FACE OF EXCHANGE SECOND PRIORITY SHIP MORTGAGE NOTE
THE NOTES EVIDENCED BY THIS CERTIFICATE WERE INITIALLY ISSUED AS PART OF AN
ISSUANCE OF UNITS, EACH OF WHICH CONSISTS OF THE NOTES AND WARRANTS TO PURCHASE
SHARES OF COMMON STOCK (EACH, A "WARRANT"). THE SECURITIES AND WARRANTS WILL NOT
TRADE SEPARATELY UNTIL THE EARLIER OF (I) THE COMMENCEMENT OF AN EXCHANGE OFFER
OR THE EFFECTIVENESS OF A SHELF REGISTRATION STATEMENT FOR THE SECURITIES OR (I)
SUCH DATE AFTER SEPTEMBER 6, 1997, AS THE INITIAL PURCHASERS MAY DETERMINE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
CUSIP No. ________
No. __ $__________
__% Second Priority Ship Mortgage Notes Due 2007
NAVIGATOR GAS TRANSPORT PLC, an Isle of Man public limited
company, promises to pay to CEDE & CO., or registered assigns, the principal sum
of EIGHTY-SEVEN MILLION DOLLARS on June 30, 2007.
Interest Payment Dates: June 30 and December 31.
Record Dates: June 15 and December 15.
Dated: _________
NAVIGATOR GAS TRANSPORT PLC,
by
------------------------
------------------------
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE CHASE MANHATTAN BANK, as Trustee, certifies this is one of the Securities
referred to in the Indenture.
by
-----------------------------
Authorized Signatory
2
__% Second Priority Ship Mortgage Notes Due 2007
1. INTEREST
NAVIGATOR GAS TRANSPORT PLC, an Isle of Man public limited
company (such corporation, and its successors and assigns under the Indenture
hereinafter referred to, being herein called the "Company"), promises to pay
interest on the principal amount of this Security at the rate per annum shown
above; provided, however, that if a Registration Default (as defined in the
Registration Rights Agreement) occurs, additional interest will accrue on this
Security at a rate of 0.50% per annum from and including the date on which any
such Registration Default shall occur to but excluding the date on which all
Registration Defaults have been cured. The Company will pay interest in cash
semiannually on June 30 and December 31 of each year, commencing December 31,
1997, except that at the option of the Company, on any Interest Payment Date
following the delivery of the first Vessel, to the extent cash available for
distribution to Holders of Securities on such date is insufficient to pay all
accrued and unpaid interest on the Securities on such date, the Company may pay
such interest by issuing additional Securities having an aggregate principal
amount equal to the amount of such deficiency, provided that the Company may not
issue more than $20,900,000 aggregate principal amount of such additional
Securities. Interest on the Securities will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from August 7,
1997. Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company shall pay interest on overdue principal at the rate borne by
the Securities plus _% per annum, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
2. METHOD OF PAYMENT
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the June 15 or December 15 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. Payments in respect of the Securities
represented by a Global Security (including principal, premium and interest)
will be made by wire transfer of immediately available funds to the accounts
specified by The Depository Trust Company. The Company will make all payments in
respect of a certificated Security (including principal, premium and interest)
by mailing a check to the registered address of each Holder thereof; provided,
however, that payments on a certificated Security will be made by wire transfer
to a U.S. dollar account maintained by the payee with a bank in the United
States if such Holder elects payment by wire transfer by giving written notice
to the Trustee or the Paying Agent to such effect designating such account no
later than 30 days immediately pre ceding the relevant due date for payment (or
such other date as the Trustee may accept in its discretion).
3. PAYING AGENT AND REGISTRAR
Initially, The Chase Manhattan Bank, a New York banking
corporation ("Trustee"), will act as Paying Agent and Registrar. The Company may
appoint and change any Paying Agent, Registrar or co-registrar without notice.
The Company or any of its
3
domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent,
Registrar or co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture dated as
of August 1, 1997 ("Indenture"), among the Company, Holdings, the Guarantors and
the Trustee. The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) as in effect on the date of the Indenture
(the "Act"). Terms defined in the Indenture and not defined herein have the
meanings ascribed thereto in the Indenture. The Securities are subject to all
such terms, and Securityholders are referred to the Indenture and the Act for a
statement of those terms.
The Securities are general secured obligations of the Company
initially limited to $87,000,000 aggregate principal amount (subject to Section
2.06 of the Indenture and subject to the issuance of up to $20,900,000 aggregate
principal amount of Securities under the circumstances described in paragraph 1
above). The Indenture limits (i) the incurrence of additional debt by the
Company and the Owner, (ii) the payment of dividends on capital stock of the
Company and the purchase, redemption or retirement of capital stock or
subordinated indebtedness, (iii) investments, (iv) certain liens and
sale/leaseback transactions, (v) certain transactions with affiliates, (vi)
sales of assets, (vii) the issuance or sale of capital stock of subsidiaries and
(viii) certain consolidations, mergers and transfers of assets. The Indenture
also prohibits certain restrictions on distributions from the Owners.
5. OPTIONAL REDEMPTION
Except as set forth in the next two paragraphs, the Securities
may not be redeemed prior to June 30, 2002. On and after that date, the Company
may redeem the Securities in whole at any time or in part from time to time at
the following redemption prices (expressed in percentages of principal amount),
plus accrued interest to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the related
Interest Payment Date):
if redeemed during the 12-month period beginning June 30,
Period Percentage
2002 . . . . . . . . . . . . . . . . . . . 106.000%
2003 . . . . . . . . . . . . . . . . . . . 104.000
2004 . . . . . . . . . . . . . . . . . . . 102.000
2005 and thereafter . . . . . . . . . . . 100.000
If, as a result of any change in or any amendment to the laws,
regulations or published tax rulings of the Isle of Man or any Successor
Jurisdiction, or of any political subdivision or taxing authority thereof or
therein, or any change in the official administration, application or
interpretation of such laws, regulations or published tax rulings either
generally or in relation to any particular Securities, which change in official
administration, application or interpretation shall not have been available to
the public prior to such issue date and is notified to the Company or the
relevant Owners, as the case may be, on or after such issue date, it is
determined by the Company or the relevant Owners, as the
4
case may be, that the Company or the relevant Owners, as the case may be, would
be required to pay, any Additional Amounts pursuant to the Indenture or the
terms of any Security in respect of interest on the next succeeding Interest
Payment Date (assuming, in the case of the Owners, that a payment in respect of
such interest were required to be made by the relevant Owners under the
Guarantees on such Interest Payment Date), and that such obligation cannot be
avoided by the Company or the relevant Owners taking reasonable measures
available to it, the Company or the relevant Owners, as the case may be, may, at
its option, redeem all (but not less than all) the Securities in respect of
which such Additional Amounts would be so payable at any time, at a redemption
price equal to 100% of the principal amount thereof plus accrued interest to the
date fixed for redemption; provided, however, that (a) no such notice of
redemption may be given earlier than 60 days prior to the earliest date on which
the Company or the relevant Owners, as the case may be, would be obligated, or
is substantially likely to be obligated, to pay such Additional Amounts were a
payment in respect of the Securities or the Guarantees, as the case may be, then
due, and (b) at the time any such redemption notice is given, such obligation,
or substantial likelihood, to pay such Additional Amounts must remain in effect.
In addition, at any time and from time to time prior to June
30, 2000, the Company may redeem up to 35% of the aggregate principal amount of
Securities with the proceeds of one or more Public Equity Offerings (with the
cash proceeds thereof to the extent actually contributed to the Company)
following which there is a Public Market, at a redemption price (expressed as a
percentage of principal amount) of 112% plus accrued interest to the redemption
date (subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date); provided, however,
that at least $45 million aggregate principal amount of the Securities and $100
million aggregate principal amount of the First Priority Notes must remain
outstanding after each such redemption.
6. MANDATORY REDEMPTION
In the event an Owner elects to terminate its Building
Contract because of a material breach thereof by the Builders (including a
failure to pay liquidated damages for any delay in the delivery of the related
Vessel), the Securities will be subject to mandatory redemption in part, on a
pro rata basis, in an aggregate principal amount equal to the Allocated
Principal Amount of the Securities for such Vessel and for each other Vessel
that has not been accepted by its related Owner as of the date of such
termination, at a redemption price equal to 100% of the principal amount
thereof, plus accrued and unpaid interest to and including the date of
redemption (subject to the right of a Holder of record on the relevant record
date to receive interest due on the relevant Interest Payment Date), upon the
earlier to occur of (a) the receipt of the Refund Amount with respect to the
related Building Contract(s) and (b) 60 days after the termination of such
Building Contract(s) by the related Owner(s).
If a Vessel is subject to Total Loss, the Securities will be
subject to mandatory redemption in part, on a pro rata basis, in an aggregate
principal amount equal to the Allocated Principal Amount of the Securities for
such Vessel, at a redemption price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest to the date of redemption (subject to
the right of a Holder of record on the relevant record date to receive interest
due on the relevant Interest Payment Date), upon the earlier to occur of (a) the
receipt of the Insurance Proceeds with respect to such Total Loss and (b) 60
days after such Total Loss was deemed to have occurred.
5
7. NOTICE OF REDEMPTION
Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued interest on all Securities
(or portions thereof) to be redeemed on the redemption date is deposited with
the Paying Agent on or before the redemption date, on and after such date
interest ceases to accrue on such Securities (or such portions thereof) called
for redemption.
8. OFFERS TO PURCHASE
Commencing on the first Available Cash Payment Date and on
each Available Cash Payment Date thereafter, the Company will be required to the
extent of Available Cash on such Available Cash Payment Date, to make an
Available Cash Offer to each Holder of Securities to purchase such Holder's
Securities in whole or in part, at a price equal to 102% of the principal amount
thereof plus accrued and unpaid interest to the date of purchase (subject to the
right of Holders of record on the relevant record date to receive interests due
on the related Interest Payment Date) as provided in, and subject to the terms
of, the Indenture. Upon a Change of Control, any Holder of Securities will have
the right to cause the Company to purchase all or any part of the Securities of
such Holder at a purchase price equal to 101% of the principal amount of the
Securities to be purchased plus accrued interest to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related Interest Payment Date) as provided in, and
subject to the terms of, the Indenture, provided that the Company shall purchase
any and all First Priority Notes validly tendered pursuant to a change of
control offer made pursuant to the First Priority Note Indenture prior to
purchasing any Securities validly tendered pursuant to such Change of Control
Offer.
9. GUARANTEE
The payment by the Company of the principal of, and premium
and interest on, the Securities is fully and unconditionally guaranteed on a
joint and several senior basis by the Owners.
10. SECURITY
The Securities will initially be secured by the Collateral
delivered on the Issue Date. Upon the occurrence of a Delivery Date with respect
to a Vessel the Securities will thereafter be secured by a first priority ship
mortgage on such Vessel and all other Collateral delivered on the Delivery Date
of such Vessel. The Securities will also have the benefit of the Letter of
Credit.
11. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption (except, in the case of a Security to be
6
redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
12. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the
owner of it for all purposes.
13. UNCLAIMED MONEY
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
14. DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Company at any time may
terminate some or all of its and the Guarantors' obligations under the
Securities, the Security Agreements and the Indenture if the Company deposits
with the Trustee money or U.S. Government Obligations for the payment of
principal and interest on the Securities to redemption or maturity, as the case
may be.
15. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the Securities and (ii)
any default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in principal amount of the Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company, the Guarantors and the Trustee may amend the
Indenture, the Security Agreements or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 of the Indenture,
or to provide for uncertificated Securities in addition to or in place of
certificated Securities, or to add additional guarantees with respect to the
Securities or to provide additional security for the Securities, or to add
additional covenants or surrender rights and powers conferred on the Company or
the Guarantors, or to comply with any request of the SEC in connection with
qualifying the Indenture under the Act, or to make any change that does not
adversely affect the rights of any Securityholder.
16. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default for
30 days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
or 6 of the Securities, upon required purchase, upon acceleration or otherwise,
or failure by the Company or the Guarantors to redeem or purchase Securities
when required; (iii) failure by the Company to comply with other agreements in
the Indenture or the Securities, in certain cases subject to notice and
7
lapse of time; (iv) certain accelerations (including failure to pay within any
grace period after final maturity) of other Indebtedness of Holdings, the
Company or the Owners if the amount accelerated (or so unpaid) exceeds $5.0
million; (v) certain events of bankruptcy or insolvency with respect to
Holdings, the Company or the Owners; (vi) certain judgments or decrees for the
payment of money in excess of $5.0 million, (vii) certain events or defaults
with respect to the Guarantees or the Security Agreements and (ix) the failure
by the Designated Owners to hold certain prescribed percentages of Voting Stock
and Capital Stock of Holdings. If an Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the Securities
may declare all the Securities to be due and payable immediately. Certain events
of bankruptcy or insolvency are Events of Default which will result in the
Securities being due and payable immediately upon the occurrence of such Events
of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any continuing
Default (except a Default in payment of principal or interest) if it determines
that withholding notice is in the interest of the Holders.
17. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
18. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the
Company, Holdings, the Owners or the Trustee shall not have any liability for
any obligations of the Company, Holdings or the Owners under the Securities or
the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
19. AUTHENTICATION
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
20. ABBREVIATIONS
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
8
21. HOLDERS' COMPLIANCE WITH REGISTRATION RIGHTS
AGREEMENT
Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company and the Guarantors to the extent provided
therein.
22. GOVERNING LAW
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The Company will furnish to any Securityholder upon written
request and without charge to the Securityholder a copy of the Indenture which
has in it the text of this Security in larger type. Requests may be made to:
Navigator Gas Transport PLC,
15-19 Athol Street
Douglas, Isle of Man IM1 1LB
Fax: 44-1624-638-333
Attention of Secretary
9
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on the books of the
Company. The agent may substitute another to act for him.
- ------------------------------------------------------------
Date: ________________ Your Signature: _____________________
- ------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) / / to the Company; or
(2) / / pursuant to an effective registration statement under
the Securities Act of 1933; or
(3) / / inside the United States to a "qualified
institutional buyer" (as defined in Rule 144A under
the Securities Act of 1933) that purchases for its
own account or for the account of a qualified
institutional buyer to whom notice is given that such
transfer is being made in reliance on Rule 144A, in
each case pursuant to and in compliance with Rule
144A under the Securities Act of 1933; or
(4) / / outside the United States in an offshore
transaction within the meaning of Regulation S under
the Securities Act in compliance with Rule 904 under
the Securities Act of 1933; or
(5) / / pursuant to another available exemption from
registration provided by Rule 144 under the
Securities Act of 1933.
10
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, however,
that if box (4) or (5) is checked, the Trustee may require, prior to
registering any such transfer of the Securities, such legal opinions,
certifications and other information as the Company has reasonably
requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption
provided by Rule 144 under such Act.
------------------------
Signature
Signature Guarantee:
- --------------------- --------------------------
Signature must be guaranteed Signature
- ------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated: ________________ ______________________________
NOTICE: To be executed by
an executive officer
11
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been
made:
Date of Amount of decrease in Amount of increase in Principal amount of this Signature of authorized
Exchange Principal Amount of this Principal Amount of Global Security following officer of Trustee or
this Global Security Global Security such decrease or increase Securities Custodian
12
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.12 of the Indenture, check the box:
/ /
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.12 of the Indenture, state the
amount in principal amount: $
Date: _______________ Your Signature: _________________________________
(Sign exactly as your name appears
on the other side of this Security.)
Signature Guarantee: _________________________________
(Signature must be guaranteed)
13