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)


 

















 


(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;


 

















 


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

  	
   

  



 

















 


	
  For and on behalf of

  	
   

  
	
   

  	
   

  
	
  TBS International plc

  	
   

  
	
  (as New Corporate Guarantor)

  	
   

  
	
  /s/ Ferdinand V. Lepere

  	
   

  



 

















 


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