ex_10-7.htm


    TBS
INTERNATIONAL PLC & SUBSIDIARIES                 EXHIBIT
10.7

    


      SUPPLEMENTAL
LETTER TO THE LOAN AGREEMENT

      


      


      


      
        	
                To:

              	
                Claremont Shipping
      Corp., Yorkshire
      Shipping Corp. 

                and TBS International
      Limited

              


      

       

      
        	
                 
      

              	
                Commerce
      Building

              


      

      
        	
                 
      

              	
                One
      Chancery Lane

              


      

      
        	
                 
      

              	
                Hamilton
      HM12

              


      

      
        	
                 
      

              	
                Bermuda

              


      

      


      
        	
                 
      

              	
                Attn:
      William J. Carr

              


      

      


      
        	
                and:

              	
                TBS International Public
      Limited Company

              


      

      
        	
                 
      

              	
                Arthur
      Cox Building

              


      

      
        	
                 
      

              	
                Earlsfort
      Terrace

              


      

      
        	
                 
      

              	
                Dublin
      2

              


      

      
        	
                 
      

              	
                Ireland

              


      

      


      
        	
                Copy:

              	
                TBS
      Shipping Services Inc.

              


      

      
        	
                 
      

              	
                612
      East Grassy Sprain Road

              


      

      
        	
                 
      

              	
                Yonkers,
      NY 10710

              


      

      
        	
                 
      

              	
                U.S.A.

              


      

      


      
        	
                 
      

              	
                Attn:  Ferdinand
      V. Lepere

              


      

      


      21 April
2010

      


      


      Dear
Sirs

      


      Loan
Agreement dated 7 December 2007 made between (i) Claremont Shipping Corp. and
Yorkshire Shipping Corp. as joint and several Borrowers and (ii) Credit Suisse
AG as Lender and Swap Bank relating to a term loan facility of US$40,000,000 as
supplemented by an amendment letter dated 19 March 2008, a waiver letter dated
24 March 2009, an extension of waiver letter dated 22 December 2009, a
supplemental agreement dated 8 January 2010 and a further extension of waiver
letter dated 31 March 2010 (together the “Loan Agreement”)

      


      We refer
to the extension of waiver letter dated ­31 March 2010 (the “Extension Letter”), pursuant
to clause 3 of which, it was agreed that the Borrowers and the Lender shall
enter into a further supplemental letter in order to set out the changes to the
financial covenants in order to conform them (where appropriate) to those set
out in the Bank of America Facilities as described in the Extension
Letter.

      


      We
confirm that the Loan Agreement shall be amended with immediate effect by
replacing Schedule 3 to the Loan Agreement with the amended and restated form of
Schedule 3 set out in the Appendix to this letter.

      


      For the
avoidance of doubt, we also confirm that:

      


      
        	
                1  

              	
                the
      Waiver Period as defined in the waiver letter dated 24 March 2009 (the
      “Waiver Letter”)
      and as extended by the Extension Letter to the waiver of any breach by the
      Borrowers of the requirement set out at clause 14.1 of the Loan Agreement
      (as set out in clause 2 at the top of page 2 of the Waiver Letter) has
      been further extended and shall continue to apply until 00:00 hours on 1
      January 2011 (New York time);

              


      

       

      
        	
                2  

              	
                with
      effect from 1 January 2011, clause 14.1 of the Loan Agreement shall be
      amended so that the Loan to value of security ratio referred to therein
      shall be amended to a ratio of 60%;

              


      

       

      
        	
                3  

              	
                with
      effect from 31 March 2010, and notwithstanding the provisions of clause
      4.12 of the Loan Agreement and clause 1 set out at the top of page 2 of
      the waiver letter, the applicable rate of Margin shall be 3.25% per annum
      until further notice from us;

              


      

       

      
        	
                4  

              	
                that
      if the Borrowers are not in compliance with clause 14.1 of the Loan
      Agreement on 1 January 2011, the Borrowers shall make a prepayment of
      the Loan in such amount as is necessary for the Borrowers to comply with
      clause 14.1 of the Loan Agreement which prepayment shall be applied
      against the repayment instalments of the Loan in order of
      maturity;

              


      

       

      
        	
                5  

              	
                that
      if the Borrowers require a further extension of the Waiver Period as set
      out above for 2011, all repayment instalments due in 2011 shall have to be
      prepaid in advance (in a total amount of US$3,496,000);
  and

              


      

       

      
        	
                6  

              	
                that,
      notwithstanding clause 11.3(b) of the Loan Agreement, it is agreed that no
      Borrower shall be permitted to pay any dividend during the Waiver Period
      (as extended pursuant to the Extension Letter and as may be further
      extended pursuant to Clause 5
hereof).

              


      

       

      TBS
International Limited and TBS International Public Limited Company, by signature
of this letter, confirm their approval to the amendments to the Loan Agreement
set out herein and confirm that their respective guarantees shall remain in full
force and effect.

       

      Words and
expressions defined in the Loan Agreement shall have the same meaning when used
herein except as expressly provided in this supplemental letter.

      


      The
provisions of clause 30 (Law and Jurisdiction) of the Loan Agreement shall apply
to this Letter.  For the avoidance of doubt all terms of the Loan
Agreement and the Finance Documents shall remain in full force and effect and,
save as provided herein, unchanged.

      


      Yours
faithfully

      


      


      


      /s/
Carla Sforzini  and   /s/ R. Nenner

      duly
authorised for

      CREDIT
SUISSE AG

      (as
Lender and Swap Bank)

      


      


      


      Accepted
and agreed this         day
of                                                                                                 2010
by:

      


      


      


      /s/ Ferdinand V. Lepere   
                                                                                   /s/ Ferdinand V.
Lepere                


      duly
authorised
for                                                                                  duly authorised
for

      Claremont
Shipping
Corp.                                                                                     Yorkshire
Shipping Corp.

      


       

       

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      




      We hereby
confirm and acknowledge that we have read and understood the terms and
conditions of the above letter and agree in all respects to the same and confirm
that the Guarantee to which we are a party shall remain in full force and effect
and shall continue to stand as security for the obligations of the Borrowers
under the Loan Agreement.

      


      


      


      


      /s/ Ferdinand V.
Lepere                      
          


      TBS
INTERNATIONAL LIMITED

      (as
Guarantor)

      


      We hereby
confirm and acknowledge that we have read and understood the terms and
conditions of the above letter and agree in all respects to the same and confirm
that the New Guarantee to which we are a party shall remain in full force and
effect and shall continue to stand as security for the obligations of the
Borrowers under the Loan Agreement.

      


      


      


      


      /s/ Ferdinand V.
Lepere                       

      TBS
INTERNATIONAL PUBLIC LIMITED COMPANY

      (as New
Guarantor)

      


      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      



      APPENDIX

      


      SCHEDULE
3

      


      FINANCIAL
COVENANTS

      


       

      Pursuant
to Clause 10.18 of this Agreement the Borrowers undertake that at all times they
shall not:

       

      
        	
                (a)  

              	
                Minimum Cash
      Liquidity.  For each calendar month ending after
      1 May 2010, permit Qualified Cash to be less than $15,000,000 at any
      time during such calendar month, of which a minimum average balance of
      $5,625,000 in any such calendar month must be deposited with Bank of
      America, N.A..

              


      

       

      
        	
                (b)  

              	
                Maximum Consolidated Leverage
      Ratio.  Permit the Consolidated Leverage Ratio as of the
      end of any fiscal quarter set forth below for the four fiscal quarter
      period then ending of Holdings and its Subsidiaries, to be greater than
      the ratio set forth below opposite such time
  period:

              


      

       

      
        	
                4
      Fiscal Quarters ending

              	
                Maximum
      Consolidated

                Leverage
      Ratio

                 

              
	
                30
      June 2010

              	
                5.00:1.00

                 

              
	
                30
      September 2010

              	
                3.75:1.00

                 

              
	
                31
      December 2010

              	
                3.00:1.00

                 

              
	
                31
      March 2011

              	
                3.00:1.00

                 

              
	
                30
      June 2011

              	
                2.75:1.00

                 

              
	
                30
      September 2011 and thereafter

              	
                2:50:1.00

                 

              


      

      


       

      
        	
                (c)  

              	
                Minimum Consolidated Interest
      Charges Coverage Ratio.  Permit the Consolidated Interest
      Charges Coverage Ratio as of the end of any fiscal quarter set forth below
      for the four fiscal quarter period then ending of Holdings and its
      Subsidiaries to be less than the ratio set forth below opposite such time
      period (for the avoidance of doubt, the Consolidated Interest Charges
      Coverage ratio will not be measured for any fiscal quarter ending after 30
      September 2010:

              


      

       

      
        	
                4
      Fiscal Quarters ending

              	
                Minimum
      Consolidated

                Interest
      Charges Coverage Ratio

                 

              
	
                31
      March 2010

              	
                2.50:1.00

                 

              
	
                30
      June 2010

              	
                3.00:1.00

                 

              
	
                30
      September 2010

              	
                3.75:1.00

              


      

      


      
        	
                (d)  

              	
                Overall leverage
      ratio.  Permit the Total Debt to exceed 75% of Total
      Assets as adjusted at Fair Market Values.

              


      

       

      
        	
                (e)  

              	
                Minimum Consolidated Fixed
      Charge Coverage Ratio.  Permit the Consolidated Fixed
      Charge Coverage Ratio as of the end of any fiscal quarter set forth below
      for the four fiscal quarter period then ending of Holdings and its
      Subsidiaries to be less than the ratio set forth below opposite such time
      period:

              


      

       

      
        	
                4
      Fiscal Quarters ending

              	
                Minimum
      Consolidated

                Fixed
      Charge Coverage Ratio

                 

              
	
                31
      December 2010

              	
                1.10:1.00

                 

              
	
                31
      March 2011

              	
                1.30:1.00

                 

              
	
                30
      June 2011

              	
                1.50:1.00

                 

              
	
                30
      September 2011 and at each  quarter date
    thereafter

              	
                1.75:1.00

              


      

      


       

       

      For the
purposes of this Schedule 3 the following terms shall have the following
meanings.

       

      “Attributable Indebtedness”
means, on any date, (a) in respect of any Capitalised Lease of any Person, the
capitalised amount thereof that would appear on a balance sheet of such Person
prepared as of such date in accordance with GAAP, (b) in respect of any
Synthetic Lease Obligation, the capitalised amount of the remaining lease or
similar payments under the relevant lease or other applicable agreement or
instrument that would appear on a balance sheet of such Person prepared as of
such date in accordance with GAAP if such lease or other agreement or instrument
were accounted for as a Capitalised Lease and (c) all Synthetic Debt of such
Person;

       

      “Capitalised Leases” means all
leases that have been or should be, in accordance with GAAP, recorded as
capitalised leases;

       

      “Cash Equivalents” means any of
the following types of Investments, to the extent owned by the Borrowers or any
of their Subsidiaries free and clear of all Security Interests (other than (i) a
Security Interest in favour of the Bank of America, N.A. in respect of the
obligations arising under the Bank of America Facilities and/or
(ii)  Permitted Security Interests and/or (iii) a Security Interest in
favour of The Royal Bank of Scotland plc in respect of the obligations arising
under the RBS Facilities):

       

      
        	
                (a)  

              	
                readily
      marketable obligations issued or directly and fully guaranteed or insured
      by the United States of America or any agency or instrumentality thereof
      having maturities of not more than 360 days from the date of acquisition
      thereof; provided that the full faith and credit of the United States of
      America is pledged in support
thereof;

              


      

       

      
        	
                (b)  

              	
                time
      deposits with, or insured certificates of deposit or bankers’ acceptances
      of, any commercial bank that (i) (A) is a Lender or (B) is organised under
      the laws of the United States of America, any state thereof or the
      District of Columbia or is the principal banking subsidiary of a bank
      holding company organised under the laws of the United States of America,
      any state thereof or the District of Columbia, and is a member of the
      Federal Reserve System, (ii) issues (or the parent of which issues)
      commercial paper rated as described in Clause (c) of this definition and
      (iii) has combined capital and surplus of at least $1,000,000,000, in each
      case with maturities of not more than 90 days from the date of acquisition
      thereof;

              


      

       

      
        	
                (c)  

              	
                commercial
      paper issued by any Person organised under the laws of any state of the
      United States of America and rated at least “Prime-1” (or the then
      equivalent grade) by Moody’s or at least “A-1” (or the then equivalent
      grade) by S&P, in each case with maturities of not more than 180 days
      from the date of acquisition thereof;
and

              


      

       

      
        	
                (d)  

              	
                Investments,
      classified in accordance with GAAP as current assets of the Borrowers or
      any of their Subsidiaries, in money market investment programs registered
      under the Investment Company Act of 1940, which are administered by
      financial institutions that have the highest rating obtainable from either
      Moody’s or S&P, and the portfolios of which are limited solely to
      Investments of the character, quality and maturity described in Clauses
      (a), (b) and (c) of this
definition;

              


      

       

      
        	
                 
      

              	
                “Consolidated EBITDA”
      means, at any date of determination, an amount equalto Consolidated Net
      Income of Holdings and its Subsidiaries on a consolidatedbasis 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 the Bank of America
      Facilities, (v) any
      noncash impairment charges incurred during each fiscal year of Holdings
      and its Subsidiaries ending December 31, 2008, December 31, 2009, December
      31, 2010 and December 31, 2011 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), (vi) costs incurred during
      such Measurement Period in connection with the redomiciliation of Holdings
      in an aggregate amount not to exceed $3,000,000 for all Measurement
      Periods, and (vii) any noncash compensation in the form of Equity
      Interests or other equity awards made to employees of Holdings and its
      Subsidiaries in the fiscal years of Holdings and its Subsidiaries ending
      December 31, 2010 and December 31, 2011 in an aggregate amount not to
      exceed $10,000,000 in each such fiscal year (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 the
      Bank of America Facilities (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 Fixed Charge Coverage
Ratio” means, at any date of determination, the ratio of:

       

      
        	
                (a)  

              	
                the
      result of (i) Consolidated EBITDA, less (ii) the sum of (x) federal,
      state, local and foreign income taxes paid in cash and (y) Restricted
      Payments made, in each case, for the most recently completed Measurement
      Period, to

              


      

       

      
        	
                (b)  

              	
                the
      sum of (i) Consolidated Interest Charges for the most recently completed
      Measurement Period, (ii) the aggregate principal amount of all regularly
      scheduled principal payments or redemptions or similar acquisitions for
      value of outstanding debt for borrowed money for the period of twelve (12)
      consecutive months following such date of determination, but excluding any
      principal payments scheduled to be made in respect of the Revolving Credit
      Facility (as defined in the Bank of America
  Facilities);

              


      

       

      “Consolidated Funded
Indebtedness” means, as of any date of determination, for Holdings and
its Subsidiaries on a consolidated basis, the sum of:

       

      
        	
                (a)  

              	
                the
      outstanding principal amount of all obligations, whether current or
      long-term, for borrowed money (including Obligations under and as defined
      in the Bank of America Facilities) and all obligations evidenced by bonds,
      debentures, notes, loan agreements or other similar
      instruments;

              


      

       

      
        	
                (b)  

              	
                all
      purchase money Indebtedness;

              


      

       

      
        	
                (c)  

              	
                all
      direct obligations arising under letters of credit (including standby and
      commercial), bankers’ acceptances, bank guaranties, surety bonds and
      similar instruments;

              


      

       

      
        	
                (d)  

              	
                all
      obligations in respect of the deferred purchase price of property or
      services (other than trade accounts payable in the ordinary course of
      business);

              


      

       

      
        	
                (e)  

              	
                all
      Attributable Indebtedness;

              


      

       

      
        	
                (f)  

              	
                without
      duplication, all Guarantees with respect to outstanding Indebtedness of
      the types specified in Clauses (a) through (e) above of Persons other than
      the Borrowers or any Subsidiary;
and

              


      

       

      
        	
                (g)  

              	
                all
      Indebtedness of the types referred to in Clauses (a) through (f) above of
      any partnership or joint venture (other than a joint venture that is
      itself a corporation or limited liability company) in which a Borrower or
      a Subsidiary is a general partner or joint venturer, unless such
      Indebtedness is expressly made non-recourse to such Borrower or such
      Subsidiary;

              


      

       

      “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 capitalised interest
      but excluding capitalised 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 Capitalised 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;

       

      “Consolidated Interest Charges
Coverage Ratio” means, at any date of determination, the ratio of the
result of the sum of (i) Consolidated EBITDA, less (ii) the sum
of  federal, state, local and foreign income taxes paid in cash for
the most recently completed Measurement Period, to Consolidated Interest
Charges;

       

      “Consolidated Leverage
Ratio”  means, as of any date of determination, the ratio
of:

       

      
        	
                (a)  

              	
                Consolidated
      Funded Indebtedness as of such date
to,

              


      

       

      
        	
                (b)  

              	
                Consolidated
      EBITDA of Holdings and its Subsidiaries on a consolidated basis for the
      most recently completed Measurement
Period;

              


      

       

      “Consolidated Net Income”
means, at any date of determination, the net income (or loss) of Holdings and
its Subsidiaries on a consolidated basis for the most recently completed
Measurement Period; provided that Consolidated Net Income shall
exclude:

       

      
        	
                (a)  

              	
                extraordinary
      gains and extraordinary losses for such Measurement
  Period;

              


      

       

      
        	
                (b)  

              	
                the
      net income of any Subsidiary during such Measurement Period to the extent
      that the declaration or payment of dividends or similar distributions by
      such Subsidiary of such income is not permitted by operation of the terms
      of its Organisation Documents or any agreement, instrument or law
      applicable to such Subsidiary during such Measurement Period, except that
      Holdings’ equity in any net loss of any such Subsidiary for
      such-Measurement Period shall be included in determining Consolidated Net
      Income; and

              


      

       

      
        	
                (c)  

              	
                any
      income (or loss) for such Measurement Period of any Person if such Person
      is not a Subsidiary, except that Holdings’ equity in the net income of any
      such Person for such Measurement Period shall be included in Consolidated
      Net Income up to the aggregate amount of cash actually distributed by such
      Person during such Period to Holdings or a Subsidiary as a dividend or
      other distribution (and in the case of a dividend or other distribution to
      a Subsidiary, such Subsidiary is not precluded from further distributing
      such amount to Holdings as described in Clause (b) of this
      proviso);

              


      

       

      “Debtor Relief Laws” means the
Bankruptcy Code of the United States, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganisation, or similar
debtor relief Laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors
generally;

       

      “Equity Interests” means, with
respect to any Person, all of the shares of capital stock of (or other ownership
or profit interests in) such Person, all of the warrants, options or other
rights for the purchase of acquisition from such Person of shares of capital
stock of (or ownership or profit interests in) such Person, all of the
securities convertible into or exchangeable for shares of capital stock of (or
other ownership or profit interests in) such Person or warrants, rights or
options for the purchase or acquisition from such Person of such shares (or such
other interests), and all of the other ownership or profit interests in such
Person (including partnership, member or trust interests therein), whether
voting or nonvoting, and whether or not such shares, warrants, options, rights
or other interests are outstanding on any date of determination;

       

       “Fair Market Value” means, with
respect to any asset or property, the sale value which would be obtained at
arm’s-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer;

       

      “GAAP” means generally accepted
accounting principles in the United States set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or such other principles as may be approved by a
significant segment of the accounting profession in the United States, that are
applicable to the circumstances as of the date of determination, consistently
applied;

       

      “Guarantee” means, as to any
Person:

       

      
        	
                (a)  

              	
                any
      obligation, contingent or otherwise, of such Person guaranteeing or having
      the economic effect of guaranteeing any Indebtedness or other obligation
      payable or performable by another Person (the “primary obligor”) in any
      manner, whether directly or indirectly, and including any obligation of
      such Person, direct or indirect, (i) to purchase or pay (or advance or
      supply funds the purchase or payment of) such Indebtedness or other
      obligation, (ii) to purchase or lease property, securities or services for
      the purpose of assuring the obligee in respect of such Indebtedness or
      other obligation of the payment or performance of such Indebtedness or
      other obligation, (iii) to maintain working capital, equity capital or any
      other financial statement condition or liquidity or level of income or
      cash flow of the primary obligor so as to enable the primary obligor to
      pay such Indebtedness or other obligation, or (iv) entered into for the
      purpose of assuring in any other manner the obligee in respect of such
      Indebtedness or other obligation of the payment or performance thereof or
      to protect such obligee against loss in respect thereof (in whole or in
      part), or

              


      

       

      
        	
                (b)  

              	
                any
      Security Interest on any assets of such Person securing any Indebtedness
      or other obligation of any other Person, whether or not such Indebtedness
      or other obligation is assumed by such Person (or any right, contingent or
      otherwise, of any holder of such Indebtedness to obtain any such Security
      Interest).  The amount of any Guarantee shall be deemed to be an
      amount equal to the stated or determinable amount of the related primary
      obligation, or portion thereof, in respect of which such Guarantee is made
      or, if not stated or determinable, the maximum reasonably anticipated
      liability in respect thereof as determined by the guaranteeing Person in
      good faith.  The term “Guarantee” as a verb has
      a corresponding meaning;

              


      

       

      “Holdings” means the New
Guarantor;

       

      “Indebtedness” means, as to any
Person at a particular time, without duplication, all of the following, whether
or not included as indebtedness or liabilities in accordance with
GAAP:

       

      
        	
                (a)  

              	
                all
      obligations of such Person for borrowed money and all obligations of such
      Person evidenced by bonds, debentures, notes, loan agreements or other
      similar instruments;

              


      

       

      
        	
                (b)  

              	
                the
      maximum amount of all direct or contingent obligations of such Person
      arising under letters of credit (including standby and commercial),
      bankers’ acceptances, bank guaranties, surety bonds and similar
      instruments;

              


      

       

      
        	
                (c)  

              	
                net
      obligations of such Person under any Swap
  Contract;

              


      

       

      
        	
                (d)  

              	
                all
      obligations of such Person to pay the deferred purchase price of property
      or services (other than trade accounts payable in the ordinary course of
      business and not past due for more than 60 days after the date on which
      such trade account was created);

              


      

       

      
        	
                (e)  

              	
                indebtedness
      (excluding prepaid interest thereon) secured by a Security Interest on
      property owned or being purchased by such Person (including indebtedness
      arising under conditional sales or other title retention agreements),
      whether or not such indebtedness shall have been assumed by such Person or
      is limited in recourse;

              


      

       

      
        	
                (f)  

              	
                all
      Attributable Indebtedness in respect of Capitalised Lease and Synthetic
      Lease Obligations of such Person and all Synthetic Debt of such
      Person;

              


      

       

      
        	
                (g)  

              	
                all
      obligations of such Person to purchase, redeem, retire, defease or
      otherwise make any payment in respect of any Equity Interest in such
      Person or any other Person or any warrant, right or option to acquire such
      Equity Interest, valued, in the case of a redeemable preferred interest,
      at the greater of its voluntary or involuntary liquidation preference plus
      accrued and unpaid dividends; and

              


      

       

      
        	
                (h)  

              	
                all
      Guarantees of such Person in respect of any of the
    foregoing.

              


      

       

      For all
purposes hereof, the Indebtedness of any Person shall include the Indebtedness
of any partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which such Person is a general
partner or a joint venturer, unless such Indebtedness is expressly made
non-recourse to such Person.  The amount of any net obligation under
any Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date;

       

      “Investment” means, as to any
Person, any direct or indirect acquisition or investment by such Person, whether
by means of:

       

      
        	
                (a)  

              	
                the
      purchase or other acquisition of Equity Interests of another
      Person;

              


      

       

      
        	
                (b)  

              	
                a
      loan, advance or capital contribution to, Guarantee or assumption of debt
      of, or purchase or other acquisition of any other debt or interest in,
      another Person;

              


      

       

      
        	
                (c)  

              	
                the
      purchase or other acquisition (in one transaction or a series of
      transactions) of assets of another Person that constitute a business unit
      or all or a substantial part of the business of, such Person;
      or

              


      

       

      
        	
                (d)  

              	
                the
      acquisition or construction of a vessel. For purposes of covenant
      compliance, the amount of any Investment shall be the amount actually
      invested, without adjustment for subsequent increases or decreases in the
      value of such Investment;

              


      

       

      “Measurement Period” means, at
any date of determination, the most recently completed four fiscal quarters of
Holdings;

       

      “Moody’s” means Moody’s
Investors Service Inc., and any successor thereto;

       

      “Organisation Documents”
means:

       

      
        	
                (a)  

              	
                with
      respect to any corporation, the certificate or articles of incorporation
      and the bylaws (or equivalent or comparable constitutive documents with
      respect to any non-U.S.
jurisdiction);

              


      

       

      
        	
                (b)  

              	
                with
      respect to any limited liability company, the certificate or articles of
      formation or organisation and operating agreement;
  and

              


      

       

      
        	
                (c)  

              	
                with
      respect to any partnership, joint venture, trust or other form of business
      entity, the partnership, joint venture or other applicable agreement of
      formation or organisation and any agreement, instrument, filing or notice
      with respect thereto filed in connection with its formation or
      organisation with the applicable governmental authority in the
      jurisdiction of its formation or organisation and, if applicable, any
      certificate or articles of formation or organisation of such
      entity;

              


      

       

      “Permitted New Vessel Construction
Indebtedness” means Indebtedness incurred after the date when all the
conditions precedent in Section 4.01 of the Bank of America Credit Facilities
are satisfied or waived by Subsidiaries of Holdings that are not borrowers or
guarantors under the Bank of America Credit Facilities in connection with the
construction of up to twelve (12) multipurpose tweendecks or bulkcarrier
shipping vessels;

       

      “Person” means any natural
person, corporation, limited liability company, trust, joint venture,
association, company, partnership, governmental authority or other
entity;

       

      “Qualified Cash” means, as of
any date of determination, the amount of cash and Cash Equivalents which is
freely transferable and not subject to a Security Interest (other than (i) a
Security Interest in favour of the Bank of America, N.A. in respect of the
obligations arising under the Bank of America Facilities and/or (ii) a Permitted
Security Interest and/or (iii) a Security Interest in favour of The Royal Bank
of Scotland plc in respect of the obligations arising under the RBS Facilities)
pledge, security interest, encumbrance, escrow or cash collateral arrangement or
any other restriction on its use;

       

      “Restricted Payment” means any
dividend or other distribution (whether in cash, securities or other property)
with respect to any capital stock or other Equity Interest of any Person or any
of its Subsidiaries, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, defeasance, acquisition, cancellation or
termination of any such capital stock or other Equity Interest, or on account of
any return of capital to any Person’s stockholders, partners or members (or the
equivalent of any thereof), or any option, warrant or other right to acquire any
such dividend or other distribution or payment;

       

      “S&P” means Standard &
Poor’s Ratings Services, a division of the McGraw-Hill Companies Inc., and any
successor thereto;

       

      “Subsidiary” of a Person means
a corporation, partnership, joint venture, limited liability company or other
business entity of which a majority of the shares of securities or other
interests having ordinary voting power for the election of directors or other
governing body (other than securities or interests having such power only by
reason of the happening of a contingency) are at the time beneficially owned, or
the management of which is otherwise controlled, directly, or indirectly through
one or more intermediaries, or both, by such Person.  Unless otherwise
specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a
Subsidiary or Subsidiaries of Holdings;

       

      “Swap Contract”
means:

       

      
        	
                (a)  

              	
                any
      and all rate swap transactions, basis swaps, credit derivative
      transactions, forward rate transactions, commodity swaps, commodity
      options, forward commodity contracts, equity or equity index swaps or
      options, bond or bond price or bond index swaps or options or forward bond
      or forward bond price or forward bond index transactions, interest rate
      options, forward foreign exchange transactions, cap transactions, floor
      transactions, collar transactions, currency swap transactions,
      cross-currency rate swap transactions, currency options, spot contracts,
      or any other similar transactions or any combination of any of the
      foregoing (including any options to enter into any of the foregoing),
      whether or not any such transaction is governed by or subject to any
      master agreement; and

              


      

       

      
        	
                (b)  

              	
                any
      and all transactions of any kind, and the related confirmations, which are
      subject to the terms and conditions of, or governed by, any form of master
      agreement published by the International Swaps and Derivatives
      Association, Inc., any International Foreign Exchange Master Agreement, or
      any other master agreement (any such master agreement, together with any
      related schedules, a “Master Agreement”), including any such obligations
      or liabilities under any Master
Agreement;

              


      

       

      “Swap Termination Value” means,
in respect of any one or more Swap Contracts, after taking into account the
effect of any legally enforceable netting agreement relating to such Swap
Contracts:

       

      
        	
                (a)  

              	
                for
      any date on or after the date such Swap Contracts have been closed out and
      termination value(s) determined in accordance therewith, such termination
      value(s); and

              


      

       

      
        	
                (b)  

              	
                for
      any date prior to the date referenced in clause (a), the amount(s)
      determined as the mark-to-market value(s) for such Swap Contracts, as
      determined based upon one or more mid-market or other readily available
      quotations provided by any recognised dealer in such Swap
      Contracts;

              


      

       

      “Synthetic Debt” means, with
respect to any Person as of any date of determination thereof, obligations of
such Person in respect of transactions entered into by such Person that are
intended to function primarily as a borrowing of funds (including any minority
interest transactions that function primarily as a borrowing) but are not
otherwise included in the definition of “Indebtedness” or as a liability on the
consolidated balance sheet of such Person and its Subsidiaries in accordance
with GAAP;

       

      “Synthetic Lease Obligation”
means the monetary obligation of a Person under:

       

      
        	
                (a)  

              	
                a
      so-called synthetic, off-balance sheet or tax retention lease;
      or

              


      

       

      
        	
                (b)  

              	
                an
      agreement for the use or possession of property (including sale and
      leaseback transactions), in each case, creating obligations that do not
      appear on the balance sheet of such Person but which, upon the application
      of any Debtor Relief Laws to such Person, would be characterised as the
      indebtedness of such Person (without regard to accounting
      treatment);

              


      

       

      “Total Assets” means all assets
of Holdings and its Subsidiaries on a consolidated basis which would, in
accordance with GAAP consistently applied, be classified as assets;
and

       

      “Total Debt” means all
liabilities of Holdings and its Subsidiaries on a consolidated basis which
would, in accordance with GAAP consistently applied, be classified as
debt.