Document:

ex-10_3.htm

TBS INTERNATIONAL LIMITED
& SUBSIDIARIES                EXHIBIT
10.3

     

    

    FIRST
AMENDMENT TO LOAN AGREEMENT

    

    by
and among

    

    AMOROS
MARITIME CORP.,

    LANCASTER
MARITIME CORP.

    AND

    CHATHAM
MARITIME CORP.,

    

    as
Borrowers,

    

    

    TBS
INTERNATIONAL LIMITED,

    

    as
Parent Guarantor,

    

    SHERWOOD
SHIPPING CORP.

    

    as
Guarantor, and

    

     AIG
COMMERCIAL EQUIPMENT FINANCE, INC.,

    

    as
Lender

    

    

    March
27, 2009

    
 

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    FIRST AMENDMENT TO LOAN
AGREEMENT

    

    THIS FIRST AMENDMENT TO LOAN
AGREEMENT (this “First Amendment”) is made and entered into this 27th day
of March, 2009, by and among Amoros Maritime Corp., Lancaster Maritime Corp. and
Chatham Maritime Corp., each a Marshall Islands corporation having a mailing
address of P.O. Box HM 2522, Hamilton HMGX, Bermuda and a registered address of
Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
MH96960 (the “Borrowers”; each, a “Borrower”), TBS International Limited, a
Bermuda corporation (“Parent Guarantor”), Sherwood Shipping Corp. (“Sherwood”)
and AIG Commercial Equipment Finance, Inc., a Delaware corporation (together
with its successors and assigns, “Lender”).WHEREAS, Borrowers, Parent
Guarantor and Lender are parties to that certain Loan Agreement dated February
29, 2008 (the “Original Loan Agreement,” as amended by this First Amendment and
any future amendments, the “Loan Agreement”); and

    

    WHEREAS, Borrowers delivered
the Notes to evidence their Loan under the Loan Agreement, including that
certain US$13,000,000 Promissory Note by Lancaster Maritime Corp., that certain
US$9,000,000 Promissory Note by Amoros Maritime Corp., and that certain
$13,000,000.00 Promissory Note by Chatham Maritime Crop., each payable to the
order of Lender and dated February 29, 2008; and

    

    WHEREAS, Sherwood wishes to
secure the Obligations by delivering its Secured Guaranty of even date herewith
and by granting a first priority mortgage on the vessel “Zia Belle,” having
Panamanian registration number 38142-PEXT (the “Zia Belle”) which shall be added
to the Vessels subject to the Loan Agreement; and

    

    WHEREAS, the parties wish to
amend the Loan Agreement and Notes in various respects, including (i) a 175
basis point increase in the Margin, (ii) a 200 basis point increase in the
lowest applicable Interest Rate, (iii) the elimination of the one and the two
month options for LIBOR terms currently available to Borrowers, (iv) increases
in applicable Prepayment Fees to (x) three percent (3.0%) for any prepayments
occurring on or prior to the first anniversary of the effective date of this
First Amendment, (y) two percent (2.0%) for any prepayment occurring after the
first anniversary but on or prior to the second anniversary of this First
Amendment, and (z) one percent (1.0%) for any prepayments occurring after the
second anniversary of the date of this First Amendment, (v) the restructuring of
the quarterly principal installments due April 1, 2009, July 1, 2009, and
October 1, 2009, to be due upon the effective date of this First Amendment, (vi)
the addition of an EBITDA to Interest financial covenant, and a waiver of
Borrowers’ compliance with the financial covenants contained in Sections 6.10
(a), (c) and (d) for  the 2009 fiscal year (and each fiscal quarter
thereof), and (vii) a waiver of Borrowers’ compliance with Section 5.12 for the
2008 fiscal year, among other matters more fully addressed below.

    

    NOW, THEREFORE, in
consideration of the foregoing and other good and valuable consideration, the
receipt of which is hereby acknowledged, Borrowers and Lender hereby agree as
follows:

    1. The following new
definitions are added to Section 1.01 of the Original Loan
Agreement:

    “Consolidated Interest Coverage
Ratio” means, at any date of determination, the ratio of (a) the result
of (i) Consolidated EBITDA, less (ii) the sum of
(x) Federal, state, local and foreign income taxes paid in cash and (y)
Restricted Payments made, in each case, for the most recently completed
Measurement Period, to (b) Consolidated Interest Charges for the most
recently completed Measurement Period.

    

    The
definitions of “LIBOR Period” and “Existing Credit Agreement” are deleted from
the Original Loan Agreement.

    

    2.   The
following definitions are amended and restated.  In the case of the
revised definitions of “Adjustment Period” and “LIBOR Rate”, such amendment and
restatement shall take effect on April 1, 2009.  All other changes
shall take effect as of the date of this First Amendment.

    

    “Adjustment Period” means a
successive series of three month or quarterly periods following the first
Adjustment Period.  The first Adjustment Period shall begin on the
Initial Funding Date, and continue until the last day of the calendar quarter in
which the Initial Funding Date occurs, or March 31, 2008.  Thereafter,
each successive Adjustment Period during the term of the Loans shall be a
Calendar Quarter. For the avoidance of doubt, the first full Adjustment Period
following the date of the First Amendment shall commence April 1, 2009, and end
on June 30, 2009.

     

     “Assignment of Charter
Hire” shall mean, for each Borrower and for Sherwood, that certain
Assignment of Charter Hire by Borrower or Sherwood in favor of Lender, as
applicable, and that certain Assignment of Charter Hire by Charterer, by the
assignors party thereto, in favor of Lender, each related to the Vessel owned by
the Borrower or Sherwood, as applicable and dated as of the date of the
Borrower’s or Sherwood’s Ship Mortgage, as amended, supplemented and modified
from time to time in accordance with the terms thereof.  “Assignments
of Charter Hire” shall collectively refer to all Assignments of Charter
Hire.

     

    “Assignment of Insurances”
shall mean, for each Borrower and Sherwood, that certain Assignment of
Insurances by Borrower or Sherwood (as applicable) and the other assignors party
thereto in favor of Lender dated as of the date of Borrower’s or Sherwood’s Ship
Mortgage, as amended, supplemented and modified from time to time in accordance
with the terms thereof.  “Assignments of Insurances” shall
collectively refer to all Assignments of Insurances.

     

     “Collateral” means,
collectively, the Vessels, all of Sherwood’s or each Borrower’s property that is
encumbered by a Ship Mortgage from time to time during the term of this
Agreement, all other collateral securing the Loans, and all substitutions and
replacements therefor, including all component parts and
appurtenances.  It is the intent of Borrowers, Sherwood and Lender
that the Collateral secure the entire Obligations owed to Lender by the
Borrowers.

    

    “Consolidated EBITDA” means,
at any date of determination, an amount equal to Consolidated Net Income of
Parent Guarantor and its Subsidiaries on a consolidated basis for the most
recently completed Measurement Period, plus (a) the
following to the extent deducted in calculating such Consolidated Net Income
(and without duplication):  (i) Consolidated Interest Charges, (ii) the
provision for Federal, state, local and foreign income taxes payable, (iii)
depreciation and amortization expense, (iv) net losses from the sales of vessels
as permitted under the BofA Credit Agreement and (v) any noncash impairment
charges incurred during each fiscal year of Parent Guarantor and its
Subsidiaries ending December 31, 2009 in respect of any of Parent Guarantor’s or
its Subsidiaries’ goodwill and vessels, (in each case of or by Parent Guarantor
and its Subsidiaries for such Measurement Period) and minus (b) the
following to the extent included in calculating such Consolidated Net Income,
all net gains from the sales of vessels as permitted under the BofA Credit
Agreement (in each case of or by Parent Guarantor and its Subsidiaries for such
Measurement Period); provided that, to the extent
characterized as interest on the income statements of Parent Guarantor and its
Subsidiaries for such Measurement Period pursuant to FASB Interpretation No. 133
– Accounting for Derivative Instruments and Hedging Activities (June 1998),
noncash adjustments in connection with any interest rate swap contract entered
into by Parent Guarantor or any of its Subsidiaries, shall be
excluded.

    

    “Consolidated Interest
Charges” means, for any Measurement Period, the sum of (a) all interest,
premium payments, debt discount, fees, charges and related expenses in
connection with borrowed money (including capitalized interest but excluding
capitalized interest on Permitted New Vessel Construction Indebtedness) or in
connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP, (b) all interest paid or
payable with respect to discontinued operations and (c) the portion of rent
expense under Capitalized Leases that is treated as interest in accordance with
GAAP, in each case, of or by Parent Guarantor and its Subsidiaries on a
consolidated basis for the most recently completed Measurement Period; provided that, to the extent
characterized as interest on the income statements of Parent Guarantor and its
Subsidiaries for such Measurement Period pursuant to FASB Interpretation No. 133
– Accounting for Derivative Instruments and Hedging Activities (June 1998),
noncash adjustments in connection with any interest rate swap contract entered
into by Parent Guarantor or any of its Subsidiaries, shall be
excluded.

    

    “Interest Rate” means, for
each Loan, a rate over each Adjustment Period equal to the greater of (a) seven
percent per annum, or (b) LIBOR Rate PLUS the Margin per annum, adjusted for
each Adjustment Period effective as of the first day of each Adjustment
Period.  The Interest Rate is subject to the default rate of interest
now or hereafter set forth in each Note, which default rate shall be equal to
the lesser of (i) the Interest Rate plus 2.0%, or (ii) the maximum rate of
interest permitted by Applicable Law.   At no time will the
Interest Rate ever be less than seven (7%) percent per annum.

    
"LIBOR Rate" shall mean, for
each Adjustment Period, the rate per annum equal to the arithmetic mean
(rounded to the nearest 1/100th of 1%) of the offered rates for deposits in
Dollars with a term of three months or ninety days, as published by the British
Bankers' Association (on its internet website at www.bba.org.uk (or in
the event such rate is not so published, in such other nationally recognized
publication as Payee may specify) at approximately 11:00 a.m., London, England
time, on the day that is the last London Banking Day immediately preceding the
first day of such Adjustment Period, with adjustments to be effective as of the
first day of such Adjustment Period; provided, however, that (i) if no
comparable term of three months or ninety days is available, the LIBOR Rate
shall be determined using the weighted average of the offered rates for the two
terms most nearly corresponding to such term and (ii) if the British Banker’s
Association shall no longer publish such a rate, "LIBOR Rate" shall mean in
such other nationally recognized publication as Lender may
specify).

     

    “Margin” means three and one
half of one percent (3.50%), unless the sum of the Margin and the LIBOR Rate on
the first day of an Adjustment Period is less than seven percent per annum, in
which case the Margin shall equal the difference between seven percent per annum
and the LIBOR Rate in effect on such date, resulting in an Interest Rate of at
least seven percent per annum at all times during the term of this
Agreement.

    

    “Measurement Period” means, at
any date of determination, the most recently completed four fiscal quarters of
Parent Guarantor.  Provided, in the case of the Consolidated Interest
Coverage Ratio, the Measurement Period for the quarterly calculations for the
quarter annual periods ending (i) on June 30, 2009 means the most recently
completed two fiscal quarters of Parent Guarantor, and (ii) September 30, 2009
means the most recently completed three fiscal quarters of Parent
Guarantor.

    

    “Philippine Charterer” means
(a) for the Mohave Maiden, the Hopi Princess, and the Zuni Princess, CFS
Bareboat Corp., (b) for the Zia Belle, General Charterers, Inc. or (c) with
respect to any Vessel, any other Person approved in writing by Lender to
bareboat charter the Vessel to permit the Charter Registry of the Vessels in the
Republic of the Philippines.

    

    “Security Documents” means the
Guaranty Agreements, the Assignments of Charter Hire, the Assignments of
Insurances, the Ship Mortgages and all other documents now or hereafter
constituting security for the Loans, including the Ship Mortgage by Sherwood on
the vessel “Zia Belle.”

    

    “Ship Mortgage” shall mean,
with respect to each Borrower or Sherwood, that certain Panamanian First Naval
Mortgage to be executed by or on behalf of such Person in favor of Lender
encumbering the Vessel owned by such Person, to be recorded in the office of
the Panama
Registry, as amended, supplemented and modified from time to time in accordance
with the terms thereof.  “Ship Mortgages” shall collectively refer to
the Ship Mortgages of Borrowers and Sherwood.

    

    “Vessel” means, for each
Borrower or Sherwood, the vessel listed next to such Person’s name on Schedule 1
hereto.  The term “Vessel” shall include, without limitation, all on
board equipment, machinery and supplies.  “Vessels” shall collectively
refer to all of the Vessels described on Schedule 1.

    

    3.   Section
2.03 of the Original Loan Agreement is amended and restated to read as
follows:

    

    Section 2.03.  The
Notes.  Each Loan and
each Borrower’s obligation to repay its Loan shall be evidenced by and repayable
with interest in accordance with the terms of such Borrower’s Note in the form
attached hereto as Schedule 2.03, as amended by an addendum (the “Addendum”) in
the form attached to the First Amendment as Schedule 2.03A.  Principal
and interest payable under each Note shall be repaid in accordance with the
repayment terms set forth in the Note, as amended by the applicable
Addendum.  Each Note provides for a default rate of
interest.

    

    4.   Section
2.06 of the Original Loan Agreement is amended and restated to read as follows,
effective as of April 1, 2009:

    

    Section 2.06.  Changes
to LIBOR Rate.   The LIBOR
Rate in effect hereunder shall be increased or decreased, as the case may be,
effective as of the first day of each Adjustment Period during the term of this
Agreement, in the case of each Adjustment Period, by an amount equal to any
increase or decrease in the LIBOR Rate from the immediately preceding Adjustment
Period, as more fully set forth in each Note.

    

    5.   With
respect to Section 4.05, and the other covenants and provisions of the Loan
Documents pertaining to a “Material Adverse Change” or “Material Adverse
Affect”, Lender agrees, in determining whether a Material Adverse Change or
Material Adverse Effect has occurred or exists, for calendar year 2009 only,
that Lender will disregard the effect of changes in accounting position
resulting from any increase in liability under interest rate swap contracts, or
any decrease in asset value resulting from reductions to the book value of
goodwill or any vessel or other item otherwise required under applicable
accounting standards.  Commencing on January 1, 2010, the
determination of compliance with all financial covenants, and the occurrence of
a Material Adverse Change or Material Adverse Effect, will revert to a
determination based on the results determined by application of GAAP,
consistently applied.

    

    6.   The
first paragraph of Article V of the Original Loan Agreement is amended and
restated to read as follows:

    

    Each
Borrower, severally, and Sherwood agrees as follows.  So long as any
Borrower’s Note shall remain unpaid or any Borrower shall have any unfulfilled
or undischarged obligations or duties under the Loan Documents, the Security
Documents or any related agreements, each Borrower, severally, and Sherwood will
comply with the following requirements. References in this Article V to Note
shall be to the Borrower’s Note, to Vessel shall be the Vessel applicable to
such Borrower or Sherwood, and to Collateral shall be the Collateral provided
directly by Borrower or Sherwood.

    

    7.   Section
5.03 of the Original Loan Agreement is amended and restated to read as
follows:

    

    Section 5.03.  Insurance.  Each Borrower or
Sherwood, as applicable shall obtain and maintain insurance on the Vessel owned
by it in accordance with the terms of Schedule
5.03 hereto.  In addition, as to other business properties
owned by Borrower or Sherwood, Borrower or Sherwood shall obtain and maintain
insurance with insurers believed by Borrower or Sherwood to be responsible and
reputable and reason­ably acceptable to Lender, in such amounts and against
such risks as is usually carried by companies engaged in similar business and
owning similar properties in the same general areas in which Borrower or
Sherwood operates or as may be required by any applicable laws, orders or
regulations or as may reasonably be requested by Lender.  Borrower or
Sherwood, as applicable, shall promptly provide Lender with evidence of such
insurance coverage.  Additionally, Borrower or Sherwood, as
applicable, shall provi­de not less than thirty (30) days advance written
notification to Lender in the event of cancellation or material change in the
terms of such coverage.

    

    8.   Section
5.05 of the Original Loan Agreement is amended and restated to read as
follows:

    

    Section 5.05.  Inspection.  At any reasonable
time and from time to time, upon prior notice to Borrower or Sherwood, Lender or
any agents or representatives of Lenders shall be allowed to examine and make
and prepare copies of and abstracts from the records and books of account of,
and visit and inspect the Collateral and the other properties of, Borrower or
Sherwood and the other Loan Parties and to discuss the affairs, finances and
accounts of Borrower, Sherwood or any other Loan Party with any officer of such
Person.

    

    9.    Section
5.06 of the Original Loan Agreement is amended and restated as
follows:

    

    Section 5.06.  Maintenance
of Properties, Etc.  Borrower or
Sherwood shall maintain and preserve the Collateral owned by it and all of its
other properties necessary or useful in the proper conduct of its current
business in good mechanical condition and running order, ordinary wear and tear
excepted.

    

    10.   Section
5.10 of the Original Loan Agreement is amended and restated as
follows:

    

    Section 5.10.  Ownership
of Borrower, Sherwood and Parent Guarantor.  Parent Guarantor
shall own 100% of all the issued and outstanding shares of Westbrook Holdings
Ltd. (“Westbrook”).  Westbrook shall own 100% of the all of the issued
and outstanding shares of Sherwood and each Borrower.  There shall be
no sale, transfer, pledge, donation, hypothecation, alienation or other
encumbrance of any of the outstanding shares of Borrower, Sherwood or Westbrook,
other than a transfer of the shares of Westbrook to either Parent Guarantor or a
wholly owned subsidiary of Parent Guarantor.

    

    11.   Section
5.12 of the Original Loan Agreement is amended and restated as
follows:

    

    Section
5.12     Valuation.  Borrowers will
deliver to Lender as soon as available, but in any event within 30 days after
the end of each fiscal year (except the fiscal year ending December 31, 2008) a
certificate executed by an Officer setting forth the Fair Market Value of the
Vessels as of such fiscal year end and attaching the most recent Valuation of
the Vessels as of such date.

    

    If for
any reason at any time the Total Outstanding shall exceed the Loan Value, the
Borrowers shall immediately prepay the Loans in an aggregate amount equal to
such excess; provided that, the Borrowers shall not be required to make such
prepayment of the Loans so long as (A) no Default or Event of Default shall have
occurred or then be continuing and (B) within 10 days of any such event (or, in
the case of any Disposition of a Vessel, prior to any such Disposition), (x) the
Borrowers pledge additional vessels (to be accepted by Lender in its sole
discretion)s having an appraised fair market value sufficient to eliminate such
deficiency or (y) the Borrowers cause another Subsidiary of Parent Guarantor
(which may be an Excluded Subsidiary) to join this agreement and such Person
pledges additional vessels having an appraised fair market value sufficient to
eliminate such deficiency, in each case, such pledge to be in a manner and
pursuant to documentation satisfactory in all respects to the Lender, and to
include a Valuation of such additional vessels and documentation and information
acceptable to Lender.

    

    12.   The
first paragraph of Article VI of the Original Loan Agreement is amended and
restated to read as follows:

    

    Each
Borrower, severally, and Sherwood agrees as follows.  So long as any
Borrower’s Note shall remain unpaid or any Borrower shall have any unfulfilled
or undischarged obligations or duties under the Loan Documents, the Security
Documents or any related agreements, each Borrower, severally, and Sherwood will
comply with the following requirements. References in this Article VI to Note
shall be to the Borrower’s Note, to Vessel shall be the Vessel applicable to
such Borrower or Sherwood, and to Collateral shall be the Collateral provided
directly by Borrower or Sherwood.  The negative covenants of Article
VI with respect to each Borrower or the Vessel or Collateral owned by a Borrower
shall also apply to Sherwood, and the Zia Belle and the Collateral owned by
Sherwood.  Without limitation of the foregoing, the Single Purpose
Entity Restrictions of Section 6.09 shall also apply to Sherwood.

    

    13.   Section
6.10 of the Original Loan Agreement is amended and restated to read as
follows:

    

    Section
6.10   Financial
Covenants.  Borrower
covenants and agrees that for the term of this Agreement that Parent Guarantor
and its consolidated Affiliates and Subsidiaries shall not violate, on a
consolidated basis, the following financial covenants:

    

    (a) Minimum Consolidated
Tangible Net Worth.   The Consolidated Tangible Net Worth
at any time shall not be less than the sum of (i) $235,000,000.00 plus (ii) an amount
equal to 75% of the Consolidated Net Income earned in each full fiscal quarter
ending after September 30, 2007 (with no deduction for a net loss in any
such fiscal quarter) and (iii) an amount equal to 100% of the aggregate
increases in Shareholders’ Equity of Parent Guarantor and its Subsidiaries
after September 30, 2007 by reason of the issuance and sale of Equity
Interests of Parent Guarantor or any Subsidiary (other than issuances to Parent
Guarantor or a wholly-owned Subsidiary), including upon any conversion of debt
securities of Parent Guarantor into such Equity Interests.

     

    (b) Minimum Cash
Liquidity.  Qualified Cash, plus Availability in
an average daily amount during such calendar month shall not be less than (a)
for the calendar months during 2008, $15,000,000.00, (b) for the months during
2009, $40,000,000.00, and (c) for each calendar month ending on or after January
31, 2010, $15,000,000.00.

     

    (c) Maximum Consolidated
Leverage Ratio.  The Consolidated Leverage Ratio at any time
shall not be greater than 3.00:1.00.

     

    (d) Minimum Consolidated Fixed
Charge Coverage Ratio.  The Consolidated Fixed Charge Coverage
Ratio at any time shall not be less than 1.50:1.00.

     

                (e)  Consolidated Interest
Coverage Ratio.  The Consolidated Interest Coverage Ratio shall
not be less than:  (a) for the six months ending June 30, 2009,
1.10:1.00; (b) for the nine months ending September 30, 2009, 1.35:1.00; and (c)
for the fiscal year ending December 31, 2009, 1.75:1.00.

    

    Unless
otherwise required by Lender as a result of a Default or a Material Adverse
Change in a Borrower’s or Guarantor’s financial position, compliance will be
tested on a quarterly basis on each March 31st, June 30th, September 30th and
December 31st, based on the quarterly consolidated financial statements of
Parent Guarantor.  Notwithstanding anything herein to the contrary (i)
compliance with the financial covenants described in Sections 6.10 (a), 6.10(c)
and 6.10(d) shall not be measured during any quarter in the fiscal year ending
December 31, 2009, and (ii) compliance with the financial covenant described in
Section 6.10(e) shall be measured only for the periods described
therein.

    

    14.   The
agreement of Lender to enter into this First Amendment is subject to the
condition precedent that Lender shall have received all of the following, in
form and substance acceptable to Lender in its sole discretion:

    

    (a)
executed Addendums to the Notes, the Secured Guaranty of Sherwood in the form
attached hereto as Schedule
14(a)(1) and the other Security Documents in connection with the Zia
Belle;

    

    (b)
evidence that all insurance policies and insurance coverages required under any
of the Loan Documents with respect to the Zia Belle are in full force and
effect;

    

    (c)
opinions of counsel of Borrowers, Parent Guarantor, and Sherwood with respect to
this First Amendment and the Security Documents (including the new Security
Documents in connection with the Zia Belle), confirming Lender’s first priority
ship mortgage on the Zia Belle;

    

    (d) UCC
search under the name Sherwood Shipping Corp., reflecting that no UCC filings
exist with respect to any of the Collateral owned by Sherwood Shipping
Corp.;

    

    (e)
copies of the Articles of Incorporation and Bylaws or other organizational
documents of Sherwood, certified by an authorized officer of such entity as
being true and correct copies thereof;

    

    (f)
signed copies of a certificates of an authorized officer of Borrowers, Parent
Guarantor, and Sherwood which shall certify the names of the officers of such
entities authorized to execute and deliver this First Amendment and the other
Loan Documents to which such entities are a party, and other documents or
certificates to be delivered pursuant to this First Amendment or the related
Security Documents, together with the true signatures of such
officers;

    

    (g)
copies of the appropriate resolutions and consents of Borrowers, Parent
Guarantor, and Sherwood approving the First Amendment and related Loan
Documents, certified by the Secretary (or other appropriate official) of such
party as being a true and correct copy thereof;

    

    (h) a
good standing certificate with respect to Sherwood, issued as of a recent date
by the Secretary of State or other appropriate and authorized official of
Sherwood’s respective jurisdiction of incorporation;

    

    (i)
evidence of the proper registry of the Zia Belle in the provisional maritime
registry of the Panama Registry as reflected in registration certificates for
the Vessel, and the acceptance of such registry by the applicable authorities in
the office of the Panama Registry, including the Certificate of Provisional
Registry for the Vessel and  Patente Provisional de
Navegacion;

    

    (j) copy
of the ownership and registration certificate for the Zia Belle issued by the
applicable Panamanian authorities;

    

    (k) duly
executed and filed Security Documents establishing in Lender, as determined by
Lender’s counsel, a first preferred mortgage in the Zia Belle; subject to no
adverse liens, claims or encumbrances (whether or not perfected or
preferred);

    

    (l)
evidence satisfactory to Lender that all required licenses have been obtained by
each Borrower and Sherwood and the Philippine Charterer, as applicable, and are
in full force and effect to operate the Vessel according to her intended use,
including, but not limited to, the current operation of the Vessel;

    

    (m) such
other documents, certifications and acknowledgments respecting the Loan
Documents or the Security Documents as Lender shall reasonably
request;

    

    (n) the
continuing compliance by Borrowers and Guarantors of their obligations under the
Loan Agreement as modified by this First Amendment;

    

    (o)
evidence satisfactory to Lender that no Loan Party is in default under the Loan
or any other indenture or loan or credit agreement or any other agreement, lease
or instrument to which it is a party or by which it or its properties may be
bound or affected; or, if such default exists, that it has been waived by the
applicable creditor;

    

    (s)
evidence satisfactory to Lender that (i) the Zia Belle is classed as follows,
without outstanding recommendations or notations, and otherwise in compliance
with the Ship Mortgage:

    

    Panama

    Navigation                      Classification

    Vessel
Name                                      Patente
No.                              Society                              Class

    

    ZIA
BELLE                                           38142-PEXT             _______                        ___________

     

    and (ii)
all required licenses have been obtained by Sherwood and are in full force and
effect to operate the Zia Belle according to its intended use, including, but
not limited to, the current operation of the Zia Belle; and

    

    (t)
Lender’s receipt of a modification fee of $225,000.00, as well as all other fees
and costs of Lender in connection with this First Amendment and the transactions
contemplated hereby.

    

    Lender’s
waiver of any condition with respect to this First Amendment for a particular
Borrower shall not be deemed absent express written agreement to constitute a
waiver of such condition as it may apply to any other Borrower.

    

    15.   All
references in the Original Loan Agreement and other Loan Documents to
“Guarantor” and “Loan Parties” shall include, without limitation,
Sherwood.  Sherwood shall observe all of the obligations imposed on
each Guarantor under the Loan Document.  All references to the Vessels
or the Collateral under the Original Loan Agreement or other Loan Document shall
include, without limitation, the Zia Belle, and Sherwood shall keep and observe
with respect to the Zia Belle all of the Vessel related obligations imposed on
the owner of a Vessel under the Loan Documents, including all obligations with
respect to insurance and the collateral assignment and encumbrance of rights
related to the Zia Belle, her charter hire and insurances, and the operation of
the Zia Belle.  Without limitation of the foregoing, Sherwood’s
failure to maintain the insurance required under the Loan Documents shall
constitute a default under Section 7.01 (p) of the Original Loan Agreement.
References to the Guaranty Documents shall include the Collateral Documents
executed by Sherwood.

    

    16.   Lender
consents to the change of the classification society for the Mohave Maiden to
“NK.”

    

    17.   Borrowers
agree to pay all costs and expenses in connection with the execution and
recordation of this First Amendment and all other Loan Documents executed in
connection therewith.  In addition, Borrowers shall reimburse Lender
for all costs incurred by Lender in connection with this First Amendment and the
transactions contemplated hereby, including without limitation, the costs of
Lender’s counsel, the costs of Lender’s insurance consultants, and the costs of
Panamanian and other foreign counsel.  Nothing herein shall be deemed
to waive or limit Borrowers’ obligation to reimburse and indemnify Lender as
provided in Section 8.05 of the Original Loan Agreement, and Sherwood agrees to
similarly indemnify and reimburse Lender for any costs, liabilities or expenses
of Lender relating to Sherwood or the Zia Belle.  Borrowers agree to
pay Lender a modification fee of $225,000.00 in connection with this First
Amendment, which shall be fully earned and non-refundable.

    

    18.   This
First Amendment may be executed separately by the Loan Parties and Lender in any
number of counterparts, each of which, when so executed and delivered, shall be
deemed to be an original and all of which, taken together, shall constitute but
one and the same instrument.

    

    19.   THE
VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS FIRST AMENDMENT AND THE LOAN
DOCUMENTS EXECUTED IN CONNECTION THEREWITH SHALL IN ALL RESPECTS BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.

    

    20.   Borrowers
and Guarantors, by executing this First Amendment, hereby confirm and
acknowledgment that the amounts owed by them under the Loan Agreement are free
and clear of any deductions, offsets, counterclaims or other
reductions.  Borrowers and Guarantors further acknowledge that Lender
has fully complied with all of its obligations under the Loan Agreement, and
hereby waive, release and discharge Lender from and against any claim, right,
demand or cause of action arising on or before the date of this First Amendment
out of any act or failure to act by Lender or any breach by Lender of any
obligation under or in connection with the Loan Agreement, whether arising under
theories of contract, tort, lender liability or otherwise.

     

     

     

    
 

    {signature
page follows}

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    BORROWERS:

    

    AMOROS
MARITIME CORP.

    

    

    /s/
Christophil B. Costas

    By:  Christophil
B. Costas

    Title:  Attorney
in Fact

    

    LANCASTER
MARITIME CORP.

    

    

    /s/
Christophil B. Costas

    By:  Christophil
B. Costas

    Title:  Attorney
in Fact

    

    CHATHAM
MARITIME CORP.

    

    

    /s/
Christophil B. Costas

    By:  Christophil
B. Costas

    Title:  Attorney
in Fact

    

    GUARANTOR:

    

    TBS
INTERNATIONAL LIMITED

    

    

    /s/
Christophil B. Costas

    By:  Christophil
B. Costas

    Title:  Attorney
in Fact

    

    SHERWOOD:

    SHERWOOD
SHIPPING CORP.

    

    /s/
Christophil B. Costas

    By:  Christophil
B. Costas

    Title:  Attorney
in Fact

    

    

    LENDER:

    AIG
COMMERCIAL EQUIPMENT FINANCE, INC.

    

    By:
/s/ Richard M. Johnston

    Name:  Richard
M. Johnston

    Title:  Vice
President

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    LIST OF SCHEDULES TO FIRST
AMENDMENT TO LOAN AGREEMENT

    
      	
              Schedule
      1-

            	
              List
      of Borrowers and Vessels

            

    

    
      	
              Schedule   -

            	
              Forms
      of Opinion

            

    

    SCHEDULE
1

    
       

    

    

    
      	
              Borrower

            	
              Vessel Name

            	
              Maximum Individual Loan
    Amount*

            
	
              Amoros
      Maritime Corp.

            	
              Hopi
      Princess

            	
              $13,000,000

            
	
              Lancaster
      Maritime Corp.

            	
              Mohave
      Maiden

            	
              $13,000,000

            
	
              Chatham
      Maritime Corp.

            	
              Zuni
      Princess

            	
              $9,000,000

            
	
              Sherwood
      Shipping Corp.

            	
              Zia
      Belle

            	
              N/A

            

    

    

    

    

    

    
      
        
          
            
              	
                      VESSEL
      NAME

                    	
                      PANAMA
      NAVIGATION PATENTE NO.

                    	
                      PANAMA
      CALL LETTERS

                    	
                      PHILIPPINES
      OFFICIAL NO.

                    	
                      PHILIPPINES
      CALL SIGN

                    	
                      ADDITIONAL
      VESSEL SPECIFICATIONS

                    
	
                      HOPI
      PRINCESS

                    	
                      34293-08

                    	
                      3EPG2

                    	
                      MNLA000706

                    	
                      DYTU

                    	
                      LENGTH,
      145.52 METERS, BREADTH, 22.70 METERS, DEPTH, 13.80 METERS, GROSS TONNAGE,
      13,911, NET TONNAGE 7,162

                    
	
                      MOHAVE
      MAIDEN

                    	
                      34295-08

                    	
                      3EPG7

                    	
                      MNLA000705

                    	
                      DYTT

                    	
                      LENGTH,
      167.64 METERS, BREADTH, 23.10 METERS, DEPTH, 14.75 METERS, GROSS TONNAGE,
      17,056, NET TONNAGE 10,329

                    
	
                      ZUNI
      PRINCESS

                    	
                      34300-08

                    	
                      3EPG6

                    	
                      MNLA000703

                    	
                      DYTK

                    	
                      LENGTH,
      167.64 METERS, BREADTH, 23.10 METERS, DEPTH, 14.75 METERS, GROSS TONNAGE,
      17,066, NET TONNAGE 10,334

                    
	
                      ZIA
      BELLE

                    	
                      38142-PEXT

                    	
                      3FZQ7

                    	
                      MNLA000716

                    	
                      DYVE

                    	
                      LENGTH,
      96.52 METERS, BREADTH, 20.42 METERS, DEPTH, 11.11 METERS,

                      GROSS
      TONNAGE, 6,714,

                      NET
      TONNAGE,
2,888

                    

            

          

        

      

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
2.03A

    

    Form
of Addendum

    

    ADDENDUM
TO PROMISSORY NOTE

    

     

    This
Addendum to Promissory Note is made as of March __, 2009 with respect to the
Promissory Note dated February 29, 2008 by
[       ] CORP. in the original stated
principal amount of $[   ] (the “Note”) to the order of AIG
COMMERCIAL EQUIPMENT FINANCE, INC.

     

    

    The last two sentences of the first
paragraph on Page 1 of the Note, commencing “The Interest Rate shall be...” and
“Beginning on the first day..,” respectively, are deleted, and the following
sentences are inserted in replacement thereof:

    

     “The
Interest Rate shall be equal to the greater of (a) seven percent per annum or
(b) LIBOR Rate (as defined in the Loan Agreement) plus 3.50%.  Payee
shall have the right to prospectively increase the interest rate hereunder
following an Event of Default to the Default Rate, as provided
below.  Beginning on the first day of the Adjustment Period (as
defined in the Loan Agreement) following the date hereof, the Interest Rate
hereunder shall be adjusted each Adjustment Period and such adjustment shall be
effective throughout such Adjustment Period.”

    

    The second paragraph of the first page
of the Note is amended and restated to read as follows:

    

    Commencing
on July 1, 2008, and on October 1, 2008 and January 1, 2009, the undersigned
will make quarterly principal payments of
$[          ] each together
with accrued interest.  On March __, 2009, the undersigned will a
principal payment of
$[        ].  On April 1,
2009, July 1, 2009 and October 1, 2009, the undersigned will make an interest
payment in the amount of all accrued but unpaid interest under this
Note.  On January 1, 2010 and on April 1, 2010, the undersigned will
make quarterly payments of accrued interest together with quarterly principal
payments of $[          ] each
together with accrued interest.  Commencing on July 1, 2010, and on
each October 1, January 1 and April 1 thereafter, the undersigned will make
quarterly principal payments of
$[        ] each together with accrued
interest.  A final payment of all remaining principal, interest and
other amounts due hereunder and under the Loan Documents (as defined in the Loan
Agreement) will be payable on April 1, 2012, the Maturity Date. Interest
hereunder shall accrue on the unpaid balance of this Note from the date of this
Note until paid in full, at the Interest Rate (subject to Payee’s right to
prospectively increase the interest rate to the Default Rate following an Event
of Default), adjusted on the first day of each Adjustment
Period.  Interest shall be payable in arrears on the dates provided
above, and upon prepayment in part of the unpaid principal balance of this Note
(with respect to the amount so prepaid) and upon payment (including prepayment)
in full of the unpaid principal balance of this Note.  All payments
received by Payee shall be applied first to interest and then to
principal.

     

    The final paragraph of the first page
of the Note, which is continued and completed on the second page of the Note, is
amended and restated to read as follows:

    

    In addition to the required payments
set forth above, the undersigned shall have the right to prepay this Note, in
whole or in part, at any time following the first anniversary date of this Note
on fifteen (15) days prior written notice to the Payee, provided,
that the amount of the prepayment is at least $500,000.00 and the prepayment is
made in multiples of $500,000.00, and further provided
that on the date of such prepayment, the undersigned shall pay the principal
amount of this Note being so prepaid (the “Prepayment Amount”),
together with all interest, fees and other amounts payable on the amount so
prepaid or in connection therewith to the date of such prepayment and, the
Prepayment Fee set forth below.  If the undersigned prepays this Note
in full or in part, the undersigned shall pay, on the date of such prepayment, a
fee  (the “Prepayment Fee”) to
the Payee in an amount equal to (a) 3% of the amount of the principal
prepayment, if prepayment is made before March __ 2010; (b) 2% of the amount of
the principal prepayment, if prepayment is made on or after March __, 2010 but
before March __, 2011, or (c) 1% of the amount of the principal prepayment, if
prepayment is made on or after March __, 2011, provided that the
Prepayment Fee shall be charged and paid only to the extent permitted by
Applicable Law.  No prepayments will be permitted prior to the first
anniversary date of this Note.  Any prepayment pursuant to this
paragraph shall be applied to the installments hereof in the inverse order of
maturity. In addition, at the time of any prepayment, the undersigned shall pay
to Payee such amount as will compensate Payee for any loss, cost, expense,
penalty, claim or liability incurred by Payee as a result of such prepayment
which requires the Payee to prematurely break any related swap, interest rate
hedge or other derivative arrangement.  The Payee shall have no obligation
to purchase or enter into any swap or other derivative arrangement in connection
with funding or maintaining the loan evidenced by this Note.

    

                                 [          ]    CORP.

     

    

     

     By:                                                      

    Name:

    Title:   Attorney
in Fact

    ACCEPTED
BY LENDER:

    

    AIG
COMMERCIAL EQUIPMENT FINANCE, INC.

    

    

     By:                                                      

    Name:

    Title:

    SCHEDULE
14 (a) (1)

    

    Form
of Secured Guarantyex-10_4.htm

TBS INTERNATIONAL LIMITED
& SUBSIDIARIES                EXHIBIT
10.4

    SUPPLEMENTAL
LETTER TO THE LOAN AGREEMENT

    

    

    
      	
              To:

            	
              Claremont Shipping
      Corp., Yorkshire
      Shipping Corp.

            

    

    and TBS International
Limited

    
      	
               
      

            	
              Commerce
      Building

            

    

    
      	
               
      

            	
              One
      Chancery Lane

            

    

    
      	
               
      

            	
              Hamilton
      HM12

            

    

    
      	
               
      

            	
              Bermuda

            

    

    

    
      	
               
      

            	
              Attn:
      William J. Carr

            

    

    

    
      	
              Copy:

            	
              TBS
      Shipping Services Inc.

            

    

    
      	
               
      

            	
              612
      East Grassy Sprain Road

            

    

    
      	
               
      

            	
              Yonkers,
      NY 10710

            

    

    
      	
               
      

            	
              U.S.A.

            

    

    

    
      	
               
      

            	
              Attn:  Ferdinand
      V. Lepere

            

    

    

    24 March
2009

    

    

    Dear
Sirs

    

    Loan
Agreement dated 7 December 2007 made between (i) Claremont Shipping Corp. and
Yorkshire Shipping Corp. as joint and several Borrowers and (ii) Credit Suisse
as Lender and Swap Bank relating to a term loan facility of US$40,000,000 as
supplemented by an amendment letter dated 19 March 2008 (together the “Loan
Agreement”)

    

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

    

    We refer
to your request to make a voluntary prepayment under the Loan Agreement in an
amount of US$3,000,000 (plus any breakage accrued interest and breakage costs
applicable thereto).  Notwithstanding the terms of Clause 7.9 of the
Loan Agreement, we agree that such prepayment shall be applied in order of
maturity and pro rata against each Advance as follows:

    

    
      	
              1.  

            	
              in
      respect of the Ship A Advance such prepayment shall be applied against the
      two instalments each of US$750,000 due on 12 September 2009 and 12
      December 2009; for the avoidance of doubt the repayment of instalments for
      this Advance shall continue thereafter in the manner described in the Loan
      Agreement and the next repayment of US$437,000 shall be paid on 12 March
      2010; and

            

    

    

    
      	
              2.  

            	
              in
      respect of Ship B Advance such prepayment shall applied against the two
      instalments each of US$750,000 due on 19 August 2009 and 19 November 2009;
      for the avoidance of doubt the repayment of instalments for this Advance
      shall continue thereafter in the manner described in the Loan Agreement
      and the next repayment of US$750,000 shall be paid on 19 February
      2010.

            

    

    

    In
addition we refer to your request that we agree to waive your compliance with
certain financial covenants under the Loan Agreement for the period commencing
from the date of signing of this letter up to 1 January 2010 at 12:00a.m.
Eastern time (the “Waiver
Period”).  We hereby give our consent to such request subject
to the following conditions:

    

    
      	
              1.  

            	
              receipt
      by us from the Borrowers of a (non-refundable) fee in an amount of
      US$143,750 no later than 12 March
2009;

            

    

    

    
      	
              2.  

            	
              receipt
      by us of satisfactory evidence in such form as we may in our sole
      discretion require that the lenders under the Bank of America Facilities
      and the RBS Facilities have agreed to similar waivers;
  and

            

    

    

    
      	
              3.  

            	
              no
      Event of Default or Potential Event of Default has occurred or is
      continuing or would result from the waivers being
  made.

            

    

    

    Upon
satisfaction of such conditions, the following amendments to the Loan Agreement
temporarily apply for the duration of the Waiver Period:

    

    
      	
              1.  

            	
              Notwithstanding
      the provisions of Clause 4.12 of the Loan Agreement, the applicable rate
      of Margin shall be 2.75%.

            

    

    

    
      	
              2.  

            	
              Any
      breach by the Borrowers of the requirement set out at Clause 14.1 of the
      Loan Agreement shall not be an Event of Default pursuant to Clause 18.1(b)
      of the Loan Agreement.

            

    

    

    
      	
              3.  

            	
              Any
      breach of the requirements of the financial covenants set out at
      paragraphs (a) and (c) of Schedule 3 of the Loan Agreement shall not be an
      Event of Default pursuant to Clause 18.1(c) of the Loan
      Agreement.

            

    

    

    
      	
              4.  

            	
              The
      following amendments shall apply to the financial covenants set out at
      Schedule 3 of the Loan Agreement:

            

    

    

    
      	
              a.  

            	
              the
      Minimum Cash Liquidity requirement for each calendar month shall be
      increased from US$15,000,000 to US$40,000,000;
  and

            

    

    

    
      	
              b.  

            	
              paragraph
      (d) (Minimum Consolidated Fixed Charge Coverage Ratio) shall be amended to
      read:

            

    

    

    “Minimum Consolidated Interest Charge
Coverage Ratio  Permit the Consolidated Interest Charge
Coverage Rate as of the end of any fiscal quarter and for the period
of:

    

    
      	
               
      

            	
              (i)

            	
              the
      two fiscal quarters of Holdings ending 30 June 2009 to be less than
      1.10:1.00;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              the
      three fiscal quarters of Holdings ending 30 September 2009 to be less than
      1.35:1.00; and

            

    

    

    
      	
               
      

            	
              (iii)

            	
              the
      four fiscal quarters of Holdings ending 31 December 2009 to be less than
      1.75:1.00.”.

            

    

    

    With
effect from 1 January 2010 the temporary amendments to the Loan Agreement
described above shall cease to apply and the terms of the Loan Agreement which
applied prior to the Waiver Period shall be reinstated.  For the
avoidance of doubt we confirm that with effect from 1 January 2010 the Borrowers
shall undertake not to permit the minimum “Consolidated Interest Charge Coverage
Ratio” (originally defined as the “Consolidated Fixed Charge Coverage Ratio” in
the Loan Agreement and as such defined term is amended below) for the four
fiscal quarters of Holdings ending 31 March 2009 and for the most recently
completed four fiscal quarters as at each quarter date falling thereafter to be
less than 1.50:1.00.

    

    We also
agree that with effect from the date of this letter the following amendments
shall be made to the Loan Agreement:

    

    
      	
              1.  

            	
              The
      defined term “Consolidated Fixed Charge Coverage Ratio” shall amended to
      be the term “Consolidated Interest Charge Coverage Ratio” (but otherwise
      having the same meaning) and thereafter all references in the Loan
      Agreement and any of the Schedules thereto to “Consolidated Fixed Charge
      Coverage Ratio” shall be amended to refer to “Consolidated Interest Charge
      Coverage Ratio”.

            

    

    

    
      	
              2.  

            	
              The
      definition of “Consolidated EBITDA” shall be amended to
    read:

            

    

    

    ““Consolidated EBITDA” means, at
any date of determination, an amount equal to Consolidated Net Income of
Holdings and its Subsidiaries on a consolidated basis for the most recently
completed Measurement Period, plus:

    

    (a) the
following to the extent deducted in calculating such Consolidated Net Income
(and without duplication):  (i) Consolidated Interest Charges, (ii)
the provision for Federal, state, local and foreign income taxes payable, (iii)
depreciation and amortization expense, (iv) net losses from the sales of vessels
as permitted under this Agreement and (v) any noncash impairment charges
incurred during each fiscal year of Holdings and its Subsidiaries ending
December 31, 2008 and December 31, 2009 in respect of any of Holdings’ or its
Subsidiaries’ goodwill and Vessels, (in each case of or by Holdings and its
Subsidiaries for such Measurement Period); and minus

    

    (b) the
following to the extent included in calculating such Consolidated Net Income,
all net gains from the sales of vessels as permitted under this Agreement (in
each case of or by Holdings and its Subsidiaries for such Measurement Period);
provided that, to the extent characterized as interest on the income statements
of Holdings and its Subsidiaries for such Measurement Period pursuant to FASB
Interpretation No. 133 – Accounting for Derivative Instruments and Hedging
Activities (June 1998), noncash adjustments in connection with any interest rate
Swap Contract entered into by Holdings or any of its Subsidiaries, shall be
excluded;”.

    

    
      	
              3.  

            	
              The
      definition of “Consolidated Interest Charges” shall be amended to
      read:

            

    

    

    ““Consolidated Interest Charges”
means, for any Measurement Period, the sum of:

    

    (a) all
interest, premium payments, debt discount, fees, charges and related expenses in
connection with borrowed money (including capitalized interest but excluding
capitalized interest on Permitted New Vessel Construction Indebtedness) or in
connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP;

    

    (b) all
interest paid or payable with respect to discontinued operations;
and

    

    (c) the
portion of rent expense under Capitalized Leases that is treated as interest in
accordance with GAAP, in each case, of or by Holdings and its Subsidiaries on a
consolidated basis for the most recently completed Measurement
Period,

    

    provided
that, to the extent characterized as interest on the income statements of
Holdings and its Subsidiaries for such Measurement Period pursuant to FASB
Interpretation No. 133 – Accounting for Derivative Instruments and Hedging
Activities (June 1998), noncash adjustments in connection with any interest rate
Swap Contract entered into by Holdings or any of its Subsidiaries, shall be
excluded;”.

    

    TBS
International Limited, by signature of this letter, confirms its approval to the
amendments to the Loan Agreement set out herein and confirms that the Guarantee
shall remain in full force and effect.

     

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

    

    Yours
faithfully

    

    

    

    

    

    /s/
Meike Macttig       /s/
Carla Sforzini

    duly
authorised for

    CREDIT
SUISSE

    (as
Lender and Swap Bank)

    

    

    

    Accepted
and agreed this 24 day of March 2009 by:

    

    

    

    

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

    duly
authorised
for                                                                                        duly authorised
for

    Claremont
Shipping
Corp.                                                                                  Yorkshire
Shipping Corp.

    

     

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

    

    

    

     /s/
Ferdinand V. Lepere  

    TBS
INTERNATIONAL LIMITED

    (as
Guarantor)

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