EX-10.4

 

FOURTH AMENDMENT TO LOAN AGREEMENT

 

by and among

 

AMOROS MARITIME CORP.,

LANCASTER MARITIME CORP.

AND

CHATHAM MARITIME CORP.,

 

as Borrowers,

 

 

SHERWOOD SHIPPING CORP.

TBS INTERNATIONAL LIMITED

AND

TBS HOLDINGS LIMITED

 

as Guarantors,

 

TBS INTERNATIONAL PUBLIC LIMITED COMPANY

as Parent Guarantor

 

and

 

 AIG COMMERCIAL EQUIPMENT FINANCE, INC.,

 

as Lender

 

 

January 27, 2011

 

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FOURTH AMENDMENT TO LOAN AGREEMENT

 

THIS FOURTH AMENDMENT TO LOAN AGREEMENT (this “Fourth Amendment”) is made and
entered into this 27th day of January, 2011, by and among Amoros Maritime Corp.,
Lancaster Maritime Corp. and Chatham Maritime Corp., each a Marshall Islands
corporation having a mailing address of P.O. Box HM 2522, Hamilton HMGX, Bermuda
and a registered address of Trust Company Complex, Ajeltake Road, Ajeltake
Island, Majuro, Marshall Islands MH96960 (the “Borrowers”; each, a “Borrower”),
TBS International Limited, a Bermuda corporation whose tax domicile is in
Ireland (“TBSIL Guarantor”), Sherwood Shipping Corp. (“Sherwood”), TBS Holdings
Limited, a Bermuda company (“Bermuda Holdco”), TBS International public limited
Company, an Irish public limited company (“Parent Guarantor”) and AIG Commercial
Equipment Finance, Inc., a Delaware corporation (together with its successors
and assigns, “Lender”). Unless specifically defined in this Fourth Amendment,
capitalized terms not used in this Fourth Amendment shall have the meanings
assigned in the Original Loan Agreement, as amended.

 

WHEREAS, Borrowers, TBSIL Guarantor and Lender are parties to that certain Loan
Agreement dated February 29, 2008 (the “Original Loan Agreement,” as amended by
the First Amendment, the Second Amendment, the Third Amendment, this Fourth
Amendment and any future amendments, the “Loan Agreement”); and

 

WHEREAS, Borrowers delivered the Notes to evidence the Loan under the Loan
Agreement, including that certain US$13,000,000 Promissory Note by Lancaster
Maritime Corp., that certain US$9,000,000 Promissory Note by Amoros Maritime
Corp., and that certain US$13,000,000.00 Promissory Note by Chatham Maritime
Crop., each payable to the order of Lender and dated February 29, 2008 (the
“Original Notes”); and

 

WHEREAS, the Original Loan Agreement was amended by that certain First Amendment
to Loan Agreement dated as of March 27, 2009 (the “First Amendment”).  In
connection with the First Amendment, each of the Original Notes was amended by
an Addendum dated as of March 27, 2009 (collectively, the “Addenda”); and

 

WHEREAS, the Original Loan Agreement was further amended by that certain Second
Amendment to Loan Agreement dated as of December 30, 2009 (the “Second
Amendment”).  In connection with the Second Amendment, each of the Original
Notes, as amended by the Addenda, was further amended by a Second Addendum dated
as of December 30, 2009 (collectively, the “Second Addenda”); and

 

WHEREAS, the Original Loan Agreement was further amended by that certain Third
Amendment to Loan Agreement dated as of April 22, 2010 (the “Third Amendment,”
together with the First Amendment and the Second Amendment, the “Prior
Amendments”); and

 

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WHEREAS, the parties wish to further amend the Loan Agreement and Notes in
various respects, including (i) a modification of the Interest Rate to change to
a fixed rate of 10.00%, subject to increase following default, (ii) a change in
the payment terms and maturity date of the Notes, and the addition of
supplemental principal prepayments as herein provided, and (iii) a modification
of the financial covenants under Section 6.10 the Loan Agreement, to (a) delete
the minimum tangible net worth requirement and Fixed Charge Coverage Ratio,
(b) to revise the liquidity covenant, (c) to revise the Consolidated Leverage
Ratio, and (d) to revise the Consolidated Interest Coverage Ratio;  among other
matters more fully addressed below.

 

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

 

1.  The following definitions in the Original Loan Agreement, as previously
amended by one or more Prior Amendments, are amended and restated in their
entirety as follows, effective as of the date of this Fourth Amendment:

 

“BofA Credit Agreement” means the Second Amended and Restated Credit Agreement
by and among Parent Guarantor, various Subsidiaries and BofA as Administrative
Agent, as the same may be amended, refinanced and replaced from time to time.

 

“Interest Rate” means, for each Loan, a rate equal to ten percent (10.00%) per
annum.  The Interest Rate is subject to the default rate of interest now or
hereafter set forth in each Note, which default rate shall be equal to the
lesser of (i) the Interest Rate plus 2.0%, or (ii) the maximum rate of interest
permitted by Applicable Law. At no time will the Interest Rate ever be less than
ten percent (10.00%) per annum.

 

“Consolidated EBITDA” means, at any date of determination, an amount equal to
Consolidated Net Income of Parent Guarantor and its Subsidiaries on a
consolidated basis for the most recently completed Measurement Period, plus
(a) the following to the extent deducted in calculating such Consolidated Net
Income (and without duplication): (i) Consolidated Interest Charges, (ii) the
provision for Federal, state, local and foreign income taxes payable,
(iii) depreciation and amortization expense, (iv) net losses from the sales of
vessels as permitted under this Agreement, (v) any noncash impairment charges
incurred during any fiscal year of Parent Guarantor and its Subsidiaries in
respect of any of Parent Guarantor’s or its Subsidiaries’ goodwill and vessels
(in each case of or by Parent Guarantor and its Subsidiaries for such
Measurement Period), (vi) any noncash compensation in the form of Equity
Interests or other equity awards made to employees of Parent Guarantor and its
Subsidiaries in any fiscal year of Holdings (as defined in the Existing Version
of the BofA Credit Agreement) and its Subsidiaries in an aggregate amount not to
exceed $10,000,000 in each such fiscal year, and (vii) any losses attributable
to the GAT Joint Venture, the Jamaican

 

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Mine Joint Venture, the LOG.STAR Joint Venture, the Panamerican Joint Venture,
or the ST Logistics Joint Venture (as each such term is defined in the Existing
Version of the BofA Credit Agreement), and minus (b) the following to the extent
included in calculating such Consolidated Net Income: (i) all net gains from the
sales of vessels as permitted under this Agreement and (ii) any income or gains
attributable to the GAT Joint Venture, the Jamaican Mine Joint Venture, the
LOG.STAR Joint Venture, the Panamerican Joint Venture, or the ST Logistics Joint
Venture (in each case of or by Parent Guarantor and its Subsidiaries for such
Measurement Period); provided that, to the extent characterized as interest on
the income statements of Parent Guarantor and its Subsidiaries for such
Measurement Period pursuant to FASB Interpretation No. 133 - Accounting for
Derivative Instruments and Hedging Activities (June 1998), noncash adjustments
in connection with any interest rate Swap Contract (as defined in the Existing
Version of the BofA Credit Agreement) entered into by Parent Guarantor or any of
its Subsidiaries, shall be excluded.

 

“Consolidated Interest Charges” means, for any Measurement Period, the sum of
(a) all interest, premium payments, debt discount, fees, charges and related
expenses in connection with borrowed money (including capitalized interest but
excluding capitalized interest on (x) Permitted New Vessel Construction
Indebtedness and (y) PIK Interest (as defined in the Existing Version of the
BofA Credit Agreement)) or in connection with the deferred purchase price of
assets, in each case to the extent treated as interest in accordance with GAAP,
(b) all interest paid or payable with respect to discontinued operations and
(c) the portion of rent expense under Capitalized Leases that is treated as
interest in accordance with GAAP, in each case, of or by Parent Guarantor and
its Subsidiaries on a consolidated basis for the most recently completed
Measurement Period; provided that, to the extent characterized as interest on
the income statements of Parent Guarantor and its Subsidiaries for such
Measurement Period pursuant to FASB Interpretation No. 133 — Accounting for
Derivative Instruments and Hedging Activities (June 1998), noncash adjustments
in connection with any interest rate swap contract entered into by Parent
Guarantor or any of its Subsidiaries, shall be excluded; provided further that,
solely for purposes of calculating Consolidated Interest Charges pursuant to
part (b) of the definition of Consolidated Interest Coverage Ratio, non-cash
charges associated with the write-off of deferred financing charges and
expenses, incurred in connection with the transactions contemplated by the TBS
Shipping — Global Bank Restructuring Proposal referred to in Section 4.01
(a) (a) of the Existing Version of the BofA Credit Agreement, in an aggregate
amount not to exceed $6,500,000 shall be excluded from the calculation of
Consolidated Interest Charges.

 

The definition of “Qualified Cash” contained in the Original Loan Agreement is
hereby amended to exclude, as part of the Qualified Cash, any cash or cash
equivalent items also excluded from the definition of “Qualified Cash” contained
in the Existing Version of the BofA Credit Agreement, such as, without
limitation, cash in the Special

 

3

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Account, cash required to be held against equity commitments on the new vessel
construction program, and cash pledged to support letters of credit.

 

The following new definitions are added to the Loan Agreement:

 

“Excess Cash” means, at the applicable time of measurement, the aggregate amount
of cash and Cash Equivalents (as defined in the Existing Version of the BofA
Credit Agreement) of Holdings (as defined in the Existing Version of the BofA
Credit Agreement) and its Subsidiaries (other than (x) cash in the Special
Account, (y) any amounts reserved for equity portion of construction advances
under the RBS Credit Facility (as defined in the Existing Version of the BofA
Credit Agreement), and (z) any cash pledged to support letters of credit) at
such time minus the sum of (i) Permitted Rollover Capital Expenditures (as
defined in the Existing Version of the BofA Credit Agreement), (ii) insurance
proceeds held for vessel repairs, (iii) an amount equal to the funds transferred
from the Special Account in such period to effect a cure of minimum liquidity
pursuant to Section 6.10 (b), but only to the extent such amount, at the
applicable time of measurement, (A) is available to be re-deposited into the
Special Account pursuant to Section 2.16(b)(ii) of the Existing Version of the
BofA Credit Agreement and (B) has not been re-deposited to the Special Account,
(iv) Net Cash Proceeds (as defined in the Existing Version of the BofA Credit
Agreement) from any sale of encumbered assets outside of the ordinary course of
business to the extent used or anticipated to be used within 30 days of such
time of measurement to repay any Indebtedness (as defined in the Existing
Version of the BofA Credit Agreement) that is secured by such assets, and
(v) $30,000,000, plus (x) the amount of any increase in net working capital
since December 31, 2010 (in the case of the measurement at December 31, 2011) or
December 31, 2011 (in the case of each subsequent time of measurement) that
exceeds $4,000,000, and minus (y) the amount of any decrease in net working
capital since December 31, 2010 that exceeds $4,000,000.

 

“Existing Version of the BofA Credit Agreement” means the BofA Credit Agreement
in effect on the date of the Fourth Amendment to Loan Agreement dated as of
January           , 2011, without taking into account any subsequent amendments
thereto or any waivers thereof unless expressly approved by Lender in writing.

 

“Special Account” means each ‘Special Account’ established under the Existing
Version of the BofA Credit Agreement.

 

2.   Section 2.03 of the Original Loan Agreement, as previously amended by one
or more Prior Amendments, is amended and restated in its entirety to read as
follows:

 

“Section 2.03.  The Notes.  Each Loan and each Borrower’s obligation to repay
its Loan shall be evidenced by and repayable with interest in accordance with
the terms of such Borrower’s Note in the form attached to the Original Loan

 

4

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Agreement (as defined in the Fourth Amendment to Loan Agreement dated as of
January       , 2011) as Schedule 2.03, as amended by an addendum (the “First
Addendum”) in the form attached to the First Amendment to Loan Agreement dated
as of March 27, 2009, which Note and First Addendum have been further revised by
a Second Addendum (the “Second Addendum”) in the form attached to the Second
Amendment to Loan Agreement dated December 30, 2009 as Schedule 2.03A2, and
further amended by a Third Addendum, in the form attached to the Fourth
Amendment to Loan Agreement dated as of January      , 2011 as Schedule 2.03A3
(collectively, the “Third Addenda”).  Principal and interest payable under each
Note shall be repaid in accordance with the repayment terms set forth in the
Note, as amended by the applicable First Addendum and Second Addendum, as such
Note, First Addendum and Second Addendum are further amended by the applicable
Third Addendum.  Each Note provides for a default rate of interest.”

 

3.   A new section 2.08.1 is added to the Loan Agreement:

 

Section 2.08.1   Excess Cash Payments.    Beginning with the semi-annual period
ending December 31, 2011, the Borrowers shall repay the Loans in an amount equal
to 6.15% of Excess Cash, calculated semi-annually, (A) within 60 days after the
end of each calendar year and (B) within 45 days after the end of each other
semi-annual period (such payments, the “Excess Cash Payments”).  The Excess Cash
Payments will be applied to each Note on a pari passu basis, based on the
principal balance of each Note and the balance of all Notes on the date of the
receipt of such payments. Excess Cash Payments shall be applied to the remaining
principal installment payments of each Note in the inverse order of maturity.

 

4.     Section 5.01(e) is reassigned the new section number of 5.01(f), and the
following new Section 5.01(e) is added to the Loan Agreement:

 

(e) as soon as available, but in any event no later than Wednesday of each week,
(i) a rolling 13-week forecast of cash flows of Holdings (as defined in the
Existing Version of the BofA Credit Agreement) and its Subsidiaries on a
consolidated basis (the “Cash Flow Forecast”) which shall include (A) a rolling
comparative analysis of the actual cash flow for the prior week against the
forecast for such week, (B) an explanation for any significant variances between
such results and the forecast and (C) a calculation of Qualified Cash evidencing
compliance with the minimum cash liquidity covenant contained in
Section 6.10(b), and (ii) evidence of the current available balance of the
Special Account as of such date; in each case, which shall be in form and detail
satisfactory to the Lender.

 

5.   Section 6.10 of the Original Loan Agreement, as previously amended by the
Prior Amendments, is further amended and restated in its entirety to read as
follows:

 

5

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“Section 6.10   Financial Covenants.  Borrowers covenant and agree that for the
term of this Agreement that Parent Guarantor and its consolidated Affiliates and
Subsidiaries shall not violate, on a consolidated basis, the following financial
covenants. If the operating leases for the vessels “Laguna Belle” and “Seminole
Maiden” are converted to debt, such Indebtedness will be treated for all
purposes of calculation of the following ratios as if such Indebtedness remained
as an operating lease. Similarly, the same rule will apply in the event that
changes in GAAP require treatment of other operating leases as debt:

 

(a)          Reserved.

 

(b)         Minimum Cash Liquidity.  Permit the aggregate daily closing balance
of Qualified Cash of Holdings (as defined in the Existing Version of the BofA
Credit Agreement) and their Subsidiaries to be less than $15,000,000 on average
in any calendar week. Such balance shall be reported weekly in the Cash Flow
Forecast, of which a minimum average balance of $5,125,000 in any such week must
be deposited with Bank of America, N.A.  In the event Qualified Cash falls below
$15,000,000 on average in any week, Holdings and the Borrowers may cure the
resulting default by withdrawing an amount sufficient to eliminate such
deficiency from the Special Account no later than two Business Days after the
required delivery of the applicable Cash Flow Forecast; provided, however, that
the applicable cure period shall be extended by two Business Days if an
Additional Capital Infusion (as defined in the Existing Version of the BofA
Credit Agreement) is required and in process to cure such minimum liquidity
shortfall. From and after January 6, 2011, following the payment by Holdings (as
defined in the Existing Version of the BofA Credit Agreement) or any of its
Subsidiaries of any installment of closing, amendment or similar fees and
expenses, including, without limitation, financing fees, commitment fees and
professional and legal fees, to the Lenders (as defined in the Existing Version
of the BofA Credit Agreement) or the lenders under any other Indebtedness
permitted under the Existing Version of the BofA Credit Agreement in connection
with the restructuring pursuant to which the Fourth Amendment to Loan Agreement
dated as of January          , 2011 has been executed, the minimum amount of
Qualified Cash required to be maintained hereunder shall be reduced by the
amount of each such installment for the week in which such installment is paid
and the three weeks immediately following such payment. If, on any measurement
date after January 31, 2011, liquidity is $17,500,000 or less, Holdings (as
defined in the Existing Version of the BofA Credit Agreement) will promptly
conduct an update call to Lender to discuss liquidity issues.

 

(c)          Maximum Consolidated Leverage Ratio.  Permit the Consolidated
Leverage Ratio as of the end of any fiscal quarter set forth below for the four
consecutive fiscal quarter period then ending of Parent

 

6

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Guarantor and its Subsidiaries to be greater than the ratio set forth below
opposite such time period:

 

Four Consecutive Fiscal
Quarters Ending:

 

Maximum Consolidated
Leverage Ratio:

 

December 31, 2010 - December 31, 2011

 

4.00 to 1.00

 

March 31, 2012 – December 31, 2012

 

3.65 to 1.00

 

March 31, 2013 – June 30, 2013

 

3.20 to 1.00

 

September 30, 2013 - December 31, 2013

 

2.75 to 1.00

 

March 31, 2014 and thereafter

 

2.50 to 1.00

 

 

(d)         Reserved.

 

(e)          Minimum Consolidated Interest  Coverage Ratio.  Permit the
Consolidated Interest Coverage Ratio as of the end of any fiscal quarter set
forth below for the four consecutive fiscal quarter period then ending of Parent
Guarantor and its Subsidiaries to be less than the ratio set forth below
opposite such time period:

 

Four Consecutive Fiscal
Quarters Ending:

 

Minimum Consolidated Interest
Coverage Ratio:

 

December 31, 2010 - December 31, 2011

 

3.35 to 1.00

 

March 31, 2012 – December 31, 2012

 

3.70 to 1.00

 

March 31, 2013 – June 30, 2013

 

4.30 to 1.00

 

September 30, 2013 - December 31, 2013

 

4.75 to 1.00

 

March 31, 2014 and thereafter

 

5.20 to 1.00

 

 

6.             A new Section 5.13 is added to the Loan Agreement:

 

Section 5.13   Funding of Final Capital Infusion to Parent Guarantor. Borrowers
shall cause the Final Capital Infusion (as defined in the Existing Version of
the BofA Credit Agreement) to be funded to Parent Guarantor on or before the
Equity Outside Date (as defined in the Existing Version of the BofA Credit
Agreement).

 

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7.     A new Section 6.11 is added to the Loan Agreement:

 

Section 6.11         Capital Expenditures. Each of the Loan Parties and each of
the Borrowers (as defined in the Existing Version of the BofA Credit Agreement)
shall not, nor shall they permit any Subsidiary to, directly or indirectly make
or become legally obligated to make any Capital Expenditures (as defined in the
Existing Version of the BofA Credit Agreement), except Capital Expenditures for
completion of vessels constructed in connection with the RBS Credit Facility (as
defined in the Existing Version of the BofA Credit Agreement) and Capital
Expenditures in the ordinary course of business necessary to maintain the
vessels of such Loan Party, such Borrower (as defined in the Existing Version of
the BofA Credit Agreement) or such Subsidiary.  Nothing in this Section 6.11
shall impair in any way the provisions of Section 6.09 of this Agreement.

 

8.     The agreement of Lender to enter into this Fourth Amendment is subject to
the condition precedent that Lender shall have received all of the following, in
form and substance acceptable to Lender in its sole discretion:

 

(a)          executed Third Addenda to the Notes;

 

(b)         such amendments of the Ship Mortgages of the Vessels as may be
required by Panamanian counsel to fully secure the Notes, and to reflect the
modifications to the Notes and the Loan Agreement from the date of the original
recordation of such mortgages (the “Mortgage Amendment(s)”);

 

(c)          opinions of counsel of Borrowers and Guarantors with respect to
this Fourth Amendment, the Mortgage Amendment(s) and the Third Addenda to the
Notes;

 

(d)         opinions of counsel in Panama with respect to the continuing first
lien and priority of the Ship Mortgages on the Vessels;

 

(e)          signed copies of a certificate of an authorized officer of
Borrowers and each Guarantor which shall certify the names of the officers of
such entities authorized to execute and deliver this Fourth Amendment and the
other Loan Documents to which such entities are a party, and other documents or
certificates to be delivered pursuant to this Fourth Amendment or the related
Security Documents, together with the true signatures of such officers;

 

(f)            copies of the appropriate resolutions and consents of Borrowers
and each Guarantor approving this Fourth Amendment and related Loan Documents,
certified by the Secretary (or other appropriate official) of such party as
being a true and correct copy thereof;

 

8

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(g)         such other documents, certifications and acknowledgments respecting
the Loan Documents or the Security Documents as Lender shall reasonably request;

 

(h)         the continuing compliance by Borrowers and Guarantors of their
obligations under the Loan Agreement as modified by the Prior Amendments and
this Fourth Amendment;

 

(i)             evidence satisfactory to Lender that no Loan Party is in default
under the Loan or any other indenture or loan or credit agreement or any other
agreement, lease or instrument to which it is a party or by which it or its
properties may be bound or affected; or, if such default exists, that it has
been waived by the applicable creditor;

 

(j)             evidence satisfactory to Lender that all factual matters
included in the conditions precedent to the effectiveness of the BofA Credit
Agreement, including without limitation the capital infusions specified in
Section 4.01 of the BofA Credit Agreement, have been satisfied to Lender’s
reasonable satisfaction;

 

(k)          Lender’s receipt of all fees and costs of Lender in connection with
this Fourth Amendment and the transactions contemplated hereby.

 

Lender’s waiver of any condition with respect to this Fourth Amendment for a
particular Borrower shall not be deemed absent express written agreement to
constitute a waiver of such condition as it may apply to any other Borrower.

 

9.     Borrowers agree to pay all costs and expenses in connection with the
execution and recordation of this Fourth Amendment and all other Loan Documents
executed in connection herewith.  In addition, Borrowers shall reimburse Lender
for all costs incurred by Lender in connection with this Fourth Amendment and
the transactions contemplated hereby, including without limitation, the costs of
Lender’s counsel, and the costs of Panamanian and other foreign counsel. Nothing
herein shall be deemed to waive or limit Borrowers’ obligation to reimburse and
indemnify Lender as provided in Section 8.05 of the Original Loan Agreement.

 

10.   This Fourth Amendment may be executed separately by the Borrowers,
Guarantors and Lender in any number of counterparts, each of which, when so
executed and delivered, shall be deemed to be an original and all of which,
taken together, shall constitute but one and the same instrument.

 

11.   THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS FOURTH AMENDMENT AND
THE LOAN DOCUMENTS EXECUTED IN CONNECTION THEREWITH SHALL UNLESS OTHERWISE
PROVIDED THEREIN IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE

 

9

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WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAW PRINCIPLES THEREOF.

 

12.   Borrowers, TBSIL Guarantor, Parent Guarantor, Sherwood and Bermuda Holdco,
by executing this Fourth Amendment, to which they each consent, hereby confirm
and acknowledge that the amounts owed by them under the Loan Agreement are free
and clear of any deductions, offsets, counterclaims or other reductions. 
Borrowers, TBSIL Guarantor, Parent Guarantor Sherwood and Bermuda Holdco further
acknowledge that Lender has fully complied with all of its obligations under the
Loan Agreement and the Loan Documents, and hereby waive, release and discharge
Lender from and against any claim, right, demand or cause of action arising on
or before the date of this Fourth Amendment out of any act or failure to act by
Lender or any breach by Lender of any obligation under or in connection with the
Loan Agreement or the Loan Documents, whether arising under theories of
contract, tort, lender liability or otherwise.

 

10

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13.   Lender agrees, subject to and upon the terms and conditions of this Fourth
Amendment, to waive the Specified Events of Default (as defined in the
Forbearance Agreement) and all rights and remedies of the Lender arising
therefrom. For purposes of the preceding sentence “Forbearance Agreement” shall
mean that certain Letter Agreement dated as of September 30, 2010, as amended as
of November 12, 2010 and December 22, 2010 by and between Parent Guarantor and
Lender.

 

14.   The language added at the end of Section 2.07 of the Loan Agreement
pursuant to paragraph 5 of the Third Amendment is hereby deleted in its
entirety.

 

{signature page follows}

 

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BORROWERS:

 

 

 

 

 

AMOROS MARITIME CORP.

 

 

 

 

 

 

 

 

/s/ Christophil B. Costas

 

 

By:

Christophil B. Costas

 

 

Title:

Attorney in Fact

 

 

 

 

 

LANCASTER MARITIME CORP.

 

 

 

 

 

 

 

 

/s/ Christophil B. Costas

 

 

By:

Christophil B. Costas

 

 

Title:

Attorney in Fact

 

 

 

 

 

CHATHAM MARITIME CORP.

 

 

 

 

 

 

 

 

/s/ Christophil B. Costas

 

 

By:

Christophil B. Costas

 

 

Title:

Attorney in Fact

 

 

 

 

 

GUARANTORS:

 

 

 

 

 

TBSIL GUARANTOR:

 

 

TBS INTERNATIONAL LIMITED

 

 

 

 

 

 

 

 

/s/ Christophil B. Costas

 

 

By:

Christophil B. Costas

 

 

Title:

Attorney in Fact

 

 

 

 

[SIGNATURES CONTINUED ON NEXT PAGE]

 

12

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BERMUDA HOLDCO:

 

 

TBS HOLDINGS LIMITED, a Bermuda company

 

 

 

 

 

 

 

 

/s/ Christophil B. Costas

 

 

By:

Christophil B. Costas

 

 

Title:

Attorney in Fact

 

 

 

 

 

SHERWOOD:

 

 

SHERWOOD SHIPPING CORP.

 

 

 

 

 

 

 

 

/s/ Christophil B. Costas

 

 

By:

Christophil B. Costas

 

 

Title:

Attorney in Fact

 

 

 

 

 

PARENT GUARANTOR:

 

 

PRESENT WHEN THE COMMON SEAL OF

 

 

TBS INTERNATIONAL PUBLIC LIMITED COMPANY,

 

 

an Irish public limited company, was affixed hereto

 

 

 

 

 

 

 

 

/s/ Christophil B. Costas

 

 

By:

Christophil B. Costas

 

 

Title:

Attorney in Fact

 

 

 

 

 

 

 

 

LENDER:

 

 

AIG COMMERCIAL EQUIPMENT FINANCE, INC.

 

 

 

 

 

 

 

 

By:

/s/ Joe Gensor

 

 

Name:

Joe Gensor

 

 

Title:

Vice President

 

 

 

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SCHEDULE 2.03A3

 

Form of Third Addendum

THIRD ADDENDUM TO PROMISSORY NOTE

 

This Third Addendum to Promissory Note (this “Third Addendum”) is made as of
January    , 2011 with respect to the Promissory Note dated February 29, 2008 by
[] in the original stated principal amount of $[],000,000.00 (the “Original
Note”), as previously amended by an Allonge dated as of February 29, 2008 (the
“Allonge”), an Addendum to Promissory Note dated as of March 27, 2009 (the
“First Addendum”) and a Second Addendum to Promissory Note dated as of
December 30, 2009 (the “Second Addendum”) (the Original Note, as amended by the
Allonge, the First Addendum, the Second Addendum and this Third Addendum, the
“Note”) to the order of AIG COMMERCIAL EQUIPMENT FINANCE, INC.

 

The undersigned acknowledges that the principal balance of the Note, excluding
any fees, charges, interest, or expenses for which the undersigned may be
responsible in connection therewith, is $[].

 

The last two sentences of the first paragraph on Page 1 of the Note, as
previously amended in the First Addendum and Second Addendum, are further
amended and restated in their entirety to read as follows:

 

“From and after October 12, 2010 through and including January    , 2011,
interest accrued on this Note at the Default Rate, which was twelve percent
(12.00%) per annum. From and after January    , 2011, the Interest Rate on this
Note (the “Interest Rate”) shall be ten percent (10.00%) per annum.  Payee shall
have the right to prospectively increase the interest rate hereunder following
an Event of Default to the Default Rate, as provided below.”

 

The second paragraph of the first page of the Note is amended and restated in
its entirety to read as follows:

 

“The undersigned will make an interest only payment on April 1, 2011, in the
amount of all accrued but unpaid interest under this Note on that date.
Commencing on July 1, 2011, and on October 1, 2011 and January 1, 2012, the
undersigned will make quarterly principal payments of $[].00 each together with
accrued interest.  On April 1, 2012, July 1, 2012, October 1, 2012 and
January 1, 2013, the undersigned will make quarterly principal payments of
$[].00 each together with accrued interest.  On April 1, 2013, July 1, 2013,
October 1, 2013, January 1, 2014 and April 1, 2014, the undersigned will make
quarterly principal payments of $[].00 each together with accrued interest. A
final payment of all remaining principal, interest and other amounts due
hereunder and under the Loan Documents (as defined in the Loan Agreement) will
be payable on July 1, 2014, the Maturity Date. Interest hereunder shall accrue
on the unpaid balance of this Note from the date of this Note until paid in
full, at the Interest Rate (subject to Payee’s right to prospectively increase
the interest rate to the Default Rate following an Event of Default).  Interest
shall be payable in arrears on the dates provided above, and upon prepayment in
part of the unpaid principal balance of this Note (with respect to the amount so
prepaid) and upon

 

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payment (including prepayment) in full of the unpaid principal balance of this
Note.  All payments received by Payee shall be applied first to interest and
then to principal.  In addition to the foregoing payments, the undersigned will
also make all additional principal payments (the “Excess Cash Payments”)
required under the Fourth Amendment to Loan Agreement dated of even date
herewith, by and among the undersigned, its co-borrowers and guarantors and
Payee.”

 

The third paragraph of the first page of the Note is amended and restated in its
entirety to read as follows:

 

“All payments hereunder shall be made in lawful money of the United States and
in immediately available funds.  If any installment of this Note is not paid
within ten (10) days after its due date, the undersigned agrees to pay on
demand, in addition to the amount of such installment, an amount equal to the
lesser of (i) five percent (5%) of such installment or (ii) the maximum late
charge permitted by Applicable Law.  In addition, following an Event of Default,
Payee shall be entitled to increase the interest rate hereunder to the lesser of
(a) the Interest Rate plus 2.0%, or (b) the maximum rate of interest permitted
by Applicable Law (the “Default Rate”).”

 

The final paragraph of the first page of the Note, which is continued and
completed on the second page of the Note, as previously amended, is further
amended and restated in its entirety to read as follows:

 

“In addition to the required payments set forth above, the undersigned shall
have the right to prepay this Note, in whole or in part, at any time following
the first anniversary date of this Note on fifteen (15) days prior written
notice to the Payee, provided, that the amount of the prepayment is at least
$500,000.00 and the prepayment is made in multiples of $500,000.00, and further
provided that on the date of such prepayment, the undersigned shall pay the
principal amount of this Note being so prepaid (the “Prepayment Amount”),
together with all interest, fees and other amounts payable on the amount so
prepaid or in connection therewith to the date of such prepayment and, the
Prepayment Fee set forth below. If the undersigned prepays this Note in full or
in part, the undersigned shall pay, on the date of such prepayment, a fee (the
“Prepayment Fee”) to the Payee in an amount equal to (a) 2% of the amount of the
principal prepayment, if prepayment is made before May 15, 2011, or (b) 1% of
the amount of the principal prepayment, if prepayment is made on or after
May 15, 2011, provided that the Prepayment Fee shall be charged and paid only to
the extent permitted by Applicable Law.  Any prepayment pursuant to this
paragraph shall be applied to the installments hereof in the inverse order of
maturity. In addition, at the time of any prepayment, the undersigned shall pay
to Payee such amount as will compensate Payee for any loss, cost, expense,
penalty, claim or liability incurred by Payee as a result of such prepayment
which requires the Payee to prematurely break any related swap, interest rate
hedge or other derivative arrangement. The Payee shall have no obligation to
purchase or enter into any swap or other derivative arrangement in connection
with funding or maintaining the loan evidenced by this Note. The limitations on
the amount of prepayment, and the assessment of a Prepayment Fee, shall not
apply to Excess Cash Payments due under the Loan Agreement.”

 

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The sixth paragraph of the Note, as previously amended, is further amended and
restated in its entirety to read as follows:

 

“Upon the maturity of this Note or the acceleration of the maturity of this Note
in accordance with the terms of the Agreement, the entire unpaid principal
amount on this Note, together with all interest, fees and other amounts payable
hereon or in connection herewith, shall be immediately due and payable without
further notice or demand, with interest on all such amounts at the Default Rate,
from the date of such maturity or acceleration, as the case may be, until all
such amounts have been paid in full.”

 

 

 

[ ]

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

Attorney in Fact

ACCEPTED BY LENDER:

 

 

 

AIG COMMERCIAL EQUIPMENT FINANCE, INC.

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

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