EAGLE BULK SHIPPING INC. : Entering into a material definitive agreement, creating a direct financial obligation or an obligation under an off-balance sheet arrangement of a registrant (Form 8-K)

Article 1.01. Significant definitive agreement reached

The information provided in section 2.03 below is incorporated herein by reference, where applicable.

Article 2.03. Creation of a direct financial obligation or obligation under an off-balance sheet arrangement of a registrant.

At October 1, 2021, Bulk Eagle Ultraco LLC (“Eagle Ultraco”), a wholly owned subsidiary of Eagle Bulk Shipping Inc. (the “Company”), entered into a new senior secured credit facility (the “Credit Agreement”), with the Company and certain of its indirect vessel-owning subsidiaries, as guarantors (the “Guarantors”) , the lenders who are parties to it (the “Lenders”), the swap banks which are parties to it, Crédit Agricole Corporate and Investment Banking (“Crédit Agricole”), Skandinaviska Enskilda Banken AB (PUBL), Danish Ship Finance A / S, Nordea Bank ABP, Subsidiary i Norge and DNB Markets Inc., as lead managers and mandated bookkeepers, DNB Bank ASA, as swap coordinator, Deutsche Bank AG and ING Bank NV, London Branch, as lenders, and Crédit Agricole, as security trustee, structurer, sustainability coordinator and installation agent. The credit agreement provides for an overall principal amount of $ 400.0 million, which consists of (i) a term loan facility with a total principal of $ 300.0 million (the “Term Facility”) to be used to refinance existing facilities (as defined below) and for general corporate purposes and (ii) a revolving credit facility in the aggregate principal amount of $ 100.0 million (the “Revolving Facility”) to be used for refinancing existing facilities and for general business purposes. Subject to certain conditions set out in the credit agreement, Eagle Ultraco may request an increase of up to $ 60.0 million in the overall capital of the term loan. The Company paid fees of $ 5.8 million to lenders as part of the transaction.

Borrowings outstanding under the credit agreement bear interest at 2.45% as the initial interest rate until the Company delivers certain third quarter financial statements and a certificate of compliance. Thereafter, the interest rate varies between 2.10% and 2.80% plus LIBOR based on the consolidated net leverage ratio and the execution of certain criteria related to sustainability as defined under the terms of the Credit Agreement.

The “Existing facilities” refer to (i) the senior guarantee at 8.25% $ 200.0 million
obligations (“Norwegian bond debt”), (ii) the credit agreement, initially dated
25 january 2019 and amended and updated as of April 5, 2021 to the principal amount of $ 283.4 million (“Ultraco Loan Facility”) and (iii) the Credit Agreement, dated March 26, 2021, produced by, among others, Eagle Bulk Holdco LLC, a wholly owned subsidiary of the Company as borrower and Crédit Agricole as guarantee trustee and facility agent, for the principal amount of
$ 35.0 million (“Holdco RCF”).

Under the terms of the credit agreement, the Company borrowed $ 350.0 million and with cash on hand, repayment of unpaid debt and accrued interest under the Ultraco and Holdco RCF loan facility. Concurrently, the Company issued a ten-day call notice to redeem the outstanding Norwegian bond debt obligations at a redemption price of 102.475% of the face amount of each bond. Under the terms of the obligation, the Company paid $ 185.6 million made up of $ 176.0 million nominal value of outstanding bonds, accrued interest of $ 5.2 million and
$ 4.4 million the call premium on a defeasance account to then be credited to bondholders at the end of the notice period.

As of the date of this report, the availability under the revolver facility is
$ 50.0 million.

The credit agreement expires on the earliest of the following dates: (i) five years from the date of borrowing from the term facility and (ii) December 31, 2026 (the due date “). With regard to the credit agreement, Eagle Ultraco must repay the total amount of the capital of $ 12.5 million in quarterly installments until the due date, with a final lump sum payment of all outstanding debts remaining under the credit agreement to be made on the due date.

Interest accrued on amounts overdue under the Term Facility and the Revolving Facility must be paid on the last day of each applicable interest period. The interest periods are three months, six months or any other period agreed between Eagle Ultraco and the Lenders. Finally, Eagle Ultraco must prepay certain specified amounts

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unpaid under the credit agreement if a Eagle Ship (as defined below) is sold or becomes a total loss or if there is a change of control with respect to the Company, Eagle Ultraco or any Guarantor.

Eagle Ultraco’s obligations under the Credit Agreement are secured, inter alia, by a first mortgage on 49 vessels owned by the Guarantors, as identified in the Credit Agreement and on other vessels it may include from time to time with the approval of the lenders (the “Eagle Ships”), assignment of certain accounts, assignment of certain charters with a term exceeding 13 months, assignment of insurance, assignment of certain agreements- executives and a pledge of member interests of Eagle Ultraco and each Guarantor. In the future, Eagle Ultraco or the Guarantors may grant additional security to Lenders from time to time.

The credit agreement contains financial covenants requiring the company, on a consolidated basis, to maintain at all times (a) (i) cash and cash equivalents or (ii) unused revolving facility commitments for up to six months. months before the termination date by an amount at least the greater of (i) $ 600,000 by ship or (ii) 7.5% of the total consolidated debt; (b) maintain a debt-to-capitalization ratio not exceeding 0.6; and (c) maintain positive working capital. In addition, the Company must ensure that the overall fair market value of the Eagles Ships is not less than 140% of the total principal amount outstanding under the credit agreement.

The Credit Agreement also imposes operating restrictions on Eagle Ultraco and the Guarantors, including limiting the ability of Eagle Ultraco and the Guarantors to, among other things: incur additional indebtedness; create privileges on assets; sell assets; dissolve or liquidate; merge or consolidate with another person; make investments; carry out transactions with affiliates; and allow certain changes of control. The credit agreement does not impose any restriction on the payment of dividends as long as the Company respects its financial commitments and no event of default continues before and after the declaration and payment of this dividend.

Finally, the Credit Agreement includes the usual cases of default, in particular those related to: default in payment of principal or interest; breach of an undertaking, representation or warranty; a cross default on other debts; the occurrence of certain bankruptcy and insolvency events; the occurrence of certain ERISA events; lack of judgment; cessation of activity; the impossibility or illegality of execution of the loan documents; the ineffectiveness of any material provision of any loan document; the occurrence of a significant adverse effect; and the occurrence of certain swap terminations.

The above summary of the credit agreement does not purport to be complete and is qualified in its entirety by reference to the complete copy of the credit agreement, which will be filed with the United States Securities Commission
as required by applicable rules.

Forward-looking statements

The matters discussed in this current report on Form 8-K may constitute forward-looking statements which may be considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements reflect current opinions regarding future financial events and performance and may include statements regarding plans, objectives, goals, strategies, future events or performance, and underlying assumptions and others. statements, which are other than statements of historical fact. These statements may include words such as “believe”, “estimate”, “plan”, “intend”, “expect”, “plan”, “anticipate” and similar expressions in connection with any discussion. about the time or nature of future operational or financial performance or other events.

These forward-looking statements are based on various assumptions, many of which, in turn, are based on other assumptions, including, without limitation, a review of historical operating trends, data in our records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, as these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond the control of the Company, the Company cannot assure you that it will meet or fulfill these expectations. , beliefs or projections.

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Important factors which, in the opinion of the Company, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of global economies and currencies, general market conditions, including changes in charter rental rates and vessel values, changes in demand which may affect the attitude of time charterers towards scheduled and unplanned dry-docking, changes in operating expenses of vessels, including the costs of drydocking and insurance, or actions taken by regulatory authorities, the ability of the Company’s counterparties to meet their obligations under sales agreements, ‘timely charter and other agreements, potential liability for future litigation, domestic and international political conditions, potential disruption of r maritime routes due to accidents and political events or terrorist acts.

The risks and uncertainties are described in more detail in the reports filed by the Company with the United States Securities Commission.

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