in 1999 included net revenues of $2.9 million received from
Kersaf. Other segments contributed $2.3 million to consolidated operating income
as compared to $0.6 million in 1998. In 1999, $1.0 million of notes that were
previously included in long-term debt were cancelled. Also in 1999, we received
$0.6 million as a final installment on the 1996 sale of a management contract.
Costs related to our Year 2000 compliance were lower by $0.5 million in 1999
compared to 1998. Other segments in 1998 included $0.8 million rental revenue
from a real estate lease which was terminated in February 1998.
Interest expense of $50.7 million in 1999 was higher than the previous year
by $46.2 million. In 1999, the amount of capitalized interest was $4.9 million
compared to $35.3 million in 1998. Also in 1999, interest costs on our revolving
credit facility were $18.3 million higher than 1998 due to higher average
borrowing levels.
RESORTS ATLANTIC CITY
During the fourth quarter of 2000, we entered into a definitive agreement to
sell Resorts Atlantic City to Colony. The sale closed on April 25, 2001. As of
December 31, 2000, we reflected Resorts Atlantic City as an asset held for sale.
Accordingly, as of January 1, 2001, the operations of Resorts
38
Atlantic City are no longer included in our consolidated financial statements.
See "Liquidity, Capital Resources and Capital Spending."
2000 VS. 1999. We operated in Atlantic City, New Jersey through our wholly
owned hotel and casino, Resorts Atlantic City, until the closing of the sale to
Colony in April 2001. In 2000, Resorts Atlantic City generated income from
operations of $7.6 million as compared to a loss of $0.3 million in 1999. The
increase in operating earnings was a result of increased earnings from the
casino. Net revenues in 2000 included gaming win of $235.8 million, an increase
of $14.8 million (or 6.7%) from gaming win of $221.0 million in 1999. Table game
revenues in 2000 increased by $8.2 million (or 12.7%) primarily due to an
increase in hold percentage to 15.5% from 14.1% in 1999 and to a lesser extent
an increase of $12.2 million (or 2.7%) in table game drop as compared to 1999.
Slot revenues in 2000 increased by $6.1 million (or 3.9%) compared to 1999 due
to an increase in slot handle of $241.1 million (or 14.3%), partially offset by
a decrease in hold percentage to 8.3% in 2000 from 9.2% in 1999. The average
number of slot units in operation during the year 2000 was 2,298 as compared to
2,033 in 1999. Commencing in February 1999, we had taken out of service or
removed from the floor as many as 800 slot units at a time during the renovation
of Resorts Atlantic City, which was completed in early July 1999. Gaming costs
and expenses in 2000 increased by $6.0 million (or 3.8%) as compared to 1999.
This represented higher costs attributable to increased gaming revenues compared
to the prior year, principally promotional expenses, labor costs and casino win
tax. Partially offsetting the increased earnings from the casino was a reduction
in other casino and hotel revenues compared to the prior year. This was mainly
due to decreased entertainment revenues as there were fewer headliner acts at
Resorts Atlantic City in 2000 compared to 1999.
1999 VS. 1998. In 1999, Resorts Atlantic City generated net revenues of
$243.1 million as compared to $260.7 million in 1998. Net revenues in 1999
included gaming win of $221.0 million, a decrease of $13.7 million (or 5.8%)
from gaming win of $234.7 million in 1998. Slot revenues decreased by
$15.7 million (or 9.2%) mainly due to a decrease in handle of $138.9 million (or
7.6%). As a result of the slot units taken out of service in 1999 during the
renovation of Resorts Atlantic City, there was an average of 2,033 slot machines
in service during the year 1999 compared to 2,253 in 1998. The lower slot
revenues were partially offset by an increase in table game revenues of
$2.2 million (or 3.6%) over 1998. This was primarily due to an increase in table
game drop of $39.2 million (or 9.4%) which was partially offset by a reduction
in hold percentage to 14.1% in 1999 from 14.9% in 1998. The property also
experienced slight decreases in rooms and food and beverage revenues in 1999 as
a result of the renovation. Throughout the year, in order to complete the
renovation of its existing hotel rooms, Resorts Atlantic City took out of
service an average of 45 rooms of its inventory of 658. Upon completion of the
renovation, the number of available rooms decreased to 644 compared to 662 in
1998. The decrease in other casino and hotel revenues was primarily due to lower
complimentary entertainment revenues. With the availability of Club 1133, an
entertainment lounge which offered free admission to patrons, there were fewer
headliner shows in the main theater. Operating earnings decreased by
$20.2 million. While gaming revenues were down $13.7 million for the year 1999,
gaming expense increased by $5.5 million. This was primarily due to increased
promotional costs. The effect of fewer slot machines on the floor and lower hold
percentage on table games had an unfavorable impact on casino revenues.
Therefore, the property was not able to fully realize the effects of the
increased promotional costs. Partially offsetting these unfavorable variances
was a reduction in casino win tax which is based on a percentage of casino win.
SEASONALITY
Our business has historically been seasonal, with the largest number of
patrons visiting Atlantis, our largest resort, in the first quarter of the year,
the prime tourist season. Accordingly, our revenues and operating profits have
historically been higher during the first calendar quarter than in successive
39
quarters. Higher revenues and earnings are typically realized from the Mauritius
properties during the fourth quarter of the year and from Mohegan Sun during the
middle third of the year.
LIQUIDITY, CAPITAL RESOURCES AND CAPITAL SPENDING
At June 30, 2001, our working capital was $6.4 million. Current liabilities
included $2.9 million in liabilities related to construction projects on
Paradise Island. At June 30, 2001, unrestricted cash and cash equivalents were
$34.1 million. During the first six months of 2001, we generated $83.4 million
in operating cash flow.
On April 25, 2001, we sold Resorts Atlantic City and certain related assets
to an affiliate of
Colony Capital LLC, which we refer to as Colony, for a purchase price of
approximately $144.8 million. In addition, we granted Colony a two-year option
to acquire certain undeveloped real estate owned by us, adjacent to Resorts
Atlantic City, for an additional $40.0 million, which option can be extended for
an additional two years under certain circumstances. To facilitate Colony's
financing, we lent an affiliate of Colony $17.5 million toward the purchase
price of Resorts Atlantic City in exchange for an unsecured note bearing
interest at a rate of 12.5% per year. Interest is payable semi-annually,
one-half in cash and one-half in additional notes. The principal balance and all
outstanding interest of the note and the additional notes is due in April 2008.
The balance of the purchase price was paid in cash. Net assets held for sale on
the accompanying consolidated balance sheet as of December 31, 2000, represent
the adjusted book value of the assets disposed of in the Resorts Atlantic City
sale. The net cash proceeds received from this transaction were used to reduce
the amount of borrowings outstanding under our revolving credit facility.
Our revolving credit facility previously allowed for maximum borrowings of
up to $500.0 million, such amount to be reduced by $125.0 million on August 12,
2001. In connection with the sale of Resorts Atlantic City and the related
option in January 2001, the revolving credit facility was amended. As part of
the amendment, in lieu of the originally scheduled $125.0 million reduction, on
April 25, 2001, the maximum amount of borrowings available under the revolving
credit facility was reduced by $127.0 million, the net cash proceeds received in
the Resorts Atlantic City sale. Accordingly, the revolving credit facility now
provides for total aggregate borrowings of up to $373.0 million. In addition, if
the Atlantic City option is exercised on or before August 12, 2001, the amount
of borrowings available under the revolving credit facility will be further
reduced by the net cash proceeds we receive. As of June 30, 2001, borrowings
under the revolving credit facility totaled $221.2 million. After giving effect
to the offering of the Old Notes, we expect such borrowings to be approximately
$27.2 million. See "Capitalization."
We are currently engaged in discussions with various lenders to amend and
restate our existing revolving credit facility, which expires on August 12,
2002.
In 2001, we expect to incur approximately $65.0 million in capital
expenditures on our Paradise Island properties, including approximately
$20.0 million to complete renovations at Atlantis and $14.0 million of capital
expenditures approved in prior periods. These renovations will include the
renovation of approximately 450 rooms in the Coral Towers, as well as
improvements to certain public spaces.
During the second six months of 2000, we completed a maintenance capital
expenditure program of approximately $20 million at Atlantis' Beach Tower. This
program included the renovation of all of the Beach Tower's 423 rooms and
improvements to certain public spaces.
During 2000, we also completed the redevelopment of the Ocean Club Golf
Course, including a new clubhouse, and developed the infrastructure to support
the Ocean Club Estates. Also during 2000, we completed an addition to the Ocean
Club. The addition comprised 50 luxury rooms, including ten deluxe suites, as
well as a new beachfront restaurant and significant enhancements to the existing
pool
40
and garden areas. The cost of developing the golf course, the infrastructure at
Ocean Club Estates and the addition to the Ocean Club was approximately
$113.8 million. As of December 31, 2000, 102 of the 121 available luxury
homesites had been sold and we realized $108.7 million in gross proceeds. We
sold an additional six of these properties in the first six months of 2001 for
gross proceeds of $7.8 million.
In June 2000, we purchased 5,000,000 of our ordinary shares at $24 per share
pursuant to our self-tender offer for an aggregate purchase price of
$120.0 million. The self-tender offer was financed with borrowings under our
revolving credit facility.
We believe that available cash on hand at June 30, 2001, combined with funds
generated from operations, funds currently available under our revolving credit
facility, the net proceeds from this offering and funds expected to be available
under our proposed amended and restated revolving credit facility will be
sufficient to finance our planned operating and development activities for at
least the next twelve months.
OTHER MATTERS
NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board, or FASB, issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities," subsequently amended by FASB Statement
No. 137 and FASB Statement No. 138. SFAS 133, as amended, is effective for
fiscal years beginning after June 15, 2000. SFAS 133 requires that every
derivative instrument be recorded in the balance sheet as either an asset or
liability measured at its fair value. Changes in the derivative's fair values
will be recognized in income unless specific hedge accounting criteria are met.
We adopted SFAS 133, as amended, beginning January 1, 2001, and do not
anticipate that it will have a material impact on our consolidated financial
statements.
In June 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets"
(SFAS 142). SFAS 142 establishes financial accounting and reporting standards
requiring that goodwill (and other intangibles with indefinite lives) will no
longer be amortized to income, but rather evaluated periodically for impairment.
SFAS 142 requires that companies discontinue amortizing existing goodwill as of
their fiscal years commencing after December 15, 2001. As the Company does not
currently have any goodwill or intangible assets, adoption of SFAS 142 will not
have a material financial statement impact.
41
BUSINESS
BUSINESS OVERVIEW
We are a leading developer and operator of premier casinos, resorts and
luxury hotels. We focus our operations on two distinct businesses: destination
casino resorts and luxury resort hotels.
In our destination casino resort business, we own and operate the Atlantis
resort located on Paradise Island, The Bahamas. We believe that the ocean-themed
Atlantis, which features the world's largest open-air aquarium and the largest
hotel and casino in the Caribbean market, is a "one of a kind" destination
resort. We also developed and receive certain revenue from the Mohegan Sun
casino in Uncasville, Connecticut, which we believe is one of the most
profitable casinos in the United States.
In our luxury resort hotel business, we operate eight beach resorts in
Mauritius, Dubai, the Maldives and The Bahamas.
BUSINESS STRATEGY AND COMPETITIVE STRENGTHS
Our strategy is to develop and manage premier, "one of a kind" destination
casino resorts and luxury resort hotels through direct ownership, joint ventures
or other contractual arrangements. We believe our business infrastructure,
including our development and marketing expertise, marketing programs and tour
and travel distribution channels will enable us to leverage and expand our
business in existing and new markets.
UNIQUE DESTINATION CASINO RESORTS AND LUXURY RESORT HOTELS. Within each of
our existing and target markets, we seek to own or operate "must see" casino
resort properties. To implement this strategy, we seek to develop properties
that are distinctively themed and provide customers with a total vacation
experience that includes superior room accommodations, gaming facilities, a
variety of entertainment options and other amenities. For example, Atlantis
features a 34-acre marine life habitat that includes over 100 species of marine
life, waterfalls, lagoons, adventure walks, waterslides and "The Dig," an area
through which visitors can walk surrounded by sharks, numerous species of
tropical fish, sea turtles, stingrays and other marine life. We believe Mohegan
Sun's Native American theme and unique architectural features and decor have
helped it become one of the most profitable casinos in the United States. Our
collection of luxury resort hotels includes architecturally unique resorts in
prime beach locations, two of which recently have been rated as among the
world's finest leisure hotels in CONDE NAST TRAVELLER magazine.
SIGNIFICANT RECENT CAPITAL EXPENDITURES. Most of the properties we develop,
own or operate have been constructed within the past several years or have
recently undergone significant expansions, renovations or upgrades. Since
acquiring our Paradise Island properties in 1994, we have invested approximately
$1.0 billion to create Atlantis and the Ocean Club, which we believe are among
the world's finest destination resorts. This investment includes an
approximately $640.0 million expansion in December 1998 that effectively doubled
the size of Atlantis. By the end of 2001, we estimate that we will have either
built or upgraded approximately 95% of Atlantis' facilities within the last
three years. We estimate the Mohegan Tribe has invested approximately
$1.4 billion in Mohegan Sun since 1995, including the $960.0 million expansion
in progress. Most of the luxury resort hotels in our collection have either been
recently built or significantly renovated, including Le Saint Geran, the Royal
Mirage Hotel and the Kanuhura Resort & Spa.
LOCATIONS IN ATTRACTIVE MARKETS WITH SIGNIFICANT BARRIERS TO ENTRY. Our
existing destination casino resort businesses operate in attractive markets with
significant barriers to entry. These barriers include, among other things, scale
of properties, agreements with local and state governments (including certain
exclusivity arrangements), and limited availability of development sites. For
example, we own approximately 521 acres on Paradise Island, representing almost
65% of the island. The Bahamian government has agreed it will not grant any new
casino licenses on Paradise Island or New Providence
42
until 2013, subject to certain exceptions. In Connecticut, under the
tribal-state compact between the Mohegan Tribe and the State of Connecticut,
Mohegan Sun is subject to a 25% gaming fee on slot revenues payable to the State
so long as the State does not issue any further licenses for gaming operations
with slot machines or other commercial casino games (other than to a Native
American tribe on Native American land). During 2000, Connecticut revenues from
such fees from Mohegan Sun and the other Native American casino in the State
with similar tribal-compact provisions totaled an aggregate of $327.0 million,
representing its fourth largest source of revenue.
STRONG CASH FLOW. We believe our properties will continue to generate
strong cash flow. From 1996 to 2000, pro forma for the disposition of Resorts
Atlantic City, our net revenues increased from $240.1 million to $519.3 million
(excluding revenue related to the sale of lots at Ocean Club Estates) and our
EBITDA (defined as income from operations before interest, taxes, depreciation
and amortization, real estate related gains and non-recurring items) increased
from $45.7 million to $141.0 million. Our cash flow is favorably impacted by a
number of factors, including:
- We are not subject to corporate income tax on our operations in The
Bahamas, which generate a substantial portion of our income.
- As of June 30, 2001, SINA had net operating losses that we believe will be
available to offset a significant portion of SINA's future income in the
United States.
- Our revenue from Mohegan Sun and our luxury resort hotel management
contracts do not require us to make any material capital expenditures.
- We believe the current expansion at Mohegan Sun will significantly
increase revenues at the property.
PROVEN TRACK RECORD OF DEVELOPING AND OPERATING DESTINATION CASINO
RESORTS. Our senior management has overseen our approximately $1.0 billion
expansion and renovation of our Paradise Island properties and the development
of the $1.4 billion Mohegan Sun, including the $960.0 million expansion in
progress. Solomon Kerzner, our Chairman and Chief Executive Officer, has over
34 years of experience developing destination casino resorts and luxury resort
hotels. Mr. Kerzner is responsible for the development of 21 hotels and founded
southern Africa's two largest hotel groups, Southern Sun Hotels and Sun
International South Africa. Mr. Kerzner's accomplishments include Atlantis and
our other Paradise Island properties, Mohegan Sun and Sun City, a resort complex
in South Africa featuring The Palace of the Lost City.
EXTENSIVE MANAGEMENT EXPERIENCE IN DEVELOPING AND OPERATING LUXURY RESORT
HOTELS. Our management team has successfully developed and operated our Indian
Ocean properties in Mauritius, starting with Mr. Kerzner's opening of Le Saint
Geran Hotel in 1975. Our luxury resort hotels are developed on prime beach
locations, each uniquely designed to complement its surroundings. As part of our
philosophy, we seek to offer our customers the highest level of amenities, such
as restaurants by Jean-Georges Vongerichten and Alain Ducasse, and spas by
Mandara and Givenchy. Since 1995, our luxury resort hotel business revenues have
increased from $73.0 million to $149.8 million, an increase of 105%. For the
twelve months ended June 30, 2001, the Ocean Club achieved an average occupancy
of 71% and an average daily room rate of $589, a substantial increase from the
1993 average occupancy of 69% and average daily room rate of $242 under prior
management. The Royal Mirage Hotel in Dubai has posted strong results since
opening in 1999, achieving an 82% average occupancy and average daily room rate
of $202 during 2000. We seek to expand our luxury resort hotel business into
existing and new markets, including the Caribbean, the Indian Ocean, The
Bahamas, the Middle East and Southeast Asia.
GEOGRAPHICALLY DIVERSE CLIENTELE IN MULTIPLE PRICE SEGMENTS. The properties
we develop and operate attract guests from around the world and appeal to
multiple price segments of the market. Atlantis features three hotel towers,
each catering to different price points, allowing us to attract a broad range of
customers. We are evaluating plans to add an additional 1,000-room tower at
Atlantis that would
43
cater primarily to the middle market. Atlantis draws guests primarily from
throughout the United States and our properties in Mauritius, the Middle East
and the Maldives attract customers from Europe, southern Africa, the Middle East
and Southeast Asia. Our goal is to increase consumer awareness and demand in
target markets through high profile public relations, publications, special
event promotions and advertising. In addition, we support channel distribution
for all of our properties by providing a favorable commission structure for
primary wholesalers in the travel agent community. We believe that the
geographic diversity of our customer base reduces our dependence on any specific
region to generate revenue.
ATLANTIS OFFERS A VARIETY OF AMENITIES RESULTING IN A DIVERSE REVENUE
STREAM. Atlantis generates revenues from multiple sources, including hotel,
gaming and food and beverage. For the twelve months ended June 30, 2001, hotel,
gaming and food and beverage revenue accounted for 34%, 24% and 23%,
respectively, of Atlantis' total revenues. We believe that the multiple sources
of revenue at Atlantis allow us to maximize the potential revenue per occupied
room night and decrease our dependence on any one particular market segment.
BUSINESSES
DESTINATION CASINO RESORTS
Our destination casino resort business consists of large-scale, premier
destination resorts that we believe are "must see" properties. The existing
properties in this business are Atlantis and Mohegan Sun. These properties
feature distinctive themes, unique architectural designs and decors, and offer a
wide range of casino gaming, entertainment and other amenities. We believe these
properties maintain competitive advantages due to their scale, location, design,
variety of amenities and significant barriers to entry in the markets in which
they operate.
ATLANTIS
Our flagship destination casino resort is Atlantis, a 2,317-room
ocean-themed resort located on Paradise Island, The Bahamas. Atlantis consists
of three interconnected hotel towers that cater to multiple segments of the
resort and gaming markets. Based upon the myth of the lost continent of
Atlantis, the resort features:
- a 7-acre lagoon;
- a 34-acre marine environment that includes the world's largest open-air
aquarium, including over 100 species of marine life, waterfalls, lagoons
and adventure walks;
- "the Dig," an area through which visitors can walk surrounded by sharks,
numerous species of tropical fish, sea turtles, stingrays and other marine
life;
- a 100,000 square foot entertainment complex which includes the largest
casino in the Caribbean market, containing approximately 1,000 slot
machines and 80 table games;
- 17 restaurants ranging from casual poolside to upscale formal dining;
- approximately 100,000 square feet of convention space;
- a sports center;
- over 30,000 square feet of high-end retail space;
- a 63-slip, full-service Marina at Atlantis, which includes some of the
highest average docking rates in the Caribbean market and can accommodate
yachts up to 200 feet in length;
- several thrill waterslides, including the six-story Mayan Temple Slide,
which propels guests through an acrylic tube in a shark infested tank; and
44
- a 25,000 square foot spa operated by Mandara, offering our customers a
wide variety of spa amenities.
We acquired the property in May 1994 for $125.0 million and redeveloped the
property into an ocean-themed destination resort through an initial
$140.0 million capital expenditure program. The property achieved an average
occupancy and average daily room rate of 85% and $122 in 1995, a substantial
increase from the 62% and $95 achieved in 1993 under previous management.
Seeking to capitalize on the early success of Atlantis, we began construction of
an approximately $640.0 million expansion of the property in 1997. This major
expansion was completed in December 1998 and effectively doubled the size of
Atlantis. The 1998 expansion included a deluxe 1,200-room hotel, a new 100,000
square foot entertainment complex which includes a casino containing
approximately 1,000 slot machines and 80 table games, a new marina, and an
expansion of the ocean-themed environment. During 1999, we completed several
additional development projects at Atlantis, including the addition of 30,000
square feet of new retail and restaurant space, the conversion of a previously
existing 30,000 square foot casino space into a convention center and the
construction of a sports center, including an 18-hole Tom Fazio-designed putting
course and a tennis center.
Atlantis achieved an average occupancy and average daily room rate of 83%
and $242 in 2000, continuing to show strength in demand after effectively
doubling the number of rooms in December 1998.
To add to our product mix at Atlantis, we developed Harborside at Atlantis,
a timeshare project adjacent to Atlantis, through a joint venture with Starwood.
The first phase of the project was completed in February 2001 and consisted of
82 two-bedroom units. We began selling the units in May 2000 and have sold
approximately 28% of the units through June 30, 2001. As part of the joint
venture agreement, Starwood contributed cash and we contributed land, based on
the number of units to be developed. We are evaluating plans to develop a second
phase of timeshare development.
We currently own approximately 100 acres of land on Paradise Island
available for future development. Atlantis is a master-planned resort that
started with 1,147 rooms and has been expanded to its current size of 2,317
rooms with the development of the Royal Towers. In addition, we believe that
after spending over $100.0 million in infrastructure improvements on Paradise
Island, we have the ability to add more than 2,000 new hotel rooms, as well as
condominiums and additional timeshare units, restaurants, retail space and other
facilities.
We previously had plans for an additional 700-room Phase III hotel project
at Atlantis. However, we have postponed this project, and as a result, annual
tax incentives of approximately $3.0 million pursuant to our agreement with the
Bahamian government have been suspended. We are currently evaluating plans to
expand Phase III to a 1,000-room hotel expansion at Atlantis that would cater
primarily to the middle-market customer segment. This expansion is contingent
upon a number of factors, including continued strong demand at Atlantis and
reaching agreement with the Bahamian government regarding certain
development-related matters, including further improvements to some of the
island's infrastructure. In the event we begin construction of this or certain
other expansion projects, the suspended tax incentives will be prospectively
reinstated.
Paradise Island is easily accessible by air from the eastern United States
and has an extensive infrastructure. The majority of patrons at our resorts on
Paradise Island arrive through Nassau International Airport located on New
Providence Island. This large facility is served by several carriers offering
scheduled jet service from New York, Atlanta, Toronto, Miami and other cities.
Ground transportation is facilitated by two bridges linking Paradise Island and
New Providence Island.
MOHEGAN SUN
Owned by the Mohegan Tribe, Mohegan Sun currently features a 176,500 square
foot casino and incorporates an historical Native American theme through unique
architectural features and the use of
45
natural design elements such as timber, stone and water. Mohegan Sun is located
approximately one-mile from the interchange of Interstate 395 and Connecticut
Route 2A in Uncasville, Connecticut and is within 150 miles of approximately
22 million adults. Mohegan Sun spent $40.0 million for infrastructure
improvements providing direct highway access to the property from Boston,
Providence and New York. Mohegan Sun is located on 240 acres and currently has
approximately 3,600 slot machines and 153 table games, and various food and
beverage, retail and entertainment venues.
We believe the Connecticut gaming market has been extremely strong. During
the five years ended June 30, 2001, the market has grown at a compounded annual
growth rate of approximately 18%. Mohegan Sun's unique design and superior
location have helped it to become one of the most profitable casinos in the
United States with a gross win per slot per day of $488 for the twelve months
ended September 30, 2000.
We developed Mohegan Sun and managed the property from its opening in 1996
until January 2000 through TCA, a partnership in which we own a 50% interest.
Since opening, gross revenues at the property have grown to $809.3 million for
the fiscal year ended September 30, 2000, exceeding the gross revenues of each
casino in Atlantic City. On January 1, 2000, TCA turned over management of the
property to the Mohegan Tribe and TCA now receives payments equal to 5% of gross
revenues generated by the property from January 2000 through December 2014,
including the expansion described below. Approximately half of such fees rank
PARI PASSU with the Mohegan Tribe's senior debt and half rank PARI PASSU with
the Mohegan Tribe's subordinated debt.
We are overseeing the development of an approximate $960.0 million expansion
of the property through TCA. The expanded casino is expected to open in Fall
2001, with the remainder of the expansion expected to open in phases through
April 2002. Upon completion of the Mohegan Sun expansion, we believe the gross
revenues of the property will significantly increase and that Mohegan Sun will
be one of the largest and most unique destination casino resorts in the world.
The table below outlines certain amenities of Mohegan Sun before and after
the proposed expansion:
GAMING SLOT TABLE HOTEL RETAIL MEETING PARKING
SPACE-SF MACHINES GAMES ROOMS SPACE-SF SPACE-SF SPACES RESTAURANTS
-------- -------- -------- -------- -------- -------- -------- -----------
Pre-expansion.................... 176,500 3,665 153 -- 5,476 -- 7,500 7
Post-expansion................... 291,500 6,218 233 1,200 135,476 100,000 12,775 16
LUXURY RESORT HOTEL BUSINESS
Our luxury resort hotel business consists of a collection of premier beach
resort hotels that operate primarily in the five-star, deluxe-end of the resort
market. Located on what we believe to be some of the leading beach locations in
the world, these resort hotels are architecturally unique and have been
developed to blend into their surrounding environment. This business consists of
five properties on Mauritius, the Royal Mirage Hotel in Dubai, the Kanuhura
Resort & Spa in the Maldives and the Ocean Club on Paradise Island, The Bahamas.
We expect to leverage our existing management expertise and business
infrastructure and continue to grow this segment of our business in the
Caribbean, the Indian Ocean, The Bahamas, the Middle East and Southeast Asia to
obtain additional management contracts, which may also include strategic equity
investments.
INDIAN OCEAN
In Mauritius, we manage and own interests in five beach resorts:
- the recently renovated 175-room Le Saint Geran Hotel;
- the 200-room Le Touessrok Hotel & Ile Aux Cerfs;
46
- the 248-room La Pirogue Hotel;
- the 333-room Le CoCo Beach; and
- the 238-room Sugar Beach Resort Hotel.
The properties cater primarily to luxury and middle-market tourists in
Europe and southern Africa. Le Saint Geran and Le Touessrok offer deluxe
accommodations and we believe that such properties are among the finest beach
resorts in the world. Le Saint Geran and Le Touessrok have recently been rated
as among the world's finest leisure hotels in CONDE NAST TRAVELLER magazine. La
Pirogue, Le CoCo Beach and Sugar Beach primarily cater to middle-market
travelers.
Mauritius' tourist industry is mainly comprised of visitors from Great
Britain, Germany, France, Italy and South Africa. Scheduled air service to and
from Mauritius is provided through scheduled flights on numerous airlines
including Air France, British Airways, Cathay Pacific, Singapore Airlines, Air
India, Air Mauritius, Condor and South African Airlines.
In the Maldives, located off the southern tip of India, we manage the
Kanuhura Resort & Spa, a 120-room luxury resort located on Kanuhura Island. In
August 2001, we expect to acquire approximately 25% of the equity of the
Kanuhura Resort & Spa for approximately $3.5 million.
We manage these resorts under long-term management contracts and receive
management fees based upon a percentage of the revenues and gross operating
profits of these properties. We continue to actively pursue new luxury resort
management opportunities in this region.
MIDDLE EAST
We currently manage the Royal Mirage Hotel in Dubai in the Middle East, a
luxury 258-room hotel which opened in August 1999. Under the terms of the
management agreement, which expires in 2019, we receive management fees based on
a percentage of the revenues and gross operating profits of the property. We
entered into an agreement to manage a new 225-room luxury hotel that is to be
constructed adjacent to the property.
THE OCEAN CLUB
We own and operate the Ocean Club, a high-end luxury resort hotel with 106
rooms and suites located on Paradise Island, The Bahamas. In October 2000, we
completed an addition to the Ocean Club that comprised 50 rooms, including 10
deluxe suites, a new beachfront restaurant operated by Jean-Georges Vongerichten
and significant enhancements to the existing pool and garden areas. The Ocean
Club also features a championship golf course (newly redesigned by Tom Weiskopf)
and a clubhouse with 121 luxury homesites set around the golf course. As of
June 30, 2001, we have closed on 111 of the 121 available homesites and realized
over $108.0 million in gross proceeds.
Since more than doubling the number of rooms in October 2000, the Ocean Club
has maintained its occupancy levels and increased its average daily room rate.
The property achieved an average occupancy of 74% and an average daily room rate
of $685 for the six months ended June 30, 2001 compared to 77% and $594 for the
same period in 2000.
COMPETITION
The resort and casino industries are highly competitive. Our destination
casino resorts compete with other destination resorts and casinos, including
land-based casinos, riverboat, dockside and cruise ship on-board casinos and
other forms of gaming as well as with other forms of entertainment. Our luxury
resort hotels compete with other resorts and hotels in markets in which we
conduct business. We believe the ability to compete effectively in the
industries is based on a number of factors, including the scope, quality,
location and accessibility of facilities, the effectiveness of marketing
efforts, customer
47
service, the relative convenience of available transportation, service and the
quality and price of rooms, food and beverages, convention facilities and
entertainment.
PARADISE ISLAND
Our Paradise Island operations primarily compete with cruise ships and other
hotels and resorts, on Paradise Island, New Providence, Grand Bahama Island and
the neighboring Caribbean islands. We estimate that there are approximately
8,300 hotel rooms on Paradise Island and New Providence combined, of which
approximately 3,700 are located on Paradise Island, including 2,423 in hotels
owned and operated by us. The Nassau Marriott, our primary competitor in The
Bahamas, is a 867-room resort and casino.
We also compete with The Resort and Casino at Bahamia (formerly the Princess
Casino and Hotel) and Our Lucaya, both located on Grand Bahama Island,
approximately 40 minutes by air from Paradise Island. The Resort and Casino at
Bahamia includes a 20,000 square foot casino, a 965-room hotel, restaurants and
other leisure facilities. Our Lucaya is a new property with 1,350 rooms, which
is developing a new 30,000 square foot casino that is expected to open in Fall
2001.
MOHEGAN SUN
The Connecticut market is the fourth largest gaming market in the United
States, with approximately 22 million adults within 150 miles of Mohegan Sun.
Mohegan Sun and Foxwoods Resort and Casino at present are the only two casinos
in the Connecticut market. Foxwoods has approximately 5,800 slot machines and,
for the year ended December 31, 2000, reported slot revenue of approximately
$750.0 million. The Oneida Nation operates a casino near Syracuse, New York and
other Native American tribes in the states of New York, Rhode Island,
Massachusetts and Connecticut are seeking approvals to establish gaming
operations which would further increase competition, particularly for day-trip
patrons. Mohegan Sun also competes with Atlantic City and several small Native
American gaming facilities throughout the northeastern United States.
In Connecticut, under the tribal-state compacts between the State and each
of the Mohegan Tribe and the other Native American casino in the State, Mohegan
Sun is subject to a 25% gaming fee on slot revenues payable to the State of
Connecticut so long as the State does not issue any further licenses for gaming
operations with slot machines or other commercial casino games (other than to a
Native American tribe or Native American land). In March 2000, two additional
Native American tribes in Connecticut, the Eastern Pequots and the Paucatuck
Eastern Pequots, received a proposed positive recommendation by the Federal
Bureau of Indian Affairs to receive federal recognition as tribes. The
applications for federal recognition are pending. If either of the two tribes
receives federal recognition, they could seek to obtain trust land and approvals
to conduct casino gaming in Connecticut.
INDIAN OCEAN
In the Indian Ocean market, we primarily compete with other resorts on the
islands in which we operate as well as other locations offering vacations to
tourists from Europe, southern Africa and parts of Asia. Sun Resorts Limited
owns five major hotels in Mauritius and offers approximately 19% of the
available rooms in properties with more than 80 rooms. In the luxury end of the
Mauritian hotels market, Sun Resorts Limited owns two of the seven luxury hotels
and offers a total of 375 of the approximately 1,000 rooms in Mauritius. Sun
Resorts Limited faces more competition for the middle-market La Pirogue, Sugar
Beach and Le CoCo Beach hotels.
SALES AND MARKETING
Our marketing goal is to drive demand direct from the consumer through high
profile public relations, publications and special events promotions and
advertising. To support our operations in The
48
Bahamas, we maintain an internal distribution through our tour operator,
Paradise Island Vacations, Inc. Similarly, our operations in Mauritius and Dubai
are supported through our own network of European marketing offices. In
addition, we channel distribution for all of our operations through primary
wholesalers in the travel agent community with a favorable commission structure.
We expect to spend approximately $20 million in 2001 on sales and marketing
for our operations in The Bahamas. Pursuant to the Heads of Agreement described
below, we receive $4.0 million per year from the Bahamian government toward the
direct costs related to certain marketing events, public relations activities
and the production and placement of advertisement in media through 2003.
CERTAIN MATTERS AFFECTING OUR BAHAMIAN OPERATIONS
CASINO LICENSE
Through a subsidiary, we are currently licensed to operate Atlantis under
the Bahamian Gaming Act. In accordance with Bahamian casino licensing
requirements, our subsidiary's casino license must be renewed annually by the
Bahamian gaming board. Other than an existing contingent obligation to grant two
casino licenses, the Bahamian government has agreed that it will grant no new
casino licenses with respect to gaming operations on Paradise Island or New
Providence Island until 2033.
BASIC LICENSE FEE
Currently, the Bahamian Gaming Act provides for taxes on casino revenues
consisting of an annual basic license fee of $200,000.
TAXES AND FEES
The following table summarizes, for the periods shown, the taxes and fees
paid or accrued by Sun International Bahamas Limited under the Gaming Act and
certain agreements with the Bahamian government:
YEAR ENDED DECEMBER 31,
-------------------------------------
1998 1999 2000
---------- ---------- -----------
Casino win...................................... $7,327,000 $9,631,000 $10,719,000
Basic license and operating fees................ 200,000 200,000 200,000
---------- ---------- -----------
Total........................................... $7,527,000 $9,831,000 $10,919,000
========== ========== ===========
HEADS OF AGREEMENT
We have an agreement with the Bahamian government, which we refer to as the
Heads of Agreement, that governs our gaming taxes and fees in The Bahamas and
provides us with certain tax incentives to encourage us to further expand
Atlantis. Under this agreement, we currently pay an annual license fee of
$100,000 per thousand square feet of casino space, a minimum annual casino win
tax of $4.3 million on all gaming win up to $20.0 million, a 12.5% win tax on
all gaming win between $20.0 million and $120.0 million and a 10% win tax on all
gaming win in excess of $120.0 million. Until 2009, we are entitled to reduce
such fees and taxes on an annual basis by $5.0 million and 45% of the win tax
paid on gaming win between $20.0 million and $120.0 million.
If we meet certain expansion conditions, the Heads of Agreement provides for
a reduction of the win tax on all gaming wins in excess of $20.0 million to 10%
and, until 2009, a 50% credit on win tax paid on gaming win in excess of
$20.0 million. These additional incentives were in place from January 1, 1998
until July 1, 2000, at which time the Bahamian government suspended such
incentives as a result of our decision to postpone construction of a planned 700
hotel room expansion at Atlantis. The suspended tax incentives will be
prospectively reinstated if and when we meet the expansion targets referenced in
the agreement. We estimate that the effect of these additional incentives when
we had them in place was an approximate $3.0 million decrease per year in gaming
win tax.
49
The agreement also provides for a joint marketing agreement that expires in
2003, pursuant to which the Bahamian government agreed to match our
contribution, up to $4.0 million annually, toward the direct costs related to
certain marketing events, public relations activities and the production and
placement of advertisements in media.
The Heads of Agreement also requires that SIIL control a majority of our
board of directors until June 30, 2004. As part of the restructuring of SIIL, we
entered into a governance agreement with the shareholders of SIIL that, among
other things, requires us to submit to our shareholders an amendment to our
articles of association that would set the term of our existing directors to
expire at our annual general meeting in 2004. We believe that this contemplated
amendment to our articles of association will satisfy the terms of the Heads of
Agreement.
THE COMMONWEALTH OF THE BAHAMAS
The Commonwealth of The Bahamas had a population of approximately 300,000 in
2000. The Bahamas includes approximately 700 islands, 29 of which are inhabited,
and extends from east of the Florida coast to just north of Cuba and Haiti. Over
60% of the population lives on New Providence Island, where Nassau, the capital
of The Bahamas, is located. The Bahamas first obtained internal self-government
in 1964 and became an independent nation within the British Commonwealth in
1973. The first elections under universal adult suffrage were held in
November 1962. The present government was first elected in 1992 and re-elected
in March 1997, having succeeded a government that was in power for over
20 years. The official language is English.
The currency of The Bahamas has been tied to the U.S. dollar since 1970 with
an official exchange rate of U.S. $1.00 equal to 1.00 Bahamian dollar.
The Ministry of Tourism spends over $60 million annually to promote The
Bahamas and in recent years the government has made large investments in the
expansion of both Nassau Harbor and Nassau International Airport.
CERTAIN MATTERS AFFECTING MOHEGAN SUN
REGULATION
The Mohegan Tribe is a federally recognized Native American tribe whose
federal recognition became effective May 15, 1994. In May 1994, the Mohegan
Tribe and the State of Connecticut entered into a gaming compact to authorize
and regulate Class III gaming operations (slot machines and table games). Under
this tribal-state compact, Mohegan Sun is subject to a 25% gaming fee on slot
revenues payable to the State of Connecticut so long as the State does not issue
any further licenses for gaming operations with slot machines or other
commercial casino games (other than to a Native American tribe on Native
American land).
Each of the partners of TCA must be licensed by relevant tribal and state
authorities. Each of the partners of TCA has received a gaming registration from
the Commissioner of Revenue Services of the State of Connecticut which is
renewed annually.
PRIORITY PAYMENTS
Pursuant to subcontracts for management services, organization and
administrative services and marketing services provided to TCA, prior to
January 1, 2000 we received certain priority payments from TCA. Each of these
priority payments was paid from TCA's management fees prior to the pro rata
distribution to TCA's partners of TCA's profits. From January 1, 2000, any
accrued fees under these agreements as of such date are to be paid as priority
distributions of TCA's available cash. Furthermore, for seven years beginning
January 1, 2000, TCA pays us the first $5.0 million of the profits it receives
pursuant to the relinquishment agreement as a priority payment prior to making
pro rata distributions to its partners.
50
WAIVER OF SOVEREIGN IMMUNITY
Pursuant to the relinquishment agreement, the Mohegan Tribe has waived
sovereign immunity for the purpose of permitting a suit by TCA in any court of
competent jurisdiction for the purpose of enforcing the relinquishment agreement
and any judgments arising out of the relinquishment agreement, including
(i) the enforcement of the Tribe's payment obligations to TCA with an award of
actual damages in connection with any breach thereof and (ii) an action to
prohibit the Tribe from taking any action that would prevent the operation of
the relinquishment agreement. The only assets subject to payment or encumbrances
for the payment of Tribal obligations under the relinquishment agreement are any
cash and the undistributed and future revenues derived from Mohegan Sun.
NEW JERSEY GAMING REGULATION
As a result of the Resorts Atlantic City sale, effective April 25, 2001, we
no longer operate a casino in Atlantic City. However, as the lessor of real
estate in Atlantic City to Colony, SINA is required to maintain a casino service
industry license. SINA is also required to maintain qualification by the New
Jersey Casino Control Commission as a financial source as a result of the
$17.5 million note issued by an affiliate of Colony to SINA in connection with
the sale of Resorts Atlantic City.
ENVIRONMENTAL MATTERS
We are subject to federal, state and local laws and regulations that
- govern activities or operations that may have adverse environmental
effects, such as discharges to air and water as well as handling and
disposal practices for solid and hazardous wastes, and
- impose liability for the costs of cleaning up, and certain damages
resulting from, past spills, disposals or other releases of hazardous
substances.
From time to time, our operations have resulted or may result in
noncompliance with applicable environmental laws. However, past noncompliance
has not and we believe that any future noncompliance would not, have a material
adverse effect on our financial conditions or results of operations.
The Mohegan Sun site was formerly occupied by UNC, a naval products
manufacturer of, among other things, nuclear reactor fuel components. UNC's
facility was officially decommissioned on June 8, 1994, when the Nuclear
Regulatory Commission confirmed that all licensable quantities of special
nuclear material had been removed from the Mohegan Sun site and that any
residual special nuclear material contamination was remediated in accordance
with the Nuclear Regulatory Commission-approved decommissioning plan.
From 1991 through 1993, UNC commissioned an environmental consultant to
perform a series of environmental assessments on the Mohegan Sun site, including
extensive soil investigations and groundwater monitoring. The environmental
assessments detected, among other things, volatile organic chemicals, heavy
metals and fuel hydrocarbons in the soil and groundwater. Extensive remediation
of contaminated soils and additional investigations were then completed.
Although the Mohegan Sun site currently meets applicable remediation
requirements, no assurance can be given that the various environmental
assessments with respect to the Mohegan Sun site revealed all existing
environmental conditions, that any prior owners or tenants of the Mohegan Sun
site did not create any material environmental condition not known to the
Mohegan Gaming Authority, that future laws, ordinances or regulations will not
impose any material environmental liability or that a material environmental
condition does not otherwise exist on Mohegan Sun. Future remediation may be
necessary if excavation and construction exposes contaminated soil, which has
otherwise been deemed isolated and not subject to cleanup requirements. Such
remediation could adversely impact the results of operations of Mohegan Sun and
therefore our results of operations and financial conditions.
51
In addition, the Environmental Protection Agency has named a predecessor to
SINA as a potentially responsible party, or a PRP, under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, or CERCLA, for
the cleanup of contamination resulting from past disposals of hazardous waste at
the Bay Drum site in Florida, to which the predecessor, among others, sent waste
in the past. CERCLA requires PRPs to pay for cleanup of sites at which there has
been a release or threatened release of hazardous substances. Courts have
interpreted CERCLA to impose strict, joint and several liability upon all
persons liable for cleanup costs. As a practical matter, however, at sites where
there are multiple PRPs, the costs of cleanup typically are allocated among the
parties according to a volumetric or other standard. Because we have only
limited information at this time regarding this site and the wastes sent to it
by the predecessor, we are unable to determine the extent of our potential
liability, if any, at this site.
PROPERTY, PLANTS AND EQUIPMENT
Our headquarters and registered office are located at Executive Offices,
Coral Towers, Paradise Island, The Bahamas.
We own or lease properties in The Bahamas, the United States, the United
Kingdom and France. Set forth below is a table listing our principal properties
as of June 30, 2001:
EXTENT
NAME AND OWNED OR PRINCIPAL UTILIZED
LOCATION LEASED USE SIZE CAPACITY YEAR 2000
-------- -------- ---------------------- ------------------- ---------- ----------
Atlantis.............. Owned Hotel/Casino 69 acres 2,317 83%
Paradise Island, Rooms Average
The Bahamas Occupancy
Ocean Club............ Owned Hotel/Casino 36 acres 106 71%
Paradise Island, Rooms Average
The Bahamas Occupancy
Ocean Club Golf Owned Golf Course 170 acres N/A N/A
Course..............
Paradise Island,
The Bahamas
Undeveloped Land...... Owned Future Development 100 acres N/A N/A
Paradise Island,
The Bahamas
Undeveloped Land...... Owned (1) 26 acres N/A N/A
Atlantic City,
New Jersey
Sun International Leased Administrative Office -- 400 --
Resorts, Inc........ and Travel Agency Employees
Ft. Lauderdale,
Florida
------------------------
(1) Approximately 13 acres are included in the option we granted to Colony in
connection with the sale of Resorts Atlantic City, and we lease this
property to Colony for $100,000 per month. The remaining 13 acres of
developable land that we own in Atlantic City are available for sale or
other use.
In addition to the properties listed above, we lease several small
administration offices that we use for marketing purposes at various locations
in the United States. The number of employees at each of
52
these offices is less than ten. We also lease a small administrative office in
Oxfordshire, United Kingdom, as well as office space in Paris, France, used by
Sun Vacances, our wholly owned tour operator.
EMPLOYEES
Set forth below is a table showing the total number of employees at our
properties worldwide by geographic location for the periods indicated.
AS OF DECEMBER 31, AS OF JUNE 30,
------------------------------ --------------
1998 1999 2000 2001
-------- -------- -------- --------------
The Bahamas....................................... 5,100 5,700 5,800 6,000
Atlantic City..................................... 3,400 3,300 3,300 -- (1)
Other............................................. 400 500 500 445
----- ----- ----- -----
8,900 9,500 9,600 6,445
===== ===== ===== =====
------------------------
(1) Reflects the sale of Resorts Atlantic City on April 25, 2001.
We do not employ a significant number of temporary workers.
In The Bahamas, approximately 3,800 employees are represented by The Bahamas
Catering and Allied Workers Union. Sun International Bahamas Limited
participates in The Bahamas Hotel Employers Association, which represents resort
operators in the Paradise Island-New Providence Island area. The association's
existing contract with the union expires January 1, 2003. Labor relations in The
Bahamas have been unstable at times with occasional work stoppages occurring,
not only at Atlantis, but also at publicly run entities such as the Bahamian
Electric Corporation and Bahamas Telephone Company. As the country's largest
private employer, we are sometimes the target of labor disputes.
LEGAL PROCEEDINGS
From time to time, we are a party to litigation which arises in the ordinary
course of business. We are not currently a party to any litigation that we
believe would be likely to have a material adverse effect on us.
SUBSEQUENT EVENTS
On September 11, 2001, the United States was attacked by terrorists using
hijacked jets. The effects of these events are likely to include a decline in
vacation travel, group conventions and tourism due to, among other things, fears
regarding additional acts of terrorism, as well as reduced operations by
airlines due to, among other things, decreased demands for air travel, new
security directives and increased costs. The magnitude and duration of these
effects is unknown and cannot be predicted. We have already experienced a
material decline in occupancy at our resorts and in particular many customers
have cancelled booked individual vacations and group conventions at Atlantis in
the coming months. Continued negative market conditions related to those
terrorist actions, any future occurrences of similar events, and potential
responsive action by the United States and other countries which perpetuates a
climate of war, could cause further existing and potential customers to delay
and cancel travel, convention and vacation plans. Our operating results are
being adversely effected and the duration and magnitude of this effect is
unknown.
53
MANAGEMENT
DIRECTORS AND SENIOR MANAGEMENT
Our current directors are:
COUNTRY OF DIRECTOR
NAME CITIZENSHIP SINCE
---- --------------- --------
Solomon Kerzner........................................... South Africa 1993
Peter N. Buckley.......................................... United Kingdom 1994
Howard S. Marks........................................... United States 1994
Eric B. Siegel............................................ United States 1994
Heinrich von Rantzau...................................... Germany 2001
Our current executive officers are:
EXECUTIVE
OFFICER
NAME TITLE AGE SINCE
---- ----------------------------------------------- -------- ---------
Solomon Kerzner...................... Chairman and Chief Executive Officer 65 1993
Howard B. Kerzner.................... President 37 1995
Charles D. Adamo..................... Executive Vice President-Corporate Development 40 1995
John R. Allison...................... Executive Vice President-Chief Financial 55 1994
Officer
The executive officers serve indefinitely at the pleasure of the board of
directors.
SOLOMON KERZNER, CHAIRMAN AND CHIEF EXECUTIVE OFFICER: Mr. Kerzner has been
our Chairman and Chief Executive Officer since October 1993 and from
October 1993 to June 1996 he served as our President. Mr. Kerzner is the
Chairman of World Leisure Group Limited, a British Virgin Islands corporation,
which owns approximately 17% of our shares and has the right to vote an
additional 10% of our shares. Mr. Kerzner is one of the visionary leaders of the
resort and gaming industries. Prior to founding Sun International, Mr. Kerzner
pioneered the concept of an entertainment and gaming destination resort designed
and managed to appeal to multiple market segments by developing Sun City,
located near Johannesburg, South Africa. Sun City features four hotels with
approximately 1,300 rooms, an entertainment center that includes a 6,000-seat
indoor superbowl, a 46-acre man-made lake for watersports and approximately
55,000 square feet of gaming space. In 1992, Sun City was expanded to include
The Lost City, a themed resort which features a 350-room luxury hotel and a
man-made jungle in which over one million trees were transplanted. Mr. Kerzner
has been responsible for the development of 21 hotels and founded both of
southern Africa's largest hotel groups, Southern Sun Hotels and Sun
International South Africa. We do not have any interest in any of the southern
African properties developed by Mr. Kerzner. Mr. Kerzner is the father of
Mr. Howard B. Kerzner.
HOWARD B. KERZNER, PRESIDENT: Mr. Kerzner joined Sun International in
May 1995 as Executive Vice President-Corporate Development and has been
President since June 1996. Prior to that time, he was Director-Corporate
Development of SIIL from September 1992. Previously, Mr. Kerzner was an
Associate of Lazard Freres & Co. LLC from September 1991. Prior to that
Mr. Kerzner worked for the First Boston Corporation. Mr. Kerzner is the son of
Mr. Solomon Kerzner.
CHARLES D. ADAMO, EXECUTIVE VICE PRESIDENT-CORPORATE DEVELOPMENT & GENERAL
COUNSEL: Mr. Adamo joined Sun International in May 1995 as General Counsel and
has been responsible for corporate development since January 1997. Prior to that
time, he was Group Legal Advisor of SIIL from September 1994. Previously,
Mr. Adamo was engaged in the practice of law at the firm of Cravath, Swaine &
Moore in New York from 1986. Mr. Adamo is admitted to the bar in the State of
New York.
JOHN R. ALLISON, EXECUTIVE VICE PRESIDENT-CHIEF FINANCIAL
OFFICER: Mr. Allison joined Sun International in May 1995 as Chief Financial
Officer. Mr. Allison joined SIIL in March 1994 as Group Financial Director. From
December 1987 until February 1994, Mr. Allison was Financial Director of Sun
International Inc., a resort and management holding company with interests in
approximately 27
54
hotels in southern Africa. Prior to that time, he was the Group Financial
Director of Kimberly-Clark (South Africa) Limited for four years. He is a fellow
of the Institute of Chartered Accountants in England and Wales and a member of
the South African Institute of Chartered Accountants.
PETER N. BUCKLEY, DIRECTOR: Mr. Buckley has been a Director since
April 1994. Mr. Buckley is Chairman and Chief Executive Officer of Caledonia,
which owns approximately 22% of our shares and has the right to vote an
additional 10% of our shares. In 1994 he was appointed Chairman of Caledonia
having been Deputy Chairman and Chief Executive since 1987. He is also Chairman
of English & Scottish Investors PLC and Bristow Helicopter Group Limited. He is
a non-executive Director of Close Brothers Group plc, Offshore Logistics, Inc.
(a NASDAQ listed company) and The Telegraph PLC.
HOWARD S. MARKS, DIRECTOR: Mr. Marks has been a Director since April 1994.
Mr. Marks is Chairman of Oaktree Capital Management, LLC, which manages funds in
excess of $20 billion for institutional investors. Previously, Mr. Marks was
employed by The TCW Group, Inc. where he became Chief Investment Officer for
Domestic Fixed Income and President of its largest affiliate, TCW Asset
Management Company.
ERIC B. SIEGEL, DIRECTOR: Mr. Siegel has been a Director since April 1994.
Mr. Siegel is a retired limited partner of Apollo Advisors, L.P. Mr. Siegel is
also a Director and member of the executive committee of El Paso Electric
Company, a publicly traded utility company.
HEINRICH VON RANTZAU, DIRECTOR: Mr. von Rantzau has been a director since
July 2001. Mr. von Rantzau is a principal of CMS and an executive of Deutsche
Afrika-Linien GmbH and John T. Euberger GmbH. Mr. von Rantzau is also a member
of the Economic Advisory Board of Germanischer Lloyd and a Director of UK P&I
Club.
BOARD PRACTICES
Pursuant to our Articles of Association, as amended, our maximum number of
directors is fixed at five. As part of the restructuring of SIIL, we entered
into a governance agreement with WLG, Caledonia, Kersaf, CMS and certain of
their affiliates that, among other things, requires us to submit to our
shareholders an amendment to our articles of association that would set the term
of our existing directors, consisting of Messrs. S. Kerzner, Buckley, Marks,
Siegel and von Rantzau to expire at our annual general meeting in 2004.
Our board of directors has appointed an audit committee of the board
consisting of Messrs. Buckley, Marks and Siegel. Members of the audit committee
comprise individuals who have no relationship to us that may interfere with the
exercise of their independence from management and us. To ensure complete
independence, Arthur Andersen LLP has full and free access to meet with the
audit committee, without management representatives present, to discuss the
results of the audit, the adequacy of internal controls and the quality of
financial reporting. The primary function of the audit committee is to assist
our board of directors in fulfilling its oversight responsibilities by reviewing
the financial information that will be provided to the stockholders and others,
the systems of internal controls that our management and board of directors have
established and the audit process. The audit committee meets four times per
year.
We also have a remuneration committee consisting of Messrs. S. Kerzner,
Buckley, Marks and Siegel. The remuneration committee is mandated to review and
adopt our executive compensation plans and policies, including the adoption of
stock option plans and the granting of options to senior executives thereunder.
Our stock option committee, consisting of Messrs. S. Kerzner, H. Kerzner and
Adamo, is authorized to grant stock options under our stock options plan in
amounts not to exceed 100,000 ordinary shares in any one quarter or 15,000
options per grant for any one individual.
55
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
RESTRUCTURING OF RELATIONSHIP WITH MAJORITY SHAREHOLDER
On July 3, 2001, we announced the restructuring of our majority shareholder,
SIIL, and the resolution of certain matters with SIIL and certain of its
shareholders. SIIL and its shareholders currently beneficially own approximately
67% of our issued and outstanding shares. SIIL is itself owned in equal thirds
by Kersaf, Caledonia and WLG, a company controlled by Sol Kerzner, our Chairman
and Chief Executive Officer. SIIL previously was governed by a shareholders
agreement pursuant to which all major decisions of SIIL required the unanimous
consent of its shareholders. Kersaf operates a number of hotel, casino and
resort properties in southern Africa under the Sun International name and there
has been some confusion regarding the use of the Sun International name by both
Kersaf and us. As part of the restructuring and settlement:
- The SIIL shareholders agreement was terminated effective July 3, 2001 and
SIIL will be dissolved as soon as practicable thereafter. Following such
dissolution, SIIL's shareholders will hold their shares in us directly.
- Kersaf has granted a proxy to vote half of its shares to WLG and half of
its shares to Caledonia. As a result, Caledonia owns shares representing
approximately 22% of our outstanding shares and has the right to vote an
additional 10% and WLG owns shares representing 17% of our outstanding
shares and has the right to vote an additional 10%.
- Upon the dissolution of SIIL, Cement Merchants SA, or CMS, a partner in
Kersaf's hotel, casino and resort management activities in southern
Africa, will own shares representing approximately 6% of our outstanding
shares. Heinrich von Rantzau, a principal of CMS, has agreed to join our
board of directors.
- Kersaf, Caledonia and WLG have agreed to certain standstill provisions
through June 2006 pursuant to which each of them will refrain from
proposing or consummating certain extraordinary corporate transactions
involving us, including any merger or the sale of substantially all of our
assets. See "Related Party Transactions--Registration Rights and
Governance Agreement."
- Pursuant to a registration rights and governance agreement, we granted
certain registration rights to Kersaf, Caledonia, WLG and CMS, and Kersaf
has agreed to sell not less than two million of our shares in a registered
public offering before June 30, 2002, subject to certain exceptions. See
"Related Party Transactions--Registration Rights and Governance
Agreement."
- As soon as practicable following the effective date of the agreement, the
term of our directors, consisting of Messrs. S. Kerzner, Buckley, Siegel,
Marks and von Rantzau, shall be extended until our annual general
shareholders meeting in 2004, which we believe will satisfy our agreement
with the Bahamian government that SIIL control a majority of the board of
directors until June 30, 2004. See "Certain Matters Affecting Our Bahamian
Operations--Heads of Agreement."
- After a transition period not to exceed one year, we will cease using the
names "Sun" and "Sun International" and Kersaf will have exclusive rights
to use such names.
- Kersaf will pursue a potential resort development project in Port Ghalib,
Egypt, and we will receive between 25% and 50% of Kersaf's gross receipts
from this project, if consummated, such percentage to be determined based
on certain thresholds.
- Kersaf has made a one-time payment of $3.5 million to us and has issued a
secured note to us with a principal amount of $12.0 million and a maturity
date of June 30, 2003. The note bears interest at a rate of 9% per year,
payable quarterly.
56
MAJOR SHAREHOLDERS
As of July 31, 2001, we had 26,904,238 shares outstanding. The following
table sets forth certain information as of July 31, 2001 (after giving effect to
the dissolution of SIIL) regarding the beneficial ownership of Sun
International's ordinary shares by: (i) any person who is known to us to be the
owner of more than 5% of any class of our voting securities and (ii) our
directors and officers as a group:
BENEFICIAL OWNER AMOUNT PERCENT OF CLASS
---------------- ------------ ----------------
Caledonia Investments plc................................... 8,673,948(1) 32.2%
Baron Capital Group, Inc. .................................. 4,521,535 16.8%
World Leisure Group Limited................................. 7,361,448(2) 27.4%
Cement Merchants SA......................................... 1,686,984 6.3%
Kersaf Investments Limited.................................. 5,733,309(3) 21.3%
Directors and officers as a group
(excluding shares deemed owned
by WLG and S. Kerzner).................................... -- less than 1%
------------------------
(1) Includes 2,866,655 shares owned by Kersaf with respect to which Kersaf has
granted the right to vote by proxy.
(2) Includes 2,866,654 shares owned by Kersaf with respect to which Kersaf has
granted the right to vote by proxy.
(3) Kersaf has no right to vote these shares.
RELATED PARTY TRANSACTIONS
Set forth below is a summary of agreements that have been entered into or
transactions that have occurred since January 1, 2000 involving us and any of
our subsidiaries, affiliates or key management.
REGISTRATION RIGHTS AND GOVERNANCE AGREEMENT
As part of the SIIL reorganization, we entered into a registration rights
and governance agreement with Kersaf, WLG, Caledonia, CMS and certain of their
affiliates. Among other things, under this agreement:
- we have granted certain registration rights to Kersaf, Caledonia, WLG and
CMS in respect of their Sun International ordinary shares, and Kersaf has
agreed to sell not less than 2.0 million of our shares in a registered
public offering before June 30, 2002, subject to certain extensions;
- we will submit to our shareholders an amendment to our articles of
association that would set the term of our existing directors to expire at
our annual general meeting in 2004;
- Kersaf has agreed for a period of five years until June 30, 2006 not to
acquire any of our shares. In addition, subject to certain rights of first
refusal as between themselves, each of Caledonia, WLG and CMS has agreed
not to acquire any additional shares of Sun International in excess of
0.9 million, in the case of Caledonia and WLG, and 4.0 million, in the
case of CMS, prior to June 30, 2006, in each case subject to certain
exceptions; and
- Kersaf, Caledonia and WLG will refrain from proposing or consummating
certain extraordinary corporate transactions involving us, including any
merger or the sale of substantially all of our assets.
57
HARBORSIDE PROMISSORY NOTES
In conjunction with Starwood, we have entered into a series of promissory
notes with Harborside at Atlantis to fund the construction cost of the timeshare
development. As of June 30, 2001, we had advanced $25.0 million to Harborside at
Atlantis. The loans we made were made simultaneously with loans from Starwood.
Our loans and the Starwood loans mirror each other in amounts, terms and
conditions. Interest on such loans accrues at LIBOR plus 250 basis points. Our
loans and the Starwood loans are PARI PASSU with respect to payments of
principal and accrued interest and such payments will be made as cash is
available from the sale of timeshare units.
MANAGEMENT SERVICES AND FEES
We provide management services to Sun Resorts Limited, a Mauritius company
in which we currently own a 20.4% equity interest. Pursuant to the management
agreement with Sun Resorts Limited, we provide comprehensive management services
under individual management agreements relating to each of Le Saint Geran, Le
Touessrok, La Pirogue, Sugar Beach and Le Coco Beach resort hotels which Sun
Resorts Limited owns. The term of each of these management agreements expires in
December 2008.
We also provide management services to Harborside at Atlantis, a joint
venture in which we own a 50% equity interest.
LONG-TERM CONTRACT FEES
In 2000, $3.0 million was received from Kersaf pursuant to a long-term
contract. This payment was established at $2.4 million in 1994 and increases at
a rate of 3.0% per year and has been paid annually.
58
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
In connection with the sale of the Old Notes, we entered into a registration
rights agreement with the initial purchasers, under which we agreed to use our
best efforts to file and have declared effective an exchange offer registration
statement under the Securities Act of 1933.
We are making the exchange offer in reliance on the position of the SEC as
set forth in certain no-action letters. However, we have not sought our own
no-action letter. Based upon these interpretations by the SEC, we believe that a
holder of New Notes, but not a holder who is our "affiliate" within the meaning
of Rule 405 of the Securities Act of 1933, who exchanges Old Notes for New Notes
in the exchange offer, generally may offer the New Notes for resale, sell the
New Notes and otherwise transfer the New Notes without further registration
under the Securities Act of 1933 and without delivery of a prospectus that
satisfies the requirements of Section 10 of the Securities Act of 1933. This
does not apply, however, to a holder who is our "affiliate" within the meaning
of Rule 405 of the Securities Act of 1933. We also believe that a holder may
offer, sell or transfer the New Notes only if the holder acquires the New Notes
in the ordinary course of its business and is not participating, does not intend
to participate and has no arrangement or understanding with any person to
participate in a distribution of the New Notes.
Any holder of the Old Notes using the exchange offer to participate in a
distribution of New Notes cannot rely on the no-action letters referred to
above. This includes a broker-dealer that acquired Old Notes directly from us,
but not as a result of market-making activities or other trading activities.
Consequently, the holder must comply with the registration and prospectus
delivery requirements of the Securities Act of 1933 in the absence of an
exemption from such requirements.
Each broker-dealer that receives New Notes for its own account in exchange
for Old Notes, as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such New Notes. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of New Notes received in exchange for Old Notes where such Old
Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The letter of transmittal states that by
acknowledging and delivering a prospectus, a broker-dealer will not be
considered to admit that it is an "underwriter" within the meaning of the
Securities Act of 1933. We have agreed that for a period of 180 days after the
expiration date, we will make this prospectus available to broker-dealers for
use in connection with any such resale. See "Plan of Distribution."
Except as described above, this prospectus may not be used for an offer to
resell, resale or other transfer of New Notes.
The exchange offer is not being made to, nor will we accept tenders for
exchange from, holders of Old Notes in any jurisdiction in which the exchange
offer or the acceptance of it would not be in compliance with the securities or
blue sky laws of such jurisdiction.
TERMS OF THE EXCHANGE
Upon the terms and subject to the conditions of the exchange offer, we will
accept any and all Old Notes validly tendered prior to 5:00 p.m., New York time,
on the expiration date. The date of acceptance for exchange of the Old Notes,
and completion of the exchange offer, is the exchange date, which will be the
first business day following the expiration date (unless extended as described
in this document). We will issue, on or promptly after the exchange date, an
aggregate principal amount of up to $200,000,000 of New Notes for a like
principal amount of outstanding Old Notes tendered and accepted in connection
with the exchange offer. The New Notes issued in connection with the exchange
offer will be delivered on the earliest practicable date following the exchange
date. Holders may tender
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some or all of their Old Notes in connection with the exchange offer, but only
in $1,000 increments of principal amount.
The terms of the New Notes are identical in all material respects to the
terms of the Old Notes, except that the New Notes have been registered under the
Securities Act of 1933 and are issued free from any covenant regarding
registration, including the payment of liquidated damages upon a failure to file
or have declared effective an exchange offer registration statement or to
complete the exchange offer by certain dates. The New Notes will evidence the
same debt as the Old Notes and will be issued under the same indenture and
entitled to the same benefits under that indenture as the Old Notes being
exchanged. As of the date of this prospectus, $200,000,000 in aggregate
principal amount of the Old Notes is outstanding.
In connection with the issuance of the Old Notes, we arranged for the Old
Notes originally purchased by qualified institutional buyers and those sold in
reliance on Regulation S under the Securities Act of 1933 to be issued and
transferable in book-entry form through the facilities of The Depository Trust
Company, acting as depositary. Except as described under "Description of New
Notes--Book-Entry, Delivery and Form," the New Notes will be issued in the form
of a global note registered in the name of DTC or its nominee and each
beneficial owner's interest in it will be transferable in book-entry form
through DTC. See "Description of New Notes--Book-Entry, Delivery and Form."
Holders of Old Notes do not have any appraisal or dissenters' rights in
connection with the exchange offer. Old Notes which are not tendered for
exchange or are tendered but not accepted in connection with the exchange offer
will remain outstanding and be entitled to the benefits of the indenture under
which they were issued, but certain registration and other rights under the
registration rights agreement will terminate and holders of the Old Notes will
generally not be entitled to any registration rights under the registration
rights agreement (subject to limited exceptions).
We shall be considered to have accepted validly tendered Old Notes if and
when we have given oral or written notice to the exchange agent. The exchange
agent will act as agent for the tendering holders for the purposes of receiving
the New Notes from us.
If any tendered Old Notes are not accepted for exchange because of an
invalid tender, the occurrence of certain other events described in this
prospectus or otherwise, we will return the Old Notes, without expense, to the
tendering holder as promptly as possible after the expiration date.
Holders who tender Old Notes will not be required to pay brokerage
commissions or fees or, subject to the instructions in the letter of
transmittal, transfer taxes on exchange of Old Notes in connection with the
exchange offer. We will pay all charges and expenses, other than certain
applicable taxes described below, in connection with the exchange offer. See
"--Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The expiration date for the exchange offer is 5:00 p.m., New York City time,
on , 2001, unless extended by us in our sole discretion, in which case
the term "expiration date" shall mean the latest date and time to which the
exchange offer is extended.
We reserve the right, in our sole discretion:
- to delay accepting any Old Notes, to extend the offer or to terminate the
exchange offer if, in our reasonable judgment, any of the conditions
described below shall not have been satisfied, by giving oral or written
notice of the delay, extension or termination to the exchange agent, and
- to amend the terms of the exchange offer in any manner.
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If we amend the exchange offer in a manner that we consider material, we
will disclose such amendment by means of a prospectus supplement, and we will
extend the exchange offer for a period of five to ten business days.
If we determine to make a public announcement of any delay, extension,
amendment or termination of the exchange offer, we will do so by making a timely
release through an appropriate news agency.
INTEREST ON THE NEW NOTES
Interest on the New Notes will accrue at the rate of 8 7/8% per annum from
the most recent date to which interest on the New Notes has been paid or, if no
interest has been paid, from the date of the indenture governing the Notes.
Interest will be payable semiannually in arrears on February 15 and August 15,
commencing on February 15, 2002.
CONDITIONS TO THE EXCHANGE OFFER
Despite any other term of the exchange offer, we will not be required to
accept for exchange, or exchange New Notes for, any Old Notes and may terminate
the exchange offer as provided in this prospectus before the acceptance of the
Old Notes, if:
- any action or proceeding is instituted or threatened in any court or by or
before any governmental agency relating to the exchange offer which, in
our reasonable judgment, might materially impair our ability to proceed
with the exchange offer or materially impair the contemplated benefits of
the exchange offer to us, or any material adverse development has occurred
in any existing action or proceeding relating to us or any of our
subsidiaries;
- any change, or any development involving a prospective change, in our
business or financial affairs or any of our subsidiaries has occurred
which, in our reasonable judgment, might materially impair our ability to
proceed with the exchange offer or materially impair the contemplated
benefits of the exchange offer to us;
- any law, statue, rule or regulation is proposed, adopted or enacted, which
in our reasonable judgment, might materially impair our ability to proceed
with the exchange offer or materially impair the contemplated benefits of
the exchange offer to us; or
- any governmental approval has not been obtained, which approval we, in our
reasonable discretion, consider necessary for the completion of the
exchange offer as contemplated by this prospectus.
The conditions listed above are for our sole benefit and may be asserted by
us regardless of the circumstances giving rise to any of these conditions. We
may waive these conditions in our reasonable discretion in whole or in part at
any time and from time to time. The failure by us at any time to exercise any of
the above rights shall not be considered a waiver of such right, and such right
shall be considered an ongoing right which may be asserted at any time and from
time to time.
If we determine in our reasonable discretion that any of the conditions are
not satisfied, we may:
- refuse to accept any Old Notes and return all tendered Old Notes to the
tendering holders;
- extend the exchange offer and retain all Old Notes tendered before the
expiration of the exchange offer, subject, however, to the rights of
holders to withdraw these Old Notes (See "--Withdrawal of Tenders" below);
or
- waive unsatisfied conditions relating to the exchange offer and accept all
properly tendered Old Notes which have not been withdrawn.
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PROCEDURES FOR TENDERING
Unless the tender is being made in book-entry form, to tender in the
exchange offer, a holder must:
- complete, sign and date the letter of transmittal, or a facsimile of it,
- have the signatures guaranteed if required by the letter of transmittal,
and
- mail or otherwise deliver the letter of transmittal or the facsimile, the
Old Notes and any other required documents to the exchange agent prior to
5:00 p.m., New York City time, on the expiration date.
Any financial institution that is a participant in DTC's Book-Entry Transfer
Facility system may make book-entry delivery of the Old Notes by causing DTC to
transfer the Old Notes into the exchange agent's account. Although delivery of
Old Notes may be effected through book-entry transfer into the exchange agent's
account at DTC, the letter of transmittal (or facsimile), with any required
signature guarantees and any other required documents, must, in any case, be
transmitted to and received or confirmed by the exchange agent at its address
set forth under the caption "exchange agent" below, prior to 5:00 p.m., New York
City time, on the expiration date. Delivery of documents to DTC in accordance
with its procedures does not constitute delivery to the exchange agent.
The tender by a holder of Old Notes will constitute an agreement between us
and the holder in accordance with the terms and subject to the conditions set
forth in this prospectus and in the letter of transmittal.
The method of delivery of Old Notes and the letter of transmittal and all
other required documents to the exchange agent is at the election and risk of
the holders. Instead of delivery by mail, we recommend that holders use an
overnight or hand delivery service. In all cases, holders should allow
sufficient time to assure delivery to the exchange agent before the expiration
date. No letter of transmittal of Old Notes should be sent to us. Holders may
request their respective brokers, dealers, commercial banks, trust companies or
nominees to effect the tenders for such holders.
Any beneficial owner whose Old Notes are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and who wishes to tender
should contact the registered holder promptly and instruct such registered
holder to tender on behalf of the beneficial owner. If the beneficial owner
wishes to tender on that owner's own behalf, the owner must, prior to completing
and executing the letter of transmittal and delivery of such owner's Old Notes,
either make appropriate arrangements to register ownership of the Old Notes in
the owners' name or obtain a properly completed bond power from the registered
holder. The transfer of registered ownership may take a considerable period of
time.
Signature on a letter of transmittal or a notice of withdrawal must be
guaranteed by an eligible guarantor institution within the meaning of
Rule 17Ad-15 under the Securities Exchange Act of 1934, unless the Old Notes
tendered pursuant thereto are tendered:
- by a registered holder who has not completed the box entitled "Special
Issuance Instructions" or "Special Delivery Instructions" on the letter of
transmittal, or
- for the account of an eligible guarantor institution.
In the event that signatures on a letter or transmittal or a notice of
withdrawal are required to be guaranteed, such guarantee must be by:
- a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc.,
- a commercial bank or trust company having an office or correspondent in
the United States, or
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- an "eligible guarantor institution."
If the letter of transmittal is signed by a person other than the registered
holder of any Old Notes, the Old Notes must be endorsed by the registered holder
or accompanied by a properly completed bond power, in each case signed or
endorsed in blank by the registered holder.
If the letter of transmittal or any Old Notes or bond powers are signed or
endorsed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and, unless such
requirement is waived by us, submit evidence satisfactory to us of their
authority to act in that capacity with the letter of transmittal.
We will determine all questions as to the validity, form, eligibility
(including time of receipt) and acceptance and withdrawal of tendered Old Notes
in our sole discretion. We reserve the absolute right to reject any and all Old
Notes not properly tendered or any Old Notes whose acceptance by us would, in
the opinion of our counsel, be unlawful. We also reserve the right to waive any
defects, irregularities or conditions of tender as to any particular Old Notes
either before or after the expiration date. Our interpretation of the terms and
conditions of the exchange offer (including the instructions in the letter of
transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Old Notes must be cured
within a time period we will determine. Although we intend to request the
exchange agent to notify holders of defects or irregularities relating to
tenders of Old Notes, none of we, the exchange agent nor any other person will
have any duty or incur any liability for failure to give such notification.
Tenders of Old Notes will not be considered to have been made until such defects
or irregularities have been cured or waived. Any Old Notes received by the
exchange agent that are not properly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the exchange
agent to the tendering holders, unless otherwise provided in the letter of
transmittal, as soon as practicable following the expiration date.
In addition, we reserve the right, as set forth above under the caption
"Conditions to the Exchange Offer," to terminate the exchange offer.
By tendering, each holder represents to us, among other things, that:
- the New Notes acquired in connection with the exchange offer are being
obtained in the ordinary course of business of the person receiving the
New Notes, whether or not such person is the holder;
- neither the holder nor any such other person has an arrangement or
understanding with any person to participate in the distribution of such
New Notes; and
- neither the holder nor any such other person is our "affiliate" (as
defined in Rule 405 under the Securities Act of 1933).
If the holder is a broker-dealer that will receive New Notes for its own
account in exchange for Old Notes, it will acknowledge that it acquired such Old
Notes as the result of market-making activities or other trading activities and
it will deliver a prospectus in connection with any resale of such New Notes.
See "Plan of Distribution."
GUARANTEED DELIVERY PROCEDURES
A holder who wishes to tender its Old Notes and:
- whose Old Notes are not immediately available;
- who cannot deliver the holder's Old Notes, the letter of transmittal or
any other required documents to the exchange agent prior to the expiration
date; or
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- who cannot complete the procedures for book-entry transfer before the
expiration date
may effect a tender if:
- the tender is made through an eligible guarantor institution;
- before the expiration date, the exchange agent receives from the eligible
guarantor institution:
-- a properly completed and duly executed notice of guaranteed delivery
by facsimile transmission, mail or hand delivery,
-- the name and address of the holder, and
-- the certificate number(s) of the Old Notes and the principal amount
of Old Notes tendered, stating that the tender is being made and
guaranteeing that, within three New York Stock Exchange trading days
after the expiration date, the letter of transmittal and the
certificates representing the Old Notes (or a confirmation of
book-entry transfer), and any other documents required by the letter
of transmittal will be deposited by the eligible guarantor
institution with the exchange agent; and
- the exchange agent receives, within three New York Stock Exchange trading
days after the expiration date, a properly completed and executed letter
of transmittal or facsimile, as well as the certificate(s) representing
all tendered Old Notes in proper form for transfer or a confirmation of
book-entry transfer, and all other documents required by the letter of
transmittal.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the expiration date.
To withdraw a tender of Old Notes in connection with the exchange offer, a
written facsimile transmission notice of withdrawal must be received by the
exchange agent at its address set forth herein prior to 5:00 p.m., New York City
time, on the expiration date. Any such notice of withdrawal must:
- specify the name of the person who deposited the Old Notes to be
withdrawn,
- identify the Old Notes to be withdrawn (including the certificate number
or numbers and principal amount of such Old Notes),
- be signed by the depositor in the same manner as the original signature on
the letter of transmittal by which such Old Notes were tendered (including
any required signature guarantees) or be accompanied by documents or
transfer sufficient to have the trustee register the transfer of such Old
Notes into the name of the person withdrawing the tender, and
- specify the name in which any such Old Notes are to be registered, if
different from that of the depositor.
We will determine all questions as to the validity, form and eligibility
(including time of receipt) of such withdrawal notices. Any Old Notes so
withdrawn will be considered not to have been validly tendered for purposes of
the exchange offer, and no New Notes will be issued in exchange for such Old
Notes unless the Old Notes withdrawn are validly re-tendered. Any Old Notes that
have been tendered but are not accepted for exchange or are withdrawn will be
returned to the holder without cost to such holder as soon as practicable after
withdrawal, rejection of tender or termination of the exchange offer. Properly
withdrawn Old Notes may be re-tendered by following one of the procedures
described above under the caption "Procedures for Tendering" at any time prior
to the expiration date.
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EXCHANGE AGENT
The Bank of New York has been appointed as exchange agent in connection with
the exchange offer. Questions and requests for assistance, requests for
additional copies of this prospectus or of the letter of transmittal should be
directed to the exchange agent, at its offices at One Wall Street, New York,
N.Y. 10286. The exchange agent's telephone number is (212) 495-1784 and
facsimile number is (212) 815-5915.
FEES AND EXPENSES
We will not make any payment to brokers, dealers or others soliciting
acceptances of the exchange offer. We will pay certain other expenses to be
incurred in connection with the exchange offer, including the fees and expenses
of the exchange agent, accounting and certain legal fees.
Holders who tender their Old Notes for exchange will not be obligated to pay
transfer taxes. If, however:
- New Notes are to be delivered to, or issued in the name of, any person
other than the registered holder of the Old Notes tendered, or
- tendered Old Notes are registered in the name of any person other than the
person signing the letter of transmittal, or
- a transfer tax is imposed for any reason other than the exchange of Old
Notes in connection with the exchange offer,
then the amount of any such transfer taxes (whether imposed on the registered
holder or any other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption from them is not
submitted with the letter of transmittal, the amount of such transfer taxes will
be billed directly to the tendering holder.
ACCOUNTING TREATMENT
The New Notes will be recorded at the same carrying value as the Old Notes
as reflected in our accounting records on the date of the exchange. Accordingly,
we will not recognize any gain or loss for accounting purposes upon the
completion of the exchange offer. The expenses of the exchange offer that we pay
will increase our deferred financing costs in accordance with generally accepted
accounting principles.
CONSEQUENCES OF FAILURES TO PROPERLY TENDER OLD NOTES IN THE EXCHANGE
Issuance of the New Notes in exchange for the Old Notes under the exchange
offer will be made only after timely receipt by the exchange agent of such Old
Notes, a properly completed and duly executed letter of transmittal and all
other required documents. Therefore. holders of the Old Notes desiring to tender
such Old Notes in exchange for New Notes should allow sufficient time to ensure
timely delivery. We are under no duty to give notification of defects or
irregularities of tenders of Old Notes for exchange. Old Notes that are not
tendered or that are tendered but not accepted by us will, following completion
of the exchange offer, continue to be subject to the existing restrictions upon
transfer thereof under the Securities Act of 1933, and, upon completion of the
exchange offer, certain registration rights under the registration rights
agreement will terminate.
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In the event the exchange offer is completed, we generally will not be
required to register the remaining Old Notes (subject to limited exceptions).
Remaining Old Notes will continue to be subject to the following restrictions on
transfer:
- the remaining Old Notes may be resold only if registered pursuant to the
Securities Act of 1933, if any exemption from registration is available,
or if neither such registration nor such exemption is required by law, and
- the remaining Old Notes will bear a legend restricting transfer in the
absence of registration or an exemption.
We do not currently anticipate that we will register the remaining Old Notes
under the Securities Act of 1933. To the extent that Old Notes are tendered and
accepted in connection with the exchange offer, any trading market for remaining
Old Notes could be adversely affected.
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DESCRIPTION OF NEW NOTES
The New Notes will be issued under the indenture dated August 14, 2001 (the
"Indenture"), among the Issuers, the Guarantors, and The Bank of New York, as
trustee (the "Trustee"). The following summaries of certain material provisions
of the Indenture and the registration rights agreement dated August 14, 2001
(the "Registration Rights Agreement"), by and among the Issuers, the Guarantors
and the initial purchasers do not purport to be complete, and where reference is
made to particular provisions of the Indenture and the Registration Rights
Agreement, such provisions, including the definitions of certain terms, are
incorporated by reference as a part of such summaries or terms, which are
qualified in their entirety by such reference.
The definitions of certain capitalized terms used in the following summary
are set forth below under "--Certain Definitions." For purposes of this section,
references to "Issuers" or "we," "our," or "us" include only Sun International
Hotels Limited ("Sun International") and Sun International North America, Inc.
("SINA") and their respective successors in accordance with the terms of the
Indenture and, except pursuant to the terms of the Guarantees, not their
respective Subsidiaries.
When we use the term "Notes" in this Description of New Notes, the term
includes the Old Notes and the New Notes.
BRIEF DESCRIPTION OF THE NOTES AND THE GUARANTEES
THE NOTES
The Notes are:
- our unsecured senior subordinated obligations;
- subordinated in right of payment to certain of our other obligations;
- ranked equal in right of payment with all of our existing and future
senior subordinated Indebtedness;
- effectively subordinated to all of our secured Indebtedness to the extent
of the collateral securing such Indebtedness; and
- guaranteed on a senior subordinated basis by the Guarantors.
Notes will be issued in fully registered form only, without coupons, in
denominations of $1,000 and integral multiples thereof.
The term "SUBSIDIARIES" as used in this Description of New Notes does not
include Unrestricted Subsidiaries. Under certain circumstances we will be able
to designate current or future Subsidiaries as Unrestricted Subsidiaries.
Unrestricted Subsidiaries will not be subject to the restrictive covenants set
forth in the Indenture.
THE GUARANTEES
The Notes will be jointly and severally irrevocably and unconditionally
guaranteed (the "Guarantees") on a senior subordinated basis by all of our
present Subsidiaries (other than minor subsidiaries currently in the process of
being dissolved) (the "Guarantors"). The Notes will also be guaranteed by each
of our future Subsidiaries. The obligations of each Guarantor under its
Guarantee, however, will be limited in a manner intended to avoid it being
deemed a fraudulent conveyance under applicable law. See "--Bankruptcy
Limitations." The term "SUBSIDIARIES" as used in this Description of New Notes,
however, does not include Unrestricted Subsidiaries.
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GENERAL
In the event that (i) the Exchange Offer Registration Statement is not
declared effective by the SEC on or prior to January 11, 2002, (ii) the exchange
offer is not consummated on or before the 30th business day after the Exchange
Offer Registration Statement is declared effective, (iii) if obligated to file a
Shelf Registration Statement, the Shelf Registration Statement is not declared
effective on or prior to the 120th day after the obligation to file a Shelf
Registration Statement arises or (iv) if the Exchange Offer Registration
Statement or the Shelf Registration Statement, as the case may be, is declared
effective but thereafter ceases to be effective or useable for such time of
non-effectiveness or non-usability (each, a "Registration Default"), the Issuers
and Guarantors have agreed to pay to each Holder of Transfer Restricted
Securities (as defined the registration rights agreement) affected thereby
liquidated damages ("Liquidated Damages") in an amount equal to $0.05 per week
per $1,000 principal amount of Transfer Restricted Securities held by such
Holder for each week or portion thereof that the Registration Default continues
for the first 90-day period immediately following the occurrence of such
Registration Default. The amount of Liquidated Damages shall increase by an
additional $0.05 per week per $1,000 in principal amount of Transfer Restricted
Securities with respect to each subsequent 90-day period until all Registration
Defaults have been cured, up to a maximum amount of Liquidated Damages of $0.50
per week per $1,000 in principal amount of Transfer Restricted Securities. The
Issuers and Guarantors shall not be required to pay Liquidated Damages for more
than one Registration Default at any given time. Following the cure of all
Registration Defaults, the accrual of Liquidated Damages will cease.
PRINCIPAL, MATURITY AND INTEREST; ADDITIONAL NOTES
We will issue Notes with a maximum aggregate principal amount of
$200 million. The Indenture provides, in addition to the $200 million aggregate
principal amount of Notes issued on the Issue Date, for the issuance of
additional Notes having identical terms and conditions to the Notes offered
hereby (the "Additional Notes"), subject to compliance with the terms of the
Indenture, including the covenant "Limitation on Incurrence of Additional
Indebtedness and Disqualified Capital Stock." Interest will accrue on the
Additional Notes issued pursuant to the Indenture from and including the date of
issuance of such Additional Notes. Any such Additional Notes will be issued on
the same terms as the Notes and will constitute part of the same series of
securities as the Notes and will vote together as one series on all matters with
respect to the Notes. All references to Notes herein includes the Additional
Notes; PROVIDED that such Additional Notes could be incurred as additional
Indebtedness pursuant to the covenant "Limitation on Incurrence of Additional
Indebtedness and Disqualified Capital Stock."
The Notes will mature on August 15, 2011. The Notes will bear interest at
the rate per annum stated on the cover page hereof from the date of issuance or
from the most recent Interest Payment Date to which interest has been paid or
provided for, payable semi-annually in arrears on February 15 and August 15 of
each year, commencing February 15, 2002, to the persons in whose names such
Notes are registered at the close of business on the February 1 or August 1
immediately preceding such Interest Payment Date. Interest will be calculated on
the basis of a 360-day year consisting of twelve 30-day months.
METHODS OF RECEIVING PAYMENTS ON THE NOTES
Principal of, premium, if any, and interest and Liquidated Damages, if any,
on the Notes will be payable, and the Notes may be presented for registration of
transfer or exchange, at the office or agency of the Issuers maintained for such
purpose, which office or agency shall be maintained in the Borough of Manhattan,
The City of New York. At the option of the Issuers, payment of interest may be
made by check mailed to the Holders of the Notes at the addresses set forth upon
the registry books of the Issuers; PROVIDED that all payments with respect to
Global Notes and Certificated
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Securities, the holders of which have given wire transfer instructions to the
Issuers and the paying agent, will be required to be made by wire transfer of
immediately available funds to the accounts specified by the holders thereof. No
service charge will be made for any registration of transfer or exchange of
Notes, but the Issuers may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith. Until otherwise
designated by the Issuers, the Issuers' office or agency will be the corporate
trust office of the Trustee in the Borough of Manhattan, The City of New York.
SUBORDINATION
The Notes and the Guarantees will be general, unsecured obligations of the
Issuers and the Guarantors, respectively, subordinated in right of payment to
all Senior Debt of the Issuers and the Guarantors, respectively. On a pro forma
basis, at June 30, 2001, after giving effect to the issuance of the Notes and
the application of the proceeds therefrom as described in "Use of Proceeds," Sun
International on a consolidated basis has $27.9 million of Senior Debt
outstanding and an additional $345.8 million of unused availability under the
Credit Agreement.
The Indenture provides that no payment of any kind or character from any
source may be made by or on behalf of the Issuers or a Guarantor, as applicable,
on account of the principal of, premium, if any, or interest or Liquidated
Damages or Additional Amounts on the Notes (including any repurchases of Notes
and rescission payments), or on account of the redemption provisions of the
Notes, for cash or property (other than from the trust described under "--Legal
Defeasance and Covenant Defeasance"), (i) upon the maturity of any Senior Debt
of the Issuers or such Guarantor by lapse of time, acceleration (unless waived)
or otherwise, unless and until all principal of, premium, if any, the interest
on and any fee or other amount due in respect of such Senior Debt are first paid
in full in cash or Cash Equivalents or otherwise to the extent holders accept
satisfaction of amounts due by settlement in other than cash or Cash
Equivalents, or (ii) in the event of default in the payment of any principal of,
premium, if any, or interest on or any fee or other amount due in respect of
Senior Debt of the Issuers or such Guarantor when it becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration or
otherwise (a "Payment Default"), unless and until such Payment Default has been
cured or waived or otherwise has ceased to exist.
Upon (i) the happening of an event of default (other than a Payment Default)
that permits the holders of Senior Debt to declare such Senior Debt to be due
and payable and (ii) written notice of such event of default given to the
Trustee by the Representative under the Credit Agreement or the holders of an
aggregate of at least $25 million principal amount outstanding of any other
Senior Debt or their representative (a "Payment Blockage Notice"), then, unless
and until such event of default has been cured or waived or otherwise has ceased
to exist (including by reason of the repayment in full of such Senior Debt in
cash or Cash Equivalents), no payment (by set-off or otherwise) may be made by
or on behalf of the Issuers or any Guarantor which is an obligor under such
Senior Debt on account of the principal of, premium, if any, or interest or
Liquidated Damages or Additional Amounts on the Notes, including any repurchases
of Notes and rescission payments, other than payments made from the trust
described under "--Legal Defeasance and Covenant Defeasance"; PROVIDED, HOWEVER,
that so long as the Credit Agreement is in effect, a Payment Blockage Notice may
only be given by the Representative under the Credit Agreement unless otherwise
agreed in writing by the requisite lenders under the Credit Agreement.
Notwithstanding the foregoing, unless the Senior Debt in respect of which such
event of default exists has been declared due and payable in its entirety within
179 days after the Payment Blockage Notice is delivered as set forth above (the
"Payment Blockage Period") (and such declaration has not been rescinded or
waived), at the end of the Payment Blockage Period, the Issuers and the
Guarantors shall be required to pay all sums not paid to the Holders of the
Notes during the Payment Blockage Period due to the foregoing prohibitions and
to resume all other payments as and when due on the Notes. Any number of Payment
Blockage Notices may be given; PROVIDED, HOWEVER,
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that (i) not more than one Payment Blockage Notice shall be given within a
period of any 360 consecutive days, and (ii) no default that existed upon the
date of such Payment Blockage Notice or the commencement of such Payment
Blockage Period (whether or not such event of default is on the same issue of
Senior Debt) shall be made the basis for the commencement of any other Payment
Blockage Period, unless such event of default shall have been cured or waived
for a period of not less than 90 days.
Upon any distribution of assets of either Issuer or any Guarantor upon any
dissolution, winding up, total or partial liquidation or reorganization of
either Issuer or a Guarantor, whether voluntary or involuntary, in bankruptcy,
insolvency, receivership or a similar proceeding or upon assignment for the
benefit of creditors or any marshalling of assets or liabilities, (i) the
holders of all Senior Debt of such Issuer or such Guarantor, as applicable, will
first be entitled to receive payment in full in cash or Cash Equivalents or
otherwise to the extent holders accept satisfaction of amounts due by settlement
in other than cash or Cash Equivalents before the Holders are entitled to
receive any payment on account of principal of, premium, if any, and interest
and Liquidated Damages or Additional Amounts on the Notes, including any
repurchases of Notes and rescission payments, other than payments by way of the
issuance of Junior Securities or from the trust described under "--Legal
Defeasance and Covenant Defeasance," and (ii) any payment or distribution of
assets of such Issuer or such Guarantor of any kind or character from any
source, whether in cash, property or securities, other than Junior Securities or
from the trust described under "--Legal Defeasance and Covenant Defeasance," to
which the Holders or the Trustee on behalf of the Holders would be entitled (by
set-off or otherwise), except for the subordination provisions contained in the
Indenture, will be paid by the liquidating trustee or agent or other person
making such a payment or distribution directly to the holders of such Senior
Debt or their representative to the extent necessary to make payment in full in
cash or Cash Equivalents on all such Senior Debt remaining unpaid, after giving
effect to any concurrent payment or distribution to the holders of such Senior
Debt.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets (other than, where applicable, Junior Securities or from
the trust described under "--Legal Defeasance and Covenant Defeasance") shall be
received by the Trustee or the Holders at a time when such payment or
distribution is prohibited by the foregoing provisions, such payment or
distribution shall be held in trust for the benefit of the holders of such
Senior Debt, and shall be paid or delivered by the Trustee or such Holders, as
the case may be, to the holders of such Senior Debt remaining unpaid or
unprovided for or to their representative or representatives, or to the trustee
or trustees under any indenture pursuant to which any instruments evidencing any
of such Senior Debt may have been issued, ratably according to the aggregate
principal amounts remaining unpaid on account of such Senior Debt held or
represented by each, for application to the payment of all such Senior Debt
remaining unpaid, to the extent necessary to pay all such Senior Debt in full in
cash or Cash Equivalents or otherwise to the extent holders accept satisfaction
of amounts due by settlement in other than cash or Cash Equivalents after giving
effect to any concurrent payment or distribution to the holders of such Senior
Debt.
No provision contained in the Indenture or the Notes will affect the
obligation of the Issuers and the Guarantors, which is absolute and
unconditional, to pay, when due, principal of, premium, if any, and interest and
Liquidated Damages on the Notes. The subordination provisions of the Indenture
and the Notes will not prevent the occurrence of any Default or Event of Default
under the Indenture or limit the rights of the Trustee or any Holder to pursue
any other rights or remedies with respect to the Notes.
As a result of these subordination provisions, in the event of the
liquidation, bankruptcy, reorganization, insolvency, receivership or similar
proceeding or an assignment for the benefit of the creditors of the Issuers or a
marshalling of assets or liabilities of the Issuers, Holders of the Notes may
receive ratably less than other creditors. The Indenture will limit, subject to
certain financial tests, the
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amount of additional Indebtedness, including Senior Debt, the Issuers and their
Subsidiaries can incur. See "Certain Covenants--Limitation on Incurrence of
Additional Indebtedness and Disqualified Capital Stock."
CERTAIN BANKRUPTCY LIMITATIONS
Each Issuer is a holding company, conducting all its business through
Subsidiaries, which have guaranteed or will guarantee the Issuers' obligations
with respect to the Notes, and Unrestricted Subsidiaries. Holders of the Notes
will be direct creditors of each Guarantor by virtue of its guarantee.
Nonetheless, in the event of the bankruptcy or financial difficulty of a
Guarantor, such Guarantor's obligations under its guarantee may be subject to
review and avoidance under state, United States Federal and foreign fraudulent
transfer laws. Among other things, such obligations may be avoided if a court
concludes that such obligations were incurred for less than reasonably
equivalent value or fair consideration at a time when the Guarantor was
insolvent, was rendered insolvent, or was left with inadequate capital to
conduct its business. A court would likely conclude that a Guarantor did not
receive reasonably equivalent value or fair consideration to the extent that the
aggregate amount of its liability on its guarantee exceeds the economic benefits
it received in the issuance of the Notes. The obligations of each Guarantor
under its guarantee will be limited in a manner intended to cause it not to be a
fraudulent conveyance under applicable law, although no assurance can be given
that a court would give the Holder the benefit of such provision. See "Risk
Factors--The guarantees may not be enforceable because of fraudulent conveyance
laws."
If the obligations of a Guarantor under its guarantee were avoided, Holders
of Notes would have to look to the assets of any remaining Guarantors for
payment. There can be no assurance in that event that such assets would suffice
to pay the outstanding principal and interest on the Notes.
OPTIONAL REDEMPTION
The Issuers will not have the right to redeem any Notes prior to August 15,
2006 (other than out of the Net Cash Proceeds of a Qualified Equity Offering, as
described in the next following paragraph, or pursuant to a Required Regulatory
Redemption or an Optional Tax Redemption). The Notes will be redeemable for cash
at the option of the Issuers, in whole or in part, at any time on or after
August 15, 2006 upon not less than 30 days' nor more than 60 days' notice to
each Holder of Notes, at the following redemption prices (expressed as
percentages of the principal amount) if redeemed during the 12-month period
commencing August 15 of the years indicated below, in each case (subject to the
right of Holders of record on a Record Date to receive interest due on an
Interest Payment Date that is on or prior to such Redemption Date) together with
accrued and unpaid interest and Liquidated Damages, if any, thereon to the
Redemption Date:
YEAR PERCENTAGE
---- ----------
2006........................................................ 104.438%
2007........................................................ 102.958%
2008........................................................ 101.479%
2009 and thereafter......................................... 100.000%
On or prior to August 15, 2004, upon one or more Qualified Equity Offerings,
we may redeem up to 35% of the aggregate principal amount of the Notes issued
pursuant to the Indenture within 60 days of such Qualified Equity Offering, on
not less than 30 days, but not more than 60 days, notice to each Holder of the
Notes to be redeemed, with cash from the Net Cash Proceeds of such Qualified
Equity Offering, at 108.875% of the principal amount thereof (subject to the
right of Holders of record on a Record Date to receive interest due on an
Interest Payment Date that is on or prior to such Redemption Date), together
with accrued and unpaid interest and Liquidated Damages, if any, to the date of
redemption; PROVIDED, HOWEVER, that immediately following each such redemption
not less than
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65% of the aggregate principal amount of the Notes issued pursuant to the
Indenture remain outstanding.
REQUIRED REGULATORY REDEMPTION
If a Holder or a beneficial owner of a Note is required by any Gaming
Authority to be found suitable to hold the Notes, the Holder shall apply for a
finding of suitability within 30 days after a Gaming Authority requests or
sooner if so required by such Gaming Authority. The applicant for a finding of
suitability must pay all costs of the investigation for such finding of
suitability. If a Holder or beneficial owner is required to be found suitable to
hold the Notes and is not found suitable by a Gaming Authority, the Holder
shall, to the extent required by applicable law, dispose of his Notes within
30 days or within that time prescribed by a Gaming Authority, whichever is
earlier. If the Holder fails to dispose of its Notes within such time period,
the Issuers may, at their option, redeem the Holder's Notes (a "Required
Regulatory Redemption") at, depending on applicable law, (i) the principal
amount thereof, together with accrued and unpaid interest and Liquidated
Damages, if any, to the date of the finding of unsuitability by a Gaming
Authority, (ii) the amount that such Holder paid for the Notes, (iii) the fair
market value of the Notes, (iv) the lowest of clauses (i), (ii) and (iii), or
(v) such other amount as may be determined by the appropriate Gaming Authority.
See "Risk Factors--We may require you to dispose of your Notes or redeem your
Notes if required by applicable gaming regulations."
PAYMENT OF ADDITIONAL AMOUNTS
The Issuers will, subject to certain limitations and exceptions (as set
forth below), pay to each Holder such amounts (the "Additional Amounts") as may
be necessary in order that every net payment or deemed payment of
(i) principal, premium, Liquidated Damages and interest, if any, with respect to
a Note, or (ii) net proceeds on the sale or exchange of a Note, each after
deduction or withholding for or on account of any taxes, duties, assessments or
governmental charges of whatever nature imposed or levied by or on behalf of the
government of The Bahamas or any authority thereof or therein having power to
tax, will result in the receipt by the Holders of the amounts that would have
been received by them had no such deduction or withholding been required;
PROVIDED, HOWEVER, that no such Additional Amounts shall be payable in respect
of any Note for:
1. any tax, duty, assessment, or other governmental charge which would not
have been imposed but for the fact that such Holder:
(a) is a resident, domiciliary or national of, or engaged in business or
maintains a permanent establishment or was physically present in, The
Bahamas or any political subdivision thereof or therein or otherwise has
some connection with The Bahamas other than the mere ownership of, or
receipt of payment under, such Note;
(b) presented such Note for payment in The Bahamas or any political
subdivision thereof or therein, unless such Note could not have been
presented for payment elsewhere; or
(c) presented such Note for payment more than 30 days after the date on
which the payment in respect of such Note became due and payable or provided
for, whichever is later, except to the extent that the Holder would have
been entitled to such Additional Amounts if it had presented such Note for
payment on any day within such period of 30 days;
2. any estate, inheritance, gift, sales, transfer, or similar tax,
assessment or other governmental charge or any taxes, duties, assessments or
other governmental charges that are payable otherwise than by deduction or
withholding from payments on the Notes;
72
3. any tax, duty, assessment, or other governmental charge imposed on a
Holder that is not the beneficial owner of a Note to the extent that the
beneficial owner would not have been entitled to the payment of Additional
Amounts had the beneficial owner directly held the Note; or
4. any combination of items (1), (2) and (3).
Whenever there is mentioned, in any context, the payment of the principal of
or any premium or interest on, or in respect of, any Note or the net proceeds
received on the sale or exchange of any Note, such mention shall be deemed to
include mention of the payment of Additional Amounts provided for in the
Indenture to the extent that, in such context, Additional Amounts are, were or
would be payable in respect thereof pursuant to the Indenture.
Without limiting a Holder's right to receive payment of Additional Amounts,
in the event that Additional Amounts actually paid with respect to the Notes are
based on rates of deduction or withholding of Bahamian taxes in excess of the
appropriate rate applicable to the Holder of such Notes and, as a result
thereof, such Holder of Notes is entitled to make a claim for a refund or credit
of such excess, then such Holder of Notes shall, by accepting the Notes and
receiving a payment of Additional Amounts, be deemed to have assigned and
transferred all right, title and interest to any such claim for a refund or
credit of such excess to the Issuers. By making such assignment, the Holder of
Notes makes no representation or warranty that the Issuers will be entitled to
receive such claim for a refund or credit and incurs no other obligation with
respect thereto.
OPTIONAL TAX REDEMPTION
The Notes may be redeemed at the option of the Issuers, in whole but not in
part, upon not less than 30 nor more than 60 days' notice given as provided in
the Indenture, at any time at a redemption price equal to the principal amount
thereof, plus accrued and unpaid interest, if any, thereon, plus Liquidated
Damages, if any, to the date fixed for redemption if, as a result of any change
in or amendment to the laws, treaties, rulings or regulations of The Bahamas, or
of any political subdivision or taxing authority thereof or therein, or any
change in the official position of the applicable taxing authority regarding the
application or interpretation of such laws, treaties, rulings or regulations
(including a holding, judgment or order of a court of competent jurisdiction) or
any execution thereof or amendment thereto, which is enacted into law or
otherwise becomes effective after the date of this prospectus, either Issuer is
or would be required on the next succeeding interest payment date to pay
Additional Amounts on the Notes as a result of the imposition of a Bahamian tax
and the payment of such Additional Amounts cannot be avoided by the use of any
reasonable measures available to the Issuers which do not cause the Issuers to
incur any material costs. The Issuers shall also pay to holders on the
redemption date any Additional Amounts then due and which will become due as a
result of the redemption or would otherwise be payable.
Prior to the publication of any notice of redemption in accordance with the
foregoing, the Issuers shall deliver to the Trustee an officer's certificate
stating that (i) the payment of Additional Amounts cannot be avoided by the use
of any reasonable measures available to the Issuers which do not cause the
Issuers to incur any material costs and (ii) the Issuers are entitled to effect
such redemption based on the written, substantially unqualified opinion of
counsel, which counsel shall be reasonably acceptable to the Trustee, that the
Issuers have or will become obligated to pay Additional Amounts as a result of
such change or amendment. The notice, once delivered by the Issuers to the
Trustee, will be irrevocable.
SELECTION AND NOTICE
In the case of a partial redemption (other than a Required Regulatory
Redemption), the Trustee shall select the Notes or portions thereof for
redemption on a PRO RATA basis, by lot or in such other manner it deems
appropriate and fair. The Notes may be redeemed in part in multiples of $1,000
only.
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The Notes will not have the benefit of any sinking fund.
Except as required by a Gaming Authority with respect to a Required
Regulatory Redemption, notice of any redemption will be sent, by first class
mail, at least 30 days and not more than 60 days prior to the date fixed for
redemption to the Holder of each Note to be redeemed to such Holder's last
address as then shown upon the registry books of the Registrar. Any notice which
relates to a Note to be redeemed in part only must state the portion of the
principal amount equal to the unredeemed portion thereof and must state that on
and after the date of redemption, upon surrender of such Note, a new Note or
Notes in a principal amount equal to the unredeemed portion thereof will be
issued. On and after the date of redemption, interest will cease to accrue on
the Notes or portions thereof called for redemption, unless the Issuers default
in the payment thereof.
CERTAIN COVENANTS
Set forth below are certain covenants contained in the Indenture. During any
period of time that (i) the Notes have Investment Grade Status and (ii) no
Default or Event of Default has occurred and is continuing under the Indenture
with respect to the Notes, the Issuers and their Subsidiaries will not be
subject to the provisions of the Indenture with respect to the Notes described
below under "--Limitation on Incurrence of Additional Indebtedness and
Disqualified Capital Stock," "--Limitation on Restricted Payments,"
"--Limitation on Sale of Assets and Subsidiary Stock" and clause (iv) of the
first paragraph of the covenant described under "--Limitation on Merger,
Consolidation or Sale of Sun International" (collectively, the "Suspended
Covenants"). In the event that the Issuers and their Subsidiaries are not
subject to the Suspended Covenants with respect to the Notes for any period of
time as a result of the preceding sentence and, subsequently, either of the
Rating Agencies withdraws its rating or assigns the Notes a rating below the
required Investment Grade Ratings, then the Issuers and their Subsidiaries will
thereafter again be subject to the Suspended Covenants for the benefit of the
Notes and compliance with the Suspended Covenant with respect to Restricted
Payments made after the time of such withdrawal or assignment will be calculated
in accordance with the terms of the covenant described below under "--Limitation
on Restricted Payments" as if such covenant had been in effect during the entire
period of time from the Issue Date with respect to the Notes.
REPURCHASE OF NOTES AT THE OPTION OF THE HOLDER UPON A CHANGE OF CONTROL
The Indenture provides that in the event that a Change of Control Triggering
Event has occurred, each Holder of Notes will have the right, at such Holder's
option, pursuant to an irrevocable and unconditional offer by the Issuers (the
"Change of Control Offer"), to require the Issuers to repurchase all or any part
of such Holder's Notes (provided, that the principal amount of such Notes must
be $1,000 or an integral multiple thereof) on a date (the "Change of Control
Purchase Date") that is no later than 45 Business Days after the occurrence of
such Change of Control Triggering Event, at a cash price equal to 101% of the
principal amount thereof (the "Change of Control Purchase Price"), together with
accrued and unpaid interest and Liquidated Damages, if any, to the Change of
Control Purchase Date. The Change of Control Offer shall be made within 20
Business Days following a Change of Control Triggering Event and shall remain
open for at least 20 Business Days following its commencement (the "Change of
Control Offer Period"). Upon expiration of the Change of Control Offer Period,
the Issuers promptly shall purchase all Notes properly tendered in response to
the Change of Control Offer.
As used herein, a "Change of Control Triggering Event" shall be deemed to
occur if either of the Rating Agencies shall downgrade or withdraw their rating
of the Notes as a result of or, in any case, within 90 days of, a Change of
Control. A "Change of Control" means (i) any sale, transfer or other conveyance,
whether direct or indirect, of all or substantially all of the assets, on a
consolidated basis, of Sun International in one transaction or a series of
related transactions (in each case other than to a person that is a Permitted
Holder); (ii) any merger or consolidation of Sun International with or into
74
any person if, immediately after giving effect to such transaction, any "person"
or "group" (as such terms are used for purposes of Sections 13(d) and 14(d) of
the Exchange Act, whether or not applicable) (other than one or more Permitted
Holders) is or becomes the "beneficial owner," directly or indirectly, of more
than 50% of the total voting power in the aggregate normally entitled to vote in
the election of directors, managers, or trustees, as applicable, of the
surviving entity or entities; (iii) any "person" or "group" (as such terms are
used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or
not applicable) (other than one or more Permitted Holders) is or becomes the
"beneficial owner," directly or indirectly, of more than 50% of the total voting
power in the aggregate of all classes of Capital Stock of Sun International then
outstanding normally entitled to vote in elections of directors; (iv) during any
period of 12 consecutive months after the Issue Date, individuals who at the
beginning of any such 12-month period constituted the Board of Directors of Sun
International (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of Sun
International was approved by a vote of a majority of the directors then still
in office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of Sun International
then in office; or (v) the adoption of a plan relating to the liquidation or
dissolution of Sun International.
On or before the Change of Control Purchase Date, the Issuers will
(i) accept for payment Notes or portions thereof properly tendered pursuant to
the Change of Control Offer, (ii) deposit with the Paying Agent cash sufficient
to pay the Change of Control Purchase Price (together with accrued and unpaid
interest and Liquidated Damages, if any) of all Notes so tendered and
(iii) deliver to the Trustee Notes so accepted together with an Officers'
Certificate listing the Notes or portions thereof being purchased by the
Issuers. The Paying Agent promptly will pay the Holders of Notes so accepted an
amount equal to the Change of Control Purchase Price (together with accrued and
unpaid interest and Liquidated Damages, if any), and the Trustee promptly will
authenticate and deliver to such Holders a new Note equal in principal amount to
any unpurchased portion of the Note surrendered. Any Notes not so accepted will
be delivered promptly by the Issuers to the Holder thereof. The Issuers publicly
will announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Purchase Date.
The phrase "all or substantially all" of the assets of Sun International
will likely be interpreted under applicable state law and will be dependent upon
particular facts and circumstances. As a result, there may be a degree of
uncertainty in ascertaining whether a sale or transfer of "all or substantially
all" of the assets of Sun International has occurred.
The Issuers' ability to pay such purchase price is, and may in the future
be, limited by the terms of the Credit Agreement, as the same may be amended or
other agreements relating to Senior Debt. The occurrence of certain of the
events that would constitute a Change of Control may constitute a default under
the Credit Agreement, as the same may be amended. Future indebtedness of the
Issuers may contain prohibitions of certain events which would constitute a
Change of Control or require the Issuers to offer to redeem such indebtedness
upon a Change of Control. Moreover, the exercise by the Holders of Notes of
their right to require the Issuers to purchase the Notes could cause a default
under such future indebtedness, even if the Change of Control itself does not,
due to the financial effect of such purchase on the Issuers. Finally, the
Issuers' ability to pay cash to Holders of Notes upon a purchase may be limited
by the Issuers' then existing financial resources. There can be no assurance
that sufficient funds will be available when necessary to make any required
purchases.
Any Change of Control Offer will be made in compliance with any and all
applicable laws, rules and regulations, including, if applicable,
Regulation 14E under the Exchange Act and the rules thereunder and any and all
other applicable United States Federal and state securities laws. To the extent
that the provisions of any securities laws or regulations conflict with the
provisions of this
75
covenant, our compliance or compliance by any of the Guarantors with such laws
and regulations shall not in and of itself cause a breach of their obligations
under such covenant.
LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS AND DISQUALIFIED CAPITAL
STOCK
The Indenture provides that, except as set forth below in this covenant, the
Issuers and the Guarantors will not, and will not permit any of their
Subsidiaries to, individually or collectively, directly or indirectly, issue,
assume, guaranty, incur, become directly or indirectly liable with respect to
(including as a result of an Acquisition), or otherwise become responsible for,
contingently or otherwise (individually and collectively, to "incur" or, as
appropriate, an "incurrence"), any Indebtedness or any Disqualified Capital
Stock (including Acquired Indebtedness), except Permitted Indebtedness.
Notwithstanding the foregoing, if:
(i) no Event of Default shall have occurred and be continuing at the time
of, or would occur after giving effect on a pro forma basis to, such incurrence
of Indebtedness or Disqualified Capital Stock, and
(ii) on the date of such incurrence (the "Incurrence Date"), the
Consolidated Coverage Ratio of Sun International for the Reference Period
immediately preceding the Incurrence Date, after giving effect on a pro forma
basis to such incurrence of such Indebtedness or Disqualified Capital Stock and,
to the extent set forth in the definition of Consolidated Coverage Ratio, the
use of proceeds thereof, would be at least 2.5 to l (the "Debt Incurrence
Ratio"),
then the Issuers and the Guarantors may incur such Indebtedness or Disqualified
Capital Stock.
Acquired Indebtedness shall be deemed to have been incurred at the time the
person who incurred such Indebtedness becomes a Subsidiary of either of the
Issuers (including upon designation of any Unrestricted Subsidiary or other
person as a Subsidiary) or is merged with or into or consolidated with either of
the Issuers or a Subsidiary of either of the Issuers, as applicable. Upon each
incurrence of Indebtedness, the Issuers may designate pursuant to which
provision of this covenant (including pursuant to which clause of the definition
of "Permitted Indebtedness") such Indebtedness is being incurred and the Issuers
may subdivide an amount of Indebtedness and designate more than one provision
pursuant to which such amount of Indebtedness is being incurred and such
Indebtedness shall not be deemed to have been incurred or outstanding under any
other provision of this covenant.
LIMITATION ON RESTRICTED PAYMENTS
The Indenture provides that the Issuers and the Guarantors will not, and
will not permit any of their Subsidiaries to, individually or collectively,
directly or indirectly, make any Restricted Payment if, after giving effect to
such Restricted Payment on a pro forma basis, (i) a Default or an Event of
Default shall have occurred and be continuing, (ii) Sun International is not
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Debt Incurrence Ratio in the covenant "Limitation on Incurrence of Additional
Indebtedness and Disqualified Capital Stock," or (iii) the aggregate amount of
all Restricted Payments made by Sun International and its Subsidiaries,
including after giving effect to such proposed Restricted Payment, from and
after the Issue Date, would exceed, without duplication, the sum of (a) 50% of
the aggregate Consolidated Net Income of Sun International for the period (taken
as one accounting period), commencing January 1, 2001 to and including the last
day of the fiscal quarter ended immediately prior to the date of each such
calculation (or, in the event Consolidated Net Income for such period is a
deficit, then minus 100% of such deficit), plus (b) the aggregate Net Cash
Proceeds received by Sun International from the sale of its Qualified Capital
Stock (other than (i) a sale to a Subsidiary of Sun International and (ii) to
the extent such Net Cash Proceeds are applied in connection with a Qualified
Exchange after the Issue Date, plus (c) the amount (not to exceed the aggregate
amount of Investments previously made by the Issuers or any
76
Guarantor which were treated as Restricted Payments and counted against the
amount available under this clause (iii)) equal to the net reduction in
Investments resulting from either (1) any dividends, repayments of loans or
advances or other transfers of assets to the Issuers or any Guarantor or the
proceeds realized on sale of such Investments or representing the return of
capital or the satisfaction or reduction (other than by means of payments by the
Issuers or any Subsidiary) of obligations of other persons which have been
guaranteed by the Issuers or any Guarantor or the release or expiration of any
such guarantee, including the expiration or release of any Investment Guarantee
or (2) the redesignation of an Unrestricted Subsidiary as a Subsidiary which
executes a Guarantee; PROVIDED, HOWEVER, that the amount of anything credited
pursuant to this clause (c) shall not exceed its Fair Market Value at the time
of transfer or redesignation, as the case may be; plus (d) $50 million.
The immediately preceding paragraph, however, will not prohibit: (1) a
Qualified Exchange, (2) the payment of any dividend on Capital Stock within
60 days after the date of its declaration if such dividend could have been made
on the date of such declaration in compliance with the foregoing provisions,
(3) the redemption or repurchase of any Capital Stock or Indebtedness of the
Issuers or their Subsidiaries (other than Capital Stock or Indebtedness held by
Permitted Holders), if the holder or beneficial owner of such Capital Stock or
Indebtedness is required to be found suitable by any Gaming Authority to own or
vote any such security and is found unsuitable by any such Gaming Authority to
so own or vote such security and (4) any Investment Guarantee Payments. The full
amount of any Restricted Payment made pursuant to the foregoing clauses (2), (3)
and (4) (but not pursuant to clause (1)) of the immediately preceding sentence,
however, will be deducted in the calculation of the aggregate amount of
Restricted Payments available to be made referred to in clause (iii) of the
immediately preceding paragraph.
For purposes of this covenant, the amount of any Restricted Payment made or
returned, if other than in cash, shall be the Fair Market Value thereof, as
determined in the good faith reasonable judgment of the Board of Directors of
Sun International, unless stated otherwise, at the time made or returned, as
applicable.
LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES
The Indenture provides that the Issuers and Guarantors will not, and will
not permit any of their Subsidiaries to, individually or collectively, directly
or indirectly, create, assume or suffer to exist any consensual restriction on
the ability of any Subsidiary of Sun International, SINA or such Guarantors to
pay dividends or make other distributions to or on behalf of, or to pay any
obligation to or on behalf of, or otherwise to transfer assets or property to or
on behalf of, or make or pay loans or advances to or on behalf of, Sun
International, SINA, the Guarantors or any Subsidiary of any of them, or to
guaranty the Notes, except (a) restrictions imposed by the Notes or the
Indenture or by our other Indebtedness (which may also be guaranteed by the
Guarantors) ranking PARI PASSU with the Notes or the Guarantees, as applicable,
PROVIDED that such restrictions are no more restrictive taken as a whole than
those imposed by the Indenture and the Notes, (b) restrictions imposed by
applicable law, (c) any restriction imposed by Indebtedness incurred under the
Credit Agreement or other Senior Debt incurred pursuant to the covenant
"Limitation on Incurrence of Additional Indebtedness and Disqualified Capital
Stock"; PROVIDED that such restriction or requirement is no more restrictive
than that imposed by the Credit Agreement as of the Issue Date,
(d) restrictions under any Acquired Indebtedness not incurred in violation of
the Indenture or any agreement relating to any property, asset, or business
acquired by Sun International or any of its Subsidiaries, which restrictions in
each case existed at the time of acquisition, were not put in place in
connection with or in anticipation of such acquisition and are not applicable to
any person, other than the person acquired, or to any property, asset or
business, other than the property, assets and business so acquired,
(e) restrictions with respect solely to a Subsidiary of Sun International
imposed pursuant to a binding agreement that has been entered into for the sale
or disposition of all or substantially all of the Equity Interests or
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assets of such Subsidiary, provided such restrictions apply solely to the Equity
Interests or assets of such Subsidiary that are being sold, (f) restrictions on
transfer contained in FF&E Indebtedness incurred pursuant to paragraph (c) of
the definition of "Permitted Indebtedness," PROVIDED such restrictions relate
only to the transfer of the property acquired with the proceeds of such FF&E
Indebtedness, and (g) in connection with and pursuant to permitted Refinancings,
replacements of restrictions imposed pursuant to clauses (a), (c) or (d) of this
paragraph that are not more restrictive than those being replaced and do not
apply to any other person or assets than those that would have been covered by
the restrictions in the Indebtedness so refinanced. Notwithstanding the
foregoing, neither (a) customary provisions restricting subletting or assignment
of any lease, license or contract entered into in the ordinary course of
business, consistent with industry practice, nor (b) Liens permitted under the
terms of the Indenture shall in and of themselves be considered a restriction on
the ability of the applicable Subsidiary to transfer such agreement or assets,
as the case may be.
LIMITATION ON LAYERING INDEBTEDNESS
The Indenture provides that the Issuers and the Guarantors will not,
individually or collectively, directly or indirectly, incur, or suffer to exist
any Indebtedness that is subordinate in right of payment to any other
Indebtedness of either Issuer or any Guarantor unless, by its terms, such
Indebtedness is as subordinated in right of payment to, or ranks PARI PASSU
with, the Notes or the Guarantee, as applicable.
LIMITATION ON LIENS SECURING INDEBTEDNESS
The Indenture provides that the Issuers and the Guarantors will not, and
will not permit any of their Subsidiaries to, individually or collectively,
create, incur, assume or suffer to exist any Lien of any kind, other than
Permitted Liens, upon any of their respective assets now owned or acquired on or
after the date of the Indenture or upon any income or profits therefrom securing
any Indebtedness of the Issuers, the Guarantors or any of their Subsidiaries
other than Senior Debt, unless the Issuers and Guarantors each provide, and
cause their Subsidiaries to provide, concurrently therewith, that the Notes are
equally and ratably so secured, provided that, if such Indebtedness is
Subordinated Indebtedness, the Lien securing such Subordinated Indebtedness
shall be subordinate and junior to the Lien securing the Notes with the same
relative priority as such Subordinated Indebtedness shall have with respect to
the Notes.
LIMITATION ON SALE OF ASSETS AND SUBSIDIARY STOCK
The Indenture provides that each of the Issuers and the Guarantors will not,
and will not permit any of their Subsidiaries to, individually or collectively,
in one or a series of related transactions, convey, sell, transfer, assign or
otherwise dispose of, directly or indirectly, any of its property, business or
assets, including by merger or consolidation (in the case of SINA, a Guarantor
or a Subsidiary of Sun International or SINA), and including any sale or other
transfer or issuance of any Equity Interests of any Subsidiary of Sun
International, including SINA, whether by Sun International, SINA or a
Subsidiary of either or through the issuance, sale or transfer of Equity
Interests by a Subsidiary of Sun International, including SINA, and including
any sale and leaseback transaction (an "Asset Sale"), unless (i)(a) within
360 days after the date of such Asset Sale, the Net Cash Proceeds therefrom (the
"Asset Sale Offer Amount") are applied to the optional redemption of the Notes
in accordance with the terms of the Indenture or to the repurchase of the Notes
and other Indebtedness on a parity with the Notes with similar provisions
requiring the Issuers to make an offer to purchase such Indebtedness with the
proceeds from such Asset Sale pursuant to a cash offer (PRO RATA in proportion
to the respective principal amounts (or accreted values in the case of
Indebtedness issued with an original issue discount) of the Notes and such other
Indebtedness then outstanding) pursuant to an irrevocable, unconditional cash
offer (the "Asset Sale Offer") to repurchase Notes at a purchase price of 100%
of
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principal amount (or accreted value in the case of Indebtedness issued with an
original issue discount) with respect to each such series of Indebtedness (the
"Asset Sale Offer Price") together with accrued and unpaid interest and
Liquidated Damages, if any, to the date of payment, made within 330 days of such
Asset Sale or (b) within 330 days following such Asset Sale, the Asset Sale
Offer Amount is (1) invested in assets and property (other than notes, bonds,
obligation and securities) which in the good faith judgment of the Board of
Directors of Sun International will immediately constitute or be a part of a
Related Business of Sun International, SINA or such Subsidiary (if it continues
to be a Subsidiary) immediately following such investment or (2) used to
permanently reduce Senior Debt (provided that in the case of a revolving loan
agreement or similar arrangement that makes credit available, such commitment is
so permanently reduced by such amount), (ii) no more than the greater of
(A) $20 million or (B) 15% of the total consideration for such Asset Sale or
series of related Asset Sales consists of consideration other than cash or Cash
Equivalents; PROVIDED, HOWEVER, that more than 15% of the total consideration
may consist of consideration other than cash or Cash Equivalents if (A) the
portion of such consideration that does not consist of cash or Cash Equivalents
consists of assets of a type ordinarily used in the operation of a Related
Business (including Capital Stock of a person that becomes a wholly owned
Subsidiary and that holds such assets) to be used by the Issuers or a Subsidiary
in the conduct of a Related Business and (B) the terms of such Asset Sale have
been approved by a majority of the members of the Board of Directors of Sun
International having no personal stake in such transaction, (iii) no Default or
Event of Default shall have occurred and be continuing at the time of, or would
occur after giving effect, on a pro forma basis, to, such Asset Sale, and
(iv) if the value of the assets disposed of is at least $10 million, the Board
of Directors of Sun International determines in good faith that Sun
International or such Subsidiary, as applicable, receives fair market value for
such Asset Sale (as evidenced by a resolution of the Board of Directors).
Pending the final application of any Net Cash Proceeds, the Issuers may
temporarily reduce revolving credit borrowings or otherwise invest the Net Cash
Proceeds in any manner that is not prohibited by the Indenture.
The Indenture provides that an acquisition of Notes pursuant to an Asset
Sale Offer may be deferred until the accumulated Net Cash Proceeds from Asset
Sales not applied to the uses set forth in (i) above (the "Excess Proceeds")
exceeds $20 million and that each Asset Sale Offer shall remain open for 20
Business Days following its commencement (the "Asset Sale Offer Period"). Upon
expiration of the Asset Sale Offer Period, the Issuers shall apply the Asset
Sale Offer Amount plus an amount equal to accrued and unpaid interest and
Liquidated Damages, if any, to the purchase of all Indebtedness properly
tendered (on a PRO RATA basis if the Asset Sale Offer Amount is insufficient to
purchase all Indebtedness so tendered) at the applicable Asset Sale Offer Price
(together with accrued and unpaid interest and Liquidated Damages, if any). To
the extent that the aggregate amount of Indebtedness tendered pursuant to an
Asset Sale Offer is less than the Asset Sale Offer Amount, the Issuers may use
any remaining Net Cash Proceeds for general corporate purposes as otherwise
permitted by the Indenture and following the consummation each Asset Sale Offer
the Excess Proceeds amount shall be reset to zero. For purposes of (ii) above,
total consideration received means the total consideration received for such
Asset Sales minus the amount of (a) Senior Debt assumed by a transferee which
assumption permanently reduces the amount of Indebtedness outstanding on the
Issue Date or permitted pursuant to clause (a) or (c) of the definition of
Permitted Indebtedness (including that in the case of a revolving loan agreement
or similar arrangement that makes credit available, such commitment is so
reduced by such amount), (b) FF&E Indebtedness secured solely by the assets sold
and assumed by a transferee and (c) property that within 30 days of such Asset
Sale is converted into Cash or Cash Equivalents.
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Notwithstanding the foregoing provisions of the prior paragraph:
(i) Sun International and its Subsidiaries may, in the ordinary course
of business, convey, sell, transfer, assign or otherwise dispose of
inventory acquired and held for resale in the ordinary course of business;
(ii) Sun International and its Subsidiaries may convey, sell, transfer,
assign or otherwise dispose of assets pursuant to and in accordance with the
provisions of the covenant "Limitation on Merger, Sale or Consolidation of
Sun International";
(iii) Sun International and its Subsidiaries may sell or dispose of
damaged, worn out or other obsolete property in the ordinary course of
business so long as such property is no longer necessary for the proper
conduct of the business of Sun International or such Subsidiary, as
applicable;
(iv) the Issuers and the Subsidiaries may convey, sell, transfer, assign
or otherwise dispose of assets to any Issuer or any Guarantor; and
(v) the Issuers may sell certain non-strategic real estate on Paradise
Island and in Atlantic City.
All Net Cash Proceeds from an Event of Loss shall be invested, used for
prepayment of Senior Debt, or used to repurchase Notes, all within the period
and as otherwise provided above in clauses (i)(a) or (i)(b) of the first
paragraph of this covenant.
In addition to the foregoing, Sun International will not, and will not
permit any Subsidiary to, directly or indirectly make any Asset Sale of any of
the Equity Interests of any Subsidiary, including SINA, except (i) pursuant to
an Asset Sale of all the Equity Interests of such Subsidiary or (ii) pursuant to
an Asset Sale of common stock with no preferences or special rights or
privileges and with no redemption or prepayment provisions, PROVIDED that after
such sale the Issuers or their Subsidiaries own at least 50.1% of the voting and
economic interests of the Capital Stock of such Subsidiary.
Any Asset Sale Offer shall be made in compliance with all applicable laws,
rules, and regulations, including, if applicable, Regulation 14E of the Exchange
Act and the rules and regulations thereunder and all other applicable United
States Federal and state securities laws. To the extent that the provisions of
any securities laws or regulations conflict with the provisions of this
covenant, the compliance by any of the Issuers or the Guarantors with such laws
and regulations shall not in and of itself cause a breach of their obligations
under such covenant.
LIMITATION ON TRANSACTIONS WITH AFFILIATES
The Indenture provides that none of the Issuers or any of their Subsidiaries
will be permitted on or after the Issue Date to enter into or suffer to exist
any contract, agreement, arrangement or transaction with any Affiliate (an
"Affiliate Transaction"), or any series of related Affiliate Transactions (other
than Exempted Affiliate Transactions) (i) unless it is determined that the terms
of such Affiliate Transaction are fair and reasonable to Sun International or
such Subsidiary, as applicable, and no less favorable to Sun International or
such Subsidiary, as applicable, than could have been obtained in an arm's length
transaction with a non-Affiliate and (ii) if involving consideration to either
party in excess of $4 million, unless such Affiliate Transaction(s) has been
approved by a majority of the members of the Board of Directors that are
disinterested in such transaction and (iii) if involving consideration to either
party in excess of $15 million, unless in addition to the foregoing Sun
International, prior to the consummation thereof, obtains a written favorable
opinion as to the fairness of such transaction to Sun International from a
financial point of view from an independent investment banking firm of national
reputation.
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LIMITATION ON PAYMENTS FOR CONSENT
The Indenture provides that none of the Issuers or any of their Subsidiaries
or Unrestricted Subsidiaries shall, directly or indirectly, pay or cause to be
paid any consideration, whether by way of interest, fee or otherwise, to any
Holder of any Notes for, or as an inducement to, any consent, waiver or
amendment of any of the terms or provisions of the Indenture or the Notes unless
such consideration is offered to be paid or agreed to be paid to all Holders of
the Notes which so consent, waive or agree to amend in the time frame set forth
in the solicitation documents relating to such consent, waiver or agreement,
which solicitation documents must be mailed to all Holders of the Notes prior to
the expiration of the solicitation.
LIMITATION ON MERGER, SALE OR CONSOLIDATION OF SUN INTERNATIONAL
The Indenture provides that Sun International will not, directly or
indirectly, consolidate with or merge with or into another person or sell,
lease, convey or transfer all or substantially all of its assets (computed on a
consolidated basis), whether in a single transaction or a series of related
transactions, to another Person or group of affiliated Persons or adopt a Plan
of Liquidation, unless (i) either (a) Sun International is the resulting
surviving or transferee entity (the "Successor Company") or (b) the Successor
Company or, in the case of a Plan of Liquidation, the entity which receives the
greatest value from such Plan of Liquidation, is a corporation organized under
the laws of the Commonwealth of the Bahamas, any member country of the European
Union, Canada or the United States, any state thereof or the District of
Columbia and expressly assumes by supplemental indenture all of the obligations
of Sun International in connection with the Notes and the Indenture; (ii) no
Default or Event of Default shall exist or shall occur immediately after giving
effect on a pro forma basis to such transaction; (iii) immediately after giving
effect to such transaction on a pro forma basis, the Consolidated Net Worth of
the Successor Company or, in the case of a Plan of Liquidation, the entity which
receives the greatest value from such Plan of Liquidation is at least equal to
the Consolidated Net Worth of Sun International immediately prior to such
transaction; and (iv) immediately after giving effect to such transaction on a
pro forma basis, the Successor Company or, in the case of a Plan of Liquidation,
the entity which receives the greatest value from such Plan of Liquidation would
immediately thereafter be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Debt Incurrence Ratio set forth in the covenant
"Limitation on Incurrence of Additional Indebtedness and Disqualified Capital
Stock."
Upon any consolidation or merger or any transfer of all or substantially all
of the assets of Sun International or consummation of a Plan of Liquidation in
accordance with the foregoing, the successor corporation formed by such
consolidation or into which Sun International is merged or to which such
transfer is made or, in the case of a Plan of Liquidation, the entity which
receives the greatest value from such Plan of Liquidation shall succeed to, and
(except in the case of a lease or any transfer of substantially all (but less
than all) of the assets of Sun International) be substituted for, and may
exercise every right and power of, Sun International under the Indenture with
the same effect as if such successor corporation had been named therein as Sun
International and (except in the case of a lease or any transfer of
substantially all (but less than all) of the assets of Sun International) Sun
International shall be released from the obligations under the Notes and the
Indenture except with respect to any obligations that arise from, or are related
to, such transaction.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise) of all or substantially all of the properties and assets of one or
more Subsidiaries of Sun International, including SINA, if applicable, shall be
deemed to be the transfer of all or substantially all of the properties and
assets of Sun International if the interest of Sun International in the
properties and assets of such Subsidiary or Subsidiaries constitutes all or
substantially all of the properties and assets of Sun International.
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LIMITATION ON MERGER, SALE OR CONSOLIDATION OF SINA
The Indenture provides that SINA will not consolidate or merge with or into
(whether or not SINA is the surviving person) another person unless (other than
Sun International or a Guarantor) (i) subject to the provisions of the following
paragraph, the person formed by or surviving any such consolidation or merger
(if other than SINA) expressly assumes all the obligations of SINA pursuant to a
supplemental indenture in form reasonably satisfactory to the Trustee; and
(ii) immediately before and immediately after giving effect to such transaction
on a pro forma basis, no Default or Event of Default shall have occurred or be
continuing. Any Person that expressly assumes all the obligations of SINA
pursuant to a supplemental indenture as provided in the foregoing, shall succeed
to, and be substituted for, and may exercise every right and power of SINA under
the Indenture with the same effect as if such successor corporation had been
named therein as SINA.
Notwithstanding the foregoing, upon the sale or disposition (whether by
merger, stock purchase, or otherwise) of SINA in its entirety to an entity which
is not a Subsidiary, which transaction is otherwise in compliance with the
Indenture (including, without limitation, the provisions of the covenant
"Limitation on Sale of Assets and Subsidiary Stock"), SINA shall be released
from the obligations under the Notes and the Indenture except with respect to
any obligations that arise from, or are related to, such transaction; PROVIDED,
HOWEVER, that any such termination shall occur only to the extent that all
obligations of SINA under all of its guarantees of, and under all of its pledges
of assets or other security interests which secure, any Indebtedness of Sun
International or any of its Subsidiaries shall also terminate upon such release,
sale or transfer.
LIMITATION ON LINES OF BUSINESS
The Indenture provides that none of the Issuers or any of their Subsidiaries
shall directly or indirectly engage to any substantial extent in any line or
lines of business activity other than that which, in the good faith judgment of
the Board of Directors of Sun International, is a Related Business.
FUTURE SUBSIDIARY GUARANTORS
The Indenture provides that all present and future Subsidiaries of either
Issuer (including any Unrestricted Subsidiary upon being designated a
Subsidiary) will jointly and severally guaranty irrevocably and unconditionally
all principal, premium, if any, and interest on the Notes on a senior
subordinated basis. The term Subsidiary does not include Unrestricted
Subsidiaries.
RELEASE OF GUARANTORS
The Indenture provides that no Guarantor shall consolidate or merge with or
into (whether or not such Guarantor is the surviving person) another person
(other than either Issuer or another Guarantor) unless (i) subject to the
provisions of the following paragraph, the person formed by or surviving any
such consolidation or merger (if other than such Guarantor) assumes all the
obligations of such Guarantor pursuant to a supplemental indenture in form
reasonably satisfactory to the Trustee, pursuant to which such person shall
unconditionally guarantee, on a senior subordinated basis, all of such
Guarantor's obligations under such Guarantor's guarantee and the Indenture on
the terms set forth in the Indenture; and (ii) immediately before and
immediately after giving effect to such transaction on a pro forma basis, no
Default or Event of Default shall have occurred or be continuing.
Notwithstanding the foregoing, upon the sale or disposition (whether by
merger, stock purchase, or otherwise) of a Guarantor in its entirety to an
entity which is not a Subsidiary or the designation of a Subsidiary as an
Unrestricted Subsidiary, which transaction is otherwise in compliance with the
Indenture (including, without limitation, the provisions of the covenant
"Limitation on Sale of Assets and Subsidiary Stock"), such Guarantor will be
deemed released from its obligations under its Guarantee of the Notes; PROVIDED,
HOWEVER, that any such termination shall occur only to the extent that
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all obligations of such Guarantor under all of its guarantees of, and under all
of its pledges of assets or other security interests which secure, any
Indebtedness of either Issuer or any of their Subsidiaries shall also terminate
upon such release, sale or transfer.
LIMITATION ON STATUS AS INVESTMENT COMPANY
The Indenture prohibits Sun International and its Subsidiaries from being
required to register as an "investment company" (as that term is defined in the
Investment Company Act of 1940, as amended), or from otherwise becoming subject
to regulation under the Investment Company Act.
REPORTS
The Indenture provides that whether or not Sun International is subject to
the reporting requirements of Section 13 or 15(d) of the Exchange Act, Sun
International shall deliver to the Trustee and to each Holder within 15 days
after it is or would have been (if it were subject to such reporting
obligations) required to furnish such with the SEC, annual and quarterly
financial statements substantially equivalent to financial statements that would
have been included in reports filed with the SEC, if Sun International were
subject to the requirements of Section 13 or 15(d) of the Exchange Act,
including, with respect to annual information only, a report thereon by Sun
International's certified independent public accountants as such would be
required in such reports to the SEC, and, together with a management's
discussion and analysis of financial condition and results of operations which
would be so required and, to the extent permitted by the Exchange Act or the
SEC, file with the SEC the annual, quarterly and other reports which it is or
would have (if it were subject to such reporting obligations) been required to
file with the SEC.
EVENTS OF DEFAULT AND REMEDIES
The Indenture defines an Event of Default as (i) the failure by the Issuers
to pay any installment of interest or Liquidated Damages, if any, on the Notes
as and when the same becomes due and payable and the continuance of any such
failure for 30 days, (ii) the failure by the Issuers to pay all or any part of
the principal, or premium, if any, on the Notes when and as the same becomes due
and payable at maturity, redemption, by acceleration or otherwise, whether or
not prohibited by the subordination provisions of the Indenture, including,
without limitation, payment of the Change of Control Purchase Price or the Asset
Sale Offer Price, or otherwise, (iii) the failure by either of the Issuers or
any of their Subsidiaries otherwise to comply with the covenants described under
"Certain Covenants--Repurchase of Notes at the Option of the Holder upon a
Change of Control," "--Limitation on Sale of Assets and Subsidiary Stock" and
"--Limitation on Merger, Sale or Consolidation of Sun International,"
(iv) (A) failure by either of the Issuers or any of their Subsidiaries to
observe or perform any other covenant or agreement described under "Certain
Covenants" (except as provided in clauses (i), (ii) and (iii) above) and the
continuance of such failure for a period of 30 days after written notice is
given to the Issuers by the Trustee or to the Issuers and the Trustee by the
Holders of at least 25% in aggregate principal amount of the Notes outstanding,
or (B) failure by either of the Issuers or any of their Subsidiaries to observe
or perform any other covenant or agreement contained in the Notes or the
Indenture (except as provided for in clauses (i), (ii), (iii) and (iv)(A) above)
and the continuance of such failure for 60 days after written notice is given to
the Issuers by the Trustee or the Issuers and the Trustee by the Holders of at
least 25% in aggregate principal amount of Notes outstanding, (v) certain events
of bankruptcy, insolvency or reorganization in respect of either of the Issuers
or any of their Significant Subsidiaries, (vi) a default in Indebtedness of
either of the Issuers or any of their Subsidiaries with an aggregate principal
amount in excess of $10 million (a) resulting from the failure to pay any
principal at final stated maturity or (b) as a result of which the maturity of
such Indebtedness has been accelerated prior to its stated maturity, and
(vii) final unsatisfied judgments not covered by insurance aggregating in excess
of $10 million, at any
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one time rendered against either of the Issuers or any of their Subsidiaries and
either (a) the commencement by any creditor of any enforcement proceeding upon
any such judgment that is not promptly stayed or (b) such judgment is not
stayed, bonded or discharged within 60 days. The Indenture provides that if a
Default occurs and is continuing, the Trustee must, within 90 days after the
occurrence of such default, give to the Holders notice of such default.
If an Event of Default occurs and is continuing (other than an Event of
Default specified in clause (v), above, relating to either of the Issuers or any
of their Significant Subsidiaries,) then in every such case, unless the
principal of all of the Notes shall have already become due and payable, either
the Trustee or the Holders of 25% in aggregate principal amount of the Notes
then outstanding, by notice in writing to the Issuers (and to the Trustee if
given by Holders) (an "Acceleration Notice"), may declare all principal and
premium, if any, determined as set forth below, and accrued and unpaid interest
and Liquidated Damages, if any, thereon to be due and payable immediately;
PROVIDED, HOWEVER, that if any Senior Debt is outstanding pursuant to the Credit
Agreement, such acceleration shall not be effective until the earlier of
(x) the fifth Business Day after the giving to Sun International and the
Representative of such written notice, unless such Event of Default is cured or
waived prior to such date and (y) the date of acceleration of any Senior Debt
under the Credit Agreement. If an Event of Default specified in clause (v) above
relating to either of the Issuers or any of their Significant Subsidiaries
occurs, all principal and accrued interest thereon will be immediately due and
payable on all outstanding Notes without any declaration or other act on the
part of Trustee or the Holders. The Holders of a majority in aggregate principal
amount of Notes generally are authorized to rescind such acceleration if all
existing Events of Default, other than the non-payment of the principal of,
premium, if any, and interest and Liquidated Damages on the Notes which have
become due solely by such acceleration, have been cured or waived.
Prior to the declaration of acceleration of the maturity of the Notes, the
Holders of a majority in aggregate principal amount of the Notes at the time
outstanding may waive on behalf of all the Holders any default, except a default
in the payment of principal of or interest on any Note not yet cured or a
default with respect to any covenant or provision which cannot be modified or
amended without the consent of the Holder of each outstanding Note affected.
Subject to the provisions of the Indenture relating to the duties of the
Trustee, the Trustee will be under no obligation to exercise any of its rights
or powers under the Indenture at the request, order or direction of any of the
Holders, unless such Holders have offered to the Trustee reasonable security or
indemnity. Subject to all provisions of the Indenture and applicable law, the
Holders of a majority in aggregate principal amount of the Notes at the time
outstanding will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides that the Issuers may, at their option and at any
time, elect to have their obligations and the obligations of the Guarantors
discharged with respect to the outstanding Notes ("Legal Defeasance"). Such
Legal Defeasance means that the Issuers shall be deemed to have paid and
discharged the entire indebtedness represented, and the Indenture shall cease to
be of further effect as to all outstanding Notes and Guarantees, except as to
(i) rights of Holders to receive payments in respect of the principal of,
premium, if any, and interest and Liquidated Damages, if any, on such Notes when
such payments are due from the trust funds; (ii) Issuers' obligations with
respect to such Notes concerning issuing temporary Notes, registration of Notes,
mutilated, destroyed, lost or stolen Notes, and the maintenance of an office or
agency for payment of money for security payments held in trust; (iii) the
rights, powers, trust, duties, and immunities of the Trustee, and the Issuers'
obligations in connection therewith; and (iv) the Legal Defeasance provisions of
the Indenture. In addition, the Issuers may, at their option and at any time,
elect to have the obligations of the Issuers and the
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Guarantors released with respect to certain covenants that are described in the
Indenture ("Covenant Defeasance") and thereafter any omission to comply with
such obligations shall not constitute a Default or Event of Default with respect
to the Notes. In the event Covenant Defeasance occurs, certain events (not
including non-payment, non-payment of guarantees, bankruptcy, receivership,
rehabilitation and insolvency events) described under "Events of Default and
Remedies" will no longer constitute an Event of Default with respect to the
Notes. The Issuers may exercise their Legal Defeasance option regardless of
whether they previously exercised Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance,
(i) the Issuers must irrevocably deposit with the Trustee, in trust, for the
benefit of the Holders of the Notes, U.S. legal tender, U.S. Government
Obligations or a combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent public accountants,
to pay the principal of, premium, if any, and interest on such Notes on the
stated date for payment thereof or on the redemption date of such principal or
installment of principal of, premium, if any, or interest on such Notes, and the
Trustee must have, for the benefit of the Holders of Notes, a valid, perfected,
exclusive security interest in such trust; (ii) in the case of the Legal
Defeasance, the Issuers shall have delivered to the Trustee an opinion of
counsel in the United States reasonably acceptable to Trustee confirming that
(A) the Issuers have received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of the Indenture, there has been
a change in the applicable United States Federal income tax law, in either case
to the effect that, and based thereon such opinion of counsel shall confirm
that, the Holders of such Notes will not recognize income, gain or loss for
United States Federal income tax purposes as a result of such Legal Defeasance
and will be subject to United States Federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred; (iii) in the case of Covenant Defeasance, the
Issuers shall have delivered to the Trustee an opinion of counsel in the United
States reasonably acceptable to such Trustee confirming that the Holders of such
Notes will not recognize income, gain or loss for United States Federal income
tax purposes as a result of such Covenant Defeasance and will be subject to
United States Federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such Covenant Defeasance had not
occurred; (iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Events of Default from
bankruptcy or insolvency events are concerned, at any time in the period ending
on the 91st day after the date of deposit; (v) such Legal Defeasance or Covenant
Defeasance shall not result in a breach or violation of, or constitute a default
under the Indenture or any other material agreement or instrument to which
either of the Issuers or any of their Subsidiaries is a party or by which either
of the Issuers or any of their Subsidiaries is bound; (vi) the Issuers shall
have delivered to the Trustee an Officers' Certificate stating that the deposit
was not made by the Issuers with the intent of hindering, delaying or defrauding
any other creditors of the Issuers or others; and (vii) the Issuers shall have
delivered to the Trustee an Officers' Certificate and an opinion of counsel,
each stating that the conditions precedent provided for in, in the case of the
officers' certificate, (i) through (vi) and, in the case of the opinion of
counsel, clauses (i) (with respect to the validity and perfection of the
security interest), (ii), (iii) and (v) of this paragraph have been complied
with.
If the funds deposited with the Trustee to effect Legal Defeasance or
Covenant Defeasance are insufficient to pay the principal of, premium, if any,
and interest on the Notes when due, then the obligations of the Issuers under
the Indenture will be revived and no such defeasance will be deemed to have
occurred.
AMENDMENTS AND SUPPLEMENTS
The Indenture contains provisions permitting the Issuers, the Guarantors and
the Trustee to enter into a supplemental indenture for certain limited purposes
without the consent of the Holders. With
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the consent of the Holders of not less than a majority in aggregate principal
amount of the Notes at the time outstanding, the Issuers, the Guarantors and the
Trustee are permitted to amend or supplement the Indenture or any supplemental
indenture or modify the rights of the Holders; PROVIDED, that no such
modification may, without the consent of each Holder affected thereby:
(i) change the Stated Maturity on any Note, or reduce the principal amount
thereof or the rate (or extend the time for payment) of interest thereon or any
premium payable upon the redemption thereof, or change the place of payment
where, or the coin or currency in which, any Note or any premium or the interest
thereon is payable, or impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or reduce the Change of Control
Purchase Price or the Asset Sale Offer Price or alter the provisions (including
the defined terms used therein) regarding the right of the Issuers to redeem the
Notes in a manner adverse to the Holders, or (ii) reduce the percentage in
principal amount of the outstanding Notes, the consent of whose Holders is
required for any such amendment, supplemental indenture or waiver provided for
in the Indenture, or (iii) modify any of the waiver provisions, except to
increase any required percentage or to provide that certain other provisions of
the Indenture cannot be modified or waived without the consent of the Holder of
each outstanding Note affected thereby.
NO PERSONAL LIABILITY OF PARTNERS, STOCKHOLDERS, OFFICERS, DIRECTORS
The Indenture will provide that no direct or indirect stockholder, employee,
officer or director, as such, past, present or future of the Issuers, the
Guarantors or any successor entity shall have any personal liability in respect
of the obligations of the Issuers or the Guarantors under the Indenture or the
Notes by reason of his or its status as such stockholder, employee, officer or
director, except to the extent such person is an Issuer or Guarantor.
REGISTRATION RIGHTS; LIQUIDATED DAMAGES
The holders of the Old Notes were party to the Registration Rights
Agreement. We have filed the registration statement of which this prospectus
forms a part and are conducting the exchange offer in accordance with our
obligations under the Registration Rights Agreement. Following the exchange
offer, if you did not tender your Old Notes you generally will not have any
further registration rights (subject to limited exceptions), and such Old Notes
will continue to be subject to certain transfer restrictions. See "Risk
Factors--Holders who fail to exchange their Old Notes will continue to be
subject to restrictions on transfer."
Holders of the New Notes are generally not entitled to any registration
rights with respect to the New Notes.
ADDITIONAL INFORMATION
Anyone who receives this prospectus may obtain a copy of the Indenture
without charge by writing to Sun International Hotels Limited, Coral Towers,
Paradise Island, Bahamas (attention: General Counsel).
BOOK-ENTRY, DELIVERY AND FORM
The New Notes will be represented by one or more notes in registered, global
form without interest coupons (collectively, the "Global Notes"). The Global
Notes will be deposited upon issuance with the Trustee as custodian for The
Depositary Trust Company ("DTC"), in New York, New York, and registered in the
name of DTC or its nominee, in each case for credit to an account of a direct or
indirect participant in DTC as described below.
Except as set forth below, the Global Notes may be transferred, in whole and
not in part, only to another nominee of DTC or to a successor of DTC or its
nominee. Beneficial interests in the Global
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Notes may not be exchanged for Notes in certificated form except in the limited
circumstances described below. See "--Exchange of Global Notes for Certificated
Notes." Except in the limited circumstances described below, owners of
beneficial interests in the Global Notes will not be entitled to receive
physical delivery of notes in certificated form. Transfers of beneficial
interests in the Global Notes will be subject to the applicable rules and
procedures of DTC and its direct or indirect participants, which may change from
time to time.
DEPOSITORY PROCEDURES
The following description of the operations and procedures of DTC is
provided solely as a matter of convenience. These operations and procedures are
solely within the control of DTC and are subject to changes by DTC. We take no
responsibility for these operations and procedures and urge investors to contact
DTC or its participants directly to discuss these matters.
DTC has advised us that DTC is a limited-purpose trust company created to
hold securities for its participating organizations (collectively, the
"Participants") and to facilitate the clearance and settlement of transactions
in those securities between participants through electronic book-entry changes
in accounts of its Participants. The Participants include securities brokers and
dealers (including the Initial Purchasers), banks, trust companies, clearing
corporations and certain other organizations. Access to DTC's system is also
available to other entities such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Participant,
either directly or indirectly (collectively, the "Indirect Participants").
Persons who are not Participants may beneficially own securities held by or on
behalf of DTC only through the Participant or the Indirect Participant. The
ownership interests in, and transfers of ownership interests in, each security
held by or on behalf of DTC are recorded on the records of the Participants and
Indirect Participant.
DTC has also advised us that, pursuant to procedures established by it:
(1) upon deposit of the Global Notes, DTC will credit the account of
Participants designated by the Initial Purchasers with portions of the
principal amount of the Global Notes; and
(2) ownership of these interests in the Global Notes will be shown on, and
the transfer of ownership of these interests will be effected only
through, records maintained by DTC (with respect to the Participants) or
by the Participants and the Indirect Participants (with respect to other
owners of beneficial interest in the Global Notes).
The laws of some states require that certain Persons take physical deliver
in definitive form of securities that they own. Consequently, the ability to
transfer beneficial interests in a Global Note to such Persons will be limited
to that extent. Because DTC can act only on behalf of Participants, which in
turn act on behalf of Indirect Participants, the ability of a Person having
beneficial interests in a Global Note to pledge such interests to Persons that
do not participate in the DTC system, or otherwise take actions in respect of
such interests, may be affected by the lack of a physical certificate evidencing
such interests.
EXCEPT AS DESCRIBED BELOW, OWNERS OF INTEREST IN THE GLOBAL NOTES WILL NOT
HAVE NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL DELIVERY OF
NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED OWNERS OR
"HOLDERS" THEREOF UNDER THE INDENTURE FOR ANY PURPOSE.
Payments in respect of the principal of, and interest and premium and
liquidated damages, if any, on a Global Note registered in the name of DTC or
its nominee will be payable to DTC in its capacity as the registered Holder
under the Indenture. Under the terms of the Indenture, we and the Trustee will
treat the Persons in whose names the notes, including the Global Notes, are
registered as the owners of the notes for the purpose of receiving payments and
for all other purposes. Consequently,
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none of us, the Trustee nor any agent of us or the Trustee has or will have any
responsibility or liability for:
(1) any aspect of DTC's records or any Participant's or Indirect
Participant's records relating to or payments made on account of
beneficial ownership interest in the Global Notes or for maintaining,
supervising or reviewing any of DTC's records or any Participant's or
Indirect Participant's records relating to the beneficial ownership
interests in the Global Notes; or
(2) any other matter relating to the actions and practices of DTC or any of
its Participants or Indirect Participants.
DTC has advised us that its current practice, upon receipt of any payment in
respect of securities such as the notes (including principal and interest), is
to credit the accounts of the relevant Participants with the payment on the
payment date unless DTC has reason to believe it will not receive payment on
such payment date. Each relevant Participant is credited with an amount
proportionate to its beneficial ownership of an interest in the principal amount
of the relevant security as shown on the records of DTC. Payments by the
Participants and the Indirect Participants to the beneficial owners of notes
will be governed by standing instructions and customary practices and will be
the responsibility of the Participants or the Indirect Participants and will not
be the responsibility of DTC, the Trustee or us. None of us nor the Trustee will
be liable for any delay by DTC or any of its Participants in identifying the
beneficial owners of the notes, and we and the Trustee may conclusively rely on
and will be protected in relying on instructions from DTC or its nominee for all
purposes.
DTC has advised us that it will take any action permitted to be taken by a
Holder of notes only at the direct or one or more Participants to whose account
DTC has credited the interests in the Global Notes and only in respect of such
portion of the aggregate principal amount of the notes as to which such
Participant or Participant has or have given such direction. However, if there
is an Event of Default under the notes, DTC reserves the right to exchange the
Global Notes for legended notes in certificated form, and to distribute such
notes to its Participants.
Although DTC has agreed to the foregoing procedures to facilities transfers
of interests in the Global Notes among participants in DTC they are under no
obligation to perform or to continue to perform such procedures, and may
discontinue such procedures at any time. None of us nor the Trustee nor any of
our or their respective agents will have any responsibility for the performance
by DTC or its participants or indirect participants of its obligations under the
rules and procedures governing their operations.
EXCHANGE OF GLOBAL NOTES FOR CERTIFICATED NOTES
A Global Note is exchangeable for definitive notes in registered
certificated form ("Certificated Notes") if:
(1) DTC (a) notifies us that it is unwilling or unable to continue as
depositary for the Global Notes and we fail to appoint a successor
depositary or (b) has ceased to be a clearing agency registered under the
Exchange Act and we fail to appoint a successor depositary;
(2) We, at our option, notify the Trustee in writing that we elect to cause
the issuance of the Certificated Notes; or
(3) there has occurred and is continuing an Event of Default with respect to
the notes.
In addition, beneficial interests in a Global Note may be exchanged for
Certificated Notes upon prior written notice given to the Trustee by or on
behalf of DTC in accordance with the Indenture. In all case, Certificated Notes
delivered in exchange for any Global Note or beneficial interests in Global
Notes will be registered in the names, and issued in any approved denominations,
requested by or on behalf of the depositary (in accordance with its customary
procedures).
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EXCHANGE OF CERTIFICATED NOTES FOR GLOBAL NOTES
Certificated Notes may not be exchanged for beneficial interests in any
Global Note unless the transferor first delivers to the Trustee a written
certificate (in the form provided in the Indenture) to the effect that such
transfer will comply with the appropriate transfer restrictions applicable to
such notes.
SAME DAY SETTLEMENT AND PAYMENT
We will make payments in respect of the notes represented by the Global
Notes (including principal, premium, if any, interest and Liquidated Damages, if
any) by wire transfer of immediately available funds to the accounts specified
by the Global Note Holder. We will make all payments of principal, interest and
premium and Liquidated Damages, if any, with respect to Certificated Notes by
wire transfer of immediately available funds to the accounts specified by the
Holders of the Certificated Notes or, if no such account is specified, by
mailing a check to each such Holder's registered address. The notes represented
by the Global Notes are expected to be eligible to trade in the PORTAL market
and to trade in DTC's Same-Day Funds Settlement System, and any permitted
secondary market trading activity in such notes will, therefore, be required by
DTC to be settled in immediately available funds. We expect that secondary
trading in any Certificated Notes will also be settled in immediately available
funds.
CERTAIN DEFINITIONS
"ACQUIRED INDEBTEDNESS" means Indebtedness or Disqualified Capital Stock of
any person existing at the time such person becomes a Subsidiary of either of
the Issuers or is merged or consolidated into or with either of the Issuers or
any of their Subsidiaries.
"ACQUISITION" means the purchase or other acquisition of any person or all
or substantially all the assets of any person by any other person, or the
acquisition of assets that constitute all or substantially all of an operating
unit of business, whether by purchase, merger, consolidation, or other transfer,
and whether or not for consideration.
"AFFILIATE" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with Sun International.
For purposes of this definition, the term "control" means the power to direct
the management and policies of a person, directly or through one or more
intermediaries, whether through the ownership of voting securities, by contract,
or otherwise, PROVIDED that, with respect to ownership interest in Sun
International and its Subsidiaries a Beneficial Owner of 10% or more of the
total voting power normally entitled to vote in the election of directors,
managers or trustees, as applicable, shall for such purposes be deemed to
constitute control.
"ALLOWED NON-RECOURSE INDEBTEDNESS" means Indebtedness (a) as to which
neither of the Issuers nor any of their Subsidiaries (1) provide credit support
of any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (2) is directly or indirectly liable (as a guarantor
or otherwise), or (3) constitutes the lender, and (b) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any Indebtedness of the Issuers or
any of their Subsidiaries to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity.
"AVERAGE LIFE" means, as of the date of determination, with respect to any
security or instrument, the quotient obtained by dividing (i) the sum of the
products of (a) the number of years from the date of determination to the date
or dates of each successive scheduled principal (or redemption) payment of such
security or instrument and (b) the amount of each such respective principal (or
redemption) payment by (ii) the sum of all such principal (or redemption)
payments.
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"BENEFICIAL OWNER" or "beneficial owner" has the meaning attributed to it in
Rules 13d-3 and 13d-5 under the Exchange Act (as in effect on the Issue Date),
whether or not applicable.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York, New York or the
New York Stock Exchange are authorized or obligated by law or executive order to
close.
"CAPITALIZED LEASE OBLIGATION" means, as applied to any person, any lease of
any property (whether real, personal or mixed) of which the discounted present
value of the rental obligations of such person, as lessee, in conformity with
GAAP, is required to be capitalized on the balance sheet of such person.
"CAPITAL STOCK" means, with respect to any corporation, any and all shares,
interests, rights to purchase (other than convertible or exchangeable
Indebtedness that is not otherwise itself capital stock), warrants, options,
participations or other equivalents of or interests (however designated) in
stock issued by that corporation.
"CASH EQUIVALENT" means (a) (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof), (ii) time deposits and
certificates of deposit of any domestic commercial bank of recognized standing
having capital and surplus in excess of $500 million or (iii) commercial paper
issued by others rated at least A-1 or the equivalent thereof by Standard &
Poor's Corporation or at least P-1 or the equivalent thereof by Moody's
Investors Service, Inc., and in the case of each of (i), (ii) and (iii) above
maturing within one year after the date of acquisition or (b) shares of money
market mutual funds or similar funds having assets in excess of $500 million.
"CONSOLIDATED COVERAGE RATIO" of any person on any date of determination (a
"Transaction Date") means the ratio, on a pro forma basis, of (a) the aggregate
amount of Consolidated EBITDA of such person attributable to continuing
operations and businesses (exclusive of amounts attributable to operations and
businesses permanently discontinued or disposed of) for the Reference Period to
(b) the aggregate Consolidated Fixed Charges of such person (exclusive of
amounts attributable to operations and businesses permanently discontinued or
disposed of, but only to the extent that the obligations giving rise to such
Consolidated Fixed Charges would no longer be obligations contributing to such
person's Consolidated Fixed Charges subsequent to the Transaction Date) during
the Reference Period; PROVIDED that for purposes of such calculation,
(i) Acquisitions which occurred during the Reference Period or subsequent to the
Reference Period and on or prior to the Transaction Date shall be assumed to
have occurred on the first day of the Reference Period, (ii) transactions giving
rise to the need to calculate the Consolidated Coverage Ratio shall be assumed
to have occurred on the first day of the Reference Period, (iii) the incurrence
or repayment of any Indebtedness or issuance of any Disqualified Capital Stock
during the Reference Period or subsequent to the Reference Period and on or
prior to the Transaction Date (and the application of the proceeds therefrom to
the extent used to refinance or retire other Indebtedness) (other than
Indebtedness incurred under any revolving credit facility) shall be assumed to
have occurred on the first day of such Reference Period and (iv) the
Consolidated Fixed Charges of such person attributable to interest on any
Indebtedness or dividends on any Disqualified Capital Stock bearing a floating
interest (or dividend) rate shall be computed on a pro forma basis as if the
rate in effect on the Transaction Date had been the applicable rate for the
entire period, unless such Person or any of its Subsidiaries is a party to an
Interest Swap or Hedging Obligation (which shall remain in effect for the
12-month period immediately following the Transaction Date) that has the effect
of fixing the interest rate on the date of computation, in which case such rate
(whether higher or lower) shall be used.
"CONSOLIDATED EBITDA" means, with respect to any person, for any period, the
Consolidated Net Income of such person for such period adjusted to add thereto
(to the extent deducted from net revenues in determining Consolidated Net
Income), without duplication, the sum of (i) Consolidated
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income tax expense, (ii) Consolidated depreciation and amortization expense,
PROVIDED that consolidated depreciation and amortization of a Subsidiary that is
a less than wholly owned Subsidiary shall only be added to the extent of the
equity interest of such person in such Subsidiary, (iii) Consolidated Fixed
Charges, less any non-cash interest income, and (iv) consolidated preopening
expenses.
"CONSOLIDATED FIXED CHARGES" of any person means, for any period, the
aggregate amount (without duplication and determined in each case in accordance
with GAAP) of (a) interest expensed or capitalized, paid, accrued, or scheduled
to be paid or accrued (including, in accordance with the following sentence,
interest attributable to Capitalized Lease Obligations) of such person and its
Consolidated Subsidiaries during such period, including (i) original issue
discount and non-cash interest payments or accruals on any Indebtedness,
(ii) the interest portion of all deferred payment obligations and (iii) all
commissions, discounts and other fees and charges owed with respect to bankers'
acceptances and letters of credit financings and currency and Interest Swap and
Hedging Obligations, in each case to the extent attributable to such period, and
(b) the amount of dividends accrued or payable (or guaranteed) by such person or
any of its Consolidated Subsidiaries in respect of preferred stock (other than
by Subsidiaries of such person to such person or such person's wholly owned
Subsidiaries) other than dividends payable solely in shares of Qualified Capital
Stock. For purposes of this definition, (x) interest on a Capitalized Lease
Obligation shall be deemed to accrue at an interest rate reasonably determined
by Sun International to be the rate of interest implicit in such Capitalized
Lease Obligation in accordance with GAAP and (y) interest expense attributable
to any Indebtedness represented by the guaranty (excluding any Investment
Guarantee, but including any interest expense or comparable debt service
payments with respect to any Investment Guarantee Indebtedness to the extent
such Investment Guarantee Indebtedness is being serviced by such person or any
Subsidiary of such person) by such person or a Subsidiary of such person of an
obligation of another person shall be deemed to be the interest expense
attributable to the Indebtedness guaranteed.
"CONSOLIDATED NET INCOME" means, with respect to any person for any period,
the net income (or loss) of such person and its Consolidated Subsidiaries
(determined on a consolidated basis in accordance with GAAP) for such period,
adjusted to exclude (only to the extent included in computing such net income
(or loss) and without duplication): (a) all gains or losses which are either
extraordinary (as determined in accordance with GAAP), unusual or non-recurring
(including any gain or loss from the sale or other disposition of assets or
currency transactions outside the ordinary course of business or from the
issuance or sale of any capital stock), (b) the net income, if positive, of any
person, other than a Consolidated Subsidiary, in which such person or any of its
Consolidated Subsidiaries has an interest, except to the extent of the amount of
any dividends or distributions actually paid in cash to such person or a wholly
owned Consolidated Subsidiary of such person during such period, but in any case
not in excess of such person's PRO RATA share of such person's net income for
such period, (c) the net income or loss of any person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition,
(d) the net income, if positive, of any of such person's Consolidated
Subsidiaries to the extent that the declaration or payment of dividends or
similar distributions is not at the time permitted by operation of the terms of
its charter or bylaws or any other agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to such Consolidated
Subsidiary, except for restrictions under the Credit Agreement, and (e) the
cumulative effect of a change in accounting principles.
"CONSOLIDATED NET WORTH" of any person at any date means the aggregate
consolidated stockholders' equity of such person (plus amounts of equity
attributable to preferred stock) and its Consolidated Subsidiaries, as would be
shown on the consolidated balance sheet of such person prepared in accordance
with GAAP, adjusted to exclude (to the extent included in calculating such
equity), the amount of any such stockholders' equity attributable to
Disqualified Capital Stock or treasury stock of such person and its Consolidated
Subsidiaries.
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"CONSOLIDATED SUBSIDIARY" means, for any person, each Subsidiary of such
person (whether now existing or hereafter created or acquired) the financial
statements of which are consolidated for financial statement reporting purposes
with the financial statements of such person in accordance with GAAP.
"CREDIT AGREEMENT" means the Third Amended and Restated Credit Agreement
dated as of November 1, 1999, by and among Sun Bahamas, the Company, certain of
the Company's subsidiaries, certain financial institutions and The Bank of Nova
Scotia, as administrative and collateral agent, providing for a revolving credit
facility, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, as such credit
agreement and/or related documents may be amended, restated, supplemented,
renewed, replaced or otherwise modified from time to time whether or not with
the same agent, trustee, representative lenders or holders, and, subject to the
proviso to the next succeeding sentence, irrespective of any changes in the
terms and conditions thereof. Without limiting the generality of the foregoing,
the term "Credit Agreement" shall include agreements in respect of Interest Swap
and Hedging Obligations entered into for bona fide hedging purposes and not
entered into for speculative purposes with lenders party to the Credit Agreement
or their affiliates and shall also include any amendment, amendment and
restatement, renewal, extension, restructuring, supplement or modification to
any Credit Agreement and all refundings, refinancings and replacements of any
Credit Agreement, including any agreement (i) extending or shortening the
maturity of any Indebtedness incurred thereunder or contemplated thereby,
(ii) adding or deleting borrowers or guarantors thereunder, so long as borrowers
and issuers include one or more of Sun International and its Subsidiaries and
their respective successors and assigns, (iii) increasing the amount of
Indebtedness incurred thereunder or available to be borrowed thereunder,
PROVIDED that on the date such Indebtedness is incurred it would not be
prohibited by the provisions of the covenant described above under "Limitation
on Incurrence of Additional Indebtedness and Disqualified Capital Stock," or
(iv) otherwise altering the terms and conditions thereof in a manner not
prohibited by the terms hereof.
"DISQUALIFIED CAPITAL STOCK" means (i) except as set forth in (ii), with
respect to any person, Equity Interests of such person that, by their terms or
by the terms of any security into which they are convertible, exercisable or
exchangeable, are, or upon the happening of an event or the passage of time
would be, required to be redeemed or repurchased (including at the option of the
holder thereof) by such person or any of its Subsidiaries, in whole or in part,
on or prior to the Stated Maturity of the Notes and (ii) with respect to any
Subsidiary of such person (other than the Guarantors), any Equity Interests
other than any common equity with no preference, privileges, or redemption or
repayment provisions. Notwithstanding the foregoing, any Equity Interests that
would constitute Disqualified Capital Stock solely because the holders thereof
have the right to require the Company to repurchase such Equity Interests upon
the occurrence of a change of control or with the proceeds of an asset sale
shall not constitute Disqualified Capital Stock if the terms of such Equity
Interests provide that the Issuers may not repurchase or redeem any such Equity
Interests pursuant to such provisions prior to the Issuers' purchase of the
Notes as are required to be purchased pursuant to the provisions of the
Indenture as described under "Repurchase of Notes at the Option of the Holder
upon a Change of Control" and "Limitation on Sale of Assets and Subsidiary
Stock," as applicable.
"EQUITY INTEREST" of any person means any shares, interests, participations
or other equivalents (however designated) in such person's equity, and shall in
any event include any Capital Stock issued by, or partnership or membership
interests in, such person.
"EVENT OF LOSS" means, with respect to any property or asset, any (i) loss,
destruction or damage of such property or asset or (ii) any condemnation,
seizure or taking, by exercise of the power of eminent domain or otherwise, of
such property or asset, or confiscation or requisition of the use of such
property or asset.
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"EXEMPTED AFFILIATE TRANSACTION" means any transaction (i) solely between or
among any of the Issuers and any of the Guarantors, and (ii) solely between or
among any of the Issuers and any of their wholly owned Subsidiaries.
"FF&E INDEBTEDNESS" means any Indebtedness of a person to any seller or
other person incurred to finance the acquisition (including in the case of a
Capitalized Lease Obligation, the lease) or improvement of any Gaming Facility
or hotel or gaming or hotel related fixtures, furniture or equipment which is
directly related to a Related Business of Sun International and which is
incurred concurrently with such acquisition and is secured only by the assets so
financed.
"GAAP" means United States generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession in the United States as in effect on the Issue Date.
"GAMING AUTHORITY" means any regulatory body responsible for a gaming
license held by Sun International or a Subsidiary of Sun International or any
agency (including, without limitation, any agency established by a United States
Federally-recognized Indian tribe to regulate gaming on such tribe's
reservation) which has, or may at any time after the Issue Date have,
jurisdiction over the gaming activities of the Issuers or any Subsidiary of any
of the Issuers or any successor to such authority.
"GAMING FACILITY" means any gaming or parimutuel wagering establishment and
other property or assets directly ancillary thereto or used in connection
therewith, including any building, restaurant, hotel, theater, parking
facilities, retail shops, land, golf courses and other recreation and
entertainment facilities, vessel, barge, ship, and equipment.
"INDEBTEDNESS" of any person means, without duplication, (a) all liabilities
and obligations, contingent or otherwise, of such person to the extent such
liabilities and obligations would appear as a liability upon the consolidated
balance sheet of such person in accordance with GAAP, (i) in respect of borrowed
money (whether or not the recourse of the lender is to the whole of the assets
of such person or only to a portion thereof), (ii) evidenced by bonds, notes,
debentures or similar instruments, or (iii) representing the balance deferred
and unpaid of the purchase price of any property or services, except those
incurred in the ordinary course of its business that would constitute ordinarily
trade payables to trade creditors, (b) all liabilities and obligations,
contingent or otherwise, of such Person (i) evidenced by bankers' acceptances or
similar instruments issued or accepted by banks, (ii) relating to any
Capitalized Lease Obligation, or (iii) evidenced by a letter of credit or a
reimbursement obligation of such person with respect to any letter of credit;
(c) all net obligations of such person under Interest Swap and Hedging
Obligations; (d) all liabilities and obligations of others of the kind described
in the preceding clause (a), (b) or (c) that such person has guaranteed or that
is otherwise its legal liability or which are secured by any assets or property
of such person, (e) any and all deferrals, renewals, extensions, refinancing and
refundings (whether direct or indirect) of, or amendments, modifications or
supplements to, any liability of the kind described in any of the preceding
clauses (a), (b) or (c), or this clause (e), whether or not between or among the
same parties, and (f) all Disqualified Capital Stock of such Person (measured at
the greater of its voluntary or involuntary maximum fixed repurchase price plus
accrued and unpaid dividends). Notwithstanding the foregoing, (1) an Investment
Guarantee shall not constitute Indebtedness and (2) Investment Guarantee
Indebtedness shall constitute Indebtedness. For purposes hereof, the "maximum
fixed repurchase price" of any Disqualified Capital Stock which does not have a
fixed repurchase price shall be calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified Capital Stock were purchased
on any date on which Indebtedness shall be required to be determined pursuant to
the Indenture, and if such price is based upon, or measured by, the Fair Market
Value of such Disqualified
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Capital Stock, such Fair Market Value to be determined in good faith by the
Board of Directors of Sun International) of such Disqualified Capital Stock. The
amount of any Indebtedness outstanding as of any date shall be (1) the accreted
value thereof, in the case of any Indebtedness issued with original issue
discount, but the accretion of original issue discount in accordance with the
original terms of Indebtedness issued with an original issue discount will not
be deemed to be an incurrence and (2) the principal amount thereof, in the case
of any other Indebtedness.
"INTEREST SWAP AND HEDGING OBLIGATION" means any obligation of any person
pursuant to any interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement, interest rate exchange agreement, currency
exchange agreement or any other agreement or arrangement designed to protect
against fluctuations in interest rates or currency values, including, without
limitation, any arrangement whereby, directly or indirectly, such person is
entitled to receive from time to time periodic payments calculated by applying
either a fixed or floating rate of interest on a stated notional amount in
exchange for periodic payments made by such person calculated by applying a
fixed or floating rate of interest on the same notional amount.
"INVESTMENT" by any person in any other person means (without duplication)
(a) the acquisition (whether by purchase, merger, consolidation or otherwise) by
such person (whether for cash, property, services, securities or otherwise) of
capital stock, bonds, notes, debentures, partnership or other ownership
interests or other securities, including any options or warrants, of such other
person or any agreement to make any such acquisition; (b) the making by such
person of any deposit with, or advance, loan or other extension of credit to,
such other person (including the purchase of property from another person
subject to an understanding or agreement, contingent or otherwise, to resell
such property to such other person) or any commitment to make any such advance,
loan or extension (but excluding accounts receivable or deposits arising in the
ordinary course of business); (c) other than (i) guarantees of Indebtedness of
Sun International or any Subsidiary to the extent permitted by the covenant
"Limitation on Incurrence of Additional Indebtedness and Disqualified Capital
Stock" and (ii) Investment Guarantees, the entering into by such person of any
guarantee of, or other credit support or contingent obligation with respect to,
Indebtedness or other liability of such other person; (d) the making of any
capital contribution by such person to such other person; (e) the designation by
the Board of Directors of Sun International of any person to be an Unrestricted
Subsidiary; and (f) the making by such person or any Subsidiary of such person
of any Investment Guarantee Payment. Sun International shall be deemed to make
an Investment in an amount equal to the fair market value of the net assets of
any subsidiary (or, if neither Sun International nor any of its Subsidiaries has
theretofore made an Investment in such subsidiary, in an amount equal to the
Investments being made), at the time that such subsidiary is designated an
Unrestricted Subsidiary, and any property transferred to an Unrestricted
Subsidiary from Sun International or a Subsidiary shall be deemed an Investment
valued at its fair market value at the time of such transfer.
"INVESTMENT GRADE RATING" means a rating equal to or higher than Baa3 (or
the equivalent) by Moody's (or any successor to the rating agency business
thereof) or BBB- (or the equivalent) by S&P (or any successor to the rating
agency business thereof).
"INVESTMENT GRADE STATUS" means any time at which the ratings of the Notes
by both Moody's (or any successor to the rating agency business thereof) and S&P
(or any successor to the rating agency business thereof) are Investment Grade
Ratings.
"INVESTMENT GUARANTEE" means (1) any guarantee (with full rights of
subrogation), directly or indirectly, by the Issuers or any Guarantor of
Indebtedness of a Permitted Joint Venture, (2) any guarantee (with full rights
of subrogation), directly or indirectly, by the Issuers or any Guarantor of
Indebtedness of any person to whom any of the Issuers or the Guarantors provide
management services pursuant to a Management Services Agreement, which
Indebtedness matures by its terms prior to the time (if any) that such
Management Services Agreement is scheduled to expire, or (3) any
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guarantee (with full rights of subrogation), directly or indirectly, by the
Issuers or any Guarantor of Indebtedness which matures by its terms prior to the
time (if any) that the applicable Native American Services Agreement is
scheduled to expire or completion guarantees in connection with any development
services or management services provided by any of the Issuers, the Guarantors
or TCA, as applicable, pursuant to any Native American Services Agreement,
PROVIDED that in each case at the time such guarantee is incurred or such
completion guarantee is entered into, the Issuers and the Guarantors are
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Debt Incurrence Ratio in the covenant described above under "Limitation on
Incurrence of Additional Indebtedness and Disqualified Capital Stock."
"INVESTMENT GUARANTEE INDEBTEDNESS" of any Issuer or Guarantor means any
Indebtedness of another person guaranteed by such Issuer or Guarantor pursuant
to an Investment Guarantee, on and after the time such Issuer or Guarantor makes
any interest or comparable debt service payment with respect to such guaranteed
Indebtedness.
"INVESTMENT GUARANTEE PAYMENTS" means, without duplication, (1) any payments
made pursuant to any Investment Guarantee, or (2) the full amount of any
Investment Guarantee if, at any time, the person whose Indebtedness is
guaranteed by such Investment Guarantee ceases to constitute a Permitted Joint
Venture as a result of a decline in the Issuers' or Guarantor's ownership
interest to less than 35% as a result of a sale, transfer or other disposition
of Capital Stock of such person by the Issuers or any Guarantor, or (3) the full
amount of any Investment Guarantee if, at any time, the Management Services
Agreement or Native American Services Agreement with respect to the person whose
Indebtedness is guaranteed by such Investment Guarantee is terminated without a
concurrent replacement thereof that has an expiration after the maturity of all
Indebtedness of such person guaranteed by any of the Issuers or the Guarantors.
"ISSUE DATE" means the date of first issuance of Notes under the Indenture.
"JUNIOR SECURITY" means any Qualified Capital Stock and any Indebtedness of
an Issuer or a Guarantor, as applicable, that (i) is subordinated in right of
payment to Senior Debt at least to the same extent as the Notes or the
Guarantee, as applicable, (ii) has no scheduled installment of principal due, by
redemption, sinking fund payment or otherwise, on or prior to the Stated
Maturity of the Notes, (iii) does not have covenants or default provisions
materially more beneficial to the holders of the Notes than those in effect with
respect to the Notes on the Issue Date and (iv) was authorized by an order or
decree of a court of competent jurisdiction that gave effect to (and states in
such order or decree that effect has been given to) the subordination of such
securities to all Senior Debt of the applicable Issuer or Guarantor not paid in
full in cash or Cash Equivalents in connection with such reorganization;
provided that all such Senior Debt is assumed by the reorganized corporation and
the rights of the holders of any such Senior Debt are not, without the consent
of such holders, altered by such reorganization, which consent shall be deemed
to have been given if the holders of such Senior Debt, individually or as a
class, shall have approved such reorganization.
"LIEN" means any mortgage, charge, pledge, lien (statutory or otherwise),
privilege, security interest, hypothecation or other encumbrance upon or with
respect to any property of any kind, real or personal, movable or immovable, now
owned or hereafter acquired.
"MANAGEMENT SERVICES AGREEMENT" means any written agreement (other than a
Native American Services Agreement) pursuant to which the Issuers or any
Guarantor provides or will provide management services in connection with a
Gaming Facility and/or a hotel facility and related amenities.
"MOODY'S" means Moody's Investor Services, Inc.
"NATIVE AMERICAN SERVICES AGREEMENT" means any written agreement pursuant to
which the Issuers, any Guarantor or TCA provides or will provide development
services or management services in connection with a Gaming Facility operated by
a Native North American Tribe or agency or
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instrumentality thereof, provided that such Issuer or Guarantor or TCA has
obtained a customary opinion from outside counsel that such agreement is
enforceable.
"NET CASH PROCEEDS" means the aggregate amount of Cash or Cash Equivalents
received by Sun International in the case of a sale of Qualified Capital Stock
and by Sun International and its Subsidiaries in respect of an Asset Sale plus,
in the case of an issuance of Qualified Capital Stock upon any exercise,
exchange or conversion of securities (including options, warrants, rights and
convertible or exchangeable debt) of Sun International that were issued for cash
on or after the Issue Date, the amount of cash originally received by Sun
International upon the issuance of such securities (including options, warrants,
rights and convertible or exchangeable debt) less, in each case, the sum of all
payments, fees, commissions and reasonable and customary expenses (including,
without limitation, the fees and expenses of legal counsel and investment
banking fees and expenses) incurred in connection with such Asset Sale or sale
of Qualified Capital Stock, and, in the case of an Asset Sale only, less the
amount (estimated reasonably and in good faith by Sun International) of income,
franchise, sales and other applicable taxes required to be paid by Sun
International or any of its respective Subsidiaries in connection with such
Asset Sale.
"NON-RECOURSE INDEBTEDNESS" means Indebtedness of a person to the extent
that under the terms thereof or pursuant to applicable law (i) no personal
recourse shall be had against such person for the payment of the principal of or
interest or premium, if any, on such Indebtedness, and (ii) enforcement of
obligations on such Indebtedness is limited only to recourse against interests
in property purchased with the proceeds of the incurrence of such Indebtedness
and as to which none of the Issuers or any of its Subsidiaries provides any
credit support or is liable.
"PERMITTED HOLDER" means Solomon Kerzner, his immediate family or a trust or
similar entity existing solely for his benefit or for the benefit of his
immediate family.
"PERMITTED INDEBTEDNESS" means Indebtedness incurred as follows:
(a) the Issuers and the Guarantors may incur Indebtedness (i) pursuant
to the Credit Agreement up to an aggregate principal amount outstanding
(including any Indebtedness issued to refinance, refund or replace such
Indebtedness) pursuant to this clause (a) at any time of $350 million
(excluding any amounts with respect to Interest Swap and Hedging
Obligations), minus the amount of any such Indebtedness retired with Net
Cash Proceeds from any Asset Sale or assumed by a transferee in an Asset
Sale (provided any commitment in respect of such Indebtedness is permanently
reduced) and (ii) the Issuers and the Guarantors may incur Indebtedness with
respect to Interest Swap and Hedging Obligations entered into for bona fide
hedging purposes and not entered into for speculative purposes;
(b) the Issuers and the Guarantors may incur Indebtedness evidenced by
the Notes and the Guarantees and represented by the Indenture up to the
amounts issued on the Issue Date;
(c) the Issuers and the Guarantors may incur FF&E Indebtedness on or
after the Issue Date, PROVIDED that (i) such FF&E Indebtedness is
Non-Recourse Indebtedness and (ii) such Indebtedness shall not constitute
more than 100% of the cost (determined in accordance with GAAP) to the
Issuers or such Guarantor, as applicable, of the property so purchased or
leased or the cost of the relevant improvements;
(d) the Issuers and the Guarantors may incur Indebtedness solely in
respect of bankers' acceptances and performance bonds (to the extent that
such incurrence does not result in the incurrence of any obligation to repay
any obligation relating to borrowed money of others), all in the ordinary
course of business in accordance with customary industry practices, in
amounts and for the purposes customary in their industry;
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(e) the Issuers may incur Indebtedness to any wholly owned Subsidiary,
and any wholly owned Subsidiary may incur Indebtedness to any other wholly
owned Subsidiary or to an Issuer; PROVIDED, that, in the case of
Indebtedness of the Issuers (other than Indebtedness that is required to be
pledged to the lenders under the Credit Agreement), such obligations shall
be unsecured and subordinated in all respects to the Issuers' obligations
pursuant to the Notes, and the date of any event that causes a Subsidiary to
no longer be a wholly owned Subsidiary shall be an Incurrence Date;
(f) the Issuers and the Guarantors may incur Investment Guarantee
Indebtedness; and
(g) the Issuers and their Subsidiaries, as applicable, may incur
Refinancing Indebtedness with respect to any Indebtedness or Disqualified
Capital Stock, as applicable, described in clauses (b), (f) and (g) of this
definition or incurred under the Debt Incurrence Ratio contained in the
covenant "Limitation on Incurrence of Additional Indebtedness and
Disqualified Capital Stock" or which is outstanding on the Issue Date so
long as such Refinancing Indebtedness is secured only by the assets that
secured the Indebtedness so refinanced or otherwise replaced.
"PERMITTED INVESTMENT" means (a) any Investment in any of the Notes;
(b) any Investment in Cash Equivalents; (c) any Investment in intercompany notes
to the extent permitted under clause (e) of the definition of "Permitted
Indebtedness"; (d) any Investment in a person in a Related Business who, after
such Investment, becomes a Subsidiary of an Issuer and a Guarantor of the Notes;
(e) any Investment in any property or assets to be used by an Issuer or
Guarantor in a Related Business; (f) any Investment made as a result of the
receipt of non-cash consideration from an Asset Sale that was made pursuant to
and in compliance with the covenant described above under the caption
"Limitation on Sale of Assets and Subsidiary Stock"; (g) Investments by the
Issuers or any Guarantor in one or more persons engaged in a Related Business,
PROVIDED that (1) after giving PRO FORMA effect to each such Investment, the
aggregate amount of all such Investments made on and after the Issue Date
pursuant to this clause (g) that are outstanding (less an amount (not to exceed
the aggregate amount of Investments previously made pursuant to this
clause (g)) equal to the net reduction in such Investments resulting from any
dividends, repayment of loans or advances or other transfers of assets to the
Issuers or any Guarantor or the proceeds realized on sale of such Investments or
representing the return of capital or the satisfaction or reduction (other than
by means of payments by the Issuers or any Subsidiary) of obligations of other
persons which have been guaranteed by the Issuers or any Guarantor or the
release or expiration of any such guarantee; PROVIDED that the amount of
anything credited pursuant to this clause shall not exceed its Fair Market Value
at the time of transfer) at any time does not in the aggregate exceed
$85 million (measured by the value attributed to the Investment at the time made
or returned, as applicable), and (2) at the time of such Investment, the Issuers
and the Guarantors are permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Debt Incurrence Ratio in the covenant described
above under "Limitation on Incurrence of Additional Indebtedness and
Disqualified Capital Stock"; (h) Investments in one or more persons made by the
Issuers or any Guarantor in connection with a Gaming Facility to be developed in
the Catskill region of New York pursuant to a Native American Services Agreement
with the Stockbridge-Munsee Band of Mohican Indians or in connection with any
Gaming Facility developed with or managed on behalf of any Native North American
tribe or any agency or instrumentality thereof pursuant to a Native American
Services Agreement, PROVIDED that (1) after giving PRO FORMA effect to each such
Investment, the aggregate amount of all such Investments made on and after the
Issue Date pursuant to this clause (h) that are outstanding (less an amount (not
to exceed the aggregate amount of Investments previously made pursuant to this
clause (h)) equal to the net reduction in such investments resulting from any
dividends, repayment of loans or advances or other transfers of assets to the
Issuers or any Guarantor or the proceeds realized on sale of such Investments or
representing the return of capital or the satisfaction or reduction (other than
by means of payments by the Issuers or any Subsidiary) of obligations of other
persons which have been guaranteed by the Issuers or any Guarantor or the
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release or expiration of any such guarantee; PROVIDED that the amount of
anything credited pursuant to this clause shall not exceed its Fair Market Value
at the time of transfer) at any time does not in the aggregate exceed
$50 million (measured by the value attributed to the Investment at the time made
or returned, as applicable), and (2) at the time of such Investment, the Issuers
and the Guarantors are permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Debt Incurrence Ratio in the covenant described
above under "Limitation on Incurrence of Additional Indebtedness and
Disqualified Capital Stock"; and (i) any Investments solely in exchange for the
issuance of Qualified Capital Stock.
"PERMITTED JOINT VENTURE" means a person primarily engaged or preparing to
engage in a Related Business as to which one of the Issuers or a Guarantor owns
at least 35% of the shares of Capital Stock (including at least 35% of the total
voting power thereof) of such Person.
"PERMITTED LIEN" means (a) any Lien securing the Notes; (b) any Lien
securing Indebtedness of a Person existing at the time such Person becomes a
Subsidiary or is merged with or into either of the Issuers or a Subsidiary of
either of the Issuers or Liens securing Indebtedness incurred in connection with
an Acquisition, PROVIDED that such Liens were in existence prior to the date of
such acquisition, merger or consolidation, were not incurred in anticipation
thereof, and do not extend to any other assets; (c) any Lien in favor of either
of the Issuers or any Guarantor; and (d) any Lien arising from FF&E Indebtedness
permitted to be incurred under clause (c) of the definition of "Permitted
Indebtedness," PROVIDED such Lien relates solely to the property which is
subject to such FF&E Indebtedness.
"QUALIFIED CAPITAL STOCK" means any Capital Stock of Sun International that
is not Disqualified Capital Stock.
"QUALIFIED EQUITY OFFERING" means (1) an underwritten registered public
offering of Ordinary Shares of Sun International for cash, other than pursuant
to Form S-8 (or any successor thereto) and other than Ordinary Shares of Sun
International issued pursuant to employee benefit plans or as compensation to
employees, and (2) an unregistered offering of Ordinary Shares of Sun
International for cash resulting in net proceeds to Sun International in excess
of $50 million.
"QUALIFIED EXCHANGE" means any legal defeasance, redemption, retirement,
repurchase or other acquisition of Capital Stock or Indebtedness of Sun
International issued on or after the Issue Date with the Net Cash Proceeds
received by Sun International from the substantially concurrent sale of
Qualified Capital Stock or any exchange of Qualified Capital Stock for any
Capital Stock or Indebtedness of Sun International outstanding on or issued on
or after the Issue Date.
"RATING AGENCIES" means S&P and Moody's or any successor to the respective
rating agency businesses thereof.
"REFERENCE PERIOD" with regard to any person means the four full fiscal
quarters (or such lesser period during which such person has been in existence)
ended immediately preceding any date upon which any determination is to be made
pursuant to the terms of the Notes or the Indenture.
"REFINANCING INDEBTEDNESS" means Indebtedness or Disqualified Capital Stock
(a) issued in exchange for, or the proceeds from the issuance and sale of which
are used substantially concurrently to repay, redeem, defease, refund,
refinance, discharge or otherwise retire for value, in whole or in part, or
(b) constituting an amendment, modification or supplement to, or a deferral or
renewal of ((a) and (b) above are, collectively, a "Refinancing"), any
Indebtedness or Disqualified Capital Stock in a principal amount or, in the case
of Disqualified Capital Stock, liquidation preference, not to exceed (after
deduction of reasonable and customary fees and expenses, including any premium
and defeasance costs, incurred in connection with the Refinancing) the lesser of
(i) the principal amount or, in the case of Disqualified Capital Stock,
liquidation preference, of the Indebtedness or Disqualified Capital Stock so
Refinanced and (ii) if such Indebtedness being Refinanced was issued with an
original
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issue discount, the accreted value thereof (as determined in accordance with
GAAP) at the time of such Refinancing; provided, that (A) such Refinancing
Indebtedness of any Subsidiary of Sun International shall only be used to
Refinance outstanding Indebtedness or Disqualified Capital Stock of such
Subsidiary, (B) such Refinancing Indebtedness shall (x) not have an Average Life
shorter than the Indebtedness or Disqualified Capital Stock to be so refinanced
at the time of such Refinancing and (y) in all respects, be no less subordinated
or junior, if applicable, to the rights of Holders of the Notes than was the
Indebtedness or Disqualified Capital Stock to be refinanced and (C) such
Refinancing Indebtedness shall have a final stated maturity or redemption date,
as applicable, no earlier than the final stated maturity or redemption date, as
applicable, of the Indebtedness or Disqualified Capital Stock to be so
refinanced.
"RELATED BUSINESS" means the gaming or hotel business and other businesses
necessary for, or in the good faith judgment of the Board of Directors of Sun
International, incident to, connected with, arising out of, or developed or
operated to permit or facilitate the conduct or pursuit of the gaming or hotel
business (including developing or operating sports or entertainment facilities,
retail facilities, restaurants, night clubs, transportation and communications
services or other related activities or enterprises and any additions or
improvements thereto) and potential opportunities in the gaming or hotel
business.
"REPRESENTATIVE" means the agent or representative in respect of the lenders
party to the Credit Agreement.
"RESTRICTED PAYMENT" means, with respect to any person, (a) the declaration
or payment of any dividend or other distribution in respect of Equity Interests
of such person or any parent or Subsidiary of such person, (b) any payment on
account of the purchase, redemption or other acquisition or retirement for value
of Equity Interests of such person or any parent or Subsidiary of such person,
(c) other than with the proceeds from the substantially concurrent sale of, or
in exchange for, Refinancing Indebtedness, any purchase, redemption, or other
acquisition or retirement for value of, any payment in respect of any amendment
of the terms of or any defeasance of, any Subordinated Indebtedness, directly or
indirectly, by such person or a Subsidiary of such person prior to the scheduled
maturity, any scheduled repayment of principal, or scheduled sinking fund
payment, as the case may be, of such Indebtedness and (d) any Investment by such
person, other than a Permitted Investment; PROVIDED, HOWEVER, that the term
"Restricted Payment" does not include (i) any dividend, distribution or other
payment on or with respect to Equity Interests of an Issuer to the extent
payable solely in shares of Qualified Capital Stock of such Issuer; or (ii) any
dividend, distribution or other payment to the Issuers, or to any Guarantors, by
Sun International or any of its Subsidiaries.
"S&P" means Standard and Poor's Ratings Group, a division of the McGraw-Hill
Companies, Inc.
"SENIOR DEBT" of Sun International, SINA or any Guarantor means Indebtedness
(including and together with all monetary obligations in respect of the Credit
Agreement, and interest, whether or not allowable, accruing on Indebtedness
incurred pursuant to the Credit Agreement after the filing of a petition
initiating any proceeding under any bankruptcy, insolvency or similar law or
which would have accrued but for such filing) of Sun International, SINA or such
Guarantor arising under the Credit Agreement or that, by the terms of the
instrument creating or evidencing such Indebtedness, is expressly designated
Senior Debt and made senior in right of payment to the Notes or the applicable
Guarantee; PROVIDED that in no event shall Senior Debt include (a) Indebtedness
to any Subsidiary of Sun International or any officer, director or employee of
Sun International or any Subsidiary of Sun International (other than
Indebtedness that is required to be pledged to the lenders under the Credit
Agreement), (b) Indebtedness incurred in violation of the terms of the Indenture
including, without limitation, Indebtedness claiming to be subordinated to any
other Indebtedness and senior to the Notes, (c) Indebtedness to trade creditors,
(d) Disqualified Capital Stock, and (e) any liability for taxes owed or owing by
Sun International, SINA or such Guarantor.
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"SIGNIFICANT SUBSIDIARY" shall have the meaning provided under
Regulation S-X under the Securities Act, as in effect on the Issue Date.
"STATED MATURITY," when used with respect to any Note, means August 15,
2011.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of Sun International, SINA or
a Guarantor that is subordinated in right of payment to the Notes or such
Guarantee, as applicable, in any respect or, for purposes of the definition of
Restricted Payments only, has a stated maturity on (except for the Notes) or
after the Stated Maturity.
"SUBSIDIARY," with respect to any person, means (i) a corporation a majority
of whose Equity Interests with voting power, under ordinary circumstances, to
elect directors is at the time, directly or indirectly, owned by such person, by
such person and one or more Subsidiaries of such person or by one or more
Subsidiaries of such person, (ii) any other person (other than a corporation) in
which such person, one or more Subsidiaries of such person, or such person and
one or more Subsidiaries of such person, directly or indirectly, at the date of
determination thereof has at least majority ownership interest, or (iii) a
partnership in which such person or a Subsidiary of such person is, at the time,
a general partner. Notwithstanding the foregoing, an Unrestricted Subsidiary
shall not be a Subsidiary of Sun International or any Subsidiary of Sun
International. Unless the context requires otherwise, Subsidiary means each
direct and indirect Subsidiary of Sun International.
"TCA" means Trading Cove Associates, a Connecticut general partnership and
its majority owned subsidiaries, so long as the Issuers and the Guarantors
maintain at least their ownership interest in the partnership (including
priorities, preferences and privileges with respect to distributions or any
other payments or voting power) owned on the Issue Date.
"UNRESTRICTED SUBSIDIARY" means any subsidiary of Sun International (other
than SINA), that does not own any Capital Stock of, or own or hold any Lien on
any property of, Sun International or any other Subsidiary of Sun International,
including SINA, and that shall be designated an Unrestricted Subsidiary by the
Board of Directors of Sun International; PROVIDED, that (i) such subsidiary
shall not engage, to any substantial extent, in any line or lines of business
activity other than a Related Business, (ii) neither immediately prior thereto
nor after giving pro forma effect to such designation would there exist a
Default or Event of Default, (iii) immediately after giving pro forma effect
thereto, Sun International could incur at least $1.00 of Indebtedness pursuant
to the Debt Incurrence Ratio in the covenant "Limitation on Incurrence of
Additional Indebtedness and Disqualified Capital Stock" and (iv) at the time of
such designation, such Subsidiary has no Indebtedness other than Allowed
Non-Recourse Indebtedness. The Board of Directors of Sun International may
designate any Unrestricted Subsidiary to be a Subsidiary, PROVIDED that (i) no
Default or Event of Default is existing or will occur as a consequence thereof
and (ii) immediately after giving effect to such designation, on a pro forma
basis, Sun International could incur at least $1.00 of Indebtedness pursuant to
the Debt Incurrence Ratio in the covenant "Limitation on Incurrence of
Additional Indebtedness and Disqualified Capital Stock". Each such designation
shall be evidenced by filing with the Trustee a certified copy of the resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing conditions.
"WHOLLY OWNED SUBSIDIARY" means a Subsidiary all the Equity Interests of
which are owned by Sun International or one or more wholly owned Subsidiaries of
Sun International, except for directors' qualifying shares.
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DESCRIPTION OF OTHER INDEBTEDNESS
REVOLVING CREDIT FACILITY
We have a revolving credit facility with a syndicate of banks that currently
provides for aggregate borrowings at any one time of up to $373.0 million. If
Colony exercises the Atlantic City option on or before August 12, 2001, the
amount of borrowings available under the revolving credit facility will be
further reduced by the net cash proceeds we receive. As of June 30, 2001,
borrowings under the revolving credit facility totaled $221.2 million. After
giving effect to the offering of the Old Notes, we estimated such borrowings to
be approximately $27.2 million. See "Capitalization."
Loans under the revolving credit facility bear interest at (i) the higher of
(a) the administrative agent's base rate or (b) the Federal Funds rate, in
either case plus an additional 0.750% to 1.625% based on a debt to earnings
ratio during the period, as defined, which we refer to as the debt ratio, or
(ii) the reserve-adjusted LIBOR (as defined) rate plus 1.50% to 2.25% based on
the debt ratio. After each drawdown on the revolving credit facility, interest
is due every three months for the first six months and is due monthly
thereafter. At June 30, 2001, the weighted average interest rate on amounts
outstanding under the revolving credit facility was 7.3%. Loans under the
revolving credit facility may be prepaid and reborrowed at any time and are due
in full on August 12, 2002. Commitment fees are calculated at per year rates
ranging from 0.375% to 0.500%, based on the debt ratio, applied to the undrawn
amount of the revolving credit facility and are payable quarterly.
The revolving credit facility contains restrictive covenants that include:
- restrictions on the payment of dividends;
- minimum levels of earnings before interest expense, income taxes,
depreciation and amortization, or EBITDA; and
- a minimum relationship between EBITDA and interest expense and debt.
The revolving credit facility is secured by a pledge of substantially all of
our assets.
We are currently engaged in discussions with various lenders to amend and
restate our existing revolving credit facility, which matures in August 2002.
OVERDRAFT LOAN FACILITY
We have a revolving overdraft loan facility with the Bank of Nova Scotia in
the amount of Bahamian $5.0 million (which was equal to U.S. $5.0 million as of
June 30, 2001). The overdraft facility bears interest at The Bank of Nova
Scotia's base rate for Bahamian dollar loans plus 1.5% with repayment, subject
to annual review. The overdraft facility is secured by substantially all of our
Bahamian assets and ranks PARI PASSU with our revolving credit facility. At
June 30, 2001, no amounts were outstanding under the overdraft facility.
101
DEBT SECURITIES
9.000% SENIOR SUBORDINATED NOTES
In March 1997, we and SINA co-issued $200.0 million of 9.000% senior
subordinated notes due 2007. The 9.000% notes are unconditionally guaranteed by
substantially all of our subsidiaries. Interest on the 9.000% notes is payable
semi-annually. The indenture for the 9.000% notes, contains certain covenants,
including limitations on the ability of the issuers and the guarantors to, among
other things:
- incur additional indebtedness;
- incur certain liens;
- engage in certain transactions with affiliates; and
- pay dividends and make certain other payments.
8.625% SENIOR SUBORDINATED NOTES
In December 1997, we and SINA co-issued $100.0 million of 8.625% senior
subordinated notes due December 2007. Interest on the 8.625% notes is payable
semi-annually. The indenture for the 8.625% notes contains substantially the
same covenants and restrictions as those in the indenture governing our 9.000%
notes.
102
CERTAIN TAX CONSIDERATIONS
The statements herein regarding taxation are based on the laws of The
Bahamas and the United States in force as of the date of this prospectus and are
subject to any changes in law occurring after such date, which changes could be
made on a retroactive basis. Holders of the Old Notes contemplating acceptance
of the exchange offer are advised to consult their tax advisors regarding the
tax consequences of the exchange offer.
CERTAIN BAHAMANIAN TAX CONSIDERATIONS
The following is a brief and general summary of certain Bahamian tax matters
as they may relate to the Issuers and the Holders of the New Notes. The
discussion is not exhaustive and is based on Bahamian law currently in effect.
The Bahamas does not impose any income, capital gains or withholding taxes.
Therefore, the Company is not subject to income tax in The Bahamas on an ongoing
basis, although the Company is subject to gaming taxes and other governmental
fees and charges. See "Business--Certain Matters Affecting Our Bahamanian
Operations." In addition, payments of interest with respect to the New Notes
will not be subject to any withholding tax. Any capital gains realized on the
sale or exchange of the New Notes will not be subject to Bahamian taxes, and no
Bahamian stamp duty will be due with respect to such disposition. Any capital
gains realized on the sale or exchange of Ordinary Shares of Sun International
will not be subject to Bahamian taxes, and no Bahamian stamp duty will be due
with respect to such disposition.
CERTAIN UNITED STATES TAX CONSIDERATIONS
The following summary describes the material U.S. federal income tax
consequences to initial holders of the New Notes who are subject to U.S. net
income tax with respect to the New Notes ("U.S. persons") and who hold the New
Notes as capital assets. There can be no assurance that the U.S. Internal
Revenue Service (the "IRS") will take a similar view of the purchase, ownership
or disposition of the Notes. This discussion is based upon the provisions of the
Internal Revenue Code of 1986, as amended, Treasury regulations, rulings and
judicial decisions now in effect, all of which are subject to change. It does
not include any description of the tax laws of any state, local or foreign
governments or any estate or gift tax considerations that may be applicable to
the New Notes or holders thereof. It does not discuss all aspects of U.S.
federal income taxation that may be relevant to a particular investor in light
of his particular investment circumstances or to certain types of investors
subject to special treatment under the U.S. federal income tax laws (for
example, dealers in securities or currencies, S corporations, life insurance
companies, tax-exempt organizations, taxpayers subject to the alternative
minimum tax and non-U.S. persons) and also does not discuss New Notes held as a
hedge against currency risks or as part of a straddle with other investments or
part of a "synthetic security" or other integrated investment (including a
"conversion transaction") comprised of a New Note and one or more other
investments, or situations in which the functional currency of the holder is not
the U.S. dollar. The exchange of an Old Note by a holder for an New Note should
not constitute a taxable exchange. The exchange will not result in income, gain
or loss to holders of Old Notes who participate in the exchange offer, or to the
Issuers. Such holders shall have the same adjusted basis and holding period in
New Notes immediately after the exchange as the holders had in the Old Notes
immediately prior to the exchange.
103
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account pursuant to
the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. This prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of New Notes received in exchange for Old Notes where
such Old Notes were acquired as a result of market-making activities or other
trading activities. We have agreed that, for a period of 180 days after the
expiration date, we will make this prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale.
We will not receive any proceeds from any sale of New Notes by
broker-dealers. New Notes received by broker-dealers for their own account
pursuant to the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the New Notes or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer or the purchasers of any such New Notes. Any broker-dealer that
resells New Notes that were received by it for its own account pursuant to the
exchange offer and any broker or dealer that participates in a distribution of
such New Notes may be deemed to be an "underwriter" within the meaning of the
Securities Act of 1933 and any profit on any such resale of New Notes and any
commission or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The letter of transmittal
states that, by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act of 1933.
For a period of 180 days after the expiration date we will promptly send
additional copies of this prospectus and any amendment or supplement to this
prospectus to any broker-dealer that requests such documents in the letter of
transmittal. We agreed to pay all expenses incident to the exchange offer
(including the expenses of one counsel for the Holders of the Old Notes) other
than commissions or concessions of any brokers or dealers and will indemnify the
Holders of the Old Notes (including any broker-dealers) against certain
liabilities, including liabilities under the Securities Act of 1933.
104
LEGAL MATTERS
Legal matters in connection with the exchange offer will be passed upon for
us by Giselle M. Pyfrom, Esq., our general counsel, with respect to matters of
the laws of the Commonwealth of The Bahamas and by Charles D. Adamo, Esq., our
general counsel, with respect to matters of United States federal law and New
York law.
EXPERTS
The consolidated financial statements of Sun International Hotels Limited as
of December 31, 1999 and 2000 and for each of the three years in the period
ended December 31, 2000 included in this prospectus have been audited by Arthur
Andersen LLP, independent public accountants, as stated in their reports
included herein in reliance upon such firm in giving said reports. The
consolidated financial statements of Sun International North America, Inc. as of
December 31, 1999 and 2000 and for each of the years in the period ended
December 31, 2000 are incorporated by reference in this prospectus and have been
audited by Arthur Andersen LLP, independent public accountants, as stated in
their reports incorporated by reference herein in reliance upon such firm in
giving said reports.
105
INDEX TO FINANCIAL STATEMENTS
Report of Independent Public Accountants.................... F-2
Consolidated Balance Sheets as of December 31, 1999 and 2000
and June 30, 2001 (unaudited)............................. F-3
Consolidated Statements of Operations for the Years Ended
December 31, 1998, 1999 and 2000 and the Six Months Ended
June 30, 2000 and 2001 (unaudited)........................ F-4
Consolidated Statements of Changes in Shareholders' Equity
for the Years Ended December 31, 2000, 1999 and 1998 and
for the Six Months Ended June 30, 2001 (unaudited)........ F-5
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1998, 1999 and 2000 and for the Six Months
Ended June 30, 2000 and 2001 (unaudited).................. F-6
Notes to Consolidated Financial Statements and for the Six
Months Ended June 30, 2000 and 2001 (unaudited)........... F-7
F-1
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of Sun International Hotels Limited:
We have audited the accompanying consolidated balance sheets of Sun
International Hotels Limited and subsidiaries as of December 31, 1999 and 2000,
and the related consolidated statements of operations, changes in shareholders'
equity and cash flows for each of the three years in the period ended
December 31, 2000. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Sun International Hotels
Limited and subsidiaries as of December 31, 1999 and 2000 and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 2000 in conformity with accounting principles generally
accepted in the United States.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
January 26, 2001 (except with respect to
the matter discussed in Note 20, as to
which the date is August 14, 2001)
F-2
SUN INTERNATIONAL HOTELS LIMITED
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS OF US DOLLARS)
DECEMBER 31,
----------------------- JUNE 30,
1999 2000 2001
---------- ---------- -----------
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents................................. $ 39,229 $ 22,497 $ 34,099
Restricted cash equivalents............................... 981 1,651 8,389
Trade receivables, net.................................... 44,425 40,612 44,347
Due from affiliates....................................... 14,212 34,140 25,846
Inventories............................................... 13,742 10,417 11,274
Prepaid expenses.......................................... 8,412 9,849 12,545
Net assets held for sale.................................. -- 138,350 --
---------- ---------- ----------
Total current assets.................................... 121,001 257,516 136,500
Property and equipment, net................................. 1,378,138 1,155,509 1,153,439
Note receivable............................................. -- -- 17,500
Due from affiliates--non-current............................ -- 5,069 12,311
Deferred charges and other assets, net...................... 49,884 13,120 11,832
Investment in associated companies.......................... 28,593 29,577 30,649
Goodwill, net............................................... 93,855 -- --
---------- ---------- ----------
Total assets............................................ $1,671,471 $1,460,791 $1,362,231
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt...................... $ 1,100 $ 230 $ 248
Accounts payable and accrued liabilities.................. 133,334 136,872 137,992
Due to affiliates......................................... -- -- 1,183
Capital creditors......................................... 16,950 12,954 2,939
---------- ---------- ----------
Total current liabilities............................... 151,384 150,056 142,362
Long-term debt, net of current maturities................... 578,033 668,908 521,056
Deferred income taxes....................................... 42,223 -- --
---------- ---------- ----------
Total liabilities....................................... 771,640 818,964 663,418
========== ========== ==========
Commitments and contingencies
Shareholders' equity:
Ordinary Shares, $.001 par value.......................... 34 34 34
Capital in excess of par.................................. 677,918 680,784 682,762
Retained earnings......................................... 248,425 129,321 184,339
Accumulated other comprehensive income.................... (5,569) (5,543) (5,553)
---------- ---------- ----------
920,808 804,596 861,582
Treasury stock............................................ (20,977) (162,769) (162,769)
---------- ---------- ----------
Total shareholders' equity.............................. 899,831 641,827 698,813
---------- ---------- ----------
Total liabilities and shareholders' equity.............. $1,671,471 $1,460,791 $1,362,231
========== ========== ==========
The accompanying notes are an integral part of these balance sheets.
F-3
SUN INTERNATIONAL HOTELS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS OF US DOLLARS, EXCEPT PER SHARE DATA)
FOR THE YEAR ENDED FOR THE SIX MONTHS
DECEMBER 31, ENDED JUNE 30,
------------------------------- -------------------
1998 1999 2000 2000 2001
-------- -------- --------- -------- --------
(UNAUDITED)
Revenues:
Gaming................................. $319,342 $351,545 $ 367,935 $188,086 $ 73,819
Rooms.................................. 94,942 164,831 194,008 109,415 110,604
Food and beverage...................... 86,593 137,100 147,718 80,006 72,678
Tour operations........................ 14,757 28,714 33,192 15,926 20,711
Real estate related.................... -- -- 108,650 96,091 7,757
Management and other fees.............. 40,645 46,898 35,763 16,670 18,323
Other revenues......................... 35,391 45,910 49,208 23,214 32,609
Insurance recovery..................... -- 14,209 -- -- --
-------- -------- --------- -------- --------
Gross revenues....................... 591,670 789,207 936,474 529,408 336,501
Less: promotional allowances........... (40,792) (50,240) (51,779) (28,745) (14,464)
-------- -------- --------- -------- --------
Net revenues........................... 550,878 738,967 884,695 500,663 322,037
-------- -------- --------- -------- --------
Cost and expenses:
Gaming................................. 190,543 209,177 224,765 113,337 35,345
Rooms.................................. 15,352 30,448 33,915 17,587 16,151
Food and beverage...................... 59,145 91,539 98,288 50,520 46,914
Other operating expenses............... 72,102 92,705 96,605 46,970 42,169
Real estate related.................... -- -- 32,272 25,894 2,311
Selling, general and administrative.... 70,024 93,962 103,465 51,055 42,628
Tour operations........................ 14,653 27,816 29,626 14,447 18,041
Corporate expenses..................... 18,811 16,260 25,340 12,192 12,213
Depreciation and amortization.......... 32,081 57,230 60,223 29,278 24,116
Purchase termination costs............. -- -- 11,202 11,202 --
Transaction costs...................... -- -- 7,014 7,014 --
Pre-opening expenses................... 25,961 5,398 7,616 690 4,355
Write-down of net assets held for
sale................................. -- -- 229,208 -- --
-------- -------- --------- -------- --------
Cost and expenses.................... 498,672 624,535 959,539 380,186 244,243
-------- -------- --------- -------- --------
Income (loss) from operations............ 52,206 114,432 (74,844) 120,477 77,794
-------- -------- --------- -------- --------
Other income (expense):
Interest income........................ 15,651 12,725 4,194 1,972 4,270
Interest expense, net of
capitalization....................... (4,516) (50,699) (45,678) (23,320) (26,836)
Equity in earnings of associated
companies............................ 2,730 2,628 4,225 1,014 2,804
Other, net............................. (316) 60 (688) -- (60)
-------- -------- --------- -------- --------
Other income (expense), net.......... 13,549 (35,286) (37,947) (20,334) (19,822)
-------- -------- --------- -------- --------
Income (loss) before provision for income
taxes.................................. 65,755 79,146 (112,791) 100,143 57,972
Provision for income taxes............... (8,009) (9,324) (6,313) (2,333) (2,954)
-------- -------- --------- -------- --------
Net income (loss).................... $ 57,746 $ 69,822 $(119,104) $ 97,810 $ 55,018
======== ======== ========= ======== ========
Earnings (loss) per share:
Basic.................................. $ 1.74 $ 2.09 $ (3.86) $ 2.99 $ 2.06
======== ======== ========= ======== ========
Diluted................................ $ 1.70 $ 2.05 $ (3.86) $ 2.96 $ 1.99
======== ======== ========= ======== ========
The accompanying notes are an integral part of these statements.
F-4
SUN INTERNATIONAL HOTELS LIMITED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
AND FOR THE SIX MONTHS ENDED JUNE 30, 2001 (UNAUDITED)
(IN THOUSANDS)
RETAINED EARNINGS
-------------------------
ACCUMULATED
ORDINARY SHARES CAPITAL IN OTHER COMPREHENSIVE
------------------- EXCESS OF RETAINED COMPREHENSIVE TREASURY TOTAL INCOME (LOSS)
SHARES AMOUNT PAR EARNINGS INCOME STOCK EQUITY FOR THE PERIOD
-------- -------- ---------- --------- ------------- --------- --------- --------------
Balance at December 31,
1997.................... 32,961 $33 $670,861 $ 120,857 $(1,468) $ -- $ 790,283
Translation reserves...... -- -- -- -- (2,143) -- (2,143) $ (2,143)
Exercise of share
options................. 393 1 4,734 -- -- -- 4,735 --
Exercise of warrants...... 223 -- -- -- -- -- -- --
Net income................ -- -- -- 57,746 -- -- 57,746 57,746
------ --- -------- --------- ------- --------- --------- ---------
Balance at December 31,
1998.................. 33,577 34 675,595 178,603 (3,611) -- 850,621 $ 55,603
=========
Translation reserves...... -- -- -- -- (1,958) -- (1,958) $ (1,958)
Repurchase of 1 million
Ordinary Shares......... -- -- -- -- -- (20,977) (20,977) --
Exercise of share
options................. 112 -- 2,696 -- -- -- 2,696 --
Shares canceled........... (7) -- (373) -- -- -- (373) --
Net income................ -- -- -- 69,822 -- -- 69,822 69,822
------ --- -------- --------- ------- --------- --------- ---------
Balance at December 31,
1999.................. 33,682 34 677,918 248,425 (5,569) (20,977) 899,831 $ 67,864
=========
Translation reserves...... -- -- -- -- 26 -- 26 $ 26
Repurchase of 6.1 million
Ordinary Shares........... -- -- -- -- -- (141,792) (141,792) --
Exercise of share
options................. 192 -- 2,866 -- -- -- 2,866 --
Net loss.................. -- -- -- (119,104) -- -- (119,104) (119,104)
------ --- -------- --------- ------- --------- --------- ---------
Balance at December 31,
2000.................. 33,874 34 680,784 129,321 (5,543) (162,769) 641,827 $(119,078)
=========
Translation reserves...... -- -- -- -- (10) -- (10) $ (10)
Exercise of share
options................. 118 -- 1,978 -- -- -- 1,978 --
Net income................ -- -- -- 55,018 -- -- 55,018 55,018
------ --- -------- --------- ------- --------- --------- ---------
Balance at June 30,
2001.................. 33,992 $34 $682,762 $ 184,339 $(5,553) $(162,769) $ 698,813 $ (55,008)
====== === ======== ========= ======= ========= ========= =========
The accompanying notes are an integral part of these statements.
F-5
SUN INTERNATIONAL HOTELS LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF US DOLLARS)
FOR THE YEAR ENDED FOR THE SIX MONTHS
DECEMBER 31, ENDED JUNE 30,
--------------------------------- --------------------
1998 1999 2000 2000 2001
--------- --------- --------- --------- --------
(UNAUDITED)
Cash flows from operating activities:
Net income (loss)........................................ $ 57,746 $ 69,822 $(119,104) $ 97,810 $ 55,018
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization.......................... 34,960 60,147 64,340 31,858 25,671
Write-down of net assets held for sale................. -- -- 229,208 -- --
Write-off of Desert Inn purchase termination costs..... -- -- 11,202 11,202 --
Reclass of property, plant and equipment to land held
for sale............................................. -- -- 23,912 19,736 1,618
(Gain) loss on disposition of other assets............. 316 (60) 688 -- 60
Equity in earnings of associated companies, net of
dividends received................................... (670) 23 (1,377) 672 (1,072)
Utilization of tax benefits acquired in merger......... 1,887 -- -- -- --
Provision for doubtful receivables..................... 2,189 6,466 6,492 3,192 2,499
Provision for discount on CRDA obligations, net........ 572 587 799 461 --
Net change in deferred tax liability................... (3,747) (30) 205 -- --
Net change in working capital accounts:
Receivables.......................................... (19,744) (20,440) (9,179) (4,341) (6,241)
Due from affiliates.................................. 839 (7,150) (4,658) (3,757) 7,677
Inventories and prepaid expenses..................... (1,896) (8,129) (2,052) (2,411) (3,803)
Accounts payable and accrued liabilities............. 22,603 4,198 26,490 6,450 2,488
Net change in deferred charges and other assets........ (4,953) 4,548 (1,668) (1,401) (483)
--------- --------- --------- --------- --------
Net cash provided by operating activities............ 90,102 109,982 225,298 159,471 83,432
--------- --------- --------- --------- --------
Cash flows from investing activities:
Payments for capital expenditures, net of insurance
proceeds received...................................... (443,996) (205,046) (155,892) (66,209) (33,606)
Net proceeds from the sale of non-operating land and
other assets........................................... 110,313 5,186 501 -- 196
Proceeds from redemption of subordinated notes........... -- 94,126 -- -- --
Deposit refunded (paid) for proposed Desert Inn
acquisition............................................ -- (16,117) 7,750 -- --
Payments for investment in and advances to joint
venture................................................ -- (600) (18,663) (3) (6,625)
Proceeds received from the sale of Resorts, net.......... -- -- -- -- 120,850
Sale of subordinated notes............................... 2,798 2,798 -- -- --
Reclassification of cash to net assets held for sale..... -- -- (21,453) -- --
CRDA deposits............................................ (2,955) (2,746) (2,334) (1,385) --
Other.................................................... (745) -- (361) 161 --
--------- --------- --------- --------- --------
Net cash provided by (used in) investing activities.... (334,585) (122,399) (190,452) (67,436) 80,815
--------- --------- --------- --------- --------
Cash flows from financing activities:
Proceeds from exercise of share options.................. 4,735 2,696 2,866 21 1,978
Borrowings............................................... 264,000 129,000 202,000 24,000 32,500
Repurchase of Ordinary Shares............................ -- (20,977) (141,792) -- --
Debt issuance and modification costs..................... (694) (2,361) (919) (919) --
Repayment of borrowings.................................. (113,596) (118,854) (113,063) (94,168) (180,385)
--------- --------- --------- --------- --------
Net cash provided by (used in) financing activities.... 154,445 (10,496) (50,908) (71,066) (145,907)
--------- --------- --------- --------- --------
Increase (decrease) in cash and cash equivalents......... (90,038) (22,913) (16,062) 20,969 18,340
Cash and cash equivalents at beginning of period........... 153,161 63,123 40,210 40,210 24,148
--------- --------- --------- --------- --------
Cash and cash equivalents at end of period................. $ 63,123 $ 40,210 $ 24,148 $ 61,179 $ 42,488
========= ========= ========= ========= ========
The accompanying notes are an integral part of these statements.
F-6
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED)
NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION
Sun International Hotels Limited ("SIHL") is an international resort and
gaming company that develops, operates and manages premier resort and casino
properties. The term "Company" as used herein includes SIHL and its
subsidiaries. The Company currently operates or manages resort hotels and/or
casinos in The Bahamas, Atlantic City, Indian Ocean and Dubai. In addition, the
Company earns income based on the gross revenues of a casino operated by an
unaffiliated entity in Connecticut. The Company's largest property is Atlantis,
a 2,317-room resort and casino located on Paradise Island, The Bahamas.
The financial statements for the six months ended June 30, 2000 and 2001 are
unaudited. However, the unaudited financial statements do contain all
adjustments that, in the opinion of management, are necessary to present fairly
the Company's financial position and results of operations for the interim
periods included therein. The results of operations for the six months period
presented in 2001 are not necessarily indicative of the results to be expected
for the year ending December 31, 2001.
During the fourth quarter of 2000, the Company entered into a definitive
agreement related to the Resorts Atlantic City Sale, described below under
"Atlantic City", which subsequently closed on April 25, 2001. As of
December 31, 2000, the Company reflected Resorts Atlantic City as net assets
held for sale. Accordingly, as of January 1, 2001, the operations of Resorts
Atlantic City are no longer included in the consolidated financial statements of
the Company.
THE BAHAMAS
SIHL was incorporated under the laws of the Commonwealth of The Bahamas on
August 13, 1993. The Company, through certain Bahamian subsidiaries, owns and
operates the Atlantis Resort and Casino Complex, which includes the Coral and
Beach Towers, as well as the Royal Towers which opened in December 1998, the
Ocean Club Resort, the Ocean Club Golf Course, a water plant, and other
improvements on Paradise Island, as well as land available for sale or
development.
In December 1998, the Company completed a major expansion at the Atlantis
Resort and Casino (the "Paradise Island Expansion"). The Paradise Island
Expansion included a deluxe 1,200-room hotel, a new 100,000 square-foot casino
entertainment complex, a new marina, as well as a dramatic expansion to the
ocean-themed adventure environment of Atlantis. During 1999, the Company
completed construction of a new convention facility. In 2000, the Company
completed construction of an addition to the Ocean Club Resort comprising 40
luxurious rooms and ten deluxe suites, as well as a new beachfront restaurant
operated by well-known restaurateur Jean-Georges Vongerichten. Also during 2000,
the Company completed an extensive renovation of the Ocean Club Golf Course,
including construction of a new club house, and completed the development of the
infrastructure for Ocean Club Estates, which includes 121 luxury homesites
around the golf course, as well as a ten acre site for a condominium project. As
of December 31, 2000, 102 of the homesites had been sold. During the second
quarter of 2001, the Company plans to begin construction of the condominium
project which will include four buildings with a total of 90 units, with the
first phase comprising 33 units. It is anticipated that the first units will be
completed by the second quarter of 2002.
F-7
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)
In 1999, through one of its Bahamian subsidiaries, the Company formed a
joint venture with Vistana, Inc. ("Vistana"), a subsidiary of Starwood Hotels
and Resorts Worldwide Inc. ("Starwood") to develop a timeshare project on
Paradise Island adjacent to Atlantis ("Harborside at Atlantis"). The Company and
Vistana each have a 50% interest in the joint venture. Construction of the first
phase, consisting of 82 units, began in 2000 and was completed by
February 2001. Sales of the timeshare units began in May 2000. The Company's
share of earnings from Harborside at Atlantis is included in equity earnings of
associated companies in the accompanying consolidated statements of operations.
In addition, the Company earns fees for marketing and development services
provided to Harborside at Atlantis.
ATLANTIC CITY
Through its wholly owned subsidiary Sun International North America, Inc.
("SINA"), the Company owns and operates the Resorts Atlantic City hotel and
casino in Atlantic City, New Jersey ("Resorts Atlantic City"). SINA, which has
been doing business since 1958, was acquired by SIHL in a merger transaction in
December 1996. Resorts Atlantic City includes two hotel towers which are
comprised of 644 guest rooms, a 75,000 square foot casino and a 3,000 square
foot pari-mutuel betting and slot machine area.
During the fourth quarter of 2000, the Company entered into a definitive
agreement to sell Resorts Atlantic City to an affiliate of Colony Capital LLC
("Colony") for a purchase price of $140 million, such purchase price to accrue
interest at an annual rate of 6% until closing (the "Resorts Atlantic City
Sale"). In addition, Colony has a two year option to acquire certain undeveloped
real estate owned by the Company, adjacent to Resorts Atlantic City, for a
purchase price of $40 million (the "Atlantic City Option") which option can be
extended for an additional two years under certain circumstances. The sale is
subject to certain customary conditions, including approval by the New Jersey
Casino Control Commission and is also subject to Colony receiving certain
financing in order to consummate the transaction. To facilitate Colony's
financing, SINA has agreed to lend Colony's affiliate $17.5 million toward the
purchase price of Resorts Atlantic City in exchange for an unsecured note (the
"Note") at an interest rate of 12.5% per annum. Interest is payable
semi-annually, one-half in cash and one-half in payment-in-kind notes ("PIK
Notes"), the principal balance and all outstanding interest of the Note and the
PIK Notes to be paid in seven years from the date of the original Note. The
balance of the proceeds will be paid in cash. The parties expect to close the
transaction around the end of the first quarter of 2001. As a result of entering
into the agreement to sell Resorts Atlantic City at a purchase price less than
its carrying value, the Company recorded a loss of $229.2 million in the fourth
quarter of 2000. The adjusted book value of the assets to be disposed of in the
Resorts Atlantic City Sale is reflected in the accompanying consolidated balance
sheets as net assets held for sale. If this transaction had been consummated on
December 31, 1999, on a pro forma basis, the results of operations of SIHL for
the year ended December 31, 2000 would be as follows (unaudited):
Revenues--$627.9 million; net income--$108.6 million. The pro forma information
is not necessarily indicative of future results or what the Company's results of
operation would actually have been had
F-8
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)
the Resorts Atlantic City Sale occurred at the beginning of the year. Components
of net assets held for sale are as follows (in thousands of US dollars):
Current assets.............................................. $ 34,534
Non-current assets.......................................... 173,233
Current liabilities......................................... (26,989)
Non-current liabilities..................................... (42,428)
--------
$138,350
========
CONNECTICUT
The Company has a 50% interest in, and is a managing partner of, Trading
Cove Associates ("TCA"), a Connecticut general partnership that developed, and
until December 31, 1999, had a management agreement (the "Management Agreement")
with the Mohegan Tribal Gaming Authority ("MTGA"), an instrumentality of the
Mohegan Tribe of Indians of Connecticut (the "Tribe"), to operate a casino
resort and entertainment complex situated in the town of Uncasville, Connecticut
(the "Mohegan Sun Casino"). The Mohegan Sun Casino opened on October 12, 1996.
The Management Agreement, which covered management, marketing and administration
services, provided that TCA was entitled to receive between 30% and 40% of the
net profits, as defined, of the Mohegan Sun Casino.
On February 9, 1998, the Tribe appointed TCA to develop its expansion of the
Mohegan Sun Casino, which is currently expected to cost approximately
$960.0 million, for a fee of $14 million. In addition, effective January 1,
2000, TCA turned over management of the Mohegan Sun Resort Complex (which
comprises the existing operations and the proposed expansion) to the Tribe.
Pursuant to the Relinquishment Agreement, the Management Agreement was
terminated and, effective January 1, 2000, TCA began to receive payments of five
percent of the gross revenues of the Mohegan Sun Resort Complex, which payments
will continue for a 15-year period.
In connection with the development of the Mohegan Sun Casino in 1996, the
Company held subordinated notes issued by MTGA, for which interest payments were
satisfied by the issuance of additional notes. The aggregate principal balance
on these notes, including accrued interest, was $94.1 million at December 31,
1999 when they were repaid in full. Interest earned in 1999 and 1998 on the
subordinated notes amounted to $9.9 million and $9.4 million, respectively.
PROPOSED ACQUISITION OF SIHL ORDINARY SHARES AND SELF-TENDER OFFER
On January 19, 2000, the Company announced that it had received a proposal
from Sun International Investments Limited ("SIIL"), the major shareholder of
SIHL, to acquire in a merger transaction all of the outstanding ordinary shares
(the "Ordinary Shares") of the Company not already owned by SIIL or its
shareholders for $24 per share in cash. To consider the proposal, the Company
formed a committee of independent members of the Board of Directors (the
"Special Committee") which retained its own financial and legal advisers. The
proposed transaction was subject to various conditions, including approval by
the Special Committee. On June 16, 2000, the Company announced
F-9
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)
that SIIL was not able to negotiate a mutually satisfactory transaction with the
Special Committee and that SIIL had advised the Company that its proposal had
been withdrawn.
In order to allow shareholders of the Company to elect to sell at least a
portion of their Ordinary Shares at the price formerly proposed by SIIL, in
June 2000, the Board of Directors of the Company approved a self-tender offer
for up to 5,000,000 Ordinary Shares at a $24 per share cash price. The
self-tender offer commenced on June 25, 2000 and was subject to the terms and
conditions set forth in an Offer to Purchase, including the condition that the
Ordinary Shares continue to be listed for trading on the New York Stock Exchange
and that the Company remain subject to the periodic reporting requirements of
the Securities Exchange Act of 1934. On August 2, 2000, the Company announced
the completion of the self-tender offer in which 13,554,651, of the then
outstanding 32,682,350 Ordinary Shares, were tendered. Because the self-tender
offer was oversubscribed, a pro-ration factor of 36.89% was applied, and
pursuant to the self-tender offer, 5,000,000 Ordinary Shares were purchased by
the Company at $24 per share. None of the outstanding Ordinary Shares held by
SIIL and its shareholders were tendered. In 2000, transaction costs reflected in
the accompanying consolidated statements of operations related to SIIL's
proposed acquisition of Ordinary Shares as well as the completion of the
self-tender offer.
TERMINATION OF DESERT INN ACQUISITION AGREEMENT
On March 2, 2000, SIHL and Starwood announced that they had agreed to
terminate their agreement (the "Termination Agreement") under which the Company
was to acquire the Desert Inn Hotel and Casino in Las Vegas (the "Desert Inn")
for $275 million. In connection with the proposed acquisition of the Desert Inn,
the Company had previously placed a $15 million deposit with Starwood (the
"Deposit"). As of December 31, 1999, the Deposit was included in deferred
charges and other assets in the accompanying consolidated balance sheets.
Pursuant to the Termination Agreement, the amount, if any, that the Company
would be required to pay from the Deposit was based on the ultimate sales price
of the Desert Inn to another party.
In June 2000, Starwood closed on the sale of the Desert Inn for
approximately $270 million to an unrelated party, subject to certain
post-closing adjustments. As a result, the Company was required to pay to
Starwood $7.2 million from the Deposit. The remaining $7.8 million of the
Deposit was refunded to the Company in August 2000. Purchase termination costs
in the accompanying consolidated statement of operations included the
$7.2 million paid to Starwood and $4.0 million of further costs related to the
Desert Inn transaction.
INTERIM RECENT DEVELOPMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2001 (UNAUDITED)
ATLANTIC CITY
On April 25, 2001, the Company completed the sale of Resorts Atlantic City
to Colony.
CONTROL OF SIHL
On July 3, 2001, the Company announced the restructuring of its majority
shareholder, SIIL, and the resolution of certain matters with SIIL and certain
of its shareholders. As part of the restructuring,
F-10
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)
SIIL will be dissolved and the SIIL shareholders will hold their shares in the
Company directly. In addition, the Company entered into a governance agreement
with the former shareholders of SIIL that, among other things, requires the
Company to submit to its shareholders an amendment to the Company's articles of
association that would set the term of the existing directors to expire at the
Company's annual general meeting in 2004. The Company believes that this
contemplated amendment to its articles of association will satisfy the terms of
the agreement with The Bahamas that requires SIIL to control a majority of the
Company's Board of Directors through June 30, 2004.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of
SIHL and its subsidiaries. All significant intercompany transactions and
balances have been eliminated in consolidation. Investments in associated
companies, which are less than 50% and more than 20% owned, are accounted for
under the equity method of accounting.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and costs and
expenses during the reporting period. Actual results could differ from those
estimates.
The Company provides allowances for doubtful accounts arising from casino,
hotel and other services, which are based upon a specific review of certain
outstanding receivables. In determining the amounts of the allowances, the
Company is required to make certain estimates and assumptions and actual results
may differ from these estimates and assumptions.
REVENUE RECOGNITION
The Company recognizes the net win from casino gaming activities (the
difference between gaming wins and losses) as casino revenues. Revenues from
hotel and related services are recognized at the time the related service is
performed. Real estate related revenues and profits on residential lot sales is
recognized upon delivery of the completed lots to the purchasers at closing.
Deposits collected in advance of closing are deferred and are included in
current liabilities. Management fees and other operating revenues include fees
charged to unconsolidated affiliates for casino hotel management, executive
management and project consulting. Revenues are recorded at the time the service
is provided.
PROMOTIONAL ALLOWANCES
The retail value of accommodations, food, beverage and other services
provided to customers without charge is included in gross revenues and deducted
as promotional allowances. The estimated
F-11
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
departmental costs of providing such promotional allowances are included in
gaming costs and expenses as follows:
FOR THE YEAR ENDED FOR THE SIX MONTHS
DECEMBER 31, ENDED JUNE 30,
------------------------------ -------------------
1998 1999 2000 2000 2001
-------- -------- -------- -------- --------
(UNAUDITED)
(In thousands of US dollars)
Rooms.......................................... $ 6,671 $ 7,894 $11,441 $ 9,279 $ 8,763
Food and beverage.............................. 17,921 21,692 23,587 7,197 5,934
Other.......................................... 5,819 7,762 3,727 761 513
------- ------- ------- ------- -------
$30,411 $37,348 $38,755 $17,237 $15,210
======= ======= ======= ======= =======
PRE-OPENING EXPENSES
In 1998, the Company capitalized pre-opening costs, substantially all of
which were associated with the Paradise Island Expansion, as they were incurred.
All such costs were charged to operations in the fourth quarter of 1998 in
conjunction with the opening. Effective 1999, the Company adopted Statement of
Position 98-5 which states that all such costs will be charged to expense as
incurred. In 1999, pre-opening expenses related to the opening of the newly
renovated casino at Resorts Atlantic City. In 2000, pre-opening expenses related
to the expansion of the Ocean Club and the new golf course on Paradise Island.
FOREIGN CURRENCY
Transactions denominated in foreign currencies are recorded in local
currency at actual exchange rates at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the balance sheet
dates are reported at the rates of exchange prevailing at those dates. Any gains
or losses arising on monetary assets and liabilities from a change in exchange
rates subsequent to the date of the transaction have been included in corporate
expenses in the accompanying consolidated financial statements. These amounts
were not significant for the years ended December 31, 1998, 1999 and 2000.
The financial statements of the Company's equity method investees and
certain subsidiaries are translated from their local currencies into US dollars
using current and historical exchange rates. Translation adjustments resulting
from this process are reported separately and accumulated as a component of
other comprehensive income. Upon sale or liquidation of the Company's
investments, the translation adjustment would be reported as part of the gain or
loss on sale or liquidation.
DERIVATIVE FINANCIAL INSTRUMENTS
The Company utilizes interest rate protection agreements with two
counterparties to manage the impact of interest rate changes on the Company's
variable rate debt obligation. The Company does not use derivative financial
instruments for trading purposes. Under interest rate swaps, the Company agrees
with other parties to exchange, at specified intervals, the difference between
fixed-rate and floating-rate interest amounts calculated by reference to an
agreed notional principal amount. Income
F-12
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
or expense on derivative financial instruments used to manage interest rate
exposure is recorded on an accrual basis, as an adjustment to the yield of the
underlying indebtedness over the periods covered by the contracts. If an
interest rate swap is terminated early, any resulting gain or loss would be
deferred and amortized as an adjustment of the interest cost of the underlying
indebtedness over the remaining periods originally covered by the terminated
swap. If all or part of an underlying position is terminated, the related
pro-rata portion of any unrecognized gain or loss on the swap would be
recognized in income at that time as part of the gain or loss on the
termination. Amounts receivable or payable under the agreements are included in
receivables or accrued liabilities in the accompanying consolidated balance
sheets and were not material at December 31, 1999 and 2000.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 133 "Accounting for Derivative Instruments and
Hedging Activities" ("SFAS 133"). SFAS 133, as amended, is effective for fiscal
years beginning after June 15, 2000. SFAS 133 requires that every derivative
instrument be recorded in the balance sheet as either an asset or liability
measured at its fair value. Changes in the derivative's fair values will be
recognized in income unless specific hedge accounting criteria are met. The
Company will adopt SFAS 133, as amended, beginning January 1, 2001, and does not
anticipate that it will have a material impact on its consolidated financial
statements.
CASH EQUIVALENTS
The Company considers all of its short-term money market securities
purchased with original maturities of three months or less to be cash
equivalents.
INVENTORIES
Inventories of provisions and supplies are carried at the lower of cost
(first-in, first-out) or market value. Provisions have been made to reduce
excess or obsolete inventories to their estimated net realizable value.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost and are depreciated over the
estimated useful lives reported below using the straight-line method.
Land improvements and utilities............................. 14--40 years
Hotels and other buildings.................................. 15--40 years
Furniture, machinery and equipment.......................... 2--15 years
Interest costs incurred during the construction period are capitalized.
DEFERRED CHARGES AND OTHER ASSETS
Deferred charges related to the Mohegan Sun Casino are amortized over the
term of the Management Agreement. Debt issuance costs are amortized over the
terms of the related indebtedness.
F-13
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
GOODWILL
Goodwill is amortized on a straight line basis over 40 years. Amortization
expense included in the accompanying consolidated statements of operations
related to goodwill was $2.7 million, $2.6 million and $2.6 million for the
years ended December 31, 1998, 1999 and 2000, respectively. For the six months
ended June 30, 2000 and 2001, amortization expense related to goodwill was
$1.3 million and $0, respectively. In the accompanying consolidated balance
sheets, goodwill as of December 31, 1999 relates to SIHL's investment in Resorts
Atlantic City. As a result of the Resorts Atlantic City Sale, goodwill was
written off in its entirety in the fourth quarter of 2000.
Goodwill related to the investment in associated companies is included
therein in the accompanying consolidated balance sheets. Equity in earnings of
associated companies for each of the years ended December 31, 1998, 1999 and
2000 is net of $264,000 of amortization expense related to such goodwill. Equity
in earnings of associated companies for each of the six months ended June 30,
2000 and 2001 is net of $132,000 of amortization expense related to goodwill.
STOCK OPTION COMPENSATION
The Company has elected to apply Accounting Principles Board Opinion No. 25
"Accounting for Stock Issued to Employees" and as interpreted in FASB
Interpretation No. 44 "Accounting for Certain Transactions Involving Stock
Compensation" in accounting for compensation under its stock option plans in
lieu of the alternative fair value accounting provided for under Statement of
Financial Accounting Standards No. 123 "Accounting for Stock-Based Compensation"
("SFAS 123"). Certain pro forma disclosures required by SFAS 123 are included in
Note 10.
LONG LIVED ASSETS
The Company reviews its long lived assets and certain related intangibles
for impairment whenever changes in circumstances indicate that the carrying
amount of an asset may not be fully recoverable. If changes in circumstances
indicate that the carrying amount of an asset that the Company expects to hold
and use may not be recoverable, future cash flows expected to result from the
use of the asset and its disposition must be estimated. If the undiscounted
value of the future cash flows is less than the carrying amount of the asset, an
impairment would be recognized. The Company does not believe that any such
changes have occurred except as previously described as a result of the Resorts
Atlantic City Sale and the Atlantic City Option.
INCOME TAXES
The Company is subject to income taxes in certain jurisdictions.
Accordingly, the accompanying consolidated statements of operations include
provisions and benefits for income taxes based on prevailing tax laws of those
jurisdictions.
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes." Under this
standard, deferred tax assets and liabilities are determined based on the
difference between the financial reporting and tax bases of
F-14
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
assets and liabilities at enacted tax rates. A valuation allowance is recognized
based on an estimate of the likelihood that some portion or all of the deferred
tax asset will not be realized.
As is described in Note 13, the deferred tax liability will no longer be
required as a result of the Resorts Atlantic City Sale and the Atlantic City
Option.
OTHER COMPREHENSIVE INCOME
Other comprehensive income items are not reported net of tax as they relate
to translation reserves on investments owned by foreign entities that are not
subject to taxation.
PER SHARE DATA
The Company calculates earnings (loss) per share in accordance with
Statement of Financial Accounting Standards No. 128 "Earnings per Share". The
following reconciliation of the shares used in the per share computations is
presented:
FOR THE YEAR ENDED FOR THE SIX MONTHS
DECEMBER 31, ENDED JUNE 30,
------------------------------ -------------------
1998 1999 2000 2000 2001
-------- -------- -------- -------- --------
(UNAUDITED)
(IN THOUSANDS)
Weighted average shares used in basic
computations................................. 33,270 33,465 30,849 32,682 26,660
Stock options, warrants and restricted shares
awarded...................................... 764 540 -- 328 1,025
------- ------- ------- ------- -------
Weighted average shares used in diluted
computations................................. 34,034 34,005 30,849 33,010 27,685
======= ======= ======= ======= =======
The net income amount used as the numerator in calculating basic and diluted
earnings per share is the net income in the accompanying consolidated statements
of operations. The effect of options, warrants and restricted shares was not
included in the computation of diluted loss per share in 2000 because the effect
would have been anti-dilutive.
RECLASSIFICATIONS
Certain balances in the accompanying consolidated financial statements for
1999 and 1998 have been reclassified to conform to the current year
presentation.
NOTE 3. CASH AND CASH EQUIVALENTS
Cash equivalents at December 31, 1999 and 2000 and at June 30, 2001 included
reverse repurchase agreements (federal government securities purchased under
agreements to resell those securities) under which the Company had not taken
delivery of the underlying securities and investments in a money market fund
that invests exclusively in US Treasury obligations. At December 31, 2000, the
Company held reverse repurchase agreements of $300,000, all of which matured in
the first week of January 2001.
F-15
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 3. CASH AND CASH EQUIVALENTS (CONTINUED)
At June 30, 2001, the Company held reverse repurchase agreements of
$13.1 million, all of which matured in the first week of July 2001.
NOTE 4. TRADE RECEIVABLES
Components of trade receivables were as follows:
DECEMBER 31,
------------------- JUNE 30,
1999 2000 2001
(IN THOUSANDS OF US DOLLARS) -------- -------- -----------
(UNAUDITED)
Gaming...................................................... $ 29,673 $25,283 $ 22,295
Less: allowance for doubtful accounts....................... (9,943) (11,176) (13,098)
-------- ------- --------
19,730 14,107 9,197
-------- ------- --------
Non-gaming:
Hotel and related......................................... 19,792 19,747 28,168
Other..................................................... 8,595 8,026 8,618
-------- ------- --------
28,387 27,773 36,786
Less: allowance for doubtful accounts....................... (3,692) (1,268) (1,636)
-------- ------- --------
24,695 26,505 35,150
-------- ------- --------
$ 44,425 $40,612 $ 44,347
======== ======= ========
NOTE 5. PROPERTY AND EQUIPMENT
Components of property and equipment were as follows:
DECEMBER 31,
----------------------- JUNE 30,
1999 2000 2001
(IN THOUSANDS OF US DOLLARS) ---------- ---------- -----------
(UNAUDITED)
Land and land rights..................................... $ 351,495 $ 210,247 $ 223,600
Land improvements and utilities.......................... 185,268 197,201 198,137
Hotels and other buildings............................... 704,765 575,019 593,470
Furniture, machinery and equipment....................... 185,824 162,913 179,875
Construction in progress................................. 73,645 135,409 106,970
---------- ---------- ----------
1,500,997 1,280,789 1,302,052
Less: accumulated depreciation........................... (122,859) (125,280) (148,613)
---------- ---------- ----------
$1,378,138 $1,155,509 $1,153,439
========== ========== ==========
Interest costs of $35,304,000, $4,865,000 and $11,072,000 were capitalized
in 1998, 1999 and 2000, respectively. Interest costs of $4,558,170 and $821,581
were capitalized in the first half of 2000 and 2001, respectively.
F-16
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 6. DEFERRED CHARGES AND OTHER ASSETS
Components of deferred charges and other assets were as follows:
DECEMBER 31,
------------------- JUNE 30,
1999 2000 2001
-------- -------- -----------
(IN THOUSANDS OF US DOLLARS) (UNAUDITED)
Debt issuance costs.................................... $13,400 $10,277 $ 8,762
CRDA bonds and deposits................................ 16,983 -- --
Desert Inn acquisition costs........................... 16,117 -- --
Mohegan Sun Casino..................................... 2,049 1,669 1,429
Other.................................................. 1,335 1,174 1,641
------- ------- -------
$49,884 $13,120 $11,832
======= ======= =======
NOTE 7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Components of accounts payable and accrued liabilities were as follows:
DECEMBER 31,
------------------- JUNE 30,
1999 2000 2001
(IN THOUSANDS OF US DOLLARS) -------- -------- -----------
(UNAUDITED)
Customer deposits and unearned revenues.............. $ 28,555 $ 37,007 $ 35,785
Trade payables....................................... 36,798 34,540 36,252
Accrued payroll and related taxes and benefits....... 15,541 13,688 18,042
Accrued interest..................................... 7,853 5,228 7,208
Other accrued liabilities............................ 44,587 46,409 40,705
-------- -------- --------
$133,334 $136,872 $137,992
======== ======== ========
NOTE 8. LONG TERM DEBT
Long-term debt consisted of the following:
DECEMBER 31,
------------------- JUNE 30,
1999 2000 2001
(IN THOUSANDS OF US DOLLARS) -------- -------- -----------
(UNAUDITED)
9% Senior Notes due 2007............................. $200,000 $200,000 $200,000
Unamortized discount................................. (738) (663) (623)
-------- -------- --------
199,262 199,337 199,377
8.625% Senior Notes due 2007......................... 100,000 100,000 100,000
Revolving Credit Facility............................ 278,000 369,000 221,230
Other................................................ 1,871 801 697
-------- -------- --------
579,133 669,138 521,304
Less: amounts due within one year.................... (1,100) (230) (248)
-------- -------- --------
$578,033 $668,908 $521,056
======== ======== ========
F-17
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 8. LONG TERM DEBT (CONTINUED)
9% SENIOR NOTES
The 9% senior subordinated unsecured notes due 2007 (the "9% Senior Notes"),
are unconditionally guaranteed by certain subsidiaries of SINA. Interest on the
9% Senior Notes is payable semi-annually. The indenture for the 9% Senior Notes
(the "Senior Indenture") contains certain covenants, including limitations on
the ability of the issuers and the guarantors to, among other things: (i) incur
additional indebtedness, (ii) incur certain liens, (iii) engage in certain
transactions with affiliates and (iv) pay dividends and make certain other
payments.
8.625% SENIOR NOTES
In December 1997, the Company filed a registration statement with the
Securities and Exchange Commission pursuant to which the Company may, from time
to time, issue in one or more series an aggregate of $300.0 million of its debt
securities (the "Shelf Registration"). Pursuant to the Shelf Registration, in
December 1997, the Company issued $100.0 million of senior subordinated
unsecured notes due December 2007 (the "8.625% Senior Notes"). Interest on the
8.625% Senior Notes is payable semi-annually. The indenture for the 8.625%
Senior Notes contains the same covenants and restrictions as those in the Senior
Indenture.
REVOLVING CREDIT FACILITY
The Company has a facility (the "Revolving Credit Facility") with a
syndicate of banks (the "Lenders"), with the Bank of Nova Scotia acting as
administrative agent, in which the maximum amount of borrowings that may be
outstanding is $500 million, such amount to be reduced by $125 million on
August 12, 2001. In January 2001, the Company amended the Revolving Credit
Facility to allow for the Resorts Atlantic City Sale and the Atlantic City
Option. The amendment states, among other things, that, in lieu of the
$125 million reduction discussed above, (i) if the Resorts Atlantic City Sale is
consummated on or before August 12, 2001, on the date of such consummation, the
maximum amount of borrowings that may be outstanding on the Revolving Credit
Facility will be reduced by the net cash proceeds received by the Company,
subject to a minimum cash consideration of $125 million, and (ii) if the
Atlantic City Option is consummated on or before August 12, 2001, the amount of
borrowings available on the Revolving Credit Facility will be further reduced by
the net proceeds received by the Company.
Loans under the Revolving Credit Facility bear interest at (i) the higher of
(a) The Bank of Nova Scotia's base rate or (b) the Federal Funds rate, in either
case plus an additional 0.750% to 1.625% based on a debt to earnings ratio
during the period, as defined (the "Debt Ratio") or (ii) The Bank of Nova
Scotia's reserve-adjusted LIBOR rate plus 1.50% to 2.25% based on the Debt
Ratio. After each drawdown on the Revolving Credit Facility, interest is due
every three months for the first six months and is due monthly thereafter. At
December 31, 2000, the weighted average interest rate on amounts outstanding
under the Revolving Credit Facility was 8.20%. Loans under the Revolving Credit
Facility may be prepaid and reborrowed at any time and are due in full on
August 12, 2002. Commitment fees are calculated at per annum rates ranging from
0.375% to 0.500%, based on the Debt Ratio, applied to the undrawn amount of the
Revolving Credit Facility and are due quarterly.
F-18
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 8. LONG TERM DEBT (CONTINUED)
The Revolving Credit Facility contains restrictive covenants that include:
(a) restrictions on the payment of dividends, (b) minimum levels of earnings
before interest expense, income taxes, depreciation and amortization ("EBITDA")
and (c) a minimum relationship between EBITDA and interest expense and debt.
OVERDRAFT LOAN FACILITY
Pursuant to a letter of commitment dated September 30, 1994, as amended,
between the Company and The Bank of Nova Scotia, the Company has a revolving
overdraft loan facility (the "Overdraft Facility") in the amount of Bahamian
$5.0 million which was equal to US $5.0 million as of December 31, 1999 and
2000. The Overdraft Facility bears interest at The Bank of Nova Scotia's base
rate for Bahamian dollar loans plus 1.5% with repayment subject to annual
review. The Overdraft Facility is secured by substantially all of the Company's
Bahamian assets and ranks PARI PASSU with the Revolving Credit Facility. At
December 31, 1999 and 2000, no amounts were outstanding under the Overdraft
Facility.
PRINCIPAL PAYMENTS
Minimum principal payments of long-term debt outstanding as of December 31,
2000 for each of the next five years and thereafter are as follows:
2001--$230,000; 2002--$369,237,000; 2003--$141,000; 2004--$116,000;
2005--$77,000; thereafter--$300,000,000.
NOTE 9. SHAREHOLDERS' EQUITY
The Company's authorized, issued and outstanding shares were as follows:
DECEMBER 31,
------------------- JUNE 30,
1999 2000 2001
(IN THOUSANDS, EXCEPT PER SHARE DATA) -------- -------- -----------
(UNAUDITED)
Ordinary Shares
Par value per share................................ $ 0.001 $ 0.001 $ 0.001
Authorized......................................... 250,000 250,000 250,000
Issued and outstanding (1)......................... 33,682 33,874 33,992
Preference Shares
Par value per share................................ $ 0.001 $ 0.001 $ 0.001
Authorized......................................... 100,000 100,000 100,000
Issued and outstanding............................. -- -- --
------------------------
(1) Includes 1,000,000, 7,087,000 and 7,087,000 Ordinary Shares held by the
Company at December 31, 1999 and 2000 and June 30, 2001, respectively.
F-19
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 10. STOCK-BASED COMPENSATION
STOCK OPTIONS
In May 1995, the shareholders of the Company approved a stock option plan
(the "1995 Plan") that provided for the issuance of options to acquire up to
2,000,000 Ordinary Shares and in May 1997 the shareholders approved a stock
option plan (the "1997 Plan") that provided for the issuance of options to
acquire up to 1,000,000 Ordinary Shares which was further increased to 2,500,000
Ordinary Shares in May 1998. In August 2000, the shareholders of the Company
approved a stock option plan (the "2000 Plan" and together with the "1995 Plan"
and the "1997 Plan", collectively the "Plans") that provides for the issuance of
options to acquire up to 3,000,000 Ordinary Shares. Pursuant to the Plans, the
option prices are equal to the market value per share of the Ordinary Shares on
the date of the grant. The 1995 Plan provided for the options to become
exercisable, unless otherwise specified by the Board of Directors and subject to
certain acceleration and termination provisions, after two years from the date
of grant in respect of 20% of such options, and thereafter in installments of
20% per year over a four-year period. The 1997 Plan provides for the same
vesting schedule except that the vesting period begins one year after the grant
date. The 2000 Plan provides for the vesting period to begin one year after the
grant date in respect of one third of such options, and thereafter in
installments of one third per year over a two year period. Options granted under
the Plans have a term of 10 years from the date of grant.
The Plans provide for options with respect to Ordinary Shares to be granted
to directors, officers and employees of SIHL and its subsidiaries.
A summary of the Company's stock option activity for 1998, 1999 and 2000 is
as follows:
DECEMBER 31,
------------------------------------------------------------------
1998 1999 2000
-------------------- -------------------- --------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
PRICE PRICE PRICE
SHARES PER SHARE SHARES PER SHARE SHARES PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE DATA) -------- --------- -------- --------- -------- ---------
Outstanding at beginning of year.......... 2,795 $26.32 3,017 $31.38 3,918 $29.60
Granted................................... 701 41.50 1,140 25.10 2,660 18.05
Exercised................................. (393) 14.45 (112) 23.56 (192) 15.82
Terminated and other...................... (86) 36.45 (127) 37.69 (369) 35.55
----- ----- -----
Outstanding at end of year................ 3,017 31.38 3,918 29.60 6,017 24.59
===== ===== =====
Exercisable at end of year................ 360 1,014 3,459
===== ===== =====
Available for grant....................... 125 -- 340
===== ===== =====
Certain of the options granted during 1999 were granted outside of the
Plans.
F-20
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 10. STOCK-BASED COMPENSATION (CONTINUED)
For purposes of supplemental disclosures required by SFAS 123, the fair
value of options granted during 1998, 1999 and 2000 was estimated as of the
respective dates of grant using a Black-Scholes option pricing model with the
following weighted average assumptions for the periods presented:
FOR THE YEAR ENDED DECEMBER 31,
-------------------------------
1998 1999 2000
-------- -------- ---------
Risk-free interest rates............................... 4.9% 5.5% 6.0%
Volatility factors of the expected market price of
Ordinary Shares...................................... 38.0% 39.0% 43.0%
Expected life of options in years...................... 6-7 6-7 6-7
Expected dividend yields............................... -- -- --
Weighted average grant date fair value................. $ 12.71 $ 7.67 $ 5.04
Pro forma results based on these assumptions were as
follows:
Net income (loss) (000's)............................ $50,943 $62,001 $(126,411)
Diluted earnings (loss) per share.................... $ 1.50 $ 1.82 $ (4.10)
EXECUTIVE BONUS PLAN
In 1998, the Company created a bonus plan for certain of its executives that
was payable based upon the attainment of specified earnings per share. A portion
of the bonus was payable in Ordinary Shares that vest over a three-year period.
The compensation expense relating to the bonus plan amounted to $3.1 million,
$458,000 and $832,000 for the years ended December 31, 1998, 1999 and 2000,
respectively. For the first half of 2000, compensation expense related to the
1998 bonus plan was $656,000. In 2001, the Company adopted a new bonus plan
which allows for bonuses to be paid to executives and other employees of the
Company upon the attainment of certain levels of earnings per share or EBITDA.
Compensation expense in the first half of 2001 relating to the new bonus plan
amounted to $1.4 million.
NOTE 11. RELATED PARTY TRANSACTIONS
In the normal course of business, the Company undertakes transactions with a
number of unconsolidated affiliated companies. Certain of the Company's
subsidiaries provide construction funding, project consulting and management
services to such affiliates. Due from affiliates consisted of the following:
DECEMBER 31,
------------------- JUNE 30,
1999 2000 2001
(IN THOUSANDS OF US DOLLARS) -------- -------- -----------
(UNAUDITED)
Harborside at Atlantis............................... $ -- $ 20,307 $ 26,103
Trading Cove Associates.............................. 8,301 12,588 8,494
Sun Indian Ocean..................................... 5,251 5,751 2,777
Other................................................ 660 563 783
-------- -------- --------
14,212 39,209 38,157
Less: amounts due within one year.................... (14,212) (34,140) (25,846)
-------- -------- --------
$ -- $ 5,069 $ 12,311
======== ======== ========
F-21
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 11. RELATED PARTY TRANSACTIONS (CONTINUED)
The amounts due from Harborside at Atlantis represent advances made by the
Company, including accrued interest thereon, to fund its 50% of the cost to
construct the timeshare units on Paradise Island in The Bahamas. The Company
earns interest on these advances at a rate equal to one-month LIBOR plus .250%.
Such rate was 7.05% at December 31, 2000. Of the amount advanced to Harborside
at Atlantis, it is anticipated that all but $5.1 million will be repaid within
one year.
NOTE 12. RETIREMENT PLANS
Certain of the Company's subsidiaries participate in a defined contribution
plan covering substantially all of their full-time employees. The Company makes
contributions to this plan based on a percentage of eligible employee
contributions. Total expense for this plan was $895,000, $876,000 and $887,000
for the years ended December 31, 1998, 1999 and 2000, respectively, and $477,000
and $132,000 for the halves ended June 30, 2000 and 2001, respectively.
In addition to the plan described above, union and certain other employees
of the Company's subsidiaries in The Bahamas and Atlantic City are covered by
multi-employer defined benefit pension plans to which employers make
contributions. In connection with these plans, the Company paid $4.8 million,
$6.4 million and $7.4 million for the years ended December 31, 1998, 1999 and
2000, respectively, and paid $3.5 million and $2.9 million for the halves ended
June 30, 2000 and 2001, respectively.
NOTE 13. INCOME TAXES
A significant portion of the Company's operations are located in The Bahamas
where there are no income taxes. In 1998, 1999 and 2000, the income tax
provision relating to its US operations was as follows:
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------
1998 1999 2000
(IN THOUSANDS OF US DOLLARS) -------- -------- --------
Current:
Federal............................................... $11,477 $9,197 $ 4,930
State................................................. 279 157 1,178
------- ------ -------
11,756 9,354 6,108
Deferred:
Federal............................................... (3,747) (30) 205
------- ------ -------
$ 8,009 $9,324 $ 6,313
======= ====== =======
F-22
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 13. INCOME TAXES (CONTINUED)
The effective tax rate on income varies from the statutory US federal tax
rate as a result of the following factors.
FOR THE YEAR ENDED DECEMBER 31,
------------------------------------
1998 1999 2000
-------- -------- --------
Statutory US federal income tax rate.................. 35.0 % 35.0 % (35.0)%
Non US-source income.................................. (27.1) (40.3) (40.7)
NOLs and temporary differences for which a valuation
allowance has been provided......................... -- 8.7 76.7
Reduction of valuation allowance relating to prior
years'
operating loss utilized............................. (5.7) -- --
Branch profit taxes and other taxes on US services.... 4.4 6.3 1.7
Other................................................. 5.6 2.1 2.9
------ ------ ------
Effective tax rate.................................... 12.2 % 11.8 % 5.6 %
====== ====== ======
The components of the deferred tax assets and liabilities were as follows:
DECEMBER 31,
-------------------
1999 2000
(IN THOUSANDS OF US DOLLARS) -------- --------
Deferred tax liabilities:
Basis differences on land held for investment, development
or resale............................................... $ (6,100) $ (2,300)
Basis differences on property and equipment............... (44,400) --
Other..................................................... (2,402) --
-------- --------
Total deferred tax liabilities.......................... (52,902) (2,300)
-------- --------
Deferred tax assets:
Net operating loss carryforwards.......................... 196,700 202,000
Assets held for sale...................................... -- 26,700
Basis differences on property and equipment............... -- 2,100
Book reserves not yet deductible for tax return
purposes................................................ 14,000 800
Tax credit carryforwards.................................. 2,700 2,700
Other..................................................... 5,700 4,000
-------- --------
Total deferred tax assets............................... 219,100 238,300
Valuation allowance for deferred tax assets............... (208,421) (236,000)
-------- --------
Deferred tax assets, net of valuation allowance........... 10,679 2,300
-------- --------
Net deferred tax liabilities................................ $(42,223) $ --
======== ========
A valuation allowance has been recorded against the portion of deferred tax
assets that the Company believes will more likely than not remain unrealized.
Such deferred tax assets primarily relate to the net operating loss
carryforwards related to SINA at December 16, 1996, the effective date of its
merger transaction with SIHL. If such deferred tax assets were to be realized in
the future the corresponding reduction to the valuation allowance would reduce
income tax expense.
F-23
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 13. INCOME TAXES (CONTINUED)
For federal income tax purposes, SINA had net operating loss carryforwards
of approximately $577.0 million at December 31, 2000 of which $166.0 million are
unrestricted as to use. However, due to the merger transaction in
December 1996, $411.0 million of these net operating loss carryforwards (the
"Pre-Change NOLs") are limited in their availability to offset future taxable
income of the Company. As a result of these limitations, approximately
$11.3 million of Pre-Change NOLs will become available for use each year through
the year 2008; and approximately $8.4 million will be available in 2009. An
additional $13.0 million of these Pre-Change NOLs would be available to offset
gains on sales of assets owned at the date of the merger that are sold within
five years of that date. The remaining Pre-Change NOLs are expected to expire
unutilized.
The Company's restricted NOL carryforwards expire as follows: $49.0 million
in 2005, $23.0 million in 2006, $18.0 million in 2007, $1.0 million in 2009 and
$8.0 million in 2011. The Company's unrestricted NOLs expire as follows:
$6.0 million in 2005, $7.0 million in 2007, $57.0 million in 2008,
$57.0 million in 2012, $33.0 million in 2019 and $6.0 million in 2020.
NOTE 14. SUPPLEMENTAL CASH FLOW DISCLOSURES
Interest paid in 1998, 1999 and 2000, net of amounts capitalized, amounted
to $3.4 million, $48.7 million and $42.5 million, respectively. Interest paid,
net of amounts capitalized, for the six months ended June 30, 2000 and 2001
amounted to $24.9 million and $21.9 million, respectively. Income taxes paid in
1998, 1999 and 2000 amounted to $7.0 million, $6.7 million and $5.0 million,
respectively. Income taxes paid in the six months ended June 30, 2001 and 2000
amounted to $3.2 million and $2.9 million, respectively.
Non-cash investing and financing activities in 1998, 1999 and 2000 included
the following:
DECEMBER 31, JUNE 30,
------------------------------ -------------------
1998 1999 2000 2000 2001
(IN THOUSANDS OF US DOLLARS) -------- -------- -------- -------- --------
(UNAUDITED)
Property and equipment acquired under
capital lease obligations................. $5,098 $ 938 $1,574 $1,417 $ 16
Refinancing of capital lease obligation..... $ -- $1,144 $ -- $ -- $ --
NOTE 15. COMMITMENTS AND CONTINGENCIES
CASINO LICENSE
The operations of casinos in both The Bahamas and Atlantic City are subject
to regulatory controls. A casino license must be obtained in each jurisdiction
by the operator and the license must be periodically renewed and is subject to
revocation at any time. In the event that the Company is not able to maintain
its licenses, management believes that the Company would still realize the
carrying value of its related assets.
HEADS OF AGREEMENT
The Company has an agreement with the Bahamian Government, as amended in
1997, that provides for certain investment incentives to encourage the Company
to undertake an expansion
F-24
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 15. COMMITMENTS AND CONTINGENCIES (CONTINUED)
program at Atlantis. This agreement provides for certain fixed gaming taxes as
well as a 10% gaming tax to be paid on gaming win over $20 million. The
agreement also provides for a 50% credit against all variable gaming tax paid
for a period of 11 years. The tax structure became effective January 1, 1998.
In order to secure the tax incentives, the Company was obligated to begin
construction of at least 562 rooms on Paradise Island in place of the Pirate's
Cove Beach Resort (a 562-room hotel on Paradise Island) which the Company
demolished during the fourth quarter of 1998. The Company had plans for an
additional 700-room Phase III hotel project at Atlantis which would have
satisfied this condition. However, considering its available development
resources and alternative uses of capital, the Company has postponed this
project. As a result, in June 2000, the Company was notified by the Bahamian
Government that these additional incentives would not be currently realized.
Effective July 1, 2000, the casino win tax reverted back to the previous
structure, as follows. There is no change in win tax on gaming win up to
$20 million, however, the Company incurs 12.5% win tax on gaming win between
$20 million and $120 million, and 10% win tax on gaming win in excess of
$120 million. The $5 million annual reduction of fees still applies, however, in
lieu of the 50% credit on win tax to be paid on gaming win over $20 million, the
Company receives a 45% credit on win tax to be paid on gaming win between
$20 million and $120 million. Under its agreement with the Bahamian Government,
the additional tax incentives will be prospectively reinstated in the event the
Company begins construction of these additional rooms.
The agreement also provides for a five-year joint marketing agreement,
pursuant to which the Bahamian Government shall match the Company's
contribution, up to $4.0 million annually, toward the direct costs related to
staging certain marketing events, public relations activities and the production
and placement of advertisements in all media.
CONTROL OF SIHL
SIIL has agreed to control a majority of the SIHL Board of Directors through
June 30, 2004.
LITIGATION, CLAIMS AND ASSESSMENTS
The Company is a defendant in certain litigation and is aware of certain
claims and assessments incurred in the normal course of business. In the opinion
of management, based on the advice of counsel, the aggregate liability, if any,
arising from such matters will not have a material adverse effect on the
accompanying consolidated financial statements.
F-25
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 16. SEGMENT INFORMATION
Statement of Financial Accounting Standards No.131 "Disclosures about
Segments of an Enterprise and Related Information" requires the disclosure of
information regarding the operations of the Company based upon how management
makes operating decisions and assesses performance of such segments. The Company
operates in five geographical segments in one industry, the development,
operation and management of premier resort and casino properties. The Company
evaluates the performance of its segments based primarily on operating profit
before corporate expenses, interest expense, interest income, income taxes and
non-recurring items. The following is an analysis of net revenues, contribution
to consolidated income (loss) before provision for income taxes and total
assets, depreciation and amortization of goodwill and capital additions by
geographical location:
NET REVENUES
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------
1998 1999 2000
(IN THOUSANDS OF US DOLLARS) --------- --------- ---------
Casino/hotel:
Atlantic City, New Jersey
Gaming.................................................... $234,736 $221,015 $235,827
Rooms..................................................... 16,148 15,160 16,412
Food and beverage......................................... 26,692 25,512 26,039
Other..................................................... 11,460 8,075 4,973
Less: promotional allowances.............................. (28,295) (26,632) (25,288)
-------- -------- --------
260,741 243,130 257,963
-------- -------- --------
Paradise Island, The Bahamas:
Gaming.................................................... 84,606 130,529 132,108
Rooms..................................................... 78,794 149,671 177,596
Food and beverage......................................... 59,901 111,588 121,679
Other (a)................................................. 34,157 58,732 66,280
Insurance recovery........................................ -- 14,209 --
Less: promotional allowances.............................. (12,497) (23,608) (26,491)
-------- -------- --------
244,961 441,121 471,172
-------- -------- --------
Total casino/hotel.......................................... 505,702 684,251 729,135
Real estate related -- Ocean Club Estates................... -- -- 108,650
Management and other fees:
Connecticut............................................... 34,613 39,282 23,575
Indian Ocean.............................................. 6,032 6,477 7,539
Dubai..................................................... -- 538 1,221
Harborside at Atlantis (b)................................ -- -- 3,428
Other segments.............................................. 4,531 8,419 11,147
-------- -------- --------
Net revenues................................................ $550,878 $738,967 $884,695
======== ======== ========
F-26
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 16. SEGMENT INFORMATION (CONTINUED)
CONTRIBUTION TO CONSOLIDATED INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES
FOR THE YEAR ENDED DECEMBER 31,
-------------------------------
1998 1999 2000
(IN THOUSANDS OF US DOLLARS) -------- -------- ---------
Casino/hotel:
Atlantic City, New Jersey................................. $ 19,915 $ (253) $ 7,593
Paradise Island, The Bahamas(a)........................... 42,132 93,609 85,666
-------- -------- ---------
62,047 93,356 93,259
-------- -------- ---------
Real estate related-Ocean Club Estates...................... -- -- 76,378
Management and other fees, net of amortization
Connecticut............................................... 33,376 38,802 23,096
Indian Ocean.............................................. 6,032 6,477 7,539
Dubai..................................................... -- 538 1,221
Harborside at Atlantis.................................... -- -- 3,428
General corporate........................................... (19,505) (16,899) (23,330)
Pre-opening expenses........................................ (25,961) (5,398) (7,616)
Purchase termination costs.................................. -- -- (11,202)
Transaction costs........................................... -- -- (7,014)
Write-down of net assets held for sale...................... -- -- (229,208)
Other segments.............................................. 621 2,348 1,694
Corporate marketing, retail and public relations............ (4,404) (4,792) (3,089)
-------- -------- ---------
Income (loss) from operations............................. 52,206 114,432 (74,844)
-------- -------- ---------
Other income (expense):
Interest income........................................... 15,651 12,725 4,194
Interest expense, net of capitalization................... (4,516) (50,699) (45,678)
Equity in earnings of associated companies:
Indian Ocean.............................................. 2,730 2,628 3,445
Harborside at Atlantis (b)................................ -- -- 780
Other, net.................................................. (316) 60 (688)
-------- -------- ---------
Income (loss) before provision for income taxes........... $ 65,755 $ 79,146 $(112,791)
======== ======== =========
F-27
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 16. SEGMENT INFORMATION (CONTINUED)
TOTAL ASSETS, DEPRECIATION AND AMORTIZATION OF GOODWILL AND CAPITAL ADDITIONS
YEAR ENDED
DECEMBER 31, 2000
------------------------
AS OF DEPRECIATION
DECEMBER 31, 2000 AND
----------------- AMORTIZATION CAPITAL
TOTAL ASSETS OF GOODWILL ADDITIONS
(IN THOUSANDS OF US DOLLARS) ----------------- ------------ ---------
Casino/hotel:
Atlantic City, New Jersey............................ $ -- $16,236 $ 11,316
Paradise Island, The Bahamas(c)...................... 1,162,060 42,422 137,987
---------- ------- --------
1,162,060 58,658 149,303
---------- ------- --------
Real estate related:
Atlantic City, New Jersey............................ 56,176 -- --
Paradise Island, The Bahamas......................... 17,538 -- --
---------- ------- --------
73,714 -- --
---------- ------- --------
Net assets held for sale(d)............................ 138,350 -- --
Equity investment in Indian Ocean...................... 25,467 -- --
General Corporate...................................... 58,632 1,257 6,589
Corporate marketing and public relations............... 1,404 304 --
Other segments......................................... 1,164 4 --
---------- ------- --------
$1,460,791 $60,223 $155,892
========== ======= ========
YEAR ENDED
DECEMBER 31, 1999
------------------------
AS OF DEPRECIATION
DECEMBER 31, 1999 AND
----------------- AMORTIZATION CAPITAL
TOTAL ASSETS OF GOODWILL ADDITIONS
(IN THOUSANDS OF US DOLLARS) ----------------- ------------ ---------
Casino/hotel:
Atlantic City, New Jersey............................ $ 429,854 $16,156 $ 42,574
Paradise Island, The Bahamas......................... 1,054,708 39,631 24,200
Paradise Island Expansion, opened December 1998(e)... -- -- 117,808
---------- ------- --------
1,484,562 55,787 184,582
---------- ------- --------
Real estate related:
Atlantic City, New Jersey............................ 61,307 -- 9,433
Paradise Island, The Bahamas......................... 30,022 -- 4
---------- ------- --------
91,329 -- 9,437
---------- ------- --------
Equity investment in Indian Ocean...................... 24,871 -- --
General Corporate...................................... 68,222 1,120 10,828
Corporate marketing, retail and public relations....... 1,729 321 199
Other segments......................................... 758 2 --
---------- ------- --------
$1,671,471 $57,230 $205,046
========== ======= ========
F-28
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 16. SEGMENT INFORMATION (CONTINUED)
TOTAL ASSETS, DEPRECIATION AND AMORTIZATION OF GOODWILL AND CAPITAL ADDITIONS,
CONTINUED
YEAR ENDED
DECEMBER 31, 1998
AS OF ----------------------------
DECEMBER 31, 1998 DEPRECIATION AND
----------------- AMORTIZATION CAPITAL
TOTAL ASSETS OF GOODWILL ADDITIONS
(IN THOUSANDS OF US DOLLARS) ----------------- ---------------- ---------
Casino/hotel:
Atlantic City, New Jersey......................... $ 407,060 $14,155 $ 16,572
Paradise Island, The Bahamas...................... 981,014 15,993 13,569
Paradise Island Expansion, opened December
1998(e)......................................... -- -- 381,321
---------- ------- --------
1,388,074 30,148 411,462
---------- ------- --------
Real estate related:
Atlantic City, New Jersey......................... 56,839 -- 11,727
Paradise Island, The Bahamas...................... 31,726 -- 18,371
---------- ------- --------
88,565 -- 30,098
---------- ------- --------
Equity investment in Indian Ocean................... 26,894 -- --
General Corporate................................... 119,614 1,835 553
Corporate marketing, retail and public relations.... 1,891 97 1,870
Other segments...................................... 695 1 13
---------- ------- --------
$1,625,733 $32,081 $443,996
========== ======= ========
------------------------
(a) Includes tour operations.
(b) The construction of timeshare units at Harborside at Atlantis was completed
in February 2001. Sales of these units began in May 2000.
(c) In 2000, capital additions in Paradise Island, The Bahamas included $113.8
million of costs for the Ocean Club addition and newly renovated golf
course, including a new club house.
(d) See discussion of Resorts Atlantic City Sale in Note 1 of Notes to
Consolidated Financial Statements.
(e) Capital additions related to the Paradise Island Expansion are included in
total assets under Paradise Island, The Bahamas.
F-29
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 17. EQUITY IN EARNINGS OF ASSOCIATED COMPANIES
The accompanying consolidated financial statements include equity in
earnings of associated companies as a result of the Company's interest in a
company that owns and operates beach resort hotels in the Indian Ocean ("Sun
Indian Ocean") and the Company's 50% interest in Harborside at Atlantis. Through
June 16, 2000, the Company owned a 22.8% interest in Sun Indian Ocean. Effective
June 16, 2000, Sun Indian Ocean issued additional shares of stock under a rights
issue in which the Company did not participate, effectively reducing the
Company's ownership interest to 20.4%.
The following summarized financial information of Sun Indian Ocean has been
prepared under United States generally accepted accounting principles at and for
the years ended December 31, 2000, 1999 and 1998; converted to thousands of US
dollars at the appropriate exchange rate.
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------
1998 1999 2000
(IN THOUSANDS OF US DOLLARS) --------- --------- ---------
Revenues........................................ $88,773 $84,007 $106,151
Income from operations.......................... 17,172 15,630 28,310
Income before income taxes...................... 14,237 13,171 20,480
AS OF DECEMBER 31,
------------------------------
1998 1999 2000
-------- -------- --------
Current assets................................ $ 23,123 $ 21,075 $ 24,424
Total assets.................................. 152,594 264,345 238,286
Current liabilities........................... 31,714 61,595 35,173
Shareholders' equity.......................... 83,394 140,865 127,379
Harborside at Atlantis constructs, sells and manages time share units in
Paradise Island, The Bahamas. Construction of the first phase, consisting of 82
units, began in 2000 and was completed in February 2001. Sales of time share
units began in May 2000. The following unaudited summarized financial
information of Harborside at Atlantis has been prepared under United States
generally accepting accounting principles at and for the year ended
December 31, 2000.
FOR THE YEAR
ENDED
DECEMBER 31,
2000
(IN THOUSANDS OF US DOLLARS) ------------
Revenues.................................................... $18,446
Income from operations...................................... 1,561
Income before income taxes.................................. 1,561
AS OF
DECEMBER 31,
2000
------------
Current assets.............................................. $27,306
Total assets................................................ 79,175
Current liabilities......................................... 57,830
Shareholders' equity........................................ 17,305
F-30
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 18. DERIVATIVE FINANCIAL INSTRUMENTS
The Company is exposed to market risks arising from changes in interest
rates. Due to current governmental policies in The Bahamas which equate one
Bahamian dollar to one United States dollar and to its limited foreign
operations in other jurisdictions, the Company does not have material market
risk exposures relative to changes in foreign exchange rates.
CREDIT EXPOSURE
The Company is exposed to credit related losses in the event of
non-performance by counterparties to certain interest rate swaps. The Company
monitors the credit worthiness of the counterparties and presently does not
expect default by any of the counterparties. The Company does not obtain
collateral in connection with its derivative financial instruments.
The credit exposure that results from interest rate swaps is represented by
the fair value of contracts with a positive fair value as of the reporting date.
See Note 19, Fair Value of Financial Instruments, for the fair value of
derivatives. The Company had no credit exposure on its interest rate swaps at
December 31, 2000.
INTEREST RATE RISK MANAGEMENT
The Company uses interest rate swap agreements to manage the impact of
interest rate changes on the Company's Revolving Credit Facility. The amounts
exchanged by the counterparties to interest rate swap agreements normally are
based upon the notional amounts and other terms, generally related to interest
rates, of the derivatives. While notional amounts of interest rate swaps form
part of the basis for the amounts exchanged by the counterparties, the notional
amounts are not themselves exchanged, and therefore do not represent a measure
of the Company's exposure as an end user of derivative financial instruments. At
both December 31, 1999 and 2000, notional principal amounts related to interest
rate swaps (variable to fixed rate) were $125.0 million. The swap portfolio
maturities at December 31, 2000 are as follows: December 31,
2001--$50.0 million and January 2, 2002--$75.0 million. As of December 31, 2000,
the weighted average fixed rate payment on the variable to fixed rate swaps was
6.89%. Variable rates received are indexed to LIBOR rate.
NOTE 19. FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of a financial instrument represents the amount at which the
instrument could be exchanged in a current transaction between willing parties,
other than in a forced sale or liquidation.
Fair value estimates are made at a specific point in time, based on relevant
market information about the financial instrument. These estimates are
subjective in nature and involve uncertainties and matters of significant
judgment and therefore cannot be determined with precision. The assumptions used
have a significant effect on the estimated amounts reported.
The following methods and assumptions were used by the Company in estimating
fair value disclosures for financial instruments: (a) Cash and cash equivalents,
receivables, other current assets, accounts payable, accrued liabilities and
variable rate debt: The amounts reported in the accompanying consolidated
balance sheets approximate fair value; (b) Fixed-rate debt: Fixed rate debt is
valued based upon published market quotations, as applicable. The carrying
amount of remaining fixed-rate debt approximates fair value; (c) Interest rate
swaps: The fair value of interest rate swaps was determined
F-31
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
NOTE 19. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
from the representations of financial institutions. The carrying value and
negative fair value of the Company's interest rate swaps was $0 and $644,000 at
December 31, 1999, respectively, and $0 and $454,000 at December 31, 2000,
respectively.
NOTE 20. SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION
The payment obligations of SIHL and SINA under the $200 million 8 7/8%
Senior Subordinated Notes due 2011 (the "Notes") which closed on August 14, 2001
are guaranteed by substantially all of SIHL's wholly-owned subsidiaries (the
"Subsidiary Guarantors"). The Notes are jointly and severally irrevocably and
unconditionally guaranteed. Separate financial statements of the Subsidiary
Guarantors are not presented because our management has determined that they
would not be material to investors. The following supplemental financial
information sets forth balance sheets, statements of operations and statements
of cash flows for each of the co-issuers, SIHL and SINA and, on a combined
basis, for the Subsidiary Guarantors. SIHL's non-guarantor subsidiaries are
minor and, therefore, are not separately presented.
F-32
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
CONDENSED CONSOLIDATING BALANCE SHEET AT DECEMBER 31, 1999
GUARANTOR
SIHL SINA SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- -------- ------------ ------------ ------------
ASSETS
Current assets:
Cash and cash equivalents.......... $ 154 $ 6,439 $ 32,636 $ -- $ 39,229
Restricted cash equivalents........ -- 1 980 -- 981
Trade receivables, net............. 100 1,234 43,091 -- 44,425
Due from affiliates................ 478,507 17,252 (476,247) (5,300) 14,212
Inventories........................ -- -- 13,742 -- 13,742
Prepaid expenses................... 550 55 7,807 -- 8,412
-------- -------- ---------- ----------- ----------
Total current assets............. 479,311 24,981 (377,991) (5,300) 121,001
Property and equipment, net.......... -- 88,688 1,265,413 24,037 1,378,138
Due from affiliates--non-current..... -- 199,262 0 (199,262) --
Deferred charges and other assets,
net.................................. 2,424 16,588 30,872 -- 49,884
Investment in subsidiaries........... 349,447 511,712 804,318 (1,665,477) --
Investment in associated companies... -- -- 33,565 (4,972) 28,593
Goodwill, net........................ -- -- 97,732 (3,877) 93,855
-------- -------- ---------- ----------- ----------
Total assets..................... $831,182 $841,231 $1,853,909 $(1,854,851) $1,671,471
======== ======== ========== =========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term
debt............................. $ -- $ -- $ 1,100 $ -- $ 1,100
Accounts payable and accrued
liabilities...................... 6,147 10,675 117,670 (1,158) 133,334
Due to affiliates.................. -- -- 22,250 (5,300) 16,950
Capital creditors.................. -- -- -- -- --
-------- -------- ---------- ----------- ----------
Total current liabilities........ 6,147 10,675 141,020 (6,458) 151,384
Long-term debt, net of current
maturities....................... 100,000 199,262 278,771 -- 578,033
Due to affiliates--non-current....... -- -- 199,262 (199,262) --
Deferred income taxes................ -- 6,610 35,457 156 42,223
-------- -------- ---------- ----------- ----------
Total liabilities................ 106,147 216,547 654,510 (205,564) 771,640
-------- -------- ---------- ----------- ----------
Shareholders' equity............... 725,035 624,684 1,199,399 (1,649,287) 899,831
-------- -------- ---------- ----------- ----------
Total liabilities and
shareholders' equity........... $831,182 $841,231 $1,853,909 $(1,854,851) $1,671,471
======== ======== ========== =========== ==========
F-33
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
CONDENSED CONSOLIDATING BALANCE SHEET AT DECEMBER 31, 2000
GUARANTOR
SIHL SINA SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- --------- ------------ ------------ ------------
ASSETS
Current assets:
Cash and cash equivalents......... $ 106 $ (725) $ 16,690 $ 6,426 $ 22,497
Restricted cash equivalents....... -- -- 1,651 -- 1,651
Trade receivables, net............ 90 631 39,831 60 40,612
Due from affiliates............... 456,471 (160,760) (255,995) (5,576) 34,140
Inventories....................... -- 71 10,346 -- 10,417
Prepaid expenses.................. 261 155 9,433 -- 9,849
Net assets held for sale.......... -- (5,889) 144,395 (156) 138,350
-------- --------- ---------- ----------- ----------
Total current assets............ 456,928 (166,517) (33,649) 754 257,516
Property and equipment, net....... -- 58,720 1,072,881 23,908 1,155,509
Due from
affiliates--non-current......... -- 199,337 5,069 (199,337) 5,069
Deferred charges and other assets,
net............................. 2,239 24 10,857 -- 13,120
Investment in subsidiaries........ 350,947 511,712 804,317 (1,666,976) --
Investment in associated
companies....................... -- -- 33,952 (4,375) 29,577
-------- --------- ---------- ----------- ----------
Total assets.................... $810,114 $ 603,276 $1,893,427 $(1,846,026) $1,460,791
======== ========= ========== =========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term
debt............................ $ -- $ 58 $ 172 $ -- $ 230
Accounts payable and accrued
liabilities..................... 7,610 12,985 110,068 6,209 136,872
Due to affiliates................. -- -- 18,254 (5,300) 12,954
Capital creditors................. -- -- 1,285 (1,285) --
-------- --------- ---------- ----------- ----------
Total current liabilities....... 7,610 13,043 129,779 (376) 150,056
Long-term debt, net of current
maturities........................ 225,000 199,420 244,488 -- 668,908
Due to affiliates--non-current...... -- -- 199,337 (199,337) --
-------- --------- ---------- ----------- ----------
Total liabilities............... 232,610 212,463 573,604 (199,713) 818,964
-------- --------- ---------- ----------- ----------
Shareholder's equity................ 577,504 390,813 1,319,823 (1,646,313) 641,827
-------- --------- ---------- ----------- ----------
Total liabilities and
shareholders' equity.......... $810,114 $ 603,276 $1,893,427 $(1,846,026) $1,460,791
======== ========= ========== =========== ==========
F-34
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
CONDENSED CONSOLIDATING BALANCE SHEET AT JUNE 30, 2001
GUARANTOR
SIHL SINA SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- -------- ------------ ------------ ------------
ASSETS
Current assets:
Cash and cash equivalents................. $ 2,044 $ 6,638 $ 18,167 $ 7,250 $ 34,099
Restricted cash equivalents............... -- -- 8,389 -- 8,389
Trade receivables, net.................... 781 1,023 42,484 59 44,347
Due from affiliates....................... 325,268 49,711 (349,073) (60) 25,846
Inventories............................... -- 107 11,167 -- 11,274
Prepaid expenses.......................... 148 337 12,060 -- 12,545
-------- -------- ---------- --------- ----------
Total current assets.................... 328,241 57,816 (256,806) 7,249 136,500
Property and equipment, net............... -- 58,878 1,070,650 23,911 1,153,439
Note receivable........................... -- 17,500 -- -- 17,500
Due from affiliates--non-current.......... -- -- 12,311 -- 12,311
Deferred charges and other assets, net.... 2,295 4,393 5,144 -- 11,832
Investment in subsidiaries................ 353,547 7,953 279,904 (641,404) --
Investment in associated companies........ -- -- 35,322 (4,673) 30,649
-------- -------- ---------- --------- ----------
Total assets............................ $684,083 $146,540 $1,146,525 $(614,917) $1,362,231
======== ======== ========== ========= ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt...... $ -- $ 67 $ 181 $ -- $ 248
Accounts payable and accrued
liabilities............................. 5,192 10,957 116,192 5,651 137,992
Due to affiliates......................... -- -- 1,183 -- 1,183
Capital creditors......................... -- -- 2,939 -- 2,939
-------- -------- ---------- --------- ----------
Total current liabilities............... 5,192 11,024 120,495 5,651 142,362
Long-term debt, net of current maturities... 100,000 199,431 221,625 -- 521,056
-------- -------- ---------- --------- ----------
Total liabilities....................... 105,192 210,455 342,120 5,651 663,418
-------- -------- ---------- --------- ----------
Shareholder's equity........................ 578,891 (63,915) 804,405 (620,568) 698,813
-------- -------- ---------- --------- ----------
Total liabilities and shareholders'
equity................................ $684,083 $146,540 $1,146,525 $(614,917) $1,362,231
======== ======== ========== ========= ==========
F-35
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31,
1998
GUARANTOR
SIHL SINA SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- -------- ------------ ------------ ------------
Revenues:
Casino and resort revenues........... $ -- $ -- $538,722 $ (5,986) $532,736
Less: promotional allowances......... -- -- (40,792) -- (40,792)
-------- ------- -------- -------- --------
-- -- 497,930 (5,986) 491,944
Tour operations...................... -- -- 14,760 (3) 14,757
Management and other fees............ 20,036 -- 20,609 -- 40,645
Real estate related.................. -- 754 -- -- 754
Other................................ -- -- 2,778 -- 2,778
Affiliated Sales..................... -- 325 6,861 (7,186) --
-------- ------- -------- -------- --------
20,036 1,079 542,938 (13,175) 550,878
-------- ------- -------- -------- --------
Expenses:
Casino and resort expenses........... -- -- 353,682 (16,540) 337,142
Tour operations...................... -- -- 15,287 (634) 14,653
Selling, general and
administrative..................... -- -- 66,130 3,894 70,024
Management fee....................... 634 (12,410) 11,776 -- --
Corporate expenses................... 4,592 10,861 3,826 (468) 18,811
Depreciation and amortization........ 757 209 31,115 -- 32,081
Pre-opening expenses................. -- -- 25,331 630 25,961
-------- ------- -------- -------- --------
5,983 (1,340) 507,147 (13,118) 498,672
-------- ------- -------- -------- --------
Income (loss) from operations.......... 14,053 2,419 35,791 (57) 52,206
Other income and expenses:
Interest income...................... 10,074 895 4,682 -- 15,651
Affiliated interest income........... 8,783 18,062 679 (27,524) --
Affiliated interest expense.......... -- -- (27,524) 27,524 --
Interest expense, net of
capitalization..................... (8,783) (19,582) 4,949 18,900 (4,516)
Equity in earnings of associated
companies.......................... -- -- -- 2,730 2,730
Dividend income...................... -- -- 2,060 (2,060) --
Other, net........................... -- (1) (315) -- (316)
-------- ------- -------- -------- --------
Income before income taxes............. 24,127 1,793 20,322 19,513 65,755
Provision for income taxes............. (8,047) (2) 37 3 (8,009)
-------- ------- -------- -------- --------
Net income............................. $ 16,080 $ 1,791 $ 20,359 $ 19,516 $ 57,746
======== ======= ======== ======== ========
F-36
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31,
1999
GUARANTOR
SIHL SINA SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- -------- ------------ ------------ ------------
Revenues:
Casino and resort revenues............ $ -- $ -- $703,074 $(6,557) $696,517
Less: promotional allowances.......... -- -- (50,240) -- (50,240)
------- ------- -------- ------- --------
-- -- 652,834 (6,557) 646,277
Tour operations....................... -- -- 28,714 -- 28,714
Management and other fees............. 14,610 -- 32,288 -- 46,898
Insurance recovery.................... -- -- 14,209 -- 14,209
Other................................. -- -- 2,869 -- 2,869
Affiliated Sales...................... -- 325 8,665 (8,990) --
------- ------- -------- ------- --------
14,610 325 739,579 (15,547) 738,967
------- ------- -------- ------- --------
Expenses:
Casino and resort expenses............ -- -- 436,777 (12,908) 423,869
Tour operations....................... -- -- 27,816 -- 27,816
Selling, general and administrative... -- -- 95,942 (1,980) 93,962
Management fee........................ 634 (22,183) 21,549 -- --
Corporate expenses.................... 1,457 6,845 8,679 (721) 16,260
Depreciation and amortization......... -- 284 56,946 -- 57,230
Pre-opening expenses.................. -- -- 5,398 -- 5,398
------- ------- -------- ------- --------
2,091 (15,054) 653,107 (15,609) 624,535
------- ------- -------- ------- --------
Income from operations.................. 12,519 15,379 86,472 62 114,432
Other income and expenses:
Interest income....................... 9,930 408 2,387 -- 12,725
Affiliated interest income............ 8,798 (18,069) 36,532 (27,261) --
Affiliated interest expense........... -- -- (27,261) 27,261 --
Interest expense, net of
capitalization...................... (8,798) 18,069 (59,970) -- (50,699)
Equity in earnings of associated
companies........................... -- -- -- 2,628 2,628
Dividend income....................... 3,232 -- 2,651 (5,883) --
Other, net............................ -- 277 (217) -- 60
------- ------- -------- ------- --------
Income (loss) before income taxes....... 25,681 16,064 40,594 (3,193) 79,146
Provision for income taxes.............. (6,479) (50) (2,795) -- (9,324)
------- ------- -------- ------- --------
Net income (loss)....................... $19,202 $16,014 $ 37,799 $(3,193) $ 69,822
======= ======= ======== ======= ========
F-37
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31,
2000
GUARANTOR
SIHL SINA SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- --------- ------------ ------------ ------------
Revenues:
Casino and resort revenues.......... $ -- $ -- $762,496 $(6,630) $ 755,866
Less: promotional allowances........ -- -- (51,779) -- (51,779)
------- --------- -------- ------- ---------
--..... -- 710,717 (6,630) 704,087
Tour operations..................... -- -- 33,192 -- 33,192
Management and other fees........... 2,070 -- 33,693 -- 35,763
Real estate related................. -- -- 108,650 -- 108,650
Other............................... -- 38 2,965 -- 3,003
Affiliated Sales.................... -- 244 8,692 (8,936) --
------- --------- -------- ------- ---------
2,070 282 897,909 (15,566) 884,695
------- --------- -------- ------- ---------
Expenses:
Casino and resort expenses.......... -- -- 471,780 (18,207) 453,573
Tour operations..................... -- -- 29,637 (11) 29,626
Selling, general and
administrative.................... -- -- 100,396 3,069 103,465
Management fee...................... 634 (21,846) 21,212 -- --
Real estate related................. -- -- 32,272 -- 32,272
Corporate expenses.................. 1,684 11,694 12,379 (417) 25,340
Depreciation and amortization....... -- 258 59,965 -- 60,223
Write-off of Desert Inn costs....... -- 11,202 -- -- 11,202
Transactions costs.................. 7,014 -- -- -- 7,014
Pre-opening expenses................ -- -- 7,616 -- 7,616
Write down of assets to be sold..... 233,085 -- (3,877) 229,208
------- --------- -------- ------- ---------
9,332 234,393 735,257 (19,443) 959,539
------- --------- -------- ------- ---------
Income (loss) from operations......... (7,262) (234,111) 162,652 3,877 (74,844)
Other income and expenses:
Interest income..................... 144 234 3,816 -- 4,194
Affiliated interest income.......... 8,810 (18,076) 36,152 (26,886) --
Affiliated interest expense......... -- -- (26,886) 26,886 --
Interest expense, net of
capitalization.................... (13,163) 18,075 (50,590) -- (45,678)
Equity in earnings of associated
companies......................... -- -- 780 3,445 4,225
Dividend income..................... 2,839 -- 2,848 (5,687) --
Other, net.......................... -- 11 (699) -- (688)
------- --------- -------- ------- ---------
Income (loss) before income taxes..... (8,632) (233,867) 128,073 1,635 (112,791)
Provision for income taxes............ 27 (4) (6,336) -- (6,313)
------- --------- -------- ------- ---------
Net income (loss)..................... $(8,605) $(233,871) $121,737 $ 1,635 $(119,104)
======= ========= ======== ======= =========
F-38
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED
JUNE 30, 2000
GUARANTOR
SIHL SINA SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- -------- ------------ ------------ ------------
Revenues:
Casino and resort revenues............ $ -- $ -- $402,925 $(3,662) $399,263
Less: promotional allowances.......... -- -- (28,745) -- (28,745)
------- -------- -------- ------- --------
-- -- 374,180 (3,662) 370,518
Tour operations....................... -- -- 15,926 -- 15,926
Management and other fees............. 3,882 -- 12,788 -- 16,670
Real estate related................... -- -- 96,091 -- 96,091
Affiliated Sales...................... -- 162 4,597 (4,759) --
Other................................. -- -- 1,458 -- 1,458
------- -------- -------- ------- --------
3,882 162 505,040 (8,421) 500,663
------- -------- -------- ------- --------
Expenses:
Casino and resort expenses............ -- -- 235,766 (7,352) 228,414
Tour operations....................... -- -- 14,447 -- 14,447
Selling, general and administrative... -- -- 51,914 (859) 51,055
Management fee........................ 317 (12,542) 12,225 -- --
Real estate related................... -- -- 25,894 -- 25,894
Corporate expenses.................... 1,127 5,344 5,931 (210) 12,192
Depreciation and amortization......... -- 129 29,149 -- 29,278
Write-off of Desert Inn costs......... -- 11,202 -- -- 11,202
Transaction Costs..................... 7,014 -- -- -- 7,014
Pre-opening expenses.................. -- -- 690 -- 690
------- -------- -------- ------- --------
8,458 4,133 376,016 (8,421) 380,186
------- -------- -------- ------- --------
Income (loss) from operations........... (4,576) (3,971) 129,024 -- 120,477
Other income and expenses:
Interest income....................... 33 61 1,878 -- 1,972
Interest expense, net of
capitalization...................... (4,403) (9,038) (9,879) -- (23,320)
Affiliated interest income............ 4,403 9,037 -- (13,440) --
Affiliated interest expense........... -- -- (13,440) 13,440 --
Equity in earnings (loss) of
associated companies................ -- -- (476) 1,490 1,014
Dividend income....................... 1,677 -- 1,686 (3,363) --
------- -------- -------- ------- --------
Income (loss) before income taxes....... (2,866) (3,911) 108,793 (1,873) 100,143
Provision for income taxes.............. -- (4) (1,926) (403) (2,333)
------- -------- -------- ------- --------
Net income (loss)....................... $(2,866) $ (3,915) $106,867 $(2,276) $ 97,810
======= ======== ======== ======= ========
F-39
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED
JUNE 30, 2001
GUARANTOR
SIHL SINA SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- -------- ------------ ------------ ------------
Revenues:
Casino and resort revenues........... $ -- $ -- $291,726 $ (3,780) $287,946
Less: promotional allowances......... -- -- (14,464) -- (14,464)
------- -------- -------- -------- --------
-- -- 277,262 (3,780) 273,482
Tour operations...................... -- -- 20,711 -- 20,711
Management and other fees............ 3,237 -- 15,086 -- 18,323
Real estate related.................. -- -- 7,757 -- 7,757
Affiliated Sales..................... -- -- 5,206 (5,206) --
Other................................ -- 258 1,506 -- 1,764
------- -------- -------- -------- --------
3,237 258 327,528 (8,986) 322,037
------- -------- -------- -------- --------
Expenses:
Casino and resort expenses........... -- -- 148,473 (7,894) 140,579
Tour operations...................... -- -- 18,056 (15) 18,041
Selling, general and
administrative..................... -- -- 43,705 (1,077) 42,628
Management fee....................... 317 (9,204) 8,887 -- --
Real estate related.................. -- -- 2,311 -- 2,311
Corporate expenses................... 1,873 4,163 6,491 (314) 12,213
Depreciation and amortization........ -- 79 24,037 -- 24,116
Pre-opening expenses................. -- -- 4,355 -- 4,355
------- -------- -------- -------- --------
2,190 (4,962) 256,315 (9,300) 244,243
------- -------- -------- -------- --------
Income from operations................. 1,047 5,220 71,213 314 77,794
Other income and expenses:
Interest income...................... 5 3,135 1,130 -- 4,270
Interest expense, net of
capitalization..................... (7,776) (11,313) (7,747) -- (26,836)
Affiliated interest income........... 4,411 -- -- (4,411) --
Affiliated interest expense.......... -- -- (4,411) 4,411 --
Equity in earnings of associated
companies.......................... -- -- 1,369 1,435 2,804
Dividend income...................... 1,722 -- 1,732 (3,454) --
Other, net........................... -- -- (60) -- (60)
------- -------- -------- -------- --------
Income before income taxes............. (591) (2,958) 63,226 (1,705) 57,972
Provision for income taxes............. -- (5) (2,949) -- (2,954)
------- -------- -------- -------- --------
Net income............................. $ (591) $ (2,963) $ 60,277 $ (1,705) $ 55,018
======= ======== ======== ======== ========
F-40
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
CONDENSED CONSOLIDATING CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1998
GUARANTOR
SIHL SINA SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- --------- ------------ ------------ ------------
Cashflows from operating activities:
Net income..................................... $ 16,080 $ 1,791 $ 20,359 $ 19,516 $ 57,746
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................ 915 271 33,774 -- 34,960
(Gain) loss on disposition of other assets... -- 3 313 -- 316
Equity in earnings of associated companies,
net of dividends received.................. -- -- -- (670) (670)
Utilization of tax benefits acquired in
merger..................................... -- -- -- 1,887 1,887
Provision for doubtful receivables........... -- -- 2,189 -- 2,189
Provision for discount on CRDA obligations,
net........................................ -- -- 572 -- 572
Net change in deferred tax liability......... -- (1,860) -- (1,887) (3,747)
Net change in working capital accounts:
Receivables................................ (9,222) 1,523 (12,045) -- (19,744)
Due from affiliates........................ 3,527 -- (2,688) -- 839
Inventories and prepaid expenses........... 451 -- (2,347) -- (1,896)
Accounts payable and accrued liabilities... 7,581 (4,302) 19,270 54 22,603
Net change in deferred charges and other
assets..................................... (112) -- (4,841) -- (4,953)
-------- --------- --------- -------- ---------
Net cash provided by (used in) operating
activities............................... 19,220 (2,574) 54,556 18,900 90,102
-------- --------- --------- -------- ---------
Cashflows from investing activities:
Payments for capital expenditures, net of
insurance proceeds received................ -- (12,138) (412,958) (18,900) (443,996)
Net proceeds from the sale of non-operating
land and other assets...................... -- 110,253 60 -- 110,313
Sale of subordinated notes................... 2,798 -- -- -- 2,798
CRDA deposits................................ -- -- (2,955) -- (2,955)
Other........................................ -- (745) -- -- (745)
-------- --------- --------- -------- ---------
Net cash provided by (used in) investing
activities............................... 2,798 97,370 (415,853) (18,900) (334,585)
-------- --------- --------- -------- ---------
Cashflows from financing activities:
Proceeds from the exercise of share
options.................................... 4,735 -- -- -- 4,735
Borrowings................................... -- -- 264,000 -- 264,000
Debt issuance costs.......................... (501) -- (193) -- (694)
Repayment of borrowings...................... -- (105,333) (8,263) -- (113,596)
Advances from (repayments to) affiliates..... (99,878) 6,523 93,355 -- --
-------- --------- --------- -------- ---------
Net cash provided by (used in) financing
activities............................... (95,644) (98,810) 348,899 -- 154,445
-------- --------- --------- -------- ---------
Decrease in cash and cash equivalents.......... (73,626) (4,014) (12,398) -- (90,038)
Cash and cash equivalents at beginning of
period....................................... 73,731 4,042 75,388 -- 153,161
-------- --------- --------- -------- ---------
Cash and cash equivalents at end of period..... $ 105 $ 28 $ 62,990 $ -- $ 63,123
======== ========= ========= ======== =========
F-41
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
CONDENSED CONSOLIDATING CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1999
GUARANTOR
SIHL SINA SUBSIDIARIES ELIMINATIONS CONSOLIDATED
--------- -------- ------------ ------------ ------------
Cashflows from operating activities:
Net income (loss).................................. $ 19,202 $ 16,014 $ 37,799 $ (3,193) $ 69,822
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization.................... 173 353 59,621 -- 60,147
(Gain) loss on disposition of other assets....... -- (3) (57) -- (60)
Equity in earnings of associated companies, net
of dividends received.......................... -- -- -- 23 23
Dividends to parent.............................. -- -- (3,232) 3,232 --
Provision for doubtful receivables............... -- -- 6,466 -- 6,466
Provision for discount on CRDA obligations,
net............................................ -- -- 587 -- 587
Net change in deferred tax liability............. -- (30) -- -- (30)
Net change in working capital accounts:
Receivables.................................... (9,639) 1,230 (12,031) -- (20,440)
Due from affiliates............................ -- -- (7,150) -- (7,150)
Inventories and prepaid expenses............... (260) (52) (7,817) -- (8,129)
Accounts payable and accrued liabilities....... (5,519) (2,362) 12,141 (62) 4,198
Net change in deferred charges and other
assets......................................... -- (146) 4,694 -- 4,548
--------- -------- --------- --------- ---------
Net cash provided by operating activities...... 3,957 15,004 91,021 -- 109,982
--------- -------- --------- --------- ---------
Cashflows from investing activities:
Payments for capital expenditures, net of
insurance proceeds received.................... -- (10,066) (194,980) -- (205,046)
Net proceeds from the sale of non-operating land
and other assets............................... -- 5,050 136 -- 5,186
Proceeds from redemption of subordinated notes... 94,126 -- -- -- 94,126
Deposit refunded (paid) for proposed Desert Inn
acquisition.................................... -- (16,117) -- -- (16,117)
Payments for investment in and advances to joint
venture........................................ -- -- (600) -- (600)
Sale of subordinated notes....................... 2,798 -- -- -- 2,798
CRDA deposits.................................... -- -- (2,746) -- (2,746)
--------- -------- --------- --------- ---------
Net cash provided by (used in) investing
activities................................... 96,924 (21,133) (198,190) -- (122,399)
--------- -------- --------- --------- ---------
Cashflows from financing activities:
Proceeds from the exercise of share options...... 2,696 -- -- -- 2,696
Borrowings....................................... -- -- 129,000 -- 129,000
Repurchase of Ordinary Shares.................... (20,977) -- -- -- (20,977)
Debt issuance and modification costs............. -- -- (2,361) -- (2,361)
Repayment of borrowings.......................... -- -- (118,854) -- (118,854)
Advances from (repayments to) affiliates......... (82,551) 12,541 70,010 -- --
--------- -------- --------- --------- ---------
Net cash provided by (used in) financing
activities................................... (100,832) 12,541 77,795 -- (10,496)
--------- -------- --------- --------- ---------
Increase (decrease) in cash and cash equivalents... 49 6,412 (29,374) -- (22,913)
Cash and cash equivalents at beginning of period... 105 28 62,990 -- 63,123
--------- -------- --------- --------- ---------
Cash and cash equivalents at end of period......... $ 154 $ 6,440 $ 33,616 $ -- $ 40,210
========= ======== ========= ========= =========
F-42
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
CONDENSED CONSOLIDATING CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2000
GUARANTOR
SIHL SINA SUBSIDIARIES ELIMINATIONS CONSOLIDATED
--------- --------- ------------ ------------ ------------
Cashflows from operating activities:
Net income (loss)............................. $ (8,605) $(233,871) $ 121,737 $ 1,635 $(119,104)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization............... 185 333 63,822 -- 64,340
Write-down of net assets held for sale...... -- 233,085 -- (3,877) 229,208
Write-off of Desert Inn purchase termination
costs..................................... -- 11,202 -- -- 11,202
(Gain) loss on disposition of other
assets.................................... -- (24) 712 -- 688
Equity in earnings of associated companies,
net of dividends received................. -- -- (780) (597) (1,377)
Dividends to parent......................... -- -- (2,839) 2,839 --
Provision for doubtful receivables.......... -- -- 6,492 -- 6,492
Provision for discount on CRDA obligations,
net....................................... -- -- 799 -- 799
Net change in deferred tax liability........ -- 205 -- -- 205
Net change in working capital accounts:
Receivables............................... 10 603 (9,792) -- (9,179)
Due from affiliates....................... -- -- (4,658) -- (4,658)
Inventories and prepaid expenses.......... 289 (171) (2,170) -- (2,052)
Accounts payable and accrued
liabilities............................. 1,463 (114) 25,141 -- 26,490
Net change in deferred charges and other
assets.................................... -- (899) (769) -- (1,668)
Other....................................... -- -- 23,912 -- 23,912
--------- --------- --------- ------- ---------
Net cash provided by (used in) operating
activities.............................. (6,658) 10,349 221,607 -- 225,298
--------- --------- --------- ------- ---------
Cashflows from investing activities:
Payments for capital expenditures, net of
insurance proceeds received............... -- (6,099) (149,793) -- (155,892)
Net proceeds from the sale of non-operating
land and other assets..................... -- 170 331 -- 501
Deposit refunded for proposed Desert Inn
acquisition............................... -- 7,750 -- -- 7,750
Advances to joint venture................... -- -- (18,663) -- (18,663)
Reclassification of cash to net assets held
for sale.................................. -- -- (21,453) -- (21,453)
CRDA deposits............................... -- -- (2,334) -- (2,334)
Other....................................... -- (361) -- -- (361)
--------- --------- --------- ------- ---------
Net cash provided by (used in) investing
activities.............................. -- 1,460 (191,912) -- (190,452)
--------- --------- --------- ------- ---------
Cashflows from financing activities:
Proceeds from the exercise of share
options................................... 2,866 -- -- -- 2,866
Borrowings.................................. 125,000 -- 77,000 -- 202,000
Repurchase of Ordinary Shares............... (141,792) -- -- -- (141,792)
Debt issuance and modification costs........ -- -- (919) -- (919)
Repayment of borrowings..................... -- (16) (113,047) -- (113,063)
Advances from (repayments to) affiliates.... 20,536 (18,958) (1,578) -- --
--------- --------- --------- ------- ---------
Net cash provided by (used in) financing
activities.............................. 6,610 (18,974) (38,544) -- (50,908)
--------- --------- --------- ------- ---------
Decrease in cash and cash equivalents......... (48) (7,165) (8,849) -- (16,062)
Cash and cash equivalents at beginning of
period...................................... 154 6,440 33,616 -- 40,210
--------- --------- --------- ------- ---------
Cash and cash equivalents at end of period.... $ 106 $ (725) $ 24,767 $ -- $ 24,148
========= ========= ========= ======= =========
F-43
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
CONDENSED CONSOLIDATING CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2000
GUARANTOR
SIHL SINA SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- -------- ------------ ------------ ------------
Cashflows from operating activities:
Net income (loss)............................. $(2,866) $(3,915) $106,867 $(2,276) $ 97,810
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization............... 90 165 31,603 -- 31,858
Write-off of Desert Inn purchase termination
costs..................................... -- 11,202 -- -- 11,202
Equity in earnings of associated companies,
net of dividends received................. -- -- 476 196 672
Dividends to parent......................... -- -- (1,677) 1,677 --
Provision for doubtful receivables.......... -- -- 3,192 -- 3,192
Provision for discount on CRDA obligations,
net......................................... -- -- 461 -- 461
Net change in working capital accounts:
Receivables............................... -- 489 (4,830) -- (4,341)
Due from affiliates....................... -- -- (3,757) -- (3,757)
Inventories and prepaid expenses.......... 128 (153) (2,386) -- (2,411)
Accounts payable and accrued
liabilities............................. 6,050 (52) 49 403 6,450
Net change in deferred charges and other
assets.................................... (88) (1,205) (108) -- (1,401)
Other....................................... -- -- 19,736 -- 19,736
------- ------- -------- ------- --------
Net cash provided by operating
activities.............................. 3,314 6,531 149,626 -- 159,471
------- ------- -------- ------- --------
Cashflows from investing activities:
Payments for capital expenditures, net of
insurance proceeds received............... -- (3,828) (62,381) -- (66,209)
CRDA deposits............................... -- -- (1,385) -- (1,385)
Other....................................... -- 146 12 -- 158
------- ------- -------- ------- --------
Net cash used in investing activities..... -- (3,682) (63,754) -- (67,436)
------- ------- -------- ------- --------
Cashflows from financing activities:
Proceeds from the exercise of share
options................................... 21 -- -- -- 21
Borrowings.................................. -- -- 24,000 -- 24,000
Debt issuance and modification costs........ -- -- (919) -- (919)
Repayment of borrowings..................... -- -- (94,168) -- (94,168)
Advances from (repayments to) affiliates.... (2,892) (8,660) 11,552 -- --
------- ------- -------- ------- --------
Net cash used in financing activities..... (2,871) (8,660) (59,535) -- (71,066)
------- ------- -------- ------- --------
Increase (decrease) in cash and cash
equivalents................................. 443 (5,811) 26,337 -- 20,969
Cash and cash equivalents at beginning of
period...................................... 154 6,440 33,616 -- 40,210
------- ------- -------- ------- --------
Cash and cash equivalents at end of period.... $ 597 $ 629 $ 59,953 $ -- $ 61,179
======= ======= ======== ======= ========
F-44
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND FOR THE
SIX MONTHS ENDED JUNE 30, 2000 AND 2001 (UNAUDITED) (CONTINUED)
CONDENSED CONSOLIDATING CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2001
GUARANTOR
SIHL SINA SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- -------- ------------ ------------ ------------
Cashflows from operating activities:
Net income (loss)................................ $ (591) $ (2,963) $60,277 $(1,705) $ 55,018
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization.................. 99 403 25,169 -- 25,671
Provision for doubtful receivables............. -- -- 2,499 -- 2,499
(Gain) loss on disposition of other assets..... -- -- 60 -- 60
Equity in earnings of associated companies, net
of dividends received........................ -- -- (1,369) 297 (1,072)
Dividends to parent............................ -- -- (1,722) 1,722 --
Net change in working capital accounts:
Receivables.................................. (691) (5,692) 142 -- (6,241)
Due from affiliates.......................... -- -- 7,677 -- 7,677
Inventories and prepaid expenses............. 113 (218) (3,698) -- (3,803)
Accounts payable and accrued liabilities..... (2,418) (1,973) 7,193 (314) 2,488
Net change in deferred charges and other
assets....................................... (155) 24 (352) -- (483)
Other.......................................... -- -- 1,618 -- 1,618
------- -------- ------- ------- --------
Net cash provided by (used in) operating
activities................................. (3,643) (10,419) 97,494 -- 83,432
------- -------- ------- ------- --------
Cashflows from investing activities:
Payments for capital expenditures, net of
insurance proceeds received.................. -- (380) (33,226) -- (33,606)
Proceeds received from the sale of Resorts,
net.......................................... -- 120,850 -- -- 120,850
Advances to joint venture...................... -- -- (6,625) -- (6,625)
Other.......................................... -- -- 196 -- 196
------- -------- ------- ------- --------
Net cash provided by (used in) investing
activities................................. -- 120,470 (39,655) -- 80,815
------- -------- ------- ------- --------
Cashflows from financing activities:
Proceeds from the exercise of share options.... 1,978 -- -- -- 1,978
Borrowings..................................... -- -- 32,500 -- 32,500
Repayment of borrowings........................ (68,270) (79,031) (33,084) -- (180,385)
Advances from (repayments to) affiliates....... 71,873 (23,657) (48,216) -- --
------- -------- ------- ------- --------
Net cash provided by (used in) financing
activities................................. 5,581 (102,688) (48,800) -- (145,907)
------- -------- ------- ------- --------
Increase in cash and cash equivalents............ 1,938 7,363 9,039 -- 18,340
Cash and cash equivalents at beginning of
period......................................... 106 (725) 24,767 -- 24,148
------- -------- ------- ------- --------
Cash and cash equivalents at end of period....... $ 2,044 $ 6,638 $33,806 $ -- $ 42,488
======= ======== ======= ======= ========
F-45
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
$200,000,000 8 7/8% SENIOR SUBORDINATED NOTES DUE 2011
SUN INTERNATIONAL HOTELS LIMITED
[LOGO] SUN INTERNATIONAL NORTH AMERICA, INC.
OFFER TO EXCHANGE
ALL OUTSTANDING 8 7/8% SENIOR SUBORDINATED NOTES DUE 2011
($200,000,000 AGGREGATE PRINCIPAL AMOUNT)
FOR
8 7/8% SENIOR SUBORDINATED NOTES DUE 2011
($200,000,000 AGGREGATE PRINCIPAL AMOUNT)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
------------------------
PROSPECTUS
, 2001
---------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PART II
INFORMATION NOT REQUIRED TO BE DELIVERED TO OFFEREES OR PURCHASERS
ITEM 20. INDEMNIFICATION
Section 57 of the International Business Companies Act of the Commonwealth
of The Bahamas (the "IBCA") empowers a company incorporated under the IBCA to
indemnify against all expenses, including legal fees, and against all
judgements, fines and amounts paid in settlement and reasonably incurred in
connection with legal or administrative proceedings any person who (a) is or was
a party or is threatened to be made a party to any threatened, pending or
completed proceedings, whether civil or administrative, by reason of the fact
that the person is or was a director, an officer or a liquidator of the company;
or (b) is or was, at the request of the company, serving as a director, officer
or liquidator of, or in any other capacity is or was acting for, another company
or a partnership, joint venture, trust or other enterprise, PROVIDED, HOWEVER,
that such indemnification may only be provided to a person if the person acted
honestly and in good faith with a view to the best interests of the company.
Sun International provides for indemnification of its directors and officers
pursuant to Article 85 of its Articles of Association as amended, which provides
that, net of any indemnification an officer or director of Sun International
receives from another source, Sun International will indemnify its officers and
directors to the fullest extent permitted by the IBCA.
Sun International has purchased directors' and officers' liability insurance
policies insuring its officers and directors and the officers and directors of
its subsidiaries against claims and liabilities (with stated exceptions) to
which they may become subject by reason of their positions with Sun
International or its subsidiaries as directors and officers.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
A. EXHIBITS
EXHIBIT
NUMBERS DESCRIPTION INCORPORATION BY REFERENCE TO
--------------------- --------------------------------------------- ----------------------------------------
3.1 Amended and Restated Memorandum of Exhibit 3.1 to Registration Statement on
Association of Sun International Form F-4, File No. 333-15409, filed on
November 7, 1996
3.2 Restated Articles of Association of Sun Exhibit 1 to Form 20-F of Sun
International dated as of June 26, 2001 International, filed on July 2, 2001
3.3 Restated Certificate of Incorporation, as Exhibit 3.3 to Registration Statement on
amended, of Sun International North America, Form F-4, File No. 33-23665, filed on
Inc. March 20, 1997
3.4 Amended and Restated By-Laws of Sun Exhibit 3.4 to Registration Statement on
International North America, Inc. Form F-4, File No. 33-23665, filed on
March 20, 1997
4.1 Indenture dated as of August 14, 2001, among Exhibit 2(c) to Form 6-K of Sun
Sun International and SINA as Issuers, the International, filed on August 24, 2001
Guarantors party thereto and The Bank of New
York, as Trustee
4.2 Supplemental Indenture dated as of Exhibit 99(a) to Form 6-K of Sun
September 19, 2001 to Indenture dated as of International, filed on September 20,
August 14, 2001 2001
II-1
EXHIBIT
NUMBERS DESCRIPTION INCORPORATION BY REFERENCE TO
--------------------- --------------------------------------------- ----------------------------------------
4.3 Form of 8 7/8% Senior Subordinated Note due Exhibit 2(c) to Form 6-K of Sun
2011 International, filed on August 24, 2001
4.4 Form of Guarantee with respect to 8 7/8% Exhibit 2(c) to Form 6-K of Sun
Senior Subordinated Note due 2011 International, filed on August 24, 2001
4.5 Registration Rights Agreement, dated as of Exhibit 2(b) to Form 6-K of Sun
August 14, 2001, among Sun International and International, filed on August 24, 2001
SINA as Issuers, the Guarantors party thereto
and Deutsche Banc Alex. Brown Inc., Bear,
Stearns & Co. Inc., CIBC World Markets
Corp., Banc of America Securities LLC, Wells
Fargo Brokerage Services, LLC, Fleet
Securities, Inc. and The Royal Bank of
Scotland plc, as Initial Purchasers
4.6 Form of Indenture dated as of March 10, 1997, Exhibit 4(e)(2) to Form 10-K405 of SINA,
among Sun International and SINA as Issuers, filed on March 20, 1997
the Guarantors party thereto and the Bank of
New York, as Trustee
4.7 Form of 9.000% Senior Subordinated Note due Exhibit 4(e)(2) to Form 10-K405 of SINA,
2007 filed on March 20, 1997
4.8 Form of Exchange Note with respect to 9.000% Exhibit 4.6 to Registration Statement on
Senior Subordinated Note due 2007 Form F-4, File No. 333-23665, filed on
March 20, 1997
4.9 Form of Guarantee with respect to 9.000% Exhibit 4(e)(2) to Form 10-K405 of SINA,
Senior Subordinated Note due 2007 filed on March 20, 1997
4.10 Supplemental Indenture dated as of July 23, Exhibit 99(a) to Form 6-K of Sun
2001 to Indenture dated as of March 10, 1997 International, filed on August 3, 2001
4.11 Second Supplemental Indenture dated as of Exhibit 99(b) to Form 6-K of Sun
September 19, 2001 to Indenture dated as of International, filed on September 20,
March 10, 1997 2001
4.12 Registration Rights Agreement dated as of Exhibit 4(e)(3) to Form 10-K405 of SINA,
March 10, 1997 among Sun International and filed on March 20, 1997
SINA, as Issuers, the Guarantors party
thereto and the Initial Purchasers party
thereto
4.13 Form of Indenture dated as of December 10, Exhibit 4.1 to Registration Statement on
1997, among Sun International and SINA, as Form F-3, File No. 333-41127, filed on
Issuers, the Guarantors party thereto and the November 26, 1997
Bank of New York, as Trustee
4.14 Form of 8.625% Senior Subordinated Note due Exhibit 4.1 to Registration Statement on
2007 Form F-3, File No. 333-41127, filed on
November 26, 1997
4.15 Form of Guarantee with respect to 8.625% Exhibit 4.1 to Registration Statement on
Senior Subordinated Note due 2007 Form F-3, File No. 333-41127, filed on
November 26, 1997
II-2
EXHIBIT
NUMBERS DESCRIPTION INCORPORATION BY REFERENCE TO
--------------------- --------------------------------------------- ----------------------------------------
4.16 Supplemental Indenture dated as of July 23, Exhibit 99(b) to Form 6-K of Sun
2001 to Indenture dated as of December 10, International, filed on August 3, 2001
1997
4.17 Second Supplemental Indenture dated as of Exhibit 99(c) to Form 6-K of Sun
September 19, 2001 to Indenture dated as of International, filed on September 20,
December 10, 1997 2001
4.18 Third Amended and Restated Revolving Credit Exhibit 99(b)(1) to Tender Offer
Agreement dated as of November 1, 1999, among Statement of Sun International, File
Sun International, Sun International Bahamas No. 005-48645, filed on June 26, 2000
Limited ("SIB"), Resorts International
Hotel, Inc. ("RIH") and Sun International
Nevada, Inc. ("Sun Nevada"), as the
Borrowers and Guarantors, The Bank of Nova
Scotia, as the Administrative Agent, and
Various Financial Institutions, as the
Lenders
4.19 First Amendment to the Third Amended and Exhibit 99(b)(2) to Tender Offer
Restated Revolving Credit Agreement dated as Statement of Sun International, File
of June 13, 2000 among SIB, RIH, and Sun No. 005-48645, filed on June 26, 2000
Nevada, as the Borrowers and Guarantors, The
Bank of Nova Scotia, as the Administrative
Agent, and Various Financial Institutions, as
the Lenders
4.20 Second Amendment to the Third Amended and Exhibit 4.6 to Form 20-F of Sun
Restated Revolving Credit Agreement dated as International, filed on July 2, 2001
of June 13, 2000 among SIB, RIH, and Sun
Nevada, as the Borrowers and Guarantors, The
Bank of Nova Scotia, as the Administrative
Agent, and Various Financial Institutions, as
the Lenders
5.1 Opinion of Charles D. Adamo, Esq. Filed herewith
5.2 Opinion of Giselle M. Pyfrom, Esq. Filed herewith
10.1 Purchase Agreement dated as of October 30, Exhibit 10 to Form 10-Q of SINA, filed
2000, among SINA, as parent, GGRI, Inc., as on November 14, 2000
Seller, and Colony Capital LLC ("Colony"), as
Buyer
10.2 Promissory Note between Colony and SINA dated Exhibit 2 to Form 6-K of Sun
as of April 25, 2001 International, filed on May 3, 2001
10.3 Termination Agreement among Sheraton Desert Exhibit 2 to Form 6-K of Sun
Inn Corporation, Starwood Hotels and Resorts International, filed on March 17, 2000
Worldwide Inc., Sheraton Gaming Corporation,
Sun International and Sun Nevada dated as of
February 29, 2000, terminating the Asset and
Land Purchase Agreement among the parties
dated as of May 17, 1999
II-3
EXHIBIT
NUMBERS DESCRIPTION INCORPORATION BY REFERENCE TO
--------------------- --------------------------------------------- ----------------------------------------
10.4 Trading Cove New York, LLC ("TCNY") Exhibit 4.7 to Form 20-F of Sun
Development Services Agreement dated as of International, filed on July 2, 2001
March 20, 2001 among the Stockbridge-Munsee
Tribe, the Stockbridge-Munsee Tribal Gaming
Authority, TCNY, SINA and Waterford Gaming
Group, LLC
10.5 Management Agreement between the Government Exhibit 3.2 to Form 20-F of Sun
of Dubai, Sun International Management International, filed on June 30, 1999
Limited and Sun International dated as of
June 5, 1998
10.6 Development Services Agreement dated Exhibit 2.1 to Form 20-F/A of Sun
February 7, 1998 between the Mohegan Tribal International, filed on September 3,
Gaming Authority and Trading Cove Associates 1998
10.7 Relinquishment Agreement dated February 7, Exhibit 2.2 to Form 20-F/A of Sun
1998, between the Mohegan Tribal Gaming International, filed on September 3,
Authority and Trading Cove Associates 1998
10.8 Registration Rights and Governance Agreement Exhibit C to Schedule 13D of Sun
dated as of July 3, 2001, by and among Sun International, filed on July 13, 2001
International, Sun International Investments
Limited, World Leisure Group Limited, Kersaf
Investments Limited, Caledonia Investments
PLC, Mangalitsa Limited, Cement Merchants SA,
Rosegrove Limited, Royale Resorts Holdings
Limited and Sun International Inc.
10.9 Omnibus Agreement dated as of July 3, 2001, Filed herewith
by and among Sun International, Sun
International Investments Limited, World
Leisure Group Limited, Kersaf Investments
Limited, Caledonia Investments PLC, Rosegrove
Limited, Royale Resorts Holdings Limited,
Royale Resorts International Limited, Sun
International Inc., Sun Hotels International,
Sun Hotels Limited, World Leisure Investments
Limited, Solomon Kerzner, Peter Buckley,
Derek Aubrey Hawton, Sun International
Management Limited (a British Virgin Islands
company), Cement Merchants SA, Sun
International Management Limited (a Swiss
company), Sun International Management (UK)
Limited, Hog Island Holdings Limited and
Mangalitsa Limited
II-4
EXHIBIT
NUMBERS DESCRIPTION INCORPORATION BY REFERENCE TO
--------------------- --------------------------------------------- ----------------------------------------
10.10 Supplemental Agreement to the Original Exhibit A to Schedule 13D of Sun
Shareholders' Agreement and to the Rosegrove International, filed on July 13, 2001
Shareholders Agreement dated as of July 3,
2001, by and among Kersaf Investments
Limited, Sun International Inc., Sun Hotels
International, Royale Resorts Holdings
Limited, World Leisure Investments Limited,
Sun Hotels Limited, World Leisure Group
Limited, Royale Resorts International
Limited, Caledonia Investments PLC, Solomon
Kerzner, Sun International Management Limited
(a British Virgin Islands company), Rosegrove
Limited, Sun International Management Limited
(a Swiss company), Mangalitsa Limited and Hog
Island Holdings Limited
10.11 Irrevocable Proxy Agreement dated as of Exhibit B to Schedule 13D of Sun
July 3, 2001, by and among Sun International filed on July 13, 2001
International, Sun International Investments
Limited, World Leisure Group Limited, Kersaf
Investments Limited, Caledonia Investments
PLC, Mangalitsa Limited, Cement Merchants SA,
Rosegrove Limited, Royale Resorts Holdings
Limited and Sun International Inc.
10.12 Trade Name and Trademark Agreement dated as Filed herewith
of July 3, 2001, by and among Sun
International, Sun International Investments
Limited and World Leisure Group Limited, as
Assignors, and Sun International Management
Limited, as Assignee
10.13 Promissory Note dated July 3, 2001 between Filed herewith
Royale Resorts Holdings Limited, as Maker,
and Sun International, as Payee
10.14 Stock Pledge Agreement dated as of July 3, Filed herewith
2001, between Royale Resorts Holdings
Limited, as Pledgor, and Sun International
11.1 Statement regarding computation of earnings Note 2 of the Notes to the Consolidated
per share Financial Statements to Form 20-F of Sun
International, filed on July 2, 2001
12.1 Statement regarding computation of ratios Filed herewith
21.1 Subsidiaries of Sun International Filed herewith
21.2 Subsidiaries of SINA Filed herewith
23.1 Consent of Arthur Andersen LLP Filed herewith
23.2 Consent of Charles D. Adamo, Esq. (contained Filed herewith
in Exhibit 5.1)
II-5
EXHIBIT
NUMBERS DESCRIPTION INCORPORATION BY REFERENCE TO
--------------------- --------------------------------------------- ----------------------------------------
23.2 Consent of Giselle M. Pyfrom, Esq. (contained Filed herewith
in Exhibit 5.1)
24 Powers of Attorney (included on the signature Filed herewith
pages hereto)
25 Statement of Eligibility and Qualification Filed herewith
under the Trust Indenture Act of 1939 of The
Bank of New York, as Trustee, on Form T-1,
relating to the 8 7/8% Senior Subordinated
Notes due 2011 (including Exhibit 7 to Form
T-1)
99.1 Form of Letter of Transmittal Filed herewith
99.2 Form of Notice of Guaranteed Delivery Filed herewith
99.3 Form of Letter to Clients Filed herewith
99.4 Form of Letter to Brokers, Dealers, Filed herewith
Commercial Banks, Trust Companies and Other
Nominees
99.5 Form W-9 Filed herewith
ITEM 22. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(b) The undersigned Registrant hereby undertakes that insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(c) The undersigned Registrant hereby undertakes (i) to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Item 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means; and (ii) to arrange or provide for a facility in the
U.S. for the purpose of responding to such requests.
(d) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Bucks, England, on the 21st day of
September, 2001.
SUN INTERNATIONAL HOTELS LIMITED
By: /s/ SOLOMON KERZNER
-----------------------------------------
Name: Solomon Kerzner
Title: CHAIRMAN OF THE BOARD OF DIRECTORS
AND CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
Chairman of the Board of
Directors and Chief
/s/ SOLOMON KERZNER Executive Officer
------------------------------------------- (Principal Executive, September 21, 2001
Solomon Kerzner Financial and Accounting
Officer)
/s/ PETER BUCKLEY
------------------------------------------- Director September 21, 2001
Peter Buckley
/s/ HOWARD MARKS
------------------------------------------- Director September 21, 2001
Howard Marks
II-7
NAME TITLE DATE
---- ----- ----
/s/ ERIC SIEGEL
------------------------------------------- Director September 21, 2001
Eric Siegel
/s/ HEINRICH VON RANTZAU
------------------------------------------- Director September 21, 2001
Heinrich von Rantzau
/s/ JOHN R. ALLISON Executive Vice President,
------------------------------------------- Chief Financial Officer September 21, 2001
John R. Allison and Secretary
/s/ CHARLES D. ADAMO
------------------------------------------- Executive Vice President September 21, 2001
Charles D. Adamo and General Counsel
/s/ GISELLE M. PYFROM Senior Vice President,
------------------------------------------- Assistant Secretary and September 21, 2001
Giselle M. Pyfrom General Counsel
/s/ WILLIAM C. MURTHA
------------------------------------------- Authorized Representative September 21, 2001
William C. Murtha in the United States
II-8
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in New York, New York, on the 21st day
of September, 2001.
SUN INTERNATIONAL NORTH AMERICA, INC.
By: /s/ CHARLES D. ADAMO
-----------------------------------------
Name: Charles D. Adamo
Title: EXECUTIVE VICE PRESIDENT,
SECRETARY AND
DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
Executive Vice President,
/s/ CHARLES D. ADAMO Secretary and Director
------------------------------------------- (Principal Executive September 21, 2001
Charles D. Adamo Officer)
Executive Vice President,
/s/ JOHN R. ALLISON Chief Financial Officer,
------------------------------------------- Treasurer and Director September 21, 2001
John R. Allison (Principal Financial and
Accounting Officer)
Murtha Senior Vice
/s/ WILLIAM C. MURTHA President, Corporate
------------------------------------------- Counsel and Assistant September 21, 2001
William C. Murtha Secretary
II-9
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Bucks, England, on the 21st day of
September, 2001.
SUN INTERNATIONAL BAHAMAS LIMITED
By: /s/ SOLOMON KERZNER
-----------------------------------------
Name: Solomon Kerzner
Title: PRESIDENT
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ SOLOMON KERZNER President (Principal
------------------------------------------- Executive, Financial and September 21, 2001
Solomon Kerzner Accounting Officer)
/s/ HOWARD B. KERZNER
------------------------------------------- Director September 21, 2001
Howard B. Kerzner
/s/ J. BARRIE FARRINGTON
------------------------------------------- Senior Vice President, September 21, 2001
J. Barrie Farrington Secretary and Director
/s/ ALAN LEIBMAN
------------------------------------------- Senior Vice President September 21, 2001
Heinrich von Rantzau
II-10
NAME TITLE DATE
---- ----- ----
/s/ CHARLES D. ADAMO
------------------------------------------- Vice President and Director September 21, 2001
Charles D. Adamo
/s/ GENE ALBURY
------------------------------------------- Vice President and September 21, 2001
Gene Albury Assistant Secretary
/s/ GISELLE M. PYFROM
------------------------------------------- Assistant Secretary September 21, 2001
Giselle M. Pyfrom
/s/ WILLIAM C. MURTHA
------------------------------------------- Authorized Representative September 21, 2001
William C. Murtha in the United States
II-11
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Stowe, Vermont, on the 21st day of
September, 2001.
PARADISE ACQUISITIONS LIMITED
By: /s/ J. BARRIE FARRINGTON
-----------------------------------------
Name: J. Barrie Farrington
Title: PRESIDENT AND DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
President and Director
/s/ J. BARRIE FARRINGTON (Principal Executive,
------------------------------------------- Financial and Accounting September 21, 2001
J. Barrie Farrington Officer)
/s/ CHARLES D. ADAMO
------------------------------------------- Assistant Secretary and September 21, 2001
Charles D. Adamo Director
/s/ HOWARD B. KERZNER
------------------------------------------- Director September 21, 2001
Howard B. Kerzner
/s/ GISELLE M. PYFROM
------------------------------------------- Assistant Secretary September 21, 2001
Giselle M. Pyfrom
/s/ WILLIAM C. MURTHA
------------------------------------------- Authorized Representative September 21, 2001
William C. Murtha in the United States
II-12
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Stowe, Vermont, on the 21st day of
September, 2001.
PARADISE ACQUISITIONS LIMITED
By: /s/ J. BARRIE FARRINGTON
-----------------------------------------
Name: J. Barrie Farrington
Title: SENIOR VICE PRESIDENT, SECRETARY
AND DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the adates indicated.
NAME TITLE DATE
---- ----- ----
Senior Vice President,
/s/ J. BARRIE FARRINGTON Secretary and Director
------------------------------------------- (Principal Executive, September 21, 2001
J. Barrie Farrington Financial and Accounting
Officer)
/s/ HOWARD B. KERZNER
------------------------------------------- Director September 21, 2001
Howard B. Kerzner
/s/ CHARLES D. ADAMO
------------------------------------------- Vice President and Director September 21, 2001
Charles D. Adamo
/s/ GENE ALBURY
------------------------------------------- Assistant Secretary September 21, 2001
Gene Albury
II-13
NAME TITLE DATE
---- ----- ----
/s/ GISELLE M. PYFROM
------------------------------------------- Assistant Secretary September 21, 2001
Giselle M. Pyfrom
/s/ WILLIAM C. MURTHA
------------------------------------------- Authorized Representative September 21, 2001
William C. Murtha in the United States
II-14
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Bucks, England, on the 21st day of
September, 2001.
PARADISE ENTERPRISES LIMITED
By: /s/ SOLOMON KERZNER
-----------------------------------------
Name: Solomon Kerzner
Title: PRESIDENT
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ SOLOMON KERZNER President (Principal
------------------------------------------- Executive, Financial and September 21, 2001
Solomon Kerzner Accounting Officer)
/s/ J. BARRIE FARRINGTON
------------------------------------------- Vice President, Secretary September 21, 2001
J. Barrie Farrington and Director
/s/ HOWARD B. KERZNER
------------------------------------------- Director September 21, 2001
Howard B. Kerzner
/s/ CHARLES D. ADAMO
------------------------------------------- Vice President and Director September 21, 2001
Charles D. Adamo
II-15
NAME TITLE DATE
---- ----- ----
/s/ GENE ALBURY
------------------------------------------- Assistant Secretary September 21, 2001
Gene Albury
/s/ GISELLE M. PYFROM
------------------------------------------- Assistant Secretary September 21, 2001
Giselle M. Pyfrom
/s/ WILLIAM C. MURTHA
------------------------------------------- Authorized Representative September 21, 2001
William C. Murtha in the United States
II-16
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Stowe, Vermont, on the 21st day of
September, 2001.
ISLAND HOTEL COMPANY LIMITED
By: /s/ J. BARRIE FARRINGTON
-----------------------------------------
Name: J. Barrie Farrington
Title: SENIOR VICE PRESIDENT AND DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
Senior Vice President and
/s/ J. BARRIE FARRINGTON Director (Principal
------------------------------------------- Executive, Financial and September 21, 2001
J. Barrie Farrington Accounting Officer)
/s/ HOWARD B. KERZNER
------------------------------------------- Director September 21, 2001
Howard B. Kerzner
/s/ CHARLES D. ADAMO
------------------------------------------- Vice President and Director September 21, 2001
Charles D. Adamo
/s/ GENE ALBURY
------------------------------------------- Assistant Secretary September 21, 2001
Gene Albury
II-17
NAME TITLE DATE
---- ----- ----
/s/ GISELLE M. PYFROM
------------------------------------------- Assistant Secretary September 21, 2001
Giselle M. Pyfrom
/s/ WILLIAM C. MURTHA
------------------------------------------- Authorized Representative September 21, 2001
William C. Murtha in the United States
II-18
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Stowe, Vermont, on the 21st day of
September, 2001.
PARADISE BEACH INN LIMITED
By: /s/ J. BARRIE FARRINGTON
-----------------------------------------
Name: J. Barrie Farrington
Title: VICE PRESIDENT, SECRETARY AND
DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
Vice President, Secretary
/s/ J. BARRIE FARRINGTON and Director (Principal
------------------------------------------- Executive, Financial and September 21, 2001
J. Barrie Farrington Accounting Officer)
/s/ HOWARD B. KERZNER
------------------------------------------- Director September 21, 2001
Howard B. Kerzner
/s/ CHARLES D. ADAMO
------------------------------------------- Vice President and Director September 21, 2001
Charles D. Adamo
/s/ GENE ALBURY
------------------------------------------- Assistant Secretary September 21, 2001
Gene Albury
II-19
NAME TITLE DATE
---- ----- ----
/s/ GISELLE M. PYFROM
------------------------------------------- Assistant Secretary September , 2001
Giselle M. Pyfrom
/s/ WILLIAM C. MURTHA
------------------------------------------- Authorized Representative September , 2001
William C. Murtha in the United States
II-20
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Bucks, England, on the 21st day of
September, 2001.
SUN INTERNATIONAL MANAGEMENT LIMITED
By: /s/ SOLOMON KERZNER
-----------------------------------------
Name: Solomon Kerzner
Title: CHAIRMAN OF THE BOARD OF DIRECTORS
AND CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
Chairman of the Board of
/s/ SOLOMON KERZNER Directors and Chief
------------------------------------------- Executive Officer September 21, 2001
Solomon Kerzner (Principal Executive
Officer)
/s/ HOWARD B. KERZNER Director (Principal
------------------------------------------- Financial and Accounting September 21, 2001
Howard B. Kerzner Officer)
/s/ CHARLES D. ADAMO
------------------------------------------- Director September 21, 2001
Charles D. Adamo
/s/ WILLIAM C. MURTHA
------------------------------------------- Authorized Representative September 21, 2001
William C. Murtha in the United States
II-21
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Linwood, New Jersey, on the 21st day
of September, 2001.
SUN COVE, LTD.
By: /s/ WILLIAM C. MURTHA
-----------------------------------------
Name: William C. Murtha
Title: ASSISTANT SECRETARY
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
President and Director
/s/ HOWARD B. KERZNER (Principal Executive,
------------------------------------------- Financial and Accounting September 21, 2001
Howard B. Kerzner Officer)
/s/ WILLIAM C. MURTHA
------------------------------------------- Assistant Secretary September 21, 2001
William C. Murtha
II-22
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in London, England, on the 21st day of
September, 2001.
SUN INTERNATIONAL NEVADA, INC.
By: /s/ JOHN R. ALLISON
-----------------------------------------
Name: John R. Allison
Title: SECRETARY, TREASURER AND DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ JOHN R. ALLISON Secretary, Treasurer and Director
--------------------------------- (Principal Executive, Financial September 21, 2001
John R. Allison and Accounting Officer)
II-23
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in London, England, on the 21st day of
September, 2001.
SUN INTERNATIONAL RESORTS INC.
By: /s/ JOHN R. ALLISON
-----------------------------------------
Name: John R. Allison
Title: EXECUTIVE VICE PRESIDENT AND
DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ JOHN R. ALLISON Executive Vice President and
--------------------------------- Director (Principal Executive, September 21, 2001
John R. Allison Financial and Accounting Officer)
/s/ WILLIAM C. MURTHA
--------------------------------- Senior Vice President, Corporate September 21, 2001
William C. Murtha Counsel and Secretary
/s/ HOWARD KARAWAN
--------------------------------- Vice President and Assistant September 21, 2001
Howard Karawan Secretary
II-24
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in London, England, on the 21st day of
September, 2001.
PIV, INC.
By: /s/ JOHN R. ALLISON
-----------------------------------------
Name: John R. Allison
Title: PRESIDENT AND DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ JOHN R. ALLISON President and Director (Principal
--------------------------------- Executive, Financial and September 21, 2001
John R. Allison Accounting Officer)
/s/ HOWARD KARAWAN
--------------------------------- Vice President and Assistant September 21, 2001
Howard Karawan Secretary
/s/ WILLIAM C. MURTHA
--------------------------------- Secretary September 21, 2001
William C. Murtha
II-25
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in London, England, on the 21st day of
September, 2001.
ISS, INC.
By: /s/ JOHN R. ALLISON
-----------------------------------------
Name: John R. Allison
Title: PRESIDENT AND DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ JOHN R. ALLISON President and Director (Principal
--------------------------------- Executive, Financial and September 21, 2001
John R. Allison Accounting Officer)
/s/ HOWARD KARAWAN
--------------------------------- Vice President and Assistant September 21, 2001
Howard Karawan Secretary
/s/ WILLIAM C. MURTHA
--------------------------------- Secretary September 21, 2001
William C. Murtha
II-26
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in London, England, on the 21st day of
September, 2001.
SUN INTERNATIONAL MARKETING, INC.
By: /s/ JOHN R. ALLISON
-----------------------------------------
Name: John R. Allison
Title: EXECUTIVE VICE PRESIDENT, CHIEF
FINANCIAL OFFICER, TREASURER AND DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
Executive Vice President, Chief
/s/ JOHN R. ALLISON Financial Officer, Treasurer and
--------------------------------- Director (Principal Executive, September 21, 2001
John R. Allison Financial and Accounting Officer)
/s/ WILLIAM C. MURTHA
--------------------------------- Secretary September 21, 2001
William C. Murtha
II-27
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Paradise Island, The Bahamas, on the
21st day of September, 2001.
SUN COVE CALIFORNIA, INC.
By: /s/ HOWARD B. KERZNER
-----------------------------------------
Name: Howard B. Kerzner
Title: PRESIDENT
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ HOWARD B. KERZNER
------------------------------------------- President (Principal September 21, 2001
Howard B. Kerzner Executive Officer)
Executive Vice President,
/s/ JOHN R. ALLISON Chief Financial Officer,
------------------------------------------- Treasurer and Director September 21, 2001
John R. Allison (Principal Financial and
Accounting Officer)
/s/ CHARLES D. ADAMO
------------------------------------------- Executive Vice President, September 21, 2001
Charles D. Adamo Secretary and Director
/s/ WILLIAM C. MURTHA
------------------------------------------- Secretary September 21, 2001
William C. Murtha
II-28
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Paradise Island, The Bahamas, on the
21st day of September, 2001.
SUN COVE NEW YORK, INC.
By: /s/ HOWARD B. KERZNER
-----------------------------------------
Name: Howard B. Kerzner
Title: PRESIDENT AND DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ HOWARD B. KERZNER President and Director
------------------------------------------- (Principal Executive September 21, 2001
Howard B. Kerzner Officer)
Executive Vice President,
/s/ JOHN R. ALLISON Chief Financial Officer,
------------------------------------------- Treasurer and Director September 21, 2001
John R. Allison (Principal Financial and
Accounting Officer)
/s/ WILLIAM C. MURTHA
------------------------------------------- Senior Vice President and September 21, 2001
William C. Murtha Secretary
II-29
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in London, England, on the 21st day of
September, 2001
SUN INTERNATIONAL NEW YORK, INC.
By: /s/ JOHN R. ALLISON
-----------------------------------------
Name: John R. Allison
Title: EXECUTIVE VICE PRESIDENT, CHIEF
FINANCIAL
OFFICER, TREASURER AND DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
Executive Vice President,
Chief Financial Officer,
/s/ JOHN R. ALLISON Treasurer and Director
------------------------------------------- (Principal Executive, September 21, 2001
John R. Allison Financial and Accounting
Officer)
/s/ WILLIAM C. MURTHA
------------------------------------------- Secretary September 21, 2001
William C. Murtha
II-30
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Paradise Island, The Bahamas, on the
21st day of September , 2001.
SUN INTERNATIONAL DEVELOPMENT GROUP, INC.
By: /s/ JAMES BOOCHER
-----------------------------------------
Name: James Boocher
Title: PRESIDENT
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ JAMES BOOCHER
------------------------------------------- President, (Principal September 21, 2001
James Boocher Executive Officer)
/s/ CHARLES D. ADAMO
------------------------------------------- Executive Vice President September 21, 2001
Charles D. Adamo and Director
Executive Vice President-
/s/ JOHN R. ALLISON Finance, Chief Financial
------------------------------------------- Officer and Treasurer September 21, 2001
John R. Allison (Principal Financial and
Accounting Officer)
/s/ WILLIAM C. MURTHA
------------------------------------------- Secretary September 21, 2001
William C. Murtha
II-31
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Paradise Island, The Bahamas, on the
21st day of September, 2001.
SUN INTERNATIONAL TIMESHARE LIMITED
By: /s/ GISELLE M. PYFROM
-----------------------------------------
Name: Giselle M. Pyfrom
Title: SECRETARY AND DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
Secretary and Director
/s/ GISELLE M. PYFROM (Principal Executive,
------------------------------------------- Financial and Accounting September 21, 2001
Giselle M. Pyfrom Officer)
/s/ HOWARD B. KERZNER
------------------------------------------- Director September 21, 2001
Howard B. Kerzner
/s/ CHARLES D. ADAMO
------------------------------------------- Director September 21, 2001
Charles D. Adamo
/s/ TANYA A. NUNEZ
------------------------------------------- Assistant Secretary September 21, 2001
Tanya A. Nunez
/s/ WILLIAM C. MURTHA
------------------------------------------- Authorized Representative September 21, 2001
William C. Murtha in the United States
II-32
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Stowe, Vermont, on the 21st day of
September, 2001.
PARADISE ISLAND FUTURES LIMITED
By: /s/ J. BARRIE FARRINGTON
-----------------------------------------
Name: J. Barrie Farrington
Title: SECRETARY AND DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ J. BARRIE FARRINGTON Secretary and Director (Principal
--------------------------------- Executive, Financial and September 21, 2001
J. Barrie Farrington Accounting Officer)
/s/ HOWARD B. KERZNER Director September 21, 2001
---------------------------------
/s/ CHARLES D. ADAMO
--------------------------------- Assistant Secretary and Director September 21, 2001
Charles D. Adamo
/s/ GISELLE M. PYFROM
--------------------------------- Assistant Secretary September 21, 2001
Giselle M. Pyfrom
/s/ WILLIAM C. MURTHA
--------------------------------- Authorized Representative in the September 21, 2001
William C. Murtha United States
II-33
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Paradise Island, The Bahamas, on the
21st day of September, 2001.
SUN INTERNATIONAL DEVELOPMENT LIMITED
By: /s/ JAMES BOOCHER
-----------------------------------------
Name: James Boocher
Title: PRESIDENT AND DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ JAMES BOOCHER President and Director (Principal
--------------------------------- Executive, Financial and September 21, 2001
James Boocher Accounting Officer)
/s/ HOWARD B. KERZNER
--------------------------------- Director September 21, 2001
Howard B. Kerzner
/s/ CHARLES D. ADAMO
--------------------------------- Secretary and Director September 21, 2001
Charles D. Adamo
/s/ GISELLE M. PYFROM
--------------------------------- Assistant Secretary September 21, 2001
Giselle M. Pyfrom
/s/ WILLIAM C. MURTHA
--------------------------------- Authorized Representative in the September 21, 2001
William C. Murtha United States
II-34
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Stowe, Vermont, on the 21st day of
September, 2001.
PARADISE SECURITY SERVICES LIMITED
By: /s/ J. BARRIE FARRINGTON
-----------------------------------------
Name: J. Barrie Farrington
Title: SENIOR VICE PRESIDENT, ASSISTANT
SECRETARY AND DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
Senior Vice President, Assistant
/s/ J. BARRIE FARRINGTON Secretary and Director (Principal
--------------------------------- Executive, Financial and September 21, 2001
J. Barrie Farrington Accounting Officer)
/s/ HOWARD B. KERZNER
--------------------------------- Director September 21, 2001
Howard B. Kerzner
/s/ CHARLES D. ADAMO
--------------------------------- Vice President and Director September 21, 2001
Charles D. Adamo
/s/ GENE ALBURY
--------------------------------- Treasurer September 21, 2001
Gene Albury
II-35
NAME TITLE DATE
---- ----- ----
/s/ CLEOMI PARKER
--------------------------------- Secretary September 21, 2001
Cleomi Parker
/s/ GISELLE M. PYFROM
--------------------------------- Assistant Secretary September 21, 2001
Giselle M. Pyfrom
/s/ WILLIAM C. MURTHA
--------------------------------- Authorized Representative in the September 21, 2001
William C. Murtha United States
II-36
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in London, England, on the 21st day of
September, 2001.
SUNONLINE LIMITED
By: /s/ TOBIN B. PRIOR
-----------------------------------------
Name: Tobin B. Prior
Title: PRESIDENT AND DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ TOBIN B. PRIOR President and Director (Principal
--------------------------------- Executive, Financial and September 21, 2001
Tobin B. Prior Accounting Officer)
/s/ HOWARD B. KERZNER
--------------------------------- Vice President and Director September 21, 2001
Howard B. Kerzner
/s/ CHARLES D. ADAMO
--------------------------------- Vice President and Director September 21, 2001
Charles D. Adamo
/s/ GISELLE M. PYFROM
--------------------------------- Assistant Secretary September 21, 2001
Giselle M. Pyfrom
/s/ WILLIAM C. MURTHA
--------------------------------- Authorized Representative in the September 21, 2001
William C. Murtha United States
II-37
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in London, England, on the 21st day of
September, 2001.
BAHAMAS E-TRADING LIMITED
By: /s/ TOBIN B. PRIOR
-----------------------------------------
Name: Tobin B. Prior
Title: PRESIDENT AND DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ TOBIN B. PRIOR President and Director (Principal
--------------------------------- Executive, Financial and September 21, 2001
Tobin B. Prior Accounting Officer)
/s/ HOWARD B. KERZNER
--------------------------------- Vice President and Director September 21, 2001
Howard B. Kerzner
/s/ CHARLES D. ADAMO
--------------------------------- Vice President and Director September 21, 2001
Charles D. Adamo
/s/ GISELLE M. PYFROM
--------------------------------- Assistant Secretary September 21, 2001
Giselle M. Pyfrom
/s/ WILLIAM C. MURTHA
--------------------------------- Authorized Representative in the September 21, 2001
William C. Murtha United States
II-38
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in London, England, on the 21st day of
September, 2001.
SUN INTERNATIONAL NETWORK DATA LIMITED
By: /s/ TOBIN B. PRIOR
-----------------------------------------
Name: Tobin B. Prior
Title: PRESIDENT AND DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ TOBIN B. PRIOR President and Director (Principal
--------------------------------- Executive, Financial and September 21, 2001
Tobin B. Prior Accounting Officer)
/s/ HOWARD B. KERZNER
--------------------------------- Vice President and Director September 21, 2001
Howard B. Kerzner
/s/ CHARLES D. ADAMO
--------------------------------- Vice President and Director September 21, 2001
Charles D. Adamo
/s/ GISELLE M. PYFROM
--------------------------------- Assistant Secretary September 21, 2001
Giselle M. Pyfrom
/s/ WILLIAM C. MURTHA
--------------------------------- Authorized Representative in the September 21, 2001
William C. Murtha United States
II-39
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Paradise Island, The Bahamas, on the
21st day of September, 2001.
SUN INTERNATIONAL DEVELOPMENT (TIMESHARE)
LIMITED
By: /s/ JAMES BOOCHER
-----------------------------------------
Name: James Boocher
Title: PRESIDENT AND DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ JAMES BOOCHER President and Director (Principal
--------------------------------- Executive, Financial and September 21, 2001
James Boocher Accounting Officer)
/s/ HOWARD B. KERZNER
--------------------------------- Director September 21, 2001
Howard B. Kerzner
/s/ CHARLES D. ADAMO
--------------------------------- Secretary and Director September 21, 2001
Charles D. Adamo
/s/ GISELLE M. PYFROM
--------------------------------- Assistant Secretary September 21, 2001
Giselle M. Pyfrom
/s/ WILLIAM C. MURTHA
--------------------------------- Authorized Representative in the September 21, 2001
William C. Murtha United States
II-40
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in London, England, on the 21st day of
September, 2001.
SUNONLINE (IOM) LIMITED
By: /s/ TOBIN B. PRIOR
-----------------------------------------
Name: Tobin B. Prior
Title: DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ MILES BENHAM
--------------------------------- Secretary September 21, 2001
Miles Benham
/s/ TOBIN B. PRIOR
--------------------------------- Director (Principal Executive, September 21, 2001
Tobin B. Prior Financial and Accounting Officer)
/s/ HOWARD B. KERZNER Director September 21, 2001
---------------------------------
/s/ C. LARSON
--------------------------------- Director September 21, 2001
C. Larson
/s/ WILLIAM C. MURTHA
--------------------------------- Authorized Representative in the September 21, 2001
William C. Murtha United States
II-41
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Hamilton, Bermuda, on the 21st day of
September, 2001.
SUN HOTELS INTERNATIONAL (BERMUDA) LIMITED
By: /s/ DONALD H. MALCOLM
-----------------------------------------
Name: Donald H. Malcolm
Title: PRESIDENT AND DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ DONALD H. MALCOLM President and Director (Principal
--------------------------------- Executive, Financial and September 21, 2001
Donald H. Malcolm Accounting Officer)
/s/ NICHOLAS TROLLOPE
--------------------------------- Vice President and Director September 21, 2001
Nicholas Trollope
/s/ HOWARD B. KERZNER
--------------------------------- Director September 21, 2001
Howard B. Kerzner
/s/ WAYNE MORGAN
--------------------------------- Secretary September 21, 2001
Wayne Morgan
/s/ I.S. OUTERBRIDGE
--------------------------------- Assistant Secretary September 21, 2001
I.S. Outerbridge
/s/ WILLIAM C. MURTHA
--------------------------------- Authorized Representative in the September 21, 2001
William C. Murtha United States
II-42
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Bucks, England, on the 21st day of
September, 2001.
SUN INTERNATIONAL FINANCE LIMITED
By: /s/ SOLOMON KERZNER
-----------------------------------------
Name: Solomon Kerzner
Title: DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ SOLOMON KERZNER President and Director (Principal
--------------------------------- Executive, Financial and September 21, 2001
Solomon Kerzner Accounting Officer)
--------------------------------- Secretary September 21, 2001
STC International Limited
/s/ WILLIAM C. MURTHA
--------------------------------- Authorized Representative in the September 21, 2001
William C. Murtha United States
II-43
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in St. Peter Port, Guernsey, on the 21st
day of September, 2001.
ABERDEEN MANAGEMENT LIMITED
By: /s/ JOHN R. ALLISON
-----------------------------------------
Name: John R. Allison
Title: DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ JOHN R. ALLISON President and Director (Principal
--------------------------------- Executive, Financial and September 21, 2001
John R. Allison Accounting Officer)
/s/ J.C. ROWE
--------------------------------- Director September 21, 2001
J.C. Rowe
/s/ J.E. THOMAS
--------------------------------- Director September 21, 2001
J.E. Thomas
/s/ C. MCGREGOR
--------------------------------- Secretary September 21, 2001
Cosign Limited
/s/ WILLIAM C. MURTHA
--------------------------------- Authorized Representative in the September 21, 2001
William C. Murtha United States
II-44
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in London, England, on the 21st day of
September, 2001.
SUN VACANCES SA
By: /s/ ROGER H. WHARTON
-----------------------------------------
Name: Roger H. Wharton
Title: PRESIDENT AND DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ ROGER H. WHARTON President and Director (Principal
--------------------------------- Executive, Financial and September 21, 2001
Roger H. Wharton Accounting Officer)
/s/ GUY ZEKRI
--------------------------------- Director Generale and Director September 21, 2001
Guy Zekri
/s/ ROGER DARMON
--------------------------------- Director September 21, 2001
Roger Darmon
/s/ WILLIAM C. MURTHA
--------------------------------- Authorized Representative in the September 21, 2001
William C. Murtha United States
II-45
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Curacao, Netherlands Antilles, on the
21st day of September, 2001.
BIRBO NV
By: TMF (Netherlands Antilles) N.V.
By: /s/ R. A. BOELENS
-----------------------------------------
Name: R. A. Boelens
Title: MANAGING DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ R. A. BOELENS President and Director (Principal
--------------------------------- Executive, Financial and September 21, 2001
R. A. Boelens Accounting Officer)
/s/ WILLIAM C. MURTHA
--------------------------------- Authorized Representative in the September 21, 2001
William C. Murtha United States
II-46
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Willemstad, Curacao, N. Antilles on
the 21st day of September, 2001.
SUN HOTELS INTERNATIONAL MANAGEMENT N.V.
By: Curacao Corporation Company NV
By: /s/ M.H. GOVAARD
-----------------------------------------
Name: M.H. Govaard
Title: ATTORNEY-IN-FACT A
By: /s/ M.L.M. DE ROOY
-----------------------------------------
Name: M.L.M. de Rooy
Title: ATTORNEY-IN-FACT B
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ M. H. GOVAARD/M.L.M. DE ROOY Sole Managing Director (Principal
--------------------------------- Principal Executive, Financial and September 21, 2001
Curacao Corporation Company NV Accounting Officer)
/s/ WILLIAM C. MURTHA
--------------------------------- Authorized Representative in the September 21, 2001
William C. Murtha United States
II-47
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Amsterdam, The Netherlands, on the
21st day of September, 2001.
PURPOSEFUL BV
By: Trust International Management (T.I.M.)
B.V.
By: /s/ M. ROSENKOTTER / S. BEELER
-----------------------------------------
Name: M. Rosenkotter / S. Beeler
Title: ATTORNEYS-IN-FACT
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ M. ROSENKOTTER / S. BEELER
--------------------------------- Sole Director (Principal Executive, September 21, 2001
Trust International Management (T.I.M.) BV Financial and Accounting Officer)
/s/ WILLIAM C. MURTHA
--------------------------------- Authorized Representative in the September 21, 2001
William C. Murtha United States
II-48
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in London, England, on the 21st day of
September, 2001.
SUN INTERNATIONAL MARKETING (UK) LTD.
By: /s/ ROGER H. WHARTON
-----------------------------------------
Name: Roger H. Wharton
Title: DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ ROGER H. WHARTON President and Director (Principal
--------------------------------- Executive, Financial and September 21, 2001
Roger H. Wharton Accounting Officer)
/s/ WILLIAM C. MURTHA
--------------------------------- Authorized Representative in the September 21, 2001
William C. Murtha United States
II-49
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in London, England, on the 21st day of
September, 2001.
SUN INTERNATIONAL NETWORK SERVICES LIMITED
By: /s/ TOBIN B. PRIOR
-----------------------------------------
Name: Tobin B. Prior
Title: DIRECTOR
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John R. Allison, Charles D. Adamo and William C. Murtha, and each of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all (1) amendments (including post-effective
amendments) and additions to this Registration Statement and (2) Registration
Statements, and any and all amendments thereto (including post-effective
amendments), relating to the offering contemplated pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ TOBIN B. PRIOR
--------------------------------- Director (Principal Executive, September 21, 2001
Tobin B. Prior Financial and Accounting Officer)
/s/ MARK BIEGEL
--------------------------------- Director September 21, 2001
Mark Biegel
/s/ WILLIAM C. MURTHA
--------------------------------- Authorized Representative in the September 21, 2001
William C. Murtha United States
II-50
EXHIBIT INDEX
EXHIBIT
NUMBERS DESCRIPTION INCORPORATION BY REFERENCE TO
--------------------- --------------------------------------------- ----------------------------------------
3.1 Amended and Restated Memorandum of Exhibit 3.1 to Registration Statement on
Association of Sun International Form F-4, File No. 333-15409, filed on
November 7, 1996
3.2 Restated Articles of Association of Sun Exhibit 1 to Form 20-F of Sun
International dated as of June 26, 2001 International, filed on July 2, 2001
3.3 Restated Certificate of Incorporation, as Exhibit 3.3 to Registration Statement on
amended, of Sun International North America, Form F-4, File No. 33-23665, filed on
Inc. March 20, 1997
3.4 Amended and Restated By-Laws of Sun Exhibit 3.4 to Registration Statement on
International North America, Inc. Form F-4, File No. 33-23665, filed on
March 20, 1997
4.1 Indenture dated as of August 14, 2001, among Exhibit 2(c) to Form 6-K of Sun
Sun International and SINA as Issuers, the International, filed on August 24, 2001
Guarantors party thereto and The Bank of New
York, as Trustee
4.2 Supplemental Indenture dated as of Exhibit 99(a) to Form 6-K of Sun
September 19, 2001 to Indenture dated as of International, filed on September 20,
August 14, 2001 2001
4.3 Form of 8 7/8% Senior Subordinated Note due Exhibit 2(c) to Form 6-K of Sun
2011 International, filed on August 24, 2001
4.4 Form of Guarantee with respect to 8 7/8% Exhibit 2(c) to Form 6-K of Sun
Senior Subordinated Note due 2011 International, filed on August 24, 2001
4.5 Registration Rights Agreement, dated as of Exhibit 2(b) to Form 6-K of Sun
August 14, 2001, among Sun International and International, filed on August 24, 2001
SINA as Issuers, the Guarantors party thereto
and Deutsche Banc Alex. Brown Inc., Bear,
Stearns & Co. Inc., CIBC World Markets
Corp., Banc of America Securities LLC, Wells
Fargo Brokerage Services, LLC, Fleet
Securities, Inc. and The Royal Bank of
Scotland plc, as Initial Purchasers
4.6 Form of Indenture dated as of March 10, 1997, Exhibit 4(e)(2) to Form 10-K405 of SINA,
among Sun International and SINA as Issuers, filed on March 20, 1997
the Guarantors party thereto and the Bank of
New York, as Trustee
4.7 Form of 9.000% Senior Subordinated Note due Exhibit 4(e)(2) to Form 10-K405 of SINA,
2007 filed on March 20, 1997
4.8 Form of Exchange Note with respect to 9.000% Exhibit 4.6 to Registration Statement on
Senior Subordinated Note due 2007 Form F-4, File No. 333-23665, filed on
March 20, 1997
4.9 Form of Guarantee with respect to 9.000% Exhibit 4(e)(2) to Form 10-K405 of SINA,
Senior Subordinated Note due 2007 filed on March 20, 1997
4.10 Supplemental Indenture dated as of July 23, Exhibit 99(a) to Form 6-K of Sun
2001 to Indenture dated as of March 10, 1997 International, filed on August 3, 2001
4.11 Second Supplemental Indenture dated as of Exhibit 99(b) to Form 6-K of Sun
September 19, 2001 to Indenture dated as of International, filed on September 20,
March 10, 1997 2001
EXHIBIT
NUMBERS DESCRIPTION INCORPORATION BY REFERENCE TO
--------------------- --------------------------------------------- ----------------------------------------
4.12 Registration Rights Agreement dated as of Exhibit 4(e)(3) to Form 10-K405 of SINA,
March 10, 1997 among Sun International and filed on March 20, 1997
SINA, as Issuers, the Guarantors party
thereto and the Initial Purchasers party
thereto
4.13 Form of Indenture dated as of December 10, Exhibit 4.1 to Registration Statement on
1997, among Sun International and SINA, as Form F-3, File No. 333-41127, filed on
Issuers, the Guarantors party thereto and the November 26, 1997
Bank of New York, as Trustee
4.14 Form of 8.625% Senior Subordinated Note due Exhibit 4.1 to Registration Statement on
2007 Form F-3, File No. 333-41127, filed on
November 26, 1997
4.15 Form of Guarantee with respect to 8.625% Exhibit 4.1 to Registration Statement on
Senior Subordinated Note due 2007 Form F-3, File No. 333-41127, filed on
November 26, 1997
4.16 Supplemental Indenture dated as of July 23, Exhibit 99(b) to Form 6-K of Sun
2001 to Indenture dated as of December 10, International, filed on August 3, 2001
1997
4.17 Second Supplemental Indenture dated as of Exhibit 99(c) to Form 6-K of Sun
September 19, 2001 to Indenture dated as of International, filed on September 20,
December 10, 1997 2001
4.18 Third Amended and Restated Revolving Credit Exhibit 99(b)(1) to Tender Offer
Agreement dated as of November 1, 1999, among Statement of Sun International, File
Sun International, Sun International Bahamas No. 005-48645, filed on June 26, 2000
Limited ("SIB"), Resorts International
Hotel, Inc. ("RIH") and Sun International
Nevada, Inc. ("Sun Nevada"), as the
Borrowers and Guarantors, The Bank of Nova
Scotia, as the Administrative Agent, and
Various Financial Institutions, as the
Lenders
4.19 First Amendment to the Third Amended and Exhibit 99(b)(2) to Tender Offer
Restated Revolving Credit Agreement dated as Statement of Sun International, File
of June 13, 2000 among SIB, RIH, and Sun No. 005-48645, filed on June 26, 2000
Nevada, as the Borrowers and Guarantors, The
Bank of Nova Scotia, as the Administrative
Agent, and Various Financial Institutions, as
the Lenders
4.20 Second Amendment to the Third Amended and Exhibit 4.6 to Form 20-F of Sun
Restated Revolving Credit Agreement dated as International, filed on July 2, 2001
of June 13, 2000 among SIB, RIH, and Sun
Nevada, as the Borrowers and Guarantors, The
Bank of Nova Scotia, as the Administrative
Agent, and Various Financial Institutions, as
the Lenders
5.1 Opinion of Charles D. Adamo, Esq. Filed herewith
5.2 Opinion of Giselle M. Pyfrom, Esq. Filed herewith
10.1 Purchase Agreement dated as of October 30, Exhibit 10 to Form 10-Q of SINA, filed
2000, among SINA, as parent, GGRI, Inc., as on November 14, 2000
Seller, and Colony Capital LLC ("Colony"), as
Buyer
10.2 Promissory Note between Colony and SINA dated Exhibit 2 to Form 6-K of Sun
as of April 25, 2001 International, filed on May 3, 2001
EXHIBIT
NUMBERS DESCRIPTION INCORPORATION BY REFERENCE TO
--------------------- --------------------------------------------- ----------------------------------------
10.3 Termination Agreement among Sheraton Desert Exhibit 2 to Form 6-K of Sun
Inn Corporation, Starwood Hotels and Resorts International, filed on March 17, 2000
Worldwide Inc., Sheraton Gaming Corporation,
Sun International and Sun Nevada dated as of
February 29, 2000, terminating the Asset and
Land Purchase Agreement among the parties
dated as of May 17, 1999
10.4 Trading Cove New York, LLC ("TCNY") Exhibit 4.7 to Form 20-F of Sun
Development Services Agreement dated as of International, filed on July 2, 2001
March 20, 2001 among the Stockbridge-Munsee
Tribe, the Stockbridge-Munsee Tribal Gaming
Authority, TCNY, SINA and Waterford Gaming
Group, LLC
10.5 Management Agreement between the Government Exhibit 3.2 to Form 20-F of Sun
of Dubai, Sun International Management International, filed on June 30, 1999
Limited and Sun International dated as of
June 5, 1998
10.6 Development Services Agreement dated Exhibit 2.1 to Form 20-F/A of Sun
February 7, 1998 between the Mohegan Tribal International, filed on September 3,
Gaming Authority and Trading Cove Associates 1998
10.7 Relinquishment Agreement dated February 7, Exhibit 2.2 to Form 20-F/A of Sun
1998, between the Mohegan Tribal Gaming International, filed on September 3,
Authority and Trading Cove Associates 1998
10.8 Registration Rights and Governance Agreement Exhibit C to Schedule 13D of Sun
dated as of July 3, 2001, by and among Sun International, filed on July 13, 2001
International, Sun International Investments
Limited, World Leisure Group Limited, Kersaf
Investments Limited, Caledonia Investments
PLC, Mangalitsa Limited, Cement Merchants SA,
Rosegrove Limited, Royale Resorts Holdings
Limited and Sun International Inc.
10.9 Omnibus Agreement dated as of July 3, 2001, Filed herewith
by and among Sun International, Sun
International Investments Limited, World
Leisure Group Limited, Kersaf Investments
Limited, Caledonia Investments PLC, Rosegrove
Limited, Royale Resorts Holdings Limited,
Royale Resorts International Limited, Sun
International Inc., Sun Hotels International,
Sun Hotels Limited, World Leisure Investments
Limited, Solomon Kerzner, Peter Buckley,
Derek Aubrey Hawton, Sun International
Management Limited (a British Virgin Islands
company), Cement Merchants SA, Sun
International Management Limited (a Swiss
company), Sun International Management (UK)
Limited, Hog Island Holdings Limited and
Mangalitsa Limited
EXHIBIT
NUMBERS DESCRIPTION INCORPORATION BY REFERENCE TO
--------------------- --------------------------------------------- ----------------------------------------
10.10 Supplemental Agreement to the Original Exhibit A to Schedule 13D of Sun
Shareholders' Agreement and to the Rosegrove International, filed on July 13, 2001
Shareholders Agreement dated as of July 3,
2001, by and among Kersaf Investments
Limited, Sun International Inc., Sun Hotels
International, Royale Resorts Holdings
Limited, World Leisure Investments Limited,
Sun Hotels Limited, World Leisure Group
Limited, Royale Resorts International
Limited, Caledonia Investments PLC, Solomon
Kerzner, Sun International Management Limited
(a British Virgin Islands company), Rosegrove
Limited, Sun International Management Limited
(a Swiss company), Mangalitsa Limited and Hog
Island Holdings Limited
10.11 Irrevocable Proxy Agreement dated as of Exhibit B to Schedule 13D of Sun
July 3, 2001, by and among Sun International, filed on July 13, 2001
International, Sun International Investments
Limited, World Leisure Group Limited, Kersaf
Investments Limited, Caledonia Investments
PLC, Mangalitsa Limited, Cement Merchants SA,
Rosegrove Limited, Royale Resorts Holdings
Limited and Sun International Inc.
10.12 Trade Name and Trademark Agreement dated as Filed herewith
of July 3, 2001, by and among Sun
International, Sun International Investments
Limited and World Leisure Group Limited, as
Assignors, and Sun International Management
Limited, as Assignee
10.13 Promissory Note dated July 3, 2001 between Filed herewith
Royale Resorts Holdings Limited, as Maker,
and Sun International, as Payee
10.14 Stock Pledge Agreement dated as of July 3, Filed herewith
2001, between Royale Resorts Holdings
Limited, as Pledgor, and Sun International
11.1 Statement regarding computation of earnings Note 2 of the Notes to the Consolidated
per share Financial Statements to Form 20-F of Sun
International, filed on July 2, 2001
12.1 Statement regarding computation of ratios Filed herewith
21.1 Subsidiaries of Sun International Filed herewith
21.2 Subsidiaries of SINA Filed herewith
23.1 Consent of Arthur Andersen LLP Filed herewith
23.2 Consent of Charles D. Adamo, Esq. (contained Filed herewith
in Exhibit 5.1)
23.2 Consent of Giselle M. Pyfrom, Esq. (contained Filed herewith
in Exhibit 5.1)
EXHIBIT
NUMBERS DESCRIPTION INCORPORATION BY REFERENCE TO
--------------------- --------------------------------------------- ----------------------------------------
24 Powers of Attorney (included on the signature Filed herewith
pages hereto)
25 Statement of Eligibility and Qualification Filed herewith
under the Trust Indenture Act of 1939 of The
Bank of New York, as Trustee, on Form T-1,
relating to the 8 7/8% Senior Subordinated
Notes due 2011 (including Exhibit 7 to Form
T-1)
99.1 Form of Letter of Transmittal Filed herewith
99.2 Form of Notice of Guaranteed Delivery Filed herewith
99.3 Form of Letter to Clients Filed herewith
99.4 Form of Letter to Brokers, Dealers, Filed herewith
Commercial Banks, Trust Companies and Other
Nominees
99.5 Form W-9 Filed herewith
EX-5.1
3
a2058552zex-5_1.txt
EXHIBIT 5.1
Exhibit 5.1
September 21, 2001
Sun International Hotels Limited
Sun International North America, Inc.
Atlantis
Coral Towers - Executive Office
Paradise Islands, The Bahamas
Sun International Hotels Limited
Sun International North America, Inc.
--------
8 7/8% Senior Subordinated Notes due 2011
--------
Form F-4 Registration Statement
Ladies and Gentleman:
I am General Counsel for Sun International Hotels Limited, a company
organized under the laws of the Commonwealth of The Bahamas (the "Company") and
for Sun International North America, Inc., a Delaware corporation ("SINA" and,
together with the Company, the "Issuers"), and as such have acted as counsel in
connection with the filing by the Company and SINA with the Securities and
Exchange Commision (the "Commission") of a registration statement on Form F-4
(the "Registration Statement") under the Securities Act of 1933 (the "Act")
relating to the proposed issuance (the "Exchange Offer"), in exchange for up to
$200,000,000 aggregate principal amount of the Issuer's 8 7/8% Senior
Subordinated Notes due 2011 (the "Old Notes"), of a like principal amount of
8 7/8% Senior Subordinated Notes due 2011 that are registered under the Act (the
"New Notes"). The New Notes are to be issued pursuant to the indenture dated
August 14, 2001 (the "Indenture"), among the Issuers, the guarantors party
thereto and The Bank of New York, as trustee (the "Trustee"). Capitalized terms
used herein and not otherwise defined shall have the meaning ascribed thereto in
the Indenture.
In that connection, I have examined originals, copies or certified
copies (or otherwise identified to my satisfaction) of such documents, corporate
records and other instruments as I have deemed necessary or appropriate for
purposes of this opinion, including the Indenture.
Based on the foregoing, I am of opinion as follows:
1. Each of the Indenture and the Registration Statement has been duly
authorized, executed and delivered by SINA and the subsidiaries listed on
Schedule I hereto (the "Non-Bahamian Guarantors") and, assuming due
authorization, execution and delivery thereof by the Trustee, the Indenture
constitutes a legal, valid and binding obligation of SINA and the Non-Bahamian
Guarantors in accordance with its terms (subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other similar
laws affecting creditors' rights generally from time to time in effect and to
general principles of equity, including concepts of materiality, reasonableness,
good faith and fair dealing, regardless of whether such enforceability is
considered in a proceeding in equity or at law).
2. The New Notes and the guarantees issued by the Non-Bahamian
Guarantors have been duly authorized by SINA and the Non-Bahamian Guarantors,
respectively, and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered in exchange for the Old Notes pursuant
to the Exchange Offer, will constitute legal, valid and binding obligations of
SINA and the Non-Bahamian Guarantors, enforceable against SINA and the
Non-Bahamian Guarantors in accordance with their terms and entitled to the
benefits of the Indenture (subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity, including concepts of materiality, reasonableness, good
faith and fair dealing, regardless of whether such enforceability is considered
in a proceeding in equity or at law). In expressing the opinion set forth in
this Paragraph 2, I have assumed that the form of the New Notes, including the
Guarantees, will conform to that included in the Indenture.
I hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement.
I am admitted to practice only in the State of New York and
express no opinion herein as to matters governed by any laws other than the
State of New York and the Federal laws of the United States of America. The
opinion is rendered to you solely for your benefit in connection with the
transactions referred to above and may not be relied upon by any other person,
firm or corporation without my prior written consent.
Very truly yours,
/s/ Charles D. Adamo
Charles D. Adamo
Executive Vice President--Corporate
Development and General Counsel
Schedule I
Non-Bahamian Guarantors
-------------------------
Subsidiary Jurisdiction of Organization
---------- ----------------------------
Sun International North America, Inc. Delaware
Sun International Management Limited British Virgin Islands
Sun Cove, Ltd. Connecticut
Sun International Nevada, Inc. Nevada
Sun International Resorts Inc. Florida
PIV, Inc. Florida
ISS, Inc. Florida
Sun International Marketing, Inc. Florida
Sun Cove California, Inc. Delaware
Sun Cove New York, Inc. Delaware
Sun International New York, Inc. New York
Sun International Development Group, Inc. New Jersey
Sunonline (IOM) Limited Isle of Man
Sun Hotels International (Bermuda) Limited Bermuda
Sun International Finance Limited British Virgin Islands
Aberdeen Management Limited Channel Islands
Sun Vacances SA France
Birbo NV Netherlands Antilles
Sun Hotels International Management NV Netherlands Antilles
Purposeful BV Netherlands
Sun International Marketing (UK) Ltd. United Kingdom
Sun International Network Services Limited United Kingdom
EX-5.2
4
a2058552zex-5_2.txt
EXHIBIT 5.2
Exhibit 5.2
September 21, 2001
Sun International Hotels Limited
Sun International North America, Inc.
Atlantis
Coral Towers - Executive Office
Paradise Islands, The Bahamas
Sun International Hotels Limited
Sun International North America, Inc.
--------
8 7/8% Senior Subordinated Notes due 2011
--------
Form F-4 Registration Statement
Ladies and Gentleman:
I am General Counsel for Sun International Hotels Limited, a company
organized under the laws of the Commonwealth of The Bahamas (the "Company")
and for Sun International North America, Inc., a Delaware corporation ("SINA"
and, together with the Company, the "Issuers"), and as such have acted as
counsel in connection with the filing by the Company and SINA with the
Securities and Exchange Commision (the "Commission") of a registration
statement on Form F-4 (the "Registration Statement") under the Securities Act
of 1933 (the "Act") relating to the proposed issuance (the "Exchange Offer"),
in exchange for up to $200,000,000 aggregate principal amount of the Issuer's
8 7/8% Senior Subordinated Notes due 2011 (the "Old Notes"), of a like
principal amount of 8 7/8% Senior Subordinated Notes due 2011 that are
registered under the Act (the "New Notes"). The New Notes are to be issued
pursuant to the indenture dated August 14, 2001 (the "Indenture"), among the
Issuers, the guarantors party thereto and The Bank of New York, as trustee
(the "Trustee"). Capitalized terms used herein and not otherwise defined
shall have the meaning ascribed thereto in the Indenture.
In that connection, I have examined originals, copies or certified
copies (or otherwise identified to my satisfaction) of such documents, corporate
records and other instruments as I have deemed necessary or appropriate for
purposes of this opinion, including the Indenture.
Based on the foregoing, I am of opinion as follows:
1. Each of the Indenture and the Registration Statement has been duly
authorized, executed and delivered by the Company and the subsidiaries listed on
Schedule I hereto (the "Bahamian Guarantors") and, assuming due authorization,
execution and delivery thereof by the Trustee, the Indenture constitutes a
legal, valid and binding obligation of the Company and the Bahamian Guarantors
in accordance with its terms (subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws affecting
creditors' rights generally from time to time in effect and to general
principles of equity, including concepts of materiality, reasonableness, good
faith and fair dealing, regardless of whether such enforceability is considered
in a proceeding in equity or at law).
2. The New Notes and the guarantees issued by the Bahamian
Guarantors have been duly authorized by the Issuers and the Bahamian
Guarantors, respectively, and, when executed and authenticated in accordance
with the provisions of the Indenture and delivered in exchange for the Old
Notes pursuant to the Exchange Offer, will constitute legal, valid and
binding obligations of the Company and the Bahamian Guarantors, enforceable
against the Company and the Bahamian Guarantors in accordance with their
terms and entitled to the benefits of the Indenture (subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
other laws affecting creditors' rights generally from time to time in effect
and to general principles of equity, including concepts of materiality,
reasonableness, good faith and fair dealing, regardless of whether such
enforceability is considered in a proceeding in equity or at law). In
expressing the opinion set forth in this Paragraph 2, I have assumed that the
form of the New Notes, including the Guarantees, will conform to that
included in the Indenture.
I hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement.
I am admitted to practice only in the Commonwealth of The
Bahamas and express no opinion herein as to matters governed by any laws other
than the Commonwealth of The Bahamas. The opinion is rendered to you solely for
your benefit in connection with the transactions referred to above and may not
be relied upon by any other person, firm or corporation without my prior written
consent.
Very truly yours,
Giselle M. Pyfrom
Senior Vice President and General Counsel
Schedule I
Bahamian Guarantors
-------------------
Subsidiary Jurisdiction of Organization
---------- ----------------------------
Sun International Bahamas Limited Commonwealth of The Bahamas
Paradise Acquisitions Limited Commonwealth of The Bahamas
Paradise Island Limited Commonwealth of The Bahamas
Paradise Enterprises Limited Commonwealth of The Bahamas
Island Hotel Company Limited Commonwealth of The Bahamas
Paradise Beach Inn Limited Commonwealth of The Bahamas
Sun International Timeshare Limited Commonwealth of The Bahamas
Paradise Island Futures Limited Commonwealth of The Bahamas
Sun International Development Limited Commonwealth of The Bahamas
Paradise Security Services Limited Commonwealth of The Bahamas
Sunonline Limited Commonwealth of The Bahamas
Bahamas e-Trading Limited Commonwealth of The Bahamas
Sun International Network Data Limited Commonwealth of The Bahamas
Sun International Development (Timeshare) Limited Commonwealth of The Bahamas
EX-10.9
5
a2058552zex-10_9.txt
EXHIBIT 10.9
EXHIBIT 10.9
OMNIBUS AGREEMENT
OMNIBUS AGREEMENT, dated as of July 3, 2001 (this "AGREEMENT"), by
and among Sun International Hotels Limited, a company incorporated under the
laws of The Bahamas (the "COMPANY"), Sun International Investments Limited, a
company incorporated under the laws of the British Virgin Islands ("SIIL"),
World Leisure Group Limited, a company incorporated under the laws of the
British Virgin Islands ("WLG"), Kersaf Investments Limited, a company
incorporated under the laws of the Republic of South Africa ("KERSAF"),
Caledonia Investments PLC, a company incorporated under the laws of England
("CALEDONIA"), Rosegrove Limited, a company incorporated under the laws of the
British Virgin Islands ("ROSEGROVE"), Royale Resorts Holdings Limited, a company
incorporated under the laws of Bermuda ("RRHL"), Mangalitsa Limited, a company
incorporated under the laws of The Bahamas ("MANGALITSA"), Cement Merchants SA,
a company incorporated under the laws of Panama ("CMS"), Sun International Inc.,
a company incorporated under the laws of the Republic of Panama ("SINC"), Sun
Hotels International, a company incorporated under the laws of England ("SHI"),
Royale Resorts International Limited, a company incorporated under the laws of
Bermuda ("RRIL"), Sun Hotels Limited, a company incorporated under the laws of
Bermuda ("SHL"), World Leisure Investments Limited (formerly Royale Resorts
Limited), a company incorporated under the laws of Bermuda ("WLI"), Hog Island
Holdings Limited, a company incorporated under the laws of Bermuda ("HIHL"),
Solomon Kerzner, as an individual ("SK"), Peter Buckley, an individual ("PB"),
Derek Aubrey Hawton, an individual ("DAH"), Sun International Management
Limited, a company incorporated under the laws of the British Virgin Islands
("SIMLB"), Sun International Management (UK) Limited, a company incorporated
under the laws of England ("SIMLC"), and Sun International Management Limited, a
company incorporated under the laws of Switzerland ("SIMLA" and together with
WLG, Kersaf, Caledonia, Rosegrove, RRHL, Mangalitsa, CMS, SINC, SHI, RRIL, SHL,
WLI, SIMLB, SIMLC, HIHL and SK, the "SIIL INVESTORS").
R E C I T A L S
- - - - - - - -
WHEREAS, each of the SIIL Investors (other than CMS, HIHL,
Mangalitsa, SIMLB and SIMLC) is a party to that certain Subscription and
Shareholders' Agreement, dated as of October 11, 1993 (the "SIIL AGREEMENT"),
relating to SIIL;
WHEREAS, each of SIIL and the Company is a party to that certain
Combination and Restructuring Agreement, dated as of December 12, 1994 (the
"SIHL AGREEMENT");
WHEREAS, each of Mangalitsa, HIHL and RRHL, among others, are a
party to that certain Shareholders' Agreement, dated as of May 3, 1994 (as
amended), relating to Rosegrove (the "ROSEGROVE AGREEMENT" and together with the
SIIL Agreement and the SIHL Agreement, the "EXISTING AGREEMENTS");
WHEREAS, the SIIL Investors shall arrange for the winding-up and
dissolution of SIIL, and accordingly the distribution (the "DISTRIBUTION") of
the shares, par value $0.001 per share, of the Company to (a) the shareholders
of SIIL, WLG (or a wholly-owned subsidiary thereof) and Rosegrove, and (b) then
by Rosegrove to its shareholders, RRHL (or a wholly-owned subsidiary thereof)
and Mangalitsa;
WHEREAS, in connection with the execution and delivery of this
Agreement, certain of the parties hereto shall enter into the following
additional agreements (collectively, the "ADDITIONAL AGREEMENTS"):
(a) a Supplemental Agreement to the SIIL Agreement and the Rosegrove
Agreement, dated as of the date hereof, by and among the parties thereto, (the
"SUPPLEMENTAL AGREEMENT"), with respect to the Distribution and certain other
matters; and
(b) a Registration Rights and Governance Agreement by and among the
Company, SIIL and certain of the SIIL Investors (the "GOVERNANCE AGREEMENT"),
with respect to (i) the transfer and acquisition of shares of the Company, (ii)
governance arrangements in respect of the board of directors of the Company and
(iii) providing each of such SIIL Investors and their Affiliates (as defined
herein) with certain registration rights.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINED TERMS. For the purposes of this Agreement, the
following terms shall have the following meanings:
"AFFILIATE" means, with respect to any Person, any other Person
controlling, controlled by or under direct or indirect common control with such
Person. For the purposes of this Agreement, "CONTROL," when used with respect to
any specified Person, shall mean, as determined with respect to each Person
pursuant to the laws of the jurisdiction where such Person is organized, the
power to direct the management and policies of such Person, directly or
indirectly, whether through ownership of voting securities, by contract or
otherwise; and the terms "CONTROLLING" and "CONTROLLED" shall have meanings
correlative to the foregoing.
"AUDITOR" shall be a mutually acceptable independent accounting firm
having knowledge and experience in the hotel, resort and casino industries.
"CALEDONIA GROUP" means, as of any date, Caledonia and all of its
Affiliates (but excluding the Company), as of such time.
2
"CMS GROUP" means, as of any date, CMS and all of its Affiliates as
of such time.
"COMMISSION" means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"COMPANY EVENT" shall have the meaning ascribed to it in the
Governance Agreement.
"CONFIDENTIAL INFORMATION" means all records, information, reports
and data concerning the RRHL Egypt Entity or the Egypt Project, whether oral or
written, that is furnished to the Company or the Company's representatives, by
or on behalf of the RRHL Egypt Entity including, without limitation, information
furnished pursuant to Sections 4.4, 4.5 and 4.6 of this Agreement.
Notwithstanding the previous sentence, the term "Confidential Information" shall
not include information that (i) is or becomes generally available to the public
other than as a result of a disclosure by the Company or the Company's
representatives in violation of this Agreement; or (ii) becomes available to the
Company on a non-confidential basis from a source other than the RRHL Egypt
Entity, which the Company reasonably believes is under no obligation of
confidentiality to the RRHL Egypt Entity.
"CONTROLLED AFFILIATE" shall mean with respect to any Person, any
Affiliate thereof which is controlled by such Person.
"EGYPT PROJECT" means all phases of the proposed integrated resort
development at Port Ghalib located on the Red Sea in Egypt as contemplated under
the Egypt Project Agreements and any expansions related thereto.
"EGYPT PROJECT AGREEMENTS" shall mean those agreements relating to
RRHL's involvement with the Egypt Project, substantially in the form attached
hereto as Exhibit D, and any other agreement or arrangement pursuant to which
any member of the RRHL Group is entitled to receive revenue, fees, income or any
other form of consideration relating to its involvement with the Egypt Project,
including any renewals or extensions thereof.
"GAAP" means generally accepted accounting principles based on
international accounting standards, consistently applied.
"GROSS REVENUE" means, for any period, all revenue, fees, income or
other form of consideration as generated by RRHL or any of its Affiliates from
the development and management of the Egypt Project for such period as
calculated in accordance with GAAP and calculated in United States Dollars
(converted into United States Dollars at prevailing exchange rates, if
necessary), after making provision for any withholding or deduction required
pursuant to Egyptian law, including any Egyptian income tax liability that is
assessed in the event that the payment pursuant to Section 4.2(a) should not be
allowed as a deduction for income tax purposes.
3
"GROUP" means any of the WLG Group, the Kersaf Group, the Caledonia
Group, the CMS Group or the RRHL Group.
"KERSAF GROUP" means, as of any date, Kersaf and all of its
Affiliates (but excluding, for the avoidance of doubt, the Company), as of such
time (including, as of the date hereof, RRHL).
"MINIMUM YEAR ONE SALE" shall have the meaning ascribed to it in the
Governance Agreement.
"MINIMUM YEAR ONE SALE DATE" shall have the meaning ascribed to it
in the Governance Agreement.
"PERSON" means any individual, firm, partnership, company, joint
stock company, corporation, partnership, trust, estate, incorporated or
unincorporated association, syndicate, joint venture or organization, or any
government or any department, agency or other political subdivision thereof, or
any other entity, and shall include any successor of any such entity.
"PRIOR REGISTRATION DELAY" shall have the meaning ascribed to it in
the Governance Agreement.
"RRHL EGYPT ENTITY" means the member of the RRHL Group which is
entitled to receive revenue, fees, income and other forms of consideration
relating to its involvement with the Egypt Project, and is designated by RRHL in
accordance with Section 4.3(a).
"RRHL GROUP" means, as of any date, RRHL and all of its Affiliates
(excluding for the avoidance of doubt, the Company), as of such time.
"REALIZATION EVENT" means:
(a) any event or circumstance as a result of which the RRHL Egypt
Entity ceases to be, directly or indirectly, a Controlled Affiliate of
Kersaf;
(b) any event or circumstance which shall affect, directly or
indirectly, the right of the RRHL Egypt Entity to receive Gross Revenue
including, but not limited to:
(i) the termination of any Egypt Project Agreements; or
(ii) the sale, assignment or transfer by RRHL or any of its
Controlled Affiliates of all or part of any Egypt Project Agreements
or any interest therein to any Person (other than a member of the
RRHL Group); or
4
(iii) the sale or transfer by RRHL or any of its Controlled
Affiliates of all or any part of the Egypt Project or any interest
therein to any Person (other than a member of the RRHL Group); or
(c) Kersaf ceasing to own, directly or indirectly, a majority of
each class of equity securities in the RRHL Egypt Entity or any of the
Controlled Affiliates of the RRHL Egypt Entity.
"SECURITIES ACT" means the United States Securities Act of 1933 or
any successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect, from time to time.
"SENIOR EMPLOYEE" means any person employed by the Company, the WLG
Group, or the Kersaf Group as of the date hereof or hired after the date hereof
whose total salary per annum is greater than or equal to one hundred fifty
thousand United States Dollars ($150,000).
"SHARES" means (a) the ordinary shares, par value $0.001 per share,
of the Company (including any dividends in kind thereon), or (b) any other class
of stock resulting from any reclassification, exchange, substitution,
combination, stock split or reverse stock split, including in connection with
any merger or otherwise, of such ordinary shares.
"UNDERWRITER OUT" shall have the meaning ascribed to it in the
Governance Agreement.
"WLG GROUP" means, as of any date, WLG and all of its Affiliates
(but excluding the Company), as of such time.
Section 1.2 OTHER DEFINED TERMS. As used herein, the following terms
shall have the meanings ascribed to them in the Section of this Agreement
opposite each such term:
Term Section
---- -------
Additional Agreements Recitals
Agreement Preamble
Assignment 2.1
Caledonia Preamble
Claims 5.1(a)
CMS Preamble
Company Preamble
Confidential Information 4.7
Covered Territory 3.1(a)
5
Term Section
---- -------
Distribution Recitals
Dispute 5.1(a)
Existing Agreements Recitals
Governance Agreement Recitals
Investment Bank 4.2(b)
Kersaf Preamble
Management Fee Payment 4.2(a)
Mangalitsa Preamble
PB Preamble
Promissory Note 4.1(b)
Realization Event Payment 4.2(b)
Released Parties 5.1(a)
Releasing Parties 5.1(a)
Rosegrove Preamble
Rosegrove Agreement Recitals
RRHL Preamble
RRIL Preamble
RRL Preamble
SHI Preamble
SHL Preamble
SIHL Agreement Recitals
SIIL Preamble
SIIL Agreement Recitals
SIIL Investors Preamble
SIMLA Preamble
SINC Preamble
SK Preamble
Supplemental Agreement Recitals
WLG Recitals
ARTICLE II
ASSIGNMENT OF NAME
Section 2.1 ASSIGNMENT OF NAME. The Company shall, and shall cause
its Controlled Affiliates to, WLG shall, and shall cause its Affiliates to, and
SIIL shall,
6
enter into the Trade Name and Trademark Agreement (contemporaneously with the
execution of this Agreement) in the form of Exhibit A attached hereto (the
"ASSIGNMENT").
ARTICLE III
NON-COMPETITION; NON-SOLICITATION
Section 3.1 COVENANT NOT TO COMPETE.
(a) In consideration of the transactions contemplated by this
Agreement and the Additional Agreements and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
following the date hereof and for a period terminating on the earliest of (i)
the date on which the Kersaf Group owns less than seven and one half percent
(7.5%) in the aggregate of the Shares outstanding on the date hereof, (ii) the
consummation of the Minimum Year One Sale and (iii) June 30, 2002 if the Minimum
One Year Sale Date has been extended because of any Underwriter Out, Company
Event, Prior Registration Delay or pursuant to the last sentence of Section 5.5
of the Governance Agreement, Kersaf shall not, and shall cause its Controlled
Affiliates not to, directly or indirectly engage in any hotel, resort or casino
business competitive with the business of the Company, as now conducted, in any
part of the world other than the mainland of the continent of Africa (the
"COVERED TERRITORY"). Provided that the foregoing covenant shall not prohibit
Kersaf and any of its Affiliates from (i) the holding and ownership of any
Shares and (ii) purchasing, selling or owning five percent (5%) or less in the
aggregate of the securities of a publicly traded corporation competitive with
the Company.
(b) In consideration of the transactions contemplated by this
Agreement and the Additional Agreements and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, as
long as the obligations contained in Section 3.1(a) remain outstanding, each of
the Company and its Controlled Affiliates, WLG and its Affiliates, and Caledonia
and its Affiliates, shall not directly or indirectly engage in any hotel, resort
or casino business in the mainland of the continent of Africa; PROVIDED,
HOWEVER, that the Company's interest in the Egypt Project under this Agreement
shall not be in violation of the foregoing provision; PROVIDED, FURTHER, that
the foregoing covenant shall not prohibit the Company, any of its Controlled
Affiliates, WLG and any of its Affiliates, and Caledonia and any of its
Affiliates from (i) the holding and ownership of any Shares and (ii) purchasing,
selling or owning five percent (5%) or less in the aggregate of the securities
of a publicly traded corporation competitive with the Company.
(c) For purposes of both Section 3.1(a) and Section 3.1(b), the
phrase "directly or indirectly engage in" shall include carrying on in any
capacity, having a direct or indirect equity interest in, or providing
consulting, management, or advisory services, or being party to other agreements
or having understandings that result in an interest in the profits or revenue of
another Person, other than as a creditor, with any Person which engages in the
business in question.
7
(d) Notwithstanding the foregoing, upon the due execution and
delivery of this Agreement and the Additional Agreements, Kersaf and its
Affiliates may proceed immediately to engage in the Egypt Project; it being
understood and agreed by Kersaf, however, that none of the Company, WLG or
Caledonia has any obligation or commitment under the Egypt Project or anything
contained in the Egypt Project Agreements.
Section 3.2 COVENANT NOT TO SOLICIT.
(a) For a period of two (2) years following the date hereof, Kersaf
shall not, and shall cause each of its Controlled Affiliates not to, directly or
indirectly, solicit or cause others to solicit any Senior Employee of the
Company, the WLG Group or any of their respective Controlled Affiliates.
Furthermore, during such period, Kersaf shall not, and shall cause each of its
Controlled Affiliates not to, (i) hire or make any offer of employment, or cause
others to hire or make any offer of employment, to any such Senior Employee or
(ii) attempt to influence, persuade or induce any such Senior Employee to
terminate his employment with the Company, WLG Group or any of their respective
Controlled Affiliates; PROVIDED, HOWEVER, that nothing herein shall restrict any
job listing advertisements, WEB site listing or other offer of employment which
is widely distributed and not specifically targeted at such Senior Employee .
(b) For a period of two (2) years following the date hereof, the
Company shall not, and shall cause each of its Controlled Affiliates not to, and
WLG shall not, and shall cause each of its Affiliates not to, directly or
indirectly, solicit or cause others to solicit any Senior Employee of Kersaf or
any of its Affiliates. Furthermore, during such period, each of the Company and
WLG shall not, and shall cause each of its respective Controlled Affiliates not
to, (i) hire or make any offer of employment, or cause others to hire or make
any offer of employment, to any such Senior Employee or (ii) attempt to
influence, persuade or induce any such Senior Employee to terminate his
employment with Kersaf or any of its Affiliates; PROVIDED, HOWEVER, that nothing
herein shall restrict any job listing advertisements, WEB site listing or other
offer of employment which is widely distributed and not specifically targeted at
such Senior Employee .
Section 3.3 ENFORCEMENT. If for any reason any court of competent
jurisdiction shall find the provisions of this Article III unreasonable in
duration or in geographic scope, the prohibition herein shall be restricted to
such time and geographic areas as such court determines to be reasonable, it
being the full intention of the parties that this Article III be enforceable to
the full extent permitted by law, to the extent contemplated herein.
8
ARTICLE IV
MONETARY CONSIDERATION
Section 4.1 UPON EXECUTION.
Immediately upon the execution and delivery of this Agreement, RRHL
shall, or shall cause a member of its Group to, deliver to the Company the
following:
(a) three million five hundred thousand United States Dollars
($3,500,000) in immediately available funds by wire transfer to an account
specified in writing by the Company; and
(b) a promissory note in the principal amount of twelve million
United States Dollars ($12,000,000) to be issued by RRHL to the Company in the
form of Exhibit B attached hereto (the "PROMISSORY NOTE"). The Promissory Note
shall be secured by a pledge of Shares having an aggregate value, as of the date
of this Agreement, equal to twenty four million United States Dollars
($24,000,000), such pledge to be made pursuant to a pledge agreement, by and
among RRHL and the Company, in the form of Exhibit C attached hereto.
Section 4.2 EGYPT PROJECT.
(a) RRHL shall from time to time pay to the Company in United States
Dollars by wire transfer or otherwise in immediately available funds, without
any withholding or deduction, an amount (the "MANAGEMENT FEE PAYMENT") equal to
(i) twenty five percent (25%) of the annual Gross Revenue up to one million four
hundred thousand United States Dollars ($1,400,000), (ii) forty percent (40%) of
the annual Gross Revenue in excess of one million four hundred thousand United
States Dollars ($1,400,000) and up to two million eight hundred thousand United
States Dollars ($2,800,000) and (iii) fifty percent (50%) of the annual Gross
Revenue in excess of two million eight hundred thousand United States Dollars
($2,800,000) minus an amount equal to fifty percent (50%) of RRHL's documented
and reasonable out-of-pocket expenses in acquiring the Egypt Project, (the total
amount of RRHL's expenses not to exceed two hundred thousand United States
dollars (US$200,000) without the prior approval of the Company (such approval
not to be unreasonably withheld)); PROVIDED, HOWEVER, that such calculation
shall not include any of RRHL's expenses relating to the Dispute. The Management
Fee Payment shall be payable quarterly in arrears (as based upon reasonably
projected annual Gross Revenue) no later than ten (10) days after receipt by the
RRHL Egypt Entity of its Gross Revenues for such fiscal quarter, and in any
event, within thirty (30) days after the end of each fiscal quarter of the RRHL
Egypt Entity. In addition, no more than ninety (90) days following the end of
each fiscal year of the RRHL Egypt Entity, each of RRHL and the Company agrees
that it shall make a payment to the other in an amount equal to the difference,
if any, between the Management Fee Payment as calculated for such fiscal year
pursuant to the estimated Gross Revenue and the Management Fee Payment as
calculated for such fiscal year pursuant to the actual Gross Revenue, as
determined in good faith by RRHL in consultation with the Company.
9
(b) In addition to the Management Fee Payment, upon the occurrence
of a Realization Event, RRHL shall (if the Company so elects) pay to the Company
in United States Dollars (i) fifty per cent (50%) of the Fair Market Value (as
defined below) of the Egypt Project Agreements (the "REALIZATION EVENT PAYMENT")
plus (ii) any accrued and unpaid Management Fee Payment. The Realization Event
Payment shall be paid in cash by wire transfer or otherwise in immediately
available funds. Realization Event Payments shall be payable in full on the
consummation of any Realization Event.
The "Fair Market Value" shall be determined by the Company and RRHL
acting in good faith as the fair market value of the Egypt Project Agreements
after taking account of, INTER ALIA, (i) any taxation to be suffered by RRHL and
its Controlled Affiliates (including the RRHL Egypt Entity) as a consequence of
the receipt of consideration in connection with the Realization Event that is
attributable to the Egypt Project or the Egypt Project Agreements, (ii) any tax
saving, deduction and other benefit available to RRHL or its Affiliates
(including the RRHL Egypt Entity) in connection with or as a consequence of the
Realization Event Payment, and (iii) any taxation to be suffered by the Company
as a consequence of the receipt of the Realization Event Payment, to the intent
that there shall be a fair and equitable apportionment of any taxation suffered
by RRHL and its Affiliates (including the RRHL Egypt Entity) and the Company
respectively (and such parties agree to cooperate so that the Realization Event
Payment is made and structured in a manner which is equitable in terms of
achieving a tax and fiscally efficient settlement). In the absence of a joint
determination, the determination of Fair Market Value (but no other matter)
shall thereupon be referred to such independent investment bank as the Company
and RRHL may agree or, failing such agreement, as the Director General (or the
equivalent) for the time being of the London Investment Banking Association may
nominate on the application of the Company or RRHL (the "INVESTMENT BANK") for
determination on the following basis:
(A) the Investment Bank shall be instructed to notify the
Company and RRHL of its determination as soon as practicable;
(B) in making its determination the Investment Bank shall act
as expert and not as arbitrator, its decision as to any matter referred to it
for determination shall in the absence of manifest error be final and binding in
all respects on the Company and RRHL and shall not be subject to question on any
ground whatsoever; and
(C) the fees and expenses of the Investment Bank shall be
borne and paid by the Company and RRHL equally.
Until the Fair Market Value shall have been agreed and determined, RRHL and the
RRHL Egypt Entity shall, and shall use reasonable endeavors to cause their
respective Affiliates to:
(1) give or procure that the Investment Bank is given access
at all reasonable times to all books and records which are in the possession or
under the control of the RRHL Egypt Entity or any of its Affiliates (as the case
may be); and
10
(2) generally provide the Investment Bank with such other
information and assistance as it may reasonably require (including access to and
assistance at reasonable times from personnel employed by RRHL, the RRHL Egypt
Entity or any of its Affiliates, as the case may be), in relation to the
determination of the Fair Market Value.
(c) RRHL shall give the Company prior notice in writing of any
proposed Realization Event. Any such election as referred to in Section 4.2(b)
must be made by the Company in writing to RRHL within ten (10) days of agreement
as to or determination of the Realization Event Payment and in any event prior
to the consummation of any Realization Event. In the event that no such election
is made, the Company shall continue to be entitled to receive Management Fee
Payments pursuant to Section 4.2(a) and RRHL shall not consummate any
Realization Event unless and until RRHL's obligations with respect to the
Company's rights are fully novated to and assumed by the relevant third party;
the Company shall enter into any agreement reasonably necessary to novate such
obligations with the relevant third party. RRHL shall not consummate a
Realization Event until the earlier of (i) ten (10) days after the determination
of Fair Market Value and (ii) the date the Company makes an election under
Section 4.2(b), and in any event shall not consummate a Realization Event
without having complied with its obligations under this Section 4.2(c).
(d) If the Company receives a Realization Event Payment in full, its
rights to Management Fee Payments shall cease and determine (save in respect of
any accrued but unpaid Management Fee Payments).
Section 4.3 COVENANTS.
The RRHL Group hereby covenants and agrees with the Company as
follows:
(a) RRHL shall ensure (and accordingly undertakes to the Company)
that at all times a Controlled Affiliate designated by it for such purpose and
notified to the Company as the RRHL Egypt Entity will be the only Affiliate of
RRHL which has any rights to receive consideration under the Egypt Project
Agreements or any financial interest in the Egypt Project (other than any
ownership interest derived from ownership of the equity of the RRHL Egypt
Entity).
(b) Neither RRHL nor the RRHL Egypt Entity shall amend, grant any
time for the performance or other indulgence, waive, supplement or otherwise
modify, and will not permit or agree to any amendment, supplementation or
modification of the Egypt Project Agreements, which would or would reasonably be
expected to materially and adversely affect the Company's rights or adversely
affect the Company's rights pursuant to Sections 4.2(a) and (b) in an amount,
individually or in the aggregate, equal to or greater than five percent (5%),
without the prior written consent of the Company which consent shall not be
unreasonably withheld or delayed. This Section 4.3(b) is without prejudice to
the rights and the limitations set forth in Sections 4.2(a) and (b).
11
(c) RRHL and the Company shall cooperate and use reasonable
endeavors, such endeavors not to have an adverse effect to the RRHL Groups' and
RRHL Egypt Entity's overall organizational, operational, and tax management
practices, to minimize any withholding tax on any Gross Revenue on which the
Management Fee Payment is calculated and paid to the Company.
Section 4.4 FINANCIAL STATEMENTS AND OTHER INFORMATION. Kersaf
and/or RRHL shall procure delivery to the Company of all the following:
(a) as soon as available, but not later than ninety (90) days after
the end of each fiscal year of the RRHL Egypt Entity, a copy of the audited pro
forma balance sheet of the RRHL Egypt Entity's interest in the Egypt Project as
of the end of such fiscal year and the related statements of operations and cash
flows for such fiscal year, setting forth in each case in comparative form the
figures for the previous year, all in reasonable detail and accompanied by the
opinion of an internationally recognized independent certified public accounting
firm which report shall state that such financial statements present fairly, in
all material respects, on a pro forma basis, the financial condition as of such
date and results of operations and cash flows for the periods indicated in
conformity with GAAP;
(b) commencing with the fiscal period ending on the end date of the
first fiscal quarter of the RRHL Egypt Entity's interest in the Egypt Project
that will be completed after the date hereof, as soon as available, but in any
event not later than forty-five (45) days after the end of each of the first
three fiscal quarters of each fiscal year, the unaudited pro forma balance sheet
of the RRHL Egypt Entity's interest in the Egypt Project, and the related
statements of operations and cash flows for such quarter and for the period
commencing on the first day of the fiscal year and ending on the last day of
such quarter, all certified by an appropriate officer of the RRHL Egypt Entity,
as presenting fairly, in all material respects, the financial condition, on a
pro forma basis, as of such date and results of operations and cash flows for
the periods indicated in conformity with GAAP, subject to normal year-end
adjustments and the absence of footnotes required by GAAP.
Section 4.5 BOOKS OF ACCOUNT. RRHL shall keep appropriate and
separate books of record and account, in which full and correct entries shall be
made of all financial transactions and the assets and business of the RRHL Egypt
Entity's interest in the Egypt Project in accordance with GAAP.
Section 4.6 INSPECTION. Kersaf and/or RRHL shall use reasonable
endeavors to, and shall use reasonable endeavors to cause the RRHL Egypt Entity
and any other relevant entities not party hereto to, permit representatives of
the Company (external accountants only) to visit and inspect the physical
property of the Egypt Project (at the Company's expense and not more than once
per calendar year), to examine its corporate, financial and operating records
and make copies thereof or abstracts therefrom, and to discuss its affairs,
finances and accounts with its respective directors, officers and independent
public accountants (at the Company's expense and not more than once per calendar
year), all at such reasonable times during normal business hours and as may be
12
reasonably requested upon reasonable advance notice to RRHL, all of the
foregoing solely for the purpose of verifying the accuracy of the financial
information disclosed in Section 4.4.
Section 4.7 USE OF CONFIDENTIAL INFORMATION. In connection with the
rights granted to the Company in accordance with Sections 4.4, 4.5 and 4.6
hereof, the Company agrees that it shall not, and shall cause its Controlled
Affiliates not to, without the prior written consent of the RRHL Egypt Entity,
(i) disclose any Confidential Information to any Person and (ii) use such
Confidential Information for any purpose other than the purpose set forth in
Section 4.6 or in any way that adversely affects the RRHL Egypt Entity's
commercial competitiveness.
Section 4.8 ASSIGNMENT OF RIGHTS TO PAYMENT. In the event of the
RRHL Egypt Entity failing to enforce payment to itself of the Gross Revenue or
collect any other revenue, income or other payment due and payable in connection
with the Egypt Project or the Egypt Project Agreements and subject to the
Company notifying RRHL at least ten (10) days in advance of its intention to
exercise rights pursuant to this Section 4.8 (and RRHL not within such period
having corrected such failure), RRHL shall use reasonable endeavors to, and
shall use reasonable endeavors to cause each member of its Group and other
relevant entities not party hereto to, permit the Company and any of its
Controlled Affiliates to procure payment (in the name of RRHL or any relevant
member of its Group including, without limitation, the RRHL Egypt Entity if the
Company so requests upon prior written notice given to RRHL), by legal redress
or otherwise, of any revenue, income or other consideration that has accrued and
is due and payable in respect the Egypt Project or the Egypt Project Agreements
but has not been fully paid to the RRHL Egypt Entity or any of its Affiliates.
For such purpose, RRHL shall or shall procure that any relevant member of its
Group shall give all such information and assistance as the Company reasonably
requests and act in accordance with the reasonable requirements of the Company
and at the cost of the Company. Any payment realized pursuant to this Section
4.8 shall be allocated pursuant to the terms of this Agreement after
reimbursement to the Company of the full amount of the documented and reasonable
out-of-pocket expenses incurred in connection with any such realization efforts
by the Company.
Section 4.9 CLOSING THE EGYPT PROJECT. RRHL shall use all reasonable
endeavors to close the Egypt Project on terms not materially different than the
Egypt Project Agreements. Without prejudice to the foregoing obligations and
this Section 4.9, Sections 4.2 through 4.8 are conditional on the RRHL Group
(including, for the avoidance of doubt, the RRHL Egypt Entity) having rights or
entitlements in relation to the Egypt Project. The parties hereto acknowledge
that RRHL does not have any binding commitments with other participants in the
Egypt Project and agree that RRHL shall have no liability or obligation for
failure to close the Egypt Project so long as such reasonable endeavors are
used.
13
ARTICLE V
RELEASE AND WAIVER
Section 5.1 FULL AND FINAL SETTLEMENT.
(a) Subject to Section 5.1(b), each of the parties to this Agreement
does hereby, and each shall cause each of its respective Affiliates
(collectively, the "RELEASING PARTIES") to, in consideration of the transactions
contemplated by this Agreement and the Additional Agreements and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, forever release and discharge each of the other parties to this
Agreement and each of their respective Affiliates, and each of their past and
present respective directors, officers, employees, consultants, equity holders,
advisors, agents, successors and assigns (collectively, the "RELEASED PARTIES")
from any and all debts, demands, actions, causes of action, suits, proceedings,
agreements, contracts, judgments, damages, expense accounts, reckonings,
executions, claims and liabilities whatsoever (including any or all unknown or
unanticipated injuries, damages or losses) of every name and nature (except
death and personal injury) arising out of, or related to or derived from (i) the
SIIL Agreement, (ii) the SIHL Agreement, (iii) the Rosegrove Agreement and (iv)
the dispute principally involving the Kersaf Group's entitlement to pursue the
Egypt Project (the "DISPUTE") (all of the foregoing collectively, the "CLAIMS"),
whether known or unknown, whether or not well founded in fact or in law, and
whether in law or in equity or otherwise, whether direct or consequential,
compensatory, exemplary, liquidated or unliquidated, which such Releasing Party
ever had, now has, or which its legal representatives, successors, assigns,
heirs, executors or administrators can, shall or may have for or by reason of
any matter, cause or anything whatsoever, for all periods prior to the date
hereof; PROVIDED, HOWEVER, that this Release and Waiver shall not apply to
Claims by the Releasing Party, if any, for (i) the enforcement of the provisions
of this Agreement and the Additional Agreements and (ii) any claims arising
after the date hereof out of, or related to or derived from those provisions of
clause 11 of the Rosegrove Agreement and clause 23 of the SIIL Agreement, which
are expressed to survive termination and which shall continue in full force and
effect.
(b) Notwithstanding the foregoing provisions nothing contained in
this Agreement or the Additional Agreements shall constitute a settlement or
waiver of any rights, claims or causes of action arising from the provisions of
clause 3.6 of the SIIL Agreement. Accordingly, Section 3.6 of the SIIL Agreement
shall continue in full force and effect and shall be incorporated into and form
part of this Agreement. Clause 3.6 reads as follows:
"Following the Reorganisation, with effect from the Reorganisation
Effective Date, SIMLA shall pay to SIMLB an increased pre-estimated, fixed
contribution to SIMLB's overhead costs and structure at the rate of US$2,400,000
per annum, payable monthly in arrear, and escalating annually with effect from
1st July 1994 at the rate of 3.3 percent, per annum compound, such increase
having been agreed in the light of increases in SIMLB's costs as a result of the
novation of the Mauritius Management Contracts and the New Le Galawa Agreement
and so that SIMLB shall be
14
responsible for all costs incurred after the Reorganisation Effective Date and
not recoverable from SRL or WLHC in relation to the Mauritius Management
Contracts and the New Le Galawa Agreement."
All rights of SIIL, if any, under or in respect of such provisions
shall accrue, as from the date hereof, for the benefit of the Company, are
hereby assigned to the Company and, accordingly, shall be exercisable by the
Company in place of SIIL. Words defined in the SIIL Agreement have the same
meaning in such clause. In connection with the interpretation of such clause,
regard may be had to the full terms and intent of the SIIL Agreement (including,
without limitation, any capitalized terms used in the immediately preceding
paragraph but not otherwise defined in that paragraph) which shall continue in
full force and effect to the extent necessary to give effect to this provision.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.1 REPRESENTATIONS AND WARRANTIES BY THE PARTIES. Each of
the parties hereby severally represents and warrants to, and agrees as to itself
and with each of the other parties, as follows:
(a) ORGANIZATION OF THE PARTIES. It is duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
and has full organizational power and authority to conduct its business as it is
presently being conducted.
(b) AUTHORIZATION. It has all necessary organizational power and
authority and has taken all organizational action necessary to enter into, and
perform its obligations under this Agreement, each of the Additional Agreements
to which it is a party, and the other transactions contemplated hereunder and
thereunder, respectively. This Agreement and the Additional Agreements have been
duly executed and delivered by it and constitute the legal, valid and binding
obligations of it, enforceable against it in accordance with their terms.
(c) NO CONFLICT OR VIOLATION. Neither the execution and delivery of
this Agreement and each of the Additional Agreements nor the consummation of the
transactions contemplated hereby or thereby by it will result in (i) a violation
of or a conflict with any provision of the charter or bylaws or other
organizational documents of it, (ii) a breach of or a default under any contract
to which it is a party or by which it is bound, or (iii) a violation by it of
any law, rule, regulation, order, judgment, or award, which violation would
adversely affect its ability to consummate the transactions contemplated hereby
and thereby.
(d) GOVERNMENTAL CONSENTS AND APPROVALS. No consent, approval or
authorization of, or declaration, filing or registration with, any governmental
or regulatory authority, is required to be made or obtained by it that has not
been obtained or
15
made in connection with the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby.
(e) DISCLAIMER OF OTHER REPRESENTATION. Except as set forth in this
Section 6.1, it makes no representations or warranties, expressed or implied, to
any of the other parties in connection with the transactions contemplated
hereby.
ARTICLE VII
GENERAL PROVISIONS
Section 7.1 NOTICES. All notices, requests and other communications
to any party hereunder shall be in writing and shall be given (and shall be
deemed to have been given upon receipt) if delivered in person or sent by
facsimile, telegram, telex, by registered or certified mail (postage prepaid,
return receipt requested) or by an internationally recognized overnight courier
to the respective parties at the following addresses (or at such other address
for a party as shall be specified in a notice given in accordance with this
Section 7.1):
if to the Company, to:
SUN INTERNATIONAL HOTELS LIMITED
P.O. Box N-4777
Nassau, The Bahamas
Attention: Charles D. Adamo, Esq.
Facsimile: (242) 363-4581
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019-6064
Attention: Kenneth M. Schneider, Esq.
Facsimile: (212) 757-3990
if to Kersaf, to:
KERSAF INVESTMENTS LIMITED
3 Sandown Valley Crescent
Sandown, Sandton
Republic of South Africa
Attention: The Company Secretary
Facsimile: 010 27 11 783 7446
16
with a copy to:
c/o Badgemore House
Gravel Hill
Henley-on-Thames RG9 4NR
Attention: The Company Secretary
Facsimile: 01491 576526
if to SINC, to:
SUN INTERNATIONAL INC.
c/o Franco & Franco
Torro Universal
Avenue Federico Boyd
Piso no. 12 (Penthouse)
Panama 5, Republic of Panama
Attention: Mr. R.R. Franco
Facsimile: +507 263 8051
with a copy to:
c/o Badgemore House
Gravel Hill
Henley-on-Thames RG9 4NR
Attention: The Company Secretary
Facsimile: 01491 576526
if to SHI, to:
SUN HOTELS INTERNATIONAL
35 St. Thomas Street
London SE1 9SN
Attention: P. F. Robinson
Facsimile: 020 7378 0647
with a copy to:
c/o Badgemore House
Gravel Hill
Henley-on-Thames RG9 4NR
Attention: The Company Secretary
Facsimile: 01491 576526
17
if to RRHL, to:
ROYALE RESORTS HOLDINGS LIMITED
Clarendon House
Church Street
Hamilton HM DX, Bermuda
Attention: The Company Secretary
Facsimile: 0101 809 2 924720
with a copy to:
c/o Badgemore House
Gravel Hill
Henley-on-Thames RG9 4NR
Attention: The Company Secretary
Facsimile: 01491 576526
if to RRIL, to:
ROYALE RESORTS INTERNATIONAL LIMITED
Clarendon House
Church Street
Hamilton HM DX, Bermuda
Attention: The Company Secretary
Facsimile: 001 809 2 924720
with a copy to:
c/o Badgemore House
Gravel Hill
Henley-on-Thames RG9 4NR
Attention: The Company Secretary
Facsimile: 01491 576526
if to SHL, to:
SUN HOTELS LIMITED
Clarendon House
Church Street
Hamilton HM DX, Bermuda
Attention: The Company Secretary
Facsimile: 001 441 2 924 720
18
with a copy to:
c/o Norton Rose
Kempson House, Camomile Street
London EC3A 7AN
Attention: Christopher Pearson
Facsimile: 0207 283 6500
if to WLG, to:
WORLD LEISURE GROUP LIMITED
c/o Trident Trust Company Limited
PO Box 146, Road Town
Tortola, British Virgin Islands
Attention: The Company Secretary
Facsimile: 0101 809 494 3754
with a copy to:
c/o Norton Rose
Kempson House, Camomile Street
London EC3A 7AN
Attention: Christopher Pearson
Facsimile: 0207 283 6500
if to WLI, to:
WORLD LEISURE INVESTMENTS LIMITED
Clarendon House, Church Street
Hamilton HM DX, Bermuda
Attention: The Company Secretary
Facsimile:
with a copy to:
c/o Norton Rose
Kempson House, Camomile Street
London EC3A 7AN
Attention: Christopher Pearson
Facsimile: 0207 283 6500
19
if to Caledonia, to:
CALEDONIA INVESTMENTS PLC
Cayzer House
1 Thomas More Street
London E1W 1YB
Attention: The Company Secretary
Facsimile: 020 7488 0896
with a copy to:
Freshfields Bruckhaus Deringer
65 Fleet Street
London EC4Y 1HS
Attention: Jonathan Rees
Facsimile: 0207 832 7001
if to SK, to:
SOLOMON KERZNER
Ibstone House, Ibstone
Nr. High Wycombe
Buckinghamshire, HP14 3YA
Attention: Solomon Kerzner
Facsimile: 01491 638807
with a copy to:
c/o Norton Rose
Kempson House, Camomile Street
London EC3A 7AN
Attention: Christopher Pearson
Facsimile: 0207 283 6500
if to PB, to:
PETER BUCKLEY
c/o Caledonia Investments plc
Cayzer House
1 Thomas More Street
London E1W 1YB
Attention: Peter Buckley
Facsimile: 020 7488 0896
20
with a copy to:
Freshfields Bruckhaus Deringer
65 Fleet Street
London EC4Y 1HS
Attention: Jonathan Rees
Facsimile: 0207 832 7001
if to DAH, to:
DEREK AUBREY HAWTON
c/o Kersaf Investments Limited
3 Sandown Valley Crescent
Sandown, Sandton
Republic of South Africa
Attention: The Company Secretary
Facsimile: 010 27 11 783 7446
with a copy to:
c/o Badgemore House
Gravel Hill
Henley-on-Thames RG9 4NR
Attention: The Company Secretary
Facsimile: 01491 576526
if to SIMLA, to:
SUN INTERNATIONAL MANAGEMENT LIMTED
Clarendon House
Church Street
Hamilton HM DX, Bermuda
Attention: The Company Secretary
Facsimile: 00 44 1784 6154
with a copy to:
c/o Badgemore House
Gravel Hill
Henley-on-Thames RG9 4NR
Attention: The Company Secretary
Facsimile: 01491 576526
21
if to SIMLB, to:
SUN INTERNATIONAL MANAGEMENT LIMITED
c/o Trident Trust Company
P. O. Box 146, Road Town
Tortola, British Virgin Islands
Attention: The Company Secretary
Facsimile: 0101 809 4943754
with a copy to:
c/o Badgemore House
Gravel Hill
Henley-on-Thames RG9 4NR
Attention: The Company Secretary
Facsimile: 01491 576526
if to SIMLC, to:
SUN INTERNATIONAL MANAGEMENT (UK) LIMITED
Badgemore House
Gravel Hill
Henley on Thames, RG9 4NR
Attention: The Company Secretary
Facsimile: 01491 638807
if to Rosegrove, to:
ROSEGROVE LIMITED
c/o Codan Trust Company (BVI) Limited
Romasco Place,
Wickhams Cay 1, P.O. Box 3140 Road Town
Tortola, British Virgin Islands
Attention: Codan Management (BVI) Limited
Facsimile: 284 494 4929
with a copy to:
Freshfields Bruckhaus Deringer
65 Fleet Street
London EC4Y 1HS
Attention: Jonathan Rees
Facsimile: 0207 832 7001
22
if to SIIL, to:
SUN INTERNATIONAL INVESTMENTS LIMTED
c/o Trident Trust Company Limited
PO Box 146, Road Town
Tortola, British Virgin Islands
Attention: The Company Secretary
Facsimile: 0101 809 494 3754
with a copy to:
c/o Badgemore House
Gravel Hill
Henley-on-Thames RG9 4NR
Attention: The Company Secretary
Facsimile: 01491 576526
if to Mangalitsa, to:
MANGALITSA LIMITED
Sandringham House
83 Shirley Street
PO Box N3247
Nassau, Bahamas
Attention: Surinder Deal
Facsimile: 242 328 6919
with a copy to:
Freshfields Bruckhaus Deringer
65 Fleet Street
London EC4Y 1HS
Attention: Jonathan Rees
Facsimile: 0207 832 7001
if to HIHL, to:
HOG ISLAND HOLDINGS LIMITED
41 Cedar Avenue
P.O. Box HM1179 Hamilton
Bermuda
Attention: James Keyes
Facsimile: 441 292 8666
23
with a copy to:
Freshfields Bruckhaus Deringer
65 Fleet Street
London EC4Y 1HS
Attention: Jonathan Rees
Facsimile: 0207 832 7001
if to CMS, to:
CEMENT MERCHANTS SA
P.O. Box 777
Steinort 175
FL-9497 Triesenberg
Principality of Liechtenstein
Attention: The Company Secretary
Facsimile: 423 262 7989
Section 7.2 ENTIRE AGREEMENT; CONFLICTS. This Agreement and the
Additional Agreements, together with all exhibits and schedules hereto and
thereto, respectively, constitute the entire agreement among the parties
pertaining to the subject matter of this Agreement and the Additional Agreements
and (save to the extent expressly provided otherwise in this Agreement or such
Additional Agreements) supersede all prior agreements, understandings,
negotiations, disclosures, and discussions, whether oral or written, of the
parties. No purported variation of this Agreement and the Additional Agreements,
together with all exhibits and schedules hereto and thereto, shall be effective
unless made in writing between the parties. Additionally, except as provided in
Section 5.1(b), in particular, if there is any conflict between the provisions
of this Agreement and the Additional Agreements and the Existing Agreements, the
provisions of this Agreement and the Additional Agreements shall prevail.
Section 7.3 EXPENSES. The parties shall pay their own fees and
expenses, including their own attorneys' fees, incurred in connection with this
Agreement, the Additional Agreements, any transaction contemplated hereby and
thereby and the Dispute; PROVIDED, HOWEVER, that contemporaneously with the
execution of this Agreement, Kersaf shall, or shall cause a member of its Group
to, make a fixed contribution to the Caledonia Group in the amount of 100,000
British pounds in connection with the Caledonia Group's preparation and
completion of any formal agreements.
Section 7.4 REMEDIES TO BE CUMULATIVE. No remedy conferred by any of
the provisions of this Agreement is intended to be exclusive of any other remedy
available at law, in equity, by statute or otherwise. Each and every other
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law, in equity, by statute or
otherwise. The election by any party to
24
pursue one or more of such remedies shall not constitute a waiver by such party
of the right to pursue any other available remedy.
Section 7.5 WAIVERS. A party's failure to insist on strict
performance of any provision of this Agreement shall not be deemed to be a
waiver thereof or of any right or remedy for breach of a like or different
nature. Subject as aforesaid, no waiver shall be effective unless specifically
made in writing and signed by a duly authorized officer of the party granting
such waiver.
Section 7.6 CONFIDENTIALITY. Except to the extent required by law or
by any relevant securities exchange or any relevant national or regulatory
authority, each of the parties agrees and covenants that it shall not, and that
it shall not permit its respective Affiliates to, issue any press release or
make any public statements about the transactions contemplated by this Agreement
or the Additional Agreements, or the negotiation of such related transactions.
In addition, the Company, on the one hand, and the SIIL Investors, on the other
hand, agree to consult with each other with respect to any press release,
circulars or otherwise making any public statements with respect to the
transactions contemplated by this Agreement or the Additional Agreements, or the
negotiation of such related transactions.
Section 7.7 FURTHER ASSURANCES. After the execution and delivery of
this Agreement, the parties shall, and shall cause each of their respective
Affiliates to, take such actions and execute and deliver to any of the other
parties such further agreements as any of the parties may reasonably request to
carry out, evidence and confirm the transactions contemplated by this Agreement.
Section 7.8 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors. Except as expressly provided herein, no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement.
Section 7.9 CHOICE OF LAW; SUBMISSION TO JURISDICTION AND ADDRESS
FOR SERVICE. This Agreement shall be governed by and interpreted in accordance
with English law. The parties hereby irrevocably submit to the non-exclusive
jurisdiction of the High Court of Justice in England, and this Agreement may be
enforced in any court of competent jurisdiction. Each Party shall at all times
maintain an agent for service of process in England and:
(a) Each of the Company, WCI, SHL, WLG, SK, SIMLB and SIIL hereby
irrevocably authorizes and appoints SIMLC (or such other person resident in
England, as such party may as regards itself by notice to all other parties
substitute) to accept service of all legal process arising out of or connected
with this Agreement and service on SIMLC (or such substitute) shall be deemed to
be service on the party concerned;
(b) Each of Kersaf, RRHL, SIMLA, SINC, SHI and RRIL hereby
irrevocably authorizes and appoints Berwin Leighton Paisner (or such other
person
25
resident in England, as such party may as regards itself by notice to all other
parties substitute) to accept service of all legal process arising out of or
connected with this Agreement and service on Berwin Leighton Paisner (or such
substitute) shall be deemed to be service on the party concerned;
(c) Each of Caledonia, Rosegrove, Mangalitsa and HIHL hereby
irrevocably authorizes and appoints Freshfields Bruckhaus Deringer (marked for
the attention of the Department Managing Partner, Litigation, Ref: RHCC) (or
such other person resident in England, as such party may as regards itself by
notice to all other parties substitute) to accept service of all legal process
arising out of or connected with this Agreement and service on Freshfields
Bruckhaus Deringer (or such substitute) shall be deemed to be service on the
party concerned; and
(d) CMS hereby irrevocably authorizes and appoints Cameron McKenna
(or such other person resident in England, as such party may as regards itself
by notice to all other parties substitute) to accept service of all legal
process arising out of or connected with this Agreement and service on Cameron
McKenna (or such substitute) shall be deemed to be service on the party
concerned.
Section 7.10 COUNTERPARTS; EFFECTIVENESS. This Agreement may be
entered into in any number of counterparts and by the Parties to it on separate
counterparts, each of which when executed and delivered shall be an original,
but all the counterparts shall together constitute one and the same instrument.
Section 7.11 SPECIFIC PERFORMANCE. The parties hereto (and any
Person who agrees to be bound hereby pursuant to the terms hereof) acknowledge
and agree that their respective remedies at law for a breach or threatened
breach of any of the provisions of this Agreement would be inadequate and, in
recognition of that fact, agree that, in the event of a breach or threatened
breach by any other party (or any of such Persons) of the provisions of this
Agreement, in addition to any remedies at law, they shall, respectively, without
posting any bond, be entitled to obtain equitable relief in the form of specific
performance, a temporary restraining order, a temporary or permanent injunction
or any other equitable remedy which may then be available.
Section 7.12 NO THIRD PARTY BENEFICIARIES. A Person who is not
a party to this Agreement may not enforce any of its terms under the Contracts
(Rights of Third Parties) Act 1999, but this shall not affect any right or
remedy of a third party which exists or is available other than under that Act.
Section 7.13 SEVERABILITY. If any term or provision of this
Agreement or the application of any provision hereof to any party hereto or set
of circumstances is held invalid or unenforceable, in whole or in part, under
any enactment or rule of law, such term or provision or part thereof shall to
that extent be deemed not to form a part of this Agreement but the remainder of
this Agreement and the application of such provision to the other parties hereto
or sets of circumstances shall not be affected, unless the provisions held
invalid or unenforceable shall substantially impair the benefits of the
remaining portions of this Agreement.
26
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
/s/ Charles D. Adamo
EXECUTED as a DEED by ) -----------------------------------
SUN INTERNATIONAL HOTELS ) Director
LIMITED ) /s/ John R. Allison
in the presence of: ) -----------------------------------
Director
/s/
EXECUTED as a DEED by ) -----------------------------------
SUN INTERNATIONAL HOTELS ) Director
LIMITED )
in the presence of: ) -----------------------------------
Director
EXECUTED as a DEED by ) /s/
SUN INTERNATIONAL INVESTMENTS ) -----------------------------------
LIMITED ) Director
in the presence of: )
-----------------------------------
Director
EXECUTED as a DEED by ) /s/
WORLD LEISURE GROUP LIMITED ) -----------------------------------
in the presence of: ) Director
-----------------------------------
Director
EXECUTED as a DEED by ) /s/
SUN INTERNATIONAL INVESTMENTS ) -----------------------------------
LIMITED ) Director
in the presence of: )
-----------------------------------
Director
27
EXECUTED as a DEED by ) /s/
WORLD LEISURE GROUP LIMITED ) -----------------------------------
in the presence of: ) Director
-----------------------------------
Director
EXECUTED as a DEED by ) /s/
SUN INTERNATIONAL INVESTMENTS ) -----------------------------------
LIMITED ) Director
in the presence of: )
-----------------------------------
Director
EXECUTED as a DEED by ) /s/
KERSAF INVESTMENTS LIMITED ) -----------------------------------
in the presence of: ) Director
-----------------------------------
Director
EXECUTED as a DEED by ) /s/
SUN INTERNATIONAL INVESTMENTS ) -----------------------------------
LIMITED ) Director
in the presence of: )
-----------------------------------
Director
EXECUTED as a DEED by ) /s/
CALEDONIA INVESTMENTS PLC ) -----------------------------------
in the presence of: ) Director
/s/
-----------------------------------
Director
28
EXECUTED as a DEED by ) /s/
ROSEGROVE LIMITED ) -----------------------------------
in the presence of: ) Director
-----------------------------------
Director
EXECUTED as a DEED by )
ROSEGROVE LIMITED ) -----------------------------------
in the presence of: ) Director
/s/
-----------------------------------
Alternate Director
EXECUTED as a DEED by ) /s/
ROYALE RESORTS HOLDINGS ) -----------------------------------
LIMITED ) Director
in the presence of: )
/s/
-----------------------------------
Authorized Representative
EXECUTED as a DEED by ) /s/
ROYALE RESORTS INTERNATIONAL ) -----------------------------------
LIMITED ) Director
in the presence of: )
/s/
-----------------------------------
Authorized Representative
EXECUTED as a DEED by ) /s/
SUN INTERNATIONAL INC. ) -----------------------------------
in the presence of: ) Authorized Representative
/s/
-----------------------------------
Director
EXECUTED as a DEED by ) /s/
SUN HOTELS INTERNATIONAL ) -----------------------------------
in the presence of: ) Director
/s/
-----------------------------------
Authorized Representative
29
EXECUTED as a DEED by ) /s/
SUN HOTELS LIMITED ) -----------------------------------
in the presence of: ) Director
/s/
-----------------------------------
Authorized Representative
EXECUTED as a DEED by ) /s/
WORLD LEISURE INVESTMENTS ) -----------------------------------
LIMITED ) Director
in the presence of: )
-----------------------------------
Director
EXECUTED as a DEED by ) /s/
SOLOMON KERZNER ) -----------------------------------
in the presence of: ) Director
-----------------------------------
Director
EXECUTED as a DEED by ) /s/
SUN INTERNATIONAL MANAGEMENT ) -----------------------------------
LIMITED ("SIMLA") ) Authorized Representative
in the presence of: )
/s/
-----------------------------------
Authorized Representative
EXECUTED as a DEED by ) /s/
CEMENT MERCHANTS SA ) -----------------------------------
in the presence of: ) Director
/s/
-----------------------------------
Director
EXECUTED as a DEED by ) /s/
SUN INTERNATIONAL MANAGEMENT ) -----------------------------------
LIMITED ("SIMLB") ) Director
in the presence of: )
-----------------------------------
Director
30
EXECUTED as a DEED by ) /s/
SUN INTERNATIONAL MANAGEMENT ) -----------------------------------
(UK) LIMITED ("SIMLC") ) Director
in the presence of: )
/s/
-----------------------------------
Director
EXECUTED as a DEED by ) /s/
MANGALITSA LIMITED ) -----------------------------------
in the presence of: ) Director
/s/
-----------------------------------
Director
EXECUTED as a DEED by ) /s/
HOG ISLAND HOLDINGS LIMITED ) -----------------------------------
in the presence of: ) Director
/s/
-----------------------------------
Director
EXECUTED as a DEED by ) /s/
PETER BUCKLEY ) -----------------------------------
in the presence of: ) Director
/s/
-----------------------------------
Director
EXECUTED as a DEED by ) /s/
DEREK AUBREY HAWTON ) -----------------------------------
in the presence of: ) Director
/s/
-----------------------------------
Director
31
EXECUTION COPY
================================================================================
OMNIBUS AGREEMENT,
by and among,
SUN INTERNATIONAL HOTELS LIMITED,
SUN INTERNATIONAL INVESTMENTS LIMITED
WORLD LEISURE GROUP LIMITED,
KERSAF INVESTMENTS LIMITED,
CALEDONIA INVESMENTS PLC,
ROSEGROVE LIMITED,
ROYALE RESORTS HOLDINGS LIMITED,
ROYALE RESORTS INTERNATIONAL LIMITED,
SUN INTERNATIONAL INC.,
SUN HOTELS INTERNATIONAL,
SUN HOTELS LIMITED,
WORLD LEISURE INVESTMENTS LIMITED,
SOLOMON KERZNER,
PETER BUCKLEY,
DEREK AUBREY HAWTON,
SUN INTERNATIONAL MANAGEMENT LIMITED ("SIMLA"),
CEMENT MERCHANTS SA,
SUN INTERNATIONAL MANAGEMENT LIMITED ("SIMLB"),
SUN INTERNATIONAL MANAGEMENT (UK) LIMITED ("SIMLC"),
HOG ISLAND HOLDINGS LIMITED
and
MANGALITSA LIMITED
-------------
July 3, 2001
-------------
================================================================================
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS..................................................2
Section 1.1 Defined Terms........................................2
Section 1.2 Other Defined Terms..................................5
ARTICLE II ASSIGNMENT OF NAME..........................................6
Section 2.1 Assignment of NameThe Company shall, and shall cause
its Controlled Affiliates to, WLG shall, and shall
cause its Affiliates to, and SIIL shall,.............6
Section 2.1 enter into the Trade Name and Trademark Agreement
(contemporaneously with the execution of this
Agreement) in the form of Exhibit A attached hereto
(the "Assignment")...................................7
ARTICLE III NON-COMPETITION; NON-SOLICITATION..........................7
Section 3.1 Covenant Not To Compete..............................7
Section 3.2 Covenant Not to Solicit..............................8
Section 3.3 Enforcement..........................................8
ARTICLE IV MONETARY CONSIDERATION......................................9
Section 4.1 Upon Execution.......................................9
Section 4.2 Egypt Project........................................9
Section 4.3 Covenants...........................................11
Section 4.4 Financial Statements and Other Information..........12
Section 4.5 Books of Account....................................12
Section 4.6 Inspection..........................................12
Section 4.7 Use of Confidential Information.....................13
Section 4.8 Assignment of Rights to Payment.....................13
....................................................13
Section 4.9 Closing the Egypt Project ..........................13
ARTICLE V RELEASE AND WAIVER..........................................14
Section 5.1 Full and Final Settlement...........................14
ARTICLE VI REPRESENTATIONS AND WARRANTIES.............................15
Section 6.1 Representations and Warranties by the Parties.......15
ARTICLE VII GENERAL PROVISIONS........................................16
Section 7.1 Notices.............................................16
Section 7.2 Entire Agreement; Conflicts.........................24
Section 7.3 Expenses............................................24
Section 7.4 Remedies to be Cumulative...........................24
Section 7.5 Waivers.............................................25
Section 7.6 Confidentiality.....................................25
Section 7.7 Further Assurances..................................25
Section 7.8 Successors and Assigns..............................25
i
Section 7.9 Choice of Law; Submission to Jurisdiction and
Address for Service................................25
Section 7.10 Counterparts; Effectiveness........................26
Section 7.11 Specific Performance...............................26
Section 7.12 No Third Party Beneficiaries.......................26
Section 7.13 Severability.......................................26
EX-10.12
6
a2058552zex-10_12.txt
EXHIBIT 10.12
EXHIBIT 10.12
TRADE NAME AND TRADEMARK AGREEMENT
TRADE NAME AND TRADEMARK AGREEMENT ("AGREEMENT"), dated as of
July 3, 2001 (the "EFFECTIVE DATE"), by and among Sun International Hotels
Limited, a company organized under the laws of The Bahamas, Sun International
Investments Limited, a company incorporated under the laws of the British Virgin
Islands, World Leisure Group Limited, a company incorporated under the laws of
the British Virgin Islands (collectively "ASSIGNOR"), and Sun International
Management Limited, a corporation incorporated under the laws of the Switzerland
(or its nominee) ("ASSIGNEE"). References to the Assignor shall include any and
each of them.
WHEREAS, Assignor is the owner of the Logo and the Marks as defined herein.
WHEREAS, Assignee desires to acquire all worldwide right, title and interest in
and to the Marks and any and all goodwill associated with the Marks; and
WHEREAS, pursuant to the Omnibus Agreement, dated as of the date hereof,
between, among others, Assignor and Assignee (the "OMNIBUS AGREEMENT"), the
parties agreed to enter into this Agreement.
DEFINITIONS
"CONTROLLED AFFILIATES"
has the meaning set forth in the Omnibus Agreement, (and references in this
Agreement shall be to all or any of the Controlled Affiliates); PROVIDED,
HOWEVER, with respect to World Leisure Group Limited, Controlled Affiliates
shall include "Affiliates" as such term is defined in the Omnibus Agreement.
"LOGO"
means the stylised "S" logo shown at Schedule 1.
"MARKS"
means the words "SUN" and "SUN INTERNATIONAL" and the Logo, as presently or
previously used by the Assignor, its licensees or its Controlled Affiliates, and
including, without limitation, all unregistered rights and goodwill relating
thereto and including the Registered Marks, in each case only as such marks,
logos or words relate to resort, hotel, casino and gaming (including, without
limitation, online gaming) services.
2
"REGISTERED MARKS"
means all:
(a) registered trademarks, service marks, trade names, logos, designs, and
brands for the Marks together with all goodwill attaching thereto; and
(b) the domain names set forth in Schedule 2 together with any other domain
names registered in the name of or controlled by the Assignor or its Controlled
Affiliates, and used by the Assignor or its Controlled Affiliates in relation to
the Services.
"SERVICES"
means all:
resort, hotel, casino and/or gaming (including, without limitation, on-line
gaming) services.
1 ASSIGNMENT
1.1 NOW, THEREFORE, for good and valuable consideration of L1, the
receipt and sufficiency of which is hereby acknowledged by the
Assignor, the Assignor hereby irrevocably sells, transfers, assigns,
and otherwise conveys, and shall cause its Controlled Affiliates to
irrevocably sell, transfer, assign and otherwise convey, to the
Assignee and its successors and assigns, all of the Assignor's and
the Controlled Affiliates' worldwide right, title and interest in and
to the following:
(a) each of the Marks, including without limitation all common law rights
thereto;
(b) the goodwill of the Assignor's business and the Assignor's Controlled
Affiliates' businesses symbolized by and associated with the Marks;
and
(c) all rights to proceeds of the foregoing, including, without
limitation, any existing claims by the Assignor and its Controlled
Affiliates, for past, present, or future infringement of the Marks
and the right to sue for past infringements of the Marks.
2 REPRESENTATIONS AND WARRANTIES
The Assignor hereby represents and warrants that:
3
(a) Except as expressly set forth in Schedule 3, the Assignor and its
Controlled Affiliates have no written agreements (including, without
limitation, any license) and no material unwritten agreements
(including, without limitation, any license) with respect to any of
the Marks.
(b) The domain names set forth in Schedule 2 are registered in the name
of Assignor or its Controlled Affiliates and are the only domain
names registered by Assignor and its Controlled Affiliates.
(c) The Assignor and its Controlled Affiliates have not entered into any
agreements with respect to the use or transfer of the domain names
set forth on Schedule 2.
(d) The Assignor has been using the Marks continuously since 1994 in
relation to resort, hotel, casino and gaming services.
(e) The Marks are free and clear of all liens, judgments, claims,
security interests or other encumbrances.
(f) No litigation is pending and no claim has been made against the
Assignor or its Controlled Affiliates in the three years prior to the
date hereof or, to the knowledge of the Assignor or its Controlled
Affiliates, is threatened, (i) alleging that any of the Marks or the
use thereof infringes or violates any third party rights, or
contesting the right of Assignor or its Controlled Affiliates to own,
use or to sell, license or make available to any third party the
Marks; or (ii) opposing or attempting to cancel or invalidate any of
the Marks; and Assignor and its Controlled Affiliates know of no
basis for any such claim, allegation or litigation.
(g) Any moral rights vested in individuals in respect of Marks including,
without limitation, the right to be identified as an author of the
Logo and the right not to have the Logo subjected to derogatory
treatment have been legally and irrevocably waived.
2.1 The Assignor makes no representation and gives no assurance or
warranty that any of the Marks are capable of registration as
registered trademarks.
3 COVENANTS
3.1 Subject to the license granted in paragraph 5.1, the Assignor shall,
and shall cause its Controlled Affiliates to, immediately cease all
use of, and shall not in the future use, the Marks and any trademark,
service mark, trade name, logo, design or brand confusingly similar
thereto.
3.2 Assignor shall refrain, and shall cause its Controlled Affiliates to
refrain, from:
4
3.2.1 preventing or seeking to prevent the Assignee from using
or licensing the Marks;
3.2.2 granting or purporting to grant any licence (other than
sub-licenses as expressly permitted in paragraph 5.1) to a
third party to use the Marks;
3.2.3 attempting to register any of the Marks or any trademark,
service mark, trade name, design, logo or brand
confusingly similar thereto; and
3.2.4 challenging or disputing the validity or enforceability
of, or attempting to oppose or cancel, any of the Marks.
4 FURTHER ASSURANCES
The Assignor shall, and shall procure that its Controlled Affiliates shall, at
the sole cost and expense of the Assignee, execute and sign all such
instruments, applications and documents and shall take all such actions as are
reasonably requested by the Assignee to enable the Assignee or its nominees or
successors to enjoy the full benefit of the Marks and other benefits conferred
by this Agreement and in particular to:
4.1 secure the vesting in the Assignee absolutely of the Assignor's and
the Controlled Affiliates' full right, title and interest in and to
Marks including, without limitation, the making of applications for
registration of the Marks;
4.2 uphold the Assignee's rights in the Marks; and
4.3 defeat any challenge to the validity of, and resolve any questions
concerning, the Marks.
5 LICENSE
5.1 Assignee hereby grants Assignor a non-exclusive, non-transferable,
worldwide, royalty-free, fully-paid right and license, with the right
to sublicense to its existing licensees to the extent currently
licensed to such licensee, to use the Marks as follows:
5.1.1 for the shorter of a period of one year from the Effective
Date of this Agreement and such time as is reasonably
necessary for Assignor to accomplish the steps set forth
in this paragraph 5.1.1, to use the Marks for the sole
purpose of and only to the extent necessary to re-brand
Assignor's existing products and services, and settling
any other matters incidental to an orderly cessation of
the usage of the Marks;
5
5.1.2 until December 2002, with respect to any marketing
materials utilized by tour operators that include third
party properties in addition to Assignor's properties; and
5.1.3 until December 2003, Assignor shall be entitled to use the
phrase "Formerly Sun International" or any similar
variation thereof, with respect to any marketing materials
utilized by tour operators that include a majority of
third party properties in addition to Assignor's
properties.
5.2 The parties acknowledge the following:
5.2.1 that Sun Resorts Limited, a company incorporated in
Mauritius ("SRL"), is not an affiliate or Controlled
Affiliate of Assignor. Assignor represents that it has not
granted to SRL any rights to use the Marks except as
provided in those agreements set forth on Schedule 3.
Assignor shall use reasonable endeavours to persuade SRL
not to use the Sun International name. Assignee agrees
that it shall have no recourse against Assignor or its
Controlled Affiliates for any use by SRL of any of the
Marks; unless (i) SRL's use of any Mark is based on rights
granted to SRL in any agreement with Assignor that is not
listed on Schedule 3, in which case Assignee has a right
to claim that the representation contained in this Section
5.2.1 has been breached or (ii) Assignor breaches its
obligation to use reasonable endeavours to persuade SRL
not to use the Sun International name as provided in this
Section 5.2.1; and
5.2.2 the parties acknowledge that the Mohegan tribe has the
right to use the "Sun" name in accordance with the
agreement with the Mohegan Tribe set forth on Schedule 3,
and that Assignee will not challenge such use as long as
it is in accordance with such agreement.
5.3 Assignee grants the license set forth in paragraphs 5 PROVIDED THAT:
5.3.1 Assignor shall, and shall procure that its sub-licensees
shall, use the Marks only as licensed in this Agreement
and not otherwise;
5.3.2 the services provided by the Assignor and the Assignor's
sub-licensees under the Marks shall be of no lower quality
than that achieved by them in their business as at the
date of this Agreement;
6
5.3.3 the Assignor and the Assignor's sub-licensees shall not
use the Marks in a manner which is reasonably likely to
cause material harm to the goodwill attaching to the
Marks;
5.3.4 the Assignor shall, as soon as is reasonably practicable,
inform the Assignee in writing giving such details as are
available if it has knowledge that use of any of the Marks
by the Assignor or Assignee including any sub-licensees
infringes, or is alleged to infringe, the rights of any
third party or that any third party is infringing, or
intends to infringe, the Marks.
5.3.5 the Assignee shall have the right in its sole and absolute
discretion, and at its own expense, to commence or assume
the conduct of all actions and proceedings relating to the
Marks and the Assignor shall, and shall cause its
Controlled Affiliates to, provide all assistance the
Assignee or its nominees or assigns may reasonably require
in connection with any such proceedings (including,
without limitation, joining as a party, where reasonably
necessary, to any such action commenced by the Assignee).
Any costs or damages incurred or recovered as a result of
any such actions or proceedings shall be for the account
of the Assignee.
5.4 Acknowledgement
The Assignor acknowledges and agrees that:
5.4.1 all the Assignor's , and the Assignor's Controlled
Affiliates', right, title and interest in and to the Marks
shall from the Effective Date belong to the Assignee
(subject only to the limited rights granted under
paragraph 5.1);
5.4.2 it shall not, and it shall procure that its Controlled
Affiliates shall not, acquire or claim any interest in or
title to the Marks or the goodwill attaching to them by
virtue of the rights granted to it under this Agreement or
through its use and its sub-licensees' use of the Marks
under this Agreement; and
5.4.3 all goodwill arising through use of the Marks by Assignor
and its sublicensees shall at all times be deemed to have
accrued to the Assignee.
5.5 Termination
5.5.1 The license granted under paragraph 5.1 will automatically
terminate immediately if the Assignor becomes insolvent
pursuant to section 123 of the Insolvency Act
7
1986 (or as it may be amended from time to time), a
petition is presented or a resolution passed for the
winding up of the Assignor (otherwise than for the purpose
of a bona fide scheme of solvent amalgamation or
reconstruction), a petition is presented requesting the
court to make an order for the appointment of an
administrator of the Assignor, an administrative receiver
or other receiver is appointed in respect of the Assignor
or the Assignor endeavors to or enters into any
composition or arrangement including, without limitation,
a company voluntary arrangement pursuant to the Insolvency
Act 1986 (or as it may be amended from time to time) with
or for the benefit of its creditors.
5.5.2 The license granted under paragraph 5.1 shall
automatically terminate immediately if the events referred
to in paragraph 5.5.1 occur in respect of the Assignor
under equivalent legislation or regulations in any part of
the world.
5.5.3 The license granted under paragraph 5.1 shall
automatically terminate immediately if the Assignor (or
any of its sub-licensees) challenge or dispute (or
threaten to challenge or dispute) the validity or
ownership of the Marks, or take any action (or threaten to
take any action) either directly or indirectly to oppose
the renewal, or to oppose or cancel the registration, of
any of the Registered Marks.
5.5.4 Any termination of this Agreement shall be without
prejudice to the rights of the Assignee against the
Assignor in respect of anything done or omitted to be done
prior to termination.
5.6 Post termination
Following termination of the licence granted under paragraph 5.1, the
Assignor shall, and shall procure that its sublicensees shall:
5.6.1 immediately and permanently cease all use of the Marks
including without limitation use as part of a company name
by itself;
5.6.2 within 30 days delete or remove the Marks from all
materials in the possession or control of the Assignor or
its sublicensees to which the Marks are affixed, or (where
such deletion or removal is not reasonably practicable)
destroy and provide to the Assignee reasonably
satisfactory evidence of such destruction, deletion or
removal;
8
5.6.3 within 30 days (or as soon as is practicable in the light
of the relevant domain name registry's procedures)
transfer to the Assignee any domain name which includes,
or is confusingly similar to, any of the Marks.
6 ASSIGNMENT
The Assignor may not assign or otherwise transfer the benefits of or delegate
its obligations under this Agreement, whether in whole or in part, without the
written consent of Assignee. Any assignment in violation of this provision shall
be void.
7 GOVERNING LAW
This Agreement shall be governed by English Law and the parties agree to submit
to the exclusive jurisdiction of the Courts of England and Wales.
8 NO THIRD PARTY BENEFICIARIES
A person who is not a party to this Agreement may not enforce any of its terms
under the Contracts (Rights of Third Parties) Act of 1999, but this shall not
affect any right or remedy of a third party which exists or is available other
than under the Act.
[SIGNATURE PAGE FOLLOWS]
9
AS WITNESS WHEREOF the parties hereto have signed and delivered this Agreement
as a Deed the day and year first before appearing.
EXECUTED as a DEED by ) /s/ Charles D. Adamo
SUN INTERNATIONAL HOTELS ) Director
LIMITED )
in the presence of: ) /s/ John R. Allison
Director
EXECUTED as a DEED by ) /s/
SUN INTERNATIONAL HOTELS ) -----------------------------------
LIMITED ) Director
in the presence of: )
-----------------------------------
Director
EXECUTED as a DEED by ) /s/
SUN INTERNATIONAL INVESTMENTS ) -----------------------------------
LIMITED ) Director
in the presence of: )
-----------------------------------
Director
EXECUTED as a DEED by ) /s/ P. Buckley
SUN INTERNATIONAL INVESTMENTS ) Director
LIMITED )
in the presence of: ) -----------------------------------
Director
EXECUTED as a DEED by ) /s/
SUN INTERNATIONAL INVESTMENTS ) -----------------------------------
LIMITED ) Director of Kersaf Investments
in the presence of: ) Limited
-----------------------------------
Director
10
EXECUTED as a DEED by ) /s/
WORLD LEISURE GROUP LIMITED ) -----------------------------------
in the presence of: ) Director
-----------------------------------
Director
EXECUTED as a DEED by ) /s/
WORLD LEISURE GROUP LIMITED ) -----------------------------------
in the presence of: ) Director
-----------------------------------
Director
EXECUTED as a DEED by ) /s/
SUN INTERNATIONAL MANAGEMENT ) -----------------------------------
LIMITED ("SIMLA") ) Authorized Representative
in the presence of: )
/s/
-----------------------------------
Authorized Representative
11
SCHEDULE 1
REGISTERED TRADEMARKS AND SERVICE MARKS
[LOGO TO BE PROVIDED]
12
SCHEDULE 2
DOMAIN NAMES
1. sunint.com
2. sunint.net
13
SCHEDULE 3
1. DUBAI
2. SEYCHELLES
3. MAURITIUS
4. MOHEGAN SUN CASINO AGREEMENT
EX-10.13
7
a2058552zex-10_13.txt
EXHIBIT 10.13
EXHIBIT 10.13
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS OR "BLUE SKY" LAWS (COLLECTIVELY,
THE "SECURITIES LAWS"), AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF
UNLESS IT HAS BEEN REGISTERED UNDER THE SECURITIES LAWS OR AN EXEMPTION FROM
REGISTRATION APPLIES TO SUCH TRANSFER OR DISPOSITION.
ROYALE RESORTS HOLDINGS LIMITED
NINE PERCENT (9%) PROMISSORY NOTE
$12,000,000
New York, New York July 3, 2001
FOR VALUE RECEIVED, the undersigned, Royale Resorts Holdings Limited
(the "COMPANY" or the "MAKER"), promises to pay to the order of SUN
INTERNATIONAL HOTELS LIMITED, a company incorporated under the laws of The
Bahamas (the "PAYEE"), the principal sum of TWELVE MILLION DOLLARS ($12,000,000)
and interest on the outstanding principal balance as set forth in this 9%
Promissory Note (the "NOTE").
1. INTEREST RATE; PAYMENT.
(a) The outstanding principal balance of this Note shall bear
interest at a rate of nine percent (9%) per annum, with interest accruing on the
outstanding principal amount hereof from and including July 3, 2001, until
repayment of the principal and payment of all accrued interest in full. Interest
shall be computed on the basis of a 365 day year and the actual number of days
elapsed, and shall be payable quarterly on the last day of each of March, June,
September and December, commencing September 2001.
(b) The outstanding balance of any amount owed under this Note which
is not paid when due (including any interest that is not paid when due) shall
bear interest at the rate of eleven percent (11%) per annum (the "DEFAULT
INTEREST") with the Default Interest accruing, from and including such due date,
on a cumulative basis, compounding quarterly.
(c) The Maker shall pay to the Payee the entire principal amount of
this Note then outstanding, together with all interest accrued and unpaid
thereon, no later than June 30, 2003 (the "MATURITY Date"). On the Maturity
Date, the Maker shall pay the applicable amount of principal and interest in
lawful money of the
2
United States of America by wire or bank transfer of immediately available funds
to an account designated by the Payee in writing from time to time not less than
two (2) business days prior to any payment date.
2. SECURITY DOCUMENTS. In order to secure the due and punctual payment
of the principal of and interest on this Note when and as the same shall be due
and payable according to the terms of this Note and any other obligations
payable by the Maker hereunder, the Maker has granted a first priority lien and
security interest in certain collateral pursuant to the Pledge Agreement, dated
as of the date hereof (the "PLEDGE AGREEMENT"), between the Maker and the Payee.
The Pledge Agreement provides for the rights and remedies of the Payee with
respect to such collateral.
3. PREPAYMENT.
(a) MANDATORY PREPAYMENT.
(i) Upon the occurrence of an Event of Default under Section
4(d) or (e), the outstanding principal of and all accrued and unpaid interest on
this Note shall automatically be accelerated and shall automatically become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which are expressly waived by the Maker, notwithstanding
anything contained herein to the contrary.
(ii) The Payee shall, at its sole option, have the right to
require the Maker to pay the outstanding principal of and all accrued and unpaid
interest on this Note upon the occurrence and continuation of any of the
following events: (A) an Event of Default under Section 4(a), (b), (c), (f), (g)
or (h), (B) the closing by the Company of any sale or other disposition of all
or substantially all of its assets (other than the Shares (as defined in the
Registration Rights and Governance Agreement dated the date hereof (the
"GOVERNANCE AGREEMENT"), by and among the Maker and the Payee, among others),
whether in one transaction or in a series of transactions, (C) the closing by
the Company of any consolidation or merger into another entity as a result of
which the equity holders of the Maker or their Affiliates immediately prior to
such transaction do not beneficially own at least 50% of all equity interest in
the surviving corporation, or (D) any event that constitutes a Change of Control
(as defined below) of the Company, in one transaction or in a series of
transactions. No later than fifteen (15) business days prior to the occurrence
of an event set forth in clauses (A), (B), (C) or (D) above, the Company shall
give written notice of such event to the Payee. "CHANGE OF CONTROL" means any
"person" or "group" (as such terms are used for purposes of Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")), other
than any member of the Kersaf Group (as defined in the Governance Agreement) or
any other person or group that includes such member, becoming the "beneficial
owner" (as such term is used in Rule 13d-3 of the Exchange Act), directly or
indirectly, of more than fifty percent (50%) of the total voting power in the
aggregate normally entitled to vote in the election of directors, managers or
trustees, as applicable, of the Maker.
3
(iii) Any mandatory prepayment under this Section 3(a) shall
include payment of reasonable costs and expenses under Section 5(c) (including
reasonable attorneys' fees and expenses) incurred by the Payee and associated
with such prepayment, if any.
(b) OPTIONAL PREPAYMENT. The Company shall have the right to prepay
this Note, in whole or in part, at any time and from time to time upon five (5)
business days' prior written notice to the Payee, without premium or penalty.
4. EVENTS OF DEFAULT. An "EVENT OF DEFAULT" shall occur if:
(a) the Maker shall default in the payment of the principal of this
Note, when and as the same shall become due and payable, whether on the Maturity
Date or at a date fixed for prepayment or by acceleration or otherwise or the
Maker shall default in the payment of interest on this Note within three (3)
business days of the date when due;
(b) the Maker shall breach (other than any breach that is
immaterial) any covenant or agreement contained in this Note, the Omnibus
Agreement, the Governance Agreement or the Pledge Agreement and such breach
shall continue for five (5) business days after the Maker receives notice of
such failure;
(c) any material representation, warranty, certification or
statement made by or on behalf of the Maker in this Note, the Governance
Agreement, the Omnibus Agreement or the Pledge Agreement shall prove to have
been incorrect in any material respect when made;
(d) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of the Maker or of a substantial part of the Maker's property or
assets, under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other United States or foreign bankruptcy, insolvency,
receivership or similar law (any such law, a "BANKRUPTCY LAW"), and such
proceeding or petition shall not be dismissed within sixty (60) days, (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for a substantial part of the property or assets of the Maker,
(iii) the entry of an order or decree by a court of competent jurisdiction for
the winding up or liquidation of the Maker and the continuance of such order or
decree unstayed and in effect for a period of sixty (60) days;
(e) the Maker shall (i) voluntarily commence any proceeding or file
any petition seeking relief under a Bankruptcy Law, (ii) consent to the
institution of or the entry of an order for relief against it, (iii) apply for
or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for a substantial part of the property or assets
of the Maker, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors, (vi) become unable, admit in writing its
4
inability or fail generally to pay its debts as they become due or (vii) take
any action for the purpose of effecting any of the foregoing;
(f) one or more judgments or orders for the payment of money in
excess of five million United States Dollars ($5,000,000) in the aggregate shall
be rendered against the Maker and such judgment(s) or order(s) shall continue
unsatisfied and unstayed for a period of thirty (30) days;
(g) the Maker shall default in the payment of any principal,
interest or premium with respect to indebtedness (excluding trade payables and
other indebtedness entered into in the ordinary course of business) in excess of
five million United States Dollars ($5,000,000) in the aggregate for borrowed
money or any obligation which is the substantive equivalent thereof and such
default shall continue for more than the period of grace, if any, or if any such
indebtedness or obligation shall be declared due and payable prior to the stated
maturity thereof; or
(h) any material provisions of this Note or the Pledge Agreement
shall terminate (other than in accordance with its terms) or become void or
unenforceable or the Maker shall so assert in writing.
5. SUITS FOR ENFORCEMENT.
(a) Upon the occurrence and during the continuance of any one or
more Events of Default, the holder of this Note may proceed to protect and
enforce its rights by suit in equity, action at law or by other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained herein or in aid of the exercise of any power granted in this Note, or
may proceed to enforce the payment of this Note, or to enforce any other legal
or equitable right it may have as a holder of this Note.
(b) The holder of this Note may direct the time, method and place of
conducting any proceeding for any remedy available to itself.
(c) In case of any Event of Default, the Maker will pay to the Payee
the costs and expenses of the Payee in collecting and enforcing this Note and
the Pledge Agreement, including without limitation, reasonable fees,
disbursements and other charges of counsel incurred in connection with any
action in which the Payee prevails.
6. GROSS-UP. If at any time any applicable law, regulation or
regulatory requirement, or any governmental authority, monetary agency or
central bank requires the Company to make any deduction or withholding from any
payment made in respect of any amount due from the Company hereunder, the amount
so due shall be increased to the extent necessary to ensure that, after the
making of such deduction or withholding, the Payee receives, on the due date for
such payment, a net sum equal to the sum which it would have received had no
such deduction or withholding been required to be made.
7. NOTICES. All notices, demands and other communications provided for
or permitted hereunder shall be made in writing and shall be by registered or
certified
5
first class mail, return receipt requested, telecopier, courier service,
overnight mail or personal delivery:
(a) if to the Company:
Clarendon House
Church Street
Hamilton HM DX, Bermuda
Attention: The Company Secretary
Facsimile: 0101 809 2 924720
with a copy to:
Berwin Leighton Paisner
Adelaide House
London Bridge, London EC4R 9HA
Attention: P. F. Robinson
Facsimile: 0207 760 1111
(b) if to the Payee:
Sun International Hotels Limited
P.O. Box N-4777
Nassau, The Bahamas
Attention: Charles D. Adamo, Esq.
Facsimile: (242) 363-4581
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10016-6064
Attention: Kenneth M. Schneider, Esq.
Telecopy: (212) 757-3990
8. SUCCESSORS AND ASSIGNS. This Note shall inure to the benefit of and
be binding upon the successors and permitted assigns of the parties hereto. The
Maker shall not assign any of its rights or obligations under this Note without
the prior written consent of the Payee.
9. AMENDMENT AND WAIVER.
(a) No failure or delay on the part of the Payee in exercising any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The remedies provided for herein are cumulative and are not exclusive of
any remedies that may be available to the Maker or the Payee at law, in equity
or otherwise.
6
(b) Any amendment, supplement or modification of or to any provision
of this Note, any waiver of any provision of this Note and any consent to any
departure by the Maker from the terms of any provision of this Note, shall be
effective (i) only if it is made or given in writing and signed by the Maker and
the holder of this Note and (ii) only in the specific instance and for the
specific purpose for which made or given.
10. HEADINGS. The headings in this Note are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
11. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF.
12. WAIVER OF JURY TRIAL AND SETOFF. The Maker and Payee hereby waive
trial by jury in any litigation in any court with respect to, in connection
with, or arising out of this Note or any instrument or document delivered
pursuant to this Note, or the validity, protection, interpretation, collection
or enforcement thereof.
13. CONSENT TO JURISDICTION. The Maker hereby irrevocably consents to
the jurisdiction of the United States federal courts and the courts of the State
of New York located in New York, New York, in connection with any action or
proceeding arising out of or relating to this Note or any document or instrument
delivered pursuant hereto.
14. SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any other provisions hereof shall not be in any way impaired,
unless the provisions held invalid, illegal or unenforceable shall substantially
impair the benefits of the remaining provisions hereof.
15. FURTHER ASSURANCES. The Maker shall execute such documents and
perform such further acts (including, without limitation, obtaining any
consents, exemptions, authorizations or other actions by, or giving any notices
to, or making any filings with, any governmental authority or any other person)
as may be reasonably required or appropriate to carry out or to perform the
provisions of this Note.
[SIGNATURE PAGE FOLLOWS]
7
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed and delivered as of the date first above written.
ROYALE RESORTS HOLDINGS LIMITED
By: /s/ Derek Aubrey Hawton
Name: Derek Aubrey Hawton
Title: Director
EX-10.14
8
a2058552zex-10_14.txt
EXHIBIT 10.14
EXHIBIT 10.14
STOCK PLEDGE AGREEMENT
STOCK PLEDGE AGREEMENT, dated as of July 3, 2001, made by
Royale Resorts Holdings Limited (the "PLEDGOR") in favor of Sun International
Hotels Limited, a company incorporated under the laws of The Bahamas ("SIHL").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, SIHL and Pledgor, among others, have entered into
an Omnibus Agreement, dated as of the date hereof (the "OMNIBUS AGREEMENT"),
pursuant to which the parties thereto agreed to, among other things, (1)
transfer the "Sun" and "Sun International" name, brand and logo, and all
related rights therein, from SIHL to Pledgor, (2) permit Pledgor and its
affiliates to pursue the Egypt Project (as defined in the Omnibus Agreement),
and (3) certain non-competition and non-solicitation covenants, all in
exchange for, among other things, delivery to SIHL of a certain promissory
note made by Pledgor (the "PROMISSORY NOTE").
WHEREAS, the Omnibus Agreement contemplates that Pledgor will
secure payments to SIHL under the Promissory Note by executing this Agreement.
WHEREAS, Pledgor is the legal and beneficial owner of the
shares of Pledged Stock set forth opposite its name on Schedule 1 hereto.
NOW, THEREFORE, in consideration of the premises and to
induce SIHL to enter into and perform the Omnibus Agreement and the
Governance Agreements, Pledgor hereby agrees with SIHL, as follows:
1. DEFINED TERMS. (a) Unless otherwise defined herein, terms
defined in the Promissory Note and used herein shall have the meanings given to
them in the Promissory Note.
(b) The following terms shall have the following
meanings:
"AGREEMENT" means this Stock Pledge Agreement, as the same may
be amended, supplemented or otherwise modified from time to time.
"CODE" means the Uniform Commercial Code from time to time in
effect in the State of New York.
"COLLATERAL" means the Pledged Stock and all Proceeds.
"COLLATERAL ACCOUNT" means any account established to hold
money Proceeds, maintained under the sole dominion and control of SIHL, subject
to withdrawal by SIHL only as provided in Section 8(a).
"GOVERNANCE AGREEMENT" has the meeting set forth in the
Omnibus Agreement.
2
"LIENS" means any mortgage, pledge, hypothecation, option,
right of first refusal, transfer restriction, assignment, deposit arrangement,
encumbrance, lien (statutory or other) or security interest, or any preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, any conditional sale or other
title retention agreement or any other arrangement having substantially the same
effect as any of the foregoing in this definition of "Lien"), other than any
transfer restriction arising under applicable federal, state or foreign
securities laws or the Governance Agreement, the Omnibus Agreement or the
proxies referred to therein and as reflected in the legend, if any, on the
Pledged Stock.
"OBLIGATIONS" means all present and future obligations and
liabilities (whether for principal, interest, indemnities, fees, expenses or
otherwise) of Pledgor under the Promissory Note and this Agreement. Without
limiting the generality of the foregoing, this Agreement secures the payment of
all amounts that constitute part of the Obligations and owed by Pledgor whether
or not they are enforceable or allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving Pledgor.
"PLEDGED STOCK" means as to Pledgor, the number of Shares set
forth on Schedule 1, together with all stock certificates representing such
Shares.
"PROCEEDS" means all "proceeds" as such term is defined in
Section 9-306(1) of the Code and shall include, subject to clause 6, all
dividends or other income from the Pledged Stock, collections thereon or
distributions with respect thereto.
"PROXY AGREEMENT" means that certain Irrevocable Proxy
Agreement, dated as of the date hereof, by and among the Pledgor and SIHL, among
others.
"SECURITIES ACT" means the United States Securities Act of
1933 or any successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
(c) The words "HEREOF," "HEREIN" and "HEREUNDER" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
section and paragraph references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of such terms.
2. PLEDGE; GRANT OF SECURITY INTEREST. Pledgor hereby delivers
to SIHL, all the Pledged Stock and hereby grants to SIHL, a first priority
security interest in the Collateral owned by it, as collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations.
3. STOCK POWERS. Concurrently with the delivery by Pledgor to
SIHL of any certificate representing one or more shares of Pledged
3
Stock to SIHL, Pledgor shall deliver an undated stock power covering such
certificate, duly executed in blank by Pledgor with, if SIHL so requests,
signature guaranteed.
4. REPRESENTATIONS AND WARRANTIES. Pledgor represents and
warrants that:
(a) Pledgor has the power and authority and the legal
right to execute and deliver, to perform its obligations under, and to grant the
security interest in the Collateral granted by it pursuant to, this Agreement
and has taken all necessary action required by it to authorize its execution,
delivery and performance of, and grant of the security interest in the
Collateral granted by it pursuant to, this Agreement.
(b) This Agreement constitutes a legal, valid and
binding obligation of Pledgor, enforceable in accordance with its terms, and
upon delivery to SIHL of the stock certificates evidencing the Pledged Stock
pledged by it, together with the stock powers referred to in clause 3, the
security interest created pursuant to this Agreement will constitute a valid,
perfected first priority security interest in the Collateral granted by it,
enforceable in accordance with its terms against all creditors of Pledgor and
any Persons purporting to purchase any Collateral from Pledgor, except in each
case as enforceability may be affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(c) The execution, delivery and performance of this
Agreement by Pledgor will not violate any provision of any requirement of law
applicable to it or any contractual obligation of, applicable to or binding on
Pledgor and will not result in the creation or imposition of any Lien on any of
the properties or revenues of Pledgor pursuant to any such requirement of law or
contractual obligation, except the security interest created by this Agreement.
(d) No consent or authorization of, filing with, or
other act by or in respect of, any arbitrator, court or governmental authority
and no consent of any other Person (including, without limitation, any creditor
of Pledgor), is required to be obtained by Pledgor in connection with the
execution, delivery and performance by Pledgor, or validity or enforceability of
this Agreement against Pledgor.
(e) No litigation, investigation or proceeding of or
before any arbitrator, court or governmental authority is pending or, to the
knowledge of Pledgor, threatened by or against Pledgor or against any of its
properties or revenues with respect to this Agreement or any of the transactions
contemplated hereby.
(f) Pledgor is the record and (subject only to rights
of Controlling Affiliates of Pledgor arising solely by virtue of ownership of
Pledgor) beneficial owner of, and (subject to restrictions in the Governance
Agreement) has good and marketable title to, the Pledged Stock pledged by it
hereunder, free of any and all
4
Liens or claims of, any other Person, except the security interest created by
this Agreement.
5. COVENANTS. Pledgor covenants and agrees with SIHL from and
after the date of this Agreement until Obligations have been paid in full:
(a) If Pledgor shall, as a result of its ownership of
its Pledged Stock, become entitled to receive or shall receive any stock
certificate (including, without limitation, any certificate representing a stock
dividend or a distribution in connection with any reclassification, increase or
reduction of capital or any certificate issued in connection with any
reorganization), option or rights, whether in addition to, in substitution of,
as a conversion of, or in exchange for any shares of the Pledged Stock, or
otherwise in respect thereof, Pledgor shall accept the same as the agent of
SIHL, hold the same in trust for SIHL and deliver the same forthwith to SIHL in
the exact form received, duly endorsed by Pledgor to SIHL, if required, together
with an undated stock power covering such certificate duly executed in blank by
Pledgor and with, if SIHL so requests, signature guaranteed, to be held by SIHL,
subject to the terms hereof, as additional collateral security for the
Obligations. Any sums paid upon or in respect of the Pledged Stock upon the
liquidation or dissolution of SIHL shall be held by it hereunder as additional
collateral security for the Obligations. If any distribution of capital shall be
made on or in respect of any Pledged Stock or any property shall be distributed
upon or with respect to any Pledged Stock pursuant to the recapitalization or
reclassification of the capital of SIHL or pursuant to the reorganization
thereof, the property so distributed shall be held by it hereunder as additional
collateral security for the Obligations. If any sums of money or property so
paid or distributed in respect of any Pledged Stock shall be received by
Pledgor, Pledgor shall, until such money or property is paid or delivered to
SIHL, hold such money or property in trust for SIHL, segregated from other funds
of Pledgor, as additional collateral security for the Obligations.
(b) Except pursuant to the Proxy Agreement, without
the prior written consent of SIHL, Pledgor will not (i) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, the
Collateral owned by it, (ii) create, incur or permit to exist any Lien or option
in favor of, or any claim of any Person with respect to, any of the Collateral
owned by it, or any interest therein, except for the security interests created
by this Agreement or (iii) enter into any agreement or undertaking restricting
the right or ability of Pledgor or SIHL to sell, assign or transfer any of the
Collateral.
(c) Pledgor shall defend the security interest
created by this Agreement as a first, perfected (so long as SIHL or its agent
maintains possession) security interest and shall defend such security interest
against claims and demands of all Persons whomsoever. At any time and from time
to time, upon the written request of SIHL, and at the sole expense of Pledgor,
Pledgor will promptly and duly execute and deliver such further instruments and
documents and take such further actions as SIHL may reasonably request for the
purposes of obtaining or preserving the full benefits of this Agreement and of
the rights and powers herein granted. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any
5
promissory note, other instrument or chattel paper, such note, instrument or
chattel paper shall be immediately delivered to SIHL, duly endorsed in a manner
reasonably satisfactory to SIHL, to be held as Collateral pursuant to this
Agreement.
(d) Pledgor shall pay, and hold SIHL harmless from,
any and all liabilities with respect to, or resulting from any delay in paying,
any and all stamp, excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the Collateral or in connection
with any of the transactions contemplated by this Agreement.
6. CASH DIVIDENDS; VOTING RIGHTS. Notwithstanding anything
herein to the contrary, unless an Event of Default shall have occurred and be
continuing, Pledgor shall be permitted to receive all cash dividends paid in the
normal course of business of SIHL in respect of the Pledged Stock and unless a
default in payment of any Obligations shall have occurred and be continuing,
Pledgor shall, subject to the Governance Agreement, be permitted to exercise all
corporate rights (other than voting rights) with respect to the Pledged Stock;
PROVIDED, HOWEVER, that no corporate right shall be exercised or other action
taken which, in SIHL's reasonable judgment, would impair any of the Collateral
or which would be inconsistent with or result in any violation of any provision
of the Promissory Note or this Agreement.
7. RIGHTS OF SIHL. (a) Subject to clause 6, all money Proceeds
received by SIHL hereunder shall be held by SIHL in a Collateral Account. All
Proceeds while held by SIHL in a Collateral Account (or by Pledgor in trust for
SIHL) shall continue to be held as collateral security for all the Obligations
and shall not constitute payment thereof until applied as provided in paragraph
Section 8(a).
(b) If an Event of Default shall occur and be
continuing, (i) SIHL shall have the right to receive any and all cash dividends
paid in respect of any of the Pledged Stock and make application thereof to the
Obligations in such order as SIHL may determine and (ii) any shares of the
Pledged Stock may, at SIHL's election, be registered in the name of SIHL or its
nominee, and SIHL or its nominee may thereafter exercise (A) subject to the
Proxy Agreement, all voting, corporate and other rights, if any, pertaining to
such shares of the Pledged Stock at any meeting of shareholders of SIHL or
otherwise and (B) any and all rights of conversion, exchange, subscription and
any other rights, privileges or options pertaining to such shares of the Pledged
Stock as if it were the absolute owner thereof (including, without limitation,
the right to exchange at its discretion any and all of the Pledged Stock upon
the merger, consolidation, reorganization, recapitalization or other fundamental
change in the corporate structure of SIHL, or upon the exercise by Pledgor or
SIHL of any right, privilege or option pertaining to such shares of the Pledged
Stock, and in connection therewith, the right to deposit and deliver any and all
of the Pledged Stock with any committee, depositary, transfer agent, registrar
or other designated agency upon such terms and conditions as SIHL may
determine), all without liability except to account for property actually
received by it, but SIHL shall have no duty to Pledgor to exercise any such
right, privilege or option and shall not be responsible for any failure to do so
or delay in so doing.
6
8. REMEDIES. (a) If an Event of Default shall have occurred
and be continuing, at any time at SIHL's election, SIHL may apply all or any
part of Proceeds held in any Collateral Account in payment of the Obligations in
such order as SIHL may elect.
(b) If an Event of Default shall occur and be
continuing, SIHL, may exercise, in addition to all other rights and remedies
granted in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a secured
party under the Code. Without limiting the generality of the foregoing, SIHL,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon Pledgor or any other Person (all and each of which demands,
defenses, advertisements and notices are, to the extent permitted by law, hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
assign, give option or options to purchase or otherwise dispose of and deliver
the Collateral or any part thereof (or contract to do any of the foregoing), in
one or more parcels at public or private sale or sales, in the over-the-counter
market, at any exchange, broker's board or office of SIHL or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. SIHL shall have the right upon any such public sale or sales, and,
to the extent permitted by law, upon any such private sale or sales, to purchase
the whole or any part of the Collateral so sold, free of any right or equity of
redemption in Pledgor, which right or equity is hereby waived or released. SIHL
shall apply any Proceeds from time to time held by it and the net proceeds of
any such collection, recovery, receipt, appropriation, realization or sale,
after deducting all reasonable costs and expenses of every kind incurred in
respect thereof or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of SIHL
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements of counsel to SIHL, to the payment in whole or in part of the
Obligations, in such order as SIHL may elect, and only after such application
and after the payment by SIHL of any other amount required by any provision of
law, including, without limitation, Section 9-504(1)(c) of the Code, need SIHL
account for the surplus, if any, to Pledgor. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least ten (10) days before such sale or
other disposition.
9. PRIVATE SALES. (a) Pledgor recognizes that SIHL may be
unable to effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof.
Pledgor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that a private sale shall be deemed
to be a commercially reasonable manner to sell the Collateral. SIHL shall be
under no obligation to delay a sale of any of the Pledged Stock for the period
of time necessary to permit SIHL to
7
register such securities for public sale under the Securities Act, or under
applicable state securities laws.
(b) Pledgor further agrees to use its commercially
reasonable efforts to do or cause to be done all such other acts as may be
necessary to make such sale or sales of all or any portion of the Pledged Stock
pursuant to this Section valid and binding and in compliance with any and all
other applicable requirements of law. Pledgor further agrees that a breach of
any of the covenants contained in this Section will cause irreparable injury to
SIHL, that SIHL has no adequate remedy at law in respect of such breach and, as
a consequence, that each and every covenant contained in this Section shall be
specifically enforceable against Pledgor, and Pledgor hereby waives and agrees
not to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred.
10. NO SUBROGATION. Notwithstanding anything to the contrary
in this Agreement, Pledgor hereby irrevocably waives all rights which may have
arisen in connection with this Pledge Agreement to be subrogated to any of the
rights (whether contractual, under the Bankruptcy Code, including Section 509
thereof, under common law or otherwise) of SIHL against any collateral security
or guarantee or right of offset held by SIHL for the payment of the Obligations.
11. AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS; WAIVER
OF RIGHTS. Pledgor shall remain obligated hereunder, and the Collateral shall
remain subject to the security interests granted hereby, notwithstanding that,
without any reservation of rights against Pledgor, and without notice to or
further assent by Pledgor, any demand for payment of any of the Obligations made
by SIHL may be rescinded by SIHL, and any of the Obligations continued, and the
Obligations, or the liability of SIHL or any other Person upon or for any part
thereof, or any collateral security or guarantee therefor or right of offset
with respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered, or
released by SIHL, and the Omnibus Agreement, the other Related Documents and any
other documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or part, as SIHL may deem
advisable from time to time, and any guarantee, right of offset or other
collateral security at any time held by SIHL for the payment of the Obligations
may be sold, exchanged, waived, surrendered or released. SIHL shall not have any
obligation to protect, secure, perfect or insure any other Lien at any time held
by it as security for the Obligations or any property subject thereto. Pledgor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Obligations and notice of or proof of reliance by SIHL upon this
Agreement; and the Obligations, and any of them, shall be deemed conclusively to
have been created, contracted or incurred in reliance upon this Agreement.
Pledgor waives diligence, presentment, protest, demand for payment and notice of
default or nonpayment to or upon SIHL or Pledgor with respect to the
Obligations. When pursuing its rights and remedies hereunder against Pledgor,
SIHL may, but shall be under no obligation to, pursue such rights and remedies
as it may have against any other Person or against any collateral security or
guarantee for the Obligations or any right of offset with respect
8
thereto, and any failure by SIHL to pursue such other rights or remedies or to
collect any payments from any such other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of any such other Person or of any such collateral security, guarantee
or right of offset, shall not relieve Pledgor of any liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of SIHL against Pledgor or the Collateral owned by
it.
12. SIHL'S APPOINTMENT AS ATTORNEY-IN-FACT. (a) Pledgor hereby
irrevocably constitutes and appoints SIHL and any officer or agent of SIHL, with
full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of Pledgor and in the
name of Pledgor or in SIHL's own name, from time to time in SIHL's discretion,
for the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or appropriate to accomplish the purposes of this Agreement,
including, without limitation, any financing statements, endorsements,
assignments or other instruments of transfer.
(b) Pledgor hereby ratifies all that said attorneys
shall lawfully do or cause to be done pursuant to the power of attorney granted
in Section 12(a). All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.
Notwithstanding the foregoing, SIHL agrees not to exercise any rights as
attorney-in-fact of Pledgor hereunder unless an Event of Default shall have
occurred and be continuing.
13. DUTY OF SIHL. SIHL's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the Code or otherwise, shall be to use
reasonable care and deal with it in the same manner as SIHL deals with similar
securities and property for its own account, except that SIHL shall have no
obligation to invest funds held in any Collateral Account and may hold the same
as demand deposits. Neither SIHL, nor any of its respective directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
Pledgor or any other Person or to take any other action whatsoever with regard
to the Collateral or any part thereof.
14. EXECUTION OF FINANCING STATEMENTS. Pursuant to Section
9-402 of the Code, Pledgor authorizes SIHL to file financing statements with
respect to the Collateral without the signature of Pledgor in such form and in
such filing offices as SIHL reasonably determines appropriate to perfect the
security interests of SIHL under this Agreement. A carbon, photographic or other
reproduction of this Agreement shall be sufficient as a financing statement for
filing in any jurisdiction.
15. NOTICES. All notices, requests and demands to or upon SIHL
or Pledgor to be effective shall be in writing (or by fax or similar electronic
transfer
9
confirmed in writing) and shall be deemed to have been duly given or made (a)
when delivered by hand or (b) if given by mail, when deposited in the mails by
certified mail, return receipt requested, or (c) if by fax or similar electronic
transfer, when sent and receipt has been confirmed, addressed as follows:
(i) if to SIHL, at its address or transmission
number for notices provided in the Omnibus Agreement; and
(ii) if to Pledgor, at its address or transmission
number for notices set forth under its signature below.
SIHL and Pledgor may change their addresses and transmission numbers for notices
by notice in the manner provided in this Section.
16. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
17. AMENDMENTS IN WRITING; NO WAIVER; CUMULATIVE REMEDIES. (a)
None of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
Pledgor to which such amendment, supplement or modification applies and SIHL,
provided that any provision of this Agreement to be enforced against SIHL may be
waived by SIHL in a letter or agreement executed by SIHL or by facsimile
transmission from SIHL.
(b) SIHL shall not by any act (except by a written
instrument pursuant to paragraph 17(a) hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Event of Default or in any breach of any of the terms and
conditions hereof. No failure to exercise, nor any delay in exercising, on the
part of SIHL, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by SIHL of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which SIHL would otherwise have on any future occasion.
(c) The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.
18. SECTION HEADINGS. The section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
10
19. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the successors and assigns of Pledgor and shall inure to the benefit of
SIHL and its successors and assigns.
20. GOVERNING LAW. This Agreement shall be governed by, and
construed and interpreted in accordance with, the law of New York.
21. SUBMISSION TO JURISDICTION; WAIVERS. Pledgor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the court of the State of New York, the courts of the United
States of America for the Southern District of New York, and appellate courts
from any thereof;
(b) consents that any such action or proceeding may
be brought in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action
or proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid, to
Pledgor at its address set forth in subsection 15 or at such other address of
which SIHL shall have been notified pursuant thereto.
(d) agrees that nothing herein shall affect the right
to effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by
law, any right it may have to claim or recover in any legal action or proceeding
referred to in this subjection any special, exemplary, punitive or consequential
damages.
22. WAIVERS OF JURY TRIAL. PLEDGOR AND, BY ITS ACCEPTANCE
HEREOF, SIHL HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER RELATED
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
23. TERMINATION. Upon payment in full of the Obligations, this
Agreement and the security interest in the Collateral granted hereunder shall
automatically terminate; SIHL shall redeliver to Pledgor the Pledged Shares and
all other Collateral remaining in the possession of SIHL or in the Collateral
Account; SIHL shall, at the expense of Pledgor, execute, deliver and file such
Code termination statements and releases as Pledgor may reasonably request and
execute and deliver such other releases
11
and documentation as Pledgor may reasonably request to document the termination
and release of the security interest in the Collateral.
[SIGNATURE PAGE FOLLOWS]
12
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed and delivered as of the date first above written.
ROYALE RESORTS HOLDINGS LIMITED
By: /s/ Derek Aubrey Hawton
Name: Derek Aubrey Hawton
Title: Director
SUN INTERNATIONAL HOTELS LIMITED
By: /s/
--------------------------------
Name:
Title:
13
SCHEDULE 1
TO PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
----------------------------------------------------------------------------------------------------------
PLEDGOR CLASS OF STOCK STOCK CERTIFICATE NO. NO. OF SHARES
------- -------------- -------------------- -------------
----------------------------------------------------------------------------------------------------------
To be completed
EX-12.1
9
a2058552zex-12_1.txt
EXHIBIT 12.1
EXHIBIT 12
SUN INTERNATIONAL HOTELS LIMITED AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In Thousands of Dollars)
FOR THE SIX MONTHS
FOR THE YEARS ENDED DECEMBER 31, ENDED JUNE 30,
----------------------------------------------------- -------------------
ACTUAL ACTUAL
1996 1997 1998 1999 2000 2000 2001
-------- -------- ------- -------- -------- -------- -------
Earnings available for fixed charges:
Earnings (loss) before income taxes and
extraordinary item 46,298 92,333 65,755 79,146 (112,791) 100,143 57,972
Interest and amortization of debt discount
and expense 3,133 24,370 4,516 50,699 45,678 23,320 26,836
Interest element of rentals (A) 568 879 1,187 1,893 1,963 993 1,217
Cash distributions received from equity investees 1,419 1,589 2,061 2,651 2,848 1,686 1,732
Less equity earnings in equity investees (2,530) (2,214) (2,730) (2,628) (4,225) (1,014) (2,804)
Amortization of capitalized interest -- -- -- 1,417 1,580 790 974
-------- -------- ------- -------- -------- -------- -------
Earnings available for fixed charges 48,888 116,957 70,789 133,178 (64,947) 125,918 85,927
-------- -------- ------- -------- -------- -------- -------
Fixed charges:
Interest and amortization of debt discount
and expense 3,133 24,370 4,516 50,699 45,678 23,320 26,836
Capitalized interest 438 6,778 35,304 4,865 11,072 4,558 822
Interest element of rentals (A) 568 879 1,187 1,893 1,963 993 1,217
-------- -------- ------- -------- -------- -------- -------
Total fixed charges 4,139 32,027 41,007 57,457 58,713 28,871 28,875
======== ======== ======= ======== ======== ======== =======
Ratio of earnings to fixed charges (B) 11.81 3.65 1.73 2.32 -- 4.36 2.98
======== ======== ======= ======== ======== ======== =======
(A) The Company estimates the interest component of rent expense to be 0.33.
(B) Earnings were insufficient to cover fixed charges by $123,660,000 for the
year 2000.
EX-21.1
10
a2058552zex-21_1.txt
EXHIBIT 21.1
EXHIBIT 21.1
SUBSIDIARIES OF SUN INTERNATIONAL HOTELS LIMITED
EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER JURISDICTION OF ORGANIZATION
---------------------------------------------------- ----------------------------
Sun International North America, Inc. Delaware
Sun International Bahamas Limited Commonwealth of The Bahamas
Paradise Acquisitions Limited Commonwealth of The Bahamas
Paradise Island Limited Commonwealth of The Bahamas
Paradise Enterprises Limited Commonwealth of The Bahamas
Island Hotel Company Limited Commonwealth of The Bahamas
Paradise Beach Inn Limited Commonwealth of The Bahamas
Sun International Management Limited British Virgin Islands
Sun Cove, Ltd. Connecticut
Sun International Nevada, Inc. Nevada
Sun International Resorts Inc. Florida
PIV, Inc. Florida
ISS, Inc. Florida
Sun International Marketing, Inc. Florida
Sun Cove California, Inc. Delaware
Sun Cove New York, Inc. Delaware
TGC Holding Corp.* Delaware
Sun International New York, Inc. New York
Sun International Development Group, Inc. New Jersey
ESS Zee Corp.* New Jersey
Catalina Corp.* New Jersey
Sun International Timeshare Limited Commonwealth of The Bahamas
Paradise Island Futures Limited Commonwealth of The Bahamas
Sun International Development Limited Commonwealth of The Bahamas
EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER JURISDICTION OF ORGANIZATION
---------------------------------------------------- ----------------------------
Paradise Security Services Limited Commonwealth of The Bahamas
Sunonline Limited Commonwealth of The Bahamas
Bahamas e-Trading Limited Commonwealth of The Bahamas
Sun International Network Data Limited Commonwealth of The Bahamas
Sunonline (IOM) Limited Isle of Man
Sun International Development Commonwealth of The Bahamas
(Timeshare) Limited
Sun Hotels International (Bermuda), Limited Bermuda
Sun International Finance Limited British Virgin Islands
Aberdeen Management Limited Channel Islands
Sun Vacances SA France
Birbo NV Netherlands Antilles
Sun Hotels International Management NV Netherlands Antilles
Purposeful BV Netherlands
Sun International Marketing (UK) Ltd. United Kingdom
Sun International Network Services Limited United Kingdom
* To be dissolved
EX-21.2
11
a2058552zex-21_2.txt
EXHIBIT 21.2
EXHIBIT 21.2
SUBSIDIARIES OF SUN INTERNATIONAL NORTH AMERICA, INC.
SUBSIDIARY JURISDICTION OF ORGANIZATION
---------- ----------------------------
Sun Cove, Ltd. Connecticut
Sun International Nevada, Inc. Nevada
Sun International Resorts Inc. Florida
PIV, Inc. Florida
ISS, Inc. Florida
Sun International Marketing, Inc. Florida
Sun Cove California, Inc. Delaware
Sun Cove New York, Inc. Delaware
TGC Holding Corp.* Delaware
Sun International New York, Inc. New York
Sun International Development New Jersey
Group, Inc.
Ess Zee Corp.* New Jersey
Catalina Corp.* New Jersey
* To be dissolved
EX-23.1
12
a2058552zex-23_1.txt
EXHIBIT 23.1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Sun International Hotels Limited
and Sun International North America, Inc.:
As independent public accountants, we hereby consent to the use of our report
included in this registration statement on Form F-4 and to the incorporation by
reference in this registration statement of our reports dated January 26, 2001
included in Sun International Hotels Limited's Form 20-F and Sun International
North America, Inc.'s Form 10-K for the year ended December 31, 2000 and to all
references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
/s/ Arthur Andersen LLP
Roseland, New Jersey
September 21, 2001
EX-25
13
a2058552zex-25.txt
EXHIBIT 25
Exhibit 25
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
-------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
-------------
Sun International Hotel, Limited
(Exact name of obligor as specified in its charter)
Commonwealth of The Bahamas 98-0136554
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
Sun International North America, Inc.
(Exact name of obligor as specified in its charter)
Commonwealth of The Bahamas 59-0763055
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
10th Floor, 1415 E. Sunrise Blvd.
Ft. Lauderdale, FL 33304
(Address of principal executive offices) (Zip code)
Sun International Bahamas Limited
(Exact name of obligor as specified in its charter)
Commonwealth of The Bahamas Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
Paradise Acquisitions Limited
(Exact name of obligor as specified in its charter)
Commonwealth of The Bahamas Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
Paradise Island Limited
(Exact name of obligor as specified in its charter)
Commonwealth of The Bahamas Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
Paradise Enterprises Limited
(Exact name of obligor as specified in its charter)
Commonwealth of The Bahamas Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
-2-
Island Hotel Company Limited
(Exact name of obligor as specified in its charter)
Commonwealth of The Bahamas Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
Paradise Beach Inn Limited
(Exact name of obligor as specified in its charter)
Commonwealth of The Bahamas Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
Sun International Management Limited
(Exact name of obligor as specified in its charter)
British Virgin Islands Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
Sun Cove, Ltd.
(Exact name of obligor as specified in its charter)
Connecticut 36-4041616
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
10th Floor, 1415 E. Sunrise Blvd.
Ft. Lauderdale, FL 33304
(Address of principal executive offices) (Zip code)
-3-
Sun International Nevada, Inc.
(Exact name of obligor as specified in its charter)
Nevada 65-0922984
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
10th Floor, 1415 E. Sunrise Blvd.
Ft. Lauderdale, FL 33304
(Address of principal executive offices) (Zip code)
Sun International Resorts Inc.
(Exact name of obligor as specified in its charter)
Florida 65-0483525
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
10th Floor, 1415 E. Sunrise Blvd.
Ft. Lauderdale, FL 33304
(Address of principal executive offices) (Zip code)
PIV, Inc.
(Exact name of obligor as specified in its charter)
Florida 65-0483531
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
10th Floor, 1415 E. Sunrise Blvd.
Ft. Lauderdale, FL 33304
(Address of principal executive offices) (Zip code)
ISS, Inc.
(Exact name of obligor as specified in its charter)
Florida 65-0483536
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
10th Floor, 1415 E. Sunrise Blvd.
Ft. Lauderdale, FL 33304
(Address of principal executive offices) (Zip code)
-4-
Sun International Marketing, Inc.
(Exact name of obligor as specified in its charter)
Florida 65-0880994
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
10th Floor, 1415 E. Sunrise Blvd.
Ft. Lauderdale, FL 33304
(Address of principal executive offices) (Zip code)
Sun Cove California, Inc.
(Exact name of obligor as specified in its charter)
Delaware 65-0932228
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
10th Floor, 1415 E. Sunrise Blvd.
Ft. Lauderdale, FL 33304
(Address of principal executive offices) (Zip code)
Sun Cove New York, Inc.
(Exact name of obligor as specified in its charter)
Delaware 65-106978
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
10th Floor, 1415 E. Sunrise Blvd.
Ft. Lauderdale, FL 33304
(Address of principal executive offices) (Zip code)
Sun International New York, Inc.
(Exact name of obligor as specified in its charter)
New York 13-4027976
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
10th Floor, 1415 E. Sunrise Blvd.
Ft. Lauderdale, FL 33304
(Address of principal executive offices) (Zip code)
-5-
Sun International Timeshare Limited
(Exact name of obligor as specified in its charter)
Commonwealth of The Bahamas Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
Paradise Island Futures Limited
(Exact name of obligor as specified in its charter)
Commonwealth of The Bahamas Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
Sun International Development Limited
(Exact name of obligor as specified in its charter)
Commonwealth of The Bahamas Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
Paradise Security Services Limited
(Exact name of obligor as specified in its charter)
Commonwealth of The Bahamas Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
-6-
Sunonline Limited
(Exact name of obligor as specified in its charter)
Isle of Man Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
Bahamas e-Trading Limited
(Exact name of obligor as specified in its charter)
Commonwealth of The Bahamas Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
Sun International Network Data Limited
(Exact name of obligor as specified in its charter)
Commonwealth of The Bahamas Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
Sunonline (IOM) Limited
(Exact name of obligor as specified in its charter)
Commonwealth of The Bahamas Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
-7-
Sun International Development (Timeshare) Limited
(Exact name of obligor as specified in its charter)
Commonwealth of The Bahamas Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
Sun Hotels International (Bermuda), Limited
(Exact name of obligor as specified in its charter)
Bermuda Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
Sun International Finance Limited
(Exact name of obligor as specified in its charter)
British Virgin Islands Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
Aberdeen Management Limited
(Exact name of obligor as specified in its charter)
Channel Islands Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
-8-
Sun Vacances SA
(Exact name of obligor as specified in its charter)
France Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
Birbo NV
(Exact name of obligor as specified in its charter)
Netherlands Antilles Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
Sun Hotels International Management NV
(Exact name of obligor as specified in its charter)
Netherlands Antilles Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
Sun International Development Group, Inc.
(Exact name of obligor as specified in its charter)
New Jersey 65-0746089
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
10th Floor, 1415 E. Sunrise Blvd.
Ft. Lauderdale, FL 33304
(Address of principal executive offices) (Zip code)
-9-
Purposeful BV
(Exact name of obligor as specified in its charter)
Netherlands Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
Sun International Marketing (UK) Ltd.
(Exact name of obligor as specified in its charter)
United Kingdom Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
Sun International Network Services Limited
(Exact name of obligor as specified in its charter)
United Kingdom Not Applicable
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
-------------
8-7/8% Senior Subordinated Notes due 2011
(Title of the indenture securities)
================================================================================
-10-
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
--------------------------------------------------------------------------------
Name Address
--------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany,
N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-11-
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 29th day of August, 2001.
THE BANK OF NEW YORK
By: /s/ MING SHIANG
---------------------------------
Name: MING SHIANG
Title: VICE PRESIDENT
-12-
EXHIBIT 7
--------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 2001,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
In Thousands
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin . $ 2,811,275
Interest-bearing balances .......................... 3,133,222
Securities:
Held-to-maturity securities ........................ 147,185
Available-for-sale securities ...................... 5,403,923
Federal funds sold and Securities purchased under
agreements to resell ............................... 3,378,526
Loans and lease financing receivables:
Loans and leases held for sale ..................... 74,702
Loans and leases, net of unearned
income...............37,471,621
LESS: Allowance for loan and
lease losses............599,061
Loans and leases, net of unearned
income and allowance ............................. 36,872,560
Trading Assets ........................................ 11,757,036
Premises and fixed assets (including capitalized
leases) ............................................ 768,795
Other real estate owned ............................... 1,078
Investments in unconsolidated subsidiaries and
associated companies ............................... 193,126
Customers' liability to this bank on acceptances
outstanding ........................................ 592,118
Intangible assets
Goodwill ........................................... 1,300,295
Other intangible assets ............................ 122,143
Other assets .......................................... 3,676,375
-----------
Total assets .......................................... $70,232,359
===========
LIABILITIES
Deposits:
In domestic offices ................................ $25,962,242
Noninterest-bearing.......................10,586,346
Interest-bearing..........................15,395,896
In foreign offices, Edge and Agreement
subsidiaries, and IBFs ........................... 24,862,377
Noninterest-bearing..........................373,085
Interest-bearing..........................24,489,292
Federal funds purchased and securities sold under
agreements to repurchase ........................... 1,446,874
Trading liabilities ................................... 2,373,361
Other borrowed money:
(includes mortgage indebtedness and obligations
under capitalized leases) .......................... 1,381,512
Bank's liability on acceptances executed and
outstanding ........................................ 592,804
Subordinated notes and debentures ..................... 1,646,000
Other liabilities ..................................... 5,373,065
-----------
Total liabilities ..................................... $63,658,235
===========
EQUITY CAPITAL
Common stock .......................................... 1,135,284
Surplus ............................................... 1,008,773
Retained earnings ..................................... 4,426,033
Accumulated other comprehensive income ................ 4,034
Other equity capital components ....................... 0
---------------------------------------------------------------------
Total equity capital .................................. 6,574,124
-----------
Total liabilities and equity capital .................. $70,232,359
===========
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro,
Senior Vice President and Comptroller
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been
examined by us and to the best of our knowledge and belief has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true and correct.
Thomas A. Renyi
Gerald L. Hassell Directors
Alan R. Griffith
--------------------------------------------------------------------------------
EX-99.1
14
a2058552zex-99_1.txt
EXHIBIT 99.1
EXHIBIT 99.1
LETTER OF TRANSMITTAL
SUN INTERNATIONAL HOTELS LIMITED
SUN INTERNATIONAL NORTH AMERICA, INC.
OFFER FOR ANY AND ALL OUTSTANDING
8 7/8% SENIOR SUBORDINATED NOTES DUE 2011
IN EXCHANGE FOR
REGISTERED 8 7/8% SENIOR SUBORDINATED NOTES DUE 2011
PURSUANT TO THE PROSPECTUS, DATED [ ], 2001
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
[ ], 2001, UNLESS EXTENDED (SUCH DATE AND TIME, AS IT MAY BE
EXTENDED, THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00
P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
DELIVERY TO: THE BANK OF NEW YORK, EXCHANGE AGENT
BY REGISTERED OR CERTIFIED MAIL: BY OVERNIGHT COURIER: BY HAND: BY FACSIMILE:
The Bank of New York The Bank of New York The Bank of New York The Bank of New York
Attention: Reorganization Dept. Attention: Reorganization Reorganization Dept.
101 Barclay Street, 7 East Attention: Corporate Trust Services Attention:
New York, NY 10286 101 Barclay Street, 7 Window, Ground Level (212) 815-6339
East 101 Barclay Street, 7
New York, NY 10286 East CONFIRM BY TELEPHONE
New York, NY 10286 (212) 815-6331
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL
NOT CONSTITUTE A VALID DELIVERY.
The undersigned acknowledges that he or she has received the Prospectus,
dated [ ], 2001 (the "Prospectus"), of Sun International Hotels Limited, a
company organized under the laws of the Commonwealth of The Bahamas ("Sun
International") and Sun International North America, Inc., a Delaware
corporation ("SINA", and, together with Sun International, the "Issuers"), and
this Letter of Transmittal (the "Letter"), which together constitute the
Issuers' offer (the "Exchange Offer") to exchange an aggregate principal amount
of up to $200,000,000 of their 8 7/8% Senior Subordinated Notes due 2011 (the
"New Notes"), which have been registered under the Securities Act of 1933, as
amended (the "Securities Act") for a like principal amount at maturity of the
Issuers' issued and outstanding 8 7/8% Senior Subordinated Notes due 2011 (the
"Old Notes"). Capitalized terms used but not defined herein shall have the same
meaning given them in the Prospectus.
YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE INSTRUCTIONS
INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED. QUESTIONS OR REQUESTS
FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF
TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT.
The Issuers reserve the right, at any time or from time to time, to extend
the Exchange Offer at their discretion, in which event the term "Expiration
Date" shall mean the latest time and date to which the Exchange Offer is
extended. The Issuers shall notify the holders of the Old Notes of any extension
as promptly as practicable by oral or written notice thereof.
This Letter is to be completed by holders of Old Notes either if
certificates are to be forwarded herewith or if a tender of Old Notes is to be
made by book-entry transfer, if available, to the account maintained by the
Exchange Agent at The Depository Trust Company (the "Book-Entry Transfer
Facility") pursuant to the procedures set forth in "The Exchange Offer" section
of the Prospectus. Holders of Old Notes whose certificates are not immediately
available, or who are unable to deliver their certificates or confirmation of
the book-entry tender of their Old Notes into the Exchange Agent's account at
the Book-Entry Transfer Facility (a "Book-Entry Confirmation") and all other
documents required by this Letter to the Exchange Agent on or prior to the
Expiration Date, must tender their Old Notes according to the guaranteed
delivery procedures set forth in "The Exchange Offer--Guaranteed Delivery
Procedures" section of the Prospectus. See Instruction 1. Delivery of documents
to the Book-Entry Transfer Facility does not constitute delivery to the Exchange
Agent.
2
The undersigned has completed the appropriate boxes below and signed this
Letter to indicate the action the undersigned desires to take with respect to
the Exchange Offer.
List below the Old Notes to which this Letter relates. If the space provided
below is inadequate, the certificate numbers and principal amount of Old Notes
should be listed on a separate signed schedule affixed hereto.
-----------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD NOTES
-----------------------------------------------------------------------------------------------------------
(1) (2) (3)
-----------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(S) OF REGISTERED HOLDER(S) CERTIFICATE AGGREGATE PRINCIPAL
(PLEASE FILL IN, IF BLANK) NUMBER(S)* PRINCIPAL AMOUNT
AMOUNT OF TENDERED**
OLD NOTES
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
TOTAL
-----------------------------------------------------------------------------------------------------------
* Need not be completed if Old Notes are being tendered by book-entry transfer.
** Unless otherwise indicated in this column, a holder will be deemed to have tendered ALL of the Old Notes
represented by the Old Notes indicated in column 2. See Instruction 2. Old Notes tendered must be in
denominations of $1,000 and any integral multiple thereof. See Instruction 1.
-----------------------------------------------------------------------------------------------------------
/ / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution ______________________________________________
Account Number __________________ Transaction Code Number __________________
/ / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Holder(s) ____________________________________________
Window Ticket Number (if any) ______________________________________________
Date of Execution of Notice of Guaranteed Delivery _________________________
Name of Institution which guaranteed delivery ______________________________
IF DELIVERED BY BOOK-ENTRY TRANSFER, COMPLETE THE FOLLOWING:
Account Number ___________________Transaction Code Number __________________
/ / CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name: ______________________________________________________________________
Address: ___________________________________________________________________
________________________________________
3
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Issuers the aggregate principal amount of Old
Notes indicated above. Subject to, and effective upon, the acceptance for
exchange of the Old Notes tendered hereby, the undersigned hereby sells, assigns
and transfers to, or upon the order of, the Issuers all right, title and
interest in and to such Old Notes as are being tendered hereby.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Old Notes tendered
hereby and that the Issuers will acquire good and unencumbered title thereto,
free and clear of all liens, restrictions, charges and encumbrances and not
subject to any adverse claim when the same are accepted by the Issuers. The
undersigned hereby further represents that any New Notes acquired in exchange
for Old Notes tendered hereby will have been acquired in the ordinary course of
business of the person receiving such New Notes, whether or not such person is
the undersigned, that neither the holder of such Old Notes nor any such other
person is engaged in, or intends to engage in a distribution of such New Notes,
or has an arrangement or understanding with any person to participate in the
distribution of such New Notes, and that neither the holder of such Old Notes
nor any such other person is an "affiliate," as defined in Rule 405 under the
Securities Act, of the Issuers.
The undersigned also acknowledges that this Exchange Offer is being made by
the Issuers based upon the Issuers' understanding of an interpretation by the
staff of the Securities and Exchange Commission (the "Commission") as set forth
in no-action letters issued to third parties, that the New Notes issued in
exchange for the Old Notes pursuant to the Exchange Offer may be offered for
resale, resold and otherwise transferred by holders thereof (other than any such
holder that is an "affiliate" of the Issuers within the meaning of Rule 405
under the Securities Act), without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that: (1) such
holders are not affiliates of the Issuers within the meaning of Rule 405 under
the Securities Act; (2) such New Notes are acquired in the ordinary course of
such holders' business; and (3) such holders are not engaged in, and do not
intend to engage in, a distribution of such New Notes and have no arrangement or
understanding with any person to participate in the distribution of such New
Notes. However, the staff of the Commission has not considered the Exchange
Offer in the context of a no-action letter, and there can be no assurance that
the staff of the Commission would make a similar determination with respect to
the Exchange Offer as in other circumstances. If a holder of Old Notes is an
affiliate of the Issuers, and is engaged in or intends to engage in a
distribution of the New Notes or has any arrangement or understanding with
respect to the distribution of the New Notes to be acquired pursuant to the
Exchange Offer, such holder could not rely on the applicable interpretations of
the staff of the Commission and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any secondary
resale transaction. If the undersigned is a broker-dealer that will receive New
Notes for its own account in exchange for Old Notes, it represents that the Old
Notes to be exchanged for the New Notes were acquired by it as a result of
market-making activities or other trading activities and acknowledges that it
will deliver a prospectus in connection with any resale of such New Notes;
however, by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Issuers to be necessary or desirable to complete the
sale, assignment and transfer of the Old Notes tendered hereby. All authority
conferred or agreed to be conferred in this Letter and every obligation of the
undersigned hereunder shall be binding upon the successors, assigns, heirs,
executors, administrators, trustees in bankruptcy and legal representatives of
the undersigned and shall not be affected by, and shall survive, the death or
incapacity of the undersigned. This tender may be withdrawn only in accordance
with the procedures set forth in "The Exchange Offer--Withdrawal of Tenders"
section of the Prospectus.
4
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, please deliver the New Notes in the name of the undersigned
or, in the case of a book-entry delivery of Old Notes, please credit the account
indicated above maintained at the Book-Entry Transfer Facility. Similarly,
unless otherwise indicated under the box entitled "Special Delivery
Instructions" below, please send the New Notes (and, if applicable, substitute
certificates representing Old Notes for any Old Notes not exchanged) to the
undersigned at the address shown above in the box entitled "Description of Old
Notes."
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD NOTES"
ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE OLD NOTES AS
SET FORTH IN SUCH BOX ABOVE.
-------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if certificates for Old Notes not tendered and/or
New Notes are to be issued in the name of and sent to someone other than the
person(s) whose signature(s) appear(s) on this Letter, or if Old Notes
delivered by book-entry transfer which are not accepted for exchange are to
be returned by credit to an account maintained at the Book-Entry Transfer
Facility other than the account indicated above.
ISSUE NEW NOTES AND/OR OLD NOTES TO:
Name: ______________________________________________________________________
(PLEASE PRINT)
__________________________________________________________________________
(PLEASE PRINT)
Address: ___________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
(COMPLETE ACCOMPANYING FORM W-9)
/ / Credit unexchanged Old Notes delivered by book-entry transfer to the
Book-Entry Transfer Facility account set forth below.
____________________________________________________________________________
(BOOK-ENTRY TRANSFER FACILITY
ACCOUNT NUMBER, IF APPLICABLE)
------------------------------------------------------
------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if certificates for Old Notes not tendered and/or New
Notes are to be sent to someone other than the person(s) whose signature(s)
appear(s) on this Letter or to such person(s) at an address other than shown
in the box entitled "Description of Old Notes" on this Letter above.
MAIL: NEW NOTES AND/OR OLD NOTES TO:
Name(s): ___________________________________________________________________
(PLEASE PRINT)
__________________________________________________________________________
(PLEASE PRINT)
Address: ___________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
----------------------------------
IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF (TOGETHER WITH THE CERTIFICATES
FOR OLD NOTES OR A BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED
DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY) MUST BE RECEIVED BY
THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE
EXPIRATION DATE.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE
COMPLETING ANY BOX ABOVE.
5
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(COMPLETE ACCOMPANYING FORM W-9)
Dated: , 2001
x: , 2001
x: , 2001
(SIGNATURE(S) OF OWNER(S)) (DATE)
Area Code and Telephone Number: ________________________________________________
If a holder is tendering any Old Notes, this Letter must be signed by the
registered holder(s) as the name(s) appear(s) on the certificate(s) for the Old
Notes or by any person(s) authorized to become registered holder(s) by
endorsements and documents transmitted herewith. If signature is by trustee,
executor, administrator, guardian, officer or other person acting in a fiduciary
or representative capacity, please set forth full title. See Instruction 3.
Name(s): _______________________________________________________________________
________________________________________________________________________________
(PLEASE TYPE OR PRINT)
Capacity: ______________________________________________________________________
Address: _______________________________________________________________________
(INCLUDING ZIP CODE)
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 3)
Signature Guaranteed by
an Eligible Institution: _______________________________________________________
(AUTHORIZED SIGNATURE)
________________________________________________________________________________
(TITLE)
________________________________________________________________________________
(NAME OF FIRM)
Date: ____________________________________________________________________, 2001
6
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER TO EXCHANGE
OUTSTANDING 8 % SENIOR SUBORDINATED NOTES DUE 2011 FOR
REGISTERED 8 % SENIOR SUBORDINATED NOTES DUE 2011
OF SUN INTERNATIONAL HOTELS LIMITED
AND
SUN INTERNATIONAL NORTH AMERICA, INC.
1. DELIVERY OF THIS LETTER AND NOTES; GUARANTEED DELIVERY PROCEDURES.
This Letter is to be completed by holders of Old Notes either if
certificates are to be forwarded herewith or if tenders are to be made pursuant
to the procedures for delivery by book-entry transfer set forth in "The Exchange
Offer--Procedures for Tendering" section of the Prospectus. Certificates for all
physically tendered Old Notes, or Book-Entry Confirmation, as the case may be,
as well as a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) and any other documents required by this Letter, must be
received by the Exchange Agent at the address set forth herein on or prior to
the Expiration Date, or the tendering holder must comply with the guaranteed
delivery procedures set forth below. Old Notes tendered hereby must be in
denominations of $1,000 and any integral multiple thereof.
Holders of Old Notes whose certificates for Old Notes are not immediately
available or who cannot deliver their certificates and all other required
documents to the Exchange Agent on or prior to the Expiration Date, or who
cannot complete the procedure for book-entry transfer on a timely basis, may
tender their Old Notes pursuant to the guaranteed delivery procedures set forth
in "The Exchange Offer--Guaranteed Delivery Procedures" section of the
Prospectus. Pursuant to such procedures, (i) such tender must be made through an
Eligible Institution (as defined below), (ii) prior to the Expiration Date, the
Exchange Agent must receive from such Eligible Institution a properly completed
and duly executed Letter (or facsimile thereof) and Notice of Guaranteed
Delivery, substantially in the form provided by the Issuers (by facsimile
transmission, mail or hand delivery), setting forth the name and address of the
holder of Old Notes, the certificate number or numbers of such Old Notes and the
principal amount of Old Notes tendered, stating that the tender is being made
thereby and guaranteeing that within five business days after the Expiration
Date, the Letter (or facsimile thereof), together with the certificate or
certificates representing the Old Notes to be tendered in proper form for
transfer, or a Book-Entry Confirmation, as the case may be, and any other
documents required by this Letter will be deposited by the Eligible Institution
with the Exchange Agent, and (iii) such properly completed and executed Letter
(or facsimile thereof), as well as the certificate or certificates representing
all tendered Old Notes in proper form for transfer, or a Book-Entry
Confirmation, as the case may be, and all other documents required by this
Letter are received by the Exchange Agent within three business days after the
Expiration Date.
The method of delivery of this Letter, the Old Notes and all other required
documents is at the election and risk of the tendering holders. Instead of
delivery by mail, it is recommended that holders use an overnight or hand
delivery service. In all cases, sufficient time should be allowed to assure
delivery to the Exchange Agent before the Expiration Date. No Letter of
Transmittal or Old Notes should be sent to the Issuers. Holders may request
their respective brokers, dealers, commercial banks, trust companies or nominees
to effect the tenders for such holders.
See "The Exchange Offer" section of the Prospectus.
2. PARTIAL TENDERS; WITHDRAWALS.
If less than all of the Old Notes evidenced by a submitted certificate are
to be tendered, the tendering holder(s) should fill in the aggregate principal
amount of Old Notes tendered in the box
7
entitled "Description of Old Notes--Principal Amount Tendered." A newly issued
certificate for the Old Notes submitted but not tendered will be sent to such
holder as soon as practicable after the Expiration Date. All Old Notes delivered
to the Exchange Agent will be deemed to have been tendered unless otherwise
clearly indicated.
If not yet accepted, a tender pursuant to the Exchange Offer may be
withdrawn prior to the Expiration Date. To be effective with respect to the
tender of Old Notes, a notice of withdrawal must: (i) be received by the
Exchange Agent before the Issuers notify the Exchange Agent that they have
accepted the tender of Old Notes pursuant to the Exchange Offer; (ii) specify
the name of the Old Notes; (iii) contain a description of the Old Notes to be
withdrawn, the certificate numbers shown on the particular certificates
evidencing such Old Notes and the principal amount of Old Notes represented by
such certificates; and (iv) be signed by the holder in the same manner as the
original signature on this Letter (including any required signature guarantee).
The Exchange Agent will return the properly withdrawn Old Notes promptly
following receipt of notice of withdrawal. If Old Notes have been tendered
pursuant to the procedure for book-entry transfer, any notice of withdrawal must
specify the name and number of the account at the Book-Entry Transfer Facility
to be credited with the withdrawn Old Notes or otherwise comply with the
Book-Entry Transfer Facility's procedures. All questions as to the validity of
notices of withdrawals, including time of receipt, will be determined by the
Issuers, and such determination will be final and binding on all parties.
3. SIGNATURES ON THIS LETTER, BOND POWERS AND ENDORSEMENTS; GUARANTEE OF
SIGNATURES.
If this Letter is signed by the registered holder of the Old Notes tendered
hereby, the signature must correspond exactly with the name as written on the
face of the certificates without alteration, enlargement or any change
whatsoever.
If any tendered Old Notes are owned of record by two or more joint owners,
all such owners must sign this Letter.
If any tendered Old Notes are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
copies of this Letter as there are different registrations of certificates.
When this Letter is signed by the registered holder (which term, for the
purposes described herein, shall include the Book-Entry Transfer Facility whose
name appears on a security listing as the owner of the Old Notes) of the Old
Notes specified herein and tendered hereby, no endorsements of certificates or
separate bond powers are required. If, however, the New Notes are to be issued
to a person other than the registered holder, then endorsements of any
certificates transmitted hereby or separate bond powers are required. Signatures
on such certificate(s) must be guaranteed by an Eligible Institution (as defined
below).
If this Letter is signed by a person other than the registered holder or
holders of any Old Notes specified therein, such certificate(s) must be endorsed
by such registered holder(s) or accompanied by separate written instruments of
transfer or exchange or endorsed in blank by such registered holder(s) in form
satisfactory to the Issuers and duly executed by the registered holder, in
either case signed exactly as such registered holder(s) name or names appear(s)
on the Old Notes.
If the Letter or any certificates of Old Notes or separate written
instruments of transfer or exchange are signed or endorsed by trustees,
executors, administrators, guardians, attorney-in-fact, officers of corporations
or others acting in a fiduciary or representative capacity, such persons should
so indicate when signing, and unless waived by the Issuers, evidence
satisfactory to the Issuers of their authority to so act must be submitted with
the Letter.
Signature on a Letter or a notice of withdrawal, as the case may be, must be
guaranteed by an Eligible Institution unless the Old Notes tendered pursuant
thereto are tendered (i) by a registered
8
holder who has not completed the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" on the Letter or (ii) for the account of an
Eligible Institution. In the event that signatures on a Letter or a notice of
withdrawal, as the case may be, are required to be guaranteed, such guarantee
must be by a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc., a commercial bank or trust
company having an office or correspondent in the United States or an "eligible
guarantor institution" within the meaning of Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended (an "Eligible Institution").
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.
Tendering holders of Old Notes should indicate in the applicable box the
name and address to which New Notes issued pursuant to the Exchange Offer are to
be issued or sent, if different from the name or address of the person signing
this Letter. In the case of issuance in a different name, the employer
identification or social security number of the person named must also be
indicated. Holders tendering Old Notes by book-entry transfer may request that
Old Notes not exchanged be credited to such account maintained at the Book-Entry
Transfer Facility as such noteholder may designate hereon. If no such
instructions are given, such Old Notes not exchanged will be returned to the
name or address of the person signing this Letter.
5. TAX IDENTIFICATION NUMBER.
Federal income tax law generally requires that a tendering holder whose Old
Notes are accepted for exchange must provide the Issuers (as payor) with such
holder's correct Taxpayer Identification Number ("TIN") on Form W-9 or otherwise
establish a basis for exemption from backup withholding. If such holder is an
individual, the TIN is his or her social security number. If the Issuers are not
provided with the current TIN or an adequate basis for an exemption, such
tendering holder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, delivery to such tendering holder of New Notes may be
subject to backup withholding in an amount up to 31% of all reportable payments
made after the exchange.
Certain holders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. See the enclosed Form W-9 for additional instructions.
To prevent backup withholding, each tendering holder of Old Notes must
provide its correct TIN by completing the "Form W-9" set forth below, certifying
that the TIN provided is correct (or that such holder is awaiting a TIN) and
that (i) the holder is exempt from backup withholding, (ii) the holder has not
been notified by the Internal Revenue Service that such holder is subject to a
backup withholding as a result of a failure to report all interest or dividends
or (iii) the Internal Revenue Service has notified the holder that such holder
is no longer subject to backup withholding. If the tendering holder of Old Notes
is a nonresident alien or foreign entity not subject to backup withholding, such
holder must give the Issuers a completed Form W-8BEN, Certificate of Foreign
Status. These forms may be obtained from the Exchange Agent. If the Old Notes
are in more than one name or are not in the name of the actual owner, such
holder should consult the W-9 for information on which TIN to report. If such
holder does not have a TIN, such holder should consult the W-9 for instructions
on applying for a TIN, write "applied for" in lieu of its TIN. Note: writing
"applied for" on the form means that such holder has already applied for a TIN
or that such holder intends to apply for one in the near future. If a holder
writes "applied for" on that form, backup withholding at a rate of up to 31%
will nevertheless apply to all reportable payments made to such holder. If such
a holder furnishes its TIN to the Issuers within 60 days, however, any amounts
so withheld shall be refunded to such holder.
9
Backup withholding is not an additional Federal income tax. Rather, the
Federal income tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in overpayment of
taxes, a refund may be obtained from the Internal Revenue Service.
6. TRANSFER TAXES.
Holders who tender their Old Notes for exchange will not be obligated to pay
any transfer taxes in connection therewith. If, however, New Notes are to be
delivered to, or are to be issued in the name of, any person other than the
registered holder of the Old Notes tendered hereby, or if tendered Old Notes are
registered in the name of any person other than the person signing this Letter,
or if a transfer tax is imposed for any reason other than the exchange of Old
Notes in connection with the Exchange Offer, the amount of any such transfer
taxes (whether imposed on the registered holder or any other persons) will be
payable by the tendering holder. If satisfactory evidence of payment of such
taxes or exemption therefrom is not submitted herewith, the amount of such
transfer taxes will be billed directly to such tendering holder.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE OLD NOTES SPECIFIED IN THIS LETTER.
7. WAIVER OF CONDITIONS.
The Issuers reserve the right to waive satisfaction of any or all conditions
enumerated in the Prospectus.
8. NO CONDITIONAL TENDERS.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders of Old Notes by execution of this Letter, shall
waive any right to receive notice of the acceptance of their Old Notes for
exchange.
Neither the Issuers, the Exchange Agent nor any other person is obligated to
give notice of any defect or irregularity with respect to any tender of Old
Notes nor shall any of them incur any liability for failure to give any such
notice.
9. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES.
Any holder whose Old Notes have been mutilated, lost, stolen or destroyed
should contact the Exchange Agent at the address indicated above for further
instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering, as well as requests for
additional copies of the Prospectus and this Letter, may be directed to the
Exchange Agent, at the address and telephone number indicated above.
10
EX-99.2
15
a2058552zex-99_2.txt
EXHIBIT 99.2
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
SUN INTERNATIONAL HOTELS LIMITED
SUN INTERNATIONAL NORTH AMERICA, INC.
This form or one substantially equivalent hereto must be used to accept the
Exchange Offer of Sun International Hotels Limited ("Sun International") and Sun
International North America, Inc. ("SINA", and, together with Sun International,
the "Issuers") made pursuant to the Prospectus, dated [ ], 2001 (the
"Prospectus"), and the related Letter of Transmittal (the "Letter of
Transmittal") if certificates for Old Notes of the Issuers are not immediately
available or if the procedure for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Exchange Agent prior to 5:00 P.M., New York City time, on the Expiration Date of
the Exchange Offer. Such form may be delivered or transmitted by facsimile
transmission, mail or hand delivery to The Bank of New York (the "Exchange
Agent") as set forth below. In addition, in order to utilize the guaranteed
delivery procedure to tender Old Notes pursuant to the Exchange Offer, a
completed, signed and dated Letter of Transmittal (or facsimile thereof) must
also be received by the Exchange Agent prior to 5:00 P.M., New York City time,
on the Expiration Date. Capitalized terms not defined herein are defined in the
Letter of Transmittal.
DELIVERY TO: THE BANK OF NEW YORK, EXCHANGE AGENT
BY REGISTERED OR CERTIFIED BY OVERNIGHT COURIER: BY HAND: BY FACSIMILE:
MAIL:
The Bank of New York The Bank of New York The Bank of New York The Bank of New York
Attention: Reorganization Dept. Attention: Reorganization Reorganization Dept.
101 Barclay Street, 7 East Attention: Corporate Trust Services Attention:
New York, NY 10286 101 Barclay Street, 7 East Window, Ground Level (212) 815-6339
New York, NY 10286 101 Barclay Street, 7 East
New York, NY 10286 CONFIRM BY TELEPHONE
(212) 815-6331
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL
NOT CONSTITUTE A VALID DELIVERY.
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to the
Issuers the principal amount of Old Notes set forth below, pursuant to the
guaranteed delivery procedure described in "The Exchange Offer--Guaranteed
Delivery Procedures" section of the Prospectus.
Principal Amount of Old Notes Tendered:*
$
Certificate Nos. (if available): If Old Notes will be delivered by book-entry
transfer to The Depository Trust Company, provide
account number.
Total Principal Amount Represented by Old Notes
Certificate(s):
$ Account Number
* Must be in denominations of $1,000 and any integral multiple thereof.
ALL AUTHORITY HEREIN CONFERRED OR AGREED TO BE CONFERRED SHALL SURVIVE THE DEATH
OR INCAPACITY OF THE UNDERSIGNED, AND EVERY OBLIGATION OF THE UNDERSIGNED
HEREUNDER SHALL BE BINDING UPON THE HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS
AND ASSIGNS OF THE UNDERSIGNED.
PLEASE SIGN HERE
x:
x:
SIGNATURE(S) OF OWNER(S) DATE
OR AUTHORIZED SIGNATORY
Area Code and Telephone Number:____________________________________________
Must be signed by the holder(s) of the Old Notes as the name(s) of such
holder(s) appear(s) on the certificate(s) for the Old Notes or on a security
position listing, or by person(s) authorized to become registered holder(s) by
endorsement and documents transmitted with this Notice of Guaranteed Delivery.
If any signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title below.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s):
Capacity:
Address(es):
GUARANTEE
The undersigned is a member of a registered national securities exchange, or
a member of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or correspondent in the United
States, or an "eligible guarantor institution" within the meaning of Rule
17Ad-15 of the Securities Exchange Act of 1934, as amended, and hereby
guarantees that the certificates representing the principal amount of Old Notes
tendered hereby in proper form for transfer, or timely confirmation of the
book-entry transfer of such Old Notes into the Exchange Agent's account at The
Bank of New York pursuant to the procedures set forth in "The Exchange Offer--
Guaranteed Delivery Procedures" section of the Prospectus, together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) with any required signature guarantee and any other documents required
by the Letter of Transmittal, will be received by the Exchange Agent at the
address set forth above, within three New York Stock Exchange trading days after
the Expiration Date.
(NAME OF FIRM) (AUTHORIZED SIGNATURE)
(ADDRESS) (TITLE)
Name:
(ZIP CODE) (PLEASE TYPE OR PRINT)
Area Code and Tel. No.: Dated:
NOTE: DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS FORM. CERTIFICATES FOR
OLD NOTES SHOULD ONLY BE SENT WITH YOUR LETTER OF TRANSMITTAL.
2
EX-99.3
16
a2058552zex-99_3.txt
EXHIBIT 99.3
EXHIBIT 99.3
SUN INTERNATIONAL HOTELS LIMITED
SUN INTERNATIONAL NORTH AMERICA, INC.
OFFER FOR ANY AND ALL OUTSTANDING
8 7/8% SENIOR SUBORDINATED NOTES DUE 2011
IN EXCHANGE FOR
REGISTERED 8 7/8% SENIOR SUBORDINATED NOTES DUE 2011
To Our Clients:
Enclosed for your consideration is a Prospectus, dated [ ], 2001
(the "Prospectus"), and the related Letter of Transmittal (the "Letter of
Transmittal"), relating to the offer (the "Exchange Offer") of Sun International
Hotels Limited ("Sun International") and Sun International North America, Inc.
("SINA", and, together with Sun International, the "Issuers") to exchange their
8 7/8% Senior Subordinated Notes due 2011, which have been registered under the
Securities Act of 1933, as amended, for their outstanding 8 % Senior
Subordinated Notes due 2011 (the "Old Notes"), upon the terms and subject to the
conditions described in the Prospectus and the Letter of Transmittal. The
Exchange Offer is being made in order to satisfy certain obligations of the
Issuers contained in the Registration Rights Agreement dated as of August 14,
2001 among the Issuers, the guarantors referred to therein and the initial
purchasers referred to therein.
This material is being forwarded to you as the beneficial owner of the Old
Notes carried by us in your account but not registered in your name. A TENDER OF
SUCH OLD NOTES MAY ONLY BE MADE BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS.
Accordingly, we request instructions as to whether you wish us to tender on
your behalf the Old Notes held by us for your account, pursuant to the terms and
conditions set forth in the enclosed Prospectus and Letter of Transmittal.
Your instructions should be forwarded to us as promptly as possible in order
to permit us to tender the Old Notes on your behalf in accordance with the
provisions of the Exchange Offer. The Exchange Offer will expire at 5:00 p.m.,
New York City time, on [ ], 2001 (the "Expiration Date") unless extended by
the Issuers. Any Old Notes tendered pursuant to the Exchange Offer may be
withdrawn at any time before 5:00 p.m., New York City time, on the Expiration
Date.
Your attention is directed to the following:
1. The Exchange Offer is for any and all Old Notes.
2. The Exchange Offer is subject to certain conditions set forth in the
Prospectus in the section captioned "The Exchange Offer--Conditions to
the Exchange Offer" and in the Letter of Transmittal.
3. The Exchange Offer expires at 5:00 p.m., New York City time, on the
Expiration Date, unless extended by the Issuers.
If you wish to tender your Old Notes, please so instruct us by completing,
executing and returning to us the instruction form on the back of this letter.
THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR INFORMATION ONLY AND MAY NOT
BE USED DIRECTLY BY YOU TO TENDER OLD NOTES.
INSTRUCTIONS WITH RESPECT TO
THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offer made by Sun
International Hotels Limited and Sun International North America, Inc. with
respect to their Old Notes.
This will instruct you to tender the Old Notes held by you for the account
of the undersigned, upon and subject to terms and conditions set forth in the
Prospectus and the related Letter of Transmittal.
Please tender the Old Notes held by you for my account as indicated below:
AGGREGATE PRINCIPAL AMOUNT
OF OLD NOTES
8 % Senior Notes due 2011 --------------------------------------------
(must be an integral multiple of $1,000)
/ / Please do not tender any Old Notes held
by you for my account.
Dated: , 2001 --------------------------------------------
--------------------------------------------
SIGNATURE(S)
---------------------------------------------
---------------------------------------------
---------------------------------------------
PLEASE PRINT NAME(S) HERE
---------------------------------------------
---------------------------------------------
ADDRESS(ES)
---------------------------------------------
AREA CODE(S) AND TELEPHONE NUMBER(S)
---------------------------------------------
TAX IDENTIFICATION OR SOCIAL SECURITY NO(S).
None of the Old Notes held by us for your account will be tendered unless we
receive written instructions from you to do so. Unless a specific contrary
instruction is given in the space provided, your signature(s) hereon shall
constitute an instruction to us to tender all the Old Notes held by us for your
account.
2
EX-99.4
17
a2058552zex-99_4.txt
EXHIBIT 99.4
EXHIBIT 99.4
SUN INTERNATIONAL HOTELS LIMITED
SUN INTERNATIONAL NORTH AMERICA, INC.
OFFER FOR ANY AND ALL OUTSTANDING
8 7/8% SENIOR SUBORDINATED NOTES DUE 2011
IN EXCHANGE FOR
REGISTERED 8 7/8% SENIOR SUBORDINATED NOTES DUE 2011
To: Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees
Sun International Hotels Limited ("Sun International") and Sun International
North America, Inc. ("SINA", and, together with Sun International, the
"Issuers") are offering to exchange (the "Exchange Offer"), upon and subject to
the terms and conditions set forth in the Prospectus, dated [ ], 2001 (the
"Prospectus"), and the related Letter of Transmittal (the "Letter of
Transmittal"), their 8 % Senior Subordinated Notes due 2011, which have been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
for their outstanding 8 % Senior Subordinated Notes due 2011 (the "Old Notes").
The Exchange Offer is being made in order to satisfy certain obligations of the
Issuers contained in the Registration Rights Agreement dated as of August 14,
2001, among the Issuers, the guarantors referred to therein and the initial
purchasers referred to therein.
We are requesting that you contact your clients for whom you hold Old Notes
regarding the Exchange Offer. For your information and for forwarding to your
clients for whom you hold Old Notes registered in your name or in the name of
your nominee, or who hold Old Notes registered in their own names, we are
enclosing the following documents:
1. Prospectus dated [ ], 2001;
2. The Letter of Transmittal for your use and for the information of your
clients;
3. A Notice of Guaranteed Delivery to be used to accept the Exchange Offer
if certificates for Old Notes are not immediately available or time will
not permit all required documents to reach the Exchange Agent prior to
the Expiration Date (as defined below) or if the procedure for book-entry
transfer cannot be completed on a timely basis;
4. A form of letter which may be sent to your clients for whose account you
hold Old Notes registered in your name or the name of your nominee, with
space provided for obtaining such clients' instructions with regard to
the Exchange Offer;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelopes addressed to The Bank of New York, the Exchange Agent
for the Old Notes.
YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFER WILL EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON [ ], 2001 (THE "EXPIRATION DATE"), UNLESS
EXTENDED BY THE ISSUERS. THE OLD NOTES TENDERED PURSUANT TO THE EXCHANGE OFFER
MAY BE WITHDRAWN AT ANY TIME BEFORE 5:00 P.M., NEW YORK CITY TIME, ON THE
EXPIRATION DATE.
To participate in the Exchange Offer, a duly executed and properly completed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees and any other required documents, should be sent to the Exchange
Agent and certificates representing the Old Notes should be delivered to the
Exchange Agent, all in accordance with the instructions set forth in the Letter
of Transmittal and the Prospectus.
If holders of Old Notes wish to tender, but it is impracticable for them to
forward their certificates for Old Notes prior to the expiration of the Exchange
Offer or to comply with the book-entry transfer
procedures on a timely basis, a tender may be effected by following the
guaranteed delivery procedures described in the Prospectus under "The Exchange
Offer--Guaranteed Delivery Procedures."
Any inquiries you may have with respect to the Exchange Offer, or requests
for additional copies of the enclosed materials should be directed to the
Exchange Agent for the Old Notes, at its address and telephone number set forth
on the front of the Letter of Transmittal.
Very truly yours,
Sun International Hotels Limited
Sun International North America, Inc.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON AS AN AGENT OF THE ISSUERS OR THE EXCHANGE AGENT, OR AUTHORIZE
YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF
EITHER OF THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS
EXPRESSLY MADE IN THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.
Enclosures
EX-99.5
18
a2058552zex-99_5.txt
EXHIBIT 99.5
EXHIBIT 99.5
Form W-9 REQUEST FOR TAXPAYER GIVE FORM TO THE
(Rev. December 2000) IDENTIFICATION NUMBER AND CERTIFICATION REQUESTER. DO NOT
Department of the SEND TO THE IRS.
Treasury
Internal Revenue
Service
-------------------------------------------------------------------------------------------------------------
Name (See SPECIFIC INSTRUCTIONS on page 2.)
-------------------------------------------------------------------------------------------------------------
Business name, if different from above. (See SPECIFIC INSTRUCTIONS on page 2.)
-------------------------------------------------------------------------------------------------------------
Check appropriate box: / / Individual/Sole proprietor / / Corporation / / Partnership
/ / Other > .........................................................................................
--------------------------------------------------------------------------------------------------------------------
Address (number, street, and apt. or suite no.) Requester's name and address (optional)
------------------------------------------------------------
City, state, and ZIP code
--------------------------------------------------------------------------------------------------------------------
PART I. TAXPAYER IDENTIFICATION NUMBER (TIN) List account number(s) here (optional)
------------------------------------------------------------
Enter your TIN in the appropriate box. For individuals,
this
is your social security number (SSN). HOWEVER, FOR A
RESIDENT ALIEN, SOLE PROPRIETOR, OR DISREGARDED ENTITY,
SEE THE PART I INSTRUCTIONS ON PAGE 2. For other entities,
it is your employer identification number (EIN). If you do
not have a number, see HOW TO GET A TIN on page 2.
NOTE: IF THE ACCOUNT IS IN MORE THAN ONE NAME, SEE THE
CHART ON PAGE 2 FOR GUIDELINES ON WHOSE NUMBER TO ENTER.
PART II. FOR U.S. PAYEES EXEMPT FROM BACKUP
WITHHOLDING (See the instructions on page
2.)
-------------------------------------------------------
>
SOCIAL SECURITY NUMBER
[][][]-[][]-[][][][]
OR
EMPLOYMENT IDENTIFICATION NUMBER
[][]-[][][][][][]
--------------------------------------------------------------------------------
PART III. CERTIFICATION
--------------------------------------------------------------------------------
Under penalties of perjury, I certify that:
1. The number shown on this form is my correct taxpayer identification number
(or I am waiting for a number to be issued to me), AND
2. I am not subject to backup withholding because (A) I am exempt from backup
withholding, or (B) I have not been notified by the Internal Revenue
Service (IRS) that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or (C) the IRS has notified me
that I am no longer subject to backup withholding, AND
3. I am a U.S. person (including a U.S. resident alien).
CERTIFICATION INSTRUCTIONS. You must cross out item 2 above if you have been
notified by the IRS that you are currently subject to backup withholding
because you have failed to report all interest and dividends on your tax
return. For real estate transactions, item 2 does not apply. For mortgage
interest paid, acquisition or abandonment of secured property, cancellation of
debt, contributions to an individual retirement arrangement (IRA), and
generally, payments other than interest and dividends, you are not required to
sign the Certification, but you must provide your correct TIN. (See the
instructions on page 2.)
----------------------------------------------------------------------------------------------------------------------------
SIGN SIGNATURE OF
HERE U.S. PERSON > DATE >
----------------------------------------------------------------------------------------------------------------------------
PURPOSE OF FORM
A person who is required to file an information return with the IRS must get
your correct taxpayer identification number (TIN) to report, for example, income
paid to you, real estate transactions, mortgage interest you paid, acquisition
or abandonment of secured property, cancellation of debt, or contributions you
made to an IRA.
USE FORM W-9 ONLY IF YOU ARE A U.S. PERSON (including a resident alien), to
give your correct TIN to the person requesting it (the requester) and, when
applicable, to:
1. Certify the TIN you are giving is correct (or you are waiting for a
number to be issued),
2. Certify you are not subject to backup withholding, or
3. Claim exemption from backup withholding if you are a U.S. exempt payee.
IF YOU ARE A FOREIGN PERSON, USE THE APPROPRIATE FORM W-8. See PUB. 515,
Withholding of Tax on Nonresident Aliens and Foreign Corporations.
NOTE: IF A REQUESTER GIVES YOU A FORM OTHER THAN FORM W-9 TO REQUEST YOUR TIN,
YOU MUST USE THE REQUESTER'S FORM IF IT IS SUBSTANTIALLY SIMILAR TO THIS
FORM W-9.
WHAT IS BACKUP WITHHOLDING? Persons making certain payments to you must withhold
and pay to the IRS 31% of such payments under certain conditions. This is called
"backup withholding." Payments that may be subject to backup withholding include
interest, dividends, broker and barter exchange transactions, rents, royalties,
nonemployee pay, and certain payments from fishing boat operators. Real estate
transactions are not subject to backup withholding.
If you give the requester your correct TIN, make the proper certifications,
and report all your taxable interest and dividends on your tax return, payments
you receive will not be subject to backup withholding. PAYMENTS YOU RECEIVE WILL
BE SUBJECT TO BACKUP WITHHOLDING IF:
1. You do not furnish your TIN to the requester, or
2. You do not certify your TIN when required (see the Part III instructions
on page 2 for details), or
3. The IRS tells the requester that you furnished an incorrect TIN, or
4. The IRS tells you that you are subject to backup withholding because you
did not report all your interest and dividends on your tax return (for
reportable interest and dividends only), or
5. You do not certify to the requester that you are not subject to backup
withholding under 4 above (for reportable interest and dividend accounts opened
after 1983 only).
Certain payees and payments are exempt from backup withholding. See the
Part II instructions and the separate INSTRUCTIONS FOR THE REQUESTER OF
FORM W-9.
PENALTIES
FAILURE TO FURNISH TIN. If you fail to furnish your correct TIN to a requester,
you are subject to a penalty of $50 for each such failure unless your failure is
due to reasonable cause and not to willful neglect.
CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. If you make a
false statement with no reasonable basis that results in no backup withholding,
you are subject to a $500 penalty.
CRIMINAL PENALTY FOR FALSIFYING INFORMATION. Willfully falsifying certifications
or affirmations may
subject you to criminal penalties including fines and/or imprisonment.
MISUSE OF TINS. If the requester discloses or uses TINs in violation of Federal
law, the requester may be subject to civil and criminal penalties.
SPECIFIC INSTRUCTIONS
NAME. If you are an individual, you must generally enter the name shown on your
social security card. However, if you have changed your last name, for instance,
due to marriage without informing the Social Security Administration of the name
change, enter your first name, the last name shown on your social security card,
and your new last name.
If the account is in joint names, list first and then circle the name of the
person or entity whose number you enter in Part I of the form.
SOLE PROPRIETOR. Enter your individual name as shown on your social security
card on the "Name" line. You may enter your business, trade, or "doing business
as (DBA)" name on the "Business name" line.
LIMITED LIABILITY COMPANY (LLC). If you are a single-member LLC (including a
foreign LLC with a domestic owner) that is disregarded as an entity separate
from its owner under Treasury regulations section 301.7701-3, enter the owner's
name on the "Name" line. Enter the LLC's name on the "Business Name" line.
CAUTION: A DISREGARDED DOMESTIC ENTITY THAT HAS A FOREIGN OWNER MUST USE THE
APPROPRIATE FORM W-8.
OTHER ENTITIES. Enter your business name as shown on required Federal tax
documents on the "Name" line. This name should match the name shown on the
charter or other legal document creating the entity You may enter any business,
trade, or DBA name on the "Business name" line.
PART I--TAXPAYER IDENTIFICATION NUMBER (TIN)
ENTER YOUR TIN IN THE APPROPRIATE BOX
If you are a RESIDENT ALIEN and you do not have and are not eligible to get
an SSN, your TIN is your IRS individual taxpayer identification number (ITIN).
Enter it in the social security number box. If you do not have an ITIN, see HOW
TO GET A TIN below.
If you are a SOLE PROPRIETOR and you have an EIN, you may enter either your
SSN or EIN. However, the IRS prefers that you use your SSN.
If you are an LLC that is DISREGARDED AS AN ENTITY separate from its owner
(see LIMITED LIABILITY COMPANY (LLC) above), and are owned by an individual,
enter your SSN (or "pre-LLC" EIN, if desired). If the owner of a disregarded LLC
is a corporation, partnership, etc., enter the owner's EIN.
NOTE: SEE THE CHART ON THIS PAGE FOR FURTHER CLARIFICATION OF NAME AND TIN
COMBINATIONS.
HOW TO GET A TIN. If you do not have a TIN, apply for one immediately. To
apply for an SSN, get FORM SS-5, Application for a Social Security Card, from
your local Social Security Administration office. Get FORM W-7, Application for
IRS Individual Taxpayer Identification Number, to apply for an ITIN or FORM
SS-4, Application for Employer Identification Number, to apply for an EIN. You
can get Forms W-7 and SS-4 from the IRS by calling 1-800-TAX-FORM
(1-800-829-3676) or from the IRS's Internet Web Site at WWW.IRS.GOV.
If you do not have a TIN, write "Applied For" in the space for the TIN, sign
and date the form, and give it to the requester. For interest and dividend
payments, and certain payments made with respect to readily tradable
instruments, generally you will have 60 days to get a TIN and give it to the
requester before you are subject to backup withholding on payments. The 60-day
rule does not apply to other types of payments. You will be subject to backup
withholding on all such payments until you provide your TIN to the requester.
NOTE: WRITING "APPLIED FOR" MEANS THAT YOU HAVE ALREADY APPLIED FOR A TIN OR
THAT YOU INTEND TO APPLY FOR ONE SOON.
PART II--FOR U.S. PAYEES EXEMPT FROM BACKUP WITHHOLDING
Individuals (including sole proprietors) are NOT exempt from backup
withholding. Corporations are exempt from backup withholding for certain
payments, such as interest and dividends. For more information on exempt payees,
see the separate Instructions for the Requester of Form W-9.
If you are exempt from backup withholding, you should still complete this
form to avoid possible erroneous backup withholding. Enter your correct TIN in
Part I, write "Exempt" in Part II, and sign and date the form.
If you are a nonresident alien or a foreign entity not subject to backup
withholding, give the requester the appropriate completed Form W-8.
PART III--CERTIFICATION
To establish to the withholding agent that you are a U.S. person, or resident
alien, sign Form W-9. You may be requested to sign by the withholding agent even
if items 1, 3, and 5 below indicate otherwise.
For a joint account, only the person whose TIN is shown in Part I should
sign (when required).
1. INTEREST, DIVIDEND, AND BARTER EXCHANGE ACCOUNTS OPENED BEFORE 1984 AND
BROKER ACCOUNTS CONSIDERED ACTIVE DURING 1983. You must give your correct TIN,
but you do not have to sign the certification.
2. INTEREST, DIVIDEND, BROKER, AND BARTER EXCHANGE ACCOUNTS OPENED AFTER
1983 AND BROKER ACCOUNTS CONSIDERED INACTIVE DURING 1983. You must sign the
certification or backup withholding will apply. If you are subject to backup
withholding and you are merely providing your correct TIN to the requester, you
must cross out item 2 in the certification before signing the form.
3. REAL ESTATE TRANSACTIONS. You must sign the certification. You may cross
out item 2 of the certification.
4. OTHER PAYMENTS. You must give your correct TIN, but you do not have to
sign the certification unless you have been notified that you have previously
given an incorrect TIN. "Other payments" include payments made in the course of
the requester's trade or business for rents, royalties, goods (other than bills
for merchandise), medical and health care services (including payments to
corporations), payments to a nonemployee for services, payments to certain
fishing boat crew members and fishermen, and gross proceeds paid to attorneys
(including payments to corporations).
5. MORTGAGE INTEREST PAID BY YOU, ACQUISITION OR ABANDONMENT OF SECURED
PROPERTY, CANCELLATION OF DEBT, QUALIFIED STATE TUITION PROGRAM PAYMENTS, IRA OR
MSA CONTRIBUTIONS OR DISTRIBUTIONS, AND PENSION DISTRIBUTIONS. You must give
your correct TIN, but you do not have to sign the certification.
PRIVACY ACT NOTICE
Section 6109 of the Internal Revenue Code requires you to give your correct
TIN to persons who must file information returns with the IRS to report
interest, dividends, and certain other income paid to you, mortgage interest you
paid, the acquisition or abandonment of secured property, cancellation of debt,
or contributions you made to an IRA or MSA. The IRS uses the numbers for
identification purposes and to help verify the accuracy of your tax return. The
IRS may also provide this information to the Department of Justice for civil and
criminal litigation, and to cities, states, and the District of Columbia to
carry out their tax laws.
You must provide your TIN whether or not you are required to file a tax
return. Payers must generally withhold 31% of taxable interest, dividend, and
certain other payments to a payee who does not give a TIN to a payer. Certain
penalties may also apply.
WHAT NAME AND NUMBER TO GIVE THE REQUESTER
FOR THIS TYPE OF
ACCOUNT: GIVE NAME AND SSN OF:
1. Individual. The individual
2. Two or more The actual owner of the
individuals (joint account or, if combined
account) funds, the first
individual on the
account(1)
3. Custodian account The minor(2)
of a minor (Uniform
Gift to Minors Act)
4. a. The usual The grantor-trustee
revocable
savings trust
(grantor is also
trustee)(1)
b. So-called trust The actual owner(1)
account that is
not a legal or
valid trust under
state law
5. Sole proprietorship The owner(3)
FOR THIS TYPE OF GIVE NAME AND EIN OF:
ACCOUNT:
6. Sole proprietorship The owner(3)
7. A valid trust, Legal entity(4)
estate, or pension
trust
8. Corporate The corporation
9. Association, club, The organization
religious,
charitable,
educational, or
other tax-exempt
organization
10. Partnership The partnership
11. A broker or The broker or nominee
registered nominee
12. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
state or local
government, school
district, or
prison) that
receives
agricultural
payments
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has an SSN, that person's number must be
furnished.
(2) Circle the minor's name and furnish the minor's SSN.
(3) You must show your individual name, but you may also enter your business or
"DBA" name. You may use either your SSN or EIN (if you have one).
(4) List first and circle the name of the legal trust, estate, or pension trust.
(Do not furnish the TIN of the personal representative or trustee unless the
legal entity itself is not designated in the account title.)
NOTE: IF NO NAME IS CIRCLED WHEN MORE THAN ONE NAME IS LISTED, THE NUMBER WILL
BE CONSIDERED TO BE THAT OF THE FIRST NAME LISTED.