LOAN AGREEMENT between B+H Ocean Carriers Ltd (Borrower) and Norsk Tillitsmann ASA (Loan Trustee) on behalf of the Bondholders in the bond issue FRN B+H Ocean Carriers Ltd Open Bond Issue 2006/2013
ISIN
NO
001 0345374
between
B+H
Ocean Carriers Ltd
(Borrower)
and
Norsk
Tillitsmann ASA
(Loan
Trustee)
on
behalf
of
the
Bondholders
in
the
bond issue
FRN
B+H
Ocean Carriers Ltd Open Bond Issue 2006/2013
TABLE
OF CONTENTS
1
Definitions
2
The
Loan
3
Listing
4
Registration
in a Securities Depository
5
The
functions, duties and liability of the Loan Trustee
6
Conditions
Precedent
7
Representations
and Warranties
8
Status
of
the Loan
9
Interest
10 Maturity
of the Loan and Call Option
11
Interest
in the event of late payment
12
Borrower's
acquisition of Borrower’s Bonds
13
Covenants
14
Fees
and
expenses
15
Events
of
Default
16
Authority
of the Bondholders' meeting and the Loan Trustee
17
Procedural
rules
18
Repeated
Bondholders' meeting
19 Change
of
Loan Trustee
20
Limitation
21
Dispute
resolution and legal venue
This
agreement (the "Loan Agreement") has been entered into on December 11, 2006
between B+H
Ocean Carriers Ltd
(Company
No C51934) as borrower (the “Borrower”) and Norsk Tillitsmann
ASA
(Company
No 963 342 624) as loan trustee (the “Loan Trustee”).
Through
their subscription in the Loan the Bondholders have acceded to the Loan
Agreement (i.e.):
* The
Bondholders are bound by the terms of the Loan Agreement provided that
information about the accession was given in the subscription
documents.
* The
Loan
Trustee has through the Bondholders subscription been granted authority to
act
on behalf of the Bondholders to the extent provided for in the Loan
Agreement.
The
Loan
Agreement is available to anyone and may be obtained from the Loan Trustee
or
the Borrower. The Borrower shall ensure that the Loan Agreement is available
to
the general public throughout the entire term of the Loan.
1
Definitions
Whenever
used in this Loan Agreement the following terms shall have the following
meaning:
Banking
Day: any
day
on which commercial banks are open for general business (including dealings
in
foreign exchange and foreign currency deposits) in Oslo, London and New
York.
Bondholders: the
holders of the Bonds.
Bonds: bonds
in
the Loan, as described in Clause 2.1, each individually a “Bond”.
Borrower’s
Bonds: Bonds
in
the Remaining Loan, owned by the Borrower or any
party
over whom the Borrower has decisive influence or any party who has decisive
influence over the Borrower.
Change
of
Control Event: means
that a shareholder or a group of affiliated shareholders, or companies, (direct
or indirect), ref Securities Trading Act § 1-4, exclusive of Xxxxxxx X. Xxxxxx
and Xxxxxx X. Xxxxxxxx and companies under control of Xxxxxxx X. Xxxxxx and
Xxxxxx X. Xxxxxxxx, obtain (including purchase, merger, dilution etc.) ownership
or control of more than 50 - fifty - per cent of the share capital of the
Borrower.
Disbursement
Date: 12
December 2006.
Event
of
Default: means
each event defined as an event of default in Clause
15.1.
Exchange: securities
exchange or other reputable market place for securities having satisfactory
requirements as to listing and trading, where the Loan is listed or applied
for
listing.
Finance
Documents: means
(i)
this Loan Agreement, (ii) the fee agreement according to Clause 14.1, and (iiii)
any
other
document which is executed at any time by the Borrower in relation to any amount
payable under this Loan Agreement or any of the other documents referred to
in
this definition.
Group: the
Borrower and its subsidiaries (if any).
Interest
Determination Date: 8
December 2006 and
thereafter two Banking Days prior to each Interest Payment Date.
Interest
Payment Date: 12
March,
12 June, 12 September and 12 December each
year. If the Interest Payment Date is not a Banking Day, the Interest Payment
Date shall be postponed to the next Banking Day. However, if this day falls
in
the following calendar month, the Interest Payment Date is moved to the first
Banking Day preceding the original date.
Margin: 4.00
percentage points.
Maturity
Date: 12
December 2013.
If the
Maturity Date is not a Banking Day, the Maturity Date shall be postponed to
the
next Banking Day. However, if this day falls in the following calendar month,
the Maturity Date is moved to the first Banking Day preceding the original
date.
|
Net
Asset Value:
|
Value
Adjusted Assets less Net Debt on a consolidated basis and according
to
IFRS.
|
|
Net
Debt:
|
book
value of all liabilities minus cash
|
LIBOR: -
the
interest rate rounded off to five decimal places for a 3 - three - months period
that is quoted on Reuters Screen LIBOR01 page as of 11.00 a.m. London time
on
the Interest Determination Date.
Should
the contents of the Reuters Screen LIBOR01 page be changed such that, in the
opinion of the Loan Trustee, the interest rates shown no longer represent the
same kind of interest rates as when the Loan was disbursed, or the relevant
page
is removed from the Reuters Screen, another news page shall be used. This page
may be another Reuters Screen’s page or, possibly, that of another electronic
news agency, if it, in the opinion of the Loan Trustee, specifies the same
kind
of interest rates as Reuters Screen LIBOR01 page did on the disbursement of
the
loan. Any disagreement of opinion between the Borrower and the Loan Trustee
concerning the use of a new page must be treated as described in
sub-clause 9.3 of the Loan Agreement.
LIBOR
-
Reference
Banks: -
interest
rate determined on the basis of the interest on deposits in U.S. Dollars in
the
inter-bank market in London, quoted by four large authorised exchange banks
in
the London market at approximately 11.00 a.m. London time on the Interest
Determination Date in London, for a 3 - three - months period, starting on
the
Interest Payment Date and applicable to a comparable amount. The Loan Trustee
will ask the head office of each of the banks for a quotation on such interest.
If two or more quotations are given, the interest rate will be set at the
arithmetic mean of the quotations. If less than two quotations are given, the
interest rate will be set to the arithmetic mean of the rates that banks
selected by the Loan Trustee quote at approximately 11.00 a.m. London time
on
the Interest Determination Date for deposits in U.S. Dollars to leading European
banks for a 3 - three - months period starting on the Interest Payment Date
and
applicable to a comparable amount. An interest rate determined by calculation
of
the arithmetic mean shall be rounded off to five decimal places.
Outstanding
Loan: Remaining
Loan less Borrower’s Bonds.
Payment
Date: in
relation to the Loan the dates specified for payment of interest or principal.
If Payment Date is not a Banking Day payments should be made the following
Banking Day.
Put
Option: each
Bondholder’s right to demand an early redemption of its Bonds as set out in
Clause 10.2.
Remaining
Loan: the
aggregate principal amount of all Bonds outstanding in the Loan less the
principal amount of the Bonds redeemed by the Borrower and discharged through
the Securities Depository.
Securities
Depository: the
securities depository in which the Loan is registered. On Disbursement Date
the
Securities Depository is Verdipapirregisteret (“VPS”).
Securities
Depository act: the
Norwegian act of 2002 no. 64 regarding securities depository.
Value
Adjusted
Equity
Ratio: the
ratio
of Net Asset Value to
Value
Adjusted Assets, based on minimum two independent shipbrokers
valuation.
Value
Adjusted Assets: on
a
consolidated basis, the sum of the book value of the Borrower’s assets (total
book value of assets) in accordance with IFRS, adjusted for actual market value
for all vessels based on independent shipbroker valuations. Cash shall not
be
included. For vessels under construction, shipbroker valuations minus remaining
yard installments shall be used in the calculation.
2
The
Loan
2.1
The
Borrower has resolved to issue a series of Bonds at a maximum amount of
USD 60,000,000 (US Dollars sixtymillion), herein referred to as the “Loan".
The Loan may comprise of one or more tranches issued on different issue dates.
The first tranche will be in the amount of USD 25,000,000 (US Dollar
twentyfivemillion).
The
Loan
is an open (tap) issue, from and including Disbursement Date and will be closed
no later than 5 Banking Days prior to Maturity Date.
The
Bonds
will be in denominations of USD 100,000 each and rank pari passu.
The
Loan
will be described as “FRN
B+H
Ocean Carriers Ltd Open Bond Issue 2006/2013”.
The
registration number (ISIN) of the Loan will be NO
001
0345374.
The
tenor
of the Loan is from and including the Disbursement Date to the Maturity
Date.
The
net
proceeds of the Loan will be employed for the general corporate purpose,
including but not limited to the following: (i) product tanker conversion
project (six vessels), (ii) conversion of “Redina” (tbr “Sachem”) and “Sagamore”
to full D/H, (iii) acquisition of additional OBOs, (iv) acquisition of further
product tankers, (v) continuance of share buy-back, and (vi) balance of equity
payment on “Sakonnet” (ex-“Sibohelle”).
2.2
All
tranches under the Loan will be subject to identical terms in all respects.
The
rights and obligations of all parties to the Loan will also apply for later
tranches issued within the maximum amount of the Loan.
The
Loan
Trustee will when issuing additional tranches prepare an addendum to the Loan
Agreement regulating the conditions precedent to disbursement of the relevant
tranche.
3
Listing
3.1 The
Loan
will initially not be applied for listing. An application may later be made
for
the bonds to be listed on Oslo Børs or Oslo Børs’ Alternative Bond Market (ABM)
at the Borrower’s discretion.
4
Registration
in a Securities Depository
4.1 The
Loan
must prior to disbursement be registered in a Securities Depository according
to
the Securities Depository act and the conditions from the Securities Depository.
4.2 The
Borrower shall promptly arrange for notification to the Securities Depository
of
any changes in the terms and conditions of the Loan. The Loan Trustee shall
have
a copy of the notification.
4.3 The
Borrower is responsible for the implementation of correct registration in the
Securities Depository. The registration may be executed by an agent for the
Borrower provided that the agent is qualified according to relevant regulations.
5
The
functions, duties and liability of the Loan Trustee
5.1
The
Loan
Trustee shall pursuant to this Loan Agreement and in compliance with laws and
regulations monitor the Bondholders' interests and rights vis-à-vis the
Borrower, inter alia,
- monitor
the Borrower’s fulfilment of his obligations under the Loan
Agreement,
- exercise
necessary discretion in carrying out the duties assigned to the Loan Trustee
under the Loan Agreement,
- ensure
that valid decisions made at Bondholder meetings are carried out,
- make
the
decisions and implement the measures that are assigned to or imposed on the
Loan
Trustee pursuant to this Loan Agreement,
- forward
to the Bondholders necessary information which is obtained and received in
its
capacity as Bondholder’s representative,
- verify
the timely and correct payment of interest and principal, and
- provided
the Loan is listed, inform the Exchange of circumstances which are of importance
to the listing and quotation of the Loan; however, this only applies to cases
in
which the Loan Trustee gains knowledge of or should have knowledge of such
circumstances and the Borrower fails to fulfil its duty of information towards
the Exchange after having been urged to do so by the Loan Trustee.
5.2
In
performing its functions as Bondholder’s representative, the Loan Trustee is not
obligated to assess the Borrower's financial situation or ability to service
the
Loan except to the extent such duty may clearly be inferred from the Loan
Agreement.
5.3
The
Loan
Trustee shall be liable to pay damages for financial losses suffered by the
Bondholders as a result of negligence of the Loan Trustee in performing its
functions and duties under the Loan Agreement. The Loan Trustee is not
responsible for the content of the information the Loan Trustee has submitted
on
behalf of the Borrower.
6
Conditions
Precedent
6.1
Disbursement
of the Loan will be subject to the Loan Trustee having received the following
documents, in form and substance satisfactory to it, at least two Banking Days
prior to the Disbursement Date:
| (a) |
the
Loan Agreement duly executed,
|
| (b) |
certified
copies of all necessary corporate resolutions to issue the Bonds and
execute the Finance Documents,
|
| (c) |
a
power of attorney from the Borrower to relevant individuals for their
execution of the relevant Finance
Documents,
|
| (d) |
certified
copies of the Certificate of Incorporation and Articles of Association
of
the Borrower, and extracts from the relevant registrar or similar
documentation evidencing the individuals authorised to sign on behalf
of
the Borrower,
|
| (e) |
the
latest available annual and interim report (if applicable) of the Borrower
and the Group,
|
| (f) |
to
the extent necessary, certified copies of authorisations required for
the
validity of and execution, delivery and performance by and the
enforceability against the Borrower of the Loan Agreement, i.a. -
confirmation that the subscription documents have been controlled by
the
Exchange, or confirmation from the manager of the Loan that the
subscription documents have been controlled and that a prospectus is
not
required according to Norwegian law and any other applicable
law,
|
| (g) |
confirmation
that the Loan has been registered in a Securities Depository,
|
| (h) |
written
confirmation from the Borrower in accordance with Clause 7.1,
|
| (i) |
the
agreement set forth in Clause 14.1, duly executed,
and
|
| (j) |
any
written documentation made public in connection with the
Loan.
|
6.2
Subject
to the conditions set out above the first tranche of the Loan will be made
available to the Borrower at Disbursement Date.
6.3
The
Loan
Trustee is entitled to accept a delay in receiving documents listed
above.
7
Representations
and Warranties
7.1 The
Borrower shall in writing represent and warrant that:
| (a) |
the
Borrower is a public limited liability company, duly incorporated and
validly existing under the law in which it is registered, and has the
power to own its assets and carry on its business as presently
conducted;
|
| (b) |
the
Borrower has the power to enter into and perform, and has taken all
necessary corporate action to authorise the entry into, performance
and
delivery of the Finance Documents;
|
| (c) |
the Finance
Documents constitute (or will constitute, when executed by the respective
parties thereto) legal, valid and binding obligations of such parties,
enforceable in accordance with its terms, and (save as provided for
therein) no registration, filing, payment of tax or fees or other
formalities are necessary or desirable to render the said documents
enforceable against the Borrower;
|
| (d) |
the
entry into and performance by the Borrower of the Finance Documents
and
the transactions contemplated thereby do not and will not conflict
with
(i) any present law or regulation or judicial or official order; (ii)
its
articles of association, by-laws or other constitutional documents;
or
(iii) any document or agreement which
is binding on the Borrower;
|
| (e) |
no
Event of Default exists; and no other circumstances exist which constitute
or (with the giving of notice, lapse of time, determination of materiality
or the fulfilment of any other applicable condition, or any combination
of
the foregoing) would constitute a default under any document which
is
binding on the Borrower or any of its assets, and which may have a
material adverse effect on the ability of the Borrower to perform its
obligations under the Finance Documents;
|
| (f) |
all
documents and information which has been provided in connection with
this
Loan, represent the latest available financial information concerning
the
Group and there has been no change in the Group’s financial position which
could have a material adverse effect on the Borrower’s ability to perform
its duties under the Finance Documents;
|
| (g) |
all
authorisations, consents, licenses or approvals of governmental
authorities required for the Borrower in connection with the execution,
performance validity or enforceability of the Finance Documents, and
the
transactions contemplated thereby, have been obtained and are
valid;
|
| (h) |
all
authorisations, consents, licenses or approvals of governmental
authorities required for the Borrower to carry on its business as
presently conducted, have been obtained and are in full force and effect,
|
| (i) |
no
litigation, arbitration or administrative proceeding is pending or,
to the
best of the Borrower’s knowledge, threatened against it which would
materially and adversely affect the affairs, assets or financial condition
of the Borrower or its ability to perform its obligations under the
Finance Documents;
|
| (j) |
the
Borrower is not required to make any deduction or withholding from
any
payment which it may become obliged to make to the Loan Trustee (on
behalf
of the Bondholders) under the Finance
Documents;
|
| (k) |
the
Borrower's payment obligations under the Finance Documents rank at
least
pari passu with the claims of all its other unsecured and unsubordinated
creditors, except for obligations mandatory preferred by law applying
to
companies generally; and
|
| (l) |
the
representations and warranties set out in this Clause 7.1, are made
by the
Borrower on the signing date of the Loan
Agreement.
|
7.2 The
Borrower shall indemnify the Loan Trustee for any economic losses suffered
as a
result of complying with the representations and warranties provided by the
Borrower herein both prior to disbursement of the Loan, and during its
life.
8
Status
of the Loan
8.1
The
Loan
shall rank pari
passu
with all
other senior debt of the Borrower, save for obligations which are mandatory
preferred by law and shall rank ahead of subordinated capital.
8.2 The
Loan
shall be unsecured.
9
Interest
and interest calculations
| 9.1 |
Interest
accrues from and including the Disbursement Date based on LIBOR plus
Margin. The interest rate is set on the first Interest Determination
Date.
Should LIBOR not be available, the interest rate will be set based
on
LIBOR Reference Banks plus Margin.
|
The
interest rate is reset in accordance with sub-clause 9.2.
The
interest is paid in arrears on each Interest Payment Date, the first Interest
Payment Date falling in March 2007.
9.2 The
interest rate on the Loan is reset with effect from each Interest Payment Date.
The new interest rate is reset on the Interest Determination Date based on
LIBOR
plus Margin. Should LIBOR not be available, the interest rate will be reset
based on LIBOR Reference Banks plus Margin.
When
the
interest is set for the first time and on subsequent interest rate resets,
the
next Interest Payment Date and the actual number of calendar days up to that
date must be notified to the Bondholders in writing via the Securities
Depository. This communication must also include the interest rate applicable
up
to the next Interest Payment Date. The Loan Trustee and, if the Loan is listed,
the Exchange shall be notified of the new interest rate immediately.
9.3 In
the
event that the interest rate is fixed in accordance with quotes from LIBOR
Reference Banks, the Borrower or Bondholders representing at least 1/10th of
the
Outstanding Loan may appeal against the interest rate fixing. Such an appeal
must be presented in writing to the Loan Trustee within 20 Banking Days of
the
Bondholders being informed of the interest rate fixing. The appeal will be
dealt
with by a committee comprising three members, of which one representative is
nominated by the Borrower, one representative is nominated by the Loan Trustee
and a chairman agreed by the representatives of the two parties. If the parties
cannot agree on a chairman, this person will be nominated by the Lord Chief
Justice of the Oslo City Court. The decision of the committee is
final.
Bondholders
and the Exchange (if applicable) shall receive written notice from the
Securities Depository that an appeal has been made against the procedure for
fixing the interest rate in accordance with sub-clause 9.3.
|
9.4
|
The
interest is calculated on the basis of the actual number of elapsed
calendar days from and including the Disbursement date to the following
Interest Payment Date, and subsequently from each interest fixing
date to
the next or the maturity date. The number of days is divided by
360.
|
10 Maturity
of the Loan,
call option, put option and mandatory redemption
10.1 The
Loan
will run without installments and mature in whole on the Maturity Date at
par (100%).
10.2
The
Borrower may redeem the Loan or any portion of the Loan (the "Call Option")
as
follows:
| (i) |
at
any time (American
option)
from and included the Interest Payment Date in June 2010 to, but not
included, the Interest Payment Date in June 2011 at 104.50 % of par
value
plus accrued unpaid interest on redeemed amount,
|
| (ii) |
at
any time (American
option)
from and included the Interest Payment Date in June 2011 to, but not
included, the Interest Payment Date in June 2012 at 103.25 % of par
value
plus accrued unpaid interest on redeemed amount,
|
| (iii) |
at
any time (American
option)
from and included the Interest Payment Date in June 2012 to, but not
included, the Interest Payment Date in June 2013 at 102.25 % of par
value
plus accrued unpaid interest on redeemed amount,
and
|
| (iv) |
at
any time (American
option)
from and included the Interest Payment Date in June 2013 to, but not
included, the Maturity Date at 101.00 % of par value plus accrued unpaid
interest on redeemed amount.
|
Should
the Borrower exercise the Call Option, the Loan Trustee and the Bondholders
must
be informed of this (the Bondholders in writing via VPS) no later than 30 -
thirty - Banking Days before the date of redemption. The Exchange (if
applicable) shall immediately be informed.
Partial
redemption of the Loan must be carried out by drawing of lots between the bonds
(by a full repayment of individual Bonds, allocated randomly between the
bonds).
10.3 Upon
a
Change of Control Event, each Bondholder shall have a right of redemption (put
option) of its bonds at 100% (par value) plus unpaid interest on redeemed
amount.
The
Put
Option must be exercised within two months after the Borrower has given
notification as set out in Clause 13.1 (g).
The
Put
Option shall be exercised by the Bondholders by giving written notice of the
request to the Bondholder’s VPS account manager. The Bondholder’s VPS account
manager shall notify the paying agent of the Loan (the “Paying Agent”) of the
pre-payment request. The Put Date shall be fifteen - 15 - Banking Days following
the date when the Paying Agent received the pre-payment request.
A
written
request for redemption must be received by each Bondholder’s account manager at
the latest 15 - fifteen - Banking Days prior to the redemption date pursuant
to
this Clause 10.3.
11
Interest
in the event of late payment
11.1
In
the
event that payment of interest or principal is not made on the relevant Payment
Date, the amount outstanding shall bear interest from the Payment Date
at
an
interest rate equivalent to the interest rate according to Clause 9 plus
5.00 percentage points.
11.2
The
outstanding amounts shall bear interest as mentioned above until payment is
made, whether or not the Loan is declared to be in default pursuant to Clause
15.1 (a), cf. Clauses 15.2 - 15.4.
12
Borrower's
acquisition of Borrower’s Bonds
12.1
The
Borrower has the right to acquire and own Borrower’s Bonds. Borrower’s Bonds may
at the Borrower's discretion be retained by the Borrower, sold or used for
partial redemption of the Remaining Loan.
13
Covenants
13.1
During
the term of the Loan the Borrower shall comply with the following information
covenants:
| (a) |
immediately
inform the Loan Trustee of any default of the Loan pursuant to
Clause 15 as well as of any circumstances which the Borrower
understands or should understand may lead to
default,
|
| (b) |
of
its own accord, make annual and interim
reports
available on the Borrower’s website (alternatively by sending them to the
Loan Trustee) as soon they are available, and not later than 150 days
after the end of the financial year and not later than 60 days after
the
end of the relevant interim report,
|
| (c) |
at
the request of the Loan Trustee send a report outlining the balance
of
Borrower’s Bonds,
|
| (d) |
forward
to the Loan Trustee copies of any creditors’ notifications of the
Borrower, including but not limited to; mergers, demergers and reduction
of shareholders capital,
|
| (e) |
at
the request of the Loan Trustee provide the documents and information
necessary to maintain the listing and quotation of the Loan on Exchange
(if applicable) and to otherwise enable the Loan Trustee to carry out
its
rights and duties pursuant to the Loan Agreement, laws and
regulations,
|
| (f) |
within
a reasonable time limit provide information about the Borrower's financial
condition as the Loan Trustee may reasonably
request
|
| (g) |
immediately
notify the Bondholders (via Securities Depository), the Loan Trustee
and
the Exchange (if listed) if a Change of Control Event takes place,
and
|
| (h) |
in
connection with reporting under 13.1 (b) confirm to the Loan Trustee
the
Borrower’s compliance with Clause 13.2 (a) and Clauses 13.3 (b) and
(c);
|
13.2 During
the term of the Loan, the Borrower shall comply with the following financial
covenants:
(a) each
quarter demonstrate to the Loan Trustee a Value Adjusted Equity Ratio of minimum
25 % based on independent shipbroker valuations.
13.3
During
the term of the Loan, the Borrower shall (unless the Loan Trustee or the
Bondholders’ meeting (as the case may be) in writing has agreed to otherwise)
comply with the following general covenants:
| (a) |
not
in any calender year make any dividend payment, repurchase of shares
or
make other capital distributions to its shareholders, exceeding 50
per
cent of the Group’s (on consilidatet basis) net profit after taxes bases
on the accounts of preceding financial year (any un-utilized amount
of the
permitted dividend pursuant to the above may not be carried forward
to any
subsequent calendar year),
|
| (b) |
not
cease to carry on its business, and
|
| (c) |
not
(i) sell or dispose of all or a substantial part of its operations
or (ii)
change the nature of its business in a manner which might jeopardize
the
Borrower's fulfillment of its obligations under the Loan
Agreement.
|
| (d) |
not
engage in, or permit any member of the Group to engage in, directly
or
indirectly, any transaction with any party (without limitation, the
purchase, sale or exchange of assets or the rendering of any service),
except in the ordinary course of business and pursuant to the reasonable
requirement of the Borrower's or such member of the Group's business
and
upon fair and reasonable terms that are no less favorable to the Borrower
or such member of the Group, as the case may be, than those which might
be
obtained in an arm's length transaction at the
time.
|
14
Fees
and expenses
The
Borrower is responsible for withholding any withholding tax imposed by Norwegian
law.
14.4
In
addition to the fee of the Loan Trustee pursuant to Clause 14.1
and
normal expenses pursuant to Clauses 14.2
and
14.3,
the
Borrower shall on demand cover extraordinary expenses incurred by the Loan
Trustee in connection with the Loan, as determined in separate agreement between
the Borrower and the Loan Trustee. See however Clause 19.2.
15
Events
of Default
15.1 The
Loan
may be declared to be in default upon the occurrence of any of the following
events (Events of Default):
(a) the
Borrower shall on any Payment Date fail to pay any interest or principal due
or
any other amount payable under the Finance Document; provided, however, that
such failure shall not include failures which are remedied within 5 - five
- Banking Days after the Payment Date, and it is obvious the Borrower will
remedy the failure within this time.
(b)
the
Borrower shall fail to duly perform any other covenant or obligation, to be
performed under Finance Documents and such failure is not remedied within
10 - ten - Banking Days after notice thereof is given to the
Borrower by the Loan Trustee,
(c)
if,
for
each member of the Group, the
aggregate amount of financial indebtedness or commitment for financial
indebtedness falling within paragraphs (i) to (iv) below exceeds
a
total of NOK 10 million - or the equivalent thereof in other
currencies;
(i) any
financial indebtedness of,
or
guaranteed by, is
not
paid when due nor within any originally applicable grace period,
(ii) any
financial indebtedness is declared to be or otherwise becomes due and payable
prior to its specified maturity as a result of an event of default (however
described),
(iii) any
commitment for any financial indebtedness is cancelled or suspended by a
creditor as a result of an event of default (however described), or
(iv) any
creditor becomes entitled to declare any financial indebtedness of due to and
payable prior to its specified maturity as a result of an event of default
(however described),
| (d) |
if,
for any member of the Group;
|
(i) it
is
unable or admits inability to pay its debts as they fall due, suspends making
payments on any of its debts or, by reason of actual or anticipated financial
difficulties, commences negotiations with one or more of its creditors with
a
view to rescheduling any of its indebtedness,
| (ii) |
the
value of the assets is less than its liabilities (taking into account
contingent and prospective liabilities),
or
|
| (iii) |
a
moratorium is declared,
|
(iv) a
substantial part of its assets are impounded, confiscated or subject to
distraint,
(e) if,
for
any member of the Group; any
corporate action, legal proceedings or other procedure or step (or any analogous
procedure or step is taken in any jurisdiction) is taken in relation
to;
(i) the
suspension of payments, a moratorium of any indebtedness, winding-up,
dissolution, administration or reorganisation (by way of voluntary arrangement,
scheme of arrangement or otherwise) other than solvent liquidation or
reorganisation,
| (a) |
a
composition, compromise, assignment or arrangement with any
creditor,
|
| (b) |
the
appointment of a liquidator (other than in respect of a solvent
liquidation), receiver, administrative receiver, administrator, compulsory
manager or other similar officer or any of its assets;
or
|
| (c) |
enforcement
of any security over any of its assets,
or
|
| (f) |
any
representation or statement made or deemed to be made by the Borrower
in
the Finance Documents or any other document delivered by or on behalf
of
any Borrower under or in connection with any Finance Document is or
proves
to have been incorrect or misleading in any material respect when made
or
deemed to be made.
|
15.2 In
the
event that one or more of the circumstances mentioned in Clause 15.1 occurs
and
is continuing, the Loan Trustee can, in order to protect the interests of the
Bondholders, declare the entire Remaining Loan including accrued interest and
expenses to be in default and due for immediate payment. The Loan Trustee may
at
his discretion, on behalf of the Bondholders, take every measure necessary
to
recover the Loan, and all other amounts outstanding under the Loan
Agreement.
In
either
case the Loan Trustee shall on behalf of the Bondholders take every measure
necessary to recover the Remaining Loan. The Loan Trustee can request
satisfactory security for anticipated expenses from those Bondholders who
requested that the declaration of default be made pursuant to sub clause a)
above and/or those who voted in favour of the decision pursuant to sub clause
b)
above.
15.5
The
individual Bondholder cannot of his own accord recover his bond(s) directly
from
the Borrower.
16
Authority
of the Bondholders' meeting and the Loan Trustee
(a)
change
of
Loan Trustee,
(b)
change
of
Borrower,
(c)
changes
to the Loan Agreement regarding interest, payment, maturity or other
conditions,
(d)
changes
in the Borrower's corporate structure, such as mergers, demergers, capital
reduction or conversion,
(e) approve
the sale or other transactions concerning the Borrower’s assets,
(f)
declaring
the Loan to be in default.
The
Bondholders' meeting may attach conditions to its decisions.
The
Bondholders' meeting cannot make decisions that are liable to give certain
Bondholders or others an unreasonable advantage at the expense of other
Bondholders.
(a)
the
changes in the Borrower's corporate structure are not, in the judgement of
the
Loan Trustee, of significant importance for the fulfilment of the Loan
Agreement, or
(b)
any
security provided by the Borrower in connection with the change offers, in
the
judgment of the Loan Trustee, adequate security for the fulfilment of the Loan
Agreement.
The
Loan
Trustee can make a decision regarding other changes in the Loan Agreement as
mentioned in Clause 16.1 (c),
provided that the matters in question are, in the judgment of the Loan Trustee,
of minor importance to the Bondholders' financial and legal rights in the Loan.
Before such a decision is made, the Bondholders shall be notified in writing
through the Securities Depository. The notification shall clearly describe
the
proposal and the opinion of the Loan Trustee of it, and shall also inform that
the proposal cannot be approved by the Loan Trustee alone if any Bondholder
submits a written protest against the proposal, and such protest is dispatched
within a time limit which shall not be shorter than 5
- five
- Banking Days
from the
dispatchment of the notification.
The
Loan
Trustee may attach conditions to its decision.
The
Loan
Trustee cannot make a decision under the Loan Agreement that is liable to give
certain Bondholders or others unreasonable advantages at the expense of other
Bondholders.
16.3
The
Loan
Trustee is free, subject as aforesaid, to submit any question to the
Bondholders' meeting.
16.4
The
Loan
Trustee has the right and obligation to implement all decisions validly made
at
the Bondholders' meeting.
16.5
The
Borrower, the Bondholders and - if the Loan is listed - the Exchange shall
be
notified of decisions made in accordance with Clauses 16.1
and
16.2
as soon
as possible and in a suitable manner.
17
Procedural
rules
(a) the
Borrower,
(b) Bondholders
representing at least 1/10 of Outstanding Loan or
(c) the
Exchange - if the Loan is listed - or
(d) the
Loan
Trustee.
A
request
of a Bondholders' meeting shall be made in writing and clearly state the matters
to be discussed and the provisions of this Loan Agreement on which the request
is based. The request shall be sent to the Loan Trustee.
17.2
The
Bondholders' meeting shall be summoned by the Loan Trustee pursuant to the
provisions of Clause 17.3.
Simultaneously with the decision to summon the Bondholders' meeting, the Loan
Trustee can demand that the Borrower does not increase the Outstanding
Loan.
If
the
Loan Trustee has not complied with a valid request for a Bondholders' meeting
as
set forth in Clause 17.1
within
five Banking Days after having received such request, then the Borrower and
the
relevant Bondholder(s) and - if the Loan is listed - the Exchange have the
right
themselves to summon the meeting pursuant to the provisions of
Clause 17.3.
The
summons shall be effected by written notification through the Securities
Depository to every Bondholder with known place of residence and - if the Loan
is listed - the Exchange for publication. The notification through the
Securities Depository shall also state the number of Bonds in the Loan
(print-out) owned by the Bondholder in question at the time the print-out is
made.
The
summons shall clearly state the matters to be discussed at the Bondholders'
meeting, and the provisions of this Loan Agreement on which the request is
based
and inform that the relevant documents are available from the Loan Trustee,
the
Borrower or at such other place as stated in the summons. If any change of
the
Loan Agreement has been proposed, the main content of the proposal shall be
stated in the summons.
The
meeting can only make decisions regarding the matters which were stated in
the
summons, unless all the Bondholders in the Outstanding Loan agree otherwise
subject to the provisions hereof.
If
in
order to make a valid decision it is necessary, pursuant to
Clause 18,
to hold
a new Bondholders' meeting and discuss the matter a second time, such
new
Bondholders' meeting cannot be summoned before the first meeting has been held.
The summons to the second meeting shall inform of the turnout and result of
the
vote at the first Bondholders' meeting.
17.4
The
meeting shall be held at the premises of the Loan Trustee or at premises
designated by the Loan Trustee.
The
meeting shall be presided over by the Loan Trustee, unless the Bondholders'
meeting decides otherwise. If the Loan Trustee is not present, the meeting
shall
be presided over by a Bondholder or representative of the Bondholders, elected
by the Bondholders.
The
minutes of the meeting shall be kept, showing the Bondholders present -
personally or by proxy - as well as how many votes each Bondholder can cast.
Further, the decisions made at the meeting, as well as the result of the vote,
shall be recorded. The minutes shall be signed by the chairman and two
Bondholders or proxies. The minutes shall be kept in a safe manner by the Loan
Trustee, and shall be available to the Bondholders.
17.5
Bondholders,
the Borrower, the Loan Trustee and - if the Loan is listed - the Exchange have
the right to attend the Bondholders' meeting. The Bondholders' meeting can
grant
entrance to the meeting to other parties. The participants at the meeting have
the right to meet with an advisor and/or by proxy.
17.6
At
the
Bondholders' meeting each Bondholder has one vote for each Bond he owns. The
notification of the number of Bonds in the Loan (print-out) which was sent
to
each Bondholder through the Securities Depository in the summons to the meeting,
see Clause 17.3,
serves
as proof of ownership of the Bonds and of each owner's right to vote. In the
event that Bonds have been transferred after the print-out was made, the new
Bondholder must bring to the meeting the original summons and the print-out,
endorsed so as to document the transfer.
The
Borrower’s Bonds do not give the right to vote and are not taken into account
when determining the number of voting Bonds.
In
case
of doubt, the Bondholders' meeting decides which Bondholders can vote and how
many votes each one has.
17.7
In
order
for the Bondholders' meeting to be able to make valid decisions, Bondholders
representing at least 5/10 of the Outstanding Loan must be represented, see
however Clause18.
Valid
decisions may be made by a simple majority, see however Clause
17.8.
17.8
In
the
following matters a majority of 2/3 of the Bonds represented at the meeting
must
vote in favour of the decision:
(a)
change
of
bondholders’ representative,
(b)
change
of
borrower,
(c)
changes
in the Loan Agreement's conditions, including interest, maturity, term and
security/collateral, or
(d)
corporate
or business changes in the Borrower which are of significant importance for
the
fulfilment of the Loan Agreement.
17.9
In
all
matters where unanimity is not attained, the voting shall be in writing and
the
number of votes shall be recorded in the minutes of the meeting. In the case
of
a tie in the votes, the matter shall be decided by the chairman, even if he
is
not a Bondholder or proxy.
Decisions
made at a Bondholders' meeting which entail changes to the Loan Agreement shall
be attached to the Loan Agreement in the form of a certified copy of the minutes
of the meeting.
18.1 In
the
event that less than 5/10 of the Outstanding Loan are represented, a valid
decision may not be made at the first Bondholders' meeting at which the matter
is discussed. After a new meeting has been summoned and the matter discussed
a
second time, a valid decision may be made pursuant to the voting rules set
forth
above; this also applies to cases in which less than 5/10 of the Outstanding
Loan are represented.
19 Change
of Loan Trustee
19.1
In
the
event that the Borrower or Bondholders in accordance with sub-clause 17.1 b)
wish to replace the Loan Trustee, or a change of Loan Trustee is necessary
according to law, regulation or ordinance, or the Loan Trustee has requested
such change, the Loan Trustee shall immediately summon a Bondholders' meeting
to
discuss the matter.
The
Loan
Trustee shall put before the Bondholders' meeting a proposal for a new loan
trustee. The bondholders, the Borrower and the Exchange - if the Loan is listed
- can submit proposals.
The
Bondholders and the Exchange - if the Loan is listed - shall after the
Bondholders' meeting, be notified of the decision and the date on which the
change of loan trustee becomes effective.
19.3
The
Loan
Trustee shall co-operate so that the new loan trustee is given, without undue
delay after the Bondholders' meeting, the documents and information necessary
to
perform his functions and duties under the Loan Agreement. The Loan Trustee
shall provide a summary of the following up of conditions of the Loan Agreement.
20
Limitation
20.1 Claims
for interest and principal shall be limited in time pursuant to the Norwegian
Act relating to the Limitation Period for Claims of May 18, 1979 nr.
18.
21
Dispute
resolution and legal venue
21.1
Disputes
arising out of or in connection with the Loan Agreement which are not resolved
amicably, shall be resolved in accordance with Norwegian law and in the
Norwegian courts.
21.2
Legal
suits shall be served at the competent legal venue of the Loan
Trustee.
Oslo,
11
December 2006
B+H
Ocean Carriers Ltd Norsk
Tillitsmann ASA
Borrower Loan
Trustee
........................................... ...........................................
The
Loan
Agreement has been executed in 2 copies (originals), of which the Borrower
and
the Loan Trustee keep one each.
