<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 20, 1997.
REGISTRATION STATEMENT NO 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM F-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SUN INTERNATIONAL HOTELS LIMITED
SUN INTERNATIONAL NORTH AMERICA, INC.
(EXACT NAME OF EACH REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
COMMONWEALTH OF THE BAHAMAS 7011 98-013655
DELAWARE 7011 59-0763055
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
SEE TABLE OF ADDITIONAL REGISTRANTS
<TABLE>
<S> <C>
SUN INTERNATIONAL HOTELS LIMITED SUN INTERNATIONAL NORTH AMERICA, INC.
CORAL TOWERS 1133 BOARDWALK
PARADISE ISLAND, THE BAHAMAS ATLANTIC CITY, NJ 08401
(242) 363-2516 (609) 344-6000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF PRINCIPAL EXECUTIVE OFFICES OF INCLUDING AREA CODE, OF PRINCIPAL EXECUTIVE OFFICES OF
SUN INTERNATIONAL HOTELS LIMITED) SUN INTERNATIONAL NORTH AMERICA, INC.)
</TABLE>
MANDY E. MILLER, ESQ.
SUN INTERNATIONAL HOTELS LIMITED
10TH FLOOR, 1415 E. SUNRISE BLVD.
FT. LAUDERDALE, FL 33304
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
JAMES M. EDWARDS, ESQ. CHARLES D. ADAMO, ESQ.
CRAVATH, SWAINE & MOORE SUN INTERNATIONAL HOTELS LIMITED
825 EIGHTH AVENUE CORAL TOWERS
NEW YORK, NY 10019 PARADISE ISLAND, THE BAHAMAS
</TABLE>
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED UNIT(2)(3) PRICE(2)(3) FEE(4)
<S> <C> <C> <C> <C>
9% Senior Subordinated Notes due 2007
(1).................................. $200,000,000 100% $200,000,000 $60,606
</TABLE>
(1) The Guarantees by Sun International Bahamas Limited, Paradise Acquisitions
Limited, Paradise Island Limited, Paradise Enterprises Limited, Island Hotel
Company Limited, Paradise Beach Inn Limited, Sun International Management
Limited, GGRI, Inc., Resorts International Hotel, Inc. and Sun Cove, Ltd. of
the payment of principal, premium, if any, and interest on the Notes are
also being registered hereby. Pursuant to Rule 457(n), no registration fee
is required with respect to such guarantees.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) Exclusive of accrued interest, if any.
(4) Calculated pursuant to Rule 457.
--------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF ADDITIONAL REGISTRANTS
<TABLE>
<CAPTION>
PRIMARY STANDARD
INDUSTRIAL I.R.S. EMPLOYER
NAME, ADDRESS AND TELEPHONE NUMBER OF JURISDICTION OF CLASSIFICATION IDENTIFICATION
ADDITIONAL REGISTRANTS ORGANIZATION CODE NUMBER NO.
- -------------------------------------------------- --------------------- ------------------- -----------------
<S> <C> <C> <C>
Sun International Bahamas Limited
Coral Towers
Paradise Island, The Bahamas Commonwealth of The
(242) 363-2516 Bahamas 7011 Not Applicable
Paradise Acquisitions Limited
Coral Towers
Paradise Island, The Bahamas Commonwealth of The
(242) 363-2516 Bahamas 7011 Not Applicable
Paradise Island Limited
Coral Towers
Paradise Island, The Bahamas Commonwealth of The
(242) 363-2516 Bahamas 7011 Not Applicable
Paradise Enterprises Limited
Coral Towers
Paradise Island, The Bahamas Commonwealth of The
(242) 363-2516 Bahamas 7011 Not Applicable
Island Hotel Company Limited
Coral Towers
Paradise Island, The Bahamas Commonwealth of The
(242) 363-2516 Bahamas 7011 Not Applicable
Paradise Beach Inn Limited
Coral Towers
Paradise Island, The Bahamas Commonwealth of The
(242) 363-2516 Bahamas 7011 Not Applicable
Sun International Management Limited
Coral Towers
Paradise Island, The Bahamas British Virgin
(242) 363-2516 Islands 7011 Not Applicable
GGRI, Inc.
10th Floor, 1415 E. Sunrise Blvd.
Ft. Lauderdale, FL 33304
(954) 713-2500 Delaware 7011 22-2962648
Resorts International Hotel, Inc.
1133 Boardwalk
Atlantic City, NJ 08401
(609) 344-6000 New Jersey 7011 21-0423320
Sun Cove, Ltd.
10th Floor, 1415 E. Sunrise Blvd.
Ft. Lauderdale, FL 33304
(954) 713-2500 Connecticut 7011 36-4041616
</TABLE>
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
SUN INTERNATIONAL NORTH AMERICA, INC.
CROSS REFERENCE SHEET
SHOWING THE LOCATION OF INFORMATION REQUIRED BY
PART I OF FORM F-4
<TABLE>
<CAPTION>
NO. CAPTION LOCATION OR CAPTION IN PROSPECTUS
--- ------------------------------------------------------ ------------------------------------------------------
<C> <S> <C>
1. Forepart of Registration Statement and Outside Front
Cover Page of Prospectus............................ Outside Front Cover
2. Inside Front and Outside Back Cover Pages of
Prospectus.......................................... Inside Front Cover Page; Back Cover Page; Available
Information; Enforceability of Civil Liabilities
3. Risk Factors, Ratio of Earnings to Fixed Charges and
Other Information................................... Prospectus Summary; Risk Factors; Business; Selected
Financial and Operating Data; The Exchange Offer
4. Terms of the Transaction.............................. Outside Front Cover; Prospectus Summary; The Exchange
Offer; Description of Notes; Risk Factors; Tax
Consequences
5. Pro Forma Financial Information....................... Prospectus Summary; Pro Forma Consolidated Statements
of Operations; Selected Financial and Operating
Data; Consolidated Financial Statements
6. Material Contacts With the Company Being Acquired..... Not Applicable
7. Additional Information Required for Reoffering by
Persons and Parties Deemed to be Underwriters....... Not Applicable
8. Interests of Named Experts and Counsel................ Legal Matters
9. Disclosure of Commission Position on Indemnification
for Securities Act Liabilities...................... Not Applicable
10. Information with Respect to F-3 Companies............. Prospectus Summary; Risk Factors; Business; Use of
Proceeds; Capitalization; Selected Financial and
Operating Data; Pro Forma Consolidated Statements of
Operations; Management's Discussion and Analysis of
Financial Condition and Results of Operations;
Management; Tax Consequences; Consolidated Financial
Statements
11. Incorporation of Certain Information by References.... Incorporation of Certain Documents by Reference
12. Information with Respect to F-2 or F-3 Registrants.... Not Applicable
13. Incorporation of Certain Information by Reference..... Not Applicable
14. Information With Respect to Foreign Registrants other
than F-2 or F-3 Registrants......................... Not Applicable
15. Information With respect to F-3 Companies............. Not Applicable
16. Information With Respect to F-2 or F-3 Companies...... Not Applicable
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NO. CAPTION LOCATION OR CAPTION IN PROSPECTUS
--- ------------------------------------------------------ ------------------------------------------------------
<C> <S> <C>
17. Information With Respect to Foreign Companies Other
Than F-2 or F-3 Companies........................... Not Applicable
18. Information if Proxies, Consents or Authorizations Are
to Be Solicited..................................... Not Applicable
19. Information if Proxies, Consents or Authorizations Are
Not to Be Solicited in an Exchange Offer............ Management; Principal Shareholder
</TABLE>
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 20, 1997
PRELIMINARY PROSPECTUS
$200,000,000
9% SENIOR SUBORDINATED NOTES DUE 2007
IN EXCHANGE FOR
9% EXCHANGE SENIOR SUBORDINATED NOTES DUE 2007
OF
SUN INTERNATIONAL HOTELS LIMITED
SUN INTERNATIONAL NORTH AMERICA, INC.
THE EXCHANGE OFFER
[LOGO]
WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON , 1997, UNLESS EXTENDED
--------------------------
Sun International Hotels Limited, an international business company
organized under the laws of the Commonwealth of The Bahamas (the "Company" or
"Sun International"), and Sun International North America, Inc., a Delaware
corporation and a wholly owned subsidiary of the Company ("SINA" and, together
with the Company, the "Issuers"), as joint and several obligors, hereby offer,
upon the terms and subject to the conditions set forth in this Prospectus and
the accompanying Letter of Transmittal (which together constitute the "Exchange
Offer"), to exchange an aggregate principal amount of up to $200,000,000 of 9%
Exchange Senior Subordinated Notes due 2007 (the "Exchange Notes") of the
Issuers, which have been registered under the Securities Act of 1933, as amended
(the "Securities Act"), pursuant to a Registration Statement (as defined herein)
of which this Prospectus constitutes a part, for a like principal amount of 9%
Senior Subordinated Notes due 2007 (the "Outstanding Notes" and, with the
Exchange Notes, the "Notes") of the Issuers with the holders (the "Holders")
thereof.
The terms of the Exchange Notes are identical in all material respects to
the Outstanding Notes except for certain transfer restrictions and registration
rights relating to the Outstanding Notes and except that, if the Exchange Offer
is not consummated by , 1997, the interest rate borne by the Outstanding
Notes will increase by amounts specified herein until the Exchange Offer is
consummated. The Exchange Notes are offered hereunder in order to satisfy
certain obligations of the Issuers under the Purchase Agreement dated March 5,
1997 (the "Purchase Agreement") among the Issuers, the Guarantors (as defined
herein) and the initial purchasers of the Outstanding Notes (the "Initial
Purchasers") and the Registration Rights Agreement dated as of March 5, 1997
(the "Registration Rights Agreement") among the Issuers, the Guarantors and the
Initial Purchasers. The Exchange Notes evidence the same debt as the Outstanding
Notes and are issued under and are entitled to the same benefits under the
Indenture (as defined herein) as the Outstanding Notes. In addition, the
Exchange Notes and the Outstanding Notes are treated as one series of securities
under the Indenture.
The Exchange Notes will be unconditionally guaranteed (the "Guarantees") on
a senior subordinated basis by the Company's Subsidiaries (as defined herein)
(the "Guarantors"). The Exchange Notes will mature on March 15, 2007, unless
previously redeemed. Interest on the Exchange Notes is payable semi-annually on
March 15 and September 15 of each year commencing on September 15, 1997. The
Exchange Notes will be redeemable, in whole or in part, at the option of the
Issuers, at any time on or after March 15, 2002, at the declining redemption
prices set forth herein, plus accrued and unpaid interest, if any, thereon, plus
Liquidated Damages (as defined herein). In addition, in the event of a Change of
Control Triggering Event (as defined herein), each holder of Exchange Notes may
require the Issuers to repurchase such holder's Exchange Notes in whole or in
part at a repurchase price of 101% of the principal amount thereof plus accrued
and unpaid interest, if any, thereon, plus Liquidated Damages, if any. See
"Description of Notes-- Certain Covenants--Repurchase of Notes at the Option of
the Holder Upon a Change in Control". The Issuers will be required, subject to
certain exceptions, to pay Additional Amounts (as defined herein) in respect of
certain taxes, duties, assessments or governmental charges imposed by or on
behalf of the government of The Bahamas. If the Issuers are required to pay such
Additional Amounts, they may at their option redeem all the Exchange Notes at
the principal amount thereof plus accrued and unpaid interest, if any, thereon,
plus Liquidated Damages, if any. See "Description of Notes--Payment of
Additional Amounts". On or prior to March 15, 2000, the Issuers may redeem at
anytime or from time to time up to $70 million of the aggregate principal amount
of the Exchange Notes originally issued at a redemption price of 109% of the
principal amount thereof, plus accrued and unpaid interest, if any, thereon,
plus Liquidated Damages, if any, to the redemption date, with the net cash
proceeds of one or more Public Equity Offerings (as defined herein), PROVIDED,
HOWEVER, that at least $130 million in aggregate principal amount of the
Exchange Notes remain outstanding following such redemption.
The Exchange Notes and the Guarantees will constitute general unsecured
obligations of the Issuers and the Guarantors, respectively, and will be
subordinated in right of payment to all Senior Debt (as defined herein) of the
Issuers and the Guarantors, respectively. As of the date of this Prospectus,
after giving effect to the issuance of the Outstanding Notes and the use of
proceeds therefrom, the Company on a consolidated basis had no Senior Debt
outstanding. However, see "Business--The Properties and Current Expansion
Projects" and "--Existing Revolving Credit Facility".
SEE "RISK FACTORS" BEGINNING ON PAGE 19 OF THIS PROSPECTUS FOR A DESCRIPTION
OF CERTAIN RISKS TO BE CONSIDERED BY HOLDERS WHO TENDER THEIR OUTSTANDING NOTES
IN THE EXCHANGE OFFER.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
--------------------------
NO GAMING REGULATORY AUTHORITY HAS PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
--------------------------
The date of this Prospectus is , 1997
<PAGE>
The Issuers are making the Exchange Offer in reliance on the position of the
staff of the Securities and Exchange Commission (the "Commission") as set forth
in certain no-action letters addressed to other parties in other transactions.
However, the Issuers have not sought their own no-action letter and there can be
no assurance that the staff of the Commission would make a similar determination
with respect to the Exchange Offer as in such other circumstances. Based upon
these interpretations by the staff of the Commission, the Issuers believe that
Exchange Notes issued pursuant to this Exchange Offer in exchange for
Outstanding Notes may be offered for resale, resold and otherwise transferred by
a holder thereof other than (i) a broker-dealer who purchased such Outstanding
Notes directly from the Issuers to resell pursuant to Rule 144A or any other
available exemption under the Securities Act or (ii) a person that is an
"affiliate" (as defined in Rule 405 of the Securities Act) of the Issuers
without compliance with the registration and prospectus delivery provisions of
the Securities Act, provided that such Exchange Notes are acquired in the
ordinary course of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any person to
participate, in the distribution of such Exchange Notes. Holders of Outstanding
Notes accepting the Exchange Offer for the purpose of participating in a
distribution of the Exchange Notes may not rely on the position of the staff of
the Commission as set forth in these no-action letters and would have to comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with any secondary resale transaction. A secondary resale
transaction in the United States by a holder who is using the Exchange Offer to
participate in the distribution of Exchange Notes must be covered by a
registration statement containing the selling securityholder information
required by Item 507 of Regulation S-K of the Securities Act.
Each broker-dealer (other than an "affiliate" of the Company) that receives
Exchange Notes for its own account pursuant to the Exchange Offer may be an
"underwriter" within the meaning of the Securities Act and must acknowledge that
it acquired the Outstanding Notes as a result of market-making activities or
other trading activities and will deliver a prospectus in connection with any
resale of such Exchange Notes. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of Exchange Notes received in
exchange for Outstanding Notes where such Outstanding Notes were acquired by
such broker-dealer as a result of market-making activities or other trading
activities. The Issuers have agreed that, for a period of 180 days after the
Expiration Date (as defined herein), they will make this Prospectus available to
any broker-dealer for use in connection with any such resale. See "Plan of
Distribution". Any broker-dealer who is an affiliate of the Issuers may not rely
on such no-action letters and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any secondary
resale transactions. See "The Exchange Offer".
There is currently no market for the Exchange Notes. Although the Initial
Purchasers have informed the Issuers that they currently intend to make a market
in the Exchange Notes, they are not obligated to do so, and any such
market-making may be discontinued at any time without notice. Accordingly, there
can be no assurance as to the development or liquidity of any market for the
Exchange Notes. The Outstanding Notes are, and the Exchange Notes are expected
to be, eligible for trading in the Private Offerings, Resales and Trading
through Automated Linkages ("PORTAL") market. The Issuers do not intend to apply
for listing of the Exchange Notes on any securities exchange or for quotation
through the National Association of Securities Dealers Automated Quotation
System ("NASDAQ").
Any Outstanding Notes not tendered and accepted in the Exchange Offer will
remain outstanding and will be entitled to all the rights and preferences and
will be subject to the limitations applicable thereto under the Indenture.
Following consummation of the Exchange Offer, the holders of Outstanding Notes
will continue to be subject to the existing restrictions upon transfer thereof
and the Issuers will have no further obligation to such holders (other than the
Initial Purchasers) to provide for the registration under the Securities Act of
the Outstanding Notes held by them. To the extent that Outstanding Notes are
tendered and accepted in the Exchange Offer, a holder's ability to sell
untendered Outstanding Notes could be adversely affected. It is not expected
that an active market for the Outstanding Notes will develop while they are
subject to restrictions on transfer.
3
<PAGE>
The Issuers will accept for exchange any and all Outstanding Notes that are
validly tendered and not withdrawn on or prior to 5:00 p.m., New York City time,
on the date the Exchange Offer expires, which will be , 1997 (the
"Expiration Date"), unless the Exchange Offer is extended by the Issuers, in
their sole discretion, in which case the term "Expiration Date" shall mean the
latest date and time to which the Exchange Offer is extended. Tenders of
Outstanding Notes may be withdrawn at any time prior to 5:00 p.m., New York City
time, on the Expiration Date, unless previously accepted for payment by the
Issuers. The Exchange Offer is not conditioned upon any minimum principal amount
of Outstanding Notes being tendered for exchange. However, the Exchange Offer is
subject to certain conditions which may be waived by the Issuers and to the
terms and provisions of the Registration Rights Agreement. The Exchange Notes
bear interest from the last interest payment date of the Outstanding Notes to
occur prior to the issue date of the Exchange Notes or, if no such interest has
been paid, from March 10, 1997. Holders of the Outstanding Notes whose
Outstanding Notes are accepted for exchange will not receive interest on such
Outstanding Notes for any period subsequent to the last interest payment date to
occur prior to the issue date of the Exchange Notes, if any, and will be deemed
to have waived the right to receive any interest payment on the Outstanding
Notes accrued from and after such interest payment date or, if no such interest
has been paid, from March 10, 1997.
AVAILABLE INFORMATION
Sun International is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), applicable to
foreign issuers, and in accordance therewith files reports, including annual
reports on Form 20-F, and other information with the Commission. Sun
International makes available to its shareholders annual reports containing
audited financial statements within 105 days of the end of each fiscal year and
publishes quarterly reports containing selected financial data for the first
three quarters of the fiscal year within 60 days from the end of such fiscal
quarter (in each case, prepared in accordance with generally accepted accounting
principals in the United States ("U.S. GAAP")). Sun International is exempt from
the rules under the Exchange Act prescribing the furnishing and content of proxy
statements to shareholders. However, Sun International furnishes shareholders
with statements with respect to annual or extraordinary meetings of
shareholders, as well as such other reports as may from time to time be
authorized by the Board of Directors or be required under law. SINA is subject
to the informational requirements of the Exchange Act, and in accordance
therewith files reports, proxy and information statements and other information
with the Commission. Such reports, proxy and information statements and other
information of Sun International and SINA, as applicable, may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
following Regional Offices of the Commission: Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60611; and 7 World Trade Center, Suite
1400, New York, New York 10048. Copies of such reports, proxy and information
statements and other information of Sun International and SINA, as applicable,
may be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. The Commission also
maintains a Web site at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. Copies of such materials filed by Sun
International can also be inspected at the offices of the New York Stock
Exchange, Inc. ("NYSE"), 20 Broad Street, New York, New York 10005, on which the
ordinary shares of Sun International are listed. Copies of such materials filed
by SINA can also be inspected at the offices of the American Stock Exchange,
Inc. ("AMEX"), 86 Trinity Place, New York, New York 10006, on which certain
notes of SINA are listed.
This Prospectus constitutes a part of a registration statement on Form F-4
(together with all amendments thereto, the "Registration Statement") filed by
the Issuers and the Guarantors with the Commission under the Securities Act. The
Prospectus, which forms a part of the Registration Statement, does not contain
all the information set forth in the Registration Statement, certain parts of
which have been omitted in accordance with the rules and regulations of the
Commission. Reference is hereby made to the Registration Statement and related
exhibits and schedules filed therewith for further information with respect to
the
4
<PAGE>
Issuers and the Guarantors and the Exchange Notes offered hereby. Statements
contained herein concerning the provisions of any document are not necessarily
complete and, in each instance, reference is made to the copy of such document
filed as an exhibit to the Registration Statement or otherwise filed with the
Commission. Each such statement is qualified in its entirety by such reference.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (EXCLUDING EXHIBITS UNLESS SUCH
EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO THE INFORMATION
INCORPORATED HEREIN) ARE AVAILABLE WITHOUT CHARGE UPON WRITTEN OR ORAL REQUEST
FROM, IN THE CASE OF DOCUMENTS RELATING TO SUN INTERNATIONAL, SUN INTERNATIONAL
HOTELS LIMITED, 1415 EAST SUNRISE BLVD., 10TH FLOOR, FT. LAUDERDALE, FLORIDA
33304, ATTENTION: SECRETARY (TELEPHONE: (954) 713-2500), AND, IN THE CASE OF
DOCUMENTS RELATING TO SINA, SUN INTERNATIONAL NORTH AMERICA, INC., 1133
BOARDWALK, ATLANTIC CITY, NEW JERSEY 88401, ATTENTION: SECRETARY (TELEPHONE:
(609) 344-6000). IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY
REQUEST SHOULD BE MADE BY , 1997.
ENFORCEABILITY OF CIVIL LIABILITIES
The Company is a Bahamian international business company incorporated under
the International Business Companies Act, 1989 of the Commonwealth of The
Bahamas (the "Companies Act"). Certain of the directors and executive officers
of the Company reside outside the United States. A substantial portion of the
assets of such persons and of the Company is located outside the United States.
As a result, in the opinion of Harry B. Sands and Company, Bahamian counsel to
the Company, it may be difficult or impossible to effect service of process
within the United States upon such persons, to bring suit in the United States
or to enforce, in the U.S. courts, any judgment obtained there against such
persons predicated upon any civil liability provisions of the U.S. federal
securities laws. It is unlikely that Bahamian courts would entertain original
actions against Bahamian companies, their directors or officers predicated
solely upon U.S. federal securities laws. Furthermore, judgments predicated upon
any civil liability provisions of the U.S. federal securities laws are not
directly enforceable in The Bahamas. Rather, a lawsuit must be brought in The
Bahamas on any such judgment. Subject to consideration of private international
law, in general, a judgment obtained after due trial by a court of competent
jurisdiction, which is final and conclusive as to the issues in contention, is
actionable in Bahamian courts and is impeachable only upon the grounds of (i)
fraud, (ii) public policy and (iii) natural justice.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by Sun International (File No.
1-4226) with the Commission pursuant to the Exchange Act are incorporated herein
by reference:
1. Sun International's Annual Report on Form 20-F for the year ended
December 31, 1995 (the "1995 Sun 20-F"); and
2. Sun International's Current Reports on Form 6-K, as amended, dated
January 30, 1996, February 2, 1996, March 21, 1996, May 2, 1996, June 4, 1996,
July 25, 1996, August 19, 1996, August 22, 1996, September 6, 1996, October 1,
1996, November 12, 1996, December 16, 1996, December 17, 1996, February 10,
1997, February 27, 1997 and March 11, 1997.
The following documents heretofore filed by SINA (File No. 1-4748) with the
Commission pursuant to the Exchange Act are incorporated herein by reference:
1. SINA's Annual Report on Form 10-K for the year ended December 31, 1996
(the "1996 SINA 10-K").
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
or in any other subsequently filed document which also is incorporated or deemed
to be incorporated by reference herein, modifies or supersedes such statement.
Any statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus. In addition,
(i) all annual reports on Form 20-F filed by Sun International and, to the
extent designated therein, any reports on Form 6-K filed by Sun International
pursuant to Sections 13(a), 13(c) or
5
<PAGE>
15(d) of the Exchange Act and (ii) all documents filed by SINA pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the consummation of the Exchange Offer shall be deemed
to be incorporated by reference into this Prospectus and to be a part hereof
from the date of filing of such documents or reports, to the extent not
superseded by documents or reports subsequently filed.
DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS
This Prospectus includes "forward looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. In
particular, any statements, express or implied, concerning future operating
results or the ability to generate revenues, income or cash flow to service the
obligations under the Notes are forward looking statements including, without
limitation, certain statements under the captions "Prospectus Summary",
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business". Although the Issuers believe that the expectations
reflected in such forward looking statements are reasonable, they can give no
assurance that such expectations will prove to have been correct. Important
factors that could cause actual results to differ materially from the Issuers'
expectations are disclosed in this Prospectus, including, without limitation,
under the caption "Risk Factors". All forward looking statements by the Issuers
are expressly qualified by such cautionary statements.
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PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY SHOULD BE READ IN CONJUNCTION WITH, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO, THE MORE COMPLETE INFORMATION INCLUDED
ELSEWHERE IN THIS PROSPECTUS, INCLUDING THE MORE DETAILED INFORMATION IN THE
CONSOLIDATED FINANCIAL STATEMENTS AND THE NOTES THERETO. ALL SUCH FINANCIAL
STATEMENTS HAVE BEEN PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES IN THE UNITED STATES ("U.S. GAAP").
UNLESS OTHERWISE INDICATED, ALL REFERENCES TO THE "COMPANY" OR "SUN
INTERNATIONAL" INCLUDE THE COMPANY AND ITS CONSOLIDATED SUBSIDIARIES (INCLUDING
SINA), ALL REFERENCES TO "SINA" INCLUDE SINA AND ITS CONSOLIDATED SUBSIDIARIES
AND ALL REFERENCES TO THE "ISSUERS" (EXCEPT AS USED UNDER THE CAPTION
"DESCRIPTION OF NOTES") INCLUDE THE ISSUERS AND THEIR RESPECTIVE CONSOLIDATED
SUBSIDIARIES. IN ADDITION, ALL REFERENCES TO "SINA" REFER TO SUN INTERNATIONAL
NORTH AMERICA, INC. BOTH BEFORE AND AFTER ITS NAME CHANGE (AS DISCUSSED BELOW).
THE COMPANY
GENERAL
Sun International Hotels Limited ("Sun International" or the "Company") is
an international resort and gaming company which develops and manages premier
resort and casino properties. The Company, through its subsidiaries, currently
operates resort hotels and casinos in The Bahamas, Atlantic City, Connecticut,
the Indian Ocean and France. In December 1996, the Company acquired Griffin
Gaming & Entertainment, Inc., a Delaware corporation ("GGE"), pursuant to a
merger (the "Merger") in which GGE became a wholly owned subsidiary of the
Company. Following the Merger, GGE's name was changed to Sun International North
America, Inc. Sun International currently operates 11 hotels containing
approximately 3,900 rooms and seven casinos with an aggregate of over 270,000
square feet of gaming space containing more than 6,300 slot machines and 380
table games.
The Company's largest property is the Atlantis Resort & Casino ("Atlantis"),
a 1,147-room resort and casino located on Paradise Island, The Bahamas.
Following its acquisition in May 1994, Atlantis was redeveloped into an
ocean-themed destination resort through a $140 million capital expenditure
program (the "Initial Development Program"). Seeking to capitalize on the
success of Atlantis, Sun International recently commenced construction of an
approximately $450 million expansion of the property (the "Paradise Island
Expansion"). The Paradise Island Expansion will substantially increase the
Company's room base on Paradise Island with the construction of a new 1,200-room
deluxe hotel and casino and the expansion of Atlantis' ocean-themed adventure
environment. As part of its continued development of Paradise Island, in
September 1996 the Company acquired the 562-room Holiday Inn Pirate's Cove (the
"Pirate's Cove Hotel") adjacent to Atlantis for approximately $12 million in
cash plus the assumption of approximately $22.6 million of indebtedness. In
addition to the Paradise Island Expansion, the Company is planning an
approximately $20 million renovation of the Pirate's Cove Hotel to create a
moderately-priced hotel within the Atlantis complex (the "Pirate's Cove
Renovation").
SINA (formerly GGE), which through subsidiaries owns the Resorts Casino
Hotel in Atlantic City (the "Resorts Casino Hotel"), was acquired by Sun
International in December 1996. The Resorts Casino Hotel has approximately 660
guest rooms, a 70,000 square foot casino, an 8,000 square foot simulcast
parimutuel betting and poker area and related facilities and is located on the
Boardwalk. During 1997, the Company expects to begin enhancing the existing
Resorts Casino Hotel through the construction of additional parking, the
renovation of approximately 500 of the hotel rooms and various improvements to
the public areas (the "Atlantic City Renovation"). Thereafter, the Company
intends to develop a significant addition to the existing property, creating a
highly themed resort with significantly increased room base and casino capacity
(the "Atlantic City Expansion").
The Mohegan Sun Casino in Montville, Connecticut (the "Mohegan Sun Casino"),
which was developed for the Mohegan Tribe of Indians of Connecticut (the
"Mohegan Tribe") by a partnership in which Sun International owns a 50%
interest, opened in October 1996. The Mohegan Sun Casino has a Native American
theme and consists of approximately 150,000 square feet of gaming space and
features approximately 2,670 slot machines, 180 table games and parking for
7,200 cars.
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STRATEGIC POSITIONING
Over the last two years, the Company has positioned itself as one of the
leading gaming and resort operators on the east coast of North America. The
redevelopment of Paradise Island in 1994 established the Company's presence in
the North American market, while the opening of the Mohegan Sun Casino in
October 1996 enhanced this presence with a property in the densely populated
Northeastern marketplace. With the recent acquisition of the Resorts Casino
Hotel in Atlantic City, management believes that Sun International is now the
only company to operate significant gaming resorts in multiple jurisdictions on
the east coast of North America, and is well positioned to be the leading gaming
and resort company operating outside of Las Vegas.
THE PROPERTIES AND CURRENT EXPANSION PROJECTS
THE BAHAMAS
Sun International, through its wholly owned Bahamian subsidiary, Sun
International Bahamas Limited ("Sun Bahamas"), owns approximately 570 acres or
almost 70% of Paradise Island. Following the acquisition of its Paradise Island
operations in May 1994, Sun International embarked upon the Initial Development
Program, which included the refurbishment of all 1,147 guest rooms, the
construction of new specialty food and beverage facilities, an upgrading of the
30,000-square foot casino (the "Atlantis Casino") and the creation of a 14-acre
saltwater marine life habitat. The marine life habitat features the world's
largest open air aquarium, showcasing over 100 species of marine life,
waterfalls, lagoons, adventure walks and a clear tunnel submerged in a predator
lagoon through which visitors can walk and be surrounded by sharks, sea turtles,
stingrays and other marine life.
The Initial Development Program was substantially completed by December
1994, after only seven months of construction during which the resort remained
open. Results of Atlantis since completion of the Initial Development Program
have exceeded management's expectations. For the year ended December 31, 1995,
Atlantis achieved average occupancy and average daily room rates of 85% and
$122, respectively. The Company improved upon these results in 1996 by realizing
an average occupancy of 87% and an average daily room rate of $158. The Company
believes that these results are the highest the property has achieved during the
last ten years.
In addition to Atlantis, the Company's Paradise Island operations include
the Ocean Club Golf & Tennis Resort (the "Ocean Club"), a luxury resort hotel
with 59 guest rooms, the Paradise Paradise Beach Resort ("Paradise Paradise"), a
100-room beachfront resort hotel catering to value-conscious tourists, the
Pirate's Cove Hotel, and a championship 18-hole golf course. The Atlantis Casino
features approximately 830 slot machines and 70 table games in 30,000 square
feet of gaming space. Paradise Island has extensive existing infrastructure and
is easily accessible from the densely populated eastern United States. There are
regularly scheduled airline flights from south Florida and New York City to
either Paradise Island or neighboring Nassau, having flight times of
approximately 50 minutes and two and one-half hours, respectively.
THE PARADISE ISLAND EXPANSION AND THE PIRATE'S COVE RENOVATION
The further development of Paradise Island is the cornerstone of the
Company's expansion plans, and its approximately 220 acres of undeveloped
property provide the Company with an opportunity to expand Paradise Island into
a master planned and highly themed destination resort centered around
spectacular Bahamian beaches and the wonders of the ocean. The Company recently
commenced construction of the Paradise Island Expansion and expects to complete
the project by late 1998 at a cost of approximately $450 million. The Company
does not expect the construction of the Paradise Island Expansion to interfere
materially with its operations at Atlantis. The Paradise Island Expansion will
include the construction of a 1,200-room deluxe hotel and new casino. It is also
intended to increase convention and meeting facilities and to expand the
ocean-themed environment of Atlantis with the addition of numerous marine
attractions. Upon completion of the Paradise Island Expansion, guests will be
able to explore an elaborate ocean-themed environment containing lagoons,
waterfalls, adventure rides and exotic marine life exhibits.
Consistent with a strategy of offering accommodations that appeal to broad
market segments within a single master planned destination resort, the Company
acquired the Pirate's Cove Hotel on Paradise Island
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located adjacent to Atlantis. The Company intends to implement the approximately
$20 million Pirate's Cove Renovation, which is expected to be completed during
the first half of 1999, in order to position this property as Atlantis'
moderately priced unit. During construction of the Paradise Island Expansion,
the Company intends to use a portion of this property to house many of the
construction staff. Upon successful completion of the Paradise Island Expansion
and the Pirate's Cove Renovation, the Company will operate an integrated
3,000-room resort complex appealing to all market segments which will include
approximately 1,200 deluxe rooms, 1,100 mid-market rooms and 700 moderately
priced rooms. After completion of these projects, the Company will continue to
own approximately 190 acres of undeveloped land on Paradise Island with
extensive beach and golf course frontage. See "Business--The Properties and
Current Expansion Projects--The Bahamas" and "--Existing Revolving Credit
Facility".
The Company continues to explore additional development opportunities on
Paradise Island. Following the completion of the Paradise Island Expansion and
the Pirate's Cove Renovation, management's growth plan includes the potential
development of additional resort properties on Paradise Island, each appealing
to a distinct target market. For example, management anticipates that additional
expansion opportunities will exist to develop room capacity that caters to
budget-oriented customers at lower price points than those currently offered at
Atlantis. In addition, management believes that similar expansion opportunities
exist in the luxury end of the market with a further build-out of the Ocean
Club. Other potential development projects may include residential villas,
timeshare developments, marinas and golf course communities. Any further
development projects on Paradise Island are expected to be constructed on the
approximately 190 acres of undeveloped land remaining after the Paradise Island
Expansion, which includes extensive beach and golf course frontage, or on
additional tracts of land that may be acquired from time to time.
In connection with the Paradise Island Expansion and in order to stimulate
the Company's further investment in The Bahamas, the Government of the
Commonwealth of The Bahamas and the Company reached an agreement in 1995
granting the Company certain tax relief and investment credits. See
"Business--Certain Matters Affecting the Company's Bahamas Operations--Heads of
Agreement".
ATLANTIC CITY
SINA is a holding company which, through its indirect wholly owned
subsidiary Resorts International Hotel, Inc. ("RIH"), is principally engaged in
the ownership and operation of the Resorts Casino Hotel in Atlantic City. The
Resorts Casino Hotel has approximately 660 guest rooms, a 70,000 square foot
casino, an 8,000 square foot simulcast parimutuel betting and poker area and
related facilities and is located on the Atlantic City Boardwalk. During 1997,
the Company expects to begin enhancing the existing Resorts Casino Hotel by way
of the Atlantic City Renovation, which will include the construction of
additional parking, the renovation of approximately 500 of the hotel rooms and
various improvements to the public areas. The planning for the Atlantic City
Renovation has just recently begun, and the costs and schedule therefor have not
yet been determined.
THE ATLANTIC CITY EXPANSION
In 1998, the Company expects to begin planning the Atlantic City Expansion.
The Atlantic City Expansion is expected to consist of a new development on land
adjacent to the existing Resorts Casino Hotel, including additional hotel rooms
and development of a highly themed casino and entertainment complex. The new
development would be integrated with the existing Resorts Casino Hotel, and when
completed during 2000, management believes that it should be one of the first
Las Vegas style gaming entertainment complexes in Atlantic City. The size and
scope of the Atlantic City Expansion depends, in part, upon the amount of
additional land the Company is able to acquire. In addition, the Company's
ability to carry out the Atlantic City Expansion depends on a number of other
factors, including completion of necessary planning, receipt of adequate
financing and certain state and local approvals. See "Risk Factors-- Risks
Associated with New Projects and Expansion--Atlantic City Expansion".
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CONNECTICUT
Sun International, through its wholly owned subsidiary, Sun Cove Limited
("Sun Cove"), has a 50% interest in, and is a managing partner of, Trading Cove
Associates, a Connecticut general partnership ("TCA"), which developed and
manages the Mohegan Sun Casino for the Mohegan Tribe in Montville, Connecticut.
Under a seven-year management agreement that commenced in October 1996 between
TCA and the Mohegan Tribe (the "TCA Management Agreement"), TCA manages the
Mohegan Sun Casino in exchange for payments ranging from 30% to 40% of pretax
income, depending upon profitability thresholds. As a result of the Company's
interest in TCA, the Company will receive a portion of these management fee
payments and in addition will receive a return on the capital it provided to the
project. See "Business--The Properties and Current Expansion
Projects--Connecticut".
Construction of the Mohegan Sun Casino began in early October 1995, and the
facility commenced operations in October 1996. According to market research
reports, in 1995 there were approximately 2.4 million adults residing within 50
miles, 10.2 million adults residing within 100 miles and 21.8 million adults
residing within 150 miles of the Mohegan Sun Casino. The Mohegan Sun Casino is
located approximately 10 miles west of Foxwoods Resort & Casino ("Foxwoods"),
which the Company believes to be one of the most profitable casinos in the
world. The Mohegan Sun Casino is readily accessible from the interstate highway
system through its own four-lane access road with a direct exit from Connecticut
Route 2A (a four-lane expressway), which connects to I-395, approximately one
mile from the Mohegan Sun Casino. I-395 connects to I-95, the main highway that
connects Boston, Providence and New York City, approximately nine miles away.
This road network allows customers to drive directly into the property from the
interstate highway system without encountering a traffic light. The Company
believes that the location, ease of access and distinctive northeastern Indian
theme of the Mohegan Sun Casino should enable it to capture a significant share
of the gaming market in the northeastern United States.
While the Mohegan Sun Casino commenced operations during the slow season,
since its opening on October 12, 1996 through December 31, 1996, the property
achieved an average daily win per slot machine of $317 and recorded net revenues
of $97 million and earnings before bingo operations (which are not managed by
TCA) and interest, taxes, depreciation and amortization of $22.8 million.
INDIAN OCEAN
Sun International owns 22.8% of Sun Resorts Limited, a Mauritian company
which is publicly traded on the Mauritius Stock Exchange ("Sun Indian Ocean").
Sun International manages each of Sun Indian Ocean's six resort hotels pursuant
to management contracts for which it receives management fees calculated as a
percentage of revenue, adjusted operating income and development expenditures.
Sun Indian Ocean is regarded as one of the premier resort operators in the
Indian Ocean and owns five beach resort hotels in Mauritius and one in the
Comoros, with a total of approximately 1,400 rooms. Mauritius and the Comoros
are tropical islands located in the Indian Ocean approximately 1,200 miles and
200 miles, respectively, from the east coast of mainland Africa. The resorts in
Mauritius and the Comoros are marketed primarily to tourists from Europe and
southern Africa. Two of the five Mauritian resorts offer deluxe accommodations
and are acknowledged by the European travel trade to be among the finest beach
resorts in the world. The other three Mauritian resorts and the hotel in the
Comoros cater to mid-market and budget travellers. Sun Indian Ocean owns five of
the 16 major hotels in Mauritius, representing approximately 36% of the room
inventory among properties with more than 80 rooms.
FRANCE
Sun International owns an effective 25% of Societe de Participation et
d'Investissements dans les Casinos, a private French company ("Sun France"),
which owns four locals-oriented casinos in France, located in Nice and Chamonix
and in the Marseilles districts of Cassis and Carry-le-Rouet. Sun International
provides various services to Sun France's four casinos under a technical
assistance agreement pursuant to which the Company receives a fixed fee
equivalent to approximately $800,000 per year (at current exchange rates). Sun
International's principal partners in Sun France are Chargeurs, S.A.
("Chargeurs"), Accor S.A. ("Accor") and the Barriere family, the latter two of
which have broad experience in the French domestic gaming and international
lodging industries. Sun France operates in excess of 20,000 square feet of
gaming space containing approximately 530 slot machines and 60 table games.
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HISTORY AND OWNERSHIP
The Company was established in 1993 in order to acquire the Paradise Island
Resort and Casino and related operations, which acquisition was completed in May
1994. In May 1995, the Company acquired from Sun International Investments
Limited ("SIIL") its equity interests in Sun Indian Ocean and Sun France and
SIIL's project development and management businesses. In December 1996, the
Company acquired GGE (now SINA) pursuant to the Merger.
SIIL, which controls approximately 49% of the Company's Ordinary Shares (as
defined herein), is a private holding company in which each of Caledonia
Investments plc ("Caledonia"), Safmarine & Rennies Holdings Limited ("Safren")
and a trust for the family of Mr. Solomon Kerzner, Chairman and Chief Executive
Officer of the Company, controls approximately a one-third equity interest. See
"Principal Shareholder".
The mailing address of the Company's principal executive offices is Sun
International Hotels Limited, Executive Offices, Coral Towers, Paradise Island,
The Bahamas. The telephone number is (242) 363-2516.
RECENT EVENTS
THE MERGER
On December 16, 1996, the Company consummated the Merger. As a result of the
Merger, the Company issued 3,441,208 ordinary shares, par value $0.001 per
share, of Sun International ("Ordinary Shares") to former holders of GGE stock
and has assumed obligations to issue an additional 671,905 Ordinary Shares in
connection with options and warrants of GGE.
In connection with the Merger, the Company received interim casino
authorization (an "ICA") from the New Jersey Casino Control Commission (the
"NJCCC"), which allows the Company to operate the Resorts Casino Hotel pending
receipt of qualification (a "Plenary License") as a Holding Company, as such
term is defined in the New Jersey Casino Control Act (the "NJCCA"). In
connection with the Merger, GGE's name was changed to Sun International North
America, Inc. See "Risk Factors--Consummation of the Merger Prior to Receipt of
Plenary License".
TENDER OFFER AND CONSENT SOLICITATION
A portion of the proceeds from the issuance of the Outstanding Notes were
used to finance a tender offer (the "Tender Offer") to purchase approximately
$125 million aggregate principal amount of outstanding 11% Mortgage Notes due
2003 and approximately $35 million (approximately $13 million of which is owned
by an affiliate of the Company) aggregate principal amount of outstanding
11 3/8% Junior Mortgage Notes due 2004 (collectively, the "Mortgage Notes"),
each issued by Resorts International Hotel Financing, Inc., a wholly owned
subsidiary of SINA ("RIHF"). In addition, in connection with the Tender Offer,
RIHF solicited (the "Solicitation") consents to certain amendments to the
indentures governing the Mortgage Notes and to certain other transactions. As a
result of the Tender Offer, only $6.5 million aggregate principal amount of
Mortgage Notes remain outstanding. In addition, as a result of the Solicitation,
the Mortgage Notes that remain outstanding are unsecured and various provisions,
restrictive covenants and "events of default" have been eliminated from their
respective indentures.
PROPOSED AMENDMENTS TO REVOLVING CREDIT FACILITY
Sun Bahamas currently has a revolving credit facility in place pursuant to
which certain banks led by The Bank of Nova Scotia and The Royal Bank of
Scotland have committed to provide revolving loans of up to $250 million (the
"Existing Revolving Credit Facility"). The Existing Revolving Credit Facility is
guaranteed by, and secured by a pledge of the assets of, the Company and each of
its subsidiaries, except SINA and its subsidiaries. Prior to the consummation of
the Tender Offer and the Solicitation, the assets of SINA and its subsidiaries,
namely the Resorts Casino Hotel and related assets (the "Atlantic City Assets"),
were pledged to support the Mortgage Notes. As a result of the Tender Offer and
the Solicitation, however, SINA and its subsidiaries are now able to pledge the
Atlantic City Assets in connection with a bank facility.
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The Company is currently engaged in discussions with The Bank of Nova Scotia
and Societe Generale USA to increase the size of the Existing Revolving Credit
Facility to $375 million and make additional amendments thereto. These
amendments are expected to include lower interest rates and provide the Company
with more flexibility than the Existing Revolving Credit Facility. See
"Business--Existing Revolving Credit Facility".
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THE EXCHANGE OFFER
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SECURITIES OFFERED................ Up to $200,000,000 principal amount of 9% Exchange
Senior Subordinated Notes due 2007. The terms of the
Exchange Notes are identical in all material respects to
the Outstanding Notes except for certain transfer
restrictions and registration rights relating to the
Outstanding Notes and except that, if the Exchange Offer
is not consummated by , 1997, the interest
rate borne by the Outstanding Notes will increase 0.5%
per annum every 90 days until the Exchange Offer is
consummated (up to a maximum amount of 2.0% per annum).
THE EXCHANGE OFFER................ The Exchange Notes are being offered in exchange for a
like principal amount of Outstanding Notes. The issuance
of the Exchange Notes is intended to satisfy obligations
of the Issuers contained in the Registration Rights
Agreement. The Exchange Notes evidence the same debt as
the Outstanding Notes and will be issued, and holders
thereof are entitled to the same benefits as holders of
the Outstanding Notes, under the Indenture.
TENDERS, EXPIRATION DATE;
WITHDRAWALS...................... The Exchange Offer will expire at 5:00 p.m., New York
City time, on , 1997, or such later date and
time to which it is extended by the Issuers in their
sole discretion. Tenders of Outstanding Notes may be
withdrawn at any time prior to the Expiration Date. Any
Outstanding Notes not accepted for exchange for any
reason will be returned without expense to the tendering
holder thereof as promptly as practicable after the
expiration or termination of the Exchange Offer. See
"The Exchange Offer" for a description of the procedures
for tendering the Outstanding Notes.
FEDERAL INCOME TAX CONSEQUENCES... The exchange pursuant to the Exchange Offer will not
result in any income, gain or loss to the Holders who
participate in the Exchange Offer or to the Issuers for
federal income tax purposes. See "Tax Consequences".
USE OF PROCEEDS................... There will be no proceeds to the Issuers from the
exchange pursuant to the Exchange Offer.
EXCHANGE AGENT.................... The Bank of New York is serving as Exchange Agent (the
"Exchange Agent") pursuant to the Exchange Offer.
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THE EXCHANGE NOTES
The terms of the Exchange Notes are identical in all material respects to
the Outstanding Notes except for certain transfer restrictions and registration
rights relating to the Outstanding Notes and except that, if the Exchange Offer
is not consummated by , 1997, the interest rate borne by the
Outstanding Notes will increase 0.5% per annum every 90 days until the Exchange
Offer is consummated (up to a maximum amount of 2.0% per annum).
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SECURITIES OFFERED................ $200,000,000 aggregate principal amount of 9% Exchange
Senior Subordinated Notes due 2007.
INTEREST RATE; PAYMENT DATES...... Interest on the Exchange Notes will accrue at the rate
of 9% per annum, payable semi-annually in arrears on
March 15 and September 15 of each year, commencing
September 15, 1997.
MATURITY DATE..................... March 15, 2007.
GUARANTEES........................ The Exchange Notes will be unconditionally guaranteed
(the Guarantees) on an unsecured senior subordinated
basis by the Company's Subsidiaries (the Guarantors).
OPTIONAL REDEMPTION............... The Exchange Notes are redeemable, in whole or in part,
at the option of the Issuers at any time on or after
March 15, 2002, at the declining redemption prices set
forth herein, plus accrued and unpaid interest, if any,
thereon, plus Liquidated Damages, if any. In addition,
the Exchange Notes are subject at any time to Required
Regulatory Redemptions. In addition, notwithstanding the
foregoing, on or prior to March 15, 2000, the Issuers
may redeem at any time or from time to time up to $70
million of the aggregate principal amount of the
Exchange Notes originally issued at a redemption price
of 109% of the principal amount thereof, plus accrued
and unpaid interest, if any, thereon, plus Liquidated
Damages, if any, to the redemption date, with the net
cash proceeds of one or more Public Equity Offerings;
PROVIDED, HOWEVER, that at least $130 million in
aggregate principal amount of the Exchange Notes remain
outstanding following each such redemption. See
"Description of Notes -- Optional Redemption" and "--
Required Regulatory Redemption".
CHANGE OF CONTROL................. In the event of a Change of Control Triggering Event,
Holders of the Exchange Notes will have the right to
require that the Issuers repurchase the Exchange Notes
in whole or in part at a redemption price of 101% of the
principal amount thereof plus accrued and unpaid
interest, if any, thereon, plus Liquidated Damages, if
any, to the date of repurchase. See "Description of
Notes -- Certain Covenants -- Repurchase of Notes at the
Option of the Holder Upon a Change of Control".
WITHHOLDING TAX................... The Issuers will, subject to certain limitations and
exceptions set forth herein, pay to each Holder such
additional amounts as may be necessary so that every net
payment of principal of and premium, if any, and
interest and Liquidated Damages on the Exchange Notes,
after deduction or withholding for or on account of any
future tax, assessment or other governmental charge
imposed upon such Holder, or by reason of the making of
such payment, by The Bahamas, or any political
subdivision or taxing authority
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thereof or therein, will not be less than the amount
provided for in the Exchange Notes. In addition, if as a
result of any change in the laws or regulations of The
Bahamas, or any political subdivision or taxing
authority thereof or therein, enacted after the date of
this Prospectus, the Issuers are required to pay
additional amounts as defined herein under "Description
of Notes -- Payment of Additional Amounts", the Issuers
may at their option redeem all, but not less than all,
of such Exchange Notes at the principal amount thereof
together with accrued and unpaid interest, if any,
thereon, plus Liquidated Damages, if any, to the date of
such redemption.
RANKING........................... The Exchange Notes and the Guarantees will constitute
general unsecured obligations of the Issuers and the
Guarantors, respectively, and will be subordinated in
right of payment to all existing and future Senior Debt
of the Issuers and the Guarantors, respectively. As of
the date of this Prospectus, after giving effect to the
issuance of the Outstanding Notes and the use of
proceeds therefrom, the Company on a consolidated basis
had no Senior Debt outstanding. The Indenture prohibits
the Issuers and the Guarantors from incurring, assuming
or guaranteeing any Indebtedness that is subordinated to
any Senior Debt and senior in right of payment to the
Exchange Notes or the Guarantees, as applicable. See
"Description of Notes -- Subordination".
CERTAIN COVENANTS................. The Indenture contains certain covenants, including
limitations on the ability of the Issuers and the
Subsidiaries to: (i) incur additional Indebtedness; (ii)
incur certain liens; (iii) engage in certain
transactions with affiliates; (iv) make certain
restricted payments; (v) agree to payment restrictions
affecting Subsidiaries; (vi) engage in unrelated lines
of business; or (vii) engage in mergers, consolidations
or the transfer of all or substantially all of the
assets of the Issuers or the Subsidiaries to another
person. In addition, in the event of certain Asset Sales
(as defined herein), the Company will be required to use
the proceeds to reinvest in the Company's business, to
repay certain debt or to offer to purchase Exchange
Notes at 100% of the principal amount thereof, plus
accrued and unpaid interest, if any, thereon, plus
Liquidated Damages, if any, to the date of purchase. See
"Description of Notes -- Certain Covenants".
USE OF PROCEEDS................... The Issuers will not receive any proceeds from the
Exchange Offer.
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CONSEQUENCES OF EXCHANGING OUTSTANDING NOTES PURSUANT TO THE EXCHANGE OFFER
The Issuers are making the Exchange Offer in reliance on the position of the
staff of the Commission as set forth in certain no-action letters addressed to
other parties in other transactions. However, the Issuers have not sought their
own no-action letter and there can be no assurance that the staff of the
Commission would make a similar determination with respect to the Exchange Offer
as in such other circumstances. Based upon these interpretations by the staff of
the Commission, the Issuers believe that Exchange Notes issued pursuant to this
Exchange Offer in exchange for Outstanding Notes may be offered for resale,
resold and otherwise transferred by a holder thereof other than (i) a
broker-dealer who purchased such Outstanding Notes directly from the Issuers to
resell pursuant to Rule 144A or any other available exemption under the
Securities Act or (ii) a person that is an "affiliate" (as defined in Rule 405
of the Securities Act) of the Issuers without compliance with the registration
and prospectus delivery provisions of the Securities Act, PROVIDED that such
Exchange Notes are acquired in the ordinary course of such holder's business and
that such holder is not participating, and has no arrangement or understanding
with any person to participate, in the distribution of such Exchange Notes.
Holders of Outstanding Notes accepting the Exchange Offer for the purpose of
participating in a distribution of the Exchange Notes may not rely on the
position of the staff of the Commission as set forth in these no-action letters
and would have to comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any secondary resale
transaction. A secondary resale transaction in the United States by a holder who
is using the Exchange Offer to participate in the distribution of Exchange Notes
must be covered by a registration statement containing the selling
securityholder information required by Item 507 of Regulation S-K of the
Securities Act.
Each broker-dealer (other than an "affiliate" of the Company) that receives
Exchange Notes for its own account pursuant to the Exchange Offer must
acknowledge that it acquired the Outstanding Notes as a result of market-making
activities or other trading activities and will deliver a prospectus in
connection with any resale of such Exchange Notes. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of
Exchange Notes received in exchange for Outstanding Notes where such Outstanding
Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Issuers have agreed that, for a
period of 180 days after the Expiration Date, they will make this Prospectus
available to any broker-dealer for use in connection with any such resale. See
"Plan of Distribution". Any broker-dealer who is an affiliate of the Issuers may
not rely on such no-action letters and must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
secondary resale transactions. See "The Exchange Offer".
RISK FACTORS
For a discussion of certain factors that should be considered in connection
with an investment in the Notes, see "Risk Factors".
16
<PAGE>
SUMMARY FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)
The following table summarizes selected consolidated financial and operating
data of the Company for the years ended December 31, 1995 and 1996 and certain
balance sheet data as of December 31, 1996. The data is presented on an actual
basis for the years ended December 31, 1995 and 1996 and as of December 31, 1996
and on a pro forma basis for the year ended and as of December 31, 1996 to give
effect to the Merger, as adjusted to give effect to the issuance of the
Outstanding Notes and the consummation of the Tender Offer. The summary
information provided on an actual basis is derived from the Consolidated
Financial Statements that have been audited by Arthur Andersen LLP, independent
public accountants, and are included elsewhere in this Prospectus. The pro forma
financial data, as adjusted for the issuance of the Outstanding Notes, is
provided for informational purposes only, is unaudited and is not necessarily
indicative of future results or what the operating results would have been had
the transactions actually been consummated as of the beginning of the periods
indicated. The following Summary Financial and Operating Data should be read in
conjunction with the Consolidated Financial Statements and the notes thereto and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, YEAR ENDED
------------------------ DECEMBER 31, 1996
1995 1996 PRO FORMA, AS ADJUSTED
------------ ---------- ----------------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Total net revenues................................... $213,940 $240,116 $532,061
Operating income..................................... 22,990 34,258 64,603
Equity earnings from affiliates...................... 2,313 2,530 2,530
Net income((1))...................................... 18,359 45,722 50,500
Net income per Ordinary Share before
accretion((1))((9))................................. $0.87 $1.58 $1.54
Weighted average number of Ordinary Shares........... 21,194 28,915 32,805
Ratio of earnings to fixed charges((2)).............. 2.9x 13.5x 2.6x
OTHER FINANCIAL DATA:
EBITDA((3)).......................................... 33,226 45,700 77,445 (4)
Depreciation and amortization........................ 10,236 11,442 21,586
Capital expenditures:
Maintenance........................................ 6,061 11,353 19,502
Expansion.......................................... 40,739 68,123 79,649
------------ ---------- --------
Total............................................ 46,800 79,476 99,151
Ratio of EBITDA to interest expense(3)(5)............ -- -- 3.7x
Ratio of long-term debt to EBITDA(3)(6).............. -- -- 2.6x
ATLANTIS OPERATING DATA:
Average number of rooms.............................. 1,147 1,147
Average occupancy.................................... 85% 87%
Average daily room rate.............................. $122 $158
Average number of slot machines...................... 811 813
Win per slot machine per day......................... $115 $117
Average number of table games........................ 68 64
Win per table game per day........................... $1,851 $1,826
ATLANTIC CITY OPERATING DATA:((7))
Average number of slot machines...................... 2,218 2,350
Win per slot machine per day......................... $236 $214
Average number of table games........................ 81 81
Win per table game per day........................... $2,495 $2,413
CONNECTICUT OPERATING DATA:((8))
Average number of slot machines...................... -- 2,575
Win per slot machine per day......................... -- $317
Average number of table games........................ -- 180
Win per table game per day........................... -- $2,251
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
--------------------------
ACTUAL AS ADJUSTED
------------ ------------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents, including restricted cash.......................... $122,864 $156,029
Total assets.................................................................. 1,122,619 1,160,863
Total debt((1)(0))............................................................ 263,365 306,522
Shareholders' equity.......................................................... 702,989 700,041
</TABLE>
- ------------
(1) Pro forma net income and pro forma net income per share do not reflect an
after-tax loss of $2,948 and $0.09 per share, respectively, on the
extinguishment of debt resulting from the Tender Offer.
(2) For the purposes of computing the ratio of earnings to fixed charges, (i)
earnings represent income (loss) from continuing operations before income
taxes plus fixed charges exclusive of capitalized interest, and (ii) fixed
charges consists of interest, whether expensed or capitalized, and
amortization of deferred financing fees. There were no preference shares
outstanding for any period. Accordingly, the ratio of earnings to combined
fixed charges and preferred stock dividends is identical to the ratio of
earnings to fixed charges. In addition, in the 1996 pro forma calculation of
the ratio of earnings to fixed charges, earnings include $8,744 related to
payments under the Showboat Lease and interest expense includes $8,804
related to the Showboat Notes. See footnote 4. Had this ratio been
calculated excluding these amounts, the ratio would have been 2.9x.
(3) EBITDA represents income from operations before interest, taxes,
depreciation and amortization. EBITDA should not be construed as an
alternative to operating income or any other measure of performance
determined in accordance with U.S. GAAP or as an indicator of the Company's
operating performance, liquidity or cash flows generated by operating,
investing and financing activities. The Company has included the information
concerning EBITDA as management understands it is used by certain investors
as one measure of cash flow. This line item enables comparison of the
Company's performance with the performance of other companies that report
EBITDA.
(4) SINA owns land upon which the Showboat Casino Hotel in Atlantic City is
situated. This land is leased to Atlantic City Showboat, Inc. ("ACS")
pursuant to a 99-year net lease dated October 26, 1983 (the "Showboat
Lease"). The lease payment was $8,744 for 1996. SINA has outstanding
$105,333 of First Mortgage Non-Recourse Pass-Through Notes due June 30, 2000
(the "Showboat Notes"), which are non-recourse and secured by a mortgage and
collateral assignment of the Showboat Lease. Interest on the non-recourse
Showboat Notes consists of a pass-through of the lease payments under the
Showboat Lease. EBITDA on a pro forma basis for the year ended December 31,
1996 excludes $8,744 in other revenues related to payments under the
Showboat Lease.
(5) In calculating this ratio $8,744 in other revenues related to payments under
the Showboat Lease is excluded from EBITDA and $8,804 of interest related to
the Showboat Notes is excluded from interest expense.
(6) In calculating this ratio $105,333 of long-term debt related to the Showboat
Notes is excluded, and $8,744 in other revenues related to payments under
the Showboat Lease is excluded from EBITDA.
(7) The Company did not own or operate the Atlantic City properties until
December 1996.
(8) The Mohegan Sun Casino commenced operations in October 1996.
(9) Prior to the Company's equity offering in March 1996 (the "Equity
Offering"), the holders of the Company's Series A Ordinary Shares had a put
right requiring the Company to purchase any such shares tendered at a price
of $17.50 per share (subject to certain adjustments). Prior to the
termination of such put right concurrently with the consummation of the
Equity Offering, the Company accreted the difference between the original
issue price and the put right price by charging amounts to equity based on
the effective interest method.
(10) Total debt includes $105,333 representing the non-recourse Showboat Notes.
18
<PAGE>
RISK FACTORS
THIS PROSPECTUS CONTAINS, IN ADDITION TO HISTORICAL INFORMATION, "FORWARD
LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT AND
SECTION 21E OF THE EXCHANGE ACT. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM
THOSE PROJECTED IN THE FORWARD LOOKING STATEMENTS AS A RESULT OF THE RISK
FACTORS SET FORTH BELOW AND THE MATTERS SET FORTH IN THIS PROSPECTUS GENERALLY.
IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, HOLDERS OF
OUTSTANDING NOTES SHOULD CONSIDER CAREFULLY THE FOLLOWING FACTORS BEFORE
EXCHANGING ANY OF THE OUTSTANDING NOTES.
CONSEQUENCES OF FAILURE TO PROPERLY TENDER OLD NOTES PURSUANT TO THE EXCHANGE
OFFER
Holders of Outstanding Notes who do not exchange their Outstanding Notes for
Exchange Notes pursuant to the Exchange Offer will continue to be subject to the
following restrictions on transfer with respect to their Outstanding Notes; (i)
the remaining Outstanding Notes may be resold only if registered pursuant to the
Securities Act, if any exemption from registration is available thereunder, or
if neither such registration nor such exemption is required by law, and (ii) the
remaining Outstanding Notes will bear a legend restricting transfer in the
absence of registration or an exemption therefrom. The Company does not
currently anticipate that it will register the Outstanding Notes under the
Securities Act. To the extent that Outstanding Notes are tendered and accepted
in connection with the Exchange Offer, any trading market for remaining
Outstanding Notes could be adversely affected.
Issuance of the Exchange Notes in exchange for the Outstanding Notes
pursuant to the Exchange Offer will be made only after timely receipt by the
Exchange Agent of such Outstanding Notes, a properly completed and duly executed
Letter of Transmittal and all other required documents. Therefore, holders of
the Outstanding Notes desiring to tender such Outstanding Notes in exchange for
Exchange Notes should allow sufficient time to ensure timely delivery. The
Company is under no duty to give notification of defects or irregularities with
respect to tenders of Outstanding Notes for exchange. Outstanding Notes that are
not tendered or that are tendered but not accepted by the Company for exchange,
will, following consummation of the Exchange Offer, continue to be subject to
the existing restrictions upon transfer thereof under the Securities Act and,
upon consummation of the Exchange Offer, certain registration rights under the
Registration Rights Agreement will terminate.
CONSUMMATION OF THE MERGER PRIOR TO RECEIPT OF PLENARY LICENSE
In connection with its acquisition of SINA, Sun International applied to the
NJCCC for a Plenary License. Prior to the Merger, the Company received an ICA
from the NJCCC, which permitted it to consummate the Merger before receipt of a
Plenary License. In granting an ICA to the Company, the NJCCC found that the
Company is qualified to act as a Holding Company on a preliminary basis, pending
a final determination. In addition, as part of its ICA approval, the NJCCC
approved the Company's selection of former New Jersey Governor Thomas H. Kean as
the ICA trustee (the "ICA Trustee") to act in accordance with the NJCCA.
Because the Company elected to consummate the Merger pursuant to an ICA, the
NJCCA required the Company to place the Securities (as defined in the NJCCA) of
SINA into a "stand by" trust (the "ICA Trust") with the ICA Trustee as trustee.
If the NJCCC determines that there is reasonable cause to believe that the
Company should not be granted a Plenary License, the ICA Trust will become
activated and the ICA Trustee will take control of the SINA Securities pending a
final determination by the NJCCC with respect to the Company's application for a
Plenary License, with the exception that the Company could request that the
NJCCC direct the ICA Trustee to dispose of the SINA Securities prior to the
final qualification determination. In the event the Company's application for a
Plenary License is denied, the ICA Trustee will be obligated to dispose of all
SINA Securities held in the ICA Trust. The Company would then only be entitled
to receive the lesser of (i) the fair market value and (ii) the price paid by
the Company for the SINA Securities. Transaction costs paid by the Company in
respect of the Merger would not be recoverable by the Company regardless of the
price at which the SINA Securities held in the ICA Trust were sold. There can be
no assurance that the Company would not sustain substantial losses from the sale
of SINA Securities from the ICA Trust in the event the Company's application for
a Plenary License
19
<PAGE>
was denied. See "Business -- Certain Matters Affecting the Company's Atlantic
City Operations--Regulation, Gaming Taxes and Fees".
RISKS ASSOCIATED WITH NEW PROJECTS AND EXPANSION
GENERAL
The ability of the Company to take advantage of business opportunities and
to further develop existing businesses will depend upon a number of factors,
including the availability of financing, terms and covenants in its credit
facilities, the ability of the Company, its key employees and, in certain cases,
its partners to obtain governmental licenses, approvals and permits (including
gaming and liquor licenses and permits and approvals relating to land use,
construction and zoning) and, in some cases, the ability to find, and maintain
relationships with, suitable development and business partners. The failure to
obtain required licenses, permits or approvals in a timely manner or the loss or
suspension of any such license, permit or approval may delay, restrict or
prevent one or more projects, including the Paradise Island Expansion, from
opening or from opening as scheduled or the Company from being the developer,
manager or operator of one or more such projects.
DEVELOPMENT, CONSTRUCTION AND RELATED RISKS
The Paradise Island Expansion is expected to be completed by late 1998 and
the Pirate's Cove Renovation is expected to be completed during the first half
of 1999. Development projects such as these, however, are inherently subject to
significant development and construction risks, including, but not limited to,
labor disputes, shortages of material and skilled labor, weather interference,
unforeseen engineering problems, unforeseen environmental problems, fire,
natural disasters, geological problems, construction, demolition, excavation,
regulatory and/or equipment problems and unanticipated cost increases, any of
which could give rise to delays or cost overruns. Pre-existing environmental
conditions, if any, on development sites can result in material liabilities and
additional costs, as well as delays. The foregoing factors may delay or prohibit
the construction or opening of one or more such projects or any future projects
undertaken by the Company. The Paradise Island Expansion is being constructed
across a lagoon from the existing Atlantis. While the Company does not expect
any material adverse impact on Atlantis during the construction of the Paradise
Island Expansion, no assurances can be given that disruption to the operations
of Atlantis will not occur.
ABILITY TO COMPLETE PROJECTS ON TIME AND WITHIN BUDGET
The anticipated construction costs and completion date for the Paradise
Island Expansion are based on estimates and plans prepared by the Company and
its consultants. Although negotiations are in the final stages, the Company has
not yet entered into a construction contract with respect to the Paradise Island
Expansion. The planning for the Pirate's Cove Renovation has not yet begun. No
assurances can be given that current budgets and estimates will prove to be
accurate. In addition, no assurance can be given that the Paradise Island
Expansion will be completed by late 1998, that the Pirate's Cove Renovation will
be completed during the first half of 1999, or that construction costs for the
Paradise Island Expansion or the Pirate's Cove Renovation will not exceed
budgeted amounts. Failure to complete the Paradise Island Expansion or the
Pirate's Cove Renovation or to complete any of such projects within the budget
or on schedule may have a material adverse effect on the results of operations
and financial condition of the Company. There can be no assurance that any
development project, including the Paradise Island Expansion and the Pirate's
Cove Renovation, will become operational as scheduled, or at all, or ultimately
result in profitable operations. If any development project is not successful,
the Company would be required to write off costs or investments associated with
such project.
NEED FOR ADDITIONAL FINANCING
The development of resorts and casinos is capital-intensive. In connection
with the Paradise Island Expansion and the Pirate's Cove Renovation and any
other future development projects, it may be
20
<PAGE>
necessary for the Company to raise additional financing, including by accessing
the capital markets. Although the Company has the Existing Revolving Credit
Facility in place, the banks' commitments thereunder are subject to satisfaction
of a number of conditions precedent. No assurances can be given that the Company
will be able to satisfy such conditions precedent at the time that funding under
the Existing Revolving Credit Facility is needed or that the Company will be
able to comply with the covenants and other terms of the credit agreement. While
the Company intends to amend the Existing Revolving Credit Facility, there can
be no assurances given that it will be able to do so, or, if successful in so
doing, whether the Company will be able to satisfy the conditions to borrowing
or comply with all the covenants expected to be contained therein. Also, there
can be no assurance that the Company will be able to raise any additional
financing which will become necessary in connection with the Paradise Island
Expansion, the Pirate's Cove Renovation or any future development projects. In
this regard, the credit agreement under the Existing Revolving Credit Facility
contains, and the Company's future credit facilities may contain, restrictive
covenants, which may prevent or restrict additional indebtedness. See "Business
- -- Existing Revolving Credit Facility", and "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity, Capital
Resources and Capital Spending".
ATLANTIC CITY EXPANSION
In 1998, the Company expects to begin planning of the Atlantic City
Expansion. The Company's ability to successfully complete this project at an
acceptable cost is subject to all the risks and uncertainties described above as
well as being particularly subject to uncertainty due to the preliminary status
of the project. In addition, the Company has not yet selected architects,
contractors and other professionals for the project, nor has construction and
related financing been arranged. The Company's inability to complete design and
other plans for the project or secure necessary financing would prevent the
commencement of construction. In addition to its need for additional financing
and lack of formal plans, the size and scope of the Atlantic City Expansion
depends, in part, upon the amount of additional land the Company is able to
acquire.
RECENT OPERATING RESULTS OF SINA
Two factors negatively affected SINA's operating results in
1996 -- heightened competition for patrons in the Atlantic City market and
severe weather conditions during the first quarter of 1996. There can be no
assurance that such factors will not continue to exist or reoccur and that the
effect on the Company will not be material.
As competition for patrons has intensified, promotions -- complimentary
services, cash giveaways and events -- have increased. In 1996 certain
competitors of SINA increased complimentaries and cash giveaways dramatically.
Although SINA did increase its promotions somewhat during the first quarter of
1996 and more significantly during the second quarter of 1996, it elected not to
keep pace with the industry's increased promotions due to the belief that the
resulting increase in gaming win would not be sufficient to justify the
incremental costs incurred. Consequently, SINA's market share of revenues
suffered. Also, expansions at two competing Atlantic City properties were
completed in May 1996 which, together, added approximately 1,100 hotel rooms and
approximately 60,000 square feet of gaming space to the Atlantic City market.
Several other companies have announced plans to expand existing or construct new
casino/hotels in Atlantic City.
Also, the severe weather experienced during the first quarter of 1996
adversely affected operations in that period as the principal means of
transportation to Atlantic City is by automobile or bus. The impact of inclement
weather is more severe on the Resorts Casino Hotel than on competing properties,
which currently have more covered parking and covered terminals for bus patrons.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Results of Operations".
21
<PAGE>
COMPETITION
GENERAL
The resort and casino industries are characterized by a high degree of
competition among a large number of participants and are largely dependent on
tourism. The Company competes with resorts both with and without gaming and with
gaming facilities generally, including land-based casinos, riverboat, dockside
and cruise ship on-board casinos and other forms of gaming, as well as other
forms of entertainment. A number of the Company's competitors are larger and
have greater financial and other resources than the Company. In addition, a
number of jurisdictions have recently legalized gaming and other jurisdictions
are considering the legalization of gaming. The Company cannot predict what
effect a continued proliferation of gaming and the resulting increase in
competition could have on the Company's ability to compete effectively in the
future.
The Company believes that the ability to compete effectively in the resort
and gaming industries, particularly the destination resort and gaming
industries, is based on several factors, including the scope, quality, location
and accessibility of resort and gaming facilities and amenities, the
effectiveness of marketing efforts, customer service, the relative convenience
of available transportation, service and the quality and price of rooms, food
and beverages, convention facilities and entertainment.
THE BAHAMAS
The Company's Paradise Island operations compete with cruise ships and other
hotels and resorts, particularly those on Paradise Island and New Providence
Island in The Bahamas as well as those on Grand Bahamas Island and other
Caribbean islands. Future casino developments in other locations are also a
potential source of competition for the Company's Paradise Island operations.
The introduction of additional casino gaming, particularly land-based gaming in
the United States and especially the eastern regions of the United States, could
reduce the number of tourists visiting The Bahamas and could be a substantial
source of competition for Atlantis. See "Business -- Competition -- The
Bahamas".
ATLANTIC CITY
Competition in the Atlantic City casino/hotel market is very strong.
Casino/hotels compete on a number of different bases, including promotional
allowances given to customers, entertainment, advertising, services provided to
patrons, caliber of personnel, attractiveness of the hotel and casino areas and
related amenities, and parking facilities. The Resorts Casino Hotel competes
directly with 11 casino/hotels in Atlantic City which, in the aggregate, contain
approximately 1,000,000 square feet of gaming area, including simulcast betting
and poker rooms, and almost 10,000 hotel rooms. In addition, several gaming
companies have announced plans to enter the Atlantic City market. The Company
also competes to a lesser degree with gaming operations run by federally
recognized Indian tribes in New York and New England, and other Indian tribes in
the northeastern United States are seeking federal recognition in order to
establish gaming operations that would further increase the competition facing
the Company. See "Business -- Competition -- Atlantic City".
CONNECTICUT
The Mohegan Sun Casino is marketed primarily to the day-trip customer.
Management believes it competes primarily with Foxwoods and, to a lesser extent,
with casinos in Atlantic City, some of which have greater resources and name
recognition than the Company or the Mohegan Tribe. Currently, Foxwoods is the
only casino in operation within 150 miles of the Mohegan Sun Casino site.
Foxwoods is located approximately 10 miles from the Mohegan Sun Casino site and
is currently the largest gaming facility in the United States in terms of the
number of slot machines, with more than 4,500 slot machines currently in
operation. In addition, Foxwoods offers a number of amenities that the Mohegan
Sun Casino does not currently offer, including hotels and extensive non-gaming
entertainment facilities. Foxwoods has been in operation for more than four
years and the Company believes that Foxwoods' successful operation has enabled
it to build financial resources that are currently substantially greater than
those of the Mohegan
22
<PAGE>
Tribal Gaming Authority, an agency of the Mohegan Tribe (the "Mohegan Gaming
Authority"), or the Mohegan Tribe.
Currently, outside Atlantic City, casino gaming in the northeastern United
States may be conducted only by federally recognized Indian tribes operating
under the Indian Gaming Regulatory Act of 1988, as amended ("IGRA"). In addition
to the Pequot Tribe, which operates Foxwoods, a federally recognized tribe in
Rhode Island and a federally recognized tribe in Massachusetts are each seeking
to establish gaming operations in their respective states. The Oneida Tribe,
which operates a gaming facility in upstate New York, is seeking to expand its
operations. In addition, a number of Indian tribes in the northeastern United
States are seeking federal recognition in order to establish gaming operations.
The Company cannot predict whether any of these tribes will be successful in
establishing gaming operations and, if established, whether such gaming
operations will have a material adverse effect on the operations of the Mohegan
Sun Casino.
In addition, a number of states, including Connecticut, have explored
legalizing casino gaming by non-Indians in one or more locations. In November
1995, the Connecticut state legislature rejected a proposal submitted by the
Pequot Tribe to develop a casino in Bridgeport, Connecticut. The Pequot proposal
had been submitted in response to a request for proposals made by the State of
Connecticut. Under the tribal-state compact between the Mohegan Tribe and the
State of Connecticut, if Connecticut were to legalize any gaming operations
other than pursuant to IGRA (I.E., by an Indian tribe on Indian land) with slot
machines or other commercial casino games, the Mohegan Tribe would no longer be
required to make payments to the State of Connecticut related to slot machine
revenues. The Company is unable to predict whether the Connecticut state
legislature will accept any other casino proposal and, if any such proposal
results in a casino being constructed and opened, whether such casino will have
a material adverse effect on the Mohegan Sun Casino. See "Business --
Competition -- Connecticut".
OTHER EXISTING OPERATIONS
Sun Indian Ocean owns, and the Company manages, resort hotels in Mauritius
and the Comoros. As vacation destinations, these resorts are in competition with
other locations offering vacations to tourists from Europe, southern Africa and
parts of Asia. In Mauritius, there is also competition from other resorts on the
island. In the Comoros, however, there are no competing resorts at the current
time. Sun France owns, and the Company provides technical assistance to, casinos
located in Nice, Chamonix and in the Marseilles districts of Cassis and
Carry-le-Rouet. Casino licenses in France may be issued only in resort towns or
locations with natural spa facilities. Currently, the Company considers there to
be approximately eight casinos that are in direct competition with the Sun
France casinos. If additional casino licenses were granted in the resort
locations in which Sun France operates and such casinos were built, Sun France's
casinos would face direct competition from those casinos. See "Business --
Competition -- Other Existing Operations".
CONTROL BY PRINCIPAL SHAREHOLDER
SIIL controls approximately 49% of the Ordinary Shares of the Company and,
accordingly, is able to effectively control the outcome of substantially all
matters requiring shareholder approval, including the election of the Company's
directors, thereby controlling the management, policies and business operations
of the Company.
Pursuant to the terms of a heads of agreement, dated August 1993, as amended
(the "Heads of Agreement"), among the Company, SIIL and the Government of the
Commonwealth of The Bahamas, SIIL has agreed, among other things, to maintain
voting power in the Company of not less than 45% until six months after
completion of the Paradise Island Expansion and thereafter to control a majority
of the Board of Directors of the Company for an additional five years. The
requirement that SIIL maintains this level of voting power could have an adverse
effect on the Company's ability in the future to obtain certain types of
financing and could also have an adverse effect on the Company's ability to
expand its business through acquisitions. See "Principal Shareholder" and
"Business -- Certain Matters Affecting the Company's Bahamas Operations".
23
<PAGE>
REGULATORY AND POLITICAL FACTORS
GENERAL
The operation of gaming facilities is generally subject to extensive
governmental regulation. Regulatory authorities typically require various
registrations, licenses, findings of suitability and approvals to be held by
operators of gaming facilities. The regulatory authorities in these
jurisdictions generally have broad discretion in the granting, renewal,
suspension and revocation of licenses and require that such registrations,
licenses, findings and approvals be renewed or updated periodically. In
addition, gaming debts may not be legally enforced in certain foreign
jurisdictions or in certain jurisdictions within the United States and,
therefore, the Company may be unable to collect gaming debts from patrons of its
casinos who reside in such jurisdictions. The Company and the necessary key
personnel are currently qualified to operate in all the jurisdictions in which
the Company operates. No assurances can be given, however, that any new or
permanent licenses (including the Plenary License), permits or approvals that
may be required by the Company, its key employees and its partners, if
applicable, in the future will be granted or that its existing licenses, permits
and approvals will be renewed or will not be suspended or revoked in the future.
Due to the extensive regulatory environments in which the Company operates,
the various countries in which it operates and its dependence on tourism, the
Company's operations may be materially and adversely affected by developments
with respect to inflation, interest rates, government policies, price and wage
controls, labor relations, land use controls, environmental controls, exchange
control regulations, exchange rates, taxation, expropriation, political and
social instability and other political or economic developments in or affecting
the jurisdictions in which it operates and from which it draws tourists.
Gaming operators generally are subject to significant taxation and fees.
Such taxes and fees are subject to increase at any time. The Company pays
substantial taxes and fees with respect to its gaming operations and will likely
incur similar taxes and fees in any other jurisdictions in which it conducts
gaming operations in the future. Any material increase or the adoption of
additional taxes or fees could have a material adverse effect on the Company.
DIVESTITURE RISK
The NJCCA imposes substantial restrictions on the ownership of securities of
the Company and its subsidiaries. A holder of Notes may be required to meet the
qualification provisions of the NJCCA relating to financial sources and/or
security holders. However, as it did in approving the issuance of the
Outstanding Notes and the Exchange Offer, the NJCCC can waive the qualification
provisions of the NJCCA for Institutional Investors (as defined in the NJCCA).
The Indenture provides that if the NJCCC requires a holder of Notes (whether the
record or beneficial owner) to qualify under the NJCCA and such holder does not
so qualify, then such holder must dispose of his interest in the Notes within 30
days after receipt by the Issuers of notice of such finding that such holder
does not so qualify, or the Issuers may redeem such Notes at the lower of the
outstanding principal amount or their value calculated as if the investment had
been made on the date of disqualification of such holder (or such lesser amount
as may be required by the NJCCC).
For a more complete description of the regulatory and political factors
affecting the Company's operations, see "Business -- Certain Matters Affecting
the Company's Bahamas Operations", "-- Certain Matters Affecting the Company's
Connecticut Operations" and "-- Certain Matters Affecting the Company's Atlantic
City Operations".
CERTAIN MATTERS PERTAINING TO CHAIRMAN
The Company's Chairman, Mr. Solomon Kerzner, has been subject to an
investigation in connection with events that occurred in 1986 in the Transkei, a
former "tribal homeland" that was regarded by South Africa as an independent
country but not recognized by the international community. The investigation
relates to an alleged improper payment made to Chief George Matanzima, then
Prime Minister of the Transkei who was overthrown by a military coup in 1988. In
April 1994, as part of South Africa's new
24
<PAGE>
constitutional process, the Transkei was reincorporated into South Africa and
the Attorney General of the Transkei is now an official of the South African
judicial system. In October 1995, Mr. Kerzner, although not officially notified,
learned that the Attorney General of the Transkei had requested that the South
African police investigate the 1986 payment. A March 1996 report of the
investigating police officer, made available to the attorneys for the companies
involved in accordance with South African law, states that, by allowing the
payment to be made, Mr. Kerzner acted without any personal benefit in an effort
to protect what Mr. Kerzner believed to be legitimate rights of the companies
involved which were being threatened by Matanzima. Such report also describes
Matanzima's action as being tantamount to commercial extortion. Notwithstanding
such report, however, any decision regarding the case, including whether to
bring charges against Mr. Kerzner or others, rests in the sole discretion of the
Attorney General of the Transkei. Mr. Kerzner recently commenced an action in
the South Africa courts to end the 10-year investigation. In this action, Mr.
Kerzner has maintained that the prolonged investigation is in violation of his
constitutional rights and he is seeking redress from the court to have the
matter closed. On March 10, 1997, the High Court in Umtata issued an injunction
against the Attorney General of the Transkei prohibiting him from charging Mr.
Kerzner or taking any other action in connection with a possible charge pending
the resolution of Mr. Kerzner's constitutional claims. The High Court is
currently scheduled to hear a portion of Mr. Kerzner's claims on May 8, 1997. A
date to hear the entire matter has not yet been set. While the Company and Mr.
Kerzner believe that there is no merit to any potential charge, there can be no
assurances that Mr. Kerzner's case will prevail and that a charge will not be
brought and the licensing qualifications of the Company or Mr. Kerzner adversely
affected.
To date, the Transkei events, which occurred over ten years ago, have not
affected the ability of the Company or Mr. Kerzner to be licensed in the
jurisdictions in which the Company operates. After disclosure to all applicable
licensing authorities of the facts surrounding the Transkei matter, and
following investigations, the Company and Mr. Kerzner hold gaming licenses in
The Bahamas and Connecticut and the Company holds gaming licenses in France and
an ICA in New Jersey.
TCA MANAGEMENT AGREEMENT
Management fees payable to TCA pursuant to the TCA Management Agreement and
payments with respect to certain monies loaned by the Company to the Mohegan
Gaming Authority are subordinate in right to the required payments on $175
million of the Mohegan Gaming Authority's Senior Secured Notes due 2002 (the
"Mohegan Senior Notes"). The ability of the Mohegan Gaming Authority to meet its
payment obligations and its debt service requirements, including with respect to
the amounts loaned by the Company to the Mohegan Gaming Authority and payment of
management fees to TCA, will be entirely dependent upon the future performance
of the Mohegan Sun Casino, which is subject to financial, economic, political,
competitive, regulatory, environmental and other factors, many of which are
beyond its control.
The National Indian Gaming Commission ("NIGC") has the power to require
modifications of management agreements with respect to casinos owned by Indian
tribes if those agreements are at variance with applicable law or regulations,
or to void agreements if the management company fails to comply with the terms
of the agreement or applicable laws or regulations. In addition, management
agreements can be renewed or extended by the parties only with the approval of
the NIGC. If the NIGC were to determine that a person or entity holding a
Substantial Interest (as defined herein) in a gaming management agreement was
unsuitable, prior approval of the management agreement could be revoked,
subsequent approvals or renewals could be blocked, and certain required gaming
licenses could be suspended, rescinded or denied. The voiding or modification of
the terms of the TCA Management Agreement could have a material adverse effect
on the results of operations and financial condition of the Company.
LIMITED RECOURSE AGAINST TRIBAL ASSETS
Although the Mohegan Tribe and the Mohegan Gaming Authority have sovereign
immunity and may not be sued without their consent, the Mohegan Tribe and the
Mohegan Gaming Authority have granted a limited waiver of sovereign immunity and
consent to suit in connection with the TCA Management
25
<PAGE>
Agreement and amounts loaned by the Company to the Mohegan Gaming Authority. In
addition, the Mohegan Gaming Authority has granted a limited waiver of sovereign
immunity and consent to suit with respect to the enforcement of the obligation
to repay the Mohegan Senior Notes. In the event that such waiver of sovereign
immunity is held to be ineffective, TCA and the Company could be precluded from
judicially enforcing their rights and remedies. Generally, however, waivers of
sovereign immunity have been held to be enforceable against Indian tribes such
as the Mohegan Tribe.
POSSIBLE ENVIRONMENTAL LIABILITIES
The Mohegan Sun Casino site was formerly occupied by United Nuclear
Corporation ("UNC"), a naval products manufacturer of, among other things,
nuclear reactor fuel components. UNC's facility was officially decommissioned on
June 8, 1994, when the Nuclear Regulatory Commission ("NRC") confirmed that all
licensable quantities of special nuclear material ("SNM") had been removed from
the Mohegan Sun Casino site and that any residual SNM contamination was
remediated in accordance with the NRC-approved decommissioning plan.
From 1991 through 1993, UNC commissioned an environmental consultant to
perform a series of environmental assessments on the Mohegan Sun Casino site,
including extensive soil investigations and groundwater monitoring. The
environmental assessments detected, among other things, volatile organic
chemicals, heavy metals and fuel hydrocarbons in the soil and groundwater.
Extensive remediation of contaminated soils and additional investigations were
then completed. Although the Mohegan Sun Casino site currently meets applicable
remediation requirements, no assurance can be given that the various
environmental assessments with respect to the Mohegan Sun Casino site revealed
all existing environmental conditions, that any prior owners or tenants of the
Mohegan Sun Casino site did not create any material environmental condition not
known to the Mohegan Gaming Authority, that future laws, ordinances or
regulations will not impose any material environmental liability or that a
material environmental condition does not otherwise exist on the Mohegan Sun
Casino site. Future remediation may be necessary if excavation and construction
exposes contaminated soil which has otherwise been deemed isolated and not
subject to cleanup requirements. Such remediation could adversely impact the
results of operations of the Mohegan Sun Casino and therefore the results of
operations and financial conditions of the Company.
In addition, the Environmental Protection Agency ("EPA") has named a
predecessor to SINA as a potentially responsible party under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended
("CERCLA" or "Superfund"), for the cleanup of contamination resulting from past
disposals of hazardous waste at a site to which the predecessor, among others,
sent wastes in the past. At this time, the Company is unable to determine the
extent of its liability, if any, at this site. See "Business--Environmental
Matters".
SUBORDINATION OF NOTES
The payment of principal of, premium, if any, and interest and Liquidated
Damages, if any, on the Notes and the Guarantees are, to the extent set forth in
the Indenture, subordinated in right of payment to the prior payment in full of
all Senior Debt of the Issuers and Guarantors, as applicable. As of the date of
this Prospectus, after giving effect to the issuance of the Outstanding Notes
and the use of proceeds therefrom, the Company on a consolidated basis had no
Senior Debt outstanding.
During the continuance of any default (beyond any applicable grace period)
in the payment of principal, premium, interest or any other payment due on
Senior Debt, and, in certain circumstances, during the continuance of
non-payment defaults, no payment of principal, interest or Liquidated Damages on
the Notes may be made by the Issuers or the Guarantors. In addition, upon any
distribution of assets of the Issuers or the Guarantors upon any dissolution,
winding up, liquidation or reorganization, the payment of the principal,
interest and Liquidated Damages on the Notes or the Guarantees is subordinated
to the extent provided in the Indenture to the prior payment in full of all
Senior Debt of the Issuers or the Guarantors, as applicable. See "Description of
Notes -- Subordination".
By reason of this subordination, in the event of the Issuers' dissolution,
holders of Senior Debt may receive more, ratably, and Holders of the Notes may
receive less, ratably, than the other creditors of the Issuers.
26
<PAGE>
REPURCHASE OF NOTES AT THE OPTION OF HOLDERS UPON A CHANGE OF CONTROL;
AVAILABILITY OF FUNDS
In the event of a Change of Control Triggering Event, each Holder of Notes
will have the right to require that the Issuers repurchase the Notes held by
such Holder in whole or in part at a redemption price of 101% of the principal
amount thereof, plus accrued and unpaid interest, if any, thereon, plus
Liquidated Damages, if any to the date of purchase. If a Change of Control
Triggering Event were to occur, there can be no assurance that the Issuers would
have sufficient funds to pay such redemption price for all Notes tendered by the
Holders thereof. The Issuers' ability to pay such redemption price is, and may
in the future be, limited by the terms of the Existing Revolving Credit Facility
or other agreements relating to indebtedness that constitute Senior Debt. See
"--Subordination of Notes".
The occurrence of certain of the events that would constitute a Change of
Control Triggering Event may constitute a default under the Existing Revolving
Credit Facility. Future indebtedness of the Issuers may contain prohibitions of
certain events which would constitute a Change of Control Triggering Event or
require the Issuers to offer to redeem such indebtedness upon a Change of
Control Triggering Event. Moreover, the exercise by the Holders of Notes of
their right to require the Issuers to purchase the Notes could cause a default
under such future indebtedness, even if the Change of Control Triggering Event
itself does not, due to the financial effect of such purchase on the Issuers.
Finally, the Issuers' ability to pay cash to Holders of Notes upon a purchase
may be limited by the Issuers' then existing financial resources. There can be
no assurance that sufficient funds will be available when necessary to make any
required purchases.
ABSENCE OF PUBLIC MARKET
The Exchange Notes will constitute a new issue of securities with no
established trading market. The Issuers do not intend to list the Exchange Notes
on any national securities exchange or to seek the admission thereof to trading
in the National Association of Securities Dealers Automated Quotation system.
The Issuers have been advised by the Initial Purchasers that, following
completion of the Offering, the Initial Purchasers presently intend to make a
market in the Exchange Notes. However, the Initial Purchasers are not obligated
to do so and any market-making activities with respect to the Exchange Notes may
be discontinued at any time without notice. The Outstanding Notes are, and the
Exchange Notes are expected to be, eligible for trading in the PORTAL market.
However, no assurance can be given that an active public or other market will
develop for the Exchange Notes or as to the liquidity of or the trading market
for the Exchange Notes. If a trading market does not develop or is not
maintained, holders of the Exchange Notes may experience difficulty in reselling
the Exchange Notes or may be unable to sell them at all. If a market for the
Exchange Notes develops, any such market may be discontinued at any time. If a
public trading market develops for the Exchange Notes, future trading prices of
the Exchange Notes will depend on many factors, including, among other things,
prevailing interest rates, the Company's results of operations and the market
for similar securities. Depending on prevailing interest rates, the market for
similar securities and other facts, including the financial condition of the
Company, the Notes may trade at a discount from their principal amount.
FRAUDULENT TRANSFER CONSIDERATIONS
The obligation of each of the Guarantors of the Notes may be subject to
review under state, federal or foreign fraudulent transfer laws. Under state and
federal laws, if a court, in a lawsuit by an unpaid creditor or representative
of creditors of a Guarantor, such as a trustee in bankruptcy or such Guarantor
as debtor-in possession, were to find that at the time such obligation was
incurred, such Guarantor, among other things, (a) did not receive fair
consideration or reasonably equivalent value therefore and (b) either (i) was
insolvent, (ii) was rendered insolvent, (iii) was engaged in a business or
transaction for which its assets constituted unreasonably small capital, or (iv)
intended to incur or believed that it would incur debts beyond its ability to
pay as such debts matured, such court could avoid such Guarantor's obligation
under its guarantee, and direct the return of any payments made under the
guarantee to such Guarantor or to a fund for the benefit of its creditors.
Moreover, regardless of the factors identified in the foregoing clauses (i)
through (iv), such court could avoid such obligation, and direct such repayment,
if it found that the obligation was incurred with intent to hinder, delay, or
defraud such Guarantor's creditors. In that event,
27
<PAGE>
the holders of Notes would have to look for repayment to other Guarantors whose
guarantee obligations had not been avoided.
The measure of insolvency for purposes of the foregoing will vary depending
upon the law of the jurisdiction being applied. Generally, however, an entity
would be considered insolvent if the sum of its debts is greater than all of its
property at a fair valuation or if the present fair salable value of its assets
is less than the amount that will be required to pay its probable liability on
its existing debts as they become absolute and matured.
DEPENDENCE ON KEY PERSONNEL
The Company depends upon the efforts and skills of Mr. Solomon Kerzner, its
Chairman and Chief Executive Officer. See "Management". Mr. Kerzner is also the
Chairman of World Leisure Group Limited, a British Virgin Islands corporation
("WLG"), which indirectly controls through intermediate entities approximately
one-third of the outstanding equity of SIIL, and is also a beneficiary of a
Kerzner family trust which owns WLG. The loss of the services of Mr. Kerzner or
his inability to devote sufficient attention to the operations of the Company
could have a material adverse effect on the Company's ability to develop
potential business opportunities. According to Mr. Kerzner's employment contract
with the Company, he is obligated to devote at least two-thirds of his working
time to the operations of the Company until July 1, 1998. In addition, Mr.
Kerzner has agreed, subject to certain specified exceptions, that during the
term of his employment he will not directly or indirectly engage in any business
competitive with the business of the Company in any part of the world outside
southern Africa and that he will bring all business opportunities relevant to
the business of the Company to the attention of the Company and permit the
Company exclusively to exploit such opportunities. There is no assurance that
two-thirds of Mr. Kerzner's working time will be sufficient to enable the
Company to develop its business.
DEPENDENCE ON AIR SERVICE
Most patrons of the Company's resorts on Paradise Island and virtually all
the patrons of Sun Indian Ocean's hotels arrive by air. Although the Company
considers the current level of air service to The Bahamas, Mauritius and the
Comoros to be adequate, any interruption or reduction of air service to The
Bahamas or Mauritius and the Comoros could have an adverse effect on the
Company.
SEASONALITY AND WEATHER
The Company's business has historically been seasonal, with the largest
number of patrons visiting The Bahamas, Mauritius and the Comoros during late
December and the first three months of the calendar year. Accordingly, revenues
and operating profits for the Company have historically been higher during the
first calendar quarter than in successive quarters. In addition, The Bahamas,
Mauritius and the Comoros are subject to tropical weather and storms which, if
severe, can interrupt the normal operations of the Company and affect tourism.
Similarly, inclement weather can adversely affect the operations of the
Company's Atlantic City properties as the principal means of transportation to
Atlantic City is by automobile or bus. Higher revenues and earnings are
typically realized from the Atlantic City operations during the middle third of
the year. See "--Recent Operating Results of SINA".
USE OF PROCEEDS
The Issuers will not receive any cash proceeds from the issuance of the
Exchange Notes offered hereby. In consideration for issuing the Exchange Notes
as described in this Prospectus, the Issuers will receive in exchange
Outstanding Notes in like principal amount, the terms of which are identical in
all material respects to those of the Exchange Notes. The Outstanding Notes
surrendered in exchange for the Exchange Notes will be retired and cancelled and
cannot be reissued. Accordingly, the issuance of the Exchange Notes will not
result in any change in the indebtedness of the Issuers.
Proceeds to the Issuers from the sale of the Outstanding Notes were
approximately $194.0 million after deduction of the Initial Purchasers' discount
and estimated offering expenses. The proceeds were
28
<PAGE>
used to finance the Tender Offer and the Solicitation and to pay related fees
and expenses, with the remaining funds to be utilized for general corporate
purposes.
THE COMPANY
Sun International was established in 1993 in order to acquire the Paradise
Island Resort and Casino and related operations, which acquisition closed on May
3, 1994. In May 1995, the Company acquired from SIIL its equity interests in Sun
Indian Ocean and Sun France and SIIL's project development and management
businesses. SIIL, which controls approximately 49% of the Company's equity, is a
private holding company in which each of Caledonia, Safren and WLG controls
approximately a one-third interest. During 1996, the Mohegan Sun Casino was
developed for the Mohegan Tribe by TCA, a partnership in which the Company,
through its wholly owned subsidiary, Sun Cove, owns a 50% interest. In December
1996, the Company acquired GGE (now SINA). SINA is a holding company which,
through RIH, its indirect wholly owned subsidiary, is principally engaged in the
ownership and operation of the Resorts Casino Hotel.
The Ordinary Shares of Sun International are listed for trading under the
symbol "SIH" on the New York Stock Exchange (the "NYSE"). As of December 31,
1996, there were 32,707,462 Ordinary Shares issued and outstanding, including
3,441,208 Ordinary Shares which were issued in connection with the Merger.
The mailing address of the Company's principal executive offices is
Executive Offices, Coral Towers, Paradise Island, The Bahamas. The telephone
number is (242) 363-2516.
The following chart represents a summary of the Company's organizational
structure:
[LOGO]
- ------------
(1) Own and operate the Company's Paradise Island operations.
(2) Issuer of the Mortgage Notes.
(3) Owns and operates the Resorts Casino Hotel.
(4) Connecticut general partnership which developed and manages the Mohegan Sun
Casino.
(5) Owns and operates the Company's Mauritius and Comoros properties.
(6) Owns and operates the Company's casinos in France.
29
<PAGE>
CAPITALIZATION
(IN THOUSANDS)
The following table sets forth, as of December 31, 1996, the total
capitalization of the Company on an actual basis and as adjusted to give effect
to the issuance of the Notes and the consummation of the Tender Offer.
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
------------------------
HISTORICAL AS ADJUSTED
---------- ------------
<S> <C> <C>
Long-term debt: (1)
Existing Revolving Credit Facility (2)................................................ $ 0 $ 0
Notes................................................................................. -- 199,084
11% Mortgage Notes.................................................................... 132,500 --
11 3/8% Junior Mortgage Notes......................................................... 23,427 --
Capitalized lease obligations......................................................... 2,105 2,105
Other (3)............................................................................. 105,333 105,333
---------- ------------
Total long-term debt................................................................ 263,365 306,522
Less: current portion................................................................. (747) (747)
---------- ------------
Long-term debt, net................................................................. 262,618 305,775
Shareholders' equity (4)................................................................ 702,989 700,041
---------- ------------
Total capitalization................................................................ $ 965,607 $ 1,005,816
---------- ------------
---------- ------------
</TABLE>
- ------------
(1) For a description of the Company's long-term debt, see Note 9 of Notes to
Consolidated Financial Statements.
(2) At December 31, 1996, the amount available under the Existing Revolving
Credit Facility was $250,000.
(3) Represents the non-recourse Showboat Notes.
(4) As adjusted reflects the after-tax loss of $2,948 on the extinguishment of
debt resulting from the Tender Offer.
30
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
The accompanying pro forma consolidated statements of operations present pro
forma information for the Company and SINA giving effect to the Merger using the
purchase method of accounting, as adjusted to give effect to the issuance of the
Outstanding Notes and the consummation of the Tender Offer. The pro forma
consolidated statements of operations of the Company are based on the historical
consolidated statements of operations of the Company and SINA for the year ended
December 31, 1996.
The accompanying pro forma consolidated statements of operations for the
year ended December 31, 1996 have been presented as if the Merger and the
issuance of the Outstanding Notes occurred and the Tender Offer was consummated
on January 1, 1996.
The pro forma adjustments are based on currently available information and
upon certain assumptions that management of the Company believes are reasonable
under the circumstances.
The accompanying pro forma consolidated statements of operations are
provided for informational purposes only and are not necessarily indicative of
the results that will be achieved for future periods. In addition, the
accompanying pro forma consolidated statements of operations do not purport to
represent what the Company's results of operations would actually have been if
the Merger and the issuance of the Outstanding Notes in fact had occurred and
the Tender Offer had been consummated on January 1, 1996. The accompanying pro
forma consolidated statements of operations and the related notes thereto should
be read in conjunction with the Company's consolidated financial statements.
No pro forma consolidated balance sheet is provided because SINA was a
consolidated subsidiary of the Company at December 31, 1996.
31
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
HISTORICAL ADJUSTMENTS
SUN HISTORICAL AND PRO FORMA,
INTERNATIONAL SINA ELIMINATIONS AS ADJUSTED
---------------- ---------- ------------ -----------
<S> <C> <C> <C> <C>
Revenues:
Gaming................................................ $77,342 $258,672 $336,014
Rooms................................................. 67,243 16,010 83,253
Food and beverage..................................... 60,372 27,867 88,239
Tour operations....................................... 15,048 15,048
Management fee income................................. 8,896 8,896
Other................................................. 23,317 19,663(1) 42,980
------- ---------- -----------
Gross Revenues.......................................... 252,218 322,212 574,430
Less: promotional allowances.......................... (12,102 ) (30,267) (42,369 )
------- ---------- -----------
Net revenues........................................ 240,116 291,945 532,061
Costs and Expenses:
Gaming................................................ 41,430 134,974 176,404
Rooms................................................. 12,047 8,782 20,829
Food and beverage..................................... 41,069 32,020 73,089
Other operating expenses.............................. 37,505 40,222 77,727
Selling, general and administrative................... 36,208 37,658 $ (2,200 (a) 71,666
Tour operations....................................... 15,262 15,262
Corporate expenses.................................... 10,895 10,895
Depreciation and amortization......................... 11,442 12,386 (2,242 (b) 21,586
------- ---------- ------------ -----------
Total operating expenses............................ 205,858 266,042 (4,442 ) 464,840
------- ---------- ------------ -----------
Income from Operations.................................. 34,258 25,903 4,442 64,603
Other Income (Expense):
Interest income....................................... 12,499 3,233 15,732
Interest expense...................................... (3,133 ) (28,873 (1) 2,008 (c) (29,998 )
Other, net............................................ 144 144
------- ---------- ------------ -----------
Total other income (expense)........................ 9,510 (25,640) 2,008 (14,122 )
Equity in Earnings of Associated Companies.............. 2,530 2,530
Provision for Income Taxes.............................. (576 ) (1,935 (d) (2,511 )
------- ---------- ------------ -----------
Net Income............................................ $ 45,722 $263 $4,515 $50,500 (2)
------- ---------- ------------ -----------
------- ---------- ------------ -----------
</TABLE>
The accompanying notes are an integral part of these pro forma consolidated
statements of operations.
32
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
(1) Other revenues for SINA includes $8,744 related to payments under the
Showboat Lease and interest expense for SINA includes $8,804 related to the
Showboat Notes.
(2) Pro forma net income does not include an after-tax loss of $2,948 on the
extinguishment of debt resulting from the Tender Offer.
(3) Pro Forma Adjustments:
The Pro Forma Consolidated Statements of Operations have been prepared to
give effect to the Merger in a business combination to be accounted for as a
purchase for accounting purposes. Based upon the respective per share values
of Ordinary Shares and common stock of SINA as of August 16, 1996, the last
full trading day prior to the announcement of the Merger, each share
outstanding of common stock of SINA has been or will be exchanged for 0.4324
Ordinary Shares and each share of Class B stock of SINA outstanding has been
or will be converted into 0.1928 Ordinary Shares. In addition, the Pro Forma
Consolidated Statements of Operations give effect to the issuance of the
Outstanding Notes and the use of proceeds to retire the Mortgage Notes.
A description of the pro forma adjustments is as follows:
(a) To exclude approximately $2,200 in fees related to a license agreement
with the Griffin Group, Inc., which was terminated as a result of the
Merger.
(b) To adjust the amortization and depreciation expense resulting from the
allocation of the purchase price to goodwill and hotels and other
buildings. Sun International amortizes goodwill and depreciates hotels
and other buildings over a period of 40 years and furniture and equipment
over 3 to 7 years.
(c) To adjust the interest expense, including the accretion of the debt
discount on the Mortgage Notes and Showboat Notes, for the year as a
result of the issuance of the Outstanding Notes and the consummation of
the Tender Offer assuming an interest rate of 9% on the Outstanding
Notes.
(d) To record a provision for income taxes based upon the pro forma income
before income taxes.
33
<PAGE>
SELECTED FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)
The following table summarizes selected consolidated financial and operating
data of the Company for the years ended December 31, 1995 and 1996 and certain
balance sheet data as of December 31, 1996. The data is presented on an actual
basis for the years ended December 31, 1995 and 1996 and as of December 31, 1996
and on a pro forma basis for the year ended and as of December 31, 1996 to give
effect to the Merger, as adjusted to give effect to the issuance of the
Outstanding Notes, and the consummation of the Tender Offer. The summary
information provided on an actual basis is derived from the Consolidated
Financial Statements that have been audited by Arthur Andersen LLP, independent
public accountants, and are included elsewhere in this Prospectus. The pro forma
financial data, as adjusted for the issuance of the Outstanding Notes, is
provided for informational purposes only, is unaudited and is not necessarily
indicative of future results or what the operating results would have been had
the transactions actually been consummated as of the beginning of the periods
indicated. The following Selected Financial and Operating Data should be read in
conjunction with the Consolidated Financial Statements and the notes thereto and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER YEAR ENDED
31, DECEMBER 31, 1996
---------------------- PRO FORMA,
1995 1996 AS ADJUSTED
---------- ---------- -----------------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Room revenues......................................... $50,412 $67,243 $83,253
Food and beverage revenues............................ 50,806 60,372 88,239
Gaming revenues....................................... 79,605 77,342 336,014
Tour operation revenues............................... 16,338 15,048 15,048
Management fee revenues............................... 4,858 8,896 8,896
Other revenues........................................ 21,195 23,317 42,980
Promotional allowances................................ (9,274) (12,102) (42,369)
---------- ---------- --------
Total net revenues.................................. 213,940 240,116 532,061
Operating income........................................ 22,990 34,258 64,603
Equity earnings from affiliates......................... 2,313 2,530 2,530
Net income(1)........................................... 18,359 45,722 50,500
Net income per Ordinary Share before accretion(1)(9).... $0.87 $1.58 $1.54
Weighted average number of Ordinary Shares.............. 21,194 28,915 32,805
Ratio of earnings to fixed charges(2)................... 2.9x 13.5x 2.6x
OTHER FINANCIAL DATA:
EBITDA(3)............................................... 33,226 45,700 77,445 (4)
Depreciation and amortization........................... 10,236 11,442 21,586
Capital expenditures:
Maintenance........................................... 6,061 11,353 19,502
Expansion............................................. 40,739 68,123 79,649
---------- ---------- --------
Total............................................... 46,800 79,476 99,151
Ratio of EBITDA to interest expense(3)(5)............... -- -- 3.7x
Ratio of long-term debt to EBITDA(3)(6)................. -- -- 2.6x
ATLANTIS OPERATING DATA:
Average number of rooms................................. 1,147 1,147
Average occupancy....................................... 85% 87%
Average daily room rate................................. $122 $158
Average number of slot machines......................... 811 813
Win per slot machine per day............................ $115 $117
Average number of table games........................... 68 64
Win per table game per day.............................. $1,851 $1,826
ATLANTIC CITY OPERATING DATA:(7)
Average number of slot machines......................... 2,218 2,350
Win per slot machine per day............................ $236 $214
Average number of table games........................... 81 81
Win per table game per day.............................. $2,495 $2,413
CONNECTICUT OPERATING DATA:(8)
Average number of slot machines......................... -- 2,575
Win per slot machine per day............................ -- $317
Average number of table games........................... -- 180
Win per table game per day.............................. -- $2,251
</TABLE>
34
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<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
------------------------
ACTUAL AS ADJUSTED
----------- -----------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents, including restricted cash.................................. $122,864 $156,029
Total assets.......................................................................... 1,122,619 1,160,863
Total debt(10)........................................................................ 263,365 306,522
Shareholders' equity.................................................................. 702,989 700,041
</TABLE>
- -------------
(1) Pro forma net income and pro forma net income per share do not reflect an
after-tax loss of $2,948 and $0.09 per share, respectively, on the
extinguishment of debt resulting from the Tender Offer.
(2) For the purposes of computing the ratio of earnings to fixed charges, (i)
earnings represent income (loss) from continuing operations before income
taxes plus fixed charges exclusive of capitalized interest, and (ii) fixed
charges consists of interest, whether expensed or capitalized, and
amortization of deferred financing fees. There were no preference shares
outstanding for any period. Accordingly, the ratio of earnings to combined
fixed charges and preferred stock dividends is identical to the ratio of
earnings to fixed charges. In addition, in the 1996 pro forma calculation of
the ratio of earnings to fixed charges, earnings include $8,744 related to
payments under the Showboat Lease and interest expense includes $8,804
related to the Showboat Notes. See footnote 4. Had this ratio been
calculated excluding these amounts, this ratio would have been 2.9x.
(3) EBITDA represents income from operations before interest, taxes,
depreciation and amortization. EBITDA should not be construed as an
alternative to operating income or any other measure of performance
determined in accordance with U.S. GAAP or as an indicator of the Company's
operating performance, liquidity or cash flows generated by operating,
investing and financing activities. The Company has included the information
concerning EBITDA as management understands it is used by certain investors
as one measure of cash flow. This line item enables comparison of the
Company's performance with the performance of other companies that report
EBITDA.
(4) SINA owns land upon which the Showboat Casino Hotel in Atlantic City is
situated. This land is leased to ACS pursuant to the Showboat Lease. The
lease payment was $8,744 for 1996. SINA has outstanding $105,333 of the
Showboat Notes, which are non-recourse and secured by a mortage and
collateral assignment of the Showboat Lease. Interest on the non-recourse
Showboat Notes consists of a pass-through of the lease payments under the
Showboat Lease. EBITDA on a pro-forma basis for the year ended December 31,
1996 excludes $8,744 in other revenues related to payments under the
Showboat Lease.
(5) In calculating this ratio $8,744 in other revenues related to payments under
the Showboat Lease is excluded from EBITDA and $8,804 of interest related to
the Showboat Notes is excluded from interest expense.
(6) In calculating this ratio $105,333 of long-term debt related to the Showboat
Notes is excluded, and $8,744 in other revenues related to payments under
the Showboat Lease is excluded from EBITDA.
(7) The Company did not own or operate the Atlantic City properties until
December 1996.
(8) The Mohegan Sun Casino commenced operations in October 1996.
(9) Prior to the Equity Offering, the holders of the Company's Series A Ordinary
Shares had a put right requiring the Company to purchase any such shares
tendered at a price of $17.50 per share (subject to certain adjustments).
Prior to the termination of such put right concurrently with the
consummation of the Equity Offering, the Company accreted the difference
between the original issue price and the put right price by charging amounts
to equity based on the effective interest method.
(10) Total debt includes $105,333 representing the non-recourse Showboat Notes.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THE FOLLOWING DISCUSSION OF THE FINANCIAL CONDITION AND RESULTS OF
OPERATIONS OF THE COMPANY SHOULD BE READ IN CONJUNCTION WITH THE INFORMATION
CONTAINED IN THE CONSOLIDATED FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO,
AND THE OTHER FINANCIAL INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS. THE
FOLLOWING DISCUSSION INCLUDES FORWARD LOOKING STATEMENTS THAT INVOLVE CERTAIN
RISKS AND UNCERTAINTIES. SEE "RISK FACTORS".
RESULTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995
The Company recorded net income of $45.7 million in 1996 compared to $18.4
million in 1995. Earnings per share increased to $1.58 in 1996 as compared to
$0.87 for 1995, an increase of 82%. Net revenues of $240.1 million in 1996 were
12% above the $213.9 million of net revenues recorded in 1995. Operating income
increased to $34.3 million in 1996 from $23.0 million in 1995, an increase of
49%. The primary contributor to this growth was strong results at the Company's
Paradise Island operations.
The Company's Paradise Island operations continued to perform very well,
generating operating income of $32.7 million in 1996, a 38% increase over 1995.
The Company's Atlantis property achieved an average occupancy of 87% for the
year, compared to 85% in 1995, and the average daily room rate grew by 29% to
$158. While the room and food and beverage operations achieved solid growth,
gaming revenues declined by a modest 3% for the year to $77.5 million, mainly as
a result of a lower table hold of 13.6% for the year compared to 15.7% in 1995.
Table hold during the first quarter of 1996 was unusually low.
In September 1996, the Company acquired the 562-room Pirate's Cove Hotel,
which operated at approximately break-even for the period following its
acquisition. The Company intends to implement the approximately $20 million
Pirate's Cove Renovation, which is expected to be completed during the first
half of 1999, to position this property as Atlantis' moderately priced unit. In
addition, the Company intends to use a portion of this property to house many of
the construction staff during the Paradise Island Expansion.
The Mohegan Sun Casino in Montville, Connecticut, which was developed for
the Mohegan Tribe by TCA, a partnership in which Sun International owns a 50%
interest, opened in October 1996. From its opening through December 31, 1996,
the casino generated net revenues of $97.0 million, including $90.9 million of
gaming revenues. The average daily win per slot for the period was $317, which
resulted in total slot revenues of $64.7 million for the period. Table revenues
were $26.2 million, although the hold percentage of 14.5% was low given the
slower rate of play due to the initial level of inexperience among dealers. The
casino steadily improved its hold percentages and is now achieving a more
normalized hold percentage. From its opening on October 12, 1996, through
December 31, 1996, the operation generated earnings before bingo operations
(which are not managed by TCA) and interest, taxes, depreciation and
amortization of $22.8 million.
TCA earns management fees based on 30% to 40% of the Mohegan Sun Casino's
earnings after depreciation and interest. The percentage of profits distributed
to the partnership starts at 40% and declines to 30% based on predetermined
profitability thresholds. Prior to distributing its profits equally to its
partners, TCA contributes $1.2 million per annum to the casino's capital reserve
account, funds its own operating costs and then makes certain priority payments
to its partners. From the Mohegan Sun Casino's opening through December 31,
1996, the Company earned fees of $3.4 million.
The Company has a 22.8% interest in Sun Indian Ocean, a Mauritius company
which owns five beach resort hotels in Mauritius and one in the Comoros. The
Company also has long-term management contracts with these properties which
expire in 2003. In 1996, the Company earned management fees of $4.5 million, as
compared to $4.0 million in 1995. Equity earnings for both years were $1.5
million.
In 1996, the Indian Ocean resorts generated revenues of $74.9 million as
compared to $63.8 million in 1995, and had net income in 1996 of $6.4 million as
compared to $6.7 million in 1995. The reduction in 1996's net income compared to
that of 1995 included the effects of an approximately 11% reduction in the
dollar value of the Mauritian currency. Two new resorts were opened in 1996 on
the island of Mauritius, the 333-room Le Coco Beach and the 238-room Sugar
Beach, bringing the total rooms owned by Sun Indian Ocean to 1,381. These two
new properties, which were developed by the Company and are targeted at the
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<PAGE>
moderate priced segments of the market, provide a more complete product offering
in the Indian Ocean. On a comparable basis, the four established properties
achieved an average occupancy of 74% in 1996, as compared to 72% in 1995, and
average room rates in 1996 declined to $153 from $170 during 1995, primarily due
to the decrease in the dollar value of the Mauritian currency. Including the
effect of opening the two new properties, one of which opened in March and the
other in October, the properties achieved an average occupancy of 74% and
average room rate of $132.
The Company has an effective 25% interest in Sun France which owns four
casinos in France. The Company provides various services to these casinos under
a technical services agreement, which expires in October 1997. In 1996, the
French casinos generated total revenues of $107.7 million, as compared to $103.2
million in 1995, and net income of $4.3 million as compared to $3.0 million in
1995. In 1996, the Company earned technical assistance fees of $0.8 million, as
compared to $0.9 million in 1995 and equity earnings of $1.1 million for 1996,
as compared to $0.8 million for 1995.
OTHER FACTORS AFFECTING EARNINGS
Corporate expenses were $10.9 million for 1996, or 4.5% of revenues,
compared to $9.5 million in the prior year, or 4.4% of revenues. The Company
received $2.6 million of income, which is a fixed contribution towards its
corporate expenses payable pursuant to an agreement with one of its
shareholders, as compared to $2.4 million in 1995. This fixed contribution
increases annually at 3%.
During 1996, the Company earned project development fees of $226,000, as
compared to $1.1 million in 1995, for services rendered in connection with the
construction of Le Coco Beach and Sugar Beach.
The Company received approximately $744,000 in 1996 as compared to $186,000
in 1995, in relation to the sale of its interest in a Greek consortium which had
bid on a casino license in Athens, Greece. The Company has now received payment
in full for its interest.
The Company recorded interest income of $6.2 million in 1996 as compared to
$1.5 million in 1995 on subordinated notes that it purchased from the Mohegan
Gaming Authority. The subordinated notes currently pay interest through the
issue of additional notes. As of December 31, 1996, the Company owns a total of
$66.0 million of these notes of which $23.6 million bear interest at 15% and the
balance bear interest at prime plus 1%.
The Company had total interest income of $12.5 million in 1996 as compared
to $2.4 million in 1995. Interest expense decreased to $3.1 million in 1996 from
$9.7 million in 1995. The reduction in interest expense and the increase in
interest income resulted from repayment of all outstanding bank debt and the
amount due to affiliates in March 1996 with the proceeds from a public offering
of Ordinary Shares and the investment of the balance of these proceeds.
The Company completed the acquisition of SINA on December 16, 1996. The
results of operations excludes the operations of SINA for the period following
the acquisition as such results were not material to the Company's operations.
YEAR ENDED DECEMBER 31, 1994
The year ended December 31, 1994 is not comparable to 1995 because the
Company acquired the Paradise Island operations effective May 3, 1994 and prior
to such time the Company's only operations included its interest in Sun Indian
Ocean and in the Sun France casinos. The Company recorded a net loss of $16.5
million in 1994 on net revenues of $76.7 million.
The Paradise Island operations generated net revenues of $69.7 million and
operating losses of $21.4 million for the eight month period ending December 31,
1994, which excludes the traditionally strong winter period from New Year's to
Easter. Following the acquisition of the Paradise Island operations the Company
commenced an approximately $140 million redevelopment program and consequently,
the property's available room inventory was substantially reduced until the
completion of the construction in late December. Room rates were heavily
discounted during this period, and public areas and restaurants were closed
periodically. As a result, the redevelopment program had a significant negative
impact on the operating results of the Paradise Island operations.
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<PAGE>
For the twelve months ended December 31, 1994, the Indian Ocean properties
recorded revenues of $50.0 million and net income of $6.2 million. The resorts
achieved an average occupancy and room rate of 73% and $173 on an average
available room base of 625 rooms. The Company earned management fees of $3.4
million and equity earnings of $950,000 from its Indian Ocean operations.
In 1994, the French casinos generated total revenues and net income of $76.4
million and $1.9 million, respectively. The Company earned technical assistance
fees and equity earnings of $0.8 million and $0.5 million, from its French
operations.
Corporate expenses were $5.1 million in 1994. In 1994, the Company received
a $2.4 million contribution toward such costs pursuant to an agreement with one
of its shareholders. The Company also received project fees of $216,000 for
services rendered in connection with the renovation of certain of its Indian
Ocean properties.
In 1994, the Company realized a gain of $1.9 million on the sale of 16.7% of
its interest in Sun France which reduced its effective holding in such company
to 25%.
LIQUIDITY, CAPITAL RESOURCES AND CAPITAL SPENDING
At December 31, 1996, the Company had unrestricted cash and cash equivalents
of $97.2 million, including $29.3 million at SINA. During the year, the Company
generated $39.1 million in operating cash flow, excluding the SINA operations.
In anticipation of the Paradise Island Expansion, the Company consummated a
public offering of a total of 8,049,737 of its Ordinary Shares at a price of $35
per share on March 1, 1996. Of the approximately $265 million of net proceeds to
the Company from the offering, approximately $120 million were used to repay all
outstanding bank debt and $8.5 million were used to repay amounts owed to Sun
International Investments Limited, the Company's 49% shareholder.
Capital expenditures totaled $79.5 million in 1996, including approximately
$38 million for the purchase of the Pirate's Cove Hotel on Paradise Island,
$18.2 million for the Paradise Island Expansion and $10.3 million for a
corporate aircraft. In comparison, capital expenditures in 1995 of $46.8 million
include approximately $40.7 million carried over from the initial $140 million
redevelopment program at Paradise Island, which was substantially completed by
December 1994.
Management expects future capital expenditures to increase significantly
with the Paradise Island Expansion, including the development of a new deluxe
1,200 room hotel, casino, and marine attractions, which will expand the
ocean-themed environment of Atlantis. This development is anticipated to cost
approximately $450 million and should be completed by late 1998. The Company
expects to enhance the Resorts Casino Hotel by way of the Atlantic City
Renovation, which will include the construction of additional parking and a
renovation of approximately 500 hotel rooms and various improvements to the
public areas. Since November 1996, the Company has acquired property in Atlantic
City at a cost of $12 million (including $7.3 million expended in January 1997).
The Company intends to continue to acquire land in Atlantic City for use in
connection with the Atlantic City Expansion.
The Company acquired $42.0 million of subordinated Secured Completion
Guarantee Notes (as defined herein) from the Mohegan Gaming Authority during
1996 pursuant to its obligations under a $50 million completion guarantee, which
bear interest at prime plus one percent. As part of the initial funding of the
Mohegan Gaming Authority and concurrent with the offering of $175 million of
Mohegan Senior Notes by the Mohegan Gaming Authority in September 1995, the
Company acquired $38.3 million of Mohegan Subordinated Notes (as defined herein)
from the Mohegan Gaming Authority, which bear interest at 15%. Payment in cash
of interest on the Mohegan Subordinated Notes is deferred until $87.5 million in
principal of the Mohegan Senior Notes have been tendered for and the Mohegan
Gaming Authority achieves a fixed charge coverage ratio of 2.5x over the
previous four fiscal quarters.
On November 8, 1996, the Company sold 50% of its Mohegan Subordinated Notes
to Waterford Gaming, its 50% partner in TCA, for $22.5 million. As of December
31, 1996, the Company held $23.6 million of Mohegan Subordinated Notes and $42.4
million of Secured Completion Guarantee Notes. In January 1997 the Company
funded the balance of $8.0 million under its completion guarantee obligations.
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Pursuant to the Existing Revolving Credit Facility, certain banks led by The
Bank of Nova Scotia and The Royal Bank of Scotland have committed to provide
revolving loans of up to $250 million, which are intended to be used primarily
to fund the Paradise Island Expansion. The Company is currently engaged in
discussions with The Bank of Nova Scotia and Societe Generale USA to increase
the size of the Existing Revolving Credit Facility to $375 million and make
additional amendments thereto. These amendments are expected to include lower
interest rates and provide the Company with more flexibility than the Existing
Revolving Credit Facility.
Management believes that available cash on hand of approximately $97 million
at December 31, 1996 combined with funds generated from operations and funds
available under the Existing Revolving Credit Facility and expected to be
available under the Existing Revolving Credit Facility, as amended, will be
sufficient to finance its planned operating and investing activities.
39
<PAGE>
THE EXCHANGE OFFER
TERMS OF THE EXCHANGE OFFER
Promptly after the Registration Statement of which this Prospectus
constitutes a part has been declared
effective, the Issuers will offer the Exchange Notes in exchange for surrender
of the Outstanding Notes. The Issuers will keep the Exchange Offer open for not
less than 20 business days (or longer if required by applicable law) after the
date on which notice of the Exchange Offer is mailed to the holders of the
Outstanding Notes. For each Outstanding Note validly tendered to the Issuers
pursuant to the Exchange Offer and not withdrawn by the holder thereof, the
holder of such Outstanding Note will receive an Exchange Note having a principal
amount equal to the principal amount of such surrendered Outstanding Note.
Interest on each Exchange Note will accrue from the last interest payment date
on which interest was paid on the Outstanding Note surrendered in exchange
therefor or, if no interest has been paid on such Outstanding Note, from the
date of the original issue of the Outstanding Notes. The Exchange Notes evidence
the same debt as the Outstanding Notes and are issued under and are entitled to
the same benefits under the Indenture as the Outstanding Notes. In addition, the
Exchange Notes and the Outstanding Notes are treated as one series of securities
under the Indenture.
In the event that (a) neither the Registration Statement of which this
Prospectus is a part nor a Shelf Registration (as defined in the Registration
Rights Agreement) with respect to the Outstanding Notes is filed on or prior to
the 45th day after the date of original issue of the Outstanding Notes, (b)
neither of such registration statements is declared effective by the Commission
on or prior to the 165th day after the Closing Date (the "Effectiveness Target
Date"), (c) the Registration Statement becomes effective, and the Issuers fail
to consummate the Exchange Offer within 45 days of the earlier of the
effectiveness of the Registration Statement or the Effectiveness Target Date, or
(d) the Shelf Registration with respect to the Outstanding Notes is declared
effective but thereafter ceases to be effective or usable in connection with
resales of Outstanding Notes during the period specified in the Registration
Rights Agreement (each such event referred to in clauses (a) through (d) above a
"Registration Default"), then the Issuers will pay to each Holder of the
Outstanding Notes, accruing from the date of the first such Registration Default
(or if such Registration Default has been cured, from the date of the next
Registration Default), liquidated damages ("Liquidated Damages") in an amount
equal to one-half of one percent (0.5%) per annum of the principal amount of the
Outstanding Notes held by such Holder during the first 90-day period immediately
following the occurrence of such Registration Default, increasing by an
additional one-half of one percent (0.5%) per annum of the principal amount of
such Notes during each subsequent 90-day period, up to a maximum amount of
Liquidated Damages equal to two percent (2.0%) per annum of the principal amount
of such Outstanding Notes, which provision for Liquidated Damages will continue
until such Registration Default has been cured. Liquidated Damages accrued as of
any interest payment date will be payable on such date.
PERIOD FOR TENDERING OUTSTANDING NOTES
Upon the terms and subject to the conditions set forth in this Prospectus
and in the accompanying Letter of Transmittal (which together constitute the
Exchange Offer), the Issuers will accept for exchange Outstanding Notes which
are properly tendered on or prior to the Expiration Date and not withdrawn as
permitted below. As used herein, the term "Expiration Date" means 5:00 p.m., New
York City time, on , , 1997; PROVIDED, HOWEVER, that if the
Issuers, in their sole discretion, have extended the period of time for which
the Exchange Offer is open, the term "Expiration Date" means the latest time and
date to which the Exchange Offer is extended.
As of the date of this Prospectus, $200,000,000 aggregate principal amount
of Outstanding Notes is outstanding. This Prospectus, together with the Letter
of Transmittal, is first being sent on or about , 1997, to all Holders
of Outstanding Notes known to the Issuers. The Issuers' obligation to accept
Outstanding Notes for exchange pursuant to the Exchange Offer is subject to
certain conditions set forth under "--Certain Conditions to the Exchange Offer"
below.
The Issuers expressly reserve the right, at any time or from time to time,
to extend the period of time during which the Exchange Offer is open, and
thereby delay acceptance for exchange of any Outstanding Notes, by giving oral
or written notice of such extension to the Holders thereof as described below.
During any such extension, all Outstanding Notes previously tendered will remain
subject to the Exchange Offer and
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<PAGE>
may be accepted for exchange by the Issuers. Any Outstanding Notes not accepted
for exchange for any reason will be returned without expense to the tendering
Holder thereof as promptly as practicable after the expiration or termination of
the Exchange Offer.
Outstanding Notes tendered in the Exchange Offer must be in denominations of
principal amount of $1,000 or any integral multiple thereof.
The Issuers expressly reserve the right to amend or terminate the Exchange
Offer, and not to accept for exchange any Outstanding Notes not theretofore
accepted for exchange, upon the occurrence of any of the conditions of the
Exchange Offer specified below under "--Certain Conditions to the Exchange
Offer". The Issuers will give oral or written notice of any extension,
amendment, non-acceptance or termination to the Holders of the Outstanding Notes
as promptly as practicable, such notice in the case of any extension to be
issued by means of a press release or other public announcement no later than
9:00 a.m., New York City time, on the next business day after the previously
scheduled Expiration Date.
PROCEDURES FOR TENDERING OUTSTANDING NOTES
The tender to the Issuers of Outstanding Notes by a Holder thereof as set
forth below and the acceptance thereof by the Issuers will constitute a binding
agreement between the tendering Holder and the Issuers upon the terms and
subject to the conditions set forth in this Prospectus and in the accompanying
Letter of Transmittal. Except as set forth below, a Holder who wishes to tender
Outstanding Notes for exchange pursuant to the Exchange Offer must transmit a
properly completed and duly executed Letter of Transmittal, including all other
documents required by such Letter of Transmittal, to The Bank of New York (the
Exchange Agent) at one of the addressees set forth below under "--Exchange
Agent" on or prior to the Expiration Date. In addition, either (i) certificates
for such Outstanding Notes must be received by the Exchange Agent along with the
Letter of Transmittal, or (ii) a timely confirmation of a book-entry transfer (a
"Book-Entry Confirmation") of such Outstanding Notes into the Exchange Agent's
account at The Depository Trust Company (the "Book-Entry Transfer Facility")
pursuant to the procedure for book-entry transfer described below, must be
received by the Exchange Agent prior to the Expiration Date, or (iii) the Holder
must comply with the guaranteed delivery procedures described below. THE METHOD
OF DELIVERY OF OUTSTANDING NOTES, LETTERS OF TRANSMITTAL AND ALL OTHER REQUIRED
DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDERS. IF SUCH DELIVERY IS BY
MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY INSURED, WITH RETURN
RECEIPT REQUESTED, BE USED. IN ALL CASES SUFFICIENT TIME SHOULD BE ALLOWED TO
ASSURE TIMELY DELIVERY. NO LETTERS OF TRANSMITTAL OR OUTSTANDING NOTES SHOULD BE
SENT TO THE ISSUERS.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the case
may be, must be guaranteed unless the Outstanding Notes surrendered for exchange
pursuant thereto are tendered (i) by a registered Holder of the Outstanding
Notes who has not completed the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for the
account of an Eligible Institution (as defined below). In the event that
signatures on a Letter of Transmittal or a notice of withdrawal, as the case may
be, are required to be guaranteed, such guarantees must be made by a firm which
is a member of a registered national securities exchange or a member of the
National Association of Securities Dealers, Inc. or by a commercial bank or
trust company having an office or correspondent in the United States
(collectively, "Eligible Institutions"). If Outstanding Notes are registered in
the name of a person other than a signer of the Letter of Transmittal, the
Outstanding Notes surrendered for exchange must be endorsed by, or be
accompanied by a written instrument or instruments of transfer or exchange, in
satisfactory form as determined by the Issuers in their sole discretion, duly
executed by the registered Holder with the signature thereon guaranteed by an
Eligible Institution.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of Outstanding Notes tendered for exchange will be
determined by the Issuers in their sole discretion, which determination shall be
final and binding. The Issuers reserve the absolute right to reject any and all
tenders of any particular Outstanding Notes not properly tendered or to not
accept any particular Outstanding Notes which acceptance might, in the judgment
of the Issuers or their counsel, be unlawful. The Issuers also reserve the
absolute right to waive any defects or irregularities or conditions of the
Exchange Offer as to any particular
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<PAGE>
Outstanding Notes either before or after the Expiration Date. The interpretation
of the terms and conditions of the Exchange Offer as to any particular
Outstanding Notes either before or after the Expiration Date (including the
Letter of Transmittal and the instructions thereto) by the Issuers shall be
final and binding on all parties. Unless waived, any defects or irregularities
in connection with tenders of Outstanding Notes for exchange must be cured
within such reasonable period of time as the Issuers shall determine. Neither
the Issuers, the Exchange Agent nor any other person shall be under any duty to
give notification of any defect or irregularity with respect to any tender of
Outstanding Notes for exchange, nor shall any of them incur any liability for
failure to give such notification.
If the Letter of Transmittal is signed by a person or persons other than the
registered Holder or Holders of Outstanding Notes, such Outstanding Notes must
be endorsed or accompanied by appropriate powers of attorney, in either case
signed exactly as the name or names of the registered Holder or Holders that
appear on the Outstanding Notes.
If the Letter of Transmittal or any Outstanding Notes or powers of attorney
are signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and, unless waived by
the Issuers, proper evidence satisfactory to the Issuers of their authority to
so act must be submitted.
In all cases, issuance of Exchange Notes for Outstanding Notes that are
accepted for exchange pursuant to the Exchange Offer will be made only after
timely receipt by the Exchange Agent of certificates for such Outstanding Notes
or a timely Book-Entry Confirmation of such Outstanding Notes in the Exchange
Agent's account at the Book-Entry Transfer Facility, a properly completed and
duly executed Letter of Transmittal and all other required documents. If any
tendered Outstanding Notes are not accepted for any reason set forth in the
terms and conditions of the Exchange Offer or if Outstanding Notes are submitted
for a greater principal amount than the Holder desires to exchange, such
unaccepted or non-exchanged Outstanding Notes will be returned without expense
to the tendering Holder thereof (or, in the case of Outstanding Notes tendered
by book-entry transfer into the Exchange Agent's account at the Book-Entry
Transfer Facility pursuant to the book-entry procedures described below, such
non-exchanged Outstanding Notes will be credited to an account maintained with
such Book-Entry Transfer Facility) as promptly as practicable after the
expiration or termination of the Exchange Offer.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect
to the Outstanding Notes at the Book-Entry Transfer Facility for purposes of the
Exchange Offer within two business days after the date of this Prospectus, and
any financial institution that is a participant in the Book-Entry Transfer
Facility's systems may make book-entry delivery of Outstanding Notes by causing
the Book-Entry Transfer Facility to transfer such Outstanding Notes into the
Exchange Agent's account at the Book-Entry Transfer Facility in accordance with
such Book-Entry Transfer Facility's procedures for transfer. However, although
delivery of Outstanding Notes may be effected through book-entry transfer at the
Book-Entry Transfer Facility, the Letter of Transmittal (or a copy thereof),
with any required signature guarantees and any other required documents, must,
in any case, be transmitted to and received by the Exchange Agent at one of the
addressees set forth below under "--Exchange Agent" on or prior to the
Expiration Date or the guaranteed delivery procedures described below must be
complied with.
GUARANTEED DELIVERY PROCEDURES
If a registered Holder of the Outstanding Notes desires to tender such
Outstanding Notes and the Outstanding Notes are not immediately available, or
time will not permit such Holder's Outstanding Notes or other required documents
to reach the Exchange Agent before the Expiration Date, or the procedure for
book-entry transfer cannot be completed on a timely basis, a tender may be
effected if (i) the tender is made through an Eligible Institution, (ii) prior
to the Expiration Date, the Exchange Agent receives from such Eligible
Institution a properly completed and duly executed Letter of Transmittal (or a a
copy thereof) and Notice of Guaranteed Delivery, substantially in the form
provided by the Issuers (by telegram, telex, fax transmission, or mail or hand
delivery), setting forth the name and address of the Holder of Outstanding Notes
and the amount of Outstanding Notes tendered, stating that the tender is being
made thereby and guaranteeing that within three NYSE trading days after the date
of execution of the Notice of Guaranteed Delivery, the certificates for all
physically tendered Outstanding Notes, in proper form for transfer, or a
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Book-Entry Confirmation, as the case may be, and any other documents required by
the Letter of Transmittal will be deposited by the Eligible Institution with the
Exchange Agent, and (iii) the certificates for all physically tendered
Outstanding Notes, in proper form for transfer, or a Book-Entry Confirmation, as
the case may be, and all other documents required by the Letter of Transmittal,
are received by the Exchange Agent within three NYSE trading days after the date
of execution of the Notice of Guaranteed Delivery.
WITHDRAWAL RIGHTS
Tenders of Outstanding Notes may be withdrawn at any time prior to the
Expiration Date.
For a withdrawal to be effective, a written notice of withdrawal must be
received by the Exchange Agent at one of the addressees set forth below under
"--Exchange Agent". Any such notice of withdrawal must specify the name of the
person having tendered the Outstanding Notes to be withdrawn, identify the
Outstanding Notes to be withdrawn (including the principal amount of such
Outstanding Notes) and (where certificates for Outstanding Notes have been
transmitted) specify the name in which such Outstanding Notes are registered, if
different from that of the withdrawing Holder. If certificates for Outstanding
Notes have been delivered or otherwise identified to the Exchange Agent, then,
prior to the release of such certificates the withdrawing Holder must also
submit the serial numbers of the particular certificates to be withdrawn and a
signed notice of withdrawal with signatures guaranteed by an Eligible
Institution unless such Holder is an Eligible Institution. If Outstanding Notes
have been tendered pursuant to the procedure for book-entry transfer described
above, any notice of withdrawal must specify the name and number of the account
at the Book-Entry Transfer Facility to be credited with the withdrawn
Outstanding Notes and otherwise comply with the procedures of such facility. All
questions as to the validity, form and eligibility (including time of receipt)
of such notices will be determined by the Issuers, whose determination shall be
final and binding on all parties. Any Outstanding Notes so withdrawn will be
deemed not to have been validly tendered for exchange for purposes of the
Exchange Offer. Any Outstanding Notes which have been tendered for exchange but
which are not exchanged for any reason will be returned to the Holder thereof
without cost to such Holder (or, in the case of Outstanding Notes tendered by
book-entry transfer into the Exchange Agent's account at the Book-Entry Transfer
Facility pursuant to the book-entry transfer procedures described above, such
Outstanding Notes will be credited to an account maintained with such Book-Entry
Transfer Facility for the Outstanding Notes) as soon as practicable after
withdrawal, rejection of tender or termination of the Exchange Offer. Properly
withdrawn Outstanding Notes may be retendered by following one of the procedures
described under "--Procedures for Tendering Outstanding Notes" above at any time
on or prior to the Expiration Date.
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provision of the Exchange Offer, the Issuers shall
not be required to accept for exchange, or to issue Exchange Notes in exchange
for, any Outstanding Notes and may terminate or amend the Exchange Offer, if at
any time before the acceptance of such Outstanding Notes for exchange or the
exchange of the Exchange Notes for such Outstanding Notes, any of the following
events shall occur:
(a) such acceptance or issuance would violate applicable law or any
applicable interpretation of the staff of the Commission;
(b) there shall be threatened, instituted or pending any action or
proceeding by or before any governmental agency with respect to the
Exchange Offer which, in the Issuers' judgment, would reasonably be
expected to impair the ability of the Issuers to proceed with the
Exchange Offer;
(c) there shall have been adopted or enacted any statute, law, rule or
regulation which, in the Issuers' judgment, would reasonably be expected
to impair the ability of the Issuers to proceed with the Exchange Offer;
(d) there shall have been declared by U.S. federal, New York State or
Bahamian authorities a banking moratorium which, in the Issuers'
judgment, would reasonably be expected to impair the ability of the
Issuers to proceed with the Exchange Offer; or
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(e) there shall have been declared a suspension by order of the Commission
or any other governmental authority of trading generally on the NYSE, the
AMEX or in the NASDAQ National Market which, in the Issuers' judgment,
would reasonably be expected to impair the ability of the Issuers to
proceed with the Exchange Offer.
The foregoing conditions are for the sole benefit of the Issuers and may be
asserted by the Issuers regardless of the circumstances giving rise to any such
condition or may be waived by the Issuers in whole or in part at any time and
from time to time in their sole discretion. The failure by the Issuers at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
In addition, the Issuers will not accept for exchange any Outstanding Notes
tendered, and no Exchange Notes will be issued in exchange for any such
Outstanding Notes, if at such time any stop order shall be threatened or in
effect with respect to the Registration Statement of which this Prospectus
constitutes a part or the qualification of the Indenture under the Trust
Indenture Act of 1939.
EXCHANGE AGENT
The Bank of New York has been appointed as the Exchange Agent for the
Exchange Offer. All executed Letters of Transmittal should be directed to the
Exchange Agent at one of the addressees set forth below. Questions and requests
for assistance, requests for additional copies of the Prospectus or of the
Letter of Transmittal and requests for Notices of Guaranteed Delivery should be
directed to the Exchange Agent, addressed as follows:
<TABLE>
<S> <C>
BY MAIL: BY HAND OR OVERNIGHT COURIER:
The Bank of New York The Bank of New York
101 Barclay Street, 7E 101 Barclay Street
New York, NY 10286 Corporate Trust Services Window
Attention: Reorganization Section, Ground Level
Arwen Gibbons New York, NY 10286
Attention: Reorganization Section,
Arwen Gibbons
Telephone: (212) 815-6333 Fax for Eligible Institutions: (212) 571-3080
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA FAX TRANSMISSION OTHER THAN AS SET FORTH ABOVE
DOES NOT CONSTITUTE A VALID DELIVERY.
FEES AND EXPENSES
The Issuers will not make any payment to brokers, dealers, or others
soliciting acceptances of the Exchange Offer.
The Issuers will pay certain other expenses to be incurred in connection
with the Exchange Offer, including the fees and expenses of the Exchange Agent,
accounting and certain legal fees.
TRANSFER TAXES
Holders who tender their Outstanding Notes for exchange will not be
obligated to pay any transfer taxes in connection therewith, except that Holders
who instruct the Issuers to register Exchange Notes in the name of, or request
that Outstanding Notes not tendered or not accepted in the Exchange Offer be
returned to, a person other than the registered tendering Holder will be
responsible for the payment of any applicable transfer tax thereon.
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of Outstanding Notes who do not exchange their Outstanding Notes for
Exchange Notes pursuant to the Exchange Offer will continue to be subject to the
restrictions on transfer of such Outstanding Notes as set forth in the legend
thereon as a consequence of the issuance of the Outstanding Notes pursuant to
exemptions from, or in transactions not subject to, the registration
requirements of the Securities Act and
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applicable state securities laws. In general, the Outstanding Notes may not be
offered or sold, unless registered under the Securities Act, except pursuant to
an exemption from, or in a transaction not subject to, the Securities Act and
applicable state securities laws. The Issuers do not currently anticipate that
they will register Outstanding Notes under the Securities Act. To the extent
that Outstanding Notes are tendered and accepted in connection with the Exchange
Offer, any trading market for Outstanding Notes not tendered in connection with
the Exchange Offer could be adversely affected. The tender of Outstanding Notes
pursuant to the Exchange Offer may have an adverse effect upon, and increase the
volatility of, the market price of the Outstanding Notes due to a reduction in
liquidity.
Issuance of the Exchange Notes in exchange for the Outstanding Notes
pursuant to the Exchange Offer will be made only after timely receipt by the
Exchange Agent of such Outstanding Notes, a properly completed and duly executed
Letter of Transmittal and all other required documents. Therefore, Holders of
the Outstanding Notes desiring to tender such Outstanding Notes in exchange for
Exchange Notes should allow sufficient time to ensure timely delivery. The
Issuers are under no duty to give notification of defects or irregularities with
respect to tenders of Outstanding Notes for exchange. Outstanding Notes that are
not tendered or that are tendered but not accepted by the Issuers for exchange,
will, following consummation of the Exchange Offer, continue to be subject to
the existing restrictions upon transfer thereof under the Securities Act and,
upon consummation of the Exchange Offer, certain registration rights under the
Registration Rights Agreement will terminate.
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BUSINESS
GENERAL
The Company is an international resort and gaming company incorporated in
The Bahamas which develops and manages premier resort and casino properties. The
Company, through its subsidiaries, currently operates resort hotels and casinos
in The Bahamas, Atlantic City, Connecticut, the Indian Ocean and France. The
Company's largest property is Atlantis, a 1,147-room resort and casino located
on Paradise Island, The Bahamas. Following its acquisition by the Company,
Atlantis was redeveloped into an ocean-themed destination resort through the
$140 million Initial Development Program. Seeking to capitalize on the success
of Atlantis, Sun International recently commenced construction of the
approximately $450 million Paradise Island Expansion. The Paradise Island
Expansion will substantially increase the Company's room base on Paradise Island
with the construction of a new 1,200-room deluxe hotel and casino and the
expansion of Atlantis' ocean-themed adventure environment. As part of its
continued development of Paradise Island, in September 1996 the Company acquired
the 562-room Pirate's Cove Hotel adjacent to Atlantis for approximately $12
million in cash plus the assumption of approximately $22.6 million of
indebtedness. In connection with the Paradise Island Expansion, the Company is
planning the Pirate's Cove Renovation to create a moderately-priced hotel within
the Atlantis complex. The Company expects to complete the Paradise Island
Expansion by late 1998 and the Pirate's Cove Renovation by the first half of
1999, thus creating a 3,000-room resort complex appealing to all market segments
which will include approximately 1,200 deluxe rooms, 1,100 mid-market rooms and
700 moderately-priced rooms.
In December 1996, the Company acquired GGE, the predecessor to SINA. SINA is
a holding company which, through RIH, its indirect wholly owned subsidiary, is
principally engaged in the ownership and operation of the Resorts Casino Hotel
in Atlantic City, which has approximately 660 guest rooms, a 70,000 square foot
casino, an 8,000 square foot simulcast parimutuel betting and poker area and
related facilities, located on the Boardwalk. SINA also owns approximately 7.7
acres in the South Inlet area and other real estate in the Atlantic City area,
most of which is vacant land. During 1997, the Company expects to begin
enhancing the existing Resorts Casino Hotel by way of the Atlantic City
Renovation, which will include the construction of additional parking, the
renovation of approximately 500 of the hotel rooms and various improvements to
the public areas. Thereafter, the Company intends to commence construction of
the Atlantic City Expansion, a significant addition to the existing property,
which will transform the SINA properties into a highly themed resort with
significantly increased room base and casino capacity.
During 1996, the Mohegan Sun Casino was developed for the Mohegan Tribe by
TCA, a partnership in which the Company, through its wholly owned subsidiary,
Sun Cove, owns a 50% interest. The Mohegan Sun Casino has a unique Native
American Theme and consists of approximately 150,000 square feet of gaming space
and features approximately 2,670 slot machines, 180 table games and parking for
7,200 cars.
In total, the Company currently operates 11 hotels containing approximately
3,900 rooms and seven casinos with an aggregate of over 270,000 square feet of
gaming space containing more than 6,300 slot machines and 380 table games. Upon
completion of the Paradise Island Expansion, the Company will operate 12 hotels
containing approximately 5,100 rooms with approximately 300,000 square feet of
gaming space.
THE PROPERTIES AND CURRENT EXPANSION PROJECTS
THE BAHAMAS
Sun International, through its wholly owned Bahamian subsidiary, Sun
Bahamas, owns approximately 570 acres or almost 70% of Paradise Island.
Approximately 220 acres are available for future development of which 30 acres
will be used for the Paradise Island Expansion. Sun International also owns 561
acres of undeveloped land on Andros Island. Paradise Island has extensive
existing infrastructure and is easily accessible from the densely populated
eastern United States. There are regularly scheduled airline flights from south
Florida and New York City to either Paradise Island or neighboring Nassau,
having flight times of approximately 50 minutes and two and one-half hours,
respectively.
Following the acquisition of its Paradise Island operations in May 1994, the
Company embarked upon the Initial Development Program, pursuant to which the
Company reconstructed and refurbished its existing Paradise Island facilities
and created the ocean-themed environment of "Atlantis". Included in the Initial
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Development Program was the refurbishment of all 1,147 guest rooms, the
construction of new specialty food and beverage facilities, an upgrading of the
30,000-square foot Atlantis Casino and the creation of a 14-acre saltwater
marine life habitat. The marine life habitat features the world's largest open
air aquarium, showcasing over 100 species of marine life, waterfalls, lagoons,
adventure walks and a clear tunnel submerged in a predator lagoon through which
visitors can walk and be surrounded by sharks, sea turtles, stingrays and other
marine life.
The Initial Development Program was substantially completed by December
1994, after only seven months of construction during which the casino and
substantial portions of the hotel remained open. In addition, a portion of the
Initial Development Program expanded and improved the infrastructure on Paradise
Island. Results of Atlantis since completion of the Initial Development Program
have exceeded management's expectations. For the year ended December 31, 1995,
Atlantis achieved average occupancy and average daily room rates of 85% and
$122, respectively. The Company improved upon these results in 1996 by realizing
an average occupancy of 87% and an average daily room rate of $158. The Company
believes that these results are the highest the property has achieved during the
last ten years.
In addition to Atlantis, the Company's Paradise Island operations include
the Ocean Club, a luxury resort hotel with 59 guest rooms, which was renovated
as part of the Initial Development Program, Paradise Paradise, a 100-room
beachfront resort hotel catering to value-conscious tourists and the Pirate's
Cove Hotel, a 562-room hotel. In addition, Sun Bahamas owns and operates
convention facilities, shops, restaurants, bars and lounges, tennis courts, the
Paradise Island Golf Course and other resort facilities on Paradise Island. For
the year ended December 31, 1996, the Ocean Club achieved average occupancy and
average daily room rates of 79% and $356, respectively, Paradise Paradise
achieved average occupancy and average daily room rates of 70% and $76,
respectively, and the Pirate's Cove Hotel achieved average occupancy and average
daily room rates of 49% and $68, respectively. Sun Bahamas also owns roads and
other land improvements on Paradise Island, the Paradise Island Airport and a
water and sewage system which serves, at stated charges, substantially all
facilities on Paradise Island, including non-affiliated customers. The water and
sewage systems, which are operated with the approval of the Bahamian Government,
will require some expansion in conjunction with the Paradise Island Expansion.
The Atlantis Casino is at the center of the Atlantis complex. The casino
building, situated between two hotel towers, contains nearly 165,000 square feet
of public space, including the 30,000-square foot gaming area. It also houses
seven restaurants and bars, retail space and Le Cabaret Theater. The Atlantis
Casino contains approximately 830 slot machines and 70 table games.
The further development of Paradise Island is the cornerstone of the
Company's expansion plans, and its approximately 220 acres of undeveloped
property provide the Company with an opportunity to expand Paradise Island into
a master planned and highly themed destination resort centered around
spectacular Bahamian beaches and the wonders of the ocean. The Company recently
commenced construction of the Paradise Island Expansion and expects to complete
the construction by late 1998 at a cost of approximately $450 million. The
Company does not expect the construction of the Paradise Island Expansion to
interfere materially with its operations at Atlantis. The Paradise Island
Expansion will include the construction of a 1,200-room deluxe hotel and new
casino. It is also intended to increase convention and meeting facilities and to
expand the ocean-themed environment of Atlantis with the addition of numerous
marine attractions. Upon completion of the Paradise Island Expansion, guests
will be able to explore an elaborate ocean-themed environment containing
lagoons, waterfalls, adventure rides and exotic marine life exhibits.
Consistent with the Company's strategy of offering accommodations that
appeal to broad market segments within a single master-planned destination
resort, the Company acquired the 562-room Pirate's Cove Hotel on Paradise
Island, located adjacent to Atlantis for approximately $12 million in cash plus
the assumption of approximately $22.6 million of indebtedness. The Company
intends to implement the Pirate's Cove Renovation, which is expected to be
completed during the first half of 1999, in order to position this property as
Atlantis' moderately priced unit. During construction of the Paradise Island
Expansion, the Company intends to use a portion of this property to house many
of the construction staff. Upon successful completion of the Paradise Island
Expansion and the Pirate's Cove Renovation, the Company will operate an
integrated 3,000-room resort complex appealing to all market segments which will
include approximately 1,200 deluxe rooms, 1,100 mid-market rooms and 700
moderately priced rooms. After the completion of the
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Paradise Island Expansion and the Pirate's Cove Renovation, Sun Bahamas will
continue to own approximately 190 acres of undeveloped land on Paradise Island
with extensive beach and golf course frontage. See "Risk Factors -- Risks
Associated with New Projects and Expansion".
In addition to its available cash on hand and cash flow from operations, the
Company intends to use borrowings under the Existing Revolving Credit Facility
to finance the Paradise Island Expansion and the Pirate's Cove Renovation. The
Existing Revolving Credit Facility contains a number of conditions precedent to
funding. See "-- Existing Revolving Credit Facility".
The Company continues to explore additional development opportunities on
Paradise Island. Following the completion of the Paradise Island Expansion and
the Pirate's Cove Renovation, management's growth plan includes the potential
development of additional resort properties on Paradise Island, each appealing
to a distinct target market. For example, management anticipates that additional
expansion opportunities will exist to develop room capacity that caters to
budget-oriented customers at lower price points than those currently offered at
Atlantis. In addition, management believes that similar expansion opportunities
exist in the luxury end of the market with a further build-out of the Ocean
Club. Other potential development projects may include residential villas,
timeshare developments, marinas and golf course communities. Any further
development projects on Paradise Island are expected to be constructed on the
approximately 190 acres of undeveloped land remaining after the Paradise Island
Expansion, which includes extensive beach and golf course frontage, or on
additional tracts of land that may be acquired from time to time.
Sun International Resorts, Inc., a Florida corporation and subsidiary of the
Company, together with its subsidiaries based in Florida, provides general and
administrative support services, marketing services, travel reservations and
wholesale tour services for the Company's Paradise Island operations.
ATLANTIC CITY
The Resorts Casino Hotel in Atlantic City, New Jersey commenced operations
in May 1978 and was the first casino/hotel opened in Atlantic City. This was
accomplished by the conversion of the former Haddon Hall Hotel, a classic hotel
structure originally built in the early 1900's, into a casino/hotel. It is
situated on approximately seven acres of land with approximately 310 feet of
Boardwalk frontage overlooking the Atlantic Ocean. The Resorts Casino Hotel
consists of two hotel towers, the 15-story East Tower and the nine story North
Tower. In addition to the casino facilities described below, the casino/hotel
complex includes approximately 660 guest rooms, the 1,400-seat Superstar
Theater, seven restaurants, one cocktail lounge, a VIP slot and table player
lounge, an indoor swimming pool and health club, and retail stores. The complex
also has approximately 50,000 square feet of convention facilities, including
eight large meeting rooms and a 16,000 square foot ballroom.
The Resorts Casino Hotel has a 70,000 square foot casino and a simulcast
parimutuel betting and poker area of approximately 8,000 square feet. In
December 1996, these gaming areas contained 41 blackjack tables, 18 poker
tables, 11 roulette tables, 10 dice tables, 6 Caribbean stud poker tables, 4
baccarat tables, 2 let it ride poker tables, 2 three card poker tables, 2 pai
gow poker tables, 2 big six wheels, 1 sic bo table, 2,350 slot machines, 5
betting windows and 4 customer-operated terminals for simulcast parimutuel
betting. Also included in the simulcast area is a keno lounge.
In 1995 SINA purchased the Chalfonte Site, a 4.4 acre tract on the Boardwalk
adjacent to the Resorts Casino Hotel. SINA also recently entered into a five
year lease with an option to purchase approximately 3 acres to the north of the
Resorts Casino Hotel, purchased an adjacent parcel and was successful in
vacating the portion of North Carolina Avenue that lies between the Chalfonte
Site and the Resorts Casino Hotel. These parcels, together with the Chalfonte
Site, total more than 9 acres.
During 1997, the Company expects to begin enhancing the existing Resorts
Casino Hotel by way of the Atlantic City Renovation, which will include the
construction of additional parking, the renovation of approximately 500 of the
hotel rooms and various improvements to the public areas. The planning for the
Atlantic City Renovation has just recently begun, and the costs and schedule
therefor have not yet been determined.
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In 1998, the Company expects to begin planning of the Atlantic City
Expansion. The Atlantic City Expansion is expected to consist of a new
development on land adjacent to the existing Resorts Casino Hotel, including
additional hotel rooms and development of a highly themed casino and
entertainment complex. The new development would be integrated with the existing
Resorts Casino Hotel, and when completed during 2000, management believes that
it should be one of the first Las Vegas style gaming entertainment complexes in
Atlantic City. The size and scope of the Atlantic City Expansion depends, in
part, upon the amount of additional land the Company is able to acquire. In
addition, the Company's ability to carry out the Atlantic City Expansion depends
on a number of other factors, including completion of necessary planning,
receipt of adequate financing and certain state and local approvals.
In addition to the approximately 9 acres of land encompassing the Resorts
Casino Hotel and the Chalfonte Site, SINA owns approximately 10 acres of land
upon which the Showboat Casino Hotel (the "Showboat"), which is operated by ACS,
is situated. This land is leased to ACS pursuant to the Showboat Lease. The
Showboat Lease provides for an initial annual rental, which commenced in March
1987, of $6,340,000, subject to annual adjustment based upon changes in the
consumer price index. The annual rental is $8,744,000 for 1996. All lease
payments due under the Showboat Lease directly service SINA's obligations under
SINA's $105,333,000 aggregate principal amount of non-recourse Showboat Notes.
SINA also owns various non-operating sites, approximating 29 acres, and has
a lease with an option to purchase approximately 3 acres in Atlantic City that
could be developed. Included in these parcels is the 2 acre Steeplechase Pier
site. SINA also owns in fee an approximately 552 acre parcel located in Atlantic
City on Blackhorse Pike, of which approximately 545 acres are considered to be
woodlands and wetlands, which may not be developed. SINA owns in fee various
individual parcels of property located in the area of Atlantic City known as the
South Inlet which in the aggregate constitute 7.7 acres and a parcel of land in
Atlantic City consisting of approximately six acres and a warehouse thereon.
SINA is the owner of various additional properties at scattered sites in
Atlantic City. Principal among these is the so-called "Trans Expo" site, a 2.3
acre parcel located near the site of the new convention center.
CONNECTICUT
Sun International, through its wholly owned subsidiary, Sun Cove, has a 50%
interest in, and is a managing partner of, TCA, a Connecticut general
partnership, which developed and manages the Mohegan Sun Casino, a casino and
entertainment complex for the Mohegan Tribe in Montville, Connecticut.
Construction of the Mohegan Sun Casino began in early October 1995, and the
facility commenced operations in October 1996. The Mohegan Sun Casino has a
Native American theme which is conveyed through architectural features and the
use of natural design elements such as timber, stone and water. Guests enter the
Mohegan Sun Casino through one of four major entrances, each of which is
distinguished by a separate seasonal theme - winter, spring, summer and fall -
emphasizing the importance of the seasonal changes to tribal life. The Mohegan
Sun Casino consists of approximately 150,000 square feet of gaming space and
features approximately 2,670 slot machines, 180 table games and parking for
7,200 cars. The site for the Mohegan Sun Casino is located approximately one
mile from the interchange of Interstate 395 and Connecticut Route 2A (which has
been widened to a four-lane expressway). As part of its integrated development
plan, the Mohegan Gaming Authority constructed a four-lane access road (with its
own exit) from Route 2A, which gives patrons of the Mohegan Sun Casino direct
access to Interstate 395, which, in turn, gives direct access to Interstate 95,
the main highway connecting Boston, Providence and New York. This road system
allows customers to drive directly into the property from the interstate highway
system without encountering a traffic light.
The Company believes that the demographics of the area surrounding the
Mohegan Sun Casino are extremely favorable, with 2.4 million adults residing
within 50 miles, 10.2 million adults residing within 100 miles and 21.8 million
adults residing within 150 miles of the Mohegan Sun Casino in 1995, according to
market research reports. The Mohegan Sun Casino is located approximately 10
miles west of Foxwoods, which the Company believes to be one of the most
profitable casinos in the world. Foxwoods, which is operated by the Pequot
Tribe, reported approximately $595 million of revenues from slot machines for
the 12 months ended June 30, 1996, an average of approximately $405 per slot
machine per day. The Company
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believes that the location, ease of access and distinctive northeastern Indian
theme of the Mohegan Sun Casino should enable it to capture a significant share
of the gaming market in the northeastern United States. See "Risk Factors --
Competition -- Connecticut".
While the Mohegan Sun Casino opened during the slow season, since its
opening through December 31, 1996, the property achieved an average daily win
per slot machine of $317 and recorded net revenues of $97 million and earnings
before bingo operations (which are not managed by TCA) and interest, taxes,
depreciation and amortization of $22.8 million.
To fund construction and development of the Mohegan Sun Casino, the Mohegan
Gaming Authority completed a private placement of $175 million of the Mohegan
Senior Notes to institutional investors in September 1995 (the "Mohegan
Offering"). The Mohegan Offering, structured with the assistance of the Company,
was the first offering in which a Native American Indian tribe was able to
utilize the services of internationally recognized investment banks to finance a
significant casino project. In connection with funding construction and
development of the Mohegan Sun Casino, in September 1995 the Company acquired
approximately $40 million of Subordinated Notes due 2003 (the "Mohegan
Subordinated Notes") of the Mohegan Gaming Authority. As a result of a recent
sale of some of the Mohegan Subordinated Notes to one of the partners of TCA,
the Company currently holds $23.6 million of Mohegan Subordinated Notes. In
addition, subject to certain qualifications and limitations, the Company
guaranteed the payment of all project costs owing prior to such completion up to
a maximum aggregate amount of $50 million (the "Secured Completion Guarantee").
As of January 31, 1997, the Company has provided $50 million to the Mohegan
Gaming Authority under the Secured Completion Guarantee, for which it has
received certain subordinated indebtedness of the Mohegan Gaming Authority (the
"Secured Completion Guarantee Notes").
Fixed interest is payable on the Mohegan Senior Notes at the rate of 13.5%
per annum. In addition, certain cash flow participation interest is payable on
the Mohegan Senior Notes on each interest payment date in an amount equal to 5%
of the Mohegan Gaming Authority's cash flow. The Mohegan Subordinated Notes bear
interest at 15% per annum. However, payment in cash of such interest is deferred
until $87.5 million in principal amount of the Mohegan Senior Notes have been
retired and the Mohegan Gaming Authority achieves a fixed charge coverage ratio
of 2.5 to 1.0 over the previous four fiscal quarters. The Mohegan Subordinated
Notes are subordinated in right to required payments on the Mohegan Senior
Notes, as are payments to TCA of management fees under the TCA Management
Agreement. In connection with its supply of certain operational and financial
support to TCA, the Company will receive certain priority payments from TCA's
management fees. Specifically, the Company will receive priority payments from
TCA of approximately $12 million for development and construction services. In
addition, the Company will receive priority payments from TCA in respect of its
performance under the Secured Completion Guarantee. Each of these priority
payments will be paid from TCA's management fees prior to the pro rata
distribution to TCA's partners (including the Company) of TCA's profits.
The Secured Completion Guarantee Notes bear interest at the prime rate as
announced by Chase Manhattan Bank plus 1% per annum. In addition, for certain
financial advisory and other services provided to TCA the Company will receive a
priority payment from TCA equal to the difference between such rate and 26.5%
per annum on its investment in the Secured Completion Guarantee Notes issued as
part of the Secured Completion Guarantee. The Company's partner in TCA is
required to purchase $7.5 million of Secured Completion Guarantee Notes over a
three-year period.
The final calculations of the cost of developing, constructing, equipping
and opening the Mohegan Sun Casino have not been finalized but are expected to
total approximately $318 million, which consists of $305 million of project
development costs and $13 million of initial working capital. The sources of
funds for the project costs are (i) $175 million from the sale of the Mohegan
Senior Notes, (ii) $40 million from the sale of the Mohegan Subordinated Notes,
(iii) $50 million committed by the Company pursuant to the Secured Completion
Guarantee and (iv) $40 million of equipment financing. In addition, $13 million
of initial working capital has been provided by a bank working capital facility.
Sun Cove, a wholly owned subsidiary of the Company, is one of two managing
partners of TCA. All decisions of the managing partners require the concurrence
of Sun Cove and the other managing partner, Waterford Gaming, L.L.C. In the
event of deadlock there are mutual buy-out provisions.
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INDIAN OCEAN
Sun International owns a 22.8% interest in Sun Indian Ocean, a Mauritian
company which is publicly traded on the Mauritius Stock Exchange. Sun Indian
Ocean is regarded as one of the premier resort operators in the Indian Ocean and
owns five beach resort hotels in Mauritius: the 175-room Le Saint Geran Hotel,
Golf Club & Casino ("Le Saint Geran"), the 200-room Le Touessrok Hotel & Ile Aux
Cerfs ("Le Touessrok"), the 240-room La Pirogue Hotel & Casino ("La Pirogue"),
the 333-room Le Coco Beach ("Le Coco Beach") and the 238-room Sugar Beach Resort
Hotel ("Sugar Beach"). Sun Indian Ocean also owns the 187-room Le Galawa Beach
Resort ("Le Galawa") in the Comoros. Mauritius and the Comoros are tropical
islands located in the Indian Ocean approximately 1,200 miles and 200 miles,
respectively, from the east coast of mainland Africa.
The resorts in Mauritius and the Comoros are marketed primarily to luxury
and mid-market tourists from Europe and southern Africa. Le Saint Geran and Le
Touessrok offer deluxe accommodations and are acknowledged by the European
travel trade to be among the finest beach resorts in the world. La Pirogue, Le
Coco Beach, Sugar Beach and Le Galawa cater to mid-market and budget travellers.
Sun Indian Ocean owns five of the 16 major hotels in Mauritius representing
approximately 36% of the room inventory among properties with more than 80
rooms.
Mauritius' tourist industry mainly comprises visitors from England, Germany,
France, Italy and South Africa. Scheduled air service to and from Mauritius is
provided through scheduled flights on numerous airlines including Air France,
British Airways, Cathay Pacific, Singapore Airlines, Air India, Air Mauritius,
Lufthansa and South African Airlines. Sun Indian Ocean is a leading resort
operator at the upper end of the market, as there is only one other five-star
property on Mauritius. The Company believes that the recent openings of Le Coco
Beach and Sugar Beach have increased its market share on Mauritius, further
enhanced its presence in the mid-market and provided certain economies of scale.
Pursuant to the management agreements with Sun Indian Ocean, the Company
provides comprehensive management services under individual management
agreements with each of Le Saint Geran, Le Touessrok, La Pirogue, Sugar Beach
and Le Coco Beach. The term of each of these management agreements (the "Sun
Indian Ocean Management Agreements") continues through December 2003. The
Company has the right to extend each Sun Indian Ocean Management Agreement for a
five-year period by notice in writing delivered to Sun Indian Ocean by December
2001.
Under each of the Sun Indian Ocean Management Agreements, the Company
receives a management fee calculated as a percentage of revenues (2%) and
adjusted EBITDA (15%). In addition, under each of the Sun Indian Ocean
Management Agreements other than the management agreement for Le Saint Geran,
the Company receives project consulting fees charged at 2.5% of the total
project costs for construction and refurbishment.
The Company also has a management agreement to provide services to Le Galawa
in the Comoros. The terms of this agreement are identical to the terms of the
Sun Indian Ocean Management Agreements except that the Company is entitled to
receive a basic fee of 3.5% of revenues rather than 2%.
FRANCE
Sun International owns an effective 25% interest in Sun France, a private
company founded in 1990, which owns four locals-oriented casinos in France,
located in Nice and Chamonix and in the Marseilles districts of Cassis and
Carry-le-Rouet. Sun International's principal partners in Sun France are
Chargeurs, Accor and the Barriere family, the latter two of which have broad
experience in the French domestic gaming and international lodging industries.
Accor, a publicly traded company, is one of the largest hotel operators in the
world, operating under the trade names "Sofitel", "Novotel", "Mercure" and
others. The Barriere family is one of the largest French casino operators,
operating 10 casinos. The Chargeurs organization is a publicly traded industrial
company in France.
In 1990, Sun France acquired the Casino Ruhl in Nice and subsequently
acquired the three additional casinos in 1992. The Casino Ruhl, the only casino
in Nice, operates 300 slot machines and 28 table games. The Cassis casino
operates 100 slot machines and 17 table games, the Carry-le-Rouet casino
operates 80 slot
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<PAGE>
machines and one table game and the Chamonix casino operates 49 slot machines
and 13 table games. Sun France operates in excess of 20,000 square feet of
gaming space, which contains approximately 530 slot machines and 60 table games.
In France customers are required to pay an entry fee payable to the
government and provide details of identity in order to gain access to table
games. Further information is required from patrons wishing to obtain credit
through credit cards. These requirements tend to limit the number of customers.
In addition, French casinos have traditionally been heavily regulated and taxed
with approximately a 60% levy on table games. The effective tax on slots is
lower, beginning at 40% and gradually increasing to 60%, with the result that
the profitability of Sun France will be largely determined by the number of slot
machines installed.
The Company provides various services to Sun France's four casinos under a
technical assistance agreement, which expires in October 1997, pursuant to which
the Company receives a fixed fee equivalent to approximately $800,000 per year
(at current exchange rates).
COMPETITION
GENERAL
The resort and casino industries are characterized by a high degree of
competition among a large number of participants and are largely dependent on
tourism. The Company competes with resorts both with and without gaming and with
gaming facilities generally, including land-based casinos, riverboat, dockside
and cruise ship on-board casinos and other forms of gaming, as well as other
forms of entertainment. A number of the Company's competitors are larger and
have greater financial and other resources than the Company. In addition, a
number of jurisdictions have recently legalized gaming and other jurisdictions
are considering the legalization of gaming. The Company cannot predict what
effect a continued proliferation of gaming and the resulting increase in
competition could have on the Company's ability to compete effectively in the
future.
The Company believes that the ability to compete effectively in the resort
and gaming industries, particularly the destination resort and gaming
industries, is based on several factors, including the scope, quality, location
and accessibility of resort and gaming facilities and amenities, the
effectiveness of marketing efforts, customer service, the relative convenience
of available transportation, service and the quality and price of rooms, food
and beverages, convention facilities and entertainment.
THE BAHAMAS
The Company's Paradise Island operations compete with cruise ships and other
hotels and resorts, particularly those on Paradise Island and New Providence
Island in The Bahamas as well as those on Grand Bahama Island and the Caribbean
islands. There are approximately 7,600 rooms for overnight guests on Paradise
Island and New Providence Island combined, of which approximately 3,100 are
located on Paradise Island, including 1,880 in hotels owned and operated by the
Company. The Marriott Crystal Palace, a resort and casino with a theater and
other amenities located on New Providence Island, across Nassau harbor from
Paradise Island, is Atlantis' primary competitor on Paradise Island and New
Providence Island.
The Atlantis Casino also competes with the Princess Casino and, to a lesser
extent, the Lucayan Beach Resort and Casino, each of which offers hotel
accommodations, restaurants, gaming and other leisure facilities on Grand
Bahamas Island, approximately 40 minutes by air from Paradise Island. The
Atlantis Casino also competes with the El San Juan located in Puerto Rico and,
to a lesser extent, with gaming casino facilities located in several other
hotels and resorts in Puerto Rico, with cruise ships which effectively provide
additional rooms and with resorts and casinos located on other Caribbean
islands, in Atlantic City, in Las Vegas and elsewhere in the United States. See
"Risk Factors -- Competition -- The Bahamas".
ATLANTIC CITY
Competition in the Atlantic City casino/hotel market is very strong.
Casino/hotels compete on a number of different bases, including promotional
allowances given to customers, entertainment, advertising, services provided to
patrons, caliber of personnel, attractiveness of the hotel and casino areas and
related amenities, and parking facilities. The Resorts Casino Hotel competes
directly with 11 casino/hotels in Atlantic City which, in the aggregate, contain
almost 1,000,000 square feet of gaming area, including simulcast betting and
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poker rooms, and almost 10,000 hotel rooms. In addition, gaming companies have
announced plans to enter the Atlantic City market. See "--Certain Matters
Affecting the Company's Atlantic City Operations--New Convention Center and
Casino/Hotel Expansion".
The Resorts Casino Hotel is located at the eastern end of the Boardwalk
adjacent to the Trump Taj Mahal Casino Resort (the "Taj Mahal"), which is next
to the Showboat. These three properties have a total of approximately 2,700
hotel rooms and approximately 314,000 square feet of gaming space in close
proximity to each other. A 28-foot wide enclosed pedestrian bridge between the
Resorts Casino Hotel and the Taj Mahal allows patrons of both hotels and guests
for events being held at the Resorts Casino Hotel and the Taj Mahal to move
between the facilities without exposure to the weather. A similar enclosed
pedestrian bridge connects the Showboat to the Taj Mahal, allowing patrons to
walk under cover among all three casino/ hotels. The remaining nine Atlantic
City casino/hotels are located approximately one-half mile to one and one-half
miles to the west on the Boardwalk or in the Marina area of Atlantic City.
In recent years, competition for the gaming patron outside of Atlantic City
has become extremely intense. For instance, gaming operations run by federally
recognized Indian tribes throughout New York and New England, including the
Mohegan Sun Casino and Foxwoods, and other gaming operations that federally
recognized Indian tribes are currently seeking or plan to seek authorization
for, directly compete with Atlantic City for the day-trip patron. Other Indian
tribes in the northeastern United States are seeking federal recognition in
order to establish gaming operations which would further increase the
competition for day-trip patrons. See "Risk Factors -- Competition -- Atlantic
City".
CONNECTICUT
Because the Mohegan Sun Casino is marketed primarily to day-trip customers,
it competes primarily with Foxwoods and, to a lesser extent, with casinos in
Atlantic City, New Jersey, certain of which have greater resources and name
recognition than the Company or the Mohegan Sun Casino. Currently, Foxwoods is
the only casino in operation within 150 miles of the Mohegan Sun Casino site.
Foxwoods is located approximately 10 miles from the Mohegan Sun Casino site and
is currently the largest gaming facility in the United States in terms of the
number of slot machines, with more than 4,500 slot machines currently in
operation. In addition, Foxwoods offers a number of amenities that the Mohegan
Sun Casino does not currently offer, including hotels and extensive non-gaming
entertainment facilities. Foxwoods has been in operation for more than four
years, and the Company believes that Foxwoods' successful operation has enabled
it to build financial resources that are currently substantially greater than
those of the Mohegan Gaming Authority or the Mohegan Tribe.
Currently, outside Atlantic City, casino gaming in the northeastern United
States may be conducted only by federally recognized Indian tribes operating
under IGRA. In addition to the Pequot Tribe, which operates Foxwoods, a
federally recognized tribe in Rhode Island and a federally recognized tribe in
Massachusetts are each seeking to establish gaming operations in their
respective states. The Oneida Tribe, which operates a gaming facility in upstate
New York, is seeking to expand its operations. In addition, a number of Indian
tribes in the northeastern United States are seeking federal recognition in
order to establish gaming operations. The Company cannot predict whether any of
these tribes will be successful in establishing gaming operations and, if
established, whether such gaming operations will have a material adverse effect
on the operations of the Mohegan Sun Casino.
In addition, a number of states, including Connecticut, have explored
legalizing casino gaming by non-Indians in one or more locations. In November
1995, the Connecticut state legislature rejected a proposal submitted by the
Pequot Tribe to develop a casino in Bridgeport, Connecticut. The Pequot proposal
had been submitted in response to a request for proposals made by the State of
Connecticut. Under the tribal-state compact between the Mohegan Tribe and the
State of Connecticut, if Connecticut were to legalize any gaming operations
other than pursuant to IGRA (I.E., by an Indian tribe on Indian land) with slot
machines or other commercial casino games, the Mohegan Tribe would no longer be
required to make payments to the State of Connecticut related to slot machine
revenues. The Company is unable to predict whether the Connecticut state
legislature will accept any other casino proposal and, if such proposal results
in a casino being constructed and opened, whether such casino will have a
material adverse effect on the Mohegan Sun Casino. See "Risk Factors --
Competition -- Connecticut".
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OTHER EXISTING OPERATIONS
Sun Indian Ocean's resorts on Mauritius and the Comoros, as vacation
destinations, are in competition with other locations offering vacations to
tourists from Europe, southern Africa and parts of Asia. In Mauritius, there is
also competition from other resorts on the island. In the Comoros, however,
there are no competitive resorts at the current time.
Sun Indian Ocean has a leading position in the luxury end of the Mauritian
hotel market where it owns two of the three luxury hotels offering a total of
375 rooms, while the competing hotel offers only 84 rooms. It faces more
competition for the mid-market La Pirogue and Sugar Beach and for the budget Le
Coco Beach. In total, there are approximately 4,000 hotel rooms of international
quality available in Mauritius, of which 1,500 are marketed in approximately the
same price bracket as La Pirogue, Le Coco Beach and Sugar Beach. There is
currently one competing hotel with 141 rooms that is situated on the same beach
as La Pirogue.
In France, casino licenses may be issued only in resort towns or locations
with natural spa facilities. If additional casino licenses were granted in the
resort locations in which Sun France operates and such casinos were built, Sun
France's casinos would face direct competition from those casinos. There are
currently no other casino facilities in the towns where Sun France operates;
however, there are approximately eight casinos in Cannes, Monte Carlo and other
towns along the Cote d'Azur which the Company considers to be in direct
competition with the Sun France casinos. See "Risk Factors -- Competition --
Other Existing Operations".
CERTAIN MATTERS AFFECTING THE COMPANY'S BAHAMAS OPERATIONS
AIRLINE ARRANGEMENTS
The majority of patrons at the Company's resorts on Paradise Island arrive
through the recently expanded Nassau International Airport located on New
Providence Island. This large, modern facility is served by several carriers
offering frequently scheduled jet service from New York, Atlanta, Toronto, Miami
and other cities. Ground transportation is facilitated by a bridge linking
Paradise Island and New Providence Island.
Additionally, Sun Bahamas, through a subsidiary, owns and operates the
Paradise Island Airport, a short takeoff and landing facility, including a
3,000-foot runway, airport terminal and customs building, situated on 63 acres
of land located at the southeast corner of Paradise Island. Paradise Island
Airlines provides regularly scheduled air service from southern Florida to
Paradise Island pursuant to a Services Agreement with the Company. This
agreement will expire in mid-1998 and will be automatically renewed for one-year
terms unless notice of non-renewal is given at least six months prior to
expiration. The Company believes, however, that fewer than 20% of its patrons
arrive via the Paradise Island Airport.
UNION CONTRACT ARRANGEMENTS
In The Bahamas, approximately 1,900 of Sun Bahamas employees are represented
by The Bahamas Catering and Allied Workers Union (the "Union"). Sun Bahamas
participates in The Bahamas Hotel Employers Association (the "Association"),
which represents resort operators in the Paradise Island-New Providence Island
area. The Association's existing contract with the Union expires in 1998. The
Company believes that Sun Bahamas' and the Association's relations with the
Union are good.
CASINO LICENSE
Paradise Enterprises Limited, a subsidiary of the Company ("PEL"), is
currently licensed to operate the Atlantis Casino under the Bahamian Gaming Act.
In accordance with Bahamian casino licensing requirements, PEL is obligated to
have its casino license renewed annually by the Gaming Board. In addition, other
than an existing obligation to grant two casino licenses, the Bahamian
Government has agreed that it will grant no new casino licenses with respect to
gaming operations on Paradise Island or New Providence Island until 2013,
provided that Sun Bahamas achieves 75% of its projected minimum employment
growth of 2,000 full-time jobs in connection with its expansion and development
plans by year ten of the renewal period. The moratorium on granting new casino
licenses will remain in place, however, in the event such growth is not achieved
because of overall poor market conditions rather than inadequate management by
Sun International.
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GAMING TAXES AND FEES
Currently, the Gaming Act provides for taxes on casino revenues consisting
of an annual basic license fee of $200,000 plus a tax of 25% on all gaming win
up to $10 million, 20% on the next $6 million of win, 10% on the next $4 million
of win and 5% on all win over $20 million.
ATLANTIS CASINO LEASE
A subsidiary of the Company entered into various agreements effective in
1978, pursuant to which the Atlantis Casino is leased to the Hotel Corporation
of The Bahamas ("HCB"), a government-owned entity, at an annual rental of
$500,000. PEL has an exclusive right to manage and operate the Atlantis Casino,
for which it currently pays HCB an annual operating fee of $3 million and 5% of
the gaming win above $20 million. Prior to the acquisition of the Company's
Paradise Island operations, PEL paid HCB an annual operating fee of $5 million
and 15% of gaming win above $25 million.
MANAGEMENT AGREEMENT
The Bahamian Government has extended the existing management agreement
between HCB and PEL through May 2014. The amended annual payment terms beginning
in May 1994 are as follows: (i) for years one through five, a $3 million base
fee plus 5% of gaming win over $20 million, (ii) for years six through ten, a $3
million base fee plus 7.5% of gaming win over $20 million, (iii) for years
eleven through fifteen, a $4 million base fee plus 10% of gaming win over $20
million and (iv) thereafter upon such terms as the relevant parties shall agree,
provided that the fee shall not exceed a base fee of $5 million plus 15% of
gaming win above a threshold of $25 million. Upon expiration, the management
agreement will continue in effect with such changes as the parties may agree but
in any event on terms no less favorable than those agreed upon with other casino
managers on Paradise Island and New Providence Island. The Bahamian Government
has agreed to consider steps eventually to eliminate the role of HCB and allow
for direct licensing of casinos.
The following table summarizes, for the periods shown, the taxes and fees
paid or accrued by Sun Bahamas under the Gaming Act and certain agreements with
the Bahamian Government:
<TABLE>
<CAPTION>
FOR THE YEAR
----------------------------
1995 1996
------------- -------------
<S> <C> <C>
Gaming tax..................................................... $ 7,100,000 $ 7,000,000
Basic license and operating fees............................... 6,200,000 6,000,000
------------- -------------
Total........................................................ $ 13,300,000 $ 13,000,000
------------- -------------
------------- -------------
</TABLE>
HEADS OF AGREEMENT
In connection with the Paradise Island Expansion, on December 13, 1995 the
Company and the Bahamian Government amended the Heads of Agreement to provide
the Company with certain tax relief, incentives and other benefits described
below. These benefits have been granted in exchange for the Company agreeing to,
among other things, spend a minimum of $250 million on the Paradise Island
Expansion, build a minimum of 1,000 additional guest rooms and employ and keep
employed between 2,000 and 2,500 additional Bahamian workers after completion of
the Paradise Island Expansion.
CONTROL OF SUN INTERNATIONAL. SIIL has agreed with the Bahamian Government
not to reduce its equity interest in Sun International below 45% until six
months after completion of the Paradise Island Expansion and thereafter to
control a majority of the Board of Directors of Sun International for a period
of five additional years.
CASINO LICENSE FEES AND WIN TAXES. In replacement of the gaming taxes and
the fees payable to the HCB, the Bahamian Government has agreed, for a period of
20 years following completion of the Paradise Island Expansion, to set annual
casino license fees at $100,000 per thousand square feet of casino space, plus a
minimum annual casino win tax of $4.3 million on all gaming win up to $20
million, 12.5% on all gaming win between $20 million and $120 million and 10% on
all gaming win in excess of $120 million. Additionally, during the first 11
years following completion of the Paradise Island Expansion, the Bahamian
Government will reduce the annual casino license fees by $5 million and reduce
by 45% the win tax to be paid on gaming win between $20 million and $120
million.
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STAMP TAX AND IMPORT DUTY. The Heads of Agreement provides for an exemption
of the Company from stamp tax and import duty on much of the material and
equipment which will be required for the Paradise Island Expansion.
JOINT MARKETING ARRANGEMENTS. The Bahamian Government will extend, until
the year 2003, certain joint marketing arrangements with the Company pursuant to
which, among other things, the Company is eligible to receive matching funds of
up to $4 million annually from the Bahamian Government for marketing and
promotional activities, subject to an eight-year total of $20 million.
INFRASTRUCTURE. The Heads of Agreement includes several important
government commitments to improve the infrastructure of Paradise Island and New
Providence Island. These commitments include improving road access and other
transportation facilities used by visitors to Paradise Island and New Providence
Island as well as installation of a telecommunications cable from Florida to The
Bahamas through a joint venture with AT&T Corp.
CERTAIN MATTERS AFFECTING THE COMPANY'S ATLANTIC CITY OPERATIONS
NEW CONVENTION CENTER AND CASINO/HOTEL EXPANSION
In January 1992, the State of New Jersey enacted legislation that authorized
a financing plan for the construction of a new convention center to be located
on a 30-acre site next to the Atlantic City train station at the base of the
Atlantic City Expressway. The Company understands that the new convention center
will have 500,000 square feet of exhibit space and an additional 109,000 square
feet of meeting rooms. Construction of the new convention center began in early
1993 and it is scheduled to be completed in the spring of 1997.
The convention center is part of a broader plan that includes an additional
expansion of the Atlantic City International Airport, the transformation of the
main entryway into Atlantic City into a new corridor, and the construction of a
new 500 room convention hotel. Officials have commented upon the need for
improved commercial air service into Atlantic City as a factor in the success of
the proposed convention center. The corridor will link the new convention center
and hotel with the Boardwalk. In all, six blocks are to be transformed into an
expansive park with extensive landscaping, night-time lighting, a large fountain
and pool with an 86-foot lighthouse.
It is believed that additional hotel rooms are necessary to support the
convention center as well as to allow Atlantic City to become a competitive
destination resort. Thus, in addition to the 500 room convention hotel, to
further spur construction of new hotel rooms and renovation of substandard hotel
rooms into deluxe accommodations, up to a total of $175 million has been set
aside by the Casino Reinvestment Development Authority (the "CRDA"), a public
authority created under the NJCCA, to aid in financing such projects. To date,
the CRDA has approved the expansion projects submitted by eight casino/hotels
which are to receive CRDA financing totaling approximately $140 million, and
could result in the construction of approximately 3,500 hotel rooms. Also,
Mirage Resorts, Inc., a Las Vegas, Nevada casino/hotel company, has been
selected to be the developer of an approximately 180 acre tract in the Marina
area of Atlantic City. Mirage Resorts, Inc. proposes to build a $750 million,
2,000 room casino/hotel, Boyd Gaming Corp. proposes to build a $500 million,
1,000 room casino/hotel and Circus Circus Enterprises, Inc. proposes to build a
$600 million, 2,000 room casino/hotel on that tract. The Company understands
that the state of New Jersey and Mirage Resorts, Inc. have reached an agreement
as to financing the costs of certain infrastructure improvements needed to
develop that tract. MGM Grand, Inc. has also announced plans for the
construction of a new casino/hotel in Atlantic City.
Although these developments are viewed as positive and favorable to the
future prospects of the Atlantic City gaming industry, the Company, at this
point, can make no representations as to whether, or to what extent, its results
may be affected by the completion of the new convention center, the airport
expansion projects and the proposed increase in number of hotel rooms in the
area.
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SEASONAL FACTORS
Inclement weather can adversely affect the operations of the Company's
Atlantic City properties as the principal means of transportation to Atlantic
City is by automobile or bus. Higher revenues and earnings are typically
realized from the Atlantic City operations during the middle third of the year.
See "Risk Factors-- Recent Operating Results of SINA".
REGULATION, GAMING TAXES AND FEES
GENERAL. The Company's operations in Atlantic City are subject to
regulation under the NJCCA, which authorizes the establishment of casinos in
Atlantic City, provides for licensing, regulation and taxation of casinos and
related persons and entities and created the NJCCC and the Division of Gaming
Enforcement to administer the NJCCA. In general, the provisions of the NJCCA
concern: (i) the ability, reputation, character, financial stability and
integrity of casino operators, their officers, directors and employees and
others financially interested in or in control of a casino; (ii) the nature and
suitability of hotel and casino facilities, operating methods and conditions;
and (iii) financial and accounting practices. Gaming operations are subject to a
number of restrictions relating to the rules of games, types of games permitted,
credit play, size of hotel and casino operations, hours of operation, persons
who may be employed and licensure of such persons, persons or entities that may
do business with casinos, the maintenance of accounting and cash control
procedures, security and other aspects of the business.
CASINO LICENSE. A casino license is initially issued for a term of one year
and must be renewed annually by action of the NJCCC for the first two renewal
periods succeeding the initial issuance of a casino license. Thereafter the
NJCCC may renew a casino license for a period of four years, although the NJCCC
may reopen licensing hearings at any time. A license is not transferable and may
be conditioned, revoked or suspended at any time upon proper action by the
NJCCC. The NJCCA also requires an operations certificate which, in effect, has a
term coextensive with that of a casino license. On February 26, 1979, the NJCCC
granted a casino license to RIH for the operation of the Resorts Hotel Casino.
In January 1996, RIH's license was renewed until January 31, 2000. RIH's renewed
license is subject to a financial stability review midway through the license
period. In order for a casino license to be renewed, the licensee must show by
clear and convincing evidence that it meets all of the criteria set out in the
NJCCA, including the qualification of holding, intermediary and subsidiary
companies of a casino licensee and of the directors, officers and certain
employees of such companies.
RESTRICTIONS ON OWNERSHIP OF SECURITIES. The NJCCA imposes certain
restrictions upon the ownership of securities issued by a corporation which
holds a casino license or is a holding, intermediary or subsidiary company of a
corporate licensee (collectively, "holding company"). Among other restrictions,
the sale, assignment, transfer, pledge or other disposition of any security
issued by a corporation which holds a casino license is conditional and shall be
ineffective if disapproved by the NJCCC. If the NJCCC finds that an individual
owner or holder of any securities of a corporate licensee or its holding company
must be qualified and is not qualified under the NJCCA, the NJCCC has the right
to propose any necessary remedial action. In the case of corporate holding
companies and affiliates whose securities are publicly traded, the NJCCC may
require divestiture of the security held by any disqualified holder who is
required to be qualified under the NJCCA.
In the event that entities or persons required to be qualified refuse or
fail to qualify and fail to divest themselves of such security interest, the
NJCCC has the right to take any necessary action, including the revocation or
suspension of the casino license. If any security holder of the licensee or its
holding company or affiliate who is required to be qualified is found
disqualified, it will be unlawful for the security holder to (i) receive any
dividends or interest upon any such securities, (ii) exercise, directly or
through any trustee or nominee, any right conferred by such securities or (iii)
receive any remuneration in any form from the corporate licensee for services
rendered or otherwise. The Company's Articles of Association, as amended,
provide that all securities of the Company are held subject to the condition
that if the holder thereof is found to be disqualified by the NJCCC pursuant to
provisions of the NJCCA, then that holder must dispose of his or her interest in
the securities.
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REMEDIES UNDER THE NJCCA. In the event that it is determined that a
licensee has violated, or fails to affirmatively prove that it meets all of the
criteria of, the NJCCA, or if a security holder of the licensee required to be
qualified is found disqualified but does not dispose of his securities in the
licensee or holding company, under certain circumstances the licensee could be
subject to fines or have its license suspended, conditioned or revoked. The
NJCCA provides for the mandatory appointment of a conservator to operate the
casino and hotel facility if a license is revoked or not renewed and permits the
appointment of a conservator if a license is suspended for a period in excess of
120 days. If a conservator is appointed, the suspended or former licensee is
entitled to a "fair rate of return out of net earnings, if any, during the
period of the conservatorship, taking into consideration that which amounts to a
fair rate of return in the casino or hotel industry." Under certain
circumstances, upon the revocation of a license or failure to renew, the
conservator, after approval by the NJCCC and consultation with the former
licensee, may sell, assign, convey or otherwise dispose of all of the property
of the casino/hotel. In such cases, the former licensee is entitled to a summary
review of such proposed sale by the NJCCC and creditors of the former licensee
and other parties in interest are entitled to prior written notice of sale.
LICENSE FEES, TAXES AND INVESTMENT OBLIGATIONS. The NJCCA provides for
casino license renewal fees and other fees based upon the cost of maintaining
control and regulatory activities and various license fees for the various
classes of employees. In addition, a casino licensee is subject annually to a
tax of 8% of "gross revenue" (defined under the NJCCA as casino win, less
provision for uncollectible accounts up to 4% of casino win) and license fees of
$500 on each slot machine. Also, the NJCCA has been amended to create a new
Atlantic City fund (the "AC Fund") for economic development projects other than
the construction and renovation of casino/hotels. Beginning in fiscal year
1995/1996 and for the following three fiscal years, if the amount of money
expended by the NJCCC and the Division of Gaming Enforcement is less than
$57,300,000, the prior year's budget for these agencies, the amount of the
difference is to be contributed to the AC Fund. Thereafter, beginning with
fiscal year 1999/2000 and for the following three fiscal years, an amount equal
to the average paid into the AC Fund for the previous four fiscal years shall be
contributed to the AC Fund. Each licensee's share of the amount to be
contributed to the AC Fund is based upon its percentage of the total industry
gross revenue for the relevant fiscal year. After eight years, the casino
licensee's requirement to contribute to this fund ceases.
The following table summarizes, for the periods shown, the fees, taxes and
contributions assessed upon SINA by the NJCCC.
<TABLE>
<CAPTION>
FOR THE YEAR
-------------------------------------------
1994 1995 1996
------------- ------------- -------------
<S> <C> <C> <C>
Gaming tax.......................................................... $ 19,996,000 $ 21,402,000 $ 20,661,000
License, investigation, inspection and other fees................... 4,218,000 3,917,000 3,672,000
Contribution to AC Fund............................................. 224,000 570,000
------------- ------------- -------------
$ 24,214,000 $ 25,543,000 $ 24,903,000
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
The NJCCA, as originally adopted, required a licensee to make investments
equal to 2% of the licensee's gross revenue (the "investment obligation") for
each calendar year, commencing in 1979, in which such gross revenue exceeded its
"cumulative investments" (as defined in the NJCCA). A licensee had five years
from the end of each calendar year to satisfy this investment obligation or
become liable for an "alternative tax" in the same amount. In 1984 the New
Jersey legislature amended the NJCCA so that these provisions now apply only to
investment obligations for the years 1979 through 1983. Certain issues have been
raised by the CRDA and the State of New Jersey Department of the Treasury (the
"Treasury") concerning the satisfaction of investment obligations for the years
1979 through 1983 by SINA. These matters were dormant for an extensive period of
time until late 1995 when SINA was contacted by the CRDA. CRDA legal
representatives have recently indicated that Treasury may take a position that
SINA owes additional investment alternative taxes including interest and
possibly penalties. If these issues are determined adversely, SINA could be
required to pay the relevant amount in cash. Management of the Company intends
to contest these issues and believes a negotiated settlement with an
insignificant monetary cost is possible.
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<PAGE>
Effective for 1984 and subsequent years, the amended NJCCA requires a
licensee to satisfy its investment obligation by purchasing bonds to be issued
by the CRDA or by making other investments authorized by the CRDA, in an amount
equal to 1.25% of a licensee's gross revenue. If the investment obligation is
not satisfied, then the licensee will be subject to an investment alternative
tax of 2.5% of gross revenue. Licensees are required to make quarterly deposits
with the CRDA against their current year investment obligations. SINA's
investment obligations for the years 1996, 1995, 1994 and 1993 amounted to
$3,229,000, $3,348,000, $3,124,000, and $3,054,000, respectively, and, with the
exception of a $127,000 credit received in 1995 for making a donation, have been
satisfied by deposits made with the CRDA. At December 31, 1996, SINA held
$6,859,000 face amount of bonds issued by the CRDA and had $19,701,000 on
deposit with the CRDA. The CRDA bonds issued through 1995 have interest rates
ranging from 3.9% to 7% and have repayment terms of between 20 and 50 years.
CERTAIN MATTERS AFFECTING THE COMPANY'S CONNECTICUT OPERATIONS
REGULATION
The Mohegan Tribe is a federally recognized Native American Indian tribe
with approximately 1,100 members, whose federal recognition became effective May
15, 1994. In May 1994, the Mohegan Tribe and the State of Connecticut entered
into a gaming compact to authorize and regulate Class III gaming operations
(slot machines and table games). TCA managed the development and construction
and manages the operation and marketing of the Mohegan Sun Casino.
Each of the partners of TCA and certain employees of the Mohegan Sun Casino
must be licensed by relevant tribal and state authorities. Each of the partners
of TCA has received a gaming license from the Commissioner of Revenue Services
of the State of Connecticut. No assurances can be given, however, that any new
or permanent licenses, permits or approvals that may be required by the Company,
its key employees and its partners, if applicable, in the future will be granted
or that its existing licenses, permits and approvals will be renewed or will not
be suspended or revoked in the future. In addition, gaming licenses or
management agreements held or subsequently acquired by the Company or its
subsidiaries pursuant to applicable law and regulations, including the IGRA and
NIGC regulations, may require review, approval or licensing of any person or
entity directly, or indirectly possessing or acquiring 10% or more of the
Company's equity securities (a "Substantial Interest"). The NIGC is required to
review, and approve any such person or entity and make a finding of suitability
pursuant to the IGRA and NIGC regulations. If the NIGC were to determine that a
person or entity holding a Substantial Interest in a gaming management agreement
was unsuitable, prior approval of the management agreement could be revoked,
subsequent approvals or renewals could be blocked and certain required gaming
licenses could be suspended, rescinded or denied. See "--TCA Management
Agreement".
TCA MANAGEMENT AGREEMENT
The Mohegan Tribe and TCA have entered into the TCA Management Agreement
pursuant to which the Mohegan Tribe has engaged TCA to develop, operate, manage
and maintain the Mohegan Sun Casino in exchange for an annual fee which is
calculated in three tiers based upon net revenues (as defined) as set forth
below (in thousands):
<TABLE>
<CAPTION>
III
------------
II ANNUAL FEE
I ------------------- FROM
------------ ANNUAL FEE FROM TIERS I & II
40% OF TIER I PLUS 30% OF
NET REVENUES PLUS 35% OF NET NET REVENUES
UP TO REVENUES BETWEEN ABOVE
------------ ------------------- ------------
<S> <C> <C> <C>
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
</TABLE>
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<PAGE>
MANAGEMENT FEES. The monthly management fee payments to TCA are calculated
against 1/12th of targeted annual net revenue amounts set forth in the TCA
Management Agreement and then adjusted to actual net revenue amounts realized
annually within 60 days of the close of each fiscal year. The annual adjustment
may or may not have a material effect on cash flow. As defined in the TCA
Management Agreement, "Net Revenues" of the Mohegan Sun Casino means the amount
of gross revenues of the facility, less operating expenses and certain specified
categories of revenue, such as income from any financing or refinancing, taxes
or charges received from patrons on behalf of and remitted to a governmental
entity, proceeds from the sale of capital assets, insurance proceeds and
interest on the reserve fund. Net revenues include "Net Gaming Revenues", which
are equal to the amount of "net win" (the difference between gaming wins and
losses) less all gaming related operational expenses. In addition, TCA will be
required to establish, and, together with the Mohegan Tribe, make monthly
contributions to, a replacement reserve fund (the "Reserve Fund"), which may be
used to pay any approved budgeted capital expenditures for the Mohegan Sun
Casino. The annual TCA contribution to such fund will total $1.2 million.
TERM. The term of the TCA Management Agreement is seven years from the date
of the opening of the Mohegan Sun Casino, subject to a one-time option for a
buy-out by the Mohegan Tribe on the last day of the 60th month following the
first full month of operations (the "Buyout Option"). In order to exercise the
Buyout Option, the Mohegan Tribe must fulfill certain obligations, including:
(i) fully paying and satisfying certain outstanding indebtedness, including all
indebtedness under the Mohegan Senior Notes, the Secured Completion Guarantee
Notes and the Mohegan Subordinated Notes and (ii) entering into discussion with
TCA to determine the exercise price of the Buyout Option on commercially
reasonable terms.
PRIORITY PAYMENTS. In connection with its supply of certain operational and
financial support to TCA, the Company will receive priority payments of
approximately $12 million from TCA. In addition, for certain financial advisory
and other services provided to TCA the Company will receive a priority payment
from TCA on its investments in the Secured Completion Guarantee Notes equal to
the difference between the prime rate as announced by Chase Manhattan Bank plus
1% per annum and 26.5% per annum. Each of these priority payments will be paid
from TCA's management fees prior to the pro rata distribution to TCA's partners
of TCA's profits.
BUSINESS BOARD. Pursuant to the TCA Management Agreement, certain
decision-making authority and oversight duties are delegated to a committee
comprised of an equal number of representatives of the Mohegan Tribe and of TCA
(the "Business Board"). Actions by the Business Board require the unanimous
approval of its members or their respective designees. The Mohegan Tribe and TCA
have agreed that, in the event that the Business Board is unable to reach a
mutual decision or compromise, any disputes will be submitted to summary
arbitration before a single arbitrator, who will render a decision within 48
hours of submission of the dispute.
WAIVER OF SOVEREIGN IMMUNITY. Pursuant to the TCA Management Agreement, the
Mohegan Tribe has waived sovereign immunity for the purpose of permitting,
compelling or enforcing arbitration and has agreed to be sued by TCA in any
court of competent jurisdiction for the purpose of compelling arbitration or
enforcing any arbitration or judicial award arising out of the TCA Management
Agreement, the Secured Completion Guarantee, the Secured Completion Guarantee
Notes and the Mohegan Subordinated Notes. The parties have agreed that all
disputes and claims arising out of the TCA Management Agreement or the Mohegan
Tribe's gaming ordinance will be submitted to binding arbitration, which shall
be the sole remedy of the parties, and that punitive damages may not be awarded
to either party by any arbitrator. The Mohegan Tribe's waiver of sovereign
immunity is limited to enforcement of money damages from undistributed or future
net revenues of the Mohegan Sun Casino (or, under certain conditions, net
revenues of other gaming operations of the Mohegan Tribe). Funds earned and paid
to the Mohegan Tribe as the Mohegan Tribe's share of net revenues prior to any
judgment or award are not subject to the waiver and would not be available for
levy pursuant to any judgment or award.
GAMING DISPUTES COURT. The Mohegan Tribe's Constitution (the "Mohegan
Constitution") provides for the governance of the Mohegan Tribe by a tribal
council, in which the legislative and executive powers of the Mohegan Tribe are
vested, and a constitutional review board. On July 20, 1995, the tribal council
enacted
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<PAGE>
a tribal ordinance creating the Gaming Disputes Court (the "Court"), which is
composed of a trial and an appellate branch. The Mohegan Constitution and the
tribal ordinance establishing the Court give the Court exclusive jurisdiction
for the Mohegan Tribe over all disputes and controversies related to gaming
between any person or entity and the Mohegan Gaming Authority, the Mohegan Tribe
or TCA. The Court has been authorized by the Mohegan Constitution to consist of
at least four judges, none of whom may be members of the Mohegan Tribe and each
of whom must be either a retired federal judge or Connecticut Attorney Trial
Referee (who is an attorney appointed by the Connecticut Supreme Court).
ENVIRONMENTAL MATTERS
The Company is subject to federal, state and local laws and regulations that
(i) govern activities or operations that may have adverse environmental effects,
such as discharges to air and water as well as handling and disposal practices
for solid and hazardous wastes, and (ii) impose liability for the costs of
cleaning up, and certain damages resulting from, past spills, disposals or other
releases of hazardous substances (together, "Environmental Laws"). From time to
time, the Company's operations have resulted or may result in certain
noncompliance with applicable Environmental Laws. However, the Company believes
that any such noncompliance would not have a material adverse effect on the
Company's results of operations.
The Mohegan Sun Casino site was formerly occupied by UNC, a naval products
manufacturer of, among other things, nuclear reactor fuel components. UNC's
facility was officially decommissioned on June 8, 1994, when the NRC confirmed
that all licensable quantities of SNM had been removed from the Mohegan Sun
Casino site and that any residual SNM contamination was remediated in accordance
with the NRC-approved decommissioning plan.
From 1991 through 1993, UNC commissioned an environmental consultant to
perform a series of environmental assessments on the Mohegan Sun Casino site,
including extensive soil investigations and groundwater monitoring. The
environmental assessments detected among other things, volatile organic
chemicals, heavy metals and fuel hydrocarbons in the soil and groundwater.
Extensive remediation of contaminated soils and additional investigations were
then completed. Although the Mohegan Sun Casino site currently meets applicable
remediation requirements, no assurance can be given that the various
environmental assessments with respect to the Mohegan Sun Casino site revealed
all existing environmental conditions, that any prior owners or tenants of the
Mohegan Sun Casino site did not create any material environmental condition not
known to the Mohegan Gaming Authority, that future laws, ordinances or
regulations will not impose any material environmental liability or that a
material environmental condition does not otherwise exist on the Mohegan Sun
Casino site. Future remediation may be necessary if excavation and construction
exposes contaminated soil which has otherwise been deemed isolated and not
subject to cleanup requirements. Such remediation could adversely impact the
results of operations of the Mohegan Sun Casino and therefore the results of
operations and financial conditions of the Company.
In addition, the EPA has named a predecessor to SINA as a potentially
responsible party ("PRP") under CERCLA for the cleanup of contamination
resulting from past disposals of hazardous waste at the Bay Drum site in
Florida, to which the predecessor, among others, sent waste in the past. CERCLA
requires PRPs to pay for cleanup of sites at which there has been a release or
threatened release of hazardous substances. Courts have interpreted CERCLA to
impose strict, joint and several liability upon all persons liable for cleanup
costs. As a practical matter, however, at sites where there are multiple PRPs,
the costs of cleanup typically are allocated among the parties according to a
volumetric or other standard. Because the Company has only limited information
at this time regarding this site and the wastes sent to it by the predecessor,
the Company is unable to determine the extent of its potential liability, if
any, at this site.
EXISTING REVOLVING CREDIT FACILITY
Under the Existing Revolving Credit Facility among Sun Bahamas (as
borrower), Sun International and certain subsidiaries of Sun Bahamas (as
guarantors), Standard Bank London, Limited, Absa Bank Limited, Nedcor Bank
Limited and Henry Ansbacher & Co. Limited (as lenders) and The Bank of Nova
Scotia and The Royal Bank of Scotland plc (as managing agents and lenders), the
lenders have committed to provide revolving loans of up to $250 million,
PROVIDED that various borrowing conditions and covenant restrictions in
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<PAGE>
the Existing Revolving Credit Facility may limit Sun Bahamas' ability to borrow
under the Existing Revolving Credit Facility. The proceeds of loans made under
the Existing Revolving Credit Facility may be used by Sun Bahamas, Sun
International and the Restricted Subsidiaries (as defined below) (i) for the
Paradise Island Expansion, (ii) for general corporate purposes and (iii) to make
certain investments. The Restricted Subsidiaries include the existing direct and
indirect subsidiaries of Sun International, other than (i) Sun Bahamas and (ii)
the subsidiary which holds the Pirate's Cove Hotel. The subsidiaries which hold
the Atlantic City assets of SINA are not Restricted Subsidiaries. Future
subsidiaries may be Restricted Subsidiaries or unrestricted subsidiaries, at Sun
International's election. The Existing Revolving Credit Facility is guaranteed
by the Company and each of the Restricted Subsidiaries, and is secured by
substantially all the assets of Sun Bahamas and each of the guarantors.
The Existing Revolving Credit Facility also contains limitations on the
ability of the Company, Sun Bahamas and the Restricted Subsidiaries to, among
other things, (i) incur or guarantee indebtedness, (ii) make investments in any
third parties or unrestricted subsidiaries of the Company or (iii) acquire any
additional real property or improvements, other than "Permitted Investments"
that consist of the foregoing (but limited to advances and investments in
entities engaged in the hotel, resort or gaming industries) in an amount which
prior to the completion of the Paradise Island Expansion shall not exceed the
"Permitted Investment Amount". The Permitted Investment Amount is initially $125
million, subject to adjustment.
The Company is currently engaged in discussions with The Bank of Nova Scotia
and Societe Generale USA to increase the size of the Existing Revolving Credit
Facility to $375 million and make additional amendments thereto. These
amendments are expected to include lower interest rates and provide the Company
with more flexibility than the Existing Revolving Credit Facility.
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<PAGE>
MANAGEMENT
DIRECTORS AND OFFICERS
The current directors of the Company are:
<TABLE>
<CAPTION>
COUNTRY OF
NAME CITIZENSHIP DIRECTOR SINCE
- ---------------------------------------------------------------------------- --------------------- ---------------
<S> <C> <C>
Derek Hawton................................................................ South Africa 1993
Solomon Kerzner............................................................. South Africa 1993
Peter Buckley............................................................... United Kingdom 1994
Howard Marks................................................................ United States 1994
Eric Siegel................................................................. United States 1994
</TABLE>
Pursuant to the Company's Articles of Association, as amended, the maximum
number of directors of the Company is fixed at five. The current directors of
the Company will hold office until the date of the annual general meeting to be
held in 1997. At the annual general meeting to be held in 1997, and at each
subsequent annual general meeting, directors will be appointed by resolution of
the holders of Ordinary Shares to hold office until the date of the next annual
general meeting.
The current executive officers of the Company are:
<TABLE>
<CAPTION>
NAME AGE EXECUTIVE OFFICER SINCE
- ------------------------------------------------------------------------------------- --- -----------------------
<S> <C> <C>
Solomon Kerzner
Chairman and Chief Executive Officer................................................ 61 1993
Howard B. Kerzner
President........................................................................... 33 1995
Charles D. Adamo
Executive Vice President--Corporate Development & General Counsel................... 36 1995
John R. Allison
Executive Vice President--Chief Financial Officer................................... 50 1994
James Boocher
Executive Vice President--Project Development....................................... 41 1996
Kevin DeSanctis
Chief Operating Officer--North America & Caribbean.................................. 44 1995
Peter J. Venison
Chief Operating Officer--Europe & Indian Ocean...................................... 54 1995
</TABLE>
The backgrounds of each of the directors and the executive officers of the
Company are described below:
Solomon Kerzner, 61--Chairman and Chief Executive Officer. Mr. Kerzner has
been the Chairman and Chief Executive Officer of Sun International since October
1993 and from October 1993 to June 1996 was President. Mr. Kerzner is the
Chairman of SIIL, the Company's controlling shareholder, and of WLG, which owns
an indirect interest in SIIL. Mr. Kerzner is one of the visionary leaders of the
resort and gaming industries. Prior to founding Sun International, Mr. Kerzner
pioneered the concept of an entertainment and gaming destination resort designed
and managed to appeal to multiple market segments by developing Sun City.
Located approximately 100 miles northwest of Johannesburg, South Africa, Sun
City has been expanded in phases since its opening in 1979. The resort has been
designed to cater to a broad public market by combining gaming with a wide
variety of nongaming entertainment experiences. Today, Sun City covers
approximately 620 acres and attracts over two million visitors annually. The
facilities at Sun City include four hotels with approximately 1,300 rooms, an
entertainment center that includes a 6,000-seat indoor superbowl, a 46-acre
man-made lake for watersports and approximately 55,000 square feet of gaming
space. In 1992, Sun City was expanded to include The Lost City, a $275 million
themed resort which recreates a forgotten African civilization that has been
rediscovered. The Lost City covers approximately 60 acres and its center
includes The Palace, a 350-room luxury hotel. The resort also includes a
man-made jungle in which over one million trees were transplanted and the Valley
of the Waves, which includes a wave pool, adventure rides and
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<PAGE>
sand beaches. During Mr. Kerzner's 30-year career he has been responsible for
the development of 21 hotels with over 5,500 rooms, and was the founder of the
largest hotel chain in southern Africa. The Company does not have any interest
in any of the southern African properties developed by Mr. Kerzner.
Howard B. Kerzner, 33--President. Mr. Kerzner joined Sun International in
May 1995 as Executive Vice President--Corporate Development and has been
President of the Company since June 1996. Prior to that time, he was
Director--Corporate Development of SIIL from September 1992. Previously Mr.
Kerzner was an Associate of Lazard Freres & Co. LLC from September 1991. Prior
to that Mr. Kerzner worked for the First Boston Corporation. Mr. Kerzner is the
son of Mr. Solomon Kerzner.
Charles D. Adamo, 36--Executive Vice President--Corporate Development &
General Counsel. Mr. Adamo joined Sun International in May 1995 as General
Counsel and has been responsible for corporate development since January 1997.
Prior to that time, he was Group Legal Advisor of SIIL from September 1994.
Previously, Mr. Adamo was engaged in the practice of law at the firm of Cravath,
Swaine & Moore in New York from 1986. Mr. Adamo is admitted to the bar in the
State of New York.
John R. Allison, 50--Executive Vice President--Chief Financial Officer. Mr.
Allison joined Sun International in May 1995 as Chief Financial Officer. Mr.
Allison joined SIIL in March 1994 as Group Financial Director. From December
1987 until February 1994, Mr. Allison was Chief Financial Officer-- South
African Operations of Sun International Inc. ("SII"), a resort and management
holding company with interests in approximately 27 hotels in southern Africa.
Prior to that time, he was the Group Financial Director of Kimberly-Clark (South
Africa) Limited for four years. He is a fellow of the Institute of Chartered
Accountants in England and Wales and a member of the South African Institute of
Chartered Accountants.
James Boocher, 41--Executive Vice President--Project Development. Mr.
Boocher joined Sun International in November of 1996. He is the executive in
charge of Sun International's expansion on Paradise Island. Before joining Sun
International, Mr. Boocher was President of Ellis-Don Construction Ltd.,
Canada's second largest construction company. Prior to joining Ellis-Don, Mr.
Boocher was a construction Director for Olympia and York Development. He was
involved in projects in the World Financial Center, New York, Canary Wharf,
London, England and two office buildings in Dallas, Texas. Mr. Boocher attended
Ball State University.
Peter Buckley, 54--Director. Mr. Buckley has been a Director of Sun
International since April 1994. Mr. Buckley is Chairman and Chief Executive
Officer of Caledonia. In 1994 he was appointed Chairman of Caledonia having been
Deputy Chairman and Chief Executive since 1987. He is also Chairman of Amber
Holdings plc and Sterling Industries plc--both listed companies associated with
Caledonia--as well as being Chairman of British Air Transport (Holdings) Ltd.,
English & Scottish Investors plc and Bristow Helicopter Group Limited. He is a
Non-executive Director of Close Brothers Group plc, Exco plc, RHS Enterprises
Ltd., Societe Generale de Surveillance Holding S.A.--Geneva, SIIL and The
Telegraph plc.
Kevin DeSanctis, 44--Chief Operating Officer--North America & Caribbean. Mr.
DeSanctis joined Sun International in July 1995 as President, Gaming. Prior to
joining Sun International, Mr. DeSanctis served as Executive Vice President and
Chief Operating Officer of Hemmeter Enterprises since April 1994. From 1991 to
1994, Mr. DeSanctis served as President and Chief Operating Officer of the Trump
Plaza Hotel and Casino. From August 1989 to February 1991, Mr. DeSanctis served
as Vice President of Casino Operations of The Mirage Hotel and Casino in Las
Vegas, Nevada. Prior to August 1989, Mr. DeSanctis served in various positions
in the casino industry.
D.A. Hawton, 59--Director. Mr. Hawton has been a Director of Sun
International since December 1993. Mr. Hawton is Executive Chairman of Safren
(among South Africa's 25 largest industrial groups employing 30,000 people). He
is also a Director of South African Mutual Life Assurance (South Africa's
largest insurance company with assets in excess of $40 billion) and a Director
of Standard Bank Investment Corporation (South Africa's largest banking group).
Mr. Hawton is a fellow of South Africa's chartered Institute of Secretaries.
Howard Marks, 50--Director. Mr. Marks has been a Director of Sun
International since April 1994. Mr. Marks is Chairman of Oaktree Capital
Management, LLC ("Oaktree Capital"). Oaktree Capital
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<PAGE>
manages funds in excess of $5 billion for institutional investors. Previously
Mr. Marks was employed by The TCW Group, Inc. where he became Chief Investment
Officer for Domestic Fixed Income and President of its largest affiliate, TCW
Asset Management Company.
Eric Siegel, 39--Director. Mr. Siegel has been a Director of Sun
International since April 1994. Mr. Siegel is a Principal of Pegasus Insurance
Partners and a Limited Partner of Apollo Advisors, L.P. ("Apollo")/Lion
Advisors, L.P. Apollo invests in debt and equity securities and other
instruments of public and private companies. Mr. Siegel is also a Director and
member of the executive committee of El Paso Electric Company, a publicly traded
utility company.
Peter J. Venison, 54--Chief Operating Officer--Europe & Indian Ocean. Mr.
Venison joined Sun International in May 1995 as Executive Vice President and
President, Europe & Indian Ocean. Prior to that time, he was a Managing Director
of SII from May 1990. Before joining SII, Mr. Venison was President of Treadev
Limited, a resort development company.
STOCK OPTION PLANS
The Company has adopted the Company Stock Option Plan (the "Plan") which was
approved by the shareholders at the annual general meeting held in 1995. The
Plan provides for options to be granted to purchase up to 2,000,000 Ordinary
Shares, of which options to acquire 1,745,511 Ordinary Shares at exercise prices
ranging from $11.6875 to $50.00 have been granted as of December 31, 1996. The
Plan provides for the options to become exercisable, unless otherwise specified
by the Board of Directors of the Company and subject to certain acceleration and
termination provisions, after two years from the date of grant in respect of 20%
of such options and thereafter in installments of 20% per year over a four-year
period. The options have a term of 10 years from the date of grant. Employees,
officers and directors of the Company and subsidiaries of the Company may be
granted options under the Plan. Such options may be transferred to trusts with
respect to which any such participants are beneficiaries and corporations or
other entities controlled by such participants.
PRINCIPAL SHAREHOLDER
SIIL, through its ownership of approximately 49% of the outstanding Ordinary
Shares, is the principal shareholder of the Company. WLG, a company controlled
by a trust for the benefit of the family of Mr. Solomon Kerzner, Chairman of the
Board of Directors and Chief Executive Officer of the Company, indirectly
controls through intermediate entities approximately one-third of the
outstanding ordinary shares of SIIL. Peter Buckley, a director of the Company
and SIIL, is also chairman and chief executive officer of Caledonia, an English
corporation, which indirectly owns through intermediate entities approximately
one-third of the outstanding ordinary shares of SIIL. Derek Hawton, a director
of the Company and SIIL, is also chairman and chief executive officer of Safren,
a South African corporation, which indirectly controls through intermediate
entities approximately one-third of the outstanding ordinary shares of SIIL.
SIIL has agreed with the Bahamian Government, among other things, to
maintain voting power in the Company of not less than 45% until six months after
the completion of the Paradise Island Expansion and thereafter to control a
majority of the Board of Directors of the Company for an additional five years.
Ownership participation in SIIL is governed by a Subscription and
Shareholders' Agreement. Rosegrove Limited ("Rosegrove") owns approximately
two-thirds of the outstanding equity of SIIL and World Leisure Investments
Limited, a Bermuda corporation ("WLI"), owns the remaining shares. WLI is owned
by WLG, which is owned by a trust for the benefit of the Kerzner family.
Rosegrove is owned indirectly and equally by Safren and Caledonia. Caledonia is
a diversified trading and investment company listed on the London Stock
Exchange. Safren is an industrial conglomerate whose interests span shipping,
warehousing, travel services, casino resorts and retailing. Safren is listed on
the Johannesburg Stock Exchange.
Currently, the officers and directors of the Company, as a group, hold
options granted pursuant to the Plan to acquire 1,019,755 Ordinary Shares, less
than 4% of which were exercisable as of the date of this Prospectus.
<TABLE>
<CAPTION>
PERCENT OF
CLASS OF SHARES OWNER AMOUNT OWNED CLASS
- ----------------------------------------- ------------------------------------- -------------- ---------------
<S> <C> <C> <C>
Ordinary Shares.......................... SIIL 16,112,380 49%
Ordinary Shares.......................... Directors and Officers as a group -- less than 1%
</TABLE>
65
<PAGE>
THE COMMONWEALTH OF THE BAHAMAS
The Commonwealth of The Bahamas had a population of approximately 250,000 in
1994. The Bahamas includes approximately 700 islands, 29 of which are inhabited,
and extends from east of the Florida coast to just north of Cuba and Haiti. Over
60% of the population lives on New Providence Island, where Nassau, the capital
of The Bahamas, is located. The Bahamas first obtained internal self-government
in 1964 and became an independent nation within the British Commonwealth in
1973. The first elections under universal adult suffrage were held in November
1962. The present government was elected in 1992 and succeeded a government that
was in power for over 20 years. The next election is scheduled to be held in
August 1997. The official language is English.
The currency of The Bahamas has been tied to the U.S. dollar since 1970 with
an official exchange rate of U.S. $1.00 = 1.00 Bahamian dollar.
While The Bahamas continues to be the principal tourist destination in the
Caribbean, its tourism industry has been affected by increased competition and
the world recession of the early 1990s. In 1994, tourist arrivals were
approximately 3.4 million, including 1.8 million cruise ship passengers. The
Ministry of Tourism spends over $35 million annually to promote The Bahamas and
in recent years the government has made large investments in the expansion of
both Nassau Harbor and Nassau International Airport.
REPUBLIC OF MAURITIUS
The Republic of Mauritius is a small, multi-ethnic, independent country
consisting of several islands with a land area of about 720 square miles. The
Republic of Mauritius is located in the Indian Ocean and has a population of
approximately 1,100,000. The main island, Mauritius, lies approximately 1,200
miles off the east coast of mainland Africa. The other islands are Rodrigues
Island, the Agalega Islands and the Cargados Carajos Shoals. The climate is
subtropical and generally humid. In 1994, tourist arrivals were approximately
420,000, as compared to approximately 300,000 in 1993. Most residents are
bilingual, speaking English and French. Mauritius has been independent since
1968 and a republic since 1991. Presidential elections are held every five years
and the next election will be held in 1997.
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<PAGE>
DESCRIPTION OF NOTES
GENERAL
The Outstanding Notes were issued and the Exchange Notes are issuable under
an indenture dated as of March 10, 1997 (the "Indenture"), between the Issuers,
the Guarantors, and The Bank of New York, as trustee (the "Trustee"), a copy of
which has been filed as an exhibit to the Registration Statement of which this
Prospectus is a part. Upon the effectiveness of the Registration Statement of
which this Prospectus is a part, the Indenture will be subject to and governed
by the Trust Indenture Act of 1939, as amended. The terms of the Exchange Notes
are identical in all material respects to the terms of the Outstanding Notes
except that the Exchange Notes have been registered under the Securities Act and
are issued free from any covenant regarding registration and except that, if the
Exchange Offer is not consummated by , 1997, the interest rate borne by
the Outstanding Notes will increase 0.5% per annum every 90 days until the
Exchange Offer is consummated (up to a maximum amount of 2.0% per annum). The
Exchange Notes and the Outstanding Notes are treated as one series of Notes
under the Indenture and holders thereof are entitled to the benefit of the
Indenture. Accordingly, unless specifically stated to the contrary, the
following description applies equally to all Notes. The following summaries of
certain material provisions of the Indenture do not purport to be complete, and
where reference is made to particular provisions of the Indenture, such
provisions, including the definitions of certain terms, are incorporated by
reference as a part of such summaries or terms, which are qualified in their
entirety by such reference. The definitions of certain capitalized terms used in
the following summary are set forth below under "--Certain Definitions". Section
references herein are to sections of the Indenture.
The Notes will be senior subordinated, unsecured, general obligations of the
Issuers, limited in aggregate principal amount to $200 million. The Notes will
be subordinate in right of payment to certain other debt obligations of the
Issuers. The Notes will be jointly and severally irrevocably and unconditionally
guaranteed on a senior subordinated basis by each of the Issuers' respective
present and future Subsidiaries (the Guarantors). The obligations of each
Guarantor under its guarantee, however, will be limited in a manner intended to
avoid it being deemed a fraudulent conveyance under applicable law. See
"--Certain Bankruptcy Limitations" below. The term "Subsidiaries" as used
herein, however, does not include Unrestricted Subsidiaries. The Notes will be
issued only in fully registered form, without coupons, in denominations of
$1,000 and integral multiples thereof.
PRINCIPAL, MATURITY AND INTEREST
The Notes will mature on March 15, 2007. The Notes will bear interest at the
rate per annum stated on the cover page hereof from the date of issuance or from
the most recent Interest Payment Date to which interest has been paid or
provided for, payable semi-annually in arrears on March 15 and September 15 of
each year, commencing , to the persons in whose names such Notes are registered
at the close of business on the March 1 or September 1 immediately preceding
such Interest Payment Date. Interest will be calculated on the basis of a
360-day year consisting of twelve 30-day months.
Principal of, premium, if any, and interest and Liquidated Damages, if any,
on the Notes will be payable, and the Notes may be presented for registration of
transfer or exchange, at the office or agency of the Issuers maintained for such
purpose, which office or agency shall be maintained in the Borough of Manhattan,
The City of New York. At the option of the Issuers, payment of interest may be
made by check mailed to the Holders of the Notes at the addresses set forth upon
the registry books of the Issuers; PROVIDED, that all payments with respect to
Global Notes, and Certificated Securities the holders of which have given wire
transfer instructions to the Issuers and the paying agent, will be required to
be made by wire transfer of immediately available funds to the accounts
specified by the holders thereof. No service charge will be made for any
registration of transfer or exchange of Notes, but the Issuers may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. Until otherwise designated by the Issuers, the
Issuers' office or agency will be the corporate trust office of the Issuers
presently located at the office of the Trustee in the Borough of Manhattan, The
City of New York.
SUBORDINATION
The Notes and the Guarantees will be general, unsecured obligations of the
Issuers and the Guarantors, respectively, subordinated in right of payment to
all Senior Debt of the Issuers and the Guarantors,
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respectively. On a pro forma basis, as of the date of this Prospectus, after
giving effect to the Tender Offer, the issuance of the Outstanding Notes and the
application of the proceeds therefrom, Sun International on a consolidated basis
has no Senior Debt outstanding.
The Indenture provides that no payment of any kind or character from any
source may be made by or on behalf of the Issuers or a Guarantor, as applicable,
on account of the principal of, premium, if any, or interest or Liquidated
Damages or Additional Amounts on the Notes (including any repurchases of Notes
and rescission payments), or on account of the redemption provisions of the
Notes, for cash or property (other than from the trust described under "--Legal
Defeasance and Covenant Defeasance"), (i) upon the maturity of any Senior Debt
of the Issuers or such Guarantor by lapse of time, acceleration (unless waived)
or otherwise, unless and until all principal of, premium, if any, the interest
on and any fee or other amount due in respect of such Senior Debt are first paid
in full in cash or Cash Equivalents or otherwise to the extent holders accept
satisfaction of amounts due by settlement in other than cash or Cash
Equivalents, or (ii) in the event of default in the payment of any principal of,
premium, if any, or interest on or any fee or other amount due in respect of
Senior Debt of the Issuers or such Guarantor when it becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration or
otherwise (a "Payment Default"), unless and until such Payment Default has been
cured or waived or otherwise has ceased to exist.
Upon (i) the happening of an event of default (other than a Payment Default)
that permits the holders of Senior Debt to declare such Senior Debt to be due
and payable and (ii) written notice of such event of default given to the
Trustee by the Representative under the Credit Agreement or the holders of an
aggregate of at least $25 million principal amount outstanding of any other
Senior Debt or their representative (a "Payment Blockage Notice"), then, unless
and until such event of default has been cured or waived or otherwise has ceased
to exist, no payment (by set-off or otherwise) may be made by or on behalf of
the Issuers or any Guarantor which is an obligor under such Senior Debt on
account of the principal of, premium, if any, or interest or Liquidated Damages
or Additional Amounts on the Notes, including any repurchases of Notes and
rescission payments, other than payments made from the trust described under
"--Legal Defeasance and Covenant Defeasance"; PROVIDED, HOWEVER, that so long as
the Credit Agreement is in effect, a Payment Blockage Notice may only be given
by the Representative under the Credit Agreement unless otherwise agreed in
writing by the requisite lenders under the Credit Agreement. Notwithstanding the
foregoing, unless the Senior Debt in respect of which such event of default
exists has been declared due and payable in its entirety within 179 days after
the Payment Blockage Notice is delivered as set forth above (the "Payment
Blockage Period") (and such declaration has not been rescinded or waived), at
the end of the Payment Blockage Period, the Issuers and the Guarantors shall be
required to pay all sums not paid to the Holders of the Notes during the Payment
Blockage Period due to the foregoing prohibitions and to resume all other
payments as and when due on the Notes. Any number of Payment Blockage Notices
may be given; PROVIDED, HOWEVER, that (i) not more than one Payment Blockage
Notice shall be given within a period of any 360 consecutive days, and (ii) no
default that existed upon the date of such Payment Blockage Notice or the
commencement of such Payment Blockage Period (whether or not such event of
default is on the same issue of Senior Debt) shall be made the basis for the
commencement of any other Payment Blockage Period, unless such event of default
shall have been cured or waived for a period of not less than 90 days.
Upon any distribution of assets of either Issuer or any Guarantor upon any
dissolution, winding up, total or partial liquidation or reorganization of
either Issuer or a Guarantor, whether voluntary or involuntary, in bankruptcy,
insolvency, receivership or a similar proceeding or upon assignment for the
benefit of creditors or any marshalling of assets or liabilities, (i) the
holders of all Senior Debt of such Issuer or such Guarantor, as applicable, will
first be entitled to receive payment in full in cash or Cash Equivalents or
otherwise to the extent holders accept satisfaction of amounts due by settlement
in other than cash or Cash Equivalents before the Holders are entitled to
receive any payment on account of principal of, premium, if any, and interest
and Liquidated Damages or Additional Amounts on the Notes, including any
repurchases of Notes and rescission payments, other than Junior Securities or
from the trust described under "--Legal Defeasance and Covenant Defeasance", and
(ii) any payment or distribution of assets of such Issuer or such Guarantor of
any kind or character from any source, whether in cash, property or securities,
other than Junior Securities or from the trust described under "--Legal
Defeasance and Covenant Defeasance", to which the Holders or the Trustee on
behalf of the Holders would be entitled (by set-off or otherwise), except
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for the subordination provisions contained in the Indenture, will be paid by the
liquidating trustee or agent or other person making such a payment or
distribution directly to the holders of such Senior Debt or their representative
to the extent necessary to make payment in full in cash or Cash Equivalents on
all such Senior Debt remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Debt.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets (other than, where applicable, Junior Securities or from
the trust described under "--Legal Defeasance and Covenant Defeasance") shall be
received by the Trustee or the Holders at a time when such payment or
distribution is prohibited by the foregoing provisions, such payment or
distribution shall be held in trust for the benefit of the holders of such
Senior Debt, and shall be paid or delivered by the Trustee or such Holders, as
the case may be, to the holders of such Senior Debt remaining unpaid or
unprovided for or to their representative or representatives, or to the trustee
or trustees under any indenture pursuant to which any instruments evidencing any
of such Senior Debt may have been issued, ratably according to the aggregate
principal amounts remaining unpaid on account of such Senior Debt held or
represented by each, for application to the payment of all such Senior Debt
remaining unpaid, to the extent necessary to pay all such Senior Debt in full in
cash or Cash Equivalents or otherwise to the extent holders accept satisfaction
of amounts due by settlement in other than cash or Cash Equivalents after giving
effect to any concurrent payment or distribution to the holders of such Senior
Debt.
No provision contained in the Indenture or the Notes will affect the
obligation of the Issuers and the Guarantors, which is absolute and
unconditional, to pay, when due, principal of, premium, if any, and interest and
Liquidated Damages on the Notes. The subordination provisions of the Indenture
and the Notes will not prevent the occurrence of any Default or Event of Default
under the Indenture or limit the rights of the Trustee or any Holder to pursue
any other rights or remedies with respect to the Notes.
As a result of these subordination provisions, in the event of the
liquidation, bankruptcy, reorganization, insolvency, receivership or similar
proceeding or an assignment for the benefit of the creditors of the Issuers or a
marshalling of assets or liabilities of the Issuers, Holders of the Notes may
receive ratably less than other creditors. The Indenture will limit, subject to
certain financial tests, the amount of additional Indebtedness, including Senior
Debt, that the Issuers and their Subsidiaries can incur. See "Certain
Covenants--Limitation on Incurrence of Additional Indebtedness and Disqualified
Capital Stock".
CERTAIN BANKRUPTCY LIMITATIONS
Each Issuer is a holding company, conducting all its business through
Subsidiaries, which have guaranteed or will guarantee the Issuers' obligations
with respect to the Notes, and Unrestricted Subsidiaries. Holders of the Notes
will be direct creditors of each Guarantor by virtue of its guarantee.
Nonetheless, in the event of the bankruptcy or financial difficulty of a
Guarantor, such Guarantor's obligations under its guarantee may be subject to
review and avoidance under state, federal and foreign fraudulent transfer laws.
Among other things, such obligations may be avoided if a court concludes that
such obligations were incurred for less than reasonably equivalent value or fair
consideration at a time when the Guarantor was insolvent, was rendered
insolvent, or was left with inadequate capital to conduct its business. A court
would likely conclude that a Guarantor did not receive reasonably equivalent
value or fair consideration to the extent that the aggregate amount of its
liability on its guarantee exceeds the economic benefits it received in the
issuance of Outstanding Notes and the Exchange Offer. The obligations of each
Guarantor under its guarantee will be limited in a manner intended to cause it
not to be a fraudulent conveyance under applicable law, although no assurance
can be given that a court would give the Holder the benefit of such provision.
See "Risk Factors--Fraudulent Transfer Considerations."
If the obligations of a Guarantor under its guarantee were avoided, Holders
of Notes would have to look to the assets of any remaining Guarantors for
payment. There can be no assurance in that event that such assets would suffice
to pay the outstanding principal and interest on the Notes.
OPTIONAL REDEMPTION
The Issuers will not have the right to redeem any Notes prior to March 15,
2002 (other than out of the Net Cash Proceeds of a Public Equity Offering, as
described in the next following paragraph, or pursuant to a Required Regulatory
Redemption or an Optional Tax Redemption). The Notes will be redeemable for cash
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at the option of the Issuers, in whole or in part, at any time on or after March
15, 2002, upon not less than 30 days' nor more than 60 days' notice to each
Holder of Notes, at the following redemption prices (expressed as percentages of
the principal amount) if redeemed during the 12-month period commencing March 15
of the years indicated below, in each case (subject to the right of Holders of
record on a Record Date to receive interest due on an Interest Payment Date that
is on or prior to such Redemption Date) together with accrued and unpaid
interest and Liquidated Damages, if any, thereon to the Redemption Date:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---------------------- -----------
<S> <C>
2002.................. 104.500%
2003.................. 103.000%
2004.................. 101.500%
2005 and thereafter... 100.000%
</TABLE>
On or prior to March 15, 2000, upon a Public Equity Offering of Ordinary
Shares for cash of Sun International, up to $70 million aggregate principal
amount of the Notes may be redeemed at the option of the Issuers within 120 days
of such Public Equity Offering, on not less than 30 days, but not more than 60
days, notice to each Holder of the Notes to be redeemed, with cash from the Net
Cash Proceeds of such Public Equity Offering, at 109% of the principal amount
thereof (subject to the right of Holders of record on a Record Date to receive
interest due on an Interest Payment Date that is on or prior to such Redemption
Date), together with accrued and unpaid interest and Liquidated Damages, if any,
to the date of redemption; PROVIDED, HOWEVER, that immediately following each
such redemption not less than $130 million aggregate principal amount of the
Notes are outstanding.
REQUIRED REGULATORY REDEMPTION
If a Holder or a beneficial owner of a Note is required by any regulatory
body responsible for a gaming license held by Sun International or a Subsidiary
of Sun International (a "Gaming Authority") to be found suitable to hold the
Notes, the Holder shall apply for a finding of suitability within 30 days after
a Gaming Authority requests or sooner if so required by such Gaming Authority.
The applicant for a finding of suitability must pay all costs of the
investigation for such finding of suitability. If a Holder or beneficial owner
is required to be found suitable to hold the Notes and is not found suitable by
a Gaming Authority, the Holder shall, to the extent required by applicable law,
dispose of his Notes within 30 days or within that time prescribed by a Gaming
Authority, whichever is earlier. If the Holder fails to dispose of its Notes
within such time period, the Issuers may, at their option, redeem the Holder's
Notes (a "Required Regulatory Redemption") at, depending on applicable law, (i)
the principal amount thereof, together with accrued and unpaid interest and
Liquidated Damages, if any, to the date of the finding of unsuitability by a
Gaming Authority, (ii) the amount that such Holder paid for the Notes, (iii) the
fair market value of the Notes, (iv) the lowest of clauses (i), (ii) and (iii),
or (v) such other amount as may be determined by the appropriate Gaming
Authority.
PAYMENT OF ADDITIONAL AMOUNTS
The Issuers will, subject to certain limitations and exceptions (as set
forth below), pay to each Holder such amounts (the "Additional Amounts") as may
be necessary in order that every net payment or deemed payment of (i) principal,
premium, Liquidated Damages and interest, if any, with respect to a Note, or
(ii) net proceeds on the sale or exchange of a Note, each after deduction or
withholding for or on account of any taxes, duties, assessments or governmental
charges of whatever nature imposed or levied by or on behalf of the government
of The Bahamas or any authority thereof or therein having power to tax, will
result in the receipt by the Holders of the amounts that would have been
received by them had no such deduction or withholding been required; PROVIDED,
HOWEVER, that no such Additional Amounts shall be payable in respect of any Note
for:
(1) any tax, duty, assessment, or other governmental charge which would not
have been imposed but for the fact that such Holder:
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(a) is a resident, domiciliary or national of, or engaged in business or
maintains a permanent establishment or was physically present in, The
Bahamas or any political subdivision thereof or therein or otherwise has
some connection with The Bahamas other than the mere ownership of, or
receipt of payment under, such Note;
(b) presented such Note for payment in The Bahamas or any political
subdivision thereof or therein, unless such Note could not have been
presented for payment elsewhere; or
(c) presented such Note for payment more than 30 days after the date on
which the payment in respect of such Note became due and payable or provided
for, whichever is later, except to the extent that the Holder would have
been entitled to such Additional Amounts if it had presented such Note for
payment on any day within such period of 30 days;
(2) any estate, inheritance, gift, sales, transfer, or similar tax,
assessment or other governmental charge or any taxes, duties, assessments or
other governmental charges that are payable otherwise than by deduction or
withholding from payments on the Notes;
(3) any tax, duty, assessment, or other governmental charge imposed on a
Holder that is not the beneficial owner of a Note to the extent that the
beneficial owner would not have been entitled to the payment of Additional
Amounts had the beneficial owner directly held the Note; or
(4) any combination of items (1), (2) and (3).
Whenever there is mentioned, in any context, the payment of the principal of
or any premium or interest on, or in respect of, any Note or the net proceeds
received on the sale or exchange of any Note, such mention shall be deemed to
include mention of the payment of Additional Amounts provided for in the
Indenture to the extent that, in such context, Additional Amounts are, were or
would be payable in respect thereof pursuant to the Indenture.
Without limiting a Holder's right to receive payment of Additional Amounts,
in the event that Additional Amounts actually paid with respect to the Notes are
based on rates of deduction or withholding of Bahamian taxes in excess of the
appropriate rate applicable to the Holder of such Notes and, as a result
thereof, such Holder of Notes is entitled to make a claim for a refund or credit
of such excess, then such Holder of Notes shall, by accepting the Notes and
receiving a payment of Additional Amounts, be deemed to have assigned and
transferred all right, title and interest to any such claim for a refund or
credit of such excess to the Issuers. By making such assignment, the Holder of
Notes makes no representation or warranty that the Issuers will be entitled to
receive such claim for a refund or credit and incurs no other obligation with
respect thereto.
OPTIONAL TAX REDEMPTION
The Notes may be redeemed at the option of the Issuers, in whole but not in
part, upon not less than 30 nor more than 60 days' notice given as provided in
the Indenture, at any time at a redemption price equal to the principal amount
thereof, plus accrued and unpaid interest, if any, thereon, plus Liquidated
Damages, if any, to the date fixed for redemption if, as a result of any change
in or amendment to the laws, treaties, rulings or regulations of The Bahamas, or
of any political subdivision or taxing authority thereof or therein, or any
change in the official position of the applicable taxing authority regarding the
application or interpretation of such laws, treaties, rulings or regulations
(including a holding judgment or order of a court of competent jurisdiction) or
any execution thereof or amendment thereto, which is enacted into law or
otherwise becomes effective after the date of this Prospectus, either Issuer is
or would be required on the next succeeding interest payment date to pay
Additional Amounts on the Notes as a result of the imposition of a Bahamian
withholding tax and the payment of such Additional Amounts cannot be avoided by
the use of any reasonable measures available to the Issuers which do not cause
the Issuers to incur any material costs. The Issuers shall also pay to holders
on the redemption date any Additional Amounts then due and which will become due
as a result of the redemption or would otherwise be payable.
Prior to the publication of any notice of redemption in accordance with the
foregoing, the Issuers shall deliver to the Trustee an officer's certificate
stating that (i) the payment of Additional Amounts cannot be avoided by the use
of any reasonable measures available to the Issuers which do not cause the
Issuers to
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incur any material costs and (ii) the Issuers are entitled to effect such
redemption based on the written, substantially unqualified opinion of counsel,
which counsel shall be reasonably acceptable to the Trustee, that the Issuers
have or will become obligated to pay Additional Amounts as a result of such
change or amendment. The notice, once delivered by the Issuers to the Trustee,
will be irrevocable.
SELECTION AND NOTICE
In the case of a partial redemption (other than a Required Regulatory
Redemption), the Trustee shall select the Notes or portions thereof for
redemption on a PRO RATA basis, by lot or in such other manner it deems
appropriate and fair. The Notes may be redeemed in part in multiples of $1,000
only.
The Notes will not have the benefit of any sinking fund.
Except as required by a Gaming Authority with respect to a Required
Regulatory Redemption, notice of any redemption will be sent, by first class
mail, at least 30 days and not more than 60 days prior to the date fixed for
redemption to the Holder of each Note to be redeemed to such Holder's last
address as then shown upon the registry books of the Registrar. Any notice which
relates to a Note to be redeemed in part only must state the portion of the
principal amount equal to the unredeemed portion thereof and must state that on
and after the date of redemption, upon surrender of such Note, a new Note or
Notes in a principal amount equal to the unredeemed portion thereof will be
issued. On and after the date of redemption, interest will cease to accrue on
the Notes or portions thereof called for redemption, unless the Issuers default
in the payment thereof.
CERTAIN COVENANTS
Set forth below are certain covenants contained in the Indenture. During any
period of time that (i) the Notes have Investment Grade Status and (ii) no
Default or Event of Default has occurred and is continuing under the Indenture
with respect to the Notes, the Issuers and their Subsidiaries will not be
subject to the provisions of the Indenture with respect to the Notes described
below under "--Limitation on Incurrence of Additional Indebtedness and
Disqualified Capital Stock", "--Limitation on Restricted Payments" and "--
Limitation on Sale of Assets and Subsidiary Stock" (collectively, the "Suspended
Covenants"). In the event that the Issuers and their Subsidiaires are not
subject to the Suspended Covenants with respect to the Notes for any period of
time as a result of the preceding sentence and, subsequently, either of the
Rating Agencies withdraws its rating or assigns the Notes a rating below the
required Investment Grade Ratings, then the Issuers and their Subsidiaries will
thereafter again be subject to the Suspended Covenants for the benefit of the
Notes and compliance with the Suspended Covenant with respect to Restricted
Payments made after the time of such withdrawal or assignment will be calculated
in accordance with the terms of the covenant described below under "--Limitation
on Restricted Payments" as if such covenant had been in effect during the entire
period of time from the Issue Date with respect to the Notes.
REPURCHASE OF NOTES AT THE OPTION OF THE HOLDER UPON A CHANGE OF CONTROL
The Indenture provides that in the event that a Change of Control Triggering
Event has occurred, each Holder of Notes will have the right, at such Holder's
option, pursuant to an irrevocable and unconditional offer by the Issuers (the
"Change of Control Offer"), to require the Issuers to repurchase all or any part
of such Holder's Notes (provided, that the principal amount of such Notes must
be $1,000 or an integral multiple thereof) on a date (the "Change of Control
Purchase Date") that is no later than 45 Business Days after the occurrence of
such Change of Control Triggering Event, at a cash price equal to 101% of the
principal amount thereof (the "Change of Control Purchase Price"), together with
accrued and unpaid interest and Liquidated Damages, if any, to the Change of
Control Purchase Date. The Change of Control Offer shall be made within 20
Business Days following a Change of Control Triggering Event and shall remain
open for at least 20 Business Days following its commencement (the "Change of
Control Offer Period"). Upon expiration of the Change of Control Offer Period,
the Issuers promptly shall purchase all Notes properly tendered in response to
the Change of Control Offer.
As used herein, a "Change of Control Triggering Event" shall be deemed to
occur if either of the Rating Agencies shall downgrade or withdraw their rating
of the Notes as a result of or, in any case, within 90 days of, a Change of
Control. A "Change of Control" means (i) Sun International ceases to be the
"beneficial owner," directly or indirectly, of 100% of the Equity Interests of
SINA; (ii) any sale, transfer or other
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conveyance, whether direct or indirect, of all or substantially all of the
assets, on a consolidated basis, of Sun International or SINA, in one
transaction or a series of related transactions (in each case other than to a
person that is a Permitted Holder); (iii) any merger or consolidation of Sun
International with or into any person if, immediately after giving effect to
such transaction, any "person" or "group" (as such terms are used for purposes
of Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable)
(other than a Permitted Holder) is or becomes the "beneficial owner", directly
or indirectly, of more than 50% of the total voting power in the aggregate
normally entitled to vote in the election of directors, managers, or trustees,
as applicable, of the surviving entity or entities; (iv) any "person" or "group"
(as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange
Act, whether or not applicable) (other than a Permitted Holder) is or becomes
the "beneficial owner", directly or indirectly, of more than 50% of the total
voting power in the aggregate of all classes of Capital Stock of Sun
International then outstanding normally entitled to vote in elections of
directors; (v) during any period of 12 consecutive months after the Issue Date,
individuals who at the beginning of any such 12-month period constituted the
Board of Directors of Sun International or SINA (together with any new directors
whose election by such Board or whose nomination for election by the
shareholders of Sun International or SINA, as applicable, was approved by a vote
of a majority of the directors then still in office who were either directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of Sun International or SINA then in office; or (vi) the
adoption of a plan relating to the liquidation or dissolution of either of the
Issuers.
On or before the Change of Control Purchase Date, the Issuers will (i)
accept for payment Notes or portions thereof properly tendered pursuant to the
Change of Control Offer, (ii) deposit with the Paying Agent cash sufficient to
pay the Change of Control Purchase Price (together with accrued and unpaid
interest and Liquidated Damages, if any) of all Notes so tendered and (iii)
deliver to the Trustee Notes so accepted together with an Officers' Certificate
listing the Notes or portions thereof being purchased by the Issuers. The Paying
Agent promptly will pay the Holders of Notes so accepted an amount equal to the
Change of Control Purchase Price (together with accrued and unpaid interest and
Liquidated Damages, if any), and the Trustee promptly will authenticate and
deliver to such Holders a new Note equal in principal amount to any unpurchased
portion of the Note surrendered. Any Notes not so accepted will be delivered
promptly by the Issuers to the Holder thereof. The Issuers publicly will
announce the results of the Change of Control Offer on or as soon as practicable
after the Change of Control Purchase Date.
The phrase "all or substantially all" of the assets of Sun International or
SINA will likely be interpreted under applicable state law and will be dependent
upon particular facts and circumstances. As a result, there may be a degree of
uncertainty in ascertaining whether a sale or transfer of "all or substantially
all" of the assets of Sun International or SINA has occurred.
The Issuers' ability to pay such purchase price is, and may in the future
be, limited by the terms of the Existing Revolving Credit Facility, as the same
may be amended, or other agreements relating to indebtedness that constitute
Senior Debt. The occurrence of certain of the events that would constitute a
Change of Control may constitute a default under the Existing Revolving Credit
Facility, as the same may be amended. Future indebtedness of the Issuers may
contain prohibitions of certain events which would constitute a Change of
Control or require the Issuers to offer to redeem such indebtedness upon a
Change of Control. Moreover, the exercise by the Holders of Notes of their right
to require the Issuers to purchase the Notes could cause a default under such
future indebtedness, even if the Change of Control itself does not, due to the
financial effect of such purchase on the Issuers. Finally, the Issuers' ability
to pay cash to Holders of Notes upon a purchase may be limited by the Issuers'
then existing financial resources. There can be no assurance that sufficient
funds will be available when necessary to make any required purchases.
Any Change of Control Offer will be made in compliance with any and all
applicable laws, rules and regulations, including, if applicable, Regulation 14E
under the Exchange Act and the rules thereunder and any and all other applicable
Federal and state securities laws.
LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS AND DISQUALIFIED CAPITAL
STOCK
The Indenture provides that, except as set forth below in this covenant, the
Issuers and the Guarantors will not, and will not permit any of their
Subsidiaries to, individually or collectively, directly or indirectly,
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issue, assume, guaranty, incur, become directly or indirectly liable with
respect to (including as a result of an Acquisition), or otherwise become
responsible for, contingently or otherwise (individually and collectively, to
"incur" or, as appropriate, an "incurrence"), any Indebtedness or any
Disqualified Capital Stock (including Acquired Indebtedness), except Permitted
Indebtedness. Notwithstanding the foregoing, if (i) no Event of Default shall
have occurred and be continuing at the time of, or would occur after giving
effect on a pro forma basis to, such incurrence of Indebtedness or Disqualified
Capital Stock and (ii) on the date of such incurrence (the "Incurrence Date"),
the Consolidated Coverage Ratio of Sun International for the Reference Period
immediately preceding the Incurrence Date, after giving effect on a pro forma
basis to such incurrence of such Indebtedness or Disqualified Capital Stock and,
to the extent set forth in the definition of Consolidated Coverage Ratio, the
use of proceeds thereof, would be at least 2.0 to l (the "Debt Incurrence
Ratio"), then the Issuers and the Guarantors may incur such Indebtedness or
Disqualified Capital Stock.
Acquired Indebtedness shall be deemed to have been incurred at the time the
person who incurred such Indebtedness becomes a Subsidiary of either of the
Issuers (including upon designation of any Unrestricted Subsidiary or other
person as a Subsidiary) or is merged with or into or consolidated with either of
the Issuers or a Subsidiary of either of the Issuers, as applicable.
LIMITATION ON RESTRICTED PAYMENTS
The Indenture provides that the Issuers and the Guarantors will not, and
will not permit any of their Subsidiaries to, individually or collectively,
directly or indirectly, make any Restricted Payment if, after giving effect to
such Restricted Payment on a pro forma basis, (i) a Default or an Event of
Default shall have occurred and be continuing, (ii) Sun International is not
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Debt Incurrence Ratio in the covenant "Limitation on Incurrence of Additional
Indebtedness and Disqualified Capital Stock," or (iii) the aggregate amount of
all Restricted Payments made by Sun International and its Subsidiaries,
including after giving effect to such proposed Restricted Payment, from and
after the Issue Date, would exceed the sum of (a) 50% of the aggregate
Consolidated Net Income of Sun International for the period (taken as one
accounting period), commencing January 1, 1996 to and including the last day of
the fiscal quarter ended immediately prior to the date of each such calculation
(or, in the event Consolidated Net Income for such period is a deficit, then
minus 100% of such deficit) (not giving any pro forma effect to the Merger for
periods prior to its consummation), plus (b) the aggregate Net Cash Proceeds
received by Sun International from the sale of its Qualified Capital Stock
(other than (i) to a Subsidiary of Sun International and (ii) to the extent
applied in connection with a Qualified Exchange) after the Issue Date, plus (c)
$50 million.
The immediately preceding paragraph, however, will not prohibit (x) a
Qualified Exchange, (y) the payment of any dividend on Capital Stock within 60
days after the date of its declaration if such dividend could have been made on
the date of such declaration in compliance with the foregoing provisions and (z)
the redemption or repurchase of any Capital Stock or Indebtedness of the Issuers
or their Subsidiaries (other Capital Stock or Indebtedness held by SIIL, its
shareholders or Permitted Holders), if the holder or beneficial owner of such
Capital Stock or Indebtedness is required to be found suitable by any Gaming
Authority to own or vote any such security and is found unsuitable by any such
Gaming Authority to so own or vote such security. The full amount of any
Restricted Payment made pursuant to the foregoing clauses (y) and (z) (but not
pursuant to clause (x)) of the immediately preceding sentence, however, will be
deducted in the calculation of the aggregate amount of Restricted Payments
available to be made referred to in clause (iii) of the immediately preceding
paragraph.
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LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES
The Indenture provides that the Issuers and Guarantors will not, and will
not permit any of their Subsidiaries to, individually or collectively, directly
or indirectly, create, assume or suffer to exist any consensual restriction on
the ability of any Subsidiary of Sun International, SINA or such Guarantors to
pay dividends or make other distributions to or on behalf of, or to pay any
obligation to or on behalf of, or otherwise to transfer assets or property to or
on behalf of, or make or pay loans or advances to or on behalf of, Sun
International, SINA, the Guarantors or any Subsidiary of any of them, or to
guaranty the Notes, except (a) restrictions imposed by the Notes or the
Indenture, (b) restrictions imposed by applicable law, (c) existing restrictions
under specified Indebtedness outstanding on the Issue Date, (d) restrictions
under any Acquired Indebtedness not incurred in violation of the Indenture or
any agreement relating to any property, asset, or business acquired by Sun
International or any of its Subsidiaries, which restrictions in each case
existed at the time of acquisition, were not put in place in connection with or
in anticipation of such acquisition and are not applicable to any person, other
than the person acquired, or to any property, asset or business, other than the
property, assets and business so acquired, (e) any such restriction or
requirement imposed by Indebtedness incurred under paragraph (a) of the
definition of "Permitted Indebtedness", provided such restriction or requirement
is no more restrictive than that imposed by the Credit Agreement as of the Issue
Date, (f) restrictions with respect solely to a Subsidiary of Sun International
imposed pursuant to a binding agreement that has been entered into for the sale
or disposition of all or substantially all of the Equity Interests or assets of
such Subsidiary, provided such restrictions apply solely to the Equity Interests
or assets of such Subsidiary that are being sold, (g) restrictions on transfer
contained in FF&E Indebtedness incurred pursuant to paragraph (c) of the
definition of "Permitted Indebtedness", provided such restrictions relate only
to the transfer of the property acquired with the proceeds of such FF&E
Indebtedness, and (h) in connection with and pursuant to Permitted Refinancings,
replacements of restrictions imposed pursuant to clauses (a), (c) or (d) of this
paragraph that are not more restrictive than those being replaced and do not
apply to any other person or assets than those that would have been covered by
the restrictions in the Indebtedness so refinanced. Notwithstanding the
foregoing, neither (a) customary provisions restricting subletting or assignment
of any lease, license or contract entered into in the ordinary course of
business, consistent with industry practice, nor (b) Liens permitted under the
terms of the Indenture shall in and of themselves be considered a restriction on
the ability of the applicable Subsidiary to transfer such agreement or assets,
as the case may be.
LIMITATION ON LAYERING INDEBTEDNESS
The Indenture provides that the Issuers and the Guarantors will not,
individually or collectively, directly or indirectly, incur, or suffer to exist
any Indebtedness that is subordinate in right of payment to any other
Indebtedness of either Issuer or any Guarantor unless, by its terms, such
Indebtedness is subordinate in right of payment to, or ranks PARI PASSU with,
the Notes or the Guarantee, as applicable.
LIMITATION ON LIENS SECURING INDEBTEDNESS
The Indenture provides that the Issuers and the Guarantors will not, and
will not permit any of their Subsidiaries to, individually or collectively,
create, incur, assume or suffer to exist any Lien of any kind, other than
Permitted Liens, upon any of their respective assets now owned or acquired on or
after the date of the Indenture or upon any income or profits therefrom securing
any Indebtedness of the Issuers, the Guarantors or any of their Subsidiaries
other than Senior Debt, unless the Issuers and Guarantors each provide, and
cause their Subsidiaries to provide, concurrently therewith, that the Notes are
equally and ratably so secured, provided that, if such Indebtedness is
Subordinated Indebtedness, the Lien securing such Subordinated Indebtedness
shall be subordinate and junior to the Lien securing the Notes with the same
relative priority as such Subordinated Indebtedness shall have with respect to
the Notes.
LIMITATION ON SALE OF ASSETS AND SUBSIDIARY STOCK
The Indenture provides that the Issuers and the Guarantors will not, and
will not permit any of their Subsidiaries to, individually or collectively, in
one or a series of related transactions, convey, sell, transfer, assign or
otherwise dispose of, directly or indirectly, any of its property, business or
assets, including by merger or consolidation (in the case of a Guarantor or a
Subsidiary of Sun International or SINA), and including any sale or other
transfer or issuance of any Equity Interests of any Subsidiary of Sun
International or SINA, whether by Sun International, SINA or a Subsidiary of
either or through the issuance, sale or transfer of Equity Interests by a
Subsidiary of Sun International or SINA, and including any sale and
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leaseback transaction (an "Asset Sale"), unless (i)(a) within 360 days after the
date of such Asset Sale, the Net Cash Proceeds therefrom (the "Asset Sale Offer
Amount") are applied to the optional redemption of the Notes in accordance with
the terms of the Indenture or to the repurchase of the Notes pursuant to an
irrevocable, unconditional cash offer (the "Asset Sale Offer") to repurchase
Notes at a purchase price of 100% of principal amount (the "Asset Sale Offer
Price") together with accrued and unpaid interest and Liquidated Damages, if
any, to the date of payment, made within 330 days of such Asset Sale or (b)
within 330 days following such Asset Sale, the Asset Sale Offer Amount is (1)
invested in assets and property (other than notes, bonds, obligation and
securities) which in the good faith judgment of the Board will immediately
constitute or be a part of a Related Business of Sun International, SINA or such
Subsidiary (if it continues to be a Subsidiary) immediately following such
investment or (2) used to permanently reduce Senior Debt (provided that in the
case of a revolver or similar arrangement that makes credit available, such
commitment is so permanently reduced by such amount), (ii) no more than the
greater of (A) $20 million or (B) 15% of the total consideration for such Asset
Sale or series of related Asset Sales consists of consideration other than cash
or Cash Equivalents; PROVIDED HOWEVER, that more than 15% of the total
consideration may consist of consideration other than cash or Cash Equivalents
if (A) the portion of such consideration that does not consist of cash or Cash
Equivalents consists of assets of a type ordinarily used in the operation of a
Related Business (including Capital Stock of a person that becomes a wholly
owned Subsidiary and that holds such assets) to be used by the Issuers or a
Subsidiary in the conduct of a Related Business, (B) the terms of such Asset
Sale have been approved by a majority of the members of the Board of Directors
of Sun International having no personal stake in such transaction, and (C) if
the value of the assets being disposed of by the Issuers or such Subsidiary in
such transaction (as determined in good faith by such members of the Board of
Directors) is at least $10 million, the Board of Directors of Sun International
has received a written opinion of a nationally recognized investment banking
firm to the effect that such Asset Sale is fair, from a financial point of view,
to Sun International and Sun International has delivered a copy of such opinion
to the Trustee, (iii) no Default or Event of Default shall have occurred and be
continuing at the time of, or would occur after giving effect, on a pro forma
basis, to, such Asset Sale, and (iv) if the value of the assets disposed of is
at least $5 million, the Board of Directors of Sun International determines in
good faith that Sun International or such Subsidiary, as applicable, receives
fair market value for such Asset Sale (as evidenced by a resolution of the Board
of Directors).
The Indenture provides that an acquisition of Notes pursuant to an Asset
Sale Offer may be deferred until the accumulated Net Cash Proceeds from Asset
Sales not applied to the uses set forth in (i) above (the "Excess Proceeds")
exceeds $20 million and that each Asset Sale Offer shall remain open for 20
Business Days following its commencement (the "Asset Sale Offer Period"). Upon
expiration of the Asset Sale Offer Period, the Issuers shall apply the Asset
Sale Offer Amount plus an amount equal to accrued and unpaid interest and
Liquidated Damages, if any, to the purchase of all Notes properly tendered (on a
PRO RATA basis if the Asset Sale Offer Amount is insufficient to purchase all
Notes so tendered) at the Asset Sale Offer Price (together with accrued and
unpaid interest and Liquidated Damages, if any). To the extent that the
aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than
the Asset Sale Offer Amount, the Issuers may use any remaining Net Cash Proceeds
for general corporate purposes as otherwise permitted by the Indenture and
following the consummation each Asset Sale Offer the Excess Proceeds amount
shall be reset to zero. For purposes of (ii) above, total consideration received
means the total consideration received for such Asset Sales minus the amount of
(a) Senior Debt assumed by a transferee which assumption permanently reduces the
amount of Indebtedness outstanding on the Issue Date or permitted pursuant to
clause (a) or (c) of the definition of Permitted Indebtedness (including that in
the case of a revolver or similar arrangement that makes credit available, such
commitment is so reduced by such amount), (b) FF&E Indebtedness secured solely
by the assets sold and assumed by a transferee and (c) property that within 30
days of such Asset Sale is converted into Cash or Cash Equivalents.
Notwithstanding the foregoing provisions of the prior paragraph:
(i) Sun International and its Subsidiaries may, in the ordinary course
of business, convey, sell, transfer, assign or otherwise dispose of
inventory acquired and held for resale in the ordinary course of business;
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(ii) Sun International and its Subsidiaries may convey, sell, transfer,
assign or otherwise dispose of assets pursuant to and in accordance with the
provisions of the covenant "Limitation on Merger, Sale or Consolidation";
(iii) Sun International and its Subsidiaries may sell or dispose of
damaged, worn out or other obsolete property in the ordinary course of
business so long as such property is no longer necessary for the proper
conduct of the business of Sun International or such Subsidiary, as
applicable;
(iv) the Issuers and the Subsidiaries may convey, sell, transfer, assign
or otherwise dispose of assets to any Issuer or any of their wholly owned
Guarantors; and
(v) the Issuers may sell their Equity Interests in Sun France and
certain non-strategic real estate on Paradise Island and in Atlantic City.
All Net Cash Proceeds from an Event of Loss shall be invested, used for
prepayment of Senior Debt, or used to repurchase Notes, all within the period
and as otherwise provided above in clauses (i)(a) or (i)(b) of the first
paragraph of this covenant.
In addition to the foregoing, Sun International will not, and will not
permit any Subsidiary to, directly or indirectly make any Asset Sale of any of
the Equity Interests of any Subsidiary except (i) pursuant to an Asset Sale of
all the Equity Interests of such Subsidiary or (ii) pursuant to an Asset Sale of
common stock with no preferences or special rights or privileges and with no
redemption or prepayment provisions, PROVIDED that after such sale the Issuers
or their Subsidiaries own at least 50.1% of the voting and economic interests of
the Capital Stock of such Subsidiary.
Any Asset Sale Offer shall be made in compliance with all applicable laws,
rules, and regulations, including, if applicable, Regulation 14E of the Exchange
Act and the rules and regulations thereunder and all other applicable Federal
and state securities laws.
LIMITATION ON TRANSACTIONS WITH AFFILIATES
The Indenture provides that none of the Issuers or any of their Subsidiaries
will be permitted on or after the Issue Date to enter into or suffer to exist
any contract, agreement, arrangement or transaction with any Affiliate (an
"Affiliate Transaction"), or any series of related Affiliate Transactions (other
than Exempted Affiliate Transactions) (i) unless it is determined that the terms
of such Affiliate Transaction are fair and reasonable to Sun International or
such Subsidiary, as applicable, and no less favorable to Sun International or
such Subsidiary, as applicable, than could have been obtained in an arm's length
transaction with a non-Affiliate and (ii) if involving consideration to either
party in excess of $2 million, unless such Affiliate Transaction(s) has been
approved by a majority of the members of the Board of Directors that are
disinterested in such transaction and (iii) if involving consideration to either
party in excess of $15 million, unless in addition to the foregoing Sun
International, prior to the consummation thereof, obtains a written favorable
opinion as to the fairness of such transaction to Sun International from a
financial point of view from an independent investment banking firm of national
reputation.
LIMITATION ON PAYMENTS FOR CONSENT
The Indenture provides that none of the Issuers or any of their Subsidiaries
or Unrestricted Subsidiaries shall, directly or indirectly, pay or cause to be
paid any consideration, whether by way of interest, fee or otherwise, to any
Holder of any Notes for, or as an inducement to, any consent, waiver or
amendment of any of the terms or provisions of the Indenture or the Notes unless
such consideration is offered to be paid or agreed to be paid to all Holders of
the Notes which so consent, waive or agree to amend in the time frame set forth
in the solicitation documents relating to such consent, waiver or agreement,
which solicitation documents must be mailed to all Holders of the Notes prior to
the expiration of the solicitation.
LIMITATION ON MERGER, SALE OR CONSOLIDATION
The Indenture provides that neither of the Issuers will, directly or
indirectly, consolidate with or merge with or into another person or sell,
lease, convey or transfer all or substantially all of its assets (computed as to
each Issuer on a consolidated basis), whether in a single transaction or a
series of related transactions, to another Person or group of affiliated Persons
or adopt a Plan of Liquidation, unless (i) either (a) Sun International or SINA,
as applicable, is the resulting surviving or transferee entity (the "Successor
Company") or (b) the Successor Company or, in the case of a Plan of Liquidation,
the entity which receives the
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greatest value from such Plan of Liquidation is a corporation organized under
the laws of the Commonwealth of the Bahamas (in the case of Sun International
only) or the United States, any state thereof or the District of Columbia and
expressly assumes by supplemental indenture all of the obligations of Sun
International or SINA, as applicable, in connection with the Notes and the
Indenture; (ii) no Default or Event of Default shall exist or shall occur
immediately after giving effect on a pro forma basis to such transaction; (iii)
immediately after giving effect to such transaction on a pro forma basis, the
Consolidated Net Worth of the Successor Company or, in the case of a Plan of
Liquidation, the entity which receives the greatest value from such Plan of
Liquidation is at least equal to the Consolidated Net Worth of Sun International
or SINA, as applicable, immediately prior to such transaction; and (iv)
immediately after giving effect to such transaction on a pro forma basis, the
Successor Company or, in the case of a Plan of Liquidation, the entity which
receives the greatest value from such Plan of Liquidation would immediately
thereafter be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Debt Incurrence Ratio set forth in the covenant "Limitation on
Incurrence of Additional Indebtedness and Disqualified Capital Stock".
Upon any consolidation or merger or any transfer of all or substantially all
of the assets of Sun International or SINA, as applicable, or consummation of a
Plan of Liquidation in accordance with the foregoing, the successor corporation
formed by such consolidation or into which Sun International or SINA is merged
or to which such transfer is made or, in the case of a Plan of Liquidation, the
entity which receives the greatest value from such Plan of Liquidation shall
succeed to, and be substituted for, and may exercise every right and power of,
Sun International or SINA, as applicable, under the Indenture with the same
effect as if such successor corporation had been named therein as Sun
International or SINA, as applicable, and Sun International or SINA, as
applicable, shall be released from the obligations under the Notes and the
Indenture except with respect to any obligations that arise from, or are related
to, such transaction.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise) of all or substantially all of the properties and assets of one or
more Subsidiaries, the interest of Sun International or SINA, as applicable, in
which constitutes all or substantially all of the properties and assets of Sun
International or SINA, as applicable, shall be deemed to be the transfer of all
or substantially all of the properties and assets of Sun International, or SINA,
as applicable.
LIMITATION ON LINES OF BUSINESS
The Indenture provides that none of the Issuers or any of their Subsidiaries
shall directly or indirectly engage to any substantial extent in any line or
lines of business activity other than that which, in the good faith judgment of
the Board of Directors of Sun International, is a Related Business.
FUTURE SUBSIDIARY GUARANTORS
The Indenture provides that all present and future Subsidiaries of either
Issuer (including any Unrestricted Subsidiary upon being designated a
Subsidiary) will jointly and severally guaranty irrevocably and unconditionally
all principal, premium, if any, and interest on the Notes on a senior
subordinated basis.
RELEASE OF GUARANTORS
The Indenture provides that no Guarantor shall consolidate or merge with or
into (whether or not such Guarantor is the surviving person) another person
unless (i) subject to the provisions of the following paragraph, the person
formed by or surviving any such consolidation or merger (if other than such
Guarantor) assumes all the obligations of such Guarantor pursuant to a
supplemental indenture in form reasonably satisfactory to the Trustee, pursuant
to which such person shall unconditionally guarantee, on a senior subordinated
basis, all of such Guarantor's obligations under such Guarantor's guarantee and
the Indenture on the terms set forth in the Indenture; and (ii) immediately
before and immediately after giving effect to such transaction on a pro forma
basis, no Default or Event of Default shall have occurred or be continuing.
Notwithstanding the foregoing, upon the sale or disposition (whether by
merger, stock purchase, asset sale or otherwise) of a Guarantor of all or
substantially all of its assets to an entity which is not a Subsidiary or the
designation of a Subsidiary as an Unrestricted Subsidiary, which transaction is
otherwise in compliance with the Indenture (including, without limitation, the
provisions of the covenant "Limitations on Sale of Assets and Subsidiary
Stock"), such Guarantor will be deemed released from its obligations under its
Guarantee of the Notes; PROVIDED, HOWEVER, that any such termination shall occur
only to the extent that all
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obligations of such Guarantor under all of its guarantees of, and under all of
its pledges of assets or other security interests which secure, any Indebtedness
of either Issuer or any of their Subsidiaries shall also terminate upon such
release, sale or transfer.
LIMITATION ON STATUS AS INVESTMENT COMPANY
The Indenture prohibits Sun International and its Subsidiaries from being
required to register as an "investment company" (as that term is defined in the
Investment Company Act of 1940, as amended), or from otherwise becoming subject
to regulation under the Investment Company Act.
REPORTS
The Indenture provides that whether or not Sun International or SINA is
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, each of Sun International and SINA shall deliver to the Trustee and to each
Holder within 15 days after it is or would have been (if it were subject to such
reporting obligations) required to furnish such with the Commission, annual and
quarterly financial statements substantially equivalent to financial statements
that would have been included in reports filed with the Commission, if such
entity were subject to the requirements of Section 13 or 15(d) of the Exchange
Act, including, with respect to annual information only, a report thereon by the
Issuers' certified independent public accountants as such would be required in
such reports to the Commission, and, in each case, together with a management's
discussion and analysis of financial condition and results of operations which
would be so required and, to the extent permitted by the Exchange Act or the
Commission, file with the Commission the annual, quarterly and other reports
which it is or would have (if it were subject to such reporting obligations)
been required to file with the Commission.
EVENTS OF DEFAULT AND REMEDIES
The Indenture defines an Event of Default as (i) the failure by the Issuers
to pay any installment of interest or Liquidated Damages, if any, on the Notes
as and when the same becomes due and payable and the continuance of any such
failure for 30 days, (ii) the failure by the Issuers to pay all or any part of
the principal, or premium, if any, on the Notes when and as the same becomes due
and payable at maturity, redemption, by acceleration or otherwise, whether or
not prohibited by the subordination provisions of the Indenture, including,
without limitation, payment of the Change of Control Purchase Price or the Asset
Sale Offer Price, or otherwise, (iii) the failure by either of the Issuers or
any of their Subsidiaries otherwise to comply with the covenants described under
"Certain Covenants--Repurchase of Notes at the Option of the Holder Upon a
Change of Control", "--Limitation on Sale of Assets and Subsidiary Stock" and
"-- Limitation on Merger, Sale or Consolidation", (iv) (A) failure by either of
the Issuers or any of their Subsidiaries to observe or perform any other
covenant or agreement described under "Certain Covenants" (except as provided in
clauses (i), (ii) and (iii) above) and the continuance of such failure for a
period of 30 days after written notice is given to the Issuers by the Trustee or
to the Issuers and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Notes outstanding, or (B) failure by either of the
Issuers or any of their Subsidiaries to observe or perform any other covenant or
agreement contained in the Notes or the Indenture (except as provided for in
clauses (i), (ii), (iii) and (iv)(A) above) and the continuance of such failure
for 60 days after written notice is given to the Issuers by the Trustee or the
Issuers and the Trustee by the Holders of at least 25% in aggregate principal
amount of Notes outstanding, (v) certain events of bankruptcy, insolvency or
reorganization in respect of either of the Issuers or any of their Significant
Subsidiaries, (vi) a default in Indebtedness of either of the Issuers or any of
their Subsidiaries with an aggregate principal amount in excess of $10 million
(a) resulting from the failure to pay any principal at final stated maturity or
(b) as a result of which the maturity of such Indebtedness has been accelerated
prior to its stated maturity, and (vii) final unsatisfied judgments not covered
by insurance aggregating in excess of $10 million, at any one time rendered
against either of the Issuers or any of their Subsidiaries and either (a) the
commencement by any creditor of any enforcement proceeding upon any such
judgment that is not promptly stayed or (b) such judgment is not stayed, bonded
or discharged within 60 days. The Indenture provides that if a Default occurs
and is continuing, the Trustee must, within 90 days after the occurrence of such
default, give to the Holders notice of such default.
If an Event of Default occurs and is continuing (other than an Event of
Default specified in clause (v), above, relating to either of the Issuers or any
of their Significant Subsidiaries,) then in every such case, unless the
principal of all of the Notes shall have already become due and payable, either
the Trustee or the Holders
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of 25% in aggregate principal amount of the Notes then outstanding, by notice in
writing to the Issuers (and to the Trustee if given by Holders) (an
"Acceleration Notice"), may declare all principal and premium, if any,
determined as set forth below, and accrued and unpaid interest and Liquidated
Damages, if any, thereon to be due and payable immediately; PROVIDED, HOWEVER,
that if any Senior Debt is outstanding pursuant to the Credit Agreement, such
acceleration shall not be effective until the earlier of (x) the fifth Business
Day after the giving to Sun International and the Representative of such written
notice, unless such Event of Default is cured or waived prior to such date and
(y) the date of acceleration of any Senior Debt under the Credit Agreement. If
an Event of Default specified in clause (v) above relating to either of the
Issuers or any of their Significant Subsidiaries occurs, all principal and
accrued interest thereon will be immediately due and payable on all outstanding
Notes without any declaration or other act on the part of Trustee or the
Holders. The Holders of a majority in aggregate principal amount of Notes
generally are authorized to rescind such acceleration if all existing Events of
Default, other than the non-payment of the principal of, premium, if any, and
interest and Liquidated Damages on the Notes which have become due solely by
such acceleration, have been cured or waived.
Prior to the declaration of acceleration of the maturity of the Notes, the
Holders of a majority in aggregate principal amount of the Notes at the time
outstanding may waive on behalf of all the Holders any default, except a default
in the payment of principal of or interest on any Note not yet cured or a
default with respect to any covenant or provision which cannot be modified or
amended without the consent of the Holder of each outstanding Note affected.
Subject to the provisions of the Indenture relating to the duties of the
Trustee, the Trustee will be under no obligation to exercise any of its rights
or powers under the Indenture at the request, order or direction of any of the
Holders, unless such Holders have offered to the Trustee reasonable security or
indemnity. Subject to all provisions of the Indenture and applicable law, the
Holders of a majority in aggregate principal amount of the Notes at the time
outstanding will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides that the Issuers may, at their option and at any
time, elect to have their obligations and the obligations of the Guarantors
discharged with respect to the outstanding Notes ("Legal Defeasance"). Such
Legal Defeasance means that the Issuers shall be deemed to have paid and
discharged the entire indebtedness represented, and the Indenture shall cease to
be of further effect as to all outstanding Notes and Guarantees, except as to
(i) rights of Holders to receive payments in respect of the principal of,
premium, if any, and interest and Liquidated Damages, if any, on such Notes when
such payments are due from the trust funds; (ii) Issuers' obligations with
respect to such Notes concerning issuing temporary Notes, registration of Notes,
mutilated, destroyed, lost or stolen Notes, and the maintenance of an office or
agency for payment and money for security payments held in trust; (iii) the
rights, powers, trust, duties, and immunities of the Trustee, and the Issuers'
obligations in connection therewith; and (iv) the Legal Defeasance provisions of
the Indenture. In addition, the Issuers may, at their option and at any time,
elect to have the obligations of the Issuers and the Guarantors released with
respect to certain covenants that are described in the Indenture ("Covenant
Defeasance") and thereafter any omission to comply with such obligations shall
not constitute a Default or Event of Default with respect to the Notes. In the
event Covenant Defeasance occurs, certain events (not including non-payment,
non-payment of guarantees, bankruptcy, receivership, rehabilitation and
insolvency events) described under "Events of Default" will no longer constitute
an Event of Default with respect to the Notes. The Issuers may exercise their
Legal Defeasance option regardless of whether it previously exercised Covenant
Defeasance.
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In order to exercise either Legal Defeasance or Covenant Defeasance, (i) the
Issuers must irrevocably deposit with the Trustee, in trust, for the benefit of
the Holders of the Notes, U.S. legal tender, U.S. Government Obligations or a
combination thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay the
principal of, premium, if any, and interest on such Notes on the stated date for
payment thereof or on the redemption date of such principal or installment of
principal of, premium, if any, or interest on such Notes, and the Holders of
Notes must have a valid, perfected, exclusive security interest in such trust;
(ii) in the case of the Legal Defeasance, the Issuers shall have delivered to
the Trustee an opinion of counsel in the United States reasonably acceptable to
Trustee confirming that (A) the Issuers have received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date of the
Indenture, there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such opinion of counsel shall
confirm that, the Holders of such Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Legal Defeasance had not
occurred; (iii) in the case of Covenant Defeasance, the Issuers shall have
delivered to the Trustee an opinion of counsel in the United States reasonably
acceptable to such Trustee confirming that the Holders of such Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred; (iv) no Default or Event of Default
shall have occurred and be continuing on the date of such deposit or insofar as
Events of Default from bankruptcy or insolvency events are concerned, at any
time in the period ending on the 91st day after the date of deposit; (v) such
Legal Defeasance or Covenant Defeasance shall not result in a breach or
violation of, or constitute a default under the Indenture or any other material
agreement or instrument to which either of the Issuers or any of their
Subsidiaries is a party or by which either of the Issuers or any of their
Subsidiaries is bound; (vi) the Issuers shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the Issuers with
the intent of preferring the Holders of such Notes over any other creditors of
the Issuers or with the intent of defeating, hindering, delaying or defrauding
any other creditors of the Issuers or others; and (vii) the Issuers shall have
delivered to the Trustee an Officers' Certificate and an opinion of counsel,
each stating that the conditions precedent provided for in, in the case of the
officers' certificate, (i) through (vi) and, in the case of the opinion of
counsel, clauses (i) (with respect to the validity and perfection of the
security interest), (ii), (iii) and (v) of this paragraph have been complied
with.
If the funds deposited with the Trustee to effect Legal Defeasance or
Covenant Defeasance are insufficient to pay the principal of, premium, if any,
and interest on the Notes when due, then the obligations of the Issuers under
the Indenture will be revived and no such defeasance will be deemed to have
occurred.
AMENDMENTS AND SUPPLEMENTS
The Indenture contains provisions permitting the Issuers, the Guarantors and
the Trustee to enter into a supplemental indenture for certain limited purposes
without the consent of the Holders. With the consent of the Holders of not less
than a majority in aggregate principal amount of the Notes at the time
outstanding, the Issuers, the Guarantors and the Trustee are permitted to amend
or supplement the Indenture or any supplemental indenture or modify the rights
of the Holders; PROVIDED, that no such modification may, without the consent of
each Holder affected thereby: (i) change the Stated Maturity on any Note, or
reduce the principal amount thereof or the rate (or extend the time for payment)
of interest thereon or any premium payable upon the redemption thereof, or
change the place of payment where, or the coin or currency in which, any Note or
any premium or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption Date), or
reduce the Change of Control Purchase Price or the Asset Sale Offer Price or
alter the provisions (including the defined terms used therein) regarding the
right of the Issuers to redeem the Notes in a manner adverse to the Holders, or
(ii) reduce the percentage in principal amount of the outstanding Notes, the
consent of whose Holders is required for any such amendment,
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supplemental indenture or waiver provided for in the Indenture, or (iii) modify
any of the waiver provisions, except to increase any required percentage or to
provide that certain other provisions of the Indenture cannot be modified or
waived without the consent of the Holder of each outstanding Note affected
thereby.
NO PERSONAL LIABILITY OF PARTNERS, STOCKHOLDERS, OFFICERS, DIRECTORS
The Indenture will provide that no direct or indirect stockholder, employee,
officer or director, as such, past, present or future of the Issuers, the
Guarantors or any successor entity shall have any personal liability in respect
of the obligations of the Issuers or the Guarantors under the Indenture or the
Notes by reason of his or its status as such stockholder, employee, officer or
director, except to the extent such person is an Issuer or Guarantor.
ADDITIONAL INFORMATION
Anyone who receives this Prospectus may obtain a copy of the Indenture and
the Registration Rights Agreement without charge by writing to Sun International
Hotels Limited, Coral Towers, Paradise Island, Bahamas (attention: General
Counsel).
CERTAIN DEFINITIONS
"Acquired Indebtedness" means Indebtedness or Disqualified Capital Stock of
any person existing at the time such person becomes a Subsidiary of either of
the Issuers or is merged or consolidated into or with either of the Issuers or
any of their Subsidiaries.
"Acquisition" means the purchase or other acquisition of any person or all
or substantially all the assets of any person by any other person, or the
acquisition of assets that constitute all or substantially all of an operating
unit of business, whether by purchase, merger, consolidation, or other transfer,
and whether or not for consideration.
"Affiliate" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with Sun International.
For purposes of this definition, the term "control" means the power to direct
the management and policies of a person, directly or through one or more
intermediaries, whether through the ownership of voting securities, by contract,
or otherwise, PROVIDED, that, with respect to ownership interest in Sun
International and its Subsidiaries a Beneficial Owner of 10% or more of the
total voting power normally entitled to vote in the election of directors,
managers or trustees, as applicable, shall for such purposes be deemed to
constitute control.
"Average Life" means, as of the date of determination, with respect to any
security or instrument, the quotient obtained by dividing (i) the sum of the
products of (a) the number of years from the date of determination to the date
or dates of each successive scheduled principal (or redemption) payment of such
security or instrument and (b) the amount of each such respective principal (or
redemption) payment by (ii) the sum of all such principal (or redemption)
payments.
"Beneficial Owner" or "beneficial owner" has the meaning attributed to it in
Rules l3d-3 and l3d-5 under the Exchange Act (as in effect on the Issue Date),
whether or not applicable, except that a "person" shall be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York, New York or the
New York Stock Exchange are authorized or obligated by law or executive order to
close.
"Capitalized Lease Obligation" means, as applied to any person, any lease of
any property (whether real, personal or mixed) of which the discounted present
value of the rental obligations of such person, as lessee, in conformity with
GAAP, is required to be capitalized on the balance sheet of such person.
"Capital Stock" means, with respect to any corporation, any and all shares,
interests, rights to purchase (other than convertible or exchangeable
Indebtedness that is not otherwise itself capital stock), warrants, options,
participations or other equivalents of or interests (however designated) in
stock issued by that corporation.
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"Cash Equivalent" means (a) (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof), (ii) time deposits and
certificates of deposit of any domestic commercial bank of recognized standing
having capital and surplus in excess of $500 million or (iii) commercial paper
issued by others rated at least A-1 or the equivalent thereof by Standard &
Poor's Corporation or at least P-1 or the equivalent thereof by Moody's
Investors Service, Inc., and in the case of each of (i), (ii) and (iii) above
maturing within one year after the date of acquisition or (b) shares of money
market mutual funds or similar funds having assets in excess of $500 million.
"Consolidated Coverage Ratio" of any person on any date of determination (a
"Transaction Date") means the ratio, on a pro forma basis, of (a) the aggregate
amount of Consolidated EBITDA of such person attributable to continuing
operations and businesses (exclusive of amounts attributable to operations and
businesses permanently discontinued or disposed of) for the Reference Period to
(b) the aggregate Consolidated Fixed Charges of such person (exclusive of
amounts attributable to operations and businesses permanently discontinued or
disposed of, but only to the extent that the obligations giving rise to such
Consolidated Fixed Charges would no longer be obligations contributing to such
person's Consolidated Fixed Charges subsequent to the Transaction Date) during
the Reference Period; PROVIDED, that for purposes of such calculation, (i)
Acquisitions which occurred during the Reference Period or subsequent to the
Reference Period and on or prior to the Transaction Date shall be assumed to
have occurred on the first day of the Reference Period, (ii) transactions giving
rise to the need to calculate the Consolidated Coverage Ratio shall be assumed
to have occurred on the first day of the Reference Period, (iii) the incurrence
of any Indebtedness or issuance of any Disqualified Capital Stock during the
Reference Period or subsequent to the Reference Period and on or prior to the
Transaction Date (and the application of the proceeds therefrom to the extent
used to refinance or retire other Indebtedness) shall be assumed to have
occurred on the first day of such Reference Period, and (iv) the Consolidated
Fixed Charges of such person attributable to interest on any Indebtedness or
dividends on any Disqualified Capital Stock bearing a floating interest (or
dividend) rate shall be computed on a pro forma basis as if the rate in effect
on the Transaction Date had been the applicable rate for the entire period,
unless such Person or any of its Subsidiaries is a party to an Interest Swap or
Hedging Obligation (which shall remain in effect for the 12-month period
immediately following the Transaction Date) that has the effect of fixing the
interest rate on the date of computation, in which case such rate (whether
higher or lower) shall be used.
"Consolidated EBITDA" means, with respect to any person, for any period, the
Consolidated Net Income of such person for such period adjusted to add thereto
(to the extent deducted from net revenues in determining Consolidated Net
Income), without duplication, the sum of (i) Consolidated income tax expense,
(ii) Consolidated depreciation and amortization expense, PROVIDED that
consolidated depreciation and amortization of a Subsidiary that is a less than
wholly owned Subsidiary shall only be added to the extent of the equity interest
of such person in such Subsidiary and (iii) Consolidated Fixed Charges, less any
non-cash interest income.
"Consolidated Fixed Charges" of any person means, for any period, the
aggregate amount (without duplication and determined in each case in accordance
with GAAP) of (a) interest expensed or capitalized, paid, accrued, or scheduled
to be paid or accrued (including, in accordance with the following sentence,
interest attributable to Capitalized Lease Obligations) of such person and its
Consolidated Subsidiaries during such period, including (i) original issue
discount and non-cash interest payments or accruals on any Indebtedness, (ii)
the interest portion of all deferred payment obligations and (iii) all
commissions, discounts and other fees and charges owed with respect to bankers'
acceptances and letters of credit financings and currency and Interest Swap and
Hedging Obligations, in each case to the extent attributable to such period, but
excluding interest payments on the Showboat Notes, and (b) the amount of
dividends accrued or payable (or guaranteed) by such person or any of its
Consolidated Subsidiaries in respect of preferred stock (other than by
Subsidiaries of such person to such person or such person's wholly owned
Subsidiaries). For purposes of this definition, (x) interest on a Capitalized
Lease Obligation shall be deemed to accrue at an
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interest rate reasonably determined by Sun International to be the rate of
interest implicit in such Capitalized Lease Obligation in accordance with GAAP
and (y) interest expense attributable to any Indebtedness represented by the
guaranty by such person or a Subsidiary of such person of an obligation of
another person shall be deemed to be the interest expense attributable to the
Indebtedness guaranteed.
"Consolidated Net Income" means, with respect to any person for any period,
the net income (or loss) of such person and its Consolidated Subsidiaries
(determined on a consolidated basis in accordance with GAAP) for such period,
adjusted to exclude (only to the extent included in computing such net income
(or loss) and without duplication): (a) all gains (but not losses) which are
either extraordinary (as determined in accordance with GAAP), unusual or
nonrecurring (including any gain from the sale or other disposition of assets or
currency transactions outside the ordinary course of business or from the
issuance or sale of any capital stock), (b) the net income, if positive, of any
person, other than a Consolidated Subsidiary, in which such person or any of its
Consolidated Subsidiaries has an interest, except to the extent of the amount of
any dividends or distributions actually paid in cash to such person or a wholly
owned Consolidated Subsidiary of such person during such period, but in any case
not in excess of such person's PRO RATA share of such person's net income for
such period, (c) the net income or loss of any person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition, (d)
the net income, if positive, of any of such person's Consolidated Subsidiaries
to the extent that the declaration or payment of dividends or similar
distributions is not at the time permitted by operation of the terms of its
charter or bylaws or any other agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Consolidated
Subsidiary, except for existing restrictions under the Credit Agreement and (e)
the net income attributable to the Showboat Lease.
"Consolidated Net Worth" of any person at any date means the aggregate
consolidated stockholders' equity of such person (plus amounts of equity
attributable to preferred stock) and its Consolidated Subsidiaries, as would be
shown on the consolidated balance sheet of such person prepared in accordance
with GAAP, adjusted to exclude (to the extent included in calculating such
equity), the amount of any such stockholders' equity attributable to
Disqualified Capital Stock or treasury stock of such person and its Consolidated
Subsidiaries.
"Consolidated Subsidiary" means, for any person, each Subsidiary of such
person (whether now existing or hereafter created or acquired) the financial
statements of which are consolidated for financial statement reporting purposes
with the financial statements of such person in accordance with GAAP.
"Credit Agreement" means the credit agreement dated as of November 1, 1996,
by and among Sun Bahamas, the Company, certain of the Company's subsidiaries,
certain financial institutions and The Bank of Nova Scotia, as administrative
and collateral agent, providing for an aggregate $250 million revolving credit
facility (excluding any amounts with respect to Interest Swap and Hedging
Obligations complying with the provisions set forth below) (which amount may be
increased to $375 million and may be increased to $500 million upon the later of
the Paradise Island Expansion opening or December 31, 1998), including any
related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith, as such credit agreement and/or related
documents may be amended, restated, supplemented, renewed, replaced or otherwise
modified from time to time whether or not with the same agent, trustee,
representative lenders or holders, and, subject to the proviso to the next
succeeding sentence, irrespective of any changes in the terms and conditions
thereof. Without limiting the generality of the foregoing, the term "Credit
Agreement" shall include agreements in respect of Interest Swap and Hedging
Obligations entered into for bona fide hedging purposes and not entered into for
speculative purposes with lenders party to the Credit Agreement or their
affiliates and shall also include any amendment, amendment and restatement,
renewal, extension, restructuring, supplement or modification to any Credit
Agreement and all refundings, refinancings and replacements of any Credit
Agreement, including any agreement (i) extending or shortening the maturity of
any Indebtedness incurred thereunder or contemplated thereby, (ii) adding or
deleting borrowers or guarantors thereunder, so long as borrowers and issuers
include one or more of Sun International and its Subsidiaries and their
respective successors and assigns, (iii) increasing the amount of Indebtedness
incurred thereunder or available to be borrowed thereunder, PROVIDED that on the
date such
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Indebtedness is incurred it would not be prohibited by clause (a) of the
definition of "Permitted Indebtedness," or (iv) otherwise altering the terms and
conditions thereof in a manner not prohibited by the terms hereof.
"Disqualified Capital Stock" means (i) except as set forth in (ii), with
respect to any person, Equity Interests of such person that, by its terms or by
the terms of any security into which it is convertible, exercisable or
exchangeable, is, or upon the happening of an event or the passage of time would
be, required to be redeemed or repurchased (including at the option of the
holder thereof) by such person or any of its Subsidiaries, in whole or in part,
on or prior to the Stated Maturity of the Notes and (ii) with respect to any
Subsidiary of such person (other than the Guarantors), any Equity Interests
other than any common equity with no preference, privileges, or redemption or
repayment provisions.
"Equity Interest" of any person means any shares, interests, participations
or other equivalents (however designated) in such person's equity, and shall in
any event include any Capital Stock issued by, or partnership or membership
interests in, such person.
"Event of Loss" means, with respect to any property or asset, any (i) loss,
destruction or damage of such property or asset or (ii) any condemnation,
seizure or taking, by exercise of the power of eminent domain or otherwise, of
such property or asset, or confiscation or requisition of the use of such
property or asset.
"Exempted Affiliate Transaction" means transactions solely between Sun
International and any of its wholly owned Subsidiaries or solely among wholly
owned Subsidiaries of Sun International.
"FF&E Indebtedness" means any Indebtedness of a person to any seller or
other person incurred to finance the acquisition (including in the case of a
Capitalized Lease Obligation, the lease) of any gaming facility or hotel or
gaming or hotel related fixtures, furniture or equipment which is directly
related to a Related Business of Sun International and which is incurred
concurrently with such acquisition and is secured only by the assets so
financed.
"GAAP" means United States generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession in the United States as in effect on the Issue Date.
"Indebtedness" of any person means, without duplication, (a) all liabilities
and obligations, contingent or otherwise, of such any person, (i) in respect of
borrowed money (whether or not the recourse of the lender is to the whole of the
assets of such person or only to a portion thereof), (ii) evidenced by bonds,
notes, debentures or similar instruments, (iii) representing the balance
deferred and unpaid of the purchase price of any property or services, except
those incurred in the ordinary course of its business that would constitute
ordinarily trade payables to trade creditors that are not more than 60 days past
their original due date, (iv) evidenced by bankers' acceptances or similar
instruments issued or accepted by banks, (v) relating to any Capitalized Lease
Obligation, or (vi) evidenced by a letter of credit or a reimbursement
obligation of such person with respect to any letter of credit; (b) all net
obligations of such person under Interest Swap and Hedging Obligations; (c) all
liabilities and obligations of others of the kind described in the preceding
clause (a) or (b) that such person has guaranteed or that is otherwise its legal
liability or which are secured by any assets or property of such person and (d)
any and all deferrals, renewals, extensions, refinancing and refundings (whether
direct or indirect) of, or amendments, modifications or supplements to, any
liability of the kind described in any of the preceding clauses (a), (b) or (c),
or this clause (d), whether or not between or among the same parties, and (e)
all Disqualified Capital Stock of such Person (measured at the greater of its
voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid
dividends). For purposes hereof, the "maximum fixed repurchase price" of any
Disqualified Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Capital Stock as if
such Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to the Indenture, and if such price
is based upon, or measured by, the Fair Market
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Value of such Disqualified Capital Stock, such Fair Market Value to be
determined in good faith by the board of directors of the issuer (or managing
general partner of the issuer) of such Disqualified Capital Stock.
"Interest Swap and Hedging Obligation" means any obligation of any person
pursuant to any interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement, interest rate exchange agreement, currency
exchange agreement or any other agreement or arrangement designed to protect
against fluctuations in interest rates or currency values, including, without
limitation, any arrangement whereby, directly or indirectly, such person is
entitled to receive from time to time periodic payments calculated by applying
either a fixed or floating rate of interest on a stated notional amount in
exchange for periodic payments made by such person calculated by applying a
fixed or floating rate of interest on the same notional amount.
"Investment" by any person in any other person means (without duplication)
(a) the acquisition (whether by purchase, merger, consolidation or otherwise) by
such person (whether for cash, property, services, securities or otherwise) of
capital stock, bonds, notes, debentures, partnership or other ownership
interests or other securities, including any options or warrants, of such other
person or any agreement to make any such acquisition; (b) the making by such
person of any deposit with, or advance, loan or other extension of credit to,
such other person (including the purchase of property from another person
subject to an understanding or agreement, contingent or otherwise, to resell
such property to such other person) or any commitment to make any such advance,
loan or extension (but excluding accounts receivable or deposits arising in the
ordinary course of business); (c) other than guarantees of Indebtedness of Sun
International or any Subsidiary to the extent permitted by the covenant
"Limitation on Incurrence of Additional Indebtedness and Disqualified Capital
Stock", the entering into by such person of any guarantee of, or other credit
support or contingent obligation with respect to, Indebtedness or other
liability of such other person; (d) the making of any capital contribution by
such person to such other person; and (e) the designation by the Board of
Directors of Sun International of any person to be an Unrestricted Subsidiary.
Sun International shall be deemed to make an Investment in an amount equal to
the fair market value of the net assets of any subsidiary (or, if neither Sun
International nor any of its Subsidiaries has theretofore made an Investment in
such subsidiary, in an amount equal to the Investments being made), at the time
that such subsidiary is designated an Unrestricted Subsidiary, and any property
transferred to an Unrestricted Subsidiary from Sun International or a Subsidiary
shall be deemed an Investment valued at its fair market value at the time of
such transfer.
"Investment Grade Rating" means a rating equal to or higher than Baa3 (or
the equivalent) by Moody's (or any successor to the rating agency business
thereof) or BBB- (or the equivalent) by S&P (or any successor to the rating
agency business thereof).
"Investment Grade Status" means any time at which the ratings of the Notes
by both Moody's (or any successor to the rating agency business thereof) and S&P
(or any successor to the rating agency business thereof) are Investment Grade
Ratings.
"Issue Date" means the date of first issuance of the Notes under the
Indenture.
"Junior Security" means any Qualified Capital Stock and any Indebtedness of
an Issuer or a Guarantor, as applicable, that (i) is subordinated in right of
payment to Senior Debt at least to the same extent as the Notes or the
Guarantee, as applicable, (ii) has no scheduled installment of principal due, by
redemption, sinking fund payment or otherwise, on or prior to the Stated
Maturity of the Notes (iii) does not have covenants or default provisions
materially more beneficial to the holders of the Notes than those in effect with
respect to the Notes on the Issue Date and (iv) was authorized by an order or
decree of a court of competent jurisdiction that gave effect to (and states in
such order or decree that effect has been given to) the subordination of such
securities to all Senior Debt of the applicable Issuer or Guarantor not paid in
full in cash or Cash Equivalents in connection with such reorganization;
provided that all such Senior Debt is assumed by the reorganized corporation and
the rights of the holders of any such Senior Debt are not,
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without the consent of such holders, altered by such reorganization, which
consent shall be deemed to have been given if the holders of such Senior Debt,
individually or as a class, shall have approved such reorganization.
"Lien" means any mortgage, charge, pledge, lien (statutory or otherwise),
privilege, security interest, hypothecation or other encumbrance upon or with
respect to any property of any kind, real or personal, movable or immovable, now
owned or hereafter acquired.
"Moody's" means Moody's Investor Services, Inc.
"Net Cash Proceeds" means the aggregate amount of Cash or Cash Equivalents
received by Sun International in the case of a sale of Qualified Capital Stock
and by Sun International and its Subsidiaries in respect of an Asset Sale plus,
in the case of an issuance of Qualified Capital Stock upon any exercise,
exchange or conversion of securities (including options, warrants, rights and
convertible or exchangeable debt) of Sun International that were issued for cash
on or after the Issue Date, the amount of cash originally received by Sun
International upon the issuance of such securities (including options, warrants,
rights and convertible or exchangeable debt) less, in each case, the sum of all
payments, fees, commissions and reasonable and customary expenses (including,
without limitation, the fees and expenses of legal counsel and investment
banking fees and expenses) incurred in connection with such Asset Sale or sale
of Qualified Capital Stock, and, in the case of an Asset Sale only, less the
amount (estimated reasonably and in good faith by Sun International) of income,
franchise, sales and other applicable taxes required to be paid by Sun
International or any of its respective Subsidiaries in connection with such
Asset Sale.
"Non-Recourse Indebtedness" means Indebtedness of a person to the extent
that under the terms thereof or pursuant to applicable law (i) no personal
recourse shall be had against such person for the payment of the principal of or
interest or premium, if any, on such Indebtedness, and (ii) enforcement of
obligations on such Indebtedness is limited only to recourse against interests
in property purchased with the proceeds of the incurrence of such Indebtedness
and as to which none of the Issuers or any of its Subsidiaries provides any
crredit support or is liable.
"Permitted Holder" means Solomon Kerzner, his immediate family or a trust or
similar entity existing solely for his benefit or for the benefit of his
immediate family.
"Permitted Indebtedness" means Indebtedness incurred as follows:
(a) the Issuers and the Guarantors may incur Indebtedness (i) pursuant to
the Credit Agreement up to an aggregate principal amount outstanding (including
any Indebtedness issued to refinance, refund or replace such Indebtedness) at
any time of $375 million (excluding any amounts with respect to Interest Swap
and Hedging Obligations) (which amount may be increased to $500 million upon the
later to occur of the Paradise Island Expansion opening or December 31, 1998),
minus the amount of any such Indebtedness retired with Net Cash Proceeds from
any Asset Sale or assumed by a transferee in an Asset Sale (provided any
commitment in respect of such Indebtedness is permanently reduced) and (ii) the
Issuers and the Guarantors may incur Indebtedness with respect to Interest Swap
and Hedging Obligations entered into for bona fide hedging purposes and not
entered into for speculative purposes;
(b) the Issuers and the Guarantors may incur Indebtedness evidenced by the
Notes and the Guarantees and represented by the Indenture up to the amounts
specified therein as of the date thereof;
(c) the Issuers and the Guarantors may incur FF&E Indebtedness on or after
the Issue Date, PROVIDED, that (i) such FF&E Indebtedness is Non-Recourse
Indebtedness and (ii) such Indebtedness shall not constitute more than 100% of
the cost (determined in accordance with GAAP) to the Issuers or such Guarantor,
as applicable, of the property so purchased or leased;
(d) the Issuers and the Guarantors may incur Indebtedness solely in respect
of bankers' acceptances and performance bonds (to the extent that such
incurrence does not result in the incurrence of any obligation to repay any
obligation relating to borrowed money of others), all in the ordinary course of
business in accordance with customary industry practices, in amounts and for the
purposes customary in their industry;
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(e) the Issuers may incur Indebtedness to any wholly owned Subsidiary, and
any wholly owned Subsidiary may incur Indebtedness to any other wholly owned
Subsidiary or to an Issuer; PROVIDED, that, in the case of Indebtedness of the
Issuers (other than Indebtedness that is required to be pledged to the lenders
under the Credit Agreement), such obligations shall be unsecured and
subordinated in all respects to the Issuers' obligations pursuant to the Notes,
and the date of any event that causes a Subsidiary to no longer be a wholly
owned Subsidiary shall be an Incurrence Date; and
(f) the Issuers and their Subsidiaries, as applicable, may incur Refinancing
Indebtedness with respect to any Indebtedness or Disqualified Capital Stock, as
applicable, described in clauses (b) and (f) of this definition or incurred
under the Debt Incurrence Ratio contained in the covenant "Limitation on
Incurrence of Additional Indebtedness and Disqualified Capital Stock" or which
is outstanding on the Issue Date (after giving effect to consummation of the
Tender Offer) so long as such Refinancing Indebtedness is secured only by the
assets that secured the Indebtedness so refinanced or otherwise replaced.
"Permitted Investment" means (a) any Investment in any of the Notes; (b) any
Investment in Cash Equivalents; (c) any Investment in intercompany notes to the
extent permitted under clause (b) of the definition of "Permitted Indebtedness";
(d) any Investment in a person in a Related Business who, after such Investment,
becomes a Subsidiary of an Issuer and a Guarantor of the Notes; and (e) any
Investment in any property or assets to be used by an Issuer or Guarantor in a
Related Business.
"Permitted Lien" means (a) any Lien securing the Notes; (b) any Lien
securing Indebtedness of a Person existing at the time such Person becomes a
Subsidiary or is merged with or into either of the Issuers or a Subsidiary of
either of the Issuers or Liens securing Indebtedness incurred in connection with
an Acquisition, PROVIDED that such Liens were in existence prior to the date of
such acquisition, merger or consolidation, were not incurred in anticipation
thereof, and do not extend to any other assets; (c) any Lien in favor of either
of the Issuers or any Guarantor; and (d) any Lien arising from FF&E Indebtedness
permitted to be incurred under clause (c) of the definition of "Permitted
Indebtedness", PROVIDED such Lien relates solely to the property which is
subject to such FF&E Indebtedness.
"Public Equity Offering" means an underwritten public offering of Common
Stock of Sun International.
"Qualified Capital Stock" means any Capital Stock of Sun International that
is not Disqualified Capital Stock.
"Qualified Exchange" means any legal defeasance, redemption, retirement,
repurchase or other acquisition of Capital Stock or Indebtedness of Sun
International issued on or after the Issue Date with the Net Cash Proceeds
received by Sun International from the substantially concurrent sale of
Qualified Capital Stock or any exchange of Qualified Capital Stock for any
Capital Stock or Indebtedness of Sun International issued on or after the Issue
Date.
"Rating Agencies" means S&P and Moody's or any successor to the respective
rating agency businesses thereof.
"Reference Period" with regard to any person means the four full fiscal
quarters (or such lesser period during which such person has been in existence)
ended immediately preceding any date upon which any determination is to be made
pursuant to the terms of the Notes or the Indenture.
"Refinancing Indebtedness" means Indebtedness or Disqualified Capital Stock
(a) issued in exchange for, or the proceeds from the issuance and sale of which
are used substantially concurrently to repay, redeem, defease, refund,
refinance, discharge or otherwise retire for value, in whole or in part, or (b)
constituting an amendment, modification or supplement to, or a deferral or
renewal of ((a) and (b) above are, collectively, a "Refinancing"), any
Indebtedness or Disqualified Capital Stock in a principal amount or, in the case
of Disqualified Capital Stock, liquidation preference, not to exceed (after
deduction of reasonable and customary fees and expenses incurred in connection
with the Refinancing) the lesser of (i) the principal amount or, in the case of
Disqualified Capital Stock, liquidation preference, of the Indebtedness or
Disqualified Capital Stock so Refinanced and (ii) if such Indebtedness being
Refinanced was issued with an original issue
88
<PAGE>
discount, the accreted value thereof (as determined in accordance with GAAP) at
the time of such Refinancing; provided, that (A) such Refinancing Indebtedness
of any Subsidiary of Sun International shall only be used to Refinance
outstanding Indebtedness or Disqualified Capital Stock of such Subsidiary, (B)
such Refinancing Indebtedness shall (x) not have an Average Life shorter than
the Indebtedness or Disqualified Capital Stock to be so refinanced at the time
of such Refinancing and (y) in all respects, be no less subordinated or junior,
if applicable, to the rights of Holders of the Notes than was the Indebtedness
or Disqualified Capital Stock to be refinanced and (C) such Refinancing
Indebtedness shall have a final stated maturity or redemption date, as
applicable, no earlier than the final stated maturity or redemption date, as
applicable, of the Indebtedness or Disqualified Capital Stock to be so
refinanced.
"Related Business" means the gaming or hotel business and other businesses
necessary for, or in the good faith judgment of the Board of Directors of Sun
International, incident to, connected with, arising out of, or developed or
operated to permit or facilitate the conduct or pursuit of the gaming or hotel
business (including developing or operating sports or entertainment facilities,
retail facilities, restaurants, night clubs, transportation and communications
services or other related activities or enterprises and any additions or
improvements thereto) and potential opportunities in the gaming or hotel
business.
"Representative" means The Bank of Nova Scotia or any successor or
successors under the Credit Agreement.
"Restricted Payment" means, with respect to any person, (a) the declaration
or payment of any dividend or other distribution in respect of Equity Interests
of such person or any parent or Subsidiary of such person, (b) any payment on
account of the purchase, redemption or other acquisition or retirement for value
of Equity Interests of such person or any Subsidiary or parent of such person,
(c) other than with the proceeds from the substantially concurrent sale of, or
in exchange for, Refinancing Indebtedness, any purchase, redemption, or other
acquisition or retirement for value of, any payment in respect of any amendment
of the terms of or any defeasance of, any Subordinated Indebtedness, directly or
indirectly, by such person or a parent or Subsidiary of such person prior to the
scheduled maturity, any scheduled repayment of principal, or scheduled sinking
fund payment, as the case may be, of such Indebtedness and (d) any Investment by
such person, other than a Permitted Investment; PROVIDED, HOWEVER, that the term
"Restricted Payment" does not include (i) any dividend, distribution or other
payment on or with respect to Equity Interests of an Issuer to the extent
payable solely in shares of Qualified Capital Stock of such Issuer; or (ii) any
dividend, distribution or other payment to the Issuers, or to any Guarantors, by
Sun International or any of its Subsidiaries.
"S&P" means Standard and Poor's Ratings Group, a division of the McGraw-Hill
Companies, Inc.
"Senior Debt" of Sun International, SINA or any Guarantor means Indebtedness
(including and together with all monetary obligations in respect of the Credit
Agreement, and interest, whether or not allowable, accruing on Indebtedness
incurred pursuant to the Credit Agreement after the filing of a petition
initiating any proceeding under any bankruptcy, insolvency or similar law or
which would have accrued but for such filing) of Sun International, SINA or such
Guarantor arising under the Credit Agreement or that, by the terms of the
instrument creating or evidencing such Indebtedness, is expressly designated
Senior Debt and made senior in right of payment to the Notes or the applicable
Guarantee; PROVIDED, that in no event shall Senior Debt include (a) Indebtedness
to any Subsidiary of Sun International or any officer, director or employee of
Sun International or any Subsidiary of Sun International (other than
Indebtedness that is required to be pledged to the lenders under the Credit
Agreement), (b) Indebtedness incurred in violation of the terms of the Indenture
including, without limitation, Indebtedness claiming to be subordinated to any
other Indebtedness and senior to the Notes, (c) Indebtedness to trade creditors,
(d) Disqualified Capital Stock, and (e) any liability for taxes owed or owing by
Sun International, SINA or such Guarantor.
"Significant Subsidiary" shall have the meaning provided under Regulation
S-X under the Securities Act, as in effect on the Issue Date.
"Stated Maturity", when used with respect to any Note, means .
89
<PAGE>
"Subordinated Indebtedness" means Indebtedness of Sun International, SINA or
a Guarantor that is subordinated in right of payment to the Notes or such
Guarantee, as applicable, in any respect or, for purposes of the definition of
Restricted Payments only, has a stated maturity on (except for the Notes) or
after the Stated Maturity.
"Subsidiary", with respect to any person, means (i) a corporation a majority
of whose Equity Interests with voting power, under ordinary circumstances, to
elect directors is at the time, directly or indirectly, owned by such person, by
such person and one or more Subsidiaries of such person or by one or more
Subsidiaries of such person, (ii) any other person (other than a corporation) in
which such person, one or more Subsidiaries of such person, or such person and
one or more Subsidiaries of such person, directly or indirectly, at the date of
determination thereof has at least majority ownership interest, or (iii) a
partnership in which such person or a Subsidiary of such person is, at the time,
a general partner. Notwithstanding the foregoing, an Unrestricted Subsidiary
shall not be a Subsidiary of Sun International or any Subsidiary of Sun
International. Unless the context requires otherwise, Subsidiary means each
direct and indirect Subsidiary of Sun International.
"Unrestricted Subsidiary" means any subsidiary of Sun International (other
than SINA) that does not own any Capital Stock of, or own or hold any Lien on
any property of, Sun International or any other Subsidiary of Sun International
or SINA and that shall be designated an Unrestricted Subsidiary by the Board of
Directors of Sun International; PROVIDED, that (i) such subsidiary shall not
engage, to any substantial extent, in any line or lines of business activity
other than a Related Business, (ii) neither immediately prior thereto nor after
giving pro forma effect to such designation would there exist a Default or Event
of Default and (iii) immediately after giving pro forma effect thereto, Sun
International could incur at least $1.00 of Indebtedness pursuant to the Debt
Incurrence Ratio in the covenant "Limitation on Incurrence of Additional
Indebtedness and Disqualified Capital Stock". The Board of Directors of Sun
International may designate any Unrestricted Subsidiary to be a Subsidiary,
PROVIDED, that (i) no Default or Event of Default is existing or will occur as a
consequence thereof and (ii) immediately after giving effect to such
designation, on a pro forma basis, Sun International could incur at least $1.00
of Indebtedness pursuant to the Debt Incurrence Ratio in the covenant
"Limitation on Incurrence of Additional Indebtedness and Disqualified Capital
Stock". Each such designation shall be evidenced by filing with the Trustee a
certified copy of the resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing conditions.
"wholly owned Subsidiary" means a Subsidiary all the Equity Interests of
which are owned by Sun International or one or more wholly owned Subsidiaries of
Sun International, except for directors' qualifying shares.
90
<PAGE>
TAX CONSEQUENCES
The statements herein regarding taxation are based on the laws of The
Bahamas and the United States in force as of the date of this Prospectus and are
subject to any changes in law occurring after such date, which changes could be
made on a retroactive basis. Holders of the Outstanding Notes contemplating
acceptance of the Exchange Offer are advised to consult their tax advisors
regarding the tax consequences of the Exchange Offer.
CERTAIN BAHAMIAN TAX CONSIDERATIONS
The following is a brief and general summary of certain Bahamian tax matters
as they may relate to the Issuers and the Holders of the Notes. The discussion
is not exhaustive and is based on Bahamian law currently in effect.
The Bahamas does not impose any income, capital gains or withholding taxes.
Therefore, the Company is not subject to income tax in The Bahamas on an ongoing
basis, although the Company is subject to gaming taxes and other governmental
fees and charges. See "Business--Certain Matters Affecting the Company's Bahamas
Operations". In addition, payments of interest with respect to the Notes will
not be subject to any withholding tax. Any capital gains realized on the sale or
exchange of the Notes will not be subject to Bahamian taxes, and no Bahamian
stamp duty will be due with respect to such disposition. Any capital gains
realized on the sale or exchange of the Ordinary Shares will not be subject to
Bahamian taxes, and no Bahamian stamp duty will be due with respect to such
disposition.
CERTAIN UNITED STATES TAX CONSIDERATIONS
The following summary describes the material U.S. federal income tax
consequences to initial holders of the Notes who are subject to U.S. net income
tax with respect to the Notes ("U.S. persons") and who hold the Notes as capital
assets. There can be no assurance that the U.S. Internal Revenue Service (the
"IRS") will take a similar view of the purchase, ownership or disposition of the
Notes. This discussion is based upon the provisions of the Internal Revenue Code
of 1986, as amended, Treasury regulations, rulings and judicial decisions now in
effect, all of which are subject to change. It does not include any description
of the tax laws of any state, local or foreign governments or any estate or gift
tax considerations that may be applicable to the Notes or holders thereof. It
does not discuss all aspects of U.S. federal income taxation that may be
relevant to a particular investor in light of his particular investment
circumstances or to certain types of investors subject to special treatment
under the U.S. federal income tax laws (for example, dealers in securities or
currencies, S corporations, life insurance companies, tax-exempt organizations,
taxpayers subject to the alternative minimum tax and non-U.S. persons) and also
does not discuss Notes held as a hedge against currency risks or as part of a
straddle with other investments or part of a "synthetic security" or other
integrated investment (including a "conversion transaction") comprised of a Note
and one or more other investments, or situations in which the functional
currency of the holder is not the U.S. dollar.
The exchange of an Outstanding Note by a holder for an Exchange Note should
not constitute a taxable exchange. The exchange will not result in income, gain
or loss to holders of Notes who participate in the Exchange Offer, or to the
Issuers. Such holders shall have the same adjusted basis and holding period in
Exchange Notes immediately after the exchange as the holders had in the
Outstanding Notes immediately prior to the exchange.
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account in
connection with the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Notes received in
exchange for Outstanding Notes if such Outstanding Notes were acquired as a
result of market-making activities or other trading activities. The Issuers have
agreed that for a period of 180 days after the Expiration Date, they will make
this Prospectus, as amended or supplemented, available to any broker-dealer that
requests such documents in the Letter of
91
<PAGE>
Transmittal, for use in connection with any such resale. In addition, until
, 1997 (90 days after the date of this Prospectus), all dealers
effecting transactions in the Exchange Notes may be required to deliver a
prospectus.
The Issuers will not receive any proceeds from any sale of Exchange Notes by
broker-dealers. Exchange Notes received by broker-dealers for their own account
in connection with the Exchange Offer may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the Exchange Notes or a combination of such
methods of resale, at market prices prevailing at the time or resale, at prices
related to such prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Exchange Notes. Any
broker-dealer that resells Exchange Notes that were received by it for its own
account in connection with the Exchange Offer and any broker or dealer that
participates in a distribution of such Exchange Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act, and any profit on any
such resale of Exchange Notes and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that by acknowledging that it will deliver
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act.
LEGAL MATTERS
Certain legal matters with respect to the issuance of the Exchange Notes
will be passed upon for the Issuers and the Guarantors by Cravath, Swaine &
Moore, New York, with respect to matters of United States law, Harry B. Sands
and Company with respect to matters of Bahamian law, Smith-Hughes, Raworth &
McKenzie with respect to British Virgin Islands law, Kozlov, Seaton, Romanini,
Brooks & Greenberg with respect to New Jersey law and Rome McGuigan Sabanosh,
P.C. with respect to Connecticut law.
EXPERTS
The consolidated financial statements of Sun International Hotels Limited
for the years ended December 31, 1994, 1995 and 1996 included herein, to the
extent and for the periods indicated in the reports thereon, have been audited
by Arthur Andersen LLP, independent public accountants, and are included herein
in reliance upon the authority of such firm as experts in accounting and
auditing.
The consolidated financial statements and schedule of Sun International
North America, Inc. incorporated by reference in this Prospectus and
Registration Statement have been audited by Ernst & Young LLP, independent
auditors, to the extent indicated in their report thereon also incorporated by
reference herein and in the Registration Statement. Such consolidated financial
statements and schedule have been incorporated herein by reference in reliance
upon such report given upon the authority of such firm as experts in accounting
and auditing.
92
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
SUN INTERNATIONAL HOTELS LIMITED
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Report of Independent Public Accountants................................................................... F-2
Audited Financial Statements:
Consolidated Balance Sheets as at December 31, 1995 and 1996............................................. F-3
Consolidated Statements of Operations for the years ended December 31, 1994, 1995 and 1996............... F-4
Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 1994, 1995
and 1996................................................................................................ F-5
Consolidated Statements of Cash Flows for the years ended December 31, 1994, 1995 and 1996............... F-6
Notes to Consolidated Financial Statements............................................................... F-7
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO SUN INTERNATIONAL HOTELS LIMITED:
We have audited the accompanying consolidated balance sheets of Sun
International Hotels Limited and subsidiaries as of December 31, 1995 and 1996,
and the related consolidated statement of operations, shareholders' equity and
cash flows for each of the three years in the period ended December 31, 1996.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Sun International Hotels
Limited and subsidiaries as of December 31, 1995 and 1996 and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1996 in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
February 21, 1997
F-2
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS OF U.S. DOLLARS)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1995 1996
------------ ------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents.......................................................... $ 14,770 $ 97,206
Restricted cash equivalents........................................................ 120 25,658
Trade receivables, net............................................................. 17,619 27,386
Due from affiliates................................................................ 3,629 5,068
Inventories........................................................................ 3,682 5,837
Prepaid expenses................................................................... 2,139 6,243
------------ ------------
Total current assets............................................................. 41,959 167,398
Property and equipment, net.......................................................... 248,136 731,185
Subordinated notes receivable........................................................ 39,784 66,919
Due from affiliates.................................................................. 1,288 1,089
Investment in associated companies................................................... 32,015 33,126
Deferred charges and other assets.................................................... 7,245 23,979
Goodwill............................................................................. 98,923
------------ ------------
Total assets..................................................................... $ 370,427 $1,122,619
------------ ------------
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt............................................... $ 5,000 $ 747
Accounts payable and other liabilities............................................. 41,613 107,819
Due to affiliates.................................................................. 8,507
Capital creditors.................................................................. 2,446
------------ ------------
Total current liabilities........................................................ 55,120 111,012
------------ ------------
Long-term debt, net of current maturities............................................ 116,153 262,618
------------ ------------
Deferred income taxes................................................................ 46,000
------------ ------------
Commitments and contingencies (Note 15)..............................................
Redeemable Common Stock.............................................................. 63,543
Shareholders' equity:
Ordinary shares.................................................................... 17 32
Capital in excess of par........................................................... 143,257 666,262
Accumulated earnings (deficit)..................................................... (7,663) 36,695
------------ ------------
Total shareholders' equity....................................................... 135,611 702,989
------------ ------------
Total liabilities and shareholders' equity......................................... $ 370,427 $1,122,619
------------ ------------
------------ ------------
</TABLE>
The accompanying notes are an integral part of these balance sheets.
F-3
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------
<S> <C> <C> <C>
1994 1995 1996
---------- ---------- ----------
Revenues:
Gaming...................................................................... $ 34,204 $ 79,605 $ 77,342
Rooms....................................................................... 9,114 50,412 67,243
Food and beverage........................................................... 14,097 50,806 60,372
Tour operations............................................................. 7,809 16,338 15,048
Management and other fees................................................... 4,171 4,858 8,896
Other revenues.............................................................. 10,562 21,195 23,317
---------- ---------- ----------
Gross revenues................................................................ 79,957 223,214 252,218
Less: Promotional allowances................................................ (3,217) (9,274) (12,102)
---------- ---------- ----------
Net revenues.................................................................. 76,740 213,940 240,116
---------- ---------- ----------
Costs and expenses:
Gaming...................................................................... 22,222 44,388 42,975
Rooms....................................................................... 5,357 9,696 12,047
Food and beverage........................................................... 14,392 34,167 41,069
Other operating expenses.................................................... 18,430 33,677 37,505
Selling, general and administrative......................................... 21,060 33,153 34,663
Tour operations............................................................. 8,669 16,148 15,262
Corporate expenses.......................................................... 5,054 9,485 10,895
Depreciation................................................................ 997 10,236 11,442
---------- ---------- ----------
Total operating expenses.................................................. 96,181 190,950 205,858
---------- ---------- ----------
Income (loss) from operations................................................. (19,441) 22,990 34,258
---------- ---------- ----------
Other income (expense):
Interest income............................................................. 750 2,426 12,499
Interest expense............................................................ (192) (9,746) (3,133)
Equity in earnings from associated companies................................ 1,566 2,313 2,530
Gain on sale of equity interest in subsidiary............................... 1,861
Business combination costs.................................................. (1,000)
Other, net.................................................................. 911 144
---------- ---------- ----------
2,985 (4,096) 12,040
---------- ---------- ----------
Income (loss) before provision for income taxes............................... (16,456) 18,894 46,298
Provision for income taxes.................................................... 19 535 576
---------- ---------- ----------
Net income (loss)............................................................. $ (16,475) $ 18,359 $ 45,722
---------- ---------- ----------
---------- ---------- ----------
Earnings per share............................................................ $ (1.06) $ 0.87 $ 1.58
---------- ---------- ----------
---------- ---------- ----------
Weighted average number of shares outstanding (in thousands).................. 15,482 21,194 28,915
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(IN THOUSANDS OF U.S. DOLLARS)
<TABLE>
<CAPTION>
ORDINARY SHARES CAPITAL IN ACCUMULATED
------------------------ EXCESS OF EARNINGS
NUMBER AMOUNT PAR (DEFICIT) TOTAL
----------- ----------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1993 8,852 $ 44 $ 25,462 $ 608 $ 26,114
Issuance of Series B Shares..................... 6,000 30 91,613 91,643
Stock issuance costs............................ (1,526) (1,526)
Accretion of Series A Shares.................... (925) (925)
Translation reserves............................ 205 205
Net loss........................................ (16,475) (16,475)
Dividends declared.............................. (4,516) (4,516)
----------- --- ------------ ------------ ----------
Balance at December 31, 1994 14,852 74 114,624 (20,178) 94,520
Issuance of Ordinary Shares..................... 2,100 11 31,489 31,500
Stock issuance costs............................ (1,401) (1,401)
Accretion of Series A Shares.................... (1,523) (1,523)
Change in par value............................. 68 68
Translation reserves............................ (68) 71 3
Net income...................................... 18,359 18,359
Distributions in accordance with the Combination
Agreement...................................... (5,915) (5,915)
----------- --- ------------ ------------ ----------
Balance at December 31, 1995 16,952 17 143,257 (7,663) 135,611
Conversion of Series A Shares................... 4,000 4 63,839 63,843
Issuance of Ordinary Shares..................... 8,314 8 284,337 284,345
Stock issuance costs............................ (17,868) (17,868)
Accretion of Series A Shares.................... (300) (300)
Translation reserves............................ (1,364) (1,364)
Net income...................................... 45,722 45,722
Issuance of Ordinary Shares pursuant to the
Merger......................................... 3,441 3 192,997 193,000
----------- --- ------------ ------------ ----------
Balance at December 31, 1996 32,707 $ 32 $ 666,262 $ 36,695 $ 702,989
----------- --- ------------ ------------ ----------
----------- --- ------------ ------------ ----------
</TABLE>
The accompanying notes are an integral part of these statements.
F-5
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF U.S. DOLLARS)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------
<S> <C> <C> <C>
1994 1995 1996
---------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)........................................................... $ (16,475) $ 18,359 $ 45,722
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Depreciation and amortization............................................. 997 10,794 11,948
Provision for doubtful receivables........................................ 1,094 2,161 1,639
Increase in receivables................................................... (4,384) (9,763) (11,679)
(Increase) decrease in inventories and prepaid expenses................... 76 (1,765) (3,010)
Increase in deferred charges and other assets............................. (284) (858) (1,524)
Increase (decrease) in accounts payable and other liabilities............. 15,862 8,961 (1,603)
Gain on sale of assets.................................................... (1,861) (911) (144)
Equity in earnings of associated companies................................ (1,566) (2,313) (2,530)
---------- ---------- ----------
Net cash flows provided by (used in) operating activities..................... (6,541) 24,665 38,819
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for capital expenditures........................................... (108,048) (46,800) (79,476)
Acquisition of business..................................................... (44,659)
Cash acquired in connection with Merger..................................... 33,805
Proceeds from the sale of assets............................................ 1,811 1,392 681
Dividends received from associated companies................................ 1,234 1,453 1,419
Increased investment in associated companies................................ (1,888) (1,739)
Loans to associated companies............................................... (1,181)
---------- ---------- ----------
Net cash flows used in investing activities................................... (150,843) (45,843) (45,310)
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock...................................... 91,643 31,500 284,345
Borrowings.................................................................. 74,022 45,000
Payments for expenses of offered ordinary shares............................ (1,526) (1,401) (17,868)
Payments to affiliates...................................................... (3,300) (8,506)
Purchase of subordinated loan notes......................................... (38,300) (42,000)
Sale of subordinated loan notes............................................. 22,502
Decrease in amounts due to affiliates....................................... (2,346) (1,568)
Payments to secure borrowings............................................... (579) (3,909)
Repayment of borrowings..................................................... (91) (120,099)
Proceeds from/repayment of bridge loans..................................... 30,000 (30,000)
---------- ---------- ----------
Net cash provided by financing activities..................................... 191,702 1,352 114,465
---------- ---------- ----------
Net increase (decrease) in cash and cash equivalents.......................... 34,318 (19,826) 107,974
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD.............................. 398 34,716 14,890
---------- ---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD.................................... $ 34,716 $ 14,890 $ 122,864
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these statements.
F-6
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN U.S. DOLLARS)
NOTE 1 -- ORGANIZATION AND BASIS OF PRESENTATION
Sun International Hotels Limited ("SIHL") is an international resort and
gaming company which develops and manages premier resort and casino properties.
The term "Company" as used herein includes SIHL and its subsidiaries. The
Company currently operates resort hotels and casinos in The Bahamas, Atlantic
City, Connecticut, the Indian Ocean and France. The Company's largest property
is Atlantis, an 1,147 room resort and casino located on Paradise Island, The
Bahamas. The majority of the Company's revenues are derived from its hotel and
gaming operations.
THE BAHAMAS
SIHL was incorporated under the laws of the Commonwealth of The Bahamas on
August 13, 1993 for the purpose of acquiring the Paradise Island operations (the
"Paradise Island Business") of Resorts International, Inc. ("RII").
On May 3, 1994, the Company consummated the acquisition of the Paradise
Island Business in a transaction which resulted in the ownership of 60% of SIHL
by Sun International Investments Limited ("SIIL").
As a result of the purchase of the Paradise Island Business, the Company,
through certain Bahamian subsidiaries, owns and operates the Atlantis Resort and
Casino Complex, the Ocean Club Golf & Tennis Resort, the Paradise Paradise Beach
Resort, a golf course, a water plant, an airport facility and other improvements
on Paradise Island as well as land available for sale or development.
The Company accounted for the purchase of the Paradise Island Business in
accordance with APB 16, "Business Combinations" utilizing the purchase method of
accounting. In accordance with the purchase method of accounting the purchase
price was allocated to the assets and liabilities acquired based on their fair
market value on the date of the acquisition and the revenues and expenses of the
Paradise Island Business were included in the financial statements of the
Company from May 3, 1994. If the acquisition had occurred on January 1, 1994,
pro forma results of operations for the year ended December 31, 1994 would have
been (in thousands, except per share data): revenues--$144,705; net
loss--$3,093; loss per share--$.20.
ATLANTIC CITY
On December 16, 1996 (the "Effective Date"), Griffin Gaming & Entertainment,
Inc. ("GGE"), formerly RII, became a wholly owned subsidiary of SIHL. Subsequent
to the merger, GGE's name was changed to Sun International North America, Inc.
("SINA").
Pursuant to the Merger Agreement, (the "Merger") each share of SINA common
stock outstanding immediately prior to the Effective Date of the Merger was
converted into .4324 of the Company's Ordinary Shares. Also, each outstanding
share of SINA's Class B common stock was converted into .1928 Ordinary Shares.
Each .1928 Share received in exchange for a share of SINA's Class B common stock
trades as part of a unit along with $1,000 principal amount of 11.375% Junior
Mortgage Notes due December 15, 2004 (the "Junior Mortgage Notes") issued by a
subsidiary of SINA.
The Company accounted for the Merger in accordance with APB 16, "Business
Combinations" utilizing the purchase method of accounting. The purchase method
of accounting requires that SINA's net assets and liabilities acquired be
recorded at their fair values based on independent appraisals, evaluation,
estimations and other studies. As such appraisals and other valuations are
incomplete at this time, the fair value adjustments reflected herein are
management's preliminary determination of such values based on information
currently available. Once all appraisals and valuations are complete, it is
possible that additional valuation adjustments may be required.
F-7
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN U.S. DOLLARS)
NOTE 1 -- ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)
The following unaudited pro forma information reflects the results of the
Company's operations as though the Merger had occurred on January 1, 1996. The
pro forma information is not necessarily indicative of future results or what
the Company's results of operations would have been had the Merger occurred on
January 1, 1996.
<TABLE>
<CAPTION>
1996
----------
<S> <C>
Net revenues...................................................................... $ 532,061
Net income........................................................................ $ 52,584
Earnings per share................................................................ $ 1.60
</TABLE>
CONNECTICUT
The Company has a 50% interest in Trading Cove Associates ("TCA"), a
Connecticut general partnership that entered into a management agreement (the
"Management Agreement") with the Mohegan Tribal Gaming Authority ("MTGA"), an
instrumentality of the Mohegan Tribe (the "Tribe"), to develop and manage a
casino resort and entertainment complex situated in the town of Montville,
Connecticut (the "Mohegan Sun Casino"). The Mohegan Sun Casino opened on October
12, 1996. The Management Agreement has a seven year term (subject to a buy-out
option after five years) and provides that TCA is entitled to receive between
30% and 40% of the net profits, as defined, of the Mohegan Sun Casino. The
Management Agreement covers development, management, marketing and
administration services.
In addition, the Company and TCA acquired $38,300,000 and $1,700,000
respectively, of subordinated notes (the "Subordinated Notes") issued by the
MTGA. As of November 8, 1996, the Company sold $19,150,000 of the Subordinated
Notes and the accrued interest thereon to one of the partners of TCA at book
value as of the date of the sale. Also, as of that date, TCA distributed
$850,000 of Subordinated Notes plus accrued interest to the Company as a return
of capital. Interest income on the Subordinated Notes is 15% per annum. Interest
payable on the Subordinated Notes can be satisfied by the issuance of additional
Subordinated Notes. All interest payments to date have been satisfied in this
manner. In addition, TCA is obligated to pay certain amounts to the Company, as
a priority payment from its management fee, for services provided by the
Company. These amounts are paid as TCA receives sufficient management fees to
meet the priority distribution. The Company believes the fair market value of
the Subordinated Notes approximates their carrying value.
INDIAN OCEAN AND FRANCE
Effective July 1, 1993, SIIL acquired the stock of Aberdeen Management
Limited, a Guernsey corporation (AML), Sun Hotels International Bermuda Limited,
a Bermuda corporation (SHIB), Sun International Management Limited, a British
Virgin Islands corporation (SIML), Sun International Finance Limited, a British
Virgin Islands corporation (SIF), Sun Hotels International Management NV, a
Netherlands Antilles corporation (SHIM), and BIRBO NV, a Netherlands Antilles
corporation (BIRBO NV), collectively the "SIIL Businesses", in a business
combination accounted for as a purchase. The principal activities of the
entities are the investment in hotels and casinos and the provision of hotel and
casino management, project consulting and executive management services.
As a result of the Combination and Restructuring Agreement described below,
the SIIL businesses were transferred to the Company in April 1995.
RIGHTS OFFERING AND COMBINATION OF SIHL AND SIIL BUSINESSES
In April 1995, the Company completed a rights offering (the "Rights
Offering") pursuant to which holders of the Company's capital stock the
("Ordinary Shares") were issued rights to acquire 2,100,000 ordinary shares at a
price of $15 per share.
F-8
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN U.S. DOLLARS)
NOTE 1 -- ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)
Simultaneously with the completion of the Rights Offering, the Company
consummated a Combination and Restructuring Agreement (the "Combination
Agreement") with SIIL pursuant to which SIIL transferred the SIIL Businesses to
the Company in exchange for additional equity of the Company.
For financial reporting purposes the transfer of the SIIL Businesses to SIHL
was accounted for as a reorganization of entities under common control and
treated in a manner similar to a pooling of interests. Accordingly, the
accompanying financial statements of SIHL have been restated for all periods
presented to include the SIIL Businesses. Under the terms of the agreement all
profits of the businesses prior to May 1, 1995 are attributable to SIIL and
therefore these profits have been recorded as a distribution of reserves in
1995, and are included within amounts due to affiliates at December 31, 1995.
In connection with the Combination, SIIL also transferred to the Company its
50% interest in TCA.
SHARE OFFERING
On March 1, 1996, the Company completed a public offering of 8,049,737 of
its Ordinary Shares at a price of $35 per share (the "Public Offering"). Prior
to the Public Offering the Company had two series of stock, the Series A
Ordinary Shares (the "Series A Shares") and the Series B Ordinary Shares (the
"Series B Shares"). As a result of the Public Offering, the Company's Series A
Ordinary Shares and Series B Ordinary Shares were automatically redesignated as
Ordinary Shares without reference to series (the "Redesignation"). In addition,
the Redesignation resulted in the elimination of a put right associated with the
Series A Ordinary Shares and an increase of $63,843,000 in shareholders' equity
on the Company's consolidated balance sheet. Prior to the Redesignation holders
of the Series A Shares were entitled to sell, and require the Company to
purchase, any Series A Shares tendered at a price of $17.50 per share on May 3,
1999 (the "Put Right"). While the Series A Shares were outstanding, the Company
accreted the difference between the original issue price of $15 and the Put
Right price by charging amounts to equity based on the effective interest
method.
NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of SIHL and its
subsidiaries. All significant intercompany transactions and balances have been
eliminated on consolidation. Investments in associated companies, which are less
than 50% and more than 20% owned, are accounted for under the equity method of
accounting.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
The Company provides an allowance for doubtful accounts arising from casino,
hotel, and other services, which is based upon a specific review of certain
outstanding receivables. In determining the amount of the allowance the Company
is required to make certain estimates and assumptions and actual results may
differ from these estimates and assumptions.
REVENUE RECOGNITION
The Company recognizes the net win from casino gaming activities (the
difference between gaming wins and losses) as gaming revenues. Revenues from
hotel and related services and from theater ticket sales are
F-9
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN U.S. DOLLARS)
NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
recognized at the time the related service is performed. Management fees and
other operating revenues include fees charged to unconsolidated affiliates for
casino hotel management, executive management and project consulting fees.
Revenues are recorded at the time the service is provided.
PROMOTIONAL ALLOWANCES
The retail value of accommodations, food, beverage and other services
provided to customers without charge is included in gross revenue and deducted
as promotional allowances. The estimated departmental costs of providing such
promotional allowances are included in gaming costs and expenses as follows (in
thousands):
<TABLE>
<CAPTION>
1994 1995 1996
--------- --------- ---------
<S> <C> <C> <C>
Rooms............................................................ $ 776 $ 670 $ 919
Food and Beverage................................................ 2,461 4,047 4,131
Other............................................................ 60 167 260
--------- --------- ---------
$ 3,297 $ 4,884 $ 5,310
--------- --------- ---------
--------- --------- ---------
</TABLE>
FOREIGN CURRENCY
Transactions denominated in foreign currencies are recorded in the local
currency at actual exchange rates at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the balance sheet
dates are reported at the rates of exchange prevailing at those dates.
Any gains or losses arising on monetary assets and liabilities from a change
in exchange rates subsequent to the date of the transaction have been included
in other operating expenses in the accompanying financial statements. These
amounts were not significant for the years ended December 31, 1994, 1995, and
1996.
For the purposes of consolidation and application of the equity method of
accounting the current rate method is used, under which translation gains or
losses are shown as a component of shareholders' equity.
CASH EQUIVALENTS
The Company considers all of its short-term money market securities
purchased with maturities of three months or less to be cash equivalents. The
carrying value of cash equivalents approximates fair value due to the short
maturity of these instruments.
INVENTORIES
Inventories of provisions and supplies are carried at the lower of cost
(first-in, first-out) and market value.
PROPERTY AND EQUIPMENT
Property and equipment are depreciated over their estimated useful lives
using the straight-line method. Interest costs of $1,464,000 and $438,000 were
capitalized in 1994 and 1996, respectively. No interest costs were capitalized
in 1995.
GOODWILL
Goodwill is amortized on a straight line basis over 40 years. Goodwill
relating to the equity interests in associates is included as part of investment
in associates in the accompanying consolidated balance sheets. It is the
Company's policy to amortize goodwill over a period not exceeding 40 years.
Included in equity in earnings of associated companies for the years ended
December 31, 1994, 1995 and 1996 was $529,000, $264,000 and $263,000,
respectively, of amortization expense relating to such goodwill.
F-10
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN U.S. DOLLARS)
NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
STOCK OPTION COMPENSATION
The Company has elected to apply Accounting Principles Board Opinion No. 25
"Accounting for Stock Issued to Employees," ("APB 25") in accounting for
compensation under its stock option plans in lieu of the alternative fair value
accounting provided for under Statement of Financial Accounting Standards No.
123 "Accounting for Stock-Based Compensation" ("SFAS 123"). Certain pro forma
disclosures related to SFAS 123 are included in Note 11.
LONG-LIVED ASSETS
The Company adopted the provisions of Statement of Financial Accounting
Standards No. 121 "Accounting for the Impairment of Long Lived Assets ("SFAS
121"). SFAS 121 requires, among other things, that an entity review its
long-lived assets and certain related intangibles for impairment whenever
changes in circumstances indicate that the carrying amount of an asset may not
be fully recoverable. As a result of its review, the Company does not believe
that any asset impairment exists in the recoverability of its long-lived assets.
INCOME TAXES
The Company is subject to income taxes in certain jurisdictions.
Accordingly, the accompanying financial statements include provisions and
benefits for income taxes based on prevailing tax laws of those jurisdictions.
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes." Under
this method, the deferred tax liability is determined based on the difference
between the financial reporting and tax bases of assets and liabilities at
enacted tax rates which will be in effect for the years in which the differences
are expected to reverse. Deferred tax liabilities are recognized for differences
that will result in taxable amounts in future years. Deferred tax assets are
recognized for differences that will result in deductible amounts in future
years and for carry-forwards. A valuation allowance is recognized based on
estimates of likelihood that some portion or all of the deferred tax asset will
not be realized.
PER SHARE DATA
Per share data was computed using the weighted average number of Ordinary
Shares outstanding.
STOCK SPLIT
All share, and per share, information given herein has been restated to
reflect a two-for-one stock split announced by the Company on September 29, 1995
and effective from October 13, 1995.
NOTE 3 -- CASH AND CASH EQUIVALENTS
Cash equivalents at December 31, 1996 and 1995 included reverse repurchase
agreements (federal government securities purchased under agreements to resell
those securities) under which the Company had not taken delivery of the
underlying securities and investments in a money market fund which invests
exclusively in U.S. Treasury obligations.
F-11
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN U.S. DOLLARS)
NOTE 4 -- RESTRICTED CASH EQUIVALENTS
Components of restricted cash equivalents were as follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
<S> <C> <C>
1995 1996
--------- ---------
Cash to secure letter of credit......................................... $ 15,000
Cash to secure borrowings............................................... 6,000
Showboat lease escrow................................................... 3,694
Other................................................................... $ 120 964
--------- ---------
$ 120 $ 25,658
--------- ---------
--------- ---------
</TABLE>
NOTE 5 -- TRADE RECEIVABLES
Components of trade receivables were as follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
<S> <C> <C>
1995 1996
--------- ---------
Gaming.................................................................. $ 8,822 $ 13,610
Less: allowance for doubtful accounts................................. (2,620) (5,574)
--------- ---------
6,202 8,036
--------- ---------
Non-gaming:
Hotel and related..................................................... 8,858 14,696
Other................................................................. 3,867 7,597
--------- ---------
12,725 22,293
Less: allowance for doubtful accounts................................. (1,308) (2,943)
--------- ---------
11,417 19,350
--------- ---------
$ 17,619 $ 27,386
--------- ---------
--------- ---------
</TABLE>
NOTE 6 -- PROPERTY AND EQUIPMENT
Components of property and equipment were as follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
<S> <C> <C>
1995 1996
---------- ----------
Land and land rights.................................................... $ 78,837 $ 354,936
Land improvements and utilities......................................... 83,525 84,915
Hotels and other buildings.............................................. 56,186 219,806
Furniture, machinery and equipment...................................... 38,611 72,271
Construction in progress................................................ 2,008 22,159
---------- ----------
259,167 754,087
Less: accumulated depreciation........................................ (11,031) (22,902)
---------- ----------
$ 248,136 $ 731,185
---------- ----------
---------- ----------
</TABLE>
F-12
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN U.S. DOLLARS)
NOTE 7 -- DEFERRED CHARGES AND OTHER ASSETS
Components of deferred charges and other assets were as follows (in
thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
<S> <C> <C>
1995 1996
--------- ---------
CRDA bonds and deposits, net................................................................ $ 10,393
Mohegan Sun Casino.......................................................................... $ 4,397 5,089
Debt issuance costs......................................................................... 1,379 5,320
Other....................................................................................... 1,469 3,177
--------- ---------
$ 7,245 $ 23,979
--------- ---------
--------- ---------
</TABLE>
Costs incurred in relation to the Mohegan Sun Casino are either refundable
or are being amortized over the seven year term of the management agreement.
NOTE 8 -- ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Components of accounts payable and accrued liabilities were as follows (in
thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
<S> <C> <C>
1995 1996
--------- ----------
Trade payables............................................................................. $ 18,771 $ 38,951
Accrued payroll and related taxes and benefits............................................. 4,225 15,163
Customer deposits and unearned revenues.................................................... 8,750 7,939
Accrued gaming taxes, fees and related assessments......................................... 3,344 9,176
Accrued Merger and related costs........................................................... 8,527
Accrued interest........................................................................... 1,560 8,346
Other accrued liabilities.................................................................. 4,963 19,717
--------- ----------
$ 41,613 $ 107,819
--------- ----------
--------- ----------
</TABLE>
F-13
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN U.S. DOLLARS)
NOTE 9 -- LONG-TERM DEBT
Long-term debt consisted of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
<S> <C> <C>
1995 1996
---------- ----------
Mortgage Notes............................................................................ $ 125,000
Unamortized premium..................................................................... 7,500
----------
132,500
----------
Junior Mortgage Notes..................................................................... 22,101
Unamortized premium..................................................................... 1,326
----------
23,427
----------
Showboat Notes............................................................................ 105,333
----------
Borrowing under bank credit facilities:
Paradise Island......................................................................... $ 80,000
Mohegan Sun Casino...................................................................... 40,000
Other..................................................................................... 1,153 2,105
---------- ----------
121,153 263,365
Less: amounts due within one year....................................................... (5,000) (747)
---------- ----------
$ 116,153 $ 262,618
---------- ----------
---------- ----------
</TABLE>
MORTGAGE NOTES AND JUNIOR MORTGAGE NOTES
In 1994, SINA issued $125,000,000 of 11% Mortgage Notes (the "Mortgage
Notes") due September 15, 2003 and $35,000,000 of 11.375% Junior Mortgage Notes.
The Mortgage Notes and the Junior Mortgage Notes are guaranteed by Resorts
International Hotels, Inc., ("RIH") a wholly owned subsidiary of SINA.
The Mortgage Notes and the Junior Mortgage Notes are secured by liens on the
Resorts Casino Hotel, consisting of RIH's fee and leasehold interest in the
Resorts Casino Hotel, the contiguous parking garage and property, and related
personal property. The indenture pursuant to which the Mortgage Notes was issued
permits the liens securing the Mortgage Notes to be subordinated to a lien
securing a working capital facility of up to $20,000,000.
The Junior Mortgage Notes were issued as part of Units with SINA's Class B
common stock. Pursuant to the Merger, these Units consist of $1,000 principal
amount of Junior Mortgage Notes and .1928 of an Ordinary Share. These fractional
Ordinary Shares may not be transferred separately from the related Junior
Mortgage Note. In certain circumstances, interest payable on the Junior Mortgage
Notes may be satisfied by the issuance of additional Units.
The indenture pursuant to which the Mortgage Notes and the Junior Mortgage
Notes were issued (collectively the "Indentures") prohibit RIH and its
subsidiaries from paying dividends, from making other distributions in respect
of their capital stock, and from purchasing or redeeming their capital stock,
with certain exceptions, unless certain interest coverage ratios are attained.
In addition, the Indentures restrict RIH and its subsidiaries from incurring
additional indebtedness, with certain exceptions and limit intercompany loans by
RIH to SINA to loans from proceeds of a senior working capital facility of up to
$20,000,000 and other advantages not in excess of $1,000,000 in the aggregate at
any time outstanding. As of December 31, 1996, RIH had $21,642,000 of cash and
equivalents, all of which was restricted as to distribution under these
provisions.
F-14
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN U.S. DOLLARS)
NOTE 9 -- LONG-TERM DEBT (CONTINUED)
The First Mortgage Non-Recourse Pass-Through Notes due June 30, 2000 (the
"Showboat Notes") are non-recourse notes, secured by a mortgage encumbering by a
collateral assignment of the Showboat Lease, and by a pledge of any proceeds of
the sale of such mortgage and collateral assignment. Interest on the Showboat
Notes consists of a pass-through (subject to certain adjustments) of the lease
payments received pursuant to the lease of 10-acres of land under the Showboat
Casino Hotel (the "Showboat Lease").
PARADISE ISLAND CREDIT FACILITY
In 1996, the Company amended an existing credit facility (the "Revolving
Credit Facility") with a syndicate of banks led by The Bank of Nova Scotia, to
allow for borrowings up to $250 million. Loans under the Revolving Credit
Facility bear interest at (i) the higher of (a) The Bank of Nova Scotia's base
rate plus one and one half percent or (b) the Federal Funds rate plus 2% or (ii)
The Bank of Nova Scotia's reserve-adjusted LIBO rate plus 2.25%. Loans under the
Revolving Credit Facility may be prepaid and reborrowed at any time and are due
in full on October 15, 2001. Commitment fees are calculated at one half of one
percent per annum on the undrawn amount of the Revolving Credit Facility and are
due, along with accrued interest, quarterly.
The Revolving Credit Facility contains restrictive covenants which include
(a) restrictions on the payment of dividends, (b) minimum levels of earnings
before interest expense, income taxes, depreciation and amortization ("EBITDA")
and (c) a minimum relationship between EBITDA and interest expense and debt.
Prior to its amendment, the Revolving Credit Facility allowed borrowing up
to $80,000,000 and base interest at an annual rate of 2.5% above the LIBO rate
(6.625% at December 31, 1995). A standby commitment fee was payable on the
unused portion of the line at the rate of one half of one percent per annum.
Substantially all of the Company's assets, except its investment in SINA,
are pledged in connection with the Revolving Credit Facility. Amounts
outstanding under the Revolving Credit Facility were repaid in March 1996.
MOHEGAN SUN CASINO CREDIT FACILITY
The Company borrowed $40,000,000 under a credit facility from a syndicate of
banks led by The Bank of Nova Scotia. This credit facility accrued interest at
an annual rate of 2.75% above the LIBO rate. The credit facility was repaid in
March 1996.
OVERDRAFT LOAN FACILITY
Pursuant to a letter of commitment dated September 30, 1994, as amended,
between the Company and The Bank of Nova Scotia, the Company has a revolving
overdraft loan facility (the "Overdraft Facility") in the amount of Bahamian
$5,000,000 which was equal to United States $5,000,000 as of December 31, 1995
and 1996. The Overdraft Facility bears interest at The Bank of Nova Scotia's
Base Rate for Bahamian dollar loans plus 1.5% with repayment subject to annual
review. The Overdraft Facility is secured by substantially all of the Company's
Bahamian assets and ranks pari passu with the Paradise Island Credit Facility.
The carrying value of the long-term debt at December 31, 1995 and 1996
approximates its fair market value as the credit facilities' interest rates
fluctuate with current market rates and the Senior Notes and the Junior Notes
were restated to fair market value in connection with the Merger.
F-15
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN U.S. DOLLARS)
NOTE 10 -- SHAREHOLDERS' EQUITY
The Company's authorized and issued shares were as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------
<S> <C> <C> <C>
1995 1996
------------- -------------
Series A-- $0.001 each
Authorized.......................................................... 150,000,000
Issued.............................................................. 4,000,000
Series B-- $0.001 each
Authorized.......................................................... 100,000,000
Issued.............................................................. 16,952,380
Total Ordinary Shares--
Authorized.......................................................... 250,000,000 250,000,000
Issued.............................................................. 20,952,380 32,707,462
</TABLE>
In addition, there are 100,000,000 authorized preference shares of $.001 par
value each (the "Preference Shares"). As of December 31, 1996, no Preference
Shares had been issued.
NOTE 11 -- STOCK OPTIONS AND WARRANTS
On May 1, 1995, the shareholders of the Company approved a stock option plan
(the "Plan"). The option prices are equal to the market value per share of the
Ordinary Shares on the date of the grant. The Plan provides for the options to
become exercisable, unless otherwise specified by the Board of Directors and
subject to certain acceleration and termination provisions, after two years from
the date of grant in respect of 20% of such options, and thereafter in
installments of 20% per year over a four-year period. The options have a term of
10 years from the date of grant.
The option plan provides for options with respect to Ordinary Shares to be
granted to directors, officers and employees of SIHL and its subsidiaries.
Pursuant to the Merger, options that were granted under SINA's previous
stock options plans and which were outstanding as of the Effective Date (the
"SINA Options") remain outstanding and were amended in accordance with the
Merger Agreement. The SINA Options as amended entitle the holder to purchase the
same number of Ordinary Shares as the holder would have been entitled to receive
pursuant to the Merger, had such holder exercised his or her SINA Options
immediately prior to the Effective Date. Also, the exercise price was adjusted
accordingly. As a result of the Merger, and in accordance with the provisions in
the previous SINA stock option plans, all SINA Options became fully vested upon
consummation of the Merger.
F-16
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN U.S. DOLLARS)
NOTE 11 -- STOCK OPTIONS AND WARRANTS (CONTINUED)
A summary of the Company's stock option activity for 1996 and 1995 was as
follows:
<TABLE>
<CAPTION>
1996 1995
------------------------- -------------------------
WEIGHTED WEIGHTED
AVERAGE AVERAGE
EXERCISE EXERCISE
SHARES PRICE SHARES PRICE
---------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
Outstanding at beginning of year.......................... 1,732,754 $ 13.73 1,461,986 $ 12.86
Granted................................................... 103,429 45.68 270,768 18.44
Exercised................................................. (264,131) 11.78
Cancelled................................................. (200,029) 10.77
Converted SINA options to SIHL options.................... 268,316 19.76
---------- ----------
Outstanding at end of year................................ 1,640,339 14.18 1,732,754 13.73
---------- ----------
---------- ----------
Exercisable at end of year................................ 368,462 18.67 -0-
---------- ----------
---------- ----------
</TABLE>
For purposes of supplemental disclosures required by SFAS 123, the fair
value of options granted during 1995 and 1996 was estimated as of the respective
dates of grant using a Black-Scholes option pricing model with the following
weighted average assumptions for 1995 and 1996, respectively: risk-free interest
rates of 6.5% and 6.2%; volatility factors of the expected market price of the
Ordinary Shares of 42% for both periods; expected life of the options of 5 years
for the periods, and expected dividend yields of zero. The weighted average
grant date fair value of options granted during 1995 and 1996 was $8.94 and
$20.25, respectively. For pro forma purposes, the estimated fair value of
options is amortized to expense over the options' vesting period. Net earnings
on a pro forma basis, determined as if the Company had accounted for its stock
options under the fair value method of SFAS 123, were $18,030,000 and
$44,877,000, respectively, for the years 1995 and 1996, and earnings per share
were $0.85 and $1.55, respectively, for the years 1995 and 1996.
In 1994, SINA issued warrants (the "Warrants'), which were exercisable
through May 3, 1998, to purchase 933,370 shares of SINA Common Stock at $6.00
per share. Pursuant to the Merger Agreement and the terms of the Warrants, the
Warrants were adjusted into rights to purchase 403,589 Ordinary Shares at $13.88
per share. At December 31, 1996, no warrants had been exercised.
NOTE 12 -- RELATED PARTY TRANSACTIONS
LICENSE AND SERVICES AGREEMENTS
In connection with the Merger, SINA and RIH entered into a license and
services agreement (the "License and Services Agreement") with the Griffin
Group, Inc. ("Griffin Group"), which agreement grants to the Company a
non-exclusive license to use the name and likeness of Merv Griffin to advertise
and promote the Company's casino/hotel properties (the "Casino Properties"). The
Company also has the non-exclusive right to use certain shows and gaming
concepts set forth therein and the non-exclusive right to services provided by
Mr. Griffin, on a pay or play basis, as marketing consultant and as host,
producer, presenter and featured performer in various shows to be presented at
the Casino Properties.
As compensation under the License and Services Agreement, immediately prior
to the Merger, SINA paid Griffin Group fees totaling $10,973,000 for the license
and services through September 16, 2001. Also, all business, travel and other
expenses incurred by Griffin Group in connection with providing requested
services are to be paid by the Company as such expenses are incurred.
The License and Services Agreement is to continue until September 16, 2001
and provides for earlier termination by either the Company or Griffin Group
under certain circumstances. Upon any termination of the agreement, Griffin
Group is entitled to retain all monies paid to it and is entitled to be paid all
amounts
F-17
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN U.S. DOLLARS)
NOTE 12 -- RELATED PARTY TRANSACTIONS (CONTINUED)
owing to it as of the date of termination. Additionally, in the event of any
sale or other disposition of any of the Casino Properties, the use of the name
and likeness of Mr. Griffin must cease with respect to such property.
In the License and Services Agreement the Company agreed to indemnify,
defend and hold harmless Griffin Group and Mr. Griffin against certain claims,
losses and costs, and to maintain certain insurance coverage with Mr. Griffin
and Griffin Group as named insured.
In connection with the Merger, all prepaid fees under the License and
Services Agreement were written off as having indeterminable future value.
MANAGEMENT SERVICES
In the normal course of business, the Company undertakes transactions with a
number of unconsolidated affiliated companies. Certain of the Company's
subsidiaries provide project consulting and management services to such
affiliates, principally Mohegan Sun, Sun Indian Ocean and Sun France (see Note
1).
Due from Affiliates--Current were as follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1996
--------- ---------
<S> <C> <C>
Mohegan Sun................................................................ $ 902
Sun France................................................................. $ 391 346
Sun Indian Ocean........................................................... 3,077 3,820
Other...................................................................... 161
--------- ---------
$ 3,629 $ 5,068
--------- ---------
--------- ---------
</TABLE>
At December 31, 1995 and 1996, the Company had a non-current receivable from
Sun France of $1,288,000 and $1,089,000, respectively. In addition, at December
31, 1995, the Company had affiliated payables of $8,507,000, of which $8,418,000
was due to SIIL.
NOTE 13 -- RETIREMENT PLANS
Certain of the Company's subsidiaries participate in a defined contribution
plan covering substantially all of their full-time employees. The companies make
contributions to this plan based on a percentage of eligible employee
contributions. Total expense for this plan was $29,000, $58,000 and $55,000 for
the years ended December 31, 1994, 1995 and 1996, respectively.
In addition to the plan described above, union and certain other employees
of the Company's Bahamian subsidiaries are covered by multi-employer defined
benefit pension plans to which employers make contributions. In connection with
these plans, the Company was billed and paid $609,000, $1,745,000 and $1,771,579
for the years ended December 31, 1994, 1995 and 1996, respectively.
NOTE 14 -- INCOME TAXES
A significant portion of the Company's operations are located in The Bahamas
where there are no income taxes. Substantially all of the 1995 and 1996
provisions of $535,000 and $576,000 has been made based upon the earnings of the
Company's U.S. subsidiaries.
F-18
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN U.S. DOLLARS)
NOTE 14 -- INCOME TAXES (CONTINUED)
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. In connection with the
Merger, the Company acquired the deferred tax asset and liabilities of SINA. A
summary of the deferred tax assets and liabilities as of December 31, 1996 is as
follows (in thousands):
<TABLE>
<S> <C>
Deferred tax liabilities:
Basis differences on land held for investment, development or
resale........................................................ $ (42,100)
Basis differences on property and equipment.................... (64,400)
Other.......................................................... (2,800)
---------
Total deferred tax liabilities............................. (109,300)
---------
Deferred tax assets:
Net operating loss carryforwards............................... 197,500
Basis differences on land held for investment, development or
resale........................................................ 10,100
Book reserves not yet deductible for tax return purposes....... 26,300
Basis difference on debt....................................... 23,300
Tax credit carryforwards....................................... 1,000
Other.......................................................... 7,800
---------
Total deferred tax assets.................................. 266,000
Valuation allowance for deferred tax assets.................... (202,700)
---------
Deferred tax assets, net of valuation allowance............ 63,300
---------
Net deferred tax liabilities..................................... $ (46,000)
---------
---------
</TABLE>
For federal income tax purposes, SINA had net operating loss carryforwards
of approximately $564,000,000 at December 31, 1996; however, due to the Merger,
these net operating loss carryforwards (the "Pre-Change NOLs") are limited in
their availability to offset future taxable income of the Company. As a result
of these limitations, approximately $10,000,000 of Pre-Change NOLs will become
available for use each year through the year 2009. An additional $130,000,000 of
these Pre-Change NOLs would be available to offset gains on sales of assets
owned at the date of the Merger which are sold within five years of that date.
The remaining Pre-Change NOLs are expected to expire unutilized. The restricted
net operating loss carryforwards which the Company believes will become
available for utilization in spite of the limitations expire as follows:
$123,000,000 in 2005, $23,000,000 in 2006, $31,000,000 in 2007, $56,000,000 in
2008, $1,000,000 in 2009 and $6,000,000 in 2010.
Also at December 31, 1996, SINA had federal income tax credit carryforwards
of approximately $400,000, which are restricted as to use and expire $100,000
per year between 2006 and 2009, and federal AMT tax credits of approximately
$600,000, which carry forward indefinitely.
At December 31, 1996, SINA had approximately $206,000,000 of net operating
loss carryforwards in New Jersey which expire as follows: $20,000,000 in 1997,
$30,000,000 in 1998, $46,000,000 in 1999, $66,000,000 in 2000, $43,000,000 in
2001 and $1,000,000 in 2002.
At December 31, 1996, RIH had approximately $117,000,000 of net operating
loss carryforwards in New Jersey which expire as follows: $111,000,000 in 1997,
$1,000,000 in 2001 and $5,000,000 in 2003.
As SINA could not determine that a substantial portion of its deferred tax
assets will more likely than not be realized, a valuation allowance has been
recorded in the financial statements.
F-19
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN U.S. DOLLARS)
NOTE 15 -- COMMITMENTS AND CONTINGENCIES
CASINO LICENSE
The operations of a casino in both The Bahamas and Atlantic City are subject
to regulatory controls. A casino license must be obtained in each jurisdiction
by the operator and the license must be periodically renewed and is subject to
revocation at any time. In Atlantic City, the Company currently acts as a
holding company under an interim casino authorization. In the event that the
Company were not able to maintain its licenses, management believes that the
Company would still realize the carrying value of its related assets.
CASINO REINVESTMENT DEVELOPMENT AUTHORITY ("CRDA") OBLIGATIONS
Effective with the Merger, the Company, through its ownership of SINA (a
"licensee") is required to comply with the State of New Jersey Casino Control
Act (the "Casino Control Act"). The Casino Control Act, as amended, requires a
licensee to purchase bonds issued by the CRDA, or to make other investments
authorized by the CRDA, in an amount equal to 1.25% of a licensee's gross
revenue. If the investment obligation is not satisfied, then the licensee will
be subject to an investment alternative tax of 2.5% of gross revenue. Licensees
are required to make quarterly deposits with the CRDA against its current year
investment obligation. The CRDA bonds have interest rates ranging from 3.9% to
7% and have repayment terms of between 20 and 50 years.
At December 31, 1996, SINA had $6,859,000 face value of bonds issued by the
CRDA and had $19,701,000 on deposit with the CRDA. These bonds and deposits, net
of an estimated discount to reflect the below-market interest rate payable on
the bonds, are included in deferred charges and other assets in the Company's
Consolidated Balance Sheet.
COMPLETION GUARANTY
In connection with the development of the Mohegan Sun Casino, the Company
executed a Secured Completion Guarantee, under which the Company guaranteed that
the Mohegan Sun Casino would be completed and that all costs required for such
completion would be paid. The Secured Completion Guarantee is subject to a cap
of $50,000,000 and is secured in part by a $15,000,000 letter of credit and a
pledge by SIIL of 1,500,000 Ordinary Shares. As of December 31, 1996, the
Company had funded $42,000,000 under the Secured Completion Guarantee with the
remaining $8,000,000 funded in January 1997.
NEW HEADS AGREEMENT
In connection with the Paradise Island Expansion, on December 13, 1995 the
Company and the Bahamian Government entered into the New Heads of Agreement (the
"New Heads of Agreement"), which supplements the Heads of Agreement, pursuant to
which the Company will receive certain tax relief, incentives and other
benefits. These benefits will be granted in exchange for the Company agreeing
to, among other things, spend a minimum of $250 million on the Paradise Island
Expansion, build a minimum of 1,000 additional guest rooms and employ and keep
employed between 2,000 and 2,500 additional Bahamian workers after completion of
the Paradise Island Expansion.
CONTROL OF SUN INTERNATIONAL
SIIL has agreed with the Bahamian Government not to reduce its equity
interest in SIHL below 45% until six months after completion of an expansion
project currently underway at Atlantis, and thereafter to control a majority of
the SIHL Board of Directors for a period of five additional years.
LAND LEASE OPTION
SINA entered into a five year lease effective August 1, 1996 (the "Lease
Agreement"), to lease certain real property. SINA is required to pay rent of
$825,000 per year plus related real estate taxes, and has the
F-20
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN U.S. DOLLARS)
NOTE 15 -- COMMITMENTS AND CONTINGENCIES (CONTINUED)
option to purchase the leased property each year on July 31 until July 31, 2001
for $12,000,000. If SINA does not exercise the purchase option, the lessor may
require SINA to purchase the leased property for $12,000,000 at July 31, 2001.
LITIGATION
The Company is a defendant in certain litigation incurred in the normal
course of business. In the opinion of management, based on the advice of
counsel, the aggregate liability, if any, arising from such litigation will not
have a material adverse effect on the accompanying consolidated financial
statements.
NOTE 16 -- GEOGRAPHIC INFORMATION
The following is an analysis of combined gross revenues by geographical
location (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------
<S> <C> <C> <C>
1994 1995 1996
--------- ---------- ----------
United States.............................................. $ 3,565
Indian Ocean............................................... $ 3,583 $ 5,114 4,497
France..................................................... 802 900 834
Bermuda.................................................... 2,661 2,607 2,603
Bahamas.................................................... 72,911 214,593 240,719
--------- ---------- ----------
$ 79,957 $ 223,214 $ 252,218
--------- ---------- ----------
--------- ---------- ----------
</TABLE>
NOTE 17 -- EQUITY IN EARNINGS OF ASSOCIATED COMPANIES
The consolidated financial statements include equity in earnings of
affiliates as a result of the Company's 22.8% interest in Sun Indian Ocean and
25% equity holding in Sun France. The following summarized financial information
of Sun France has been prepared under United States generally accepted
accounting principles as at and for the years ended October 31, 1994, 1995 and
1996; converted to thousands of U.S. dollars at the prevailing exchange rate.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1994 1995 1996
--------- --------- ---------
Revenues....................................... $ 72,171 $ 100,084 $ 106,574
Income from operations......................... 7,836 12,277 13,016
Income before income taxes..................... 756 5,175 8,074
Current assets................................. $ 8,386 $ 12,580 $ 10,898
Total assets................................... 78,320 84,143 73,097
Current liabilities............................ 52,623 54,022 45,485
Shareholders' equity........................... 7,809 11,760 15,502
</TABLE>
The following summarized financial information of Sun Indian Ocean has been
prepared under United States generally accepted accounting principles as at and
for the years ended December 31, 1994, 1995 and 1996; converted to thousands of
U.S. dollars at the prevailing exchange rate:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1994 1995 1996
--------- --------- ---------
Revenues....................................... $ 49,955 $ 63,817 $ 74,850
Income from operations......................... 10,056 11,565 13,626
Income before income taxes..................... 6,105 7,782 9,858
Current assets................................. $ 11,043 $ 23,862 $ 24,497
Total assets................................... 95,965 140,786 167,634
Current liabilities............................ 23,588 28,954 40,428
Shareholders' equity........................... 49,501 93,188 92,241
</TABLE>
F-21
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(IN U.S. DOLLARS)
NOTE 18 -- SUBSEQUENT EVENTS
In February 1997, RIHF offered to purchase (the "Tender Offer") all the
outstanding Mortgage Notes and Junior Mortgage Notes at a purchase price equal
to 108.047% and 108.750%, respectively, of the principal amounts outstanding of
such securities. In addition, in connection with the Tender Offer, RIHF
solicited consents to certain amendments to the indentures governing these
securities and to the termination of certain security documents.
In March 1997, the Company, together with SINA, issued $200.0 million of 9%
unsecured senior subordinated notes due 2007 (the "Senior Subordinated Notes").
The Senior Subordinated Notes are subordinated in right of payment to all
existing and future senior debt of the Company. The Senior Subordinated Notes
contain certain restrictive covenants, including limitations on the incurrence
of additional indebtedness.
Part of the net proceeds from the issue were used in March 1997 to acquire
approximately 96% of the Mortgage Notes and the Junior Mortgage Notes that were
tendered pursuant to the Tender Offer. As a result of the consummation of the
Tender Offer and the amendments to the respective indentures, $5.4 million of
Mortgage Notes and $1.1 million of Junior Mortgage Notes remain outstanding, but
are no longer secured or subject to the restrictions described in Note 9.
F-22
<PAGE>
- -------------------------------------------
-------------------------------------------
- -------------------------------------------
-------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE ISSUERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON WHERE SUCH OFFER WOULD BE UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE ISSUERS SINCE THE DATE HEREOF.
--------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information.......................... 4
Enforceability of Civil Liabilities............ 5
Incorporation of Certain Documents by
Reference..................................... 5
Disclosure Regarding Forward Looking
Statements.................................... 6
Prospectus Summary............................. 7
Risk Factors................................... 19
Use of Proceeds................................ 28
The Company.................................... 29
Capitalization................................. 30
Pro Forma Consolidated Statements of
Operations.................................... 31
Selected Financial and Operating Data.......... 34
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................... 36
The Exchange Offer............................. 40
Business....................................... 46
Management..................................... 63
Principal Shareholder.......................... 65
The Commonwealth of The Bahamas................ 66
Republic of Mauritius.......................... 66
Description of Notes........................... 67
Tax Consequences............................... 91
Plan of Distribution........................... 91
Legal Matters.................................. 92
Experts........................................ 92
Index to Consolidated Financial Statements..... F-1
</TABLE>
$200,000,000
SUN INTERNATIONAL
HOTELS LIMITED
SUN INTERNATIONAL
NORTH AMERICA, INC.
OFFER FOR
9% SENIOR SUBORDINATED NOTES
DUE 2007 IN EXCHANGE FOR
9% EXCHANGE SENIOR
SUBORDINATED NOTES DUE 2007
--------------
PROSPECTUS
--------------
, 1997
- -------------------------------------------
-------------------------------------------
- -------------------------------------------
-------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 56 of the IBCA empowers a company incorporated under the IBCA to
indemnify against all expenses, including legal fees, and against all
judgements, fines and amounts paid in settlement and reasonably incurred in
connection with legal, administrative or investigative proceedings any person
who (a) is or was a party or is threatened to be made a party to any threatened,
pending or completed proceedings, whether civil, criminal, administrative or
investigative, by reason of the fact that the person is or was a director, an
officer or a liquidator of the company; or (b) is or was, at the request of the
company, serving as a director, officer or liquidator of, or in any other
capacity is or was acting for, another company or a partnership, joint venture,
trust or other enterprise, PROVIDED, HOWEVER, that such indemnification may only
be provided to a person if the person acted honestly and in good faith with a
view to the best interests of the company and, in the case of criminal
proceedings, the person had no reasonable cause to believe that his conduct was
unlawful. The decision of the directors as to whether the person acted honestly
and in good faith and with a view to the best interests of the company and as to
whether the person had no reasonable cause to believe that his conduct was
unlawful is, in the absence of fraud, sufficient for the purposes of the IBCA
unless a question of law is involved.
Sun International provides for indemnification of its directors and officers
pursuant to Article 85 of its Articles of Association as amended, which provides
that, net of any indemnification an officer or director of Sun International
receives from another source, Sun International will indemnify its officers and
directors to the fullest extent permitted by the IBCA.
Sun International has purchased directors' and officers' liability insurance
policies indemnifying its officers and directors and the officers and directors
of its subsidiaries against claims and liabilities (with stated exceptions) to
which they may become subject by reason of their positions with Sun
International or its subsidiaries as directors and officers.
ITEM 21. EXHIBITS AND FINANCIAL SCHEDULES
(a) Exhibits.
<TABLE>
<C> <S>
2.1 Agreement and Plan of Merger dated as of August 19, 1996, among Sun International,
Sun Merger Corp. and Griffin Gaming & Entertainment, Inc. as amended (incorporated by
reference to Annex I of Registration Statement No. 333-15409 of Sun International on
Form F-4).
2.2 Combination and Restructuring Agreement dated as of December 12, 1994, between SIIL
and Sun International (incorporated by reference to Exhibit 2.1 of Registration
Statement No. 33-89250 of Sun International on Form F-1).
2.3 Form of Amendment No. 1 to the Combination and Restructuring Agreement between SIIL
and Sun International (incorporated by reference to Exhibit 2.3 of Registration
Statement No. 33-89250 of Sun International on Form F-1).
3.1 Amended and Restated Memorandum of Association of Sun International (incorporated by
reference to Exhibit 3.1 of Registration Statement No. 333-15409 of Sun International
on Form F-4).
3.2 Articles of Association of Sun International adopted April 28, 1995, as amended
(incorporated by reference to Exhibits 3.3 and 3.4 of Registration Statement No.
33-80477).
3.3 Restated Certificate of Incorporation, as amended, of SINA.
3.4 Amended and Restated By-laws of SINA.
3.5 Memorandum of Association of Sun International Bahamas Limited.
3.6 Articles of Association of Sun International Bahamas Limited.
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S>
3.7 Memorandum of Association of Paradise Acquisitions Limited.
3.8 Articles of Association of Paradise Acquisitions Limited.
3.9 Memorandum of Association of Paradise Island Limited.
3.10 Articles of Association of Paradise Island Limited.
3.11 Memorandum of Association of Paradise Enterprises Limited.
3.12 Articles of Association of Paradise Enterprises Limited.
3.13 Memorandum of Association of Island Hotel Company Limited.
3.14 Articles of Association of Island Hotel Company Limited.
3.15 Memorandum of Association of Paradise Beach Inn Limited.
3.16 Articles of Association of Paradise Beach Inn Limited.
3.17 Memorandum of Association of Sun International Management Limited.
3.18 Articles of Association of Sun International Management Limited.
3.19 Certificate of Incorporation of GGRI, Inc., as amended.
3.20 By-laws of GGRI, Inc.
3.21 Certificate of Incorporation, as amended, of Resorts International Hotel, Inc.
3.22 By-laws of Resorts International Hotel, Inc.
3.23 Certificate of Incorporation of Sun Cove, Ltd.
3.24 By-laws of Sun Cove, Ltd.
4.1 Form of Ordinary Share Certificate of Sun International (incorporated by reference to
Exhibit 4.1 of Registration Statement No. 33-80477 of Sun International on Form F-3).
4.2 Form of Registration Rights Agreement among Sun International, Fidelity Management
and Research Company and TCW Special Credits (incorporated by reference to Exhibit
2.3 of the 1994 Annual Report of Sun International on Form 20-F, as amended by
Amendment No. 1 thereto, File No. 0-22794).
4.3 Form of Amendment No. 1 to the Registration Rights Agreement among Sun International,
Fidelity Management and Research Company and TCW Special Credits (incorporated by
reference to Exhibit 4.4 of Registration Statement No. 33-89250 of Sun International
on Form F-1, as amended by Amendment No. 2 thereto).
4.4 Form of Indenture dated as of March 10, 1997, among the Issuers, the Guarantors and
The Bank of New York, as trustee, and exhibits thereto (incorporated by reference to
Exhibit (4)(e)(2) of the 1996 SINA 10-K).
4.5 Form of Outstanding Note (included in Exhibit 4.4).
4.6 Form of Exchange Note.
4.7 Form of Guarantee (included in Exhibit 4.4).
4.8 Form of Purchase Agreement dated as of March 10, 1997 among the Issuers, the
Guarantors and the Initial Purchasers (incorporated by reference to Exhibit (4)(e)(1)
of the 1996 SINA 10-K).
4.9 Form of Registration Rights Agreement dated as of March 10, 1997 among the Issuers,
the Guarantors and the Initial Purchasers (incorporated by reference to Exhibit
(4)(e)(3) of the 1996 SINA 10-K).
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <S>
4.10 Inter-Borrower Agreement dated as of March 10, 1997 between Sun International and
SINA (incorporated by reference to Exhibit (4)(e)(4) of the 1996 SINA 10-K).
5.1 Opinion of Cravath, Swaine & Moore.
5.2 Opinion of Kozlov, Seaton, Romanini, Brooks & Greenberg.
5.3 Opinion of Rome McGuigan Sabanosh, P.C.
5.4 Opinion of Harry B. Sands and Company.
5.5 Opinion of Smith-Hughes, Raworth & McKenzie.
8.1 Opinion of Cravath, Swaine & Moore as to certain U.S. federal income tax matters
(included in Exhibit 5.1).
8.2 Opinion of Harry B. Sands and Company as to certain Bahamian tax matters (included in
Exhibit 5.4).
10.1 Sun International's Stock Option Plan (incorporated by reference to Exhibit 10.10 of
Registration Statement No. 33-89250 of Sun International on Form F-1).
10.2 Employment Agreement dated as of May 1, 1995 between Sun International and Solomon
Kerzner (incorporated by reference to Exhibit 10.2 of Registration Statement No.
33-80477 of Sun International on Form F-3).
10.3 Heads of Agreement among the Government of the Commonwealth of The Bahamas, Sun
International and SIIL dated August 18, 1993 (incorporated by reference to Exhibit
3.3 of the 1994 Annual Report of Sun International on Form 20-F, as amended by
Amendment No. 1 thereto, File No. 0-22794).
10.4 Heads of Agreement between the Government of the Commonwealth of The Bahamas and Sun
International dated December 13, 1995 (incorporated by reference to Exhibit 10.4 of
Registration Statement No. 33-80477 of Sun International on Form F-3).
10.5 Amended and Restated Partnership Agreement of Trading Cove Associates dated as of
August 29, 1995, among Sun Cove Limited, RJH Development Corp., Leisure Resort
Technology, Inc., Slavik Suites, Inc. and LMW Investments, Inc. (incorporated by
reference to Exhibit 10.7 of Registration Statement No. 33-80477 of Sun International
on Form F-3).
10.6 Note Purchase Agreement dated as of September 29, 1995 between the Mohegan Tribal
Gaming Authority and Sun International (incorporated by reference to Exhibit 10.8 of
the Registration Statement No. 33-80477 of Sun International on Form F-3).
10.7 Secured Completion Guarantee dated as of September 29, 1995, made by Sun
International in favor of First Fidelity Bank, as trustee (incorporated by reference
to Exhibit 10.9 of Registration Statement No. 33-80477 of Sun International on Form
F-3).
10.8 Omnibus Financing Agreement dated as of September 21, 1995 between Sun International
and TCA.
10.9 Amended and Restated Gaming Facility Development and Construction Agreement between
the Mohegan Tribe of Indians of Connecticut and Trading Cove Associates dated
September 1, 1995 (incorporated by reference to Exhibit 10.10 of Registration
Statement No. 33-80477 of Sun International on Form F-3).
10.10 Amended and Restated Gaming Facility Management Agreement Between the Mohegan Tribe
of Indians of Connecticut and Trading Cove Associates dated August 30, 1995
(incorporated by reference to Exhibit 10.11 of Registration Statement No. 33-80477 of
Sun International on Form F-3).
</TABLE>
II-3
<PAGE>
<TABLE>
<C> <S>
10.11 Representative Management Agreement for properties located in the Indian Ocean region
and managed by a subsidiary of Sun International, together with an Addendum thereto
and a related Novation Agreement (incorporated by reference to Exhibit 10.12 of
Registration Statement No. 33-80477 of Sun International on Form F-3).
10.12 Technical Assistance Agreement dated April 24, 1992 between a subsidiary of Sun
International and Societe de Participation et d'Investissements dans les Casinos
(incorporated by reference to Exhibit 10.13 of Registration Statement No. 33-80477 of
Sun International on Form F-3).
10.13 Form of Amended and Restated Revolving Credit Agreement among Sun International,
certain subsidiaries of the Registrant and certain lenders party thereto
(incorporated by reference of Registration Statement No. 333-15409 of Sun
International on Form F-4).
10.14 Stockholder Agreement dated as of August 19, 1996 among Sun International and the
stockholders named therein, as amended (incorporated by reference to Annex II of
Registration Statement No. 333-15409 of Sun International on Form F-4).
10.15 Stockholder Agreement dated as of August 19, 1996 among SINA and SIIL, as amended
(incorporated by reference to Annex III of Registration Statement No. 333-15409 of
Sun International on Form F-4).
10.16 Agreement for Sale dated September 18, 1996 among Sun International, Ocean Properties
Bahamas Limited and Paradise Corporation (incorporated by reference of Registration
Statement No. 333-15409 of Sun International on Form F-4).
10.17 Declaration of Trust and Agreement dated as of October 29, 1996 among Sun
International, Sun Merger Corp. and the Honorable Thomas H. Kean (incorporated by
reference of Registration Statement No. 333-15409 of Sun International on Form F-4).
12.1 Statement re computation of ratios.
21.1 Subsidiaries of Sun International (incorporated by reference to Exhibit 21.1 of
Registration Statement No. 333-15409 of Sun International on Form F-4).
21.2 Subsidiaries of SINA (incorporated by reference to Exhibit (21) of the 1996 SINA
10-K).
23.1 Consent of Arthur Andersen (in respect of their January 31, 1996 report incorporated
by reference to the 1995 Sun 20-F) (included in Exhibit 23.4).
23.2 Consent of Arthur Andersen LLP (in respect of their December 15, 1995 report
regarding the Mohegan Tribal Gaming Authority incorporated by reference to Sun's
Current Report on Form 6-K dated January 30, 1996) (included in Exhibit 23.4).
23.3 Consent of Ernst & Young LLP (in respect of their July 14, 1994 report incorporated
by reference to the 1995 Sun 20-F).
23.4 Consent of Arthur Andersen LLP (in respect of their February 21, 1997 report).
23.5 Consent of Ernst & Young LLP (in respect of their report dated February 14, 1997
(except for Note 18, as to which the date is March 17, 1997) incorporated by
reference to the 1996 SINA 10-K).
23.6 Consent of Cravath, Swaine & Moore (included in Exhibit 5.1).
23.7 Consent of Kozlor, Seaton, Romanini, Brooks & Greenberg (included in Exhibit 5.2).
23.8 Consent of Rome McGuigan Sabanosh, P.C. (included in Exhibit 5.3).
23.9 Consent of Harry B. Sands and Company (included in Exhibit 5.4).
23.10 Consent of Smith-Hughes, Raworth & McKenzie (included in Exhibit 5.5).
24.1 Power of Attorney for Sun International Hotels Limited.
</TABLE>
II-4
<PAGE>
<TABLE>
<C> <S>
24.2 Power of Attorney for Sun International North America, Inc.
24.3 Power of Attorney for Sun International Bahamas Limited.
24.4 Power of Attorney for Paradise Acquisitions Limited.
24.5 Power of Attorney for Paradise Island Limited.
24.6 Power of Attorney for Paradise Enterprises Limited.
24.7 Power of Attorney for Island Hotel Company Limited.
24.8 Power of Attorney for Paradise Beach Inn Limited.
24.9 Power of Attorney for Sun International Management Limited.
24.10 Power of Attorney for GGRI, Inc.
24.11 Power of Attorney for Resorts International Hotel, Inc.
24.12 Power of Attorney for Sun Cove, Ltd.
25.1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New
York on Form T-1.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
</TABLE>
(b) Not applicable.
ITEM 22. UNDERTAKINGS.
The undersigned registrants hereby undertake to do the following.
(a) For purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
registrants pursuant to the above provisions, the registrants have been informed
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrants of expenses incurred
or paid by a director, officer or controlling person of the registrants in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrants will, unless in the opinion of their counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(c) (i) They will respond to requests for information that is incorporated
by reference into the prospectus pursuant to Items 4, 10(b) 11, or 13 of this
Form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means; and
(ii) they will arrange or provide for a facility in the U.S. for the purpose of
responding to such requests. The undertaking in subparagraph (i) above includes
information contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
(d) They will supply by means of a post-effective amendment all information
concerning a transaction and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it became
effective.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 20th day of March, 1997.
SUN INTERNATIONAL HOTELS LIMITED
By: /s/ CHARLES D. ADAMO
-----------------------------------------
NAME: CHARLES D. ADAMO
TITLE: EXECUTIVE VICE PRESIDENT-CORPORATE
DEVELOPMENT & GENERAL COUNSEL
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
Chairman of the Board of
* Directors and Chief
- ------------------------------ Executive Officer March 20, 1997
Solomon Kerzner (Principal
Executive Officer)
*
- ------------------------------ Director March 20, 1997
Derek Hawton
*
- ------------------------------ Director March 20, 1997
Peter Buckley
*
- ------------------------------ Director March 20, 1997
Howard Marks
*
- ------------------------------ Director March 20, 1997
Eric Siegel
Chief Financial Officer
* and
- ------------------------------ Secretary (Principal March 20, 1997
John Allison Financial and
Accounting Officer)
*
- ------------------------------ Authorized Representative March 20, 1997
Mandy Miller in the United States
*By: /s/ CHARLES D. ADAMO
-------------------------
Charles D. Adamo
ATTORNEY-IN-FACT
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 20th day of March, 1997.
SUN INTERNATIONAL NORTH AMERICA, INC.
By: /s/ CHARLES D. ADAMO
-----------------------------------------
NAME: CHARLES D. ADAMO
TITLE: AUTHORIZED SIGNATORY
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
Chairman of the Board of
* Directors and Chief
- ------------------------------ Executive Officer March 20, 1997
Howard Kerzner (Principal
Executive Officer)
* Director (Principal
- ------------------------------ Financial and Accounting March 20, 1997
Kevin DeSanctis Officer)
*
- ------------------------------ Director March 20, 1997
Charles Adamo
*By: /s/ CHARLES D. ADAMO
-------------------------
Charles D. Adamo
ATTORNEY-IN-FACT
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 20th day of March, 1997.
SUN INTERNATIONAL BAHAMAS LIMITED
By: /s/ CHARLES D. ADAMO
-----------------------------------------
NAME: CHARLES D. ADAMO
TITLE: AUTHORIZED SIGNATORY
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
Chairman of the Board of
* Directors and Chief
- ------------------------------ Executive Officer March 20, 1997
Solomon Kerzner (Principal
Executive Officer)
* Director (Principal
- ------------------------------ Financial and Accounting March 20, 1997
Kevin DeSanctis Officer)
*
- ------------------------------ Director March 20, 1997
J.B. Farrington
*
- ------------------------------ Director March 20, 1997
John Allison
*
- ------------------------------ Authorized Representative March 20, 1997
Mandy Miller in the United States
*By: /s/ CHARLES D. ADAMO
-------------------------
Charles D. Adamo
ATTORNEY-IN-FACT
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 20th day of March, 1997.
PARADISE ACQUISITIONS LIMITED
By: /s/ CHARLES D. ADAMO
-----------------------------------------
NAME: CHARLES D. ADAMO
TITLE: AUTHORIZED SIGNATORY
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
Chairman of the Board of
Directors and Chief
* Executive Officer
- ------------------------------ (Principal March 20, 1997
Kevin DeSanctis Executive, Financial and
Accounting Officer)
*
- ------------------------------ Director March 20, 1997
J.B. Farrington
*
- ------------------------------ Authorized Representative March 20, 1997
Mandy Miller in the United States
*By: /s/ CHARLES D. ADAMO
-------------------------
Charles D. Adamo
ATTORNEY-IN-FACT
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 20th day of March, 1997.
PARADISE ISLAND LIMITED
By: /s/ CHARLES D. ADAMO
-----------------------------------------
NAME: CHARLES D. ADAMO
TITLE: AUTHORIZED SIGNATORY
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
Chairman of the Board of
Directors and Chief
* Executive Officer
- ------------------------------ (Principal March 20, 1997
Kevin DeSanctis Executive, Financial and
Accounting Officer)
*
- ------------------------------ Director March 20, 1997
J.B. Farrington
*
- ------------------------------ Director March 20, 1997
John Allison
*
- ------------------------------ Authorized Representative March 20, 1997
Mandy Miller in the United States
*By: /s/ CHARLES D. ADAMO
-------------------------
Charles D. Adamo
ATTORNEY-IN-FACT
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 20th day of March, 1997.
PARADISE ENTERPRISES LIMITED
By: /s/ CHARLES D. ADAMO
-----------------------------------------
NAME: CHARLES D. ADAMO
TITLE: AUTHORIZED SIGNATORY
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
Chairman of the Board of
* Directors and Chief
- ------------------------------ Executive Officer March 20, 1997
Solomon Kerzner (Principal
Executive Officer)
*
- ------------------------------ Director March 20, 1997
J.B. Farrington
* Director (Principal
- ------------------------------ Financial and Accounting March 20, 1997
Kevin DeSanctis Officer)
*
- ------------------------------ Authorized Representative March 20, 1997
Mandy Miller in the United States
*By: /s/ CHARLES D. ADAMO
-------------------------
Charles D. Adamo
ATTORNEY-IN-FACT
II-11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 20th day of March, 1997.
ISLAND HOTEL COMPANY LIMITED
By: /s/ CHARLES D. ADAMO
-----------------------------------------
NAME: CHARLES D. ADAMO
TITLE: AUTHORIZED SIGNATORY
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
Chairman of the Board of
Directors and Chief
* Executive Officer
- ------------------------------ (Principal March 20, 1997
Kevin DeSanctis Executive, Financial and
Accounting Officer)
*
- ------------------------------ Director March 20, 1997
J.B. Farrington
*
- ------------------------------ Director March 20, 1997
John Allison
*
- ------------------------------ Authorized Representative March 20, 1997
Mandy Miller in the United States
*By: /s/ CHARLES D. ADAMO
-------------------------
Charles D. Adamo
ATTORNEY-IN-FACT
II-12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 20th day of March, 1997.
PARADISE BEACH INN LIMITED
By: /s/ CHARLES D. ADAMO
-----------------------------------------
NAME: CHARLES D. ADAMO
TITLE: AUTHORIZED SIGNATORY
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
Chairman of the Board of
Directors and Chief
* Executive Officer
- ------------------------------ (Principal March 20, 1997
Kevin DeSanctis Executive, Financial and
Accounting Officer)
*
- ------------------------------ Director March 20, 1997
J.B. Farrington
*
- ------------------------------ Director March 20, 1997
John Allison
*
- ------------------------------ Authorized Representative March 20, 1997
Mandy Miller in the United States
*By: /s/ CHARLES D. ADAMO
-------------------------
Charles D. Adamo
ATTORNEY-IN-FACT
II-13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 20th day of March, 1997.
SUN INTERNATIONAL MANAGEMENT LIMITED
By: /s/ CHARLES D. ADAMO
-----------------------------------------
NAME: CHARLES D. ADAMO
TITLE: AUTHORIZED SIGNATORY
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
Chairman of the Board of
* Directors and Chief
- ------------------------------ Executive Officer March 20, 1997
Solomon Kerzner (Principal
Executive Officer)
* Director (Principal
- ------------------------------ Financial and Accounting March 20, 1997
Howard Kerzner Officer)
*
- ------------------------------ Director March 20, 1997
Charles Adamo
*
- ------------------------------ Authorized Representative March 20, 1997
Mandy Miller in the United States
*By: /s/ CHARLES D. ADAMO
-------------------------
Charles D. Adamo
ATTORNEY-IN-FACT
II-14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 20th day of March, 1997.
GGRI, INC.
By: /s/ CHARLES D. ADAMO
-----------------------------------------
NAME: CHARLES D. ADAMO
TITLE: AUTHORIZED SIGNATORY
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
Chairman of the Board of
Directors and Chief
* Executive Officer
- ------------------------------ (Principal March 20, 1997
Matthew Kearney Executive, Financial and
Accounting Officer)
*By: /s/ CHARLES D. ADAMO
-------------------------
Charles D. Adamo
ATTORNEY-IN-FACT
II-15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 20th day of March, 1997.
RESORTS INTERNATIONAL HOTEL, INC.
By: /s/ CHARLES D. ADAMO
-----------------------------------------
NAME: CHARLES D. ADAMO
TITLE: AUTHORIZED SIGNATORY
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
Chairman of the Board of
* Directors (Principal
- ------------------------------ Financial and Accounting March 20, 1997
Matthew Kearney Officer)
President and Chief
* Executive Officer
- ------------------------------ (Principal Executive March 20, 1997
Dan Cassella Officer)
*By: /s/ CHARLES D. ADAMO
-------------------------
Charles D. Adamo
ATTORNEY-IN-FACT
II-16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 20th day of March, 1997.
SUN COVE, LTD.
By: /s/ CHARLES D. ADAMO
-----------------------------------------
NAME: CHARLES D. ADAMO
TITLE: AUTHORIZED SIGNATORY
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
Chairman of the Board of
* Directors and Chief
- ------------------------------ Executive Officer March 20, 1997
Howard Kerzner (Principal
Executive Officer)
* Director (Principal
- ------------------------------ Financial and Accounting March 20, 1997
Kevin DeSanctis Officer)
*
- ------------------------------ Director March 20, 1997
John Allison
*By: /s/ CHARLES D. ADAMO
-------------------------
Charles D. Adamo
ATTORNEY-IN-FACT
II-17
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ------------------------------------------------------------------------------------------------ -----
<C> <S> <C>
3.3 Restated Certificate of Incorporation, as amended, of SINA.
3.4 Amended and Restated By-laws of SINA.
3.5 Memorandum of Association of Sun International Bahamas Limited.
3.6 Articles of Association of Sun International Bahamas Limited.
3.7 Memorandum of Association of Paradise Acquisitions Limited.
3.8 Articles of Association of Paradise Acquisitions Limited.
3.9 Memorandum of Association of Paradise Island Limited.
3.10 Articles of Association of Paradise Island Limited.
3.11 Memorandum of Association of Paradise Enterprises Limited.
3.12 Articles of Association of Paradise Enterprises Limited.
3.13 Memorandum of Association of Island Hotel Company Limited.
3.14 Articles of Association of Island Hotel Company Limited.
3.15 Memorandum of Association of Paradise Beach Inn Limited.
3.16 Articles of Association of Paradise Beach Inn Limited.
3.17 Memorandum of Association of Sun International Management Limited.
3.18 Articles of Association of Sun International Management Limited.
3.19 Certificate of Incorporation of GGRI, Inc., as amended.
3.20 By-laws of GGRI, Inc.
3.21 Certificate of Incorporation, as amended, of Resorts International Hotel, Inc.
3.22 By-laws of Resorts International Hotel, Inc.
3.23 Certificate of Incorporation of Sun Cove, Ltd.
3.24 By-laws of Sun Cove, Ltd.
4.6 Form of Exchange Note.
5.1 Opinion of Cravath, Swaine & Moore.
5.2 Opinion of Kozlov, Seaton, Romanini, Brooks & Greenberg.
5.3 Opinion of Rome McGuigan Sabanosh, P.C.
5.4 Opinion of Harry B. Sands and Company.
5.5 Opinion of Smith-Hughes, Raworth & McKenzie.
10.8 Omnibus Financing Agreement dated as of September 21, 1995 between Sun International and TCA.
12.1 Statement re computation of ratios.
23.3 Consent of Ernst & Young LLP (in respect of their July 14, 1994 report incorporated by reference
to the 1995 Sun 20-F).
23.4 Consents of Arthur Andersen LLP.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ------------------------------------------------------------------------------------------------ -----
<C> <S> <C>
23.5 Consent of Ernst & Young LLP (in respect of their report dated February 14, 1997, except for
Note 18, as to which the date is March 17, 1997, incorporated by reference to the 1996 SINA
10-K).
24.1 Power of Attorney for Sun International Hotels Limited.
24.2 Power of Attorney for Sun International North America, Inc.
24.3 Power of Attorney for Sun International Bahamas Limited.
24.4 Power of Attorney for Paradise Acquisitions Limited.
24.5 Power of Attorney for Paradise Island Limited.
24.6 Power of Attorney for Paradise Enterprises Limited.
24.7 Power of Attorney for Island Hotel Company Limited.
24.8 Power of Attorney for Paradise Beach Inn Limited.
24.9 Power of Attorney for Sun International Management Limited.
24.10 Power of Attorney for GGRI, Inc.
24.11 Power of Attorney for Resorts International Hotel, Inc.
24.12 Power of Attorney for Sun Cove, Ltd.
25.1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York on Form
T-1.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
</TABLE>
<PAGE>
Exhibit 3.3
CERTIFICATE OF AMENDMENT
of
RESTATED CERTIFICATE OF INCORPORATION
(PUPSUANT TO SECTION 242)
Griffin Gaming & Entertainment, Inc., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That, pursuant to Section 228 of the General Corporation Law, on
January 31, 1997, the Board of Directors and Sole Shareholder of the Corporation
adopted the following resolution to amend the Restated Certificate of
Incorporation of the Corporation:
RESOLVED, that Article I of the Restated Certificate of Incorporation of
Griffin Gaming & Entertainment, Inc. be amended to change the name of the
Corporation to Sun International North America, Inc.
IN WITNESS WHEREOF, said Griffin Gaming & Entertainment, Inc. has caused
this certificate to be signed by Matthew B. Kearney, its Executive Vice
President, this 4th day of February, 1997.
GRIFFIN GAMING & ENTERTAINMENT, INC.
/s/ Matthew B. Kearney
------------------
Matthew B. Kearney
Executive Vice President
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
OF
GRIFFIN GAMING & ENTERTAINMENT, INC.
We, Matthew B. Kearney, Executive Vice President-Finance and Treasurer and
David G. Bowden, Vice President-Controller and Secretary, of Griffin Gaming &
Entertainment, Inc., a corporation existing under the laws of the State of
Delaware (the "Corporation"), do hereby certify that:
ONE: The name of the Corporation is "Griffin Gaming & Entertainment, Inc.";
the Corporation was formerly known as "Resorts International, Inc." and was
formed under the name "Mary Carter Paint Co.".
TWO: The original Certificate of Incorporation of the Corporation was filed
in the office of the Secretary of State of the State of Delaware on the 24th day
of October, 1958.
THREE: This Restated Certificate of Incorporation was duly adopted by the
Board of Directors of the Corporation in accordance with Section 245 of the
General Corporation Law of the State of Delaware. This Restated Certificate of
Incorporation only restates and integrates and does not further amend the
provisions of the Certificate of Incorporation of the Corporation as theretofore
amended or supplemented, and there is no discrepancy between those provisions
and the provisions of this Restated Certificate of Incorporation.
FOUR: This Restated Certificate of Incorporation has been duly executed and
acknowledged by the officers of the Corporation in accordance with Sections 245
and 103 of the General Corporation Law of the State of Delaware.
FIVE: The text of the Certificate of Incorporation of the Corporation is
hereby restated, in its entirety, to read as follows:
ARTICLE I
NAME
The name of the Corporation is "Griffin Gaming & Entertainment, Inc.".
<PAGE>
ARTICLE II
ADDRESS
The address of the Corporation's registered office in the State of Delaware
is 1013 Centre Road, City of Wilmington, County of New Castle, and the name of
its registered agent at such address is United States Corporation Company.
ARTICLE III
PURPOSE
The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
Delaware.
ARTICLE IV
CAPITALIZATION
A. Authorization; Transfer Restrictions. The total number of shares of
capital stock of all classifications which the Corporation shall have authority
to issue is 110,120,000 consisting of (i) 10,000,000 shares of Preferred Stock,
par value $.01 per share (the "Preferred Stock"), and (ii) 100,120,000 shares of
common stock, consisting of 100,000,000 shares of Common Stock, par value $.01
per share (the "Common Stock"), and 120,000 shares of Class B Common Stock, par
value $.01 per share (the "Class B Stock", and collectively with the Common
Stock, the "GGE Common Stock"). Each share of Class B Stock shall be issued in
connection with and upon the issuance of each $1,000 in principal amount of
Junior Notes (as defined in Article IX hereof), whether upon original issuance
of the Junior Notes or upon surrender for transfer or exchange of any
outstanding Junior Notes or pursuant to the interest payment provisions thereof,
and may not be transferred separately from such principal amount of Junior
Notes.
The shares of Preferred Stock may be issued from time to time in one or
more series. The Board of Directors hereby is vested with authority from time to
time to issue the Preferred Stock as Preferred Stock of any series. In
connection with the creation of each such series of Preferred Stock, the Board
of Directors hereby is vested with authority to fix by resolution or resolutions
the designations and the powers, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, of such series, to the full extent now or hereafter
permitted by the laws of the State of Delaware, including without limitation the
dividend rate, conversion or exchange rights, redemption price and liquidating
preference of any series of Preferred Stock, and to fix the number of shares
constituting any such series, and to increase or decrease the number of shares
of any such series (but not below the number of shares thereof outstanding);
provided, however, that no shares of Preferred Stock may be designated or issued
with any rights to
2
<PAGE>
vote together with the holders of the Class B Stock for any purpose. In case the
number of shares of any such series shall be so decreased, the shares
constituting such decrease shall resume the status which they had prior to the
adoption of the resolution or resolutions originally fixing the number of shares
of such series.
B. Voting and Quorum.
1. Each holder of GGE Common Stock entitled to vote shall have one vote for
each share thereof held. Except for the election of Class B Directors (as
defined in Article IX hereof), the holders of the Common Stock shall be entitled
to vote on all matters on which stockholders are entitled to vote. Except as may
be prescribed by Delaware law, the holders of the Class B Stock shall not be
entitled to vote on any matter except that the holders of the Class B Stock are
entitled to vote separately as a class on the following matters: (a) the
election of Class B Directors; (b) to the extent required under Delaware law,
any amendment to the last sentence of the first paragraph of Paragraph (A) of
Article IV hereof; the proviso in the second paragraph of Paragraph (A) of
Article IV hereof; Paragraphs (B)(1), (C)(2), (D) or (E) of Article IV hereof;
Paragraphs (A), (B)(3), (B)(4), (B)(5) or (E)(2) of Article VII hereof; or
Paragraph (A) of Article IX hereof; (c) any amendment to the last sentence of
Section 3 of Article II of the By-Laws of the Corporation; (d) any amendment to
the second sentence of Section 7 of Article III of the By-Laws of the
Corporation; or (e) any amendment to the last sentence of Section 8 of Article
III of the By-Laws of the Corporation.
2. At any meeting of the stockholders of the Corporation at which the
holders of any class of GGE Common Stock are entitled to vote, the presence, in
person or by proxy, of the holders of a majority of the outstanding shares of
such class shall constitute a quorum of the class entitled to vote of such
class. No action may be taken by any class of GGE Common Stock at a meeting at
which a quorum of such class is not present, except a vote to adjourn such
meeting.
C. Dividends.
1. The Board of Directors of the Corporation may cause dividends to be paid
to the holders of shares of Common Stock from time to time out of funds legally
available therefor. When and as dividends are declared, they may be payable in
cash, in property or in shares of Common Stock.
2. Holders of Class B Stock are not entitled to the payment of dividends,
except that in the event of an interest payment on the Junior Notes which is
paid in Additional Junior Notes (as defined in Article IX hereof), holders shall
be entitled to, and there shall be declared and paid, a stock dividend such that
one share of Class B Stock shall be issued in respect of each $1,000 in
principal amount of Additional Junior Notes.
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D. Mandatory Redemption of Class B Stock. Upon the payment in full of any
Junior Note, or the redemption, or cancellation following purchase thereof, of
each $1,000 principal amount of Junior Notes, the Corporation shall redeem the
share of Class B Stock issued in respect of such Junior Note at a redemption
price of $.01 per share (adjusted to reflect stock splits and stock combinations
since the original date of issuance).
E. Liquidation. In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, the holders of GGE
Common Stock then outstanding shall be entitled to receive ratably, in
accordance with the number of shares held by each holder, out of the assets of
the Corporation legally available for distribution to its stockholders, $.O1 per
share (adjusted to reflect stock splits and stock combinations since the
original date of issuance). After the payment in full of the amount described in
the immediately preceding sentence to the holders of GGE Common Stock, the
holders of Common Stock shall be entitled to share ratably, in accordance with
the number of shares held by each holder, in all the remaining assets of the
Corporation available for distribution and the holders of Class B Stock shall
not be entitled to share in the distribution of such remaining assets.
F. No Nonvoting Stock. No nonvoting equity securities of the Corporation
shall be issued. This provision is included in this Restated Certificate of
Incorporation in compliance with section 1123 of the United States Bankruptcy
Code, 11 U.S.C. Section 1123, and shall have no further force and effect beyond
that required by said section and for so long as said section is in effect and
applicable to the Corporation.
ARTICLE V
INDEMNIFICATION
A. Elimination of Certain Liability of Directors. A director of the
Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director
except for liability (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit. If the Delaware
General Corporation law is amended after the Effective Date (as defined in
Article IX hereof) to authorize corporate action further eliminating or limiting
the personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the Delaware General Corporation Law, as so amended. Any repeal or modification
of this Section by the stockholders of the Corporation shall be prospective only
and shall not adversely affect any right or protection of a director of the
Corporation existing at the time of such repeal or modification.
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B. Actions, Suits or Proceedings Other than by or in the Right of the
Corporation. The Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that he is or was or has agreed to become a director or officer of the
Corporation, or is or was serving or has agreed to serve at the request of the
Corporation as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, or by reason of any action alleged to have
been taken or omitted in such capacity, against costs, charges, expenses
(including attorneys fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him or on his behalf in connection with such
action, suit or proceeding and any appeal therefrom, if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction or upon a plea of nolo contendere or
its equivalent shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Corporation.
C. Actions or Suits by or in the Right of the Corporation. The Corporation
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of the fact that
he is or was or has agreed to become a director or officer of the Corporation,
or is or was serving or has agreed to serve at the request of the Corporation as
a director or officer of another corporation, partnership, joint venture, trust
or other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, against costs, charges and expenses (including
attorneys' fees) actually and reasonably incurred by him or on his behalf in
connection with the defense or settlement of such action or suit and any appeal
therefrom, if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery of Delaware or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of such liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such costs, charges and expenses which the Court of Chancery or
such other court shall deem proper.
D. Indemnification for Costs, Charges and Expenses of Successful Party.
Notwithstanding the other provisions of this Article V, to the extent that a
director or officer of the Corporation has been successful on the merits or
otherwise, including, without limitation, the dismissal of an action without
prejudice, in defense of any action, suit or proceeding referred to in Sections
A and B of this Article V, or in defense of any claim, issue or matter therein,
he shall be indemnified against all costs, charges and expenses
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(including attorneys' fees) actually and reasonably incurred by him or on his
behalf in connection therewith.
E. Determination of Right to Indemnification. Any indemnification under
Sections A and B of this Article V (unless ordered by a court) shall be paid by
the Corporation unless a determination is made (i) by a majority of the members
of the Board of Directors who were not parties to such action, suit or
proceeding even if less than a quorum, or (ii) if such a majority of the
disinterested members of the Board of Directors so direct, by independent legal
counsel in a written opinion, or (iii) by the stockholders, that indemnification
of the director or officer is not proper in the circumstances because he has not
met the applicable standard of conduct set forth in Sections A and B of this
Article V.
F. Advance of Costs, Charges and Expenses. Costs, charges and expenses
(including attorneys' fees) incurred by a person referred to in Sections A or B
of this Article V in defending any civil, criminal, administrative or
investigative action, suit or proceeding shall be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding; provided,
however, that the payment of such costs, charges and expenses (including
attorneys' fees) incurred by a director or officer in advance of the final
disposition of such action, suit or proceeding shall be made only upon receipt
of an undertaking by or on behalf of the director or officer to repay all
amounts so advanced in the event that it shall ultimately be determined that
such director or officer is not entitled to be indemnified by the Corporation as
authorized in this Article V. Such costs, charges and expenses (including
attorneys' fees) incurred by other employees and agents may be so paid upon such
terms and conditions, if any, as the majority of the Board of Directors deems
appropriate. The majority of the Board of Directors may, in the manner set forth
above, and upon approval of such director, officer, employer, employee or agent
of the Corporation, authorize the Corporation's counsel to represent such
person, in any action, suit or proceeding, whether or not the Corporation is a
party to such action, suit or proceeding.
G. Procedure for Indemnification. Any indemnification under Sections B, C
and D, or advance of costs, charges and expenses (including attorney's fees)
under Section F of this Article V, shall be made promptly, and in any event
within 60 days, upon the written request of the director or officer. The right
to indemnification or advances as granted by this Article V shall be enforceable
by the director or officer in any court of competent jurisdiction, if the
Corporation denies such request, in whole or in part, or if no disposition
thereof is made within 60 days. Such person's costs and expenses (including
attorneys' fees) incurred in connection with successfully establishing his right
to indemnification, in whole or in part, in any such action shall also be
indemnified by the Corporation. It shall be a defense to any such action that
the claimant has not met the standard of conduct set forth in Sections B or C of
this Article V, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, its independent legal counsel and its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the
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circumstances because he has met the applicable standard of conduct set forth in
Sections B or C of this Article V, nor the fact that there has been an actual
determination by the Corporation (including its Board of Directors, its
independent legal counsel and its stockholders) that the claimant has not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that the claimant has not met the applicable standard of conduct.
H. Other Rights: Continuation of Right to Indemnification. The
indemnification provided by this Article V shall not be deemed exclusive of any
other rights to which any director, officer, employee or agent seeking
indemnification may be entitled under any law (common or statutory), agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
office or while employed by or acting as agent for the Corporation, and shall
continue as to a person who has ceased to be a director, officer, employee or
agent, and shall inure to the benefit of the estate, heirs, executors and
administrators of such person. All rights to indemnification under this Article
V shall be deemed to be a contract between the Corporation and each director,
officer, employee or agent of the Corporation who serves or served in such
capacity at any time while this Article V is in effect. Any repeal or
modification of this Article V or any repeal or modification of relevant
provisions of the General Corporation Law of the State of Delaware or any other
applicable laws shall not in any way diminish any rights to indemnification of
such director, officer, employee or agent or the obligations of the Corporation
arising hereunder. This Article V shall be binding upon any successor
corporation to this Corporation, whether by way of acquisition, merger,
consolidation or otherwise.
I. Insurance. The Corporation shall purchase and maintain insurance on
behalf of any person who is or was or has agreed to become a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him or on his behalf in any such capacity,
or arising out of his status as such, whether or not the corporation would have
the power to indemnify him against such liability under the provisions of this
Article V, provided, however, that such insurance is available on reasonable and
acceptable terms, which determination shall be made by a vote of a majority of
the Board of Directors.
J. Savings Clause. If this Article V or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation (i) shall nevertheless indemnify each director and officer of the
Corporation, and (ii) may nevertheless indemnify each employee and agent of the
Corporation, as to costs, charges and expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement with respect to any action, suit
or proceeding, whether civil, criminal, administrative or investigative,
including an action by or in the right of the Corporation, to the full extent
permitted by any applicable portion of this Article V that shall not have been
invalidated and to the full extent permitted by applicable law.
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K. Subsequent Amendment. No amendment, modification or repeal of this
Article V shall affect or impair in any way the rights of any director or
officer of the Corporation to indemnification under the provisions hereof with
respect to any action, suit or proceeding arising out of, or relating to, any
actions, transactions or facts occurring prior to the final adoption of such
amendment, modification or repeal.
L. Subsequent Legislation. If the General Corporation Law of the State of
Delaware is amended to further expand the indemnification permitted to
directors, officers, employees or agents of the Corporation, then the
Corporation shall indemnify such persons to the fullest extent permitted by the
General Corporation Law of the State of Delaware, as so amended.
ARTICLE VI
NEW JERSEY CASINO CONTROL ACT
This Certificate of Incorporation shall be subject to the New Jersey Casino
Control Act, N.J.S.A. 5:12-1et seq., and the rules and regulations of the New
Jersey Casino Control Commission (the "Commission") as they currently exist or
as they hereinafter may be amended (the "Act"), including without limitation the
following:
A. The securities of the Corporation shall always be subject to redemption
by the Corporation, by action of the Board of Directors, if, in the judgment of
the Board of Directors, such action should be taken, pursuant to Section 151(b)
of the General Corporation Law of Delaware or any other applicable provision of
law, to the extent necessary to prevent the loss or secure the reinstatement of
any reinstatement of any government-issued license or franchise held by the
Corporation or any Subsidiary (as defined in Paragraph E of this Article VI) to
conduct any portion of the business of the Corporation or such Subsidiary, which
license or franchise is conditioned upon some or all of the holders of the
Corporation's securities possessing prescribed qualifications. In the event a
holder of the Corporation's securities is found not to possess such prescribed
qualifications by the Commission pursuant to the Act (a "Disqualified Holder"),
such Disqualified Holder shall indemnify the Corporation for any and all direct
or indirect costs, including attorneys' fees, incurred by the Corporation as a
result of such holder's continuing ownership or failure to divest promptly.
B. Except as is otherwise expressly provided in instruments containing the
terms of the Corporation's securities, which instruments have been approved by
the Commission, so long as the Corporation shall remain a publicly traded
holding company as defined in the Act, in accordance with NJSA. 5:12-82(d)(7)
and (9), all securities of the Corporation shall be held subject to the
condition that if a holder thereof is found to be a Disqualified Holder, such
holder shall dispose of his interest in the Corporation within 120 days
following the Corporation's receipt of notice (the "Notice Date") of the
holder's disqualification.
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Promptly following its receipt of notice from the Commission that a holder of
securities of the Corporation has been found disqualified, the Corporation shall
either deliver such written notice personally to the Disqualified Holder, mail
it to such Disqualified Holder at the address shown on the Corporation's books
and records, or use any other reasonable means. Failure of the Corporation to
provide notice to a Disqualified Holder after making reasonable efforts to do so
shall not preclude the Corporation from exercising its rights.
If any Disqualified Holder fails to dispose of his securities within 120
days following receipt by the Corporation of notice that such holder has been
found disqualified, the Corporation may redeem such securities at the lesser of
(i) the lowest closing sale price of such securities between the Notice Date and
the date 120 days after the Notice Date, or (ii) such holder's original purchase
price.
C. If the Corporation shall become, and so long as it shall remain, a
privately-held holding company as defined in the Act, in accordance with
N.J.S.A. 5:12-82(d)(7), (8) and (10), the Commission shall have the right of
prior approval with regard to transfers of securities, shares, and other
interests in the Corporation and the Corporation shall have the absolute right
to redeem at the market price or purchase price, whichever is the lesser, any
security, share or other interest in the Corporation in accordance with the Act.
D. So long as the Corporation shall remain a holding company as defined in
the Act, in accordance with N.J.S.A. 5:12-105(e), commencing on the date the
Commission serves notice on the Corporation that a security holder has been
found disqualified, it shall be unlawful for the Disqualified Holder to (i)
receive any dividends or interest upon any such securities of the Corporation
held by such holder; (ii) exercise, directly or through any trustee or nominee,
any right conferred by such securities; or (iii) receive any remuneration in any
form, for services rendered or otherwise, from any subsidiary of the Corporation
that holds a casino license.
E. For purpose of this Article VI, the term "Subsidiary" shall be defined
in accordance with N.J.S.A. 5:12-47.
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ARTICLE VII
BOARD OF DIRECTORS
A. Number and Designations of Directors. Until such time as a Class B
Triggering Event (as defined in Article IX hereof) shall have occurred, the
number of directors which shall constitute the Board as of the Effective Date
(as defined in Article IX hereof) shall be six, consisting of four Common
Stock Directors (as defined in Article IX hereof) and two Class B Directors
(but subject to Paragraph F below). After the Effective Date, the number of
directors which shall constitute the whole Board may be increased or
decreased to such other number as from time to time shall be fixed by
resolution of the Board; provided, however, that at all times the number of
Class B Directors prior to the occurrence of a Class B Triggering Event shall
be one-third (rounded up to the nearest whole number) of the number of
directors which constitutes the entire Board (but subject to Paragraph F
below). Upon the occurrence of a Class B Triggering Event, the number of
directors which shall constitute the Board shall be increased, with such
vacancies created thereby filled by the vote of a majority of the Class B
Directors then in office, such that the number of Class B Directors equals a
majority of the number of directors which constitutes the entire Board after
giving effect to the creation of such vacancies (but subject to Paragraph F
below).
B. Election of Directors.
1. Election of directors need not be by written ballot unless the
By-Laws so provide.
2. The Board of Directors shall be divided into three classes: Class
I, Class II, and Class III. Such Classes shall be as nearly equal in number
of directors as possible. Each director shall serve for a term ending at
the third annual stockholders' meeting following the annual meeting at
which such director was elected; provided, however, that the directors
first appointed to Class I shall serve for a term ending at the annual
meeting held in 1995, the directors first appointed to Class II shall serve
for a term ending at the annual meeting held in 1996, and the directors
first appointed to Class III shall serve for a term ending at the annual
meeting held in 1997. Notwithstanding any of the foregoing provisions of
this Article VII and subject to Paragraph F below, each director shall
serve until his successor is elected and qualified or until his earlier
death, resignation or removal.
3. At each annual meeting of stockholders (which shall be held on such
date as shall be determined pursuant to the By-Laws of the Corporation), or
at any duly called special meeting of stockholders, the Common Stock
Directors to be elected shall be elected by the holders of the Common Stock
voting as a separate class and the Class B Director(s) to be elected shall
be elected by the holders of the Class B Stock voting as a separate class.
4. At each annual election, the directors chosen to succeed those
whose terms then expire shall be identified as being the same Class as the
directors they succeed, unless,
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by reason of any intervening changes in the authorized number of directors, the
Board of Directors shall designate one or more directorships whose term then
expires as directorships of another Class in order to more nearly achieve
equality in the number of directors among the Classes. When the directors fill a
vacancy resulting from the death, resignation or removal of a director in
accordance with paragraph E below, the director chosen to fill that vacancy
shall be of the same Class as the director he succeeds.
5. Notwithstanding the rule that the three Classes shall be as nearly
equal in number of directors as possible, in the event of any change in the
authorized number of directors, each Common Stock Director and each Class B
Director then continuing to serve as such will nevertheless continue as a
director of the Class of which such director is a member until the expiration of
his current term or his earlier death, resignation or removal.
C. Effective Date Board. As of the Effective Date, the Board of Directors
of the Corporation shall be reconstituted to consist of the following persons in
the Classes and of the designations indicated:
Director Class Designation
- -------- ----- -----------
Thomas E. Gallagher I Common Stock Director
Jay M. Green I Common Stock Director
William Fallon II Common Stock Director
Vincent J. Naimoli II Class B Director
Merv Griffin III Common Stock Director
Charles Masson III Class B Director
D. Removal of Directors. Subject to Paragraph F below, any director, may be
removed from office at any time, but only (i) for cause, and (ii) by the
affirmative vote of the holders of 80% of the voting power of all the shares of
the class of stock which elected such director.
E. Filling of Vacancies.
1. Any vacancy among the Common Stock Directors, occurring from any
cause whatsoever, may be filled by a majority of the remaining Common Stock
Directors, even if such remaining Common Stock Directors do not constitute a
quorum; provided, however, that the holders of the Common Stock removing any
Common Stock Director may at the same meeting fill the vacancy caused by such
removal; provided further, however, that if the remaining Common Stock Directors
fall to fill any such vacancy, the holders of the Common Stock entitled to vote
thereon may fill such vacancy at any special meeting of stockholders called for
that purpose. Any person elected or appointed to fill a vacancy shall hold
office, subject to the right of removal as herein before provided, until the
next election for such Class of directors and until his successor is elected and
qualifies.
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2. Subject to Paragraph F below, any vacancy among the Class B
Directors, occurring from any cause whatsoever (including (i) as a result of an
increase in the number of directors which shall constitute the entire Board, or
(ii) as a result of the occurrence of a Class B Triggering Event), may be filled
only by a majority of the remaining Class B Directors, even if such remaining
Class B Directors do not constitute a quorum; provided, however, that the
holders of the Class B Stock removing any Class B Director may at the same
meeting fill the vacancy caused by such removal; provided further, however, that
if the remaining Class B Directors fall to fill any such vacancy, the holders of
the Class B Stock entitled to vote thereon may fill such vacancy at any special
meeting of stockholders called for that purpose. Any person elected or appointed
to fill a vacancy shall hold office, subject to the right of removal as herein
before provided, until the next election for such Class of directors and until
his successor is elected and qualifies.
F. Final Payment Date. After the Final Payment Date (as defined in Article
IX hereof), (i) all the Class B Directors then in office shall resign and if
such Class B Directors fall to resign, a majority of the Common Stock Directors
shall be entitled to remove, without cause, such Class B Directors then in
office, and (ii) the number of directors constituting the Board shall be
decreased to six directors, who shall be elected by the holders of Common Stock.
ARTICLE VIII
AMENDMENT OF CERTIFICATE OF INCORPORATION AND BY-LAWS
A. In addition to any affirmative vote required by applicable law, any
alteration, amendment, repeal or rescission of any provision of this Restated
Certificate of Incorporation must be approved by a majority of the directors of
the Corporation then in office and by the affirmative vote of the holders of a
majority of the outstanding shares of the Common Stock.
B. Except as provided in Paragraph (B)(1) of Article IV hereof, the Board
of Directors shall have the power without the assent or vote of the stockholders
to make, alter, amend, change, add to or repeal the By-Laws of the Corporation.
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ARTICLE IX
DEFINITIONS
A. As used in this Restated Certificate of Incorporation, the following
terms shall have the meanings indicated below:
"Additional Junior Notes" shall mean Junior Notes issued by RIHF in payment
of interest on outstanding Junior Notes, in accordance with the terms of the
Junior Notes and the New RIHF Second Mortgage Junior Note Indenture.
"Class B Directors" shall mean the directors of the Corporation elected by
the holders of the Class B Stock.
"Class B Triggering Event" shall mean either (i) the payment on any
Interest Payment Date by RIHF of interest on the Junior Notes in me form of
Additional Junior Notes or (ii) the failure on any Interest Payment Date by RIHF
to pay interest in full on the Junior Mortgage Notes, if, in either case, on any
prior six Interest Payment Dates (whether consecutive or non-consecutive),
interest on the Junior Notes either has been paid in Additional Junior Notes or
has not been paid in full.
"Final Payment Date" means the date on which all the Junior Notes are
retired, redeemed or paid in full.
"Interest Payment Date" shall mean each date on which interest is due and
payable on the Junior Notes, in accordance with the New RIHF Second Mortgage
Junior Note Indenture.
"Junior Notes" shall mean the 11.375% Junior Mortgage Notes due 2004 of
RIHF, including the Additional Junior Notes.
"New RIHF Second Mortgage Junior Note Indenture" shall mean the Indenture
dated as of May 3, 1994, between RIHF and U.S. Trust Company of California,
N.A., as Trustee, under which the Junior Notes have been or will be issued.
"RIHF" shall mean Resorts International Hotel Financing, Inc., a Delaware
corporation.
B. As used in this Restated Certificate of Incorporation, the following
terms shall have the meanings indicated below:
"Common Stock Directors" shall mean the directors of the Corporation
elected by the holders of the Common Stock.
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"Effective Date" shall mean May 3, 1994.
IN WITNESS WHEREOF, the undersigned have signed this Restated Certificate
of Incorporation, under penalties of perjury, and caused the corporate seal of
the Corporation to be hereunto affixed this 10th day of May, 1996.
By /s/ Matthew B. Kearney
----------------------
Matthew B. Kearney
Executive Vice President-
Finance and Treasurer
[Corporate Seal]
Attest:
By: /s/ David G. Bowden
-------------------
David G. Bowden
Vice President-Controller and Secretary
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Exhibit 3.4
AMENDED AND RESTATED BY-LAWS
OF
GRIFFIN GAMING & ENTERTAINMENT, INC.
ARTICLE I
OFFICES
SECTION 1. Principal Office. The principal office of Griffin Gaming &
Entertainment, Inc. (the "Corporation") in the State of Delaware shall be
established and maintained at the office of the United States Corporation
Company in the City of Wilmington, County of New Castle, and said corporation
shall be the resident agent of this Corporation in charge thereof.
SECTION 2. Other Offices. The Corporation may also have an office or
offices and keep the books and records of the Corporation, except as may
otherwise be required by the laws of the State of Delaware, at such other place
or places either within or without the State of Delaware as the Board of
Directors of the Corporation (the "Board") may from time to time determine or
the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. Place of Meetings. All meetings of the stockholders shall be
held at such place, within or without the State of Delaware, as may from time to
time be fixed by the Board or as shall be specified or fixed in the respective
notices or waivers of notice thereof.
SECTION 2. Annual Meetings. The annual meeting of the stockholders of the
Corporation for the election of directors and for the transaction of such other
business as may properly come before the meeting shall be held on a date and at
a time and place as designated by resolution of the Board of Directors of the
Corporation.
SECTION 3. Special Meetings. Special meetings of the stockholders, unless
otherwise provided by law, may be called at any time by the Chairman of the
Board or by a majority of the Board of Directors. Special meetings of the
holders of Class B Stock (as such term is defined in the Certificate of
Incorporation) may be called
<PAGE>
at any time by the Chairman of the Board or by a majority of the Class B
Directors (as such term is defined in the Certificate of Incorporation).
SECTION 4. Notice of Meetings. Except as otherwise expressly required by
law or the Certificate of Incorporation of the Corporation, written notice
stating the place and time of the meeting and, in the case of a special meeting,
the purpose or purposes of such meeting, shall be given by the Secretary to each
stockholder entitled to vote thereat at the last known post office address not
less than ten nor more than sixty days prior to the date of meeting. No business
other than that stated in the notice shall be transacted at any special meeting.
Notice of any meeting of stockholders shall not be required to be given to any
stockholder who shall attend such meeting in person or by proxy; and if any
stockholder shall, in person or by attorney thereunto duly authorized, in
writing or by telegraph, cable or wireless, waive notice of any meeting, whether
before or after such meeting be held, the notice thereof need not be given to
him. Notice of any adjourned meeting of stockholders need not be given except as
provided in SECTION 7 of this ARTICLE II.
SECTION 5. List of Stockholders. It shall be the duty of the Secretary or
other officer who shall have charge of the stock ledger of the Corporation,
either directly or through a transfer agent appointed by the Board, to prepare
and make, at least 10 days before every election of directors, a complete list
of the stockholders entitled to vote at said election, arranged in alphabetical
order and showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open for said 10
days to the examination of any stockholder in the place where said election is
to be held and shall be produced and kept at the time and place of the election
for the whole time thereof, and subject to the inspection of any stockholder who
may be present. The original or a duplicate stock ledger shall be the only
evidence as to who are the stockholders entitled to examine such list or the
books of the Corporation or to vote in person or by proxy at such election.
SECTION 6. Quorom. At any meeting of the stockholders of the Corporation,
the presence, in person or by proxy, of stockholders then entitled to cast a
majority in number of votes upon a question to be considered at the meeting
shall constitute a quorum for the consideration of such question.
SECTION 7. Adjournments. In the absence of a quorum at any annual or
special meeting of stockholders, a majority in interest of those present in
person or by proxy and entitled to vote may adjourn the meeting from time to
time without further notice, other than by announcement at the meeting at which
such adjournment shall be taken, until a quorum shall be present; provided,
however, that if an adjournment is for more than thirty days, a notice of the
adjourned meeting shall be given to each stockholder of record entitled to vote.
At any such adjourned
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meeting at which a quorum may be present any business may be transacted which
might have been transacted at the meeting as originally called.
SECTION 8. Order of Business. The order of business at all meetings of the
stockholders shall be as determined by the chairman of the meeting, but the
order of business to be followed at any meeting at which a quorum shall be
present may be changed by a vote of the stockholders present in person or by
proxy at the meeting and holding a majority of the shares entitled to vote
thereat.
SECTION 9. Voting. Except as otherwise provided by the General Corporation
Law of the State of Delaware or in the Certificate of Incorporation, each
stockholder shall at each meeting of the stockholders be entitled to one vote in
person or by proxy for each share entitled to be voted thereat and held by him
and registered in his name on the books of the Corporation:
(a) On such date as may be fixed pursuant to SECTION 3 of ARTICLE VI
of these By-Laws as the record date for the determination of stockholders
entitled to notice of and to vote at such meeting; or
(b) In the event that no record date shall have been so fixed, the
record date for determining stockholders entitled to notice of or to vote
at a meeting of stockholders shall be at the close of business on the day
next preceding the day on which notice is given, or, if notice is waived,
at the close of business on the day next preceding the day on which the
meeting is held.
Shares of stock belonging to the Corporation shall not be voted directly or
indirectly. Persons holding stock having voting power in a fiduciary capacity
shall be entitled to vote the shares so held, and persons whose stock having
voting power is pledged shall be entitled to vote, unless in the transfer by the
pledgor on the books of the Corporation he shall have expressly empowered the
pledgee to vote thereon, in which case only the pledgee, or his proxy, may
represent such stock and vote thereon. Any vote on stock may be given at any
meeting of the stockholders by the stockholder entitled thereto in person or by
his proxy appointed by an instrument in writing, subscribed by such stockholder
or by his attorney thereunto duly authorized and delivered to the secretary of
the meeting; provided, however, that no proxy shall be voted on after three
years from its date, unless said proxy provides for a longer period. At all
meetings of the stockholders all matters, except those the manner of deciding
upon which is otherwise expressly regulated by statute or by the Certificate of
Incorporation or by these By-Laws, shall be decided by the vote of the
stockholders holding a majority of the shares present in person or by proxy and
entitled to vote on such matters. Unless demanded by a stockholder present in
person or by proxy at such meeting and entitled to vote thereat or determined by
the chairman of the meeting to be advisable, the vote on any matter need not be
by written ballot.
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SECTION 10. Inspectors of Election or Judges. Before, or at, each meeting
of the stockholders at which a vote by ballot is to be taken, the Board, or the
chairman of such meeting, shall appoint two Inspectors of Election or judges to
act thereat. Each Inspector of Election or Judge so appointed shall first
subscribe an oath or affirmation faithfully to execute the duties of an
Inspector of Election or Judge at such meeting with strict impartialty and
according to the best of his ability. Such Inspectors of Election or Judges
shall take charge of the ballots at such meeting and after the balloting thereat
on any question shall count the ballots cast thereon and shall make a report in
writing to the secretary of such meeting of the results thereof. The Inspectors
of Election or Judges need not be stockholders; and any officer or director may
be an Inspector of Election or Judge on any question other than a vote for or
against his election to any position with the Corporation or on any other
question in which he may be directly interested.
ARTICLE III
DIRECTORS
SECTION 1. General Powers. The Board shall manage the business and affairs
of the Corporation and may exercise all such authority and powers of the
Corporation and do all such lawful acts and things as are not by law, the
Certificate of Incorporation or these By-Laws directed or required to be
exercised or done by the stockholders.
SECTION 2. Number, Qualification and Term of Office. The number of
directors of the Corporation shall be as set forth in the Certificate of
Incorporation. Directors need not be stockholders. The Certificate of
Incorporation of the Corporation provides for a classified Board, wherein each
director shall serve for a term as provided therein. The Certificate of
Incorporation also provides for two designations of directors, elected by the
holders of the Common Stock and the Class B Stock (as such terms are defined in
the Certificate of Incorporation), respectively.
SECTION 3. Election of Directors. At each meeting of the stockholders for
the election of a director or directors, the person or persons receiving the
greater number of votes, up to the number of directors then to be elected, cast
by the stockholders present in person or by proxy and entitled to vote for such
director or directors shall be the director or directors elected by such
stockholders. The election of directors is subject to any provisions contained
in the Certificate of Incorporation relating thereto, including any provisions
for a classified Board and any provisions relating to the election of Common
Stock Directors (as such term is defined in the Certificate of Incorporation)
and Class B Directors, respectively.
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SECTION 4. Quorum. At all meetings of the Board the presence of a majority
of the whole Board shall be necessary to constitute a quorum for the transaction
of business at such meeting. Any act of a majority present at a meeting at which
there is a quorum shall be the act of the Board, except as may be otherwise
specifically provided by statute or by the Certificate of Incorporation or by
these By-Laws. In the absence of a quorum, a majority of the directors present
may adjourn any meeting from time to time until a quorum shall be present. At
any adjourned meeting at which a quorum is present, any business may be
transacted which might have been transacted at the meeting as originally called.
Notice of any adjourned meeting need not be given.
SECTION 5. Place of Meeting. The Board may hold its meetings at such place
or places within or without the State of Delaware as it may from time to time by
resolution determine or as shall be fixed or specified in the respective notices
or waivers of notice thereof. Members of the Board, or any committee thereof,
may participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear and communicate with each other.
SECTION 6. Regular Meetings. Regular meetings of the Board may be held
without notice at such places and times as may be fixed from time to time by
resolution of the Board.
SECTION 7. Special Meetings. Special meetings of the Board may be called by
the Chairman of the Board. Special meetings of the Class B Directors with
respect to matters to be determined by the Class B Directors only may be called
by any Class B Director. At least twenty-four hours' written or telegraphic
notice of each special meeting shall be given to each director. The notice of
any meeting, or any waiver thereof, need not state the purpose or purposes of
such meeting.
SECTION 8. Action by Consent. Any action required or permitted to be taken
at any meeting of the Board or of any committee thereof may be taken without a
meeting, if prior to such action a written consent thereto is signed by all
members of the Board or all members of such committee, as the case may be, and
such written consent is filed with the minutes of proceedings of the Board or
committee. Any action required or permitted to be taken at any meeting of the
Class B Directors may be taken without a meeting, if prior to such action a
written consent thereto is signed by all Class B Directors, and such written
consent is filed with the minutes of proceedings of the Board.
SECTION 9. Resignations; Removal. Any director may resign at any time by
giving written notice to the Chairman of the Board or the Secretary. Such
resignation shall take effect at the time specified therein or, if no time is
specified, upon receipt of such notice. The acceptance of a resignation shall
not be necessary to make it
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effective. Directors may only be removed in accordance with the Certificate of
Incorporation.
SECTION 10. Vacancies. A vacancy in the Board caused by death, resignation
or removal may only be filled in accordance with the Certificate of
Incorporation. Each director so chosen to fill a vacancy shall, unless otherwise
provided or as provided in the Certificate of Incorporation, hold office until
his successor shall have been elected and shall qualify or until he shall resign
or shall have been removed.
SECTION 11. Compensation. Each director, in consideration of his or her
serving as such, shall be entitled to receive from the Corporation such amount
per annum or such fees for attendance at directors' meetings, or both, as the
Board shall from time to time determine, together with reimbursement for the
reasonable expenses incurred by him in connection with the performance of his
duties. Each director who shall serve as a member of the Executive Committee or
any other committee of the Board in consideration of his serving as such, shall
be entitled to such additional amount per annum or such fees for attendance at
committee meetings, or both, as the Board shall from time to time determine.
Nothing herein contained shall be construed to preclude any director from
serving the Corporation in any other capacity and receiving proper compensation
therefor.
ARTICLE IV
COMMITTEES
SECTION 1. Designation and Powers of Committees. The Board may, by
resolution or resolutions passed by a majority of the whole Board, designate two
or more of its members to constitute an Executive Committee, which, during the
intervals between the meetings of the Board, shall have, and may exercise, all
the powers of the Board in the management of the business, affairs, and property
of the Corporation, to the extent permitted by Delaware law. The Board, by
resolution passed by a majority of the whole Board, may designate members of the
Board to constitute other committees, including an Audit Committee and a
Compensation Committee, which shall consist of such numbers of directors and
shall have, and may exercise, such powers as the Board may determine and specify
in the respective resolutions appointing them, to the extent permitted by
Delaware law. The Board shall have power at any time to change the members of
the Executive Committee or any such other committee, to fill vacancies and to
discharge the Executive Committee or any such other committee.
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ARTICLE V
OFFICERS
SECTION 1. Election and Number. The principal officers of the Corporation
shall be a Chairman of the Board, a President, one or more Vice Presidents, a
Treasurer and a Secretary, all of whom shall be chosen by the Board, and such
other officers as may be appointed in accordance with the provisions of SECTION
3 of this ARTICLE V. One person may hold the office and perform the duties of
any two or more of said officers other than those of President and Secretary.
SECTION 2. Term of Office and Qualifications. Each officer, except such as
may be appointed in accordance with the provisions of SECTION 3 of this ARTICLE
V, shall hold office until the next annual election of officers and until his
successor shall have been chosen and shall qualify or until his death or until
he shall have resigned or until he shall have been removed in the manner
provided in SECTION 4 of this ARTICLE V.
SECTION 3. Appointive Officers. The Chairman of the Board or the Board may
from time to time appoint such other officers as they may deem necessary,
including one or more Assistant Treasurers, one or more Assistant Secretaries
and such other agents and employees of the Corporation as they may deem proper.
Such officers and agents and employees shall hold office for such period, have
such authority and perform such duties, subject to the control of the Board, as
the Chairman of the Board or the Board may from time to time prescribe.
SECTION 4. Removal. Any elected officer may be removed, either with or
without cause, at any time, by the vote of a majority of the whole Board at any
meeting of the Board, and any appointive officer may be removed, either with or
without cause, at any time by the Chairman of the Board.
SECTION 5. Resignations. Any officer may resign at any time by giving
written notice to the Board or to the President or to the Secretary. Such
resignation shall take effect upon receipt of such notice or at any later time
specified therein; and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
SECTION 6. Vacancies. A vacancy in any office because of death,
resignation, removal or any other cause shall be filled for the unexpired
portion of the term in the manner prescribed in SECTIONS 2 and 3 of this ARTICLE
V for election or appointment, respectively, to such office.
SECTION 7. Chairman of the Board. The Chairman of the Board if present
shall preside at all meetings of stockholders and at all meetings of the Board
and
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shall have such other powers and duties as from time to time may be assigned to
him by the Board or these By-Laws.
SECTION 8. President. The President shall be the chief executive officer of
the Corporation, and shall have general supervision over the business of the
Corporation, subject to the control of the Board. In general, he shall perform
all duties incident to the office of President and have such other powers and
duties as from time to time may be assigned to him by the Board.
SECTION 9. Vice President. Each Vice President shall have such powers and
shall perform such duties as from time to time may be assigned to him by the
Board. The Board may elect, or designate, one or more of the Vice Presidents as
an Executive Vice President. At the request of the President, or in the case of
his absence or inability to act, the Executive Vice President or, if there shall
be more than one Executive Vice President, an Executive Vice President
designated by the Board, or if the Board shall have not have elected or
designated an Executive Vice President then one of the Vice Presidents who shall
be designated for the purpose by the Board, shall perform the duties of the
President, and, when so acting, shall have all the powers of the President.
SECTION 10. Secretary. The Secretary shall keep or cause to be kept in
books provided for this purpose the minutes of all meetings of the stockholders
and of the Board; shall see that all notices are duly given in accordance with
the provisions of these By-Laws and as required by law; shall be the custodian
of the seal of the Corporation and shall affix the seal or cause it to be
affixed to all certificates of stock of the Corporation and to all documents the
execution of which on behalf of the Corporation under its seal shall be duly
authorized in accordance with the provisions of these By-Laws; shall have charge
of the stock records of the Corporation; shall see that all reports, statements
and other documents required by law are properly kept and filed; may sign, with
any other proper officer of the Corporation thereunto authorized, certificates
for stock of the Corporation; and, in general, shall perform all the duties
incident to the office of Secretary, and such other duties as from time to time
may be assigned to him by the Board.
SECTION 11. Assistant Secretaries. The Assistant Secretaries shall have
such powers and duties as from time to time may be assigned to them by the
Board. At the request of the Secretary or in case of his absence or inability to
act, any Assistant Secretary may act in his place.
SECTION 12. Treasurer. The Treasurer shall have charge and custody of, and
be responsible for, all funds, securities, evidences of indebtedness and other
valuable documents of the Corporation; shall deposit all such funds in the name
of the Corporation in such banks or other depositaries as shall be selected by
the Board; shall receive, and give or cause to be given receipts and
acquittances for,
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moneys paid in on account of the Corporation and shall pay out of the funds on
hand all just debts of the Corporation of whatever nature upon maturity of the
same; shall enter or cause to be entered in books of the Corporation to be kept
for that purpose full and accurate accounts of all moneys received and paid out
on account of the Corporation, and whenever required by the Board, shall render
a statement of his cash accounts; shall keep or cause to be kept such other
books as will show the true record of the expenses, losses, gains, asset and
liabilities of the Corporation; and in general shall perform all duties incident
to the office of Treasurer and such other duties as from time to time may be
assigned to him by the Board.
SECTION 13. Assistant Treasurers. The Assistant Treasurers shall have such
powers and duties as from time to time may be assigned to them by the Board. At
the request of the Treasurer, or in case of his absence or inability to act, any
Assistant Treasurer may act in his place.
SECTION 14. Salaries. The salaries of the elective officers and any
appointive officers of the Corporation shall be fixed from time to time by the
Board. An officer shall not be prevented from receiving such salary by reason of
the fact that he is also a director of the Corporation or a member of any
committee contemplated by the By-Laws.
ARTICLE VI
CAPITAL STOCK
SECTION 1. Certificate for Stock. Every holder of shares of stock shall be
entitled to have a certificate, in such form as the Board shall prescribe,
certifying the number and class of shares of stock of the Corporation owned by
him. Each such certificate shall be signed in the name of the Corporation by the
President or a Vice President and the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary; provided, however, that where such
certificate is signed by a transfer agent or an assistant transfer agent or by a
transfer clerk acting on behalf of the Corporation and a registrar, the
signature of any such officer may be a facsimile.
SECTION 2. Transfer of Shares. The shares of stock of the Corporation shall
be transferable only upon its books by the registered holders thereof or by
their duly authorized attorneys or legal representatives, and upon such transfer
the old certificates shall be surrendered to the Corporation by the delivery
thereof to the Secretary or to such other person as the Board may designate, by
whom such old certificates shall be cancelled and new certificates shall
thereupon be issued. A record shall be made of each transfer. Each share of
Class B Stock shall be issued in connection with and upon the issuance of each
$1,000 in principal amount of
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Junior Notes (as such term is defined in the Certificate of Incorporation), and
may not be transferred separately from such principal amount of Junior Notes.
SECTION 3. Fixing Date for Determination of Stockholders of Record. In
order that the Corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change, conversion
or exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors and which record date: (1) in the case of determination of
stockholders entitled to vote at any meeting of stockholders or adjournment
thereof, shall not be more than sixty nor less than ten days before the date of
such meeting; (2) in the case of determination of stockholders entitled to
express consent to corporate action in writing without a meeting, shall not be
more than ten days from the date upon which the resolution fixing the record
date is adopted by the Board of Directors; and (3) in the case of any other
action shall not be more than sixty days prior to such other action. If no
record date is fixed: (1) the record date for determining stockholders entitled
to notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held; (2) the record date for determining stockholders
entitled to express consent to corporate action in writing without a meeting
when no prior action of the Board of Directors is required by law, shall be the
first date on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the Corporation in accordance with
applicable law, or, if prior action by the Board of Directors is required by
law, shall be at the close of business on the day on which the Board of
Directors adopts the resolution taking such prior action; and (3) the record
date for determining stockholders for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto. A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
SECTION 4. Lost or Destroyed Certificates. The Board may determine the
conditions upon which a new certificate of stock will be issued in place of a
certificate which is alleged to have been lost or destroyed, and may, in its
discretion, require the owner of such certificate or his legal representative to
give bond, with sufficient surety to the Corporation to indemnify it against any
and all losses or claims which may arise by reason of the issue of a new
certificate in the place of the one so lost or destroyed.
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SECTION 5. Condition Requiring Disposition. Any and all equity securities
of the Corporation are held subject to the condition that if a holder thereof is
found to be "disqualified" by the New Jersey Gaming Commission pursuant to the
provisions of the New Jersey Casino Control Act (P.L. 1977 c. 110) then such
holder shall dispose of his interest in the Corporation's equity securities
within 120 days after receipt of notice of such finding.
ARTICLE VII
CORPORATE SEAL
The seal of the Corporation shall be in the form of a circle and shall bear
the full name of the Corporation, the year of its incorporation and the words
"CORPORATE SEAL DELAWARE".
ARTICLE VIII
SIGNATURES
All checks, bonds, notes, contracts, agreements or other obligations or
instruments of the Corporation shall be signed by such officer or officers as
the Board may from time to time designate.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 1. Waiver of Notice. Whenever any notice whatever is required to be
given by these By-Laws or by statute, the person entitled thereto may in person,
or in the case of a stockholder by his attorney thereunto duly authorized, waive
such notice in writing (including telegraph, cable, radio or wireless), whether
before or after the meeting or other matter with respect of which such notice is
to be given, and in such event such notice need not be given to such person and
such waiver shall be equivalent to such notice, and any action to be taken after
such notice or after the lapse of a prescribed period of time may be taken
without such notice and without the lapse of any period of time.
SECTION 2. Employment Contracts. No contract of employment shall be entered
into for or on behalf of the Corporation for a period of more than one year
without prior approval of the Board.
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ARTICLE X
AMENDMENTS
Except as otherwise may be provided herein or in the Certificate of
Incorporation, these By-Laws, or any of them, may be amended, modified or
repealed, or new By-Laws may be adopted, either by vote of a majority of the
directors present at any annual, regular or special meeting, or by a vote
constituting a majority in number of the votes cast by stockholders present in
person or represented by proxy and entitled to vote at any annual or special
meeting.
5/10/96
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Exhibit 3.5
Registration No: 8355
RESORTS INTERNATIONAL (BAHAMAS) 1984 LIMITED
Resolution of the Shareholders of the above-named Company made pursuant to
Article 35 of the Articles of Association of the Company
= = = = =
RESOLVED that the name of the Company be changed to "SUN
INTERNATIONAL BAHAMAS LIMITED".
CERTIFICATE
I, J. BARRIE FARRINGTON , Secretary of RESORTS
INTERNATIONAL(BAHAMAS) 1984 LIMITED hereby certify the foregoing to be a true
and correct copy of a Resolution of the Members of the Company duly passed on
the 2nd day of May, A.D. 1994.
IN WITNESS WHEREOF I have here-
unto set my hand and the Common
Seal of the Company this 2nd
day of May, A.D 1994.
/s/ J. Barrie Farrington
--------------------
Secretary
-------------------------
SEAL Registrar General's Dept.
MAY 3 1994
NASSAU, BAHAMAS
-------------------------
<PAGE>
Registration No. 8355
RESORTS INTERNATIONAL (BAHAMAS) 1984 LIMITED
Resolution of the Shareholders of the above-named Company made pursuant to
Article 35 of the Articles of Association of the Company
= = = = =
RESOLVED that the Capital of the Company be converted to
B$5,148.00 divided into 1,800 Ordinary shares of B$2.86 each by
amalgamating the existing Classes of Shares (namely, 500 Class
"A" shares of B$2.86 each, 400 Class "B" shares of B$2.86 each
and 900 Class "C" Non-Voting shares of B$2.86 each) into a
single class ranking pari passu in all respects including voting
and
RESOLVED FURTHER that the existing Share Certificates be
cancelled on presentation to the Company and replacement
Certificates be issued on the basis of One (1) Ordinary Share for
each of the existing shares of any Class.
CERTIFICATE
I. DAVID G. BOWDEN, Secretary of Resorts International (Bahamas)
1984 Limited, hereby certify the foregoing to be a true and correct
copy of a Resolution of the Members of the Company duly passed on the
29th day of April, A.D. 1994.
IN WITNESS WHEREOF I have hereunto
set my hand and the Common Seal of
the Company this day of
, A.D. 1994.
/s/ David G. Bowden
-------------------
Secretary
-------------------------
SEAL Registrar General's Dept.
MAY 16 1994
NASSAU, BAHAMAS
-------------------------
<PAGE>
PARADISE REALTY LIMITED
At an Extraordinary General Meeting of the above-named Company held at the
Registered Office of the Company, Third Floor, Charlotte House, Charlotte
Street, Nassau, Bahamas on the 11th day of July, A.D., 1984, the sub-joined
Special Resolution was duly passed, and at a subsequent Extraordinary General
Meeting of the said Company held at the same place on the 25th day of July,
A.D., 1984, the sub-joined Special Resolution was duly approved, ratified and
confirmed.
RESOLVED that the name of the Company be changed to "RESORTS
INTERNATIONAL (BAHAMAS) 1984 LIMITED".
I, David G. Bowden, Secretary of Paradise Realty Limited, hereby certify
that the foregoing is a true copy of a Special Resolution which was duly passed
as a Special Resolution at a meeting of the above-named Company held at the
Registered Office of the Company, Third Floor, Charlotte House, Charlotte
Street, Nassau, Bahamas on the 11th day of July, A.D., 1984 at which meeting all
of the members of the Company for the time being entitled, according to the
regulations of the Company to vote were present by proxy and that the said
Special Resolution was duly confirmed at a meeting of the above-named Company
held at the same place on the 25th day of July, A. D., 1984 at which said
meeting all of the members of the Company for the time being entitled, according
to the regulations of the Company, to vote were present by proxy.
WITNESS WHEREOF I have hereunto
set my hand and the Common Seal
of the Company this 25th day of
July, A.D., 1984.
SEAL
Sgd.) D.G. Bowden
Secretary.
<PAGE>
PARADISE REALTY LIMITED
At an Extraordinary General Meeting of the above-named Company held at the
Registered Office of the Company, Third Floor, Charlotte House, Charlotte
Street, Nassau, Bahamas on the 16th day of April, A.D., 1984, the sub-joined
Special Resolution was duly passed, and at a subsequent Extraordinary General
Meeting of the said Company held at the same place on the 30th day of April,
A.D., 1984, the sub-joined Special Resolution was duly approved, ratified and
confirmed.
RESOLVED that the capital of the Company be increased to B$5,148
divided into 500 "A" shares of B$2.86 each, 400 "B" shares of
B$2.86 each and 900 "C" Non-voting shares of B$2.86 each by the
creation of an additional 900 "C" Non-Voting shares of B$2.86
each ranking in all respects pari passu with the existing shares
of B$2.86 each.
I, David G. Bowden, Secretary of Paradise Realty Limited, hereby certify
that the foregoing is a true copy of a Special Resolution which was duly
passed as a Special Resolution at a meeting of the above-named Company held
at the Registered Office of the Company, Third Floor, Charlotte House,
Charlotte Street, Nassau, Bahamas on the 16th day of April, A.D., 1984 at
which meeting all of the members of the Company for the time being entitled,
according to the regulations of the Company, to vote were present by proxy,
and that the said Special Resolution was duly confirmed at a meeting of the
above-named Company held at the same place on the 30th day of April, A.D.,
1984 at which meeting all of the members of the Company for the time being
entitled, according to the regulations of the Company, to vote were present
by proxy.
IN WITNESS WHEREOF I have
hereunto set my hand and the
<PAGE>
PARADISE REALTY LIMITED
At an Extraordinary General Meeting of the above-named Company held at the
Registered Office of the Company, Building No. 309, Bay Street, Nassau, Bahamas
on the 9th day of July, 1965, the sub-joined Special Resolution was duly passed,
and at a subsequent Extraordinary General Meeting of the said Company held at
the same place on the 24th day of July, 1965, the sub-joined Special Resolution
was duly approved, ratified and confirmed, namely:-
"RESOLVED that the Articles of Association of the Company be amended by
deleting Article 64 of the Articles of Association and substituting in lieu
thereof the following new Article, namely:-
64. The management of the business of the company shall be vested in
the directors, who, in addition to the powers and authorities by those
presents or otherwise expressly conferred upon them, may exercise all
such powers and do all such acts and things as may be exercised or
done by the company and are not hereby or by Act expressly directed or
required to be exercised or done by the company in general meeting,
but subject nevertheless to the provisions of any Act, and of these
presents, and to any regulations from time to time made by the company
in general meeting, provided that no regulation so made shall
invalidate any prior act of the directors which would have been valid
if such regulation had not been made. Notwithstanding the foregoing
the company shall not, except with the prior authority of a resolution
of the directors passed with the concurring vote of at least two of
the 'A' directors, or their alternates, and at least two of the 'B'
directors, or their alternates, enter into any agreement (a) to sell,
lease, charge or in any other way dispose of or part with the
possession of any asset of the company having a value exceeding Five
thousand pounds (b) to purchase or acquire any asset for a price
exceeding Five thousand pounds, or (c) for the employment by the
company of any person, whether a director, officer or otherwise, at an
annual salary in excess of Five thousand pounds".
I, Douglas Eugene Duncombe, Secretary of Paradise Realty Limited,
hereby certify that the foregoing is a true copy of a Special Resolution which
was duly passed as a Special Resolution at a meeting of the above-named Company
held at the Registered Office of the Company, Building No. 309, Bay Street,
Nassau, Bahamas on the 9th day of July, 1965, at which meeting all of the
members of the Company for the time being entitled, according to the regulations
of the
<PAGE>
-2-
Company, to vote were present in person and that the said Special Resolution was
duly confirmed at a meeting of the above-named Company held at the same place on
the 24th day of July, 1965 at which said meeting all of the members of the
Company for the time being entitled, according to the regulations of the
Company, to vote were present in person.
IN WITNESS WHEREOF I have
hereunto set my hand and
(SEAL) the Common Seal of the
Company this 24th day of
July, 1965.
(sgd.) D.E. Duncombe
Secretary.
PARADISE REALTY LIMITED
BAHAMA ISLANDS,
Registrar General's Office.
I certify the foregoing to be a true copy of the
original deposited in this office.
/s/ Geraldine Murdoch
-----------------------------------------
20/9/65 Ag. Asst. Registrar General
<PAGE>
BAHAMA ISLANDS
- - -
The Companies Act.
Company Limited by Shares.
- - -
MEMORANDUM OF ASSOCIATION
OF
PARADISE REALTY LIMITED
- - -
1. The name of the company is "Paradise Realty Limited".
2. The registered office of the company will be situated in the Island of
New Providence, one of the Bahama Islands.
3. The objects for which the company is established are:
(1) To purchase, take on lease or in exchange, or otherwise acquire
and to hold any lands and buildings in the Bahama Islands or
elsewhere, and any estate or interest in, and any rights
connected with, any such lands and buildings.
(2) To develop and turn to account any land acquired by or in which
the company is interested, and in particular by laying out and
preparing the same for building purposes, constructing, altering,
fitting up, and improving buildings and by planting, paving,
draining, landscaping, farming, and cultivating the same, and by
advancing money to, and entering into contracts and arrangements
of all kinds with builders, tenants, and others.
(3) To purchase for investment or resale, and to traffic in land and
other property of any tenure and any interest therein, and to
make advances upon the security of land or other property, or any
interest therein, and to deal in, traffic by way of sale, lease,
exchange, or otherwise with land and any other property, whether
real or personal; and to act as real estate brokers and agents.
(4) To purchase or otherwise acquire, construct, execute, carry out,
equip, improve, develop,
<PAGE>
-2-
maintain, administer, manage, supervise or control buildings,
works and conveniences of all kinds, and without prejudice to the
generality of the foregoing words, in particular townships,
roads, bridges, reservoirs, waterways, harbours, embankments,
irrigations, reclamations, improvements, sewage, drainage,
sanitary, water, gas, electric light, telephonic, telegraph,
wireless and power supply works, hotels, apartment houses,
houses, clubs, restaurants, theatres, cinemas, office buildings,
stadia, baths, swimming pools, places of worship, places of
amusement, pleasure grounds, golf courses, race-tracks, parks,
gardens, reading rooms, stores, shops, offices, warehouses, and
all other buildings, works and coveniences which the company may
think directly or indirectly conducive to these objects, and to
contribute or otherwise assist or take part in the construction,
maintenance, development, working, control, management and
supervision thereof.
(5) To carry on in all their respective branches, the businesses of
builders and general construction contractors and
sub-contractors, and without prejudice to the generality of the
foregoing words, in particular to undertake, manage, supervise,
administer, control, or give advice in connection with the
erection, construction, decoration, repairing, amending,
cleansing, finishing and furnishings of buildings, erections,
constructions, and works of all kinds.
(6) To carry on the businesses of amusement, entertainment and
theatrical impresarios, entrepreneurs and contractors in all
branches.
(7) To cater for public and private amusements of every description
and in particular, and without limiting the generality thereof,
to present, produce, manage, arrange and conduct any plays,
reviews, promenade
<PAGE>
-3-
and other concerts, musical and other pieces, cinema shows,
ballets, shows, exhibitions, variety, late-night and other
entertainments as the company may from time to time think fit.
(8) To buy, lease, construct, build or otherwise acquire all plant
and equipment necessary or convenient to carry the above objects
or any of them into effect.
(9) To carry on any kind of manufacture or trade, and to manufacture,
buy, take on lease or in exchange or otherwise acquire, own,
mortgage, pledge, sell, assign, and to transfer, or otherwise
dispose of, invest, let, trade, and deal in and with goods,
wares and merchandise of every class and description and without
prejudice to the generality of the foregoing words, in particular
building materials and requisites of all kinds, commercial,
domestic and other apparatus, installations, fixtures, furniture
and furnishings.
(10) To establish, maintain and operate shipping, air transport, and
road transport services and all ancillary services and, for these
purposes to purchase, take in exchange, charter, hire, build,
construct or otherwise acquire, and to own, work, manage, and
trade with steam, sailing, motor and other ships, trawlers,
drifters, tugs, and vessels, aircraft and motor and other
vehicles with all necessary and convenient equipment, engines,
tackle, gear, furniture, and stores, or any shares or interests
in ships, vessels, aircraft, motor and other vehicles, including
shares, stocks, or securities of companies possessed of or
interested in any ships, aircraft or vehicles, and to maintain,
repair, fit out, refit, improve, insure, alter, sell, exchange,
or let out on hire or hire purchase or charter or otherwise deal
with and dispose of any of the ships, vessels, aircraft, and
vehicles, shares, stock and securities, or any of the engine
tackle, gear, furniture, equipment, and stores of the company.
<PAGE>
-4-
(11) To purchase or otherwise acquire, and to hold, sell, exchange,
lease, mortgage, pledge, charge, convert, turn to account,
dispose of, and deal with property and rights of all kinds, and
in particular mortgages, debentures, debenture stock, stock,
shares, bonds, patents, concessions, annuities, policies,
options, contracts, produce, commodities, bullion, specie, gems
and other minerals, book debts, business concerns and
undertakings, and claims, privileges, and choses in action of all
kinds.
(12) To purchase or otherwise acquire any interest in any patents,
brevets d'invention, licences, concessions, and the like,
conferring an exclusive or non-exclusive or limited right to
use, or any secret or other information as to any invention which
may seem to the company capable of being profitably dealt with,
and with a view thereto to enter into and carry into effect all
such agreements as may seem expedient, and to use, exercise,
develop, grant licenses in respect of, or otherwise to turn to
account any such patents, brevets d'invention, licenses,
concessions, and the like, and information aforesaid.
(13) To act as advisers and consultants to any person, firm, company
or corporation in any part of the world in any capacity in which
a body corporate may properly act as adviser or consultant.
(14) To carry on a general financial agency, investment and brokerage
business, and to act as agents and brokers for the purchase,
sale, improvement, and management of any property, estate,
business or undertaking.
(15) To act as agents and brokers for any individual, company, firm,
or court of law, for the investment, loan, payment, transmission,
and collection of money, and to take, receive, hold, transfer,
and
<PAGE>
-5-
convey all property, real or personal, [ILLEGIBLE] be granted,
conveyed, or committed to this company.
(16) To carry on the business of general commission agents and
manufacturers' representatives in all its branches.
(17) To act as agents or attorneys for the transaction of any
business, and the investment and collection of moneys, rents,
interests, dividends, mortgages, bonds, bills, notes, and other
securities.
(18) To carry on a guarantee and agency business, and to give any
guarantee for the payment of money or for the performance of any
obligation or undertaking whether on behalf of the company or on
behalf of any other person or corporation.
(19) To advance, deposit, or lend money, securities, and property, to
or with such persons and on such terms as may seem expedient, and
to discount, buy, sell, and deal in bills, notes, warrants,
coupons, and other negotiable or transferable securities or
documents.
(20) To promote, organise, manage, or develop, or to assist in the
promotion, organisation, management, or development of any
company, syndicate, enterprise, or undertaking.
(21) To carry on any other business which may seem to the company
capable of being conveniently carried on in connection with the
above, or calculated directly or indirectly to enhance the value
of or render profitable any of the company's property or rights.
(22) To acquire and undertake the whole or any part of the business,
property, and liabilities of any person or company carrying on
any business which this company is authorized to carry on, or
possessed of property suitable for the purposes of this company.
(23) To take, or otherwise acquire, and hold shares in any other
company having objects altogether or in part similar to those of
this company, or carrying
<PAGE>
on any business capable of being conducted so as directly or
indirectly to benefit this company.
(24) Generally to purchase, take on lease or in exchange, hire, or
otherwise acquire, any real and personal property, and any rights
or privileges which the company may think necessary or convenient
for the purposes of its business, and to construct, maintain, and
alter any buildings, or works, necessary or convenient for the
purposes of the company.
(25) To promote any company or companies for the purpose of acquiring
all or any of the property and liabilities of this company, or
for any other purpose which may seem directly or indirectly,
calculated to benefit this company.
(26) To sell or dispose of the undertaking of the company or any part
thereof for such consideration as the company may think fit, and
in particular for shares, debentures, bonds, mortgages, or other
securities of any other company having objects altogether or in
part similar to those of this company.
(27) To enter into partnership or into any arrangement for sharing
profits, union of interests, co-operation, joint adventure,
reciprocal concession, or otherwise, with any person or company
carrying on or engaged in, or about to carry on or engage in, any
business or transaction which this company is authorised to carry
on or engage in, or any business or transaction capable of being
conducted so as to directly or indirectly benefit this company.
(28) To amalgamate with any other company having objects altogether or
in part similar to those of this company.
(29) To enter into any arrangements with any governments or
authorities, supreme, municipal, local or otherwise, that may
seem conducive to the company's objects or any of them, and to
obtain from any such government or authority, any rights,
<PAGE>
privileges, and concessions which the company [illegible] think
it desirable to obtain, and to carry out, exercise, and comply
with any such arrangements, rights, privileges, and concessions.
(30) To obtain any provisional Order or Act of the Legislature and to
do any other act or thing for enabling the company to carry any
of its objects into effect, or for effecting any modification of
the company's constitution, or for any other purpose which may
seem expedient, and to oppose any proceedings or applications
which may seem calculated, directly or indirectly to prejudice
the company's interests.
(31) To draw, make, accept, indorse, discount, execute, and issue
promissory notes, bills of exchange, bills of lading, warrants,
debentures, and other negotiable or transferable instruments.
(32) To invest and deal with the moneys of the company not immediately
required upon such securities and in such manner as may from time
to time be determined.
(33) To lend money, either with or without security, generally to such
persons and on such terms as the company may think fit, and in
particular to customers and others having dealings with the
company and to members, directors and officers of the company.
(34) To borrow or raise or secure the payment of money in such manner
as the company shall think fit, and in particular by the issue of
debentures, or debenture stock, perpetual or otherwise, charged
upon all or any of the company's property (both present and
future), including its uncalled capital, and to redeem or pay off
such securities.
(35) To sell, improve, manage, develop, exchange, lease, mortgage,
dispose of, turn to account, or otherwise deal with, all or any
part of the property or rights of the company.
(36) To remunerate any person or company for services rendered, or to
be rendered, in placing or assisting
<PAGE>
to place or guaranteeing the placing of any of the shares in the
company's capital, or any debentures or other securities of the
company, or in or about the formation or promotion of the company
or the conduct of its business.
(37) To adopt such means of making known the business of the company
as may seem expedient.
(38) To grant pensions, allowances, gratuities and bonuses to
directors, ex-directors, officers, ex-officers, employees, and
ex-employees of the company and the dependents and connections of
such persons, and to establish and maintain or concur in
establishing and maintaining trusts, funds, or schemes (whether
contributory or non-contributory) with a view to providing
pensions or other benefits for any such persons as aforesaid,
their dependents or connections, and to support or subscribe to
any charity, funds, or institutions the support of which may in
the opinion of the directors be calculated directly or indirectly
to benefit the company or its employees, and to institute and
maintain any club or other establishment or profit sharing scheme
calculated to advance the interests of the company, its officers
or employees.
(39) To pay for any rights or property acquired by the company, and to
remunerate any person or persons or body or bodies corporate,
either by cash payment, transfer of property, or by the allotment
of shares, debentures or other securities of the company credited
as paid up in full, in part or otherwise.
(40) Generally to do all such other acts and things as the company may
think incidental or conducive to the attainment of the above
objects or any of them.
(41) To procure the company to be registered or recognised in any part
of the world outside of the Bahama Islands.
<PAGE>
(42) To do all or any of the above things in any part of the world,
and as principals, agents, contractors, trustees or otherwise,
and by or through sub-contractors, trustees, agents or otherwise,
and either alone or in conjunction with others.
(43) To distribute any of the property of the company "in specie"
among the members.
And it is hereby declared that the word "company" in this clause, except where
used in reference to this company, shall be deemed to include any partnership or
other body of persons whether corporate or unincorporate, and whether domiciled
in the Bahama Islands or elsewhere, and that the objects specified in the
different paragraphs of this clause shall, except where otherwise expressed in
such paragraphs, be in nowise limited by reference to any other paragraph or the
name of the company, but may be carried out in as full and ample a manner and
shall be construed in as wide a sense as if each of the said paragraphs
defined the objects of a separate, distinct and independent company.
4. The liability of the members is limited.
5. The capital of the company is (pounds)900 divided into 500 "A" shares of
(pounds)1 each and 400 "B" shares of (pounds)1 each and save as in the
accompanying Articles of Association otherwise expressly provided the "A" shares
and the "B" shares shall rank pari passu in all respects and be a single class,
with power to divide the shares in the capital for the time being into several
classes, and to attach thereto respectively any preferential, deferred,
qualified, or special rights, privileges, conditions or restrictions and to
modify or deal with in the manner mentioned in Clause 26 of the accompanying
Articles of Association but not otherwise, any rights for the time being
attached to any class or classes of shares in the company so that Clause 26 of
the said Articles shall be deemed to be incorporated herein and have effect
accordingly.
WE, the several persons whose names and addresses are subscribed, are desirous
of being formed into a company, in pursuance of this Memorandum of Association,
and we respectively agree to take the number of shares in the capital of the
company set opposite our respective names.
<PAGE>
Exhibit 3.6
BAHAMA ISLANDS.
-------
The Companies Act.
-------
ARTICLES OF ASSOCIATION
OF
PARADISE REALTY LIMITED.
-------
Explanatory.
1. In these presents, unless there be something in the subject or context
inconsistent therewith:-
"The company" means the above-named company.
"The office" means the registered office for the time being of the
company.
"The register" means the register of members to be kept pursuant to
Section 22 of The Companies Act.
"The seal" means the common seal of the company.
"Month" means calendar month.
"In writing" and "written" mean and include words printed,
lithographed, represented or reproduced in any mode in a
visible form.
"The directors" means the directors for the time being of the
company.
"Special resolution" and "extraordinary resolution" have the
meanings assigned thereto respectively by The Companies Act.
Words importing the singular number only include the plural number,
and vice versa.
Words importing the masculine gender only include the feminine
gender.
Words importing persons include corporations.
2. In addition to the registered office of the company in the Colony, the
company may have an office for the transaction of business at any other place or
places.
<PAGE>
-2-
Capital.
3. The capital of the company is (pounds) 900 divided into 500 "A" shares
of (pounds) 1 each and 400 "B" shares of (pounds) 1 each. Save as in these
Articles otherwise expressly provided, the "A" and "B" shares shall rank pari
passu in all respects and be a single class.
Shares.
4. None of the funds of the company shall be employed in the purchase of,
or lent on, shares of the company.
5. The business of the company may be commenced as soon after the
incorporation of the company as the directors shall think fit, and
notwithstanding that part only of the shares may have been allotted.
6. Subject to the provisions of these Articles relating to new shares, the
shares shall be under the control of the directors who may allot or otherwise
dispose of the same to such persons, on such terms and conditions, and at such
times as the directors think fit.
7. Save as herein otherwise provided, the company shall be entitled to
treat the registered holder of any share as the absolute owner thereof, and
accordingly shall not, except as ordered by a court of competent jurisdiction,
or as by Act required, be bound to recognize any equitable or other claim to or
interest in such share on the part of any other person.
Certificates.
8. The certificates of title to shares shall be issued under the seal of
the company, and shall be signed by the President or a Vice-President, and shall
be countersigned by the Secretary or an Assistant Secretary or some other person
appointed by the directors.
9. Every member shall be entitled to one certificate for the shares
registered in his name, or to several certificates each for one or more of such
shares, and every certificate of shares shall specify the number and the
denoting numbers of the shares in respect of which it is issued, and the amount
paid up thereon.
<PAGE>
-3-
10. If any certificate be worn out or defaced, then upon production
thereof to the directors, they may order the same to be cancelled, and may issue
a new certificate in lieu thereof; and if any certificate be lost or destroyed,
then, upon proof thereof to the satisfaction of the directors, and on such
indemnity as the directors deem adequate being given, a new certificate in lieu
thereof shall be given to the party entitled to such lost or destroyed
certificate.
Company's Lien on Shares.
11. The company shall have a first and paramount lien upon all the shares
registered in the name of each member, and upon the proceeds of sale thereof,
for his debts, liabilities, and engagements, solely or jointly with any other
person, to or with the company whether the period for the payment, fulfilment,
or discharge thereof shall have actually arrived or not, and no equitable
interest in any share shall be created except upon the footing and condition
that Article 7 hereof is to have full effect. And such lien shall extend to all
dividends from time to time declared in respect of such shares. Unless otherwise
agreed, the registration of a transfer of shares shall operate as a waiver of
the company's lien, if any, on such shares.
12. For the purpose of enforcing such lien, the directors may sell the
shares subject thereto in such manner as they think fit, but no sale shall be
made until such period as aforesaid shall have arrived, and until notice in
writing of the intention to sell shall have been served on such member or his
personal representatives, and default shall have been made by him or them in the
payment, fulfilment, or discharge of such debts, liabilities, or engagements for
seven days after such notice.
13. The net proceeds of any such sale after payment of the costs of such
sale shall be applied in or towards satisfaction of the debts, liabilities, or
engagements of such member and the residue (if any) paid to him, his personal
representatives or assigns.
<PAGE>
-4-
14. Upon any sale for enforcing a lien in purported exercise of the powers
hereinbefore given, the directors may cause the purchaser's name to be entered
in the register in respect of the shares sold, and the purchaser shall not be
bound to see to the regularity of the proceedings or to the application of the
purchase money, and after his name has been entered in the register in respect
of such shares the validity of the sale shall not be impeached by any person and
the remedy of any person aggrieved by the sale shall be in damages only and
against the company exclusively.
Transfer and Transmission.
15. The instrument of transfer of any share shall be signed by both the
transferor and transferee, and the transferor shall be deemed to remain the
holder of such share until the name of the transferee is entered in the register
in respect thereof.
16. Shares in the company may be transferred in any form which the
directors may think fit to register.
17. The directors may decline to register a transfer of any share on which
the company has a lien. They may also decline to register a transfer of any
share to any person of whom they do not approve. And they may also decline to
register a transfer of any share without assigning any reason therefor.
18. Every instrument of transfer shall be left at the office for
registration, accompanied by the certificate of the shares to be transferred,
and such other evidence as the directors may require to prove the title of the
transferor or his right to transfer the shares.
19. The personal representatives of a deceased member (not being one of
several joint holders) shall be the only persons recognised by the company as
having any title to the shares registered in the name of such member, and in
case of the death of any one or more of the joint registered holders of any
registered share, the survivors shall be the only persons recognised by the
company as having any title to or interest in such shares.
<PAGE>
-5-
20. Any person becoming entitled to shares in consequence of the death or
bankruptcy of any member, upon producing such evidence that he sustains the
character in respect of which he proposes to act under this Article, or of his
title, as the directors think sufficient, may be registered as a member in
respect of the shares, or may, subject to the regulations as to transfers
hereinbefore contained, transfer such shares. The directors shall have the same
right to refuse to register a person entitled by transmission to any shares or
his nominee, as if he were the transferee named in an ordinary transfer
presented for registration.
Alteration of Capital.
21. The company may, from time to time, by special resolution, increase
the capital by the creation of new shares of such amount as may be deemed
expedient.
22. The new shares shall be issued upon such terms and conditions and with
such rights and privileges annexed thereto as the special resolution creating
the same shall direct, and if no direction be given, as the directors shall
determine, and in particular such shares may be issued with a preferential or
qualified right to dividends and in the distribution of assets of the company,
and with a special or without any right of voting.
23. All new shares shall be offered to the members in proportion to the
existing shares held by them, and such offer shall be made by notice specifying
the number of shares to which the member is entitled, and limiting a time (not
being less than thirty days) within which the offer, if not accepted, will be
deemed to be declined; and after the expiration of such time, or on receipt of
an intimation from the member to whom such notice is given, that he declines to
accept the shares offered, the directors may dispose of the same in such manner
as they think most beneficial to the company.
24. Except so far as otherwise provided by the conditions of issue, or by
these presents, any capital raised by the creation of new shares shall be
considered part of the original capital, and shall be subject to the provisions
herein contained with reference to transfer and transmission, forfeiture, lien,
and otherwise.
<PAGE>
-6-
25. The company may, from time to time, by special resolution, consolidate
its shares or any of them.
Variation of Rights.
26. Whenever the capital of the company is divided into different classes
of shares, the special rights attached to any class may, subject to the
provisions of any Act, be varied or abrogated by special resolution, either with
the consent in writing of the holders of three-fourths of the issued shares of
the class, or with the creation of an extraordinary resolution passed at a
separate general meeting of such holders (but not otherwise), and may be as
varied or abrogated whilst the company is a going concern or in contemplation of
a winding up. To every such separate general meeting all the provisions of these
presents relating to general meetings of the company, or to the proceedings
thereat, shall mutatis mutandis apply, except that the necessary quorum shall be
two persons at least holding or representing by proxy one-half in nominal amount
of the issued shares of the class, but so that if at any adjourned meeting of
such holders a quorum as above defined is not present, those members who are
present shall be a quorum and that any holder of shares in the class present in
person or by proxy may demand a poll, and that such holders shall on a poll have
one vote for every share of the class held by them respectively. The special
rights conferred upon the holders of any shares or class of shares shall not,
unless otherwise expressly provided by the terms of issue, be deemed to be
modified by the creation or issue of further shares ranking pari passu
therewith.
Borrowing Powers.
27. The directors may, from time to time, at their discretion, but only
with the authority of a resolution passed with the concurrence of at least two
of the 'A' directors, or their alternates, and two of the 'B' directors, or
their alternates, raise or borrow, or secure the payment of, any sum or sums of
money for the purposes of the company.
28. With the authority referred to in the preceding Article, the directors
may raise or secure the repayment of such sum or sums in such manner and upon
such terms and conditions
<PAGE>
-7-
in all respects as they think fit, and, in particular by the issue of bonds,
perpetual or redeemable debentures or debenture stock, or any mortgage, charge,
or other security on the undertaking or the whole or any part of the property of
the company (both present and future), including its uncalled capital for the
time being.
General Meetings.
29. General meetings of the company may be held anywhere in the world.
30. The first general meeting shall be held at such time (not being more
than four months after the registration of the company) as the directors may
determine, and in the Island of New Providence, or at such other place within or
without the Colony as may be prescribed by the directors.
31. Other general meetings shall be held once at least in every calendar
year at such time, not being more than fifteen months after the holding of the
last preceding general meeting, and in the Island of New Providence, or at such
place within or without the Colony as may be determined by the directors. At
these meetings the Annual Report of the directors shall be presented, the
directors elected for the ensuing year and the general business of the company
transacted. Such general meetings shall be called "ordinary meetings", and all
other meetings of the company shall be called "extraordinary meetings".
32. The directors may, whenever they think fit, convene an extraordinary
meeting, and they shall, on the requisition of the holders of one-fourth in
value of the subscribed and issued shares of the company, forthwith proceed to
convene an extraordinary meeting of the company.
33. Fourteen days' notice, specifying the place, day and hour of the
meeting, and in case of special business, the general nature of such business
shall be given to the members in manner hereinafter mentioned; or in such other
manner, if any, as may be prescribed by the company in general meeting; but the
accidental omission to give notice of a meeting to, or the non-
<PAGE>
-8-
receipt of such notice by any person entitled to receive notice shall not
invalidate the proceedings at that meeting.
34. All business shall be deemed to be special that is transacted at an
extraordinary meeting, and all that is transacted at an ordinary meeting, with
the exception of the consideration of the accounts, balance sheets, and the
ordinary reports of the directors and auditors.
35. When all the members in person or by proxy sign the minutes of an
ordinary or extraordinary meeting, the same shall be deemed to have been duly
held, notwithstanding that the members have not actually come together or that
there may have been technical defects in the proceedings. And a resolution in
writing, in one or more parts, signed by all the members shall be as valid and
effectual as if it had been passed at a meeting of the members duly called and
constituted.
Proceedings at General Meetings.
36. No business shall be transacted at any general meeting unless a quorum
is present when the meeting proceeds to business except to take measures to
obtain a quorum.
37. A quorum shall consist of two members present in person or by proxy
and holding or representing between them not less than fifty-one per centum of
the subscribed and issued shares of the company carrying the right to vote at
such meeting.
38. The President, or in his absence, the senior Vice-President present
shall preside as Chairman at every general meeting of the company. In the
absence of the President and the Vice-Presidents, the members present shall
choose some one of their number to be Chairman.
39. The Chairman may, with the consent of the meeting, adjourn any meeting
from time to time, and from place to place, as the meeting shall determine.
Whenever a meeting is adjourned for twenty-one days or more, notice of the
adjourned meeting shall be given in the same manner as in the case of an
original meeting. No business shall be transacted at any
<PAGE>
-9-
adjourned meeting other than the business which might have been transacted at
the meeting from which the adjournment took place.
40. Every question submitted to a meeting shall be decided, in the first
instance, by a show of hands. In the case of an equality of votes, the Chairman
shall not, either on a show of hands or on a poll, have a casting vote.
41. At any general meeting, unless a poll is demanded by the Chairman or
by members present in person or by proxy holding one-fourth in value of the
subscribed and issued shares of the company, a declaration by the Chairman that
a resolution has been carried, or carried by a particular majority, or lost, or
not carried by a particular majority, and an entry to that effect in the books
of proceedings of the company, shall be conclusive evidence of the fact without
proof of the number or proportion of the votes recorded in favour of or against
such resolution.
42. If a poll is demanded as aforesaid, it shall be taken in such manner
and at such time and place as the Chairman of the meeting directs and either at
once, or after an interval or adjournment, or otherwise, and the results of the
poll shall be deemed to be the resolution of the meeting at which the poll was
demanded. The demand for a poll may be withdrawn. In case of any dispute as to
the admission or rejection of a vote, the Chairman shall determine the same, and
such determination made in good faith shall be final and conclusive.
Votes of Members.
43. On a show of hands every member present in person or by proxy shall
have one vote, and upon a poll every member present in person or by proxy shall
have one vote for every share held by him.
44. Votes may be given either personally or by proxy.
45. The instrument appointing a proxy shall be in writing, under the hand
of the appointor or of his attorney. Any person appointed a proxy need not be a
member of the company.
46. The instrument appointing a proxy shall be deposited with the
Secretary before or at the meeting for which it is to be used, and may be
permanent or ad hoc. If a proxy is permanent it may be recorded with the
Secretary.
<PAGE>
-10-
47. A vote given in accordance with the terms of an instrument of proxy
shall be valid notwithstanding the previous death of the principal, or
revocation of the proxy, or transfer of the share in respect of which the vote
is given, provided no intimation in writing of such death, revocation, or
transfer shall have been received before the meeting.
48. An instrument appointing a proxy may be in any form which the
directors think fit to approve.
Directors.
49. (1) The number of directors shall be seven and the holders of the "A"
shares shall at all times be entitled to appoint four directors and the holders
of the "B" shares shall at all times be entitled to appoint three directors,
respectively to represent them in accordance with this Article. Directors so
appointed by the holders of the "A" shares are hereinafter called "'A'
directors". Directors so appointed by the holders of the "B" shares are
hereinafter called "'B' directors".
(2) Every such appointment shall be made in writing signed by or on
behalf of the holders (including a single holder) of a majority of the "A"
shares or of a majority of the "B" shares (as the case may be) and left at the
office. The holders of a majority of the "A" shares may at any time in like
manner remove any 'A' director from office and appoint any person to be an 'A'
director in his place or fill any other vacancy among the 'A' directors. The
holders of a majority of the "B" shares may at any time in like manner remove
any 'B' director from office and appoint any person to be a 'B' director in his
place or fill any other vacancy among the 'B' directors.
(3) The first directors shall be James M. Crosby, I. G. Davis, Jr.,
Charles E. Murphy, Jr., Ralph White, Georgette Groves, Robert Keith Stuart
Gonsalves, and Ronald George Gowlding of whom the first four named shall be
deemed to have been duly appointed 'A' directors, and the last three named shall
be deemed to have been duly appointed 'B' directors.
50. No director shall be required to hold any share qualification.
<PAGE>
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Alternate Directors.
51. Any 'A' director may at any time appoint any person approved in
writing by the remaining 'A' directors to be an alternate director of the
company, and any 'B' director may at any time appoint any person approved in
writing by the remaining 'B' directors to be an alternate director of the
company; and any director may at any time remove any alternate director so
appointed by him. An alternate director so appointed shall not in respect of
such appointment be entitled to receive any remuneration from the company, but
shall (subject to his giving to the company an address at which notices may be
served upon him) be entitled to receive notices of all meetings of the directors
and to attend and vote as a director at any such meeting at which the director
appointing him is not personally present, and generally to perform all the
functions of his appointor as a director in the absence of such appointor. An
alternate director shall ipso facto cease to be an alternate director if his
appointor ceases for any reason to be a director. All appointments and removals
of alternate directors shall be made in writing signed by the director making or
revoking such appointment and left at the office.
Director or Officer Contracting with Company.
52. No director or officer shall be disqualified by his office from
contracting and/or dealing with the company either as vendor, purchaser, or
otherwise, nor shall any such contract, or any contract or arrangement entered
into by or on behalf of the company in which any director or officer shall be in
any way interested, be avoided, nor shall any director or officer so contracting
or being so interested be liable to account to the company for any profit
realised by any such contract or arrangement by reason of such director or
officer holding that office or the fiduciary relation thereby established, but
it is declared that the nature of his interest must be disclosed by him at the
meeting of the directors at which the contract or arrangement is determined on,
if his interest then exists, or in any other case at the first meeting of the
directors after
<PAGE>
-12-
the acquisition of his interest, and having disclosed his interest as aforesaid
such director shall be entitled to vote as a director in respect of any contract
or arrangement in which he is so interested as aforesaid.
Remuneration of Directors.
53. The directors shall be paid out of the funds of the company by way of
remuneration for their services such sums as the company by extraordinary
resolution may from time to time determine, and such remuneration shall be
divided among them in such proportions and manner as the directors may
determine, and in default of such determination within the year equally. The
directors shall also be paid their travelling expenses (if any) of attending and
returning from board and committee meetings.
Proceedings of Directors.
54. The directors may meet together at such place as they may determine
for the dispatch of business, adjourn, and otherwise regulate their meetings and
proceedings as they think fit. Three directors present in person or by their
alternates shall be a quorum.
55. The President or any two directors may at any time convene a meeting
of the directors. Subject as hereinafter provided in Article 63, all directors
and their alternates shall be entitled to Five (5) clear days' notice at every
meeting of the directors. Questions arising at any meeting shall be decided by a
majority of votes, but in case of an equality of votes, the Chairman shall not
have a second or casting vote.
56. A validly constituted meeting of the directors for the time being at
which a quorum is present shall be competent to exercise all or any of the
authorities, powers and discre-
<PAGE>
-13-
tions by or under the regulations of the company for the time being vested in or
exercisable by the directors generally.
57. The President, or in his absence the senior Vice-President (being a
director) present, shall preside at all meetings of the directors. In the
absence of the President and the Vice-Presidents (being directors), the
directors present shall choose some one of their number to be Chairman of the
meeting.
58. The directors may by resolution having the concurrence of at least two
of the 'A' directors, or their alternates, and two of the 'B' directors, or
their alternates, delegate any of their powers to committees, and they may, from
time to time, revoke such delegation or revoke the appointment of and discharge
any such committees either wholly or in part and either as to persons or
purposes.
59. Every committee so formed shall, in the exercise of the powers so
delegated, conform to these Articles and to any regulations that may from time
to time be imposed on it by the directors.
60. Each such committee may elect a Chairman of its meetings. If no such
Chairman is elected, or if at any meeting the Chairman is not present within ten
minutes after the time appointed for holding the same, the members present may
choose some one of their number to be Chairmen of the meeting.
61. Each such committee may meet and adjourn as it thinks proper.
Questions arising at any meeting shall be determined by a majority of votes of
the members present, but in the case of an equality of votes, the Chairman shall
not have a second or casting vote.
62. All acts done at any meeting of the directors, or of a committee of
directors, or by any person acting as a director, shall, notwithstanding that it
shall afterwards be discovered that there was some defect in the appointment or
continuance in office of any such directors or person acting as aforesaid, or
<PAGE>
-14-
they or any them are disqualified or had vacated office, or are not entitled to
vote, be as valid as if every such person had been duly appointed or had duly
continued in office and was qualified and had continued to be a director, and
had been entitled to be a director.
63. When all of the 'A' directors or their respective alternates and all
of the 'B' directors or their respective alternates sign the minutes of a
meeting of the directors, the same shall be deemed to have been duly held
notwithstanding that notice of such meeting shall not have been given in
accordance with the provisions of Article 55 and notwithstanding that the
directors have not actually come together or that there may have been technical
defects in the proceedings. And a resolution in writing, in one or more parts,
signed by all of the 'A' directors and all of the 'B' directors shall be as
valid and effectual as if it had been passed at a meeting of the directors duly
called and constituted.
Powers of Directors.
64. The management of the business of the company shall be vested in the
directors, who, in addition to the powers and authorities by these presents or
otherwise expressly conferred upon them, may exercise all such powers and do all
such acts and things as may be exercised or done by the company and are not
hereby or by Act expressly directed or required to be exercised or done by the
company in general meeting, but subject nevertheless to the provisions of any
Act, and of these presents, and to any regulations from time to time made by the
company in general meeting, provided that no regulation so made shall invalidate
any prior act of the directors which would have been valid if such regulation
had not be made. Notwithstanding the foregoing the company shall not enter into
any agreement to sell, lease, charge or in any other way dispose of or part with
the possession of any of the principal capital assets of the company except with
the prior authority of a resolution of the directors passed with the concurring
vote of at least two of the 'A' directors, or their alternates, and at least two
of the 'B' directors, or their alternates, enter into any agreement (a) to sell,
lease, charge or in any other way dispose of or part with the possession of any
asset of the company having a value exceeding Five thousand pounds (b) to
purchase or acquire any asset for a price exceeding Five thousand pounds or (c)
for the employment by the company of any person, whether a director, officer or
otherwise, at an annual salary in excess of Five thousand pounds.
65. Subject to the provisions of Article 54, the continuing directors may
act at any time notwithstanding any vacancy in their body.
<PAGE>
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Officers.
66. The officers of the company shall be elected annually by the company
or appointed annually by the directors, and shall consist of a President, one or
more Vice-Presidents, a Secretary, a Treasurer, one or more Assistant
Secretaries, and one or more Assistant Treasurers, and such other officers as
the company or the directors may from time to time think necessary. The officers
shall in addition to the duties prescribed by these Articles, perform such
duties as may be prescribed by the directors. They shall hold office until their
successors are elected or appointed. But any officer may be removed at any time
by the company in general meeting or by the directors. If any office becomes
vacant during the year the company in general meeting or the directors may fill
the same for the unexpired term.
67. Until officers are elected or appointed Douglas Eugene Duncombe shall
be deemed to be the Secretary of the company.
68. Any person may hold more than one of these offices, and no officer
need be a member of the Company.
President.
69. The President shall act as Chairman of all meetings of the members and
of the directors. He shall also perform such other duties as may be prescribed
by these Articles, the company in general meeting, or the directors.
Vice-Presidents.
70. (1) Subject as hereinbefore provided, any one of the Vice-Presidents,
in the absence or disability of the President, may perform the duties and
exercise the powers of the President, and each Vice-President shall perform such
other duties as may be prescribed by these Articles, the company in general
meeting, or the directors.
(2) Any one of the Vice-Presidents may be designated by the
directors as the Executive Vice-President, and as such
<PAGE>
-16-
[illegible] senior ranking Vice-President, and in addition to performing the
duties prescribed by these Articles, shall perform such other duties and
exercise such powers as the directors may from time to time and for such
time entrust to and confer upon him subject to such terms, conditions and
restrictions as the directors may impose.
Treasurer.
71. The Treasurer shall perform such duties as may be prescribed by these
Articles, the company in general meeting, or the directors, and if and when
directed so to do by the company or the directors, shall keep full and accurate
accounts of the receipts and disbursements of the company in books belonging to
the company and shall render to the directors at regular meetings of the
directors, or whenever they may require it, a statement of the financial
condition of the company.
Assistant Treasurers.
72. Any one of the Assistant Treasurers, in the absence or disability of
the Treasurer, may perform the duties and exercise the powers of the Treasurer,
and each Assistant Treasurer shall perform such other duties as may be
prescribed by these Articles, the company in general meeting, or the directors.
Secretary.
73. The Secretary shall attend and keep the minutes of the meetings of the
members and of the directors. He shall also summon meetings and keep such other
books and records of the company and the directors as may be required by the
company in general meeting, or the directors, and perform such other duties as
may be prescribed by these Articles, the company in general meeting, or the
directors.
Assistant Secretaries.
74. Any one of the Assistant Secretaries, in the absence or disability of
the Secretary, may perform the duties and exercise the powers of the Secretary,
and each Assistant Secretary shall perform such other duties as may be
prescribed by these Articles, the company in general meeting, or the directors.
<PAGE>
-17-
The Seal.
75. The directors shall provide for the safe custody of the seal, and the
seal shall never be used except by the authority of a resolution of the
directors or a general meeting.
76. The company may exercise the powers conferred by the Companies Seals
Act of the Colony.
Authentication of Deeds and Documents.
77. All deeds executed on behalf of the company may be in such form and
contain such powers, provisos, conditions, covenants, clauses, and agreements as
the directors, or the company in general meeting, shall think fit, and, in
addition to being sealed with the seal of the company, shall be signed by the
President or a Vice-President or such other person as the directors or the
company in general meeting shall from time to time appoint, and countersigned by
the Secretary or an Assistant Secretary or such other person as the directors or
the company in general meeting shall from time to time appoint.
Dividends.
78. The profits of the company shall be divisible among the members
holding shares in proportion to the capital paid up on such shares held by them
respectively.
79. The company in general meeting may declare a dividend to be paid to
the members according to their rights and interests in the profits, and may fix
the time for payment.
80. No dividend shall be payable except out of the profits of the company.
81. The directors may from time to time pay to the members such interim
dividends as in their judgment the position of the company justifies.
82. The directors may deduct from the dividends payable to any member all
such sums of money as may be due from him to the company.
<PAGE>
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83. Any one of several persons who are registered as the joint holders of
any share may give effectual receipts for all dividends and payments on account
of dividends in respect of such share.
84. Unless otherwise directed any dividend may be paid by cheque or
warrant sent through the post to the registered address of the member entitled,
or, in the case of joint holders, to the registered address of that one whose
name stands first on the register in respect of the joint holding; and every
cheque or warrant so sent shall be made payable to the order of the person to
whom it is sent.
85. Notice of any dividend that may have been declared whether interim or
otherwise, shall be given to each member either by advertisement or by notice in
manner hereinafter mentioned.
86. No dividend shall bear interest as against the company.
87. Any general meeting declaring a dividend may direct payment of such
dividend wholly or in part by the distribution of specific assets, and in
particular of paid-up shares, debentures, or debenture stock of the company or
paid-up shares, debentures or debenture stock of any other company, or in any
one or more of such ways, and the directors shall give effect to such
resolutions; and, where any difficulty arises in regard to the distribution,
they may settle the same as they think expedient.
Reserves.
88. The directors may, before recommending any dividend, but with the
concurring vote of at least two of the 'A' directors, or their alternates, and
at least two of the 'B' directors, or their alternates, set aside out of the
profits of the company such sums as they think proper as a reserve or reserves,
which shall, at the discretion of the directors, be applicable for any purpose
to which the profits of the
<PAGE>
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company may be properly applied, and pending such application may, at the like
discretion, either be employed in the business of the company or be invested in
such investments (other then shares of the company) as the directors may from
time to time think fit.
Capitalization of Profits and Reserves.
89. The company by extraordinary resolution in general meeting may, upon
the recommendation of the directors, resolve that it is desirable to capitalise
the whole or any part of the amount for the time being standing to the credit of
any of the company's reserve accounts, or to the credit of the profit and loss
account, or otherwise available for distribution, and accordingly that such sum
be set free for distribution amongst the members who would have been entitled
thereto if distributed by way of dividend and in the same proportions on
condition that the same be not paid in cash but be applied either in or towards
paying up any amounts for the time being unpaid on any shares held by such
members respectively, or paying up in full unissued shares or debentures of the
company to be allotted and distributed, credited as fully paid up, to and
amongst such members in the proportion aforesaid, or partly in the one way and
partly in the other, and the directors shall give effect to such a resolution.
90. Whenever such a resolution as aforesaid shall have been passed, the
directors shall make all appropriations and applications of the undivided
profits resolved to be capitalised thereby, and all allotments and issues of
fully paid shares, debentures, or securities, if any, and generally shall do all
acts and things required to give effect thereto, with full power to the
directors to make such provision by the issue of fractional certificates or by
payment in cash or otherwise as they think fit for the case of shares,
debentures, or securities becoming distributable in fractions, and also to
authorise any person to enter on behalf of all
<PAGE>
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members entitled thereto into an agreement with the company providing for the
allotment to them respectively, credited as fully paid up, of any further
shares, debentures, or securities to which they may be entitled upon such
capitalisation, or (as the case may require) for the payment up by the company
on their behalf, by the application thereto of their respective proportions of
the profits resolved to be capitalised, of the amounts or any part of the
amounts remaining unpaid on their existing shares, and any agreement made under
such authority shall be effective and binding on all such members.
Accounts.
91. The directors shall cause true accounts to be kept of the
stock-in-trade of the company, of the sums of money received and expended by the
company, and the matters in respect of which such receipt and expenditure take
place; and of the assets, credits and liabilities of the company.
92. The books of account shall be kept at one of the offices of the
company.
93. Once at the least in every year the directors shall lay before the
company in general meeting a statement of the income and expenditure for the
past year, made up to a date not more than six months before such meeting.
94. A balance sheet shall be made out in every year, and laid before the
company in general meeting, and such balance sheet shall contain a summary of
the property and liabilities of the company.
95. The directors shall make all necessary arrangements for an annual
audit of the books and accounts of the company. Any auditor appointed need not
be a member of the company.
Notices.
96. A notice may be served by the company upon any member or director
either personally or by sending it through the post in a prepaid envelope or
wrapper addressed to such member or
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director at his last known address. If the last known address of any such member
or director is outside of the Colony the notice shall be sent by prepaid
registered airmail.
97. The signature to any such notice to be given by the company may be
written, typewritten, or printed.
98. Any notice, if served by post, shall be deemed to have been served on
the seventh day after the day on which the envelope or wrapper containing the
same was posted; and in proving such service it shall be sufficient to prove
that the envelope or wrapper containing the notice was properly addressed,
stamped and posted, and in the case of service outside of the Colony, that it
was sent by prepaid registered airmail.
99. Notice of meetings of members shall be given by the Secretary at least
fourteen days before the date of such meeting.
100. Notice of special meetings shall state the objects for which the
meeting is called.
101. Any member or director may waive the right to receive notices by an
instrument in writing signed by him before, at or after any meeting.
Indemnity.
104. Every director, manager, auditor, president, vice-president,
secretary, treasurer, and other officer or servant of the company shall be
indemnified by the company against, and it shall be the duty of the directors
out of the funds of the company to pay all costs, losses, and expenses which any
such officer or servant may incur or become liable to by reason of any contract
entered into, or act or thing done by him as such director, manager, auditor,
president, vice-president, secretary, treasurer, officer or servant as
aforesaid, or in any way in the discharge of his duties, including travelling
expenses.
<PAGE>
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IN WITNESS WHEREOF We the Subscribers to the Memorandum of Association
have hereunto subscribed our names this Twenty-eighth day of June, A.D., 1965.
(Sgd.) Lionel Levine
(Sgd.) B. M. Gamblin
(Sgd.) W. S. Pearce
(Sgd.) Irma F. Albury
(Sgd.) D. E. Duncombe
Signed by the Subscribers to the Memorandum of Association in the presence of:-
(Sgd.) F. E. Weech
BAHAMA ISLANDS,
Registrar General's Office.
I certify the foregoing to be a true copy of the
original deposited in this office.
/s/ [Illegible]
---------------------------------------
22/1/68 Asst Registrar General
<PAGE>
Exhibit 3.7
THE COMPANIES ACT 1992
----------------------
COMPANY LIMITED BY SHARES
MEMORANDUM OF ASSOCIATION
OF
PARADISE ACQUISITIONS LIMITED
1. The name of the Company is PARADISE ACQUISITIONS LIMITED.
2. The Registered Office of the Company will be situate in the Island of New
Providence one of the Islands in The Commonwealth of The Bahamas.
3. The object or purpose for which the Company is established is to engage in
any act or activity that is not prohibited under any law for the time being
in force in The Commonwealth of The Bahamas.
4. The liability of the members is limited.
5. The capital of the Company is Five thousand Dollars (US$5,000.00) in the
currency of the United States of America divided into Five thousand (5,000)
shares of One Dollar (US$1.00) each, with power to increase the capital and
to divide the shares in the capital for the time being, whether original or
increased, into several classes, and to attach thereto respectively any
preferential, deferred, qualified, or special rights, privileges or
conditions, whether as to voting or otherwise.
6. The Company shall be a Private Company and accordingly no shares nor any
class of shares shall be offered to the public for subscription.
7. The number of shareholders being signatories to this Memorandum and
subscribing for shares hereunder shall be Two (2) who hereby subscribe for
One (1) share each, each share having a par value of US$1.00, for an
aggregate value of US$2.00.
<PAGE>
Exhibit 3.8
THE COMPANIES ACT 1992
-----------------------------
COMPANY LIMITED BY SHARES
-----------------------------
ARTICLES OF ASSOCIATION
OF
PARADISE ACQUISITIONS LIMITED
-----------------------------
INTERPRETATION
1. In these presents unless there be something in the subject or
context inconsistent therewith:
"The Act" means The Companies Act 1992 and any statutory
modifications thereof.
"The Company" means the above-named Company.
"The Directors" means the Directors for the time being of the
Company.
"The Auditors" means the persons for the time being performing
the duties of auditors.
"The Office" means the registered office for the time being of
the Company.
"The Register" means the Register of Members to be kept as
required by Section 56 of The Companies Act.
"Month" means calendar month.
"Dividend" includes bonus if so determined by the Directors.
"The Seal" means the common seal of the Company.
"The Secretary" includes an Assistant Secretary and any person
appointed to perform the duties of Secretary of
the Company.
"In Writing"/ include printing, lithography, and other modes of
"Written" representing or reproducing words in visible form.
"Paid up" means paid up and/or credited as paid up.
Words importing the singular number only include the plural number and
vice versa.
Words importing the masculine gender only include the feminine gender.
Words importing persons include corporations.
<PAGE>
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2. In addition to the registered office of the Company in the
Commonwealth of The Bahamas, which shall be at such place as the Directors shall
from time to time appoint, the Company may have an office for the transaction of
business at any other place, and meetings of the Company or of the Directors may
be held either within or without the Commonwealth, and if without the
Commonwealth at such place as the Directors may determine.
SHARES
3. Unless the Directors shall determine otherwise, all the shares in
the Company shall be numbered in regular series; and every forfeited or
surrendered share shall continue to bear the number by which the same was
originally distinguished.
4. Subject to the provisions of Section 44 of the Act, the Company may
purchase or acquire shares issued by it.
5. Subject to any directions at any time and from time to time given
by the Company in general meeting the shares shall be under the control of the
Directors, who may allot or otherwise dispose of the same to such persons, on
such terms and conditions, and at such times as the Directors think fit.
6. The joint holders of a share shall be severally as well as jointly
liable for payment of all instalments and calls due in respect of such share.
7. Save as herein otherwise provided, the Company shall be entitled to
treat the registered holder of any share as the absolute owner thereof, and
accordingly shall not, except as ordered by a court of competent jurisdiction,
or as by the Act required, be bound to recognize any equitable or other claim
to, or interest in, such share on the part of any other person.
CERTIFICATES
8. The certificates of title to shares shall be issued under the seal
of the Company, and shall be signed by one of the Directors and countersigned by
the Secretary.
9. Every member shall be entitled to one certificate for all the
shares registered in his name, or to several certificates, each for one or more
of such shares. Every certificate of shares shall specify the number and
denoting numbers of the shares in respect of which it is issued, and the amount
paid up thereon and shall be numbered in regular series.
10. If any certificate be worn out or defaced, then upon production
thereof to the Directors, they may order the same to be cancelled, and may issue
a new certificate in lieu thereof, and if any certificate be lost or destroyed,
then, upon proof thereof to the satisfaction of the Directors and on such
indemnity as the Directors deem adequate being given, a new certificate in lieu
thereof shall be given to the party entitled to such lost or destroyed
certificate.
11. For every certificate issued under the last preceding Article
there shall be paid to the Company the sum of Seventy-five cents or such smaller
sum as the Directors may from time to time determine.
12. The certificate of shares registered in the names of two or more
persons shall, unless otherwise directed by them, be delivered to the person
first named on the register.
CALLS
13. (1) The Directors may from time to time make such calls as they
think fit upon the members in respect of all moneys unpaid
on the shares held by them respectively and not by
<PAGE>
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the conditions of allotment thereof made payable at fixed
times. A call may be made payable by instalments.
(2) Each member shall pay the amount of every call so made on
him to such persons and at such times and places as the
Directors shall appoint.
(3) Notice of the persons appointed to receive payment of every
call and of the times and places appointed for payment shall
be sent to the members by the Company as hereinafter
provided.
14. A call shall be deemed to have been made at the time when the
resolution of the Directors authorising such call was passed.
15. Seven (7) days' notice at least of any call shall be given.
16. If the sum payable in respect of any call or instalment be not
paid on or before the day appointed for payment thereof, the holder for the time
being of the share in respect of which the call shall have been made, or the
instalment shall be due, shall pay interest for the same at such rate, not
exceeding ten per centum per annum, as the Directors shall determine, from the
day appointed for the payment thereof to the time of actual payment, but the
Directors may if they shall think fit, remit payment of such interest or any
part thereof
17. On the trial or hearing of any action for the recovery of any
money due for any call, it shall be sufficient to prove that the name of the
member sued is entered in the register as the holder, or one of the holders, of
the shares in respect of which such debt accrued; that the resolution making the
call is duly recorded in the minute book; and that notice of such call was duly
given to the member sued, in pursuance of these presents; and it shall not be
necessary to prove the appointment of the Directors who made such call, nor any
other matters whatsoever, but the proof of the matters aforesaid shall be
conclusive evidence of the debt.
18. The Directors may, if they think fit, receive from any member
willing to advance the same, all or any part of the capital due upon the shares
held by him beyond the sums actually called for, and upon the amount so paid in
advance, or so much thereof as from time to time exceeds the amount of the calls
then made upon the shares in respect of which such advance has been made, the
Company may pay interest at such rate as the member paying the same in advance
and the Directors agree upon.
FORFEITURE AND LIEN
19. If any member fail to pay any call or instalment on or before the
day appointed for the payment of the share, the Directors may at any time
thereafter, during such time as the call or instalment remains unpaid, serve a
notice on such member requiring him to pay the same, together with any interest
that may have accrued and all expenses that have been incurred by the Company by
reason of such non-payment.
20. The notice shall name a day (not being less than Twenty-one (21)
days from the date of the notice), and a place or places, on and at which such
call or instalment and such interest and expenses as aforesaid are to be paid.
The notice shall also state that in the event of nonpayment at or
before the time and at the place appointed, the shares in respect of which such
call or instalment is payable will be liable to forfeiture.
21. (1) If the requirements of any such notice as aforesaid are not
complied with, any shares in respect of which such notice
has been given may, at any time thereafter, before payment
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of all calls or instalments, interest and expenses due in
respect thereof, be forfeited by a resolution of the
Directors to that effect. Such forfeiture shall include all
dividends declared in respect of the forfeited shares and
not actually paid before the forfeiture.
(2) A certificate in writing under the hand of one Director and
countersigned by the Secretary stating that a share has been
forfeited, shall be conclusive evidence of such forfeiture,
and an entry of every such certificate shall be made in the
minutes of the proceedings of the Directors.
22. When any share shall have been so forfeited, notice of the
resolution shall be given to the member in whose name it stood immediately prior
to the forfeiture, and an entry of the forfeiture, with the date thereof, shall
forthwith be made in the register.
23. (1) Any shares so forfeited shall be deemed to be the property
of the Company, and the Directors may sell, re-allot and
otherwise dispose of the same in such manner as they think
fit.
(2) The Directors may, at any time before any share so forfeited
shall have been sold, re-allotted or otherwise disposed of,
annul the forfeiture thereof upon such conditions as they
think fit.
24. Any member whose shares have been forfeited shall,
notwithstanding, be liable to pay, and shall forthwith pay to the Company, all
calls, instalments interest and expenses, owing upon or in respect of such
shares at the time of forfeiture, together with interest thereon from the time
of forfeiture until payment at ten per centum per annum, and the Directors may
enforce the payment thereof if they shall think fit.
25. The Company shall have a first and paramount lien upon all the
shares registered in the name of each member (whether solely or jointly with
others) and upon the proceeds of sale thereof, for his debts, liabilities and
engagements, solely or jointly with any other person, to or with the Company,
whether the period for the payment, fulfilment or discharge thereof shall have
actually arrived or not, and no equitable interest shall be created in any share
except upon the footing and condition that Article 8 hereof is to have full
effect. And such lien shall extend to all dividends from time to time declared
in respect of such shares. Unless otherwise agreed, the registration of a
transfer of shares shall operate as a waiver of the Company's lien, if any, on
such shares.
26. For the purpose of enforcing such lien, the Directors may sell the
shares subject thereto in such manner as they think fit; but no sale shall be
made until such period as aforesaid shall have arrived, and until notice in
writing of the intention to sell shall have been served on such member, his
executors or administrators, and default shall have been made by him or them in
the payment, fulfilment, or discharge of such debts, liabilities or engagements
for Seven (7) days after such notice.
27. The net proceeds of any such sale shall be applied in or towards
satisfaction of the said debts, liabilities or engagements and the residue (if
any) paid to such member, his executors, administrators or assigns.
28. Upon any sale after forfeiture or for enforcing a lien in
purported exercise of the powers hereinbefore given, the Directors may appoint
some person to execute an instrument of transfer of the shares sold and cause
the purchaser's name to be entered in the register in respect of the shares
sold, and the purchaser shall not be bound to see to the regularity of the
proceedings, or to the application of the purchase money,
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and after his name has been entered in the register in respect of such shares,
the validity of the sale shall not be impeached by any person, and the remedy of
any person aggrieved by the sale shall be in damages only and against the
Company exclusively.
TRANSFER OF SHARES
29. Any member may transfer all or any of his shares by instrument in
writing in any usual or common form or any other form which the Directors may
approve.
30. The instrument of transfer of any share in the Company shall be in
writing and shall be executed both by the transferor and the transferee, and the
transferor shall be deemed to remain a holder of such share until the name of
the transferee is entered in the register in respect thereof.
31. The Company shall be entitled to charge a fee not exceeding 50
cents on the registration of a transfer or of any probate, letters of
administration, certificate of death or marriage, power of attorney, notice in
lieu of distringas, or other instrument affecting the title to any share.
32. The Directors may decline to register a transfer of any share to
any person of whom they do not approve. They may also decline to register any
transfer of shares without assigning any reason therefor.
33. If the Directors refuse to register a transfer they shall within
two months after the date on which the transfer was lodged with the Company send
to the transferee notice of the refusal.
34. Every instrument of transfer shall be left at the office for
registration, accompanied by the certificate of the shares to be transferred,
and such other evidence as the Directors may require to prove the title of the
transferor or his right to transfer the shares.
TRANSMISSION OF SHARES
35. In case of the death of a member the survivor or survivors where
the deceased was a joint holder, and the legal personal representatives of the
deceased where he was a sole holder, shall be the only persons recognized by the
Company as having any title to his interest in the shares; but nothing herein
contained shall release the estate of a deceased joint holder from any liability
in respect of any share which had been jointly held by him with other persons.
36. Any person becoming entitled to a share in consequence of the
death of any member, or in any other way than by transfer, may with the consent
of the Directors, and upon the production of such evidence as may from time to
time be required by the Directors, be registered as a member, or, subject to the
provisions as to transfers hereinbefore contained, may transfer such share to
some other person by executing to the latter an instrument of transfer.
37. The Directors may, if they think fit, withhold the payment of any
dividend, payable in respect of any share to which any person may be entitled by
transmission until such time as such person shall become the registered owner,
or shall have effectually transferred such share, after which time such person,
so becoming registered or transferring, shall receive such dividend.
INCREASE OF CAPITAL
38. The Company may, from time to time by resolution of the members,
increase the capital of the Company by the creation of new shares of such amount
as may be deemed expedient.
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39. The new shares shall be issued upon such terms and conditions, and
with such rights, priorities and privileges annexed thereto, as the general
meeting resolving upon the creation thereof, shall direct, and if no direction
be given, as the Directors shall determine; and in particular such shares may be
issued with a preferential or qualified right to dividends, and in the
distribution of assets of the Company, and with a special or without any right
of voting.
40. If any difficulty shall arise in the apportionment of such new
shares, or any of them, amongst the members, such difficulty shall, in the
absence of direction by the Company be determined by the Directors.
41. Except so far as otherwise provided by the conditions of issue, or
by these Articles, any capital raised by the creation of new shares shall be
considered part of the original capital, and shall be subject to the provisions
herein contained with reference to the payment of calls and instalments,
transfer and transmission, forfeiture, lien and otherwise.
42. The Company may, from time to time, by resolution of the members,
consolidate and divide all or any of its share capital into shares of larger
amount than its existing shares.
ALTERATION AND REDUCTION OF CAPITAL
43. The Company may pass all resolutions for the alteration or
reduction of its Share Capital as are set forth in Sections 49 and 50 of the
Act.
MODIFICATION OF RIGHTS
44. Whenever the capital, by reason of the issue of Preference shares
or otherwise, is divided into different classes of shares, all or any of the
rights and privileges attached to each class may be modified, commuted,
affected, abrogated or dealt with either with the consent in writing of the
holders of a majority in nominal value of the issued shares of the class, or the
sanction of a resolution of the members passed at a separate general meeting of
the holders of shares of that class. All the provisions hereinafter contained as
to general meetings shall, mutatis mutandis, apply to every such meeting but so
that the Quorum thereof shall be members holding, or representing by proxy
one-tenth in nominal amount of the issued shares of the class, (provided that if
at any adjourned meeting of such holders a quorum as above defined is not
present those members who are present in person or by proxy shall be a quorum)
and that the holders of shares of the class shall, on a poll, have one vote for
every share of the class held by them respectively. This Article is not to
derogate from any power the Company would have had if this Article were omitted.
MEETINGS
45. The statutory meeting of the Company shall be held within the
period required by Section 70 of the Act.
46. General meetings shall be held once at least in each and every
calendar year at such time and place as may be prescribed by the Directors. Such
general meetings may be held anywhere in the world. At these meetings the
Directors shall be elected for the ensuing year and the general business of the
Company transacted.
47. General meetings held annually in accordance with the preceding
Article shall be called ordinary meetings; all other meetings of the Company
shall be called extraordinary general meetings.
48. In addition to the provisions of Section 71 of the Act two
Directors or the President (if and when elected or appointed) may, whenever they
or he thinks fit convene an extraordinary general meeting; and the Directors
may, whenever they think fit,
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and they shall on the requisition of one Director, or upon a requisition made in
writing by members owning not less than one-tenth in nominal value of the issued
shares of the Company, convene an extraordinary general meeting.
49. Any such requisition shall express the object of the meeting
required, and shall be signed by the director or members making the same, and
shall be sent by post or delivered to the Secretary of the Company, or sent by
post to or delivered at the Office.
50. Upon the receipt of such requisition the Directors shall forthwith
proceed to convene an extraordinary general meeting. If they do not proceed to
convene the same within Seven (7) days from the date of the receipt of the
requisition the requisitionist or requisitionists, or any member or members,
being the owners of not less than one-tenth in nominal value of the issued
shares of the Company, may themselves convene a meeting in The Bahamas
aforesaid, or at such other place as they may determine.
51. Seven (7) clear days' notice at the least of any meeting
specifying the place, the day and the hour of the meeting and, in case of
special business, the general nature of such business, shall be given to the
members in manner hereinafter mentioned, or in such other manner, if any, as may
be prescribed by the Company in general meeting; but the accidental omission to
give notice of any meeting to, or the non-receipt of any such notice by any
person entitled thereto shall not invalidate the proceedings at that meeting.
52. All business shall be deemed to be special that is transacted at
an extraordinary general meeting. All business that is transacted at an ordinary
meeting shall also be deemed special, with the exception of sanctioning a
dividend, the consideration of the accounts, balance sheets and the ordinary
report of the auditors and the election of Directors and Officers.
53. Subject to the provisions of the Act, when a majority of the
shareholders in person or by proxy representing at least one-half of the issued
capital of the Company sign the minutes of any ordinary or extraordinary general
meeting the same shall be deemed to have been duly held notwithstanding that the
members have not actually come together or that there may have been technical
defects in the proceedings. And a resolution in writing signed by members
holding the requisite majority in nominal value of the issued shares of the
Company shall be as valid and effectual as if it had been passed at a meeting of
the shareholders duly called and constituted.
54. The minutes of any ordinary or extraordinary general meeting if
purporting to be signed by the Chairman thereof, or by the Chairman of the next
succeeding meeting, shall be sufficient evidence without any further proof of
the facts therein stated.
PROCEEDINGS AT GENERAL MEETINGS
55. No business shall be transacted at any general meeting unless a
quorum is present when the meeting proceeds to business, except to take measures
to obtain a quorum.
56. A quorum shall consist of Two (2) members present in person or by
proxy for all purposes.
57. The President or Vice-President if they have been elected or
appointed shall preside as Chairman at every general meeting of the Company. In
the event that no President or Vice-President has been elected or appointed or
in their absence the Directors present shall choose some Director present to be
Chairman, or if no Director be present, or if all the Directors present decline
to take the chair the members present shall choose some one of their number to
be Chairman.
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58. If within Thirty (30) minutes from the time appointed for the
meeting a quorum is not present, the meeting shall stand adjourned to the same
day Two (2) weeks thereafter and at the same time and place; and if at such
adjourned meeting a quorum is not present within Thirty (30) minutes of the
appointed time, those members who are present shall be a quorum and may transact
the business for which the meeting was called but so that not less than Two (2)
individuals shall constitute the quorum.
59. The Chairman may, with the consent of the meeting, adjourn any
meeting from time to time and from place to place, but no business shall be
transacted at any adjourned meeting other than the business left unfinished at
the meeting from which the adjournment took place.
60. Every question submitted to a meeting shall be decided by a show
of hands unless a poll is demanded (before or on the declaration of the result
of the show of hands) and in the case of an equality of votes the Chairman shall
have a casting vote in addition to the vote or votes to which he may be entitled
as a member.
61. At any general meeting unless a poll is demanded by the Chairman
or by at least Three (3) members present in person or by proxy, or by any member
or members present in person or by proxy and representing not less than
one-tenth of the total voting rights of all members having the right to vote at
the meeting a declaration by the Chairman that a resolution has been carried and
an entry to that effect in the book of proceedings of the Company shall be
sufficient evidence of the fact without proof of the number or proportion of the
votes recorded in favour of or against such resolution.
62. If a poll is demanded as aforesaid, it shall be taken in such
manner and at such time and place as the Chairman of the meeting directs, and
either at once, or after an interval or adjournment, or otherwise, and the
results of the poll shall be deemed to be the resolution of the meeting at which
the poll was demanded. The demand for a poll may be withdrawn. In case of any
dispute as to the admission or rejection of a vote, the Chairman shall determine
the same, and such determination made in good faith shall be final and
conclusive.
VOTES OF MEMBERS
63. On a show of hands every member entitled to vote present in person
or by proxy shall have one vote, and upon a poll being demanded, every member
entitled to vote present in person or by proxy shall have one vote for every
share held by him. Where two or more persons hold shares jointly, one of those
holders present at a general meeting may, in the absence of the other or others,
vote the shares; but if two or more joint holders are present in person or by
proxy, they shall vote as one on the shares held jointly by them and for this
purpose the joint holder entitled to tender a note, to the exclusion of the
notes of the other joint holders, shall be determined by the order in which the
names stand in the register of members.
64. Votes may be given either personally or by permanent or ad hoc
written proxy.
65. The instrument appointing a proxy and the power of attorney if any
under which it is signed or a notarially certified copy thereof shall be
deposited with the Secretary before or at the meeting for which it is to be
used, and if permanent may be recorded with the Secretary.
66. A vote given in accordance with the terms of an instrument of
proxy shall be valid notwithstanding the previous death or insanity of the
principal or revocation of the instrument of proxy, or of the authority under
which the instrument of proxy was executed, or transfer of the share in respect
of which the vote is given, provided no intimation in writing of the death,
insanity, revocation or transfer shall have been received at the office before
the meeting or adjourned meeting at which the instrument of proxy is used.
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67. An instrument appointing a proxy may be in any form which the
Directors think fit to approve. The proxy shall be deemed to include the right
to demand, or join in demanding a poll, and shall (except and to the extent to
which the proxy is specially directed to vote for or against any proposal)
include power generally to act at the meeting for the person giving the proxy. A
proxy shall unless the contrary is stated thereon, be valid as well for any
adjournment of the meeting as for the meeting to which it relates, and need not
be witnessed.
68. The instrument appointing a proxy shall be in writing under the
hand of the appointer or of his attorney, or, if the appointer is a corporation,
either under seal, or under the hand of an officer or attorney duly authorized.
A proxy need not be a member of the Company. Any corporation which is a member
of the Company may by resolution of its Directors or other governing body
authorize such person as it thinks fit to act as its representative at any
meeting of the Company, or of any class of members of the Company, and the
person so authorized shall be entitled to exercise the same powers on behalf of
the corporation which he represents as that corporation could exercise if it
were an individual member of the Company.
DIRECTORS
69. The first Directors may be appointed in writing by the Subscribers
to the Memorandum of Association, and such Directors shall hold office until the
statutory meeting of the Company. The Company by resolution of the members, or a
member or members holding a majority in nominal value of the issued shares for
the time being conferring the rights to attend and vote at general meetings of
the Company, shall have power, from time to time and at any time to appoint any
person or persons as a Director or Directors (provided that the total number of
Directors shall not exceed the maximum number prescribed by, or in accordance
with these Articles) and to remove from office any Director, howsoever
appointed. A Director or Directors so appointed (except the first Directors)
shall hold office for a year (unless removed as aforesaid) or until his or their
successors are duly elected or until the office is duly vacated as provided by
Article 73. Any appointment or removal by a member or members as aforesaid,
shall be effected by an instrument in writing signed by the member or members
making the same, or in the case of a member being a Company, signed by one of
its Directors on its behalf, and shall take effect upon lodgement at the Office.
70. Unless and until the Company in general meeting shall otherwise
determine, the Directors shall be not less than Two (2) nor more than Nine (9)
in number, and they need not be shareholders of the Company.
71. The remuneration of the Directors shall be determined by the
Company in general meeting.
72. The office of director shall be ipso facto vacated if the
Director:-
(1) Becomes bankrupt, or makes any arrangement or composition with
his creditors generally; or
(2) Resigns his office by notice in writing under his hand sent to or
left at the office; or
(3) Becomes lunatic or of unsound mind; or
(4) Is absent from meetings of the Directors for Six (6) successive
months without leave and his alternate Director (if any) shall
not, during such period, have attended in his stead, and the
Directors resolve that his office be vacated; or
(5) Is requested in writing by members holding or representing more
than one-half in value of the issued shares of the Company to
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vacate his office; or
(6) Is or otherwise becomes disqualified or removed pursuant to
Sections 87, 88, 90 or 92 of the Act.
However, the continuing Directors may act notwithstanding any vacancy
in their body, but, and if so long as their number is reduced below the number
fixed by or pursuant to these Articles as the necessary quorum of Directors, the
continuing Director or Directors may act for the purpose of increasing the
number of Directors to that number, or of summoning a general meeting of the
Company, but for no other purpose.
73. Any casual vacancy occurring in the Board of Directors may at any
time be filled by the Directors; but any person so chosen shall retain office so
long only as the vacating Director would have retained the same if no vacancy
had occurred.
74. No Director shall be disqualified by his office from contracting
with the Company either as vendor, purchaser, or otherwise, nor shall any such
contract, or any contract or arrangement entered into by or on behalf of the
Company in which any Director shall be in any way interested, be avoided, nor
shall any Director so contracting or being so interested be liable to account to
the Company for any profit realized by any such contract or arrangement by
reason of such Director holding that office or of the fiduciary relation thereby
established. But it is declared that the nature and extent of his interest must
be disclosed by him in writing to the Company or at the meeting of the directors
at which the contract or arrangement is first considered, if his interest then
exists, or in any other case at the first meeting of the directors after the
acquisition of his interest, and after such declaration of interest he shall be
entitled to vote either as director or as shareholder in respect of any contract
or arrangement in which he is so interested as aforesaid.
75. Any Director may act by himself or his firm in a professional
capacity for the Company, and he or his firm shall be entitled to remuneration
for professional services as if he were not a director.
76. A Director of this Company may be or become a Director of any
Company promoted by this Company or in which it may be interested as a vendor,
shareholder or otherwise, and no such Director shall be accountable for any
benefits received as a Director or member of such Company.
MANAGING DIRECTOR
77. The Directors may from time to time appoint one or more of their
number to the office of Managing Director or Committee of Directors for such
term as they think fit, and, subject to the terms of any agreement entered into
in any particular case, may revoke such appointment, and a Director so appointed
shall, subject to the provisions of any agreement between him and the Company,
be subject to the same provisions as to resignation and removal as the other
Directors of the Company, and if he ceases from any cause to be a Director he
shall ipso facto and immediately cease to be a Managing Director.
78. A Managing Director shall receive such remuneration (whether by
way of salary, commission or participation in profits, or partly in one way and
partly in another) as the Directors may determine, and either in addition to or
in lieu of his remuneration as a Director.
79. Subject to the limitations imposed by Section 103 of the Act, the
Directors may entrust to and confer upon a Managing Director or Committee of
Directors any of the powers exercisable by them upon such terms and conditions
and with such restrictions, as they think fit, and either collaterally with or
to the exclusion of their own powers, and may from time to time revoke,
withdraw, alter or vary all or any of such powers.
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PROCEEDINGS OF DIRECTORS
80. The Directors may meet together for the dispatch of business,
adjourn, and otherwise regulate their meetings and proceedings, as they think
fit, and may determine the quorum necessary for the transaction of business.
Until otherwise determined, Two (2) Directors shall be a quorum.
81. The President or Vice-President (if elected or appointed) or any
Director may at any time convene a meeting of the Directors.
82. A meeting of the Directors for the time being at which a quorum is
present shall be competent to exercise all or any of the authorities, powers and
discretions by or under the regulations of the Company for the time being vested
in or exercisable by the Directors generally.
83. The President or Vice-President (if elected or appointed) shall
preside at all meetings of the Directors. In the absence of the President and
Vice-President the Director shall choose some one of their number to be chairman
of the meeting.
84. Subject to the limitations imposed by Section 103 of the Act, the
Directors may delegate any of their powers to committees consisting of such
member or members of their body as they think fit, and they may, from time to
time, revoke such delegation or revoke the appointment of and discharge any such
committees either wholly or in part and either as to persons or purposes; but
every committee so formed, shall in the exercise of the powers so delegated,
conform to any regulations that may from time to time be imposed on it by the
Directors.
85. All acts done by any meeting of the Directors or of a Committee of
Directors, or by any person acting as a Director, shall, notwithstanding that it
shall afterwards be discovered that there was some defect in the appointment or
continuance in office of any such Director or Committee of Directors or person
acting as aforesaid, or that they or any of them were or was disqualified or had
vacated office, or were not entitled to vote, or had not received notice of the
meeting, be as valid as if every such person had been duly appointed or had duly
continued in office and was qualified and had continued to be a Director and had
been entitled to be a Director and had received such notice.
86. It shall not be necessary for the Directors to hold any formal
meetings and participation in meetings of Directors shall be permitted in
accordance with the provisions of Section 101 of the Act.
87. Any minutes of the meetings of Directors if purporting to be
signed by the Chairman thereof, or by the Chairman of the next succeeding
meeting, shall be sufficient evidence without any proof of the facts therein
stated.
88. When all the Directors (including alternate Directors) sign the
minutes of a meeting of the Directors the same shall be deemed to have been duly
held notwithstanding that the Directors (including alternate Directors) have not
actually come together or that any of the Directors (or alternate Directors)
were not given notice of the meeting or that there may have been technical
defects in the proceedings. And a resolution in writing, signed by all the
Directors for the time being entitled to receive notice of a meeting including
any alternate Director if entitled shall be as valid and effectual as if it had
been passed at a meeting of the Directors duly called and constituted, and may
consist of several documents in a like form each signed by one or more of the
Directors.
89. Questions arising at any meeting of or for the decision of the
Directors shall be decided by a majority of votes, and in case of an equality of
votes, the Chairman shall have a second or casting vote. Provided, however, that
so long as the
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quorum of Directors is only Two (2) Directors then at any meeting at which there
are only Two (2) Directors present, the Chairman may not have a second or
casting vote.
90. If any Director, being willing, shall be called upon to perform
extra services, or to make any special exertions, in going or residing abroad or
otherwise, for any of the purposes of the Company, the Company shall remunerate
the Director so doing, either by a fixed sum or by a percentage of profits, or
otherwise as may be determined by the Directors, and such remuneration may be
either in addition to or in substitution for his or their share in the
remuneration above provided.
91. A Director who is at any time absent from The Commonwealth of The
Bahamas shall not during such absence be entitled to notice of any meeting of
the Directors, but the views of a Director not present at a meeting of the
Directors and transmitted by letter, telefax or cable shall be given effect to
at any meeting of the Directors as if such Director had been personally present
at such meeting and voted in accordance with such views.
POWERS OF DIRECTORS
92. The business of the Company shall be managed by the Directors, who
may pay all expenses incurred in promoting and registering the Company, and may
exercise all such powers of the Company as are not by the Act or by these
Articles required to be exercised by the Company in general meeting, subject
nevertheless to any regulations of these Articles, to the provisions of the Act,
and to such regulations, being not inconsistent with the aforesaid regulations
or provisions, as may be prescribed by the Company in general meeting but no
regulation made by the Company in general meeting shall invalidate any prior act
of the Directors which would have been valid if that regulation had not been
made.
93. Without prejudice to general powers conferred by the last
preceding clause, and the other powers conferred by these presents, it is hereby
expressly declared that the Directors shall have the following powers, that is
to say power:
(1) To pay the costs, charges and expenses preliminary and incidental
to the promotion, formation, establishment and registration of
the Company.
(2) To purchase or otherwise acquire for the Company any property,
rights or privileges, which the company is authorized to acquire,
at such price and generally on such terms and conditions as they
think fit.
(3) At their discretion to pay for any property, rights or privileges
acquired by, or services rendered to, the Company, either wholly
or partially in cash or in shares, bonds, debentures, or other
securities of the Company, and any such shares may be issued
either as fully paid up or with such amount credited as paid up
thereon as may be agreed upon; and any such bonds, debentures, or
other securities may be either specifically charged upon all or
any part of the property of the Company and its uncalled capital,
or not so charged.
(4) To appoint, and at their discretion remove or suspend, such
managers, secretaries, officers, clerks, agents, and servants for
permanent, temporary, or special services, as they may from time
to time think fit, and determine their powers and duties, and fix
their salaries or emoluments, and to require security in such
instances and to such amount as they think fit.
(5) From time to time to provide for the management of affairs of
<PAGE>
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the Company abroad in such manner as they think fit, and in
particular to appoint any persons to be the Attorneys or agents
of the Company with such powers (including power to subdelegate)
and upon such terms as may be thought fit.
(6) To appoint any person or persons (whether incorporated or not) to
accept and hold in trust for the Company any property belonging
to the Company, or in which it is interested, or for any other
purposes, and to execute and do all such deeds and things as may
be requisite in relation to any such trust, and to provide for
the remuneration of such trustee or trustees.
(7) To refer any claims or demands by or against the Company to
arbitration, and observe and perform the awards.
(8) To enter into all such negotiations and contracts, and rescind
and do all such acts, deeds, and things in the name and on behalf
of the Company as they may consider expedient for or in relation
to any of the matters aforesaid, or otherwise for the purposes of
the Company.
(9) To make and give receipts, releases and other discharges for
money payable to the Company, and for the claims and demands of
the Company.
(10) To invest and deal with any of the moneys of the Company not
immediately required for the purposes thereof, upon such
securities (not being shares in the Company) and in such manner
as they may think fit, and from time to time to vary or realize
such investment.
BORROWING POWERS
94. The Directors, or, if authorized by resolution of the directors, a
director, a committee of directors or an officer of the Company, may raise or
borrow or secure the payment of any sum or sums of money for the purposes of the
Company.
95. The Directors may raise or secure the payment or re-payment of
such moneys in such manner and upon such terms and conditions in all respects as
they think fit, and in particular by the issue of bonds, debentures or debenture
stock, notes or any mortgage, charge, security or other obligations of the
Company, charged upon all or any part of the undertaking and property of the
Company (both present and future), including its uncalled capital for the time
being.
96. Debentures and other securities may be made assignable free from
any equities between the Company and the person to whom the same may be issued.
97. Any debentures, bonds or other securities may be issued at a
discount, premium, or otherwise, and with any special privileges as to
redemption, surrender, drawings, allotment of shares, attending and voting at
general meetings of the Company, appointment of Directors and otherwise.
98. When any uncalled capital of the Company is charged, all persons
taking any subsequent charge thereon shall take the same subject to such prior
charge, and shall not be entitled by notice to the members or otherwise to
obtain priority over such prior charge.
ALTERNATE DIRECTORS
99. A Director may appoint any person approved by the other Directors
to be an alternate Director and may at any time remove any alternate Director so
<PAGE>
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appointed. An alternate Director shall (subject to his giving to the Company an
address within The Commonwealth at which notices may be served on him) be
entitled to notice of meetings of the Directors, and in the absence of the
Director who appointed him, and provided the views of such Director shall not
have been transmitted pursuant to Article 91, the alternate Director shall be
entitled to attend and vote at any such meeting, and generally at such meeting
to have and exercise all the powers, rights and duties of the Director
appointing him. Every such alternate Director shall also be entitled in the
absence from The Commonwealth of the Director appointing him to sign on his
behalf a resolution in writing of the Directors. An alternate Director shall
ipso facto vacate office if and when the appointer vacates office as a Director,
and any appointment or removal under this Article shall be effected at any time
by notice in writing or by telefax or cable. An alternate Director shall not be
entitled to receive remuneration from the Company except by virtue of an
agreement with the Director appointing him to share the remuneration which would
otherwise be payable to such Director.
LOCAL MANAGEMENT
100. (1) The Directors may, from time to time, provide for the
management of the affairs of the Company abroad in such
manner as they shall think fit, and the provisions contained
in the Four (4) next following paragraphs shall be without
prejudice to the general powers conferred by this paragraph.
(2) The Directors, from time to time, and at any time, may
establish any local boards or agencies for managing any of
the affairs of the Company abroad, and may appoint any
persons to be members of such local board, or any managers
or agents, and may fix their remuneration.
(3) The Directors, from time to time, and at any time, may
delegate to any person so appointed any of the powers,
authorities and discretions for the time being vested in the
Directors and may authorize the members for the time being
of any such local board, or any of them to fill any
vacancies therein, and to act notwithstanding vacancies, and
any such appointment or delegation may be made on such terms
and subject to such conditions as the Directors may think
fit, and the Directors may at any time remove any person so
appointed, and may annul or vary any such delegation.
(4) Any such delegates as aforesaid may be authorized by the
Directors to sub-delegate all or any of the powers,
authorities and discretions for the time being vested in
them.
(5) The Directors may comply with the requirements of any local
law with which in their opinion it shall in the interest of
the Company be necessary or expedient to comply.
POWERS OF ATTORNEY
101. The Directors may from time to time and at any time by power of
attorney in writing under the Seal appoint any Company, firm or person or body
of persons, whether nominated directly or indirectly by the Directors, to be the
attorney or attorneys of the Company for such purposes and with such powers,
authorities and discretions (not exceeding those vested in or exercisable by the
Directors under these Articles) and for such period and subject to such
conditions as they may think fit, and any such powers of attorney may contain
such provisions for the protection and convenience of persons dealing with any
such attorney as the Directors may think fit and may also authorize any such
attorney to delegate all or any of the powers, authorities and discretions
vested in him.
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OFFICERS
102. The Company may elect or the Directors may appoint officers
annually, and they may consist of a President, Vice-President, Secretary and
Treasurer, and such other officers as the Company or the Directors may from time
to time think necessary. If any office becomes vacant during the year the
Directors may fill the same for the unexpired term. The officers shall hold
office until their successors are elected or they resign, but any officer may be
removed at any time by the Company or the Directors.
103. The officers shall perform such duties as may be prescribed by
the Directors.
104. Any person may hold more than one of these offices and no officer
need be a Director or a shareholder of the Company.
THE SEAL
105. The Seal shall not be used without the sanction of the Directors.
106. Unless otherwise determined by a resolution of the Directors, a
Director shall sign and seal all deeds, documents and other instruments and
papers authorized by the Directors and requiring execution by the Company, and
every instrument to which the Seal shall be affixed shall be countersigned by
another Director or the Secretary or Treasurer of the Company. The Company is
hereby authorized to adopt and use an official seal for use in any place outside
The Commonwealth of the Bahamas in accordance with the provisions of Section 26
of the Act.
107. All deeds executed on behalf of the Company may be in such form,
and contain such powers, provisos, conditions, covenants, clauses, and
agreements as the Directors or the Company in general meeting, shall think fit.
DIVIDENDS
108. The Company in general meeting may on the recommendation of the
Directors declare a dividend to be paid to the members and may fix the time for
payment, but no dividend shall exceed the amount recommended by the Directors.
109. The Directors may from time to time pay to the members such
interim dividends as in their judgment the position of the Company justifies.
110. No dividend shall be payable except out of the profits of the
Company although dividends may be paid either by the issuance of fully paid
shares to the shareholders as provided by Section 60(1) of the Act or out of
surplus as provided by Section 60(2) of the Act.
111. Subject to the rights of persons, if any, entitled to shares with
special rights as to dividend, all dividends shall be declared and paid
according to the amounts paid or credited as paid on the shares in respect
whereof the dividend is paid. All dividends shall be apportioned and paid
proportionately to the amounts paid or credited as paid on the shares during any
portion or portions of the period in respect of which the dividend is paid; but
if any share is issued on terms providing that it shall rank for dividend as
from a particular date such share shall rank for dividend accordingly.
112. Any general meeting declaring a dividend or bonus may direct
payment of such dividend or bonus wholly or partly by the distribution of
specific assets and in particular of paid-up shares debentures or debenture
stock of any other Company or in any one or more of such ways, and the Directors
shall give effect to such resolution, and where any difficulty arises in regard
to such distribution, the Directors may settle the same as they think expedient,
and in particular may issue fractional certificates and fix the value for
distribution of such specific assets or any part thereof and may determine that
<PAGE>
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cash payments shall be made to any members upon the footing of the value so
fixed in order to adjust the rights of all parties, and may vest any such
specific assets in trustees as may seem expedient to the Directors.
113. The Directors may deduct from the dividends payable to any member
all such sums of money as may be due from him to the Company.
114. Notice of any dividend that may have been declared shall be given
to each member in manner hereinafter mentioned.
115. No dividend shall bear interest as against the Company.
RESERVES
116. The Directors may, before recommending any dividend, set aside
out of the profits of the Company such sums as they think proper as a reserve or
reserves, which shall, at the discretion of the Directors, be applicable for any
purpose to which the profits of the Company may be properly applied, and pending
such application may, at the like discretion, either be employed in the business
of the Company or be invested in such investments (other than shares of the
Company) as the Directors may from time to time think fit. The Directors may
also without also without placing the same to reserve carry forward any profits
which they may think prudent not to divide.
CAPITALIZATION OF PROFITS
117. The Company in general meeting may, upon the recommendation of
the Directors, resolve that it is desirable to capitalize any part of the amount
for the time being standing to the credit of any of the Company's reserve
accounts or to the credit of the profit and loss account or otherwise available
for distribution, and accordingly that such sums be set free for distribution
amongst the members who would have been entitled thereto if distributed by way
of dividend and in the same proportions on condition that the same be not paid
in cash but be applied either in or towards paying up any amounts for the time
being unpaid on any shares held by such members respectively or paying up in
full unissued shares or debentures of the Company to be allotted and distributed
credited as fully paid up to and amongst such members in the proportion
aforesaid, or partly in the one way and partly in the other, and the Directors
shall give effect to such resolution.
118. Whenever such a resolution as aforesaid shall have been passed
the Directors shall make all appropriations and applications of the undivided
profits resolved to be capitalized thereby, and all allotments and issues of
fully-paid shares or debentures, if any, and generally shall do all acts and
things required to give effect thereto, with full power to the Directors to make
such provision by the issue of fractional certificates or by payment in cash or
otherwise as they think fit for the case of shares or debentures becoming
distributable in fractions.
ACCOUNTS
119. The Directors shall cause true accounts to be kept;
(1) Of the sums of money received and expended by the Company,
and the matters in respect of which such receipt and
expenditure take place;
(2) Of the assets and liabilities of the Company; and
(3) Of all other matters necessary for showing the true state
and condition of the Company.
120. The books of account shall be kept at one of the offices of the
Company, and, subject to any reasonable restrictions as to the time and manner
of
<PAGE>
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inspecting the same that may be imposed by the Directors, shall be open to the
inspection of the members during the hours of business.
121. Once at the least in every year the Directors shall, unless
waived by resolution of the shareholders in general meeting lay before the
Company in general meeting a statement of the income and expenditure for the
past year, made up to a date not more than six months before such meeting.
122. Unless waived by a resolution of the shareholders in general
meeting, a balance sheet shall be made out in every year and shall be laid
before the Company in general meeting, and such balance sheet shall contain a
summary of the property and liabilities of the Company.
123. Unless waived by a resolution of the shareholders in general
meeting, the Directors shall make all necessary arrangement for an annual audit
of the books and accounts of the Company.
124. Any auditor appointed need not be a shareholder of the Company.
NOTICES
125. A notice may be served by the Company upon any member either
personally or by sending it through the post in prepaid envelope or wrapper
addressed to such member at his last known address.
126. The signature to any such notice to be given by the Company may
be written, typewritten or printed.
127. Where a notice is sent by post, service of the notice shall be
deemed to be effected by properly addressing, prepaying and posting a letter
containing the notice, and to have been effected in the case of a notice of a
meeting at the expiration of Twenty-four (24) hours after the letter containing
the same is posted, and in any other case at the time at which the letter would
be delivered in the ordinary course of post.
128. A notice may be given by the Company to the joint holders of a
share by giving the notice to the joint holder first named in the Register in
respect of the share.
129. Any notice or document sent by post to, or left at the registered
address of any member, in pursuance of these Articles, shall, notwithstanding
such member be then deceased or bankrupt and whether or not the Company have
notice of his death or bankruptcy, be deemed to have been duly served in respect
of any shares, whether held solely or jointly with other persons by such member,
until some other person be registered in his stead as the holder or joint holder
thereof, and such service shall for all purposes be deemed a sufficient service
of such notice or document on all persons interested (whether jointly with or as
claiming through or under him) in any such share.
130. Notice of meetings of members shall be given by the Secretary at
least Seven (7) days before the date of such meeting.
131. Notice of special business shall state the object for which the
meeting is called.
132. A meeting of members whether ordinary or extraordinary or of
Directors may be held without previous notice if all the members or Directors,
as the case may be, are present in person or in the case of a meeting of members
are present either in person or by proxy.
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WINDING-UP
133. If the Company shall be wound up, and the assets available for
distribution amongst the members as such shall be insufficient to repay the
whole of the paid-up capital, such assets shall be distributed so that, as
nearly as may be, the losses shall be borne by the members in proportion to the
capital paid up, or which ought to have been paid up, at the commencement of the
winding-up on the shares held by them respectively. And if on a winding-up the
assets available for distribution amongst the members shall be more than
sufficient to repay the whole of the capital paid up at the commencement of the
winding-up, the excess shall be distributed amongst the members in proportion to
the capital at the commencement of the winding-up paid up on the shares held by
them respectively. But this Article is to be without prejudice to the rights of
the holders of shares issued upon special terms and conditions.
134. If the Company shall be wound up, the Liquidator may, with the
sanction of a Resolution of the members of the Company and any other sanction
required by the Act, divide amongst the members in specie or kind the whole or
any part of the assets of the Company (whether they shall consist of property of
the same kind or not) and may, for such purpose, set such value as he deems fair
upon any property to be divided as aforesaid, and may determine how such
division shall be carried out as between the members or different classes of
members. The Liquidator may, with the like sanction, vest the whole or any part
of the assets in trustees upon such trusts for the benefit of the members or any
of them as the Liquidator, with the like sanction, shall think fit, but so that
no member shall be compelled to accept any shares or other securities whereon
there is any liability.
INDEMNITY
135. Subject to the limitations (if any) on indemnities conferred by
Sections 118 to 121 (inclusive) of the Act every Director, manager, secretary
and other officer or servant of the Company shall be indemnified by the Company
against, and it shall be the duty of the Directors out of the funds of the
Company to pay all costs, losses and expenses which any such Director, manager,
secretary, officer or servant may incur or become liable to by reason of any
contract entered into, or act or thing done by him as such Director, manager,
secretary, officer or servant, or in any way in the discharge of his duties,
including travelling expenses; and the amount for which such indemnity is
provided shall immediately attach as a lien on the property of the Company, and
have priority as between the members over all other claims.
136. No Director or other officer of the Company shall be liable for
the acts, receipts, neglects or defaults of any other Director or officer or for
joining in any receipt or other act for conformity, or for any loss or expense
happening to the Company through the insufficiency or deficiency of title to any
property acquired by order of the Directors for or on behalf of the Company, or
for the insufficiency or deficiency of any security in or upon which any of the
moneys of the Company shall be invested, or for any loss or damage arising from
the bankruptcy, insolvency, or tortious act, of any person with whom any moneys,
securities or effects shall be deposited, or for any loss occasioned by an error
of judgment, omission, default or oversight on his part, or for any other loss,
damage or misfortune whatsoever which shall happen in the execution of his
office or in relation thereto, unless the same happen through his own
dishonesty.
<PAGE>
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We the subscribers to the Memorandum of Association have hereunto
subscribed our names:
- --------------------------------------------------------------------------------
NAMES, ADDRESSES AND DESCRIPTIONS OF SUBSCRIBERS
- --------------------------------------------------------------------------------
1. /s/ [illegible]
P.O. Box N-624
Nassau, Bahamas
Office Manager
2. /s/ Julie M. Alana
P.O. Box N-624
Nassau, Bahamas
Secretary
- --------------------------------------------------------------------------------
DATED the 12th day of August, A.D. 1996.
Witness to the above signatures:
/s/ J. Cooper
P.O. Box N-624
Nassau, Bahamas
Secretary
COMMONWEALTH OF THE BAHAMAS
Registrar General's Department
I certify the foregoing to be a true
copy of the original document.
/s/ [illegible]
- -----------------------------------
12th August 1996 Registrar General
<PAGE>
Exhibit 3.9
BAHAMA ISLANDS
The Companies Act.
Company Limited by Shares.
MEMORANDUM OF ASSOCIATION
OF
PARADISE ISLAND LIMITED
1. The name of the company is "Paradise Island Limited".
2. The registered office of the company will be situate in the Island of New
Providence one of the Bahama Islands.
3. The objects for which the company is established are:-
(1) To carry on the business of a real estate development company in all
its branches.
(2) To purchase, take on lease or in exchange, or otherwise acquire and
to hold any lands and buildings either within or without the Bahama
Islands, and any estate or interest in and any rights connected
with, any such lands and buildings, and to pay for the same in money
or in the shares or other securities of the company.
(3) To develop and turn to account any land acquired by or in which the
company is interested, and in particular by laying out and preparing
the same as sub-divisions and for building purposes, constructing,
altering. fitting up, and improving buildings, and by planting,
paving, draining, farming, and cultivating the same, and by
advancing money to, and entering into contracts and arrangements of
all kinds with purchasers, tenants, builders, and others.
(4) To plan, lay out, construct, execute, carry out, equip, furnish,
install, improve, develop, maintain, administer, manage, supervise
or control works and conveniences of all kinds, and without
prejudice
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to the generality of the foregoing words, in particular
sub-divisions, villages, townships, roads, bridges, reservoirs,
waterways, wharves, jetties, embankments, irrigations, dredgings,
excavations, reclamations, improvements, sewage disposal systems,
drainage systems, sanitary systems, water, gas, electric light,
telephone, telegraph, wireless and power supply works and
installations, hotels, apartment houses, flats, houses, clubs,
restaurants, shops, theatres, cinemas, studia, baths, swimming
pools, marinas, yacht basins and other facilities for the
accomodation of yachts and private pleasure craft, hospitals,
clinics, schools, places of worship, places of amusement, pleasure
grounds, racetracks, golf courses and other facilities for sports,
parks, gardens, plantings of all kinds, reading rooms, warehouses,
and all other works and conveniences which the company may think
directly or indirectly conducive to these objects, and to contribute
or otherwise assist or take part in the planning, construction,
laying out, equipping, furnishing, installation, maintenance,
development, working, administration, management, supervision and
control thereof.
(5) To carry on the business of proprietors and operators of apartment
buildings, flats, maisonettes, dwelling houses, and clubs in all
branches, and for these purposes to improve land, prepare building
sites, and to construct, reconstruct, pull down, alter, improve,
decorate, finish and maintain apartments, flats, maisonettes,
dwelling houses, clubs, buildings, works and conveniences of all
kinds, and to lay out roads, pleasure gardens and recreation
grounds.
(6) To own, manage, lease (for any period), sell or otherwise dispose of
lots, building sites, hotels, apartments, flats, maisonettes,
dwelling houses, clubs, and buildings, at such rent and on such
terms and conditions as the company shall think fit, to collect
rents and income, and to supply or cause to be supplied to
purchasers, tenants, occupiers, and others, utility services, air
conditioning,
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refreshments, attendances, messengers, sitting rooms, reading rooms,
restaurants, dining and banqueting rooms, lavatories, bath houses,
cabanas, servants' quarters and changing rooms, laundry
conveniences, electric, gas, and other appliances and conveniences,
garages, recreation facilities, and other advantages which the
company may from time to time consider desirable, or to provide for
such management, leasing, sale, and advantage as aforesaid by
employing any person, firm or company to carry out or supply the
same on such terms as the company may think fit.
(7) To carry on the business of hotel, restaurant, night-club, cafe,
tavern, beer-house, refreshment-room and lodging-house keepers,
licensed victuallers, wine, beer, and spirit merchants, dealers in
and importers of aerated, mineral, and artificial waters and other
drinks, purveyors, caterers for amusements and diversions generally,
proprietors of motor and other vehicles, garage proprietors,
livery-stable keepers, jobmasters, farmers, dairymen, ice-merchants,
importers and brokers of food, live and dead stock, and produce of
all descriptions, hairdressers, perfumers, chemists, proprietors of
clubs, golf clubs and golf courses, baths, dressing rooms,
laundries, reading, writing and newspaper rooms, libraries, grounds,
and places of amusements, recreation, sport, entertainment and
instruction of all kinds, tobacco and cigar merchants, agents for
railway, air and shipping companies and carriers, theatrical and
opera box office proprietors, and entrepreneurs and general agents.
(8) To carry on business as tourist agents and contractors, and to
facilitate travelling and to provide for tourists and travellers,
and promote the provision of conveniences of all kinds in the way of
through tickets, circular tickets, sleeping cars or berths, reserved
places, hotel and lodging
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accomodation, guides, safe deposits, inquiry bureaus, baggage
transport and otherwise.
(9) To enter into agreements and arrangements with artists, actors,
performers, entertainers, authors, writers, composers, lyricists,
producers, directors, and technicians of every kind or description
relating to performances and entertainments, public and private, of
every kind and description, including without limiting the
generality of the foregoing words, musical and dramatic
performances, promenade and other concerts, ballets, operas,
operettas, plays, pantomimes, revues, cabarets, vaudeville,
burlesques, circuses, amusements and diversions of every kind and
description provided or produced by natural, mechanical or
electronic means or otherwise howsoever.
(10) To carry on any kind of manufacture or trade, and to buy, sell and
deal in goods, wares and merchandise of all kinds.
(11) To purchase for investment or resale and to traffic in land and
other property of any tenure and any interest therein, and to make
advances upon the security of land or other property, or any
interest therein, and to deal in, traffic by way of sale, lease,
exchange, or otherwise with land and any other property whether real
or personal, and generally to carry on the business of real estate
agents and dealers in all its branches.
(12) To carry on all or any of the following businesses, namely, builders
and contractors, civil engineering contractors, excavators,
dredgers, decorators, manufacturers and producers of and dealers in
building materials and requisites of all kinds, machinery and
general construction contractors, sub-contractors, and hauliers,
and, without limiting the generality of the foregoing words, to
undertake, manage, supervise, administer,
<PAGE>
-5-
erection, construction, decoration, repairing, amending, cleansing,
finishing, and furnishing of buildings, erections, structures, and
works of all kinds.
(13) To buy, lease, construct, build or otherwise acquire all plant,
machinery and equipment necessary or convenient to carry the above
objects or any of them into effect.
(14) To carry on business as capitalists, financiers, promoters,
concessionaires, and contractors, and to undertake, and carry on,
and execute all kinds of financial, contracting, and other
operations commonly carried on or undertaken by capitalists,
financiers, promoters, concessionaires, and contractors, including
the lending of money, either with or without security, to such
persons and on such terms and conditions as the company may think
fit.
(15) To subscribe for, conditionally or unconditionally to underwrite,
issue on commission or otherwise, to assume liability under, issue
on commission or otherwise, to assume liability under, acquire by
purchase or otherwise, and to hold, either as principals or agents,
and absolutely as owners, or by way of collateral security, or
otherwise, and to sell, mortgage, pledge, convert, exchange, or
otherwise, dispose of or deal in the stock, shares, bonds,
debentures, and other securities or obligations of any government,
municipal or other authority, or any industrial, commercial,
financial, or other company, and to issue paid up shares or other
securities of the company in payment or part payment of the purchase
price of any stock, shares, bonds, debentures, or other securities
or obligations acquired by the company.
(16) To purchase or otherwise acquire, and to hold, sell, exchange,
lease, mortgage, pledge, charge, convert, turn to account, dispose
of, and deal with property and rights of all kinds, and in
particular mortgages, debentures, debenture stock, stock, shares,
bonds,
<PAGE>
-6-
patents, concessions, annuities, policies, options, contracts,
produce, commodities, bullion, specie, gems and other minerals,
goods, wares and merchandise of all kinds, book debts, business
concerns and undertakings, and claims, privileges, and choses in
action of all kinds.
(17) To purchase, charter, hire, take in exchange, build, salvage,
repair, reconstruct, or otherwise acquire and hold sailing, steam,
motor, air, and other ships or vessels of all types with all
equipment, accessories and furniture, or any shares or interest in
ships or vessels, and also shares, stocks and securities of any
companies possessed of or interested in, any ships or vessels, and
to maintain, repair, improve, alter, sell, exchange, or let out to
hire or charter, or otherwise deal with and dispose of any such
ships, vessels or shares or securities as aforesaid.
(18) To employ the said ships or vessels in the conveyance of passengers,
mails, and cargo of all kinds between such ports and places in any
part of the world as may seem expedient, and to tender for and
acquire any postal or other subsidies.
(19) To carry on all or any of the businesses of ship owners, airline
operators, carriers by land, water and air, warehousemen,
wharfingers, barge owners, lightermen, forwarding agents, cargo
superintendents, stevedores, and carters.
(20) To carry on business as brokers for the chartering, sale, and
purchase of ships of every description, freight, contractors,
forwarding agents, tourist and passenger agents, managers of ships
of every description, and as insurance brokers and agents.
(21) To employ as ships husband and managing agent any person, firm or
company, whether limited or not, and that although he or they may
not be entitled to any share or interest in the said ship or vessels
or in the company.
<PAGE>
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(22) To carry on all kinds of insurance business, and all kinds of
guarantee and indemnity business, and in particular, without
prejudice to the generality of the foregoing words, to carry on
life, fire, marine, accident, employers' liability, workmen's
compensation, disease, sickness, survivorship, failure of issue,
burglary and robbery, theft, fidelity and transit insurance; and to
act as agents, underwriters and re-insurers with respect to any of
the foregoing.
(23) To carry on a guarantee business, and to give any guarantee for the
payment of money or for the performance of any obligation or
undertaking, whether on behalf of the company, or on behalf of any
other person or corporation.
(24) To carry on a general real estate brokerage business, and to act as
agents and brokers for the purchase, sale, improvement, and
management of any property.
(25) To act as agents and brokers for any individual, company, firm, or
court of law, for the investment, loan, payment, transmission, and
collection of money, and to take, receive, hold, transfer, and
convey all property, real or personal, which may be granted,
conveyed, or committed to this company.
(26) To act as agents or attorneys for the transaction of any business
and the investment and collection of moneys, rents, interests,
dividends, mortgages, bonds, bills, notes, and other securities.
(27) To advance, deposit, or lend money, securities, and property, to or
with such persons and on such terms as may seem expedient, and to
discount, buy, sell and deal in bills, notes, warrants, coupons, and
other negotiable or transferable securities or documents.
(28) To promote, organize, manage, or develop, or to assist in the
promotion, organization, management, or development of any company,
syndicate, enterprise, or undertaking.
<PAGE>
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(29) To carry on any (illegible) the company capable of being
conveniently carried on in connection with the above, or calculated
directly or indirectly to enhance the value of or render profitable
any of the company's property or rights.
(30) To acquire and undertake the whole or any part of the business,
property, and liabilities of any person or company carrying on any
business which this company is authorized to carry on, or possessed
of property suitable for the purposes of this company.
(31) To take, or otherwise acquire, and hold shares in any other company
having objects altogether or in part similar to those of this
company, or carrying on any business capable of being conducted so
as directly or indirectly to benefit this company.
(32) To promote any company or companies for the purpose of acquiring all
or any of the property and liabilities of this company, or for any
other purpose which may seem directly or indirectly calculated to
benefit this company.
(33) To sell or dispose of the undertaking of the company or any part
thereof for such consideration as the company may think fit, and in
particular for shares, debentures, bonds, mortgages, or other
securities of any other company having objects altogether or in part
similar to those of this company.
(34) To enter into partnership or into any arrangement for sharing
profits, union of interest, co-operations, joint adventure,
reciprocal concession, or otherwise, with any person or company
carrying on or engaged in, or about to carry on or engage in, any
business or transaction which this company is authorized to carry on
or engage in, or any business or transaction capable of being
conducted so as directly or indirectly to benefit this company.
(35) To amalgamate with any other company having objects altogether or in
part similar to those of this company.
<PAGE>
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(36) To enter into any arrangements (illegible) authorities, supreme,
municipal, local or otherwise, that may seem conducive to the
company's interests, or any of them, and to obtain from any such
government or authority any rights, privileges, and concessions
which the company may think it desirable to obtain, and to carry
out, exercise, and comply with any such arrangements, rights,
privileges, and concessions.
(37) To obtain any provisional Order or Act of the Legislature and to do
any other act or thing for enabling the company to carry any of its
objects into effect, or for effecting any modification of the
company's constitution, or for any other purpose which may seem
expedient, and to oppose any proceedings or applications which may
seem calculated directly or indirectly to prejudice the company's
interests.
(38) To draw, make, accept, indorse, discount, execute, and issue
promissory notes, bills of exchange, bills of lading, warrants,
debentures, and other negotiable or transferable instruments.
(39) To invest and deal with the moneys of the company not immediately
required upon such securities and in such manner as may from time to
time be determined.
(40) To lend money, either with or without security, generally to such
persons and on such terms as the company may think fit, and in
particular to customers and others having dealings with the company.
(41) To borrow or raise money in such manner as the company shall think
fit, and in particular by the issue of debentures, or debenture
stock, perpetual or otherwise, and to secure the repayment of any
money borrowed, raised or owing by the creation of any mortgages,
charges or liens upon all or any of the property or assets of the
company (both present and future), including its uncalled capital,
and also by the issue of any debentures or debenture stock as
aforesaid and by the creation of any mortgages, charges or liens as
aforesaid to secure and guarantee the performance by the company or
any other person or company of any obligation undertaken by the
company of any other person or company as the case may be.
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(42) (illegible)//mortgage, dispose of, turn to account or (illegible)
deal with, all or any part of the property or rights of the company.
(43) To remunerate any person or company for services rendered, or to be
rendered, in placing or assisting to place or guaranteeing the
placing of any of the shares in the company's capital, or any
debentures or other securities of the company, or in or about the
formation or promotion of the company or the conduct of its
business.
(44) To adopt such means of making known the business of the company as
may seem expedient.
(45) To grant pensions, allowances, gratuities and bonuses to directors,
ex-directors, officers, ex-officers, employees or ex-employees of
the company or the dependents or connections of such persons, and to
establish and maintain or concur in establishing and maintaining
trusts, funds, or schemes (whether contributory or non-contributory)
with a view to providing pensions or other benefits for any such
persons as aforesaid, their dependents or connections, and to
support or subscribe to any charity, fund, or institution the
support of which may in the opinion of the directors be calculated
directly or indirectly to benefit the company or its employees, and
to institute and maintain any club or other establishment or profit
sharing scheme calculated to advance the interests of the company,
its directors, officers or employees.
(46) To pay for any rights or property acquired by the company, and to
remunerate any person or persons or body or bodies corporate, either
by cash payment, transfer of property, or by the allotment of
shares, debentures or other securities of the company credited as
paid up in full, in part or otherwise.
(47) Generally to do all such other acts and things as the company may
think incidental or conducive to the
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attainment of the above objects or any of them.
(48) To procure the company to be registered or recognized in any part of
the world outside of the Bahama Islands.
(49) To do all or any of the above things in any part of the world, and
as principals, agents, contractors, trustees or otherwise, and by or
through trustees, agents or otherwise, and either alone or in
conjunction with others.
(50) To distribute any of the property of the company "in specie" among
the members.
And it is hereby declared that the word "company" in this clause, except where
used in reference to this company, shall be deemed to include any partnership or
other body of persons whether corporate or unincorporate, and whether domiciled
in the Bahama Islands or elsewhere, and that the objects, specified in the
different paragraphs of this clause shall, except where otherwise expressed in
such paragraphs, be in nowise limited by reference to any other paragraph or the
name of the company, but may be carried out in as full and ample a manner and
shall be construed in as wide a sense as if each of the said paragraphs defined
the objects of a separate, distinct and independent company.
4. The liability of the members is limited.
5. The capital of the company is (pound) 10,000 divided into 10,000 shares
of (pound) 1 each, with power to divide the shares in the capital for the time
being into several classes, and to attach thereto respectively any preferential,
deferred, qualified, or special rights, privileges, conditions or restrictions
and to modify or deal with any rights for the time being attached to any class
or classes of shares in the company.
WE, the several persons whose names and addresses are subscribed, are desirous
of being formed into a company, in pursuance of this Memorandum of Association,
and we respectively agree to take the number of shares in the capital of the
company set opposite our respective names.
<PAGE>
Exhibit 3.10
BAHAMA ISLANDS.
----------
The Companies Act.
----------
ARTICLES OF ASSOCIATION
OF
PARADISE ISLAND LIMITED.
----------
Explanatory.
1. In these presents, unless there be something in the subject or context
inconsistent therewith:-
"the company" means the above-named company.
"the office" means the registered office for the time being of the
company.
"the register" means the register of members to be kept pursuant to
Section 22 of The Companies Act.
"the seal" means the common seal of the company.
"month" means calendar month.
"in writing" and "written" mean and include words printed,
lithographed, represented or reproduced in any mode in a visible
form.
"the directors" means the directors for the time being of the company.
"special resolution" and "extraordinary resolution" have the meanings
assigned thereto respectively by The Companies Act.
Words importing the singular number only include the plural number,
and vice versa.
Words importing the masculine gender only include the feminine gender.
Words importing persons include corporations.
2. In addition to the registered office of the company in the Colony, the
company may have an office for the transaction
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of business at any other place or places.
Shares.
3. None of the funds of the company shall be employed in the purchase of,
or lent on, shares of the company.
4. The business of the company may be commenced as soon after the
incorporation of the company as the directors shall think fit, and
notwithstanding that part only of the shares may have been allotted.
5. The shares shall be under the control of the directors who may allot or
otherwise dispose of the same to such persons, on such terms and conditions, and
at such times as the directors think fit Provided Always that any shares to be
issued by the company for cash at any time after the incorporation of the
company shall be offered to the members in proportion to the existing shares
held by them, and such offer shall be made by notice specifying the number of
shares to which the member is entitled and limiting a time within which the
offer, if not accepted, will be deemed to be declined; and after the expiration
of such time, or on receipt of a written intimation from the member to whom such
notice is given, that he declines to accept the shares offered the directors may
dispose of the same in such manner as they think most beneficial to the company.
6. Save as herein otherwise provided, the company shall be entitled to
treat the registered holder of any share as the absolute owner thereof, and
accordingly shall not, except as ordered by a court of competent jurisdiction,
or as by Act required, be bound to recognise any equitable or other claim to or
interest in such share on the part of any other person.
Certificates.
7. The certificates of title to shares shall be issued under the seal of
the company, and shall be signed by the President
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or the Vice-President, and shall be countersigned by the Secretary or some other
person appointed by the directors.
8. Every member shall be entitled to one certificate for the shares
registered in his name, or to several certificates each for one or more of such
shares, and every certificate of shares shall specify the number and the
denoting numbers of the shares in respect of which it is issued, and the amount
paid up thereon.
9. If any certificates be worn out or defaced, then upon production thereof
to the directors, they may order the same to be canceled, and may issue a new
certificate in lieu thereof; and if any certificate be lost or destroyed, then,
upon proof thereof to the satisfaction of the directors and on such indemnity as
the directors deem adequate being given, a new certificate in lieu thereof shall
be given to the party entitled to such lost or destroyed certificate.
Company's Lien on Shares.
10. The company shall have a first and paramount lien upon all the shares
registered in the name of each member, and upon the proceeds of sale thereof,
for his debts, liabilities, and engagements, solely or jointly with any other
person, to or with the company whether the period for the payment, fulfillment,
or discharge thereof shall have actually arrived or not, and no equitable
interest in any share shall be created except upon the footing and condition
that Article 6 hereof is to have full effect. And such lien shall extend to all
dividends from time to time declared in respect of such shares. Unless otherwise
agreed, the registration of a transfer of shares shall operate as a waiver of
the company's lien, if any, on such shares.
11. For the purpose of enforcing such lien, the directors may sell the
shares subject thereto in such manner as they think
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fit, but no sale shall be made until such period as aforesaid shall have
arrived, and until notice in writing of the intention to sell shall have been
served on such member or his personal representatives, and default shall have
been made by him or them in the payment, fulfillment, or discharge of such
debts, liabilities, or engagements for seven days after such notice.
12. The net proceeds of any such sale after payment of the costs of such
sale shall be applied in or towards satisfaction of the debts, liabilities, or
engagements of such member and the residue (if any) paid to him, his personal
representatives or assigns.
13. Upon any sale for enforcing a lien in purported exercise of the powers
hereinbefore given, the directors may cause the purchaser's name to be entered
in the register in respect of the shares sold, and the purchaser shall not be
bound to see to the regularity of the proceedings or to the application of the
purchase money, and after his name has been entered in the register in respect
of such shares the validity of the sale shall not be impeached by any person,
and the remedy of any person aggrieved by the sale shall be in damages only and
against the company exclusively.
Transfer and Transmission.
14. The instrument of transfer of any share shall be signed by both the
transferor and transferee, and the transferor shall be deemed to remain the
holder of such share until the name of the transferee is entered in the register
in respect thereof.
15. Shares in the company may be transferred in any form which the
directors may think fit to register.
16. The directors may decline to register a transfer of any share on which
the company has a lien.
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17. Every instrument of transfer shall be left at the office for
registration, accompanied by the certificate of the shares to be transferred,
and such other evidence as the directors may require to prove the title of the
transferor or his right to transfer the shares.
18. The personal representatives of a deceased member (not being one of
several joint holders) shall be the only persons recognised by the company as
having any title to the shares registered in the name of such member, and in
case of the death of any one or more of the joint registered holders of any
registered share, the survivors shall be the only persons recognised by the
company as having any title to or interest in such shares.
19. Any person becoming entitled to shares in consequence of the death or
bankruptcy of any member, upon producing such evidence that he sustains the
character in respect of which he proposes to act under this Article, or of his
title, as the directors think sufficient, may be registered as a member in
respect of the shares, or may, subject to the regulations as to transfers
hereinbefore contained, transfer such shares.
Alteration of Capital.
20. The company may, from time to time, by special resolution, increase the
capital by the creation of new shares of such amount as may be deemed expedient.
21. The new shares shall be issued in accordance with the provisions of
Article 5 and upon such terms and conditions and with such rights and privileges
annexed thereto as the special resolution creating the same shall direct, and if
no direction be given, as the directors shall determine.
22. If any difficulty shall arise in the apportionment of such new shares,
or any of them amongst the members, such
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difficulty shall, in the absence of direction by the company, be determined by
the directors.
23. Except so far as otherwise provided by the conditions of issue, or by
these presents, any capital raised by the creation of new shares shall be
considered part of the original capital, and shall be subject to the provisions
herein contained with reference to transfer and transmission, forfeiture, lien,
and otherwise.
24. The company may, from time to time, by special resolution, consolidate
its shares or any of them.
Borrowing Powers.
25. The directors may, from time to time, at their discretion, raise or
borrow any sum or sums of money for the purposes of the company.
26. The directors may, whether outright or as security for any debenture,
liability or obligation of the company or of any third party, and in such manner
and upon such terms and conditions in all respects as they think fit, issue
bonds, perpetual or redeemable debentures or debenture stock, or create any
mortgage, charge or other security upon the undertaking or the whole or any part
of the property of the company (both present and future), including its uncalled
capital for the time being.
General Meetings.
27. General meetings of the company may be held anywhere in the world.
28. The first general meeting shall be held at such time (not being more
than four months after the registration of the company) as the directors may
determine, and at the City of Nassau in the Island of New Providence, or at such
other place either within or without the Colony as may be prescribed by the
directors.
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29. Other general meetings shall be held once at least in every calendar
year at such time, not being more than fifteen months after the holding of the
last preceding general meeting, and at such place either within or without the
Colony as may be determined by the directors. At these meetings the Annual
Report of the directors shall be presented, the directors elected for the
ensuing year and the general business of the company transacted. Such general
meetings shall be called "ordinary meetings", and all other meetings of the
company shall be called "extraordinary meetings".
30. The directors may, whenever they think fit, convene an extraordinary
meeting, and they shall, on the requisition of the holders of a majority in
value of the subscribed and issued shares of the company, forthwith proceed to
convene an extraordinary meeting of the company.
31. Seven days' notice, specifying the place, day and hour of the meeting,
and in case of special business, the general nature of such business shall be
given to the members in manner hereinafter mentioned; or in such other manner,
if any, as may be prescribed by the company in general meeting; but the
non-receipt of such notice by any member shall not invalidate the proceedings at
any meeting.
32. All business shall be deemed to be special that is transacted at an
extraordinary meeting, and all that is transacted at an ordinary meeting, with
the exception of sanctioning a dividend, the consideration of the accounts,
balance sheets, and the ordinary reports of the directors and auditors, and the
election of directors, officers and auditors.
33. When all the members in person or by proxy sign the minutes of an
ordinary or extraordinary meeting, the same shall be deemed to have been duly
held, notwithstanding that the
<PAGE>
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members have not actually come together or that there may have been technical
defects in the proceedings. And a resolution in writing in one or more parts,
signed by all the members shall be as valid and effectual as if it had been
passed at a meeting of the members duly called and constituted.
Proceedings at General Meetings.
34. No business shall be transacted at any general meeting unless a quorum
is present when the meeting proceeds to business except to take measures to
obtain a quorum.
35. A quorum shall consist of members present in person or by proxy holding
or representing a majority in value of the subscribed and issued shares of the
company.
36. The President or the Vice-President shall preside as Chairman at every
general meeting of the company. In their absence the members present shall
choose some one of their number to be Chairman.
37. The Chairman may, with the consent of the meeting, adjourn any meeting
from time to time, and from place to place, but no business shall be transacted
at any adjourned meeting other than the business left unfinished at the meeting
from which adjournment took place.
38. Every question submitted to a meeting shall be decided, in the first
instance, by a show of hands, and in the case of an equality of votes the
Chairman shall, both on a show of hands and on a poll have a casting vote, in
addition to the vote or votes to which he may be entitled as a member.
39. At any general meeting, unless a poll is demanded by the Chairman or by
members present in person or by proxy holding one-fourth in value of the
subscribed and issued shares of the company, a declaration by the Chairman that
a resolution has been carried, or carried by a particular majority, or lost, or
<PAGE>
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not carried by a particular majority, and an entry to that effect in the books
of proceedings of the company, shall be conclusive evidence of the fact without
proof of the number or proportion of the votes recorded in favour of or against
such resolution.
40. If a poll is demanded as aforesaid, it shall be taken in such manner
and at such time and place as the Chairman of the meeting directs and either at
once, or after an interval or adjournment, or otherwise, and the results of the
poll shall be deemed to be the resolution of the meeting at which the poll was
demanded. The demand for a poll may be withdrawn. In case of any dispute as to
the admission or rejection of a vote the Chairman shall determine the same, and
such determination made in good faith shall be final and conclusive.
Votes of Members.
41. On a show of hands every member present in person or by proxy shall
have one vote, and upon a poll every member present in person or by proxy shall
have one vote for every share held by him.
42. Votes may be given either personally or by proxy.
43. The instrument appointing a proxy shall be in writing, under the hand
of the appointor or of his attorney. Any person appointed a proxy need not be a
member of the company.
44. The instrument appointing a proxy shall be deposited with the Secretary
before or at the meeting for which it is to be used, and may be permanent or ad
hoc. If a proxy is permanent it may be recorded with the Secretary.
45. A vote given in accordance with the terms of an instrument of proxy
shall be valid notwithstanding the previous death of the principal, or
revocation of the proxy, or transfer of the share in respect of which the
vote is given, provided no
<PAGE>
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intimation in writing of the death, revocation, or transfer shall have been
received before the meeting.
46. An instrument appointing a proxy may be in any form which the directors
think fit to approve.
Directors.
47. The directors of the company shall be elected at the first ordinary
meeting of the company after registration and in every subsequent year at the
first ordinary meeting of the year. They shall be elected for a year but shall
hold office until their successors are duly elected or until the office is
vacated as provided by Article 49. The directors shall not be less than two, nor
more than seven in number. A director shall not require any qualification by way
of holding any shares or other securities of the company.
48. Until directors are elected, the persons hereinafter named shall be
deemed to be directors, that is to say:- Lionel Levine, Barbara Marian Gamblin
and Douglas Eugene Duncombe.
49. The office of a director shall ipso facto be vacated:-
(a) if he becomes bankrupt, or suspends payment, or compounds with
his creditors;
(b) if he is found lunatic or becomes of unsound mind;
(c) if by notice in writing to the company, he resigns his office;
(d) if he is requested in writing by members holding or representing
more than one-half in value of the subscribed and issued shares
of the company to vacate his office.
But the continuing directors or sole remaining director may act notwithstanding
any vacancy in their body, but, if and so long
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as their number is reduced below the number fixed by or pursuant to these
Articles as the necessary quorum of directors, the continuing directors or
director may act for the purpose of increasing the number of directors to that
number, or of summoning a general meeting of the company, but for no other
purpose.
50. Any casual vacancy occurring in their body may at any time be filled up
by the directors or by the company in general meeting, but any person so chosen
shall retain office so long only as the vacating director would have retained
the same if no vacancy had occurred.
51. The directors or the company in general meeting shall have power at any
time, and from time to time, to appoint any qualified person as a director as an
addition to the board, but so that the total number of directors shall not at
any time exceed the maximum number fixed as above. But any director so appointed
shall hold office only until the next following ordinary general meeting of the
company, and shall then be eligible for re-election.
Director or Officer Contracting with Company.
52. No director or officer shall be disqualified by his office from
contracting and/or dealing with the company either as vendor, purchaser, or
otherwise, nor shall any such contract, or any contract or arrangement entered
into by or on behalf of the company in which any director or officer shall be in
any way interested, be avoided, nor shall any director or officer so contracting
or being so interested be liable to account to the company for any profit
realised by any such contract or arrangement by reason of such director or
officer holding that office or the fiduciary relation thereby established, but
it is declared that the nature of his interest must be disclosed by him at the
meeting of the directors at which the contract or arrangement is
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determined on, if his interest then exists, or in any other case at the first
meeting of the directors after the acquisition of his interest, and having
disclosed his interest as aforesaid such director shall be entitled to vote as a
director in respect of any contract or arrangement in which he is so interested
as aforesaid.
Remuneration of Directors.
53. The directors shall be paid out of the funds of the company by way of
remuneration for their services such sums as the company in general meeting may
from time to time determine, and such remuneration shall be divided among them
in such proportions and manner as the directors may determine, and in default of
such determination within the year equally.
Proceedings of Directors.
54. The directors may meet together at such place as they may determine for
the dispatch of business, adjourn, and otherwise regulate their meetings and
proceedings as they think fit, and may determine the quorum necessary for the
transaction of business. Until otherwise determined, two directors present in
person shall be a quorum.
55. The President or any two directors may at any time convene a meeting of
the directors. Every director shall be entitled to seventy-two hours' notice of
every meeting of the directors, and every such notice shall be in writing or by
cable, radiogram or telegram. Questions arising at any meeting shall be decided
by a majority of votes, and in case of an equality of votes, the Chairman shall
have a second or casting vote.
56. A meeting of the directors for the time being at which a quorum is
present shall be competent to exercise all or any of
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the authorities, powers and discretions by or under the regulations of the
company for the time being vested in or exercisable by the directors generally.
57. The President or the Vice-President shall preside at all meetings of
the directors. In the absence of the President and the Vice-President the
directors present shall choose some one of their number to be Chairman of the
meeting.
58. The directors may with the approval of not less than the number of
directors as may from time to time constitute a quorum delegate any of their
powers to committees consisting of such member or members of their body as they
think fit, and they may, from time to time, revoke such delegation or revoke the
appointment of and discharge any such committees either wholly or in part and
either as to persons or purposes; but every committee so formed, shall, in the
exercise of the powers so delegated, conform to any regulations that may from
time to time be imposed on it by the directors.
59. Each such committee may elect a Chairman of its meetings. If no such
Chairman is elected, or if at any meeting the Chairman is not present within ten
minutes after the time appointed for holding the same, the members present may
choose some one of their number to be Chairman of the meeting.
60. Each such committee may meet and adjourn as it thinks proper. Questions
arising at any meeting shall be determined by a majority of votes of the members
present, and in the case of an equality of votes the Chairman shall have a
second or casting vote.
61. All acts done at any meeting of the directors, or of a committee of
directors, or by any person acting as a director, shall, notwithstanding that it
shall afterwards be discovered that there was some defect in the appointment or
continuance in
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office of any such directors or person acting as aforesaid, or that they or any
of them were disqualified or had vacated office or were not entitled to vote, be
as valid as if every such person had been duly appointed or had duly continued
in office and was qualified and had continued to be a director, and had been
entitled to be a director.
62. When all the directors sign the minutes of a meeting of the directors
the same shall be deemed to have been duly held notwithstanding that the
directors have not actually come together or that there may have been technical
defects in the proceedings. And a resolution in writing, in one or more parts,
signed by all the directors shall be as valid and effectual as if it had been
passed at a meeting of the directors duly called and constituted.
Powers of Directors.
63. The management of the business of the company shall be vested in the
directors, who, in addition to the powers and authorities by these presents or
otherwise expressly conferred upon them, may exercise all such powers and do all
such acts and things as may be exercised or done by the company and are not
hereby or by Act expressly directed or required to be exercised or done by the
company in general meeting, but subject nevertheless to the provisions of any
Act, and of these presents, and to any regulations from time to time made by the
company in general meeting, provided that no regulation so made shall invalidate
any prior act of the directors which would have been valid if such regulation
had not been made.
Local Management.
64. (1) The directors may, from time to time, provide for the management of
the affairs of the company abroad in such manner as they shall think fit, and
the provisions contained in the four next following paragraphs shall be without
prejudice to
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the general powers conferred by this paragraph.
(2) The directors may, from time to time, and at any time, establish
any local boards or agencies for managing any of the affairs of the company
abroad, and may appoint any persons to be members of such local board, or any
managers or agents, and may fix their remuneration.
(3) The directors may, from time to time, and at any time delegate to
any person so appointed any of the powers, authorities, and discretions for the
time being vested in the directors and may authorise the members for the time
being of any such local board, or any of them to fill up any vacancies therein,
and to act notwithstanding vacancies, and any such appointment or delegation may
be made on such terms and subject to such conditions as the directors may think
fit, and the directors may at any time remove any person so appointed, and may
annul or vary any such delegation.
(4) The directors may, at any time and from time to time, by power of
attorney under the seal, appoint any person or persons to be the attorney or
attorneys of the company for such purposes and with such powers, authorities and
discretions (not exceeding those vested in or exercisable by the directors under
these presents), and for such period and subject to such conditions as the
directors may from time to time think fit; and any such appointment may (if the
directors think fit) be made in favour of the members or any of the members of
any local board established as aforesaid, or in favour of any company, or of the
members, directors, nominees, or managers of any company or firm, or otherwise
in favour of any fluctuating body of persons, whether nominated directly or
indirectly by the directors; and any such power of attorney may contain such
provisions for the protection or convenience of persons dealing with such
attorney or attorneys as the directors think fit.
<PAGE>
- 16 -
(5) Any such delegates or attorneys as aforesaid may be authorised by
the directors to sub-delegate all or any of the powers, authorities, and
discretions for the time being vested in them.
65. The company may exercise the powers conferred by the Companies Seals
Act of the Colony.
66. The directors may comply with the requirements of any foreign law which
in their opinion it shall in the interests of the company be necessary or
expedient to comply with.
Officers.
67. The officers of the company shall be elected annually by the company or
appointed annually by the directors, and shall consist of a President, a
Vice-President, a Secretary, a Treasurer, one or more Assistant Secretaries, and
one or more Assistant Treasurers, and such other officers as the company or the
directors may from time to time think necessary, and such other officers shall
perform such duties as may be prescribed by the directors. They shall hold
office until their successors are elected or appointed. But any officer may be
removed at any time by the company in general meeting or by the directors. If
any office becomes vacant during the year the company in general meeting or the
directors may fill the same for the unexpired term.
68. Until officers are elected or appointed the persons hereinafter named
shall be deemed to be the officers of the company, that is to say:- Lionel
Levine, President, Barbara Marian Gamblin, Vice-President, and Douglas Eugene
Duncombe, Secretary and Treasurer.
69. Any person may hold more than one of these offices, and no officer need
be a member of the company.
<PAGE>
- 17 -
President.
70. The President shall act as Chairman of all meetings of the members and
of the directors. He shall also perform such other duties as may be prescribed
by these Articles, the company in general meeting, or the directors.
Vice-President.
71. The Vice-President in the absence or disability of the President, may
perform the duties and exercise the powers of the President, and shall perform
such other duties as may be prescribed by these Articles, the company in general
meeting, or the directors.
Treasurer.
72. The Treasurer shall perform such duties as may be prescribed by these
Articles, the company in general meeting, or the directors, and if and when
directed so to do by the company or the directors, shall keep full and accurate
accounts of the receipts and disbursements of the company in books belonging to
the company and shall render to the directors at regular meetings of the
directors, or whenever they may require it, a statement of the financial
condition of the company.
Assistant Treasurers.
73. Any one of the Assistant Treasurers, in the absence or disability of
the Treasurer, may perform the duties and exercise the powers of the Treasurer,
and each Assistant Treasurer shall perform such other duties as may be
prescribed by these Articles the company in general meeting, or the directors.
Secretary.
74. The Secretary shall attend and keep the minutes of the meetings of the
members and of the directors. He shall also summon meetings and keep such other
books and records of the company and the directors as may be required by the
company
<PAGE>
- 18 -
in general meeting, or the directors, and perform such other duties as may be
prescribed by these Articles, the company in general meeting, or the directors.
Assistant Secretaries.
75. Any one of the Assistant Secretaries, in the absence or disability of
the Secretary, may perform the duties and exercise the powers of the Secretary,
and each Assistant Secretary shall perform such other duties as may be
prescribed by these Articles, the company in general meeting, or the directors.
The Seal.
76. The directors shall provide for the safe custody of the seal, and the
seal shall never be used except by the authority of a resolution of the
directors or a general meeting.
Authentication of Deeds and Documents.
77. All deeds executed on behalf of the company may be in such form and
contain such powers, provisos, conditions, covenants, clauses, and agreements as
the directors, or the company in general meeting, shall think fit, and, in
addition to being sealed with the seal, shall be signed by the President or the
Vice-President or such other person as the directors or the company in general
meeting shall from time to time appoint, and countersigned by the Secretary or
an Assistant Secretary or such other person as the directors or the company in
general meeting shall from time to time appoint.
Dividends.
78. The profits of the company shall be divisible among the members holding
shares in proportion to the capital paid up on such shares held by them
respectively.
79. The company in general meeting may declare a dividend to be paid to the
members according to their rights and interests in the profits, and may fix the
time for payment.
<PAGE>
- 19 -
80. No dividend shall be payable except out of the profits of the company.
81. The directors may from time to time pay to the members such interim
dividends as in their judgment the position of the company justifies.
82. The directors may deduct from the dividends payable to any member all
such sums of money as may be due from him to the company.
83. Any one of several persons who are registered as the joint holders of
any share may give effectual receipts for all dividends and payments on account
of dividends in respect of such shares.
84. Unless otherwise directed any dividend may be paid by cheque or warrant
sent through the post to the registered address of the member entitled, or, in
the case of joint holders, to the registered address of that one whose name
stands first on the register in respect of the joint holding; and every cheque
or warrant so sent shall be made payable to the order of the person to whom it
is sent.
85. Notice of any dividend that may have been declared whether interim or
otherwise, shall be given to each member either by advertisement or by notice in
manner hereinafter mentioned.
86. No dividend shall bear interest as against the company.
87. Any general meeting declaring a dividend may direct payment of such
dividend wholly or in part by the distribution of specific assets, and in
particular of paid-up shares, debentures or debenture stock of the company or
paid-up shares, debentures or debenture stock of any other company, or in any
one or more of such ways, and the directors shall give effect
<PAGE>
- 20 -
to such resolutions; and, where any difficulty arises in regard to the
distribution, they may settle the same as they think expedient.
Reserves.
88. The directors may, before recommending any dividend, set aside, out of
the profits of the company, such sums as they think proper as a reserve fund to
meet contingencies, or for equalising dividends, or for special dividends or
bonuses, or for repairing, improving, and maintaining any of the property of the
company, and for such other purposes as the directors shall in their absolute
discretion think conducive to the interests of the company; and may invest the
several sums so set aside upon such investments (other than shares of the
company) as they may think fit, and from time to time deal with and very such
investments, and dispose of all or any part thereof for the benefit of the
company, and may divide the reserve fund into such special funds as they think
fit and employ the reserve fund or any part thereof in the business of the
company, and that without being bound to keep the same separate from the other
assets.
Capitalisation of Profits and Reserves.
89. The company in general meeting may, upon the recommendation of the
directors, resolve that it is desirable to capitalise any undivided profits of
the company not required for paying the dividends on any shares carrying a fixed
cumulative preferential dividend (including profits carried and standing to the
credit of any reserve or reserves or other special account), and accordingly
that the directors be authorised and directed to appropriate the profits
resolved to be capitalised to the members in the proportions in which such
profits would have been divisible amongst them had the same been applied in
paying
<PAGE>
- 21 -
dividends instead of being capitalised, and to apply such profits on their
behalf, either in or towards paying up the amounts, if any, for the time being
unpaid on any shares held by such members respectively, or in paying up in full
unissued shares, debentures, or securities of the company of a nominal amount
equal to such profits, such shares, debentures, or securities to be alloted and
distributed, credited as fully paid up, to and amongst such members in the
proportion aforesaid or partly in one way and partly in the other.
90. Whenever such a resolution as aforesaid shall have been passed, the
directors shall make all appropriations and applications of the undivided
profits resolved to be capitalised thereby, and all allotments and issues of
fully paid shares, debentures or securities, if any, and generally shall do all
acts and things required to give effect thereto, with full power to the
directors to make such provision by the issue of fractional certificates or by
payment in cash or otherwise as they think fit in the case of shares, debentures
or securities becoming distributable in fractions, and also to authorise any
person to enter on behalf of all the members interested into an agreement with
the company providing for the allotment to them respectively, credited as fully
paid up, of any further shares, debentures or securities to which they may be
entitled upon such capitalisation, or (as the case may require) for the payment
up by the company on their behalf, by the application thereto of their
respective proportions of the profits resolved to be capitalised, of the amounts
or any part of the amounts remaining unpaid on their existing shares, and any
agreement made under such authority shall be effective and binding on all such
members.
Accounts.
91. The directors shall cause true accounts to be kept of
<PAGE>
- 22 -
the stock-in-trade of the company, of the sums of money received and expended by
the company, and the matters in respect of which such receipt and expenditure
take place; and of the assets, credits and liabilities of the company.
92. The books of account shall be kept at one of the offices of the
company.
93. Once at the least in every year the directors shall, unless waived by a
resolution of the members in general meeting, lay before the company in general
meeting a statement of the income and expenditures for the past year, made up to
a date not more than six months before such meeting.
94. Unless waived by a resolution of the members in general meeting, a
balance sheet shall be made out in every year, and laid before the company in
general meeting, and such balance sheet shall contain a summary of the property
and liabilities of the company.
95. Unless waived by a resolution of the members in general meeting, the
directors shall make all necessary arrangements for an annual audit of the books
and accounts of the company.
Notices.
96. A notice may be served by the company upon any member either personally
or by sending it through the post in a prepaid envelope addressed to such member
at his last known address.
97. The signature to any such notice to be given by the company may be
written, typewritten, or printed.
98. Any notice, if served by post, shall be deemed to have been served at
the time when the envelope containing the same would be delivered in the
ordinary course of post; and in proving such service it shall be sufficient to
prove that the envelope containing the notice was properly addressed, stamped
and posted.
<PAGE>
- 23 -
99. Notice of meetings of members shall be given by the Secretary at least
seven days before the date of such meeting.
100. Notice of special meetings shall state the objects for which the
meeting is called.
101. Any member or director may waive the right to receive notices by an
instrument in writing signed by him before, at or after any meeting.
Indemnity.
102. Every director, manager, auditor, president, vice-president,
secretary, treasurer, and other officer or servant of the company shall be
indemnified by the company against, and it shall be the duty of the directors
out of the funds of the company to pay all costs, losses and expenses which any
such officer or servant may incur or become liable to by reason of any contract
entered into, or act or thing done by him as such director, manager, auditor,
president, vice-president, secretary, treasurer, officer or servant as
aforesaid, or in any way in the discharge of his duties, including travelling
expenses.
IN WITNESS WHEREOF We the Subscribers to the Memorandum of Association have
hereunto subscribed our names this Twenty-third day of June, A.D., 1965.
/s/Lionel Levine
- -------------------------------
/s/B. M. Gamblin
- -------------------------------
/s/W. S. Pearce
- -------------------------------
/s/Irma F. Albury
- -------------------------------
/s/D. E. Duncombe
- -------------------------------
Signed by the Subscribers to the Memorandum of Association in the presence of:-
/s/F. E. Weech
<PAGE>
Exhibit 3.11
BAHAMA ISLANDS.
- - -
The Companies Act.
Company Limited by Shares.
- - -
MEMORANDUM OF ASSOCIATION
OF
PARADISE ENTERPRISES LIMITED
1. The name of the company is "Paradise Enterprises Limited".
2. The registered office of the company will be situate in the Island
of New Providence one of the Bahama Islands.
3. The objects for which the company is established are: -
(1) To establish, maintain, own, operate, conduct, control,
manage, or assist in any manner in the management of any
clubs, facilities and conveniences for the advantage,
enjoyment, pleasure or entertainment of such persons as the
company shall from time to time think fit; to provide
club-houses and other facilities and conveniences, and
generally to afford all the advantages, conveniences and
accommodation of clubs and facilities of every kind.
(2) To enter into agreements and arrangements with artists,
actors, performers, entertainers, authors, writers,
composers, lyricists, producers, directors, and technicians
of every kind or description relating to performances and
entertainments, public and private, or every kind and
description, including, without limiting the generality of
the foregoing words, musical and dramatic performances,
promenade and other concerts, ballets, operas, operettas,
plays, pantomimes, revues, cabarets, vaudeville, burlesques,
circuses, amusements and diversions of every kind and
description provided or produced by natural, mechanical or
electronic means or otherwise howsoever.
(3) To carry on the business of hotel, restaurant, night-club,
cafe, tavern, beer-house, refreshment-room, and
<PAGE>
-2-
lodging-house keepers, licensed victuallers, wine, beer, and
spirit merchants, dealers in and importers of aerated,
mineral, and artificial waters and other drinks, purveyors,
caterers for amusements and diversions generally,
proprietors of motor and other vehicles, garage proprietors,
livery-stable keepers, jobmasters, farmers, dairymen, ice
merchants, importers and brokers of food, live and dead
stock, and colonial and foreign produce of all descriptions,
hairdressers, perfumers, chemists, proprietors of clubs,
baths, dressing rooms, laundries, reading, writing and
newspaper rooms, libraries, grounds and places of
amusements, recreation, sport, entertainment, and
instruction of all kinds, tobacco and cigar merchants,
agents for railway, air and shipping companies and carriers,
theatrical and opera box office proprietors, and
entrepreneurs and general agents.
(4) To carry on business as tourist agents and contractors, and
to facilitate travelling and to provide for tourists and
travellers, and promote the provision of conveniences of all
kinds in the way of through tickets, circular tickets,
sleeping cars or berths, reserved places, hotel and lodging
accommodation, guides, safe deposits, inquiry bureaus,
baggage transport and otherwise.
(5) To purchase, take on lease or in exchange, or otherwise
acquire and to hold any lands and buildings in the Bahama
Islands or elsewhere, and any estate or interest in, and any
rights connected with, any such lands and buildings.
(6) To develop and turn to account any land acquired by or in
which the company is interested, and in particular by laying
out and preparing the same for building purposes,
constructing, altering, fitting up, and improving buildings
and by planting, paving, draining, farming, and cultivating
the
<PAGE>
-3-
same, and by advancing money to, and entering into contracts
and arrangements of all kinds with builders, tenants and
others.
(7) To purchase for investment or resale, and to traffic in land
and other property of any tenure and any interest therein,
and to make advances upon the security of land or other
property, or any interest therein, and to deal in, traffic
by way of sale, lease, exchange, or otherwise with land and
any other property, whether real or personal, and generally
to carry on the business of real estate agents and dealers
in all its branches.
(8) To purchase or otherwise acquire any interest in any
patents, brevets d'invention, licences, concessions, and the
like, conferring an exclusive or non-exclusive or limited
right to use, or any secret or other information as to any
invention which may seem to the company capable of being
profitably dealt with, and with a view thereto to enter into
and carry into effect all such agreements as may seem
expedient, and to use, exercise, develop, grant licences in
respect of, or otherwise to turn to account any such
patents, brevets d'invention, licences, concessions, and the
like, and information aforesaid.
(9) To carry on business as bankers, capitalists, financiers,
promoters, concessionaires, contractors, manufacturers, and
merchants, and to undertake, and carry on, and execute all
kinds of banking, financial, contracting, manufacturing,
trading, and other operations commonly carried on or
undertaken by bankers, capitalists, financiers, promoters,
concessionaires, contractors, manufacturers, and merchants.
<PAGE>
-4-
(10) To subscribe for, conditionally or unconditionally, to
underwrite, issue on commission or otherwise, to assume
liability under, acquire by purchase or otherwise, and to
hold, either as principals or agents, and absolutely as
owners, or by way of collateral security, or otherwise, and
to sell, mortgage, pledge, convert, exchange, or otherwise,
dispose of or deal in the stock, shares, bonds, debentures,
and other securities or obligations of any government,
municipal or other authority, or any industrial, commercial,
financial, or other company, and to issue paid up shares or
other securities of the company in payment or part payment
of the purchase price of any stock, shares, bonds,
debentures, or other securities or obligations acquired by
the company.
(11) To purchase or otherwise acquire, and to hold, sell,
exchange, lease, mortgage, pledge, charges, convert, turn to
account, dispose of, and deal with property and rights of
all kinds, and in particular mortgages, debentures,
debenture stock, stock, shares, bonds, patents, concessions,
annuities, policies, options, contracts, produce,
commodities, bullion, specie, gems and other minerals, book
debts, business concerns and undertakings, and claims,
privileges, and choses in action of all kinds.
(12) To grant annuities of all kinds, whether dependent on human
life or otherwise, and whether perpetual or terminable,
immediate or deferred, absolute, contingent or otherwise.
(13) To carry on any kind of manufacture or trade, and to buy,
sell and deal in goods, wares and merchandise of all kinds.
(14) To carry on a general financial agency, investment and
brokerage business, and to act as agents
<PAGE>
-5-
and brokers for the purchase, sale, improvement, and
management of any property, estate, business or undertaking.
(15) To act as agents and brokers for any individual, company,
firm, or court of law, for the investment, loan, payment,
transmission, and collection of money, and to take, receive,
hold, transfer, and convey all property, real or personal,
which may be granted, conveyed, or committed to this
company.
(16) To act as agents or attorneys for the transaction of any
business, and the investment and collection of moneys,
rents, interests, dividends, mortgages, bonds, bills, notes
and other securities.
(17) To carry on a guarantee, trust and agency business, and to
give any guarantee for the payments of money or for the
performance of any obligation or undertaking, whether on
behalf of the company or on behalf of any other person or
corporation.
(18) To advance, deposit, or lend money, securities, and
property, to or with such persons and on such terms as may
seem expedient, and to discount, buy, sell, and deal in
bills, notes, warrants, coupons, and other negotiable or
transferable securities or documents.
(19) To promote, organise, manage, or develop, or to assist in
the promotion, organisation, management, or development of
any company, syndicate, enterprise, or undertaking.
(20) To carry on any other business which may seem to the company
capable of being conveniently carried on in connection with
the above, or calculated directly or indirectly to enhance
the value of or render profitable any of the company's
property or rights.
<PAGE>
-6-
(21) To acquire and undertake the whole or any part of the
business, property, and liabilities of any person or company
carrying on any business which this company is authorised to
carry on, or possessed of property suitable for the purposes
of this company.
(22) To take, or otherwise acquire, and hold shares in any other
company having objects altogether or in part similar to
those of this company, or carrying on any business capable
of being conducted so as directly or indirectly to benefit
this company.
(23) Generally to purchase, take on lease or in exchange, hire,
or otherwise acquire, any real and personal property, and
any rights or privileges which the company may think
necessary or convenient for the purposes of its business,
and to construct, maintain and alter any buildings, or
works, necessary or convenient for the purposes of the
company.
(24) To promote any company or companies for the purpose of
acquiring all or any of the property and liabilities of this
company, or for any other purpose which may seem directly or
indirectly calculated to benefit this company.
(25) To sell or dispose of the undertaking of the company or any
part thereof for such consideration as the company may think
fit, and in particular for shares, debentures, bonds,
mortgages, or other securities of any other company having
objects altogether or in part similar to those of this
company.
(26) To enter into partnership or into any arrangement for
sharing profits, union of interests, co-operation, joint
adventure, reciprocal concession, or otherwise, with any
person or company carrying on or engaged in, or about to
<PAGE>
-7-
carry on or engage in, any business or transaction which
this company is authorised to carry on or engage in, or any
business or transaction capable of being conducted so as to
directly or indirectly benefit this company.
(27) To amalgamate with any other company having objects
altogether or in part similar to those of this company.
(28) To enter into any arrangements with any governments or
authorities, supreme, municipal, local or otherwise, that
may seem conducive to the company's objects, or any of them,
and to obtain from any such government or authority, any
rights, privileges, and concessions which the company may
think it desirable to obtain, and to carry out, exercise,
and comply with any such arrangements, rights, privileges,
and concessions.
(29) To obtain any provisional Order or Act of the Legislature
and to do any other act or thing for enabling the company to
carry any of its objects into effect, or for effecting any
modification of the company's constitution, or for any other
purpose which may seem expedient, and to oppose any
proceedings or applications which may seem calculated,
directly or indirectly to prejudice the company's interests.
(30) To draw, make, accept, indorse, discount, execute, and issue
promissory notes, bills of exchange, bills of lading,
warrants, debentures, and other negotiable or transferable
instruments.
(31) To invest and deal with the moneys of the company not
immediately required upon such securities and in such manner
as may from time to time be determined.
<PAGE>
-8-
(32) To lend money, either with or without security, generally to
such persons and on such terms as the company may think fit,
and in particular to customers and others having dealings
with the company and to members, directors and officers of
the company and to members, directors and officers of the
company, and to guarantee to payment of money and/or the
performance of contracts and obligations by any such
persons.
(33) To borrow or raise or secure the payment of money in such
manner as the company shall think fit, and in particular by
the issue of debentures, or debenture stock, perpetual or
otherwise, charged upon all or any of the company's property
(both present and future), including its uncalled capital,
and to redeem or pay off such securities.
(34) To sell, improve, manage, develop, exchange, lease,
mortgage, dispose of, turn to account, or otherwise deal
with, all or any part of the property or rights of the
company.
(35) To remunerate any person or company for services rendered,
or to be rendered, in placing or assisting to place or
guaranteeing the placing of any of the shares in the
company's capital, or any debentures or other securities of
the company, or in or about the formation or promotion of
the company or the conduct of its business.
(36) To adopt such means of making known the business of the
company as may seem expedient.
(37) To grant pensions, allowances, gratuities and bonuses to
directors, ex-directors, officers, ex-officers, employees
and ex-employees of the company and the dependents and
connections of such persons, and to establish and maintain
or concur in establishing and maintaining trusts, funds, or
schemes (whether contributory
<PAGE>
-9-
or non-contributory) with a view to providing pensions or
other benefits for any such persons as aforesaid, their
dependents or connections, and to support or subscribe to
any charity, funds, or institutions the support of which may
in the opinion of the directors be calculated directly or
indirectly to benefit the company or its employees, and to
institute and maintain any club or other establishment or
profit sharing scheme calculated to advance the interests of
the company, its officers or employees.
(38) To pay for any rights or property acquired by the company,
and to remunerate any person or persons or body or bodies
corporate, either by cash payment, transfer of property, or
by the allotment of shares, debentures or other securities
of the company credited as paid up in full, in part or
otherwise.
(39) Generally, to do all such other acts and things as the
company may think incidental or conducive to the attainment
of the above objects or any of them.
(40) To procure the company to be registered or recognised in any
part of the world outside of the Bahama Islands.
(41) To do all or any of the above things in any part of the
world, and as principals, agents, contractors, trustees or
otherwise, and by or through trustees, agents or otherwise,
and either alone or in conjunction with others.
(42) To distribute any of the property of the company "in specie"
among the members.
And it is hereby declared that the word "company" in this clause, except where
used in reference to this company, shall
<PAGE>
-10-
be deemed to include any partnership or other body of persons whether corporate
or unincorporate, and whether domiciled in the Bahama Islands or elsewhere, and
that the objects specified in the different paragraphs of this clause shall,
except where otherwise expressed in such paragraphs, be in nowise limited by
reference to any other paragraph or the name of the company, but may be carried
out in as full and ample a manner and shall be construed in as wide a sense as
if each of the said paragraphs defined the objects of a separate, distinct and
independent company.
4. The liability of the members is limited.
5. The capital of the company is (pounds) 1,000 divided into 1,000 shares
of (pounds) 1 each, with power to divide the shares in the capital for the time
being into several classes, and to attach thereto respectively any preferential,
deferred, qualified, or special rights, privileges, conditions or restrictions
and to modify or deal with in the manner mentioned in Clause 25 of the
accompanying Articles of Association but not otherwise, any rights for the time
being attached to any class or classes of shares in the company so that Clause
25 of the said Articles shall be deemed to be incorporated herein and have
effect accordingly.
WE, the several persons whose names and addresses are subscribed, are desirous
of being formed into a company, in pursuance of this Memorandum of Association,
and we respectively agree to take the number of shares in the capital of the
company set opposite our respective names.
<PAGE>
Exhibit 3.12
BAHAMA ISLANDS.
----------
The Companies Act.
----------
ARTICLES OF ASSOCIATION
OF
PARADISE ENTERPRISES LIMITED.
----------
Explanatory.
1. In these presents, unless there be something in the subject or context
inconsistent therewith:-
"The company" means the above-named company.
"The office" means the registered office for the time being of the
company.
"The register" means the register of members to be kept pursuant to
Section 22 of The Companies Act.
"The seal" means the common seal of the company.
"Month" means calendar month.
"In writing" and "written" mean and include words printed,
lithographed, represented or reproduced in any mode in a visible
form.
"The directors" means the directors for the time being of the company.
"Special resolution" and "extraordinary resolution" have the meanings
assigned thereto respectively by The Companies Act.
Words importing the singular number only include the plural number,
and vice versa.
Words importing the masculine gender only include the feminine gender.
Words importing persons include corporations.
2. In addition to the registered office of the company in the Colony, the
company may have an office for the transaction of business at any other place or
places.
Shares.
3. None of the funds of the company shall be employed in the purchase of,
or lent on, shares of the company.
<PAGE>
-2-
4. The business of the company may be commenced as soon after the
incorporation of the company as the directors shall think fit, and
notwithstanding that part only of the shares may have been allotted.
5. The shares shall be under the control of the directors who may allot or
otherwise dispose of the same to such persons, on such terms and conditions, and
at such times as the directors think fit.
6. Save as herein otherwise provided, the company shall be entitled to
treat the registered holder of any share as the absolute owner thereof, and
accordingly shall not, except as ordered by a court of competent jurisdiction,
or as by Act required, be bound to recognise any equitable or other claim to or
interest in such share on the part of any other person.
Certificates.
7. The certificates of title to shares shall be issued under the seal of
the company, and shall be signed by the President or the Vice-President, and
shall be countersigned by the Secretary or some other person appointed by the
directors.
8. Every member shall be entitled to one certificate for the shares
registered in his name, or to several certificates each for one or more of such
shares, and every certificate of shares shall specify the number and the
denoting numbers of the shares in respect of which it is issued, and the amount
paid up thereon.
9. If any certificate be worn out or defaced, then upon production thereof
to the directors, they may order the same to be cancelled, and may issue a new
certificate in lieu thereof; and if any certificate be lost or destroyed, then,
upon proof thereof to the satisfaction of the directors, and on such indemnity
as the directors deem adequate being given, a new certificate in lieu thereof
shall be given to the party entitled to such lost or destroyed certificate.
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Company's Lien on Shares.
10. The company shall have a first and paramount lien upon all the shares
registered in the name of each member, and upon the proceeds of sale thereof,
for his debts, liabilities, and engagements, solely or jointly with any other
person, to or with the company whether the period for the payment, fulfillment,
or discharge thereof shall have actually arrived or not, and no equitable
interest in any share shall be created except upon the footing and condition
that Article 6 hereof is to have full effect. And such lien shall extend to all
dividends from time to time declared in respect of such shares. Unless otherwise
agreed, the registration of a transfer of shares shall operate as a waiver of
the company's lien, if any, on such shares.
11. For the purpose of enforcing such lien, the directors may sell the
shares subject thereto in such manner as they think fit, but no sale shall be
made until such period as aforesaid shall have arrived, and until notice in
writing of the intention to sell shall have been served on such member or his
personal representatives, and default shall have been made by him or them in the
payment, fulfillment, or discharge of such debts, liabilities, or engagements
for seven days after such notice.
12. The net proceeds of any such sale after payment of the costs of such
sale shall be applied in or towards satisfaction of the debts, liabilities, or
engagements of such member and the residue (if any) paid to him, his personal
representatives or assigns.
13. Upon any sale for enforcing a lien in purported exercise of the powers
hereinbefore given, the directors may cause the purchaser's name to be entered
in the register in respect of the shares sold, and the purchaser shall not be
bound to see to the regularity of the proceedings or to the application of the
purchase money, and after his name has been entered in the register in respect
of such shares the validity of the sale shall not be impeached by any person,
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and the remedy of any person aggrieved by the sale shall be in damages only and
against the company exclusively.
Transfer and Transmission.
14. The instrument of transfer of any share shall be signed by both the
transferor and the transferee, and the transferor shall be deemed to remain the
holder of such share until the name of the transferee is entered in the register
in respect thereof.
15. Shares in the company may be transferred in any form which the
directors may think fit to register.
16. The directors may decline to register a transfer of any share on which
the company has a lien. They may also decline to register a transfer of any
share to any person of whom they do not approve. And they may also decline to
register a transfer of any share without assigning any reason therefor.
17. Every instrument of transfer shall be left at the office for
registration, accompanied by the certificate of the shares to be transferred,
and such other evidence as the directors may require to prove the title of the
transferor or his right to transfer the shares.
18. The personal representatives of a deceased member (not being one of
several joint holders) shall be the only persons recognised by the company as
having any title to the shares registered in the name of such member, and in
case of the death of any one or more of the joint registered holders of any
registered share, the survivors shall be the only persons recognised by the
company as having any title to or interest in such shares.
19. Any person becoming entitled to shares in consequence of the death or
bankruptcy of any member, upon producing such evidence that he sustains the
character in respect of which he proposes to act under this Article, or of his
title, as the directors think sufficient, may be registered as a member in
respect of the shares, or may, subject to the regulations as to transfers
hereinbefore contained, transfer
<PAGE>
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such shares. The directors shall have the same right to refuse to register a
person entitled by transmission to any shares or his nominee, as if he were
the transferee named in an ordinary transfer presented for registration.
Alteration of Capital.
20. The company may, from time to time, by special resolution, increase the
capital by the creation of new shares of such amount as may be deemed expedient.
21. The new shares shall be issued upon such terms and conditions and with
such rights and privileges annexed thereto as the special resolution creating
the same shall direct, and if no direction be given, as the directors shall
determine, and in particular such shares may be issued with a preferential or
qualified right to dividends and in the distribution of assets of the company,
and with a special or without any right of voting.
22. If any difficulty shall arise in the apportionment of such new shares,
or any of them amongst the members, such difficulty shall, in the absence of
direction by the company, be determined by the directors.
23. Except so far as otherwise provided by the conditions of issue, or by
these presents, any capital raised by the creation of new shares shall be
considered part of the original capital, and shall be subject to the provisions
herein contained with reference to transfer and transmission, forfeiture, lien,
and otherwise.
24. The company may, from time to time, by special resolution, consolidate
its shares or any of them.
Variation of Rights
25. Whenever the capital of the company is divided into different classes
of shares, the special rights attached to any class may, subject to the
provisions of any Act, be varied or abrogated by special resolution, either with
the consent in writing of the holders of three-fourths of the issued shares of
the class, or with the sanction of an extraordinary resolution [illegible]
separate general meeting of such holders (but
<PAGE>
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not otherwise), and may be so varied or abrogated whilst the company is a going
concern or in contemplation of a winding up. To every such separate general
meeting all the provisions of these presents relating to general meetings of the
company, or to the proceedings thereat, shall mutatis mutandis apply, except
that the necessary quorum shall be two persons at least holding or representing
by proxy one-half [illegible] nominal amount of the issued shares of the class,
but to the [illegible] any adjourned meeting of such holders a quorum as above
defined is not present, those members who are present shall be a quorum as above
defined is not present, those members who are present shall be a quorum and that
any holder of shares in the class present in person or by proxy may demand a
poll, and that such holders shall on a poll have one vote for every share of the
class, held by them, respectively. The special rights conferred upon the holders
of any shares or class of shares shall not, unless otherwise expressly provided
by the terms of issue, be deemed to be modified by the creation or issue of
further shares ranking pari passu therewith.
Borrowing Powers.
26. The directors may, from time to time, at their discretion, raise or
borrow, or secure the payment of, any sum or sums of money for the purposes of
the company.
27. The directors may raise or secure the repayment of such sum or sums in
such manner and upon such terms and conditions in all respects as they think
fit, and, in particular, by the issue of bonds, perpetual or redeemable
debentures or debenture stock, or any mortgage, charge, or other security on the
undertaking or the whole or any part of the property of the company (both
present or future), inlcuding [illegible] capital for the time being.
General Meetings.
28. General meetings of the company may be held only within the Colony.
29. The first general meeting shall be held at such time (not being more
than four months after the registration of the
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company) as the directors may determine, and at the City of Nassau in the Island
of New Providence, or at such other place within the Colony as may be prescribed
by the directors.
30. Other general meetings shall be held once at least in every calendar
year at such time, not being more than fifteen months after the holding of the
last preceding general meeting, and at such place within the Colony as may be
determined by the directors. At these meetings the Annual Report of the
directors shall be presented, the directors elected for the ensuing year and the
general business of the company transacted. Such general meetings shall be
called "ordinary meetings", and all other meetings of the company shall be
called "extraordinary meetings".
31. The directors may, whenever they think fit, convene an extraordinary
meeting, and they shall, on the requisition of the holders of a majority in
value of the subscribed and issued shares of the company, forthwith proceed to
convene an extraordinary meeting of the company.
32. Seven days' notice, specifying the place, day and hour of the meeting,
and in case of special business, the general nature of such business shall be
given to the members in manner hereinafter mentioned; or in such other manner,
if any, as may be prescribed by the company in general meeting; but the
non-receipt of such notice by any member shall not invalidate the proceedings at
any meeting.
33. All business shall be deemed to be special that is transacted at an
extraordinary meeting, and all that is transacted at an ordinary meeting, with
the exception of sanctioning a dividend, the consideration of the accounts,
balance sheets, and the ordinary reports of the directors and auditors.
34. When all the members in person or by proxy sign the minutes of an
ordinary or extraordinary meeting, the same shall be deemed to have been duly
held, notwithstanding that the members have not actually come together or that
there may have been technical defects in the proceedings. And a resolution
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-8-
in writing in one or more parts, signed by all the members shall be as valid and
effectual as if it had been passed at a meeting of the members duly called and
constituted.
Proceedings at General Meetings.
35. No business shall be transacted at any general meeting unless a quorum
is present when the meeting proceeds to business except to take measures to
obtain a quorum.
36. A quorum shall consist of members present in person or by proxy holding
or representing a majority in value of the subscribed and issued shares of the
company.
37. The President or the Vice-President shall preside as Chairman at every
general meeting of the company. In their absence the members present shall
choose some one of their number to be Chairman.
38. The Chairman may, with the consent of the meeting, adjourn any meeting
from time to time, and from place to place, but no business shall be transacted
at any adjourned meeting other than the business left unfinished at the meeting
from which adjournment took place.
39. Every question submitted to a meeting shall be decided, in the first
instance, by a show of hands, and in the case of an equality of votes the
Chairman shall, both on a show of hands and on a poll have a casting vote, in
addition to the vote or votes to which he may be entitled as a member.
40. At any general meeting, unless a poll is demanded by the Chairman or by
members present in person or by proxy holding one-fourth in value of the
subscribed and issued shares of the Company, a declaration by the Chairman that
a resolution has been carried, or carried by a particular majority, or lost, or
not carried by a particular majority, and an entry to that effect in the books
of proceedings of the company, shall be conclusive evidence of the fact without
proof of the number or proportion of the votes recorded in favour of or against
such resolution.
41. If a poll is demanded as aforesaid, it shall be taken in such manner
and at such time and place as the Chairman of the meeting directs and either at
once, or after an interval or adjournment, or otherwise, and the results of the
poll shall
<PAGE>
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be deemed to be the resolution of the meeting at which the poll was
demanded. The demand for a poll may be withdrawn. In case of any dispute as to
the admission or rejection of a vote the Chairman shall determine the same, and
such determination made in good faith shall be final and conclusive.
Votes of Members.
42. On a show of hands every member present in person or by proxy shall
have one vote, and upon a poll every member present in person or by proxy shall
have one vote for every share held by him.
43. Votes may be given either personally or by proxy.
44. The instrument appointing a proxy shall be in writing, under the hand
of the appointor or of his attorney. Any person appointed a proxy need not be a
member of the company.
45. The instrument appointing a proxy shall be deposited with the Secretary
before or at the meeting for which it is to be used, and may be permanent or ad
hoc. If a proxy is permanent it may be recorded with the Secretary.
46. A vote given in accordance with the terms of an instrument of proxy
shall be valid notwithstanding the previous death of the principal, or
revocation of the proxy, or transfer of the share in respect of which the vote
is given, provided no intimation in writing of the death, revocation, or
transfer shall have been received before the meeting.
47. An instrument appointing a proxy may be in any form which the directors
think fit to approve.
Directors.
48. The directors of the company shall be elected at the first ordinary
meeting of the company after registration, and in every subsequent year at the
first ordinary meeting of the year. They shall be elected for a year but shall
hold office until their successors are duly elected or until the office is
vacated as provided by Article 50. The directors shall not be less than two, nor
more than seven in number. A director shall
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not require any qualification by way of holding any shares or other securities
of the company.
49. Until directors are elected, the persons hereinafter named shall be
deemed to be directors, that is to say:- Georgette Groves, Robert Stuart Keith
Gonsalves and Ronald George Gowlding.
50. The office of a director shall ipso facto be vacated:-
(a) if he becomes bankrupt, or suspends payment, or compounds with
his creditors;
(b) if he is found lunatic or becomes of unsound mind;
(c) if by notice in writing to the company, he resigns his office;
(d) if he is requested in writing by members holding or representing
more than one-half in value or the subscribed and issued shares
of the company to vacate his office.
But the continuing directors or sole remaining director may act notwithstanding
any vacancy in their body, but, if and so long as their number is reduced below
the number fixed by or pursuant to these Articles as the necessary quorum of
directors, the continuing directors or director may act for the purpose of
increasing the number of directors to that number, or of summoning a general
meeting of the company, but for no other purpose.
51. Any casual vacancy occurring in their body may at any time be filled up
by the directors or by the company in general meeting, but any person so chosen
shall retain office so long only as the vacating director would have retained
the same if no vacancy had occurred.
52. The directors or the company in general meeting shall have power at any
time, and from time to time, to appoint any qualified person as a director as an
addition to the board, but so that the total number of directors shall not at
any time exceed the maximum number fixed as above. But any director so appointed
shall hold office only until the next following ordinary general meeting of the
company, and shall then be eligible for re-election.
<PAGE>
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Alternate Directors
53. Any director may at any time appoint any person approved by the
directors to be an alternate director of the company, and may at any time remove
any alternate director so appointed by him. An alternate director so appointed
shall not be entitled to receive any remuneration from the company, nor be
required to hold any qualification but shall otherwise be subject to the
provisions of these presents with regard to directors. An alternate director
shall (subject to his giving to the company an address at which notices may be
served upon him) be entitled to receive notices of all meetings of the board,
and to attend and vote as a director at any such meeting at which the director
appointing him is not personally present, and generally to perform all the
functions of his appointor as a director in the absence of such appointor. An
alternate director shall ipso facto cease to be an alternate director if his
appointor ceases for any reason to be a director, provided that if any director
retires but is re-elected by the meeting at which such retirement took effect
any appointment made by him pursuant to this Article which was in force
immediately prior to his retirement shall continue to operate after his
re-election as if he had not so retired. All appointments and removals of
alternate directors shall be effected by writing under the hand of the director
making or revoking such appointment left at the office.
Director or Officer Contracting with Company.
54. No director or officer shall be disqualified by his office from
contracting and/or dealing with the company either as vendor, purchaser, or
otherwise, nor shall any such contract, or any contract or arrangement entered
into by or on behalf of the company in which any director or officer shall be in
any way interested, be avoided, nor shall any director or officer so contracting
or being so interested be liable to account to the company for any profit
realised by any such contract or arrangement by reason of such director or
officer holding that office or the fiduciary relation thereby established, but
it is declared that the nature of his interest must be disclosed by him at the
meeting of the directors, at which the contract or
<PAGE>
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arrangement is determined on, if his interest then exists, or in any other case
at the first meeting of the directors after the acquisition of his interest, and
having disclosed his interest as aforesaid such director shall be entitled to
vote as a director in respect of any contract or arrangement in which he is so
interested as aforesaid.
Remuneration of Directors.
55. The directors shall be paid out of the funds of the company by way of
remuneration for their services such sums as the company in general meeting may
from time to time determine, and such remuneration shall be divided among them
in such proportions and manner as the directors may determine, and in default of
such determination within the year equally. The directors shall also be paid
their travelling expenses (if any) of attending and returning from board and
committee meetings.
Proceedings of Directors.
56. Meetings of the directors shall be held only within the Colony. No
director or alternate director shall perform or be entitled to perform any of
the duties of or to act as a director except during such time as he shall
actually be in the Bahama Islands. Subject thereto the directors may meet
together at such place as they may determine for the dispatch of business,
adjourn, and otherwise regulate their meetings and proceedings as they think
fit, and may determine the quorum necessary for the transaction of business.
Until otherwise determined, two directors present in person shall be a quorum.
57. The President or any director may at any time convene a meeting of the
directors. Any director or alternate who is absent from the Island of New
Providence shall not during such absence be entitled to notice of any such
meeting. Questions arising at any meeting shall be decided by a majority of
votes, and in case of an equality of votes, the Chairman shall have a second or
casting vote.
58. A meeting of the directors for the time being at which a quorum is
present shall be competent to exercise all or any of the authorities, powers and
discretions by or under the regulations of the company for the time being vested
in or exercisable by the directors generally.
59. The President or the Vice-President shall preside at all
<PAGE>
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meetings of the directors. In the absence of the President and the
Vice-President the directors present shall choose some one of their number to be
Chairman of the meeting.
60. The directors may with the approval of not less than the number of
directors as may from time to time constitute a quorum delegate any of their
powers to committees consisting of such member or members of their body as they
think fit, and they may, from time to time, revoke such delegation or revoke the
appointment of and discharge any such committees either wholly or in part and
either as to persons or purposes; but every committee so formed, shall, in the
exercise of the powers so delegated, conform to any regulations that may from
time to time be imposed on it by the directors.
61. Each such committee may elect a Chairman of its meetings. If no such
Chairman is elected, or if at any meeting the Chairman is not present within ten
minutes after the time appointed for holding the same, the members present may
choose some one of their number to be Chairman of the meeting.
62. Each such committee may meet and adjourn as it thinks proper. Questions
arising at any meeting shall be determined by a majority of votes of the members
present, and in the case of an equality of votes the Chairman shall have a
second or casting vote.
63. All acts done at any meeting of the directors, or of a committee of
directors, or by any person acting as a director, shall, notwithstanding that it
shall afterwards be discovered that there was some defect in the appointment or
continuance in office of any such directors or person acting as aforesaid, or
that they or any of them were disqualified or had vacated office or were not
entitled to vote, be as valid as if every such person had been duly appointed or
had duly continued in office and was qualified and had continued to be a
director, and had been entitled to be a director.
64. When all the directors (in person or by their alternates) sign the
minutes of a meeting of the directors the same shall be deemed to have been duly
held notwithstanding that the directors have not actually come together or that
there may have been technical defects in the proceedings. And a resolution in
<PAGE>
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writing, in one or more parts, signed by all the directors shall be as valid and
effectual as if it had been passed at a meeting of the directors duly called and
constituted.
Powers of Directors.
65. The management of the business of the company shall be vested in the
directors, who, in addition to the powers and authorities by these presents or
otherwise expressly conferred upon them, may exercise all such powers and do all
such acts and things as may be exercised or done by the company and are not
hereby or by Act expressly directed or required to be exercised or done by the
company in general meeting, but subject nevertheless to the provisions of any
Act, and of these presents, and to any regulations from time to time made by the
company in general meeting, provided that no regulation so made shall invalidate
any prior act of the directors which would have been valid if such regulation
had not been made.
Local Management.
66. (1) The directors may, from time to time, provide for the management of
the affairs of the company abroad in such manner as they shall think fit, and
the provisions contained in the four next following paragraphs shall be without
prejudice to the general powers conferred by this paragraph.
(2) The directors may, from time to time, and at any time, establish
any local boards or agencies for managing any of the affairs of the company
abroad, and may appoint any persons to be members of such local board, or any
managers or agents, and may fix their remuneration.
(3) The directors may, from time to time, and at any time delegate to
any person so appointed any of the powers, authorities, and discretions for the
time being vested in the directors and may authorise the members for the time
being of any such local board, or any of them to fill up any vacancies therein,
and to act notwithstanding vacancies, and any such appointment or delegation may
be made on such terms and subject to such conditions as the directors may think
fit, and the directors may at any time remove any person so appointed, and
<PAGE>
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may annul or vary any such delegation.
(4) The directors may, at any time and from time to time, by power of
attorney under the seal, appoint any person or persons to be the attorney or
attorneys of the company for such purposes and with such powers, authorities and
discretions (not exceeding those vested in or exercisable by the directors under
these presents), and for such period and subject to such conditions as the
directors may from time to time think fit; and any such appointment may (if the
directors think fit) be made in favour of the members or any of the members of
any local board established as aforesaid, or in favour of any company, or of the
members, directors, nominees, or managers of any company or firm, or otherwise
in favour of any fluctuating body of persons, whether nominated directly or
indirectly by the directors; and any such power of attorney may contain such
provisions for the protection or convenience of persons dealing with such
attorney or attorneys as the directors think fit.
(5) Any such delegates or attorneys as aforesaid may be authorised by
the directors to sub-delegate all or any of the powers, authorities, and
discretions for the time being vested in them.
67. The company may exercise the powers conferred by the Companies Seals
Act of the Colony.
68. The directors may comply with the requirements of any foreign law which
in their opinion it shall in the interests of the company be necessary or
expedient to comply with.
Officers.
69. The officers of the company shall be elected annually by the company or
appointed annually by the directors, and shall consist of a President, a
Vice-President, a Secretary, a Treasurer, one or more Assistant Secretaries, and
one or more Assistant Treasurers, and such other officers as the company or the
directors may from time to time think necessary, and such other officers shall
perform such duties as may be prescribed by the directors. They shall hold
office until their successors are elected or appointed. But any officer may be
removed at any time by the company in general meeting or by the directors. If
any office becomes vacant during the year the company in general meeting or the
directors may fill the same for the unexpired term.
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70. Until officers are elected or appointed the persons hereinafter named
shall be deemed to be the officers of the company, that is to say:- Robert
Stuart Keith Gonsalves, President and Ronald George Gowlding, Vice President,
Secretary and Treasurer.
71. Any person may hold more than one of these offices, and no officer need
be a member of the company.
President.
72. The President shall act as Chairman of all meetings of the members and
of the directors. He shall also perform such other duties as may be prescribed
by these Articles, the company in general meeting, or the directors.
Vice-President.
73. The Vice-President in the absence or disability of the President, may
perform the duties and exercise the powers of the President, and shall perform
such other duties as may be prescribed by these Articles, the company in general
meeting, or the directors.
Treasurer.
74. The Treasurer shall perform such duties as may be prescribed by these
Articles, the company in general meeting, or the directors, and if and when
directed so to do by the company or the directors, shall keep full and accurate
accounts of the receipts and disbursements of the company in books belonging to
the company and shall render to the directors at regular meetings of the
directors, or whenever they may require it, a statement of the financial
condition of the company.
Assistant Treasurers.
75. Any one of the Assistant Treasurers, in the absence or disability of
the Treasurer, may perform the duties and exercise the powers of the Treasurer,
and each Assistant Treasurer shall perform such other duties as may be
prescribed by these Articles, the company in general meeting, or the directors.
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Secretary.
76. The Secretary shall attend and keep the minutes of the meetings of the
members and of the directors. He shall also summon meetings and keep such other
books and records of the company and the directors as may be required by the
company in general meeting, or the directors, and perform such other duties as
may be prescribed by these Articles, the company in general meeting, or the
directors.
Assistant Secretaries.
77. Any one of the Assistant Secretaries, in the absence or disability of
the Secretary, may perform the duties and exercise the powers of the Secretary,
and each Assistant Secretary shall perform such other duties as may be
prescribed by these Articles, the company in general meeting, or the directors.
The Seal.
78. The directors shall provide for the safe custody of the seal, and the
seal shall never be used except by the authority of a resolution of the
directors or a general meeting.
Authentication of Deeds and Documents.
79. All deeds executed on behalf of the company may be in such form and
contain such powers, provisos, conditions, covenants, clauses, and agreements as
the directors, or the company in general meeting, shall think fit, and, in
addition to being sealed with the seal, shall be signed by the President or the
Vice-President or such other person as the directors or the company in general
meeting shall from time to time appoint, and countersigned by the Secretary or
an Assistant Secretary or such other person as the directors or the company in
general meeting shall from time to time appoint.
Dividends.
80. The profits of the company shall be divisible among the members holding
shares in proportion to the capital paid up on such shares held by them
respectively.
<PAGE>
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81. The company in general meeting may declare a dividend to be paid to the
members according to their rights and interests in the profits, and may fix the
time for payment.
82. No dividend shall be payable except out of the profits of the company.
83. The directors may from time to time pay to the members such interim
dividends as in their judgment the position of the company justifies.
84. The directors may deduct from the dividends payable to any member all
such sums of money as may be due from him to the company.
85. Any one of several persons who are registered as the joint holders of
any share may give effectual receipts for all dividends and payments on account
of dividends in respect of such shares.
86. Unless otherwise directed any dividend may be paid by cheque or warrant
sent through the post to the registered address of the member entitled, or, in
the case of joint holders, to the registered address of that one whose name
stands first on the register in respect of the joint holding; and every cheque
or warrant so sent shall be made payable to the order of the person to whom it
is sent.
87. Notice of any dividend that may have been declared, whether interim or
otherwise, shall be given to each member either by advertisement or by notice in
manner hereinafter mentioned.
88. No dividend shall bear interest as against the company.
89. Any general meeting declaring a dividend may direct payment of such
dividend wholly or in part by the distribution of specific assets, and in
particular of paid-up shares, debentures or debenture stock of the company or
paid-up shares, debentures or debenture stock of any other company, or in any
one or more of such ways, and the directors shall give effect to such
resolutions; and, where any difficulty arises in regard to the distribution,
they may settle the same as they think expedient.
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Reserves.
90. The directors may, before recommending any dividend, set aside, out of
the profits of the company, such sums as they think proper as a reserve fund to
meet contingencies, or for equalising dividends, or for special dividends or
bonuses, or for repairing, improving, and maintaining any of the property of the
company, and for such other purposes as the directors shall in their absolute
discretion think conducive to the interests of the company; and may invest the
several sums so set aside upon such investments (other than shares of the
company) as they may think fit, and from time to time deal with and vary such
investments, and dispose of all or any part thereof for the benefit of the
company, and may divide the reserve fund into such special funds as they think
fit and employ the reserve fund or any part thereof in the business of the
company, and that without being bound to keep the same separate from the other
assets.
Capitalisation of Profits and Reserves.
91. The company in general meeting may, upon the recommendation of the
directors, resolve that it is desirable to capitalise any undivided profits of
the company not required for paying the dividends on any shares carrying a fixed
cumulative preferential dividend (including profits carried and standing to the
credit of any reserve or reserves or other special account), and accordingly
that the directors be authorised and directed to appropriate the profits
resolved to be capitalised to the members in the proportions in which such
profits would have been divisible amongst them had the same been applied in
paying dividends instead of being capitalised, and to apply such profits on
their behalf, either in or towards paying up the amounts, if any, for the time
being unpaid on any shares held by such members respectively, or in paying up in
full unissued shares, debentures, or securities of the company of a nominal
amount equal to such profits, such shares, debentures, or securities to
<PAGE>
-20-
be allotted and distributed, credited as fully paid up, to and amongst such
members in the proportion aforesaid or partly in one way and partly in the
other.
92. Whenever such a resolution as aforesaid shall have been passed, the
directors shall make all appropriations and applications of the undivided
profits resolved to be capitalised thereby, and all allotments and issues of
fully paid shares, debentures or securities, if any, and generally shall do all
acts and things required to give effect thereto, with full power to the
directors to make such provision by the issue of fractional certificates or by
payment in cash or otherwise as they think fit in the case of shares, debentures
or securities becoming distributable in fractions, and also to authorise any
person to enter on behalf of all the members interested into an agreement with
the company providing for the allotment to them respectively, credited as fully
paid up, of any further shares, debentures or securities to which they may be
entitled upon such capitalisation, or (as the case may require) for the payment
up by the company on their behalf, by the application thereto of their
respective proportions of the profits resolved to be capitalised, of the amounts
or any part of the amounts remaining unpaid on their existing shares, and any
agreement made under such authority shall be effective and binding on all such
members.
Accounts.
93. The directors shall cause true accounts to be kept of the
stock-in-trade of the company, of the sums of money received and expended by the
company, and the matters in respect of which such receipt and expenditures take
place; and of the assets, credits and liabilities of the company.
94. The books of account shall be kept at one of the offices of the
company, and subject to any reasonable restrictions as to the time and manner of
inspecting the same that may be imposed by the directors, shall be open to the
inspection of the members during hours of business.
<PAGE>
-21-
95. Once at the least in every year the directors shall, unless waived by a
resolution of the members in general meeting, lay before the company in general
meeting a statement of the income and expenditure for the past year, made up to
a date not more than six months before such meeting.
96. Unless waived by a resolution of the members in general meeting, a
balance sheet shall be made out in every year, and laid before the company in
general meeting, and such balance sheet shall contain a summary of the property
and liabilities of the company.
97. Unless waived by a resolution of the members in general meeting, the
directors shall make all necessary arrangements for an annual audit of the books
and accounts of the company.
Notices.
98. A notice may be served by the company upon any member either personally
or by sending it through the post in a prepaid envelope addressed to such member
at his last known address.
99. The signature to any such notice to be given by the company may be
written, typewritten, or printed.
100. Any notice, if served by post, shall be deemed to have been served at
the time when the envelope containing the same would be delivered in the
ordinary course of post; and in proving such service it shall be sufficient to
prove that the envelope containing the notice was property addressed, stamped
and posted.
101. Notice of meetings of members shall be given by the Secretary at least
seven days before the date of such meeting.
102. Notice of special meetings shall state the objects for which the
meeting is called.
103. Any member or director may waive the right to receive notices by an
instrument in writing signed by him before, at or after any meeting.
<PAGE>
-22-
Indemnity.
104. Every director, manager, auditor, president, vice-president,
secretary, treasurer, and other officer or servant of the company shall be
indemnified by the company against, and it shall be the duty of the directors
out of the funds of the company to pay all costs, losses and expenses which any
such officer or servant may incur or become liable to by reason of any contract
entered into, or act or thing done by him as such director, manager, auditor,
president, vice-president, secretary, treasurer, officer or servant as
aforesaid, or in any way in the discharge of his duties, including travelling
expenses.
IN WITNESS WHEREOF We the Subscribers to the Memorandum of Association have
hereunto subscribed our names this Twenty-third day of June, A.D., 1965.
/s/Lionel Levine
- -------------------------------
/s/B. M. Gamblin
- -------------------------------
/s/W. S. Pearce
- -------------------------------
/s/Irma F. Albury
- -------------------------------
/s/D. E. Duncombe
- -------------------------------
Signed by the Subscribers to the Memorandum of Association in the presence of:-
/s/F. E. Weech
<PAGE>
Exhibit 3.13
ISLAND HOTEL COMPANY LIMITED
At an Extraordinary General Meeting of the above-named Company held at the
Registered Office of the Company, One Millars Court, Nassau, Bahamas on the 15th
day of June, A.D., 1987 the sub-joined Special Resolutions were duly passed, and
at a subsequent Extraordinary General Meeting of the said Company held on the
29th day of June, A.D., 1987 the sub-joined Special Resolutions were duly
approved, ratified and confirmed.
RESOLVED that the capital of the Company expressed in (pounds)
Sterling being the lawful currency of the Commonwealth of the
Bahamas at the date of Incorporation of the Company by virtue of the
laws in that behalf enacted henceforth be expressed in the lawful
currency of the Commonwealth of the Bahamas as B$2,860 divided into
1,000 shares of B$2.86 par value, such shares to be designated as
Class "A" Shares.
RESOLVED FURTHER that the capital of the Company be increased to
B$8,860 divided into 1,000 Class "A" Shares of B$2.86 each and 6,000
Class "B" Shares of B$1.00 each by the creation of 6,000 shares
of B$1.00 to be designated as Class "B" Shares ranking in all
respects pari passu with the existing shares in the capital of the
Company.
I, J. Barrie Farrington, Assistant Secretary of Island Hotel Company
Limited, hereby certify that the foregoing is a true copy of the Special
Resolutions which were duly passed as Special Resolutions at a meeting of the
above-named Company held at the Registered Office of the Company, One Millars
Court, Nassau, Bahamas on the 15th day of June, A.D., 1987 at which meeting all
of the members of the Company for the time being entitled, according to the
regulations of the Company, to vote were present by proxy, and that the said
Special Resolutions were duly confirmed at a meeting of the above-named Company
held at the same place on the 29th day of June, A.D., 1987 at which said
meeting, all of the members of the Company for the time being entitled,
according to the regulations of the Company, to vote were present by proxy.
IN WITNESS THEREOF I have hereunto
set my hand and the Common Seal of
the Company this 29th day of June,
A.D., 1987.
(Sgd.) J.B. Farrington
Assistant Secretary
SEAL
- -------------------
REGISTRAR GENERAL'S
DEPARTMENT
DEC 17 1987
NASSAU, BAHAMAS
- -------------------
<PAGE>
- ---------------- ----------------
[ILLEGIBLE SEAL] [ILLEGIBLE SEAL]
- ---------------- ----------------
[illegible]
The Companies Act
Company Limited by Shares
- - -
MEMORANDUM OF ASSOCIATION
OF
ISLAND HOTEL COMPANY LIMITED
- - -
1. The name of the company is "Island Hotel Company Limited".
2. The registered office of the company will be situate in the Island of
New Providence one of the Bahama Islands.
3. The objects for which the company is established are:-
(1) To carry on the business of hotel, restaurant, cafe, tavern,
beer-house, refreshment-room, and lodging-house keepers,
licensed victuallers, wine, beer, and spirit merchants,
dealers in and importers of aerated, mineral, and artificial
waters and other drinks, purveyors, caterers for public and
private amusements generally, proprietors of motor and other
vehicles, garage proprietors, livery-stable keepers,
jobmasters, farmers, dairymen, ice merchants, importers and
brokers of food, live and dead stock, and produce of all
descriptions, hairdressers, perfumers, chemists, proprietors
of clubs, baths, dressing rooms, laundries, reading, writing
and newspaper rooms, libraries, grounds, and places of
amusement, recreation, sport, entertainment, and instruction
of all kinds and tobacco and cigar merchants.
(2) To purchase, take on lease or in exchange, or otherwise
acquire and to hold any lands and buildings either within or
without the Bahama Islands, and any estate or interest in and
any rights connected with, any such lands and buildings, and
to pay for the same in money or in the shares or other
securities of the company.
(3) To develop and turn to account any land acquired by or in
which the company is interested, and in
<PAGE>
(4) To plan, lay out, construct, execute, carry out, equip,
furnish, install, improve, develop, maintain, administer,
manage, supervise or control works and conveniences of all
kinds, and without prejudice to the generality of the
foregoing words. In particular hotels, apartment houses,
flats, houses, clubs, restaurants, shops, theatres,
cinemas, stadia, baths, swimming pools, marinas, yacht
basins and other facilities for the accommodation of yachts
and private pleasure craft, hospitals, clinics, schools,
places of worship, places of amusement, pleasure grounds,
race-tracks, golf courses and other facilities for sports,
parks, gardens, plantings of all kinds, reading rooms,
warehouses, sub-divisions, villages, townships, roads,
bridges, reservoirs, waterways, wharves, (illegible),
embankments, irrigations, dredgings, excavations,
reclamations, improvements, sewage disposal systems, drainage
systems, sanitary systems, water, gas, electric light,
telephone, telegraph, wireless and power supply works and
installations, and all other works and conveniences which the
company may think directly or indirectly conducive to those
objects, and to contribute or otherwise (illegible) or take
part in the planning, construction, laying out,
equipping, furnishing, installation, maintenance, development,
working, administration, management, supervision and control
thereof.
(5) To cater for public and private amusements of every
description and in particular, and without limiting
<PAGE>
(6) To carry on business as tourist and travel agents and
contractors, and to facilitate travelling, and to provide for
tourists and travellers, and to promote the provision of
conveniences of all kinds in the way of tickets, reservations
and arrangements for land, sea and air travel, hotel and
lodging accommodation, guides, the hiring of means of personal
and baggage transportation, safe deposits, inquiry bureaus and
otherwise.
(7) To undertake, manage, administer, control, give advice or
provide consulting services in connection with the erection,
construction, decoration, repair, cleansing and finishing of
buildings, erections, constructions and works of all kinds.
(8) To carry on the business of proprietors and operators of
apartment buildings, flats, maisonettes, dwelling houses, and
clubs in all branches, and for these purposes to improve land,
prepare building sites, and to construct, reconstruct, pull
down, alter, improve, decorate, finish and maintain
apartments, flats, maisonettes, dwelling houses, clubs,
buildings, works and conveniences of all kinds, and to lay out
roads, pleasure gardens and recreation grounds.
(9) To manage, lease (for any period), sell or otherwise, dispose
of lots, building sites, hotels, apartments, flats,
maisonettes, dwelling houses, clubs, and buildings, at such
rent and on such terms and conditions as the company shall
think fit, to collect rents and income, and to supply or cause
to be supplied to purchasers, tenants, occupiers, and others,
utility services, air-conditioning,
<PAGE>
(10) To purchase for investment or resale and to traffic in land
and other property of any tenure and any interest therein, and
to make advances upon the security of land or other property,
or any interest therein, and to deal in, traffic by way of
sale, lease, exchange, or otherwise with land and any other
property whether real or personal, and generally to carry on
the business of real estate agents and dealers in all its
branches.
(11) To carry on all or any of the following businesses, namely,
builders and contractors, civil engineering contractors,
excavators, dredgers, decorators, manufacturers and producers
of and dealers in building materials and requisites of all
kinds, machinery and general construction contractors,
sub-contractors, and hauliers, and without limiting the
generality of the foregoing words, to undertake, manage,
supervise, administer, control or give advice in connection
with the erection, construction,(??????) and furnishing of
buildings, erections, structures, and works of all kinds.
(12) To buy, lease, construct, build or otherwise acquire all
plant, machinery and equipment necessary or convenient to
carry the above objects or any of them (? ?)
<PAGE>
(13) To carry on business (ILLEGIBLE) financial, contracting and
other operations commonly carried on or undertaken by
capitalism, financiers, promoters, concessionaires, and
contractors, including the lending of money, either with or
without security, to such persons and on such terms and
conditions as the company may think fit.
(14) To subscribe for, conditionally or unconditionally to
underwrite, issue on commission or otherwise, to assume
liability under, acquire by purchase or otherwise and to hold,
either as principals or agents, and absolutely as owners, or
by way of collateral security, or otherwise, and to sell,
mortgage, pledge, convert, exchange, or otherwise, dispose of
or deal in the stock, shares, bonds, debentures, and other
securities or obligations of any government, municipal or
other authority, or any industrial, commercial, financial, or
other company, and to issue paid up shares or other securities
of the company in payment or part payment of the purchase
price of any stock, shares, bonds, debentures, or other
securities or obligations acquired by the company.
(15) To purchase or otherwise acquire, and to hold, sell, exchange,
lease, mortgage, pledge, charge, convert, turn to account,
dispose of, and deal with property and rights of all kinds,
and in particular mortgages, debentures, debenture stock,
stock, shares, bonds, patents, concessions, annuities,
policies, options, (illegible) gems and other minerals, goods,
wares and merchandise of all kinds, book debts, business
concerns and undertakings, and claims, privileges, and
chases in action of all kinds.
(16) To purchase, charter, hire, take in exchange, build, salvage,
repair, reconstruct, or otherwise acquire and [illegible] and
furniture, or any shares or interact in ships or vessels, and
also shares, stocks and securities of any companies possessed
of or interested in, any ships or vessels, and to maintain,
repair, improve, alter, sell, exchange, or let out to hire
or charter, or otherwise deal with and dispose of any such
ships, vessels or shares or securities as aforesaid.
(17) To employ the said ships or vessels in the conveyance of
passengers, mails, and cargo of all kinds between such ports
and places in any part of the world as may seem expedient, and
to tender for and acquire any postal or other subsidies.
(18) To carry on all or any of the businesses of ship owners,
airline operators, carriers by land, water and air,
warehousemen, wharfingers, barge owners, lightermen,
forwarding agents, cargo superintendents, stevedores, and
carters.
(19) To carry on business as brokers for the chartering, sale, and
purchase of ships of every description, freight contractors,
forwarding agents, tourist and passenger agents, managers of
ships of every description, and as insurance brokers and
agents.
(20) To adopt and carry into effect any Agreement whether made
before or after the incorporation of the company providing for
the management of ships owned or to be owned in order to
comply with the provisions of The Merchant Shipping Act 1894,
or any statutory modification thereof, or for the appointment
of chartering, insurance, or other agents.
(21) To employ as ships [illegible] and managing agent any person,
firm or company, whether limited or not, and that although he
or they may not be entitled to any share or interest in the
said ships or vessels or in the company.
(22) To carry on a guarantee business, and to give any guarantee
for the payment of money or for the
<PAGE>
performance of any obligation whether on behalf of the
company, or other person or corporation.
(23) To carry on a general real estate brokerage business, and to
act as agents and brokers for the purchase, sale, improvement,
and management of any property.
(24) To act as agents and brokers for any individual, company,
firm, or court of law, for the investment, loan, payment,
transmission, and collection of money, and to take, receive,
hold, transfer, and convey all property, real or personal,
which may be granted, conveyed, or committed to this company.
(25) To act as agents or attorneys for the transaction of any
business and the investment and collection of moneys, rents,
interests, dividends, mortgages, bonds, bills, notes, and
other securities.
(26) To advance, deposit, or lend money, securities, and property,
to or with such persons and on such terms as may seem
expedient, and to discount, buy, sell and deal in bills,
notes, warrants, coupons, and other negotiable or transferable
securities or documents.
(27) To promote, organize, manage, or develop, or to assist in the
promotion, organization, management, or development of any
company, syndicate, enterprise, or undertaking.
(28) To carry on any other business which may seem to the company
capable of being conveniently carried on in connection with
the above, or calculated directly or indirectly to enhance the
value of or render profitable any of the company's property or
rights.
(29) To acquire and undertake the whole or any part of the
business, property, and liabilities of any person or company
carrying on any business which this company is authorized to
carry on, or possessed of property suitable for the purposes
of this company.
(30) To take, or otherwise acquire, and hold shares in any other
company having objects altogether or in part similar to those
of this company, or carrying on
<PAGE>
any business capable of being [illegible] directly or
indirectly to [illegible].
(31) To promote any company or companies for the purpose of
acquiring all or any of the property and liabilities of this
company, or for any other purpose which may seem directly or
indirectly calculated to benefit this company.
(32) To sell or dispose of the undertaking of the company or any
part thereof for such consideration as the company may think
fit, and in particular for shares, debentures, bonds,
mortgages, or other securities of any other company having
objects altogether or in part similar to those of this
company.
(33) To enter into partnership or into any arrangement for sharing
profits, union of interests, co-operation, joint adventure,
reciprocal concession, or otherwise, with any person or
company carrying on or engaged in, or about to carry on or
engage in, or any business or transaction which this company
is authorized to carry on or engage in, or any business or
transaction capable of being conducted so as directly or
indirectly to benefit this company.
(34) To amalgamate with any other company having objects altogether
or in part similar to those of this company.
(35) To enter into any arrangements with any governments or
authorities, supreme, municipal, local, or otherwise, that may
seem conducive to the company's interests, or any of them, and
to obtain from any such government or authority any rights,
privileges, and concessions in which the company may think it
desirable to obtain, and to carry out, exercise, and to comply
with any such management, agents, privileges, and concessions.
(36) To obtain any provisional Order or Act of the Legislature and
to do any other act or thing for enabling the company to carry
any of its objects into effect, or for effecting any
modification of
<PAGE>
the company's constitution, or for [illegible] purpose which
may seem expedient, and to expose any proceedings or
applications which may seem calculated directly or indirectly
to protect the company's interests.
(37) To draw, make, accept, indorse, discount, execute, and issue
promissory notes, bills of exchange, bills of lading,
warrants, debentures, and other negotiable or transferable
instruments.
(38) To invest and deal with the moneys of the company not
immediately required upon such securities and in such manner
as may from time to time be determined.
(39) To lend money, either with or without security, generally to
such persons and on such terms as the company may think fit,
and in particular to customers and others having dealings with
the company.
(40) To borrow or raise or secure the payment of money in such
manner as the company shall think fit, and in particular by
the issue of debentures, or debenture stock, perpetual or
otherwise, charged upon all or any of the company's property
(both present and future), including its uncalled capital, and
to redeem or pay off such securities.
(41) To sell, improve, manage, develop, exchange, lease, mortgage,
dispose of, turn to account, or otherwise deal with, all or
any part of the property or rights of the company.
(42) To renumerate any person or company for services rendered, or
to be rendered, in placing or assisting to place or
guaranteeing the placing of any of the shares in the company's
capital, or any debentures or other securities of the company,
or in or about the formation or promotion of the company or
the conduct of its business.
(43) To adopt such means of making known the business of the
company as may seem expedient.
(44) To grant pensions, allowances, gratuities and bonuses to
directors, ex-directors, officers, ex-officers,
<PAGE>
employees or [illegible] dependents or connections of such
[illegible] and to establish and maintain or [illegible]
establishing and maintaining trusts, funds, [illegible]
(whether contributory or non-contributory) with a view to
providing pensions or other benefits for any such persons as
aforesaid, their dependents or connections, and to support or
subscribe to any charity, fund, or institution the support of
which may in the opinion of the directors be calculated
directly or indirectly to benefit the company or its
employees, and to institute and maintain any club or other
establishment or profit sharing scheme calculated to advance
the interests of the company, its directors, officers or
employees.
(45) To pay for any rights or property acquired by the company, and
to remunerate any person or persons or body or bodies
corporate, either by cash payment, transfer of property, or by
the allotment of shares, debentures or other securities of the
company credited as paid up in full, in part or otherwise.
(46) Generally to do all such other acts and things as the company
may think incidental or conducive to the attainment of the
above objects or any of them.
(47) To procure the company to be registered or recognized in any
part of the world outside of the Bahama Islands.
(48) To do all or any of the above things in any part of the world,
and as principals, agents, contractors, trustees, agents or
otherwise, and either alone or in conjunction with others.
(49) To distribute any of the property of the company "in specie"
among the members.
And it is hereby declared that the word "company" in this clause, except where
used in reference to this company, shall be deemed
<PAGE>
to include any partnership or other body of persons whether corporate or
unincorporate, and whether domiciled in the Bahama Islands or elsewhere, and
that the objects specified in the different paragraphs of this clause shall,
except where otherwise expressed in such paragraphs, be in [illegible] limited
by reference to any other paragraph or the [illegible] of the company, but may
be carried out in as full and ample a manner and shall be construed in as wide a
sense as if each of the said paragraphs defined the objects of a separate,
distinct and independent company.
4. The liability of the members is limited.
5. The capital of the company is (pounds) 1,000 divided into 1,000 shares
of (pounds) 1 each with power to divide the shares in the capital for the time
being into different classes, and to attach thereto respectively any
preferential, deferred, qualified, or special rights, privileges, conditions or
restrictions and to modify or deal with in the manner mentioned in Clause 25 of
the accompanying Articles of Association but not otherwise, any rights for the
time being attached to any class or classes of shares in the company so that
Clause 25 of the said Articles shall be deemed to be incorporated herein and
have effect accordingly.
WE, the several persons whose names and addresses are subscribed, are desirous
of being formed into a company, in pursuance of this Memorandum of Association,
and we respectively agree to take the number of shares in the capital of the
company set opposite our respective names.
<PAGE>
Exhibit 3.14
BAHAMA ISLANDS.
----------
The Companies Act.
----------
ARTICLES OF ASSOCIATION
OF
ISLAND HOTEL COMPANY LIMITED.
----------
Explanatory.
1. In these presents, unless there be something in the subject or context
inconsistent therewith:-
"The company" means the above-named company.
"The office" means the registered office for the time being of the
company.
"The register" means the register of members to be kept pursuant to
Section 22 of The Companies Act.
"The seal" means the common seal of the company.
"Month" means calendar month.
"In writing" and "written" mean and include words printed,
lithographed, represented or reproduced in any mode in a visible
form.
"The directors" means the directors for the time being of the company.
"Special resolution" and "extraordinary resolution" have the meanings
assigned thereto respectively by The Companies Act.
Words importing the singular number only include the plural number,
and vice versa.
Words importing the masculine gender only include the feminine gender.
Words importing persons include corporations.
2. In addition to the registered office of the company in the Colony, the
company may have an office for the transaction of business at any other place or
places.
Shares.
3. None of the funds of the company shall be employed in the purchase of,
or lent on, shares of the company.
<PAGE>
-2-
4. The business of the company may be commenced as soon after the
incorporation of the company as the directors shall think fit, and
notwithstanding that part only of the shares may have been allotted.
5. The shares shall be under the control of the directors who may allot or
otherwise dispose of the same to such persons, on such terms and conditions, and
at such times as the directors think fit.
6. Save as herein otherwise provided, the company shall be entitled to
treat the registered holder of any share as the absolute owner thereof, and
accordingly shall not, except as ordered by a court of competent jurisdiction,
or as by Act required, be bound to recognise any equitable or other claim to or
interest in such share on the part of any other person.
Certificates.
7. The certificates of title to shares shall be issued under the seal of
the company, and shall be signed by the President or the Vice-President, and
shall be countersigned by the Secretary or some other person appointed by the
directors.
8. Every member shall be entitled to one certificate for the shares
registered in his name, or to several certificates each for one or more of such
shares, and every certificate of shares shall specify the number and the
denoting numbers of the shares in respect of which it is issued, and the amount
paid up thereon.
9. If any certificate be worn out or defaced, then upon production thereof
to the directors, they may order the same to be cancelled, and may issue a new
certificate in lieu thereof; and if any certificate be lost or destroyed, then,
upon proof thereof to the satisfaction of the directors, and on such indemnity
as the directors deem adequate being given, a new certificate in lieu thereof
shall be given to the party entitled to such lost or destroyed certificate.
<PAGE>
-3-
Company's Lien on Shares.
10. The company shall have a first and paramount lien upon all the shares
registered in the name of each member, and upon the proceeds of sale thereof,
for his debts, liabilities, and engagements, solely or jointly with any other
person, to or with the company whether the period for the payment, fulfilment,
or discharge thereof shall have actually arrived or not, and no equitable
interest in any share shall be created except upon the footing and condition
that Article 6 hereof is to have full effect. And such lien shall extend to all
dividends from time to time declared in respect of such shares. Unless otherwise
agreed, the registration of a transfer of shares shall operate as a waiver of
the company's lien, if any, on such shares.
11. For the purpose of enforcing such lien, the directors may sell the
shares subject thereto in such manner as they think fit, but no sale shall be
made until such period as aforesaid shall have arrived, and until notice in
writing of the intention to sell shall have been served on such member or his
personal representatives, and default shall have been made by him or them in the
payment, fulfilment, or discharge of such debts, liabilities, or engagements
for seven days after such notice.
12. The net proceeds of any such sale after payment of the costs of such
sale shall be applied in or towards satisfaction of the debts, liabilities, or
engagements of such member and the residue (if any) paid to him, his personal
representatives or assigns.
13. Upon any sale for enforcing a lien in purported exercise of the powers
hereinbefore given, the directors may cause the purchaser's name to be entered
in the register in respect of the shares sold, and the purchaser shall not be
bound to see to the regularity of the proceedings or to the application of the
purchase money, and after his name has been entered in the register in respect
of such shares the validity of the sale shall not be impeached by any person,
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and the remedy of any person aggrieved by the sale shall be in damages only and
against the company exclusively.
Transfer and Transmission.
14. The instrument of transfer of any share shall be signed by both the
transferor and the transferee, and the transferor shall be deemed to remain the
holder of such share until the name of the transferee is entered in the register
in respect thereof.
15. Shares in the company may be transferred in any form which the
directors may think fit to register.
16. The directors may decline to register a transfer of any share on which
the company has a lien. They may also decline to register a transfer of any
share to any person of whom they do not approve. And they may also decline to
register a transfer of any share without assigning any reason therefor.
17. Every instrument of transfer shall be left at the office for
registration, accompanied by the certificate of the shares to be transferred,
and such other evidence as the directors may require to prove the title of the
transferor or his right to transfer the shares.
18. The personal representatives of a deceased member (not being one of
several joint holders) shall be the only persons recognised by the company as
having any title to the shares registered in the name of such member, and in
case of the death of any one or more of the joint registered holders of any
registered share, the survivors shall be the only persons recognised by the
company as having any title to or interest in such shares.
19. Any person becoming entitled to shares in consequence of the death or
bankruptcy of any member, upon producing such evidence that he sustains the
character in respect of which he proposes to act under this Article, or of his
title, as the directors think sufficient, may be registered as a member in
respect of the shares, or may, subject to the regulations as to transfers
hereinbefore contained, transfer
<PAGE>
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such shares. The directors shall have the same right to refuse to register a
person entitled by transmission to any shares or his nominee, as if he were the
transferee named in an ordinary transfer presented for registration.
Alteration of Capital.
20. The company may, from time to time, by special resolution, increase the
capital by the creation of new shares of such amount as may be deemed expedient.
21. The new shares shall be issued upon such terms and conditions and with
such rights and privileges annexed thereto as the special resolution creating
the same shall direct, and if no direction be given, as the directors shall
determine, and in particular such shares may be issued with a preferential or
qualified right to dividends and in the distribution of assets of the company,
and with a special or without any right of voitng.
22. If any difficulty shall arise in the apportionment of such new shares,
or any of them amongst the members, such difficulty shall, in the absence of
direction by the company, be determined by the directors.
23. Except so far as otherwise provided by the conditions of issue, or by
these presents, any capital raised by the creation of new shares shall be
considered part of the original capital, and shall be subject to the provisions
herein contained with reference to transfer and transmission, forfeiture, lien,
and otherwise.
24. The company may, from time to time, by special resolution, consolidate
its shares or any of them.
Variation of Rights.
25. Whenever the capital of the company is divided into different classes
of shares, the special rights attached to any class may, subject to the
provisions of any Act, be varied or abrogated by special resolution, either with
the consent in writing of the holders of three-fourths of the issued shares of
the class, or with the sanction of an extraordinary resolution passed at a
separate general meeting of such holders (but
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not otherwise), and may be so varied or abrogated whilst the company is a going
concern or in contemplation of a winding up. To every such separate general
meeting all the provisions of these presents relating to general meetings of the
company, or to the proceedings thereat, shall mutatis mutandis apply, except
that the necessary quorum shall be two persons at least holding or representing
by proxy one-half in nominal amount of the issued shares of the class, but so
that if at any adjourned meeting of such holders a quorum as above defined is
not present, those members who are present shall be a quorum and that any holder
of shares in the class present in person or by proxy may demand a poll, and that
such holders shall on a poll have one vote for every share of the class held by
them respectively. The special rights conferred upon the holders of any shares
or class of shares shall not, unless otherwise expressly provided by the terms
of issue be deemed to be modified by the creation or issue of further shares
ranking pari passu therewith.
Borrowing Powers.
26. The directors may, from time to time, at their discretion, raise or
borrow, or secure the payment of, any sum or sums of money for the purposes of
the company.
27. The directors may raise or secure the repayment of such sum or sums in
such manner and upon such terms and conditions in all respects as they think
fit, and, in particular, by the issue of bonds, perpetual or redeemable
debentures or debenture stock, or any mortgage, charge, or other security on the
undertaking or the whole or any part of the property of the company (both
present or future), including its uncalled capital for the time being.
General Meetings.
28. General meetings of the company may be held anywhere in the world.
29. The first general meeting shall be held at such time (not being more
than four months after the registration of the
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company) as the directors may determine, and at the City of Nassau in the Island
of New Providence, or at such other place within the Colony as may be prescribed
by the directors.
30. Other general meetings shall be held once at least in every calendar
year at such time, not being more than fifteen months after the holding of
the last preceding general meeting, and at such place within or without the
Colony as may be determined by the directors. At these meetings the Annual
Report of the directors shall be presented, the directors elected for the
ensuing year and the general business of the company transacted. Such general
meetings shall be called "ordinary meetings", and all other meetings of the
company shall be called "extraordinary meetings".
31. The directors may, whenever they think fit, convene an extraordinary
meeting, and they shall, on the requisition of the holders of a majority in
value of the subscribed and issued shares of the company, forthwith proceed to
convene an extraordinary meeting of the company.
32. Seven days' notice, specifying the place, day and hour of the meeting,
and in case of special business, the general nature of such business shall be
given to the members in manner hereinafter mentioned; or in such other manner,
if any, as may be prescribed by the company in general meeting; but the
non-receipt of such notice by any member shall not invalidate the proceedings at
any meeting.
33. All business shall be deemed to be special that is transacted at an
extraordinary meeting, and all that is transacted at an ordinary meeting, with
the exception of sanctioning a dividend and the consideration of the accounts,
balance sheet, and the ordinary reports of the directors and auditors.
34. When all the members in person or by proxy sign the minutes of an
ordinary or extraordinary meeting, the same shall be deemed to have been duly
held, notwithstanding that the members have not actually come together or that
there may have been technical defects in the proceedings. And a resolution
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in writing in one or more parts, signed by all the members shall be as valid and
effectual as if it had been passed at a meeting of the members duly called and
constituted.
Proceedings at General Meetings.
35. No business shall be transacted at any general meeting unless a quorum
is present when the meeting proceeds to business except to take measures to
obtain a quorum.
36. A quorum shall consist of members present in person or by proxy holding
or representing a majority in value of the subscribed and issued shares of the
company.
37. The President or the Vice-President shall preside as Chairman at every
general meeting of the company. In their absence the members present shall
choose some one of their number to be Chairman.
38. The Chairman may, with the consent of the meeting, adjourn any meeting
from time to time, and from place to place, but no business shall be transacted
at any adjourned meeting other than the business left unfinished at the meeting
from which adjournment took place.
39. Every question submitted to a meeting shall be decided, in the first
instance, by a show of hands, and in the case of an equality of votes the
Chairman shall, both on a show of hands and on a poll, have a casting vote, in
addition to the vote or votes to which he may be entitled as a member.
40. At any general meeting, unless a poll is demanded by the Chairman or by
members present in person or by proxy holding one-fourth in value of the
subscribed and issued shares of the company, a declaration by the Chairman that
a resolution has been carried, or carried by a particular majority, or lost, or
not carried by a particular majority, and an entry to that effect in the books
of proceedings of the company, shall be conclusive evidence of the fact without
proof of the number or proportion of the votes recorded in favour of or against
such resolution.
41. If a poll is demanded as aforesaid, it shall be taken in such manner
and at such time and place as the Chairman of the meeting directs and either at
once, or after an interval or adjournment, or otherwise, and the results of the
poll shall
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be deemed to be the resolution of the meeting at which the poll was
demanded. The demand for a poll may be withdrawn. In case of any dispute as to
the admission or rejection of a vote, the Chairman shall determine the same, and
such determination made in good faith shall be final and conclusive.
Votes of Members.
42. On a show of hands every member present in person or by proxy shall
have one vote, and upon a poll every member present in person or by proxy shall
have one vote for every share held by him.
43. Votes may be given either personally or by proxy.
44. The instrument appointing a proxy shall be in writing, under the hand
of the appointor or of his attorney. Any person appointed a proxy need not be a
member of the company.
45. The instrument appointing a proxy shall be deposited with the Secretary
before or at the meeting for which it is to be used, and may be permanent or ad
hoc. If a proxy is permanent it may be recorded with the Secretary.
46. A vote given in accordance with the terms of an instrument of proxy
shall be valid notwithstanding the previous death of the principal or revocation
of the proxy, or transfer of the share in respect of which the vote is given,
provided no intimation in writing of the death, revocation, or transfer shall
have been received before the meeting.
47. An instrument appointing a proxy may be in any form which the directors
think fit to approve.
Directors.
48. The directors of the company shall be elected at the first ordinary
meeting of the company after registration, and in every subsequent year at the
first ordinary meeting of the year. They shall be elected for a year but shall
hold office until their successors are duly elected or until the office is
vacated as provided by Article 50. The directors shall not be less than two, nor
more than seven in number. A director shall
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not require any qualification by way of holding any shares or other securities
of the company.
49. Until directors are elected, the persons hereinafter named shall be
deemed to be directors, that is to say:- Noel Sawyer Roberts, Barbara Marian
Gamblin and Douglas Eugene Duncombe.
50. The office of a director shall ipso facto be vacated:-
(a) if he becomes bankrupt, or suspends payment, or compounds with
his creditors;
(b) if he is found lunatic or becomes of unsound mind;
(c) if by notice in writing to the company, he resigns his office;
(d) if he is requested in writing by members holding or representing
more than one-half in value or the subscribed and issued shares
of the company to vacate his office.
But the continuing directors or sole remaining director may act notwithstanding
any vacancy in their body, but, if and so long as their number is reduced below
the number fixed by or pursuant to these Articles as the necessary quorum of
directors, the continuing directors or director may act for the purpose of
increasing the number of directors to that number, or of summoning a general
meeting of the company, but for no other purpose.
51. Any casual vacancy occurring in their body may at any time be filled up
by the directors or by the company in general meeting, but any person so chosen
shall retain office so long only as the vacating director would have retained
the same if no vacancy had occurred.
52. The directors or the company in general meeting shall have power at any
time, and from time to time, to appoint any qualified person as a director as an
addition to the board, but so that the total number of directors shall not at
any time exceed the maximum number fixed as above. But any director so appointed
shall hold office only until the next following ordinary general meeting of the
company, and shall then be eligible for re-election.
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Alternate Directors.
53. Any director may at any time appoint any person approved by the
directors to be an alternate director of the company, and may at any time remove
any alternate director so appointed by him. An alternate director so appointed
shall not be entitled to receive any remuneration from the company, nor be
required to hold any qualification but shall otherwise be subject to the
provisions of these presents with regard to directors. An alternate director
shall (subject to his giving to the company an address at which notices may be
served upon him) be entitled to receive notices of all meetings of the board,
and to attend and vote as a director at any such meeting at which the director
appointing him is not personally present, and generally to perform all the
functions of his appointor as a director in the absence of such appointor. An
alternate director shall ipso facto cease to be an alternate director if his
appointor ceases for any reason to be a director, provided that if any director
retires but is re-elected by the meeting at which such retirement took effect
any appointment made by him pursuant to this Article which was in force
immediately prior to his retirement shall continue to operate after his
re-election as if he had not so retired. All appointments and removals of
alternate directors shall be effected by writing under the hand of the director
making or revoking such appointment left at the office.
Director or Officer Contracting with Company.
54. No director or officer shall be disqualified by his office from
contracting and/or dealing with the company either as vendor, purchaser, or
otherwise, nor shall any such contract, or any contract or arrangement entered
into by or on behalf of the company in which any director or officer shall be in
any way interested, be avoided, nor shall any director or officer so contracting
or being so interested be liable to account to the company for any profit
realised by any such contract or arrangement by reason of such director or
officer holding that office or the fiduciary relation thereby established, but
it is declared that the nature of his interest must be disclosed by him at the
meeting of the directors at which the contract or arrangement is determined on,
if his interest then exists, or
<PAGE>
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in any other case at the first meeting of the directors after the acquisition of
his interest, and having disclosed his interest as aforesaid such director shall
be entitled to vote as a director in respect of any contract or arrangement in
which he is so interested as aforesaid.
Remuneration of Directors.
55. The directors shall be paid out of the funds of the company by way of
remuneration for their services such sums as the company in general meeting may
from time to time determine, and such remuneration shall be divided among them
in such proportions and manner as the directors may determine, and in default of
such determination within the year equally. The directors shall also be paid
their travelling expenses (if any) of attending and returning from board and
committee meetings.
Proceedings of Directors.
56. The directors may meet together at such place as they may determine for
the dispatch of business, adjourn, and otherwise regulate their meetings and
proceedings as they think fit, and may determine the quorum necessary for the
transaction of business. Until otherwise determined, two directors present in
person or by their alternates shall be a quorum.
57. The President or any director may at any time convene a meeting of the
directors. Every director or alternate who is absent from the Island of New
Providence shall not during such absence be entitled to notice of any such
meeting. Questions arising at any meeting shall be decided by a majority of
votes, and in case of an equality of votes, the Chairman shall have a second or
casting vote.
58. A meeting of the directors for the time being at which a quorum is
present shall be competent to exercise all or any of the authorities, powers and
discretions by or under the regulations of the company for the time being vested
in or exercisable by the directors generally.
59. The President or the Vice-President shall preside at all
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meetings of the directors. In the absence of the President and the
Vice-President the directors present shall choose some one of their number to be
Chairman of the meeting.
60. The directors may with the approval of not less than the number of
directors as may from time to time constitute a quorum delegate any of their
powers to committees consisting of such member or members of their body as they
think fit, and they may, from time to time, revoke such delegation or revoke the
appointment of and discharge any such committees either wholly or in part and
either as to persons or purposes; but every committee so formed, shall, in the
exercise of the powers so delegated, conform to any regulations that may from
time to time be imposed on it by the directors.
61. Each such committee may elect a Chairman of its meetings. If no such
Chairman is elected, or if at any meeting the Chairman is not present within ten
minutes after the time appointed for holding the same, the members present may
choose some one of their number to be Chairman of the meeting.
62. Each such committee may meet and adjourn as it thinks proper. Questions
arising at any meeting shall be determined by a majority of votes of the members
present, and in the case of an equality of votes the Chairman shall have a
second or casting vote.
63. All acts done at any meeting of the directors, or of a committee of
directors, or by any person acting as a director, shall, notwithstanding that it
shall afterwards be discovered that there was some defect in the appointment or
continuance in office of any such directors or person acting as aforesaid, or
that they or any of them were disqualified or had vacated office, or were not
entitled to vote, be as valid as if every such person had been duly appointed or
had duly continued in office and was qualified and had continued to be a
director, and had been entitled to be a director.
64. When all the directors (in person or by their alternates) sign the
minutes of a meeting of the directors the same shall be deemed to have been duly
held notwithstanding that the directors have not actually come together or that
there may have been technical defects in the proceedings. And a resolution in
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writing, in one or more parts, signed by all the directors shall be as valid and
effectual as if it had been passed at a meeting of the directors duly called and
constituted.
Powers of Directors.
65. The management of the business of the company shall be vested in the
directors, who, in addition to the powers and authorities by these presents or
otherwise expressly conferred upon them, may exercise all such powers and do all
such acts and things as may be exercised or done by the company and are not
hereby or by Act expressly directed or required to be exercised or done by the
company in general meeting, but subject nevertheless to the provisions of any
Act, and of these presents, and to any regulations from time to time made by the
company in general meeting, provided that no regulation so made shall invalidate
any prior act of the directors which would have been valid if such regulation
had not been made.
Local Management.
66. (1) The directors may, from time to time, provide for the management of
the affairs of the company abroad in such manner as they shall think fit, and
the provisions contained in the four next following paragraphs shall be without
prejudice to the general powers conferred by this paragraph.
(2) The directors may, from time to time, and at any time, establish
any local boards or agencies for managing any of the affairs of the company
abroad, and may appoint any persons to be members of such local board, or any
managers or agents, and may fix their remuneration.
(3) The directors may, from time to time, and at any time delegate to
any person so appointed any of the powers, authorities, and discretions for the
time being vested in the directors and may authorise the members for the time
being of any such local board, or any of them to fill up any vacancies therein,
and to act notwithstanding vacancies, and any such appointment or delegation may
be made on such terms and subject to such conditions as the directors may think
fit, and the directors may at any time remove any person so appointed, and
<PAGE>
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may annul or vary any such delegation.
(4) The directors may, at any time and from time to time, by power of
attorney under the seal, appoint any person or persons to be the attorney or
attorneys of the company for such purposes and with such powers, authorities and
discretions (not exceeding those vested in or exercisable by the directors under
these presents), and for such period and subject to such conditions as the
directors may from time to time think fit; and any such appointment may (if the
directors think fit) be made in favour of the members or any of the members of
any local board established as aforesaid, or in favour of any company, or of the
members, directors, nominees, or managers of any company or firm, or otherwise
in favour of any fluctuating body of persons, whether nominated directly or
indirectly by the directors; and any such power of attorney may contain such
provisions for the protection or convenience of persons dealing with such
attorney or attorneys as the directors think fit.
(5) Any such delegates or attorneys as aforesaid may be authorised by
the directors to sub-delegate all or any of the powers, authorities, and
discretions for the time being vested in them.
67. The company may exercise the powers conferred by the Companies Seals
Act of the Colony.
68. The directors may comply with the requirements of any foreign law which
in their opinion it shall in the interests of the company be necessary or
expedient to comply with.
Officers.
69. The officers of the company shall be elected annually by the company or
appointed annually by the directors, and shall consist of a President, a
Vice-President, a Secretary, a Treasurer, one or more Assistant Secretaries, and
one or more Assistant Treasurers, and such other officers as the company or the
directors may from time to time think necessary, and such other officers shall
perform such duties as may be prescribed by the directors. They shall hold
office until their successors are elected or appointed. But any officer may be
removed at any time by the company in general meeting or by the directors. If
any office becomes vacant during the year the company in general meeting or the
directors may fill the same for the unexpired term.
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70. Until officers are elected or appointed the persons hereinafter named
shall be deemed to be the officers of the company, that is to say:- Noel Sawyer
Roberts, President, Barbara Marian Gamblin, Vice-President, and Douglas Eugene
Duncombe, Secretary and Treasurer.
71. Any person may hold more than one of these offices, and no officer need
be a member of the company.
President.
72. The President shall act as Chairman of all meetings of the members and
of the directors. He shall also perform such other duties as may be prescribed
by these Articles, the company in general meeting, or the directors.
Vice-President.
73. The Vice-President in the absence or disability of the President, may
perform the duties and exercise the powers of the President, and shall perform
such other duties as may be prescribed by these Articles, the company in general
meeting, or the directors.
Treasurer.
74. The Treasurer shall perform such duties as may be prescribed by these
Articles, the company in general meeting, or the directors, and if and when
directed so to do by the company or the directors, shall keep full and accurate
accounts of the receipts and disbursements of the company in books belonging to
the company and shall render to the directors at regular meetings of the
directors, or whenever they may require it, a statement of the financial
condition of the company.
Assistant Treasurers.
75. Any one of the Assistant Treasurers, in the absence or disability of
the Treasurer, may perform the duties and exercise the powers of the Treasurer,
and each Assistant Treasurer shall perform such other duties as may be
prescribed by these Articles, the company in general meeting, or the directors.
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Secretary.
76. The Secretary shall attend and keep the minutes of the meetings of the
members and of the directors. He shall also summon meetings and keep such other
books and records of the company and the directors as may be required by the
company in general meeting, or the directors, and perform such other duties as
may be prescribed by these Articles, the company in general meeting, or the
directors.
Assistant Secretaries.
77. Any one of the Assistant Secretaries, in the absence or disability of
the Secretary, may perform the duties and exercise the powers of the Secretary,
and each Assistant Secretary shall perform such other duties as may be
prescribed by these Articles, the company in general meeting, or the directors.
The Seal.
78. The directors shall provide for the safe custody of the seal, and the
seal shall never be used except by the authority of a resolution of the
directors or a general meeting.
Authentication of Deeds and Documents.
79. All deeds executed on behalf of the company may be in such form and
contain such powers, provisos, conditions, covenants, clauses, and agreements as
the directors, or the company in general meeting, shall think fit, and, in
addition to being sealed with the seal, shall be signed by the President or the
Vice-President or such other person as the directors or the company in general
meeting shall from time to time appoint, and countersigned by the Secretary or
an Assistant Secretary or such other person as the directors or the company in
general meeting shall from time to time appoint.
Dividends.
80. The profits of the company shall be divisible among the members holding
shares in proportion to the capital paid up on such shares held by them
respectively.
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81. The company in general meeting may declare a dividend to be paid to the
members according to their rights and interests in the profits, and may fix the
time for payment.
82. No dividend shall be payable except out of the profits of the company.
83. The directors may from time to time pay to the members such interim
dividends as in their judgment the position of the company justifies.
84. The directors may deduct from the dividends payable to any member all
such sums of money as may be due from him to the company.
85. Any one of several persons who are registered as the joint holders of
any share may give effectual receipts for all dividends and payments on account
of dividends in respect of such shares.
86. Unless otherwise directed any dividend may be paid by cheque or warrant
sent through the post to the registered address of the member entitled, or, in
the case of joint holders, to the registered address of that one whose name
stands first on the register in respect of the joint holding; and every cheque
or warrant so sent shall be made payable to the order of the person to whom it
is sent.
87. Notice of any dividend that may have been declared whether interim or
otherwise, shall be given to each member either by advertisement or by notice in
manner hereinafter mentioned.
88. No dividend shall bear interest as against the company.
89. Any general meeting declaring a dividend may direct payment of such
dividend wholly or in part by the distribution of specific assets, and in
particular of paid-up shares, debentures or debenture stock of the company or
paid-up shares, debentures or debenture stock of any other company, or in any
one or more of such ways, and the directors shall give effect to such
resolutions; and, where any difficulty arises in regard to the distribution,
they may settle the same as they think expedient.
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Reserves.
90. The directors may, before recommending any dividend, set aside, out of
the profits of the company, such sums as they think proper as a reserve fund to
meet contingencies, or for equalising dividends, or for special dividends or
bonuses, or for repairing, improving, and maintaining any of the property of the
company, and for such other purposes as the directors shall in their absolute
discretion think conducive to the interests of the company; and may invest the
several sums so set aside upon such investments (other than shares of the
company) as they may think fit, and from time to time deal with and vary such
investments, and dispose of all or any part thereof for the benefit of the
company, and may divide the reserve fund into such special funds as they think
fit and employ the reserve fund or any part thereof in the business of the
company, and that without being bound to keep the same separate from the other
assets.
Capitalisation of Profits and Reserves.
91. The company in general meeting may, upon the recommendation of the
directors, resolve that it is desirable to capitalise any undivided profits of
the company not required for paying the dividends on any shares carrying a fixed
cumulative preferential dividend (including profits carried and standing to the
credit of any reserve or reserves or other special account), and accordingly
that the directors be authorised and directed to appropriate the profits
resolved to be capitalised to the members in the proportions in which such
profits would have been divisible amongst them had the same been applied in
paying dividends instead of being capitalised, and to apply such profits on
their behalf, either in or towards paying up the amounts, if any, for the time
being unpaid on any shares held by such members respectively, or in paying up in
full unissued shares, debentures, or securities of the company of a nominal
amount equal to such profits, such shares, debentures, or securities to
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be alloted and distributed, credited as fully paid up, to and amongst such
members in the proportion aforesaid or partly in one way and partly in the
other.
92. Whenever such a resolution as aforesaid shall have been passed, the
directors shall make all appropriations and applications of the undivided
profits resolved to be capitalised thereby, and all allotments and issues of
fully paid shares, debentures or securities, if any, and generally shall do all
acts and things required to give effect thereto, with full power to the
directors to make such provision by the issue of fractional certificates or by
payment in cash or otherwise as they think fit in the case of shares, debentures
or securities becoming distributable in fractions, and also to authorise any
person to enter on behalf of all the members interested into an agreement with
the company providing for the allotment to them respectively, credited as fully
paid up, of any further shares, debentures or securities to which they may be
entitled upon such capitalisation, or (as the case may require) for the payment
up by the company on their behalf, by the application thereto of their
respective proportions of the profits resolved to be capitalised, of the amounts
or any part of the amounts remaining unpaid on their existing shares, and any
agreement made under such authority shall be effective and binding on all such
members.
Accounts.
93. The directors shall cause true accounts to be kept of the
stock-in-trade of the company, of the sums of money received and expended by the
company, and the matters in respect of which such receipt and expenditure take
place; and of the assets, credits and liabilities of the company.
94. The books of account shall be kept at one of the offices of the
company, and subject to any reasonable restrictions as to the time and manner of
inspecting the same that may be imposed by the directors, shall be open to the
inspection of the members during hours of business.
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95. Once at the least in every year the directors shall, unless waived by a
resolution of the members in general meeting, lay before the company in general
meeting a statement of the income and expenditure for the past year, made up to
a date not more than six months before such meeting.
96. Unless waived by a resolution of the members in general meeting, a
balance sheet shall be made out in every year, and laid before the company in
general meeting, and such balance sheet shall contain a summary of the property
and liabilities of the company.
97. Unless waived by a resolution of the members in general meeting, the
directors shall make all necessary arrangements for an annual audit of the books
and accounts of the company.
Notices.
98. A notice may be served by the company upon any member either personally
or by sending it through the post in a prepaid envelope addressed to such member
at his last known address.
99. The signature to any such notice to be given by the company may be
written, typewritten, or printed.
100. Any notice, if served by post, shall be deemed to have been served at
the time when the envelope containing the same would be delivered in the
ordinary course of post; and in proving such service it shall be sufficient to
prove that the envelope containing the notice was properly addressed, stamped
and posted.
101. Notice of meetings of members shall be given by the Secretary at least
seven days before the date of such meeting.
102. Notice of special meetings shall state the objects for which the
meeting is called.
103. Any member or director may waive the right to receive notices by an
instrument in writing signed by him before, at or after any meeting.
<PAGE>
-22-
Indemnity.
104. Every director, manager, auditor, president, vice-president,
secretary, treasurer, and other officer or servant of the company shall be
indemnified by the company against, and it shall be the duty of the directors
out of the funds of the company to pay all costs, losses and expenses which any
such officer or servant may incur or become liable to by reason of any contract
entered into, or act or thing done by him as such director, manager, auditor,
president, vice-president, secretary, treasurer, officer or servant as
aforesaid, or in any way in the discharge of his duties, including travelling
expenses.
IN WITNESS WHEREOF We the Subscribers to the Memorandum of Association have
hereunto subscribed our names this Sixth day of November, A.D., 1965.
/s/ N. S. Roberts
- -------------------------------
/s/ B. M. Gamblin
- -------------------------------
/s/ W. S. Pearce
- -------------------------------
/s/ Irma F. Albury
- -------------------------------
/s/ D. E. Duncombe
- -------------------------------
Signed by the Subscribers to the Memorandum of Association in the presence of:-
/s/F. E. Weech
<PAGE>
Exhibit 3.15
THE COMPANIES ACT
============================
Company Limited By Shares
============================
MEMORANDUM OF ASSOCIATION
OF
PARADISE BEACH INN LIMITED
============================
The name of the Company is: "PARADISE BEACH INN LIMITED".
The Registered Office of the Company will be situate in the Island of New
Providence within the Commonwealth of The Bahamas.
The Objects for which the Company is established are:-
(l) To carry on the business of hotel, restaurant, cafe, roadhouse, motel,
holiday camp, caravan site and apartment-house keepers.
(2) To fit up and furnish any property for the purpose of letting the same to
visitors or guests whether in single rooms, suites, chalets, caravans,
movable structures, cottages or otherwise.
(3) To buy, sell (both to persons residing on the company's premises and to
non-residents), import, produce, manufacture or otherwise deal in food and
food products, meat, groceries, fruits, confectionery wine, spirit, beer
and alcoholic beverages, tobacco, druggist supplies, beverages, linen,
furniture and furnishings and other articles required in the said
businesses.
(4) To appropriate any part or parts of the property
<PAGE>
-2-
of the company for the purpose of and to build or let shops, offices, and
other places of business and to use or lease any part of the property of
the company not required for the purposes aforesaid for any purpose for
which it may be conveniently used or let.
(5) To carry on the business of theatre ticket agents in all its branches.
(6) To carry on business as proprietors of restaurants, hotels, refreshment and
tea rooms, cafes and milk and snack bars, tavern, beer-house, and
lodging-house keepers, licensed victuallers, wine, beer, and spirit
merchants, brewers, maltsters, distillers, importers and manufacturers of
aerated, mineral and artificial waters and other drinks, and as caterers
and contractors in all their respective branches.
(7) To carry on business as bakers, confectioners, tobacconists, butchers,
fishmongers, dairymen, grocers, poulterers, greengrocers, farmers, ice
merchants and ice-cream manufacturers, and to manufacture, buy, sell,
refine, prepare, grow, import and deal in provisions of all kinds, both
wholesale and retail and whether solid or liquid.
(8) To establish and provide all kinds of facilities and attractions for
customers and others; and in particular, reading, writing and smoke rooms,
lockers and safe deposits, telephones, telegraphs, clubs, stores, shops and
lavatories.
(9) To carry on all or any of the businesses of dry cleaners, launderers,
dyers, tinters, bleachers, and laundry sundriesmen and the business of
repairing tailors and a valeting service; to dye,
<PAGE>
-3-
colour, bleach, size, wash, clean, dry, iron, press, disinfect, renovate,
waterproof, and prepare for use, all manner of fibrous substances, articles
of wearing apparel, household, domestic, or other linen, silk, cotton,
woollen and fibrous goods, clothing and fabrics of every description,
upholstery, carpets, furniture, and all other kinds of articles, domestic
or otherwise.
(10) To carry on all or any of the businesses of manufacturers and merchants of,
agents for, and dealers in chemicals, dyestuff, acids, soaps, scouring
powders, disinfectants, and dyeing, bleaching, cleaning, dressing,
finishing and other plant, machinery, and apparatus; and to manufacture,
buy, sell and deal in all materials, articles, and things capable of being
used for the purposes of the above-mentioned businesses or any of them, or
likely to be required by any of the customers of or persons dealing with
the company.
(11) To carry on all or any of the business of entertainment promoters, sports
promoters, artistes, managers and artistes' personal representatives in all
or any spheres of entertainment and sport.
(12) To provide on such terms as the company may deem expedient all or any of
the management, secretarial, advertising, publicity, accountancy, personal
and social facilities and services required or used in connection with
their professional engagements by artistes and others engaged in
theatrical, film, radio, television entertainment or sporting activities.
(13) To acquire copyrights, rights of production or presentation, licences and
privileges of any sort likely to be conducive to the objects of the
<PAGE>
-4-
(14) To employ persons to write, compose, or adapt plays, films, radio and
television productions, sketches, songs, music and dances.
(15) To print, publish, or cause to be printed or published any play, film, song
music or words of which the company has a copyright or right to publish and
to sell and distribute and deal with any matter so printed as the company
may think fit and to grant licences or rights in respect of any property of
the company or any other person or persons firm or company.
(16) To enter into agreements with authors or other persons for the presentation
of films, radio and television productions, musical compositions, plays,
and other dramatic and musical entertainments in the Commonwealth of The
Bahamas and elsewhere as well as for the foreign and commonwealth rights.
(17) To carry on the business or businesses of music printers, copyists,
engravers, lithographers, publishers, arrangers, booksellers, bookbinders,
publishers' remaindermen, scenic artists, art decorators, contractors for
the supply of scenery and the erection and fitting up of temporary or
permanent stages, theatres or halls.
(18) To carry on the business or businesses of literary, theatrical,
advertising, publicity, press and employment agents and to undertake and
execute any agency or agencies, and in particular for authors, dramatists,
composers, actors, musicians, singers, entertainers, theatre proprietors
and managers, film and television producers or others, as may be thought
desirable.
(19) To carry on the business or businesses of producers and presenters of and
dealers in plays, revues,
<PAGE>
-5-
opera, ballet, pantomimes, pageants, musical and dramatic works, and
amusements and entertainments of all kinds in connection with the theatre,
cinema, ice rinks, variety stage, music halls, radio, television, and other
means of transmitting sound or pictorial effects, and to enter into any
arrangements for the management, conduct, control and carrying on of any
such business or businesses, and for the supply of plays, opera and ballet
works, arrangements, dances, ensembles, scripts, librettos, music,
artistes, performers, musicians, materials and all other things connected
therewith.
(20) To carry on the business or businesses of proprietors, lessees, licensees
and managers of theatres, cinemas, ice rinks, studios and other buildings
and property, and to let and sub-let accommodation therein and to provide
for the tenants, hirers and users thereof, upon such terms as may seem to
the company expedient, all or any of the machinery, equipment, power, light
heat, gas, chattels, effects, raw and other materials, facilities and
conveniences necessary or desirable for the purpose to which any such
buildings or property or any part thereof may for the time being and from
time to time be used by such tenants, hirers and users thereof.
(21) To acquire and deal with the property following:
(a) The business property and liabilities of any company, firm, or persons
carrying on any business within the objects of this company;
(b) Lands, buildings, easements, and other interests in real estate;
(c) Plant, machinery, personal estate and effects;
<PAGE>
-6-
(d) Patents, patent rights or inventions, copyrights, designs, trademarks
or secret processes;
(e) Shares or stock or securities in or of any company or undertaking the
acquisition of which may promote or advance the interest of this
company;
(22) To perform or do all or any of the following operations acts or things:
(a) To pay all the costs charges and expenses of the promotion and
establishment of the company;
(b) To sell, let, dispose of or grant rights over all or any property of
the company;
(c) To erect buildings, plant and machinery for the purposes of the
company;
(d) To make experiments in connection with any business of the company and
to protect any inventions of the company by letters patent or
otherwise;
(e) To grant licences to use patents, patent rights or inventions,
copyrights, designs, trademarks, or secret processes of the company;
(f) To manufacture plant, machinery, tools, goods and things for any of
the purposes of the business of the company;
(g) To draw accept and negotiate bills of exchange, promissory notes, and
other negotiable instruments;
(h) To underwrite the shares, stocks or securities of any other company
and to pay underwriting commissions and brokerage
<PAGE>
-7-
on any shares, stock or securities issued by this company;
(i) To borrow money or to receive money on deposit either without security
or secured by debentures, debenture stock (perpetual or terminable),
mortgage, or other security charged on the undertaking or on all or
any of the assets of the company, including uncalled capital;
(j) To lend money, with or without security, and to invest money of the
company in such manner (other than in the shares of this company) as
the directors think fit;
(k) To enter into arrangements for joint working in business or for
sharing profits, or for amalgamation with any other company, firm or
person carrying on business within the objects of this company;
(l) To promote companies;
(m) To sell the undertaking and all or any of the property of the company
for cash, or stock, shares, or securities of any other company, or for
other consideration;
(n) To provide for the welfare of persons employed or formerly employed by
the company, or any predecessors in business of the company, and the
wives, widows, and families of such persons by grants of money
pensions or other aid or otherwise as the company shall think fit;
(o) To subscribe to, or otherwise aid, benevolent, charitable, national or
other institutions, or objects of a public character, or which have
any moral or other claims to support or aid the company by reason of
the nature or the locality of its operations or otherwise;
<PAGE>
-8-
(p) To distribute in specie assets of the company properly distributable
amongst its members;
(23) To do all or any of the things hereinbefore authorised either alone, or in
conjunction with, or by or through factors, trustees, or agents;
(24) To do all such other things as are incidental or which the company may
think conducive to the attainment of the above objects or any of them.
4. The liability of the members is limited.
5. The Share Capital of the Company is $5,000.00 divided into 5,000
shares of $1.00 each, with power to increase or reduce the said capital, and to
divide the shares in the capital for the time being, whether original or
increased, into several classes, and attach thereto respectively any
preferential, deferred, qualified, or special rights, privileges or conditions
whether as to voting or otherwise, and to modify or deal with in the manner
mentioned in Clause 28a of the accompanying Articles of Association but not
otherwise, any rights for the time being attached to any class or classes of
shares in the Company so that Clause 28a of the said Articles of Association
shall be deemed to be incorporated herein and have effect accordingly.
WE, the several persons whose names and addresses are subscribed, are desirous
of being formed into a company, in pursuance of this Memorandum of Association,
and we respectively agree to take the Number of Shares in the capital of the
company set opposite our respective names:-
<PAGE>
Exhibit 3.16
Bahama Islands
-----------------
Articles of Association
of
-----------------
PARADISE BEACH INN LIMITED
**************************
The Companies Act
Company limited by Shares
-----------------
1. In the interpretation of these presents, unless there be something in
the subject or context inconsistent therewith:
"the Act" means The Companies Act of the Bahamas as amended from time to
time;
"Special Resolution" and "Extraordinary Resolution" have the meanings
assigned thereto respectively by The Companies Act;
"the Directors" means the Directors for the time being;
"the Office" means the registered office for the time being of the Company;
"the Register" means the register of members to be kept pursuant to Section
Twenty-two of The Companies Act;
"month" means calendar month;
"in writing" and "written" include printing, lithography and other modes of
representing or reproducing words in a visible form. Words importing the
singular number only include the plural number and vice versa;
Words importing persons include corporations.
2. None of the funds of the Company shall be lent on or employed in the
purchase shares of the Company.
3. The business of the Company may be commenced as soon after the
incorporation of the Company as the Directors or the subscribers to the
Memorandum of Association shall think fit.
REGISTERED SHARES
4. The whole of the unissued shares of the Company for the time being shall
be under the control of the Directors who may allot or otherwise dispose of the
same to such persons on such terms and conditions and at such times as the
Directors think fit. Subject to the provisions of Section 30F of the Act, any
preference shares may be issued on the terms that they are, or at the option of
the Company are liable, to be redeemed on such terms and in such manner as the
Company before the issue of the shares may by Special Resolution determine.
5. Save as herein otherwise provided, the Company shall be entitled to
treat the registered holder of any share as the absolute owner thereof and
accordingly shall not, except as ordered by a Court of competent jurisdiction or
as by Act required, be bound to recognise any equitable or other claim to or
interest in such share on the part of any other person.
6. All the shares in the Company shall be numbered in regular series; and
every surrendered share shall continue to bear the number by which the same was
originally distinguished.
7. If several persons are registered as joint holders of any shares they
shall be severally as well as jointly liable for any liability in respect of
such shares, but the first named upon the Register shall, as regards service of
notices, be deemed the sole owner thereof. Any of such persons may give
effectual receipt for dividend.
8. For the purposes of the quorum, joint holders of any voting shares shall
be considered as one number.
9. The certificate of title to shares shall be issued under the seal of the
Company and signed by a Director or, if appointed, the President or a
Vice-President and counter-signed by the Secretary or some other person
appointed by the Directors.
10. Every member shall be entitled to one certificate for all the shares
registered in his name or to several certificates, each for one or more of such
shares. Every certificate of shares shall specify the number and denoting
numbers of the shares in respect of which it is issued and the amount paid up
thereon.
11. If any certificate be worn out or defaced then, upon production thereof
to the Directors, they may order the same to be cancelled and may issue a new
certificate in lieu thereof; and if any certificate be lost or destroyed then,
upon proof thereof to the satisfaction of the Directors and on such Indemnity as
the Directors may deem adequate being given, a new certificate in lieu thereof
shall be given to the parties entitled to such lost or destroyed certificate.
<PAGE>
2
12. The certificate of shares registered in the names of two or more
persons shall be delivered to the person first named on the Register.
TRANSFER OF REGISTERED SHARES
13. The instrument of transfer (which need not be under Seal) of any share
in the Company shall be executed by both the transferor and the transferee and
the transferor shall be deemed to remain a holder of such share until the name
of the transferee is entered in the Register in respect thereof.
14. Subject to such restrictions contained in these regulations as may be
applicable, any member may transfer all or any of his shares by instrument in
writing in any usual or common form or any other form which the Directors may
approve.
15. The Directors may decline to register any transfer of shares without
assigning any reason therefor.
16. No transfer shall be made to an infant or to a person of unsound mind.
17. The transfer books and the Register may be closed at such times and for
such periods as the Directors may from time to time determine.
18. Every instrument of transfer shall be left at the Office of the Company
for registration, accompanied by the certificate or certificates covering the
shares to be transferred and such other evidence as the Directors may require to
prove the title of the transferor or his right to transfer the shares.
TRANSMISSION OF REGISTERED SHARES
19. The legal representatives of a deceased member (not being one of
several joint holders) shall be the only persons recognised by the Company as
having any title to his shares and, in case of the death of any one or more of
the joint holders of any registered shares, the survivor or survivors shall be
the only person or persons recognised by the Company as having any title to or
interest in such shares.
20. Any person becoming entitled to any shares in consequence of the death
of any member or in any other way than by transfer may, with the consent of the
Directors and upon the production of such evidence as may from time to time be
required by the Directors, be registered as a member or, subject to the
provisions as to transfers hereinbefore contained, may transfer such shares to
some other person by executing to the latter an instrument of transfer.
SHARE WARRANTS
21. The Company, with respect to fully paid-up shares or stock, may issue
warrants (hereinafter called share warrants), stating that the bearer is
entitled to the shares or stock therein specified, and may provide by coupons or
otherwise for the payment of future dividends on the shares or stock included in
such warrants.
22. A share warrant shall entitle the bearer of such warrant to the shares
or stock specified in it and such shares or stock may be transferred by the
delivery of such share warrant.
23. The Directors may determine and from time to time vary the conditions
upon which share warrants shall be issued and, in particular, upon which a new
share warrant or coupon will be issued in the place of one worn out, defaced,
lost, or destroyed; upon which the bearer of a share warrant shall be entitled
to attend and vote at general meetings; and upon which a share warrant may be
surrendered and the name of the holder entered in the Register in respect of the
shares or stock therein specified. Subject to such conditions, and to these
presents, the bearer of a share warrant shall be a member to the full extent.
The holder of a share warrant shall be subject to the conditions for the time
being in force, whether made before or after the issue of such warrant.
INCREASE OF CAPITAL
24. The members may from time to time by Ordinary Resolution increase the
capital of the Company by the creation and issue of new shares of such amount as
may be deemed expedient.
25. The new shares shall be issued upon such terms and conditions and with
such rights and privileges annexed thereto as by the Ordinary Resolution
creating the same shall be directed and, if no direction be given, as the
Directors may determine and in particular such shares may be issued with a
preferential or qualified right to dividends and in the distribution of assets
of the Company and with a special or without any right of voting.
26. Subject to any direction to the contrary that may be given by the
meeting sanctioning the increase of capital, all new shares of whatever kind
shall be offered to the members in proportion to the existing shares held by
them and such offer shall be made by notice specifying the number of shares to
which the member is entitled and limiting a time within which the offer, if not
accepted, will be deemed to be declined and, after the expiration of such time
or on the receipt of an intimation from the member to whom such notice is given
that he declined to accept the shares so offered, the Directors may dispose of
the same in such manner as they think most beneficial to the Company.
27. Except so far as is otherwise provided by the conditions of issue or by
these presents, any capital raised by the creation and issue of new shares shall
be considered part of the original capital and shall be subject to the
provisions of these Articles herein contained.
<PAGE>
3
28. If, owing to an inequality in the number of new shares to be issued and
the number of shares held by members entitled to have the offer of such new
shares, any difficulty shall arise in the apportionment of such new shares, or
any of them, amongst the members, such difficulty shall, in the absence of
direction by the meeting sanctioning the increase of capital, be determined by
the Directors.
MODIFICATION OF RIGHTS
28(a) Whenever the capital, by reason of the issue of Preference shares or
otherwise, is divided into different classes of shares, all or any of the rights
and privileges attached to each class may be modified, commuted, affected,
abrogated or dealt with either with the consent in writing of the holders of a
majority in nominal value of the issued shares of the class, or the sanction of
an extraordinary resolution passed at a separate general meeting of the holders
of shares of that class. All the provisions hereinafter contained as to general
meetings, shall, mutatis mutandis, apply to every such meeting but so that the
Quorum thereof shall be members holding or representing by proxy one-tenth in
nominal value of the issued shares of the class, (provided that if any
adjourned meeting of such holders a quorum as above defined is not present those
members who are present in person or by proxy shall be a quorum) and that the
holders of shares of the class shall, on a poll, have one vote for every share
of the class held by them respectively. This Article is not to derogate from any
power the Company would have had if this Article were omitted.
ALTERATIONS OF CAPITAL
29. The members may by Ordinary Resolution
(a) consolidate and divide all or any of the share capital into shares of
larger amount than its existing shares;
(b) convert all or any of the paid-up shares into stock and re-convert that
stock into paid-up shares of any denomination;
(c) subdivide the shares or any of them into shares of smaller amount than
is fixed by the Memorandum of Association, so however that in the
subdivision the proportion between the amount paid and the amount (if any)
unpaid on each reduced share shall be the same as it was in the case of the
share from which the reduced share is derived; or
(d) cancel shares which at the date of the passing of the resolution in
that behalf have not been taken or agreed to be taken by any person and
diminish the amount of its share capital by the amount of the shares so
cancelled
and may by Special Resolution
(e) subject to confirmation by the Court reduce its share capital and any
capital redemption reserve fund in any manner and with and subject to any
incident authorised and consent required by Law.
BORROWING POWERS
30. The Directors may from time to time, at their discretion, raise or
borrow or secure the payment of any sum or sums of money for the purposes of the
Company.
31. The Directors may raise or secure the payment or repayment of such
money in such manner and upon such terms and conditions in all respects as they
think fit and in particular by the issue of bonds, mortgages, debentures or
debenture stock perpetual or otherwise, notes or other obligations of the
Company charged upon all or any part of the property of the Company (both
present and future).
32. Debentures, debenture stock and other securities may be made
assignable, free from any equities, between the Company and the person to whom
the same may be issued.
GENERAL MEETINGS OF MEMBERS
33. The first annual general meeting of the members shall be held at such
time (not being more than four months after the registration of the Company) as
the subscribers to the Memorandum of Association may determine in the City of
Nassau in the Island of New Providence or at such other place as may be
prescribed by the subscribers to the Company's Memorandum of Association.
34. Subsequent annual general meetings of the members shall be held in each
and every year at the Office of the Company or at such other place as may be
prescribed by the Directors. At these meetings inter alia the election of
Directors and the ordinary business of the Company shall be transacted.
35. All other meetings of the members of the Company shall be extraordinary
general meetings.
36. The Directors may, whenever they think fit, and they shall, upon
requisition made in writing by members owning not less than one-fifth of the
number of issued shares of the Company, convene an extraordinary general
meeting.
37. Any such requisition shall express the object of the meeting required
and shall be signed by the members making the same and shall be sent by post to
or delivered at the Office of the Company.
38. Upon the receipt of such requisition, the Directors shall forthwith
proceed to convene an extraordinary general meeting. If they do not proceed to
convene the same within twenty-one days from the date of the receipt of the
requisition, the requisitionists, or any other members being the owners of not
less than one-fifth in number of the issued shares of the Company, may
themselves convene a meeting at the Office of the Company or at such other place
as they may determine.
39. Seven days notice at the least of all meetings specifying the place,
the day and the hour of meeting and in case of special business the general
nature of such business shall be given to the members in manner hereinafter
mentioned or in such manner, if any, as may be prescribed by the members in
general meeting; but the non-receipt of such notice by any member shall not
invalidate the proceedings at any meeting.
40. General meetings of members, both annual and extraordinary, may be held
without previous notice if all members entitled to be present are present in
person or by proxy or waive notice of such meeting in writing.
41. All business that is transacted at an extraordinary general meeting and
all that is transacted at an annual general meeting, with the exception of the
sanctioning of a dividend, the consideration of the accounts, balance sheet, the
Annual Report of the Directors, the Auditors' Report, the election of Directors
and the fixing of their remuneration, the appointment of, and the fixing of the
remuneration of, the Auditors, shall be deemed to be special.
<PAGE>
4
42. When all members entitled to be present and vote sign either personally
or by proxy the minutes of an annual general or an extraordinary general
meeting, the same shall be deemed to have been duly held notwithstanding that
the members have not actually come together or that there may have been
technical defects in the proceedings and a resolution in writing signed by all
the members aforesaid shall be as valid and effectual as if it had been passed
at a meeting of the members duly called and constituted.
PROCEEDINGS AT GENERAL MEETINGS OF MEMBERS
43. No business shall be transacted at any general meeting of the members
unless a quorum is present. A quorum shall consist of two members, present in
person or by proxy, together holding or representing sixty per centum or more of
the issued voting capital of the Company.
44. If, within one hour from the time appointed for the meeting, a quorum
is not present, the meeting, if convened upon the requisition of members, shall
be dissolved; in any other case it shall stand adjourned to the same day in the
next week at the same time and place; and if at such adjourned meeting a quorum
is not present, those members who are present shall be a quorum and may transact
the business for which the meeting was called.
45. The Chairman of the Board of Directors, if any, shall preside as
Chairman at every meeting of the members or, if there is no such Chairman, the
Directors present shall elect one of their number to be Chairman of the meeting.
46. In the absence of the Chairman of the Board of Directors, if any, or if
no Director is present or no Director is willing to act as Chairman, the members
present shall choose one of their number to be Chairman.
47. The Chairman may, with the consent of the meeting, adjourn any meeting
from time to time and from place to place but no business shall be transacted at
any adjourned meeting other than the business left unfinished at the meeting
from which the adjournment took place.
48. Every question submitted to a meeting shall be decided in the first
instance by a show of hands and in the case of an equality of votes the Chairman
shall, both on a show of hands and at the poll, have a casting vote in addition
to the vote or votes to which he may be entitled as a member.
49. At any general meeting of the members unless a poll is demanded by a
member present in person or by proxy, a declaration by the Chairman that a
resolution has been carried and an entry to that effect in the book of
proceedings of the members shall be sufficient evidence of the fact, without
proof of the number or proportion of the votes recorded in favour of or against
such resolution.
50. If a poll is demanded it shall be taken in such manner as the Chairman
directs and the result of such poll shall be deemed to be the resolution of the
members.
VOTES OF MEMBERS
51. Every member holding voting shares shall either in person or by proxy
have one vote on a show of hands and on a poll shall have one vote for every
voting share held. Where a corporation, being a member, wishes to be present, it
must be represented by a proxy; such proxy shall be entitled to vote for such
corporation on a show of hands and also on a poll.
52. If any member is a lunatic or idiot, he may vote by any person
appointed by a Court of competent jurisdiction as his legal curator.
53. Votes may be given either personally or by permanent or ad hoc proxy.
54. If there be joint registered holders of any shares, the vote of the
senior who tenders a vote, whether in person or by proxy, shall be accepted to
the exclusion of the votes of the other joint holders, and for this purpose
seniority shall be determined by the order in which the names stand in the
Register in respect of the joint holding.
55. No member shall be entitled to be present or to vote on any question,
either personally or by proxy or as a proxy for another member, at any meeting
or upon a poll or be reckoned in a quorum, whilst any sum shall be due and
payable to the Company in respect of any of the shares of such member.
56. The instrument appointing a proxy shall be in writing under the hand of
the appointor or his attorney or, if such appointor is a corporation with a
Common Seal, under such Common Seal or, if such corporation has not by its
regulations any such Seal, then in such manner as may be acceptable to the
Directors. A proxy need not be a member of the Company.
57. The instrument appointing a proxy shall be deposited with the Secretary
before or at the meeting for which it is to be used and, if permanent, may be
recorded with the Secretary.
58. A vote given in accordance with the terms of an instrument of proxy
shall be valid notwithstanding the previous death of the principal or revocation
of the proxy or transfer of the shares in respect of which the vote is given,
provided no intimation in writing of the death, revocation or transfer shall
have been received before the meeting.
<PAGE>
5
59. An instrument appointing a proxy shall be in the following form or as
near thereto as circumstances admit:__
I, _____________________ of __________________ being a member of
__________________ hereby appoint __________________ of __________________ as my
proxy to vote for me and on my behalf at the (annual general or extraordinary
general as the case may be) meeting of the members to be held on the _______ day
of __________ and at any adjournment thereof.
As witness my hand this ___________ day of ___________
Signed by the said
OFFICERS
60. The Officers of the Company shall be appointed by the members in
general meeting or by the Directors and may consist of a President, one or more
Vice-Presidents, a Secretary and a Treasurer and such other officers as the
members or the Directors may, from time to time think necessary, and such other
officers shall perform such duties as may be prescribed by the Directors. They
shall hold office until their successors are appointed, but any officer may be
removed at any time by the members in general meeting or by the Directors. If
any office becomes vacant the members in general meeting or the Directors may
fill the same.
61. Any person may hold more than one of these offices and no officer need
be a member of the Company.
PRESIDENT
62. The President shall perform such duties as may be prescribed by these
Articles, the members in general meeting or the Directors.
VICE-PRESIDENT
63. A Vice-President, in the absence or disability of the President, may
perform the duties and exercise the powers of the President and shall perform
such other duties as may be prescribed by these Articles, the members in general
meeting or the Directors.
TREASURER
64. The Treasurer shall perform such duties as may be prescribed by these
Articles, the members in general meeting or the Directors and, if and when
directed so to do by the members in general meeting or the Directors, shall keep
full and accurate accounts of the receipts and disbursements of the Company and
shall render to the Directors at regular meetings of the Directors, or whenever
they may require it, a statement of the financial condition of the Company.
SECRETARY
65. The Secretary shall attend and keep the minutes of the meetings of the
members and of the Directors. He shall also summon meetings and keep such
other books and records of the Company and the Directors as may be required by
the members in general meeting or the Directors and perform such other duties as
may be prescribed by these Articles, the members in general meeting or the
Directors.
THE SEAL
66. The Directors shall provide for the safe custody of the Seal and the
Seal shall never be used except by the authority of the Directors or of a
Committee of the Directors authorised by the Directors for that purpose. Every
instrument to which the Seal is to be affixed shall be executed on behalf of the
Company by the President or a Vice President or a Director signing the same and
affixing thereto the Seal of the Company in the presence of the Secretary or
another Director or another Officer who shall sign the instrument as witness:
provided that in the case of certificates of title to shares the provisions of
Article 9 shall apply.
DIRECTORS
67. The first Directors shall be elected by the subscribers to the
Memorandum of Association, or by a majority of them, at the first general
meeting of the members of the Company after registration. At the annual general
meeting of the members to be held in each subsequent year, the Directors holding
office shall retire and the members shall elect Directors who shall hold office
until the next annual general meeting. The Directors shall be not less than
three nor more than seven in number.
68. A retiring Director shall be eligible for re-election.
69. A Director need not be a member of the Company and no shareholding
qualification shall be necessary to qualify a person as a Director.
70. The remuneration, if any, of the Directors shall from time to time be
determined by the members in general meeting and such remuneration shall be
deemed to accrue from day to day. The Directors may also be paid all travelling,
hotel and other expenses properly incurred in attending and travelling to and
returning from meetings of the Directors or of any committee of the Directors or
general meetings of the members or in connection with the business of the
Company.
<PAGE>
6
71. The office of a Director shall ipso facto be vacated:
(a) If he becomes bankrupt or suspends payment to or compounds with his
creditors;
(b) If he becomes lunatic or of unsound mind or all the other Directors
shall have unanimously resolved that he is physically or mentally
incapable of performing the functions of a Director.
(c) if by notice in writing to the Company he resigns his office;
(d) If he fails to make proper disclosure under the provisions of Article
76;
(e) if he is removed by Ordinary Resolution of the members.
72. The continuing Directors may act notwithstanding any vacancy in their
body. However, so long as their number is reduced below the number fixed by or
established pursuant to these Articles as the necessary quorum of Directors, the
continuing Director or Directors may act for the purposes of increasing the
number of Directors to the number necessary to constitute a quorum or to the
minimum number fixed by Article 67 or of summoning a general meeting of the
shareholders, but for no other purpose.
73. Any casual vacancy in the Board of Directors may at any time be filled
by the Directors but every person so chosen shall retain office so long only as
the vacating Director would have retained the same if no vacancy had occurred.
74. The Directors or the members in general meeting shall have power at any
time, and from time to time, to elect any person as a Director as an addition to
the Board but so that the total number of Directors shall not at any time exceed
the maximum number fixed as above.
ALTERNATE DIRECTORS
75. Any Director may at any time appoint any person approved by the
Directors to be an alternate Director of the Company and may at any time remove
any alternate Director so appointed by him. An alternate Director so appointed
shall not be entitled to receive any remuneration from the Company but shall
otherwise be subject to the provisions of these presents with regard to
Directors. An alternate Director shall (subject to his giving to the Company an
address at which notices may be served upon him) be entitled to receive notices
of all meetings of the Board and to attend and vote as a Director at any such
meeting at which the Director appointing him is not personally present and
generally to perform all the functions of his appointor as a Director in the
absence of such appointor. An alternate Director shall ipso facto cease to be an
alternate Director if his appointor ceases for any reason to be a Director,
provided that if any Director retires but is re-elected by the meeting at which
such retirement took effect any appointment made by him pursuant to this Article
which was in force immediately prior to this retirement shall continue to
operate after his re-election as if he had not so retired. All appointments and
removals of alternate Directors shall be effected by writing under the hand of
the Director making or revoking such appointment and lodged with the Secretary
at the Company's office.
DIRECTOR OR OFFICER CONTRACTING WITH COMPANY
76. No Director or Officer shall be disqualified by his office from
contracting and/or dealing with the Company as vendor, purchaser or otherwise;
nor shall any such contract or any contract or arrangement entered into by or on
behalf of the Company in which any Director or Officer shall be in any way
interested, be avoided; nor shall any Director or Officer so contracting or
being so interested be liable to account to the Company for any profit realised
by any such contract or arrangement by reason of such Director or Officer
holding that office or the fiduciary relationship thereby established, but it is
declared that the nature of his interest must be disclosed by him at the meeting
of the Directors at which the contract or arrangement is determined on, if his
interest then exists, or in any other case at the first meeting of the Directors
after the acquisition of his interest. A Director, having disclosed his interest
as aforesaid, shall be entitled to vote as a Director in respect of any contract
or arrangement in which he is so interested as aforesaid. Failure to make such
disclosure shall entail vacation of office under the provisions of Article 71.
MANAGING DIRECTOR
77. The members in general meeting or the Directors may from time to time
appoint one or more of the Directors to be a Managing Director or Managing
Directors of the Company either for a fixed term or without any limitation as to
the period for which he or they is or are to hold such office and may from time
to time remove or dismiss him or them from office and appoint another or others
in his or their place or places.
78. The remuneration of a Managing Director shall from time to time be
fixed by the Directors and may be by way of salary or commission or
participation in profits or by any or all of those modes.
79. The Directors may from time to time entrust to and confer upon a
Managing Director for the time being such of the powers exercisable under these
presents by the Directors as they think fit and may confer such powers for such
time and to be exercised for such objects and purposes and upon such terms and
conditions and with such restrictions as they think expedient; and they may
confer such powers either collaterally with, or to the exclusion of, and in
substitution for all or any of the powers of the Directors in that behalf; and
may from time to time revoke, withdraw or vary all or any of such powers.
<PAGE>
7
PROCEEDINGS OF DIRECTORS
80. The Directors may meet together for the dispatch of business, adjourn
and otherwise regulate their meetings and proceedings as they think fit and may
determine the quorum necessary for the transaction of business. Until otherwise
determined, two Directors shall be a quorum. It shall not be necessary to give
notice of a meeting of Directors to a Director who is not within the Bahama
Islands.
81. The Chairman of the Board of Directors, if any, shall preside at all
meetings of the Directors or, if there is no such Chairman, the Directors
present shall choose some one of their number to be the Chairman of the meeting.
In the absence of the Chairman of the Board of Directors, the Directors present
shall choose some one of their number to be Chairman of the meeting.
82. A meeting of the Directors for the time being at which a quorum is
present shall be competent to exercise all or any of the authorities. powers and
discretions by or under the regulations of the Company for the time being vested
in or exercisable by the Directors generally.
83. A Director may at any time convene a meeting of the Directors.
Questions arising at any meeting shall be decided by a majority of votes and in
case of an equality of votes the Chairman shall have a second or casting vote.
84. The Directors may delegate any of their powers to committees each
consisting of two or more members of their body as they think fit. Any committee
so formed shall, in the exercise of the powers so delegated, conform to any
regulations that may from time to time be made or imposed upon it by the
Directors.
85. The meetings and proceedings of any such committee shall be governed by
the provisions herein contained for regulating the meetings and proceedings of
the Directors, so far as the same are applicable thereto, and not superseded by
any regulations made by the Directors under the last preceding clause.
86. All acts done by any meeting of the Directors, or of a committee of
Directors or by any person acting as a Director, shall, notwithstanding that it
afterwards be discovered that there was some defect in the election of any such
Director or persons acting as aforesaid or that they or any of them were or was
disqualified, be as valid as though every such person had been duly elected and
was qualified to be a Director.
87. A resolution in writing signed by all the Directors shall be as valid
and effectual as if it had been passed at a meeting of the Directors duly called
and constituted.
88. If any Director, being willing, shall be called upon to perform extra
services or to make any special exertions in going or residing abroad or
otherwise for any of the purposes of the Company, the Company shall remunerate
the Director for so doing by a fixed sum or by percentage of profits or
otherwise as may be determined by the Directors, and such remuneration may be
either in addition to or in substitution for his share in the remuneration above
provided.
POWERS OF DIRECTORS
89. The management of the business of the Company shall be vested in the
Directors who, in addition to the powers and authorities by these presents or
otherwise expressly conferred upon them, may exercise all such powers and do all
such acts and things as may be exercised or done by the Company and are not
hereby or by Act expressly directed or required to be exercised or done by the
members in general meeting but subject nevertheless to the provisions of any Act
and of these presents and to any regulations from time to time made by the
members in general meeting, provided that no regulations so made shall
invalidate any prior act of the Directors which would have been valid if such
regulation had not been made.
90. Without prejudice to the general powers conferred by the last preceding
clause and the other powers conferred by these presents, it is hereby expressly
declared that the Directors shall have the following powers, that is to say:__
(1) To pay the costs, charges and expenses preliminary and incidental to
the promotion, formation, establishment and registration of the
Company;
(2) To purchase or otherwise acquire for the Company any property (real or
personal), rights or privileges which the Company is authorised to
acquire at such price and generally on such terms and conditions as
they think fit.
(3) To sell, exchange or otherwise for valuable consideration to dispose
of all or any of the property (real or personal) of the Company and to
sign, seal, execute and deliver conveyances, transfers and assignments
of any property so sold, exchanged or otherwise disposed of;
(4) At their discretion to pay for any property, rights or privileges
acquired by or services rendered to the Company either wholly or
partially in cash or in shares, bonds, debentures or other securities
of the Company; and any such shares shall be issued as fully paid up:
and any such bonds, debentures or other securities may be either
specifically charged upon all or any part of the property of the
Company or not so charged;
(5) To secure fulfilment of any contracts or engagements entered into by
the Company by mortgage or charge of all or any of the property of the
Company for the time being or in such other manner as they think fit;
(6) To institute, conduct, defend, compound or abandon any legal
proceedings by and against the Company or its officers or otherwise
concerning the affairs of the Company: and also to compound and allow
time for payment or satisfaction of any debts due and of any claims or
demands by or against the Company;
<PAGE>
8
(7) From time to time to provide for the management of the affairs of the
Company abroad in such manner as they think fit and in particular by
power of attorney under seal to appoint any persons to be attorneys or
agents of the Company with such powers (including power to
subdelegate) and upon such terms as may be thought fit.
(8) To invest and deal with any of the moneys of the Company not
immediately required for the purposes of the Company and upon such
securities and in such manner as they may think fit and from time to
time to vary or realise such investments;
(9) To enter into all such negotiations and contracts and rescind and vary
all such contracts and execute and do all such acts, deeds and things
in the name of and on behalf of the Company as they may consider
expedient for or in relation to any of the matters aforesaid or
otherwise for the purposes of the Company.
DIVIDENDS
91. Subject to the rights and interests of any other class of shareholder
that may be created, the profits of the Company shall be divisible among the
ordinary share holders in proportion to the capital paid up on the shares held
by them respectively.
92. The Directors may from time to time declare and pay the members
entitled thereto such interim dividends as appear to the Directors to be
justified by the profits of the Company.
93. The Directors may recommend, and with the sanction of and declaration
by the members in general meeting, pay a final dividend to the members entitled
thereto.
94. No dividend shall be payable except out of the profits of the Company.
95. No dividend shall bear interest as against the Company.
96. Unless otherwise directed, any dividend may be paid by cheque or
warrant or bank transfer order and in the case of a cheque or warrant may be
sent through the post to the registered address of the member entitled thereto
or, in the case of joint holders, to the registered address of that holder,
whose name stands first on the Register in respect of the joint holding, and
every cheque or warrant so sent shall be made payable to the order of the person
to whom it is sent.
RESERVES
97. The Directors may, before recommending any dividend, set aside out of
the profits of the Company such sums as they think proper as a reserve fund to
meet contingencies or for equalising dividends or for special dividends or
bonuses or the redemption of preference shares or for repairing, improving and
maintaining any of the property of the Company and for such other purposes as
the Directors shall in their absolute discretion think conducive to the
interests of the Company and may invest the several sums so set aside upon such
investments as they may think fit and from time to time deal with and vary such
investments and dispose of all or any part thereof for the benefit of the
Company and may divide the reserve fund into such special funds as they think
fit and employ the reserve fund or any part thereof in the business of the
Company and that without being bound to keep the same separate from the other
assets.
CAPITALISATION OF PROFITS AND RESERVES
98. The members in general meeting may, upon the recommendation of the
Directors, resolve by Ordinary Resolution that it is desirable to capitalise any
undivided profits of the Company not required for paying the dividends on any
shares carrying a fixed cumulative preferential dividend (including profits
carried and standing to the credit of any reserve or reserves or other special
account) and accordingly that the Directors be authorised and directed to
appropriate the profits resolved to be capitalised to the members in the
proportions in which such profits would have been divisible amongst them had the
same been applied in paying dividends instead of being capitalised and to apply
such profits on their behalf in paying up in full unissued shares, debentures or
securities of the Company of a nominal amount equal to such profits, such
shares, debentures or securities to be allotted and distributed, credited as
fully paid up, to and amongst such members in the proportion aforesaid or partly
in one way and partly in the other. Provided that the capital redemption reserve
fund may, for the purposes of this Article, only be applied in the paying up of
unissued shares to be issued to members as fully paid.
99. Whenever such a resolution as aforesaid shall have been passed, the
Directors shall make all appropriations and applications of the undivided
profits resolved to be capitalised thereby and all allotments and issues of
fully paid shares, debentures or securities, if any, and generally shall do all
acts and things required to give effect thereto with full power to the
Directors to make such provision by the issue of fractional certificates or by
payment in cash or otherwise as they think fit in the case of shares, debentures
or securities becoming distributable in fractions and also to authorise any
person to enter, on behalf of all the members interested, into an agreement with
the Company providing for the allotment to them respectively, credited as fully
paid up, at any further shares, debentures or securities to which they may be
entitled upon such capitalisation; and any agreement made under such authority
shall be effective and binding on all such members.
<PAGE>
9
ACCOUNTS
100. (1) The Directors shall cause true accounts of the receipts and
disbursements of cash and of the assets and liabilities of the Company to be
kept at the Office of the Company or at such other place as the Directors may
from time to time appoint and, subject to any reasonable restrictions as to the
time and manner of inspecting the same that may be imposed by the Directors,
such accounts shall be open to the inspection of the members during the hours of
business.
(2) Unless waived by an Ordinary Resolution of the members in general
meeting the Directors shall lay before the members in general meeting once in
every calendar year:__
(a) a Statement of Income and Expenditure for the past year, and
(b) a Balance Sheet containing a summary of the assets and
liabilities of the Company
both such Statement and Balance Sheet being made up to a date not more than six
months before such meeting; provided that no such Statement or Balance Sheet
need be so laid before the members until the annual general meeting of the
members following the first general meeting held by the subscribers to the
Memorandum of Association and such statement when so laid shall cover the total
period from the date of incorporation of the Company.
AUDIT
101. The Directors shall make all necessary arrangements for the audit from
time to time as they see fit of the books and accounts of the Company.
NOTICES
102. A notice may be served by the Company upon any member either
personally or by sending it through the post in a prepaid letter addressed to
such member at his registered address.
103. All notices directed to be given to the members shall, with respect to
any share to which persons are jointly entitled, be given to whichever of such
persons is named first on the Register; and the notice so given shall be
sufficient notice to all the holders of such shares.
104. The signature to any such notice to be given by the Company may be
written, typewritten or printed.
105. Any notice, if served by post, shall be deemed to have been served at
the time when in the ordinary course of post the letter containing the same
would be delivered; and in proving such notice it shall be sufficient to prove
that the letter containing the notice was properly addressed and put into the
post office.
106. Any member or Director may waive the right to receive notices by an
instrument in writing signed by him before, at or after any meeting.
INDEMNITY
107. Save and except so far as the provision of this Article shall be
avoided by any provision of the Act, the Directors, Secretary and other Officers
for the time being of the Company and the Trustees (if any) for the time being
acting in relation to any of the affairs of the Company and every one of them
and every one of their heirs, executors and administrators shall be indemnified
and secured harmless out of the assets and profits of the Company from and
against all actions, costs, charges, losses, damages and expenses which they or
any of them, their or any of their heirs, executors or administrators shall or
may incur or sustain by or by reason of any act done, concurred in or omitted in
or about the execution of their duty or supposed duty in their respective
offices or trusts except such (if any) as they shall incur or sustain through or
by their own wilful neglect or default respectively and none of them shall be
answerable for the acts, receipts or defaults of the other or others of them or
for joining in any receipt for the sake of conformity or for any bankers or
other person with whom any moneys or effects belonging to the Company shall or
may be lodged or deposited for safe custody or for the insufficiency or
deficiency of any security upon which any moneys of or belonging to the Company
shall be placed out or invested or for any other loss, misfortune or damage
which may happen in the execution of their respective offices or trusts or in
relation thereto except the same shall happen by or through their own wilful
neglect or default respectively.
<PAGE>
Exhibit 3.17
MEMORANDUM OF ASSOCIATION
OF
INTERFUND MANAGEMENT LIMITED
INDEX
CLAUSE PAGES
1 Name 1
2 Registered Office 1
3 Registered Agent 1
4 General Objects and Powers 1
5 Exclusions 1-2
6 Share Capital 2-3
7 Amendments 3
8 Definitions 4
<PAGE>
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE INTERNATIONAL BUSINESS COMPANIES ORDINANCE
(NO 8 of 1984)
MEMORANDUM OF ASSOCIATION
OF
INTERFUND MANAGEMENT LIMITED
1. NAME
The name of the company is Interfund Management Limited.
2. REGISTERED OFFICE
The Registered Office of the Company will be the offices of Trident Trust
Company (B.V.I.) Limited, P.O. Box 146, Road Town, Tortola, British
Virgin Islands or such other place within the British Virgin Islands as
the Company from time to time may determine by a resolution of directors.
3. REGISTERED AGENT
The Registered Agent of the Company will be Trident Trust Company (B.V.I.)
Limited or such other qualified person in the British Virgin Islands as
the Company from time to time may determine by a resolution of directors.
4. GENERAL OBJECTS AND POWERS
The object of the Company is to engage in any act or activity that is not
prohibited under any law for the time being in force in the British Virgin
Islands including, but not limited to the provision of Management
Services.
The Company shall have all such powers as are permitted by law for the
time being in force in the British Virgin Islands which are necessary or
conducive to the conduct, promotion or attainment of the object of the
Company.
5. EXCLUSIONS
5.1 The Company has no power to:
5.1.1 carry on business with persons resident in the British Virgin
Islands,
1
<PAGE>
5.1.2 own an interest in real property situate in the British Virgin
Islands, other than a lease referred to in paragraph 5.2.5 of
sub clause 5.2,
5.1.3 carry on banking business unless it is licenced to do so under
the Banking Act;
5.1.4 carry on business as an insurance or reinsurance company; or
5.1.5 carry on the business of providing the registered office for
companies.
5.2 For purposes of paragraph 5.1.1 of sub clause 5.1, the Company shall
not be treated as carrying on business with persons resident in the
British Virgin Islands if,
5.2.1 it makes or maintains deposits with a person carrying on
business within the British Virgin Islands,
5.2.2 it makes or maintains professional contact with solicitors,
barristers, accountants, bookkeepers, trust companies,
administration companies, investment advisers or other similar
persons carrying on business within the British Virgin
Islands,
5.2.3 it prepares or maintains books and records within the British
Virgin Islands,
5.2.4 it holds, within the British Virgin Islands, meetings of its
directors or members,
5.2.5 it holds a lease of property for use as an office from which
to communicate with members or where books and records of the
Company are prepared or maintained,
5.2.6 it holds shares, debt obligations or other securities in a
company incorporated under the International Business
Companies Ordinance or under the Companies Act, or
5.2.7 shares, debt obligations or other securities in the Company
are owned by any person resident in the British Virgin Islands
or by any company incorporated under the International
Business Companies Ordinance or under the Companies Act.
6. SHARE CAPITAL
6.1 CURRENCY
Shares in the Company shall be issued in the currency of The United
States of America.
<PAGE>
6.2 AUTHORISED CAPITAL
The authorised capital of the Company is US$50,000.00 divided into
50,000 shares of one dollar (US$1.00) par value each.
6.3 CLASSES OF SHARES
The shares shall be divided into such number of classes and series
as the directors shall by resolution from time to time determine and
until so divided shall comprise one class and series.
6.4 RIGHTS, QUALIFICATIONS OF SHARES
The directors shall by resolution have the power to issue any class
or series of shares that the company is authorised to issue in its
capital, original or increased, with or subject to any designations,
powers, preferences, rights, qualifications, limitations and
restrictions.
6.5 REGISTERED OR BEARER SHARES
6.5.1 The directors are authorised at their discretion to determine
by resolution whether shares are to be issued as registered
shares or as shares to bearer.
6.5.2 Shares issued as registered shares may be exchanged for shares
issued to bearer. Shares issued to bearer may be exchanged for
registered shares.
6.5.3 Notice to the holders of shares issued to bearer shall be sent
by prepaid registered post addressed to the addressee to which
the original bearer shares were despatched and notice to such
address shall constitute proper service upon the bearer of
such shares.
6.6 TRANSFER OF SHARES
Registered shares in the Company may be transferred subject to the
prior or subsequent approval of the Company as evidenced by a
resolution of directors or by a resolution of members.
7. AMENDMENTS
The Company may amend its Memorandum of Association and Articles of
Association in any way permitted by the Ordinance by a resolution of
members or a resolution of directors.
<PAGE>
8. DEFINITIONS
The meanings of words in this Memorandum of Association are as defined in
the Articles of Association annexed hereto.
We, the undersigned of the address stated below for the purpose of incorporating
an International Business Company under the laws of the British Virgin Islands
hereby subscribe our name to this Memorandum of Association the 27th day of
July, 1989 in the presence of the undersigned witness:
NAME AND ADDRESS SUBSCRIBER
OF WITNESS
/s/ Joyce Simon /s/ B. R. Goodman
Joyce Simon B.V.I. Company Formations Limited
c/o P.O. Box 146, P.O. Box 146,
Road Town, Tortola, Wickham's Cay 1,
British Virgin Islands. Road Town, Tortola,
British Virgin Islands.
<PAGE>
Exhibit 3.18
ARTICLES OF ASSOCIATION
OF
INTERFUND MANAGEMENT LIMITED
CLAUSE INDEX PAGES
1 Interpretation 1-3
2 Registered Shares 3-4
3 Bearer Shares 4-6
4 Shares, Authorised Capital and Capital 7-8
5 Transfer of Shares 8
6 Transmission of Shares 8-9
7 Reduction or Increase in Authorised 9-10
Capital or Capital
8 Meetings and Consents of Members 10-13
9 Directors 13-14
10 Powers of Directors 14-15
11 Proceedings of Directors 15-16
12 Officers 16-17
13 Conflict of Interest 17
14 Indemnification 17-18
15 Seal 18
16 Dividends 19-20
17 Accounts 20
18 Audit 20-21
19 Notices 21
20 Pension and Superannuation Funds 21
21 Arbitration 21-22
22 Voluntary Winding Up and Dissolution 22
23 Continuation 22
<PAGE>
TERRITORY OF THE BRITISH VIRGIN ISLANDS
THE INTERNATIONAL BUSINESS COMPANIES ORDINANCE
(NO 8 OF 1984)
ARTICLES OF ASSOCIATION OF
INTERFUND MANAGEMENT LIMITED
1. INTERPRETATION
In these Articles, if not inconsistent with the context, the words and
expressions standing in the first column of the following table shall bear the
meanings set opposite them respectively in the second column thereof.
Expressions: Meanings:
1.1 capital The sum of the aggregate par value of all outstanding
shares with par value of the Company and shares with par
value held by the Company as treasury shares plus
1.1.1 the aggregate of the amounts designated as capital
of all outstanding shares without par value of the
Company and shares without par value held by the
Company as treasury shares, and
1.1.2 the amounts as are from time to time transferred
from surplus to capital by a resolution of
directors.
1.2 member A person who holds shares in the Company.
1.3 person An individual, a corporation, a trust, the estate of a
deceased individual, a partnership or an unincorporated
association of persons.
1.4 resolution of 1.4.1 A resolution approved at a duly constituted
directors meeting of directors or of a committee of
directors of the company, by affirmative vote of a
simple majority or such larger majority as may be
specified in the Articles, of the directors
present at the meeting who voted and did not
abstain; or
1.4.2 a resolution consented to in writing by an
absolute majority, or such larger majority as may
be specified in the Articles, of all the directors
or of all the members of the committee, as the
case may be;
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1.4.3 where a director is given more than one vote in
any circumstances, he shall in the circumstances
be counted for the purposes of establishing
majorities by the number of votes he casts.
1.5 resolution of 1.5.1 A resolution approved at a duly constituted
members meeting of the members of the company by the
affirmative vote of
1.5.1.1 a simple majority, or such larger
majority as may be specified in the
Articles, of the votes of the shares
that were present at the meeting and
entitled to vote thereon and were voted
and did not abstain, or
1.5.1.2 a simple majority, or such larger
majority as may be specified in the
Articles, of the votes of each class or
series of shares which were present at
the meeting and entitled to vote thereon
as a class or series and were voted and
not abstained and of a simple majority,
or such larger majority as may be
specified in the Articles, of the votes
of the remaining shares entitled to vote
thereon that were present at the meeting
and were voted and not abstained; or
1.5.2 a resolution consented to in writing by
1.5.2.1 an absolute majority, or such larger
majority as may be specified in the
Articles, of the votes of shares
entitled to vote thereon, or
1.5.2.2 an absolute majority or such larger
majority as may be specified in the
Articles, of the votes of series of
shares entitled to vote thereon as a
class or series and of an absolute
majority, or such larger majority as may
be specified in the Articles, of the
votes of the remaining shares entitled
to vote thereon.
<PAGE>
1.6 securities Shares and debt obligations of every kind, and options,
warrants and rights to acquire shares, or debt
obligations.
1.7 surplus The excess, if any, at the time of the determination of
the total assets of the Company over the aggregate of
its total liabilities, as shown in its books of
accounts, plus the Company's capital.
1.8 the Memorandum The Memorandum of Association of the Company as
originally framed or as from time to time amended.
1.9 the Ordinance The International Business Companies Ordinance (No. 8 of
1984), as amended.
1.10 the Seal The Common Seal of the Company.
1.11 these Articles These Articles of Association as originally framed or as
from time to time amended.
1.12 treasury shares Shares in the Company that were previously issued but
were repurchased, redeemed or otherwise acquired by the
Company and not cancelled.
1.13 "Written" or any term of like import includes words typewritten, printed,
painted, engraved, lithographed, photographed or represented or reproduced
by any mode of representing or re-producing words in a visible form,
including telex, telegram, cable or other form of writing produced by
electronic communication.
1.14 Save as aforesaid any words or expressions defined in the Ordinance shall
bear the same meaning in these Articles.
1.15 Whenever the singular or plural number, or the masculine, feminine or
neuter gender is used in these Articles, it shall equally, where the
context admits, include the others.
1.16 A reference in these Articles to voting in relation to shares shall be
construed as a reference to voting by members holding the shares except
that it is the votes allocated to the shares that shall be counted and not
the number of members who actually voted and a reference to shares being
present at a meeting shall be given a corresponding construction.
1.17 A reference to money in these Articles is a reference to the currency of
The United States of America unless otherwise stated.
2. REGISTERED SHARES
2.1 The Company shall issue to every member holding registered shares in the
Company a certificate signed by a director or officer of the Company and
under the Seal specifying the share or shares held by him
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and the signature of the director or officer and the Seal may be a
facsimile.
2.2 Any member receiving a share certificate for registered shares shall
indemnify and hold the Company and its directors and officers harmless
from any loss or liability which it or they may incur by reason of the
wrongful or fraudulent use or representation made by any person by virtue
of the possession thereof. If a share certificate for registered shares is
worn out or lost it may be renewed on production of the worn out
certificate or on satisfactory proof of its loss together with such
indemnity as may be required by a resolution of directors.
2.3 If several persons are registered as joint holders of any shares, any one
of such persons may be given receipt for any dividend payable in respect
of such shares.
3. BEARER SHARES
3.1 Subject to a request for the issue of bearer shares and to the payment of
the appropriate consideration for the shares to be issued, the Company
may, to the extent authorized by the Memorandum, issue bearer shares to,
and at the expense of, such person as shall be specified in the request.
The Company may also upon receiving a request in writing accompanied by
the share certificate for the shares in question, exchange registered
shares for bearer shares or may exchange bearer shares for registered
shares. Such request served on the Company by the holder of bearer shares
shall specify the name and address of the person to be registered and
unless the request is delivered in person by the bearer shall be
authenticated as hereinafter provided. Such request served on the Company
by the holder of bearer shares shall also be accompanied by any coupons or
talons which at the date of such delivery have not become due for payment
of dividends or any other distribution by the Company to the holders of
such shares. Following such exchange the share certificate relating to the
exchanged shares shall be delivered as directed by the member requesting
the exchange.
3.2 Bearer share certificates shall be under the Seal and shall carry an
identifying number and state that the bearer is entitled to the shares
therein specified, and may provide by coupons, talons, or otherwise for
the payment of dividends or other monies on the shares included therein to
the address to which the bearer shares were originally sent.
3.3 Subject to the provisions of he Ordinance and of these Articles the bearer
of a bearer share certificate shall be deemed to be a member of the
Company and shall be entitled to the same rights and privileges as he
would have had if his name had been included in the share register of the
Company as the holder of the shares.
3.4 Subject to any specific provisions in these Articles, in order to
exercise his rights as a member of the Company, the bearer of a bearer
share certificate shall produce the bearer share certificate
<PAGE>
as evidence of his membership of the Company. Without prejudice to the
generality of the foregoing, the following rights may be exercised in the
following manner:
3.4.1 for the purpose of exercising his voting rights at a meeting, the
bearer of a bearer share certificate shall produce such certificate
to the chairman of the meeting;
3.4.2 for the purpose of exercising his vote on a resolution in writing,
the bearer of a bearer share certificate shall cause his signature
to any such resolution to be authenticated as hereinafter set forth;
3.4.3 for the purpose of requisitioning a meeting of members, the bearer
of a bearer share certificate shall address his requisition to the
directors and his signature thereon shall be duly authenticated as
hereinafter provided; and
3.4.4 for the purpose of receiving dividends, the bearer of the bearer
share certificate shall present at such places as may be designated
by the directors any coupons or talons issued for such purpose, or
shall present the bearer share certificate to any paying agent
authorised to pay dividends.
3.5 The signature of the bearer of a bearer share certificate shall be deemed
to be duly authenticated if the bearer of the bearer share certificate
shall produce such certificate to a notary public or a bank manager or a
director or officer of the Company (herein referred to as an "authorised
person") and if the authorised person shall endorse the document bearing
such signature with a statement
3.5.1 identifying the bearer share certificate produced to him by number
and date and specifying the number of shares and the class of shares
(if appropriate) comprised therein;
3.5.2 confirming that the signature of the bearer of the bearer share
certificate was subscribed in his presence and that if the bearer is
representing a body corporate he has so acknowledged and has
produced satisfactory evidence thereof; and
3.5.3 specifying the capacity in which he is qualified as an authorised
person and, if a notary public, affixing his seal thereto or, if a
bank manager, attaching an identifying stamp of the bank of which he
is a manager.
3.6 Notwithstanding any other provisions of these Articles, at any time, the
bearer of a bearer share certificate may deliver the certificate for such
shares into the custody of the Company at its registered office, whereupon
the Company shall issue a receipt therefor under the Seal signed by a
director or officer identifying by name and address the person delivering
such certificate and specifying the date and number of bearer share
certificates so deposited and the number of shares comprised therein. Any
such receipt may be used by the person named therein for the purpose of
exercising the rights
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vested in the shares represented by the bearer share certificate so
deposited including the right to appoint a proxy. Any bearer share
certificate so deposited shall be returned to the person named in the
receipt or his personal representative if such person be dead and
thereupon the receipt issued therefor shall be of no further effect
whatsoever and shall be returned to the company for cancellation or, if it
has been lost or mislaid, such indemnity as may be required by resolution
of directors shall be given to the Company.
3.7 The bearer of a bearer share certificate shall for all purposes be deemed
to be the owner of the shares comprised in such certificate and in no
circumstances shall the Company or the Chairman of any meeting of members
or the Company's registrars or any director or officer of the Company or
any authorised person be obliged to inquire into the circumstances whereby
a bearer share certificate came into the hands of the bearer thereof, or
to question the validity or authenticity of any action taken by the bearer
of a bearer share certificate whose signature has been authenticated as
provided herein.
3.8 If the bearer of a bearer share certificate shall be a corporation, then
all the rights exercisable by virtue of such shareholding may be exercised
by an individual duly authorised to represent the corporation but unless
such individual shall acknowledge that he is representing a corporation
and shall produce upon request satisfactory evidence that he is duly
authorised to represent the corporation, the individual shall for all
purposes hereof be regarded as the holder of the shares in any bearer
share certificate held by him.
3.9 The directors may provide for payment of dividends to the holders of
bearer shares by coupons or talons and in such event the coupons or talons
shall be in such form and payable at such time and in such place or places
as the directors shall resolve. The Company shall be entitled to recognise
the absolute right of the bearer of any coupon or talon issued as
aforesaid to payment of the dividend to which it relates and delivery of
the coupon or talon to the Company or its agents shall constitute in all
respects a good discharge of the Company in respect of such dividend.
3.10 If any bearer share certificate, coupon or talon be worn out or defaced,
the directors may, upon the surrender hereof for cancellation, issue a new
one in its stead, and if any bearer share certificate, coupon or talon be
lost or destroyed, the directors may upon the loss or destruction being
established to their satisfaction, and upon such indemnity being given to
the Company as it shall by resolution of directors determine, issue a new
bearer share certificate in its stead, and in either case on payment of
such sum as the Company may from time to time by resolution of directors
require. In case of loss or destruction the person to whom such new bearer
share certificate, coupon or talon is issued shall also bear and pay to
the Company all expenses incidental to the investigation by the Company
of the evidence of such loss or destruction and to such indemnity.
<PAGE>
4. SHARES, AUTHORISED CAPITAL AND CAPITAL
4.1 Subject to the provisions of these Articles and any resolution of members
the unissued shares of the Company shall be at the disposal of the
directors who may without prejudice to any rights previously conferred on
the holders of any existing shares or class or series of shares, offer,
allot, grant options over or otherwise dispose of the shares to such
persons, at such times and upon such terms and conditions as the Company
may by resolution of directors determine.
4.2 Shares in the Company shall be issued for money, services rendered,
personal property, an estate in real property, a promissory note or other
binding obligation to contribute money or property or any combination of
the aforegoing as shall be determined by a resolution of directors.
4.3 Shares in the Company may be issued for such amount of consideration as
the directors may from time to time by resolution of directors determine,
except that in the case of shares with par value, the amount shall not be
less than the par value, and in the absence of fraud the decision of the
directors as to the value of the consideration received by the Company in
respect of the issue is conclusive unless a question of law is involved.
The consideration in respect of the shares constitutes capital to the
extent of the par value and the excess constitutes surplus.
4.4 A share issued by the Company upon conversion of, or in exchange for,
another share or a debt obligation or other security in the Company, shall
be treated for all purposes as having been issued for money equal to the
consideration received or deemed to have been received by the Company in
respect of the other share, debt obligation or security.
4.5 Treasury shares may be disposed of by the Company on such terms and
conditions (not otherwise inconsistent with these Articles) as the Company
may by resolution of directors determine.
4.6 The Company may issue fractions of a share and a fractional share shall
have the same corresponding fractional liabilities, limitations,
preferences, privileges, qualifications, restrictions, rights and other
attributes of a whole share of the same class or series of shares.
4.7 Upon the issue by the Company of a share without par value, the
consideration in respect of the share constitutes capital to the extent
designated by the directors and the excess constitutes surplus, except
that the directors must designate as capital an amount of the
consideration that is at least equal to the amount that the share is
entitled to as a preference, if any, in the assets of the Company upon
liquidation of the Company.
4.8 The Company may, subject to any limitations imposed by the Ordinance,
purchase, redeem or otherwise acquire and hold its own shares but no
purchase, redemption or other acquisition which shall constitute a
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<PAGE>
reduction in capital shall be made except in compliance with Regulations
7.4 and 7.5.
4.9 Shares that the Company purchases, redeems or otherwise acquires pursuant
to Regulation 4.8 may be cancelled or held as treasury shares. Upon the
cancellation of a share, the amount included as capital of the Company
with respect to that share shall be deducted from the capital of the
Company.
4.10 Where shares in the Company are held by the Company as treasury shares or
are held by another company of which the Company holds, directly or
indirectly, shares having more than 50 percent of the votes in the
election of directors of the other company, such shares of the Company are
not entitled to vote or to have dividends paid thereon and shall not be
treated as outstanding for any purpose except for purposes of determining
the capital of the Company.
5. TRANSFER OF SHARES
5.1 Subject to any limitations in the Memorandum, registered shares in the
Company may be transferred by a written instrument of transfer signed by
the transferor and containing the name and address of the transferee, but
in the absence of such written instrument of transfer the directors may
accept such evidence of a transfcr of shares as they consider appropriate.
5.2 The Company shall not be required to treat a transferee of a registered
share in the Company as a member until the transferee's name has been
entered in the share register.
5.3 Subject to any limitations in the Memorandum, the Company must, on the
application of the transferor or transferee of a registered share in the
Company, enter in the share register the name of the transferee of the
share save that the registration of transfers may be suspended and the
share register closed at such times and for such periods as the Company
may from time to time by resolution of directors determine provided always
that such registration shall not be suspended and the share register
closed for more than 60 days in any period of 12 months.
6. TRANSMISSION OF SHARES
6.1 The executor or administrator of a deceased member, the guardian of an
incompetent member or the trustee of a bankrupt member shall be the only
person recognised by the Company as having any title to his share but they
shall not be entitled to exercise any rights as a member of the Company
until they have proceeded as set forth in the next following two
regulations.
6.2 Any person becoming entitled by operation of law or otherwise to a share
or shares in consequence of the death, incompetence or bankruptcy of any
member may be registered as a member upon such evidence being produced as
may reasonably be required by the
<PAGE>
directors. An application by any such person to be registered as a member
shall be deemed to be a transfer of shares of the deceased, incompetent or
bankrupt member and the directors shall treat it as such.
6.3 Any person who has become entitled to a share or shares in consequence of
the death, incompetence or bankruptcy of any member may, instead of being
registered himself, request in writing that some person to be named by him
be registered as the transferee of such share or shares and such request
shall likewise be treated as if it were a transfer.
6.4 What amounts to incompetence on the part of a person is a matter to be
determined by the court having regard to all the relevant evidence and the
circumstances of the case.
7. REDUCTION OR INCREASE IN AUTHORISED CAPITAL OR CAPITAL
7.1 The Company may by a resolution of members or a resolution of directors
amend the Memorandum to increase or reduce its authorised capital and in
connection therewith the Company may in respect of any unissued shares
increase or reduce the number of shares, increase or reduce the par value
of any shares or effect any combination of the foregoing.
7.2 The Company may amend the Memorandum to
7.2.1 divide the shares, including issued shares, of a class or series
into a larger number of shares of the same class or series; or
7.2.2 combine the shares, including issued shares, of a class or series
into a smaller number of shares of the same class or series;
provided however, that where shares are divided or combined under
7.2.1. and 7.2.2. of these Regulations, the aggregate par value of
the new shares must be equal to the aggregate par value of the
original shares.
7.3 The capital of the Company may by a resolution of directors be increased
by transferring an amount of the surplus of the Company to capital, and,
subject to the provisions of Regulations 7.4 and 7.5 the capital of the
Company may be reduced by transferring an amount of the capital of the
Company to surplus.
7.4 No reduction of capital shall be effected that reduces the capital of the
Company to an amount that immediately after the reduction is less than the
aggregate par value of all outstanding shares with par value and all
shares with par value held by the Company as treasury shares and the
aggregate of the amounts designated as capital of all outstanding shares
without par value and all shares without par value held by the Company as
treasury shares that are entitled to a preference, if any, in the assets
of the Company upon liquidation of the Company.
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7.5 No reduction of capital shall be effected unless the directors determine
that immediately after the reduction the Company will be able to satisfy
its liabilities as they become due in the ordinary course of its business
and that the realisable assets of the Company will not be less than its
total liabilities, other than deferred taxes, as shown in the books of the
Company and its remaining capital, and, in the absence of fraud, the
decision of the directors as to the realisable value of the assets of the
Company is conclusive, unless a question of law is involved.
7.6 Where the Company reduces its capital the Company may
7.6.1 return to its members any amount received by the Company upon the
issue of any of its shares;
7.6.2 purchase, redeem or otherwise acquire its shares out of capital; or
7.6.3 cancel any capital that is lost or not represented by assets having
a realisable value.
8. MEETINGS AND CONSENTS OF MEMBERS
8.1 The directors of the Company may convene meetings of the members of the
Company at such times and in such manner and places within or outside the
British Virgin Islands as the directors consider necessary or desirable.
8.2 Upon the written request of members holding 10 percent or more of the
outstanding voting shares in the Company the directors shall convene a
meeting of members.
8.3 The directors shall give not less than 7 days notice of meetings of
members to those persons whose names on the date the notice is given
appear as members in the share register of the Company and are entitled to
vote at the meeting.
8.4 A meeting of members held in contravention of the requirement in
Regulation 8.3 is valid.
8.4.1 if members holding not less than 90 percent of the total number of
shares entitled to vote on all matters to be considered at the
meeting, or 90 percent of the vote of each class or series of
shares where members are entitled to vote thereon as a class or
series together with not less than a 90 percent majority of the
remaining votes, have agreed to shorter notice of the meeting, or
8.4.2 if all members holding shares entitled to vote on all or any matters
to be considered at the meeting have waived notice of the meeting
and for this purpose presence at the meeting shall be deemed to
constitute waiver.
8.5 The inadvertent failure of the directors to give notice of a meeting
<PAGE>
to a member, or the fact that a member has not received notice, does not
invalidate the meeting.
8.6 A member may be represented at a meeting of members by a proxy who may
speak and vote on behalf of the member.
8.7 The instrument appointing a proxy shall be produced at the place appointed
for the meeting before the time for holding the meeting at which the
person named in such instrument proposes to vote.
8.8 An instrument appointing a proxy shall be in substantially the following
form or such other form as the Chairman of the meeting shall accept as
properly evidencing the wishes of the member appointing the proxy.
(Name of Company)
I/We______________________________________________________________________
being a member of the above Company with _________________________________
shares HEREBY APPOINT ____________________________________________________
of _______________________________________________________________________
_____________________________________________________ of _________________
to be my/our proxy to vote for me/us at the meeting of members to
be held on the __________ day ___________________________, 19 ____ and at
adjournment thereof.
(Any restrictions on voting to be inserted here)
Signed this day of _______________________, _______.
____________________________________________________
Member
8.9 The following shall apply in respect of joint ownership of shares:
8.9.1 if two or more persons hold shares jointly each of them may be
present in person or by proxy at a meeting of members and may speak
as a member;
8.9.2 if only one of the joint owners is present in person or by proxy he
may vote on behalf of all joint owners, and;
8.9.3 if two or more of the joint owners are present in person or by proxy
they must vote as one.
8.10 A member shall be deemed to be present at a meeting of members if
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he participates by telephone or other electronic means and all members
participating in the meeting are able to hear each other.
8.11 A meeting of members is duly constituted if, at the commencement of the
meeting, there are present in person or by proxy not less than 50 percent
of the votes of the shares or class or series of shares entitled to vote
on resolutions of members to be considered at the meeting. If a quorum be
present, notwithstanding the fact that such quorum may be represented by
only one person, then such person may resolve any matter and a certificate
signed by such person accompanied where such person be a proxy by a copy
of the proxy form shall constitute a valid resolution of members.
8.12 If within two hours from the time appointed for the meeting a quorum is
not present, the meeting, if convened upon the requisition of members,
shall be dissolved; in any other case it shall stand adjourned to the next
business day at the same time and place or to such other time and place as
the directors may determine, and if at the adjourned meeting there are
present within one hour from the time appointed for the meeting in person
or by proxy not less than one third of the votes of the shares or each
class or series of shares entitled to vote on the resolutions to be
considered by the meeting, those present shall constitute a quorum but
otherwise the meeting shall be dissolved.
8.13 At every meeting of members, the Chairman of the Board of Directors shall
preside as chairman of the meeting. If there is no Chairman of the Board
of Directors or if the Chairman of the Board of Directors is not present
at the meeting, the members present shall choose someone of their number
to be the chairman. If the members are unable to choose a chairman for any
reason, then the person representing the greatest number of voting shares
present in person or by prescribed form of proxy at the meeting shall
preside as chairman failing which the oldest individual member or
representative of a member present shall take the chair.
8.14 The chairman may, with the consent of the meeting, adjourn any meeting
from time to time, and from place to place, but no business shall be
transacted at any adjourned meeting other than the business left
unfinished at the meeting from which the adjournment took place.
8.15 At any meeting of the members the chairman shall be responsible for
deciding in such manner as he shall consider appropriate whether any
resolution has been carried or not and the result of his decision shall be
announced to the meeting and recorded in the minutes thereof. If the
chairman shall have any doubt as to the outcome of any resolution put to
the vote, he shall cause a poll to be taken of all votes cast upon such
resolution, but if the chairman shall fail to take a poll then any member
present in person or by proxy who disputes the announcement by the
chairman of the result of any vote may immediately following such
announcement demand that a poll be taken and the chairman shall thereupon
cause a poll to be taken. If a poll is taken at any meeting, the result
thereof shall be duly recorded in the minutes of that meeting by the
chairman.
<PAGE>
8.16 Any person other than an individual shall be regarded as one member and
subject to Regulation 8.17 the right of any individual to speak for or
represent such member shall be determined by the law of the jurisdiction
where, and by the documents by which, the person is constituted or
derives its existence. In case of doubt, the directors may in good
faith seek legal advice from any qualified person and unless and until a
court of competent jurisdiction shall otherwise rule, the directors may
rely and act upon such advice without incurring any liability to any
member.
8.17 Any person other than an individual which is a member of the Company may
by resolution of its directors or other governing body authorise such
person as it thinks fit to act as its representative at any meeting of
the Company or of any class of members of the Company, and the person so
authorised shall be entitled to exercise the same powers on behalf of the
person which he represents as that person could exercise if it were an
individual member of the Company.
8.18 The chairman of any meeting at which a vote is cast by proxy or on behalf
of any person other than an individual may call for a notarially certified
copy of such proxy or authority which shall be produced within 7 days of
being so requested or the votes cast by such proxy or on behalf of such
person shall be disregarded.
8.19 Directors of the Company may attend and speak at any meeting of
members of the Company arid at any separate meeting of the holders of any
class or series of shares in the Company.
9. DIRECTORS
9.1 The first directors of the Company shall be elected by the subscribers to
the Memorandum; and thereafter, the directors shall be elected
9.1.1 by the members for such terms as the members determine, or
9.1.2 by the directors for such terms as the directors may determine.
9.2 Until directors are appointed the subscribers to the Memorandum of
Association shall have the power to act as directors.
9.3 The minimum number of directors shall be one and the maximum number shall
be six.
9.4 Each director shall hold office for the term, if any, fixed by resolution
of members or directors, as the case may be. In the case of a director who
is an individual the term of office of a director shall terminate on the
director's death, resignation or removal. The bankruptcy of a corporate
director shall terminate the term of office of such director.
9.5 A director may be removed from office, with or without cause, by a
resolution of members or directors, as the case may be.
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<PAGE>
9.6 A director may resign his office by giving written notice of his
resignation to the Company and the resignation shall have effect from the
date the notice is received by the Company or from such later date as may
be specified in the notice.
9.7 A vacancy in the Board of Directors may be filled by a resolution of
members or by a resolution of a majority of the remaining directors.
9.8 With the prior or subsequent approval by a resolution of members, the
directors may, by a resolution of directors, fix the emoluments of
directors with respect to services to be rendered in any capacity to the
Company.
9.9 A director shall not require a share qualification, and may be an
individual or a company.
10. POWERS OF DIRECTORS
10.1 The business and affairs of the Company shall be managed by the directors
who may pay all expenses incurred preliminary to and in connection with
the formation and registration of the Company and may exercise all such
powers of the Company as are not by the Ordinance or by the Memorandum or
these Articles required to be exercised by the members of the Company,
subject to any delegation of such powers as may be authorised by these
Articles and to such requirements as may be prescribed by a resolution of
members; but no requirement made by a resolution of members shall prevail
if it be inconsistent with these Articles nor shall such requirement
invalidate any prior act of the directors which would have been valid if
such requirement had not been made.
10.2 The directors may, by a resolution of directors, appoint any person,
including a person who is a director, to be an officer or agent of the
Company.
10.3 Every officer or agent of the Company has such powers and authority of the
directors, including the power and authority to affix the Seal, as are
set forth in these Articles or in the resolution of directors appointing
the officer or agent; except that no officer or agent has any power or
authority with respect to fixing the emoluments of directors.
10.4 Any director which is a body corporate may appoint any person its duly
authorised representative for the purpose of representing it at meetings
of the Board of Directors or with respect to unanimous consents.
10.5 The continuing directors may act notwithstanding any vacancy in their
body, save that if their number is reduced below the number fixed by or
pursuant to these Articles as the necessary quorum for a meeting of
directors, the continuing directors or director may appoint directors to
fill any vacancy that has arisen or summoning a meeting of members.
<PAGE>
10.6 All cheques, promissory notes, drafts, bills of exchange and other
negotiable instruments and all receipts for monies paid to the Company,
shall be signed, drawn, accepted, endorsed or otherwise executed, as the
case may be, in such manner as shall from time to time be determined by
resolution of directors.
11. PROCEEDINGS OF DIRECTORS
11.1 The directors of the Company or any committee thereof may meet at such
times and in such manner and places within or outside the British Virgin
Islands as the directors may determine to be necessary or desirable.
11.2 A director shall be deemed to be present at a meeting of directors if he
participates by telephone or other electronic means and all directors
participating in the meeting are able to hear each other.
11.3 A director shall be given not less than 3 days notice of meetings of
directors, but a meeting of directors held without 3 days notice having
been given to all directors shall be valid if all the directors entitled
to vote at the meeting who do not attend, waive notice of the meeting; and
for this purpose, the presence of a director at the meeting shall be
deemed to constitute waiver on his part. The inadvertent failure to give
notice of a meeting to a director, or the fact that a director has not
received the notice, does not invalidate the meeting.
11.4 A director may by a written instrument appoint an alternate who need not
be a director and an alternate is entitled to attend meetings in the
absence of the director who appointed him and to vote or consent in place
of the director.
11.5 A meeting of directors is duly constituted for all purposes if at the
commencement of the meeting there are present in person or by alternate
not less than one half of the total number of directors, unless there are
only two directors in which case the quorum shall be two.
11.6 If the Company shall have only one director the provisions herein
contained for meetings of the directors shall not apply but such sole
director shall have full power to represent and act for the Company in all
matters as are not by the Ordinance or the Memorandum or these Articles
required to be exercised by the members of the Company and in lieu of
minutes of a meeting shall record in writing and sign a note or memorandum
of all matters requiring a resolution of directors. Such a note or
memorandum shall constitute sufficient evidence of such resolution for all
purposes.
11.7 At every meeting of the directors the Chairman of the Board of Directors
shall preside as chairman of the meeting. If there is no Chairman of the
Board of Directors or if the Chairman of the Board of Directors is not
present at the meeting the Vice Chairman of the Board of Directors shall
preside. If there is no Vice Chairman of
15
<PAGE>
the Board of Directors or if the Vice Chairman of the Board of Directors
is not present at the meeting the directors present shall choose someone
of their number to be chairman of the meeting.
11.8 The directors shall cause the following corporate records to be kept:
11.8.1 minutes of all meetings of directors, members, committees of
directors, committees of officers and committees of members;
11.8.2 copies of all resolutions consented to by directors, members,
committees of directors, committees of officers and committees of
members; and
11.8.3 such other accounts and records as the directors by resolution of
directors consider necessary or desirable in order to reflect the
financial position of the Company.
11.9 The books, records and minutes shall be kept at the registered office of
the Company or at such other place as the directors determine.
11.10 The directors may, by a resolution of directors, designate one or more
committees, each consisting of one or more directors.
11.11 Each committee of directors has such powers and authorities of the
directors, including the power and authority to affix the Seal, as are
set forth in the resolution of directors establishing the committee,
except that no committee has any power or authority either to amend the
Memorandum or these Articles or with respect to the matters requiring a
resolution of directors under Regulations 9.7, 9.8 and 10.2.
11.12 The meetings and proceedings of each committee of directors consisting of
2 or more directors shall be governed mutatis mutandis by the provisions
of these Articles regulating the proceedings of directors so far as the
same are not superseded by any provisions in the resolution establishing
the committee.
12. OFFICERS
12.1 The Company may by resolution of directors appoint officers of the Company
at such times as shall be considered necessary or expedient. Such officers
may consist of a Chairman of the Board of Directors, a Vice Chairman of
the Board of Directors, President and one or more Vice Presidents,
Secretaries and Treasurers and such other officers as may from time to
time be deemed desirable. Any number of offices may be held by the same
person.
12.2 The officers shall perform such duties as shall be prescribed at the time
of their appointment subject to any modification in such duties as may be
prescribed thereafter by resolution of directors or resolution of members,
but in the absence of any specific allocation of duties it shall be the
responsibility of the Chairman of the Board
<PAGE>
of Directors to preside at meetings of director! and members, the Vice
Chairman to act in the absence of the Chairman, the President to manage
the day to day affairs of the Company, the Vice Presidents to act in order
of seniority in the absence of the President but otherwise to perform such
duties as may be delegated to them by the President, the Secretaries to
maintain the share register, minute books and records (other than
financial records) of the Company and to ensure compliance with all
procedural requirements imposed on the company by applicable law, and the
Treasurer to be responsible for the financial affairs of the Company.
12.3 The emoluments of all officers shall be fixed by resolution of directors.
12.4 The officers of the Company shall hold office until their successors are
duly elected and qualified, but any officer elected or appointed by the
directors may be removed at any time, with or without cause, by resolution
of directors. Any vacancy occurring in any office of the Company may be
filled by resolution of directors.
13. CONFLICT OF INTERESTS
13.1 No agreement or transaction between the Company and one or more of it!
directors or any person in which any director has a financial interest or
to whom any director is related, including as a director of that other
person, is void or voidable for this reason only or by reason only that
the director is present at the meeting of directors or at the meeting of
the committee of directors that approves the agreement or transaction or
that the vote or consent of the director is counted for that purpose if
the material facts of the interest of each director in the agreement or
transaction and his interest in or relationship to any other party to the
agreement or transaction are disclosed in good faith or are known by the
other directors.
13.2 A director who has an interest in any particular business to be considered
at a meeting of directors or members may be counted for purposes of
determining whether the meeting is duly constituted.
14. INDEMNIFICATION
14.1 Subject to Regulation 14.2 the Company may indemnify against all expenses,
including legal fees, and against all judgements, fines and amounts paid
in settlement and reasonably incurred in connection with legal,
administrative or investigative proceedings any person who
14.1.1 is or was a party or is threatened to be made a party to any
threatened, pending or completed proceedings, whether civil,
criminal, administrative or investigative, by reason of the fact
that the person is or was a director, an officer or a liquidator
of the Company; or
14.1.2 is or was, at the request of the Company, serving as a director,
officer or liquidator of, or in any other capacity
17
<PAGE>
is or was acting for, another company or a partnership, joint
venture, trust or other enterprise.
14.2 Regulation 14.1 only applies to a person referred to in that Regulation if
the person acted honestly and in good faith with a view to the best
interests of the Company and, in the case of criminal proceedings, the
person had no reasonable cause to believe that his conduct was unlawful.
14.3 The decision of the directors as to whether the person acted honestly and
in good faith and with a view to the best interests of the Company and as
to whether the person had no reasonable cause to believe that his conduct
was unlawful, is in the absence of fraud, sufficient for the purposes of
these Articles, unless a question of law is involved.
14.4 The termination of any proceedings by any judgement, order, settlement,
conviction or the entering of a nolle prosequi does not, by itself, create
a presumption that the person did not act honestly and in good faith and
with a view to the best interests of the Company or that the person had
reasonable cause to believe that his conduct was unlawful.
14.5 If a person referred to in Regulation 14.1 has been successful in defence
of any proceedings referred to in that Regulation the person is entitled
to be indemnified against all expenses, including legal fees, and against
all judgements, fines and amounts paid in settlement and reasonably
incurred by the person in connection with the proceedings.
14.6 The Company may purchase and maintain insurance in relation to any person
who is or was a director, an officer or a liquidator of the Company, or
who at the request of the Company is or was serving as a director, an
officer or a liquidator of, or in any other capacity is or was acting for,
another company or a partnership, joint venture, trust or other
enterprise, against any liability asserted against the person and incurred
by the person in that capacity, whether or not the Company has or would
have had the power to indemnify the person against the liability under
Regulation 14.1.
15. SEAL
The directors shall provide for the safe custody of the Seal. An imprint of the
Seal shall be kept at the registered office of the company. The Seal when
affixed to any written instrument shall be witnessed by a director or any other
person so authorised from time to time by resolution of directors. The directors
may provide for a facsimile of the Seal and of the signature of any director or
authorised person which may be reproduced by printing or other means on any
instrument and it shall have the same force and validity as if the Seal had been
affixed to such instrument and the same had been signed as hereinbefore
described.
18
<PAGE>
16. DIVIDENDS
16.1 The Company may by a resolution of directors declare and pay dividends in
money, shares, or other property but dividends shall only be declared and
paid out of surplus. In the event that dividends are paid in specie the
directors shall have responsibility for establishing and recording in the
resolution of directors authorising the dividends, a fair and proper value
for the assets to be so distributed.
16.2 The directors may from time to time pay to the members such interim
dividends as appear to the directors to be justified by the profits of the
Company.
16.3 The directors may, before declaring any dividend, set aside out of the
profits of the Company such sum as they think proper as a reserve fund,
and may invest the sum so set apart as a reserve fund upon such securities
as they may selcct.
16.4 No dividend shall be declared and paid unless the directors determine that
immediately after the payment of the dividend the Company will be able to
satisfy its liabilities as they become due in the ordinary course of its
business and the realisable value of the assets of the Company will not be
less than the sum of its total liabilities, other than deferred taxes, as
shown in its books of account, and its capital. In the absence of fraud,
the decision of the directors as to the realisable value of the assets of
the Company is conclusive, unless a question of law is involved.
16.5 Notice of any dividend that may have been declared shall be given to each
member in manner hereinafter mentioned and all dividends unclaimed for 3
years after having been declared may be forfeited by resolution of
directors for the benefit of the Company.
16.6 No dividend shall bear interest as against the Company and no dividend
shall be paid on shares described in Regulation 4.10.
16.7 A share issued as a dividend by the Company shall be treated for all
purposes as having been issued for money equal to the surplus that is
transferred to capital upon the issue of the share.
16.8 In the case of a dividend of authorised but unissued shares with par
value, an amount equal to the aggregate par value of the shares shall be
transferred from surplus to capital at the time of the distribution.
16.9 In the case of a dividend of authorized but unissued shares without par
value, the amount designated by the directors shall be transferred from
surplus to capital at the time of the distribution, except that the
directors must designate as capital an amount that is at least equal to
the amount that the shares are entitled to as a preference, if any, in the
assets of the Company upon liquidation of the Company.
16.10 A division of the issued and outstanding shares of a class or
19
<PAGE>
series of shares into a larger number of shares of the same class or
series having a proportionately smaller par value does not constitute a
dividend of shares.
17. ACCOUNTS
The Company shall keep such accounts and records as the directors consider
necessary or desirable in order to reflect the financial position of the
Company.
18. AUDIT
18.1 The Company may by resolution of members call for the accounts to be
examined by auditors.
18.2 The first auditors shall be appointed by resolution of directors;
subsequent auditors shall be appointed by a resolution of members.
18.3 The auditors may be members of the Company but no director or other
officer shall be eligible to be an auditor of the Company during his
continuance in office.
18.4 The remuneration of the auditors of the Company
18.4.1 in the case of auditors appointed by the directors, may be
fixed by resolution of directors;
18.4.2 subject to the foregoing, shall be fixed by resolution of
members or in such manner as the Company may by resolution of
members determine.
18.5 The auditors shall examine each profit and loss account and balance sheet
required to be served on every member of the Company or laid before a
meeting of the members of the Company and shall state in a written report
whether or not
18.5.1 in their opinion the profit and loss account and balance
sheet give a true and fair view respectively of the profit and
loss for the period covered by the accounts, and of the state
of affairs of the Company at the end of that period;
18.5.2 all the information and explanations required by the auditors
have been obtained.
18.6 The report of the auditors shall be annexed to the accounts and shall be
read at the meeting of members at which the accounts are laid before the
Company or shall be served on the members.
18.7 Every auditor of the Company shall have a right of access at all times to
the books of account and vouchers of the Company, and shall be entitled to
require from the directors and officers of the Company such information
and explanations as he thinks necessary for the performance of the duties
of the auditors.
18.8 The auditors of the Company shall be entitled to receive notice of,
<PAGE>
and to attend any meetings of members of the Company at which the
Company's profit and loss account and balance sheet are to be presented.
19. NOTICES
19.1 Any notice, information or written statement to be given by the Company to
members must be served in the case of members holding registered shares by
mail addressed to each member at the address shown in the share register
and in the case of members holding shares issued to bearer, in the manner
provided in the Memorandum.
19.2 Any summons, notice, order, document, process, information or written
statement to be served on the Company may be served by leaving it, or by
sending it by registered mail addressed to the Company, at its registered
office, or by leaving it with, or by sending it by registered mail to, the
registered agent of the Company.
19.3 Service of any summons, notice, order, document, process, information or
written statement to be served on the Company may be proved by showing
that the summons, notice, order, document, process, information or written
statement was mailed in such time as to admit to its being delivered in
the normal course of delivery within the period prescribed for service and
was correctly addressed and the postage was prepaid.
20. PENSION AND SUPERANNUATION FUNDS
The directors may establish and maintain or procure the establishment and
maintenance of any non-contributory or contributory pension or superannuation
funds for the benefit of, and give or procure the giving of donations,
gratuities, pensions, allowances or emoluments to, any persons who are or were
at any time in the employment or service of the Company or any company which is
a subsidiary of the Company or is allied to or associated with the Company or
with any such subsidiary, or who are or were at any time directors or officers
of the Company or of any such other company as aforesaid or who hold or held any
salaried employment or office in the Company or such other company, or any
persons in whose welfare the Company or any such other company as aforesaid is
or has been at any time interested, and to the wives, widows, families and
dependents of any such person, and may make payments for or towards the
insurance of any such persons as aforesaid, and may do any of the matters
aforesaid either alone or in conjunction with any such other company as
aforesaid. Subject always to the proposal being approved by resolution of
members, a director holding any such employment or office shall be entitled to
participate in and retain for his own benefit any such donation, gratuity,
pension allowance or emolument.
21. ARBITRATION
21.1 Whenever any difference arises between the Company on the one hand and any
of the members or their executors, administrators or assigns on the other
hand, touching the true intent and construction or the incidence or
consequences of these Articles or of the Ordinance,
21
<PAGE>
touching anything done, or executed, omittcd or suffered in pursuance of
the Ordinance or touching any breach or alleged breach or otherwise
relating to the premises or to these Articles, or to any Act or Ordinance
affecting the Company or to any of the affairs of the Company such
difference shall, unless the parties agree to refer the same to a single
arbitrator, be referred to two arbitrators one to be chosen by each of the
parties to the difference and the arbitrators shall before entering on the
reference appoint an umpire.
21.2 If either party to the reference makes default in appointing an arbitrator
either originally or by way of substitution (in the event that an
appointed arbitrator shall die, be incapable of acting or refuse to act)
for 10 days after the other party has given him notice to appoint the
same, such other party may appoint an arbitrator to act in the place of
the arbitrator of the defaulting party.
22. VOLUNTARY WINDING UP AND DISSOLUTION
The Company may voluntarily commence to wind up and dissolve by a resolution of
members but if the Company has never issued shares it may voluntarily commence
to wind up and dissolve by resolution of directors.
23. CONTINUATION
The Company may by resolution of members or by resolution passed unanimously by
all directors of the Company continue as a company incorporated under the laws
of a jurisdiction outside the British Virgin Islands in the manner provided
under those laws.
We, B.V.I. COMPANY FORMATIONS LIMITED of P.O. Box 146, Wickhams Cay, Road Town,
Tortola, British Virgin Islands for the purpose of incorporating an
International Business Company under the laws of the British Virgin Islands
hereby subscribe our name to the Articles of Association this 27th day of July,
1989 in the presence of the undersigned witness.
NAME AND ADDRESS SUBSCRIBER
OF WITNESS
/s/ Joyce Simon /s/ B. R. Goodman
Joyce Simon B.V.I. Company Formations Limited
c/o P.O. Box 146, P.O. Box 146,
Road Town, Tortola, Wickham's Cay 1,
British Virgin Islands. Road Town, Tortola,
British Virgin Islands.
<PAGE>
Exhibit 3.19
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION
OF
GRIFFIN RESORTS INC.
Griffin Resorts Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), hereby
certifies that the amendment set forth below was duly adopted in accordance with
Section 242 of the General Corporation Law of the State of Delaware.
Article FIRST of the Corporation's Certificate of Incorporation is
hereby amended to read in its entirety as follows:
"FIRST: The name of the Corporation is GGRI, Inc. (hereinafter the
"Corporation)."
IN WITNESS WHEREOF, the Corporation has caused the undersigned to
execute and attest to, respectively, this Certificate of Amendment this 7th day
of October, 1993.
GRIFFIN RESORTS INC.
By: /s/ David P. Hanlon
---------------------
David P. Hanlon
President
Attest:
By: /s/ Christopher D. Whitney
--------------------------
Christopher D. Whitney
Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
GRIFFIN RESORTS INC.
Griffin Resorts, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), does
hereby certify:
FIRST: The Corporation has not received any payment for any of its
stock.
SECOND: The amendment to the Corporation's Certificate of
Incorporation set forth in the following resolution was approved by a majority
of the Corporation's Board of Directors and was duly adopted in accordance with
the provisions of Section 241 of the General Corporation Law of the State of
Delaware:
"RESOLVED, that the Certificate of Incorporation of the
Corporation be amended by substituting for Article Ninth in its
entirety the following:
NINTH: This certificate shall be subject to the New Jersey Casino
Control Act, N.J.S.A. 5:12-1 et seq., and the rules and regulations of
the New Jersey Casino Control Commission (the "Commission") as they
currently exist or as they hereinafter may be amended (the "Act").
Without limiting the foregoing, if the Corporation shall become, and
so long as it shall remain, a holding corporation as defined in the
Act, or a direct or indirect subsidiary thereof, in accordance with
N.J.S.A. 5:12-82(d)(7), (8) and (10), the Commission shall have the
right of prior approval with regard to transfers of non-publicly
traded
<PAGE>
securities, shares, and other interests in the Corporation and the
Corporation shall have the absolute right to repurchase at the market
price or purchase price, whichever is the lesser, any such security,
share or other interest in the Corporation in the event that the
Commission disapproves a transfer of such security, share or other
interest in the Corporation in accordance with the Act.
'Without limiting the foregoing, if the Corporation shall become,
and so long as it shall remain, a holding company as defined in the
Act, or a direct or indirect subsidiary thereof, in accordance with
N.J.S.A. 5:12-82(d)(7) and (9), all publicly traded securities of the
Corporation shall be held subject to the condition that if a holder
thereof is found to be disqualified by the Commission pursuant to the
Act, such holder shall dispose of his interest in the Corporation.
'Without limiting the foregoing, if the Corporation shall become,
and so long as it shall remain, either a privately held or publicly
traded holding corporation as defined in the Act, or a direct or
indirect subsidiary thereof, in accordance with N.J.S.A. 5:12-105(e),
commencing on the date the Commission serves notice on the Corporation
that a securityholder has been found disqualified, it shall be
unlawful for the disqualified securityholder to:
(1) Receive any dividends or interest upon any such securities
of the Corporation held by such holder;
(2) Exercise, directly or through any trustee or nominee, any
right conferred by such securities, or
(3) Receive any remuneration in any form, for services rendered
or otherwise, from the Corporation.'"
2
<PAGE>
IN WITNESS WHEREOF, Griffin Resorts Inc. has caused this Certificate to be
signed and attested by its duly authorized officers, this 8th day of October,
1988.
GRIFFIN RESORTS INC.
/s/ Merv Griffin
----------------
Merv Griffin
President
ATTEST:
/s/ Gloria Redlich
- ------------------
Gloria Redlich
Secretary
NY:199OF
LAWP:1442z
3
<PAGE>
CERTIFICATE OF INCORPORATION
OF GRIFFIN RESORTS INC.
FIRST: The name of the Corporation is Griffin Resorts Inc.
(hereinafter the "Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is 1209 Orange Street, in the City of Wilmington, County of
New Castle. The name of its registered agent at that address is The Corporation
Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which a corporation may be organized under the General
Corporation Law of the State of Delaware as set forth in Title 8 of the Delaware
Code (the "GCL").
FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is 1000 shares of Common Stock, each having a par
value of one dollar ($1.00).
FIFTH: The name and mailing address of the Sole Incorporator is as
follows:
Name Mailing Address
---- ---------------
Catherine S. Davis P.O. Box 636
Wilmington, DE 19899
SIXTH: The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
(1) The business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors.
(2) The directors shall have concurrent power with the stockholders to
make, alter, amend, change add to or repeal the By-Laws of the Corporation.
(3) The number of directors of the Corporation shall be as from time
to time fixed by, or in the manner provided in, the By-Laws of the
Corporation. Election of directors need
<PAGE>
not be by written ballot unless the By-Laws so provide.
(4) No director shall be personally liable to the Corporation or any
of its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) pursuant to Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the director derived
an improper personal benefit. Any repeal or modification of this Article
SIXTH by the stockholders of the Corporation shall not adversely affect any
right or protection of a director of the Corporation existing at the time
of such repeal or modification with respect to acts or omissions occurring
prior to such repeal or modification.
(5) In addition to the powers and authority hereinbefore or by statute
expressly conferred upon them, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be
exercised or done by the Corporation, subject, nevertheless, to the
provisions of the GCL, this Certificate of Incorporation, and any By-Laws
adopted by the stockholders; provided, however, that no By-Laws hereafter
adopted by the stockholders shall invalidate any prior act of the directors
which would have been valid if such By-Laws had not been adopted.
SEVENTH: Meetings of stockholders may be held within or without the
State of Delaware, as the By-Laws may provide. The books of the Corporation may
be kept (subject to any provision contained in the GCL) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the By-Laws of the Corporation.
EIGHTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of the GCL or on
2
<PAGE>
the application of trustees in dissolution or of any receiver or receivers
appointed for this Corporation under the provisions of Section 279 of the
GCL, order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and
to any reorganization of this Corporation as a consequence of such compromise
or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, of this
Corporation, as the case may be, and also on this Corporation.
NINTH: This certificate shall be subject to the New Jersey Casino
Control Act, N.J.S.A. 5:12-1 et seq., and the rules and regulations of the New
Jersey Casino Control Commission (the "Commission") as they currently exist or
as they hereinafter may be amended (the "Act"). Without limiting the foregoing,
if the Corporation shall become, and so long as it shall remain, a privately
held holding corporation as defined in the Act, or a direct or indirect
subsidiary thereof, in accordance with N.J.S.A 5:12-82(d)(7), (9) and (10), the
Commission shall have the right of prior approval with regard to transfers of
securities, shares, and other interests in the Corporation and the Corporation
shall have the absolute right to repurchase at the market price or purchase
price, whichever is the lesser, any security, share or other interest in the
Corporation in the event that the Commission disapproves a transfer of such
security, share or other interest in the Corporation in accordance with the Act.
Without limiting the foregoing, if the Corporation shall become, and
so long as it shall remain, a publicly traded holding company as defined in the
Act, or a direct or indirect subsidiary thereof, in accordance with N.J.S.A.
5:12-82(d)(7) and (9), all securities of the Corporation shall be held subject
to the condition that if a holder thereof is found to be disqualified by the
Commission pursuant to the Act, such holder shall dispose of his interest in the
Corporation.
Without limiting the foregoing, if the Corporation shall become, and
so long as it shall remain, either a privately held or publicly traded holding
corporation as defined in the Act, or a direct or indirect subsidiary
3
<PAGE>
Exhibit 3.20
GRIFFIN RESORTS INC.
(a Delaware corporation)
BYLAWS
ARTICLE I
Offices
SECTION 1.01 Registered Office. The registered office of Griffin
Resorts Inc. (hereinafter called the Corporation) in the State of Delaware shall
be at 1209 Orange Street, City of Wilmington, County of New Castle, and the name
of the registered agent in charge thereof shall be The Corporation Trust
Company.
SECTION 1.02 Other Offices. The Corporation may also have an office
or offices at such other place or places, either within or without the State of
Delaware, as the Board of Directors (hereinafter called the Board) may from time
to time determine or as the business of the Corporation may require.
ARTICLE II
Meetings of Stockholders
SECTION 2.01 Annual Meetings. Annual meetings of the stockholders of
the Corporation for the purpose of electing directors and for the transaction of
such other proper business as may come before such meetings may be held at such
time, date and place as the Board shall determine by resolution.
SECTION 2.02 Special Meetings. A special meeting of the stockholders
for the transaction of any proper business may be called at any time by the
Board or by the President.
SECTION 2.03 Place of Meetings. All meetings of the stockholders
shall be held at such places, within or without the State of Delaware, as may
from time to time be designated by the person or persons calling the respective
meeting and specified in the respective notices or waivers of notice thereof.
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SECTION 2.04 Notice of Meetings. Except as otherwise required by
law, notice of each meeting of the stockholders, whether annual or special,
shall be given not less than ten (10) nor more than sixty (60) days before the
date of the meeting to each stockholder of record entitled to vote at such
meeting by delivering a typewritten or printed notice thereof to him personally,
or by depositing such notice in the United States mail, in a postage prepaid
envelope, directed to him at his post office address furnished by him to the
Secretary of the Corporation for such purpose or, if he shall not have furnished
to the Secretary his address for such purpose, then at his post office address
last known to the Secretary, or by transmitting a notice thereof to him at such
address by telegraph, cable, or wireless. Except as otherwise expressly required
by law, no publication of any notice of a meeting of the stockholders shall be
required. Every notice of a meeting of the stockholders shall state the place,
date and hour of the meeting, and, in the case of a special meeting, shall also
state the purpose or purposes for which the meeting is called. Notice of any
meeting of stockholders shall not be required to be given to any stockholder who
shall have waived such notice and such notice shall be deemed waived by any
stockholder who shall attend such meeting in person or by proxy, except as a
stockholder who shall attend such meeting for the express purpose of objecting,
at the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. Except as otherwise expressly
required by law, notice of any adjourned meeting of the stockholders need not be
given if the time and place thereof are announced at the meeting at which the
adjournment is taken.
SECTION 2.05 Quorum. Except in the case of any meeting for the
election of directors summarily ordered as provided by law, the holders of
record of a majority in voting interest of the shares of stock of the
Corporation entitled to be voted thereat, present in person or by proxy, shall
constitute a quorum for the transaction of business at any meeting of the
stockholders of the Corporation or any adjournment thereof. In the absence of a
quorum at any meeting or any adjournment thereof, a majority in voting interest
of the stockholders present in person or by proxy and entitled to vote thereat
or, in the absence therefrom of all the stockholders, any officer entitled to
preside at, or to act as secretary of, such meeting may adjourn such meeting
from time to time. At any such adjourned meeting at which a quorum is present
any business may be transacted which might have been transacted at the meeting
as originally called.
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SECTION 2.06 Voting.
(a) Each stockholder shall, at each meeting of the stockholders, be
entitled to vote in person or by proxy each share or fractional share of the
stock of the Corporation having voting rights on the matter in question and
which shall have been held by him and registered in his name on the books of the
Corporation:
(i) on the date fixed pursuant to Section 6.05 of these Bylaws
as the record date for the determination of stockholders entitled to
notice of and to vote at such meeting, or
(ii) if no such record date shall have been so fixed, then (a)
at the close of business on the day next preceding the day on which
notice of the meeting shall be given or (b) if notice of the meeting
shall be waived, at the close of business on the day next preceding
the day on which the meeting shall be held.
(b) Shares of its own stock belonging to the Corporation or to
another corporation, if a majority of the shares entitled to vote in the
election of directors in such other corporation is held, directly or indirectly,
by the Corporation, shall neither be entitled to vote nor be counted for quorum
purposes. Persons holding stock of the Corporation in a fiduciary capacity shall
be entitled to vote such stock. Persons whose stock is pledged shall be entitled
to vote, unless in the transfer by the pledgor on the books of the Corporation
he shall have expressly empowered the pledgee to vote thereon, in which case
only the pledgee, or his proxy, may represent such stock and vote thereon. Stock
having voting power standing of record in the names of two or more persons,
whether fiduciaries, members of a partnership, joint tenants in common, tenants
by entirety or otherwise, or with respect to which two or more persons have the
same fiduciary relationship, shall be voted in accordance with the provisions of
the General Corporation Law of the State of Delaware.
(c) Any such voting rights may be exercised by the stockholder
entitled thereto in person or by his proxy appointed by an instrument in
writing, subscribed by such stockholder or by his attorney thereunto authorized
and delivered to the secretary of the meeting; provided, however, that no proxy
shall be voted or acted upon after three years from its date unless said proxy
shall provide for a longer period. The attendance at any meeting of a
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stockholder who may theretofore have given a proxy shall not have the effect of
revoking the same unless he shall in writing so notify the secretary of the
meeting prior to the voting of the proxy. At any meeting of the stockholders all
matters, except as otherwise provided in the Certificate of Incorporation, in
these Bylaws or by law, shall be decided by the vote of a majority in voting
interest of the stockholders present in person or by proxy and entitled to vote
thereat and thereon, a quorum being present. The vote at any meeting of the
stockholders on any question need not be by ballot, unless so directed by the
chairman of the meeting. On a vote by ballot each ballot shall be signed by the
stockholder voting, or by his proxy, if there be such proxy, and it shall state
the number of shares voted.
SECTION 2.07 List of Stockholders. The Secretary of the Corporation
shall prepare and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
SECTION 2.08 Judges. If at any meeting of the stockholders a vote by
written ballot shall be taken on any question, the chairman of such meeting may
appoint a judge or judges to act with respect to such vote. Each judge so
appointed shall first subscribe an oath faithfully to execute the duties of a
judge at such meeting with strict impartiality and according to the best of his
ability. Such judges shall decide upon the qualification of the voters and shall
report the number of shares represented at the meeting and entitled to vote on
such question, shall conduct and accept the votes, and, when the voting is
completed, shall ascertain and report the number of shares voted respectively
for and against the question. Reports of judges shall be in writing and
subscribed and delivered by them to the Secretary of the Corporation. The judges
need not be stockholders of the
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Corporation, and any officer of the Corporation may be a judge on any question
other than a vote for or against a proposal in which he shall have a material
interest.
SECTION 2.09 Action Without Meeting. Any action required to be taken
at any annual or special meeting of stockholders of the Corporation, or any
action which may be taken at any annual or special meeting of such stockholders,
may be taken without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted. Prompt notice of the
taking of the corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not consented in writing.
ARTICLE III
Board of Directors
SECTION 3.01 General Powers. The property, business and affairs of
the Corporation shall be managed by the Board.
SECTION 3.02 Number and Term of Office. The number of directors
shall be three (3). Directors need not be stockholders. Each of the directors of
the Corporation shall hold office until his successor shall have been duly
elected and shall qualify or until he shall resign or shall have been removed in
the manner hereinafter provided.
SECTION 3.03 Election of Directors. The directors shall be elected
annually by the stockholders of the Corporation and the persons receiving the
greatest number of votes, up to the number of directors to be elected, shall be
the directors.
SECTION 3.04 Resignations. Any director of the Corporation may
resign at any time by giving written notice to the Board or to the Secretary of
the Corporation. Any such resignation shall take effect at the time specified
therein, or, if the time be not specified, it shall take effect immediately upon
its receipt; and unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
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SECTION 3.05 Vacancies. Except as otherwise provided in the
Certificate of Incorporation, any vacancy in the Board, whether because of
death, resignation, disqualification, an increase in the number of directors, or
any other cause, may be filled by vote of the majority of the remaining
directors, although less than a quorum. Each director so chosen to fill a
vacancy shall hold office until his successor shall have been elected and shall
qualify or until he shall resign or shall have been removed in the manner
hereinafter provided.
SECTION 3.06 Place of Meeting, Etc. The Board may hold any of its
meetings at such place or places within or without the State of Delaware as the
Board may from time to time by resolution designate or as shall be designated by
the person or persons calling the meeting or in the notice or a waiver of notice
of any such meeting. Directors may participate in any regular or special meeting
of the Board by means of conference telephone or similar communications
equipment pursuant to which all persons participating in the meeting of the
Board can hear each other, and such participation shall constitute presence in
person at such meeting.
SECTION 3.07 First Meeting. The Board shall meet as soon as
practicable after each annual election of directors and notice of such first
meeting shall not be required.
SECTION 3.08 Regular Meetings. Regular meetings of the Board may be
held at such times as the Board shall from time to time by resolution determine.
If any day fixed for a regular meeting shall be a legal holiday at the place
where the meeting is to be held, then the meeting shall be held at the same hour
and place on the next succeeding business day not a legal holiday. Except as
provided by law, notice of regular meetings need not be given.
SECTION 3.09 Special Meetings. Special meetings of the Board shall
be held whenever called by the President or a majority of the authorized number
of directors. Except as otherwise provided by law or by these Bylaws, notice of
the time and place of each such special meeting shall be mailed to each
director, addressed to him at his residence or usual place of business, at least
five (5) days before the day on which the meeting is to be held, or shall be
sent to him at such place by telegraph or cable or be delivered personally not
less than forty-eight (48) hours before the time at which the meeting is to be
held. Except where otherwise
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required by law or by these Bylaws, notice of the purpose of a special meeting
need not be given. Notice of any meeting of the Board shall not be required to
be given to any director who is present at such meeting, except a director who
shall attend such meeting for the express purpose of objecting, at the beginning
of the meeting, to the transaction of any business because the meeting is not
lawfully called or convened.
SECTION 3.10 Quorum and Manner of Acting. Except as otherwise
provided in these Bylaws or by law, the presence of a majority of the authorized
number of directors shall be required to constitute a quorum for the transaction
of business at any meeting of the Board, and all matters shall be decided at any
such meeting, a quorum being present, by the affirmative votes of a majority of
the directors present. In the absence of a quorum, a majority of directors
present at any meeting may adjourn the same from time to time until a quorum
shall be present. Notice of any adjourned meeting need not be given. The
directors shall act only as a Board, and the individual directors shall have no
power as such.
SECTION 3.11 Action by Consent. Any action required or permitted to
be taken at any meeting of the Board or of any committee thereof may be taken
without a meeting if a written consent thereto is signed by all members of the
Board or of such committee, as the case may be, and such written consent is
filed with the minutes of proceedings of the Board or committee.
SECTION 3.12 Removal of Directors. Subject to the provisions of the
Certificate of Incorporation, any director may be removed at any time, either
with or without cause, by the affirmative vote of the stockholders having a
majority of the voting power of the Corporation given at a special meeting of
the stockholders called for the purpose.
SECTION 3.13 Compensation. The directors shall receive only such
compensation for their services as directors as may be allowed by resolution of
the Board. The Board may also provide that the Corporation shall reimburse each
such director for any expense incurred by him on account of his attendance at
any meetings of the Board or Committees of the Board. Neither the payment of
such compensation nor the reimbursement of such expenses shall be construed to
preclude any director from serving the Corporation or its subsidiaries in any
other capacity and receiving compensation therefor.
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SECTION 3.14 Committees. The Board may, by resolution passed by a
majority of the whole Board, designate one or more committees, each committee to
consist of one or more of the directors of the Corporation. Any such committee,
to the extent provided in the resolution of the Board and except as otherwise
limited by law, shall have and may exercise all the powers and authority of the
Board in the management of the business and affairs of the Corporation, and may
authorize the seal of the Corporation to be affixed to all papers which may
require it. Any such committee shall keep written minutes of its meetings and
report the same to the Board at the next regular meeting of the Board. In the
absence or disqualification of a member of a committee, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board to act at the meeting in the place of any such absent or disqualified
member.
ARTICLE IV
Officers
SECTION 4.01 Number. The officers of the Corporation shall be a
President, one or more Vice Presidents (the number thereof and their respective
titles to be determined by the Board), a Secretary and a Treasurer.
SECTION 4.02 Election, Term of Office and Qualifications. The
officers of the Corporation, except such officers as may be appointed in
accordance with Section 4.03, shall be elected annually by the Board at the
first meeting thereof held after the election thereof. Each officer shall hold
office until his successor shall have been duly chosen and shall qualify or
until his resignation or removal in the manner hereinafter provided.
SECTION 4.03 Assistants, Agents and Employees, Etc. In addition to
the officers specified in Section 4.01, the Board may appoint other assistants,
agents and employees as it may deem necessary or advisable, including one or
more Assistant Secretaries, and one or more Assistant Treasurers, each of whom
shall hold office for such period, have such authority, and perform such duties
as the Board may from time to time determine. The Board may delegate to any
officer of the Corporation or any committee of the Board the power to
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appoint, remove and prescribe the duties of any such assistants, agents or
employees.
SECTION 4.04 Removal. Any officer, assistant, agent or employee of
the Corporation may be removed, with or without cause, at any time: (i) in the
case of an officer, assistant, agent or employee appointed by the Board, only by
resolution of the Board; and (ii) in the case of an officer, assistant, agent or
employee, by any officer of the Corporation or committee of the Board upon whom
or which such power of removal may be conferred by the Board.
SECTION 4.05 Resignations. Any officer or assistant may resign at
any time by giving written notice of his resignation to the Board or the
Secretary of the Corporation. Any such resignation shall take effect at the time
specified therein, or, if the time be not specified, upon receipt thereof by the
Board or the Secretary, as the case may be; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
SECTION 4.06 Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification, or other cause, may be filled for the
unexpired portion of the term thereof in the manner prescribed in these Bylaws
for regular appointments or elections to such office.
SECTION 4.07 The President. The President of the Corporation shall
be the chief executive officer of the Corporation and shall have, subject to the
control of the Board, general and active supervision and management over the
business of the Corporation and over its several officers, assistants, agents
and employees.
SECTION 4.08 The Vice Presidents. Each Vice President shall have
such powers and perform such duties as the Board may from time to time
prescribe. At the request of the President, or in case of the President's
absence or inability to act upon the request of the Board, a Vice President
shall perform the duties of the President and when so acting, shall have all the
powers of, and be subject to all the restrictions upon, the President.
SECTION 4.09 The Secretary. The Secretary shall, if present, record
the proceedings of all meetings of the Board, of the stockholders, and of all
committees of which a secretary shall not have been appointed in one or more
books provided for that purpose; he shall see that
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all notices are duly given in accordance with these Bylaws and as required by
law; he shall be custodian of the seal of the Corporation and shall affix and
attest the seal to all documents to be executed on behalf of the Corporation
under its seal; and, in general, he shall perform all the duties incident to the
office of Secretary and such other duties as may from time to time be assigned
to him by the Board.
SECTION 4.10 The Treasurer. The Treasurer shall have the general
care and custody of the funds and securities of the Corporation, and shall
deposit all such funds in the name of the Corporation in such banks, trust
companies or other depositories as shall be selected by the Board. He shall
receive, and give receipts for, moneys due and payable to the Corporation from
any source whatsoever. He shall exercise general supervision over expenditures
and disbursements made by officers, agents and employees of the Corporation and
the preparation of such records and reports in connection therewith as may be
necessary or desirable. He shall, in general, perform all other duties incident
to the office of Treasurer and such other duties as from time to time may be
assigned to him by the Board.
SECTION 4.11 Compensation. The compensation of the officers of
the Corporation shall be fixed from time to time by the Board. None of such
officers shall be prevented from receiving such compensation by reason of the
fact that he is also a director of the Corporation. Nothing contained herein
shall preclude any officer from serving the Corporation, or any subsidiary
corporation, in any other capacity and receiving such compensation by reason
of the fact that he is also a director of the Corporation. Nothing contained
herein shall preclude any officer from serving the Corporation, or any
subsidiary corporation, in any other capacity and receiving proper
compensation therefor.
ARTICLE V
Contracts, Checks, Drafts, Bank Accounts, Etc.
SECTION 5.01 Execution of Contracts. The Board, except as in these
Bylaws otherwise provided, may authorize any officer or officers, agent or
agents, to enter into any contract or execute any instrument in the name of and
on behalf of the Corporation, and such authority may be general or confined to
specific instances; and unless so authorized by the Board or by these Bylaws, no
officer, agent or employee shall have any
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power or authority to bind the Corporation by any contract or engagement or to
pledge its credit or to render it liable for any purpose or in any amount.
SECTION 5.02 Checks, Drafts, Etc. All checks, drafts or other orders
for payment of money, notes or other evidence of indebtedness, issued in the
name of or payable to the Corporation, shall be signed or endorsed by such
person or persons and in such manner as, from time to time, shall be determined
by resolution of the Board. Each such officer, assistant, agent or attorney
shall give such bond, if any, as the Board may require.
SECTION 5.03 Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositories as the Board may select, or
as may be selected by any officer or officers, assistant or assistants, agent or
agents, or attorney or attorneys of the Corporation to whom such power shall
have been delegated by the Board. For the purpose of deposit and for the purpose
of collection for the account of the Corporation, the President, any Vice
President or the Treasurer (or any other officer or officers, assistant or
assistants, agent or agents, or attorney or attorneys of the Corporation who
shall from time to time be determined by the Board) may endorse, assign and
deliver checks, drafts and other orders for the payment of money which are
payable to the order of the Corporation.
SECTION 5.04 General and Special Bank Accounts. The Board may from
time to time authorize the opening and keeping of general and special bank
accounts with such banks, trust companies or other depositories as the Board may
select or as may be selected by any officer or officers, assistant or
assistants, agent or agents, or attorney or attorneys of the Corporation to whom
such power shall have been delegated by the Board. The Board may make such
special rules and regulations with respect to such bank accounts, not
inconsistent with the provisions of these Bylaws, as it may deem expedient.
ARTICLE VI
Shares and Their Transfer
SECTION 6.01 Certificates for Stock. Every owner of stock of the
Corporation shall be entitled to have a certificate or certificates, to be in
such form as the Board shall prescribe, certifying the number and class
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of shares of the stock of the Corporation owned by him. The certificates
representing shares of such stock shall be numbered in the order in which they
shall be issued and shall be signed in the name of the Corporation by the
President or a Vice President, and by the Secretary or an Assistant Secretary or
by the Treasurer or an Assistant Treasurer. Any of or all of the signatures on
the certificates may be a facsimile. In case any officer, transfer agent or
registrar who has signed, or whose facsimile signature has been placed upon, any
such certificate, shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, such certificate may nevertheless
be issued by the Corporation with the same effect as though the person who
signed such certificate, or whose facsimile signature shall have been placed
thereupon, were such officer, transfer agent or registrar at the date of issue.
A record shall be kept of the respective names of the persons, firms or
corporations owning the stock represented by such certificates, the number and
class of shares represented by such certificates, respectively, and the
respective dates thereof, and in case of cancellation, the respective dates of
cancellation. Every certificate surrendered to the Corporation for exchange or
transfer shall be cancelled, and no new certificate or certificates shall be
issued in exchange for any existing certificate until such existing certificate
shall have been so cancelled, except in cases provided for in Section 6.04.
SECTION 6.02 Transfers of Stock. Transfers of shares of stock of
the Corporation shall be made only on the books of the Corporation by the
registered holder thereof, or by his attorney thereunto authorized by power
of attorney duly executed and filed with the Secretary, or with a transfer
clerk or a transfer agent appointed as provided in Section 6.03, and upon
surrender of the certificate or certificates for such shares properly
endorsed and the payment of all taxes thereon. The person in whose name
shares of stock stand on the books of the Corporation shall be deemed the
owner thereof for all purposes as regards the Corporation. Whenever any
transfer of shares shall be made for collateral security, and not absolutely,
such fact shall be so expressed in the entry of transfer if, when the
certificate or certificates shall be presented to the Corporation for
transfer, both the transferor and the transferee request the Corporation to
do so.
SECTION 6.03 Regulations. The Board may make such rules and
regulations as it may deem expedient, not inconsistent with these Bylaws,
concerning the issue,
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transfer and registration of certificates for shares of the stock of the
Corporation. It may appoint, or authorize any officer or officers to appoint,
one or more transfer clerks or one or more transfer agents and one or more
registrars, and may require all certificates for stock to bear the signature or
signatures of any of them.
SECTION 6.04 Lost, Stolen, Destroyed, and Mutilated Certificates. In
any case of loss, theft, destruction, or mutilation of any certificate of stock,
another may be issued in its place upon proof of such loss, theft, destruction,
or mutilation and upon the giving of a bond of indemnity to the Corporation in
such form and in such sum as the Board may direct; provided, however, that a new
certificate may be issued without requiring any bond when, in the judgment of
the Board, it is proper so to do.
SECTION 6.05 Fixing Date for Determination of Stockholders of
Record. In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
or to express consent to corporate action in writing without a meeting, or
entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any other
change, conversion or exchange of stock or for the purpose of any other lawful
action, the Board may fix, in advance, a record date, which shall not be more
than 60 nor less than 10 days before the date of such meeting, nor more than 60
days prior to any other action. If in any case involving the determination of
stockholders for any purpose other than notice of or voting at a meeting of
stockholders or expressing consent to corporate action without a meeting the
Board shall not fix such a record date, the record date for determining
stockholders for such purpose shall be the close of business on the day on which
the Board shall adopt the resolution relating thereto. A determination of
stockholders entitled to notice of or to vote at a meeting of stockholders shall
apply to any adjournment of such meeting; provided, however, that the Board may
fix a new record date for the adjourned meeting.
ARTICLE VII
Indemnification
SECTION 7.01 Action, Etc. Other Than by or in the Right of the
Corporation. The Corporation shall indemnify any person who was or is a party or
is
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threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, and with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, that he had reasonable cause to believe that his conduct was
unlawful.
SECTION 7.02 Actions, Etc., by or in the Right of the Corporation.
The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
Corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such
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person is fairly and reasonably entitled to indemnity for such expenses which
the Court of Chancery or such other court shall deem proper.
SECTION 7.03 Determination of Right of Indemnification. Any
indemnification under Section 7.01 or 7.02 (unless ordered by a court) shall be
made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or agent
is proper in the circumstances because he has met the applicable standard of
conduct set forth in Section 7.01 and 7.02. Such determination shall be made (i)
by the Board by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (ii) if such a quorum is not
obtainable, or, even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (iii) by the
stockholders.
SECTION 7.04 Indemnification Against Expenses of Successful Party.
Notwithstanding the other provisions of this Article, to the extent that a
director, officer, employee or agent of the Corporation has been successful on
the merits or otherwise in defense of any action, suit or proceeding referred to
in Section 7.01 or 7.02, or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
SECTION 7.05 Prepaid Expenses. Expenses incurred by an officer or
director in defending a civil or criminal action, suit or proceeding may be paid
by the Corporation in advance of the final disposition of such action, suit or
proceeding as authorized by the Board in the specific case upon receipt of an
undertaking by or on behalf of the director or officer to repay such amount
unless it shall ultimately be determined that he is entitled to be indemnified
by the Corporation as authorized in this Article. Such expenses incurred by
other employees and agents may be so paid upon such terms and conditions, if
any, as the Board deems appropriate.
SECTION 7.06 Other Rights and Remedies. The indemnification provided
by this Article shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any Bylaws, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased
15
<PAGE>
to be a director, officer, employee or agent and shall inure to the benefit of
the heirs, executors and administrators of such a person.
SECTION 7.07 Insurance. Upon resolution passed by the Board, the
Corporation may purchase and maintain insurance on behalf of any person who is
or was a director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of this Article.
SECTION 7.08 Constituent Corporations. For the purposes of this
Article, references to "the Corporation" include all constituent corporations
absorbed in a consolidation or merger as well as the resulting or surviving
corporation, so that any person who is or was a director, officer, employee or
agent of such a constituent corporation or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise shall
stand in the same position under the provisions of this Article with respect to
the resulting or surviving corporation as he would if he had served the
resulting or surviving corporation in the same capacity.
SECTION 7.09 Other Enterprises Fines, and Serving at Corporation's
Request. For purposes of this Article, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this
Article.
16
<PAGE>
ARTICLE VIII
Miscellaneous
SECTION 8.01 Seal. The Board shall provide a corporate seal, which
shall be in the form of a circle and shall bear the name of the Corporation and
words and figures showing that the Corporation was incorporated in the State of
Delaware and the year of incorporation.
SECTION 8.02 Waiver of Notices. Whenever notice is required to be
given by these Bylaws or the Certificate of Incorporation or by law, the person
entitled to said notice may waive such notice in writing, either before or after
the time stated therein, and such waiver shall be deemed equivalent to notice.
SECTION 8.03 Amendments. These Bylaws, or any of them, may be
altered, amended or repealed, and new Bylaws may be made, (i) by the Board, by
vote of a majority of the number of directors then in office as directors,
acting at any meeting of the Board, or (ii) by the stockholders, at any annual
meeting of stockholders, without previous notice, or at any special meeting of
stockholders, provided that notice of such proposed amendment, modification,
repeal or adoption is given in the notice of special meeting. Any Bylaws made or
altered by the stockholders may be altered or repealed by either the Board or
the stockholders.
17
<PAGE>
Exhibit 3.21
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
RESORTS INTERNATIONAL HOTEL, INC.
To: The Secretary of State
State of New Jersey
Pursuant to Section 14A:9-2(4) and Section 14A:9-4(3), Corporations,
General, of the New Jersey Statutes, the undersigned corporation executes the
following Certificate of Amendment to its Certificate of Incorporation:
1. The name of the corporation is Resorts International Hotel, Inc.
2. The following amendment to the Certificate of Incorporation was
approved by the directors and thereafter duly approved by the sole
shareholder of the corporation on the 28th day of April, 1994.
Resolved, that Article Fourth is hereby deleted and that the new Article
Fourth is inserted into the Certificate of Incorporation as follows:
"FOURTH: The aggregated number of shares which the corporation is
authorized to issue is five million (5,000,000) shares of common stock, par
value one dollar ($1.00) per share."
3. The number of shares outstanding at the time of the adoption of the
amendment was 100. The total number of shares entitled to vote thereon was 100.
4. The number of shares voting for and against such amendment was as
follows:
NUMBER OF SHARES VOTING NUMBER OF SHARES VOTING
FOR AMENDMENT AGAINST AMENDMENT
100 0
------------------------ -----------------------
<PAGE>
5. The effective date of this Amendment to the Certificate of Incorporation
shall be MAY 3, 1994.
Dated this 3 day of May, 1994.
ATTEST: RESORTS INTERNATIONAL HOTEL, INC.
/s/William C. Murtha By: /s/Christopher D. Whitney
- -------------------------- --------------------------------
William C. Murtha Christopher D. Whitney
Assist. Secretary Executive Vice President
<PAGE>
CERTIFICATE OF AMENDMENT TO THE
CERTIFICATE OF INCORPORATION OF
RESORTS INTERNATIONAL HOTEL, INC.
To: The Secretary of State
State of New Jersey
Pursuant to the provisions of Section 14A:9-2(4) and Section 14A:9-4(3),
Corporations, General, of the New Jersey Statutes, the undersigned corporation
executes the following Certificate of Amendment to its Certificate of
Incorporation:
1. The name of the corporation is Resorts International Hotel, Inc.
2. The following amendment to the Certificate of Incorporation was
approved by the directors and thereafter duly adopted by the
shareholders of the corporation on the 23rd day of December, 1988.
Resolved, that new Article Seventh is hereby added to the Certificate of
Incorporation as follows:
"SEVENTH: No sale, assignment, transfer, pledge or other disposition (each
a "Transfer") of any securities, shares or any other interest in the corporation
(collectively, the "Securities") shall be effective unless and until such
Transfer has received the prior approval of the New Jersey Casino Control
Commission (the "Commission"). In the event that the Commission disapproves of a
certain Transfer of Securities in accordance with the provisions of the New
Jersey Casino Control Act, the Corporation shall have the absolute right to
repurchase such Securities at the lesser of the market price or the purchase
price. If the foregoing provision, or any portion thereof, is determined to be
unenforceable in any instance, such a determination does not make this
provision, or any portion thereof, void. If the foregoing provision, or any
portion thereof, is found to be void by virtue of any legal decision, statute,
rule or regulation, then the Board of Directors shall promptly adopt resolutions
that, in its opinion, best effect the purposes of this Article and which would
not be found void and propose to the stockholders an amendment to this
Certificate of Incorporation implementing the provisions suggested in such
resolutions."
3. The number of shares outstanding at the time of the adoption of the
amendment was 100. The total number of shares entitled to vote thereon was 100.
4. The number of shares voting for and against such amendment is as
follows:
<PAGE>
NUMBER OF SHARES VOTING NUMBER OF SHARES VOTING
FOR AMENDMENT AGAINST AMENDMENT
100 0
5. The effective date of this Amendment to the Certificate of Incorporation
shall be January 3, 1989.
Dated this 23rd day of December, 1988.
ATTEST: RESORTS INTERNATIONAL HOTEL, INC.
/s/Robert L. Gensamer By: /s/John M. Donnelly
- --------------------------- -----------------------------
Robert L. Gensamer John M. Donnelly
Assistant Secretary Vice President
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
of
RESORTS INTERNATIONAL HOTEL, INC.
(Formerly LEEDS AND LIPPINCOTT COMPANY)
The undersigned, in accordance with Section 14:A:9-5 of the Business
Corporation Act do hereby certify as follows:
FIRST: The name of the Corporation is RESORTS INTERNATIONAL HOTEL, INC. The
corporation was originally formed under the name The Leeds Company which name
was changed to the Leeds and Lippincott Company on December 22, 1920.
SECOND: The registered office of the corporation is to be the Resorts
International Hotel, Inc. on the Boardwalk at North Carolina Avenue, Atlantic
City, New Jersey 08404. The name of the registered agent at that address is
Anthony M. Rey.
THIRD: The purpose of the corporation is to engage in the conduct of casino
gaming, subject to the approval of the New Jersey Casino Control Commission,
and in any other activity within the purposes for which a corporation may be
organized under the New Jersey Business Corporation Act.
FOURTH: The aggregate number of shares which the corporation is authorized
to issue is twenty-five hundred (2,500) shares of common stock, par value one
dollar ($1.00) per share.
FIFTH: The number of directors currently constituting the entire board of
directors is five (5) and the names and addresses of such directors are as
follows:
<PAGE>
NAME ADDRESS
James M. Crosby Resorts International Hotel, Inc.
Atlantic City, N. J. 08404
I. G. Davis, Jr. Resorts International Hotel, Inc.
Atlantic City, N. J. 08404
Raymond M. Gore Resorts International, Inc.
915 N. E. 125th Street
North Miami, Florida 33161
Charles E. Murphy, Jr. 522 Fifth Avenue
New York, N. Y. 10036
Anthony M. Rey Resorts International Hotel, Inc.
Atlantic City, N. J. 08404
SIXTH: Subject to the provisions of Section 14A:6-6 of the New Jersey
Business Corporation Act, one or more or all of the directors of the corporation
may be removed with or without cause by the shareholders by the affirmative vote
of a majority of the votes cast by the holders of shares entitled to vote for
the election of directors. The board of directors shall also have the power to
remove one or more directors for cause and to suspend directors pending a final
determination that cause exists for removal.
IN WITNESS WHEREOF, we have hereunto set our hands and seals this 18th day
of August, 1977.
/s/Anthony M. Rey
----------------------------------
Anthony M. Rey - President
/s/Charles E. Murphy
----------------------------------
Charles E. Murphy - Secretary
- 2 -
<PAGE>
Exhibit 3.22
BY-LAWS
OF
RESORTS INTERNATIONAL HOTEL, INC.
-------------
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE.--The registered office shall be
established and maintained at Chalfonte-Haddon Hall on the Boardwalk at North
Carolina Avenue, in the City or Atlantic City, in the County of Atlantic, in the
State or New Jersey, and Anthony M. Rey shall be the registered agent of this
corporation in charge thereof.
SECTION 2. OTHER OFFICES.--The corporation may have other offices,
either within or without the State of New Jersey, at such place or places as the
Board or Directors may from time to time appoint or the business of the
corporation may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
SECTION 1. ANNUAL MEETINGS.--Annual meetings of shareholders for the
election or directors and for such other business as may be stated in the notice
of the meeting, shall
<PAGE>
be held at such place, either within or without the State of New Jersey, and at
such time and date as the Board of Directors, by resolution, shall determine and
as set forth in the notice of the meeting.
SECTION 2. SPECIAL MEETINGS.--Special meetings of the shareholders
for any purpose or purposes may be called by the Chairman of the Board of
Directors, the President, by resolution or the Board of Directors or at the
request of the holders of a majority of the outstanding shares and may be held
at such time and place within or without the State or New Jersey, as shall be
stated in the notice of the meeting.
SECTION 3. NOTICE OF MEETINGS.--Written notice, stating the place,
date and time of the meeting, and the purpose or purposes of the meeting, shall
be given to each shareholder entitled to vote thereat in the manner provided in
Section 4, Article VII, not less than ten (10) nor more than sixty (60) days
before the date of the meeting. No business other than that stated in the notice
shall be transacted at any meeting without the unanimous consent or all the
shareholders entitled to vote thereat.
SECTION 4. VOTING.--Each outstanding share shall be entitled to one
vote on each matter submitted to a vote at a meeting of shareholders. Each
shareholder may vote, in person or by proxy, but no proxy shall be voted
-2-
<PAGE>
after eleven months from its date unless such proxy provides for a longer
period, and in no event shall a proxy be valid after three years from the date
of execution. Upon the demand or any shareholder, before the voting begins, the
vote for directors shall be by ballot. All elections for directors shall be
decided by plurality vote; all other questions shall be decided by majority vote
except as otherwise provided by the Certificate of Incorporation or the laws of
the State of New Jersey.
A complete list of the shareholders entitled to vote at the ensuing
election, arranged in alphabetical order, with the address of each, and the
number of shares held by each, shall be produced and kept at the time and place
of the meeting during the whole time thereof, and may be inspected by any
shareholder who is present.
SECTION 5. QUORUM.--At any meeting, the presence, in person or by
proxy, of the holders of a majority of the shares of the corporation entitled to
vote shall constitute a quorum. When a quorum is once present to organize a
meeting, it is not broken by the subsequent withdrawal of any shareholder. In
case a quorum shall not be present at any meeting, a majority in interest of the
shareholders entitled to vote thereat, present in person or by proxy, shall have
power to adjourn the meeting from time to time,
-3-
<PAGE>
without notice other than announcement at the meeting, until the requisite
amount of shares entitled to vote shall be present. At any such adjourned
meeting at which the requisite amount of shares entitled to vote shall be
represented, any business may be transacted which might have been transacted at
the meeting as originally noticed; but only those shareholders entitled to vote
at the meeting as originally noticed shall be entitled to vote at any
adjournment or adjournments thereof.
SECTION 6. ACTION WITHOUT MEETING.--Except as otherwise provided by
statute, whenever shareholders are required or permitted to take any action at a
meeting or by vote, such action may be taken without a meeting, without prior
notice and without a vote, by consent in writing setting forth the action so
taken, signed by the holders of outstanding shares having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those shareholders who
have not consented in writing.
-4-
<PAGE>
ARTICLE III
DIRECTORS
SECTION 1. NUMBER AND TERM.--The number of directors constituting
the whole Board of Directors shall be such number not less than one nor more
than nine as may be fixed from time to time by resolution adopted by the
shareholders or by the Board. The number of directors constituting the first
Board shall be five. The directors shall be elected at the annual meeting of the
shareholders and each director shall be elected to serve until his successor
shall be elected and shall qualify.
SECTION 2. RESIGNATIONS.--Any director, member of a committee or
other officer may resign at any time. Such resignation shall be made in writing,
and shall be effective upon receipt thereof by the corporation or at such
subsequent time as shall be specified in the notice of resignation.
SECTION 3. VACANCIES.--Newly created directorships resulting from an
increase in the number of directors, any directorship not filled at the annual
meeting and any other vacancy, however caused, occurring in the Board may be
filled by the affirmative vote of a majority of the remaining directors even
though less than a quorum of the Board, or by a sole remaining director. A
director so elected by the
-5-
<PAGE>
Board shall hold office until the next succeeding annual meeting of shareholders
and until his successor shall have been elected and qualified.
SECTION 4. REMOVAL.--Any one or more or all of the directors may be
removed, (a) either with or without cause, at any time, by vote of the
shareholders holding a majority of the outstanding shares of the corporation
entitled to vote, present in person or by proxy, at any special meeting of the
shareholders or (b) for cause, by action of the Board of Directors at any
regular or special meeting of the Board. The Board of Directors may suspend any
director pending a final determination that cause exists for removal.
SECTION 5. POWERS.--The Board of Directors shall exercise all of the
powers of the corporation except such as are by law, or by the Certificate of
Incorporation of the corporation or by these By-Laws conferred upon or reserved
to the shareholders.
SECTION 6. COMMITTEES.--The Board of Directors may, by resolution or
resolutions passed by a majority of the whole Board, designate one or more
committees, each committee to consist of one or more directors of the
corporation. The Board may abolish any such committee at its pleasure or remove
any director from membership on such
-6-
<PAGE>
committee at any time, with or without cause. The Board may designate, by
resolution, one or more directors as alternate memebers of any committee, who
may replace any absent or disqualified member at any meeting of the committee.
Any such committee, to the extent provided in the resolution or in the By-Laws
of the corporation, shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the corporation, and
may authorize the seal of the corporation to be affixed to all papers which may
require it.
SECTION 7. MEETINGS.--The newly elected directors may hold their
first meeting for the purpose of organization and the transaction of business,
if a quorum be present, immediately after the annual meeting of the
shareholders; or the time and place of such meeting may be fixed by consent in
writing of all the directors.
Regular meetings of the Board of Directors may be held without
notice at such times and places within or without the State of New Jersey or the
United States of America, as may from time to time be fixed by the Board of
Directors.
Special meetings of the Board may be held at any time and place,
within or without the State of New Jersey or the United States of America, upon
the call of the Chairman of the Board, the President or a majority of the
directors
-7-
<PAGE>
on one day's notice to each director, either personally or by mail, telegram or
telex. A notice, or waiver of notice, need not specify the purpose of any
special meeting of the Board of Directors.
SECTION 8. QUORUM.--At all meetings of the Board of Directors, a
majority of the whole Board shall constitute a quorum for the transaction of
business, except that when the number of directors constituting the whole Board
shall be an even number, one half of that number shall constitute a quorum, or
when the whole Board consists of one director, then one director shall
constitute a quorum. If at any meeting of the Board there shall be less than a
quorum present, a majority of those present may adjourn the meeting from time to
time until a quorum is obtained, and no further notice thereof need be given
other than by announcement at the meeting which shall be so adjourned.
SECTION 9. COMPENSATION.--Directors shall not receive any stated
salary for their services as directors or as members of committees, but by
resolution of the Board a fixed fee and expenses of attendance may be allowed
for attendance at each meeting. Nothing herein contained shall be construed to
preclude any director from serving the corporation in any other capacity as an
officer, agent or otherwise, and receiving compensation therefor.
-8-
<PAGE>
SECTION 10. ACTION WITHOUT MEETING.--Any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting, if prior or subsequent to
such action a written consent thereto is signed by all members of the Board, or
of such committee as the case may be, and such written consent is filed with the
minutes of proceedings of the Board or Committee.
ARTICLE IV
OFFICERS
SECTION 1. OFFICERS.--The officers of the corporation shall be a
Vice Chairman, a President, a Treasurer, and a Secretary, all of whom shall be
elected by the Board of Directors and who shall hold office until their
successors are elected and qualified. In addition, the Board of Directors may
elect a Chairman, one or more Vice-Presidents and such Assistant Secretaries and
Assistant Treasurers as they may deem proper. None of the officers of the
corporation need be directors. The officers shall be elected at the first
meeting of the Board of Directors after each annual meeting. More than two
offices may be held by the same person. All vacancies occurring among any of the
officers shall be filled by the directors. Any officer may
-9-
<PAGE>
be removed by the Board at any time with or without cause. The salaries of all
officers and agents of the corporation shall be fixed by the Board of Directors.
SECTION 2. OTHER OFFICERS AND AGENTS.--The Board of Directors may
appoint such other officers and agents as it may deem advisable, who shall hold
their offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the Board of Directors.
SECTION 3. CHAIRMAN.--The Chairman of the Board of Directors, if one
be elected, shall preside at all meetings of the Board of Directors and he shall
have and perform such other duties as from time to time may be assigned to him
by the Board of Directors.
SECTION 4. VICE CHAIRMAN OF THE BOARD.--The Vice Chairman of the
Board shall be the chief executive officer of the Corporation and shall preside
at all meetings of the shareholders and the Board of Directors unless the
Chairman is present. Subject to the control of the Board of Directors, he shall
have general charge and active management of the conduct of the business of the
Corporation, shall see that all orders and resolutions of the Board of Directors
are carried into effect and shall have and perform all powers and duties
incident to the office of chief executive
-10-
<PAGE>
officer of a corporation (except when the President, as such, must act in order
to comply with the provisions of any law) and such other powers and duties as
from time to time may be assigned to him by the Board of Directors.
He shall execute bonds, mortgages and other contracts requiring a
seal, under the seal of the corporation, except where required or permitted by
law to be otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the Board of Directors to some
other officer or agent of the corporation.
SECTION 5. PRESIDENT.--The President shall be the chief operating
officer of the corporation, shall be the second executive officer or, if the
office of Vice Chairman of the Board shall be vacant, the chief executive
officer of the corporation and shall have general supervision over the business
of the corporation, subject to the direction of the Vice Chairman of the Board
and to the control of the Board. At the request of the Vice Chairman of the
Board, or in the case of his absence or inability to act, or if the office of
Vice Chairman of the Board shall be vacant, the President shall perform the
duties of the Vice Chairman of the Board and, when so acting, shall have all the
powers of the Vice Chairman of the Board. In general, he shall perform all
-11-
<PAGE>
duties incident to the office of President and have such other powers and duties
as from time to time may be assigned to him by the Chairman of the Board by the
Board.
SECTION 6. THE VICE-PRESIDENTS.--The Vice-President, or if there
shall be more than one, the Vice-Presidents in the order determined by the Board
of Directors, shall, in the absence or disability of the President, perform the
duties and exercise the powers of the President and shall perform such other
duties and have such other powers as the Board of Directors may from time to
time prescribe.
SECTION 7. THE SECRETARY AND ASSISTANT SECRETARIES.--The Secretary
shall attend all meetings of the Board of Directors and all meetings of the
shareholders and record all the proceedings of the meetings of the corporation
and of the Board of Directors in a book to be kept for that purpose and shall
perform like duties for the standing committees when required. He shall give, or
cause to be given, notice of all meetings of the shareholders and special
meetings of the Board of Directors, and shall perform such other duties as may
be prescribed by the Board of Directors or President, under whose supervision he
shall be. He shall have custody of the corporate seal of the corporation and he,
or an Assistant Secretary, shall have
-12-
<PAGE>
authority to affix the same to any instrument requiring it and when so affixed,
it may be attested by his signature or by the signature of such Assistant
Secretary. The Board of Directors may give general authority to any other
officer to affix the seal of the corporation and to attest the affixing by his
signature.
The Assistant Secretary, or if there be more than one, the Assistant
Secretaries in the order determined by the Board of Directors, shall, in the
absence or disability of the Secretary, perform the duties and exercise the
powers of the Secretary and shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
SECTION 8. THE TREASURER AND ASSISTANT TREASURERS.-- The Treasurer
shall have the custody of the corporate funds and securities and shall keep full
and accurate accounts of receipts and disbursements in books belonging to the
corporation and shall deposit all moneys and other valuable effects in the name
and to the credit of the corporation in such depositories as may be designated
by the Board of Directors.
He shall disburse the funds of the corporation as may be ordered by
the Board of Directors, taking proper vouchers for such disbursements, and shall
render to the President and the Board of Directors, at its regular meetings, or
when the Board of Directors so requires, an account
-13-
<PAGE>
of all his transactions as Treasurer and of the financial condition of the
corporation.
If required by the Board of Directors, he shall give the corporation
a bond in such sum and with such surety or sureties as shall be satisfactory to
the Board of Directors for the faithful performance of the duties of his office
and for the restoration to the corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his control belonging
to the corporation.
The Assistant Treasurer, or, if there shall be more than one, the
Assistant Treasurers in the order determined by the Board of Directors, shall,
in the absence or disability of the Treasurer, perform the duties and exercise
the powers of the Treasurer and shall perform such other duties and have such
other powers as the Board of Directors may from time to time prescribe.
ARTICLE V
SHARE CERTIFICATES
SECTION 1. CERTIFICATES.--The shares of the corporation shall be
represented by certificates signed by the Chairman or Vice Chairman of the Board
of Directors, or the President or a Vice-President, and by the Treasurer or
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<PAGE>
an Assistant Treasurer, or the Secretary or an Assistant Secretary. The
signatures of such individuals may be facsimiles if the certificates are
countersigned by a transfer agent or registered by a registrar, other than the
corporation or its employee.
SECTION 2. LOST CERTIFICATES. A new certificate may be issued in the
place of any certificate theretofore issued by the corporation, alleged to have
been lost or destroyed, and the directors may, in their discretion, require the
owner of the lost or destroyed certificate, or his legal representatives, to
give the corporation a bond, in such sum as they may direct, not exceeding
double the value of the stock, to indemnify the corporation against any claim
that may be made against it on account of the alleged loss of any such
certificate, or the issuance of any such new certificate.
SECTION 3. LEGEND ON CERTIFICATES.--If, and as long as, the
corporation holds a Casino License pursuant to the New Jersey Casino Control Act
P.L. 1977 c. 110 (the "Casino Act") each certificate representing a security (as
herein defined) issued by the corporation shall bear a legend on both sides as
follows:
"The security, share or other interest in the Corporation
represented by the within certificate shall not be sold, assigned,
pledged, transferred or
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<PAGE>
otherwise disposed of except upon condition that such sale, assignment,
pledge, transfer or other disposition shall be null and void and in all
respects ineffective if disapproved by the Casino Control Commission under
the New Jersey Casino Control Act P.L. 1977 c. 110 (the 'Act'). The
security, share or other interest represented by the within certificate
and the holder thereof are subject to all the applicable provisions of the
Act and in particular Section 105(a), (b), (d) and (e) of the Act."
SECTION 4. TRANSFER OF SHARES.--Subject to the additional
requirements of Article VI, shares of the corporation shall be transferable only
upon its books by the holders thereof in person or by their duly authorized
attorneys or legal representatives, and upon such transfer the old certificates
shall be surrendered to the corporation by the delivery thereof to the person
in charge of the stock and transfer books and ledgers, or to such other person
as the directors may designate, by whom they shall be cancelled, and new
certificates shall thereupon be issued. A record shall be made of each transfer
and whenever a transfer shall be made for collateral security, and not
absolutely, it shall be so expressed in the entry of the transfer.
SECTION 5. SHAREHOLDERS RECORD DATE.--In order that the corporation
may determine the shareholders entitled to notice of or to vote at any meeting
of shareholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive
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<PAGE>
payment of any dividend or other distribution or allotment of any rights, or
entitled to exercise any rights in respect of any change, conversion or exchange
of stock or for the purpose of any other lawful action, the Board of Directors
may fix, in advance, a record date, which shall not be more than sixty nor less
than ten days before the date of such meeting, nor more than sixty days prior to
any other action. A determination of shareholders of record entitled to notice
of or to vote at a meeting of shareholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
SECTION 6. REGISTERED SHAREHOLDERS.--The corporation shall be
entitled to recognize the exclusive right of a person registered on its books as
the owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by the laws of New Jersey.
SECTION 7. DIVIDENDS.--Subject to the provisions of the Certificate
of Incorporation, the Board of Directors
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<PAGE>
may, out of funds legally available therefor at any regular or special
meeting, declare dividends upon the outstanding shares of the corporation as
and when they deem expedient. Before declaring any dividend there may be set
apart out of any funds of the corporation available for dividends, such sum
or sums as the directors from time to time in their discretion deem proper
for working capital or as a reserve fund to meet contingencies or for
equalizing dividends or for such other purposes as the directors shall deem
conducive to the interests of the corporation.
ARTICLE VI
COMPLIANCE WITH THE CASINO ACT IF
THE CORPORATION OBTAINS A CASINO LICENSE
SECTION 1. SECURITIES SUBJECT TO CASINO ACT.--All securities,
shares, and other interests in the corporation shall be and the owners and
holders thereof shall own or hold such securities, shares or other interests in
the corporation subject to the applicable provisions of the Casino Act.
Section 2. TRANSFER OF SECURITIES, ETC.--No security, share or other
interest of the corporation shall be sold, assigned, pledged, transferred or
otherwise disposed of except upon an express condition that such sale,
assignment, pledge, transfer or other disposition shall be null and void and in
all respects ineffective if the same be
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disapproved by the Casino Control Commission (the "Commission") under the Casino
Act, and the Commission shall at all times have the right to approve future
transfers of such security, share or other interest in the corporation and in
any holding company, intermediary company or subsidiary of the corporation.
For the purposes hereof, "security" shall mean any instrument
evidencing a direct or indirect ownership or creditor interest in the
corporation, including but not limited to stock, common and preferred; bonds;
mortgages; debentures; security agreements; notes; warrants; options; and
rights.
No security, share or other interest in the corporation shall be
transferred on the books of the corporation unless the same has met all the
requirements of the Casino Act applicable thereto and satisfactory evidence
thereof has been received by the corporation.
SECTION 3. REPURCHASE OF SECURITY, ETC.--In the event that the
Commission shall disapprove the transfer of any security, share or other
interest in the corporation, the corporation shall have the absolute right to
repurchase such security, share or other interest in the corporation at the
lesser of (i) the then current market price or (ii) the price at which the
transferor acquired such security, share, or other interest.
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<PAGE>
ARTICLE VII
GENERAL PROVISIONS
SECTION 1. SEAL.--The corporate seal shall be circular in form and
shall contain the name of the corporation, the year of its creation and the
words "CORPORATE SEAL, NEW JERSEY." The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
SECTION 2. FISCAL YEAR.--The fiscal year of the corporation shall be
determined by resolution of the Board of Directors.
SECTION 3. CHECKS.--All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the corporation shall be signed by such officer or officers, agent or agents of
the corporation, and in such manner as shall be determined from time to time by
resolution of the Board of Directors.
SECTION 4. NOTICE AND WAIVER OF NOTICE.--Whenever any notice is
required by these By-Laws to be given, personal notice is not meant unless
expressly so stated. In computing the period of time for the giving of any
notice, the day on which the notice is given shall be excluded, and the day on
which the matter noticed is to occur shall be included. If notice is given by
mail, the notice shall be deemed to be
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given when deposited in the mail addressed to the person to whom it is directed
at his last address as it appears on the records of the corporation, with
postage prepaid thereon. Shareholders not entitled to vote shall not be entitled
to receive notice of any meetings except as otherwise provided by statute.
Whenever any notice whatever is required to be given under the
provisions of any law, or under the provisions of the Certificate of
Incorporation of the corporation. or these By-Laws, a waiver thereof in writing,
signed by the person or persons entitled to said notice, whether before or after
the time stated therein, shall be deemed equivalent thereto.
ARTICLE VIII
INDEMNIFICATION
The corporation shall indemnify each present and future director and
officer of the corporation against, and each such director and officer shall be
entitled without further act on his part to indemnity from the corporation for,
all expenses (including the amount of judgments and the amount of reasonable
settlements made with a view to the curtailment of costs of litigation, other
than amounts paid to the corporation itself) reasonably incurred by him in
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connection with or arising out of any action, suit or proceeding in which he may
be involved by reason of his being or having been a director or officer of the
corporation or of any company or corporation which he serves as a director or
officer at the request of the corporation, whether or not he continues to be
such director or officer at the time of incurring such expenses; provided,
however, that such indemnity shall not include any expenses incurred by any such
director or officer (a) in respect of matters as to which he shall be finally
adjudged in any such action, suit or proceeding to have been derelict in the
performance of his duties as such director or officer, or (b) in respect of any
matter in which any settlement is effected, to any amount in excess of the
amount of expenses which might reasonably have been incurred by such director or
officer in conducting such litigation to a final conclusion; provided, further,
that in no event shall anything herein contained be so construed as to protect,
or to authorize the corporation to indemnify, such director or officer against
any liability to the corporation or to its security holders to which he would
otherwise be subject by reason of his wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office as such director or officer. The
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foregoing right of indemnification shall inure to the benefit of the heirs,
executors or administrators of each such director or officer and shall be in
addition to all other rights to which such director or officer may be entitled
as a matter of law.
ARTICLE IX
AMENDMENTS
These By-Laws may be altered, amended, or repealed or new by-laws
may be adopted by the Board of Directors at any regular or special meeting of
the Board.
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Exhibit 3.23
CERTIFICATE OF INCORPORATION
STOCK CORPORATION
81-27 REV. 11172
STATE OF CONNECTICUT
SECRETARY OF THE STATE
30 Trinity Street, Hartford, CT 06106
The undersigned incorporator(s) hereby form(s) a corporation under the Stock
Corporation Act of the State of Connecticut:
1. The name of the corporation is Sun Cove, Ltd.
2. The nature of the business to be transacted, or the purposes to be promoted
or carried out by the corporation, follows:
To engage in any lawful act or activity for which corporations may be
formed under the Connecticut Stock Corporation Act.
<PAGE>
ATTACHMENT A
To the fullest extent permitted by the Connecticut Stock Corporation Act, as
amended from time to time, a director of the corporation shall not be liable to
the corporation or its stockholders for monetary damages for breach of duty as a
director.
<PAGE>
Exhibit 3.24
* * * * *
BY-LAWS
OF
SUN COVE, LTD.
* * * * *
ARTICLE I
OFFICES
Section 1. The principal office shall be located in Waterford,
Connecticut.
Section 2. The corporation may also have offices at such other places both
within and without the State of Connecticut as the board of directors may from
time to time determine or the business of the corporation may require.
ARTICLE II
ANNUAL MEETINGS OF SHAREHOLDERS
Section 1. All meetings of shareholders for the election of directors
shall be held in the State of Connecticut, at such place as may be fixed from
time to time by the board of directors.
Section 2. Annual meetings of shareholders, shall be held on the first
monday of July if not a legal holiday, and if a legal holiday, then on the next
secular day following, at 10:00 A.M., at which they shall elect by a plurality
vote a board of directors, and transact such other business as may properly be
brought before the meeting.
Section 3. Written or printed notice of the annual meeting stating the
place, day and hour of the meeting shall be delivered not less than seven nor
more than fifty days before the date of the meeting, either personally or by
mail, by or at the direction of the president, or the secretary, or the officer
or persons calling the meeting, to each shareholder of record entitled to vote
at such meeting.
ARTICLE III
SPECIAL MEETINGS OF SHAREHOLDERS
Section 1. Special meetings of shareholders for any purpose other than the
election of directors may be held at such time and place within or without the
State of Connecticut as shall be stated
<PAGE>
in the notice of the meeting or in a duly executed waiver of notice thereof.
Section 2. Special meetings of shareholders may be called at any time, for
any purpose or purposes, by the board of directors or by such other persons as
may be authorized by law.
Section 3. Written or printed notice of a special meeting stating the
place, day and hour of the meeting and the purpose or purposes for which the
meeting is called, shall be delivered not less than seven nor more than fifty
days before the date of the meeting, either personally or by mail, by or at the
direction of the president, or the secretary, or the officer or persons calling
the meeting, to each shareholder of record entitled to vote at such meeting.
Section 4. The business transacted at any special meeting of shareholders
shall be limited to the purposes stated in the notice.
ARTICLE IV
QUORUM AND VOTING OF STOCK
Section 1. The holders of a majority of the shares of stock issued and
outstanding and entitled to vote, represented in person or by proxy, shall
constitute a quorum at all meetings of the shareholders for the transaction of
business except as otherwise provided by statute or by the certificate of
incorporation. If, however, such quorum shall not be present or represented at
any meeting of the shareholders, the shareholders present in person or
represented by proxy shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented. At such adjourned meeting at which a quorum shall be
present or represented any business may be transacted which might have been
transacted at the meeting as originally notified.
Section 2. If a quorum is present, the affirmative vote of a majority of
the shares of stock represented at the meeting shall be the act of the
shareholders unless the vote of a greater number of shares of stock is required
by law or the certificate of incorporation.
Section 3. Each outstanding share of stock, having voting power, shall be
entitled to one vote on each matter submitted to a vote at a meeting of
shareholders. A shareholder may vote either in person or by proxy executed in
writing by the shareholder or by his duly authorized attorney-in-fact.
Section 4. Any action required to be taken at a meeting of the
shareholders may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by all
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of the shareholders entitled to vote with respect to the subject matter thereof.
ARTICLE V
DIRECTORS
Section 1. The number of directors shall be three (3). Directors need not
be residents of the State of Connecticut nor shareholders of the corporation.
The directors, other than the first board of directors, shall be elected at the
annual meeting of the shareholders, and each director elected shall serve until
the next succeeding annual meeting and until his successor shall have been
elected and qualified. The first board of directors shall hold office until the
first annual meeting of shareholders.
Section 2. Any vacancy occurring in the board of directors may be filled
by the affirmative vote of a majority of the remaining directors though less
than a quorum of the board of directors. A director elected to fill a vacancy
shall be elected for the unexpired portion of the term of his predecessor in
office.
Any vacancy created by an increase in the number of directorships shall be
filled for the unexpired term by action of shareholders.
Any other vacancy may be filled for the unexpired term by action of the
sole remaining director in office or by unanimous written consent of all the
directors without a meeting or at a meeting of the board of directors by the
concurring vote of a majority of the remaining directors in office, though such
remaining directors are less than a quorum, though the number of directors at
the meeting is less than a quorum and though such majority is less than a
quorum. A director elected to fill a newly created directorship shall serve
until the next succeeding annual meeting of shareholders and until his successor
shall have been elected and qualified.
Section 3. The business affairs of the corporation shall be managed by its
board of directors which may exercise all such powers of the corporation and do
all such lawful acts and things as are not by statute or by the certificate of
incorporation or by these by laws directed or required to be exercised or done
by the shareholders.
Section 4. The directors may keep the books of the corporation, except
such as are required by law to be kept within the state, outside of the State of
Connecticut, at such place or places as they may from time to time determine.
Section 5. The board of directors, by the affirmative vote of a majority
of the directors then in office, and irrespective of
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any personal interest of any of its members, shall have authority to establish
reasonable compensation of all directors for services to the corporation as
directors, officers or otherwise.
ARTICLE VI
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. Meetings of the board of directors, regular or special, may be
held either within or without the State of Connecticut.
Section 2. The first meeting of each newly elected board of directors
shall be held at such time and place as shall be fixed by the vote of the
shareholders at the annual meeting and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present, or it may convene at such place and
time as shall be fixed by the consent in writing of all the directors.
Section 3. Regular meetings of the board of directors may be held upon
such notice, or without notice, and at such time and at such place as shall from
time to time be determined by the board.
Section 4. Special meetings of the board of directors may be called by the
president on five (5) days' notice to each director, either personally or by
mail or by telegram; special meetings shall be called by the president or
secretary in like manner and on like notice on the written request of two
directors.
Section 5. Attendance of a director at any meeting shall constitute a
waiver of notice of such meeting, except where a director attends for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the board
of directors need be specified in the notice or waiver of notice of such
meeting.
Section 6. Two (2) of the directors shall constitute a quorum for the
transaction of business unless a greater number is required by law or by the
certificate of incorporation. The act of a majority of the directors present at
any meeting at which a quorum is present shall be the act of the board of
directors, unless the act of a greater number is required by statute or by the
certificate of incorporation. If a quorum shall not be present at any meeting of
directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present.
Section 7. Any action required or permitted to be taken at a meeting of
the directors may be taken without a meeting if a
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consent in writing, setting forth the action so taken, shall be signed by all of
the directors entitled to vote with respect to the subject matter thereof.
ARTICLE VII
EXECUTIVE COMMITTEE
Section 1. The board of directors, by resolution adopted by a majority of
the number of directors fixed by the by-laws or otherwise, may designate two or
more directors to constitute an executive committee, which committee, to the
extent provided in such resolution, shall have and exercise all of the authority
of the board of directors in the management of the corporation, except as
otherwise required by law. Vacancies in the membership of the committee shall be
filled by the board of directors at a regular or special meeting of the board of
directors. The executive committee shall keep regular minutes of its proceedings
and report the same to the board when required.
ARTICLE VIII
NOTICES
Section 1. Whenever, under the provisions of the statutes or of the
certificate of incorporation or of these by-laws, notice is required to be given
to any director or shareholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or shareholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegram.
Section 2. Whenever any notice whatever is required to be given under the
provisions of the statutes or under the provisions of the certificate of
incorporation or these by-laws, a waiver thereof in writing signed by the person
or persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice.
ARTICLE IX
OFFICERS
Section 1. The officers of the corporation shall be chosen by the board of
directors and shall be a president, a vice-president, a secretary and a
treasurer. The board of directors may also choose additional vice-presidents,
and one or more assistant secretaries and assistant treasurers.
Section 2. The board of directors at its first meeting after
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each annual meeting of shareholders shall choose a president, one or more
vice-presidents, a secretary and a treasurer, none of whom need be a member of
the board.
Section 3. The board of directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the board of directors.
Section 4. The salaries of all officers and agents of the corporation
shall be fixed by the board of directors.
Section 5. The officers of the corporation shall hold office until their
successors are chosen and qualify. Any officer elected or appointed by the board
of directors may be removed at any time by the affirmative vote of a majority of
the board of directors. Any vacancy occurring in any office of the corporation
shall be filled by the board of directors.
THE PRESIDENT
Section 6. The president shall be the chief executive officer of the
corporation, shall preside at all meetings of the shareholders and the board of
directors, shall have general and active management of the business of the
corporation and shall see that all orders and resolutions of the board of
directors are carried into effect.
Section 7. He shall execute bonds, mortgages and other contracts requiring
a seal, under the seal of the corporation, except where required or permitted by
law to be otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the board of directors to some
other officer or agent of the corporation.
THE VICE-PRESIDENTS
Section 8. The vice-president, or if there shall be more than one, the
vice-presidents in the order determined by the board of directors, shall, in the
absence or disability of the president, perform the duties and exercise the
powers of the president and shall perform such other duties and have such other
powers as the board of directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 9. The secretary shall attend all meetings of the board of
directors and all meetings of the shareholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He
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shall give, or cause to be given, notice of all meetings of the shareholders and
special meetings of the board of directors, and shall perform such other duties
as may be prescribed by the board of directors or president, under whose
supervision he shall be. He shall have custody of the corporate seal of the
corporation and he, or an assistant secretary, shall have authority to affix the
same to any instrument requiring it and when so affixed, it may be attested by
his signature or by the signature of such assistant secretary. The board of
directors may give general authority to any other officer to affix the seal of
the corporation and to attest the affixing by his signature.
Section 10. The assistant secretary, or if there be more than one, the
assistant secretaries in the order determined by the board of directors, shall,
in the absence or disability of the secretary, perform the duties and exercise
the powers of the secretary and shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors.
Section 12. He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and the board of directors, at
its regular meetings, or when the board of directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.
Section 13. If required by the board of directors, he shall give the
corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the board of directors for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the corporation.
Section 14. The assistant treasurer, or, if there shall be more than one,
the assistant treasurers in the order determined by the board of directors,
shall, in the absence or disability of the treasurer, perform the duties and
exercise the powers of the treasurer and shall perform such other duties and
have such other powers as the board of directors may from time to time
prescribe.
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ARTICLE X
CERTIFICATES FOR SHARES
Section 1. The shares of the corporation shall be represented by
certificates signed by the president or a vice-president and the secretary or an
assistant secretary or the treasurer or an assistant treasurer of the
corporation, and may be sealed with the seal of the corporation or a facsimile
thereof.
When the corporation is authorized to issue shares of more than one class
there shall be set forth upon the face or back of the certificate, or the
certificate shall have a statement that the corporation will furnish to any
shareholder upon request and without charge, a full or summary statement of the
designations, preferences, limitations, and relative rights of the shares of
each class authorized to be issued and, if the corporation is authorized to
issue any preferred or special class in series, the variations in the relative
rights and preferences between the shares of each such series so far as the same
have been fixed and determined and the authority of the board of directors to
fix and determine the relative rights and preferences of subsequent series.
Section 2. The signatures of the officers of the corporation upon a
certificate may be facsimiles if the certificate is countersigned by a transfer
agent, or registered by a registrar, other than the corporation itself or an
employee of the corporation. In case any officer who has signed or whose
facsimile signature has been placed upon such certificate shall have ceased to
be such officer before such certificate is issued, it may be issued by the
corporation with the same effect as if he were such officer at the date of its
issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate to be
issued in place of any certificate theretofore issued by the corporation alleged
to have been lost or destroyed. When authorizing such issue of a new
certificate, the board of directors, in its discretion and as a condition
precedent to the issuance thereof, may prescribe such terms and conditions as it
deems expedient, and may require such indemnities as it deems adequate, to
protect the corporation from any claim that may be made against it with respect
to any such certificate alleged to have been lost or destroyed.
TRANSFERS OF SHARES
Section 4. Upon surrender to the corporation or the transfer agent of the
corporation of a certificate representing shares duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, a new
certificate shall be
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issued to the person entitled thereto, and the old certificate cancelled and the
transaction recorded upon the books of the corporation.
CLOSING OF TRANSFER BOOKS
Section 5. For the purpose of determining shareholders entitled to notice
of or to vote at any meeting of shareholders, or shareholders entitled to
receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the board of directors may provide
that the stock transfer books shall be closed for a stated period but not to
exceed, in any case, seventy days. If the stock transfer books shall be closed
for the purpose of determining shareholders entitled to notice of or to vote at
a meeting of shareholders, such books shall be closed for at least ten days,
immediately preceding such meeting. In lieu of closing the stock transfer books,
the board of directors may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not more than seventy
days and, in case of a meeting of shareholders, not less than ten days prior to
the date on which the particular action requiring such determination of
shareholders is to be taken. If the stock transfer books are not closed and no
record date is fixed, the determination of shareholders entitled to notice of or
to vote at a meeting, or to receive payment of a dividend, the date on which
notice of the meeting is mailed or the date on which the resolution of the board
of directors declaring such dividend is adopted, as the case may be, shall be
the record date for such determination of shareholders. When a determination of
shareholders entitled to vote at any meeting of shareholders has been made as
provided in this section, such determination shall apply to any adjournment
thereof.
REGISTERED SHAREHOLDERS
Section 6. The corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Connecticut.
LIST OF SHAREHOLDERS
Section 7. The officer or agent having charge of the transfer books for
shares shall make, at least five days before each meeting of shareholders, a
complete list of the shareholders entitled to vote at such meeting, arranged in
alphabetical order, with the address of each and the number of shares held by
each,
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which list, for a period of five days prior to such meeting, shall be kept on
file at the principal office of the corporation and shall be subject to
inspection by any shareholder at any time during usual business hours. Such list
shall also be produced and kept open at the time and place of the meeting and
shall be subject to the inspection of any shareholder during the whole time of
the meeting. The original share ledger or transfer book, or a duplicate thereof,
shall be prima facie evidence as to who are the shareholders entitled to examine
such list or share ledger or transfer book or to vote at any meeting of the
shareholders.
ARTICLE XI
GENERAL PROVISIONS
DIVIDENDS
Section 1. Subject to the provisions of the certificate of incorporation
relating thereto, if any, dividends may be declared by the board of directors at
any regular or special meeting, pursuant to law. Dividend-Q may be paid in cash,
in property or in shares of the capital stock, subject to any provisions of the
certificate of incorporation.
Section 2. Before payment of any dividend, there may be set aside out of
any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve fund to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
CHECKS
Section 3. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the board of directors may from time to time designate.
FISCAL YEAR
Section 4. The fiscal year of the corporation shall be fixed by resolution
of the board of directors.
SEAL
Section 5. The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the words "Corporate Seal,
Connecticut". The seal may be used by
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causing it or a facsimile thereof to be impressed or affixed or in any manner
reproduced.
ARTICLE XII
AMENDMENTS
Section 1. These by-laws may be altered, amended or repealed or new
by-laws may be adopted (a) at any regular or special meeting of shareholders at
which a quorum is present or represented, by the affirmative vote of a majority
of the stock entitled to vote, provided notice of the proposed alteration,
amendment or repeal be contained in the notice of such meeting, or (b) by the
affirmative vote of a majority of the board of directors at any regular or
special meeting of the board.
ARTICLE XIII
INDEMNIFICATION
Section 1. The corporation shall to the fullest extent permitted by the
Connecticut Stock Corporation Act (the "Act") indemnify all officers and
directors of the corporation and advance expenses reasonably incurred by all
officers and directors of the corporation.
Section 2. To the fullest extent permitted by the Act, a director of the
corporation shall not be liable to the corporation or its shareholders for
monetary damages for breach of fiduciary duty as a director.
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Exhibit 4.6
SUN INTERNATIONAL HOTELS LIMITED
SUN INTERNATIONAL NORTH AMERICA, INC.
9% EXCHANGE SENIOR SUBORDINATED NOTES
DUE 2007
Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) ("DTC"), to the Issuers or their agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as requested by an authorized representative of
DTC (and any payment is made to Cede & Co. or such other entity as is requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
If a Holder or a beneficial owner of a Note is required by any Gaming
Authority to be found suitable, the Holder shall apply for a finding of
suitability within 30 days after a Gaming Authority request or sooner if so
required by such Gaming Authority. The applicant for a finding of suitability
must pay all costs of the investigation for such finding of suitability. If a
Holder or beneficial owner is required to be found suitable and is not found
suitable by a Gaming Authority, the Holder shall, to the extent required by
applicable law, dispose of his Notes within 30 days or within that time
prescribed by a Gaming Authority, whichever is earlier. If the Holder fails to
dispose of his Notes within such time period, the Issuers may, at their option,
redeem such Holder's Notes at, depending on applicable law, (i) the principal
amount thereof, together with accrued and unpaid interest to the date of the
finding of unsuitability by a Gaming Authority, (ii) the amount that such Holder
paid for the Notes, (iii) the fair market value of the Notes, (iv) the lowest of
clauses (i), (ii) and
<PAGE>
(iii), or (v) such other amount as may be determined by the appropriate Gaming
Authority.
<PAGE>
CUSIP NO.
No. $
Sun International Hotels Limited, an international business company
organized under the laws of the Commonwealth of The Bahamas ("Sun
International"), and Sun International North America, Inc., a Delaware
corporation and a wholly owned subsidiary of Sun International ("SINA" and,
together with Sun International, the "Issuers," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promise, jointly and severally, to pay to ____________, or
registered assigns, the principal sum of __________ DOLLARS ($___________), on
March 15, 2007.
Interest Payment Dates: March 15 and September 15.
Record Dates: March 1 and September 1.
Reference is made to the further provisions of this Security on the
reverse side, which will, for all purposes, have the same effect as if set forth
at this place.
<PAGE>
IN WITNESS WHEREOF, the Issuers have caused this Instrument to be duly
executed under its corporate seal.
SUN INTERNATIONAL HOTELS LIMITED
By: ____________________________________
Name:
Title:
Attest: _______________
SUN INTERNATIONAL NORTH AMERICA, INC.
By: ____________________________________
Name:
Title:
Attest: _______________
<PAGE>
This is one of the Securities described in the within-mentioned
Indenture.
Dated: ___________, 1997
THE BANK OF NEW YORK,
As Trustee
By: ____________________________________
Authorized Signatory
<PAGE>
SUN INTERNATIONAL HOTELS LIMITED
SUN INTERNATIONAL NORTH AMERICA, INC.
9% EXCHANGE SENIOR SUBORDINATED NOTES
DUE 2007
1. INTEREST.
Sun International Hotels Limited, an international business company
organized under the laws of the Commonwealth of The Bahamas ("Sun
International"), and Sun International North America, Inc., a Delaware
corporation and a wholly owned subsidiary of Sun International ("SINA" and,
together with Sun International, the "Issuers"), jointly and severally, promise
to pay interest on the principal amount of this Security at a rate of 9% per
annum. To the extent it is lawful, the Issuers promise to pay interest on any
interest payment due but unpaid on such principal amount at a rate of 9% per
annum compounded semi-annually.
The Issuers will pay interest semi-annually on March 15 and September
15 of each year (each, an "Interest Payment Date"), commencing September 15,
1997. Interest on the Securities will accrue from the most recent date to which
interest has been paid on the Securities pursuant to the Indenture or, if no
interest has been paid, from March 10, 1997. Interest will be computed on the
basis of a 360-day year consisting of twelve 30-day months.
2. METHOD OF PAYMENT.
The Issuers shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date. Holders
must surrender Securities to a Paying Agent to collect principal payments.
Except as provided below, the Issuers shall pay principal and interest in such
coin or currency of the United States of America as at the time of payment shall
be legal tender for payment of public and private debts ("Cash"). The
Securities will be payable as to principal, premium and interest at the office
or agency of the Issuers maintained for such purpose within the City and State
of New York or, at the option of the Issuers, payment of principal, premium and
interest may be made by check mailed to the Holders at their addresses set forth
in the register of
<PAGE>
Holders, and PROVIDED that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest and premium on
all Global Securities and all other Securities the Holders of which shall have
provided written wire transfer instructions to the Issuers and the Paying Agent.
3. PAYING AGENT AND REGISTRAR.
Initially, The Bank of New York (the "Trustee") will act as Paying
Agent and Registrar. The Issuers may change any Paying Agent, Registrar or
Co-registrar without notice to the Holders. The Issuers or any of their
respective Subsidiaries may, subject to certain exceptions, act as Paying Agent,
Registrar or Co-registrar.
4. INDENTURE.
The Issuers issued the Securities under an Indenture, dated March 10,
1997 (the "Indenture"), among the Issuers, the Guarantors named therein and the
Trustee. Capitalized terms herein are used as defined in the Indenture unless
otherwise defined herein. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act, as in effect on the date of the Indenture. The Securities are
subject to all such terms, and Holders of Securities are referred to the
Indenture and said Act for a statement of them. The Securities are senior
subordinated obligations of the Issuers limited in aggregate principal amount to
$200,000,000.
5. REDEMPTION.
Except as provided in this Paragraph 5 or as provided in Section 3.2
of the Indenture, the Issuers shall not have the right to redeem any Securities.
The Securities are redeemable in whole or from time to time in part at any time
on or after March 15, 2002, at the option of the Issuers, at the Redemption
Price (expressed as a percentage of principal amount) set forth below, if
redeemed during the 12-month period commencing March 15 of each of the years
indicated below, in each case (subject to the right of Holders of record on the
Record Date to receive interest due on an Interest Payment Date that is on or
prior to such Redemption Date), plus any accrued but unpaid interest to the
Redemption Date.
<PAGE>
Year Redemption Price
---- ----------------
2002 . . . . . . . . . . . . . . . . 104.50%
2003 . . . . . . . . . . . . . . . . 103.00%
2004 . . . . . . . . . . . . . . . . 101.50%
2005 and thereafter. . . . . . . . . 100.00%
On or prior to March 15, 2000, upon a Public Equity Offering of
Ordinary Shares for cash of Sun International, up to $70 million aggregate
principal amount of the Securities may be redeemed at the option of the Issuers
with cash from the Net Cash Proceeds of such Public Equity Offering, at 109% of
the principal amount thereof (subject to the right of Holders of record on a
Record Date to receive interest due on an Interest Payment Date that is on or
prior to such Redemption Date), plus accrued but unpaid interest to the date of
redemption; PROVIDED, HOWEVER, that immediately following each such redemption
not less than $130 million aggregate principal amount of the Notes are
outstanding, PROVIDED, FURTHER that such redemption shall occur within 120 days
of such Public Equity Offering.
The Notes may be redeemed at the option of the Issuers, in whole but
not in part, upon not less than 30 nor more than 60 days' notice given as
provided herein, at any time at a redemption price equal to the principal amount
thereof, plus accrued and unpaid interest, if any, thereon, to the date fixed
for redemption if, as a result of any change in or amendment to the laws,
treaties, rulings or regulations of The Bahamas, or of any political subdivision
or taxing authority thereof or therein, or any change in the official position
of the applicable taxing authority regarding the application or interpretation
of such laws, treaties, rulings or regulations (including a holding judgment or
order of a court of competent jurisdiction) or any execution thereof or
amendment thereto, which is enacted into law or otherwise becomes effective
after the Issue Date, either Issuer is or would be required on the next
succeeding Interest Payment Date to pay Additional Amounts on the Notes as a
result of the imposition of a Bahamian withholding tax and the payment of such
Additional Amounts cannot be avoided by the use of any reasonable measures
available to the Issuers which do not cause the Issuers to incur any material
costs. The Issuers shall also pay to holders on the redemption date any
Additional Amounts then due and which will become due as a result of the
redemption would otherwise be payable.
<PAGE>
If a Holder or a beneficial owner of a Note is required by any Gaming
Authority to be found suitable, the Holder shall apply for a finding of
suitability within 30 days after a Gaming Authority request or sooner if so
required by such Gaming Authority. The applicant for a finding of suitability
must pay all costs of the investigation for such finding of suitability. If a
Holder or beneficial owner is required to be found suitable and is not found
suitable by a Gaming Authority, the Holder shall, to the extent required by
applicable law, dispose of his Notes within 30 days or within that time
prescribed by a Gaming Authority, whichever is earlier. If the Holder fails to
dispose of his Notes within such time period, the Issuers may, at their option,
redeem such Holder's Notes at, depending on applicable law, (i) the principal
amount thereof, together with accrued and unpaid interest to the date of the
finding of unsuitability by a Gaming Authority, (ii) the amount that such Holder
paid for the Notes, (iii) the fair market value of the Notes, (iv) the lowest of
clauses (i), (ii) and (iii), or (v) such other amount as may be determined by
the appropriate Gaming Authority.
Any redemption of the Notes shall comply with Article III of the
Indenture.
6. NOTICE OF REDEMPTION.
Except as required by a Gaming Authority with respect to a redemption
provided for in Section 3.2 of the Indenture, notice of redemption will be
mailed by first class mail at least 30 days but not more than 60 days before the
Redemption Date (unless a shorter notice shall be required by any Governmental
Authority) to each Holder of Securities to be redeemed at his registered
address. Securities in denominations larger than $1,000 may be redeemed in
part.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption shall
have been deposited with the Paying Agent on such Redemption Date, the
Securities called for redemption will cease to bear interest and the only right
of the Holders of such Securities will be to receive payment of the Redemption
Price, plus any accrued but unpaid interest to the Redemption Date.
<PAGE>
7. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder may register
the transfer of, or exchange Securities in accordance with, the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange any Securities selected for redemption.
8. PERSONS DEEMED OWNERS.
The registered Holder of a Security may be treated as the owner of it
for all purposes.
9. UNCLAIMED MONEY.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agent(s) will pay the money back to
the Issuers at their written request. After that, all liability of the Trustee
and such Paying Agent(s) with respect to such money shall cease.
10. DISCHARGE PRIOR TO REDEMPTION OR MATURITY.
If the Issuers at any time deposit into an irrevocable trust with the
Trustee Cash or U.S. Government Obligations sufficient to pay the principal of
and interest on the Securities to redemption or maturity and comply with the
other provisions of the Indenture relating thereto, the Issuers will be
discharged from certain provisions of the Indenture and the Securities
(including the financial covenants, but excluding their obligation to pay the
principal of and interest on the Securities).
11. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the written consent of the Holders of a majority in
aggregate principal amount of the Securities then outstanding, and any existing
Default or Event of Default or compliance with any provision may be waived with
the consent of the Holders of a majority in aggregate principal amount of the
Securities then out-
<PAGE>
standing. Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Indenture or the Securities to, among other things, cure
any ambiguity, defect or inconsistency, comply with the TIA or make any other
change that does not adversely affect the rights of any Holder of a Security.
12. RESTRICTIVE COVENANTS.
The Indenture imposes certain limitations on the ability of the
Issuers and their respective Subsidiaries to, among other things, incur
additional Indebtedness and Disqualified Capital Stock, make payments in respect
of their Capital Stock, enter into transactions with Affiliates, incur Liens,
merge or consolidate with any other person and sell, lease, transfer or
otherwise dispose of substantially all of their properties or assets. The
limitations are subject to a number of important qualifications and exceptions.
The Issuers must annually report to the Trustee on compliance with such
limitations.
13. CHANGE OF CONTROL.
In the event there shall occur any Change of Control Triggering Event,
each Holder of Securities shall have the right, at such Holder's option but
subject to the limitations and conditions set forth in the Indenture, to require
the Issuers to purchase on the Change of Control Purchase Date in the manner
specified in the Indenture, all or any part (in integral multiples of $1,000) of
such Holder's Securities at a cash price equal to 101% of the principal amount
thereof, together with accrued but unpaid interest to and including the Change
of Control Purchase Date.
14. CERTAIN ASSET SALES.
The Indenture imposes certain limitations on the ability of the
Issuers to sell assets. In the event the proceeds from a permitted Asset Sale
exceed certain amounts, as specified in the Indenture, the Issuers generally
will be required either to reinvest the proceeds of such Asset Sale in their
business, use such proceeds to retire debt, or to make an asset sale offer to
purchase a certain amount of each Holder's Securities at 100% of the principal
amount thereof, plus accrued interest, if any, to the purchase date, as more
fully set forth in the Indenture.
<PAGE>
15. GAMING LAWS.
The rights of the Holder of this Security and any owner of any
beneficial interest in this Security are subject to various gaming laws and the
jurisdiction and requirements of the Gaming Authorities and the further
limitations and requirements set forth in the Indenture.
16. RANKING.
Payment of principal, premium, if any, and interest on the Securities
is subordinated, in the manner and to the extent set forth in the Indenture, to
the prior payment in full of all Senior Debt.
17. SUCCESSORS.
When a successor assumes all the obligations of its predecessor under
the Securities and the Indenture, the predecessor will be released from those
obligations.
18. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Securities. Subject to certain limitations,
Holders of a majority in aggregate principal amount of the Securities then
outstanding may direct the Trustee in its exercise of any trust or power.
19. TRUSTEE DEALINGS WITH ISSUERS.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Issuers or their respective Affiliates, and may otherwise deal with the Issuers
or their Affiliates as if it were not the Trustee.
<PAGE>
20. NO RECOURSE AGAINST OTHERS.
No direct or indirect stockholder, director, officer or employee, as
such, past, present or future of the Issuers or any successor corporation shall
have any personal liability in respect of the obligations of the Issuers under
the Securities or the Indenture by reason of his status as such stockholder,
director, officer or employee. Each Holder of a Security by accepting a
Security waives and releases all such liability. The waiver and release are
part of the consideration for the issuance of the Securities.
21. AUTHENTICATION.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this
Security.
22. ABBREVIATIONS AND DEFINED TERMS.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
23. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Issuers will cause CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
24. GOVERNING LAW.
The Indenture and the Securities shall be governed by and construed in
accordance with the internal laws of the State of New York.
<PAGE>
ASSIGNMENT
I or we assign this Security to
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of assignee
_________________
and irrevocably appoint ___________ agent to transfer this Security on the books
of the Issuers. The agent may substitute another to act for him.
Dated: __________ Signed: ____________________________________________________
___________________________________________________________________________
(Sign exactly as your name appears on the other side of this Security)
Signature guarantee:___________________________________
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Issuers
pursuant to Section 4.13 or Article X of the Indenture, check the appropriate
box:
/ / Section 4.13
/ / Article X
If you want to elect to have only part of this Security purchased by
the Issuers pursuant to the Indenture, state the principal amount you want to
have purchased: $________
Date: ________________ Signature: _____________________________________________
(Sign exactly as your name appears on the other side of this Security)
Signature guarantee:___________________________
<PAGE>
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized
Principal Amount Principal Amount Security following signatory of
of this Global of this Global such decrease (or Trustee or Securities
Date of Exchange Security Security increase) Custodian
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> Exhibit 5.1
<TABLE>
<CAPTION>
CRAVATH, SWAINE & MOORE
WORLDWIDE PLAZA
<S> <C> <C>
SAMUEL C. BUTLER ALLEN FINKELSON
GEORGE J. GILLESPIE, II RONALD R. ROLFE
THOMAS D. DARR PAUL C. SAUNDERS 825 EIGHTH AVENUE
MELVIN L. BEDRICK MARTIN L. SETIEL NEW YORK, NY 10019-7475
GEORGE T. LOWT DOUGLAS D. BROADWATER
ROBERT FOERNMAN ALAN C. STEPHENSON
ALAN J. KRUGRA MAT A. GHULMAN TELEPHONE: (212) 474-1000
JAMES A. EDWARDS STUART W. GOLD FACSIMILE: (212) 474-3700
FREDERICK O. SCANNER, JR. JOHN W. WHITE
CHRISTINE DEBMAN JOHN C. HESFROWER ---------
ROBERT S. RIFKIND EVAN B. CHESLER 33 KING WILLIAM STREET SUITE HSOP, AGIA PACIFIC FINANCE TOWER
DAVID COLES PATRICIA SEOGHEGUN LONDON, ECAR SDU ENGLAND 3 GARDER ROAD, CENTRAL
DAVID D. BROWNWOOD D. COLLIER KIRKMAN TELEPHONE: aa-171-485-1800 HONG KONG
PAUL M. DODYK MICHAEL C. GEHLER FACSIMILE: aa-171-850-1150 TELEPHONE: 858-8500-7200
RICHARD M. ALLEN DANIEL P. CUNNINGHAN FACSIMILE: 858-F509-7272
THOMAS R. GNOAR KATE R. MEINTERMAN
ROBERT D. JOFFE S. ROBBINS KIESSLING WRITER'S DIRECT DIAL NUMBER
ACADERT L. CARF ROBERT D. TURNER
<C> <C>
PHILIP A. GELSTON MARC S. ROSENBERG
RORY G. MILLSON WILLIAM O. GRANNAM
NEIL P. WESTREIGH LEWIS S. STEINBERG
FRANCIS P. WARRON SUSAN WEBSTER
RICHARD W. CLART WILLIAM M. WIOKN
WILLIAM P. POWERS, JR. TIMOTHY G. MASBAD
JAMES D. COOPER DAVID MERCADO
STEPHEN L. STEPHEN L. GORDON ROWAN D. WILSON
ROBERT A. KINDLER JOHN T. GAFTREY
DANIEL L. ROGLEY PETER T. BANSUK
GREGORY M. GNAIT GAMONS C. GOLDSTEIN
PETER B. WILSON PAUL MICHALDRI
JAMES C. VAROELL, II THOMAS G. RAFFERTY
ROBERT M. BARON MICHAEL S. GOLDMAN
KEVIN J. GREMAN GEORGE W. BILICIC, JR.
W. CLATTON JOHNSON RICHARD HALL
STEPHEN S. MADDEN ELIZABETH L. GRAYER
C. ALLEN PARKER JULIE A. NORTH
</TABLE>
March 20, 1997
Sun International Hotels Limited
Sun International North America, Inc.
9% Exchange Senior Subordinated Notes Due 2007
Ladies and Gentlemen:
We have acted as counsel for Sun International Hotels Limited, a corporation
organized and existing under the laws of the Commonwealth of The Bahamas
("Sun"), and Sun International North America, Inc., a Delaware corporation
and a wholly owned subsidiary of Sun ("SINA" and, together with Sun, the
"Issuers"), in connection with the filing by the Issuers and certain
guarantors (the "Guarantors") with the Securities and Exchange Commission
(the "Commission") of a registration statement on Form F-4 (the
"Registration Statement") under the Securities Act of 1933 (the "Act"),
for the purpose of registering the Issuers' offer to exchange (the "Exchange
Offer") an aggregate principal amount at maturity of up to $200,000,000 of
9% Exchange Senior Subordinated Notes due 2007 (the "Exchange Notes") of
the Issuers for a like principal amount at maturity of 9% Senior Subordinated
Notes due 2007 (the "Outstanding Notes"). The Outstanding Notes are and the
Exchange Notes are to be guaranteed by the Guarantors (the "Guarantees").
The Outstanding Notes have been and the Exchange Notes will be issued
pursuant to an Indenture dated as of March 10, 1997 (the "Indenture") among
the Issuers, the Guarantors and The Bank of New York, as trustee (the
"Trustee").
In that connection, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, corporate
records and other instruments as we have deemed necessary or appropriate for
the purposes of this opinion, including: (a) the Amended and Restated
Memorandum of Association of Sun; (b) the Articles
<PAGE>
of Association, as amended, of Sun; (c) the Certificate of Incorporation of
SINA, as amended; (d) the By-Laws of SINA; (e) resolutions adopted by the
Board of Directors of each of the Issuers on March 4, 1997; (f) the
Indenture; and (g) the Registration Statement.
Based on the foregoing, we are of opinion as follows:
1. The Indenture has been duly authorized, executed and delivered by
each Issuer and Guarantor;
2. The Exchange Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and duly
delivered in exchange for the Outstanding Notes in accordance with the
Exchange Offer in the manner described in the Registration Statement, will
constitute valid and binding obligations of each Issuer entitled to the
benefits of the Indenture and enforceable against each Issuer in accordance
with their terms (subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar laws
affecting creditors' right generally from time to time in effect and to
general principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, regardless of
whether in a proceeding in equity or at law); and
3. Assuming the due authorization, execution and delivery of the
Indenture by the Trustee, the Guarantees constitute valid and binding
obligations of the Guarantors, enforceable against the Guarantors in
accordance with their terms (subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fradulent transfer and other similar laws
affecting creditors' right generally from time to time in effect and to
general principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing, regardless of
whether in a proceeding in equity or at law).
4. The statements in the Registration Statement under the caption "Tax
Consequences - Certain United States Tax Considerations" insofar as they
purport to describe the provisions of the law and documents referred to
therein, fairly present the information disclosed therein in all material
respects.
<PAGE>
We are admitted to practice in the State of New York, and we express no
opinion as to any matters governed by any law other than the law of the State
of New York, the General Corporation Law of the State of Delaware and the
Federal law of the United States of America. In particular, we do not purport
to pass on any matter governed by the laws of the Commonwealth of The Bahamas,
the State of Connecticut, the State of New Jersey or the British Virgin
Islands.
In rendering this opinion, we have, with your approval, relied upon the
opinions dated March 20, 1997, of Harry B. Sands and Company, Bahamian
counsel for the Issuers, Rome McGuigan Sabanosh, P.C., Connecticut counsel
for the Issuers, Kozlov, Seaton, Romanini & Brooks P.C., New Jersey counsel
for the Issuers, and Smith-Hughes, Raworth & McKenzie, British Virgin Islands
counsel for the Issuers, as to all matters of law covered therein relating to
the laws of the Commonwealth of The Bahamas, the State of Connecticut, the
State of New Jersey or the British Virgin Islands, respectively, and we do
not express any opinion with respect to such law.
We hereby consent to the use of our name under the caption "Legal
Matters" in the Prospectus forming a part of the Registration Statement and
to the filing, as an exhibit to the Registration Statement and any
amendments thereto, of this opinion. In giving such consent we do not admit
that we come within the category of persons whose consent is required under
Section 7 of the Act.
Very truly yours,
/s/ Cravath, Swaine & Moore
----------------------------
Cravath, Swaine & Moore
Sun International Hotels Limited
Coral Towers
Paradise Island
The Bahamas
Sun International North America, Inc.
1133 Boardwalk
Atlantic City, NJ 08401
<PAGE>
Exhibit 5.2
[Letterhead of Kozlov, Seaton, Romanini, Brooks & Greenberg]
Re: Sun International Hotels Limited/Sun International North
America, Inc.
Dear Ladies and Gentlemen:
We have acted as counsel for Sun International Hotels, Limited, a
corporation organized and existing under the laws of the Commonwealth of The
Bahamas ("Sun"), and Sun International North America, Inc., a Delaware
corporation and a wholly owned subsidiary of Sun ("SINA" and, together with
Sun, the "Issuers"), in connection with the filing by the Issuers and certain
guarantors (the "Guarantors") with the Securities and Exchange Commission
(the "Commission") of a registration statement on Form F-4 (the "Registration
Statement") under the Securities Act of 1933 (the "Act"), for the purpose of
registering the Issuers' offer to exchange (the "Exchange Offer") an
aggregate principal amount at maturity of up to $200,000,000 of 9% Exchange
Senior Subordinated Notes due 2007 (the "Exchange Notes") of the Issuers for
a like principal amount at maturity of 9% Senior Subordinated Notes due 2007
(the "Outstanding Notes"). The Outstanding Notes are and the
<PAGE>
Exchange Notes are to be guaranteed by the Guarantors (the "Guarantees").
The Outstanding Notes have been and the Exchange Notes will be issued
pursuant to an Indenture dated as of March 10, 1997 (the "Indenture")
among the Issuers, the Guarantors and The Bank of New York, as trustee (the
"Trustee"). Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Registration Statement.
For the purpose of rendering this opinion, we examined originals or
copies certified or otherwise identified to our satisfaction as being true
copies of such records, documents, instruments and certificates as, in our
judgment, are necessary or appropriate to enable us to render the opinions
expressed below.
For the purposes of this opinion, we have also examined, to the extent
necessary, such records, documents and certificates of public officials and
officers or representatives of Sun International and SINA, and we have
considered such questions of law, as we deem necessary or appropriate. When
relevant facts were not independently established, we have relied upon the
representations and warranties as to factual matters contained in and made
pursuant to the foregoing documents, instruments, records and certificates.
However, we have not been requested to conduct, nor have we undertaken,
independent investigations to verify the content of factual statements made to
us in connection with the representations and warranties referred to above,
or the veracity of such representations and warranties.
Without limiting the generality of the foregoing, in rendering
2
<PAGE>
this opinion, we have, with your permission, assumed without independent
verification and without any investigation of any kind that: (i) the
obligations of each party set forth in the Registration Statement are its
legal, valid and binding obligations, enforceable in accordance with its
terms; (ii) all authorizations, approvals, actions and consents necessary to
be obtained, taken or received from and on notice to or filings with, any
governmental authority, other than New Jersey governmental authorities, that
are required for the due execution, delivery and performance by each of the
parties to the Registration Statement have been obtained, taken, received or
given and are in full force and effect; (iii) each natural person executing
any such documents has sufficient legal capacity to do so; (iv) the documents
have been executed and delivered in the forms of the drafts reviewed by us;
(v) except as disclosed in the Registration Statement, there are no oral or
written agreements or understanding that we are aware of, and there is no
course of prior dealing between any of the parties that we are aware of, that
would in any manner vary or supplement the terms and provisions of the
documents which we have examined or of the relationship set forth in the
Registration Statement or which would have an effect on the opinions
rendered herein; (vi) all documents submitted to us as originals are
authentic, the signatures on all documents that we examined are genuine and
all documents submitted to us as certified, conformed, photostatic or
facsimile copies conform to the original document; and (vii) all corporate
records made available to us by Sun
3
<PAGE>
International and SINA and all public records we have reviewed are accurate
and complete.
Whenever our opinion herein with respect to the existence or absence of
facts is qualified by the phrase "to our knowledge" or "known to us", or
similar language, it is intended to indicate that during the course of our
representation of Sun International and SINA, no information has come to our
attention which would give us actual knowledge of the existence or absence of
such facts or the inaccuracy of the statements made. Except as otherwise
stated herein, we have undertaken no independent investigation or verification
of such matters. The words "our knowledge" and similar language used herein
are intended to be limited to the (i) knowledge of the existence or absence of
the facts in the possession of the lawyers currently members or associated
with this firm who have worked on matters on behalf of Sun International and
SINA; and (ii) knowledge obtained from such certifications or representation
letters of Sun International and SINA, or such of its officers or other
representatives as we have deemed appropriate.
We are qualified to practice law in the State of New Jersey. The
opinions set forth herein are expressly limited to the laws of the State of
New Jersey and we do not purport to be experts on, or to express any opinion
herein concerning, any law other than the law in the State of New Jersey. We
express no opinion herein concerning, and we assume no responsibility as to
the laws or judicial decisions related to, or any orders, consents, or other
4
<PAGE>
authorizations or approvals as may be required by, any federal law, including
any federal securities law, or any state securities law or blue sky laws.
Our opinion herein regarding compliance of certain statutes, rules and
regulations and as to the lack of any required consents or approvals of,
authorizations by, registrations, declarations or filings with certain
governmental authorities, are based upon a review of those statutes, rules
and regulations which, in our experience, are normally applicable to
transactions of the type contemplated by the Registration Statement.
Based upon the foregoing and subject to the qualifications, exceptions
and assumptions set forth herein, we are of the opinion that:
1. RIH has been duly incorporated and is a corporation validly
existing and in good standing under the laws of the State of New Jersey,
with full corporate power and authority to own, lease and operate its
properties and conduct its businesses as described in the Registration
Statement.
2. The Indenture and the Registration Statement have been duly
authorized, executed and delivered by RIH.
3. The Guarantee has been duly authorized, executed and delivered by RIH.
4. The execution, delivery and performance of the Indenture and the
Registration Statement by RIH, the issuance and sale of the Guarantee,
compliance by RIH with all the provisions thereof and the consummation
of the transactions contemplated thereby will not conflict with or
constitute a breach or violation of (i) any New Jersey laws or
administrative regulations; (ii) rulings or orders of any New Jersey
court or governmental agency, body or official having jurisdiction over
RIH or its properties; or (iii) the charter and by-laws of RIH.
The opinions expressed herein are based upon the applicable laws,
regulations and ordinances in effect as of the date of this
5
<PAGE>
letter. In delivering this letter to you, we are not undertaking to apprise
you either or any transaction, events or occurrences taking place after the
date of this letter of which we may acquire any knowledge or of any change in
any applicable laws taking place after the date of this letter which may
affect the opinions set forth herein.
This opinion may be relied upon by Cravath, Swaine & Moore, United
States counsel for Sun International for the sole purpose of rendering its
opinion in connection with the Exchange Offer. We hereby consent to the use
of our name under the caption "Legal matters" in the Prospectus forming a
part of the Registration Statement and to the filing, as an exhibit to the
Registration Statement and any amendments thereto, of this opinion. In giving
such consent we do not admit that we come within the category of persons
whose consent is required under Section 7 of the Act.
KOZLOV, SEATON, ROMANINI, BROOKS & GREENBERG
/s/ Kozlov, Seaton, Romanini, Brooks & Greenberg
6
<PAGE>
Exhibit 5.3
ROME MCGUIGAN SABANOSH, P.C.
ONE STATE STREET 1000 LAFAYETTE BOULEVARD
HARTFORD, CT 06103-3101 BRIDGEPORT, CT 06604-4700
850-549-1000 203-382-9000
FAX 860-724-3921 FAX 203-382-8005
March 20, 1997
Sun International Hotels Limited
Coral Towers
Paradise Island
The Bahamas
Sun International North America, Inc.
1133 Boardwalk
Atlantic City, NJ 08401
Re: $200,000,000.00 Sun International Hotels Limited and Sun International
North America, Inc. 9% Exchange Senior Subordinated Notes due 2007
Gentlemen:
We have acted as special Connecticut counsel for Sun International Hotels
Limited, a corporation organized and existing under the laws of the
Commonwealth of The Bahamas ("Sun"), and Sun International North America,
Inc., a Delaware corporation and a wholly owned subsidiary of Sun ("SINA"
and, together with Sun, the "Issuers"), in connection with the filing by the
Issuers and certain guarantors (the "Guarantors") with the Securities and
Exchange Commission (the "Commission") of a registration statement on Form
F-4 (the "Registration Statement") under the Securities Act of 1933 (the
"Act"), for the purpose of registering the Issuers' offer to exchange (the
"Exchange Offer") an aggregate principal amount at maturity of up to
$200,000,000 of 9% Exchange Senior Subordinated Notes due 2007 (the "Exchange
Notes") of the Issuers for a like principal amount at maturity of 9% Senior
Subordinated Notes due 2007 (the "Outstanding Notes"). The Outstanding Notes
are and the Exchange Notes are to be guaranteed by the Guarantors (the
"Guarantees"). The Outstanding Notes have been and the Exchange Notes will be
issued pursuant to an Indenture dated as of March 10, 1997 (the "Indenture")
among the Issuers, the Guarantors and The Bank of New York, as trustee (the
"Trustee").
We have examined executed counterparts of:
1. The Registration Statement
2. The Indenture.
<PAGE>
Rome Mcguigan Sabonosh, P.C. ATTORNEYS AT LAW
Sun International Hotels Limited
Sun International North America, Inc.
March 20, 1997
Page 2
3. The Outstanding Notes.
4. The Exchange Notes.
5. The Guarantees
6. The Amended and Restated Gaming Facility Management Agreement between
the Mohegan Tribe of Indians of Connecticut and Trading Cove
Associates (the "Manager") dated August 30, 1995, as assigned by the
Mohegan Tribe of Indians of Connecticut to the Mohegan Tribal Gaming
Authority and as amended on September 29, 1995 (the "Management
Agreement").
The Registration Statement, the Indenture, the Outstanding Notes, the
Exchange Notes and the Guarantees are hereinafter collectively referred to as
the "Financing Documents".
In connection with the foregoing transaction, we have examined and
relied upon such documents, corporate and partnership records, certificates
of public officials and of officers of the Issuers, as we have considered
relevant and necessary as the basis for the opinion hereinafter set forth. As
to various questions of fact material to our opinion, we have relied, without
independent investigation, upon the representations made in the Financing
Documents and in certificates of the officers of the Issuers and the
Guarantors. We have assumed, without independent investigation, the
authenticity of all documents submitted to us as originals, the genuineness
of all signatures, the legal capacity of natural persons and the conformity
to the originals of all documents submitted to us as copies. We have also
assumed, without independent investigation, that all documents examined by us
have been duly and validly authorized, executed and delivered by, and are
legal, valid and binding on and enforceable against, each of the parties
thereto, except as otherwise specifically opined to herein as to Sun Cove.
The opinions expressed herein are limited to the existing laws of the
State of Connecticut. We express no opinion as to matters of federal law, or
as to matters of federal and state securities law, including but not limited
to so-called "blue sky" laws.
<PAGE>
Rome McGuigan Sabanosh, P.C. Attorneys at Law
Sun International Hotels Limited
Sun International North America, Inc.
March 20, 1997
Page 3
All opinions expressed herein are subject to the effect of applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws now or hereafter in effect relating to creditors' rights
generally and to general principles of equity. We express no opinion as to
the enforceability of any provisions of the Financing Documents.
Based upon and subject to the foregoing, it is our opinion that:
1. Sun Cove is a validly existing corporation in good standing under the
laws of the State of Connecticut and has all requisite power and
authority to conduct its business as described in the Registration
Statement; Sun Cove filed its Articles of Organization with the
Secretary of State of Connecticut on June 30, 1994.
2. The Indenture and the Registration Statement have been duly
authorized, executed and delivered by Sun Cove;
3. The Guarantees have been duly authorized, executed and delivered by
Sun Cove;
4. The execution, delivery and performance of the Indenture and the
Registration Statement by Sun Cove, the issuance of the Guarantees,
compliance by Sun Cove with all the provisions thereof and the
consummation of the transactions contemplated thereby will not
conflict with or constitute a breach of violation of (i) any
Connecticut laws or administrative regulations applicable to Sun
Cove, (ii) any rulings or orders of any Connecticut court or
governmental agency, body or official having jurisdiction over Sun
Cove or its properties or (iii) the charter or by-laws of Sun Cove;
5. None of the issuance and sale of the Exchange Notes or the
performance of the Issuers' obligations pursuant to the Financing
Documents or the performance by the Manager of the Management
Agreement will violate any Connecticut statute, rule or regulation
with respect to gaming to which any of the Issuers or the Manager is
subject or by which any of them is bound,
<PAGE>
ROME MCGUIGAN SABANOSH, P.C. ATTORNEYS AT LAW
Sun International Hotels Limited
Sun International North America, Inc.
March 20, 1997
Page 4
6. No authorization, approval, consent or order of any Connecticut
authority with jurisdiction over gaming is required to be obtained
by the Issuers in connection with the sale of the Exchange Notes;
7. There is no requirement under any Connecticut statute, rule or
regulation with respect to gaming which requires any holder of the
Exchange Notes, solely in its capacity as a holder of the Exchange
Notes, to apply for or receive any individual license, any
individual certificate or any other authorization from any
Connecticut authority to acquire or hold Exchange Notes under the
Indenture;
We consent to the reliance of Cravath, Swaine & Moore on this letter for
purposes of their opinion letter to you of even date herewith.
We hereby consent to the use of our name under the caption "Legal
Matters" in the Prospectus forming a part of the Registration Statement and
to the filing, as an exhibit to the Registration Statement and any amendments
thereto, of this opinion. In giving such consent we do not admit that we come
within the category of persons whose consent is required under Section 7 of
the Act.
Sincerely,
ROME MCGUIGAN SABANOSH, P.C.
/s/ Lewis Blome
By:--------------------------
a Principal
<PAGE>
Exhibit 5.4
LOGO
20th March, 1997
Sun International Hotels Limited,
Coral Towers,
Paradise Island,
The Bahamas
Sun International North America, Inc.,
1133 Boardwalk,
Atlantic City, N.J. 08401
Ladies and Gentlemen:
We have acted as counsel to Sun International Hotels Limited, a corporation
organized and existing under the laws of the Commonwealth of The Bahamas
("Sun"), in connection with the filing by Sun International North America,
Inc., a Delaware corporation and a wholly owned subsidiary of Sun ("SINA"
and, together with Sun, "the Issuers"), and certain guarantors ("the
Guarantors") with the Securities and Exchange Commission ("the Commission")
of a registration statement on Form F-4 ("the Registration Statement") under
the Securities Act of 1933 ("the Act"), for the purpose of registering the
Issuers' offer to exchange ("the Exchange Offer") an aggregate principal
amount at maturity of up to $200,000,000 of 9% Exchange Senior Subordinated
Notes due 2007 ("the Exchange Notes") of the Issuers for a like principal
amount at maturity of 9% Senior Subordinated Notes due 2007 ("the Outstanding
Notes"). The Outstanding Notes are and the Exchange Notes are to be
guaranteed by the Guarantors ("the Guarantees"). The Outstanding Notes have
been and the Exchange Notes will be issued pursuant to an Indenture dated as
of March 10, 1997 ("the Indenture") among the Issuers, the Guarantors and The
Bank of New York as trustee ("the Trustee").
In connection with this opinion, we have examined originals or copies
certified or otherwise identified to our satisfaction, of such other
documents, corporate records, certificates of officers of the Sun
International and the Bahamian Guarantors and of public officials, and other
Instruments, and we have conducted such other investigations
<PAGE>
OPINION LETTER 20th March, 1997
Registration Statement Page 2
of fact and law as we have deemed necessary or appropriate for the purposes
of this opinion. As to questions of fact material to such opinions, we have,
when relevant facts were not independently established by us, relied upon
certificates of Sun International, the Bahamian Guarantors or their
respective officers, or of public officials.
For the purposes of this opinion, we have assumed:
(a) the genuineness of all signatures, the authenticity of all
documents submitted to us as originals and the conformity to
original documents of all such documents submitted to us as copies;
(b) that such documents as are expressed to be governed by laws other
than those of the Commonwealth of The Bahamas constitute legal, valid
and binding obligations of each party thereto and are enforceable in
accordance with their respective terms under the laws by which they
are expressed to be governed;
(c) the capacity, power and authority of each of the parties to all
documents other than Sun International and the Bahamaian Guarantors
to execute, deliver and perform their respective obligations under
same;
(d) the due execution and delivery of all documents by or on behalf of
each of the parties thereto other than Sun International and the
Bahamian Guarantors; and
(e) that the public records examined by us were at the time of our
examination (which occurred not more than one week prior to the
date hereof) up to date and accurate.
We are qualified to render opinions only as to the laws of the Commonwealth
of The Bahamas applicable therein, and we express no opinion as the laws of
any other jurisdiction.
Based upon and relying upon the foregoing (and subject to the assumptions and
qualifications contained herein), we are of the following opinion:
(i) Sun International and each of the Bahamian Guarantors has all the
requisite corporate power and authority to execute, deliver and perform their
respective obligations under the Indenture and the Registration Statement to
authorize, issue and sell the Securities and the Guarantees, as applicable,
as contemplated by the Indenture and the Registration Statement;
<PAGE>
OPINION LETTER 20th March, 1997
Registration Statement
Page 3
(ii) the Securities have been duly and validly authorized, executed and
delivered by Sun International, and the Guarantees have been duly and validly
authorized, executed and delivered by the Bahamian Guarantors;
(iii) each of the Indenture and the Registration Statement has been duly and
validly authorized, executed and delivered by Sun International and each of
the Bahamian Guarantors;
(iv) the statements in the Registration Statement under the captions
"Enforceability of Civil Liabilities" and "Tax Consequences - Certain
Bahamian Tax Considerations," insofar as such statements constitute summaries
of Bahamian statutes, regulations, legal and governmental proceedings and
contracts to which Sun International or any of its subsidiaries is a party,
have been reviewed by us and are accurate summaries thereof in all material
respects;
(v) the execution, delivery and performance of the Indenture and the
Registration Statement by Sun International and each of the Bahamian
Guarantors, the issuance and sale of the Securities and the Guarantees,
compliance by Sun International and each of the Bahamian Guarantors, as
applicable, with all the provisions thereof and the consummation of the
transactions contemplated thereby will not conflict with or constitute a
breach or violation of (i) any Bahamian laws or administrative regulations
(ii) rulings or orders of any Bahamian court or governmental agency, body or
official having jurisdiction over Sun International, and of its Bahamian
subsidiaries or their respective properties or (iii) the respective Memoranda
or Articles of Association of Sun International or any of its Bahamian
subsidiaries;
(vi) no authorization, approval, consent or order of any governmental or
regulatory agency, body or official or any court of the Commonwealth of The
Bahamas is required to be obtained in connection with the issuance and sale
of the Securities or the Guarantees or the consummation of the transactions
contemplated by the Indenture and the Registration Statement; and
(vii) to the best of our knowledge, after due inquiry, neither Sun
International nor any of its Bahamian subsidiaries is in default or violation
of any Bahamian laws, administrative regulations or order of any court or
governmental agency, body, department, authority, board or official or other
regulatory body.
These opinions are subject to the following reservations:
<PAGE>
OPINION LETTER 20th March, 1997
Registration Statement Page 4
Any judgment obtained against Sun International or any Bahamian guarantor for
liquidated amounts in civil matters, after due trial by a court of competent
jurisdiction, and which is final and conclusive as to the issuers in
contention, are actionable in the Bahamian courts and are impeachable only on
the grounds of (a) fraud, (b) public policy and (c) natural justice.
Such enforceability may be limited (a) by the effect of applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws of general application
now or hereafter in effect, including without limitation, laws limiting or
affecting the enforcement of creditors' rights generally; (b) by the
application of general principles of equity (regardless of whether
enforcement is considered in proceedings at law or in equity); and (c) by
claims becoming barred under the Limitation Act or as claims may be or become
subject to defenses of set-off or counterclaim.
The charge of a higher rate of interest in the event of default may amount to
a penalty and as such may be unenforceable.
We hereby consent to reliance on the opinions expressed herein by Cravath,
Swaine, & Moore, United States Counsel to Sun International, solely for the
purpose of their respective opinions also to be rendered in connection with
the Exchange Offer, and not in any other manner for any other purpose, or by
any other persons, without our prior written consent.
We hereby consent to the use of our name under the captions "Legal
Matters" and "Enforceability of Civil Liabilities" in the Prospectus
forming a part of the Registration Statement and to the filing, as an exhibit
to the Registration Statement and any amendments thereto, of this Opinion. In
giving such consent we do not admit that we come within the category of
persons whose consent is required under Section 7 of the Act.
Yours faithfully,
/s/ Harry B. Sands & Company
HARRY B. SANDS & COMPANY
<PAGE>
Exhibit 5.5
-----------
SMITH-HUGHES, RAWORTH & McKENZIE
Barristers, Solicitors & Notaries Public
Partners: Armrek Chambers
DAVID A. RAWORTH, M.A. (Chron) 48 Main Street
P.O. Box 173
CHRISTOPHER S. McKENZIE, L.L.B. Road Town, Terrota
British Virgin Islands
Associates: Telephone: (809-48) 4-3384/5or 4-0619
ANTHONY G. LYNTON, L.L.B. Telefax: (809-48) 4-4845 or 4-2914
ROBERT I. McINTYRE, L.L.B. E-mail: [illegible address]
20th March, 1997
SUN INTERNATIONAL HOTELS LIMITED
Coral towers
Paradise Island
The Bahamas
SUN INTERNATIONSL NORTH AMERICA, INC.
1133 Boardwalk
Atlantic City, NJ 08401
USA
Dear Sirs:
Sun International Management Limited ("SIML")
We act as legal counsel to SIML and have been asked to provide you with this
opinion.
We are lawyers licensed to practice in the Territory of the British Virgin
Islands and as such are duly qualified to give this opinion.
We have acted as counsel for Sun International Hotels Limited, a
corporation organized and existing under the laws of the Commonwealth of
the Bahamas ("Sun"), and Sun International North America, Inc., a Delaware
corporation and a wholly owned subsidiary
<PAGE>
20th March, 1997
Page 2
of Sun ("SINA" and, together with Sun, the "Issuers"), in connection with the
filing by the Issuers and certain guarantors (the "Guarantors") with the
Securities and Exchange Commission (the"Commission") of a registration
statement on Form F-4 (the "Registration Statement") under the Securities Act
of 1933 (the "Act"), for the purpose of registering the Issuers' offer to
exchange (the "Exchange Offer") an aggregate principal amount at
maturity of up to $200,000,000 of 9% Exchange Senior Subordinated Notes due
2007 (the "Exchange Notes") of the Issuers for a like principal amount at
maturity of 9% Senior Subordinated Notes due 2007 ("Outstanding Notes"). The
Outstanding Notes are and the Exchange Notes are to be guaranteed by the
Guarantors (the "Guarantees"). The Outstanding Notes have been and the
Exchange Notes will be issued pursuant to an Indenture dated as of March 10th,
1997 (the "Indenture") among the Issuers, the Guarantors and The Bank of New
York, as trustee (the "Trustee").
We have assumed the accuracy of any and all representations of fact
expressed or implied by the documents we have examined.
We confirm as follows:
1. SIML is a corporation duly organized, validly existing and in good
standing under the laws of the British Virgin Islands.
2. The Indenture and the Registration Statement have been duly authorised,
executed and delivered by SIML.
3. The Guarantee has been duly authorised, executed and delivered by SIML.
4. To the best of our knowledge, having made due inquiry, SIML is not in
material default under or in material violation of any material laws or
regulations or any order of any court or governmental agency, authority
department, board or other regulatory body in the British Virgin Islands.
5. The execution, delivery and performance of the Indenture and the
Registration Statement by SIML, the issuance and sale of the Guarantee,
compliance by SIML with all the provisions thereof and the consummation
of the transactions contemplated thereby will not conflict with or
constitute a breach or violation of (i) any British Virgin Islands laws
or administrative regulations, (ii) rulings or orders
of any British Virgin Islands court or governmental agency, body or
official having jurisdiction over SIML or its properties or (iii) the
charter and by-laws of SIML.
This opinion is limited to the laws of the British Virgin Islands and no
opinion is given with respect to the laws of any other jurisdiction.
<PAGE>
20th March, 1997
Page 3
We understand that this opinion will be relied upon by the firm Cravath,
Swaine & Moore for the purposes of preparing their legal opinions.
We hereby consent to the use of our name under the caption "Legal Matters"
in the Prospectus forming a part of the Registration Statement and to the
filing, as an exhibit to the Registration Statement and any amendments
thereto, of this opinion. In giving such consent we do not admit that we come
within the category of persons whose consent is required under section 7 of
the Act.
Yours faithfully,
SMITH-HUGHES, RAWORTH & MCKENZIE
/s/ Anthony G. Lynton
Anthony G. Lynton
<PAGE>
Exhibit 10.8
OMNIBUS FINANCING AGREEMENT dated as of September 21, 1995, between
Trading Cove Associates ("TCA") and Sun International Hotels Limited
("SIHL").
WHEREAS, TCA has entered into a Management Agreement with the Mohegan Tribe
of Indians of Connecticut, pursuant to which TCA will construct and manage a
casino complex in Montville, Connecticut (the "Project");
WHEREAS, SIHL indirectly owns a 50% partnership interest in TCA;
WHEREAS, in connection with the Project, the Mohegan Gaming Authority (the
"Authority") proposes to issue $175 million of senior notes (the "Senior
Notes");
WHEREAS, in order to enable the Authority to sell the Senior Notes, SIHL
has been requested to (i) acquire $38.3 million of subordinated notes of the
Authority (the "Original Subordinated Notes") pursuant to a note purchase
agreement to be dated the same date as the closing of the sale of the Senior
Notes (the "Note Purchase Agreement"), (ii) provide a completion guarantee,
pursuant to which SIHL will guarantee that the Project will be completed (the
"Completion Guarantee"), (iii) arrange for a pledge 750,000 shares of SIHL stock
with a market value of approximately $43 million as collateral for its
obligation under the Completion Guarantee and (iv) post a letter of credit in an
amount up to $15 million to support its obligation under the Completion
Guarantee (the "Letter of Credit");
WHEREAS, if SIHL becomes obligated to pay funds under the Completion
Guarantee, the Authority is obligated to issue to SIHL certain subordinated
notes (the "Guarantee Subordinated Notes") having the same terms as the Original
Subordinated Notes except that the annual interest rate thereon shall be prime
plus one percent (the "Base Interest Rate"); the first $15 million of Guarantee
Subordinated Notes shall be "First Tranche Guarantee Sub Notes" and any
additional Guarantee Subordinated Notes shall be "Second Tranche Guarantee Sub
Notes"; and
WHEREAS, SIHL and TCA are party to a letter agreement dated May 12, 1995
(the "Letter Agreement").
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein, TCA and SIHL agree as follows:
1. Termination of Letter Agreement. The Letter Agreement is hereby
terminated.
2. Payments Relating to the Original Subordinated Notes. Interest on the
Original Subordinated Notes shall be payable by the Authority on the outstanding
principal balance thereof at an annual rate of fifteen percent (15%). Such
interest shall be paid in accordance with the Note Purchase Agreement.
Additional amounts
1
<PAGE>
with respect to the Original Subordinated Notes (the "Original Additional
Payments") shall be payable to the holders thereof by TCA on the outstanding
principal balance of such Original Subordinated Notes at an annual rate of
eleven and one-half percent (11 1/2%). The Original Additional Payments shall be
payable on the interest payment dates provided in the Original Subordinated
Notes directly from funds TCA would have received as its Management Fee. Subject
to the priorities set forth in Section 10 of this Agreement, to the extent that
TCA does not receive sufficient Management Fees to pay the full amount of any
Original Additional Payment when due, TCA shall pay the entire Management Fee it
receives as partial payment of the Original Additional Payment and such portion
of the Original Additional Payment not paid shall be deferred until TCA receives
sufficient Management Fees.
3. Acquisition of Original Subordinated Notes. The Original Partners of
TCA shall have the right at anytime to purchase without premium from SIHL a
participating interest (the "Participating Interest") in the Original
Subordinated Notes. The total percentage Participating Interest in the Original
Subordinated Notes which may be acquired shall not exceed the Original Partners'
Percentage Interest in TCA.
4. Reimbursement of Financing Costs. If the Original Subordinated Notes
are purchased by SIHL, TCA shall reimburse SIHL for the out-of-pocket expenses
(without premium) incurred solely for the purpose of arranging the purchase of
the Original Subordinated Notes. Such reimbursement shall not in any case exceed
two and one-half percent (2-1/2%) of the principal issue amount of the Original
Subordinated Notes.
5. Completion Guarantee Fee. If SIHL executes and delivers the Completion
Guarantee, TCA shall pay to SIHL a completion guarantee fee ("Completion
Guarantee Fee") equal to 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). The Completion Guarantee Fee shall be
payable from funds TCA would have received as its Management Fee with a priority
as set forth in Section 10.
6. Letter of Credit Fee. Upon the posting of the Letter of Credit, and on
each anniversary such Letter of Credit is outstanding, TCA shall pay to 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 fee
-------- -------
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.
7. Payments Related to First Tranche Guarantee Sub Notes. Interest on the
First Tranche Guarantee Sub Notes shall be payable by the Authority on the
outstanding principal balance thereof at the Base Interest Rate. Such interest
shall be paid in accordance with the Note Purchase Agreement. Additional amounts
with respect to the First Tranche Guarantee Sub Notes (the "First Tranche
Additional Payments") shall be payable to the holders thereof by TCA on the
outstanding principal balance of such First Tranche Guarantee Sub Notes at an
annual rate equal to the difference between 26 1/2% and the Base Interest Rate.
The First Tranche Additional Payments shall be payable on the interest payment
dates provided in the First Tranche Guarantee Sub Notes. If on such interest
payment date the Authority is not permitted to pay accrued interest on the First
Tranche Guarantee Sub Notes
2
<PAGE>
due to restrictions in the indenture for the Authority's Senior Notes, TCA shall
pay to the holder of the First Tranche Guarantee Sub Notes such accrued interest
(the "Deferred Interest Amount"); provided, however, if and when the Authority
-------- -------
does pay to the holder of First Tranche Guarantee Sub Notes any Deferred
Interest Amounts, TCA's obligation to pay any First Tranche Additional Payments
shall be reduced by the Deferred Interest Amounts previously paid by TCA; it
being the agreed upon principal that the holder of any First Tranche Guarantee
Sub Notes shall be entitled to an annual return of 26 1/2% on the principal
amount of such First Tranche Guarantee Sub Notes and that to the extent TCA paid
amounts otherwise payable by the Authority, once the Authority pays such amounts
an accounting shall be made, and repayments made to TCA as necessary, so that
the holders of the First Tranche Guarantee Sub Notes do not receive excess
payments. The First Tranche Additional Payments and Deferred Interest Amounts
shall be payable on the interest payment dates provided in the First Tranche
Guarantee Sub Notes directly from funds TCA would have received as its
Management Fee. Subject to the priorities set forth in Section 10 of this
Agreement, to the extent that TCA does not receive sufficient Management Fees to
pay the full amount of any First Tranche Additional Payment or Deferred Interest
Amount when due, TCA shall pay the entire Management Fee it receives as partial
payment of the First Tranche Additional Payment or Deferred Interest Amount and
such portion of the First Tranche Additional Payment or Deferred Interest Amount
not paid shall be deferred until TCA receives sufficient Management Fees.
8. Payments Related to Second Tranche Guarantee Sub Notes. Interest on
the Second Tranche Guarantee Sub Notes shall be payable by the Authority on the
outstanding principal balance thereof at the Base Interest Rate. Such interest
shall be paid in accordance with the Note Purchase Agreement. Additional
payments with respect to the Second Tranche Guarantee Sub Notes (the "Second
Tranche Additional Payments") shall be payable to the holders thereof by TCA on
the outstanding principal balance of such Second Tranche Guarantee Sub Notes at
an annual rate equal to the difference between 26 1/2% and the Base Interest
Rate. The Second Tranche Additional Payments shall be payable on the interest
payment dates provided in the Second Tranche Guarantee Sub Notes directly from
funds TCA would have received as its Management Fee. Subject to the priorities
set forth in Section 10 of this Agreement, to the extent that TCA does not
receive sufficient Management Fees to pay the full amount of any Second Tranche
Additional Payment when due, TCA shall pay the entire Management Fee it receives
as partial payment of the Second Tranche Additional Payment and such portion of
the Second Tranche Additional Payment not paid shall be deferred until TCA
receives sufficient Management Fees.
9. TCA Acquisition of First Tranche Guarantee Sub Notes. Subject to the
priorities set forth in Section 10 of this Agreement, on each of the first,
second and third anniversary of the issuance of the First Tranche Guarantee Sub
Notes, TCA shall acquire from the holders of the First Tranche Guarantee Sub
Notes one third of the outstanding principal amount of such First Tranche
Guarantee Sub Notes at a purchase price equal to the outstanding principal
amount thereof plus all accrued and unpaid interest thereon.
10. Priorities. The Parties agree that payments required to be made by TCA
out of Management Fees shall be prioritized as follows:
3
<PAGE>
(a) First, to return capital contributions made by the Partners of
TCA after the closing of the sale of the Original Subordinated Notes;
(b) Second, to pay Original Additional Payments;
(c) Third, to pay Deferred Interest Amounts and First Tranche
Additional Payments on a pari passu basis;
(d) Fourth, to pay Second Tranche Additional Payments;
(e) Fifth, to return capital contributions made by the Partners of
TCA before the closing of the sale of the Original Subordinated Notes; provided,
--------
however, such Partners shall use such funds to acquire outstanding First Tranche
- -------
Guarantee Sub Notes from the holders thereof;
(f) Sixth, to pay the Development Fee;
(g) Seventh, to pay the Management Services Fee;
(h) Eighth, to pay the Completion Guarantee Fee;
(i) Ninth, to pay the Partners, pro rata based on their respective
Percentage Interest, an amount equal to state and federal income tax obligations
calculated in accordance with Section 3.03a.(1) of the Partnership Agreement;
(j) Tenth, to acquire the First Tranche Guarantee Sub Notes in
accordance with Section 9;
(k) Eleventh, to pay the Organizational and Administrative Fee and
the Marketing and Casino Operations Fee on a pari passu basis; and
(l) Twelfth, to the distribution of Excess Cash to the Partners, pro
rata based on their respective Percentage Interest, as specified in Section 3.03
of the Partnership Agreement.
The obligation of TCA and its Partners under this Section 10 shall be
limited to applying or directing its receipts from the Authority or Project to
the payments in the priority herein set forth. The Partners of TCA shall have no
personal recourse liability to make any of the payments provided for in this
Section 10 of the Agreement.
11. Capitalized Terms. Capitalized words and terms used hereinbefore not
defined in this Agreement shall take on the definitions set forth in the Amended
and Restated Partnership Agreement of TCA (the "Partnership Agreement").
4
<PAGE>
12. Conflicts. If provisions of this Agreement should conflict with those
of the Partnership Agreement, then the provisions of this Agreement shall
prevail.
SUN INTERNATIONAL HOTELS LIMITED
By: /s/ Charles D. Adamo
------------------------------
Name: Charles D. Adamo
Title: Executive Vice President
TRADING COVE ASSOCIATES
RJH Development Corp.,
a New York Corporation
By: /s/Richard [ILLEGIBLE]
------------------------------
Name: Richard [ILLEGIBLE]
Title: President
Slavik Suites, Inc.
a Michigan corporation
By: /s/Del J. Lauria
------------------------------
Name: Del J. Lauria
Title: Executive Vice President
LMW Investments, Inc.
a Connecticut corporation
By: /s/Len Wolman
------------------------------
Name: Len Wolman
Title: President
5
<PAGE>
FIRST AMENDMENT TO
OMNIBUS FINANCING AGREEMENT
This First Amendment to Omnibus Financing Agreement (this "Agreement") is
made this 19th day of October, 1996 between Trading Cove Associates, a
Connecticut general partnership ("TCA"), 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:
On September 21, 1995, TCA and SIHL entered into that certain Omnibus
Financing Agreement (the "Omnibus Financing Agreement") which deals with certain
aspects of the construction, financing and management of a casino complex in
Montville, Connecticut. Capitalized terms used herein shall be understood to
have the meanings ascribed to them in the Omnibus Agreement.
TCA wishes to transfer to Waterford certain of its rights and obligations
under the Omnibus Agreement and Waterford wishes to acquire from TCA such rights
and has agreed to perform such obligations.
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein, TCA, SIHL and Waterford hereby agree as follows:
1. Acquisition of Original Subordinated Notes. TCA and SIHL hereby
acknowledge that Waterford is about to become the sole Original Partner of TCA
and has the right to purchase 50% of the outstanding Original Subordinated Notes
from SIHL, all as set forth in a Note Purchase Agreement being executed
concurrently herewith (the "Note Purchase Agreement").
2. First Tranche Guarantee Sub Notes. Section 9 of the Omnibus Agreement
is hereby deleted in its entirety and is hereby replaced with the following:
"On each of October 12, 1997, October 12, 1998 and October 12, 1999
(each a "Closing Date"), Waterford shall purchase from SIHL or an
Affiliate of SIHL, and SIHL shall sell, or cause an Affiliate to sell,
to Waterford that portion of the outstanding principal amount of the
First Tranche Guarantee Sub Notes equal, in each instance, to one-
sixth (1/6) of the principal amount of the First Tranche Guarantee Sub
Notes issued at any time which shall include all accrued and unpaid
interest thereon to and including each Closing Date and any First
Tranche Additional Payments that have accrued and are unpaid thereon
as of each Closing Date,
<PAGE>
reduced, pro rata, by any redemptions or payments which may have
occurred or been made prior to each applicable Closing Date. The
purchase price which will be paid by Waterford to SIHL on each Closing
Date will be equal to the outstanding principal balance of the First
Tranche Guarantee Sub Notes to be acquired on the Closing Date plus
all accrued and unpaid interest thereon as of each Closing Date and
any First Tranche Additional Payments that have accrued and are unpaid
thereon as of each Closing Date. The terms and conditions of such
purchase and sale transactions shall be substantially similar to the
terms and conditions upon which Waterford has or will acquire a
portion of the Original Subordinated Notes."
3. Additional Amounts. As the holder of a portion of the Original
Subordinated Notes and the First Tranche Guarantee Sub Notes, Waterford will be
entitled to all benefits provided for in the Omnibus Agreement, including, but
not being limited to a proportionate amount of each of the Original Additional
Payments and the First Tranche Additional Payments.
4. Redemption or Repurchase of Subordinated Notes. If the Authority shall
offer to purchase any of the Original Subordinated Notes, First Tranche
Subordinated Notes or Second Tranche Subordinated Notes (collectively, the
"Subordinated Notes"), other than a Change of Control Offer, 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 of
each of the Original Subordinated Notes, if any. Waterford agrees to tender that
principal amount of the Subordinated Notes that it owns equal to the product of
the aggregate principal amount of the Subordinated Notes to be tendered by SIHL
and its Affiliates times a fraction, the numerator of which is the aggregate
principal amount of Subordinated Notes then owned by Waterford and the
denominator of which is the aggregate principal amount of Subordinated 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
Subordinated 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 Subordinated 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 Subordinated Notes to be tendered pro rata, based
on the ratio of Subordinated Notes originally tendered by each of them, rounded
to the nearest multiple of $1,000, such that the total amount of Notes to be
tendered can be purchased in such offer. SIHL agrees that if it, or any of its
Affiliates, transfers any of the Subordinated Notes to anyone other than SIHL,
an Affiliate of SIHL or the Authority, 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 Subordinated Notes.
2
<PAGE>
As used in this Agreement, the term "Affiliate" shall have the meaning set
forth in the Note Purchase Agreement under which the Subordinated Notes were
originally issued.
SIHL hereby represents and warrants that it or its Affiliates own all of
the Subordinated Notes other than the Subordinated Notes owned by TCA; provided,
however, it is acknowledged that SIHL has pledged such Subordinated Notes to
certain banks pursuant to a credit facility.
5. Initial Original Subordinate Notes. The parties agree that in
satisfaction of the obligation to return capital contributions used by TCA to
purchase $1,700,000 principal amount of Original Subordinated Notes, TCA shall
return such capital contribution by distributing to each of SIHL and Waterford,
$850,000 in principal amount of Original Subordinated Notes, in accordance with
the terms of the Note Purchase Agreement.
6. Effective Date. The obligations hereunder are and shall be subject to
the conditions that:
(a) Waterford shall have successfully completed a debt offering to
finance the transactions referred to in Paragraph 1 hereof; and
(b) Waterford will own the entire Original Partners' percentage
interest in TCA and by itself will be the Original Partner within the
meaning of the TCA Partnership Agreement as then amended and in effect.
7. Continuation of Omnibus Agreement. The Omnibus Agreement, as amended
by this Agreement, shall continue in full force and effect and is hereby
ratified, confirmed and approved.
8. Counterpart. This Agreement may be executed in any number of
counterparts, each of which shall, for all purposes, constitute an original and
all of which, taken together, shall constitute one and the same agreement.
9. Successors and Assigns. This Agreement shall be binding upon, and
inured to the benefit of, the parties hereto and their respective successors and
assigns.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date first set forth above.
SUN INTERNATIONAL HOTELS LIMITED
By:
______________________________
Its:
_________________________
WATERFORD GAMING, L.L.C.
By: Slavic Suites, Inc.
Its: Member
By:
_________________________
Its:
____________________
By: LMW Investments, Inc.
Its: Member
By: [ILLEGIBLE]
-------------------------
Its: [ILLEGIBLE]
--------------------
TRADING COVE ASSOCIATES
By: Sun Cove, Ltd.
Its: Partner
By:
_________________________
Its:
____________________
By: LMW Investments, Inc.
Its: Partner
By: [ILLEGIBLE]
-------------------------
Its: [ILLEGIBLE]
--------------------
[SIGNATURES CONTINUED ON NEXT PAGE]
4
<PAGE>
By: RJH Development Corporation
Its: Partner
By:
_________________________
Its:
____________________
By: Slavic Suites, Inc.
Its: Partner
By:
_________________________
Its:
____________________
5
<PAGE>
Exhibit 12.1
SUN INTERNATIONAL HOTELS LIMITED
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
-------------------------------------------------
(000's omitted except in ratio calculation)
Year Ended
December 31,1996
Year Ended December 31, Pro Forma
1995 1996 As Adjusted
---------- ------------ ----------------
EARNINGS:
Earnings before income taxes and
extraordinary charges $ 18,894 $ 46,298 $ 53,011
Add:
Dividends received from associated
companies 1,453 1,419 1,419
Interest 9,746 8,571 31,000
Less:
Equity in earnings from associated
companies (2,313) (2,530) (2,530)
Capitalized interest - (438) (1,002)
-------- -------- --------
Total earnings 27,780 48,320 81,898
-------- -------- --------
FIXED CHARGES:
Interest 9,746 3,571 31,000
-------- -------- --------
Total fixed charges 9,746 3,571 31,000
-------- -------- --------
Ratio of earnings to fixed charges 2.9 13.5 2.6
--- ---- ---
<PAGE>
Exhibit 23.3
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form F-4 No. 333-____) and related Prospectus of
Sun International Hotels Limited and Sun International North America, Inc. for
the registration of 9% Exchange Senior Subordinated Notes due 2007 and to the
incorporation by reference therein of our report dated July 14, 1994, with
respect to the combined financial statements and schedules of PIRL Group
incorporated by reference in the Annual Report (Form 20-F) of Sun International
Hotels Limited filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
-----------------------------------
Ernst & Young LLP
Philadelphia, Pennsylvania
March 20, 1997
<PAGE>
Exhibit 23.4
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
To Sun International Hotels Limited:
As independent public accountants, we hereby consent to the use of (1) our
report on the Company's financial statements dated February 21, 1997 included in
this registration statement (2) our report on the Company's financial statements
dated January 31, 1996 incorporated by reference in this registration
statement (3) our report on the balance sheet as of September 28, 1995 of the
Mohegan Tribal Gaming Authority dated December 15, 1995 incorporated by
reference in this registration statement and (4) to all references to our Firm
included in this registration statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Roseland, New Jersey
March 20, 1997
<PAGE>
Exhibit 23.5
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form F-4 No. 333-_____) and related Prospectus of Sun
International Hotels Limited and Sun International North America, Inc. for the
registration of 9% Exchange Senior Subordinated Notes due 2007 and to the
incorporation by reference therein of our report dated February 14, 1997, except
for Note 18, as to which the date is March 17, 1997, with respect to the
consolidated financial statements and schedule of Sun International North
America, Inc. included in its Annual Report (Form 10-K) for the year ended
December 31, 1996, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
-----------------------------------
Ernst & Young LLP
Philadelphia, Pennsylvania
March 20, 1997
<PAGE>
Exhibit 24.1
SUN INTERNATIONAL HOTELS LIMITED
POWER OF ATTORNEY
The undersigned directors and/or officers, or both, of Sun International
Hotels Limited, a corporation organized and existing under the laws of the
Commonwealth of The Bahamas ("Sun International"), which is about to file with
the Securities and Exchange Commission, Washington, D.C., under the provisions
of the Securities Act of 1933, as amended, a Registration Statement, hereby
constitute and appoint Charles D. Adamo, Howard B. Kerzner, John Allison and
Kevin DeSanctis alone or acting together, their true and lawful
attorneys-in-fact and agents, and each of them, with full power to act without
the others, their true and lawful attorneys-in-fact and agent, for them and in
their names, place and stead, in any and all capacities, to sign said
Registration Statement, and any and all amendments thereto (including any
post-effective amendments), with power where appropriate to affix the corporate
seal of Sun International thereto and to attest said seal, and to file said
Registration Statement and such amendments, with all exhibits thereto, and any
and all other documents in connection therewith, with the Securities and
Exchange Commission, hereby granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform any and all acts and
things requisite and necessary to be done in and about the premises as fully to
all intents and purposes as they might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or any of them, may
pursuant to the requirements of the Securities Act of 1933, lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have duly signed this Power of
Attorney in the capacities and on the dates indicated.
Name Title
---- -----
/s/ Solomon Kerzner Chairman of the Board of Directors and Chief
- --------------------------- Executive Officer (Principal Executive Officer)
Solomon Kerzner
/s/ Derek Hawton Director
- ---------------------------
Derek Hawton
/s/ Peter Buckley Director
- ---------------------------
Peter Buckley
/s/ Howard Marks Director
- ---------------------------
Howard Marks
/s/ Eric Siegel Director
- ---------------------------
Eric Siegel
/s/ John Allison Chief Financial Officer and Secretary (Principal
- --------------------------- Financial and Accounting Officer)
John Allison
/s/ Mandy Miller Authorized Representative in the United States
- ---------------------------
Mandy Miller
Date: March 20, 1997
<PAGE>
Exhibit 24.2
SUN INTERNATIONAL NORTH AMERICA, INC.
POWER OF ATTORNEY
The undersigned directors and/or officers, or both, of Sun International
North America, Inc., a Delaware corporation ("SINA"), which is about to file
with the Securities and Exchange Commission, Washington, D.C., under the
provisions of the Securities Act of 1933, as amended, a Registration Statement,
hereby constitute and appoint Charles D. Adamo, Howard B. Kerzner, John Allison
and Kevin DeSanctis alone or acting together, their true and lawful
attorneys-in-fact and agents, and each of them, with full power to act without
the others, their true and lawful attorneys-in-fact and agent, for them and in
their names, place and stead, in any and all capacities, to sign said
Registration Statement, and any and all amendments thereto (including any
post-effective amendments), with power where appropriate to affix the corporate
seal of SINA thereto and to attest said seal, and to file said Registration
Statement and such amendments, with all exhibits thereto, and any and all other
documents in connection therewith, with the Securities and Exchange Commission,
hereby granting unto said attorneys-in-fact and agents, and each of them, full
power and authority to do and perform any and all acts and things requisite and
necessary to be done in and about the premises as fully to all intents and
purposes as they might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may pursuant to the
requirements of the Securities Act of 1933, lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned have duly signed this Power of
Attorney in the capacities and on the dates indicated.
Name Title
---- -----
/s/ Howard Kerzner Chairman of the Board of Directors and Chief
- --------------------------- Executive Officer (Principal Executive Officer)
Howard Kerzner
/s/ Kevin DeSanctis Director (Principal Financial and Accounting
- --------------------------- Officer)
Kevin DeSanctis
/s/ Charles Adamo Director
- ---------------------------
Charles Adamo
Date: March 20, 1997
<PAGE>
Exhibit 24.3
SUN INTERNATIONAL BAHAMAS LIMITED
POWER OF ATTORNEY
The undersigned directors and/or officers, or both, of Sun International
Bahamas Limited, a corporation organized and existing under the laws of the
Commonwealth of The Bahamas ("SIBL"), which is about to file with the Securities
and Exchange Commission, Washington, D.C., under the provisions of the
Securities Act of 1933, as amended, a Registration Statement, hereby constitute
and appoint Charles D. Adamo, Howard B. Kerzner, John Allison and Kevin
DeSanctis alone or acting together, their true and lawful attorneys-in-fact and
agents, and each of them, with full power to act without the others, their true
and lawful attorneys-in-fact and agent, for them and in their names, place and
stead, in any and all capacities, to sign said Registration Statement, and any
and all amendments thereto (including any post-effective amendments), with power
where appropriate to affix the corporate seal of SIBL thereto and to attest said
seal, and to file said Registration Statement and such amendments, with all
exhibits thereto, and any and all other documents in connection therewith, with
the Securities and Exchange Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises as fully to all intents and purposes as they might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may pursuant to the requirements
of the Securities Act of 1933, lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have duly signed this Power of
Attorney in the capacities and on the dates indicated.
Name Title
---- -----
/s/ Solomon Kerzner Chairman of the Board of Directors and Chief
- --------------------------- Executive Officer (Principal Executive Officer)
Solomon Kerzner
/s/ Kevin DeSanctis Director (Principal Financial and Accounting
- --------------------------- Officer)
Kevin DeSanctis
/s/ J.B. Farrington Director
- ---------------------------
J.B. Farrington
/s/ John Allison Director
- ---------------------------
John Allison
/s/ Mandy Miller Authorized Representative in the United States
- ---------------------------
Mandy Miller
Date: March 20, 1997
<PAGE>
Exhibit 24.4
PARADISE ACQUISITIONS LIMITED
POWER OF ATTORNEY
The undersigned directors and/or officers, or both, of Paradise
Acquisitions Limited, a corporation organized and existing under the laws of the
Commonwealth of The Bahamas ("PAL"), which is about to file with the Securities
and Exchange Commission, Washington, D.C., under the provisions of the
Securities Act of 1933, as amended, a Registration Statement, hereby constitute
and appoint Charles D. Adamo, Howard B. Kerzner, John Allison and Kevin
DeSanctis alone or acting together, their true and lawful attorneys-in-fact and
agents, and each of them, with full power to act without the others, their true
and lawful attorneys-in-fact and agent, for them and in their names, place and
stead, in any and all capacities, to sign said Registration Statement, and any
and all amendments thereto (including any post-effective amendments), with power
where appropriate to affix the corporate seal of PAL thereto and to attest said
seal, and to file said Registration Statement and such amendments, with all
exhibits thereto, and any and all other documents in connection therewith, with
the Securities and Exchange Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises as fully to all intents and purposes as they might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may pursuant to the requirements
of the Securities Act of 1933, lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have duly signed this Power of
Attorney in the capacities and on the dates indicated.
Name Title
---- -----
/s/ Kevin DeSanctis Chairman of the Board of Directors and Chief
- --------------------------- Executive Officer (Principal Executive, Financial
Kevin DeSanctis and Accounting Officer)
/s/ J. B. Farrington Director
- ---------------------------
J. B. Farrington
/s/ Mandy Miller Authorized Representative in the United States
- ---------------------------
Mandy Miller
Date: March 20, 1997
<PAGE>
Exhibit 24.5
PARADISE ISLAND LIMITED
POWER OF ATTORNEY
The undersigned directors and/or officers, or both, of Paradise Island
Limited, a corporation organized and existing under the laws of the Commonwealth
of The Bahamas ("PIL"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement, hereby constitute and appoint
Charles D. Adamo, Howard B. Kerzner, John Allison and Kevin DeSanctis alone or
acting together, their true and lawful attorneys-in-fact and agents, and each of
them, with full power to act without the others, their true and lawful
attorneys-in-fact and agent, for them and in their names, place and stead, in
any and all capacities, to sign said Registration Statement, and any and all
amendments thereto (including any post-effective amendments), with power where
appropriate to affix the corporate seal of PIL thereto and to attest said seal,
and to file said Registration Statement and such amendments, with all exhibits
thereto, and any and all other documents in connection therewith, with the
Securities and Exchange Commission, hereby granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform any and
all acts and things requisite and necessary to be done in and about the premises
as fully to all intents and purposes as they might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, may pursuant to the requirements of the Securities Act of 1933, lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have duly signed this Power of
Attorney in the capacities and on the dates indicated.
Name Title
---- -----
/s/ Kevin DeSanctis Chairman of the Board of Directors and Chief
- --------------------------- Executive Officer (Principal Executive, Financial
Kevin DeSanctis and Accounting Officer)
/s/ J. B. Farrington Director
- ---------------------------
J. B. Farrington
/s/ John Allison Director
- ---------------------------
John Allison
/s/ Mandy Miller Authorized Representative in the United States
- ---------------------------
Mandy Miller
Date: March 20, 1997
<PAGE>
Exhibit 24.6
PARADISE ENTERPRISES LIMITED
POWER OF ATTORNEY
The undersigned directors and/or officers, or both, of Paradise
Enterprises Limited, a corporation organized and existing under the laws of the
Commonwealth of The Bahamas ("PEL"), which is about to file with the Securities
and Exchange Commission, Washington, D.C., under the provisions of the
Securities Act of 1933, as amended, a Registration Statement, hereby constitute
and appoint Charles D. Adamo, Howard B. Kerzner, John Allison and Kevin
DeSanctis alone or acting together, their true and lawful attorneys-in-fact and
agents, and each of them, with full power to act without the others, their true
and lawful attorneys-in-fact and agent, for them and in their names, place and
stead, in any and all capacities, to sign said Registration Statement, and any
and all amendments thereto (including any post-effective amendments), with power
where appropriate to affix the corporate seal of PEL thereto and to attest said
seal, and to file said Registration Statement and such amendments, with all
exhibits thereto, and any and all other documents in connection therewith, with
the Securities and Exchange Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises as fully to all intents and purposes as they might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may pursuant to the requirements
of the Securities Act of 1933, lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have duly signed this Power of
Attorney in the capacities and on the dates indicated.
Name Title
---- -----
/s/ Solomon Kerzner Chairman of the Board of Directors and Chief
- --------------------------- Executive Officer (Principal Executive Officer)
Solomon Kerzner
/s/ J. B. Farrington Director
- ---------------------------
J. B. Farrington
/s/ Kevin DeSanctis Director (Principal Financial and Accounting
- --------------------------- Officer)
Kevin DeSanctis
/s/ Mandy Miller Authorized Representative in the United States
- ---------------------------
Mandy Miller
Date: March 20, 1997
<PAGE>
Exhibit 24.7
ISLAND HOTEL COMPANY LIMITED
POWER OF ATTORNEY
The undersigned directors and/or officers, or both, of Island Hotel
Company Limited, a corporation organized and existing under the laws of the
Commonwealth of The Bahamas ("IHCL"), which is about to file with the Securities
and Exchange Commission, Washington, D.C., under the provisions of the
Securities Act of 1933, as amended, a Registration Statement, hereby constitute
and appoint Charles D. Adamo, Howard B. Kerzner, John Allison and Kevin
DeSanctis alone or acting together, their true and lawful attorneys-in-fact and
agents, and each of them, with full power to act without the others, their true
and lawful attorneys-in-fact and agent, for them and in their names, place and
stead, in any and all capacities, to sign said Registration Statement, and any
and all amendments thereto (including any post-effective amendments), with power
where appropriate to affix the corporate seal of IHCL thereto and to attest said
seal, and to file said Registration Statement and such amendments, with all
exhibits thereto, and any and all other documents in connection therewith, with
the Securities and Exchange Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises as fully to all intents and purposes as they might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may pursuant to the requirements
of the Securities Act of 1933, lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have duly signed this Power of
Attorney in the capacities and on the dates indicated.
Name Title
---- -----
/s/ Kevin DeSanctis Chairman of the Board of Directors and Chief
- --------------------------- Executive Officer (Principal Executive, Financial
Kevin DeSanctis and Accounting Officer)
/s/ J. B. Farrington Director
- ---------------------------
J. B. Farrington
/s/ John Allison Director
- ---------------------------
John Allison
/s/ Mandy Miller Authorized Representative in the United States
- ---------------------------
Mandy Miller
Date: March 20, 1997
<PAGE>
Exhibit 24.8
PARADISE BEACH INN LIMITED
POWER OF ATTORNEY
The undersigned directors and/or officers, or both, of Paradise Beach Inn
Limited, a corporation organized and existing under the laws of the Commonwealth
of The Bahamas ("PBIL"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement, hereby constitute and appoint
Charles D. Adamo, Howard B. Kerzner, John Allison and Kevin DeSanctis alone or
acting together, their true and lawful attorneys-in-fact and agents, and each of
them, with full power to act without the others, their true and lawful
attorneys-in-fact and agent, for them and in their names, place and stead, in
any and all capacities, to sign said Registration Statement, and any and all
amendments thereto (including any post-effective amendments), with power where
appropriate to affix the corporate seal of PBIL thereto and to attest said seal,
and to file said Registration Statement and such amendments, with all exhibits
thereto, and any and all other documents in connection therewith, with the
Securities and Exchange Commission, hereby granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform any and
all acts and things requisite and necessary to be done in and about the premises
as fully to all intents and purposes as they might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, may pursuant to the requirements of the Securities Act of 1933, lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have duly signed this Power of
Attorney in the capacities and on the dates indicated.
Name Title
---- -----
/s/ Kevin DeSanctis Chairman of the Board of Directors and Chief
- --------------------------- Executive Officer (Principal Executive, Financial
Kevin DeSanctis and Accounting Officer)
/s/ J. B. Farrington Director
- ---------------------------
J. B. Farrington
/s/ John Allison Director
- ---------------------------
John Allison
/s/ Mandy Miller Authorized Representative in the United States
- ---------------------------
Mandy Miller
Date: March 20, 1997
<PAGE>
Exhibit 24.9
SUN INTERNATIONAL MANAGEMENT LIMITED
POWER OF ATTORNEY
The undersigned directors and/or officers, or both, of Sun International
Management Limited, a corporation organized and existing under the laws of the
British Virgin Islands ("SIML"), which is about to file with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, a Registration Statement, hereby constitute and appoint
Charles D. Adamo, Howard B. Kerzner, John Allison and Kevin DeSanctis alone or
acting together, their true and lawful attorneys-in-fact and agents, and each of
them, with full power to act without the others, their true and lawful
attorneys-in-fact and agent, for them and in their names, place and stead, in
any and all capacities, to sign said Registration Statement, and any and all
amendments thereto (including any post-effective amendments), with power where
appropriate to affix the corporate seal of SIML thereto and to attest said seal,
and to file said Registration Statement and such amendments, with all exhibits
thereto, and any and all other documents in connection therewith, with the
Securities and Exchange Commission, hereby granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform any and
all acts and things requisite and necessary to be done in and about the premises
as fully to all intents and purposes as they might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, may pursuant to the requirements of the Securities Act of 1933, lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have duly signed this Power of
Attorney in the capacities and on the dates indicated.
Name Title
---- -----
/s/ Solomon Kerzner Chairman of the Board of Directors and Chief
- --------------------------- Executive Officer (Principal Executive Officer)
Solomon Kerzner
/s/ Howard Kerzner Director (Principal Financial and Accounting
- --------------------------- Officer)
Howard Kerzner
/s/ Charles Adamo Director
- ---------------------------
Charles Adamo
/s/ Mandy Miller Authorized Representative in the United States
- ---------------------------
Mandy Miller
Date: March 20, 1997
<PAGE>
Exhibit 24.10
GGRI, INC.
POWER OF ATTORNEY
The undersigned director and/or officer, or both, of GGRI, Inc., a
Delaware corporation ("GGRI"), which is about to file with the Securities and
Exchange Commission, Washington, D.C., under the provisions of the Securities
Act of 1933, as amended, a Registration Statement, hereby constitute and appoint
Charles D. Adamo, Howard B. Kerzner, John Allison and Kevin DeSanctis alone or
acting together, their true and lawful attorneys-in-fact and agents, and each of
them, with full power to act without the others, their true and lawful
attorneys-in-fact and agent, for them and in their names, place and stead, in
any and all capacities, to sign said Registration Statement, and any and all
amendments thereto (including any post-effective amendments), with power where
appropriate to affix the corporate seal of GGRI thereto and to attest said seal,
and to file said Registration Statement and such amendments, with all exhibits
thereto, and any and all other documents in connection therewith, with the
Securities and Exchange Commission, hereby granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform any and
all acts and things requisite and necessary to be done in and about the premises
as fully to all intents and purposes as they might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, may pursuant to the requirements of the Securities Act of 1933, lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have duly signed this Power of
Attorney in the capacities and on the dates indicated.
Name Title
---- -----
/s/ Matthew Kearney Chairman of the Board of Directors and Chief
- --------------------------- Executive Officer (Principal Executive, Financial
Matthew Kearney and Accounting Officer)
Date: March 20, 1997
<PAGE>
Exhibit 24.11
RESORTS INTERNATIONAL HOTEL, INC.
POWER OF ATTORNEY
The undersigned director and/or officer, or both, of Resorts International
Hotel, Inc., a New Jersey corporation ("RIH"), which is about to file with the
Securities and Exchange Commission, Washington, D.C., under the provisions of
the Securities Act of 1933, as amended, a Registration Statement, hereby
constitute and appoint Charles D. Adamo, Howard B. Kerzner, John Allison and
Kevin DeSanctis alone or acting together, their true and lawful
attorneys-in-fact and agents, and each of them, with full power to act without
the others, their true and lawful attorneys-in-fact and agent, for them and in
their names, place and stead, in any and all capacities, to sign said
Registration Statement, and any and all amendments thereto (including any
post-effective amendments), with power where appropriate to affix the corporate
seal of RIH thereto and to attest said seal, and to file said Registration
Statement and such amendments, with all exhibits thereto, and any and all other
documents in connection therewith, with the Securities and Exchange Commission,
hereby granting unto said attorneys-in-fact and agents, and each of them, full
power and authority to do and perform any and all acts and things requisite and
necessary to be done in and about the premises as fully to all intents and
purposes as they might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may pursuant to the
requirements of the Securities Act of 1933, lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned have duly signed this Power of
Attorney in the capacities and on the dates indicated.
Name Title
---- -----
/s/ Matthew Kearney Chairman of the Board of Directors (Principal
- --------------------------- Financial and Accounting Officer)
Matthew Kearney
/s/ Dan Cassella President and Chief Executive
- --------------------------- Officer (Principal Executive Officer)
Dan Cassella
Date: March 20, 1997
<PAGE>
Exhibit 24.12
SUN COVE, LTD.
POWER OF ATTORNEY
The undersigned directors and/or officers, or both, of Sun Cove Limited, a
Connecticut corporation ("Sun Cove"), which is about to file with the Securities
and Exchange Commission, Washington, D.C., under the provisions of the
Securities Act of 1933, as amended, a Registration Statement, hereby constitute
and appoint Charles D. Adamo, Howard B. Kerzner, John Allison and Kevin
DeSanctis alone or acting together, their true and lawful attorneys-in-fact and
agents, and each of them, with full power to act without the others, their true
and lawful attorneys-in-fact and agent, for them and in their names, place and
stead, in any and all capacities, to sign said Registration Statement, and any
and all amendments thereto (including any post-effective amendments), with power
where appropriate to affix the corporate seal of Sun Cove thereto and to attest
said seal, and to file said Registration Statement and such amendments, with all
exhibits thereto, and any and all other documents in connection therewith, with
the Securities and Exchange Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises as fully to all intents and purposes as they might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may pursuant to the requirements
of the Securities Act of 1933, lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have duly signed this Power of
Attorney in the capacities and on the dates indicated.
Name Title
---- -----
/s/ Howard Kerzner Chairman of the Board of Directors and Chief
- --------------------------- Executive Officer (Principal Executive Officer)
Howard Kerzner
/s/ Kevin DeSanctis Director (Principal Financial and Accounting
- --------------------------- Officer)
Kevin DeSanctis
/s/ John Allison Director
- ---------------------------
John Allison
Date: March 20, 1997
<PAGE>
Exhibit 25.1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
---------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
---------------------------
SUN INTERNATIONAL HOTELS LIMITED
(Exact name of obligor as specified in its charter)
Commonwealth of The Bahamas 98-013655
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Coral Towers
Paradise Island, The Bahamas
(Address of principal executive offices) (Zip code)
---------------------------
SUN INTERNATIONAL NORTH AMERICA, INC.
(Exact name of obligor as specified in its charter)
Delaware 59-0763055
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1133 Boardwalk
Atlantic City, New Jersey 08401
(Address of principal executive offices) (Zip code)
---------------------------
9% Senior Subordinated Notes due 2007
(Title of the indenture securities)
<PAGE>
===============================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 18th day of March, 1997.
THE BANK OF NEW YORK
By: /s/ WALTER N. GITLIN
------------------------
Name: WALTER N. GITLIN
Title: VICE PRESIDENT
-4-
<PAGE>
EXHIBIT 7
--------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 4,404,522
Interest-bearing balances .......... 732,833
Securities:
Held-to-maturity securities ........ 789,964
Available-for-sale securities ...... 2,005,509
Federal funds sold in domestic offices
of the bank:
Federal funds sold ................... 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................28,728,602
LESS: Allowance for loan and
lease losses ..............584,525
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 28,143,648
Assets held in trading accounts ...... 1,004,242
Premises and fixed assets (including
capitalized leases) ................ 605,668
Other real estate owned .............. 41,238
Investments in unconsolidated
subsidiaries and associated
companies .......................... 205,031
Customers' liability to this bank on
acceptances outstanding ............ 949,154
Intangible assets .................... 490,524
Other assets ......................... 1,305,839
-----------
Total assets ......................... $44,043,010
-----------
-----------
LIABILITIES
Deposits:
In domestic offices ................ $20,441,318
Noninterest-bearing .......8,158,472
Interest-bearing .........12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 11,710,903
Noninterest-bearing ..........46,182
Interest-bearing .........11,664,721
Federal funds purchased in
domestic offices of the
bank:
Federal funds purchased ............ 1,565,288
Demand notes issued to the U.S.
Treasury ........................... 293,186
Trading liabilities .................. 826,856
Other borrowed money:
With original maturity of one year
or less .......................... 2,103,443
With original maturity of more than
one year ......................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding .............. 951,116
Subordinated notes and debentures .... 1,020,400
Other liabilities .................... 1,522,884
-----------
Total liabilities .................... 40,456,160
-----------
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 2,129,376
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ ( 2,073)
Cumulative foreign currency transla-
tion adjustments .................. ( 8,403)
-----------
Total equity capital ................ 3,586,850
-----------
Total liabilities and equity
capital ........................... $44,043,010
-----------
-----------
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi Directors
Alan R. Griffith
--------------------------------
<PAGE>
EXHIBIT 99.1
LETTER OF TRANSMITTAL
FOR TENDERS OF
$200,000,000 AGGREGATE PRINCIPAL AMOUNT OF
9% SENIOR SUBORDINATED NOTES DUE 2007
OF
SUN INTERNATIONAL HOTELS LIMITED AND
SUN INTERNATIONAL NORTH AMERICA, INC.
PURSUANT TO THE PROSPECTUS
DATED _____, 1997, OF SUN INTERNATIONAL HOTELS LIMITED
AND SUN INTERNATIONAL NORTH AMERICA, INC.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK CITY
TIME, ON _____________, 1997, UNLESS EXTENDED. TENDERED
SECURITIES MAY BE WITHDRAWN AT ANY TIME ON OR PRIOR TO THE
EXPIRATION DATE OF THE EXCHANGE OFFER.
MAIN DELIVERY TO: The Bank of New York, EXCHANGE AGENT
BY HAND OR OVERNIGHT COURIER:
The Bank of New York
101 Barclay Street
Corporate Trust Services Window
Ground Level
New York, NY 10286
Attention: Reorganization Section,
Arwen Gibbons
BY MAIL:
The Bank of New York
101 Barclay Street, 7E
New York, NY 10286
Attention: Reorganization Section,
Arwen Gibbons
BY FAX FOR ELIGIBLE INSTITUTIONS:
(212) 571-3080
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT
CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
The undersigned acknowledges that he or she has received and
reviewed the Prospectus dated _____, 1997 (the "Prospectus"), of Sun
International Hotels Limited and Sun International North America, Inc.
(collectively, the "Issuers"), and this Letter of Transmittal (the "Letter of
Transmittal"), which together constitute the Issuers' offer (the "Exchange
Offer") to exchange an aggregate principal amount of up to $200,000,000 9%
Exchange Senior Subordinated Notes Due 2007 (the "Exchange Notes"), for a
like principal amount of the Issuers' issued and outstanding 9% Senior
Subordinated Notes Due 2007 (the "Outstanding Notes").
<PAGE>
2
The term "Expiration Date" shall mean 5:00 p.m., New York City
time, on _______, 1997, unless the Issuers, in their sole discretion, extend
the Exchange Offer. The Issuers reserve the right to extend the Exchange
Offer at their discretion, in which event the term "Expiration Date" shall
mean the time and date when the Exchange Offer as so extended shall expire.
The Issuers shall notify the holders of the Outstanding Notes of any
extension by means of a press release or other public announcement no later
than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date.
The Exchange Notes will bear interest from the last interest
payment date on which interest was paid on the Outstanding Notes surrendered
in exchange therefor or, if no interest has been paid on such Outstanding
Notes, from the date of original issue of the Outstanding Notes at the same
rate and upon the same terms as the Outstanding Notes. Holders whose
Outstanding Notes are accepted for exchange will not receive interest on such
Outstanding Notes for any period subsequent to the last interest payment
date, if any, of the Outstanding Notes to occur prior to the issue date of
the Exchange Notes and will be deemed to have waived the right to receive any
payment in respect of interest on the Outstanding Notes accrued from and
after such interest payment date, if any.
The Exchange Offer is not conditioned upon any minimum principal
amount of Outstanding Notes being tendered for exchange. However, the
Exchange Offer is subject to certain conditions. Please see the Prospectus
under the section entitled "The Exchange Offer--Certain Conditions to the
Exchange Offer".
The Exchange Offer is not being made to, nor will tenders be
accepted from or on behalf of, holders of Outstanding Notes in any
jurisdiction in which the making or acceptance of the Exchange Offer would
not be in compliance with the laws of such jurisdiction.
This Letter of Transmittal is to be completed by a holder of
Outstanding Notes either if certificates are to be forwarded herewith or if a
tender of certificates for Outstanding Notes, if available, is to be made by
book-entry transfer to the account maintained by the Exchange Agent at The
Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the
procedures set forth in "The Exchange Offer--Procedures for Tendering
Outstanding Notes" section of the Prospectus. Holders of Outstanding Notes
whose certificates are not immediately available, or who are unable to
deliver their certificates or confirmation of the book-entry tender of their
Outstanding Notes into the Exchange Agent's account at the Book-Entry
Transfer Facility (a "Book-Entry Confirmation") and deliver all other
documents required by this Letter of Transmittal to the Exchange Agent on or
prior to the Expiration Date, may tender their Outstanding Notes according to
the guaranteed delivery procedures set forth in the Prospectus under the
section entitled "The Exchange Offer--Guaranteed Delivery Procedures".
Holders who wish to tender their Outstanding Notes must complete this
Letter of Transmittal in its entirety.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE BOX
<PAGE>
3
List below the Outstanding Notes to which this Letter of Transmittal
relates. If the space provided below is inadequate, the certificate numbers and
principal amount of Outstanding Notes should be listed on a separate signed
schedule affixed hereto.
<TABLE>
<CAPTION>
DESCRIPTION OF OUTSTANDING NOTES
(SEE INSTRUCTIONS 2, 3, AND 8)
<S> <C> <C> <C>
NAME(S) AND ADDRESS(ES)
OF REGISTERED HOLDER(S) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
(PLEASE FILL IN, IF BLANK)
1 2 3
PRINCIPAL AMOUNT OF OUTSTANDING
AGGREGATE PRINCIPAL NOTES TENDERED(2) (MUST
TITLE OF SECURITIES AND AMOUNT OF OUTSTANDING BE IN DENOMINATIONS OF $1,000
CERTIFICATE NUMBER(S)(1) NOTES OR INTEGRAL MULTIPLES THEREOF)
TOTAL
</TABLE>
(1) Certificate numbers not required if Outstanding Notes are being
tendered by book-entry transfer.
(2) Unless otherwise indicated, a holder will be deemed to have tendered
ALL of the Outstanding Notes represented in column 2.
/ / CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE
AGENT WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution:
-------------------------------------------------
Account Number:
-------------------------------------------------
Transaction Code Number:
-------------------------------------------------
<PAGE>
4
/ / CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s):
------------------------------------------------
Window Ticket Number (if any):
------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
----------------------------
If delivered by book-entry transfer, complete the following:
Account Number:
---------------------------------------------------------------
Transaction Code Number:
------------------------------------------------------
/ / CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS
OR SUPPLEMENTS THERETO.
Name:
-------------------------------------------------------------------------
Address:
---------------------------------------------------------------------
---------------------------------------------------------------------
<PAGE>
5
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
LADIES AND GENTLEMEN:
Upon the terms and subject to the conditions of the Exchange Offer,
the undersigned hereby tenders to the Issuers the aggregate principal amount
of Outstanding Notes indicated above. The undersigned has completed, executed
and delivered this Letter of Transmittal to indicate the action the
undersigned desires to take with respect to the Exchange Offer.
Subject to, and effective upon, the acceptance for exchange of the
Outstanding Notes tendered hereby, the undersigned hereby sells, assigns and
transfers to, or upon the order of, the Issuers all right, title and interest
in and to such Outstanding Notes as are being tendered hereby. The
undersigned hereby irrevocably constitutes and appoints the Exchange Agent
its agent and attorney-in-fact (with full knowledge that the Exchange Agent
also acts as the agent of the Issuers) with respect to the tendered
Outstanding Notes with full power of substitution to (i) deliver certificates
for such Outstanding Notes to the Issuers and deliver all accompanying
evidences of transfer and authenticity to, or upon the order of, the
Issuers, (ii) present such Outstanding Notes for transfer on the books of the
Issuers and (iii) receive for the account of the Issuers all benefits and
otherwise exercise all rights of the beneficial ownership of such Outstanding
Notes, all in accordance with the terms of the Exchange Offer. The power of
attorney granted in this paragraph shall be deemed to be irrevocable and
coupled with an interest.
The undersigned hereby represents and warrants that the undersigned
has full power and authority to tender, sell, assign and transfer the
Outstanding Notes tendered hereby and that the Issuers will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions,
charges and encumbrances and not subject to any adverse claim when the same
are accepted by the Issuers. The undersigned hereby further represents that
(i) any Exchange Notes acquired in exchange for Outstanding Notes tendered
hereby will have been acquired in the ordinary course of business of the
person receiving such Exchange Notes, whether or not such person is the
undersigned, (ii) neither the holder nor any such other person has an
arrangement or understanding with any person to participate in the
distribution of such Exchange Notes and (iii) neither the holder nor any such
other person is an "affiliate", as described in Rule 405 under the Securities
Act of 1933 (the "Securities Act"), of the Issuers.
If the undersigned is not a broker-dealer, the undersigned
represents that it is not engaged in, and does not intend to engage in, a
distribution of the Exchange Notes. If the undersigned is a broker-dealer
that will receive Exchange Notes for its own account in exchange for
Outstanding Notes, it represents that the Outstanding Notes to be exchanged
for Exchange Notes were acquired by it as a result of market-making
activities or other trading activities and acknowledges that it will deliver
a prospectus meeting the requirements of the Securities Act in connection
with any resale of such Exchange Notes pursuant to the Exchange Offer;
however, by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
The undersigned will, upon request, execute and deliver any
additional documents deemed by the Exchange Agent or the Issuers to be
necessary or desirable to complete the assignment, transfer and sale of the
Outstanding Notes tendered hereby. All authority conferred or agreed to be
conferred in this Letter of Transmittal and every obligation of the
undersigned hereunder shall be binding upon the successors, assigns, heirs,
executors, administrators, trustees in bankruptcy and legal representatives
of the undersigned and shall not be affected by, and shall survive, the death
or incapacity of the undersigned. This tender may be withdrawn only in
accordance with the procedures set forth in the instructions contained in
this Letter of Transmittal.
For the purposes of the Exchange Offer, the Issuers shall be deemed
to have accepted validly tendered Outstanding Notes when, as and if the
Issuers have given oral and written notice thereof to the Exchange Agent.
If any tendered Outstanding Notes are not accepted for exchange
pursuant to the Exchange Offer for any reason, certificates for any such
unaccepted Outstanding Notes will be returned (or, in the case of Outstanding
Notes
<PAGE>
6
tendered by book-entry transfer through the Book-Entry Transfer Facility, will
be promptly credited to an account maintained at the Book-Entry Transfer
Facility), without expense, to the undersigned at the address shown below or at
a different address as may be indicated herein under the "Special Delivery
Instructions" as promptly as practicable after the Expiration Date.
The undersigned understands that tenders of Outstanding Notes
pursuant to the procedures described under the section entitled "The Exchange
Offer--Procedures for Tendering Outstanding Notes" in the Prospectus and in
the instructions hereto will constitute a binding agreement between the
undersigned and the Issuers upon the terms and subject to the conditions of
the Exchange Offer.
Unless otherwise indicated herein in the box entitled "Special
Issuance Instructions" below, please deliver the Exchange Notes (and, if
applicable, substitute certificates representing Outstanding Notes for any
Outstanding Notes not exchanged) in the name(s) of the undersigned or, in the
case of a book-entry delivery of Outstanding Notes, please credit the account
indicated above maintained at the Book-Entry Transfer Facility. Similarly,
unless otherwise indicated under the box entitled "Special Delivery
Instructions" below, please send the Exchange Notes (and, if applicable,
substitute certificates representing Outstanding Notes for any Outstanding
Notes not exchanged) to the undersigned at the address shown above in the box
entitled "Description of Outstanding Notes". In the event that both "Special
Issuance Instructions" and "Special Delivery Instructions" are completed,
please issue the certificates representing the Exchange Notes issued in
exchange for the Outstanding Notes accepted for exchange in the name(s) of,
and return any certificates for Outstanding Notes not tendered or not
exchanged to, the person(s) so indicated. The undersigned understands that
the Issuers have no obligation pursuant to the "Special Issuance
Instructions" and "Special Delivery Instructions" to transfer any Outstanding
Notes from the name of the registered holder(s) thereof if the Issuers do not
accept for exchange any of the Outstanding Notes so tendered.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF
OUTSTANDING NOTES" ABOVE AND SIGNING THIS LETTER OF TRANSMITTAL, WILL BE
DEEMED TO HAVE TENDERED THE OUTSTANDING NOTES AS SET FORTH IN SUCH BOX ABOVE.
<PAGE>
7
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9 ON REVERSE SIDE)
I hereby TENDER the Outstanding Notes described above in the box
entitled "Description of Outstanding Notes" pursuant to the terms of the
Exchange Offer.
X , 1997
-------------------------------- -------------------------
X , 1997
-------------------------------- -------------------------
X , 1997
-------------------------------- -------------------------
SIGNATURE(S) OF OWNER(S) DATE
If a holder is tendering any Outstanding Notes, this Letter of
Transmittal must be signed by the registered holder(s) as the name(s)
appear(s) on the certificate(s) for the Outstanding Notes or on a security
position listing or by any person(s) authorized to become registered
holder(s) by endorsements and documents transmitted herewith. If signature is
by a trustee, executor, administrator, guardian, officer or other person
acting in a fiduciary or representative capacity, please set forth full
title. See Instruction 4.
Name(s):
----------------------------------------------------------------------
(Please Type or Print)
- -------------------------------------------------------------------------------
Capacity:
----------------------------------------------------------------------
Address:
---------------------------------------------------------------------
(Include Zip Code)
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 4)
Signature(s) Guaranteed by an Eligible Institution:
--------------------------
(Authorized Signature)
- -------------------------------------------------------------------------------
(Title)
- -------------------------------------------------------------------------------
(Name of Firm)
- -------------------------------------------------------------------------------
(Area Code and Telephone Number)
Dated: , 1997
------------------------------------------------------------------
<PAGE>
8
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 4 AND 5)
To be completed ONLY if certificates for Outstanding Notes not exchanged
and/or Exchange Notes are to be issued in the name of and sent to someone other
than the person or person(s) whose signature(s) appear(s) on this Letter of
Transmittal above, or if Outstanding Notes delivered by book-entry transfer
which are not accepted for exchange are to be returned by credit to an account
maintained at the Book-Entry Transfer Facility other than the account indicated
above.
Issue Exchange Notes and/or Outstanding Notes to:
Name __________________________________________________________________________
(PLEASE TYPE OR PRINT)
__________________________________________________________________________
(PLEASE TYPE OR PRINT)
Address _______________________________________________________________________
_______________________________________________________________________
(ZIP CODE)
_______________________________________________________________________
EMPLOYER IDENTIFICATION
OR SOCIAL SECURITY NUMBER
(COMPLETE SUBSTITUTE FORM W-9)
Credit unexchanged Outstanding Notes delivered by book-entry transfer
to the Book-Entry Transfer Facility account set forth below
__________________________________________________________________________
(BOOK-ENTRY TRANSFER FACILITY ACCOUNT NUMBER,
IF APPLICABLE)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4 AND 5)
To be completed ONLY if certificates for Outstanding Notes not
exchanged and/or Exchange Notes are to be sent to someone other than the
person or persons whose signature(s) appear(s) on this Letter of Transmittal
above or to such person or persons at an address other than shown in the box
entitled "Description of Outstanding Notes" on this Letter of Transmittal
above.
Mail Exchange Notes and/or Outstanding Notes to:
Name __________________________________________________________________________
(PLEASE TYPE OR PRINT)
__________________________________________________________________________
(PLEASE TYPE OR PRINT)
Address _______________________________________________________________________
(ZIP CODE)
<PAGE>
9
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
This Letter of Transmittal must be used to forward, and must
accompany, all certificates for Outstanding Notes tendered pursuant to the
Exchange Offer.
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE
EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES.
This Letter of Transmittal is to be completed by holders either if
certificates are to be forwarded herewith or if tenders are to be made pursuant
to the procedures for delivery by book-entry transfer set forth in "The Exchange
Offer--Procedures for Tendering Outstanding Notes" section of the Prospectus.
Certificates for all physically tendered Outstanding Notes, or Book-Entry
Confirmation, as the case may be, as well as a properly completed and duly
executed Letter of Transmittal (or a copy hereof) and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
at the address set forth herein on or prior to the Expiration Date, or the
tendering holder must comply with the guaranteed delivery procedures set forth
below. Outstanding Notes tendered hereby must be in denominations of $1,000 and
integral multiples thereof.
The method of delivery of this Letter of Transmittal, the
Outstanding Notes and all other required documents is at the election and
risk of the tendering holders, but the delivery will be deemed made only when
actually received or confirmed by the Exchange Agent. If Outstanding Notes
are sent by mail, it is suggested that the mailing be made sufficiently in
advance of the Expiration Date to permit delivery to the Exchange Agent prior
to the Expiration Date. No Letter of Transmittal or Outstanding Notes should
be sent to the Issuers.
Holders who wish to tender their Outstanding Notes and (i) whose
Outstanding Notes are not immediately available, or (ii) cannot deliver their
Outstanding Notes, this Letter of Transmittal or any other documents required
hereby to the Exchange Agent prior to the Expiration Date or (iii) who cannot
comply with the procedures for book entry tender on a timely basis must tender
their Outstanding Notes according to the guaranteed delivery procedures set
forth in the Prospectus. Pursuant to such procedures: (i) such tender must be
made through an Eligible Institution (as defined below); (ii) prior to the
Expiration Date, the Exchange Agent must have received from the Eligible
Institution a properly completed and duly executed Notice of Guaranteed Delivery
(by telegram, telex, fax transmission, or mail or hand delivery) setting forth
the name and address of the holder, the certificate number(s) of such
Outstanding Notes (except in the case of book-entry tenders) and the principal
amount of Outstanding Notes tendered, stating that the tender is being made
thereby and guaranteeing that, within three NYSE trading days after the
Expiration Date, this Letter of Transmittal (or a copy hereof) together with the
certificate(s) representing the Outstanding Notes (except in the case of
book-entry tenders) and any other required documents will be deposited by the
Eligible Institution with the Exchange Agent; and (iii) such properly completed
and executed Letter of Transmittal (or a copy hereof), as well as all other
documents required by this Letter of Transmittal and the certificate(s)
representing all tendered Outstanding Notes in proper form for transfer or a
Book-Entry Confirmation with respect to such Outstanding Notes, must be received
by the Exchange Agent within three NYSE trading days after the Expiration Date,
all as provided in the Prospectus under the section entitled "The Exchange
Offer--Guaranteed Delivery Procedures". Any holder who wishes to tender his
Outstanding Notes pursuant to the guaranteed delivery procedures described above
must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery
prior to the Expiration Date. As used in this Letter of Transmittal, "Eligible
Institution" shall mean a firm which is a member of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
<PAGE>
10
All questions as to the validity, eligibility (including time of
receipt), acceptance and withdrawal of tendered Outstanding Notes will be
determined by the Issuers in their sole discretion, which determination will
be final and binding. The Issuers reserve the absolute right to reject any
and all Outstanding Notes not properly tendered or any Outstanding Notes the
Issuers' acceptance of which would, in the opinion of counsel for the
Issuers, be unlawful. The Issuers also reserve the right to waive any
defects, irregularities or conditions of tender as to particular Outstanding
Notes. The Issuers' interpretation of the terms and conditions of the
Exchange Offer (including the instructions in this Letter of Transmittal)
shall be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Outstanding Notes must be cured
within such time as the Issuers shall determine. Neither the Issuers, the
Exchange Agent nor any other person shall be under any duty to give
notification of defects or irregularities with respect to tenders of
Outstanding Notes, nor shall any of them incur any liability for failure to
give such notification. Tenders of Outstanding Notes will not be deemed to
have been made until such defects or irregularities have been cured or
waived. Any Outstanding Notes received by the Exchange Agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned by the Exchange Agent to the tendering
holders, unless otherwise provided in this Letter of Transmittal, as soon as
practicable following the Expiration Date.
See "The Exchange Offer" in the Prospectus.
2. TENDER BY HOLDER.
Only a holder of Outstanding Notes may tender such Outstanding
Notes in the Exchange Offer. Any beneficial owner whose Outstanding Notes are
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee and who wishes to tender should contact the registered holder
promptly and instruct such registered holder to tender on behalf of such
beneficial owner. If such beneficial owner wishes to tender on such owner's
own behalf, such owner must, prior to completing and executing this Letter of
Transmittal and delivering such owner's Outstanding Notes, either make
appropriate arrangements to register ownership of the Outstanding Notes in
such owner's name or obtain a properly completed bond power from the
registered holder. The transfer of registered ownership may take considerable
time.
3. PARTIAL TENDERS AND WITHDRAWALS.
Tenders of Outstanding Notes will be accepted only in denominations of
$1,000 and integral multiples thereof. If less than all of the Outstanding Notes
are to be tendered, the tendering holder(s) should fill in the aggregate
principal amount of Outstanding Notes to be tendered in the box above entitled
"Description of Outstanding Notes -- Principal Amount of Outstanding Notes
Tendered". A reissued certificate representing the balance of nontendered
Outstanding Notes will be sent to such tendering holder (except in the case of
book-entry tenders), unless otherwise provided in the appropriate box on this
Letter of Transmittal, promptly after the Expiration Date. ALL OF THE
OUTSTANDING NOTES DELIVERED TO THE EXCHANGE AGENT WILL BE DEEMED TO HAVE BEEN
TENDERED UNLESS OTHERWISE INDICATED.
Any holder who has tendered Outstanding Notes may withdraw the
tender by delivering written notice of withdrawal to the Exchange Agent prior
to the Expiration Date. For a withdrawal to be effective, a written notice of
withdrawal must be received by the Exchange Agent at its address set forth on
the first page of this Letter of Transmittal. Any such notice of withdrawal
must (i) specify the name of the person having deposited the Outstanding
Notes to be withdrawn (the "Depositor"); (ii) identify the Outstanding Notes
to be withdrawn (including the certificate number or numbers and principal
amount of such Outstanding Notes (except in the case of book-entry tenders));
(iii) be signed by the holder in the same manner as the original signature on
this Letter of Transmittal by which such Outstanding Notes were tendered
(including any required signature guarantees) or be accompanied by documents
of transfer sufficient to have the Trustee (as defined in the Prospectus)
register the transfer of such Outstanding Notes into the name of the person
withdrawing the tender, and (iv) specify the name in which any such
Outstanding Notes are to be registered, if different from that of the
Depositor. If Outstanding Notes have been delivered or otherwise identified
to the Exchange Agent, the name of the registered holder and the certificate
numbers of the particular Outstanding Notes withdrawn must also be furnished
to the Exchange Agent as aforesaid
<PAGE>
11
prior to the physical release of the withdrawn Outstanding Notes. If the
Outstanding Notes have been tendered pursuant to the procedures for book-entry
tender set forth in the Prospectus, a notice of withdrawal must specify, in lieu
of certificate numbers, the name and account number at the Book-Entry Transfer
Facility to be credited with the withdrawn Outstanding Notes. Outstanding Notes
properly withdrawn will thereafter be deemed not validly tendered for purposes
of the Exchange Offer; PROVIDED, HOWEVER, that withdrawn Outstanding Notes may
be retendered by again following one of the procedures herein at any time prior
to the Expiration Date. All questions as to the validity, form and eligibility
(including time of receipt) of notice of withdrawal will be determined by the
Issuers, whose determinations will be final and binding on all parties. Neither
the Issuers, the Exchange Agent nor any other person will be under any duty to
give notification of any defects or irregularities in any notice of withdrawal
or incur any liability for failure to give any such notification. See "The
Exchange Offer -- Withdrawal Rights" in the Prospectus.
4. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURE.
If this Letter of Transmittal is signed by the registered holder of
the Outstanding Notes tendered hereby, the signature must correspond exactly
with the name as written on the face of the certificates (if applicable)
without any change whatsoever.
If any tendered Outstanding Notes are owned of record by two or
more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Outstanding Notes are registered in different names on
several certificates, it will be necessary to complete, sign and submit as many
separate copies of this Letter of Transmittal as there are different
registrations of certificates.
When this Letter of Transmittal is signed by the registered holder or
holders of the Outstanding Notes specified herein and tendered hereby, no
endorsements of certificates or separate bond powers are required. If, however,
the Exchange Notes are to be issued, or any untendered Outstanding Notes are to
be reissued, to a person other than the registered holder, then endorsements of
any certificates transmitted hereby or separate bond powers are required.
If this Letter of Transmittal is signed by a person other than the
registered holder or holders of any certificate(s) specified herein, such
certificate(s) must be endorsed or accompanied by appropriate bond powers, in
either case signed exactly as the name or names of the registered holder(s)
appear(s) on the certificate(s).
If this Letter of Transmittal or any certificates or bond powers
are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary
or representative capacity, such persons should so indicate when signing,
and, unless waived by the Issuers, proper evidence satisfactory to the
Issuers of their authority to so act must be submitted.
Endorsements on certificates for Outstanding Notes or signatures on
bond powers required by this Instruction 4 must be guaranteed by an Eligible
Institution.
Signatures on this Letter of Transmittal need not be guaranteed by an
Eligible Institution, provided the Outstanding Notes are tendered: (i) by a
registered holder of such Outstanding Notes (which term, for purposes of the
Exchange Offer, includes any participant in the Book-Entry Transfer Facility
system whose name appears on a security position listing as the holder of such
Outstanding Notes) who has not completed the box entitled "Special Issuance
Instructions" on this Letter of Transmittal; or (ii) for the account of an
Eligible Institution.
5. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.
Tendering holders of Outstanding Notes should indicate in the
applicable box the name and address in or to which Exchange Notes issued
pursuant to the Exchange Offer and/or substitute certificates evidencing
Outstanding Notes not exchanged are to be issued or sent, if different from
the name or address of the person signing this Letter
<PAGE>
12
of Transmittal. In the case of issuance in a different name, the employer
identification or social security number of the person named must also be
indicated. Holders tendering Outstanding Notes by book-entry transfer may
request that Outstanding Notes not exchanged be credited to such account
maintained at the Book-Entry Transfer Facility as such holder may designate
hereon. If no such instructions are given, such Outstanding Notes not exchanged
will be returned to the name or address of the person signing this Letter of
Transmittal.
6. TRANSFER TAXES.
The Issuers will pay all transfer taxes, if any, applicable to the
transfer of Outstanding Notes to them or their order pursuant to the Exchange
Offer. If however, Exchange Notes and/or substitute Outstanding Notes not
exchanged are to be delivered to, or are to be registered or issued in the
name of, any person other than the registered holder of the Outstanding Notes
tendered hereby, or if tendered Outstanding Notes are registered in the name
of any person other than the person signing this Letter of Transmittal, or if
a transfer tax is imposed for any reason other than the transfer of
Outstanding Notes to the Issuers or their order pursuant to the Exchange
Offer, the amount of any such transfer taxes (whether imposed on the
registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted herewith, the amount of such transfer taxes will
be billed directly to such tendering holder.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Outstanding Notes specified in this
Letter of Transmittal.
7. WAIVER OF CONDITIONS.
Subject to the terms and conditions set forth in the Prospectus, the
Issuers reserve the absolute right to waive satisfaction of any or all
conditions enumerated in the Prospectus.
8. NO CONDITIONAL TENDERS.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders of Outstanding Notes, by execution of this
Letter of Transmittal, shall waive any right to receive notice of the acceptance
of their Outstanding Notes for exchange.
Neither the Issuers nor any other person is obligated to give
notice of defects or irregularities in any tender, nor shall any of them
incur any liability for failure to give any such notice.
9. MUTILATED, LOST, STOLEN OR DESTROYED OUTSTANDING NOTES.
Any holder whose Outstanding Notes have been mutilated, lost,
stolen or destroyed should contact the Exchange Agent at the address
indicated above for further instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
QUESTIONS RELATING TO THE PROCEDURE FOR TENDERING, AS WELL AS
REQUESTS FOR ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF
TRANSMITTAL, MAY BE DIRECTED TO THE EXCHANGE AGENT, AT THE ADDRESS INDICATED
ON THE FIRST PAGE OF THIS LETTER OF TRANSMITTAL OR BY TELEPHONE AT (800)
507-9357.
<PAGE>
13
IMPORTANT TAX INFORMATION
Under U.S. federal income tax laws, a registered holder of Outstanding
Notes or Exchange Notes is required to provide the Trustee (as payor) with such
holder's correct Taxpayer Identification Number ("TIN") on Substitute Form W-9
below or otherwise establish a basis for exemption from backup withholding. If
such holder is an individual, the TIN is his social security number. If the
Trustee is not provided with the correct TIN, a $50 penalty may be imposed by
the Internal Revenue Service, and payments made to such holder with respect to
Outstanding Notes or Exchange Notes may be subject to backup withholding.
Certain holders (including, among others, all corporations and certain
foreign persons) are not subject to these backup withholding and reporting
requirements. Exempt holders should indicate their exempt status on Substitute
Form W-9. A foreign person may qualify as an exempt recipient by submitting to
the Trustee a properly completed Internal Revenue Service Form W-8, signed under
penalties of perjury, attesting to that holder's exempt status. A Form W-8 can
be obtained from the Trustee.
If backup withholding applies, the Trustee is required to withhold
31% of any payments made to the holder or other payee. Backup withholding is
not an additional U.S. federal income tax. Rather, the U.S. federal income
tax liability of persons subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made with respect to
Outstanding Notes or Exchange Notes the holder is required to provide the
Trustee with: (i) the holder's correct TIN by completing the form below,
certifying that the TIN provided on Substitute Form W-9 is correct (or that
such holder is awaiting a TIN) and that (A) such holder is exempt from backup
withholding, (B) the holder has not been notified by the Internal Revenue
Service that the holder is subject to backup withholding as a result of
failure to report all interest or dividends or (C) the Internal Revenue
Service has notified the holder that the holder is no longer subject to
backup withholding; and (ii) if applicable, an adequate basis for exemption.
<PAGE>
14
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE "IMPORTANT TAX INFORMATION" ABOVE)
PAYER'S NAME: THE BANK OF NEW YORK
NOTE: FAILURE TO COMPLETE THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF
ANY PAYMENTS MADE TO YOU UNDER THE OUTSTANDING NOTES OR THE EXCHANGE NOTES.
<TABLE>
<CAPTION>
<S> <C> <C>
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN THE Social Security Number
Form W-9 BOX AT RIGHT AND CERTIFY BY SIGNING OR __________________________
AND DATING BELOW Employer Identification Number
DEPARTMENT OF THE TREASURY PART 2--Certification--Under penalties of perjury, I certify PART 3
INTERNAL REVENUE SERVICE that:
(1) The number shown on this form is my correct Taxpayer Identification Awaiting TIN / /
Number (or I am waiting for a number to be issued to me) and
(2) I am not subject to backup withholding because (i) I am
exempt from backup withholding, (ii) I have not been notified
by the Internal Revenue Service ("IRS") that I am subject to
backup withholding as a result of failure to report all interest or
dividends, or (iii) the IRS has notified me that I am no longer
subject to backup withholding.
PAYER'S REQUEST FOR TAXPAYER
IDENTIFICATION
NUMBER (TIN) Certificate instructions:--You must cross out item (2) in Part 2 above
if you have been notified by the IRS that you are subject to backup
withholding because of underreporting interest or dividends on your
tax return. However, if after being notified by the IRS that you were
subject to backup withholding you received another notification from
the IRS stating that you are no longer subject to backup withholding,
do not cross out item (2).
SIGNATURE ____________________________________________________________
DATE ________________________
NAME _________________________________________________________________
(Please Print)
</TABLE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9.
PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (a) I have mailed or delivered
an application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(b) I intend to mail or deliver an application in the near future. I
understand that 31% of all reportable payments made to me prior to the time I
provide a properly certified taxpayer identification number to the Exchange
Agent will be withheld until I provide such a number.
________________________________________________________________________________
___________________________________________________________________________,1995
Signature and Date______________________________________________________________
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A COPY HEREOF (TOGETHER WITH THE
CERTIFICATES FOR OUTSTANDING NOTES (IF APPLICABLE) AND ALL OTHER REQUIRED
DOCUMENTS) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
<PAGE>
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY FOR
SUN INTERNATIONAL HOTELS LIMITED AND
SUN INTERNATIONAL NORTH AMERICA, INC.
This form or one substantially equivalent hereto must be used to
accept the Exchange Offer of Sun International Hotels Limited and Sun
International North America, Inc. (collectively, the "Issuers") made pursuant
to the Prospectus, dated ____, 1997 (the "Prospectus"), if certificates for
Outstanding Notes of the Issuers are not immediately available or if the
procedure for book-entry transfer cannot be completed on a timely basis or
time will not permit all required documents to reach the Exchange Agent prior
to the Expiration Date of the Exchange Offer. Such form may be delivered or
transmitted by telegram, telex, fax transmission, mail or hand delivery to
The Bank of New York (the "Exchange Agent") as set forth below. In addition,
in order to utilize the guaranteed delivery procedures to tender Outstanding
Notes pursuant to the Exchange Offer, a completed, signed and dated Letter of
Transmittal (or a copy thereof) must also be received by the Exchange Agent
prior to the Expiration Date. Capitalized terms not defined herein are
defined in the Prospectus.
MAIN DELIVERY TO: The Bank of New York, EXCHANGE AGENT
BY HAND OR OVERNIGHT COURIER:
The Bank of New York
101 Barclay Street
Corporate Trust Services Window
Ground Level
New York, NY 10286
Attention: Reorganization Section,
Arwen Gibbons
BY MAIL:
The Bank of New York
101 Barclay Street, 7E
New York, NY 10286
Attention: Reorganization Section,
Arwen Gibbons
FAX FOR ELIGIBLE INSTITUTIONS:
(212) 571-3080
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FAX OTHER THAN AS SET FORTH ABOVE,
WILL NOT CONSTITUTE A VALID DELIVERY.
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to the
Issuers the principal amount of Outstanding Notes set forth below, pursuant to
the guaranteed delivery procedures described in "The Exchange Offer--Guaranteed
Delivery Procedures" section of the Prospectus.
Principal Amount of Outstanding Notes
Tendered:*
$ _________________________________
Certificate Nos. (if available):
If Outstanding Notes will be delivered
___________________________________ by book-entry transfer to The Depository
Trust Company, provide account number.
Total Principal Amount Represented by
Outstanding Notes Certificate(s):
$__________________________________ Account Number _______________________
_____________
*Must be in denominations of principal amount of $1,000 and any integral
multiple thereof.
<PAGE>
ALL AUTHORITY HEREIN CONFERRED OR AGREED TO BE CONFERRED SHALL
SURVIVE THE DEATH OR INCAPACITY OF THE UNDERSIGNED AND EVERY OBLIGATION OF
THE UNDERSIGNED HEREUNDER SHALL BE BINDING UPON THE HEIRS, PERSONAL
REPRESENTATIVES, SUCCESSORS AND ASSIGNS OF THE UNDERSIGNED.
PLEASE SIGN HERE
X _______________________________ ________
X _______________________________ ________
Signature(s) of Owner(s) Date
or Authorized Signatory
Area Code and Tel. No.: ________________________________-
Must be signed by the holder(s) of Outstanding Notes as their
name(s) appear(s) on certificates for Outstanding Notes or on a security
position listing, or by person(s) authorized to become registered holder(s)
by endorsement and documents transmitted with this Notice of Guaranteed
Delivery. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title
below.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s): ______________________________________________________________
______________________________________________________________
______________________________________________________________
Capacity: ______________________________________________________________
______________________________________________________________
Address(es): ______________________________________________________________
______________________________________________________________
______________________________________________________________
GUARANTEE
The undersigned, a member of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc.
or a commercial bank or trust company having an office or correspondent in
the United States, hereby guarantees that the certificates representing the
principal amount of Outstanding Notes tendered hereby in proper form for
transfer, or timely confirmation of the book-entry transfer of such
Outstanding Notes into the Exchange Agent's account at The Depository Trust
Company pursuant to the procedures set forth in "The Exchange
Offer--Guaranteed Delivery Procedures" section of the Prospectus, together
with a properly completed and duly executed Letter of Transmittal (or a copy
thereof) with any required signature guarantee and any other documents
required by the Letter of Transmittal, will be received by the Exchange Agent
at the address set forth above, within three NYSE trading days after the date
of execution hereof.
_____________________________________ _________________________________
Name of Firm Authorized Signature
_____________________________________ _________________________________
Address Title
_____________________________________ Name: ___________________________
Zip Code (Please Type or Print)
Area Code and Tel. No. ______________ Date: ___________________________
NOTE: DO NOT SEND CERTIFICATES FOR OUTSTANDING NOTES WITH THIS FORM.
CERTIFICATES FOR OUTSTANDING NOTES SHOULD ONLY BE SENT WITH YOUR
LETTER OF TRANSMITTAL.
