EXHIBIT 10.4
RECAPITALIZATION AGREEMENT
Among
SEABOURN CRUISE LINE LIMITED
CARNIVAL CORPORATION
and
CG HOLDING AS
Dated: May 27, 1998
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS 2
1.1 Definitions. 2
ARTICLE 2 TERMS OF RECAPITALIZATION AND PURCHASE OF SHARES 6
2.1 Articles Amendment. 6
2.2 Recapitalization 6
2.3 Purchase and Sale of the New Shares by Carnival 7
2.4 The Closing 8
2.5 Recapitalization Post-Completion Adjustment 8
2.6 Cunard Post-Closing Adjustment 11
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY 12
3.1 Due Incorporation 12
3.2 Qualification 12
3.3 Capital Stock 12
3.4 Authorization; No Contravention 12
3.5 Binding Effect 13
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE EXISTING SHAREHOLDERS 13
4.1 Title to Shares. 13
4.2 Authorization; No Contravention 14
4.3 Binding Effect 14
ARTICLE 5 CONDITIONS TO THE OBLIGATION OF THECOMPANY AND THE
EXISTING SHAREHOLDERS TO CLOSE 14
ARTICLE 6 LIMITATIONS ON TRANSFER 15
6.1 General Restrictions on Transfer 15
6.2 Void Transfers 15
6.3 Permitted Transfers 15
ARTICLE 7 RIGHT OF FIRST OFFER, TAG-ALONG AND BRING-ALONG RIGHTS 17
7.1 Right of First Offer 17
7.2 Tag-Along Rights 18
7.3 Bring-Along Rights 20
ARTICLE 8 CHANGE OF CONTROL BUYOUT 22
ARTICLE 9 CORPORATE GOVERNANCE AND CERTAIN OTHER
ACTIONS 24
9.1 General 24
9.2 Election of Directors 24
9.3 Removal and Replacement. 24
9.4 Company Name Change 25
ARTICLE 10 INITIAL PUBLIC OFFERING 25
10.1 Initial Public Offering 25
10.2 Initial Public Offering Procedure 25
10.3 Customary Agreements 26
10.4 Carnival Exchange 26
10.5 Put Option 26
10.6 No Fractional Shares 27
10.7 Closing of the Carnival Exchange and the Put Option 27
10.8 Exchange Ratio Adjustment 28
10.9 No Claims 29
ARTICLE 11 RIGHT TO PARTICIPATE IN CERTAIN ISSUANCE OF CAPITAL SHARES 30
11.1 Right to Participate in New Issuance 30
11.2 Exercise of Right 30
11.3 Closing 31
ARTICLE 12 SHARES CERTIFICATE LEGEND 31
ARTICLE 13 AFTER-ACQUIRED SECURITIES 32
ARTICLE 14 TRANSACTIONS WITH AFFILIATES 33
14.1 Limitation on Transactions with Affiliates 33
14.2 Exceptions 33
ARTICLE 15 TERMINATION 33
15.1 General. 33
15.2 Non-Consummation of Cunard Acquisition 34
15.3 No Liability 34
15.4 No Liability. 34
ARTICLE 16 TERMINATION OF JOINT VENTURE AGREEMENT 34
ARTICLE 17 CONFIDENTIALITY 35
ARTICLE 18 MISCELLANEOUS 35
18.1 Survival of Representations, Warranties,
Other Agreements and Undertakings 35
18.2 Notices 36
18.3 Expenses 37
18.4 Third Party Beneficiaries 37
18.5 Successors and Assigns 38
18.6 Amendment and Waiver 38
18.7 Counterparts 38
18.8 Headings 39
18.9 Governing Law 39
18.10 Arbitration 39
18.11 Severability 39
18.12 Entire Agreement 40
18.13 Further Assurances 40
RECAPITALIZATION AGREEMENT
This Recapitalization Agreement is made and entered into as of this
27th day of May, 1998 among Seabourn Cruise Line Limited, a Bahamas
International Business Corporation (the "Company"), Carnival Corporation, a
Panamanian Corporation ("Carnival") and CG Holding AS ("CG" and together with
Carnival, the "Existing Shareholders").
WHEREAS, each of the Existing Shareholders is the legal and
beneficial owner of 2,400 of issued and outstanding shares of the Company (the
"Existing Shares").
WHEREAS, pursuant to an Agreement for the Sale and Purchase of the
Business of Cunard, dated April 3, 1998, among Cunard Line Limited and others
as sellers and Carnival as buyer and Kvaerner ASA as guarantor (the "Sale and
Purchase Agreement"), Carnival agreed to acquire the business carried on by
affiliates of Kvaerner ASA under the name Cunard.
WHEREAS, Carnival will assign its rights and duties under the Sale
and Purchase Agreement to a newly-formed subsidiary ("Newco") of the Company.
WHEREAS, the Company intends to change its name to Cunard Line
Limited and contribute its assets and business to the combined entity.
WHEREAS, the parties hereto currently intend to consider an initial
public offering of equity securities of the Company prior to November 30, 1999
and, if such an initial public offering is made, the parties will consider
listing the equity securities of the Company on the Oslo Stock Exchange, either
as primary or secondary listing (it being understood that any such decisions
concerning an initial public offering shall be made by Carnival in its sole
discretion).
WHEREAS, prior to the acquisition of the business of Cunard Line
Limited (the "Cunard Acquisition"), the Company and the Existing Shareholders
desire to effect a recapitalization of the Company pursuant to which the
Existing Shareholders will receive ordinary shares of the Company (the "New
Shares");
WHEREAS, at Closing (as defined herein), as part of the
recapitalization, the parties will be issued an aggregate of 11,760,000 New
Shares of Seabourn based upon an assumed purchase price of Seabourn of
US$147,000,000 and, after Closing, the parties will be issued additional New
Shares reflecting an adjustment to the assumed purchase price.
WHEREAS, the Company wishes to issue and sell to Carnival, and
Carnival wishes to purchase from the Company, additional New Shares to finance
the Cunard Acquisition and repay the Seabourn Subordinated Loan (as defined
herein).
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"Actual Seabourn Share Issuance Amount" means with respect to each
Existing Shareholder, an amount equal to (i) the product of 0.5 and the
Adjusted Seabourn Price divided by (ii) US$10.00.
"Adjusted Cunard Price" means the purchase price under the Sale and
Purchase Agreement as adjusted under clause 4.2 thereof plus the actual amount
of the fees and expenses of Christiania reimbursed under Section 16.3 of the
Subscription Agreement.
"Adjusted Seabourn Price" means (i) US$310 million minus (ii) the
principal amount of the Seabourn Subordinated Loan (immediately prior to the
Closing) the amount of any long-term debt of the Company (at the Closing) and
the Company Debits (calculated in accordance with Section 2.5) plus (iii) the
Company Credits (calculated in accordance with Section 2.5).
"Affiliate means, with respect to any Person, any other Person
controlling, controlled by or under common control with, such Person. For
purposes of this definition, "control", when used with respect to any Person,
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Assumed Carnival Share Issuance Amount" means the assumed post-
closing share adjustment amount of Carnival set forth on Schedule A.
"Assumed Cunard Price" means US$380,444,000.
"Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"Business Day" means any day other than a Saturday, Sunday or public
holiday in England and Wales, the United States, Bermuda or the Bahamas.
"Carnival Additional Share Adjustment Amount" means the Carnival
Purchase Price Adjustment divided by US$10.00.
"Carnival Share Issuance Amount" the sum of (i) either (a) the
Assumed Carnival Share Issuance Amount plus the Carnival Additional Share
Adjustment Amount (if the Adjusted Cunard Price exceeds the Assumed Cunard
Price) or (b) the Assumed Carnival Share Issuance Amount minus the Carnival
Additional Share Adjustment Amount otherwise.
"Carnival Purchase Price Adjustment" means the product of (i) 0.7 and
(ii) either (a) the Adjusted Cunard Price minus the Assumed Cunard Price (if
the Adjusted Cunard Price exceeds the Assumed Cunard Price) or (b) the Assumed
Cunard Price minus the Adjusted Cunard Price otherwise.
"Closing" has the meaning set forth in Section 2.4 of this Agreement.
"Closing Date" means the second Business Day (as defined in the Sale
and Purchase Agreement) after all of the conditions of Completion shall have
been fulfilled or waived by the parties to the Sale and Purchase Agreement.
"Completion" has the meaning set forth in the Sale and Purchase
Agreement.
"Control" means direct or indirect ownership of stock or shares
possessing more than 50 percent of the total combined voting power of all
classes of stock or shares entitled to vote.
"Debt Repayment Amount" means (i) the outstanding principal amount
under the Seabourn Subordinated Loan at Closing divided by (ii) 10.
"Existing Shareholders" has the meaning set forth in the recitals to
this Agreement.
"Initial Public Offering" means an initial public offering of equity
securities of the Company in the United States, the United Kingdom or Norway
and a related listing of such shares on a national securities exchange or
trading market in the United States, the London Stock Exchange or the Oslo
Stock Exchange, respectively.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (excluding those arising by operation of law) or
other security interest of any kind or nature whatsoever.
"Person" means any individual, firm, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
governmental authority or other entity of any kind, and shall include any
successor (by merger or otherwise) of such entity.
"Seabourn Additional Share Issuance Amount" means, with respect to
each Existing Shareholder, the Actual Seabourn Share Issuance Amount minus the
Seabourn Base Shares.
"Seabourn Base Shares" means, with respect to each Existing
Shareholder, the number of New Shares representing base shares as set forth
opposite such Existing Shareholder's name on Schedule A.
"Seabourn Subordinated Loan" means the Secured Term Loan Agreement
dated February 18, 1992, by and between Seabourn, as Borrower and Carnival as
Lender, as amended by Addendum No. 1 dated February 15, 1996.
"Subscription Agreement" means the Subscription Agreement, dated as
of the date hereof, between the Company, Carnival and the persons named
therein.
"US$" means United States dollars, the lawful currency of the United
States of America.
ARTICLE 2
TERMS OF RECAPITALIZATION AND PURCHASE OF SHARES
2.1 Articles Amendment Prior to the Closing, the Company and the
Existing Shareholders shall take all action necessary to adopt, file and make
effective the amendments to the Company's Memorandum and Articles of
Association attached hereto as Exhibits A and B respectively.
2.2 Recapitalization.
(a) Upon the terms and subject to the conditions set forth
herein, the Company shall effect a recapitalization by way of an increase of
the share capital by a transfer to the share capital account from the paid-in
capital account to increase the par value of the Existing Shares, and a
subsequent stock split whereby the Existing Shares shall be converted into a
number of New Shares equal to the number determined under Sections 2.2(b) and
2.5.
(b) At the Closing, each of the Existing Shareholders, upon
presentation and surrender to the Company of the certificate representing the
Existing Shares held by such Existing Shareholder, shall be entitled to receive
a certificate representing the Seabourn Base Shares. After the Closing, the
Company shall issue additional New Shares to the Existing Shareholders subject
to the terms of Section 2.5.
(c) Upon the terms and subject to the conditions herein, the
Company agrees to issue to Carnival, and Carnival agrees to subscribe for and
accept from the Company a number of New Shares equal to the Debt Repayment
Amount in repayment for the outstanding principal amount under the Seabourn
Subordinated Loan. At the Closing, the Company shall pay to Carnival all
accrued interest and other fees and expenses on the Seabourn Subordinated Loan
through and including the Closing Date.
(d) At the Closing, upon delivery of the New Shares specified
in Section 2.2(c), all amounts outstanding under the Seabourn Subordinated Loan
shall be deemed repaid in accordance with terms of the agreements governing the
Seabourn Subordinated Loan.
2.3 Purchase and Sale of the New Shares by Carnival. (a) At the
Closing, upon the terms and subject to the conditions set forth herein, the
Company agrees to issue to Carnival, and Carnival agrees to subscribe for and
accept from the Company, an aggregate of 26,304,864 New Shares. After the
Closing, the Company shall issue additional New Shares to Carnival subject to
the terms of Section 2.6.
(b) The purchase price payable by Carnival for the New Shares
under this Section 2.3 shall be US$266,310,800, subject to adjustment in
accordance with Section 2.6. At the Closing, Carnival shall pay to the Company
US$266,310,800, which shall be held on account for the purchase price payable
hereunder.
2.4 The Closing. (a) The closing of the transactions
contemplated hereby (other than the additional New Shares to be issued pursuant
to Sections 2.5 and 2.6) (the "Closing") shall take place at the offices of
Paul, Weiss, Rifkind, Wharton and Garrison in New York, at 10 a.m., local time,
on the Closing Date or at such other time as the parties may mutually agree.
(b) At the Closing, (i) the Company shall deliver to each
Existing Shareholder certificates evidencing the number of Seabourn Base Shares
to which such Existing Shareholder is entitled registered in such Existing
Shareholder's name, upon presentation and surrender to the Company of the
certificate representing such Existing Shares held by such Existing
Shareholder, (ii) the Company shall deliver to Carnival certificates
representing a number of New Shares equal to the Debt Repayment Amount
registered in Carnival's name, in full satisfaction of all amounts owing under
the Seabourn Subordinated Loan and (iii) the Company shall deliver to Carnival
certificates evidencing 26,304,864 New Shares registered in Carnival's name,
upon payment of the funds payable by Carnival under Section 2.3(b). All
amounts paid by Carnival hereunder shall be paid by wire transfer of
immediately available funds to such account as may be designated by the
Company. Upon payment of all amounts required under Sections 2.3 and 2.6 and
the repayment of the Seabourn Subordinated Loan, all New Shares issued
hereunder shall be validly issued, fully paid and non-assessable and free and
clear from all Liens.
2.5 Recapitalization Post-Completion Adjustment. (a) Within 45
days of the Closing, or as otherwise agreed to by the parties to the Sale and
Purchase Agreement, the Company shall deliver to the Existing Shareholders (and
to the parties to the Subscription Agreement) a statement (the "Initial
Financial Statement") prepared by Price Waterhouse LLP ("Price Waterhouse"),
the Company's independent accountants, setting forth, as of the Closing Date
the Adjusted Seabourn Price and the Company's debits (the "Company Debits") and
credits (the "Company Credits") as described on Schedule 2.5 and itemized to
reflect each of the categories set forth on Schedule 2.5 (it being understood
that Schedule 2.5 sets forth a calculation of such amounts as of February 28,
1998 for informational purposes only). The Initial Financial Statement should
be prepared on a basis consistent with generally accepted accounting principles
in the United States and the Company's audited financial statements.
(b) The calculation of the Adjusted Seabourn Price, Company
Debits and Company Credits in the Initial Financial Statement shall become
final and binding on the Company and the Existing Shareholders for all purposes
of this Agreement unless either of the Existing Shareholders shall give written
notice of its disagreement (a "Notice of Disagreement") to the Company within
20 Business Days following receipt of its Initial Financial Statement. Any such
Notice of Disagreement shall specify in all reasonable detail the nature of any
disagreements so asserted. During a period of 10 Business Days following the
aforesaid 20 Business Day period, the Company and the Existing Shareholders
shall attempt to resolve in writing any differences they may have with respect
to any matter specified in any Notice of Disagreement. If at the end of such
10 Business Day period, the Company and the Existing Shareholders are unable to
reach agreement with respect to all such matters, then all such matters
specified in any Notice of Disagreement as to which such written agreement has
not been reached (the "Disputed Matters") shall be submitted to and reviewed
by an expert (the "Expert"), which shall be an independent public accounting
firm of outstanding international reputation (other than Price Waterhouse)
selected by the Company and the Existing Shareholders. If within five Business
Days following the expiration of such 10 Business Day period, the Company and
the Existing Shareholders have failed to agree in writing upon the selection of
the Expert or any Expert selected by them has not agreed to perform the
services called for thereunder, the Company shall select the Expert by lot from
among the following independent accounting firms (Arthur Andersen LLP, Coopers
& Lybrand L.L.P. or KPMG Peat Marwick LLP). Within 10 Business Days, the
Expert shall calculate each Disputed Matter in the Initial Financial Statement
and deliver a report to the Company and the Existing Shareholders. Each
Existing Shareholder shall pay one-half of the Expert's reasonable costs.
(c) The Company shall provide to its accountants and the Expert such
access and assistance as they may reasonably require to allow them to perform
their duties under this Section 2.5 (including, without limitation, reasonable
access to all working papers, records, accounts, invoices and other documents
used by Price Waterhouse in connection with the preparation of the Initial
Financial Statement and reasonable access to such personnel of Price Waterhouse
as were involved in the preparation of the Initial Financial Statement).
(d) If a Notice of Disagreement is delivered in a timely manner,
the calculation of the Adjusted Seabourn Price, Company Debits and Company
Credits, as modified to reflect the resolution of Disputed Matters in
accordance with this Section 2.5, shall become final and binding on the Company
and the Existing Shareholders for all purposes of this agreement upon the
earlier of (i) the date the Company and the Existing Shareholders resolve in
writing all Disputed Matters and (ii) the date the Expert delivers its report
that resolves all Disputed Matters.
(e) Within five Business Days after the calculation of Company
Credits and Company Debits is determined to be final and binding under this
Section 2.5, the Company shall issue to each Existing Shareholder a number of
New Shares equal to the Seabourn Additional Share Issuance Amount.
2.6 Cunard Post-Closing Adjustment. Upon completion of the
adjustments of the purchase price under clause 4.2 of the Sale and Purchase
Agreement, the Company shall notify Carnival in writing of the Carnival
Purchase Price Adjustment and whether the Company or Carnival must pay such
adjustment. Within five Business Days thereafter, (i) either (a) if the
Adjusted Cunard Price exceeds the Assumed Cunard Price, Carnival shall pay the
Carnival Purchase Price Adjustment by wire transfer of immediately available
funds to the account designated under Section 2.2 or (b) otherwise the Company
shall pay Carnival the Carnival Purchase Price Adjustment by wire transfer of
immediately available funds to an account of Carnival as designated in writing
by Carnival to the Company and (ii) subject to the receipt of any amounts due
under Section 2.6(i)(a), the Company shall issue to Carnival a number of
additional New Shares equal to the Carnival Share Issuance Amount.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Existing Shareholders on
the date hereof and on the Closing Date as follows:
3.1 Due Incorporation. The Company is an International Business
Corporation duly incorporated and validly existing under the laws of the
Bahamas and has all requisite corporate power and lawful authority to own,
lease and operate its properties and to carry on its business as now being
conducted.
3.2 Qualification. The Company is duly qualified or otherwise
authorized to transact business in each jurisdiction in which such
qualification or authorization is required by applicable law or in which the
failure so to qualify or be authorized would have a material adverse effect on
the Company.
3.3 Capital Stock. (a) As of the date hereof, the authorized share
capital of the Company is US$5,000, made up of 5,000 shares. As of the date
hereof, 4,800 shares are issued and outstanding. Upon the Closing, the
authorized share capital of the Company will be US$15 million, made up of 150
million shares. Except for this Agreement and the Subscription Agreement, the
Company has no obligations to issue any of its New Shares.
(b) Upon the payment by Carnival of the purchase price provided
under Section 2, the New Shares issuable hereunder will be duly authorized,
validly issued, fully paid and non-assessable and free and clear of all Liens.
3.4 Authorization; No Contravention. The execution, delivery and
performance by the Company of this Agreement and the transactions contemplated
hereby, including, without limitation, the sale, issuance and delivery of the
New Shares (i) are within the Company's corporate power and have been duly
authorized by all necessary corporate action of the Company; (ii) do not
contravene the terms of the Memorandum and Articles of Association, or any
amendment of either thereof, or any other organizational or governing documents
of the Company; and (iii) do not violate, conflict with or result in any breach
or contravention of, or the creation of any Lien under any material agreement
of the Company.
3.5 Binding Effect. This Agreement has been duly authorized,
executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity relating to
enforceability.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF THE EXISTING SHAREHOLDERS
Each of the Existing Shareholders represents and warrants as
applicable (severally as to itself only and not jointly) to the Company on the
date hereof and on the Closing Date that:
4.1 Title to Shares Such Existing Shareholder has good and
marketable title to the Existing Shares which are to be transferred to the
Company by such Existing Shareholder pursuant hereto, free and clear of any and
all Liens.
4.2 Authorization; No Contravention. The execution, delivery and
performance by such Existing Shareholder of this Agreement and the transactions
contemplated hereby, including, without limitation, the payment of the purchase
price (i) are within such Existing Shareholder's corporate or other power and
have been duly authorized by all necessary action of such Existing Shareholder;
(ii) do not contravene the terms of the certificate of incorporation and by-
laws (or comparable instruments), or any amendment of either thereof, or any
organizational or governing documents of such Existing Shareholder, as
applicable, and (iii) do not violate, conflict with or result in any breach or
contravention of, or the creation of any Lien under any material agreement of
such Existing Shareholder.
4.3 Binding Effect. This Agreement has been duly authorized,
executed and delivered by such Existing Shareholder and constitutes a legal,
valid and binding obligation of such Existing Shareholder enforceable against
such Existing Shareholder in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity relating to enforceability.
ARTICLE 5
CONDITIONS TO THE OBLIGATION OF THE
COMPANY AND THE EXISTING SHAREHOLDERS TO CLOSE
The obligations of the Company to issue New Shares on the Closing
Date and the Existing Shareholders to surrender certificates under
Section 2.2(b) and the obligation of Carnival to pay the amounts under
Section 2.3(b) and to deem the Seabourn Subordinated Loan repaid, shall be
conditioned upon the waiver or satisfaction of all conditions set forth in
clause 6 of the Sale and Purchase Agreement.
ARTICLE 6
LIMITATIONS ON TRANSFER
6.1 General Restrictions on Transfer. Each Existing Shareholder
agrees that such Existing Shareholder shall not, either directly or indirectly,
offer, sell, transfer, assign, mortgage, hypothecate, pledge, create a security
interest in or Lien upon, encumber, donate, contribute, place in trust, or
otherwise voluntarily or involuntarily dispose of (any of the foregoing
actions, to "Transfer" and, any offer, sale, transfer, assignment, mortgage,
hypothecation, pledge, security interest or Lien, encumbrance, donation,
contribution, placing in trust or other disposition, a "Transfer") any New
Shares, or any interest therein, except in a transaction that is specifically
permitted by this Agreement.
6.2 Void Transfers. Any attempt to Transfer any New Shares, or any
interest therein, which is not in compliance with this Agreement shall be null
and void ab initio, and the Company shall not give any effect in the Company's
stock records to such attempted Transfer.
6.3 Permitted Transfers. Notwithstanding Sections 6.1 and 6.2,
Transfers (including, without limitation, pledges of New Shares as collateral
for loans) may be made pursuant to this Agreement if:
(i) such Transfer complies in all respects with the appli
cable provisions of this Agreement including, without limitation,
Articles 7 and/or 8 and applicable federal and state securities laws;
(ii) the transferee agrees in writing with the Company and
the other Existing Shareholders to be bound by the terms and conditions of
this Agreement with respect to the New Shares transferred to such
transferee to the same extent as the Existing Shareholder who originally
held such New Shares is or was bound hereby (whereupon such transferee
shall be entitled to the same rights as such Existing Shareholder who
originally held such New Shares had with respect to such New Shares and
shall be deemed to be a Existing Shareholder for all purposes hereunder
with respect to such New Shares);
(iii) if requested by the Company, in its sole discretion,
an opinion of counsel to such transferring Existing Shareholder shall be
supplied to the Company, at such transferring Existing Shareholder's
expense, to the effect that such Transfer complies with applicable United
States federal and state securities laws; and
(iv) except for the parties to this Agreement, such
transferee is not (i) a Person engaged, directly or indirectly, in the cruise
line business, (ii) an owner, partner or shareholder holding more than 10% of
the equity interest in such a Person or (iii) an Affiliate of a Person
described in clauses (i) and (ii).
ARTICLE 7
RIGHT OF FIRST OFFER, TAG-ALONG AND BRING-ALONG RIGHTS
7.1 Right of First Offer. (a) If CG shall desire to sell all or
any portion of its New Shares to any Person other than Carnival, CG shall offer
such New Shares first to Carnival by sending written notice (the "Offering
Notice" to Carnival which shall state (a) the number of New Shares proposed to
be transferred (the "Offered Shares") and (b) the proposed purchase price per
Offered Shares which the Selling Stockholder is willing to accept (the "Offer
Price"). Upon delivery of the Offering Notice, such offer shall be irrevocable
unless and until the rights of first offer provided for herein shall have been
waived or shall have expired.
(b) For a period of 15 Business Days after the giving of the
Offering Notice pursuant to Section 7.1(a) (the "Carnival Option Period"),
Carnival shall have the right (the "Carnival Option") to purchase all (but not
less than all) of the Offered Shares at a purchase price equal to the Offer
Price and upon the terms and conditions set forth in the Offering Notice. The
right of Carnival to purchase all of the Offered Shares under this
Section 7.1(b) shall be exercisable by delivering written notice of the
exercise thereof, prior to the expiration of the 15 Business Day period
referred to above, to CG. The failure of Carnival to respond within such
15 Business Day period shall be deemed to be a waiver of Carnival's rights
under Section 7.1(a). Carnival may waive its rights under Section 7.1(a) prior
to the expiration of the 15 Business Day period by written notice to CG.
(c) The closing of the purchase of the Offered Shares
subscribed for by Carnival under Section 7.1(b) shall be held at such place and
time as Carnival shall designate in writing to CG. At such closing, CG shall
deliver the Offered Shares to Carnival upon payment of the Offer Price. All
amounts paid hereunder shall be paid by wire transfer of immediately available
funds to such account as may be designated by CG to Carnival. At such closing,
the Offered Shares shall be free and clear from all Liens.
7.2 Tag-Along Rights. (a) If Carnival shall desire to sell New
Shares representing a majority of all outstanding New Shares (a "Proposed
Sale") to any Person other than CG or an Affiliate of Carnival (a "Third Party
Purchaser"), then Carnival shall offer CG the right to participate in the
Proposed Sale with respect to a number of New Shares determined as provided in
this Section 7.2 by sending written notice (the "Tag-Along Notice") to the
Company and CG, which notice shall (i) state the number of New Shares proposed
to be sold in such Proposed Sale by Carnival (the "Proposed Sale Shares"),
(ii) state the proposed purchase price per Proposed Sale Share (the "Tag-Along
Price") and all other material terms and conditions of such Proposed Sale and
(iii) if applicable, be accompanied by any written offer from the Third Party
Purchaser; provided, however, that Carnival shall not be obligated to deliver a
Tag-Along Notice if the Transfer (if consummated) is made pursuant to
Section 7.3
(b) CG shall have the right to require Carnival to cause the Third
Party Purchaser to purchase from CG at the Tag-Along Price (and otherwise upon
the same terms and conditions as those set forth in the Tag-Along Notice) a
number of New Shares owned by CG ("CG's Tag-Along Shares") not in excess of the
product of (i) the total number of Proposed Sale Shares, times (ii) a fraction,
the numerator of which is the total number of New Shares owned by CG and the
denominator of which is equal to the sum of the total number of New Shares
owned by Carnival and CG and any person owning New Shares entitled to
participate in such Proposed Sale pursuant to the Subscription Agreement. Such
right of CG shall be exercisable by written notice to Carnival with copies to
the Company given within 10 Business Days after receipt of the Tag-Along Notice
(the "Tag-Along Notice Period"), which notice shall state the number of Tag-
Along Shares that CG elects to sell in the Proposed Sale, if less than the
maximum number of CG's Tag-Along Shares; provided that, if such notice shall
not state a number of Tag-Along Shares, then CG will be deemed to have elected
to sell the maximum number of CG's Tag-Along Shares. Failure by CG to respond
within the Tag-Along Notice Period shall be regarded as a rejection of the
offer made pursuant to the Tag-Along Notice. The number of Tag-Along Shares
elected, or deemed to be elected, by CG to be sold as provided above is
referred to in this Section 7.2 as CG's "Participating Tag-Along Shares". The
number of New Shares to be sold by Carnival in the Proposed Sale shall be
reduced by the aggregate number of Participating Tag-Along Shares to be sold
pursuant to this Section 7.2 by CG.
(c) At the request of Carnival made not less than two Business Days
prior to the proposed Transfer, CG shall deliver to Carnival certificates
representing its Participating Tag-Along Shares, duly endorsed, in proper form
for Transfer, together with a limited power-of-attorney authorizing Carnival to
transfer such Participating Tag-Along Shares to the Third Party Purchaser and
to execute all other documents required to be executed in connection with such
transaction.
(d) If no Transfer of the Tag-Along Shares in accordance with the
provisions of this Section 7.2 shall have been completed within 70 Business
Days of the Tag-Along Notice, then Carnival shall promptly return to CG, in
proper form, all certificates representing CG's Participating Tag-Along Shares
and the limited power-of-attorney previously delivered by CG to Carnival.
(e) The closing of the sale of the Participating Tag-Along Shares by
the Participating Tag-Along Shareholders shall be held at the same place and
time as the closing of the sale by Carnival in the Proposed Sale. Promptly
after the consummation of the Transfer of the Participating Tag-Along Shares
pursuant to this Section 7.2, CG shall receive (i) the consideration with
respect to the Participating Tag-Along Shares so Transferred and (ii) such
other evidence of the completion of such Transfer and the terms and conditions
(if any) thereof as may reasonably be requested by Carnival.
(f) The provisions of this Section 7.2 shall remain in effect,
notwithstanding any return to CG of Participating Tag-Along Shares as provided
in Section 7.2(d).
7.3 Bring-Along Rights. (a) In the event that Carnival
receives a bona fide offer from a Third Party Purchaser (excluding offers from
Affiliates of Carnival) to purchase (including a purchase by merger) at least a
majority of the outstanding New Shares, Carnival may send written notice (a
"Buyout Notice") to the Company and CG notifying CG that it will be required to
sell the same percentage of its New Shares in such sale as the Selling
Shareholder propose to sell (which percentage shall be specified in such Buyout
Notice) (the "Designated Percentage").
(b) Upon receipt of a Buyout Notice, CG shall be obligated:
(i) to sell the Designated Percentage of its New Shares in
the transaction (including a sale or merger) contemplated by the Buyout
Notice on the same terms and conditions as Carnival;
(ii) to provide for the payment by CG of its pro rata
portion of all costs associated with such transaction, in the proportion
that the number of New Shares owned by such Existing Shareholder bears to
the number of outstanding New Shares; and
(iii) otherwise to take all necessary action to cause the
consummation of such transaction, including voting its New Shares in favor
of such transaction and not exercising any appraisal rights in connection
therewith.
(c) CG further agrees to (i) take all actions (including
executing documents) in connection with the consummation of the proposed
transaction as may reasonably be requested of it by Carnival and (ii) appoint
Carnival as its attorneys-in-fact to do the same on its behalf.
(d) In the event a contract with respect to the transaction
contemplated by the Buyout Notice has not been entered into within the 90
Business Days after the date of delivery of the Buyout Notice, the obligations
of CG under this Section 7.3 with respect to such Buyout Notice shall
terminate, subject, however, to the right of Carnival to deliver a further
Buyout Notice.
ARTICLE 8
CHANGE OF CONTROL BUYOUT
(a) If Atle Brynestad no longer has Control of CG (a "Loss
of Control"), then Carnival may, within 30 Business Days of such Loss of
Control, by notice in writing to CG (the "Loss of Control Notice"), offer to
purchase all (but not some) of the New Shares held by CG (the "CG Shares") at
such price per share (the "Stated Price") as shall be specified by Carnival in
the Loss of Control Notice. At the closing contemplated under Section 8(c), CG
shall sell the CG Shares to Carnival and Carnival shall purchase the CG Shares
pursuant to the terms of this Article
(b) The Loss of Control Notice shall become final and
binding on the Existing Shareholders for all purposes of this Agreement unless
CG shall, within 14 Business Days, give written notice to Carnival requesting
that the value of the CG Shares be appraised (the "Appraisal Notice"). The
appraised per share value of the CG Shares (the "Appraised Value") shall be
determined by an appraisal conducted by a committee of three appraisers (the
"Appraisal Committee"). Each of the Existing Shareholders shall, within five
Business Days of the delivery of the Appraisal Notice to Carnival, select one
of the appraisers constituting such committee and the two appointed appraisers
shall select a third. The Company shall be responsible for their reasonable
costs of the Appraisal Committee. If either Existing Shareholder fails within
the specified time to select an appraiser, the committee shall be comprised of
such appraiser or appraisers who have been so selected. The Appraisal
Committee shall be instructed that the appraisal report (which shall set forth
the Appraisal Value) (the "Appraisal Report") shall be completed and delivered
to the Company and to the Existing Shareholders within 28 Business Days of the
appointment date of the Appraisal Committee. Such appraisal shall be made on
the basis of the fair market value of the Company taking into account the value
and goodwill, if any, of the established business operations conducted by the
Company, and the Appraised Value shall be such fair market value as so
determined divided by the fully diluted number of New Shares issued and
outstanding. In the event that the Appraisal Committee cannot agree on the
Appraised Value, the Appraised Value shall be the highest amount supported by a
majority of the appraisers. If the Appraisal Price is determined under this
Section 8(b), then the Appraisal Price shall, notwithstanding Section 8(a), be
the Stated Price for all purposes of Article 8. The determination of the
Appraisal Price under this Section 8(b) shall become final and binding on the
Company and the Existing Shareholders for all purposes of this Agreement.
(c) The closing of the sale contemplated by this Article 8
shall occur within five Business Days after the calculation of the Stated Price
is determined to be final and binding under this Article 8 and be held at such
place and time as Carnival shall designate in writing to CG. At such closing,
CG shall deliver to Carnival certificates evidencing all of the CG Shares upon
payment by Carnival to CG of a per share price equal to the Stated Price. All
amounts paid hereunder shall be paid by wire transfer of immediately available
funds to such account as may be designated by CG to Carnival. All CG Shares
when delivered to Carnival shall be free and clear from all Liens.
ARTICLE 9
CORPORATE GOVERNANCE AND CERTAIN OTHER ACTIONS
9.1 General. Each Existing Shareholder shall vote its New Shares at
any regular or special meeting of Existing Shareholders of the Company, or in
any written consent executed in lieu of such a meeting of Existing
Shareholders, and shall take all other actions necessary, to give effect to the
provisions of this Agreement (including Sections 2.1 and 9.2), and to ensure
that the Company's Memorandum and Articles of Association do not, at any time
hereafter, conflict in any respect with the provisions of this Agreement.
9.2 Election of Directors. Each Existing Shareholder agrees that,
except as the Existing Shareholders may otherwise agree in writing, the number
of directors constituting the entire Board of Directors shall be seven. One of
such directors shall be designated by CG; provided that if CG ceases to own 10%
of the issued and outstanding New Shares, CG's designated director shall resign
from the Board of Directors and CG shall no longer have the right to designate
a director. The initial director designated by CG shall be Atle Brynestad.
9.3 Removal and Replacement. CG shall be entitled at any time and
for any reason (or for no reason) to designate its designee on the Board of
Directors for removal. If the CG designee dies, is removed or resigns as a
director, then CG shall, as soon as practicable thereafter, designate a
replacement director and, as soon as practicable thereafter, the Company and
each of the Existing Shareholders shall take action, including, if necessary,
the voting of its New Shares, to elect or cause the election by the Board of
Directors of such replacement director in accordance with Section 9.2.
9.4 Company Name Change. Each Existing Shareholder hereby agrees to
approve the change of the Company's name to Cunard Line Limited and to take all
action necessary, including the voting of its New Shares, to effect the same.
ARTICLE 10
INITIAL PUBLIC OFFERING
10.1 Initial Public Offering. It is the current intention of the
parties to complete the Initial Public Offering prior to November 30, 1999 (the
"IPO Deadline"); provided that, if market conditions do not permit the Initial
Pubic Offering prior to the IPO Deadline, the IPO Deadline may be extended at
the option of Carnival. If the Initial Public Offering is in the United
States, the Company and CG shall in good faith attempt to negotiate a
registration rights agreement with customary terms and provisions to provide CG
with one demand registration right and with piggy-back registration rights.
10.2 Initial Public Offering Procedure. Prior to the Initial Public
Offering, the Company shall provide CG with written information regarding the
Initial Public Offering process and, to the extent determined by Carnival in
its sole discretion, shall invite CG to participate in such Initial Public
Offering. If, after being so invited, CG desires to sell New Shares in the
Initial Public Offering CG shall, within a time limit set out by the Company in
writing, notify the Company in writing of its wish to sell and the amount of
New Shares it desires to sell.
10.3 Customary Agreements. In connection with the Initial Public
Offering, Carnival and CG agree to enter into customary agreements (including,
without limitation, a lock-up agreement) with the Company and the
arrangers/underwriters of the Initial Public Offering.
10.4 Carnival Exchange. Notwithstanding Sections 10.1, 10.2
and 10.3, at the option of Carnival, in its sole discretion, in lieu of an
Initial Public Offering, Carnival may at any time elect to purchase all of the
New Shares owned by CG (the "Carnival Exchange") in exchange for shares of
common stock of Carnival (the "Carnival Common Stock"). Prior to effecting the
Carnival Exchange, Carnival shall, in its sole discretion, consider first
whether to effect the Initial Public Offering. In the Carnival Exchange, CG
shall be entitled to receive a number of shares equal to the product of (i) the
number of New Shares owned by CG and (ii) the Exchange Ratio. The Exchange
Ratio shall initially be 0.14493 and shall be subject to adjustment as provided
in Section 10.7 below. If it elects to effect the Carnival Exchange, Carnival
shall notify CG in writing of the Carnival Exchange. Such notice shall specify
the Exchange Ratio and the place and time of the closing of the Carnival
Exchange (which shall be a date within 20 Business Days of the calculation of
the Exchange Ratio).
10.5 Put Option. Notwithstanding Sections 10.1, 10.2, 10.3 and
10.4, if on the third anniversary of the Closing, the Company has not completed
the Initial Public Offering and the Carnival Exchange has not occurred, CG
shall, from and after the third anniversary of the Closing, have the option
(the "Put Option") to put all of CG's New Shares to Carnival in exchange for
Carnival Common Stock. The Put Option shall be exercisable by CG by delivery
of written notice to Carnival (the "Put Option Notice") within 10 days after
the third anniversary of the Closing. At the closing of the Put Option, CG
shall be entitled to receive a number of shares of Carnival Common Stock equal
to the product of (i) the number of New Shares owned by CG and (ii) the
Exchange Ratio. At the closing of the Put Option Carnival shall be obligated
to purchase all of the New Shares owned by CG in exchange for shares of
Carnival Common Stock as determined in accordance with the preceding sentence.
Carnival shall provide notice in writing to CG of the Exchange Ratio and the
place and time of the closing of the Put Option (which closing date shall be
within 45 Business Days after the third anniversary of the Closing).
10.6 No Fractional Shares. No fraction of Carnival Shares will be
issued to CG in connection with the Carnival Exchange or the exercise of the
Put Option. In lieu thereof, Carnival shall pay to CG cash in an amount equal
to the product of such fraction and the closing price for the Carnival Common
Stock on the New York Stock Exchange Composite Tape on the last trading day
prior to the closing of either the Carnival Exchange or the Put Option.
10.7 Closing of the Carnival Exchange and the Put Option. The
closing for the purchase of the New Shares pursuant to Sections 10.4 or 10.6
shall be held at such place and time as Carnival shall designate in writing to
CG. At such closing, in exchange for all of the New Shares held by CG,
Carnival shall issue, sell and deliver to CG shall purchase, acquire and accept
from Carnival, certificates evidencing the number of shares of Carnival Common
Stock to which CG is entitled under Sections 10.4 or 10.6, registered in CG's
name, all of which, upon issuance shall have been duly authorized, validly
issued, fully paid and non-assessable and free and clear from all Liens. All
New Shares delivered by CG to Carnival under this Section 10.7 shall be free
and clear from all Liens.
10.8 Exchange Ratio Adjustment. If Carnival or the Company shall,
at any time or from time to time, (i) declare a dividend of shares of the
Carnival Common Stock or New Shares payable in Carnival Common Stock or New
Shares, respectively, (ii) subdivide the outstanding shares of Carnival Common
Stock or New Shares, (iii) combine the outstanding Carnival Common Stock or New
Shares into a smaller number of shares, or (iv) issue any shares of Carnival
Common Stock or New Shares in a reclassification of Carnival Common Stock or
New Shares, respectively (including any such reclassification in connection
with a consolidation or merger in which Carnival or the Company is the
surviving corporation), then in each such case, the Exchange Ratio in effect at
the time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, shall be proportionately adjusted
so that upon the Carnival Exchange or the closing of the Put Option CG shall be
entitled to receive the same aggregate number of shares of Carnival Common
Stock which, if the Carnival Exchange or the closing of the Put Option had
occurred immediately prior to such date, CG would have owned upon such Carnival
Exchange or the closing of the Put Option and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification. If
there occurs any reclassification of the Carnival Common Stock, consolidation
or merger of Carnival with or into another Person (other than a merger or
consolidation of Carnival in which Carnival is the continuing corporation and
which does not result in any reclassification or change of outstanding shares
of the Carnival Common Stock) or the sale or conveyance of all or substantially
all of the assets of Carnival to another Person, then CG will thereafter be
entitled to receive, upon the Carnival Exchange or the closing of the Put
Option, the same kind and amounts of securities (including shares of stock) or
other assets, or both, which were issuable or distributable to the holders of
outstanding Carnival Common Stock upon such reclassification, consolidation,
merger, sale or conveyance, in respect of that number of shares of Carnival
Common Stock then deliverable upon the Carnival Exchange or the closing of the
Put Option if the Carnival Exchange or the Put Option had been exercised
immediately prior to such reclassification, consolidation, merger, sale or
conveyance. Any such adjustment of the Exchange Ratio shall become effective
immediately after the record date of such dividend or the effective date of
such subdivision, combination, reclassification, consolidation, merger, sale or
conveyance. Such adjustment of the Exchange Ratio shall be made successively
whenever any event listed above shall occur. If a stock dividend is declared
and such stock dividend is not paid, the Exchange Ratio shall again be adjusted
to be the Exchange Ratio in effect immediately prior to such record date.
10.9 No Claims. CG understands and agrees that it shall have no
claim against the Company, Newco, Carnival or any of their directors, officers
or affiliates if the Initial Public Offering shall not occur or if Carnival
elects to effect the Carnival Exchange and to the fullest extent permitted by
law, waives any such claim.
ARTICLE 11
RIGHT TO PARTICIPATE IN CERTAIN ISSUANCE OF CAPITAL SHARES
11.1 Right to Participate in New Issuance. If the Company
determines to issue any Shares or any security convertible into or exercisable
or exchangeable for Shares, to any shareholder of the Company (including an
Existing Shareholder) (other than capital shares to be issued (i) in connection
with an employee stock option plan or other bona fide employment compensation
arrangement that is approved by the Company's Board of Directors, (ii) pursuant
to a stock split or stock dividend, (iii) pursuant to the exercise of any
option, warrant or convertible security theretofore issued, (iv) as
consideration in connection with a bona fide acquisition by the Company or any
of its subsidiaries or (v) pursuant to the Initial Public Offering) (each such
issuance not excluded by the immediately preceding parenthetical being herein
referred to as a "New Issuance"), then the Company shall notify the Existing
Shareholders of the proposed New Issuance. Such notice shall specify the
number and class of securities to be issued, the rights, terms and privileges
thereof and the estimated price at which such securities will be issued.
11.2 Exercise of Right. By written notice to the Company given
within 15 Business Days of being notified of such New Issuance, each Existing
Shareholder shall be entitled to purchase that percentage of New Issuance
determined by dividing (a) the total number of Shares owned by such Existing
Shareholder by (b) the total number of all outstanding Shares. Such right
shall be exercisable within 15 Business Days following the receipt of the
notice delivered pursuant to the previous sentence. To the extent the Existing
Shareholders do not elect to purchase all of the securities proposed to be
offered and sold in the New Issuance, the Company may issue those securities
not so subscribed for, provided that such sales are consummated within 120
Business Days after the Existing Shareholders' rights hereunder have expired or
been waived.
11.3 Closing. The closing of the New Issuance shall be held at such
time as the Company shall designate in writing to the Existing Shareholders
that elect to purchase securities in the New Issuance pursuant to this Article
11 not fewer than five Business Days prior to the date of such closing, at the
Company's principal offices, or at another place designated by the Company in
writing to such Existing Shareholders in such notice.
ARTICLE 12
SHARES CERTIFICATE LEGEND
The Company and Existing Shareholders agree that each certificate
representing the New Shares now or hereafter held by an Existing Shareholder
shall be endorsed with a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE OFFERED FOR
SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
THE SALE, ASSIGNMENT, HYPOTHECATION, PLEDGE, ENCUMBRANCE OR OTHER
DISPOSITION (EACH A "TRANSFER") AND VOTING OF ANY OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE TERMS OF THE
RECAPITALIZATION AGREEMENT, DATED AS OF MAY 27, 1998 (THE
"RECAPITALIZATION AGREEMENT"), AMONG SEABOURN CRUISE LINE LIMITED,
(THE "COMPANY"), CARNIVAL CORPORATION AND CG HOLDING AS, A COPY OF
WHICH MAY BE INSPECTED AT THE COMPANY'S PRINCIPAL OFFICE. THE
COMPANY WILL NOT REGISTER THE TRANSFER OF SUCH SECURITIES ON THE
BOOKS OF THE COMPANY UNLESS AND UNTIL THE TRANSFER HAS BEEN MADE IN
COMPLIANCE WITH THE TERMS OF THE RECAPITALIZATION AGREEMENT."
ARTICLE 13
AFTER-ACQUIRED SECURITIES
All of the provisions of this Agreement shall apply to all of the New
Shares now owned or that may be issued or transferred hereafter to an Existing
Shareholder in consequence of any additional issuance, purchase, exchange or
reclassification of any of the New Shares (including without limitation, upon
the exercise of any option or warrant), corporate reorganization, or any other
form of recapitalization, consolidation, merger, share split or share dividend,
or that are acquired by an Existing Shareholder in any other manner, and, in
the case of any such event, appropriate adjustment shall be made to any number
of New Shares hereunder to take account of such event provided, however, with
respect to CG, no New Shares that are subject to the terms of the Subscription
Agreement shall be subject to the terms of this Agreement.
ARTICLE 14
TRANSACTIONS WITH AFFILIATES
14.1 Limitation on Transactions with Affiliates. From and after the
Closing, the Company will not sell, lease, transfer or otherwise dispose of any
of its properties or assets to, or purchase any property or assets from, or
enter into or make any contract, agreement, loan, advance or guarantee with, or
for the benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction"), unless such Affiliate Transaction is on terms no less favorable
to the Company than those that could be obtained on an arm's length basis with
a third party.
14.2 Exceptions. The limitation under Section 14.1 does not limit,
and shall not apply to (i) any transaction or series of transactions approved
by a majority of the disinterested members of the Board of Directors; (ii) any
transaction between the Company and a wholly-owned subsidiary; (iii) the
payment of reasonable compensation to directors and officers of the Company;
(iv) reasonable loans made by the Company to its officers and directors as
approved by the Board of Directors; (v) any employment agreement with officers
entered into by the Company in the ordinary course of business of the Company.
ARTICLE 15
TERMINATION
15.1 General This Agreement shall become effective upon the
execution hereof and shall terminate upon the earlier of:
(i) the consummation by the Company of the Initial Public
Offering or the consummation of the Carnival Exchange; and
(ii) such earlier date as the Existing Shareholders shall
unanimously agree in writing to terminate this Agreement;
15.2 Non-Consummation of Cunard Acquisition. This Agreement shall
terminate (i) upon the termination of the Sale and Purchase Agreement or
(ii) if acquisition of the business of Cunard is not consummated for any
reason.
15.3 No Liability. If this Agreement is terminated pursuant to
Article 15.2 and the Company has issued the Purchased Shares to Carnival under
Section 2.3(a) and Carnival has paid to the Company the purchase price under
Section 2.3(b), then Carnival shall surrender to the Company the certificates
representing the Purchased Shares and upon the receipt of such Purchased
Shares, the Company shall repay to Carnival such amount as Carnival paid under
Section 2.3(b) by wire transfer of immediately available funds to such account
as may be designated by Carnival to the Company.
15.4 No Liability. If this Agreement is terminated as provided in
Section 15.2, no party shall have any liability or further obligation to any
other party under this Agreement.
ARTICLE 16
TERMINATION OF JOINT VENTURE AGREEMENT
Each of CG, Carnival and the Company hereby consents to the
termination of the Joint Venture Agreement, dated February 18, 1992 (the "Joint
Venture Agreement"), between CG, Carnival and the Company, which shall,
effective as of the Closing Date, be terminated and of no further force and
without further obligation of any party thereunder.
ARTICLE 17
CONFIDENTIALITY
All information relating to the Company provided to CG and its
affiliates shall be kept confidential and shall not be disclosed to any third
party except (a) as has become generally available to the public (other than
through disclosure by CG or its affiliates in contravention of this Agreement),
(b) to CG's directors, officers, trustees, partners, employees, agents and
professional consultants on a need-to-know basis, (c) to any Person to which CG
offers to sell or transfer any New Shares, provided that the prospective
transferee shall agree to be bound by the provisions of this Article 17, or
(d) in order to comply with any law, rule, regulation or order applicable to CG
or its affiliates.
ARTICLE 18
MISCELLANEOUS
18.1 Survival of Representations, Warranties, Other Agreements and
Undertakings. All of the representations and warranties, as well as those
other agreements and undertakings made herein to be performed after the Closing
Date, shall survive the execution and delivery of this Agreement, any
investigation by or on behalf of the Existing Shareholders or acceptance of the
New Shares.
18.2 Notices. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first-class mail, return receipt requested, telecopier,
courier service, overnight mail or personal delivery:
if to the Company:
3655 N.W. 87th Avenue
Miami, Florida 33178
Telecopier No.: (305) 471-4700
Attention: General Counsel
with a copy to:
Thommessen Krefting Greve Lund
Haakon VII?s gate 10, P.O. Box 1484
0116 Oslo, Norway
Attention: Jorgen Lund
Telecopier No.: (47) 23 11 10 10
if to Carnival, to:
Carnival Corporation
3655 N.W. 87th Avenue
Miami, Florida 33178
Attention: General Counsel
Telecopier No.: (305) 471-4700
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019
Attention: James M. Dubin, Esq.
Telecopier No.: (212) 757-3990
if to CG, to:
CG Holding AS
Smallvollveien 65, P.O. Box 50 Bryn
0611 Oslo, Norway
Attention: Atle Brynestad
Telecopier No.: (47) 22 90 88 99
with a copy to:
Thommessen Krefting Greve Lund AS
Haakon VII's gate 10, P.O. Box 1484
0116 Oslo, Norway
Attention: Jorgen Lund
Telecopier No.: (47) 23 11 10 10
All such notices and communications shall be deemed to have been duly given
when delivered by hand, if personally delivered; when delivered by courier, if
delivered by commercial courier service; five Business Days after being
deposited in the mail, postage prepaid, if mailed by airmail; and when receipt
is mechanically acknowledged, if telecopied.
18.3 Expenses. The Company agrees to reimburse each of Carnival
and CG for all out of pocket expenses incurred by such party in connection with
the transactions contemplated by the Sale & Purchase Agreement, the
Subscription Agreement and this Agreement and the transactions contemplated
thereby and hereby (including without limitation, travel expenses and legal and
accounting fees and expenses).
18.4 Third Party Beneficiaries. Nothing herein expressed or
implied is intended to or shall be construed to confer upon or give any person
or entity, other than the parties hereto, and their respective successors,
permitted assigns and affiliates, any rights or remedies under or by reason of
this Agreement.
18.5 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of the
parties hereto. The Company may not assign any of its rights or obligations
under this Agreement, except to a successor-in-interest to the Company, without
the written consent of the Existing Shareholders and no Existing Shareholder
may assign any of its rights or obligations without the consent of the Company
(except for an assignment pursuant to Section 6.3).
18.6 Amendment and Waiver.
(a) Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by the parties from the terms of any provision of
this Agreement, shall be effective (i) only if it is made or given in writing
and signed by the Company and the Existing Shareholders, and (ii) only in the
specific instance and for the specific purpose for which made or given.
(b) No failure or delay on the part of the parties in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the parties at
law, in equity or otherwise.
18.7 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
18.8 Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
18.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such State.
18.10 Arbitration. (i) After the Closing, any dispute, controversy,
or claim arising out of or relating to any provision of this Agreement or the
interpretation, enforceability, performance, breach, termination, or validity
hereof, including, without limitation, this Section 18.9 shall be solely and
finally settled by arbitration in New York City, the State of New York in
accordance with the Commercial Arbitration Rules and Supplementary Procedures
for International Commercial Arbitration of the American Arbitration
Association as modified by the provisions of this Article. An award rendered
in connection with an arbitration pursuant to this Section 18.9 shall be final
and binding upon the parties, and any judgment upon such an award may be
entered and enforced in any court of competent jurisdiction.
(ii) Proceedings in the arbitration shall be conducted in the
English language, and all documents not in English submitted by either party
must be accompanied by a translation into English.
18.11 Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair
the benefits of the remaining provisions hereof.
18.12 Entire Agreement. This Agreement, together with the schedules
hereto is intended by the parties as a final expression of their agreement and
intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein.
18.13 Further Assurances. Each of the parties shall execute such
documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations or other actions by, or
giving any notices to, or making any filings with, any governmental authority
or any other Person) as may be reasonably required or desirable to carry out or
to perform the provisions of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date first above written.
SEABOURN CRUISE LINE LIMITED
By: /s/ Jorgen Lund
Name: Jorgen Lund
Title: Director
CARNIVAL CORPORATION
By: /s/ Arnaldo Perez
Name: Arnaldo Perez
Title: Vice President
CG HOLDING AS
By: /s/ Jorgen Lund
Name: Jorgen Lund
Title: Attorney-in-fact
Schedule A
Seabourn Cunard Assumed
Base Base Carnival
Shares(1) Shares(2) Share
Issuance
Amount
Carnival(3) 5,880,000 26,304,864 5,326,216
CG 5,880,000 -- --
(1) Approximately 80% of the assumed number of New Shares to be issued
based on assumed purchase price, 1,470,000 New Share are assumed to be the
post-closing adjustment.
(2) Approximately 80% of the assumed number of New Shares to be issued
based on assumed price of $380,440,000 for Cunard and 5,000,000 ?option?
New Shares. Based on the assumed purchase price, 5,326.216 New Shares are
assumed to be the post-closing adjustment.
(3) Does not include 1,500,000 New Shares assumed to be issued to
Carnival in satisfaction of the Seabourn Subordinated Loan.
SEABOURN CRUISE LINE LIMITED
SCHEDULE 2.5 - COMPANY CREDITS AND DEBITS
AS OF FEBRUARY 28, 1998
COMPANY CREDITS
(a) Cash 4,244,271
(b) Trade debtors 64,857
(c) Insurance claims (H&M, P&I, etc.) 431,685
(d) Prepaid marketing/credit card fees 1,047,327
(e) Prepaid insurance/other 1,492,188
(f) Inventories 8,623,790
(g) Miscellaneous debtors 2,212,105
(h) Other prepayments 2,672,918
Total Company Credits: 20,789,141
COMPANY DEBITS
(a) Trade creditors 3,592,945
(b) Bank Credit Line 4,200,226
(c) Other passage money 225,766
(d) Wages and salaries 2,441,858
(e) Accrued expenses 2,861,357
(f) Steiner/Other concessionaires 226,885
(g) Miscellaneous creditors
(h) Customer prepayments 45,139,580
Total Company Debits: 58,688,418
Company Credits less Company Debits: -37,899,275