Exhibit 10.1

 

AMENDMENT NO. 1

TO

INVESTMENT AGREEMENT

 

Amendment No. 1 to Investment Agreement (this “Amendment”), dated as of May 9,
2011, by and among:

 

(1)           Joseph E. Royce, Gregg L. McNelis and Lawrence A. Blatte (the
“Investors”); and

 

(2)           TBS International plc, a public company limited by shares
incorporated under the laws of Ireland under registered number 476578 (including
its successors, the “Company”).

 

RECITALS

 

(A)          The parties hereto are parties to the Investment Agreement, dated
as of January 25, 2011 (the “Investment Agreement”) by and among the Investors
and the Company.

 

(B)           The parties hereto desire to amend the Investment Agreement as set
forth in greater detail below and to provide for the issuance by the Company,
and the purchase by the Investors, of Series A Preference Shares as well as
Series B Preference Shares, with terms substantially as provided in the
Certificate of Designation.

 

(C)           Section 10.3 of the Investment Agreement provides that the
Investment Agreement may be amended or modified by a writing duly executed by
the Investors and the Company.

 

Now, therefore, in consideration of the mutual promises and covenants set forth
below and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, and intending to be legally bound, the parties
hereto agree as follows:

 

Section 1               Amendment of Certain Definitions

 

(a)           The definition of “Certificate of Designation” is hereby amended
and restated as follow:

 

“Certificate of Designation” means the Amended and Restated Statement with
Respect to the Powers, Preferences and Relative, Optional and Other Special
Rights of Series A Preference Shares and Series B Preference Shares of TBS
International plc, as amended as of the date hereof and in the form attached
hereto as Exhibit A.

 

(b)           The definition of “Final Purchase” in the Investment Agreement is
hereby amended and restated as follows:

 

“Final Purchase” means the purchase pursuant to Section 2.4 of Series A
Preference Shares having an aggregate Liquidation Preference equal to the Final
Purchase Amount.

 

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(c)           The definition of “Final Purchase Amount” is hereby amended and
restated as follow:

 

“Final Purchase Amount” means the lesser of:  (i) (A) $7,000,000 less (B) the
aggregate of all Liquidity Disbursement Amounts and (ii) the aggregate
Liquidation Preference of all Rights Offer Shares not purchased at the Rights
Offering Closing.

 

(d)           The definition of “Interim Purchases” in the Investment Agreement
is hereby amended and restated as follows:

 

“Interim Purchases” means the purchase pursuant to Section 2.3 of Series A
Preference Shares or Series B Preference Shares having an aggregate Liquidation
Preference not to exceed $7,000,000.

 

(e)           The definition of “Liquidation Preference” in the Investment
Agreement is hereby amended and restated as follows:

 

“Liquidation Preference” means, as to any Series A Preference Share or Series B
Preference Share, as the case may be, the Liquidation Preference applicable
under the Certificate of Designation.

 

(f)            Capitalized terms used herein, defined in the Investment
Agreement and not otherwise defined herein shall have the meanings specified
therefor in the Investment Agreement when used herein.

 

Section 2               Amendment of Investment Agreement

 

(a)           The first two sentences of Section 2.1 of the Investment Agreement
are hereby amended and restated in their entirety as follows:

 

“The Investors hereby agree, severally and not jointly, to purchase from the
Company their Pro Rata Share of an aggregate of $3,000,000 in Liquidation
Preference of the Series B Preference Shares and up to an aggregate of
$7,000,000 in Liquidation Preference of either the Series A Preference Shares or
the Series B Preference Shares, and the Company hereby agrees to issue such
Series A Preference Shares and Series B Preference Shares to the Investors, in
each case at the times and subject only to the conditions set forth in this
Agreement.  The purchase price of each Series A Preference Share and Series B
Preference Share will equal its Liquidation Preference.”

 

(b)           Section 2.3(b) of the Investment Agreement is hereby amended and
restated in its entirety as follows:

 

“(b)         On each Interim Closing Date from the date hereof through the end
of the Rights Offering Period, each Investor, severally and not jointly, will
subscribe for his Pro Rata Share of each Liquidity Disbursement Amount in
Liquidation Preference of the Series A Preference Shares or the Series B
Preference Shares, and the Company will issue such Series A

 

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Preference Shares or Series B Preference Shares to the Investors, in each case
at the times and subject only to the conditions set forth in this Agreement. 
The closing for each Interim Purchase (each, an “Interim Closing”) shall take
place at the offices of Gibson, Dunn & Crutcher LLP, 200 Park Avenue, New York,
New York.  The Company will determine whether to issue Series A Preference
Shares or Series B Preference Shares at each Interim Closing in a manner that
ensures compliance with the requirements for the continued listing of the
Company’s Class A ordinary shares on the Nasdaq National Market.  At each
Interim Closing, the Company will deliver certificates for the Series A
Preference Shares or the Series B Preference Shares, as appropriate, to the
Investors upon receipt of an amount equal to such Investor’s Pro Rata Share of
the Liquidity Disbursement Amount, payable from the Escrow Account pursuant to
the terms of the Escrow Agreement (or from another account specified by such
Investor).”

 

(c)           Section 2.4 of the Investment Agreement is hereby amended and
restated in its entirety as follows:

 

“Section 2.4          Standby Purchase Commitment

 

On the Final Closing Date, each Investor will subscribe for his Pro Rata Share
of the Final Purchase Amount in Liquidation Preference of the Series A
Preference Shares, and the Company will issue such Series A Preference Shares to
the Investors, in each case at the times and subject only to the conditions set
forth in this Agreement.  The closing of the Final Purchase (the “Final
Closing”) shall take place at the offices of Gibson, Dunn & Crutcher LLP, 200
Park Avenue, New York, New York.  At the Final Closing, the Company will deliver
Series A Preference Shares to the Investors in exchange for an amount equal to
such Investor’s Pro Rata Share of the Final Purchase Amount, payable from the
Escrow Account pursuant to the terms of the Escrow Agreement (or from another
account specified by such Investor).”

 

(d)           Section 2.5(c) of the Investment Agreement is hereby amended and
restated in its entirety as follows:

 

“(c)         the Series A Preference Shares and Series B Preference Shares
required to be issued and delivered pursuant to Section 2.2, Section 2.3 or
Section 2.4, as applicable, free and clear of any Liens.”

 

(e)           Section 3.3 of the Investment Agreement is hereby amended and
restated in its entirety as follows:

 

“Section 3.3          Designation of Series A and Series B Preference Shares

 

The Board of Directors has established Series A Preference Shares and Series B
Preference Shares with terms substantially in the form of those set forth in the
Certificate of Designation.”

 

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(f)            Section 3.5 of the Investment Agreement is hereby amended and
restated in its entirety as follows:

 

“Section 3.5          Consents

 

No Consent of any Governmental Authority is required by or with respect to the
Company or any of its Subsidiaries in connection with the execution and delivery
of this Agreement by the Company or the issuance by the Company of Series A
Preference Shares or Series B Preference Shares to the Investors.”

 

(g)           Section 4.2 of the Investment Agreement is hereby amended and
restated in its entirety as follows:

 

“Section 4.2          Purchase for Investment

 

The Investor is acquiring Series A Preference Shares or Series B Preference
Shares, as applicable, for investment and not with a view toward any resale or
distribution thereof except in compliance with the Securities Act.  The Investor
is an “accredited investor” as defined in Rule 501 under the Securities Act and
has such knowledge and experience in financial and business matters and in
investments of the type contemplated by this Agreement that he is capable of
evaluating the merits and risks of its investment in the Series A Preference
Shares and Series B Preference Shares, as applicable, and of making an informed
investment decision with respect thereto.  The Investor acknowledges that
neither the Series A Preference Shares nor the Series B Preference Shares have
been registered pursuant to the Securities Act and that none of such shares may
be transferred in the absence of such registration or an exemption therefrom
under the Securities Act.  The Investor also acknowledges that he has received
sufficient information regarding the Company to evaluate fully the merits of the
transactions contemplated hereby.”

 

(h)           Section 5.2 of the Investment Agreement is hereby amended and
restated by adding the following sentence as a new second sentence:

 

“Each Investor will purchase his Pro Rata Share of the Final Purchase Amount, in
satisfaction of his obligations set forth in Section 2.4, in the manner and at
the times described in the Rights Offering Documents.”

 

(i)            Section 10.9 of the Investment Agreement is hereby amended and
restated in its entirety as follows:

 

“Section 10.9       Interpretation of the Term “Purchase”

 

For the avoidance of doubt, any reference in this Agreement to a “purchase” in
respect of the Series A Preference Shares or Series B Preference Shares or
payments made in respect of the Series A Preference Shares or Series B
Preference Shares is to be interpreted as meaning a subscription for Series A

 

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Preference Shares or Series B Preference Shares, as applicable, or payment of
the subscription price in respect thereof, respectively.”

 

Section 3               Effectiveness

 

This Amendment shall become effective as of the date first above written (such
date, the “Amendment Effective Date”).

 

Section 4               Reference to and Effect on the Investment Agreement

 

(a) On and after the Amendment Effective Date, each reference in the Investment
Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import
referring to the Investment Agreement shall mean and be a reference to the
Investment Agreement, as amended by this Amendment.

 

(b) Except to the extent certain provisions of the Investment Agreement are
amended as specified herein, the Investment Agreement is and shall continue to
be in full force and effect and is hereby in all respects ratified and
confirmed.

 

Section 5               Counterparts

 

This Amendment may be executed in several counterparts, each of which shall be
deemed an original and all of which shall together constitute one and the same
instrument.

 

Section 6               Governing Law

 

This Amendment shall be governed in all respects by the laws of the State of New
York, without giving effect to the conflict of laws rules thereof to the extent
such rules would require or permit the application of the laws of another
jurisdiction.  The parties hereto hereby irrevocably submit to the exclusive
jurisdiction of the courts of the State of New York and the Federal courts of
the United States of America located in the State, City and County of New York,
and hereby waive, and agree not to assert, as a defense in any action, suit or
proceeding for the interpretation or enforcement hereof, that it is not subject
thereto or that such action, suit or proceeding may not be brought or is not
maintainable in said courts or that the venue thereof may not be appropriate or
that this Amendment may not be enforced in or by said courts, and the parties
hereto irrevocably agree that all claims with respect to such action or
proceeding shall be heard and determined in such a New York State or Federal
court.  The parties hereto hereby consent to and grant any such court
jurisdiction over the person of such parties and over the subject matter of any
such dispute and agree that mailing of process or other papers in connection
with any such action or proceeding in the manner provided in Section 10.2 of the
Investment Agreement, or in such other manner as may be permitted by applicable
Law, shall be valid and sufficient service thereof.

 

[Signature page follows]

 

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In witness whereof, the parties hereto have duly executed this Amendment as of
the date first above written.

 

 

TBS INTERNATIONAL PLC

 

 

 

By:

/s/ Ferdinand V. Lepere

 

 

 

Name: Ferdinand V. Lepere

 

 

 

Title: Senior Executive Vice President and
Chief Financial Officer

 

 

 

 

 

Lawrence A. Blatte

 

 

 

 

 

/s/ Lawrence A. Blatte

 

 

 

 

 

Gregg L. McNelis

 

 

 

 

 

/s/ Gregg L. McNelis

 

 

 

 

 

Joseph E. Royce

 

 

 

 

 

/s/ Joseph E. Royce

 

 

 

[Amendment No. 1 to Investment Agreement]

 

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EXHIBIT A

 

Form of
Amended and Restated
Certificate of Designation

 

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Companies Acts

 

A PUBLIC COMPANY LIMITED BY SHARES

 

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AMENDED AND RESTATED

 

STATEMENT WITH RESPECT TO THE POWERS,

 

PREFERENCES AND RELATIVE, OPTIONAL

 

AND OTHER SPECIAL RIGHTS OF

 

SERIES A PREFERENCE SHARES

 

AND

 

SERIES B PREFERENCE SHARES

 

OF

 

TBS INTERNATIONAL PLC

 

AND QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF

 

AS OF MAY 6, 2011

 

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Incorporated on October 19, 2009

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TABLE OF CONTENTS

 

 

Page

 

 

ARTICLE 1 DESIGNATION

1

 

 

ARTICLE 2 RANK

1

 

 

ARTICLE 3 LIQUIDATION PREFERENCE

2

 

 

SECTION 3.1 Accrual of Liquidation Preference

2

 

 

SECTION 3.3 Events Not Deemed a Liquidation

2

 

 

ARTICLE 4 DIVIDENDS

2

 

 

SECTION 4.1 Preference Dividends

2

 

 

SECTION 4.2 Dividend Priority

3

 

 

SECTION 4.3 Board Discretion

3

 

 

ARTICLE 5 VOTING RIGHTS

3

 

 

SECTION 5.1 Voting

3

 

 

SECTION 5.2 No Impairment

4

 

 

SECTION 5.3 Amendment Without a Vote

4

 

 

ARTICLE 6 CONVERSION

5

 

 

SECTION 6.1 Conversion

5

 

 

SECTION 6.2 Adjustments of Conversion Rate

8

 

 

ARTICLE 7 REDEMPTION

10

 

 

SECTION 7.1 Redemption

10

 

 

ARTICLE 8 MISCELLANEOUS

13

 

 

SECTION 8.1 Preemptive Rights

13

 

 

SECTION 8.2 Reissuance of Preference Shares

13

 

 

SECTION 8.3 Business Day

13

 

 

SECTION 8.4 Waiver

13

 

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Table of Contents
(Continued)

 

 

Page

 

 

SECTION 8.5  Notice

13

 

 

SECTION 8.6 Registrar, Transfer Agent, Paying Agent and Conversion Agent

14

 

 

ARTICLE 9 TRANSFER RESTRICTIONS

15

 

 

SECTION 9.1 Preference Shares

15

 

 

SECTION 9.2 Conversion of Shares

15

 

 

ARTICLE 10 DELIVERY AND FORM

15

 

 

SECTION 10.1 Form of Preference Shares

15

 

 

SECTION 10.2 Global Form

15

 

 

SECTION 10.3 Registration; Transfer

16

 

 

ARTICLE 11 DEFINITIONS

17

 

 

SECTION 11.1 Definitions

17

 

 

SECTION 11.2 Rules of Construction

19

 

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TBS International plc (the “Company”), an Irish public limited company, does
hereby determine and certify that, pursuant to authority conferred upon the
Board of Directors of the Company (the “Board of Directors”) by its Amended and
Restated Memorandum and Articles of Association (as amended, the “Amended and
Restated Memorandum and Articles of Association”), and pursuant to the
provisions of the Companies Acts, the Board, at a meeting duly convened and held
on May 6, 2011, duly approved and adopted the following resolution:

 

RESOLVED, that the Board hereby approves and adopts the amended and restated
designation set forth below with respect to the title, rights, privileges,
powers and preferences of, and the qualifications, limitations and restrictions
pertaining to, the Series A Preference Shares and the Series B Preference
Shares, and it authorizes and determines the terms of the Series A Preference
Shares and Series B Preference Shares on the terms and with the provisions set
forth in such designation.

 

This amended and restated statement with respect to shares (this “Certificate of
Designation”), as amended, shall be effective on May 6, 2011.

 

ARTICLE 1
DESIGNATION

 

There is hereby created out of the authorized and unissued preference shares of
US$0.01 each in the capital of the Company:  (a) a series of preference shares
designated as the “Series A Preference Shares” (the “Series A Preference
Shares”), consisting of 350,000 shares, par value US$0.01 per share and (b) a
series of preference shares designated as the “Series B Preference Shares” (the
“Series B Preference Shares” and, collectively with the Series A Preference
Shares, the “Preference Shares”), consisting of 100,000 shares, par value
US$0.01 per share.  The Preference Shares shall have an initial liquidation
preference of $100.00 per share (the “Initial Liquidation Preference”).

 

ARTICLE 2
RANK

 

The Preference Shares, with respect to distributions upon the liquidation,
winding-up and dissolution of the Company and as to dividends (as set forth in
Article 3 and Article 4 hereof), shall rank:  (a) senior to the Ordinary Shares
and the share capital of the Company established after the Issue Date the terms
of which do not expressly provide that it ranks senior to or on a parity with
the Preference Shares as to dividends and as to distributions upon the
liquidation, winding-up and dissolution of the Company (collectively with the
Ordinary Shares, “Junior Securities”); (b) on a parity with each class or series
of preference shares established after the Issue Date the terms of which
expressly provide that such class or series will rank on a parity with the
Preference Shares as to dividends and as to distributions upon the liquidation,
winding-up and dissolution of the Company (collectively referred to as “Parity
Securities”), and (c) junior to all classes or series of share capital of the
Company established after the Issue Date the terms of which expressly provide
that it ranks senior to the Preference Shares as to dividends and as to
distributions upon the liquidation, winding-up and dissolution of the Company
(collectively referred to as “Senior Securities”).

 

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ARTICLE 3
LIQUIDATION PREFERENCE

 

SECTION 3.1  Accrual of Liquidation Preference.  Each issued and outstanding
Preference Share shall be entitled to an “Accrued Liquidation Preference” equal
to:  (a) the Initial Liquidation Preference, plus (b) a cumulative amount (the
“Accrued Preference Amount”) accrued at a rate of 6.0% per year, compounded
semiannually (based on a 360-day year consisting of twelve 30-day months) on
each Liquidation Accrual Date from the date of the original issuance of such
Preference Share.

 

SECTION 3.2  Liquidation Preference.  Upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Company, each Holder of Preference
Shares will be entitled to be paid, out of the assets of the Company available
for distribution, and before any distribution is made on any Junior Security, a
liquidation preference per Preference Share equal to the greater of (a) the
Aggregate Preference Amount and (b) the aggregate amount per share which such
Holder would have been paid if such Holder had held the maximum number of
Conversion Shares acquirable upon the complete conversion of such Holder’s
Preference Share pursuant to Section 6.1 immediately before the time and date of
the determination of shareholders entitled to receive distributions for such
liquidation, dissolution or winding-up.  Holders of the Preference Shares will
have no rights to participate with any Junior Securities in any such
distribution made on any Junior Securities of the Company, other than
participation based upon the number of Conversion Shares acquirable upon the
complete conversion of such Holder’s Preference Share pursuant to clause (b) of
the immediately preceding sentence.  If, upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Company, the amounts payable with
respect to the Preference Shares and any Parity Securities are not paid in full,
the Holders of the Preference Shares and the Parity Securities will share
equally and ratably in any distribution of assets of the Company in proportion
to the full liquidation preference to which each is entitled.  After payment of
the full amount of the liquidation preferences, the Holders will not be entitled
to any further participation in any distribution of assets of the Company.

 

SECTION 3.3  Events Not Deemed a Liquidation.  For purposes of Section 3.2,
neither the sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Company nor the consolidation or merger of the Company with or
into one or more companies will be deemed to be a liquidation, dissolution or
winding-up of the Company.

 

ARTICLE 4
DIVIDENDS

 

SECTION 4.1  Preference Dividends.  Holders of outstanding Preference Shares
will be entitled to receive, subject to the availability of distributable
reserves, dividends (the “Preference Dividends”) on each Preference Share from
(but not before) December 31, 2014, at a rate per year equal to 6.0% of the
Aggregate Dividend Preference (with such Aggregate Dividend Preference being
determined as of the close of business on each June 30 and December 31,
beginning December 31, 2014).  All Preference Dividends shall be cumulative,
whether or not earned or declared, payable semiannually in arrears on each
Dividend Payment Date and shall be calculated based on a 360-day year consisting
of twelve 30-day months; provided, that if any

 

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Preference Dividend payable on any Dividend Payment Date is not declared and
paid in full on such Dividend Payment Date, the amount of such Preference
Dividend shall be treated as unpaid Preference Dividends (except to the extent
that a special dividend is paid pursuant to Section 4.2(b); provided further,
that if the Company becomes subject to an Insolvency Event, any outstanding
unpaid Preference Dividends will be added to the Aggregate Preference Amount
immediately upon the occurrence of the Insolvency Event.

 

SECTION 4.2  Dividend Priority.

 

(a)           Except as permitted pursuant to the next sentence and subject to
the availability of distributable reserves, no dividends shall be declared by
the Board of Directors or paid or funds set apart in cash for payment of
dividends by the Company pursuant to Section 4.1 on any Parity Securities for
any period unless cumulative dividends (including, with respect to any
Preference Share, the outstanding unpaid Preference Dividends for such
Preference Share) shall have been or contemporaneously are declared and paid in
full, or declared (to the extent not paid but set apart for all such Parity
Securities) and a sum set apart sufficient for such payment, on the Preference
Shares for all completed semiannual periods since the applicable Issue Date, on
or prior to the date of payment of such dividends on such Parity Securities.  If
any dividends are not paid in full, as aforesaid, upon the Preference Shares and
any other Parity Securities, all dividends declared upon Preference Shares and
any other Parity Securities shall be declared and paid pro rata based on the
relative amounts of the Aggregate Dividend Preference of the Preference Shares
and the liquidation preference, or other amount specified in the terms of, such
Parity Securities.

 

(b)           At any time and from time to time when there are outstanding
unpaid Preference Dividends, the Company may declare and pay, to the Holders on
the record date chosen by the Company (which record date shall be not less than
30 and not more than 60 days prior to the payment date for such special
dividend) for such dividend, a special dividend per Preference Share equal to
all or a portion of the outstanding unpaid Preference Dividends for such
Preference Shares (the amount of such special dividend, the “Base Amount”), plus
accrued and unpaid Preference Dividends on the applicable Base Amount to the
date of payment (including an amount equal to a prorated dividend for the period
from the last Dividend Payment Date to the date of payment).  Upon payment of
such a dividend, the Aggregate Dividend Preference shall be reduced by the
amount of the Base Amount.

 

SECTION 4.3  Board Discretion.  Nothing herein contained shall in any way or
under any circumstances be construed or deemed to require the Board of Directors
to declare, or the Company to pay, or set apart for payment, any dividends at
any time other than the Preference Dividends.

 

ARTICLE 5

 

VOTING RIGHTS

 

SECTION 5.1  Voting.  Except as required by law or set forth in Section 5.2,
Holders shall have no voting rights and their consent shall not be required for
taking any corporate actions.

 

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SECTION 5.2  No Impairment.

 

(a)           Subject to Section 5.2(c), so long as any Series A Preference
Shares are outstanding, without the affirmative vote or consent of the Holders
of a majority (or such higher percentage as may be required pursuant to Irish
law) of the then outstanding Series A Preference Shares, voting or consenting,
as the case may be, as a separate class, given in person or by proxy, either in
writing or by resolution adopted at an annual or extraordinary general or class
meeting, the Company shall not amend this Certificate of Designation or the
Amended and Restated Memorandum and Articles of Association so as to affect
adversely the special rights, powers, preferences, privileges or voting rights
of Holders of the Series A Preference Shares.

 

(b)           Subject to Section 5.2(c), so long as any Series B Preference
Shares are outstanding, without the affirmative vote or consent of the Holders
of a majority (or such higher percentage as may be required pursuant to Irish
law) of the then outstanding Series B Preference Shares, voting or consenting,
as the case may be, as a separate class, given in person or by proxy, either in
writing or by resolution adopted at an annual or extraordinary general or class
meeting, the Company shall not amend this Certificate of Designation or the
Amended and Restated Memorandum and Articles of Association so as to affect
adversely the special rights, powers, preferences, privileges or voting rights
of Holders of the Series B Preference Shares.

 

(c)           The following actions shall not require the consent of the Holders
set forth in Sections 5.2(a) or 5.2(b), as applicable, and shall not be deemed
to affect adversely the special rights, powers, preferences, privileges or
voting rights of Holders of Preference Shares:  (i) the creation, authorization
or issuance of any shares of any class or series of share capital of the
Company, even if the terms of such class or series expressly provide that it
ranks senior to or on a parity with the Preference Share as to dividends or as
to distributions upon the liquidation, winding-up and dissolution of the
Company; (ii) a decrease in the amount of authorized share capital of any class
or series of share capital of the Company (but not below the amount of
outstanding share capital of such class or series nor below such amount of
Conversion Shares as would be required to effect the conversion provided for in
Section 6.1), including the Preference Shares; (iii) an increase in the amount
of authorized share capital of any class or series of share capital of the
Company, even if the terms of such class or series expressly provide that it
ranks senior to or on a parity with the Preference Share as to dividends or as
to distributions upon the liquidation, winding-up and dissolution of the
Company; or (iv) the consolidation of the Company with, or the merger by the
Company with or into, another Person or the sale, assignment, conveyance,
transfer, lease or other disposal by the Company of all or substantially all of
the assets of the Company, or the consolidation of any Person with, or merger of
any Person with or into, the Company.

 

SECTION 5.3  Amendment Without a Vote.  Subject to Section 5.2 and any
requirements of Irish law, unless otherwise provided herein, without the vote of
the Holders, the Company may amend or supplement this Certificate of Designation
or the Amended and Restated Memorandum and Articles of Association to cure any
ambiguity, defect or inconsistency in this Certificate of Designation.

 

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ARTICLE 6

 

CONVERSION

 

SECTION 6.1  Conversion.

 

(a)           Right to Convert.

 

(i)            Subject to the limitations of Section 6.1(a)(ii), the Holder of
any Preference Shares may, at its option at any time, convert in accordance with
this Section 6.1 all or any of such Holder’s Preference Shares into Conversion
Shares that are fully paid and non-assessable (which term means that no further
sums are required to be paid by the holders thereof in connection with the issue
of such Conversion Shares); provided, that if a Preference Share has been called
for redemption in accordance with Article 7, the right to convert such
Preference Share shall terminate at the close of business on the third Business
Day prior to the date fixed for such redemption.

 

(ii)           Notwithstanding the rights provided by Section 6.1(a)(i), no
Series A Preference Share may be converted without the consent of the Board if,
as a result of such conversion:

 

(A)  the Company would become a “controlled foreign corporation” (as defined by
Section 957 of the Code); or

 

(B)  the Holder, together with any other person who is deemed to be “acting in
concert” (within the meaning of rule 3.3 of the Irish Takeover Rules) with the
Holder, would hold 30% (or such other percentage as may be prescribed) or more
of the voting rights in the Company such that such person or persons would be
required to make a mandatory bid under rule 9 of the Irish Takeover Rules.

 

(iii)          Notwithstanding the rights provided by Section 6.1(a)(i), no
Series B Preference Share may be converted without the consent of the Board if,
as a result of such conversion:

 

(A)  the Company would become a “controlled foreign corporation” (as defined by
Section 957 of the Code);

 

(B)  the Company would cease to be eligible for the exemption from U.S. shipping
tax provided in Section 883 of the U.S. Internal Revenue Code; or

 

(C)  the Holder, together with any other person who is deemed to be “acting in
concert” (within the meaning of rule 3.3 of the Irish Takeover Rules) with the
Holder, would hold 30% (or such other percentage as may be prescribed) or more
of the voting rights in the Company such that such person or persons would be
required to make a mandatory bid under rule 9 of the Irish Takeover Rules.

 

(b)           Mandatory Conversion.  If at any time the Board of Directors
determines that it is necessary or advisable for (i) Series B Preference Shares
to be converted into Class B Ordinary

 

5

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Shares or (ii) Series B Preference Shares to be converted into Class B Ordinary
Shares and further converted into Class A Ordinary Shares, in each case to
prevent the Company from becoming a controlled foreign corporation for U.S.
federal income tax purposes or to prevent one or more 5% shareholders (as
defined in the Amended and Restated Memorandum and Articles of Association) to
own 50% or more of the value of the Class A Ordinary Shares, the board may
cause, as applicable:  (x) any or all Series B Preference Shares to be converted
into Conversion Shares at the then-applicable Conversion Rate or (y) any or all
Series B Preference Shares to be converted into Conversion Shares at the
then-applicable Conversion Rate and such Conversion Shares to be immediately
converted into Class A Ordinary Shares at the then-applicable conversion rate
between Class B Ordinary Shares and Class A Ordinary Shares.  In connection with
such conversion, the Company will deliver a notice of conversion to the Holders
subject to such conversion at least 10 days in advance of the date set for such
conversion; provided, that any Holder entitled to receive such notice may waive
such notice.

 

(c)           Delivery of Conversion Shares.  The number of Conversion Shares
deliverable upon conversion shall be the number obtained by (i) multiplying the
(A) number of Preference Shares surrendered to the Company in accordance with
Section 6.1(d) by (B) the applicable Conversion Rate, as adjusted in accordance
with Section 6.2, and (ii) rounding down to the nearest whole share.  No
fractional Conversion Shares shall be issued on account of accrued but unpaid
Preference Dividends.

 

(d)           Conversion Election.  A Holder shall elect to convert Preference
Shares by delivering to the Conversion Agent at any time during normal business
hours:  (i) written notice of such Holder’s election to convert; (ii) the
certificate or certificates, duly endorsed, representing the shares to be so
converted or book-entry transfer of such shares to the Conversion Agent;
(iii) such instruments of transfer as the Company reasonably may require, in
form satisfactory to the Company and duly executed by such Holder; and
(iv) stamp duty or other similar tax or funds therefor, if required pursuant to
Section 6.1(g).

 

(e)           Issuance of Conversion Shares.

 

(i)            Upon a mandatory conversion in accordance with Section 6.1(b) or
as promptly as practicable after a Holder has validly elected to convert
Preference Shares in accordance with Section 6.1(d), the Company will deliver to
the Holder the number of Conversion Shares issuable upon such conversion issued
in such name or names as such Holder may direct.  Such conversion shall be
deemed to have been made immediately prior to the close of business on the date
of the surrender of the certificate or certificates representing the shares to
be so converted or book-entry transfer of such shares to the Conversion Agent,
in each case in accordance with Section 6.1(d).  At the time of such conversion,
all rights of a converting Holder as a Holder shall cease with respect to the
surrendered shares and the Person in whose name the Conversion Shares are to be
issued shall be treated for all purposes as the record holder thereof.  All
converted Preference Shares shall be, or shall be deemed to be, canceled by the
Company as of the date the election to convert is made, as the case may be, and
shall thereafter no longer be of any force or effect.

 

(ii)           The Company covenants that:  (A) it will at all times reserve and
keep available, solely for the purpose of issue upon conversion of Preference
Shares, such number of

 

6

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Conversion Shares as would be issuable upon the conversion of all outstanding
Preference Shares; (B) if any Conversion Shares required to be reserved for
purposes of conversion of the shares hereunder require registration with or
approval of any governmental authority before such shares may be issued upon
conversion, it will cause such shares to be duly registered or approved, as the
case may be; (C) it will use its reasonable best efforts to maintain the listing
of the Conversion Shares required to be delivered upon conversion of shares on a
national securities exchange, if any, upon which the outstanding Conversion
Shares are listed at the time of such delivery, or, if such outstanding
Conversion Shares are not listed on any exchange but are traded in the
over-the-counter market, to qualify such shares for trading and quotation
privileges such as are then available for the outstanding Conversion Shares; and
(D) all Conversion Shares which shall be issued upon conversion of the shares
will upon issue have been duly authorized and validly issued and be fully paid
and non-assessable.

 

 

(f)            Certain Transactions.

 

(i)            Upon the consummation of any (A) consolidation, reorganization,
share exchange, division or merger to which the Company is a party, other than a
consolidation, reorganization, share exchange, division or a merger in which the
Company is a continuing Company and which does not result in any
reclassification, change or exchange (other than changes in par value or from
par value to no par value or from no par value to par value or changes as a
result of a subdivision or combination) in the outstanding class of Conversion
Shares, each Preference Share shall become convertible only into the kind and
amount of securities and other property, if any, received in exchange for the
applicable class of Conversion Shares in such transaction, or (B) sale of all or
substantially all of the assets of the Company, each Preference Share shall
become entitled upon conversion to receive only the kind and amount of
securities and other property, if any, received by holders of the applicable
class of Conversion Shares as a result of such transaction; subject, in each
case, to adjustment as nearly equivalent as practicable to the adjustments
provided for in Section 6.2.  The provisions of this Section 6.1(f) shall
similarly apply to successive consolidations, reorganizations, mergers, share
exchanges, divisions, sales or conveyances.

 

(ii)           The Company shall cause to be given to the Holders as promptly as
possible, but in any event at least 15 days prior to the applicable date of the
occurrence of an event described in clause (i) above, a notice stating the date
on which such event is expected to become effective or occur, and the date as of
which it is expected that Holders shall be entitled to exchange their Preference
Shares for securities, cash or other property deliverable upon such
consolidation, reorganization, share exchange, division, merger, sale or
conveyance.

 

(g)           Stamp Tax or Duty.  The issuance of Conversion Shares upon
conversion shall be made without charge for any stamp duty or other similar tax
in respect of such issuance.  However, if any such Conversion Share is to be
issued in a name other than that of the Holder of the share or shares converted,
the Person or Persons requesting the issuance thereof shall pay to the Company
the amount of any tax that may be payable in respect of any transfer involved in
such issuance or shall establish to the satisfaction of the Company that such
tax has been paid.

 

7

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SECTION 6.2  Adjustments of Conversion Rate.  The Conversion Rate shall be
subject to adjustment as follows:

 

(a)           Adjustment for Changes in Liquidation Preference.  On each
Liquidation Accrual Date, the Conversion Rate in effect immediately prior to the
liquidation preference accrual made pursuant to Section 3.1 for a Preference
Share then outstanding shall be adjusted based on the following formula:

 

CR’ = CR0

x

LP’

 

LP0

 

 

where

 

CR’ =                  the Conversion Rate in effect immediately after such
liquidation preference accrual;

 

CR0 =                 the Conversion Rate in effect immediately prior to such
liquidation preference accrual;

 

LP’ =                    the Accrued Liquidation Preference immediately after
such liquidation preference accrual; and

 

LP0 =                   the Accrued Liquidation Preference immediately prior to
such liquidation preference accrual.

 

Each adjustment shall become effective immediately after the effectiveness of
each liquidation preference accrual made pursuant to Section 3.1.

 

(b)           Adjustment for Changes in Ordinary Shares.

 

(i)            If, after the Issue Date, the Company (A) subdivides or splits
any of its outstanding Ordinary Shares into a greater number of shares;
(B) combines or consolidates any of its outstanding Ordinary Shares into a
smaller number of shares; or (C) issues by reclassification of its Ordinary
Shares any class or series of its share capital; then the Conversion Rate in
effect immediately prior to such action for each Series A Preference Share then
outstanding shall be adjusted based on the following formula:

 

CR’ = CR0

x

OS’

 

OS0

 

 

where

 

CR’ =                  the Conversion Rate in effect immediately after the
opening of business on the effective date of such subdivision, split,
consolidation, combination or reclassification;

 

CR0 =                 the Conversion Rate in effect immediately prior to the
effective date of such subdivision, split, consolidation, combination or
reclassification;

 

8

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OS’ =                  the total number of Ordinary Shares outstanding
immediately after, and solely as a result of, such subdivision, split,
consolidation or combination (or, in the case of a reclassification, the number
of securities into which all Ordinary Shares outstanding are reclassified); and

 

OS0 =                 the total number of Ordinary Shares outstanding
immediately prior to the effective date of such subdivision, split,
consolidation, combination or reclassification.

 

(ii)           If, after the Issue Date, the Company (A) subdivides or splits
any of its outstanding Ordinary Shares into a greater number of shares;
(B) combines or consolidates any of its outstanding Ordinary Shares into a
smaller number of shares; or (C) issues by reclassification of its Ordinary
Shares any class or series of its share capital; then the Conversion Rate in
effect immediately prior to such action for each Series B Preference Share then
outstanding shall be adjusted based on the following formula:

 

CR’ = CR0

x

OS’

 

OS0

 

 

where

 

CR’ =                  the Conversion Rate in effect immediately after the
opening of business on the effective date of such subdivision, split,
consolidation, combination or reclassification;

 

CR0 =                 the Conversion Rate in effect immediately prior to the
effective date of such subdivision, split, consolidation, combination or
reclassification;

 

OS’ =                  the total number of Ordinary Shares outstanding
immediately after, and solely as a result of, such subdivision, split,
consolidation or combination (or, in the case of a reclassification, the number
of securities into which all Ordinary Shares outstanding are reclassified); and

 

OS0 =                 the total number of Ordinary Shares outstanding
immediately prior to the effective date of such subdivision, split,
consolidation, combination or reclassification.

 

(iii)          The adjustments set forth in this Section 6.2(b) shall become
effective immediately after the effective date of such subdivision, split,
consolidation, combination or reclassification.  In the event that such
subdivision, split, consolidation, combination or reclassification is not
effected, the Conversion Rate shall again be adjusted to be the Conversion Rate
which would then be in effect if such effective date had not been so fixed.

 

(iv)          If, as a result of an adjustment made pursuant to this
Section 6.2(b), a Holder may, upon conversion of a Preference Share, receive
shares of two or more classes or series of the Company’s share capital, the
Conversion Rate for such Preference Share shall thereafter be subject to
adjustment upon the occurrence of an action taken with respect to any such class
or series of share capital as is contemplated by this Section 6.2 with respect
to the

 

9

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Class A Ordinary Shares or Class B Ordinary Shares, as applicable, on terms
comparable to those applicable to Class A Ordinary Shares or Class B Ordinary
Shares, as applicable, in this Section 6.2.

 

(c)           Notice of Adjustment.  The Company shall not be obligated to
notify Holders of adjustments to the Conversion Rate made pursuant to
Section 6.2(a).  Whenever the Conversion Rate for a particular Preference Share
is adjusted pursuant to Section 6.2(b), the Company shall promptly mail to the
Holder of such Preference Share, at the addresses appearing on the share
register, a notice of the adjustment.  The Company shall keep with its records
such notice and a certificate from an officer of the Company briefly stating the
facts requiring the adjustment and the manner of computing it.  The certificate
shall be conclusive evidence that the adjustment is correct, absent manifest
error.

 

(d)           Other Events.  If any event occurs as to which the provisions of
this Section 6.2 are not strictly applicable and as a result of which the
provisions of this Section 6.2, in the good faith judgment of the Board of
Directors, do not fairly and adequately comply with the essential intent and
principles of such provisions, then such Board of Directors shall make such
adjustments in the application of such provisions, in accordance with such
essential intent and principles, as shall be reasonably necessary, in the good
faith opinion of such Board of Directors, to so comply.

 

(e)           [Intentionally Omitted.]

 

(f)            Multiple Adjustments.  After any adjustment to the Conversion
Rate pursuant to this Section 6.2, any subsequent event requiring an adjustment
in the Conversion Rate shall result in an adjustment to the Conversion Rate as
previously adjusted under this Section 6.2.

 

(g)           When De Minimis Adjustment May Be Deferred.  No adjustment in the
Conversion Rate for a Preference Share shall be required unless such adjustment
would require an increase or decrease of at least 1% in such rate; provided,
however, that any adjustments which by reason of the foregoing are not required
to be made shall be carried forward and taken into account in any subsequent
adjustment.  All calculations shall be made by the Company and shall be rounded
to the fourth decimal place.  No adjustment need be made for a change in the par
value of the Ordinary Shares.

 

ARTICLE 7

 

REDEMPTION

 

SECTION 7.1  Redemption.

 

(a)           Optional Redemption by the Company.  On or after December 31,
2014, the Company shall have the option, subject to the availability of
distributable reserves, to redeem, in whole or in part, from time to time,
subject to Section 7.1(j) hereof, some or all of the Preference Shares at the
Redemption Price.

 

(b)           In connection with any redemption pursuant to this Article 7, the
Company shall:

 

10

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(i)            send a written notice to the Registrar and Transfer Agent of the
date on which the redemption shall occur (the “Redemption Date”), stating the
number of Preference Shares to be redeemed and the Redemption Price applicable
to such shares, at least 35 days before the Redemption Date (unless a shorter
period shall be satisfactory to the Registrar and Transfer Agent);

 

(ii)           send a written notice by, in the case of Preference Shares not
held by a Depositary, first class mail to the Holder’s registered address and,
in the case of Preference Shares held by a Depositary, transmission to the
Depositary for dissemination to the beneficial holders in accordance with its
procedures, not fewer than 20 nor more than 90 days prior to the Redemption Date
stating for such redeemed Preference Shares:

 

(A)          the Redemption Date;

 

(B)           the Redemption Price;

 

(C)           the Conversion Price and the Conversion Rate;

 

(D)          the name and address of the Paying Agent and Conversion Agent;

 

(E)           that Preference Shares called for redemption may be converted at
any time before 5:00 p.m., New York City time on the third Business Day
immediately preceding the Redemption Date;

 

(F)           that Holders who want to convert Preference Shares must satisfy
the requirements set forth in this Section 7;

 

(G)           that Preference Shares called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price;

 

(H)          if fewer than all the outstanding Preference Shares are to be
redeemed by the Company, the number of shares to be redeemed;

 

(I)            that, unless the Company defaults in making payment of such
Redemption Price, dividends in respect of the Preference Shares called for
redemption will cease to accumulate on and after the Redemption Date;

 

(J)            the CUSIP number of the Preference Shares called for redemption;
and

 

(K)          any other information the Company wishes to present.

 

(iii)          issue a press release containing the information set forth in
Section 7.1(b)(ii) and publish such information on the Company’s web site on the
World Wide Web.

 

(c)  If the Company gives notice of redemption, then, by 12:00 p.m., New York
City time, on the Redemption Date, to the extent sufficient funds are legally
available, the Company shall, with respect to:

 

11

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(i)  Preference Shares held by the Depositary or its nominees, deposit or cause
to be deposited, irrevocably with the Depositary cash sufficient to pay the
Redemption Price and shall give the Depositary irrevocable instructions and
authority to pay the Redemption Price to Holders of such Preference Shares; and

 

(ii)  Preference Shares held in certificated form, deposit or cause to be
deposited, irrevocably with the Paying Agent cash sufficient to pay the
Redemption Price and shall give the Paying Agent irrevocable instructions and
authority to pay the Redemption Price to Holders of such Preference Shares upon
surrender of their Preference Shares.

 

(d)  If on the Redemption Date, the Depositary or the Paying Agent holds or hold
funds sufficient to pay the Redemption Price for the Preference Shares delivered
for redemption as set forth herein, dividends shall cease to accumulate as of
the Redemption Date on those Preference Shares called for redemption and all
rights of Holders of such shares shall terminate, except for the right to
receive the Redemption Price pursuant to this Article 7.

 

(e)  Payment of the Redemption Price for Preference Shares is conditioned upon
book-entry transfer or physical delivery of certificates representing the
Preference Shares, together with necessary endorsements, to the Paying Agent at
any time after delivery of the notice of redemption.

 

(f)  Payment of the Redemption Price for a Preference Share shall be made on the
later of the Redemption Date and the time of book-entry transfer or physical
delivery of such Preference Share.

 

(g)  If the Redemption Date falls after a Dividend Record Date and before the
related Dividend Payment Date, Holders of the Preference Shares, as of the close
of business on the Dividend Record Date, shall be entitled to receive the
Preference Dividends declared and payable on such Dividend Payment Date.

 

(h)  If fewer than all the outstanding Preference Shares are to be redeemed, the
number of Preference Shares to be redeemed shall be determined by the Board of
Directors and the Preference Shares to be redeemed shall be selected by lot, on
a pro rata basis (with any fractional shares being rounded to the nearest whole
share), or any other method as may be determined by the Board of Directors to be
fair and appropriate.

 

(i)  Upon surrender of a certificate or certificates representing Preference
Shares that is or are redeemed in part, the Company shall execute, and the
Transfer Agent shall authenticate and deliver to the Holder, a new certificate
or certificates representing Preference Shares in an amount equal to the
unredeemed portion of the Preference Shares surrendered for partial redemption.

 

(j)  Notwithstanding the foregoing provisions of this Article 7, unless full
cumulative dividends (whether or not declared) on all outstanding Preference
Shares and Parity Securities have been paid or set apart for payment for all
semiannual dividend periods terminating on or before the Redemption Date, none
of the Preference Shares shall be redeemed, and no sum shall be set aside for
such redemption, unless pursuant to a purchase or exchange offer made on the
same terms to all Holders of Preference Shares or Parity Securities, as
applicable.  For the

 

12

--------------------------------------------------------------------------------

 

avoidance of doubt, with respect to the Preference Shares, the payment or
setting apart for payment of full cumulative dividends shall mean that the
Aggregate Dividend Preference for such Preference Shares is equal to the Accrued
Liquidation Preference or that the Company has paid or set apart for payment a
special dividend pursuant to Section 4.2(b) that will, upon payment and in the
event of any Insolvency Event, reduce the Aggregate Dividend Preference to make
it equal to the Accrued Liquidation Preference.

 

ARTICLE 8

 

MISCELLANEOUS

 

SECTION 8.1  Preemptive Rights.  Save for any statutory pre-emption rights
pursuant to Irish law, this Certificate of Designation does not grant to any
Preference Share or Holder of a Preference Share any rights of preemption
whatsoever as to any securities of the Company, or any warrants, rights or
options issued or granted with respect thereto, regardless of how such
securities or such warrants, rights or options may be designated, issued or
granted.

 

SECTION 8.2  Reissuance of Preference Shares.  Preference Shares that have been
issued and reacquired in any manner, including shares redeemed or exchanged,
shall (upon compliance with any applicable provisions of Irish law) have the
status of authorized but unissued Preference Shares and may be designated or
redesignated and, subject to any shareholder approval requirement that may be
required by law, issued or reissued, as the case may be, as part of any class or
series of preference shares of the Company.

 

SECTION 8.3  Business Day.  If any payment, redemption or exchange shall be
required by the terms hereof to be made on a day that is not a Business Day,
such payment, redemption, or exchange shall be made on the immediately
succeeding Business Day.

 

SECTION 8.4  Waiver.  Except to the extent a greater vote or consent is required
by law, the Holders of a majority of the outstanding Preference Shares, voting
or consenting, as the case may be, as a separate class, may waive compliance
with any provision of this Certificate of Designation.

 

SECTION 8.5  Notice.  All notices and other communications hereunder shall be in
writing and shall be deemed duly given:  (a) if delivered personally, on the
date of delivery; (b) if delivered by facsimile, email or otherwise, upon
written confirmation of receipt by facsimile, email or otherwise; (c) if
delivered by a recognized next-day courier service, on the first Business Day
following the date of dispatch; or (d) if delivered by registered or certified
mail, return receipt requested, postage prepaid, on the earlier of confirmed
receipt or the fifth Business Day following the date of mailing.  All notices
hereunder shall be delivered to the addresses set forth below, or pursuant to
such other instructions as may be designated in writing by the party to receive
such notice:

 

13

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if to the Company, to:

 

TBS International plc
c/o TBS Shipping Services, Inc.
612 East Grassy Sprain Rd.
Yonkers, New York 10710
Attention:  Tara C. DeMakes
Phone:  (914) 961-1000
Fax:  (914) 961-5121

 

with copies to:

 

Gibson, Dunn & Crutcher LLP
200 Park Avenue, 47th Floor
New York, NY 10166
Attention:  Steven R. Finley, Esq.
Phone:  (212) 351-4000
Fax:  (212) 351-4035

 

Any notice or communication to a Holder shall be delivered to the Holder’s
address as it appears in the share register of the Company and shall be
sufficiently given if so mailed within the time prescribed.  Failure to mail a
notice or communication to a Holder or any defect in such notice shall not
affect its sufficiency with respect to other Holders.

 

SECTION 8.6  Registrar, Transfer Agent, Paying Agent and Conversion Agent.

 

(a)           The Company shall appoint and maintain:  (i) an office or agency
to act as transfer agent (“Transfer Agent”) and registrar (“Registrar”) for each
series of the Preference Shares; (ii) an office or agency where each series of
Preference Shares may be presented for payment (the “Paying Agent”) and (ii) an
office or agency where each series of Preference Shares may be presented for
conversion (the “Conversion Agent”).  The Company may appoint and, in its sole
discretion, remove the Transfer Agent, Registrar, Paying Agent and Conversion
Agent and may appoint and, in its sole discretion, remove one or more additional
transfer agents, registrars, paying agents or conversion agents.  The terms
“Transfer Agent,” “Registrar,” “Paying Agent,” and “Conversion Agent” each
includes any additional Person appointed to such position. The Company may
change the Transfer Agent, Registrar, Paying Agent or Conversion Agent without
prior notice to any Holder.  The Company shall notify the Registrar of the name
and address of any Transfer Agent, Paying Agent or Conversion Agent appointed by
the Company.  If the Company fails to appoint or maintain another entity as
Transfer Agent, Paying Agent or Conversion Agent, the Registrar shall act as
such.  The Company or any of its Affiliates may act as Transfer Agent,
Registrar, Paying Agent or Conversion Agent.

 

(b)           Payments due on the Preference Shares shall be payable at the
office or agency maintained by the Company for such purpose in The City of New
York and at any other office or agency maintained by the Company for such
purpose.  Payments shall be payable by United States dollar check drawn on, or
wire transfer (provided, that appropriate wire instructions have been received
by the Registrar at least 15 days prior to the applicable date of payment) to a
U.S.

 

14

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dollar account maintained by the holder with, a bank located in New York City;
provided, that at the option of the Company, payment of dividends may be made by
check mailed to the address of the Person entitled thereto at such address as
shall appear in the share register of the Company.  Notwithstanding the
foregoing, payments due in respect of beneficial interests in any Global
Preference Share shall be payable by wire transfer of immediately available
funds in accordance with the procedures of the Depositary.

 

ARTICLE 9

 

TRANSFER RESTRICTIONS

 

SECTION 9.1  Preference Shares.

 

(a)           Each Preference Share may bear notations, legends or endorsements
required by the Amended and Restated Memorandum and Articles of Association,
law, stock exchange rules, agreements to which the Company is subject, if any,
or usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Company).

 

(b)           The Company shall refuse to register any attempted transfer of
Preference Shares not in compliance with Section 9.1(a).

 

SECTION 9.2  Conversion of Shares.  The Conversion Shares issued upon conversion
of Preference Shares may bear notations, legends or endorsements required by the
Amended and Restated Memorandum and Articles of Association, law, stock exchange
rules, agreements to which the Company is subject, if any, or usage (provided,
that any such notation, legend or endorsement is in a form acceptable to the
Company).

 

ARTICLE 10

 

DELIVERY AND FORM

 

SECTION 10.1  Form of Preference Shares.  The Preference Shares will be held in
global form as set forth in Section 10.2, except that the Company may permit
some or all Holders to hold Preference Shares directly in uncertificated or
certificated form.  Preference Shares shall bear legends as set forth in
Section 10.1.  Except as otherwise provided for under the Amended and Restated
Memorandum and Articles of Association or applicable law, record ownership of
Preference Shares will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the Company.

 

SECTION 10.2  Global Form.

 

(a)           Preference Shares shall be issued in the form of one or more
permanent global Preference Shares (each, a “Global Preference Share”) each
bearing the global legend set forth attached hereto as Exhibit A, which is
hereby incorporated in and expressly made a part of this Certificate of
Designation, or such alternative global legend as the Board shall deem
necessary.  The Global Preference Shares shall be deposited on behalf of the
holders of the Preference Shares represented thereby with the Registrar, as
custodian for the Depositary, and registered in the name of the Depositary or a
nominee of the Depositary, duly executed by the Company and

 

15

--------------------------------------------------------------------------------

 

countersigned and registered by the Registrar as hereinafter provided.  The
aggregate number of shares represented by each Global Preference Share may from
time to time be increased or decreased by adjustments made on the records of the
Registrar and the Depositary or its nominee as hereinafter provided.  This
Section 10.2 shall apply only to a Global Preference Share deposited with or on
behalf of the Depositary.

 

(b)           Members of, or participants in, the Depositary (“Agent Members”)
shall have no rights under this Certificate of Designation, with respect to any
Global Preference Share held on their behalf by the Depositary or by the
Registrar as the custodian of the Depositary, or under such Global Preference
Share, and the Depositary may be treated by the Company, the Registrar and any
agent of the Company or the Registrar as the absolute owner of such Global
Preference Share for all purposes whatsoever.  Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Registrar or any agent of the
Company or the Registrar from giving effect to any written certification, proxy
or other authorization furnished by the Depositary or impair, as between the
Depositary and its Agent Members, the operation of customary practices of the
Depositary governing the exercise of the rights of a holder of a beneficial
interest in any Global Preference Share.  Owners of beneficial interests in
Global Preference Shares shall not be entitled to receive physical delivery of
certificated Preference Shares, unless (1) the Company elects, pursuant to
Section 10.1, to provide such Person certificated Preference Shares, (2) the
Depositary is unwilling or unable to continue as Depositary for the Global
Preference Shares and the Company does not appoint a qualified replacement for
the Depositary within 90 days, (3) the Depositary ceases to be a “clearing
agency” registered under the Exchange Act, or (4) the Company decides to
discontinue the use of book-entry transfer through the Depositary.  In any such
case, the Global Preference Shares shall be exchanged for certificated
Preference Shares in registered form, with the same terms and with an equal
Aggregate Preference Amount and equal Aggregate Dividend Preference, and bearing
any applicable legends pursuant to Section 10.1.  Certificated Preference Shares
shall be registered in the name or names of the Person or Person specified by
the Depositary in a written instrument to the Registrar.

 

(c)           (i)            If required by the Amended and Restated Memorandum
and Articles of Association or applicable law, an officer of the Company shall
sign the Global Preference Shares for the Company, by manual or facsimile
signature.

 

(ii)           If an officer of the Company whose signature is on a Global
Preference Share no longer holds that office at the time the Transfer Agent
authenticates the Global Preference Share, the Global Preference Share shall be
valid nevertheless.

 

(iii)          A Global Preference Share issued in registered form shall not be
valid until an authorized signatory of the Transfer Agent manually countersigns
such Global Preference Share.  The signature shall be conclusive evidence that
such Global Preference Share has been authenticated under this Certificate of
Designation.  Each Global Preference Share shall be dated the date of its
authentication.

 

SECTION 10.3  Registration; Transfer.  Notwithstanding any provision to the
contrary herein, so long as a Global Preference Share remains outstanding and is
held by or on behalf of the Depositary, transfers of a Global Preference Share,
in whole or in part, or of any beneficial interest therein, shall only be made
in accordance with this Section 10.  Transfers of a Global

 

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Preference Share shall be limited to transfers of such Global Preference Share
in whole, but not in part, to nominees of the Depositary or to a successor of
the Depositary or such successor’s nominee.

 

ARTICLE 11

 

DEFINITIONS

 

SECTION 11.1  Definitions.  As used herein, the following terms shall have the
following meanings:

 

“Affiliate” of any specified Person means (a) any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person; or (b) any other Person that owns, directly
or indirectly, 10% or more of such specified Person’s voting power; or (c) any
Person who is a director or officer of (i) such Person, (ii) any Subsidiary of
such Person; or (iii) any Person described in clauses (a) or (b).  For purposes
of this definition, “control” (including, with correlative meanings, the terms
“controlling,” “controlled by” and “under common control with”), as used with
respect to any Person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by agreement or
otherwise.

 

“Aggregate Dividend Preference” as to any Preference Share means, as of any
date:  (a) the Accrued Liquidation Preference, plus (b) accrued and unpaid
Preference Dividends, minus (c) the aggregate Base Amounts of any special
dividends paid pursuant to Section 4.2(b).

 

“Aggregate Preference Amount” as to any Preference Share means, as of any date: 
(a) the Accrued Liquidation Preference, plus (b) after an Insolvency Event,
accrued and unpaid Preference Dividends added to the Liquidation Preference in
accordance with Section 4.1, minus (c) after an Insolvency Event, the aggregate
Base Amounts of any special dividends paid pursuant to Section 4.2(b).

 

“Business Day” means a day other than a Saturday, Sunday or other day on which
banking institutions in the State of New York are authorized or required by law
to close.

 

“Class A Ordinary Share” means the Class A Ordinary Shares of the Company, par
value US$0.01 per share.

 

“Class B Ordinary Share” means the Class B Ordinary Shares of the Company, par
value US$0.01 per share.

 

“Companies Acts” means the Companies Acts, 1963 to 2005 and Parts 2 and 3 of the
Investment Funds, Companies and Miscellaneous Provisions Act 2006, the Companies
(Amendment) Act 2009 and the Companies (Miscellaneous Provisions) Act 2009, all
enactments which are to be read as one with, or construed or read together as
one with, the Companies Acts and every statutory modification and re-enactment
thereof for the time being in force.

 

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“Conversion Price” for a Preference Share means, as of any date, the Aggregate
Preference Amount for such Preference Share divided by the Conversion Rate for
such Preference Share in effect on such date.

 

“Conversion Rate” means:  (i) with respect to Series A Preference Shares, 50.0
Conversion Shares for each Series A Preference Share, initially; and (ii) 25.0
Conversion Shares for each Series B Preference Share, initially, in each case as
adjusted pursuant to Section 6.2.

 

“Conversion Shares” means:  (a) with respect to the Series A Preference Shares,
the Class A Ordinary Shares (or any securities into which Class A Ordinary
Shares have been reclassified or converted) issuable upon conversion of such
Series A Preference Shares from time to time and (b) with respect to the
Series B Preference Shares, the Class B Ordinary Shares (or any securities into
which Class B Ordinary Shares have been reclassified or converted) issuable upon
conversion of such Series B Preference Shares from time to time.

 

“Depositary” means The Depository Trust Company, New York, New York or a
successor depositary appointed by the Company.

 

“Dividend Payment Date” means June 30 and December 31 of each year beginning
June 30, 2015.

 

“Dividend Record Date” means June 15 and December 15 of each year beginning
June 15, 2015.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Holder” means a Person in whose name any outstanding Preference Shares are
registered in the register for the applicable series of Preference Shares.

 

“Insolvency Event” means the commencement of any voluntary or involuntary
liquidation, dissolution or winding up of the Company but for these purposes
neither the sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Company nor the consolidation or merger of the Company with or
into one or more companies will be deemed to be a liquidation, dissolution or
winding-up of the Company.

 

“Issue Date” with respect to a Preference Share means the date on which such
Preference Share is originally issued.

 

“Liquidation Accrual Date” means June 30 and December 31 of each year; provided,
that December 31, 2014 shall be the last such date.

 

“Ordinary Share” means all shares of share capital of the Company, whether or
not denominated as “Ordinary Share,” which are entitled to share ratably in the
ordinary dividends of the Company or share ratably in the proceeds of any
liquidation of the Company after the payment of all preferential claims, and
shall include, without limitation, all Class A Ordinary Shares and all Class B
Ordinary Shares, but exclude the Series A Preference Shares, Series B Preference
Shares and any other preference share.

 

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“Person” means any individual, Company, partnership, limited liability company,
joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.

 

“Redemption Price” means an amount equal to the Aggregate Preference Amount per
Preference Share being redeemed, plus an amount equal to any accumulated and
unpaid Preference Dividends (whether or not declared), thereon to, but
excluding, the Redemption Date; provided, that if the Redemption Date shall
occur after a Dividend Record Date and before the related Dividend Payment Date,
the Redemption Price shall be only an amount equal to the Aggregate Preference
Amount per Preference Share being redeemed and will not include any amount in
respect of dividends declared and payable on such corresponding Dividend Payment
Date.

 

“share capital” means:

 

(a)           in the case of a company, share capital;

 

(b)           in the case of a corporation, capital stock;

 

(c)           in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and

 

(d)           in the case of an association or other business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of capital stock.

 

“Subsidiary” means, with respect to any Person:

 

(a)           any Company, association or other business entity of which more
than 50% of the total voting power of shares of share capital entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of that Person (or a combination thereof); and

 

(b)           any partnership (i) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person, or
(ii) the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).

 

Unless otherwise specified, “Subsidiary” refers to a Subsidiary of the Company.

 

SECTION 11.2  Rules of Construction.  For the purposes of this Certificate of
Designation (a) words in the singular shall be held to include the plural and
vice versa and words of one gender shall be held to include the other gender as
the context requires, (b) the word “including” and words of similar import shall
mean “including, without limitation,” (c) a capitalized word has the meaning
assigned to it, (d) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles in
the United States of America as in effect from time to time, and (e) “or” is not
exclusive.

 

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IN WITNESS WHEREOF, TBS International plc has caused this Certificate of
Designation, as amended, to be signed by Tara C. DeMakes, its Assistant
Corporate Secretary, on the date and year first above written.

 

 

 

TBS INTERNATIONAL PLC

 

 

 

 

 

/s/ Tara DeMakes

 

 

 

Name:

Tara C. DeMakes

 

Title:

Assistant Corporate Secretary

 

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Exhibit A

 

Global Shares Legend

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO. HAS AN INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE CERTIFICATE
OF DESIGNATIONS REFERRED TO BELOW.

 

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH REGISTRAR AND
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS.

 

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