TBS INTERNATIONAL LIMITED & SUBSIDIARIES                EXHIBIT 10.2
 
 

Date: as of March 23, 2009
 
BEDFORD MARITIME CORP.
BRIGHTON MARITIME CORP.
HARI MARITIME CORP.
PROSPECT NAVIGATION CORP.
HANCOCK NAVIGATION CORP
COLUMBUS MARITIME CORP.
and
WHITEHALL MARINE TRANSPORT CORP.,
as joint and several Borrowers
 
TBS INTERNATIONAL LIMITED,
as Guarantor
 
DVB GROUP MERCHANT BANK (ASIA) LTD.,
as Lender
 
DVB GROUP MERCHANT BANK (ASIA) LTD.,
as Facility Agent and Security Trustee
 
-and-
 
DVB BANK SE
THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND
and
NATIXIS,
as Swap Banks

_______________________________________________________

FIRST AMENDATORY AGREEMENT
______________________________________________________

Amending and Supplementing the Loan Agreement dated as of January 16, 2008

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

FIRST AMENDATORY AGREEMENT dated as of March 23, 2009 (this “Agreement”)

AMONG

(1)  
BEDFORD MARITIME CORP., BRIGHTON MARITIME CORP., HARI MARITIME CORP., PROSPECT
NAVIGATION CORP., HANCOCK NAVIGATION CORP., COLUMBUS MARITIME CORP. and
WHITEHALL MARINE TRANSPORT CORP., each a corporation organized and existing
under the law of the Republic of The Marshall Islands, as joint and several
borrowers (each, a “Borrower” and together, the “Borrowers”);

 
(2)  
TBS INTERNATIONAL LIMITED, a company organized and existing under the law of
Bermuda, as guarantor (the “Guarantor”);

 
(3)  
DVB GROUP MERCHANT BANK (ASIA) LTD., acting through its office at 77 Robinson
Road 30-02, Singapore, as lender (in such capacity, the “Lender”);

 
(4)  
DVB GROUP MERCHANT BANK (ASIA) LTD., acting through its office at 77 Robinson
Road 30-02, Singapore, as facility agent (in such capacity, the “Facility
Agent”) for the Lender and as security trustee (in such capacity, the “Security
Trustee”) for the Lender and the Swap Banks; and

 
(5)  
DVB BANK SE (formerly DVB Bank AG), acting through its office at
Friedrich-Ebert-Anlage 2-14, 600325 Frankfurt am Main, Federal Republic of
Germany, THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND, acting through its
office at Head Office, Building A3, Lower Baggot Street, Dublin 2, Ireland, and
NATIXIS, acting through its office at BP 4 - F-75060, Paris Cedex 02, France, as
swap banks (each, a “Swap Bank” and together, the “Swap Banks”).

 
WITNESSETH THAT:

WHEREAS, the Borrowers, the Guarantors, the Lender, the Facility Agent, the
Security Trustee, the Swap Banks and others are parties to a loan agreement
dated as of January 16, 2008 (the “Loan Agreement”);

WHEREAS, as of the date hereof the Borrowers are in breach of the Collateral
Maintenance Ratio required by Clause 10.3(a) of the Loan Agreement; and

WHEREAS, upon the terms and conditions stated herein, the parties hereto have
agreed pursuant to Clause 19.1(b) of the Loan Agreement to:

(a)
waive the Borrowers’ breach of the Collateral Maintenance Ratio required by
Clause 10.3(a) of the Loan Agreement;

(b)  
amend certain terms of the Loan Agreement; and

(c)  
waive the requirements of Clauses 10.1(x) and 10.3(a) of the Loan Agreement with
effect on and from the Effective Date (as defined below) until 12:00 am on
January 1, 2010.

NOW, THEREFORE, in consideration of the premises set forth above, the covenants
and agreements hereinafter set forth, and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:

1  
DEFINITIONS

1.1  
Defined terms.  Capitalized terms used but not defined herein shall have the
meaning assigned such terms in the Loan Agreement.  In addition:

“Effective Date” means the first date on which all of the conditions precedent
set forth in Clause 4.1 below have been satisfied or waived by the Facility
Agent; and

“Extraordinary Prepayment” means a prepayment by the Borrower in the amount of
$9,784,000 to be applied solely to the prepayment in full of the repayment
installments due on October 23, 2009 and January 23, 2010 under Clause 7.1 of
the Loan Agreement, which Extraordinary Prepayment shall not effect the amount
or timing of the remaining repayment installments due under Clause 7.1 of the
Loan Agreement.

2  
BREACH AND WAIVER; EXTRAORDINARY PREPAYMENT

 
2.1  
Breach of Clause 10.3(a).  The Obligors acknowledge and agree that, since
February 20, 2009 and as of the date of this Agreement, the Borrowers have been
and are in breach of the Collateral Maintenance Ratio required by Clause 10.3(a)
of the Loan Agreement.

 
2.2  
Waiver of breach.  Pursuant to Clause 19.1(b) of the Loan Agreement, subject to
the terms and conditions of Clauses 2.3 and 2.4 hereof the Credit Parties waive,
as of the Effective Date but with effect from February 20, 2009, the Obligors’
breach of the Collateral Maintenance Ratio required by Clause 10.3(a) of the
Loan Agreement.

 
2.3  
Extraordinary Prepayment.  In consideration of the waiver granted in Clause 2.2
above, the Borrowers hereby agree to make the Extraordinary Prepayment on or
before March 31, 2009.  In connection with such Extraordinary Prepayment, it
shall not be necessary for the Borrowers to comply with Clauses 7.4(a), 7.4(b),
7.8(c) and 7.9 of the Loan Agreement.

 
2.4  
Failure to make Extraordinary Prepayment.  If the Borrowers fail to make the
Extraordinary Prepayment as required by Clause 2.3 above, the Obligors
acknowledge and agree that the waiver made in Clause 2.2 hereof and the
amendments made in Clause 3 hereof shall be null, void and of no effect
whatsoever and that the Credit Parties shall be entitled to all rights and to
exercise all remedies afforded to them under the terms of the Loan Agreement
(all of which are expressly reserved) as if (a) such waiver had not been made
and (b) the Loan Agreement had not been amended by this Agreement.

 
3  
AMENDMENTS AND WAIVERS

 
3.1  
Amendments.  Pursuant to Clause 19.1(b) of the Loan Agreement, the parties
hereto agree to amend the Loan Agreement as follows with effect on and from the
Effective Date:

(a)  
The definition of “Margin” in Clause 1.1 is amended and restated to read as
follows:

““Margin” means 4.00 percent per annum;”

(b)  
The definition of “TBS Credit Facility” in Clause 1.1 is amended and restated to
read as follows:

““Bank of America Credit Facility” means the Credit Agreement dated July 31,
2006, as amended or supplemented from time to time, among the Guarantor and
certain of its subsidiaries as borrowers, Bank of America, N.A., as
Administrative Agent and a Lender, Citibank, N.A., as Syndication Agent and a
Lender, Westlb AG New York Branch, as Documentation Agent and a Lender, Keybank,
N.A. as a Lender, LaSalle Bank, National Association, as a Lender, North Fork
Business Capital Corporation, as a Lender, and Webster Bank National
Association, as a Lender, upon the terms and conditions of which a $140.0
million credit facility was made available to the Guarantor and certain of its
subsidiaries;”

(c)  
The definition of “TBS Credit Facility Financial Covenants” in Clause 1.1 is
amended and restated to read as follows:

““Bank of America Credit Facility Financial Covenants” means the covenants
stated in Section 7.13 of the Bank of America Credit Agreement;”

(d)  
The following definition is added to Clause 1.1:

“RBS Credit Facility” means the Loan Agreement dated March 29, 2007, as amended
or supplemented from time to time, among Argyle Maritime Corp., Caton Maritime
Corp., Dorchester Maritime Corp., Longwoods Maritime Corp., McHenry Maritime
Corp. and Sunswyck Maritime Corp. as Borrowers, the Banks and Financial
Institutions listed in Schedule 1 thereto as Lenders, The Royal Bank of Scotland
plc as Mandated Lead Arranger and The Royal Bank of Scotland plc as Bookrunner,
Agent, Security Trustee and Swap Bank, upon the terms and conditions of which a
$150.0 million credit facility was made available to such Borrowers;”

(e)  
Clause 5.1 is amended and restated to read as follows:

“Duration of normal Interest Periods.  Each Interest Period in relation to the
Outstanding Indebtedness shall be 3 months.”
 
(f)  
Clause 10.2(h) is amended and restated to read as follows:

 
“(i)
none of the Borrowers shall incur any Financial Indebtedness other than (A) the
Loan, (B) in the usual course of business, (C) as permitted by the Finance
Documents and (D) Financial Indebtedness that is fully subordinated to the Loan;

 
(ii)
from March 23, 2009 until 12:00 am on January 1, 2010, the Guarantor shall not,
on a consolidated basis, incur any Financial Indebtedness other than (1) the
Loan, (2) in the usual course of business, (3) pursuant to the Bank of America
Credit Facility, (4) pursuant to the RBS Credit Facility and (5) Financial
Indebtedness that is fully subordinated to the Guarantor’s obligations under
Clause 21 of the Loan Agreement;”

(g)  
Clause 10.2(i) is amended and restated to read as follows:

 
“(i)
(A) from March 23, 2009 until 12:00 am on January 1, 2010 or (B) at any time
thereafter if an Event of Default shall have occurred and so long as such Event
of Default shall be continuing, the Guarantor shall not declare or pay any
dividends or return any capital to any equity holder or authorize or make any
other distribution, payment or delivery of property or cash to any equity holder
as such, or redeem, retire, purchase or otherwise acquire, directly or
indirectly, for value, any share of any class of its capital stock or other form
of equity interest (or require any rights, options or warrants relating thereto
but not including convertible debt) now or hereafter outstanding or set aside
any funds for any of the foregoing purposes; and as of the date immediately
preceding the date on which the Guarantor is able to declare, pay, return,
authorize, make, redeem, retire, purchase, acquire or otherwise do any of the
foregoing, the Guarantor shall establish to the satisfaction of the Facility
Agent that no Event of Default has occurred and is continuing or would occur
from declaring, paying, returning, authorizing, making, redeeming, retiring,
purchasing, acquiring or otherwise doing any of the foregoing;

 
(ii)
if an Event of Default shall have occurred and so long as such Event of Default
shall be continuing, none of the Borrowers shall declare or pay any dividends or
return any capital to any equity holder or authorize or make any other
distribution, payment or delivery of property or cash to any equity holder as
such, or redeem, retire, purchase or otherwise acquire, directly or indirectly,
for value, any share of any class of its capital stock or other form of equity
interest (or require any rights, options or warrants relating thereto but not
including convertible debt) now or hereafter outstanding, or repay any
subordinated loans or set aside any funds for any of the foregoing purposes;”

3.2  
Waivers.  Pursuant to Clause 19.1(b) of the Loan Agreement, the Credit Parties
agree to waive the requirements of Clauses 10.1(x) and 10.3(a) of the Loan
Agreement with effect on and from the Effective Date until 12:00 am on January
1, 2010, provided that the Guarantor shall maintain the following between the
Effective Date and 12:00 am on January 1, 2010 (and for the avoidance of doubt
the requirements of Clauses 10.1(x) and 10.3(a) of the Loan Agreement shall be
reinstated at 12:01 am on January 1, 2010 and shall be effective at all times
thereafter):

(a)  
at all times, cash and Cash Equivalents of not less than $40,000,000, to be
tested on the last day of each month; and

(b)  
a Consolidated Interest Charges Coverage Ratio of not less than 1.10 to 1.00 at
June 30, 2009, 1.35 to 1.00 at September 30, 2009 and 1.75 to 1.00 at December
31, 2009.

For purposes of (a) and (b) above:

“Attributable Indebtedness” means, on any date:

(i)  
in respect of any Capitalized Lease of any person, the capitalized amount
thereof that would appear on a balance sheet of such person prepared as of such
date in accordance with GAAP;

(ii)  
in respect of any Synthetic Lease Obligation, the capitalized amount of the
remaining lease or similar payments under the relevant lease or other applicable
agreement or instrument that would appear on a balance sheet of such person
prepared as of such date in accordance with GAAP if such lease or other
agreement or instrument were accounted for as a Capitalized Lease; and

(iii)  
all Synthetic Debt of such person.

“Capitalized Leases” means all leases that have been or should be, in accordance
with GAAP, recorded as capitalized leases.

“Cash Equivalents” means any of the following types of Investments, to the
extent owned by the Guarantor or any of its Subsidiaries free and clear of all
Security Interests (other than Security Interests created under the Finance
Documents and other Security Interests permitted hereunder):
 
(i)  
readily marketable obligations issued or directly and fully guaranteed or
insured by the United States of America or any agency or instrumentality thereof
having maturities of not more than 360 days from the date of acquisition
thereof; provided that the full faith and credit of the United States of America
is pledged in support thereof;

 
(ii)  
time deposits with, or insured certificates of deposit or bankers’ acceptances
of, any commercial bank that (1) (A) is a Lender or (B) is organized under the
laws of the United States of America, any state thereof or the District of
Columbia or is the principal banking subsidiary of a bank holding company
organized under the laws of the United States of America, any state thereof or
the District of Columbia, and is a member of the Federal Reserve System, (2)
issues (or the parent of which issues) commercial paper rated as described in
clause (iii) of this definition and (3) has combined capital and surplus of at
least $1,000,000,000, in each case with maturities of not more than 90 days from
the date of acquisition thereof;

 
(iii)  
commercial paper issued by any person organized under the laws of any state of
the United States of America and rated at least “Prime-1” (or the then
equivalent grade) by Moody’s or at least “A-1” (or the then equivalent grade) by
S&P, in each case with maturities of not more than 180 days from the date of
acquisition thereof; and

 
(iv)  
Investments, classified in accordance with GAAP as current assets of the
Guarantor or any of its Subsidiaries, in money market investment programs
registered under the Investment Company Act of 1940, which are administered by
financial institutions that have the highest rating obtainable from either
Moody’s or S&P, and the portfolios of which are limited solely to Investments of
the character, quality and maturity described in clauses (i), (ii) and (iii) of
this definition.

 
“Consolidated EBITDA” means, at any date of determination, an amount equal to
Consolidated Net Income of the Guarantor and its Subsidiaries on a consolidated
basis for the most recently completed Measurement Period, plus 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 Ships as permitted under this Agreement or vessels
as permitted under the Bank of America Credit Facility; and

(v)  
any noncash impairment charges incurred during each fiscal year of the Guarantor
and its Subsidiaries ending December 31, 2008 and December 31, 2009 in respect
of any of the Guarantor’s or its Subsidiaries’ goodwill and vessels (in each
case of or by the Guarantor and its Subsidiaries for such Measurement Period),

minus, to the extent included in calculating such Consolidated Net Income, all
net gains from the sales of Ships as permitted under this Agreement or vessels
as permitted under the Bank of America Credit Facility (in each case of or by
the Guarantor and its Subsidiaries for such Measurement Period), provided that,
to the extent characterized as interest on the income statements of the
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 the Guarantor or any of its Subsidiaries, shall be
excluded.

“Consolidated Interest Charges” means, for any Measurement Period, the sum of:

(i)  
all interest, premium payments, debt discount, fees, charges and related
expenses in connection with borrowed money (including capitalized interest but
excluding capitalized interest on Permitted New Vessel Construction
Indebtedness) or in connection with the deferred purchase price of assets, in
each case to the extent treated as interest in accordance with GAAP;

 
(ii)  
all interest paid or payable with respect to discontinued operations; and

 
(iii)  
the portion of rent expense under Capitalized Leases that is treated as interest
in accordance with GAAP,

 
in each case, of or by the 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 the 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 the Guarantor or any of its Subsidiaries, shall be excluded.
 
“Consolidated Interest Charges Coverage Ratio” means, at any date of
determination, the ratio of (a) the result of (i) Consolidated EBITDA, less (ii)
the sum of Federal, state, local and foreign income taxes paid in cash for the
most recently completed Measurement Period, to (b) Consolidated Interest Charges
for the most recently completed Measurement Period.
 
“Consolidated Net Income” means, at any date of determination, the net income
(or loss) of the Guarantor and its Subsidiaries on a consolidated basis for the
most recently completed Measurement Period; provided that Consolidated Net
Income shall exclude:

(i)  
extraordinary gains and extraordinary losses for such Measurement Period;

 
(ii)  
the net income of any Subsidiary during such Measurement Period to the extent
that the declaration or payment of dividends or similar distributions by such
Subsidiary of such income is not permitted by operation of the terms of its
Organization Documents or any agreement, instrument or Law applicable to such
Subsidiary during such Measurement Period, except that the Guarantor’s equity in
any net loss of any such Subsidiary for such Measurement Period shall be
included in determining Consolidated Net Income; and

 
(iii)  
any income (or loss) for such Measurement Period of such person if such person
is not a Subsidiary,

 
except that the Guarantor’s equity in the net income of any such person for such
Measurement Period shall be included in Consolidated Net Income up to the
aggregate amount of cash actually distributed by such person during such
Measurement Period to the Guarantor or a Subsidiary as a dividend or other
distribution (and in the case of a dividend or other distribution to a
Subsidiary, such Subsidiary is not precluded from further distributing such
amount to Holdings as described in clause (ii) of this proviso).

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

“Equity Interests” means, with respect to any person, all of the shares of
capital stock of (or other ownership or profit interests in) such person, all of
the warrants, options or other rights for the purchase or acquisition from such
person of shares of capital stock of (or other ownership or profit interests in)
such person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such person or
warrants, rights or options for the purchase or acquisition from such person of
such shares (or such other interests), and all of the other ownership or profit
interests in such person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

“Guarantee” means, as to any person, any:

(i)  
any obligation, contingent or otherwise, of such person guaranteeing or having
the economic effect of guaranteeing any Indebtedness or other obligation payable
or performable by another person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such person, direct or
indirect,

(A)  
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation;

(B)  
to purchase or lease property, securities or services for the purpose of
assuring the obligee in respect of such Indebtedness or other obligation of the
payment or performance of such Indebtedness or other obligation;

(C)  
to maintain working capital, equity capital or any other financial statement
condition or liquidity or level of income or cash flow of the primary obligor so
as to enable the primary obligor to pay such Indebtedness or other obligation;

(D)  
entered into for the purpose of assuring in any other manner the obligee in
respect of such Indebtedness or other obligation of the payment or performance
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); or

(ii)  
any Security Interest on any assets of such person securing any Indebtedness or
other obligation of any other person, whether or not such Indebtedness or other
obligation is assumed by such person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Security Interest).

The amount of any Guarantee shall be deemed to be an amount equal to the stated
or determinable amount of the related primary obligation, or portion thereof, in
respect of which such Guarantee is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by the
guaranteeing person in good faith.  The term “Guarantee” as a verb has a
corresponding meaning.

“Indebtedness” means, as to any person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

(i)  
all obligations of such person for borrowed money and all obligations of such
person evidenced by bonds, debentures, notes, loan agreements or other similar
instruments;

(ii)  
the maximum amount of all direct or contingent obligations of such person
arising under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments;

(iii)  
net obligations of such person under any Swap Contract;

(iv)  
all obligations of such person to pay the deferred purchase price of property or
services (other than trade accounts payable in the ordinary course of business
and not past due for more than 60 days after the date on which such trade
account was created);

(v)  
indebtedness (excluding prepaid interest thereon) secured by a Security Interest
on property owned or being purchased by such person (including indebtedness
arising under conditional sales or other title retention agreements), whether or
not such indebtedness shall have been assumed by such person or is limited in
recourse;

(vi)  
all Attributable Indebtedness in respect of Capitalized Leases and Synthetic
Lease Obligations of such person and all Synthetic Debt of such person;

(vii)  
all obligations of such person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Equity Interest in such person or any other
person or any warrant, right or option to acquire such Equity Interest, valued,
in the case of a redeemable preferred interest, at the greater of its voluntary
or involuntary liquidation preference plus accrued and unpaid dividends; and

(viii)  
all Guarantees of such person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such person.  The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date.

“Investment” means, as to any person, any direct or indirect acquisition or
investment by such person, whether by means of (a) the purchase or other
acquisition of Equity Interests of another person, (b) a loan, advance or
capital contribution to, Guarantee or assumption of debt of, or purchase or
other acquisition of any other debt or interest in, another person, (c) the
purchase or other acquisition (in one transaction or a series of transactions)
of assets of another person that constitute a business unit or all or a
substantial part of the business of, such person or (d) the acquisition or
construction of a vessel.  For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.

“Measurement Period” means, at any date of determination, the most recently
completed four fiscal quarters of the Guarantor.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

“Permitted New Vessel Construction Indebtedness” means Indebtedness of
Subsidiaries of the Guarantor that are not parties to the Bank of America Credit
Facility in connection with the construction of multipurpose tweendeck or bulk
carrier shipping vessels.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., and any successor thereto.

“Subsidiary” means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of securities
or other interests having ordinary voting power for the election of directors or
other governing body (other than securities or interests having such power only
by reason of the happening of a contingency) are at the time beneficially owned,
or the management of which is otherwise controlled, directly, or indirectly
through one or more intermediaries, or both, by the Guarantor.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement, including any such
obligations or liabilities under any such master agreement.

“Synthetic Debt” means, with respect to any person as of any date of
determination thereof, all obligations of such person in respect of transactions
entered into by such person that are intended to function primarily as a
borrowing of funds (including any minority interest transactions that function
primarily as a borrowing) but are not otherwise included in the definition of
“Indebtedness” or as a liability on the consolidated balance sheet of such
person and its subsidiaries in accordance with GAAP.

“Synthetic Lease Obligation” means the monetary obligation of a person under (i)
a so-called synthetic, off-balance sheet or tax retention lease, or (ii) an
agreement for the use or possession of property (including sale and leaseback
transactions), in each case, creating obligations that do not appear on the
balance sheet of such person but which, upon the application of any Debtor
Relief Laws to such person, would be characterized as the indebtedness of such
person (without regard to accounting treatment).

3.3  
References.  Each reference in the Loan Agreement to “this Agreement”,
“hereunder”, “hereof”, “herein” or words of like import, and each reference to
the “Loan Agreement” in any of the other Finance Documents, shall mean and refer
to the Loan Agreement as amended hereby.

3.4  
Effect of amendments.  Subject to the terms of this Agreement, with effect on
and from the Effective Date, the Loan Agreement shall be, and shall be deemed by
this Agreement to have been, amended upon the terms and conditions stated herein
and, as so amended, the Loan Agreement shall continue to be binding on each of
the parties to it in accordance with its terms as so amended.  In addition, each
of the Finance Documents shall be, and shall be deemed by this Agreement to have
been, amended as follows:

(a)
the definition of, and references throughout each of such Finance Documents to,
the “Loan Agreement” and any of the other Finance Documents shall be construed
as if the same referred to the Loan Agreement and those Finance Documents as
amended or supplemented by this Agreement; and

 
(b)
by construing references throughout each of the Finance Documents to “this
Agreement”, “hereunder” and other like expressions as if the same referred to
such Finance Documents as amended and supplemented by this Agreement.

3.5  
Finance Documents to remain in full force and effect.  Except as amended hereby,
all terms and conditions of each of the Finance Documents shall remain in full
force and effect and are hereby ratified and confirmed in all respects.  Without
limiting the foregoing, the Guarantor acknowledges and agrees that the Guaranty
remains in full force and effect.

3.6  
No other amendments.  Except as amended hereby, all other terms and conditions
of the Loan Agreement remain unchanged and the Loan Agreement is hereby ratified
and confirmed.

4  
CONDITIONS PRECEDENT

 
4.1  
Conditions precedent.  The conditions precedent are that:

 
(a)           The Facility Agent shall have received:
 
(i)  
an original of this Agreement, duly executed by the parties hereto;

 
(ii)  
a copy of any amendment to the Bank of America Credit Facility duly executed by
the parties thereto, certified as of a date reasonably near the date of this
Agreement by the president or the secretary (or equivalent officer) of the
Guarantor as being a true and correct copy thereof;

 
(iii)  
copies of the constitutional documents, and each amendment thereto, of each
Obligor, certified as of a date reasonably near the date of this Agreement by
the president or the secretary (or equivalent officer) of such party as being a
true and correct copy thereof;

 
(iv)  
copies of certificates dated as of a date reasonably near the date of this
Agreement, certifying that each Obligor is duly incorporated (or formed) and in
goodstanding under the laws of such party’s jurisdiction of incorporation (or
formation) and, in respect of each Borrower, that such Borrower is duly
qualified and in goodstanding as a foreign maritime entity under the law of the
Republic of Liberia;

 
(v)  
copies of resolutions of the directors (or equivalent governing body) (and where
required, the shareholders or equivalent equity holders) of each Obligor
authorizing the execution of each of this Agreement and any documents to be
executed pursuant to this Agreement to which such Obligor is or is to be a party
and authorizing named officers or attorneys-in-fact to execute such documents,
certified as of a date reasonably near the date of this Agreement by the
president or the secretary (or equivalent officer) of such party as being a true
and correct copy thereof;

 
(vi)  
the original of any power of attorney under which this Agreement and any
documents to be executed pursuant to this Agreement is to be executed on behalf
of an Obligor;

 
(vii)  
copies of all consents which any of the Obligors requires to enter into, or make
any payment or perform any of its obligations under or in connection with the
transactions contemplated by this Agreement, each certified as of a date
reasonably near the date of the relevant Drawdown Notice by the president or the
secretary (or equivalent officer) of such party as being a true and correct copy
thereof, or certification by such president or secretary (or equivalent officer)
that no such consents are required;

 
(viii)  
a certificate of each Obligor, signed on behalf of such party by the president
or the secretary (or equivalent officer) of the Guarantor, dated as of a date
reasonably near the date of this Agreement, certifying as to:

 
1.  
the absence of any proceeding for the dissolution or liquidation of such party;

 
2.  
the veracity in all material respects of the representations and warranties
contained in the Loan Agreement as though made on and as of the date of this
Agreement;

 
3.  
the absence of any material misstatement of fact in any information provided by
the Borrowers to the Facility Agent or the Lender or the Swap Banks since the
date of the Loan Agreement and that such information did not omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and

 
4.  
the absence of any event occurring and continuing, or resulting from this
Agreement, that constitutes a Potential Event of Default or an Event of Default.

 
(ix)  
a duly executed original of an addendum to the Mortgage in respect of each of
the Liberian registered APACHE MAIDEN, Official Number 12146, CHEROKEE PRINCESS,
Official Number 12145, INCA MAIDEN, Official Number 12149, KICKAPOO BELLE,
Official Number 12147, KIOWA PRINCESS, Official Number 12150, NAVAJO PRINCESS,
Official Number 12148, and SENECA MAIDEN, Official Number 12151, each such
addendum to be in form and substance satisfactory to the Facility Agent;

 
(x)  
documentary evidence that the relevant Mortgage addendum has been duly recorded
according to the laws of the Republic of Liberia and, if required by Philippine
law, that a cautionary notice with respect to such Mortgage addendum has been
filed in the Philippine Bareboat Registry;

 
(xi)  
a favorable opinion of Cardillo & Corbett, New York, Liberian and Marshall
Islands counsel to the Borrowers, in form, scope and substance satisfactory to
the Credit Parties;

 
(xii)  
a favorable opinion of Conyers Dill & Pearman, Bermuda counsel to the Guarantor,
in form, scope and substance satisfactory to the Credit Parties; and

 
(xiii)  
if a cautionary notice with respect to each Mortgage addendum must be filed in
the Philippine Bareboat Registry, a favorable opinion of Sycip, Salazar,
Hernandez & Gatmaitman, Philippine counsel to the Credit Parties, in form, scope
and substance satisfactory to the Credit Parties;

 
(b)  
No Event of Default or Potential Event of Default shall have occurred and be
continuing and there shall have been no material adverse change in the financial
condition, operations or business prospects of the Obligors since the date of
the Loan Agreement; and

(c)  
On or before the Effective Date, the Obligors shall have paid to the Facility
Agent an amendment fee of $179,320.00.

4.2
Waiver.  The Facility Agent, with the consent of the Lender and the Swap Banks,
may waive one or more of the conditions referred to in Clause 4.1 provided that
the Obligors deliver to the Facility Agent a written undertaking to satisfy such
conditions within ten (10) Business Days after the Facility Agent grants such
waiver (or such longer period as the Facility Agent may specify).

5  
MISCELLANEOUS

 
5.1  
Governing Law.  This Agreement and the rights and obligations of the parties
hereunder shall be governed by, and construed in accordance with, the laws of
the State of New York.

 
5.2  
Counterparts.  This Agreement may be executed in any number of counterparts, all
of which taken together shall constitute one and the same instrument.

 
5.3  
Severability.  Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating or
affecting the validity or enforceability of such provision in any other
jurisdiction.

 
5.4  
Payment of Expenses.  The Obligors agree to pay or reimburse each of the Credit
Parties for all reasonable expenses in connection with the preparation,
execution and carrying out of this Agreement and any other document in
connection herewith or therewith, including but not limited to, reasonable fees
and expenses of any counsel whom the Credit Parties may deem necessary or
appropriate to retain, any duties, registration fees and other charges and all
other reasonable out-of-pocket expenses incurred by any of the Credit Parties in
connection with the foregoing.

 

[SIGNATURE PAGES FOLLOW]
 
 

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

 

WHEREFORE, the parties hereto have caused this First Amendatory Agreement to be
executed as of the date first above written.

BEDFORD MARITIME CORP., as Borrower
 
 
 
By:     /s/Tara DeMakes
Tara DeMakes
Attorney-in-Fact
 
DVB GROUP MERCHANT BANK (ASIA) LTD., as Lender
 
 
By: /s/ Martijn van Tuyl
    Martijn van Tuyl
    Attorney-in-Fact
 
BRIGHTON MARITIME CORP., as Borrower
 
 
 
By:      /s/Tara DeMakes
Tara DeMakes
Attorney-in-Fact
DVB GROUP MERCHANT BANK (ASIA) LTD., as Facility Agent and Security Trustee
 
 
By:   /s/ Martijn van Tuyl
Martijn van Tuyl
Attorney-in-Fact
 
HARI MARITIME CORP., as Borrower
 
 
By:   /s/Tara DeMakes    
Tara DeMakes
Attorney-in-Fact
 
PROSPECT NAVIGATION CORP., as Borrower
 
 
By:   /s/Tara DeMakes
Tara DeMakes
Attorney-in-Fact
 
THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND, as Swap Bank
 
 
By:     /s/ Paul Packard      
Paul Packard
Head of Maritime Industries
 
 
By: /s/ Kimberly Jones
    Kimberly Jones
Manager
 
HANCOCK NAVIGATION CORP., as Borrower
 
 
By:   /s/Tara DeMakes
Tara DeMakes
Attorney-in-Fact
 
COLUMBUS MARITIME CORP., as Borrower
 
 
By:   /s/Tara DeMakes
Tara DeMakes
Attorney-in-Fact
 
 
NATIXIS, as Swap Bank
 
 
By:  /s/ Michel Degermann
Michel Degermann
Authorized Signatory
 
 
By:  /s/ Franck Chambras
Franck Chambras
Authorized Signatory
 
WHITEHALL MARINE TRANSPORT CORP.,
as Borrower
 
 
By:   /s/Tara DeMakes
Tara DeMakes
Attorney-in-Fact
 
DVB BANK SE, as Swap Bank
 
 
 
By: /s/ Daniel C. Rodgers
Daniel C. Rodgers
Attorney-in-Fact
 
TBS INTERNATIONAL LIMITED, as Guarantor
 
 
By:    /s/Tara DeMakes
Tara DeMakes
Attorney-in-Fact: