Ex-10.12

 

To :

(1)

TBS International plc

 

 

 

 

Arthur Cox Building

 

 

 

 

Earls Fort Terrace

 

 

 

 

Dublin 2

 

 

 

 

Ireland

 

 

 

 

 

 

 

 

(2)

Argyle Maritime Corp.

 

 

 

 

Caton Maritime Corp.

 

 

 

 

Dorchester Maritime Corp.

 

 

 

 

Longwoods Maritime Corp.

 

 

 

 

McHenry Maritime Corp.

 

 

 

 

Sunswyck Maritime Corp.

 

 

 

 

c/o Suite 306

 

 

 

 

Commerce Building

 

 

 

 

1 Chancery Lane

 

 

 

 

Hamilton HM12

 

 

 

 

Bermuda

 

 

 

 

 

 

 

 

(3)

TBS International Limited

 

 

 

 

Suite 306,

 

 

 

 

Commerce Building

 

 

 

 

1 Chancery Lane

 

 

 

 

Hamilton HM12

 

 

 

 

Bermuda

 

30 September 2010

 

Dear Sirs

 

ISDA Master Agreement dated as of 29 March 2009 (together with the schedules
thereto and confirmations thereunder) as amended made between (i) Argyle
Maritime Corp., Caton Maritime Corp., Dorchester Maritime Corp., Longwoods
Maritime Corp., McHenry Maritime Corp. and Sunswyck Maritime Corp. acting
jointly and severally and (ii) The Royal Bank of Scotland plc (the “Master
Agreement”)

 

We refer to the Master Agreement.  Words and expressions defined therein shall
have the same meaning when used herein except as expressly provided in this
letter.

 

We refer to the letter of 24th of September 2010 of TBS International plc (the
“TBS Request Letter”) (i) notifying us that various companies within the TBS
Group will be suspending the payment of certain upcoming scheduled principal
instalments owing in respect of certain indebtedness of such companies as more
particularly described therein for a period of 45 days beginning on
30th September 2010 (the “Payment Suspension”) and (ii) requesting a waiver of
the Events of Default arising under the Master Agreement resulting from the
Payment Suspension.

 

We acknowledge that the payment described in the TBS Request Letter owed to
Commerzbank was due and payable as of September 2, 2010 and such payment was
made

 

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on September 30, 2010 (the “Commerzbank Payment”) and your request that we waive
the Events of Default arising from the failure to make the Commerzbank Payment
on its due date (the “Commerzbank Payment Default”).

 

(A)                              We hereby confirm as Party A under the Master
Agreement our agreement to waive the Events of Default arising from the Payment
Suspension and the Commerzbank Payment Default under clauses 5(a)(iii)(1) and
5(a)(vi) of the Master Agreement subject to the fulfilment of the following
conditions:-

 

1.                                       You provide satisfactory evidence that
(i) each of the lenders under the facilities (the “Schedule 1 Facilities”)
listed in schedule 1 to the TBS Request Letter (attached hereto as Appendix I)
have consented to the Payment Suspension and the Commerzbank Payment Default
(the “Schedule 1 Consents”), and (ii) (a) any other lenders to the New Corporate
Guarantor or subsidiaries of the New Corporate Guarantor not listed in schedule
1 to the TBS Request Letter and (b) any other swap providers under any of the
swap arrangements of the New Corporate Guarantor or subsidiaries, as necessary;
both (a) and (b) inclusive have consented to the Payment Suspension and the
Commerzbank Payment Default or waived cross default provisions as appropriate
(the “Other Lenders’ Consents”).

 

2.                                       We receive from you a copy of this
letter duly acknowledged by each of the Borrowers, the New Corporate Guarantor
and the Corporate Guarantor.

 

(B)                                In the event you are unable to obtain any of
the Schedule 1 Consents and/or the Other Lenders’ Consents (and therefore you
are unable to fulfil the condition in (A) 1. above) but you decide not to pay
the principal instalments falling due under the Schedule 1 Facilities during the
45 day period and you request the forbearance of your lenders and swap providers
to them exercising their rights under the respective facilities and swap
arrangements arising from the corresponding payment default under the Schedule 1
Facilities, we confirm as Party A under the Master Agreement our agreement to
waive the Events of Default arising from such payment default, the Commerzbank
Payment Default and the Payment Suspension under Clauses 5(a)(iii)(1) and
5(a)(vi) of the Master Agreement subject to the following conditions:

 

1.                                       You provide satisfactory evidence that
all lenders under bilateral facilities, all syndicates under syndicated
facilities and all swap providers under all other swap facilities to the New
Corporate Guarantor and/or its subsidiaries have confirmed their forbearance in
respect of the payment default and the Commerzbank Payment Default.

 

2.                                       The condition referred to in (A).2
above is fulfilled.

 

(C)                                By signing the acknowledgement to this
letter, each of the Corporate Guarantor and the New Corporate Guarantor hereby
agree to the perform the following covenants and acknowledge and agree that
failure to perform such covenants shall result in a termination of the waiver
set forth above and an Event of Default under the Master Agreement:-

 

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1.                                       The New Corporate Guarantor to provide
13 week cash flow statements showing in reasonable detail cash receipts and
disbursements to be updated and provided on a weekly basis;

 

2.                                       The New Corporate Guarantor to provide
within 35 days from the end of each calendar month monthly financials including
income statements, balance sheets, cash flows and key performance indicators for
the business.

 

3.                                       The New Corporate Guarantor to appoint
a financial advisor to assist it with the long term restructuring and
negotiations with its various lenders.  The financial advisor will be selected
from the list attached hereto as Appendix II.

 

In the event that any of the conditions referred to in (A) and (B) above are not
fulfilled, or if the covenants in (C) above are not fulfilled, the Events of
Default referred to in (A) and (B) shall not be waived and Party A shall remain
entitled to exercise its rights under the Master Agreement and Credit Support
Documents arising therefrom.  Furthermore Party A reserves all its rights and
remedies under the Master Agreement and Credit Support Documents in respect of
any other Events of Default which may arise or have arisen.

 

Other than as set out in this letter the provisions of the Master Agreement
shall remain unchanged and in full force and effect.

 

This letter shall constitute a Credit Support Document for the purposes of the
Master Agreement.

 

The provisions of clause 13 (Law and Jurisdiction) of the Master Agreement shall
apply to this letter as if set out in full but so that the references to “this
agreement” are amended to read “this letter”.

 

 

Yours faithfully

 

 

 

 

 

The Royal Bank of Scotland plc

 

 

/s/ Jon A. Charette

 

 

Jon A. Charette

 

 

Senior Vice President

 

 

 

 

 

 

 

Accepted and agreed

 

 

for and on behalf of

 

 

 

 

 

TBS International Limited

 

 

(as Corporate Guarantor)

 

 

/s/ Ferdinand V. Lepere

 

 

 

 

For and on behalf of

 

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Argyle Maritime Corp.

 

Caton Maritime Corp.

 

Dorchester Maritime Corp.

 

Longwoods Maritime Corp.

 

McHenry Maritime Corp.

 

Sunswyck Maritime Corp.

 

/s/ Ferdinand V. Lepere

 

 

 

 

 

For and on behalf of

 

 

 

TBS International plc

 

(as New Corporate Guarantor)

 

/s/ Ferdinand V. Lepere

 

 

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Appendix I

 

TBS Request Letter

 

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September 24, 2010

 

The Royal Bank of Scotland plc

Shipping Business Center

5-10 Great Tower Street

London EC3P 3HX

Fax: No:+44 207 085 7142

Attn: Transaction and Portfolio Management

 

RE; Request for waiver under the Loan Agreement (as defined below)

 

Reference is hereby made to the Amended and Restated Loan Agreement dated 6
May 2010 among (i) Argyle Maritime Corp., Caton Maritime Corp., Dorchester
Maritime Corp., Longwoods Maritime Corp- McHenry Maritime Corp. and Sunswyck
Maritime Corp. as joint and several Borrowers, (ii) the banks and financial
institutions listed therein as Lenders, (iii) the Royal Bank of Scotland plc as
Mandated Lead Arranger and (iv) the Royal Bank of Scotland plc as Bookrunner,
Agent, Security Trustee and Swap Bank relating to a term loan facility of
US$150,000,000 (as amended to date, the “Loan Agreement”). Capitalized terms
defined in the Loan Agreement and not otherwise defined herein arc used herein
as therein defined.

 

We hereby notify you that the Borrowers will be suspending the payment of
certain upcoming scheduled principal installments owing in respect of certain
Indebtedness of such persons, as more particularly described on Schedule 1
hereto, for a period of 45 days beginning on September 30, 2010 (the “Payment
Suspension”). The Payment Suspension will result in one or more Events of
Default occurring under the Loan Agreement, including under Section 19.1(f) of
the Loan Agreement (any such Event of Default resulting from the Payment
Suspension. the “Specified Events of Default”).

 

In order to allow time for the Borrowers and affiliates to work with their
various lenders, including the Agent and the Lenders, towards a mutually
agreeable solution on their outstanding indebtedness, we hereby request that the
Agent and the other Lenders under the Loan Agreement waive the Specified Events
of Default.

 

By counter-signing this letter, the Agent and the Lenders agrees to waive the
Specified Events of Default.

 

[Remainder of page intentionally left blank]

 

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Very truly yours,

 

 

 

 

 

 

 

 

TBS International plc

 

 

 

 

 

 

By:

/s/ Ferdinand V. Lepere

 

 

 

 

 

 

Name:

Ferdinand V. Lepere

 

 

  Title:

Senior Executive Vice President Chief Financial Officer

 

 

 

 

 

 

 

 

Acknowledged and Agreed.

 

 

 

 

 

 

 

 

 

 

 

The Royal Bank of Scotland plc,

 

 

 

as Agent and Lender

 

 

 

 

 

 

 

 

 

 

 

By:

Name:

 

 

 

 

Title:

 

 

 

 

 

 

, as Lender

 

 

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

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Schedule 1

 

Facility

 

Principal Amount

 

Date

 

 

 

 

 

 

 

 

Bank of America Facility, as amended and restated on March 26, 2008

 

$

9,500,000

 

September 30, 2010

 

 

 

 

 

 

 

AIG Facility dated as of December 7, 2007

 

$

1,800,000

 

October 1, 2010

 

 

 

 

 

 

 

Commerzbank AG Facility dated as of May 28, 2008

 

$

1,000,000

 

October 1, 2010

 

 

 

 

 

 

 

DVB Facility dated as of January 16, 2008

 

$

2,600,000

 

October 23, 2010

 

 

 

 

 

 

 

Credit Suisse dated as of December 7, 2007

 

$

400,000

 

November 12, 2010

 

 

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Appendix II

 

Financial Advisor

 

1.              J. Alix Partners

 

2.              Blackstone

 

3.              FTI Consulting

 

4.              Zolfo Cooper

 

5.              Alvarez & Marsal

 

6.              Miller Buckfire

 

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