20-F

                       As filed with the Securities and Exchange Commission on July 2, 2001
===================================================================================================================


                                                   UNITED STATES
                                        SECURITIES AND EXCHANGE COMMISSION
                                              Washington, D.C. 20549
                                               ---------------------

                                                     FORM 20-F

          [ ]  REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

                                                        OR

          [X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                                    For the fiscal year ended December 31, 2000

                                                        OR

          [ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                                   For the transition period from ____ to _____


                                         Commission file number 001-04226

                                         SUN INTERNATIONAL HOTELS LIMITED
                              (Exact name of Registrant as specified in its charter)

                                            Commonwealth of The Bahamas
                                  (Jurisdiction of incorporation or organization)

                                                 Executive Offices
                                                   Coral Towers
                                           Paradise Island, The Bahamas
                                                  (242) 363-6000
                           (Address and telephone number of principal executive offices)

Securities registered or to be registered pursuant of Section 12(b) of the Act:

                                                                              Name of each exchange
                    Title of each class                                         on which registered
                    -------------------                                     -----------------------

Ordinary Shares, $.001 par value per share                                   New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act.  None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.  None







Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the
close of the period covered by the annual report.  Ordinary Shares, net of treasury shares: 26,786,270.

Indicate by check mark  whether  the  registrant  (1) has filed all  reports  required to be filed by Section 13 or
15(d) of the  Securities  Exchange Act of 1934 during the preceding 12 months (or for such shorter  period that the
Registrant was required to file such reports),  and (2) has been subject to such filing  requirements  for the past
90 days.
             Yes                        X                      No
                                ------------------                              -------------------

Indicate by check mark which financial statement item the Registrant has elected to follow.
           Item 17                                           Item 18                    X
                                ------------------                              -------------------


===================================================================================================================







                                         SUN INTERNATIONAL HOTELS LIMITED

                                                     FORM 20-F
                             ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                                                 TABLE OF CONTENTS


Presentation of Financial and Other Information...................................................................4
Forward-Looking Statements........................................................................................5

                                                      PART I

Item 1        Identity of Directors, Senior Management and Advisers...............................................6
Item 2        Offer Statistics and Expected Timetable.............................................................6
Item 3        Key Information.....................................................................................6
Item 4        Information on the Company.........................................................................12
Item 5        Operating and Financial Review and Prospects.......................................................37
Item 6        Directors, Senior Management and Employees.........................................................48
Item 7        Major Shareholders and Related Party Transactions..................................................54
Item 8        Financial Information..............................................................................56
Item 9        The Offer and Listing..............................................................................57
Item 10       Additional Information.............................................................................59
Item 11       Quantitative and Qualitative Disclosures About Market Risk.........................................65
Item 12       Description of Securities Other than Equity Securities.............................................65

                                                      PART II

Item 13       Defaults, Dividend Arrearages and Delinquencies....................................................66
Item 14       Material Modifications to the Rights of Security Holders and Use of Proceeds.......................66
Item 15       Reserved...........................................................................................66
Item 16       Reserved...........................................................................................66

                                                     PART III

Item 17       Financial Statements...............................................................................67
Item 18       Financial Statements...............................................................................67
Item 19       Exhibits...........................................................................................68

Signatures.......................................................................................................71






                                  PRESENTATION OF FINANCIAL AND OTHER INFORMATION

         In this Annual Report,  "Sun  International" or "the Company" refers to Sun International  Hotels Limited,
and the terms "we",  "us",  "our" and similar terms refer to Sun  International  and any or all of its subsidiaries
and joint ventures as the context requires.

         In compiling the information in this Annual Report,  we have used industry data and  projections  obtained
from industry  surveys,  market  research,  publicly  available  information  and industry  publications.  Industry
publications  generally  state that the  information  they contain has been  obtained  from sources  believed to be
reliable but that the accuracy and  completeness  of such  information is not  guaranteed and that the  projections
they contain are based on a number of  significant  assumptions.  We have not  independently  verified this data or
determined  the  reasonableness  of such  assumptions.  We have  also  indicated  where  information  has come from
internal sources.  Such information  reflects our management's best estimates based upon information  obtained from
our  customers  and from trade and business  organizations  and other  contacts  within the  businesses in which we
compete.

         Our fiscal year ends on December 31.  Unless  otherwise  specified,  all  references in this Annual Report
to our fiscal year refer to a  twelve-month  period ending  December 31. For example,  fiscal 2000  represents  the
fiscal year beginning on January 1, 2000 and ending on December 31, 2000.

         The  financial  statements  contained in this Annual  Report have been  prepared in  accordance  with U.S.
generally  accepted  accounting  principles  ("GAAP").  We have historically  compiled our financial  statements in
U.S. dollars.

         .







                                            FORWARD-LOOKING STATEMENTS

         Certain  information  included in this Annual Report filing  contains  forward-looking  statements.  These
forward-looking  statements are based on current  expectations,  estimates,  projections,  management's beliefs and
assumptions  made  by  management.  Words  such  as  "expects",  "anticipates",   "intends",  "plans",  "believes",
"estimates"  and  variations of such words and similar  expressions  are intended to identify such  forward-looking
statements.  Such  statements  include  information  relating  to plans for  future  expansion  and other  business
development  activities  as well as other  capital  spending,  financing  sources  and the  effects  of  regulation
(including gaming and tax regulation) and competition.  Such  forward-looking  information involves important risks
and  uncertainties  that could  significantly  affect  anticipated  results in the future and  accordingly,  actual
results may differ from those expressed in any forward-looking  statements made in this Annual Report.  These risks
and  uncertainties  include,  but are not limited to, those relating to development  and  construction  activities,
dependence on existing  management,  leverage and debt service  (including  sensitivity to fluctuations in interest
rates),  availability of financing,  democratic or global economic conditions,  pending litigation,  changes in tax
laws or the  administration  of such laws and changes in gaming laws or regulations  (including the legalization of
gaming in certain  jurisdictions).  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.








                                                      PART I


- -------------------------------------------------------------------------------------------------------------------

ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

         Not applicable.



ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE

         Not applicable.


ITEM 3.  KEY INFORMATION

(A)  Selected Financial Data

         The following table sets forth certain historical  consolidated  financial  information of the Company for
each of the five years ended December 31, 2000. The historical  financial  information as of December 31,  2000 and
1999 and for each of the three years ended  December 31,  2000, 1999 and 1998 as set forth below,  has been derived
from the audited  consolidated  financial  statements  of the  Company,  prepared  in  accordance  with U.S.  GAAP,
included  in this  Annual  Report.  The  information  set  forth  below is not  necessarily  indicative  of  future
operations  and should be read in conjunction  with "Item 5. Operating and Financial  Review and Prospects" and the
consolidated  financial  statements,  related  notes and other  financial  information  included  elsewhere in this
Annual Report.  Amounts are reported in U.S. dollars and have been prepared in accordance with U.S. GAAP.






                                                             For the Year Ended December 31,
                                       -----------------------------------------------------------------------------
                                       -----------------------------------------------------------------------------

                                            2000            1999           1998            1997            1996
                                           (a)(d)          (b)(d)         (c)(d)          (d)(e)          (d)(f)
                                       -----------------------------------------------------------------------------
                                                      (Dollars in thousands, except per share data)
CONSOLIDATED STATEMENT
OF OPERATIONS DATA:

Gross Revenues                         $    936,474     $   789,207    $    591,670    $    600,670    $    252,218
Net revenues                                884,695         738,967         550,878         558,912         240,116
Income (loss) from operations               (74,844)        114,432          52,206          84,624          34,258
Net income (loss)                          (119,104)         69,822          57,746          83,008          45,722
Basic earnings (loss) per share (g)           (3.86)           2.09            1.74            2.52            1.64
Diluted earnings (loss) per share (g)         (3.86)           2.05            1.70            2.44            1.58

CONSOLIDATED BALANCE
SHEET DATA:

Total assets                           $  1,460,791     $ 1,671,471    $  1,625,733    $  1,374,740    $  1,122,619
Long-term debt, net                         668,908         578,033         565,752         412,209         262,618
    of current maturities
Shareholders' equity                        641,827         899,831         850,621         790,283         702,989

 (a)     The  results of  operations  for the year  ended 2000  include a $229.2  million  write-down  of net assets
         related to the Resorts  Atlantic  City Sale and the  Atlantic  City Option to their  realizable  value.  In
         addition,  the Company incurred pre-opening costs of $7.6 million primarily related to the expansion of the
         Ocean Club and the opening of the new golf course on Paradise Island.

 (b)     The results of operations for the year ended 1999 include  pre-opening  costs of $5.4 million related to a
         renovation completed at Resorts Atlantic City in July 1999.

 (c)     The  results of  operations  for the year ended 1998  include  only two weeks of  operations  of the Royal
         Towers on Paradise Island after its grand opening in  mid-December.  Income from operations and net income
         for the year ended 1998 reflect $26 million in pre-opening costs.

 (d)     The Company acquired Sun International  North America,  Inc.  ("SINA") on December 16, 1996.  Accordingly,
         the  results  of  operations  for each of the four  years  ended  December  31,  2000  include  results of
         operations  related  to the  SINA  acquired  assets  including  Resorts  Atlantic  City.  The  results  of
         operations for the last 16 days of 1996 were considered  immaterial and were not included in the Company's
         results of operations for that year.

 (e)     The result of  operations  for the year ended  December 31, 1997  included a gain of $13.4  million on the
         sale of the Company's casino interest in France.

 (f)     The Company opened the Mohegan Sun Casino in Uncasville,  Connecticut  in October 1996.  Accordingly,  the
         results in 1996 reflect the Company's share of revenues from two months of operations at this facility.

 (g)     Effective  January 1, 1997,  the Company  adopted  Statement of Financial  Accounting  Standards  No. 128,
         "Earnings Per Share".

(B)  Capitalization and Indebtedness

         Not applicable.

(C)  Reasons for the Offer and Use of Proceeds

         Not applicable.

(D)  Risk Factors

Competition

         The resort and casino  industries are  characterized by a high degree of competition  among a large number
of  participants  and are largely  dependent on tourism.  The Company  competes  with resorts both with and without
gaming and with gaming facilities  generally,  including  land-based casinos,  riverboat,  dockside and cruise ship
on-board  casinos and other forms of gaming,  as well as other forms of  entertainment.  A number of the  Company's
competitors are larger and have greater  financial and other resources than the Company.  In addition,  a number of
jurisdictions  have recently  legalized gaming and other  jurisdictions are considering the legalization of gaming.
This could open up new markets in which the Company  currently  competes in to new  entrants,  and could create new
markets  which may  compete as  tourist  destinations.  The  Company's  competitive  position  could be  materially
adversely  effected by such larger  companies,  new entrants and new markets and our revenues  could  decline which
would harm our financial condition.

         The  Company  believes  that the  ability to  compete  effectively  in the  resort and gaming  industries,
particularly  the  destination  resort and gaming  industries,  is based on several  factors,  including the scope,
quality,  location and accessibility of resort and gaming facilities and amenities,  the effectiveness of marketing
efforts,  customer  service,  the relative  convenience  of available  transportation,  service and the quality and
price of rooms, food and beverages, convention facilities and entertainment.

         A further  discussion of  Competition  at the Company's  operations by geographic  location is included in
"Item 4. Information on the Company, (B) Business Overview-Competition."

Seasonality and Weather

         Historically,  the Company's  revenues and operating profits in The Bahamas and Mauritius have been higher
during the first calendar  quarter,  the prime tourist season,  than in successive  quarters.  If we were unable to
accommodate guests during this period, for any reason,  including  disruptions caused by weather,  our revenues and
profits could be adversely affected.

         The Bahamas and  Mauritius are subject to tropical  weather and storms,  which,  if severe,  can adversely
affect the operations of the Company and affect  tourism.  Similarly,  inclement  weather can adversely  affect the
operations in Connecticut,  as the principal means of  transportation  to this property is by automobile or bus. In
September  1999, our properties on Paradise  Island in The Bahamas were hit by Hurricane  Floyd, a hurricane  rated
by the United States  National  Weather Service as a category five, its highest  rating.  The Company's  properties
in The  Bahamas  suffered  approximately  $45  million of  property  damage  that took three  months to repair.  No
assurances  can be given 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
financial condition and results of operations.

Dependence on Air Service

         Most  patrons of the  Company's  resorts on Paradise  Island and  Mauritius  arrive by air.  Although  the
Company  considers the current level of air service to The Bahamas and Mauritius to be adequate,  any  interruption
or  reduction  of air  service  to The  Bahamas or  Mauritius  could have an  adverse  effect on the  Company.  Any
disruptions  or hindrances to air or road  transportation  could  restrict the growth of the Company's  businesses,
negatively effect its competitive position and have an adverse effect on the revenues and profits of the Company.

Risks Associated with New Projects and Expansion

         The ability of the Company to take advantage of business  opportunities  and to further  develop  existing
businesses will depend upon a number of factors,  including the  availability of financing,  terms and covenants in
its credit  facilities,  the  ability of the  Company,  its key  employees  and,  in certain  cases,  its  business
partners,  to obtain and  maintain  permits and  licenses  (including  gaming and liquor  licenses  and permits and
approvals  relating to land use,  construction  and zoning) and, in some cases,  the ability to find,  and maintain
relationships with, suitable  development and business partners.  The failure to obtain required licenses,  permits
or  approvals  in a timely  manner or the loss or  suspension  of any such  license,  permit or approval may delay,
restrict or prevent one or more projects,  including  further  expansion on Paradise  Island,  from opening or from
opening as scheduled or the Company from being the developer, manager or operator of one or more such projects.

Employee Relations

         In The Bahamas,  a union represents  approximately  3,800 of our employees.  We participate in an employer
association  whose existing  contract with the union expires  January 1, 2003.  Labor relations in The Bahamas have
not been stable over the last few years,  and there have been occasional work stoppages.  As the country's  largest
private  employer,  we are often the target of labor  disputes.  Any  protracted  labor  disputes or work stoppages
could result in reduced revenues and could harm our financial condition and results of operations.

Environmental, Health and Safety Laws and Regulations

         The Company's  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.  The Company's 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.  The Company's failure to comply with
existing  laws or  regulations,  the  adoption  of new  laws  or  regulations  with  additional  or more  rigourous
compliance  standards,  or the more vigorous  enforcement of environmental laws or regulations could seriously harm
our business by increasing our expenses and limiting our future opportunities.

Control by Principal Shareholder

         Sun International  Investments  Limited ("SIIL") controls  approximately 50% of the Ordinary Shares of the
Company.  Pursuant to the terms of a heads of  agreement  dated August 1993,  as amended,  among the Company,  SIIL
and the Government of the Commonwealth of The Bahamas,  SIIL agreed,  among other things,  to control a majority of
the  Board of  Directors  of the  Company  until  June 30,  2004.  This  voting  power  means  that SIIL is able to
effectively  control the outcome of  substantially  all  matters  requiring  shareholder  approval,  including  the
election of the Company's  directors,  thereby controlling the management,  policies and business operations of the
Company.  SIIL could use this voting  power to block the  Company's  ability to obtain  certain  types of financing
for development  plans,  renovations or expansions,  which could materially  adversely effect the Company's ability
to develop its business and pursue our strategies.

Regulatory and Political Factors

         The  operating  of  gaming  facilities  is  generally  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.  The  Company  and the
necessary  key  personnel  are  currently  qualified  to  operate  in all the  jurisdictions  in which the  Company
operates. No assurances can be given,  however,  that any new or permanent licenses,  permits or approvals that may
be required by the Company,  its key employees and its partners,  if  applicable,  in the future will be granted or
that its  existing  licenses,  permits and  approvals  will be renewed or will not be  suspended  or revoked in the
future.  For  example,  the  Bahamian  government  has agreed that it will not grant any new licenses for gaming on
Paradise  Island or New  Providence  Island  until  2013,  subject to Sun  Bahamas,  our  wholly-owned  subsidiary,
creating  2,000  full-time  jobs by year 10 of its  expansion  and  development  plans.  Our agreement to develop a
casino project in the Catskill region of the State of New York for the  Stockbridge-Munsee  Band of Mohican Indians
(the  "Stockbridge-Munsee  Tribe")  depends  on  various  government  approvals.  The  failure to receive or review
licenses or the  suspension or revocation of licenses  could harm the Company's  reputation and result in a loss of
revenue and could materially adversely effect the Company's financial condition and results of operations.

         Gaming  operators  generally  are  subject  to  significant  taxation  and fees.  Such  taxes and fees are
subject  to  increase  at any  time.  The  Company  pays  substantial  taxes and fees with  respect  to its  gaming
operations  and will likely incur similar  taxes and fees in any other  jurisdictions  in which it conducts  gaming
operations  in the  future.  Any  material  increase  or the  adoption  of  additional  taxes or fees  could have a
material adverse effect on the Company.

Enforceability of Civil Liabilities

         The Company is a Bahamian  international  business company  incorporated under the International  Business
Companies  Act,  1989 of the  Commonwealth  of The Bahamas (the  "Companies  Act").  Certain of the  directors  and
executive  officers of the Company  reside outside the United  States.  A substantial  portion of the assets of our
directors and officers and of our assets are 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 our  directors and officers,  to
bring suit in the United  States  against us or our  directors  and  officers or to enforce,  in the United  States
courts,  any judgment  obtained  there against us or our directors and officers.  In addition,  it is unlikely that
Bahamian  courts  would  entertain  original  actions  against  Bahamian  companies,  their  directors  or officers
predicated  solely  upon  United  States  federal  securities  laws.  Furthermore,  judgments  based  on the  civil
liability  provisions of the United States federal  securities laws are not directly  enforceable in The Bahamas. A
lawsuit must be brought in The Bahamas in order to enforce a judgment  based on the civil  liability  provisions of
the U.S. federal securities laws.

         Gaming debts may not be legally  enforced in certain  foreign  jurisdictions  or in certain  jurisdictions
within the United  States.  As a result,  the Company  may be unable to collect  gaming  debts from  patrons of our
casinos who reside in such jurisdictions.

Dependence on Key Personnel

         The Company depends upon the efforts and skills of Mr. Solomon  Kerzner,  its Chairman and Chief Executive
Officer.  Mr.  Kerzner is also the Chairman of World Leisure Group Limited,  a British  Virgin Islands  corporation
("WLG"),  which  indirectly  controls  through  intermediate  entities  approximately  one-third of the outstanding
equity of SIIL,  and is also a  beneficiary  of a Kerzner  family trust which owns WLG. The loss of the services of
Mr.  Kerzner or his  inability  to devote  sufficient  attention  to the  operations  of the  Company  could have a
material adverse effect on the Company's ability to develop potential business opportunities.

Previous Changes in Business Plans

         Reassessments  of and changes to the Company's  business plans could hinder our  development and result in
charges or fees that could harm our financial condition and results of operations.

         The Company is constantly  reviewing  its  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  reassessments,  management  of the  Company  may choose to change such plans,
which  could  result in failure to expand  into  certain  markets and could also cause the Company to incur fees or
charges.  For example,  in 2000,  the Company  agreed to terminate its agreement  with Starwood  Hotels and Resorts
Worldwide  Inc.  ("Starwood")  to acquire the Desert Inn Hotel and Casino in Las Vegas (the  "Desert  Inn"),  which
Starwood  later sold to a third  party.  Consequently,  we were  required to pay  Starwood  $7.2 million of our $15
million  deposit and we incurred an additional  $4.0 million of sunk costs relating to the Desert Inn  transaction.
The  Company had plans for a 700-room  hotel  project at Atlantis in  Paradise  Island,  which we  postponed.  This
caused the Bahamian  government to suspend annual tax incentives of  approximately  $3 million.  Any future changes
in our plans could result in  additional  costs and fees which could harm our  financial  condition  and results of
operations.  There is no assurance that the Company will carry forward and complete proposed business plans.

General Economic and Market Conditions

         The Company's  business is affected by general economic and market  conditions  particularly in the United
States and Europe.  A large  portion of the  Company's  business in the Bahamas 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  desirability of tourists to book vacations at our Bahamas  property,  which would adversely effect
our operating results.


ITEM 4.  INFORMATION ON THE COMPANY

(A)  History and Development of the Company

         Sun  International  Hotels Limited ("Sun  International" or the "Company") was incorporated in The Bahamas
in 1993, and is an  international  business  company under the  International  Business  Companies Act, 1989 of the
Commonwealth  of The Bahamas.  The Company is  registered  under number  46,600B at the  Companies  Registry of The
Bahamas.  The Company's  executive offices are located at Executive  Offices,  Coral Towers,  Paradise Island,  The
Bahamas,  and the  telephone  number is  242-363-3000.  The  Company's  agent for  service of process in the United
States is  Corporation  Services  Company,  1013 Centre Road,  Wilmington,  Delaware  19805.  On March 1, 1996, the
Company  listed its  Ordinary  Shares for trading on The New York Stock  Exchange  ("NYSE"),  and such shares trade
under the symbol "SIH".

         In 1993, Sun  International  was established in order to acquire the Paradise Island Resort and Casino and
related operations from Resorts International, Inc.  The acquisition was completed in May 1994.

         In June 1994, the Company established Sun Cove Limited ("Sun Cove"). Sun Cove has a 50% interest in, and is
a managing partner of, Trading Cove Associates  ("TCA"), a Connecticut general  partnership.  In September 1995, TCA
entered  into  a  Gaming  Facility  and  Construction  Agreement  with  the  Mohegan  Tribal  Gaming  Authority,  an
instrumentality  of the Mohegan Tribe of Indians of Connecticut (the "Mohegan Tribe") pursuant to which TCA assisted
the Mohegan Tribe with the design,  development  and  financing of the Mohegan Sun Casino  resort and  entertainment
complex situated in the town of Uncasville, Connecticut (the "Mohegan Sun Casino"). In addition, in August 1995, TCA
entered into a gaming management agreement (the "Management Agreement") with the Mohegan Tribe pursuant to which TCA
provided  certain  management,  marketing and  administrative  services to the Mohegan Tribe upon the opening of the
Mohegan Sun Casino in October 1996. Under the Management Agreement,  TCA received a management fee of between 30% to
40% of the net profits,  as defined,  of the Mohegan Sun Casino which profits were distributed to TCA's partners and
certain of their  affiliates  under the TCA  partnership  agreements.  In February  1998,  TCA and the Mohegan Tribe
entered into an agreement (the "Relinquishment Agreement") pursuant to which the Management Agreement was terminated
effective January 1, 2000 and the Mohegan Tribe assumed full management  responsibility  for the Mohegan Sun Casino.
Under the Relinquishment  Agreement,  commencing on January 1, 2001 TCA receives payments in the amount of 5% of the
gross revenues of the Mohegan Sun Casino (including any expansions thereto) for a period of 15 years. In addition to
the  Relinquishment  Agreement,  in February  1998 the Mohegan  Tribe  appointed TCA to develop its expansion of the
Mohegan Sun Casino,  which is expected to cost  approximately  $960  million and open in late 2001.  TCA  receives a
development fee in the amount of $14 million for services provided under this development agreement.

         In May 1995,  the  Company  acquired  from SIIL  equity  interests  in Sun Resorts  Limited  ("Sun  Indian
Ocean"),  Societe de  Participation  et  d'Investissement  dans les  Casinos  ("Sun  France")  and  SIIL's  project
development and management businesses.  The Company sold its interest in Sun France in early 1997.

         In December 1996, the Company acquired SINA (formerly Griffin Gaming & Entertainment,  Inc.). SINA is a
holding  company which,  through an indirect  wholly-owned  subsidiary,  owned and operated  Resorts  Atlantic City.
Subsequently,  the Company  contributed to SINA the stock of Sun Cove and that of all the companies that support the
Bahamian  operations  located in the State of Florida to SINA. As explained  below under "Recent  Developments",  on
April 25, 2001, the Company sold its Resorts Atlantic City operations to an unaffiliated company.

         In 1999, the Company formed a joint venture with Vistana, Inc.  ("Vistana"),  a subsidiary of Starwood, to
develop a time share project on Paradise  Island  ("Harborside  at Atlantis").  The Company and Vistana each have a
50% interest in the joint venture.

         On January 19,  2000,  the Company  announced  that it had  received a proposal  from SIIL to acquire in a
merger  transaction  all 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  that SIIL was not able to negotiate a mutually  satisfactory  transaction  with the Special
Committee and that SIIL advised the Company that its proposal had been withdrawn.

         In order to allow  shareholders  of the Company to sell at least a portion of their Ordinary Shares at the
price formerly  proposed by SIIL,  upon approval by the Board of Directors,  the Company  offered to purchase up to
5,000,000  Ordinary  Shares at a $24 per share  cash  price.  The  self-tender  offer was  subject to the terms and
conditions  set forth in the 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  periodic  reporting
requirements  of the Securities  Exchange Act of 1934. In August 2000, the Company  announced the completion of the
self-tender,  pursuant to which  5,000,000  Ordinary  Shares were  purchased  by the Company at $24 per share.  The
self-tender  offer was financed with borrowings under the Company's  existing  Revolving Bank Credit Agreement (the
"Revolving Credit Facility").  None of the shares held by SIIL and its shareholders were sold in the self-tender.

Recent Developments

Trading Cove New York

         Trading Cove New York, LLC ("TCNY"),  a Delaware limited liability  company,  is 50% owned by Sun Cove New
York,  Inc.,  a Delaware  corporation  and  wholly-owned  subsidiary  of SINA.  In March 2001,  TCNY entered into a
Development  Services  Agreement  (the  "Development   Agreement")  with  the  Stockbridge-Munsee   Tribe  for  the
development  of a  casino  project  in the  Catskill  region  of New  York  (the  "NY  Project").  Pursuant  to the
Development  Agreement,  TCNY will provide preliminary funding,  certain financing and development  services.  TCNY
has  secured  land  and/or  options on  approximately  340 acres of  property  in the town of  Thompson  for the NY
Project.  The  Stockbridge-Munsee  Tribe does not currently have  reservation land in the State of New York, but is
federally  recognized  and operates a casino on its  reservation  in Wisconsin.  The NY Project is contingent  upon
numerous federal,  state and local approvals to be obtained by the  Stockbridge-Munsee  Tribe,  which approvals are
beyond the control of TCNY.  The Company can make no  representation  as to whether any of the  required  approvals
will be obtained by the Stockbridge-Munsee Tribe.

Resorts Atlantic City

         On April 25,  2001,  the  Company  sold  Resorts  Atlantic  City to an  affiliate  of Colony  Capital  LLC
("Colony") for a purchase price of approximately  $144 million,  including  accrued interest (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.  Most of the Atlantic City
Option  property is currently  leased by SINA to Colony and is utilized for parking by Resorts  Atlantic  City.  To
facilitate  Colony's  financing,  the Company lent Colony's  affiliate  $17.5 million  toward the purchase price of
Resorts  Atlantic  City in  exchange  for an  unsecured  note (the  "Note")  at an annual  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 on the Note and the PIK Notes to be paid in seven years from the
date of the original  Note.  The balance of the  proceeds was paid in cash.  The net cash  proceeds  received  from
this  transaction were used to reduce the amount of borrowings  outstanding on the Revolving  Credit Facility.  See
"Item 5. Operating and Financial Review and Prospects,  (B) Liquidity,  Capital Resources and Capital Spending" for
further  discussion on the Revolving  Credit Facility.  Net assets held for sale on the  accompanying  consolidated
balance sheets as of December 31, 2000  represent the adjusted book value of the assets  disposed of in the Resorts
Atlantic City Sale.

The Maldives

         In May 2001,  the Company  announced  that it has agreed to operate the  Kanuhura Sun Resort & Spa Limited
("Kanuhura  Sun"),  a 100-room  luxury resort located on Kanuhura  Island in the Maldive  Islands which are located
off the  Southern  tip of India.  The Company  expects to enter into a long-term  management  agreement  to operate
Kanuhura Sun in exchange for certain  fixed fees and  additional  fees based on a percentage  of revenues and gross
operating profit, as defined.

Sunonline

         On February  13, 2001,  the Company  announced  that it has an agreement  with Boss Media AB to develop an
internet  gaming  software  solution.  Boss Media is a public company traded on the Stockholm Stock Exchange and is
contracted to the Swedish  Government owned company Svenska Spel to provide  internet casino software.  The Company
is currently  licensed by the  Kahnawake  Gaming  Commission,  a native North  American  Indian band in Canada,  to
operate an online  casino.  The Company is in the advanced  stages of  designing  its site and is prepared to begin
operation.  The Company has developed and  implemented  systems and  procedures to exclude play from  jurisdictions
where  internet  gaming is  illegal,  such as the United  States.  The  Company  intends to  initially  operate its
internet  gaming site on a test basis to determine  the  viability of the  business  and the  effectiveness  of its
systems to maintain  compliance  with all applicable  laws.  There can be no assurances that the business is viable
or the Company's systems will be effective.

(B)  Business Overview

         Sun  International  is an  international  resort and gaming  company,  which develops and manages  premier
resort and casino  properties.  The Company,  through its  subsidiaries,  currently  operates  resort hotels and/or
casinos in The  Bahamas,  the Indian  Ocean and Dubai.  In  addition,  the Company  earns income based on the gross
revenues of the  Mohegan Sun Casino,  a casino  complex  developed  by the Company on behalf of the Mohegan  Tribe.
The  Company's  largest  property is the  Atlantis  Resort and Casino,  a 2,317-room  resort and casino  located on
Paradise Island, The Bahamas.

The Properties

The Bahamas

         Casino hotel and related  revenues  earned at the Company's  properties on Paradise  Island in The Bahamas
for the years ended  December 31,  2000,  1999 and 1998 were $471.2  million,  $441.1  million and $245.0  million,
respectively.  In addition,  in 2000, the Company  earned real estate  related  revenues of $108.7 million from the
sale of  homesites in The Bahamas and $3.4  million of  management  fees for  services  provided to  Harborside  at
Atlantis, described below.

         Sun International,  through its wholly owned Bahamian subsidiary,  Sun International Bahamas Limited ("Sun
Bahamas"),  owns approximately 600 acres or almost 70% of Paradise Island.  Approximately 90 acres remain available
for future  development.  Paradise Island has extensive  existing  infrastructure and is easily accessible from the
densely populated  eastern United States.  There are regularly  scheduled  airline flights from South Florida,  New
York City and various  other major US cities to  neighboring  Nassau.  Flights from South Florida and New York City
have flight times of approximately 50 minutes and two and one-half hours, respectively.

         The Company's  largest  property is the  ocean-themed  environment of "Atlantis" on Paradise  Island.  The
property  includes a 14-acre  saltwater  marine life habitat which features the world's  largest open air aquarium,
showcasing over 100 species of marine life,  waterfalls,  lagoons,  adventure walks and a clear tunnel submerged in
a predator  lagoon  through which visitors can walk and be surrounded by sharks,  sea turtles,  stingrays and other
marine life.  The 2,317 guest rooms at Atlantis  includes the  1,200-room  Royal  Towers,  which opened in December
1998 as part of a major expansion.

         The 1998 expansion also included a new 100,000 square foot casino and  entertainment  center and expansive
marine habitats,  adventure rides,  swimming pools and other  entertainment  attractions,  as well as the Marina at
Atlantis.  The new Atlantis  Casino,  with  approximately  1,000 slot machines and 78 table games, is the center of
the new  entertainment  complex,  which  spans a  seven-acre  lagoon  and  connects  the Royal  Towers to the Coral
Towers.  The final project cost for this expansion  totaled  approximately  $500 million,  excluding $40 million of
capitalized interest.

         During  the  first  quarter  of 1999,  the  Company  completed  several  additional  development  projects
including a 30,000 square foot retail link  connecting the Coral Towers to the new  entertainment  center,  the new
porte cochere for the Coral Towers,  an 1,800 car parking  garage,  a new laundry  facility and a Bahamian arts and
crafts  market.  During  the second  quarter of 1999,  the  Company  completed  the  conversion  of the  previously
existing  30,000  square foot casino space into a convention  center and  construction  of a sports  center,  which
includes an 18-hole putting course and a tennis center.  These  projects,  excluding the convention  center,  which
is part of the expansion described above, cost approximately $100 million.

         In September  1999,  Paradise  Island was hit by Hurricane  Floyd, a hurricane  rated by the United States
National  Weather  Service as a category  five,  its  highest  rating.  The  Paradise  Island  properties  suffered
approximately  $45 million of property  damage.  At Atlantis,  230 rooms were taken out of service for three months
and the Ocean Club,  described below, was closed for approximately  three and one half months. The Company had full
property  and  business  interruption  insurance  coverage  and  remedial  work was  completed  by  year-end  1999.
Hurricane Floyd was the first significant hurricane to hit Paradise Island in over thirty years.

         During 2000,  the Company  completed  the  redevelopment  of the Paradise  Island Golf Course into a first
class  championship  venue,  designed by Tom Weiskopf.  The redevelopment  included a new clubhouse and development
of the infrastructure to support the Ocean Club Estates housing  development,  which comprised 121 luxury homesites
surrounding  the golf course.  As of the second  quarter of 2001,  nearly all of the available  homesites have been
sold.

         In addition to Atlantis  and the Paradise  Island Golf Club,  the  Company's  Paradise  Island  operations
include the Ocean Club,  a high-end  luxury  resort hotel with 106 guest rooms  including an addition  completed in
2000. The addition to the Ocean Club comprised 50 luxurious  rooms,  including ten deluxe suites,  as well as a new
beachfront  restaurant and significant  enhancements to the existing pool 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

         During the second  half of 2000,  the  Company  completed  an  extensive  capital  expenditure  program of
approximately  $20 million at Atlantis'  Beach  Tower.  This program  included the  renovation  of all of the Beach
Tower's 425 rooms and improvements to certain public spaces.

         During 2001,  the Company  plans to complete a major  capital  expenditure  program of  approximately  $20
million to complete  renovations at the Ocean Wing of Atlantis'  Coral Towers.  This will include the renovation of
approximately 400 rooms, including improvements to certain public spaces.

         Sun Bahamas also owns and operates shops,  restaurants,  bars and lounges,  tennis courts and other resort
facilities on Paradise Island,  as well as roads and other land  improvements on Paradise  Island,  and a water and
sewage  system which  serves,  at stated  charges,  substantially  all  facilities  on Paradise  Island,  including
non-affiliated  customers.  In connection with the Company's  expansion on Paradise  Island  completed in 1998, the
Bahamian  Government  constructed  a new  bridge  connecting  New  Providence/Nassau  and  Paradise  Island and the
Paradise  Island  Tourist and  Development  Authority,  a  non-profit  entity  formed to promote  Paradise  Island,
implemented a $20 million road and infrastructure improvement program.

         To further diversify the product mix available at Atlantis, in 1999 the Company formed a joint venture with
Vistana,  a  subsidiary  of  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 in February 2001. Sales of the timeshare units
began in May 2000. Currently, the Company is uncertain as to when it anticipates developing further units as part of
this project.  As part of its joint venture  agreement,  the Company  contributed land and Vistana  contributed cash
based on the number of timeshare units to be developed.

         Sun Bahamas owns a 100-room  beachfront resort hotel,  Paradise Paradise.  This property was closed to the
public in September 1998 and has been used since then to house expatriate professionals and construction staff.

         The  Company  previously  had plans for an  additional  700-room  Phase III  hotel  project  at  Atlantis.
However,  considering  its  available  development  resources  and  alternative  uses of  capital,  the Company has
postponed  this project,  and as a result,  annual tax  incentives of  approximately  $3.0 million  pursuant to the
Company's  agreement  with the  Bahamian  Government  have been  suspended.  See  "Certain  Matters  Affecting  the
Company's  Bahamian  Operations-Heads  of Agreement" below for a description of these tax incentives.  In the event
the Company begins  construction of the Phase III project,  these tax incentives will be prospectively  reinstated.
Although  the  Company  currently  has no plans to proceed  with the Phase III  development,  it will  continue  to
consider the results at its Paradise Island  operations as well as general  business trends and alternative uses of
its capital in determining the timing of proceeding with Phase III.

Atlantic City

         Casino hotel and related  revenues earned at Resorts  Atlantic City for the years ended December 31, 2000,
1999 and 1998 were $258.0 million, $243.1 million and $260.7 million, respectively.

         Resorts Atlantic City commenced  operations in May 1978 and was the first casino/hotel  opened in Atlantic
City.  This was  accomplished  by the  conversion  of the former  Haddon  Hall  Hotel,  a classic  hotel  structure
originally  built in the early 1900's,  into a casino/hotel.  It is situated on  approximately  seven acres of land
with  approximately 310 feet of Boardwalk frontage  overlooking the Atlantic Ocean.  Resorts Atlantic City consists
of two hotel towers,  the 15-story  Ocean Tower and the nine-story  Atlantic City Tower,  a 700-car  parking garage
and approximately  three acres of surface lot parking.  In addition to the casino  facilities  described below, the
casino/hotel  complex includes  approximately 644 guest rooms, the 1,400-seat  theater,  seven  restaurants,  a VIP
slot and table player  lounge,  an indoor  swimming pool, a public  lounge,  a health club and retail  stores.  The
complex also has approximately 28,000 square feet of convention  facilities,  including six large meeting rooms and
a 2,000 square foot ballroom.

         Resorts  Atlantic City has a 75,000  square foot casino and a simulcast  pari-mutuel  betting  facility of
approximately  3,000 square feet. At December 31, 2000,  these gaming areas contained 73 table games  comprising 35
blackjack tables,  eight roulette tables,  seven craps tables,  and 23 other specialty games that include Caribbean
Stud, Baccarat,  Mini-Baccarat,  Let It Ride, Three-card Poker, Pai Gow Poker, Big Six, Pai Gow, and Spanish Twenty
One.  There are also  2,367  slot  machines  and six  betting  windows  and four  customer-operated  terminals  for
simulcast pari-mutuel betting.

         In July 1999,  the Company  completed a renovation of Resorts  Atlantic  City,  which  included  extensive
renovations  to the casino floor,  hotel lobby,  guest rooms and suites,  room  corridors,  restaurants,  the hotel
porte  cochere,  public areas and the  addition of a new VIP player  lounge.  The total cost of the 1999  expansion
was approximately $48 million.  In 2000, the Company completed a further  renovation of the casino,  which included
construction  of a new nine-bay bus depot,  a waiting area with seating for  approximately  250 patrons and various
other amenities.  Additionally,  the casino floor was expanded to include additional slot machines.  The total cost
of this project, including the new slot machines, was approximately $7.0 million.

         As previously  described,  the Company sold Resorts Atlantic City on April 25, 2001. However,  the Company
continues to own  approximately  9.5 acres of additional  land available for  development  immediately  adjacent to
Resorts  Atlantic  City.  This land is included in the  Atlantic  City Option and,  effective  April 25,  2001,  is
leased to Colony for a fee of $100,000 per month.

Connecticut

         For the years ended December 31, 2000, 1999 and 1998,  respectively,  the Company  received  payments from
TCA in the amount of $23.6 million, $39.3 million and $34.6 million, respectively.

         As is  described  under  "Item 4 (A)  History  and  Development  of the  Company",  the  Company has a 50%
interest  in,  and is a managing  partner  of,  TCA.  In 1998,  the  Mohegan  Tribe  appointed  TCA to develop  its
approximately  $960 million  expansion of the Mohegan Sun Casino.  The  expansion  includes an  additional  115,000
square foot casino,  a 1,200-room  hotel,  an arena and additional  retail space.  It is  anticipated  that the new
casino  will  open in the  fourth  quarter  of 2001  with the hotel  opening  in the  second  quarter  of 2002.  In
addition,  TCA and the  Mohegan  Tribe  entered  into the  Relinquishment  Agreement  whereby  it was  agreed  that
effective  January 1, 2000, TCA would turn over  management of the Mohegan Sun Resort Complex (which  comprises the
existing  operations and the proposed  expansion) to the Mohegan Tribe.  Pursuant to the Relinquishment  Agreement,
the Management  Agreement was  terminated,  and,  beginning  January 1, 2000, TCA receives  annual payments of five
percent of the gross revenues of the Mohegan Sun Resort Complex, including the expansion, for a 15-year period.

         The Mohegan Sun Casino has a Native  American theme that is conveyed  through  architectural  features and
the use of natural design elements such as timber,  stone and water.  Guests enter the existing  Mohegan Sun Casino
through one of four major entrances,  each of which is distinguished by a separate seasonal theme; winter,  spring,
summer and fall,  emphasizing  the  importance  of the  seasonal  changes to tribal  life.  The  Mohegan Sun Casino
currently  includes  approximately  150,000 square feet of gaming space and features more than 3,000 slot machines,
153 table  games,  42 poker  tables and guest  parking  for 7,500  cars.  Once the new  casino  opens in the fourth
quarter of 2001,  the Mohegan Sun Casino  Complex will include over 6,200 slot  machines.  The site for the Mohegan
Sun Casino is located  approximately  one mile from the  interchange  of Interstate 395 and  Connecticut  Route 2A,
which is a four-lane  expressway.  A four-lane  access road from Route 2A (with its own exit) gives  patrons of the
Mohegan Sun Casino direct access to Interstate  395, which is connected to Interstate 95, the main highway  linking
Boston,  Providence  and New York.  This road system allows  customers to drive directly into the property from the
interstate highway system without encountering any traffic light.

         Sun Cove, an indirect,  wholly owned  subsidiary of the Company,  is one of two managing  partners of TCA.
All  decisions  of the  managing  partners  require the  concurrence  of Sun Cove and the other  managing  partner,
Waterford Gaming, LLC.  In the event of deadlock there are mutual buy-out provisions.

Indian Ocean

         Management  fees  earned by the  Company for  services  provided  to Sun Indian  Ocean for the years ended
December  31,  2000,  1999 and 1998,  respectively,  amounted  to $7.5  million,  $6.5  million  and $6.0  million,
respectively.

         Through June 16, 2000, Sun  International  owned a 22.8% interest in Sun Indian Ocean, a Mauritian company
which is publicly  traded on the  Mauritius  Stock  Exchange.  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%.  Sun Indian Ocean is regarded as one of the premier  resort  operators
in the Indian Ocean and owns five beach resort  hotels in  Mauritius:  the 175-room Le Saint Geran Hotel ("Le Saint
Geran"),  the  200-room Le Touessrok  Hotel & Ile Aux Cerfs ("Le  Touessrok"),  the 248-room La Pirogue  Hotel ("La
Pirogue"),  the  333-room  Le CoCo Beach ("Le CoCo  Beach")  and the  238-room  Sugar Beach  Resort  Hotel  ("Sugar
Beach").  Until late 2000,  Sun Indian Ocean also owned the  187-room Le Galawa  Beach Resort ("Le  Galawa") in the
Comoro  Islands.  In November  2000,  Sun Indian  Ocean sold Le Galawa to an  unaffiliated  party.  Mauritius  is a
tropical island located in the Indian Ocean approximately 1,200 miles from the east coast of mainland Africa.

         The  resorts in  Mauritius  are  marketed  primarily  to luxury and  mid-market  tourists  from Europe and
southern Africa. Le Saint Geran and Le Touessrok offer deluxe  accommodations  and are acknowledged by the European
travel trade to be among the finest beach resorts in the world.  The Conde Nast Awards for Tourism  recently  rated
Le Touessrok  as the number one beach  resort in the world and Le Saint Geran was also  included in the top ten. La
Pirogue, Le CoCo Beach, and Sugar Beach cater to mid-market and budget travelers.

         Le Saint Geran was closed in April 1999 for  reconstruction  and reopened in December  1999. The 175 rooms
at Le Saint Geran include 162 suites, 12 rooms and an island-style home villa.

         Mauritius'  tourist  industry mainly comprises  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.  Sun Indian Ocean is a leading resort operator at the upper end of the market.

         Pursuant  to the  management  agreements  with  Sun  Indian  Ocean,  the  Company  provides  comprehensive
management services under individual management  agreements with each of Le Saint Geran, Le Touessrok,  La Pirogue,
Sugar Beach and Le CoCo Beach.  The term of each of these  management  agreements (the "Sun Indian Ocean Management
Agreements") continues through December 2008.

         Under  each of the Sun  Indian  Ocean  Management  Agreements,  the  Company  receives  a  management  fee
calculated as a percentage of revenues (2%) and adjusted  EBITDA  (15%).  The Company  receives  project-consulting
fees charged at 2.5% of the total project costs for construction and refurbishment at each resort.

The Republic of Mauritius

         The Republic of Mauritius is a small,  multi-ethnic,  independent  country  consisting of several  islands
with a land area of about 720 square  miles.  The  Republic of  Mauritius  is located in the Indian Ocean and has a
population of approximately 1.1 million.  The main island,  Mauritius,  lies approximately 1,200 miles off the east
coast of mainland  Africa.  The other islands are Rodrigues  Island,  the Agalega Islands and the Cargados  Carajos
Shoals.  The climate is  subtropical  and generally  humid.  Most  residents are  bilingual,  speaking  English and
French.  Mauritius  has been  independent  since 1968 and a republic  since 1991.  Presidential  elections are held
every five years and the next election will be held in 2004.

Dubai

         Management  fees earned by the Company for  services  provided to the Royal Mirage Hotel for the year ended
December 31, 2000 and for the four months of operation in 1999 were $1.2 million and $.5 million, respectively.

         In 1999,  the Company  entered into an  agreement to manage the Royal Mirage Hotel in Dubai,  which opened
in August  1999.  The Royal  Mirage  Hotel is a luxury  258-room  hotel  built to  resemble  an Arabian  fortess on
Jumerira  Beach in Dubai.  The  agreement  has a term of twenty  years from the  opening  of the  hotel.  Under the
terms of the  management  agreement,  the Company  receives a management fee calculated as a percentage of revenues
(1.5%) and gross operating  profits,  as defined (10%).  The management fee schedule may be renegotiated  after ten
years.  The owner of the Royal  Mirage  Hotel has  advised  the Company  that it intends to add  approximately  240
additional rooms to the property, which will be managed by the Company.

Florida

         Sun International  Resorts, Inc. ("SIRI"), a Florida corporation and an indirect  wholly-owned  subsidiary
of the Company,  together with its  subsidiaries  based in Florida,  provides  general and  administrative  support
services,  marketing  services,  travel  reservations and wholesale tour services for the Company's Paradise Island
operations.

France

         Through an indirect  wholly-owned  subsidiary,  the Company owns a tour  operator  company in France,  Sun
Vacances.  Sun Vacances primarily services patrons in France,  and offers  reservations  services for travel to Sun
Indian Ocean and the Royal Mirage Hotel in Dubai.

Seasonality and Weather

         The Company's  business has  historically  been seasonal,  with the largest number of patrons visiting The
Bahamas and Mauritius during late December and the first three months of the calendar year.  Accordingly,  revenues
and  operating  profits for the Company have  historically  been higher during the first  calendar  quarter than in
successive quarters.  In addition,  The Bahamas and Mauritius are subject to tropical weather and storms, which, if
severe,  can interrupt the normal  operations of the Company and affect tourism.  Similarly,  inclement weather can
adversely affect the operations of the Company's  Connecticut  operations as the principal means of  transportation
to this  property  is by  automobile  or bus.  Higher  revenues  and  earnings  are  typically  realized  from  the
Connecticut operations during the middle third of the year.

         During the third and fourth quarter of 1999, the Company's  Bahamian  operations were negatively  impacted
by  the  effects  of  Hurricane  Floyd  in  September  1999.  The  Company's  property  in  The  Bahamas  sustained
approximately  $45 million of property  damage,  for which  remedial  work was  completed  by  year-end  1999,  and
experienced  a number of customer  cancellations.  The Company was fully  insured for  property  loss and  business
interruption.  The Company  expects to remain fully  insured  against  property and  business  interruption  damage
resulting from storms.  However,  as a result of Hurricane Floyd, as well as substantial  losses experienced by the
overall  insurance  industry  throughout the past year,  effective July 1, 2000, the Company  incurred  substantial
increases in its insurance premiums paid.

Competition

General

         The resort and casino  industries are  characterized by a high degree of competition  among a large number
of  participants  and are largely  dependent on tourism.  The Company  competes  with resorts both with and without
gaming and with gaming facilities  generally,  including  land-based casinos,  river boat, dockside and cruise ship
on-board  casinos and other forms of gaming,  as well as other forms of  entertainment.  A number of the  Company's
competitors are larger and have greater  financial and other resources than the Company.  In addition,  a number of
jurisdictions  have recently  legalized gaming and other  jurisdictions are considering the legalization of gaming.
The  Company  cannot  predict  what  effect a  continued  proliferation  of gaming and the  resulting  increase  in
competition could have on the Company's ability to compete effectively in the future.

         The  Company  believes  that the  ability to  compete  effectively  in the  resort and gaming  industries,
particularly  the  destination  resort and gaming  industries,  is based on several  factors,  including the scope,
quality,  location and accessibility of resort and gaming facilities and amenities,  the effectiveness of marketing
efforts,  customer  service,  the relative  convenience  of available  transportation,  service and the quality and
price of rooms, food and beverages, convention facilities and entertainment.

The Bahamas

         The  Company's  Paradise  Island  operations  compete  with  cruise  ships and other  hotels and  resorts,
particularly  those on Paradise  Island and New  Providence  Island in The Bahamas as well as those on Grand Bahama
Island and the Caribbean islands.  There are approximately  8,300 rooms for overnight guests on Paradise Island and
New Providence Island combined,  of which  approximately  3,700 are located on Paradise Island,  including 2,423 in
hotels  owned and  operated  by the  Company.  The Nassau  Marriott,  a resort and casino  with a theater and other
amenities  located on New  Providence  Island,  across  Nassau harbor from Paradise  Island,  is Atlantis'  primary
competitor on Paradise Island and New Providence Island.

         Atlantis  also competes  with The Resort and Casino at Bahamia  (formerly  the Princess  Casino and Hotel)
and Our Lucaya,  which are 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 960-room hotel,  restaurants and
other  leisure  facilities.  Our Lucaya is a new property  which opened its first  phase,  consisting  of 550 hotel
rooms,  in May 2000.  An  additional  800 rooms  opened in December  2000,  bringing the total room count to 1,350.
Amenities  include 14 restaurants and lounges,  a 36-hole golfing complex,  a spa and 40,000 square feet of meeting
space.  In addition,  a new 30,000  square foot casino is planned at Our Lucaya and is expected to open in the fall
of 2001. The Atlantis  Casino  competes with gaming  facilities  located in hotels and resorts in Puerto Rico, with
cruise ships which  effectively  provide  additional  rooms and with resorts and casinos located on other Caribbean
islands, in Atlantic City, in Las Vegas and elsewhere in the United States.

Connecticut

         Because the Mohegan Sun Casino is marketed  primarily to day-trip  customers,  it competes  primarily with
the Foxwoods Resorts and Casino ("Foxwoods")  operated by the Pequot Tribe.  Foxwoods currently has more than 5,800
slot  machines,  and for the year 2000 had slot revenue of  approximately  $750 million.  To a lesser  extent,  the
Mohegan Sun Casino also competes with casinos in Atlantic  City,  certain of which have greater  resources and name
recognition  than the Mohegan Sun Casino.  Currently,  Foxwoods is the only casino in operation within 150 miles of
the Mohegan Sun Casino  site.  Foxwoods is located  approximately  10 miles from the Mohegan Sun Casino site and is
currently the largest gaming  facility in the United States in terms of the number of slot  machines.  In addition,
Foxwoods offers a number of amenities that the Mohegan Sun Casino does not currently  offer,  including  hotels and
extensive non-gaming  entertainment  facilities.  The current $960 million expansion of the Mohegan Sun Casino will
include an  additional  115,000-square  foot casino  scheduled  to open in the fourth  quarter of 2001,  which will
bring the total number of slot  machines to over 6,200.  In addition,  the  expansion  includes a 1,200-room  hotel
expected to open in the second quarter of 2002.

         Casino gaming in the  northeastern  United States may be conducted by federally  recognized  Indian tribes
operating  under the Indian  Gaming  Regulatory  Act of 1988  ("IGRA").  In  addition  to the Pequot  Tribe,  which
operates Foxwoods,  a federally  recognized tribe in Rhode Island and a federally recognized tribe in Massachusetts
are each seeking to establish gaming  operations in their respective  states.  Also, as previously  discussed,  the
Stockbridge-Munsee  Tribe is seeking  to develop a casino  project  in the  Catskill  region of New York.  In April
1999,  the St. Regis Mohawk Tribe opened a casino in upstate New York and is seeking  approvals to develop a casino
in the Catskill  region,  while the Oneida Tribe,  which operates a previously  existing gaming facility in upstate
New York, is seeking to expand its operations.  In addition,  a number of Indian tribes in the northeastern  United
States  are  seeking  federal  recognition  in order to  establish  gaming  operations.  Finally,  Boyd  Gaming  is
currently  constructing  a major casino  complex in Atlantic City and the Tropicana and Resorts  Atlantic City have
announced  major  expansions  which could  impact  Connecticut.  The Company  cannot  predict  whether any of these
tribes will be successful in establishing  gaming  operations and, if established,  whether such gaming  operations
will have a material adverse effect on the operations of the Mohegan Sun Casino.

         Under the  tribal-state  compact  between the Mohegan Tribe and the State of  Connecticut,  if Connecticut
were to legalize any gaming  operations  other than pursuant to IGRA (i.e., by an Indian tribe on Indian land) with
slot machines or other  commercial  casino games, the Mohegan Tribe would no longer be required to make payments to
the  State of  Connecticut  related  to slot  machine  revenues.  The  Company  is unable to  predict  whether  the
Connecticut  state  legislature  will accept any other casino  proposal and, if such  proposal  results in a casino
being constructed and opened, whether such casino will have a material adverse effect on the Mohegan Sun Casino.

Other Existing Operations

         Sun Indian  Ocean's  resorts  on  Mauritius,  as  vacation  destinations,  are in  competition  with other
locations  offering  vacations to tourists from Europe,  southern Africa and parts of Asia. In Mauritius,  there is
also  competition from other resorts on the island.  In the luxury end of the Mauritian  hotels market,  Sun Indian
Ocean owns two of the five  luxury  hotels  offering  a total of 375 rooms,  while the  competing  hotels  offers a
combined 344 rooms.  A sixth hotel,  with 90 rooms,  which is further  competition  in the luxury end market opened
in late 2000.  Sun Indian Ocean faces more  competition  for the  mid-market La Pirogue and Sugar Beach and for the
budget Le CoCo Beach. In total,  there are  approximately  4,000 hotel rooms of international  quality available in
Mauritius,  of which 1,500 are marketed in  approximately  the same price bracket as La Pirogue,  Le CoCo Beach and
Sugar Beach.

Certain Matters Affecting the Company's Bahamian Operations

Airline Arrangements

         The majority of patrons at the Company's  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.

Union Contract Arrangements

         In The Bahamas,  approximately  3,800 employees are represented by The Bahamas Catering and Allied Workers
Union (the "Union").  Sun Bahamas  participates in The Bahamas Hotel  Employers  Association  (the  "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 not been stable over the
last few years 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, the Company is often the target of labor disputes.

Casino License

         Paradise  Enterprises  Limited,  ("PEL"), a subsidiary of Sun Bahamas is currently licensed to operate the
Atlantis Casino under the Bahamian  Gaming Act (the "Gaming Act").  In accordance  with Bahamian  casino  licensing
requirements,  PEL is obligated  to have its casino  license  renewed  annually by the Gaming  Board.  In addition,
other than an existing contingent  obligation to grant two casino licenses,  the Bahamian Government agreed that it
will grant no new casino  licenses with respect to gaming  operations on Paradise  Island or New Providence  Island
until 2013,  provided that Sun Bahamas achieves 75% of its projected  minimum  employment growth of 2,000 full-time
jobs in connection  with its expansion and development  plans by year ten of the renewal period.  The current level
of employment at Sun Bahamas meets this condition.

Basic License Fee

         Currently,  the Gaming Act provides for taxes on casino  revenues  consisting  of an annual basic  license
fee of $200,000.

Casino Win Tax

         In replacement of the higher gaming taxes and fees previously  payable,  the Bahamian  Government  agreed,
beginning  January 1, 1998 until December  2018, to set annual casino license fees at $100,000 per thousand  square
feet of casino  space,  plus a minimum  annual  casino win tax of $4.1  million on all gaming win up to $20 million
and 10% on all  gaming win over $20  million.  Additionally,  during  the 11 years  beginning  1998,  the  Bahamian
Government  agreed to reduce the annual casino  license fees by $5 million and reduce by 50% the win tax to be paid
on gaming win over $20 million.  These terms are subject to an agreement  with the  Bahamian  Government  described
below under "Heads of Agreement".  As described  below,  effective July 1, 2000,  these  additional  incentives are
not currently realized.

         The following table  summarizes,  for the periods shown, the taxes and fees paid or accrued by Sun Bahamas
under the Gaming Act and certain agreements with the Bahamian Government:

                                                                  Years Ended December 31,
                                                     ----------------------------------------------------
                                                           2000              1999              1998
                                                     -----------------  ---------------   ---------------

Casino win                                                $10,719,000       $9,631,000        $7,327,000
Basic license and operating fees                              200,000          200,000           200,000
                                                     -----------------  ---------------   ---------------
    Total                                                 $10,919,000       $9,831,000        $7,527,000
                                                     =================  ===============   ===============

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  program at Atlantis.  The  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,
effective January 1, 1998.  The tax structure is described above under "Casino Win Tax."

         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,  as  described  below,  the casino win tax will  revert  back to the
previously  agreed  structure.  There is no change in the $4.1  million  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 will still apply;  however,  in lieu
of the 50% credit on win tax to be paid on gaming win over $20  million,  the Company  will receive a 45% credit on
win tax to be paid on gaming win between $20 million and $120  million.  The effect of these changes is expected to
approximate a $3 million per year increase in gaming win tax.  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.  Although  the  Company  currently  has no definite  plans to proceed  with the Phase III
development,  it will  continue  to consider  the  results at its  Paradise  Island  operations  as well as general
business trends and alternative uses of its capital in determining the timing of proceeding with Phase III.

         The  agreement  also  provides  for a new  five-year  joint  marketing  agreement,  pursuant  to which the
Bahamian  Government shall match the Company's  contribution,  up to $4 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.

         Pursuant to the Heads of  Agreement,  SIIL has agreed to control a majority of Sun  International's  Board
of Directors through June 30, 2004.

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 $35 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 That Affected the Company's Atlantic City Operations Prior to Its Disposition

Competition

         Competition in the Atlantic City casino/hotel  market is intense.  Casino/hotels  compete primarily on the
basis of promotional allowances,  entertainment,  advertising,  services provided to patrons, caliber of personnel,
attractiveness of the hotel and casino areas and related amenities,  and parking facilities.  Resorts Atlantic City
competes directly with 11 casino/hotels in Atlantic City which, in the aggregate,  contain approximately  1,198,000
square feet of gaming area, including simulcast betting and poker rooms, and over 11,000 hotel rooms.

         Resorts  Atlantic  City is located at the  northern end of the  Boardwalk  adjacent to the Trump Taj Mahal
Casino  Resort  (the "Taj  Mahal"),  which is next to the  Showboat  Casino  Hotel (the  "Showboat").  These  three
properties have a total of approximately  2,700 hotel rooms and  approximately  328,000 square feet of gaming space
in close proximity to each other. In 2000, the three  casino/hotels  combined  generated  approximately  26% of the
gross gaming revenue of Atlantic City. A 28-foot wide enclosed  pedestrian  bridge  between  Resorts  Atlantic City
and the Taj Mahal allows  patrons of both hotels and guests for events being held at Resorts  Atlantic City and the
Taj Mahal to move between the facilities  without  exposure to the weather.  A similar enclosed  pedestrian  bridge
connects the Showboat to the Taj Mahal,  allowing  patrons to walk under cover among all three  casino/hotels.  The
remaining nine Atlantic City  casino/hotels  are located  approximately  one-half mile to one and one-half miles to
the south on the Boardwalk or in the Marina area of Atlantic City.

         In recent  years,  competition  for the gaming  patron  outside  of  Atlantic  City has  become  extremely
intense.  In 1988, only Nevada and New Jersey had legalized  casino  operations.  Currently,  almost every state in
the United  States has some form of  legalized  gaming.  Also,  The  Bahamas and other  destination  resorts in the
Caribbean and Canada have  increased the  competition  for gaming  revenue.  Directly  competing with Atlantic City
for the  day-trip  patron  are two  gaming  properties  on  Indian  reservations  in  Connecticut.  One,  Foxwoods,
currently  has more  than  5,800  slot  machines,  and for the year 2000 had slot  revenue  of  approximately  $750
million,  which is more than twice the slot revenue of the largest  casino/hotel  in Atlantic City. The other,  the
Mohegan Sun Casino,  which  opened in October  1996 and until  December  31, 2000 was managed by TCA, has more than
3,000 slot  machines  and had slot revenue of  approximately  $550 million in 2000.  The Oneida  Indians  operate a
casino near Syracuse,  New York.  Other Indian tribes in the states of New York,  Rhode Island,  Massachusetts  and
Connecticut are seeking  approvals to establish gaming  operations which would further increase the competition for
day-trip patrons. In addition, three racetracks in the State of Delaware operate slot machines.

         This rapid expansion of casino gaming,  particularly that which has been introduced into  jurisdictions in
close  proximity to Atlantic  City,  adversely  affected the  Company's  operations in Atlantic City as well as the
Atlantic City gaming industry.

Transportation Facilities

         The lack of an adequate  transportation  infrastructure  in the Atlantic City area continues to negatively
affect the  industry's  ability to attract  patrons from outside its core  geographic  area. In 1996,  the Atlantic
City International  Airport,  located approximately 12 miles from Atlantic City, was expanded to double the size of
the terminal  and add  departure  gates,  to improve the baggage  handling  system and provide  sheltered  walkways
connecting the terminal and planes.  However,  scheduled  service to that airport from major cities by national air
carriers remains extremely limited.

         Since the  inception of gaming in Atlantic  City there has been no  significant  change in the  industry's
marketing base or in the principal means of  transportation  to Atlantic City,  which continues to be by automobile
and bus. The resulting  geographic  limitations and traffic congestion have restricted  Atlantic City's growth as a
major resort destination.

         At Resorts  Atlantic City, the Company utilized  day-trip bus programs.  To accommodate its bus patrons in
2000,  the  Company  constructed  a  nine-bay  bus  center  at  Resorts  Atlantic  City  with a  waiting  area that
accommodates up to 250 persons.

Union Contract Arrangements

         As of December  31, 2000,  at Resorts  Atlantic  City,  approximately  1,400  employees of the total 3,300
workforce  were  covered  under  collective  bargaining  agreements  with the  Resorts  International  Hotel,  Inc.
("RIH").  RIH is the Company's  former  subsidiary,  prior to its sale in April 2001,  which owns Resorts  Atlantic
City. There are four separate unions representing hotel and restaurant  employees,  electrical  workers,  engineers
and painters and maintenance workers.

Regulation, Gaming Taxes and Fees

General

         The Company's  operations  in Atlantic  City have been subject to  regulation  under the New Jersey Casino
Control  Act (the  "NJCCA"),  which  authorizes  the  establishment  of  casinos in  Atlantic  City,  provides  for
licensing,  regulation  and taxation of casinos and related  persons and entities and created the New Jersey Casino
Control  Commission (the "NJCCC") and the Division of Gaming  Enforcement to administer the NJCCA. In general,  the
provisions of the NJCCA  concern:  (i) the ability,  reputation,  character,  financial  stability and integrity of
casino operators,  their officers,  directors and employees and others financially interested in or in control of a
casino;  (ii) the nature and suitability of hotel and casino  facilities,  operating  methods and  conditions;  and
(iii) financial and accounting  practices.  Gaming  operations are subject to a number of restrictions  relating to
the  rules of  games,  types of games  permitted,  credit  play,  size of hotel  and  casino  operations,  hours of
operation,  persons who may be employed and  licensure of such  persons,  persons or entities  that may do business
with  casinos,  the  maintenance  of  accounting  and cash control  procedures,  security and other  aspects of the
business.

         As a result of the Resorts  Atlantic City Sale,  effective  April 25, 2001, the Company no longer operates
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 NJCCC as a
financial  source as a result of the $17.5  million  Note SINA issued to Colony  pursuant  to the Resorts  Atlantic
City Sale.

Casino License

         A casino  license is  initially  issued for a term of one year and must be renewed  annually  by action of
the NJCCC for the first two renewal periods  succeeding the initial  issuance of a casino  license.  Thereafter the
NJCCC may renew a casino license for a period of four years,  although the NJCCC may reopen  licensing  hearings at
any time.  A license is not  transferable  and may be  conditioned,  revoked or  suspended  at any time upon proper
action by the NJCCC.  The NJCCA also requires an operations  certificate  which, in effect,  has a term coextensive
with that of a casino  license.  On February 26, 1979,  the NJCCC granted a casino license to RIH for the operation
of the Resorts  Atlantic  City Casino.  In January 2000,  RIH's license was renewed for four years.  In order for a
casino  license to be renewed,  the licensee  must show by clear and  convincing  evidence that it meets all of the
criteria set out in the NJCCA,  including the qualification of holding,  intermediary and subsidiary companies of a
casino licensee and of the directors, officers and certain employees of such companies.

Restrictions on Ownership of Securities

         The NJCCA imposes  certain  restrictions  upon the ownership of securities  issued by a corporation  which
holds a casino license or is a holding,  intermediary or subsidiary company of a corporate licensee  (collectively,
"holding company").  Among other restrictions,  the sale, assignment,  transfer, pledge or other disposition of any
security  issued  by a  corporation  which  holds a casino  license  is  conditional  and shall be  ineffective  if
disapproved  by the NJCCC.  If the NJCCC finds that an individual  owner or holder of any securities of a corporate
licensee or its holding  company must be qualified  and is not qualified  under the NJCCA,  the NJCCC has the right
to propose any  necessary  remedial  action.  In the case of  corporate  holding  companies  and  affiliates  whose
securities are publicly traded, the NJCCC may require  divestiture of the security held by any disqualified  holder
who is required to be qualified under the NJCCA.

License Fees, Taxes and Investment Obligations

         The NJCCA  provides  for casino  license  renewal  fees,  other  fees  based upon the cost of  maintaining
control and regulatory  activities and various  license fees for the various classes of employees.  In addition,  a
casino  licensee is subject  annually  to a tax of 8% of "gross  revenue"  (defined  under the NJCCA as casino win,
less  provision for  uncollectible  accounts up to 4% of casino win) and license fees of $500 on each slot machine.
Also,  the NJCCA has been  amended  to create an  Atlantic  City  fund (the "AC  Fund")  for  economic  development
projects  other than the  construction  and renovation of  casino/hotels.  Beginning with fiscal year 1999/2000 and
for the following  three fiscal  years,  an amount equal to the average paid into the AC Fund for the previous four
fiscal years shall be  contributed  to the AC Fund.  Each  licensee's  share of the amount to be contributed to the
AC Fund is based upon its  percentage  of the total  industry  gross  revenue for the relevant  fiscal year.  After
eight years, the casino licensee's requirement to contribute to this fund ceases.

         The following table  summarizes,  for the periods shown, the fees, taxes and  contributions  assessed upon
RIH by the NJCCC.

                                                    Years Ended December 31,
                                     --------------------------------------------------------
                                          2000                1999                1998
                                     ----------------    ----------------    ----------------
Gaming tax                               $18,904,000         $17,701,000         $18,785,000
License and other fees                     3,891,000           3,603,000           3,733,000
Contribution to AC Fund                      453,000             307,000             496,000
                                     ----------------    ----------------    ----------------
    Total                                $23,248,000         $21,611,000         $23,014,000
                                     ================    ================    ================

         The NJCCC, as originally  adopted,  required a licensee to make investments  equal to 2% of the licensee's
gross  revenue (the  "investment  obligation")  for each  calendar  year,  commencing  in 1979, in which such gross
revenue exceeded its "cumulative  investments" (as defined in the NJCCA).  Effective for 1984 and subsequent years,
the amended NJCCA  requires a licensee to make an  investment  by  purchasing  bonds to be issued by the CRDA or by
making other  investments  authorized by the CRDA, in an amount equal to 1.25% of a licensee's  gross  revenue.  If
the investment obligation is not satisfied,  then the licensee will be subject to an investment  alternative tax of
2.5% of gross revenue.  Licensees are required to make quarterly  deposits with the CRDA against their current year
investment  obligations.  RIH's investment  obligations for the years 2000, 1999 and 1998 amounted to $2.6 million,
$2.8  million  and $2.9  million  respectively,  and,  with the  exception  of minor  credits  received  for making
donations,  have been  satisfied by deposits made with the CRDA.  At December 31, 2000,  RIH held $7.5 million face
amount  of bonds  issued  by the CRDA  and had  $18.1  million  on  deposit  with  the  CRDA.  On the  accompanying
consolidated  balance  sheets,  at December 31,  2000,  the CRDA bonds and deposits are included in Net Assets Held
For Sale.

Certain Matters Affecting the Company's Connecticut Operations

Regulation

         The Mohegan  Tribe is a  federally  recognized  Native  American  Indian  tribe with  approximately  1,100
members,  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).  TCA managed the  development  and  construction  and,  until  December  31,  1999,  managed the
operation and marketing of the Mohegan Sun Casino.

         Each of the  partners of TCA and certain  employees of the Mohegan Sun Casino must be licensed by relevant
tribal and state  authorities.  Each of the partners of TCA has received a gaming license from the  Commissioner of
Revenue  Services of the State of  Connecticut.  In addition,  gaming  licenses or  management  agreements  held or
subsequently  acquired by the Company or its  subsidiaries  pursuant to applicable law and  regulations,  including
the IGRA and the National  Indian Gaming  Commission  (the "NIGC")  regulations,  may require  review,  approval or
licensing of any person or entity  directly,  or  indirectly  possessing  or acquiring 10% or more of the Company's
equity  securities (a  "Substantial  Interest").  The NIGC may be required to review and approve any such person or
entity and make a finding of suitability  pursuant to the IGRA and NIGC regulations.  If the NIGC were to determine
that a person or entity  holding a Substantial  Interest in a gaming  management  agreement was  unsuitable,  prior
approval of the  management  agreement  could be revoked,  subsequent  approvals  or renewals  could be blocked and
certain required gaming licenses could be suspended, rescinded or denied.

Expansion

         In February 1998, the Mohegan Tribe appointed TCA to develop its  approximately  $960 million expansion of
the Mohegan Sun Casino,  which  includes an  additional  115,000  square foot casino,  an  entertainment  arena and
additional  retail space expected to open by the fourth quarter of 2001, as well as a 1,200-room  hotel expected to
open in the second quarter of 2002.


Management Fees

         The Mohegan  Tribe and TCA  entered  into the  Management  Agreement  pursuant to which the Mohegan  Tribe
engaged  TCA to operate,  manage and  maintain  the  Mohegan Sun Casino in exchange  for annual fees based upon net
revenues (as defined).  The monthly  management fee payments to TCA under the Management  Agreement were calculated
against 1/12th of targeted  annual net revenue  amounts set forth in the Management  Agreement and then adjusted to
actual net revenue  amounts  realized  annually  within 60 days of the close of each fiscal year. As defined in the
Management  Agreement,  "Net  Revenues"  of the  Mohegan  Sun  Casino  means the  amount of gross  revenues  of the
facility,  less operating expenses and certain specified  categories of revenue,  such as income from any financing
or  refinancing,  taxes or charges  received  from  patrons on behalf of and  remitted  to a  governmental  entity,
proceeds  from the sale of capital  assets,  insurance  proceeds  and  interest on the reserve  fund.  Net revenues
include "Net Gaming Revenues",  which are equal to the amount of "net win" (the difference  between gaming wins and
losses) less all gaming related operational  expenses.  In addition,  TCA was required to establish,  and, together
with the Mohegan Tribe,  make monthly  contributions to a replacement  reserve fund, which was used to pay approved
budgeted  capital  expenditures  for the  Mohegan  Sun Casino.  The annual TCA  contribution  to such fund was $1.2
million.

Term

         The term of the  Management  Agreement  was seven  years from the date of the  opening of the  Mohegan  Sun
Casino.  However,  TCA and the Mohegan Tribe entered into the  Relinquishment  Agreement whereby it was agreed that,
effective  January 1, 2000, TCA would turn over  management of the ohegan Sun Resort  Complex  (which  comprises the
existing operations and the current expansion) to the Mohegan Tribe. Pursuant to the Relinquishment  Agreement,  the
Management Agreement was terminated,  and beginning January 1, 2000, TCA receives annual payments of five percent of
the gross  revenues of the Mohegan Sun Resort  Complex for a 15-year  period.  Until January 1, 2000,  there were no
changes in TCA's agreements with the Mohegan Tribe.

Priority Payments

         Pursuant to subcontracts for management services,  organization and administrative  services and marketing
services  provided to TCA,  prior to January 1, 2000 the  Company  received  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.  For seven  years  beginning  January 1, 2000,  TCA will pay to the Company the first $5 million
from the five  percent of gross  revenues  it  receives  from the MTGA as a priority  payment  prior to the prorata
distributions to its partners.

Waiver of Sovereign Immunity

         Pursuant to the  Management  Agreement  and the  Relinquishment  Agreement,  the Mohegan  Tribe has waived
sovereign  immunity for the purpose of permitting,  compelling or enforcing  arbitration  and has agreed to be sued
by TCA in any  court of  competent  jurisdiction  for the  purpose  of  compelling  arbitration  or  enforcing  any
arbitration or judicial award arising out of TCA's  agreement with the Mohegan Tribe.  The parties have agreed that
all  disputes  and claims  arising out of TCA's  agreement  with the Mohegan  Tribe or the Mohegan  Tribe's  gaming
ordinance  will be  submitted  to binding  arbitration,  which  shall be the sole remedy of the  parties,  and that
punitive  damages may not be awarded to either party by any  arbitrator.  The Mohegan  Tribe's  waiver of sovereign
immunity is limited to enforcement  of monetary  damages from  undistributed  or future net revenues of the Mohegan
Sun Casino (or, under certain  conditions,  net revenues of other gaming  operations of the Mohegan  Tribe).  Funds
earned and paid to the Mohegan Tribe as the Mohegan  Tribe's  share of net revenues  prior to any judgment or award
are not subject to the waiver and would not be available for levy pursuant to any judgment or award.

Gaming Disputes Court

         The Mohegan Tribe's Constitution (the "Mohegan  Constitution")  provides for the governance of the Mohegan
Tribe by a tribal council,  in which the legislative  and executive  powers of the Mohegan Tribe are vested,  and a
constitutional  review board. On July 20,  1995, the tribal council enacted a tribal ordinance  creating the Gaming
Disputes Court (the "Court"),  which is composed of a trial and an appellate branch.  The Mohegan  Constitution and
the tribal ordinance  establishing  the Court give the Court exclusive  jurisdiction for the Mohegan Tribe over all
disputes and  controversies  related to gaming between any person or entity and the MTGA, the Mohegan Tribe or TCA.
The Court has been authorized by the Mohegan  Constitution to consist of at least four judges,  none of whom may be
members  of the  Mohegan  Tribe and each of whom must be either a retired  federal  judge or  Connecticut  Attorney
Trial Referee (who is an attorney appointed by the Connecticut Supreme Court).

Environmental Matters

         The Company is subject to federal,  state and local laws and  regulations  that (i) 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 (ii) impose  liability for the costs of cleaning up,
and certain damages  resulting from, past spills,  disposals or other releases of hazardous  substances  (together,
"Environmental  Laws").  From time to time,  the  Company's  operations  have  resulted  or may  result in  certain
noncompliance with applicable  Environmental Laws. However,  the Company believes that any such noncompliance would
not have a material adverse effect on the Company's financial position, results of operations or cash flows.

         The Mohegan Sun Casino 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 (the "NRC")  confirmed that all licensable  quantities of special nuclear  material
("SNM") had been removed from the Mohegan Sun Casino site and that any residual SNM  contamination  was  remediated
in accordance with the NRC-approved decommissioning plan.

         From  1991  through  1993,  UNC  commissioned  an   environmental   consultant  to  perform  a  series  of
environmental  assessments on the Mohegan Sun Casino 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 Casino site currently meets  applicable  remediation
requirements,  no assurance  can be given that the various  environmental  assessments  with respect to the Mohegan
Sun Casino site  revealed all existing  environmental  conditions,  that any prior owners or tenants of the Mohegan
Sun Casino 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 the Mohegan Sun Casino site. 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 the
Mohegan Sun Casino and therefore the results of operations and financial conditions of the Company.

         In  addition,  the  Environmental  Protection  Agency  (the  "EPA") has named a  predecessor  to SINA as a
potentially responsible party ("PRP") under the Comprehensive  Environmental  Response,  Compensation and Liability
Act of 1980  ("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 the Company has only limited
information at this time regarding  this site and the wastes sent to it by the  predecessor,  the Company is unable
to determine the extent of its potential liability, if any, at this site.

Sales and Marketing

         The  Company's  marketing  goal is to drive demand  direct from the consumer  through high profile  public
relations,  publications and special events  promotions and advertising.  To support its operations in The Bahamas,
the Company  maintains an internal  distribution  through its own travel agency and tour operator,  Paradise Island
Vacations,  Inc. as well as through  the  Company's  internet  web site,  Atlantis.com.  Similarly,  the  Company's
operations  in the  Mauritius  and Dubai are  supported  through the  Company's  own tour  operator in France,  Sun
Vacances.  In addition,  the Company  supports  channel  distribution  for all of it's  operations  through primary
wholesalers in the travel agent community with a favorable commission structure.

         The Company  spends  approximately  $20 million per year on sales and marketing for its  operations in The
Bahamas.  Pursuant to the Heads of  Agreement,  described  above under  "Certain  Matters  Affecting  the Companies
Bahamian  Operations-Heads  of Agreement",  the Company receives $4 million from the Bahamian Government toward the
direct costs related to staging  certain  marketing  events,  public  relations  activities  and the production and
placement of advertisement in all media.

(C)  Organizational Structure

         SIIL and certain of its direct and indirect  shareholders  own  approximately  67% of the Company's  $.001
par  value  capital  stock  (the  "Ordinary  Shares").  The  Company  is SIIL's  sole  investment  vehicle  for the
development of  entertainment,  resort and gaming  operations  outside southern  Africa.  SIIL is a private holding
company in which  each of  Caledonia  Investments  Plc,  an English  company  publicly  traded on the London  Stock
Exchange  ("Caledonia"),  Kersaf  Investments  Limited,  a South African company traded on the  Johannesburg  Stock
Exchange  ("Kersaf"),  and a trust  for the  benefit  of the  family of Mr.  Solomon  Kerzner,  Chairman  and Chief
Executive  Officer  of  the  Company,  controls  approximately  a  one-third  interest.  The  remaining  33% of the
Ordinary  Shares  are owned by other  public  shareholders.  See "Item 7.  Major  Shareholders  and  Related  Party
Transactions" for disclosure of all shareholders owning 5% or more of the Ordinary Shares.

         Set forth below is a table listing the Company's significant subsidiaries:

Name of Company                                                 Country of Incorporation         % of Ownership*
- -----------------------------------------------------------    ----------------------------     -------------------
Aberdeen Management Limited                                    Channel Islands                         100%
GGRI, Inc.                                                     United States                           (2)
Island Hotel Company Limited                                   The Bahamas                             (1)
Paradise Beach Inn, Limited                                    The Bahamas                             (6)
Paradise Enterprises Limited                                   The Bahamas                             (1)
Paradise Island Limtied                                        The Bahamas                             (1)
PIV, Inc.                                                      United States                           (5)
Purposeful BV                                                  Netherlands                             (7)
Resorts International Hotel, Inc.                              United States                          (3)(4)
Sun Cove Limited                                               United States                           (2)
Sun Cove New York, Inc.                                        United States                           (2)
Sun Hotels International (Bermuda), Limited                    Bermuda                                 100%
Sun Hotels International Management NV                         N. Antilles                             100%
Sun International Bahamas, Limited                             The Bahamas                             100%
Sun International Development Limited                          The Bahamas                             (1)
Sun International Management Ltd.                              British Virgin Islands                  100%
Sun International Management (UK) Ltd.                         United Kingdom                          100%
Sun International Marketing, Inc.                              United States                           (2)
Sun International New York, Inc.                               United States                           (2)
Sun International North America, Inc.                          United States                           100%
Sun International Resorts, Inc.                                United States                           (2)
Sun Vacances SA                                                France                                  (8)
Sunonline Limited                                              The Bahamas                             100%

* % Voting Power equals % of Ownership
(1)  100% owned by Sun International Bahamas, Limited
(2)  100% owned by Sun International North America, Inc.
(3)  100% owned by GGRI, Inc.
(4)  Sold on April 25, 2001 as part of the Resorts Atlantic City Sale
(5)  100% owned by Sun International Resorts, Inc.
(6)  100% owned by Paradise Island Ltd.
(7)  100% owned by Sun Hotels International Management NV
(8)  100% owned by Purposeful BV

(D)  Property, Plants and Equipment

         The Company's headquarters and registered office are located at Executive Offices,  Coral Towers,  Paradise
Island, The Bahamas.

         As of December 31, 2000 the Company owns or leases properties in The Bahamas, the United States, the United
Kingdom and France. Set forth below is a table listing our principal properties.

                                           Owned                                                                 Extent
              Name and                      or              Principal                                            Utilized
              Location                     Leased              Use               Size          Capacity          Year 2000
- --------------------------------------    ----------    ------------------    ------------   --------------    --------------
- --------------------------------------    ----------    ------------------    ------------   --------------    --------------

Atlantis                                  Owned         Hotel/Casino           60 acres          2,317              83%
Paradise Island, The Bahamas                                                                     Rooms         Occupancy

Ocean Club                                Owned         Hotel/Casino           55 acres           106               71%
Paradise Island, The Bahamas                                                                     Rooms         Occupancy

Ocean Club Golf Course                    Owned         Golf Course            188 acres          N/A               N/A
Paradise Island, The Bahamas

Resorts Atlantic City (1)                 Owned         Hotel/Casino          10.5 acres          644               87%
Atlantic City, New Jersey                                                                        Rooms           Occupancy

Undeveloped Land                          Owned         Future                 90 acres           N/A               N/A
Paradise Island, The Bahamas                            Development

Undeveloped Land                          Owned         (2)                    26 acres           N/A               N/A
Atlantic City, New Jersey

SIRI                                      Leased        Administrative             -              400                -
Ft. Lauderdale, Florida                                 Office and                             Employees
                                                        Travel Agency


(1)  Resorts Atlantic City was sold on April 25, 2001 as part of the Resorts Atlantic City Sale.

(2) Of the  undeveloped  land in Atlantic City,  approximately  12 acres were sold on April 25, 2001 as part of the
Resorts  Atlantic City Sale. Of the acres that were not sold,  approximately  10 acres are included in the Atlantic
City Option,  and effective  April 25, 2001,  through SINA, the Company leases this property to Colony for $100,000
per month.  All other land that the Company continues to own in Atlantic City is available for sale.

         In addition to the  properties  listed above,  the Company  leases  several small  administration  offices
throughout  various  locations  in the United  States  which are utilized  for  marketing  purposes.  The number of
employees  at each of these  offices is less than ten.  The Company  also leases a small  administrative  office in
Oxfordshire, United Kingdom, as well as office space in Seine, France, which Sun Vacances uses as a travel agency.

         The  majority  of the  property  owned  by the  Company  serves  as  collateral  to the  Revolving  Credit
Facility.  The Revolving Credit Facility becomes due on August 12, 2002.


ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

(A)  Operating Results

Consolidated Results

         2000 vs.  1999.  The  Company  recorded  a net loss of $119.1  million in 2000  compared  to net income of
$69.8  million in 1999.  Diluted  loss per share in 2000 was $3.86 as compared  to  earnings  per share of $2.05 in
1999.  The net loss in 2000  included  a  $229.2  million  write-down  of the net  assets  related  to the  Resorts
Atlantic  City Sale and the Atlantic  City Option to their  realizable  value.  Other  non-recurring  items in 2000
included $11.2 million of purchase  termination  costs related to the  cancellation  of the Company's  agreement to
acquire the Desert Inn, $7.0 million of  transaction  costs incurred in connection  with the Company's  self-tender
offer in June 2000 and the  termination  of the proposal by SIIL to acquire,  in a merger  transaction,  all of the
outstanding  Ordinary Shares that it did not already own and $7.6 million of pre-opening  costs  primarily  related
to the  expansion  of the  Company's  deluxe  Ocean  Club  Resort on  Paradise  Island  and the new Ocean Club Golf
Course.  Also in 2000, the Company  recorded a net gain of $76.4 million from the sale of luxury  homesites  around
the Ocean Club Golf Course at Ocean Club  Estates.  Net income in 1999  included  the  write-off of $5.4 million of
pre-opening  costs related to the 1999 renovation of Resorts  Atlantic City. On a proforma  basis,  excluding these
non-recurring  items,  the Company earned net income of $59.6 million,  or $1.93 per share on a diluted basis,  and
$75.2 million,  or $2.21 per share,  in 2000 and 1999,  respectively.  Net revenues in 2000,  excluding the sale of
lots 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.

         1999 vs.  1998.  The Company  recorded  net income of $69.8  million  compared  to $57.7  million in 1998.
Diluted  earnings per share  increased to $2.05 in 1999 as compared to $1.70 in 1998.  Net income in 1999  included
the write-off of non-recurring  pre-opening  expenses of $5.4 million related to the renovation of Resorts Atlantic
City. In 1998, net income  included the write-off of  non-recurring  pre-opening  expenses of $26.0 million related
primarily  to the opening at  Atlantis  in December  1998 of The Royal  Towers,  a 1,200 room deluxe  hotel,  a new
100,000   square-foot  casino  and  entertainment   center,   expanded  marine  habitats  and  other  entertainment
attractions.  On a proforma basis,  excluding  these  non-recurring  items,  the Company earned net income of $75.2
million,  or $2.21  per  share on a  diluted  basis,  and  $83.7  million,  or $2.46  per  share in 1999 and  1998,
respectively.  Net revenues were $739.0  million in 1999 as compared to $550.1  million in 1998,  excluding  income
of $754,000  pursuant to 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.

Segment Results

         Segment  results  stated  below  conform  to the  Segment  Information  included  in Note 16 of  Notes  to
Consolidated Financial Statements included in this Annual Report.

Paradise Island

         2000 vs. 1999.  The  Company's  Paradise  Island  operations  generated  income from  operations  of $85.7
million in 2000,  as  compared to $93.6  million in 1999.  The  Company's  largest  property  on  Paradise  Island,
Atlantis,  achieved an average  occupancy of 83%,  compared to 81% in 1999, and the average daily rate increased by
15% to $242.  While the Company  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  reflected  an increase of $2.7 million (or 5.6%) as compared to 1999 which
resulted from 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.  The Company  experienced  increases 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.  Sales and marketing  costs  increased  primarily due to more special events on Paradise  Island.  The
Company also  incurred  additional  costs in windstorm  insurance  premiums as a result of the effects of Hurricane
Floyd in September 1999 as well as overall increases experienced by 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.  The Company  recorded  net  revenues of $14.2  million  from
business interruption insurance recovery.

         1999 vs. 1998.  The  Company's  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%,  compared
to 87% in 1998,  while the average  daily rate  increased  by 13% to $211.  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,  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%.

         The increase in income from  operations  reflects a substantial  contribution  in 1999 from  Atlantis' new
1,200-room  Royal  Towers  Complex,  100,000  square  foot casino and  associated  recreational  and  entertainment
facilities.  As  previously  mentioned,  in 1999 the Company  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  effecting  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 the management services agreement.

Atlantic City

         2000 vs. 1999.  The Company  operated in Atlantic  City,  New Jersey  through its  wholly-owned  hotel and
casino,  Resorts  Atlantic City. In 2000,  Resorts  Atlantic City generated  income from operations of $7.6 million
as compared to a loss of $253,000 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,  the Company had taken
out of service  and/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/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.

         During the fourth  quarter of 2000,  the Company  entered  into a  definitive  agreement  to sell  Resorts
Atlantic City to Colony.  See "(B) Liquidity,  Capital  Resources and Capital  Spending" for a further  description
of this transaction.

         1999 vs. 1998.  In 1999,  the  property  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 existing  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/hotel  revenues was primarily due to lower complimentary  entertainment  revenues.  With the availability of
"Club 1133", an  entertainment  lounge which offers 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.

         On June 30,  1999,  management  completed  the  renovation  of Resorts  Atlantic  City.  The  construction
included extensive  renovations to the casino,  hotel lobby,  guestrooms and suites,  room corridors,  restaurants,
the hotel porte cochere and public areas.  In addition,  three new  restaurants  were created,  replacing two older
restaurants and a VIP player lounge was constructed.

Connecticut

         Sun Cove has a 50%  interest  in, and is a managing  partner of, TCA, a  Connecticut  general  partnership
that developed and, until January 1, 2000,  managed the Mohegan Sun Casino, a casino and  entertainment  complex in
Uncasville,  Connecticut.  TCA managed the Mohegan Sun Casino  pursuant to a Management  Agreement  which  provided
that TCA earn management  fees of between 30% to 40% of the Mohegan Sun Casino's  earnings after  depreciation  and
interest.  The  percentage of profits  distributed to the  partnership  started at 40% and declined to 30% based on
predetermined  profitability  thresholds.   Prior  to  distributing  its  profits  equally  to  its  partners,  TCA
contributed  $1.2 million per annum to the casino's  capital  reserve  account,  funded its own operating costs and
then made certain priority payments to its partners or their affiliates in return for services rendered.

         In 1998,  the Mohegan  Tribe  appointed  TCA to develop its  approximately  $960 million  expansion of the
Mohegan Sun Casino for a fee of $14 million.  The expansion  includes an additional  120,000 square foot casino,  a
1,200-room  hotel,  an arena and additional  retail space.  It is anticipated  that the new casino and retail shops
will open in the fourth  quarter of 2001 with the hotel  opening in the second  quarter of 2002.  In addition,  TCA
and the Mohegan Tribe entered into the  Relinquishment  Agreement  whereby it was agreed that effective  January 1,
2000, TCA would turn over  management of the Mohegan Sun Resort Complex  (which  comprises the existing  operations
and the  proposed  expansion)  to the Mohegan  Tribe.  Pursuant to the  Relinquishment  Agreement,  the  Management
Agreement  was  terminated  and,  beginning  January 1, 2000,  TCA  receives  payments of five percent of the gross
revenues of the Mohegan Sun Resort Complex for a 15-year period.

         2000 vs.  1999.  During  2000,  the  Mohegan Sun Casino  generated  gross  revenues  of $809.7  million as
compared to $748.4  million in 1999.  Gross  revenues  included  gaming win of $719.7 million and $653.4 million in
2000 and 1999,  respectively.  Slot win  increased by $51.8 million to $537.0  million in 2000 from $485.2  million
in 1999.  This was  largely  due to an  increase  in handle of $585.8  million to $6.787  billion,  and to a lesser
extent,  an increase in hold  percentage to 7.9% in 2000 from 7.8% in 1999.  The gross win per slot machine per day
increased  from $447 in 1999 to $495 in 2000.  Table game win increased by $12.9 million to $164.0  million in 2000
from $151.1  million 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 17% in both 2000 and 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 Management  Agreement.  The Company received  payments from TCA
of $19.8  million and $32.6 million in 2000 and 1999,  respectively.  The Company also earned  development  fees of
$3.8  million  and  $6.7  million  in  2000  and  1999,  respectively.  The  payments  received  by TCA  under  the
Relinquishment  Agreement are currently  contributing  less income than was previously  earned under the Management
Agreement.  However,  the  Relinquishment  Agreement will expire in 2014,  whereas the Management  Agreement was to
expire in 2003.  As mentioned  above,  the expansion of the Mohegan Sun Casino is expected to open in late 2001, at
which time  payments  received by TCA under the  Relinquishment  Agreement  will be based on gross  revenues of the
expanded casino.

         1999 vs. 1998.  During 1999,  the Mohegan Sun Casino  generated net revenues of $684.3 million as compared
to $605.6  million in 1998.  Net  revenues  included  gaming win of $653.4  million and $576.7  million in 1999 and
1998,  respectively.  Slot win increased by $63.1  million to $485.2  million in 1999 from $422.1  million  in1998.
This was due to an increase in handle of $913.4 million to $6.201  billion,  partially  offset by a slight decrease
in hold  percentage.  The gross win per slot  machine per day  increased  from $395 in 1998 to $447 in 1999.  Table
game win  increased by $7.8  million to $151.1  million in 1999 from $143.3  million 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 1998 to
17% in 1999.  Operating  earnings  before bingo  (which is not managed by TCA)  increased by $9.6 million (or 4.8%)
to $209.0 million in 1999 from $199.4 million in 1998.

         TCA earned  management  fees of $59.6  million in 1999 as compared to $53.7  million in 1998.  The Company
earned fees from TCA of $32.6  million and $34.6  million in 1999 and 1998,  respectively.  The Company also earned
development fees of $6.7 million in 1999.

Sun Indian Ocean Equity Ownership

         Through June 16, 2000, Sun  International  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%.  Sun Indian Ocean owns five beach
resort hotels in Mauritius  and,  until late 2000,  owned one hotel in the Comoro  Islands.  In November  2000, Sun
Indian Ocean sold the property in the Comoro  Islands to an  unaffiliated  party.  Equity  earnings from Sun Indian
Ocean were $3.4 million, $2.6 million and $2.7 million in 2000, 1999 and 1998, respectively.

Sun Indian Ocean and Dubai Management Contracts

         The Company has long-term  management  contracts  with the Mauritius  properties  discussed  above,  which
expire in 2008.  In  addition,  the Company  manages the Royal  Mirage  Hotel,  a 258-room  beach  resort  hotel on
Jumeira  Beach in Dubai  which  opened in August  1999.  The terms of the Dubai  management  contract  extend for a
period of twenty years from the date the property  opened.  The hotels in Mauritius  and the Comoro  Islands  along
with the hotel in Dubai are collectively referred to as the Management Properties.

         2000 vs. 1999. In 2000,  the  Management  Properties  generated  revenues of $133.7 million as compared to
$92.9  million  in 1999 and had 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 St. Geran, a high-end  luxury hotel
in  Mauritius,  which  operated  for a full  year in 2000,  whereas  in 1999 the  hotel  was  closed  in April  for
renovations  and did not reopen 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 occupancy and average room rate for the Sun Indian Ocean  Mauritian  properties  were 83.1% and $160,
as compared to 82.3% and $131 in 1999.  At the Royal Mirage  Hotel in Dubai,  the  occupancy  and average 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, the Company  earned  management  fees from the Management  Properties of $8.7 million as compared
to $6.2 million in 1999. Development fees of $760,000 earned in 1999 related to the renovation of Le St. Geran.

         1999 vs. 1998.  In 1999,  the  Management  Properties  generated  revenues of $92.9 million as compared to
$88.8  million in 1998 and had net income of $12.4  million in 1999  compared to $10.8  million in 1998.  Increased
revenues are 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.  Although  revenues from the Mauritian  properties  decreased
in 1999  compared to 1998,  these  properties  performed  extremely  well over the  previous  year.  The  decreased
operating  results  were  primarily  due to  reduced  revenues  at Le St.  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  favorable  variances in revenues and  operating  profits of $9.0 million and $5.2
million,  respectively.  These results were partially  offset by reduced  operating  profit in the Comoro  Islands.
In 1999,  the occupancy and average room rate for the Sun Indian Ocean  Mauritian  properties  were 82.3% and $131,
as compared to 80% and $133 in 1998.

         In 1999 the Company earned  management fees from the Management  Properties of $6.2 million as compared to
$5.9 million in 1998.  The Company also earned  $760,000 of  development  fees related to the  renovation of Le St.
Geran in 1999 compared to $90,000 in 1998.

Harborside at Atlantis

         In 1999,  through one of it's Bahamian  subsidiaries,  the Company formed a joint venture with Vistana,  a
subsidiary of Starwood,  to develop a timeshare  project on Paradise  Island,  Harborside at Atlantis,  adjacent to
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 in February  2001.  Sales of the timeshare  units
began in May 2000.  In 2000,  the Company  earned  $3.4  million in fees for  marketing  and  development  services
provided to Harborside at Atlantis.  Equity earnings in 2000 were $780,000.

Other Factors Affecting Earnings

         2000 vs 1999.  In 2000,  non-recurring  items  included  a gain of $76.4  million  from the sale of luxury
homesites at Ocean Club Estates on Paradise  Island.  During 2000,  the Company  completed the  development  of the
infrastructure  for Ocean Club Estates,  which includes 121 luxury  homesites  situated  around the Company's newly
renovated golf course.  As of December 31, 2000, 102 of these lots were sold.

         Non-recurring  expenses in 2000 included a write-down of assets related to the Resorts  Atlantic City Sale
and Atlantic  City 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,  the Company  recorded a loss of $229.2 million in
the fourth quarter of 2000.  Purchase  termination  costs of $11.2 million in 2000 related to the  cancellation  of
the  Company's  agreement  to acquire the Desert Inn from  Starwood.  These costs  included  $7.2  million  paid to
Starwood  pursuant to the terms of canceling  the  agreement.  Also in 2000,  the Company  incurred $7.0 million of
transaction  costs in  connection  with the Company's  self-tender  offer in June 2000 and the  termination  of the
proposal by SIIL to acquire,  in a merger  transaction,  all Ordinary Shares in the Company 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 Company's  deluxe Ocean Club Resort on Paradise Island and the new Ocean
Club Golf Course.  In 1999,  pre-opening  expenses  related to the opening of the  renovation  completed at Resorts
Atlantic City.

         General  corporate  expenses  increased by $6.4 million (or 37.9%) to $23.3 million in 2000 as compared to
$16.9  million  in 1999.  The  increase  was  largely  due to  higher  information  technology  costs  incurred  in
connection  with the  enhancement  of certain  computer  software  programs and improving the overall  structure of
computer  systems  throughout the Company.  Also  contributing to the increase in corporate  expenses,  to a lesser
extent,  were new project costs incurred as management of the Company  continues 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.

         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  pursuant  to a  long-term  contract.  This
contribution  was  fixed at $2.4  million  in 1994  and  increases  at a rate of 3% per  annum  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 million gain from the  cancellation  of notes that were  previously  included in  long-term  debt and
$600,000  received as a final  installment  on the 1996 sale of a management  contract.  These items were partially
offset by costs incurred with the Company's Year 2000 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 the Mohegan Sun Casino in 1996,  the  Company  held  subordinated  notes  issued by Mohegan  Tribal
Gaming  Authority,  for which interest  payments were satisfied by the issuance of additional  notes. 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 renovation  completed at 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 a grand  opening  promotion.  In
addition,  in 1998,  $631,000 of  pre-opening  expenses were incurred  related to the  establishment  of a new tour
operation  subsidiary in France.  Such costs were not related to the ongoing operations of the Company 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  earned in 1999 under the
executive  incentive  bonus plan.  Bonuses under this plan are based on the Company  meeting  certain  earnings per
share thresholds.

         Other  segments in 1999  include  net  revenues of $2.9  million  received  from  Kersaf.  Other  segments
contributed  $2.3 million to consolidated  operating  income as compared to $621,000 in 1998. In 1999, $1.0 million
of notes that were  previously  included in  long-term  debt were  canceled  and  written  off.  Also in 1999,  the
Company received $600,000 as a final  installment on the 1996 sale of a management  contract as a result of certain
conditions  being  met.  Costs  related to the  Company's  Year 2000  compliance  were  lower by  $500,000  in 1999
compared to 1998.  Other  segments in 1998 included  $754,000  rental 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 the  Company's  revolving  credit  facility  were $18.3  million  higher  than 1998 due to higher  average
borrowing levels.

(B)  Liquidity, Capital Resources and Capital Spending

         At December 31, 2000,  the Company's  working  capital was $107.5  million.  Current  assets  included net
assets held for sale of $138.4 million,  pursuant to the terms of the Resorts  Atlantic City Sale described  below,
and current  liabilities  included $13.0 million in capital creditors  related to development  projects on Paradise
Island.  At December 31, 2000,  unrestricted  cash and cash  equivalents  were $22.5 million.  During the year, the
Company generated $225.3 million in operating cash flow.

         On  April  25,  2001,  the  Company  sold  Resorts  Atlantic  City  to  Colony  for a  purchase  price  of
approximately  $144  million,  including  accrued  interest.  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,  which option can be extended for an additional two years under certain  circumstances.  To facilitate
Colony's  financing,  the Company lent  Colony's  affiliate  $17.5  million  toward the  purchase  price of Resorts
Atlantic  City in  exchange  for an  unsecured  note at an  interest  rate of 12.5% per annum.  Interest is payable
semi-annually,  one-half in cash and one-half in 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 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  on the
Revolving Credit Facility.

         The Revolving Credit Facility  previously allowed for maximum  borrowings up to $500 million,  such amount
to be reduced by $125  million on August 12,  2001.  To allow for the Resorts  Atlantic  City Sale and the Atlantic
City Option,  in January 2001,  the  Revolving  Credit  Facility was amended.  The  amendment  states,  among other
things,  that, in lieu of the $125 million  reduction  discussed  above,  (i) if the Resorts Atlantic City Sale was
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  would 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 was
consummated  on or before August 12, 2001,  the amount of borrowings  available on the  Revolving  Credit  Facility
would be further  reduced by the net cash proceeds  received by the Company.  Accordingly,  on April 25, 2001,  the
maximum amount of borrowings  available on the Revolving Credit Facility was reduced by $127 million,  the net cash
proceeds  received in the Resorts  Atlantic  City Sale.  As of December 31, 2000,  borrowings  under the  Revolving
Credit Facility amounted to $369 million.

         In November 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 million of
debt  securities  (the "Shelf  Registration").  Pursuant to the Shelf  Registration,  in December 1997, the Company
issued $100  million of senior subordinated unsecured notes due December 2007.

         In June 2000,  the Company  offered to purchase up to  5,000,000  Ordinary  Shares at a $24 per share cash
price,  pursuant to an Offer to Purchase.  The self-tender  offer was subject to the terms and conditions set forth
in the 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  periodic  reporting  requirements  of the
Securities  Exchange Act of 1934. In August 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.  The  self-tender  offer was financed
with borrowings under the Revolving Credit Facility.

         During 2000, the Company completed the  redevelopment of the Paradise Island Golf Course,  including a new
clubhouse,  and  developed  the  infrastructure  to  support  the Ocean Club  Estates  housing  development,  which
comprised 121 luxury  homesites  surrounding the golf course.  Also during 2000, the Company  completed an addition
to the Ocean Club,  it's  high-end  luxury  resort hotel on Paradise  Island.  The addition  comprised 50 luxurious
rooms,  including ten deluxe suites,  as well as a new beachfront  restaurant and  significant  enhancements to the
existing pool 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 homesites have been sold and the Company realized $108.7 million in gross proceeds.

         During the second  half of 2000,  the Company  completed  an  extensive  maintenance  capital  expenditure
program of  approximately  $20 million at Atlantis'  Beach Tower.  This program  included the  renovation of all of
the Beach Tower's 425 rooms and improvements to certain public spaces.

         During  2001,  the  Company  plans  to  complete  a  major  maintenance  capital  expenditure  program  of
approximately  $20 million to complete  renovations at Atlantis.  This will include the renovation of approximately
400 rooms in the Coral Towers, including improvements to certain public spaces.

         In May 2001, the Company  announced  that it has agreed to operate  Kanuhura Sun, a 100-room luxury resort
located on  Kanuhura  Island in the Maldive  Islands.  The  Company  expects to enter into a  long-term  management
agreement to operate  Kanuhura Sun in exchange for certain fixed fees and additional  fees based on a percentage of
revenues and gross operating profit, as defined.

         Management  believes that available cash on hand at December 31, 2000,  combined with funds generated from
operations  and funds  available  under the  Revolving  Credit  Facility  will be sufficient to finance its planned
operating and development activities for at least the next twelve months.

(C)      Research and Development

         Management  of the  Company  continually  researches  and  assesses  new  development  and  or  investment
opportunities  and  management  contracts  throughout  the world.  Before  pursuing  any new  business,  management
considers  its  available  capital,  business  trends  and  alternative  uses of its  capital  in  determining  the
feasibility and timing of proceeding with such new business.

         The costs incurred by the Company on its research and assessment of new business is not material.

(D)      Trends

         Management  fees earned by the Company for the year 2000,  related to the  operations at Sun Indian Ocean,
amounted  to $7.5  million.  Management  anticipates  that such fees will be reduced by  approximately  10% for the
year 2001 due to the decline in the Mauritian  Rupee as compared to the US dollar.  This  devaluation  has impacted
the Company historically and management believes this trend will continue.

         Due to the  recent  proliferation  of online  gaming,  the  Company  anticipates  that there may be future
competition  affecting  its  gaming  operations.  The  Company  is  currently  licensed  by  the  Kahnawake  Gaming
Commission,  a native North  American  Indian band in Canada,  to operate an online  casino.  The Company is in the
advanced  stages  of  designing  its site and is  prepared  to begin  operation.  The  Company  has  developed  and
implemented  systems and procedures to exclude play from  jurisdictions  where internet gaming is illegal,  such as
the  United  States.  The  Company  intends  to  initially  operate  its  internet  gaming  site on a test basis to
determine  the  viability of the  business and the  effectiveness  of its systems to maintain  compliance  with all
applicable  laws.  There  can be no  assurances  that the  business  is  viable or the  Company's  systems  will be
effective.  Additionally,  the Company is unable to predict whether,  or to what extent,  on-line gaming in general
will affect the Company's future results of operations.

Other Matters

Trading Cove New York

         In March  2001,  TCNY  entered  into the  Development  Agreement  with the  Stockbridge-Munsee  Tribe  for
development of a casino project in the Catskill  region of New York.  Pursuant to the Development  Agreement,  TCNY
will  provide  preliminary  funding,  certain  financing  and  development  services.  TCNY has secured land and/or
options  on   approximately   340  acres  of  property  in  the  town  of   Thompson   for  the  NY  Project.   The
Stockbridge-Munsee  Tribe does not  currently  have  reservation  land in the State of New York,  but is  federally
recognized  and operates a casino on its  reservation  in  Wisconsin.  The NY Project is  contingent  upon numerous
federal, state and local approvals to be obtained by the  Stockbridge-Munsee  Tribe, which approvals are beyond the
control of TCNY.  The  Company  can make no  representation  as to whether any of the  required  approvals  will be
obtained by the Stockbridge-Munsee Tribe.

New Accounting Pronouncements

         In June 1998, the Financial  Accounting  Standards Board ("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.  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.


ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

(A)  Directors and Senior Management

The current directors of the Company are:

                                            Country of                                Director
Name                                        Citizenship                               Since
- ------------------------------------------- ----------------------------------------- --------------------------------

Solomon Kerzner                             South Africa                              1993
Derek Hawton                                South Africa                              1993
Peter Buckley                               United Kingdom                            1994
Howard Marks                                United States                             1994
Eric Siegal                                 United States                             1994

The current executive officers of the Company are:

                                                                                        Executive
                                                                                         Officer
           Name                                  Title                      Age           Since
- ----------------------------     --------------------------------------    -------    ---------------

Solomon Kerzner                  Chairman and Chief Executive                65            1993

Howard B. Kerzner                President                                   37            1995

Charles D. Adamo                 Executive Vice President                    40            1995

John R. Allison                  Executive Vice President-Chief              55            1994
                                 Financial 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 the  Chairman and Chief
Executive  Officer  since  October  1993 and from  October 1993 to June 1996 he served as President of the Company.
Mr.  Kerzner is the Chairman of SIIL,  the Company's  controlling  shareholder,  and of WLG, which owns an indirect
interest  in SIIL.  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  approximately  100
miles  northwest of  Johannesburg,  South  Africa,  Sun City has been expanded in phases since its opening in 1979.
The  resort  has been  designed  to cater to a broad  public  market by  combining  gaming  with a wide  variety of
nongaming entertainment  experiences.  Today, Sun City covers approximately 620 acres and attracts over two million
visitors  annually.   The  facilities  at  Sun  City  include  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 $275
million themed resort which recreates a forgotten African  civilization that has been  rediscovered.  The Lost City
covers  approximately  60 acres and its center  includes  The  Palace,  a 350-room  luxury  hotel.  The resort also
includes a man-made  jungle in which over one million trees were  transplanted  and the Valley of the Waves,  which
includes  a wave  pool,  adventure  rides  and sand  beaches.  During  Mr.  Kerzner's  34-year  career  he has been
responsible  for the  development of 21 hotels with over 5,500 rooms and was the founder of the largest hotel chain
in southern Africa. The Company does 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. ("SII"), a resort
and management  holding company with interests in approximately  27 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  Buckley,  Director:  Mr.  Buckley has been a Director since April 1994. Mr. Buckley is Chairman and
Chief Executive  Officer of Caledonia.  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
linked company), SIIL and The Telegraph plc.

         Derek  Hawton,  Director:  Mr. Hawton has been a Director  since  December  1993.  Mr. Hawton is Executive
Chairman of Kersaf.  He is also a Director of various  listed  public  companies in South  Africa.  Mr. Hawton is a
fellow of South Africa's Chartered Institute of Secretaries.

         Howard  Marks,  Director:  Mr.  Marks has been a Director  since  April  1994.  Mr.  Marks is  Chairman of
Oaktree Capital  Management,  LLC ("Oaktree  Capital").  Oaktree Capital 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 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.

(B)  Compensation

         The  aggregate  cash  compensation  for  directors  and  officers of the Company,  including  salaries and
bonuses,  for the year ended  December  31, 2000 was  $5,898,000.  In  addition,  during the year 2000,  options to
purchase an  aggregate  of  1,825,000  Ordinary  Shares,  pursuant to the Plans  described  below,  were granted to
directors and officers of the Company.  None of the  directors or officers  participate  in the  Company's  pension
plan.  The Company does not set aside any amounts for pension or  retirement  benefits for any of its  directors or
officers.

         The Company had adopted an executive  level bonus plan (the "Bonus  Plan")  effective  for 1998 pursuant to
which  certain  executives of the Company could  qualify for bonuses if the Company  attained  certain  target level
Earnings Per Share  ("EPS") in the years  ending  1998,  1999 and 2000.  Under the Bonus Plan,  bonuses  could range
between 20% to 100% of the respective employee's base salary if target EPS was reached in the given year with 50% of
the bonus paid in cash and 50% paid in restricted  capital stock. The restricted stock would vest equally over three
years. In 1998,  executive  officers of the Company earned an aggregate of $3.1 million in cash bonuses,  which were
paid by the  Company  by the first  quarter  of 1999,  and  approximately  75,000  shares of  restricted  stock (the
"Restricted  Stock").  In 1999,  no bonuses  were  earned  under the Bonus  Plan.  In June 2000,  the Bonus Plan was
eliminated and the Company  canceled  approximately  42,000 shares of the  Restricted  Stock and paid to the holders
thereof approximately $1.6 million. Effective for the year 2001, the Company has adopted a new bonus plan for all of
its employees,  including the Company's officers.  Employees and officers of the Company will qualify for bonuses if
the Company  attains  either certain levels of EBITDA or EPS, and such bonuses will be calculated as a percentage of
each  individual's  salary.  Such  percentage  will be based  on,  among  other  things,  each  employee's  level of
responsibility  with the Company.  Bonuses  paid to officers of the Company  under this new bonus plan could reach a
maximum of 60% of the respective employee's base salary.

         The Company has adopted three Stock Option Plans for its employees,  officers and  directors.  The Company
has  adopted a Stock  Option  Plan (the "1995  Plan")  which was  approved by  shareholders  at the annual  general
meeting held in 1995,  a Stock Option Plan (the "1997  Plan"),  which was  approved by  shareholders  at the annual
general  meeting held in 1997 and amended by  shareholders  at the annual  general  meeting in 1998 and 1999, and a
Stock  Option Plan (the "2000  Plan")  which was approved by  shareholders  at the annual  general  meeting held in
2000. The 2000 Plan,  the 1997 Plan and the 1995 Plan are  collectively  referred to as the "Plans".  The 1995 Plan
provides  for  options to be granted to purchase  up to  2,000,000  Ordinary  Shares,  of which  options to acquire
2,000,000  Ordinary  Shares at exercise  prices  ranging  from  $11.6875 to $35.00 have been granted as of June 15,
2001.  The 1997 Plan  provides  for options to be granted to purchase up to  2,500,000  Ordinary  Shares,  of which
options to acquire  2,500,000  Ordinary  Shares at exercise  prices ranging from $19.25 to $44.63 have been granted
as of June 15,  2001.  The 2000 Plan  provides  for  options to be granted to  purchase  up to  3,000,000  Ordinary
Shares of which options to acquire  2,660,000  Ordinary Shares at exercise prices ranging from $16.00 to $20.94 had
been granted as of June 15, 2001. The 1995 Plan provides for the options to become  exercisable,  unless  otherwise
specified  by the  Board  of  Directors  of the  Company  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.  Options issued under the 1997 Plan become  exercisable one
year from the date of grant with  respect to 20% of such options and  thereafter  in  installments  of 20% per year
over a four-year  period.  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.  Employees,  officers and
directors  of the Company and  subsidiaries  of the Company may be granted  options  under the Plans.  Such options
may be transferred to trusts with respect to which any such  participants  are  beneficiaries  and  corporations or
other entities  controlled by such  participants.  As of December 31,  2000,  options to acquire 6,017,000 Ordinary
Shares were outstanding, of which 3,459,000 were exercisable as of that date.

         In connection  with the  self-tender  offer for up to 5,000,000  Ordinary Shares at $24 per share launched
by the Company on June 26, 2000, unvested options to acquire  approximately  700,000 Ordinary Shares under the 1995
Plan and the 1997 Plan with exercise prices below $24 per share were vested.

         The Company is currently  evaluating its  compensation  policies and plans, and intends to modify existing
plans  and/or adopt new plans,  including  adopting a new stock option plan and  granting  stock  options  pursuant
thereto, as the Company deems necessary and appropriate to retain and motivate management.

         As of June 15,  2001,  the officers and  directors  of the  Company,  as a group,  hold options to acquire
approximately 3,595,000 Ordinary Shares, of which approximately 1,770,000 are currently exercisable.

         The Company does not have a service contract with any of its officers or directors.

(C)  Board Practices

         Pursuant to the Company's  Articles of  Association,  as amended,  the maximum  number of directors of the
Company is fixed at five. The current  directors of the Company were elected at the annual general  meeting held in
May 2000 and will hold  office  until the date of the  annual  general  meeting  to be held in 2001.  At the annual
general meeting to be held in 2001 and at each subsequent  annual general  meeting,  directors will be appointed by
resolution of the holders of Ordinary Shares to hold office until the date of the next annual general meeting.

         The Board of  Directors  of the  Company 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 the Company that may interfere  with the exercise of their  independence  from  management  and the Company.  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 the
Company's 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 the  Company's
management and Board of Directors have  established  and the audit process.  The Audit  Committee  meets four times
per year.

         The Company also has a Remuneration  Committee  consisting of Messrs. S. Kerzner,  Buckley and Hawton. The
Remuneration  Committee is mandated to review and adopt the Company's  executive  compensation  plans and policies,
including the adoption of stock option plans and the granting of options to senior executives thereunder.

         The Company's Stock Option Committee, consisting of Messrs. S. Kerzner, H. Kerzner and Adamo, is authorized
to grant stock options under the Company's  stock option plans in amounts not to exceed (i) 100,000  Ordinary Shares
in any one quarter or (ii) 15,000 per grant for any one individual.

(D)  Employees

         The total number of  employees at the  Company's  properties  worldwide as of December 31, 2000,  1999 and
1998 was approximately 9,600, 9,500 and 8,900, respectively.

         Set forth  below is a table  showing  the number of  employees  by  geographic  location  for the  periods
indicated.

                                          As of December 31,
                                ---------------------------------------
                                     2000          1999           1998
                                ----------     ---------     ----------
The Bahamas                         5,800         5,700          5,100
Atlantic City                       3,300         3,300          3,400
Other                                 500           500            400
                                ----------     ---------     ----------
                                    9,600         9,500          8,900
                                ==========     =========     ==========

         The Company does not employ a significant number of temporary workers.

Union Contract Arrangements-The Bahamas

         In The Bahamas,  approximately  3,800 employees are represented by The Bahamas Catering and Allied Workers
Union. Sun Bahamas  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 not been stable over the last few years 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,  the Company is often the
target of labor disputes.

Union Contract Arrangements-Atlantic City

         As of December  31, 2000,  at Resorts  Atlantic  City,  approximately  1,400  employees of the total 3,300
workforce  were  covered  under  collective  bargaining  agreements  with  RIH.  There  are  four  separate  unions
representing hotel and restaurant employees, electrical workers, engineers and painters and maintenance workers.

(E)  Share Ownership

         Mr. S. Kerzner  beneficially owns  approximately 4.6 million Ordinary Shares.  Each of our other directors
and officers owns beneficially less than 1% of the Ordinary Shares.

         For a description of options  granted to our directors,  executive  officers and other key employees,  see
"(B) Compensation".


ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

(A)  Major Shareholders

         SIIL owns  approximately  50% of the outstanding  Ordinary Shares and is the principal  shareholder of the
Company.  WLG, a company  controlled by a trust for the benefit of the family of Mr. Solomon  Kerzner,  Chairman of
the Board of  Directors  and Chief  Executive  Officer of the Company,  indirectly  controls  through  intermediate
entities  approximately  one-third of the  outstanding  ordinary shares of SIIL.  Peter Buckley,  a director of the
Company and SIIL,  is also  chairman  and chief  executive  officer of  Caledonia,  which  indirectly  owns through
intermediate  entities  approximately  one-third  of the  outstanding  ordinary  shares of SIIL.  Derek  Hawton,  a
director of the  Company  and SIIL,  is also  chairman  and chief  executive  officer of Kersaf,  which  indirectly
controls through intermediate entities approximately one-third of the outstanding ordinary shares of SIIL.

         SIIL has agreed with the Bahamian  Government,  among other things,  to control a majority of the Board of
Directors until June 30, 2004.

         Ownership  participation  in SIIL is governed by a Subscription  and  Shareholders'  Agreement.  Rosegrove
Limited  ("Rosegrove")  owns  approximately  two-thirds  of the  outstanding  equity  of  SIIL  and  World  Leisure
Investments  Limited,  a Bermuda  corporation  ("WLI"),  owns the remaining  shares.  WLI is owned by WLG, which is
owned by a trust for the benefit of the Kerzner  family.  Rosegrove is owned  indirectly  and equally by Kersaf and
Caledonia.  Caledonia is a diversified  trading and investment company listed on The London Stock Exchange.  Kersaf
is an investor in and provides  management  services for businesses in the leisure  industry in southern Africa and
internationally,  focusing  on gaming,  casino  resorts  and  hotels.  Kersaf is listed on The  Johannesburg  Stock
Exchange.   In  addition  to  its  holdings  in  SIIL,  Rosegrove  owns  directly  2,625,000  Ordinary  Shares,  or
approximately 10% of the outstanding  Ordinary Shares of the Company.  Certain  subsidiaries of Kersaf own directly
1,610,000  Ordinary  Shares,  or  approximately  6% of the  outstanding  Ordinary  Shares of the  Company and Kerry
International Investments Limited, a subsidiary of WLG, owns directly 150,000 Ordinary Shares.

         The  following  table sets forth  certain  information  as of June 15, 2001  regarding  the  ownership  of
Ordinary  Shares by:  (i) any  person  who is known to the  Company to be the owner of more than 5% of any class of
the Company's voting securities and (ii) the directors and officers of the Company as a group:

Class of Shares               Owner                                  Amount               Percent of Class
- -------------------------     ---------------------------------      ----------------     -----------------------
Ordinary Shares               SIIL                                        13,487,380                       50.2%
Ordinary Shares               Baron Capital Group, Inc.                    5,134,000                       19.1%
Ordinary Shares               Rosegrove                                    2,625,000                        9.8%
Ordinary Shares               Kersaf                                       1,610,000                        6.0%
Ordinary Shares               Directors   and  officers  as  a
                              group  (excluding  shares deemed
                              owned by WLG and S. Kerzner)                         -                less than 1%

         As of June 15,  2001,  the Company had  approximately  757 holders of record of  approximately  26,904,238
Ordinary  Shares,  excluding  7,087,600  million shares held as treasury stock. As of June 15, 2001,  there were an
estimated 744 US holders of record holding approximately 48% of the Ordinary Shares.

         All of the holders of the  Company's  Ordinary  Shares,  including the major  shareholders,  have the same
voting rights.

(B)  Related Party Transactions

         Set  forth  below is a  summary  of  agreements  that have been  entered  into or  transactions  that have
occurred  since  the  beginning  of the  last  fiscal  year  involving  the  Company  and any of its  subsidiaries,
affiliates or key management.

Harborside Promissory Notes

         The Company,  in conjunction  with Vistana,  has entered into a series of promissory notes with Harborside
at Atlantis to fund the construction  cost of the timeshare  development.  As of December 31, 2000, the Company had
advanced  $18.4  million to  Haborside  at  Atlantis.  The loans made by the Company  (the "Sun  Loans")  were made
simultaneously  with loans from  Vistana (the  "Vistana  Loans").  The Sun Loans and the Vistana  Loans mirror each
other in amounts,  terms and  conditions.  Interest  accrues at Libor plus 250 basis points.  The Sun Notes and the
Vistana  Notes 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.

Tender Offer

         In June 2000,  the Company  offered to purchase up to  5,000,000  Ordinary  Shares at a $24 per share cash
price,  pursuant to an Offer to Purchase.  In August 2000, the Company  announced the completion of the self-tender
offer in which  5,000,000  Ordinary  Shares  were  purchased  by the  Company  at $24 per  share.  Ordinary  Shares
tendered and purchased by the Company pursuant to this  transaction  included a portion of the Ordinary Shares held
by Baron Capital  Group,  Inc., a significant  shareholder  of the Company.  This  transaction is described in more
detail in "Item 4. (A) History and Development of the Company".

Management Services and Fees

         The Company provides  management  services to Sun Indian Ocean, a Mauritius  company in which we currently
own  a  20.4%  equity  interest.   Pursuant  to  the  management  agreement  with  Sun  Indian  Ocean,  we  provide
comprehensive  management  services  under  individual  management  agreements  within each of Le Saint  Geran,  Le
Touessrok,  La Pirogue,  Sugar Beach and Le Coco Beach,  resort  hotels which Sun Indian  Ocean owns.  The terms of
each of these management agreements expire in December 2008.

         We also provide  management  services to  Harborside  at Atlantis,  a joint  venture in which we own a 50%
equity interest.


ITEM 8.  FINANCIAL INFORMATION

(A)  Consolidated Statements and Other Financial Information

         Please refer to Item 18 for our  consolidated  financial  statements and the  independent  auditors report
prepared by Arthur Andersen.

Legal Proceedings

Shareholder Litigation

         Beginning on or about  January 20, 2000,  eight class action  lawsuits  were filed in courts of the states
of New York, New Jersey and Florida by certain  shareholders  of the Company.  These actions,  purportedly  brought
as class  actions on behalf of all public  shareholders,  name SIIL,  the  Company  and  directors  of the  Company
(including  Chairman and Chief  Executive  Officer  Solomon  Kerzner) as defendants,  alleging  generally that they
breached their  fiduciary  duties to shareholders in connection with SIIL's proposal to acquire all of the Ordinary
Shares not owned by SIIL or its  shareholders  for $24 per share.  Answers were filed to each of the  complaints on
or about March 27,  2000.  Subsequently,  the eight class  action  lawsuits  were  consolidated  into one,  the Sun
International  Hotels Limited Class Action  Lawsuit,  and in May 2000, this  consolidated  complaint was filed with
the  Supreme  Court of the State of New York,  County  of New  York,  docket  No.  600250.  A  stipulated  Order of
Dismissal  was entered  into by all the parties of the  litigation  and filed with the Court on  September  8, 2000
concluding the litigation.

Enforceability Of Civil Liabilities

         The Company is a Bahamian  international  business  company  incorporated  under the  Companies Act of the
Commonwealth  of The Bahamas.  Certain of the directors and executive  officers of the Company  reside  outside the
United  States.  A  substantial  portion of the assets of such  persons and of the  Company is located  outside the
United States.  As a result,  in the opinion of Harry B.  Sands and Company,  Bahamian  counsel to the Company,  it
may be difficult or impossible to effect  service of process  within the United States upon such persons,  to bring
suit in the United  States or to enforce,  in the U.S.  courts,  any judgment  obtained  there against such persons
predicated upon any civil liability  provisions of the 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  predicated 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 (i) fraud,  (ii) public
policy and (iii) natural justice.

         Gaming debts may not be legally  enforced in certain  foreign  jurisdictions  or in certain  jurisdictions
within the United  States.  As a result,  the Company  may be unable to collect  gaming  debts from  patrons of our
casinos who reside in such jurisdictions.

Dividend Policy

         Pursuant to the Company's  Articles of  Association,  the Board of Directors may from time to time declare
dividends.  The  Company  historically  has not paid  dividends  and there are  currently  no plans to declare  any
dividends.

(B)  Significant Changes

         Except  as  otherwise  disclosed  in this  Annual  Report,  there  has been no  significant  change in the
financial position of the Company since December 31, 2000.


ITEM 9.  THE OFFER AND LISTING

(A)  Offer  and Listing Details

         The  Ordinary  Shares do not trade on any  foreign  exchange.  The  Ordinary  Shares  have been listed and
traded on the NYSE since March 1, 1996.  On June 26, 2001,  the closing  price of our  Ordinary  Shares on the NYSE
was $26.21.

         The  following  tables set forth the range of high and low closing sale prices of the  Ordinary  Shares as
reported on the NYSE during the periods shown.

For the year:
                                    High             Low
                                  ----------      ----------
2000                                 $23.75          $15.88
1999                                  47.49           17.31
1998                                  50.38           31.00
1997                                  41.50           30.00
1996                                  54.13           25.50

For the quarter:
                                    High             Low
                                  ----------      ----------
2001: 1st quarter                    $23.11          $19.23
      2nd quarter*                    28.50           22.15
2000: 1st quarter                     22.50           15.88
      2nd quarter                     21.00           17.00
      3rd quarter                     22.44           17.63
      4th quarter                     23.75           18.38
1999: 1st quarter                     43.88           32.88
      2nd quarter                     47.19           33.00
      3rd quarter                     44.63           20.19
      4th quarter                     24.13           17.31

*For the period April 1, 2001 through and including June 26, 2001.


For the month:
                                    High             Low
                                  ----------      ----------
2001 June**                          $28.26          $26.21
2001 May                              28.50           24.75
2001 April                            25.27           22.15
2001 March                            23.11           19.23
2001 February                         22.62           19.90
2001 January                          23.00           22.13

**For the period June 1, 2001 through and including June 26, 2001.

(B)  Plan of Distribution

         Not applicable.

(C)  Markets

         Since March 1, 1996, our Ordinary Shares have been listed and traded on the NYSE.  Our ordinary shares
are not listed on and do not trade on any other exchange.

(D)  Selling Shareholders

         Not applicable.

(E)  Dilution

         Not applicable.

(F)  Expenses of the Issue

         Not applicable.


ITEM 10.  ADDITIONAL INFORMATION

(A)  Share Capital

         Not applicable.

(B)  Articles of Association

         The Articles of Association of Sun International was filed with the SEC as an exhibit to Amendment No. 1
to Form F-1 Registration Statement, filed on March 24, 1995 in file number 33-89250.

(C)  Material Contracts

         The following is a summary of each material  contract in which the Company or any of its  subsidiaries has
been a party to for the  past two  years.

Third Amended and Restated Revolving Credit Facility

         The   Company's   Revolving   Credit   Facility  was  amended  and  restated  on  November  1,  1999  (the
"Restatement").  In May 1999,  the Company  entered into an agreement  with Starwood to purchase the Desert Inn for
$275 million.  Prior to entering into the Termination  Agreement with Starwood,  it was anticipated that the Desert
Inn acquisition  would be financed with borrowings  under the Revolving Credit  Facility.  The Restatement  allowed
for an increase in the maximum  amount of  borrowings  outstanding  under the Revolving  Credit  Facility from $375
million to $625 million,  provided that the additional  borrowings  were used for (i) the acquisition of the Desert
Inn or (ii) any transaction  that was approved by all of the parties on the Revolving  Credit  Facility,  including
the Bank of Nova Scotia and the Lenders.  In addition,  the  Reinstatement  added Sun  International  Nevada,  Inc.
("Sun Nevada") as a borrower and guarantor on the Revolving Credit Facility.

First Amendment to the Third Amended and Restated Revolving Credit Facility

         On June 13, 2000, the Company  amended the Revolving  Credit Facility (the "First  Amendment").  The First
Amendment  was  entered  into in order to allow the Company to complete a  self-tender  offer in 2000.  An offer to
purchase  5,000,000  Ordinary  Shares at a $24 per share cash price was made by the Company on June 26, 2000.  Such
tender  offer was  completed  in August  2000  whereby  the  Company  purchased  5,000,000  Ordinary  Shares for an
aggregate price of $120 million.  The self-tender  offer was financed with  borrowings  under the Revolving  Credit
Facility.  Pursuant to the First  Amendment,  the maximum amount of borrowings  outstanding on the Revolving Credit
Facility was reduced from $625 million to $500 million.

Second Amendment to the Third Amended and Restated Revolving Credit Facility

         In January 2001, the Company amended the Revolving Credit Facility (the "Second Amendment").  The Revolving
Credit Facility  previously allowed for maximum borrowings of up to $500 million,  such amount to be reduced by $125
million on August 12, 2001. To allow for the Resorts  Atlantic  City Sale and the Atlantic  City Option,  the Second
Amendment  called for a reduction in the maximum amount of borrowings  outstanding  prior to August 12, 2001, in the
event the Resorts  Atlantic  City Sale was  consummated  before that date.  The details of the Second  Amendment are
further  described in "Item 5.  Operating and Financial  Review and Prospects (B) Liquidity,  Capital  Resources and
Capital Spending" in this Annual Report.  Pursuant to the Second Amendment, as a result of the Resorts Atlantic City
Sale, the maximum amount of borrowings  available on the Revolving Credit Facility was reduced by $127 million,  the
net cash proceeds received in the Resorts Atlantic City Sale.

Mohegan Sun Agreements

         From  August  1996 to  December  31,  1999,  TCA was a party to a  Management  Agreement  with the Mohegan
Tribe. Under the Management Agreement,  TCA provided certain management,  marketing and administrative  services to
the Mohegan Sun Casino.  TCA received a management  fee of between 30% and 40% of net profits,  as defined,  of the
Mohegan Sun Casino.

         In February  1998,  TCA and the Mohegan  Tribe entered into a  Relinquishment  Agreement  that  terminated
TCA's  management of the Mohegan Sun Casino  effective  January 1, 2000. Under the  Relinquishment  Agreement,  TCA
receives 5% of the gross  revenues of the Mohegan Sun Resort  Complex,  which  includes  the casino and the planned
expansion, that is anticipated to be completed in the fourth quarter of 2001, for a 15-year period.

         In February  1998,  TCA and the Mohegan Tribe also entered into a Development  Services  Agreement.  Under
this agreement, TCA acts as the Mohegan Tribe's developer for the expansion of the Mohegan Sun Casino.

Dubai Agreement

         In 1998,  the Company  entered into an agreement to manage the Royal  Mirage  Hotel,  a 258-room  hotel in
Dubai,  Saudi  Arabia,  which  opened in August  1999.  The  Company  receives a  management  fee  calculated  as a
percentage of revenues (1.5%) and gross  operating  profits,  as defined (10%).  The management fee schedule may be
renegotiated after 10 years.  The management agreement expires in 2019.

Harborside at Atlantis Joint Venture

         In 1999,  the Company  formed a joint  venture  with  Vistana,  a  subsidiary  of  Starwood,  to develop a
timeshare  project on Paradise Island adjacent to Atlantis called  Harborside at Atlantis.  The Company and Vistana
each hold a 50% interest in Harborside at Atlantis.  As part of the joint  venture,  the Company  contributed  land
and Vistana contributed cash based on the number of timeshare units to be developed.

Purchase Agreement between the Company and Colony

         The Purchase  Agreement  among SINA, as parent,  GGRI,  Inc., as Seller and Colony as Buyer (the "Purchase
Agreement")  was dated  October 30,  2000.  The contract was entered into between the parties to effect the Resorts
Atlantic City Sale described in "Item 4. History and  Development of Business - Recent  Developments".  The Resorts
Atlantic  City Sale closed on April 25, 2001,  and  pursuant to the  Purchase  Agreement,  was  conditioned  on the
approval by the New Jersey Casino  Control  Commission  and Colony  receiving  financing.  Pursuant to the Purchase
Agreement,  upon closing of the Resorts  Atlantic City Sale,  Colony  received 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,  which option can be extended for an additional  two years under certain  circumstances.  Also pursuant to
the Purchase  Agreement,  effective April 25, 2001,  Colony leases from SINA certain of the undeveloped real estate
which is subject to the Atlantic City Option, for $100,000 per month.

Colony Note

         To facilitate  Colony's  financing of the Resorts Atlantic City Sale, the Company lent Colony's  affiliate
$17.5 million  toward the purchase  price of Resorts  Atlantic City in exchange for an unsecured  note at an annual
rate of 12.5% per annum.  Interest  is payable  semi-annually,  one-half  in cash and  one-half  in 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 effective date of the Note is April 25, 2001.

NY Project Development Services Agreement

         In March 2001, TCNY entered into a Development  Services Agreement with the  Stockbridge-Munsee  Tribe for
the  development  of a casino  project in the Catskill  region of New York.  Pursuant to the  Development  Services
Agreement, TCNY will provide preliminary funding and certain financing and development services.

DI Purchase Agreement and Termination Agreement

         On May 18, 1999, the Company and Starwood entered into an agreement whereby the Company was to purchase the
Desert Inn for $275 million (the "DI Purchase  Agreement").  On March 2, 2000, the Company and Starwood entered into
the Termination Agreement whereby they agreed to terminate the DI Purchase Agreement. The effect of this transaction
on the  Company's  results of  operations is described in "Note 1 of Notes to  Consolidated  Financial  Statements -
Termination of Desert Inn Acquisition Agreement" in this Annual Report.

(D)  Exchange Controls

         The Central  Bank of The Bahamas  (the  "Central  Bank") must  approve  any  payments  made to  companies,
including  the Company,  which are  non-resident  companies  for exchange  control  purposes.  The Central Bank has
granted approved  investment  status in respect of the Company's  holding of the capital stock of Sun Bahamas.  The
granting of such status will mean that all payments of a current  nature,  including the  repatriation of dividends
or other  distributions to the Company out of the revenues of the Company's Bahamian  subsidiaries and any proceeds
received  on the sale of such  subsidiaries  will be  routinely  approved  by the  Central  Bank  following  proper
application.  Any other payments to the Company by its Bahamian  subsidiaries will require standard approval by the
Central Bank.

         There  currently are no  limitations  on the right of  nonresident  or foreign  owners to hold or vote the
Ordinary Shares imposed by foreign law or by the Company's Articles of Association.

(E)  Taxation

Certain United States Federal Income Tax Considerations

         The following is a general  discussion of certain  United States federal  income tax  consequences  to the
acquisition,  ownership and  disposition  of Ordinary  Shares.  For purposes of this  discussion,  a "United States
Holder" means an individual  citizen or resident of the United States,  a corporation  organized  under the laws of
the United States or of any state of political  subdivision  thereof,  or an estate or trust the income of which is
includible in gross income for United States federal income tax purposes regardless of its source.

         Rules  regarding  partnerships  are complex.  Partners in  partnerships  should consult their tax advisers
regarding the implications of owning Ordinary Shares.

         This  discussion  is not  intended to be  exhaustive  and is based on statutes,  regulations,  rulings and
judicial  decisions  currently in effect.  This  discussion  does not consider  any specific  circumstances  of any
particular  United States Holder and applies only to United States  Holders that hold Ordinary  Shares as a capital
asset.  Investors are urged to consult their tax advisers  regarding the United States federal tax  consequences of
acquiring,  holding and  disposing of Ordinary  Shares,  as well as any tax  consequences  that may arise under the
laws of any foreign, state, local or other taxing jurisdiction.

Ownership of Ordinary Shares

         Dividends on Ordinary  Shares paid to United States Holders will be treated as dividend  income for United
States federal  income tax purposes to the extent of the Company's  undistributed  current or accumulated  earnings
and profits as computed for federal  income tax purposes.  Such  dividends  will  generally not be eligible for the
dividends  received  deduction  available to certain United States  corporations  under Section 243 of the Internal
Revenue Code of 1986, as amended.

         The  Company is not a "passive  foreign  investment  company"  (a  "PFIC"),  a "foreign  personal  holding
company"  (a  "FPHC")  or a  "controlled  foreign  corporation"  (a "CFC") for  United  States  federal  income tax
purposes.  The  Company  is not a CFC or a FPHC  mainly  due to  SIIL's  approximate  42%  voting  interest  in the
Company.  If more than 50% of the voting power or value of the Company's stock were owned (directly,  indirectly or
by attribution)  by United States persons who each owned  (directly,  indirectly or by attribution)  10% or more of
the voting power of the stock of the Company  ("10%  Shareholders"),  the Company  would become a CFC and each such
10%  Shareholder  would be required to include in its taxable income as a constructive  dividend an amount equal to
its share of certain  undistributed  income of the  Company.  If more than 50% of the voting  power or value of the
Company were owned  (directly,  indirectly  or by  attribution)  by five or fewer  individuals  who are citizens or
residents  of the  United  States  and if at least 60% of the  Company's  income  consisted  of  certain  interest,
dividend or other  enumerated  types of income,  the Company  would be an FPHC.  If the Company were an FPHC,  each
United States Holder  (regardless  of the amount of stock owned by such United States  Holder) would be required to
include in its  taxable  income as a  constructive  dividend  its share of the  Company's  undistributed  income of
specified  types.  If SIIL's  ownership  interest were to decrease,  or if United States  persons were to acquire a
greater  ownership  interest  in SIIL,  then it is  possible  that  the  Company  could  become a CFC or FPHC if it
otherwise satisfied the tests set forth above.

         The Company is not a PFIC  because it is  anticipated  that less than 75% of its annual  gross income will
consist of certain  "passive"  income and less than 50% of the average value of its assets in any year will consist
of assets that produce,  or are held for the  production  of, such passive  income.  If such income and asset tests
were not met and the  Company  were to become a PFIC,  all United  States  Holders  would be required to include in
their taxable income certain  undistributed  amounts of the Company's income, or in certain  circumstances,  to pay
an interest  charge  together with tax calculated at maximum rates on certain  "excess  distributions"  (defined to
include any gain on the sale of stock).

         Any gain or loss on sale or exchange of Ordinary  Shares by a United  States Holder will be a capital gain
or loss. If the United States Holder has held such Ordinary  Shares for more than one year,  such gain or loss will
be a long-term capital gain or loss.

         Annual  filings of Form 5471 may be required from certain  United States persons owning 10% or more of the
stock of the Company.

Certain Bahamian Tax Considerations

         The  following  is a brief and general  summary of certain  Bahamian tax matters as they may relate to the
Company and the holders of the Ordinary  Shares of the Company.  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 will
not be subject to income tax in The Bahamas on an ongoing  basis and dividends  paid on Ordinary  Shares to holders
thereof will not be subject to a Bahamian  withholding  tax (the Company,  however,  is subject to gaming taxes and
other governmental fees and charges).

(F)  Dividends and Paying Agents

         Not applicable.

(G)  Statement by Experts

         Not applicable.

(H)  Documents on Display

         Sun  International  is subject to the  informational  requirements of the Securities  Exchange Act of 1934
and files reports and other  information  with the  Securities and Exchange  Commission.  You may read and copy all
or any portion of the Annual  Report and its exhibits at the public  reference  facilities  maintained  by the SEC,
450 Fifth Street,  N.W., Judiciary Plaza, Room 1024,  Washington,  D.C. 20549, and at its regional offices at Seven
World Trade Center,  Suite 1300, New York, New York 10048 and Citicorp Center, 500 West Madison Street,  Suite 1400
Chicago,  Illinois 60661-2511.  You may request copies of all or any portion of these documents,  upon payment of a
duplication  fee, by writing to the public  reference  section of the SEC at 450 Fifth  Street,  N.W.,  Washington,
D.C.  20549.  You  may  obtain  more   information   about  the  public  reference  room  by  calling  the  SEC  at
1-800-SEC-0330.  Our  reports  and other  information  filed with the SEC are also  available  to the  public  from
commercial document retrieval services and the website maintained by the SEC at www.sec.gov.

(I)  Subsidiary Information

       Please refer to "Item 4. Information on the Company (C) Organizational Structure" for a list of our
significant subsidiaries.  A listing of the Company's significant subsidiaries is filed with this Annual Report
as Exhibit 8.  See "Item 19. Exhibits".


ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The information  below provides  information  about the Company's market sensitive  financial  instruments
and constitutes "forward-looking statements".  All items described are non-trading.

         The  Company's  major  market risk  exposure  is  changing  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.  The Company's  policy is to manage interest rates through the use of a combination of
fixed and floating rate debt.  These  interest rate swaps were entered into with a group of financial  institutions
with  investment  grade credit ratings,  thereby  minimizing the risk of credit loss.  Expected  maturity dates for
variable rate debt and interest rate swaps are based upon  contractual  maturity  dates.  The Company uses variable
to fixed  interest rate swap  agreements  to manage the impact of interest  rate changes on the Company's  variable
rate debt.  Average pay rates under interest rate swaps are based upon  contractual  fixed rates.  Average variable
receive  rates under  interest  rate swaps are based on implied  forward  rates in the yield curve at the reporting
date.

         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.  The fair value of variable rate debt  approximates  the carrying value since interest rates
are variable and,  thus,  approximate  current  market  rates.  The fair value of interest rate swaps is determined
from  representations  of financial  institutions and represents the discounted  future cash flows through maturity
or expiration  using current  rates,  and is  effectively  the amount the Company would pay or receive to terminate
the agreements.

December 31, 2000                                                                                          Fair Value
(In Thousands of Dollars)                  Expected Maturity Date                                         December
                               ------------------------------------------------
Asset (Liability)                 2001        2002      2003    2004    2005     Thereafter     Total     31, 2000
- ------------------------------ ----------- ----------- ------- ------- -------- ------------- ----------- ------------

Variable rate debt                 $    -    $369,000     $ -     $ -      $ -           $ -    $369,000     $369,000
Average interest rates                          8.10%

Interest rate swaps                50,000      75,000       -       -        -          $  -     125,000        (454)
Average pay rate                    6.78%       6.96%
Average receive rate                5.16%       5.31%


ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

         Not applicable.







                                                      PART II

- ------------------------------------------------------------------------------

ITEM 13.   DEFAULTS, DIVIDENDS ARREARAGES AND DELINQUENCIES

         There is nothing to disclose with respect to this item.


ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

         There is nothing to disclose with respect to this item.


ITEM 15.  RESERVED

ITEM 16.  RESERVED








                                                     PART III


- ---------------------------------------------------------------------------------

ITEM 17.  FINANCIAL STATEMENTS

Not applicable.


ITEM 18.  FINANCIAL STATEMENTS

(A)  List of Financial Statements and Financial Statement Schedules

Report of Independent Public Accountants.........................................................F-2
Consolidated Balance Sheets......................................................................F-3
Consolidated Statements of Income................................................................F-4
Consolidated Statements of Changes in Shareholder Equity.........................................F-5
Consolidated Statements of Cash Flows............................................................F-6
Notes to Consolidated Financial Statements.......................................................F-7






ITEM 19.  EXHIBITS



                                                                                 Sequentially
    Exhibit No.       Description                                                Numbered Pages
- --------------------- ---------------------------------------------------------- --------------------------------------
         1            Restated Articles of Association of SIHL dated as of       See Exhibit 1.
                      June 26, 2001.

        2            Unregistered long-term debt instruments representing
                      less than 10% of total assets: Sun International
                      undertakes to provide the Securities and Exchange
                      Commission with copies upon request.

        4.1           Purchase Agreement among SINA as parent, GGRI, as Seller   Incorporated by reference to Exhibit
                      and Colony as Buyer dated as of October 30, 2000.          (10) to registrant's Form 10-Q
                                                                                 Quarterly Report for the quarter
                                                                                 ended September 30, 2000 in File No.
                                                                                 1-4748.

        4.2           Promissory Note between Colony and SINA dated as of        Incorporated by reference to
                      April 25, 2001.                                            Exhibit 2 of Sun International's
                                                                                 Form 6-K dated May 3, 2001 in File
                                                                                 No. 1-04226

        4.3           Termination Agreement among Sheraton Desert Inn            Incorporate by reference to Exhibit
                      Corporation, Starwood, Sheraton Gaming Corporation, Sun    2 to Sun's International's Form 6-K
                      International and Sun International Nevada, Inc. ("Sun     Current Report dated March17, 2000
                      Nevada") dated as of February 29, 2000 terminating the     in File No. 0-22794.
                      Asset and Land Purchase Agreement among the parties,
                      dated as of May 17, 1999.

        4.4           Third Amended and Restated Revolving Credit Agreement,     Incorporated by reference to Exhibit
                      dated as of November 1, 1999, among Sun International,     99(b)(1) to Sun International's
                      Sun International Bahamas Limited ("SIB"), RIH and Sun     Tender Offer Statement dated June
                      Nevada as the Borrowers and Guarantors, and The Bank of    26, 2000, in File No. 005-48645.
                      Nova Scotia as the Administrative Agent and Various
                      Financial Institutions as the Lenders.

        4.5           First Amendment to the Third Amended and Restated Credit   Incorporated by reference to Exhibit
                      Agreement, dated as of June 13, 2000, among Sun            99(b)(2) to Sun International's
                      International, SIB, RIH and Sun Nevada as the Borrowers    Tender Offer Statement dated June
                      and Guarantors, and the Bank of Nova Scotia as the         26, 2000, in File No. 005-048645.
                      Administrative Agent and Various Financial Institutions
                      as the Lenders.

        4.6           Second Amendment to the Third Amended and Restated         See Exhibit 4.6.
                      Credit Agreement, dated as of June 13, 2000, among Sun
                      International, SIB, RIH and Sun Nevada as the Borrowers
                      and Guarantors, and the Bank of Nova Scotia as the
                      Administrative Agent and Various Financial Institutions
                      as the Lenders.

        4.7           TCNY Development Services Agreement dated as of March      See Exhibit 4.7.
                      20, 2001 among the Stockbridge-Munsee Tribe, the
                      Stockbridge-Munsee Tribal Gaming Authority, TCNY, SINA
                      and Waterford Gaming Group, LLC.

        4.8           Management Agreement between to Government of Dubai and    Incorporated by reference to Exhibit
                      Sun International Management Limited and Sun               3.2 to Sun International's Form 20-F
                      International Hotels Limited dated as of June 5, 1998.     Annual Report for the year ended
                                                                                 December 31, 1998, in File No.
                                                                                 0-22794.

        4.9           Development Services Agreement dated February 7, 1998      Incorporated by reference to Exhibit
                      between the Mohegan Tribal Gaming Authority and TCA.       2.1 to Sun International's Form 20-F
                                                                                 Annual Report for the year ended
                                                                                 December 31, 1997, in File No.
                                                                                 0-22794.

        4.10          Relinquishment Agreement dated February 7, 1998, between   Incorporated by reference to Exhibit
                      the Mohegan Tribal Gaming Authority and TCA.               2.2 to Sun International's Form 20-F
                                                                                 Annual Report for the year ended
                                                                                 December 31, 1997, in File No.
                                                                                 0-22794.

         6            Computation of earnings per share.                         Incorporated by reference to Note 2
                                                                                 of the Notes to the Consolidated
                                                                                 Financial Statements.

         8            Listing of subsidiaries                                    See Exhibit 8.

         10           Sun International Hotels Limited Audit Committee Charter   Incorporated by reference to Exhibit
                                                                                 3.4 of Sun International's Form 20-F
                                                                                 Annual Report for the year ended
                                                                                 December 31, 1999, in File No.
                                                                                 0-22794.



(







                                                    SIGNATURES






The registrant  hereby  certifies that it meets all of the requirements for filing on Form 20-F and has duly caused
and authorized the undersigned to sign this Annual Report on its behalf.


                                                            SUN INTERNATIONAL HOTELS LIMITED


Date:  July 2, 2001                                         By:         /s/John R. Allison
                                                                        ------------------------------------------------
                                                            Name:       John R. Allison
                                                            Title:      Executive Vice President
                                                                        Chief Financial Officer

















                                         SUN INTERNATIONAL HOTELS LIMITED

                             Consolidated Financial Statements as of December 31, 2000




















                                     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, 2000 and 1999, 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, 2000 and 1999 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






                                         SUN INTERNATIONAL HOTELS LIMITED
                                            CONSOLIDATED BALANCE SHEETS
                                           (In thousands of US dollars)

                                                                           December 31,
                                                                ------------------------------------
                                                                        2000                 1999
                                                                  ---------------      ---------------
   ASSETS
   Current assets:
       Cash and cash equivalents                                   $      22,497        $      39,229
       Restricted cash equivalents                                         1,651                  981
       Trade receivables, net                                             40,612               44,425
       Due from affiliates                                                34,140               14,212
       Inventories                                                        10,417               13,742
       Prepaid expenses                                                    9,849                8,412
       Net assets held for sale                                          138,350                    -
                                                                  ---------------      ---------------
         Total current assets                                            257,516              121,001
   Property and equipment, net                                         1,155,509            1,378,138
   Due from affiliates - non-current                                       5,069                    -
   Deferred charges and other assets, net                                 13,120               49,884
   Investment in associated companies                                     29,577               28,593
   Goodwill, net                                                               -               93,855
                                                                  ---------------      ---------------
         Total assets                                              $   1,460,791        $   1,671,471
                                                                  ===============      ===============

   LIABILITIES AND SHAREHOLDERS' EQUITY
   Current liabilities:
       Current maturities of long-term debt                        $         230        $       1,100
       Accounts payable and accrued liabilities                          136,872              133,334
       Capital creditors                                                  12,954               16,950
                                                                  ---------------      ---------------
         Total current liabilities                                       150,056              151,384
   Long-term debt, net of current maturities                             668,908              578,033
   Deferred income taxes                                                       -               42,223
                                                                  ---------------      ---------------
         Total liabilities                                               818,964              771,640
                                                                  ---------------      ---------------
   Commitments and contingencies
   Shareholders' equity:
       Ordinary Shares, $.001 par value                                       34                   34
       Capital in excess of par                                          680,784              677,918
       Retained earnings                                                 129,321              248,425
       Accumulated other comprehensive income                             (5,543)              (5,569)
                                                                  ---------------      ---------------
                                                                         804,596              920,808
       Treasury stock                                                   (162,769)             (20,977)
                                                                  ---------------      ---------------
         Total shareholders' equity                                      641,827              899,831
                                                                  ---------------      ---------------
         Total liabilities and shareholders'equity                 $   1,460,791        $   1,671,471
                                                                  ===============      ===============

   The accompanying notes are an integral part of these balance sheets.






                                         SUN INTERNATIONAL HOTELS LIMITED
                                       CONSOLIDATED STATEMENTS OF OPERATIONS
                                (In thousands of US dollars, except per share data)

                                                         For the Year Ended December 31,
                                                 ------------------------------------------------
                                                     2000              1999              1998
                                                 ------------      ------------      ------------
Revenues:
    Gaming                                       $   367,935       $   351,545       $   319,342
    Rooms                                            194,008           164,831            94,942
    Food and beverage                                147,718           137,100            86,593
    Tour operations                                   33,192            28,714            14,757
    Real estate related                              108,650                 -                 -
    Management and other fees                         35,763            46,898            40,645
    Other revenues                                    49,208            45,910            35,391
    Insurance recovery                                     -            14,209                 -
                                                 ------------      ------------      ------------
      Gross revenues                                 936,474           789,207           591,670
    Less: promotional allowances                     (51,779)          (50,240)          (40,792)
                                                 ------------      ------------      ------------
      Net revenues                                   884,695           738,967           550,878
                                                 ------------      ------------      ------------

Cost and expenses:
    Gaming                                           224,765           209,177           190,543
    Rooms                                             33,915            30,448            15,352
    Food and beverage                                 98,288            91,539            59,145
    Other operating expenses                          96,605            92,705            72,102
    Real estate related                               32,272                 -                 -
    Selling, general and administrative              103,465            93,962            70,024
    Tour operations                                   29,626            27,816            14,653
    Corporate expenses                                25,340            16,260            18,811
    Depreciation and amortization                     60,223            57,230            32,081
    Purchase termination costs                        11,202                 -                 -
    Transaction costs                                  7,014                 -                 -
    Pre-opening expenses                               7,616             5,398            25,961
    Write-down of net assets held for sale           229,208                 -                 -
                                                 ------------      ------------      ------------
      Cost and expenses                              959,539           624,535           498,672
                                                 ------------      ------------      ------------

Income (loss) from operations                        (74,844)          114,432            52,206
                                                 ------------      ------------      ------------

Other income (expense):
    Interest income                                    4,194            12,725            15,651
    Interest expense, net of capitalization          (45,678)          (50,699)           (4,516)
    Equity in earnings of associated companies         4,225             2,628             2,730
    Other, net                                          (688)               60              (316)
                                                 ------------      ------------      ------------
      Other income (expense), net                    (37,947)          (35,286)           13,549
                                                 ------------      ------------      ------------

Income (loss) before provision for income taxes     (112,791)           79,146            65,755
Provision for income taxes                            (6,313)           (9,324)           (8,009)
                                                 ------------      ------------      ------------
      Net income (loss)                          $  (119,104)      $    69,822       $    57,746
                                                 ============      ============      ============

Earnings (loss) per share:
    Basic                                        $     (3.86)      $      2.09       $      1.74
                                                 ============      ============      ============
    Diluted                                      $     (3.86)      $      2.05       $      1.70
                                                 ============      ============      ============

The accompanying notes are an integral part of these statements.







                                         SUN INTERNATIONAL HOTELS LIMITED
                            CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                               For the Years Ended December 31, 2000, 1999 and 1998
                                                   (In thousands)

                                                                                     Retained Earnings
                                                                              ---------------------------------
                                                                                                Accumulated
                                                                                                   Other                                         Comprehensive
                                      Ordinary Shares         Capital in       Retained        Comprehensive     Treasury           Total        Income (Loss)
                                    --------------------
                                    Shares      Amount        Excess of        Earnings           Income          Stock            Equity        for the Period
                                                                 Par
                                    --------   ---------     -------------    ------------   ------------------ -----------      ------------   -----------------


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)
                                    ========      ======      ===========      ===========      ===========     ============      ===========      ===========

The accompanying notes are an integral part of these statements.







                                         SUN INTERNATIONAL HOTELS LIMITED
                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                           (In thousands of US dollars)


                                                                       For the Year Ended December 31,
                                                                -----------------------------------------------
                                                                    2000             1999              1998
                                                                ------------      -----------      ------------
Cash flows from operating activities:
  Net income (loss)                                              $ (119,104)      $   69,822        $   57,746
  Adjustments to reconcile net income (loss) to net
    cash provided by operating activities:
      Depreciation and amortization                                  64,340           60,147            34,960
      Write-down of net assets held for sale                        229,208                -                 -
      Write-off of Desert Inn purchase termination costs             11,202                -                 -
      Reclass of property, plant and equipment to
        land held for sale                                           23,912                -                 -
      (Gain) loss on disposition of other assets                        688              (60)              316
      Equity in earnings of associated companies,
        net of dividends received                                    (1,377)              23              (670)
      Utilization of tax benefits acquired in merger                      -                -             1,887
      Provision for doubtful receivables                              6,492            6,466             2,189
      Provision for discount on CRDA obligations, net                   799              587               572
      Net change in deferred tax liability                              205              (30)           (3,747)
      Net change in working capital accounts:
          Receivables                                                (9,179)         (20,440)          (19,744)
          Due from affiliates                                        (4,658)          (7,150)              839
          Inventories and prepaid expenses                           (2,052)          (8,129)           (1,896)
          Accounts payable and accrued liabilities                   26,490            4,198            22,603
      Net change in deferred charges and other assets                (1,668)           4,548            (4,953)
                                                                ------------      -----------      ------------
          Net cash provided by operating activities                 225,298          109,982            90,102
                                                                ------------      -----------      ------------

Cash flows from investing activities:
    Payments for capital expenditures, net of insurance
      proceeds received                                            (155,892)        (205,046)         (443,996)
    Net proceeds from the sale of non-operating land
      and other assets                                                  501            5,186           110,313
    Proceeds from redemption of subordinated notes                        -           94,126                 -
    Deposit refunded (paid) for proposed Desert Inn acquisition       7,750          (16,117)                -
    Payments for investment in and advances to joint venture        (18,663)            (600)                -
    Sale of subordinated notes                                            -            2,798             2,798
    Reclassification of cash to net assets held for sale            (21,453)               -                 -
    CRDA deposits                                                    (2,334)          (2,746)           (2,955)
    Other                                                              (361)               -              (745)
                                                                ------------      -----------      ------------
          Net cash used in investing activities                    (190,452)        (122,399)         (334,585)
                                                                ------------      -----------      ------------

Cash flows from financing activities:
    Proceeds from exercise of share options                           2,866            2,696             4,735
    Borrowings                                                      202,000          129,000           264,000
    Repurchase of Ordinary Shares                                  (141,792)         (20,977)                -
    Debt issuance and modification costs                               (919)          (2,361)             (694)
    Repayment of borrowings                                        (113,063)        (118,854)         (113,596)
                                                                ------------      -----------      ------------
          Net cash provided by (used in) financing activities       (50,908)         (10,496)          154,445
                                                                ------------      -----------      ------------

    Decrease in cash and cash equivalents                           (16,062)         (22,913)          (90,038)
Cash and cash equivalents at beginning of period                     40,210           63,123           153,161
                                                                ------------      -----------      ------------
Cash and cash equivalents at end of period                       $   24,148       $   40,210        $   63,123
                                                                ============      ===========      ============
The accompanying notes are an integral part of these statements.







NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 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.

In 1999,  through one of it's  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 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 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.

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  departmental costs of providing
such promotional allowances are included in gaming costs and expenses as follows:

                                                           For the Year Ended December 31,
                                                   ------------------------------------------------
         (In thousands of US dollars)                  2000              1999              1998
                                                   ------------      ------------      ------------

         Rooms                                     $    11,441       $     7,894       $     6,671
         Food and beverage                              23,587            21,692            17,921
         Other                                           3,727             7,762             5,819
                                                   ------------      ------------      ------------
                                                   $    38,755       $    37,348       $    30,411
                                                   ============      ============      ============

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, 2000, 1999 and 1998.

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 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, 2000 and 1999.

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.

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 $2.6 million,  $2.6 million and $2.7 million for the
years ended December 31, 2000,  1999 and 1998,  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, 2000,  1999
and 1998 is net of $264,000 of amortization expense related to such 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 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 December 31,
                                                       ---------------------------------------------
         (In thousands)                                  2000              1999             1998
                                                       ---------         ---------        ----------
         Weighted average shares
           used in basic computations                    30,849            33,465            33,270
         Stock options, warrants and
           restricted shares awarded                          -               540               764
                                                       ---------         ---------        ----------
         Weighted average shares
           used in diluted computations                  30,849            34,005            34,034
                                                       =========         =========        ==========

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, 2000 and 1999  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.

Note 4 - Trade Receivables

Components of trade receivables were as follows:
                                                                                December 31,
                                                                        ------------------------------
         (In thousands of US Dollars)                                       2000              1999
                                                                        ------------      ------------

         Gaming                                                          $   25,283        $   29,673
         Less: allowance for doubtful accounts                              (11,176)           (9,943)
                                                                        ------------      ------------
                                                                             14,107            19,730
                                                                        ------------      ------------
         Non-gaming:
           Hotel and related                                                 19,747            19,792
           Other                                                              8,026             8,595
                                                                        ------------      ------------
                                                                             27,773            28,387
         Less: allowance for doubtful accounts                               (1,268)           (3,692)
                                                                        ------------      ------------
                                                                             26,505            24,695
                                                                        ------------      ------------
                                                                         $   40,612        $   44,425
                                                                        ============      ============

Note 5 - Property and Equipment

Components of property and equipment were as follows:

                                                                               December 31,
                                                                    ------------------------------------
          (In thousands of US dollars)                                   2000                 1999
                                                                    ---------------      ---------------

         Land and land rights                                       $      210,247       $      351,495
         Land improvements and utilities                                   197,201              185,268
         Hotels and other buildings                                        575,019              704,765
         Furniture, machinery and equipment                                162,913              185,824
         Construction in progress                                          135,409               73,645
                                                                    ---------------      ---------------
                                                                         1,280,789            1,500,997
         Less: accumulated depreciation                                   (125,280)            (122,859)
                                                                    ---------------      ---------------
                                                                    $    1,155,509       $    1,378,138
                                                                    ===============      ===============

Interest costs of $11,072,000, $4,865,000 and  $35,304,000 were capitalized in 2000, 1999 and 1998, respectively.

Note 6 - Deferred Charges and Other Assets

                                                                            December 31,
                                                                    -----------------------------
          (In thousands of US dollars)                                 2000              1999
                                                                    -----------      ------------

         Debt issuance costs                                        $   10,277        $   13,400
         CRDA bonds and deposits                                             -            16,983
         Desert Inn acquisition costs                                        -            16,117
         Mohegan Sun Casino                                              1,669             2,049
         Other                                                           1,174             1,335
                                                                    -----------      ------------
                                                                    $   13,120        $   49,884
                                                                    ===========      ============

Note 7 - Accounts Payable and Accrued Liabilities

Components of accounts payable and accrued liabilities were as follows:

                                                                             December 31,
                                                                    -------------------------------
         (In thousands of US dollars)                                   2000               1999
                                                                    -------------      ------------

         Customer deposits and unearned revenues                    $     37,007       $    28,555
         Trade payables                                                   34,540            36,798
         Accrued payroll and related taxes and benefits                   13,688            15,541
         Accrued interest                                                  5,228             7,853
         Other accrued liabilities                                        46,409            44,587
                                                                    -------------      ------------
                                                                    $    136,872       $   133,334
                                                                    =============      ============

Note 8 - Long Term Debt

Long-term debt consisted of the following:
                                                                            December 31,
                                                                   --------------------------------
         (In thousands of US dollars)                                   2000              1999
                                                                   --------------    --------------

         9% Senior Notes due 2007                                   $    200,000      $    200,000
         Unamortized discount                                               (663)             (738)
                                                                   --------------    --------------
                                                                         199,337           199,262

         8.625% Senior Notes due 2007                                    100,000           100,000

         Revolving Credit Facility                                       369,000           278,000

         Other                                                               801             1,871
                                                                   --------------    --------------
                                                                         669,138           579,133
         Less: amounts due within one year                                  (230)           (1,100)
                                                                   --------------    --------------
                                                                    $    668,908      $    578,033
                                                                   ==============    ==============

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.

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, 2000 and 1999.  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, 2000 and 1999, 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,
                                                                    ------------------------------
         (In thousands, except per share data)                         2000              1999
                                                                    ------------      ------------

         Ordinary Shares
             Par value per share                                         $0.001            $0.001
             Authorized                                                 250,000           250,000
             Issued and outstanding (1)                                  33,874            33,682
         Preference Shares
             Par value per share                                         $0.001            $0.001
             Authorized                                                 100,000           100,000
             Issued and outstanding                                           -                 -

         (1)      Includes 7,087,000 and 1,000,000 Ordinary Shares held by the Company at December 31, 2000 and
                  1999, respectively.

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 2000, 1999 and 1998 is as follows:


                                                                       December 31,
                                        ---------------------------------------------------------------------------
                                                 2000                      1999                      1998
                                        -----------------------   -----------------------   -----------------------
                                                     Weighted                  Weighted                  Weighted
                                                      Average                   Average                   Average
                                                     Exercise                  Exercise                  Exercise
                                                       Price                     Price                     Price
     (In thousands, except per share     Shares      Per Share     Shares      Per Share     Shares      Per Share
     data)
                                        ----------   ----------   ----------   ----------   ----------   ----------

     Outstanding at beginning of year       3,918       $29.60        3,017       $31.38        2,795       $26.32
     Granted                                2,660        18.05        1,140        25.10          701        41.50
     Exercised                               (192)       15.82         (112)       23.56         (393)       14.45
     Terminated and other                    (369)       35.55         (127)       37.69          (86)       36.45
                                        ----------                ----------                ----------
     Outstanding at end of year             6,017        24.59        3,918        29.60        3,017        31.38
                                        ==========                ==========                ==========
     Exercisable at end of year             3,459                     1,014                       360
                                        ==========                ==========                ==========
     Available for grant                      340                         -                       125
                                        ==========                ==========                ==========


Certain of the options granted during 1999 were granted outside of the Plans.

For  purposes of  supplemental  disclosures  required by SFAS 123, the fair value of options  granted  during 2000,
1999 and 1998 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,
                                                           -----------------------------------------------
                                                                2000            1999              1998
                                                             ------------     ----------        ----------

     Risk-free interest rates                                       6.0%           5.5%              4.9%
     Volatility factors of the expected market
       price of Ordinary Shares                                    43.0%          39.0%             38.0%
     Expected life of options in years                               6-7            6-7               6-7
     Expected dividend yields                                          -              -                 -
     Weighted average grant date fair value                 $       5.04     $     7.67        $    12.71

     Proforma results based on these
       assumptions were as follows:
         Net income (loss) (000's)                          $   (126,411)    $   62,001        $   50,943
         Diluted earnings (loss) per share                  $      (4.10)    $     1.82        $     1.50

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 $832,000,  $458,000 and
$3.1 million for the years ended December 31, 2000, 1999 and 1998, respectively.

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,
                                                                       -------------------------------
         (In thousands of US dollars)                                      2000               1999
                                                                       ------------      -------------

         Harborside at Atlantis                                         $   20,307        $         -
         Trading Cove Associates                                            12,588              8,301
         Sun Indian Ocean                                                    5,751              5,251
         Other                                                                 563                660
                                                                       ------------      -------------
                                                                            39,209             14,212
         Less: amounts due within one year                                 (34,140)           (14,212)
                                                                       ------------      -------------
                                                                        $    5,069        $         -
                                                                       ============      =============

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  $887,000,  $876,000  and  $895,000  for the years ended
December 31, 2000, 1999 and 1998, 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 $7.4 million,  $6.4 million and $4.8 million for
the years ended December 31, 2000, 1999 and 1998, 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
2000, 1999 and 1998, the income tax provision relating to its US operations was as follows:

                                                       For the Year Ended December 31,
                                                -----------------------------------------------
         (In thousands of US dollars)               2000             1999              1998
                                                -----------      ------------      ------------

         Current:
             Federal                             $   4,930        $    9,197        $   11,477
             State                                   1,178               157               279
                                                -----------      ------------      ------------
                                                     6,108             9,354            11,756
         Deferred:
             Federal                                   205               (30)           (3,747)
                                                -----------      ------------      ------------
                                                 $   6,313        $    9,324        $    8,009
                                                ===========      ============      ============

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,
                                                            ---------------------------------------------
                                                             2000               1999              1998
                                                            --------          ---------         ---------

         Statutory US federal income tax rate                 (35.0%)             35.0%             35.0%
         Non US-source income                                 (40.7)             (40.3)            (27.1)
         NOLs and temporary differences
           for which a valuation allowance
           has been provided                                   76.7                8.7                 -
         Reduction of valuation allowance relating                -                  -              (5.7)
           to prior years' operating loss utilized
         Branch profit taxes and other taxes
           on US services                                       1.7                6.3               4.4
         Other                                                  2.9                2.1               5.6
                                                            --------          ---------         ---------
         Effective tax rate                                     5.6%              11.8%             12.2%
                                                            ========          =========         =========

The components of the deferred tax assets and liabilities were as follows:

                                                                                     December 31,
                                                                           ---------------------------------
         (In thousands of US dollars)                                           2000               1999
                                                                           --------------      -------------

         Deferred tax liabilities:
             Basis differences on land held for
               investment, development or resale                            $     (2,300)      $     (6,100)
             Basis differences on property and equipment                               -            (44,400)
             Other                                                                     -             (2,402)
                                                                           --------------      -------------
                 Total deferred tax liabilities                                   (2,300)           (52,902)
                                                                           --------------      -------------
         Deferred tax assets:
             Net operating loss carryforwards                                    202,000            196,700
             Assets held for sale                                                 26,700                  -
             Basis differences on property and equipment                           2,100                  -
             Book reserves not yet deductible for tax
               return purposes                                                       800             14,000
             Tax credit carryforwards                                              2,700              2,700
             Other                                                                 4,000              5,700
                                                                           --------------      -------------
                 Total deferred tax assets                                       238,300            219,100
             Valuation allowance for deferred tax assets                        (236,000)          (208,421)
                                                                           --------------      -------------
             Deferred tax assets, net of valuation allowance                       2,300             10,679
                                                                           --------------      -------------
         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.

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 2000,  1999 and 1998, net of amounts  capitalized,  amounted to $42.5  million,  $48.7 million and
$3.4 million,  respectively.  Income taxes paid in 2000,  1999 and 1998 amounted to $5.0 million,  $6.7 million and
$7.0 million, respectively.

Non-cash investing and financing activities in 2000, 1999 and 1998 included the following:

                                                                                    December 31,
                                                                      -----------------------------------------
         (In thousands of US dollars)                                    2000           1999            1998
                                                                      ---------      ----------      ----------

         Property and equipment acquired under capital
           lease obligations                                           $ 1,574        $    938        $  5,098

         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  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.

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,
                                                     ----------------------------------------------
          (In thousands of US dollars)                   2000             1999             1998
                                                     -----------        ----------       ----------

         Casino/hotel:
         Atlantic City, New Jersey
             Gaming                                   $ 235,827        $  221,015       $  234,736
             Rooms                                       16,412            15,160           16,148
             Food and beverage                           26,039            25,512           26,692
             Other                                        4,973             8,075           11,460
             Less: promotional allowances               (25,288)          (26,632)         (28,295)
                                                     -----------      ------------      -----------
                                                        257,963           243,130          260,741
                                                     -----------      ------------      -----------
         Paradise Island, The Bahamas:
             Gaming                                     132,108           130,529           84,606
             Rooms                                      177,596           149,671           78,794
             Food and beverage                          121,679           111,588           59,901
             Other (a)                                   66,280            58,732           34,157
             Insurance recovery                               -            14,209                -
             Less:  promotional allowances              (26,491)          (23,608)         (12,497)
                                                     -----------      ------------      -----------
                                                        471,172           441,121          244,961
                                                     -----------      ------------      -----------
         Total casino/hotel                             729,135           684,251          505,702

         Real estate related - Ocean Club Estates       108,650                 -                -

         Management and other fees:
             Connecticut                                 23,575            39,282           34,613
             Indian Ocean                                 7,539             6,477            6,032
             Dubai                                        1,221               538                -
             Harborside at Atlantis (b)                   3,428                 -                -
         Other segments                                  11,147             8,419            4,531
                                                     -----------      ------------      -----------
         Net revenues                                 $ 884,695        $  738,967       $  550,878
                                                     ===========      ============      ===========







Contribution to Consolidated Income (Loss) before Provision for Income Taxes

                                                                            For The Year Ended December 31,
                                                                     -----------------------------------------------
         (In thousands of US dollars)                                    2000              1999             1998
                                                                     ------------      ------------      -----------

         Casino/hotel:
             Atlantic City, New Jersey                                $    7,593       $     (253)       $   19,915
             Paradise Island, The Bahamas(a)                              85,666            93,609           42,132
                                                                     ------------      ------------      -----------
                                                                          93,259            93,356           62,047
                                                                     ------------      ------------      -----------

         Real estate related-Ocean Club Estates                           76,378                 -                -
         Management and other fees, net of amortization
             Connecticut                                                  23,096            38,802           33,376
             Indian Ocean                                                  7,539             6,477            6,032
             Dubai                                                         1,221               538                -
             Harborside at Atlantis                                        3,428
         General corporate                                               (23,330)          (16,899)         (19,505)
         Pre-opening expenses                                             (7,616)           (5,398)         (25,961)
         Purchase termination costs                                      (11,202)                -                -
         Transaction costs                                                (7,014)                -                -
         Write-down of net assets held for sale                         (229,208)                -                -
         Other segments                                                    1,694             2,348              621
         Corporate marketing, retail and public relations                 (3,089)           (4,792)          (4,404)
                                                                     ------------      ------------      -----------
             Income (loss) from operations                               (74,844)          114,432           52,206
                                                                     ------------      ------------      -----------
         Other income (expense):
             Interest income                                               4,194            12,725           15,651
             Interest expense, net of capitalization                     (45,678)          (50,699)          (4,516)
         Equity in earnings of associated companies:
             Indian Ocean                                                  3,445             2,628            2,730
             Harborside at Atlantis (b)                                      780                 -                -
         Other, net                                                         (688)               60             (316)
                                                                     ------------      ------------      -----------
             Income (loss) before provision for income taxes          $ (112,791)      $    79,146       $   65,755
                                                                     ============      ============      ===========






Total Assets, Depreciation and Amortization of Goodwill and Capital Additions

         (In thousands of US dollars)           As of December 31, 2000          Year Ended December 31, 2000
                                             ------------------------------   -----------------------------------
                                                                               Depreciation and
                                                                 Total           Amortization          Capital
                                                                 Assets          Of Goodwill          Additions
                                                              -------------   -------------------   --------------
         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
                                                              =============      ==============      =============


          (In thousands of US dollars)          As of December 31, 1999          Year Ended December 31,1999
                                             ------------------------------   -----------------------------------
                                                                               Depreciation and
                                                                 Total           Amortization          Capital
                                                                 Assets          Of Goodwill          Additions
                                                              -------------   -------------------   --------------
         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
                                                              =============      ==============      =============







Total Assets, Depreciation and Amortization of Goodwill and Capital Additions, Continued

         (In thousands of US dollars)           As of December 31, 1998          Year Ended December 31,1998
                                             ------------------------------   -----------------------------------
                                                                               Depreciation and
                                                                 Total           Amortization          Capital
                                                                 Assets          Of Goodwill          Additions
                                                              -------------   -------------------   --------------
         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.






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,
                                                        --------------------------------------------------
                                                             2000               1999              1998
                                                        -------------      -------------      ------------

  Revenues                                              $    106,151        $    84,007       $    88,773
  Income from operations                                      28,310             15,630            17,172
  Income before income taxes                                  20,480             13,171            14,237

                                                                       As of December 31,
                                                        --------------------------------------------------
                                                             2000               1999              1998
                                                        -------------      -------------      ------------

  Current assets                                        $     24,424        $    21,075       $    23,123
  Total assets                                               238,286            264,345           152,594
  Current liabilities                                         35,173             61,595            31,714
  Shareholders' equity                                       127,379            140,865            83,394

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
                                                        ------------------

  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


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, 2000 and 1999,
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  from the  representations  of financial  institutions.  The
carrying  value and negative  fair value of the  Company's  interest rate swaps was $0 and $454,000 at December 31,
2000, respectively, and $0 and $644,000 million at December 31, 1999, respectively.

EX-1

                        SUN INTERNATIONAL HOTELS LIMITED

                            ARTICLES OF ASSOCIATION


                          PRELIMINARY AND CONSTRUCTION



1.      (1) In these Articles, except where the subject or context otherwise requires:

        "Articles"  means the articles of association of the Company on the date hereof
        as the same may be amended from time to time;

        the "board" means the directors or any of them acting
        as the board of directors of the Company;

        "Commonwealth" means the Commonwealth of The Bahamas;

        "The  International  Business  Companies Act" means the International  Business
        Companies Act 2000 including any  modification or re-enactment  thereof for the
        time being in force;

        "Company" means Sun International Hotels Limited,
        the company to which these Articles apply.

        "director" means a director of the Company;

        "dollar", or "$" means the lawful currency of the
        United States of America;

        "holder" means, in relation to any shares,  the member whose name is entered in
        the register of members as the holder of such shares;

        "Ordinary  Shares" means the Series A Ordinary Shares and the Series B Ordinary
        Shares and after the  Re-designation  Date, shall mean Ordinary Shares of $0.01
        each of the  Company,  without  reference  to a series,  having  the rights set
        forth in these Articles;

        "Preference  Shares" means the  Preference  Shares of $0.01 each of the Company
        having the rights set forth in these Articles;

        "Re-designation  Date" means the  earliest of (i) the Series A Put  Termination
        Date,  (ii) the date on which a PO  Redemption or a PPO  Redemption  shall have
        been made and (iii) the date on which all Series A Ordinary  Shares  shall have
        been converted.








        "secretary"   means  the  secretary  of  the  Company  and  includes  a  joint,
        assistant,  deputy or temporary  secretary  and any other  person  appointed to
        perform the duties of the secretary;

        "Series A Ordinary  Shares" means the Series A Ordinary Shares of $0.01 each of
        the Company having the rights set forth in these Articles;

        "Series A Put" means the put option in respect of the Series A Ordinary  Shares
        set forth in Articles 19 and 21;

        "Series A Put  Termination  Date"  means the date when the  Company  shall have
        satisfied and discharged all of its obligations under Articles 19 and 21;

        "Series B Ordinary  Shares" means the Series B Ordinary Shares of $0.01 each of
        the Company having the rights set forth in these Articles, which after the Re-
        designation   Date,  shall  be  re-designated  as  "Ordinary   Shares"  without
        reference to a series; and

        "shares"  means shares in the Company  including  the  Ordinary  Shares and the
        Preference Shares.

        (2) The following terms are defined in the Article indicated:

                      Term                              Article
                      ----                              -------

               "Applicable Redemption Date"               22.8
               "Company Notice"                           19
               "Election"                                 22.1
               "Independent Director"                     49
               "PO Redemption"                            22.2
               "PO Redemption Notice"                     22.2
               "PO Redemption Notice Date"                22.2
               "PPO Redemption"                           22.3
               "PPO Redemption Notice"                    22.3
               "PPO Redemption Notice Date"               22.3
               "Purchase Date"                            19
               "Purchase Price"                           19
               "Put Notice"                               20
               "Restricted Transactions"                  68
               "SIIL"                                     22.3(a)
               "Special Public Offering"                  22.2
               "Supplementary Notice"                     22.4(b)
               "Supplementary Election Period"            22.4(b)
               "Tendered Shares"                          21

        (3) Save as aforesaid or as otherwise  defined  herein any words or expressions
        defined  in  the  International  Business  Companies  Act  (but  excluding  any
        modification  thereof not in force at the date of  adoption of these  Articles)
        shall,  if not  inconsistent  with the  subject or the  context,  bear the same
        meaning in these Articles.

        (4)  For  the  purposes  of  these  Articles,  references  to  writing  include
        references to any visible  substitute for writing and to anything partly in one
        form and partly in another form;  words  denoting the singular  number  include
        the plural number and vice versa;  words denoting the masculine  gender include
        the  feminine  gender  and  vice  versa;  and  references  to  persons  include
        references to bodies corporate.

3.      In addition to the registered office of the Company in the Commonwealth,  which
        shall be at such place as the directors  shall from time to time  appoint,  the
        Company may have an office for the  transaction of business at any other place,
        and meetings of the Company or of the  directors  may be held either  within or
        without the Commonwealth at such place as the directors may determine.

                                            SHARES

4.      The  authorized  share  capital of the Company at the date of adoption of these
        Articles is $350,000  divided into  250,000,000  Ordinary Shares of $0.001 each
        and 100,000,000  Preference  Shares of $0.001 each. The Ordinary Shares are, at
        the date of adoption  of these  Articles,  divided  into  150,000,000  Series A
        Ordinary Shares and 100,000,000  Series B Ordinary Shares having, in each case,
        the  rights  set  forth  in  these   Articles.   Upon  the  occurrence  of  the
        Re-designation  Date, Ordinary Shares shall no longer be designated Series A or
        Series  B, but shall be  "Ordinary  Shares"  without  designation.  Subject  to
        Article  68(e) and 68(h),  so long as Article 68 is in effect,  the  Preference
        Shares may be issued by the  Directors  from time to time in one or more Series
        having such  rights as the board may by  resolution  determine.  All the shares
        of the  Company  shall be in  registered  form,  shall be fully paid for at the
        time of issuance and shall be non-assessable.

5.      Without prejudice to any special rights previously  conferred on the holders of
        existing  shares in the  Company,  and subject to Article  68(e) and 68(h),  so
        long as Article 68 is in effect,  any  Preference  Shares in the Company may be
        issued  with  such  preferred,   deferred  or  other  special  rights  or  such
        restrictions,  whether in regard to dividend,  voting,  return of share capital
        or  otherwise,  as the  board may from  time to time by  resolution  determine.
        Preference  Shares may be voting nonvoting or voting only for specific purposes
        or in specific  circumstances;  provided,  however,  that the Company  shall be
        prohibited  from  issuing  any  non-voting  Preference  Shares  which  are  not
        entitled to elect at least one  director of the  Company in the  specific  case
        where an event of  default in the  payment of  dividends  has  occurred  and is
        continuing  with  respect to such  shares.  For purposes of Article 68, so long
        as it is in effect,  non-voting  Preference Shares and Preference Shares voting
        only to elect one or more  directors  in the case of a default  in  payment  of
        dividends thereon shall be deemed  non-voting  Preference Shares and all others
        shall be deemed voting Preference Shares.

6.      Where at any time the share  capital  is  divided  into  different  classes  or
        series of shares,  the rights attached to any class or series (unless otherwise
        provided  by the terms of issue of the shares of that class or series) may only
        be varied or  abrogated  with the  sanction  of a  resolution  of the board and
        either  (i) the  consent in  writing  of the  holders of a majority  in nominal
        value of the  issued  shares of the class or series or (ii) the  sanction  of a
        resolution  of  members  holding  shares of that  class or  series  passed at a
        separate general meeting of the holders of the shares of that class or series.

                                         CERTIFICATES

7.      Every  person  whose  name is entered  as a member in the  register  of members
        shall,  without payment,  be entitled to a certificate under the common seal of
        the  Company  specifying  the share or  shares  held by him,  provided  that in
        respect of a share or shares held jointly by several  persons the Company shall
        not be bound to issue more than one certificate,  and delivery of a certificate
        for a share to one of several joint  holders  shall be  sufficient  delivery to
        all.

8.      A share  certificate  defaced,  lost or destroyed may be renewed or replaced on
        payment of such fee, if any, as may be prescribed,  and on such terms,  if any,
        as to evidence and indemnity as the directors think fit.

                                      PURCHASE OF SHARES

9.      Subject to and in accordance with the provisions of the International  Business
        Companies Act and without  prejudice to any relevant special rights attached to
        any  class or series of  shares,  the  Company  may with the  agreement  of the
        holders of the relevant  shares  purchase any of its own shares of any class or
        series (including  redeemable  shares) at any price (whether at par or above or
        below par),  and any shares to be so  purchased  may be selected by the Company
        in any manner whatsoever.

                          TRANSFER AND TRANSMISSION OF SHARES

10.     Subject to Article 11, the  instrument  of transfer of any share in the Company
        shall be executed by the transferor  (or its duly  authorized  agent),  and the
        transferor  shall be deemed to remain the holder of the share until the name of
        the transferee is entered in the register of members in respect thereof.

11.     Shares in the Company shall be  transferred  in any usual or common form. The
        transfer  agent for the Company or the Company's  board may determine if a form
        of  transfer  is  usual  or  common  in the  case of any  question  or  dispute
        concerning a transfer.

12.     The board may:

(a)     decline  to  register a  transfer  of shares  unless the  instrument  of
        transfer is accompanied by the  certificate  or  certificates  of the shares to
        which it relates,  and such other evidence as the board may reasonably  require
        to show the right of the transferor to make the transfer; and

(b)     suspend the registration of transfers during the fourteen days

13.     The executors or  administrators  of a deceased sole holder of a share shall be
        the only  persons  recognized  by the Company as having any title to the share.
        In the case of a share  registered  in the  names of two or more  holders,  the
        survivors or the executors or  administrators of the deceased survivor shall be
        the only persons recognized by the Company as having any title to the share.

14.     Any  person  becoming  entitled  to a share  in  consequence  of the  death  or
        bankruptcy of a member shall,  upon such  evidence  being  produced as may from
        time to time be required by the board, have the right,  either to be registered
        as a member in respect of the share or,  instead of being  registered  himself,
        to make such  transfer of the share as the  deceased or bankrupt  person  could
        have made;  but the  directors  shall,  in either case,  have the same right to
        decline  or  suspend  registration  as they  would  have  had in the  case of a
        transfer of the share by the  deceased or bankrupt  person  before the death or
        bankruptcy.

15.     A person  becoming  entitled to a share by reason of the death or bankruptcy of
        the holder  shall be entitled to the same  dividends  and other  advantages  to
        which he would be  entitled  if he were the  registered  holder  of the  share,
        except that he shall not,  before  being  registered  as a member in respect of
        the share,  be  entitled in respect of it to exercise  any right  conferred  by
        membership in relation to meetings of the Company.

                              SPECIAL RESTRICTION ON THE VOTING
                                OF SERIES A ORDINARY SHARES BY
                            SUN INTERNATIONAL INVESTMENTS LIMITED
                               PRIOR TO THE REDESIGNATION DATE

16.     In  the  event  that  Sun  International  Investment  Limited  or  any  of  its
        affiliates  from time to time acquires  Series A Ordinary  Shares,  then at all
        times prior to the Re-designation  Date, neither Sun International  Investments
        Limited nor any such  affiliate will be entitled to vote such Series A Ordinary
        Shares  for the  election  of  Independent  Directors  (and any  votes  cast in
        violation of this  restriction  shall not be counted) unless Sun  International
        Investments  Limited  and its  affiliates  then  own  50% or  more of the  then
        outstanding  Series  A  Ordinary  Shares.  In  the  event  that  prior  to  the
        Re-designation  Date Sun International  Investments  Limited and its affiliates
        own 50% or more of the then outstanding  Series A Ordinary  Shares,  they shall
        be entitled to vote such shares to elect one  Independent  Director (or, if the
        total  number of  Independent  Directors  is  greater  than two,  they shall be
        entitled  to vote such  shares  to elect  not more than 50% of the  Independent
        Directors).

                                    ALTERATION OF CAPITAL

17.     The Company may, by a resolution  of the holders of Ordinary  Shares,  increase
        the share  capital by such sum to be divided  into shares of such amount as the
        resolution shall prescribe.

18.     The Company  may, by  resolution  of the board (and the holders of the Ordinary
        Shares, if and to the extent,  required by the International Business Companies
        Act):

        (a)    consolidate  and divide its share  capital into shares of larger  amount
               than its existing shares;

        (b)    subdivide  its  existing  shares,  or any of them or divide the whole or
               any part of its share  capital  into  shares of smaller  amount  than is
               fixed by the Articles; or

        (c)    reduce  its share  capital  in any  manner  and with and  subject to any
               incident authorized and consent required by law.


                            CONVERSION OF SERIES A ORDINARY SHARE

18.1    Subject to and upon  compliance  with the provisions of Articles 18.2 and 18.3,
        the  holder of any  Series A Ordinary  Shares  shall  have the  right,  at such
        holder's option, at any time prior to the  Re-designation  Date to convert such
        Series A Ordinary Shares into the same number of Series B Ordinary Shares.

18.2    In order to  exercise  the  conversion  privilege,  the  holder of any Series A
        Ordinary Shares to be converted  shall  surrender the certificate  representing
        such  shares at the office of the  Company's  transfer  agent in the Borough of
        Manhattan,  City of New York,  with a written  notice of  election  to  convert
        attached  to such  certificate  and signed by the  registered  holder  thereof.
        Unless the Series B Ordinary  Shares issuable on conversion are to be issued in
        the  same  name as the  name  in  which  such  Series  A  Ordinary  Shares  are
        registered,  all shares  surrendered  for  conversion  shall be  accompanied by
        instruments  of  transfer  duly  executed  by the  registered  holder  or  such
        holder's duly authorized  attorney and an amount sufficient to pay any transfer
        or similar tax.

18.3    As promptly as  practicable  after the  surrender  of the  certificates  of the
        Series A Ordinary  Shares as aforesaid,  the Company shall issue and deliver to
        such holder,  or on such holder's  written order, a certificate or certificates
        for an equal  number of Series B  Ordinary  Shares.  Each  conversion  shall be
        deemed to have been effected  immediately prior to the close of business on the
        date on which the  certificates  for the  Series A Ordinary  Shares  shall have
        been surrendered and such notice is received by the Company,  and the person or
        persons in whose name or names any  certificate  or  certificates  for Series B
        Ordinary Shares shall be issuable upon such conversion  shall be deemed to have
        become the holder or  holders  of record of the shares  represented  thereby at
        such time on such date. All Series B Ordinary Shares  delivered upon conversion
        of Series A Ordinary  Shares will upon  delivery  be duly and  validly  issued,
        fully paid and  non-assessable,  free of all liens and  charges and not subject
        to any preemptive rights.
                                         SERIES A PUT

19.     Subject to the proviso in the first sentence of Article 21 hereof,  not earlier
        than one hundred  but not later than ninety days prior to May 3, 1999,  or such
        later date as may be required  by the proviso in the first  sentence of Article
        21 hereof (the  "Purchase  Date") the Company  shall give  written  notice (the
        "Company  Notice")  to the  holders of the Series A  Ordinary  Shares  (and for
        information  to the holder of the Series B Ordinary  Shares)  that the Series A
        Put is then  exercisable  in accordance  with the  provisions of these Articles
        and stating the Purchase  Price (as defined  below)  payable on exercise of the
        Series A Put. The Company  Notice shall  constitute  an offer by the Company to
        purchase on the Purchase Date all or any  outstanding  Series A Ordinary Shares
        properly  tendered to it, for a  consideration  per Series A Ordinary  Share of
        $35,  adjusted so as to avoid any  reduction  in the rights or interests of the
        holders of such Series A Ordinary  Shares as a result of any  consolidation  or
        division  of the  Series A  Ordinary  Shares  pursuant  to  Article 18 or other
        similar  alteration to the Series A Ordinary  Shares after the date of adoption
        of these Articles (as so adjusted from time to time, the "Purchase Price").

20.     Each holder of Series A Ordinary  Shares may,  but shall not be  obligated  to,
        accept the offer contained in the Company  Notice,  by tendering to the Company
        not  later  than two  business  days  prior to the  Purchase  Date a notice  in
        writing  (the "Put  Notice")  signed by the  holder  of the  Series A  Ordinary
        Shares  indicating  the number of Series A Ordinary  Shares in respect of which
        it is  exercising  the Series A Put  (which  may be all or any  portion of such
        holder's  shares)  together  with  the  certificates  relating  thereto.  A Put
        Notice may be  withdrawn  (in whole or in part) by  delivery  to the Company of
        written  notice to that  effect  signed by the  holder of the Series A Ordinary
        Shares the subject of the Put Notice not later than two business  days prior to
        the Purchase Date.

21.     The  Purchase  Price in respect  of Series A  Ordinary  Shares  properly
        tendered  in  accordance  with  Article  20 and not  withdrawn  (the  "Tendered
        Shares")  shall be paid to the holders  thereof by the Company on or before the
        Purchase  Date  provided  that the Company  shall have no  liability  under the
        Series A Put to make any payment to the extent that such  payment  could not be
        made in  compliance  with the  International  Business  Companies  Act,  and in
        particular  Section 32(2) thereof,  and in such event, this obligation shall be
        deferred  until  such  time  as it may be  satisfied  in  accordance  with  the
        International  Business  Companies  Act.  Tendered  Shares so  purchased  shall
        immediately be cancelled.  The Company may discharge its obligations in full to
        the holders of Series A Ordinary  Shares by depositing  with a reputable  bank,
        trust company or other financial institution having minimum capital and surplus
        of at least  $100,000,000,  as agent for the  holders  of the Series A Ordinary
        Shares  (the  "Distribution  Agent")  an amount in cash  sufficient  to pay the
        Purchase  Price for the Series A Ordinary  Shares so properly  tendered and not
        withdrawn  and by  instructing  the  Distribution  Agent to make payment of the
        Purchase  Price  promptly  to such  holders.  In the event that the  Company is
        unable  to  purchase  the  Tendered  Shares on the  Purchase  Date by reason of
        Section  32(2) (or any other  provision)  of the  International  Business
        Companies Act, such unpurchased Tendered Shares may nonetheless be purchased at
        the Purchase  Price from holders  delivering a Put Notice by Sun  International
        Investment Limited or any of its affiliates.

22.     During the period  commencing  on the date of the Company  Notice and ending on
        the  Series A Put  Termination  Date the  Company  shall not issue any Series A
        Ordinary Shares.

                                OPTIONAL REDEMPTION PROVISIONS

22.1    The Series A Ordinary  Shares can be called for  redemption in whole or in part
        (but only if greater than 50% of such Series A Ordinary  Shares are so called),
        on a pro rata  basis,  at the option of the  Company,  after  August 3, 1995 in
        accordance  with the  provisions  of these  Articles.  In  connection  with any
        optional  redemption,  holders  of  Series  A  Ordinary  Shares  will  have the
        opportunity  to elect to (i) convert  their  Series A Ordinary  Shares into the
        same number of Series B Ordinary  Shares in accordance with Articles 18.1, 18.2
        and 18.3,  (ii) be redeemed at the Applicable  Redemption  Price (as defined in
        Article  22.8) or (iii) in the case of a PO  Redemption  (as defined in Article
        22.2) only, be redeemed at the Applicable  Redemption  Price unless the pricing
        of the Special  Public  Offering (as defined in Article  22.2) is more than 15%
        greater than the Applicable  Redemption Price, in which case, if so elected, be
        converted into the same number of Series B Ordinary  Shares in accordance  with
        Articles  18.1,  18.2 and 18.3 (the  election made pursuant to clause (i), (ii)
        or (iii) being referred to as the "Election").

               OPTIONAL REDEMPTION OF SERIES A ORDINARY SHARES
                            IN CONJUNCTION WITH A PUBLIC OFFERING

22.2    If the Optional  Redemption is to be made in conjunction with a public offering
        of  Ordinary  Shares (a "PO  Redemption"),  then the  Company  shall  provide a
        notice of redemption  (the "PO Redemption  Notice"),  which shall be subject to
        the  conditions  of  Article  22.3,  no  earlier  than the date a  registration
        statement   relating   to  a  public   offering  to  be   underwritten   by  an
        internationally  recognized  investment bank (a "Special  Public  Offering") is
        first filed with the United States Securities and Exchange  Commission.  The PO
        Redemption  Notice  shall  indicate  the  range  of  prices  set  forth  in the
        prospectus  relating  to the  Special  Public  Offering  at  which  shares  are
        expected to be sold in the  Special  Public  Offering.  The holders of Series A
        Ordinary  Shares shall have 35 calendar days (the  "Election  Period") from the
        date the PO Redemption  Notice is duly mailed (the "PO Redemption Notice Date")
        to make the Election.  If any holder of Series A Ordinary  Shares fails to make
        an  Election  within  the  Election  Period,  the  Company  shall,  subject  to
        satisfaction  of all conditions set forth in Article 22.3,  redeem the Series A
        Ordinary Shares of such holder at the Applicable Redemption Price.

22.3    The PO Redemption  may be effected only if all of the following  conditions are
        satisfied within 120 days of the PO Redemption Notice Date:

        (a)    there  is a  Special  Public  Offering  of at least  2,000,000  Ordinary
               Shares to persons other than Sun International  Investments  Limited,  a
               British Virgin Islands company  ("SIIL") and/or persons  affiliated with
               SIIL;

        (b)    such Ordinary Shares are listed on a U.S. national  securities  exchange
               or quoted for trading on the Nasdaq National Market System; and

        (c)    the Special  Public  Offering is consummated at a price to the public of
               no less than $30 per share,  adjusted to accurately  and fairly  reflect
               the results of any  consolidation  or division of the Ordinary Shares or
               other similar  alteration  to the Ordinary  Shares after the date of the
               adoption of these Articles.

        If the above conditions are not satisfied,  then the PO Redemption shall not be
        effected and all  Elections  to convert into Series B Ordinary  Shares shall be
        null and void.

22.4    In the event the pricing of the Special Public  Offering is more than 15% below
        the midpoint of the range  indicated in the PO Redemption  Notice,  the Company
        may elect either:

        (a)    to cancel  the PO  Redemption,  in which  case the  holders  of Series A
               Ordinary  Shares shall retain  their shares and all  Elections  shall be
               null and void; or

        (b)    to continue the PO  Redemption,  in which case the Company  shall send a
               supplementary  PO  Redemption  Notice  (the  "Supplementary  Notice") to
               holders of Series A Ordinary  Shares.  No later  than 15  business  days
               (the  "Supplementary  Election Period") after the  Supplementary  Notice
               has been duly  mailed,  the  holders of Series A Ordinary  Shares  shall
               either (i)  reconfirm  their  Election or (ii) make a new  election.  If
               any  holder  fails  to  either  reconfirm  its  Election  or  make a new
               election within the  Supplementary  Election  Period,  the Company shall
               redeem  the Series A Ordinary  Shares of such  holder at the  Applicable
               Redemption Price  notwithstanding  any Election made during the Election
               Period.  "Business  day"  shall  mean any date  that is not a  Saturday,
               Sunday or public holiday in New York City.

22.5    Any PO  Redemption  must occur (a) no sooner  than the later of (i) the closing
        of the Special Public  Offering and (ii) the  termination of any  Supplementary
        Election  Period and (b) no later than the  earlier of (i) five  business  days
        following  the closing of the Special  Public  Offering and (ii) 125 days after
        mailing of the PO Redemption Notice.

                    OPTIONAL REDEMPTION OF SERIES A ORDINARY SHARES
                                AFTER A PUBLIC OFFERING

22.6    If an optional  redemption is to be made subsequent to a single public offering
        of at least  2,000,000  Series B  Ordinary  Shares to  persons  other than SIIL
        and/or persons affiliated with SIIL (a "PPO Optional Redemption"),  each of the
        following  conditions must be satisfied  immediately  prior to the mailing of a
        notice of redemption (a "PPO Redemption Notice"):

        (a)    there are at least  2,000,000  Series B Ordinary  Shares held by persons
               other than SIIL and/or persons affiliated with SIIL;

        (b)    the Series B Ordinary  Shares are listed on a U.S.  national  securities
               exchange or quoted for trading on the Nasdaq National Market System;

        (c)    average weekly  trading  volume of Series B Ordinary  Shares has been in
               excess  of  100,000  shares  for 10 out  of  the  12  weeks  immediately
               preceding the mailing of the PPO Redemption  Notice (the "PPO Redemption
               Notice Date");

        (d)    the closing  market price of Series B Ordinary  Shares has been equal to
               or greater than the  Applicable  Redemption  Price for any 30 out of the
               40 consecutive trading days,  including each of the last 10 trading days
               of such period, immediately preceding the PPO Redemption Notice Date;

        (e)    the PP0  Redemption  occurs no  sooner  than 30,  and no later  than 35,
               business days following the PPO Redemption Notice Date; and

        (f)    Neither  SIIL  nor  any of  its  affiliates  shall  have  purchased  any
               Ordinary  Shares  (excluding  any purchases  pursuant to Employee  Stock
               Options)  during the  periods  described  in Article  22.6(d) or 60 days
               prior to the commencement of such period.

22.7    If a PPO Optional  Redemption is to be made,  SIHL shall mail a PPO Redemption  Notice
        to all holders of Series A Ordinary  Shares.  The PPO  Redemption  Notice shall
        affirmatively  state that the  conditions  set forth in Article  22.6 for a PPO
        Optional  Redemption  have been met and state the date set for the PPO Optional
        Redemption.  The  holders of Series A Ordinary  Shares  shall have 35  calendar
        days from the date the PPO Redemption  Notice is mailed to convert their Series
        A Ordinary  Shares  pursuant to Articles 18.1,  18.2 and 18.3. If any holder of
        Series A Ordinary  Shares fails to convert its shares  within the 35 day period
        described in the  preceding  sentence,  the Company  shall redeem such holder's
        Series A Ordinary Shares at the Applicable  Redemption  Price on the redemption
        date set forth in the PPO Redemption Notice.

                                  OPTIONAL REDEMPTION PRICES

22.8    If  the  applicable  conditions  with  respect  to a  PO  Redemption  or a  PPO
        Redemption  have been met,  the  Series A  Ordinary  Shares  can be called  for
        redemption and the redemption  effected at the redemption  prices set below (if
        redeemed  during the three month period  beginning on the applicable  dates set
        forth below) plus any dividends  declared and due (the  "Applicable  Redemption
        Prices");  provided,  however,  such prices shall be adjusted to accurately and
        fairly  reflect the results of any  consolidation  or division of the  Ordinary
        Shares or  similar  alteration  of the  Ordinary  Shares  after the date of the
        adoption of these Articles.

                  After                     Redemption Price
                  -----                     ----------------

               August 3, 1995                      $32.00
               November 3, 1995                    $32.20
               February 3, 1996                    $32.40
               May 3, 1996                         $32.60
               August 3, 1996                      $32.80
               November 3, 1996                    $33.00
               February 3, 1997                    $33.20
               May 3, 1997                         $33.40
               August 3, 1997                      $33.60
               November 3, 1997                    $33.80
               February 3, 1998                    $34.00
               May 3, 1998                         $34.20
               August 3, 1998                      $34.40
               November 3, 1998                    $34.60
               February 3, 1999                    $34.80


                                        REDESIGNATION

23.     Immediately  following the  Re-designation  Date,  each Series B Ordinary Share
        and each  Series A Ordinary  Share  shall  automatically  and  without  further
        action be  converted  into and  re-designated  as one  Ordinary  Share  without
        reference to a series and the provisions of Articles 16, 18.1,  18.2,  18.3, 19
        to 22, 22.1 to 22.7,  49(1),  49(2), 51 and 68 shall cease to have any force or
        effect.

24.     On and  following  the  Re-designation  Date each  holder of Series B  Ordinary
        Shares shall, on tendering their share  certificates in respect of their Series
        B Ordinary Shares, be entitled to receive,  without payment,  a new certificate
        under the common seal of the Company  representing  an equal number of Ordinary
        Shares without reference to series.

                                       GENERAL MEETINGS

25.      A general  meeting  shall be held once in every  year at such time (not  being
        more than  fifteen  months  after the  holding  of the last  preceding  general
        meeting) and at such place as may be prescribed by the board.

26.     In default of a general  meeting so held,  a general  meeting  shall be held in
        the  month  next  following  and may be  convened  by any  two or more  members
        holding  Ordinary  Shares  carrying  at  least  one-tenth  of the  votes of all
        members entitled to vote at general  meetings,  in the same manner as nearly as
        possible  as that in which  meetings  are to be  convened  by the board and any
        such meeting  shall be held at such place as the members  convening the meeting
        may designate in the notice thereof.

27.     The  above-mentioned  general meetings shall be called annual general meetings;
        all other general meetings shall be called extraordinary.

28.     The board  may,  whenever  it thinks  fit,  convene  an  extraordinary  general
        meeting,  and  extraordinary  general  meetings  shall also be  convened by the
        board on the  requisition,  in accordance with Section 59 of the  International
        Business  Companies  Act,  of  members  of the  Company  holding  not less than
        one-tenth  of the  paid-up  capital  of the  Company,  or, in  default,  may be
        convened  by  such  requisitionists,  as  provided  by  Section  59(3)  of  the
        International Business Companies Act.

                               PROCEEDINGS AT GENERAL MEETINGS

29.     (1) Thirty-days'  notice at the least (exclusive of the day on which the notice
        is served or deemed to be served,  but inclusive of the day for which notice is
        given)  specifying  the place,  the day and the hour of meeting and, in case of
        special  business,  the general nature of that business,  shall be given in the
        manner  hereinafter  mentioned,  or in such  other  manner,  if any,  as may be
        prescribed by the Company in general meeting,  to such persons as are under the
        Articles entitled to receive such notices from the Company.

        (2) Every notice  convening a general meeting shall include a statement  having
        reasonable  prominence that a member entitled to attend and vote is entitled to
        appoint a proxy to attend and vote  instead  of him,  and that a proxy need not
        also be a member.

30.     All business  shall be deemed  special that is transacted  at an  extraordinary
        meeting,  as shall all business that is transacted at an ordinary  meeting with
        the exception of (i)  sanctioning  a dividend,  (ii) the  consideration  of the
        accounts,   balance-sheets  and  the  ordinary  report  of  the  directors  and
        auditors,  (iii) election of directors and other officers in the place of those
        retiring by rotation and (iv) the fixing of the remuneration of the auditors.

31.     No  business  shall be  transacted  by any general  meeting  unless a quorum of
        members is present at the time when the meeting  proceeds to business;  save as
        herein  otherwise  provided,  members  present in person or by proxy holding at
        least a majority of each series then  outstanding of Ordinary Shares shall be a
        quorum.

32.     Where within half an hour from the time  appointed  for the meeting a quorum is
        not present,  the meeting,  if convened upon the requisition of members,  shall
        be  dissolved;  in any other case it shall stand  adjourned  to the same day in
        the next week, at the same time and place and where at the adjourned  meeting a
        quorum  is not  present  within  half an hour from the time  appointed  for the
        meeting, the members present shall be a quorum.

33.     The  chairman,  if any, of the board shall preside as chairman at every general
        meeting of the Company.

34.     Where  there is no such chairman or at any meeting he is  not   present  within
        fifteen minutes after the time appointed for holding the meeting or at  which
        he is unwilling to act as chairman, the directors in office prior to such meeting
        who are present shall choose some one of their number to be chairman.

35.     (1) The  chairman  may,  with the consent of any  meeting (on a  class-by-class
        basis) at which a quorum is present (and shall if so directed by the  meeting),
        adjourn the meeting from time to time and from place to place,  but no business
        shall be  transacted  at any  adjourned  meeting  other than the business  left
        unfinished at the meeting from which the adjournment took place.

        (2) when a meeting is adjourned  for ten days or more,  notice of the adjourned
        meeting shall be given as in the case of any original meeting.

        (3) Save as  aforesaid,  it shall  not be  necessary  to give any  notice of an
        adjournment or of the business to be transacted at an adjourned meeting.

36.     At any general  meeting a  resolution  put to the vote of the meeting  shall be
        decided  on a voice  call or show of hands,  unless a poll is (before or on the
        declaration  of the  result  of the show of  hands)  demanded  by at least  two
        members present in person or by proxy holding Ordinary Shares carrying at least
        one-tenth of the votes of all members entitled to vote at the meeting or by the
        chairman and unless a poll is so demanded, a declaration by the chairman that a
        resolution  has,  on a voice  call or show of hands,  been  carried  or carried
        unanimously or by a particular majority or lost, and an entry to that effect in
        the book of the  proceedings of' the Company,  shall be conclusive  evidence of
        the fact,  without proof of the number or  proportion of the votes  recorded in
        favor of or against that resolution.

37.     If a poll is duly demanded it shall be taken in such manner as the' chairman  directs,
        and the  result of the poll  shall be deemed to be the  resolution  of the  meeting at
        which the poll was demanded.

38.     The demand for a poll may,  before the poll is taken,  be withdrawn  but only with the
        consent  of the  chairman  and a  demand  so  withdrawn  shall  not be  taken  to have
        invalidated  the result of the voice  call or show of hands  taking  place  before the
        demand was made.

                                       VOTES OF MEMBERS

39.     Subject to the  provisions  of Article 16,  every  member shall have one vote for each
        Ordinary  Share of which he is the  holder.  Voting  rights of  Preference  Shares (if
        any) shall be as specified in accordance with Article 5.

40.     In the case of joint  holders  the vote of the senior who  tenders a vote,  whether in
        person or by  proxy,  shall be  accepted  to the  exclusion  of the votes of the other
        joint  holders;  and for this purpose  seniority  shall be  determined by the order in
        which the names stand in the register of members.

41.     A member of  unsound  mind,  or in respect of whom an order has been made by any court
        having  jurisdiction  with respect to persons of unsound mind, may vote,  whether on a
        voice  call,  show of hands or on a poll,  by his  committee  or other  person  in the
        nature of a committee appointed by that court.

                                           PROXIES

42.     (1) The  instrument  appointing  a proxy  shall be in  writing  under  the hand of the
        appointer  or his  attorney  duly  authorized  in writing  or, if the  appointer  is a
        corporation,  either under the common seal or under the hand of an officer or attorney
        so authorized.

(2)     An  instrument  appointing a proxy may be in the  following  form or in any other form
        which the board may approve:

               "I                           of                   being
               a member  of Sun  International  Hotels  Limited,  hereby
               appoint              of                    as my
               proxy  to vote  for me and on my  behalf  at the  general
               meeting of the Company to be held on the          day of
               and at any adjournment thereof."

                             Signed this           day of

43.     The  instrument  appointing a proxy and the power of attorney or other  authority,  if
        any, under which it is signed or a certified copy of that power or authority  shall be
        deposited at the  registered  office of the Company not less than  forty-eight  hours,
        before  the  holding  of the  meeting  at which  the  person  named in the  instrument
        proposes to vote,  or shall be delivered in person to the  secretary of the Company at
        such meeting or such person or persons as may be  designated  by the  secretary of the
        Company at such meeting,  and in default the  instrument of proxy shall not be treated
        as valid.

44.     A vote given in  accordance  with the terms of an  instrument  of proxy shall be valid
        notwithstanding  the previous  death or insanity of the principal or revocation of the
        instrument  of  proxy,  or the  authority  under  which  the  instrument  of proxy was
        executed,  or transfer  of the shares in respect of which the vote is given,  provided
        no intimation  in writing of the death,  insanity,  revocation or transfer  shall have
        been received at the registered  office of the Company before the meeting or adjourned
        meeting at which the instrument or proxy is used.

                                  CORPORATE REPRESENTATIVES

45.     Any  body  corporate  which  is a  member  of the  Company  may by  resolution  of its
        directors or other  governing body or by authority to be given under seal or under the
        hand of an officer duly  authorized  by it  authorize  such person as it thinks fit to
        act as its  representative at any meeting of the Company or at any separate meeting of
        the holders of any class or series of shares and such  authority  may be general or in
        respect of specific  meetings.  A person so  authorized  shall be entitled to exercise
        the same  power on  behalf  of the  grantor  of the  authority  as the  grantor  could
        exercise if it were an individual  member of the Company and the grantor shall for the
        purposes of these  Articles be deemed to be present in person at any such meeting if a
        person so authorized is present at it.

                                        CLASS MEETINGS
                                       SERIES MEETINGS

46.     All  provisions of these  Articles  relating to general  meetings of the Company shall
        apply  mutatis  mutandis  to every  separate  meeting  of the  holders of any class or
        series of shares in the capital of the Company.

                                          DIRECTORS

47.     Unless  otherwise  determined  by a  resolution  of  the  board  (and,  prior  to  the
        Re-designation  Date, such  resolution to be approved by the  Independent  Directors),
        the number of the directors shall be five.

48.     Subject to the  provisions of Articles 49 to 52 the  directors  shall be appointed and
        may be removed in accordance with the International Business Companies Act.

49.     (1) Until the occurrence of the Re-designation  Date, each of the directors  nominated
        by the holders of the Series A Ordinary Shares and each of their  successors from time
        to time (the  "Independent  Directors")  shall be  exclusively  entitled prior to each
        general meeting at which their appointment  terminates,  to nominate themselves or any
        other  person to serve as a director and if at any time during such period any vacancy
        exists among the  Independent  Directors the right to nominate the person to fill such
        vacancy  shall be  exclusively  that of the remaining  Independent  Director or, if no
        such director  remains in office,  the board after having  consulted  with, and to the
        extent permitted by applicable law following the  recommendation of, the three holders
        of  Series A  Ordinary  Shares  believed  in good  faith by the board to be the
        holders of the greatest number of Series A Ordinary Shares then outstanding.

        (2) Until the  occurrence  of the  Re-designation  Date,  the  holders of the Series B
        Ordinary  Shares shall be exclusively  entitled prior to each general meeting at which
        the  appointment  of any director other than an Independent  Director  terminates,  to
        nominate a person to serve as director in succession  to each such retiring  director,
        and if at any  time  during  such  period  any  vacancy  exists  among  the  directors
        nominated by the holders of the Series B Ordinary Shares,  such holders shall have the
        exclusive right to fill such vacancy.

        (3) After the  Re-designation  Date in  respect  of all the (and prior to such date in
        respect  of any  director  if the  persons  entitled  to  nominate  such  director  in
        accordance  with  Articles  49(1)  and 49(2)  fail to do so),  the board may make such
        nominations  as it shall,  in its  discretion,  determine.  After  the  Re-designation
        Date, if the board so determines,  holders of Ordinary  Shares may propose  candidates
        for nomination to the board in accordance  with such procedures and terms as the board
        shall in its  discretion  determine,  subject to such  procedures  being in accordance
        with  applicable  laws,  rules and  regulations  including rules or regulations of any
        stock exchange or quotation system on which the Company's shares are listed or quoted.

50.     (1) It shall be  presumed  that it is in the best  interests  of the  Company to allow
        directors  to  participate  in  meetings  of the  board or of  committees  thereof  by
        telephonic  communication as set forth in Article 65 and,  accordingly,  it shall be a
        term of appointment  of each director that he  irrevocably  consents to the holding of
        such meetings in the manner set forth in Article 65.

        (2) No person shall be eligible to serve as an Independent  Director  unless the board
        has determined that such person  satisfies the criteria of any applicable  requirement
        of any stock exchange or quotation  system on which the Company's shares are listed or
        quoted for the appointment of independent directors.

51.     In  exercising  their  duties  and  responsibilities  as  directors,  the  Independent
        Directors shall,  inter alia,  recognize the fact that the Series A Put is an integral
        part of the Company's  value,  and the preservation of the value of the rights created
        by the Series A Put for the  holders of the Series A Ordinary  Shares  shall be deemed
        to be a matter  in the  Company's  best  interests.  Actions  requiring  the  separate
        consent or approval of the Independent  Directors shall be deemed  authorized if given
        by 50% or more of the  Independent  Directors  (or  such  greater  number  as shall be
        required,  if  any,  by the  International  Business  Companies  Act  or by any  stock
        exchange  or  quotation  system on which the  Company's  shares are listed or quoted),
        except in the case of approvals  contemplated by Article 68(c),  which shall be deemed
        authorized if given by a majority of the Independent Directors.

52.     The directors of the Company  holding office as of the date these Articles are adopted
        shall hold  office  until the date of the annual  general  meeting to be held in 1997.
        At the annual  general  meeting  held in 1997 and at each  subsequent  annual  general
        meeting,  directors shall be appointed by resolution of the holders of Ordinary Shares
        in accordance  with these Articles  (including  provisions as to  nomination)  and any
        director so appointed  (and any director  appointed to fill a vacancy in the directors
        prior to the next annual  general  meeting)  shall hold  office  until the date of the
        next annual general  meeting of the Company,  or if later the date his successor shall
        be duly elected and qualified.

                                     EXECUTIVE DIRECTORS

53.     The  board  may  appoint  one or more of its body to be the  holder of any one or more
        executive  office  (except  that of  auditor)  under the Company and may enter into an
        agreement or  arrangement  with any director for his  employment by the Company or for
        the  provision  by him of any services  outside the scope of the ordinary  duties of a
        director.  Any such  appointment,  agreement  or  arrangement  may be made  upon  such
        terms,  including  terms  as  to  remuneration,  as  the  board  determines,  and  any
        remuneration  which is so determined  may be in addition to or in lieu of any ordinary
        remuneration as a director.  The board may revoke or vary any such appointment but
        without  prejudice  to any rights or claims  which the  person  whose  appointment  is
        revoked or varied may have against the Company by reason thereof.

54.     Any  appointment of a director to an executive  office shall terminate if he ceases to
        be a director but without  prejudice to any rights or claims which he may have against
        the Company by reason of the termination of such appointment.  A director appointed to
        an executive  office shall not ipso facto cease to be a director if his appointment to
        such executive office terminates.

55.     The  emoluments  of any  director  holding  executive  office for his services as such
        shall  be  determined  by the  board,  and  may be of any  description,  and  (without
        limiting the generality of the  foregoing) may include  admission to or continuance of
        membership of any scheme (including any share  acquisition  scheme) or fund instituted
        or  established  or financed or  contributed  to by the Company for the  provision  of
        pensions,  life assurance or other benefits for employees or their dependents,  or the
        payment  of a  pension  or  other  benefits  to  him  or his  dependents  on or  after
        retirement or death, apart from membership of any such scheme or fund.

                                POWERS AND DUTIES OF THE BOARD

56.     The  business of the Company  shall be managed by the board,  which may  exercise  all
        such powers of the Company as are not, by the International  Business Companies Act or
        by  these   Articles,   required  to  be  exercised  by  the  Company  in  general  or
        extraordinary   meetings  subject   nevertheless  to  these  Articles   (including  in
        particular  Articles  68 and  68.1  for so  long  as they  are in  effect)  and to the
        International Business Companies Act.
                              -

                                   PROCEEDINGS OF DIRECTORS

57.     (1) The  directors  may meet  together  for the  dispatch  of  business,  adjourn  and
        otherwise regulate their meetings, as they think fit.

        (2)  Subject  to  Articles  68 and 68.1 for so long as they are in  effect,  questions
        arising at any meeting shall be decided by a majority of votes.

(3)     A director may, and the secretary on the  requisition of a director shall, at any time
        summon  a  meeting  of the  directors.  Directors  shall be  given  reasonable  notice
        (which,  except  in the case of  emergencies,  shall be not less than  three  business
        days) of the time and place appointed for such meeting of the directors,  which notice
        may be waived by any or all directors at any time before or after such meeting.

58.     The quorum  necessary  for the  transaction  of the business of the  directors  may be
        fixed by the directors and unless so fixed shall be three.

59.     The continuing  directors may act  notwithstanding  any vacancy in their body, but, if
        and so long as their  number is reduced  below the number  fixed by or pursuant to the
        Articles as the necessary  quorum of directors,  the continuing  directors may act for
        the purpose of summoning a general meeting of the Company, but for no other purpose.

60.     The  directors  may elect a chairman of their  meetings and  determine  the period for
        which he is to hold  office;  but if no such  chairman is elected or if at any meeting
        the chairman is not present  within five minutes after the time  appointed for holding
        the same,  the directors  present may choose one of their number to be chairman of the
        meeting.

61.     Subject to Articles 68 and 68.1 for as long as they are in effect,  the  directors may
        delegate any of their powers to  committees  consisting of such members of the Company
        or  members of their body as they  think fit  provided  that at least one  Independent
        Director  shall be  appointed  as a member of each  committee  unless all  Independent
        Directors  elect to decline  such  appointment;  any  committee so formed shall in the
        exercise of the powers so delegated  conform to any regulations that may be imposed on
        them by the  directors;  provided,  however,  that no committee  shall be permitted to
        take any action  restricted  pursuant to  Articles  68 and 68.1  hereof  other than in
        strict compliance with such Articles 68 and 68.1.

62.     A committee may elect a chairman of their meetings;  if no such chairman is elected or
        if at any meeting  the  chairman is not  present  within five  minutes  after the time
        appointed for holding the same, the members  present may choose one of their number to
        be chairman of the meeting.

63.     (1) A committee  shall meet and adjourn as  determined  by the board and  otherwise as
        they think proper.

        (2)  Subject  to  Articles  68 and 68.1 for so long as they are in  effect,  questions
        arising at any  meeting  shall be  determined  by a majority  of votes of the  members
        present.

64.     Subject to Articles  68 and 68.1 for so long as they are in effect,  a  resolution  in
        writing  signed  by a  simple  majority  of the  directors  entitled  to  vote on that
        resolution  at a meeting of the board or of the  members of an existing  committee  of
        the board with  authority  to consider  and act on the matter (not being less than the
        number of  directors  required  to form a quorum of the  board)  shall be as valid and
        effectual  as if it had been  passed at a meeting of the board or (as the case may be)
        a committee of the board duly convened and held and for this purpose a resolution  may
        consist of several documents to the same effect, each signed by one or more directors.

65.     A  meeting  of the board or of a  committee  of the board  may,  if all the  directors
        consent,  consist of a conference  between directors who are not all in one place, but
        of whom each is able  (directly or by  telephonic  communication)  to speak to each of
        the others,  and to be heard and recognized by each of the others.  A director  taking
        part in such a  conference  shall be deemed to be present in person at the meeting and
        shall be  entitled  to vote or be  counted  in a quorum  accordingly.  Such a  meeting
        shall be deemed to take place where the largest  group of those  participating  in the
        conference  is  assembled,  or, if there is no such group,  where the  chairman of the
        meeting  then  is.  The  word  "meeting"  in  these   Articles'   shall  be  construed
        accordingly.

66.     The board shall cause minutes to be made in books provided for the purpose:

        (a)    of all appointments of officers made by the board;

        (b)    of the names of the  directors,  members or others  present at each  meeting of
               the directors and of any committee of the directors; and

        (c)    of all  resolutions  and  proceedings at all meetings of the Company and of the
               board and of committees of the board.

                                      POWERS OF ATTORNEY

67.     The  board may from  time to time and at  anytime  by power of  attorney  appoint  any
        company,  firm or person or body of persons,  whether nominated directly or indirectly
        by the board,  to be the attorney or  attorneys  of the Company for such  purposes and
        with such  powers,  authorities  and  discretion  (not  exceeding  those  vested in or
        exercisable  by the board  under  these  Articles)  and for such period and subject to
        such  conditions  as they may think fit,  and any such powers of attorney  may contain
        such  provisions for the protection and  convenience of persons  dealing with any such
        attorney  as the  board  may think fit and may also  authorize  any such  attorney  to
        delegate all or any of the powers, authorities and discretion vested in him.

                                   RESTRICTED TRANSACTIONS

68.     Until the occurrence of the  Re-designation  Date, the following actions  ("Restricted
        Transactions")  shall not be taken  without the separate  approval of the  Independent
        Directors:

        (a)    any  amendment  to these  Articles  or the  Memorandum  of  Association  of the
               Company,  the articles of  association  or the Memorandum of Association of any
               subsidiary of the Company or to the  arrangements  provided for in Section 14.2
               of the Heads of  .Agreement  dated  August  18,  1993,  with Sun  International
               Investments  Limited and the Government of the  Commonwealth  of The Bahamas if
               such  amendment  could  reasonably be expected to have an adverse effect on the
               Series A Put or the rights of the holders of Series A Ordinary Shares;

        (b)    any merger or  consolidation  involving  the Company  any sale,  lease or other
               direct or indirect  disposition  of all or  substantially  all of the assets of
               the  Company  and its  subsidiaries  in a  transaction  or  series  of  related
               transactions  that could  reasonably  be expected to have an adverse  effect on
               the  Series A Put or the  rights of the  holders  of Series A  Ordinary  Shares
               (and,  in the case of any  merger or  consolidation  that  would  result in the
               holders  of  Series A  Ordinary  Shares no longer  having  an  interest  in the
               Company  (or the  resulting  entity,  successor  or  acquiror),  it  shall be a
               condition to the  consummation of such  transaction that the Company shall have
               obtained  at  its  own  expense  an  opinion  rendered  by  an  internationally
               recognized  investment  banking firm selected by the Independent  Directors and
               engaged by the  Company,  to the effect  that such  transaction  is fair to the
               holders of the Series A Ordinary Shares);

        (c)    any material  transaction  with Sun  International  Investments  Limited or any
               affiliate  of  Sun  International   Investments   Limited,   including  without
               limitation  arrangements  (or any  material  amendment  thereto)  with any such
               affiliate for management of the properties of the Company or its subsidiaries;

        (d)    any  declaration  or payment of  dividends  or other  distributions  on or with
               respect to the Ordinary  Shares during any fiscal quarter of the Company (i) in
               cash if in an amount  exceeding,  in the  aggregate  with any  other  dividends
               since  the  date  these  Articles  were  adopted,  one-half  of  the  Company's
               cumulative aggregate,  consolidated net income since such date, plus the amount
               of  all  depreciation,   amortization,  and  other  non-cash  charges  deducted
               therefrom  during  such  period  and minus the  amount of all  ordinary  course
               capital  expenditures  other than  expenditures  in  respect  of  improvements,
               upgrading or  construction  of or relating to  properties of the Company or its
               subsidiaries  during such  period or (ii) in  property  other than cash if such
               property, in the aggregate, has a fair market value in excess of $100,000;

        (e)    any  incurrence  or  assumption  of liability (by way of guaranty or otherwise)
               for  indebtedness  for borrowed money or any issuance of non-voting  Preference
               Shares  if  as  a  result  thereof  the  aggregate   principal  amount  of  all
               interest-bearing  indebtedness  for borrowed money of the Company together with
               the greater of the redemption price,  liquidation value or nominal value of all
               Preference  Shares then outstanding or proposed to be issued would at such time
               exceed $150,000,000 plus an amount equal to (i) the cumulated  consolidated net
               income, net of any consolidated loss, of the Company plus (ii) the net proceeds
               to the Company or its subsidiaries of any offering of equity  securities of the
               Company or its subsidiaries,  minus (iii) the aggregate amount of all dividends
               paid on shares  other than  Preference  Shares by the  Company in cash or other
               property, in each case since the date of the Company's  incorporation  through'
               the date of the incurrence or assumption of such  indebtedness  or the issuance
               of such Preference Shares;

        (f)    any   filing  or   approval   for   filing  or   undertaking   any   bankruptcy
               reorganization, re-capitalization, liquidation or dissolution of the Company;

(g)     any issuance of Series A Ordinary  Shares other than Series A Ordinary  Shares  issued
               fully  paid at a cash  price per share of not less than the  greater of (i) the
               then  prevailing  Purchase  Price (as defined in Article 19) or (ii) the Market
               Price  prevailing on the date of such issuance less customary  amounts,  not to
               exceed 3% of the then  prevailing  Market  Price,  in respect  of  underwriting
               discounts or other reductions (and, in addition to the foregoing  restrictions,
               no Series A Ordinary  Shares shall be issued without the prior written  consent
               of the  holders  of a  majority  of the  then  outstanding  Series  B  Ordinary
               Shares).  For the purposes of this Article  68(g),  "Market  Price" means,  for
               any given day, the last  reported per share sale price (or, if no sale price is
               reported,  the average of the bid and ask prices or, if more than one in either
               case,  the  average of the  closing  bid and closing ask prices) on such day of
               the  Series  A  Ordinary  Shares  as  quoted  on the  National  Association  of
               Securities Dealers Automated  Quotation System or, if not so quoted, on the New
               York Stock  Exchange or, in the event  Series A Ordinary  Shares are not listed
               on the New York Stock  Exchange,  such other  national or  regional  securities
               exchange upon which the Series A Ordinary Shares are listed,  or, if the Series
               A  Ordinary  Shares  are  not  listed  on a  national  or  regional  securities
               exchange,  as quoted by the  National  Quotation  Bureau  Incorporated.  In the
               absence  of one or more such  quotations,  the  Company  shall be  entitled  to
               determine  the Market  Price on the basis of such  quotations  as it may in its
               reasonable opinion consider appropriate;

        (h)    any  issuance  of  Series  B  Ordinary  Shares  (other  than a  Special  Public
               Offering)  or voting  Preference  Shares  (and,  in addition  to the  foregoing
               restriction,  no Series B Ordinary Shares or voting  Preference Shares shall be
               issued  without the prior  written  consent of the holders of a majority of the
               then outstanding Series B Ordinary Shares);

        (i)    any repurchase by the Company or any of its  subsidiaries  of Series B Ordinary
               Shares; or

        (j)    any  consent  or  approval  of  action  proposed  to be  taken  by  any  of the
               subsidiaries  of  the  Company  if:  (i)  such  proposed  action  is of a  type
               substantially  the  same as any of the  actions  described  in  paragraphs  (a)
               through  and  including  (i)  above and (ii) the  articles  of  association  or
               equivalent charter documents of such subsidiaries  provide that the adoption of
               such  proposed  action  requires  the  consent or  approval,  authorization  or
               approval of the shareholders of such subsidiaries.

                                 SPECIAL GOVERNANCE AFTER THE
                                      REDESIGNATION DATE

68.1.   Beginning  from the  Re-designation  Date and ending on May 5, 1999, the Company shall
        have at least two directors who would  qualify as  independent  under the rules of the
        Nasdaq Stock Market (the "Nasdaq  Directors").  Beginning from the Re-designation Date
        and  ending  on May 5,  1999,  the  following  actions  may not be taken  without  the
        approval  of 50%  of  the  Nasdaq  Directors;  provided,  however,  that  the  actions
        contemplated  by  paragraph  (b)  below may not be taken  without  the  approval  of a
        majority of the Nasdaq Directors:

        (a)    any merger or  consolidation  involving the Company or any sale, lease or other
               direct or indirect  disposition  of all or  substantially  all of the assets of
               the  Company  and its  subsidiaries  in a  transaction  or  series  of  related
               transactions  that could  reasonably  be expected to have an adverse  effect on
               the  rights of holders of  Ordinary  Shares  (other  than SIIL  and/or  persons
               affiliated  with SIIL) and,  in the case of any  merger or  consolidation  that
               would result in the holders of Ordinary  Shares (other than SIIL and/or persons
               affiliated  with SIIL) no longer  having an  interest  in the  Company  (or the
               resulting  entity,  successor  or  acquiror),  it shall be a  condition  to the
               consummation  of such  transaction  that the Company shall have obtained at its
               own expense an opinion  rendered by an  internationally  recognized  investment
               banking firm selected by the Nasdaq  Directors  and engaged by the Company,  to
               the effect that such  transaction is fair to the holders of the Ordinary Shares
               (other than SIIL and/or persons affiliated with SIIL);

        (b)    any material  transaction  with SIIL or any  affiliate  thereof,  including any
               issuances of securities and  arrangements (or any material  amendment  thereto)
               with any such affiliate for management of the Company's properties;

        (c)    any  filing  or   approval   for   filing  or   undertaking   any   bankruptcy,
               reorganization, recapitalization, liquidation or dissolution of the Company;

        (d)    any  repurchase  by the  Company  or any of its  subsidiaries  of any  Ordinary
               Shares held by SIIL or any of its affiliates; or

        (e)    any  consent  or  approval  of  action  proposed  to be  taken  by  any  of the
               subsidiaries  of  the  Company  if:  (i)  such  proposed  action  is of a  type
               substantially  the  same as any of the  actions  described  in  paragraphs  (a)
               through  and  including  (d)  above and (ii) the  articles  of  association  or
               equivalent charter documents of such subsidiaries  provide that the adoption of
               such  proposed  action  requires  the  consent or  approval,  authorization  or
               approval of the shareholders of such subsidiaries.

                                           THE SEAL

69.     The  seal  of the  Company  shall  not be  affixed  to any  instrument  except  by the
        authority  of a  resolution  of the  directors,  and in the  presence  of at least two
        directors  and of the  secretary or such other person as the directors may appoint for
        the purpose;  and those two directors and secretary or other person as aforesaid shall
        sign  every  instrument  to  which  the seal of the  Company  is so  affixed  in their
        presence.

                                    DIVIDENDS AND RESERVE

70.     Subject to Article 68, the board may from time to time  declare and pay to the members
        of the Company such quarterly  dividends as appear to the directors to be justified by
        the profits of the Company.

71.     No dividend shall be paid  otherwise than out of profits or surplus  available for the
        purpose in accordance with the International Business Companies Act.

72.     The directors may, before  recommending any dividend,  set aside out of the profits of
        the Company  such sums as they think proper as a reserve or reserves  which shall,  at
        the  discretion of the  directors,  be  applicable  for meeting  contingencies  or for
        equalizing  dividends or for any other purpose to which the profits of the Company may
        be properly applied and pending such  application may, at the like discretion,  either
        be employed in the business of the Company or be invested in such  investments  (other
        than shares of the Company), as the directors may from time to time think fit.

73.     Where  several  persons are  registered  as joint holders of any share any one of them
        may give effectual receipts for any dividend payable on the share.

74.     No dividend shall bear interest against the Company.


                                            ACCOUNTS

75.     The directors shall cause true accounts to be kept:

         (a)   of the sums of money  received  and  expended  by the Company and the matter in
               respect of which such receipt and expenditure takes place; and

         (b)   of the assets and liabilities of the Company.

76.     The books of account shall be kept at the registered  office of the Company or at such
        other  place or places  as the  directors  think  fit and shall  always be open to the
        inspection of the directors.

77.     The  directors  shall from time to time  determine  whether  and to what extent and at
        what times and places and under what  conditions or regulations the accounts and books
        of the  Company or any of them shall be open to the  inspection  of members  not being
        directors,  and no member  (not being a director)  shall have any right of  inspecting
        any  account or book or  document of the  Company  except as  conferred  by statute or
        authorized by the directors or by the Company in general meeting.

78.     Once at least in every year the  directors  shall lay  before  the  Company in general
        meeting a profit and loss  account for the period since the  preceding  account or (in
        the case of the first account) since the  incorporation  of the Company,  made up to a
        date not more than six months before such meeting.

79.     (1) A  balance-sheet  shall be made out in every year and laid  before the  Company in
        general meeting, made up to a date not more than six months before such meeting.

        (2) The  balance-sheet  shall be  accompanied by a report of the board as to the state
        of the  Company's  affairs and the amount  which they  recommend  to be paid by way of
        dividend and the amount, if any, which they propose to carry to a reserve fund.

80.     A copy of the balance-sheet and report shall,  seven days previous to the meeting,  be
        sent to the persons  entitled to receive notices of general  meetings in the manner in
        which notices are to be given hereunder.

                                           NOTICES

81.     (1) A  notice  may be given by the  Company  to any  member  either  personally  or by
        sending it by post to him to his registered address.

        (2)  Where a notice  is sent by post,  service  of the  notice  shall be  deemed to be
        effected by properly  addressing,  pre-paying  and posting a letter (by air-mail if to
        an address  outside  the  country  from which it is sent)  containing  the notice and,
        unless the  contrary is proved,  to have been  effected  three days after  posting (or
        seven days if sent to an address outside the country from which it is sent).

82.     A notice  may be given by the  Company  to the joint  holders of a share by giving the
        notice to the joint holder named first in the register in respect of the share.

83.     A  notice  may be  given  by the  Company  to  the  persons  entitled  to a  share  in
        consequence  of the death or  bankruptcy of a member by sending it through the post in
        a prepaid letter addressed to them by name or by the title of  representatives  of the
        deceased or trustees of the bankrupt,  or by any like description,  at the address, if
        any,  supplied for the purpose by the persons  claiming to be so  entitled,  or (until
        such an address  has been so  supplied)  by giving the notice in any manner in which
        the same might have been given if the death or bankruptcy has not occurred.

84.     Notice of every general meeting shall be given in some manner hereinbefore  authorized
        to  the  members  of  the  Company,  including  any  person  entitled  to a  share  in
        consequence  of the  death  or  bankruptcy  of a  member,  who,  but for his  death or
        bankruptcy,  would be entitled to receive notice of the meeting and to every director.
        No other persons shall be entitled to receive notices of general meetings.


                                            INDEMNITY

85.     The Company shall,  subject to the provisions of Article 89,  indemnify to the fullest
        extent permitted by the International  Business Companies Act any person who was or is
        a party or is  threatened to be made a party to any  threatened,  pending or completed
        action, suit or proceeding,  whether civil, criminal,  administrative or investigative
        and  whether  external  or internal to the Company by reason of the fact that he is or
        was a director or officer of the  Company,  or is or was serving at the request of the
        Company as a director or officer of another corporation,  partnership,  joint venture,
        trust or other enterprise,  against expenses (including  attorneys' fees),  judgments,
        fines and  amounts  paid in  settlement  actually  and  reasonably  incurred by him in
        connection  with such suit,  action or  proceeding  if he acted in good faith and in a
        manner which he  reasonably  believed to be in, or not opposed to, the best  interests
        of the  company,  and,  with  respect to any  criminal  action or  proceeding,  had no
        reasonable cause to believe that his conduct was unlawful.

86.     Subject to Article  89,  expenses  incurred  by a director  or officer in  defending a
        civil or criminal  action,  suit or proceeding shall be paid by the Company in advance
        of the final  disposition  of such  action,  suit or  proceeding  upon  receipt  of an
        undertaking  by or on behalf of the  director  or officer  to repay such  amount if it
        shall  ultimately  be  determined  that  he is not  entitled  under  Article  86 to be
        indemnified by the Company in respect of such expenses.

87.     The board  shall  from  time to time  cause  the  Company  to  purchase  and  maintain
        insurance  from reputable  insurance  carriers on behalf of any person who is or was a
        director  or  officer  of the  Company,  or is or was  serving  at the  request of the
        Company as a director or officer of another corporation,  partnership,  joint venture,
        trust or other enterprise,  against any liability asserted against him and incurred by
        him in any such capacity,  or arising out of his status as such with reasonable limits
        and subject to reasonable and customary deductibles,  for so long as such insurance is
        available from such carriers.

88.     The Company's  indemnification under Article 86 of any person who is or was a director
        or officer of the Company,  or is or was  serving,  at the request of the Company as a
        director  or officer of another  corporation,  partnership,  joint  venture,  trust or
        other enterprise,  shall be reduced by amounts such person receives as indemnification
        (i) under any  policy of  insurance  purchased  and  maintained  on his  behalf by the
        Company, (ii) from such other corporation,  partnership, joint venture, trust or other
        enterprise, or (iii) under any other applicable indemnification provision.

89.     (a)    It shall be a condition  of the  Company's  obligation  to indemnify or advance
               expenses,  under Articles 85 and 86 that the person asserting,  or proposing to
               assert,  the  right to be  indemnified,  promptly  after  receipt  of notice of
               commencement  of any action,  suit or proceeding in respect of which a claim or
               indemnification  is or is to be made against the Company  notify the Company of
               the  commencement  of such action,  suit or proceeding,  including  therewith a
               copy of all papers  served and the name of counsel  retained  or to be retained
               by such  person  in  connection  with  such  action,  suit or  proceeding,  and
               thereafter to keep the Company  timely and fully  apprised of all  developments
               and  proceedings in connection  with such action,  suit or proceeding or as the
               Company shall request;  and the fees and expenses of any counsel  retained by a
               person  asserting  or proposing to assert,  the right to be  indemnified  under
               Article 85 shall be at the expense of such person  unless the counsel  retained
               shall have been approved by the Company in writing,  which  approval  shall not
               be unreasonably withheld.

        (b)    If a claim for  indemnification  or  advancement  of expenses under Articles 85
               and 86 is not paid in full by the Company  within  forty five (45) days after a
               written claim  therefor has been  received by the Company,  the claimant may at
               any time  thereafter  bring suit  against  the  Company  to recover  the unpaid
               amount of the claim and, if successful in whole or in part,  the claimant shall
               be entitled to be paid also the expenses of prosecuting such claim.

90.     To the fullest  extent  permitted by the  International  Companies Act as it exists on
        the date  hereof or as it may  hereafter  be  amended,  no  director or officer of the
        Company  shall be liable to the Company or its members for  monetary or other  damages
        for breach of fiduciary duty as a director or officer.

91.     The  provisions  of Articles 85 to 90 shall  continue as to, and for the benefit of, a
        person who has ceased to be a director  or officer  and shall  inure to the benefit of
        the heirs, executors and administrators of such a person.

92.     No  amendment  to or repeal of the  provisions  of Articles 85 to 91 shall apply to or
        have  any  effect  on  the  eligibility   for,  or  entitlement  to,   indemnification
        advancement  of expenses  and the other rights  provided  by, or granted  pursuant to,
        Articles  85 to 91 for or with  respect to any acts or  omissions  of any  director or
        officer occurring prior to any such amendment or repeal.

                                     NEW JERSEY COMPLIANCE

93A.    The  securities as (defined in the New Jersey Casino Control Act,  N.F.S.A.  5:12-1 et
        seq.)  (hereinafter  referred to (the "Act") of the  Company  shall  always be subject
        to  redemption  by the  company,  by  action  of the  Board of  Directors,  if, in the
        judgment  of the Board of  Directors,  such  action  should be taken,  pursuant to the
        International  Business  Companies Act of 2000 of the  Commonwealth  of The Bahamas or
        any other applicable  provision of law, to the extent necessary to prevent the loss or
        secure the  reinstatement  of any  government-issued  license or franchise held by the
        Company or any Subsidiary






        (as defined in Paragraph E of this  Article) to conduct any portion of the business of
        the Company or such  Subsidiary,  which license or franchise is conditioned  upon some
        or  all  of  the   holders  of  the   Company's   securities   possessing   prescribed
        qualifications.  In the event a holder  of the  Company's  securities  is found not to
        possess  such  prescribed  qualifications  by the  Commission  pursuant  to the Act (a
        "Disqualified  Holder"),  such Disqualified Holder shall indemnify the Company for any
        and all direct or indirect costs,  including  attorney's fees, incurred by the Company
        as a result of such holder's continuing ownership or failure to divest promptly.

   B.   Except as is otherwise  expressly provided in instruments  containing the terms of the
        Company's securities,  which instruments have been approved by the Commission, so long
        as the Company shall remain a publicly  traded holding  company as defined in the Act,
        in  accordance  with  N.J.S.A.  5:12-82(d)(7)  and (9), all  securities of the Company
        shall be held  subject  to the  condition  that if a holder  thereof  is found to be a
        Disqualified  Holder,  such holder shall dispose of his interest in the Company within
        120 days following the Company's  receipt of notice (the "Notice Day") of the holder's
        disqualification.  Promptly  following its receipt of notice from the Commission  that
        a holder of securities of the Company has been found  disqualified,  the Company shall
        either deliver such written notice personally to the Disqualified  Holder,  mail it to
        such Disqualified  Holder at the address shown on the Company's books and records,  or
        use any other  reasonable  means to provide notice.  Failure of the Company to provide
        notice to a  Disqualified  Holder after making  reasonable  efforts to do so shall not
        preclude the Company from exercising its rights.

        If any Disqualified  Holder fails to dispose of his securities  within 120 days of the
        Notice Date,  the Company may redeem such  securities  at the lesser of (i) the lowest
        closing  sale price of such  securities  between the Notice Date and the date 120 days
        after the Notice Date, or (ii) such holder's original purchase price.

   C.   If the Company shall become a  privately-held  holding  company as defined in the Act,
        in accordance  with N.J.S.A.  5:12-82(d)(7),  (8) and (10), the Commission  shall have
        the right of prior approval with regard to transfer of securities,  shares,  and other
        interests in the Company and the Company  shall have the  absolute  right to redeem at
        the market price or purchase price,  whichever is the lesser,  any security,  share or
        other interest in the Company in accordance with the Act.

   D.   So long as the  Company  shall  remain a holding  company as  defined  in the Act,  in
        accordance with N.J.S.A.  5:12-105 (e),  commencing on the date the Commission  serves
        notice on the Company that a security holder has been found disqualified,  it shall be
        unlawful for the Disqualified  Holder to (i) receive any dividend or interest upon any
        such  securities  of the  Company  held by such  holder;  (ii)  exercise,  directly or
        through any trustee or  nominee,  any right  conferred  by such  securities;  or (iii)
        receive any  remuneration  in any form, for services  rendered or otherwise,  from any
        Subsidiary of the Company that holds a casino license.


   E.   For purposes of this Article,  the term "Subsidiary"  shall have the meaning set forth
        in N.J.S.A. 5:12-47."


                                           ADOPTED

                                    26th DAY OF JUNE, 2001

EX-4.6

                                                                              [EXECUTION COPY]



                               SECOND AMENDMENT TO THIRD AMENDED
                                 AND RESTATED CREDIT AGREEMENT

        THIS SECOND AMENDMENT, dated as of January 26, 2001 (this "Amendment"), to the Third
                                                                   ---------
Amended and Restated Credit Agreement, is among SUN INTERNATIONAL HOTELS LIMITED, SUN
INTERNATIONAL BAHAMAS LIMITED, RESORTS INTERNATIONAL HOTEL, INC. and SUN INTERNATIONAL
NEVADA, INC. (collectively, the "Borrowers"), and the Lenders (as defined below) signatories
                                 ---------
hereto.


                                     W I T N E S S E T H:
                                     - - - - - - - - - -

        WHEREAS, the Borrowers, certain financial institutions from time to time parties
thereto (collectively, the "Lenders"), The Bank of Nova Scotia and Societe Generale, as the
                            -------
Co-Syndication Agents and the Managing Agents, the Co-Agents parties thereto and The Bank of
Nova Scotia, as the Documentation Agent, the Administrative Agent and the Collateral Agent
are parties to the Third Amended and Restated Credit Agreement, dated as of November 1, 1999
(as amended by the First Amendment thereto, dated as of June 13, 2000, and as further
amended, supplemented, amended and restated or otherwise modified through the date hereof,
the "Existing Credit Agreement");
     -------------------------

        WHEREAS, the Borrowers have requested that the Lenders amend the Existing Credit
Agreement as set forth below; and

        WHEREAS, the Lenders have agreed, subject to the terms and conditions hereinafter set
forth, to amend the Existing Credit Agreement in certain respects (the Existing Credit
Agreement, as so amended or otherwise modified by this Amendment, being referred to as the
"Credit Agreement");
- -----------------

        NOW, THEREFORE, the parties hereto agree as follows.


                                            PART I
                                          DEFINITIONS

        SUBPART 1.1.  Certain Definitions.  The following terms (whether or not underscored)
                      -------------------
when used in this Amendment shall have the following meanings (such meanings to be equally
applicable to the singular and plural forms thereof):










        "Amendment" is defined in the preamble.
         ---------                    --------

        "Credit Agreement" is defined in the third recital.
         ----------------                    -------------

        "Existing Credit Agreement" is defined in the first recital.
         -------------------------                    -------------

        "Second Amendment Effective Date" is defined in Subpart 4.1.
         -------------------------------                -----------

        SUBPART 1.2.  Other Definitions.  Terms for which meanings are provided in the
                      -----------------
Existing Credit Agreement are, unless otherwise defined herein or the context otherwise
requires, used in this Amendment with such meanings.


                                           PART II
                                          AMENDMENTS

        Effective on (and subject to the occurrence of) the Second Amendment Effective Date,
the Existing Credit Agreement is hereby amended in accordance with this Part; except as so
amended or otherwise modified by this Amendment, the Existing Credit Agreement and the Loan
Documents shall continue in full force and effect in accordance with their terms.

        SUBPART 2.1.  Amendments to Article I.  Article I of the Existing Credit Agreement is
                      -----------------------
hereby amended in accordance with Subparts 2.1.1 and 2.1.2.
                                  --------------     -----

        SUBPART 2.1.1.  Section 1.1 of the Existing Credit Agreement is hereby amended by
inserting the following definitions in the appropriate alphabetical order:

               "Dollar Equivalent" means, on any date of determination, the equivalent in
                -----------------
        Dollars of any Foreign Currency, determined by using the quoted spot rate at which
        the Administrative Agent's principal office in New York, New York offers to exchange
        Dollars for such Foreign Currency at the opening of business on such date.

               "Euro" means the single currency of Participating Member States of the
                ----
        European Union.

               "Foreign Currency" means Euros, French Francs, Pounds Sterling and any
                ----------------
        additional currency, other than Dollars, that is freely transferable, convertible
        into Dollars and approved by the Administrative Agent and each Issuer (which approval
        shall not be unreasonably withheld).

               "Foreign Currency Letter of Credit" means any Letter of Credit or bank
                ---------------------------------
        guarantee denominated in a Foreign Currency.







               "Foreign Currency Letter of Credit Commitment Amount" means $3,000,000.
                ---------------------------------------------------

               "Foreign Currency Letter of Credit Outstandings" means any Letter of Credit
                ----------------------------------------------
        Outstandings in respect of Foreign Currency Letters of Credit.

               "French Francs" means the lawful currency of the French Republic.
                -------------

               "Participating Member State" means each state so described in any legislative
                --------------------------
        measures of the European Council for the introduction of, changeover to or operation
        of a single or unified European currency (whether known as the euro or otherwise),
        being in part the implementation of the third stage of economic and monetary union as
        contemplated in the Treaty of Rome of March 25, 1957, as amended by the Single
        European Act 1986 and the Maastricht Treaty (which was signed at Maastricht on
        February 7, 1992, and came into force on November 1, 1993), as amended from time to
        time.

               "Pounds Sterling" means the lawful currency of the United Kingdom of Great
                ---------------
        Britain and Northern Ireland.

               "Reset Date" is defined in Section 2.6.7.
                ----------                -------------

               "Resorts Disposition" means the Disposition of RIH (and consequently the
                -------------------
        Resorts Casino Hotel) and certain other assets in accordance with the terms of the
        Resorts Purchase Agreement.

               "Resorts Land Option Disposition" means the Disposition of the land adjacent
                -------------------------------
        to the Resorts Casino Hotel in accordance with the terms of the Option Agreement (as
        defined in the Resorts Purchase Agreement).

               "Resorts Purchase Agreement" means the Purchase Agreement, dated as of October
                --------------------------
        30, 2000, among Sun International North America, Inc., GGRI, Inc. and Colony RIH
        Acquisitions, Inc.

               "Second Amendment" means the Second Amendment, dated as of January 26, 2001,
                ----------------
        to this Agreement among the Borrowers and the Lenders parties thereto.

        SUBPART 2.1.2.  Section 1.1 of the Existing Credit Agreement is hereby further
amended as follows:

               (a)  by amending the definition of "Core Assets" in its entirety to read as
        follows:







                      "Core Assets" means (i) the Ocean Club on Paradise Island, The Bahamas,
                       -----------
               the Atlantis and the Atlantis Phase III, and the real property upon which the
               Ocean Club, the Atlantis and the Atlantis Phase III are (or will be) located,
               (ii) the real property upon which the Holiday Inn Pirate's Cove Hotel was
               located (and any current or future improvements thereon) and (iii) until the
               Resorts Disposition is consummated in accordance with the Resorts Purchase
               Agreement and clause (b) of Section 7.2.11, (A) the Resorts Casino Hotel and
                             ----------    --------------
               the real property upon which it is located, and (B) to the extent that any
               improvements have been made by SIHL or any of its Subsidiaries on such real
               property, the real property comprising the former site of the Chalfonte Hotel
               in New Jersey.

               (b)  by amending the definition of "Letter of Credit Outstandings" in its
        entirety to read as follows:

                      "Letter of Credit Outstandings" means, on any date, an amount equal to
                       -----------------------------
               the sum of

                             (a)  the then aggregate amount which is undrawn and available
                      under all issued and outstanding Letters of Credit (after converting
                      the aggregate Stated Amounts of all Foreign Currency Letters of Credit
                      to the Dollar Equivalents thereof),

               plus
               ----

                             (b)  the then aggregate amount of all unpaid and outstanding
                      Reimbursement Obligations (after converting the aggregate Reimbursement
                      Obligations with respect to Disbursements made in a Foreign Currency to
                      the Dollar Equivalents thereof) in respect of such Letters of Credit.

               (c)  the definition of "Net Income" is hereby amended by inserting "and (iii)
        any gain or loss (or write-down in anticipation of a loss) resulting from the Resorts
        Disposition and the Resorts Land Option Disposition" at the end of the proviso
        thereto.

        SUBPART 2.2.  Amendments to Article II.  Article II of the Existing Credit Agreement
                      ------------------------
is hereby amended in accordance with Subparts  2.2.1 and 2.2.2.
                                     ---------------     -----

        SUBPART 2.2.1.  Section 2.2.2 of the Existing Credit Agreement is hereby amended in
its entirety to read as follows:

               Section 2.2.2.  Mandatory.  The Commitment Amount shall be automatically and
                               ---------
        permanently reduced







                      (a)  (i) if the Resorts Disposition is consummated on or prior to
               August 12, 2001, on the date of such consummation in an amount equal to the
               Net Cash Proceeds (as such term is defined in the Existing Indenture) received
               by GGRI, Inc. or its Affiliates from the Resorts Disposition; or (ii) if the
               Resorts Disposition is not consummated on or prior to August 12, 2001, on
               August 12, 2001 in an aggregate amount equal to $125,000,000, to be applied
               pro rata with respect to each Lender's Commitment;
                   ----

                      (b)  on the date of the consummation of the Resorts Land Option
               Disposition in an amount equal to the Net Cash Proceeds (as such term is
               defined in the Existing Indenture) received by GGRI, Inc. or its Affiliates
               from the Resorts Land Option Disposition; and

                      (c)  on the date that is 300 days following the occurrence of an Asset
               Sale (excluding the Resorts Disposition and the Resorts Land Option
               Disposition), by the amount of the Net Cash Proceeds (as such terms are
               defined in the Existing Indenture) that would be required to be applied as the
               Asset Sale Offer Amount under the terms of the Existing Indenture.

        SUBPART 2.2.2.  Section 2.6 of the Existing Credit Agreement is hereby amended as
follows:

               (a)  by inserting the words "in Dollars or a Foreign Currency (provided, that
                                                                              --------
        the Dollar Equivalent of the aggregate amount of Foreign Currency Letters of Credit
        shall not exceed the Foreign Currency Letter of Credit Commitment Amount)"
        immediately following the word "Credit" appearing in the eleventh line thereof;

               (b)  by inserting the parenthetical "(in the currency in which such
        Disbursement was made)" immediately following the words "Letter of Credit" appearing
        in the ninth line of Section 2.6.2 of the Existing Credit Agreement;

               (c)  by inserting the words ", in the applicable currency or currencies,"
        immediately following the words "paid or disbursed" in clause (a) of Section 2.6.4 of
        the Existing Credit Agreement;

               (d)  by inserting the words ", and in the currency," immediately following the
        words "applicable Issuer for the amount" in clause (b) of Section 2.6.4 of the
        Existing Credit Agreement; and

               (e)  by inserting the following new sections immediately following Section
        2.6.5 of the Existing Credit Agreement:







                      SECTION 2.6.6.  Dollar Equivalent Determinations.  For purposes of
                                      --------------------------------
               determining the amount of Foreign Currency Letter of Credit Outstandings and
               for purposes of calculating fees payable under Section 3.3.2 with respect to
                                                              -------------
               Foreign Currency Letter of Credit Outstandings, the principal amount of such
               Foreign Currency Letter of Credit Outstandings shall be deemed to be, as of
               any date of determination, the Dollar Equivalent thereof at such date.  The
               initial Dollar Equivalent of any Foreign Currency Letter of Credit shall be
               determined by the Administrative Agent and/or the applicable Issuer, as the
               case may be, on the date of issuance thereof.  If a Disbursement is made by an
               Issuer under any Foreign Currency Letter of Credit, the Dollar Equivalent of
               such Disbursement shall be determined by such Issuer on the Disbursement Date
               related thereto, and such Issuer shall notify the Administrative Agent and the
               applicable Borrower promptly of such Dollar Equivalent.

                      SECTION 2.6.7.  Currency Fluctuation, etc.  Not later than 12:00 p.m.,
                                      -------------------------
               New York time, on each Quarterly Payment Date, the Administrative Agent shall
               determine the Dollar Equivalent as of such Quarterly Payment Date with respect
               to each Foreign Currency for which there are at such time outstanding Foreign
               Currency Letters of Credit or in respect thereof (after giving effect to any
               Loans to be made or repaid or Letters of Credit to be issued or Reimbursement
               Obligations to be repaid on such date).  The Dollar Equivalent so determined
               shall become effective on the first Business Day immediately following the
               relevant Quarterly Payment Date (a "Reset Date") and shall remain effective
                                                   ----------
               until the next succeeding Reset Date.

        SUBPART 2.3.  Amendment to Article III.  Article III of the Existing Credit Agreement
                      ------------------------
is hereby amended in accordance with Subparts 2.3.1. and 2.3.2.
                                     --------------      -----

        SUBPART 2.3.1.  Section 3.1 of the Existing Credit Agreement is hereby amended by
inserting the following new clause (d) therein immediately following clause (c) thereof:

               (d)  The Borrowers shall, on each Quarterly Payment Date, deliver cash
        collateral for Foreign Currency Letters of Credit in an amount equal to the excess,
        if any, of the Dollar Equivalent of all Foreign Currency Letter of Credit
        Outstandings over 105% of the Foreign Currency Letter of Credit Commitment Amount.

        SUBPART 2.3.2.  Section 3.3.2 of the Existing Credit Agreement is hereby amended in
its entirety to read as follows:







               Section 3.3.2.  Letter of Credit Fee.  SIHL agrees to pay to the
                               --------------------
        Administrative Agent, for the pro rata account of the Issuers and each other Lender,
                                      --- ----
        a Letter of Credit fee, in Dollars, in an amount equal to the then Applicable LIBO
        Rate Margin, multiplied by the average daily undrawn Stated Amount (or the Dollar
        Equivalent thereof with respect to Foreign Currency Letters of Credit) of all Letters
        of Credit outstanding during the applicable period, with such fees being payable
        quarterly in arrears on each Quarterly Payment Date (or more frequently if requested
        by the Administrative Agent).  SIHL further agrees to pay to the applicable Issuer an
        issuance fee in an amount, in Dollars, equal to the higher of (i) $100 (as such
        amount may be increased from time to time in accordance with such Issuer's standard
        charges for such services) and (ii) 1/4 of 1% per annum of the Stated Amount (or the
        Dollar Equivalent thereof with respect to Foreign Currency Letters of Credit) of the
        Letter of Credit issued by such Issuer thereof, with such fees being payable
        quarterly in arrears on each Quarterly Payment Date (or more frequently if requested
        by the Administrative Agent).

        SUBPART 2.4.  Amendment to Article VII.  Article VII of the Existing Credit Agreement
                      ------------------------
is hereby amended in accordance with Subparts 2.4.1 through 2.4.3.
                                     --------------         -----

        SUBPART 2.4.1.  Section 7.2.4 of the Existing Credit Agreement is hereby amended by
amending clause (b) thereof by deleting the number "$730,000,000" appearing in clause (i)
thereof and inserting "the greater of (x) $500,000,000 and (y) $730,000,000 less the amount
                                                                            ----
of the loss (or write-down in anticipation of a loss) associated with the Resorts
Disposition and the Resorts Land Option Disposition" in replacement therefor.

        SUBPART 2.4.2.  Section 7.2.11 of the Existing Credit Agreement is hereby amended as
follows:

               (a)  by amending clause (b) thereof in its entirety to read as follows:

                      (b)  such Disposition is the Resorts Disposition; provided, that (i)
                                                                        --------
               the consideration received by GGRI, Inc. or its Affiliates from the Resorts
               Disposition is no less than $125,000,000 in cash; (ii) the Net Cash Proceeds
               (as defined in the Existing Indenture) from the Resorts Disposition are
               applied to repay the Loans in accordance with clause (a) of Section 3.1; (iii)
                                                             ----------    -----------
               the Resorts Disposition is consummated on or prior to August 12, 2001; and
               (iv) the terms of the Resorts Disposition and all documents executed in
               connection therewith (including the Resorts Purchase Agreement) are in form
               and substance reasonably satisfactory to the Administrative Agent.

               (b)  by amending clause (c) thereof in its entirety to read as follows:

                      (c)  such Disposition is the Resorts Land Option Disposition; provided,
                                                                                    --------
               that (i) the consideration received by GGRI, Inc. or its Affiliates from the
               Resorts Land Option Disposition is no less than $40,000,000 in cash; (ii) the
               Net Cash Proceeds (as defined in the Existing Indenture) from the Resorts Land
               Option Disposition are applied to repay the Loans in accordance with clause
                                                                                    -------
               (a) of Section 3.1; and (iii) the terms of the Resorts Land Option Disposition
                      -----------
               and all documents executed in connection therewith are in form and substance
               reasonably satisfactory to the Administrative Agent.







        SUBPART 2.4.3.  Section 7.2.12 of the Existing Credit Agreement is hereby amended in
its entirety to read as follows:

               SECTION 7.2.12.  Modification of Certain Agreements.  SIHL will not, and will
                                ----------------------------------
        not permit any of its Subsidiaries to, agree to or, in the case of the Relinquishment
        Agreement, vote in favor of, any material amendment or other modification to the
        Relinquishment Agreement, the Omnibus Termination Agreement or the Resorts  Purchase
        Agreement, or (to the extent not restricted by law) permit the Relinquishment
        Agreement, the Omnibus Termination Agreement or the Resorts Purchase Agreement to be
        materially amended without, in the case of the Relinquishment Agreement and the
        Omnibus Termination Agreement, the prior written consent of the Required Lenders, or,
        in the case of the Resorts Purchase Agreement, the prior written consent of the
        Managing Agents, which may be withheld in the sole discretion of the Required Lenders
        or the Managing Agents, as applicable; it being acknowledged and agreed by the
        parties hereto that any amendment or other modification which would have the effect
        of (i) reducing any fees paid to SIHL or any Subsidiary under the Relinquishment
        Agreement, (ii) shortening the term of the Relinquishment Agreement or (iii) allowing
        the fees or other amounts payable under the Relinquishment Agreement to be paid to
        any Person or Persons other than TCA, SIHL or a Guarantor, shall, in each case, be
        deemed to be material.

        SUBPART 2.5.  Amendment to Article X.  Section 10.15 of the Existing Credit Agreement
                      ----------------------
is hereby amended by inserting the following sentence at the end thereof:

        "If, for the purpose of obtaining judgment in any court, it is necessary to convert a
        sum due under any Loan Document in another currency into Dollars or into a Foreign
        Currency, as the case may be, the parties hereto agree, to the fullest extent that
        they may effectively do so, that the rate of exchange used shall be that at which, in
        accordance with normal banking procedures, the applicable Secured Party could
        purchase such other currency with Dollars or with such Foreign Currency, as the case
        may be, in New York City, at the close of business on the Business Day immediately
        preceding the day on which final judgment is given, together with any premiums and
        costs of exchange payable in connection with such purchase."


                                           PART III
                                           CONSENT

        By their signatures hereto, the Lenders hereby consent to the release, upon the
consummation of the Resorts Disposition, of (a) RIH as a Borrower and as a Guarantor under
each of the Loan Documents and (b) any Liens on the capital stock of RIH or on any assets of
RIH granted pursuant to any Loan Document, and the Administrative Agent is hereby directed
to execute all documents and instruments reasonably required in connection therewith.







                                           PART IV
                                 CONDITIONS TO EFFECTIVENESS

        SUBPART 4.1.  Effectiveness.  This Amendment and the amendments contained herein
                      -------------
shall become effective on the date (the "Second Amendment Effective Date") when each of the
                                         -------------------------------
conditions set forth in this Part shall have been fulfilled to the satisfaction of the
Administrative Agent.

        SUBPART 4.1.1.  Execution of Counterparts.  The Administrative Agent shall have
                        -------------------------
received counterparts of this Amendment, duly executed and delivered on behalf of each
Borrower and the Lenders.

        SUBPART 4.1.2.  Legal Details, etc.  All documents executed or submitted pursuant
                        ------------------
hereto shall be satisfactory in form and substance to the Administrative Agent and its
counsel.  The Administrative Agent and its counsel shall have received all information and
such counterpart originals or such certified or other copies or such materials as the
Administrative Agent or its counsel may reasonably request, and all legal matters incident
to the transactions contemplated by this Amendment shall be satisfactory to the
Administrative Agent and its counsel.


                                            PART V
                        MISCELLANEOUS; REPRESENTATIONS AND WARRANTIES

        SUBPART 5.1.  Continuing Effectiveness, etc.  As amended hereby, the Credit Agreement
                      ------------------------------
shall remain in full force and effect and is hereby ratified and confirmed in all respects.
After the Second Amendment Effective Date, all references in the Credit Agreement and each
other Loan Document to the "Credit Agreement" shall refer to the Existing Credit Agreement,
after giving effect to this Amendment.

        SUBPART 5.2.  Counterparts.  This Amendment may be executed in any number of
                      ------------
counterparts and by the different parties on separate counterparts, and each such
counterpart shall be deemed to be an original but all such counterparts shall together
constitute one and the same Amendment.

        SUBPART 5.3.  Governing Law.  THIS AMENDMENT SHALL BE A CONTRACT MADE UNDER AND
                      -------------
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.







        SUBPART 5.4.  Representations and Warranties.  In order to induce the Lenders to
                      ------------------------------
execute and deliver this Amendment, the Borrowers represent and warrant to the Agents, the
Lenders and the Issuers that, after giving effect to the terms of this Amendment, the
following statements are true and correct: (a) the representations and warranties set forth
in Article VI of the Existing Credit Agreement and in the other Loan Documents are true and
correct in all material respects on the Second Amendment Effective Date (unless stated to
relate solely to an earlier date, in which case such representations and warranties were
true and correct in all material respects as of such earlier date); and (b) no Default has
occurred and is continuing, and neither SIHL nor any Subsidiary is in material violation of
any law or governmental regulation or court order or decree.







        IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and
delivered by their respective authorized officers as of the day and year first above written.


                                        SUN INTERNATIONAL BAHAMAS LIMITED

                                        By:_____________________________________
                                        Title:



                                        SUN INTERNATIONAL HOTELS LIMITED

                                        By:_____________________________________
                                        Title:



                                        RESORTS INTERNATIONAL HOTEL, INC.

                                        By:_____________________________________
                                        Title:



                                        SUN INTERNATIONAL NEVADA, INC.

                                        By:_____________________________________
                                        Title:



                                        THE BANK OF NOVA SCOTIA


                                        By:_____________________________________
                                        Title:








                                        SOCIETE GENERALE


                                        By:_____________________________________
                                        Title:



                                        BANKERS TRUST COMPANY


                                        By:_____________________________________
                                        Title:



                                        CIBC INC.


                                        By:_____________________________________
                                        Title:



                                        WELLS FARGO BANK,
                                        NATIONAL ASSOCIATION


                                        By:_____________________________________
                                        Title:



                                        ABN AMRO BANK N.V.


                                        By:_____________________________________
                                        Title:



                                        BEAR STEARNS CORPORATE LENDING INC.


                                        By:_____________________________________
                                        Title:








                                        CITY NATIONAL BANK OF FLORIDA


                                        By:_____________________________________
                                        Title:



                                        FLEET BANK, N.A.


                                        By:_____________________________________
                                        Title:



                                        THE ROYAL BANK OF SCOTLAND PLC


                                        By:_____________________________________
                                        Title:



                                        NEDCOR BANK LIMITED


                                        By:_____________________________________
                                        Title:


                                        By:_____________________________________
                                        Title:



                                        ABSA BANK LIMITED

                                        By:_____________________________________
                                        Title:

                                        By:_____________________________________
                                        Title:






                                        STANDARD BANK LONDON, LIMITED


                                        By:_____________________________________
                                        Title:


                                        By:_____________________________________
                                        Title:


                                        SUMMIT BANK


                                        By:_____________________________________
                                        Title:



                                        FLEET NATIONAL BANK


                                        By:_____________________________________
                                        Title:

EX-4.7

                                                                                EXECUTION COPY



                                DEVELOPMENT SERVICES AGREEMENT

        THIS DEVELOPMENT  SERVICES AGREEMENT  (hereinafter  referred to as the "Agreement") is
made as of he 20th day of  March,  2001 by and among the  Stockbridge-Munsee  Band of  Mohican
Indians of  Wisconsin,  a federally  recognized  Indian  tribe  (hereafter  referred to as the
"Tribe"),  the  Stockbridge-Munsee  Tribal Gaming Authority,  an instrumentality of the Tribe,
(hereinafter  referred  to as the  "Authority"),  Trading  Cove  New  York,  LLC,  a  Delaware
Limited Liability  Company  (hereinafter  referred to as the  "Developer"),  Sun International
North  America,  Inc.,  a  Delaware  corporation  (hereinafter  referred  to  as  "SINA")  and
Waterford Gaming Group,  LLC, a Delaware limited liability  company  (hereinafter  referred to
as  "Waterford").  SINA  and  Waterford  are  hereinafter  collectively  referred  to  as  the
"Developer Guarantors".

                                           RECITALS
                                           --------

        A. The Tribe is an Indian  Tribe  recognized  by the United  States of America  with a
reservation  located  in the State of  Wisconsin.  The Tribe  currently  owns and  operates  a
Class III gaming  facility,  as defined in the Indian Gaming  Regulatory Act ("IGRA"),  on its
reservation  in  Wisconsin.  The Tribe also has a land claim pending in the State of New York,
as articulated in the action entitled The  Stockbridge-Munsee  Community vs. The State of New
                                      --------------------------------------------------------
York,  et al.,  United  States  District  Court,  Northern  District  of New York,  Docket No.
- -------------
86-CV-1140 (the "Land Claim").

        B. The  Authority,  on behalf of the  Tribe,  intends to  develop  and  operate in the
State of New York a Class II and Class  III  gaming  facility  with  slot  machines  and table
games of size and scope to be agreed upon by the parties  (the  "Gaming  Facility"),  together
with appropriate  ancillary facilities including,  a luxury hotel with customary amenities,  a
convention/events  center,  food and beverage outlets,  retail facilities,  parking facilities
and other related  infrastructure,  and any modifications of the foregoing  elements agreed to
by the parties  during the Term of this Agreement (the  "Ancillary  Facilities").  (The Gaming
Facility and the Ancillary  Facilities and any  modifications  or additions  thereto  whenever
constructed  are  collectively  referred to herein as the  "Facility"  and/or the  "Project").
The Project shall be  constructed  on property to be acquired by the Tribe in the State of New
York in furtherance  of this Agreement (the  "Property") to be put in trust for the benefit of
the Tribe by the United  States of  America,  pursuant  to the  Tribe's  recognized  powers of
self-government  and the statutes and  ordinances of the Tribe.  The Property will be acquired
by the Tribe through the "best  interests"  provisions of IGRA and/or  through the  settlement
of its Land Claim under IGRA (25 U.S.C.§.2719(b)(1)(A) and (B), respectively).

        C. The  Authority  will operate the Project to improve the economic  conditions of the
Tribe's  members and in  accordance  with the Compact and related  agreements to be negotiated
by the Tribe with the State of New York.

        D.  Developer is a Delaware  limited  liability  company whose members  consist of the
Sun Cove New York,  Inc., a Delaware  corporation and Waterford  Development New York, LLC., a
Delaware limited liability  company.  The Developer,  through its members,  has experience and
expertise  related to real  estate  acquisitions,  financing,  development,  construction  and
operation of gaming  facilities and hotel resorts,  including  Native  American  Indian gaming
facilities  and  hotel  resorts.  The  Developer  has  the  requisite  skill,   resources  and
experience to perform its obligations under this Agreement

        E. The Tribe and the Developer entered into a Memorandum of Understanding  (the "MOU")
on August 15, 2000.

        F. Subject to the terms and conditions of this  Agreement,  the Developer will provide
to the Tribe and/or the  Authority:  (1)  assistance  in locating and  acquiring the Property,
including  certain funding towards the acquisition  cost of the Property,  (2) certain funding
of  development  costs  associated  with the Project,  (3) assistance in arranging bank and/or
bond financing (the "Senior  Financing",  as defined below),  (4) if necessary and required by
the Senior Lenders,  subordinated  debt financing (the "Junior  Financing",  as defined below)
and/or a completion  guarantee (the "Completion  Guarantee",  as defined below), (5) exclusive
development  services related to the Project and any expansion of the Project,  (6) assistance
with  settlement  of the  Tribe's  New  York  land  claim  and the  Tribe's  BIA fee to  trust
application,  (7) assistance in negotiating a local government  agreement,  and (8) assistance
with negotiation of the Compact, all as more particularly described in this Agreement.

        G. The Authority  desires to grant the Developer  the exclusive  right and  obligation
to provide  development  services  in  respect  of the  design,  construction,  equipping  and
opening of the Project upon the terms and conditions set forth herein.

        H. It is the intent of the parties  that nothing in this  Agreement or the  "Financing
Agreements" (as  hereinafter  defined) shall place at risk any asset of a Tribal member or the
Tribe's  assets  located in the State of Wisconsin  or any  property or assets  located in the
State of New York which are  unrelated  to the  Project and this  Agreement  (or any income or
other funds generated from such assets).

        I.   The  Developer  Guarantors  join  in  this  Agreement  for the  sole  purpose  of
guaranteeing Developer's obligations as provided for in Section 13.21 of this Agreement.

        NOW  THEREFORE,  in  consideration  of the mutual  covenants,  conditions and promises
herein  contained,  the  receipt  and  sufficiency  of  which  hereby  are  acknowledged,  the
Authority, the Tribe and the Developer agree as follows:









                                          ARTICLE 1

                                     CERTAIN DEFINITIONS

        1.1    Definitions.  Capitalized  terms used in this Agreement shall have the meanings
               -----------
set forth below:

        "Affiliate"  means,  with respect to the Person in question,  any Person  controlling,
controlled by or under common control with, such Person.  For the purposes  hereof,  "control"
means the  possession,  directly or indirectly,  or the power to direct or cause the direction
of the management or policies of the Person in question.

        "Affiliate Transactions" has the meaning set forth in Section 10.2 below.

        "Agreement"  shall have the meaning  ascribed to it in the first paragraph  hereof and
means  this  Agreement  including,   without  limitation,  the  Recitals,  together  with  the
Exhibits,  each of which is  incorporated  herein  and made a part  hereof,  all as amended in
accordance with the terms hereof.

        "Ancillary Facilities" has the meaning set forth in Recital B hereof.

        "Architect"  means, as applicable from time to time, the Design  Architect  and/or the
Architect of Record for the Project engaged pursuant to Section 4.2 below.

        "Architect of Record" means the Architect  selected by the Developer and the Authority
for the Project which Architect shall be licensed to practice by the State of New York.

        "Authority"  means  the  Stockbridge-Munsee  Tribal  Gaming  Authority,  or any  other
instrumentality  of the Tribe with the authority to exercise the proprietary  authority of the
Tribe over the gaming  and/or  non-gaming  facilities  located on the  Property in  accordance
with the  Stockbridge-Munsee  Tribal Constitution,  the Tribe's Gaming Ordinance,  the Tribe's
ordinance  establishing the Authority,  the Compact,  the IGRA or other applicable law, or any
successor and assignee thereto.

        "Average  Gaming Facility  Revenues" means the average monthly  Revenues of the Gaming
Facility for the twelve (12) months ending with (and  including) the month  immediately  prior
to the month in which a Casualty Event occurs.

        "Budget" means the Project Budget.

        "Bureau of Indian  Affairs" or "BIA" is the Bureau of Indian Affairs of the Department
of the Interior of the United States of America.

        "Business Board" means the committee formed pursuant to Section 2.2 below.

        "Capital  Lease  Obligation"  means,  at the time any  determination  thereof is to be
made,  the amount of the  liability  in respect of a capital  lease that would at such time be
required to be capitalized on a balance sheet prepared in accordance with GAAP.

        "Casualty Event" means any casualty,  event or occurrence that destroys or damages the
Gaming Facility.

        "Class II Gaming" means Class II Gaming as that term is defined in IGRA.

        "Class III Gaming" means Class III Gaming as that term is defined in IGRA.

        "Compact" means the tribal-state  Compact to be entered into between the Tribe and the
State of New York  pursuant  to the IGRA,  as the same may be  amended  from time to time,  or
such other Compact as may be substituted therefor.

        "Comparative Month" has the meaning set forth in Section 9.1(f) below.

        "Completion  Date" means the date upon which the Authority  receives,  with respect to
each Phase of the Project:  (i) a  certificate  from the  Architect,  as required  pursuant to
the terms of the Architect's  agreement with the Authority,  certifying that the Project Phase
has been  substantially  completed in accordance  with the Plans and  Specifications  therefor
and all  applicable  building,  life/safety,  environmental  and  other  laws and  regulations
applicable to the design and  construction of the Project Phase;  (ii) a certificate  from the
Developer stating that it has completed all of its obligations  hereunder;  (iii) certificates
of such  governmental  authorities,  professional  designers,  inspectors  or  consultants  or
opinions of counsel as the  Authority  reasonably  may determine to be  appropriate  verifying
completion  of the  Project  Phase in  compliance  with all Legal  Requirements;  and (iv) the
Project Phase is fully  stocked,  staffed  (including,  without  limitation,  compliance  with
Section 8.6 below) and ready to open to the public for business.

        "Completion Guarantee" has the meaning set forth in Section 6.3 below.

        "Concept Design" has the meaning set forth in Section 4.4 below.

        "Contract Documents" has the meaning set forth in Section 5.4 below.

        "Contractors" has the meaning set forth in Section 5.1 below.

        "Construction  Financing"  means the financing to be obtained by, and/or committed to,
the Authority  sufficient,  as reasonably  determined  by the  Authority,  for the purposes of
acquiring the Property, and the design, construction, equipping and staffing of the Project.

        "Construction Manager" means the professional employed pursuant to Section 5.1 below.

        "Design  Architect"  shall  mean  the  Designer  selected  by the  Developer  and  the
Authority to design the Project.

        "Design  Consultants"  shall  mean  the  Architect  and the  Engineer  and  the  other
consultants selected by the Developer and the Authority to design the Project.

        "Design Development Documents" has the meaning set forth in Section 4.6 below.

        "Developer" has the meaning set forth in the introductory paragraph hereof.

        "Developer Fee" has the meaning set forth in Section 9.1 below.

        "Developer's Financial Assistance" has the meaning set forth in Section 6.4 below.

        "Director  of  Regulation"  means the director of gaming  operations  appointed by the
Authority pursuant to the Tribe's Gaming Ordinance.

        "Effective  Date" means the later of (a) the date the Authority  receives all Required
Approvals  with  respect  to  this  Agreement,  or (b)  closing  of the  financing  under  the
Financing Agreements.

        "Engineers"  means  professionals  selected by the  Developer and Authority to provide
services related to the engineering of the Project.

        "Exhibits" means the exhibits attached to this Agreement.

        "Facility" or "Facilities" means the Gaming Facility and the Ancillary Facilities,  as
such may be  modified,  expanded,  replaced,  or  reconstructed  following a casualty  loss in
whole or in part.

        "Financing Agreements" has the meaning set forth in Section 6.1 below.

        "Fiscal Year" means any fiscal year of the Authority.

        "Fiscal Quarter" means any fiscal quarter of the Authority.

        "Fiscal Month" means any fiscal month of the Authority.

        "Force Majeure  Causes" means causes beyond the reasonable  control of a party to this
Agreement,  including  casualties,  war,  insurrection,  strikes,  lockouts  and  governmental
actions,  excluding  governmental  actions of the Tribe or any  instrumentality  of the Tribe,
including the  Authority,  and causes which can be controlled by the  expenditure  of money in
accordance with good business practices.

        "GAAP" means 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  have  been  approved  by a
significant segment of the accounting profession.

        "Gaming" means any and all activities  defined as Class II Gaming and Class III Gaming
under the IGRA or  authorized  under the Compact or any other  agreement  entered  into by the
Tribe or the Authority with the State of New York.

        "Gaming Disputes Court" has the meaning set forth in Section 7.3 below.

        "Gaming Facility" has the meaning set forth in Recital B hereof.

        "Gross  Gaming  Revenue"  shall mean the net win from Gaming  which is the  difference
between Gaming wins and losses before deducting  promotional  allowances,  costs and expenses,
determined in accordance with GAAP consistently applied.

        "Guarantee"  means a guaranty,  direct or indirect,  in any manner, of all or any part
of any indebtedness or obligations of another Person.

        "Hedging  Obligations"  means,  with respect to any Person,  the  obligations  of such
Person under (a) interest  rate swap  agreements,  interest rate cap  agreements  and interest
rate collar  agreements  and (b) other  agreements  or  arrangements  designed to protect such
Person against fluctuations in interest rates.

        "Indian  Gaming  Regulatory  Act" or "IGRA" means the Indian Gaming  Regulatory Act of
1988, 25 U.S.C. 2701, et seq., as amended from time to time.
                      ------

        "Indebtedness"  means,  with respect to any Person,  any  indebtedness of such Person,
whether  or not  contingent,  in respect  of  borrowed  money or  evidenced  by bonds,  notes,
debentures  or  similar  instruments  or letters of credit  (or  reimbursement  agreements  in
respect  thereof) or banker's  acceptances or  representing  Capital Lease  Obligations or the
balance  deferred  and  unpaid of the  purchase  price of any  property  or  representing  any
Hedging  Obligations,  except any such  balance  that  constitutes  accrued  expenses or trade
payables,  if and to the  extent  any of the  foregoing  (other  than  letters  of credit  and
Hedging  Obligations)  would  appear  as a  liability  upon a  balance  sheet  of such  Person
prepared in accordance with GAAP consistently applied.

        "Independent  Financial Advisor" means an accounting,  appraisal or investment banking
firm  of  nationally   recognized  standing  that  is,  in  the  reasonable  judgment  of  the
Authority,  (i)  qualified  to  perform  the task  for  which  it has  been  engaged  and (ii)
disinterested  and  independent  with  respect  to the  Authority  and each  Affiliate  of the
Authority.

        "Junior Financing" has the meaning set forth in Section 6.3 below.

        "Key  Personnel"  means  collectively  the  general  manager of the  Facility  and the
managers  of each  major  element  of the  Facilities  (or  the  equivalent  of the  foregoing
positions).

        "Land Claim" has the meaning set forth in Recital A hereof.

        "Legal   Requirements"   means   singularly  and  collectively  all  applicable  laws,
including,  without  limitation,  the Tribe's Gaming Ordinance,  all other laws or regulations
of the Tribe,  the IGRA,  the Compact and applicable  federal and New York statutes,  laws and
regulations, and local ordinances, codes and rules.

        "Master Plan" has the meaning set forth in Section 3.2.

        "Memorandum of Understanding" has the meaning set forth in Recital E hereof.

        "Minimum Priority  Distribution" means payments to the Tribe from the operation of the
Facilities in the annual amount of Twenty Four Million ($24,000,000.00) Dollars.

        "Monthly Financial Statement" has the meaning set forth in Section 9.1(b).

        "National  Indian  Gaming  Commission"  or  "NIGC"  means the  commission  established
pursuant to 25 U.S.C.§.2704.

        "Obligations"  means  any  principal,   interest,  penalty,  fees,   indemnifications,
reimbursements   and  other  liabilities  or  obligations   payable  under  the  documentation
governing any Indebtedness.

        "Officer's  Certificate"  means a certificate signed on behalf of the Authority by two
officers  of  the  Authority,  one of  whom  must  be the  principal  executive  officer,  the
principal  financial  officer,  the  treasurer  or the  principal  accounting  officer  of the
Authority.

        "Person" means any individual, sole proprietorship,  corporation, general partnership,
limited  partnership,  limited liability company or partnership,  joint venture,  association,
joint stock company, unincorporated association, instrumentality or other form of entity.

        "Phase" means a portion of the overall Project  development as set forth in the Master
Plan.

        "Plans  and  Specifications"  means  the  detailed  plans and  specifications  for the
construction of the Project prepared pursuant to Section 4.7 below.

        "Principal  Business"  means the Class II and Class III Gaming Facility (as such terms
are defined in IGRA) and resort  business  and any activity or business  incidental,  directly
related or similar  thereto,  or any  business or  activity  that is a  reasonable  extension,
development  or  expansion  thereof  or  ancillary  thereto,   including  any  hotel,  retail,
entertainment,  recreation  or other  activity or  business  designated  to  promote,  market,
support,  develop,  construct  or  enhance  the gaming and  resort  business  operated  by the
Authority at the Property.

        "Project" has the meaning set forth in Recital B hereof.

        "Project  Budget" means the budget  approved by the  Authority and the Developer  that
includes the estimated Project Cost.

        "Project  Cost" means:  all (1) costs of acquiring  the  Property  and  preparing  the
Property for  development  of the  Project,  including  costs and  expenses  for  professional
services  related  thereto;  (2)  costs  related  to  developing,   designing,   constructing,
equipping and  furnishing  the Project,  including,  costs related to  professional  services,
pre-opening  costs,  and initial  operating  capital;  (3) start up and operating costs of the
Authority until the Completion  Date; and (4) financing fees and expenses,  interest  payments
and any scheduled  principal payments,  prior to the Completion Date,  allocated in accordance
with GAAP, consistently applied.

        "Project Fund" has the meaning set forth in Section 6.1 below.

        "Project  Program"  has the  meaning  set forth in Section  4.5 below,  as modified in
accordance with the terms of this Agreement.

        "Project Schedule" has the meaning set forth in Section 4.5 below.

        "Promotional  Allowances"  means  the  retail  value  of hotel  accommodations,  food,
beverages,   merchandise,   chips,  tokens  and  other  services  provided  to  customers  for
promotional  purposes  without  charge  which  retail value is included in the Revenues of the
Facility.  For the  purposes  of this  definition,  "retail  value"  shall  mean the usual and
customary charge for such service or item under the then existing circumstances.

        "Property" has the meaning set forth in Recital B hereof, and any additions thereto.

        "Proposed Financing" means the anticipated financing for the Project.

        "Recitals"  means the language set forth in Subparagraphs A through I of the first two
pages of this Agreement, which Recitals are incorporated herein and made a part hereof.

        "Recommencement  Month" means,  following a Tolling Event, the earlier of the month in
which (i) the monthly  Revenues of the Gaming  Facility  equal or exceed ninety  percent (90%)
of the Average  Gaming  Facility  Revenues,  (ii) the date upon which the  Authority has fully
complied  with  the  requirements  set  forth in  Section  10.6  below  occurs,  or (iii)  the
Developer  delivers  written notice (which shall be  irrevocable  with respect to such Tolling
Event) to the  Authority  stating that the current  month shall be deemed the  "Recommencement
Month".

        "Required  Approvals"  means (1)  execution  and  approval  of the Compact and related
agreements  with the State of New York;  (2)  execution and approval of all  applicable  local
government  agreements;  (3) approval by the BIA and the final  governmental  authority of the
fee to trust  application;  (4) approval of this Agreement by the BIA, and/or the NIGC, to the
extent  those  agencies  determine  such  approval  may be required by law; (5) the entry of a
stipulated   declaratory   judgment  by  the  Tribal   Court   upholding   the   validity  and
enforceability  of this  Agreement  and  the  Financing  Agreements;  (6)  approval  of a land
settlement  agreement  by the  Federal  Courts  and the U.S.  Congress  (if  applicable);  (7)
approval  of  the  Senior  Financing  and  the  Junior  Financing  documents,  the  Completion
Guarantee,  the  Financing  Agreements  and any related  agreements  by the  Authority and any
other instrumentality of the Tribe having final approval authority.

        "Revenues"  means all revenues of any nature derived  directly or indirectly  from the
Project, including,  without limitations,  Gross Gaming Revenue, hotel revenues, room service,
catering,  food and  beverage  sales,  parking  revenues,  ticket  revenues  or other  fees or
receipts  from the  convention/events  center,  other rental or other  receipts  from lessees,
sublessees,  licensees  and  concessionaires  (but not the  gross  receipts  of such  lessees,
sublessees,  licensees  or  concessionaires)  but  excluding  (i) any  gratuities  or  service
charges added to a customer's  bill, (ii) any credits or refunds made to customers,  guests or
patrons,  (iii)  Promotional  Allowances  up to,  but not to  exceed,  eight  percent  (8%) of
Revenues, (iv) any sales, excise, gross receipt,  admission,  entertainment,  tourist or other
taxes or charges (or assessments  equivalent  thereto, or payments made in lieu thereof) which
are  received  from  patrons  and passed on to  governmental  or  quasi-governmental  entities
unrelated to the Tribe,  (v) any federal,  state or local taxes or impositions  that relate to
the  operation  of the  Facilities  (other  than any  payment or fee in lieu of taxes on Gross
Gaming Revenues or pursuant to any agreements  entered into by the Authority  and/or the Tribe
with such  entity),  which may be  implemented  from time to time,  (vi) any fire and extended
coverage  insurance  proceeds  other than for business  interruption,  (vii) any  condemnation
awards  other than for  temporary  condemnation,  and (viii) any  proceeds  of  financings  or
refinancings,  all as  determined  in  accordance  with GAAP,  consistently  applied.  For the
purposes hereof, all Revenues,  except Gross Gaming Revenues,  shall be computed and accounted
for at the  greater of actual  Revenue  received  or the usual and  customary  charge for such
service or item under the then existing circumstances.

        "Schematic Design Documents" has the meaning set forth in Section 4.5 below.

        "Senior Financing" has the meaning set forth in Section 6.2 below.

        "Senior Lenders" has the meaning set forth in Section 6.3 below.

        "Staffing Plan" has the meaning set forth in Section 8.6 below.

        "Term" has the meaning set forth in Section 9.2 below.

        "Tolling Event" means following a Casualty Event,  the failure of the monthly Revenues
of the Gaming  Facility to equal at least fifty percent (50%) of the Average  Gaming  Facility
Revenues for three (3) consecutive Fiscal Months.

        "Tolling Period" has the meaning set forth in Section 13.20 below.

        "Tribe"  means  the  Stockbridge-Munsee  Band  of  Mohican  Indians  of  Wisconsin,  a
federally recognized Indian tribe and its permitted successors and assigns.

        "Tribal Court" means the  Stockbridge-Munsee  Tribal Court established by an ordinance
of the  Stockbridge-Munsee  Tribal  Council and approved by the BIA as more fully set forth in
Chapter One, Stockbridge-Munsee Tribal Law, Tribal Court Code.

        "Tribe's Preference  Ordinance" means the Tribe's ordinance  concerning  preference in
hiring,  "Tribal  Laws,  Chapter  54," and any  replacements  thereof  or  amendments  thereto
adopted  from time to time,  and all related or  implementing  ordinances  and policies of the
Authority to give preference in recruiting and hiring of employees.

        "Tribe's  Gaming  Ordinance"  means the  Stockbridge-Munsee  Tribal  Gaming  Ordinance
enacted  pursuant  to  Section  7.4 of this  Agreement,  and any  replacements  or  amendments
thereto  adopted  from time to time,  and all related or  implementing  ordinances,  which are
enacted by the Tribe to authorize  and  regulate  gaming on the  Property in  accordance  with
IGRA and/or the Compact.

        "Quarterly Financial Statement" has the meaning set forth in Section 9.1(c) below.

        "Year-End Financial Statement" has the meaning set forth in Section 9.1(d) below.



                                          ARTICLE 2

                    RETENTION OF DEVELOPER; CREATION OF THE BUSINESS BOARD

                                       AND NON-COMPETE

        2.1     Retention of Developer.  The Authority hereby retains the Developer,  as its

                ----------------------
exclusive developer for the Project, to perform all required  development  services relating to
the programming (including concept development),  design, construction,  equipping and staffing
(pursuant to Section 8.6 below) of the Project upon, and subject to, the terms and  conditions,
and in  consideration  of the payments,  hereinafter set forth. The Developer shall provide the
services as hereinafter set forth as necessary to facilitate the development of the Project and
shall  furnish,  at its cost, a sufficient  number of trained  personnel,  with  experience  on
projects of a scope and magnitude  similar to the Project,  including a senior  executive  with
sufficient development, construction and project management experience in the gaming and resort
industry  to be in charge of  coordinating  the  development,  design and  construction  of the
Project (the "Project Executive").

        2.2    Creation of Business  Board.  Upon  execution of this  Agreement  the Developer
               ---------------------------
and the  Authority  shall create the Business  Board.  The Business  Board shall remain active
during the Term of this  Agreement  and shall  consist of an equal  number of  representatives
from  each of the  Authority  and the  Developer,  not to exceed  six  members  in total.  The
Business  Board shall have  authority to act for the Developer and the Authority  with respect
to routine matters  related to this Agreement and the development of the Project  (provided no
dispute  exists  between  members of the  Business  Board  related to such  routine  matters),
subject to the terms and  conditions  set forth in this  Agreement  and any  approvals  of the
Authority,  the Tribe (as  applicable)  or the Developer  with respect to matters the Business
Board deems  appropriate  to bring to the  attention of such persons for approval or which are
required to be brought to the attention of any such persons pursuant to this Agreement.

        2.3    Non-Compete.  During the Term of this Agreement,  the Tribe,  the Authority and
               -----------
the Developer  agree that no party (nor  Affiliate of any party) shall own,  operate,  develop
or manage a Gaming  Facility  in the State of New York other than the  Project  unless each of
the parties consents in writing.

                                          ARTICLE 3

                                 ACQUISITION OF THE PROPERTY

        3.1    Selection and  Acquisition  of the Property.  The Developer  shall research and
               -------------------------------------------
review  various  options for the  acquisition  of the  Property in the State of New York.  The
Developer  shall bring to the Tribe's and the  Authority's  attention  property  available for
purchase,  together  with  available  information  related  to such  property,  including  the
property's  size,  location,   availability,   cost,  environmental  conditions,  zoning,  and
development  potential,  and  the  parties  shall  mutually  agree  upon  the  best  available
development  site for the  Project.  Nothing in this  Agreement  shall be  construed  so as to
require the  Developer  to  contribute,  acquire or expend funds on behalf of the Tribe and/or
the Authority for Property acquisition prior to the Effective Date.

        3.2    Development  of Master Plan for the Project.  After  selection of the Property,
               -------------------------------------------
the Developer,  with the assistance of the Business  Board,  shall develop for the Authority's
review and approval a master plan (the "Master  Plan") for  development  of the Project in one
or more phases (the  "Phases") on the  Property  selected.  The Master Plan shall  include the
size and  location  of the  Facilities,  proposed  schedule  for  construction  of the various
Phases of the Project (if applicable),  and related  information.  The Master Plan approved by
the  Authority  shall serve as the blueprint for the  Project's  construction  and  financing,
subject to additions,  deletions and  alterations  as may be made to the Master Plan from time
to time upon mutual agreement of the parties.

                                          ARTICLE 4

                                    DESIGN OF THE PROJECT

        4.1    General  Supervision.  The Authority shall at all times have final authority to
               --------------------
approve or disapprove all contracts and other matters  related to the design,  development and
construction  of the  Project  consistent  with the  terms of this  Agreement.  The  Developer
shall  represent  the  Authority  and  act as the  Authority's  liaison  with  respect  to the
selection,  direction and  management of the  Architect  selected  pursuant to Section 4.2 and
the Contractors  and/or the  Construction  Manager  selected  pursuant to Section 5.1, and any
other  professionals  engaged, in accordance with the terms of the Project Program, to perform
services  in  connection  with the  design and  construction  of any  portion of the  Project.
Subject to the limitations  described  herein,  the Authority shall delegate and assign to the
Developer its rights under any construction management,  architectural,  engineering and other
agreements  with  development  professionals  to allow the Developer to supervise,  direct and
administer the duties,  activities and functions of the Architect,  the Construction  Manager,
the  Design   Consultants  and  other  development   professionals.   The  Architect  and  the
Contractors  and/or the  Construction  Manager  shall review and advise the  Authority and the
Developer with respect to the Project Program.

        4.2    Engagement  of  Architect.  The  Developer,  with the  approval of the Business
               --------------------------
Board,  shall  select  and  the  Authority  shall  engage  an  Architect(s)  and/or  Engineers
familiar  with the  design of gaming  facilities  and for the  purpose of  performing  certain
services in connection with the construction of the Project,  including site development.  All
agreements with the  Architect(s)  and/or  Engineers  shall be in a form of contract  prepared
and  recommended  by the  Developer  and approved by the Business  Board for  execution by the
Authority.  The Authority  shall  compensate the  Architect(s)  and/or  Engineers for services
rendered out of its proceeds from the  Financing  Agreements  obtained in connection  with the
Project,  after approval of any payment by the Developer.  The Authority  shall  designate the
Developer as its  representative  under any  Architectural  and/or  Engineering  Agreements in
order to allow the Developer to supervise,  direct,  control,  and  administer  the duties and
activities and functions of the Architect(s) and/or Engineers.

        4.3    Design and Construction  Budget.  The Developer,  with the assistance and input
               --------------------------------
 of the Architect, shall establish the Budget for the design,  construction and the furnishing
 and  equipping  of the  Project  prior to the  commencement  of design of the  Project by any
 Architect.  The  Budget  shall be  reviewed  by the  Business  Board and  recommended  to the
 Authority to be approved in writing by the  Authority  within 15 days of receipt,  or, absent
 written notice of disapproval, they shall be deemed to have been approved.

         The Developer  may revise the Budget from time to time, as necessary,  to reflect any
 unpredicted significant changes,  variables or events or to include significant,  additional,
 unanticipated  items of expense.  The Developer  may,  without the approval of the Authority,
 reallocate  part or all of the amount  budgeted with respect to any line item to another line
 item and to make such other  modifications  to the Budget as the  Developer  deems  necessary
 other than increases to the overall  Budget amount or which require  allocation of the Budget
 contingency or which materially alter the Plans and  Specifications  which have been approved
 by the Authority.  In addition,  the Developer may approve change orders  provided  Developer
 gives the Authority  prior written  notice of any proposed  change order together with a copy
 of such  order and a  statement  as to  whether  the  change  order  will  result in a budget
 increase and the Authority  does not  disapprove  such change order in writing within fifteen
 (15) days of receipt of such notice.

         Budget  adjustments which otherwise vary from the terms of this Agreement shall, upon
the  request of the  Developer  and  evaluation  of the  Business  Board,  require the written
approval of the Authority.  The Authority  acknowledges that the Budget is intended only to be
a reasonable  estimate of the Project's  construction and development costs and expenses.  The
Developer  shall  not be  deemed  to have  made  any  guarantee,  warranty  or  representation
whatsoever in connection with the Budget.

        4.4    Concept   Design   and   Engineering.    The   Authority,    based   upon   the
               -------------------------------------
recommendations  of the Developer and the Business Board shall designate its  requirements for
the Project,  including,  but not limited to, a program which shall set forth the  Developer's
and  the  Authority's   objectives,   schedule   requirements,   design  criteria,   including
assumptions  regarding HVAC demands,  space requirements and relationships,  special equipment
and site  requirements (the "Concept  Design").  The Architect shall review the Concept Design
for the Project.

        4.5    Preliminary  Program  Evaluation.  The Developer shall cause to be prepared for
               -----------------------------------
the approval of the  Authority,  a preliminary  evaluation of the proposed  Project's  program
schedule (the "Project  Schedule"),  budget requirements and alternative  approaches to design
and  construction of the Project (the "Project  Program").  Based upon the agreed upon Program
Schedule,  budget  requirements  and design,  the  Architect  shall prepare  schematic  design
documents  consisting of drawings and other documents  illustrating the scale and relationship
of the proposed Project and its components (the "Schematic  Design  Documents"),  as well as a
preliminary  estimate of  construction  costs based upon the proposed area,  size and scope of
the Project.

         4.6    Design  Development.  Upon final approval of the Schematic Design Drawings for
                --------------------
 the  Project  by the  Authority,  the  Architect  shall  prepare  for the  Developer  and the
 Authority  design  development  documents  consisting of drawings and other  documents to fix
 and  describe  the  size  and  character  of the  Project  as to  architectural,  structural,
 mechanical  and electrical  systems,  materials and such other elements as may be appropriate
 (the "Design Development  Documents").  Further, the Architect shall advise the Developer and
 update  any  preliminary  estimate  of  construction  costs and any  budgets  for  furnishing
 equipment to the Project.  The  Developer  shall submit to the Business  Board for review and
 recommendation and to the Authority,  for its review and approval,  finalized versions of the
 Design Development Documents prepared by the Architect and agreed to by the Developer.

        4.7    Construction.  Based upon the approved  Design  Development  Documents  and any
               ---------------
further  adjustments  in the scope and quality of the  Project,  or in the Budget  approved by
the  Authority,  the  Architect  shall  prepare for review by the  Developer  and the Business
Board  and  approval  by the  Authority,  construction  documents  consisting  of  preliminary
drawings and  specifications  setting forth the general  requirements  for construction of the
Gaming  Facility.  It is likely that  construction  will commence  before final detailed plans
and  specifications  ("Plans and  Specifications")  have been  completed.  The Architect shall
proceed with  completion of the Plans and  Specifications  as they relate to the  construction
of portions  of the Project in the order such  portions  are to be  completed  or in the order
required  for  sequential  completion,  and shall  proceed  with  completion  of all Plans and
Specifications as soon as reasonably  possible given  construction  scheduling and progress of
the  work.  The  Architect   shall  advise  the  Developer  and  the  Business  Board  of  any
adjustments to previous estimates of construction cost, schedules, and/or budgets.

        4.8    Plans   and   Specifications.   As   portions   of  the   detailed   Plans  and
               -----------------------------
Specifications  are completed for segments of the  construction of the Project,  the Architect
shall  be  required  to  submit   duplicate   copies  of  those  portions  of  the  Plans  and
Specifications  to the  Developer,  Business  Board and the Authority  periodically  for their
prompt review and approval.

        4.9    Compliance with  Construction  Standards,  Environmental  Laws and Regulations.
               -------------------------------------------------------------------------------
 The Project shall be designed and  constructed  so as to adequately  protect the  environment
 and the public health and safety.  The design,  construction  and  maintenance of the Project
 shall,  except  to the  extent a  particular  requirement  or  requirements  may be waived in
 writing by the  Authority,  meet or exceed all  reasonable  minimum  standards  pertaining to
 Tribal,  state or local building codes,  fire codes and safety and traffic  requirements (but
 excluding  planning,  zoning  and land use laws,  ordinances,  regulations  and  requirements
 unless  applicable)  which would be imposed on the Project by applicable  New York or Federal
 statutes  or  regulations  or local  ordinances  or codes which  would be  applicable  if the
 Project were  located  outside of the  jurisdictional  boundaries  of the Tribe,  even though
 those requirements may not apply within the Tribe's jurisdictional  boundaries.  In addition,
 those  mitigation  steps  specified  in  the   environmental   assessment  and  the  National
 Environmental  Policy Act ("NEPA") documents shall be taken. To the extent that the Tribe may
 adopt more stringent requirements,  those requirements shall govern. The Architect's contract
 shall provide that the Architect shall certify to the Authority  compliance with the NEPA and
 all other applicable environmental and cultural resource laws and regulations.  The Authority
 shall be responsible for and shall certify to appropriate  governmental  agencies  compliance
 with  the  NEPA  and all  other  applicable  environmental  and  cultural  resource  laws and
 regulations.  Nothing  in this  Section  4.9  shall  grant  to the  State  of New York or any
 political  subdivision  thereof any  jurisdiction  (including but not limited to jurisdiction
 regarding  zoning or land use) over the Property or the  development  and  management  of the
 Project.


                                          ARTICLE 5

                                 CONSTRUCTION OF THE PROJECT

        5.1    Selection  of  Contractors.  The  Developer  shall,  in  consultation  with the
               ---------------------------
Business Board,  initiate a selection process in order to prequalify  prospective  contractors
(the "Contractors")  and/or a Construction Manager (the "Construction  Manager") in connection
with the  construction  of the Project.  The Developer  shall submit the list of  prequalified
contractors and/or construction managers to the Business Board for its review and comment.

        5.2    Proposal  Review  and  Bid  Process.  Subsequent  to the  pre-qualification  of
               -----------------------------------
prospective  contractors and/or  construction  managers,  the Developer shall conduct a review
of proposals for the  construction  of the Project,  and the Developer shall negotiate and the
Authority  shall  award a  construction  contract  or  contracts  to the  most  well-qualified
Contractor  or  Contractors  and/or  Construction  Manager.  The  Developer  shall  attempt to
secure at least three  competitive  bids for each  contract  (subject to the  availability  of
contractors  willing to bid on such  contract),  analyze  and compare the bids and present its
review  and  recommendations  to the  Authority  and/or  Business  Board (as  applicable)  for
approval.  The successful  Contractors and/or Construction  Manager shall be properly licensed
in the State of New York and shall be capable of  furnishing  a payment and  performance  bond
satisfactory  to the Business  Board to cover the  construction  for which the  Contractor  or
Construction Manager was retained.

        5.3    Contracts;   Developer  Prohibition.   The  Business  Board  shall  select  the
               ------------------------------------
successful  Contractors  and/or  Construction  Manager  and the  Authority  shall enter into a
construction  management  agreement  and  related  contracts,  or a general  contract  for the
construction  of the Project and in  compliance  with the Tribe's  Preference  Ordinance.  The
Developer  shall  prepare,  for review and approval by the  Authority,  all required  contract
documents  and  agreements  necessary for  construction  of the Project.  The Authority  shall
compensate  any  Contractors  and   Construction   Manager   selected  by  the  Developer  for
construction  of the  Project  from  its  proceeds  from  the  Financing  Agreements  and,  if
applicable,  other  construction  financing  obtained  in  connection  with the  Project.  The
Developer,  its members  and their  respective  Affiliates  shall not bid on any aspect of the
Project or be awarded  any  contracts  without the express  written  consent of the  Authority
(and subject to the disclosure requirements of Section 8.3 of this Agreement).

        5.4    Contract  Documents.   The  contract  documents  ("Contract  Documents")  shall
               --------------------
require the successful  Construction  Manager or general  contractor and all Contractors to be
responsible  for  providing  all  materials,  equipment  and labor  necessary to construct and
equip the  Project  as  necessary,  including  site  development.  The  scope of the  Contract
Documents  shall  require the  Contractors  and/or the  Construction  Manager to construct the
Project in accordance with the Plans and Specifications  prepared by the Architect,  including
any changes or  modifications  thereto  approved by the Business Board and the Developer.  The
Contract  Documents  shall  provide for adequate  insurance,  appropriate  lien  waivers,  and
construction  schedules  by which  milestones,  progress  payments and late  penalties  may be
calculated.

        5.5    Construction  Administration.  The Authority  hereby  assigns to the Developer,
               -----------------------------
prior to the  commencement of  construction,  and the Developer shall be responsible  for, all
construction  contract and  construction  management  administration  during the  construction
phase of the Project.  The Developer  shall act as the Authority's  designated  representative
and shall  have full  power  and  complete  authority  to act on  behalf of the  Authority  in
accordance  with the terms of this  Agreement in connection  with any  construction  contracts
and/or  construction  management  agreements.  The Developer  shall have control and charge of
any persons  performing  work on the site of the Project.  The Developer  shall  interpret and
decide on matters concerning the performance of any contractor,  and/or  construction  manager
and the  requirements  of the Contract  Documents.  The Developer  shall have the authority to
reject work which does not conform to the Contract  Documents.  The  Developer  shall  conduct
inspections  to determine the date or dates of  substantial  completion  and the date of final
completion  of each  Phase of the  Project.  The  Developer  shall  observe  and  evaluate  or
authorize  the  evaluation  of work  performed,  the review of  applications  for  payment for
submission  to the  Authority  and  the  review  and  certification  of the  amounts  due  the
Contractors and/or Construction Manager.

         5.6   Progress   Payments.   The   Authority   shall  make   progress   payments  for
               --------------------
 construction  performed by the  Contractors  on a periodic  basis as directed and approved by
 the Business Board and the Developer.  Progress payments for construction  shall be funded by
 the Authority from Construction  Financing  proceeds.  The Authority shall not be required to
 make progress  payments  unless the  Contractors  certify that the work has been performed in
 accordance  with the Plans and  Specifications  and that the  Contractor  has  satisfied  all
 other conditions for payment set forth in the applicable Contract Documents.

         5.7   Selection of  Furniture,  Trade-Fixtures  and  Equipment.  The  Business  Board
               ---------------------------------------------------------
 shall  select and  recommend  to the  Authority  vendors for  purchase by the  Authority,  of
 furniture,  trade  fixtures and equipment  required to operate the Facilities at the Project.
 Alternatively,  the Developer may arrange for the  procurement  of furniture,  trade fixtures
 and  equipment  on lease  terms as may be  approved  by the  Business  Board.  The  Developer
 agrees to employ good business practices and competitive bidding.


                                          ARTICLE 6

                             FUNDING REQUIREMENTS OF THE PROJECT

         6.1  Authority's  Funding  Obligations.  Subject to the terms of this  Agreement,  the
              ---------------------------------
Developer  agrees to use its best  efforts to assist the  Authority in the  arrangement  of the
financing  for the  design,  construction,  equipping,  start-up  and  working  capital for the
Project,  including  the  Senior  Financing  and  the  Junior  Financing  as  set  forth  below
(collectively,  the "Financing Agreements").  The Financing Agreements shall contain provisions
consistent  with  Section  12.4 of this  Agreement  limiting the recourse of lenders to certain
assets of the Authority.  The Authority  shall,  after the closing of the Senior  Financing and
prior to commencement  of construction of the Project,  make available or otherwise cause to be
established  a  development  fund  pursuant  to the  Financing  Agreements  into  which will be
deposited all of the proceeds of the financing (the "Project Fund").  The Project Fund shall be
designated exclusively for performing the Authority's obligations under this Agreement, and for
costs for any design and  construction  agreements  entered into, as well as any agreements for
the lease or purchase of furniture,  trade fixtures and equipment for the  construction  of the
Project and for start-up  costs and expenses of the  Facilities,  all in  accordance  with this
Agreement  and the  Financing  Agreements.  The  Project  Fund shall be used to  discharge  the
Authority's  obligations  under this  Agreement,  any and all design,  construction  or related
agreements  entered  into for the  development  of the Project,  including  but not limited to,
reimbursement to the Developer of the Developer's  Financial  Assistance  provided to the Tribe
and/or the Authority in  accordance  with Section 6.4 (a) below,  acquisition  of the Property,
consulting and other professional fees, supplies,  utility costs, total cost of the development
and construction of the Project, landscaping,  parking, curb cuts, access enhancement, off-site
road improvement,  architectural,  engineering,  contractors fees and costs, furniture,  signs,
trade fixtures and equipment  necessary for implementing the operation of the Project,  closing
and  financing   related  costs,  and  interest  as  provided  in  the  Financing   Agreements.
Additionally,  the initial working capital for the Facilities operations shall be provided from
the proceeds of the Financing Agreements.  The Tribe and/or the Authority have no obligation to
fund any activities related to the Project, including without limitation, Project Costs, except
from the proceeds of Developer's Financial Assistance and/or the Financing Agreements.

        6.2    The Senior  Financing.  The Developer  agrees to assist the Authority  with the
               ---------------------
Authority's  efforts to obtain  Bank  and/or  Bond  Financing  for the  Project  (the  "Senior
Financing") in amounts consistent with the Project Budgets.

            In connection with Senior Financing, the Developer will:

                  (i) Assist and advise in developing a strategy for the Senior Financing;

                  (ii)Identify possible financial sources;

                  (iii) Finalize a financing term sheet;

                  (iv)As  applicable,  assist  in  the  preparation  of  a  private  placement
                  memorandum or  information  memorandum to be  distributed to a short list of
                  financiers;

                  (v) As   applicable,   distribute  the  private   placement   memorandum  or
                  information memorandum to a short list of financiers;

                  (vi)Assist and advise in making  presentations with respect to the financing
                  to potential financiers;

                  (vii) Review  and  assist  in  evaluating   commercial   and  financial
                  sections of various  contracts and  agreements  and terms of financing  with
                  financiers;

                  (viii) Advise and assist in selecting the final terms and  conditions  with
                  financiers   and   in   completing    appropriate    definitive    financing
                  documentation;  and  provide  such  other  non-financial  assistance  as the
                  parties deem appropriate.

            In  connection  with the  Senior  Financing,  the  Tribe  and the  Authority  will
cooperate with the Developer's  efforts.  Such cooperation  shall include:  (a) direct contact
between  the  Tribe  and  the  Authority's  senior  officials,  management  and  advisors  and
prospective  lenders,  (b)  cooperation in the  preparation  of an  information  memorandum or
private  placement  memorandum and other marketing  materials,  and (c) the hosting,  with the
Developer,  of one or more meetings with prospective  lenders.  In addition,  it is understood
and agreed that,  upon advice and  recommendation  of the  Developer  and with the approval of
the  Authority,  or  at  the  Authority's  discretion,   the  Authority  may  retain  (at  the
Authority's  cost  and  expense)  the  services  of  an  investment   banker  and  such  other
professional advisors as may be necessary for the placement of the Senior Financing.

            6.3       The Junior Financing and/or Completion Guarantee.         In    addition
                      ------------------------------------------------
to the  Senior  Financing,  if  required  by  lenders of the  Senior  Financing  (the  "Senior
Lenders") in order to secure the Senior  Financing,  on the Effective Date, the Developer will
provide  or will  cause an  Affiliate  or  Affiliates  of the  Developer  to provide up to One
Hundred  Million  ($100,000,000.00)  Dollars  of  subordinated  debt  financing  (the  "Junior
Financing")  and/or  a  completion  guarantee  (the  "Completion  Guarantee")  on the  Project
subject to terms and  conditions  acceptable  to the  Developer.  The Junior  Financing  shall
bear an interest rate of Twelve  Percent  (12%) per annum with interest  payments only payable
monthly in arrears,  for a period of five (5) years,  and repayment of the  principal  balance
at the end of the  fifth  year.  The  Completion  Guarantee  (if  any)  shall  be in the  form
negotiated  by Developer  with the Senior Lender and may be in the form,  for example,  of the
completion  guarantee  entered into by the  Developer's  Affiliate  for Phase I of the Mohegan
Sun Casino development in Connecticut.

            Except as set forth in this  Section  6.3 and in Section  13.21,  the  Tribe,  the
Authority  and the  Developer  agree that this  Agreement  shall not be construed as implying,
any  form of  commitment  by the  Developer  or any of its  Affiliates  to  participate  in or
provide  any  financing  (other  than  the  Junior  Financing),  guarantees  (other  than  the
Completion  Guarantee) or credit  support or to underwrite or publicly  distribute  securities
on behalf of the Tribe or the Authority,  or any assurance that any placement  efforts will be
successful.  Notwithstanding  anything  to the  contrary  herein,  it is  understood  that the
Developer is not  undertaking  to provide any legal,  accounting,  or tax advice in connection
with its  obligations  hereunder,  and the Tribe and the Authority  shall rely solely upon its
own experts therefor.

            6.4       Developer's  Other Funding  Obligation.  (a) Financial  Assistance.  The
                      ---------------------------------------      ---------------------
Developer will provide,  in accordance  with the terms and conditions of this Agreement and as
reasonably   determined   by  the  parties,   financial   assistance  of  up  to  Ten  Million
($10,000,000.00)  Dollars (the "Developer  Financial  Assistance") as is reasonably  necessary
to  assist  the  Authority  and the  Tribe  with  (i)  locating,  assessing,  negotiating  and
acquiring the  Property,  (ii)  settlement  of the Tribe's New York land claims,  (iii) having
the Property taken into trust,  (iv)  negotiation of a Tribal/State  Compact,  (v) negotiation
of a local  government  agreement,  (vii)  obtaining  federal,  state and local  approvals and
(viii)  preliminary  preparation  of the Property for Project  development.  The Tribe and the
Authority   acknowledge   that  the  Developer  has  incurred   and/or  accrued   expenses  of
approximately  $800,000  under this Section 6.4 through  December 31, 2000.  In addition,  the
Developer will reimburse the Tribe for  documented  expenses  incurred or accrued by the Tribe
through January 31, 2001 in the approximate  amount of  $125,000.The  above amounts  (together
with  such  other  additional  amounts  agreed to by the  parties  and  incurred  prior to the
execution of this  Agreement)  shall be included in the total Developer  Financial  Assistance
expended  under this  Section 6.4. The  Developer  agrees to provide a portion of  Developer's
Financial  Assistance  to the Tribe and/or the Authority to be utilized by them solely for the
purposes set forth in this Section 6.4 based upon an approved  budget and accounting  controls
to be negotiated  and agreed to by the parties.  The  Developer  Financial  Assistance  budget
and  accounting  procedures  shall be  administered  by the  Business  Board or its  appointed
representatives.  Except as set forth in Section  6.4(b) below related to the  acquisition  of
the Property,  the Developer's  Financial  Assistance  shall be reimbursed out of the proceeds
of the  Project  financing  in  accordance  with the  terms  and  conditions  set forth in the
Financing  Agreements.  The provisions of the previous  sentence shall survive any termination
of this  Agreement.  Notwithstanding  the above,  in the event the Authority  does not receive
Project  financing or the Required  Approvals,  as contemplated  herein,  then the Developer's
Financial  Assistance  shall be  nonreimbursable.  In addition,  the Developer may suspend its
obligations  under this  Section  6.4 in the event the Tribe fails to  materially  perform its
obligations set forth in Article 7 of this Agreement.

               (b)    The Property.  As part of the  Developer's  Financial  Assistance to the
                      ------------
Authority  and the Tribe set forth in Section 6.4 (a) above,  the  Developer on the  Effective
Date (or such earlier time as the Developer,  in its sole discretion,  deems appropriate) will
contribute  the  Property at  Developer's  actual cost and/or  funds  necessary to acquire the
Property  in an  amount  not to exceed  Three  Million  ($3,000,000.00)  Dollars.  The  amount
contributed  by  the  Developer  toward  the  purchase  price  of  the  Property  will  not be
reimbursable to the Developer from the proceeds of the financing or otherwise.

                                          ARTICLE 7

                                   OBLIGATIONS OF THE TRIBE

        7.1    Land  Claim  and  Project  Development.  As  a  condition  to  the  Developer's
               --------------------------------------
performance  of  its  obligations  hereunder,   the  Tribe  agrees,  upon  execution  of  this
Agreement,  to utilize its best efforts,  upon terms and  conditions  acceptable to the Tribe,
to:  (a)  settle  its Land  Claims  with the  State  of New York and  obtain,  as part of that
settlement,  a Compact  containing  the right to develop  and operate  the  Facilities  on the
Property,  (b) make  application  to the United  States  Department  of the  Interior  for the
Property  to be taken into  trust by the United  States for the  purposes  of  permitting  the
Tribe to develop and operate  the  Facilities,  (c) enter into an  agreement  with  applicable
local  governing  bodies  providing for  appropriate  incentives to permit  development of the
Project and (d) such other  agreements  relating  to the Project as may be in the  Developer's
and the Tribe's best interests.

        7.2    Establishment  of the  Authority.  Within thirty (30) days of execution of this
               --------------------------------
Agreement,  the Tribe shall, in accordance with the Tribe's  Constitution and laws,  establish
the Authority (or such similar  instrumentality),  which  Authority  shall remain in existence
during  the Term of this  Agreement.  Prior to the  establishment  of the  Authority,  or upon
abolishment of the Authority  without a successor,  the Tribe shall have all of the rights and
obligations   set  forth  in  this   Agreement   pertaining   to  the   Authority.   Upon  its
establishment, the Authority shall execute and become a party to this Agreement.

        7.3    Gaming Disputes  Court.  Prior to the Effective Date (and in such time so as to
               ----------------------
effectuate  the  Required  Approvals),  the  Tribe  shall,  in  accordance  with  the  Tribe's
Constitution  and laws,  establish a Gaming Disputes Court with  jurisdiction to hear disputes
related to Gaming at the Facility as well as other  disputes  related to the  operation of the
Facility by the Authority and to Gaming  generally.  In addition,  the Gaming  Disputes  Court
shall  have  jurisdiction  to  enter  orders  prohibiting  the  impairment  of  contracts  and
requiring  due  notice  of any  proposed  changes  of any such  contracts  including,  but not
limited to, this  Agreement  and the Financing  Agreements.  The Gaming  Disputes  Court shall
remain in existence during the Term of this Agreement.

        7.4    Tribal Gaming  Ordinance.  Prior to the Effective  Date and  continuing  during
               ------------------------
the Term hereof,  the Tribe shall adopt and maintain a Tribal  Gaming  Ordinance to enable the
Tribe and the Authority to fulfill its obligations  under this Agreement,  the Compact and any
other  applicable  law as  required  by the IGRA,  which  Ordinance  shall be  approved by the
NIGC.  Nothing contained in such Tribal Gaming  Ordinance,  or actions taken pursuant thereto,
shall prejudice or have a material  adverse effect upon  Developer's  rights set forth in this
Agreement;  including  but not  limited to, the tribal  gaming  license  requirements  of said
ordinance  applicable to the Developer.  This  provision is not intended to relieve  Developer
of its obligations under Section 8.8.

        7.5    Approval of this  Agreement;  Stipulated  Declaratory  Judgment.  (a) The Tribe
               ---------------------------------------------------------------
shall adopt a  resolution  approving  this  Agreement  and  authorizing  its  execution by the
Tribal Council President.

               (b) Upon  execution of this  Agreement  by all the  parties,  the Tribe and the
Authority  shall file a Complaint  with the Tribal  Court  seeking  the entry of a  stipulated
declaratory  judgment  upholding the validity and  enforceability of this Agreement,  the form
of which will be  mutually  agreed to by the  Tribe,  the  Authority  and the  Developer.  The
Tribe  represents  and  warrants  that the Tribal Court has full  authority  under the Tribe's
Constitution  and laws to enter an order  upholding  the validity and  enforceability  of this
Agreement and the Financing  Agreements,  and to enter orders  prohibiting  the  impairment of
contracts and requiring due notice of any proposed  changes of any such  contracts  including,
but not limited to, this Agreement and the Financing Agreements.



                                          ARTICLE 8

                           ADDITIONAL DUTIES AND OBLIGATIONS OF THE

                                 AUTHORITY AND THE DEVELOPER

        8.1    Employment of Other  Professionals.  The Authority,  in  consultation  with the
               ----------------------------------
Developer,  shall  select and  employ  other  professionals,  including,  without  limitation,
surveyors,  attorneys,  accountants  and public  relations or  advertising  firms,  to perform
services required for the Project.

        8.2    Progress  Reports and Meetings.  The Business Board shall have monthly meetings
               ------------------------------
(and other  meetings as may be needed) to discuss  the  progress  of the  Project,  including,
without  limitation,  updates to the Project Schedule and Budget, any claims or disputes,  the
status of the work, the  administration  of the Developer's  Financial  Assistance  budget and
accounting  procedures  and all  other  relevant  items.  The  Developer  shall  submit to the
Authority  monthly  progress  reports  showing  the  then  present  status  of  design  and/or
construction  of the Project and shall meet with the  Authority  on a regular  basis to review
the status of the Project.

        8.3    Submission  of  Contracts.  The  Developer  agrees  promptly  to  submit to the
               -------------------------
Authority copies of all contracts and  subcontracts  relating to the Project from time to time
received by the  Developer  and all other  documents  related to the Project.  The  Developer,
with the assistance of the general  contractor and/or the Construction  Manager,  shall assist
the  Authority in complying  with the terms of, and maintain in full force,  all contracts for
design  or   construction   of  the  Project  and  any  surety  bonds  issued  in   connection
therewith.  The  Developer  shall  give the  Authority  immediate  notice of: (i) any fault or
defect  relating  to  construction  of any  Facility;  (ii) any known  failure of any party to
comply with the terms of any contract or bond  relating to any  Facility,  and shall submit to
the  Authority  copies of any  correspondence  regarding an alleged  claim,  fault,  defect or
default by any Person in  relation  to any  contract or  agreement  relating to any  Facility,
together with an explanation  thereof and proposed  corrective  steps of  nonconformance  with
the  Plans  and  Specifications.  All  Contractors  that  are  members  or  Affiliates  of the
Developer  must disclose said  affiliation  prior to its execution of any contract  related to
the Project.

        8.4    Permits and Licenses.  Except for permitting and licensing  requirements of the
               --------------------
Tribe,  the  Developer  shall  advise  the  Authority  as  to  all  permitting  and  licensing
requirements for the Project,  and the Authority,  in consultation  with the Developer,  shall
obtain  or  cause  to  be  obtained  all  permits  and  licenses   required  for  the  design,
construction, equipping and opening of the Project.

        8.5    Maintenance  of  Records.  The  Developer,  the general  contractor  and/or the
               ------------------------
Construction  Manager  and  the  Architect,   shall  maintain  on  the  Property  (or  at  the
Developer's  offices in Waterford,  Connecticut)  all books and records in connection with the
design,  construction,  equipping and opening of the Project,  together with all documents and
papers pertaining to the Project, including,  without limitation,  general maintenance of such
full and  detailed  accounts  as may be  necessary  for  proper  financial  management  of the
Project.  All such  documents  shall at all times be open to the  inspection of the Authority.
Copies  of  such   documents   shall  be  provided  to  the   Authority  or  the   Authority's
representative,  and the Developer  shall  cooperate with any audit of such books and records.
After the expiration or termination of this  Agreement,  the Developer  shall deliver all such
books and records  together with all such related  documents and papers to the Authority,  and
the Developer shall be entitled to retain a copy.

        8.6    Staffing  of  Project.  (a) The  Developer  shall  have the  responsibility  to
               ---------------------
provide  direction to the  Authority  concerning  the  Authority's  selection,  retention  and
training  of all  initial  employees  performing  regular  services  in  connection  with  the
management,  operation and  maintenance of the Project on the  Completion  Date. No later than
sixty  (60) days prior to the  anticipated  Completion  Date of the  Project  (or any  portion
thereof that will be opened for business),  the Developer  shall submit to the Authority,  for
its approval,  a detailed  staffing  plan for all  personnel  necessary to operate the Project
(or portion  thereof) in a first class  manner,  which  staffing plan shall  include,  without
limitation,  organizational charts, a job classification system with job descriptions,  salary
levels and wage  scales  (the  "Staffing  Plan").  The  Staffing  Plan shall be subject to the
Authority's  review and  approval  (which  approval  may be withheld in its sole and  absolute
discretion) and to compliance with the Tribe's Preference Ordinance.

        (b)    All prospective employees shall be subject to the Authority's  approval,  which
approval may be withheld in the Authority's  sole and absolute  discretion.  All Key Personnel
and any and all other  employees as required by the Director of  Regulation  of the  Authority
shall be subject to  background  checks to be performed by the  Authority  (and the  Authority
shall  have  the  right  to  reject  any  candidate  for any  position  based  on the  results
thereof).  In order to maximize  the  benefits of the Project to the Tribe and the  Authority,
the Developer  shall act in compliance  with the Tribe's  Preference  Ordinance in recruiting,
training and  recommending  candidates  for  employment to the  Authority,  to the extent such
preference  is  consistent  with  applicable  law  in  all  job  categories  of  the  Project,
including,  without  limitation,  management  positions.  The  Developer  shall  supervise all
activities  determined  necessary by the  Authority to recruit and train Tribal  members,  and
other  qualified  persons  who meet the  tribal  preference,  including,  without  limitation,
providing job fairs for members of the Tribe and clearly  specifying the tribal  preference in
all job advertisements.

        (c)    Notwithstanding  anything contained herein to the contrary,  from and after the
Completion  Date of the Project (or any portion  thereof which is sooner opened for business),
all decisions  with respect to the  management,  operation and  maintenance of the Project (or
portion thereof) shall be made exclusively by the Authority.

        8.8    Suitability/Licensing  Requirements.  Subject to the provisions of this Section
               ------------------------------------
8.8 and Section 7.4 of this  Agreement,  the  Developer  and any  successors or assigns of the
Developer  shall:  (i) be subject to the  regulatory  power of the  Authority  as set forth in
the Tribal Gaming  Ordinance,  (ii)  demonstrate its suitability for a gaming license from the
Authority and (iii) maintain that  suitability  throughout the term of this Agreement.  At the
time of execution of this Agreement,  Developer has  demonstrated  to the  satisfaction of the
Tribe and the Authority that Developer's  affiliates,  including Trading Cove Associates,  and
their  respective  principals  hold Gaming  Services  Registrations  issued by the Division of
Special Revenue for the State of Connecticut (the "Gaming  Registrations"),  and that SINA and
certain of its affiliates,  and their respective  principals have been qualified for licensure
in  conjunction  with  casino  gaming  licenses  issued by the State of New Jersey  and/or the
Commonwealth  of The Bahamas (the "Gaming  Licenses").  Since the  principals of Developer and
Developer's  affiliated entities have successfully  completed  background checks and have been
qualified  for  licensure as part of the process for  granting the above Gaming  Registrations
and  Gaming  Licenses,  the Tribe and the  Authority  acknowledge  and  agree,  at the time of
execution  of this  Agreement,  that  Developer  is a suitable  company with whom to engage in
gaming  related  activities  under the Tribe's  current gaming  regulations  applicable to the
Tribe's  gaming  operations  in the State of  Wisconsin,  and is deemed  eligible for a tribal
gaming  license  when  the  Tribal  Gaming  Ordinance  licensing  process  is  in  place.  The
licensing  process set forth in the Tribal  Gaming  Ordinance  shall not be stricter  than the
certification   requirements  currently  in  effect  under  the  Tribe's  Wisconsin  licensing
process.   Continued  suitability  for  a  tribal  gaming  license  under  the  Tribal  Gaming
Ordinance during the term of this Agreement is a material condition of this Agreement.


                                          ARTICLE 9

                      COMPENSATION TO THE DEVELOPER & TERM OF AGREEMENT

        9.1    Developer Fee. As compensation  to the Developer for the  Developer's  services
               -------------
 performed  hereunder  related to the Project,  the Authority  shall make certain  payments to
 the Developer  ("the Developer Fee," as defined below in Section  9.1(a)),  without  set-off,
 deduction  or counter  claim  (except as may be required to satisfy an  arbitration  award in
 favor of the Tribe  and/or the  Authority  against  the  Developer  entered  pursuant  to the
 provisions  of Section 12.2 of this  Agreement).  The Developer Fee shall be paid and consist
 of those amounts computed in accordance with paragraph (a) as set forth below:

        (a)    Within  fifteen (15) days  following the end of the calendar month in which the
 Gaming  Facility  opens and  thereafter  within  fifteen (15) days  following the end of each
 successive  calendar  month during the Term hereof the  Authority  shall pay the Developer an
 amount equal to five  percent  (5.0%) of Revenues  from the  Facilities  received  during the
 preceding month (the "Developer Fee").

        (b)    Within  fifteen  (15) days  following  the end of each Fiscal  Month during the
Term hereof,  the  Authority  shall provide to the Developer  operating  financial  statements
derived  from the  preceding  Fiscal Month which  include,  without  limitation,  all Revenues
generated  by the  Facilities  and the  amount of the  Developer  Fee paid or  payable  to the
Developer  pursuant to Section 9.1(a) (the "Monthly  Financial  Statements").  Such statements
shall be prepared in accordance  with GAAP,  consistently  applied,  and shall be certified as
true and complete by the  Authority.  Upon  reasonable  notice and at  reasonable  times,  the
Developer,  or its duly  authorized  representatives,  shall  have  on-site  access to, and be
entitled to photocopy,  the books and records of the Authority  relating to the Facilities for
the purpose of verifying the Monthly Financial  Statements.  In addition,  the Developer shall
have  the  right,  at  the  Developer's  expense,  to  audit  these  financial  statements  by
examination  of all or any part of the books and records of the Authority or the Facility,  as
the Developer, in its sole discretion, may require.

        (c)    Within  forty-five  (45) days  following the end of each Fiscal  Quarter during
the Term,  the Authority  shall provide to the Developer  operating  financial  statements for
the preceding  Fiscal  Quarter which have been reviewed by nationally  recognized  independent
auditors selected by the Authority which include,  without limitation,  all Revenues generated
by the  Facilities  and the  amount of the  Developer  Fee paid or  payable  to the  Developer
pursuant to Section 9.1(a) (the "Quarterly  Financial  Statements").  Such statements shall be
prepared in accordance  with GAAP,  consistently  applied,  and shall be certified as true and
complete by the Authority.  Upon  reasonable  notice and at reasonable  times,  the Developer,
or its duly  authorized  representatives,  shall have  on-site  access to, and be  entitled to
photocopy,  the books and records of the Authority  relating to the Facilities for the purpose
of verifying the Quarterly  Financial  Statements.  In addition,  the Developer shall have the
right, at the Developer's  expense, to audit these financial  statements by examination of all
or any part of the books and records of the Authority or the Facility,  as the  Developer,  in
its sole discretion, may require.

        (d)    Within  ninety  (90) days  following  the end of each  Fiscal  Year (or portion
 thereof) during the Term, the Authority shall provide to the Developer  operating  statements
 derived  from  audited  financials  for the  preceding  Fiscal  Year which  include,  without
 limitation,  all Revenues  generated by the  Facilities  and the amount of the  Developer Fee
 paid or payable to the  Developer  pursuant  to  Sections  9. 1 (a) (the "Year End  Financial
 Statements").  Such  statements  shall be  prepared  in  accordance  with GAAP,  consistently
 applied,  and shall be  certified  as true and complete by the  Authority  and by  nationally
 recognized  independent  auditors  selected by the Authority.  Upon reasonable  notice and at
 reasonable times, the Developer, or its duly authorized  representatives,  shall have on-site
 access to, and be entitled to photocopy,  the books and records of the Authority  relating to
 the  Facilities  for  the  purpose  of  verifying  the  Year  End  Financial  Statements.  In
 addition,  the  Developer  shall have the right,  at the  Developer's  expense,  to audit the
 financial  statements  by  examination  of all or any part of the  books and  records  of the
 Authority or the Facility, as the Developer, in its sole discretion, may require.

        (e)    To the extent  that the  Developer  Fee (or  portion  thereof) is not paid when
 due, such amounts  shall earn  interest at a rate of twelve  percent (12%) per annum from the
 due date  thereof  until the date payment is made (or if such rate of interest is not lawful,
 at the  maximum  lawful  rate of  interest).  This  Section  9.1(e)  shall  not  apply to any
 payment  of the  Developer  Fee which has been  delayed  on  account  of the  payment  of any
 Minimum Priority Distribution under Section 10.1 of this Agreement.

        (f)    In the event that (i) a Casualty Event shall have occurred,  (ii) the Developer
 has not  elected to declare a Tolling  Event  pursuant  to Section  13.20  hereof,  and (iii)
 Revenues  for any  month  in which a  Casualty  Event  continues  are  less  than the  Gaming
 Facility  Revenues for the same month of the preceding year (the "Comparative  Month"),  then
 all  proceeds  from  business  interruption  insurance  shall  be  paid to  Developer  by the
 Authority until the entire amount of the Developer Fee (based on the  Comparative  Month) due
 each month during the period of the Casualty Event is paid.

        (g)    The  Authority  shall  provide to the  Developer  annual  capital and operating
 budgets for the Project and any  revisions  thereto.  Such  budgets  shall be provided to the
 Developer  within five (5) days of the  Authority's  approval of same,  but in no event later
 than December 1st of the preceding year.

       9.2     Term.  The  term of this  Agreement  shall  commence  on the date  first  above
               ----
written,  and shall  continue  for a period of twenty  (20)  years  after the  opening  of the
Gaming  Facility to the general public (the "Term");  provided,  however,  that this Agreement
shall remain in full force and effect until all  Developer  Fees have been paid in  accordance
with this Article 9.


                                          ARTICLE 10

                              CERTAIN COVENANTS OF THE AUTHORITY

       10.1    Payments to the Tribe.  (a)  Other than the Minimum  Priority  Distribution set
               ---------------------
forth in Section  10.1(b) below,  the Authority  shall not make any payment or distribution to
or for the benefit of the Tribe,  any  Affiliate  of the Tribe,  or make any  distribution  to
members  of the Tribe (i) prior to the  payment  in full of the  Developer  Fees then due,  or
(ii) at anytime if any Developer Fees are outstanding.

             (b)  Minimum  Priority  Distribution.  Within fifteen (15) days following the end
                  -------------------------------
of the calendar month in which the Gaming  Facility  opens and thereafter  within fifteen (15)
days following the end of each  successive  month during the Term hereof,  the Authority shall
pay to the Tribe one twelfth  (1/12) of the Minimum  Priority  Distribution  from the Revenues
of the  Facilities,  to the  extent  available.  Any  underpayment  of  the  Minimum  Priority
Distribution  in any calendar month shall be added to the Minimum  Priority  Distribution  due
the following  calendar  month.  The Developer Fee shall be subordinate in all respects to the
payment of the Minimum Priority Distribution.

       10.2    Affiliate  Transactions.  The  Authority  shall not sell,  lease,  transfer  or
               -----------------------
otherwise  dispose of any of its  properties  or assets to, or purchase any property or assets
from,  or  enter  into or make  any  contract,  agreement,  understanding,  loan,  advance  or
Guarantee  with,  or for the benefit of the Tribe,  an  Affiliate of the Tribe or an Affiliate
of the  Authority  (each  of the  foregoing,  an  "Affiliate  Transaction"),  unless  (i) such
Affiliate  Transaction  is on terms that are no less  favorable  to the  Authority  than those
that would have been obtained in a comparable  transaction  by the Authority with an unrelated
Person,  and (ii) the  Authority  delivers to the  Developer (a) with respect to any Affiliate
Transaction  involving  aggregate  payments in excess of Two Million Dollars  ($2,000,000),  a
resolution adopted by the Authority  approving such Affiliate  Transaction and set forth in an
Officer's  Certificate a certification  that such Affiliate  Transaction  complies with clause
(i) above, and (b) with respect to any Affiliate  Transaction  involving aggregate payments in
excess of Ten  Million  Dollars  ($10,000,000),  a written  opinion as to the  fairness to the
Authority from a financial point of view issued by an Independent Financial Advisor.

       10.3    Subsidiaries.   The   Authority   will   not   create,   acquire   or  own  any
               ------------
instrumentality,   subdivisions   or   subunits   unless  the   actions  and  assets  of  such
instrumentalities,  subdivisions  or  subunits  are  subject  to or bound by the terms of this
Agreement.

       10.4    Business  Purpose.  During the Term,  the  Authority  (or any  assignee  of the
               -----------------
Authority  permitted under this  Agreement),  directly or indirectly,  shall not engage in any
business or activity other than the Principal Business.

       10.5    Operation of Gaming Facility.  During the Term, the Authority shall operate the
               ----------------------------
Gaming  Facility  for the  primary  purpose  of  conducting  Gaming,  in  accordance  with all
applicable Compact provisions, related agreements and regulations.

       10.6    Replacement  or  Restoration  Following  Casualty.  If all or a portion  of the
               -------------------------------------------------
Facilities  are damaged by fire or other  casualty,  the  Authority  promptly  shall cause the
Facilities  to be  replaced or restored to  substantially  the same  condition  (or better) as
immediately prior to the occurrence of such fire or other casualty;  provided,  however,  that
in no event shall the Authority be obligated to expend for any  replacement  or restoration an
amount in excess of the  insurance  proceeds  recovered by the  Authority and allocable to the
damage to the Facilities  after deduction of any amounts  required to be paid to any holder of
Indebtedness.  If insurance  proceeds are not available to the Authority for such  replacement
or  restoration,   the  Authority  shall  use  reasonable   efforts  to  obtain  financing  on
commercially  reasonable  terms  (including  terms which provide  recourse only to cash of the
Authority  and  undistributed  and  future  revenues  of  the  Authority)  to  undertake  such
replacement or restoration of the Facilities.


                                             ARTICLE 11

                                             TERMINATION

       11.1    Material  Breach.  This  Agreement  may only be  terminated by the Authority or
               ----------------
the  Developer  if the  other  party  commits  any  material  breach or fails to  perform  any
material  duty or  obligation  of this  Agreement.  Upon  learning  of a  material  breach  or
default,  the  non-breaching  party shall send written  notice of: (i) any  monetary  material
breach or default to the breaching  party within ten (10) days of learning of the breach,  and
(ii) any  nonmonetary  material  breach within thirty (30) days of learning of the breach.  If
the breaching party fails to cure the material  breach or default within  forty-five (45) days
of receipt of such written notice from the non-breaching  party, the  non-breaching  party may
terminate  this  Agreement  by providing  the  defaulting  party with a notice of  termination
(which  shall  be  immediately  effective).  Notwithstanding  the  above,  the  Tribe  and the
Authority  shall  have no  right  to  terminate  this  Agreement  for  any  reason  after  the
Completion  Date of the first Phase of the Gaming  Facility;  provided,  however,  that if the
Developer acts in bad faith or is grossly  negligent  with respect to Developer's  obligations
to perform  development  services  related to expansions  of the Project after the  Completion
Date of the  first  Phase  of the  Project,  unreasonably  refuses  to  perform  any  material
development  services related to future Phases of the Project after being reasonably  directed
to do so by the  Authority  or fails to  continue  to meet the  suitability  requirements  for
licensure  pursuant to Section 8.8 of this Agreement:  then (i) the Authority,  subject to the
provisions  of Article 12 of this  Agreement,  as its sole remedy  under this  Agreement,  may
terminate  Developer's  exclusive rights to perform development services related to expansions
of the Project as set forth in Recital F, and (ii)  Developer  shall be paid a  Developer  Fee
for the  remainder  of the Term of this  Agreement  in an annual  amount  equal to the  amount
earned by Developer  under this  Agreement  in the calendar  year  immediately  preceding  the
termination of Developer's  future services (e.g., if Developer's  annual Developer Fee in the
calendar year  immediately  preceding the  termination  of Developer's  exclusive  development
rights is $20  million,  the  annual  Developer  Fee  payable to  Developer  for each year (or
portion  thereof)  of the  remainder  of the  Term  of the  Agreement  would  be $20  million,
prorated for any partial year).

        11.2   Failure  of Tribe to  Obtain  Required  Approvals.  The  failure  of the  Tribe
               --------------------------------------------------
and/or the  Authority to obtain the  Required  Approvals by December 31, 2002 shall be grounds
for  termination  of this  Agreement by the Developer  upon written notice to the Tribe and/or
the  Authority.  Neither the Tribe nor the Authority has any liability for any funds  expended
or committed by the  Developer  under this  Agreement in the event of  termination  under this
Section 11.2.

        11.3   Failure  to Secure  Agreements  Under  Article  6. The  failure  to secure  the
               -------------------------------------------------
Financing  Agreements  and/or  Completion  Guaranty in accordance with Sections 6.2 and 6.3 of
this  Agreement,  or any one of them, by December 31, 2004,  shall be grounds for  termination
of this Agreement by the Authority  upon written  notice to the  Developer.  Neither the Tribe
nor the  Authority  has any  liability  for any funds  expended or committed by the  Developer
under this Agreement in the event of termination under this Section 11.3.

       11.4    Stay of Termination  Pending  Arbitration.  If a party shall exercise its right
               -----------------------------------------
to terminate  pursuant to Sections 11.1, 11.2 or 11.3 above,  and there is a material  dispute
in  arbitration  with respect to the terms of this Agreement or  circumstances  regarding such
termination  pending,  then the  termination  shall be stayed  until such time as the issue is
resolved.

                                          ARTICLE 12

                                      DISPUTE RESOLUTION

        12.1   Authority's Limited Consent to Suit. (a) The Authority,  a subordinate economic
               -----------------------------------
entity  chartered  by the Tribe  pursuant to the Tribal  Council's  power under  Article  VII,
Section 1(g) of the Tribe's  Constitution,  shares the Tribe's sovereign immunity.  Subject to
Section  12.4  below,  the  Authority  (and the Tribe on behalf  of the  Authority)  expressly
waives the Authority's  immunity from unconsented  suit,  solely for the purpose of permitting
the Developer to seek the  following  actions and remedies:  (i) the  enforcement  of an award
of actual damages by arbitration;  provided,  however, that the arbitrator(s) and/or the court
shall have no authority or jurisdiction  to order execution  against any assets or revenues of
the  Authority  except  those set forth in  Section  12.4  below,  (ii) the  enforcement  of a
determination  by an arbitrator  that prohibits the Authority from taking an action that would
prevent the  operation of this  Agreement or the  Developer  from  performing  this  Agreement
pursuant to its terms, or that requires the Authority to  specifically  perform any obligation
under this Agreement,  (iii) an action to compel  arbitration  pursuant to Section 12.3 and/or
to preserve  the status quo for  forty-five  (45) days during  disputes as required by Section
12.6 for which a demand notice for  arbitration  has been given  pursuant to Section 12.3, and
(iv) an action  to  enforce  the  provisions  of  Sections  13.15 and 13.18 of this  Agreement
during a pending  dispute for which a demand notice for  arbitration  has been given  pursuant
to Section  12.3,  in the event the  Authority  breaches  Section  13.15 or 13.18 prior to the
entry of an  arbitrator's  order under Section 12.3, or if the arbitrator has refused to issue
an order under Section 12.3  regarding the  enforcement  of the provisions of Section 13.15 or
13.18.  The  parties  agree that any suit  commenced  pursuant to this  Section  12.1 shall be
brought in: (a) the United States  District  Court for the Southern  District of New York (and
appeals  therefrom  shall be brought in the United  States  Circuit  Court of Appeals  for the
Second  Circuit  and the United  States  Supreme  Court) or (b) if the United  States  Federal
Courts lack  jurisdiction,  in the Supreme Court of New York (and appeals  therefrom  shall be
brought in the New York State Appellate  Courts) or, (c) if none of the foregoing  courts have
jurisdiction,  then in any court of competent jurisdiction including,  but not limited to, the
Gaming  Disputes  Court or Tribal  Court.  The  Authority,  subject to the  provisions of this
Section 12.1,  hereby:  (i) accepts the exclusive  jurisdiction of the aforesaid courts,  (ii)
irrevocably  agrees to be bound by any final judgment  (after any and all appeals) of any such
court,  and (iii)  irrevocably  waives,  to the fullest extent permitted by law, any objection
which it may now or hereafter  have to the laying of venue of any suit,  action or proceedings
brought in any such court,  and further  irrevocably  waives,  to the fullest extent permitted
by law,  any claim  that any suit,  action or  proceedings  brought in any such court has been
brought  in any  inconvenient  forum,  and (iv) with  respect to the  enforcement  of an award
rendered  in  an  arbitration  conducted  pursuant  to  Section  12.3,  the  Authority  hereby
irrevocably  accepts and submits to the exclusive  jurisdiction  of such Court with respect to
any  such  action,  suit  or  proceeding.  The  Authority  and the  Tribe,  on  behalf  of the
Authority,  expressly waive any requirement of exhaustion of tribal  remedies,  and agree that
they will not present any  affirmative  defense  based on any alleged  failure to exhaust such
remedies.  The limited  waiver  contained in this Section 12.1 shall be strictly  construed as
limited to the actions and remedies  contained herein against the Authority,  and shall not be
construed  as limiting the power of the  arbitrator  or the court to award  remedies  provided
for in this Agreement against any other Parties to this Agreement.

        (b)    Service of  Process.  The  Authority  hereby  appoints  CSC The  United  States
               -------------------
Corporation   Company,  80  State  Street,  Sixth  Floor,  Albany,  New  York  12207,  as  its
authorized  agent on which any and all legal  process  may be  served in any  action,  suit or
proceeding  which is  brought  in any  Court  referenced  above.  The  Authority  agrees  that
service of process upon such agent,  together  with notice of such  service  given as provided
in Section  13.6,  shall be deemed to be  effective  service of process upon it in any action,
suit or  proceeding  referred  to in this  Section  12.1.  If for any reason  such agent shall
cease to be available  to act as such,  the  Authority  agrees to designate a new agent in New
York, on the terms and for the purposes of this Section  12.1,  and the  Authority  shall,  as
soon as  practicable,  give  notice to the other  Parties  of such new agent.  Nothing  herein
shall be deemed to limit the  ability of any party  hereto to serve any such legal  process in
any other manner permitted by applicable law.

        12.2   Tribe's  Limited  Consent to Suit.  (a) If: (a) the  Authority,  or a successor
               ---------------------------------
entity formed  pursuant to Section 13.8 of this Agreement,  is no longer in existence,  or has
had its  authority to perform the  Authority's  obligations  and  responsibilities  under this
Agreement  diminished or abolished,  or (b) the arbitrator or a court  compelling  arbitration
or enforcing an  arbitrator's  award finds that the Tribe is an  indispensable  party (as that
term is defined in the rules of the American  Arbitration  Association,  the Federal  Rules of
Civil  Procedure  or the New York  Rules  of  Civil  Procedure),  so that  arbitration  cannot
proceed  unless the Tribe is  joined,  or (c) the Tribe  breaches  the  provisions  of Section
13.15  or  13.18  of  this  Agreement,  then  the  Tribe  expressly  agrees  (subject  to  the
limitations  set forth in Section 12.4 of this  Agreement) to a limited waiver of its immunity
from  unconsented  suit,  solely  for the  purpose of  permitting  the  Developer  to seek the
following  actions  and  remedies:  (i) the  enforcement  of an award  of  actual  damages  by
arbitration;  provided,  however, that the arbitrator and/or the court shall have no authority
or jurisdiction  to order  execution  against any assets or revenues of the Tribe except those
set forth in Section 12.4 below,  (ii) the  enforcement  of a  determination  by an arbitrator
that  prohibits  the Tribe from taking an action  that would  prevent  the  operation  of this
Agreement  pursuant  to its terms,  or that  requires  the Tribe to  specifically  perform any
obligation  under this Agreement,  (iii) an action to compel  arbitration  pursuant to Section
12.3 and/or to preserve the status quo for  forty-five  (45) days during  disputes as required
by Section 12.6 for which a demand notice for  arbitration  has been given pursuant to Section
12.3,  and (iv) an  action to  enforce  the  provisions  of  Sections  13.15 and 13.18 of this
Agreement  during a pending  dispute for which a demand notice for  arbitration has been given
pursuant to Section  12.3,  in the event the Tribe  breaches  Section  13.15 or 13.18 prior to
the entry of an  arbitrator's  order under  Section 12.3 or if the  arbitrator  has refused to
issue an order under  Section 12.3  enforcing the  provisions  of Section 13.15 or 13.18.  Any
action  brought  under this  Section  12.2 shall be brought in the courts set forth in Section
12.1.  The Tribe,  subject to the  provisions  of this Section 12.2,  hereby:  (i) accepts the
exclusive  jurisdiction of the aforesaid  courts,  (ii) irrevocably  agrees to be bound by any
final judgment (after any and all appeals) of any such court,  and (iii)  irrevocably  waives,
to the fullest  extent  permitted by law, any objection  which it may now or hereafter have to
the  laying of venue of any  suit,  action  or  proceedings  brought  in any such  court,  and
further  irrevocably  waives, to the fullest extent permitted by law, any claim that any suit,
action or proceedings  brought in any such court has been brought in any  inconvenient  forum,
and (iv) with respect to the  enforcement of any award  rendered in an  arbitration  conducted
pursuant to Section 12.3,  the Tribe hereby  irrevocably  accepts and submits to the exclusive
jurisdiction  of such Court with respect to any such  action,  suit or  proceeding.  The Tribe
expressly  waives any  requirement of exhaustion of tribal  remedies,  and agrees that it will
not present any  affirmative  defense based on any alleged  failure to exhaust such  remedies.
The Tribe's  limited  consent to suit is expressed by a resolution of the Tribal  Council (the
"Resolution")  which  Resolution is attached as Exhibit A to this  Agreement and  incorporated
herein  solely  for  the  purpose  of  referencing  this  Section  12.2.  To  the  extent  any
inconsistency  exists  between the  provisions  of this Section 12.2 and the  Resolution,  the
provisions of this Section 12.2 shall prevail.  The limited  waiver  contained in this Section
12.2 shall be  strictly  construed  as limited to the actions and  remedies  contained  herein
against the Tribe,  and shall not be construed as limiting the power of the  arbitrator or the
court to award  remedies  provided  for in this  Agreement  against any other  Parties to this
Agreement.

        (b)    Service  of  Process.   The  Tribe  hereby   appoints  CSC  The  United  States
               --------------------
Corporation   Company,  80  State  Street,  Sixth  Floor,  Albany,  New  York  12207,  as  its
authorized  agent on which any and all legal  process  may be  served in any  action,  suit or
proceeding  which is brought in any Court  referenced to above.  The Tribe agrees that service
of process  upon such  agent,  together  with  notice of such  service  given as  provided  in
Section 13.6, shall be deemed to be effective  service of process upon it in any action,  suit
or  proceeding  referred to in this Section  12.2. If for any reason such agent shall cease to
be  available to act as such,  the Tribe  agrees to designate a new agent in New York,  on the
terms  and  for  the  purposes  of  this  Section  12.2,  and  the  Tribe  shall,  as  soon as
practicable,  give  notice to the other  parties of such new agent.  Nothing  herein  shall be
deemed to limit the ability of any party  hereto to serve any such legal  process in any other
manner permitted by applicable law.

        12.3   Arbitration.  All  disputes,   controversies,  or  claims  arising  out  of  or
               -----------
relating to this Agreement or the  termination  of this Agreement  shall be settled by binding
arbitration in accordance with the commercial  arbitration  rules of the American  Arbitration
Association  and the Federal  Arbitration  Act.  The parties  agree that  binding  arbitration
shall be the sole  remedy  as to all  disputes,  controversies,  or claims  arising  out of or
relating  to this  Agreement,  unless the parties  mutually  agree in writing  otherwise.  The
arbitrator(s)  shall  have  no  authority  to  award  consequential,  incidental  or  punitive
damages,  or attorney's  fees or costs but,  shall have the authority to award actual  damages
and/or equitable  relief,  including,  but not limited to, an emergency order for temporary or
preliminary  injunctive  relief entered on short notice to preserve the status quo for 45 days
during  disputes as required by Section 12.6 of this  Agreement,  and an  emergency  order for
temporary or preliminary  injunctive  relief entered on short notice  enforcing the provisions
of Sections 13.15 and 13.18 of this Agreement.  In determining any matter,  the  arbitrator(s)
shall apply the terms of this  Agreement,  including,  without  limitation,  Sections 12.4 and
12.5,  without adding to, modifying or changing the terms in any respect,  and shall apply the
laws of the State of New York. All  arbitration  hearings shall be held at a place  designated
by the  arbitrator(s)  in New York,  New York.  Arbitration  shall be  initiated  by the Party
making the claim by service of a demand  notice for  arbitration  pursuant to Section  13.6 of
this Agreement within one-hundred eighty (180) days of actual notice of the claim.

        12.4   Limited  Liability  of the Tribe;  Authority's  or Tribe's  Assets.  Nothing in
               ---------------------------------  -------------------------------
this  Agreement  shall  obligate  or  authorize  the payment or  encumbrance  of any assets or
revenues  of the  Authority  or the Tribe  other  than cash of the  Authority  (except  to the
extent the  Authority  can  demonstrate  such cash was  derived  from a source  other than the
Facilities) and undistributed and future revenues of the Facilities.  No director,  officer or
office holder, employee,  agent,  representative or member of the Authority or the Tribe shall
have any personal  liability for any  obligations  of either the Tribe or the Authority  under
this  Agreement  or for any claim based upon,  in respect of, or by reason of such  Agreement,
or related in any manner  whatsoever  to this  Agreement.  Except as set forth in Section 12.2
of this  Agreement,  the  Tribe  shall  not  have any  liability  for any  obligations  of the
Authority  under this  Agreement  or for any claim based upon,  in respect of, or by reason of
such obligations or their creation.

        12.5   Limit  of  Damages  Payable  by  Developer.  Notwithstanding  anything  in this
               ------------------------------------------
Agreement to the  contrary,  the  Developer  shall not be liable  hereunder for the payment of
damages to the Authority in excess of the amount of Ten Million ($10,000,000.00) Dollars.

        12.6   Performance  During  Disputes.  The parties mutually agree that during any kind
               -----------------------------
of controversy,  claim, disagreement or dispute,  including,  without limitation, a dispute as
to the validity of this  Agreement,  the  Authority  and the Developer  shall  continue  their
performance  of the  provisions of this  Agreement  for a period of forty-five  (45) days from
receipt of a notice of material breach  pursuant to Section 11.1,  provided funds necessary to
pay Project costs which  continue to be incurred  (other than amounts in dispute)  continue to
be available.


                                          ARTICLE 13

                                   MISCELLANEOUS PROVISIONS

        13.1   Force  Majeure  Events.  Notwithstanding  anything  in  this  Agreement  to the
               ----------------------
contrary,  the parties hereto shall be excused from their obligations  hereunder to the extent
and for so long as such party shall be prevented  from  compliance by reason of "Force Majeure
Causes,"  provided  notice of such  inability  to  comply is given to the other  party to this
Agreement  within ten (10) days after actual  knowledge of the  occurrence by the party giving
notice of the applicable Force Majeure Cause.

        13.2   Authorization.  The Parties  represent  and warrant to each other that each has
               -------------
full power and  authority to execute this  Agreement  and to be bound by and perform the terms
hereof.  Each party shall furnish  evidence of such  authority to the other.  The parties each
represent  and  warrant to the other that the  execution,  delivery  and  performance  of this
Agreement shall not conflict with the terms of their organizational  documents,  any agreement
to which it is a party or by which it is bound or any law,  rule or  regulation to which it is
subject.

        13.3   Relationship.  The  Tribe,  the  Developer  and  the  Authority  shall  not  be
               ------------
construed  as joint  venturers  or  partners  of each other by reason of this  Agreement,  and
neither  shall  have the  power to bind or  obligate  the  other  except  as set forth in this
Agreement.  The  Developer  is retained by the Tribe and the  Authority  only for the purposes
and to the extent set forth in this Agreement,  and the Developer's  relationship to the Tribe
and the Authority shall be that of an independent contractor.

        13.4   Governing   Law.   The  rights  and   obligations   of  the   parties  and  the
               ---------------
interpretation  and  performance of this Agreement  shall be governed by the laws of the State
of New York.

        13.5   Amendment.  No  modification  or amendment to this Agreement shall be effective
               ---------
unless  mutually  agreed  upon by the  parties in  writing  and unless  such  modification  or
amendment has received any required regulatory approval.

        13.6   Notices.  All notices,  demands,  requests or other communications which may be
               -------
or are  required  to be  given,  served or sent to any party in  connection  with the  matters
which  are the  subject  of this  Agreement  shall  be in  writing  and  shall  be  personally
delivered to such party or mailed first  class,  certified  mail,  return  receipt  requested,
postage  prepaid,  or transmitted by a major overnight  commercial  courier or by facsimile to
the address for such party as set forth  below,  or to such other  address  furnished  by such
parties for such purpose by means of notice pursuant to this Section 13.6:

             If to Developer or Developer Guarantors:

               c/o Trading Cove
               914 Hartford Turnpike
               P.O. Box 60
               Waterford, CT 06385
               Attn:  Len Wolman, Chief Executive Officer
               Phone:  (860) 442-4559
               Facsimile:  (860)  447-8554

             With copies to:

               c/o Sun International
               Coral Towers
               P.O. Box N-4777
               Paradise Island
               Nassau, The Bahamas
               Attn:  Charles Adamo
               Phone:  (242) 363-2509
               Facsimile:  (242) 363-4581


             And to:

               Boies, Schiller & Flexner LLP
               80 Business Park Drive
               Suite 110
               Armonk, New York 10504
               Attn:  Philip Korologos, Esq.
               Phone:  (914) 749-8200
               Facsimile:  (914) 273-9810

             If to the Tribe or the Authority:

               c/o Stockbridge-Munsee Band of Mohican Indians
               N8476 MohHeCon Nuck Road
               P. O. Box 70
               Bowler, Wisconsin  54416
               Attn:  Robert Chicks, Tribal President
               Phone:  (715) 793-4111
               Facsimile:  (715) 793-4856

             With copy to:

               Stockbridge-Munsee Band of Mohican Indians
               N8476 MohHeCon Nuck Road
               P. O. Box 70
               Bowler, Wisconsin  54416
               Attn:  Sharon Greene-Gretzinger, Tribal Attorney
               Phone:  (715) 793-4392
               Facsimile:  (715) 793-4856


               And to:

               Waltraud A. Arts, Esq.
               Quarles & Brady LLP
               Firstar Plaza
               One South Pinckney Street
               Suite 600
               Madison, Wisconsin  53703-2808
               Phone:  (608) 283-2469
               Facsimile:  (608) 251-9166

        Notices  delivered  by mail shall be deemed  given  five (5) days after such  mailing.
Notices  given by hand delivery  shall be deemed given on the date of delivery.  Notices given
by  overnight  commercial  courier  shall be  deemed  given on the  business  day  immediately
following  transmittal,  and notices  delivered by facsimile shall be deemed given on the date
of transmission if the transmission is confirmed.

        13.7   Third Party  Beneficiary.  This Agreement is exclusively for the benefit of the
               ------------------------
parties  hereto,  and it may not be  enforced  by any party  other  than the  parties  to this
Agreement  and shall not give rise to liability  to any third party other than the  authorized
successors and assigns of the parties pursuant to Section 13.8.

        13.8   Successors and Assigns.  The benefits and  obligations of this Agreement  shall
               ----------------------
inure  to and be  binding  upon  the  parties  hereto  and  their  respective  successors  and
assigns.  This  Agreement  shall not be assigned by the Developer or the Developer  Guarantors
without the prior written  consent of the Authority  (which consent shall not be  unreasonably
withheld)  and any  required  approvals  by the  Bureau of Indian  Affairs  or its  authorized
representatives;  provided,  however,  that  Developer  shall (i) have the right to assign the
receipt of Developer  Fee payments at any time without the consent of the  Authority  and (ii)
shall have the right to assign this  Agreement  after the  completion  of the Project  without
the consent of the Authority  provided the assignee complies with the licensing  provisions of
Section  8.8 of  this  Agreement.  This  Agreement  shall  not be  assigned  by the  Authority
without the prior written  consent of the Developer  (which consent shall not be  unreasonably
withheld),  provided,  however,  that the Authority may, without the consent of the Developer,
but  subject  to any  required  approvals  of the Bureau of Indian  Affairs or its  authorized
representative,  assign this Agreement to the Tribe,  another  instrumentality of the Tribe or
an entity wholly owned by the Tribe  organized to conduct the  Authority's  gaming  enterprise
and the  business  of the  Facility  if such  assignment  is made  after the  Effective  Date,
provided  such entity has credit  worthiness  equal to or greater than the  Authority.  In the
event  of  any  such  permitted  assignment  by  the  Authority,  the  Authority's  authorized
assignee,  or the Developer,  the assigning party shall be relieved of its  obligations  under
this  Agreement  which  accrue from and after the date of the  assignment,  provided  that the
assignee  shall assume in writing the  obligations  of the assignor  under this  Agreement and
agree to perform  and be bound by the terms and  provisions  hereof  effective  from and after
the date of such assignment.

        13.9   Severability.  The  invalidity of any one or more  provisions  hereof or of any
               ------------
other  agreement or instrument  given pursuant to or in connection  with this Agreement  shall
not  affect  the  remaining  portions  of  this  Agreement  or any  such  other  agreement  or
instrument or any part thereof,  all of which are inserted  conditionally  on their being held
valid  in law;  and in the  event  that  one or more of the  provisions  contained  herein  or
therein  should be  invalid,  or should  operate to render  this  Agreement  or any such other
agreement or instrument invalid,  the parties agree to negotiate,  in good faith, to modify or
amend  such  invalid  provision  to obtain  for the  parties  the  intended  benefits  of such
provision (or this Agreement and such other  agreements and instruments  shall be construed as
if such invalid provision had not been inserted).

        13.10  Entire  Agreement.  This Agreement  (including any exhibits referred to herein)
               -----------------
represents  the entire  agreement  between  the  parties  hereto  with  respect to the subject
matter  hereof.  No other  representations,  warranties,  promises or  agreements,  express or
implied,  shall exist between the parties unless such  representations,  warranties,  promises
or agreements are in writing and bear a date subsequent to the date of this Agreement.

        13.11  Headings.  The headings used in this  Agreement are for the  convenience of the
               --------
parties only and shall not modify nor restrict any of the terms or provisions hereof.

        13.12  Waivers.  No failure or delay by the  Developer,  the Tribe or the Authority to
               -------
insist upon the strict  performance  of any  covenant,  agreement,  term or  condition of this
Agreement,  or to  exercise  any right or remedy  consequent  upon the breach  thereof,  shall
constitute a waiver of any such breach or any subsequent  breach of such covenant,  agreement,
term,  or  condition.  No covenant,  agreement,  term or condition  of this  Agreement  and no
breach thereof shall be waived,  altered or modified except by written  instrument.  No waiver
of any breach shall affect or alter this Agreement,  but each and every  covenant,  agreement,
term and condition of this  Agreement  shall continue in full force and effect with respect to
any other then existing or subsequent breach thereof.

        13.13  Periods of Time. Unless otherwise  specified  herein,  all references to "days"
               ---------------
shall mean calendar days.  Whenever any  determination  is to be made or action is to be taken
on a date  specified  in this  Agreement,  if such date  shall fall on a  Saturday,  Sunday or
legal holiday  under Rule 6(a),  Federal  Rules of Civil  Procedures,  then in such event said
date shall be extended to the next day which is not a Saturday, Sunday or legal holiday.

        13.14  Consents  and  Approvals.  Where  approval  or consent  or other  action of the
               ------------------------
Tribe or the Authority,  or any agent or political  subdivision of the Tribe or the Authority,
is  required,  such  approval  shall not be  unreasonably  withheld and shall mean the written
approval of the Tribe or the Authority  evidenced by a duly enacted  resolution  thereof,  or,
if not  provided by  resolution  of the Tribe or the  Authority,  the written  approval of the
Tribal  President or the Authority  Chairperson  (to the extent  authorized by such entity) or
such other person or entity  designated  by resolution  of the Tribe or the  Authority.  Where
approval or consent or other action of the Developer is required,  such approval  shall not be
unreasonably  withheld  and shall mean the written  approval  of the members of the  Developer
evidenced by a duly enacted  resolution  thereof,  or, if not  provided by  resolution  of the
Developer,  the written  approval of the  managing  member (to the extent  authorized  by such
entity) or such other person or entity  designated  by  resolution  of the  Developer.  If the
approval of the Developer,  the Tribe or the Authority is required  hereunder,  the Developer,
the Tribe or the  Authority,  as the case may be,  shall  request  such  approval  in writing,
which  request  shall  specify the matter as to which such  approval is requested  and provide
reasonable detail regarding such matter.

        13.15  Government  Savings Clause.  This Agreement shall be submitted to the Bureau of
               --------------------------
Indian  Affairs for its approval  pursuant to its authority  under 25 U.S.C.  81 and the NIGC,
to the extent  required by law. In  addition,  each party  agrees to pursue such  approval and
execute,   deliver,   and  if   necessary,   record  any  and  all   additional   instruments,
certifications,  amendments,  modifications  and other  documents  as may be  required  by the
United States Department of the Interior,  the BIA, the Office of the Field Solicitor,  or any
applicable statute,  rule or regulation in order to effectuate,  complete,  perfect,  continue
or preserve  the  respective  rights,  obligations  and interest of the parties to the fullest
extent  permitted  by law;  provided  that  any  such  instrument,  certification,  amendment,
modification  or other document shall not materially  change the respective  rights,  remedies
or obligations of the parties under this Agreement or related agreements or documents.

        13.16  Termination  of  Prior  Agreements.  As of the  date  hereof,  the  Tribe,  the
               ----------------------------------
Authority and the Developer  terminate all prior  agreements,  arrangements or  understandings
and all  covenants,  terms and  provisions  contained  therein with respect to the Project and
development and  construction of facilities on the Property,  including,  without  limitation,
the MOU.

        13.17  Representation  before Public Bodies.  Without the prior written consent of the
               ------------------------------------
Tribe or the  Authority,  the  Developer  shall have no right or authority  to  represent  the
Authority   before   public  and   governmental   bodies  in   connection   with  any  zoning,
environmental,  site,  easement,  title,  design,  construction or other matter related to the
Project.

        13.18  Non-Impairment  of  Agreement.  The Tribe and the  Authority  (as  applicable),
               -----------------------------
directly or indirectly,  shall not impose any tax, levy or, other monetary payment  obligation
on the  Authority  or on any  activity at the  Facilities  during the term of this  Agreement.
The Tribe and the  Authority  (as  applicable)  shall not,  directly or  indirectly,  take any
action,  enter into any  agreement,  amend its  Constitution  or enact or amend any ordinance,
law, rule or regulation that would  prejudice or have a material  adverse affect on the rights
of the  Developer  under  this  Agreement.  Neither  the  Tribe  nor  the  Authority  nor  any
committee,  agency,  board or other official body of the Tribe shall, by exercise of executive
action,  police  power,  eminent  domain or otherwise,  act to modify,  amend or in any manner
impair the  obligations  of the parties under this  Agreement  without the written  consent of
the  Developer.  Any such action or attempted  action  shall be void ab initio.  The Tribe and
the Authority  acknowledge  that the  arbitrator  specified in Section 12.3 of this  Agreement
and the courts  specified in Sections  12.1 and 12.2 of this  Agreement  have the authority to
provide equitable relief to enforce the provisions of this Section 13.18.

        13.19  Confidential   Proprietary   Information.   Each  party   agrees  to  treat  as
               -----------------------------------------
confidential  all non-public  information  received  during the  performance of this Agreement
regarding the other party,  its  organization,  financial  matters,  marketing  plans or other
affairs.  Except as may be required  by law,  no such  information  will be  disclosed  to any
person,  firm or organization  without the prior written  approval of the other party.  Except
as may be required by law or  regulation,  the  parties to this  Agreement  shall not issue or
make any press release or public  announcement  regarding the subject matter of this Agreement
or the Project  without the prior  written  approval of the other  parties.  The parties agree
that the sole  spokespersons  under this Agreement  shall be Robert Chicks,  Tribal  President
for the Tribe, and Len Wolman or H. B. Kerzner,  Managing Members for the Developer,  or their
authorized successor or representative.

        13.20  Tolling of this Agreement.   If any Casualty  Event occurs prior to  completion
               -------------------------
of the Gaming  Facility,  the  Developer  shall give prompt notice  thereof to the  Authority.
After the Completion  Date,  the Authority  shall give prompt notice thereof to the Developer.
If, within thirty (30) days following receipt of such notice,  the Developer  delivers written
notice to the  Authority  electing to  implement  this Section  13.20,  then the Term shall be
tolled  for  such  number  of  full  calendar  months   commencing  with  the  calendar  month
immediately  following  such Tolling Event and ending with (and  including) the calendar month
immediately  prior to the  Recommencement  Month (the  "Tolling  Period").  The  expiration of
this  Agreement  (and the  obligations of the Authority to make payments of the Developer Fees
hereunder)  shall be extended for such number of full calendar  months included in the Tolling
Period.  During the Tolling  Period,  the Authority  shall have no obligation to make payments
of any Developer Fee.

        13.21  Developer  Guarantee.  The Developer  Guarantors  hereby join in this Agreement
               --------------------
for the sole  purpose of  guaranteeing  Developer's  obligations  set forth in Section 6.3 and
6.4 of this  Agreement.  Any action of the  Authority  or the Tribe  seeking  to  enforce  the
provisions  of this  Section  13.21  shall  be  brought  solely  pursuant  to the  arbitration
provisions of Section 12.3, and the Developer  Guarantors  hereby consent to such  arbitration
proceeding.

        13.22  Service of Process on Developer or the Developer Guarantors.  The Developer and
               -----------------------------------------------------------
the Developer  Guarantors hereby appoint CSC The United States Corporation  Company,  80 State
Street,  Sixth Floor,  Albany,  New York 12207, as their authorized agent on which any and all
legal  process  may be  served  in  any  action,  suit  or  proceeding  arising  out  of  this
Agreement.  The  Developer  and the  Developer  Guarantors  agree  that  service of process in
respect of them upon such agent,  together  with notice of such  service  given as provided in
Section  13.6,  shall be deemed to be  effective  service of process  upon them in any action,
suit or  proceeding  arising out of this  Agreement.  If for any reason such agent shall cease
to be  available  to act as  such,  the  Developer  and  the  Developer  Guarantors  agree  to
designate a new agent in New York,  on the terms and for the purposes of this  Agreement,  and
the Developer and the Developer  Guarantors shall, as soon as practicable,  give notice to the
other  parties of such new agent.  Nothing  herein shall be deemed to limit the ability of any
party hereto to serve any such legal process in any other manner permitted by applicable law.

        13.23  Copies.  All parties to this Agreement  acknowledge that they have received two
               ------
duplicate copies of the fully executed Agreement.

        13.24  Federal  Approval.  This  Agreement  will not be  enforceable  unless and until
               -----------------
approved  by the  appropriate  federal  authorities  pursuant  to §.25  U.S.C.§. 81 (if  such
approval  is  required),  and the  signature  of the  approving  official  is  affixed to this
Agreement.

                            [SIGNATURES APPEAR ON FOLLOWING PAGE]








        IN WITNESS  WHEREOF,  the Tribe,  the  Developer  and the  Developer  Guarantors  have
executed  this  Agreement on and as of the date first  written  above,  and the  Authority has
executed this Agreement on the date set forth below.

                                    THE TRIBE:

                                    STOCKBRIDGE-MUNSEE BAND OF MOHICAN
                                    INDIANS
                                    By:  ___________________________
                                            Name:  Robert Chicks
                                            Its:  Tribal Council President



                                    DEVELOPER:

                                    TRADING COVE NEW YORK, L.L.C.

                                    By:     Waterford Development New York, L.L.C.,
                                            Member

                                    By:  ___________________________
                                            Name:  Len Wolman
                                            Its:  Chief Executive Officer

                                    By:     Sun Cove New York, Inc.,
                                            Member

                                    By:  ___________________________
                                            Name:  H.B. Kerzner
                                            Its:  President


                                    DEVELOPER GUARANTORS:

                                    SUN INTERNATIONAL NORTH AMERICA, INC.


                                    By:__________________________________
                                            Name:  William C. Murtha
                                            Its:  Senior Vice President & Corporate Counsel


                                    WATERFORD GAMING GROUP, LLC


                                    By:___________________________________
                                            Name:  Len Wolman
                                            Its:  Chief Executive Officer




                                    Accepted and Agreed to as of this
                                    ____ day of _________, 2001 by:


                                    THE AUTHORITY

                                    STOCKBRIDGE-MUNSEE TRIBAL GAMING
                                    AUTHORITY

                                    By: _________________________________
                                            Name:  Robert Chicks
                                            Its:  Chairperson


Date:____________                   Approved Pursuant to 25 U.S.C.§.81
                                    United States Department of Interior
                                    Bureau of Indian Affairs:

                                    By:  ___________________________
                                    Name:___________________________
                                    Title:__________________________

EX-8

        Set forth below is a table listing the Company's significant subsidiaries:

                                                          Country of                % of
Name of Company                                         Incorporation            Ownership*
- -------------------------------------------------   -----------------------    ---------------
Aberdeen Management Limited                         Channel Islands                 100%
GGRI, Inc.                                          United States                   (2)
Island Hotel Company Limited                        The Bahamas                     (1)
Paradise Beach Inn, Limited                         The Bahamas                     (6)
Paradise Enterprises Limited                        The Bahamas                     (1)
Paradise Island Limtied                             The Bahamas                     (1)
PIV, Inc.                                           United States                   (5)
Purposeful BV                                       Netherlands                     (7)
Resorts International Hotel, Inc.                   United States                  (3)(4)
Sun Cove Limited                                    United States                   (2)
Sun Cove New York, Inc.                             United States                   (2)
Sun Hotels International (Bermuda), Limited         Bermuda                         100%
Sun Hotels International Management NV              N. Antilles                     100%
Sun International Bahamas, Limited                  The Bahamas                     100%
Sun International Development Limited               The Bahamas                     (1)
Sun International Management Ltd.                   British Virgin Islands          100%
Sun International Management (UK) Ltd.              United Kingdom                  100%
Sun International Marketing, Inc.                   United States                   (2)
Sun International New York, Inc.                    United States                   (2)
Sun International North America, Inc.               United States                   100%
Sun International Resorts, Inc.                     United States                   (2)
Sun Vacances SA                                     France                          (8)
Sunonline Limited                                   The Bahamas                     100%

* % Voting Power equals % of Ownership
(1)  100% owned by Sun International Bahamas, Limited
(2)  100% owned by Sun International North America, Inc.
(3)  100% owned by GGRI, Inc.
(4)  Sold on April 25, 2001 as part of the Resorts Atlantic City Sale
(5)  100% owned by Sun International Resorts, Inc.
(6)  100% owned by Paradise Island Ltd.
(7)  100% owned by Sun Hotels International Management NV
(8)  100% owned by Purposeful BV