Exhibit 10.38
DATED 22 MAY 2008
EFRAGEL SHIPPING CORPORATION
(AS BORROWER)
-AND-
DNB NOR BANK ASA
(AS LENDER)
------------------------------------------------------
FIRST SUPPLEMENTAL AGREEMENT TO A SECURED
REDUCING REVOLVING MULTI-CURRENCY CREDIT FACILITY AGREEMENT
DATED 11 JANUARY 2008
------------------------------------------------------
XXXXXXXXXX XXXXXXX
XXX, XX. XXXX'X XXXXXXXXXX
XXXXXX XX0X 0XX
TEL: 000 0000 0000
FAX: 000 0000 0000
REF: 04.142
CONTENTS
PAGE
1 Interpretation............................................................8
2 Conditions...............................................................27
3 Representations and Warranties...........................................61
4 Amendments to Original Facility Agreement................................62
5 Confirmation and Undertaking............................................337
6 Communications, Law and Jurisdiction....................................340
SCHEDULE 1: Form of Compliance Certificate..................................346
SUPPLEMENTAL AGREEMENT
DATED: MAY 2008
BETWEEN:
(1) EFRAGEL SHIPPING CORPORATION, a company incorporated under the laws of
the Republic of Liberia whose registered office is at 00 Xxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxx (the "BORROWER"); and
(2) DNB NOR BANK ASA, acting through its office at 00 Xx. Xxxxxxx'x Xxxx,
Xxxxxx XX0X 0XX, Xxxxxxx (the "LENDER").
SUPPLEMENTAL TO a secured reducing revolving multi-currency credit facility
agreement dated 11 January 2008 (the "ORIGINAL FACILITY AGREEMENT") made between
the Borrower and the Lender, on the terms and subject to the conditions of which
the Lender agreed to advance to the Borrower an aggregate amount not exceeding
forty two million Dollars ($42,000,000) (the "LOAN").
WHEREAS:
(A) The Borrower has informed the Lender that it wishes to enter into a
series of transactions (the "REORGANIZATION") as a result of which: (a)
its shares will cease to be wholly owned by its present shareholders;
(b) the Corporate Guarantor will own 100% of the Borrower's shares; and
(c) its ownership structure will change following the initial public
offering of the common stock of the Corporate Guarantor in the New York
Stock Exchange (the "OFFERING").
(B) The Borrower has requested the Lender to proceed in amending, inter
alia, clauses 13.2.17 and 14.1.8 of the Original Facility Agreement,
which would otherwise be breached upon the occurrence of the
Reorganization and the Offering, and to
delete, inter alia, clause 13.2.14 and to amend, inter alia, clause
13.2.13 of the Original Facility Agreement.
(C) The Lender is willing to accede to such requests as listed in Recital B
above and has agreed to amend the Original Facility Agreement and the
Security Documents (as applicable) on the terms and subject to the
conditions contained in this Supplemental Agreement.
2
IT IS AGREED THAT:
1 INTERPRETATION
1.1 In this Supplemental Agreement
1.1.1 "ADDITIONAL DOCUMENTS" means the Supplemental
Agreement, the Guarantees and the Operating Account
Charge.
1.1.2 "AVSTES" means Avstes Shipping Corporation, a company
incorporated according to the laws of the Republic of
Liberia or such other company which shall be its
successor in title.
1.1.3 "AVSTES GUARANTEE" means the guarantee and indemnity
granted by Avstes in respect of the Indebtedness in
favour of the Lender, in such form and containing
such terms and conditions as the Lender shall
require.
1.1.4 "CORPORATE GUARANTEE" means the guarantee and
indemnity to be granted by the Corporate Guarantor in
favour of the Lender.
1.1.5 "CORPORATE GUARANTOR" means Safe Bulkers Inc., a
company incorporated according to the laws of the
Republic of Xxxxxxxx Islands or such other company
which shall be its successor in title.
1.1.6 "EFFECTIVE DATE" means the date of the Listing, such
date falling no later than 30 August 2008.
1.1.7 "GROUP GUARANTEES" means the Marindou Guarantee, the
Pelea Guarantee and the Avstes Guarantee, and "GROUP
GUARANTEE" means any one of them.
3
1.1.8 "GROUP GUARANTOR" means any one of Marindou, Pelea or
Avstes, and "GROUP GUARANTORS" means more than one of
them.
1.1.9 "GUARANTEES" means the Group Guarantees and the
Corporate Guarantee and "GUARANTEE" means any one of
them.
1.1.10 "GUARANTORS" means the Group Guarantors and the
Corporate Guarantor and "GUARANTOR" means any one of
them.
1.1.11 "LISTING" the effective trading date of the shares of
the Corporate Guarantor listed on the New York Stock
Exchange.
1.1.12 "MARINDOU" means Marindou Shipping Corporation, a
company incorporated according to the laws of the
Republic of Liberia or such other company which shall
be its successor in title.
1.1.13 "MARINDOU GUARANTEE" means the guarantee and
indemnity granted by Marindou in respect of the
Indebtedness in favour of the Lender, in such form
and containing such terms and conditions as the
Lender shall require.
1.1.14 "OPERATING ACCOUNT CHARGE" means the first priority
deed of charge over the Operating Account to be
executed by the Borrower in favour of the Lender.
1.1.15 "PELEA" means Pelea Shipping Ltd., a company
incorporated according to the laws of the Republic of
Liberia or such other company which shall be its
successor in title.
4
1.1.16 "PELEA GUARANTEE" means the guarantee and indemnity
granted by Pelea in respect of the Indebtedness in
favour of the Lender, in such form and containing
such terms and conditions as the Lender shall
require.
1.1.17 "SIDE LETTER" means a side letter evidencing the
Current Shareholders of the Corporate Guarantor on
the date of the Listing issued by the Corporate
Guarantor in favour of the Lender in such form as the
Lender may require.
1.1.18 "SUPPLEMENTAL AGREEMENT" means this Supplemental
Agreement.
1.2 All words and expressions defined in the Original Facility
Agreement and in Clause 4 of this Supplemental Agreement shall
have the same meaning when used in this Supplemental Agreement
unless the context otherwise requires, and clause 1.2 of the
Original Facility Agreement shall apply to the interpretation
of this Supplemental Agreement as if it were set out in full.
2 CONDITIONS
2.1 CONDITIONS SUBSEQUENT - INITIAL The Borrower shall deliver or
cause to be delivered to or to the order of the Lender within
five (5) Business Days from the Effective Date the following
documents and evidence:
2.1.1 BORROWER'S OFFICER'S CERTIFICATE A certificate from a
duly authorised officer of the Borrower confirming
that none of the documents delivered to the Lender
pursuant to Schedule 1 Part
5
I (a), (c) and (e) of the Original Facility Agreement
have been amended or modified in any way since the
date of their delivery to the Lender, or copies,
certified by a duly authorised officer of the
Borrower as true, complete, accurate and neither
amended nor revoked, of any which have been amended
or modified.
2.1.2 BORROWER'S AND GUARANTORS' OFFICER'S CERTIFICATES A
certificate of a duly authorised officer of the
Borrower and each Guarantor certifying that each copy
document relating to it specified in Clauses 2.1.3
(other than in respect of the Borrower) to 2.1.6 is
correct, complete and in full force and effect as at
a date no earlier than five days prior to the date of
this Supplemental Agreement and setting out the names
of the directors and officers of the Borrower and the
respective Guarantor.
2.1.3 CONSTITUTIONAL DOCUMENTS Copies of the constitutional
documents of each Guarantor together with such other
evidence as the Lender may reasonably require that
the Guarantor in question is duly incorporated in its
country of incorporation and remains in existence
with power to enter into, and perform its obligations
under, the relevant Guarantee.
2.1.4 RESOLUTIONS A copy, certified by a director or the
secretary of the Security Party in question as true,
complete and accurate
6
and neither amended nor revoked, of a resolution of
the directors and, a resolution of the shareholders
of each Security Party (together, where appropriate,
with signed waivers of notice of any directors' or
shareholders' meetings) approving, and authorising or
ratifying the execution of, this Supplemental
Agreement and any document to be executed by that
Security Party pursuant to this Supplemental
Agreement.
2.1.5 POWERS OF ATTORNEY A notarially attested and
legalised power of attorney of each of the Security
Parties (other than the Corporate Guarantor) and a
duly executed power of attorney in respect of the
Corporate Guarantor under which this Supplemental
Agreement and any documents required pursuant to it
are to be executed by that Security Party.
2.1.6 CERTIFICATES OF GOOD STANDING A certificate of good
standing in respect of each Security Party (if such a
certificate can be obtained).
2.1.7 ADDITIONAL DOCUMENTS The Additional Documents duly
executed by all parties thereto.
2.1.8 LEGAL OPINIONS A legal opinion of the legal advisers
of the Lender in the relevant jurisdiction,
substantially in the form or forms provided to the
Lender prior to signing of this Supplemental
Agreement or confirmation satisfactory to the Lender
that such a legal opinion will be given.
7
2.1.9 OTHER AUTHORISATIONS A copy of any other consent,
licence, approval, authorisation or other document,
opinion or assurance which the Lender considers to be
necessary or desirable (if it has notified the
Security Parties accordingly) in connection with the
entry into and performance of the transactions
contemplated by any of the Additional Documents or
for the validity and enforceability of any of the
Additional Documents.
2.1.10 SIDE LETTER The side letter evidencing the Current
Shareholders of the Corporate Guarantor issued by the
Corporate Guarantor in favour of the Lender in such
form as the Lender may require.
2.1.11 PROCESS AGENT Evidence that any process agent
referred to in Clause 22.5 of the Agreement and any
process agent appointed under any other Finance
Document has accepted its appointment.
2.2 CONDITIONS SUBSEQUENT -ADDITIONAL The Borrower shall deliver
or cause to be delivered to or to the order of the Lender
within thirty (30) days from the Effective Date, the following
documents and evidence:-
2.2.1 LEGAL OPINIONS The legal opinions specified in Clause
2.1.8 as have not already provided to the Lender.
2.2.2 NEW MANAGEMENT AGREEMENT A photocopy, certified as
true, accurate and complete by a director or the
secretary or the duly
8
authorised attorney of the Borrower of the New
Management Agreement.
2.2.3 NEW MANAGERS' CONFIRMATION The written confirmation
of the Managers that, throughout the Facility Period
unless otherwise agreed by the Lender, they will
remain the commercial and technical managers of the
Vessel and that they will not, without the prior
written consent of the Lender, sub-contract or
delegate the commercial or technical management of
the Vessel to any third party and confirming in terms
acceptable to the Lender that, following the
occurrence of an Event of Default, all claims of the
Managers against the Borrower shall be subordinated
to the claims of the Lender under the Finance
Documents.
2.2.4 REORGANISATION, OFFERING AND LISTING Evidence of the
Reorganisation, the Offering and the Listing.
2.3 EVENT OF DEFAULT Failure of the Borrower to deliver any of the
documents or evidence listed in Clause 2.1 or Clause 2.2 in
accordance with the requirements thereof shall constitute an
Event of Default.
2.4 All documents and evidence delivered to the Lender pursuant to
this Clause shall:
2.4.1 be in form and substance acceptable to the Lender;
9
2.4.2 be accompanied, if required by the Lender, by
translations into the English language, certified in
a manner acceptable to the Lender; and
2.4.3 if required by the Lender, be certified, notarised,
legalised or attested in a manner acceptable to the
Lender.
3 REPRESENTATIONS AND WARRANTIES
Each of the representations and warranties contained in clauses 12 and
13 of the Original Facility Agreement shall be deemed repeated by the
Borrower at the date of this Supplemental Agreement and at the
Effective Date, by reference to the facts and circumstances then
pertaining, as if references in the Finance Documents to the Agreement
included the Original Facility Agreement as supplemented and amended by
this Supplemental Agreement.
4 AMENDMENTS TO ORIGINAL FACILITY AGREEMENT
4.1 With effect from that Effective Date:-
4.1.1 The following additional definitions shall be added
in clause 1.1 of the Original Facility Agreement, and
the numerical order of the remaining definitions in
such Clause shall be amended accordingly:
"'ACCOUNTING INFORMATION' means the annual financial
statements and/or the quarterly financial statements
to be provided by the Corporate Guarantor to the
Lender in accordance with Clauses 13.1.1 and 13.1.4."
"'AVSTES' means Avstes Shipping Corporation, a
company incorporated according to the laws of the
Republic of Liberia or such other company which shall
be its successor in title."
10
"'AVSTES AGREEMENT' means the reducing revolving
multi-currency credit facility agreement dated 17
April 2008 made between Avstes, as borrower and the
Lender, as lender, as amended and/or supplemented by
a supplemental agreement dated 22 May 2008 entered
into by and between Avstes and the Lender, and as the
same may be further amended and/or supplemented
and/or novated from time to time."
"'AVSTES GUARANTEE' means the guarantee of Avstes
referred to in Clause 11.1.7."
"'AVSTES INDEBTEDNESS' means the Indebtedness as such
term is defined in the Avstes Agreement."
"'BUILDER' means IHI Amtec Co. of Tokyo, Japan."
"'COMPLIANCE CERTIFICATE' means a certificate
substantially in the form set out in Schedule 4 in
form and substance satisfactory to the Lender."
"'CONSOLIDATED GROUP LEVERAGE' means at any relevant
time Consolidated Total Liabilities divided by
Consolidated Total Assets."
"'CONSOLIDATED TOTAL ASSETS' means, at any date, the
aggregate of:
(a) the then current market values of all
vessels owned by any member of the Group (in
the case of a Vessel or any other vessel,
the market value shall be determined
by reference only to the most recent
valuation of such Vessel or vessel in
accordance with Clause 11.11);
11
(b) the then current aggregate amount of cash,
Marketable Securities (but no other bonds,
notes or bills and less any cash or
Marketable Securities accounted for in the
definition of Consolidated Total Liabilities
below) and receivables due to the Group
(less provision for bad and doubtful debts)
as shown in the latest financial statements;
and
(c) the book values of all other assets (other
than the assets referred to in
sub-paragraphs (a) and (b) hereof) as shown
in such latest financial statements."
"'CONSOLIDATED TOTAL LIABILITIES' means, at the
relevant date and for a particular period, the
aggregate of the consolidated Financial Indebtedness
of the Group shown in the latest consolidated
financial statements for the Group (excluding (i)
liabilities to its shareholders, provided that they
are subordinated on terms acceptable to the Lender in
its discretion and (ii) debt that is fully
collateralised by cash or Marketable Securities to
which the right of access, use or dealing is blocked
for any member of the Group solely to secure that
debt)."
12
"'CORPORATE GUARANTEE' means the guarantee and
indemnity referred to in Clause 11.1.4."
"'CORPORATE GUARANTOR' means Safe Bulkers."
"'CURRENT SHAREHOLDERS' means the shareholders of the
Corporate Guarantor who beneficially hold directly or
indirectly not less than fifty one per cent (51%) of
the shares in the Corporate Guarantor on the date of
the Listing." "'DEBT' means the aggregate (as of the
date of calculation) of all obligations of the Group
then outstanding for the payment or repayment of
Financial Indebtedness as stated in the Accounting
Information then most recently required to be
delivered pursuant to Clauses 13.1.1 and 13.1.4
including, without limitation:
(a) any amounts payable by the Group under
leases, including, but not limited to, time
chartering contracts, or similar
arrangements over their respective periods;
(b) any credit to the Group from a supplier of
goods or under any instalment purchase or
other similar arrangement;
(c) the aggregate amount then outstanding of
liabilities and obligations of third parties
to the extent that they are guaranteed by
the Group;
13
(d) any contingent liabilities (including any
taxes or other payments under dispute or
arbitration) which have been or, under GAAP,
should be recorded in the notes to the
Group's financial statements; and
(e) any deferred tax liabilities."
"'EBITDA' on a consolidated basis of the Group means
the earnings before interest, expenses and other
financial charges, taxes, depreciation and
amortization (for the previous period of twelve
months).
"'EFRAGEL GUARANTEES' means the guarantees and
indemnities to be granted by the Borrower in favour
of the Lender in respect of each of the Pelea
Indebtedness, the Marindou Indebtedness and the
Avstes Indebtedness and "EFRAGEL GUARANTEE" means any
one of them."
"'GAAP' means generally accepted accounting
principles in the United States of America."
"'GROUP' means the Corporate Guarantor and its
Subsidiaries."
"'GROUP GUARANTEES' means the Marindou Guarantee, the
Pelea Guarantee and the Avstes Guarantee, and "GROUP
GUARANTEE" means any one of them."
"'GROUP GUARANTORS' means Marindou, Pelea and Avstes,
and "GROUP GUARANTOR" means any one of them."
14
"'GUARANTEES' means the Corporate Guarantee and the
Group Guarantees and "GUARANTEE" means any one of
them."
"'GUARANTORS' means the Corporate Guarantor and the
Group Guarantors, and "GUARANTOR" means any one of
them."
"'LISTING' means the effective trading date of the
shares of the Corporate Guarantor listed on the New
York Stock Exchange."
"'MARGIN' means zero point seventy per cent (0.70%)
per annum."
"'MARINDOU' means Marindou Shipping Corporation, a
company incorporated according to the laws of the
Republic of Liberia or such other company which shall
be its successor in title."
"'MARINDOU AGREEMENT" means the reducing revolving
multi-currency credit facility agreement dated 11
January 2008 made between Marindou, as borrower and
the Lender, as lender, as amended and/or supplemented
by a supplemental agreement dated 22 May 2008 entered
into by and between Marindou and the Lender, and as
the same may be further amended and/or supplemented
and/or novated from time to time."
"'MARINDOU GUARANTEE' means the guarantee of Marindou
referred to in Clause 11.1.5."
"'MARINDOU INDEBTEDNESS' means the Indebtedness as
such term is defined in the Marindou Agreement."
15
"'MARKETABLE SECURITIES' means any bonds, stocks,
notes or bills payable in a freely convertible and
transferable currency and which are listed on a stock
exchange acceptable to the Lender."
"'NET WORTH' means Consolidated Total Assets less
Consolidated Total Liabilities."
"'NEW MANAGEMENT AGREEMENT' means the agreement for
the commercial and technical management of the Vessel
made or to be made between the Borrower and the
Managers."
"'NEW MANAGERS' CONFIRMATION' means a letter of
confirmation from the Managers in respect of the
Vessel and the Borrower."
"'OPERATING ACCOUNT CHARGE' means the deed of charge
referred to in Clause 11.1.8."
"'OWNER' means Owner A or Owner B, together the
"'OWNERS"."
"'OWNER A' means a single purpose ship-owning company
incorporated or to be incorporated in a jurisdiction
acceptable to the Lender in its absolute discretion
and which shall be wholly owned legally and
beneficially by the Corporate Guarantor and which
shall be the owner of Vessel A."
"'OWNER B' means a single purpose ship-owning company
incorporated or to be incorporated in a jurisdiction
acceptable
16
to the Lender in its absolute discretion and which
shall be wholly owned legally and beneficially by the
Corporate Guarantor and which shall be the Owner of
Vessel B."
"'PELEA' means Pelea Shipping Ltd., a company
incorporated according to the laws of the Republic of
Liberia or such other company which shall be its
successor in title."
"'PELEA AGREEMENT' means the reducing revolving
multi-currency credit facility agreement dated 12
June 2007 made between Pelea, as borrower and the
Lender, as lender as amended and/or supplemented by a
supplemental agreement dated 22 May 2008 entered into
by and between Pelea and the Lender, and as the same
may be further amended and/or supplemented and/or
novated from time to time."
"'PELEA GUARANTEE' means the guarantee of Pelea
referred to in Clause 11.1.6."
"'PELEA INDEBTEDNESS' means the Indebtedness as such
term is defined in the Pelea Agreement."
"'SAFE BULKERS' means Safe Bulkers Inc., a company
incorporated according to the laws of the Republic of
Xxxxxxxx Islands or such other company which shall be
its successor in title."
"'SIDE LETTER' means the side letter evidencing the
Current Shareholders of the Corporate Guarantor on
the date of the
17
Listing issued by the Corporate Guarantor in favour
of the Lender in such form as the Lender may
require."
"'SUBSIDIARY' has the meaning ascribed to it by
section 1159 of the Companies Xxx 0000 (as the same
may be amended and/or supplemented from time to
time), and "SUBSIDIARIES" shall be interpreted
accordingly."
"'VESSEL A' means the dry-bulk carrier of
approximately 87,000 dwt and everything now or in the
future belonging to it on board and ashore, currently
under construction by the Builder with the Builder's
hull number 3255 to be named "MARTINE" and intended
to be registered under a flag acceptable to the
Lender in its absolute discretion in the ownership of
Owner A."
"'VESSEL A AGREEMENT' means the reducing revolving
multi-currency credit facility agreement to be
entered into by and between the Lender and Owner A
pursuant to which the Lender would advance to Owner A
an aggregate amount not exceeding forty five million
Dollars ($45,000,000) for the purpose of, inter alia,
financing part of the acquisition cost of Vessel A."
"'VESSEL A INDEBTEDNESS' means the Indebtedness as
such term is defined in the Vessel A Agreement."
"'VESSEL AGREEMENTS' means Vessel A Agreement and
Vessel B Agreement, "Vessel Agreement" means either
of them."
18
"'VESSEL B' means the dry-bulk carrier of
approximately 87,000 dwt, currently under
construction by the Builder with the Builder's hull
number 3254, to be named "ELENI" and intended to be
registered under a flag acceptable to the Lender in
its absolute discretion in the ownership of Owner B."
"'VESSEL B AGREEMENT' means the reducing revolving
multi-currency credit facility agreement to be
entered into by and between the Lender and Owner B
pursuant to which the Lender would advance to Owner B
an aggregate amount not exceeding forty five million
Dollars ($45,000,000) for the purpose of, inter alia,
financing part of the acquisition cost of Vessel B."
"'VESSEL B INDEBTEDNESS' means the Indebtedness as
such term is defined in the Vessel B Agreement."
4.1.2 The following definitions set out in clause 1.1 of
the Original Facility Agreement shall be deleted and
replaced by the following new respective
definitions:-
"'MANAGEMENT AGREEMENT' means the agreement(s) for
the commercial and/or technical management of the
Vessel between the Borrower and the Managers,
including, but not limited to, the New Management
Agreement."
"'OPERATING ACCOUNT' means the bank account opened in
the name of the Borrower with the Lender and
designated "Efragel
19
Shipping Corporation-Operating Account" with account
number 62555014."
"'RELEVANT DOCUMENTS' means the Finance Documents,
the Management Agreement, the Managers' confirmation
specified in Part I of Schedule 1 and the New
Managers' Confirmation."
"'SECURITY DOCUMENTS' means the Mortgage, the Deed of
Covenants, the Assignment, the Account Charge, the
Operating Account Charge, the Guarantees, any other
Credit Support Documents or (where the context
permits) any one or more of them and any other
agreement or document which may at any time be
executed by any person as security for the payment of
all or any part of the Indebtedness and "SECURITY
DOCUMENT" means any one of them."
"'SECURITY PARTIES' means the Borrower, the
Guarantors and any other Credit Support Provider and
any other person who may at any time during the
Facility Period be liable for, or provide security
for, all or any part of the Indebtedness, and
"SECURITY PARTY" means any one of them."
4.1.3 In clause 11.1.2 the word "and" at the end of the
sentence shall be deleted.
4.1.4 An additional clause 11.1.4 shall be added to the
Original Facility Agreement which shall be read and
construed as follows:-
20
"11.1.4 a guarantee and indemnity from the Corporate
Guarantor;"
4.1.5 An additional clause 11.1.5 shall be added to the
Original Facility Agreement which shall be read and
construed as follows:- "11.1.5 a guarantee and
indemnity from Marindou;"
4.1.6 An additional clause 11.1.6 shall be added to the
Original Facility Agreement which shall be read and
construed as follows:- "11.1.6 a guarantee and
indemnity from Pelea;"
4.1.7 An additional clause 11.1.7 shall be added to the
Original Facility Agreement which shall be read and
construed as follows:- "11.1.7 a guarantee and
indemnity from Avstes; and"
4.1.8 An additional clause 11.1.8 shall be added to the
Original Facility Agreement which shall be read and
construed as follows:-
"11.1.8 a first priority deed of charge over the
Operating Account and all amounts from time to time
standing to the credit of it."
4.1.9 Clause 12.1.14 of the Original Facility Agreement
shall be deleted and replaced by the following:-
21
"12.1.14 NO ESTABLISHED PLACE OF BUSINESS IN THE UK
OR US No Security Party, other than the Corporate
Guarantor, has an established place of business in
the United Kingdom or the United States of America."
4.1.10 Clause 13.1 of the Original Facility Agreement shall
be deleted and replaced by the following:-
"13.1 INFORMATION UNDERTAKINGS
13.1.1 FINANCIAL STATEMENTS The Borrower shall
procure that the Corporate Guarantor
supplies to the Lender as soon as the same
become available, but in any event within
one hundred and eighty (180) days after the
end of each of its financial years, its
audited consolidated financial statements
for that financial year, together with a
Compliance Certificate, signed by two
directors of the Corporate Guarantor,
setting out (in reasonable detail)
computations as to compliance with Clause
13.2.22 as at the date at which those
financial statements were drawn up.
13.1.2 MANAGEMENT ACCOUNTS The Borrower or the
Managers will supply to the Lender, on the
Lender's request within sixty (60) days of
the end of each calendar year during the
Facility Period the
22
unaudited management accounts for the Vessel
prepared by the Managers showing the income
and expenditure for the Vessel for such
calendar year.
13.1.3 REQUIREMENTS AS TO FINANCIAL STATEMENTS Each
set of financial statements delivered by the
Borrower or the Corporate Guarantor (as
applicable) under Clause 13.1.1 shall be:-
(a) prepared using GAAP; and
(b) certified by a director of the
Corporate Guarantor as fairly
representing its financial
condition as at the date at which
those financial statements were
drawn up.
13.1.4 INTERIM FINANCIAL STATEMENTS The Borrower
shall procure that the Corporate Guarantor
supplies to the Lender as soon as the same
become available, but in any event within
ninety (90) days after the end of each
quarter during each of the Corporate
Guarantor's financial years, its unaudited
consolidated quarterly financial statements
for that quarter, together with a Compliance
Certificate to be provided on a semi-annual
basis, signed by two directors of the
Corporate Guarantor, setting out (in
reasonable detail) computations as to
compliance
23
with Clause 13.2.22 as at the date at which
those financial statements were drawn up.
13.1.5 INFORMATION: MISCELLANEOUS The Borrower
shall supply to the Lender:
(a) all documents dispatched by the
Borrower to its shareholders (or
any class of them) or its creditors
generally at the same time as they
are dispatched other than any
documents that are subject to any
confidentiality restrictions
pursuant to the New York Stock
Exchange regulations that may
prohibit such dissemination;
(b) promptly upon becoming aware of
them, details of any litigation,
arbitration or administrative
proceedings which are current,
threatened or pending against any
Security Party, and which might, if
adversely determined, have a
materially adverse effect on the
business, assets, financial
condition or credit worthiness of
that Security Party; and
(c) promptly, such further information
regarding the financial condition,
business
24
and operations of any Security
Party as the Lender may reasonably
request.
13.1.6 NOTIFICATION OF DEFAULT
(a) The Borrower shall notify the
Lender of any Default (and the
steps, if any, being taken to
remedy it) promptly upon becoming
aware of its occurrence.
(b) Promptly upon a request by the
Lender, the Borrower shall supply
to the Lender a certificate signed
by two of its directors or senior
officers on its behalf certifying
that no Default is continuing (or
if a Default is continuing,
specifying the Default and the
steps, if any, being taken to
remedy it).
13.1.7 "KNOW YOUR CUSTOMER" CHECKS If:
(a) the introduction of or any change
in (or in the interpretation,
administration or application of)
any law or regulation made after
the date of this Agreement;
(b) any change in the status of the
Borrower after the date of this
Agreement; or
25
(c) a proposed assignment or transfer
by the Lender of any of its rights
and obligations under this
Agreement,
obliges the Lender (or, in the case of (c)
above, any prospective new Lender) to comply
with "know your customer" or similar
identification procedures in circumstances
where the necessary information is not
already available to it, the Borrower shall
promptly upon the request of the Lender
supply, or procure the supply of, such
documentation and other evidence as is
reasonably requested by the Lender for
itself (or, in the case of (c) above, on
behalf of any prospective new Lender) in
order for the Lender (or, in the case of (c)
above, any prospective new Lender) to carry
out and be satisfied it has complied with
all necessary "know your customer" or other
similar checks under all applicable laws and
regulations pursuant to the transactions
contemplated in the Finance Documents.
4.1.11 Clause 13.2.6 of the Original Facility Agreement
shall be deleted and replaced by the following:-
26
"13.2.6 NEGATIVE PLEDGE AND NO DISPOSALS Other than
in favour of the Lender, the Borrower shall
not create nor permit to subsist any
Encumbrance or other third party rights over
any of its present or future assets or
undertaking nor dispose of any those assets
or of all or part of that undertaking."
4.1.12 Clause 13.2.7 of the Original Facility Agreement
shall be deleted and replaced by the following:-
"13.2.7 MERGER The Borrower shall not without the
prior written consent of the Lender enter
into any amalgamation, demerger, merger or
corporate reconstruction other than the
Reorganization."
4.1.13 Clause 13.2.12 of the Original Facility Agreement
shall be deleted and replaced by the following:-
"13.2.12 NO SUBSTANTIAL LIABILITIES Except in the
ordinary course of business and other than
in favour of the Lender, the Borrower shall
not without the prior written consent of the
Lender incur any liability to any third
party which is in the Lender's opinion of a
substantial nature."
4.1.14 Clause 13.2.13 of the Original Facility Agreement
shall be deleted and replaced by the following:-
27
"13.2.13 NO LOANS OR OTHER FINANCIAL COMMITMENTS The
Borrower shall not without the prior written
consent of the Lender make any loan nor
enter into any guarantee or indemnity (other
than the Efragel Guarantees, other than any
guarantee or indemnity from time to time
required by any insurer and which is in
accordance with the terms and conditions of
clause 5 of the Deed of Covenants, the
Insurances and any acceptable Insurance
letter of undertaking) or otherwise
voluntarily assume any actual or contingent
liability in respect of any obligation of
any other person."
4.1.15 Clause 13.2.14 of the Original Facility Agreement
shall be deleted.
4.1.16 Clause 13.2.15 of the Original Facility Agreement
shall be deleted and replaced by the following:-
"13.2.15 INSPECTION OF RECORDS The Borrower will
permit the inspection of its financial
records and accounts and procure that the
Corporate Guarantor permits the inspection
of the Corporate Guarantor's financial
records and accounts from time to time by
the Lender or its nominee."
28
4.1.17 Clause 13.2.17 of the Original Facility Agreement
shall be deleted and replaced by the following:-
"13.2.17 NO CHANGE IN OWNERSHIP OR CONTROL OF THE
BORROWER OF THE MANAGERS The Borrower shall
not cease to be a wholly owned Subsidiary of
the Corporate Guarantor and shall not permit
any change in the beneficial ownership and
control of the Managers from that advised to
the Lender on the date of the Listing."
4.1.18 An additional clause 13.2.20 shall be added to the
Original Facility Agreement which shall be read and
construed as follows:-
"13.2.20 OWNERSHIP The Borrower shall procure that
the Corporate Guarantor shall remain
directly or indirectly beneficially owned by
its Current Shareholders or any of them at a
minimum of fifty one per cent (51%)."
4.1.19 An additional clause 13.2.21 shall be added to the
Original Facility Agreement which shall be read and
construed as follows:-
"13.2.21 GUARANTEES AND INDEMNITIES The Borrower
shall by not later than the execution date
of the Vessel Agreements execute in favour
of the Lender
29
guarantees and indemnities in such forms and
containing such terms and conditions as the
Lender shall in its discretion require and
which shall secure the Vessel A Indebtedness
and the Vessel B Indebtedness, and shall
procure that each Owner shall by not later
than the execution date of the relevant
Vessel Agreement grant in favour of the
Lender a guarantee and indemnity in such
form and containing such terms and
conditions as the Lender shall in its
discretion require and which shall secure
the Indebtedness."
4.1.20 An additional clause 13.2.22 shall be added to the
Original Facility Agreement which shall be read and
construed as follows:-
"13.2.22 FINANCIAL COVENANTS The Borrower shall
procure that the Corporate Guarantor shall
on a consolidated basis comply with the
following financial covenants to be assessed
on a semi-annual basis based on the
Accounting Information received by the
Lender in accordance with Clauses 13.1.1 and
13.1.4:-
(a) CONSOLIDATED GROUP LEVERAGE The
Consolidated Group Leverage shall
be equal to or less than seventy
per cent (70%).
30
(b) DEBT TO EBITDA RATIO The ratio of
Debt to EBITDA on a trailing twelve
(12) month's basis shall not at any
time exceed 5.5:1.
(c) NET WORTH The Net Worth shall not
at any time be less than one
hundred and seventy five million
Dollars ($175,000,000)."
4.1.21 Clause 14.1.8 of the Original Facility Agreement
shall be deleted and replaced by the following:-
"14.1.8 CHANGE IN OWNERSHIP OR CONTROL OF THE
BORROWER OR THE MANAGERS The Borrower ceases
to be a wholly owned Subsidiary of the
Corporate Guarantor or there is any change
in the beneficial ownership or control of
the Borrower or the Managers from that
advised to the Lender by the Borrower on the
date of the Listing."
4.1.22 Clause 14.1.14 of the Original Facility Agreement
shall be deleted and replaced by the following:-
"14.1.14 REDUCTION OF CAPITAL A Security Party (other
than the Corporate Guarantor) reduces its
authorised or issued or subscribed capital."
4.1.23 An additional clause 14.1.20 shall be added to the
Original Facility Agreement which shall be read and
construed as follows:-
31
"14.1.20 NOTICE OF TERMINATION Any of the Guarantors
gives notice to the Lender to determine its
obligations under the relevant Guarantee."
4.1.24 Clause 22.5 of the Original Facility Agreement shall
be deleted and replaced by the following:-
"22.5 SERVICE OF PROCESS Without prejudice to any
other mode of service allowed under any
relevant law, each Security Party:
22.5.1 irrevocably appoints Xx. Xxxxxx
Xxxxxxxx, 00 Xxxxxx Xxxx, Xxxxxx
X00 0XX, Xxxxxxx (tel/fax: +44 208
361 2606) as its agent for service
of process in relation to any
proceedings before the English
courts in connection with this
Agreement; and
22.5.2 agrees that failure by a process
agent to notify the relevant
Security Party of the process will
not invalidate the proceedings
concerned."
4.1.25 All references to "this Agreement" shall be
references to the Original Facility Agreement as
amended and/or supplemented by this Supplemental
Agreement.
32
4.1.26 The Schedule to this Supplemental Agreement shall be
incorporated as "Schedule 4" to the Original Facility
Agreement.
4.1.27 All references in the Security Documents to the
Agreement (however it may be defined) shall be read
and construed as the Original Facility Agreement as
supplemented and amended hereby.
4.1.28 All references to the "Security Documents" shall be
shall be read and construed to include the Guarantees
and the Operating Account Charge.
All other terms and conditions of the Original Facility Agreement shall
remain unaltered and in full force and effect.
5 CONFIRMATION AND UNDERTAKING
5.1 Each of the Security Parties confirms that all of its
respective obligations under or pursuant to each of the
Security Documents to which it is a party remain in full force
and effect, despite the amendments to the Original Facility
Agreement made in this Supplemental Agreement, as if all
references in any of the Security Documents to the Facility
Agreement (however described) were references to the Original
Facility Agreement as amended and supplemented by this
Supplemental Agreement.
5.2 The definition of any term defined in any of the Security
Documents shall, to the extent necessary, be modified to
reflect the amendments to the Original Facility Agreement made
in this Supplemental Agreement.
33
6 COMMUNICATIONS, LAW AND JURISDICTION
The provisions of clauses 18 and 22 of the Original Facility Agreement
shall apply to this Supplemental Agreement as if they were set out in
full and as if references to the Facility Agreement were references to
this Supplemental Agreement and references to the Borrower were
references to the Security Parties.
34
IN WITNESS of which the parties to this Supplemental Agreement have executed
this Supplemental Agreement as a deed the day and year first before written.
SIGNED AND DELIVERED AS )
A DEED BY )
EFRAGEL SHIPPING CORPORATION ) /s/ Xxxxxxx Xxxxxxxx
acting by XXXXXXX XXXXXXXX )
its duly authorised attorney-)
in-fact in the presence of: )
SIGNED AND DELIVERED AS
A DEED BY
DNB NOR BANK ASA /s/ Sofia Tzanaki
acting by SOFIA TZANAKI
its duly authorised attorney-
in-fact in the presence of:
XXXXX NEKLEZADE
XXXXXXXXXX XXXXXXX
ARISTON BUILDING
2 FILELLINON STR. & AKTI MIAOULI
PIRAEUS 185 36
VAT. NO. 9 9 8 7 1 1 1 5 6
TEL 000 00 00 000
35
SCHEDULE
FORM OF COMPLIANCE CERTIFICATE
To: DNB NOR BANK ASA
From: SAFE BULKERS INC.
Dated:
Dear Sirs
EFRAGEL SHIPPING CORPORATION - US$42,000,000 REDUCING REVOLVING MULTI-CURRENCY
CREDIT FACILITY AGREEMENT DATED 11 JANUARY 2008 AS AMENDED, SUPPLEMENTED,
NOVATED AND/OR REPLACED FROM TIME TO TIME (THE "AGREEMENT")
We refer to the Agreement. This is a Compliance Certificate. Terms defined in
the Agreement have the same meaning when used in this Compliance Certificate
unless given a different meaning in this Compliance Certificate.
The covenant calculations below are made as of, and in respect of the six (6)
month period ending on [ ].
We confirm that:
Agreement Covenant determination/
Clause Calculation compliance (MIN/MAX AMOUNT)
13.2.23(a) CONSOLIDATED GROUP LEVERAGE
Consolidated Total Liabilities USD[ ]
/ Consolidated Total Assets USD[ ]
= Consolidated Group Leverage [ %] [maximum 70%]
13.2.23(b) DEBT TO EBITDA RATIO
Debt USD[ ]
/ EBITDA USD[ ]
= Debt to EBITDA ratio [ ] [maximum 5.5:1]
13.2.23(c) NET WORTH
Consolidated Total Assets USD[ ]
(minus) Consolidated Total Liabilities USD[ ]
= Net Worth [ %] [min. USD175,000,000]
36
[We confirm that no Default is continuing.]*
Signed: ___________________________ ___________________________
Director Director
of of
SAFE BULKERS INC. SAFE BULKERS INC.
________________________
* If this statement cannot be made, the certificate should identify any
Default that is continuing and the steps, if any, being taken to remedy it.
37
