Exhibit 10.5


 


November 12, 2010


 


AIG
Commercial Equipment Finance, Inc.


5700
Granite Parkway, Suite 850


Plano,
Texas 75024


 


RE:                              Extension of Forbearance
Period in connection with Specified Events of Default under that certain Loan
Agreement dated February 29, 2008 by and among AIG Commercial Equipment
Finance, Inc., Amoros Maritime Corp., Lancaster Maritime Corp., Chatham
Maritime Corp. and the guarantors party thereto (as amended, the “Loan Agreement”).


 


Reference
is hereby made to (i) the Loan Agreement and (ii) the Letter
Agreement dated as of September 30, 2010 (the “Forbearance Letter”)
whereby you agreed subject to the conditions therein to forbear from exercising
any of the rights or remedies arising from the Specified Events of Default as
provided therein.  Capitalized terms
defined in the Loan Agreement, the Forbearance Letter or the Notes (as defined
in the Loan Agreement) and not otherwise defined herein are used herein as
therein defined, as applicable.


 


In
order to allow time for TBS International public limited company and its
affiliates to work with their various lenders, including you, towards a
mutually agreeable solution on their outstanding indebtedness, we hereby
request that, subject to the conditions and other provisions in this letter,
you extend the period under which you agree to forbear from exercising any of
the rights or remedies arising solely from the Specified Events of Default
available to you under the Loan Agreement, other transaction documents or under
applicable law (all of which rights and remedies are hereby expressly reserved
by you and may be immediately exercised by you upon the expiration or
termination of the Forbearance Extension Period) until the earlier of (i) the
occurrence of a Forbearance Termination Event (which shall include, without
limitation, the occurrence of a breach by TBS International public limited
company or any of its affiliates of any of their obligations under this letter)
and (ii) December 29, 2010 (the “Forbearance Extension Period”).  TBS International public limited company and
its affiliates acknowledge and agree that a late charge equal to 5% of the
past-due principal under the Loan Agreement is owing, and that interest has
been accruing on the outstanding principal balance of each Note at the Default
Rate since October 12, 2010 and will continue to accrue at the Default
Rate.


 


In
connection with and as a condition precedent to your agreement hereunder, TBS
International public limited company agrees to pay a non-refundable forbearance
fee to you on or before November 19, 2010 in an amount of 0.05% of the
total outstanding loan amount under the Loan Agreement.  In connection with your agreement hereunder,
TBS International public limited 


 

















 


company
and its affiliates also agree to work diligently and use commercially
reasonable efforts to deliver to you on or before November 29, 2010 a
letter of intent from the major stockholders of TBS International public
limited company with respect to an equity investment in TBS International
public limited company and its affiliates in an amount, on terms and subject to
conditions acceptable to you.


 


By
counter-signing this letter, you agree


 


(i)                                     at all times
hereafter, the following minimum cash liquidity covenant shall replace the
existing minimum cash liquidity covenant contained in Section 6.10(b) of
the Loan Agreement:


 


“For each calendar week, the aggregate daily closing balance of
Qualified Cash owned by Parent Guarantor and its Subsidiaries shall not be less
than $15,000,000 on the last business day of any week or on average in any
week, of which a minimum average balance of $5,625,000 must be deposited with
Bank of America, N.A. and of which a minimum balance of $5,000,000 (excluding
any restricted cash) must be deposited with The Royal Bank of Scotland PLC”


 


;
and


 


(ii)                                  subject to the
conditions and other provisions in this letter, to forbear from exercising any
of the rights or remedies arising solely from the Specified Events of Default
(which shall include, in addition to those identified in the Forbearance
Letter, defaults arising from the suspension of payments by TBS International
public limited company and its affiliates of certain scheduled principal
installments owing in respect of Indebtedness of such persons during the
Forbearance Extension Period, as more particularly described on Schedule 1
hereto) on the terms set forth in the Forbearance Letter, as modified by the
terms above.


 


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  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TBS INTERNATIONAL PUBLIC LIMITED COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ferdinand V. Lepere

  
	
   

  	
   

  	
  Name:
  Ferdinand V. Lepere

  
	
   

  	
   

  	
  Title: Senior Executive Vice President and Chief
  Financial Officer

  



 


Acknowledged
and Agreed provided and conditioned that all of the lenders identified on the
attached Schedule 1, and all of the lenders identified on Schedule 1 attached
to the Forbearance Letter, have also countersigned on or before November 15,
2010 a forbearance letter agreement containing the same terms as this letter
agreement, and with no other lender receiving more favorable terms than you are
receiving under this letter and the Forbearance Letter:


 


AIG
COMMERCIAL EQUIPMENT FINANCE, INC.


 


	
  By:

  	
  /s/ Joe Gensor

  	
   

  
	
   

  	
  Name: Joe Gensor

  	
   

  
	
   

  	
  Title:Vice President

  	
   

  



 


[SIGNATURE
PAGE TO AIG EXTENDED FORBEARANCE LETTER ]


 

















 


Schedule 1


 


	
  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 Loan
  Agreement dated as of May 28, 2008 (as amended)

  	
   

  	
  $

  	
  1,000,000

  	
   

  	
  December 2, 2010

  



 


[SIGNATURE PAGE TO AIG
EXTENDED FORBEARANCE LETTER ]