Document:

ex10-2.htm

Exhibit 10.2

 

	
 
	
SUBJECT TO FRE 408

	
 
	
PRIVILEGED AND CONFIDENTIAL

	
 
	
 

 

 

AMENDMENT NO. 7 TO
FORBEARANCE AND STANDSTILL AGREEMENT

 

This AMENDMENT NO. 7 TO THE FORBEARANCE AND STANDSTILL AGREEMENT (as defined below), dated as of March 22, 2016 (this “Seventh Amendment”), is by and among Eagle Bulk Shipping Inc., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands (the “Borrower”), the companies party to the Forbearance Agreement as guarantors, each a limited liability company formed and existing under the laws of the Republic of the Marshall Islands (collectively, the “Guarantors” and, together with the Borrower, the “Obligors”, and any one of them, individually, an “Obligor”) and the banks and financial institutions party to the Forbearance Agreement as “Specified Lenders” (such parties, constituting all of the “Specified Lenders” under and as defined in the Forbearance Agreement, collectively, the “Specified Lenders”, and any one of them, individually, a "Specified Lender") (the Specified Lenders together with the Obligors, collectively, the “Parties”, and any one of them, individually, a “Party”).

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, the Guarantors, the Specified Lenders, the other banks and financial institutions party to the Loan Agreement as “Lenders” (collectively, the “Lenders”), ABN AMRO Capital USA LLC, as agent for the Lenders (in such capacity, the “Agent”), and ABN AMRO Capital USA LLC, as security trustee for the Lenders (the “Security Trustee”, and together with the Agent and the Lenders, collectively, the “Lender Parties”, and any one of them, individually, a “Lender Party”) are parties to that certain Loan Agreement dated as of October 9, 2014 and as amended by an Amendatory Agreement dated as of August 14, 2015 (as so amended and as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”); and

 

WHEREAS, the Borrower, the Guarantors and the Specified Lenders are party to that certain Forbearance and Standstill Agreement, dated as of January 15, 2016 (as heretofore amended, restated, supplemented or otherwise modified and in effect prior to the date hereof, including by (i) that certain Amendment No. 1 to Forbearance and Standstill Agreement, dated February 1, 2016, (ii) that certain Limited Waiver to the Loan Agreement and Amendment No. 2 to Forbearance and Standstill Agreement (the “First Waiver and Amendment”), dated February 9, 2016, (iii) that certain Amendment No. 3 to Forbearance and Standstill Agreement, dated as of February 22, 2016, (iv) that certain Second Limited Waiver to the Loan Agreement and Amendment No. 4 to Forbearance and Standstill Agreement, (the “Second Waiver and Amendment”), dated as of February 29, 2016, (v) that certain Amendment No. 5 to Forbearance and Standstill Agreement, dated March 6, 2016 and (vi) that certain Third Limited Waiver to the Loan Agreement and Amendment No. 6 to Forbearance and Standstill Agreement (the “Third Waiver and Amendment”), dated as of March 8, 2016, the “Existing Forbearance Agreement” and as modified and amended hereby and as may be further amended, restated, supplemented or otherwise modified from time to time, the “Forbearance Agreement”); and

 

 

 

 

 

WHEREAS, the Borrower, the Guarantors and the Specified Lenders are party to that certain Fourth Limited Waiver to the Loan Agreement (the “Fourth Waiver”), dated as of March 18, 2016;

 

WHEREAS, the Obligors have requested that the Specified Lenders make certain amendments to the Existing Forbearance Agreement on the terms and subject to the conditions set forth herein; and

 

WHEREAS, the Specified Lenders have agreed to make such amendments solely upon the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

1.     Defined Terms. Unless otherwise defined herein, terms defined in the Existing Forbearance Agreement or the Loan Agreement and used herein shall have the respective meanings given to them in the Existing Forbearance Agreement or the Loan Agreement, as applicable.

 

2.     Amendment to Recital Paragraph of the Existing Forbearance Agreement. The date of “March 22, 2016” set forth in the sixth recital paragraph of the Existing Forbearance Agreement is hereby deleted in its entirety and “March 29, 2016” is inserted in lieu thereof.

 

3.     Representations and Warranties. Each Obligor hereby represents and warrants to the Lender Parties as of the date hereof as follows: 

 

(a)     Such Obligor (i) is duly incorporated or formed and validly existing and in good standing under the law of its jurisdiction of incorporation or formation and (ii) is duly qualified and in good standing as a foreign company in each other jurisdiction in which it owns or leases property or in which the conduct of its business requires it to so qualify or be licensed except where, in each case, the failure to so qualify or be licensed and be in good standing could not reasonably be expected to have a Material Adverse Effect or which may affect the legality, validity, binding effect or enforceability of this Seventh Amendment or the Forbearance Agreement.

 

(b)     Such Obligor has the capacity and has taken all action, if applicable, and no consent of any person is required, for it to execute this Seventh Amendment and to comply with its obligations hereunder. This Seventh Amendment has been duly executed and delivered on behalf of each Obligor. 

 

(c)     This Seventh Amendment constitutes the legal, valid and binding obligations of each Obligor enforceable against it in accordance with their respective terms, subject to any relevant insolvency laws affecting creditors’ rights generally.

 

(d)     The execution of this Seventh Amendment by each Obligor and compliance by each Obligor herewith will not result in a contravention of (i) any law or regulation, (ii) the constitutional documents of any Obligor or (iii) any contractual or other obligation or restriction which is binding on any Obligor or any of its assets.

 

 

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(e)     Other than the Specified Defaults, no Potential Event of Default or Event of Default has occurred and is continuing as of the date hereof. 

 

4.     Reaffirmation and Grant of Security Interests; Reaffirmation of Guarantee.

 

(a)     Each Obligor has created Security Interests in favor of the Security Trustee, on behalf of the Lenders and the Swap Banks, on the Collateral as provided in the Finance Documents. Each Obligor hereby acknowledges that it has reviewed the terms and provisions of this Seventh Amendment and confirms that each Finance Document to which it is a party (or is otherwise bound by) and all Collateral encumbered thereby will continue to guarantee or secure to the fullest extent possible in accordance with the Finance Documents and applicable law, the payment and performance of the Secured Liabilities.

 

(b)     Each Obligor acknowledges and agrees that, except as expressly set forth in this Seventh Amendment and the Forbearance Agreement, any of the Finance Documents to which it is a party or is otherwise bound by shall continue in full force and effect and that all of its obligations thereunder shall be legal, valid and binding obligations of each Obligor, enforceable against such Obligor in accordance with their terms, subject to any relevant insolvency laws affecting creditors’ rights generally, and shall not be impaired or limited by the execution or effectiveness of this Seventh Amendment or the Forbearance Agreement.

 

(c)     By executing this Seventh Amendment, each Guarantor hereby acknowledges, consents and agrees that all of its obligations and liabilities under the provisions of each Finance Document to which it is a party remain in full force and effect, and that the execution and delivery of this Seventh Amendment and the Forbearance Agreement and any and all documents executed in connection herewith or therewith shall not alter, amend, reduce or modify any of its obligations or liabilities under Clause 16 of the Loan Agreement or any other provision of any Finance Documents to which it is a party.

 

5.     No Waivers. Other than the First Waiver and Amendment, the Second Waiver and Amendment, the Third Waiver and Amendment, the Fourth Waiver, this Seventh Amendment and the Forbearance Agreement, no settlement, agreement or understanding (A) entered into with respect to the Finance Documents or (B) purporting to amend, modify or qualify the Finance Documents or to waive any rights or obligations set forth therein shall constitute a legally binding agreement or contract, or have any force or effect whatsoever, unless and until signed, or specifically agreed, pursuant to the terms and conditions of Clause 28.1 of the Loan Agreement.

 

6.     Effectiveness; Conditions Precedent. This Seventh Amendment shall become effective on the date on which each of the Borrower, each of the Guarantors and each of the Specified Lenders shall have executed and delivered a copy hereof.

 

 

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7.     Release. Each Obligor, each Obligor’s respective successors-in-title, legal representatives, and assignees and, to the extent the same is claimed by right of, through, or under any Obligor, their past, present, and future employees, agents, representatives, officers, directors, shareholders, and trustees, do hereby forever remise, release, and discharge each Lender Party, and each Lender Party’s respective successors-in-title, affiliates, subsidiaries, legal representatives, and assignees, past, present, and future officers, directors, shareholders, trustees, agents, employees, consultants, experts, advisors, attorneys, and other professionals (collectively, the “Lender Group”), from any and all manner of action and actions, cause and causes of action, defenses, counterclaims, setoffs, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, damages, judgments, expenses, executions, liens, claims of liens, claims of costs, penalties, attorneys’ fees, or any other compensation, recovery, or relief (including subordination of claims) (collectively, “Claims”) on account of any loss, liability, obligation, demand, or cause of action of whatever nature relating to, arising out of, or in connection with the Loan Agreement or any other Finance Document, including, but not limited to, acts, omissions to act, actions, negotiations, discussions, and events resulting in the finalization and execution of this Seventh Amendment or the Forbearance Agreement, as, among, and between the Obligors and the Lender Parties, such Claims whether now accrued and whether now known or hereafter discovered, from the beginning of time through the date hereof, and specifically including, without any limitation, any claims of liability asserted or that could have been asserted with respect to, arising out of, or in any manner whatsoever connected directly or indirectly with any “lender liability-type” claim.

 

8.     No Challenge. The Obligors agree that their obligations under the Finance Documents, this Seventh Amendment and the Forbearance Agreement are legal, valid and binding obligations of each Obligor, enforceable against such Obligor in accordance with their terms, subject to any relevant insolvency laws affecting creditors’ rights generally.

 

9.     Miscellaneous. 

 

(a)     The provisions of this Seventh Amendment shall inure to the benefit of and be binding upon the Parties and their respective successors and assigns (as and to the extent assignment is permitted in accordance with the Forbearance Agreement and the Loan Agreement), and shall be governed by the laws of the State of New York, without giving effect to the principles of conflicts of law thereof. This Seventh Amendment is a Finance Document. The terms of this Seventh Amendment may not be changed, waived, discharged, or terminated orally, but only by an instrument or instruments in writing, signed by the Party sought to be bound. This Seventh Amendment may be executed in one or more counterparts, each of which shall constitute an original. Each Party executing this Seventh Amendment represents and warrants that it has the authority to do so and that the person signing on behalf of each Party has been authorized to do so.

 

(b)     Each of the Borrower and each Guarantor hereby irrevocably and unconditionally submits to the exclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York County, and any appellate court thereof, in any action or proceeding arising out of or relating to this Seventh Amendment, and each of the Borrower and each Guarantor hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State Court or, to the extent permitted by law, in such Federal court.

 

 

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(c)     This Seventh Amendment shall not constitute a binding agreement unless and until it has been executed and delivered by each of the Obligors and the Specified Lenders.

 

(d)     Unless expressly stated herein, this Seventh Amendment shall be solely for the benefit of the Parties and no other person or entity shall be a third party beneficiary hereof, except for the Agent and the Security Trustee, who shall each be an express third party beneficiary hereof.

 

 

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IN WITNESS WHEREOF, the Parties have caused this Seventh Amendment to be duly executed and delivered as of the date first above written.

 

 

 

	
 
	
EAGLE BULK SHIPPING INC., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands, as Borrower
	
 

	 	 	 	 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
By: 
	
/S/ Adir Katzav  
	
 

	
 
	
 
	
Name: Adir Katzav
	
 

	
 
	
 
	
Title: Chief Financial Officer
	
 

 

 

 

[Signature Page to Amendment No. 7]

 

 

 

	  	
Avocet Shipping LLC

Bittern Shipping LLC

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Cardinal Shipping LLC

Condor Shipping LLC

Crane Shipping LLC

Crested Eagle Shipping LLC

Crowned Eagle Shipping LLC

Egret Shipping LLC

Falcon Shipping LLC

Gannet Shipping LLC

Golden Eagle Shipping LLC

Goldeneye Shipping LLC

Grebe Shipping LLC

Harrier Shipping LLC

Hawk Shipping LLC

Ibis Shipping LLC

Imperial Eagle Shipping LLC

Jaeger Shipping LLC

Jay Shipping LLC

Kestrel Shipping LLC

Kite Shipping LLC

Kittiwake Shipping LLC

Kingfisher Shipping LLC

Martin Shipping LLC

Merlin Shipping LLC

Nighthawk Shipping LLC

Oriole Shipping LLC

Osprey Shipping LLC

Owl Shipping LLC

Peregrine Shipping LLC

Petrel Shipping LLC

Puffin Shipping LLC

Redwing Shipping LLC

Roadrunner Shipping LLC

Sandpiper Shipping LLC

Shrike Shipping LLC

Skua Shipping LLC

Sparrow Shipping LLC

Stellar Eagle Shipping LLC

Tern Shipping LLC

Thrasher Shipping LLC

Thrush Shipping LLC

Woodstar Shipping LLC

Wren Shipping LLC, as Guarantors

 

	 	 
	 	By:   /S/ Adir Katzav
Name: Adir Katzav
Title: Attorney-in-fact 

 

 

 

 

[Signature Page to Amendment No. 7]

 

7Unassociated Document

Exhibit 4.1

 

EXHIBIT A

 

BARE METAL STANDARD

 

SUBSCRIPTION AGREEMENT

 

The undersigned (the "Purchaser") hereby tenders this subscription and agrees to purchase the number of Shares issued by Bare Metal Standard (the "Company"), set forth next to such Purchaser's name on the signature page hereto, at a per Share purchase price of $0.50.  In consideration therefore, the Purchaser hereby delivers a counterpart of this Agreement, together with the amount set forth next to the Purchaser's name on the signature page hereto ("the "Funds"), by wire transfer or a certified check representing immediately available funds, in full payment of the aggregate purchase price of the Shares. The Purchaser understands and agrees this subscription is irrevocable.

1.0      Acceptance and Rejection of Subscription. The Purchaser understands that the Company    has the right to reject all or any part of this subscription for any reason whatsoever or for no reason. This subscription shall be deemed accepted by the Company when the Company executes a counterpart of this Agreement. Promptly after accepting this subscription, the Company will cause a stock certificate evidencing the number of Shares purchased, to be delivered and issued to the Purchaser. In the event the Company rejects all or part of this subscription, the Company will promptly return that amount of the Funds delivered herewith that correspond to the rejected portion of this subscription. By execution below, the Purchaser acknowledges that the Company is relying upon the accuracy and completeness of the representations contained herein in complying with its obligations under applicable securities   laws.

2.0      Representations by Purchaser

2.1       General Representations: The undersigned acknowledges and represents as follows:

2.1.1     The undersigned believes that he, she or it, either alone or with his, her or its purchaser representative, has such knowledge and experience in financial and business matters that he, she or it is capable of reading and interpreting financial statements and evaluating the merits and risks of the prospective investment in the Shares and has the net worth to undertake such risks. If the undersigned has designated a purchaser representative, the undersigned acknowledges that the undersigned has discussed the investment fully with such purchaser representative and has had all inquiries answered to the undersigned's satisfaction;

2.1.2     The undersigned has obtained, to the extent he, she or  it deems  necessary,  his, her, or its own personal professional advice with respect to the risks inherent in an investment in  the Shares and the suitability of the investment in the Shares in light of his, her or its financial  condition and investment needs;

2.1.3     The undersigned believes that an investment in the  Shares  is  suitable for him, her or it based upon his, her or its investment objectives and financial needs, and the undersigned has adequate means for providing for his, her or its current financial needs and personal contingencies and has no need for liquidity of the investment with respect to the Shares;

2.1.4     The undersigned has been given access to full and complete information regarding the Company and has utilized such access to his, her or its satisfaction for the purpose of obtaining information on the Company; and particularly, the undersigned has been given a reasonable opportunity to meet with representatives of the Company for the purpose of asking   questions of and receiving answers from, such representatives concerning the terms and conditions of the Shares, and to obtain any additional information, necessary to verify the accuracy of the information provided;

 

  

  

  

 

2.1.5     The undersigned recognizes that the  Shares  involve  a  high  degree of risk including, but not limited to, the risks described in this Private Placement Memorandum under  the heading "Risk Factors";

2.1.6     The undersigned realizes that ( i) the purchase of the Shares is a long-term investment, (ii) the purchaser of the Shares must bear the economic risk of the investment for an indefinite period of time because none of the Shares have been registered under the Securities Act of 1933, as amended (the "Act"), or applicable state laws and, therefore, cannot be sold unless subsequently registered under the Act and such laws or any exceptions from such registration are available, (iii) the undersigned may not able to liquidate his or her investment in the event of an emergency, or pledge any  of the Shares as collateral security for loans, and (iv) the transferability of the Shares is restricted and requires conformity with the restrictions contained in paragraph 2.2 below.

 

2.2          No Securities Law Registration. The undersigned has been advised that none of the Shares have been registered under the Act or the relevant state securities laws but are being offered and sold pursuant to exemptions from such laws and that the Company's reliance upon such exemptions is predicated in part on the undersigned's representations to the Company as contained herein. The undersigned represents, warrants, covenants and agrees that the Shares are being acquired for his, her or its own account and for investment and without the intention of reselling or redistributing any of the Shares and that he, she or it has made no agreement with others regarding any of such Shares, and that his, her   or its financial condition is such that it is not likely that it will be necessary to dispose of the Shares in the foreseeable future. The undersigned is aware that, in the view of the Securities and Exchange Commission, the acquisition of the Shares with an intent to resell by  reason  of  any  foreseeable  specific contingency or anticipated change in market values, or any change in the condition of the Company, or in connection with a contemplated liquidation or settlement of any loan obtained for the acquisition of the Shares and for which the Shares were pledged as security, would represent an intent inconsistent with the representations set forth above. The undersigned further represents, warrants, covenants and agrees that if, contrary to his, her or its foregoing intentions, he, she or it should later desire to sell, assign, pledge, transfer of otherwise dispose of the Shares in any manner, he, she or it cannot do so without first obtaining (i) the opinion of counsel satisfactory to the Company that such proposed disposition or transfer lawfully may be made without the registration of such  Shares  pursuant to the Act, and applicable state securities laws or (ii) the registration of the Shares. The undersigned further represents that he, she or it understands and agrees that, until registered under the Act, or transferred pursuant to the provisions of Rule 144 there under, or any similar provision as promulgated by the Securities and Exchange Commission, the Shares, whether upon initial issuance or upon any transfer thereof, shall bear a legend, prominently stamped or printed thereon, reading substantially as   follows:

In the case of any such stock certificate:

"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION  OF  COUNSEL  SATISFACTORY  TO  PURCHASERS  OF    THE SECURITIES THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS."

 

  

  

  

 

3.0 Right to Rely. The undersigned is informed of the significance to the Company of the foregoing representations, and they are made with the intention that the Company will rely on them.

4.0 Entity Representation. The undersigned, if other than an individual, makes the following additional representations:

4.1          The undersigned was not organized for the specific purpose of acquiring the Shares; and

4.2          This Agreement has been duly authorized by all necessary action on the part of the undersigned, has been duly executed by an authorized officer or representative of the undersigned, and is a legal, valid and binding obligation of the undersigned enforceable in accordance with its terms.

5.0 Notice to Investor. Correspondence and  notices  to  the  undersigned  should  be  sent  to  the  address listed below in the signature page of this Agreement until such time as the undersigned shall notify the Company, in writing, of a different address to which such correspondence and notices are to be sent.

6.0   Notice  and Payment  to Company.  Correspondence, notices and payment for Shares should be   sent to:

 

Make Check

	
payable to: 

	
Bare Metal Standard

3604 Banner Ave.,

Boise, Idaho 83709

With a signed Subscription Agreement sent to the above address.

7.0                  Miscellaneous.

7.1     The undersigned agrees that this Agreement is not transferable or assignable.

7.2     The undersigned agrees that, except as expressly permitted by any applicable state law, the undersigned may not cancel, terminate or revoke this Agreement or any agreement of the undersigned made hereunder, and this Agreement shall survive the death or legal disability of the undersigned and shall be binding upon the undersigned's heirs, executors, administrators, successors and assigns.

7.3     The Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereto and may be amended only in writing, executed by both parties.

7.4     Headings are for convenience only and are not deemed to be part of this Agreement.

7.5     This Agreement may be executed in multiple counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. In making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart.

  

  

  

 

7.6           The undersigned agrees to provide such information and to execute and deliver such documents as reasonably may be necessary to comply with any and all laws and ordinances to which the Company is subject and in order to verify any of the information provided by or representations or warranties made by the undersigned to the Company.

7.7           The undersigned acknowledges that if he, she or  it is a resident of  or  domiciled in  any state whose "blue sky laws" or  other local securities laws  require a  restriCTIon on  transferability  of securities, he, she or it will comply with such restriCTIons.

 

[SIGNATURE PAGE TO FOLLOW]

  

  

  

 

IN WITNESS WHEREOF, the undersigned has exercised this Subscription Agreement as an instrument under seal as of this_________________day of_______, 2016.

 

NUMBER OF SHARES SUBSCRIBED FOR (MINIMUM 10,000) 

MULTIPLIED BY

$0.50:______________

 

	  
	
Name of (Typed or Printed)

	  
	  
	
Signature

	  
	  
	
Joint Account Owner (Typed or Printed)

	  
	  
	
Signature

	  
	  
	
Tax Identification or Social Security Number(s)

	  
	  
	
Address

	  
	  
	
City, State, Country and Postal Code

 

_____________________/____________________/____________________ Telephone, Facsimile and Email

THE FOREGOING SUBSCRIPTION AGREEMENT IS HEREBY ACCEPTED AND AGREED TO BY THE COMPANY.

 

	
DATED:____________________, 2016

	
BARE METAL STANDARD,

	 
	 	 	 
	 	
  a Idaho Corporation

	 
	 	 	 	 
	
 

	
By: 

	
  James B. Taylor

	 
	 	 	
Chief Executive

	 
	 	 	
Officer

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