AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON JUNE ____, 1999
[REGISTRATION NO.33-_________]
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM F-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
NAVIGATOR GAS TRANSPORT PLC,
NAVIGATOR GAS (IOM I-A) LIMITED,
NAVIGATOR GAS (IOM I-B) LIMITED,
NAVIGATOR GAS (IOM I-C) LIMITED,
NAVIGATOR GAS (IOM I-D) LIMITED AND
NAVIGATOR GAS (IOM I-E) LIMITED,
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C> <C>
ISLE OF MAN 8611 N/A
ISLE OF MAN 8611 N/A
ISLE OF MAN 8611 N/A
ISLE OF MAN 8611 N/A
ISLE OF MAN 8611 N/A
ISLE OF MAN 8611 N/A
(State or Other Jurisdiction of (Primary Standard industrial (I.R.S. Employer Identification
Incorporation or Organization) Classification Code Number) Numbers)
</TABLE>
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1 Castle Street, Castletown
Isle of Man IM9 1LF
0 11-44-1-62-4824011
(Address, including zip code, and
telephone number, including area code,
of principal executive offices of
Navigator Gas Transport PLC)
CT CORPORATION SYSTEM
1623 BROADWAY
NEW YORK, NEW YORK 10019
212-246-5070
(Name, address, including zip code, and
telephone number, including area code,
of agent for service of Navigator Gas Transport PLC)
----------------------
COPIES TO:
KEITH L. KRASNEY NUNZIO C. LI POMI
GRAHAM & JAMES LLP CAMBRIDGE FUND MANAGEMENT LLC
885 THIRD AVENUE 750 LEXINGTON AVENUE, 30TH FLOOR
NEW YORK, NEW YORK 10022 NEW YORK, NEW YORK 10022
212-848-1088 212-527-2525
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
IF THE SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED IN CONNECTION
WITH THE FORMATION OF A HOLDING COMPANY AND THERE IS COMPLIANCE WITH GENERAL
INSTRUCTION G, CHECK THE FOLLOWING BOX:
/ /
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING PURSUANT
TO RULE 462(b) 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 THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(d) 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:
/ /
----------------------
2
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CALCULATION OF REGISTRATION FEE
<CAPTION>
Proposed maximum Proposed maximum Amount of
Title of each class of Amount to offering price offering price registration
securities to be registered be registered (1) per unit (1) (2) per unit (1) (2) fee (3)
<S> <C> <C> <C> <C>
10 1/2% First Priority Ship
Mortgage Notes $217,000,000 100% $217,000,000 $60,326.00
12% Second Priority Ship
Mortgage Notes $87,000,000 100% $87,000,000 $24,186.00
Total $304,000,000 100% $304,000,000 $84,512.00
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(1) Estimated solely for the purpose of calculating the registration fee.
(2) Exclusive of accrued interest, if any.
(3) Calculated pursuant to Rule 457.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS 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.
3
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CROSS REFERENCE SHEET FURNISHED PURSUANT TO RULE 404(a)
<CAPTION>
Items and Captions in Form F-4 Location in Prospectuses
------------------------------ ------------------------
<S> <C>
1. Forepart of Registration Statement and Outside Front Cover Page of
Prospectus ....................................................... Cover Page of Prospectus Forepart
of Registration Statement and
Outside Front*
2. Inside Front and Outside Back Cover
Pages of Prospectus............................................... Back Cover Page of Prospectus*
Inside Front Cover Page of
Prospectus and Outside
3. Risk Factors, Ratio of Earnings to Fixed Charges, and
Other Information ................................................ Prospectus Summary; Risk Factors
4. Terms of the Transaction ......................................... Prospectus Summary; Description of
the New Notes
5. Pro Forma Financial Information................................... Capitalization, Management's
Discussion and Analysis of
Financial Condition and Results of
Operations; Consolidated
Statements of Financial Condition
6. Material Contacts with Company Being
Acquired.......................................................... *
7. Additional Information Required for
Reoffering by Persons and Parties
Deemed to be Underwriters......................................... Prospectus Summary; the Exchange
Offer; Plan of Distribution
8. Interests of Named Experts and Counsel............................ *
9. Disclosure of Commission Position on Indemnification for
Securities Act Liabilities........................................ See Part II
10. Information with Respect to F-3 Registrants....................... *
11. Incorporation of Certain Information
by Reference...................................................... *
12. Information with Respect to F-2
or F-3 Registrants................................................ *
13. Incorporation of Certain Information
by Reference...................................................... *
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14. Information With Respect to Registrants Other
than F-3 or F-2 Registrants
(a) Description of Business...................................... Prospectus Summary, Gas Carrier
Industry, Business, Management's
Discussion and Analysis of
Financial Condition
(b) Description of Property...................................... Prospectus Summary, Business
(c) Legal Proceedings............................................ *
(d) Market Price of and Dividends on the Registrants' Common
Equity and Related Stockholder Matters....................... *
(e) Financial Information........................................ *
(f) Selected Financial Data...................................... Consolidated Statements of
Financial Condition
(g) Supplementary Financial Information.......................... Consolidated Statements of
Financial Condition
(h) Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... Management's Discussion and
Analysis of Financial Condition
and Results of Operations
(i) Change in and Disagreements With Accountants on Accounting
and Financial Disclosures................................... *
(j) Quantitative and Qualitative Disclosures About Market
Desk Information With Respect to F-3 Companies............... *
15. Information With Respect to F-3 Companies......................... *
16. Information With Respect to F-2 or F-3
Companies......................................................... *
17. Information if Proxies, Consents or Authorizations are to
be Solicited ..................................................... *
18. Information if Proxies, Consents or
Authorizations are to be Solicited
or in an Exchange Offer........................................... Summary of Prospectus; The
Exchange Offer; Description of the
Notes
*Answer negative or item inapplicable
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5
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SUBJECT TO COMPLETION, DATED JUNE 22, 1999
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT ENTER INTO THE EXCHANGE OF 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 OR EXCHANGE THESE SECURITIES
AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES OR EXCHANGE THESE
SECURITIES IN ANY STATE WHERE THE OFFER, SALE OR EXCHANGE IS NOT PERMITTED.
COPIES OF THIS DOCUMENT HAVE BEEN, TOGETHER WITH CERTAIN OTHER DOCUMENTS
REFERRED TO HEREIN, REGISTERED WITH THE REGISTRAR OF COMPANIES IN THE ISLE OF
MAN PURSUANT TO SECTION 38 OF THE COMPANIES ACT 1931 (AS AMENDED) OF THE ISLE OF
MAN.
PROSPECTUS
NAVIGATOR GAS TRANSPORT PLC
OFFER TO EXCHANGE ALL
10 1/2% FIRST PRIORITY SHIP MORTGAGE NOTES DUE 2007
$217,000,000 PRINCIPAL AMOUNT OUTSTANDING
FOR
10 1/2% FIRST PRIORITY SHIP MORTGAGE NOTES DUE 2007
$217,000,000 PRINCIPAL AMOUNT
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AND
12% SECOND PRIORITY SHIP MORTGAGE NOTES DUE 2007
$87,000,000 PRINCIPAL AMOUNT OUTSTANDING
FOR
12% SECOND PRIORITY SHIP MORTGAGE NOTES DUE 2007
$87,000,000 PRINCIPAL AMOUNT
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
EXPIRATION. The exchange offer expires at 5:00 p.m., July __, 1999, unless
we extend it.
NO LISTING. We do not intend to list the new notes on any exchange and,
therefore, no active public market is anticipated.
YOU SHOULD CAREFULLY REVIEW THE RISK FACTORS BEGINNING ON PAGE 15 OF THIS
PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is ________ __, 1999.
<PAGE>
Table of Contents
PAGE
----
Enforceability of Civil Liabilities....................................... 1
Where You Can Find More Information....................................... 1
Prospectus Summary........................................................ 3
The Company............................................................... 3
The Exchange Offer........................................................ 4
Summary of Terms of the New Notes......................................... 8
Risk Factors.............................................................. 15
Safe Harbor for Forward-looking Statements................................ 24
The Exchange Offer........................................................ 25
Purpose and Effect of the Exchange Offer.................................. 25
Terms of the Exchange Offer............................................... 25
Expiration Date; Extensions; Amendments................................... 26
Interest On the New Notes................................................. 27
Procedures for Tendering.................................................. 27
Guaranteed Delivery Procedures............................................ 29
Exchange Agents........................................................... 30
Fees and Expenses......................................................... 31
Transfer Taxes............................................................ 32
Accounting Treatment...................................................... 32
Resale of New Notes....................................................... 32
Consequences of Failure to Exchange....................................... 33
Other .................................................................... 34
Use of Proceeds........................................................... 35
Management's Discussion and Analysis of Financial
Condition and Results of Operations.................................... 38
Overview ................................................................. 38
Operations................................................................ 39
Capital Resources and Liquidity........................................... 40
Results of Operations..................................................... 40
Gas Carrier Industry...................................................... 40
Overview ................................................................. 40
i
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Table of Contents
(Continued)
PAGE
----
Supply of Gas Carriers.................................................... 41
Trends in Petrochemical Gas Production and Seaborne Trade................. 45
Demand for Gas Carriers................................................... 46
The Charter Market........................................................ 49
Industry Participants..................................................... 50
Business ................................................................. 50
General .................................................................. 50
Construction of Major Petrochemical Production and Terminal Facilities.... 50
An Attractive Market for Seaborne Trade of Ethylene....................... 51
Barriers to Entry......................................................... 51
Strong Secondhand Vessel Values........................................... 51
Business Strategy......................................................... 51
The Vessels............................................................... 53
Construction Period....................................................... 54
The Builders and Tractebel Gas Engineering................................ 55
Building Contracts........................................................ 56
Purchase Price............................................................ 57
Building Contract Guarantees and Performance Bonds........................ 61
Marketing and Commercial Management....................................... 62
Operations................................................................ 63
Inspection................................................................ 64
Environmental Regulations................................................. 65
The Company, the Manager and the Stockholders............................. 71
The Stockholders of Navigator Holdings.................................... 71
Management................................................................ 72
Executive Officers and Directors.......................................... 72
Compensation of Executive Officers and Directors of the Company........... 75
Principal Stockholders.................................................... 75
The Equity Financing...................................................... 76
Stockholders Agreement.................................................... 77
ii
<PAGE>
Table of Contents
(Continued)
PAGE
----
Certain Transactions...................................................... 78
The Manager............................................................... 78
GEBAB .................................................................... 78
Stockholders.............................................................. 78
UK Lease ................................................................. 79
Description of the New Notes.............................................. 80
General .................................................................. 80
Units and Warrants........................................................ 80
Exchange ................................................................. 80
Terms of the New Notes.................................................... 81
Redemptions............................................................... 82
Guarantees................................................................ 86
Security ................................................................. 87
Interest Draws On the Letter of Credit.................................... 88
Ranking .................................................................. 89
Mandatory Offers to Purchase New Notes.................................... 90
Registration Rights....................................................... 94
Trust Accounts............................................................ 95
Priorities of Payment.................................................... 102
Application of Proceeds Following an Event of Default.................... 104
Certain Covenants........................................................ 105
Defaults ................................................................ 111
No Personal Liability of Directors, Officers,
Employees and Stockholders ............................................ 114
Amendments and Waivers................................................... 114
Transfer ................................................................ 115
Defeasance............................................................... 116
Concerning the Trustees.................................................. 117
Governing Law............................................................ 117
Enforceability of Judgments.............................................. 117
Consent to Jurisdiction and Service...................................... 118
Certain Definitions...................................................... 118
iii
<PAGE>
Table of Contents
(Continued)
PAGE
----
Description of the Units and the Warrants................................ 123
Book-Entry Registration.................................................. 124
Description of the Letter of Credit Reimbursement Agreement.............. 125
The Mortgages............................................................ 128
General ................................................................. 128
Certain Representations and Warranties................................... 128
Certain Covenants........................................................ 129
Insurance................................................................ 130
Insurance Proceeds....................................................... 131
Events of Default Under the Mortgage..................................... 131
Remedies ................................................................ 132
Material United States Federal Income Tax Consequences................... 135
Certain Isle of Man Tax Consequences..................................... 136
Plan of Distribution..................................................... 136
Notice to Canadian Residents............................................. 137
Resale Restrictions...................................................... 137
Representations of Purchasers............................................ 137
Rights of Action (Ontario Purchasers).................................... 138
Enforcement of Legal Rights.............................................. 138
Notice to British Columbia Residents..................................... 138
Taxation and Eligibility for Investment.................................. 138
Rating .................................................................. 138
Legal Matters............................................................ 139
Experts ................................................................. 139
Glossary of Shipping Terms............................................... 139
Appendices
Consolidated Financial Statements of Navigator Holdings Plc.............. A-1
Isle of Man Supplementary Schedule....................................... B-1
iv
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ENFORCEABILITY OF CIVIL LIABILITIES
We and each of the Owners are organized under the laws of the Isle of Man.
A substantial portion of our assets and the assets of the Owners is or may be
located outside the United States. As a result, it may be difficult for
investors to enforce outside the United States judgments against us or the
Owners obtained in the United States in any actions, including actions
predicated on the civil liability provisions of the federal securities laws of
the United States. Certain of our directors and directors of the Owners are
residents of jurisdictions other than the United States, and all or a
significant portion of the assets of these persons are or may be located outside
the United States. As a result, it may be difficult for investors to effect
service of process within the United States upon these persons or to enforce
against them in United States courts judgments predicated upon the civil
liability provisions of the federal securities laws of the United States. There
is currently no treaty between the United States and the Isle of Man providing
for reciprocal recognition and enforcement of judgments in civil and commercial
matters, and therefore a final judgment for the payment of money rendered by any
federal or state court in the United States based on civil liability, whether or
not predicated solely upon the federal securities laws, would not be
automatically enforceable in the Isle of Man. We and the Owners have irrevocably
submitted to the non-exclusive jurisdiction of the federal and state courts in
The City of New York for the purpose of any legal suit, action or proceeding
against them in connection with the offering and sale of the notes.
The foregoing discussion is based on the advice of Cains, counsel to us
with respect to matters of Isle of Man law.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form F-4 under the
Securities Act of 1933, as amended, with respect to our offering of the new
notes. This prospectus, which constitutes part of the registration statement,
does not contain all of the information in the registration statement. You will
find additional information about us and the new notes in the registration
statement. All statements made in this prospectus concerning the provisions of
legal documents are not necessarily complete and you should read the documents
which are filed as exhibits to the registration statement or otherwise filed by
us with the SEC.
You may read and copy the registration statement, including exhibits, and
our periodic reports, registration statements and other information filed with
the SEC at the public reference facilities maintained by the SEC at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the SEC's
regional offices located at 7 World Trade Center, New York, New York 10048 and
at Citicorp Center, 500 West Madison Street (Suite 1400), Chicago, Illinois
60661. You may obtain copies from the Public Reference Section of the SEC at 450
Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Please call the
SEC at 1-800-SEC-0330 for more information on the public reference rooms. The
SEC also maintains a web site at http://www.sec.gov which contains our reports,
registration statements and proxy and information statements and other
information.
You should not assume that the information in this prospectus is accurate
as of any date other than the date of this prospectus, or the respective dates
of those documents we incorporate by reference, regardless of the time of
delivery of this prospectus. You should only
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rely on the information provided in this prospectus or that we have referred you
to. We have not authorized anyone else to provide you with different
information.
As a foreign private issuer, we are exempt from the provisions of the
Securities Exchange Act of 1934, as amended, prescribing the furnishing and
content of proxy statements and requiring reporting of insider purchases and
sales.
We are not currently subject to the periodic reporting and other
informational requirements of the Exchange Act. We will furnish to you and the
trustees, for so long as any of the new notes remain outstanding, and file with
the SEC, or cause to be so filed as part of our financial statements (1) all
quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if we were required to
file those forms, including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations," (2) with respect to the annual information
only, a report thereon by independent public accountants and (3) all reports
that would be required to be filed with the SEC on Form 8-K if we were required
to file those reports.
Copies of the documents mentioned in this prospectus can be obtained
without charge by any recipient of this prospectus by contacting us at Navigator
Gas Transport PLC, 1 Castle Street, Castletown, Isle of Man IM9 1LF. To obtain
timely delivery of requested documents, you must request the information no
later than 5 business days before the expiration date of the exchange offer.
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PROSPECTUS SUMMARY
This summary highlights selected information from this prospectus and does
not contain all of the information that is important to you. For a more complete
understanding of the exchange offer, we encourage you to read all of the
information in this prospectus carefully, including the "Risk Factors" section,
before you exchange your old notes. Unless otherwise indicated, all references
in this prospectus to "we," "us," "ours" or "Navigator Gas Transport" mean
Navigator Gas Transport PLC. We will use the word "Owner" to refer to any of
Navigator Gas (IOM I-A) Limited, Navigator Gas (IOM I-B) Limited, Navigator Gas
(IOM I-C) Limited, Navigator Gas (IOM I-D) Limited and Navigator Gas (IOM I-E)
Limited and the word "Owners" to refer to all of them. Navigator Holdings PLC is
the parent company of Navigator Gas Transport. We will use the words "Navigator
Holdings" to refer to Navigator Holdings PLC. We will use the words "the
Company" to refer together to Navigator Gas Transport, the Owners and Navigator
Holdings.
THE COMPANY
We and the Owners were formed in 1997 for the purpose of building and
operating a fleet of five state-of-the-art 22,000 cubic meter semi-refrigerated
ethylene-capable gas carriers. The vessels are designed to transport the entire
range of petrochemical gases, including ethylene, propylene, vinyl chloride
monomer butadiene and crude C4, as well as liquefied petroleum gases such as
ethane, propane and butane. There are no ethylene-capable semi-refrigerated gas
carriers currently operating or under construction that will be larger than the
vessels. Each vessel of the Owners will have four separate gas cargo tanks,
segregated pumping and piping systems and two separate deck tanks, allowing each
vessel to carry up to three separate temperature controlled cargoes
simultaneously.
When constructed, the Owners' vessels will be among the most versatile gas
carriers in the world in terms of cargo options, ease and speed of loading and
discharging cargoes and adaptability for route scheduling. The vessels'
capabilities will minimize operating costs, reduce voyage times and maximize
vessel utilization. The vessels' larger cargo capacities, compared to the
existing ethylene-capable fleet, offer significant economies of scale,
especially for long-haul transport.
Each Owner will own one and only one vessel. We will own all of the Owners.
We issued the old notes. We loaned the proceeds to the Owners to fund the
construction of their vessels, to pay certain expenses and to pay interest on
the notes while the vessels are constructed. The Owners, fully and
unconditionally, guaranteed the old notes and will guarantee, fully and
unconditionally, the new notes. The vessels will be constructed by Jiangnan
Shipyard and China Shipbuilding Trading Company, Limited under the technical
supervision of Martime Asia Ltd., in coordination with Germanischer Lloyd, an
independent vessel classification society. Jiangnan and China Shipbuilding are
together referred to as the "builders" in this prospectus. Martime Asia is an
affiliate of Gesellschaft fur Konzeption und Betreuung privater Investitionen
mbH ("GEBAB").
3
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Our principal executive office and registered office is located at 1 Castle
Street, Castletown, Isle of Man, IM9 1LF, and our telephone number at that
address is 011-44-1-62-4824011.
THE EXCHANGE OFFER
On August 7, 1997, we issued $217,000,000 aggregate principal amount of
10-1/2% First Priority Ship Mortgage Notes Due 2007 and 87,000 units consisting
of $87,000,000 aggregate principal amount of 12% Second Priority Ship Mortgage
Notes and warrants to purchase 666,420 shares of common stock of Navigator
Holdings to the initial purchasers in a private offering exempt from the
registration requirements of the Securities Act.
o We are offering $1,000 principal amount of new 10 1/2% First Priority
Ship Mortgage Notes in exchange for each $1,000 principal amount of
old 10 1/2% First Priority Ship Mortgage Notes.
o We are offering $1,000 principal amount of new 12% Second Priority
Ship Mortgage Notes in exchange for each $1,000 principal amount of
old 12% Second Priority Ship Mortgage Notes.
The new 10 1/2% First Priority Ship Mortgage Notes are substantially
identical to the old 10 1/2% First Priority Ship Mortgage Notes and the new 12%
Second Priority Ship Mortgage Notes are substantially identical to the old 12%
Second Priority Ship Mortgage Notes, except that:
o the new notes will be freely transferable, except as described in this
prospectus;
o the new notes will not contain any legend restricting their transfer;
o holders of the new notes will not be entitled to certain rights of the
holders of the original notes under the registration rights agreement;
and
o the new notes will not contain any provisions regarding the payment of
additional interest for failure to register the notes.
We believe you can transfer the new notes without complying with the
registration and prospectus delivery provisions of the Securities Act if you:
o acquire the new notes in the ordinary course of your business;
o are not and do not intend to become engaged in a distribution of the
new notes;
o are not an affiliate of ours;
o are not a broker-dealer that acquired old notes directly from us; and
4
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o are not a broker-dealer that acquired old notes as a result of
market-making or other trading activities.
If any of these conditions are not satisfied and you transfer any new notes
without delivering a proper prospectus or without qualifying for an exemption,
you may be liable under the Securities Act. If you are a broker-dealer that
receives new notes for its own account in exchange for old notes, which you
acquired as a result of market-making activities or other trading activities,
you must acknowledge that you will deliver a prospectus in connection with any
resale of those new notes. See "Plan of Distribution."
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Expiration Date.......................................... The exchange offer expires at 5:00 p.m., New York City
time, on July __, 1999, unless we extend it.
Conditions to the Exchange Offer......................... The exchange offer is subject to customary conditions,
some of which we may waive. We reserve the right to
terminate or amend the exchange offer at any time before
the expiration date, if various specified events occur
before the expiration date.
Interest Payments........................................ The new notes will bear interest from June 30, 1999. The
exchange of old notes for new notes will not affect
interest accrued and due you on the old notes.
Procedures for Tendering Old Notes....................... If you are a holder of old notes who wishes to accept the
exchange offer for new notes:
o you must complete, sign and date the
accompanying letter of transmittal, or a
facsimile thereof;
o arrange for The Depository Trust Company
to transmit certain required information
to the exchange agent in connection with
a book-entry transfer; or
o mail or otherwise deliver the
documentation, together with your old
notes, to the exchange agents at the
address set forth under "The Exchange
Offer--Exchange Agents."
Do not send letters of transmittal and certificates
representing old notes to us.
By tendering your old notes in this manner, you will be
representing, among other things, that:
o the new notes you acquire pursuant to
the
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exchange offer are being acquired in the ordinary
course of your business;
o you are not participating, do not intend
to participate, and have no arrangement
or understanding with any person to
participate, in the distribution of the
new notes issued to you in the exchange
offer; and
o you are not an "affiliate" of ours.
Special Procedures for Beneficial Owners................. If you are a beneficial owner whose old notes are
registered in the name of a broker, dealer, commercial
bank, trust company or other nominee and wish to tender
your old notes in the exchange offer, please contact the
registered owner as soon as possible and instruct it to
tender on your behalf. If you wish to tender on your own
behalf, you must, prior to completing and executing the
letter of transmittal and delivering your old notes,
either arrange to have your old notes registered in your
name or obtain a properly completed bond power from the
registered holder. The transfer of registered ownership
may take considerable time.
Guaranteed Delivery Procedure............................ If you wish to tender your old notes and time will not
permit your required documents to reach the exchange
agents by the expiration date, or the procedure for
book-entry transfer cannot be completed on time, you may
tender your old notes according to the guaranteed
delivery procedures set forth in "The Exchange
Offer--Procedures for Tendering Notes."
Appraisal or Dissenters' Rights.......................... You do not have any appraisal or dissenters' rights in
the exchange offer.
Use of Proceeds.......................................... We will receive no proceeds from the exchange offer. We
will pay all of our expenses related to the exchange
offer.
Withdrawal Rights........................................ You may withdraw the tender of your original notes at any
time before 5:00 p.m., New York City time, on the
expiration date. Any old notes not accepted for any
reason will be returned to you without expense as
promptly as practicable
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after the expiration or termination of the exchange offer.
Federal Income Tax Consequences.......................... The exchange of old notes for new notes by U.S. holders
will not be a taxable exchange for U.S. federal income
tax purposes, and U.S. holders should not recognize any
taxable gain or loss as a result of the exchange.
Effect on Holders of Old Notes........................... If the exchange offer is completed on the terms and
within the period contemplated by this prospectus, you
will have no further registration or other rights under
the registration rights agreement, except under limited
circumstances. See "The Exchange Offer."
If you do not tender your old notes, you will continue
to hold those old notes. If you do not participate in
the exchange offer, your rights as a noteholder will not
be altered in any way. All untendered and tendered but
unaccepted old notes will continue to be subject to the
restrictions on transfer in the old notes and the
indentures under which the old notes have been and the
new notes are being issued. To the extent that old notes
are tendered and accepted in the exchange offer, the
trading market, if any, for the old notes could be
adversely affected. See "The Exchange Offer--Other."
Exchange Agents.......................................... United States Trust Company of New York and The Chase
Manhattan Bank are serving as exchange agents for the
exchange offer.
Registration Rights Agreement............................ We issued and sold the old notes on August 7, 1997 in a
private placement. In connection with the sale of the
old notes, we entered into a registration rights
agreement for the benefit of the purchasers of the old
notes, under which we agreed to use our reasonable best
efforts to effect the exchange offer. See "The Exchange
Offer--Purpose and Effect of the Exchange Offer" and
"Description of the New Notes--Registration Rights."
Under the registration rights agreement, we are required
to file a registration statement for a continuous
offering pursuant to Rule 415 under the Securities Act
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with respect to the old notes under certain
circumstances, including if existing SEC interpretations
are changed with the result that the new notes received
by holders in the exchange offer are not or would not be,
upon receipt, transferable by each holder, other than an
affiliate of the Company, without restriction under the
Securities Act. This prospectus is prepared in
connection with the Company's compliance with that
registration requirement. See "The Exchange
Offer--Purpose and Effect of the Exchange Offer" and
"Description of the New Notes--Registration Rights."
Units and Warrants....................................... We issued the old Second Priority Notes in units together
with warrants entitling the warrant holder to purchase
shares of common stock of Navigator Holdings. Following
the exchange offer, the new Second Priority Notes and the
warrants will trade separately. Each unit consists of
one Second Priority Note and 7.66 warrants entitling the
warrant holder to purchase one share of common stock per
warrant at an exercise price of $.01 per share, subject
to adjustment.
The warrants and the underlying common stock of
Navigator Holdings have not been registered under the
Securities Act and we are not offering new warrants or
new shares of common stock of Navigator Holdings in the
exchange offer. Accordingly, the warrants and the
underlying shares of common stock of Navigator Holdings
should not be sold unless they are registered under the
Securities Act or they are sold pursuant to an exemption
from registration.
SUMMARY OF TERMS OF THE NEW NOTES
Securities Offered....................................... $217,000,000 aggregate principal amount of new 10 1/2% First
Priority Ship Mortgage Notes Due 2007 and $87,000,000
aggregate principal amount of new 12% Second Priority
Ship Mortgage Notes Due 2007.
Issuer................................................... Navigator Gas Transport PLC, an Isle of Man public
limited company.
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Subsidiary Guarantors.................................... Each guarantor is an owner of a vessel and a subsidiary
of ours. If we cannot make payments on the new notes
when due, the Owners must make those payments instead.
The guarantees are full and unconditional.
Ranking.................................................. The new notes and the old notes:
o are secured obligations of ours; and
o are subordinate to the right of the issuer of the letter
of credit for unreimbursed draws under the letter of
credit. No draws under the letter of credit may be made
until the first vessel is delivered. The maximum draw
amount under the letter of credit depends on the date of
the draw and delivery of the vessels, but in no case
will it exceed $50.0 million; and
o are senior debts. No debt ranks senior to the notes,
except as described in this prospectus.
We cannot incur any more indebtedness under the
indentures, with certain exceptions.
The First Priority Notes rank ahead of the Second
Priority Notes.
New First Priority Notes rank equally with old First
Priority Notes.
New Second Priority Notes rank equally with old Second
Priority Notes.
Second Priority Notes rank equally with any Additional
Second Priority Notes, if issued.
Maturity Date............................................ June 30, 2007.
Interest Payment Dates................................... June 30 and December 31, commencing December 31, 1999.
At our option, if on any interest payment date following
the delivery of the first vessel, we do not have
sufficient funds to pay all accrued and unpaid interest
on the Second Priority Notes due on the date, then we may
pay such interest by issuing additional new Second
Priority Notes having an aggregate principal amount equal
to the amount of the
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deficiency. We will not issue more than $20.9 million
aggregate principal amount of additional Second Priority
Notes. See "Description of the New Notes--Terms of the
New Notes--Second Priority Notes."
Mandatory Offer to Purchase Notes With Available Cash.... On June 30, 2001 and semi-annually thereafter so long as
the new First Priority Notes and any untendered old
First Priority Notes remain outstanding, if required
funds are available, we will purchase the First Priority
Notes at a price equal to 102% of the principal amount
of the First Priority Notes plus accrued and unpaid
interest to the date of purchase. It is possible that we
may not have sufficient funds available to make this
purchase.
On the first payment date following the payment in full
of the First Priority Notes and on each payment date
thereafter, if we have funds available, we will make an
offer to purchase the Second Priority Notes at a
purchase price equal to 102% of the principal amount of
the new Second Priority Notes plus accrued and unpaid
interest to the date of purchase. See "Description of
the New Notes--Mandatory Offers to Purchase New
Notes--Offer to Purchase with Available Cash." It is
possible that we may not have sufficient funds available
to make this purchase.
Mandatory Redemption Upon the Occurrence of Certain Events If a vessel suffers a total loss, we will redeem the new
notes in an aggregate principal amount equal to the
principal amount of the notes allocated to the vessel at
the redemption price described in this prospectus.
If an Owner elects to terminate a building contract for
a vessel because of a material breach of the contract by
the builders, then we will redeem the new notes in an
aggregate principal amount equal to the principal amount
of the notes allocated to the vessel, together with the
principal amount of the new notes allocated to all other
vessels that we have not yet accepted as of that date,
at the redemption prices
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described in this prospectus. See "Description of the
New Notes--Redemptions-- Mandatory Redemption Upon the
Occurrence of Certain Events." It is possible that we
may not have sufficient funds available to effect these
redemptions.
Optional Redemption...................................... We do not have the option to redeem the new notes prior
to June 30, 2002, except that:
o until June 30, 2000, we may redeem, up to 35% of the
aggregate principal amount of each of the First Priority
Notes and the Second Priority Notes, at the redemption
prices described in this prospectus with the net
proceeds of one or more public equity offerings if at
least $100.0 million aggregate principal amount of the
new First Priority Notes and any untendered old First
Priority Notes and $45.0 million aggregate principal
amount of the new Second Priority Notes and any
untendered old Second Priority Notes remain outstanding
after each redemption; and
o we may redeem the new notes and any untendered old notes
at the redemption price described in this prospectus at
any time if Navigator Gas Transport becomes subject to
withholding taxes on any amounts payable under the notes
or any guarantee as a result of certain changes in law
in respect of withholding taxes.
On and after June 30, 2002, we have the option to redeem
the notes at the redemption prices described in this
prospectus. We cannot redeem any Second Priority Notes
while the First Priority Notes are outstanding. See
"Description of the New Notes--Redemptions--Optional
Redemption" and "--Tax Redemption."
Change of Control........................................ If a change of control occurs, we must give holders of
the notes the opportunity to sell us their notes at a
price equal to 101% of their principal amount, plus
accrued and unpaid interest. See "Description of the New
Notes--Mandatory Offers to Purchase New Notes--
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Offer to Purchase Upon Change of Control." It is
possible that we may not have sufficient funds available
to make this purchase.
Security................................................. The collateral for the notes, the guarantees and the
letter of credit includes among other items:
o our capital stock that is owned by Navigator Holdings;
o the capital stock of the Owners that is owned by us;
o the promissory note made by the Owners and given to us
to evidence loans we made;
o the contracts to build the vessels;
o certain performance bonds;
o certain agreements;
o funds held in various accounts;
o each vessel when delivered;
o revenues earned by each vessel; and
o insurance payments.
There are no sinking fund payments provided under the
terms of the notes.
Letter of Credit......................................... Credit Suisse First Boston issued an irrevocable letter
of credit in the maximum amount of $50.0 million in favor
of the collateral agent for the benefit of the holders of
the notes. After delivery of the first vessel, the
letter of credit is available to pay certain interest
shortfalls and costs up to an aggregate of $45.5 million,
and working capital draws up to $4.5 million to cover the
Owners' working capital requirements if available funds
in the revenue account are insufficient to fund operating
expenses. Credit Suisse First Boston administers the
letter of credit for several banks. The total amount
that may be outstanding at any one time under the letter
of credit depends on the date of the draw and delivery of
the vessels but in no case will it exceed $50.0 million.
See "Description of the Letter of credit Reimbursement
Agreement."
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Guarantees and Performance Bonds......................... The Export-Import Bank of China and Generale de Banque
S.A. have severally and not jointly guaranteed the
obligation of the builders to pay a specified refund
amount upon the termination of a building contract.
Export-Import Bank of China is owned by the government of
the People's Republic of China and its long-term debt is
rated Baal by Moody's and BBB+ by Standard and Poor's, a
Division of the McGraw-Hill Companies, Inc. The long-term
debt of Generale de Banque is rated Aa3 by Moody's. See
"Business--Building Contract Guarantees and Performance
Bonds."
Certain Covenants........................................ The indentures contain covenants that, among other
things, limit the ability of the Company to:
o incur any additional indebtedness;
o pay dividends or make certain other restricted payments;
o make distributions from Owners;
o sell assets;
o enter into transactions with affiliates;
o sell or issue capital stock of the Owners;
o incur liens other than permitted liens;
o enter into sale/leaseback transactions;
o enter into certain mergers and consolidations;
o conduct certain business activities;
o impair the security interests in the collateral; and
o amend any of the security agreements.
See "Description of the New Notes--Certain Covenants."
First Priority Trustee................................... United States Trust Company of New York.
Second Priority Trustee.................................. The Chase Manhattan Bank.
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TRANSACTION STRUCTURE
[GRAPHICAL REPRESENTAION OF TRANSACTION STRUCTURE FLOW CHART]
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RISK FACTORS
Before you participate in the exchange offer, you should be aware that
there are various risks, including those described below. You should carefully
consider these risk factors, together with the other information in this
prospectus, before deciding to exchange your old notes for new notes in the
exchange offer.
YOU MAY SUFFER IF OUR BUSINESS FAILS BECAUSE WE, THE OWNERS AND NAVIGATOR
HOLDINGS EXIST SOLELY FOR THE PURPOSE OF OWNING, OPERATING, AND/OR GUARANTEEING
OBLIGATIONS IN CONNECTION WITH THE VESSELS AND THE NOTES.
The activity of Navigator Holdings is limited to owning our capital stock
and pledging our capital stock as collateral. Our activity is limited to issuing
the notes, entering into the Letter of Credit Reimbursement Agreement, owning
the Owners and lending the net proceeds of the offerings and making other loans
to the Owners. The activity of the Owners is limited to guaranteeing the new
notes and the old notes, guaranteeing our obligations under the Letter of Credit
Reimbursement Agreement, owning, operating and maintaining the vessels and
fulfilling their obligations under the indentures, the Security Agreements and
the Letter of Credit Reimbursement Agreement. The Owners must make payments to
us in order for us to meet our payment obligations on the notes. We have no
material assets other than the stock of the Owners. On and after a vessel is
delivered, the Owners' sources of funds will be earnings on the vessels already
delivered, earnings on investments of certain funds and the proceeds from any
insurance covering loss to the vessels. We cannot assure you that the Owners
will generate sufficient earnings to enable us to meet our payment obligations.
We have no operating history or financial statements for any period prior to the
offerings of the old notes.
NEITHER WE, THE OWNERS NOR NAVIGATOR HOLDINGS HAVE AN OPERATING HISTORY
WHICH YOU CAN RELY ON TO PREDICT OUR SUCCESS.
We, the Owners and Navigator Holdings were incorporated in 1997 for the
purpose of establishing, owning and financing the Owners. We, the Owners and
Navigator Holdings have limited operating histories and financial data. This
prospectus contains consolidated financial statements of Navigator Holdings and
its subsidiaries. Because of the limited operations of us, the Owners and
Navigator Holdings, it will be difficult for you to determine and for us to
predict how successful we may be.
WE CANNOT PREDICT WHAT OUR REVENUES GENERATED BY THE VESSELS WILL BE.
Historically, the revenues generated by gas carriers have been cyclical,
with volatility in their profitability resulting from changes in supply and
demand. The cargo transportation rates received by the Owners will be primarily
dependent upon:
o the supply of vessels capable of transporting the types of cargoes the
Owners intend to transport; and
o the level of demand for the seaborne transport of the cargoes the
Owners intend to transport.
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These factors will be influenced by:
o global and regional economic conditions;
o increases and decreases in the industrial production of and
demand for the types of cargo the Owners intend to transport and
the products made from the cargoes;
o political changes and armed conflicts in the regions traveled by
the vessels and the regions where the cargoes are produced;
o developments in international trade;
o changes in seaborne and other transportation patterns; and
o geopolitical events that interrupt production, trade routes or
consumption of the cargoes we intend to transport or products
made from the cargoes.
Because many of the factors influencing the supply of and demand and trade
patterns for tonnage and cargo are unforeseeable and beyond our control, we
cannot predict the nature, direction, timing or degree of changes in the
revenues generated by the vessels. In addition to transportation rates, the
revenues generated by the vessels will depend on the level of utilization of the
vessels and the mix of cargoes transported on the vessels.
WE MAY BE UNABLE TO SATISFY OUR OBLIGATIONS UNDER THE INDENTURES IN THE
EVENT OF NON-PERFORMANCE BY THE BUILDERS AND PROVIDERS OF THE BUILDING CONTRACT
GUARANTEES AND THE PERFORMANCE BONDS, AND/OR THE UNFAVORABLE OUTCOME OF
ARBITRATION RESULTING FROM THE EVENT.
Each Owner may cancel its contract to build its vessel if the builders
commit an event of default. Events of default by the builders include the
failure by the builders to:
o make timely payment of liquidated damages to the Owners for
delays in the delivery of the vessels beyond 210 days after the
delivery date stated in the building contract;
o deliver the vessels by March 31, 2001; or
o construct the vessels in conformity with certain specifications.
Each building contract also provides for the automatic termination of the
building contract if, prior to the contractual delivery date:
o a vessel is seized by the Chinese government; or
o the builders fail to obtain the necessary licenses, permits and
other authorizations from the Chinese government for the
construction, delivery and export from China of such vessel; or
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o a total loss occurs with respect to a vessel; and
o in each case, the builders do not elect to continue performing
under the building contract.
If any building contract is cancelled by the Owner or automatically
terminated, each other Owner that has not accepted delivery of its vessel will
be deemed to have also cancelled its building contract through operation of
cross-default provisions.
If an Owner cancels a building contract pursuant to its terms or a building
contract is automatically terminated, the builders must pay the Owner a
specified refund. If the builders do not pay the Owner the refund, the guarantor
of the building contract and the performance bond guarantors have severally and
not jointly guaranteed the payment of specified amounts which together will
equal the specified refund. The refund together with the funds held in the
Pre-Funding Account and the Capitalized Interest Account will be used to pay the
principal amount of the notes allocated to the cancelled vessel, plus any
accrued and unpaid interest on the notes allocated to the vessel, plus certain
fees and expenses incurred in connection with this redemption. If the builders
fail to pay the Owners the specified refund and the Owners do not receive the
amounts payable under the building contract guarantee and the performance bonds,
we will not have sufficient funds to redeem the principal amount of the notes
allocated to the cancelled vessel.
If a dispute arises under a building contract, the Owner and the builders
have agreed to submit the dispute to arbitration by either Germanischer Lloyd or
the London Maritime Arbitrators Association, as may be mutually agreed to by the
parties involved. The arbitrator may in any particular dispute decide in favor
of the builders and, as a result, delay or eliminate the Owner's right to
receive payment of (1) any liquidated damages, whether by an adjustment in the
purchase price of the vessel or a cash payment, or (2) the specified refund. If
we need the liquidated damages or the specified refund to make interest payments
on, or to redeem, the First Priority Notes or the Second Priority Notes, we may
not have sufficient funds to satisfy our obligations under the indentures.
THE VALUE OF THE VESSELS ARE VOLATILE AND MAY RESULT IN INSUFFICIENT
COLLATERAL TO SATISFY OUR PAYMENT OBLIGATIONS TO YOU AS A NOTEHOLDER.
When the Owners accept the vessels under the building contracts, the
guarantees will be secured by a mortgage on each vessel granted to the
collateral agent. We cannot assure you that the value of each vessel will at any
time equal or exceed the principal amount of the notes allocated to the
particular vessel. The fair market value of the vessels can be expected to
fluctuate, depending upon:
o general economic and market conditions affecting the shipping
industry;
o competition from other shipping companies;
o demand for various types and sizes of vessels; and
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o other modes of transportation.
If the collateral agent sells a vessel after an event of default, we cannot
assure you that the proceeds from the sale would be sufficient to redeem the
principal amount of the notes allocated to the particular vessel or that any
buyers would be available under the circumstances in which the sale would occur.
We are not required under the indentures to maintain any minimum value of any
vessel. We cannot assure you that the future value of a vessel will not be
considerably less than its acquisition cost or the principal amount of the notes
allocated to the particular vessel. If we owe amounts under the Letter of Credit
Reimbursement Agreement, then the issuer of the letter of credit will have a
claim to the proceeds of any sale of a vessel prior to the claim of the holders
of the notes. In the event of a dispute, depending upon the laws of the
applicable jurisdiction, the extent to which the mortgages on the vessels may be
enforced and the extent to which the mortgages on the vessels will have priority
over the claims of other creditors is limited. If the proceeds from a sale of
the vessels is not sufficient to satisfy payments due on the notes, the holders
of the notes will have only unsecured claims against our remaining assets, if
any. See "The Mortgages."
WE DEPEND ON KEY PERSONNEL OF OUR MANAGER AND GEBAB AND/OR ITS AFFILIATES,
THE LOSS OF WHOM MAY CAUSE DELAYS AND HAVE AN ADVERSE EFFECT ON OUR BUSINESS.
Our operations are dependent to some degree upon the efforts of a small
number of key management and operating personnel of our manager, Navigator Gas
Management Limited (the "Manager"), and at Martime Asia and MarLink
Schiffahrtskontor GmbH, affiliates of GEBAB, the loss of whom could adversely
affect us. Although there are other qualified managers in the seaborne gas
carrier industry who we may hire, we cannot assure you that we will be able to
hire qualified managers on favorable terms, if at all. We cannot assure you that
the loss of these persons will not have an adverse impact on our business.
OUR INDUSTRY HAS OPERATORS WITH GREATER RESOURCES THAN WE DO WHICH MAY MAKE
IT DIFFICULT FOR US TO COMPETE.
The number of our competitors in the seaborne trade of petrochemical gases
is small and consists of a few large and experienced operators with greater
financial resources than we have. Since we will be a new participant in this
field and we do not have an operating history, we may not be able to participate
successfully in the seaborne gas carrier industry. See "Gas Carrier Industry."
Also, the designer of our gas plant, Tractebel Gas Engineering, and its
affiliates, are not restricted from engineering, designing and constructing gas
storage and transportation plants and equipment for our competitors.
BECAUSE WE ENGAGE IN INTERNATIONAL OPERATIONS, OUR BUSINESS COULD SUFFER IF
THERE IS A CHANGE IN INTERNATIONAL RELATIONS.
Our revenues from operation of the vessels are expected to be derived
primarily from foreign operations and is subject to risks inherent in doing
business abroad. Future hostilities or other political instability in the
regions in which we operate could affect our activity and could adversely affect
our business and results of operations.
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Because the ports at which the Owners' vessels will call have not yet been
determined, we cannot identify specifically any risks associated with a
particular country or region that may affect our business and operations and the
magnitude of the risks that may be involved in those areas.
COMPLYING WITH OR THE FAILURE TO COMPLY WITH ENVIRONMENTAL REGULATIONS
COULD BE COSTLY AND MAY HARM OUR BUSINESS.
The vessels and the operation of the vessels must comply with extensive and
changing environmental protection laws and regulations. Compliance with these
laws and regulations may entail significant expenses, including expenses for
ship modifications and changes in operating procedures. These laws and
regulations could have a material adverse effect on the business and the
operations of the Owners. In particular, the United States Comprehensive
Environmental Response, Compensation, and Liability Act, as amended ("CERCLA"),
imposes strict liability on owners, operators, and demise charterers of vessels
for releases of hazardous substances, other than oil, from their vessels. In
addition, the United States Oil Pollution Act of 1990, as amended, provides for
strict liability for owners, operators and demise charterers of any vessel for
certain oil pollution incidents in the waters of the United States or adjoining
shorelines or in the exclusive economic zone. The Oil Pollution Act applies to
all vessels that trade in the United States or its territories or possessions or
operate in United States waters, even if the vessels do not carry oil as cargo.
Furthermore, certain states have enacted legislation that provides for liability
under circumstances comparable to those governed by CERCLA and the Oil Pollution
Act, without the limitations on the amount of liability contained in the federal
statutes.
CERCLA and the Oil Pollution Act each require vessel owners and operators
to furnish the United States Coast Guard evidence of financial responsibility
sufficient to meet their potential liability. Insurance has been one of the
principal methods used to satisfy the requirements. Although certain
newly-formed insurance companies, which have been deemed acceptable guarantors
by the Coast Guard, have furnished the guarantees pursuant to the terms outlined
in the rule issued by the Coast Guard on March 7, 1996 relating to financial
assurance (the "Final Rule"), most of the protection and indemnity organizations
that traditionally provided insurance to ship owners and operators have refused
to furnish evidence of insurance to owners and operators of vessels entering
United States ports under the Final Rule. If an Owner intends to employ its
vessel within the territorial waters of the United States, the Owner must
furnish evidence of financial responsibility with respect to the vessels to the
Coast Guard as required by the Final Rule. If the Owner is unable to comply with
the Final Rule, its vessel will not be permitted to enter United States
territorial waters. We believe that we and the Owners will have the financial
ability to comply with the Final Rule.
In addition, the International Maritime Organization (the "IMO"), a
specialized agency of the United Nations, recently adopted regulations designed
to reduce oil pollution in international waters. In complying with the IMO
regulations, the Owners and any charterer of the vessels may be forced to incur
additional costs in meeting new maintenance and inspection requirements, in
developing contingency arrangements for potential spills and in obtaining
insurance coverage.
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Certain states in the United States and other countries have adopted or are
considering adopting stricter technical and operational requirements for
tankers. Additional laws and regulations may be adopted which would have a
material adverse effect on the business and the operations of the Owners.
Because the ports at which the Owners' vessels will call have not yet been
determined, we cannot identify specifically any particular state or country's
environmental regulations that will affect the Owners and us.
THE OWNERS MAY LOSE THEIR VESSELS OR SUFFER SIGNIFICANT LOSSES DUE TO ACTS
OF NATURE OR OTHER CATASTROPHES WHICH OUR INSURANCE MAY NOT COVER.
The operation of any ocean-going vessel carries risk of catastrophic marine
disasters, environmental mishaps, cargo and property losses or damage and
business interruptions caused by adverse weather and ocean conditions,
mechanical failures, human error, political action in various countries, war,
terrorism, piracy, labor strikes and other circumstances or events. The vessels
will be operated throughout the world in any lawful trade for which the vessels
are suitable. The terms of the mortgages do not permit the vessels to be
employed in any manner or for any purpose excepted by the insurance on the
vessels. In the past, political conflicts have disrupted shipping in regions
where the vessels are expected to operate. Vessels trading in these regions have
also been subject to acts of terrorism and piracy. The occurrence of any event
may result in increased costs or the loss of revenues or assets, including the
total loss of a vessel.
We intend to maintain insurance consistent with industry standards against
these risks. Each Owner currently intends to maintain $65 million of hull and
machinery loss insurance and loss of hire insurance providing coverage of
$28,000 per day. However, we cannot assure you that all risks will be adequately
insured against, that any particular claim will be paid out of insurance or that
the Owners will be able to procure adequate insurance coverage at commercially
reasonable rates in the future. More stringent environmental and other
regulations may result in increased costs for, or the lack of availability of,
insurance against risks of environmental damage, pollution, damages asserted
against us or the loss of income resulting from a vessel being removed from
operations. Even if insurance proceeds are paid to us to cover the financial
losses incurred following the occurrence of one of these events, we cannot
assure you that our business reputation, and therefore our ability to obtain
future charters, will not be materially adversely affected by an event. An
impact on our business reputation could have a material adverse effect on our
business and results of operations. See "The Mortgages--Insurance."
WE MAY EXPERIENCE DIFFICULTIES ENFORCING OUR MORTGAGES IN JURISDICTIONS
WITH DIFFERENT ENFORCEMENT PROCEDURES AND LIEN PRIORITIES.
Each vessel will be registered under the laws of the Republic of Liberia or
the Isle of Man. The mortgages will be recorded pursuant to the laws of the
Republic of Liberia or the Isle of Man and will create preferred ship mortgage
liens under the maritime law of those jurisdictions. Historically, Liberian and
Isle of Man ship mortgages have been enforced in major commercial ports
throughout the world. However, the priority that the mortgages will have against
the claims of other lien creditors in an enforcement proceeding is generally
determined by, and will vary in accordance with, the laws of the country where a
proceeding is brought.
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Generally, a preferred ship mortgage lien will rank prior to all subsequent
maritime liens other than certain other preferred maritime liens, including
liens for damages arising out of tort, including claims for oil pollution, liens
for crew's wages, liens for general average and salvage. Under Liberian and Isle
of Man law, a preferred ship mortgage lien will also rank after certain other
maritime liens, including maritime liens for failure to pay tonnage taxes and
annual fees. Under United States law, a foreign preferred ship mortgage lien
will also rank after certain other maritime liens, including those for repairs,
supplies, towage, use of drydock or marine railways or other necessaries
performed or supplied in the United States. Since each vessel will trade
throughout the world and since a mortgage generally will be enforceable against
a vessel only in the jurisdiction in which it is physically present, there can
be no assurance that if enforcement proceedings are commenced against a vessel,
that the vessel will be located in a jurisdiction having the same mortgage
enforcement procedures and lien priorities as, for example, Liberia, Isle of Man
or the United States. In the event of default under a mortgage, the collateral
agent may be able to effect control over the related vessel to direct it to a
desirable jurisdiction for arrest of the vessel pursuant to judicial foreclosure
proceedings. We cannot assure you that an attempt by the collateral agent to
effect control will be successful.
WE ARE SUBJECT TO FRAUDULENT CONVEYANCE STATUTES THAT MAY RESULT IN A
DECLARATION OF INSOLVENCY WHICH COULD INTERFERE WITH OUR ABILITY TO MEET OUR
PAYMENT OBLIGATIONS.
Our granting of the security interest in the collateral could be subject to
review under relevant fraudulent conveyance statutes and other applicable
insolvency laws in a bankruptcy or other proceeding involving us and Navigator
Holdings. Due to the nature of the business of us and Navigator Holdings and
uncertainty as to where a bankruptcy, vessel foreclosure or other relevant
proceeding might be commenced, it is not possible to predict where any
proceeding or attack might be brought or made or the law that the court might
apply.
Under the fraudulent conveyance law of the Isle of Man, the jurisdiction in
which we, each of the Owners and Navigator Holdings are incorporated, if a court
were to find that, with respect to us, any Owner or Navigator Holdings, at the
time a security interest in the collateral is granted, we, any Owner or
Navigator Holdings:
o made the grant of the security interest with actual intent to
prefer or defraud any present or future creditor;
o received less than a reasonably equivalent value or fair
consideration for the grant of the security interest; or
o intended to incur, or believed that it would incur, debts beyond
its ability to pay as they matured,
then the court could void the grant of the security interest in whole or in
part. To the extent that a grant of the security interest by us, any Owner or
Navigator Holdings exceeds the consideration received, the determination of
whether the grant of the security interest in question is a fraudulent
conveyance depends on:
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o whether the grant of the security interest so exceeds the value
and benefit received by us, the Owner or Navigator Holdings that,
at least to the extent of the excess, we, the Owner or Navigator
Holdings did not receive reasonably equivalent value or fair
consideration for the grant of the security interest; and, if so,
o whether following the valuation of the assets and liabilities of
us, or Navigator Holdings, it is determined that we, the Owners
or Navigator Holdings are or have been rendered insolvent. There
can be no assurance that a court, viewing the transaction in
hindsight, would determine that we, the Owners or Navigator
Holdings received fair value for its grant of the security
interest, or were not rendered insolvent as a result of the
grant. We, the Owners and Navigator Holdings believe that we will
have received proper consideration for the grant of the security
interest and that none of us, the Owners or Navigator Holdings
will be rendered insolvent by the contemplated grants of the
security interest.
SINCE WE ARE INCORPORATED IN THE ISLE OF MAN, IT MAY BE DIFFICULT TO
ENFORCE JUDGMENTS AGAINST US.
We, the Owners and Navigator Holdings are all incorporated in the Isle of
Man. As a result, it may be difficult to obtain a judgment in the Isle of Man in
an original action or to enforce in the Isle of Man judgments obtained in United
States' courts and predicated upon United States' securities laws.
IN THE EVENT OF A CHANGE OF CONTROL, WE MAY HAVE INSUFFICIENT FUNDS TO MEET
OUR PURCHASE OBLIGATIONS.
Pursuant to the indentures, in the event of a change of control, we will be
required to offer to purchase the new notes and any untendered old notes, in
whole or in part, at a price equal to 101% of the principal amount of the notes
as described under "Description of the New Notes--Mandatory Offers to Purchase
New Notes--Offer to Purchase Upon Change of Control." Since we have not provided
any reserve of credit support to fund a change of control offer note purchase,
we cannot assure you that we will have sufficient funds to purchase notes in
these circumstances.
YOU MAY NOT BE ABLE TO SELL YOUR NEW NOTES BECAUSE NO PUBLIC MARKET MAY
EXIST FOR THEM.
The old notes are currently owned by a relatively small number of
beneficial owners. The old notes have not been registered under the Securities
Act and will continue to be subject to restrictions on transferability to the
extent that they are not exchanged for the new notes. The new notes will
constitute a new issue of securities with no established trading market.
Although the new notes will be permitted to be resold or otherwise transferred
by holders who have met the conditions of the exchange offer without compliance
with the registration requirements under the Securities Act, we do not intend to
list the new notes on any national securities exchange or to seek admission to
trade on the Nasdaq National Market. Accordingly,
22
<PAGE>
we cannot assure you that an active public or other market exists or will
develop for the new notes or the degree of liquidity that will exist for them.
See "Plan of Distribution."
FAILURE TO COMPLY WITH THE EXCHANGE OFFER PROCEDURES MAY RESULT IN YOUR
INABILITY TO PARTICIPATE IN THE EXCHANGE OFFER.
o To exchange your old notes for new notes you must give us or our
exchange agents on a timely basis a properly completed and duly
executed letter of transmittal, or an agreement to be bound by
one, and all other required documents.
o If you want to exchange your old notes you should allow
sufficient time to ensure timely delivery.
o We are under no duty to give notification of defects or
irregularities with respect to tenders of old notes for exchange.
o Old notes that are not tendered or are tendered but not accepted
will, after the exchange offer, continue to be subject to the
existing restrictions on transfer, and after the exchange offer,
the registration rights under the registration rights agreement
generally will terminate.
o If you tender old notes in the exchange offer for the purpose of
participating in a distribution of the new notes, you may be
deemed to have received restricted securities and will be
required to comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale
transaction by you. If you are a broker-dealer and you receive
new notes for your own account in exchange for your old notes,
and you acquired your old notes as a broker-dealer as a result of
market-making activities or other trading activities, you must
acknowledge that you will deliver a prospectus in connection with
any resale of the new notes. If we accept the old notes tendered
to us in the exchange offer, the liquidity of untendered and
tendered but unaccepted old notes could be adversely affected.
See "The Exchange Offer."
23
<PAGE>
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
We believe that certain statements contained in this prospectus are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 and are considered prospective. These include
statements contained in this prospectus under the captions "Prospectus Summary,"
"Risk Factors," "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business." The following statements are or may
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995:
o statements before, after or including the words "may," "will,"
"could," "should," "believe," "expect," "future," "potential,"
"anticipate," "intend," "plan," "estimate" or "continue" or the
negative or other variations of these words; and
o other statements about matters that are not historical facts.
We may be unable to achieve future results covered by the forward-looking
statements. The statements are subject to risks, uncertainties and other factors
that could cause actual results to differ materially from the future results
that the statements express or imply. See "Risk Factors." Please do not put
undue reliance on these forward-looking statements, which speak only as of the
date of this prospectus.
24
<PAGE>
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
We issued the old notes on August 7, 1997, to Credit Suisse First Boston
Corporation and Cambridge Partners, L.L.C. (collectively, the "Initial
Purchasers"). The Initial Purchasers subsequently placed the old notes with
qualified institutional buyers in reliance on Rule 144A under the Securities
Act. As a condition to the purchase of the old notes by the Initial Purchasers,
we entered into the registration rights agreement with the Initial Purchasers.
The registration rights agreement requires us, (1) to file with the SEC a
registration statement under the Securities Act to enable us to exchange the old
notes for new publicly registered notes that are identical in all material
respects to the old notes, (2) to use our reasonable best efforts to cause the
registration statement to become effective under the Securities Act, and (3) to
use our reasonable best efforts to cause the exchange offer to be consummated on
the earliest practical date after the registration statement becomes effective.
We have agreed to keep the exchange offer open for not less than 30 days. A copy
of the registration rights agreement has been filed as an exhibit to the
registration statement of which this prospectus is a part.
After the exchange offer, if you did not tender your old notes you
generally will not have any further registration rights under the registration
rights agreement, and your old notes will continue to be subject to certain
restrictions on transfer. Accordingly, the liquidity of the market for your old
notes could be adversely affected.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this prospectus
and in the letter of transmittal, we will accept for exchange any and all old
notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time,
on the expiration date. We will issue up to $217,000,000 principal amount of new
First Priority Notes in exchange for the same principal amount of outstanding
old First Priority Notes accepted in the exchange offer, and up to $87,000,000
principal amount of new Second Priority Notes in exchange for the same principal
amount of outstanding old Second Priority Notes accepted in the exchange offer.
You may tender all or a portion of your old notes pursuant to the exchange
offer. You may tender old notes only in minimum denominations of $100,000 and
integral multiples of $1,000 in excess thereof.
The form and terms of the new notes will be identical to the form and terms
of the old notes except that:
o the new notes have been registered under the Securities Act and
will not bear legends restricting their transfer; and
o holders of the new notes will not be entitled to certain rights
under the registration rights agreement, which rights generally
will terminate with the exchange offer.
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<PAGE>
The new notes will evidence the same debt as the old notes tendered in
exchange offer and will be entitled to the benefits of the same indentures.
As of the date of this prospectus, $217,000,000 aggregate principal amount
of the old First Priority Notes and $87,000,000 aggregate principal amount of
the old Second Priority Notes were outstanding and registered in the name of
Cede & Co., as nominee for The Depository Trust Company ("DTC"). We have fixed
the close of business on ________, 1999, as the record date for the exchange
offer for purposes of determining the persons to whom this prospectus, the
letter of transmittal, the notice of guaranteed delivery and the required
documents under the Isle of Man laws will be mailed initially.
In connection with the exchange offer, holders of old notes do not have any
appraisal or dissenters' rights under the General Corporation Law of the Isle of
Man or the indentures. We intend to conduct the exchange offer in accordance
with the applicable requirements of the Exchange Act and the rules and
regulations of the SEC thereunder, including Rule 14e-1.
We shall be deemed to have accepted validly tendered old notes when, as and
if we have given oral or written notice to the exchange agents. The exchange
agents will act as agent for the tendering holders for the purpose of receiving
the old notes from us.
If any tendered old notes are not accepted for exchange because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, the certificates for any unaccepted old notes will be returned,
without expense, to the tendering holder thereof as promptly as practicable
after the expiration date.
Holders who tender old notes in the exchange offer will not be required to
pay brokerage commissions or fees or, subject to the instructions in the letter
of transmittal, transfer taxes with respect to the exchange of notes pursuant to
the exchange offer. We have agreed to pay all fees and expenses in connection
with the exchange offer. See "--Fees and Expenses" and "--Transfer Taxes." Prior
to the expiration date, holders of notes must satisfy the procedures for
tendering their notes. See "--Procedures for Tendering," and "--Guaranteed
Delivery Procedures." We may amend or terminate the exchange offer if any of the
following events occur: (1) the SEC requests that we amend or supplement the
registration statement or this prospectus or that we provide them with
additional information; (2) the SEC issues a stop order suspending the
effectiveness of the registration or the SEC initiates proceedings for that
purpose; (3) we or our counsel receives notice as to the suspension of the
qualification of the notes for sale in any jurisdiction or the initiation or
threatening of any proceeding for that purpose; and (4) the happening of any
event that requires us to make changes in the registration statement or this
prospectus so that there are no untrue statements of material fact or omissions
to state a material fact that is required to be stated, in the case of this
prospectus, in light of the circumstances under which they are made, not
misleading.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The expiration date is 5:00 p.m., New York City time, on __________ 1999
(or later if required by applicable law). If we amend the exchange offer in a
manner we determine to
26
<PAGE>
be a material change, we will promptly disclose the amendment by means of a
supplement to this prospectus that we will distribute to the registered holders
of the old notes or by making a timely release to the Dow Jones News Service,
and, depending upon the significance of the amendment and the manner of
disclosure to the registered holders, we will extend the exchange offer by the
number of days equal to the period between the giving of notice to the delivery
of a supplement to this prospectus.
INTEREST ON THE NEW NOTES
The new notes will be deemed to accrue interest from June 30, 1999, the
date of the last periodic payment of interest on the old notes. Interest on the
new notes will be payable semi-annually on each June 30 and December 31,
commencing on December 31, 1999. The exchange of old notes for new notes will
not affect interest accrued and due to you on the old notes.
PROCEDURES FOR TENDERING
Only a holder of old notes may tender old notes in the exchange offer. To
tender in the exchange offer, a holder must either (1) complete, sign and date
the letter of transmittal, or a facsimile thereof, have the signatures thereon
guaranteed, if required by the letter of transmittal, and mail or otherwise
deliver the letter of transmittal or facsimile, together with the old notes and
any other required documents, to the exchange agent, or (2) in the case of a
book-entry transfer, confirm book-entry transfer of the old notes into an equal
principal amount of new notes into the appropriate exchange agent's account at
DTC, in either case prior to 5:00 p.m., New York City time, on the expiration
date. To be tendered effectively, the old notes, letter of transmittal and other
required documents must be received by the exchange agent at the address set
forth below under "--Exchange Agent" or, if book-entry transfer is used,
electronic instructions with regard to the old notes, the letter of transmittal
and all other required documents must be received by DTC, in each case prior to
5:00 p.m., New York City time, on the expiration date. A holder of old notes may
also tender in the exchange offer by complying with the procedure set forth
under "--Guaranteed Delivery Procedures."
The exchange agent will make a request to establish an account for the old
notes at DTC for the exchange offer within two business days after the date of
this prospectus, and any financial institution that is a participant in DTC's
systems may make book-entry delivery of old notes by causing DTC to transfer the
old notes into the appropriate exchange agent's account at DTC in accordance
with DTC's procedures for transfer. However, although delivery of old notes may
be effected through book-entry transfer at DTC, the letter of transmittal or
facsimile, or an agent's message, with any required signature guarantees and any
other required documents, must be received by the exchange agent at one of the
addresses set forth below under "--Exchange Agents" on or before the expiration
date or the guaranteed delivery procedures described below must be complied
with.
The term "agent's message" means a message, transmitted by DTC to the
exchange agent and forming a part of a book-entry confirmation, which states
that DTC has received an express acknowledgement from the tendering participant
stating that the participant
27
<PAGE>
has received and agrees to be bound by the term of the letter of transmittal,
and that we may enforce the letter of transmittal against the participant.
By executing or electronically confirming the letter of transmittal, each
holder will make to us the representations set forth below under "--Resale of
New Notes."
The tender by a holder of old notes and our acceptance of the tender will
constitute agreement between the holder and us in accordance with the terms and
subject to the conditions set forth in this prospectus and in the letter of
transmittal.
YOUR CHOICE OF THE METHOD OF DELIVERY OF OLD NOTES, THE LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC, TO
THE EXCHANGE AGENTS IS AT YOUR ELECTION AND RISK. INSTEAD OF DELIVERY BY MAIL,
WE RECOMMEND THAT EACH HOLDER USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL
CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ASSURE DELIVERY TO THE EXCHANGE
AGENTS BEFORE THE EXPIRATION DATE. DO NOT SEND THE LETTER OF TRANSMITTAL OR
EXISTING NOTES TO US. YOU MAY REQUEST YOUR BROKER, DEALER, COMMERCIAL BANK,
TRUST COMPANY OR NOMINEE TO EFFECT THE ABOVE TRANSACTIONS FOR YOU.
If you are a beneficial owner of old notes that are registered in the name
of a broker, dealer, commercial bank, trust company or other nominee and you
wish to tender, you should contact the registered holder promptly and instruct
the registered holder to tender on your behalf.
Your signature on the letter of transmittal or a notice of withdrawal must
be guaranteed by an eligible institution unless your notes are tendered (1) by a
registered holder who has not completed the box entitled "Special Registration
Instructions" or "Special Delivery Instructions" on the letter of transmittal or
(2) for the account of an eligible institution. In the event that your signature
on a letter of transmittal or a notice of withdrawal are required to be
guaranteed, the guarantee must be by an eligible institution. Eligible
institutions are the following: a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an "eligible guarantor institution" within the meaning of Rule
17Ad-15 under the Exchange Act.
If the letter of transmittal is signed by a person other than the
registered holder of old notes listed in the letter of transmittal, the old
notes must be endorsed or accompanied by a properly completed bond power, signed
by the registered holder as the registered holder's name appears on the old
notes with the signature guaranteed by an eligible institution.
If the letter of transmittal or any old notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, then
these persons should so indicate when signing, and unless waived by us, you must
submit or have submitted with the letter of transmittal evidence satisfactory to
us of their authority to so act.
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<PAGE>
GUARANTEED DELIVERY PROCEDURES
Holders not holding through DTC who wish to tender their old notes and (1)
whose old notes are not immediately available, (2) who cannot deliver their old
notes, the letter of transmittal or any other required documents to the exchange
agents, or (3) who cannot complete the procedures for book-entry transfer prior
to the expiration date, may effect a tender if:
o the tender is made through an eligible institution;
o prior to the expiration date, the exchange agents receive from
the eligible institution a properly completed and duly executed
notice of guaranteed delivery (by facsimile transmission, mail or
hand delivery) setting forth the name and address of the holder,
the certificate number(s) of the old notes being tendered and the
principal amount of old notes tendered, stating that the tender
is being made thereby and guaranteeing that, within five New York
Stock Exchange trading days after the expiration date or the
execution of the notice of guaranteed delivery, the letter of
transmittal or facsimile thereof, together with the
certificate(s) representing the old notes or a confirmation of
book-entry transfer of the old notes into the exchange agent's
account at DTC, and any other documents required by the letter of
transmittal, will be deposited by the eligible institution with
the exchange agent; and
o properly completed and executed letter of transmittal (or
facsimile thereof), as well as the certificate(s) representing
all tendered old notes in proper form for transfer, or a
confirmation of book-entry transfer of old notes into the
appropriate exchange agent's account at DTC, and all other
documents required by the letter of transmittal, are received by
the exchange agents within five New York Stock Exchange trading
days after the expiration date.
Except as otherwise provided herein, tenders of old notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the expiration date.
To withdraw a tender of old notes in the exchange offer, you must provide a
written or facsimile transmission notice of withdrawal, or a written or
electronic DTC transmission notice of withdrawal for DTC participants, must be
received by the exchange agent at its address set forth herein, or received into
the appropriate exchange agent's account at DTC, prior to 5:00 p.m., New York
City time, on the expiration date.
Your notice of withdrawal must:
o specify the name of the person having deposited the old notes to
be withdrawn;
o identify the old notes to be withdrawn;
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<PAGE>
o be signed or confirmed by you in the same manner as the original
signature on or confirmation of the letter of transmittal by
which you tendered your old notes, including any required
signature guarantees, or be accompanied by documents of transfer
sufficient to have the trustee for your old notes register the
transfer of your old notes into the name of the person
withdrawing the tender; and
o specify the name in which your old notes are to be registered, if
different from the name at the time of the deposit. If your old
notes have been delivered pursuant to the procedures for
book-entry transfer described above, any notice of withdrawal
must also specify the name and number of the account at DTC, and
must otherwise comply with DTC's procedures.
All questions as to the validity, form and eligibility, including time of
receipt, of the notices will be determined by us and our determination will be
final and binding on all parties. Any old notes withdrawn will be deemed not to
have been validly tendered for purposes of the exchange offer and no new notes
will be issued for the old notes unless the old notes so withdrawn are validly
retendered. Any old notes which have been tendered but which are not accepted
for exchange will be returned to the holder without cost to the holder as soon
as practicable after withdrawal, rejection of tender or termination of the
exchange offer. Properly withdrawn old notes may be retendered by following one
of the procedures described above under "--Procedures for Tendering" at any time
prior to the expiration date.
EXCHANGE AGENTS
United States Trust Company of New York and The Chase Manhattan Bank have
been appointed as exchange agents for the exchange offer. Questions and requests
for assistance or for additional copies of this prospectus, the letter of
transmittal or the notice of guaranteed delivery should be directed to the
exchange agents addressed as follows:
o For First Priority Notes:
BY REGISTERED OR CERTIFIED MAIL:
United States Trust Company of New York
P.O. Box 844
Cooper Station
New York, NY 10276-0844
BY HAND:
United States Trust Company of New York
111 Broadway
Lower Level
Corporate Trust Window
New York, NY 10006
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<PAGE>
BY OVERNIGHT MAIL OR COURIER:
United States Trust Company of New York
770 Broadway
13th Floor
New York, NY 10003
Attn: Corporate Trust Service
BY FACSIMILE:
United States Trust Company of New York
(212) 420-6152; confirm by telephone (800) 548-6565
o For Second Priority Notes:
BY REGISTERED OR CERTIFIED MAIL:
The Chase Manhattan Bank
55 Water Street
New York, NY 10041
BY HAND:
The Chase Manhattan Bank
55 Water Street
New York, NY 10041
BY OVERNIGHT MAIL OR COURIER:
The Chase Manhattan Bank
55 Water Street
New York, NY 10041
Attn: Carlos Esteves
BY FACSIMILE:
The Chase Manhattan Bank
(212) 638-7380; confirm by telephone (212) 638-0828
FEES AND EXPENSES
We are making the principal solicitation by mail. Additional solicitations
may be made by telegraph, telephone or in person by our officers and regular
employees and our affiliates. No additional compensation will be paid to our
officers and employees who engage in soliciting tenders. We have not retained
any dealer-manager in connection with the exchange offer and we will not make
any payments to brokers or others soliciting acceptances of the exchange offer.
We will pay the exchange agents reasonable and customary fees for its services
and will reimburse it for its reasonable out-of-pocket expenses. We will also
pay other
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registration expenses, including fees and expenses of the trustees, filing fees,
legal fees, blue sky fees and printing and distribution expenses.
Our estimated cash expenses to be incurred in connection with the exchange
offer are estimated to be in excess of $450,000.
TRANSFER TAXES
We will pay all transfer taxes, if any, applicable to the exchange of the
old notes for the new notes in the exchange offer. A tendering holder will pay
transfer taxes if:
o certificates representing the new notes or the old notes for
principal amounts not tendered or accepted for exchange are to be
delivered to, or are to be issued in the name of, any person
other than the registered holder of the old notes tendered;
o old notes are registered in the name of any person other than the
person signing the letter of transmittal; or
o a transfer tax is imposed for any reason other than the exchange
of the notes pursuant to the exchange offer.
ACCOUNTING TREATMENT
The new notes will be recorded at the same carrying value as the old notes,
which is face value, as reflected in our accounting records on the date of
exchange. Accordingly, no gain or loss for accounting purposes will be
recognized.
RESALE OF NEW NOTES
Based on interpretations by the staff of the SEC set forth in no-action
letters issued to third parties such as Exxon Capital Holdings Corporation
(available May 13, 1988), Morgan Stanley & Co. Incorporated (available June 5,
1991) and Shearman & Sterling (available July 2, 1993), we believe that new
notes issued pursuant to the exchange offer in exchange for the old notes may be
offered for resale, resold or otherwise transferred by any holder of the new
notes, other than the holder which is an "affiliate" of ours within the meaning
of Rule 405 under the Securities Act, without compliance with the registration
and prospectus delivery provisions of the Securities Act, if the new notes are
acquired in the ordinary course of the holder's business and the holder does not
intend to participate and has no arrangement or understanding with any person to
participate in the distribution of the new notes. Each broker-dealer that
receives new notes for its own account in exchange for old notes, where the old
notes were acquired by the broker-dealer as a result of market-making activities
or other trading activities, may be a statutory underwriter and must acknowledge
that it will deliver a prospectus in connection with any resale of new notes.
See "Plan of Distribution."
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By tendering in the exchange offer, each holder will represent to us that,
among other things:
o the new notes acquired pursuant to the exchange offer are being
obtained in the ordinary course of business of the person
receiving the new notes;
o the holder has no arrangement or understanding with any person to
participate in the distribution of the new notes; and
o the holder acknowledges that if it participates in the exchange
offer for the purpose of distributing the new notes (a) it must,
in the absence of an exemption therefrom, comply with the
registration and prospectus delivery requirements of the
Securities Act in connection with any resale of the new notes and
cannot rely on the no-action letters referenced above, and (b)
failure to comply with the requirements in this instance could
result in the holder incurring liability under the Securities Act
for which the holder is not indemnified by us. By tendering in
the exchange offer, each holder represents to us that it is not
our "affiliate" (as defined in Rule 405 under the Securities
Act).
CONSEQUENCES OF FAILURE TO EXCHANGE
As a result of the making of this exchange offer, we generally will have
fulfilled our obligations under the registration rights agreement, and holders
of old notes who do not tender their old notes generally will not have any
further registration rights under the registration rights agreement or
otherwise. Any holder of old notes that does not exchange its old notes for new
notes will continue to hold the old notes and will be entitled to all the
rights, and subject to all the limitations, applicable to the notes thereto
under the indentures, except to the extent that rights or limitations, by their
terms, terminate or cease to have further effectiveness as a result of the
exchange offer.
Old notes that are not exchanged for new notes pursuant to the exchange
offer will remain restricted securities. Accordingly, the old notes may be
resold only:
o to us upon redemption thereof or otherwise;
o pursuant to an effective registration statement under the
Securities Act;
o if they are eligible for resale pursuant to Rule 144A, to a
qualified institutional buyer within the meaning of Rule 144A
under the Securities Act in a transaction meeting the
requirements of Rule 144A;
o outside the United States to a foreign person pursuant to the
exemption from the registration requirements of the Securities
Act provided by Regulation S under the Securities Act; or
o pursuant to another available exemption from the registration
requirements of the Securities Act, in each case in accordance
with any applicable securities laws of any state of the United
States.
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<PAGE>
Because the exchange offer is for any and all old notes, the number of old
notes tendered and exchanged in the exchange offer will reduce the principal
amount of old notes outstanding. As a result, the liquidity of any remaining old
notes may be substantially reduced.
OTHER
Participation in the exchange offer is voluntary, and you should carefully
consider whether to accept the exchange offer. Graham & James LLP, New York, New
York, as our counsel, has passed upon the legality of the new notes. Neither we,
the Owners, nor Navigator Holdings or any of our representatives is making any
representation to any new notes offered in exchange by this prospectus regarding
the legality of an investment by the offeree or purchaser under appropriate
legal investment or similar laws. These laws regulate the nature and extent of
permitted investments in certain securities for certain institutional investors.
You should consult with your own advisors as to legal, tax, business, financial
and related aspects of participation in the exchange offer in light of your own
circumstances.
We may in the future seek to acquire untendered old notes in open market or
privately negotiated transactions, through subsequent exchange offers or
otherwise. We have no present plans to acquire any old notes that are not
tendered in the exchange offer or to file a registration statement to permit
resales of any untendered old notes.
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<PAGE>
USE OF PROCEEDS
The exchange offer is intended to satisfy certain of our obligations under
the registration rights agreement. We will not receive any cash proceeds from
the issuance of the new notes offered by this prospectus. In consideration for
issuing the new notes as contemplated in this prospectus, we will receive in
exchange old notes in like principal amount, the form and terms of which are
substantially the same as the form and terms of the new notes, except as
otherwise described in this prospectus. The old notes surrendered in exchange
for the new notes will be retired and canceled and cannot be reissued.
Accordingly, issuance of the new notes will not result in any increase in our
indebtedness.
The net proceeds from the offerings of the old notes was loaned to the
Owners to fund the purchase price of the vessels, to pay interest on the old
notes during the construction of the vessels, to obtain the letter of credit and
pay fees thereon during the construction of the vessels and to pay fees and
expenses in connection with the issuance of the old notes and the warrants and
the establishment of the Company.
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<PAGE>
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
The following table sets forth the unaudited consolidated
statements of financial condition of Navigator Holdings and its subsidiaries as
of March 31, 1999 and March 31, 1998.
<TABLE>
<CAPTION>
1999 1998
--------- ---------
(in 1,000's) in 1,000's)
Assets:
<S> <C> <C>
Restricted cash............................................... $ 192,931 $ 251,512
Vessels under construction.................................... 114,642 68,944
Deferred financing costs-net.................................. 12,267 13,116
Pre-Paid Marketing Fees-net................................... 661 1,464
--------- ---------
Total assets......................................... $ 320,501 $ 335,036
========= =========
Liabilities:
Interest payable and other liabilities........................ 8,723 8,584
10 1/2% First Priority Ship Mortgage Notes Due 2007........... 217,000 217,000
12% Second Priority Ship Mortgage Notes Due 2007,
net of discount of $7,038,801 and 7,480,257............... 79,961 79,520
--------- ---------
Total liabilities.................................... 296,961 296,520
--------- ---------
Stockholders' equity
Common stock, par value $.01; 3,000,000 shares authorized
2,000,000 shares issued and outstanding................... 20 20
Additional paid in capital-Common stock...................... 30,940 30,940
Additional paid in capital-Warrants.......................... 7,740 7,740
Retained earnings or (deficit)............................... (23,883) (8,768)
--------- ---------
Total stockholders' equity........................... 14,817 29,932
Total liabilities and stockholders' equity........... $ 320,501 $ 335,036
========= =========
</TABLE>
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<PAGE>
The following table sets forth the audited consolidated statements of
financial condition of Navigator Holdings and its subsidiaries as of December
31, 1998 and December 31, 1997.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
1998 1997
--------- ---------
(in 1,000's) (in 1,000's)
Assets:
<S> <C> <C>
Restricted cash............................................... $ 207,717 $ 254,115
Vessels under construction.................................... 94,294 60,764
Deferred financing costs-net.................................. 12,492 13,316
Pre-Paid Marketing Fees-net................................... 861 1,665
--------- ---------
Total assets......................................... $ 315,364 $ 329,860
========= =========
Liabilities:
Interest payable and other liabilities........................ - -
10 1/2% First Priority Ship Mortgage Notes Due 2007........... 217,000 217,000
12% Second Priority Ship Mortgage Notes Due 2007,
net of discount of $7,156,577 and 7,583,449............... 79,843 79,416
--------- ---------
Total liabilities.................................... 296,843 296,416
--------- ---------
Stockholders' equity
Common stock, par value $.01; 3,000,000 shares authorized
2,000,000 shares issued and outstanding................... 20 20
Additional paid in capital-Common stock...................... 30,940 30,940
Additional paid in capital-Warrants.......................... 7,740 7,740
Retained earnings or (deficit)............................... (20,179) (5,256)
--------- ---------
Total stockholders' equity........................... 18,521 33,444
Total liabilities and stockholders' equity........... $ 315,364 $ 329,860
========= =========
</TABLE>
See Appendix A, "Consolidated Financial Statements of Navigator Holdings PLC."
37
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
We were formed by Navigator Holdings as an Isle of Man public limited
company for the purpose of establishing, owning and financing the Owners. Each
Owner was formed as an Isle of Man private limited company for the purpose of
building and operating one of the vessels. As of the closing date of the
offering of the old notes, neither we nor any of the Owners had any operating
history and all had nominal capitalization.
Navigator Holdings entered into the contracts to build the vessels, the
Technical Supervision Agreement, the Technical Management Agreement and the
Commercial Management Agreement. Navigator Holdings has assigned to each Owner
the contract to build the Owner's vessel and has assigned to the Manager the
Technical Supervision Agreement, the Technical Management Agreement and the
Commercial Management Agreement. In addition, each Owner has entered into the
Management Agreement with the Manager.
On or before the date of issuance of the old notes, we:
o received the proceeds, net of the Initial Purchasers' discounts and
commissions and financial advisory fees, from the offerings and lent a
portion of the net proceeds to the Owners on a joint and several basis
pursuant to a promissory note (the "Intercompany Note");
o paid certain fees and expenses incurred in connection with the
offerings;
o deposited $225.4 million into the Pre-Funding Account and $47.3
million into the Capitalized Interest Account (earning interest at
6.785% annual yield); and
o entered into the Letter of Credit Reimbursement Agreement.
Between August 8, 1997 and March 31, 1999, we, on behalf of the Owners,
instructed the collateral agent to make the following payments from the
Pre-Funding Account and Capitalized Interest Account:
o $12.2 million to Tractebel Gas Engineering for the construction of the
gas tanks;
o $45.5 million to Jiangnan for the construction of the vessels;
o $225,000 for management fees to the Manager;
o $937,500 for letter of credit fees to the letter of credit issuer; and
38
<PAGE>
o $47.8 million for interest on the notes paid to the noteholders.
OPERATIONS
Our operations will be limited to:
o owning the Owners;
o receiving payments under the Intercompany Note;
o making payments of interest and principal on the notes; and
o fulfilling our obligations under the indentures, the Intercreditor
Agreement, the Letter of Credit Reimbursement Agreement and the
registration rights agreement.
Between the date of issuance of the old notes and the delivery date of each
vessel, the operations of each Owner has consisted and will consist solely of:
o entering into commercial arrangements for the future operations of the
vessels;
o managing the construction of the vessels;
o paying management fees;
o paying installments under the building contracts;
o fulfilling its obligations under the Management Agreement; and
o fulfilling its obligations under its guarantee.
On and after the delivery date of each vessel, the operations of each Owner
will consist solely of:
o operating, maintaining, insuring and using the vessel and conducting
activities related thereto;
o receiving payments under charters, contracts of affreightment and
other contracts relating to the employment of its vessel;
o receiving proceeds from any sale of its vessel;
o paying interest and principal on the Intercompany Note and any other
permitted indebtedness;
o paying management fees;
39
<PAGE>
o fulfilling its obligations under the Management Agreement; and
o fulfilling its obligation under its guarantee.
CAPITAL RESOURCES AND LIQUIDITY
Before the contractual delivery date of each vessel, interest on the
principal amount of the notes allocated to the particular vessel will be payable
from amounts on deposit in the Capitalized Interest Account. To the extent the
delivery date for a vessel is delayed, either the builders will pay liquidated
damages which will be deposited into the Pre-Funding Account or the final
installment due under the building contract will be decreased, or both. See
"Business--Building Contracts." In either event, the amount available in the
Pre-Funding Account will be sufficient to pay interest accrued on the principal
amount of the notes allocated to the vessel during the period of delay. After
the delivery date of a vessel, each Owner's sources of funds will be earnings on
its vessel, earnings on temporary investments of certain cash and the proceeds
from any sale of its vessel. In addition, we have obtained a letter of credit in
a total amount of $50.0 million. Under the letter of credit, $45.5 million is
available as a liquidity support to fund payments of interest to the noteholders
under certain circumstances, and $4.5 million is available as a working capital
facility for certain amounts payable by the Owners. Under certain circumstances,
interest on the new Second Priority Notes and the untendered old Second Priority
Notes may be paid through the issuance of additional new Second Priority Notes.
See "Description of the New Notes--Terms of the New Notes--Second Priority
Notes." We do not have and do not expect to have in the future any other source
of capital for payment of our debt service obligations under the notes. See
"Risk Factors--You may suffer if our business fails because we, the Owners and
Navigator Holdings exist solely for the purpose of owning, operating, and/or
guaranteeing obligations in connection with the vessels and the notes."
The following table indicates the amount of the gross proceeds received by
each of the Owners from the offering of the old notes loaned to them under the
Intercompany Note.
VESSEL OWNER AND OLD NOTE PRIVATE OFFERING PROCEEDS
Owner Gross Offering Proceeds Lent
------------------------------- ----------------------------
Navigator Gas (IOM I-A) Limited $59,100,000
Navigator Gas (IOM I-B) Limited $59,650,000
Navigator Gas (IOM I-C) Limited $60,850,000
Navigator Gas (IOM I-D) Limited $61,700,000
Navigator Gas (IOM I-E) Limited $62,700,000
RESULTS OF OPERATIONS
Our results of operations will depend on the earnings from the vessels and
from permitted investments of cash and our level of operating expenses.
40
<PAGE>
GAS CARRIER INDUSTRY
OVERVIEW
Gas carriers transport three main types of liquefied gases:
o petrochemical gases such as ethylene, propylene, vinyl chloride
monomer ("VCM"), butadiene and crude C4;
o liquefied petroleum gas ("LPG") products such as ethane, propane and
butane; and
o ammonia.
Petrochemical gases, LPG, and ammonia, under normal ambient temperatures,
are found in a gaseous state. In order to reduce their volume and facilitate
handling, these products are liquefied for seaborne transportation in gas
carriers.
There are several types of gas carriers which use different techniques to
liquefy and transport cargoes, including:
o fully-pressurized vessels that rely solely upon high pressure to
liquefy gases;
o fully-refrigerated vessels that have the ability to maintain cargo in
a liquefied state by cooling gases to a temperature of -48(degrees)C;
and
o semi-refrigerated vessels which employ a combination of refrigeration
and pressurization techniques.
Generally, LPG and ammonia gases are transported in fully-refrigerated
vessels ranging in size from 20,000 to 80,000 cubic meter ("cbm") for long-haul,
large volume transportation. Petrochemical gases are generally carried in
semi-refrigerated or fully-pressurized vessels under 20,000 cbm. A limited
number of semi-refrigerated vessels have the capability of carrying ethylene,
which requires cooling temperatures to -104(degrees)C, and ethane, which
requires cooling temperatures to -82(degrees)C. To a lesser extent, these
smaller vessels are also used to transport LPG and ammonia over short-haul
routes.
Charter rates and vessel values for gas carriers are influenced by the
supply of and demand for seaborne gas cargo carrying capacity. The demand for
gas carrier capacity is primarily determined by industrial and consumer demand
for petrochemical gases and derivative products and the distance the gases must
be transported. Industrial and consumer demand for petrochemical gases and
derivative products is, in turn, affected by general economic conditions, trends
in personal consumption and manufacturing, exports and imports and the capacity
of chemical plants, crackers and refineries worldwide. The supply of gas carrier
capacity is a function of the size of the existing fleet, the number of new
vessels being delivered, the loss of vessels and the scrapping of older vessels.
41
<PAGE>
SUPPLY OF GAS CARRIERS
Existing World Gas Carrier Fleet
The following table sets forth the composition of the world gas carrier
fleet, which includes vessels which transport petrochemical gases, LPG and
ammonia, as of March, 1999:
42
<PAGE>
WORLD GAS CARRIER FLEET
<TABLE>
<CAPTION>
EXISTING FLEET NEW BUILDINGS ON ORDER
Share of Average Vessels % older Share of
Aggregate existing age in older than 20 Aggregate existing
Size in cbm Vessels cbm fleet(a) years than 20 years Vessels cbm fleet(a)
- --------------- ------- ----------- --------- --------- -------- -------- ------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 - 7,000 684 1,745,200 13.5% 12.0 208 30.4% 26 100,000 5.7%
7,001 - 10,000 45 353,902 2.7% 12.7 5 11.1% 3 24,606 7.0%
10,001 - 22,000 70 1,025,410 7.9% 13.8 20 28.6% 10 196,050 19.1%
22,001 - 50,000 49 1,491,768 11.6% 14.5 14 28.6% 1 38,500 2.6%
50,001 - 60,000 23 1,265,879 9.8% 19.4 12 52.2% 0 - 0.0%
Over 60,000 91 7,018,023 54.4% 14.5 25 27.5% 12 949,000 13.5%
- --------------- --- ---------- ----- ---- --- ---- -- --------- ----
TOTAL 962 12,900,182 100.0% 12.7 284 29.5% 52 1,308,156 10.1%
=============== === ========== ===== ==== === ==== == ========= ====
</TABLE>
(a) Measured in cbm
Source: ViaMar
0 - 7,000 CBM. Vessels in this class are primarily fully-pressurized
vessels which carry petrochemical gases and LPG. There are also some
semi-refrigerated vessels in the 2,000 - 5,000 cbm range including several 4,000
cbm ethylene-capable carriers. The trading patterns of these vessels generally
consist of short-haul "cross-trading" routes, which include hauls throughout the
Far East, the Mediterranean, northwestern Europe and the Caribbean.
7,001 - 10,000 CBM. Vessels in this class are primarily semi-refrigerated
vessels and carry petrochemical gases. There are also some fully-pressurized
vessels in this class. The trading patterns of these vessels are mainly short
cross-trades with some longer hauls. These vessels usually trade Transatlantic,
between the Mediterranean and northern Europe, and between the Arabian Gulf and
Southeast Asia/Far East. The majority of the existing ethylene carriers are in
this size class.
10,001 - 22,000 CBM. Vessels in this class are both semi-refrigerated and
fully-refrigerated vessels. The majority of vessels under 20,000 cbm are
semi-refrigerated while the majority of vessels over 20,000 cbm are
fully-refrigerated. Petrochemical gases, including ethylene for ethylene-capable
carriers, are the primary cargoes traded on semi-refrigerated vessels. The
semi-refrigerated vessels under 12,500 cbm participate primarily in short-haul
trading while the vessels over 12,500 cbm also operate in the long-haul markets.
LPG and ammonia are the major products traded in the fully-refrigerated vessels,
mostly on long-haul routes.
22,001 - 50,000 CBM. Vessels in this class are all modern
fully-refrigerated vessels which carry LPG and ammonia on both long-haul and
cross-trade routes, except for one non-ethylene-capable 30,000 cbm
semi-refrigerated vessel.
43
<PAGE>
50,001 - 60,000 CBM. Vessels in this class are all fully-refrigerated and
transport LPG and ammonia. LPG trading routes include both long-haul trades
between the Arabian Gulf and the Mediterranean and cross-trades in the North Sea
and Europe. Ammonia trading routes are typically shorter cross-trades.
Larger than 60,000 CBM. Vessels in this class are fully-refrigerated and
carry LPG on long-hauls worldwide.
Existing World Ethylene-Capable Fleet
The following table sets forth the current composition of the world fleet
of ethylene-capable carriers, which is a sub-set of the world gas carrier fleet:
WORLD ETHYLENE-CAPABLE FLEET
<TABLE>
<CAPTION>
EXISTING FLEET NEW BUILDINGS ON ORDER
Share of Average Vessels % older Share of
Aggregate existing age in older than 20 Aggregate existing
Size in cbm Vessels cbm fleet years than 20 years Vessels cbm fleet(a)
- --------------- ------- ----------- --------- --------- -------- ------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 - 7,000 64 237,225 40.2% 15.4 20 31.3% 4 22,300 9.4%
7,001 - 10,000 24 186,824 31.7% 12.3 2 8.3% 1 7,500 4.0%
10,001 - 22,000 15 166,080 28.1% 11.7 3 20.0% 6 122,500 73.8%
- --------------- --- ------- ----- ---- -- ---- -- ------- ----
TOTAL 103 590,129 100.0% 14.1 25 24.3% 11 152,300 25.8%
=============== === ======= ===== ==== == ==== == ======= ====
</TABLE>
(a) Measured in cbm
The eleven vessels in the world ethylene-capable fleet that are being built
include the vessels the Owners are building.
Several factors in the gas carrier industry limit supply growth:
o the importance of having a sufficient size fleet to engage in
efficient triangular trading;
o the operational and technical expertise required to operate gas
carriers; and
o the limited number of shipyards which have the expertise required to
build gas carriers which incorporate sophisticated gas plant systems.
44
<PAGE>
TRENDS IN PETROCHEMICAL GAS PRODUCTION AND SEABORNE TRADE
World production and seaborne trade of petrochemical gases have shown
stable growth trend over the past several years. The following table sets forth
historical production and seaborne trade data for the principal petrochemical
gases and LPG, demonstrating both the rate and stability of global production
growth and the stable percentage of production which is transported by sea.
TOTAL WORLD PRODUCTION OF PETROCHEMICAL GASES
(TONNES IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ETHYLENE PROPYLENE BUTADIENE VCM TOTAL
- ---- -------- --------- --------- --- -----
<S> <C> <C> <C> <C> <C>
1990.................... 56,128 30,066 6,209 18,282 110,685
1991.................... 57,630 31,077 5,940 18,209 112,856
1992.................... 59,877 32,653 6,089 19,084 117,703
1993.................... 61,398 33,091 5,988 19,634 120,111
1994.................... 66,883 36,593 6,213 20,920 130,609
1995.................... 70,190 39,048 6,711 21,298 137,247
1996.................... 73,470 40,792 6,912 22,670 143,844
1997.................... 78,490 44,674 7,318 23,873 154,355
1998.................... 79,983 45,375 7,484 23,562 156,344
Compound Annual
Growth Rate 1990-1998 4.5% 5.3% 2.3% 3.2% 4.4%
</TABLE>
- ------------
Source: CMAI
The following table sets forth the historical total demand for shipping of LPG
and petrochemical gases in the periods indicated:
SEABORNE TRADE OF PETROCHEMICAL GASES AND LPG
(TONNES IN THOUSANDS)
<TABLE>
<CAPTION>
ETHYLENE PROPYLENE BUTADIENE VCM LPG TOTAL
-------- --------- --------- --- --- -----
<S> <C> <C> <C> <C> <C> <C>
1990.................. 1,997 1,547 555 1,002 31,506 36,607
1991.................. 2,138 1,752 554 1,300 32,094 37,838
1992.................. 1,998 1,831 662 1,286 34,712 40,489
1993.................. 2,183 1,839 654 1,423 36,193 42,292
1994.................. 2,683 1,859 666 1,456 38,008 44,672
1995.................. 2,724 1,902 662 1,458 40,039 91,457
1996.................. 2,338 1,820 628 1,645 42,210 48,641
1997.................. 3,201 1,800 634 1,744 45,652 53,031
1998.................. 3,046 1,795 682 1,430 46,583 53,536
Compound Annual
Growth Rate 1990-1998 5.4% 1.9% 2.6% 4.5% 5.0% 4.9%
</TABLE>
- -------------
Source: ViaMar
45
<PAGE>
DEMAND FOR GAS CARRIERS
The transportation of petrochemical gases is a market fueled by industrial
and consumer demand for products derived from petrochemical gases and the
planned new construction and expansion of existing petrochemical production
facilities worldwide. The petrochemical gases and LPG described below are used
in many products, including plastics, synthetic-based products, chemicals and
rubber, and as feedstocks.
Cargoes and Trading Patterns
The following is a brief description of the principal cargoes and their
trading patterns that the Company is targeting:
Ethylene. Ethylene is derived from the cracking of petroleum feedstocks. It
is the key building block in the production of a wide range of materials used in
industrial and consumer items including plastics, polyester fibers and resins,
large-volume thermoplastic resins, organic chemicals, kitchen equipment,
anti-freeze and various products used in insulation and packing. Seventy percent
of global ethylene production is used in the production of various plastics and
automobile parts and the balance is used in the production of anti-freeze,
resins and fibers. Worldwide seaborne trade of ethylene rose at a compound
annual growth rate of 5.4% from 2.0 million tons in 1990 to 3.0 million tons in
1998. Historically, the exporting regions of ethylene have been the Middle East,
Europe and Latin America. In the next five years India, recently an importer of
ethylene, is expected to become a producer of ethylene, along with Malaysia,
Thailand and Singapore, while the Mediterranean region and China are expected to
increase their imports.
Propylene. Propylene is produced as a by-product in the making of ethylene
and gasoline and is utilized in the production of consumer goods such as car
components, carpets, plastic pipes and household articles for which there is
typically strong demand in fast-growing economies. Polypropylene, a derivative
of propylene, accounts for 52.0% of propylene usage and is used as a feedstock
for plastics. Propylene is also used in the manufacture of acrylic fiber,
styrofoam, pharmaceuticals, cumene and glue. Between 1990 and 1998, worldwide
seaborne trade in propylene increased at a compound annual growth rate of 1.9%
from 1.5 to 1.8 million tons. In the future, Middle Eastern exports are expected
to increase as new production facilities are introduced in the region. Imports
of propylene, especially by the growing Far Eastern plastic industry, should
ensure continued growth of the seaborne trade.
Vinyl Chloride Monomer (VCM). VCM is produced by the cracking of ethylene
dichloride and requires the input of chloride and ethylene. VCM is primarily
used in the manufacturing of PVC articles. Major end-user markets include
residential construction and irrigation systems. The manufacture of PVC piping
accounts for 35.0% of the VCM produced. The balance of VCM production is used in
the manufacture of such items as window frames and wire and cable. Worldwide
seaborne trade of VCM rose at a compound annual growth rate of 4.5% from 1.0
million tonnes in 1990 to 1.4 million tonnes in 1998. The United States is the
primary exporter of VCM and Southeast Asia and Latin America are the principal
importers.
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<PAGE>
Butadiene. Butadiene is produced in the cracking of ethylene. Butadiene is
primarily used in the making of plastic products for building construction and
rubber for the automobile manufacturing industry. Synthetic rubber accounts for
80.0% of butadiene consumption. South Korea and Europe have traditionally been
large exporters of butadiene, while the United States and the Far East have
traditionally been the largest importers. Worldwide seaborne trade of butadiene
rose at a compound annual growth rate of 2.6% from 555,000 tons in 1990 to
682,000 tons in 1998. Exports from Europe are expected to be maintained in the
future, but are unlikely to increase significantly. Inter-Latin American
butadiene trade is expected to increase.
Liquefied Petroleum Gas (LPG). LPG is produced as a by-product either from
the production of natural gas or the refining of crude oil. The primary uses of
LPG are as fuel for transportation, for residential and commercial heating, and
as a feedstock for the production of petrochemicals. LPG is produced primarily
in the North Sea, as a result of natural gas production, and the Middle East, as
a refining by-product. Exports of LPG are expected to grow significantly over
the next several years. Japan is the world's single largest importer of LPG.
Europe and the United States are expected to see increased imports of LPG. The
seaborne trade of LPG was 46.6 million tons in 1998, which represents a 5.0%
compound annual growth from 1990. We view the transportation of ethane, a
feedstock for petrochemical products that requires cooling to -82(degree)C for
liquefication, as an emerging opportunity for the vessels the Owners are
building.
Planned New Construction and Expansion of Petrochemical Production Facilities
Petrochemical gases are used in the production of a vast array of chemicals
and new production technologies and are allowing plastic to displace metal,
cotton, wood and other materials in an increasing number of end-user products.
As a result, the use of petrochemical gases is expanding worldwide. The
following table summarizes the expected new construction and expansion of
petrochemical production facilities over the period from 1998 to 2001:
47
<PAGE>
NEW PETROCHEMICAL PRODUCTION CAPACITY(a)
BY REGION FOR THE PERIOD 1998-2001
(TONNES IN THOUSANDS)
<TABLE>
<CAPTION>
REGION ETHYLENE PROPYLENE VCM BUTADIENE
- ------ -------- --------- --- ---------
<S> <C> <C> <C> <C>
Western Europe.......................... 3,833 1,480 735 100
Eastern Europe.......................... 1,670 -- -- --
Latin America........................... 2,945 830 260 --
North America........................... 6,798 2,745 -- 790
Africa.................................. 750 -- -- --
Middle East............................. 1,500 995 768 28
Asia/Pacific............................ 12,485 6,120 3,150 670
------ ----- ----- -----
Total Capacity Additions................ 29,981 12,170 4,993 1,588
====== ====== ===== =====
1997 Capacity........................... 79,858 47,845 8,581 25,464
Increase in %........................... 38.0% 26.0% 58.0% 6.0%
</TABLE>
- ----------------
(a) New production capacity is compiled from annualized firm and planned
projects as well as projects in the study phase, and includes both the
construction of new plants and the expansion of existing facilities.
Source: ViaMar
WORLD INCREMENTAL PRODUCTION-CAPACITY
FOR SOME BASE PETROCHEMICALS(a)
(TONNES IN THOUSANDS)
<TABLE>
PRODUCT/YEAR 1998 1999 2000 2001 SUM TONNE
- ------------ ---- ---- ---- ---- ---------
<S> <C> <C> <C> <C> <C>
Ethylene..................................... 4,516 4,445 11,645 9,375 29,981
Propylene.................................... 2,095 3,670 2,665 3,740 12,170
Butadiene.................................... 355 170 200 863 1,588
VCM.......................................... 2,370 1,465 590 568 4,993
===== ===== ====== ====== ======
Sum.......................................... 9,336 8,750 15,100 14,546 48,732
</TABLE>
- ----------------
(a) New production capacity is compiled from annualized firm and planned
projects as well as projects in the study phase, and includes both the
construction of new plants and the expansion of existing facilities.
Source: ViaMar
Since the seaborne trade of petrochemical gases began in the early 1980's,
land-based terminal storage facilities have grown steadily, providing access to
larger, more efficient vessels with increased economies of scale. For example,
the first generation of land-based ethylene terminals had a storage capacity of
8,000-15,000 cbm. By the late 1980's, the maximum land-based storage capacity
had reached 30,000 cbm. New production facilities are currently planned and
under construction with storage capabilities of up to 60,000 cbm. We believe
that this trend of increasingly larger land-based storage facilities will
support the
48
<PAGE>
transport of larger volumes of petrochemical gases resulting in greater demand
for the vessels the Owners are building.
THE CHARTER MARKET
The Chartering Process
The chartering of vessels for a specified period of time or to carry a
specific cargo is an integral part of the market for seaborne transportation of
liquefied gases. The charter market, consisting of a worldwide network of
brokers specializing in the gas industry, is well established and efficient. The
chartering process begins when a producer, user or trader of petrochemical gases
identifies the need to transport a cargo or cargoes from one port to another.
The charterer typically contacts a broker or group of brokers to determine the
availability of suitable vessels to transport the specified cargo. The charterer
then chooses from an array of available vessels and seeks to negotiate the most
favorable economic terms for its transportation requirements. Typically, the
agreed terms are based on standard industry charterparties prepared to
streamline the negotiation and documentation processes.
Types of Charters
Charters may be arranged on a spot basis for the immediate hiring of a
vessel, usually for a single voyage, or through longer term arrangements, such
as contracts of affreightment and time or bareboat charters. Contracts of
affreightment are agreements by vessel owners to transport a specified cargo on
a specified route on a regular basis. Contracts of affreightment function as a
long-term series of spot charters, except that the owner is not required to use
a specific vessel to transport the cargo, but instead may use any vessel in its
fleet. Contracts of affreightment benefit vessel owners by providing a
guaranteed level of employment over a standard trading route. An owner with an
efficient fleet configuration can schedule its vessels in a triangular trading
pattern in order to minimize ballast trips and idle time, thereby achieving high
capacity utilization and enhancing revenues.
A time charter is a contract for the hire of a vessel for a specific period
of time, with the vessel owner being responsible for providing the crew and
paying operating costs, while the charterer is responsible for fuel and other
voyage costs. As with a time charter, a bareboat charter is a contract to hire a
vessel for a period of time with the exception that under a bareboat charter the
charterer is responsible for operating the vessel and pays all associated
operating costs of the vessel during the charter.
Comparison to other Shipping Markets
Unlike other shipping markets, such as the crude oil tanker market,
producers, users and traders of petrochemical gases generally do not own or
charter on a long-term basis their own fleet of vessels to transport their
cargoes. Instead, cargo owners rely on a small group of large vessel operators
to provide all freight services. This market structure provides cargo owners
with the flexibility to respond quickly and efficiently to changes in trading
patterns, while providing vessel owners with limited competition from captive
fleets.
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<PAGE>
INDUSTRY PARTICIPANTS
The number of participants involved in the seaborne trade of petrochemical
gases is small and consists of a few large and experienced operators. There is
currently one significant participant in the ethylene carrier segment with
vessels over 10,000 cbm. The largest owner is Bergesen d.y. ASA. Bergesen
controls the Igloo pool (a cooperative marketing venture among several owners)
of 18 vessels ranging in size from 8,000 cbm to 12,000 cbm, most of which were
built in the 1980's.
In the semi-refrigerated, non-ethylene carrier market, Handygas, controlled
by Bergesen, and A. P. Moller are the major participants. Handygas has a fleet
of 10 semi-refrigerated vessels, the majority of which were built in the 1970's.
The average size of these vessels is 12,000 cbm. A. P. Moller's fleet of 21
semi-refrigerated vessels is newer and ranges in size from 15,000 cbm to 21,000
cbm.
BUSINESS
GENERAL
We, the Owners and Navigator Holdings were each formed in 1997 for the
purpose of building and operating a fleet of five state-of-the-art 22,000 cbm
semi-refrigerated ethylene-capable gas carriers. The vessels are designed to
transport the entire range of petrochemical gases, including ethylene,
propylene, VCM, butadiene and crude C4, as well as LPG, such as ethane, propane
and butane. There are no ethylene-capable semi-refrigerated gas carriers
currently operating or under construction that will be larger than the Owner's
vessels. Each vessel will have four separate gas cargo tanks, segregated pumping
and piping systems and two separate deck tanks, allowing each vessel to carry up
to three separate temperature controlled cargoes simultaneously.
When built, the vessels will be among the most versatile gas carriers in
the world in terms of cargo options, ease and speed of loading and discharging
cargoes and adaptability for route scheduling. The vessels' capabilities will
minimize operating costs, reduce voyage times and maximize vessel utilization.
In addition, the vessels' larger cargo capacities, compared to the existing
ethylene-capable fleet, offer significant economies of scale, especially for
long-haul transport.
CONSTRUCTION OF MAJOR PETROCHEMICAL PRODUCTION AND TERMINAL FACILITIES
As a result of the expansion of existing facilities and the construction of
major new petrochemical production facilities and associated large-scale
terminals, the amount of petrochemical gases transported by sea has increased.
New petrochemical production capacity of 48.7 million tonnes is expected to be
on line by the beginning of the next decade, representing a 30.2% increase over
global capacity at the end of 1997. These expanded and new facilities are
typically incorporating large-scale storage terminals which include multiple
tanks capable of handling many different petrochemical products. We believe that
the vessels' large capacity as well as their ability to carry a full range of
petrochemical gas cargoes will make them attractive to major participants in the
petrochemical industry.
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AN ATTRACTIVE MARKET FOR SEABORNE TRADE OF ETHYLENE
We believe that the market for seaborne transportation of ethylene, the key
building block for plastics and a feedstock for other petrochemicals, is
particularly attractive. World ethylene production capacity has doubled over the
past 15 years to a total capacity of approximately 80 million tonnes in 1997.
This trend is expected to continue with additional production capacity of
approximately 30 million tonnes expected by the beginning of the next decade.
Due to its low temperature requirement of -104(degree)C, ethylene is the most
demanding gas cargo to transport and is carried primarily by smaller, more
specialized vessels. As a result, ethylene has typically commanded higher
charter rates than other petrochemical gases. There are no ethylene-capable
vessels which are currently operating that are over 12,500 cbm. In addition, the
vessels will be capable of carrying ethane, a feedstock for ethylene which also
has a low temperature requirement of -82(degree)C. The Company believes the
market for the transportation of ethane will become a premium-rate market.
BARRIERS TO ENTRY
Over the past several years, the gas carrier industry has experienced an
increased emphasis on higher quality vessels and enhanced operating efficiencies
as both customers and regulatory authorities have increasingly focused on safety
issues and environmental protection.
As the industry faces more stringent operating standards, including
International Safety Management code certification, Chemical Distribution
Industry certification and inspection certification by major customers, we
believe that the existing fleet will find it increasingly difficult to compete
without major capital investment for upgrades. Whereas in the oil carrier
industry the entrance of new owners is commonplace, few vessel owners have the
resources and the access to commercial and technical expertise necessary to
build and operate an efficient-size fleet of petrochemical gas carriers and to
attract major customers. In addition, few shipyards have the capabilities and
experience required to build gas carriers, which incorporate sophisticated gas
plant systems. Given these entry barriers and the unique capabilities of the
Owners' vessels, we believe that we will have a competitive advantage over other
industry participants. See "--The Vessels."
STRONG SECONDHAND VESSEL VALUES
Producers, refiners, traders and end-users of petrochemical gases do not
typically own or control their own vessels. Instead, vessels are owned by a
limited number of experienced operators, each with a relatively large fleet.
This market structure, combined with the complexity of building and operating
vessels capable of carrying petrochemical gases, has resulted in these vessels
maintaining strong secondhand values over time. For example, a 15,000 cbm
semi-refrigerated gas carrier built in 1990 was sold in the secondary market in
early 1997 at a price equal to 93% of its delivered cost, reflecting the high
expected return and the high replacement cost of these vessels.
BUSINESS STRATEGY
The Company's strategy is to take advantage of the demand for seaborne
transportation of petrochemical gases and LPG resulting from the worldwide
expansion in the
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production, use and trade of petroleum by-products. The Company's fleet will
supply transportation services to existing customers of some of the stockholders
of Navigator Holdings, including major oil, chemical and trading companies. The
key elements of this strategy include:
Integrated Chartering Strategy. Charterers of gas carriers rely on short
and long-term contracts of affreightment and, to a lesser extent, time and spot
charters, allowing them to respond quickly and efficiently to the changing
trading patterns of the petrochemical gas market. The Company intends to take
advantage of these market dynamics by building a portfolio of contracts of
affreightment with major customers. These contracts are expected to be from one
to five years in length and would provide the vessels with a high level of
continuous employment. We also intend to use the spot market and, to a lesser
extent, time charters of the vessels to achieve maximum capacity utilization and
minimize ballast trips and idle time. This strategy will be implemented by
MarLink. MarLink is a leading commercial manager of vessels in the petrochemical
gas market.
The Company has entered into a letter of intent with a major petrochemical
supplier to utilize the vessels. Under the letter of intent, the parties intend
to enter into an agreement covering the worldwide transportation of
petrochemical gas for a minimum period of five years. At the specified maximum
quantities, the agreement would provide for the full utilization of between two
to four of the Owners' vessels depending on the loading and discharge ports
designated by the charterer.
Maximize Ethylene Business. Historically, ethylene has generally achieved
an approximate 10-15% premium over charter rates for other petrochemical gas
cargoes. As ethylene frequently trades along the same routes as other
petrochemical gases, the vessels' multiple tank configuration should enable us
to maximize the proportion of the freight mix accounted for by ethylene, without
sacrificing cargo capacity utilization or route efficiency. Based on historical
trends, as well as the increasing size of production facilities, we also believe
that the average size of ethylene freights will increase, thereby enhancing the
competitiveness of the vessels.
Build Versatile Vessels with Multi-Cargo Capability. The vessels will be
among the most versatile petrochemical gas carriers in the world given their
ability to carry the full range of petrochemical gases and to transport up to
three segregated temperature controlled cargoes simultaneously. We believe that
these larger, multiple-tank vessels will provide the Company with a competitive
advantage over other operators in the petrochemical gas freight market. In
addition, the vessels will offer improved operating efficiencies due to their
higher speed and shorter loading and discharge times as compared to many less
sophisticated vessels. We have chosen the builders of the vessels because of
their previous experience in the building of gas carriers with Tractebel Gas
Engineering, a leading engineering firm in the production of gas plants. See
"--The Vessels" and "--The Builders and Tractebel Gas Engineering."
Maximize Vessel Utilization. We believe that our fleet size of five
vessels, each with four tanks and the ability to carry up to three segregated
temperature controlled cargoes, will allow our fleet to adopt triangular trade
patterns which minimize ballast trips. In addition, the vessels' ability to
carry up to four cargoes simultaneously will give us the potential to service up
to 15 charterers at any one time. We believe that the size of the vessels will
also be attractive
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to charterers with substantial long-haul transport requirements. Our fleet size
and configuration will provide the operational flexibility necessary to meet the
logistical demands of managing complex trading patterns.
THE VESSELS
The Owners' vessels will be state-of-the-art gas carriers. We believe that
the size and configuration of the Owner's vessels, as well as the features
incorporated therein, will make them more attractive to charterers than other
vessels. As a result, we expect the vessels to realize higher-than-average
levels of utilization in the transport of high value petrochemical gas cargoes
as compared to other gas carriers, resulting in higher earnings for each vessel.
The Owners' vessels will be semi-refrigerated, combining refrigeration and
pressurization to maintain their cargoes in a liquefied state. This will allow
the vessels to load products at varying temperatures from different terminals.
In addition to pre-cooled cargoes, the vessels will have the ability to load
cargoes that cannot maintain their required liquid temperatures prior to
loading, due to distances traveled by pipeline from production facilities to
vessels, by accepting these cargoes under pressure and cooling them on-board the
vessels during the voyage. The load time of these cargoes is thereby reduced
since the cargoes do not need to be cooled prior to loading. Unlike
semi-refrigerated vessels, fully-refrigerated vessels are only able to load
cargoes in a cooled state, requiring those vessels to cool products prior to
loading. This requirement slows the loading of products and limits the number of
terminals which can be efficiently serviced by the vessels.
The nitrogen generator and deck tanks on each of the vessels will allow us
to prepare a vessel's tanks for the next cargo while en route to the next load
port. This will result in time savings of as much as three days on some voyages,
as tank preparation would otherwise have to be carried out in port. These
features provide a significant benefit to charterers and terminal operators by
improving their terminal utilization. The 22,000 cbm carrying capacity of the
vessels will also be beneficial to charterers and terminal operators by reducing
the number of loading and discharging operations, the duration of the operations
and the associated costs.
The vessels will sail under the Isle of Man flag, with a certification from
Germanischer Lloyd. The crew for each vessel will be trained in accordance with
the highest standards. Each crew will consist of 6 to 7 officers and 12 to 13
seamen. Upon delivery, each vessel, including its machinery, equipment and
outfitting, is required to be classed with Germanischer Lloyd and shall be
distinguished in the record by the symbol "GL + 100 A5 E Liquefied Gas Carrier
Type 2G + MC, E, AUT, INERT" as per specification. For the Owner to accept its
vessel, the vessel must comply with the laws, rules, regulations,
recommendations and requirements as set out in the specifications attached to
the related building contract.
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<TABLE>
VESSEL OWNER, REGISTRATION AND CONTRACTUAL DELIVERY DATE
Hull Contractual
Number Owner Registration Delivery Date
------ ----- ------------ -------------
<S> <C> <C> <C> <C>
Navigator Mars............. 2245 Navigator Gas (IOM I-A) Isle of Man August 1, 1999
Limited
Navigator Venus............ 2246 Navigator Gas (IOM I-B) Isle of Man November 1, 1999
Limited
Navigator Saturn........... 2247 Navigator Gas (IOM I-C) Isle of Man March 1, 2000
Limited
Navigator Pluto............ 2248 Navigator Gas (IOM 1-D) Isle of Man June 1, 2000
Limited
Navigator Neptune.......... 2249 Navigator Gas (IOM I-E) Isle of Man September 1, 2000
Limited
</TABLE>
Since 1980, Jiangnan has constructed 56 vessels for foreign shipowners.
Jiangnan has encountered some delays constructing ships with prototype designs,
but for all succeeding ships built according to an existing design Jiangnan has
not experienced any delays in deliveries.
Each Owner will own one vessel.
VESSEL TECHNICAL INFORMATION
(ALL VESSELS)
Length (meters)......................................... 170.0
Breadth (meters)........................................ 24.2
Maximum Draft (meters).................................. 10.9
Maximum Deadweight (tonnes)............................. 22,800
Speed (knots)........................................... 16.5
Cargo Tank Volume (cbm)................................. 22,000
Range (nautical miles).................................. 15,000
CONSTRUCTION PERIOD
The Manager, as agent of Cambridge Gas, has agreed to oversee the
construction of the vessels.
Technical Supervision Agreement
GEBAB was engaged by the Owners to supervise the construction of the
vessels during the pre-delivery period. GEBAB, Navigator Holdings, on behalf of
the Owners, and the builders entered into an Agreement on Contract for Technical
Matters (the "Technical Supervision Agreement"), dated as of February 28, 1997,
pursuant to which each Owner has appointed GEBAB to act as the Owner's technical
representative for technical matters related to the construction of its vessel.
On August 7, 1997 Navigator Holdings assigned its rights under
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the Technical Supervision Agreement to the Manager on behalf of the Owners. As
of October 19, 1998, GEBAB assigned by novation its responsibilities under the
Technical Supervision Agreement to its affiliate, Martime Asia. Martime Asia, in
coordination with Germanischer Lloyd, will monitor the construction of each
vessel.
Pursuant to the Technical Supervision Agreement, Martime Asia will, among
other things, examine all hull and engineering plans submitted by the builders
to ensure that they comply with the terms of the building contracts, monitor the
construction of the vessels to ensure compliance with the terms of the building
contracts and the requirements of Germanischer Lloyd, render monthly progress
reports, advise the Owners of any modifications or improvements which may
improve the vessels or reduce operating costs and oversee any work performed in
drydock prior to the delivery of each vessel.
THE BUILDERS AND TRACTEBEL GAS ENGINEERING
Located in Shanghai, Jiangnan was founded in 1865 and is a modern,
fully-equipped shipyard that is among the largest shipyards under the
supervision and control of China State Shipbuilding Corporation, which also
controls China Shipbuilding, its trading and export subsidiary. Jiangnan
designs, builds, repairs and converts many kinds of vessels including gas
carriers. It also designs, manufactures and erects various specialized machinery
and electrical equipment, non-standardized equipment, pressure vessels, port
machinery and steel structures in accordance with the regulations and
requirements of the world's major classification societies and shipping and
building safety treaties.
China's first generation of submarines and the first self-designed 10,000
dead weight tonne ("dwt") ocean-going ship were built by Jiangnan in the 1950's
and 1960's, respectively. A fleet of oceanographic and scientific survey vessels
was built in the 1970's to support the launching of rockets and satellites in
China. Since 1980, many vessels built by Jiangnan have entered the international
market, including various types of merchant ship cargo vessels and LPG vessels
built for companies located in Germany, the United States, Italy, Norway,
Singapore, Hong Kong and other countries. Some of Jiangnan's recent export
clients include Mitsubishi Corporation, Neptune Orient Lines Ltd., World Wide
Shipping Agency Ltd., Lasco Shipping Co., Canada Steamship Lines and B. Skaugen
Shipping AS.
Jiangnan has previous experience with Tractebel Gas Engineering and in 1998
completed the construction of two 16,500 cbm LPG/ammonia gas carriers for
Bernard Schulte GmbH, a large German shipowner. Jiangnan has also built the
following types of vessels and major components: 4,200 cbm semi-refrigerated
ethylene carriers; a 3,000 cbm fully-pressurized LPG carrier; floating
production storage units; 68,500 dwt panamax oil tankers; 65,000/70,000/73,000
dwt panamax bulk carriers; 50,000 dwt open-hatch bulk carriers; 28,000/34,000
dwt lakes-fitted bulk carriers; 20,000 dwt bulk carriers; 4,000 roll-on/roll-off
car carriers; and UT714 anchor handling-tug-supply vessels. Jiangnan is also
currently constructing other sophisticated types of vessels including five 1,021
TEU fast-speed feeder container vessels.
Tractebel Gas Engineering is an indirect subsidiary of Tractebel, S.A., a
major Belgian public company engaged in the utility and engineering industries.
Tractebel Gas Engineering is a world leader in the engineering, design and
construction of gas storage and
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transportation plants and equipment. It also manufactures port facilities for
the off-loading and receiving of liquefied gases, gas liquefication and handling
systems, chemical and gas plants for installation on carriers, storage
facilities for liquefied gases and chemicals, gas bottling plants, gas terminals
and metering stations, vaporization, transmission lines and compressor stations
and package plants for recovery of products from associated gases. Tractebel Gas
Engineering is a leading provider of turnkey operations. Tractebel Gas
Engineering will design the complex gas plants utilized on the Owners' vessels.
Tractebel Gas Engineering will also supervise the construction and erection of
the vessels' gas plants through its permanent office in Shanghai. Since 1980,
Tractebel Gas Engineering has been involved in the installation of gas plants
for 41 gas carriers, 23 of which are ethylene-capable. Tractebel Gas Engineering
will act as a subcontractor to Jiangnan under each building contract for a
vessel and will be responsible for supplying materials for construction of the
gas plant and supervising its installation.
Jiangnan and Tractebel Gas Engineering have worked together on the
construction of the following gas carriers and components:
JIANGNAN SHIPYARD AND TRACTEBEL GAS ENGINEERING
JOINT GAS CARRIER/COMPONENT BUILDING EXPERIENCE
CAPACITY ETHYLENE-
(CBM) VESSEL TYPE YEAR DELIVERED CAPABLE
----- ----------- -------------- -------
3,000 Fully-Pressurized 1990 No
4,200 Semi-Refrigerated 1992 Yes
4,200 Semi-Refrigerated 1993 Yes
3,750 Gas Tank(a) 1995 No
4,200 Gas Tank(a) 1996 No
4,200 Gas Tank(a) 1996 No
16,500 Semi-Refrigerated 1998 No
16,500 Semi-Refrigerated 1998 No
- --------------------
(a) Tanks built by Jiangnan and delivered to Shanghai Edward Shipbuilding,
China for installation in vessel construction at Shanghai Edward shipyard.
BUILDING CONTRACTS
Specifications
Each vessel will be constructed pursuant to the terms and specifications of
the building contracts. The vessels are being built under the building contracts
between the builders and Navigator Holdings, each dated as of February 4, 1997,
as amended and restated as of June 26, 1997 and as further amended as of August
1, 1997, and assigned by Navigator Holdings to the Owners on or before the date
of initial issuance of the old notes.
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Contractual Delivery Date
The contractual delivery dates of the vessels will be staggered as follows:
Navigator Mars -- August 1, 1999
Navigator Venus -- November 1, 1999
Navigator Saturn -- March 1, 2000
Navigator Pluto -- June 1, 2000
Navigator Neptune -- September 1, 2000
If a change in the rules or regulations of Germanischer Lloyd causes a
period of delay of up to 12 days in the delivery of a vessel, the contractual
delivery date will be extended by that period.
Vessel construction is proceeding slightly behind the original schedule for
the first two vessels and slightly ahead for the last three vessels, with the
first vessel scheduled for delivery the end of August 1999 and the entire fleet
to be delivered by the end of July 2000.
PURCHASE PRICE
The purchase price for each vessel will be approximately $50.2 million. The
following table sets forth the scheduled amounts and timing of the payments to
the builders under the building contracts, except that the builders have
directed the Owners to make the payment due on September 1, 1997 directly to
Tractebel Gas Engineering and this payment has been made.
VESSEL PURCHASE PRICE PAYMENT SCHEDULE
<TABLE>
<CAPTION>
Date Vessel 1 Vessel 2 Vessel 3 Vessel 4 Vessel 5 Total(c)
---- -------- -------- -------- -------- -------- --------
(in millions)
<S> <C> <C> <C> <C> <C> <C>
Issue Date $ 6.6 $ 6.6 $ 6.6 $ 6.6 $ 6.6 $ 33.1
Sept. 1, 1997 2.4 2.4 2.4 2.4 2.4 12.2
Feb. 1, 1998 6.8 -- -- -- -- 6.8
July 1, 1998 -- 6.8 -- -- -- 6.8
Nov. 1, 1998 6.8 -- 6.8 -- -- 13.7
Feb. 1, 1999 -- -- -- 6.8 -- 6.8
Mar. 1, 1999 4.6 -- -- -- -- 4.6
Apr. 1, 1999 -- 6.8 -- -- -- 6.8
June 1, 1999 -- -- -- -- 6.8 6.8
July 1, 1999 -- -- 6.8 -- -- 6.8
Aug. 1, 1999 23.0(a) 4.6(b) -- -- -- 27.5
Oct. 1, 1999 -- -- -- 6.8 -- 6.8
Nov. 1, 1999 -- 23.0(a) 4.6(b) -- -- 27.5
Feb. 1, 2000 -- -- -- -- 6.8 6.8
Mar. 1, 2000 -- -- 23.0(a) 4.6(b) -- 27.5
June 1, 2000 -- -- -- 23.0(a) 4.6(b) 27.5
Sept. 1, 2000 -- -- -- -- 23.0(a) 23.0
Total(c) $ 50.2 $ 50.2 $ 50.2 $ 50.2 $ 50.2 $ 251.0
======= ======= ======= ======= ======= ========
</TABLE>
- --------------------
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(a) Assuming delivery of the vessel occurs on its contractual delivery date.
Under various addenda to the specifications the Owners have agreed to pay
Jiangnan and Tractebel Gas Engineering an additional $245,000 per vessel,
payable on the delivery date of each vessel.
(b) This payment shall be payable to the builders for a vessel only if and when
the collateral agent has received evidence of delivery pursuant to the building
contract for each other vessel having a contractual delivery date prior to the
contractual delivery date of such vessel.
(c) May not total due to rounding.
Each building contract provides for upward and downward adjustments to the
purchase price of a vessel, which adjustments are made through increases or
decreases in the final installment of the purchase price. The purchase price of
a vessel may be increased by $13,000 per day for each day that the vessel is
delivered earlier than its contractual delivery date. In addition, in the event
of certain delays in the delivery of a vessel or the failure of a vessel to
comply with certain specifications, the builders are required to pay liquidated
damages to its Owner.
Under each building contract, the builders may postpone the delivery of a
vessel for a certain number of days beyond its contractual delivery date without
incurring liability for liquidated damages (the "Permissible Delay Period"). The
Permissible Delay Period for each of the vessels is as follows: (i) 60 days for
vessel 1, (ii) 45 days for vessel 2 and (iii) 30 days for each of vessels 3, 4
and 5. The aggregate Permissible Delay Period for all five vessels, is limited
to 150 days. Therefore, for example, if the builders utilize the full
Permissible Delay Period for each of vessels 1, 2 and 3, then only an aggregate
Permissible Delay Period of 15 days is available for the remaining vessels
before the builders are required to pay liquidated damages to the respective
Owner of vessels 4 or 5, or both of them.
During the period of delay following the Permissible Delay Period up to and
including 210 days beyond the contractual delivery date of a vessel (the "First
Delay Period"), the builders must pay liquidated damages to the related Owner in
the form of a reduction in the final installment of the purchase price of the
vessel in an amount equal to $11,000 per day for the first 90 days of delay
beyond the Permissible Delay Period and $14,500 per day for each day of delay
thereafter.
The builders have the option to extend the delivery date of a vessel beyond
the First Delay Period until March 31, 2001 (the "Second Delay Period") by
paying liquidated damages monthly in advance at a rate of $18,000 per day for
the first six-month period, $20,000 per day for the second six-month period and
$22,000 per day thereafter up to and including March 31, 2001. These liquidated
damages are expected to be sufficient to pay the interest on the principal
amount of the notes allocated to each vessel. In the event the builders fail to
make timely payment of these liquidated damages, each affected Owner may (1)
waive its right to payment and elect instead to receive a further reduction in
the final installment of the purchase price (in addition to any reduction during
the First Delay Period) equal to the amount of the liquidated damages waived or
(2) rescind the related building contract and demand payment of the specified
Refund Amount for the vessel. An Owner's waiver of the advance payment of
liquidated damages for any given month will not constitute a waiver by the Owner
of its right to
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demand the payment at any later date of liquidated damages or to demand the
advance payment of monthly liquidated damages for any subsequent months of
delay.
The purchase price of a vessel may also be reduced, as a result of
liquidated damages payable by the builders, because of the builders' failure to
construct the vessel in compliance with specifications for guaranteed speed,
fuel consumption, deadweight and cargo tank capacity.
Rescission and Termination of the Building Contracts
An Owner may rescind a building contract upon the occurrence of certain
events of default by the builders, which arise from the non-delivery of a vessel
or the failure of a vessel to meet minimum requirements for speed, fuel
consumption, deadweight and cargo tank capacity. The events of default relating
to non-delivery of a vessel are:
o the failure by the builders to make payments of liquidated damages
monthly in advance during the Second Delay Period and the Owner does
not waive its right to receive the payment of the liquidated damages;
and
o the failure to deliver the vessel by March 31, 2001.
The Owner may also rescind a building contract if its vessel has any of the
following deficiencies:
o its speed is one knot or more below the guaranteed speed of 16.5
knots;
o its fuel consumption is 8.0% or greater than the guaranteed fuel
consumption set forth in the vessel's specifications;
o its deadweight is more than 800 tons below the guaranteed deadweight
of 22,800 tons; and
o its cargo tank capacity is more than 400 cbm below the guaranteed
cargo tank capacity of 22,000 cbm.
A building contract will be automatically terminated if, prior to the delivery
date;
o a vessel is seized by the Chinese government;
o the builders fail to obtain the necessary licenses, permits and other
authorizations from the Chinese government for the construction,
delivery and export from China of the particular vessel; or
o a total loss occurs with respect to a vessel.
In addition to the circumstances described in the preceding sentence, the
builders must not elect to continue performing under the building contract.
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Under the cross-default provisions of the building contracts, in the event
a building contract is rescinded by an Owner or automatically terminated, any
other Owner that has not accepted delivery of its vessel will be deemed to have
also, rescinded its building contract.
Mandatory Redemption of the Notes and the Refund Amount
In the event a building contract is rescinded or automatically terminated,
we are required, under the terms of the indentures, to redeem the principal
amount of the notes allocated to the relevant vessels, and the builders must,
under the building contracts, pay the affected Owner a specified refund amount.
The refund amount together with the amounts held in the Pre-Funding Account and
the Capitalized Interest Account for the building contracts are expected to be
sufficient to pay the Rescission Amount calculated as of the date on which the
Notes are scheduled for redemption.
The refund amount is due and payable upon the delivery by an Owner to the
builders of its notice of rescission of a building contract or upon the
automatic termination of the building contract. If the builders delay the
payment of the refund amount, interest will accrue on the refund amount at a
rate of 10% per annum for each day of delay from and including the date on which
the Owner's notice of rescission is delivered or on which the building contract
is automatically terminated, as the case may be, until but not including the
date on which the builder makes payment in full of the refund amount plus any
refund interest on the refund amount.
Gas Trials
Prior to the delivery date for a vessel, the vessel's gas plant will be
mechanically completed by the builders and a running test of the equipment of
the gas plant and a function test of its system utilizing either inert gas or
dry air will be made by the builders. The tests will be repeated until the
results are deemed by Germanischer Lloyd to be in conformity with the building
contract and the specifications for the vessel.
After the delivery date, the Owner will, at its own cost and expense, carry
out an additional gas trial in accordance with the trial program furnished by
Tractebel Gas Engineering. The Owners must carry out the gas trials within 45
days after the delivery dates subject to certain exceptions. Germanischer Lloyd
will certify each gas trial. If the gas plant is not in conformity with the
building contract and the specifications for the vessel, the builders must
remedy the non-conformity to the satisfaction of the Owner, Germanischer Lloyd
and any other relevant authority. If the non-conformity delays the use of a
vessel, the Owner's only contractual remedy is to receive payment of liquidated
damages of up to $200,000 from the builders, which payment is not supported by
either the related building contract guarantee or the performance bonds.
Warranty of Quality
The builders, for a period of 12 months following the delivery date of a
vessel, guarantee the vessel, its hull and machinery and all parts and equipment
thereof that are manufactured or furnished or supplied by the builders and/or
their sub-contractors under the building contract including material and
equipment (excluding any parts for the vessel which
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have been supplied by or on behalf of the Owner) against all defects which are
due to defective materials, and/or poor workmanship or failure to construct in
conformity with the specifications for the vessel.
BUILDING CONTRACT GUARANTEES AND PERFORMANCE BONDS
The Export-Import Bank of China, the building contract guarantor, has
delivered an irrevocable building contract guarantee with respect to each vessel
and an irrevocable builders performance bond relating to all five vessels, each
on behalf of the builders. Generale de Banque has delivered an irrevocable
performance bond on behalf of Tractebel Gas Engineering, relating to all five
vessels. The building contract guarantees and the performance bonds severally
and in the aggregate unconditionally guarantee payment to the Owners of the
refund amount and any interest on the refund amount. Each building contract
guarantee guarantees the payment to the relevant Owner of the portion of the
refund amount relating to all installment payments that have been made on or
prior to the date on which the building contract is rescinded by the affected
Owner or automatically terminated. The performance bond issued by the
Export-Import Bank of China covers an aggregate amount of up to approximately
$32.5 million for all five vessels and the performance bond issued by Generale
de Banque covers an aggregate amount of up to approximately $16.2 million for
all five vessels. The availability of the performance bond issued by Generale de
Banque, however, is conditioned upon the payment by the Export Import Bank of
China to the Owners of the maximum amount of $32.5 million guaranteed under its
performance bond.
Pursuant to the terms and conditions of the Intercreditor Agreement, the
collateral agent will draw under the performance bonds an amount equal to the
Rescission Amount, calculated as of the date on which the new notes and any
untendered old notes are scheduled for redemption, minus the sum of (1) the
amounts held in the Pre-Funding Account and in the Capitalized Interest Account
and (2) the amount payable under the applicable building contract guarantees.
Each of the building contract guarantees and the performance bonds became
effective upon the payment of the first installment of the purchase price under
the building contracts, which payment was made on the closing date of the
issuance of the old notes with the net proceeds of the offerings. Each building
contract guarantee will expire with respect to the related building contract
upon the earliest of (1) the receipt by the Owner of the guaranteed amount, (2)
the confirmation to the building contract guarantor of acceptance of the related
vessel and (3) May 1, 2001. Each of the performance bonds will expire upon the
earliest of (1) the receipt by any of the Owners of any payment thereunder, (2)
the receipt of confirmation by the applicable performance bond guarantor of the
acceptance of all remaining vessels and (3) May 1, 2001.
The Export-Import Bank of China is owned by the government of the People's
Republic of China and its long-term debt is rated Baal by Moody's and BBB+ by
Standard and Poor's. The Long-term debt of Generale de Banque is rated Aa3 by
Moody's.
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MARKETING AND COMMERCIAL MANAGEMENT
Marketing Strategy
The marketing strategy of the Owners is to build a portfolio of contracts
of affreightment for petrochemical gas cargoes in order to maximize the revenue
potential of the Owners' vessels. The Owners intend to concentrate on
transporting primarily petrochemical gases, particularly ethylene, and
secondarily LPG. The Owners do not intend to transport ammonia cargoes but may
pursue employment as dictated by the overall market for gas transport. On or
prior to the date of the issuance of the old notes, we, Navigator Holdings and
each of the Owners engaged the Manager to manage our daily commercial and
technical operations pursuant to a management agreement (the "Management
Agreement"), including providing administrative services, causing the compliance
of the Owner's covenants in the indentures and monitoring GEBAB or any of its
affiliates' performance under the Technical Supervision Agreement, Technical
Management Agreement and the Commercial Management Agreement. The Manager,
through the expertise of its principal employees, is implementing and will
implement the Owners' marketing strategy. Although the Owners are new entrants
with little experience in the gas carrier industry, they expect to compete
successfully with more established companies because their commercial technical
manager - Martime Asia - has extensive experience in the field.
The Manager believes that contracts of affreightment will offer the
advantages of longer-term employment and the exploitation of the triangular
trading capabilities of the vessels. Triangular trading in this context refers
to the ability of the vessels to trade multiple cargoes on a trade route in
which cargoes are discharged and new cargoes are loaded in a single geographic
region. This kind of triangular trading can be distinguishable from the "A to B"
trade characteristic of crude transport in which the vessel carries a cargo from
the loading port to the discharge port and returns ballast to the loading port.
The Manager may supplement the employment of the vessels with spot charters and
timecharters as opportunities arise in the market. The Manager does not intend
to pursue bareboat charters with respect to the vessels.
The Company has entered into a letter of intent with a major petrochemical
supplier to utilize the vessels. Under the letter of intent, the parties intend
to enter into an agreement covering the worldwide transportation of
petrochemical gas for a minimum period of five years. At the specified maximum
quantities, the agreement would provide for the full utilization of between two
to four of the Owners' vessels depending on the loading and discharge ports
designated by the charterer.
The Manager is implementing and will implement a marketing strategy on
behalf of the Owners through the marketing efforts of its principal employees.
In addition, Marlink through its Commercial Management Agreement with the
Owners, which is described below, will market the vessels on behalf of the
Owners. The Owners intend to supplement the marketing efforts of the Manager and
Marlink by maintaining a non-exclusive brokerage relationship with Xenon
Shipping AS.
We have preliminarily identified Chevron Products Company, Pequiven, Norsk
Hydro, Enichem, PMI, Dow Chemicals, Mitsui USA, and Sunkyong America, Inc.,
among
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others, as potential customers in the petrochemical market. We have identified
Exxon Chemical Company, Shell Chemicals, Texaco Chemical Company, Statoil,
Yukong, Dow Chemicals and Mitsubishi International Corporation, among others, as
potential customers in the LPG market. There is currently no contractual
arrangement between us and any of these customers for the transportation of
cargoes by the vessels, and there can be no assurance that any of these
potential customers will employ the vessels.
Commercial Management Agreement
Navigator Holdings on behalf of the Owners and GEBAB entered into a Master
Commercial Marketing and Services Agreement (the "Commercial Management
Agreement"), dated as of February 28, 1997, under which GEBAB agreed to
commercially manage the vessels. On August 7, 1997, Navigator Holdings assigned
its rights under the Commercial Management Agreement to the Manager on behalf of
the Owners. As of October 19, 1998, GEBAB assigned its obligations under this
agreement to its affiliate, MarLink, through a novation agreement. As the
assignee of GEBAB, upon the completion and delivery of the particular vessel to
its Owners, Marlink will solicit cargo to be transported by the vessels.
Marlink's responsibilities include the marketing of each vessel, the preparation
and negotiation of all contracts of affreightment or other types of charters for
each vessel, operation of all agreements entered into, including invoicing and
accounting and handling of employment-related expenses, calculation of demurrage
and laytime expenses and the coordination of all claims with each Owner's P&I
Clubs.
MarLink will arrange for all income earned with respect to each vessel to
be paid directly into a lock-box account to be held by the collateral agent.
Pursuant to the Commercial Management Agreement, a management fee of 2.0% of
gross revenues from operations received in a given calendar quarter is payable
quarterly by the Manager from the operating account on the 16th day following
the end of each calendar quarter which shall end on the last day of March, June,
September and December. MarLink will deliver a quarterly statement reflecting
the gross operating revenues of the vessels received in the lock-box account,
all actual employment related expenses incurred duly supported by the relevant
documents and vouchers, resulting net time charter earnings during the elapsed
period, days employed as well as idle days and reasons therefor. Each quarterly
statement is due within 15 days after the end of each calendar quarter. Each
month, the Owners will be provided with an estimate of employment-related
expenses. Actual expenses will be paid directly by the Owners upon the
presentation of invoices to the Manager from amounts held in the operating
account.
The Commercial Management Agreement with respect to each vessel has a term
of three years commencing on the delivery to the related Owner of the vessel,
and it will continue after the end of the three-year term indefinitely until
terminated by MarLink or any Owner at any time by giving six months written
notice to MarLink or the Owner, respectively.
OPERATIONS
The Manager intends to implement the Owners' operating strategy by
administering the Technical Management Agreement between Martime Asia and the
Owners.
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Technical Management Agreement
GEBAB and each of its affiliated companies and Navigator Holdings on behalf
of the Owners entered into a Baltic and International Maritime Council (BIMCO)
Standard Ship Management Agreement (the "Technical Management Agreement"), dated
as of February 28, 1997, under which Navigator Holdings, as predecessor to the
Owners, appointed GEBAB and each of its affiliated companies to act as technical
manager of the vessels. On July 31, 1997, Navigator Holdings assigned its rights
under the Technical Management Agreement to the Manager on behalf of the Owners.
As of October 19, 1998, GEBAB assigned its obligations under this agreement to
its affiliate, Martime Asia through a novation agreement. Under the Technical
Management Agreement, Martime Asia will provide for and supervise the crew of
each vessel, supervise and maintain the technical management of each vessel,
arrange for all insurance for each vessel, provide accounting services for each
vessel, arrange for the supply of provisions for each vessel, including bunker
fuel, and provide for the operation of each vessel.
Martime Asia will present an annual budget three months before the end of
each calendar year. The projected budget for 1999, the year the first vessel is
expected to be delivered and become operational, is an average of $190,000 per
month, which amount is expected to be sufficient to cover crew cost and basic
operating expenses, including insurance cover, deck equipment, cargo plant,
engine maintenance, luboils and chemicals, and provision for dry docking.
Following the agreement on the operating budget for the vessels, on the first
business day of each month of the budgeted year, Martime Asia shall prepare and
present to the Manager its estimate of the working capital requirement for each
vessel and shall request the Manager to disburse the funds required to run the
vessel against invoices presented by it.
The Technical Management Agreement provides for a management fee of 2.0% of
gross operating revenues for the first six years after delivery of a vessel and
2.5% thereafter. The fee will be payable by the Owners from the operating
account quarterly in advance on the first day of the calendar quarter based on a
pre-approved budget submitted by Martime Asia. The budgeted management fee shall
be adjusted quarterly in arrears for each calendar quarter and the difference
between the actual management fee earned for a calendar quarter and the
aggregate budgeted management fee paid for the calendar quarter will be
reflected in the budgeted monthly management fee payable on the first day of the
second month immediately following the end of any calendar quarter.
The Technical Management Agreement with respect to each vessel has a term
of three years commencing on the delivery to each Owner of its vessel, and it
will continue after the end of the three-year term indefinitely until
termination by Martime Asia or any Owner at any time by giving 90 days written
notice to MarLink or the Owner, respectively.
INSPECTION
Chemical Distribution Institute
The Chemical Distribution Institute was founded by the major participants
in the liquid and gas transportation market and is controlled by the oil majors,
including Exxon Chemical Company, Chevron Products Company, British Petroleum
(BP) Chemicals, Shell
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Chemicals and Mobil Chemical Company. The Chemical Distribution Institute has
set common vessel inspection criteria for the safe transportation of hazardous
cargo at sea, according to the standards of all individual member companies. The
Chemical Distribution Institute has also implemented standardized vessel
inspections to replace the need for each particular member to inspect and rate
each vessel on a regular basis. These inspections are generally more thorough
and extensive than the inspections carried out by the individual members. The
Chemical Distribution Institute is fully-implemented in Europe and the Americas
and is in the process of being implemented in Asia. We and the Owners intend to
fully meet all the Chemical Distribution Institute code requirements and receive
certification.
International Safety Management
International Safety Management publishes a code (the "International Safety
Management Code") which sets forth standards applicable for internationally
acceptable procedures in safe contemporary ship management. The International
Safety Management Code has been endorsed by the IMO and plays an important role
in international ship management. Entities that do not obtain certification
under the International Safety Management Code have increasing difficulties in
marketing their services. Certification under the International Safety
Management Code is carried out by classification societies acting as auditors
and must be complied with by 1999. We intend to fully meet all International
Safety Management Code requirements. In addition, Martime Asia received both
International Safety Management and ISO certifications in 1999.
ENVIRONMENTAL REGULATIONS
Our business and operations and any charterer of the vessels are materially
affected by governmental regulation in the form of international conventions and
national, state, and local laws and regulations in force in the jurisdictions in
which the vessels operate, as well as in the country or countries of
registration. Because these conventions, laws and regulations are often revised,
and have become increasingly stringent, we cannot predict the ultimate costs of
compliance with any revised conventions, laws and regulations or the impact
thereof on the resale price or useful life of the vessels.
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
CERCLA was enacted to respond to environmental contamination caused by the
release of hazardous substances from facilities and vessels. CERCLA provides
that an owner, operator or demise charterer of a vessel, from which there is a
release or threatened release of certain defined hazardous substances, not
including crude oil or its fractions, is liable for the following: (1) removal
costs or remedial action taken by the United States or a local government; (2)
other necessary costs of response incurred by any other person consistent with
the National Contingency Plan (the primary guidance document for CERCLA response
actions); (3) damages for injury to, destruction of, or loss of natural
resources, including the cost of assessing the injury, destruction, or loss; and
(4) the costs of any health assessment or studies permitted under CERCLA. Since
the vessels may carry substances as cargo which are considered hazardous
substances under CERCLA, a discharge or threat of discharge of the cargo could
result in
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CERCLA liability and have a materially adverse effect on the Owners and the
operation of the vessels.
Total liability under CERCLA for each release from a vessel is limited to
the greater of $300 per gross ton or $5,000,000 for vessels that carry hazardous
substances as cargoes. These limits will not apply if: (1) the release or threat
of release of a hazardous substance was the result of willful misconduct or
willful negligence within the privity or knowledge of an owner or operator, or
the primary cause or the release was a violation of applicable safety,
construction or operating standards or regulations; or (2) the owner or operator
fails or refuses to provide all reasonable cooperation and assistance requested
by a responsible public official in connection with response activities. A
responsible party under CERCLA could face punitive damages equal to three times
the government's cost of response and remediation if the responsible party
fails, without sufficient cause, to undertake a removal or remediation action
ordered by the government.
CERCLA requires that owners and operators of vessels establish and maintain
with the Coast Guard evidence of insurance or of qualification as a self-insurer
or other evidence of financial responsibility sufficient to meet their potential
strict liability limit under CERCLA. The Coast Guard adopted the Final Rule,
which requires evidence of financial responsibility equal to the aggregate of
the CERCLA strict liability limit and liability limit supported by insurance, a
surety bond, self-insurance or a guarantee. Without these certificates, vessels
are prohibited from trading to United States ports or in United States waters.
The Owners have agreed to furnish evidence of financial responsibility with
respect to the vessels to the Coast Guard as required by the Final Rule. Certain
newly-formed insurance companies, which have been deemed acceptable guarantors
by the Coast Guard, have furnished the guarantees pursuant to the Final Rule.
The Final Rule may also be satisfied by evidence of a surety bond or
guarantee. The financial credit of some owners and operators may make the
furnishing of surety bonds or guarantees economically infeasible. Additionally,
vessel owners and operators may give evidence of self-insurance to satisfy the
Coast Guard's regulations. Under these provisions, the shipowner or operator
must have net worth and working capital, measured in assets located in the
United States against liabilities located anywhere in the world, that each
exceed the applicable amount of financial responsibility. If the Owners of the
vessels fail to comply with the Final Rule, it would have a material adverse
effect on the Owners, us and holders of the notes.
Oil Pollution Act of 1990
The Oil Pollution Act imposes liability on responsible parties, as defined
by the Oil Pollution Act, for clean-up expenses and damages caused by oil
spills. The responsible parties could include owners, operators and demise
charterers of vessels. The Oil Pollution Act applies to all vessels that trade
in the United States or its territories or possessions or operate in United
States waters, even if the vessels do not carry oil as cargo, as is the case
with the vessels.
Liability imposed under the Oil Pollution Act is joint and several for all
spill containment expenses, clean-up costs, and other damages arising from
actual and threatened oil spills from their vessels. A spill could include the
discharge of bunkers from the vessels.
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Subject to statutory qualifications, a sole fault third party may be also be a
responsible party under the Oil Pollution Act. For example, a vessel could cause
another vessel to suffer a discharge of oil. Other damages recoverable under the
Oil Pollution Act include:
o natural resource damages and the costs of assessment;
o real and personal property damage;
o net loss of taxes, royalties, rent, fees, and other lost government
revenues;
o lost profits or impairment of earning capacity due to property or
natural resource damage;
o net cost of public services necessitated by a spill response, such as
protection from fire, safety or health hazards; and
o loss of subsistence use of natural resources.
A responsible party's limit of liability under the Oil Pollution Act is the
greater of $1,200 per gross ton of the discharging vessel or $10 million per
vessel, subject to possible adjustment for inflation; however, this limit would
not apply if the incident were proximately caused by violation of applicable
United States federal safety, construction or operating regulations or by the
responsible party's gross negligence or willful misconduct, or if the
responsible party fails or refuses to report an incident which the responsible
party knows or has reason to know of, or to provide all reasonable cooperation
and assistance requested by a responsible official in connection with oil
removal activities. The Oil Pollution Act does not by its terms impose liability
on lenders or the holders of mortgages on vessels; however, there is no specific
exclusion for these entities under the Oil Pollution Act. In addition, if the
collateral agent or any holder of the notes participates so substantially in the
overall management of the vessels so as to be considered their "operator" or
exercises remedies and becomes an "owner" or "operator" or "demise charterer" of
a vessel following an event of default under the ship mortgages, such persons or
entities may be subject to liability under the Oil Pollution Act. A catastrophic
spill could exceed the liability limits of any insurance coverage available, in
which event there could be a material adverse effect on the owner and the
operator of the vessel involved in the spill.
The Oil Pollution Act, like CERCLA, requires owners and operators of all
vessels, whether or not the vessels carry oil as cargo, to establish and
maintain with the Coast Guard evidence of insurance or of qualification as a
self-insurer or other evidence of financial responsibility sufficient to meet
their potential strict liability limit under the Oil Pollution Act. Owners or
operators of tankers operating in United States waters must file vessel response
plans with the Coast Guard, and their tankers must operate in compliance with
their Coast Guard approved plans. These response plans must, among other things:
o identify and ensure, through contract or other approved means, the
availability of necessary private response resources to respond to a
"worst case" discharge;
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o describe crew training and drills;
o identify a qualified individual with full authority to implement
removal actions; and
o describe mitigation and response actions. The Owners will ensure that
the vessels have response plans approved by the Coast Guard.
The Oil Pollution Act specifically permits individual states to impose
their own liability regimes with regard to oil pollution incidents occurring
within their boundaries, and many states have enacted legislation providing for
unlimited liability for oil spills. In some cases, states which have enacted
legislation have not yet issued implementing regulations defining tanker owners'
responsibilities under these laws. Additionally, under the Oil Pollution Act the
liability of responsible parties, United States or foreign, with regard to oil
pollution damage in the United States is not preempted by any international
convention.
The Oil Pollution Act expressly provides that individual states are
entitled to enforce their own pollution liability laws, even if inconsistent
with or imposing greater liability than the Oil Pollution Act. There is no
uniform scheme among the states. Some states have the Oil Pollution Act-like
schemes for limiting liability to various amounts, other states rely on
fault-based remedies under common law, while still other states impose strict
and unlimited liability on an owner or operator. In addition, some states also
have established their own requirements for financial responsibility. Compliance
with and violation of state regulations, and the liabilities imposed thereunder,
may have a material adverse effect on the business and the operations of the
Owners and therefore us, and any charterer of the vessels.
International Maritime Organization
The IMO, a specialized agency organized in 1958 by the United Nations in
which over 100 countries are members, provides international regulations and
practices affecting shipping and international trade and encourages the adoption
of standards of safety and navigation. During the last 35 years, the IMO has
initiated over 700 resolutions and 30 major conventions and protocols. All IMO
agreements must be ratified by the individual member states.
In May 1996, the IMO adopted a draft International Convention on Liability
and Compensation for Damage in Connection with the Carriage of Hazardous and
Noxious Substances by Sea (the "HNS Convention"). The HNS Convention was open
for signature until October 1, 1997.
As of June 1, 1999, there were eight signatories to the HNS Convention,
none of whom have ratified the Convention. The HNS Convention establishes a
uniform international legal regime to ensure prompt and adequate compensation to
victims of spills and release of hazardous and noxious substances ("HNS") from
vessels. HNS are defined broadly by reference to various IMO codes and lists and
include approximately 6,000 bulk and packaged substances.
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Damages recoverable under the HNS Convention include personal injury and
death, property damage outside the ship, environmental damage, and preventive
measures. The HNS Convention excludes damage for oil that is covered by the
International Convention on Civil Liability for Oil Pollution Damage of 1969
("CLC"), as amended by the 1992 Protocol, which entered into force May 30, 1996.
There are two tiers of liability under the HNS Convention. The first tier is
strict shipowner liability that must be guaranteed by compulsory insurance or
some other financial guarantee. Limits of liability under the first tier are
based on tonnage: (1) for vessels less than 2,000 gross tons, the limit of
liability is 10 million Special Drawing Rights ("SDRs"). A SDR is defined by the
International Monetary Fund on the basis of a basket of currencies. The exchange
rate in effect on May 28, 1999 for the dollar equivalent of the SDR was
approximately 1.34; (2) for vessels greater than 2,000 gross tons but less than
50,000 gross tons the limit of liability allows an additional limit of 1,500
SDRs per ton above 2,000; and (3) for vessels with a gross tonnage in excess of
50,000 the limit of liability allows an additional 360 SDRs per ton up to a
maximum of 100 million SDRs. For example, at $1.39 per SDR, a 100,000 gross ton
vessel would have a limit of liability under the HNS Convention of approximately
$139,000,000. The second tier of liability under the HNS Convention is an
international fund (the "HNS Fund"), which will pay compensation for damages
that exceed the vessel owner's liability limit or if the vessel owner is not
liable or is otherwise unable to meet its first tier liability obligations.
Total liability under the first and second tiers is limited to 250 million SDRs.
A vessel owner loses its right to limit liability under the HNS Convention if it
is proved that the damage resulted from the personal act or omission of the
owner, committed with the intent to cause the damage, or recklessly and with
knowledge that the damage would probably result.
The HNS Fund will be composed of several accounts. There will be a separate
account for: (1) liquefied natural gas ("LNG"); (2) LPG; and (3) oil. These
industries will contribute to the HNS Fund by receivers and importers of HNS in
a contracting state, with the exception of the LNG account. In the case of the
LNG industry, the cargo titleholder will pay contributions to the LNG account
immediately prior to discharge in a contracting state. Collections and payments
from contributors will be managed by the HNS Fund, and contributors will be sent
an invoice annually. The amount of the levy will be determined primarily by the
claims submitted to the HNS Fund the preceding year and the volume of HNS the
contributor imported. Initial contributions will also be required to capitalize
the HNS Fund and cover administrative costs. In addition to the special HNS Fund
accounts, there will be a general account to provide compensation for damage
from any HNS not falling within the HNS separate accounts.
Outside the United States, many countries have ratified and follow the
liability scheme adopted by the IMO and set out in the CLC Convention. Under the
CLC, an oil tanker's registered owner is strictly liable for pollution damage
caused on the territorial waters of a contracting state by a discharge of oil,
subject to certain defenses and limits. The current limit for a ship not
exceeding 5,000 gross tons is 3.0 million SDRs and, for each additional tonne on
a larger vessel, an additional 420 SDRs, up to a maximum of 59.7 million SDRs.
For example, at $1.39 per SDR, the maximum liability is approximately $83
million. Vessels trading to contracting states must establish evidence of
insurance covering the limit of liability of the owner. In jurisdictions where
the CLC has not been adopted, various legislative schemes or common law govern,
and liability is imposed either on the basis of fault or in a manner similar to
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the CLC. On March 6, 1992, the IMO adopted regulations which set forth new and
upgraded requirements for pollution prevention for tankers. These regulations
went into effect on July 6, 1995. Each vessel will be required to comply with
the IMO regulations.
The IMO continues to review and introduce new regulations on a regular
basis. It is impossible to predict what additional regulations, if any, may be
passed by the IMO, whether those regulations will be adopted by member countries
and what effect, if any, those regulations might have on the operation of the
vessels.
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THE COMPANY, THE MANAGER AND THE STOCKHOLDERS
Navigator Holdings is an Isle of Man public limited company which
beneficially owns 100% of our capital stock. We are an Isle of Man public
limited company that has been incorporated solely for the purpose of issuing the
notes, lending the net proceeds of the notes to the Owners and entering into and
performing its obligations under the Letter of Credit Reimbursement Agreement.
Navigator Gas Transport owns 100% of each Owner. Each Owner has been
incorporated as an Isle of Man private limited company. The Manager, an
affiliate of Cambridge Gas through common ownership, is an Isle of Man private
limited company, 44% of which is owned by Cambridge Holdings, L.L.C.
THE STOCKHOLDERS OF NAVIGATOR HOLDINGS
The stockholders of Navigator Holdings include entities that, severally but
not jointly, will provide all the critical services during the required
construction period, and entities, other than Tractebel Gas Engineering, which
have been or will be responsible for the establishment of contract
specifications and the future employment and ongoing operations of the vessels.
These entities include:
o Cambridge Gas Transport Corporation. Cambridge Gas is owned 44% by
Cambridge Holdings, L.L.C. Cambridge Holdings, together with its affiliates
are engaged in the business of providing investment and advisory services
to major shipping, energy service and oil companies worldwide, as well as
acquiring, owning, financing and managing vessels for its own account and
offering these vessels for use by third party charterers. Cambridge
Holdings enjoys strong relationships with ship brokers located in London,
Tokyo, Oslo and the United States, with major oil companies, with Far
Eastern shipyards and with leading international maritime transportation
companies. In addition, Cambridge Holdings has expertise in related areas
such as commercial arrangements including contracts of affreightment and
pooling arrangements, time and bareboat charters, as well as in financial
management and operations. Cambridge Holdings is headquartered in New York.
o GEBAB. GEBAB is a privately-owned German investment house
specializing in ship finance, shipowning and other shipping services
through its affiliates. GEBAB has assigned its shares of stock in Navigator
Holdings to Martime Asia through a novation agreement to the stockholders
agreement between GEBAB and Martime Asia dated October 19, 1998. Martime
Asia is not presently the registered stockholder of Navigator Holdings.
Martime Asia, an affiliate of GEBAB, will be responsible for the technical
supervision of the construction of the vessels, pre-delivery technical
management and the ongoing technical management of the vessels after
delivery from the builders. GEBAB's affiliate, MarLink, will seek to
negotiate, on behalf of the Owners, contracts of affreightments, spot
charters and occasional time charters to provide a balanced mix of
employment for the vessels. GEBAB, together with a German shipowner,
Hartmann Schiffarts GmbH also owns a major stake in GasChem Services GmbH
and Co., KG. GasChem Services is a well-established commercial management
company that currently manages for various owners a pool of 18 gas carriers
ranging in size from 4,000 cbm to 8,000 cbm capacity, of which thirteen
have ethylene capacity. See "Business-Marketing and
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Commercial Management--Commercial Management Agreement" and
"--Operations-Technical Management Agreement."
o Tractebel Gas Engineering. Tractebel Gas Engineering is an indirect
subsidiary of Tractebel S.A., a major Belgian public company engaged in the
utility and engineering industries. Tractebel Gas Engineering is a world
leader in the engineering, design and construction of gas storage and
transportation plants and equipment. In addition, it manufactures port
facilities for the off-loading and receiving of liquefied gases, gas
liquefication and handling systems, chemical and gas plants for
installation on carriers, storage facilities for liquefied gases and
chemicals, gas bottling plants, gas terminals and metering stations,
vaporization, transmission lines and compressor stations and package plants
for recovery of products from associated gases. Tractebel Gas Engineering
is a leading provider of turnkey operations. Tractebel Gas Engineering will
design the complex gas plants to be utilized on the Owners' vessels.
Tractebel Gas Engineering will also supervise the construction and erection
of the vessels' gas plants through its permanent office in Shanghai. Since
1980, Tractebel Gas Engineering has been involved in the installation of
gas plants for 41 gas carriers, 23 of which are ethylene-capable. Tractebel
Gas Engineering will act as a subcontractor to Jiangnan under each building
contract and will be responsible for supplying materials for construction
of the gas plant and supervising its installation. Tractebel Gas
Engineering has acquired or is acquiring shares of capital stock of
Navigator Holdings solely because of its role as a subcontractor.
o Arctic Gas S.A. Arctic Gas is part of the Cryofin Group. Cryofin is
a shipbuilding group responsible for the original design and engineering
specifications for the vessels. Over the last 50 years, Cryofin has
designed, built and partly operated more than 40 gas carriers of various
types, including the first vessel designed to carry LPG.
o Xenon Shipping Inc. Xenon Shipping is a wholly-owned subsidiary of
Cambridge Gas.
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The Manager
The following table sets forth the name, age and principal position with
the Manager of each of its executive officers and directors:
Name Age Position with Manager Appointed
- ---- --- --------------------- ---------
Bjorn Q. Aaserod.............. 42 Director and Chairman July 1997
Nunzio C. Li Pomi............. 42 Director and Secretary July 1998
Shaun F. Cairns............... 50 Director October 1998
Kenneth L. Columbia........... 41 Director July 1997
Each director will serve until he resigns or is removed by a resolution of
the stockholders. Officers are appointed by the board of directors and will
serve until they resign or are removed by the board of directors.
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Bjorn Q. Aaserod has broad experience in the shipping, finance and
industrial sectors. Mr. Aaserod joined Cambridge in 1995. Prior to that he acted
as a consultant to major investment banking firms. Among his other positions, he
has been chairman and chief executive officer of publicly-quoted MG Industries
and has held several directorships in other public corporations. Mr. Aaserod has
close relationships with the major oil companies, first-class shippers and Far
Eastern shipyards.
Nunzio C. Li Pomi has experience in accounting and securities. Mr. Li Pomi
is presently serving as the Controller of Cambridge Fund Management LLC. From
1996 to 1998, Mr. Li Pomi was a Vice-President of Cambridge Partners LLC, an
investment bank, where he assisted in the management of shipping assets and
assisted the controller. Mr. Li Pomi has been a director of Golden State
Petroleum Transport PLC. He received his degree in accounting from the College
of Staten Island.
Shaun F. Cairns has broad experience in accounting and tax matters. Mr.
Cairns has been a chartered accountant since 1976. From 1993 to the present, Mr.
Cairns has served as the Chief Executive Officer of Wychwood Trust Limited, a
company which specializes in taxation and corporate services. From 1976 to 1993,
Mr. Cairns was employed by the Anglo American and De Beers Groups. He was
educated at St. Andrews College, Grahamstown and the University of
Witwatersrand, South Africa. He is and has been a member of the Society of Trust
and Estate practitioners since 1995.
Kenneth L. Columbia has a background as a tanker broker trading gases,
petrochemicals, and other products, and as a vessel operations specialist with
tankers, gas carriers and dry cargo vessels. Mr. Columbia has 20 years
experience in transportation-related positions and extensive administrative and
managerial experience in shipping. Mr. Columbia's prior positions include
working at Xenon Shipping AS, JLM Industries, Inc., Nederkoorn (USA) Inc., and
Colonial Marine Inc.
GEBAB
The following table sets forth the name, age and principal position with
GEBAB of each of its executive officers and directors:
Name Age Position
- ---- --- --------
Stefan-Mathias Pahl......................... 40 Director
D. Jeffrey Phillips......................... 46 Director
Stefan-Mathias Pahl has worked with various shipping companies. In 1986,
Mr. Pahl joined the shipbroker, Interfrete Afretamentos Ltda., in Brazil as
managing director and shareholder. In 1990, Mr. Pahl joined Tankreederei
Ahrenkiel GmbH, Hamburg as managing director in charge of all tanker activities.
At Ahrenkiel, Mr. Pahl arranged a pool of 15 gas carriers ranging from
approximately 4,000 to 8,000 cbm that was managed by GasChem Services.
D. Jeffrey Phillips has twenty-one years of marine management experience in
Europe, Canada, the United States and Asia. He spent two years as managing
director of Ahrenkiel Shipping (HK) Ltd., responsible for the technical and
commercial management and
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new building of 18 vessels. Between 1969 and 1981, Mr. Phillips worked for
various companies including Trundle Scott Shipping Company, Ltd., United States
Lines, London, Furness Withy Chartering Limited, London, and Van Ommeren B.V.,
London. From 1981 to 1990 Mr. Phillips worked as general manager for Canadian
Pacific Ships. In 1990 he became vice president at Turecamo Maritime.
Navigator Holdings
Navigator Holdings has no and will have no employees involved in the
management of the Owners' vessels. The following table sets forth the name, age
and principal position with Navigator Holdings of each of its executive officers
and directors:
Name Age Position with Manager Appointed
- ---- --- --------------------- ---------
Shaun F. Cairns........ 50 Director and Secretary October 1998
Kenneth L. Columbia.... 41 Director July 1998
Audun Krohn............ 55 Director May 1999
Nunzio C. Li Pomi...... 42 Director September 1998
Officers are appointed by the Board of Directors and will serve until they
resign or are removed by the Board of Directors.
Audun Krohn is currently the President Director General of Baltic Finance
SA and the Managing Director of Arctic Gas SA. Mr. Krohn received his law degree
from the University of Oslo and his Masters in Business Administration from
Insead.
Navigator Gas Transport
We have no and will have no employees involved in the management of the
vessels. The following table sets forth the name, age and principal position of
each of our executive officers and directors:
Name Age Position with Manager Appointed
- ---- --- --------------------- ---------
Nunzio C. Li Pomi....... 42 Director, Principal September 1998
Executive Officer,
Principal Financial
Officer, and Principal
Accounting Officer
Shaun F. Cairns......... 50 Director and Secretary October 1998
Kenneth L. Columbia..... 41 Director September 1998
Our officers are appointed by the Board of Directors and will serve until
they resign or are removed by the Board of Directors.
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The Owners
No Owner has or will have any employees involved in the management of their
vessels. The following table sets forth the name, age and principal position
with each Owner of each of its executive officers and directors:
Name Age Position with Manager Appointed
- ---- --- --------------------- ---------
Nunzio C. Li Pomi...... 42 Director, Principal September 1998
Executive Officer, Principal
Financial Officer, Principal
Accounting Officer and
Secretary
Shaun F. Cairns........ 50 Director October 1998
Kenneth L. Columbia.... 41 Director July 1998
Officers are appointed by the Board of Directors and will serve until they
resign or are removed by the Board of Directors.
COMPENSATION OF EXECUTIVE OFFICERS AND
DIRECTORS OF THE COMPANY
Our executive officers and directors have not entered into any arrangement
to receive compensation for services rendered in their respective capacities
with the exception of Shaun Cairns, our Secretary, who is paid according to the
amount of time spent on our business. To date, Mr. Cairns has received
approximately $18,000 for his services.
PRINCIPAL STOCKHOLDERS
All of our issued and outstanding capital stock is beneficially owned by
Navigator Holdings. The following table sets forth information as of the date of
this prospectus, concerning the beneficial ownership of the ordinary shares of
common stock of Navigator Holdings by (1) the only persons known by Navigator
Holdings' management to own beneficially more than 5% of the issued ordinary
shares of the common stock of Navigator Holdings, (2) each of Navigator
Holdings' directors and executive officers, and (3) all directors and executive
officers of Navigator Holdings as a group. The stockholders of Navigator
Holdings obtained equity interests in Navigator Holdings through the Equity
Financing described below, which was consummated at the time of the closing of
the offerings of the old notes.
PERCENT OF
NAME OF BENEFICIAL OWNER NUMBER OF SHARES ORDINARY STOCK(a)
- ------------------------ ---------------- ---------------
Cambridge Gas................................ 1,110,200 55.5%
GEBAB........................................ 200,000(b) 10.0
Arctic Gas................................... 200,000 10.0
Tractebel Gas Engineering.................... 200,000 10.0
Xenon Shipping............................... 200,000 10.0
All executive officers and
directors as a group (4 persons)........... 0 0%
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- ------------
(a) As used herein, the term beneficial ownership with respect to a security is
defined by Rule 13d-3 under the Exchange Act as consisting of sole or
shared voting power (including the power to vote or direct the vote) and/or
sole or shared investment power (including the power to dispose or direct
the disposition) with respect to the security through any contract,
arrangement, understanding, relationship, or otherwise, including a right
to acquire such power(s) during the next 60 days. Unless otherwise noted,
beneficial ownership consists of sole ownership, voting and investment
power with respect to all common stock of Navigator Holdings, as ordinary
shares, shown as beneficially owned by them.
(b) Shares transferred but not yet registered to Martime Asia pursuant to a
novation agreement to the Stockholders Agreement between GEBAB and Martime
Asia dated October 19, 1998.
THE EQUITY FINANCING
On the date of issuance of the old notes, the following occurred:
o Cambridge Gas was issued 1,200,000 shares of Navigator Holdings common
stock in exchange for acting as arranger and for management services
to be performed by the Manager as agent of Cambridge Gas prior to the
delivery date of each vessel pursuant to the Management Agreement.
Cambridge Gas also made cash contributions to Navigator Holdings of
$10,000.
o Arctic Gas was issued 200,000 shares of Navigator Holdings common
stock in exchange for vessel design services contributed to Navigator
Holdings with a cost basis of $10.0 million.
o GEBAB was issued 200,000 shares of Navigator Holdings common stock in
exchange for services contributed to Navigator Holdings during the
pre-delivery period pursuant to the Technical Supervision Agreement
dated August 7, 1997 and for services to be contributed during the
first six years of the operation of the vessel, under the Technical
Management Agreement dated August 7, 1997. GEBAB has provided services
with a cost basis of $1.0 million to the Company.
o Xenon Shipping was issued 200,000 shares of Navigator Holdings common
stock in exchange for a cash contribution to Navigator Holdings in the
amount of $9.3 million. On September 17, 1998 Cambridge Gas acquired
100% of Xenon Shipping, Inc.
o Tractebel Gas Engineering was issued 200,000 shares of Navigator
Holdings common stock in exchange for a cash contribution to Navigator
Holdings in the amount of $10.0 million and payment by Tractebel Gas
Engineering to acquire the Tractebel Gas Engineering Performance Bond
with a cost basis of $650,000.
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The value assigned to the components of the Equity Financing may not
accurately reflect the true value thereof for the purpose of valuing Navigator
Holdings.
Cambridge Gas, GEBAB, Xenon Shipping and their affiliates, the "Designated
Owners," have agreed not to dispose of their shares of stock in Navigator
Holdings if any notes are outstanding, except that they may sell a portion of
their stock, if after the sale, the stock held by the Designated Owners, either
directly or indirectly, represents more than 50% of the total voting power of
the voting stock of Navigator Holdings and more than 50% of the equity interests
in Navigator Holdings.
STOCKHOLDERS AGREEMENT
Navigator Holdings and its stockholders of record are parties to a
stockholders agreement, dated as of August 1, 1997, which contains various
restrictions on the transfer of stock owned by the stockholders. Cambridge Gas
has a right of first refusal to purchase any shares which one or more of the
other stockholders propose to sell. The agreement provides that certain
stockholders continue to hold a specified minimum number of shares for a certain
period of time. Tractebel Gas Engineering has agreed not to dispose of its stock
in Navigator Holdings except to an affiliate of Tractebel Gas Engineering prior
to the expiration of the warranty period of the last vessel to be delivered. The
other stockholders have the right, in the event Cambridge Gas sells all or any
portion of the stock it holds in Navigator Holdings, to require Cambridge Gas to
purchase a proportionate amount of Navigator Holdings stock from the other
stockholders as the number of shares it is selling. The agreement contains
provisions which prevent the Designated Owners from reducing their aggregate
interest in Navigator Holdings to less than a majority interest.
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CERTAIN TRANSACTIONS
THE MANAGER
Each of the Owners has entered into the Management Agreement under which
the Manager will manage each Owner's commercial and technical operations. These
operations include providing administrative services, causing the compliance of
the Owners' covenants in the indentures and monitoring Martime Asia's
performance under the Technical Supervision Agreement and Technical Management
Agreement and monitoring MarLink's performance under the Commercial Management
Agreement. The Manager will receive a fee of $30,000 per annum for each vessel
prior to the delivery date for the vessel and $120,000 per vessel per annum from
and after the delivery date for the vessel. Prior to the delivery date for the
first vessel, the Manager will be responsible for the payment of the fees and
expenses of the trustees and the collateral agent. See "Business--Marketing and
Commercial Management." In addition, the Manager will oversee during the
pre-delivery period all aspects of the vessels' construction on behalf of the
Owners. The cost of these services, which will be $4.0 million, will be
contributed to Navigator Holdings as and when performed. One million dollars of
the cost of these services has been paid and the balance of $3.0 million will be
reorganized as future services comprising 30 months' new building supervisor
fees and a reduction in the technical management fees over six years.
GEBAB
On July 31, 1997, Navigator Holdings assigned to the Manager, acting on
behalf of each Owner, the rights of Navigator Holdings under the Technical
Supervision Agreement, the Technical Management Agreement and the Commercial
Management Agreement. As of October 19, 1998, GEBAB assigned its obligations
under these agreements to its affiliates, Martime Asia and MarLink. Under the
Technical Supervision Agreement, Martime Asia will supervise the construction of
the vessels. See "Business--Construction Period--Technical Supervision
Agreement." Under the Technical Management Agreement, Martime Asia will provide
and supervise the crew for each vessel, supervise and maintain the technical
management of each vessel, arrange for all insurance policies for each vessel,
provide accounting services for each vessel, arrange for the supply of
provisions for each vessel, including bunker fuel, and provide for the operation
of each vessel. See "Business--Marketing and Commercial Management--Commercial
Management Agreement" and "--Operations--Technical Management Agreement." Under
the Commercial Management Agreement, MarLink will advertise and promote each
vessel, prepare and negotiate all contracts of affreightment and/or charters for
each vessel, administer all agreements, calculate demurrage and laytime expenses
and coordinate claims with the P&I Clubs. See "Business--Marketing and
Commercial Management Agreement--Commercial Management Agreement."
STOCKHOLDERS
On the date of initial issuance of the old notes, (1) GEBAB received $1.0
million for marketing and other services in connection with the financing of the
Owners' vessels during their construction, (2) Xenon Shipping AS received $1.0
million to market the vessels during
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their construction and (3) Xenon Shipping, Inc. received a brokerage commission
from the builders in the amount of $9.3 million. On September 1, 1997, Tractebel
Gas Engineering received the second installment of the purchase price in the
amount of $2.4 million per vessel payable under the building contracts. Upon
delivery of each vessel, Tractebel Gas Engineering will receive $100,000 per
vessel for modifications made to the gas plants within the vessels, as amended
to the building contracts.
UK LEASE
As a component of a UK Lease (as defined), the Owners, or lessees under
full payout leases, may enter into either hire purchase agreements or
conditional sale contracts with UK Lessors under which the UK Lessors will
initially pay an amount equal to substantially all of the purchase price for
each of the related vessels and which grants the UK Lessors a right of
possession in respect of the vessels. Each hire purchase agreement or
conditional sales contract will provide that the related Owner will, unless the
related UK Lessor fails to exercise its option in the case of an hire purchase
agreement or otherwise elects in the case of a conditional sales contract, pass
title to the related vessel to the related UK Lessor after the passage of an
agreed upon period of time after the delivery of the vessel or following any
early termination of the related bareboat lease at which time the remainder of
the purchase price for the vessel will be paid. Other than as described above, a
UK Lessor will have no right to acquire title to the related vessel.
Each UK Lessor will be required to acknowledge the rights of the collateral
agent in the related vessel and any income and proceeds therefrom as provided in
the related mortgage and in the Intercreditor Agreement or otherwise agree to
respect the rights, pursuant to an intercreditor or coordination agreement. The
Owners and the collateral agent will acknowledge to the related UK Lessors that
they will (1) not vary provisions of the related mortgages relating to certain
rights as to the disposition of insurance proceeds and (2) give the UK Lessors
notice of any defaults under the mortgages and the right to cure such defaults,
except that the rights of cure will not be available if the related Owners are
subject to bankruptcy or insolvency proceedings and will be available for only a
single period of 90 days.
As a further component of a UK Lease, each UK Lessor will in turn lease the
related vessel back to the related Owner under a separate, full payout bareboat
lease for the vessel. It is anticipated that each Owner will pay to a subsidiary
of another major UK Bank (each, a "Defeasance Bank") a sum of money, and that
the Defeasance Bank will, in consideration of such payment, assume, up to
specified limits of liability, the payment obligations of the Owner under the
related bareboat lease. To the extent that the payment obligations under a
bareboat lease are assumed by the Defeasance Bank, the related Owner will be
released from those obligations; except that each Owner will remain liable under
its bareboat lease for payment obligations in excess of the obligations that are
defeased.
It is anticipated that the vessels will be chartered by the Owners to a
shipping company or a subsidiary of Navigator Holdings pursuant to either
bareboat or time charters. It is a requirement of UK tax law that while the
vessels are leased by UK Lessors the leasing arrangements must continue for a
period of 10 years and each lessee must be a company which (1) is liable for UK
corporate tax in respect of its profits from the related vessel and (2) uses the
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vessel for the purposes of that company's non-leasing trade or charters the
particular vessel in the manner that satisfies the UK legislation relating to
the availability of depreciation allowances for the UK Lessors.
As a precondition to any Owner entering into a UK Lease, any rating agency
then rating the notes must confirm to the trustees in writing that entering into
the UK Lease will not result in a ratings decline with respect to the notes.
DESCRIPTION OF THE NEW NOTES
GENERAL
The new First Priority Notes will be issued, and the old First Priority
Notes were issued, pursuant to an indenture, dated as of August 1, 1997 (the
"First Priority Indenture"), among us, as issuer, the Owners and United States
Trust Company of New York, as First Priority Trustee. The new Second Priority
Notes will be issued, and the old Second Priority Notes were issued, pursuant to
an indenture, dated as of August 1, 1997 (the "Second Priority Indenture"),
among us, as issuer, the Owners and The Chase Manhattan Bank, as Second Priority
Trustee. The First Priority Indenture and the Second Priority Indenture are
collectively referred to herein as the "indentures," and the First Priority
Trustee and the Second Priority Trustee are collectively referred to herein as
the "trustees." Navigator Gas Transport, the Owners, Navigator Holdings, the
trustees, the issuer of the letter of credit and United States Trust Company of
New York, as collateral agent, are all parties to a collateral agency and
Intercreditor Agreement, dated as of August 1, 1997. Copies of the indentures,
the Intercreditor Agreement and the other Security Agreements will be available
as set forth under "Where You Can Find More Information." The following summary
of the material provisions of the notes, the indentures and the Security
Agreements does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, all provisions of the notes, the indentures and
the Security Agreements, including the definitions of terms used therein and
those terms made a part thereof by the Trust Indenture Act of 1939, as amended.
For more complete information, you should obtain and review these documents.
UNITS AND WARRANTS
The old Second Priority Notes were issued in units together with warrants
entitling the holder to purchase shares of common stock of Navigator Holdings.
Following the exchange offer the new Second Priority Notes and the warrants will
trade separately. Each unit consists of one Second Priority Note and 7.66
warrants entitling the warrant holder to purchase one share of common stock per
warrant at an exercise price of $.01 per share, subject to adjustment.
EXCHANGE
The new notes have been registered under the Securities Act and,
accordingly, will not be subject to certain restrictions on transfer applicable
to the old notes. The new First Priority Notes have terms and conditions
identical in all material respects to those of the old First Priority Notes, and
the new Second Priority Notes have terms and conditions identical in all
material respects to those of the old Second Priority Notes, except that the new
notes are
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registered under the Securities Act, and the old notes are subject to certain
restrictions on transfer and are entitled to the benefit of the registration
rights agreement. Accordingly, unless specifically stated to the contrary, the
following description of the new notes applies equally to the old notes and the
new notes. The new First Priority Notes and the old First Priority Notes will be
treated as one series for purposes of the First Priority Indenture, and the new
Second Priority Notes and the old Second Priority Notes will be treated as one
series for purposes of the Second Priority Indenture. The statements under this
section relating to the old notes, the new notes and the indentures are
summaries of the material terms, but do not purport to be a complete
description, of the indentures, the old notes or the new notes.
TERMS OF THE NEW NOTES
Interest on the new notes will be computed on the basis of a 360-day year
comprised of twelve 30-day months. Interest on overdue principal, and, to the
extent permitted by law, on overdue installments of interest will accrue at 1%
per annum in excess of the stated rate for each series of notes. The new notes
will be issued only in fully registered form, without coupons, in minimum
denominations of $100,000 and integral multiples of $1,000 in excess thereof.
The new notes may be presented for registration of transfer and exchange at the
offices of the applicable registrar. Initially, the trustee under an indenture
will act as paying agent and registrar with respect to the new notes of the
related series.
First Priority Notes
The new First Priority Notes and any untendered old First Priority Notes
will be secured obligations of ours will be limited to an aggregate principal
amount of $217,000,000 and will mature on June 30, 2007. The new First Priority
Notes and any untendered old First Priority Notes are guaranteed jointly and
severally by the Owners. See "--Guarantees." The new First Priority Notes and
any untendered old First Priority Notes and the guarantees will be secured by
the collateral and will have the benefit of the letter of credit. See
"--Security."
The new First Priority Notes and any untendered old First Priority Notes
will bear interest at a rate of 10 1/2% per annum from the date of initial
issuance of the old notes until the principal of the old notes is paid or made
available for payment. Interest on the new notes will be payable semi-annually
on June 30 and December 31 of each year, commencing December 31, 1999 to the
person in whose name the relevant new First Priority Note or the untendered old
First Priority Note is registered at the close of business on the preceding June
15 or December 15, as the case may be. The exchange of old notes for new notes
will not cause any interruption in the payment of interest.
Second Priority Notes
The new Second Priority Notes and any untendered old Second Priority Notes
will be secured obligations of ours limited to an aggregate principal amount of
$87,000,000, plus up to $20.9 million of additional Second Priority Notes that
may be issued instead of paying cash interest as described below, and will
mature on June 30, 2007. The new Second Priority Notes and any untendered old
Second Priority Notes are guaranteed jointly and severally by the Owners. See
"--Guarantees." The new Second Priority Notes and any untendered old Second
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Priority Notes and the guarantees will be secured by the collateral and, under
certain circumstances, the new Second Priority Notes and any untendered old
Second Priority Notes will have the benefit of the letter of credit. See
"--Security."
The new Second Priority Notes and any untendered old Second Priority Notes
will bear interest at a rate of 12% per annum from the date of initial issuance
of the old notes until the principal of the old notes is paid or made available
for payment. Interest on the new notes will be payable in cash semi-annually on
June 30 and December 31 of each year, commencing December 31, 1999 to the person
in whose name the relevant new Second Priority Exchange Note or the untendered
old Second Priority Note is registered at the close of business on the preceding
June 15 or December 15, as the case may be. On any interest payment date
following the delivery of the first vessel, if we cannot pay all accrued and
unpaid interest on both the new Second Priority Notes and any untendered old
Second Priority Notes by applying cash in the Revenue Account, then we may pay
the interest through the issuance to the holders of the new Second Priority
Notes and any untendered old Second Priority Notes of additional new Second
Priority Notes having an aggregate principal amount equal to the deficiency in
cash available to pay interest. We may not issue more than $20.9 million in
aggregate principal amount of additional Second Priority Notes.
REDEMPTIONS
Optional Redemption
Except as set forth below, we do not have the option to redeem the new
notes prior to June 30, 2002. On and after that date, we may redeem the new
First Priority Notes and the new Second Priority Notes, in whole or in part, at
any time or from time to time, upon not less than 30 days' nor more than 60
days' prior notice mailed by first-class mail to the registered address of each
noteholder, at the redemption prices set forth in the table below (expressed as
a percentage 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):
<TABLE>
If Redeemed During the 12-Month Period Commencing on Redemption Price
June 30 of the Years Set Forth Below: First Priority Notes Second Priority Notes
- ------------------------------------- -------------------- ---------------------
<S> <C> <C>
2002 105.75% 106.00%
2003 103.50 104.00
2004 101.75 102.00
2005 and thereafter 100.00 100.00
</TABLE>
At any time and from time to time prior to June 30, 2000, we may redeem in
the aggregate up to 35% of the original principal amount of each series of
notes, on a pro rata basis, with the proceeds of one or more public equity
offerings of Navigator Holdings (with the cash proceeds thereof to the extent
actually contributed to Navigator Gas Transport) following which there exists a
public market, at a redemption price (expressed as a percentage of principal
amount) of 110.5% (in the case of the new First Priority Notes) and 112% (in the
case of the new Second Priority Notes), plus in each case accrued interest to
the redemption date, subject to the
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right of holders of record on the relevant record date to receive interest due
on the relevant interest payment date. At least $100 million aggregate principal
amount of new First Priority Notes and any untendered old First Priority Notes
and $45 million aggregate principal amount of new Second Priority Notes and any
untendered old Second Priority Notes must remain outstanding after each
redemption.
Other than as set forth in the previous paragraph, the First Priority
Indenture will prohibit us from redeeming at our option any Second Priority
Notes while the First Priority Notes are outstanding.
Mandatory Redemption upon the Occurrence of Certain Events
If an Owner elects to terminate its building contract for its vessel
because of a material breach by the builders, including a failure to pay
liquidated damages for any delay in the delivery of the vessel, the new notes of
each series will be subject to mandatory redemption in part, on a pro rata
basis, in an aggregate principal amount equal to the principal amount of the
notes allocated to the vessel and for each other vessel that has not been
accepted by its Owner as of the date of the termination, at a redemption price
equal to 100% of the principal amount of the notes allocated to the vessels 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 (1) the
receipt of the refund amount for the related building contracts and (2) 60 days
after the termination of the building contracts by the affected Owners.
If a vessel is subject to total loss, the new notes of each series will be
subject to mandatory redemption in part, on a pro rata basis, in an aggregate
principal amount equal to the principal amount of the notes allocated to the
particular 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 (1) the
receipt of the insurance proceeds received for such total loss and (2) 60 days
after such total loss was deemed to have occurred.
It is possible that we may not have sufficient funds available to effect
these redemptions.
Selection and Notice
Unless otherwise expressly stated, if the new notes are to be redeemed in
part, the selection of the new notes to be redeemed will be made by the
applicable trustee on a pro rata basis, by lot or by such other method as the
trustee in its sole discretion shall deem to be fair and appropriate. In all
cases the new notes may be redeemed in multiples of $1,000 only, and subject
always to the provisions described above. Any notice of redemption will specify:
o the new notes subject to redemption;
o whether the new notes are to be redeemed in whole or in part, and the
aggregate principal amount of the new notes to be redeemed; and
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o the date of redemption.
Once a new note or portion thereof has been redeemed, interest will cease
to accrue on that note as of the redemption date.
Additional Amounts
All payments of, or in respect of, principal of and any premium and
interest on the new notes, and all payments pursuant to the guarantees, will be
made without withholding or deduction for, or on account of, any present or
future taxes, duties, assessments or governmental charges of whatever nature, or
interest on any taxes, duties, assessments or other governmental charges of
whatever nature ("Taxes"), imposed or levied by or on behalf of, or within, the
Isle of Man, or the jurisdiction of incorporation of any successor to us or any
of the Owners, or any political subdivision or taxing authority thereof or
therein, unless the Isle of Man or the jurisdiction of incorporation of any
successor to us or any of the Owners or any such authority requires the Taxes to
be withheld or deducted. No Isle of Man law restricts the import or export of
capital into the island, and no Isle of Man law restricts the right of Isle of
Man non-resident Owners to hold the notes.
In the event that any such authority requires the taxes to be withheld or
deducted, we, the Owners or any successor will pay such additional amounts of,
or in respect of, principal and any premium and interest on, or payments
pursuant to the guarantees ("Additional Amounts") as may be necessary so that
the net amount received by each holder of a note, including Additional Amounts,
after such withholding or deduction will not be less than the amounts that the
holder would have received if such Taxes had not been withheld or deducted.
However, no Additional Amounts will be payable for or on account of any of the
following events or combination of events:
o Taxes that would not have been imposed but for:
o any estate, inheritance, gift, sale, transfer, personal property or
similar tax, assessment or other governmental charge;
o any tax, assessment or other governmental charge that is imposed or
withheld by reason of the failure of the holder or beneficial owner of
a new note to comply with our request or a request of any of the
Owners addressed to the holder (1) to provide reasonable information
concerning the nationality, residence or identity of the holder or
such beneficial owner or (2) to make any reasonable declaration or
other similar claim or satisfy any reasonable information or reporting
requirement, which, in the case of (1) or (2), is required or imposed
by a statute, treaty, regulation or administrative practice of the
taxing jurisdiction as a precondition to exemption from all or part of
the tax, assessment or governmental charge; or
o the existence of any present or former connection between the holder,
or between a fiduciary, settlor, beneficiary, member or shareholder
of, or
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possessor of a power over, such holder, if such holder is an estate,
trust, partnership or corporation, and the Isle of Man or any
Successor Jurisdiction including any territory or political
subdivision of the foregoing, including such holder, or such
fiduciary, settlor, beneficiary, member, shareholder or possessor,
being or having been a national, domiciliary or resident of or treated
as a resident thereof or being or having been present or engaged in a
trade or business therein or having or having had a permanent
establishment therein;
o the presentation of such new note for payment in the Isle of Man or
any Successor Jurisdiction or any of their respective territories or
political subdivisions, unless such new note could not have been
presented for payment elsewhere; or
o the presentation of such new note more than 30 days after the date on
which the payment in respect of such new note became due and payable
or provided for, whichever is later, except to the extent that the
holder would have been entitled to such Additional Amounts if it had
presented such new note for payment on any day within such period of
30 days.
No Additional Amounts will be paid with respect to any payment of the
principal of or any premium or interest on any such new note or payment pursuant
to the guarantees to any holder, including a fiduciary or partnership, to the
extent that the beneficial owner would not have been entitled to the Additional
Amounts had it been the holder of the new note. We or the relevant Owners will
also (1) make such withholding or deduction and (2) remit the full amount
deducted or withheld to the relevant authority in accordance with applicable
law. We or the relevant Owners will furnish to holders of new notes that are
outstanding on the date of the withholding or deduction for or on account of
Taxes, within 30 days after the date of the payment of any Taxes due pursuant to
applicable law, certified copies of tax receipts evidencing the payment by us or
the relevant Owners.
Whenever there is mentioned, in any context, the payment of the principal
of or any premium or interest on, or in respect of, any new note, any payment
pursuant to the guarantees or the net proceeds received from us or the Owners on
the sale or exchange of any new note, the mention shall be deemed to include
mention of the payment of Additional Amounts provided for in the indentures to
the extent that, in the context, Additional Amounts are, were or would be
payable pursuant to the indentures.
We or the relevant Owners will pay any present or future stamp, court or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise in any jurisdiction from the execution, delivery, enforcement
or registration of the new notes or the guarantees or any other document or
instrument in relation thereto, or the receipt of any payments with respect to
the new notes or guarantees, excluding such taxes, charges or similar levies
imposed by any jurisdiction outside of the Isle of Man, any successor
jurisdiction or any jurisdiction in which a paying agent is located, except
those resulting from or required to be paid in connection with, the enforcement
of the new notes or the guarantees or any other document or
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instrument following the occurrence of any event of default with respect to the
new notes, and has agreed to indemnify the holders for any taxes paid by the
holders.
Tax Redemption
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 laws,
regulations or published tax rulings either generally or in relation to any
particular new notes, which change or amendment becomes effective on or after
the date of issuance of the old notes or which change in official
administration, application or interpretation was not available to the public
prior to the date of issuance of the old notes and we or the relevant Owners
receives notice of the change and it is determined by us or the relevant Owners
that we or the relevant Owners would be required to pay, or that we or the
relevant Owners would be substantially likely to be required to pay, any
Additional Amounts pursuant to the indentures or the terms of any new note in
respect of interest on the next interest payment date, and that the obligation
cannot be avoided by us or the relevant Owners taking reasonable measures
available to us, then we may, at our option, redeem all, but not less than all,
of the new notes in respect of which such additional amounts would be so payable
at any time. We must give not less than 30 nor more than 60 days' written notice
and pay a redemption price equal to 100% of the principal amount of the notes
plus accrued interest to the date fixed for 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. No such notice of redemption may be given
earlier than 60 days prior to the earliest date on which we or the relevant
Owners would be obligated, or substantially likely to be obligated, to pay such
Additional Amounts were a payment in respect of the new notes or the guarantees
then due, and at the time any such redemption notice is given, the obligation,
or substantial likelihood, to pay such Additional Amounts must remain in effect.
It is possible that we will not have sufficient funds to effect this redemption.
GUARANTEES
Payment of the principal of, and any premium and interest on, the new
notes, payment to the letter of credit issuer of our obligations under the
Letter of Credit Reimbursement Agreement, and our obligations for payment of all
sums of money payable under the Security Agreements and performance of all other
obligations contained in the indentures and the Security Agreements is fully and
unconditionally guaranteed jointly and severally, on a secured basis by each of
the Owners. Each of these guarantees is irrevocable and unconditional but
limited to an amount not to exceed the maximum amount that can be guaranteed by
the applicable Owner without rendering such guarantee voidable under applicable
laws relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally. If a guarantee were to be rendered
voidable, it could be subordinated by a court to all other indebtedness,
including guarantees and other contingent liabilities of the applicable Owner,
and, depending on the amount of such indebtedness, an owner's liability on its
guarantee could be reduced to zero. See "Risk Factors--Ranking of the New Notes
and Guarantees" and "--We are subject to fraudulent conveyance statutes that may
result in a declaration of insolvency which could interfere with our ability to
meet our payment obligations."
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SECURITY
Pursuant to the Intercreditor Agreement, the collateral agent is holding
and will hold the collateral in trust for the benefit of the holders of the new
notes and any untendered old notes, as well as for the benefit of the letter of
credit issuer and the trustees. In addition, pursuant to the Intercreditor
Agreement, the collateral agent has or will establish the trust accounts for the
deposit and application of funds, as described below under "Trust Accounts" and
"Priorities of Payment."
On the date of initial issuance of the old notes, to secure our obligations
under the indentures, the Security Agreements, the Letter of Credit
Reimbursement Agreement and the notes, (1) Navigator Holdings pledged to the
collateral agent, for the benefit of the holders of the notes, the letter of
credit issuer and the trustees, all our issued capital (the "Holdings Pledge"),
(2) we pledged to the collateral agent, for the benefit of the holders of the
notes, the letter of credit issuer and the trustees, all the issued capital of
the Owners and the Intercompany Note, and (3) we granted a security interest in
all of our right, title and interest in the trust accounts and all cash,
securities, instruments or other property credited thereto or deposited therein.
On the date of initial issuance of the old notes, to secure its obligations
under its guarantee and under the Security Agreements, each Owner granted to the
collateral agent, for the benefit of the holders of the notes, the letter of
credit issuer and the trustees, a security interest in all its right, title and
interest in the following assets and documents:
o the building contract for its vessel;
o the Technical Supervision Agreement;
o the building contract guarantee for its vessel and the performance
bonds;
o the Technical Management Agreement;
o the Commercial Management Agreement;
o the trust accounts and all cash, securities, instruments or other
property credited thereto or deposited therein;
o all monies and securities, including temporary cash investments, paid
to or deposited with, or required to be paid to or deposited with, the
collateral agent by or for our account or such Owner, or otherwise
pursuant to the terms of any Security Agreement;
o the Management Agreement;
o all rights of the Owner to receive payments of any kind, to execute
any election or option or to give or receive any notice, consent,
waiver or approval under or in respect of any of the foregoing
documents or instruments;
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o any and all assets of the Owner whether now owned or hereafter
acquired; and
o all income, payments, proceeds, rights and claims, resulting from or
arising out of the foregoing.
On the delivery date of each vessel, the related Owner will grant to the
collateral agent, for the benefit of the holders of the notes, the letter of
credit issuer and the trustees, a security interest in all of the particular
Owner's right, title and interest in the following assets and documents acquired
by the Owner after the date of issuance of the old notes:
o its vessel in accordance with the terms and conditions of the related
mortgage;
o all earnings and insurance policies in respect of the particular
vessel;
o all the charterhire, tolls, rents, issues, profits, products, revenues
and other income, including insurance and warranty proceeds, from the
property subject to, or required to be subject to, the lien under the
mortgage, and all the estate, right, title and interest of the Owner
in and to the same and every part of the property;
o all requisition proceeds and insurance proceeds with respect to its
vessel or any part thereof, to the extent of the collateral agent's
interest therein as mortgagee of the vessel pursuant to the related
mortgage; and
o all income, payments, proceeds, rights and claims, resulting from or
arising out of the foregoing.
The holders of the notes, the letter of credit issuer and the trustees, for
fees owed, will have an equal and ratable interest in the collateral, subject to
the priority of payment described below under "--Application of Proceeds
Following an Event of Default." If insurance proceeds are payable for a total
loss of any vessel, the trustees will instruct the collateral agent to release
the lien on the vessel and the related collateral and the related Owner from all
of its obligations under its guarantee upon receipt by the collateral agent of
the total loss payment for the vessel. In connection with the termination by an
Owner of the related building contract because of a material breach by the
builder and the termination of the building contracts for each other vessel that
has not been accepted by its Owner as of the date of termination, the trustees
will instruct the collateral agent to release the liens on the building
contracts and the related collateral and to release the related Owners from
their obligations under their guarantees upon receipt by the collateral agent of
the rescission amounts for the vessels.
INTEREST DRAWS ON THE LETTER OF CREDIT
On the date of initial issuance of the old notes, the letter of credit was
issued by the letter of credit issuer in favor of the collateral agent for the
benefit of the holders of the notes and the trustees. Interest draws under the
letter of credit are not available until after the delivery
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date of the first vessel. Three business days prior to each interest payment
date thereafter, the collateral agent will determine if there are sufficient
funds in the Revenue Account to pay the interest due on the notes or if a note
interest shortfall exists. If a note interest shortfall exists, the collateral
agent will make an interest on the letter of credit in an amount equal to the
lesser of (1) the note interest shortfall, less any portion of the note interest
shortfall attributable to interest payable pursuant to a Registration Default,
and (2) the maximum amount available under the letter of credit. No later than
the business day prior to an interest payment date, the letter of credit issuer
will remit the draw amount to the collateral agent and the collateral agent will
deposit the amount into the Letter of Credit Account.
Under the terms of the Letter of Credit Reimbursement Agreement and the
Intercreditor Agreement, the collateral agent is not permitted to make an
interest draw to pay interest on the new Second Priority Notes until and unless
we shall have, prior to or on the date of the interest draw, issued additional
new Second Priority Notes in an aggregate principal amount of $20.9 million to
cover previous or concurrent shortfalls in cash available in the Revenue Account
to pay interest on the new Second Priority Notes. On the first business day of
each calendar month:
o subject to the prior payment of any required:
(a) Monthly Operating Deposit and
(b) Manager's Fee, if the date is also a Management Fee Payment Date,
available cash in the Revenue Account will be paid to satisfy
unpaid fees under the letter of credit and all accrued and unpaid
interest on all outstanding draws under the letter of credit and
to the repayment, to the extent of remaining funds, of all
working capital draws outstanding on that date and then all
interest draws outstanding; and
o if the date is also an interest payment date, after the delivery date
of the first vessel, the repayment of all draws under the letter of
credit outstanding on that date will be subject to the prior payment
of any required fees and expenses due to the trustees and the
collateral agent under the indentures and the Intercreditor Agreement.
See "--Priorities of Payment--Revenue Account."
RANKING
The old notes are and the new notes will be secured obligations of
Navigator Gas Transport. The First Priority Notes rank ahead of the Second
Priority Notes. The Second Priority Notes rank equally with any additional
Second Priority Notes that may be issued. The new First Priority Notes rank
equally with any untendered old First Priority Notes. The new Second Priority
Notes rank equally with any untendered old Second Priority Notes. The holders of
the new notes will have a claim against the collateral securing the new notes
which is subordinate in right of payment to any claim held by the letter of
credit issuer for any unreimbursed draws under the letter of credit. The maximum
amount of draws under the letter
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of credit depends on the date of the draw and date of delivery of the vessels
but in no case will it exceed $50.0 million. The priority of payment of the
principal of, any premium, and interest on the new notes is as described under
"Description of the New Notes--Priorities of Payment--Revenue Account,"
- --"Priorities of Payment--Termination Account" and "--Application of Proceeds
Following an Event of Default." Neither we nor the Owners are permitted by the
indentures to incur any additional indebtedness, with certain limited
exceptions. See "Description of the New Notes--Certain Covenants."
MANDATORY OFFERS TO PURCHASE NEW NOTES
Offer to Purchase with Available Cash. Commencing on June 30, 2001 and
semi-annually thereafter so long as the new First Priority Notes and any
untendered old First Priority Notes remain outstanding (each, an "Available Cash
Payment Date"), we will, to the extent of available cash, make an offer to each
holder of the new First Priority Notes and any untendered old First Priority
Notes, to purchase the holder's First Priority Notes and any untendered old
First Priority Notes, or at the holder's option, any part thereof, at a price
equal to 102% of the principal amount of the notes plus accrued and unpaid
interest to the date of purchase. We will not make an available cash offer if
our available cash is less than $1.0 million.
Commencing on the first Available Cash Payment Date on or after the date
the new First Priority Notes and any untendered old First Priority Notes are
repaid in full and on each Available Cash Payment Date thereafter, we will, to
the extent of available cash, make an offer to each holder of the new Second
Priority Notes and any untendered old Second Priority Notes, to repurchase the
holder's new Second Priority Notes and any untendered old Second Priority Notes,
or at the holder's option, any part thereof, at a price equal to 102% of the
principal amount of the notes plus accrued and unpaid interest to the date of
purchase. We will not make an available cash offer if our available cash is less
than $1.0 million.
Pursuant to the terms of the Intercreditor Agreement, we will have the
ability from time to time to withdraw available cash from the Revenue Account to
make purchases of new notes in open market transactions. If we purchase new
notes in open market transactions, the amount of available cash in the Revenue
Account on subsequent Available Cash Payment Dates will be reduced.
Offer to Purchase upon Change of Control. If a change of control occurs, we
will make an offer to each holder of the new First Priority Notes and to each
holder of the new Second Priority Notes, to purchase the holder's notes (subject
to the limitation described below under "--Source of Funds to Purchase Notes"),
at a price equal to 101% of the outstanding principal amount of the notes, plus
accrued and unpaid interest to the date of purchase (the "Change of Control
Payment"). We will not make a change of control offer following a change of
control if a third party makes an offer which, if it had been made by us, would
constitute a change of control offer. We will purchase any and all new First
Priority Notes validly tendered pursuant to a change of control offer prior to
purchasing any new Second Priority Notes validly tendered pursuant to the change
of control offer.
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A change of control means the occurrence of any of the following events:
(1) prior to the first public offering of common stock of Navigator
Holdings, the permitted holders, Cambridge Gas, Xenon and GEBAB and their
related affiliates, cease to be the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of a
majority in the aggregate of the total voting power of the voting stock of
Navigator Gas Transport, whether as a result of issuance of securities of
Navigator Holdings or Navigator Gas Transport, any merger, consolidation,
liquidation or dissolution of Navigator Holdings or Navigator Gas
Transport, any direct or indirect transfer of securities by Navigator
Holdings or otherwise. For purposes of this clause (1) and clause (2)
below, the permitted holders shall be deemed to beneficially own any voting
stock of a corporation (the "specified corporation") held by any other
corporation (the "parent corporation") so long as the permitted holders
beneficially own (as so defined), directly or indirectly, in the aggregate
a majority of the voting power of the voting stock of the parent
corporation;
(2) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than one or more permitted holders, is or becomes
the beneficial owner (as defined in clause (1) above, except that for
purposes of this clause (2) such person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of more than 35% of the total voting power
of the voting stock of Navigator Gas Transport. The permitted holders must
beneficially own (as defined in clause (1) above), directly or indirectly,
in the aggregate a lesser percentage of the total voting power of the
voting stock of Navigator Gas Transport than such other person and do not
have the right or ability by voting power, contract or otherwise to elect
or designate for election a majority of the board of directors (for the
purposes of this clause (2), such other person shall be deemed to
beneficially own any voting stock of a specified corporation held by a
parent corporation, if such other person is the beneficial owner (as
defined in this clause (2)), directly or indirectly, of more than 35% of
the voting power of the voting stock of such parent corporation and the
permitted holders beneficially own (as defined in clause (1) above),
directly or indirectly, in the aggregate a lesser percentage of the voting
power of the voting stock of such parent corporation and do not have the
right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the board of directors of such parent
corporation);
(3) during any period of two consecutive years, individuals who at the
beginning of such period constituted the board of directors of Navigator
Holdings or Navigator Gas Transport, together with any new directors whose
election by such board of directors or whose nomination for election by the
stockholders of Navigator Holdings or Navigator Gas Transport,
respectively, was approved by a vote of 662/3% of the directors of
Navigator Holdings or Navigator Gas Transport, as the case may be, then
still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority of the board
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of directors of Navigator Holdings or Navigator Gas Transport,
respectively, then in office;
(4) either Cambridge Gas or GEBAB ceases to be a shareholder of
Navigator Holdings; or
(5) prior to the expiration of the warranty period of the last vessel,
Tractebel Gas Engineering, including its affiliates, disposes of any of its
shares in Navigator Holdings other than to an affiliate of Tractebel Gas
Engineering.
Procedure for Purchase of Notes. On the business day after the Available
Cash Determination Date with respect to an available cash offer and within 30
days after the occurrence of a change of control, we will provide, by mail
(first class, prepaid) written notice to the trustees and each holder of notes
stating that:
o we expect to have available cash on the next Available Cash Payment
Date or a change of control has occurred;
o an available cash offer is being made and new notes of the applicable
series having an aggregate principal amount equal to the amount of
available cash divided by 1.02, the maximum principal amount will be
accepted for payment (provided that no new Second Priority Note or any
untendered old Secured Priority Note will be accepted for payment
unless and until all new First Priority Notes and any untendered old
First Priority Notes have been repaid in full) or a change of control
offer is being made and all new notes validly tendered will be
accepted for payment;
o the purchase price and date of purchase (which shall be the Available
Cash Payment Date, in the case of an available cash offer, or which
shall be a business day not less than 30 days nor more than 60 days
from the date on which such change of control notice is mailed in the
case of a change of control offer);
o any new note not tendered will continue to accrue interest pursuant to
its terms;
o any new note accepted for payment pursuant to the available cash offer
or the change of control offer will cease to accrue interest on and
after the purchase payment date (in the case of a change of control
offer, the "Change of Control Payment Date" and, together with the
Available Cash Payment Date, the "Purchase Payment Date"), unless we
default on such payment;
o holders of new notes electing to have any new note or portion of a
note purchased pursuant to an available cash offer or change of
control offer must, prior to the close of business on the business day
immediately
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preceding the applicable Purchase Payment Date, surrender their new
note to the applicable trustee at the address specified in the notice,
together with a completed form entitled "Option of the Holder to Elect
Purchase" on the reverse side of their note;
o holders of new notes will be entitled to withdraw their election if
the applicable trustee receives, not later than the close of business
on the third business day immediately preceding the applicable
Purchase Payment Date, a telegraph, facsimile transmission or letter
setting forth the name of the holder, the principal amount of new
notes previously delivered for purchase, and a statement that the
holder is withdrawing his election to have his new notes purchased;
and
o holders whose new notes are being purchased in part will receive new
notes of the same series and in principal amount equal to the
unpurchased portion of the new notes surrendered. Each new note
purchased and each new note issued shall be in a principal amount of
$1,000 or integral multiples thereof.
On the applicable Purchase Payment Date, we will:
o in the case of an available cash offer, purchase all notes or portions
of a note tendered, provided that no Second Priority Note will be
accepted for payment unless and until all First Priority Notes have
been repaid in full, or in the case of a change of control offer,
purchase all notes or portions of a note tendered, provided that no
Second Priority Notes will be accepted for payment unless and until
all tendered First Priority Notes have been repaid in full;
o deposit with the applicable trustee funds sufficient to pay the
purchase price of all new notes of the applicable series or portions
of notes so accepted; and
o cause to be delivered to the trustee, all new notes or portions of
notes accepted for purchase together with an officers' certificate
specifying the new notes or portions thereof accepted for payment.
The trustee will promptly mail, to the holders of new notes so accepted, payment
in an amount equal to the purchase price. We will issue and the trustee will
promptly authenticate and mail to holders a new note of such series equal in
principal amount to any unpurchased portion of the new notes of such series
surrendered. Each new note purchased and each new note issued will be in a
principal amount of $1,000 or integral multiples of $1,000. For an available
cash offer, if the aggregate amount of notes of a series tendered exceeds the
maximum principal amount, then the applicable trustee will select notes of the
series to be purchased ratably from each holder that tendered notes so that the
ratio of the principal amount of the notes to be purchased from each holder that
tendered notes to the aggregate principal amount of notes tendered by the holder
will, as nearly as practicable and subject to rounding, equal the ratio of the
maximum principal
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amount to the aggregate principal amount of the notes of such series tendered
for the available cash offer. We will notify the holders of the notes of the
results of an available cash offer or change of control offer on or as soon as
practicable after the applicable Purchase Payment Date.
We will comply with Rule 14e-1 under the Exchange Act and any other
applicable securities laws and regulations, if such laws and regulations are
applicable to an available cash offer or a change of control offer. If the
provisions of any securities laws or regulations conflict with the provisions of
our agreement to purchase described above, we will comply with the applicable
securities laws and regulations and will not be deemed to have breached our
obligations described above.
Source of Funds to Purchase Notes. In the event of an available cash offer,
the payment for the tendered new notes will be taken from amounts held as
available cash in the Revenue Account.
In the event of a change of control offer, the Change of Control Payment
will be taken from the Revenue Account to the extent of available funds. As
discussed under "Risk Factors--In the event of a change of control, we may have
insufficient funds to meet our purchase obligations," there can be no assurance
that, on the Change of Control Payment Date, amounts in the Revenue Account will
be sufficient to pay for all the new notes tendered pursuant to the change of
control offer.
REGISTRATION RIGHTS
In connection with the issuance of the old notes, we entered into a
registration rights agreement with the Initial Purchasers in which we agreed,
for the benefit of the holders of the old notes, at our expense, to use our
reasonable best efforts to cause the registration statement of which this
prospectus forms a part to be declared effective under the Securities Act.
Promptly after the registration statement of which this prospectus forms a
part is declared effective, we have agreed to commence the exchange offer and to
keep the exchange offer open not less than 30 days, or longer if required by
applicable law.
In the event that any changes in law or applicable interpretations of the
staff of the SEC do not permit us to effect the exchange offer, or if any
Initial Purchaser so requests with respect to the notes that are not eligible to
be exchanged in the exchange offer or private exchange securities held by it
after consummation of the exchange offer, or any holder of notes (other than a
broker-dealer engaging in market-making or trading activities) that participates
in the exchange offer or participates in the exchange offer but does not receive
freely tradeable notes on the date of the exchange, we have agreed, at our
expense, to:
o as promptly as practicable, and in any event on or prior to 30 days
after such filing obligation arises, file or cause to be filed with
the SEC a shelf registration statement covering resales of the old
notes;
o use reasonable best efforts to cause the shelf registration statement
to be declared effective under the Securities Act; and
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o use reasonable best efforts to keep effective the shelf registration
statement for up to two years after its effective date, or such
shorter period that will terminate when all the old notes covered
thereby have been sold.
We have agreed to use reasonable best efforts in the event of the filing of a
shelf registration statement, to provide to each holder of the old notes covered
by the shelf registration statement copies of the prospectus that is a part of
the shelf registration statement, notify each such holder when the shelf
registration statement for the old notes has become effective and take certain
other actions as are required to permit unrestricted resales of the old notes. A
holder of old notes that sells such old notes pursuant to the shelf registration
statement generally:
o will be required to be named as a selling securityholder in the
related prospectus and to deliver a prospectus to the purchaser;
o will be subject to certain of the civil liability provisions under the
Securities Act in connection with such sales; and
o will be bound by the provisions of the registration rights agreement
that are applicable to such holder, including certain indemnification
obligations.
In addition, each holder of the old notes will be required to deliver certain
information to be used in connection with the shelf registration statement in
order to have its old notes included in the shelf registration statement.
Since the exchange offer was not consummated by February 3, 1998,
additional interest is accruing and will accrue on the old notes from that date
to the date the exchange offer is consummated, at a rate of 0.50% of the
principal amount of the notes per annum. The additional interest is payable
semiannually in arrears on each interest payment date. Interest on the First
Priority Notes is accruing and will accrue at a rate of 11% and interest on the
Second Priority Notes is accruing and will accrue at a rate of 12 1/2% per annum
to reflect the 0.50% of additional interest until the earlier of consummation of
the exchange offer or the time when the new notes may be freely resold pursuant
to Rule 144(k). Under Rule 144(k) a nonaffiliate note holder who holds his notes
for at least two years may sell the securities without restriction. Additional
charter hire payments are or will be payable under the Charters in an aggregate
amount, in each case, equal to the additional interest.
Upon consummation of the exchange offer, we generally will have satisfied
our obligations under the registration rights agreement to register the old
notes and we generally will have no further obligation to register the old
notes.
A copy of the registration rights agreement has been filed as an exhibit to
the registration statement of which this prospectus forms a part.
TRUST ACCOUNTS
Pursuant to the Intercreditor Agreement, the collateral agent has
established and is maintaining the following trust accounts: Pre-Funding
Account, Capitalized Interest Account,
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Revenue Account, Letter of Credit Account, Operating Account, Casualty Account,
Termination Account and Collateral Account. Each of the accounts was established
in the name of the collateral agent for the benefit of the holders of the notes,
the letter of credit issuer and the trustees. The Manager has and will have the
right to withdraw amounts held in the Operating Account. See "--Operating
Account."
Pre-Funding Account. We deposited into an account designated as the
"Pre-Funding Account" the following amounts on the date of issuance of the old
notes:
o the purchase price of each vessel;
o funds to pay all fees for the Owners' vessels due and payable prior to
their delivery, including the Manager's fees and fees payable to the
letter of credit issuer; and
o funds to pay the cost of the vessels' supplies. Earnings on temporary
cash investments on funds on deposit in the Pre-Funding Account will
also be deposited into the Pre-Funding Account.
In connection with the foregoing deposits, we delivered on the date of issuance
of the old notes to the trustees and the collateral agent a verification report
of a nationally recognized firm of independent accountants indicating that funds
deposited in the Pre-Funding Account will provide cash at such times and in such
amounts as will be sufficient to pay, when due, each installment payment for the
purchase price of each vessel. Notwithstanding the delivery of this report, we
cannot assure you that the funds deposited in the Pre-Funding Account will
provide cash at such times and in such amounts as will be sufficient to pay,
when due, each installment payment for the purchase price of each vessel.
The collateral agent has made or will make payments from the Pre-Funding
Account as follows:
o on the date required for payment of a purchase price installment on an
Owner's vessel, the purchase price installment then due for the vessel
to be remitted to the builders if each of the trustees and the
collateral agent has received written notice of the installment date
at least three business days prior to the date, and if no material
default exists under the related building contract;
o if the collateral agent and the trustees have received a written
request for payment at least three business days prior to the date to
be paid, an amount equal to any fee allocable to a vessel then due and
payable prior to the delivery date of the particular vessel pursuant
to the terms of the Management Agreement or the Letter of Credit
Reimbursement Agreement, such payment to be remitted to the Manager or
the letter of credit issuer. Amounts withdrawn from the Pre-Funding
Account to make payments as described in this bullet point will not,
in the aggregate, exceed the sum of all amounts deposited into the
Pre-Funding Account;
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o on the delivery date for each vessel, provided that the conditions
precedent set forth in the indentures and the Intercreditor Agreement
have been satisfied, an amount equal to the final installment of the
purchase price for the particular vessel, to be paid to the builders,
plus fees and expenses incurred in connection with the recordation and
filing of the related Security Agreements in the registration
jurisdiction related to the vessel, to be remitted to the Manager;
o on each interest payment date occurring after the contractual delivery
date of a vessel and before the actual delivery date of the particular
vessel, an amount equal to the interest accrued on the principal
amount of the notes for the vessel to be deposited in the Revenue
Account;
o if an Owner elects to terminate the building contract for its vessel
due to a material breach of the building contract by the builders, an
amount equal to the remaining funds in the Pre-Funding Account to be
deposited into the Termination Account to be used to redeem the
portion of the new First Priority Notes and any untendered old First
Priority Notes or the new Second Priority Notes and any untendered old
Second Priority Notes as described above under
"--Redemptions--Mandatory Redemption upon the Occurrence of Certain
Events";
o on the delivery date of the last vessel, the amounts remaining in the
Pre-Funding Account after the payment of the final installment of the
purchase price to the builders and the payment of the fees and
expenses incurred in connection with the recordation and filing of the
related Security Agreements in the registration jurisdiction for the
vessel to the Manager, to be deposited into the Revenue Account; and
o any and all investment earnings from temporary cash investments held
in the Pre-Funding Account, for deposit in the Capitalized Interest
Account.
Capitalized Interest Account. On the date of issuance of the old notes, the
collateral agent, pursuant to the Intercreditor Agreement, deposited into an
account designated as the Capitalized Interest Account funds which, together
with the investment earnings estimated to be earned thereon from temporary cash
investments as well as any investment earnings from temporary cash investments
deposited therein from the Pre-Funding Account, will be sufficient to pay
interest, excluding additional interest payable on the new notes pursuant to a
Registration Default, on the principal amount of the notes allocated to each
vessel during the period prior to the contractual delivery date of the related
vessel. In connection with the foregoing deposit, we delivered on the date of
issuance of the old notes to the trustees and the collateral agent a
verification report of a nationally recognized firm of independent accountants
indicating that the payments scheduled to be received, without reinvestment, on
the temporary cash investments made with funds deposited in the Capitalized
Interest Account, together with amounts deposited in the Capitalized Interest
Account from the Pre-Funding Account as set forth above and together with any
cash, without reinvestment, deposited pursuant to this paragraph, that was not
invested on the date of issuance of the old notes, will provide cash at such
times and in such amounts as
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will be sufficient to pay, when due, interest on the principal amount of the
notes allocated to each vessel during the period prior to the contractual
delivery date of the particular vessel, excluding additional interest payable on
the new notes pursuant to a Registration Default. Notwithstanding the delivery
of this report, we cannot assure you that the funds deposited in the Capitalized
Interest Account will provide cash at the times and in the amounts as will be
sufficient to pay, when due, interest on the principal amount of the notes
allocated to each vessel during the period prior to the contractual delivery
date of the particular vessel.
On each interest payment date prior to the contractual delivery date of a
vessel, the collateral agent will withdraw from the Capitalized Interest Account
funds equal to the interest accrued on the principal amount of the notes
allocated to a vessel and will deposit such amount into the Revenue Account. If
an Owner elects to terminate the building contract for its vessel due to a
material breach of the building contract by the builders, then the remaining
funds in the Capitalized Interest Account will be withdrawn from the Capitalized
Interest Account and deposited into the Termination Account to be used to redeem
the portion of the new First Priority Notes and any untendered old First
Priority Notes, or the Second Priority Notes and untendered old Second Priority
Notes as described above under "--Redemptions--Mandatory Redemption upon the
Occurrence of Certain Events."
Revenue Account. The following amounts will be deposited into an account
designated as the "Revenue Account":
o on a daily basis, any and all revenue, including charterhire, received
by the Owners or the Manager in connection with the employment of the
vessels;
o on the first business day of each month following the delivery date of
the first vessel, income earned during the preceding calendar month on
temporary cash investments from amounts on deposit in the Revenue
Account;
o interest draws;
o working capital draws in an amount equal to additional interest being
paid on the principal amount of the notes allocated to each vessel if
a Registration Default has occurred to the extent the balance
remaining in the Capitalized Interest Account on an interest payment
date is insufficient to pay such additional interest; and
o on the delivery date of the last vessel, any amounts remaining in the
Pre-Funding Account after the payment of the final installment of the
purchase price to the builders and the remittance of the fees and
expenses incurred in connection with the recordation and filing of the
related Security Agreements in the registration jurisdiction related
to such vessel to the Manager.
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Deposits will also be made into the Revenue Account from time to time:
o from certain withdrawals of funds from the Pre-Funding Account, the
Capitalized Interest Account and the Casualty Account, as described in
this prospectus; and
o from amounts held in the Termination Account to the extent insurance
proceeds exceed the related Total Loss Payment. The collateral agent
will disburse funds on deposit in the Revenue Account from time to
time as described below under "--Priorities of Payment--Revenue
Account."
Letter of Credit Account. No later than the business day prior to each
interest payment date for which the collateral agent has made an Interest Draw
under the letter of credit, the collateral agent will, pursuant to the
Intercreditor Agreement, deposit the draw amount into an account designated as
the Letter of Credit Account. On each interest payment date after the delivery
date of the first vessel as described under " --Priorities of Payment--Letter of
Credit Account," the collateral agent will be required to withdraw from the
Letter of Credit Account such draw amount and will deposit such amount into the
Revenue Account.
Operating Account. On the first business day of each calendar month,
commencing after the delivery date of the first vessel, the collateral agent
will, from amounts withdrawn from the Revenue Account as described under
"--Priorities of Payment--Revenue Account," deposit into an account designated
as the "Operating Account" an amount (the "Monthly Operating Deposit") by which
the balance, as of any date of determination, is the product of $500,000 and the
number of vessels as to which the delivery date has occurred, then in effect
exceeds the balance of funds in the Operating Account as of the opening of
business on such first business day, as certified by the Manager to the trustees
and the collateral agent as of such first business day. On and after any
business day commencing 90 days prior to the delivery date of the first vessel,
as reasonably expected by us and evidenced by an officer's certificate, upon
receipt by the collateral agent of a written request from the Manager that a
working capital draw be made under the letter of credit to the extent the funds
in the Operating Account are insufficient to meet actual operating expenses,
including the Manager's Fees and the fees of GEBAB or its assignee under the
Technical Supervision Agreement and the Commercial Management Agreement, the
collateral agent will make a working capital draw in the amount requested by the
Manager and deposit the draw amount into the Operating Account. The amount of
the working capital draw will not exceed the maximum amount then available under
the letter of credit for working capital draws.
Casualty Account. The collateral agent will deposit into an account
designated as the Casualty Account: (1) any cash proceeds from the exercise of
remedies against a builder in respect of any vessel, other than amounts
representing the refund amount or the proceeds of the Performance Bonds or any
building contract guarantee; and (2) any insurance proceeds, other than with
respect to a Total Loss, payable to the collateral agent as assignee of the
Owners and the Manager, pursuant to the terms of the Insurance Policies, as
described herein under "The Mortgages--Insurance."
The collateral agent will apply amounts deposited into the Casualty Account
to pay for the repair or salvage of any of the vessels, if, in each case, the
following conditions have been met: (1) if no event of default has occurred or
is continuing, the Manager has certified to
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the trustees and the collateral agent that such repairs are necessary or
desirable for the use, operation and maintenance of such vessel; and (2) if an
event of default has occurred and is continuing, the collateral agent, in its
sole discretion, has determined to apply such amounts to pay for the repair or
salvage of such vessel. If repair of such vessel is deemed not to be desirable
by the Manager or the collateral agent, pursuant to either clause (1) or (2)
above, such amounts will be held in the Casualty Account if no event of default
has occurred or is continuing, and in the Collateral Account if an event of
default has occurred and is continuing.
The collateral agent may withdraw funds from the Casualty Account on any
interest payment date to cover any deficiency which may arise if funds available
in the Revenue Account are insufficient to pay amounts required to be paid from
the Revenue Account on such interest payment date as described under
"--Priorities of Payment--Revenue Account," but only to the extent that funds on
deposit in the Casualty Account are not designated for payment of the repair or
salvage of the related vessel giving rise to the deposit of such funds.
Termination Account. In the event of a total loss of a vessel or in the
event of a termination by an Owner of its building contract, the collateral
agent will deposit into an account designated as the Termination Account any
insurance proceeds or the Refund Amounts for the related vessel and any other
vessel that has not been accepted by the Owners as of the date of termination,
and any amounts collected in respect of the related building contract guarantees
and Performance Bonds. See "--Redemptions--Mandatory Redemption upon the
Occurrence of Certain Events". The refund amounts and any amounts collected
under the related building contract guarantees and the Performance Bonds,
together with the amounts withdrawn from the Pre-Funding Account and the
Capitalized Interest Account will be withdrawn from the Termination Account to
be paid first, to the letter of credit issuer in an aggregate amount equal to
the sum of:
o any accrued and unpaid fees owing under the Letter of Credit
Reimbursement Agreement;
o all Working Capital Draws made with respect to the vessels which
remain unreimbursed, together with accrued and unpaid interest
thereon; and
o the allocated portion of Interest Draws for the vessels which remain
unreimbursed, together with accrued and unpaid interest thereon and
second, to redeem the new First Priority Notes and any untendered Old
First Priority Notes or the new Second Priority Notes and any
untendered Old Second Priority Notes as required by the terms of the
indentures.
The insurance proceeds in the event of a total loss will be withdrawn from the
Termination Account and disbursed by the collateral agent, in the following
order of priority:
o first, to the letter of credit issuer, the trustees and the collateral
agent, an amount equal to any accrued and unpaid fees for the letter
of credit issuer, trustees and the collateral agent, and all
reasonable expenses and charges incurred by or on behalf of the letter
of credit issuer, the trustees and the collateral agent in connection
with the ascertainment or protection of their
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respective rights and the pursuit of their respective remedies under
the indentures, the Letter of Credit Reimbursement Agreement or any of
the Security Agreements, including the reasonable fees and expenses of
counsel;
o second, to the letter of credit issuer, an amount equal to all working
capital draws made with respect to the particular vessel which remain
unreimbursed, together with interest thereon payable under the Letter
of Credit Reimbursement Agreement;
o third, to the letter of credit issuer, an amount equal to the
allocated portion of Interest Draws for a vessel which remain
unreimbursed, together with interest thereon payable pursuant to the
Letter of Credit Reimbursement Agreement;
o fourth, to the First Priority Trustee for the benefit of the holders
of the new First Priority Notes and any untendered Old First Priority
Notes, an amount equal to any accrued and unpaid interest for the new
First Priority Notes and any untendered Old First Priority Notes then
outstanding;
o fifth, to the Second Priority Trustee for the benefit of the holders
of the new Second Priority Notes and any untendered old Second
Priority Notes, an amount equal to any accrued and unpaid interest for
the new Second Priority Notes and any untendered old Second Priority
Notes then outstanding;
o sixth, to the First Priority Trustee for the benefit of the holders of
the First Priority Notes and any untendered old First Priority Notes,
an amount equal to the outstanding principal amount of the new First
Priority Notes and any untendered old First Priority Notes;
o seventh, to the new Second Priority Trustee for the benefit of the
holders of the new Second Priority Notes and any untendered old Second
Priority Notes, an amount equal to the outstanding principal amount of
the new Second Priority Notes and any untendered old Second Priority
Notes; and
o eighth, to the Revenue Account, any remaining amounts.
Collateral Account. The collateral agent will deposit into an account
designated as the Collateral Account:
o the cash proceeds of any sale of, or other realization upon, all or
any part of the collateral upon exercise by the collateral agent of
any rights and remedies under the Intercreditor Agreement and the
indentures, as described below under "--Defaults";
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o any other amounts received by the collateral agent upon the occurrence
and continuation of an event of default, if such amounts are not
otherwise applied as indicated below under "--Priorities of
Payment--Revenue Account";
o any other amounts received by the collateral agent pursuant to any of
the Security Agreements for which the Intercreditor Agreement does not
specify a Trust Account into which such amount is to be deposited; and
o upon the occurrence and continuance of an event of default, at the
instruction of the trustees and the letter of credit issuer, funds
from any other Trust Account. Funds on deposit in the Collateral
Account will be distributed in accordance with "--Application of
Proceeds Following an Event of Default" below.
PRIORITIES OF PAYMENT
The collateral agent will disburse amounts from the Revenue Account, the
Letter of Credit Account and the Operating Account in the manner, and in the
order of priority, described below.
Revenue Account. On the first business day of each calendar month, the
collateral agent will withdraw funds from the Revenue Account and apply the
funds in the following order of priority:
(1) first, for deposit into the Operating Account, an amount equal to
the Monthly Operating Deposit, as certified by the Manager;
(2) second, to the letter of credit issuer, an amount, as certified to
the collateral agent by the letter of credit issuer, equal to all accrued
and unpaid interest on all outstanding draws under the letter of credit,
and, after the delivery date of the last vessel, the sum of all accrued and
unpaid fees payable under the letter of credit;
(3) third, to the letter of credit issuer, an amount as certified to
the collateral agent by the letter of credit issuer, equal to the aggregate
amount of working capital draws outstanding on such date; and
(4) fourth, to the letter of credit issuer, an amount, as certified to
the collateral agent by the letter of credit issuer, equal to the aggregate
amount of interest draws outstanding on such date.
The Manager is paid its fee on the first business day of a calendar quarter (the
"Management Fee Payment Date"). In the event that the first business day of any
calendar month is a Management Fee Payment Date, the application of funds
pursuant to subparagraphs (2), (3) and (4) above will be subordinate to the
payment of the Manager's Fee as set forth in the following paragraph. In the
event that the first business day of any calendar month is an interest payment
date, the
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application of funds pursuant to subparagraphs (3) and (4) above will also be
subordinate to the payments set forth in subparagraph (1) below.
On each Management Fee Payment Date after the delivery date of the first
vessel, the collateral agent will withdraw from the Revenue Account, to the
extent of available funds, an amount equal to the aggregate Manager's Fee then
payable pursuant to the Management Agreement, the Commercial Management
Agreement and the Technical Management Agreement, and will remit such amount to
the Manager.
Subject to the priorities set forth in the preceding two paragraphs, on
each interest payment date the collateral agent will withdraw funds from the
Revenue Account, to the extent of available funds, and apply the funds in the
following order of priority:
(1) prior to the delivery date of the last vessel, to the letter of
credit issuer, the sum of all accrued and unpaid fees payable under the
letter of credit;
(2) after the delivery date of the first vessel, to the trustees and
the collateral agent, on a pro rata basis in accordance with amounts owed,
an amount, as certified by the respective trustee or the collateral agent,
equal to the accrued and unpaid fees and expenses payable in respect of the
indentures and the Intercreditor Agreement;
(3) to the First Priority Trustee for the benefit of the holders of
new First Priority Notes and any untendered old First Priority Notes, an
amount, as certified to the collateral agent by the First Priority Trustee,
equal to all accrued and unpaid interest to such interest payment date on
the new First Priority Notes and any untendered old First Priority Notes;
and
(4) to the Second Priority Trustee for the benefit of the holders of
new Second Priority Notes and any untendered old Second Priority Notes, an
amount, as certified to the collateral agent by the Second Priority
Trustee, equal to the accrued and unpaid interest to such interest payment
date on the new Second Priority Notes and any untendered old Second
Priority Notes.
Any amounts that remain in the Revenue Account on an interest payment date
after application in accordance with the foregoing priorities will be treated as
available cash.
From time to time after the delivery date of the first vessel, in the event
of an extraordinary expense incurred in order to maintain and operate a vessel
in accordance with the related mortgage, which expense is immediately due and
payable, the collateral agent will be required to withdraw from amounts on
deposit in the Revenue Account, an amount sufficient to meet such extraordinary
expense and will deposit such amount into the Operating Account.
Letter of Credit Account. On each interest payment date after the delivery
date for the first vessel, any amounts on deposit in the Letter of Credit
Account will be withdrawn by the collateral agent and transferred into the
Revenue Account and applied on such interest payment date solely to pay amounts
described in clauses (2) and (3) of the third paragraph under
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"--Revenue Account." However, such amounts will not be applied to pay amounts
owed as described in such clause (3) unless we shall have, prior to or on such
interest payment date, issued additional new Second Priority Notes in an
aggregate principal amount of $20.9 million as described under "--Terms of the
New Notes--Second Priority Notes."
Operating Account. The Manager will have the right to withdraw amounts on
deposit in the Operating Account, from time to time, to pay the operating
expenses of: (1) vessels as to which the delivery date has occurred; and (2) to
the extent of working capital draws deposited therein, vessels the delivery date
of which is reasonably expected by us to occur within 90 days of the date of
such withdrawal date. On the fifteenth day of each January, April, July and
October, the Manager will provide to the trustees and the collateral agent a
reasonably detailed statement setting forth, on an aggregate and per vessel
basis, how the amounts withdrawn from the Operating Account were applied during
the previous calendar quarter.
APPLICATION OF PROCEEDS FOLLOWING AN EVENT OF DEFAULT
Upon the occurrence of (1) an event of default under either of the
indentures or (2) an event of default under the Letter of Credit Reimbursement
Agreement, the related trustee or the letter of credit issuer may, subject to
the terms and provisions of the Intercreditor Agreement, declare all amounts
owing under the applicable indenture or the Letter of Credit Reimbursement
Agreement to be immediately due and payable and, subject to the terms of the
Intercreditor Agreement, direct the collateral agent to take action to enforce
the remedies contained in the applicable indenture or the Letter of Credit
Reimbursement Agreement, as the case may be.
Under the Intercreditor Agreement, all amounts on deposit in the Trust
Accounts which may be distributed in the event of an event of default, will be
distributed on a distribution date selected by the collateral agent or at the
request of the letter of credit issuer or the holders (in the aggregate) of a
majority of then outstanding notes of both series, in the following order of
priority, to the extent of available funds:
o first, to the letter of credit issuer, the trustees and the collateral
agent, an amount equal to any accrued and unpaid trustee and
collateral agent fees and all reasonable expenses and charges incurred
by or on behalf of the letter of credit issuer, the trustees and the
collateral agent in connection with the ascertainment or protection of
their respective rights and the pursuit of their respective remedies
under the indentures, the Letter of Credit Reimbursement Agreement or
any of the Security Agreements, including the reasonable fees and
expenses of counsel;
o second, to the letter of credit issuer, an amount equal to any amounts
owing pursuant to the Letter of Credit Reimbursement Agreement with
respect to working capital draws;
o third, to the letter of credit issuer, an amount equal to any amounts
pursuant to the Letter of Credit Reimbursement Agreement with respect
to interest draws;
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o fourth, to the First Priority Trustee for the benefit of the holders
of the new First Priority Notes and any untendered old First Priority
Notes, an amount equal to any accrued and unpaid interest in respect
of the new First Priority Notes and any untendered old First Priority
Notes then outstanding;
o fifth, to the Second Priority Trustee for the benefit of the holders
of the new Second Priority Notes and any untendered old Second
Priority Notes, an amount equal to any accrued and unpaid interest in
respect of the new Second Priority Notes and any untendered old Second
Priority Notes, then outstanding;
o sixth, to the First Priority Trustee for the benefit of the holders of
the new First Priority Notes and any untendered old First Priority
Notes, an amount equal to the outstanding principal of the new First
Priority Notes and any untendered old First Priority Notes;
o seventh, to the Second Priority Trustee for the benefit of the holders
of the new Second Priority Notes and any untendered old Second
Priority Notes, an amount equal to the outstanding principal of the
new Second Priority Notes and any untendered old First Priority Notes;
and
o eighth, to us, our successors or assigns, or to whomsoever may be
lawfully entitled to receive the same, the excess, if any.
CERTAIN COVENANTS
We have covenanted to restrict our activities. The following describes some
of these covenants.
Limitation on Indebtedness. We will not incur, directly or indirectly, any
indebtedness, except that we may incur the following indebtedness:
o the old First Priority Notes, the new First Priority Notes, the old
Second Priority Notes and the new Second Priority Notes; and
o indebtedness incurred under the Letter of Credit Reimbursement
Agreement and under the Security Agreements.
Limitation on Indebtedness of Owners. The Owners will not incur, directly
or indirectly, any indebtedness except that an Owner may incur the following
indebtedness:
o guarantees of the old First Priority Notes, the new First Priority
Notes, the old Second Priority Notes and the new Second Priority
Notes, our obligations under the Letter of Credit Reimbursement
Agreement and any indebtedness incurred under the Security Agreements;
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o the Intercompany Note; and
o Attributable Debt in respect of a UK Lease. However, prior to such
incurrence, we must deliver to the trustees written confirmation from
the rating agencies rating the notes that the entry into the UK Lease
will not result in a downgrading, or possible downgrading, of the
notes.
Limitation on Restricted Payments. We will not, and will not permit any
Owner, directly or indirectly, to make a Restricted Payment. The prohibitions on
making Restricted Payments will not prohibit, with respect to the First Priority
Indenture, the redemption of new Second Priority Notes and any untendered old
Second Priority Notes, pursuant to the provisions described under
"--Redemptions--Mandatory Redemption upon the Occurrence of Certain Events," or
"Tax Redemption" or the purchase of new Second Priority Notes and any untendered
old Second Priority Notes, pursuant to the provisions described under
"--Mandatory Offers to Purchase Notes," in each case only to the extent that the
corresponding provisions in the First Priority Indenture have been complied with
prior to or on the date of such redemption or purchase. We and the Owners will
not, and we will not permit any Owner to, create or otherwise cause or permit to
exist or become effective any consensual encumbrance or restriction on the
ability of any Owner to:
o pay dividends or make any other distributions on its capital stock to
us or another Owner or pay any indebtedness owed to us;
o make any loans or advances to us; or
o transfer any of its property or assets to us, except any encumbrance
or restriction pursuant to an agreement in effect at or entered into
on the date of initial issuance of the old notes.
Limitation on Asset Sales. We will not, and will not permit any Owner to,
sell, assign, convey, transfer or otherwise dispose of its vessel or any other
portion of the collateral, except pursuant to the Security Agreements or a UK
Lease and except sales of Incidental Assets.
Limitation on Affiliate Transactions. Except for payments under the
building contracts which the builders pay to Tractebel Gas Engineering or which
the builders have directed be paid directly to Tractebel Gas Engineering, we
will not, and shall not permit any Owner to, enter into or permit to exist any
transaction or series of related transactions, including the purchase, sale,
lease or exchange of any property, employee compensation arrangements or the
rendering of any service, with any affiliate of ours unless the terms thereof:
o are no less favorable to us or the Owner than those that could be
obtained at the time of such transaction in arm's-length dealings with
a person who is not an affiliate; and
o if the affiliate transaction involves an amount in excess of $1.0
million, the terms are set forth in writing and have been approved by
a majority of the
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members of the board of directors having no personal stake in such
affiliate transaction; and
o if the affiliate transaction involves an amount in excess of $5.0
million, the terms have been determined by a reasonably appropriate
independent qualified appraiser to be fair, from a financial
standpoint, to us and the Owners.
The restrictions on transactions with affiliates will not prohibit:
o any Restricted Payment permitted to be paid pursuant to the covenant
described under "--Limitation on Restricted Payments";
o any issuance of securities, or other payments, awards or grants in
cash, securities or otherwise pursuant to, or the funding of,
employment arrangements, stock options, stock ownership and other
employee benefit plans approved by the board of directors;
o the grant of stock options or similar rights to employees and
directors of Navigator Holdings or us pursuant to plans approved by
the board of directors;
o fees paid to directors who are not our employees or employees of the
Owners;
o any affiliate transaction between us and an Owner or between Owners;
o the performance by us and the Owners of our obligations under the
Management Agreement and, in the case of the Owners, the Technical
Supervision Agreement, the Technical Management Agreement and the
Commercial Management Agreement, in each case in the form in effect on
the date of initial issuance of the old notes; and
o the payments made to the stockholders of Navigator Holdings on the
date of initial issuance of the old notes as described in this
prospectus under "Certain Transactions".
Limitation on the Sale or Issuance of Capital Stock of Owners. We will not
sell or otherwise dispose of any capital stock of an Owner, and will not permit
any Owner directly, or indirectly, to issue or sell or otherwise dispose of any
of its capital stock except (1) to us or another Owner or (2) directors'
qualifying shares.
Limitation on Liens. We will not, and will not permit any Owner to,
directly or indirectly, incur or permit to exist any lien of any nature
whatsoever on any of its properties, including capital stock of an Owner,
whether owned at the date of initial issuance of the old notes or acquired
afterwards, other than permitted liens.
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Limitation on Sale/Leaseback Transactions. We will not, and will not permit
any Owner to, enter into any Sale/Leaseback Transaction, except for a UK Lease.
Merger and Consolidation. We will not consolidate with or merge with or
into, or convey, transfer or lease, in one transaction or a series of
transactions, all or substantially all its assets to, any person, except in
connection with the imposition of Additional Amounts and unless:
o the resulting, surviving or transferee person (the "Successor Issuer")
is a person organized and existing under
(a) the laws of the United States of America, any State thereof or
the District of Columbia,
(b) the laws of the Republic of Liberia,
(c) the laws of the Isle of Man; or
(d) any other jurisdiction which at the time is generally deemed
acceptable by institutional lenders to the shipping industry, as
determined in good faith by the board of directors, and the
Successor Issuer (if it is not us) will expressly assume, by a
supplemental indenture, all the obligations of ours under the new
notes and the applicable indenture;
o the Successor Issuer (if it is not us) will expressly assume all the
obligations of ours under the Security Agreements and the Letter of
Credit Reimbursement Agreement;
o immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of the Successor Issuer or
any subsidiary as a result of such transaction as having been incurred
by the Successor Issuer or such subsidiary at the time of such
transaction, no default shall have occurred and be continuing;
o immediately after giving effect to such transaction, the Successor
Issuer will have a consolidated net worth in an amount that is not
less than our consolidated net worth immediately prior to such
transaction;
o we will have delivered to the applicable trustee an officers'
certificate and an opinion of counsel, each stating that the
consolidation, merger or transfer and the supplemental indenture
comply with the indenture; and
o we will have delivered an opinion of counsel in the jurisdiction where
the Successor Issuer is domiciled (the "Applicable Jurisdiction")
indicating that:
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(1) any payment of interest, principal or any premiums on the new
notes by the Successor Issuer to a holder will, after the
consolidation, merger, conveyance, transfer or lease of assets,
be exempt from withholding tax in the Applicable Jurisdiction and
(2) no other taxes on income, including taxable capital gains, will
be payable under any tax law of the Applicable Jurisdiction by a
holder of the new notes, who is or who is deemed to be a
non-resident of the Applicable Jurisdiction in respect of the
acquisition, ownership or disposition of the new notes including
the receipt of interest, principal or premiums thereon, provided
that such holder does not use or hold, and is not deemed to use
or hold the new notes in carrying on a business in the Applicable
Jurisdiction.
The Successor Issuer will be the successor to us and will succeed to, and
be substituted for, and may exercise every right and power of, ours under the
indentures, but we, in the case of a conveyance, transfer or lease, will not be
released from our obligation to pay the principal of and interest on the new
notes.
We will not permit any Owner to consolidate with or merge with or into, or
convey, transfer or lease, in one transaction or a series of transactions, all
or substantially all its assets to any person, except in connection with the
imposition of Additional Amounts and unless:
o the resulting, surviving or transferee person (the "Successor Owner")
is a person organized and existing under the laws of the jurisdiction
under which such subsidiary was organized or under
(A) the laws of the United States of America, or any State or the
District of Columbia,
(B) the laws of the Republic of Liberia,
(C) the laws of the Isle of Man; or
(D) the laws of any other jurisdiction which at the time is generally
deemed acceptable by institutional lenders to the shipping
industry, as determined in good faith by the board of directors,
and the Successor Owner (if it is not the Owner) will expressly
assume, by a guarantee agreement, all the obligations of such
Owner, if any, under its guarantee;
o the Successor Owner (if it is not the Owner) will expressly assume, by
a guarantee agreement, all the obligations of such Owner, if any,
under its guarantee of our obligations under the Security Agreements
and the Letter of Credit Reimbursement Agreement;
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o immediately after giving effect to such transaction or transactions on
a pro forma basis (and treating any indebtedness which becomes an
obligation of the Successor Owner as a result of such transaction as
having been issued by such person at the time of such transaction), no
default will have occurred and be continuing;
o we deliver to the applicable trustee an officers' certificate and an
opinion of counsel, each stating that such consolidation, merger or
transfer and such guarantee agreement, if any, complies with the
applicable indenture; and
o we deliver an opinion of counsel in the Applicable Jurisdiction to the
effect that:
(1) any payment of interest, principal or any premiums on the
guarantee by the Successor Owner to a holder will, after the
consolidation, merger, conveyance, transfer or lease of assets be
exempt from withholding tax in the Applicable Jurisdiction; and
(2) no other taxes or income, including taxable capital gains, will
be payable under any tax law of the Applicable Jurisdiction by a
holder of the notes who is or who is deemed to be a non-resident
of the Applicable Jurisdiction in respect of the acquisition,
ownership or disposition of the notes, including the receipt of
interest, principal or premiums, provided that the holder does
not use or hold, and is not deemed to use or hold the notes in
carrying on a business in the Applicable Jurisdiction.
Limitation on Business Activities. We will not conduct any trade or
business other than holding investments in the Owners. We will not permit any
Owner to conduct any trade or business other than the ownership and operation of
its respective vessel and holding investments in us or one or more other Owners.
Impairment of Security Interest. We will not, and will not permit any Owner
to, take or knowingly or negligently omit to take, any action, which action or
omission might or would have the result of materially impairing the security
interest with respect to the collateral for the benefit of the trustees and the
holders of the new notes. We will not, and will not permit any Owner to, grant
to any person other than the collateral agent, for the benefit of the trustees,
the letter of credit issuer and the holders of the new notes, any interest
whatsoever in any of the collateral.
Amendments to Security Agreements. We will not, and will not permit any
Owner to, amend, modify or supplement, or permit or consent to any amendment,
modification or supplement of, the Security Agreements in any way that would be
adverse to the holders of the new notes.
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SEC Reports. Whether or not required by the rules and regulations of the
SEC, we will furnish to the noteholders:
o all annual and quarterly financial information that would be required
to be contained in a filing with the SEC on Forms 20-F and 10-Q if we
were required to file such Forms, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual financial information, a report thereon by
our certified independent accountants; and
o all current reports that would be required to be filed with the SEC on
Form 8-K if we were required to file such reports.
The quarterly financial information will be furnished within 60 days following
the end of each of our fiscal quarters and such annual financial information
will be furnished within 120 days following the end of our fiscal year.
Limitation on Activities of Navigator Holdings.
o Navigator Holdings will not incur, directly or indirectly, any
indebtedness other than the Holdings Pledge;
o Navigator Holdings will at all times be the holder of record of, and
shall be the beneficial owner (as defined in Rules 13d-3 and 13d-5
under the Exchange Act) of, 100% of the outstanding capital stock of
Navigator Gas Transport;
o Navigator Holdings will not engage in any trade or business or hold
any assets or make any investments, other than, in each case, the
ownership of the capital stock of Navigator Gas Transport;
o Navigator Holdings will not, directly or indirectly, incur or permit
to exist any lien of any nature whatsoever on any of its properties,
other than the Holdings Pledge; and
o Navigator Holdings will not consolidate with or merge with or into any
person.
DEFAULTS
An event of default is defined in the indentures as:
1. a default in the payment of interest on the notes when due, which
continues for 30 days;
2. a default in the payment of principal of any note when due at its
stated maturity, upon optional or mandatory redemption, required
purchase, declaration or otherwise;
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3. the failure by us to comply with our obligations under "--Certain
Covenants--Merger and Consolidation" above;
4. the failure us to comply for 30 days after notice with any of our
covenants described above under "--Mandatory Offers to Purchase New
Notes--Change of Control," other than a failure to purchase new notes,
"--Certain Covenants--Limitation on Indebtedness," "--Certain
Covenants--Limitation on Indebtedness and Preferred Stock of Owners,"
"--Certain Covenants--Limitation on Restricted Payments," "--Certain
Covenants--Limitation on Restrictions on Distributions From Owners,"
"--Certain Covenants--Limitation on Asset Sales," "--Certain
Covenants--Limitation on Affiliate Transactions," "--Certain
Covenants--Limitation on the Sale or Issuance of Capital Stock of
Owners,' "--Certain Covenants--Limitation on Liens," "--Certain
Covenants--Limitation on Sale/Leaseback Transactions," "--Certain
Covenants--Limitation on Business Activities," "--Certain
Covenants--Impairment of Security Interest," "--Certain
Covenants--Amendment to Security Agreements" or "--Certain
Covenants--SEC Reports" or the failure by Navigator Holdings to comply
for 10 business days after notice with any of its obligations in the
covenant described above under "--Certain Covenants--Limitation on
Activities of Navigator Holdings";
5. the failure by us to comply with our other agreements contained in the
indentures or in the Security Agreements, or the occurrence of an
event of default under a mortgage, and such failure or event of
default continues for 60 days after notice;
6. indebtedness of Navigator Holdings, us or any Owner is not paid within
any applicable grace period after final maturity or is accelerated by
its holders because of a default and the total amount of such
indebtedness unpaid or accelerated exceeds $5.0 million (the "cross
acceleration provision");
7. certain events of bankruptcy, insolvency or reorganization of
Navigator Holdings, us or an Owner (the "bankruptcy provisions");
8. any judgment or decree for the payment of money in excess of $5.0
million is entered against Navigator Holdings, us or an Owner, remains
outstanding for a period of 60 days following such judgment and is not
discharged, waived or stayed within 10 days after notice (the
"judgment default provision");
9. a guarantee ceases to be in full force and effect, other than in
accordance with the terms of such guarantee, or an Owner denies or
disaffirms its obligations under its guarantee (the "guarantee default
provision");
10. the security interest under the indentures or the Security Agreements,
at any time, ceases to be in full force and effect for any reason,
other than by operation of the provisions of the applicable indenture
and the Security Agreements, other than as a result of the
satisfaction in full of all obligations
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under the applicable indenture and discharge of the applicable
indenture, or any security interest created thereunder or in the
Security Agreements is declared invalid or unenforceable or we,
Navigator Holdings or any Owner asserts, in any pleading in any court
of competent jurisdiction, that any such security interest is invalid
or unenforceable (the "security default provision"); or
11. the Designated Owners cease to own (and vote at their discretion)
voting stock of Navigator Holdings representing at least a majority of
the voting stock of Navigator Holdings and cease to own capital stock
of Navigator Holdings entitling them to at least a majority of the
equity interests in Navigator Holdings.
A default under clause (4), (5) or (8) point will not constitute an event of
default under the indentures until the applicable trustee or the holders of 25%
in principal amount of the outstanding new notes of a series notify us of the
default and we do not cure such default within the time specified after receipt
of such notice.
If an event of default occurs with respect to a series of new notes and is
continuing, the applicable trustee or the holders of at least 25% in principal
amount of the outstanding new notes of such series may declare the principal of
and accrued but unpaid interest on all the new notes of the series to be due and
payable. Upon such a declaration, principal and interest will be due and payable
immediately. If an event of default relating to certain events of our
bankruptcy, insolvency or reorganization occurs and is continuing, the principal
of and interest on all the new notes will automatically become and be
immediately due and payable without any declaration or other act on the part of
the trustees or any holders of the new notes. Under certain circumstances, the
holders of a majority in principal amount of the outstanding new notes of a
series may rescind any acceleration and its consequences. Subject to the
provisions of the indentures relating to the duties of the trustees, in case an
event of default occurs with respect to a series of notes and is continuing, the
applicable trustee will be under no obligation to exercise any of the rights or
powers under the indenture at the request or direction of any of the holders of
the new notes of such series unless the holders have offered the trustee
reasonable indemnity or security against any loss, liability or expense.
Except to enforce the right to receive payment of any principal, premium or
interest when due, no holder of a new note of a series may pursue any remedy
under the applicable indenture or the new notes of such series unless:
o such holder has previously given the applicable trustee notice that an
event of default is continuing;
o holders of at least 25% in principal amount of the outstanding notes
of such series have requested such trustee to pursue the remedy;
o such holders have offered such trustee reasonable security or
indemnity against any loss, liability or expense;
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o such trustee has not complied with such request within 60 days after
its receipt of notice and the offer of security or indemnity; and
o the holders of a majority in principal amount of the outstanding notes
of the series have not given the trustee a direction inconsistent with
such request within such 60-day period.
Subject to certain restrictions, the holders of a majority in principal amount
of the outstanding notes of a series have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the
applicable trustee or of exercising any trust or power conferred on the trustee.
The trustee may refuse to follow any direction that conflicts with law or the
indenture or that such trustee determines is unduly prejudicial to the rights of
any other holder of a new note of such series or that would involve such trustee
in personal liability.
Each indenture provides that if a default occurs and is continuing and is
known to the trustee, the trustee must mail to each holder of the new notes of
the affected series notice of the default within 90 days after it occurs. Except
in the case of a default in the payment of principal of or interest on a new
note of a series, the trustee may withhold notice if and so long as a committee
of its trust officers determines that withholding notice is not opposed to the
interest of the holders of the new notes of such series. We must deliver to each
trustee, within 120 days after the end of each fiscal year, a certificate
indicating whether the signers of the certificate know of any default that
occurred during the previous year. We must also deliver to each trustee, within
30 days after occurrence, written notice of any event which would constitute
certain defaults, their status and what action we are taking or propose to take
in respect of the event.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
A director, officer or employee, of ours or Navigator Holdings will not
have any liability for any obligations of ours or Navigator Holdings under the
indentures, the Security Agreements or the Intercreditor Agreement. In addition,
a director, officer, employee or stockholder, as such, of the Owners shall not
have any liability for any obligations of the Owners under the guarantees or for
any claim based on or connected with such obligations or their creation.
AMENDMENTS AND WAIVERS
Subject to certain exceptions, each indenture may be amended with the
consent of the holders of a majority in principal amount of the notes of the
applicable series then outstanding. Any past default or event of default or
compliance with any provisions may also be waived with the consent of the
holders of a majority in principal amount of the notes of the same series then
outstanding. However, without the consent of each holder of a new note of the
series affected, no amendment may, among other things:
o reduce the amount of notes whose holders must consent to an amendment;
o reduce the rate of or extend the time for payment of interest on the
note;
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o reduce the principal of or extend the stated maturity of the note;
o reduce the premium payable upon the redemption of the note or change
the time at which any note may be redeemed as described under
"--Redemptions" above;
o make any note payable in money other than that stated in the note;
o impair the right of the holder to receive payment of principal of and
interest on the notes or to institute suit for the enforcement of any
payment on or with respect to the notes;
o make any change in the amendment provisions which require each
holder's consent or in the waiver provisions;
o make any change in any guarantee or Security Agreement that would
adversely affect the holders, or terminate the lien of the indenture
or any Security Agreement on any property at any time subject to the
lien or deprive the holder of the security afforded by the lien of
such indenture or the Security Agreements; or
o make any change in the covenants described under "--Certain Covenants"
above that would adversely affect the holders.
Without the consent of any holder of the notes, we and the relevant trustee
may amend the applicable indenture or Security Agreements to cure any ambiguity,
omission, defect or inconsistency, to provide for the assumption by a successor
corporation of our obligations under the indenture, to provide for
uncertificated new notes in addition to or in place of certificated new notes,
to add guarantees of the new notes, to secure the notes, to add to our covenants
for the benefit of the holders of the notes or to surrender any right or power
conferred upon us, to make any change that does not adversely affect the rights
of any holder of the notes or to comply with any requirement of the SEC in
connection with the qualification of the indentures under the Trust Indenture
Act.
The consent of the holders of the notes is not necessary under the
indentures to approve the particular form of any proposed amendment. It is
sufficient if the consent approves the substance of the proposed amendment.
After an amendment under an indenture becomes effective, we must mail to
holders of the notes of the affected series a notice briefly describing the
amendment. The failure to give notice to all holders of the notes of the
affected series, or any defect as to the notice, will not impair or affect the
validity of the amendment.
TRANSFER
The new notes will be issued in registered form and will be transferable,
subject to applicable federal and state securities laws, only upon the surrender
of the new notes being
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transferred for registration of transfer. We may require payment of a sum
sufficient to cover any tax, assessment or other governmental charge payable in
connection with transfers and exchanges.
DEFEASANCE
We may at any time terminate all our obligations under the notes of a
series and the applicable indenture ("legal defeasance"), except for some
obligations, including those concerning the defeasance trust and obligations to
register the transfer or exchange of the new notes of such series, to replace
mutilated, destroyed, lost or stolen new notes of such series and to maintain a
registrar and paying agent in respect of the new notes of such series. We may at
any time terminate our obligations under the notes of a series and the
applicable indenture under "--Mandatory Offers to Purchase New Notes--Offer to
Purchase upon Change of Control" and under the covenants described under
"--Certain Covenants" (other than the covenant described under "--Merger and
Consolidation"), the operation of the cross acceleration provision, the
bankruptcy provisions with respect to Owners, the judgment default provision,
the guarantee default provision and the security default provision described
under "--Defaults" above and the limitations contained in clause (4) of the
first paragraph under, and in the third paragraph under, "--Certain
Covenants--Merger and Consolidation" above ("covenant defeasance").
We may exercise our legal defeasance option for a series of notes
notwithstanding our prior exercise of our covenant defeasance option for such
series. If we exercise our legal defeasance option for a series of notes,
payment of the notes of such series may not be accelerated because of an event
of default. If we exercise our covenant defeasance option for a series of notes,
payment of the notes of such series may not be accelerated because of an event
of default specified in clause (4), (5) or (7) (with respect only to Owners), or
in clauses (8) through (11) under "--Defaults" above or because of our failure
of to comply with clause (4) of the first paragraph, or with the third
paragraph, under "--Certain Covenants--Merger and Consolidation" above. If we
exercise our legal defeasance option or our covenant defeasance option for a
series of notes, each Owner will be released from all the obligations of its
guarantee and the Security Agreements for such series.
In order to exercise either defeasance option for a series of notes, we
must irrevocably deposit in trust with the applicable trustee money or U.S.
Government Obligations for the payment of principal and interest on the notes of
such series to redemption or maturity, as the case may be. We must also comply
with other conditions, including delivery to the applicable trustee of an
opinion of counsel indicating that holders of the new notes of such series will
not recognize income, gain or loss for federal income tax purposes as a result
of such deposit and defeasance and will be subject to federal income tax on the
same amounts and in the same manner and at the same times as would have been the
case if such deposit and defeasance had not occurred. In the case of legal
defeasance only, this opinion of counsel must be based on a ruling of the
Internal Revenue Service or other change in applicable federal income tax law.
Notwithstanding the foregoing, our exercise of either defeasance option may
not be enforceable if the defeasance improves the position of noteholders of
either series of notes as against any other creditor of ours, whether actual,
contingent or otherwise. We may not exercise our legal defeasance or covenant
defeasance options unless the rating agencies confirm to the
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applicable trustee in writing that such exercise will not result in a ratings
decline with respect to either series of notes.
CONCERNING THE TRUSTEES
United States Trust Company of New York is the trustee under the First
Priority Indenture and has been appointed by us as registrar and paying agent
for the new First Priority Notes and any untendered old First Priority Notes.
United States Trust Company of New York has been appointed as the exchange
agent for the exchange offer.
The Chase Manhattan Bank is the trustee under the Second Priority Indenture
and has been appointed by us as registrar and paying agent for the Second
Priority Notes and any untendered old Second Priority Notes.
United States Trust Company of New York is the collateral agent under the
Intercreditor Agreement.
The holders of a majority in principal amount of the outstanding notes of a
series have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the applicable trustee,
subject to certain exceptions. Each indenture provides that if an event of
default occurs, and is not cured, the trustee will be required, in the exercise
of its power, to use the degree of care of a prudent person in the conduct of
his own affairs. Subject to these provisions, the trustee is under no obligation
to exercise any of its rights or powers under the indenture at the request of
any holder of notes of the applicable series, unless the holder has offered to
the trustee security and indemnity satisfactory to it against any loss,
liability or expense and then only to the extent required by the terms of the
indenture.
Prior to the delivery date of the first vessel, the Manager is responsible
for the payment of the fees and expenses of the trustees and the collateral
agent. Thereafter, the fees and expenses of the trustees and the collateral
agent shall be payable from amounts held in the Revenue Account. See
"--Priorities of Payments--Revenue Account."
GOVERNING LAW
The indentures, the Intercreditor Agreement, the new notes and each of the
Security Agreements, other than the mortgages and the Issue of One Debenture,
are governed by, and construed in accordance with, the laws of the State of New
York without giving effect to applicable principles of conflicts of law. The
building contract guarantees and the performance bonds are governed by the laws
of England.
ENFORCEABILITY OF JUDGMENTS
Since most of the operating assets of Navigator Holdings and its
subsidiaries are located outside the United States, any judgment obtained in the
United States against Navigator Holdings or a subsidiary, including judgments
with respect to the payment of principal of and
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interest on the new notes, may not be collectible within the United States. See
"Enforcement of Civil Liabilities."
CONSENT TO JURISDICTION AND SERVICE
We, Navigator Holdings, and each guarantor has appointed Cambridge
Partners, L.L.C., 750 Lexington Avenue, 30th Floor, New York, New York 10022 as
its agent for actions brought under Federal or state securities laws brought in
any Federal or state court located in the Borough of Manhattan in The City of
New York and will submit to such jurisdiction. See "Enforcement of Civil
Liabilities."
CERTAIN DEFINITIONS
The following are definitions of some terms used in this prospectus.
"Charters" is defined to mean each charter party and contract of
affreightment between an Owner, or the Manager on behalf of an Owner, and any
third party with respect to a vessel, and as the same may be amended from time
to time.
"Disqualified Stock" means, with respect to any person, any capital stock
which by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable) or upon the happening of any event matures or
is mandatory redeemable pursuant to a sinking fund obligation or otherwise; is
convertible or exchangeable for indebtedness or Disqualified Stock, or is
redeemable or subject to required purchase at the option of the holder thereof,
in whole or in part, in each case on or prior to the first anniversary of the
stated maturity of the new notes.
"Issue of One Debenture" means, with respect to each Owner, the issue of
one debenture, dated as of the date of initial issuance of the old notes,
between each Owner and the collateral agent wherein such Owner grants to the
collateral agent a security interest in and to all of such Owner's now owned and
hereafter acquired property.
"Manager's Fee" means, with respect to each vessel, (1) prior to the
delivery date, an amount equal to $30,000 per annum, and (2) from and after the
delivery date, an amount equal to $120,000 per annum.
"Permitted Holder" means Cambridge Gas, Xenon and GEBAB and their Related
Parties.
"Permitted Investment" means an investment by Navigator Gas Transport or
any Owner in:
o Navigator Gas Transport or an Owner;
o temporary cash investments;
o receivables owing to Navigator Gas Transport or any Owner if created
or acquired in the ordinary course of business and payable or
dischargeable
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in accordance with customary trade terms; provided that such trade
terms may include such concessionary trade terms as Navigator Gas
Transport or any such Owner deems reasonable under the circumstances;
o payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the ordinary
course of business; and
o stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to Navigator Gas
Transport or any Owner or in satisfaction of judgments.
"Permitted Liens" means, with respect to any person, the following:
o liens securing obligations under the indentures, the old notes, the
Letter of Credit Reimbursement Agreement and the Security Agreements;
o other liens existing or securing indebtedness existing, or for which a
written commitment has been made on or prior to the date of initial
issuance of the old notes, on the date of initial issuance of the old
notes;
o liens granted after the date of initial issuance of the old notes in
favor of the holders; and in the case of an Owner, the following
additional liens;
o liens for crews' wages and pledges or deposits by such person under
worker's compensation laws, unemployment insurance laws or similar
legislation, or good faith deposits in connection with bids, tenders,
contracts, other than for the payment of indebtedness, or leases to
which such person is a party, or deposits to secure public or
statutory obligations of such person or deposits of cash or United
States government bonds to secure surety or appeal bonds to which such
person is a party, or deposits as security for contested taxes or
import duties or for the payment of rent, in each case incurred in the
ordinary course of business;
o liens imposed by law, such as carriers', warehousemen's and mechanics'
liens, in each case for sums not yet due or being contested in good
faith by appropriate proceedings or other liens arising out of
judgments or awards against such person with respect to which such
person shall then be proceeding with an appeal or other proceedings
for review;
o liens for property taxes not yet subject to penalties for non-payment
or which are being contested in good faith and by appropriate
proceedings;
o liens in favor of issuers of surety bonds or letters of credit issued
pursuant to the request of and for the account of such person in the
ordinary course
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of its business; provided that such letters of credit do not
constitute indebtedness;
o minor survey exceptions, minor encumbrances, easements or reservations
of, or rights of others for, licenses, rights-of-way, sewers, electric
lines, telegraph and telephone lines and other similar purposes, or
zoning or other restrictions as to the use of real property or liens
incidental to the conduct of the business of such person or to the
ownership of its properties which were not incurred in connection with
indebtedness and which do not in the aggregate materially adversely
affect the value of said properties or materially impair their use in
the operation of the business of such person;
o liens on property at the time such person or any of its subsidiaries
acquires the property, including any acquisition by means of a merger
or consolidation with or into such person or a subsidiary of such
person; provided that such liens are not created, incurred or assumed
in connection with, or in contemplation of, such acquisition; provided
further, however, that the liens may not extend to any other property
owned by such person or any of its subsidiaries;
o any lien which arises in favor of an unpaid seller in respect of
goods, plant or equipment sold and delivered to such person in the
ordinary course of business until payment of the purchase price for
such goods or plant or equipment or any other goods, plant or
equipment previously sold and delivered by that seller, except to the
extent that such lien secures indebtedness or arises otherwise than
due to deferment of payment of purchase price;
o any lien or pledge created or subsisting in the ordinary course of
business over documents of title, insurance policies or sale contracts
in relation to commercial goods to secure the purchase price thereof;
o charters, leases or subleases granted to others in the ordinary course
of business that are subject to the relevant mortgage and that do not
materially interfere with the ordinary course of business of Navigator
Gas Transport and the Owners, taken as a whole;
(1) liens in favor of Navigator Gas Transport or any Owner,
(2) liens arising from the rendering of a final judgment or order
against Navigator Gas Transport or any Owner that does not give
rise to an event of default, and
(3) liens securing reimbursement obligations with respect to letters
of credit that encumber documents and other property relating to
such letters of credit and products and proceeds thereof;
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o liens in favor of customers and revenue authorities arising as a
matter of law to secure payment of custom duties in connection with
the importation of goods; and
o liens for salvage.
For purposes of this definition, the term "indebtedness" shall be deemed to
include interest on such indebtedness.
"Rescission Amount" means, as of any date of determination and with respect
to a vessel and the termination of its related building contract, the sum of:
o the principal amount of the notes allocated to such vessel as of such
date;
o all accrued and unpaid interest thereto to the date of the required
redemption of the notes as a result of such termination;
o any and all Manager's Fees owing to the Manager in respect of such
vessel;
o an amount equal to the amounts of all working capital draws made with
respect to such vessel, together with all amounts owing to the letter
of credit issuer with respect thereto; and
o any cost incurred by the collateral agent in connection with the
related redemption.
"Restricted Payment" with respect to any person means
o the declaration or payment of any dividends or any other distributions
of any sort in respect of its capital stock, including any payment in
connection with any merger or consolidation involving such person, or
similar payment to the direct or indirect holders of its capital
stock;
o the purchase, redemption or other acquisition or retirement for value
of any capital stock of Navigator Gas Transport held by any person or
of any capital stock of an Owner held by any affiliate of Navigator
Gas Transport, other than an Owner, including the exercise of any
option to exchange any capital stock;
o the purchase, repurchase, redemption, defeasance or other acquisition
or retirement for value, prior to scheduled maturity, scheduled
repayment or scheduled sinking fund payment of any subordinated
obligations, other than the purchase, repurchase or other acquisition
of subordinated obligations purchased in anticipation of satisfying a
sinking fund obligation, principal installment or final maturity, in
each case due within one year of the date of acquisition, or
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o the making of any investment in any person, other than a
Permitted Investment.
"Sale Leaseback Transaction" means an arrangement relating to property now
owned or hereafter acquired whereby Navigator Gas Transport or an Owner
transfers such property to a person and Navigator Gas Transport or an Owner
leases it from such person.
"Security Agreements" means the Intercreditor Agreement, the mortgages, the
Assignments of Earnings and Insurances, each Original Closing of One Debenture
and any other similar instruments or documents entered into or delivered in
connection with any of the foregoing, as such agreements, instruments or
documents may from time to time be amended in accordance with their respective
terms and the terms of the indentures and the Letter of Credit Reimbursement
Agreement.
"total loss" means, with respect to a vessel that has been accepted by an
Owner pursuant to the related building contract, either:
o the actual or constructive or compromised or arranged total loss of
the vessel;
o the requisition for title or any other compulsory acquisition of any
vessel's capture, seizure, condemnation, destruction, detention or
confiscation of the vessel or a requisition by a governmental
authority for hire of the vessel for a period in excess of 180 days.
Any actual loss of the vessel shall be deemed to have occurred at 1200 hours
Greenwich Mean Time ("GMT") on the actual date on which the vessel was lost or
in the event of the date of the loss being unknown then the actual total loss
shall be deemed to have occurred at 1200 hours GMT on the day next following the
day on which the vessel was last heard from. A constructive total loss shall be
deemed to have occurred at 1200 hours GMT on the earliest of:
o the date that notice of abandonment of the vessel is given to the
insurers, provided a claim for total loss is admitted by the insurers;
o if the insurers do not admit such a claim, at the date and time GMT at
which a total loss is subsequently adjudged by a competent court of
law or arbitration tribunal to have occurred; or
o the date that a report is rendered by one or more experts in marine
surveying and vessel valuation concluding that salvage, repair and
associated costs in restoring the vessel to the condition specified in
each mortgage exceed the vessel's fair market value in sound
condition.
"Total Loss Payment" means, as of any date of determination and with
respect to a total loss of a vessel, the sum of:
o the principal amount of the notes allocated to a vessel as of such
date;
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o all accrued and unpaid interest thereon to the date of the required
redemption of the notes as a result of such total loss;
o any and all premiums payable with respect to such redemption;
o any and all Manager's Fees owing to the Manager in respect of such
vessel;
o an amount equal to the amounts of all working capital draws made with
respect to such vessel, together with all amounts owing to the letter
of credit issuer with respect thereto; and
o an amount equal to the allocated portion of all interest draws for
such vessel, together with all amounts owing to the letter of credit
issuer with respect thereto.
"UK Lease" means an arrangement pursuant to which:
o an Owner enters into either a hire purchase agreement or a conditional
sale contract with a UK lessor providing for the UK lessor to pay a
purchase price for the related vessel and granting such UK lessor a
right of possession in respect of such vessel;
o such UK lessor charters such vessel to such Owner under a bareboat
charter for a term ending after the maturity date of the notes; and
o such Owner's monetary obligations with respect to such charter are
effectively satisfied by depositing the purchase price in a defeasance
trust.
The creation of any such UK lease will not result in the lowering of any ratings
then in effect with respect to the notes.
"UK Lessor" means a leasing subsidiary of a United Kingdom clearing bank.
DESCRIPTION OF THE UNITS AND THE WARRANTS
Pursuant to the offerings, the old Second Priority Notes were issued in
units. Each unit consists of one Second Priority Note in a principal amount of
$1,000 and 7.66 warrants. Each warrant entitles the warrant holder to purchase
one share of Navigator Holdings common stock at an exercise price of $.01 per
share, subject to adjustment. The Second Priority Notes and the warrants will
not trade separately until the earlier to occur of (1) the commencement of the
exchange offer or the effectiveness of a shelf registration statement with
respect to the Second Priority Notes and (2) such date as the Initial Purchasers
may in their discretion deem appropriate. See "Description of the New
Notes--Registration Rights." See "Description of the New Notes" and "Description
of the Units and the Warrants" for further information concerning the Second
Priority Notes and the warrants.
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The warrants were issued under the Warrant Agreement dated as of August 7,
1997, between Navigator Holdings and United States Trust Company of New York, as
warrant agent. The exercise price of $.01 per share for the Navigator Holdings
common stock purchasable under the warrants was paid by the Initial Purchasers
as part of the purchase price of the units. No additional amounts are required
to be paid upon exercise of the warrants. The warrants will entitle the warrant
holders to purchase in the aggregate 25% of Navigator Holdings common stock on a
fully diluted basis as of the date of issuance of the warrants. The number of
shares of Navigator Holdings common stock is subject to adjustment in certain
cases referred to below. The warrants are currently exercisable and have been
exercisable since August 8, 1998, the first anniversary of their date of
issuance. Unless exercised, the warrants will automatically expire on June 30,
2007.
The warrants and the underlying common stock of Navigator Holdings have not
been registered under the Securities Act and new warrants or new shares of
common stock of Navigator Holdings are not being offered in the exchange offer.
Accordingly, the warrants and the underlying shares of common stock of Navigator
Holdings should not be sold unless they are registered under the Securities Act
or they are sold pursuant to an exemption from registration.
BOOK-ENTRY REGISTRATION
The old notes sold to Qualified Institutional Buyers were, and the new
notes will be, originally issued in fully registered book-entry form, and each
of the old notes and the new notes will be represented by a global note (each a
"Global Note") registered in the name of Cede & Co. as the nominee of the
Depository Trust Company ("DTC"). All references to actions by holders shall, in
respect of the applicable Global Note, refer to actions taken by DTC upon
instruction from DTC participants, and all references herein to distributions,
notices, reports and statements to holders shall refer, to distributions,
notices, reports and statements to DTC or Cede, as the registered holder of the
new notes or to DTC participants for distribution to beneficial owners of new
notes in accordance with DTC procedures. DTC has advised us that DTC is a
limited-purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
accepts securities for deposit from its participating organizations ("DTC
participants") and facilitates the clearance and settlement of securities
transactions between participants in such securities through electronic
book-entry changes in accounts of participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers, banks and trust companies and clearing corporations and may include
certain other organizations. Indirect access to the DTC system is also available
to others such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly ("indirect participants").
We expect that pursuant to procedures established by DTC, (1) upon deposit
of the applicable Global Note, DTC will credit the accounts of DTC participants
designated by the exchange agents with portions of the principal amount of the
applicable Global Note and (2) ownership of the new notes evidenced by the
applicable Global Note will be shown on, and the transfer of ownership thereof
will be effected only through, records maintained by DTC, with
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respect to the interests of DTC's participants and DTC's indirect participants.
Consequently, the ability to transfer old notes or new notes evidenced by the
applicable Global Note will be limited to such extent.
So long as Cede is the registered owner of any new notes, Cede will be
considered the sole holder under the indentures of any new notes evidenced by
the applicable Global Note. Beneficial owners of new notes evidenced by the
applicable Global Note will not be considered the owners or holders under the
indentures for any purpose, including with respect to the giving of any
directions, instructions or approvals to the indenture trustees. Neither we nor
the indenture trustees will have any responsibility or liability for any aspect
of the records of DTC or for maintaining, supervising or reviewing any records
of DTC relating to the new notes. Payments in respect of the principal of, any
premium, and interest on any new notes registered in the name of Cede on the
applicable record date will be payable by the indenture trustees to or at the
direction of Cede in its capacity as the registered holder under the indentures.
Under the terms of the indentures, we and the indenture trustees may treat the
persons in whose names new notes, including the applicable Global Note, are
registered as the owners for the purpose of receiving payments. Consequently,
neither we nor the indenture trustees have or will have any responsibility or
liability for the payment of amounts to beneficial owners of new notes. We
believe, however, that it is currently the policy of DTC to immediately credit
the accounts of the relevant participants with payments, in amounts
proportionate to their respective holdings of beneficial interests in the
relevant security as shown on the records of DTC. Payments by DTC's participants
and DTC's indirect participants to the beneficial owners of new notes will be
governed by standing instructions and customary practice and will be the
responsibility of DTC's participants or DTC's indirect participants. Subject to
certain conditions, any beneficial owner of the applicable Global Note may
obtain, through the DTC participant through which the beneficial owner directly
or indirectly holds its beneficial interest, a certificated new note or new
notes, in exchange for all or part of such beneficial interest. In addition, the
new notes will be issued in fully registered, certificated form to beneficial
owners, or their nominees, rather than to DTC or its nominee, if DTC advises the
indenture trustees in writing that it is no longer willing or able or qualified
to discharge properly its responsibilities as depository with respect to the new
notes and we are unable to locate a qualified successor or if we elect to
terminate the book-entry system through DTC. In such event, the indenture
trustees will notify all beneficial owners through DTC participants of the
availability of certificated new notes. Upon surrender by DTC of the registered
global certificates representing the new notes and receipt of instructions for
re-registration, the indenture trustees will re-issue the new notes in
certificated form to beneficial owners or their nominees. These certificated new
notes will be transferable and exchangeable at the office of the indenture
trustees upon compliance with the requirements set forth in the indentures.
DESCRIPTION OF THE LETTER OF CREDIT REIMBURSEMENT AGREEMENT
The letter of credit was issued pursuant to a Letter of Credit
Reimbursement Agreement and Guaranty dated as of the date of initial issuance of
the old notes among the letter of credit issuer, the participating banks from
time to time party thereto (together with the letter of credit issuer, the
"Letter of Credit Banks"), us, Navigator Holdings and the Owners (the "Letter of
Credit Reimbursement Agreement"). The Letter of Credit is for a maximum amount
of $50.0 million, which is used to pay interest shortfalls and costs of up to an
aggregate of $45.5 million
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and working capital draws of up to $4.5 million to cover our working capital
requirements, if after the delivery of the first vessel, available funds in the
revenue account are insufficient to fund operation expenses.
The maximum drawing amounts under the line of credit are: from the date 90
days prior to the delivery date of the first vessel to be delivered to and
including the date one day prior to the delivery date, a working capital draw of
up to $900,000 may be made; from the delivery date of the first vessel to and
including 91 days prior to the delivery date of the second vessel to be
delivered, an interest draw of up to $9,100,000 and a working capital draw of up
to $900,000 may be made; from the date 90 days prior to the delivery date of the
second vessel to be delivered to and including the date one day prior to the
delivery date of the second vessel to be delivered (assuming the first vessel
has been delivered), an interest draw of up to $9,100,000 and a working capital
draw of up to $1,800,000 may be made; from the delivery date of the second
vessel to and including the date 91 days prior to the delivery date of the third
vessel to be delivered, an interest draw of up to $18,200,000 and a working
capital draw of up to $1,800,000 may be made; from the date 90 days prior to the
delivery date of the third vessel to be delivered to and including the date one
day prior to the delivery date of the third vessel to be delivered (assuming the
first and second vessels have been delivered) an interest draw of up to
$18,200,000 and a working capital draw of up to $2,700,000 may be made; from the
delivery date of third vessel to and including the date one day prior to the
delivery date of the fourth vessel to be delivered, an interest draw of up to
$27,300,000 and a working capital draw of up to $2,700,000 may be made; from the
date 90 days prior to the delivery date of the fourth vessel to be delivered
(assuming the first, second and third vessels have been delivered), an interest
draw of up to $27,300,000 and a working capital draw of up to $3,600,000 may be
made; from the delivery date of the fourth vessel to and including the date 91
days prior to the delivery date of the fifth vessel to be delivered, an interest
draw of up to $36,400,000 and a working capital draw of up to $3,600,000 may be
made; from the date 90 days prior to the delivery date of the fifth vessel to be
delivered to and including the date one day prior to the delivery date of the
fifth vessel to be delivered (assuming delivery of the first, second, third and
fourth vessels have been made), an interest draw of $36,400,000 and a working
capital draw of $4,500,000 may be made; and from the delivery date of the fifth
vessel to the termination date of the Letter of Credit an interest draw of up to
$45,500,000 and a working capital draw of up to $4,500,000 may be made.
The Letter of Credit Reimbursement Agreement provides that interest draws
and Working Capital Draws will be repaid by us, together with accrued interest,
on the first business day of each calendar month to the extent of amounts
available in the Revenue Account as described under "Description of the New
Notes--Priorities of Payment--Revenue Account." We will instruct the collateral
agent to make:
o additional interest draws to repay any portion of any interest draw
and accrued interest thereon that remains unpaid 35 days from the date
of such interest draw; and
o additional working capital draws to repay any portion of any working
capital draw and accrued interest thereon that remains unpaid 35 days
from the date of such working capital draw.
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We will instruct the collateral agent to make additional interest draws to the
extent funds are not available in the Revenue Account on the first business day
of each calendar month to pay any fees due under the Letter of Credit
Reimbursement Agreement. Any outstanding principal amount of Draws not repaid
from amounts in the Revenue Account will be payable from proceeds of the
collateral. Unreimbursed amounts drawn under the letter of credit bear interest
at the letter of credit issuer's cost of funds from time to time plus 1.25% per
annum. We must pay to the letter of credit issuer:
o a fronting fee equal to 0.25% per annum on the aggregate outstanding
face amount of the letter of credit;
o a participation fee equal to 1.00% per annum on the aggregate
outstanding face amount of the letter of credit; and
o an underwriting fee prior to the issuance of the letter of credit
equal to 1.25% of the maximum face amount of the letter of credit.
Our reimbursement obligations under the Letter of Credit Reimbursement Agreement
are guaranteed by each of the Owners and are secured by the collateral. To the
extent such obligations are not repaid from the Revenue Account or from
additional Draws, proceeds of collateral will be applied to repayment of the
reimbursement obligations prior to the repayment of obligations in respect of
the notes.
The Letter of Credit Reimbursement Agreement contains representations and
warranties similar to those contained in the Purchase Agreement, and
incorporates by reference, for the benefit of the letter of credit issuer, each
of the covenants contained in the indentures. The following events, among
others, constitute events of default under the Letter of Credit Reimbursement
Agreement unless waived by the required Letter of Credit Banks:
o we fail to pay the letter of credit issuer when due any amounts drawn
under the letter of credit, any interest thereon or any fees due under
the Letter of Credit Reimbursement Agreement;
o we, Navigator Holdings or any of the Owners fails to observe or
perform any other covenant, agreement or restriction contained or
incorporated by reference in the Letter of Credit Reimbursement
Agreement, and, in certain cases, applicable grace periods have
expired;
o any representation, warranty, certification or statement made by us,
Navigator Holdings or any of the Owners in the Letter of Credit
Reimbursement Agreement or in any certificate, financial statement or
other document delivered pursuant thereto was incorrect in any
material respect when made; and
o certain events of bankruptcy or insolvency of us, Navigator Holdings
or any of the Owners.
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Upon the occurrence of an event of default under the Letter of Credit
Reimbursement Agreement, the letter of credit issuer has the right to notify the
collateral agent that the letter of credit will be terminated within five days.
This notice would allow the trustees to accelerate the maturity of the notes and
to instruct the collateral agent to make an interest draw on the letter of
credit.
The Letter of Credit Reimbursement Agreement provides that amounts
available under the letter of credit will be reduced on a pro rata basis upon
the occurrence of a redemption of the notes as described under "Description of
the New Notes--Redemptions--Optional Redemption" and "--Mandatory Redemption
Upon the Occurrence of Certain Events."
THE MORTGAGES
GENERAL
Contemporaneously with the delivery of a vessel, the Owner of the vessel
will grant to the collateral agent a mortgage on the vessel to secure the
payment of all sums of money, whether for principal, any premium, interest,
fees, expenses or otherwise, from time to time payable by such Owner under its
guarantee, the payment of the principal of, any premium and interest on the
notes, the payment of all other sums payable by us under the indentures and the
payment of all other sums payable under the Security Agreements and the Letter
of Credit Reimbursement Agreement. On the delivery date of a vessel, the related
mortgage will be executed by the related Owner and the collateral agent and will
be recorded in accordance with the provisions of Liberian and/or Isle of Man
law. The maximum liability of each Owner under the mortgage on its vessel is
limited to the same extent as such Owner's maximum liability under its Owner
guarantee. See "Description of the New Notes--Guarantees."
CERTAIN REPRESENTATIONS AND WARRANTIES
Each mortgage contains, among other things, the following representations
and warranties:
Ownership of Vessel. Each Owner will represent and warrant that it is the
sole and lawful owner of the whole of its vessel, free from all liens, security
interests, mortgages, charges or encumbrances, other than the related mortgage
and Permitted Liens;
Priority of Lien. Each Owner will represent and warrant that it is
constituting in favor of the collateral agent a first preferred ship mortgage on
its vessel to secure the punctual payment of each of the amounts due under its
guarantee and the performance and observance of and compliance with all the
covenants, terms, conditions and provisions of its guarantee, the indentures,
the Letter of Credit Reimbursement Agreement and the other Security Agreements
and the transactions contemplated thereby;
Litigation. Each Owner will represent and warrant that no actions or legal
proceedings exist or are threatened against such Owner which will materially
adversely affect the condition, financial or otherwise, of its vessel or will
enjoin or restrain the transactions contemplated hereby; and
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Customary Representations and Warranties. Each Owner will make additional
customary representations and warranties regarding such Owner and its vessel.
CERTAIN COVENANTS
Each mortgage contains, among other things, the following covenants:
Operation of Vessel. No Owner will cause or permit its vessel to be
operated in any manner contrary to law, will engage in unlawful trade, violate
any applicable law or carry any cargo that would expose the vessel to penalty,
confiscation, forfeiture, capture or condemnation or do, suffer or permit to be
done anything which can or may injuriously affect the registration or enrollment
of its vessel under the laws and regulations of the Isle of Man and/or Republic
of Liberia, or any jurisdiction of registration which at the time is generally
deemed acceptable by institutional lenders to the shipping industry, as
determined in good faith by such Owner, and will at all times keep its vessel
duly documented thereunder.
Limitation on Employment of Vessels in War Zones. Each Owner will be
required to ensure that, in the event of hostilities in any part of the world,
its vessel is not employed in carrying any goods which are declared contraband,
nor allowed in any zone in respect of which the war risks insurers have
withdrawn coverage for such vessel, nor allowed to trade in any zone which is
declared a war zone by the war risks insurers, unless such Owner has made
arrangements with such insurers for the payment of additional premiums required
to maintain the relevant insurance in force.
Limitation on Activities Outside Insurance Policies. Each Owner will be
required to ensure that its vessel is not employed in any manner or for any
purpose excepted from any of the insurance policies, or for the purpose of
carriage of goods of any description excepted from the insurance policies and
shall not do or permit to be done anything which could reasonably be expected to
invalidate any insurance policies.
Maintenance of Insurance. Each Owner will be required to maintain insurance
with respect to its vessel, as described below under "--Insurance," and will
assign the insurance policies to the collateral agent to be held for the benefit
of the holders of the notes, the trustees and the letter of credit issuer.
Limitation on Liens. Except for the lien of the mortgage and certain other
Permitted Liens, no Owner will have any right, power or authority to create,
incur or permit to be placed or imposed or continued any lien, encumbrance or
charge on its vessel for longer than 30 days after the same becomes due and
payable and will pay or cause to be discharged or make adequate provision for
the satisfaction or discharge of all claims or demands, or will cause its vessel
to be released or discharged from any lien, encumbrance or charge.
Maintenance of Vessel. Each Owner will at all times and without cost or
expense to the collateral agent maintain and preserve, or cause to be maintained
and preserved, its vessel in good running order and repair, so that such vessel
shall be, in so far as due diligence can make her so, tight, staunch, strong and
well and sufficiently tackled, appareled, furnished, equipped and in every
respect seaworthy and in at least as good operating condition as when originally
delivered by the builders, ordinary wear and tear excepted; and will keep the
vessel, or cause her
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to be kept in such condition, as will entitle her to the highest classification
of Germanischer Lloyd, and annually will furnish the collateral agent a
certificate by Germanischer Lloyd that such classification is maintained.
Transfer of Flag or Sale of Vessel. No Owner will transfer or change the
flag or port or documentation of its vessel, except to the United States or any
jurisdiction which at the time is generally deemed acceptable by institutional
lenders to the shipping industry, as determined in good faith by the Owners, as
permitted by the terms of the indentures. Except as permitted by the terms of
the indentures, no Owner will sell, mortgage, demise, charter or transfer its
vessel.
INSURANCE
Each Owner, at its own expense, will be required to insure its vessel
against all risks, whether marine or war, and all risks of navigation, operation
and maintenance. In addition, each Owner will be required to keep its vessel
insured against all protection and indemnity risks in the name of the Owner. The
protection and indemnity insurance shall include cover against liabilities to
persons who have suffered any loss, damage or injury whatsoever in connection
with anything done or not done by the vessel and/or the related Owner in
connection with the vessel or the employment or use of the vessel, including in
connection with any oil or other substance emanating from the vessel or any
other vessel with which the vessel may be involved in collision, and against
liability under the Oil Pollution Act. Pursuant to each mortgage, each Owner
will also obtain loss of hire hull and machinery insurance, loss of hire war
risks insurance, drug seizure insurance and confiscation, expropriation,
nationalization and detainment insurance in a form which is substantially
equivalent to the coverage carried by other responsible and experienced
companies engaged in the operation of vessels similar to its vessel and with
insurance companies, underwriters, funds, mutual insurance associations or clubs
of recognized standing. No insurance will provide for a deductible amount in
excess of $1,000,000 per occurrence. Under each such insurance policy, each
Owner will cause the collateral agent to be named an additional insured and will
cause the insurers under such policies to waive any liability of the collateral
agent for premiums or calls payable under such policies.
For purposes of insurance against total loss, each vessel is to be insured
for an amount not less than the greater of (1) its fair value and (2) the Total
Loss Payment with respect to such vessel. Unless the collateral agent shall have
otherwise directed, any loss involving damage to a vessel which is not in excess
of $1,000,000 may be deposited into the Operating Account. No policy is to be
cancelable or subject to lapse without at least seven business days prior notice
to the trustees and the collateral agent.
In the event of an actual, constructive or compromised total loss of its
vessel, any adjustment or compromise of such loss by the Owner will be at the
highest amount reasonably obtainable, and all insurance or other payments for
such loss will be applied as set forth above under "Description of the New
Notes--Redemptions--Mandatory Redemption upon the Occurrence of Certain Events."
Unless the collateral agent will have given its prior consent, each insurance
policy shall include a provision stating that no breach of warranty or condition
or want of due diligence on the part of the Owner or any agent of the Owner
shall defeat recovery of any claim by the collateral agent. In the event such
provision conflicts with the available reinsurance
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arrangements of the issuers of the policy, such provision shall not be included
in the related insurance policy. Each Owner will be required to ensure, inter
alia, that seven business days prior written notice be given to the trustees and
to the collateral agent before the cancellation or modification of any
insurance.
INSURANCE PROCEEDS
The proceeds of any insurance or entries referred to in the mortgage will
be applied as follows:
until the occurrence of an event of default:
o any claim under any such insurance will be deposited in the casualty
account and will be applied by the collateral agent pursuant to the
terms of the Intercreditor Agreement; and
o any claim in respect of protection and indemnity insurance will be
paid directly to the person, firm or company to which the liability
covered by such insurance was incurred, or to the applicable Owner in
reimbursement of moneys expended by it in satisfaction of such
liability.
Upon the occurrence of an event of default, except as provided above, any
claim under any such insurance and entry, other than in respect of actual,
constructive, arranged or compromised total loss, will be deposited in the
Termination Account, and will be applied by the collateral agent pursuant to the
terms of the Intercreditor Agreement.
No Owner will alter so as to in any way restrict the cover of any insurance
or entries referred to in its mortgage, except to the extent expressly permitted
by the collateral agent.
EVENTS OF DEFAULT UNDER THE MORTGAGE
The following constitute events of default under the mortgages:
o an event of default under the indentures or the Letter of Credit
Reimbursement Agreement;
o default by the applicable Owner in the payment of any sums payable
under its mortgage to the collateral agent, other than payments due
under the indentures, continuing for two business days after the
receipt of notice of such failure to pay;
o default by the Owner in any material respect in the performance, or
breach in any material respect of any covenant of the Owner under its
mortgage or if any representation or warranty of the Owner made in its
mortgage or in any certificate or other writing delivered in
connection with its mortgage affecting the related vessel proves to
have been inaccurate in any material respect as of the time when the
same shall have been made,
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and, if such breach or default or inaccuracy is curable, continuation
of such default or breach or inaccuracy for a period of 10 days after
receipt of written notice thereof from the collateral agent or any
trustee or the letter of credit issuer;
o entry of a decree or order for relief by a court having jurisdiction
in respect of the Owner in any involuntary case under any applicable
federal or state bankruptcy, insolvency, or other similar law now or
hereafter in effect, or appointment of a receiver, liquidator,
assignee, custodian, trustee, or sequestrator, or other similar
official, for the Owner or for any substantial part of its property,
or the ordering, winding up or liquidation of its respective affairs,
and the continuance of any such decree or order unstayed and in effect
for a period of 90 consecutive days;
o commencement by the Owner of a voluntary case under any applicable
federal or state bankruptcy, insolvency, or other similar law now or
hereafter in effect in any jurisdiction, or the consent by the Owner
to the appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee or sequestrator, or other similar
official, of the Owner or any substantial part of its property, or the
making by the Owner of any general assignment for the benefit of
creditors, or the failure by the Owner generally to pay its debts as
they become due, or the taking of action by the Owner in furtherance
of any such action;
o any vessel is deemed a total loss and the insurance proceeds thereof
have not been received by the collateral agent within 90 days after
the date on which such vessel was deemed a total loss; or
o a lien other than a Permitted Lien is placed on any vessel.
REMEDIES
In the event that any one or more events of default has occurred and is
continuing, then, in each and every such case the collateral agent will have the
right to:
o in the event the related trustee or the letter of credit issuer has
declared immediately due and payable all amounts owing under the notes
and the Letter of Credit Reimbursement Agreement, in which case all
these amounts will be immediately due, bring suit at law, in equity or
in admiralty, as it may be advised, to recover judgment for such
amounts and collect the amounts out of any and all property of the
Owner whether covered by the related mortgage or otherwise;
o exercise all of the rights and remedies in foreclosure and otherwise
given to mortgagees by provisions of applicable law;
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o take and enter into possession of the Owner's vessel, at any time,
wherever the same may be, without court decision or other legal
process and without being responsible for loss or damage. The
collateral agent may, without being responsible for loss or damage,
hold, lay-up, lease, charter, operate or otherwise use such vessel for
such time and upon such terms as it may deem to be for its best
advantage, and demand, collect and retain all hire, freights,
earnings, issues, revenues, income, profits, return premiums, salvage
awards or recoveries, recoveries in general average, and all other
sums due or to become due in respect of the vessel or in respect of
any insurance thereon from any person whomsoever, accounting only for
the net profits, if any, arising from the use of such vessel and
charging upon all receipts from use of the vessel or from the sale
thereof by court proceedings or by private sale all costs, expenses,
charges, damages or losses by reason of such use.
If at any time the collateral agent avails itself of the right given to it to
take the vessel:
(1) the collateral agent will have the right to dock the vessel for a
reasonable time at any dock, pier or other premises of the Owner without charge,
or to dock her at any other place at the cost and expense of the Owner; and
(2) the collateral agent will have the right to require the Owner to
deliver, and the Owner will on demand, at its own cost and expense, deliver to
the collateral agent the vessel as demanded; and
(3) the Owner will irrevocably instruct the master of the vessel so long as
the mortgage is outstanding to deliver the vessel to the collateral agent as
demanded; and
o sell the Owner's vessel or any share therein with or without the
benefit of any charter party or other engagement by public
auction or private contract without legal process at any place in
the world and upon such terms as the collateral agent in its
absolute discretion may determine with power to postpone any such
sale and without being answerable for any loss occasioned by such
sale or resulting from the postponement thereof and at any such
public auction the collateral agent may become the purchaser and
shall have the right to set off the purchase price against the
notes. Any sale of the vessel or any shares therein made by the
collateral agent in pursuit of the applicable mortgage will
operate to divest all title, right and interest of any nature
whatsoever of the applicable Owner therein and thereto and shall
bar such Owner, its successors and assigns, and all persons
claiming by, through or under them. Upon any such sale, the
purchaser will not be bound to see or inquire whether the
collateral agent's power of sale has risen in the manner provided
by such mortgage and the sale will be within the power of the
collateral agent and the receipt of the collateral agent of the
purchase money will effectively discharge the purchaser, who will
not be concerned with the manner of application of
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<PAGE>
the proceeds of sale or be in any way answerable or otherwise
liable therefor.
Each of the vessels will be registered under the laws of the Isle of Man.
The mortgages on the vessels will be preferred mortgage liens under Liberian
maritime law. Liberian law provides that such mortgages may be enforced by the
mortgagee in a proceeding substantially identical to a suit in rem in admiralty
in a proceeding against a vessel covered by such mortgage.
The priority with respect to sale proceeds that such a mortgage would have
vis-a-vis the claims of other lien creditors in an enforcement proceeding is
generally determined by, and will vary in accordance with, the law of the
country where the proceeding is brought. Liberian maritime law provides that a
"preferred mortgage lien" is prior to all claims, other than the following:
o liens against the vessel arising prior in time to the recording
of the preferred mortgage;
o liens for damages arising out of tort;
o liens for unpaid vessel tonnage taxes and annual fees and
penalties payable under the Liberian Maritime Regulations;
o liens for crew wages;
o liens for general average;
o liens for salvage; and
o liens for expenses and fees allowed and costs imposed by courts
of competent jurisdiction.
Isle of Man ship mortgages may be enforced against a vessel that is
physically present in the United States, but the claim under the mortgage would
rank below certain preferred maritime liens as defined under the laws of the
United States, including those for supplies and necessaries provided in the
United States. Since the vessels will be trading throughout the world, we cannot
assure you that, if enforcement proceedings are commenced against a vessel, such
vessel will be located in a jurisdiction having the same procedures and lien
priorities as the Isle of Man or the United States. Other jurisdictions may
provide no legal remedy at all for the enforcement of the mortgages, or may
provide a remedy that is dependent on court proceedings so expensive and time
consuming as to be impractical. Furthermore, certain jurisdictions, unlike the
Isle of Man or the United States, may not permit a vessel to be sold prior to
entry of a judgment, entailing a long waiting time that could result in
increased custodial costs, deterioration in the condition of the vessel and
substantial reduction in her value.
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Since the notes are also secured by a pledge by us of all the stock of the
Owners, enforcement of this pledge, including foreclosure, may provide in effect
an alternative method to transfer control over a vessel and mitigate against a
substantial reduction in her value.
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following disclosure summarizes the material federal income tax
consequences under the Internal Revenue Code of 1986 (the "Code") expected to
result to holders whose old notes are exchanged for new notes in the exchange
offer. This discussion has been prepared with the advice of Graham & James, LLP,
counsel to the Company, and is based upon the provisions of the Code, the
Treasury regulations thereunder, and published rulings and court decisions in
effect as of the date hereof, all of which authorities are subject to change or
differing interpretations, which could apply retroactively. The disclosure below
does not purport to deal with federal income tax consequences applicable to all
categories of investors and is directed solely to holders that hold the notes as
capital assets within the meaning of Section 1221 of the Code, and acquire such
notes for investment and not as a dealer or for resale. This disclosure is not
intended to address every aspect of the federal income tax laws that may be
relevant to holders in light of their particular investment circumstances or to
certain types of holders subject to special treatment under the federal income
tax laws such as banks, insurance companies, holders that will hold the notes as
a position in a "straddle" for tax purposes or as a part of a "synthetic
security" or "conversion transaction" or other integrated investment comprised
of the notes and one or more other investments, holders who own or will own
directly, indirectly or by attribution including stock attribution resulting
from ownership of the Warrants 10.0% or more, by voting power, of Navigator
Holdings common stock or holders that have a functional currency other than the
U.S. dollar. No rulings have been or will be sought from the Internal Revenue
Service (the "IRS") with respect to any of the federal income tax consequences
discussed below, and no assurance can be given that the IRS will not take
contrary positions. Holders and preparers of tax returns should be aware that
under applicable Treasury regulations a provider of advice on specific issues of
law is not considered an income tax return preparer unless the advice is (1)
given with respect to events that have occurred at the time the advice is
rendered and is not given with respect to the consequences of contemplated
actions, and (2) directly relevant to the determination of an entry on a tax
return. Accordingly, holders should consult their own tax advisors and tax
return preparers regarding the preparation of any item on a tax return.
All investors also should consult their own tax advisors in determining the
federal, state, local, foreign and any other tax consequences to them of an
investment in the notes and the purchase, ownership and disposition thereof in
light of their particular investment circumstances or entity status.
The exchange of old notes for new notes pursuant to the exchange offer will
not be treated as an "exchange" for federal income tax purposes because the new
notes will not be considered to differ materially in kind or extent from the old
notes. Rather, the new notes received by a holder will be treated as a
continuation of the old notes in the hands of the holder. As a result, no
material federal income tax consequences will result to holders exchanging old
notes for new notes.
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<PAGE>
CERTAIN ISLE OF MAN TAX CONSEQUENCES
We are prohibited from making, and accordingly will not make, any offer or
invitation to any resident of the Isle of Man to subscribe for new notes.
By acquiring and holding any new notes, the holder will be deemed to
warrant as a continuing warranty that the holder is not resident for taxation
purposes in the Isle of Man unless the holder is acting as a trustee or nominee
for a person not resident for taxation purposes in the Isle of Man or is a Manx
exempt or international company, and accordingly the entry of a Manx address on
the Register of Members of Navigator Gas Transport or Navigator Holdings will
not be permitted unless evidence is produced to the Registrar that the holder is
a trustee or nominee for a person not a resident for taxation purposes in the
Isle of Man or is a Manx exempt or international company.
Special Isle of Man counsel has advised us that, in its opinion, no
withholding taxes will be imposed on payments of principal, interest or any
premium thereon with respect to the new notes and that the holders will not be
subject to any income taxes imposed by the Isle of Man solely as a result of
owning the new notes. Investors should consult their own tax advisors regarding
whether the exchange of the new notes for old notes in conjunction with an
investor's other activities in the Isle of Man may subject an investor to any
taxes imposed by the Isle of Man.
To the extent the Isle of Man in the future does impose a withholding tax
with respect to payments of principal, interest or any premium on the new notes,
we will make the required withholding and be required to gross-up or indemnify
holders for amounts withheld. Pursuant to the indentures, in the event the Isle
of Man does impose a withholding tax with respect to such payments, we are
obligated to take any lawful action to the extent necessary to prevent or avoid
the imposition of any withholding taxes, including changing our jurisdiction of
incorporation or residence. We will not be required to take, or fail to take,
any action (1) if in the opinion of counsel the act or failure to act would
violate applicable law or (2) if in our reasonable opinion the actions necessary
to avoid or prevent imposition of such taxes would be unduly burdensome. For
purposes of clause (2) of the immediately preceding sentence, a requirement to
change our jurisdiction of incorporation or residence will not be treated as
unduly burdensome unless changing our jurisdiction of incorporation or residence
to such other jurisdiction or location would subject us to charges in such other
jurisdiction, including but not limited to taxes imposed on or measured by our
income, receipts, property, assets, capital, sales or value-added.
PLAN OF DISTRIBUTION
Each broker-dealer that receives new notes for its own account pursuant to
the registered exchange offer must acknowledge that it will deliver a prospectus
in connection with any resale of such new notes. This prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of new notes received in exchange for old notes where
such notes were acquired as a result of market-making activities or other
trading activities. We have agreed that, for a period of 180 days after the
Expiration Date, we will make this prospectus, as amended or supplemented,
available to any broker-dealer for use in connection with any such resale. In
addition, until _______ __, 1999, all dealers effecting transactions in the new
notes may be required to deliver a prospectus.
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<PAGE>
We will not receive any proceeds from any sale of new notes by
broker-dealers. New notes received by broker-dealers for their own account
pursuant to a registered exchange offer may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the new notes or a combination of such methods
of resale, at market prices prevailing at the time of resale, at prices related
to such prevailing market prices or at negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer or the purchasers of any such new notes. Any broker-dealer that
resells new notes that were received by it for its own account pursuant to the
exchange offer and any broker or dealer that participates in a distribution of
such new notes and any profit on any such resale of new notes and any commission
or concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The letter of transmittal states that, by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
For a period of 180 days after the Expiration Date we will promptly send
additional copies of this prospectus and any amendment or supplement to this
prospectus to any broker-dealer that requests these documents in the letter of
transmittal. We have agreed to pay all expenses incidental to the exchange
offer, including the expenses of one counsel for the holders of the notes, other
than commissions or concessions of any brokers or dealers and will indemnify the
holders of the notes including any broker-dealers, against certain liabilities,
including liabilities under the Securities Act.
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the new notes in Canada is being made only on a private
placement basis exempt from the requirement that Navigator Gas Transport and
Navigator Holdings prepare and file a prospectus with the securities regulatory
authorities in each province where trades of new notes are effected.
Accordingly, any resale of the new notes in Canada must be made in accordance
with applicable securities laws which will vary depending on the relevant
jurisdiction, and which may require resales to be made in accordance with
available statutory exemptions or pursuant to a discretionary exemption granted
by the applicable Canadian securities regulatory authority. Purchasers are
advised to seek legal advice prior to any resale of the notes.
REPRESENTATIONS OF PURCHASERS
Each purchaser of new notes in Canada who receives a purchase confirmation
will be deemed to represent to Navigator Gas Transport, Navigator Holdings and
the dealer from whom such purchase confirmation is received that:
o the purchaser is entitled under applicable provincial securities
laws to purchase such new notes without the benefit of a
prospectus qualified under such securities laws;
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<PAGE>
o where required by law, that such purchaser is purchasing as
principal and not as agent; and
o such purchaser has reviewed the text above under "Resale
Restrictions."
RIGHTS OF ACTION (ONTARIO PURCHASERS)
The new notes being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario law. As a result, Ontario purchasers must rely on other remedies that
may be available, including common law rights of action for damages or
rescission or rights of action under the civil liability provisions of the U.S.
federal securities laws.
ENFORCEMENT OF LEGAL RIGHTS
All of the directors and officers of Navigator Gas Transport, Navigator
Holdings and the Owners as well as the experts named herein may be located
outside of Canada and, as a result, it may not be possible for Canadian
purchasers to effect service of process within Canada upon Navigator Gas
Transport, Navigator Holdings, the Owners or these persons. All or a substantial
portion of the assets of Navigator Gas Transport, Navigator Holdings, the Owners
and such persons may be located outside of Canada and, as a result, it may not
be possible to satisfy a judgment against Navigator Gas Transport, Navigator
Holdings, the Owners or such persons in Canada or to enforce a judgment obtained
in Canadian courts against Navigator Gas Transport, Navigator Holdings, the
Owners or these persons outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of new notes to whom the Securities Act (British Columbia)
applies is advised that such purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any new
notes acquired by such purchaser pursuant to the offerings. Such report must be
in the form attached to British Columbia Securities Commission Blanket Order BOR
#95/17, a copy of which may be obtained from Navigator Gas Transport. Only one
such report must be filed in respect of new notes acquired on the same date and
under the same prospectus exemption.
TAXATION AND ELIGIBILITY FOR INVESTMENT
Canadian purchasers of new notes should consult their own legal and tax
advisors with respect to the tax consequences of an investment in the new notes
in their particular circumstances and with respect to the eligibility of the new
notes for investment by the purchaser under the relevant Canadian legislation.
RATING
Moody's has rated the old First Priority Notes B1 and the old Second
Priority Existing Notes B3 and Standard & Poor's has rated the old First
Priority Notes B and the old Second Priority Notes CCC+. A security rating is
not a recommendation to buy, sell or hold securities and may be subject to
revision or withdrawal at any time. The ratings of the rating
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<PAGE>
agencies assigned to the notes address the likelihood of the receipt by holders
of the old notes of all distributions to which such holders are entitled. The
ratings assigned to the notes do not represent any assessment of the likelihood
that principal prepayments might differ from those originally anticipated or
address the possibility that holders might suffer a lower than anticipated
yield. In the event that the rating initially assigned to any of the notes is
subsequently lowered for any reason, no person or entity is obligated to provide
any additional support or credit enhancement with respect to such note. The
ratings do not address the possibility that holders of the old notes may suffer
a lower than anticipated yield.
We have not requested a rating on the notes by any rating agencies other
than those described above. However, there can be no assurance as to whether any
other rating agency will rate the notes, or, if it does, what rating would be
assigned by any such other rating agency. A rating on the notes by another
rating agency, if assigned at all, may be lower than the ratings assigned to the
notes by the rating agencies described above.
LEGAL MATTERS
Certain legal matters with respect to the new notes offered hereby will be
passed upon for us, Navigator Holdings and the Manager by Graham & James LLP,
New York, New York and Cains, Douglas, Isle of Man.
EXPERTS
The consolidated financial statements of Navigator Holdings as of December
31, 1997 and 1998 and for the years ended December 31, 1997 and 1998 appearing
in this prospectus and registration statement have been audited by Liebman,
Bruno & Cicero LLP, independent auditors, as set forth in their reports
appearing elsewhere in this prospectus and in the registration statement and are
included in reliance upon these reports given upon the authority of the firm as
experts in accounting and auditing.
GLOSSARY OF SHIPPING TERMS
The following shipping terms are used in this prospectus:
"Ballast" means the time during which a vessel is not employed while en
route to load a cargo.
"Bareboat Charter" means a contract to hire a vessel for a period of time
under which the charterer is responsible for operating the vessel, providing and
paying the captain and crew and paying all associated operating costs of the
vessel during the charter. Also known as a "demise charter."
"Charter" means the hire of a ship for a specified period of time or to
carry a cargo for a fixed fee from a loading port to a discharging port.
"Charterparty" means a contract for a charter.
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"Germanischer Lloyd" means a private organization which has as its purpose
the supervision of vessels during their construction and afterward, in respect
to their seaworthiness and upkeep, and the placing of vessels in "classes"
according to Germanischer Lloyd's rules for each type of vessel.
"Confiscation, Expropriation, Nationalization and Detainment Insurance"
provides insurance for the occurrence of such event due to the carrying of
contraband items on a vessel.
"Contract of Affreightment" means a contract for a series of voyages
involving bulk cargoes.
"Deadweight Tonne" ("dwt") is a unit of a vessel's capacity for cargo, fuel
oil, stores and crew, measured in tons. A vessel's dwt or total deadweight is
the maximum weight the vessel can carry when fully loaded.
"Drug Seizure Insurance" provides coverage for the seizure of a vessel by a
national authority.
"Freight" means the compensation for carriage of cargo.
"General Average" is related to the deliberate sacrifice of property to
save the whole venture.
"Hull and Machinery Insurance" provides cover against total loss of a
vessel, particular average, including partial loss and collision damage, general
average and collision liability.
"Lay-Up" means mooring a ship at a protected anchorage, shutting down
substantially all of its operating systems and taking measures to protect
against corrosion and other deterioration.
"Loss of Hire Hull and Machinery Insurance" provides cover for the loss of
earnings on a vessel after an accident under the hull and machinery policy. This
is a daily indemnity based on the earnings of a vessel.
"Loss of Hire War Risks Insurance" provides cover for the loss of earnings
on a vessel after an insurable incident under the war risks policy. This is a
daily indemnity based on the earnings of a vessel.
"New Building" means a new vessel under construction.
"P&I Clubs" means protection and indemnity clubs, whereby shipowners
jointly pay to receive coverage for third party liability. P&I Clubs are mutual
non-profit associations. As mutual insurers, P&I Club members are both assured
and the providers of the capital necessary to support their P&I Club's
underwriting.
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"Particular Average" means a fortuitous partial loss to the property
insured which is not a general average loss.
"Protection And Indemnity Insurance" and "Freight Demurrage And Defense
Insurance" provide cover for loss of life, personal injury, damage to vessels
and property of third parties and indemnity for legal and contractual liability
as carriers of cargo. These forms of insurance are generally provided to
shipowners by P&I Clubs.
"Special Survey" means the inspection of a vessel by a Germanischer Lloyd
surveyor which takes place at a minimum every four years and at a maximum every
five years.
"Spot Market" means the market for immediate chartering of a vessel.
"Time Charter" means the hire of a ship for a specified period of time. The
owner provides the ship with crew, stores and provisions, ready in all aspects
to load cargo and proceed on a voyage. The charterer pays for bunkering and all
voyage related expenses including canal tolls and port charges.
"Tonne" means a metric ton of 1,000 kilograms.
"Voyage Charter" means a contract of carriage in which the charterer pays
for the use of a ship's cargo capacity for one, or sometimes more than one,
voyage. Under this type of charter, the shipowner pays all the operating costs
of the ship, including bunkers, canal and port changes, pilotage, towage and
ship's agency, while payment for cargo handling charges is subject to agreement
between the parties. Freight is generally paid per unit of cargo, such as a ton,
based on an agreed quantity, or as a lump sum irrespective of the quantity
loaded.
"War Risks Policy" provides cover against the blocking and trapping of a
vessel, confiscation and damage resulting from hostilities, mines, strikes,
riots and civil commotions. However, a vessel subject to this form of insurance
cannot trade in a high risk area without the specific agreement of the insurer
and the payment of additional premiums. Pursuant to this insurance, a total loss
will be declared to have occurred after six months of arrest by a government,
civil war, sabotage, acts of terrorists and mines.
The above shipping terms were supplied by the Dictionary of Shipping
Serials and other sources.
141
***
<PAGE>
Appendix A
CONSOLIDATED FINANCIAL STATEMENTS OF
NAVIGATOR HOLDINGS PLC
A-1
<PAGE>
<TABLE>
<CAPTION>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
December 31,
1998 1997
------------- -------------
<S> <C> <C>
Assets:
Restricted cash $ 207,717,037 $ 254,114,847
Vessels under construction 94,294,488 60,764,194
Deferred financing costs-net 12,491,630 13,316,102
Pre-Paid Marketing Fees-net 861,676 1,665,199
------------- -------------
Total assets $ 315,364,831 $ 329,860,341
============= =============
Liabilities:
Interest payable and other liabilities -- --
10 1/2% First Priority Ship Mortgage Notes Due 2007 217,000,000 217,000,000
12% Second Priority Ship Mortgage Notes Due 2007, net of
discount of $7,156,577 and 7,583,449 79,843,423 79,416,551
------------- -------------
Total liabilities 296,843,423 296,416,551
------------- -------------
Stockholders' equity
Common stock, par value $.01; 3,000,000 shares authorized
2,000,000 shares issued and outstanding 20,000 20,000
Additional paid in capital-Common stock 30,940,000 30,940,000
Additional paid in capital-Warrants 7,740,000 7,740,000
Retained earnings or (deficit) (20,178,592) (5,256,209)
------------- -------------
Total stockholders' equity 18,521,408 33,443,791
------------- -------------
Total liabilities and stockholders' equity $ 315,364,831 $ 329,860,341
============= =============
</TABLE>
The accompanying notes are an integral part of this statement.
A-2
<PAGE>
<TABLE>
<CAPTION>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
For the year ended December 31,
1998 1997
------------ ------------
<S> <C> <C>
Revenue:
Interest income $ 16,356,157 $ 7,201,556
------------ ------------
Total revenue 16,356,157 7,201,556
------------ ------------
Expenses:
Interest expense 28,386,173 11,335,285
Amortization-deferred financing costs 824,472 306,128
Amortization-marketing 803,523 334,801
Amortization-warrants 426,872 156,551
Other expenses 837,500 325,000
------------ ------------
Total expenses 31,278,540 12,457,765
------------ ------------
Net loss (14,922,383) (5,256,209)
Retained deficit, beginning of year (5,256,209) --
------------ ------------
Retained deficit, end of year $(20,178,592) $ (5,256,209)
============ ============
</TABLE>
The accompanying notes are an integral part of this statement.
A-3
<PAGE>
<TABLE>
<CAPTION>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the year ended December 31, 1998 1997
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(14,922,383) $ (5,256,209)
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization expense 2,054,866 797,480
Changes in assets and liabilities:
Increase in prepaid marketing fees -- (2,000,000)
------------ ------------
Net cash used by operating activities (12,867,516) (6,458,729)
------------ ------------
Cash flows from investing activities:
Payments made under vessel construction contract (27,310,800) (44,951,770)
Transaction costs capitalized (13,950,000)
Interest capitalized (6,219,494) (1,862,424)
------------ ------------
Net cash used in investing activities (33,530,294) (60,764,194)
------------ ------------
Cash flows from financing activities:
Issuance of long term debt -- 304,000,000
Warrants discount of second priority notes -- (7,740,000)
Proceeds from capital contribution -- 38,700,000
Payments for financing costs -- (13,622,230)
------------ ------------
Net cash provided by financing activities -- 321,337,770
------------ ------------
Net increase (decrease) in cash (46,397,810) 254,114,847
Restricted cash-beginning of year 254,114,847 --
------------ ------------
Restricted cash-end of year 207,717,036 254,114,847
============ ============
Supplemental data:
Interest paid during the year $ 34,605,667 $ 13,197,709
============ ============
</TABLE>
The accompanying notes are an integral part of this statement.
A-4
<PAGE>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
1. DESCRIPTION OF OPERATION:
Navigator Holdings PLC (the "Company") is an Isle of Man public limited
company. The Company was formed for the purpose of owning 100% of Navigator
Gas Transport PLC (the "Issuer"), issue the Warrants to the Holders of the
Second Priority Notes (see note 3 "Description of Warrants") and make a
sizable equity contribution to the Issuer (see note 6 "Stockholders'
Equity").
Navigator Gas Transport PLC has been formed as an Isle of Man public
limited company for the purpose of establishing, owning and financing five
subsidiaries, Navigator Gas (IOM I-A) Limited, Navigator Gas (IOM I-B)
Limited, Navigator Gas (IOM I-C) Limited, Navigator Gas (IOM I-D) Limited
and Navigator Gas (IOM I-E) Limited (individually referred to as the
"Owner", or collectively, the "Owners"). Each Owner has been formed as an
Isle of Man private limited company for the purpose of building and
operating one of the five semirefrigerated gas carriers (the "Vessels").
The operations of the Issuer will be limited to owning the Owners,
receiving payments under the intercompany note, make payments of interest
and principal on the notes, and fulfilling its obligations under the
indentures, the intercreditor agreement, the letter of credit reimbursement
agreement and the registration agreement. Between the issue date and the
delivery date of each Vessel, the operation of each Owner will consist
solely of entering into commercial arrangements in relation to the future
operation of the Vessels, managing the construction of the Vessels, making
payments of the management fees, paying installments under the building
contracts, fulfilling its obligations under the management agreement, and
guarantee. On and after the delivery of each Vessel, the operation of each
Owner will consist solely of operating, maintaining, insuring and using the
Vessel and conducting activities related thereto, receive payment under
charters, contracts of affreightment and other contracts relating to the
employment of its Vessel, receiving proceeds from the sale (if any) of its
Vessel, making payments of interest and principal on the intercompany notes
and any other permitted indebtedness, making payments of management fees,
fulfilling its obligation under the management agreement and guarantee.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF PRESENTATION
The financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America.
A-5
<PAGE>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
BASIS OF CONSOLIDATION
The accompanying consolidated statements of financial condition include the
accounts of the Company, the Issuer and the Owners. All intercompany
accounts and transactions have been eliminated in consolidation.
VESSELS UNDER CONSTRUCTION
Vessels under construction are capitalized in accordance with contract
payments made to the Builders. Vessels under construction also includes
service of vessel design, technical supervision, structuring and providing
performance bonds, and capitalization of interest incurred during the
period of the vessels' construction.
DEBT ISSUE COSTS
Debt issue costs comprise expenses incurred in connection with the issuance
of ship mortgage notes. Such expenses are being amortized over the life of
the ship mortgage notes using the effective interest method.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The methods and assumptions used in estimating the fair values of financial
instruments are as follows:
RESTRICTED CASH: The carrying value of the guaranteed investment
contract is stated at contract value, which approximates fair value. The
contract is with Pacific Life Insurance, a California life insurance
company. The contract is held in the name of the United States Trust
Company (the "Trustee") on behalf of the Issuer as the Indenture
Trustee.
SHIP MORTGAGE NOTES: Due to the existing market conditions in the
shipping bonds industry, the value of the Ship Mortgage Notes (the
"Notes") was negatively affected causing the Notes to decline in value.
However, due to the instability of the market and the elapsed time
between the date of the Consolidated Statements of Financial Condition
and the date of issuance of the Ship Mortgage Notes, the decline in
value is deemed to be immaterial.
A-6
<PAGE>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ACCOUNTING ESTIMATES
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statement. When recorded, actual results could differ from such
estimates. The most significant assumption and estimate relate to vessels
under construction.
INCOME TAXES
The Company is exempt from United States federal, state and local income
taxes and has been granted exemptions from the statutory 20% tax on profits
required to be assessed against Isle of Man companies.
Certain entities are exempt from U.S. corporate income tax on U.S. source
income from their international shipping operation if (i) their countries
of incorporation exempt shipping operations U.S. persons from income tax
(the "incorporation Test") and (ii) they meet the "Ultimate Owners Test." A
company meets the Ultimate Owners Test if more then 50% of the value of its
stock is ultimately owned by individuals who are residents of a foreign
country that exempts U.S. persons from tax on shipping earnings. The
Company is involved in international shipping operations which meet the
Incorporation Test because the Company is incorporated in the Isle of Man,
which provides the required exemption to U.S. persons involved in shipping
operations, and the Company believes more than 50% of the value of its
outstanding shares is owned by individuals who are residents of countries
which provide the required exemption to U.S. persons involved in shipping
operations. The issue of residence is, however, inherently factual and
cannot be determined.
Based on the foregoing, the Company expects all of its income to remain
exempt from United States income tax. Accordingly, no provision for taxes
has been made in the financial statements.
Nonmonetary Transactions
The transfer of nonmonetary assets to the Company by its shareholders in
exchange for stock are recorded at the transferor's market value of
services performed determined under generally accepted accounting
principals.
A-7
<PAGE>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. SHIP MORTGAGE NOTES:
The Issuer placed, on August 7, 1997, through a private placement,
$217,000,000 aggregate principal amount of 10 1/2% First Priority Ship
Mortgage Notes Due 2007 (the "First Priority Notes") and together with
Navigator Holdings PLC ("Holdings") placed 87,000 Units (the "Units"), each
Unit consisting of one of the Company's 12% Second Priority Ship Mortgage
Notes Due 2007 (a "Second Priority Note" and, together with the First
Priority Notes, the "Notes") in a principal amount of $1,000 and 7.66
Warrants (each a "Warrant"). The Notes are unconditionally and irrevocably
guaranteed by each subsidiary of the Company (collectively, the
"Guarantors"). The Notes will bear interest from August 7, 1997 (the "Issue
Date") until the principal thereof is paid or made available for payment.
Such interest will be payable semi-annually on June 30 and December 31 of
each year, commencing December 31, 1997, to the person in whose name the
relevant First Priority Notes or Second Priority Notes is registered at the
close of business on the preceding June 15 or December 15.
The Notes have priority of payment and are collateralized by (i) an
assignment of each vessel; (ii) an assignment of the pre-funding account
and capitalized interest account held by the Trustee (iii) an assignment of
the Building Contracts and technical supervision agreement; (iv) an
assignment of the commercial management agreement; (v) an assignment of the
management agreement with a Company's affiliate; (vi) an assignment of the
performance bonds; (vii) an assignment of the earnings and issuance
proceeds related to each vessel and (viii) certain other collateral.
DESCRIPTION OF WARRANTS
The Warrants have not been registered under the Securities Act and are
subject to certain restrictions on transfer. Holders of the Warrants and
the shares of Company Common Stock underlying the Warrants will have
certain rights to require the Company to file and have declared effective a
registration statement with respect thereto or to purchase such Warrants
and underlying shares. The Warrants when exercised, will entitle the
holders thereof to acquire an aggregated 666,420 shares of the Company's
Common Stock, representing in aggregated 25% of the shares of the Company's
Common Stock on a fully diluted basis. The Warrants will be reflected on
the balance sheet as a reduction of the Second Priority Notes amortized
over the life of the debt using the Effective Interest Method.
A-8
<PAGE>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ADDITIONAL NOTES
On the interest payment date following the delivery of the first vessel if
cash available for distribution in the Revenue Account, as defined in the
"Indenture Agreement", to the holder of the Second Priority Notes on such
date is insufficient to pay all accrued and unpaid interest on the Second
Priority Note, such interest may be paid through the issuance to the holder
by the Issuer of additional Second Priority Notes having an aggregate
principal amount equal to the deficiency in such available cash; provided
further, however, that the Issuer may not issue more than $20.9 million in
aggregate principal amount of such additional Second Priority Notes.
REDEMPTION
Optional Redemption
Except as set forth below, the Notes are not redeemable at the option of
the Issuer prior to June 30, 2002. On and after such date, the First
Priority Notes and the Second Priority Notes may be redeemed at the option
of the Issuer, in whole or in part, at any time or from time to time, upon
not less than 30 days' nor more than 60 days' prior notice mailed by
first-class mail to each holder's registered address, at the redemption
prices set forth in the table below (expressed as a percentage 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):
Redemption Price
if redeemed during the 12-month period -----------------------------------
commencing on June 30 of the years set First Priority Second Priority
forth below: Notes Notes
---------------------------------------------------------------------------
2002.................................. 105.75% 106.00%
2003.................................. 103.50 104.00
2004.................................. 101.75 102.00
2005 and thereafter................... 100.00 100.00
In addition, at any time and from time to time prior to June 30, 2000, the
Issuer may redeem in the aggregate up to 35% of the original principal
amount of each series of Notes, on a pro rata basis, with the proceeds of
one or more public equity offerings (with the cash proceeds thereof to the
extent actually contributed to the Issuer) following which there exists a
public market, at a redemption price (expressed as a percentage of
principal amount) of 110.5% (in the case of the First Priority Notes) and
112% (in the case of the Second Priority Notes), 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 relevant interest
payment date); provided, however, that at least $100 million aggregate
principal amount of First Priority Notes and $45 million aggregate
principal amount of Second Priority Notes must remain outstanding after
each such redemption.
A-9
<PAGE>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Other than as set forth in the previous paragraph, the First Priority Notes
will prohibit the Issuer from redeeming at the option of the Issuer any
Second Priority Notes while the First Priority Notes are outstanding.
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 Notes of each series will be subject to mandatory redemption in part,
on a pro rata basis, in an aggregate principal amount equal to the
Allocated Principal Amount (as defined in "Builders Performance Bond",
dated August 7, 1997) of the Notes 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 a 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 (as defined in the "Indenture
Agreement", dated August 7, 1997), the Notes of each series 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 Notes 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 issuance proceeds with respect
to such Total Loss and (b) 60 days after such Total Loss was deemed to have
occurred.
DEBT COVENANTS
The Notes include certain covenants that, among other things, limit the
ability of the Issuer and the Owners to incur additional indebtedness, pay
dividends or make certain payments, restrict distribution from Owners, sell
assets, enter into certain mergers and consolidations, incur liens other
than permitted liens and enter into certain transactions with affiliates.
A-10
<PAGE>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Letter of Credit
The Issuer has entered into an Irrevocable Standby Letter of Credit
Agreement (the "Agreement") with the Trustee and funding bank dated August
7, 1997, for $50,000,000. The purpose of this Agreement is to provide
securities for the holders of the mortgage notes regarding the repayment of
principles and interest. The Agreement provides for two types of draws,
interest draws and working capital draws. Under the terms of the Agreement,
a maximum of $45,000,000 has been allocated for interest draws and
$4,500,000 for working capital draws. The draws may only be used in certain
increments and dates throughout the construction and post-delivery periods
of the vessels, as defined in the Agreement. As of December 31, 1998, the
issuer has no outstanding draws under the Agreement.
Interest on the draws is charged at LIBOR plus one and one-quarter percent
(1-1/4%) per annum.
The Issuer is required under the Agreement to pay certain annual fees to
sustain the Agreement. These fees are calculated at (1-1/4%) of the maximum
available line of credit amount. These fees amount to $687,500 and $250,000
for the periods ended December 31, 1998 and 1997, respectively, and have
been included in other expenses on the Consolidated Statement of
Operations. In addition, the funding bank has received an underwriting fee
of $625,000 for the Agreement, which has been capitalized and will be
amortized over the life of the mortgage notes.
4 RESTRICTED CASH:
Restricted Cash is comprised of pre-funding and a capitalized interest
account. These accounts were established in the name and under the control
of the Trustee. The net proceeds of the Notes issued on behalf of the
Company were deposited into the accounts in the form of a guaranteed
investment contract. Restricted cash will be used primarily for the
payments of interest and principal due on the Notes, management fees, and
contract payments to the Builders for the construction of the vessels. At
December 31, 1998 and 1997 the aggregate amount of Restricted Cash was
$207,717,037 and $254,114,847, respectively.
5. CONTINGENCIES AND COMMITMENTS:
Future contractual payments to be made under the construction contracts for
each of the succeeding year ending December 31, until completion are as
follows:
1998 .............................. 27,310,800
1999 .............................. 93,311,900
2000 .............................. 84,208,300
A-11
<PAGE>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. STOCKHOLDERS' EQUITY:
The following companies or individuals combined will represent 100%
ownership of Holdings and their equity contribution to the Issuer:
a) Cambridge Gas Transport Corporation ("CGTC") was issued 1,200,000
shares of Holdings common stock in exchange for acting as arranger
and management services to be performed by the Manager as agent of
CGTC prior to the delivery date of each vessel pursuant to the
Management Agreement. CGTC also made cash contribution to
Holdings of $10,000.
b) Arctic Gas S.A. was issued 200,000 shares of Holdings common stock
in exchange for the vessel design services contributed to the
Company with a cost basis of $10.0 million.
c) GEBAB was issued 200,000 shares of Holdings common stock in
exchange for services contributed to the Company during the
pre-delivery period pursuant to the Technical Supervision
Agreement dated August 7, 1997 and services contributed during the
first six years of the operation under the Technical Management
Agreement dated August 7, 1997. Services with a cost basis of $1.0
million have been contributed to the Company.
d) Xenon Shipping Inc. was issued 200,000 shares of Company's common
stock in exchange for cash contribution to the Company in the
amount of $9.3 million. On September 17, 1998 CGTC acquired 100%
of Xenon Shipping Inc.
e) Tractebel Gas Engineering GmbH ("TGE") was issued 200,000 shares
of Company's common stock in exchange for a cash contribution to
the Company in the amount of $10.0 million and payment by TGE to
acquire the TGE Performance Bond with a cost basis of $650,000.
f) During 1998 CGTC transferred 89,800 shares to various individuals,
in addition, the Company entered into agreements with certain
individuals to transfer an additional 152,667 shares of the
Company's common stock. CGTC retained the voting rights to all
shares.
A-12
<PAGE>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
7. RELATED PARTY TRANSACTIONS:
On August 7, 1997, the following payments were disbursed to certain
stockholders:
a) The amounts of $2.3 million and $2,273,696 were paid to a
stockholder, CGTC, for structuring fees and costs of issuance of
the Notes, respectively.
b) The amount of $2 million, $1 million to a stockholder, Xenon
Shipping Inc., and $1 million to another stockholder, GEBAB, was
paid for their services in developing charter contracts for the
vessels during the pre-delivery period.
8. CONCENTRATION OF CREDIT RISK:
The Company has no sources for the payment of the principal of, and the
interest on the Notes except for the pre-funding and capitalized interest
accounts held by the Trustee. Accordingly, the Company's ability to pay
debt service on the Notes is wholly dependent upon its financial condition,
results of operations and cash flows when the vessels are in operation.
The Company has five vessels under construction, all of which are being
produced under contracts with one shipyard in the People's Republic of
China ("PRC"). The production and delivery of these vessels is subject to
the risk of nonperformance by the shipyard due to political or economic
changes in the PRC, as well as interruption in sea or air transportation in
the area. Although the Company has received various performance guarantees
from the shipyard and its bank to recover its investment in the event of
nonperformance, there can be no conclusive assurance that the
counterparties will perform. Also, the Company's future shipping operations
would be significantly disrupted if such event were to occur.
9. MANAGEMENT AGREEMENTS:
Each of the Owners entered into a Management Agreement with Navigator Gas
Management Limited (an Isle of Man public limited company, the "Manager"),
an affiliate of the Company. The Manager will manage their commercial and
technical operations, including providing administrative services, causing
the compliance of the Owners' covenants in the Notes and monitoring GEBAB's
(through it's subsidiary "MarLink") performance under the Technical
Supervision Agreement, Technical Management Agreement and Commercial
Management Agreement. The Manager shall receive as compensation for its
services the sum of $30,000 per annum per Vessel that has not been accepted
by the related Owner and $120,000 per annum per Vessel that has been
accepted by the related Owner. As of December 31, 1998 and 1997 Management
fee expenses of $150,000 and $75,000, respectively, were included in other
expenses on the Consolidated Statement of Operations and Retained Earnings.
A-13
<PAGE>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
10. REGISTRATION OF THE NOTES:
In connection with the offer of the Notes, the Issuer and the Guarantors
entered into a registration rights agreement for the benefit of the holders
of the Notes. Pursuant thereof, the Issuer and the Guarantors have agreed
to use their best efforts to effect an exchange offer to exchange up to
$304,000,000 in aggregate principal amount of the Notes. As of December 31,
1999, the company has failed to register the Notes and has incurred
additional interest at a rate of 0.5% per annum (the "Additional Interest
Rate") over and above the interest rate set forth in the title of the
Notes. As of December 31, 1998 additional interest expense amounted to
$1,380,666, which is included on the Consolidated Statement of Operations
and Retained Earnings.
A-14
<PAGE>
UNAUDITED
NAVIGATOR HOLDINGS PLC
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
March 31,
<TABLE>
<CAPTION>
1999 1998
---- ----
Assets:
<S> <C> <C>
Restricted cash $ 192,931,326 $ 251,511,714
Vessels under construction 114,642,378 68,944,613
Deferred financing costs-net 12,267,280 13,115,832
Pre-Paid Marketing Fees-net 660,796 1,464,318
--------------- ---------------
Total assets $ 320,501,780 $ 335,036,478
=============== ===============
Liabilities:
Interest payable and other liabilities 8,723,750 8,584,417
10 1/2% First Priority Ship Mortgage Notes Due 2007 217,000,000 217,000,000
12% Second Priority Ship Mortgage Notes Due 2007, net of
discount of $7,038,801 and $7,480,257 79,961,199 79,519,743
--------------- ---------------
Total liabilities 296,961,199 296,519,743
--------------- ---------------
Stockholders' equity
Common stock, par value $.01; 3,000,000 shares authorized
2,000,000 shares issued and outstanding 20,000 20,000
Additional paid in capital-Common stock 30,940,000 30,940,000
Additional paid in capital-Warrants 7,740,000 7,740,000
Retained earnings or (deficit) (23,883,169) (8,767,682)
--------------- ---------------
Total stockholders' equity 14,816,831 29,932,318
--------------- ---------------
Total liabilities and stockholders' equity $ 320,501,780 $ 335,036,478
=============== ===============
</TABLE>
The accompanying notes are an integral part of this statement.
A-15
<PAGE>
UNAUDITED
NAVIGATOR HOLDINGS PLC
CONSOLIDATED STATEMENT OF OPERATIONS AND RETAINED EARNINGS
For the quarter ended March 31,
<TABLE>
<CAPTION>
1999 1998
---- ----
Revenue:
<S> <C> <C>
Interest income $ 3,444,689 $ 4,255,818
-------------- -------------
Total revenue 3,444,689 4,255,818
-------------- -------------
Expenses:
Interest expense 6,545,560 7,194,198
Amortization-deferred financing costs 224,349 200,269
Amortization-marketing 200,881 200,881
Amortization-warrants 154,524 103,192
Other expenses 60,701 68,750
-------------- -------------
Total expenses 7,186,015 7,767,290
-------------- -------------
Net loss (3,741,325) (3,511,473)
Retained deficit, beginning of quarter (20,141,844) (5,256,209)
-------------- -------------
Retained deficit, end of quarter $ (23,883,169) $ (8,767,682)
============== =============
</TABLE>
The accompanying notes are an integral part of this statement.
A-16
<PAGE>
UNAUDITED
NAVIGATOR HOLDINGS PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
For the quarter ended March 31,
<TABLE>
<CAPTION>
1999 1998
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net loss $ (3,741,325) $ (3,511,473)
Adjustments to reconcile net income to net cash provided
by operating activities:
Amortization expense 579,754 504,342
Changes in assets and liabilities:
Increase in interest payable and other liabilities 8,723,750 8,584,417
------------- -------------
Net cash used by operating activities 5,562,178 5,577,286
------------- -------------
Cash flows from investing activities:
Payments made under vessels construction contract (18,207,200) (6,827,700)
Interest capitalized (2,140,690) (1,352,719)
------------- -------------
Net cash used in investing activities (20,347,890) (8,180,419)
------------- --------------
Net decrease in cash (14,785,712) (2,603,133)
Restricted cash-beginning of quarter 207,717,037 254,114,847
------------- --------------
Restricted cash-end of quarter 192,931,325 251,511,714
============= ==============
Supplemental data:
Interest paid during the quarter $ - $ -
============= ==============
</TABLE>
The accompanying notes are an integral part of this statement.
A-17
<PAGE>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. DESCRIPTION OF OPERATION:
Navigator Holdings PLC (the "Company") is an Isle of Man public limited
company. The Company was formed for the purpose of owning 100% of Navigator
Gas Transport PLC (the "Issuer"), issue the Warrants to the Holders of the
Second Priority Notes (see note 3 "Description of Warrants") and make a
sizable equity contribution to the Issuer (see note 6 "Stockholders'
Equity").
Navigator Gas Transport PLC has been formed as an Isle of Man public
limited company for the purpose of establishing, owning and financing five
subsidiaries, Navigator Gas (IOM I-A) Limited, Navigator Gas (IOM I-B)
Limited, Navigator Gas (IOM I-C) Limited, Navigator Gas (IOM I-D) Limited
and Navigator Gas (IOM I-E) Limited (individually referred to as the
"Owner", or collectively, the "Owners"). Each Owner has been formed as an
Isle of Man private limited company for the purpose of building and
operating one of the five semirefrigerated gas carriers (the "Vessels").
The operations of the Issuer will be limited to owning the Owners,
receiving payments under the intercompany note, make payments of interest
and principal on the notes, and fulfilling its obligations under the
indentures, the intercreditor agreement, the letter of credit reimbursement
agreement and the registration agreement. Between the issue date and the
delivery date of each Vessel, the operation of each Owner will consist
solely of entering into commercial arrangements in relation to the future
operation of the Vessels, managing the construction of the Vessels, making
payments of the management fees, paying installments under the building
contracts, fulfilling its obligations under the management agreement, and
guarantee. On and after the delivery of each Vessel, the operation of each
Owner will consist solely of operating, maintaining, insuring and using the
Vessel and conducting activities related thereto, receive payment under
charters, contracts of affreightment and other contracts relating to the
employment of its Vessel, receiving proceeds from the sale (if any) of its
Vessel, making payments of interest and principal on the intercompany notes
and any other permitted indebtedness, making payments of management fees,
fulfilling its obligation under the management agreement and guarantee.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF PRESENTATION
---------------------
The financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America.
A-18
<PAGE>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
BASIS OF CONSOLIDATION
----------------------
The accompanying consolidated statements of financial condition include the
accounts of the Company, the Issuer and the Owners. All intercompany
accounts and transactions have been eliminated in consolidation.
VESSELS UNDER CONSTRUCTION
--------------------------
Vessels under construction are capitalized in accordance with contract
payments made to the Builders. Vessels under construction also includes
service of vessel design, technical supervision, structuring and providing
performance bonds, and capitalization of interest incurred during the
period of the vessels' construction.
DEBT ISSUE COSTS
----------------
Debt issue costs comprise expenses incurred in connection with the issuance
of ship mortgage notes. Such expenses are being amortized over the life of
the ship mortgage notes using the effective interest method.
FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------
The methods and assumptions used in estimating the fair values of financial
instruments are as follows:
RESTRICTED CASH: The carrying value of the guaranteed investment
contract is stated at contract value, which approximates fair value. The
contract is with Pacific Life Insurance, a California life insurance
company. The contract is held in the name of the United States Trust
Company (the "Trustee") on behalf of the Issuer as the Indenture
Trustee.
SHIP MORTGAGE NOTES: The carrying value of the Ship Mortgage Notes (the
"Notes") approximates fair value as of March 31, 1998 based upon similar
financing terms and maturities. As of March 31, 1999, the value of the
Notes was negatively affected causing the Notes to decline in value.
However, due to the instability of the market and the elapsed time
between the date of the consolidated balance sheet and the date of
issuance of the Notes, the decline in value is deemed to be immaterial.
A-19
<PAGE>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ACCOUNTING ESTIMATES
--------------------
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statement. When recorded, actual results could differ from such
estimates. The most significant assumption and estimate relate to vessels
under construction.
INCOME TAXES
------------
The Company is exempt from United States federal, state and local income
taxes and has been granted exemptions from the statutory 20% tax on profits
required to be assessed against Isle of Man companies.
Certain entities are exempt from U.S. corporate income tax on U.S. source
income from their international shipping operation if (i) their countries
of incorporation exempt shipping operations U.S. persons from income tax
(the "Incorporation Test") and (ii) they meet the "Ultimate Owners Test." A
company meets the Ultimate Owners Test if more then 50% of the value of its
stock is ultimately owned by individuals who are residents of a foreign
country that exempts U.S. persons from tax on shipping earnings. The
Company is involved in international shipping operations which meet the
Incorporation Test because the Company is incorporated in the Isle of Man,
which provides the required exemption to U.S. persons involved in shipping
operations, and the Company believes more than 50% of the value of its
outstanding shares is owned by individuals who are residents of countries
which provide the required exemption to U.S. persons involved in shipping
operations. The issue of residence is, however, inherently factual and
cannot be determined.
Based on the foregoing, the Company expects all of its income to remain
exempt from United States income tax. Accordingly, no provision for taxes
has been made in the financial statements.
Nonmonetary Transactions
------------------------
The transfer of nonmonetary assets to the Company by its shareholders in
exchange for stock are recorded at the transferor's market value of
services performed determined under generally accepted accounting
principals.
A-20
<PAGE>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. SHIP MORTGAGE NOTES:
The Issuer placed, on August 7, 1997, through a private placement,
$217,000,000 aggregate principal amount of 10 1/2% First Priority Ship
Mortgage Notes Due 2007 (the "First Priority Notes") and together with
Navigator Holdings PLC ("Holdings") placed 87,000 Units (the "Units"), each
Unit consisting of one of the Company's 12% Second Priority Ship Mortgage
Notes Due 2007 (a "Second Priority Note" and, together with the First
Priority Notes, the "Notes") in a principal amount of $1,000 and 7.66
Warrants (each a "Warrant"). The Notes are unconditionally and irrevocably
guaranteed by each subsidiary of the Company (collectively, the
"Guarantors"). The Notes will bear interest from August 7, 1997 (the "Issue
Date") until the principal thereof is paid or made available for payment.
Such interest will be payable semi-annually on June 30 and December 31 of
each year, commencing December 31, 1997, to the person in whose name the
relevant First Priority Notes or Second Priority Notes is registered at the
close of business on the preceding June 15 or December 15.
The Notes have priority of payment and are collateralized by (i) an
assignment of each vessel; (ii) an assignment of the pre-funding account
and capitalized interest account held by the Trustee (iii) an assignment of
the Building Contracts and technical supervision agreement; (iv) an
assignment of the commercial management agreement; (v) an assignment of the
management agreement with a Company's affiliate; (vi) an assignment of the
performance bonds; (vii) an assignment of the earnings and issuance
proceeds related to each vessel and (viii) certain other collateral.
DESCRIPTION OF WARRANTS
-----------------------
The Warrants have not been registered under the Securities Act and are
subject to certain restrictions on transfer. Holders of the Warrants and
the shares of Company Common Stock underlying the Warrants will have
certain rights to require the Company to file and have declared effective a
registration statement with respect thereto or to purchase such Warrants
and underlying shares. The Warrants when exercised, will entitle the
holders thereof to acquire an aggregated 666,420 shares of the Company's
Common Stock, representing in aggregated 25% of the shares of the Company's
Common Stock on a fully diluted basis. The Warrants will be reflected on
the balance sheet as a reduction of the Second Priority Notes amortized
over the life of the debt using the Effective Interest Method.
A-21
<PAGE>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ADDITIONAL NOTES
----------------
On the interest payment date following the delivery of the first vessel if
cash available for distribution in the Revenue Account, as defined in the
"Indenture Agreement", to the holder of the Second Priority Notes on such
date is insufficient to pay all accrued and unpaid interest on the Second
Priority Note, such interest may be paid through the issuance to the holder
by the Issuer of additional Second Priority Notes having an aggregate
principal amount equal to the deficiency in such available cash; provided
further, however, that the Issuer may not issue more than $20.9 million in
aggregate principal amount of such additional Second Priority Notes.
REDEMPTION
----------
Optional Redemption
Except as set forth below, the Notes are not redeemable at the option of
the Issuer prior to June 30, 2002. On and after such date, the First
Priority Notes and the Second Priority Notes may be redeemed at the option
of the Issuer, in whole or in part, at any time or from time to time, upon
not less than 30 days' nor more than 60 days' prior notice mailed by
first-class mail to each holder's registered address, at the redemption
prices set forth in the table below (expressed as a percentage 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):
Redemption Price
if redeemed during the 12-month period -----------------------------------
commencing on June 30 of the years set First Priority Second Priority
forth below: Notes Notes
---------------------------------------------------------------------------
2002.................................. 105.75% 106.00%
2003.................................. 103.50 104.00
2004.................................. 101.75 102.00
2005 and thereafter................... 100.00 100.00
In addition, at any time and from time to time prior to June 30, 2000, the
Issuer may redeem in the aggregate up to 35% of the original principal
amount of each series of Notes, on a pro rata basis, with the proceeds of
one or more public equity offerings (with the cash proceeds thereof to the
extent actually contributed to the Issuer) following which there exists a
public market, at a redemption price (expressed as a percentage of
principal amount) of 110.5% (in the case of the First Priority Notes) and
112% (in the case of the Second Priority Notes), 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 relevant interest
payment date); provided, however, that at least $100 million aggregate
principal amount of First Priority Notes and $45 million aggregate
principal amount of Second Priority Notes must remain outstanding after
each such redemption.
A-22
<PAGE>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Other than as set forth in the previous paragraph, the First Priority Notes
will prohibit the Issuer from redeeming at the option of the Issuer any
Second Priority Notes while the First Priority Notes are outstanding.
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 Notes of each series will be subject to mandatory redemption in part,
on a pro rata basis, in an aggregate principal amount equal to the
Allocated Principal Amount (as defined in "Builders Performance Bond",
dated August 7, 1997) of the Notes 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 a 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 (as defined in the "Indenture
Agreement", dated August 7, 1997), the Notes of each series 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 Notes 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 issuance proceeds with respect
to such Total Loss and (b) 60 days after such Total Loss was deemed to have
occurred.
DEBT COVENANTS
--------------
The Notes include certain covenants that, among other things, limit the
ability of the Issuer and the Owners to incur additional indebtedness, pay
dividends or make certain payments, restrict distribution from Owners, sell
assets, enter into certain mergers and consolidations, incur liens other
than permitted liens and enter into certain transactions with affiliates.
A-23
<PAGE>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Letter of Credit
----------------
The Issuer has entered into an Irrevocable Standby Letter of Credit
Agreement (the "Agreement") with the Trustee and funding bank dated August
7, 1997, for $50,000,000. The purpose of this Agreement is to provide
securities for the holders of the mortgage notes regarding the repayment of
principles and interest. The Agreement provides for two types of draws,
interest draws and working capital draws. Under the terms of the Agreement,
a maximum of $45,000,000 has been allocated for interest draws and
$4,500,000 for working capital draws. The draws may only be used in certain
increments and dates throughout the construction and post-delivery periods
of the vessels, as defined in the Agreement. As of December 31, 1998, the
issuer has no outstanding draws under the Agreement.
Interest on the draws is charged at LIBOR plus one and one-quarter percent
(1-1/4%) per annum.
The Issuer is required under the Agreement to pay certain annual fees to
sustain the Agreement. These fees are calculated at (1-1/4%) of the maximum
available line of credit amount. These fees amount to $0 and $31,250 for
the quarter ended March 31, 1999 and 1998, respectively, and have been
included in other expenses on the Consolidated Statement of Operations. In
addition, the funding bank has received an underwriting fee of $625,000 for
the Agreement, which has been capitalized and will be amortized over the
life of the mortgage notes.
4 RESTRICTED CASH:
Restricted Cash is comprised of pre-funding and a capitalized interest
account. These accounts were established in the name and under the control
of the Trustee. The net proceeds of the Notes issued on behalf of the
Company were deposited into the accounts in the form of a guaranteed
investment contract. Restricted cash will be used primarily for the
payments of interest and principal due on the Notes, management fees, and
contract payments to the Builders for the construction of the vessels. At
March 31, 1999 and 1998 the aggregate amount of Restricted Cash was
$192,931,326 and $251,511,714, respectively.
5. CONTINGENCIES AND COMMITMENTS:
Future contractual payments to be made under the construction contracts for
each of the succeeding year ending March 31, until completion are as
follows:
---------------------------------------
1999 38,690,300
---------------------------------------
2000 109,243,200
---------------------------------------
2001 50,069,800
---------------------------------------
A-24
<PAGE>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. STOCKHOLDERS' EQUITY:
The following companies or individuals combined will represent 100%
ownership of Holdings and their equity contribution to the Issuer:
a) Cambridge Gas Transport Corporation ("CGTC") was issued 1,200,000
shares of Holdings common stock in exchange for acting as
arranger and management services to be performed by the Manager
as agent of CGTC prior to the delivery date of each vessel
pursuant to the Management Agreement. CGTC in addition made cash
contribution to Holdings of $10,000.
b) Arctic Gas S.A. was issued 200,000 shares of Holdings common
stock in exchange for the vessel design services contributed to
the Company with a cost basis of $10.0 million.
c) GEBAB was issued 200,000 shares of Holdings common stock in
exchange for services contributed to the Company during the
pre-delivery period pursuant to the Technical Supervision
Agreement dated August 7, 1997 and services contributed during
the first six years of the operation under the Technical
Management Agreement dated August 7, 1997. Services with a cost
basis of $1.0 million have been contributed to the Company.
d) Xenon Shipping Inc. was issued 200,000 shares of Company's common
stock in exchange for cash contribution to the Company in the
amount of $9.3 million. On September 17, 1998 CGTC acquired 100%
of Xenon Shipping Inc.
e) Tractebel Gas Engineering GmbH ("TGE") was issued 200,000 shares
of Company's common stock in exchange for a cash contribution to
the Company in the amount of $10.0 million and payment by TGE to
acquire the TGE Performance Bond with a cost basis of $650,000.
f) During 1998 CGTC transferred 89,800 shares to various
individuals, in addition, the Company entered into agreements
with certain other individuals to transfer an additional 152,667
shares of the Company's common stock. CGTC retained the voting
rights to all shares.
A-25
<PAGE>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
7. RELATED PARTY TRANSACTIONS:
On August 7, 1997, the following payments were disbursed to certain
stockholders:
a) The amounts of $2.3 million and $2,273,696 were paid to a
stockholder, CGTC, for structuring fees and costs of issuance of
the Notes, respectively.
b) The amount of $2 million, $1 million to a stockholder, Xenon
Shipping Inc., and $1 million to another stockholder, GEBAB, was
paid for their services in developing charter contracts for the
vessels during the pre-delivery period.
8. CONCENTRATION OF CREDIT RISK:
The Company has no sources for the payment of the principal of, and the
interest on the Notes except for the pre-funding and capitalized interest
accounts held by the Trustee. Accordingly, the Company's ability to pay
debt service on the Notes is wholly dependent upon its financial condition,
results of operations and cash flows when the vessels are in operation.
The Company has five vessels under construction, all of which are being
produced under contracts with one shipyard in the People's Republic of
China ("PRC"). The production and delivery of these vessels is subject to
the risk of nonperformance by the shipyard due to political or economic
changes in the PRC, as well as interruption in sea or air transportation in
the area. Although the Company has received various performance guarantees
from the shipyard and its bank to recover its investment in the event of
nonperformance, there can be no conclusive assurance that the
counterparties will perform. Also, the Company's future shipping operations
would be significantly disrupted if such event were to occur.
9. MANAGEMENT AGREEMENTS:
Each of the Owners entered into a Management Agreement with Navigator Gas
Management Limited (an Isle of Man public limited company, the "Manager"),
an affiliate of the Company. The Manager will manage their commercial and
technical operations, including providing administrative services, causing
the compliance of the Owners' covenants in the Notes and monitoring GEBAB's
(through it's subsidiary "MarLink") performance under the Technical
Supervision Agreement, Technical Management Agreement and Commercial
Management Agreement. The Manager shall receive as compensation for its
services the sum of $30,000 per annum per Vessel that has not been accepted
by the related Owner and $120,000 per annum per Vessel that has been
accepted by the related Owner. As of the quarter ended March 31, 1999 and
1998 Management fee expenses of $37,500 and $37,500, respectively, were
included in other expenses on the Consolidated Statement of Operations and
Retained Earnings.
A-26
<PAGE>
NAVIGATOR HOLDINGS PLC
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (CONTINUED)
10. REGISTRATION OF THE NOTES:
In connection with the offer of the Notes, the Issuer and the Guarantors
entered into a registration rights agreement for the benefit of the holders
of the Notes. Pursuant thereof, the Issuer and the Guarantors have agreed
to use their best efforts to effect an exchange offer to exchange up to
$304,000,000 in aggregate principal amount of the Notes. As of March 31,
1999 and 1998, the company failed to register the Notes and has incurred
additional interest at a rate of 0.5% per annum (the "Additional Interest
Rate") over and above the interest rate set forth in the title of the
Notes. As of the quarter ended March 31, 1999 and 1998 additional interest
expense amounted to $380,000 and $240,666, respectively, which is included
on the Consolidated Statement of Operations and Retained Earnings.
A-27
<PAGE>
Appendix B
ISLE OF MAN SUPPLEMENTARY SCHEDULE
1. Set out below is the contents of the memorandum of Navigator Gas
Transport PLC, together with the names, descriptions and addresses of the
signatories and the number of shares submitted by them respectively.
THE COMPANIES ACTS 1931 to 1993
ISLE OF MAN
A COMPANY LIMITED BY SHARES
MEMORANDUM OF ASSOCIATION
OF
NAVIGATOR GAS TRANSPORT PLC
The name of the company is:
1. NAVIGATOR GAS TRANSPORT PLC
2. The company is a public company.
3. The liability of the members is limited.
4. Restrictions, if any, on the exercise of the rights, powers and
privileges of the company: None unless and until decided upon by
Special Resolution of the company in accordance with Section 6 of
the Companies Act 1986.
5. The Share Capital of the company is US$2,000 divided into 2,000
Ordinary shares of US $1.00 each.
We, the subscribers to this memorandum of association
(a) wish to be formed into a company pursuant to this memorandum;
(b) agree to take the number of shares shown opposite my name;
(c) declare that all the requirements of the Companies Acts 1931 to
1993 in respect of matters relating to registration and of matters
precedent and incidental thereto have been complied with.
B-1
<PAGE>
- ------------------------------------------------------------------------------
Name and address Signatures Number of Shares Taken
of subscriber
- ------------------------------------------------------------------------------
EDWARD HAROLD ONE
CHARLES CAIN
15-19 Athol Street
Douglas
Isle of Man
JOHN MICHAEL KILLIP ONE
15-19 Athol Street
Douglas
Isle of Man
- ------------------------------------------------------------------------------
Dated this 17 day of June 1997
Witness to the above signature
TERRY BURNS
15-19 Athol Street
Douglas
Isle of Man
2. No founders' or management shares are comprised in the capital of Navigator
Gas Transport.
3. The articles of association of Navigator Gas Transport contain the following
provision relating to the number of shares which are required to be held by a
director in order for him to qualify as a director:
"The shareholding qualifications for Directors may be fixed by the Company
in general meeting, and unless so fixed no qualification shall be required."
In addition such articles contain the following provision in relation to
Directors' remuneration:
"The remuneration of the Directors shall from time to time be determined by
the Company in general meeting..."
A Managing Director of Navigator Gas Transport shall be remunerated upon
such terms as the Directors determine.
4. The names, descriptions and addresses of the Directors of Navigator Gas
Transport are as follows:
Kenneth Lawill Columbia 14 Stanton Drive
Stamford, CT 06902
USA
B-2
<PAGE>
Mr. Columbia is an American citizen. He has extensive experience in
transportation-related positions and extensive administrative and managerial
experience in shipping.
Nunzio Calogero Li Pomi 750 Lexington Avenue
30th Floor
New York
New York 10022
USA
Mr. Li Pomi is an Italian citizen and currently resides in the United
States. He is presently employed as the Controller of Cambridge Fund Management.
Shaun Ferguson Cairns 1 Castle Street
Castletown
Isle of Man IM9 1LK
Mr. Cairns is a British citizen. He is a chartered accountant. He is
presently serving as the Chief Executive Officer of Wychwood Trust Limited, Isle
of Man.
5. No subscription lists will be maintained in respect of the exchange offer.
6. No options in respect of shares or debentures relating to Navigator Gas
Transport have been issued.
7. The following amounts of shares and debentures which within the two preceding
years have been issued, or agreed to be issued as fully or partly paid up
otherwise than in cash, and in the latter case, the extent to which they are so
paid up, and in either case the consideration for which those shares or
debentures have been issued or are proposed or intended to be issued are as set
out below:
Cambridge Gas Transport Corporation 1,200,000
GEBAB 200,000
Arctic Gas S.A. 200,000
Tractebel Gas Engineering GmbH 200,000
Xenon Shipping Inc. 200,000
8. The following amounts of commission have been paid within the two preceding
years, or is payable by Navigator Gas Transport in connection with the
subscription of shares or debentures:
B-3
<PAGE>
Amounts
(Millions)
----------
Structuring fee 2.3
Initial purchases, discounts and commissions 10.6
9. The estimated amount of preliminary expenses paid by Navigator Gas Transport
are as follows:
Amounts
(Millions)
----------
Initial Payment to Builders $32.7
Structuring Fee 2.3
Debt Issuance Costs 13.6
Pre-paid Marketing Fees 2.0
Exchange Offer Expenses (estimated) .45
10. The amount or benefit paid or given within the two preceding years or
intended to be paid or given to any promoter, and the consideration for the
payment or the giving of the benefit is as follows:
[None]
11. Navigator Gas Transport has entered into the following contracts which are
or may be material:
o Indenture, dated as of August 1, 1997, among Navigator Gas
Transport, Navigator Holdings PLC ("Holdings"), the Owners and
United States Trust Company of New York (the "First Priority
Trustee"), in respect of the 10 1/2% First Priority Ship Mortgage
Notes due 2007.
o Indenture, dated as of August 1, 1997, among Navigator Gas
Transport, Holdings, the Owners and The Chase Manhattan Bank of
New York (the "Second Priority Trustee"), in respect of the 12%
Secondary Priority Ship Mortgage Notes due 2007.
o Intercreditor Agreement, dated as of August 1, 1997 between the
First Priority Trustee, the Second Priority Trustee, Navigator
Gas Transport, the Owners and Holdings.
B-4
<PAGE>
o Letter of Credit Reimbursement Agreement, dated as of August 7,
1997 among Navigator Gas Transport, Holdings, the Owners, Credit
Suisse First Boston and certain banks named therein.
o Intercompany Note dated as of August 7, 1997, made by the Owners
to Navigation Gas Transport.
o Letter of Credit dated as of August 7, 1997, issued by Credit
Suisse First Boston in favor of the Collateral Agent.
o Triparty Agreement dated as of August 1, 1997 among Holdings,
China Shipbuilding Trading Company, Limited Jiangnan Shipyard and
Tractebel.
o Management Agreement, dated as of August 1, 1997, between
Navigator Gas Management Limited, the Owners, Navigator Gas
Transport and Holdings.
o Registration Rights Agreement, dated as of July 31, 11997 among
Credit Suisse First Boston Corporation, Cambridge Partners,
L.L.C. and Navigator Gas Transport.
o Global First Priority Note dated August 7, 1997 in the amount of
$75,000,000.
o Global First Priority Note dated August 7, 1997 in the amount of
$67,000,000.
o Global First Priority Note dated August 7, 1997 in the amount of
$67,000,000.
o Global Second Priority Note in the amount of $87,000,000.
12. The names and addresses of the auditors of Navigator Gas Transport are as
follows:
Andrew H. Sharpe
1 Castle Street
Castletown
Isle of Man IM9 1LF
13. Navigator Gas Transport commenced business on June 17, 1997.
PART II Auditors' Report.
Isle of Man auditors' reports to be inserted
B-5
<PAGE>
The documents which have been delivered to the Registrar of Companies with
a copy of this document for registration are as follows:
(a) the consents of each expert, Cains, Isle of Man and Graham &
James, LLP, New York;
(b) the material contracts referred to in Part I paragraph 11 above;
(c) Auditors statement of adjustments.
NOTE: THIS SUPPLEMENTARY SCHEDULE IS BASED ON SCHEDULE 4 TO THE COMPANIES ACT
1931. IT WILL REQUIRE ADDITION AND/OR DELETION AND AMENDMENT IN ORDER TO ENSURE
STATUTORY COMPLIANCE.
B-6
<PAGE>
We have not authorized any person to give you any information or to make
any representations about the exchange offer other than those contained in this
prospectus. If you are given any information or representations that are not
discussed in this prospectus, you must not rely on that information or those
representations. This prospectus is not an offer to sell or exchange or a
solicitation of an offer to buy or exchange any securities other than the
securities to which it relates. In addition, this prospectus is not an offer to
sell or exchange or the solicitation of an offer to buy or exchange those
securities in any jurisdiction in which the offer or solicitation is not
authorized, or in which the person making the offer or solicitation is not
qualified to do so, or to any person to whom it is unlawful to make an offer or
solicitation. The delivery of this prospectus and an exchange made under this
prospectus do not, under any circumstances, mean that there has not been any
change in our affairs since the date of this prospectus or that information
contained in this prospectus is correct as of any time subsequent to its date.
Until ________ __, 1999 (90 days following the date of this prospectus),
all dealers effecting transactions in the new notes, whether or not
participating in the exchange offer, may be required to deliver a prospectus.
$304,000,000
NAVIGATOR GAS TRANSPORT PLC
$217,000,000 10 1/2% First Priority Ship Mortgage Notes Due 2007
and
$87,000,000 12% Second Priority Ship Mortgage Notes Due 2007
PROSPECTUS
June __, 1999
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
NAVIGATOR GAS TRANSPORT PLC ("NAVIGATOR GAS TRANSPORT"), NAVIGATOR GAS (IOM I-A)
LIMITED, NAVIGATOR GAS (IOM I-B) LIMITED, NAVIGATOR GAS (IOM I-C) LIMITED,
NAVIGATOR GAS (IOM I-D) LIMITED AND NAVIGATOR GAS (IOM I-E) LIMITED (EACH, AN
"OWNER" AND TOGETHER WITH NAVIGATOR GAS TRANSPORT, THE "COMPANIES")
Each of the Companies is a corporation incorporated under the laws of
the Isle of Man. Section 151 of the Isle of Man Companies Act 1931 provides that
any provision (whether contained in the articles of association of the
corporation or elsewhere) exempting any director, officer or auditor
(collectively, "Officer") or indemnifying him or her against any liability which
would attach to him or her in relation to any negligence, default, breach of
duty or breach of trust is void. However, Section 151 also provides that an Isle
of Man corporation may indemnify any Officer against any liability incurred by
him or her in defending any proceedings, whether civil or criminal, in which
judgment is given in his or her favor or in which he or she is acquitted or in
connection with any application under Section 337 of the Isle of Man Companies
Act 1931 in which relief is granted by a court. Section 337 provides that, if in
any proceedings for negligence, default, breach of duty or breach of trust
against any Officer it appears to the court hearing the case that the person is
or may be liable in respect of the negligence, default, breach of duty or breach
of trust, but that he or she has acted honestly and reasonably and that, having
regard to all the circumstances of the case, including those connected with his
appointment, he or she ought fairly be excused, that court may relieve him or
her either wholly or partly his or her liability on such terms as the court
thinks fit. Additionally, under Section 337, where any Officer has reason to
believe that any claim will or might be made against him or her, he or she may
apply to court for relief as if an action had already been brought against him.
II-1
<PAGE>
Subject to the foregoing, an Isle of Man company has the power to
purchase and maintain insurance on behalf of an Officer against any liability
alleged against him or her for negligence, default, breach of duty or breach of
trust.
Article 126 of the Articles of Association of each of the Companies
provides for indemnification of directors and officers as follows:
Every director or other officer of the Company shall be entitled to be
indemnified out of the assets of the Company against all losses or
liabilities (including any such liability as is mentioned in paragraph (c)
of the proviso to Section 151 of the Companies Act 1931), which he may
sustain or incur in or about the execution of the duties of his office or
otherwise in relation thereto, and no director or other officer shall be
liable for any loss, damage or misfortune which may happen to or be
incurred by the Company in the execution of the duties of his office or in
relation thereto. But this Article shall only have effect insofar as its
provisions are not avoided by the said section.
The effectiveness of such article is subject to the provisions of
Section 151 of the Isle of Man Companies Act 1931 as discussed above.
II-2
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) EXHIBITS
3.1 Memorandum and Articles of Association of
Navigator Gas Transport PLC, incorporated by
reference to Exhibit 3.1 of the registrant's Form
F-4, File No. 333-36111, filed with the SEC on
September 22, 1997.
3.2 Memorandum and Articles of Association of
Navigator Gas (IOM I-A) Limited, incorporated by
reference to Exhibit 3.2 of the registrant's
Form F-4, File No. 333-36111, filed with the SEC
on September 22, 1997
3.3 Memorandum and Articles of Association of
Navigator Gas (IOM I-B) Limited, incorporated by
reference to Exhibit 3.3 of the registrant's Form
F-4, File No. 333-36111, filed with the SEC on
September 22, 1997.
3.4 Memorandum and Articles of Association of
Navigator Gas (IOM I-C) Limited, incorporated by
reference to Exhibit 3.4 of the registrant's Form
F-4, File No. 333-36111, filed with the SEC on
September 22, 1997.
3.5 Memorandum and Articles of Association of
Navigator Gas (IOM I-D) Limited, incorporated by
reference to Exhibit 3.5 of the registrant's Form
F-4, File No. 333-36111, filed with the SEC on
September 22, 1997.
3.6 Memorandum and Articles of Association of
Navigator Gas (IOM I-E) Limited, incorporated by
reference to Exhibit 3.6 of the registrant's Form
F-4, File No. 333-36111, filed with the SEC on
September 22, 1997.
4.1 Indenture, dated as of August 1, 1997, among
Navigator Gas Transport, Navigator Holdings PLC
("Holdings"), the Owners and United States Trust
Company of New York (the "First Priority
Trustee"), in respect of the 10 1/2% First
Priority Ship Mortgage Notes due 2007,
incorporated by reference to Exhibit 4.1 of the
registrant's Form F-4, File No. 333-36111, filed
with the SEC on September 22, 1997.
4.2 Indenture, dated as of August 1, 1997, among
Navigator Gas Transport, Holdings, the Owners and
The Chase Manhattan Bank of New York (the "Second
Priority Trustee"), in respect of the 12% Second
Priority Ship Mortgage Notes due 2007,
incorporated by reference to Exhibit 4.2 of the
registrant's Form F-4, File No. 333-36111, filed
with the SEC on September 22, 1997.
4.3 Issue of One Debenture, dated as of August 1,
1997, between Navigator Gas (IOM I-A) Limited and
the Collateral Agent, United States Trust Company
of New York, incorporated by reference to Exhibit
4.3 of the registrant's Form F-4, File No.
333-36111, filed with the SEC on September 22,
1997.
4.4 Issue of One Debenture, dated as of August 1,
1997, between Navigator Gas (IOM I-B) Limited and
the Collateral Agent, incorporated by reference to
Exhibit 4.4 of the registrant's Form F-4, File No.
333-36111, filed with the SEC on September 22,
1997.
II-3
<PAGE>
4.5 Issue of One Debenture, dated as of August 1,
1997, between Navigator Gas (IOM I-C) Limited and
the Collateral Agent, incorporated by reference to
Exhibit 4.5 of the registrant's Form F-4, File No.
333-36111, filed with the SEC on September 22,
1997.
4.6 Issue of One Debenture, dated as of August 1,
1997, between Navigator Gas (IOM 1-D) Limited and
the Collateral Agent, incorporated by reference to
Exhibit 4.6 of the registrant's Form F-4, File No.
333-36111, filed with the SEC on September 22,
1997.
4.7 Issue of One Debenture, dated as of August 1,
1997, between Navigator Gas (IOM I-E) Limited and
the Collateral Agent, incorporated by reference to
Exhibit 4.7 of the registrant's Form F-4, File No.
333-36111, filed with the SEC on September 22,
1997.
4.8 Form of First Priority Exchange Note, incorporated
by reference to Exhibit 4.8 of the registrant's
Form F-4, File No. 333-36111, filed with the SEC
on September 22, 1997.
4.9 Form of Second Priority Exchange Note,
incorporated by reference to Exhibit 4.9 of the
registrant's Form F-4, File No. 333-36111, filed
with the SEC on September 22, 1997.
4.10 Intercreditor Agreement, dated as of August 1,
1997 between the First Priority Trustee, the
Second Priority Trustee, Navigator Gas Transport,
the Owners and Holdings, incorporated by reference
to Exhibit 4.10 of the registrant's Form F-4, File
No. 333-36111, filed with the SEC on September 22,
1997.
4.11 Letter of Credit Reimbursement Agreement, dated as
of August 7, 1997 among Navigator Gas Transport,
Holdings, the Owners, Credit Suisse First Boston
and certain banks named therein, incorporated by
reference to Exhibit 4.11 of the registrant's Form
F-4, File No. 333-36111, filed with the SEC on
September 22, 1997.
4.12 Intercompany Note dated as of August 7, 1997, made
by the Owners to Navigator Gas Transport,
incorporated by reference to Exhibit 4.12 of the
registrant's Form F-4, File No. 333-36111, filed
with the SEC on September 22, 1997.
4.13 Letter of Credit dated as of August 7, 1997,
issued by Credit Suisse First Boston in favor of
the Collateral Agent, incorporated by reference to
Exhibit 4.13 of the registrant's Form F-4, File
No. 333-36111, filed with the SEC on September 22,
1997.
4.14 Triparty Agreement dated as of August 1, 1997
among Holdings, China Shipbuilding Trading
Company, Limited, Jiangnan Shipyard and Tractebel,
incorporated by reference to Exhibit 4.14 of the
registrant's Form F-4, File No. 333-36111, filed
with the SEC on September 22, 1997.
5.1* Opinion of Graham & James LLP, counsel to
Navigator Gas Transport PLC and the Owners, as to
the validity of the Notes.
8.1* Opinion of Graham & James LLP, counsel to the
Owners, as to Certain United States Income Tax
Consequences (included in Exhibit 5.1).
II-4
<PAGE>
8.2* Opinion of Cains, special counsel to the Owners,
as to Certain Isle of Man Tax Consequences.
10.1 Amended and Restated Shipbuilding Contract, dated
as of June 26, 1997, between Navigator Holdings
PLC and China Shipbuilding Trading Company,
Limited and Jiangnan Shipyard, incorporated by
reference to Exhibit 10.1 of the registrant's Form
F-4, File No. 333-36111, filed with the SEC on
September 22, 1997.
10.2 Amended and Restated Shipbuilding Contract, dated
as of June 26, 1997, between Navigator Holdings
PLC and China Shipbuilding Trading Company,
Limited and Jiangnan Shipyard, incorporated by
reference to Exhibit 10.2 of the registrant's Form
F-4, File No. 333-36111, filed with the SEC on
September 22, 1997.
10.3 Amended and Restated Shipbuilding Contract, dated
as of June 26, 1997, among Navigator Holdings PLC
and China Shipbuilding Trading Company, Limited
and Jiangnan Shipyard, incorporated by reference
to Exhibit 10.3 of the registrant's Form F-4, File
No. 333-36111, filed with the SEC on September 22,
1997.
10.4 Amended and Restated Shipbuilding Contract, dated
as of June 26, 1997, among Navigator Holdings PLC
and China Shipbuilding Trading Company, Limited
and Jiangnan Shipyard, incorporated by reference
to Exhibit 10.4 of the registrant's Form F-4, File
No. 333-36111, filed with the SEC on September 22,
1997.
10.5 Amended and Restated Shipbuilding Contract, dated
as of June 26, 1997, among Navigator Holdings PLC
and China Shipbuilding Trading Company, Limited
and Jiangnan Shipyard, incorporated by reference
to Exhibit 10.5 of the registrant's Form F-4, File
No. 333-36111, filed with the SEC on September 22,
1997.
10.6 Amendment No. 1 to Amended and Restated
Shipbuilding Contract, dated as of August 1, 1997,
among Navigator Gas (IOM I-A) Limited and China
Shipbuilding Trading Company, Limited and Jiangnan
Shipyard, incorporated by reference to Exhibit
10.6 of the registrant's Form F-4, File No.
333-36111, filed with the SEC on September 22,
1997.
10.7 Amendment No. 1 to Amended and Restated
Shipbuilding Contract, dated as of August 1, 1997,
among Navigator Gas (IOM I-B) Limited and China
Shipbuilding Trading Company, Limited and Jiangnan
Shipyard, incorporated by reference to Exhibit
10.7 of the registrant's Form F-4, File No.
333-36111, filed with the SEC on September 22,
1997.
10.8 Amendment No. 1 to Amended and Restated
Shipbuilding Contract, dated as of August 1, 1997,
among Navigator Gas (IOM I-C) Limited and China
Shipbuilding Trading Company, Limited and Jiangnan
Shipyard, incorporated by reference to Exhibit
10.8 of the registrant's Form F-4, File No.
333-36111, filed with the SEC on September 22,
1997.
II-5
<PAGE>
10.9 Amendment No. 1 to Amended and Restated
Shipbuilding Contract, dated as of August 1, 1997,
among Navigator Gas (IOM I-D) Limited and China
Shipbuilding Trading Company, Limited and Jiangnan
Shipyard, incorporated by reference to Exhibit
10.9 of the registrant's Form F-4, File No.
333-36111, filed with the SEC on September 22,
1997.
10.10 Amendment No. 1 to Amended and Restated
Shipbuilding Contract, dated as of August 1, 1997,
among Navigator Gas (IOM I-E) Limited and China
Shipbuilding Trading Company, Limited and Jiangnan
Shipyard, incorporated by reference to Exhibit
10.10 of the registrant's Form F-4, File No.
333-36111, filed with the SEC on September 22,
1997.
10.11 Management Agreement, dated as of August 1, 1997,
between Navigator Gas Management Limited, the
Owners, Navigator Gas Transport and Holdings,
incorporated by reference to Exhibit 10.11 of the
registrant's Form F-4, File No. 333-36111, filed
with the SEC on September 22, 1997.
10.12 Technical Supervision Agreement dated February 28,
1997 between Holdings on behalf of each Owner and
GEBAB, incorporated by reference to Exhibit 10.12
of the registrant's Form F-4, File No. 333-36111,
filed with the SEC on September 22, 1997.
10.13 Agreement on Contract for Technical Matters dated
February 28, 1997 between Holdings on behalf of
each Owner and GEBAB, incorporated by reference to
Exhibit 10.13 of the registrant's Form F-4, File
No. 333-36111, filed with the SEC on September 22,
1997.
10.14 Master Marketing and Services Agreement dated as
of February 28, 1997 between Holdings on behalf of
each Owner and GEBAB, incorporated by reference to
Exhibit 10.14 of the registrant's Form F-4, File
No. 333-36111, filed with the SEC on September 22,
1997.
10.15 Purchase Agreement, dated July 31, 1997, among
Credit Suisse First Boston Corporation, Cambridge
Partners, L.L.C. and Navigator Gas Transport,
incorporated by reference to Exhibit 10.15 of the
registrant's Form F-4, File No. 333-36111, filed
with the SEC on September 22, 1997.
10.16 Registration Rights Agreement, dated as of July
31, 1997 among Credit Suisse First Boston
Corporation, Cambridge Partners, L.L.C. and
Navigator Gas Transport, incorporated by reference
to Exhibit 10.16 of the registrant's Form F-4,
File No. 333-36111, filed with the SEC on
September 22, 1997.
10.17 Assignment and Assumption Agreement dated as of
July 31, 1997 between Holdings and Navigator Gas
(IOM I-A) Limited, incorporated by reference to
Exhibit 10.17 of the registrant's Form F-4, File
No. 333-36111, filed with the SEC on September 22,
1997.
II-6
<PAGE>
10.18 Assignment and Assumption Agreement dated as of
July 31, 1997 between Holdings and Navigator Gas
(IOM I-B) Limited, incorporated by reference to
Exhibit 10.18 of the registrant's Form F-4, File
No. 333-36111, filed with the SEC on September 22,
1997.
10.19 Assignment and Assumption Agreement dated as of
July 31, 1997 between Holdings and Navigator Gas
(IOM I-C) Limited, incorporated by reference to
Exhibit 10.19 of the registrant's Form F-4, File
No. 333-36111, filed with the SEC on September 22,
1997.
10.20 Assignment and Assumption Agreement dated as of
July 31, 1997 between Holdings and Navigator Gas
(IOM I-D) Limited, incorporated by reference to
Exhibit 10.20 of the registrant's Form F-4, File
No. 333-36111, filed with the SEC on September 22,
1997.
10.21 Assignment and Assumption Agreement dated as of
July 31, 1997 between Holdings and Navigator Gas
(IOM I-E) Limited, incorporated by reference to
Exhibit 10.21 of the registrant's Form F-4, File
No. 333-36111, filed with the SEC on September 22,
1997.
10.22 Global First Priority Note dated August 7, 1997 in
the amount of $75,000,000, incorporated by
reference to Exhibit 10.22 of the registrant's
Form F-4, File No. 333-36111, filed with the SEC
on September 22, 1997.
10.23 Global First Priority Note dated August 7, 1997 in
the amount of $75,000,000, incorporated by
reference to Exhibit 10.23 of the registrant's
Form F-4, File No. 333-36111, filed with the SEC
on September 22, 1997.
10.24 Global First Priority Note dated August 7, 1997 in
the amount of $67,000,000, incorporated by
reference to Exhibit 10.24 of the registrant's
Form F-4, File No. 333-36111, filed with the SEC
on September 22, 1997.
10.25 Global Second Priority Note in the amount of
$87,000,000, incorporated by reference to Exhibit
10.25 of the registrant's Form F-4, File No.
333-36111, filed with the SEC on September 22,
1997.
10.26 Addendums to shipbuilding contracts.
23.1* Consent of Liebman, Bruno & Cicero LLP
(New York).
23.2* Consent of Andrew H. Sharpe FCA (Isle of Man).
23.3 Consent of Graham & James LLP (included in Exhibit
5.1).
23.4* Consent of Cains.
25.1 Statement of Eligibility of First Priority Trustee
on Form T-1.
25.2 Statement of Eligibility of Second Priority
Trustee on Form T-1.
99.1 Letter of Transmittal (with regard to the First
Priority Notes).
99.2 Letter of Transmittal (with regard to the Second
Priority Notes).
99.3 Notice of Guaranteed Delivery with regard to the
First Priority Notes.
99.4 Notice of Guaranteed Delivery with regard to the
Second Priority Notes.
* To be provided by amendment.
II-7
<PAGE>
ITEM 22. UNDERTAKINGS
(a) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrants pursuant to the foregoing provisions, or otherwise,
the registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrants of expenses incurred or paid by a director, officer or controlling
person of the registrants in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrants will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(b) The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)
(3) of Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement; and
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any financial
statements required by Rule 3-19 of this chapter at the start of any delayed
offering or throughout a continuous offering. Financial statements and
information otherwise required by Section 10(a)(3) of the Act need not be
furnished, provided, that the registrant includes in the prospectus, by means of
a post-effective amendment, financial statements required pursuant to this
paragraph and other information
II-8
<PAGE>
necessary to ensure that all other information in the prospectus is at least as
current as the date of those financial statements.
(c) The undersigned registrants hereby undertake as follows:
(1) That prior to any public or reoffering of the securities
registered hereunder through use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c), the issuer undertakes that such
reoffering prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items of
the applicable form.
(2) That every prospectus that is filed pursuant to the
paragraph immediately preceding or that purports to meet the requirements of
Section 10(a)(3) of the Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to the
registration statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(d) The undersigned registrants hereby undertake:
(1) To respond to requests for information that is incorporated
by reference into the Prospectus pursuant to Items 4, 10(b), 11 or 13 of Form
F-4, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means. This
includes information contained in documents filed subsequent to the effective
date of the Registration Statement through the date of responding to the
request; and
(2) To arrange to provide for a facility in the U.S. for the
purpose of responding to such requests. The undertaking in subparagraph (1)
above includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding to
the request.
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Douglas, the Isle of Man on June 18,
1999.
NAVIGATOR GAS TRANSPORT PLC
By: /s/ NUNZIO C. LI POMI Principal Executive Officer, Principal
--------------------- Financial Officer and Principal
Nunzio C. Li Pomi Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons, in the
capacities indicated on June 18, 1999.
Name Title
Director and Principal Executive Officer,
/s/ NUNZIO C. LI POMI Principal Financial Officer and Principal
- --------------------- Accounting Officer
Nunzio C. Li Pomi
/s/ SHAUN F. CAIRNS
- -------------------
Shaun F. Cairns Director and Secretary
- -------------------
Kenneth L. Columbia Director
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Douglas, Isle of Man on June 18,
1999.
NAVIGATOR GAS (IOM I-A) LIMITED
By: /s/ NUNZIO C. LI POMI Principal Executive Officer, Principal
--------------------- Financial Officer and Principal
Nunzio C. Li Pomi Accounting Officer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons, in the capacities indicated
on June 18, 1999.
Name Title
/s/ NUNZIO C. LI POMI
- ---------------------
Nunzio C. Li Pomi Director and Secretary
- ----------------------------
Kenneth L. Columbia Director
/s/ SHAUN F. CAIRNS
- -------------------
Shaun F. Cairns Director
II-11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has
duty caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, on June 18, 1999.
NAVIGATOR GAS (IOM I-B) LIMITED
By: /s/ NUNZIO C. LI POMI Principal Executive Officer, Principal
--------------------- Financial Officer and Principal
Nunzio C. Li Pomi Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons, in the
capacities indicated on June 18, 1999.
Name Title
Director and Principal Executive Officer,
/s/ NUNZIO C. LI POMI Principal Financial Officer, Principal
- --------------------- Accounting Officer and Secretary
Nunzio C. Li Pomi
- --------------------------
Kenneth L. Columbia Director
/s/ SHAUN F. CAIRNS
- -------------------
Shaun F. Cairns Director
II-12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Douglas, Isle of Man on June 18,
1999. NAVIGATOR GAS (IOM I-C) LIMITED
By: /s/ NUNZIO C. LI POMI Principal Executive Officer, Principal
--------------------- Financial Officer and Principal
Nunzio C. Li Pomi Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons, in the
capacities indicated on June 18, 1999.
Name Title
Director and Principal Executive Officer,
/s/ NUNZIO C. LI POMI Principal Financial Officer, Principal
- --------------------- Accounting Officer and Secretary
Nunzio C. Li Pomi
- -----------------------
Kenneth L. Columbia Director
/s/ SHAUN F. CAIRNS
- --------------------
Shaun F. Cairns Director
II-13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in Douglas, Isle of Man, on June 18,
1999.
NAVIGATOR GAS (IOM I-D) LIMITED
By: /s/ NUNZIO C. LI POMI Principal Executive Officer, Principal
--------------------- Financial Officer and Principal
Nunzio C. Li Pomi Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons, in the
capacities indicated on June 18, 1999.
Name Title
Director and Principal Executive Officer,
/s/ NUNZIO C. LI POMI Principal Financial Officer, Principal
- --------------------- Accounting Officer and Secretary
Nunzio C. Li Pomi
- ----------------------------
Kenneth L. Columbia Director
/s/ SHAUN F. CAIRNS
- -------------------
Shaun F. Cairns Director
II-14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in Douglas, Isle of Man, on June 18,
1999.
NAVIGATOR GAS (IOM I-E) LIMITED
By: /s/ NUNZIO C. LI POMI Principal Executive Officer, Principal
--------------------- Financial Officer and Principal
Nunzio C. Li Pomi Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons, in the
capacities indicated on June 18, 1999.
Name Title
Director and Principal Executive Officer,
/s/ NUNZIO C. LI POMI Principal Financial Officer, Principal
- --------------------- Accounting Officer and Secretary
Nunzio C. Li Pomi
- ----------------------------
Kenneth L. Columbia Director
/s/ SHAUN F. CAIRNS
- -------------------
Shaun F. Cairns Director
II-15
May 22, 1997
ADDENDUM 1
to
Specification
of
22,000 m3 Ethylene Gas Carriers
Hull Numbers 2245/2246/2247/2248/2249
Between
Cambridge Petroleum Transport Corporation Inc. and
Cambridge Partners L.L.C. as Investment Bank
(The Buyer)
and
Jiangnan Shipyard (Group) Co., Ltd.
(The Builder)
Dated: January 19, 1997
It has been mutually agreed between the Buyer and the Builder that
notwithstanding what has been previously agreed and at no additional cost to the
Buyer, the Specification has been amended as follows:
<TABLE>
<CAPTION>
PAGE SECTION PARA. SUBJECT
- ---- ------- ---- -------
<S> <C> <C> <C>
1-2 1.4 2 The ship will be designed to comply with the requirements of
Germanischer Lloyd to get the following class:
Class: GL + 100 A5 E "Liquefied Gas Carrier Type 2G" + MC E AUT INERT
"or equal ABSDNV, LR" is deleted
1-2 1.4 In addition to the regulations specified in Section 1.4, the Vessels
must also comply with the following regulations:
o Rules and Regulations of the Classification Society.
o Rules and Regulations of the Flag State.
o IBC Code - for the range of cargoes that the Vessels are
designed to carry.
o International Convention for Prevention of Collision at Sea
1972 (COLREG) with Amendments 1981, 1987 and 1989.
o International Telecommunication and Radio Regulations
1985/86 with annexes and revisions.
o U.S. Coast Guard Regulations for Foreign Flagged Vessels
Navigating in U.S. Waters.
o Regulations of the International Labour Organisation (ILO - Convention)
- ILO 92/133 to be satisfied.
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
PAGE SECTION PARA. SUBJECT
- ---- ------- ---- -------
<S> <C> <C> <C>
o IEC Compliance for Electrical Installations.
o IMO Resolution A468 (XII) Noise Level on Board.
o ISO Guidelines Vibration in Merchant Ships.
o SITCO Requirements.
1-3 1.5 3 After "fore peak ballast tank" add: "Water
ballast tank and fuel deep tank (fuel stowage)
including HFO overflow tank and pump room".
1-6 1.7 * Add "Wherever possible all electric supply and control
cables to the main deck, cargo system and forecastle to be
run inside the top side wing tanks to minimise amount of
cabling and cable trays on deck."
1-7 1.10 3 Add at the end of the paragraph "Every effort should be made
to keep the trim when loaded with VCM to the minimum".
1-8 1.13 2 Delete and replace with "In accordance with the Shipbuilding
Contract clauses 7(b) and 7(c), the Seller (Builder) shall
at his own expense dispatch its representative(s) to attend
the gas trial as witness" and "Seller (builder) shall pay
all costs of its own representatives and of the
Classification Society and shall arrange at their expense
for the supplier to send at least one representative to the
gas trial"
1-16 1.15 2 Delete and replace with "Should there be any inconsistency
between the Specification and GA plan or other Contract
drawing, the Specification will govern unless otherwise
specifically agreed. If any inconsistency is found between
the Hull, Machinery and Electrical Specification, the
description of the Specification which governs the
installation of the equipment shall prevail"
1-17 1.16.3 The following Certificates must also be presented to the
Owner on delivery of the Vessel:
o Classification Certificates
o Safety Radio Telegraphy Certificate
o Safety Equipment Certificate
o Record of Safety Equipment
o IMO Certificate of Fitness for Regulated Cargo
o Suez Canal Tonnage Certificate
o Navigation Lights Certificate - including Suez Canal Navigation Regulations
o The Builder will submit the preliminary Trim and Stability Booklet
including the provisional certificate issued by Class at delivery.
Approved final booklets including the experiment will he provided
later when finalised.
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
PAGE SECTION PARA. SUBJECT
- ---- ------- ---- -------
<S> <C> <C> <C>
o Compass Adjustment Certificate.
o All other Certificates for Equipment, Castings, forgings etc... original plus
one copy of each.
1-17 1.16.4 5 Delete and replace with "Each vessel will be provided with a full
set of instruction books and drawings".
1-18 1.16.5 2 Delete and replace with "One set of drawings on transparencies
will be provided to each vessel"
1-21 1.20 2 Note: Fitted carpets in officers accommodation is shipyard supply.
2-2 2.6 Add additional paragraph after paragraph 2 "In order to
preserve the condition of the cargo tanks and cargo
compartments, the Builder will be arranged the necessary
piping and control devices to keep the compartments under a
positive pressure with dry air supplied from the TGE dry air
system. The Builder will also arrange a supply of Nitrogen
on deck adjacent to each cargo compartment which can be
connected by flexible hose in case of need"
2-3 2.8 The Builder will modify the arrangement as currently shown
on the GA plan to allow unencumbered access along the length
of the cargo tanks in each hold in way of the top of the
ballast tanks
3-4 Paint Add after the tables: "The paint specification will be
Tables reviewed with selected paint supplier to ensure coating is
suitable for long term service in all locations".
4-1 4.2 1 Second sentence should read "Both windlass will be equipped
with a wildcat, two detachable drums and a warping head"
Third sentence delete "auto tensioning device"
5 Delete and replace with "Each windless/mooring winch will have
a separate hydraulic pump. Each hydraulic pump to be fitted
with a crossover connection in case of pump failure."
4-2 4.3 1 Delete "auto tensioning device"
4 Delete the second sentence and replace with "Each mooring winch
will have a separate hydraulic pump. Each hydraulic pump to be
fitted with a crossover connection in case of pump failure. Oil
cooler, if any, and relevant accessories will be located in the
hydraulic room".
4.1 4.2 1 Add to the end of the first paragraph "However the drums for the
</TABLE>
Page 3
<PAGE>
<TABLE>
<CAPTION>
PAGE SECTION PARA. SUBJECT
- ---- ------- ---- -------
<S> <C> <C> <C>
windlass are to be designed to accommodate Atlas rope of
equivalent size to 30mm wire."
4-2 4.3 1 Add to the end of the first paragraph "However the drums for the
mooring winches are to be designed to accommodate Atlas rope of
equivalent size to 30mm wire."
4-2 4.3 6 Delete "7 lines" and insert "8 lines".
4-3 4.6 Life Revise lifeboat capacity to "25 persons"
Boat
Life Revise each aft life raft capacity to "25 persons"
Rafts Revise forward life raft capacity to "6 persons"
Misc. Revise lifejacket capacity to "27 persons"
Ships Note: Ships crane can be mounted either on the port or
Crane starboard side to maximise design flexibility for handling
stores and engine spares, etc.
E/R Add after last paragraph "If the Engine room crane and the
crane provisions crane do not overlap, the intervening distance
should be flat, with no obstructions, so that heavy
equipment can be easily manoeuvred between the lifting
points on a trolley or similar device. Failing which, an
auxiliary lifting arrangement should be provided to bridge
the gap between the cranes."
4-6 4-10 4 Should read "muster station"
5-1 5.1.1 7 Add at the end of the paragraph "Ballast pump remote stop
and start buttons together with remote pressure sensor to be
mounted on the same console"
5-8 5.10.1 1 Add at the end of the first paragraph "Recirculation will be
provided by way of extractors in the accommodation alleyways".
5 Add "The A/C compressors and condensers will be located inside
the engine room and in the case of a fresh water central
cooling system being fitted, the condensers will be fresh water
cooled."
6 Delete and replace with "One air conditioning unit will consist
of a mixing section, air filter, fan, steam heater, cooler and
humidifier. The A/C unit will be installed in the A/C room on
the first accommodation deck, aft".
5-10 5.12 3 Note Ventilation in the electric motor room will be designed such
</TABLE>
Page 4
<PAGE>
<TABLE>
<CAPTION>
PAGE SECTION PARA. SUBJECT
- ---- ------- ---- -------
<S> <C> <C> <C>
that the maximum operating temperature is kept below 45
degrees Celsius with an ambient temperature of 35 degrees
Celsius.
5.12 5.14 1 Add after the first paragraph "Drain pipes should be
electrically trace heated".
5.12 5.15 3 Delete and replace with "HFO and steam pipes will be insulated
throughout the system, including the pipe tunnel".
6-4 6.5 The layout of the accommodation is amended as follows:
"Accommodation Deck 3
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Captain Apartment 1 bunk
Chief Engineer Apartment 1 bunk
Chief Officer Apartment 1 bunk
2nd Engineer Apartment 1 bunk
Owner/Pilot Cabin 1 bunk
Accommodation Deck 2
3rd Engineer Cabin 1 bunk
2nd Officer Cabin 1 bunk
Electrician Cabin 1 bunk
3rd Officer Cabin 1 bunk
Gas Engineer Cabin 1 bunk
Officers Day room
Accommodation Deck 1
Boatswain Cabin 1 bunk
AB Cabin 1 bunk
2 AB Cabin 1 double bunk
2 OS Cabin 1 double bunk
Fitter Cabin 1 bunk
2 Oiler Cabin 1 double bunk
Wiper Cabin 1 bunk
Cook Cabin 1 bunk
Steward Cabin 1 bunk
Suez Cabin Cabin 3 double bunk
Basic Crew Compliment with 3 riding squad "25 Crew"
6-5 6.5 2 Amend life saving equipment to "25 persons"
3 Note: Accommodation description in the specification is
missing a lot of detail. Detailed accommodation plan will be
submitted to the Buyer by the Builder for approval. Builder
will make their best efforts to incorporate Buyer's
reasonable requirements
Note: Detailed cargo control room plan will be submitted to
the Buyer by the Builder for approval. Builder will make
their best efforts to incorporate Buyer's reasonable
requirements
</TABLE>
Page 5
<PAGE>
<TABLE>
<CAPTION>
PAGE SECTION PARA. SUBJECT
- ---- ------- ---- -------
<S> <C> <C> <C>
6.6 6.6 Add at the end "Builder to provide Buyer with
samples of materials and furniture intended for
accommodation outfit".
6-10 6.14 Add to the list "Adequate storage for books, manuals, ISO,
ISM documentation."
6-11 6.16 Add to the end of the section "Detailed bridge layout plan
will be submitted to the Buyer by the Builder for approval.
Builder will make their best efforts to incorporate Buyer's
reasonable requirements"
6-11 6.18 2 Amend Electric range suitable for "27 persons". Amend "Working
table of stainless steel". Add to the end "Compactor to be
provided by the Buyer and installed by the Builder"
6-12 6.19 First sentence delete and replace with: "One Pantry is to be
arranged adjacent to the galley to serve the officers mess
room".
6-13 6.20 Amend to "2 dryers"
Note: Drying room to be arranged next to the laundry as shown on the GA Plan.
6-13 6.21 Note: Customs store to be arranged as shown on GA plan.
6-13 6.22 Detailed layout of stores compartments together with
adequate racks, bins, lockers, shelving to be provided for
safe stowage of all provisions, spares and equipment to be
provided by the Builder for Buyer's approval. Builder will
make their best efforts to incorporate Buyer's reasonable
requirements
7-2 7.1.1 11 Note: Access hatch to the engine room at first accommodation
deck and poop decks to be as large as possible.
7-l1 7.1.3.5 Amend to "Minimum two boiler heavy fuel circulating pumps"
7-14 7.1.3.7 Amend to "Service air compressor will be screw type."
7-16 7.1.3.9 Note: The Incinerator is described in section 7-8-5 is to be
of suitable capacity to simultaneously burn all waste oil
(sludge) produced aboard the vessel.
7-17 7.1.3.9 Amend Sewage Treatment Device capacity to "25 persons per
day"
17-18 7.1.3.10 Amend to "Fuel oil and lub, oil tanks to be fitted with sounding
</TABLE>
Page 6
<PAGE>
<TABLE>
<CAPTION>
PAGE SECTION PARA. SUBJECT
- ---- ------- ---- -------
<S> <C> <C> <C>
pipes to the extent possible. If allowed by the rules
calibrated sight glasses with shutoffs to be considered
instead of float sounding. However magnetic floating type
will be provided for F.O. service and settling tanks instead
of sight glasses."
Amend to: "Main engine lub oil storage tank to be minimum
50% larger than the lub oil sump tank."
Gen. engine lub oil storage tank to be "as large as
possible"
7-20 7.1.4 1 Add to first paragraph "Owner's representative to be invited
to attend all shop trials. Any associated travel expenses to
be for Buyer's account"
7-25 7.3.6 7 Amend wording to "Net protector with cutter to be provided".
7-27 7.4.2.4 2 Amend to "2 - Fuel oil burning pump."
7-38 7.8.6 Should read - "The sewage treatment plant is to be fitted
with 1 discharge pump and 2 air blowers."
7-45 7.10.2.2 11 Should read - "All interior surfaces of the tanks and spaces etc."
7-47 7.10.3.1 7 Delete and replace with "The bunkers system is to be of the
enclosed type whereby any overflow from any tank is lead to
a overflow tank aft or forward. Overflow from the MDO
storage tank in the double bottom to be arranged with
overflow into the overflow tank also in the double bottom
with non return valve."
8 Add: "Level indicators for fuel oil storage, settling and
day tanks to be located in the ER Control Room".
7.54. 7.10.10 Heavy fuel oil purifier - should read - "simplex filter at
each pump"
Stern tube lub oil pump - should read - "simplex filter at
each pump"
Lub oil pump for main engine should read - "simplex filter
at each pump"
11 Should read - "Velocities in pipe lines for sea water, fresh
water and lub oil are to be in accordance with engine makers
requirements"
7-57 7.11.1.1 14 Should read - "Brass name plates with engraved letters and
location numbers referring to pipes system drawings for all
valves pumps heat exchangers etc. . . ."
</TABLE>
Page 7
<PAGE>
<TABLE>
<CAPTION>
PAGE SECTION PARA. SUBJECT
- ---- ------- ---- -------
<S> <C> <C> <C>
7-64 7.12.1 Add after the first paragraph:
"Wherever tanks and/or bulkheads are required to be
insulated, the insulation is to be laid and secured inside a
steel frame with suitable sub divisions and covered with
0.7mm galvanised steel plate".
7-64 7.12.1 6 Delete and replace with "Exhaust piping in the funnel to be
insulated up to the penetration".
7-65 7.12.2.2 2 Add: "Insulation to be applied to steam pipes of 25mm and
below if the amount of such pipe is considered excessive."
7-65 7.12.2.3 1 Delete first sentence and insert "Cooling fresh water pipe in the
engine room not to be insulated. All sanitary water and fresh
water pipes in the accommodation to be insulated with Armafex
or other equivalent material."
7.66 7.12.2.5 2 Delete and replace with "Exhaust piping in the funnel to be
insulated up to the penetration".
7-66 7.12.4 1 Delete and replace with "Heavy fuel oil settling tanks, heavy fuel
oil service tanks (except the bottom surface of the tanks) to he
insulated with 40mm rock wool and covered with 0.7mm
galvanised steel sheet in the manner prescribed in Section 7.12.1."
7.67 7.12.4 1 Delete and replace with "The fuel oil tank facing the cargo hold to
be insulated."
7-67 7.12.5 2 Delete and replace with "Exhaust piping in the funnel to be
insulated up to the penetration and covered with galvanised steel
sheet."
7-71 7.13.5 1 Delete and replace with "C02 fire extinguishing system for main
engine to be provided".
7-71 7.13.7.2 2 Delete and replace with "If not directly serviced by the E/R crane
lifting beams to be provided for oil purifiers and turbocharger
rotors etc. . . ."
7-81 7 14.1 Extension alarms to be adjusted to "CE/2E/3E/GE/EE/OM/OD"
D Engine Telegraph - should read
"Receiver with reply transmitter
Main engine local emergency control station."
4 Add at the end of the paragraph "and ME local emergency control"
</TABLE>
Page 8
<PAGE>
<TABLE>
<CAPTION>
PAGE SECTION PARA. SUBJECT
- ---- ------- ---- -------
<S> <C> <C> <C>
station".
7-83 7.14.2 A Should read
"Program type remote control from wheel house"
"Manual type remote control from engine control room" etc...
7-97 7.14.4 A Amend to "Burner shall be electric ignition (initially)" etc....
8-1 8.1 4 Delete and replace with "Builder will provide samples of cable trays to buyer".
7 Add "Builder will provide Buyer with electrical load analysis as soon as it is available."
8-3 8.3 2 Delete and replace with "The E/DG set will be capable of working when the ship is heeled to an
angle of 22.5 degrees"
8-5 8.6 2 Should read "the box will be complete with standard components, instruments and phase indicator"
8-7 8.10 2 Add after second paragraph - "Each pump will have a separate starter box located close to the
pump"
8-9 8.12.1 1 Add "Telephone connection to be provided at the bunker station on deck. Builder to provide one (1)
portable telephone and install two (2) jack boxes at the bunker station"
8-9 8-12-2 Amend to "Sound powered telephone connecting W/H, ECR, M/E emergency control station and the
emergency steering station in the steering gear room".
8-13 8 13.7 Add "Fresh water wash system to be provided at the bridge windows"
</TABLE>
All other terms to remain unchanged
For Buyer: For Builder:
Cambridge Petroleum Transport Jiangnan Shipyard (Group) Co. Ltd
Corporation Inc.
and
Cambridge Partners L.L.C. as Investment Bank
/s/ D. J. PHILLIPS /s/ YANG SHI MING
- ------------------------------ ---------------------
D. J. Phillips - As Agent Only Yang Shi Ming
Page 9
<PAGE>
ADDENDUM 2
to
Specification
of
22,000 m3 Ethylene Gas Carriers
Hull Numbers 2245/2246/2247/2248/2249
Between
Cambridge Petroleum Transport Corporation Inc. and
Cambridge Partners L.L.C. as Investment Bank and
Navigator Holdings Ltd.
(The Buyer)
and
Jiangnan Shipyard (Group) Co., Ltd.
(The Builder)
Dated: January 19, 1997
It has been mutually agreed between the Buyer and the Builder that
notwithstanding what has been previously agreed and for an additional cost of
US$ 100,000 per vessel, which will be added to the contract price and payable on
delivery of each vessel, the Specification has been amended as follows:
1. The specified salt water engine room machinery cooling system
(including the air conditioning plant) will be replaced with a central
flesh water cooling system. The central fresh water cooling system
will consist of a short sea water cooling circuit (with 2 plate
coolers in parallel) - cooling a long fresh water cooling circuit
serving all machinery, coolers and heat exchangers in the engine room.
The short sea water cooling circuit including all valves and fittings
will be constructed of salt water resistant material such as cunife
(except main sea water line which to be galvanised steel pipe) and the
fresh water circuit of mild steel. All major coolers will be of plate
type with plates constructed of titanium on the salt water cooling
circuit and stainless steel on the fresh water circuit. The Builder
will endeavour to install a plate cooler as the auxiliary condenser
however if such plate condenser is not available the Builder will
install a suitable tube cooler. The Builder will provide the Buyer
with further details of the proposed arrangement for their approval.
2. The hull coating and cathodic protection system outlined in Section 3
of the specification is amended so that it will comply with the
requirements of Class for In Water Survey (IWS) and will provide that
the vessel need only drydock every 5 years for Class renewal and
recoating. Accordingly the Builder will provide an impressed current
system and all other requirements to meet Class requirements.
3 The Buyer will provide at his own expense a third compressor of 50% of
the design capacity (125KW - 107,500 K.cal/hr) for the prescribed air
conditioning system in the accommodation. At no additional cost to the
Buyer, the Builder will install and arrange the three compressors in
the engine room so that any two of the three compressors can run the
system at any time with the third being in standby.
<PAGE>
4. In order to safely operate the remote control ballast system from the
Cargo Control Room, the Builder will provide remote ballast pump start
and stop controls and appropriate suction/pressure gauges at the
ballast valve control station (mimic board).
5. The fuel oil transfer pumps prescribed in Section 7.10.3.1 shall be
rearranged such that the diesel oil transfer pump will be of the same
capacity as the heavy fuel oil transfer pump. In the event of the
failure of either pump they will be interchangeable for either fuel
system.
6. The Steam Generation Plant prescribed in Section 7.4 is amended to a
smoke tube composite boiler manufactured by Shazhou Boiler Works in
co-operation with Saake. The Builder will provide the Buyer with
detailed drawings of the amended arrangement for approval. As the
composite boiler is now smoke tube type on both sides, the soot blower
prescribed in Section 7.4.2.4 is deleted.
7. Section 8.2 - Main Diesel generators - it is agreed that the structure
and number of bearings will be as per manufacturers standard.
All other terms to remain unchanged
For Buyer: For Builder:
Cambridge Petroleum Jiangnan Shipyard (Group) Co. Ltd
Transport Corporation Inc.
and
Cambridge Partners L.L.C. as
Investment Bank
and
Navigator Holdings Ltd.
/s/ D. J. PHILLIPS /s/ YANG SHI MING
- ----------------------------- ------------------------
D. J. Phillips As Agent Only Yang Shi Ming
<PAGE>
January 23, 1998
ADDENDUM 3
to
Specification
of
22,000 m3 Ethylene Gas Carriers
Hull Numbers 2245/2246/2247/2248/2249
Between
Cambridge Petroleum Transport Corporation Inc. and
Cambridge Partners L.L.C. as Investment Bank and
Navigator Holdings Ltd.
(The Buyer)
and
Jiangnan Shipyard (Group) Co., Ltd.
(The Builder)
Dated: January 19, 1997
It has been mutually agreed between the Buyer and the Builder that
notwithstanding what has been previously agreed in the Specification and
Appendix 2 - item 3 thereto, the Builder will supply, install and arrange a
third compressor without condenser to the air conditioning system so that any
two of the three compressors can run the system at any time with the third being
in standby. The agreed incremental price is United States Dollars 15,000, which
will be added to the Contract Price and be payable on delivery of the Vessel.
All other terms to remain unchanged
For Buyer: For Builder:
Cambridge Petroleum Jiangnan Shipyard (Group) Co. Ltd.
Transport Corporation Inc.
and
Cambridge Partners L.L.C. as
Investment Bank
and
Navigator Holdings Ltd.
/s/ D. J. PHILLIPS /s/ YANG SHI MING
- ----------------------------- ------------------------
D. J. Phillips As Agent Only Yang Shi Ming
<PAGE>
January 26, 1998
ADDENDUM 4
to
Specification
of
22,000 m3 Ethylene Gas Carriers
Hull Numbers 2245/2246/2247/2248/2249
Between
Cambridge Petroleum Transport Corporation Inc. and
Cambridge Partners L.L.C. as Investment Bank and
Navigator Holdings Ltd.
(The Buyer)
and
Jiangnan Shipyard (Group) Co., Ltd.
(The Builder)
Dated: January 19, 1997
During consultations between the Buyer and the Builder during the plan approval
process and subsequent to a review meeting at the Yard, it has been mutually
agreed that the scope of supply shall be amended to include the following items
with no change to the Contract price:
SPECIFICATION - SECTION 2.10 RUDDER
The upper bearing will be of simplified design incorporating a water lubricated
plastic bush. The rudder stock will be fitted with a stainless steel liner in
way of stuffing box.
GENERAL ARRANGEMENT PLAN
Rooms under Forecastle Area to be rearranged:
o Bulkhead at frame 201 to be removed and replaced with a web frame creating
three large compartments.
o Starboard compartment to be redesignated Cargo Gear Room and to have access
directly to main deck. Compartment to be arranged with fixed supports for
storage of flexible cargo hoses and shelves for storage of reducers,
flanges spool pieces etc....
o Dry Powder plant to he relocated in Hydraulic Room subject to
reconfirmation by the Builder.
o Port side compartment to be designated as a Paint Store.
Forward HFO overflow tank
To be relocated away from bulkhead adjacent to salt water ballast tank and chain
lockers.
Main Deck
o Mooring bollards at port and starboard sides to be relocated outboard
o Deck house and stairs from poop deck to tween deck to be deleted. A 1200 mm
x 1000 mm hatch to be arranged close to aft bulkhead of accommodation to
port deck store. A single Builder's Standard access door to port deck store
to be arranged from engine room.
<PAGE>
DRAWINGS AL - SHEETS 1 TO 1O ACCOMMODATION
The Builder will make their best efforts to rearrange the accommodation area in
the following fashion. Should the following arrangements not be practicable, the
Builder and the Buyer will discuss and agree alternative layouts.
Bridge Deck - 1/10
o The bridge will be arranged with an enclosed stairway with appropriate
light switching. The chart room and communications room will be segregated
from the wheelhouse area by partitioning walls with suitable openings
maximising the visability aft.
o A storage room of appropriate size for the fire fighting protective
clothing and other related equipment is to be arranged at the aft end of
the bridge or at another suitable location to be mutually agreed.
o Storage/filing cabinets to be arranged at the forward bulkheads to the
chart table and communications area. Adequate shelves for nautical, radio
and ships manuals to be arranged in chart room and communication room.
3rd Accommodation Deck - 2/10
o The ships office will be arranged with a 8 person conference table and two
work stations. The aft bulkhead will be fitted with filing cabinets with
shelves above for the housing the ships plans, manuals and papers.
Provision to be made for copying machine and computer work stations. Sink
to be arranged and provision made for coffee machine adjacent thereto.
o Credenza (low storage cupboards) to be installed along bulkhead behind
Captain's and Chief Engineer's desks. Provision to be made for the
installation of televisions on the credenzas. Book shelves to be arranged
above.
o Bath tubs in Captain and Chief Engineers bathrooms to be replaced with
showers.
o Captain and Chief Engineer day rooms to be reduced in length by 500 mm to
increase the size of the 2nd Officer's and 3rd Engineer's cabins
respectively.
o Chairs in Captain's and Chief Engineer's bedrooms to be relocated to their
day rooms. General wardrobes in all officers cabins to be increased in size
to 1200 mm x 600 mm. & all coffee tables in cabins to be oblong rather than
round.
2nd Accommodation Deck - 3/10
o Officer's lounge to be rearranged with a wet bar, bar stools and
refrigerator. Provision to be made for dart board supplied by the Buyer.
o Table to be removed from Chief Officer's and 2nd Engineer's bedrooms.
Credenzas to be arranged at front bulkhead of day rooms and provision to be
made to install television.
1st Accommodation Deck - 4/10
o 2 oiler cabins and 1 wiper cabin to be provided with double bunks/wardrobes
etc...for double occupancy
Main Deck - 5/10
o Crew mess room to be rearranged to seat 15 crew members - with sofa
seating at the bulkheads and chairs around oblong tables. Drinking fountain
to be installed.
o Crew lounge to be arranged with seating spaces for 15 crew.
o Ships cargo control room and deck office to be arranged across the
remaining forward part of the accommodation in one space - store & linen
store to be relocated. Means to close off the cargo control space from the
deck office to be provided. Deck office to be outfitted with a conference
table for 8 persons and work station. Provision to be made for a
photocopier, computer, printer etc....
<PAGE>
o Officer's mess room to be arranged for 12 persons - with sofa seating at
bulkheads, two oblong dining tables and arm chairs.
o A duty mess room for 8 persons to be provided in the area previously
designated for storage of dry provisions outside galley. Drinking fountain
to be installed.
Tween Deck - 6/10
o Compressor Room to be rearranged on the port side and Engine Room Store to
be rearranged on the starboard side.
o Engine room store to be outfitted as per Buyer's sketch with 9 steel
storage lockers and shelving at the perimeter and at the centre isle.
Lifting rail to be provided.
o The size of the drying area within the laundry will be maximised.
o Beer store to be redesignated Bonded Store. Bonded Store room to be
redesignated Baggage Room. Baggage Room to be redesignated Linen Room.
o Builder will try to arrange suitable hatches to provide free passage of
complete alternators from auxiliary engine platform to main deck.
o Shower to be removed from changing area and an additional sink provided.
o The stores hatch 1100mm x 1400mm at frame 20 shall be arranged with a
raised coaming and hinged lid secured by wing nuts opening by crane or
chain block
All other terms to remain unchanged
For Buyer: For Builder:
Cambridge Petroleum Jiangnan Shipyard (Group) Co. Ltd.
Transport Corporation Inc.
and
Cambridge Partners L.L.C. as
Investment Bank
and
Navigator Holdings Ltd.
/s/ D. J. PHILLIPS /s/ YANG SHI MING
- ----------------------------- ------------------------
D. J. Phillips As Agent Only Yang Shi Ming
<PAGE>
January 25, 1998
ADDENDUM 5
to
Specification
of
22,000 m3 Ethylene Gas Carriers
Hull Numbers 2245/2246/2247/2248/2249
Between
Cambridge Petroleum Transport Corporation Inc. and
Cambridge Partners L.L.C. as Investment Bank and
Navigator Holdings Ltd.
(The Buyer)
and
Jiangnan Shipyard (Group) Co., Ltd.
(The Builder)
Dated: January 19, 1997
During consultations between the Buyer and the Builder during the plan approval
process and subsequent to a review meeting at the Yard, it has been mutually
agreed that the scope of supply shall be amended to include the following items
with no change to the Contract price:
SPECIFICATION
Section 2.1 - General
It has been agreed that the framing of the outside shell in way of cargo holds
will be longitudinally framed rather than transverse framed, as prescribed in
the specification. Reinforced areas will be fitted at three locations on each
side to create stiffened tug pushing points as per the Outside Shell Expansion
Drawing.
Section 4.10 - Gratings on Deck
All gratings fitted on deck will be fabricated from reinforced glass fibre
rather than galvanised steel, as prescribed in the specification.
Section 5.1.1 & Appendix 2 - Remote Control Ballast Water System
The Builder will supply and install remote controlled valves throughout the
system with the exception of valves to the main sea water pump.
Section 7.1.3.5 - Preheating Pump for Main Engine Cooling Water System.
The Builder will supply and install a preheating pump, of appropriate size, for
the main engine cooling water system.
Section 7.2. 1 - Torsional Vibration Damper
The Builder will supply and install a "Geislinger" type torsional vibration
damper to remove the barred speed range.
Section 7.10.3 - Heavy Oil Treatment Unit
The designed Heavy Oil Treatment Unit will have sufficient capacity to supply 3
auxiliary diesel generators running in parallel at 65% of MCR and the main
engine running at 100% of MCR at the same time.
<PAGE>
Section 7.10.3 - Harbour Fuel Oil Supply Pump
The Builder will supply and install a Harbour Fuel Oil Supply Pump of sufficient
capacity to supply 2 auxiliary diesel generators running at 100% of MCR or 3
auxiliary diesel generators running at 65% of MCR.
Section 8.1 & Appendix 1 - Cable Trays
Cable trays on deck to be of plastic coated steel.
Section 8.12 - Dead Man Alarm System
The Builder will supply and install a "Dead Man Alarm" system in the bridge
console.
APPENDIX 2
Central Cooling System
Each of the prescribed central coolers will be outfitted with the designed
maximum number of plates. The Builder will consult with Alpha Laval with a view
to adding an addition 56 plates to each cooler while maintaining the current
designed location. Should this not be practicable the Builder and Buyer will
discuss and agree an alternative arrangement.
Fresh Water Cooling System
The designed fresh water cooling system will have sufficient capacity to supply
3 auxiliary diesel generators running in parallel at 65% of MCR and the main
engine running at 100% of MCR at the same time.
Fresh Water Cooling Pumps
The builder will supply and install three fresh water cooling pumps of equal
size. The capacity of the pumps will be such that with any 2 pumps running in
parallel they will supply not less than 100% of the maximum required capacity of
the system.
All other terms to remain unchanged
For Buyer: For Builder:
Cambridge Petroleum Jiangnan Shipyard (Group) Co. Ltd.
Transport Corporation Inc.
and
Cambridge Partners L.L.C. as
Investment Bank
and
Navigator Holdings Ltd.
/s/ D. J. PHILLIPS /s/ YANG SHI MING
- ----------------------------- ------------------------
D. J. Phillips As Agent Only Yang Shi Ming
<PAGE>
August 1, 1998
ADDENDUM 6
to
Specification
of
22,000 m3 Ethylene Gas Carriers
Hull Numbers 2245/2246/2247/2248/2249
Between
Cambridge Petroleum Transport Corporation Inc. and
Cambridge Partners L.L.C. as Investment Bank and
Navigator Holdings Ltd.
(The Buyer)
and
Jiangnan Shipyard (Group) Co., Ltd.
(The Builder)
Dated: January 19, 1997
It has been mutually agreed between the Buyer and the Builder that the Builder
will install a Cargo Head Condenser system designed by Tractobel Gas Engineering
GmbH. The Cargo Head Condenser will be capable maintaining the
temperature/pressure of a third grade of cargo carried in cargo tank No. 4.
The fitting of the Cargo Head Condenser will comprise the following increases to
the scope of supply for the Contracted gas system:
o One tank head condenser of shell and tube design (material: stainless
steel) which is to be installed near the dome of tank No. 4 in order
to liquefy the boil-off gases.
o Pipe connection to the refrigeration system (propylene cycle),
including all necessary instrumentation, valves, controls etc....
o Insulation of pipes
o Integration into the control and monitoring system.
o Erection works
The agreed price for the installation of the Cargo Head Condenser is US$ 24,000
(United States Dollars twenty four thousand) per vessel which will be added to
the Contract Price and payable on delivery of each Vessel.
All other terms to remain unchanged
For and on behalf of the Buyer: For and on behalf of the Builder:
Cambridge Petroleum Jiangnan Shipyard (Group) Co. Ltd.
Transport Corporation Inc.
and
Cambridge Partners L.L.C. as
Investment Bank
and
Navigator Holdings Ltd.
/s/ D. J. PHILLIPS /s/ YANG SHI MING
- ----------------------------- ------------------------
D. J. Phillips As Agent Only Yang Shi Ming
<PAGE>
August 1, 1998
ADDENDUM 7
to
Specification
of
22,000 m3 Ethylene Gas Carriers
Hull Numbers 2245/2246/2247/2248/2249
Between
Cambridge Petroleum Transport Corporation Inc. and
Cambridge Partners L.L.C. as Investment Bank and
Navigator Holdings Ltd.
(The Buyer)
and
Jiangnan Shipyard (Group) Co., Ltd.
(The Builder)
Dated: January 19, 1997
After reviewing the gas plant model provide by TGE, it has been mutually agreed
between the Buyer and the Builder that the Builder will make the following
changes at no additional cost to the Buyer.
1. GANGWAY FROM ACCOMMODATION TO FORESHIP
The catwalk as described in Section 1.5 Page 1/3 has been deleted.
2. WAVE PROTECTION OF THE LPG VAPORISER (STARBOARD SIDE)
The Builder will supply and install a wave breaker to protect the starboard
side LPG vaporiser in accordance with the model.
3. DRY AIR AND NITROGEN PURGE CONNECTIONS TO THE CARGO HOLDS
The Builder will supply and fit a piping system, together with the
necessary flexible hoses, so that the cargo void spaces can be purged and
filled with either dried air or Nitrogen. The system will receive supply
of either dried air or Nitrogen from either the Inert Gas System or Dried
Air Systems driven off the PSA unit.
4. BUNKER LINES ON MAIN DECK
The Builder will supply and fit bunker manifolds adjacent to the cargo
manifolds - so that bunker hoses can be handled by the cargo hose handling
crane, as shown in the model.
5. SEA WATER COOLING LINES FOR THE GAS PLANT
The sea water cooling line overboard discharge lines will be arranged so
that they pass through the void spaces at the ends of the cargo holds. The
pipes will be constructed of sch. 120 hot galvanised pipe and connected
with flanges so that the pipes can be removed without hot work in case of
need. A hot galvanised penetration pieces (seachest type) will be supplied
and fitted at the outside shell.
The sea water cooling supply lines will be fitted on deck.
<PAGE>
6. WINDOWS IN COMPRESSOR ROOM
The Builder will supply and fit A 60 type windows 600mm x 400mm between the
electric motor room and the compressor room in three locations in order
that the control panels for each unit can be effectively monitored.
7. FAN MOTORS ON TOP OF COMPRESSOR HOUSE
The Builder will ensure that the fan motors located on top of the
Compressor House will be adequately protected from weather and corrosion
damage.
All other terms to remain unchanged.
For and on behalf of the Buyer: For and on behalf of the Builder:
Cambridge Petroleum Jiangnan Shipyard (Group) Co. Ltd.
Transport Corporation Inc.
and
Cambridge Partners L.L.C. as
Investment Bank
and
Navigator Holdings Ltd.
/s/ D. J. PHILLIPS /s/ YANG SHI MING
- ----------------------------- ------------------------
D. J. Phillips As Agent Only Yang Shi Ming
<PAGE>
August 1, 1998
ADDENDUM 8
to
Specification
of
22,000 m3 Ethylene Gas Carriers
Hull Numbers 2245/2246/2247/2248/2249
Between
Cambridge Petroleum Transport Corporation Inc. and
Cambridge Partners L.L.C. as Investment Bank and
Navigator Holdings Ltd.
(The Buyer)
and
Jiangnan Shipyard (Group) Co., Ltd.
(The Builder)
Dated: January 19, 1997
Having reviewed the Builders procedures for construction, insulation and
storage of cargo tanks, it has been mutually agreed between the Buyer and the
Builder that the Builder will make the following improvements in the
production process at no additional cost to the Buyer.
1. Tank Insulation
The Builder will construct weather proof shelters - consisting of a steel
frame adequately covered with fibreglass sheets at the top and sides - in
order that application of the insulation and cladding will be conducted in a
dry, weatherproof environment.
2. After final application of insulation and cladding and acceptance by both
Class and the Owners, the Builder will ensure that the tanks remain
adequately covered with either the shelters or canvas covers so that the tank
insulation and cladding is adequately protected from rain water during the
storage period prior to installation aboard the Vessel.
3. After installation aboard the Vessel the Builder will ensure that the tanks
are adequately protected from rainwater and mechanical damage during the
time prior to that the deck sections being installed and the cargo void
spaces being weather proof.
All other terms to remain unchanged.
For and on behalf of the Buyer: For and on behalf of the Builder:
Cambridge Petroleum Jiangnan Shipyard (Group) Co. Ltd.
Transport Corporation Inc.
and
Cambridge Partners L.L.C. as
Investment Bank
and
Navigator Holdings Ltd.
/s/ D. J. PHILLIPS /s/ YANG SHI MING
- ----------------------------- ------------------------
D. J. Phillips As Agent Only Yang Shi Ming
<PAGE>
June 19, 1997
ADDENDUM 10
to
Specification
of
22,000 m3 Ethylene Gas Carriers
Hull Numbers 2245/2246/2247/2248/2249
Between
Cambridge Petroleum Transport Corporation Inc. and
Cambridge Partners L.L.C. as Investment Bank and
Navigator Holdings Ltd.
(The Buyer)
and
Jiangnan Shipyard (Group) Co., Ltd.
(The Builder)
Dated: January 19, 1997
It has been mutually agreed between the Buyer and the Builder that
notwithstanding what has been previously agreed, for an additional cost of
US$ 4,500 (United States Dollars Four Thousand Five Hundred) per vessel,
which will be added to the contract price and payable on to the Builder on
delivery of each vessel, the Specification has been amended as follows:
o The Builder with supply, arrange and install a Kang Li Model SS200 waste
disposal unit of capacity 319 kg/meal as per the attached specification.
All other terms to remain unchanged
For Buyer: For Builder:
Cambridge Petroleum Jiangnan Shipyard (Group) Co. Ltd.
Transport Corporation Inc.
and
Cambridge Partners L.L.C. as
Investment Bank
and
Navigator Holdings Ltd.
/s/ D. J. PHILLIPS /s/ YANG SHI MING
- ----------------------------- ------------------------
D. J. Phillips As Agent Only Yang Shi Ming
<PAGE>
August 1, 1998
ADDENDUM 1
to
Amended and Restated
Shipbuilding Contract
for
22,000 m3 Ethylene Gas Carriers
Hull Numbers 2245/2246/2247/2248/2249
Between
Navigator Holdings PLC
(The Buyer)
and
Jiangnan Shipyard (Group) Co., Ltd.
(The Builder)
Dated: June 26, 1997
After reviewing the initial stability calculations provided by the Builder dated
May 25, 1998, which is appended hereto, it has been mutually agreed between the
Buyer and the Builder that the Builder will strengthen the Vessel so that in
cases 25, 26, 30, 41, 49 and 57 the maximum allowed bending moments are not
exceeded.
To strengthen the Vessel so that cases 25, 26, 30, 41, 49 and 57 are within the
maximum allowed bending moments. the Builder estimates that it will be necessary
to increase the lightship weight by some 120 metric tons which will be done at
no additional expense to the Buyer.
The Buyer agrees that the maximum deficiency in the guaranteed Deadweight as
prescribed in Article III, Section 4(a) of the Amended and Restated Shipbuilding
Contract dated June 26, 1997 shall be increased from four hundred (400)
metric tons to five hundred and twenty (520) metric tons accordingly.
All other terms to remain unchanged
For and on behalf of Buyer: For and on behalf of Builder:
Navigator Holdings PLC. Jiangnan Shipyard (Group) Co. Ltd.
/s/ D. J. PHILLIPS /s/ YANG SHI MING
- ----------------------------- ------------------------
D. J. Phillips As Agent Only Yang Shi Ming
FORM T-1
==============================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
------------------
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) _______
------------------
UNITED STATES TRUST COMPANY OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-3818954
(Jurisdiction of incorporation (I.R.S. employer
if not a U.S. national bank) identification No.)
114 West 47th Street 10036-1532
New York, NY (Zip Code)
(Address of principal
executive offices)
------------------
NAVIGATOR GAS TRANSPORT PLC
(Exact name of obligor as specified in its charter)
Isle of Man N/A
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
c/o 1 Castle Street
Castletown, Isle of Man IM9 1LF
(Address of principal executive offices) (Zip Code)
------------------
<PAGE>
- 2 -
NAVIGATOR GAS (IOM-I-A) LIMITED
(Exact name of obligor as specified in its charter)
Isle of Man N/A
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
c/o 1 Castle Street
Castletown, Isle of Man IM9 1LF
(Address of principal executive offices) (Zip Code)
------------------
NAVIGATOR GAS (IOM-I-B) LIMITED
(Exact name of obligor as specified in its charter)
Isle of Man N/A
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
c/o 1 Castle Street
Castletown, Isle of Man IM9 1LF
(Address of principal executive offices) (Zip Code)
------------------
NAVIGATOR GAS (IOM-I-C) LIMITED
(Exact name of obligor as specified in its charter)
Isle of Man N/A
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
c/o 1 Castle Street
Castletown, Isle of Man IM9 1LF
(Address of principal executive offices) (Zip Code)
------------------
NAVIGATOR GAS (IOM-I-D) LIMITED
(Exact name of obligor as specified in its charter)
Isle of Man N/A
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
c/o 1 Castle Street
Castletown, Isle of Man IM9 1LF
(Address of principal executive offices) (Zip Code)
------------------
<PAGE>
- 3 -
------------------
NAVIGATOR GAS (IOM-I-E) LIMITED
(Exact name of obligor as specified in its charter)
Isle of Man N/A
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
c/o 1 Castle Street
Castletown, Isle of Man IM9 1LF
(Address of principal executive offices) (Zip Code)
------------------
10 1/2% First Priority Ship Mortgage Notes due 2007
(Title of the indenture securities)
============================================================
<PAGE>
- 4 -
GENERAL
1. GENERAL INFORMATION
-------------------
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
Federal Reserve Bank of New York (2nd District)
(Board of Governors of the Federal Reserve System)
33 Liberty Street, New York, NY 10005
Federal Deposit Insurance Corporation
550 17th Street NW
Washington, D.C. 20429-9990
New York State Banking Department
5 Empire State Plaza, Suite 2310
Albany, New York 12223
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
2. AFFILIATIONS WITH THE OBLIGOR
-----------------------------
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None
3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15:
Navigator Gas Transport PLC, Navigator Gas (IOM-I-A) Limited, Navigator Gas
(IOM-I-B), Navigator Gas (IOM-A-C), Navigator Gas (IOM-A-D), Navigator Gas
(IOM-A-E) currently is not in default under any of its outstanding
securities for which United States Trust Company of New York is Trustee.
Accordingly, responses to Items 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and
15 of Form T-1 are not required under General Instruction B.
16. LIST OF EXHIBITS
----------------
T-1.1 -- Organization Certificate, as amended, issued by
the State of New York Banking Department to transact
business as a Trust Company, is incorporated by
reference to Exhibit T-1.1 to Form T-1 filed on
September 15, 1995 with the Commission pursuant to
the Trust Indenture Act of 1939, as amended by the
Trust Indenture Reform Act of 1990 (Registration No.
33-97056).
<PAGE>
- 5 -
16. LIST OF EXHIBITS (cont'd)
----------------
T-1.2 -- Included in Exhibit T-1.1.
T-1.3 -- Included in Exhibit T-1.1.
T-1.4 -- The By-Laws of United States Trust Company of New
York, as amended, is incorporated by reference to
Exhibit T-1.4 to Form T-1 filed on September 15, 1995
with the Commission pursuant to the Trust Indenture
Act of 1939, as amended by the Trust Indenture Reform
Act of 1990 (Registration No. 33-97056).
T-1.6 -- The consent of the trustee required by Section
321(b) of the Trust Indenture Act of 1939, as amended
by the Trust Indenture Reform Act of 1990.
T-1.7 -- A copy of the latest report of condition of the
trustee pursuant to law or the requirements of its
supervising or examining authority.
NOTE
====
As of May 26, 1999, the trustee had 2,999,020 shares of Common Stock
outstanding, all of which are owned by its parent company, U.S. Trust
Corporation. The term "trustee" in Item 2, refers to each of United States Trust
Company of New York and its parent company, U. S. Trust Corporation.
In answering Item 2 in this statement of eligibility as to matters peculiarly
within the knowledge of the obligor or its directors, the trustee has relied
upon information furnished to it by the obligor and will rely on information to
be furnished by the obligor and the trustee disclaims responsibility for the
accuracy or completeness of such information.
------------------
Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee,
United States Trust Company of New York, a corporation organized and existing
under the laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of New York, and State of New York, on the 26th day
of May, 1999.
UNITED STATES TRUST COMPANY
OF NEW YORK, Trustee
By: /s/ CHRISTINE C. COLLINS
--------------------------------
Christine C. Collins
Assistant Vice President
<PAGE>
EXHIBIT T-1.6
-------------
The consent of the trustee required by Section 321(b) of the Act.
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
January 7, 1997
Securities and Exchange Commission
450 5th Street, N.W.
Washington, DC 20549
Gentlemen:
Pursuant to the provisions of Section 321(b) of the Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990, and subject to the
limitations set forth therein, United States Trust Company of New York ("U.S.
Trust") hereby consents that reports of examinations of U.S. Trust by Federal,
State, Territorial or District authorities may be furnished by such authorities
to the Securities and Exchange Commission upon request therefor.
Very truly yours,
UNITED STATES TRUST COMPANY
OF NEW YORK
/s/Gerard F. Ganey
------------------------------------------
By: Gerard F. Ganey
Senior Vice President
<PAGE>
EXHIBIT T-1.7
UNITED STATES TRUST COMPANY OF NEW YORK
CONSOLIDATED STATEMENT OF CONDITION
MARCH 31, 1999
--------------
($ IN THOUSANDS)
ASSETS
- ------
Cash and Due from Banks $ 139,755
Short-Term Investments 85,326
Securities, Available for Sale 528,160
Loans 2,081,103
Less: Allowance for Credit Losses 17,114
---------
Net Loans 2,063,989
Premises and Equipment 57,765
Other Assets 125,780
---------
TOTAL ASSETS $3,000,775
==========
LIABILITIES
- -----------
Deposits:
Non-Interest Bearing $ 623,046
Interest Bearing 1,875,364
---------
Total Deposits 2,498,410
Short-Term Credit Facilities 184,281
Accounts Payable and Accrued Liabilities 126,652
---------
TOTAL LIABILITIES $2,809,343
==========
STOCKHOLDER'S EQUITY
- --------------------
Common Stock 14,995
Capital Surplus 53,041
Retained Earnings 121,759
Unrealized Gains on Securities
Available for Sale (Net of Taxes) 1,637
----------
TOTAL STOCKHOLDER'S EQUITY 191,432
----------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $3,000,775
==========
I, Richard E. Brinkmann, Managing Director & Comptroller of the named bank do
hereby declare that this Statement of Condition has been prepared in conformance
with the instructions issued by the appropriate regulatory authority and is true
to the best of my knowledge and belief.
Richard E. Brinkmann, Managing Director & Controller
May 18, 1999
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
--------------------------------------------------
NAVIGATOR GAS TRANSPORT PLC
(Exact name of obligor as specified in its charter)
ISLE OF MAN N/A
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
C/O 1 CASTLE STREET
CASTLETOWN, ISLE OF MAN IM9 1LF
(Address of principal executive offices) (Zip Code)
-------------------------------------------------------
SECOND PRIORITY SHIP MORTGAGE NOTES
(Title of the indenture securities)
---------------------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington, D.C.,
20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 26th day of May, 1999.
THE CHASE MANHATTAN BANK
By /s/ L. O'Brien
---------------------------
/s/ L. O'Brien
Vice President
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business December 31, 1998, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
------ ---------------
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ....................................................... $ 13,915
Interest-bearing balances ............................................... 7,805
Securities:
Held to maturity securities ............................................... 1,429
Available for sale securities ............................................. 56,327
Federal funds sold and securities purchased under agreements to resell .... 21,733
Loans and lease financing receivables:
Loans and leases, net of unearned income ................. $131,095
Less: Allowance for loan and lease losses ................ 2,711
Less: Allocated transfer risk reserve .................... 0
Loans and leases, net of unearned income, --------
allowance, and reserve ................................................. 128,384
Trading Assets ............................................................ 48,949
Premises and fixed assets (including capitalized leases) .................. 3,095
Other real estate owned ................................................... 239
Investments in unconsolidated subsidiaries and associated companies ....... 199
Customers' liability to this bank on acceptances outstanding .............. 1,209
Intangible assets ......................................................... 2,081
Other assets .............................................................. 11,352
--------
TOTAL ASSETS .............................................................. $296,717
========
</TABLE>
-4-
<PAGE>
LIABILITIES
<TABLE>
<CAPTION>
<S> <C>
Deposits
In domestic offices ........................................................ $105,879
Noninterest-bearing ...................................... $ 39,175
Interest-bearing ......................................... 66,704
--------
In foreign offices, Edge and Agreement, subsidiaries
and IBF's ............................................... 79,294
Noninterest-bearing ...................................... $ 4,082
Interest-bearing ......................................... 75,212
Federal funds purchased and securities sold under
agreements to repurchase .................................................... 32,546
Demand notes issued to the U.S. Treasury ..................................... 629
Trading liabilities .......................................................... 36,807
Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less .............................. 4,478
With a remaining maturity of more than one year
through three years ....................................................... 213
With a remaining maturity of more than three years ......................... 115
Bank's liability on acceptances executed and outstanding ..................... 1,209
Subordinated notes and debentures ............................................ 5,408
Other liabilities ............................................................ 10,855
TOTAL LIABILITIES ............................................................ 277,433
-------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ................................ 0
Common stock ................................................................. 1,211
Surplus(exclude all surplus related to preferred stock) ...................... 11,016
Undivided profits and capital reserves ....................................... 6,762
Net unrealized holding gains (losses)
on available-for-sale securities ............................................. 279
Cumulative foreign currency translation adjustments .......................... 16
TOTAL EQUITY CAPITAL ......................................................... 19,284
--------
TOTAL LIABILITIES AND EQUITY CAPITAL ......................................... $296,717
========
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
-5-
LETTER OF TRANSMITTAL
OFFER TO EXCHANGE ANY AND ALL OF THE OUTSTANDING
10 1/2% FIRST PRIORITY SHIP MORTGAGE NOTES DUE 2007
FOR
10 1/2% FIRST PRIORITY SHIP MORTGAGE NOTES DUE 2007
THAT HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED,
OF
NAVIGATOR GAS TRANSPORT PLC,
PURSUANT TO THE PROSPECTUS DATED _______, 1999
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON ___________, 1999,
UNLESS THE OFFER IS EXTENDED
To United States Trust Company of New York
(the "First Priority Notes Exchange Agent")
BY REGISTERED OR CERTIFIED MAIL: BY HAND (UNTIL 4:30 PM., NEW YORK TIME):
P.O. Box 844 111 Broadway
Cooper Station New York, New York 10006
New York, New York 10276 Attention: Lower Level Corporate
Attention: Corporate Trust Services Trust Window
BY OVERNIGHT MAIL OR COURIER, OR BY HAND: BY FACSIMILE (AFTER 4:30 PM,
770 Broadway NEW YORK TIME)
13th Floor (FOR ELIGIBLE INSTITUTIONS ONLY):
New York, New York 10003 (212) 420-6152
Attention: Corporate Trust Services confirm by telephone (800) 548-6565
Delivery of this Letter of Transmittal to an address other than as set
forth above or transmission of instructions via facsimile to a number other than
the one listed above will not constitute valid delivery. The instructions
accompanying this Letter of Transmittal should be read carefully before
completing this Letter of Transmittal.
The undersigned hereby acknowledges receipt of the Prospectus dated
_______, 1999 (the "Prospectus") of Navigator Gas Transport PLC, ("Navigator Gas
Transport"), as agent for Navigator Gas (IOM I-A) Limited, Navigator Gas (IOM
I-B) Limited, Navigator Gas (IOM I-C) Limited, Navigator Gas (IOM I-D) Limited,
and Navigator Gas (IOM I-E) Limited, (each an "Owner", and together with
Navigator Gas Transport, the "Companies") and this Letter of Transmittal, which
together constitute the offer of Navigator Gas Transport (the "Exchange Offer")
to exchange up to $217,000,000 in aggregate principal amount of its outstanding
unregistered 10 1/2% First Priority Ship Mortgage Notes due 2007 (the "Old First
Priority Notes") for a like principal amount of its registered 10 1/2% First
Priority Ship Mortgage Notes due 2007 (the "New First Priority Notes"). Old
First Priority Notes may be tendered only in minimum denominations of $100,000
and integral multiples of $1,000 in excess thereof. The term "Expiration Date"
shall mean 5:00 p.m., New York City time, on ___________, 1999, unless Navigator
Gas Transport, in its sole discretion, extends the Exchange Offer, in which case
the term shall mean the latest date and time to which the Exchange Offer is
extended. Capitalized terms used but not defined herein have the meaning given
to them in the Prospectus.
<PAGE>
YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE
INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED.
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS
AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE FIRST PRIORITY NOTES
EXCHANGE AGENT.
List below the Old First Priority Notes to which this Letter of Transmittal
relates. If the space indicated below is inadequate, the Certificate or
Registration Numbers and Principal Amounts should be listed on a separately
signed schedule affixed hereto.
DESCRIPTION OF OLD FIRST PRIORITY NOTES TENDERED HEREBY
<TABLE>
<CAPTION>
Certificate Aggregate Principal
or Amount Represented by
Name(s) and Address(es) of Registered Holder(s) Registration Old First Principal Amount
(Please fill in) Numbers* Priority Notes Tendered**
- ------------------------------------------------- ------------ ---------------------- ----------------
<S> <C> <C> <C>
Total
============ ====================== ================
</TABLE>
* Need not be completed by book-entry Holders.
** Unless otherwise indicated, the Holder will be deemed to have tendered the
full aggregate principal amount represented by such Old First Priority
Notes. All tenders must be in minimum denominations of $100,000 and
integral multiples of $1,000 thereafter.
This Letter of Transmittal is to be used (i) if certificates of Old First
Priority Notes are to be forwarded herewith, (ii) if delivery of Old First
Priority Notes is to be made by book-entry transfer to an account maintained by
the Old Priority Notes Exchange Agent at The Depository Trust Company, pursuant
to the procedures set forth in "The Exchange Offer-Procedures for Tendering" in
the Prospectus or (iii) if tender of the Old First Priority Notes is to be made
according to the guaranteed delivery procedures described in the Prospectus
under the caption "The Exchange Offer-Guaranteed Delivery Procedures." See
Instruction 2. Delivery of documents to a book-entry transfer facility does not
constitute delivery to the First Priority Notes Exchange Agent.
The term "Holder" with respect to the Exchange Offer means any person in
whose name Old First Priority Notes are registered on the books of Navigator Gas
Transport or any other person who has obtained a properly completed bond power
from such registered holder. The undersigned must complete, execute and deliver
this Letter of Transmittal to indicate the action the undersigned desires to
take with respect to the Exchange Offer.
/_/ CHECK HERE IF TENDERED OLD FIRST PRIORITY NOTES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE FIRST PRIORITY
NOTES EXCHANGE AGENT WITH A BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution: __________________________
/_/ The Depository Trust Company
Account Number: __________________________
Transaction Code Number: __________________________
Holders whose Old First Priority Notes are not immediately available or who
cannot deliver their Old First Priority Notes and all other documents required
hereby to the Old Priority Notes Exchange Agent on or prior to the Expiration
Date must tender their Old First Priority Notes according to the guaranteed
delivery procedure set forth in the Prospectus under the caption "The Exchange
Offer-Guaranteed Delivery Procedures." See Instruction 2.
2
<PAGE>
/_/ CHECK HERE IF TENDERED OLD FIRST PRIORITY NOTES ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s): __________________________
Name of Eligible Institution that Guaranteed Delivery: ________________________
If delivered by book-entry transfer:
Account Number: __________________________
Transaction Code Number: __________________________
/_/ CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE ADDITIONAL COPIES
OF THE PROSPECTUS AND COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO THAT
ARE DISTRIBUTED DURING THE ONE-YEAR PERIOD FOLLOWING THE EXPIRATION DATE.
Name: ____________________________
Address: _________________________
__________________________________
3
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Companies the principal amount of the Old
First Priority Notes indicated above. Subject to, and effective upon, the
acceptance for exchange of such Old First Priority Notes tendered hereby, the
undersigned hereby exchanges, assigns and transfers to, or upon the order of,
the Companies all right, title and interest in and to such Old First Priority
Notes as are being tendered hereby, including all rights to accrued and unpaid
interest thereon as of the Expiration Date. The undersigned hereby irrevocably
constitutes and appoints the Old Priority Notes Exchange Agent the true and
lawful agent and attorney-in-fact of the undersigned (with full knowledge that
said Old Priority Notes Exchange Agent acts as the agent of the Companies in
connection with the Exchange Offer) to cause the Old First Priority Notes to be
assigned, transferred and exchanged. The undersigned represents and warrants
that it has full power and authority to tender, exchange, assign and transfer
the Old First Priority Notes and to acquire New First Priority Notes issuable
upon the exchange of such tendered Old First Priority Notes, and that when the
same are accepted for exchange, the Companies will acquire good and unencumbered
title to the tendered Old First Priority Notes, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claim.
The undersigned acknowledges that this Exchange Offer is being made in
reliance on interpretations by the staff of the Securities and Exchange
Commission set forth in no-action letters issued to third parties. Based on such
interpretations, the Companies believe that the New First Priority Notes issued
in exchange for the Old First Priority Notes pursuant to the Exchange Offer may
be offered for resale, resold and otherwise transferred by holders thereof
(other than any such holder that is an "affiliate" of the Companies within the
meaning of Rule 405 under the Securities Act of 1933, as amended (the
"Securities Act"), or a broker-dealer tendering Old First Priority Notes
acquired directly from the Companies or an affiliate thereof for its own
account) without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such New First Priority Notes
are acquired in the ordinary course of such holders' business and such holders
are not engaged in and do not intend to engage in a distribution of New First
Priority Notes and have no arrangement or understanding with any person to
participate in a distribution of New First Priority Notes.
By signing or electronically confirming this Letter of Transmittal, the
undersigned represents to the Companies that (i) the New First Priority Notes
acquired pursuant to the Exchange Offer are being obtained in the ordinary
course of such holder's business, (ii) the undersigned is not engaged in, and
does not intend to engage in, a distribution of the New First Priority Notes and
has no arrangement or understanding with any person to participate in a
distribution of the New First Priority Notes, and (iii) the undersigned is
neither an "affiliate" of the Companies within the meaning of Rule 405 under the
Securities Act nor a broker-dealer tendering Old First Priority Notes acquired
directly from the Companies or an affiliate thereof for its own account. If the
undersigned is an affiliate within the meaning of Rule 405 under the Securities
Act, it represents that it will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable.
If the undersigned is a broker-dealer that will receive New First Priority
Notes for its own account in exchange for Old First Priority Notes, it
represents that the Old First Priority Notes to be exchanged for the New First
Priority Notes were acquired by it as a result of market-making activities or
other trading activities and acknowledges that it will deliver a prospectus in
connection with any resale of such New First Priority Notes; however, by so
acknowledging and by delivering a prospectus, the undersigned will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
The undersigned also warrants that it will, upon request, execute and
deliver any additional documents deemed by the Old Priority Notes Exchange Agent
or the Companies to be necessary or desirable to complete the exchange,
assignment and transfer of tendered Old First Priority Notes or transfer
ownership of such Old First Priority Notes on the account books maintained by a
book-entry transfer facility.
The Exchange Offer is subject to certain conditions set forth in the
Prospectus under the caption "Conditions to the Exchange Offer." The undersigned
recognizes that as a result of these conditions (which may be waived, in whole
or in part, by the Companies), as more particularly set forth in the Prospectus,
the Companies may not be required to exchange any of the Old First Priority
Notes tendered hereby and, in such event, the Old First Priority Notes not
exchanged will be returned to the undersigned at the address shown below the
signature of the undersigned.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Tendered Old First Priority Notes may be
withdrawn at any time prior to the Expiration Date.
4
<PAGE>
Unless otherwise indicated in the box entitled "Special Registration
Instructions" or the box entitled "Special Delivery Instructions" in this Letter
of Transmittal, certificates for all New First Priority Notes delivered in
exchange for tendered Old First Priority Notes, and any Old First Priority Notes
delivered herewith but not exchanged, will be registered in the name of the
undersigned and shall be delivered to the undersigned at the address shown below
the signature of the undersigned. If a New Note is to be issued to a person
other than the person(s) signing this Letter of Transmittal, or if the New Note
is to be mailed to someone other than the person(s) signing this Letter of
Transmittal or to the person(s) signing this Letter of Transmittal at an address
different than the address shown on this Letter of Transmittal, the appropriate
boxes of this Letter of Transmittal should be completed. IF OLD FIRST PRIORITY
NOTES ARE SURRENDERED BY HOLDER(S) THAT HAVE COMPLETED EITHER THE BOX ENTITLED
"SPECIAL REGISTRATION INSTRUCTIONS" OR THE BOX ENTITLED "SPECIAL DELIVERY
INSTRUCTIONS" IN THIS LETTER OF TRANSMITTAL, SIGNATURE(S) ON THIS LETTER OF
TRANSMITTAL MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION (AS DEFINED IN
INSTRUCTION 4).
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD FIRST
PRIORITY NOTES TENDERED HEREBY" ABOVE AND SIGNING THIS LETTER OF TRANSMITTAL,
WILL BE DEEMED TO HAVE TENDERED THE OLD FIRST PRIORITY NOTES AS SET FORTH IN
SUCH BOX.
5
<PAGE>
SPECIAL REGISTRATION INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
To be completed ONLY if the To be completed ONLY if the
New First Priority Notes are to be New First Priority Notes are to be
issued in the name of someone other sent to someone other than the
than the undersigned. undersigned, or to the undersigned
at an address other than that shown
under "Description of Old First
Priority Notes Tendered Hereby."
Issue New Note to: Mail New Note to:
Name: _____________________________ Name: ___________________________
Address: __________________________ Address: ________________________
___________________________________ _________________________________
Book-Entry Transfer Facility Account: ___________________
Employer Identification or Social Security No.: ____________
(PLEASE PRINT OR TYPE) (PLEASE PRINT OR TYPE)
REGISTERED HOLDER(S) OF OLD FIRST PRIORITY NOTES SIGN HERE
(IN ADDITION, COMPLETE SUBSTITUTE FORM W-9 BELOW)
X ___________________________________________
X ___________________________________________
(SIGNATURE(S) OF REGISTERED HOLDER(S))
Must be signed by registered holder(s) exactly as name(s) appear(s) on the
Old First Priority Notes or on a security position listing as the owner of the
Old First Priority Notes or by person(s) authorized to become registered
holder(s) by properly completed bond powers transmitted herewith. If signature
is by attorney-in-fact, trustee, executor, administrator, guardian, officer of a
corporation or other person acting in a fiduciary capacity, please provide the
following information. (PLEASE PRINT OR TYPE):
Name and Capacity (full title): ________________________
Address (Including zip code): __________________________
__________________________
Area Code and Telephone Number: __________________________
Taxpayer Identification or Social Security No.: __________________________
Dated: __________________________
6
<PAGE>
SIGNATURE GUARANTEE (IF REQUIRED - SEE INSTRUCTION 4)
Authorized Signature: ___________________________________________________
(SIGNATURE OF REPRESENTATIVE OF SIGNATURE GUARANTOR)
Name and Title: ___________________________________________________
Name of Firm: ___________________________________________________
Area Code and Telephone Number: ___________________________________________
(PLEASE PRINT OR TYPE)
Dated: __________________
================================================================================
7
<PAGE>
PAYOR: Navigator Gas Transport PLC
THIS SUBSTITUTE FORM W-9 MUST BE COMPLETED AND SIGNED
Please provide your social security number or other taxpayer identification
number on the following Substitute Form W-9 and certify therein that you are
subject to backup withholding.
SUBSTITUTE FORM W-9
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
PAYOR'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER ("TIN") AND CERTIFICATION
<TABLE>
<S> <C>
PART I - PLEASE PROVIDE YOUR TIN IN THE BOX AT SOCIAL SECURITY NUMBER OR
RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. EMPLOYER IDENTIFICATION NUMBER:
----------------------------
PART II - CHECK THE BOX IF YOU ARE NOT /_/
SUBJECT TO BACKUP WITHHOLDING UNDER THE
PROVISIONS OF SECTION 3406(A)(I)(C) OF
THE INTERNAL REVENUE CODE BECAUSE (1) YOU ARE
EXEMPT FROM BACKUP WITHHOLDING, (2) YOU HAVE
NOT BEEN NOTIFIED BY THE INTERNAL REVENUE
SERVICE THAT YOU ARE SUBJECT TO BACKUP
WITHHOLDING AS A RESULT OF FAILURE TO REPORT
ALL INTEREST OR DIVIDENDS OR (3) THE INTERNAL
REVENUE SERVICE HAS NOTIFIED YOU THAT YOU ARE
NO LONGER SUBJECT TO BACKUP WITHHOLDING
PART III - CERTIFICATION: UNDER PENALTIES OF
PERJURY, I CERTIFY THAT THE INFORMATION
PROVIDED ON THIS FORM IS TRUE, CORRECT AND
COMPLETE.
NAME: ___________________________________
ADDRESS: ________________________________
_________________________________________
SIGNATURE:______________________________
DATE: ____________________________________
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY
IMPOSED BY THE IRS AND BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU
PURSUANT TO THE OFFERS. PLEASE REVIEW THE "GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
8
<PAGE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE
BOX IN PART III OF SUBSTITUTE FORM W-9:
CERTIFICATE OF AWAITING TAX IDENTIFICATION NUMBER
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER
HAS NOT BEEN ISSUED TO ME, AND EITHER (A) I HAVE MAILED OR DELIVERED AN
APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE
INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE, OR (B)
I INTEND TO MAIL OR DELIVER AN APPLICATION IN THE NEAR FUTURE. I UNDERSTAND THAT
IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER WITHIN 60 DAYS, 31% OF ALL
REPORTABLE PAYMENTS MADE TO ME THEREAFTER WILL BE WITHHELD UNTIL I PROVIDE A
NUMBER.
Signature:__________________________ Date:_____________________
9
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES.
All physically delivered Old First Priority Notes or confirmation of any
book-entry transfer to the First Priority Notes Exchange Agent's account at a
book-entry transfer facility of Old First Priority Notes tendered by book-entry
transfer, as well as a properly completed and duly executed copy of this Letter
of Transmittal or facsimile thereof (or electronic confirmation thereof), and
any other documents required by this Letter of Transmittal, must be received by
the First Priority Notes Exchange Agent at any of its addresses set forth herein
on or prior to the Expiration Date. THE METHOD OF DELIVERY OF THIS LETTER OF
TRANSMITTAL, THE OLD FIRST PRIORITY NOTES AND ANY OTHER REQUIRED DOCUMENTS,
INCLUDING DELIVERY THROUGH BOOK ENTRY TRANSFER, IS AT THE ELECTION AND RISK OF
THE HOLDER AND, EXCEPT AS OTHERWISE PROVIDED BELOW, DELIVERY WILL BE VALID ONLY
WHEN ACTUALLY RECEIVED BY THE FIRST PRIORITY NOTES EXCHANGE AGENT. INSTEAD OF
DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN OVERNIGHT OR HAND
DELIVERY SERVICE. IF DELIVERY IS BY MAIL, IT IS SUGGESTED THAT REGISTERED MAIL
WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, BE USED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO PERMIT TIMELY DELIVERY.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering Holders, by execution of this Letter of Transmittal (or
facsimile thereof), shall waive any right to receive notice of the acceptance of
the Existing First Priority Notes for exchange.
DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH HEREIN, OR INSTRUCTIONS VIA
FACSIMILE TO A NUMBER OTHER THAN THE ONE SET FORTH HEREIN, WILL NOT CONSTITUTE
VALID DELIVERY.
2. GUARANTEED DELIVERY PROCEDURES.
Holders who wish to tender their Old First Priority Notes and who do not
hold their Old First Priority Notes through a book-entry transfer facility, but
whose Old First Priority Notes are not immediately available or who cannot
deliver their Old First Priority Notes, the Letter of Transmittal or any other
required documents to the First Priority Notes Exchange Agent (or complete the
procedures for book-entry transfer) prior to the Expiration Date, may effect a
tender if:
(a) the tender is made through a member firm of a registered national
securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an
office or correspondent in the United States or an "eligible
guarantor institution" within the meaning of Rule 17Ad-15 under
the Exchange Act (an "Eligible Institution");
(b) prior to the Expiration Date, the First Priority Notes Exchange
Agent receives from such Eligible Institution a properly
completed and duly executed Notice of Guaranteed Delivery (by
facsimile transmission, mail or hand delivery) setting forth the
name and address of the Holder, the certificate number(s) of such
Old First Priority Notes and the principal amount of Old First
Priority Notes tendered, stating that the tender is being made
thereby and guaranteeing what, within five New York Stock
Exchange trading days after the Expiration Date or the execution
of the Notice of Guaranteed Delivery, the Letter of Transmittal
(or facsimile thereof), together with the certificate(s)
representing the Old First Priority Notes (or a confirmation of
book-entry transfer of such Old First Priority Notes into the
First Priority Notes Exchange Agent's account at the Book Entry
Transfer Facility) and any other documents required by the Letter
of Transmittal, will be deposited by the Eligible Institution
with the First Priority Notes Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal (or
facsimile thereof), as well as the certificate(s) representing
all tendered Old First Priority Notes in proper form for transfer
(or a confirmation of book-entry transfer of such Old First
Priority Notes into the First Priority Notes Exchange Agent's
account at the Book-Entry Transfer Facility) and all other
documents required by the Letter of Transmittal, are received by
the First Priority Notes Exchange Agent within five New York
Stock Exchange trading days after the Expiration Date.
Upon request to the First Priority Notes Exchange Agent, a Notice of
Guaranteed Delivery will be sent to Holders who wish to tender their Old First
Priority Notes according to the guaranteed delivery procedures set forth above.
Any Holder who wishes to tender Old First Priority Notes pursuant to the
guaranteed delivery procedures described above must
10
<PAGE>
ensure that the First Priority Notes Exchange Agent receives the Notice of
Guaranteed Delivery relating to such Old First Priority Notes prior to the
Expiration Date. Failure to complete the guaranteed delivery procedures outlined
above will not, of itself, affect the validity or effect a revocation of any
Letter of Transmittal form properly completed and executed by a Holder who
attempted to use the guaranteed delivery procedures.
3. PARTIAL TENDERS; WITHDRAWALS.
If less than the entire principal amount of Old First Priority Notes
evidenced by a submitted certificate is tendered, the tendering Holder should
fill in the principal amount tendered in the column entitled "Principal Amount
Tendered" of the box entitled "Description of Old First Priority Notes Tendered
Hereby." A newly issued Old Note for the principal amount of Old First Priority
Notes submitted but not tendered will be sent to such Holder as soon as
practicable after the Expiration Date. Subject to minimum denominations of
$100,000 and integral multiples of $1,000 in excess thereof, $1,000 principal
amount of New First Priority Notes is offered in exchange for each $1,000
principal amount of Old First Priority Notes. All Old First Priority Notes
delivered to the First Priority Notes Exchange Agent will be deemed to have been
tendered in full unless otherwise indicated.
Old First Priority Notes tendered pursuant to the Exchange Offer may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration
Date, after which time tenders of Old First Priority Notes are irrevocable. To
be effective, a written or facsimile transmission notice of withdrawal (or a
written or electronic transmission notice of withdrawal through DTC's system for
DTC participants) must be timely received by the First Priority Notes Exchange
Agent. Any such notice of withdrawal must (i) specify the name of the person
having deposited the Old First Priority Notes to be withdrawn (the "Depositor"),
(ii) identify the Old First Priority Notes to be withdrawn (including the
registration number(s) and principal amount of such Old First Priority Notes or,
in the case of Old First Priority Notes transferred by book-entry transfer, the
name and number of the account at the Book-Entry Transfer Facility to be
credited), (iii) be signed or confirmed by the Holder in the same manner as the
original signature on or confirmation of this Letter of Transmittal (including
any required signature guarantees) or be accompanied by documents of transfer
sufficient to have the Trustee with respect to the Old First Priority Notes
register the transfer of such Old First Priority Notes into the name of the
person withdrawing the tender and (iv) specify the name in which any such Old
First Priority Notes are to be registered, if different from that of the
Depositor. If Old First Priority Notes have been delivered pursuant to
procedures for book-entry transfer, any notice of withdrawal must otherwise
comply with DTC's procedures. All questions as to the validity, form and
eligibility (including time of receipt) of such notices will be determined by
Navigator Gas Transport, whose determination shall be final and binding on all
parties. Any Old First Priority Notes so withdrawn will be deemed not to have
been validly tendered for purposes of the Exchange Offer and no New First
Priority Notes will be issued with respect thereto unless the Old First Priority
Notes so withdrawn are validly retendered. Any Old First Priority Notes which
have been tendered but which are not accepted for exchange will be returned to
the Holder thereof without cost to such Holder as soon as practicable after
withdrawal, rejection of tender or termination of the Exchange Offer. Properly
withdrawn Old First Priority Notes may be retendered by following the procedures
for tender described above.
4. SIGNATURE ON THIS LETTER OF TRANSMITTAL; WRITTEN INSTRUMENTS AND
ENDORSEMENTS; GUARANTEE OF SIGNATURES.
If this Letter of Transmittal is signed by the registered Holder(s) of the
Old First Priority Notes tendered hereby, the signature must correspond with the
name(s) as written on the face of the certificates without alteration or
enlargement or any change whatsoever. If this Letter of Transmittal is signed by
a participant in the Book-Entry Transfer Facility, the signature must correspond
with the name as it appears on the security position listing as the owner of the
Old First Priority Notes.
If any of the Old First Priority Notes tendered hereby are owned of record
by two or more joint owners, all such owners must sign this Letter of
Transmittal.
If a number of Old First Priority Notes registered in different names are
tendered, it will be necessary to complete, sign and submit as many separate
copies of this Letter of Transmittal as there are different registrations of Old
First Priority Notes.
Signatures of this Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an Eligible Institution unless the Old First
Priority Notes tendered hereby are tendered (i) by a registered Holder who has
not completed the box entitled "Special Registration Instructions" or "Special
Delivery Instructions" on the Letter of Transmittal or (ii) for the account of
an Eligible Institution.
If this Letter of Transmittal is signed by the registered Holder or Holders
of Old First Priority Notes (which term, for the purposes described herein,
shall include a participant in the Book-Entry Transfer Facility whose name
appears on a security listing as the owner of the Old First Priority Notes)
listed and tendered hereby, no endorsements of the tendered Old First Priority
Notes or separate written instruments of transfer or exchange are required. In
any other case, the registered Holder (or
11
<PAGE>
acting Holder) must either properly endorse the Old First Priority Notes or
transmit properly completed bond powers with this Letter of Transmittal (in
either case, executed exactly as the name(s) of the registered Holder(s)
appear(s) on the Old First Priority Notes, and, with respect to a participant in
the Book-Entry Transfer Facility whose name appears on a security position
listing as the owner of Old First Priority Notes, exactly as the name of the
participant appears on such security position listing), with the signature on
the Old First Priority Notes or bond power guaranteed by an Eligible Institution
(except where the Old First Priority Notes are tendered for the account of an
Eligible Institution).
If this Letter of Transmittal, any certificates or separate written
instruments of transfer or exchange are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, such persons should so
indicate when signing, and, unless waived by Navigator Gas Transport, proper
evidence satisfactory to Navigator Gas Transport of their authority so to act
must be submitted.
5. SPECIAL REGISTRATION AND DELIVERY INSTRUCTIONS.
Tendering Holders should indicate, in the applicable box, the name and
address (or account at the Book-Entry Transfer Facility) in which the New First
Priority Notes or substitute Old First Priority Notes for principal amounts not
tendered or not accepted for exchange are to be issued (or deposited), if
different from the names and addresses or accounts of the person signing this
Letter of Transmittal. In the case of issuance in a different name, the employer
identification number or social security number of the person named must also be
indicated and the tendering Holder should complete the applicable box.
If no instructions are given, the New First Priority Notes (and any Old
First Priority Notes not tendered or not accepted) will be issued in the name of
and sent to the acting Holder of the Old First Priority Notes or deposited at
such Holder's account at the Book-Entry Transfer Facility.
6. TRANSFER TAXES.
Navigator Gas Transport shall pay all transfer taxes, if any, applicable to
the transfer and exchange of Old First Priority Notes pursuant to the Exchange
Offer. If, however, certificates representing the New First Priority Notes or
the Old First Priority Notes for principal amounts not tendered or accepted for
exchange are to be delivered to, or are to be issued in the name of, any person
other than the registered Holder of the Old First Priority Notes tendered, or if
tendered Old First Priority Notes are registered in the name of any person other
than the person signing the Letter of Transmittal, or if a transfer tax is
imposed for any reason other than the exchange of the Old First Priority Notes
pursuant to the Exchange Offer, then the amount of any such transfer taxes
(whether imposed on the registered Holder or any other person) will be payable
by the tendering Holder. If satisfactory evidence of payment of such taxes or
exception therefrom is not submitted herewith, the amount of such transfer taxes
will be collected from the tendering Holder by the First Priority Notes Exchange
Agent.
Except as provided in this Instruction 6, it will not be necessary for
transfer stamps to be affixed to the Old First Priority Notes listed in this
Letter of Transmittal.
7. WAIVER OF CONDITIONS.
Navigator Gas Transport reserves the right, in its reasonable judgment, to
waive, in whole or in part, any of the conditions to the Exchange Offer set
forth in the Prospectus.
8. MUTILATED, LOST, STOLEN OR DESTROYED NOTES.
Any Holder whose Old First Priority Notes have been mutilated, lost, stolen
or destroyed should contact the First Priority Notes Exchange Agent at the
address indicated above for further instructions.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering as well as requests for
additional copies of the Prospectus and this Letter of Transmittal, may be
directed to the First Priority Notes Exchange Agent at the address and telephone
number(s) set forth above. In addition, all questions relating to the Exchange
Offer, as well as requests for assistance or additional copies of the Prospectus
and this Letter of Transmittal, may be directed to Navigator Gas Transport, c/o
Cambridge Fund Management, LLC, 750 Lexington Avenue, 30th Floor, New York, New
York, 10022, telephone number: (212) 527-2525.
10. VALIDITY AND FORM.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Old First Priority Notes and withdrawal of
tendered Old First Priority Notes will be determined by Navigator Gas Transport
in its sole
12
<PAGE>
discretion, which determination will be final and binding. Navigator Gas
Transport reserves the absolute right to reject any and all Old First Priority
Notes not properly tendered or any Old First Priority Notes the acceptance of
which would, in the opinion of counsel for Navigator Gas Transport, be unlawful.
Navigator Gas Transport also reserves the right to waive any defects,
irregularities or conditions of tender as to particular Old First Priority
Notes. Navigator Gas Transport's interpretation of the terms and conditions of
the Exchange Offer (including the instructions in this Letter of Transmittal)
will be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Old First Priority Notes must be
cured within such time as Navigator Gas Transport shall determine. Although
Navigator Gas Transport intends to notify Holders of defects or irregularities
with respect to tenders of Old First Priority Notes, none of Navigator Gas
Transport, the First Priority Notes Exchange Agent or any other person shall
incur any liability for failure to give such notification. Tenders of Old First
Priority Notes will not be deemed to have been made until such defects or
irregularities have been cured or waived. Any Old First Priority Notes received
by the First Priority Notes Exchange Agent that are not properly tendered and as
to which the defects or irregularities have not been cured or waived will be
returned by the First Priority Notes Exchange Agent to the tendering Holders as
soon as practicable following the Expiration Date.
IMPORTANT TAX INFORMATION
Under federal income tax law, a Holder tendering Old First Priority Notes
is required to provide the First Priority Notes Exchange Agent with such
Holder's correct TIN on Substitute Form W-9 above. If such Holder is an
individual, the TIN is the Holder's social security number. The Certificate of
Awaiting Taxpayer Identification Number should be completed if the tendering
Holder has not been issued a TIN and has applied for a number or intends to
apply for a number in the near future. If the First Priority Notes Exchange
Agent is not provided with the correct TIN, the Holder may be subject to a $50
penalty imposed by the Internal Revenue Service. In addition, payments that are
made to such Holder with respect to tendered Old First Priority Notes may be
subject to backup withholding.
Certain Holders (including, among others, all domestic corporations and
certain foreign individuals and foreign entities) are not subject to these
backup withholding and reporting requirements. Such a Holder who satisfies one
or more of the conditions set forth in Part 2 of the Substitute Form W-9 should
execute the certification following such Part 2. In order for a foreign Holder
to qualify as an exempt recipient, that Holder must submit to the First Priority
Notes Exchange Agent a properly completed Internal Revenue Service Form W-8,
signed under penalties of perjury, attesting to that Holder's exempt status.
Such forms can be obtained from the First Priority Notes Exchange Agent.
If backup withholding applies, the First Priority Notes Exchange Agent is
required to withhold 31% of any amounts otherwise payable to the Holder. Backup
withholding is not an additional tax. Rather, the tax liability of persons
subject to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained from
the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9.
To prevent backup withholding on payments that are made to a Holder with
respect to Old First Priority Notes tendered for exchange, the Holder is
required to notify the First Priority Notes Exchange Agent of his or her correct
TIN by completing the form herein certifying that the TIN provided on Substitute
Form W-9 is correct (or that such Holder is awaiting a TIN) and that (i) each
Holder is exempt, (ii) such Holder has not been notified by the Internal Revenue
Service that he or she is subject to backup withholding as a result of failure
to report all interest or dividends or (iii) the Internal Revenue Service has
notified such Holder that he or she is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE FIRST PRIORITY NOTES EXCHANGE AGENT.
Each Holder is required to give the First Priority Notes Exchange Agent the
social security number or employer identification number of the record Holder(s)
of the Old First Priority Notes. If Old First Priority Notes are in more than
one name or are not in the name of the actual Holder, consult the instructions
on Internal Revenue Service Form W-9, which may be obtained from the First
Priority Notes Exchange Agent, for additional guidance on which number to
report.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER.
If the tendering Holder has not been issued a TIN and has applied for a
number or intends to apply for a number in the near future, write "Applied For"
in the space for the TIN on Substitute Form W-9, sign and date the form and the
Certificate of Awaiting Taxpayer Identification Number and return them to the
First Priority Notes Exchange Agent. If such certificate is completed and the
First Priority Notes Exchange Agent is not provided with the TIN within 60 days,
the First Priority Notes Exchange Agent will withhold 31% of all payments made
thereafter until a TIN is provided to the First Priority Notes Exchange Agent.
13
<PAGE>
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE THEREOF (TOGETHER WITH
THE OLD FIRST PRIORITY NOTES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL
OTHER REQUIRED DOCUMENTS) OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY
THE FIRST PRIORITY NOTES EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.
14
LETTER OF TRANSMITTAL
OFFER TO EXCHANGE ANY AND ALL OF THE OUTSTANDING
12% SECOND PRIORITY SHIP MORTGAGE NOTES DUE 2007,
FOR
12% SECOND PRIORITY SHIP MORTGAGE NOTES DUE 2007
THAT HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED,
OF
NAVIGATOR GAS TRANSPORT PLC,
PURSUANT TO THE PROSPECTUS DATED _______, 1999
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON ___________, 1999,
UNLESS THE OFFER IS EXTENDED
To Chase Manhattan Bank
(the "Second Priority Notes Exchange Agent")
BY REGISTERED OR CERTIFIED MAIL: BY HAND (UNTIL 5:00 PM.,
NEW YORK TIME):
55 Water Street 55 Water Street
New York, New York 10041 New York, New York 10041
Attention: Carlos Esteves Attention: Carlos Esteves
BY OVERNIGHT MAIL OR COURIER, OR BY HAND: BY FACSIMILE (UNTIL 5:00 PM.,
55 Water Street NEW YORK TIME)
New York, New York 10041 (FOR ELIGIBLE INSTITUTIONS ONLY):
Attention: Carlos Esteves (212) 638-7380
confirm by telephone (212) 638-0828
Delivery of this Letter of Transmittal to an address other than as set
forth above or transmission of instructions via facsimile to a number other than
the one listed above will not constitute valid delivery. The instructions
accompanying this Letter of Transmittal should be read carefully before
completing this Letter of Transmittal.
The undersigned hereby acknowledges receipt of the Prospectus dated
_______, 1999 (the "Prospectus") of Navigator Gas Transport PLC, ("Navigator Gas
Transport"), Navigator Gas (IOM I-A) Limited, Navigator Gas (IOM-I-B) Limited,
Navigator Gas (IOM I-C) Limited, Navigator Gas (IOM I-D) Limited, and Navigator
Gas (IOM I-E) Limited, (each an "Owner", and together with Navigator Gas
Transport, the "Companies") and this Letter of Transmittal, which together
constitute the offer of Navigator Gas Transport (the "Exchange Offer") to
exchange up to $87,000,000 in aggregate principal amount of its outstanding
unregistered 12% Second Priority Ship Mortgage Notes due 2007 (the "Old Second
Priority Notes") for a like principal amount of its registered 12% Second
Priority Ship Mortgage Notes due 2007 (the "New Second Priority Notes"). Old
Second Priority Notes may be tendered only in minimum denominations of $100,000
and integral multiples of $1,000 in excess thereof. The term "Expiration Date"
shall mean 5:00 p.m., New York City time, on ___________, 1999, unless Navigator
Gas Transport, in its sole discretion, extends the Exchange Offer, in which case
the term shall mean the latest date and time to which the Exchange Offer is
extended. Capitalized terms used but not defined herein have the meaning given
to them in the Prospectus.
<PAGE>
YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE
INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED.
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS
AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE SECOND PRIORITY NOTES
EXCHANGE AGENT.
List below the Old Second Priority Notes to which this Letter of
Transmittal relates. If the space indicated below is inadequate, the Certificate
or Registration Numbers and Principal Amounts should be listed on a separately
signed schedule affixed hereto.
DESCRIPTION OF OLD SECOND PRIORITY NOTES TENDERED HEREBY
<TABLE>
<CAPTION>
Certificate Aggregate Principal
or Amount Represented by
Name(s) and Address(es) of Registered Holder(s) Registration Old Second Priority Principal Amount
(Please fill in) Numbers* Notes Tendered**
- ----------------------------------------------- ------------ --------------------- -----------------
<S> <C> <C> <C>
Total
============ ===================== =================
</TABLE>
* Need not be completed by book-entry Holders.
** Unless otherwise indicated, the Holder will be deemed to have tendered the
full aggregate principal amount represented by such Old Second Priority
Notes. All tenders must be in minimum denominations of $100,000 and
integral multiples of $1,000 thereafter.
This Letter of Transmittal is to be used (i) if certificates of Old Second
Priority Notes are to be forwarded herewith, (ii) if delivery of Old Second
Priority Notes is to be made by book-entry transfer to an account maintained by
the Second Priority Notes Exchange Agent at The Depository Trust Company,
pursuant to the procedures set forth in "The Exchange Offer-Procedures for
Tendering" in the Prospectus or (iii) if tender of the Old Second Priority Notes
is to be made according to the guaranteed delivery procedures described in the
Prospectus under the caption "The Exchange Offer-Guaranteed Delivery
Procedures." See Instruction 2. Delivery of documents to a book-entry transfer
facility does not constitute delivery to the Second Priority Notes Exchange
Agent.
The term "Holder" with respect to the Exchange Offer means any person in
whose name Old Second Priority Notes are registered on the books of Navigator
Gas Transport or any other person who has obtained a properly completed bond
power from such registered holder. The undersigned must complete, execute and
deliver this Letter of Transmittal to indicate the action the undersigned
desires to take with respect to the Exchange Offer.
/_/ CHECK HERE IF TENDERED OLD SECOND PRIORITY NOTES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE SECOND PRIORITY
NOTES EXCHANGE AGENT WITH A BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution: ______________________________
/_/ The Depository Trust Company
Account Number: ______________________________
Transaction Code Number: ______________________________
Holders whose Old Second Priority Notes are not immediately available or
who cannot deliver their Old Second Priority Notes and all other documents
required hereby to the Second Priority Notes Exchange Agent on or prior to the
Expiration Date must tender their Old Second Priority Notes according to the
guaranteed delivery procedure set forth in the Prospectus under the caption "The
Exchange Offer-Guaranteed Delivery Procedures." See Instruction 2.
/_/ CHECK HERE IF TENDERED OLD SECOND PRIORITY NOTES ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING:
2
<PAGE>
Name of Registered Holder(s): _________________________________________________
Name of Eligible Institution that Guaranteed Delivery: ________________________
If delivered by book-entry transfer:
Account Number: ___________________________________
Transaction Code Number: ____________________________
/_/ CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE ADDITIONAL COPIES
OF THE PROSPECTUS AND COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO THAT
ARE DISTRIBUTED DURING THE ONE-YEAR PERIOD FOLLOWING THE EXPIRATION DATE.
Name:____________________________________
Address: ________________________________
_________________________________________
3
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Companies the principal amount of the Old
Second Priority Notes indicated above. Subject to, and effective upon, the
acceptance for exchange of such Old Second Priority Notes tendered hereby, the
undersigned hereby exchanges, assigns and transfers to, or upon the order of,
the Companies all right, title and interest in and to such Old Second Priority
Notes as are being tendered hereby, including all rights to accrued and unpaid
interest thereon as of the Expiration Date. The undersigned hereby irrevocably
constitutes and appoints the Second Priority Notes Exchange Agent the true and
lawful agent and attorney-in-fact of the undersigned (with full knowledge that
said Second Priority Notes Exchange Agent acts as the agent of the Companies in
connection with the Exchange Offer) to cause the Old Second Priority Notes to be
assigned, transferred and exchanged. The undersigned represents and warrants
that it has full power and authority to tender, exchange, assign and transfer
the Old Second Priority Notes and to acquire New Second Priority Notes issuable
upon the exchange of such tendered Old Second Priority Notes, and that when the
same are accepted for exchange, the Companies will acquire good and unencumbered
title to the tendered Old Second Priority Notes, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claim.
The undersigned acknowledges that this Exchange Offer is being made in
reliance on interpretations by the staff of the Securities and Exchange
Commission set forth in no-action letters issued to third parties. Based on such
interpretations, the Companies believe that the New Second Priority Notes issued
in exchange for the Old Second Priority Notes pursuant to the Exchange Offer may
be offered for resale, resold and otherwise transferred by holders thereof
(other than any such holder that is an "affiliate" of the Companies within the
meaning of Rule 405 under the Securities Act of 1933, as amended (the
"Securities Act"), or a broker-dealer tendering Old Second Priority Notes
acquired directly from the Companies or an affiliate thereof for its own
account) without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such New Second Priority Notes
are acquired in the ordinary course of such holders' business and such holders
are not engaged in and do not intend to engage in a distribution of New Second
Priority Notes and have no arrangement or understanding with any person to
participate in a distribution of New Second Priority Notes.
By signing or electronically confirming this Letter of Transmittal, the
undersigned represents to the Companies that (i) the New Second Priority Notes
acquired pursuant to the Exchange Offer are being obtained in the ordinary
course of such holder's business, (ii) the undersigned is not engaged in, and
does not intend to engage in, a distribution of the New Second Priority Notes
and has no arrangement or understanding with any person to participate in a
distribution of the New Second Priority Notes, and (iii) the undersigned is
neither an "affiliate" of the Companies within the meaning of Rule 405 under the
Securities Act nor a broker-dealer tendering Old Second Priority Notes acquired
directly from the Companies or an affiliate thereof for its own account. If the
undersigned is an affiliate within the meaning of Rule 405 under the Securities
Act, it represents that it will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent applicable.
If the undersigned is a broker-dealer that will receive Exchange Second
Priority Notes for its own account in exchange for Old Second Priority Notes, it
represents that the Old Second Priority Notes to be exchanged for the New Second
Priority Notes were acquired by it as a result of market-making activities or
other trading activities and acknowledges that it will deliver a prospectus in
connection with any resale of such New Second Priority Notes; however, by so
acknowledging and by delivering a prospectus, the undersigned will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
The undersigned also warrants that it will, upon request, execute and
deliver any additional documents deemed by the Second Priority Notes Exchange
Agent or the Companies to be necessary or desirable to complete the exchange,
assignment and transfer of tendered Old Second Priority Notes or transfer
ownership of such Old Second Priority Notes on the account books maintained by a
book-entry transfer facility.
The Exchange Offer is subject to certain conditions set forth in the
Prospectus under the caption "Conditions to the Exchange Offer." The undersigned
recognizes that as a result of these conditions (which may be waived, in whole
or in part, by the Companies), as more particularly set forth in the Prospectus,
the Companies may not be required to exchange any of the Old Second Priority
Notes tendered hereby and, in such event, the Old Second Priority Notes not
exchanged will be returned to the undersigned at the address shown below the
signature of the undersigned.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Tendered Old Second Priority Notes may be
withdrawn at any time prior to the Expiration Date.
4
<PAGE>
Unless otherwise indicated in the box entitled "Special Registration
Instructions" or the box entitled "Special Delivery Instructions" in this Letter
of Transmittal, certificates for all New Second Priority Notes delivered in
exchange for tendered Old Second Priority Notes, and any Old Second Priority
Notes delivered herewith but not exchanged, will be registered in the name of
the undersigned and shall be delivered to the undersigned at the address shown
below the signature of the undersigned. If a New Note is to be issued to a
person other than the person(s) signing this Letter of Transmittal, or if the
New Note is to be mailed to someone other than the person(s) signing this Letter
of Transmittal or to the person(s) signing this Letter of Transmittal at an
address different than the address shown on this Letter of Transmittal, the
appropriate boxes of this Letter of Transmittal should be completed. IF OLD
SECOND PRIORITY NOTES ARE SURRENDERED BY HOLDER(S) THAT HAVE COMPLETED EITHER
THE BOX ENTITLED "SPECIAL REGISTRATION INSTRUCTIONS" OR THE BOX ENTITLED
"SPECIAL DELIVERY INSTRUCTIONS" IN THIS LETTER OF TRANSMITTAL, SIGNATURE(S) ON
THIS LETTER OF TRANSMITTAL MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION (AS
DEFINED IN INSTRUCTION 4).
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD SECOND
PRIORITY NOTES TENDERED HEREBY" ABOVE AND SIGNING THIS LETTER OF TRANSMITTAL,
WILL BE DEEMED TO HAVE TENDERED THE OLD SECOND PRIORITY NOTES AS SET FORTH IN
SUCH BOX.
5
<PAGE>
SPECIAL REGISTRATION INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
To be completed ONLY if the To be completed ONLY if the
New Second Priority Notes are to be New Second Priority Notes are to be
issued in the name of someone other sent to someone other than the
than the undersigned. undersigned, or to the undersigned
at an address other than that shown
under "Description of Old Second
Priority Notes Tendered Hereby."
Issue New Note to: Mail New Note to:
Name: _____________________________ Name: ___________________________
Address: __________________________ Address: ________________________
___________________________________ _________________________________
Book-Entry Transfer Facility Account: ___________________
Employer Identification or Social Security No.: ____________
(PLEASE PRINT OR TYPE) (PLEASE PRINT OR TYPE)
REGISTERED HOLDER(S) OF OLD SECOND PRIORITY NOTES SIGN HERE
(IN ADDITION, COMPLETE SUBSTITUTE FORM W-9 BELOW)
X ___________________________________________
X ___________________________________________
(SIGNATURE(S) OF REGISTERED HOLDER(S))
Must be signed by registered holder(s) exactly as name(s) appear(s) on the
Old Second Priority Notes or on a security position listing as the owner of the
Old Second Priority Notes or by person(s) authorized to become registered
holder(s) by properly completed bond powers transmitted herewith. If signature
is by attorney-in-fact, trustee, executor, administrator, guardian, officer of a
corporation or other person acting in a fiduciary capacity, please provide the
following information. (PLEASE PRINT OR TYPE):
Name and Capacity (full title): ________________________
Address (Including zip code): __________________________
__________________________
Area Code and Telephone Number: __________________________
Taxpayer Identification or Social Security No.: __________________________
Dated: __________________________
SIGNATURE GUARANTEE (IF REQUIRED - SEE INSTRUCTION 4)
Authorized Signature: ___________________________________________________
(SIGNATURE OF REPRESENTATIVE OF SIGNATURE GUARANTOR)
Name and Title: ___________________________________________________
6
<PAGE>
Name of Firm: ___________________________________________________
Area Code and Telephone Number: ___________________________________________
(PLEASE PRINT OR TYPE)
Dated: __________________
7
<PAGE>
PAYOR: Navigator Gas Transport PLC
THIS SUBSTITUTE FORM W-9 MUST BE COMPLETED AND SIGNED
Please provide your social security number or other taxpayer identification
number on the following Substitute Form W-9 and certify therein that you are
subject to backup withholding.
SUBSTITUTE FORM W-9
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
PAYOR'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER ("TIN") AND CERTIFICATION
<TABLE>
<S> <C>
PART I - PLEASE PROVIDE YOUR TIN IN THE BOX AT SOCIAL SECURITY NUMBER OR
RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. EMPLOYER IDENTIFICATION NUMBER:
----------------------------
PART II - CHECK THE BOX IF YOU ARE NOT /_/
SUBJECT TO BACKUP WITHHOLDING UNDER THE
PROVISIONS OF SECTION 3406(A)(I)(C) OF
THE INTERNAL REVENUE CODE BECAUSE (1) YOU ARE
EXEMPT FROM BACKUP WITHHOLDING, (2) YOU HAVE
NOT BEEN NOTIFIED BY THE INTERNAL REVENUE
SERVICE THAT YOU ARE SUBJECT TO BACKUP
WITHHOLDING AS A RESULT OF FAILURE TO REPORT
ALL INTEREST OR DIVIDENDS OR (3) THE INTERNAL
REVENUE SERVICE HAS NOTIFIED YOU THAT YOU ARE
NO LONGER SUBJECT TO BACKUP WITHHOLDING
PART III - CERTIFICATION: UNDER PENALTIES OF
PERJURY, I CERTIFY THAT THE INFORMATION
PROVIDED ON THIS FORM IS TRUE, CORRECT AND
COMPLETE.
NAME: ___________________________________
ADDRESS: ________________________________
_________________________________________
SIGNATURE:______________________________
DATE: ____________________________________
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY
IMPOSED BY THE IRS AND BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU
PURSUANT TO THE OFFERS. PLEASE REVIEW THE "GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
8
<PAGE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART
III OF SUBSTITUTE FORM W-9:
CERTIFICATE OF AWAITING TAX IDENTIFICATION NUMBER
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER
HAS NOT BEEN ISSUED TO ME, AND EITHER (A) I HAVE MAILED OR DELIVERED AN
APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE
INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE, OR (B)
I INTEND TO MAIL OR DELIVER AN APPLICATION IN THE NEAR FUTURE. I UNDERSTAND THAT
IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER WITHIN 60 DAYS, 31% OF ALL
REPORTABLE PAYMENTS MADE TO ME THEREAFTER WILL BE WITHHELD UNTIL I PROVIDE A
NUMBER.
Signature: ____________________________ Date: __________________
9
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES.
All physically delivered Old Second Priority Notes or confirmation of any
book-entry transfer to the Second Priority Notes Exchange Agent's account at a
book-entry transfer facility of Old Second Priority Notes tendered by book-entry
transfer, as well as a properly completed and duly executed copy of this Letter
of Transmittal or facsimile thereof (or electronic confirmation thereof), and
any other documents required by this Letter of Transmittal, must be received by
the Second Priority Notes Exchange Agent at any of its addresses set forth
herein on or prior to the Expiration Date. THE METHOD OF DELIVERY OF THIS LETTER
OF TRANSMITTAL, THE OLD SECOND PRIORITY NOTES AND ANY OTHER REQUIRED DOCUMENTS,
INCLUDING DELIVERY THROUGH BOOK-ENTRY TRANSFER, IS AT THE ELECTION AND RISK OF
THE HOLDER AND, EXCEPT AS OTHERWISE PROVIDED BELOW, DELIVERY WILL BE VALID ONLY
WHEN ACTUALLY RECEIVED BY THE SECOND PRIORITY NOTES EXCHANGE AGENT. INSTEAD OF
DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN OVERNIGHT OR HAND
DELIVERY SERVICE. IF DELIVERY IS BY MAIL, IT IS SUGGESTED THAT REGISTERED MAIL
WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, BE USED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO PERMIT TIMELY DELIVERY.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering Holders, by execution of this Letter of Transmittal (or
facsimile thereof), shall waive any right to receive notice of the acceptance of
the Old Second Priority Notes for exchange.
DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH HEREIN, OR INSTRUCTIONS VIA
FACSIMILE TO A NUMBER OTHER THAN THE ONE SET FORTH HEREIN, WILL NOT CONSTITUTE
VALID DELIVERY.
2. GUARANTEED DELIVERY PROCEDURES.
Holders who wish to tender their Old Second Priority Notes and who do not
hold their Old Second Priority Notes through a book-entry transfer facility, but
whose Old Second Priority Notes are not immediately available or who cannot
deliver their Old Second Priority Notes, the Letter of Transmittal or any other
required documents to the Second Priority Notes Exchange Agent (or complete the
procedures for book-entry transfer) prior to the Expiration Date, may effect a
tender if:
(a) the tender is made through a member firm of a registered national
securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an
office or correspondent in the United States or an "eligible
guarantor institution" within the meaning of Rule 17Ad-15 under
the Exchange Act (an "Eligible Institution");
(b) prior to the Expiration Date, the Second Priority Notes Exchange
Agent receives from such Eligible Institution a properly
completed and duly executed Notice of Guaranteed Delivery (by
facsimile transmission, mail or hand delivery) setting forth the
name and address of the Holder, the certificate number(s) of such
Old Second Priority Notes and the principal amount of Old Second
Priority Notes tendered, stating that the tender is being made
thereby and guaranteeing what, within five New York Stock
Exchange trading days after the Expiration Date or the execution
of the Notice of Guaranteed Delivery, the Letter of Transmittal
(or facsimile thereof), together with the certificate(s)
representing the Old Second Priority Notes (or a confirmation of
book-entry transfer of such Old Second Priority Notes into the
Second Priority Notes Exchange Agent's account at the Book-Entry
Transfer Facility) and any other documents required by the Letter
of Transmittal, will be deposited by the Eligible Institution
with the Second Priority Notes Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal (or
facsimile thereof), as well as the certificate(s) representing
all tendered Old Second Priority Notes in proper form for
transfer (or a confirmation of book-entry transfer of such Old
Second Priority Notes into the Second Priority Notes Exchange
Agent's account at the Book-Entry Transfer Facility) and all
other documents required by the Letter of Transmittal, are
received by the Second Priority Notes Exchange Agent within five
New York Stock Exchange trading days after the Expiration Date.
Upon request to the Second Priority Notes Exchange Agent, a Notice of
Guaranteed Delivery will be sent to Holders who wish to tender their Old Second
Priority Notes according to the guaranteed delivery procedures set forth above.
Any Holder who wishes to tender Old Second Priority Notes pursuant to the
guaranteed delivery procedures described above must ensure that the Second
Priority Notes Exchange Agent receives the Notice of Guaranteed Delivery
relating to such Old Second Priority Notes prior to the Expiration Date. Failure
to complete the guaranteed delivery procedures outlined above will not, of
10
<PAGE>
itself, affect the validity or effect a revocation of any Letter of Transmittal
form properly completed and executed by a Holder who attempted to use the
guaranteed delivery procedures.
3. PARTIAL TENDERS; WITHDRAWALS.
If less than the entire principal amount of Old Second Priority Notes
evidenced by a submitted certificate is tendered, the tendering Holder should
fill in the principal amount tendered in the column entitled "Principal Amount
Tendered" of the box entitled "Description of Old Second Priority Notes Tendered
Hereby." A newly issued Old Note for the principal amount of Old Second Priority
Notes submitted but not tendered will be sent to such Holder as soon as
practicable after the Expiration Date. Subject to minimum denominations of
$100,000 and integral multiples of $1,000 in excess thereof, $1,000 principal
amount of New Second Priority Notes is offered in exchange for each $1,000
principal amount of Old Second Priority Notes. All Old Second Priority Notes
delivered to the Second Priority Notes Exchange Agent will be deemed to have
been tendered in full unless otherwise indicated.
Old Second Priority Notes tendered pursuant to the Exchange Offer may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration
Date, after which time tenders of Old Second Priority Notes are irrevocable. To
be effective, a written or facsimile transmission notice of withdrawal (or a
written or electronic transmission notice of withdrawal through DTC's system for
DTC participants) must be timely received by the Second Priority Notes Exchange
Agent. Any such notice of withdrawal must (i) specify the name of the person
having deposited the Old Second Priority Notes to be withdrawn (the
"Depositor"), (ii) identify the Old Second Priority Notes to be withdrawn
(including the registration number(s) and principal amount of such Old Second
Priority Notes or, in the case of Old Second Priority Notes transferred by
book-entry transfer, the name and number of the account at the Book-Entry
Transfer Facility to be credited), (iii) be signed or confirmed by the Holder in
the same manner as the original signature on or confirmation of this Letter of
Transmittal (including any required signature guarantees) or be accompanied by
documents of transfer sufficient to have the Trustee with respect to the Old
Second Priority Notes register the transfer of such Old Second Priority Notes
into the name of the person withdrawing the tender and (iv) specify the name in
which any such Old Second Priority Notes are to be registered, if different from
that of the Depositor. If Old Second Priority Notes have been delivered pursuant
to procedures for book-entry transfer, any notice of withdrawal must otherwise
comply with DTC's procedures. All questions as to the validity, form and
eligibility (including time of receipt) of such notices will be determined by
Navigator Gas Transport, whose determination shall be final and binding on all
parties. Any Old Second Priority Notes so withdrawn will be deemed not to have
been validly tendered for purposes of the Exchange Offer and no New Second
Priority Notes will be issued with respect thereto unless the Old Second
Priority Notes so withdrawn are validly retendered. Any Old Second Priority
Notes which have been tendered but which are not accepted for exchange will be
returned to the Holder thereof without cost to such Holder as soon as
practicable after withdrawal, rejection of tender or termination of the Exchange
Offer. Properly withdrawn Old Second Priority Notes may be retendered by
following the procedures for tender described above.
4. SIGNATURE ON THIS LETTER OF TRANSMITTAL; WRITTEN INSTRUMENTS AND
ENDORSEMENTS; GUARANTEE OF SIGNATURES.
If this Letter of Transmittal is signed by the registered Holder(s) of the
Old Second Priority Notes tendered hereby, the signature must correspond with
the name(s) as written on the face of the certificates without alteration or
enlargement or any change whatsoever. If this Letter of Transmittal is signed by
a participant in the Book-Entry Transfer Facility, the signature must correspond
with the name as it appears on the security position listing as the owner of the
Old Second Priority Notes.
If any of the Old Second Priority Notes tendered hereby are owned of record
by two or more joint owners, all such owners must sign this Letter of
Transmittal.
If a number of Old Second Priority Notes registered in different names are
tendered, it will be necessary to complete, sign and submit as many separate
copies of this Letter of Transmittal as there are different registrations of Old
Second Priority Notes.
Signatures of this Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an Eligible Institution unless the Old Second
Priority Notes tendered hereby are tendered (i) by a registered Holder who has
not completed the box entitled "Special Registration Instructions" or "Special
Delivery Instructions" on the Letter of Transmittal or (ii) for the account of
an Eligible Institution.
If this Letter of Transmittal is signed by the registered Holder or Holders
of Old Second Priority Notes (which term, for the purposes described herein,
shall include a participant in the Book-Entry Transfer Facility whose name
appears on a security listing as the owner of the Old Second Priority Notes)
listed and tendered hereby, no endorsements of the tendered Old Second Priority
Notes or separate written instruments of transfer or exchange are required. In
any other case, the registered Holder (or acting Holder) must either properly
endorse the Old Second Priority Notes or transmit properly completed
11
<PAGE>
bond powers with this Letter of Transmittal (in either case, executed exactly as
the name(s) of the registered Holder(s) appear(s) on the Old Second Priority
Notes, and, with respect to a participant in the Book-Entry Transfer Facility
whose name appears on a security position listing as the owner of Old Second
Priority Notes, exactly as the name of the participant appears on such security
position listing), with the signature on the Old Second Priority Notes or bond
power guaranteed by an Eligible Institution (except where the Old Second
Priority Notes are tendered for the account of an Eligible Institution).
If this Letter of Transmittal, any certificates or separate written
instruments of transfer or exchange are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, such persons should so
indicate when signing, and, unless waived by Navigator Gas Transport, proper
evidence satisfactory to Navigator Gas Transport of their authority so to act
must be submitted.
5. SPECIAL REGISTRATION AND DELIVERY INSTRUCTIONS.
Tendering Holders should indicate, in the applicable box, the name and
address (or account at the Book-Entry Transfer Facility) in which the New Second
Priority Notes or substitute Old Second Priority Notes for principal amounts not
tendered or not accepted for exchange are to be issued (or deposited), if
different from the names and addresses or accounts of the person signing this
Letter of Transmittal. In the case of issuance in a different name, the employer
identification number or social security number of the person named must also be
indicated and the tendering Holder should complete the applicable box.
If no instructions are given, the New Second Priority Notes (and any Old
Second Priority Notes not tendered or not accepted) will be issued in the name
of and sent to the acting Holder of the Old Second Priority Notes or deposited
at such Holder's account at the Book-Entry Transfer Facility.
6. TRANSFER TAXES.
Navigator Gas Transport shall pay all transfer taxes, if any, applicable to
the transfer and exchange of Old Second Priority Notes pursuant to the Exchange
Offer. If, however, certificates representing the New Second Priority Notes or
the Old Second Priority Notes for principal amounts not tendered or accepted for
exchange are to be delivered to, or are to be issued in the name of, any person
other than the registered Holder of the Old Second Priority Notes tendered, or
if tendered Old Second Priority Notes are registered in the name of any person
other than the person signing the Letter of Transmittal, or if a transfer tax is
imposed for any reason other than the exchange of the Old Second Priority Notes
pursuant to the Exchange Offer, then the amount of any such transfer taxes
(whether imposed on the registered Holder or any other person) will be payable
by the tendering Holder. If satisfactory evidence of payment of such taxes or
exception therefrom is not submitted herewith, the amount of such transfer taxes
will be collected from the tendering Holder by the Second Priority Notes
Exchange Agent.
Except as provided in this Instruction 6, it will not be necessary for
transfer stamps to be affixed to the Old Second Priority Notes listed in this
Letter of Transmittal.
7. WAIVER OF CONDITIONS.
Navigator Gas Transport reserves the right, in its reasonable judgment, to
waive, in whole or in part, any of the conditions to the Exchange Offer set
forth in the Prospectus.
8. MUTILATED, LOST, STOLEN OR DESTROYED NOTES.
Any Holder whose Old Second Priority Notes have been mutilated, lost,
stolen or destroyed should contact the Second Priority Notes Exchange Agent at
the address indicated above for further instructions.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering as well as requests for
additional copies of the Prospectus and this Letter of Transmittal, may be
directed to the Second Priority Notes Exchange Agent at the address and
telephone number(s) set forth above. In addition, all questions relating to the
Exchange Offer, as well as requests for assistance or additional copies of the
Prospectus and this Letter of Transmittal, may be directed to Navigator Gas
Transport, c/o Cambridge Fund Management, LLC, 750 Lexington Avenue, 30th Floor,
New York, New York, 10022, telephone number: (212) 527-2525.
10. VALIDITY AND FORM.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Old Second Priority Notes and withdrawal of
tendered Old Second Priority Notes will be determined by Navigator Gas Transport
in its sole discretion, which determination will be final and binding. Navigator
Gas Transport reserves the absolute right to reject any and all Old Second
Priority Notes not properly tendered or any Old Second Priority Notes the
acceptance of which would, in
12
<PAGE>
the opinion of counsel for Navigator Gas Transport, be unlawful. Navigator Gas
Transport also reserves the right to waive any defects, irregularities or
conditions of tender as to particular Old Second Priority Notes. Navigator Gas
Transport's interpretation of the terms and conditions of the Exchange Offer
(including the instructions in this Letter of Transmittal) will be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Old Second Priority Notes must be cured within such
time as Navigator Gas Transport shall determine. Although Navigator Gas
Transport intends to notify Holders of defects or irregularities with respect to
tenders of Old Second Priority Notes, none of Navigator Gas Transport, the
Second Priority Notes Exchange Agent or any other person shall incur any
liability for failure to give such notification. Tenders of Old Second Priority
Notes will not be deemed to have been made until such defects or irregularities
have been cured or waived. Any Old Second Priority Notes received by the Second
Priority Notes Exchange Agent that are not properly tendered and as to which the
defects or irregularities have not been cured or waived will be returned by the
Second Priority Notes Exchange Agent to the tendering Holders as soon as
practicable following the Expiration Date.
IMPORTANT TAX INFORMATION
Under federal income tax law, a Holder tendering Old Second Priority Notes
is required to provide the Second Priority Notes Exchange Agent with such
Holder's correct TIN on Substitute Form W-9 below. If such Holder is an
individual, the TIN is the Holder's social security number. The Certificate of
Awaiting Taxpayer Identification Number should be completed if the tendering
Holder has not been issued a TIN and has applied for a number or intends to
apply for a number in the near future. If the Second Priority Notes Exchange
Agent is not provided with the correct TIN, the Holder may be subject to a $50
penalty imposed by the Internal Revenue Service. In addition, payments that are
made to such Holder with respect to tendered Old Second Priority Notes may be
subject to backup withholding.
Certain Holders (including, among others, all domestic corporations and
certain foreign individuals and foreign entities) are not subject to these
backup withholding and reporting requirements. Such a Holder who satisfies one
or more of the conditions set forth in Part 2 of the Substitute Form W-9 should
execute the certification following such Part 2. In order for a foreign Holder
to qualify as an exempt recipient, that Holder must submit to the Second
Priority Notes Exchange Agent a properly completed Internal Revenue Service Form
W-8, signed under penalties of perjury, attesting to that Holder's exempt
status. Such forms can be obtained from the Second Priority Notes Exchange Agent
If backup withholding applies, the Second Priority Notes Exchange Agent is
required to withhold 31% of any amounts otherwise payable to the Holder. Backup
withholding is not an additional tax. Rather, the tax liability of persons
subject to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained from
the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a Holder with
respect to Old Second Priority Notes tendered for exchange, the Holder is
required to notify the Second Priority Notes Exchange Agent of his or her
correct TIN by completing the form herein certifying that the TIN provided on
Substitute Form W-9 is correct (or that such Holder is awaiting a TIN) and that
(i) each Holder is exempt, (ii) such Holder has not been notified by the
Internal Revenue Service that he or she is subject to backup withholding as a
result of failure to report all interest or dividends or (iii) the Internal
Revenue Service has notified such Holder that he or she is no longer subject to
backup withholding.
WHAT NUMBER TO GIVE THE SECOND PRIORITY NOTES EXCHANGE AGENT
Each Holder is required to give the Second Priority Notes Exchange Agent
the social security number or employer identification number of the record
Holder(s) of the Old Second Priority Notes. If Old Second Priority Notes are in
more than one name or are not in the name of the actual Holder, consult the
instructions on Internal Revenue Service Form W-9, which may be obtained from
the Second Priority Notes Exchange Agent, for additional guidance on which
number to report.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
If the tendering Holder has not been issued a TIN and has applied for a
number or intends to apply for a number in the near future, write "Applied For"
in the space for the TIN on Substitute Form W-9, sign and date the form and the
Certificate of Awaiting Taxpayer Identification Number and return them to the
Second Priority Notes Exchange Agent. If such certificate is completed and the
Second Priority Notes Exchange Agent is not provided with the TIN within 60
days, the Second Priority Notes Exchange Agent will withhold 31% of all payments
made thereafter until a TIN is provided to the Second Priority Notes Exchange
Agent.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE THEREOF (TOGETHER WITH
THE OLD SECOND PRIORITY NOTES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL
OTHER REQUIRED DOCUMENTS) OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY
THE SECOND PRIORITY NOTES EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.
13
NOTICE OF GUARANTEED DELIVERY
NAVIGATOR GAS TRANSPORT PLC
for Tender of
10 1/2% First Priority Ship Mortgage Notes due 2007
(including those in book-entry form)
This form or a facsimile hereof must be used by a holder of the 10 1/2%
First Priority Ship Mortgage Notes due 2007 of Navigator Gas Transport PLC
("Navigator Gas Transport") (the "Old First Priority Notes"), who wishes to
tender Old First Priority Notes to United States Trust Company of New York, as
First Priority Notes Exchange Agent (the "First Priority Notes Exchange Agent"),
pursuant to the guaranteed delivery procedures described in "The Exchange
Offer-Guaranteed Delivery Procedures" of the Prospectus, dated _______, 199_
(the "Prospectus"), relating to the offer by Navigator Gas Transport to exchange
the Old First Priority Notes for the 10 1/2% First Priority Ship Mortgage Notes
due 2007 that have been registered under the Securities Act of 1933, as amended,
and in Instruction 2 to the related Letter of Transmittal. Any holder who wishes
to tender Old First Priority Notes pursuant to such guaranteed delivery
procedures must ensure that the First Priority Notes Exchange Agent receives
this Notice of Guaranteed Delivery prior to 5:00 p.m., New York City time, on
___________, 199_, or such later date and time to which the Exchange Offer may
be extended (the "Expiration Date"). This form, properly completed and executed,
may be delivered by hand, mail or facsimile transmission to the First Priority
Notes Exchange Agent. In addition, in order to utilize the guaranteed delivery
procedures to tender Old First Priority Notes pursuant to the Exchange Offer,
tender must be made through an Eligible Institution and a properly completed and
duly executed Notice of Guaranteed Delivery must be received prior to the
Expiration Date. Thereafter, a properly completed and executed Letter of
Transmittal (or facsimile thereof) and certificate(s) representing all tendered
Old First Priority Notes (or a confirmation of book-entry transfer of such Old
First Priority Notes into the First Priority Notes Exchange Agent's account at
the Book-Entry Transfer Facility) and all other documents required by the Letter
of Transmittal must be received by the First Priority Notes Exchange Agent
within five New York Stock Exchange trading days after the Expiration Date.
Capitalized terms used and not defined herein shall have the meanings ascribed
to such terms in the Prospectus or the Letter of Transmittal.
BY REGISTERED OR CERTIFIED MAIL: BY HAND (UNTIL 4:30 PM., NEW YORK TIME):
P.O. Box 844 111 Broadway
Lower Level
Cooper Station New York, New York 10006
New York, New York 10276 Attention: Corporate Trust Window
Attention: Corporate Trust Services
BY OVERNIGHT MAIL OR COURIER, OR BY HAND BY FACSIMILE
(AFTER 4:30 P.M., NEW YORK TIME): (FOR ELIGIBLE INSTITUTIONS ONLY):
770 Broadway
13th Floor (212) 420-6152
New York, New York 10003 confirm by telephone (800) 548-6565
Attention: Corporate Trust Services
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature
<PAGE>
guarantee must appear in the applicable space provided in the signature box on
the Letter of Transmittal.
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, being a member of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or an Eligible Guarantor Institution within the meaning of Rule 17 Ad-15
under the Securities Exchange Act of 1934, as amended, hereby guarantees that
the undersigned will deliver to the First Priority Notes Exchange Agent the
certificates representing the Old First Priority Notes being tendered hereby or
confirmation of book-entry transfer of such Old First Priority Notes into the
First Priority Notes Exchange Agent's account at The Depository Trust Company,
in proper form for transfer, together with the Letter of Transmittal (or
facsimile thereof) properly completed and duly executed, with any required
signature guarantees and any other required documents, all within five New York
Stock Exchange trading days after the Expiration Date.
(Name of Firm)
(Authorized Signature)
(Name)
(Title)
(Address)
(Zip Code)
(Area Code and Telephone No.)
Dated: _________________________
DO NOT SEND CERTIFICATES REPRESENTING OLD FIRST PRIORITY NOTES WITH THIS FORM.
ACTUAL SURRENDER OF OLD FIRST PRIORITY NOTES MUST BE MADE PURSUANT TO, AND BE
ACCOMPANIED BY, A COMPLETED AND EXECUTED LETTER OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Navigator Gas Transport, in accordance
with Navigator Gas Transport's offer, upon the terms and subject to the
conditions set forth in the Prospectus and the related Letter of Transmittal,
receipt of which is hereby acknowledged, the principal amount of Old First
Priority Notes set forth below pursuant to the guaranteed delivery procedures
described in the Prospectus and in Instruction 2 of the Letter of Transmittal.
Name(s) of registered holder(s):
(Please Type or Print)
Address:
Area Code and Telephone No.:
Principal Amount of Old First Priority Notes Tendered:
Certificate Number(s) or Account
Number(s) at Book-Entry Facility
for Old First Priority Notes (if available):
Aggregate Principal Amount
Represented by Old Note(s):
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned.
Signature of Holder(s):
Date:
MUST BE SIGNED BY THE HOLDER(S) OF THE OLD FIRST PRIORITY NOTES AS THEIR
NAME(S) APPEAR(S) ON CERTIFICATES OR BOOK-ENTRY ACCOUNTS FOR OLD FIRST PRIORITY
NOTES OR ON A SECURITY POSITION LISTING, OR BY PERSON(S) AUTHORIZED TO BECOME
REGISTERED HOLDER(S) BY ENDORSEMENT AND DOCUMENTS TRANSMITTED WITH THIS NOTICE
OF GUARANTEED DELIVERY. IF SIGNATURE IS BY A TRUSTEE, EXECUTOR, ADMINISTRATOR,
GUARDIAN, ATTORNEY-IN-FACT, OFFICER OR OTHER PERSON ACTING IN A FIDUCIARY OR
REPRESENTATIVE CAPACITY, SUCH PERSON MUST SET HIS OR HER FULL TITLE BELOW.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s):
Capacity:
Address(es):
NOTICE OF GUARANTEED DELIVERY
NAVIGATOR GAS TRANSPORT PLC
for Tender of
12% Second Priority Ship Mortgage Notes due 2007
(including those in book-entry form)
This form or a facsimile hereof must be used by a holder of the 12% Second
Priority Ship Mortgage Notes due 2007 of Navigator Gas Transport PLC ("Navigator
Gas Transport") (the "Old Second Priority Notes"), who wishes to tender Old
Second Priority Notes to The Chase Manhattan Bank, as Second Priority Notes
Exchange Agent (the "Second Priority Notes Exchange Agent"), pursuant to the
guaranteed delivery procedures described in "The Exchange Offer-Guaranteed
Delivery Procedures" of the Prospectus, dated _______, 199_ (the "Prospectus"),
relating to the offer by Navigator Gas Transport to exchange Old Second Priority
Notes for the 12% Second Priority Ship Mortgage Notes due 2007 that have been
registered under the Securities Act of 1933, as amended, and in Instruction 2 to
the related Letter of Transmittal. Any holder who wishes to tender Old Second
Priority Notes pursuant to such guaranteed delivery procedures must ensure that
the Second Priority Notes Exchange Agent receives this Notice of Guaranteed
Delivery prior to 5:00 p.m., New York City time, on ___________, 199_, or such
later date and time to which the Exchange Offer may be extended (the "Expiration
Date"). This form, properly completed and executed, may be delivered by hand,
mail or facsimile transmission to the Second Priority Notes Exchange Agent. In
addition, in order to utilize the guaranteed delivery procedures to tender Old
Second Priority Notes pursuant to the Exchange Offer, tender must be made
through an Eligible Institution and a properly completed and duly executed
Notice of Guaranteed Delivery must be received prior to the Expiration Date.
Thereafter, a properly completed and executed Letter of Transmittal (or
facsimile thereof) and certificate(s) representing all tendered Old Second
Priority Notes (or a confirmation of book-entry transfer of such Old Second
Priority Notes into the Second Priority Notes Exchange Agent's account at the
Book-Entry Transfer Facility) and all other documents required by the Letter of
Transmittal must be received by the Second Priority Notes Exchange Agent within
five New York Stock Exchange trading days after the Expiration Date. Capitalized
terms used and not defined herein shall have the meanings ascribed to such terms
in the Prospectus or the Letter of Transmittal.
BY REGISTERED OR CERTIFIED MAIL: BY HAND (UNTIL 4:30 PM., NEW YORK TIME):
The Chase Manhattan Bank The Chase Manhattan Bank
55 Water Street 55 Water Street
New York, NY 10041 New York, NY 10041
Attn: Carlos Esteves Attn: Carlos Esteves
BY OVERNIGHT MAIL OR COURIER, OR BY HAND BY FACSIMILE
(AFTER 4:30 P.M., NEW YORK TIME): (FOR ELIGIBLE INSTITUTIONS ONLY):
The Chase Manhattan Bank
55 Water Street (212) 638-7380
New York, NY 10041 confirm by telephone (212) 638-0828
Attn: Carlos Esteves
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER OTHER THAN THE ONE
LISTED ABOVE WILL NOT CONSTITUTE VALID DELIVERY.
<PAGE>
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, being a member of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or an Eligible Guarantor Institution within the meaning of Rule 17 Ad-15
under the Securities Exchange Act of 1934, as amended, hereby guarantees that
the undersigned will deliver to the Second Priority Notes Exchange Agent the
certificates representing the Old Second Priority Notes being tendered hereby or
confirmation of book-entry transfer of such Old Second Priority Notes into the
Second Priority Notes Exchange Agent's account at The Depository Trust Company,
in proper form for transfer, together with the Letter of Transmittal (or
facsimile thereof) properly completed and duly executed, with any required
signature guarantees and any other required documents, all within five New York
Stock Exchange trading days after the Expiration Date.
(Name of Firm)
(Authorized Signature)
(Name)
(Title)
(Address)
(Zip Code)
(Area Code and Telephone No.)
Dated: _________________________
DO NOT SEND CERTIFICATES REPRESENTING OLD SECOND PRIORITY NOTES WITH THIS FORM.
ACTUAL SURRENDER OF OLD SECOND PRIORITY NOTES MUST BE MADE PURSUANT TO, AND BE
ACCOMPANIED BY, A COMPLETED AND EXECUTED LETTER OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Navigator Gas Transport, in accordance
with Navigator Gas Transport's offer, upon the terms and subject to the
conditions set forth in the Prospectus and the related Letter of Transmittal,
receipt of which is hereby acknowledged, the principal amount of Old Second
Priority Notes set forth below pursuant to the guaranteed delivery procedures
described in the Prospectus and in Instruction 2 of the Letter of Transmittal.
Name(s) of registered holder(s):
(Please Type or Print)
Address:
Area Code and Telephone No.:
Principal Amount of Old Second Priority Notes Tendered:
Certificate Number(s) or Account
Number(s) at Book-Entry Facility
for Old Second Priority Notes (if available):
Aggregate Principal Amount
Represented by Old Note(s):
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned.
Signature of Holder(s):
Date:
MUST BE SIGNED BY THE HOLDER(S) OF THE OLD SECOND PRIORITY NOTES AS THEIR
NAME(S) APPEAR(S) ON CERTIFICATES OR BOOK-ENTRY ACCOUNTS FOR OLD SECOND PRIORITY
NOTES OR ON A SECURITY POSITION LISTING, OR BY PERSON(S) AUTHORIZED TO BECOME
REGISTERED HOLDER(S) BY ENDORSEMENT AND DOCUMENTS TRANSMITTED WITH THIS NOTICE
OF GUARANTEED DELIVERY. IF SIGNATURE IS BY A TRUSTEE, EXECUTOR, ADMINISTRATOR,
GUARDIAN, ATTORNEY-IN-FACT, OFFICER OR OTHER PERSON ACTING IN A FIDUCIARY OR
REPRESENTATIVE CAPACITY, SUCH PERSON MUST SET HIS OR HER FULL TITLE BELOW.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s):
Capacity:
Address(es):
