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EXHIBIT 2.19
[FACE OF NOTE]
TEEKAY SHIPPING CORPORATION
8.32% First Preferred Ship Mortgage Note Due 2008
CUSIP879006 AA 2
No. $
TEEKAY SHIPPING CORPORATION, a Liberian corporation (the "Company", which
term includes any successor under the Indenture hereinafter referred to), for
value received, promises to pay to , or its registered assigns, the
principal sum of ($ ), on February 1, 2008.
Initial Interest Rate: 8.32% per annum.
Interest Payment Dates: February 1 and August 1, commencing August 1,
1996.
Regular Record Dates: January 15 and July 15.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers.
Date:
TEEKAY SHIPPING CORPORATION
By:
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Name:
Title:
By:
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Name:
Title:
(Form of Trustee's Certificate of Authentication)
This is one of the 8.32% First Preferred Ship Mortgage Notes Due 2008 (the
"Notes") described in the within-mentioned Indenture.
UNITED STATES TRUST COMPANY
OF NEW YORK, as Trustee
By:
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Authorized Signatory
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[REVERSE SIDE OF NOTE]
TEEKAY SHIPPING CORPORATION
8.32% FIRST PREFERRED SHIP MORTGAGE NOTE DUE 2008
1. Principal and Interest.
The Company will pay the principal of this Note on February 1, 2008.
The Company promises to pay interest on the principal amount of this Note
on each Interest Payment Date, as set forth below, at the rate of 8.32% per
annum.
Interest will be payable semiannually (to the Holders of record of the
Notes at the close of business on the January 15 or July 15 immediately
preceding the Interest Payment Date) on each Interest Payment Date, commencing
August 1, 1996.
Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from January 29, 1996;
provided that, if there is no existing default in the payment of interest and if
this Note is authenticated between a Regular Record Date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue from
such Interest Payment Date. 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 and premium, if any,
and interest on overdue installments of interest, to the extent lawful, at a
rate per annum that is equal to the rate otherwise payable.
2. Method of Payment.
The Company will pay interest (except defaulted interest and subject to the
provisions of the third paragraph of Section 1 hereof) on the principal amount
of the Notes on each February 1 and August 1 to the persons who are Holders (as
reflected in the Security Register at the close of business on each January 15
and July 15 immediately preceding the Interest Payment Date), in each case, even
if the Note is cancelled on registration of transfer or registration of exchange
after such record date; provided that, with respect to the payment of principal,
the Company will make payment to the Holder that surrenders this Note to a
Paying Agent on or after February 1, 2008.
The Company will pay principal, premium, if any, and interest in money of
the United States that at the time of payment is legal tender for payment of
public and private debts. However, the Company may pay principal, premium, if
any, and interest by its check payable in such money. The Company may
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mail an interest check to a Holder's registered address (as reflected in the
Security Register). If a payment date is a date other than a Business Day at a
place of payment, payment may be made at that place on the next succeeding day
that is not a Business Day and no interest shall accrue for the intervening
period.
3. Paying Agent and Registrar.
Initially, the Trustee will act as authenticating agent, Paying Agent and
Registrar. The Company may change any authenticating agent, Paying Agent or
Registrar without notice to the Holders. The Company, any Subsidiary or any
Affiliate of any of them may act as Paying Agent (other than for purposes of
Article 11 of the Indenture), Registrar or co-registrar.
4. Indenture; Limitations.
The Company issued the Notes under an Indenture dated as of January 29,
1996 (the "Indenture"), among the Company, VSSI Oceans Inc., a Liberian
corporation, VSSI Atlantic Inc., a Liberian corporation, VSSI Appian Inc., a
Liberian corporation, Senang Spirit Inc., a Bahamian corporation, Exuma Spirit,
a Bahamian corporation, Nassau Spirit Inc., a Bahamian corporation, and Andros
Spirit Inc., a Bahamian corporation, as guarantors of the Notes (each,
individually a "Guarantor" and, collectively, the "Guarantors"), and United
States Trust Company of New York, as trustee (the "Trustee"). Capitalized terms
herein are used as defined in the Indenture unless otherwise indicated. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act. The Notes are subject to
all such terms, and Holders are referred to the Indenture and the Trust
Indenture Act for a statement of all such terms. To the extent permitted by
applicable law, in the event of any inconsistency between the terms of this Note
and the terms of the Indenture, the terms of the Indenture shall control.
The Indenture limits the original aggregate principal amount of the Notes
to $225 million.
5. Security.
Unless and until the Termination and Release shall have occurred, the Notes
and the obligations of the Company and the Guarantors under the Indenture shall
be secured by (a) a pledge by the Company to the Trustee of all of the capital
stock of the Guarantors, and (b) guarantees by each of the Guarantors in favor
of the Trustee. In addition, unless and until the Termination and Release shall
have occurred, the Notes and such obligations shall be secured by (a) first
preferred mortgages by each Guarantor on the Mortgaged Vessel owned by such
Guarantor, (b) assignments by each Guarantor of such Guarantor's interest in the
time charter with
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respect to its Mortgaged Vessel, (c) general assignments by each Guarantor of
such Guarantor's interest in freights and hires with respect to its Mortgaged
Vessel and (d) assignments by each Guarantor of such Guarantor's interest in
certain insurance policies with respect to its Mortgaged Vessel.
The Indenture and the related security documents prescribe certain terms
and conditions, applicable until the Termination and Release shall have
occurred, for the ownership, operation and maintenance of the Mortgaged Vessels
and the performance of the related charters, freights and hires and insurance
policies. Upon terms and conditions prescribed in the Indenture, a Guarantor may
sell a Mortgaged Vessel or request that a Mortgaged Vessel be released from the
Lien of the Indenture and the related security documents.
6. Fall-away Event
In the event that (i) the Notes achieve Investment Grade Status on a pro
forma basis after giving effect to the termination of the Security Documents and
the release of the Collateral from the Liens of the Indenture and the Security
Documents, (ii) no Event of Default shall have occurred and be continuing and
(iii) on a pro forma basis, after giving effect to the termination of the
Security Documents and the release of the Collateral from the Liens of the
Indenture and the Security Documents, the aggregate amount of all Indebtedness
of the Company that is secured by a Lien plus all Indebtedness of Restricted
Subsidiaries is not greater than 15% of the Company's Consolidated Tangible
Assets, upon the request of the Company and the Guarantors and subject to the
delivery of appropriate documentation to the Trustee, the Subsidiary Guarantees
will be terminated, the Collateral securing the Obligations of the Company and
the Guarantors under the Indenture and the Security Documents will be released
and certain covenants under the Indenture will no longer be applicable to the
Company and the Restricted Subsidiaries. See Sections 5 and 15. In addition,
Teekay's mandatory redemption obligations upon a loss or sale of a Mortgaged
Vessel shall no longer be applicable. See Section 9.
7. Repurchase upon a Change in Control Triggering Event.
Upon the occurrence of a Change in Control Triggering Event, each Holder
shall have the right to require the repurchase of its Notes by the Company in
cash pursuant to the offer described in the Indenture at a purchase price equal
to 101% of the principal amount thereof, plus accrued interest, if any, to the
date of purchase (the "Change of Control Payment").
A notice of such Change in Control Triggering Event will be mailed within
30 days after any Change in Control Triggering Event occurs to each Holder at
such Holder's last address as it appears in the Security Register. Notes in
original denominations larger than $1,000 may be sold to the Company in part. On
and after the Change in Control Payment Date, interest ceases to accrue on Notes
or portions of Notes surrendered for purchase by the Company, unless the Company
defaults in the payment of the Change in Control Payment.
8. Sinking Fund.
The Notes are subject to redemption of $45 million aggregate principal
amount thereof (subject to adjustment as provided below) on February 1 in each
year commencing February 1, 2004 through the operation of a sinking fund, at a
Redemption Price equal to 100% of principal amount, together with accrued
interest to the Redemption Date, all as provided in the Indenture. Upon any
redemption of Notes in connection with a reduction in the number of Mortgaged
Vessels securing the Notes, whether as a result of the sale of a Mortgaged
Vessel, or an Event of Loss with respect to a Mortgaged Vessel, each remaining
sinking fund payment will be proportionately reduced by an amount equal to the
product of the sinking fund payment otherwise due multiplied by the Vessel
Percentage of the Mortgaged Vessel
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so lost or sold. Notes acquired by the Company and delivered to the Trustee
may, at the Company's option, be credited against subsequent sinking fund
requirements.
9. Mandatory Redemption.
Unless and until the Termination and Release shall have occurred, under
certain circumstances the Notes will be subject to mandatory redemption, in
whole or in part, at a Redemption Price equal to (a) 100% of their principal
amount, together with accrued interest to the Redemption Date, in the event of a
loss, condemnation, requisition or other Event of Loss (as defined in the
Indenture) affecting any of the Mortgaged Vessels, or (b) the greater of (i)
100% of their principal amount, together with accrued interest to the Redemption
Date, and (ii) the sum of the present values of the remaining scheduled payments
of principal and interest thereon discounted to the Redemption Date on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at
the Treasury Rate plus 50 basis points, together with accrued interest to the
Redemption Date, in the event of a permitted sale of a Mortgaged Vessel by a
Guarantor.
10. Denominations; Transfer; Exchange.
The Notes are in registered form, without coupons, in denominations of
$1,000 and multiples of $1,000 in excess thereof. A Holder may register the
transfer or exchange of Notes in accordance with the Indenture. The Registrar
may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture. The Registrar need not register the transfer or
exchange of any Notes (a) selected for redemption (except the unredeemed portion
of any Notes being redeemed in part) or (b) for a period of 15 business days
after a notice of selection of Notes to be redeemed is mailed to Holders or 15
business days before the due date of any payment of principal on the Notes.
11. Persons Deemed Owners.
A Holder may be treated as the owner of a Note for all purposes.
12. Unclaimed Money.
If money for the payment of principal, premium, if any, or interest remains
unclaimed for two years, the Trustee and the Paying Agent will pay the money
back to the Company at its request. After that, Holders entitled to the money
must look to the Company for payment as general creditors, unless an applicable
law designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
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13. Discharge Prior to Redemption or Maturity.
If the Company complies with certain conditions set forth in the
Indenture, including the deposit with the Trustee of certain amounts of money or
U.S. Government Obligations, the Company will be discharged from the Indenture
and the Notes, except in certain circumstances for certain sections thereof, or
from certain covenants set forth in the Indenture.
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Notes may be amended or
supplemented, and any existing default or compliance with any provision may be
waived with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding. Without notice to or the consent of any
Holder, the Company and the Trustee may amend or supplement the Indenture or the
Notes to, among other things, cure any ambiguity, defect or inconsistency and
make any change therein that does not materially and adversely affect the rights
of any Holder.
15. Restrictive Covenants.
Unless and until the Termination and Release shall have occurred, the
Indenture imposes certain limitations on the ability of the Company and its
Restricted Subsidiaries, among other things, to Incur additional Indebtedness,
incur or create liens, make Restricted Payments, use the proceeds from Asset
Sales, engage in transactions with Affiliates or merge or consolidate with, or
transfer substantially all of its assets to, another entity. Following the
occurrence of the Termination and Release, the Indenture imposes certain
limitations on the ability of (a) the Company and its Restricted Subsidiaries,
among other things, to incur or create Liens or enter into certain sale and
leaseback transactions, and (b) the Restricted Subsidiaries to Incur additional
Indebtedness. Within 60 days after the end of each fiscal quarter (120 days
after the end of the last fiscal quarter of each fiscal year), the Company must
report to the Trustee regarding compliance with such limitations.
16. Defaults and Remedies.
The following events constitute "Events of Default" under the Indenture:
(a) default in the payment of principal of (or premium, if any, on) any Note
when the same becomes due and
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payable at maturity, upon acceleration, redemption or otherwise; (b) default in
the payment of interest on any Note when the same becomes due and payable, and
such default continues for a period of 30 days; (c) default in the deposit of
any Sinking Fund or other mandatory redemption payment, when and as due by the
terms of the Indenture; (d) the Company or, if prior to the occurrence of the
Termination and Release, any Guarantor defaults in the performance of or
breaches any other covenant or agreement of the Company or any Guarantor in the
Indenture or under the Notes or in the Security Documents, if applicable, and
such default or breach continues for a period of 30 consecutive days after the
date on which written notice of such default or breach, requiring the Company or
a Guarantor to remedy the same, shall have been given to the Company or such
Guarantor by the Trustee, or to the Company, such Guarantor and the Trustee by
the Holders of at least 25% in aggregate principal amount of the Notes at the
time Outstanding; (e) there occurs with respect to any issue or issues of
Indebtedness of the Company or any of its Restricted Subsidiaries having an
outstanding aggregate principal amount of $10 million or more individually or
$20 million or more in the aggregate for all such issues of all such Persons,
whether such Indebtedness now exists or shall hereafter be created, an event of
default that has caused the holder thereof to declare such Indebtedness to be
due and payable prior to its Stated Maturity and such Indebtedness has not been
discharged in full or such acceleration has not been rescinded or annulled (by
cure, waiver or otherwise) within 30 days of such acceleration; provided,
however, that any secured Indebtedness in excess of the limits set forth above
shall be deemed to have been declared due and payable if the lender in respect
thereof takes any action to enforce a security interest against, or an
assignment of, or to collect on, seize, dispose of or apply any assets of the
Company or its Subsidiaries (including lock-box and other similar arrangements)
securing such Indebtedness, or to set off against any bank account of the
Company or its Subsidiaries (in excess of $10 million); (f) any final judgment
or order (not covered by insurance) for the payment of money in excess of $10
million individually or $20 million in the aggregate for all such final
judgments or orders against all such Persons (treating any deductibles,
self-insurance or retention as not so covered) shall be rendered against the
Company or any Restricted Subsidiary and shall not be paid or discharged, and
there shall be any period of 30 consecutive days following entry of the final
judgment or order in excess of $10 million individually or that causes the
aggregate amount for all such final judgments or orders outstanding and not paid
or discharged against all such Persons to exceed $20 million during which a stay
of enforcement of such final judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; (g) certain events of bankruptcy or
insolvency in respect of the Company or any Restricted Subsidiary; (h) the
Company and/or one or more of its Restricted Subsidiaries fails to make (x) at
the final (but not any interim) fixed maturity of any issue of Indebtedness a
principal payment of $10 million or more or (y) at the final (but not any
interim) fixed maturity of more than one issue of such Indebtedness principal
payments aggregating $20 million or more and, in the case of clause (x), such
defaulted payment shall not have been made, waived or extended within 30 days of
the payment default and, in the case of clause (y), all such defaulted payments
shall not have been made, waived or extended within 30 days of the payment
default that causes
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the amount described in clause (y) to exceed $20 million; (i) if prior to the
occurrence of the Termination and Release, any Security Document ceases to be in
full force and effect for a period of 30 days; or (j) if prior to the occurrence
of the Termination and Release, any Charter ceases to be in full force and
effect or is repudiated prior to the expiration of the term of such Charter.
If an Event of Default (as defined in the Indenture) occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding may declare all the Notes to be due and
payable. If a bankruptcy or insolvency default with respect to the Company or
any Restricted Subsidiary occurs and is continuing, the Notes automatically
become due and payable. Holders may not enforce the Indenture or the Notes
except as provided in the Indenture. The Trustee may require indemnity
reasonably satisfactory to it before it enforces the Indenture or the Notes.
Subject to certain limitations, Holders of at least a majority in aggregate
principal amount of the Notes then outstanding may direct the Trustee in its
exercise of any trust or power.
17. Trustee Dealings with Company.
Subject to applicable provisions of the Trust Indenture Act, the Trustee
under the Indenture, in its individual or any other capacity, may make loans to,
accept deposits from, perform services for, and otherwise deal with the Company
or its Affiliates and may otherwise deal with the Company or its Affiliates as
if it were not the Trustee.
18. No Recourse Against Others.
No incorporator or any past, present or future partner, shareholder, other
equity holder, officer, director, employee or controlling person, as such, of
the Company or of any successor Person shall have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Notes.
19. Authentication.
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
20. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an assignee,
such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties),
JT TEN (= joint tenants with right of survivorship and not as tenants in
common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act).
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The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to Teekay Shipping
Corporation, Tradewinds Building, Sixth Floor, Bay Street, P.O. Box SS-6293,
Nassau, Commonwealth of the Bahamas, Attention: Secretary.
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[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
Please print or typewrite name and address including zip code of assignee
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
attorney to transfer said Note on the books of the Company with full power of
substitution in the premises.
Date:
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or
any change whatsoever.
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OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to Section
4.10 or Section 4.23 of the Indenture, check the Box: [ ].
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.10 or Section 4.23 of the Indenture, state the amount (in
original principal amount of $1,000 or integral multiples thereof, unless less
than $1,000 principal amount is outstanding):
$ .
Date:
Your Signature:
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Name:
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(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:
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Name:
---------------------------------
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