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EAGLE BULK SHIPPING INC. FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Regulation FD Disclosure, Financial Statements and Exhibits

August 6, 2014


Restructuring Support Agreement

On August 6, 2014, Eagle Bulk Shipping Inc. (the "Company") and each of its direct and indirect subsidiaries entered into a Restructuring Support Agreement (the "RSA") with certain lenders (the "Consenting Lenders") under the Fourth Amended and Restated Credit Agreement, dated as of June 20, 2012, by and among the Company, the Royal Bank of Scotland plc, as Agent and Security Trustee, and the lenders party thereto (the "Credit Agreement"). Pursuant to the terms of the RSA, the Consenting Lenders (who collectively hold more than 85% of the loans outstanding under the Credit Agreement and constitute more than two-thirds of the lenders under the Credit Agreement) have agreed to support a balance sheet restructuring of the Company as reflected in the prepackaged plan of reorganization annexed thereto (the "Plan").

The RSA provides, subject to its terms and conditions, among other things:

? the Consenting Lenders agree to: (i) support and take all actions necessary or

reasonably requested by the Company to facilitate consummation of the

restructuring transaction contemplated by the RSA (the "Restructuring"),

including to timely vote to accept the proposed Plan and not to elect to

preserve any claims in connection therewith; (ii) support confirmation of the

Plan and approval of the disclosure statement in respect of the Plan (the

"Disclosure Statement"); (iii) neither join in, nor support, any objection to

the Disclosure Statement, the solicitation procedures, or the Plan, or

otherwise commence any proceeding to oppose or alter any of the terms of the

Plan or any other document filed by the Company in connection with the

confirmation of the Plan; (iv) support the Company's efforts to obtain the Exit

Financing Facility (as defined below); (v) not exercise any right or remedy or

take any action in respect of any potential, actual, or alleged "Default" or

"Event of Default" under the Credit Agreement specified in the RSA or otherwise

triggered as a result of the commencement or pendency of the Prepackaged Case

(as defined below); (vi) use commercially reasonable efforts to execute any

document and give any notice, order, instruction, or direction necessary or

reasonable requested by the Company to support, implement and consummate the

Restructuring and (vii) support the Company's efforts to remain listed on the

NASDAQ Global Select Market ("NASDAQ") and, if the Company loses its NASDAQ

listing prior to the consummation of the Restructuring, support the Company's

efforts to become relisted on NASDAQ.

? the Company agrees to: (i) support and complete the Restructuring and all

transactions contemplated under the Plan and the RSA in accordance with certain

milestones, and take any and all necessary actions in furtherance of the

Restructuring, the RSA, and, once filed, the Plan; (ii) use commercially

reasonably efforts to obtain any and all required regulatory and/or third-party

approvals necessary to consummate the Restructuring; and (iii) take no action

materially inconsistent with the adoption and implementation of the Plan and

confirmation thereof.

The RSA is subject to termination in respect of the obligations of the Company and the Consenting Lenders by the mutual agreement of the Company and at least four Consenting Lenders who are not affiliates of each other and who hold, in the aggregate, at least 66 2/3% of the principal amount of the total outstanding loans under the Credit Agreement held by all Consenting Lenders (the "Majority Consenting Lenders"). The RSA is subject to termination in a number of other circumstances, including, without limitation:

? by the Company, following the occurrence of any of the events specified in the

RSA, including: (i) a breach by a Consenting Lender of its obligations under

the RSA that could reasonably be expected to have a material adverse impact on

the Restructuring or the consummation thereof and that remains uncured for the

specified period; (ii) the Company's board of directors (the "Board")

determining, consistent with its fiduciary duties, that (A) continued pursuit

of the Restructuring is inconsistent with its fiduciary duties, or (B) having

received an unsolicited proposal or offer for an alternative transaction other

than the Plan (an "Alternative Transaction"), that responding to such

Alternative Transaction is necessary and the Board determining to pursue such

Alternative Transaction; (iii) the Consenting Lenders at any time (A) do not

constitute more than 50% of the lenders under the Credit Agreement or (B) hold

collectively less than 66 2/3% of the total outstanding loans under the Credit

Agreement; (iv) the issuance by any governmental authority, including any

regulatory authority or court of competent jurisdiction, of an injunction,

judgment, decree or similar ruling or order preventing consummation of a

material portion of the Restructuring or (v) the effective date of the Plan

shall not have occurred by November 30, 2014; and

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? by any Consenting Lender, as to its own obligations, following the occurrence

of any of the events specified in the RSA (unless waived by such Consenting

Lender or by the Majority Consenting Lenders) including: (i) the Company's

failure to meet the milestones under the RSA unless such failure is due to a

fault on the part of a Consenting Lender; (ii) the Company's material breach of

the RSA that remains uncured for the specified period; (iii) the Company's or

any of its subsidiaries' breach of any representation, warranty, covenant or

obligation under the RSA that could reasonably be expected to have a material

adverse impact on the Restructuring or the consummation thereof which remains

uncured for the specified period; (iv)(A) the occurrence of an Event of Default

under (and as defined in) the Credit Agreement (other than specified defaults

or an Event of Default triggered as a result of the commencement or pendency of

the Prepackaged Case) or the credit agreement in respect of the DIP Facility

(as defined below) or (B) a violation of the Company's obligations under the

interim and final financing orders contemplated by the RSA, in each case that

remains uncured in accordance with the terms set forth therein; (v) the entry

by the Court (as defined below) of certain specified orders; (vi) the Company

or any of its subsidiaries amends or modifies the "Definitive Documentation"

(as defined in the RSA) unless such amendment or modification is consistent

with the RSA or reasonably acceptable to the Majority Consenting Lenders; (vii)

the Board of the Company or any of its subsidiaries authorizes and pursues an

Alternative Transaction, or any of the Company or its subsidiaries publicly

supports an Alternative Transaction or files a motion seeking authority to sell

any material assets, without the prior consent of the Majority Consenting

Lenders; (viii) the issuance by any governmental authority of any ruling

enjoining the substantial consummation of the Restructuring, subject to certain

exceptions; (ix) the filing by the Company or any of its subsidiaries of any

motion for relief seeking certain specified actions; (x) the amount or terms of

the Exit Financing Facility differ in a meaningful way from the terms of the

third-party exit financing proposal referenced in the RSA; or (xi) the

effective date of the Plan shall not have occurred by November 30, 2014

(provided that, notwithstanding anything to the contrary in the RSA, the

termination rights specified in clauses (x) and (xi) may not be amended, waived

or otherwise modified without the consent of such affected Consenting Lender).

The terms of the Restructuring include, among other things:

? entry into a $50 million new "debtor-in-possession" credit facility (the "DIP


? entry into a new senior secured credit facility (the "Exit Financing Facility")

upon the consummation of the Plan, which is anticipated to be in an amount of

$275 million (inclusive of a $50 million revolving credit facility);

? the cancellation of all equity interests in the Company;

? exchange of the loans under the Credit Agreement for (i) new shares of the

reorganized Company's common stock (the "New Eagle Equity") equal to 99.5% of

the total outstanding New Eagle Equity, subject to dilution by the MIP and the

Equity Warrants (each as defined below), and (ii) cash (the "Lender Cash

Distribution"); - 3 -


? the unimpairment of all general unsecured creditors' claims under section 1124

of the Bankruptcy Code (as defined below);

? the current holders of the Company's common stock (other than the Consenting

Lenders on account of shares received upon conversion of the Amended Lender

Warrants (as defined in the Plan)) receiving (i) shares equal to 0.5% of the

total outstanding New Eagle Equity (subject to dilution by the MIP and the

Equity Warrants), and (ii) warrants for 7.5% of the total outstanding New Eagle

Equity (subject to dilution by the MIP) exercisable at any time for a period of

seven years from the effective date of the Plan at the exercise price per share

set forth in the Plan (the "Equity Warrants"); and

? the establishment of a management equity incentive plan (the "MIP") reserving . . .


Copies of the Plan and the Disclosure Statement are being attached as Exhibit B and Exhibit C, respectively, to the RSA, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference. Exhibit C to the Disclosure Statement includes certain financial projections as to future performance which have not been previously publicly disclosed by the Company. Information contained in the Plan and Disclosure Statement is subject to change, whether as a result of amendments, actions of third parties or otherwise.

"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995

This Form 8-K contains forward-looking statements. These forward-looking statements are based on the current expectations and observations of the Company's management, and include factors that could cause actual results to differ materially, such as: the Company's ability to meet current operating needs, including its ability to maintain contracts that are critical to its operation, to obtain and maintain acceptable terms with its vendors, customers, and service providers and to retain key executives, managers, and employees; the Company's ability to obtain Court approval with respect to motions in the Prepackaged Case; the effects of the Court rulings in the Prepackaged Case and the outcome of the case in general; the length of time the Company will operate under the Prepackaged Case; the pursuit by the Company's various creditors, equity holders, and other constituents of their interests in the Prepackaged Case; risks associated with third party motions in the Prepackaged Case, which may interfere with the ability to consummate the Plan; the adverse effects of the Prepackaged Case on the Company's liquidity or results of operations generally; the increased administrative and restructuring costs related to the Prepackaged Case; the Company's ability to maintain adequate liquidity to fund operations during the Prepackaged Case and thereafter; the sufficiency of the "exit" financing contemplated by the Plan; the Company's ability in the future to arrange and consummate financing or sale transactions or to access capital; the effects of changes in the Company's credit ratings; the timing and realization of the recoveries of assets and the payments of claims in the Prepackaged Case and the amount of expenses projected to recognize such recoveries and reconcile such claims; the occurrence of any event, change, or other circumstance that could give rise to the termination of the RSA; the effects of actions taken by NASDAQ against the Company during the pendency of the Restructuring, including the possibility of delisting; and the other factors listed from time to time in the Company's filings with the SEC, including, without limitation, its Annual Report on Form 10-K for the year ended December 31, 2013 and subsequent filings on Form 10-Q and Form 8-K.

Nothing in this Current Report on Form 8-K shall constitute a solicitation of any holders of any of our indebtedness or our securities with respect to the matters contemplated in the RSA or an offer to buy or sell, or a solicitation of an offer to buy or sell, any securities of the Company.


(d) Exhibits: Exhibit No. Description 10.1 Restructuring Support Agreement by and among Eagle Bulk Shipping Inc., its subsidiaries and certain lenders under its Credit Agreement. - 5 -


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