egle20140627

0001437749-14-012001.txt : 20140627 0001437749-14-012001.hdr.sgml : 20140627 20140627173140 ACCESSION NUMBER: 0001437749-14-012001 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20140627 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20140627 DATE AS OF CHANGE: 20140627 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Eagle Bulk Shipping Inc. CENTRAL INDEX KEY: 0001322439 STANDARD INDUSTRIAL CLASSIFICATION: DEEP SEA FOREIGN TRANSPORTATION OF FREIGHT [4412] IRS NUMBER: 980450435 FISCAL YEAR END: 0521 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-33831 FILM NUMBER: 14946740 BUSINESS ADDRESS: STREET 1: 477 MADISON AVENUE STREET 2: SUITE 1405 CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 212-785-2500 MAIL ADDRESS: STREET 1: 477 MADISON AVENUE STREET 2: SUITE 1405 CITY: NEW YORK STATE: NY ZIP: 10022 8-K 1 egle20140627_8k.htm FORM 8-K egle20140627_8k.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 27, 2014

Eagle Bulk Shipping Inc.
(Exact name of registrant as specified in its charter)
Republic of the Marshall Islands	001-33831	98-0453513
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS employer identification no.)

477 Madison Avenue New York, New York		10022
(Address of principal executive offices)		(Zip Code)

(Registrant's telephone number, including area code): (212) 785-2500

(Former Name or Former Address, if Changed Since Last Report): None

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

Amendment No. 6 to Waiver and Forbearance Agreement

On March 20, 2014, the Company announced that it had entered into the Waiver and Forbearance Agreement (as amended or modified from time to time, the “Waiver”) with lenders (the “Lenders”) constituting “Majority Lenders” under the Fourth Amended and Restated Credit Facility, dated as of June 20, 2012, by and among the Company, the Royal Bank of Scotland plc, and the lenders party thereto (the “Credit Agreement”).

Under the terms of the Waiver, the Lenders agreed to waive until June 30, 2014 (the “Outside Termination Date”) certain potential events of default, subject to the Company’s compliance with the terms, conditions and milestones as set forth in the Waiver. On June 27, 2014, the Company and the Lenders entered into Amendment No. 6 to the Waiver (the “Amendment”) to facilitate continued discussions between the Company and its Lenders. Pursuant to the Amendment, (a) the milestone requiring the Company and the Majority Lenders to (i) agree on terms of a restructuring of the obligations outstanding under the Credit Agreement (a “Restructuring”) and (ii) execute a binding restructuring support agreement or similar agreement documenting such agreed-upon terms, has been extended from June 27, 2014 to July 15, 2014 and (b) the Outside Termination Date restriction has been eliminated.

In addition, the Company will not make the scheduled June 30, 2014 interest payment under the Credit Agreement. In furtherance of ongoing restructuring discussions, the Lenders have agreed to forbear from exercising any rights or remedies with respect to this otherwise due interest payment until the termination of the forbearance period afforded by the Waiver. Interest will continue to accrue on the unpaid interest payment during the period of forbearance at the penalty rate specified in the Credit Agreement.

The Waiver remains in effect on substantially the same terms and conditions, with certain modifications as set forth in the Amendment. There can be no assurance that the Company will be able to comply with the terms, conditions and milestones set forth in the Waiver, particularly those that are outside of the Company’s exclusive control.

The Company continues to have discussions with representatives of the Lenders pursuant to the Waiver. Although there can be no assurance that the Company will be able to reach an agreement with the Lenders regarding the terms of a Restructuring, it is expected that any Restructuring transaction would be substantially dilutive to the Company’s current shareholders. Additional discussion regarding the impact of a failure to reach a consensual resolution with the Lenders can be found in the Company’s (i) Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on March 31, 2014, in particular, discussion under the heading “Risk Factors – Company Specific Risk Factors”, and (ii) Form 10-Q for the quarter ended March 31, 2014 and filed with the Securities and Exchange Commission on May 15, 2014.

A copy of the Amendment is attached hereto as Exhibit 10.1.

A copy of the Waiver is attached as Exhibit 10.11 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. A copy of Amendment No. 1 to the Waiver is attached as Exhibit 10.1 to the Company’s Form 8-K filed on April 15, 2014. A copy of Amendment No. 2 to the Waiver is attached as Exhibit 10.1 to the Company’s Form 8-K filed on May 1, 2014. A copy of Amendment No. 3 to the Waiver is attached as Exhibit 10.1 to the Company’s Form 8-K filed on May 15, 2014. A copy of Amendment No. 4 to the Waiver is attached as Exhibit 10.1 to the Company’s Form 8-K filed on June 2, 2014. A copy of Amendment No. 5 to the Waiver is attached as Exhibit 10.1 to the Company’s Form 8-K filed on June 5, 2014.

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ITEM 8.01 OTHER EVENTS.

The Company will not make the scheduled June 30, 2014 interest payment under the Credit Agreement. In furtherance of ongoing restructuring discussions, the Lenders have agreed to forbear from exercising any rights or remedies with respect to this otherwise due interest payment until the termination of the forbearance period afforded by the Waiver. Interest will continue to accrue on the unpaid interest payment during the period of forbearance at the penalty rate specified in the Credit Agreement.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits:

Exhibit No.		Description

10.1		Amendment No. 6 to Waiver and Forbearance Agreement entered into between Eagle Bulk Shipping Inc. and certain lenders under its Fourth Amended and Restated Credit Agreement, dated June 27, 2014.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	EAGLE BULK SHIPPING INC.
	(registrant)


Dated: June 27, 2014	By:	/s/ Adir Katzav
	Name:	Adir Katzav
	Title:	Chief Financial Officer

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EX-10 2 ex10-1.htm EXHIBIT 10.1 ex10-1.htm

Exhibit 10.1

EXECUTION VERSION

AMENDMENT NO. 6 TO WAIVER AND FORBEARANCE AGREEMENT

This AMENDMENT NO. 6 TO WAIVER AND FORBEARANCE AGREEMENT, dated as of June 27, 2014 (the “Amendment”), is made and entered into by and among (i) Eagle Bulk Shipping Inc. (the “Borrower”) and its subsidiaries (collectively, the “Guarantors”, and together with the Borrower, the “Loan Parties”) and (ii) certain lenders under the Credit Agreement (collectively, the “Lenders”). The Loan Parties and the Lenders party hereto are hereinafter referred to collectively as the “Parties.”

RECITALS

WHEREAS, the Loan Parties and Lenders constituting the “Majority Lenders,” as that term is defined in the Credit Agreement, entered into that certain Waiver and Forbearance Agreement dated as of March 19, 2014 (as subsequently amended, the “Waiver and Forbearance Agreement”).

WHEREAS, on or about March 31, 2014, the Loan Parties disclosed that they had failed to meet the maximum leverage ratio covenant in the Credit Agreement as of December 31, 2013, which covenant was one of the “Acknowledged Potential Defaults” as defined in the Waiver and Forbearance Agreement.

WHEREAS, the Loan Parties have informed the Lenders that certain additional Defaults or Events of Default may occur under the Credit Agreement.

WHEREAS, the Lenders party hereto collectively hold more than 66-2/3% of the revolving and term loans outstanding under the Credit Agreement as of the date hereof and constitute the “Majority Lenders” as that term is defined in the Credit Agreement.

WHEREAS, the Borrower has requested that the Lenders further amend the Waiver and Forbearance Agreement in certain respects and, subject to the terms and conditions hereof, the Lenders party hereto are willing to agree to such request, but only upon the terms and conditions set forth herein.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

1. Terms. Capitalized terms used herein, but not otherwise defined, shall have the meanings given to them in the Waiver and Forbearance Agreement, as amended, or the Credit Agreement, as applicable.

2. Amendment to Waiver and Forbearance Agreement. The Waiver and Forbearance Agreement is hereby amended as follows:

(a) Section 1(a) of the Waiver and Forbearance Agreement is hereby amended and restated as follows:

During the Waiver and Forbearance Period (as defined below), the Lenders agree that they will (x) waive the Acknowledged Potential Defaults (excluding the Interest Defaults (defined below)) and (y) not, solely by reason of the Acknowledged Potential Defaults (including, for the avoidance of doubt, the Interest Defaults), (i) exercise any right and remedy that may become available to them under the Credit Agreement, any other Finance Document, or applicable law, or (ii) initiate, join in, or encourage in any way an instruction or direction to the Agent to exercise any rights and remedies under the Credit Agreement, the other Finance Documents or applicable law in connection with the Acknowledged Potential Defaults. As that term is used herein, “Interest Defaults,” means the Events of Default identified on Exhibit A to Amendment No. 6 to Waiver and Forbearance Agreement, dated as of June 27, 2014, by and between the Loan Parties and the Lenders party thereto.

(b) Section 2(a) of the Waiver and Forbearance Agreement is hereby amended as follows:

(i)

The reference to “June 27, 2014” appearing in subsection (i) is deleted, and replaced with “July 15, 2014”;

	(ii)	Subsection (iv) is amended to add the word “or” to the end thereof;

	(iii)	The phrase “; or” appearing in subsection (v) is deleted, and replaced with “.”; and

	(iv)	Subsection (vi) is deleted in its entirety.

(c) Schedule 1 to the Waiver and Forbearance Agreement is hereby amended to include the Interest Defaults identified on Exhibit A hereto.

3. Default Interest. The Parties hereby agree as follows:

(a) In the event that the Loan Parties fail to pay the Cash Pay Interest (as that term is defined in the Credit Agreement) to the Lenders on the last day of the Interest Period pursuant to Section 8.2(a) of the Credit Agreement, then the Loan Parties acknowledge and agree that interest shall accrue on such Unpaid Sum (as that term is defined in the Credit Agreement) in accordance with Section 8.3(a) of the Credit Agreement.

(b) The Consenting Lenders agree that, notwithstanding the terms of Section 8.3 of the Credit Agreement, they will not seek payment of such Unpaid Sum or interest accruing thereon and hereby agree to forbear from (i) exercising any rights and remedies with respect thereto available to them under the Credit Agreement, any other Finance Document or applicable law or (ii) initiate, join in, or encourage in any way an instruction or direction to the Agent to exercise any rights and remedies with respect thereto under the Credit Agreement, the other Finance Documents or applicable law until the termination of the Waiver Forbearance Period (as amended by the Prior Amendments and this Amendment). Any Restructuring Support Agreement subsequently entered into by the Parties shall provide for continuation of the forbearance set forth in this clause (b) until the occurrence of a termination event or event of default thereunder.

(c) Nothing herein shall affect the continued accrual of Capitalized Interest in accordance with Section 8.2(b) of the Credit Agreement.

4. Additional Agreements. Schedule 17 of the Credit Agreement is hereby amended to include a new primary account and a new deposit account to be opened and maintained by Eagle Management Consultancy Pte Ltd, which accounts shall not contain funds exceeding 100,000 Singapore dollars in the aggregate at any one time; provided, further, that the Loan Parties shall deliver to the Agent information reasonably necessary to identify such primary and deposit accounts promptly following the opening of such account.

5. Agreements and Acknowledgements. Each Loan Party hereby agrees, confirms and acknowledges as follows:

(a) As of the Amendment Effective Date (as defined below), the Borrower is indebted to the Lenders in an aggregate amount of $1,208,601,511, comprised of (i) $20,000,000 in Revolving Loan Commitments and $0 in Revolving Loans outstanding, (ii) $1,129,478,742 in Term Loan Commitments and $1,129,478,742 in Term Loans outstanding, and (iii) $59,122,769 of PIK Loans, plus accrued but unpaid interest, plus the costs and expenses incurred by the Agent and the Lenders and payable under the Finance Documents.

(b) As of the Amendment Effective Date, each Loan Party continues to be in compliance with all of the terms and provisions set forth in the Waiver and Forbearance Agreement (as amended by the Prior Amendments and this Amendment).

(c) As of the Amendment Effective Date, the representations and warranties set forth in the recitals hereto and in the Waiver and Forbearance Agreement (as amended by the Prior Amendments) are true and correct with the same effect as though such representations and warranties had been made on the date hereof.

(d) The Waiver and Forbearance Agreement (as amended by the Prior Amendments and this Amendment) has been duly executed and delivered on each Loan Party’s behalf by a duly authorized officer, and constitutes each Loan Party’s legal, valid and binding obligation enforceable in accordance with its terms.

6. Effect of Waiver and Forbearance Agreement. Except as specifically amended hereby, the terms and provisions of the Waiver and Forbearance Agreement (as amended by the Prior Amendments) are in all other respects ratified and confirmed and remain in full force and effect without modification or limitation. This Amendment is not intended to be, nor shall it be construed to create, a novation, a waiver or accord and satisfaction of the Waiver and Forbearance Agreement or any obligations thereunder. No reference to this Amendment need be made in any notice, writing or other communication relating to the Waiver and Forbearance Agreement, and any such reference to the Waiver and Forbearance Agreement is deemed a reference thereto as amended by this Amendment.

7. Condition Precedent to Amendment Effective Date. This Amendment shall not become effective unless and until each of the following occurs (the date on which each of the following occurs, the “Amendment Effective Date”):

(a) The Amendment is duly executed by the Parties, including Lenders constituting the “Majority Lenders” under the Credit Agreement.

(b) The Loan Parties pay any outstanding fees and expenses incurred by Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Houlihan Lokey Capital, Inc., as advisors to the Lenders, in accordance with the terms of their respective engagement letters, that were invoiced to the Borrower on or before June 25, 2014.

8. Release.

In consideration of the agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Loan Party, on behalf of itself and its successors and assigns, and its present and former members, affiliates, employees, agents, officers, directors, shareholders, legal representatives and other representatives (each, a “Releasing Party” and collectively, the “Releasing Parties”), does hereby remise, release and discharge, and shall be deemed to have forever remised, released and discharged each of the Lenders, and each Lender’s respective successors and assigns, and past, present and future officers, directors, affiliates, shareholders, trustees, agents, employees, consultants, experts, advisors, attorneys and other professionals and all other persons and entities to whom any of the foregoing would be liable if such persons or entities were found to be liable to any Releasing Party, or any of them (collectively hereinafter the “Released Parties”), of and from any and all manner of action and actions, cause and causes of action, claims, demands, suits, damages and any and all other claims, counterclaims, defenses, rights of setoff, demands and liabilities whatsoever (each, a “Claim” and collectively, the “Claims”) of every kind and nature, whether in law, equity or otherwise, known or unknown, fixed or contingent, joint and/or several, secured or unsecured, liquidated or unliquidated, suspected or unsuspected, which any Releasing Party may now or hereafter own, hold, have or claims to have against the Released Parties, in their capacities as such under the Credit Agreement or other Finance Documents, for, upon, or by reason of any circumstance, action, fact, event or omission or other matter occurring at or from any time prior to and including the Amendment Effective Date in any way arising out of, connected with or relating to this Amendment, the Waiver and Forbearance Agreement, the Credit Agreement, any other Finance Document and the transactions contemplated thereby or hereunder; provided, however, that no Released Party shall be released from any act or omission that constitutes gross negligence, fraud or wilful misconduct.

9. Governing Law; Jurisdiction; Waiver of Jury Trial. This Amendment shall be governed by and construed in accordance with the law of the State of New York, without reference to the conflicts or choice of law provisions thereof. Each of the Parties hereby consents and agrees that the jurisdiction provisions of the Credit Agreement shall govern any action, claim or other proceeding in respect of this Amendment or any matters arising out of or related thereto. Each of the Parties hereby waives its respective rights to a jury trial with respect to any action, claim or other proceeding arising out of any dispute in connection with this Amendment, any rights or obligations hereunder, or the performance of such rights and obligations.

10. Counterparts. This Amendment may be executed by one or more of the Parties on any number of separate counterparts (including by electronic transmission of signature pages hereto), and all of such counterparts taken together shall be deemed an original and to constitute one and the same instrument.

11. Reference to Waiver and Forbearance Agreement. All references to the “Waiver and Forbearance Agreement”, “hereunder”, “hereof” or words of like import in the Waiver and Forbearance Agreement shall mean and be a reference to the Waiver and Forbearance Agreement as modified hereby and as may in the future be amended, restated, supplemented or modified from time to time.

12. No Other Amendment; Reservation of Rights; No Waiver; Finance Document. This Amendment shall be part of the Waiver and Forbearance Agreement and shall constitute a Finance Document as that term is defined in the Credit Agreement. Other than as otherwise expressly provided herein and in the Waiver and Forbearance Agreement, this Amendment shall not be deemed to operate as an amendment or waiver of, or to prejudice, any right, power, privilege, or remedy of the Lenders under this Amendment, the Wavier and Forbearance Agreement, the Credit Agreement, any other Finance Document, or applicable law, nor shall entering into this Amendment preclude the Lenders from refusing to enter into any further amendments, waivers or forbearances with respect to the Credit Agreement.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

BORROWER:	EAGLE BULK SHIPPING INC.


	By:	/s/ Adir Katzav
		Name: Adir Katzav
		Title: Chief Financial Officer



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