Exhibit 10.7

Execution Version
 

 
FOURTH AMENDATORY AGREEMENT
 
FOURTH AMENDATORY AGREEMENT (this "Fourth Amendatory Agreement") is dated as of
August 4, 2010 and made between:
 
(1)
EAGLE BULK SHIPPING INC., a corporation incorporated in the Republic of the
Marshall Islands, as Borrower (the "Borrower");

 
(2)
THE SUBSIDIARIES of the Borrower party hereto as Guarantors (the "Guarantors");

 
(3)
THE BANKS AND FINANCIAL INSTITUTIONS whose names appear on the signature pages
hereof as Lenders (the "Existing Lenders");  and

 
(4)
THE ROYAL BANK OF SCOTLAND plc as Mandated Lead Arranger, Bookrunner, Swap Bank,
Agent and Security Trustee.

 
PRELIMINARY STATEMENTS:
 
(A)
The Borrower, the Guarantors, the Lenders described therein and The Royal Bank
of Scotland plc acting in the several capacities as Mandated Lead Arranger,
Bookrunner, Swap Bank, Agent and Security Trustee are parties to a Third Amended
and Restated Credit Agreement dated as of October 19, 2007 as amended by an
Amendatory Agreement dated as of July 3, 2008, a Second Amendatory Agreement
dated as of December 17, 2008 and a Third Amendatory Agreement dated as of
August 4, 2009 (the "Credit Agreement") providing for a secured reducing
revolving credit facility for the purposes described therein.

 
(B)
Subject to the consent of the Lenders to the extent required under the Credit
Agreement, the Borrower proposes to, among other things, establish a Subsidiary
to market and commercially operate, individually or in a pool, dry bulk carriers
owned by Obligors or other persons, to enter into contracts of affreightment,
options and freight forward agreements solely for the purpose of securing fixed
income in relation to dry bulk carriers chartered-in by such Subsidiary and
hedging exposure to fluctuations in exchange rates and fuel prices in relation
to dry bulk carriers chartered-in by such Subsidiary.

 
(C)
The Existing Lenders have agreed to consent to the transactions described in the
preceding paragraph on the terms and conditions herein provided.

 
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein, it is agreed as follows:
 
1.
DEFINITIONS

 
Words and expressions defined in the Credit Agreement shall have the same
meaning when used in this Fourth Amendatory Agreement unless the context
otherwise requires.
 
2.
REPRESENTATIONS AND WARRANTIES

 
 
Each Obligor jointly and severally represents and warrants to each Finance Party
that:

 

 
 

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(a)
All of the representations and warranties contained in Clause 18 of the Credit
Agreement are true and correct on and as of the date hereof as if made on and as
of the date hereof.

 
(b)
No Default has occurred and is continuing on the date hereof.

 
(c)
The obligations expressed to be assumed by it in this Fourth Amendatory
Agreement are, and, upon execution and delivery of this Fourth Amendatory
Agreement and each of the other documents contemplated hereby to which it is to
be a party, the obligations expressed to be assumed by it herein and in such
other documents will be, legal, valid, binding and enforceable obligations,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforceability of creditor's rights generally.

 
(d)
It has the power to enter into, perform and deliver, and has taken all necessary
action to authorize its entry into, performance and delivery of, this Fourth
Amendatory Agreement and the transactions contemplated by this Fourth Amendatory
Agreement.

 
3.
AMENDMENTS TO CREDIT AGREEMENT

 
With effect from the date hereof:
 
3.01
Clause 1.1 of the Credit Agreement is amended by inserting in the appropriate
alphabetical order the following new definition:

 
"Eagle Chartering"  means Eagle Bulk Pte. Ltd., a Singapore company and a direct
Wholly-Owned Subsidiary of the Borrower.
 
3.02
Clause 19.1 (Financial Statements) of the Credit Agreement is amended by
inserting a new sub-clause (c) as follows:

 
 
(c)
If requested by the Agent, management accounts to include (i) a balance sheet,
(ii) an income statement, and (iii) a statement of changes in retained earnings
(and any other financial information as requested by the Agent, acting on behalf
of the Lenders, in a format acceptable to the Agent) for the Borrower for any
Accounting Period prepared on a separate company basis (i.e., not consolidated).

 
3.03
Clause 22.4 (Disposals) of the Credit Agreement is amended by inserting a new
sub-clause (c) as follows:

 
 
(c)
Anything contained in paragraph (b) above to the contrary notwithstanding, until
the Minimum Required Security Cover Reinstatement Date shall have occurred no
Obligor shall sell, lease, transfer of otherwise dispose of (except for charters
in the ordinary course of its business) any Newbuilding or any Ship without the
prior written consent of Majority Lenders, which consent shall not unreasonably
be withheld.

 
3.04
Clause 22 (General Undertakings) of the Credit Agreement shall be amended by
inserting a new Clause 22.23 as follows:

 

 
 

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22.23
Eagle Chartering

 
Anything contained in this Agreement to the contrary notwithstanding:
 
 
(a)
Eagle Chartering may establish a commercial pool for the marketing and operation
of (i) Ships which are charter-free or subject to time charters of less than one
year, and (ii) at the option of Eagle Chartering, dry bulk carriers not owned by
the Borrower or its Subsidiaries.

 
 
(b)
Eagle Chartering may charter-in dry bulk vessels on a voyage charter or time
charter basis;  provided that the aggregate market exposure of Eagle Chartering
in relation to vessels operated by it shall not exceed $10,000,000.  For the
purpose of this Clause 22.23, the term "market exposure" means the difference
between (i) charter hire payable by Eagle Chartering, and (ii) earnings
contracted by way of physical contracts entered into by Eagle Chartering or by
way of freight derivative contracts entered into by Eagle Chartering.

 
 
(c)
Eagle Chartering may enter into (i) contracts of affreightment, options and
forward freight agreements, solely for the purpose of securing fixed income in
relation to vessels chartered-in or to be chartered-in by Eagle Chartering, and
(ii) contracts to hedge exposure to fluctuations in exchange rates and fuel
prices in relation to vessels chartered-in by Eagle Chartering.

 
 
(d)
The Borrower shall supply to the Agent, (i) quarterly with each Compliance
Certificate delivered pursuant to Clause 19.2 (Compliance Certificate), and (ii)
on request of the Agent at any time, a certificate signed by the Borrower's
chief financial officer setting out the aggregate market exposure of Eagle
Chartering.

 
 
(e)
Any Ship which is charter-free or subject to a time charter of less than one
year may be chartered or otherwise made available by the Guarantor who owns such
Ship to Eagle Chartering for operation in a commercial pool established under
Clause 22.23(a).

 
 
(f)
No Obligor shall make any loan or advance to, make any investment in, or enter
into any working capital maintenance or similar agreement with respect to Eagle
Chartering, whether by acquisition of stock or indebtedness, by loan, guarantee
or otherwise (in this Clause 22.23(f), "financial assistance"), without the
prior written consent of the Majority Lenders;  provided, however, the Borrower
shall be permitted to acquire stock of Eagle Chartering, and to make
contributions of capital and/or loans to Eagle Chartering, so long as (i) any
such acquisition of stock, contributions or loans are made with cash in an
aggregate amount not in excess of $10,000,000, and (ii) the management of the
Borrower in good faith believe that, after giving effect to any such acquisition
of stock, contribution or loan,

 

 
 

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the Borrower shall be able to meet its payment obligations under this
Agreement.  The Agent shall use its best endeavors to procure a decision by
Majority Lenders within 48 hours of its receipt of any request for such consent.

 
 
(g)
The Borrower shall cause Eagle Chartering:

 
 
(i)
to have separate management distinct from the management of the Borrower or its
other Affiliates, and not to have as a director, officer or employee any person
who is a director, officer or employee of the Borrower or its other Affiliates
(except that, so long as Eagle Chartering has not less than three directors, one
of the directors of Eagle Chartering may be an officer and/or employee of Eagle
Shipping International (USA) LLC);

 
 
(ii)
to have paid up share capital in an amount not less than $500,000;

 
 
(iii)
to maintain all of its books, records, financial statements and bank accounts
separate from those of the Borrower and its other Affiliates;  provided,
however, that financial statements of Eagle Chartering may be included in
consolidated financial statements of the Borrower;

 
 
(iv)
to enter into contracts in its own name for its own account as principal and not
as agent for the Borrower or its other Affiliates;  provided, however, that any
contract entered between Eagle Chartering on the one hand and any of the
Borrower and its other Affiliates on the hand shall be on terms which are fair
and reasonable and substantially similar to those that would be available on an
arms-length basis between unrelated persons;

 
 
(v)
to maintain its principal executive office in Singapore, and to utilize separate
stationary, invoices and checks bearing its own name;

 
 
(vi)
to pay the salaries of its own employees from its own funds, and to maintain a
sufficient number of employees to conduct the business contemplated by this
Clause 22.23;

 
 
(vii)
to maintain insurance with responsible companies against such risks as is
customarily carried by persons engaged in businesses similar to the business
contemplated by this Clause 22.23;

 
 
(viii)
to discharge from its own funds and assets all obligations of any kind incurred
by it to the extent such funds and assets are available for such discharge;  and

 

 
 

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(ix)
to conduct in its own name the business contemplated by this Clause 22.23, and
to hold itself out to the public as a legal entity separate and distinct from
any other person (including the Borrower and any other Affiliate of the
Borrower).

 
3.05
Each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import, and each reference to the "Credit
Agreement" in any of the other Finance Documents, shall mean and refer to the
Credit Agreement as amended hereby.

 
4
COSTS AND EXPENSES

 
The Borrower agrees that the provisions of Clause 16 (Costs and Expenses) of the
Credit Agreement shall apply to this Fourth Amendatory Agreement.
 
5.
COUNTERPARTS

 
This Fourth Amendatory Agreement may be executed in any number of counterparts,
and this has the same effect as if the signatures on the counterparts were on a
single copy of this Fourth Amendatory Agreement.
 
6.           GOVERNING LAW
 
THIS FOURTH AMENDATORY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS APPLICABLE IN THE STATE OF NEW YORK (WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES).
 
7.           EFFECTIVENESS
 
This Fourth Amendatory Agreement shall become effective on the date when the
Borrower, the Guarantors and Lenders constituting the Majority Lenders shall
have signed a counterpart hereof (whether the same or different counterparts)
and shall have delivered (including by way of facsimile or other electronic
transmission) the same to Watson, Farley & Williams (New York) LLP, 1133 Avenue
of the Americas, New York, NY 10036; Attention:  C. Gregory Chase (facsimile
number: 212-922-1512 / email: cchase@wfw.com).
 

 

 
 

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This Fourth Amendatory Agreement has been entered into as of the date stated at
the beginning hereof.
 
SIGNATORIES
 

 
BORROWER:
 
EAGLE BULK SHIPPING INC.
 
 
 
By:    /s/ Alan Ginsberg                                                  
Alan Ginsberg
Chief Financial Officer

 
 

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GUARANTORS:
 
CARDINAL SHIPPING LLC
CONDOR SHIPPING LLC
CRESTED EAGLE SHIPPING LLC
CROWNED EAGLE SHIPPING LLC
FALCON SHIPPING LLC
GOLDEN EAGLE SHIPPING LLC
GRIFFON SHIPPING LLC
HARRIER SHIPPING LLC
HAWK SHIPPING LLC
HERON SHIPPING LLC
IMPERIAL EAGLE SHIPPING LLC
JAEGER SHIPPING LLC
KESTREL SHIPPING LLC
KITE SHIPPING LLC
KITTIWAKE SHIPPING LLC
MERLIN SHIPPING LLC
OSPREY SHIPPING LLC
PEREGRINE SHIPPING LLC
SHRIKE SHIPPING LLC
SKUA SHIPPING LLC
SPARROW SHIPPING LLC
STELLAR EAGLE SHIPPING LLC
TERN SHIPPING LLC
PETREL SHIPPING LLC
PUFFIN SHIPPING LLC
RAPTOR SHIPPING LLC
ROADRUNNER SHIPPING LLC
SAKER SHIPPING LLC
SANDPIPER SHIPPING LLC
SNIPE SHIPPING LLC
SWIFT SHIPPING LLC
GOLDENEYE SHIPPING LLC
GOSHAWK SHIPPING LLC
FULMAR SHIPPING LLC
WREN SHIPPING LLC
BESRA SHIPPING LLC
CERNICALO SHIPPING LLC
REDWING SHIPPING LLC
WOODSTAR SHIPPING LLC
By:  Eagle Bulk Shipping Inc.,
as sole member
 
 
 
By:     /s/ Alan Ginsberg                                                   
Alan Ginsberg
Chief Financial Officer
   

 
 
 
 
 

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GUARANTORS:
 
BITTERN SHIPPING LLC
CANARY SHIPPING LLC
CRANE SHIPPING LLC
EGRET SHIPPING LLC
THRASHER SHIPPING LLC
AVOCET SHIPPING LLC
GANNET SHIPPING LLC
GREBE SHIPPING LLC
IBIS SHIPPING LLC
JAY SHIPPING LLC
KINGFISHER SHIPPING LLC
By:  Eagle Bulk Shipping Inc.,
as sole member
 
 
 
By:     /s/ Alan Ginsberg                                                 
Alan Ginsberg
Chief Financial Officer

 
 

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GUARANTORS:
 
AGALI SHIPPING S.A.
AVLONA SHIPPING S.A.
DELFINI SHIPPING S.A.
DROSATO SHIPPING S.A.
FOUNTANA SHIPPING S.A.
KAMPIA SHIPPING S.A.
KOFINA SHIPPING S.A.
MARMARO SHIPPING S.A.
MESTA SHIPPING S.A.
MYLOS SHIPPING S.A.
NAGOS SHIPPING S.A.
NENITA SHIPPING S.A.
OLYMPI SHIPPING S.A.
PELINEO SHIPPING S.A.
PYRGI SHIPPING S.A.
RAHI SHIPPING S.A.
SIRIKARI SHIPPING S.A.
SPILIA SHIPPING S.A.
 
 
 
By:     /s/ Alan Ginsberg                                                 
Alan Ginsberg
Chief Financial Officer
 

 
 

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LENDERS:

THE ROYAL BANK OF SCOTLAND PLC

By: /s/ Colin Manchester                                                        
Name:  Colin Manchester
Title:    Head of Shipping Coverage, Americas

 

 
 

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WESTLB AG, LONDON BRANCH

By:  /s/ C Street    /s/ T.
Kaiser                                                        
Name:   C Street     T. Kaiser
Title:     Director         MD

 
 
 

 
 

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BANK OF CHINA LIMITED, LONDON BRANCH

By:                                                         
Name:
Title:

 

 
 

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LLOYDS TSB BANK PLC

By:                                                         
Name:
Title:

 
 

 
 

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ALLIANCE & LEICESTER COMMERCIAL FINANCE PLC

By: /s/ Mark M. Corith                                                        
Name:  Mark M. Corith
Title:    Head of Shipping

 

 
 

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SUMITOMO MITSUI BANKING CORPORATION

By: /s/ Konstantinos
Karabalis                                                        
Name:  Konstantinos Karabalis
Title:    Deputy General Manager

 
 

 

 
 

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CRÉDIT INDUSTRIEL ET COMMERCIAL

By:  /s/ Andrew McKoin                                                        
Name:  Andrew McKoin
Title:    Vice President

CRÉDIT INDUSTRIEL ET COMMERCIAL

By:  /s/ Adrienne Molloy                                                       
Name:  Adrienne Molloy
Title:    Vice President

 
 

 

 
 

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ARRANGER, BOOKRUNNER AND SWAP BANK:

THE ROYAL BANK OF SCOTLAND PLC

By:  /s/ Colin
Manchester                                                        
Name:  Colin Manchester
Title     Head of Shipping Coverage, Americas

 
 

 
 

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AGENT AND SECURITY TRUSTEE

THE ROYAL BANK OF SCOTLAND PLC

By:  /s/ Alexis Porter                                                     
Name:  Alexis Porter
Title     Manager