Exhibit 99.2
[LETTERHEAD OF STAR CRUISES PLC]
February 2, 2000
Carnival Corporation
0000 XX 00xx Xxxxxx
Xxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxx
Dear Xx. Xxxxxx:
This letter sets forth our agreement with respect to the
purchase by Carnival Corporation, a corporation organized under the laws of the
Republic of Panama ("Carnival"), of a portion of the equity of Arrasas Limited,
a company incorporated and registered under the laws of the Isle of Man
("Arrasas") and a wholly owned subsidiary of Star Cruises PLC, a company
incorporated and registered under the laws of the Isle of Man ("Star Cruises").
1. Carnival will purchase ordinary shares representing forty
percent (40%) of the fully diluted common equity of Arrasas.
Arrasas has made a mandatory offer to purchase ordinary shares
of NCL Holding ASA ("NCL"). After completion of the mandatory
offer, Arrasas will hold all of the securities of NCL held or
owned, directly or indirectly, by Star Cruises, its affiliates
or related parties.
2. The purchase price for such ordinary shares of Arrasas
purchased by Carnival will be an amount in cash equal to forty
percent (40%) of (i) the total price paid for all ordinary
shares of NCL held or acquired on or after the date hereof by
Xxxxxxx (but not to exceed 35 Norwegian kroner ("NOK") per
share, unless otherwise agreed by the parties hereto) plus
(ii) all reasonable costs (including holding costs) of Arrasas
incurred in connection with the acquisition of such shares.
Arrasas will be entirely capitalized with equity capital
contributions (consisting of ordinary shares) and free of
indebtedness or similar liabilities of any kind, other than
the loans referred to in the remainder of this paragraph.
Carnival agrees to make a loan to Arrasas in the amount being
its pro rata portion of the purchase price for the NCL shares
purchased by Arrasas to be funded no later than the settlement
date for the mandatory offer being made by Arrasas with
respect to NCL. Such loan shall bear no interest and shall
mature on the earlier to occur of the date of termination of
this agreement or the closing date of the purchase of ordinary
shares of Arrasas by Carnival referred to in paragraph 1
hereof.
The loan shall be guaranteed as to payment by Star Cruises.
Star Cruises will either also make an interest free loan to
Arrasas or a contribution to capital of Arrasas in an amount
equal to its pro rata portion of the purchase price for the
NCL shares purchased by Arrasas.
3. Star Cruises will manage and control the business, operations
and affairs of Arrasas and NCL, and Carnival would have no
approval or blocking rights in that regard (other than as set
forth below and as provided under applicable law). Carnival
will also be entitled to:
(a) all information delivered to directors of
Arrasas or to directors of Star concerning
NCL or Arrasas;
(b) receive dividends as from time to time
determined by the Board of Arrasas;
(c) preemptive rights to acquire any equity
securities, securities convertible into or
exercisable or exchangeable for equity
securities or any similar securities issued
by Arrasas, NCL or their subsidiaries in
order to avoid diluting its 40% voting and
economic interest (other than through the
issuance of employee stock options in the
ordinary course of business); provided that
in no event shall Carnival's voting and
economic ownership or interest be reduced to
35% or below, unless as a result of
Carnival's failure to exercise its
preemptive rights. In furtherance of this
protection, Xxxx agrees not to permit
Arrasas, NCL or their subsidiaries to issue
any securities that would dilute Carnival's
ownership interest in contravention of the
preceding sentence;
(d) two board observers with the same rights and
privileges as directors (except for voting
rights);
(e) approval rights over any affiliate
transaction (or series of related
transactions) between Arrasas, NCL and/or
its subsidiaries on one hand and Star and/or
its other affiliates on the other hand to
the extent that consideration involved in
such transaction or transactions exceeds $3
million;
(f) approval rights over the sale (or other
transfer) or purchase (or other acquisition)
of any material assets or business by
Arrasas, NCL or their subsidiaries (other
than in the ordinary course of business);
(g) approval rights over any capital
expenditures (other than new ship builds) in
one transaction (or a series of related
transactions) in excess of $50 million;
(h) approval rights over Arrasas, NCL or any of
their subsidiaries going into any business
(other than the cruise business) or
utilizing any ship brand not in use today;
and
(i) approval rights (not to be unreasonably
withheld) over ordering more than one new
ship build per fiscal year for the next five
fiscal years.
4. Neither party hereto shall dispose of or otherwise transfer
any shares of Arrasas, except to a majority-owned affiliate,
without the prior written consent of the other party.
5. Carnival shall be entitled at any time upon sixty days notice
to sell all shares of Arrasas held by it to Star by making a
written offer to Star. The sale price of such shares shall be
the fair market of such shares determined by an
internationally recognized investment bank mutually agreeable
to Star Cruises and Carnival. If after ten (10) days, Star
Cruises and Carnival are unable to agree on an investment
bank, each of them shall within five (5) days designate an
internationally recognized investment bank and such two
investment banks shall designate a third internationally
recognized investment bank to determine the fair market value
of such shares. The costs of such investment banks shall be
split by the parties.
6. Star Cruises will market NCL as a separate brand but of course
our intention would be for NCL to work closely with Carnival
in order to maximize economies of scale and minimize operating
costs.
7. The transaction envisaged above would be subject only to the
obtaining of all such regulatory (including anti-trust and
applicable stock exchange) and other approvals and consents as
may be necessary for Carnival and Star Cruises to complete the
transaction (including the expiration of any applicable
waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended), such approvals and
consents to be on terms which are reasonably satisfactory to
both sides.
8. Star Cruises and Carnival will agree to work with each other
in good faith with a view to finalizing additional legal
documentation and obtaining all approvals and consents as soon
as possible and to use all best endeavors (on a commercially
reasonable basis) to obtain all approvals no later than June
30, 2000; provided if such approvals are not obtained by
December 31, 2000, either party may terminate this agreement
by written notice to the other. If at any time Carnival shall
determine that it will be unable to obtain regulatory
approvals applicable to it, Carnival may terminate this
agreement by written notice to Star Cruises.
9. The parties agree that this is a valid and binding agreement
and shall be governed by and construed in accordance with
English law.
10. To the extent that the parties cannot agree on additional
legal documentation by June 30, 2000, then this agreement
shall continue in full force and effect and become the full
legal documentation for the transaction setting forth all the
rights and obligations of the parties hereunder. Any dispute
arising under or by virtue of this agreement or any difference
of opinion between the parties hereto concerning their rights
and obligations under this agreement, shall be referred to
arbitration in London of a single arbitrator to be appointed
by agreement between the parties or, in default of such, of
two arbitrators, one to be appointed by each party, and an
umpire to be appointed by both arbitrators, and such reference
to arbitration shall be submission to arbitration in
accordance with the Arbitration Act 1996 or to any re-
enactment or statutory modification thereof for the time being
in force. The decision so rendered by the Arbitration Tribunal
shall be final and binding on both parties and it is hereby
agreed in accordance with the Arbitration Act 1996 that the
right to appeal by either party to the High Court under
Sections 45 and 69 of the Act shall be excluded in relation to
any award or decision of the appointed arbitrator or
arbitrators and that neither party shall have the right to
apply to the High Court for the determination of any question
of law arising in the course of the reference to arbitration.
We understand that the only shares of NCL that Carnival owns are the
10,000 shares Carnival purchased before it made its voluntary bid for NCL last
December at a cost no higher than NOK 35 per NCL share and that Carnival will
not acquire any further shares in NCL.
If you have any questions, please call me.
Best regards,
Star Cruises PLC
By: /s/ Xxx Xxx Xxxx
------------------------
Name: Xxx Xxx Xxxx
Title: Chairman
Agreed and Accepted:
Carnival Corporation
By: /s/ Xxxxx Xxxxxx
-------------------------
Name: Xxxxx Xxxxxx
Title: Chairman
