ex-10_8.htm


    TBS INTERNATIONAL LIMITED
& SUBSIDIARIES                EXHIBIT
10.8 

     

    

       

      


      


      


      Date 27
March 2009

      


      


      


      ARGYLE
MARITIME CORP.

      CATON
MARITIME CORP.

      DORCHESTER
MARITIME CORP.

      LONGWOODS
MARITIME CORP.

      McHENRY
MARITIME CORP.

      SUNSWYCK
MARITIME CORP.

      as Joint
and Several Borrowers

       

      – and
–

       

      TBS
INTERNATIONAL LIMITED

      as
Corporate Guarantor

       

      – and
–

       

      THE
ROYAL BANK OF SCOTLAND PLC

      as
Lender

      


      


      


      


      


      


      


      


                                                                                                   

       

      SUPPLEMENTAL
AGREEMENT

                                                                                                   

      


      relating
to

      a
US$84,000,000 guarantee facility

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      



      INDEX

      Clause Page

      


       

      1           INTERPRETATION 

       

      2           AGREEMENT
OF THE LENDER 

       

      3           CONDITIONS
PRECEDENT 

       

      4           REPRESENTATIONS
AND WARRANTIES 

       

      5           AMENDMENTS
TO FACILITY AGREEMENT AND OTHER FINANCE DOCUMENTS 

       

      6           FURTHER
ASSURANCES 

       

      7           FEES AND
EXPENSES 

       

      8           COMMUNICATIONS 

       

      9           SUPPLEMENTAL

       

      10           LAW AND
JURISDICTION 

       

      SCHEDULE  FINANCIAL
COVENANTS DURING COVENANT WAIVER PERIOD 

       

      EXECUTION
PAGES 

       

      APPENDIX  CORPORATE
GUARANTEE SUPPLEMENT 

       

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      THIS AGREEMENT is made on 27
March 2009

       

      BETWEEN

       

      
        	
                (1)  

              	
                ARGYLE MARITIME CORP.,
      CATON MARITIME
      CORP., DORCHESTER
      MARITIME CORP., LONGWOODS MARITIME
      CORP., McHENRY
      MARITIME CORP. and SUNSWYCK MARITIME CORP.,
      each a company incorporated in the Marshall Islands whose registered
      office is at Trust Company Complex, Ajeltake Island, Majuro, Marshall
      Islands MH96960 as Joint
      and Several Borrowers;

              


      

       

      
        	
                (2)  

              	
                TBS INTERNATIONAL
      LIMITED, a company incorporated in Bermuda whose principal office
      is at Suite 306, Commerce Building, One Chancery Lane, Hamilton HM12,
      Bermuda as Corporate Guarantor;
      and

              


      

       

      
        	
                (3)  

              	
                THE ROYAL BANK OF SCOTLAND
      PLC as Lender.

              


      

       

       

      BACKGROUND

       

      
        	
                (A)  

              	
                By
      a facility agreement (the “Facility Agreement”)
      dated 29 March 2007 and made between (i) the Borrowers and the Lender, it
      was agreed that the Lender would make available to the Borrowers a
      guarantee facility of
US$84,000,000.

              


      

       

      
        	
                (B)  

              	
                This
      Agreement sets out the terms and conditions on which the Lender agree,
      with effect on and from the Effective Date, at the request of the Security
      Parties to waive certain covenants in the Facility Agreement on the terms
      and conditions set out herein and to the consequential amendment of the
      Facility Agreement, and the other Finance Documents in connection with
      those matters.

              


      

       

       

      IT IS AGREED as follows:

       

      
        	
                1  

              	
                INTERPRETATION

              


      

       

      
        	
                1.1  

              	
                Defined
      expressions.  Words and expressions defined in the
      Facility Agreement and the other Finance Documents shall have the same
      meanings when used in this Agreement unless the context otherwise
      requires.

              


      

       

      
        	
                1.2  

              	
                Definitions.  In
      this Agreement, unless the contrary intention
  appears:

              


      

       

       “Corporate Guarantee
Supplement” means a letter supplemental to the Corporate Guarantee
executed or to be executed by the Corporate Guarantor in favour of the Lender
substantially in the form set out in the Appendix;

       

      “Covenant Waiver Period” means
the period commencing on the date of this Agreement and ending on 1 January 2010
(or such later date as the Lender may agree with the Borrowers);

       

      “Effective
Date”  means the date on which the conditions precedent in
Clause 3 are satisfied; and

       

      “Facility
Agreement”  means the facility agreement referred to in Recital
(A);

       

      
        	
                1.3  

              	
                Application of construction and
      interpretation provisions of Facility Agreement.  Clauses
      1.2 and 1.5 of the Facility Agreement apply, with any necessary
      modifications, to this Agreement.

              


      

       

      
        	
                2  

              	
                AGREEMENT
      OF THE LENDER

              


      

       

      
        	
                2.1  

              	
                Agreement of the
      Lender.  The Lender agrees, subject to and upon the terms
      and conditions of this Agreement, to the amendments to the Facility
      Agreement and the Finance Documents as set out in Clause 5.

              


      

       

      
        	
                2.2  

              	
                Agreement of the Borrowers and
      the Corporate Guarantor.  The Borrowers and the Corporate
      Guarantor hereby agree to the amendments to the Facility Agreement and the
      Finance Documents as set out in Clause 5.

              


      

       

      
        	
                2.3  

              	
                Effective Date. The
      agreement of the Lender contained in Clauses 2.1 shall have effect on and from the Effective
      Date.

              


      

       

      
        	
                3  

              	
                CONDITIONS
      PRECEDENT

              


      

       

      
        	
                3.1  

              	
                General.  The
      agreement of the Lender contained in Clauses 2.1 is subject to the fulfilment of the
      conditions precedent in Clause 3.2.

              


      

       

      
        	
                3.2  

              	
                Conditions
      precedent.  The conditions referred to in Clause 3.1 are that the Lender shall have received the
      following documents and evidence in all respects in form and substance
      satisfactory to the Lender and its lawyers on or before 6 April 2009 or
      such later date as the Lender may agree with the Borrowers and the other
      Security Parties:

              


      

       

      
        	
                (a)  

              	
                documents
      of the kind specified in Schedule 2, Part A, paragraphs 2, 3, 4 and 5 of
      the Facility Agreement as amended and supplemented by this Agreement and
      updated with appropriate modifications to refer to this Agreement and the
      Corporate Guarantee Supplement;

              


      

       

      
        	
                (b)  

              	
                a
      duly executed original of this Agreement and the Corporate Guarantee
      Supplement duly executed by the parties to
it;

              


      

       

      
        	
                (c)  

              	
                evidence
      that the provisions of clause 7.1(c) and 7.1(d) of the Facility Agreement,
      as amended and supplemented by this Agreement and updated with appropriate
      modifications to refer to this Agreement, are complied with both as at the
      date of this Agreement and the Effective Date;
  and

              


      

       

      
        	
                (d)  

              	
                any
      further opinions, consents, agreements and documents in connection with
      this Agreement and the Finance Documents which the Lender may request by
      notice to the Borrowers and the Security Parties prior to the Effective
      Date.

              


      

       

      
        	
                4  

              	
                REPRESENTATIONS
      AND WARRANTIES

              


      

       

      
        	
                4.1  

              	
                Repetition of Facility
      Agreement representations and warranties.  The Borrowers
      represent and warrant to the Lender that the representations and
      warranties in clause 8 of the Facility Agreement, as amended and
      supplemented by this Agreement and updated with appropriate modifications
      to refer to this Agreement, remain true and not misleading if repeated on
      the date of this Agreement and the Effective Date with reference to the
      circumstances now and then
existing.

              


      

       

      
        	
                4.2  

              	
                Repetition of Finance Document
      representations and warranties.  The Borrowers and the
      Security Parties represent and warrant to the Lender that the
      representations and warranties in the Finance Documents (other than the
      Facility Agreement) to which it is a party, as amended and supplemented by
      this Agreement and updated with appropriate modifications to refer to this
      Agreement, remain true and not misleading if repeated on the date of this
      Agreement and the Effective Date with reference to the circumstances now
      and then existing.

              


      

       

      
        	
                5  

              	
                AMENDMENTS
      TO FACILITY AGREEMENT AND OTHER FINANCE
  DOCUMENTS

              


      

       

      
        	
                5.1  

              	
                Specific amendments to Facility
      Agreement.  With effect on and from the Effective Date
      the Facility Agreement shall be, and shall be deemed by this Agreement to
      be, amended as follows:

              


      

       

      
        	
                (a)  

              	
                so
      that the financial covenants set out in paragraphs (a), (b), (c) and (d)
      of Schedule 3 and referred to in clause 9.16 shall not apply during the
      Covenant Waiver Period and so that on the next succeeding Business Day
      following the last day of the Covenant Waiver Period the Borrowers shall
      provide a compliance certificate in the form set out in Schedule 4
      confirming that the Financial Covenants set out in Schedule 3 as amended
      by this Agreement have been complied with during the last financial
      quarter;

              


      

       

      
        	
                (b)  

              	
                so
      that during the Covenant Waiver Period the Borrowers and the Corporate
      Guarantor undertake to comply with the financial covenants and the
      undertakings set out in the Schedule to this
  Agreement;

              


      

       

      
        	
                (c)  

              	
                clauses
      14.1 (b) shall be deleted and replaced with the
  following:

              


      

       

      
        	
                 
      

              	
                “(b)

              	
                quarterly
      in arrears during the period from (and including) 27 March 2009 to the
      date of cancellation or termination of the last Guarantee and on the last
      day of that period a commitment fee at the rate of one point five per cent
      (1.5%) per annum;”

              


      

       

      
        	
                (d)  

              	
                the
      definitions of “Consolidated Interest Charges Coverage Ratio”,
      “Consolidated EBITDA” and “Consolidated Interest Charges” in Schedule 3
      shall be deleted and replaced with the
  following:

              


      

       

      ““Consolidated Interest Charges
Coverage Ratio” means, at any date of determination, the ratio of (a) the
result of (i) Consolidated EBITDA less (ii) the sums 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 EBITDA” means, at
any date of determination, an amount equal to Consolidated Net Income of
Holdings and its Subsidiaries on a consolidated basis for the most recently
completed Measurement Period, plus (a) 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 vessels as permitted
under this Agreement and (v) any noncash impairment charges incurred during each
fiscal year of Holdings and its Subsidiaries ending December 31, 2008 and
December 31, 2009 in respect of any of Holdings’ or its Subsidiaries’ goodwill
and Vessels, (in each case of or by Holdings and its Subsidiaries for such
Measurement Period) and minus (b) the following to the extent included in
calculating such Consolidated Net Income, all net gains from the sales of
vessels as permitted under this Agreement (in each case of or by Holdings and
its Subsidiaries for such Measurement Period); provided that, to the extent
characterized as interest on the income statements of Holdings 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 Holdings or any of its Subsidiaries, shall be excluded.

       

      “Consolidated Interest Charges”
means, for any Measurement Period, the sum of (a) 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, (b) all interest paid or payable with
respect to discontinued operations and (c) the portion of rent expense under
Capitalized Leases that is treated as interest in accordance with GAAP, in each
case, of or by Holdings 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 Holdings 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 Holdings or any of its Subsidiaries, shall be excluded.”;

       

      
        	
                (e)  

              	
                the
      Borrowers and the Corporate Guarantor undertake to provide the Lender with
      the benefit of any additional or more favourable financial covenants
      provided to other financing parties under other or future financing
      agreements in order that the Lender shall be treated no less favourably
      than any other of the financing parties to the Borrowers or the Corporate
      Guarantor by providing details of such financial covenants in order that
      appropriate amendments can be made to the Facility Agreement and the
      relevant Finance Documents;

              


      

       

      
        	
                (f)  

              	
                at
      the end of the Covenant Waiver Period the parties to this Agreement agree
      to review the terms of the Loan Agreement being amended pursuant to this
      Agreement and any provisions that may need to be reviewed as a consequence
      of these amendments;

              


      

       

      
        	
                (g)  

              	
                so
      that during the Covenant Waiver Period the Corporate Guarantor shall
      provide to the Agent as soon as possible but in no event later than 30
      days after the end of  each calendar month updated financial
      projections including but not limited to revenues, operating expenses, net
      income, cash balances, loan balances, working capital requirements and
      equity for the period up to and including 31 December
  2011;

              


      

       

      
        	
                (h)  

              	
                the
      definition of, and references throughout to each Finance Document shall be
      construed as if the same referred to the Finance Document as amended and
      supplemented by this Agreement; and

              


      

       

      
        	
                (i)  

              	
                by
      construing references throughout to “this Agreement”, “hereunder” and other
      like expressions as if the same referred to the Facility Agreement as
      amended and supplemented by this
Agreement.

              


      

       

      
        	
                5.2  

              	
                Amendments to Finance
      Documents.  With effect on and from the Effective Date,
      each of the Finance Documents other than the Facility Agreement, shall be,
      and shall be deemed by this Agreement to be, amended as
      follows:

              


      

       

      
        	
                (a)  

              	
                the
      definition of, and references throughout each of the Finance Documents to,
      the Facility Agreement and any of the other Finance Documents shall be
      construed as if the same referred to the Facility Agreement and those
      Finance Documents as amended and supplemented by this
      Agreement;

              


      

       

      
        	
                (b)  

              	
                by
      construing references throughout the Finance Documents to “this Agreement”, “this Deed”, “hereunder” and other
      like expressions as if the same referred to such Finance Documents as
      amended and supplemented by this
Agreement.

              


      

       

      
        	
                5.3  

              	
                Finance Documents to remain in
      full force and effect.  The Finance Documents shall
      remain in full force and effect as amended and supplemented by the
      amendments to the Finance Documents contained or referred to in Clause 5.1.

              


      

       

      
        	
                6  

              	
                FURTHER
      ASSURANCES

              


      

       

      
        	
                6.1  

              	
                Borrowers’ and each Security
      Party’s obligation to execute further documents
      etc.  Each Borrower and each Security Party
      shall:

              


      

       

      
        	
                (a)  

              	
                execute
      and deliver to the Lender (or as it may direct) any assignment, mortgage,
      power of attorney, proxy or other document, governed by the law of England
      or such other country as the Lender may, in any particular case,
      specify;

              


      

       

      
        	
                (b)  

              	
                effect
      any registration or notarisation, give any notice or take any other
      step;

              


      

       

      which the
Lender may, by notice to that Borrower or that Security Party, specify for any
of the purposes described in Clause 6.2 or for any
similar or related purpose.

       

      
        	
                6.2  

              	
                Purposes of further
      assurances.  Those purposes
  are:

              


      

       

      
        	
                (a)  

              	
                validly
      and effectively to create any Security Interest or right of any kind which
      the Lender intended should be created by or pursuant to the Facility
      Agreement or any other Finance Document, each as amended and supplemented
      by this Agreement; and

              


      

       

      
        	
                (b)  

              	
                implementing
      the terms and provisions of this
Agreement.

              


      

       

      
        	
                6.3  

              	
                Terms of further
      assurances.  The Lender may specify the terms of any
      document to be executed by any Borrower or any Security Party under Clause
      6.1, and those terms may include any
      covenants, powers and provisions which the Lender considers appropriate to
      protect its interests.

              


      

       

      
        	
                6.4  

              	
                Obligation to comply with
      notice.  Any Borrower or any Security Party shall comply
      with a notice under Clause 6.1 by the date
      specified in the notice.

              


      

       

      
        	
                6.5  

              	
                Additional corporate
      action.  At the same time as any Borrower or any Security
      Party delivers to the Lender any document executed under Clause 6.1(a), that Borrower or any Security Party
      shall also deliver to the Lender a certificate signed by 2 of that
      Borrower’s or that Security Party’s directors which
  shall:

              


      

       

      
        	
                (a)  

              	
                set
      out the text of a resolution of that Borrower’s or that Security Party’s
      directors specifically authorising the execution of the document specified
      by the Lender; and

              


      

       

      
        	
                (b)  

              	
                state
      that either the resolution was duly passed at a meeting of the directors
      validly convened and held throughout which a quorum of directors entitled
      to vote on the resolution was present or that the resolution has been
      signed by all the directors and is valid under that Borrower’s or that
      Security Party’s articles of association or other constitutional
      documents.

              


      

       

      
        	
                7  

              	
                FEES
      AND EXPENSES

              


      

       

      
        	
                7.1  

              	
                Amendment
      fee.  The Borrowers shall pay to the Lender an amendment
      fee in the amount of $280,000 on the date of this
    Agreement.

              


      

       

      
        	
                7.2  

              	
                Expenses.  The
      provisions of clauses 14.2 to 14.5 of the Facility Agreement, as amended
      and supplemented by this Agreement, shall apply to this Agreement as if
      they were expressly incorporated in this Agreement with any necessary
      modifications.

              


      

       

      
        	
                8  

              	
                COMMUNICATIONS

              


      

       

      
        	
                8.1  

              	
                General.  The
      provisions of clause 22 (notices) of the Facility Agreement, as amended
      and supplemented by this Agreement, shall apply to this Agreement as if
      they were expressly incorporated in this Agreement with any necessary
      modifications.

              


      

       

      
        	
                9  

              	
                SUPPLEMENTAL

              


      

       

      
        	
                9.1  

              	
                Counterparts.  This
      Agreement may be executed in any number of
  counterparts.

              


      

       

      
        	
                9.2  

              	
                Finance
      Documents.  This Agreement is a Finance
      Document.

              


      

       

      
        	
                9.3  

              	
                Third party
      rights.  A person who is not a party to this Agreement
      has no right under the Contracts (Rights of Third Parties) Act 1999 to
      enforce or to enjoy the benefit of any term of this
    Agreement.

              


      

       

      
        	
                10  

              	
                LAW
      AND JURISDICTION

              


      

       

      
        	
                10.1  

              	
                Governing
      law.  This Agreement and any non-contractual obligations
      arising from or in connection with it shall be governed by and construed
      in accordance with English law.

              


      

       

      
        	
                10.2  

              	
                Incorporation of the Facility
      Agreement provisions.  The provisions of clause 25 (law
      and jurisdiction) of the Facility Agreement, shall apply to this
      Agreement.

              


      

       

      


      THIS AGREEMENT has been duly
executed as a Deed on the date stated at the beginning of this
Agreement.

      


      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      



      SCHEDULE


       

      FINANCIAL
COVENANTS DURING COVENANT WAIVER PERIOD

       

       

      The
Borrowers and the Corporate Guarantor undertake to comply with the following
financial covenants and undertakings during the Covenant Waiver
Period:

       

      
        	
                (a)  

              	
                Minimum
      Consolidated Interest Charges Ratio.  Permit the Consolidated
      Interest Charges Coverage Ratio as of the end of the period of
      determination indicated below and for such period then ending of Holdings
      and its Subsidiaries to be less than the ratio set forth below opposite
      such period:

              


      

       

      
        	
                Period
      of Determination

              	
                Minimum
      Consolidated Interest Charges Coverage Ratio

              
	
                Two
      fiscal quarters ending June 30, 2009

              	
                1.10:1.00

              
	
                Three
      fiscal quarters ending September 30, 2009

              	
                1.35:1.00

              
	
                Four
      fiscal quarters ending December 31, 2009

              	
                1.75:1.00

              


      

      


       

      
        	
                (b)  

              	
                Minimum
      Cash Liquidity.  For each calendar month ending on or after the
      date hereof, minimum cash maintained by the Borrowers and the Corporate
      Guarantor shall be not less than $40,000,000 of
  which:

              


      

       

      
        	
                (i)  

              	
                a
      minimum average of $10,000,000 in any calendar month shall be credited to
      and continue to be held on an operating account maintained with the Lender
      in the name of TBS Pacific Liner, Ltd.;
and

              


      

       

      
        	
                (ii)  

              	
                $20,000,000
      shall be credited to a deposit account to be opened with the Lender and
      such sum shall only be available to the Borrowers to be used to pay
      instalments due under the Shipbuilding Contracts and which shall reduce as
      each such payment is made.

              


      

       

      
        	
                (c)  

              	
                No
      Dividends.  As long as no Event of Default has occurred the
      Borrowers may pay any dividends to the Corporate Guarantor. The Corporate
      Guarantor will not pay any dividend or make any other form of distribution
      which it may otherwise have been permitted to make pursuant to clause 9.17
      of the Facility Agreement.

              


      

       

      
        	
                (d)  

              	
                The
      Borrowers and the Corporate Guarantor each undertake not to purchase (and
      to procure that none of their subsidiaries purchase) any additional
      vessels without the prior written consent of the
  Lender.

              


      

       

      
        	
                (e)  

              	
                The
      Borrowers and the Corporate Guarantor acting individually or together
      shall not invest more than $10,000,000 in aggregate in any joint ventures
      of which any amounts in excess of $5,000,000 shall require the prior
      written consent of the Lender.

              


      

       

      
        	
                (f)  

              	
                The
      Borrowers and the Corporate Guarantor shall not permit any new or increase
      their existing off balance sheet operating leases, operating lease
      payments and payments associated with vessels chartered in for more than 6
      months without the prior written consent of the Lender.  The
      Borrowers and the Corporate Guarantor shall be permitted to enter new or
      increase their existing off balance sheet operating leases, operating
      lease payments and payments associated with vessels chartered in for less
      than 6 months provided that they notify the Lender in writing promptly
      thereafter.

              


      

       

      
        	
                (g)  

              	
                The
      Borrowers and the Corporate Guarantor shall not permit any new or increase
      their existing Financial Indebtedness, as defined in the Facility
      Agreement, without the prior written consent of the
  Lender.

              


      

       

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      EXECUTION
PAGES


      
        


          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      	
                                                                                              BORROWERS

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	
                                                                                              EXECUTED as a DEED            

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              by                           

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              ARGYLE
      MARITIME CORP.       

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              acting
      by    Keith
      Krut            

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Keith Krut

                                                                                            
	
                                                                                              its
      duly authorised
      attorney-in-fact                  

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              in
      the presence
      of:                                             

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Dimitrios Vourakis

                                                                                            
	
                                                                                              Dimitrios
      Vourakis

                                                                                            	 
      	 
      
	
                                                                                              1
      Roondwood Avenue

                                                                                            	 
      	 
      
	
                                                                                              Stockley
      Park

                                                                                            	 
      	 
      
	
                                                                                              UB
      11 1AU

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                                              EXECUTED as a DEED                               

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              by        

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              CATON MARITIME
      CORP.                          

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              acting
      by  Keith
      Krut                                       

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Keith Krut

                                                                                            
	
                                                                                              its
      duly authorised
      attorney-in-fact             

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              in
      the presence
      of:                                            

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Dimitrios Vourakis

                                                                                            
	
                                                                                              Dimitrios
      Vourakis

                                                                                            	 
      	 
      
	
                                                                                              1
      Roondwood Avenue

                                                                                            	 
      	 
      
	
                                                                                              Stockley
      Park

                                                                                            	 
      	 
      
	
                                                                                              UB
      11 1AU

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                                              EXECUTED as a DEED         

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              by                     

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              DORCHESTER MARITIME
      CORP.  

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              acting
      by Keith
      Krut        

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Keith Krut

                                                                                            
	
                                                                                              its
      duly authorised attorney-in-fact  

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              in
      the presence
      of:          

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Dimitrios Vourakis

                                                                                            
	
                                                                                              Dimitrios
      Vourakis

                                                                                            	 
      	 
      
	
                                                                                              1
      Roondwood Avenue

                                                                                            	 
      	 
      
	
                                                                                              Stockley
      Park

                                                                                            	 
      	 
      
	
                                                                                              UB
      11 1AU

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                                              EXECUTED as a DEED           

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              by                                                                  

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              LONGWOODS MARITIME
      CORP.  

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              acting
      by      Keith
      Krut        

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Keith Krut

                                                                                            
	
                                                                                              its
      duly authorised attorney-in-fact    

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              in
      the presence
      of:           

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Dimitrios Vourakis

                                                                                            
	
                                                                                              Dimitrios
      Vourakis

                                                                                            	 
      	 
      
	
                                                                                              1
      Roondwood Avenue

                                                                                            	 
      	 
      
	
                                                                                              Stockley
      Park

                                                                                            	 
      	 
      
	
                                                                                              UB
      11 1AU

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                                              EXECUTED as a DEED          

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              by                     

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              McHENRY
      MARITIME CORP.    

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              acting
      by     Keith
      Krut       

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Keith Krut

                                                                                            
	
                                                                                              its
      duly authorised attorney-in-fact  

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              in
      the presence
      of:           

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Dimitrios Vourakis

                                                                                            
	
                                                                                              Dimitrios
      Vourakis

                                                                                            	 
      	 
      
	
                                                                                              1
      Roondwood Avenue

                                                                                            	 
      	 
      
	
                                                                                              Stockley
      Park

                                                                                            	 
      	 
      
	
                                                                                              UB
      11 1AU

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                                              EXECUTED as a DEED     

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              by                     

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              SUNSWYCK
      MARITIME CORP.    

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              acting
      by      Keith
      Krut         

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Keith Krut

                                                                                            
	
                                                                                              its
      duly authorised attorney-in-fact 

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              in
      the presence
      of:            

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Dimitrios Vourakis

                                                                                            
	
                                                                                              Dimitrios
      Vourakis

                                                                                            	 
      	 
      
	
                                                                                              1
      Roondwood Avenue

                                                                                            	 
      	 
      
	
                                                                                              Stockley
      Park

                                                                                            	 
      	 
      
	
                                                                                              UB
      11 1AU

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                                              CORPORATE
      GUARANTOR

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	
                                                                                              EXECUTED as a DEED       

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              by
      TBS INTERNATIONAL
      LIMITED 

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              acting
      by     Keith
      Krut        

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Keith Krut

                                                                                            
	
                                                                                              its
      duly authorised attorney-in-fact 

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              in
      the presence
      of:            

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Dimitrios Vourakis

                                                                                            
	
                                                                                              Dimitrios
      Vourakis

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              1
      Roondwood Avenue

                                                                                            	 
      	 
      
	
                                                                                              Stockley
      Park

                                                                                            	 
      	 
      
	
                                                                                              UB
      11 1AU

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                                              LENDERS

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	
                                                                                              EXECUTED as a DEED         

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              by                                       

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              THE
      ROYAL BANK OF SCOTLAND PLC

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              acting
      by    G.R. Locker         

                                                                                            	
                                                                                              )

                                                                                            	/s/ G.R. Locker 
  
	
                                                                                              its
      duly authorised
    attorney-in-fact     

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              in
      the presence
      of:                                            

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ C.L. Patrick

                                                                                            
	
                                                                                              C.
      L. Patrick

                                                                                            	 
      	 
      
	
                                                                                              The
      Royal Bank of Scotland Plc

                                                                                            	 
      	 
      
	
                                                                                              Shipping
      Business Centre

                                                                                            	 
      	 
      
	
                                                                                              5-10
      Great Tower Street

                                                                                            	 
      	 
      
	
                                                                                              London
      EC3P 3HX

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 	 	 


                                                                                       

                                                                                    

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      



       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       APPENDIX


      CORPORATE
GUARANTEE SUPPLEMENT

      
         

         

         

        
          	
                  To:

                	
                  The
      Royal Bank of Scotland plc

                


        

         

        
          	
                   
      

                	
                  Shipping
      Business Centre

                


        

         

        
          	
                   
      

                	
                  5-10
      Great Tower Street

                


        

         

        
          	
                   
      

                	
                  London
      EC3P 3HX

                


        

         

        


         

        
          	
                   
      

                	
                  in
      its capacity as Security Trustee

                


        

         

        27 March
2009

         

        Dear
Sirs

         

        We refer
to:

         

        
          	
                  (i)

                	
                  the
      loan agreement dated 29 March 2007 as amended by a side letter dated 26
      March 2008 as further supplemented by a supplemental agreement dated 27
      March 2009 (the “Loan
      Agreement”) made between Argyle Maritime Corp., Caton Maritime
      Corp., Dorchester Maritime Corp., Longwoods Maritime Corp., McHenry
      Maritime Corp. and Sunswyck Maritime Corp., as joint and several borrowers
      (the “Borrowers”)
      the Lenders listed therein, yourselves as mandated lead arranger,
      bookrunner, agent, security trustee and swap bank pursuant to which the
      Lenders have made available to the Borrowers a loan facility of One
      hundred and fifty million Dollars ($150,000,000) upon the terms and
      conditions specified therein;

                


        

         

        
          	
                  (ii)

                	
                  the
      master agreement (on the 1992 ISDA Master Agreement
      (Multicurrency-Crossborder) form) dated 29 March 2007 (the “Master Agreement”) made
      between the Borrowers and yourselves as swap bank pursuant to which the
      Borrowers entered into or may enter into certain Transactions (as such
      term is defined in the said Master Agreement) pursuant to separate
      Confirmations (as such term is defined in the said Master Agreement) upon
      the terms and conditions therein
contained;

                


        

         

        
          	
                  (iii)

                	
                  the
      Guarantee dated 29 March 2007 (the “Corporate Guarantee”)
      executed in your favour in your capacity as security trustee whereby we
      have guaranteed all the obligations of the Borrowers under the Loan
      Agreement and the Master Agreement.

                


        

         

        Words and
expressions defined in the Loan Agreement shall have the same meanings when used
herein.

         

        We have
been advised by the Borrowers that you have agreed to (i) waive certain
covenants in the Loan Agreement and (ii) to certain consequential amendments to
the Loan Agreement, the Master Agreement and the other Finance Documents subject
to the terms and conditions contained in a supplemental agreement substantially
in the form annexed hereto (the “Supplemental
Agreement”).

         

        In
consideration of US$1 and other good and valuable consideration provided by the
Security Trustee (the receipt and sufficiency of which we hereby acknowledge) we
hereby agree to the amendments to the Loan Agreement, the Master Agreement and
the Finance Documents as contained in the Supplemental Agreement and agree that
the Corporate Guarantee shall apply to all the obligations of the Borrowers
under the Supplemental Agreement as if the Supplemental Agreement were referred
to in the Corporate Guarantee (in addition to the Loan Agreement, the Master
Agreement and the Finance Documents) and that all references to the Loan
Agreement, the Master Agreement and the Finance Documents in the Corporate
Guarantee and the other Finance Documents to which we are party shall be read
and construed as references to the Loan Agreement, the Master Agreement and the
Finance Documents as supplemented and amended by the Supplemental
Agreement.  Save as provided herein the Corporate Guarantee shall
remain in full force and effect.

         

        The
provisions of Clause 18 of the Corporate Guarantee shall apply to this
letter.

         

        Yours
faithfully

         

        


         

        TBS
INTERNATIONAL LIMITED