Document:

ex_10-16.htm

    TBS
INTERNATIONAL PLC & SUBSIDIARIES                EXHIBIT
10.16

    

    

    

    

    

    

    

    Date 11 January
2010

    

    

    

    

    

    TBS
INTERNATIONAL PUBLIC LIMITED COMPANY

    as
Guarantor

    

    

    

    - and
-

    

    

    

    

    CREDIT
SUISSE AG

    as
Mortgagee

    

    

    

    ________________________________________________

    

    GUARANTEE

    ________________________________________________

    

    relating
to a Loan Agreement

    dated 7
December 2007

    

    

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    INDEX

    

    

    

      
        	
                Clause

              	 
      	
                Page

              
	 
      	 
      	 
      
	
                
1

              	
                
INTERPRETATION

              	
                
1

              
	
                
2

              	
                
GUARANTEE

              	
                
2

              
	
                
3

              	
                
LIABILITY AS PRINCIPAL AND INDEPENDENT
      DEBTOR

              	
                
2

              
	
                
4

              	
                
EXPENSES

              	
                
2

              
	
                
5

              	
                
ADJUSTMENT OF
    TRANSACTIONS

              	
                
3

              
	
                
6

              	
                
PAYMENTS

              	
                
3

              
	
                
7

              	
                
INTEREST

              	
                
3

              
	
                
8

              	
                
SUBORDINATION

              	
                
3

              
	
                
9

              	
                
ENFORCEMENT

              	
                
4

              
	
                
10

              	
                
REPRESENTATIONS AND
      WARRANTIES

              	
                
4

              
	
                
11

              	
                
UNDERTAKINGS

              	
                
5

              
	
                
12

              	
                
JUDGMENTS AND CURRENCY
      INDEMNITY

              	
                
7

              
	
                
13

              	
                
SET-OFF

              	
                
7

              
	
                
14

              	
                
SUPPLEMENTAL

              	
                
7

              
	
                
15

              	
                
ASSIGNMENT

              	
                
8

              
	
                
16

              	
                
NOTICES

              	
                
8

              
	
                
17

              	
                
INVALIDITY OF LOAN AGREEMENT or master
      agreement

              	
                
9

              
	
                
18

              	
                
GOVERNING LAW AND
      JURISDICTION

              	
                
9

              
	 
      	
                
EXECUTION PAGE

              	
                
11

              
	 
      	 
      	 
      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    THIS GUARANTEE is made
on 11 January 2010]

    

    BETWEEN

    

    
      	
              (1)  

            	
              TBS INTERNATIONAL PUBLIC
      LIMITED COMPANY, a company incorporated in Ireland with
      registration No. 476578 whose registered office is at Arthur Cox Building,
      Earlsfort Terrace, Dublin 2, Ireland (the “Guarantor”);
      and

            

    

     

    
      	
              (2)  

            	
              CREDIT SUISSE AG, of
      Paradeplatz 8, CH-8070, Zurich, Switzerland, (the “Mortgagee”, which
      expression includes its successors and
assigns).

            

    

     

    BACKGROUND

    

    
      	
              (A)  

            	
              By
      a loan agreement dated 7 December 2007 as amended and supplemented
      by  supplemental letter agreements dated 19 March 2008, 24 March
      2009, 22 December 2009  and made between (i) Claremont Shipping
      Corp. and Yorkshire Shipping Corp. as joint and several Borrowers and (ii)
      the Lender, it was agreed that the Lender would make available to the
      Borrowers a term loan facility of up to
  US$40,000,000.

            

    

     

    
      	
              (B)  

            	
              By
      a master agreement dated 7 December 2007 and made between (i) the
      Borrowers and (ii) the Swap Bank, the Swap Bank has agreed to hedge the
      Borrowers’ exposure under the Loan Agreement to interest rate
      fluctuations.

            

    

     

    
      	
              (C)  

            	
              By
      a supplemental agreement dated 8 January 2010 made between the
      Borrowers, TBS International Limited and the Lender, the Loan Agreement
      and the Master Agreement were further amended and
      supplemented.

            

    

     

    
      	
              (D)  

            	
              The
      execution and delivery to the Mortgagee of this Guarantee is one of the
      conditions precedent to the continued availability of the term loan
      facility under the said Loan
Agreement.

            

    

     

    IT IS AGREED as
follows:

    

    
      	
              1  

            	
              INTERPRETATION

            

    

     

    
      	
              1.1  

            	
              Defined
      expressions.  Words and expressions defined in the Loan
      Agreement shall have the same meanings when used in this Guarantee unless
      the context otherwise requires.

            

    

     

    
      	
              1.2  

            	
              Construction of certain
      terms.  In this
Guarantee:

            

    

     

    “bankruptcy”  includes
a liquidation, receivership or administration and any form of suspension of
payments, arrangement with creditors or reorganisation under any corporate or
insolvency law of any country;

    

    “Loan Agreement” means the loan
agreement referred to in Recital (A) as amended by the Supplemental Agreement
and includes any existing or future amendments or supplements, whether made with
the Guarantor's consent or otherwise.

    

    “Master Agreement” means the
master agreement referred to in Recital (B) (including all Transactions from
time to time entered into and Confirmations from time to time exchanged under
such master agreement).

    

    “Supplemental Agreement” means
the supplemental agreement to the Loan Agreement referred to in Recital
(C).

    

    

    
      	
              1.3  

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

            

    

     

    
      	
              2  

            	
              GUARANTEE

            

    

     

    
      	
              2.1  

            	
              Guarantee and
      indemnity.  The Guarantor unconditionally and
      irrevocably:

            

    

     

    
      	
              (a)  

            	
              guarantees
      the due payment of all amounts payable by the Borrowers under or in
      connection with the Loan Agreement and every other Finance Document
      and any transaction under the Master
Agreement;

            

    

     

    
      	
              (b)  

            	
              undertakes
      to pay to the Mortgagee, on the Mortgagee's demand, any such amount which
      is not paid by the Borrowers or any of them when due and payable;
      and

            

    

     

    
      	
              (c)  

            	
              fully
      indemnifies the Mortgagee on its demand in respect of all claims,
      expenses, liabilities and losses which are made or brought against or
      incurred by the Mortgagee as a result of or in connection with any
      obligation or liability guaranteed by the Guarantor being or becoming
      unenforceable, invalid, void or illegal; and the amount recoverable under
      this indemnity shall be equal to the amount which the Mortgagee would
      otherwise have been entitled to
recover.

            

    

     

    
      	
              2.2  

            	
              No limit on number of
      demands.  The Mortgagee may serve more than one demand
      under Clause 2.1.

            

    

     

    
      	
              3  

            	
              LIABILITY
      AS PRINCIPAL AND INDEPENDENT DEBTOR

            

    

     

    
      	
              3.1  

            	
              Principal and independent
      debtor.  The Guarantor shall be liable under this
      Guarantee as a principal and independent debtor and accordingly it shall
      not have, as regards this Guarantee, any of the rights or defences of a
      surety.

            

    

     

    
      	
              3.2  

            	
              Waiver of rights and
      defences.  Without limiting the generality of Clause 3.1,
      the Guarantor shall neither be discharged by, nor have any claim against
      the Mortgagee in respect of:

            

    

     

    
      	
              (a)  

            	
              any
      amendment or supplement being made to the Finance
    Documents;

            

    

     

    
      	
              (b)  

            	
              any
      arrangement or concession (including a rescheduling or acceptance of
      partial payments) relating to, or affecting, the Finance
      Documents;

            

    

     

    
      	
              (c)  

            	
              any
      release or loss (even though negligent) of any right or Security Interest
      created by the Finance Documents;

            

    

     

    
      	
              (d)  

            	
              any
      failure (even though negligent) promptly or properly to exercise or
      enforce any such right or Security Interest, including a failure to
      realise for its full market value an asset covered by such a Security
      Interest; or

            

    

     

    
      	
              (e)  

            	
              any
      other Finance Document or any Security Interest now being or later
      becoming void, unenforceable, illegal or invalid or otherwise defective
      for any reason, including a neglect to register
  it.

            

    

     

    
      	
              4  

            	
              EXPENSES

            

    

     

    
      	
              4.1  

            	
              Costs of preservation of
      rights, enforcement etc.  The Guarantor shall pay to the
      Mortgagee on its demand the amount of all expenses incurred by the
      Mortgagee in connection with any matter arising out of this Guarantee,
      including any advice, claim or proceedings relating to this
      Guarantee.

            

    

     

    
      	
              4.2  

            	
              Fees and expenses payable under
      Loan Agreement.  Clause 4.1 is without prejudice to the
      Guarantor's liabilities in respect of the Borrowers’ obligations under
      clause 19 of the Loan Agreement (fees and expenses) and under similar
      provisions of other Finance
Documents.

            

    

     

    
      	
              5  

            	
              ADJUSTMENT
      OF TRANSACTIONS

            

    

     

    
      	
              5.1  

            	
              Reinstatement of obligation to
      pay.  The Guarantor shall pay to the Mortgagee on its
      demand any amount which the Mortgagee is required, or agrees, to pay
      pursuant to any claim by, or settlement with, a trustee in bankruptcy of a
      Borrower or of another Security Party (or similar person) on the ground
      that the Loan Agreement or the Master Agreement, or a payment by a
      Borrower or of another Security Party, was invalid or on any similar
      ground.

            

    

     

    
      	
              6  

            	
              PAYMENTS

            

    

     

    
      	
              6.1  

            	
              Method of
      payments.  Any amount due under this Guarantee shall be
      paid:

            

    

     

    
      	
              (a)  

            	
              in
      immediately available funds;

            

    

     

    
      	
              (b)  

            	
              to
      such account as the Mortgagee may from time to time notify to the
      Guarantor;

            

    

     

    
      	
              (c)  

            	
              without
      any form of set-off, cross-claim or condition;
  and

            

    

     

    
      	
              (d)  

            	
              free
      and clear of any tax deduction except a tax deduction which the Guarantor
      is required by law to make.

            

    

     

    
      	
              6.2  

            	
              Grossing-up for
      taxes.  If the Guarantor is required by law to make a tax
      deduction, the amount due to the Mortgagee shall be increased by the
      amount necessary to ensure that the Mortgagee receives and retains a net
      amount which, after the tax deduction, is equal to the full amount that it
      would otherwise have received.

            

    

     

    
      	
              6.3  

            	
              Tax
      Credit.  The provisions of Clause 21.4 of the Loan
      Agreement shall apply to this Guarantee and in relation to any increased
      payment made by the Guarantor under Clause 6.2 as if the same were set out
      in full herein with the necessary
changes.

            

    

     

    
      	
              7  

            	
              INTEREST

            

    

     

    
      	
              7.1  

            	
              Accrual of
      interest.  Any amount due under this Guarantee shall
      carry interest after the second Business Day following the date on which
      the Mortgagee demands payment of it until it is actually paid, unless
      interest on that same amount also accrues under the Loan Agreement or (as
      the case may be) the Master
Agreement.

            

    

     

    
      	
              7.2  

            	
              Calculation of
      interest.  Interest under this Guarantee shall be
      calculated and accrue in the same way as interest under clause 6 of the
      Loan Agreement.

            

    

     

    
      	
              7.3  

            	
              Guarantee extends to interest
      payable under Loan Agreement and Master Agreement.  For
      the avoidance of doubt, it is confirmed that this Guarantee covers all
      interest payable under the Loan Agreement and the Master Agreement,
      including that payable under clause 6 of the Loan Agreement and Section
      2(e) of the Master Agreement.

            

    

     

    
      	
              8  

            	
              SUBORDINATION

            

    

     

    
      	
              8.1  

            	
              Subordination of rights of
      Guarantor.  All rights which the Guarantor at any time
      has (whether in respect of this Guarantee or any other transaction)
      against any Borrower, any other Security Party or their respective assets
      shall be fully subordinated to the rights of the Mortgagee under the
      Finance Documents and in particular, the Guarantor shall
    not:

            

    

     

    
      	
              (a)  

            	
              claim,
      or in a bankruptcy of a Borrower or any other Security Party prove for,
      any amount payable to the Guarantor by a Borrower or any other Security
      Party, whether in respect of this Guarantee or any other
      transaction;

            

    

     

    
      	
              (b)  

            	
              take
      or enforce any Security Interest for any such
  amount;

            

    

     

    
      	
              (c)  

            	
              claim
      to set-off any such amount against any amount payable by the Guarantor to
      a Borrower or any other Security Party;
or

            

    

     

    
      	
              (d)  

            	
              claim
      any subrogation or other right in respect of any Finance Document or any
      sum received or recovered by the Mortgagee under a Finance
      Document.

            

    

     

    
      	
              9  

            	
              ENFORCEMENT

            

    

     

    
      	
              9.1  

            	
              No requirement to commence
      proceedings against the Borrowers.  The Mortgagee will
      not need to commence any proceedings under, or enforce any Security
      Interest created by, the Loan Agreement or any other Finance Document
      before claiming or commencing proceedings under this
      Guarantee.

            

    

     

    
      	
              9.2  

            	
              Conclusive evidence of certain
      matters.  However, as against the
    Guarantor:

            

    

     

    
      	
              (a)  

            	
              any
      judgment or order of a court in England or the Marshall Islands in
      connection with the Loan Agreement and/or the Master Agreement;
      and

            

    

     

    
      	
              (b)  

            	
              any
      statement or admission of a Borrower in connection with the Loan Agreement
      and/or the Master Agreement,

            

    

     

    
      	
               
      

            	
              shall
      be binding and conclusive as to all matters of fact and law to which it
      relates.

            

    

    

    
      	
              9.3  

            	
              Suspense
      account.  The Mortgagee may, for the purpose of claiming
      or proving in a bankruptcy of any Borrower or any other Security Party,
      place any sum received or recovered under or by virtue of this Guarantee
      on a separate suspense or other interest bearing nominal account without
      applying it in satisfaction of the Borrowers’ obligations under the Loan
      Agreement or, as the case may be, the Master
  Agreement.

            

    

     

    
      	
              10  

            	
              REPRESENTATIONS
      AND WARRANTIES

            

    

     

    
      	
              10.1  

            	
              General.  The
      Guarantor represents and warrants to the Mortgagee as
    follows.

            

    

     

    
      	
              10.2  

            	
              Status.  The
      Guarantor is duly incorporated and validly existing under the laws of the
      Ireland.

            

    

     

    
      	
              10.3  

            	
              Corporate
      power.  The Guarantor has the corporate capacity, and has
      taken all corporate action and obtained all consents necessary for
      it:

            

    

     

    
      	
              (a)  

            	
              to
      execute this Guarantee; and

            

    

     

    
      	
              (b)  

            	
              to
      make all the payments contemplated by, and to comply with, this
      Guarantee.

            

    

     

    
      	
              10.4  

            	
              Consents in
      force.  All the consents referred to in Clause 10.3
      remain in force and nothing to the best of the Guarantor’s knowledge and
      belief has occurred which makes any of them liable to
      revocation.

            

    

     

    
      	
              10.5  

            	
              Legal
      validity.  This Guarantee constitutes the Guarantor's
      legal, valid and binding obligations enforceable against the Guarantor in
      accordance with its terms subject to any relevant insolvency laws
      affecting creditors' rights generally and subject to any qualification as
      to matters of law which are specifically referred to in any legal opinion
      delivered to the Lender pursuant to the Supplemental
      Agreement.

            

    

     

    
      	
              10.6  

            	
              No
      conflicts.  The execution by the Guarantor of this
      Guarantee and its compliance with this Guarantee will not involve or lead
      to a contravention of:

            

    

     

    
      	
              (a)  

            	
              any
      law or regulation in force at the date of the Guarantee;
  or

            

    

     

    
      	
              (b)  

            	
              the
      constitutional documents of the Guarantor;
or

            

    

     

    
      	
              (c)  

            	
              any
      contractual or other obligation or restriction which is binding on the
      Guarantor or any of its assets.

            

    

     

    
      	
              10.7  

            	
              No withholding
      taxes.  No tax is imposed in any jurisdiction in which
      the Guarantor is ordinarily resident for tax by way of withholding or
      deduction or otherwise on any payment to be under this
      Agreement.

            

    

     

    
      	
              10.8  

            	
              No
      default.  To the knowledge of the Guarantor, no Event of
      Default or Potential Event of Default has occurred and is
      continuing.

            

    

     

    
      	
              10.9  

            	
              Information.  All
      information which has been provided in writing by or on behalf of the
      Guarantor to the Mortgagee in connection with any Finance Document was to
      the best of the Guarantor’s knowledge and belief true and not misleading
      as at the time it was given; all audited and unaudited accounts which have
      been so provided satisfied the requirements of Clause 11.4; and there has
      been no material adverse change in the financial position or state of
      affairs of the Guarantor from that disclosed in the latest of those
      accounts.

            

    

     

    
      	
              10.10  

            	
              No
      litigation.  No legal or administrative action involving
      the Guarantor has been commenced or taken or, to the Guarantor's
      knowledge, is likely to be commenced or taken which, in either case, would
      be likely to have a material adverse effect on the Guarantor's financial
      position or profitability.

            

    

     

    
      	
              11  

            	
              UNDERTAKINGS

            

    

     

    
      	
              11.1  

            	
              General.  The
      Guarantor undertakes with the Mortgagee to comply with the following
      provisions of this Clause 11 at all times during the Security Period,
      except as the Mortgagee may otherwise
permit.

            

    

     

    
      	
              11.2  

            	
              Information provided to be
      accurate.  All financial and other information which is
      provided in writing by or on behalf of the Guarantor under or in
      connection with this Guarantee will, to the best of the Guarantor’s
      knowledge and belief, be true and not misleading and will not omit any
      material fact or consideration which if disclosed would reasonably be
      expected to adversely affect the decision of a person considering whether
      to enter into the Loan Agreement.

            

    

     

    
      	
              11.3  

            	
              Provision of financial
      statements.  The Guarantor will send to the
      Mortgagee:

            

    

     

    
      	
              (a)  

            	
              as
      soon as possible, but in no event later than 30 June following the end of
      each financial year of the Guarantor, the annual audited accounts of the
      Guarantor; and

            

    

     

    
      	
              (b)  

            	
              as
      soon as possible, but in no event later than 30 days after the end of each
      quarter in each financial year of the Guarantor the unaudited consolidated
      accounts of the Guarantor and its consolidated subsidiaries which are
      certified as to their correctness by its chief financial officer;
      and

            

    

     

    
      	
              (c)  

            	
              together
      with the accounts specified in paragraph (b) above, a compliance
      certificate in the form set out at Schedule 4 of the Loan Agreement
      executed by the chief financial officer of the Guarantor confirming the
      Financial Covenants set out in Schedule 3 of the Loan Agreement have been
      complied with during each fiscal
quarter.

            

    

     

    
      	
              11.4  

            	
              Form of financial
      statements.  All accounts (audited and unaudited)
      delivered under Clause 11.3 will:

            

    

     

    
      	
              (a)  

            	
              be
      prepared in accordance with all applicable laws and generally accepted
      accounting principles of the U.S.A. consistently
  applied;

            

    

     

    
      	
              (b)  

            	
              give
      a true and fair view of the financial condition of the Guarantor and its
      subsidiaries at the date of those accounts and of their profit for the
      period to which those accounts relate;
and

            

    

     

    
      	
              (c)  

            	
              fully
      disclose or provide for all significant liabilities of the Guarantor and
      its subsidiaries.

            

    

     

    
      	
              11.5  

            	
              Shareholder and creditor
      notices.  The Guarantor will send the Mortgagee, at the
      same time as they are despatched, copies of all communications which are
      despatched to the Guarantor's shareholders or creditors or any class of
      them.

            

    

     

    
      	
              11.6  

            	
              Consents.  The
      Guarantor will maintain in force and promptly obtain or renew, and will
      promptly send certified copies to the Mortgagee of, all consents
      required:

            

    

     

    
      	
              (a)  

            	
              for
      the Guarantor to perform its obligations under this
    Guarantee;

            

    

     

    
      	
              (b)  

            	
              for
      the validity or enforceability of this
  Guarantee;

            

    

     

    and the
Guarantor will comply with the terms of all such consents.

    

    
      	
              11.7  

            	
              Further
      Assurance.  The Guarantor
will:

            

    

     

    
      	
              (a)  

            	
              at
      its own cost, do all that it reasonably can to ensure that this Guarantee
      creates the obligations which it purports to create;
  and

            

    

     

    
      	
              (b)  

            	
              without
      limiting the generality of paragraph (a) above, at its own cost, promptly
      register, file, record or enrol this Guarantee with any applicable court
      or authority, pay any applicable stamp, registration or similar tax in
      respect of this Guarantee, give any notice or take any other step which in
      the reasonable opinion of the Mortgagee, is or has become necessary or
      desirable for this Guarantee to be valid, enforceable or admissible in
      evidence.

            

    

     

    
      	
              11.8  

            	
              Notification of
      litigation.  The Guarantor will provide the Mortgagee
      with details of any legal or administrative action involving the Guarantor
      promptly upon becoming aware of the same where such legal or
      administrative action might, if adversely determined, have a material
      adverse effect on the ability of the Guarantor to perform its obligations
      under this Guarantee.

            

    

     

    
      	
              11.9  

            	
               Notification of
      default.  The Guarantor will notify the Mortgagee as soon
      as the Guarantor becomes aware of:

            

    

     

    
      	
              (a)  

            	
              the
      occurrence of an Event of Default or a Potential Event of Default;
      or

            

    

     

    
      	
              (b)  

            	
              any
      matter which indicates that an Event of Default or a Potential Event of
      Default may have occurred and is
continuing;

            

    

     

    and will
thereafter keep the Mortgagee fully up-to-date with all
developments.

    

    
      	
              11.10  

            	
              Maintenance of
      status.  The Guarantor will maintain its separate
      corporate existence under the laws of
Ireland.

            

    

     

    
      	
              11.11  

            	
              No disposal of assets, change
      of business.  The Guarantor will
  not:

            

    

     

    
      	
              (a)  

            	
              transfer,
      lease or otherwise dispose of all or a substantial part of its assets,
      whether by one transaction or a number of transactions, whether related or
      not except in the usual course of its trading operations;
    or

            

    

     

    
      	
              (b)  

            	
              make
      any substantial change to the nature of its business from that existing at
      the date of this Guarantee.

            

    

     

    
      	
              11.12  

            	
              No merger
      etc.  The Guarantor shall not, and shall procure that
      none of its subsidiaries will, enter into any form of merger,
      sub-division, amalgamation or other
  reorganisation.

            

    

     

    
      	
              11.13  

            	
              Chief Executive
      Office.  The Guarantor will maintain its chief executive
      office, and keep its corporate documents and records, at Arthur Cox
      Building, Earlsfort Terrace, Dublin 2,
Ireland.

            

    

     

    
      	
              11.14  

            	
              Compliance with financial
      covenants in Loan Agreement.  The Guarantor will comply
      at all times with the financial covenants set out in Schedule 3 of the
      Loan Agreement.

            

    

     

    
      	
              12  

            	
              JUDGMENTS
      AND CURRENCY INDEMNITY

            

    

     

    
      	
              12.1  

            	
              Judgments relating to Loan
      Agreement or Master Agreement.  This Guarantee shall
      cover any amount payable by the Borrowers under or in connection with any
      judgment relating to the Loan Agreement or Master
    Agreement.

            

    

     

    
      	
              12.2  

            	
              Currency
      indemnity.  In addition, clause 20.4 (currency indemnity)
      of the Loan Agreement shall apply, with any necessary adaptations, in
      relation to this Guarantee.

            

    

     

    
      	
              13  

            	
              SET-OFF

            

    

     

    
      	
              13.1  

            	
              Application of credit
      balances.  The Mortgagee may without prior notice
      following the occurrence of an Event of Default which is
      continuing:

            

    

     

    
      	
              (a)  

            	
              apply
      any balance (whether or not then due) which at any time stands to the
      credit of any account in the name of the Guarantor at any office in any
      country of the Mortgagee in or towards satisfaction of any sum then due
      from the Guarantor to the Mortgagee under this Guarantee;
    and

            

    

     

    
      	
              (b)  

            	
              for
      that purpose:

            

    

     

    
      	
              (i)  

            	
              break,
      or alter the maturity of, all or any part of a deposit of the
      Guarantor;

            

    

     

    
      	
              (ii)  

            	
              convert
      or translate all or any part of a deposit or other credit balance into
      Dollars;

            

    

     

    
      	
              (iii)  

            	
              enter
      into any other transaction or make any entry with regard to the credit
      balance which the Mortgagee considers
  appropriate.

            

    

     

    
      	
              13.2  

            	
              Existing rights
      unaffected.  The Mortgagee shall not be obliged to
      exercise any of its rights under Clause 13.1; and those rights shall be
      without prejudice and in addition to any right of set-off, combination of
      accounts, charge, lien or other right or remedy to which the Mortgagee is
      entitled (whether under the general law or any
  document).

            

    

     

    
      	
              14  

            	
              SUPPLEMENTAL

            

    

     

    
      	
              14.1  

            	
              Continuing
      guarantee.  This Guarantee shall remain in force as a
      continuing security at all times during the Security
    Period.

            

    

     

    
      	
              14.2  

            	
              Rights cumulative,
      non-exclusive.  The Mortgagee's rights under and in
      connection with this Guarantee are cumulative, may be exercised as often
      as appears expedient and shall not be taken to exclude or limit any right
      or remedy conferred by law.

            

    

     

    
      	
              14.3  

            	
              No impairment of rights under
      Guarantee.  If the Mortgagee omits to exercise, delays in
      exercising or invalidly exercises any of its rights under this Guarantee,
      that shall not impair that or any other right of the Mortgagee under this
      Guarantee.

            

    

     

    
      	
              14.4  

            	
              Severability of
      provisions.  If any provision of this Guarantee is or
      subsequently becomes void, illegal, unenforceable or otherwise invalid,
      that shall not affect the validity, legality or enforceability of its
      other provisions.

            

    

     

    
      	
              14.5  

            	
              Guarantee not affected by other
      security.  This Guarantee shall not impair, nor be
      impaired by, any other guarantee, any Security Interest or any right of
      set-off or netting or to combine accounts which the Mortgagee may now or
      later hold in connection with the Loan Agreement or the Master
      Agreement.

            

    

     

    
      	
              14.6  

            	
              Guarantor bound by Loan
      Agreement.  The Guarantor agrees with the Mortgagee to be
      bound by all provisions of the Loan Agreement which are applicable to the
      Security Parties in the same way as if those provisions had been set out
      (with any necessary modifications) in this
  Guarantee.

            

    

     

    
      	
              14.7  

            	
              Applicability of provisions of
      Guarantee to other rights.  Clauses 3 and 17 shall also
      apply to any right of set-off or netting or to combine accounts which the
      Guarantor creates by an agreement entered into at the time of this
      Guarantee or at any later time (notwithstanding that the agreement does
      not include provisions similar to Clauses 3 and 17), being an agreement
      referring to this Guarantee.

            

    

     

    
      	
              14.8  

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

            

    

     

    
      	
              15  

            	
              ASSIGNMENT

            

    

     

    
      	
              15.1  

            	
              Assignment by
      Mortgagee.  The Mortgagee may assign its rights under and
      in connection with this Guarantee to the same extent as it may assign its
      rights under the Loan Agreement.

            

    

     

    
      	
              16  

            	
              NOTICES

            

    

     

    
      	
              16.1  

            	
              Notices to
      Guarantor.  Any notice or demand to the Guarantor under
      or in connection with this Guarantee shall be given by letter or fax
      at:

            

    

     

    TBS
International Public Limited Company

    Arthur
Cox Building

    Earlsfort
Terrace

    Dublin
2

    Ireland

    

    Fax
No:  +353 1 618 0618

    

    
      	
               
      

            	
              with
      a copy to:

            

    

    

    TBS
Shipping Services Inc.

    612 East
Grassy Sprain Road

    Yonkers,
NY  10710

    U.S.A.

    

    Fax
:           +1 914 961
5121

    

    or to such other address which the
Guarantor may notify to the Mortgagee.

    

    
      	
              16.2  

            	
              Application of certain
      provisions of Loan Agreement.  Clauses 27.3, 27.4 and
      27.5 of the Loan Agreement apply to any notice or demand under or in
      connection with this Guarantee.

            

    

     

    
      	
              16.3  

            	
              Validity of
      demands.  A demand under this Guarantee shall be valid
      notwithstanding that it is served:

            

    

     

    
      	
              (a)  

            	
              on
      the date on which the amount to which it relates is payable by the
      Borrowers under the Loan Agreement or, as the case may be, the Master
      Agreement;

            

    

     

    
      	
              (b)  

            	
              at
      the same time as the service of a notice under clause 18.2 (events of
      default) of the Loan Agreement;

            

    

     

    and a
demand under this Guarantee may refer to all amounts payable under or in
connection with the Loan Agreement and the Master Agreement without specifying a
particular sum or aggregate sum.

    

    
      	
              16.4  

            	
              Notices to the
      Mortgagee.  Any notice to the Mortgagee under or in
      connection with this Guarantee shall be sent to the same address and in
      the same manner as notices to the Lender under the Loan
      Agreement.

            

    

     

    
      	
              17  

            	
              INVALIDITY
      OF LOAN AGREEMENT OR MASTER
AGREEMENT

            

    

     

    
      	
              17.1  

            	
              Invalidity of Loan
      Agreement.  In the event
of:

            

    

     

    
      	
              (a)  

            	
              the
      Loan Agreement now being or later becoming, with immediate or
      retrospective effect, void, illegal, unenforceable or otherwise invalid
      for any other reason whatsoever, whether of a similar kind or not;
      or

            

    

     

    
      	
              (b)  

            	
              without
      limiting the scope of paragraph (a), a bankruptcy of a Borrower, the
      introduction of any law or any other matter resulting in a Borrower being
      discharged from liability under the Loan Agreement, or the Loan Agreement
      ceasing to operate (for example, by interest ceasing to
      accrue);

            

    

     

    this
Guarantee shall cover any amount which would have been or become payable under
or in connection with the Loan Agreement if the Loan Agreement had been and
remained entirely valid, legal and enforceable, or that Borrower had not
suffered bankruptcy, or any combination of such events or circumstances, as the
case may be, and that Borrower had remained fully liable under it for
liabilities whether invalidly incurred or validly incurred but subsequently
retrospectively invalidated;  and references in this Guarantee to
amounts payable by the Borrowers under or in connection with the Loan Agreement
shall include references to any amount which would have so been or become
payable as aforesaid.

    

    
      	
              17.2  

            	
              Invalidity of Finance
      Documents.  Clause 17.1 also applies to the Master
      Agreement and each of the other Finance Documents to which the Borrowers
      are a party.

            

    

     

    
      	
              18  

            	
              GOVERNING
      LAW AND JURISDICTION

            

    

     

    
      	
              18.1  

            	
              English
      law.  This Guarantee and any non-contractual obligations
      arising out of or in connection with it shall be governed by, and
      construed in accordance with, English
law.

            

    

     

    
      	
              18.2  

            	
              Exclusive English
      jurisdiction.  Subject to Clause 18.3, the courts of
      England shall have exclusive jurisdiction to settle any disputes which may
      arise out of or in connection with this
  Guarantee.

            

    

     

    
      	
              18.3  

            	
              Choice of forum for the
      exclusive benefit of the Mortgagee.  Clause 18.2 is for
      the exclusive benefit of the Mortgagee, which reserves the
      rights:

            

    

     

    
      	
              (a)  

            	
              to
      commence proceedings in relation to any matter which arises out of or in
      connection with this Guarantee in the courts of any country other than
      England and which have or claim jurisdiction to that matter;
      and

            

    

     

    
      	
              (b)  

            	
              to
      commence such proceedings in the courts of any such country or countries
      concurrently with or in addition to proceedings in England or without
      commencing proceedings in England.

            

    

     

    The
Guarantor shall not commence any proceedings in any country other than England
in relation to a matter which arises out of or in connection with this
Guarantee.

    

    
      	
              18.4  

            	
              Process
      agent.  The Guarantor irrevocably appoints Globe Maritime
      Limited its registered office for the time being, presently at 5th Floor,
      St. Magnus House, 3 Lower Thames  Street, London EC3R 6HE, to
      act as its agent to receive and accept on its behalf any process or other
      document relating to any proceedings in the English courts which are
      connected with this Guarantee.

            

    

     

    
      	
              18.5  

            	
              Mortgagee’s rights
      unaffected.  Nothing in this Clause 18 shall exclude or
      limit any right which the Mortgagee may have (whether under the law of any
      country, an international convention or otherwise) with regard to the
      bringing of proceedings, the service of process, the recognition or
      enforcement of a judgment or any similar or related matter in any
      jurisdiction.

            

    

     

    
      	
              18.6  

            	
              Meaning of
      “proceedings”.  In this Clause 18, “proceedings” means
      proceedings of any kind, including an application for a provisional or
      protective measure.

            

    

     

    THIS GUARANTEE has been
executed and delivered as a deed on the date stated at the beginning of this
Guarantee.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXECUTION
PAGE

     

    

    
      	
              GUARANTOR

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
              SIGNED
      and DELIVERED as a DEED

            	
              )

            	 
      	 
      
	
              by
      Christophil B. Costas

            	
              )

            	
              /s/
      Christophil B. Costas

            	 
      
	
              for
      and on behalf of

            	
              )

            	 
      	 
      
	
              TBS
      INTERNATIONAL PUBLIC

            	
              )

            	 
      	 
      
	
              LIMITED
      COMPANY

            	
              )

            	 
      	 
      
	
              in
      the presence of:

            	
              )

            	
              /s/
      Lorraine Brown

            	 
      
	 
      	 
      	
              Lorraine
      Brown

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
              LENDER

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
              SIGNED
by

            	
              )

            	
              /s/
      John Hafelfinger

            	
              /s/
      R Nenner

            
	
              for
      and on behalf of

            	
              )

            	
              John
      Hafelfinger

            	
              R
      Nenner

            
	
              CREDIT
      SUISSE AG

            	
              )

            	 
      	 
      
	
              in
      the presence of:

            	
              )

            	
              /s/
      Mark Bamford

            	 
      
	 
      	 
      	
              Mark
      Bamfordex_10-17.htm

    TBS INTERNATIONAL PLC
& SUBSIDIARIES                EXHIBIT
10.17

    
 

    

    

      

      Dated: as
of December 31, 2009

       

      BEDFORD
MARITIME CORP.

      BRIGHTON
MARITIME CORP.

      HARI
MARITIME CORP.

      PROSPECT
NAVIGATION CORP.

      HANCOCK
NAVIGATION CORP

      COLUMBUS
MARITIME CORP.

      and

      WHITEHALL
MARINE TRANSPORT CORP.

      as joint
and several Borrowers

       

      TBS
INTERNATIONAL LIMITED

      as
Guarantor

       

      DVB
GROUP MERCHANT BANK (ASIA) LTD.

      as
Lender

       

      DVB
GROUP MERCHANT BANK (ASIA) LTD.

      as
Facility Agent and Security Trustee

       

      -and-

       

      DVB
BANK SE

      THE
GOVERNOR AND COMPANY OF THE BANK OF IRELAND

      and

      NATIXIS

      as Swap
Banks

      

      _______________________________________________________

      

      SECOND
AMENDATORY AGREEMENT

      ______________________________________________________

      

      Amending
and Supplementing the Loan Agreement dated as of January 16, 2008,

      as
amended by a First Amendatory Agreement dated as of March 23, 2009

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SECOND
AMENDATORY AGREEMENT dated as of December 31, 2009 (this “Second Amendatory
Agreement”)

      

      AMONG

      

      
        	
                (1)  

              	
                BEDFORD
      MARITIME CORP., BRIGHTON MARITIME CORP., HARI MARITIME CORP., PROSPECT
      NAVIGATION CORP., HANCOCK NAVIGATION CORP., COLUMBUS MARITIME CORP. and
      WHITEHALL MARINE TRANSPORT CORP., each a corporation organized and
      existing under the law of the Republic of The Marshall Islands, as joint
      and several borrowers (each, a “Borrower” and together,
      the “Borrowers”);

              

      

       

      
        	
                (2)  

              	
                TBS
      INTERNATIONAL LIMITED, a company organized and existing under the law of
      Bermuda, as guarantor (the “Guarantor”);

              

      

       

      
        	
                (3)  

              	
                DVB
      GROUP MERCHANT BANK (ASIA) LTD., acting through its office at 77 Robinson
      Road 30-02, Singapore, as lender (in such capacity, the “Lender”);

              

      

       

      
        	
                (4)  

              	
                DVB
      GROUP MERCHANT BANK (ASIA) LTD., acting through its office at 77 Robinson
      Road 30-02, Singapore, as facility agent (in such capacity, the “Facility Agent”) for the
      Lender and as security trustee (in such capacity, the “Security Trustee”) for
      the Lender and the Swap Banks; and

              

      

       

      
        	
                (5)  

              	
                DVB
      BANK SE (as successor-in-interest to DVB Bank AG), acting through its
      office at Platz der Republik 6, 60325 Frankfurt/Main, Germany, THE
      GOVERNOR AND COMPANY OF THE BANK OF IRELAND, acting through its office at
      Head Office, Building A3, Lower Baggot Street, Dublin 2, Ireland, and
      NATIXIS, acting through its office at BP 4 - F-75060, Paris Cedex 02,
      France, as swap banks (each, a “Swap Bank” and together,
      the “Swap
      Banks”).

              

      

       

      WITNESSETH
THAT:

      

      WHEREAS, the Borrowers, the
Guarantor, the Lender, the Facility Agent, the Security Trustee, the Swap Banks
and others are parties to a Loan Agreement dated as of January 16, 2008 (the
“Original Loan Agreement”), as amended
by a First Amendatory Agreement dated as of March 23, 2009 (the “First Amendatory Agreement”;
and the Original Loan Agreement, as amended by the First Amendatory Agreement,
the “Loan
Agreement”).

      

      WHEREAS, the waivers granted
pursuant to Clause 3.2 of the First Amendatory Agreement in respect of Clauses
10.1(x) and 10.3(a) of the Original Loan Agreement will expire as of 12:01 am on
January 1, 2010 (the “Specified
Waivers”).

      

      WHEREAS, upon the terms and
conditions stated herein, the parties hereto have agreed pursuant to Clause
19.1(b) of the Loan Agreement to:

      

      
        	
                (a)  

              	
                amend
      certain provisions of the Loan Agreement;
and

              

      

      

      
        	
                (b)  

              	
                extend
      the Specified Waivers until the expiration of the Waiver Period (as
      defined below).

              

      

      

      NOW, THEREFORE, in
consideration of the premises set forth above, the covenants and agreements
hereinafter set forth, and other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:

      

      
        	
                1  

              	
                DEFINITIONS

              

      

      

      
        	
                1.1  

              	
                Defined
      terms.  Capitalized terms used but not defined herein
      shall have the meaning assigned such terms in the Loan
      Agreement.  In addition:

              

      

      

      “Waiver Period” means the
period commencing on January 1, 2010 at 12:01 a.m. and ending on the earliest to
occur of (a) April 1, 2010 at 12:00 a.m. Eastern Time and (b) the occurrence
after the commencement of the Waiver Period of any Event of Default, including,
without limitation, any failure to comply with the provisions of this Second
Amendatory Agreement.

      

      
        	
                2  

              	
                AMENDMENTS
      TO THE LOAN AGREEMENT

              

      

       

      
        	
                2.1  

              	
                Amendments.  Pursuant
      to Clause 19.1(b) of the Loan Agreement, subject to fulfillment or waiver
      of the conditions subsequent stated in Clause 5 below, the parties hereto
      agree to amend the Loan Agreement as follows with effect on and from the
      date hereof:

              

      

      

      
        	
                (a)  

              	
                The
      definition of “Bank of America Credit Facility” in Clause 1.1 is amended
      and restated to read as follows:

              

      

      

      ““Bank of America Credit Facility
Agreement” means Amended and Restated Credit Agreement dated as of March
26, 2008, as amended or supplemented from time to time, among Albemarle Maritime
Corp., Arden Maritime Corp., Avon Maritime Corp., Birnam Maritime Corp., Bristol
Maritime Corp., Chester Shipping Corp., Cumberland Navigation Corp., Darby
Navigation Corp., Dover Maritime Corp., Elrod Shipping Corp., Exeter Shipping
Corp., Frankfort Maritime Corp., Glenwood Maritime Corp., Hansen Shipping Corp.,
Hartley Navigation Corp., Henley Maritime Corp., Hudson Maritime Corp., Jessup
Maritime Corp., Montrose Maritime Corp., Oldcastle Shipping Corp., Quentin
Navigation Corp., Rector Shipping Corp., Remsen Navigation Corp., Sheffield
Maritime Corp., Sherman Maritime Corp., Sterling Shipping Corp., Stratford
Shipping Corp., Vedado Maritime Corp., Vernon Maritime Corp., Windsor Maritime
Corp. and other persons named therein from time to time as Borrowers, (ii) the
Guarantor as Holdings, (iii) TBS Shipping Services Inc. as Administrative
Borrower, (iv) each lender from time to time party thereto as Lenders and (v)
Bank of America, N.A. as Administrative Agent, Swing Line Lender and L/C Issuer,
upon the terms and conditions of which a $267.5 million credit facility was made
available to the Borrowers named therein;”

      

      
        	
                (b)  

              	
                The
      definition of “Bank of America Credit Facility Financial Covenants” in
      Clause 1.1 is amended and restated to read as
  follows:

              

      

      

      ““Bank of America Credit Facility
Financial Covenants” means the covenants stated in Section 7.13 of the
Bank of America Credit Facility Agreement;”

      

      
        	
                (c)  

              	
                The
      definition of “Margin” in Clause 1.1 is amended and restated to read as
      follows:

              

      

      

      ““Margin” means 5.00 percent per
annum;

      

      
        	
                (d)  

              	
                The
      definition of “RBS Credit Facility” in Clause 1.1 is amended and restated
      to read as follows:

              

      

      

      ““RBS Credit Facility Agreement”
means the Loan Agreement dated March 29, 2007, as amended or supplemented from
time to time, among Argyle Maritime Corp., Caton Maritime Corp., Dorchester
Maritime Corp., Longwoods Maritime Corp., McHenry Maritime Corp. and Sunswyck
Maritime Corp. as Borrowers, each lender from time to time party thereto as
Lenders, The Royal Bank of Scotland plc as Mandated Lead Arranger and The Royal
Bank of Scotland plc as Bookrunner, Agent, Security Trustee and Swap Bank, upon
the terms and conditions of which a $150.0 million credit facility was made
available to the Borrowers named therein;”

      

      
        	
                (e)  

              	
                The
      following definitions are added to Clause
1.1:

              

      

      

      ““AIG Credit Facility Agreement”
means the Loan Agreement dated February 29, 2008, as amended or supplemented
from time to time, among Amoros Maritime Corp., Lancaster Maritime Corp. and
Chatham Maritime Corp. as Borrowers, TBS International Limited, as Parent
Guarantor and Sherwood Shipping Corp., as Guarantor, and AIG Commercial
Equipment Finance, Inc., as Lender, upon the terms and conditions of which a $35
million credit facility was made available to the Borrowers named
therein;”

      

      ““Berenberg Credit Facility Agreement”
means the Loan Agreement dated June 19, 2008, as amended or supplemented from
time to time, between Grainger Maritime Corp., as Borrower, and Joh. Berenberg,
Gossler & Co. KG, as Lender, upon the terms and conditions of which a $13
million credit facility was made available to the Borrowers named
therein;”

      

      ““Commerzbank Credit Facility
Agreement” means the Loan Agreement dated May 28, 2008, as amended or
supplemented from time to time, between Dyker Maritime Corp. as Borrower, and
Commerzbank AG, as Lender, upon the terms and conditions of which a $12.5
million credit facility was made available to the Borrowers named
therein;”

      

      ““Credit Suisse Credit Facility
Agreement” means the Loan Agreement dated December 7, 2007, as amended or
supplemented from time to time, among Claremont Shipping Corp. and Yorkshire
Shipping Corp. as Borrowers, and Credit Suisse, as Lender, upon the terms and
conditions of which a $40 million credit facility was made available to the
Borrowers named therein;” and

      

      ““RBS Guarantee Facility
Agreement” means the Facility Agreement dated March 29, 2007, as amended
or supplemented from time to time, among  Argyle Maritime Corp., Caton
Maritime Corp., Dorchester Maritime Corp., Longwoods Maritime Corp., McHenry
Maritime Corp. and Sunswyck Maritime Corp. as Borrowers and The Royal Bank of
Scotland plc as Lender, upon the terms and conditions of which a $84 million
guarantee facility was made available to the Borrowers named
therein;”

      

      
        	
                (f)  

              	
                Clause
      10.2(h) is amended and restated to read as
  follows:

              

      

      

      
        	
                 
      

              	
                “(i)

              	
                none
      of the Borrowers shall incur any Financial Indebtedness other than (A) the
      Loan, (B) in the usual course of business, (C) as permitted by the Finance
      Documents and (D) Financial Indebtedness that is fully subordinated to the
      Loan; and

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                from
      March 23, 2009 until 12:00 a.m. on April 1, 2010, the Guarantor Group
      shall not, on a consolidated basis, incur any Financial Indebtedness other
      than:

              

      

      

      
        	
                (1)  

              	
                the
      Loan;

              

      

       

      
        	
                (2)  

              	
                in
      the usual course of business;

              

      

       

      
        	
                (3)  

              	
                pursuant
      to the AIG Credit Facility
Agreement;

              

      

       

      
        	
                (4)  

              	
                pursuant
      to the Bank of America Credit Facility
  Agreement;

              

      

       

      
        	
                (5)  

              	
                pursuant
      to the Berenberg Credit Facility
Agreement;

              

      

       

      
        	
                (6)  

              	
                pursuant
      to the Commerzbank Credit Facility
Agreement;

              

      

       

      
        	
                (7)  

              	
                pursuant
      to the Credit Suisse Credit Facility
Agreement;

              

      

       

      
        	
                (8)  

              	
                pursuant
      to the RBS Credit Facility
Agreement;

              

      

       

      
        	
                (9)  

              	
                pursuant
      to the RBS Guarantee Facility Agreement;
and

              

      

       

      
        	
                (10)  

              	
                Financial
      Indebtedness that is fully subordinated to the Guarantors’ obligations
      under Clause 21 of the Loan
Agreement;”

              

      

       

      
        	
                (g)  

              	
                Clause
      10.2(i) is amended and restated to read as
  follows:

              

      

      

      
        	
                 
      

              	
                “(i)

              	
                (A)
      from March 23, 2009 until 12:00 a.m. on April 1, 2010 or (B) at any time
      thereafter if an Event of Default shall have occurred and so long as such
      Event of Default shall be continuing, the Guarantor shall
    not:

              

      

      

      
        	
                 
      

              	
                (x)

              	
                declare
      or pay any dividends or return any capital to any equity holder or
      authorize or make any other distribution, payment or delivery of property
      or cash to any equity holder as such (collectively, a “Distribution”);

              

      

      

      
        	
                 
      

              	
                (y)

              	
                redeem,
      retire, purchase or otherwise acquire, directly or indirectly, for value,
      any share of any class of its capital stock or other form of equity
      interest (or require any rights, options or warrants relating thereto but
      not including convertible debt) now or hereafter outstanding
      (collectively, a “Redemption”);
      or

              

      

      

      (z)           set
aside any funds for any of the foregoing purposes;

      

      and as of
the date immediately preceding the date on which the Guarantor is no longer
prohibited from declaring or making a Distribution or a Redemption, and the
Guarantor intends to declare or make a Distribution or Redemption, the Guarantor
shall establish to the reasonable satisfaction of the Facility Agent that no
Event of Default has occurred and is continuing or would occur from the
declaring or making of any such Distribution or Redemption;

      

      
        	
                 
      

              	
                (ii)

              	
                if
      an Event of Default shall have occurred and so long as such Event of
      Default shall be continuing, none of the Borrowers shall (x) declare or
      make any Distribution or Redemption, (y) repay any subordinated loans or
      (z) set aside any funds for any of the foregoing
  purposes;”

              

      

      

      
        	
                (h)  

              	
                Clause
      13.1(q) is amended and restated to read as
  follows:

              

      

      

      
        	
                 
      

              	
                “(q)

              	
                the
      Guarantor Group fails to comply with the Bank of America Credit Facility
      Financial Covenants; or”

              

      

      

      
        	
                3  

              	
                EXTENSION
      OF SPECIFIED WAIVERS

              

      

       

      
        	
                3.1  

              	
                Extension of Specified
      Waivers.  Pursuant to Clause 19.1(b) of the Loan
      Agreement, the Credit Parties agree to extend temporarily the waiver of
      compliance by the Obligors with the requirements of Clauses 10.1(x) and
      10.3(a) of the Loan Agreement during the Waiver Period (and for the
      avoidance of doubt the Obligors’ compliance with the requirements of
      Clauses 10.1(x) and 10.3(a) of the Loan Agreement shall be reinstated
      immediately upon the expiration of the Waiver Period and shall be required
      at all times thereafter).

              

      

      

      
        	
                3.2  

              	
                Covenants.  In
      consideration of the Credit Parties’ agreement in Clause 3.1 to extend the
      Specified Waivers temporarily during the Waiver Period, so long as any
      Lender shall have any Commitment under the Loan Agreement, as amended
      hereby, or any Secured Liabilities shall remain unpaid or unsatisfied, the
      Guarantor Group shall not, on a consolidated
  basis:

              

      

      

      
        	
                (a)  

              	
                for
      each calendar month ending on or after January 1, 2010, permit Qualified
      Cash of the Loan Parties (other than the Limited Guarantors), to be less
      than the greater of (i) $25,000,000 or (ii) $40,000,000 minus
      any prepayment of Indebtedness made during such calendar month as
      permitted after giving effect to Amendment No. 2 to the Bank of America
      Credit Facility Agreement, of which a minimum average balance of
      $9,375,000 in any such calendar month shall be deposited with Bank of
      America, N.A.;

              

      

      

      
        	
                (b)  

              	
                permit
      the Consolidated Interest Charges Coverage Ratio as of the four fiscal
      quarters ending December 31, 2009 to be less than 1.75:1.00;
      and

              

      

      

      
        	
                (c)  

              	
                prepay,
      redeem, purchase, defease or otherwise satisfy prior to the scheduled
      maturity thereof, in any manner, or make any payment in violation of any
      subordination terms of, any Indebtedness,
  except:

              

      

      

      
        	
                 
      

              	
                (i)

              	
                the
      prepayment of the Credit Extensions in accordance with the terms of the
      Bank of America Credit Facility
Agreement;

              

      

      

      
        	
                 
      

              	
                (ii)

              	
                regularly
      scheduled or required repayments, mandatory prepayments or redemptions of
      Indebtedness described on Schedule 7.02 of the Bank of America Credit
      Facility Agreement in respect of the RBS Credit Facility Agreement, the
      Credit Suisse Credit Facility Agreement, the AIG Credit Facility
      Agreement, the Commerzbank Credit Facility Agreement and the Berenberg
      Credit Facility Agreement; and

              

      

      

      
        	
                 
      

              	
                (iii)

              	
                other
      prepayments of Indebtedness described on Schedule 7.02 the Bank of America
      Credit Facility Agreement in respect of the RBS Credit Facility Agreement,
      the Credit Suisse Credit Facility Agreement, the AIG Credit Facility
      Agreement, the Commerzbank Credit Facility Agreement and the Berenberg
      Credit Facility Agreement,

              

      

      

      provided that (A) any such
prepayment of Indebtedness corresponds to an amortization payment due during the
Waiver Period and that was otherwise due under such loan facility without giving
effect to any amendment or modification occurring after the Amendment No. 1
Effective Date and (B) all such prepayments of Indebtedness shall occur on or
after January 4, 2010.

      

      For
purposes of (a), (b) and (c) above, all capitalized terms not otherwise defined
herein shall have the meaning assigned to such terms in the Bank of America
Credit Facility Agreement.

      

      
        	
                4  

              	
                RELEASE

              

      

       

      
        	
                4.1  

              	
                Release.

              

      

      

      
        	
                (a)  

              	
                In
      consideration of the Lender, the Facility Agent, the Security Trustee and
      the Swap Banks entering into this Second Amendatory Agreement, each of the
      Obligors acknowledges and agrees
that:

              

      

      

      
        	
                (i)  

              	
                such
      Obligor does not have any claim or cause of action against any Credit
      Party (or any of such Credit Party’s respective directors, officers,
      employees or agents);

              

      

       

      
        	
                (ii)  

              	
                such
      Obligor does not have any offset right, counterclaim or defense of any
      kind against any of its respective Secured Liabilities to any Credit
      Party; and

              

      

       

      
        	
                (iii)  

              	
                each
      of the Credit Parties has heretofore properly performed and satisfied in a
      timely manner all of their respective obligations to the
      Obligors.

              

      

       

      
        	
                (b)  

              	
                To
      eliminate any possibility that any past conditions, acts, omissions,
      events, circumstances or matters would impair or otherwise adversely
      affect any Credit Party’s rights, interests, contracts, collateral
      security or remedies, each Obligor unconditionally releases, waives and
      forever discharges:

              

      

      

      
        	
                (i)  

              	
                any
      and all liabilities, obligations, duties, promises or indebtedness of any
      kind of any Credit Party to such Obligor, except the obligations to be
      performed by any Credit Party on or after the date hereof as expressly
      stated in this Second Amendatory Agreement, the Loan Agreement and the
      other Finance Documents; and

              

      

       

      
        	
                (ii)  

              	
                all
      claims, offsets, causes of action, suits or defenses of any kind
      whatsoever (if any), whether arising at law or in equity, whether known or
      unknown, which such Obligor might otherwise have against any Credit Party
      or any of its directors, officers, employees or
  agents,

              

      

       

      in either
case (i) or (ii), on account of any past or presently existing condition, act,
omission, event, contract, liability, obligation, indebtedness, claim, cause of
action, defense, circumstance or matter of any kind.

       

      
        	
                5  

              	
                CONDITIONS
      SUBSEQUENT

              

      

       

      
        	
                5.1  

              	
                Conditions
      subsequent.  The effectiveness of this Second Amendatory
      Agreement shall be subject to the following conditions subsequent being
      completed to the reasonable satisfaction of the Facility Agent on or
      before 5:00 p.m. New York time on January 29, 2010 (the “Conditions Subsequent
      Deadline”):

              

      

       

      (a)           The
Facility Agent shall have received:

       

      
        	
                (i)  

              	
                an
      original of this Second Amendatory Agreement, duly executed by the parties
      hereto;

              

      

       

      
        	
                (ii)  

              	
                a
      copy of the Bank of America Credit Facility Agreement and any amendment
      thereto, duly executed by the parties thereto, certified as of a date
      reasonably near the date of this Second Amendatory Agreement by a director
      or the president or the secretary (or equivalent officer) of the Guarantor
      as being a true and correct copy
thereof;

              

      

       

      
        	
                (iii)  

              	
                an
      original addendum to the Mortgage in respect of each of the Ships, each
      such addendum to be in form and substance satisfactory to the Facility
      Agent and duly executed by the parties thereto, together with documentary
      evidence that the relevant Mortgage addendum has been duly recorded
      according to the laws of the Republic of Liberia and, if required by
      Philippine law, that a cautionary notice with respect to such Mortgage
      addendum has been filed in the Philippine Bareboat
    Registry;

              

      

       

      
        	
                (iv)  

              	
                copies
      of the constitutional documents, and each amendment thereto, of each
      Obligor, certified as of a date reasonably near the date of this Second
      Amendatory Agreement by a director or the president or the secretary (or
      equivalent officer) of such party as being a true and correct copy
      thereof;

              

      

       

      
        	
                (v)  

              	
                copies
      of certificates dated as of a date reasonably near the date of this Second
      Amendatory Agreement, certifying that each Obligor is duly incorporated
      (or formed) and in goodstanding under the laws of such party’s
      jurisdiction of incorporation (or formation) and, in respect of each
      Borrower, that such Borrower is duly qualified and in goodstanding as a
      foreign maritime entity under the law of the Republic of
      Liberia;

              

      

       

      
        	
                (vi)  

              	
                copies
      of resolutions of the directors (or equivalent governing body) (and where
      required, the shareholders or equivalent equity holders) of each Obligor
      authorizing the execution of each of this Second Amendatory Agreement and
      authorizing named officers or attorneys-in-fact to execute such documents,
      certified as of a date reasonably near the date of this Second Amendatory
      Agreement by a director or the president or the secretary (or equivalent
      officer) of such party as being a true and correct copy
      thereof;

              

      

       

      
        	
                (vii)  

              	
                the
      original of any power of attorney under which this Second Amendatory
      Agreement and any document to be executed pursuant to this Second
      Amendatory Agreement is to be executed on behalf of an
      Obligor;

              

      

       

      
        	
                (viii)  

              	
                copies
      of all consents which any of the Obligors requires to enter into, or make
      any payment or perform any of its obligations under or in connection with
      the transactions contemplated by this Second Amendatory Agreement, each
      certified as of a date reasonably near the date of this Second Amendatory
      Agreement by a director or the president or the secretary (or equivalent
      officer) of such party as being a true and correct copy thereof, or
      certification by such director, president or secretary (or equivalent
      officer) that no such consents are
required;

              

      

       

      
        	
                (ix)  

              	
                a
      certificate of each Obligor, signed on behalf of such party by a director
      or the president or the secretary (or equivalent officer) of the
      Guarantor, dated as of a date reasonably near the date of this Second
      Amendatory Agreement, certifying as
to:

              

      

       

      
        	
                1.  

              	
                the
      absence of any proceeding for the dissolution or liquidation of such
      party;

              

      

       

      
        	
                2.  

              	
                the
      veracity in all material respects of the representations and warranties
      contained in the Loan Agreement, as amended hereby, as though made on and
      as of the date of this Second Amendatory Agreement, except for (A)
      representations or warranties which expressly relate to an earlier date in
      which case such representations and warranties shall be true and correct,
      in all material respects, as of such earlier date or (B) representations
      or warranties which are no longer true as a result of a transaction
      expressly permitted by the Loan
Agreement;

              

      

       

      
        	
                3.  

              	
                the
      absence of any material misstatement of fact in any information provided
      by any of the Obligors to the Facility Agent or the Lender or the Swap
      Banks since the date of the Original Loan Agreement and that such
      information did not omit to state any material fact necessary to make the
      statements therein, in the light of the circumstances under which they
      were made, not misleading; and

              

      

       

      
        	
                4.  

              	
                the
      absence of any event occurring and continuing, or resulting from this
      Second Amendatory Agreement, that constitutes a Potential Event of Default
      or an Event of Default.

              

      

       

      
        	
                (x)  

              	
                a
      favorable opinion of Cardillo & Corbett, New York, Liberian and
      Marshall Islands counsel to the Borrowers, in form, scope and substance
      satisfactory to the Credit Parties;

              

      

       

      
        	
                (xi)  

              	
                a
      favorable opinion of Conyers Dill & Pearman, Bermuda counsel to the
      Guarantor, in form, scope and substance satisfactory to the Credit
      Parties; and

              

      

       

      
        	
                (xii)  

              	
                if
      a cautionary notice with respect to each Mortgage addendum must be filed
      in the Philippine Bareboat Registry, a favorable opinion of Sycip,
      Salazar, Hernandez & Gatmaitman, Philippine counsel to the Credit
      Parties, in form, scope and substance satisfactory to the Credit
      Parties;

              

      

       

      
        	
                (xiii)  

              	
                No
      Event of Default or Potential Event of Default shall have occurred and be
      continuing and there shall have been no material adverse change in the
      financial condition, operations or business prospects of the Obligors
      since the date of the Loan Agreement;
and

              

      

       

      
        	
                (b)  

              	
                The
      Obligors shall have paid to the Facility Agent an amendment fee of
      $89,660.

              

      

      

      
        	
                5.2  

              	
                Waiver of conditions
      subsequent.  The Facility Agent, with the consent of the
      Lender and the Swap Banks, may waive one or more of the conditions
      referred to in Clause 5.1 provided that the
      Obligors deliver to the Facility Agent a written undertaking to satisfy
      such conditions within ten (10) Business Days after the Facility Agent
      grants such waiver (or such longer period as the Facility Agent may
      specify).

              

      

       

      
        	
                5.3  

              	
                Failure to complete conditions
      subsequent.  If the Obligors fail to complete all or any
      of the conditions subsequent required by Clause 5.1(a) by the Conditions
      Subsequent Deadline, the Obligors acknowledge and agree that the
      amendments made in Clause 2 hereof and the extension of the Specified
      Waivers made in Clause 3 hereof shall be null, void and of no effect
      whatsoever and that the Credit Parties shall be entitled to all rights and
      to exercise all remedies afforded to them under the terms of the Loan
      Agreement (all of which are expressly reserved) as if (a) such amendments
      had not been made and (b) the Specified Waivers had not been extended by
      this Agreement.

              

      

       

      
        	
                6  

              	
                EFFECT
      OF AMENDMENTS AND WAIVERS

              

      

       

      
        	
                6.1  

              	
                References.  Each
      reference in the Original Loan Agreement to “this Agreement”, “hereunder”,
      “hereof”, “herein” or words of like import, and each reference to the
      “Loan Agreement” in any of the other Finance Documents, shall mean and
      refer to the Original Loan Agreement as amended hereby and by the First
      Amendatory Agreement.

              

      

      

      
        	
                6.2  

              	
                Effect of amendments and
      waivers.  Subject to the terms of this Second Amendatory
      Agreement, with effect on and from the date hereof (subject to fulfillment
      or waiver of the conditions subsequent stated in Clause 5 above) the Loan
      Agreement shall be, and shall be deemed by this Second Amendatory
      Agreement to have been, amended upon the terms and conditions stated
      herein and, as so amended, the Loan Agreement shall continue to be binding
      on each of the parties to it in accordance with its terms as so
      amended.  In addition, each of the Finance Documents shall be,
      and shall be deemed by this Second Amendatory Agreement to have been,
      amended as follows:

              

      

      

      
        	
                (a)

              	
                the
      definition of, and references throughout each of such Finance Documents
      to, the “Loan Agreement” and any of the other Finance Documents shall be
      construed as if the same referred to the Original Loan Agreement and those
      Finance Documents as amended or supplemented by this Second Amendatory
      Agreement and the First Amendatory Agreement;
  and

              

      

       

      
        	
                (b)

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

              

      

      

      
        	
                6.3  

              	
                No other amendments or waivers;
      ratification.  Except as amended, waived or temporarily
      waived hereby, all other terms and conditions of the Loan Agreement and
      the other Finance Documents remain unchanged and in full force and effect
      and are hereby ratified and confirmed in all respects.  Without
      limiting the foregoing, the Guarantor acknowledges and agrees that the
      Guaranty remains in full force and effect.  The Obligors
      acknowledge and agree that the Loan Agreement shall, together with this
      Second Amendatory Agreement, be read and construed as a single
      agreement.

              

      

      

      
        	
                7  

              	
                REPRESENTATIONS
      AND WARRANTIES

              

      

       

      
        	
                7.1  

              	
                Authority.  The
      execution and delivery by each of the Obligors of this Second Amendatory
      and the performance by each Obligor of all of its agreements and
      obligations under the Loan Agreement, as amended hereby, are within such
      Obligor’s corporate authority and have been duly authorized by all
      necessary corporate action on the part of such
  Obligor.

              

      

       

      
        	
                7.2  

              	
                Enforceability.  This
      Second Amendatory Agreement and the Loan Agreement, as amended hereby,
      constitute the legal, valid and binding obligations of each of the
      Obligors party hereto and are enforceable against such Obligors in
      accordance with their terms, except as enforceability is limited by
      bankruptcy, insolvency, reorganization, moratorium or other laws relating
      to or affecting generally the enforcement of, creditors’ rights and except
      to the extent that availability of the remedy of specific performance or
      injunctive relief is subject to the discretion of the court before which
      any proceeding may be brought.

              

      

       

      
        	
                8  

              	
                MISCELLANEOUS

              

      

       

      
        	
                8.1  

              	
                Governing
      law.  THIS SECOND AMENDATORY
      AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW
      OF THE STATE OF NEW YORK, EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
      CHOICE OF LAW (OTHER THAN THE NEW YORK GENERAL OBLIGATIONS LAW
      §5-1401).

              

      

       

      
        	
                8.2  

              	
                Counterparts.  This
      Second Amendatory Agreement may be executed in any number of counterparts,
      all of which taken together shall constitute one and the same
      instrument.

              

      

       

      
        	
                8.3  

              	
                Severability.  Any
      provision of this Second Amendatory Agreement that is prohibited or
      unenforceable in any jurisdiction shall, as to such jurisdiction, be
      ineffective to the extent of such prohibition or unenforceability without
      invalidating or affecting the validity or enforceability of such provision
      in any other jurisdiction.

              

      

       

      
        	
                8.4  

              	
                Payment of
      expenses.  The Obligors agree to pay or reimburse each of
      the Credit Parties for all reasonable expenses in connection with the
      preparation, execution and carrying out of this Second Amendatory
      Agreement and any other document in connection herewith or therewith,
      including but not limited to, reasonable fees and expenses of any counsel
      whom the Credit Parties may deem necessary or appropriate to retain, any
      duties, registration fees and other charges and all other reasonable
      out-of-pocket expenses incurred by any of the Credit Parties in connection
      with the foregoing.

              

      

       

      
        	
                8.5  

              	
                Headings and
      captions.  The headings captions in this Second
      Amendatory Agreement are for convenience of reference only and shall not
      define or limit the provisions
hereof.

              

      

       

      

      [SIGNATURE
PAGES FOLLOW]

       

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    WHEREFORE, the
parties hereto have caused this Second Amendatory Agreement to be executed as of
the date first above written.

     

    
 

    
      	
              BEDFORD
      MARITIME CORP., as Borrower

               

               

               

              By:  /s/ William J.
      Carr                                       
      

              William J. Carr 

              President 

               

            	
              DVB
      GROUP MERCHANT BANK (ASIA) LTD., as Lender

               

               

              By 
      /s/ Martijn Van
      Tuyl                                  
      

              Martijn van Tuyl

              Attorney-in-Fact

               

            
	
              BRIGHTON
      MARITIME CORP., as Borrower

               

               

               

              
                By:  /s/ William J.
      Carr                                       
      

                William J. Carr 

                President 

              

               

            	
              DVB
      GROUP MERCHANT BANK (ASIA) LTD., as Facility Agent and Security
      Trustee

               

               

              By:/s/ Martijn Van
      Tuyl                                 

              Martijn van Tuyl

              Attorney-in-Fact

               

            
	
              HARI
      MARITIME CORP., as Borrower

               

               

              
                By:  /s/ William J.
      Carr                                       
      

                William J. Carr 

                President 

              

               

              PROSPECT
      NAVIGATION CORP., as Borrower

               

               

              
                By:  /s/ William J.
      Carr                                       
      

                William J. Carr 

                President 

              

               

            	
              THE
      GOVERNOR AND COMPANY OF THE BANK OF IRELAND, as Swap Bank

               

               

              By:
      /s/ Paul
      Packard                                       
      

              Paul Packard 

              Senior Manager

               

               

              By:  /s/ Kimberly
      Jones                                  

              Kimberly Jones

              Manager

               

            
	
              HANCOCK
      NAVIGATION CORP., as Borrower

               

               

              
                By:  /s/ William J.
      Carr                                       
      

                William J. Carr 

                President 

              

               

              COLUMBUS
      MARITIME CORP., as Borrower

               

               

              
                By:  /s/ William J.
      Carr                                       
      

                William J. Carr 

                President 

              

               

               

            	
              NATIXIS,
      as Swap Bank

               

               

              By:
      /s/ Susan
      Bellanger                                     

              Susan Bellanger 

              Authorized Signatory

               

               

              By: 
      /s/ Bernard
      Issautier                                  
      

              Bernard Issautier 

              Authorized Signatory

               

            
	
              WHITEHALL
      MARINE TRANSPORT CORP.,

              as
      Borrower

               

               

              
                By:  /s/ William J.
      Carr                                       
      

                William J. Carr 

                President 

              

               

            	
              DVB
      BANK SE, as Swap Bank

               

               

               

              By:
      /s/ Jane Freeberg Sarma
      

              Jane Freeberg Sarma

              Attorney-in-Fact

               

            
	
              TBS
      INTERNATIONAL LIMITED,

              as
      Guarantor

               

               

              
                By:  /s/ William J.
      Carr                                       
      

                William J. Carr 

                President

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