SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: 9/30/97
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transaction period to .
Commission file number: 333-17795
WATERFORD GAMING, L.L.C.
(Exact name of Registrant as specified in its charter)
DELAWARE 06-1465402
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)
914 HARTFORD TURNPIKE,
P.O. BOX 715 WATERFORD, CT 06385
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code 860-442-4559
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
WATERFORD GAMING, L.L.C.
INDEX TO FORM 10-Q
Page
Number
PART I -- FINANCIAL INFORMATION
ITEM 1 -- Financial Statements
Report of Independent Accountants 1
Financial Information 2
Condensed Balance Sheets of Waterford Gaming, L.L.C. as of
September 30, 1997 (unaudited) and December 31, 1996. 3
Condensed Statements of Operations of Waterford Gaming, L.L.C.
for the three months and nine months ended September 30, 1997
(unaudited). 4
Condensed Statement of Changes in Members' Deficiency of
Waterford Gaming, L.L.C. for the nine months ended
September 30, 1997 (unaudited). 5
Condensed Statement of Cash Flows of Waterford Gaming, L.L.C.
for the nine months ended September 30, 1997 (unaudited). 6
Notes to Condensed Financial Statements of Waterford Gaming,
L.L.C. 7-9
ITEM 2 -- Management's Discussion and Analysis of Financial
Condition and Results of Operations. 10-18
PART II -- OTHER INFORMATION
ITEM 1 -- Legal Proceedings 19
ITEM 2 -- Changes in Securities 19
ITEM 3 -- Defaults upon Senior Securities 19
ITEM 4 -- Submission of Matters to a Vote of Security Holders 19
ITEM 5 -- Other Information 19
ITEM 6 -- Exhibits and Reports on Form 8-K 19-21
Signatures - Waterford Gaming, L.L.C. 22
Report of Independent Accountants
To the Members of Waterford Gaming, L.L.C.:
We have reviewed the condensed balance sheet of Waterford Gaming, L.L.C.
(the "Company") as of September 30, 1997, and the related condensed
statements of operations for the three months and nine months ended
September 30, 1997, and the related condensed statement of changes in
members' deficiency and cash flows for the nine months ended September 30,
1997. These financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the condensed financial statements referred to above for
them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the balance sheet as of December 31, 1996, and the related
statements of operations, changes in members' equity (deficiency) and cash
flows for the period from September 30, 1996 (commencement of operations) to
December 31, 1996 (not presented herein); and in our report dated April 11,
1997, we expressed an unqualified opinion on those financial statements. In
our opinion, the information set forth in the condensed balance sheet as of
December 31, 1996, is fairly stated, in all material respects, in relation to
the balance sheet from which it has been derived.
Coopers & Lybrand, L.L.P.
Hartford, Connecticut
October 27, 1997
1
PART I. - FINANCIAL INFORMATION
---------------------
Item 1. Financial Statements
--------------------
The unaudited condensed financial information as of September 30, 1997, and
for the three months and nine months ended September 30, 1997, included in
this report was reviewed by Coopers & Lybrand, L.L.P., independent public
accountants, in accordance with the professional standards and procedures
established for such reviews by the American Institute of Certified Public
Accountants.
2
WATERFORD GAMING, L.L.C.
CONDENSED BALANCE SHEETS
September 30, 1997 (Unaudited) and December 31, 1996
__________
ASSETS
September 30, December 31,
1997 1996
____________ ____________
Current assets:
Cash and cash equivalents $13,979,590 $ 841,512
Temporary investments --- 15,895,904
Due from Trading Cove Associates 1,904,516 ---
Other assets 7,717 ---
_____________ ____________
Total current assets 15,891,823 16,737,416
_____________ ____________
Investment in Trading Cove Associates 10,998,878 12,682,469
Investment in 15% subordinated notes receivable 26,750,793 25,965,897
Investment in completion guarantee
subordinated notes receivable 2,798,125 ---
Deferred financing costs, net of accumulated
amortization of $402,705 2,818,115 2,788,529
_____________ ____________
Total assets $59,257,734 $58,174,311
_____________ ____________
LIABILITIES AND MEMBERS' DEFICIENCY
Current liabilities:
Accrued expenses $ 40,910 $ 53,510
Accrued interest on senior notes payable 3,130,833 1,220,104
____________ ___________
Total current liabilities 3,171,743 1,273,614
12-3/4% senior notes payable 65,000,000 65,000,000
____________ ____________
Total liabilities 68,171,743 66,273,614
____________ ____________
Members' deficiency ( 8,914,009) ( 8,099,303)
____________ ____________
Total liabilities and members' deficiency $59,257,734 $58,174,311
____________ ____________
The accompanying notes are an integral part of the financial statements.
3
WATERFORD GAMING, L.L.C.
CONDENSED STATEMENTS OF OPERATIONS
for the three months and nine months ended September 30, 1997
(Unaudited)
_________
For the three For the nine
months ended months ended
September 30, September 30,
1997 1997
_____________ _____________
Revenue:
Interest income $1,084,271 $ 3,331,981
Subordinated notes fee income -
Trading Cove Associates --- 1,285,039
__________ ___________
Total revenue 1,084,271 4,617,020
__________ ___________
Expenses:
Interest expense 2,071,875 6,222,125
Amortization on deferred
financing costs 131,246 343,974
General and administrative 45,242 90,176
__________ ___________
Total expenses 2,248,363 6,656,275
__________ ___________
(1,164,092) (2,039,255)
Equity in income of Trading Cove
Associates 2,084,514 1,224,549
__________ ___________
Net income(loss) $ 920,422 $ (814,706)
__________ ___________
The accompanying notes are an integral part of the financial statements.
4
WATERFORD GAMING, L.L.C.
CONDENSED STATEMENT OF CHANGES IN MEMBERS' DEFICIENCY
for the nine months ended September 30, 1997
(Unaudited)
_________
LMW Total
Slavik Investments, Members'
Suites, Inc. Inc. Deficiency
____________ ____________ ___________
Balance, January 1, 1997 $(5,412,165) $(2,687,138) $(8,099,303)
Net loss (552,344) (262,362) (814,706)
____________ ____________ ____________
Balance, September 30, 1997 $(5,964,509) $(2,949,500) $(8,914,009)
____________ ____________ ____________
The accompanying notes are an integral part of the financial statements.
5
WATERFORD GAMING, L.L.C.
CONDENSED STATEMENT OF CASH FLOWS
for the nine months ended September 30, 1997
(Unaudited)
_________
Cash flows from operating activities:
Net loss $ (814,706)
____________
Adjustments to reconcile net loss to net cash used in
operating activities:
Amortization 343,974
Equity in income of Trading Cove Associates (1,224,549)
Changes in operating assets and liabilities:
Accrued interest receivable -
15% subordinated notes receivable (2,742,556)
Accrued interest on temporary investments 59,061
Other assets (7,717)
Accrued expenses (12,600)
Accrued interest on senior notes payable 1,910,729
____________
Total adjustments (1,673,658)
____________
Net cash used in operating activities (2,488,364)
____________
Cash flows from investing activities:
Return on investment - 15% subordinated notes receivable 1,957,660
Purchase of completion guarantee
subordinated notes receivable (2,798,125)
(Purchases) and sales of temporary investments - net 15,836,843
Distributions from Trading Cove Associates 1,003,624
____________
Net cash provided by investing activities 16,000,002
____________
Cash flows from financing activities:
Deferred financing costs (373,560)
____________
Net increase in cash 13,138,078
Cash and cash equivalents at beginning of period 841,512
____________
Cash and cash equivalents at end of period $13,979,590
____________
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 4,311,396
____________
The accompanying notes are an integral part of the financial statements.
6
WATERFORD GAMING, L.L.C.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
_________
1. Basis of Presentation:
The unaudited interim financial statements should be read in conjunction
with the Company's 1996 audited financial statements within the Company's
Registration Statement on Form S-4, as amended, initially filed with the
Securities and Exchange Commission (the "Commission") File No. 333-17795
on April 29, 1997.
The unaudited interim financial statements include normal and recurring
adjustments which are, in the opinion of management, necessary to present a
fair statement of financial position as of September 30, 1997, and the
results of operations for the three months and nine months ended September
30, 1997, and the statement of members' deficiency and cash flows for the
nine months ended September 30, 1997. The Company was formed on September
30, 1996 and, accordingly, there are no comparative statements for the
corresponding three months and nine months ending September 30, 1996. Results
of operations for the period are not necessarily indicative of the results
to be expected for the full year.
The following significant event has occurred subsequent to fiscal year 1996,
which requires disclosure in this interim report per Regulation S-X,
Rule 10-01, Paragraph(a)(5).
Effective as of May 15, 1997, the Company's 12-3/4% senior notes payable
(the "Notes") were registered with the Commission through a Registration
Statement on Form S-4 under the Securities Exchange Act of 1933. As a
result, the Company is subject to the informational requirements of the
Securities Exchange Act of 1934.
7
2. Investment in Trading Cove Associates:
As of September 30, 1997, the following summary information relates to
Trading Cove Associates. Total revenues and net income are for the nine
months ended September 30, 1997:
Total assets $ 7,975,950
Total liabilities (2,425,144)
____________
Partners' capital $ 5,550,806
____________
Total revenues $ 21,486,216
____________
Net income $ 4,747,894
____________
Company's interest:
Investment in Trading Cove Associates,
beginning of year $12,682,469
Distributions (2,908,140)
___________
9,774,329
___________
Income from Trading Cove Associates 2,373,947
Amortization of interests purchased (1,149,398)
__________
Equity in income of Trading Cove Associates 1,224,549
__________
Investment in Trading Cove Associates $10,998,878
___________
3. Notes Receivable:
On November 8, 1996, the Company invested in 15% subordinated notes
receivable from the Mohegan Tribal Gaming Authority (the "Subordinated
Notes") in the principal amount of $19,150,000 from Sun International
Hotels Limited ("Sun International"). The Company also purchased the
related accrued interest, deferred interest and Subordinated Notes Fee
Amounts, as defined, as of November 8, 1996 totaling $5,922,543, of which
$1,957,660 related to Subordinated Notes Fee Amounts, as defined, owed by
Trading Cove Associates on the Subordinated Notes as of December 31, 1996.
During the nine months ended September 30, 1997, the Company received
$3,242,699, in subordinated notes fee payments from Trading Cove Associates.
These subordinated notes fee payments were first applied against the
$1,957,660, which resulted in recognition of $1,285,039 in subordinated
notes fee income during the nine months ended September 30, 1997.
On September 22, 1997 the Company invested in Non-PIK Completion
Guarantee Notes receivable, as defined, from the Mohegan Tribal Gaming
Authority in the principal amount of $2,500,000 from Sun International.
The Company also purchased the related accrued interest and deferred
8
interest amounts which had not been paid by Trading Cove Associates,
totalling $106,875 and Non-PIK Completion Guarantee Notes Fee Amounts, as
defined, totaling $191,250. The rate of interest payable by the Mohegan
Tribal Gaming Authority on the completion guarantee subordinated notes is
the prime rate per annum announced by Chemical Bank from "time to time" plus
1% (the "Base Rate"). The Base Rate is set and revised at intervals of six
months. At September 30, 1997, the Base Rate was 9.50% per annum.
4. Notes Payable:
The Company is required to make a mandatory redemption on November 15, 1997
of Notes using 100% of Company Excess Cash, as defined in the indenture,
dated as of November 8, 1996, between the Company and Waterford Gaming
Finance Corp., the issuers, and Fleet National Bank, as trustee relating to
$65,000,000 12 3/4% Senior Notes due 2003 (the "Indenture"), held by the
Company in excess of $10 million, as of September 30, 1997. Company Excess
Cash as of September 30, 1997 totalled $3,979,590. On November 15, 1997
$3,529,000 principal amount of Notes will be redeemed at the redemption
price of 112.750%.
9
Item 2. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations
---------------------
The following discussion should be read in conjunction with, and is qualified
in its entirety by, the Company's financial statements and the notes thereto
included elsewhere herein.
Development and Operational Activities
- --------------------------------------
The operation of the Company or its predecessors in its role as a managing
general partner of Trading Cove Associates (the "Manager") has been to
negotiate the Management Agreement as defined, to assist the Mohegan Tribe
of Indians of Connecticut (the "Tribe") and the Mohegan Tribal Gaming
Authority (the "Authority") in obtaining federal recognition, negotiate the
tribal-state compact with the State of Connecticut, obtain financing for the
development of the Mohegan Sun Casino (the "Mohegan Sun") located in
Uncasville, Connecticut, and participate in the design and development of the
Mohegan Sun which commenced operations on October 8, 1996. Since the opening
of the Mohegan Sun, the Company has overseen the Mohegan Sun's day-to-day
operations.
Overview of Current and Future Cash Flows
- -----------------------------------------
The Company expects to fund its operating debt service and capital needs
from cash flows from the Management Agreement as defined, Subordinated Notes
(to the extent interest and Subordinated Notes Fee Amounts, as defined, are
payable in cash on the Subordinated Notes and to the extent of principal
payments on the Subordinated Notes), Non-PIK Completion Guarantee Notes,
as defined, (to the extent interest and Non-PIK Completion Guarantee Notes
Fee Amounts, as defined, are payable in cash on the Non-PIK Completion
Guarantee Notes as defined) and from amounts in the Company's cash collateral
account (the "Cash Collateral Account"). Based upon the Company's anticipated
future operations, management believes that available cash flow will be
sufficient for that purpose. The following is a summary of the cash flows of
the Company.
For the nine month period ended September 30, 1997, the Company received
$3,946,749 from the Manager and $1,904,516 was due from the Manager, which
represents the Company's share of approximately $21,254,000 in net
management fees earned by the Manager from the Authority pursuant to the
terms of the Management Agreement, as defined, for the same period. The
actual amount of management fees earned by the Manager for any annual period
are subject to year-end adjustment. For the nine month period ended
September 30, 1997 the Company also received $299,574 in cash distributions
from the Manager which represents the Company's share of repayments by
the Tribe to the Manager of amounts due in terms of the promissory note
dated September 29, 1995 between the Manager and the Tribe.
10
Sources of Revenues
- -------------------
The Company has three primary sources of revenues: distributions on its
partnership interest in the Manager, payments on the Subordinated Notes and
payments on the Non-PIK Completion Guarantee Notes, as defined.
Distribution on the Company's partnership interest in the Manager
- -----------------------------------------------------------------
Pursuant to an agreement between the Manager and the Tribe, the Manager
manages the Mohegan Sun for a management fee under a seven year management
agreement (the "Management Agreement"). The Manager's primary source of
revenue is management fees under the Management Agreement. The management
fees are calculated in three tiers based upon Net Revenues, as defined, of
the Mohegan Sun set forth below (in thousands):
I II III
________________ __________________ __________________
40% of Net Revenues in Tier I Revenues in
Revenues up to plus Tiers I &
35% of Net II plus 30% of
Revenues Net Revenues
between above
________________ __________________ __________________
Year 1............. $50,546 $50,547-$63,183 $63,183
Year 2............. $73,115 $73,116-$91,394 $91,394
Year 3............. $91,798 $91,799-$114,747 $114,747
Year 4............. $95,693 $95,694-$119,616 $119,616
Year 5............. $104,107 $104,108-$130,134 $130,134
Year 6 (subject to
Buyout Option)..... $114,335 $114,336-$142,919 $142,919
Year 7 (subject to
Buyout Option).... $130,944 $130,945-$163,680 $163,680
The monthly management fee payments are calculated against 1/12th of the
amounts set forth above, and then adjusted annually within 60 days of the close
of the fiscal year. This annual adjustment may or may not have a material
effect on cash flow. As defined in the Management Agreement, "Net Revenues"
of the Mohegan Sun means the amount of the 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 capital
replacement reserve. Net Revenues also include Net Gaming Revenues, which are
equal to the amount of the "net win" from Class III Gaming operations (i.e.,
the difference between gaming wins and losses) less all gaming-related
operational expenses (excluding the management fee). Within 25 days after
the end of each calendar month, the Manager is required to calculate and
report to the Tribe, the gross revenues, operating expenses and net revenues.
11
In addition, the Manager is required to fund $1.2 million per year ($100,000
per month) from its management fees into a capital replacement reserve. The
Management Agreement has a term of seven years that commenced upon the
opening of the Mohegan Sun, subject to a right of the Authority to buy-out
the Management Agreement after the fifth year. If the Management Agreement
is bought out after the fifth year, the Company will use its share of the
proceeds to redeem the Notes.
Pursuant to the Amended and Restated Omnibus Financing Agreement, as agreed
to by the Manager, the Company and Sun International, dated September 10,
1997 (effective as of September 29, 1995), upon receipt of the management
fees, the Manager is required to make a number of different types of
payments to its subcontractors. The subcontracts are primarily with the
Manager's partners or their affiliates. Some of these payments are one-time
non-recurring payments (the "Non-recurring Payments") and others are required
on a continuing basis (the "Continuing Payments"). The payments marked with
an asterisk (*) below are Non-recurring Payments and the others are Continuing
Payments. One of the considerations used by the National Indian Gaming
Commission in determining whether or not to approve a management contract is
whether the Manager is providing a portion of the capital required.
Accordingly, the Manager agreed to provide or cause to be provided $40 million
of capital in the form of the Subordinated Notes. However, at the time that
the subordinated loan was made, the partners of the Manager, including the
Company's predecessors-in-interest, did not participate in the loan in
accordance with their economic interests in the Manager. Therefore, the
partners of the Manager agreed that Sun International, who subscribed for
almost all of the Subordinated Notes, would be entitled to fees (the
"Subordinated Notes Fee Amounts") for agreeing to participate in the Mohegan
Sun project. Other fees payable are to compensate the recipients for other
subcontracted services provided by them to the Mohegan Sun.
As of September 30, 1997 the Authority had outstanding the following
Authority Subordinated Notes as defined.
1. 15% subordinated notes principal amount $40,000,000.
2. Completion guarantee subordinated notes principal amount $50,000,000.
For purposes of points (c), (d) and (e) below the Company, Sun
International and the Manager have agreed that the completion guarantee
subordinated notes principal amount of $50,000,000 be split into two
principal amounts of $32,500,000 completion guarantee subordinated notes
(the "Non-PIK Completion Guarantee Notes") and $17,500,000 completion
guarantee subordinated notes (the "PIK Completion Guarantee Notes").
The following table sets forth the priority of the distribution of the
management fee from the Manager to its partners:
(a) First, for the period ending on November 8, 1996, a maximum sum of
$938,000 will be paid from the Management Services Fee as defined for
expenses incurred with respect to the Mohegan Sun through such date, and
for the period commencing on November 9, 1996 and ending on September 30,
1997, and for each fiscal year of the Authority thereafter, up to
$2,000,000 per fiscal year for the Authority of the Management Services
Fee will be paid by the Manager for expenses.
12
*(b) Second, to return capital contributions made by the partners of the
Manager after September 29, 1995. These capital contributions
aggregated $2.2 million and were repaid to the partners, 50% to the
Company and 50% to Sun Cove Ltd. These capital contributions were
deemed returned at the consummation of the offering of the Notes upon
the distribution by the Manager of the $1.7 million in principal amount
of Subordinated Notes together with accrued interest and a cash
distribution totalling $275,000, 50% to Sun Cove Ltd. and 50% to the
Company.
(c) Third, to pay Sun International fee amounts of $2,500,000 on April 30,
1996, $2,500,000 on October 31, 1996, $2,700,000 on April 30, 1997 and
every six months thereafter, beginning October 31, 1997 an amount equal
to the product of (1) $2,300,000 and (2) a fraction, the numerator of which
is the weighted average principal amount of Subordinated Notes outstanding
including all PIK Amounts (defined as interest that is not paid in cash
by the Authority on any interest payment date, May 15 and November 15),
during the applicable Semi-Annual Period (defined as the six month periods
ending, respectively, on April 30 and October 31) and the denominator of
which is $40,000,000 (the "Subordinated Notes Fee Amounts"). On November
8, 1996 the Company acquired from Sun International $19,150,000 principal
amount of Subordinated Notes and Sun International assigned to the Company
its right to receive $3,850,000 of the Subordinated Notes Fee Amounts
payable on April 30, 1996, October 31, 1996 and April 30, 1997
and from May 1, 1997 and every six months thereafter each of the Company
and Sun International are entitled to one half of the Subordinated
Notes Fee Amounts payable beginning October 31, 1997.
(d) Fourth, i) to pay Sun International fee amounts of $525,000 on October
31, 1996, $2,600,000 on April 30, 1997 and every six months thereafter,
beginning October 31, 1997 an amount equal to the product of the number
arrived at by dividing the difference between (26 1/2% and the Base Rate)
by two (the "Multiplier") and the weighted average of principal amount of
Non-PIK Completion Guarantee Notes outstanding during the applicable
Semi-Annual Period ( the "Non-PIK Completion Guarantee Notes Fee Amounts"),
and ii) payment of an amount equal to the Base Rate on the Non-PIK
Completion Guarantee Notes to the extent the Authority is not permitted
to pay interest thereon (the "Deferred Interest Amounts"). This amount
will be paid semi-annually pari passu with the amount under paragraph
(d)i) above. When the authority can pay such interest, payment under this
paragraph (d)ii) shall be reduced accordingly.
In addition when the Authority pays Sun International any amounts relating
to the Non-PIK Completion Guarantee Notes (other than current interest),
such amounts that relate to the Deferred Interest Amounts acquired by the
Manager shall be immediately paid over to the Manager.
13
Up until October 12, 1997 any amounts payable under paragraph (d)i) and
(d)ii) will be paid to Sun International. After October 12, 1997
portions of these amounts become payable to the Company as it purchases
its share of the Non-PIK Completion Guarantee Notes.
(e) Fifth, to pay Sun International fee amounts of $80,000 on October 31,
1996, $1,350,000 on April 30, 1997 and every six months thereafter,
beginning October 31, 1997 an amount equal to the product of the
Multiplier and the weighted average of principal amount of PIK
Completion Guarantee Notes (including the applicable PIK Amounts)
outstanding during the applicable Semi-Annual Period.
*(f) Sixth, return of capital contributions made before September 29, 1995.
These capital contributions aggregated $6,715,000 (balance as of September
30, 1997 is approximately $898,000 and is to be repaid to the partners,
50% to the Company and 50% to Sun Cove Ltd., from repayments by the Tribe
to the Manager of amounts due in terms of the promissory note dated
September 29, 1995 between the Manager and the Tribe).
*(g) Seventh, payment of a Development Services Fee to Sun International
Management Limited ("SIML") equal to $8,280,000 constituting 3% of the
total development costs (less land acquisition costs) of the Mohegan Sun
plus $25,000.
(h) Eighth, payment of a monthly Management Services Fee (less the amounts
paid pursuant to paragraph (a) above) equal to the lesser of i) 1% of the
gross revenues of the Mohegan Sun or ii) 25% of the sum of the Excess Cash
(as defined in the Amended and Restated Partnership Agreement of the
Manager) of the Manager plus 25% of the organizational and administrative
fee and the marketing and casino operations fee. After deducting
operating expenses (which will be the following amounts: $2.0 million
if the Mohegan Sun's EBITDA (defined as the Mohegan Sun's operating income
plus depreciation, amortization and other non-cash charges) is $200.0
million or less, $3.0 million if the Mohegan Sun's EBITDA is greater than
$200.0 million but less than $225.0 million, and $4.0 million if the
Mohegan Sun's EBITDA is greater than $225.0 million) the remaining amounts
will be paid in equal amounts to SIML and the Company.
*(i) Ninth, payment of a fee to Sun International of $5,520,000 constituting
2% of the total development costs (less land acquisition costs) of the
Mohegan Sun.
(j) Tenth, distribution of amount equal to the state and federal income tax
liability of the Manager as if it were an individual paying federal income
tax and the higher of Michigan or Connecticut taxes. This amount will be
paid 50% to Sun Cove Ltd. and 50% to the Company.
14
(k) Eleventh, all remaining fees and Excess Cash distributed 50% to Sun
Cove Ltd., 45% to the Company and 5% to a former partner.
The previous items reflect the Amended and Restated Omnibus Financing
Agreement. The Company believes that the amendments are not adverse to the
economic interests of the holders of the Notes.
The Company has an obligation to purchase from Sun International $7.5 million
of the aggregate principal amount of the outstanding Non-PIK Completion
Guarantee Notes in three equal annual installments. During September 1997,
the Company purchased $2.5 million Non-PIK Completion Guarantee Notes, the
first of the three installments. When the Authority pays the Company any
amounts relating to the Non-PIK Completion Guarantee Notes (other than current
interest) such amounts that relate to the Deferred Interest Amounts acquired
by the Manager pursuant to Paragraph (d)ii) above shall be immediately paid
over to the Manager.
Payments by the Authority on the Subordinated Notes, Non-PIK Completion
- -----------------------------------------------------------------------
Guarantee Notes and PIK Completion Guarantee Notes (collectively the "Authority
- -------------------------------------------------------------------------------
Subordinated Notes")
- --------------------
Interest accrues on the Authority Subordinated Notes semi-annually. Interest
is deferred (and compounds semi-annually) until the Authority purchases or
offers to purchase at least 50% of its $175 million, 13 1/2% Authority Senior
Secured Notes due 2002 (the "Authority Senior Secured Notes") and certain fixed
charge coverage ratios are met. The Authority is required to offer annually
to purchase the Authority Senior Secured Notes with the sum of (i) 50% of its
Excess Cash Flow (defined as an amount equal to the cash flow of the Authority
for any given period, less (a) management fees for such period, (b) interest
expense and principal payments on indebtedness of the Authority for such
period, (c) amounts set aside in the Cash Maintenance Account (as defined in
the indenture for the Authority Senior Secured Notes) for such period, (d)
amounts for the payment of federal and state taxes for such period, and (e)
certain other amounts (not to exceed $6.8 million) for such fiscal year),
(ii) 100% of the amount of Deferred Subordinated Interest (as defined in the
Indenture for the Authority Senior Notes) for such fiscal year and (iii) accrued
and unpaid interest, if any, to the date of closing of such Excess Cash
Purchase Offer (as defined in the indenture for the Authority Senior Secured
Notes). If the holders of the Authority Senior Secured Notes do not accept the
offer, then such amount of the Excess Cash must be offered to purchase the
Authority Subordinated Notes. In the event that the Company receives an offer
to purchase the Authority Subordinated Notes, the Indenture requires the Company
to accept such offer in the same proportion as Sun International. The Authority
may make an optional redemption of the Authority Subordinated Notes; however,
such redemption, except as detailed above, may be made only after the Authority
Senior Secured Notes have been paid in full.
Results of Operations
- ---------------------
Discussion of the period from July 1, 1997 to September 30, 1997
- ----------------------------------------------------------------
Interest income. Interest income of $1,084,271 for the quarter ended
September 30, 1997 was attributable to accrued interest on the Subordinated
Notes of $944,145 and interest earned on cash and cash equivalents and temporary
investments of $140,126.
15
Subordinated notes fee income - Trading Cove Associates. For the three
months ended September 30, 1997 the Company had no subordinated notes fee
income - Trading Cove Associates.
Interest expense. Interest expense of $2,071,875 for the quarter ended
September 30, 1997 resulted from accrued and unpaid, interest on the Notes.
Amortization on deferred financing costs. Amortization on deferred financing
costs for the three months ended September 30, 1997 of $131,246 resulted from
amortization of costs associated with the issuance of the Notes.
General and administrative expenses. General and administrative expenses
for the quarter ended September 30, 1997 was $45,242 which was primarily
attributable to investment management, legal and accounting fees.
Equity in income of Trading Cove Associates. Equity in income of Trading
Cove Associates for the three months ended September 30, 1997 was $2,084,514.
As a result of the foregoing factors, the Company experienced net income of
$920,422 for the three months ended September 30, 1997.
Discussion of the period from January 1, 1997 to September 30, 1997
- -------------------------------------------------------------------
Interest income. Interest income of $3,331,981 for the period ended
September 30, 1997 was attributable to accrued interest on the Subordinated
Notes of $2,742,556 and interest earned on cash and cash equivalents and
temporary investments of $589,425.
Subordinated notes fee income - Trading Cove Associates. Subordinated notes
fee income - Trading Cove Associates of $1,285,039 for the nine months ended
September 30, 1997 represents Subordinated Notes Fee Amounts received as
detailed under point "c" of the table set forth above under "Overview of
Current and Future Cash Flows".
Interest expense. Interest expense of $6,222,125 for the period ended
September 30, 1997 resulted from paid, and accrued and unpaid, interest on
the Notes. On May 15, 1997 $4,311,396 was paid as interest on the Notes.
The next interest payment date is November 15, 1997.
Amortization on deferred financing costs. Amortization on deferred financing
costs for the nine months ended September 30, 1997 of $343,974 resulted from
amortization of costs associated with the issuance of the Notes.
General and administrative expenses. General and administrative expenses
for the period ended September 30, 1997 was $90,176 which was primarily
attributable to investment management, legal and accounting fees.
16
Equity in income of Trading Cove Associates. Equity in income of Trading
Cove Associates for the nine months ended September 30, 1997 was $1,224,549.
As a result of the foregoing factors, the Company experienced a net loss of
$814,706 for the nine months ended September 30, 1997.
The Company was formed on September 30, 1996 and accordingly there are no
comparative results of operations for the corresponding quarter ending September
30, 1996 and for the corresponding nine months ending September 30, 1996.
Liquidity and Capital Resources
- -------------------------------
The initial capital of the Company consists of the partnership interests in
the Manager contributed by Slavik Suites, Inc. and LMW Investments, Inc. in
forming the Company. In connection with the offering of the Notes, the Company
used approximately $25.1 million to purchase $19.2 million in principal amount
of Subordinated Notes plus accrued and unpaid interest and Subordinated Notes
Fee Amounts. In addition, the Manager distributed approximately $850,000 in
principal amount of Subordinated Notes to the Company. During September 1997
the Company purchased $2.5 million Non-PIK Completion Guarantee Notes plus
accrued and unpaid interest and Non-PIK Completion Guarantee Fee Amounts
(total cost approximately $2.8 million).
At this time the Company anticipates that no further investment is required
in the Manager by the Company.
Current Assets decreased from $16,737,416 to $15,891,823 at September 30,
1997. The decrease was primarily the result of the interest payment on the
Notes of $4,311,396 on May 15, 1997 and the purchase of the Non-PIK Completion
Guarantee Notes during September, 1997.
The Company has three primary sources of revenues: Distributions on its
partnership interest in the Manager and debt service payments on the
Subordinated Notes and Non-PIK Completion Guarantee Notes. The Company
anticipates regular payments from the Manager based on the results of the
Manager and management fee payment by the Authority.
Current Liabilities increased from $1,273,614 to $3,171,743 at September 30,
1997. The increase was primarily attributable to the increase in accrued and
unpaid interest on the Notes.
The Company is required to purchase from Sun International on each October
12, 1998 and October 12, 1999 $2.5 million of the outstanding first funded
principal amount of Non-PIK Completion Guarantee Notes owned by Sun
International. The purchase price which is to be paid by the Company to Sun
International will be equal to the outstanding principal balance of the Non-PIK
Completion Guarantee Notes to be purchased plus any amounts due thereon under
points (d)i) and (d)ii) of the table set forth above under "Overview of
Current and Future Cash Flows". As of September 30, 1997, $32.5 million
principal was outstanding as Non-PIK Completion Guarantee Notes.
17
The Company is required to make a mandatory redemption on November 15, 1997
of Notes using 100% of Company Excess Cash, held by the Company in excess of
$10 million, as of September 30, 1997. Company Excess Cash as of September
30, 1997 totalled $3,979,590. On November 15, 1997 $3,529,000 principal amount
of Notes will be redeemed at the redemption price of 112.750%.
The Company believes that it will fund its current operating expenses, debt
service requirements and capital needs from cash flows from the Manager,
payments under the Subordinated Notes (to the extent interest payments on the
Subordinated Notes is payable in cash and to the extent of principal payments
on the Subordinated Notes), payments under the Non-PIK Completion Guarantee
Notes (to the extent interest payments on the Non-PIK Completion Guarantee
Notes is payable in cash and to the extent of principal payments on the Non-PIK
Completion Guarantee Notes) and from amounts in the Cash Collateral Account.
Based upon the Company's anticipated future operations, management believes
these sources will be sufficient to meet the Company's anticipated requirements
for future operating expenses and future scheduled payments of principal of and
interest on the Notes. No assurance, however, can be given that the operating
cash flow will be sufficient for that purpose. The Mohegan Sun has only
recently begun operations and does not have a long operating history.
18
Part II. - Other Information:
-----------------
Item 1 -- Legal Proceedings:
-----------------
On August 6, 1997, a former partner of the Manager filed a
lawsuit against the Manager, the Company and its owners, Sun
Cove Ltd. and RJH Development Corp. claiming breach of contract,
breach of fiduciary duties and other matters in connection with
the development of the Mohegan Sun by the Manager. The Company
believes that it has meritorious defenses and intends to vigorously
defend the lawsuit and that the outcome of the lawsuit will not
have a material adverse effect on the business of the Company.
Item 2 -- Changes in Securities:
---------------------
NONE
Item 3 -- Defaults Upon Senior Securities:
-------------------------------
NONE
Item 4 -- Submission of Matters to a Vote of Security Holders:
---------------------------------------------------
NONE
Item 5 -- Other Information:
-----------------
NONE
Item 6 -- Exhibits and Reports on Form 8-K:
--------------------------------
(a) Exhibits
Exhibit No. Description
3.1 Certificate of Formation, as amended,
of Waterford Gaming, L.L.C. (i)
3.2 Certificate of Incorporation of Waterford
Gaming Finance Corp. (i)
3.3 Bylaws of Waterford Gaming Finance Corp. (i)
4.1 Indenture, dated as of November 8, 1996,
between Waterford Gaming, L.L.C. and Waterford
Gaming Finance Corp., the issuers, and Fleet
National Bank, as trustee, relating to
$65,000,000 12 3/4% Senior Notes due 2003. (i)
4.2 Registration Rights Agreement, dated as of
November 8, 1996, among, Waterford Gaming, L.L.C.,
Waterford Gaming Finance Corp., Bear, Stearns &
Co., Inc., and Merrill Lynch, Pierce, Fenner &
Smith Incorporated. (i)
19
4.3 Note Pledge Agreement, dated as of November 8,
1996, between Waterford Gaming, L.L.C. and
Fleet National Bank, as trustee. (i)
4.4 Cash Collateral and Disbursement Agreement,
dated as of November 8, 1996, among Fleet
National Bank, as trustee, Fleet National Bank
as disbursement agent, and Waterford Gaming,
L.L.C. (i)
4.5 Specimen Form of 12 3/4% Senior Notes due 2003
(the "Private Notes") (included in Exhibit
4.1). (i)
4.6 Specimen Form of 12 3/4% Senior Notes due 2003
(the "Exchange Note") (included in Exhibit
4.1). (i)
10.1 Omnibus Financing Agreement, dated as of
September 21, 1995, between Trading Cove
Associates and Sun International Hotels
Limited. (i)
10.2 First Amendment to the Omnibus Financing
Agreement, dated as of October 19, 1996, among
Trading Cove Associates, Sun International Hotels
Limited and Waterford Gaming, L.L.C. (i)
10.2.1 Amended and Restated Omnibus Financing Agreement
dated September 10, 1997. (iii)
10.3 Amended and Restated Partnership Agreement
of Trading Cove Associates, dated as of September
21, 1994, among Sun Cove Ltd., RJH Development
Corp., Leisure Resort Technology, Inc., Slavik
Suites, Inc., and LMW Investments, Inc. (i)
10.4 First Amendment to Amended and Restated
Partnership Agreement of Trading Cove
Associates, dated as of October 22, 1996,
among Sun Cove Ltd., Slavik Suites, Inc., RJH
Development Corp., LMW Investments, Inc. and
Waterford Gaming, L.L.C. (i)
10.5 Purchase Agreement, dated as of November 5, 1996,
among Waterford Gaming, L.L.C., Waterford Gaming
Finance Corp., Bear, Stearns & Co., Inc. and
Merrill Lynch, Pierce, Fenner and Smith
Incorporated. (i)
10.5.1 Agreement with Respect to Redemption or
Repurchase of Subordinated Notes, dated
September 10, 1997. (iii)
10.6 Limited Liability Company Agreement of Waterford
Gaming, L.L.C., dated as of September 30, 1996,
among Slavik Suites, Inc., LMW Investments, Inc.
and Waterford Gaming, L.L.C. (i)
10.7 Note Purchase Agreement, dated as of October 19,
1996, among Sun International Hotels Limited,
Waterford Gaming, L.L.C. and Trading Cove
Associates. (i)
10.8 Note Purchase Agreement, dated as of September
29, 1995, between the Mohegan Tribal Gaming
Authority and Sun International Hotels Limited
relating to the Subordinated Notes. (i)
20
10.9 Management Agreement, dated as of July 28, 1994,
between the Mohegan Tribe of Indians of
Connecticut and Trading Cove Associates. (i)
10.10 Management Services Agreement, dated September
10, 1997. (iii)
10.11 Development Services Agreement, dated September
10, 1997. (iii)
10.12 Subdevelopment Services Agreement, dated
September 10, 1997. (iii)
10.13 Completion Guarantee and Investment Banking and
Financing Arrangement Fee Agreement, dated
September 10, 1997. (iii)
21.1 Subsidiaries of Waterford Gaming, L.L.C. (i)
21.2 Subsidiaries of Waterford Gaming Finance Corp. (i)
27 Financial Data Schedule (ii)
99.1 Quarterly Report, for the period ended
June 30, 1997, on Form 10-Q of the
Mohegan Tribal Gaming Authority (the "Authority")
dated August 13, 1997, incorporated by reference
to the Authority's electronic filing of such
report on Form 10-Q Commission file reference
no. 033-80655.
(i) Incorporated by reference to the Registrant's Registration
Statement on Form S-4, Commission File No. 333-17795,
declared effective on May 15, 1997.
(ii) Included in Edgar filing only.
(iii) Filed herewith.
(b) Form 8-K filed on August 15, 1997.
Item 5.
The Mohegan Tribal Gaming Authority (the "Authority") has
filed its quarterly report on Form 10-Q for the period ended
June 30, 1997, a copy of which has been filed as an exhibit
to this report and is incorporated by reference to the
Authority's electronic filing of such report on Form 10-Q
Commission file reference no. 033-80655.
Date of Report: August 13, 1997
21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned thereunto duly authorized.
Date: November 13, 1997 By: /s/Len Wolman
Len Wolman, Chief Executive Officer
Date: November 13, 1997 By: /s/Del Lauria
Del Lauria, Chief Financial Officer
22
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Waterford Gaming, L.L.C.
All amounts are unaudited.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 13,979,590
<SECURITIES> 0
<RECEIVABLES> 1,904,516
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 15,891,823
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 59,257,734
<CURRENT-LIABILITIES> 3,171,743
<BONDS> 65,000,000
0
0
<COMMON> 0
<OTHER-SE> (8,914,009)
<TOTAL-LIABILITY-AND-EQUITY> 59,257,734
<SALES> 0
<TOTAL-REVENUES> 4,617,020
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 434,150
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,222,125
<INCOME-PRETAX> (814,706)
<INCOME-TAX> 0
<INCOME-CONTINUING> (814,706)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (814,706)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
EXECUTION COPY
AMENDED AND RESTATED OMNIBUS FINANCING AGREEMENT dated as of
September 29, 1995, among TRADING COVE ASSOCIATES, a Connecticut general
partnership ("TCA"), SUN INTERNATIONAL HOTELS LIMITED, a Bahamian company
("Sun"), and WATERFORD GAMING, L.L.C., a Delaware limited liability company
("Waterford").
WHEREAS, TCA was formed in order to assist the Mohegan Tribe of
Indians of Connecticut (the "Tribe") in the development and management of
a casino complex in Montville Connecticut (the "Casino Complex");
WHEREAS, an affiliate of Sun and Waterford are each 50% partners in
TCA, which partnership is governed by the Amended and Restated Partnership
Agreement dated as of September 21, 1994, as further amended by the First
Amendment thereto effective November 8, 1996 (as amended, the "Partnership
Agreement");
WHEREAS, capitalized terms used herein but not defined, shall have
the meaning set forth in the Partnership Agreement;
WHEREAS, TCA has entered into an Amended and Restated Gaming
Facility Management Agreement dated September 29, 1995, with the Tribe to
develop and manage the Casino Complex and in connection therewith is entitled
to receive certain management fees (the "TCA Management Fees');
WHEREAS, the Partnership Agreement provides for the Partners
thereof to provide certain services as subcontractors to TCA in order that
TCA may fulfill its obligations under the Management Agreements;
WHEREAS, TCA has determined that in addition to the services set
forth in the Partnership Agreement, certain Partners or their affiliates will
provide additional services as subcontractors to TCA in order to enable TCA
to meet its obligations under the Management Agreements and will be compensated
therefor; and
WHEREAS, the Partners or their affiliates have entered into a
Marketing Services Agreement, Completion Guarantee and Investment Banking and
Financing Arrangement Fee Agreement, Management Services Agreement, Development
Services Agreement and an Organizational and Administrative Services Agreement
(collectively, the "Subcontract Agreements") and desire to set forth in this
Agreement the priorities of the payments due under such subcontract
agreements.
NOW, THEREFORE, in consideration of the agreements and obligations
set forth herein, TCA, Sun and Waterford agree as follows.
1. Priorities. The parties agree that payments required to be made by
TCA pursuant to the Subcontract Agreements shall only be required to
be paid from the TCA Management Fees, which payments shall be made
only to the extent funds are available to do so and shall be
prioritized as follows:
(a) First, for the period ending on November 8, 1996, a maximum sum
of $938,000 will be paid from the Management Services Fee for
expenses incurred with respect to the Casino Complex through
such date, and for the period commencing on November 9, 1996 and
ending on September 30, 1997, and for each fiscal year for the
Casino Complex thereafter, up to $2,000,000 per fiscal year for
the Casino Complex of the Management Services Fee will be paid by
TCA for expenses in accordance with that certain Letter Agreement
dated October 19, 1996, among Sun Cove Ltd., Slavik Suites, Inc.
("Slavik"), and LMW Investments, Inc. ("LMW");
(b) Second, to return capital contributions made by the Partners of TCA
after September 29, 1995;
(c) Third, to satisfy the obligations set forth in paragraphs
(ii), (iii), and (iv) of Section 2 of the Completion Guarantee
and Investment Banking and Financing Arrangement Fee Agreement
dated as of September 29, 1995, between TCA and Sun (the "Financing
Arrangement Agreement");
(d) Fourth, to satisfy the obligations set forth in Section 3 and in
paragraph (v) of Section 2 of the Financing Arrangement Agreement,
on a pari passu basis;
(e) Fifth, to satisfy the obligations set forth in paragraph (vi) of
Section 2 of the Financing Arrangement Agreement;
(f) Sixth, to return capital contributions made by the Partners of TCA
before September 29, 1995;
(g) Seventh, to pay the Development Services Fee as set forth in
Section 4 of the Development Services Agreement dated as of September
29, 1995, between TCA and Sun International Management Limited, a
subsidiary of Sun ("SIML");
(h) Eighth, to pay the Management Services Fee (less the amounts paid
pursuant to paragraph (a) above) as set forth in Sections 2 and 3
of the Management Services Agreement dated as of September 29, 1995,
among TCA, SIML, Waterford, LMW and Slavik;
(i) Ninth, to satisfy the obligations set forth in paragraph (i) of
Section 2 of the Financing Arrangement Agreement;
(j) Tenth, to make payments in an amount equal to state and federal
tax obligations calculated and payable in accordance with Section
3.03 a.(1) of the Partnership Agreement;
(k) Eleventh, to pay the Organizational and Administrative Fee and the
Marketing and Casino Operations Fee on a pari passu basis, as set
forth in the Marketing Services Agreement dated as of February 6,
1995, between TCA, Sun Casino Management S.A. and Sun Cove Ltd.,
and the Organizational and Administrative Services Agreement dated
as of February 6, 1995, among TCA, LMW, Slavik and RJH Development
Corp.; and
(l) Twelfth, to the distribution of Excess Cash as specified in
Section 3.03a(3) of the Partnership Agreement.
2. Conflicts. If the provisions of this Agreement shall conflict with those
of the Partnership Agreement or any of the Subcontract Agreements, then
the provisions of this Agreement shall prevail.
3. Notices. All notices hereunder shall be deemed properly given upon
(i) receipt by the addressee by personal delivery or facsimile
transmission, (ii) two (2) business days after delivery by an overnight
express delivery service for the next business day delivery, or
(iii) if mailed, upon the first to occur of receipt or the expiration of
five (5) business days after deposit in United States Postal Service
certified mail, postage prepaid, addressed to the parties at the addresses
appearing below. Such addresses may be changed by notice given in the
same manner.
If to TCA: Len Wolman
c/o LMW Investments, Inc.
914 Hartford Turnpike
P.O. Box 715
Waterford, CT 06385
Telecopy No. (860) 437-7752
With Copy to: Honigman, Miller, Schwartz and Cohn
2290 First National Building
Detroit, MI 48226
Att'n: Sheldon P. Winkelman, Esq.
Telecopy No. (313) 962-0176
If to Sun: Howard ("Butch") Kerzner
Sun International Hotels Limited
Executive Offices
Coral Towers
Paradise Island, The Bahamas
Telecopy No. (242) 363-4581
4. Amendments. This Agreement may be amended or modified only by written
instrument executed by all of the parties hereto.
5. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York.
6. Severability. If any provision hereof shall be judicially determined
to be illegal, or if the application thereof to any party or in any
circumstance shall, to any extent, be judicially determined to be
invalid or unenforceable, the remainder of this Agreement, or the
application of such provision to parties or in circumstances other
than those to which it has been judicially determined to be invalid
or unenforceable, shall not be affected thereby, and each provision of
this Agreement shall be valid and enforceable to the fullest extent
permitted by law.
7. Counterparts. This Agreement may be executed by facsimile and in
any number of counterparts, each of which shall constitute an original
and all of which together shall constitute one and the same Agreement.
8. Further Assurances. The parties will execute and deliver such further
instruments and undertake such further actions as may be required to
carry out the intent and purposes of this Agreement.
9. Restated Agreement. This Agreement amends and restates in its entirety
the Omnibus Financing Agreement dated as of September 21, 1995, between
TCA and Sun, as amended by the First Amendment thereto made October 19,
1996.
10. Successors and Assigns. This Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective
successors and assigns.
IN WITNESS WHEREOF, the undersigned have executed this Amended and
Restated Omnibus Financing Agreement on September 10, 1997, to be effective
as of the day and year first above written.
TRADING COVE ASSOCIATES
By: SUN COVE, LTD.,
By:/s/Howard Kerzner
Name:
Title:
By: WATERFORD GAMING, L.L.C.,
By:/s/Len Wolman
Name:
Title:
SUN INTERNATIONAL HOTELS
LIMITED,
By:/s/Charles Adamo
Name:
Title:
WATERFORD GAMING, L.L.C.,
By:/s/Len Wolman
Name:
Title:
AGREEMENT WITH RESPECT TO REDEMPTION OR
REPURCHASE OF SUBORDINATED NOTES
This Agreement is made effective as of October 19, 1996 between Sun
International Hotels Limited, a Bahamian corporation ("SIHL") and Waterford
Gaming, L.L.C., a Delaware limited liability company ("Waterford").
PRELIMINARY STATEMENT
The following is a recital of certain facts upon which this Agreement
is based:
The Mohegan Tribal Gaming Authority ("MTGA") has issued, on behalf
of the Mohegan Tribe of Indians of Connecticut (the "Tribe"), subordinated
debt which is described in a certain Completion Guarantee and Investment
Banking and Financing Arrangement Fee Agreement dated as of September 29, 1995
(the "Completion Agreement"). Capitalized terms used herein shall be
understood to have the meanings ascribed to them in the Completion Agreement.
Each of the parties hereto own certain of the Subordinated Notes and
either own or may acquire Completion Guarantee Subordinated Notes
(collectively, the "Junior Notes"). As such, the parties wish to set forth
their agreement with respect to the events which will occur if MTGA offers
to purchase or redeem any of the Junior Notes.
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein, SIHL and Waterford hereby agree as follows:
1. Redemption or Repurchase of Subordinated Notes. If MTGA shall offer
to purchase or redeem any of the Junior Notes, other than a Change of Control
Offer (as defined in the Senior Note Indenture), then SIHL shall notify
Waterford, no later than 10 business days prior to the expiration of such
offer, of its irrevocable decision with respect to the principal amount that
it or any of its Affiliates has determined to tender in such offer to purchase
or redeem of each of the Junior Notes, if any. Waterford agrees to tender that
principal amount of the Junior Notes that it owns equal to the product of the
aggregate principal amount of the Junior Notes to be tendered by SIHL and its
Affiliates times a fraction, the numerator of which is the aggregate principal
amount of Junior Notes then owned by Waterford and the denominator of which is
the aggregate principal amount of Junior Notes then owned by SIHL and its
Affiliates, rounded to the nearest multiple of $1,000. SIHL agrees to tender,
and to cause its Affiliates to tender, all such Junior Notes as it indicated in
its notice to Waterford. In the event that the total amount available for an
offer (other than a Change of Control Offer) is less than the total amount
needed to purchase the Junior Notes to be tendered by Waterford and SIHL and
its Affiliates pursuant to the above formula, Waterford, on the one hand, and
SIHL and its Affiliates, on the other hand, shall reduce their amount of
Junior Notes to be tendered pro rata, based on the ratio of Junior Notes
originally tendered by each of them, rounded to the nearest multiple of $1,000,
such that the total amount of the Junior Notes to be tendered can be purchased
in such offer. SIHL agrees that if it, or any of its Affiliates, transfers
any of the Junior Notes to anyone other than SIHL, an Affiliate of SIHL or
MTGA, that it will cause such transferee to be bound by a similar agreement
to notify Waterford of its irrevocable decision to tender in any such offer
to purchase, and Waterford will agree to be similarly bound to tender a pro
rata portion of its Junior Notes.
As used in this Agreement, the term "Affiliate" shall have the meaning
set forth in the Note Purchase Agreement under which the Junior Notes were
originally issued, and the phrase "principal amount" shall mean the original
principal amount of any Junior Note, excluding any increased in such original
principal amount by virtue of the nonpayment of interest.
2. Notices. All notices hereunder shall be deemed properly given upon
(i) receipt by the addressee by personal delivery or facsimile transmission,
(ii) two (2) business days after delivery by an overnight express delivery
service for the next business day delivery, or (iii) if mailed, upon the
first to occur of receipt or the expiration of five (5) business days after
deposit in United States Postal Service certified mail, postage prepaid,
addressed to the parties at the addresses appearing below. Such addresses may
be changed by notice given in the same manner.
If to TCA: Len Wolman
c/o LMW Investments, Inc.
914 Hartford Turnpike
P.O. Box 715
Waterford, CT 06385
Telecopy: 860-437-7752
With Copy to: Honigman Miller Schwartz and Cohn
2290 First National Building
660 Woodward
Detroit, Michigan 48226
Attn: Sheldon P. Winkelman, Esq.
Telecopy: 313-962-0176
If to Sun: Howard ("Butch") Kerzner
Sun International Hotels Limited
Executive Offices, Coral Towers
Paradise Island, The Bahamas
Telecopy: 242-363-4581
3. Amendments. This Agreement may be amended or modified only by
written instrument executed by all of the parties hereto.
4. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with the laws of the State of New York.
5. Severability. If any provision hereof shall be judicially determined
to be illegal, or if the application thereof to any party or in any
circumstance shall, to any extent, be judicially determined to be invalid or
unenforceable, the remainder of this Agreement, or the application of such
provision to parties or in circumstances other than those to which it has
been judicially determined to be invalid or unenforceable, shall not be
affected thereby, and each provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
6. Counterparts. This Agreement may be executed by facsimile and in any
number of counterparts, each of which shall constitute an original and all of
which together shall constitute one and the same Agreement.
7. Further Assurances. The parties will execute and deliver such further
instruments and undertake such further actions as may be required to carry out
the intent and purposes of this Agreement.
8. Successors and Assigns. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed effective as of the date first set forth above.
SUN INTERNATIONAL HOTELS LIMITED
By: /s/Charles Adamo
Its: _______________________
WATERFORD GAMING, L.L.C.
By: /s/Len Wolman
Its: _______________________
EXECUTION COPY
MANAGEMENT SERVICES AGREEMENT
MANAGEMENT SERVICES AGREEMENT ("Agreement") dated as of September 29,
1995, by and between TRADING COVE ASSOCIATES, a Connecticut general
partnership ("Trading Cove"), SUN INTERNATIONAL MANAGEMENT LIMITED, a
British Virgin Island corporation ("SIML"), WATERFORD GAMING, L.L.C., a
Delaware Limited Liability company ("Waterford"), SLAVIK SUITES, INC., a
Michigan corporation ("Slavik"), and LMW INVESTMENTS, INC., a Connecticut
corporation ("LMW" and together with SIML, Waterford and Slavik, the
"Management Services Companies").
Recitals:
1. The Mohegan Nation (the "Mohegan Tribe") and Trading Cove are
parties to certain Management Agreements as defined in the Amended and
Restated Partnership Agreement of Trading Cove Associates, dated September
21, 1994 (the "TCA Partnership Agreement"), pursuant to which Trading Cove
is required to perform various services on behalf of the Mohegan Tribe,
including organizational, planning, development, management, marketing,
administrative and supervisory services (hereinafter collectively, the
"Services"), for an agreed compensation. Trading Cove wishes to subcontract
some of its obligations under the Management Agreements. Capitalized terms
used but not otherwise defined in this Agreement shall have the meanings
set forth in the TCA Partnership Agreement.
2. The TCA Partnership Agreement provides, in part, that Trading Cove
would enter into a subcontract with an entity to be formed by an affiliate of
Sun Cove, Ltd., a Connecticut corporation, as to a 50% interest, and the
Waterford Hotel Group, Inc., a Connecticut corporation, an affiliate of
Slavik Suites, Inc., a Michigan corporation, and LMW Investments, Inc., a
Connecticut corporation, as to a 50% interest, to perform certain of the
Services.
3. Trading Cove and Sun-Waterford, a Connecticut corporation, entered
into a Management Services Agreement dated February 6, 1995, as contemplated
in recital number 2 above (the "Original Management Services Agreement").
4. The TCA Partnership has been amended by the First Amendment thereto
dated November 8, 1996, which amendment provides, among other things for the
termination of the Original Management Services Agreement, and the execution
of a new subcontract agreement by the parties hereto.
5. Trading Cove and the Management Services Companies desire to enter
into this Management Services Agreement to set forth the services being
subcontracted by Trading Cove pursuant to the Management Agreements and
the compensation to be paid therefor to the Management Services Companies.
NOW THEREFORE, the parties hereto agree as follows:
1. Engagement of Management Services Company. Trading Cove hereby
subcontracts to the Management Services Companies its obligations under the
Management Agreements to perform the following portions of the Services:
(a) Certain supervisory duties with respect to the manner in which
management duties, responsibilities and functions will be carried out with
respect to the Facility (as defined in the TCA Partnership Agreement) in
conformance with the Management Agreements and to the extent directed by
Trading Cove;
(b) Making available adequate advice and support to assist in the
day-to-day supervision of all aspects and functions required to implement
the management decisions and supervision of the day-to-day operation of the
Facility; and,
(c) To meet with the Partners of Trading Cove on a regular basis, but
no less often than quarterly or as otherwise requested by the Partners.
The Management Services Companies shall also meet the Partners of Trading
Cove as reasonably requested by such Partners to discuss any issues, concerns
or disagreements which may arise from time to time regarding the relationship
with the Mohegan Tribe or the obligations under the Management Agreements.
The Management Services Companies shall give serious consideration to all such
concerns or problems brought to its attention and, to the extent possible in
the best business judgment of the Management Services Companies shall address
such concerns or problems in such a manner so as to minimize such problems
or concerns.
It is understood and agreed that the Management Services Company will not
be expected or required to perform active managerial functions or to
implement operational activities of and decisions of Trading Cove.
2. Management Services Fee. In consideration of the services to be
rendered by the Management Services Companies hereunder, Trading Cove shall
pay to the Management Services Companies an annual management services fee
(the "Management Services Fee") in the aggregate amount of 1.0% of the gross
revenues of the Facility, but in no event during any fiscal year, greater
than the sum of 25% of the Excess Cash generated during such fiscal year
plus 25% of the annual Organizational and Administrative Fee and the Marketing
and Casino Operations Fee.
3. Allocation of Payments. From November 9, 1996, all amounts of the
Management Services Fee in excess of operating expenses up to the $2,000,000
per fiscal year of the Facility determined pursuant to that certain Letter
Agreement dated October 19, 1996, among Sun Cove, Ltd, Slavik and LMW shall
be distributed as follows:
(i) If the Facility's annual operating income plus depreciation,
amortization, and other non-cash charges ("EBITDA") is equal to or less than
$200,000,000 in any fiscal year of the Facility, then 50% to SIML and 50% to
Waterford.
(ii) If the Facility's EBITDA is greater than $200,000,000 but not
more than $225,000,000 in any fiscal year of the Facility, then 50% to SIML,
and the first $500,000 of the remaining 50% shall be distributed (x) 67.796%
to Slavik and (y) 32.204% to LMW, and the balance of such 50% in excess of
$500,000, if any, to Waterford.
(iii) If the Facility's EBITDA is greater than $225,000,000 in any
fiscal year of the Facility, then 50% to SIML, and the first $1,000,000 of
the remaining 50% shall be distributed (x) 67.796% to Slavik and (y) 32.204%
to LMW, and the balance of such 50% in excess of $1,000,000, if any, to
Waterford.
4. Payment Terms.
(a) Within thirty (30) days after the end of each calendar month of
operations, Trading Cove shall calculate and pay to the Management Services
Companies the Management Services Fee for the previous month's operations in
accordance with Paragraphs 2 and 3. The Management Services Fee and the
portion thereof to which each of the Management Services Companies is
entitled shall be finally determined annually in accordance with Paragraphs
2 and 3 within thirty (30) days after the end of the year for which the
Management Services Fee is calculated, and the account of the Management
Services Companies shall be adjusted to reflect any overpayment or
underpayment of Fees during the previous year. To the extent that such
accounting determines that the Management Services Companies are entitled
to an additional amount, such amount shall be paid by Trading Cove on the
first day of the month immediately following the completion of such
accounting. To the extent that such accounting demonstrates that the
Management Services Companies, or any of them, have been overpaid, such
overpayment shall be deducted by Trading Cove from the next payment(s)
due by Trading Cove to the Management Services Companies.
(b) For purposes of Paragraph 2, 3 and 4, reference to any year shall
mean the fiscal year of the Facility.
(c) Trading Cove's obligations to make payment to the Management
Services Companies hereunder is conditioned upon payment to Trading Cove of
the amounts due it from the Mohegan Tribe under the Management Agreements.
Accordingly, Trading Cove shall be obligated to pay to the Management Services
Companies amounts due hereunder only to the extent that and in proportion to
amounts which Trading Cove receives from the Mohegan Tribe under the Management
Agreements.
5. Term of Agreement. This Agreement shall become immediately effective
and shall continue until: (a) terminated for cause as set forth in Paragraph
6; (b) termination of both Management Agreements; or (c) termination of Trading
Cove as an ongoing business entity.
6. Termination; Events of Default. This Agreement may be terminated by
any party with respect to itself by written notice to the other parties for
cause as set forth below. Any Management Services Company shall have cause
to terminate this Agreement if Trading Cove shall have failed to pay to such
Management Services Company the Management Services Fee as and when due as
provided herein and such failure shall not have been cured within thirty (30)
days thereafter. Trading Cove shall have cause to terminate this Agreement
if the Management Services Companies shall have substantially failed to perform
the services described in Paragraph 1 hereof and such failure shall not have
been cured within thirty (30) days thereafter. Any party hereto shall have
cause to terminate this Agreement in the event of:
(a) The filing, whether voluntary or involuntary, of a petition in
bankruptcy against any other party hereto;
(b) An assignment by any other party hereto for the benefit of its
creditors;
(c) Dissolution or insolvency of any other party hereto;
(d) The assignment, or the attempted assignment, by any other party
hereto of its rights and/or obligations hereunder in violation of Paragraph
8 hereof; or
(e) Fraud, gross negligence or other willful misconduct of any
other party hereto in connection with this Agreement or the obligations of such
party hereunder.
7. Indemnification. The Management Services Companies their respective
affiliates, parents, subsidiaries, controlling shareholders, officers,
directors and employees (collectively, the "Indemnified Parties") shall not
be liable to Trading Cove by reason of any act performed for or on behalf of
Trading Cove hereunder, including, without limitation, the Services, or in
the furtherance of Trading Cove business, or any omission to act, except for
acts or omissions that constitute a material breach of any provision of this
Agreement, gross negligence, fraud or bad faith. Trading Cove shall indemnify,
defend and hold harmless the Indemnified Parties from any claim, demand or
liability, and from any loss, cost or expense, including, but not limited to,
attorneys' fees and court costs, which may be made or imposed upon them by
reason of any act performed for or on behalf of Trading Cove or in furtherance
of Trading Cove's business, or any omission to act, except for acts and
omissions that constitute a material breach of any provision of this Agreement,
gross negligence, fraud or bad faith. Notwithstanding anything herein to
the contrary contained, the parties agree that if the assets of Trading Cove
are insufficient to satisfy the obligations set forth in the preceding
sentence, the partners of Trading Cove shall bear the indemnification liability
set forth in the preceding sentence in proportion to their respective
percentage interests in Trading Cove and, in no event, shall the Indemnified
Parties have the right to assert claims under the preceding sentence against
partners of Trading Cove in excess of each such partner's percentage interest
in Trading Cove.
8. Assignments. No party may assign its rights and/or obligations under
this Agreement, except: (i) to an Affiliate of such party, or (ii) with the
prior written consent of all parties hereto. Any assignment shall be subject
to and made in accordance with applicable gaming, securities or other laws.
9. Authorization; Representations and Warranties. Each party represents
and warrants to the other that:
(a) The execution, delivery, and performance by it of this Agreement
and the transactions contemplated herein have been duly authorized by all
necessary action, and the individual(s) executing this Agreement on its
behalf are duly authorized to do so;
(b) It is duly organized and in good standing under the laws of
the jurisdiction of its formation; and
(c) The execution, delivery and performance of this Agreement does
not and shall not violate any existing agreement, bylaw, statute, rule,
regulation and/or ordinance applicable to such party or its execution,
delivery and/or performance of this Agreement.
10. Notices: All notices hereunder shall be deemed properly given upon
(i) receipt by the addressee by personal delivery or facsimile transmission,
(ii) two (2) business days after delivery by an overnight express delivery
service for the next business day delivery, or (iii) if mailed, upon the
first to occur of receipt or the expiration of five (5) business days after
deposit in United States Postal Service certified mail, postage prepaid,
addressed to the parties at the addresses appearing below. Such addresses may
be changed by notice given in the same manner.
If to Trading Cove: Len Wolman
c/o LMW Investments, Inc.
914 Hartford Turnpike
P. O. Box 715
Waterford, CT 06385
Telecopy No. (860) 437-7752
With Copy To: Honigman, Miller, Schwartz and Cohn
2290 First National Building
Detroit, MI 48226
Att'n: Sheldon P. Winkelman, Esq.
Telecopy No. (313) 962-0176
With Copy To: Howard ("Butch") Kerzner
Sun International
Executive Offices
Coral Towers
Paradise Island, the Bahamas
Telecopy No. (242) 363-4581
If to Waterford Gaming: Len Wolman
c/o LMW Investments, Inc.
914 Hartford Turnpike
P. O. Box 715
Waterford, CT 06385
Telecopy No. (860) 437-7752
With Copy To: Slavik Suites, Inc.
32605 W. Twelve Mile Road
Suite 350
Farmington Hills, MI 48334
Att'n: Del J. Lauria
Telecopy No. (248) 488-5543
11. Amendments. This Agreement may be amended or modified only by
written instrument executed by all of the parties hereto.
12. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York.
13. Severability. If any provision hereof shall be judicially determined
to be illegal, or if the application thereof to any party or in any
circumstance shall, to any extent, be judicially determined to be invalid or
unenforceable, the remainder of this Agreement, or the application of such
provision to parties or in circumstances other than those to which it has
been judicially determined to be invalid or unenforceable, shall not be
affected thereby, and each provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same Agreement.
15. Further Assurances. The parties will execute and deliver such
further instruments and undertake such further actions as may be required to
carry out the intent and purposes of this Agreement.
16. Successors and Assigns. Subject to the restrictions on
transferability contained in Paragraph 8 hereof, this Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and
their respective successors and assigns.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on
September 10, 1997, to be effective the day and year first above written.
TRADING COVE ASSOCIATES,
By: SUN COVE, LTD.,
By:/s/Howard Kerzner
Name:
Title:
By: WATERFORD GAMING, L.L.C.,
By: /s/Len Wolman
Name:
Title:
SLAVIK SUITES, INC.
By:/s/Len Wolman
Name:
Title:
WATERFORD GAMING, L.L.C.
By:/s/Len Wolman
Name:
Title:
SUN INTERNATIONAL MANAGEMENT
LIMITED,
By:/s/Charles Adamo
Name:
Title:
LMW INVESTMENTS, INC.,
By:/s/Len Wolman
Name:
Title:
EXECUTION COPY
DEVELOPMENT SERVICES AGREEMENT dated as of September 29, 1995, between
TRADING COVE ASSOCIATES, a Connecticut general partnership ("TCA"), and SUN
INTERNATIONAL MANAGEMENT LIMITED, a Bahamian corporation ("SIML"). Capitalized
terms used herein but not defined shall have the meaning set forth in the
Amended and Restated Partnership Agreement of TCA dated as of September 21,
1994, as amended (the "TCA Partnership Agreement").
WHEREAS, TCA, through its Original Partners, secured a conditional
opportunity to develop, construct, and manage a casino in Montville,
Connecticut (the "Project") for the Mohegan Tribe of Indians of Connecticut
(the "Tribe");
WHEREAS, the location of the Project is near the Foxwoods Resort and
Casino ("Foxwoods") which has approximately 3,800 slot machines and 200 table
games, has been operating for nearly three years and is the largest gaming
facility in the United States;
WHEREAS, the Tribe was only willing to retain TCA as manager if TCA was
capable of developing and managing the construction of a large world class
facility capable of competing with Foxwoods;
WHEREAS, TCA, being incapable of developing and managing the construction
of such a facility, desired to enter into a sub-contract with SIML pursuant to
which SIML will develop and manage the construction of the Project;
WHEREAS, SIML has developed numerous world class facilities capable of
competing with Foxwoods and was willing to develop and manage the construction
of the Project as a sub-contractor to TCA pursuant to the terms hereto; and
WHEREAS, the TCA Partnership Agreement provides for TCA to enter into this
Development Services Agreement.
NOW THEREFORE, the parties hereto agree as follows:
1. Design Services. SIML, as sub-contractor to TCA, shall provide the
following design services in connection with the Project:
(a) SIML shall provide conceptual plans for the Project consistent with
a world class casino property. The theme of the conceptual plans shall reflect
the culture, history and art of the Tribe;
(b) SIML shall investigate and recommend various design consultants to
be retained in connection with the Project (the "Design Consultants"),
including without limitations, a primary architect, an MEP consultant, a
structural engineer consultant, a site and landscape architect, an interior
design consultant, a lighting architect, a food and beverage consultant and
a design architect.
(c) SIML shall manage the Design Consultants through the schematic design
phase, the design development phase and the construction document phase, and,
with the assistance of the Design Consultants, SIML shall provide a preliminary
evaluation of the schedule and construction budget for the Project and shall
monitor such schedule and budget as the Project develops.
2. Construction Services. SIML, as sub-contractor to TCA, shall
provide the following construction services in connection with the Project:
(a) SIML shall assist in the selection of a general contractor for the
Project and the negotiation of a GMP contract; and
(b) SIML shall provide comprehensive construction management services
for the Project, including administration of the construction documents and
on site supervision of the construction of the Project.
3. Local Services. SIML agrees that it will sub-contract with one or
more of the Partners of TCA, or one or more of their affiliates (the "Local
Subcontractors") to provide local construction management services in
connection with the Project.
4. Fees and Payment Terms. In consideration of the services provided
hereunder, TCA shall pay to SIML a fee (the "Development Services Fee") equal
to $8,280,000, constituting 3% of the total development costs of the Project
(which development costs shall include all so-called hard and soft costs with
respect to the construction of the Project, except land acquisition costs) plus
an additional $25,000 for any out-of-pocket costs and expenses it might incur.
SIML agrees that it shall pay the Local Subcontractors in the aggregate 20.83%
of the Development Services Fee plus an additional $25,000 for expense
reimbursement, as and when received, payable rateably.
5. Indemnification. SIML its affiliates, parents, subsidiaries,
controlling shareholders and officers and directors (collectively, the
"Indemnified Parties") shall not be liable to TCA by reason of any act
performed for or on behalf of TCA hereunder, or in the furtherance of TCA
business, or any omission to act, except for acts or omissions that constitute
a material breach of any provision of this Agreement, gross negligence, fraud
or bad faith. TCA shall indemnify, defend and hold harmless the Indemnified
Parties from any claim, demand or liability, and from any loss, cost or expense,
including, but not limited to, attorneys' fees and court costs, which may be
made or imposed upon them by reason of any act performed for or on behalf of
TCA or in furtherance of TCA's business, or any omission to act, except for
acts and omissions that constitute a material breach of any provision of this
Agreement, gross negligence, fraud or bad faith. Notwithstanding anything
contained herein to the contrary, the parties agree that if the assets of TCA
are insufficient to satisfy the obligations set forth in this section, the
partners of TCA shall bear the indemnification liability set forth herein in
proportion to their respective percentage interest in TCA and, in no event,
shall the Indemnified Partners have the right to assert claims pursuant to this
section against partners of TCA in excess of each such partner's percentage
interest in TCA.
6. Assignments. Except as otherwise contemplated by Section 3 hereof,
neither party may assign its rights and/or obligations under this Agreement,
except: (i) to an affiliate of such party, or (ii) with the prior written
consent of all parties hereto. Any assignment shall be subject to and made
in accordance with applicable gaming, securities or other laws.
7. Authorization; Representations and Warranties. Each party represents
and warrants to the other that:
(a) The execution, delivery, and performance by it of this Agreement and
the transactions contemplated herein have been duly authorized by all necessary
action, and the individual(s) executing this Agreement on its behalf are duly
authorized to do so;
(b) It is duly organized and in good standing under the laws of the
jurisdiction of its formation; and
(c) The execution, delivery and performance of this Agreement does not
and shall not violate any existing agreement, bylaw, statute, rule, regulation
and/or ordinance applicable to such party or its execution, delivery and/or
performance of this Agreement.
7. Notices. All notices hereunder shall be deemed properly given upon
(i) receipt by the addressee by personal delivery or facsimile transmission,
(ii) two (2) business days after delivery by an overnight express delivery
service for the next business day delivery, or (iii) if mailed, upon the
first to occur of receipt or the expiration of five (5) business days after
deposit in United States Postal Service certified mail, postage prepaid,
addressed to the parties at the addresses appearing below. Such addresses
may be changed by notice given in the same manner.
If to TCA: Len Wolman
c/o LMW Investments, Inc.
914 Hartford Turnpike
P.O. Box 715
Waterford, CT 06385
Telecopy No. (860) 437-7752
With Copy to: Honigman, Miller, Schwartz and Cohn
2290 First National Building
Detroit, MI 48226
Attn: Sheldon P. Winkelman, Esq.
Telecopy No. (313) 962-0176
If to SIML: Howard ("Butch") Kerzner
Sun International
Executive Offices
Atlantis, Coral Towers
Paradise Island, The Bahamas
Telecopy No. (242) 363-4581
8. Amendments. This Agreement may be amended or modified only by
written instrument executed by all of the parties hereto.
9. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York.
10. Severability. If any provision hereof shall be judicially
determined to be illegal, or if the application thereof to any party or in
any circumstance shall, to any extent, be judicially determined to be invalid
or unenforceable, the remainder of this Agreement, or the application of such
provision to parties or in circumstances other than those to which it has been
judicially determined to be invalid or unenforceable, shall not be affected
thereby, and each provision of this Agreement shall be valid and enforceable
to the fullest extent permitted by law.
11. Counterparts. This Agreement may be executed by facsimile and in
any number of counterparts, each of which shall constitute an original and
all of which together shall constitute one and the same Agreement.
12. Further Assurances. The parties will execute and deliver such
further instruments and undertake such further actions as may be required to
carry out the intent and purposes of this Agreement.
13. Successors and Assigns. Subject to the restrictions on
transferability contained in Paragraph 6 hereof, this Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective successors and assigns.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on
September 10, 1997, to be effective on the day and year first above written.
TRADING COVE ASSOCIATES
By: SUN COVE, LTD.
By: /s/Howard Kerzner
Name:
Title:
By: WATERFORD GAMING L.L.C.
By: /s/Len Wolman
Name:
Title:
SUN INTERNATIONAL MANAGEMENT
LIMITED
By: /s/Charles Adamo
Name:
Title:
SUBDEVELOPMENT SERVICES AGREEMENT
This Agreement is made as of September 29, 1995 between Sun International
Management Limited, a British Virgin Island corporation ("SIML") and Wolman
Construction, L.L.C., a Connecticut limited liability company ("Wolman").
PRELIMINARY STATEMENT
The following is a recital of certain facts upon which this Agreement
is based:
As of September 29, 1995, Trading Cove Associates, a Connecticut general
partnership ("TCA") and SIML entered into a Development Services Agreement
(the "Development Services Agreement") pursuant to the terms of which TCA
engaged the services of SIML to perform certain services as subcontractor to
TCA with respect to the development of a casino in Montville, Connecticut for
the Mohegan Tribe of Indians of Connecticut. Capitalized terms used herein
not defined shall have the meanings set forth in the Development Services
Agreement.
SIML wishes to retain the services of Wolman as a subcontractor to
assist SIML in meeting its obligations under the Development Services
Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. Local Construction Management Services. SIML hereby retains the
services of Wolman as a subcontractor to provide local construction management
services in connection with the Project. Wolman agrees to perform local
construction management services in accordance with the terms of the
Development Services Agreement.
2. Fees and Payment Terms. In consideration of the services to be
provided, SIML agrees to pay Wolman 20.83% of the Development Services Fee,
which Development Services Fee is equal to $8,280,000, plus an additional
$25,000 for expense reimbursement (collectively, the "Wolman Amount"), as
and when received by SIML from TCA in accordance with the terms of the
Development Services Agreement which shall be payable ratably.
3. Payment Direction. SIML hereby directs TCA to pay directly to Wolman
the Wolman Amount ratably out of the Development Services Fee at such time as
amounts are payable by TCA under the Development Services Agreement.
4. Indemnification. Wolman and its affiliates, parents, subsidiaries and
controlling members (collectively, the "Indemnified Parties") shall not be
liable to SIML by reason of any act performed for or on behalf of SIML
hereunder, or in the furtherance of SIML business, or any omission to act,
except for acts or omissions that constitute a material breach of any
provision of this Agreement, gross negligence, fraud or bad faith. SIML
shall indemnify, defend and hold harmless the Indemnified Parties from any
claim, demand or liability, and from any loss, cost or expense, including
but not limited to, attorneys' fees and court costs, which may by made or
imposed upon them by reason of any act performed for or on behalf of SIML
or in furtherance of SIML's business, or any omission to act, except for
acts and omissions that constitute a material breach of any provision of this
Agreement, gross negligence, fraud or bad faith.
5. Authorization; Representations and Warranties. Each party represents
and warrants to the other that:
(a) The execution, delivery, and performance by it of this Agreement and
the transactions contemplated herein have been duly authorized by all necessary
action, and the individual(s) executing this Agreement on its behalf are duly
authorized to do so;
(b) It is duly organized and in good standing under the laws of the
jurisdiction of its formation; and
(c) The execution, delivery and performance of this Agreement does not
and shall not violate any existing agreement, bylaw, statute, rule,
regulation and/or ordinance applicable to such party or its execution,
delivery and/or performance of this Agreement.
6. Notices. All notices hereunder shall be deemed properly given upon
(i) receipt by the addressee by personal delivery or facsimile transmission,
(ii) two (2) business days after delivery by an overnight express delivery
service for the next business day delivery, or (iii) if mailed, upon the
first to occur of receipt or the expiration of five (5) business days after
deposit in United States Postal Service certified mail, postage prepaid,
addressed to the parties at the addresses appearing below. Such addresses
may be changed by notice given in the same manner.
If to Wolman: Len Wolman
c/o Wolman Construction, L.L.C.
914 Hartford Turnpike
P.O. Box 715
Waterford, CT 06385
Telecopy: 860-437-7752
With Copy to: Honigman Miller Schwartz and Cohn
2290 First National Building
660 Woodward
Detroit, Michigan 48226
Attn: Sheldon P. Winkelman, Esq.
Telecopy: 313-962-0176
If to SIML: Howard ("Butch") Kerzner
c/o Sun International Management (UK) Ltd
Executive Offices, Coral Towers
Paradise Island, The Bahamas
Telecopy: 242-363-4581
7. Amendments. This Agreement may be amended or modified only by written
instrument executed by all of the parties hereto.
8. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York.
9. Severability. If any provision hereof shall be judicially determined
to be illegal, or if the application thereof to any party or in any
circumstance shall, to any extent, be judicially determined to be invalid or
unenforceable, the remainder of this Agreement, or the application of such
provision to parties or in circumstances other than those to which it has
been judicially determined to be invalid or unenforceable, shall not be
affected thereby, and each provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
10. Counterparts. This Agreement may be executed by facsimile and in any
number of counterparts, each of which shall constitute an original and all of
which together shall constitute one and the same Agreement.
11. Further Assurances. The parties will execute and deliver such further
instruments and undertake such further actions as may be required to carry out
the intent and purposes of this Agreement.
12. Successors and Assigns. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and assigns.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on
September 10, 1997, to be effective on the day and year first above written.
SUN INTERNATIONAL MANAGEMENT
LIMITED, a British Virgin Island corporation
By: /s/Charles Adamo
Its: __________________________
WOLMAN CONSTRUCTION, L.L.C., a
Connecticut limited liability company
By: /s/Len Wolman
Its: __________________________
The undersigned acknowledges the payment direction contained in Paragraph 3
above and agrees to act in accordance with such direction.
TRADING COVE ASSOCIATES
By: Sun Cove, Ltd.
By:/s/Howard Kerzner
Name:
Title:
By: Waterford Gaming, L.L.C.
By:/s/Len Wolman
Name:
Title:
EXECUTION COPY
COMPLETION GUARANTEE AND INVESTMENT BANKING AND FINANCING ARRANGEMENT
FEE AGREEMENT dated as of September 29, 1995, among TRADING COVE ASSOCIATES,
a Connecticut general partnership ("TCA"), WATERFORD GAMING L.L.C., a Delaware
limited liability company and successor to the interests of the Original
Partners of TCA ("Waterford"), and SUN INTERNATIONAL HOTELS LIMITED, a
Bahamian corporation ("SIHL"). Capitalised terms used herein but not defined
shall have the meaning set forth in the Amended and Restated Partnership
Agreement of TCA dated as of September 21, 1994, as amended (the "TCA
Partnership Agreement").
WHEREAS, TCA, through its Original Partners, secured a conditional
opportunity to develop and manage a casino in Montville, Connecticut (the
"Project") with the Mohegan Tribe of Indians of Connecticut (the "Tribe");
WHEREAS, the location of the Project is near the Foxwoods Resort and
Casino ("Foxwoods") which has approximately 3,800 slot machines and 200
table games, has been operating for several years and is the largest gaming
facility in the United States;
WHEREAS, the Tribe was only willing to retain TCA as manager if TCA
was capable of arranging the financing, development and construction of a
large world class facility capable of competing with Foxwoods;
WHEREAS, TCA, being incapable of arranging the financing, development
and construction of such a facility, desired to enter into a subcontract
with SIHL pursuant to which SIHL would arrange the financing, development
and the construction of the Project;
WHEREAS, Bear Stearns & Co. was not willing to act as financial advisor
to the Tribe and TCA unless SIHL specifically became a party to an engagement
letter (the "Engagement Letter") pursuant to which Bear Stearns & Co. would
underwrite $175 million of senior debt for the Project (the "Senior Debt");
WHEREAS, Bear Stearns & Co. advised TCA and the Tribe that it would be
impossible to raise the Senior Debt and to finance the Project without (i)
the acquisition by TCA or one of its partners or affiliates thereof of $40
million of subordinated debt of the Tribe or a tribal entity (the
"Subordinated Notes"), (ii) a completion guarantee executed by SIHL (the
"Completion Guarantee") pursuant to which SIHL would obligate itself to
complete construction of the Project and to loan the Tribe up to an additional
$50 million by purchasing additional subordinated debt (the "Completion
Guarantee Subordinated Notes"), (iii) a pledge of 1,500,000 shares of SIHL
stock with a market value of approximately $43 million (the "Pledge") as
collateral for SIHL's obligation under the Completion Guarantee and (iv) a
letter of credit in an amount of $15 million (the "Letter of Credit") to
support SIHL's obligation under the Completion Guarantee;
WHEREAS, TCA, being incapable of acquiring the Subordinated Notes, any
Completion Guarantee Subordinated Notes or performing under the Completion
Guarantee requested SIHL, as subcontractor, to acquire the Subordinated Notes,
execute the Completion Guarantee and the Engagement Letter and provide the
Pledge and the Letter of Credit;
WHEREAS, on September 29, 1995 in order to facilitate the underwriting
of the Senior Debt and the financing of the Project, TCA acquired $1.7 million
of Subordinated Notes and SIHL (i) acquired $38.3 million of Subordinated Notes
from the Mohegan Tribal Gaming Authority, an instrumentality of the Tribe
("MTGA") (ii) executed the Completion Guarantee obligating itself to complete
the Project and acquire up to $50 million of Completion Guarantee Subordinated
Notes, (iii) caused the Pledge to be made, (iv) caused the Letter of Credit to
be posted and (v) executed the Engagement Letter.
WHEREAS, as a result of SIHL performing the services set forth in this
Agreement, the Tribe entered into the Amended and Restated Gaming Facility
Management Agreement dated September 29, 1995,with TCA pursuant to which
the Tribe is obligated to pay to TCA certain management fees (the "TCA
Management Fees");
WHEREAS, MTGA, as issuer of the Subordinated Notes, is obligated to pay
interest thereon at a rate per annum equal to 15%, with interest payments due
semi-annually on the interest payment dates of May 15 and November 15 as set
forth in the Subordinated Notes (the "Interest Payment Dates") with respect
to the six month periods ending, respectively, on the preceding April 30 and
October 31 (each, a Semi-Annual Period); provided, however, pursuant to the
Indenture dated September 29, 1995 relating to the Senior Debt (the "Senior
Note Indenture"), MTGA is prohibited from paying cash interest on the
Subordinated Notes on any Interest Payment Date unless certain financial tests
are met; in which case, for purposes of this Agreement, on any Interest
Payment Date that interest is not paid in cash, such interest shall be
considered paid-in-kind (the "Subordinated Note PIK Amount") and on the
first day after the applicable Semi-Annual Period the principal amount of
Subordinated Notes shall be deemed increased by and to include the
Subordinated Note PIK Amount;
WHEREAS, the Project was completed on October 8, 1996, and between
August 20, 1996 and January 3, 1997, SIHL funded $50 million under the
Completion Guarantee and acquired $50 million of Completion Guarantee
Subordinated Notes;
WHEREAS, MTGA, as issuer of the Completion Guarantee Subordinated
Notes, is obligated to pay interest on the Completion Guarantee Subordinated
Notes at a rate per annum equal to the sum of the prime rate announced from
time to time by the Chase Manhattan Bank ( which, for purposes of this
Agreement, shall be understood to be set on the first day of the applicable
Semi-Annual Period) plus 1% (the "Base Rate"), with interest payments due for
the applicable Semi-Annual Period on the applicable Interest Payment Date;
provided, however, pursuant to the Senior Note Indenture, MTGA is prohibited
from paying cash interest on any Completion Guarantee Subordinated Notes on
any Interest Payment Date unless certain financial conditions are met; in
which case, for purpose of this Agreement, on such Interest Payment Date that
interest is not paid in cash on $17.5 million principal amount of Completion
Guarantee Subordinated Notes (the "PIK Completion Guarantee Notes"), such
interest shall be considered paid-in-kind (the "Completion Guarantee PIK
Amount") and on the first day after the applicable Semi-Annual Period the
principal amount of PIK Completion Guarantee Notes shall be deemed increased
by and to include the Completion Guarantee PIK Amount;
WHEREAS, with respect to $32.5 million of Completion Guarantee
Subordinated Notes (the "Non-PIK Completion Guarantee Notes"), for purposes
of this Agreement, the principal amount of Non-PIK Completion Guarantee Notes
shall not be deemed increased as a result of the failure of MTGA to pay any
interest due thereon in cash; and
WHEREAS, SIHL is the holder of the Non-PIK Completion Guarantee Notes
and the PIK Completion Guarantee Notes;
NOW THEREFORE, the parties hereto agree as follows:
1. Investment Banking and Financial Structuring Services. It is hereby
acknowledged that SIHL, as subcontractor to TCA, arranged, structured and
negotiated the terms of the financing of the Project, including, without
limitation, the Senior Debt, Subordinated Notes, equipment financing and
bank financing, and it is further acknowledged that by acquiring the
Subordinated Notes, executing the Completion Guarantee, causing the Pledge
to be made and the Letter of Credit to be posted, and becoming a party to the
Engagement Letter, SIHL provided valuable services that enabled the Project
to be financed and developed.
2. Fees and Payment Terms. TCA and SIHL recognise that part of the
fees payable hereunder are to compensate SIHL for its exposure under the
Subordinated Notes and the Completion Guarantee Subordinated Notes and
accordingly, such fees should be reduced or increased based upon the
outstanding principal amount of Subordinated Notes and Completion Guarantee
Subordinated Notes held by SIHL. It is further recognized that SIHL shall
be permitted to sell and transfer its right to receive fees associated with
the Subordinated Notes and Completion Guarantee Subordinated Notes. This
principle being established, the parties agree that TCA shall pay SIHL
or one or more of its affiliates for the services rendered under this
Agreement the fees set forth below; provided, however, such fees shall be
payable only to the extent that TCA receives TCA Management Fees from the
Tribe in amounts adequate to pay such fees and meet its other obligations
and to the extent that TCA has not received adequate TCA Management Fees to
make the payments set forth below on the dates specified and meet its other
obligations, such fees shall be deferred (without the accrual of interest)
until TCA has received sufficient TCA Management Fees to pay them:
(i) $5,520,000, constituting two percent (2%) of the total
development costs of the Project (all so-called hard and
soft costs with respect to construction of the Project,
except land acquisition costs) shall be payable on October
8, 1996;
(ii) $2,500,000 shall be payable on April 30, 1996, and
$2,500,000 shall be payable on October 31, 1996;
(iii) $2,700,000 shall be payable on April 30, 1997;
(iv) every six months, beginning October 31, 1997, there shall
be payable an amount equal to the product of (1) $2,300,000
and (2) a fraction, the numerator of which is the weighted
average principal amount of Subordinated Notes outstanding
during the applicable Semi-Annual Period (including all
Subordinated Note PIK Amounts) and the denominator of which
is $40,000,000;
(v) $525,000 shall be payable on October 31, 1996, $2,600,000
shall be payable on April 30, 1997, and every six months,
beginning October 31, 1997, there shall be payable an amount
equal to the product of the (a) the number arrived at by
dividing the difference between (26 1/2 % and the Base Rate)
by two (the "Multiplier") and (2) weighted average of
principal amount of Non-PIK Completion Guarantee Notes
outstanding during the applicable Semi-Annual Period;
(vi) $80,000 shall be payable on October 31, 1996, $1,350,000
shall be payable on April 30, 1997, and every six months,
beginning October 31, 1997, there shall be payable an amount
equal to the product of (1) the Multiplier and (2) the weighted
average of principal amount of PIK Completion Guarantee Notes
(including all Completion Guarantee PIK Amounts) outstanding
during the applicable Semi-Annual Period;
3. Obligation to acquire Certain Deferred Interest. On November 15,
1996, and on each Interest Payment Date thereafter for so long as MTGA does
not pay cash interest with respect to the Non-PIK Completion Guarantee Notes
(the "Deferred Interest Amount") TCA shall acquire from SIHL, the Deferred
Interest Amount, for a purchase price equal to the face value of the Deferred
Interest Amount (the "Purchase Price"). To the extent that TCA has not
received sufficient TCA Management Fees to acquire the applicable Deferred
Interest Amount on the applicable Interest Payment Date, such acquisition shall
be postponed until it has received sufficient TCA Management Fees. If such
acquisition does not occur before the next Interest Payment Date, the Purchase
Price payable to SIHL shall accrue interest at the Base Rate from such next
Interest Payment Date until such time as such acquisition is consummated. Any
acquisition contemplated by this paragraph 3 shall be effected by the execution
of a sale document in the form attached hereto as Exhibit A. SIHL agrees that
at such time as MTGA pays SIHL any amounts relating to the Non-PIK Completion
Guarantee Notes (other than current interest), such amounts that relate to the
Deferred Interest Amounts acquired pursuant to this paragraph 3 shall be
immediately paid over to TCA.
4. Acquisition of Certain SIHL Subordinated Notes. On November 8,
1996, Waterford acquired from SIHL certain Subordinated Notes and SIHL has
assigned to Waterford its right to receive $2,500,000 of the fees payable
pursuant to subparagraph (ii) of Section 2 of this Agreement. As a result
of this acquisition the parties acknowledge that, SIHL has assigned to
Waterford its right to receive fees of $1,350,000 that have accrued pursuant
to subparagraph (iii) of Section 2 of this Agreement as of April 30, 1997.
It is further acknowledged that as a result of this acquisition, Waterford
and SIHL each hold 50% of the Subordinated Notes (including all Subordinated
Note PIK Amounts), and, accordingly, from May 1, 1997, each of SIHL and
Waterford shall be entitled to one half of the fee set forth in subparagraph
(iv) of Section 2 of this Agreement.
5. Certain Expenses. TCA shall reimburse SIHL for the out of pocket
expenses (without premium) incurred solely for the purpose of arranging the
purchase of the Subordinated Notes; such reimbursement shall not in any case
exceed $1,000,000. On each anniversary such Letter of Credit is outstanding,
TCA shall pay SIHL a fee equal to the costs incurred by SIHL or its affiliates
in posting such Letter of Credit plus 1% of the principal amount thereof;
provided, however, the amount payable to SIHL by TCA shall not exceed for any
one year 2% of the undrawn and outstanding principal amount of such Letter
of Credit. The parties acknowledge that the obligations set forth in this
paragraph 5 have been fully satisfied.
6. Acquisition of certain Non-PIK Completion Guarantee Notes. On each
of October 12, 1997, October 12, 1998 and October 12, 1999 (each a "Closing
Date"), Waterford shall purchase from SIHL, and SIHL shall sell to Waterford,
for full value, (i) one-sixth of the outstanding principal amount of the first
funded $15 million of Non-PIK Completion Guarantee Notes (ii) all accrued and
unpaid interest thereon not otherwise paid by TCA pursuant to paragraph 3
hereof and (iii) all accrued and unpaid fees calculated pursuant to
subparagraph (v) of Section 2 of this Agreement attributable to the portion
of Non-PIK Completion Guarantee Notes being acquired. Such sale shall be
effected by the execution of a sale document in the form of Exhibit B attached
hereto. Upon the acquisition of the Non-PIK Completion Guarantee Notes
pursuant to this paragraph 6, Waterford shall become obligated to pay over to
TCA any amounts it receives from MTGA in connection with such Non-PIK
Completion Guarantee Notes in accordance with the principle set forth in
the last sentence of paragraph 3 hereof.
7. Assignments. Neither party may assign its rights and/or obligations
under this Agreement, except: (i) to a Partner or any affiliate of a Partner,
or (ii) with the prior written consent of all parties hereto. Any assignment
shall be subject to and made in accordance with applicable gaming, securities
or other laws and the assignee shall agree to be bound by the terms of this
Agreement.
8. Authorization; Representations and Warranties. Each party represents
and warrants to the other that:
(a) The execution, delivery, and performance by it of this Agreement
and the transactions contemplated herein have been duly authorized by all
necessary action, and the individual(s) executing this Agreement on its behalf
are duly authorized to do so;
(b) It is duly organized and in good standing under the laws of the
jurisdiction of its formation; and
(c) The execution, delivery and performance of this Agreement does
not and shall not violate any existing agreement, bylaw, statute, rule,
regulation and/or ordinance applicable to such party or its execution, delivery
and/or performance of this Agreement.
9. Notices. All notices hereunder shall be deemed properly given upon
(i) receipt by the addressee by personal delivery or facsimile transmission,
(ii) two (2) business days after delivery by an overnight express delivery
service for the next business day delivery, or (iii) if mailed, upon the first
to occur of receipt or the expiration of five (5) business days after deposit
in United States Postal Service certified mail, postage prepaid, addressed to
the parties at the addresses appearing below. Such addresses may be changed by
notice given in the same manner.
If to TCA: Len Wolman
c/o LMW Investments, Inc.
914 Hartford Turnpike
P.O. Box 715
Waterford, CT 06385
Telecopy No. (860) 437-7752
With Copy to: Honigman, Miller, Schwartz and Cohn
2290 First National Building
Detroit, MI 48226
Attn: Sheldon P. Winkelman, Esq
Telecopy No. (313) 962-0176
If to SIHL: Howard ("Butch") Kerzner
Sun International Hotels Limited
Executive Offices
Atlantis, Coral Towers
Paradise Island, The Bahamas
Telecopy No. (242) 363-4581
10. Amendments. This Agreement may be amended or modified only by
written instrument executed by all of the parties hereto.
11. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York.
12. Severability. If any provision hereof shall be judicially determined
to be illegal, or if the application thereof to any party or in any
circumstance shall, to any extent, be judicially determined to be invalid or
unenforceable, the remainder of this Agreement, or the application of such
provision to parties or in circumstances other than those to which it has
been judicially determined to be invalid or unenforceable, shall not be
affected thereby, and each provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
13. Counterparts. This Agreement may be executed by facsimile and in
any number of counterparts, each of which shall constitute an original and
all of which together shall constitute one and the same Agreement.
14. Further Assurances. The parties will execute and deliver such
further instruments and undertake such further actions as may be required to
carry out the intent and purposes of this Agreement.
15. Successors and Assigns. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on
September 10, 1997, to be effective as of the day and year first above written.
TRADING COVE ASSOCIATES,
By: SUN COVE, LTD.,
By: /s/Howard Kerzner
Name:
Title:
By: WATERFORD GAMING, L.L.C.,
By: /s/Len Wolman
Name:
Title:
SUN INTERNATIONAL HOTELS LIMITED,
By: /s/Charles Adamo
Name:
Title:
WATERFORD GAMING, L.L.C.,
By: /s/Len Wolman
Name:
Title:
EXHIBIT A
Pursuant to the Completion Guarantee and Investment Banking and
Financing Arrangement Fee Agreement dated as of September 29, 1995 (the
"Agreement"), between Sun International Hotels Limited ("SIHL") and Trading
Cove Associates ("TCA"), SIHL for value received in cash of $______________,
hereby sells and transfers to TCA, $________________ of Deferred Interest
Amount (as defined in paragraph 3 of the Agreement). Set forth below is
the total amount of Deferred Interest Amount outstanding as on the date of
this sale, and the amount of Deferred Interest being sold hereunder.
Deferred Interest Amount $_________________
Amount sold hereunder $_________________
EXHIBIT B
Pursuant to Section 6 of the Completion Guarantee and Investment Banking
and Financing Arrangement Fee Agreement dated as of September 29, 1995 (the
"Agreement"), among Sun International Hotels Limited ("SIHL"), Trading Cove
Associates ("TCA") and Waterford Gaming, L.L.C., ("Waterford"), SIHL for
value received in cash of $________________, hereby sells and transfers to
Waterford the following:
$_______________ of principal amount of Non-PIK Completion Guarantee Notes
$_______________ of accrued and unpaid interest thereon not paid by TCA
pursuant to paragraph 3 of the Agreement
$_______________ of accrued and unpaid fees described in Section 2(v) of the
Agreement relating to such Non-PIK Completion Guarantee
Notes
