Exhibit 99(2)
COMMONWEALTH OF THE BAHAMAS
New Providence
DATED the 26th day of May, 2003
BETWEEN:-
THE GOVERNMENT OF THE
COMMONWEALTH OF THE BAHAMAS
and
▇▇▇▇▇▇▇ INTERNATIONAL LIMITED
______________________________________
HEADS OF AGREEMENT
______________________________________
COMMONWEALTH OF THE BAHAMAS
New Providence
THESE HEADS OF AGREEMENT are made the 26th day of May, 2003.
BETWEEN :
(1) The Government of the Commonwealth of The Bahamas represented herein by, ▇▇▇▇▇▇▇ MAJOR, Secretary
of the National Economic Council, (hereinafter called "the Government") and;
(2) ▇▇▇▇▇▇▇ INTERNATIONAL LIMITED a company incorporated under the laws of and having its registered
office in the Commonwealth of The Bahamas, to include its relevant subsidiaries and affiliates at every
tier, represented herein by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Chairman and Chief Executive (hereinafter called "▇▇▇▇▇▇▇").
RECITALS
WHEREAS : -
▇. ▇▇▇▇▇▇▇, through its subsidiaries or affiliates, jointly with others or on its own, owns and
operates properties on Paradise Island including the Atlantis Resort, the Ocean Club and the Ocean
Club Golf Course, Harborside at Atlantis and certain undeveloped land ("the Paradise Island
Properties");
B. The parties hereto entered into a Heads of Agreement dated 18th August, 1993, as supplemented and
amended by Heads of Agreement dated 13th December, 1995 ("the 1995 Heads of Agreement") and 28th
November, 1997 (together "the Prior Heads of Agreement"), in respect of the development of the
first two phases of ▇▇▇▇▇▇▇'▇ development program on Paradise Island ("Phase I" and "Phase II");
C. Phases I and II being completed, ▇▇▇▇▇▇▇ is about to commence the third phase of development
("Phase III") as more particularly defined in paragraphs 1.1 and 1.2 hereof;
D. The Government has approved in principle the works and investments by ▇▇▇▇▇▇▇ comprised in Phase
III and in consideration thereof has agreed to certain incentives and concessions upon the terms
and conditions hereinafter contained.
NOW THESE HEADS OF AGREEMENT WITNESSETH in consideration of the premises as follows:-
1. OBLIGATIONS OF ▇▇▇▇▇▇▇
1.1 Subject to the matters contained or referred to in paragraph 11 hereof, and subject to the
Government complying with its obligations hereunder, ▇▇▇▇▇▇▇ hereby agrees to spend a minimum of
US$600 million directly towards the development and construction of Phase III to include the
following:
1.1.2 To construct a new hotel comprising a minimum of 1,000 rooms to be located on a site
comprising the former Pirates' Cove and Paradise Paradise hotel sites and expand existing
convention facilities by at least 50,000 square feet ("the New Hotel and Facilities");
1.1.3 To construct 3 luxury villas at the Ocean Club ("the Ocean Club Villas");
1.1.4 To construct approximately 20,000 square feet of restaurant and retail facilities on a
7-acre site adjacent to the Atlantis Marina, including new resort restaurant and bar
facilities to be operated by ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇ Village"). The retail facilities shall be
operated by Bahamians with the exception of the resort logo store which shall be operated
by ▇▇▇▇▇▇▇;
1.1.5 Expansion of the water-based attractions of Atlantis, including a new dolphin swim
attraction ("the Expanded Attractions"). ▇▇▇▇▇▇▇ shall meet the reasonable protocols and
requirements of the relevant Government agencies, including the Ministry of Agriculture,
Fisheries and Local Government, the Ministry of Health and the BEST Commission, and give
proper consideration to the concerns of the Bahamas National Trust, particularly with
respect to the establishment of a dolphin swim attraction;
1.1.6 To construct and provide for the initial equipping of a Fire and Ambulance Station on land
owned by ▇▇▇▇▇▇▇, to be operated and maintained by the Government under a 99-year lease at
a peppercorn rent, pursuant to paragraph 9.5 hereof ("the Fire and Ambulance Station");
1.1.7 To develop a golf course pursuant to paragraph 12 hereof ("the New Golf Course");
1.1.8 To expand the existing Potable Water Production and Treatment Plant and any other private
(as opposed to public utility) infrastructure upgrades or expansions necessary to
accommodate the other aspects of Phase III ("the Utilities and Infrastructure Expansion");
and
1.1.9 To construct an expansion of Harborside at Atlantis by the addition of approximately 120
2-bedroom units on adjacent land alongside Nassau Harbour ("Harborside Phase II").
1.2 Phase III is divided into two parts. Phase III-A shall comprise the Ocean Club Villas, Marina
Village, the Fire and Ambulance Station and Harborside Phase II. Phase III-B shall comprise
the New Hotel and Facilities, the New Golf Course, the Expanded Attractions and the Utilities
and Infrastructure Expansion. ▇▇▇▇▇▇▇ undertakes to commence construction of Phase III-A and
Phase III-B as follows:
1.2.1 Construction shall commence on aspects of Phase III-A by 31st December, 2003 and the
balance by 30th June, 2004, with an anticipated substantial completion date of all aspects
of Phase III-A by 31st December, 2005,
1.2.2 Subject to the matters contained or referred to in paragraph 11 hereof, Phase III-B
construction shall commence by 31st December of 2004. It is expected that the construction
period for Phase III-B shall not exceed 36 months.
1.2.3 ▇▇▇▇▇▇▇ may, in its discretion, move aspects from Phase III-B to Phase III-A without
prejudice to the application of the matters contained or referred to in paragraph 11 hereof
with respect to ▇▇▇▇▇▇▇'▇ decision to proceed with the remaining aspects of Phase III-B.
1.3 For the purposes of these Heads of Agreement, the following terms shall be assigned the meanings
below:
1.3.1 "subsidiaries" or "affiliates" shall include, as to a party, any corporation or other
entity or person controlled by, under common control with, or which controls, directly or
indirectly, such party, or of which such party is, directly or indirectly, at least a 50%
owner.
1.3.2 "commencement of construction" when applied to either Phase III-A or Phase III-B, shall
mean the date upon which the first site works are commenced with respect to any aspect of
Phase III-A or Phase III-B respectively.
1.3.3 "substantial completion of Phase III" shall mean the date upon which the New Hotel and
Facilities open for business, or, in the event that ▇▇▇▇▇▇▇ serves a Phase III-B Notice in
accordance with paragraph 11 hereof, the later of the Phase III-B Determination Date or the
date upon which the final aspect of Phase III that is constructed opens for business.
1.4 ▇▇▇▇▇▇▇ agrees in the development of Phase III to abide by the following:
1.4.1 Assuming completion of all aspects of both Phase III-A and Phase III-B, to create a
minimum of 2,000 additional permanent jobs for Bahamians;
1.4.2 To utilize Bahamian materials and services, subject to competitive terms, price, delivery,
efficiency and quality consistent with a first class resort, to international standards.
Also, accepting that the scale and complexity of the proposed construction will require
the involvement of major international construction companies and sub-contractors, and
having regard to standards of efficiency and quality of a first class resort, ▇▇▇▇▇▇▇
undertakes to use its best efforts to ensure that meaningful joint venture arrangements
are made, where possible and appropriate, with qualified and suitable Bahamian companies.
1.5 Subject to ▇▇▇▇▇▇▇ proceeding with Phase III-B, and in consideration of the Government's approval
for ▇▇▇▇▇▇▇'▇ expansion of its existing Potable Water Production and Treatment Plant, ▇▇▇▇▇▇▇
undertakes to buy from the Water and Sewerage Corporation a minimum of $1.6 million worth of water
per annum, at a per unit cost not to exceed the per unit cost to ▇▇▇▇▇▇▇ of producing the same
quantity of water at its facility ("the Annual Quota"), subject to the supply of water meeting
▇▇▇▇▇▇▇'▇ quality requirements, which shall be no more onerous than those applied to ▇▇▇▇▇▇▇'▇ own
water production facility. ▇▇▇▇▇▇▇'▇ undertaking to buy water from the Water and Sewerage
Corporation shall be from the date the New Hotel and Facilities open for business, and continue for
the period of 11 years from the Relevant Date, as hereinafter defined. ▇▇▇▇▇▇▇ may use its Annual
Quota as and when its usage requirements demand during the 12-month period, and shall be billed
accordingly. In the event that there are days that ▇▇▇▇▇▇▇'▇ request for water supply cannot be
fulfilled due to an inability to meet ▇▇▇▇▇▇▇'▇ quality and/or quantity requirements, ▇▇▇▇▇▇▇'▇
Annual Quota shall be reduced accordingly.
2. CASINO MANAGEMENT
Subject to continuing compliance with the requirements of the Gaming Board of The Bahamas and the terms of
the Casino Management Agreement as varied by the terms of this Agreement, or, in the case of variations
made by the terms of Prior Heads of Agreement, as confirmed by this Agreement, the Government agrees as
follows:
2.1 To cause the existing Casino Management Agreement ("the Casino Management Agreement") between
Paradise Enterprises Limited ("the Licencee") and the Hotel Corporation of The Bahamas ("HCB") with
respect to the Atlantis Casino together with any extension or expansion, thereof ("the Casino ") to
be extended to expire Twenty (20) years from the earlier of 31st December, 2007 or the date of
substantial completion of Phase III ("the Relevant Date").
2.2 To support the annual renewal of the existing Casino Management Licence ("the Licence") with
respect to the Casino to cover the period of the Casino Management Agreement;
2.3 Except for obligation to support the proposal for the operation of a slot casino at the Radisson
Resort on Cable Beach and the obligation to facilitate the grant of a licence to the operators of
the hotel situated on the Southwestern end of New Providence, presently known as the South Ocean
Golf and Beach Resort, to the extent that such obligations still exist, no new casino licences shall
be granted with respect to gaming operations in New Providence or Paradise Island for a period
expiring Twenty (20) years after the Relevant Date.
3. CASINO MANAGEMENT FEES
Upon commencement of construction of Phase III-A and for a period of 20 years from the Relevant Date, the
Government shall cause the terms as to annual payments in respect of Casino Tax and Casino Management Fees
in respect of the Casino to be as follows:
3.1 Schedule:
3.1.1 "Annual Licence Fee" of $100,000.00 per thousand square feet of floor space of the Casino;
3.1.2 "Minimum Win Tax" of $4.3 million on gaming winnings up to $20 million;
3.1.3 "Win Tax" of 10.0% of gaming winnings in excess of $20 million.
3.2 From the commencement of construction of Phase III-A, and for a period of 11 years from the
Relevant Date, the Government will permit to be deducted from the sums payable under 3.1 above:
3.2.1 $5 million from the amount of the Annual Licence Fee;
3.2.2 50% of the annual gaming Win Tax in excess of $20 million.
3.3 The deduction allowed by paragraph 3.2.2 hereof shall cease to apply with respect to gaming
winnings exceeding $175 million in any year up to and including the year 2010, and $200 million in
each successive year.
3.4 In the event that the amount of, or formula for computing the fees, taxes and/or annual payments
required to be made by ▇▇▇▇▇▇▇ to the Government, or any of its agencies, in the management or
operation of the Casino is changed during the period starting from the date of this Agreement and
ending on the date 20 years from the Relevant Date, the aggregate amount of such payments shall not
exceed the amount payable under this Agreement. For the avoidance of doubt, the `fees, taxes
and/or annual payments' to which this paragraph applies shall not include levies not specific to
the management or operation of a casino, such as payments made with respect to National Insurance.
3.5 ▇▇▇▇▇▇▇ shall be permitted to continue to operate the Casino following the expiration of the term
extended by paragraph 2.1 hereof. At no time shall ▇▇▇▇▇▇▇ be treated on terms less favourable
than those applied to other managers or operators of casinos in New Providence or Paradise Island
with respect to casino fees and casino taxes, or, in the event that there are no other casinos
operated in New Providence or Paradise Island, on terms less favourable than those applied to the
manager or operator of the next largest casino in The Bahamas.
3.6 Pending the coming into effect of the incentives granted by paragraphs 3.1 or 3.2 hereof, the
provisions of paragraph 3 of the 1995 Heads of Agreement shall be in effect.
4. HOTELS ENCOURAGEMENT ACT AND OTHER LEGISLATION
4.1 The proposed development comprising Phase III (other than Harborside II which is separately dealt
with in paragraph 5 hereof) shall be eligible for exemption from customs duty in respect of all
materials necessary for the construction, equipping, furnishing and completing the development of
Phase III pursuant to the Hotels Encouragement Act, Ch 289 ("HEA"), and other existing legislation,
and shall be treated as a `New Hotel' for the purposes of concessions under the HEA. The items
subject to such relief shall specifically include construction materials, bunker oil and diesel,
furniture, fixtures, casino games and equipment, and other equipment required for construction and
equipping of all aspects of the Phase III development, consistent with the practices followed with
respect to the Phase II development. Similar exemption shall be given for the fire truck,
ambulance and other items of equipment for the initial equipping of the Fire and Ambulance Station,.
4.2 All construction plant and vehicles necessary for the Phase III development may be imported into
and exported from The Bahamas free of customs duties, on a pre-approved basis. Such approvals will
be restricted to specialized and/or heavy vehicles and equipment, and shall be consistent with the
practices followed in Phase II, including with respect to the requirement of a bond.
4.3 The New Hotel and Facilities, the New Golf Course, Ocean Club Villas, Marina Village, the Expanded
Attractions, the Fire and Ambulance Station and the Utilities and Infrastructure Expansion shall be
exempted from payment of Real Property Tax for a period of Ten (10) years from the date of the
opening for business of each such aspect of Phase III, and subject to the maximum levy provided for
by HEA for a further period of Ten (10) years.
4.4 No Stamp Duty shall be payable by ▇▇▇▇▇▇▇ in respect of the materials, equipment and furnishings
referred to in paragraphs 4.1 and 4.2 hereof consistent with the practices followed with respect to
the Phase II development.
5. HARBORSIDE PHASE II CONCESSIONS
It is agreed as follows:
5.1 The proposed development comprising Harborside Phase II be exempted from customs duties
substantially equivalent to those to be provided in respect of the other aspects of Phase III, with
the exception that it is understood that stoves, refrigerators and kitchen appliances would not be
eligible for duty exemptions.
5.2 The Government is in the process of reviewing The Bahamas Vacation Plan and Time-sharing Act.
▇▇▇▇▇▇▇ shall be entitled to receive any additional benefits that may become available to
developers of timeshare resorts in The Bahamas.
6. SKILLS TRAINING FOR BAHAMIANS AND ENGAGEMENT OF NON-BAHAMIAN PERSONNEL
It is agreed that ▇▇▇▇▇▇▇ will maximize the employment of Bahamians in all stages of the Phase III
development and, arising out of the Phase III development, will reasonably promote entrepreneurial
opportunities for Bahamians. The Government recognizes that the timely completion of Phase III on a highly
accelerated schedule, and the successful operation of the completed Phase III to the highest international
standards will necessitate the employment of non-Bahamians. It is agreed as follows:
6.1 For the construction periods of Phase III, ▇▇▇▇▇▇▇ agrees to publicise and offer both employment
opportunities and equal opportunities for qualified Bahamian contractors to participate in the
bidding process for Phase III, and to promote appropriate joint ventures between non-Bahamian and
Bahamian contractors. The Government, relying on the good faith efforts of ▇▇▇▇▇▇▇ to maximize the
employment of Bahamians, undertakes to facilitate the grant of work permits and business licences,
and other necessary Government or Government agency approvals on a specified and highly accelerated
basis, consistent with practices followed in Phase II, in respect of such non-Bahamian personnel
and contractors as ▇▇▇▇▇▇▇ shall require.
6.2 ▇▇▇▇▇▇▇ shall use best efforts to collaborate with The Bahamas Technical and Vocational Institute,
or any other agency similar in purpose designated by the Government during the course of the
development of Phase III.
6.3 In recognition of the need in the management and operation of the Paradise Island Properties for
employees with special skills or experience, ▇▇▇▇▇▇▇ will be granted Twenty-five (25) new, work
permits for non-Bahamian employees based in The Bahamas on the same highly accelerated basis as in
paragraph 6.1 above.
6.4 ▇▇▇▇▇▇▇ shall continue to maximize the employment of Bahamian musicians and entertainers and use
reasonable efforts to acquire and display Bahamian artwork at the Paradise Island Properties.
6.5 ▇▇▇▇▇▇▇ will continue with and further develop its training programmes, for the purpose of
qualifying more Bahamians for employment in the operation and management of the Paradise Island
Properties, and collaborate with the School of Hospitality of the College of The Bahamas in
curriculum development and training.
7. PHASE III PERMISSIONS
In order to minimize the disruption of normal resort operations which will necessarily result during the
construction period of Phase III, the parties recognize that timing is critical, not only as to
commencement and timely completion of the construction works, but also as to the scheduling of such works
around high tourism seasons, and agree that the Government will use its best endeavours to facilitate the
grant of all necessary permissions and approvals, consistent with the practices followed with respect to
the Phase II development, so as to allow Phase III to commence and proceed to completion on an accelerated
schedule. In the event that ▇▇▇▇▇▇▇ experiences undue delays or failure by Customs, Exchange Control or
other relevant Governmental agency in the grant of permissions or approvals, ▇▇▇▇▇▇▇ shall notify the
Government in writing of such delays and the Government shall take appropriate action to expedite the
issuance of such delayed permissions or approvals.
8. JOINT MARKETING
As of the 31st December, 2002, being the expiration date of the existing joint marketing agreement, a new
agreement shall take effect upon the following terms:
8.1 During the 5 year period commencing on the 1st January, 2003 the Government shall contribute up to
$4 million per annum towards the costs and expenses of the marketing activities of ▇▇▇▇▇▇▇ as set
forth or referred to in paragraph 8.2 below, on a basis to be matched dollar for dollar by ▇▇▇▇▇▇▇.
8.2 The costs and expenses to which the contributions referred to in paragraph 8.1 above shall apply
are the direct costs (excluding the cost of salaries paid to employees of ▇▇▇▇▇▇▇ or its
subsidiaries) relating to (i) the staging of approved marketing events, (ii) marketing and public
relations activities and (iii) the production and placement of advertisements in all media
including, but not limited to, television, radio and print, to promote the destination and the
Paradise Island Properties including Phase III.
9. INFRASTRUCTURE IMPROVEMENTS
The Government, for the benefit of the Bahamian public and recognizing the requirements of a world-class
tourism destination, will pursue improvements to the infrastructure of New Providence and Paradise Island,
in particular, as follows:
9.1 The Government will continue to address the improvement of the road networks on New Providence,
including the access to and from Nassau International Airport and Paradise Island.
9.2 The Government will address needed and substantial improvement of the Nassau International Airport
facility.
9.3 Any necessary expansion of the facilities of BEC in order to meet the requirements of the completed
Phase III shall be undertaken by and at the expense of BEC, in particular the construction and
equipping of a new 15MW Transformer Substation on Paradise Island, together with all other
supporting infrastructure necessary to support secure electricity supplies to the Paradise Island
Properties and Phase III, without need for unusual load-shedding or other interruption in
electricity supply to the Paradise Island Properties and Phase III.
9.4 The Government will undertake any necessary expansion of the facilities of The Bahamas
Telecommunications Company in order to meet the requirements of Phase III prior to the opening of
the relevant aspect of Phase III.
9.5 The Government shall operate and maintain the Fire and Ambulance Station.
10. UNITED STATES TAX DEDUCTIONS
The Government will continue to pursue negotiations with the United States with a view to qualifying The
Bahamas as an eligible country allowing the costs of holding business conventions in the country as
deductions on United States taxes on terms comparable to those applicable to other jurisdictions.
11. PHASE III-B AND REDUCTION OF INCENTIVES
The parties agree as follows:
11.1 If ▇▇▇▇▇▇▇ determines on or before 31st December, ▇▇▇▇ ("▇▇▇ ▇▇▇▇▇ ▇▇▇-▇ Determination Date") not
to proceed with some or all of the aspects of Phase III-B, ▇▇▇▇▇▇▇ shall notify the Government by
way of a notice in writing addressed to the Secretary of the National Economic Council, with a copy
to the Permanent Secretary to the Ministry of Financial Services and Investments (or such other
addresses as the Government shall notify to ▇▇▇▇▇▇▇ in writing), listing those aspects of Phase
III-B not to be constructed ("a Phase III-B Notice").
11.2 Upon service of a Phase III-B Notice, and provided that the Government and its agencies have
complied with all of their obligations hereunder, the incremental value of the incentives granted
by paragraph 3.2 hereof as compared to the value of the incentives granted pursuant to paragraph
3.2 of the 1995 Heads of Agreement shall be reduced as of the date of the Phase III-B Notice by the
Relevant Percentage. The `Relevant Percentage' shall be 100% minus the amount of dollars actually
invested in or committed to Phase III expressed as a percentage of $600 million, being the total
investment contemplated herein. The incentives and agreements contained or referred to herein
shall otherwise remain in full force and effect.
12. GOLF COURSE
12.1 Recognizing the need for another golf facility within close proximity to Paradise Island, the
Government agrees, subject to the environmental matters referred to in paragraph 13 hereof, to
facilitate the grant of all necessary permissions to allow the development of Athol Island into a
new 18-hole golf facility. In developing the golf course, the parties will have regard to
environmental considerations, including the possibility of developing a links-style golf course.
Further in this regard, the parties will meet the reasonable protocols and requirements of the
relevant Government Agencies including the Ministries of Agriculture, Fisheries and Local
Government, the Ministry of Health and the BEST Commission, and give proper consideration to the
concerns of The Bahamas National Trust.
12.2 The ownership and development of the golf facility shall be conducted as a joint venture between
▇▇▇▇▇▇▇ and an agency to be nominated by the Government, on terms reasonably acceptable to the
parties ("the JV Entity"). The Government agrees that it shall lease such land, including any land
to be reclaimed, to the JV Entity for a 99-year term, at a nominal rent and ▇▇▇▇▇▇▇ shall
contribute to the JV Entity capital of at least $15,000,000 for the remediation and development of
the land (with the benefit of full HEA concessions).
12.3 The management and operation of the golf facility shall be subject to a management agreement
between the JV Entity and ▇▇▇▇▇▇▇, or a qualified third party operator acceptable to the parties,
on commercially reasonable terms.
12.4 It is agreed that the golf facility shall be accessible to guests of the Paradise Island
Properties, guests of other resort properties on Paradise Island and New Providence, as well as the
general public on terms to be agreed, including tee-time management policies and reasonably
competitive green fees, taking into consideration the world-class nature of such facility and the
capital expended thereon.
12.5 It is agreed that the only buildings to be constructed on Athol Island will be buildings in
connection with the maintenance and operation of the golf course and facility, and, except for
living accommodation for golf course staff or security (if deemed necessary), the development of
Athol Island as contemplated by this Agreement shall not include the construction of private
residences.
12.6 The parties agree that the development of Athol Island shall not affect the public's right to use
its beaches.
13. ENVIRONMENTAL INTEGRITY
▇▇▇▇▇▇▇ agrees as follows:
13.1 To commission and submit for the expeditious consideration of the BEST Commission an Environmental
Impact Study or Studies ("EIS"), prepared by qualified consultants in connection with Phase III
which studies shall be evaluated by the BEST Commission or any other relevant Government agencies.
13.2 To meet the reasonable protocols and requirements of the relevant Government agencies, including
the Ministry of Agriculture, Fisheries and Local Government, the Ministry of Health and the BEST
Commission in relation to all aspects of the development and operation of Phase III.
13.3 Give proper consideration to the concerns of the Bahamas National Trust.
13.4 To the extent reasonably requested by the BEST Commission, to pay the reasonable costs of a
qualified consultant or consultants to assist the BEST Commission in evaluating the EIS and
monitoring compliance with the protocols and requirements referred to in paragraph 13.2 hereof with
respect to the Dolphin Experience and the development of the New Golf Course on Athol Island.
14. SHARES AND COMMUNITY CONTRIBUTION PROGRAMME
▇▇▇▇▇▇▇ agrees as follows:
14.1 ▇▇▇▇▇▇▇ shall make good faith efforts to make available 500,000 shares in ▇▇▇▇▇▇▇ for subscription
by residents of The Bahamas by the substantial completion of Phase III-B, subject to consultation
with ▇▇▇▇▇▇▇'▇ bankers and the Central Bank of The Bahamas, and feasibility under laws and
regulations governing ▇▇▇▇▇▇▇ and its shares, and taking into account relevant commercial
considerations.
14.2 To contribute the sum of US$2,000,000 to benefit such community programmes in The Bahamas as shall
be designated by the Government,
15. ASSIGNMENT
▇▇▇▇▇▇▇ shall not assign its rights or obligations under this Agreement without the written consent of the
Government, such consent not to be unreasonably withheld or delayed. This provision shall not apply to
assignment by ▇▇▇▇▇▇▇ to or between its wholly-owned or controlled entities, provided however that ▇▇▇▇▇▇▇
shall notify the Government in writing within 14 days of any such assignment.
16. FURTHER ASSURANCE
The parties to this Agreement will do all acts and things and sign and execute all documents and deeds
requisite for the purpose of implementing the terms of this Agreement in such form and to such effect as
the other party may reasonably require.
17. MUTUAL WARRANTY AND ACKNOWLEDGMENT
17.1 Each of the parties warrants its power and authority to enter into these Heads of Agreement.
17.2 The parties hereto agree that they will work together in a spirit of mutual co-operation and good
faith towards the timely completion of Phase III, and will co-operate with each other to allow
reasonable monitoring of compliance with the terms of these Heads of Agreement, provided that such
monitoring shall not place unreasonable burdens on either party or unreasonably hinder or delay the
development of Phase III. During the development of Phase III, ▇▇▇▇▇▇▇ agrees to provide reports
to the Ministry of Finance, with copies to the Ministry of Financial Services and Investments and
to the Secretary to the National Economic Council, summarizing the cumulative amount expended by
▇▇▇▇▇▇▇ in the development of Phase III on a quarterly basis.
17.3 Notwithstanding anything to the contrary contained or referred to herein, the Government
acknowledges that ▇▇▇▇▇▇▇ shall at no time be treated upon terms, particular or general, any less
favourable than those available to any other operators of resorts with at least 700 rooms that
include a casino, located in New Providence or Paradise Island.
17.4 Either party, upon receipt of a specific request in writing from the other, shall provide such
information as the requesting party shall reasonably require to enable such party to monitor
compliance of the other with the relevant terms of this Agreement.
18. SEVERANCE
If any provision of these Heads of Agreement is declared by any judicial or other competent authority to be
void, voidable, illegal or otherwise unenforceable the parties shall amend that provision in such
reasonable manner as achieves the intention of the parties without illegality or at the discretion of the
parties the provision may be severed from these Heads of Agreement and the remaining provisions of these
Heads of Agreement shall remain in full force and effect.
19. FORCE MAJEURE
If for any reason outside the control of either party to this Agreement, including, without limitation,
such events as war, industrial action, hurricanes, floods, Acts of God, terrorist activities, travel
advisories affecting travel to The Bahamas, freight embargoes, civil commotion, or any significant adverse
change in economic conditions or in the financial markets of the United States of America, or any
significant decrease or disruption in airlift to The Bahamas any provision of this Agreement cannot be
performed or fulfilled, then for the duration of such condition ▇▇▇▇▇▇▇ shall be excused from so
performing, and the incentives granted pursuant to this Agreement shall be extended for a reasonable period
of time.
20. HEADINGS
Headings contained in these Heads of Agreement are for reference purposes only and should not be
incorporated into these Heads of Agreement and shall not be deemed to be any indication of the meaning of
the paragraphs to which they relate.
21. AMENDMENTS
Any amendment to these Heads of Agreement shall be in writing and executed by both parties.
22. COUNTERPARTS
These Heads of Agreement may be executed in any number of counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original and all of which counterparts, taken together,
shall constitute one and the same Heads of Agreement.
23. PREVIOUS HEADS OF AGREEMENT
These Heads of Agreement hereby amend and restate the Prior Heads of Agreement, to the effect that the
Prior Heads of Agreement shall be superceded by these Heads of Agreement, subject to the provisions of
paragraph 3.6 hereof. For the avoidance of doubt, any written agreements emanating from the prior Heads of
Agreement (such as agreements entered into under the HEA) shall remain in full force and effect in
accordance with their respective terms.
24. GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by the laws of the said Commonwealth of The Bahamas and in the event that
any suit or legal action is commenced by either party, the other party agrees, consents and submits to the
exclusive, jurisdiction of the courts of the said Commonwealth of The Bahamas.
[Signature page to follow]
THE GOVERNMENT OF THE COMMONWEALTH OF THE BAHAMAS
By :
/s/ ▇▇▇▇▇▇▇ Major
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Name: ▇▇▇▇▇▇▇ Major
Title: Secretary of the National Economic Council
▇▇▇▇▇▇▇ INTERNATIONAL LIMITED
By :
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman and Chief Executive
Extract from 1995 Heads of Agreement
For the purposes of Paragraph 3.6:
3.1 Schedule:
3.1.1 "Annual Licence Fee" of $100,000.00 per thousand square feet of floor space of the Casino;
3.1.2 "Minimum Win Tax" of $4.3 million on gaming winnings up to $20 million;
3.1.3 "Win Tax" of 12.5% of gaming win between $20 million and $120 million;
3.1.4 "Win Tax" of 10.0% of gaming winnings in excess of $120 million.
3.2 From the period of 11 years from the said completion and opening of the Project1, the Government
will permit to be deducted from the sums payable under 3.1 above:
3.2.1 $5 million from the amount of the Annual Licence Fee;
3.2.2 45% of the annual gaming Win Tax in excess of $20 million but less than $120 million.
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1 Date of completion of Phase II and opening of the Project - December 1998
