ex-10_2.htm


    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: