SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT - JANUARY 28, 2000
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(Date of Earliest Event Reported)
COMMODORE HOLDINGS LIMITED
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(Exact name of registrant as specified in its charter)
BERMUDA
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(State of Incorporation)
0-22908 N/A
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(Commission File No.) (I.R.S. Employer
Identification No.)
4000 HOLLYWOOD BOULEVARD, SUITE 385-S, SOUTH TOWER, HOLLYWOOD, FLORIDA 33021
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(Address of Principal Executive Offices) (Zip Code)
(954) 967-2100
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(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On January 28, 2000, Crown Cruises of Panama, Inc., a wholly owned
subsidiary of Commodore Holdings Limited (the "Company"), purchased the
916-passenger cruise ship Crown Dynasty (the "Vessel") from Crown Dynasty, Inc.,
a Panamanian corporation (the "Seller"), for $86.2 million. Prior to such
purchase, the Company operated the Vessel pursuant to a bareboat charter with
the Seller. The Seller granted the Company an option to purchase the Vessel as
part of the charter. In connection with the Company's exercise of its option to
purchase the Vessel, the parties agreed to apply the $4.5 million security
deposit under the charter to the purchase price for the Vessel. The purchase
price in such option was determined through arm's length negotiations between
the Company and the Seller.
The Company financed its purchase of the Vessel through loans in the
aggregate principal amount of $51,720,000 from Merita Bank Plc, Christiana Bank
og Kreditkasse ASA, and Skandinaviska Enskilda Banken AB (publ), and through a
loan in the principal amount of $24,480,000 provided by EFF-Shipping Limited, an
affiliate of the Seller. Such loans are guaranteed by the Company and secured by
mortgages on the Vessel and certain other collateral related to the Vessel. The
Company also used the proceeds from the issuance of 10% convertible subordinated
debentures in the principal amount of $5 million dollars and 10% Series B
Convertible Preferred Stock with a face value of $5 million dollars to finance
the balance of the purchase price. The debentures and preferred stock are
convertible into Common Stock beginning twelve months after issuance at $4.0625
per share. Sales of the underlying Common Stock are restricted to not more than
25% of the Common Stock per quarter, which amount increases if the Company
demands conversion, which it may do in certain cases. The Company also redeemed
$4 million of Series B Convertible Preferred Stock at face value in connection
with the new issuances. The net proceeds from these financings, after redemption
of the $4 million of Series B Convertible Preferred Stock, was approximately
$81,131,000. The Company obtained the balance of the purchase price for the
Vessel from cash from its operations.
The Seller of the Vessel is an affiliate of EffJohn International,
B.V., the company from whom the Company acquired the Commodore Cruise Line
assets in 1995. The Seller operated the Vessel as a cruise ship between 1993,
when the Vessel was built, and 1995. The Seller then chartered the Vessel to
others for use as a cruise ship. Upon taking delivery of the Vessel pursuant to
the charter, the Company renovated and launched the Vessel as the first ship
operating under its premium Crown Cruise Line brand.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
1. Addendum No. 1 dated October 7, 1999, to Bareboat Charterparty dated
March 1, 1999 between Crown Cruises Limited and Crown Dynasty, Inc., as further
amended by Addendum No. 2 dated October 13, 1999 and Addendum No. 3 dated
January 24, 2000, and the Memorandum of Agreement, which is an exhibit thereto.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: February 9, 2000
COMMODORE HOLDINGS LIMITED
By: /S/ JEFFREY I. BINDER
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Jeffrey I. Binder, Chairman of the Board
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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1 Addendum No. 1 dated October 7, 1999, to
Bareboat Charterparty dated March 1, 1999 between
Crown Cruises Limited and Crown Dynasty, Inc., as further amended
by Addendum No. 2 dated October 13, 1999 and Addendum No. 3
dated January 24, 2000, and the Memorandum of Agreement,
which is an exhibit thereto.
EXHIBIT 1
ADDENDUM NO. 1
to
BAREBOAT CHARTERPARTY (the "Charterparty")
dated 1.3.1999 between
CROWN CRUISES LTD. (as the "Charterer")
and
CROWN DYNASTY INC. (as the "Owner")
concerning
NORWEGIAN DYNASTY (call sign JFJX3) (the "Vessel")
WHEREAS:
(A) The parties have agreed in Clause 47 of the Charterparty that the
payment of Charter Hire and all other amounts due under the
Charterparty shall be secured by i.a. a second mortgage in the vessel
Enchanted Isle;
(B) The Charterer wishes, as a temporary arrangement instead of providing
the mortgage, to make a deposit of 4,5 MUSD in a joint account as
security for its obligations under the Charterparty and the Owner is
willing to accept such deposit as security instead of the second
mortgage in Enchanted Isle;
(C) The Parties have opened a joint deposit account with Merita Bank Plc,
London with account no. 11364001 (the "Joint Account") and with this
Addendum wishes to agree upon the terms applying to the use of the
funds on the Joint Account.
NOW THEREFORE, it is hereby agreed as follows:
1. The Charterer undertakes to make a deposit of USD
1,500,000 (the "Deposit") to the Joint Account in
good time prior to the delivery of the Vessel to the
Charterer under the Charterparty. All interest
accruing on the Deposit shall be for the account of
the Charterer.
2. The Joint Account and the Deposit shall secure the
due fulfillment by the Charterer of all its
obligations towards the Owner under the Charterparty
and under the Memorandum of Agreement attached
thereto. Should the Charterer use its option to
purchase the Vessel the Deposit shall be applied
<PAGE>
as part payment of the Purchase Price for the Vessel
and be released to the Owner (Seller) at closing of
the sale and purchase.
3. The Deposit or part thereof may be released only upon
the joint authorization and signature of the Charter
and the Owner given to Merita Bank Plc. Any fees
charged by Merita Bank Plc in connection with the
Joint Account including opening the Joint Account,
holding the Deposit, transferring funds in accordance
with joint instructions and closing the Joint Account
shall be borne by the Charterer.
4. If the envisaged sale of the Vessel to the Charterer
is not completed by 31st October 1999, the Charterer
may at its option, and shall if so requested by the
Owner, substitute the Deposit by a surety bond to be
executed and delivered by the Charterer and Amwest
Surety Insurance Company in all material respects on
the terms of the attached Exhibit A hereto or by such
other security as the Owner finds acceptable.
All other terms and conditions of the Charterparty and the Memorandum of
Agreement shall remain unamended and in full force and effect.
Helsinki/Hollywood October 7, 1999
For the Owners For the Charterer
CROWN DYNASTY INC. CROWN CRUISES LTD.
By: /s/ Thomas Forss By:/s/ Frederick Mayer
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Thomas Forss
Director
<PAGE>
ADDENDUM NO. 2
to
BAREBOAT CHATERPARTY (the "Charterparty")
dated 1, 3, 1999
CROWN CRUISES Ltd. (as the "Charterers")
and
CROWN DYNASTY INC. (as the "Owners")
concerning
NORWEGIAN DYNASTY (Call Sign 3FJX3)
WHEREAS the Charterers wish to use their purchase opinion under clause
53 of the Charterparty and
WHEREAS the Charterers and the Owners have agreed to effect such sale
and purchase on terms agreed in the Charterparty and the Memorandum of Agreement
enclosed thereto and as amended here in this Addendum;
NOW THEREFORE the Parties have agreed on the following amendments to
the Charterparty and to the Memorandum of Agreement enclosed thereto:
1. The Charterer hereby declares that it will use its option to purchase
the Vessel as per Clause 53 (Purchase Option) of the Charterparty and
the Parties have agreed that the Vessel shall be sold and delivered on
October 29, 1999 (the "Closing") (or on such later date as the parties
shall mutually agree). Until such sale and delivery, the Vessel shall
remain on charter on the terms and conditions of the Charterparty.
2. As security for the correct fulfillment of all its obligations under
the Charterparty including the MOA, the Charterers have paid a cash
deposit of USD 4,500,000 into a joint account No. 11364001 with Merita
Bank Plc, London Branch. If the Charterer fails to purchase the Vessel
under the Purchase Option, the deposit shall together with interest
earned be released to the Owners as compensation for such failure at
the expiry of the charter.
3. The purchase price shall be USD 86,200,000 and be paid to the Owners
on Closing as follows:
<PAGE>
a) USD 4,500,000 will be paid from the deposit by
releasing it from the joint account with joint
written instructions from the Owners and the
Charterers;
b) USD 51,720,000 in cash from the Charterers who will
raise said amount under two financial facilities to
be granted by Merita Bank Plc, Christiania Bank og
Kreditkasse ASA and Skandinaviska Enskilda Banken AB
(publ) on terms laid down in their offer dated 23
September 1999;
c) USD 24,480,000 by a Seller's credit granted by the
Owner on terms laid down in a separate agreed and
signed term sheet;
d) the balance of USD 5,500,000 in cash from the
Charterers.
The parties agree that the adjustment of the purchase
price agreed upon in Clause 53 (Purchase Option) of
the Charterparty shall be made at Closing by a
corresponding adjustment of the charterhire payable
for the period up to the Closing.
4. The sale and purchase of the Vessel as per the MOA and this Addendum
shall be completed once the documentation for the financing under 3 b)
and c) above has been finalized on terms acceptable to the lenders.
Failing that the Vessel shall remain on charter in accordance with the
terms of the Charterparty (as amended) which shall remain in full force
and effect.
5. Each party shall at all times bear their own fees and expenses incurred
in negotiating and concluding the transactions contemplated in this
Addendum. The Charterers shall, however, pay all fees and expenses as
agreed between the parties for the loan and security documentation.
All other terms of the Charterparty, including the confidentiality clause, and
the Memorandum of Agreement shall remain unamended.
Helsinki/Hollywood October 13, 1999
For the Owners For the Charterers
CROWN DYNASTY INC. CROWN CRUISES LTD.
By: /s/ ILLEGIBLE /s/ Frederick Mayer
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<PAGE>
ADDENDUM NO. 3
to
BAREBOAT CHARTERPARTY (the "Charterparty")
dated 1.3.1999 between
CROWN CRUISES LTD (as the "Charterer")
and
CROWN DYNASTY INC. (as the "Owner")
concerning
CROWN DYNASTY (ex-Norwegian Dynasty) (call sign 3FJX3) (the "Vessel")
WHEREAS:
(A) The Charterer by Addendum No 2 dated October 13, 1999 to the
Charterparty has declared its option to purchase the Vessel and the
Owner has agreed to grant the purchaser a seller's credit in the amount
of USD 24,480,000 (the "Loan");
(B) The Charterer wishes to nominate Crown Cruises of Panama Inc. (the
"Purchaser") as purchaser of the Vessel; and
(C) It has been decided within the Neptun Maritime-group that instead of a
seller's credit a loan in the amount of USD 24,480,000 (the "Loan")
shall be granted to the Purchaser by another group company EFF-Shipping
Limited (the "Lender").
NOW THEREFORE it is hereby agreed as follows:
1. The Charterer hereby nominates Crown Cruises of Panama Inc. (the
"Purchaser") as purchaser of the Vessel and the Owner confirms its
acceptance thereof.
2. The Loan shall be granted by the Lender to the Purchaser who shall use
the Loan for immediate payment to the Owner of part of the purchase
price for the Vessel. The Owner undertakes to procure the funding by
assigning to the Lender its right to receive immediate payment of a
corresponding amount of the purchase price from the Purchaser.
3. The Parties agree that Clause 3 of Addendum 2 to the Charterparty shall
as a consequence of the above changes be amended accordingly and the
clause shall read as follows:
<PAGE>
The purchase price shall be USD 86,200,000 and be paid to the Owner on
Closing as follows:
(a) USD 4,500,000 will be paid from the deposit by
releasing it from the joint account with joint
written instructions from the Owner and the
Charterers;
(b) USD 51,720,000 in cash from the Purchaser who will
raise said amount under the two financial facilities
to be granted by Merita Bank Plc, Christiania Bank og
Kreditkasse ASA and Skandinaviska Enskilda Banken AB
(publ) on terms laid down in their offer dated 23
September 1999;
(c) USD 24,480,000 from the Purchaser who will raise said
amount under the Loan granted by EFF-Shipping
Limited;
(d) the balance of USD 5,500,000 in cash from the
Purchaser.
The parties agree that the adjustment of the purchase price
agreed upon in Clause 53 (Purchase Option) of the Charterparty
shall be made at Closing by a corresponding adjustment of the
charterhire payable for the period up to Closing.
4. The Vessel shall be sold and delivered on January 28, 2000 or as soon
as possible thereafter on a date mutually agreed upon between the Owner
and the Purchaser.
All other terms of the Charterparty and Memorandum of Agreement attached thereto
as amended by Addendum No 1 dated October 7, 1999, Addendum No 2 dated October
13 and this Addendum No 3 shall remain unamended and in full force and effect.
London 24th January 2000
For the Owners For the Charterer
CROWN DYNASTY INC. CROWN CRUISES LTD.
//S// PER ARVID SKULT //S// JEFFREY I. BINDER
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<PAGE>
We hereby in our respective capacities as Purchaser and as Lender confirm our
acceptance to the above.
Dated 24th January 2000
For the Purchaser For the Lender
CROWN CRUISES OF PANAMA INC. EFF-SHIPPING LIMITED
//S// JEFFREY I. BINDER //S// ILLEGIBLE
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<PAGE>
MEMORANDUM OF AGREEMENT
Dated: Helsinki,...1999
CROWN DYNASTIC INC. hereinafter called the Sellers, have agreed to sell, and
______________________________ hereinafter called the Buyers, have agreed to buy
Name: M/V CROWN DYNASTY (presently trading under name Norwegian Dynasty)
Classification Society/Class: DNV, +1A1 Passenger Ship NAUT-B EO
Built: 1993 By: Union Naval de Levante S.A., Spain
Flag: Panama Place of Registration: Panama
Call Sign: 3FJX3 Grt/Nrt: 19,089
Register Number: 20933-B
hereinafter called the Vessel, on the following terms and conditions:
DEFINITIONS
"Banking days" are days on which banks are open both in the country of the
currency stipulated for the Purchase Price in Clause 1 and in the place of
closing stipulated in Clause 8.
"In writing" or "written" means a letter handed over from the Sellers to the
Buyers or vice versa, a registered letter, telex, telefax or other modern form
of written communication.
"Classification Society" or "Class" means the Society referred to in line 4.
1. PURCHASE PRICE as agreed in the Bareboat Charterparty
2. DEPOSIT [intentionally deleted]
3. PAYMENT
The said Purchase Price shall be paid in full free of bank charges to the
Sellers' account to be nominated before delivery on delivery of the Vessel.
<PAGE>
4. INSPECTIONS (SEE CLAUSE 19.)
(a) The Vessel has been under bareboat charter to the Buyers, who accepted
the Vessel's classification records.
(b) [intentionally deleted]
5. NOTICE, TIME AND PLACE OF DELIVERY
(a) [intentionally deleted]
(b) The Vessel shall be delivered and taken over safely
afloat at a safe and accessible berth or anchorage
at/in wherever the Vessel is at the time of the
agreed delivery date, strictly on a "where is as is"
basis.
(c) [intentionally deleted]
(d) Should the Vessel become an actual, constructive or
compromised total loss before delivery this Agreement
shall be null and void.
6. DRYDOCKING/DIVERS INSPECTION
(a) [intentionally deleted]
(b) The Vessel is to be delivered without drydocking
"where is as is."
7. SPARES/BUNKERS, ETC.
The Sellers shall deliver the Vessel to the Buyers with everything belonging to
her on board and on shore, including, without limitation, all furniture,
fixtures, casino equipment, hotel equipment, linens, cutlery, towels and other
related items aboard the Vessel at the commencement of the Charter (and
additional items brought on board the Vessel during the Charter) except such
equipment as shall be the subject of an equipment lease at the time of the
commencement of the Charter. All spare parts and spare equipment including spare
tail-end shaft(s) and/or spare propeller(s)/propeller blade(s) which are taken
out of spare and used as replacement prior to delivery, but the replaced items
shall be the property of the Buyers. The radio installation and navigational
equipment shall be included in the sale without extra payment if they are the
property of the Sellers. Unused stores and provisions shall be included in the
sale and be taken over by the Buyers without extra payment.
Library, forms, etc., exclusively for use in the Sellers' vessel(s), shall be
excluded without compensation. Captain's Officers' and Crew's personal
belongings including the slop chest are to be excluded from the sale, as well as
the following additional items (including items on hire):
8. DOCUMENTATION
The place of closing: Helsinki
<PAGE>
In exchange for payment of the Purchase Price and all and any amount, whatsoever
outstanding under the bareboat charterparty the Sellers shall furnish the Buyers
with delivery documents, namely:
(a) Legal Bill of Sale in a form recordable in
_______________ (the country in which the Buyers are
to register the Vessel), warranting that the Vessel
is free from all encumbrances, mortgages and maritime
liens or any other debts or claims whatsoever, duly
notarially attested and legalized by the consul of
such country or other competent authority.
(b) Current Certificate of Ownership issued by the
competent authorities of the flag state of the
Vessel.
(c) [intentionally left blank]
(d) Current Certificate issued by the competent
authorities stating that the Vessel is free from
registered encumbrances.
(e) Certificate of Deletion of the Vessel from the
Vessel's registry or other official evidence of
deletion appropriate to the Vessel's registry at the
time of delivery, or, in the event that the registry
does not as a matter of practice issue such
documentation immediately, a written undertaking by
the Sellers to effect deletion from the Vessel's
registry forthwith and furnish a Certificate or other
official evidence of deletion to the Buyers promptly
and latest within 4 (four) weeks after the Purchase
Price has been paid and the Vessel has been
delivered.
(f) Any such additional documents as may reasonably be
required by the competent authorities for the purpose
of registering the Vessel, provided the Buyers notify
the Sellers of any such documents as soon as possible
after the date of this Agreement.
At the time of delivery the Buyers and Sellers shall sign and deliver to each
other a Protocol of Delivery and Acceptance confirming the date and time of
delivery of the Vessel from the Sellers to the Buyers.
9. ENCUMBRANCES
The Sellers warrant that the Vessel, at the time of delivery, is free from all
charters, encumbrances, mortgages and maritime liens or any other debts
whatsoever except for encumbrances, maritime liens or debts arising out of the
operations of the Buyers. The Sellers hereby undertake to indemnify the Buyers
against all consequences of claims made against the Vessel which have been
incurred prior to the time of delivery.
<PAGE>
10. TAXES, ETC.
Any taxes, fees and expenses in connection with the purchase and registration
under the Buyers' flag shall be for the Buyers' account, whereas similar charges
in connection with the closing of the Sellers' register shall be for the
Sellers' account.
11. CONDITION ON DELIVERY
The Vessel with everything belonging to her shall be at the Sellers' risk and
expense until she is delivered to the Buyers, but subject to the terms and
conditions of this Agreement she shall be delivered and taken over as she was at
the time of delivery.
* Notes, if any, in the surveyor's report which are accepted by the
Classification Society without condition/recommendation are not to be taken into
account.
12. NAME/MARKINGS
Buyers are entitled to maintain the name of the Vessel.
13. BUYERS' DEFAULT
Should the charterhire not be paid in accordance with the Charterparty, the
Sellers have the right to cancel this Agreement, and they shall be entitled to
claim compensation for their losses and for all expenses incurred together with
interest. Should the Purchase Price not be paid in accordance with Clause 3, the
Sellers have the right to cancel the Agreement in which case the Sellers shall
be entitled to claim further compensation for their losses and for all expenses
incurred together with interest.
14. SELLERS' DEFAULT
Should the Sellers fail to be ready to validly complete a legal transfer by the
date stipulated in line 61 the Buyers shall have the option of canceling this
Agreement.
Should the Sellers fail to be ready to validly complete a legal transfer as
aforesaid they shall make due compensation to the Buyers for their loss and for
all expenses together with interest if their failure is due to proven negligence
and whether or not the Buyers cancel this Agreement.
15. BUYERS' REPRESENTATIVES
[intentionally deleted]
16. ARBITRATION
This Agreement shall be governed by and construed in accordance with English law
and any dispute arising out of this Agreement shall be referred to arbitration
in London in accordance with the Arbitration Acts 1950 and 1979 or any statutory
modification or re-enactment thereof for the time being in force, one arbitrator
being appointed by each party. On the receipt by one party of the nomination in
writing of the other party's arbitrator, that party shall appoint their
<PAGE>
arbitrator within fourteen days, failing which the decision of the single
arbitrator appointed shall apply. If two arbitrators properly appointed shall
not agree they shall appoint an umpire whose decisions shall be final.
