Exhibit 10.11


 


EXECUTION VERSION


 


FIRST AMENDMENT TO FORBEARANCE AGREEMENT


 


dated as of November 15, 2010


 


TBS
International Limited


Commerce
Building, One Chancery Lane


Hamilton
HM 12 Bermuda


 


Re:          First Amendment to Forbearance
Agreement (this “Amendment”)


 


Ladies
and Gentleman:


 


Reference
is hereby made to: (a) those certain extensions of credit made pursuant to
and as evidenced by, inter  alia, that certain Amended and
Restated Credit Agreement, dated as of March 26, 2008 (as amended,
restated, supplemented or otherwise modified and in effect from time to time,
the “Credit Agreement”), among Albemarle Maritime Corp. and each of the
other entities identified on the signature pages thereof as Borrowers, TBS
International plc and TBS International Limited, as guarantors (collectively, “Holdings”),
TBS Shipping Services Inc., as Administrative Borrower, each of the financial
institutions party thereto as lenders, Bank of America, N.A., as Administrative
Agent (the “Administrative Agent”), Citibank, N.A. and DVB Group
Merchant Bank (Asia) Ltd., as co-Syndication Agents, TD Banknorth, N.A., as
Documentation Agent and Banc of America Securities LLC, as Sole Lead Arranger
and Sole Book Manager; (b) those certain interest rate swap transactions
(collectively, the “Transactions”) entered into in connection with and
pursuant to that certain Master Agreement (on the 2002 ISDA form as amended)
dated as of June 28, 2005 (together with the Schedules thereto and the
Confirmations thereunder, and as amended, restated, supplemented or otherwise
modified and in effect from time to time, the “Master Agreement”) among
the Borrowers and TBS International Limited (collectively, the “Swap Parties”
and each a “Swap Party”) and Bank of America, N.A. (“Bank of America”);
and (c) that certain Forbearance Agreement, dated as of September 30,
2010 (as hereby amended, the “Forbearance Agreement”) by and among the
Swap Parties and Bank of America.  All
capitalized terms used herein without definition that are defined in the Master
Agreement or the Forbearance Agreement shall have the same meanings herein as
therein, as applicable.


 


Each
Swap Party acknowledges that the Specified Defaults have occurred and are
continuing.  The Swap Parties agree that,
but for the terms of the Forbearance Agreement, Bank of America may proceed to
enforce its rights and remedies under the Master Agreement.  Each Swap Party acknowledges that the
Forbearance pursuant to the Forbearance Agreement will expire on November 15,
2010 (unless the Forbearance Termination Date occurs prior to such date).  Bank of America and the Swap Parties hereby
agree to amend certain provisions of and extend the period of Forbearance under
the Forbearance Agreement upon the following terms and conditions:


 


§1.  Amendment
to Forbearance Agreement.   Subject to the
satisfaction of the conditions to effectiveness set forth in Section 5 of
this Amendment, Section 4 of the Forbearance Agreement is hereby amended
by deleting the date “November 15, 2010” in clause (i) of the first
sentence thereof and substituting the date “December 29, 2010” in lieu
thereof.


 


§2.  Ratification
of Existing Agreements.   The Swap Parties
confirm and agree that the obligations, as evidenced by or otherwise arising
under the Master Agreement and the Credit Agreement are, by the Swap Parties’
execution of this Amendment, ratified and confirmed in all respects.  In addition, 


 

















 


by
the execution of this Amendment, each of the Swap Parties represents and
warrants that no counterclaim, right of set-off (other than those arising under
the Master Agreement) or defense of any kind exists or is outstanding as of the
First Amendment Effective Date (as defined below) with respect to such
obligations.


 


§3.  Representations and Warranties.  All
of the representations and warranties made by each of the Swap Parties in the
Master Agreement and the Credit Support Documents are true and correct on the
date hereof as if made on and as of the date hereof, except with respect to the
occurrence of the Specified Defaults and to the extent that any of such
representations and warranties relate by their terms to a prior date they shall
be true and correct as of such prior date.


 


§4.  Covenants.  Each of Bank of
America and the Swap Parties hereby covenant and agree with and for the benefit
of Bank of America, notwithstanding anything to the contrary contained in the
Master Agreement or the Credit Support Documents, as follows:


 


(a)           Compliance
with Forbearance Agreement and Master Agreement. Each Swap Party will, and
will cause each of its Subsidiaries to, comply and continue to comply with all
of the terms, covenants and provisions contained in the Master Agreement, the
Forbearance Agreement and each Credit Support Document to which each is a party and any other
instruments evidencing or creating any obligations pursuant to such documents
except as such terms, covenants and provisions are expressly modified by the
Forbearance Agreement or this Section 4.


 


(b)           Further
Assurances. Each Swap Party will, and will cause its Subsidiaries to, at
any time or from time to time execute and deliver such further instruments,
each in form and substance satisfactory to Bank of America, and take such
further action as Bank of America may reasonably request, in each case further
to effect the purposes of this Amendment, the Forbearance Agreement, the Master
Agreement and the Credit Support Documents.


 


§5.  Conditions to Effectiveness.  Bank of America and the Swap Parties agree
that the extension of the forbearance obligations of Bank of America under the
Forbearance Agreement shall be effective upon the satisfaction of each of the
following conditions precedent, each in form and substance satisfactory to Bank
of America, on November 15, 2010 (the “First Amendment Effective Date”):


 


(a)           The Swap Parties and
Bank of America shall have executed and delivered this Amendment.


 


(b)           The applicable
Subsidiaries (as defined in the Credit Agreement) of the Loan Parties shall
have entered into amendments, waivers, forbearances (or extensions thereof) or
other modifications reasonably satisfactory to the Administrative Agent of each
loan agreement evidencing the existing Indebtedness (as defined in the Credit
Agreement) of such Subsidiaries of the Loan Parties described on Schedule 7.02
of the Credit Agreement and any other material Indebtedness of such
Subsidiaries (including, without limitation, the various loan agreements among
certain Subsidiaries of Holdings and The Royal Bank of Scotland plc, DVB Group
Merchant Bank (Asia) Ltd., Credit Suisse, AIG Commercial Equipment Finance, Inc,
Commerzbank AG and Berenberg Bank), deferring, forbearing or continuing to
defer or forbear any rights with respect to the failure to make any payments of
principal due under such loan agreements and any other applicable defaults
(including cross-defaults and defaults under any minimum liquidity covenants
contained therein) under such loan agreements to a date which is no earlier
than the Forbearance Termination Date (as hereby amended), and the
Administrative Agent shall have received a signed Officer’s Certificate,
certified by a duly authorized officer of Holdings to be true and complete,
attaching true, correct and complete fully executed copies of each such
amendment, waiver, forbearance (or extension thereof) and modification to each
such loan agreement.


 

















 


(c)           Bank of America
shall have received evidence that all corporate action necessary for the valid
execution and delivery by the Swap Parties of this Amendment and the
performance of the transactions contemplated hereby and thereby shall have been
taken.


 


(d)           Bank of America
shall have received payment for the fees, and expenses including, without
limitation, fees and expenses incurred by their counsel and their restructuring
advisors and other consultants, for which invoices or estimates therefor have
been provided to the Swap Parties on or prior to the First Amendment Effective
Date.


 


(e)           The representations
and warranties of each of the Swap Parties in the Master Agreement and the
Credit Support Documents shall be true and correct as of the First Amendment
Effective Date, except with respect to the occurrence of the Specified Defaults
referred to herein and to the extent that any of such representations and
warranties relate by their terms to a prior date they shall be true and correct
as of such prior date.


 


(f)            There shall have
occurred no Default or Event of Default under the Master Agreement other than
the Specified Defaults.


 


§6.  No Present Claims; Release.  The Swap Parties hereby acknowledge and agree
that, as of the date hereof: (a) none of the Swap Parties or any of their
Affiliates has any claim or cause of action against Bank of America (or any of
its directors, officers, employees, attorneys or agents); (b) none of the
Swap Parties or any of their Affiliates, has offset rights (other than those
arising under the Master Agreement), counterclaims or defenses of any kind
against any of their obligations, indebtedness or liabilities to Bank of
America; and (c) Bank of America has heretofore properly performed and
satisfied in a timely manner all of its obligations to the Swap Parties and
each of their Affiliates.  Bank of
America wishes (and the Swap Parties agree) to eliminate any possibility that
any past conditions, acts, omissions, events, circumstances or matters would
impair or otherwise adversely affect any of the rights, interests, contracts,
collateral security or remedies of Bank of America.  Therefore, the Swap Parties, each on its own
behalf and on behalf of each of its respective successors and assigns, hereby
waives, releases and discharges Bank of America and all of its directors,
officers, employees, attorneys and agents, from any and all claims, demands,
actions or causes of action on or before the date hereof and arising out of or
in any way relating to the Master Agreement and any other documents,
instruments, agreements (including the Forbearance Agreement and this
Amendment), dealings or other matters connected with the Master Agreement,
including, without limitation, all known and unknown matters, claims, transactions
or things occurring on or prior to the date of this Amendment related to the
Master Agreement.  The waivers, releases,
and discharges contained in this paragraph shall be effective regardless of any
other event that may occur or not occur prior to, or on or after the date
hereof.


 


§7.  Expenses.  The Swap Parties jointly and severally agree
to pay on demand all expenses incurred by Bank of America in connection with
the transactions contemplated by this Amendment and the Forbearance Agreement
and in connection with any amendments or waivers (whether or not the same
become effective) thereof and all expenses incurred by Bank of America in
connection with the enforcement of any rights hereunder or thereunder,
including, without limitation, (i) the cost and expenses of preparing and
duplicating this Amendment, (ii) the reasonable legal fees and all charges
for costs, expenses and disbursements of Bingham McCutchen LLP, special counsel
to Bank of America, in connection with the transactions contemplated by this
Amendment and the Forbearance Agreement and any further amendments,
modifications, approvals, consents or waivers hereunder,  and (iii) all expenses, costs and
liabilities, incurred by Bank of America in connection with (A) the
interpretation and administration of and exercise, enforcement or preservation
of rights under this Amendment and the Forbearance Agreement against any of the
Swap Parties or any of their officers or employees party thereto or the
administration thereof whether before or after the occurrence of a Default or
Event of Default and (B) any litigation, proceeding or dispute 


 

















 


whether
arising hereunder or otherwise, in any way related to the relationship of Bank
of America with the Swap Parties.


 


§8.  No Waiver.  Except as otherwise expressly provided for in
this Amendment and the Forbearance Agreement, nothing in this Amendment or the
Forbearance Agreement shall extend to or affect in any way any of the rights or
obligations of the Swap Parties or any of Bank of America’s obligations, rights
and remedies arising under the Master Agreement.  Bank of America shall not be deemed to have
waived any or all of its rights or remedies with respect to any Default or
Event of Default under the Master Agreement existing on the date hereof or
arising hereafter.


 


§9.  Marshalling.  Bank of America shall not be required to
marshal any present or future collateral security for the Swap Parties’
obligations to Bank of America under the Master Agreement or to resort to such
collateral security or other assurances of payment in any particular order, and
all of its rights in respect of such collateral security shall be cumulative
and in addition to all other rights, however existing or arising.  To the extent that they lawfully may, the
Swap Parties hereby agree that they will not invoke any law relating to the
marshalling of collateral which might cause delay in or impede Bank of America’s
rights under any document, agreement or instrument evidencing or securing the
Swap Parties’ obligations to Bank of America under the Master Agreement and, to
the extent that it lawfully may, each of the Swap Parties hereby irrevocably
waives the benefits of all such laws.


 


§10.  Miscellaneous.


 


(a)           THIS AMENDMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK,  (WITHOUT REFERENCE TO ITS CONFLICT
OF LAWS PROVISIONS, EXCEPT FOR SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).


 


(b)           This Amendment may
be executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which
when taken together shall constitute a single contract.  Delivery of an executed counterpart of a
signature page of this Amendment by facsimile, telecopy or other electronic
transmission shall be effective as delivery of a manually executed counterpart
of this Amendment.


 


(c)           The failure to
comply with the covenants contained herein shall constitute an Event of Default
under the Master Agreement; and all obligations included in this Amendment
(including, without limitation, all obligations for the payment of principal,
interest, fees, and other amounts and expenses) shall constitute obligations
under the Master Agreement.


 


(d)           Wherever possible,
each provision of this Amendment shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this
Amendment shall be prohibited by or rendered invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provisions or the
remaining provisions of this Amendment.


 


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If
you are in agreement with the foregoing, please sign and return the enclosed
copy of this Amendment to Bank of America.


 


	
   

  	
  The
  Swap Parties:

  
	
   

  	
   

  
	
   

  	
  TBS
  INTERNATIONAL LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Tara DeMakes

  
	
   

  	
  Name:

  	
  Tara
  DeMakes

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
  ALBEMARLE
  MARITIME CORP.

  
	
   

  	
  ARDEN
  MARITIME CORP.

  
	
   

  	
  AVON
  MARITIME CORP.

  
	
   

  	
  BIRNAM
  MARITIME CORP.

  
	
   

  	
  BRISTOL
  MARITIME CORP.

  
	
   

  	
  CHESTER
  SHIPPING CORP.

  
	
   

  	
  CUMBERLAND
  NAVIGATION CORP.

  
	
   

  	
  DARBY
  NAVIGATION CORP.

  
	
   

  	
  DOVER
  MARITIME CORP.

  
	
   

  	
  ELROD
  SHIPPING CORP.

  
	
   

  	
  EXETER
  SHIPPING CORP.

  
	
   

  	
  FRANKFORT
  MARITIME CORP.

  
	
   

  	
  GLENWOOD
  MARITIME CORP.

  
	
   

  	
  HANSEN
  SHIPPING CORP.

  
	
   

  	
  HARTLEY
  NAVIGATION CORP.

  
	
   

  	
  HENLEY
  MARITIME CORP.

  
	
   

  	
  HUDSON
  MARITIME CORP.

  
	
   

  	
  JESSUP
  MARITIME CORP.

  
	
   

  	
  MONTROSE
  MARITIME CORP.

  
	
   

  	
  OLDCASTLE
  SHIPPING CORP.

  
	
   

  	
  QUENTIN
  NAVIGATION CORP.

  
	
   

  	
  RECTOR
  SHIPPING CORP.

  
	
   

  	
  REMSEN
  NAVIGATION CORP.

  
	
   

  	
  SHEFFIELD
  MARITIME CORP.

  
	
   

  	
  SHERMAN
  MARITIME CORP.

  
	
   

  	
  STERLING
  SHIPPING CORP.

  
	
   

  	
  STRATFORD
  SHIPPING CORP.

  
	
   

  	
  VEDADO
  MARITIME CORP.

  
	
   

  	
  VERNON
  MARITIME CORP.

  
	
   

  	
  WINDSOR
  MARITIME CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Tara DeMakes

  
	
   

  	
  Name:

  	
  Tara
  DeMakes

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
					



 

















 


	
   

  	
  BANK
  OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Judith A. Huckins

  
	
   

  	
  Name:
  Judith A. Huckins

  
	
   

  	
  Title:
  Vice President