Exhibit 10.12

 

To :                           (1)                                  TBS
International plc

Arthur Cox Building

Earls Fort Terrace

Dublin 2

Ireland

 

(2)                                  Argyle Maritime Corp.

Caton Maritime Corp.

Dorchester Maritime Corp.

Longwoods Maritime Corp.

McHenry Maritime Corp.

Sunswyck Maritime Corp.

c/o Suite 306

Commerce Building

1 Chancery Lane

Hamilton HM12

Bermuda

 

(3)                                  TBS International Limited

Suite 306,

Commerce Building

1 Chancery Lane

Hamilton HM12

Bermuda

November 2010

 

Dear Sirs

 

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

 

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

 

We refer to:-

 

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

 

2                                         our letter to you of 30 September 2010
whereby we agreed subject to the conditions therein to waive the Events of
Default specified therein arising under the Master Agreement resulting from the
Payment Suspension;

 

3                                         your notification to us that you wish
to extend the period of the Payment Suspension until 29 December 2010 (the
“Extended Suspension Period”) which will include the suspension of payment of:-

 

TBS - Swap Facility Forbearance Extension (Nov 2010)

 

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(a)                                  the repayment of principal instalments each
in the amount of $417,500 which are scheduled due under the Loan Facility on 1
December 2010, 9 December 2010 and 23 December 2010; and

 

(b)                                 the repayment of principal instalments which
are scheduled due under the other credit facilities (“Other Credit Facilities”)
to the New Corporate Guarantor or subsidiaries of the New Corporate Guarantee as
set out in the schedule hereto.

 

(A)                              Should you decide not to pay the principal
instalments falling due under the Loan Facility and the Other Credit Facilities
during the Extended Suspension Period and you request the forbearance of your
lenders and swap providers (the “Creditors”) to them exercising their rights
under the respective facilities and swap arrangements arising from the
corresponding payment default under the Loan Facility and Other Credit
Facilities, we confirm as Party A under the Master Agreement our agreement not
to exercise during the Extended Suspension Period any of our rights or remedies
under the Master Agreement and the Credit Support Documents arising from the
Events of Default due to such payment default and Extended Suspension Period
under Clauses 5(a)(iii)(1) and 5(a)(vi) of the Master Agreement subject to the
following conditions:

 

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

 

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

 

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

 

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

 

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

 

3.                                       J Alix Partners to continue as
financial adviser to the New Corporate Guarantor and Corporate Guarantor until
otherwise agreed in writing by us as Party A under the Master Agreement.  Should
J Alix Partners terminate their existing involvement with the New Corporate
Guarantor and Corporate Guarantor an alternative financial advisor, satisfactory
us as Party A under the Master Agreement, shall be appointed within 5 business
days of J Alix Partners advising termination of their contract with the New
Corporate Guarantor and Corporate Guarantor.  The newly appointed financial
advisor shall continue to assist the New Corporate Guarantor and Corporate
Guarantor until otherwise agreed in writing by us as Party A under the Master
Agreement;

 

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4.                                     the Borrowers, the Corporate Guarantor
and the New Corporate Guarantor to continue negotiations in good faith for the
restructuring of the Loan Facility and Other Credit Facilities until the payment
of principal instalments under the Loan Facility and Other Credit Facilities
have been resumed to the satisfaction of the Lenders (as defined in the Loan
Agreement) and the other Creditors; and;

 

5.                                       the New Corporate Guarantor and its
subsidiaries shall not agree with the other Creditors any more favourable terms
in relation to their consent or forbearance than those agreed with us as Party A
under the Master Agreement.

 

In the event that any of the conditions referred to in (A) above are not
fulfilled, or if the covenants in (B) above are not fulfilled, the forbearance
against the exercise of our rights and remedies arising from the Events of
Default specified in (A) shall cease to be effective or shall terminate as the
case may be and we as Party A under the Master Agreement shall remain entitled
to exercise our rights under the Master Agreement and Credit Support Documents
arising from such Events of Default.  Furthermore we reserve all our rights and
remedies under the Master Agreement and Credit Support Documents in respect of
any other Events of Default which may arise or have arisen.

 

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

 

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

 

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

 

 

Yours faithfully

 

 

 

 

 

The Royal Bank of Scotland plc

 

 

/s/ Jon A. Charette

 

 

Jon A. Charatte

 

 

Senior Vice President

 

 

 

Accepted and agreed

for and on behalf of

 

TBS International Limited

 

(as Corporate Guarantor)

 

/s/ Ferdinand V. Lepere

 

 

 

 

 

For and on behalf of

 

 

 

Argyle Maritime Corp.

 

Caton Maritime Corp.

 

Dorchester Maritime Corp.

 

Longwoods Maritime Corp.

 

McHenry Maritime Corp.

 

Sunswyck Maritime Corp.

 

/s/ Ferdinand V. Lepere

 

 

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For and on behalf of

 

 

 

TBS International plc

 

(as New Corporate Guarantor)

 

/s/ Ferdinand V. Lepere

 

 

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Schedule

 

Facility

 

Principal Amount

 

Date

 

 

 

 

 

Royal Bank of Scotland plc Term Loan Facility dated as of March 29, 2007 (as
amended from time to time thereafter)

 

$

417,500

 

December 1, 2010

 

$

417,500

 

December 9, 2010

 

$

417,500

 

December 23, 2010

 

 

 

 

 

Credit Suisse AG Loan Agreement dated as of December 7, 2007 (as amended)

 

$

437,000

 

November 19, 2010

 

$

437,000

 

December 13, 2010

 

 

 

 

 

Joh. Berenberg, Gossler & Co. KG Loan Agreement dated as of June 19, 2008 (as
amended)

 

$

812,500

 

December 22, 2010

 

 

 

 

 

Commerzbank AG dated as of May 28, 2008 (as amended)

 

$

1,000,000

 

December 2, 2010

 

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