SIDE LETTER
To: Sakonnet
Shipping Ltd.
0xx
Xxxxx, Xxx Xx Xxxxx Xxxxx
14 Par La
Xxxxx Xxxx
Xxxxxxxx
XX 00
Xxxxxxx
Xxxxxxxxx: Xx
Xxxxxxx Xxxxxxxx
(the
“Borrower”)
24
November 2008
Dear
Sirs
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(i)
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Loan
Agreement dated 24 January 2007 made between the Borrower and The Bank of
Nova Scotia Asia Limited (the “Bank”) (the “Loan Agreement”) in respect of
a loan facility of up to US$27,300,000 to part finance the acquisition of
m.v. “Sakonnet’’ (the “Ship”); and
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(ii)
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Corporate
Guarantee dated 24 January 2007 made between B+H Ocean Carriers Ltd. (the
“Corporate Guarantor’’) and the Bank (the “Corporate
Guarantee’’)
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This
letter is supplemental to the Loan Agreement and Corporate Guarantee. Terms and
expressions defined in the Loan Agreement and Corporate Guarantee shall have the
same meanings when used herein, unless otherwise defined herein or the context
otherwise requires.
References
in the Loan Agreement to “this Agreement” and references in the Corporate
Guarantee to ‘’this Guarantee’’ shall, with effect from the date of this letter
and unless the context otherwise requires, be references to the Loan Agreement
and Corporate Guarantee as amended by this letter and words such as “herein”,
“hereof”, “hereafter”, “hereby” and “hereto”, where they appear in the Loan
Agreement and Corporate Guarantee, shall be construed accordingly.
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1
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The
Loan Agreement shall, with effect on and from the date of this letter, be
(and is hereby) amended as follows:
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(a)
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in
clause 1.2, the following definitions shall be inserted in the correct
alphabetical order:
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“Contract Employment” means any
time charterparty (provided the freight rates under such charterparties are
fixed and ensure a firm and predictable cashflow), contract of affreighment (or
similar) and forward freight agreement (however only for hedging purposes in
connection with charter agreements or charter contracts and not for speculative
purposes);
“Fleet Vessels” means the
vessels from time to time owned by the Borrower's Group, including, without
limitation:
(a) the
Ship;
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(b)
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m.v.
“Xxxxxx Xxxxxxxxx”, a 83,155 dwt OBO tanker built in 1993, with IMO number
9050084, registered in the name of BHOBO One Ltd. in the Bahamas Ship
Registry;
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(c)
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m.t.
“Rip Hudner”, a 83,155 dwt OBO tanker built in 1994, with IMO number
9077111, registered in the name of BHOBO Two Ltd. in the Bahamas Ship
Registry;
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(d)
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m.t.
“Searose G”, a 83,155 dwt OBO tanker built in 1994, with IMO number
9050096, registered in the name of BHOBO Three Ltd. in the Bahamas Ship
Registry;
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(e)
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m.t.
“Xxxxx X. Xxxxx”, a 74,868 dwt OBO tanker built in 1992, with IMO number
9009396, registered in the name of RMJ OBO Shipping Ltd. in the Bahamas
Ship Registry;
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(f)
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m.t.
“Seapowet”, a 74,928 dwt OBO tanker built in 1992, with IMO number
9014729, registered in the name of K/S Difko LXXIII in the Bahamas
Ship Registry;
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(g)
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m.t.
“Sagamore”, a 68,536 dwt product tanker built in 1991, with IMO number
9002192, registered in the name of Sagamore Shipping Ltd. in the Bahamas
Ship Registry;
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(h)
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m.v.
“Sachem”, a 60,959 dwt product tanker built in 1988, with IMO number
8011304, registered in the name of Sachem Shipping Ltd. in the Bahamas
Ship Registry;
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(i)
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m.v.
“Algonquin”, a 38,147 dwt bulk carrier built in 1983, with IMO number
8005006, registered in the name of Aquidneck Shipping Corp. in the
Bahamas Ship Registry;
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(j)
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m.v.
“Capt. Xxxxxx X Xxxxxx Xx.”, a 44,999 dwt product tanker built in 1990,
with IMO number 8613994, registered in the name of TJH Shipholding Ltd. in
the Bahamas Ship Registry;
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(k)
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m.t.
“Agawam”, a 41,209 dwt product tanker/chemical carrier built in 1982, with
IMO number 8004973, registered in the name of Agawam Shipping Corp. in the
Bahamas Ship Registry;
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(l)
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m.t.
“Anawan”, a 38,884 dwt product tanker/chemical carrier built in 1981, with
IMO number 7929671, registered in the name of Anawan Shipping Corp. in the
Bahamas Ship Registry;
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(m)
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m.t.
“Aquidneck”, a 40,554 dwt product tanker/chemical carrier built in 1981,
with IMO number 8004985, registered in the name of Aquidneck Shipping
Corp. in the Bahamas Ship Registry;
and
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(n)
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m.t.
“Pequod”, a 40,632 dwt product tanker built in 1982, with IMO number
8011304, registered in the name of Isabelle Shipholdings Corp. in the
Bahamas Ship Registry.
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(b)
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in
clause 8.4.1(h), the definition of ‘Total Debt’ shall be deleted and
replaced with the following new
definition:
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“(h)
“Total Debt’’ means, on
a consolidated basis, the aggregate book value of all provisions, other long
term liabilities and current liabilities of the Borrower and the Corporate
Guarantor (on a consolidated basis), however reduced by Cash and Cash
Equivalents in excess of the minimum Cash and Cash Equivalent requirement in
Clause 8.4.2(d) (Cash and Cash
Equivalents)’’;
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(c)
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in
clause 8.4.1(k), the definition of ‘Value Adjusted Total Assets’ shall be
deleted and replaced with the following new
definition:
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“(k)”Value Adjusted Total Assets’’
means, on a consolidated basis, the total market value of all of the assets of
the Corporate Guarantor (on a consolidated basis), however, excluding Cash and
Cash Equivalents in excess of the minimum Cash and Cash Equivalent requirement
in Clause 8.4.2(d) (Cash and
Cash Equivalents)’’;
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(d)
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in
clause 8.4.2, the current wording of paragraph (b) (‘Ratio of EBITDA to
Fixed Charges’) shall be deleted and replaced with the following new
wording:
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“(b) Ratio
of EBITDA to Fixed Charges
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The
Borrower shall procure that the Corporate Guarantor (on a consolidated
basis) shall ensure that the ratio of EBITDA to Fixed Charges shall be (i)
1.15:1.00 if 75% to 100% of the Fleet Vessels are on Contracted Employment
for a period of twelve (12) months or more, (ii) 1.20:1.00 if 50% to 74%
of the Fleet Vessels are under Contract Employment for a period of twelve
(12) months or more and (iii) 1.25:1.00 at all times otherwise, in any
event on a twelve (12) months rolling basis on assumptions approved by the
Bank’’;
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(e)
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in
clause 8.4, the current wording of paragraph (d) (‘Cash and Cash
Equivalents’) shall be deleted and replaced with the following new
wording:
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“(d) Cash
and Cash Equivalents
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The
Borrower shall procure that the Corporate Guarantor (on a consolidated
basis) shall at all times ensure that it has Cash and Cash Equivalents
equal to the greater of (i) fifteen million Dollars ($ 15,000,000) and
(ii) six per cent (6.00%) of the long term debt of the Corporate
Guarantor’’;
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2
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The
Corporate Guarantee shall, with effect on and from the date of this
letter, be (and is hereby) amended as
follows:
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(a)
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in
clause 5.3.1(h), definition of ‘Total Debt’ shall be deleted and replaced
with the following new definition:
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“(h)
“Total Debt’’ means, on
a consolidated basis, the aggregate book value of all provisions, other long
term liabilities and current liabilities of the Borrower and the Guarantor (on a
consolidated basis), however reduced by Cash and Cash Equivalents in excess of
the minimum Cash and Cash Equivalent requirement in Clause 5.3.2(d) (Cash and Cash
Equivalents)’’;
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(b)
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in
clause 5.3.1(k), the definition of ‘Value Adjusted Total Assets’ shall be
deleted and replaced with the following new
definition:
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“(k)
“Value Adjusted Total
Assets’’ means, on a consolidated basis, the total market value of all
the of the assets of the Guarantor (on a consolidated basis), however, excluding
Cash and Cash Equivalents in excess of the minimum Cash and Cash Equivalent
requirement in Clause 5.3.2(d) (Cash and Cash
Equivalents)’’;
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(c)
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in
clause 5.3.2, the current wording of paragraph (b) (‘Ratio of EBITDA to
Fixed Charges’) shall be deleted and replaced with the following new
wording:
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“(b) Ratio
of EBITDA to Fixed Charges
The
Guarantor undertakes that it shall (on a consolidated basis) ensure that the
ratio of EBITDA to Fixed Charges shall be (i) 1.15:1.00 if 75% to 100% of the
Fleet Vessels are on Contracted Employment for a period of twelve (12) months or
more, (ii) 1.20:1.00 if 50% to 74% of the Fleet Vessels are under Contract
Employment for a period of twelve (12) months or more and (iii) 1.25:1.00 at all
times otherwise, in any event on a twelve (12) months rolling basis on
assumptions approved by the Bank’’;
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(d)
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in
clause 5.3.2, the current wording of paragraph (d) (‘Cash and Cash
Equivalents’) shall be deleted and replaced with the following new
wording:
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“(d) Cash
and Cash Equivalents
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The
Guarantor undertakes that it shall (on a consolidated basis) at all times
ensure that it has Cash and Cash Equivalents equal to the greater of (i)
fifteen million Dollars ($ 15,000,000) and (ii) six per cent (6.00%) of
the long term debt of the
Guarantor’’;
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(e)
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a
new clause 5.3.3 shall be inserted with the following
wording:
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“Compliance
Certificate’’
The
Guarantor undertakes that simultaneously with the service of the Audited
Financial Statements pursuant to clause 5.1.4, it will deliver to the Bank in a
written certificate from the chief financial officer in respect of the period to
which the Audited Financial Statements relate, certifying that the Audited
Financial Statements were in compliance with the covenants and undertakings
contained in this clause 5.3.’’
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(f)
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a
new Schedule 1 (Form of
Compliance Certificate) shall be inserted with the wording set out
in Schedule 1 hereto.
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3
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Conditions
Precedent
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The
Borrower shall provide the Bank with a signed and dated copy of the Addendum
No.1 to the Reducing Revolving Credit Facility Agreement dated 29 August 2006
made between the borrowers (listed in schedule 1 therein), the lenders (listed
in schedule 2 therein), Nordea Bank Finland plc. as swap bank, Nordea
Bank Norge ASA as bookrunner, Nordea Bank Norge ASA as agent, Nordea Bank Norge
ASA as arranger and underwriter and DVB Bank America N.V., The Governor and
Company of the Bank of Scotland and HSH Nordbank AG as
co-arrangers.
Save as
may be amended or varied hereby, the terms of the Loan Agreement, the Corporate
Guarantee and the other Security Documents shall remain unaltered and in full
force and effect and shall be read and construed as the same may have been
amended by this letter.
This
letter may be executed in counterparts and by the different parties on separate
counterparts, each of which when so executed and delivered shall be an original
but all counterparts shall together constitute one and the same
instrument.
Please
evidence your agreement to, and acceptance of, the terms of this letter by
countersigning where indicated below and returning a copy of this letter to
us.
This
letter shall be governed by, and construed in accordance with, English
law.
…………………..……………
For and
on behalf of
The
Bank of Nova Scotia Asia Limited
(in its
capacity as Bank)
We hereby
acknowledge receipt of the above letter and confirm and agree to its
terms.
………………………………..
Accepted
and agreed
For and
on behalf of
Sakonnet
Shipping Ltd.
(in its
capacity as Borrower)
………………………………..
Accepted
and agreed
For and
on behalf of
B+H
Ocean Carriers Ltd.
(in its
capacity as Corporate Guarantor)
SIN-#788158-v3
Schedule
1
Form
of Compliance Certificate
To: The
Bank of Nova Scotia Asia Limited, as Bank
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From:
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[·]
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Date:
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[•]
[To be delivered no
later than [one hundred and twenty (120) /forty-five (45)] days after each
Reporting Date]
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(i)
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Loan
Agreement dated 24 January 2007 made between the Borrower and The Bank of
Nova Scotia Asia Limited (the “Bank”) (the “Loan Agreement”) in respect of
a loan facility of up to US$27,300,000 to part finance the acquisition of
m.v. ‘’Sakonnet’’ (the “Ship”); and
|
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(ii)
|
Corporate
Guarantee dated 24 January 2007 made between B+H Ocean Carriers Ltd. (the
“Corporate Guarantor’’) and the Bank (the “Corporate
Guarantee’’)
|
We refer
to the Loan Agreement and Corporate Guarantee. Terms defined in the Loan
Agreement and the Corporate Guarantee shall have the same meaning when used in
this Compliance Certificate.
With
reference to Clause 8.4 of the Loan Agreement and Clause 5.3.2 of the Corporate
Guarantee, we confirm that as at [•] [insert relevant Reporting
Date]:
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(a)
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Minimum Value Adjusted Equity
Ratio. The Minimum Value Adjusted Equity Ratio of the Guarantor (on
a consolidated basis) was [•].
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The
Guarantor shall at all times maintain a minimum Value Adjusted Equity Ratio of
thirty per cent (30.00%). The covenant in Clause 5.3.2(a) is thus [not]
satisfied.
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(b)
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Minimum Value Adjusted
Equity. The Minimum Value Adjusted Equity of the Guarantor (on a
consolidated basis) was USD [•].
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The
Guarantor shall at all times maintain a Minimum Value Adjusted Equity of USD
50,000,000. The covenant in Clause 5.3.2(a) is thus [not]
satisfied.
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(c)
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Ratio of EBITDA to Fixed
Charges. The ratio of EBITDA to Fixed Charges of the Guarantor (on
a consolidated basis) was [•].
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The
Guarantor (on a consolidated basis) shall ensure that the ratio of EBITDA to
Fixed Charges shall be (i) 1.15:1.00 if 75% to 100% of the Fleet Vessels are on
Contracted Employment for a period of twelve (12) months or more, (ii) 1.20:1.00
if 50% to 74% of the Fleet Vessels are under Contract Employment for a period of
twelve (12) months or more and (iii) 1.25:1.00 at all times otherwise, in any
event on a twelve (12) months rolling basis on assumptions approved by the Bank.
The covenant in Clause 5.3.2(b) is thus [not] satisfied.
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(d)
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Positive working capital.
The working capital of the Guarantor (on a consolidated basis) was
[·].
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The
Guarantor (on a consolidated basis) shall at all times ensure that its current
assets exceeds its current liabilities (excluding the current portion of long
term debt), all as determined in accordance with GAAP. The covenant
in Clause 5.3.2(c) is thus [not] satisfied.
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(e)
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Cash and Cash Equivalents.
The Cash and Cash Equivalent of the Guarantor (on a consolidated
basis) is [·].
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The
Guarantor (on a consolidated basis) shall at all times ensure that it has Cash
and Cash Equivalents equal to the greater of (i) USD 15,000,000 and (ii) six per
cent (6.00%) of the long term debt of the Guarantor. The covenant in Clause
5.3.2(d) is thus [not] satisfied.
Yours
sincerely
for and
on behalf of
[·]
By:
__________________________________
Name:
Title: [authorised
officer]
SIN-#788158-v3
