FORM OF FACE OF EXCHANGE NOTE
[*/]
No.$
12% First Priority Ship Mortgage Exchange Notes Due 2005
Millenium Seacarriers, Inc., a Cayman Islands corporation, promises to
pay to _______________, or registered assigns, the principal sum of ____________
Dollars on July 15, 2005.
Interest Payment Dates: January 15 and July 15.
Record Dates: January 1 and July 1.
Additional provisions of this Security are set forth on the other side of this
Security.
Dated:
MILLENIUM SEACARRIERS, INC.,
by
-----------------------
Chief Executive Officer
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Secretary
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE FIRST NATIONAL BANK OF MARYLAND,
as Trustee, certifies that
this is one of the Securities
referred to in the Indenture.
by
-----------------------------
Authorized Signatory
*/ If the Security is to be issued in global form add the Global Securities
Legend:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY 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.
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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
If the Security is to be issued in global form add the following schedule:
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 Principal Amount of increase in Principal
Exchange Amount at Maturity of this Amount at Maturity of this
Global Security Global Security
Principal amount at Maturity of Signature of authorized officer of
this Global Security following Trustee or Securities Custodian
such decrease or increase)
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FORM OF REVERSE SIDE OF EXCHANGE NOTE
12% First Priority Ship Mortgage Exchange Note Due 2005
1. INTEREST
Millenium Seacarriers, Inc., a Cayman Islands corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay cash interest
on the Accreted Value of this Security at the rate per annum shown above. The
Company will pay interest semiannually on January 15 and July 15 of each year.
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 July 24, 1998.
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 1% 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 January 1 or July 1 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 Securities (including
principal, premium and interest) will be made by wire transfer of immediately
available funds to the accounts specified by the holders thereof or, if no U.S.
dollar account maintained by the payee with a bank in the United States is
designated by any holder to the Trustee or the Paying Agent at least 30 days
prior to the relevant due date for payment (or such other date as the Trustee
may accept in its discretion), by mailing a check to the registered address of
such holder.
3. PAYING AGENT AND REGISTRAR
Initially, The First National Bank of Maryland, a national banking
association ("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 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 July
24, 1998 ("Indenture"), between the Company 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 limited
to $100.0 million aggregate principal amount at maturity (subject to Section
2.06 of the Indenture). The Indenture will contain covenants with respect to (i)
limitations on the incurrence of additional indebtedness, (ii) limitations on
certain payments, (iii) limitations on restrictions on distributions from
subsidiaries (including the Subsidiary Guarantors), (iv) limitations on sales of
assets and subsidiary stock, (v) limitations on liens, (vi) limitations on
investments, (vii) limitations on business activities, (viii) limitations on
sale and leaseback transactions, (ix) limitations on transactions with
affiliates, (x) requirements for the provision of financial information, (xi)
limitations on mergers, consolidations and certain purchases of assets, (xii)
impairment of security interests and (xiii) amendments to security agreements.
All these limitations and prohibitions, however, are subject to a number of
important qualifications.
5. OPTIONAL REDEMPTION
Except as set forth in the next two paragraphs below, the Securities
may not be redeemed at the option of the Company prior to July 15, 2003. 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
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percentages of Accreted Value), 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 commencing on July 15 of the
years set forth below:
PERIOD PERCENTAGE
------ ----------
2003 106%
2004 100
In addition, at any time prior to July 15, 2001, the Company may
redeem up to 35% of the original principal amount at maturity of Securities with
the proceeds of a Public Equity Offering following which there is a Public
Market, at any time or from time to time, at a redemption price (expressed as a
percentage of Accreted Value) of 112% plus accrued interest to 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 $65.0 million principal amount at maturity of Securities remains
outstanding and is held, directly or indirectly by Persons other than the
Company and its Affiliates, after each such redemption and that any such
redemption occurs within 60 days following the closing of any such Public Equity
Offering.
The Securities may be redeemed, at the option of the Company, at any
time as a whole but not in part, on not less than 30 nor more than 60 days'
written notice to each Holder, at 100% of the Accreted Value thereof, plus
accrued and unpaid interest to the date of redemption (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date), in the event the Company or the Subsidiary
Guarantors, as the case may be, has become or would become obligated for reasons
outside of its control, and after taking reasonable measures to avoid such
obligation, to pay, on the next date on which any amount would be payable with
respect to the Securities, any Additional Amounts on the Securities or
Subsidiary Guarantees pursuant to the terms and conditions thereof as a result
of a change in or an amendment to the laws (including any regulations or rulings
promulgated thereunder) of the Cayman Islands, Liberia or Cyprus (or any
relevant jurisdiction, political subdivision or taxing authority thereof or
therein), or any change in or amendment to any official position regarding the
application or interpretation of such laws, regulations or rulings (including a
holding by a court of competent jurisdiction), which change or amendment is
announced or becomes effective on or after July 20, 1998; PROVIDED, HOWEVER,
that (a) no such notice of redemption shall be given earlier than 60 days prior
to the earliest date on which the Company or the Subsidiary Guarantors, as the
case may be, would be obligated to pay such Additional Amounts if a payment in
respect of the Securities or the Subsidiary Guaranty were then due, and (b) at
the time any such redemption notice is given, such obligation to pay Additional
Amounts must remain in effect. Prior to any redemption of the Securities, the
Company shall deliver to the Trustee or any paying agent an Officer's
Certificate stating that the Company is entitled to effect such redemption and
setting forth a statement of facts showing that the conditions precedent to the
right to effect such redemption have occurred.
6. MANDATORY REDEMPTION
To the extent that, after the close of business on July 31, 1999, the
amount of cash and the fair market value (as determined by the Board of
Directors in good faith) of securities on deposit in escrow with the Escrow
Agent exceeds $5.0 million, Millenium shall use all such remaining Escrowed
Proceeds to redeem as much of Securities as can be redeemed with such Escrowed
Proceeds at a redemption price equal to the sum of 101% of the Accreted Value of
such Securities and the accrued and unpaid interest thereon to the Special
Mandatory Redemption Date (as defined below) (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date). For purposes hereof, "Special Mandatory Redemption Date"
means August 31, 1999.
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 and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Securities
(or such portions thereof) called for redemption.
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8. PUT PROVISIONS
Upon a Change of Control, any Holder of Securities will have the right
to cause the Company to repurchase all or any part of the Securities of such
Holder at a repurchase price equal to 101% of the Accreted Value of the
Securities to be repurchased 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.
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 secured basis by each of the Subsidiary Guarantors.
10. SECURITY
Securities will be secured by the Mortgages on the Mortgaged Vessels,
the security interests created pursuant to the Indenture and the Security
Agreements, the Escrowed Property and all the issued and outstanding capital
stock of the Subsidiary Guarantors.
11. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons in denominations
of $1,000 principal amount at maturity and whole multiples of $1,000 principal
amount at maturity. 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 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 obligations under the Securities 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 at maturity outstanding 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
at maturity outstanding of the Securities. Subject to certain exceptions set
forth in the Indenture, without the consent of any Securityholder, the Company,
the Subsidiary Guarantors and the Trustee may amend the Indenture 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
guarantees with respect
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to the Securities or to secure the Securities, or to add additional covenants or
surrender rights and powers conferred on the Company or the Subsidiary
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 acceleration or otherwise, or failure by the Company 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 lapse of time; (iv) certain accelerations (including
failure to pay within any grace period after final maturity) of other
Indebtedness of the Company if the amount accelerated (or so unpaid) exceeds $5
million; (v) certain events of bankruptcy or insolvency with respect to the
Company and the Significant Subsidiaries; (vi) certain judgments or decrees for
the payment of money in excess of $5 million; (vii) a Subsidiary Guarantee
ceases to be in full force and effect (other than in accordance with the terms
of such Subsidiary Guarantee); and (viii) the security interest under the
Security Agreements ceases to be in full force and effect for any reason (other
than by operation of the provisions of the Indenture and the Security Agreements
and certain other reasons specified in this Indenture). If an Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount at maturity 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 at maturity 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
or the Trustee shall not have any liability for any obligations of the Company
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).
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21. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
22. 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,
without limitation, the obligations of the Holders with respect to a
registration and the indemnification of the Company to the extent provided
therein.
23. 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:
C/O MAPLES AND CALDER
P.O. BOX 309
SOUTH CHURCH STREET
GEORGE TOWN, GRAND CAYMAN
CAYMAN ISLANDS, BRITISH WEST INDIES
ATTENTION OF GARETH GRIFFITHS, ESQ.
- - - - ------------------------------------------------------------
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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.
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OPTION OF HOLDER TO ELECT PURCHASE
IF YOU WANT TO ELECT TO HAVE THIS SECURITY PURCHASED BY THE COMPANY
PURSUANT TO SECTION 4.07 OR 4.13 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 4.07 OR 4.13 OF THE INDENTURE, STATE THE AMOUNT
OF THE PRINCIPAL AMOUNT AT MATURITY:
$
DATE: __________________ YOUR SIGNATURE: ____________________________
(SIGN EXACTLY AS YOUR NAME APPEARS
ON THE OTHER SIDE OF THE SECURITY)
SIGNATURE GUARANTEE:_______________________________________
(SIGNATURE MUST BE GUARANTEED BY A
MEMBER FIRM OF THE NEW YORK STOCK EXCHANGE OR A COMMERCIAL
BANK OR TRUST COMPANY)