AMENDATORYAGREEMENT

(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 party hereto as Lenders (the “Lenders”);  and

(4)  

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

(A)

The Borrower, the Guarantors, the Lenders 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 (the “Credit Agreement”) providing for a secured reducing revolving credit facility in the original principal amount of $1,600,000,000 for the purposes described therein.

(B)

The Parties have agreed to amend certain provisions of the Credit Agreement, in each case as herein provided.

(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 Amendatory Agreement are, and, upon execution and delivery of this 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 Amendatory Agreement and the transactions contemplated by this Amendatory Agreement.

The definition of “Commitment” in Clause 1.1 of the Credit Agreement is amended to read in its entirety as follows:

 

“Commitment” means:

in relation to the Original Lender, $1,600,000,000; and

in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement,

The definition of “Margin” in Clause 1.1 of the Credit Agreement is amended to read in its entirety as follows:

 

“Margin”  means in relation to each Accounting Period (or relevant portion thereof):

 

(a)

For the period commencing on the Amendment Effective Date until the second anniversary of the Amendment Effective Date, ninety-five hundredths of one percent (0.95%) per annum;  and

 

(b)

After the second anniversary of the Amendment Effective Date:

 

(i)

if the Advance Ratio for such Accounting Period is less than thirty-five percent (35%), eighty hundredths of one percent (0.80%) per annum;

 

(ii)

if the Advance Ratio for such Accounting Period is equal to or greater than thirty-five percent (35%) but less than sixty percent (60%), ninety-five hundredths of one percent (0.95%) per annum; and

 

(iii)

if the Advance Ratio for such Accounting Period is equal to or greater than sixty percent (60%), one and five hundredths of one percent (1.05%) per annum.

The definition of “Memorandum of Agreement” in Clause 1.1 of the Credit Agreement is amended to read in its entirety as follows:

Clause 1.1 of the Credit Agreement is amended by inserting in the appropriate alphabetical order the following new definitions:

Section 2 of the Credit Agreement is amended by inserting the following new Clause 2.3:

 

 

(a)

So long as the Incremental Commitment Request Requirements are satisfied at the time of the delivery of the request, the Borrower may, with the consent of, and in coordination with, the Agent, request at any time and from time to time after the Amendment Effective Date and prior to the date the Total Commitments have been terminated, that the Lenders provide Incremental Commitments and, subject to the applicable terms and conditions contained in this Agreement, make Loans pursuant thereto; it being understood and agreed, however, that:

 

(i)

no Lender shall be obligated to provide an Incremental Commitment as a result of any such request by the Borrower, and until such time, if any, as such Lender has agreed in its sole discretion (such discretion to be exercised reasonably) to provide an Incremental Commitment and executed and delivered to the Agent an Incremental Commitment Agreement in respect thereof as provided in Clause 2.3(b), such Lender shall not be obligated to fund its participation in any Loan in excess of its Commitment as in effect prior to giving effect to such Incremental Commitment provided pursuant to Clause 2.3(b) below;

 

(ii)

no Lender may provide an Incremental Commitment without the consent of all other Lenders;

 

(iii)

each provision of an Incremental Commitment on a given date pursuant to Clause 2.3(b) below shall be in a minimum aggregate amount (for all Lenders) of at least $25,000,000 and in integral multiples of $25,000,000 in excess thereof;

 

(iv)

the aggregate amount of all Incremental Commitments provided pursuant to Clause 2.3(b) below, shall not exceed $200,000,000;  and

 

(v)

all Loans made pursuant to Incremental Commitments (and all interest, fees and other amounts payable thereon) shall be obligations under this Agreement and the other applicable Finance Documents.

 

(b)

At the time of the provision of an Incremental Commitment pursuant to this Clause 2.3, the Borrower, the Guarantors, the Lenders and the Agent shall execute and deliver to the Agent an Incremental Commitment Agreement, with the effectiveness of such Incremental Commitment to occur on the date (the “Incremental Commitment Date”) set forth in such Incremental Commitment Agreement, which date in any event shall be no earlier than the date on which (w) all fees required to be paid in connection therewith at the time of such effectiveness shall have been paid (including, without limitation, any agreed upon up-front or arrangement fees owing to the Agent or any Affiliate thereof), (x) all Incremental Commitment Requirements are satisfied, (y) all other conditions set forth in this Clause 2.3(b) shall have been satisfied, and (z) all other conditions precedent that may be set forth in such Incremental Commitment Agreement shall have been satisfied.  The Agent shall promptly notify each Lender as to the effectiveness of each Incremental Commitment Agreement, and at such time, (i) the Commitments under, and for all purposes of, this Agreement shall be increased by the aggregate amount of such Incremental Commitments, and (ii) to the extent requested by any Lender, Notes will be issued, at the Borrower’s expense, to such Lender.

Clause 3.2(a) of the Credit Agreement is amended to read in its entirety as follows:

 

(a)

Where the Borrower wishes to borrow a Loan to finance the purchase price of a ship by a Guarantor, the Borrower shall notify the Agent (i) the name of such ship, (ii) the general description and deadweight tonnage (which shall be not less than 25,000 deadweight tons unless such ship is to be purchased en bloc with another ship of 25,000 deadweight tons or more acceptable to the Majority Lenders), (iii) the age of such ship (which shall not be greater than twenty years at the time of delivery to such Guarantor;  provided that at the time such ship is accepted by the Majority Lenders under this Clause 3.2, no more than ten percent of the Security Value of all Ships including such ship shall be attributable to Ships in excess of ten years of age), (iv) the identity of the current owner, (v) the identity of the Guarantor, (vi) the purchase price of such ship paid or to be paid by such Guarantor, and (vii) such further information as the Agent may require.

 

(b)

Each Note shall (i) be executed by the Borrower, (ii) be payable to the order of such Lender and be dated the Effective Date (or, in the case of Notes issued after the Effective Date, be dated the date of issuance thereof), (iii) be in a stated principal amount (together with the principal amount of any other

 

(a)

The Borrower shall pay to the Agent (for the account of each Lender) a fee computed at the rate of three tenths of one percent (0.30%) per annum on that Lender’s Available Commitment for the Availability Period.

Clause 5(e)(i) of Part II of Schedule 2 of the Credit Agreement is amended to read in its entirety as follows:

 

(ii)

has been unconditionally delivered by the relevant seller or shipyard to the Additional Guarantor (or if the relevant Memorandum of Agreement provides for the acquisition of beneficial ownership of such Additional Ship, such beneficial ownership has been conveyed to the Borrower or a Subsidiary of the Borrower) in accordance with all the terms of the relevant Memorandum of Agreement or Shipbuilding Contract, as the case may be, warranted free and clear of all liens, and the relevant seller or shipyard has been paid in full under the terms of the relevant Memorandum of Agreement or Shipbuilding Contract, as the case may be;

Exhibit H (Form of Mortgage) to the Credit Agreement is hereby replaced by the form of Exhibit H attached hereto.

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.

(a)

A copy of a resolution of the board of directors or sole member, as appropriate, of each Obligor:

 

(i)

approving the terms of, and the transactions contemplated by, this Amendatory Agreement and resolving that it execute this Amendatory Agreement and any other documents contemplated hereby to which it is or is to be a party;  and

 

(ii)

authorizing a specified person or persons to execute this Amendatory Agreement and any other documents contemplated hereby to which it is or is to be a party; and

(b)

A certificate of an officer of the Borrower, dated as of a current date (the statements made in such certificate shall be true on and as of such date), certifying as to (i) the absence of any amendments to the articles of incorporation and by-laws, or certificate of formation and limited liability company agreement of each Obligor previously certified to the Agent pursuant to Clauses 4.1 or 4.2(a) of the Credit Agreement, (ii) the due incorporation or formation, as the case may be, and good standing of each Obligor, as a corporation or limited liability company formed under the laws of the Republic of The Marshall Islands and the absence of any proceeding for the dissolution or liquidation of such Obligor, (iii) that the representations and warranties of each Obligor contained in this Amendatory Agreement are true and correct, and (iv) the absence of any Default.

(c)

an amendment to the Mortgage relating to each Ship subject to a Mortgage as of the date of this Amendatory Agreement, duly executed by the relevant Guarantor to secure the Incremental Commitments contemplated hereby;

(d)

a Certificate of Ownership and Encumbrance issued by the Maritime Administrator for the Marshall Islands (or other relevant authority) stating that each of the Ships referred to in the preceding subclause (c) is owned by the relevant Guarantor and that there is on record no Security (as such term is defined in the Credit Agreement) on such Ship except the relevant Mortgage as amended in accordance herewith;

(e)

a favorable opinion of Messrs. Seward & Kissel LLP, counsel for the Obligors, in respect of this Amendatory Agreement, the Mortgage amendments referred to in the preceding subclause (c), and as to such other matters as the Agent may reasonably require;  and

(f)

payment to the Agent (for the account of the Lenders) of an amendment fee of $1,600,000 (being one tenth of one percent (0.10%) of the Total Commitments as of the date hereof).