<PAGE>
Exhibit 2.1
SERVICES AGREEMENT
AMONG
SEA CONTAINERS LTD.,
SEA CONTAINERS SERVICES LTD.
AND
ORIENT-EXPRESS HOTELS LTD.
_________, 2000
<PAGE>
SERVICES AGREEMENT
THIS AGREEMENT is made as of _______, 2000 (the "Agreement") among SEA
CONTAINERS LTD., a Bermuda company ("SCL"), SEA CONTAINERS SERVICES LTD., a
company organized in the United Kingdom ("SC Services") and ORIENT-EXPRESS
HOTELS LTD., a Bermuda company ("OEHL"). Each of the foregoing are sometimes
referred to herein as a "Party" and collectively as the "Parties".
WHEREAS, OEHL wishes to have SC Services and SCL provide certain
administrative and other services to OEHL upon the terms and conditions
hereinafter set forth.
NOW THEREFORE, in consideration of the mutual agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, SC Services, SCL and OEHL hereby agree as follows:
SECTION 1. DEFINITIONS.
1.1 In addition to the terms defined elsewhere herein, unless the context
otherwise requires, the following capitalized terms shall have the following
meanings:
"Affiliate" with respect to any Person, any Person directly or
indirectly controlling, controlled by or under
common control with, such Person;
"Applicable Law" means all applicable provisions of
constitutions, statutes, rules, regulations,
ordinances and orders of all governmental
authorities and all judgments, orders and
decrees of all courts, tribunals and
arbitrators;
"Business Day" any day except Saturday, Sunday or any other
day on which commercial banks in New York, New
York or London, England are authorized or
required by Applicable Law to close;
"Employee Compensation" employee salary, bonus and other compensation and
social costs, including the cost of all
retirement, health and other welfare and benefit
plans maintained on behalf of such employee;
"OEHL Group" OEHL and the Subsidiaries of OEHL as shall exist
from time to time, to the extent the same are
engaged in the hotel and leisure business;
<PAGE>
"Person" an individual, corporation, sole proprietorship,
partnership (whether general or limited), joint
venture, limited liability corporation or
partnership, trust, incorporated or unincorporated
organization, association, institution, party,
entity or governmental instrument, division,
agency, body or department thereof;
"SC Services' Service Cost" the cost to the SC Services Group of providing the
Services, including, without limitation, (i) the
allocable portion of Employee Compensation
incurred by the SC Services Group, (ii) payments
to subcontractors made by the SC Services Group,
and (iii) the allocable portion of the direct and
indirect costs, rent and overhead of the SC
Services Group, calculated on a basis consistent
with past practices;
"SC Services Group" SC Services and its Affiliates; and
"Subsidiaries" With respect to any Person, any other Person
directly or indirectly controlled by the Parent;
"the Services" has the meaning set forth in Section 2.1 hereof
1.2 Where the context permits, the singular includes the plural and vice
versa and one gender includes any gender. Words importing individuals shall be
treated as importing corporations and vice versa and words importing the whole
shall be treated as including a reference to any part thereof.
1.3 References in this Agreement to "Sections" and "Schedules" are to
sections and schedules herein and hereto unless otherwise indicated. Unless
otherwise set forth herein, references in this Agreement to any document,
instrument or agreement (including, without limitation, this Agreement) (i)
shall include all exhibits, schedules and other attachments thereto, (ii) shall
include all documents, instruments or agreements issued or executed in
replacement thereof and (iii) shall mean such document, instrument or agreement,
or replacement or predecessor thereto, as amended, modified or supplemented from
time to time in accordance with its terms and in effect at any given time.
1.4 Section headings are inserted in this Agreement for convenience only
and shall not affect the construction thereof in any way.
SECTION 2. APPOINTMENT.
2.1 SC Services shall provide to the OEHL Group the services described in
Sections 3.1 and 3.2 hereof (collectively, the "Services").
-2-
<PAGE>
2.2 SC Services may subcontract with any person or company of appropriate
skill, experience and expertise, including any member of the SC Services Group,
for any Services to be performed hereunder, but SC Services shall in such event
remain primarily responsible to the OEHL Group for the performance of such
Services.
2.3 Notwithstanding the foregoing Section 2.2, SC Services may assign its
rights and obligations with respect to Services to be rendered outside the
United Kingdom to one or more of its Affiliates, in which event such Affiliate
shall be responsible for the performance of such Services, and SC Services shall
undertake to cause such Affiliate to perform such Services.
2.4 SC Services hereby agrees to perform the Services, and direct the
members of the SC Services Group who perform the Services, to perform such
Services as set forth herein with not less than such degree of care as it has
historically provided similar services to the Affiliates of SCL engaged in the
hotel and leisure business.
SECTION 3. SHARED EMPLOYEES; OFFICE SPACE.
3.1 SC Services shall make available to the OEHL Group its corporate
executive offices, internal Legal and Funding departments and its public
relations office and publishing office ("Corporate Services"). OEHL shall pay to
SC Services an aggregate annual sum of $2,500,000 for such Corporate Services,
such amount to be payable in 12 equal monthly installments on the last Business
Day of each month, which sum shall be reviewed annually for indexation and
adjustment in the discretion of the Boards of Directors of SCL and OEHL.
3.2 SC Services shall make available to the OEHL Group the services of
its Systems and Computer Services Division, Finance, Administration and Property
Division, Personnel Department and Insurance Department to provide system and
computer services, finance services (including accounting services), office
administration services, public company services, human resource services and
insurance services (collectively, the "Administration Services"), in
consideration of an allocable portion of SC Services' Service Costs of providing
such Administration Services. SC Services shall render invoices to OEHL for such
Administration Services, together with such support for such allocation as OEHL
may reasonably request. The current allocation and method of allocating such
costs are described in Schedule 3.2. OEHL shall have the right to audit SC
Services' books and records in connection with the allocation. Regardless of the
member of the OEHL Group for which Administration Services are provided
hereunder, OEHL shall remain ultimately responsible to SC Services for payment
for Services rendered pursuant to this Section.
3.3 SC Services will make available for use by employees of the OEHL
Group office space in Sea Containers House, 20 Upper Ground, London SE1 9PF,
England, and office space in such other facilities of members of the SC Services
Group as shall be reasonably requested by OEHL, and reasonably accommodated by
the SC Services Group, for which OEHL will reimburse SC Services (or such member
of the SC Services Group) for a proportionate amount of its office lease and
overhead.
-3-
<PAGE>
3.4 With respect to the payments due under Sections 3.2 and 3.3, SC
Services shall submit monthly invoices to OEHL. OEHL shall remit payment to SC
Services, or to such member of the SC Services Group as SC Services may direct
in writing, of all amounts invoiced by SC Services or any member of the SC
Services Group within 30 days of OEHL's receipt of such invoice (each, a
"Payment Date").
3.5 Where and to the extent permissible, and at the OEHL Group's
allocable cost, SCL shall permit each employee of the OEHL Group to continue to
participate in the U.K. and U.S. pension plans of SCL and its Subsidiaries (the
"SCL Pension Plans") at the same rate and benefit level in effect for such
Employee immediately prior to the date hereof. With respect to any employees of
the OEHL Group hired subsequent to the date hereof, such employees shall be
permitted to participate in the SCL Pension Plans at such rate and benefit level
as is offered from time to time to new employees of SCL and its Subsidiaries in
comparable positions.
3.6 At the OEHL Group's allocable cost, SCL shall permit each employee of
the OEHL Group to participate in the life, accident, casualty and health
insurance policies maintained for employees of SCL and its Subsidiaries,
providing for coverage and benefit levels for such employees of the OEHL Group
as provided for employees of SCL and its Subsidiaries of comparable seniority,
salary and position.
3.7 At the OEHL Group's allocable cost, SCL shall permit each member of
the OEHL Group to participate in the global liability and property insurance
policies maintained by SCL for itself and its subsidiaries.
3.8 On a monthly basis, SCL will charge to OEHL the allocable cost of the
services provided to the OEHL Group and its employees pursuant to Sections 3.5,
3.6 and 3.7 above, which amount shall be paid by OEHL within 30 days of OEHL's
receipt of such invoice, provided however that, to the extent reasonably
requested by OEHL, SCL shall provide OEHL with reasonable support for amounts
allocated to the OEHL Group.
SECTION 4. INDEMNITY.
4.1 OEHL undertakes at all times hereafter to keep SC Services, SCL and
the members of the SC Services Group, and their directors, officers and
employees indemnified against all actions, proceedings, claims, demands or
liabilities whatsoever which may be brought, commenced or prosecuted against or
incurred by any such Party and also against all costs, damages and expenses
which any such Party may pay or incur in defending or settling the same or
otherwise in consequence of such Party's acting within the terms of this
Agreement and in respect of any matters or things in relation to the services
provided hereunder which such Party has carried out under proper authority, and
without gross negligence on the part of such Party or breach of this Agreement
by such Party.
-4-
<PAGE>
4.2 SC Services agrees to indemnify and keep indemnified the OEHL Group
from and against any loss, cost (including cost of enforcement), liability,
claim or damage which the OEHL Group incurs or suffers as any consequence of any
breach by SC Services or SCL of this Agreement or any gross negligence or wilful
misconduct on the part of SC Services, SCL (or any Affiliate of SC Services or
SCL) in the performance of any of the obligations under this Agreement.
SECTION 5. TERM AND TERMINATION OF THIS AGREEMENT.
5.1 This Agreement shall commence on the date hereof and shall continue
in force and effect from that date and thereafter until the first anniversary of
the date hereof, and shall be automatically renewed for additional one year
periods unless earlier terminated pursuant to the provisions of this Section.
5.2 This Agreement may be terminated:
(a) by any Party hereto upon one year's prior written notice
delivered to the other Parties hereto; or
(b) by the non-defaulting Party (a "Non-Defaulting Party")
upon a default or breach by the other Parties, which default or breach
shall remain uncured for a period of 30 days following delivery of
written notice of such default or breach, provided that if such default
can be cured by such Party within a reasonable time and such Party is
diligently pursuing such cure, the Non-Defaulting Party shall not
exercise its rights as set forth in this Section 5.2 so long as the
Non-Defaulting Party is not materially disadvantaged during such cure
period and provided that in no event shall the period be extended more
than 180 days after the written notice described above is received by
the other Party and, PROVIDED, FURTHER, that the Services to be
performed hereunder may, at the election of the Non-Defaulting Party,
continue to be provided by SC Services for a period of not more than
365 days, on the same terms and at the same rates as are in effect at
the time of expiration of such cure period; or
(c) at any time, upon the written consent of all Parties.
5.3 The termination of this Agreement shall not affect any rights or
obligations of the parties which have accrued or arisen prior to the effective
time of such termination.
SECTION 6. NO WAIVER.
6.1 No failure to exercise and no delay in exercising on the part of any
Party any right, power or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, power or privilege
preclude any other or further exercise thereof.
6.2 In the event that any Party shall expressly waive any breach, default
or omission hereunder, no such waiver shall apply to, or operate as, a waiver of
similar breaches, defaults or omissions or be deemed a waiver of any other
breach, default or omission hereunder.
-5-
<PAGE>
6.3 The rights and remedies of each of the Parties in connection herewith
are cumulative and are not exclusive of any rights or remedies provided by law
or equity.
SECTION 7. NOTICES.
7.1 Any notice, consent, invoice, approval or payment required or
permitted to be given or sent hereunder must be in writing and delivered
personally or by mail (registered or certified, return receipt requested),
Federal Express or equivalent courier service, or given by facsimile or
telecopy. All notices sent in accordance with this Section shall be effective
only if and when received by the Party to be notified. For purposes of notice,
the address of the Parties shall be as set forth below or as may be designated
in writing from time to time:
(a) If to SCL or SC Services, to:
Sea Containers Services Ltd.
20 Upper Ground
London SE1 9PF
England
Attention: Mr. Daniel J. O'Sullivan and
Edwin S. Hetherington, Esq.
Telecopier: 0207-805-5908
(b) If to OEHL, to:
Orient-Express Hotels Ltd.
20 Upper Ground
London SE1 9PF
England
Attention: Mr. Simon M.C. Sherwood and
Edwin S. Hetherington, Esq.
Telecopier: 0207-805-5908
SECTION 8. MISCELLANEOUS.
8.1 Each of the Parties shall do, execute and take all necessary and
reasonable actions, and perform all such documents, acts and things as may be
reasonably within its power to give effect to the provisions of this Agreement
and to procure that such provisions are observed and performed.
8.2 This Agreement may be amended, modified or supplemented only by a
written instrument executed by an authorized signatory of each of the Parties
hereto. Any modification or variation of this Agreement other than in accordance
with this Section shall be null and void.
-6-
<PAGE>
8.3 This Agreement may not be assigned in whole or in part by any Party
hereto without the prior written consent of the other Parties. Any attempted or
purported assignment by any party other than in accordance with this Section
shall be null and void.
8.4 This Agreement may be executed in any number of counterparts, and by
any Party on separate counterparts, each of which as so executed and delivered
shall be deemed an original but all of which together shall constitute one and
the same instrument, and it shall not be necessary in making proof of this
Agreement as to any Party hereto to produce or account for more than one such
counterpart executed and delivered by such Party.
8.5 The respective restrictions on the Parties herein contained are
considered reasonable by the parties but, if any such restriction shall be found
void but would be valid if some part thereof were deleted or the period or area
of application reduced, such restriction shall apply with such modification as
may be necessary to make it valid and effective.
8.6 In the event of any clause contained in this Agreement or any part
thereof being declared invalid or unenforceable, all other clauses or parts
thereof contained in this Agreement shall remain in full force and effect and
shall not be affected thereby.
8.7 This Agreement, including the Schedules and Exhibits referred to
herein, embodies the entire agreement and understanding of the Parties in
respect of the subject matter contemplated hereby, supersedes all prior
agreements and understandings among the Parties with respect thereto and there
are no promises, terms, conditions or obligations, oral or written, expressed or
implied, other than contained herein.
SECTION 9. PROPER LAW AND JURISDICTION.
9.1 This Agreement shall be governed by and construed in accordance with
the internal substantive laws of the Island of Bermuda.
9.2 If any Party shall have the right to seek recourse to a court with
respect to any dispute arising out of or related to this Agreement or the
transactions contained in or contemplated by this Agreement, whether in tort or
contract or at law or in equity, then any action or proceeding in respect of any
such dispute shall be brought exclusively in the Courts of the Island of
Bermuda.
************************
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-7-
<PAGE>
IN WITNESS WHEREOF this Agreement has been executed by duly authorized
signatories of each of the Parties hereto as of the day and year first above
written.
SEA CONTAINERS LTD.
By:
-----------------------------
Name:
Title:
SEA CONTAINERS SERVICES LTD.
By:
-----------------------------
Name:
Title:
ORIENT-EXPRESS HOTELS LTD.
By:
-----------------------------
Name:
Title:
-8-
<PAGE>
SCHEDULE 3.2
CURRENT ALLOCATION
AND METHOD OF
ALLOCATION OF COSTS
The current allocation of costs to SCL's Leisure Division is:
<TABLE>
<CAPTION>
2000 SCL/OEHL
1999 ALLOCATION NUMBER OF STAFF
ALLOCATION BUDGET ACTUAL BUDGET % ALLOCATION
($000) ($000) 1999 2000 1999 2000
<S> <C> <C> <C> <C> <C> <C>
INSURANCE SERVICES 89 76 4 4 21 16
ACCOUNTING SERVICES 329 297 30 30 14 13
INFORMATION
TECHNOLOGY 295 208 63 66 2 1
HUMAN RESOURCES 164 197 10 9 11 15
PROPERTY &
ADMINISTRATION ---- ---- ---- ---- ---- ----
SC HOUSE 1730 1816 23 23 14 15
REGIONAL OFFICES 466 424 14 14 17 16
------ -----
TOTAL 3073 3018
===== ====
</TABLE>
Allocation Methodology is:
Office space - according to area occupied
Computer - according to usage
Communications - according to usage
T&E - according to usage
Personnel - Either direct if 100% occupied on hotel and
leisure business or part according to
volumes
