Ex-10.12


 


	
  To :

  	
  (1)

  	
  TBS International plc

  	
   

  	
   

  
	
   

  	
   

  	
  Arthur Cox Building

  	
   

  	
   

  
	
   

  	
   

  	
  Earls Fort Terrace

  	
   

  	
   

  
	
   

  	
   

  	
  Dublin 2

  	
   

  	
   

  
	
   

  	
   

  	
  Ireland

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (2)

  	
  Argyle Maritime Corp.

  	
   

  	
   

  
	
   

  	
   

  	
  Caton Maritime Corp.

  	
   

  	
   

  
	
   

  	
   

  	
  Dorchester Maritime Corp.

  	
   

  	
   

  
	
   

  	
   

  	
  Longwoods Maritime Corp.

  	
   

  	
   

  
	
   

  	
   

  	
  McHenry Maritime Corp.

  	
   

  	
   

  
	
   

  	
   

  	
  Sunswyck Maritime Corp.

  	
   

  	
   

  
	
   

  	
   

  	
  c/o Suite 306

  	
   

  	
   

  
	
   

  	
   

  	
  Commerce Building

  	
   

  	
   

  
	
   

  	
   

  	
  1 Chancery Lane

  	
   

  	
   

  
	
   

  	
   

  	
  Hamilton HM12

  	
   

  	
   

  
	
   

  	
   

  	
  Bermuda

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (3)

  	
  TBS International Limited

  	
   

  	
   

  
	
   

  	
   

  	
  Suite 306,

  	
   

  	
   

  
	
   

  	
   

  	
  Commerce Building

  	
   

  	
   

  
	
   

  	
   

  	
  1 Chancery Lane

  	
   

  	
   

  
	
   

  	
   

  	
  Hamilton HM12

  	
   

  	
   

  
	
   

  	
   

  	
  Bermuda

  	
   

  	
  30 September 2010

  



 


Dear Sirs


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


	
   

  	
  Yours
  faithfully

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  The
  Royal Bank of Scotland plc

  	
   

  
	
   

  	
  /s/
  Jon A. Charette

  	
   

  
	
   

  	
  Jon
  A. Charette

  	
   

  
	
   

  	
  Senior
  Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted and agreed

  	
   

  	
   

  
	
  for and on behalf of

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TBS International Limited

  	
   

  	
   

  
	
  (as Corporate Guarantor)

  	
   

  	
   

  
	
  /s/ Ferdinand V. Lepere

  	
   

  	
   

  
					



 


 


For and on behalf of


 

















 


	
  Argyle Maritime Corp.

  	
   

  
	
  Caton Maritime Corp.

  	
   

  
	
  Dorchester Maritime Corp.

  	
   

  
	
  Longwoods Maritime Corp.

  	
   

  
	
  McHenry Maritime Corp.

  	
   

  
	
  Sunswyck Maritime Corp.

  	
   

  
	
  /s/ Ferdinand V. Lepere

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
   

  	
   

  
	
  TBS International plc

  	
   

  
	
  (as New Corporate Guarantor)

  	
   

  
	
  /s/ Ferdinand V. Lepere

  	
   

  



 

















 


Appendix
I


 


TBS
Request Letter


 

















 


September 24, 2010


 


The Royal Bank of Scotland plc


Shipping Business Center


5-10 Great Tower Street


London EC3P 3HX


Fax: No:+44 207 085 7142


Attn: Transaction and Portfolio Management


 


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


 


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


 


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


 


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


 


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


 


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left blank]


 

















 


	
   

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TBS International plc

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Ferdinand V. Lepere

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Ferdinand V. Lepere

  
	
   

  	
   

  	
    Title:

  	
  Senior Executive Vice
  President Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Acknowledged and Agreed.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The Royal Bank of Scotland plc, 

  	
   

  	
   

  	
   

  
	
  as Agent and Lender

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  



 


 


	
   

  	
  , as Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
  Name:

  
	
   

  	
  Title:

  	
   

  
						



 

















 


Schedule 1


 


	
  Facility

  	
   

  	
  Principal Amount

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

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

  	
   

  	
  $

  	
  9,500,000

  	
   

  	
  September 30, 2010

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AIG
  Facility dated as of December 7, 2007

  	
   

  	
  $

  	
  1,800,000

  	
   

  	
  October 1, 2010

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commerzbank
  AG Facility dated as of May 28, 2008

  	
   

  	
  $

  	
  1,000,000

  	
   

  	
  October 1, 2010

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DVB
  Facility dated as of January 16, 2008

  	
   

  	
  $

  	
  2,600,000

  	
   

  	
  October 23, 2010

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Credit
  Suisse dated as of December 7, 2007

  	
   

  	
  $

  	
  400,000

  	
   

  	
  November 12, 2010

  	
   

  



 

















 


Appendix
II


 


Financial
Advisor


 


1.              J. Alix Partners


 


2.              Blackstone


 


3.              FTI Consulting


 


4.              Zolfo Cooper


 


5.              Alvarez & Marsal


 


6.              Miller Buckfire