-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ReOjQdMf541erxUY8PqRb1jf3yAOmZ+rloTMkmTML7gh/WHNQnzLjkFvIZKxdV0S PQRryMOpEaOG1j4lW9ivcQ== 0000910662-03-000352.txt : 20031120 0000910662-03-000352.hdr.sgml : 20031120 20031120165621 ACCESSION NUMBER: 0000910662-03-000352 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20031120 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEA CONTAINERS LTD /NY/ CENTRAL INDEX KEY: 0000088095 STANDARD INDUSTRIAL CLASSIFICATION: WATER TRANSPORTATION [4400] IRS NUMBER: 980038412 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-101574 FILM NUMBER: 031015956 BUSINESS ADDRESS: STREET 1: 41 CEDAR AVE STREET 2: P O BOX HM 1179 CITY: HAMILTON HM EX BERMU STATE: D0 BUSINESS PHONE: 4412952244 MAIL ADDRESS: STREET 1: 41 CEDAR AVE STREET 2: PO BOX HM 1179 CITY: HAMILTON HM EX BERMU STATE: D0 FORMER COMPANY: FORMER CONFORMED NAME: SEA CONTAINERS ATLANTIC LTD DATE OF NAME CHANGE: 19810817 S-3/A 1 s3a1nov20.txt AMENDMENT NO. 1 As filed with the Securities and Exchange Commission on November 20, 2003 Registration No. 333-101574 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------- AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 SEA CONTAINERS LTD. (Exact name of registrant as specified in its charter) Bermuda 98-0038412 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 22 Victoria Street Hamilton HM 12, Bermuda (441) 295-2244 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) JOHN T. LANDRY, JR. Sea Containers America Inc. 1155 Avenue of the Americas New York, New York 10036 (212) 302-5066 (Name, address, including zip code, and telephone number, including area code, of agent for service) ------------------ Copy to: STEPHEN V. BURGER Carter Ledyard & Milburn LLP 2 Wall Street New York, New York 10005 (212) 732-3200 ------------------ Approximate date of commencement of proposed sale to the public: From time to time after this registration statement becomes effective, as determined by market conditions and other factors. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. |X| If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.[ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If the delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] --------------------- The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. --------------------- Pursuant to Rule 429 under the Securities Act of 1933, the prospectus herein is being filed as a combined prospectus satisfying the requirements of that Act and the rules and regulations thereunder for the registrant's offering registered on its Registration Statement on Form S-3, Registration No. 333-5458. Accordingly, this Registration Statement being currently filed shall act, upon effectiveness, as a post-effective amendment to the said earlier Registration Statement. ================================================================================ ii The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities, in any state where the offer or sale is not permitted. PROSPECTUS Subject to Completion, dated November 20, 2003 2,000,000 Class A Common Shares Sea Containers Ltd. Sea Containers Ltd. intends to sell from time to time up to 2,000,000 shares of its class A common shares, par value $.01 each, through Citigroup Global Markets Inc., on terms fixed at the time of sale. Citigroup is not required to sell any specific number or dollar amount of shares but has agreed to use its best efforts to sell the shares offered upon our request. Sea Containers has agreed to pay Citigroup a commission of 10 cents per share for sales of class A common shares in agency transactions. See "Plan of Distribution." The class A common shares are listed on the New York Stock Exchange and the Pacific Exchange (symbol: SCR.A). On November 18, 2003, the last reported sale price of a class A common share for New York Stock Exchange composite transactions was $17.90. On November 15, 2003 Sea Containers had issued and outstanding 19,507,899 class A common shares and 14,414,195 class B common shares, par value $.01 each. Sea Containers' bye-laws provide that its board of directors cannot declare any cash dividends on the class B common shares unless at the same time it declares a cash dividend on each class A common share in an amount at least 10% higher than the amount of the dividend declared on each class B common share. In general, holders of class A common shares and class B common shares vote together as a single class on all matters submitted to a vote of Sea Containers' shareholders, with holders of class B common shares having one vote per share and holders of class A common shares having one-tenth of one vote per share. Each class B common share is convertible at any time into one class A common share. In all other material respects, the class A common shares and class B common shares are identical and are treated as a single class of common shares. See "Description of Common Shares." You should carefully consider the risk factors beginning on page 3 of this prospectus before you invest in the class A common shares. This prospectus also relates to 2,000,000 rights to purchase Sea Containers' series A junior participating preferred shares. These rights will be attached to and transferrable only with the class A common shares sold in this offering. See "Description of Common Shares -- Rights Agreement." None of the Securities and Exchange Commission, any state securities commission or any Bermuda regulatory authority has approved or disapproved of the class A common shares being offered by this prospectus, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this prospectus is _______, 2003. Citigroup TABLE OF CONTENTS Page No. --- Risk Factors..................................................................3 Risk Factors Relating to our Businesses....................................3 Other Risks...............................................................17 Forward-Looking Statements...................................................22 Our Businesses...............................................................23 Ferry Operations..........................................................23 Rail Services.............................................................23 Marine Container Operations...............................................23 Leisure Operations........................................................24 Relationship with Orient-Express Hotels......................................24 Use of Proceeds..............................................................25 Plan of Distribution.........................................................25 Description of Common Shares.................................................26 Dividend Rights...........................................................26 Voting Rights.............................................................28 Rights Agreement..........................................................30 Liquidation Rights........................................................31 Conversion Rights.........................................................31 Miscellaneous.............................................................31 Authorized Representative....................................................32 Legal Matters................................................................32 Experts......................................................................32 Where You Can Find More Information..........................................32 2 Risk Factors You should carefully consider the risks described below and the other information contained in or incorporated by reference in this prospectus before making a decision to purchase class A common shares. If any of these risks occur, Sea Containers' business, prospects, financial condition, results of operations or cash flows could be materially adversely affected. In such case, the market price of the class A common shares could decline. This prospectus, including the documents incorporated by reference herein, also contains forward-looking statements that involve risks and uncertainties. We refer you to "Forward-Looking Statements" in this prospectus. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks described below and elsewhere in this prospectus. Risk Factors Relating to our Businesses Ferry Operations The ferry industry in areas where Sea Containers operates is highly competitive. Sea Containers competes with o six conventional ferry companies between southern Britain and the European Continent, three of which cross the Dover Straits, and also with Eurotunnel under the English Channel, o five ferry operators between Britain and Ireland, including three running fast ferries, o airlines, which compete for passenger traffic on our longer routes, o another commuter ferry service from eastern New Jersey to Manhattan, as well as road and rail commuter services, and o nine ferry companies in the northern Baltic Sea. The principal effect of all this competition is to limit our pricing power on our various routes. An increase in competition on any of the routes could adversely affect Sea Containers' passenger traffic or its pricing, thereby reducing its revenues. Also, some of Sea Containers' competitors have lower labor costs than it does, giving them an operating cost advantage over Sea Containers. 3 Sea Containers no longer offers duty-free sales to most of its passengers traveling between European Union countries, and retail profitability has fallen as a result. Retail sales to passengers of wine, spirits, perfume, tobacco and other products are an important component of ferry revenue on many of our routes. Duty-free shopping by passengers travelling between European Union countries ended in 1999, and the profitability of affected routes has fallen because margins are less on duty-paid merchandise. Also, passenger and car volumes have declined particularly on our cross-Channel routes below 1999 levels because of the absence of duty-free shopping and because fares have been increased to try to maintain profitability. Since 1999, we have discontinued three former duty-free routes to save costs. Silja Line also closed one route in 2000, but it has been less affected by the abolition of duty-free retail sales because all of its sailings to and from Sweden call at the nearby Aland Islands of Finland where the duty-free exemption continues due to the islands' fiscal status outside the European Union. Also, Silja Line's routes to Estonia remain duty-free until May 2004, when Estonia joins the European Union. Sea Containers' operating results are subject to seasonal fluctuations. Our passenger ferry business in North Europe and within the Baltic Sea is subject to seasonal fluctuation principally because volumes are linked to tourism. For example, about one-half of the passengers using ferry services to and from Britain travel during the June-September period. The historical and expected pattern of operating results from our ferry activities collectively is a loss in the first quarter each year and either a loss or breakeven in the fourth quarter. In 2004, we plan to operate our remaining U.K. ferry services on a seasonal basis, closing during the winter months, to save costs. Rising fuel prices may adversely affect the profits of Sea Containers' ferry services. Fuel is a significant operating expense for ferry operations. As a result, an increase in the price of fuel, such as that which occurred late in 2002 and into 2003, has adversely affected, and may in the future adversely affect, profitability. Sea Containers may purchase fuel forward at predetermined prices and may introduce fuel surcharges on passenger and vehicle fares in an effort to mitigate these increased costs, but we cannot assure you that these measures will prevent a fall in profits. Also, fuel price protests, as occurred in 2000 at French and British ports served by our ferries, may disrupt traffic flow for short periods and result in cancellations. Road and port blockades in the future, arising from fuel protests or other reasons, may have similar effects resulting in loss of carryings. Recurrence of the foot and mouth epidemic in Britain may adversely affect Sea Containers' results. In 2001, parts of mainland Britain suffered a foot and mouth disease outbreak. Areas were quarantined and affected livestock was killed. As a result, tourism in Britain suffered because of the negative publicity and cancellations of annual sporting and other public events during the spring and summer. Our ferry services to and from the European Continent and Ireland were adversely affected because tourist passenger and car traffic fell. The epidemic 4 ended in the latter part of 2001, but it may recur in the future. Generally speaking, our ferry traffic fluctuates with levels of tourism to Britain and may decline if events affecting tourism should occur, like the foot and mouth epidemic or future or threatened acts of terrorism. Accidents at sea and compliance with safety and environmental requirements may adversely affect Sea Containers' ferry operations. The operation of ships at sea is inherently risky, and the consequences of accidents may exceed the insurance coverage in place or result in a fall in passenger volume because of a possible adverse impact on the public's perception of ferry safety. For example, in August 2002, an engine fire in a ferry on Sea Containers' Belfast to Heysham route disrupted service during the peak season, resulting in a loss of about $3,500,000 of revenue which was not covered by insurance. Also, government regulation of ships particularly in the areas of safety and environmental impact may change in the future and require us to incur significant capital expenditure on our ships to keep them in compliance. Silja Line employs about 3,000 staff on board ship and onshore, most of whom are unionized. Strikes by them may disrupt Silja Line services. The shipping industry in Finland and Sweden is susceptible to industrial action due to the strong influence of maritime trade unions, resulting both from direct employer/employee disputes and from sympathetic industrial action which legislation in those countries currently permits. While we believe that Silja Line has good relations with its work force, we cannot assure you that Silja Line will not be adversely affected by future industrial action against efforts by Silja Line management to reduce labor costs, restrain wage increases or modify work practices. Profit margins on duty-free alcohol sold by Silja Line may decline in the future Retail prices of alcoholic beverages in the state monopoly shops in Finland and Sweden are very high compared to the retail prices in other European Union countries. We expect that the import of lower cost duty-paid alcoholic beverages bought by private individuals in other European Union countries will gradually result in a reduction of prices in Finland and Sweden. Lower retail prices in the shops on land will require duty-free shops on board Silja ferries to lower their prices to maintain their competitive advantage and would therefore be likely to lead to lower profit margins. This could have an adverse effect on Silja's financial results because a large part of Silja's revenue is generated by sales made in shops on board, about half of which is attributable to liquor, wine and beer. Other factors may adversely affect the profitability of Sea Containers' ferry services. Other principal factors affecting the performance of our ferry services are o travel convenience of departure timings, o adverse weather conditions disrupting service schedules, o regional economic and political conditions, including recessions, 5 o foreign exchange rate fluctuations in countries served by our ferries, o fluctuating prices in the ship sale and purchase market, and o industrial relations, strike activity and civil unrest at the ports and regions served by our ferries. The impact on profitability of these factors varies with each route and may change from year to year. Also, the opening of new routes can be unprofitable in early years because of the need to build up traffic over time while incurring added marketing, administrative and other start-up costs. Rail Operations Sea Containers' Great North Eastern Railway passenger rail services may be disrupted, with consequent loss of revenue, because of infrastructure problems for which Network Rail is responsible. GNER has claims outstanding against Railtrack for past disruption. As part of the privatization of the rail industry in Britain, Network Rail (Infrastructure) Ltd. (the successor to Railtrack Plc since October 2002) owns and maintains almost all track, signaling and other rail infrastructure in Britain. We have contracted with Network Rail for access to the tracks on which we operate. Our services may be disrupted and we may lose revenue if Network Rail fails to maintain track and signaling sufficiently. Although Network Rail has agreed to compensate us for certain disruptions and losses, we cannot assure you that we will be fully compensated. On October 17, 2000, a GNER train traveling at high speed derailed because of broken track near the town of Hatfield north of London. Four passengers were killed and 70 more were injured. The track had been insufficiently maintained by Railtrack with no speed restriction in place. GNER was exonerated from any responsibility for the accident. Following this derailment, Railtrack implemented hundreds of speed restrictions on the British rail network for several months while tracks were inspected and emergency maintenance was carried out. Train services were severely disrupted from resulting delays and cancellations. Most GNER services have meanwhile been reinstated to pre-Hatfield levels, however. On February 28, 2001, another accident involving GNER occurred near the town of Selby south of York when a passenger vehicle ran off a highway and stopped in the path of an oncoming GNER train traveling at high speed. The collision with the vehicle and the resulting derailment thrust the GNER train into a laden coal train traveling in the opposite direction on the adjacent track. In the collision between the two trains, ten persons were killed including three GNER staff and 70 more were injured. As in the Hatfield derailment, GNER has been absolved from any fault for the Selby accident. As a result of the Hatfield and Selby accidents, GNER experienced disruption of its services and has made claims against Railtrack under the track access agreement. Because of disputes, both GNER and Railtrack withheld contractual payments due during 2001, and arbitration proceedings have been commenced to determine their respective liability to each 6 other and the amounts due. Payments resumed in March 2002. Pursuant to separate arbitration awards under different parts of the track access agreement, Railtrack's liability to compensate GNER has been confirmed and the arbitrations are continuing on the amounts due. To date, GNER has been awarded substantial partial compensation that GNER has received or previously withheld from Railtrack. Network Rail, which would be liable for Railtrack's obligations, appealed in 2002 to the U.K. Rail Regulator one of the awards confirming liability. On March 31, 2003, the Regulator publicly stated that he had ruled in GNER's favor and would issue his formal judgment shortly. However, we cannot assure you that these awards from Railtrack or Network Rail will make GNER whole for past disruptions. Also, the U.K. Strategic Rail Authority, the franchisor under GNER's passenger rail franchise agreement, has claimed a financial interest in part of any compensation payable by Network Rail, but GNER has been advised by its legal counsel that it has no obligation to the Authority under that agreement. During the third quarter of 2003, GNER and Network Rail reached agreement in principle on GNER's claims, which contemplates GNER paying $7,200,000 of track access charges over-withheld. The settlement is subject to a number of conditions, including audit by the Strategic Rail Authority. Thus, we cannot assure you that a settlement will be completed, or completed on terms favorable to Sea Containers. The longer-term effect of the accidents has been a slowdown in ridership growth among long distance train operators generally, including GNER. GNER does not maintain business interruption insurance relating to its moving train operations. Following the Hatfield and Selby accidents described above, as well as accidents involving other passenger train operators in Britain and the bankruptcy of one of the larger insurers writing business interruption insurance for the U.K. rail industry, this class of coverage is not currently available to passenger rail franchisees in the U.K. GNER and other franchisees are relying primarily on their rights against Network Rail under track access agreements for reimbursement of losses from future accidents involving moving train operations. There can be no assurance, however, that Network Rail or other responsible parties will provide sufficient reimbursement to make GNER whole. GNER's rail franchise from the British government expires in April 2005 and may not be extended. The franchise was originally granted in 1996 for a seven-year term, and was extended by two years at the beginning of 2002 so that it currently expires in April 2005. GNER had applied in 1999 to the government to replace and extend its franchise agreement with one expiring in 2020, but the industry-wide consequences of the Hatfield derailment described above, including the financial impact on Railtrack, resulted in the shorter extension. GNER plans to resume its discussions with the British government about a longer franchise, or to bid again for the franchise if its present term will expire. We cannot assure you, however, that the franchise will be extended beyond its current expiration date. Failure to renew or extend the franchise in 2005 would require Sea Containers to terminate its rail operations and could adversely affect consolidated net earnings of Sea Containers by about $23,000,000 per year based on current forecasts. 7 Our GNER rail business competes with other passenger train operators in Britain that may increase their train paths and times and limit our expansion plans. Eight other passenger train operators in Britain run on parts of GNER's routes. In general, another operator may negotiate with Network Rail for new services and additional train paths and times. All awards are still government-regulated to ensure passenger benefits are achieved, such as better frequencies, lower fares or new journey opportunities, and to avoid competition that might interfere with each operator's ability to satisfy the minimum service requirements under its franchise. GNER has experienced only limited new competition since its franchise began. Aggressive bidding by GNER's rail competitors in the future, however, may divert business away from GNER and limit our expansion plans. We also compete with cars, buses, airlines and other train operators with parallel or intersecting train routes with us. Customers tend to choose their mode of transportation based on o frequency of arrivals and departures, o time, o reliability, o convenience, o comfort, and o price. The weight given to any one particular factor depends on whether a customer is traveling for business or for pleasure. GNER may be unable to increase its revenue to pass through its increased expenses. We offer a variety of ticket types with different prices, such as standard class, first class, weekend and advance purchase. We are contractually obligated not to raise our ticket prices more than the rate of inflation on ticket types currently representing about 20% of GNER's fare revenues. Our remaining ticket prices are not subject to any cap but are subject to competitive pricing of alternative rail, airline and other transport services. We must also pay passenger rebates if our trains fail to meet prescribed punctuality and reliability standards. Therefore, if our expenses increase, we may be unable to raise our revenue to pass through these increases. We cannot assure you that GNER or other labor disputes will not adversely affect Sea Containers. Labor is the largest component of variable costs for our rail operation. GNER has about 3,000 employees, about two-thirds of whom belong to unions. Since 1992, there has not been a labor strike specifically directed at GNER although nationwide strikes against former British Rail disrupted GNER's rail services for short periods in 1994 and 1995. The management of our rail operations is working with the unions to increase efficiency by changing work practices, mutual decision making and ongoing training, without adversely impacting service or safety. We cannot assure you that these measures will not result in labor disputes disrupting our business or that nationwide strikes similar to those discussed above will not recur. Also, labor disputes 8 disrupting other rail services connecting with GNER may reduce our passenger carryings so that we lose revenue. Penalty payments, poor weather, rising compliance costs and accidents may adversely affect GNER performance. If our train services disrupt Network Rail's scheduling or other operation of the rail infrastructure, such as by breakdowns of our rolling stock or through strikes by our employees, or if our services become insufficiently reliable, then GNER must pay contractual penalties to Network Rail or the British government. Our penalty payments have varied in the past but could be substantial since some factors that cause delays can be largely out of our control. Other factors affecting GNER's financial performance are adverse weather conditions disrupting services such as by track flooding, actual or threatened terrorist acts halting services, and changing government safety regulations which impose additional compliance costs on train operators. While we believe GNER operates its trains in compliance with relevant safety standards and carries adequate insurance against loss, we cannot assure you that accidents will not occur in the future involving GNER, whether or not it is at fault, or involving other train operations in Britain, or that a serious incident, whether or not involving GNER, would not have a material adverse effect on GNER's operations or financial condition. Marine Container Operations Sea Containers may be unable to compete favorably in the highly competitive container leasing and sales business. The container leasing and sales business is highly competitive. GE SeaCo, our 50/50 joint venture with General Electric Capital Corporation, competes with o nine other major leasing companies, o many smaller lessors, o manufacturers of container equipment, o companies offering finance leases as distinct from operating leases, o promoters of container ownership and leasing as a tax shelter investment, o container shipping lines, which sometimes lease their excess container inventories, and o suppliers of alternative types of equipment for freight transport. Competition among container leasing companies depends upon factors which include o lease rates, o the availability, quality and individual characteristics of equipment, and o customer service. 9 A decrease in the volume of world trade and other operating factors may adversely affect Sea Containers' container leasing business. World Trade. Demand for leased containers depends largely on levels of international trade and economic growth, both global and regional. Cyclical recessions can negatively affect lessors' operating results because during economic downturns or periods of reduced trade, such as occurred in 2001, ocean carriers may lease fewer containers and rely more on their owned fleets to satisfy their container requirements or may lease containers only at reduced rates. Thus, a slowdown in economic growth or trade may adversely affect GE SeaCo's container leasing business. We cannot predict whether or when such cyclical downturns will occur in the leasing industry. Other Factors. In recent years, the availability of low prices for new containers, principally those manufactured in China, and the consolidation of shipping lines have adversely affected our container leasing business. These trends may continue. Other general factors affecting demand for leased containers include o the available supply and prices of new and used containers, including the market acceptance of new container types and overbuying by competitors and customers, o economic conditions and competitive pressures in the shipping industry, including fluctuating ship charter and freight rates, containership fleet overcapacity or undercapacity, and expansion, consolidation or withdrawal of individual customers in that industry, o shifting trends and patterns of cargo traffic, o the availability and terms of equipment financing, o fluctuations in interest rates and foreign currency values, o import/export tariffs and restrictions, o foreign exchange controls, and o other governmental regulations and political or economic factors that are inherently unpredictable and may be beyond our control. The effect of these factors in 2002 was a decline in container leasing profitability. 10 We cannot assure you that lease rates or utilization for our containers will not decrease or that we can meet container demand. GE SeaCo's revenue is variable and largely depends on lease rates, equipment utilization and equipment availability. Lease rates depend on o the type and length of the lease, o the type and age of the equipment, o the application of our SeaWorthy and SeaCover programs to equipment maintenance obligations under the lease, o competition, as more fully discussed above, o interest rates, o new container prices, and o economic conditions, including world trade and other factors more fully discussed above. In recent years lease rates have declined, as have new container prices, and may continue to do so, thereby detracting from the economic returns on higher valued existing equipment. Utilization is the ratio of containers on lease to GE SeaCo's total container fleet and may also fluctuate due to these same factors. In recent years, for example, overall fleet utilization has declined principally because of consolidations among shipping lines, a trade imbalance with Asia resulting in high equipment returns in North America and Europe, and overproduction of some types of new containers by factories and overbuying by shipping lines and leasing competitors. While utilization improved in 2002 and 2003, there may again be a decline in utilization in future years. In order to meet anticipated demand promptly, GE SeaCo maintains inventories of available containers at various depots worldwide. Because demand is difficult to estimate, however, these inventories may be too large or small, and repositioning equipment in a timely manner may not be economically feasible. Also, container supply from manufacturers involves a time delay between order placement and equipment delivery, as a result of which GE SeaCo's revenue may be restrained when demand is strong or may not be realized by the time equipment is delivered. If GE SeaCo sells large quantities of equipment, our gains or losses on sale of equipment will fluctuate and may be significant. From time to time GE SeaCo sells equipment which it or one of its partners owns, both containers on lease to the lessee and idle equipment off lease. Equipment is typically sold if it is in the best interest of the owner to do so after taking into consideration the book value, physical condition, remaining useful life, suitability for leasing or other uses, and the prevailing local sales price for the equipment. Since these considerations vary, gains or losses on sale of 11 equipment will also fluctuate and may be significant if GE SeaCo sells large quantities of equipment. In recent years, GE SeaCo has stepped up its sale program on behalf of its partners to dispose of older units. Repositioning costs may adversely affect our profitability. If lessees return equipment to locations where supply exceeds demand, GE SeaCo routinely repositions containers to higher demand areas. Repositioning expenses vary depending on geographic location, distance, freight rates and other factors, and may not be fully covered by drop-off charges collected from the last lessees of the equipment or pick-up charges paid by the new lessees. Nor may demand be as great as anticipated after repositioning has occurred so that the equipment remains idle. Sea Containers may lose lease revenue and incur additional operating expenses when lessees of its containers default. When lessees of our containers default, the containers may be returned in locations where GE SeaCo cannot efficiently re-lease or sell them, or they may be lost. GE SeaCo may have to repair and reposition these containers where it can re-lease or sell them, which could be expensive depending on the locations and distances involved. As a result, GE SeaCo may lose lease revenue and incur additional operating expenses in repossessing and storing the equipment. While in recent years, defaults by lessees, as measured by our allowance for specific doubtful accounts, have not been material as a percentage of container revenue, we cannot assure you that any future defaults will not be material. Sea Containers may be subject to environmental liability that could adversely affect its business and financial health despite its insurance coverage. In certain countries like the United States, the owner of a leased container may be liable for the costs of environmental damage from the discharge of the contents of the container even though the owner is not at fault. GE SeaCo maintains insurance against property damage and third-party liability for its owned containers and those of its partners, and we require lessees to obtain similar insurance and to provide us indemnity against loss. However, we cannot assure you that insurance or indemnities can fully protect us or GE SeaCo against damages arising from environmental damage. Many countries impose limitations on the production of chlorofluorocarbon CFC refrigerants because of their ozone depleting and global warming effects. As a result, substantially all refrigerated containers in the GE SeaCo fleet acquired since 1992 have been charged with non-CFC refrigerant gas, and we are converting older units over time to non-CFC gas or disposing of them. Future government regulation of refrigerants and synthetic insulation materials, however, might require refrigerated containers using non-conforming substances to be retrofitted with conforming ones such as non-CFC refrigerants. In that event, we would have to bear all or a large portion of the cost to convert our units. 12 Leisure Operations The operations of Orient-Express Hotels are subject to adverse factors generally encountered in the hospitality industry. Besides the specific conditions discussed in the risk factors below, these factors include o cyclical downturns arising from changes in general and local economic conditions, o dependence on varying levels of tourism, business travel and corporate entertainment, o rising or falling disposable income of consumers and the travelling public, o changes in popular travel patterns, o competition from other hotels and leisure time activities, o periodic local oversupply of guest accommodation, which may adversely affect occupancy rates and actual room rates achieved, o increases in operating costs due to inflation and other factors which may not be offset by increased revenues, o regional and local economic and political conditions affecting market demand, including recessions, civil disorder and acts of terrorism, o foreign exchange rate movements, o adverse weather conditions or destructive forces like fire or flooding, and o seasonality, in that many of Orient-Express Hotels' hotels and tourist trains are located in the northern hemisphere where they operate at low revenue or close during the winter months. The effect of these factors varies among Orient-Express Hotels' hotels and other properties because of their geographic diversity. The recent SARS epidemic in Asia, for example, caused a reduction in passenger bookings on the tourist train of Orient-Express Hotels operating between Bangkok and Singapore and had a negative impact on travel to Australia and Tahiti. Although the SARS outbreak has been contained, it is possible that the disease could re-emerge. The occurrence of such or a similar event may have a negative impact on Orient-Express Hotels' operations. In particular, as a result of terrorist attacks in the United States on September 11, 2001 and the subsequent military actions in Afghanistan and Iraq, international, regional and even domestic travel have been disrupted. Demand for most of Orient-Express Hotels' properties declined substantially in the latter part of 2001, and the effects of the disruption are continuing to be felt. For example, American leisure travellers seem more reluctant than in the past to go 13 abroad, and the booking lead-times by guests, travel agents and tour operators at Orient-Express Hotels' properties has shortened since September 11. Further acts of terrorism or possible military action could again reduce leisure and business travel. The hospitality industry is highly competitive, both for acquisitions of new hotels and restaurants and for customers. Orient-Express Hotels competes for hotel and restaurant acquisition opportunities with others who have substantially greater financial resources than it does. They may be prepared to accept a higher level of financial risk than Orient-Express Hotels can prudently manage. This competition may have the effect of reducing the number of suitable investment opportunities offered to Orient-Express Hotels and increasing Orient-Express Hotels' acquisition costs by enhancing the bargaining power of property owners seeking to sell or to enter into management agreements. Some of Orient-Express Hotels' properties are located in areas where there are numerous competitors. For example, in the last two years, competing deluxe hotels opened near its properties in New Orleans, Sydney and Rio de Janeiro. Competitive factors in the hospitality industry include convenience of location, quality of the property, room rates and menu prices, range and quality of food services and amenities offered, types of cuisine, and name recognition. Demographic, geographic or other changes in one or more of Orient-Express Hotels' markets could impact the convenience or desirability of its hotels and restaurants, and so could adversely affect their operations. Also, new or existing competitors could significantly lower rates or offer greater conveniences, services or amenities or significantly expand, improve or introduce new facilities in the markets in which Orient-Express Hotels' hotels and restaurants compete. The hospitality industry is heavily regulated, including with respect to food and beverage sales, employee relations, construction and environmental concerns, and compliance with these laws could reduce revenues and profits of properties owned or managed by Orient-Express Hotels. Orient-Express Hotels and its various properties are subject worldwide to numerous laws, including those relating to the preparation and sale of food and beverages, liquor service, and health and safety of premises. Orient-Express Hotels' properties are also subject to laws governing Orient-Express Hotels' relationship with its employees in such areas as minimum wage and maximum working hours, overtime, working conditions, hiring and firing employees and work permits. Also, the success of expanding Orient-Express Hotels' existing properties depends upon its obtaining necessary building permits or zoning variances from local authorities. Orient-Express Hotels also is subject to foreign and U.S. laws and regulations relating to the environment and the handling of hazardous substances which may impose or create significant potential environmental liabilities, even in situations where the environmental problem or violation occurred on a property before Orient-Express Hotels acquired it. 14 Orient-Express Hotels' acquisition, expansion and development strategy may be less successful than we expect, and, therefore, its growth may be limited. Orient-Express Hotels intends to increase its revenues and net income through acquisitions of new properties and expansion of its existing properties. Pursuit of new growth opportunities successfully will depend on the ability to identify properties suitable for acquisition and expansion, to negotiate purchases or construction on satisfactory terms, to obtain the necessary financing and permits and to integrate new properties into existing operations. Also, the acquisition of properties in new locations may present operating and marketing challenges that are different from those currently encountered in existing locations. We cannot assure you that Orient-Express Hotels will succeed in its growth strategy. Orient-Express Hotels may develop new properties in the future. New project development is subject to such adverse factors as market or site deterioration after acquisition, inclement weather, labor or material shortages, work stoppages and the continued availability of construction and permanent financing. For example, the opening of the Westcliff Hotel in Johannesburg occurred about six months later than originally planned as construction took longer than expected. This delay had a significant adverse impact on the revenues and profitability of African operations. We cannot be sure that Orient-Express Hotels will obtain the necessary additional capital to finance the growth of its business. The acquisition and expansion of leisure properties, as well as the ongoing renovations, refurbishments and improvements required to maintain or upgrade existing properties, are capital intensive. Orient-Express Hotels' current expansion plans call for the expenditure of up to an aggregate of about $80,000,000 over the next few years to add new rooms and/or facilities to existing properties, and its current acquisition plans call for the expenditure of about $50 million per year for new properties. Orient-Express Hotels also plans to continue to acquire additional properties. The availability of future borrowings and access to the capital markets for equity financing to fund these acquisitions and expansions depends on prevailing market conditions and the acceptability of financing terms offered to Orient-Express Hotels. We cannot assure you that future borrowings or equity financing will be available to Orient-Express Hotels, or available on acceptable terms, in an amount sufficient to fund its needs. Future debt financings could involve restrictive covenants which would limit Orient-Express Hotels' flexibility in operating its business. Orient-Express Hotels' operations may be adversely affected by extreme weather conditions and the impact of natural disasters. Orient-Express Hotels operates properties in a variety of locales, each of which is subject to local weather patterns and their effects on its properties as well as on customer travel. Since Orient-Express Hotels' revenues are dependent on the revenues of individual properties, extreme weather conditions can from time to time have a major adverse impact upon individual properties or particular regions. For example, in November 1999 a major hurricane passed over St. Martin where the La Samanna hotel is located, resulting in the closing of the hotel until February 2000 so that much of the high season that year was missed. 15 Orient-Express Hotels' properties are also vulnerable to the effects of destructive forces, such as fire, storms and flooding. Although the properties are insured against property damage, damages resulting from acts of God or otherwise may exceed the limits of the insurance coverage or be outside the scope of that coverage. The La Samanna hotel, for example, suffered substantial wind and flooding damage during the 1999 hurricane. Although it was fully insured for that damage, Orient-Express Hotels may face losses with other natural disasters affecting its properties in the future. If the relationships between Orient-Express Hotels and its employees were to deteriorate, it may be faced with labor shortages or stoppages, which would adversely affect its ability to operate its facilities. Orient-Express Hotels' relations with its employees in various countries, including employees represented by labor unions, could deteriorate due to disputes related to, among other things, wage or benefit levels, working conditions, or its response to changes in government regulation of workers and the workplace. Operations rely heavily on employees' providing high-quality personal service, and any labor shortage or stoppage caused by poor relations with employees, including labor unions, could adversely affect the ability to provide those services, which could reduce occupancy and room revenue and even tarnish Orient-Express Hotels' reputation. Orient-Express Hotels' owned hotels and restaurants are subject to risks generally incident to the ownership of commercial real estate and often beyond its control. These include o changes in national, regional and local economic and political conditions, o changes in interest rates and in the availability, cost and terms of financing, o the impact of present or future governmental legislation and regulations (including environmental laws), o the ongoing need for capital improvements to maintain or upgrade properties, o changes in property taxes and operating expenses, and o the potential for uninsured or underinsured losses. Sea Containers no longer has voting control of Orient-Express Hotels which is no longer a Sea Containers consolidated subsidiary. On July 22, 2002, a subsidiary of Orient-Express Hotels -- Orient-Express Holding 1 Ltd. -- acquired from Sea Containers a substantial number of Orient-Express Hotels class B common shares pursuant to an agreement in place at the time of the initial public offering of Orient-Express Hotels in August 2000. The shares now owned by Holdings 1 represent about 77% of the combined voting power of all Orient-Express Hotels common shares outstanding. As a result, although three directors and officers of Sea Containers are on the board of directors of Orient-Express Hotels, Sea Containers no longer has voting control of Orient-Express Hotels. 16 Since November 14, 2002, Sea Containers has owned less than a majority of the common shares of Orient-Express Hotels (disregarding the shares owned by Holdings 1). Therefore, Orient-Express Hotels is not any longer a consolidated subsidiary in Sea Containers' financial statements. Instead, Sea Containers accounts for its investment in Orient-Express Hotels using the equity method of accounting. Other Risks Sea Containers has significant debt repayment obligations in the future. At September 30, 2003, Sea Containers and its subsidiaries were obligated to repay through the end of 2004 approximately $396,659,000 of indebtedness, including $127,514,000 of borrowings under a $203,909,000 revolving credit facility from a syndicate of banks secured by container equipment, due October 24, 2004, and $79,729,000 of 12 1/2 % Senior Subordinated Debentures due December 1, 2004. In May 2003, management undertook a plan to restructure Sea Containers' indebtedness by extending the maturity dates of certain indebtedness and by repaying other indebtedness by selling or refinancing certain assets. Pursuant to such restructuring plan, through September 30, 2003 Sea Containers and its subsidiaries have repaid or extended the maturity dates of approximately $279,000,000 of indebtedness. Approximately $222,000,000 of the indebtedness repaid came from the proceeds received from the sale of its Isle of Man Stream Packet Company ferry unit in the Irish Sea. The next steps of the restructuring plan contemplate the extension of the maturity of Sea Containers' revolving credit facility due October 2004, and the repayment of debt with the proceeds of the sale of its remaining port interests in the U.K. at Folkestone on the English Channel and the proceeds of the sale of common shares of Orient Express Hotels owned by Sea Containers. The sale of Orient-Express Hotels shares will depend on market conditions. We cannot assure you that Sea Containers will be able to complete its restructuring plan on a timely basis or that Sea Containers will raise funds or extend maturities to the extent necessary. To the extent that maturities of indebtedness are successfully extended, Sea Containers will have to repay such indebtedness when it becomes due at the new maturity dates, together with other indebtedness due in such future years, and we cannot assure you that Sea Containers will have sufficient cash flow from operations to do so. Furthermore, although Sea Containers may seek to refinance some of such indebtedness in future years, it may not be able to obtain such refinancing. Sea Containers has substantial additional indebtedness due in 2005 and thereafter. As of September 30, 2003, Sea Containers and its subsidiaries had $122,001,000 of indebtedness due in 2005, $259,525,000 due in 2006, $131,993,000 due in 2007 and $637,954,000 due in 2008 and thereafter. Any failure of Sea Containers to repay any indebtedness when due may result in a default under such indebtedness and cause cross-defaults under other indebtedness. 17 Sea Containers' substantial indebtedness could adversely affect its financial health. Sea Containers and its subsidiaries have a significant amount of debt and may incur additional debt from time to time. As of September 30, 2003, Sea Containers'consolidated long-term indebtedness was $1,547,313,000. Also, GE SeaCo, a 50/50 joint venture with General Electric Capital Corporation, had $471,454,000 of long-term indebtedness at September 30, 2003. This substantial indebtedness could: o require Sea Containers to dedicate a large portion of its cash flow from operations to payments on its indebtedness and the indebtedness of its subsidiaries, and so reduce the availability of cash flow to fund its working capital, capital expenditures, product and service development and other general corporate purposes. For example, in 2002, Sea Containers and its subsidiaries generated $193,732,000 in cash from operating activities after paying interest of $117,692,000 and before loan principal repayments of $163,345,000; o limit Sea Containers' ability to obtain additional financing to fund future working capital, capital expenditures, product and service development and other general corporate purposes; o increase its vulnerability to adverse economic and industry conditions, including the seasonality of some of its businesses; or o limit its flexibility in planning for, or reacting to, changes in its business and industry as well as the economy generally. Covenants in Sea Containers' financing agreements could limit its discretion in operating its businesses, causing Sea Containers to make less advantageous business decisions. A substantial portion of Sea Containers' indebtedness is secured by its assets. Our financing agreements with about 50 commercial bank lenders contain covenants that include limits on additional debt secured by mortgaged properties, limits on liens on property and limits on mergers and asset sales, and financial covenants requiring maintenance of a minimum net worth amount or a minimum interest expense coverage, or establishing a maximum debt-to-equity ratio. A substantial portion of our indebtedness is also secured by our assets. Future financing agreements may contain similar, or even more restrictive, provisions and covenants. If Sea Containers fails to comply with the restrictions in its present or future financing agreements, a default may occur. A default could allow the creditors to accelerate the related debt as well as any other debt to which a cross-acceleration or cross-default provision applies. A default could also allow the creditors to foreclose on the assets securing such debt. Increases in prevailing interest rates may increase our interest payment obligations. About 71% of Sea Containers' consolidated long-term debt at September 30, 2003, accrued interest at rates that fluctuate with prevailing interest rates, so that any increases in prevailing interest rates may increase our interest payment obligations. From time to time, Sea 18 Containers enters into hedging transactions in order to manage its floating interest-rate exposure. At September 30, 2003, Sea Containers had swapped $183,344,000 of floating rate debt for fixed rate debt. Sea Containers will need additional capital to finance the growth of its business. Our acquisition of new assets and properties, both for growth as well as for replacement, is capital intensive. The availability of future borrowings and access to the capital markets to finance these acquisitions depends on Sea Containers' ability to incur additional debt under its current financing arrangements, prevailing market conditions and the acceptability of financing terms offered to us. We cannot assure you that future borrowings or security offerings will be available, or available on attractive terms, to us in an amount sufficient to enable us to fund our needs. Currency fluctuations may have a material adverse effect on Sea Containers' financial statements and/or its operating margins. Substantial portions of the revenues and expenses of Sea Containers are denominated in non-U.S. currencies such as the British pound sterling and the euro. In addition, we buy assets and incur liabilities in these foreign currencies. Foreign exchange rate fluctuations may have a material adverse effect on our financial statements and/or our operating margins. Our financial statements, which are presented in U.S. dollars, can be impacted by foreign exchange fluctuations through both o translation risk, which is the risk that our financial statements for a particular period or as of a certain date depend on the prevailing exchange rates of the various currencies against the U.S. dollar, and o transaction risk, which is the risk that the currency of our costs and liabilities fluctuates in relation to the currency of our revenue and assets, which fluctuations may adversely affect our operating margins. With respect to translation risk, even though the fluctuations of currencies against the U.S. dollar can be substantial and therefore significantly impact comparisons with prior periods, the translation impact is a reporting consideration and does not affect the underlying results of operations, as transaction risk does. As far as we can, we match foreign currency revenues and costs and assets and liabilities to provide a natural hedge against translation risks although this is not a perfect hedge. With respect to transaction risk, although this risk may adversely affect operating margins, we may mitigate our exposure by entering into forward foreign exchange contracts from time to time. Sea Containers' directors and officers may control the outcome of most matters submitted to a vote of its shareholders. A subsidiary of Sea Containers - Contender 2 Ltd. - together with Sea Containers' directors and executive officers, currently hold about 85% of the voting power for most matters 19 submitted to a vote of Sea Containers' shareholders. Under Bermuda law, the class B common shares of Sea Containers owned by Contender 2, representing approximately 79% of the combined voting power of the class A and class B common shares, are outstanding and may be voted by Contender 2. The manner in which Contender 2 votes its class B common shares is determined by the directors of Contender 2, two of whom - James B. Sherwood and John D. Campbell - are also directors and officers of Sea Containers, consistently with the exercise by those directors of their fiduciary duties to Contender 2. Contender 2 is able to elect a majority of the members of the Board of Directors of Sea Containers, to control the outcome of most matters submitted to a vote of the shareholders of Sea Containers and to block a number of matters relating to a change of control of Sea Containers. See "Description of Common Shares -- Voting Rights." Provisions in Sea Containers' charter documents may discourage potential acquisitions of Sea Containers, even those which the holders of a majority of its class A common shares might favor. Sea Containers' memorandum of association and bye-laws contain provisions that could make it harder for a third party to acquire us without the consent of Sea Containers' board of directors. These provisions include o supermajority shareholder voting provisions for the removal of directors from office with or without cause, and for "business combination" transactions with beneficial owners of shares carrying 15% or more of the votes which may be cast at any general meeting of Sea Containers, and o limitations on the voting rights of such 15% beneficial owners. Also, our board of directors has the right under Bermuda law to issue preferred shares without shareholder approval, which could be done to dilute the stock ownership of a potential hostile acquirer. Although we believe these provisions provide for an opportunity to receive a higher bid by requiring potential acquirers to negotiate with our board of directors, these provisions apply even if the offer may be considered beneficial by many shareholders. These provisions are in addition to the ability of Contender 2 and directors and officers to vote shares representing a significant majority of the total voting power of our common shares. See the "risk factor" immediately above and "Description of Common Shares - Voting Rights." Also, the rights to purchase series A junior preferred shares, one of which is attached to each class A and class B common share, may have antitakeover effects. See "Description of Common Shares - Rights Agreement." We cannot assure you that a judgment of a United States court for liabilities under U.S. securities laws would be enforceable in Bermuda, or that an original action can be brought in Bermuda against Sea Containers for liabilities under U.S. securities laws. Sea Containers is a Bermuda company, a majority of its directors and officers are residents of Bermuda, the United Kingdom and elsewhere outside the United States, and most of its assets and the assets of its directors and officers are located outside the United States. As a result, it may be difficult for you to 20 o effect service of process within the United States upon Sea Containers or its directors and officers, or o enforce judgments obtained in United States courts against Sea Containers or its directors and officers based upon the civil liability provisions of the United States federal securities laws. Sea Containers has been advised by its Bermuda counsel, Appleby Spurling & Kempe, that there is doubt o whether a judgment of a United States court based solely upon the civil liability provisions of the United States federal securities laws would be enforceable in Bermuda against Sea Containers or its directors and officers, and o whether an original action could be brought in Bermuda against Sea Containers or its directors and officers to enforce liabilities based solely upon the United States federal securities laws. 21 Forward-Looking Statements This prospectus, and the reports and other information that Sea Containers has filed with the SEC which are incorporated by reference in this prospectus, contain forward-looking statements, including statements regarding, among other items: o competitive factors in our businesses, o our ability to offer duty-free shopping, o the operations of Silja Line, o deployment of fast speed ferries, o future legislation in any country where we have significant assets or operations, o strikes or other labor disruptions, o currency fluctuations, and o trends in our future operating performance. We have based these forward-looking statements largely on our expectations as well as assumptions we have made and information currently available to our management. When used in this prospectus or in incorporated reports, the words "anticipate," "believe," "estimate," "expect" and similar expressions, as they relate to Sea Containers or its management, are intended to identify forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, some of which are beyond our control. Actual results could differ materially from those anticipated, as a result of the factors described under "Risk Factors" in this prospectus and other factors. Furthermore, in light of these risks and uncertainties, the forward-looking events and circumstances discussed in this prospectus and incorporated reports might not transpire. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 22 Our Businesses Sea Containers and its subsidiaries engage in four main businesses: o ferry operations, mainly involving high speed and conventional passenger and vehicle ferry services in the English Channel, Irish Sea and northern Baltic Sea; o high speed passenger rail services in Britain between London and Scotland; o the leasing of cargo containers, principally through Sea Containers' unconsolidated 50/50 GE SeaCo SRL joint venture with General Electric Capital Corporation, to a diversified customer base of liner ship operators and others throughout the world, and the manufacture and repair of container equipment; and o ownership and/or management of hotels, restaurants, tourist trains and a river cruiseship located throughout the world through Orient-Express Hotels, an unconsolidated company in which Sea Containers owns a 47% equity interest. In addition, Sea Containers engages in property development, perishable commodity production and trading, and publishing. Ferry Operations Our ferry services include high speed vessels operating on routes between England and France and between Scotland and Northern Ireland. Our Silja Line subsidiary operates a fleet of large multipurpose passenger and freight ferries as well as smaller fast ferries in the northern Baltic Sea. In addition to ticket sales, we derive substantial revenues from providing on-board catering and retail sales, including duty-free sales on Silja Line services. We also operate a commuter ferry service in New York harbor and, in a joint venture with a third party, a ferry service between Italy and Croatia in the Adriatic Sea. Rail Services In 1996, the British government awarded us a seven-year franchise to operate the Great North Eastern Railway, the high-speed passenger rail service along the east coast of Great Britain between London and Scotland. Since acquiring the GNER franchise, we have improved service, increased ridership and reduced costs so that our rail operations no longer receive government subsidies. Our franchise has been extended and now expires in April 2005. Marine Container Operations We lease our cargo containers, principally through our GE SeaCo SRL joint venture with General Electric Capital Corporation, to a diversified customer base of liner ship operators and others throughout the world. We formed GE SeaCo in May 1998 to reduce overhead and operating costs and to acquire new equipment. GE SeaCo provides standard cargo containers as well as specialized cargo containers used to transport cargoes not suited to standard containers, such as perishable food items, liquids and heavy machinery. 23 We also own and operate container factories and depots. Leisure Operations Sea Containers owns about 47% of the common shares of Orient-Express Hotels (disregarding the shares owned by a subsidiary of Orient-Express Hotels). Orient-Express Hotels owns and/or manages o luxury hotels and resorts located in the United States, the Caribbean, Europe, southern Africa, South America, Australia and the South Pacific, o tourist trains in Europe and Southeast Asia, including the Venice Simplon-Orient-Express in England and Europe and the Eastern & Oriental Express in Southeast Asia, o a river cruise ship in Burma (Myanmar), and o restaurants in New York, Buenos Aires and London. Orient-Express Hotels also engages in merchandising related to its leisure activities. * * * Sea Containers maintains its registered office at 22 Victoria Street, Hamilton HM 12, Bermuda (telephone 441-295-2244). Sea Containers also has a United Kingdom service company subsidiary -- Sea Containers Services Ltd. -- with offices at Sea Containers House, 20 Upper Ground, London SE1 9PF, England (telephone 011-44-20-7805-5000), and a United States subsidiary -- Sea Containers America Inc. -- with offices at 1155 Avenue of the Americas, New York, New York 10036 (telephone 212-302-5066). Relationship with Orient-Express Hotels Sea Containers currently owns 11,943,901 class A common shares of Orient-Express Hotels and 2,459,399 class B common shares of Orient-Express Hotels, representing about 47% of Orient-Express Hotels' outstanding class A and class B common shares (excluding class B common shares owned by an Orient-Express Hotels subsidiary, Holdings 1) and having about 16% of the combined voting power of all outstanding Orient-Express Hotels class A and class B common shares (including class B common shares owned by such subsidiary). Orient-Express Hotels has filed a registration statement with the SEC (which was declared effective on February 19, 2003) for sales by Sea Containers from time to time, in one or more transactions, of any or all of its remaining 11,943,901 class A common shares of Orient-Express Hotels plus the 2,459,399 Orient- Express Hotels' class A common shares issuable upon conversion of 2,459,399 Orient-Express Hotels class B common shares held by Sea Containers. However, in connection with a proposed underwritten public offering by Orient- Express Hotels of its class A common shares, Sea Containers is prepared to agree not to sell or otherwise transfer any class A or class B common shares of Orient-Express Hotels for 60 days after such offering. 24 Use of Proceeds We intend to use the net proceeds from the sale of the class A common shares in this offering for Sea Containers' general corporate purposes, which may include reduction of debt, funding Sea Containers' capital expenditure program for each of its businesses, possible acquisitions and working capital. Plan of Distribution Sea Containers may sell the class A common shares offered by this prospectus from time to time through Citigroup Global Markets Inc. by means of o ordinary brokers' transactions and transactions in which the broker dealer solicits purchases, o block transactions (which may involve crosses) in accordance with the rules of any exchange on which the class A common shares may be admitted to trading ("Exchange"), in which Citigroup may attempt to sell class A common shares as agents but may purchase and resell all or a portion of the block as principals, o "fixed price offerings" off the floors of the Exchanges, or "exchange distributions" and "special offerings" of class A common shares under the rules of the Exchanges, o short sales, o a combination of any such methods of sale, in each case on the Exchanges, in the over-the-counter market, through negotiated transactions or otherwise, or o any other method permitted pursuant to applicable law, at market prices prevailing at the time of the sale or at prices otherwise negotiated. Citigroup is not required to sell any specific number or dollar amount of shares but has agreed to use its best efforts to sell any or all of the shares offered by this prospectus upon our request. In connection with those sales, Citigroup may pay or allow distributors' or sellers' commissions which will not exceed those customary for the types of transactions involved. Sea Containers has agreed to pay Citigroup a commission of 10 cents per share for each agency transaction effected. If Citigroup purchases class A common shares as principal, it may resell such shares by any method of sale described above. If Citigroup should conduct a "fixed price offering" of class A common shares off the floors of the Exchanges, Citigroup as principal would purchase a block of shares from Sea Containers and would form a group of selected dealers to participate in the resale of the shares. Any such offering, or any "special offering" or "exchange distribution" by Citigroup, would be described in a supplement to this prospectus setting forth the terms of the offering and the number of shares being offered. 25 Citigroup and any other participating broker or dealer will be "underwriters" within the meaning of Section 2(a)(11) of the Securities Act of 1933 if they act as principals in connection with the sale of the class A common shares offered by this prospectus, and they may be deemed to be underwriters if they act as agents in that connection. The compensation of Citigroup and any other broker or dealer may be considered as underwriting commissions or discounts. Sea Containers will pay all of the expenses of the offering, which we estimate will be approximately $150,000. No minimum subscription must be raised by the sale of the class A common shares in this offering in order to provide for any of the matters enumerated in Section 28 of The Companies Act 1981 of Bermuda, as amended. Affiliates of Citigroup have certain lending relationships with us or Orient-Express Hotels. If more than 10% of the proceeds of an offering under this prospectus, not including underwriting compensation, will be received by entities who are affiliated with Citigroup, or Citigroup together with any other National Association of Securities Dealers, Inc. members who are participating in an offering, the offering will be conducted in compliance with the NASD Conduct Rule 2710(c)(8). Pursuant to that rule, the appointment of a qualified independent underwriter would not be necessary, as a bona fide independent market (as defined in the NASD Conduct Rules) exists in the class A common shares. Description of Common Shares The authorized capital of Sea Containers consists of 60,000,000 class A common shares, 60,000,000 class B common shares and 15,000,000 preferred shares issuable in series. The following description of the class A common shares and class B common shares is a summary of all material applicable provisions of Bermuda law and the charter documents and bye-laws of Sea Containers, but it is only a summary and as such is qualified in its entirety by reference to the charter documents and bye-laws, which are exhibits to documents incorporated by reference in this prospectus. See "Where You Can Find More Information." Dividend Rights Holders of class A and class B common shares receive such dividends as the Sea Containers board of directors declares out of the profits of Sea Containers available under Bermuda law for that purpose. The board of directors may at any time declare a cash dividend on the class A common shares without at the same time declaring any dividend on the class B common shares. However, the board of directors may not declare a cash dividend on the class B common shares without at the same time declaring a cash dividend on the class A common shares having the same record date and payment date as the dividend on the class B common shares, and in an amount per class A common share at least 10% greater than the amount of the dividend declared on each class B common share. Distributions by Sea Containers of class A common shares of Orient-Express Hotels ("OEH A Shares") or class B common shares of Orient-Express Hotels ("OEH B Shares"), or rights, options or warrants to subscribe for OEH A Shares or OEH B Shares, may be made by the 26 board of directors of Sea Containers, in its sole discretion, to the holders of Sea Containers' class A common shares and to the holders of the Sea Containers' class B common shares, in whatever ratios the board of directors deems appropriate; however, (x) the ratio of (1) the aggregate number of OEH A Shares and OEH B Shares distributed to the holders of Sea Containers' class A common shares to (2) the total number of the Sea Containers' class A common shares outstanding must be as nearly equal as practicable to (y) the ratio of (3) the aggregate number of OEH A Shares and OEH B Shares distributed to the holders of Sea Containers' class B common shares to (4) the total number of Sea Containers' class B common shares outstanding. For distributions other than cash dividends, the class A and class B common shares of Sea Containers rank equally and have the same rights, except that o Sea Containers can distribute its class A common shares, or rights, options or warrants to subscribe for class A common shares, only to the holders of its class A common shares, o Sea Containers can distribute its class B common shares, or rights, options or warrants to subscribe for class B common shares, only to the holders of its class B common shares, and o the ratio of the number of Sea Container's class A common shares outstanding to the number of its class B common shares outstanding, each on a fully diluted basis, must be the same immediately after such a distribution as immediately before it. The only preferred shares of Sea Containers currently outstanding are 150,000 $7.25 Convertible Cumulative Preferred Shares. The $7.25 Preferred Shares outstanding accrue dividends at the rate of $1.8125 per share per quarter, or currently $271,875 per quarter in the aggregate. Unless Sea Containers has paid all accrued dividends on the $7.25 Preferred Shares, and on any other shares then ranking senior or equal to the $7.25 Preferred Shares, or the Board of Directors has declared all those accrued dividends and set aside amounts for their full payment, o Sea Containers may not pay or declare any dividends or make any other distribution on the class A or class B common shares, except dividends payable in class A or class B common shares or other shares of Sea Containers ranking junior to the $7.25 Preferred Shares, and o Sea Containers and its subsidiaries may not acquire any outstanding class A or class B common shares except in exchange for other class A or class B common shares or other shares ranking junior to the $7.25 Preferred Shares. No Bermuda law, decree or regulation restricts the export or import of capital, affects payment of dividends out of profits or other distributions by Sea Containers to non-resident shareholders, or subjects United States holders of class A or class B common shares to Bermuda taxes. Future dividends will depend upon Sea Containers' results of operations, financial position, capital requirements and other relevant factors. 27 Voting Rights Except as otherwise provided by Bermuda law, the holders of class A and class B common shares have exclusive voting rights at any general meeting of shareholders of Sea Containers, subject to the voting rights of the holders of any preferred shares which Sea Containers may issue in the future. However, o if at any time Sea Containers has failed to pay, or declare and set aside funds for six full quarterly dividends on the $7.25 Preferred Shares, the holders of $7.25 Preferred Shares, voting together as a separate class, will have the right to elect two directors and the number of directors of Sea Containers will automatically be increased by two. This voting right will continue, and any director of Sea Containers so elected will hold office, only until Sea Containers has paid all accrued dividends on the $7.25 Preferred Shares, or until the Board of Directors has declared such dividends and set aside amounts for their full payment. o without the consent of the holders of two-thirds of the outstanding $7.25 Preferred Shares voting as a separate class, Sea Containers may not amend the terms of the $7.25 Preferred Shares or authorize any shares ranking senior to the $7.25 Preferred Shares. o without the consent of the holders of a majority of the $7.25 Preferred Shares voting as a separate class, Sea Containers may not increase the authorized number of $7.25 Preferred Shares, or authorize more than 10,000,000 additional shares ranking equal to the $7.25 Preferred Shares, unless the consolidated profits of Sea Containers available under Bermuda law for the payment of dividends during a period of 12 consecutive calendar months out of the immediately preceding 18 calendar months are at least two times the annual dividend requirements on the $7.25 Preferred Shares and on all other shares ranking senior or equal to the $7.25 Preferred Shares that would be outstanding after such increase. o without the consent of the holders of a majority of the outstanding $7.25 Preferred Shares voting as a separate class, Sea Containers may not amalgamate, consolidate or merge with another corporation unless the preferences, rights and powers of the $7.25 Preferred Shares outstanding immediately before the effective date of the amalgamation, consolidation or merger are not adversely affected. In general, holders of class A common shares and holders of class B common shares vote together as single class with holders of class A common shares having one-tenth of one vote per share and holders of class B common shares having one vote per share. However, o any action varying the rights of either class would require the separate approval of that class as well as the approval of both classes voting together. o any "Business Combination," as defined in the bye-laws, involving Sea Containers and an "interested person" must be approved by the holders of not less than 90% of the outstanding class A and class B common shares voting together 28 as a single class, each with one vote, unless the Business Combination meets certain procedural and fair price requirements. An interested person is defined generally as a person, other than Sea Containers or a subsidiary, which is the beneficial owner of shares or rights over shares carrying 15% or more of the votes which may be cast at any general meeting of Sea Containers. o the shareholders of Sea Containers may remove directors from office, with or without cause, at a special general meeting only by a resolution adopted by the holders of not less than 90% of the outstanding class A and class B common shares voting together as a single class, each with one vote. A director may also be removed for cause by resolution of the directors, or can be defeated for re-election at an annual general meeting. o if at any time a person becomes an interested person as defined above, that person, with certain exceptions, will not be able to cast more than 15% of the votes which may be cast at any general meeting of Sea Containers for a period of five years from the date that such person first became an interested person. There is no provision for cumulative voting for the election of directors, so that unless there are dividend arrearages on the $7.25 Preferred Shares as described above, those shareholders can elect all of the directors which together can cast a majority of the votes represented by all outstanding class A common shares each with one-tenth of a vote and class B common shares each with one vote. In general, under The Companies Act 1981 of Bermuda and Sea Containers' bye-laws, approval of any matter proposed at any general meeting requires the affirmative vote of a simple majority of the total votes cast on that matter by the holders of class A common shares and class B common shares present in person or represented by proxy. Matters requiring such simple majority approval include proposals for the sale of all or substantially all of Sea Containers' assets, and amendments to its memorandum of association or bye-laws. A few matters would require more than majority approval under The Companies Act 1981, such as loans to directors, which would require the affirmative vote of at least 90% of the total votes of all outstanding class A and class B common shares, or a change of Sea Containers' independent auditors, which would require the affirmative vote of at least two-thirds of the total votes cast of class A and class B common shares, or a proposal for the amalgamation or merger of Sea Containers with another corporation, which would require the affirmative vote of at least 75% of the total votes cast of class A and class B common shares. The normal quorum for general meetings is the presence, in person or by proxy, of the holders of class A and class B common shares carrying a majority of the votes which may be cast at the meeting. However, at any special general meeting called for the purpose of electing directors or increasing or reducing the number of directors, the holders of not less than 90% in number of the outstanding class A and class B common shares must be present in person or by proxy to constitute a quorum. There are no limitations imposed by Bermuda law or by Sea Containers' memorandum of association and bye-laws on the rights of persons who are not citizens or residents of Bermuda to hold or vote class A or class B common shares. 29 A subsidiary of Sea Containers - Contender 2 Ltd. - owns 12,900,000 class B common shares, or approximately 38% of the total number of class A and class B common shares currently outstanding. The shares held by Contender 2 are by law issued and outstanding, so that the subsidiary may vote them. Therefore, Contender 2 currently is able to vote approximately o 79% of the total number of votes which may be cast by the holders of the class A and class B common shares on matters for which each class A common share has one-tenth of a vote, and o 38% of the total number of votes which may be cast by the holders of the class A and class B common shares on the "Business Combination" and director removal matters described above for which each class A common share has one vote. Rights Agreement Sea Containers has in place a shareholder rights agreement providing for rights to purchase series a junior participating preferred shares of Sea Containers (the "Rights"). The Rights are not currently exercisable and they are attached to and trade together with the class A and class B common shares on a one-to-one basis. A Right will be attached to each class A common share sold in this offering. The shareholder rights agreement will take effect not earlier than the tenth day after the first to occur of o the public announcement that a person or group has become an "Acquiring Person," that is, a person or group that has acquired beneficial ownership of shares carrying 20% or more of the total votes which may be cast at any general meeting of Sea Containers, and o the commencement or announcement of an intended tender offer or exchange offer for shares carrying 30% or more of the total votes which may be cast at any general meeting of Sea Containers. At that time, the Rights then attached to all outstanding class A and class B common shares will become separate securities, and each Right will entitle its holder to purchase one two-hundredth of a series a junior participating preferred share of Sea Containers at an exercise price of $180. The exercise price will be adjusted in the future to reflect stock splits and other changes to the class A and class B common shares. However, o from and after the date on which any person becomes an Acquiring Person, each holder of a Right other than the Acquiring Person may exercise the Right and receive, at the then current exercise price of the Right, that number of class A common shares, in the case of a Right which previously was attached to a class A common share, or that number of class B common shares, in the case of a Right 30 whichpreviously was attached to a class B common share, or other securities, cash or property, then having a market value of twice the exercise price; and o if, after the shareholder rights agreement takes effect, Sea Containers is acquired by consolidation, merger or amalgamation, or Sea Containers sells or otherwise transfers 50% or more of its consolidated assets or earning power, each holder of a Right, other than an Acquiring Person, may exercise the Right and receive, at the then current exercise price of the Right, an amount of the common equity of the acquiring company or its public company parent which at the time of such transaction would have a market value of twice the exercise price of the Right. The Rights will expire on June 19, 2008. However, the Sea Containers Board of Directors may redeem all but only all of the Rights sooner at a price of $0.025 per Right at any time before the close of business on the tenth day after the date on which a person becomes an Acquiring Person. The purpose of the Rights is to diminish the attractiveness of Sea Containers to persons who might otherwise have an interest in acquiring control of Sea Containers on unfair or coercive terms and to impede such persons from attempting to gain control of Sea Containers on such terms through a tender or exchange offer, by a proxy contest or by other means. Liquidation Rights In a liquidation, dissolution or winding-up of Sea Containers, holders of class A and class B common shares as a single class would participate equally per share in the assets remaining available for distribution to shareholders, after payment of Sea Containers' liabilities and the liquidation preferences on its preferred shares. The liquidation preference for the $7.25 Preferred Shares is currently $15,000,000 in the aggregate. Conversion Rights The class A common shares are not convertible into any other security. Each class B common share is convertible at any time without any additional payment into one class A common share. Miscellaneous Neither class A nor class B common shares have the benefit of sinking fund provisions or are redeemable or carry any preemptive or other rights to subscribe for additional shares, except that holders of class B common shares may convert their shares into class A common shares as described above. The holders of class A and class B common shares are not liable for any further calls or assessments. 31 Authorized Representative Sea Containers' authorized representative in the United States for this offering as required pursuant to Section 6(a) of the Securities Act, is Robert M. Riggs, 2 Wall Street, New York, New York 10005. Sea Containers has agreed to indemnify the authorized representative against liabilities under the Securities Act. Legal Matters Carter Ledyard & Milburn LLP, New York, New York, has passed upon legal matters relating to this offering for Sea Containers with respect to U.S. law, and Appleby Spurling & Kempe, Hamilton, Bermuda, has passed upon legal matters relating to this offering for Sea Containers with respect to Bermuda law. Robert M. Riggs, a member of Carter Ledyard & Milburn LLP, is a director of Sea Containers, and John D. Campbell, the recently retired senior counsel of Appleby Spurling & Kempe, is a director of Sea Containers. Experts The consolidated financial statements and related consolidated financial statement schedule incorporated in this prospectus by reference from Sea Containers' Annual Report on Form 10-K/A for the year ended December 31, 2002 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report which expresses an unqualified opinion and includes an explanatory paragraph referring to the adoption by Sea Containers of Statement of Financial Accounting Standards (`SFAS') No. 142, Goodwill and Other Intangible Assets, and SFAS No. 145, Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections, effective January 1, 2002, and SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS No. 137 and 138, effective January 1, 2001, which is incorporated herein by reference in the registration statement of which this prospectus is a part, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. Where You Can Find More Information This prospectus is a part of a registration statement on Form S-3, Registration No. 333-101574, which Sea Containers filed with the Securities and Exchange Commission under the Securities Act of 1933. We refer you to this registration statement for further information about Sea Containers and the class A common shares offered hereby. Sea Containers files annual, quarterly and special reports and other information with the Securities and Exchange Commission (Commission File Number 1-7560). These filings contain important information which does not appear in this prospectus. For further information about Sea Containers, you may read and copy these filings at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330, and may obtain copies of Sea Containers' filings from the public reference room by calling (202) 942-8090. You may also inspect these filings at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005, and the Pacific Exchange, 301 Pine Street, San Francisco, California 94104, or 233 Beaudry Avenue, Los Angeles, California 90012. 32 The SEC allows Sea Containers to "incorporate by reference" information into this prospectus, which means that we can disclose imported information to you by referring you to other documents which Sea Containers has filed or will file with the SEC. We are incorporating by reference in this prospectus o Sea Containers' Annual Report on Form 10-K for the fiscal year ended December 31, 2002, including Amendment No. 1 thereto dated May 23, 2003, o Sea Containers' Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2003, June 30, 2003, and September 30, 2003, o Sea Containers' Current Reports on Form 8-K bearing cover dates of April 11, 2003, June 25, 2003, June 27, 2003, July 9, 2003, July 15, 2003, July 18, 2003, and July 23, 2003, o the description of Sea Containers' class A common shares which appears in Amendment No. 1, dated June 11, 1998, to Sea Containers' Registration Statement on Form 8-A for the registration of the Class A common shares under Section 12(b) of the Securities Exchange Act of 1934, and o the description of the Rights which appears in Amendment No. 3, dated June 5, 1998, to Sea Containers' Registration Statement on Form 8-A for the registration of the Rights under Section 12(b) of the Securities Exchange Act of 1934. All documents which Sea Containers files with the SEC pursuant to Section 13(a), 13(c) or 15(d) of the Securities Exchange Act after the date of this prospectus and before the termination of this offering of class A common shares shall be deemed to be incorporated by reference in this prospectus and to be a part of it from the filing dates of such documents. Certain statements in and portions of this prospectus update and replace information in the above listed documents incorporated by reference. Likewise, statements in or portions of a future document incorporated by reference in this prospectus may update and replace statements in and portions of this prospectus or the above listed documents. We shall provide you without charge, upon your written or oral request, a copy of any of the documents incorporated by reference in this prospectus, other than exhibits to such documents which are not specifically incorporated by reference into such documents. Please direct your written or telephone requests to the Secretary, Sea Containers America Inc., 1155 Avenue of the Americas, New York, New York 10036 (telephone 212-302-5066). Sea Containers is a Bermuda company and is a "foreign private issuer" as defined in Rule 3b-4 under the Securities Exchange Act of 1934. As a result, (1) Sea Containers' proxy solicitations are not subject to the disclosure and procedural requirements of Regulation 14A under the Exchange Act, (2) transactions in Sea Containers' equity securities by its officers and directors are exempt from Section 16 of the Exchange Act, and (3) until November 4, 2002, Sea Containers was not required to make, and did not make, its SEC filings electronically, so that those filings are not available on the SEC's Web site. However, since that date, we have been making all filings with the SEC electronically. 33 ================================================================================ You should rely only on the information SEA contained in this prospectus. We have not CONTAINERS authorized anyone to provide you with LTD. information that is different. This prospectus does not contain an offer to sell or the solicitation of any offer to buy any securities other than the class A common 2,000,000 shares, or contain an offer to sell or the solicitation of an offer to buy the class A common shares in any circumstances which would Class A Common Shares be unlawful. By delivering this prospectus to you and by selling class A common shares with _____________________________ it, we do not mean to imply that no change has occurred in the affairs of Sea Containers PROSPECTUS since the date of this prospectus or that the information contained herein is correct as of any time after such date. _________, 2003 _______________ _____________________________ Citigroup ================================================================================ PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 16. Exhibits. See the Exhibit Index immediately following the signature pages below. II-1 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this amendment to registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hamilton, Bermuda on the 20th day of November, 2003. SEA CONTAINERS LTD. By: /s/ Edwin S. Hetherington -------------------------------- Edwin S. Hetherington Vice President, General Counsel and Secretary Pursuant to the requirements of the Securities Act of 1933, this amendment to registration statement has been signed below by the following persons in the capacities indicated on the 20th day of November, 2003. Signature Title --------- ----- * President and Director - ------------------------------------- (Principal Executive Officer) James B. Sherwood Senior Vice President - * Finance and Chief Financial - ------------------------------------- Officer (Principal Financial Daniel J. O'Sullivan and Accounting Officer) * Director - ------------------------------------- John D. Campbell II-2 Signature Title --------- ----- * Director - ------------------------------------- W. Murray Grindrod /s/ Robert M. Riggs Director and Authorized - ------------------------------------- Representative in the Robert M. Riggs United States * Director - ------------------------------------- Philip J.R. Schlee * Director - ------------------------------------- Charles N.C. Sherwood * Director - ------------------------------------- Michael J.L. Stracey *By: /s/ Robert M. Riggs ------------------- Robert M. Riggs Attorney-in-Fact II-3 EXHIBIT INDEX Exhibit Number Description - ------ ----------- 1 - Form of Sales Agreement between the Registrant and Citigroup Global Markets Inc. 4.1 - Schedule 2 to the Bye-Laws of the Registrant, as amended June 6, 2001(1) 4.2 - Rights Agreement between the Registrant and BankBoston, N.A., as Rights Agent, dated as of May 9, 1988, and amended and restated as of June 1, 1998.(2) 5 - Opinion of Appleby Spurling & Kempe.(3) 23.1 - Consent of Deloitte & Touche LLP. 23.2 - Consent of Appleby Spurling & Kempe (included in Exhibit 5).(3) 99 - Indemnification Agreement between the Registrant and Robert M. Riggs.(3) - ------------------- (1) Filed on May 6, 2002, as Exhibit 4.1 to the Registrant's Registration Statement on Form S-3, Registration No. 333-87826, and incorporated herein by reference. (2) Filed as Exhibit 6 to Amendment No. 3, dated June 5, 1998, to the Registrant's Registration Statement on Form 8-A for the registration of the Registrant's preferred share purchase rights under Section 12(b) of the Securities Exchange Act of 1934 (Commission File No. 1-7560) and incorporated herein by reference. (3) Previously filed as an exhibit to this Registration Statement. II-4 EX-1 3 ex1.txt FORM OF SALES AGREEMENT EXHIBIT 1 SEA CONTAINERS LTD. (a Bermuda company) 2,000,000 Class A Common Shares (par value $.01 each) SALES AGREEMENT November __, 2003 Citigroup Global Markets Inc. 388 Greenwich Street New York, New York 10013 Ladies and Gentlemen: Sea Containers Ltd., a company incorporated in Bermuda ("Sea Containers"), confirms its agreement with you with respect to the offer and sale by Sea Containers of up to 2,000,000 shares (the "Shares") of the class A common shares, par value $.01 each, of Sea Containers (the "Class A Shares"). Subject to the terms and conditions stated herein, Sea Containers hereby (i) appoints you as its agent for the purpose of selling any or all of the Shares in accordance with the provisions of paragraph 2(a) hereof, and (ii) agrees that whenever Sea Containers determines to sell Shares directly to you as principal for resale to others, it will enter into a Terms Agreement relating to such sale in accordance with the provisions of Section 2(b) hereof. Sea Containers has filed with the Securities and Exchange Commission (the "Commission") two registration statements on Form S-3 (Registration Nos. 333-5458 and 333-101574), both of which have been declared effective, relating to the offer and sale of the Shares by Sea Containers from time to time in accordance with Rule 415(a)(1)(x) under the Securities Act of 1933 (the "1933 Act"). Such registration statements, including the exhibits thereto, at the time Registration Statement No. 333-101574 became effective, are hereinafter called the "Registration Statements," and the combined Rule 429 prospectus constituting Part I of the Registration Statements is hereinafter called the "Prospectus," except that (a) if an amended Prospectus or Prospectus supplement is filed by Sea Containers pursuant to Rule 424(b) under the 1933 Act, the term "Prospectus" will mean the last such amendment or supplement, and (b) whenever the Company files any report pursuant to Section 13(a), 13(c) or 15(d) of the Securities Exchange Act of 1934 (the "1934 Act") which is incorporated by reference into the Registration Statements pursuant to Item 12 of Form S-3, the terms "Registration Statements" and "Prospectus" will include such report from and after the time it is filed with the Commission. Each Share includes a right (a "Right") to purchase, under certain circumstances, one two-hundredth of a series A junior participating preferred share of Sea Containers ("Preferred Share"), subject to adjustment. The Rights are being issued pursuant to a Rights Agreement dated as of May 9, 1988 and amended and restated as of June 1, 1998, between Sea Containers and EquiServe Trust Company N.A. (successor to BankBoston, N.A.), as rights agent (the "Rights Agreement"). SECTION 1. Representations and Warranties. Sea Containers represents and warrants to you as of the date of this Agreement, and will represent and warrant to you on each date when any post-effective amendment to Registration Statement No. 333-101574 becomes effective (an "Effective Date"), each Settlement Date (as defined in paragraph 2(b) below) and each time referred to in paragraphs 6(a) and 6(b) below (a "Representation Date"), as follows: (a) The Registration Statements comply in all material respects with the requirements of the 1933 Act and the rules of the Commission thereunder and do not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus complies in all material respects with the requirements of the 1933 Act and the rules of the Commission thereunder, and does not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the representations and warranties in this paragraph (a) do not apply to statements in or omissions from the Registration Statements or Prospectus made in reliance upon and in conformity with information furnished to Sea Containers in writing by you expressly for use in the Registration Statements or Prospectus, as provided in paragraph 7(a) of this Agreement. (b) The documents incorporated by reference in the Prospectus pursuant to Item 12 of Form S-3 under the 1933 Act, at the time they were or hereafter are filed with the Commission, complied or will comply, as the case may be, in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder, and when read together with the other information in the Prospectus, do not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading. (c) Sea Containers meets the registrant requirements for the use of Form S-3 for the Registration Statements, and the Registration Statements meet the requirements set forth in Rule 415(a)(1)(x) under the 1933 Act and comply in all other material respects with said Rule. (d) Sea Containers and its subsidiaries have been duly organized and are validly existing as companies or corporations, as the case may be, in good standing under the laws of their respective jurisdictions of organization, with full power and authority (corporate and other) to own, lease and operate their respective properties and conduct their respective businesses as described in the Prospectus; Sea Containers and its subsidiaries are in compliance with all laws requiring their qualification to do business as foreign corporations, and are in good standing, in all jurisdictions in which they respectively own or lease properties of a nature, or transact business of a type, that would require such qualification, except where the failure to comply with such laws would not have a material adverse effect on the condition (financial or otherwise), earnings, 2 business affairs or business prospects of Sea Containers and its subsidiaries considered as one enterprise (a "Material Adverse Effect"). (e) The outstanding capital shares of the subsidiaries of Sea Containers have been duly authorized and validly issued and are fully paid and nonassessable, and Sea Containers owns the outstanding capital shares of its subsidiaries, directly or indirectly, free and clear of all liens and encumbrances, except as disclosed in the Prospectus or except where such liens or encumbrances would not have a Material Adverse Effect. (f) To the knowledge of Sea Containers, Deloitte & Touche LLP, the accountants who certified the financial statements and supporting schedules included in or incorporated by reference into the Registration Statements and the Prospectus, are independent public accountants as required by the 1933 Act and the rules of the Commission. (g) The consolidated financial statements of Sea Containers and its consolidated subsidiaries included in or incorporated by reference into the Registration Statements and the Prospectus present fairly the financial position and results of operations of Sea Containers and its subsidiaries on a consolidated basis at the respective dates or for the respective periods to which they apply; such financial statements have been prepared in conformity with U.S. generally accepted accounting principles applied on a consistent basis throughout the respective periods involved and in compliance with the applicable accounting requirements of the 1933 Act, the 1934 Act and the rules of the Commission; and the supporting financial statement schedule or schedules included or incorporated by reference into the Registration Statements, when considered in relation to the basic consolidated financial statements taken as a whole, presents or present fairly in all material respects the information required to be stated therein. The summary consolidated financial data included or incorporated by reference in the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited consolidated financial statements included or incorporated by reference in the Registration Statements. (h) Since the date of the latest audited financial statements incorporated by reference in the Registration Statements and the Prospectus, except as otherwise stated in the Prospectus, (A) there has been no material adverse change in the condition (financial or otherwise), earnings, business affairs or business prospects of Sea Containers and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business (a "Material Adverse Change"), (B) except for this Agreement and the transactions contemplated hereby and as otherwise disclosed in the Prospectus, there have been no transactions entered into by Sea Containers or any of its subsidiaries, other than those in the ordinary course of business, which are material with respect to Sea Containers and its subsidiaries considered as one enterprise, and (C) there has been no dividend or distribution of any kind declared, paid or made by Sea Containers on any class of its common shares except ordinary quarterly cash dividends currently at the rate of $0.025 per Class A Share and $0.0225 per class B common share of Sea Containers ("Class B Share"). 3 (i) There is no action, suit or proceeding before or by any court or governmental agency or body, United States domestic ("domestic") or foreign (other than as disclosed in or by incorporation by reference into the Registration Statements), now pending or, to the knowledge of Sea Containers, threatened, against or affecting Sea Containers or any of its subsidiaries, which action, suit or proceeding is required to be disclosed in or incorporated by reference into the Registration Statements or might result in a Material Adverse Change, or might materially and adversely affect the sale of the Shares pursuant to this Agreement and any applicable Terms Agreement; and all pending or threatened legal or governmental proceedings to which Sea Containers or any of its subsidiaries is a party or of which any of their property is the subject and which are not described in or incorporated by reference into the Registration Statements or otherwise publicly disclosed prior to the date of this Agreement and any applicable Terms Agreement, including ordinary routine litigation incidental to their businesses, are, considered in the aggregate, not material to Sea Containers and its subsidiaries considered as one enterprise. (j) There are no contracts or documents of Sea Containers or any of its subsidiaries which are required to be filed or incorporated by reference as exhibits to the Registration Statements by the 1933 Act or by the rules of the Commission, or are required to be described in the Prospectus, which have not been so filed or incorporated by reference or described therein. (k) Neither Sea Containers nor any of its subsidiaries is in violation of its charter or bye-laws or other constituent documents, or is in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust or other instrument or agreement to which it is a party or by which it or its property may be bound or subject, except for such defaults, if any, that would not have a Material Adverse Effect. (1) The execution and delivery by Sea Containers of this Agreement and any applicable Terms Agreement, the performance by Sea Containers of, or its compliance with, its obligations under, this Agreement and any applicable Terms Agreement, the sale and delivery by Sea Containers of the Shares, the Rights and, upon exercise of the Rights, the Preferred Shares, and the other transactions contemplated in this Agreement, any applicable Terms Agreement or the Registration Statements, do not and will not result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of Sea Containers or any of its subsidiaries under, (1) any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which Sea Containers or any of its subsidiaries is a party or by which any of them is bound or to which any of their properties may be subject, except for such breaches, violations, defaults, liens, charges or encumbrances, if any, that would not have a Material Adverse Effect, or (2) the charter or bye-laws or other constituent documents of Sea Containers or any of its subsidiaries, or 4 (3) any statute, rule or regulation, or any decree, judgment or order of any court or governmental agency or body (domestic or foreign) having jurisdiction over Sea Containers or any of its subsidiaries or over their respective properties, except for such breaches, violations or defaults, liens, charges or encumbrances, if any, that would not have a Material Adverse Effect. (m) No consent, approval, authorization or order of, or registration, qualification or filing of or with, any court or governmental agency or body (domestic or foreign) is required for the performance by Sea Containers of its obligations under this Agreement and any applicable Terms Agreement or the consummation of the transactions contemplated by this Agreement or otherwise in connection with the valid sale and delivery by Sea Containers of the Shares, the Rights and, upon exercise of the Rights, the Preferred Shares except (1) such as have been or will be obtained or made under the 1933 Act, (2) such as have been or will be obtained from the Bermuda Monetary Authority, and (3) such as may be required under state securities laws in connection with the purchase and distribution of the Shares and Rights by you. (n) Sea Containers has full power and authority to sell the Shares as contemplated by this Agreement. (o) This Agreement, together with any applicable Terms Agreement, has been duly authorized, executed and delivered by Sea Containers and is a valid and binding agreement of Sea Containers, except that (i) the validity of the indemnification and contribution provisions of Sections 7 and 8 of this Agreement may be limited by public policy considerations, and (ii) the validity of Section 16 of this Agreement may be limited by the public policy of the State of New York, and with respect to the United States District Court for the Southern District of New York, may be subject to the discretion of the court pursuant to 28 U.S.C. Section 1404(a). (p) All of the outstanding capital shares of Sea Containers (including the Shares) have been duly authorized and validly issued, and are fully paid and nonassessable, and no holder thereof is subject to personal liability by reason of being such a holder; none of the outstanding capital shares of Sea Containers was issued in violation of the preemptive rights of any shareholder of Sea Containers; and the descriptions of the Shares and the Rights in the Prospectus are materially accurate and complete summaries. (q) The Rights Agreement has been duly authorized, executed and delivered by Sea Containers; the Rights have been duly authorized by Sea Containers, and the Rights attached to the Shares are validly issued; and the Preferred Shares issuable upon exercise of such Rights have been duly authorized by Sea Containers and validly reserved for issuance upon the exercise of the Rights and, when issued upon such exercise in 5 accordance with the terms of the Rights Agreement, will be validly issued, fully paid and nonassessable. (r) The Class A Shares (including the Shares) and the Rights associated therewith, are listed on the New York Stock Exchange and the Pacific Exchange. (s) There are no contracts, agreements or understandings between Sea Containers and any person other than Sea Containers, granting such person the right to require Sea Containers to include in the Registration Statements any securities (debt or equity) of Sea Containers owned or to be owned by such person. (t) Each of Sea Containers and its subsidiaries has good and marketable title to all properties and assets owned by it, free and clear of all liens, charges, encumbrances or restrictions, except such as (A) are otherwise described in the Prospectus or (B) are neither material in amount nor materially significant in relation to the business of Sea Containers and its subsidiaries considered as one enterprise. All of the leases and subleases material to the business of Sea Containers and its subsidiaries, considered as one enterprise, and under which Sea Containers or any subsidiary holds properties, are in full force and effect, and neither Sea Containers nor any subsidiary has any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of Sea Containers or any subsidiary under any of the leases or subleases mentioned above, or affecting or questioning the rights of Sea Containers or such subsidiaries to the continued possession of the leased or subleased premises under any such lease or sublease. (u) Except as disclosed in the Registration Statements, or except as would not individually or in the aggregate have a Material Adverse Effect, each of Sea Containers and its subsidiaries owns, possesses or has obtained all material governmental licenses, permits, certificates, consents, orders, approvals and other authorizations necessary to own or lease, as the case may be, and to operate its properties and to carry on its business as presently conducted, and neither Sea Containers nor any subsidiary has received any notice of proceedings relating to revocation or modification of any such licenses, permits, certificates, consents, orders, approvals or authorizations. (v) Except as disclosed in the Registration Statements or except as would not individually or in the aggregate have a Material Adverse Effect, (A) Sea Containers and its subsidiaries are in compliance with all applicable Environmental Laws, (B) Sea Containers and its subsidiaries have all permits, authorizations and approvals required under any applicable Environmental Laws and are in compliance with their requirements, (C) there are no pending or threatened Environmental Claims against Sea Containers or any of its subsidiaries, and (D) there are no circumstances with respect to any property or operations of Sea Containers or its subsidiaries that could reasonably be anticipated to form the basis of an Environmental Claim against Sea Containers or its subsidiaries. "Environmental Law" means any United States (or other applicable jurisdiction's) federal, state, local or municipal statute, law, rule, regulation, ordinance, code, policy or rule of common law and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, relating to the environment, health, safety or any chemical, material or substance, exposure to which is 6 prohibited, limited or regulated by any governmental authority, and "Environmental Claims" means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigations or proceedings relating in any way to any Environmental Law. (w) Sea Containers and its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management's general or specific authorization, (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with U.S. generally accepted accounting principles and to maintain accountability for assets, (C) access to assets is permitted only in accordance with management's general or specific authorization and (D) the recorded accountability for assets is compared in all material respects with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (x) Sea Containers has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-14 under the 1934 Act), which (i) are designed to ensure that material information relating to Sea Containers, including its consolidated subsidiaries, is made known to Sea Containers' principal executive officer and its principal financial officer by others within those entities, particularly during the periods in which the periodic reports required under the 1934 Act are being prepared, (ii) have been evaluated for effectiveness as of the end of the period covered by Sea Containers' most recent annual or quarterly report filed with the Commission, and (iii) are effective in all material respects to perform the functions for which they were established. Based on the evaluation of Sea Containers' disclosure controls and procedures described above, Sea Containers is not aware of (a) any significant deficiency in the design or operation of internal controls which could adversely affect Sea Containers' ability to record, process, summarize and report financial data or any material weaknesses in internal controls or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in Sea Containers' internal controls. Since the most recent evaluation of Sea Containers' disclosure controls and procedures described above, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls. (y) Sea Containers and its officers and directors are in compliance with applicable effective provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the "Sarbanes-Oxley Act"), and are actively taking steps to ensure that they will be in compliance with other applicable provisions of the Sarbanes-Oxley Act upon their effectiveness. (z) Neither Sea Containers nor any affiliate of Sea Containers has taken, nor will Sea Containers or any affiliate take, directly or indirectly, any action which is designed to or which has constituted or which would be expected to cause or result in stabilization or manipulation of the price of any security of Sea Containers to facilitate the sale or resale of the Shares. 7 (aa) Sea Containers and its subsidiaries have filed all necessary U.S. federal, state and foreign income tax returns and have paid all taxes shown by such returns which are due and payable, and any related or similar assessment, fine or penalty levied against any of them, except in each case as may be being contested in good faith and by appropriate proceedings. Sea Containers and its subsidiaries have made adequate charges, accruals and reserves in the applicable financial statements described in the Registration Statements and Prospectus in respect of all U.S. federal, state and foreign income taxes for all periods as to which the tax liability of Sea Containers or any of its subsidiaries has not been finally determined. SECTION 2. Authorization for Offers; Sales as Agent; Purchases as Principal; Suspensions of Offers. (a) Sales as Agent. On the basis of the representations and warranties herein contained, and subject to the terms and conditions herein set forth, you agree, as agent for Sea Containers, to use your best efforts to sell the Shares upon the terms and conditions set forth in the Prospectus and hereinafter provided. Sea Containers may on any business day deliver notice to you by telephonic communication and confirmed by any standard form of written telecommunication (the "Authorization") confirming the minimum price at which you may sell the Shares and the limitation, if any, on the number of Shares which may be sold at such price, and the terms of such Authorization shall remain in effect until receipt by you of a subsequent Authorization which modifies the terms of the previously delivered Authorization. The terms contained in the most recently delivered Authorization may be modified subsequent to the delivery thereof by telephonic or other form of communication, provided that you shall not be bound by, or subject to any liability with respect to, such modification until a reasonable time after receipt by you from Sea Containers of a subsequent Authorization containing such modifications. Sea Containers reserves the right, in its sole discretion, to suspend sales of the Shares commencing at any time for any period of time or permanently. Upon receipt of instructions from Sea Containers, you will forthwith suspend such sales for Sea Containers until such time as Sea Containers has advised you that sales may be resumed. Sea Containers agrees to pay you a commission in respect of agency transactions in the amount of ten cents per Share. (b) Purchases as Principal. Each sale of Shares to you as principal other than a block transaction will be made in accordance with the terms of this Agreement and a separate agreement to be entered into between you and Sea Containers which will provide for the sale of such Shares to, and the purchase and reoffering thereof by, you. Each such separate agreement (which will be substantially in the form of Exhibit A hereto and which may take the form of an exchange of any standard form of written telecommunication between you and Sea Containers) is herein referred to as a "Terms Agreement." Your commitment to purchase Shares pursuant to any Terms Agreement will be deemed to have been made on the basis of the representations and warranties of Sea Containers herein contained and will be subject to the terms and conditions herein set forth. Each Terms Agreement will specify the number of Shares to be purchased by you pursuant thereto, the price to be paid to Sea Containers for such Shares, the initial public 8 offering price, if any, at which the Shares are proposed to be reoffered, and the date, time and place of delivery of and payment for such Shares (the "Settlement Date"). Such Terms Agreement will also specify any requirements for opinions of counsel and letters from Deloitte & Touche LLP pursuant to Section 5 hereof. (c) Manner of Sales. (1) The sale of the Shares through you as agent or by you as principal may be effected from time to time by means of (A) ordinary brokers' transactions and transactions in which the broker-dealer solicits purchasers, (B) block transactions (which may involve crosses) in accordance with the rules of any exchange on which the Class A Shares may be admitted to trading (an "Exchange"), in which you may attempt to sell Shares as agent but may purchase and resell all or a portion of the block as principal, (C) "fixed price offerings" off the floor of the Exchanges, or "exchange distributions" and "special offerings" of Shares under the rules of the Exchanges, (D) short sales, (E) a combination of any such methods of sale, in each case on the Exchanges, in the over-the-counter market, through negotiated transactions or otherwise, or (F) any other method permitted pursuant to applicable law. Such transactions may be effected by you at market prices prevailing at the time of sale, at prices related to such prevailing market prices, at negotiated prices or at fixed prices. You may effect such transactions by selling Shares to or through other broker-dealers, and such other broker-dealers may receive compensation in the form of underwriting discounts, concessions or commissions from you and/or commissions from the purchasers of Shares for whom they may act as agent (which discounts, concessions or commissions will not exceed those customary in the types of transactions involved). In connection with the sale of the Shares, you may also receive commissions from purchasers of Shares for whom you may act as agent. (2) Sea Containers acknowledges that nothing in this Agreement will prohibit you from (A) acting as broker for the sale of shares of Sea Containers by customers other than Sea Containers, (B) soliciting the sale of shares of Sea Containers through you as broker for the seller, soliciting the sale of shares of Sea Containers to you as principal and soliciting offers to buy shares, (C) purchasing shares of Sea Containers otherwise than pursuant to this Agreement, and (D) offering and selling as principal for your own account shares of Sea Containers which you have purchased otherwise than pursuant to this Agreement. (d) Procedures. Administrative procedures respecting the sale of Shares will be agreed upon from time to time by you and Sea Containers, and as of the date of this Agreement, the administrative procedures relating to transactions in your capacity as agent pursuant to paragraph 2(a) hereof are set forth in Exhibit B hereto (the "Procedures"). You and Sea Containers agree to perform the respective duties and obligations specifically provided to be performed by you and Sea Containers herein and in the Procedures. (e) Delivery. The documents required to be delivered by Sections 5 and 6 hereof will be delivered at the office of your counsel, Shearman & Sterling LLP at 599 Lexington Avenue, New York, New York 10022 on the dates provided in Sections 5 and 6, or at such other places or times as you and Sea Containers may agree upon. 9 SECTION 3. Covenants of the Sea Containers. Sea Containers covenants with you as follows: (a) Sea Containers will advise you immediately and confirm such advice in writing: (i) of Sea Containers' intention to amend or supplement the Registration Statements or the Prospectus (otherwise than by the filing of periodic reports pursuant to Section 13(a) of the 1934 Act), and Sea Containers will furnish you with copies of any such amendment or supplement a reasonable time in advance of filing, and will not file such amendment or supplement without your consent, which consent shall not be unreasonably withheld; (ii) of the filing of any document incorporated by reference in the Registration Statements, will furnish you with copies of any such document concurrently with such filing and promptly thereafter will make available to you for consultation appropriate personnel of Sea Containers so as to permit you to conduct due diligence with respect to such filing; (iii) of the receipt of any comments from the Commission with respect to the Registration Statements or the Prospectus or the request by the Commission for any amendment to the Registration Statements or any supplement to the Prospectus or for additional information relating to the Registration Statements or the Prospectus or any document incorporated by reference into the Prospectus; (iv) of the filing or effectiveness of any amendment or supplement to Registration Statement No. 333-101574 or the Prospectus; and (v) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statements or of the suspension of the qualification of the Shares for offering or sale in any jurisdiction or the institution or threat of any proceeding for any such purposes. Sea Containers will use its best efforts to prevent the issuance of any such order or of any order suspending such qualification and to obtain as soon as possible its lifting at the earliest possible moment, if issued. (b) If at any time when the Prospectus is required by the 1933 Act to be delivered in connection with sales of the Shares, any event shall occur or condition exist as a result of which it is necessary, in the reasonable opinion of counsel for Sea Containers, to amend or supplement the Prospectus so that it will not include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, or if it shall be necessary, in the reasonable opinion of such counsel at any such time to amend or supplement the Registration Statements or the Prospectus in order to comply with the requirements of the 1933 Act or the rules of the Commission, Sea Containers will give you immediate notice to cease the sale of the Shares in your capacity as agent and to cease sales of any Shares you may then own as principal, and Sea Containers will, subject to subsection 3(a)(i), if applicable, promptly prepare and file with the Commission such amendment or supplement, whether by filing documents pursuant to 10 the 1934 Act, the 1933 Act or otherwise, as may be necessary to correct such untrue statement or omission or to make the Registration Statements comply with such requirements. (c) Promptly after Sea Containers releases to the general public quarterly financial statement information of OEH, interim financial statement information with respect to any unanticipated charge or gain or, upon your request, any other interim financial statement information related to Sea Containers with respect to each of the first three quarters of any fiscal year, or preliminary financial statement information with respect to any fiscal year, Sea Containers will furnish to you copies of such documents and will file with the Commission a Form 8-K under the 1934 Act that includes (or Sea Containers shall, subject to subsection 3(a)(i), if applicable, otherwise cause the Registration Statements to be amended and the Prospectus to be supplemented to include or incorporate by reference) such financial statement information and, if and to the extent relevant, corresponding information for the comparable period of the preceding fiscal year; provided that if on the date of such release, and for so long thereafter as, (i) all sales of Shares previously made pursuant to paragraph 2(a) of this Agreement have settled, (ii) you are not obligated to purchase Shares under a Terms Agreement, and (iii) you are not offering for sale any Shares which you are holding as principal and which you acquired under a Terms Agreement, then Sea Containers will not be obligated to file such a Form 8-K or otherwise amend or supplement the Prospectus. (d) Promptly after Sea Containers releases to the general public audited financial information of Sea Containers for any fiscal year, Sea Containers will furnish to you copies of such documents and will, subject to subsection 3(a)(i), if applicable, cause the Registration Statements to be amended and the Prospectus to be supplemented, whether by the filing of documents pursuant to the 1934 Act, the 1933 Act or otherwise, to include or incorporate by reference such audited financial statements and the report or reports, and consent or consents to such inclusion or incorporation by reference, of the independent accountants with respect thereto; provided that if on the date of such release, and for so long thereafter as, (i) all sales of Shares previously made pursuant to paragraph 2(a) of this Agreement have settled, (ii) you are not obligated to purchase Shares under a Terms Agreement, and (iii) you are not offering for sale any Shares which you are holding as principal and which you acquired under a Terms Agreement, then Sea Containers will not be obligated so to amend or supplement the Prospectus. (e) Sea Containers, during the period when the Prospectus is required to be delivered under the 1933 Act in connection with the offering or sale of the Shares, (i) will file promptly all documents required to be filed by it with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the 1934 Act, and (ii) will obtain the written consent of Sea Containers' independent accountants for the incorporation by reference in the Registration Statements of their reports on the audited financial statements contained in Sea Containers' annual reports on Form 10-K under the 1934 Act. (f) Sea Containers will furnish to you such copies of the Prospectus and all amendments and supplements thereto, in each case as soon as available and in such quantities as you may reasonably request. 11 (g) Sea Containers will make generally available to its securityholders as soon as practicable earnings statements (in form complying with the provisions of Rule 158 under the 1933 Act) with respect to each sale of Shares under a Terms Agreement. (h) Until this Agreement is terminated, Sea Containers will furnish to you, as soon as available, (i) a copy of each of its annual reports to shareholders, (ii) a copy of each other document mailed by Sea Containers to its shareholders, (iii) each press release or announcement issued by Sea Containers, and (iv) from time to time, such other information concerning Sea Containers and its subsidiaries as you may reasonably request. (i) Sea Containers will cooperate with you in qualifying the Shares, including the Rights associated therewith, for offering and sale under the laws of such jurisdictions as you shall reasonably designate and will cooperate with you in continuing such qualifications in effect so long as required for the distribution by you of such Shares and Rights; provided that in connection with such qualification, Sea Containers will not be required to qualify as a foreign corporation or a securities dealer in any jurisdiction, or to consent to the service of process under the laws of any jurisdiction (except service of process with respect to the offering and sale of the Shares) or to take any action which would or could subject Sea Containers to taxation in any jurisdiction where it is not now so subject. Sea Containers will execute such statements and reports you prepare as may be required by the laws of each jurisdiction in which the Shares and Rights are being qualified. Sea Containers will also supply you with such information for determining the legality of the Shares and Rights for investment under the laws of such jurisdictions as you may reasonably request. (j) Between the date of any Terms Agreement and the Settlement Date with respect to such Terms Agreement, Sea Containers will not, without your prior consent, offer or sell, or enter into any agreement to sell, any Class A Shares or securities convertible into or exchangeable for Class A Shares (other than the Shares and Rights which are to be sold pursuant to such Terms Agreement), except as may otherwise be provided in any such Terms Agreement and except for (i) Class A Shares issuable upon the exercise of employee stock options granted by Sea Containers in the normal course of its business, and (ii) Class A Shares issuable upon conversion of outstanding Class B Shares and any outstanding preferred shares. SECTION 4. Payment of Expenses. Sea Containers will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation and filing of the Registration Statements and all amendments thereto, (ii) the preparation, issuance and delivery of the certificates evidencing the Shares, (iii) the fees and disbursements of Sea Containers' accountants and counsel, (iv) the qualification of the Shares under securities laws in accordance with the provisions of Section 3(i), including filing fees and the reasonable fees and disbursements of your counsel in connection with such qualification and in connection with the preparation of any blue sky survey, (v) any fees, taxes and charges imposed by Bermuda on the sale of the Shares, (vii) the printing and delivery to you of copies of the Registration Statements and all amendments thereto, and copies of the Prospectus and any amendments or supplements thereto, (viii) the reproduction and delivery of copies of the blue sky survey, and (ix) the fees and expenses, if any, incurred with respect to any filing by you with the National Association of Securities Dealers, Inc. in connection with the offer and sale of the Shares. 12 SECTION 5. Conditions of Obligations. Your obligations to sell the Shares as agent of Sea Containers and your obligations to purchase Shares pursuant to any Terms Agreement will be subject to the accuracy of the representations and warranties on the part of Sea Containers herein on the most recent Effective Date, any applicable Representation Date and any applicable Settlement Date, to the performance and observance by Sea Containers of all covenants and agreements herein contained on its part to be performed and observed, and to the following additional conditions precedent: (a) The Registration Statements are effective under the 1933 Act, and no stop order suspending the effectiveness of the Registration Statements or the suspension of the qualification of the Shares for offering or sale in any jurisdiction shall have been issued and not lifted, and no proceedings for such purposes shall have been instituted and continue to be pending, or, to your knowledge or the knowledge of Sea Containers, shall be threatened, and all requests for additional information by the Commission shall have been complied with to your reasonable satisfaction. (b) At each Settlement Date with respect to any Terms Agreement, if called for by such Terms Agreement, you shall have received: (1) The opinion, dated as of such Settlement Date, of Carter Ledyard & Milburn LLP, United States counsel to Sea Containers, in form reasonably satisfactory to you and your counsel, to the effect that: (i) To such counsel's knowledge, except as described in the Prospectus, there are no legal or governmental proceedings pending or threatened in the United States to which Sea Containers or any of its subsidiaries is a party or to which any of its or their properties is subject and which are required to be disclosed in the Registration Statements or the Prospectus; (ii) The execution and delivery by Sea Containers of this Agreement and the Terms Agreement, the performance by Sea Containers of, or its compliance with, its obligations under this Agreement and the Terms Agreement, and the consummation of the transactions contemplated herein and in the Registration Statements, including the sale and delivery by Sea Containers of the Shares, the Rights and the Preferred Shares issuable upon the exercise of such Rights (assuming such Preferred Shares were issued on the date of such opinion), do not and will not result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of Sea Containers under, (A) any indenture, mortgage, deed of trust, loan agreement or any other agreement or instrument which is described or referred to in the Prospectus, or is filed or incorporated by reference as an exhibit to the Registration Statements and to which Sea Containers or any of its subsidiaries is a party or by which they are bound or to which any of their property or assets is subject, or (B) any United States federal or New York statute, rule or regulation or any decree, judgment or order, known to such counsel, of any United States federal or New York court or governmental agency or body specifically applicable to Sea Containers or any of its subsidiaries 13 or any of their properties, except for such breaches, violations, defaults, liens, charges or encumbrances that would not have a Material Adverse Effect; (iii) No consent, approval, authorization or order of, or registration or qualification or filing of or with, any United States federal or New York governmental agency or Bermuda governmental body or, to the best of such counsel's knowledge, any United States federal or New York court is required for the performance by Sea Containers of its obligations under this Agreement and the Terms Agreement, or the consummation of the transactions contemplated by this Agreement in connection with the valid sale and delivery by Sea Containers of the Shares, the Rights associated therewith and the Preferred Shares issuable upon the exercise of such Rights, except, in the case of the Shares and the Rights associated therewith, (a) such as have been obtained or made under the 1933 Act, and (b) such as may be required under state securities laws in connection with the purchase and distribution of the Shares and Rights by you, and except in the case of the Preferred Shares issuable upon the exercise of the Rights associated with the Shares, (a) such as may be required under the 1933 Act or the 1934 Act, and (b) such as may be required under state securities laws in connection with the issuance of the Preferred Shares upon the exercise of such Rights; (iv) The Registration Statements are effective under the 1933 Act and, to the best of such counsel's knowledge, no stop order suspending the effectiveness of the Registration Statements is in effect and no proceedings for that purpose have been initiated or are pending or threatened; (v) (I) The Registration Statements, the Prospectus and each amendment or supplement thereto comply as to form in all material respects with the requirements of the 1933 Act and the rules of the Commission thereunder; (II) each document incorporated by reference in the Registration Statements and Prospectus, at the time such document was initially filed with the Commission, complied as to form in all material respects with the requirements of the 1934 Act and the rules of the Commission thereunder; (III) the descriptions in the Registration Statements and the Prospectus of contracts and other documents, of United States federal and New York statutes, and of legal and governmental proceedings in the United States, are accurate summaries in all material respects and fairly present the information required to be given; (vi) such counsel does not know of any contracts or documents required to be described in the Registration Statements or Prospectus, or required to be filed as exhibits to the Registration Statements or incorporated by reference in the Registration Statements or Prospectus, which are not described or filed or incorporated by reference as required, it being understood that such counsel need express no opinion as to the financial statements and related notes and schedule or schedules or other financial information and statistical data in the Registration Statements or the Prospectus; 14 (vii) The Class A Shares, (including the Shares) and the Rights associated therewith are listed on the New York Stock Exchange, Inc. and the Pacific Exchange; (viii) Sea Containers is eligible to use Form S-3 for the registration under the 1933 Act of the offer and sale of the Shares as described in the Prospectus, and the Registration Statements meet the requirements set forth in Rule 415(a)(1)(x) under the 1933 Act; (ix) Sea Containers is not an "investment company" or an entity "controlled" by an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended; (x) Orient-Express Hotels Inc. has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware; and (xi) Sea Containers' submission (pursuant to Section 16 of this Agreement) to the personal jurisdiction of the courts of the State of New York in the County of New York or the United States District Court for the Southern District of New York with respect to any action or proceeding arising out of, or based on, this Agreement is valid and enforceable against Sea Containers, and Sea Containers' appointment of Sea Containers America Inc. and Corporation Service Company as the designees, appointees and agents upon whom process may be served in any such action or proceeding is also valid and enforceable against Sea Containers. The enforceability of such submission and appointment is subject to, and may be limited by, (i) bankruptcy, insolvency, liquidation, receivership, moratorium, reorganization, fraudulent conveyance or other similar laws relating to or affecting the enforcement of the rights of creditors, (ii) general principles of equity, and (iii) the discretion of United States federal or New York State courts with respect to venue, as provided in 28 U.S.C. ss. 1404(a) and New York CPLR ss. 510, respectively. Carter Ledyard & Milburn LLP may limit such opinion to the laws of the United States of America and the State of New York and the General Corporation Law of Delaware and may rely as to factual matters on certificates obtained from officers of Sea Containers and public officials. The opinion of Carter Ledyard & Milburn LLP will also state that, while such counsel have not made any independent investigation of, are not passing upon and do not assume responsibility for, the accuracy or completeness of the statements contained in the Registration Statements or the Prospectus (other than as indicated in clause (III) of paragraph (v) above), on the basis of discussions regarding the business and affairs of Sea Containers and such counsel's familiarity with certain matters relating to such business and affairs as a result of having served as United States counsel for Sea Containers in connection with certain previous transactions, nothing has come to their attention that would lead them to believe that the Registration Statements (other than the financial statements and notes and other financial and statistical data included in the Registration Statements and Prospectus, as to which such counsel expresses no view), at 15 the most recent Effective Date (or, if, after such Effective Date, Sea Containers files any documents pursuant to Section 13(a), 13(c) or 15(d) of the 1934 Act which are incorporated by reference into the Registration Statements, at the time of the most recent such filing), contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus (other than the financial statements and notes and other financial and statistical data included in the Registration Statements and Prospectus, as to which such counsel expresses no view), on the most recent Effective Date, or on the appropriate Settlement Date or Representation Date, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (2) The opinion, dated as of such Settlement Date, of Appleby Spurling & Kempe, Bermuda counsel to Sea Containers, in form reasonably satisfactory to you and your counsel, to the effect that: (i) Each of Sea Containers, Orient-Express Hotels Ltd., Sea Containers SPC Ltd.and Contender 2 Ltd. is an exempted company duly incorporated with limited liability, validly existing and in good standing under the laws of Bermuda; (ii) Sea Containers has all requisite corporate power and authority under its Constitutional Documents (as defined) to own, lease, manage and operate its properties and to conduct its business as described in the Registration Statements and the Prospectus and to enter into and perform its obligations under this Agreement [and the Terms Agreement]; (iii) This Agreement [and the Terms Agreement] have been duly authorized, executed and delivered by Sea Containers and constitute valid and binding obligations of Sea Containers enforceable against Sea Containers in accordance with their terms; (iv) The issued and outstanding Class A Shares have been duly authorized and validly issued and are fully paid and non-assessable; (v) None of the outstanding Class A Shares were issued in violation of any pre-emptive or other similar rights of any security holder of Sea Containers pursuant to the Constitutional Documents (as defined); (vi) The Shares have been duly authorized for sale and delivery to you pursuant to the terms of this Agreement and the Terms Agreement, and when sold and delivered by Sea Containers pursuant to the terms of this Agreement and the Terms Agreement, against payment of the consideration set forth in the Terms Agreement, will be validly issued, fully paid and non-assessable, and no holder of the Shares is or will be subject to personal liability with respect to the debts or obligations of Sea Containers solely by reason of being such a holder. 16 (vii) The Rights Agreement has been duly authorized, executed and delivered by Sea Containers, the Rights have been duly authorized by Sea Containers, the Rights attached to the Shares are validly issued, and the Preferred Shares issuable upon the exercise of the Rights have been duly authorized by Sea Containers and validly reserved for issuance upon the exercise of the Rights and, when issued upon such exercise in accordance with the terms of the Rights Agreement, will be validly issued, fully paid and non-assessable; (viii) Based solely on the results of the Litigation Search (as defined), there is not pending any action, suit, proceeding, inquiry or investigation in Bermuda, to which Sea Containers, Orient-Express Hotels Ltd., Sea Containers SPC Ltd.or Contender 2 Ltd. is a party or to which the property of Sea Containers, Orient-Express Hotels Ltd., Sea Containers SPC Ltd. or Contender 2 Ltd. is subject, before or brought by any court or governmental agency or body in Bermuda, which could reasonably be expected to result in a Material Adverse Effect, or which could reasonably be expected to materially and adversely affect the properties or assets thereof or the consummation of the transactions contemplated by this Agreement or the performance by Sea Containers of its obligations hereunder. (ix) The information in the Prospectus under the captions "Risk Factors -- Other Risk Factors -- We cannot assure you that a judgment of a United States court for liabilities under U.S. securities laws would be enforceable in Bermuda, or that an original action can be brought in Bermuda against Sea Containers for liabilities under U.S. securities laws," "Risk Factors -- Other Risks -- Sea Containers' directors and officers may control the outcome of most matters submitted to a vote and of its shareholders," "Risk Factors -- Other Risks -- Provisions in Sea Containers' charter documents may discourage potential acquisitions of Sea Containers, even those which the holders of a majority of its class A common shares might favor," and "Description of Common Shares," to the extent such information constitutes matters of Bermuda law, is accurate in all material respects. (x) The execution and delivery by Sea Containers of this Agreement [and the Terms Agreement], the performance by Sea Containers of, or its compliance with, its obligations under this Agreement [and the Terms Agreement], and the consummation of the transactions contemplated herein and the Terms Agreement or in the Registration Statements, including the sale and delivery by Sea Containers of the Shares, the Rights and the Preferred Shares issuable upon the exercise of such Rights (assuming such Preferred Shares were issued on the date of such opinion), do not and will not result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of Sea Containers under (A) any indenture, mortgage, deed of trust, loan agreement or any other agreement or instrument which is described or referred to in the Prospectus, or is filed or incorporated by reference as an exhibit to the Registration Statements, and to which Sea Containers, Orient-Express Hotels Ltd., Sea Containers SPC Ltd.or Contender 2 Ltd. is a party or by which they are bound or to which any of their property or assets is subject, except for such breaches, violations, defaults, liens, charges or encumbrances, if any, that would not have a Material Adverse Effect), 17 (B) any requirement of any law or regulation of Bermuda, and (C) the Constitutional Documents; (xi) No consent, approval, authorization or order of, or registration or qualification or filing of or with, any Bermuda governmental agency or body or, to the best of such counsel's knowledge, any Bermuda court is required for the performance by Sea Containers of its obligations under this Agreement and the Terms Agreement, including the sale and delivery by Sea Containers of the Shares, the Rights associated therewith and the Preferred Shares issuable upon the exercise of such Rights, except such as have been obtained from the Bermuda Monetary Authority; and (xii) The choice of the laws of the State of New York as the proper law to govern this Agreement and the Terms Agreement is a valid choice of law under Bermuda law, and such choice of law would be recognized, upheld and applied by the courts of Bermuda as the proper law of this Agreement and the Terms Agreement in proceedings brought before them in relation to this Agreement and the Terms Agreement, provided that (1) the point is specifically pleaded; (2) such choice of law is valid and binding under the laws of the state of New York; and (3) recognition would not be contrary to public policy as that term is understood under Bermuda law. (xiii) There are no Bermuda capital, stamp or other issuance taxes or duties payable in Bermuda in connection with the issuance, sale and delivery of the Shares to you, or the consummation of any of the other transactions contemplated in this Agreement [and the Terms Agreement]. (xiv) The irrevocable and unconditional submission by Sea Containers to the jurisdiction of any state or federal court in New York under this Agreement is not contrary to Bermuda law and would be recognised by the courts of Bermuda as a legal, valid and binding submission, provided that such submission is accepted by such courts and is legal, valid and binding under the laws of the State of New York. (xv) A final and conclusive judgment of a competent foreign court against Sea Containers based on this Agreement, and the transactions contemplated thereby (other than a court of jurisdiction to which the Judgment (Reciprocal Enforcement) Act 1958 applies, and it does not apply to the courts of New York) under which a sum of money is payable (not being a sum payable in respect of taxes or other charges of a like nature, in respect of a fine or other penalty, or in respect of multiple damages as defined in The Protection of Trading Interests Act 1981) may be the subject of enforcement proceedings in the Supreme Court of Bermuda under the common law doctrine of obligation by action on the debt evidenced by the judgment of such competent foreign court. A final opinion as to the availability of this remedy should be sought when the facts surrounding the foreign court's judgment are known, but, on general principles, one would expect such proceedings to be successful provided that: 18 (a) the court which gave the judgment was competent to hear the action in accordance with private international law principles as applied in Bermuda; and (b) the judgment is not contrary to public policy in Bermuda, has not been obtained by fraud or in proceedings contrary to natural justice and is not based on an error in Bermuda law. Enforcement of such a judgment against the assets in Bermuda may involve the conversion of the judgment debt into Bermuda dollars, but the Bermuda Monetary Authority's policy is to give the consents necessary to enable recovery in the currency of the obligation. Such counsel has no reason to believe that as of the date of the opinion the enforcement of a foreign judgment relating to the indemnification and contribution provisions set forth in Sections 7 and 8 of this Agreement would contravene Bermuda public policy or laws. (3) The opinion, dated as of such Settlement Date, of Edwin S. Hetherington, Vice President, General Counsel and Secretary of Sea Containers, in form reasonably satisfactory to you and your counsel, to the effect that: (i) Great North Eastern Railway Ltd., Sea Containers U.K. Ltd. and Sea Containers British Isles Ltd. are companies duly incorporated, validly existing and in good standing under the laws of England. (ii) The issued shares of capital stock of each significant subsidiary of Sea Containers (as defined in Regulation S-X of the Securities and Exchange Commission) have been duly authorized and validly issued, are fully paid and non-assessable and except as otherwise disclosed in the Prospectus, are owned beneficially by Sea Containers, either directly or through wholly-owned subsidiaries of Sea Containers, free and clear, to the best of such counsel's knowledge, of any pledge, lien, encumbrance, security interest, restriction on voting or transfer, preemptive rights or other defect or claim of any third party, except that (a) the shares of Silja Oyj Abp and the preference shares of Sea Containers SPC Ltd. are pledged as security for bank loans to Sea Containers and its subsidiaries, (b) the class A shares of Sea Containers SPC Ltd. have limited voting rights and are not owned by Sea Containers or any of its subsidiaries, and (c) the shares of Great North Eastern Railway Ltd. are subject to restrictions on transfer imposed by the U.K. government. (iii) The execution and delivery by Sea Containers of this Agreement, the performance by Sea Containers of, or its compliance with, its obligations under this Agreement and the consummation of the transactions contemplated in this Agreement or in the Registration Statements, including the offering, issuance or sale by Sea Containers of the Shares, the Rights and the Preferred Shares issuable upon the exercise of such Rights (assuming such Preferred Shares were issued on the date of such opinion) do not and will not result in a breach or 19 violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of Sea Containers or any of its subsidiaries under, (A) any indenture, mortgage, deed of trust, loan agreement or any other agreement or instrument which is described or referred to in the Prospectus, or is filed or incorporated by reference as an exhibit to Registration Statement No. 333-101574 and to which Sea Containers or any of its subsidiaries is a party or by which they are bound or to which any of their property or assets is subject, or (B) any provision of the Memorandum of Association, Certificate of Incorporation, By-laws or other constituent documents of Sea Containers or, to the best of such counsel's knowledge, any significant subsidiary of Sea Containers or (C) any applicable law, statute, rule, regulation, judgment, order, writ or decree, known to such counsel, of any government, government instrumentality or court in the United Kingdom having jurisdiction over Sea Containers or any of its subsidiaries or any of their assets, properties or operations; and (iv) To the best of such counsel's knowledge, there are no legal or governmental proceedings in England pending or threatened to which Sea Containers or any of its subsidiaries is a party or to which any of its or their property is subject, except as otherwise disclosed in the Prospectus and except for such proceedings that, individually or in the aggregate, would not have a Material Adverse Effect. Such counsel may limit such opinion to the laws of the United Kingdom. The opinion of such counsel will also state as follows: "In my capacity as the Vice President, General Counsel of Secretary of Sea Containers, I participated in the preparation of the Registration Statements and the Prospectus. In the course of those preparations, I have participated in conferences with other officers and other representatives of Sea Containers, representatives of the independent public accountants for Sea Containers, counsel to Sea Containers and your representatives, and I am familiar with the statistical data contained in the Registration Statements and the Prospectus. Although I have not independently verified the accuracy, completeness or fairness of that statistical data, I advise you that no facts have come to my attention that cause me to believe (i) that the Registration Statements, at the time they became effective, included any statistical data which constituted or contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements in the Registration Statements not misleading, or (ii) that the Prospectus, at the time it was issued and on the date hereof, included or includes any statistical data which constituted or contained, or constitutes or contains, an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements in the Prospectus, in the light of the circumstances under which they were made, not misleading. Nothing set forth herein is intended to express any view with respect to the financial statements of Sea Containers, or any related notes or schedules." 20 (4) The opinion of your counsel to the effect that the opinions delivered pursuant to subsections 5(b)(1), 5(b)(2) and 5(b)(3) appear on their face to be appropriately responsive to the requirements of this Agreement except, specifying the same, to the extent waived by you, and with respect to the Shares, this Agreement, the Registration Statement, the Prospectus, the documents incorporated by reference and such other related matters as you may require. In giving such opinion, such counsel may rely, as to all matters governed by the laws of jurisdictions other than the laws of the State of New York and the federal laws of the United States, upon the opinions of counsel satisfactory to you, including the opinion of Appleby Spurling & Kempe as to matters of Bermuda law. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of Sea Containers and certificates of public officials. (c) On each Settlement Date there will not have been, since the date of the applicable Terms Agreement, and on each Effective Date, there will not have been since the respective dates as of which information is given in the Registration Statements and the Prospectus, any Material Adverse Change, whether or not arising in the ordinary course of business, and on each Effective Date, and on each Settlement Date if called for by the applicable Terms Agreement, you shall have received a certificate of Sea Containers' president or any vice president, dated as of the Effective Date or such Settlement Date, to the effect that (i) there has been no such Material Adverse Change, (ii) the other representations and warranties of Sea Containers contained in Section 1 of this Agreement are true and correct with the same force and effect as though expressly made at and as of the time of such certificate, (iii) Sea Containers has complied with all agreements and satisfied all conditions on its part to be performed or satisfied under this Agreement and any applicable Terms Agreement at or prior to the date of such certificate, and (iv) no stop order suspending the effectiveness of the Registration Statements or the qualification of the Shares for offer or sale in any jurisdiction has been issued, and no proceedings for that propose have been initiated or are pending or, to such person's knowledge, are threatened. (d) On the date of any Terms Agreement, you will have received from Deloitte & Touche LLP a letter, dated as of such date, in form and substance reasonably satisfactory to you, to the effect that: (1) They are independent public accountants with respect to Sea Containers and its subsidiaries within the meaning of the 1933 Act and the rules of the Commission and that the response, if any, to Item 10 of Form S-3 is "none" with respect to Deloitte & Touche LLP; (2) In their opinion, the consolidated financial statements and related financial statement schedules audited by them and included in or incorporated by reference into the Registration Statements and Prospectus comply as to form in all material respects with the applicable accounting requirements of the 1933 Act, the 1934 Act and the rules of the Commission thereunder, as applicable; (3) On the basis of limited procedures, not constituting an audit in accordance with generally accepted auditing standards, consisting of a reading of the unaudited financial statements and other information referred to below, a reading of the latest 21 available interim financial statements of Sea Containers and its subsidiaries, inspection of the minute books of Sea Containers, inquiries of officials of Sea Containers and its subsidiaries responsible for financial and accounting matters and such other inquiries and procedures as may be specified in such letter, nothing came to their attention that caused them to believe that: (i) as of a specified date not more than five days prior to the date of delivery of such letter, there were any changes in the capital shares, long-term debt or shareholders' equity, or any decrease in total assets, in each case as compared with amounts shown in the latest balance sheet included or incorporated by reference in the Prospectus, except in each case for changes, increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; (ii) for the period from the date of the latest balance sheet included or incorporated by reference into the Prospectus to the specified date referred to in clause (i) above, there were any material decreases in consolidated revenues, earnings from operations before net financing costs or in the total or per share amounts of net income of Sea Containers and its subsidiaries, in each case as compared with the corresponding period of the preceding year, except in each case for decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; (iii) the unaudited financial statements, if any, included or incorporated in the Registration Statements and the Prospectus do not comply in form in all material respects with the applicable accounting requirements of the 1933 Act or the 1934 Act, as the case may be, and the rules of the Commission thereunder, or are not in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements included or incorporated in the Registration Statements and the Prospectus; and (iv) the unaudited financial information, if any, included or incorporated in the Registration Statements and the Prospectus does not agree with the amounts set forth in the unaudited consolidated financial statements from which it was derived or was not determined on a basis substantially consistent with that of the audited financial statements included or incorporated in the Registration Statements and the Prospectus; and (4) Certain information set forth in dollar amounts (or ratios, per share amounts or percentages derived from such dollar amounts) specified by you contained in the Registration Statements, in each case to the extent that such dollar amounts, ratios, per share amounts and percentages have been obtained from accounting records which are subject to the internal controls of Sea Containers' accounting system or have been derived directly from such accounting records by analysis or computation, is in agreement with such records or computations made therefrom. 22 (e) On each Settlement Date, if called for by the applicable Terms Agreement, you will have received from Deloitte & Touche LLP a letter, dated as of such Settlement Date, to the effect that they reaffirm the statements made in the letter furnished pursuant to paragraph (d) of this Section 5, except that the specified date referred to will be a date not more than five days prior to such Settlement Date and, to the extent that any additional documents are incorporated by reference in the Registration Statements, such letter will refer to the most recent consolidated financial statements, amounts, percentages and financial information contained therein. (f) On the date of this Agreement and on each Settlement Date, your counsel shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the sale of the Shares as herein contemplated and related proceedings, or in order to evidence the accuracy and completeness of any of the representations and warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by Sea Containers in connection with the sale of the Shares as herein contemplated shall be reasonably satisfactory in form and substance to you and your counsel. (g) You shall have received evidence reasonably satisfactory to you that the appointment of Corporation Service Company, as agent for service of process for Sea Containers pursuant to Section 16 hereof has been accepted by such agent. (h) In the event that Sea Containers grants you in a Terms Agreement an option to purchase Shares to cover overallotments ("Option Shares") and you exercise such option to purchase all or any portion of the Option Shares, the representations and warranties of Sea Containers contained herein and the statements in such Terms Agreement or any certificates furnished by Sea Containers hereunder will be true and correct as of each Settlement Date for such Option Shares ("Option Settlement Date") and, at the relevant Option Settlement Date, you will have received: (1) a certificate, dated such Option Settlement Date, of the president or any vice president of Sea Containers confirming that the certificate delivered at the Settlement Date pursuant to paragraph 5(c) hereof remains true and correct as of such Option Settlement Date; (2) the opinions of Carter Ledyard & Milburn LLP, Appleby Spurling & Kempe, and Edwin S. Hetherington as General Counsel to Sea Containers, each in form reasonably satisfactory to your counsel, dated such Option Settlement Date, relating to the Option Shares to be purchased on such Option Settlement Date and otherwise to the same effect as the opinions delivered pursuant to subsections 5(b)(1), 5(b)(2) and 5(b)(3) hereof; (3) the opinion of your counsel, dated such Option Settlement Date, relating to the Option Shares to be purchased on such Option Settlement Date and otherwise to the same effect as the opinion delivered pursuant to subsection 5(b)(4) hereof; and (4) a letter from Deloitte & Touche LLP, in form and substance reasonably satisfactory to you and dated such Option Settlement Date, 23 substantially in the same form and substance as the letter furnished to you pursuant to paragraph 5(e) hereof, except that the specified date in the letter furnished to you pursuant to this paragraph (h) shall be a date not more than five days prior to such Option Settlement Date. Your obligation to purchase Shares pursuant to any Terms Agreement will be subject to the further condition that there shall not have come to your attention any facts that would cause you to believe that the Prospectus, at the time it was required to be delivered to a purchaser of the Shares, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at such time, not misleading. If any condition specified in this Section 5 will not have been fulfilled, this Agreement and any Terms Agreement may be terminated by you by notice to Sea Containers at any time at or prior to the applicable Settlement Date, and such termination shall be without liability of any party to any other party except that the covenant set forth in paragraph 3(g) hereof, the provisions of Section 4 hereof, the indemnity provisions of Section 7 hereof, the contribution provisions of Section 8 hereof and the provisions of Sections 9, 10 and 13 hereof will remain in effect. For purposes of a Settlement Date with respect to any Terms Agreement, the term "Prospectus" will refer to the Prospectus last filed by Sea Containers under Rule 424(b) under the 1933 Act prior to the execution of the applicable Terms Agreement. SECTION 6. Additional Covenants of Sea Containers. Sea Containers covenants and agrees as follows: (a) Each execution and delivery of a Terms Agreement by Sea Containers will be deemed to be (i) an affirmation that the representations and warranties of Sea Containers contained in this Agreement and such Terms Agreement and in any certificate theretofore delivered to you pursuant hereto are true and correct at the time of such execution and delivery, and (ii) an undertaking that such representations and warranties will be true and correct at the applicable Settlement Date, as though made at and as of such Settlement Date (and it is understood that such representations and warranties shall relate to the Registration Statements and the Prospectus as amended and supplemented to each such time). (b) Each time that Sea Containers (1) amends or supplements the Registration Statements or the Prospectus by filing with the Commission an annual report pursuant to Section 13 or 15(d) of the 1934 Act, or (2) otherwise amends the Registration Statements or the Prospectus (other than by providing solely for a change in the plan of distribution or sales price or similar changes, and other than by filing with the Commission any document (other than an annual report) incorporated by reference into the Prospectus), Sea Containers will furnish or cause to be furnished to you forthwith (i) a certificate, in form reasonably satisfactory to you, to the effect that the statements contained in the certificate referred to in paragraph 5(c) hereof which was last furnished to you are true and correct at the time of filing such amendment or supplement, as the case may be, as though made at and as of such time (except that such statements will be deemed to relate to the Registration Statements and the Prospectus as amended and supplemented to such time) or (ii) in lieu of such certificate a certificate of the same tenor as the certificate referred to in paragraph 5(c), modified as necessary to relate to the 24 Registration Statements and the Prospectus as amended and supplemented to the time of delivery of such certificate. (c) Each time that Sea Containers (1) amends or supplements the Registration Statements or the Prospectus by filing with the Commission an annual report pursuant to Section 13 or 15(d) of the 1934 Act, or (2) otherwise amends the Registration Statement or the Prospectus (other than an amendment or supplement providing solely for a change in the plan of distribution or sales price or similar changes, and other than by filing with the Commission any document (other than an annual report) incorporated by reference into the Prospectus), Sea Containers will cause to be furnished forthwith to you and your counsel (i) a written opinion of Carter Ledyard & Milburn LLP or other United States counsel reasonably satisfactory to you, (ii) a written opinion of Appleby Spurling & Kempe or other Bermuda counsel reasonably satisfactory to you, and (iii) the written opinion of Sea Containers' General Counsel or other counsel reasonably satisfactory to you, in each case dated the date of delivery of such opinion, in form reasonably satisfactory to you, of the same tenor as the opinions to be delivered by such counsel pursuant to subsections 5(b)(1), 5(b)(2) and 5(b)(3) hereof, respectively, but modified, as necessary, to relate to the Registration Statements and the Prospectus as amended and supplemented to the time of delivery of such opinions or, in lieu of such opinions, counsel last furnishing such an opinion to you may furnish you with a letter to the effect that you may rely on such last opinion to the same extent as though it was dated the date of such letter authorizing reliance (except that statements in such last opinion will, subject to the last sentence of Section 5 hereof, be deemed to relate to the Registration Statements and the Prospectus as amended and supplemented to the time of delivery of such letter authorizing reliance). (d) Each time that Sea Containers (1) amends or supplements the Registration Statements or the Prospectus by filing with the Commission an annual or quarterly report pursuant to Section 13 or 15(d) of the 1934 Act, or (2) otherwise amends the Registration Statement or the Prospectus (other than an amendment or supplement providing solely for a change in the plan of distribution or sales price or similar changes, and other than by filing with the Commission any document (other than an annual report) incorporated by reference into the Prospectus), Sea Containers shall cause Deloitte & Touche LLP forthwith to furnish you a letter, dated the date of filing of such annual report or other amendment or supplement with the Commission, in form satisfactory to you, of the same tenor as the portions of the letter referred to in clauses (1) and (2) of paragraph 5(d) hereof but modified to relate to the Registration Statements and Prospectus, as amended and supplemented to the date of such letter, and of the same general tenor as the portions of the letter referred to in clauses (3) and (4) of said paragraph 5(d) with such changes as may be necessary to reflect changes in the financial statements and other information derived from the accounting records of Sea Containers; provided that if the Registration Statements or the Prospectus is amended or supplemented solely to include financial information as of and for a fiscal quarter, Deloitte & Touche LLP may limit the scope of such letter to the unaudited financial statements included in such amendment or supplement unless any other information included therein of an accounting, financial or statistical nature is of such a nature that, in your reasonable judgment, such letter should cover such other information. (e) Each time that Sea Containers amends or supplements the Registration Statements or the Prospectus by filing with the Commission a quarterly report pursuant to Section 13 or 15(d) of the 1934 Act, Sea Containers will cause to be furnished forthwith to you and your 25 counsel a written Rule 10b-5 certification of Carter Ledyard & Milburn LLP or other United States counsel reasonably satisfactory to you, dated the date of delivery of such opinion, substantially in the form set forth in the last paragraph of Section 5(b)(1) of this Agreement but modified, as necessary, to relate to the Registration Statements and the Prospectus as amended and supplemented to the time of delivery of such certification. SECTION 7. Indemnification. (a) Sea Containers agrees to indemnify and hold harmless you and each person, if any, who controls you within the meaning of Section 15 of the 1933 Act as follows: (1) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statements (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in the Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (2) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission if such settlement is effected with the written consent of Sea Containers; (3) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by you), reasonably incurred in investigating, preparing or defending against any litigation, or investigation or proceeding by any governmental agency or body, commenced or threatened and to which you are a party, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under subsection (1) or (2) above; and (4) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any failure by Sea Containers to comply with its obligation to deliver Shares to any purchaser hereunder or pursuant to any Terms Agreement (such indemnity for failure to deliver Shares to be provided to the same extent that indemnity is provided in subsections (1)-(3) above with respect to untrue statements and omissions); provided, however, that (A) this indemnity agreement does not apply to any loss, liability, claim, damage or expense to the extent arising out of an untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to Sea Containers by you expressly for use in the Registration Statements (or any amendment thereto) or any preliminary Prospectus 26 supplement or the Prospectus (or any amendment or supplement thereto); and (B) this indemnity, as to any preliminary Prospectus supplement will not inure to your benefit (or any person controlling you) on account of any loss, claim, damage, liability or litigation arising from the sale of Shares to any person by you if you failed to send or give a copy of any subsequen Prospectus or Prospectus supplement to such person within the time required by the 1933 Act, and the untrue statemen or alleged untrue statement or omission or alleged omission of a material fact in such preliminary Prospectu supplemen was corrected in the subsequent Prospectus or Prospectu supplement unless such failure resulted from noncompliance by Sea Containers with paragrap 3(f) hereof. (b) You agree to indemnify and hold harmless Sea Containers, its directors, each of its officers who signed the Registration Statement, and each person, if any, who controls Sea Containers within the meaning of Section 15 of the 1933 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsections (a)(1)-(3) of this Section 7, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto) or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to Sea Containers by you expressly for use in the Registration Statements (or any amendment thereto) or the Prospectus (or any amendment or supplement thereto), as described in paragraph (a) above. (c) Promptly after receipt by an indemnified party under this Section 7 of notice of any claim or the commencement of any action, the indemnified party must, if a claim in respect thereof is to be made against the indemnifying party under this Section 7, notify the indemnifying party in writing of the claim or the commencement of that action; provided that the failure to notify the indemnifying party will not relieve it from any liability which it may have under this Section 7 except to the extent it has been materially prejudiced by such failure; and provided further that the failure to notify the indemnifying party will not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 7. If any such claim or action is brought against an indemnified party and it notifies the indemnifying party thereof, the indemnifying party will be entitled to participate therein and, to the extent that it wishes, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party will not be liable to the indemnified party under this Section 7 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided that the indemnified party will have the right to employ one counsel in each jurisdiction to represent jointly the indemnified party and its respective controlling persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the indemnified party under this Section 7 if, in the reasonable judgment of the indemnified party, it is advisable for the indemnified party and controlling persons to be jointly represented by separate counsel, and in that event the fees and expenses of such separate counsel will be paid by the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties (which consent will not be unreasonably withheld), settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be 27 sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding. An indemnified party will not, without the prior written consent of the indemnifying party (which consent shall not be unreasonably withheld), settle or compromise any such action, but if settled with the consent of the indemnifying party or if there be a final judgment of the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment. SECTION 8. Contribution. If the indemnification provided for in Section 7 is for any reason unavailable to or insufficient to hold harmless an indemnified party under Section 7 in respect to any loss, liability, claim, damage or expense, or any action in respect thereof, referred to therein, then each indemnifying party will, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by Sea Containers and you from the offering of the Shares or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of Sea Containers and you with respect to the statements or omissions which resulted in such loss, liability, claim, damage or expense, or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by Sea Containers and you with respect to such offering will be deemed to be in the same proportion as the total net proceeds from the offering of the Shares purchased under this Agreement (before deducting expenses) received by Sea Containers, on the one hand, and the total brokerage and underwriting discounts and commissions received by you with respect to the Shares purchased under this Agreement, on the other hand, bear to the total gross proceeds from the offering of the Shares under this Agreement. The relative fault will be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by Sea Containers or you, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. Sea Containers and you agree that it would not be just and equitable if contributions pursuant to this Section 8 were to be determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, liability, claim, damage or expense or action in respect thereof, referred to above in this Section 8 will be deemed to include, for purposes of this Section 8, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, you will not be required to contribute any amount in excess of the amount by which the total price at which the Shares distributed by you hereunder was offered to the public exceeds the amount of any damages which you have otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of section 11(f) of the 1933 Act) will be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 28 SECTION 9. Representations and Indemnities to Survive Delivery. Except as otherwise specified herein, the respective indemnities, agreements, representations, warranties and other statements of Sea Containers, its officers or subsidiaries, and you set forth in or made pursuant to this Agreement or any Terms Agreement entered into in connection herewith will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of you or Sea Containers or any of your or its officers, directors or controlling persons and will survive delivery of and payment for the Shares, from time to time. SECTION 10. Your Status as Agent. In selling the Shares for Sea Containers, you are acting solely as agent for Sea Containers and not as principal, except as otherwise provided in Section 2(b) hereof. When acting solely as agent, you will make reasonable efforts to assist Sea Containers in obtaining performance by each purchaser whose offer to purchase Shares from Sea Containers has been accepted on behalf of Sea Containers, but you will not have any liability to Sea Containers if any such purchase is not consummated for any reason. SECTION 11. Termination. This Agreement may be terminated for any reason at any time by any party hereto by giving five days' written notice of such termination to the other parties hereto. You may also terminate this Agreement and any existing Terms Agreement immediately (i) if there has been, since the respective dates as of which information is given in the Registration Statements and the Prospectus, any Material Adverse Change, whether or not arising in the ordinary course of business, or (ii) if there has occurred any material adverse change in the financial markets or any outbreak or escalation of hostilities or other calamity or crisis the effect of which on the financial markets of the United States is such as to make it, in your reasonable judgment, impracticable or inadvisable to market the Shares, or (iii) if trading in any securities of Sea Containers has been suspended by the Commission or a national securities exchange, or if trading generally on either the New York Stock Exchange or the Nasdaq Stock Market has been suspended, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required, by either of said exchanges or by order of the Commission or any other governmental authority, or if a banking moratorium has been declared by either Federal, New York or United Kingdom authorities, or (iv) a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States, or (v) a stop order suspending the effectiveness of the Registration Statements or an order preventing or suspending the use of the Prospectus shall have been entered and shall not have been lifted or removed, or (vi) any event shall have occurred as a result of which the Prospectus would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein in the light of the circumstances under which they are made not misleading, and Sea Containers will not have complied with Section 3(b) of this Agreement. In the event of any such termination, a party hereto will not have any liability to the other parties hereto (including any obligation of yours to complete a purchase of Shares as principal or to complete a sale as agent hereunder), except that (i) you will be entitled to any commissions earned in accordance with the third paragraph of paragraph 2(a) hereof, (ii) if at the time of termination, (A) you own any of the Shares with the intention of reselling them or (B) an offer to purchase any of the Shares has been accepted on behalf of Sea Containers but the time of delivery to the purchaser or its agent of the Shares relating thereto has not occurred, the covenants set forth in Sections 3 and 6 hereof and the conditions in Section 5 hereof will remain in effect until such Shares are so resold or delivered, as the case may be, and (iii) the covenant set forth in paragraph 3(g) hereof, the provisions of Section 4 hereof, the indemnity 29 provisions of Section 7 hereof, the contribution provisions of Section 8 hereof and the provisions of Sections 9, 10 and 13 hereof will remain in effect. SECTION 12. Notices. All notices and other communications hereunder will be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to you shall be directed to General Counsel, 388 Greenwich Street, New York, New York 10013, attention General Counsel (fax (212) 816-7912). Notices to Sea Containers shall be directed to it at 22 Victoria Street, Hamilton, HM 12, Bermuda, attention of the Secretary (fax (809) 292-8666), with copies to Sea Containers America Inc., 1155 Avenue of the Americas, New York, New York 10036, attention of John T. Landry, Jr., Esq. (fax (212) 302-5073); to Sea Containers Services Ltd., Sea Containers House, 20 Upper Ground, London SE 1 9PF, England, attention of Edwin S. Hetherington, Esq. (fax 011-44-207-805-5916); and to Robert M. Riggs, Esq., Carter Ledyard & Milburn LLP, 2 Wall Street, New York, New York 10005 (fax (212) 732-3232). SECTION 13. Parties. This Agreement and any Terms Agreement will inure to the benefit of and be binding upon you and Sea Containers and your and its respective successors. Nothing expressed or mentioned in this Agreement or any Terms Agreement is intended or shall be construed to give any person, firm or corporation, other than the parties hereto and their respective successors and the controlling persons and officers and directors referred to in Section 7 hereof and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any Terms Agreement, or any provision herein or therein contained. This Agreement and any Terms Agreement and all conditions and provisions hereof and thereof are intended to be for the sole and exclusive benefit of the parties hereto and their respective successors and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Shares will be deemed to be a successor by reason merely of such purchase. SECTION 14. Governing Law. This Agreement and any Terms Agreement, and the rights and obligations of the parties created hereby and thereby, are and will be governed by the laws of the State of New York. SECTION 15. Counterparts. This Agreement and any Terms Agreement may be executed in one or more counterparts and, when a counterpart has been executed by each party, all such counterparts taken together will constitute one and the same agreement. SECTION 16. Submission to Jurisdiction. Any legal action or proceeding with respect to this Agreement and any Terms Agreement, the Shares or any document related thereto may be brought in the courts of the State of New York in the County of New York or the United States District Court for the Southern District of New York and, by execution and delivery of this Agreement, Sea Containers hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts in any such legal action or proceeding. The parties hereto hereby irrevocably waive trial by jury, and Sea Containers hereby irrevocably waives any objection, including, without limitation, any objection to the laying of venue or based on the grounds of forum non conveniens, which it may now or hereafter have to the bringing of any such action or proceeding in such respective jurisdictions. Sea Containers hereby irrevocably designates Sea Containers America Inc. and Corporation Service Company as the designees, 30 appointees and agents of Sea Containers to receive, for and on behalf of Sea Containers, service of process in such respective jurisdictions in any legal action or proceeding with respect to this Agreement, any Terms Agreement, the Shares or any document related thereto. It is understood that a copy of such process served on either such agent will be promptly forwarded to Sea Containers at its addresses set forth in Section 12, but the failure of Sea Containers to receive such copy will not affect in any way the service of such process. In addition to service on Sea Containers' process agent, Sea Containers further irrevocably consents to the service of process of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to Sea Containers at its said address, such service to become effective 10 days after such mailing. Nothing herein will affect your right or the right of any holder of Shares to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against Sea Containers in any other jurisdiction. 31 If the foregoing is in accordance with your understanding of our agreement, please sign and return to Sea Containers a counterpart hereof, whereupon this instrument along with all counterparts will become a binding agreement between you and Sea Containers in accordance with its terms. Very truly yours, SEA CONTAINERS LTD. By:________________ Name: Title: CONFIRMED AND ACCEPTED, as of the date first above written: CITIGROUP GLOBAL MARKETS INC. By:____________________ Name: Title: 32 EXHIBIT A SEA CONTAINERS LTD. (a Bermuda company) 2,000,000 Class A Common Shares (par value $.01 each) TERMS AGREEMENT [Date] Re: Sales Agreement dated November __, 2003 The undersigned agrees to purchase_______Shares on the following terms: Initial Public Offering Price: $_________per Share Discount: Proceeds to Sea Containers Ltd.: $______ per Share Settlement Date, Time and Place: Exceptions, if any, to Section 3(j) of the Sales Agreement: [The certificate referred to in Section 5(c) of the Sales Agreement, the opinions referred to in Section 5(b) of the Sales Agreement and the accountants' letter referred to in Section 5(e) of the Sales Agreement will be required.] CITIGROUP GLOBAL MARKETS INC. By:________________________ Name: Title: Accepted: SEA CONTAINERS LTD. By:________________________ Name: Title: EXHIBIT B Administrative Procedures SEA CONTAINERS LTD. 2,000,000 Class A Common Shares (par value $.01 each) 2,000,000 shares (the "Shares") of the class A common shares, par value $.01 each, of Sea Containers Ltd., a Bermuda company (the "Company"), are to be offered on a continuing basis by the Company. Citigroup Global Markets Inc., as agent (the "Agent"), has agreed to use its best efforts to sell the Shares directly for Sea Containers, and may also purchase Shares, as principal, for resale. The Shares are being sold pursuant to a Sales Agreement between Sea Containers and the Agent dated November __, 2003 (the "Sales Agreement"). The Shares have been registered under the Securities Act of 1933 with the Securities and Exchange Commission (the "Commission"). Administrative procedures and specific terms of the offering are explained below. Administrative responsibilities, document control and record-keeping functions will be performed for the Company by John T. Landry, Jr. and Edwin S. Hetherington. Confirmation: At the close of business on each day on which Shares are sold hereunder (a "trade date"), the Agent will issue a confirmation for the day's transactions by fax or e-mail to Edwin S. Hetherington at Sea Containers Services Ltd., London, England (fax 011-44-207-805-5916, e-mail edwin.hetherington@seacontainers.com), with a copy to John T. Landry, Jr. at Sea Containers America Inc. in New York fax 212-3025073, e-mail jack.landry@seacontainers.com) containing the following key details: 1. The number of Shares sold. 2. The prices at which the Shares were sold. 3. The commissions payable to the Agent by Sea Containers. 4. Other applicable charges, such as transfer taxes. 5. The net proceeds payable to Sea Containers. 6. The date or dates of settlement. Settlement Date: 3 business days after the trade date (the "settlement date"). Denomination and Registration: Single certificate representing total number of Shares to be settled on a settlement date or credit to the Agent's account at The Depository Trust Company of the total number of Shares to be settled on the settlement date, unless other instructions are given to Sea Containers by the Agent at least 48 hours prior to the settlement date. All certificates will be registered in the name of Cede & Co. unless other instructions are given to Sea Containers by the Agent at least 48 hours prior to the settlement date. B-1 Details for Settlement: On the day after a trade date, Sea Containers will authorize EquiServe Trust Company N.A., as transfer agent, by fax or e-mail to deliver certificate(s) or credit Shares to Agent's Depository Trust Company account on the settlement date upon telephonic, fax or e-mail authorization by Sea Containers on such date. Sea Containers will indicate denominations of certificate(s). On the settlement date, Agent will credit the amount of net sales proceeds to the account of Sea Containers with Agent or send New York Clearing House funds in the amount of net sales proceeds (sales price less commission and transfer taxes) by wire to ________________, for the account of Sea Containers Ltd., Account No. __________, ABA Code , Swift Code ______________. Upon telephonic receipt of funds wire number, Sea Containers will authorize EquiServe Trust Company N.A. by telephone, fax or e-mail to release certificates to Agent. Delivery of Certificates: EquiServe Trust Company N.A. will call ____________of Agent (telephone (212) ____) two days prior to settlement to confirm delivery of certificate(s). EquiServe Trust Company N.A. will release certificate(s) to Agent on telephonic authorization by Sea Containers. Certificate(s) will be delivered to ___________, NY, NY _________ or by other means for the account of the Agent through The Depository Trust Company, not later than 10:00 a.m., New York City time, on the third business day after the trade date for the sale of such Shares; provided that Sea Containers and the Agent may agree that delivery of and payment for Shares sold in particular transactions and/or payment of commissions in respect thereof is to be made at such other times and places and in such other manner as Sea Containers and the Agent may determine Fails: If on the settlement date the certificate(s) are ready for delivery but Agent does not wire funds to Sea Containers or credit net sales proceeds to Sea Containers' account with Agent, Agent will pay interest to Sea Containers for each day's delay at the federal funds rate. Suspension of Sales; Amendment or Sea Containers will give Agent telephonic notice of Supplement: suspension, amendment or supplement, confirmed by fax or e-mail. B-2 Delivery of Sea Containers will deliver to Agent such number of copies Prospectus: of the Prospectus as the Agent may reasonably request. Sea Containers will file seven current Prospectuses with the New York Stock Exchange, or such other number as may be required from time to time pursuant to Rule 153. Payment of Selling Commissions and Transfer Taxes: Commissions and taxes will be deducted from sales price paid to Sea Containers. B-3 EX-23.1 4 ex23_1.txt CONSENT OF DELOITTE & TOUCHE EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Sea Containers Ltd. on Form S-3 of our report dated March 6, 2003 (May 15, 2003, as to Note 20) (which report on the consolidated financial statements expresses an unqualified opinion and includes an explanatory paragraph referring to the adoption by Sea Containers Ltd. of Statement of Financial Accounting Standards (`SFAS') No. 142, Goodwill and Other Intangible Assets, and SFAS No. 145, Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections, effective January 1, 2002, and SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS No. 137 and 138, effective January 1, 2001) appearing in the Annual Report on Form 10-K/A of Sea Containers Ltd. and subsidiaries for the year ended December 31, 2002 and to the reference to us under the heading `Experts' in the Prospectus which is part of such Registration Statement. /s/ Deloitte & Touche LLP New York, New York November 20, 2003 -----END PRIVACY-ENHANCED MESSAGE-----