Document:

ex-10_8.htm

    TBS INTERNATIONAL LIMITED
& SUBSIDIARIES                EXHIBIT
10.8 

     

    

       

      

      

      

      Date 27
March 2009

      

      

      

      ARGYLE
MARITIME CORP.

      CATON
MARITIME CORP.

      DORCHESTER
MARITIME CORP.

      LONGWOODS
MARITIME CORP.

      McHENRY
MARITIME CORP.

      SUNSWYCK
MARITIME CORP.

      as Joint
and Several Borrowers

       

      – and
–

       

      TBS
INTERNATIONAL LIMITED

      as
Corporate Guarantor

       

      – and
–

       

      THE
ROYAL BANK OF SCOTLAND PLC

      as
Lender

      

      

      

      

      

      

      

      

                                                                                                   

       

      SUPPLEMENTAL
AGREEMENT

                                                                                                   

      

      relating
to

      a
US$84,000,000 guarantee facility

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      INDEX

      Clause Page

      

       

      1           INTERPRETATION 

       

      2           AGREEMENT
OF THE LENDER 

       

      3           CONDITIONS
PRECEDENT 

       

      4           REPRESENTATIONS
AND WARRANTIES 

       

      5           AMENDMENTS
TO FACILITY AGREEMENT AND OTHER FINANCE DOCUMENTS 

       

      6           FURTHER
ASSURANCES 

       

      7           FEES AND
EXPENSES 

       

      8           COMMUNICATIONS 

       

      9           SUPPLEMENTAL

       

      10           LAW AND
JURISDICTION 

       

      SCHEDULE  FINANCIAL
COVENANTS DURING COVENANT WAIVER PERIOD 

       

      EXECUTION
PAGES 

       

      APPENDIX  CORPORATE
GUARANTEE SUPPLEMENT 

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      THIS AGREEMENT is made on 27
March 2009

       

      BETWEEN

       

      
        	
                (1)  

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

              

      

       

      
        	
                (2)  

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

              

      

       

      
        	
                (3)  

              	
                THE ROYAL BANK OF SCOTLAND
      PLC as Lender.

              

      

       

       

      BACKGROUND

       

      
        	
                (A)  

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

              

      

       

      
        	
                (B)  

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

              

      

       

       

      IT IS AGREED as follows:

       

      
        	
                1  

              	
                INTERPRETATION

              

      

       

      
        	
                1.1  

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

              

      

       

      
        	
                1.2  

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

              

      

       

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

       

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

       

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

       

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

       

      
        	
                1.3  

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

              

      

       

      
        	
                2  

              	
                AGREEMENT
      OF THE LENDER

              

      

       

      
        	
                2.1  

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

              

      

       

      
        	
                2.2  

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

              

      

       

      
        	
                2.3  

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

              

      

       

      
        	
                3  

              	
                CONDITIONS
      PRECEDENT

              

      

       

      
        	
                3.1  

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

              

      

       

      
        	
                3.2  

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

              

      

       

      
        	
                (a)  

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

              

      

       

      
        	
                (b)  

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

              

      

       

      
        	
                (c)  

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

              

      

       

      
        	
                (d)  

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

              

      

       

      
        	
                4  

              	
                REPRESENTATIONS
      AND WARRANTIES

              

      

       

      
        	
                4.1  

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

              

      

       

      
        	
                4.2  

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

              

      

       

      
        	
                5  

              	
                AMENDMENTS
      TO FACILITY AGREEMENT AND OTHER FINANCE
  DOCUMENTS

              

      

       

      
        	
                5.1  

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

              

      

       

      
        	
                (a)  

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

              

      

       

      
        	
                (b)  

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

              

      

       

      
        	
                (c)  

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

              

      

       

      
        	
                 
      

              	
                “(b)

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

              

      

       

      
        	
                (d)  

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

              

      

       

      ““Consolidated Interest Charges
Coverage Ratio” means, at any date of determination, the ratio of (a) the
result of (i) Consolidated EBITDA less (ii) the sums of Federal, State, local
and foreign income taxes paid in cash for the most recently completed
Measurement Period to (b) Consolidated Interest Charges for the most recently
completed Measurement Period.

       

      “Consolidated EBITDA” means, at
any date of determination, an amount equal to Consolidated Net Income of
Holdings and its Subsidiaries on a consolidated basis for the most recently
completed Measurement Period, plus (a) the following to the extent deducted in
calculating such Consolidated Net Income (and without
duplication):  (i) Consolidated Interest Charges, (ii) the provision
for Federal, state, local and foreign income taxes payable, (iii) depreciation
and amortization expense, (iv) net losses from the sales of vessels as permitted
under this Agreement and (v) any noncash impairment charges incurred during each
fiscal year of Holdings and its Subsidiaries ending December 31, 2008 and
December 31, 2009 in respect of any of Holdings’ or its Subsidiaries’ goodwill
and Vessels, (in each case of or by Holdings and its Subsidiaries for such
Measurement Period) and minus (b) the following to the extent included in
calculating such Consolidated Net Income, all net gains from the sales of
vessels as permitted under this Agreement (in each case of or by Holdings and
its Subsidiaries for such Measurement Period); provided that, to the extent
characterized as interest on the income statements of Holdings and its
Subsidiaries for such Measurement Period pursuant to FASB Interpretation No. 133
– Accounting for Derivative Instruments and Hedging Activities (June 1998),
noncash adjustments in connection with any interest rate Swap Contract entered
into by Holdings or any of its Subsidiaries, shall be excluded.

       

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

       

      
        	
                (e)  

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

              

      

       

      
        	
                (f)  

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

              

      

       

      
        	
                (g)  

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

              

      

       

      
        	
                (h)  

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

              

      

       

      
        	
                (i)  

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

              

      

       

      
        	
                5.2  

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

              

      

       

      
        	
                (a)  

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

              

      

       

      
        	
                (b)  

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

              

      

       

      
        	
                5.3  

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

              

      

       

      
        	
                6  

              	
                FURTHER
      ASSURANCES

              

      

       

      
        	
                6.1  

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

              

      

       

      
        	
                (a)  

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

              

      

       

      
        	
                (b)  

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

              

      

       

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

       

      
        	
                6.2  

              	
                Purposes of further
      assurances.  Those purposes
  are:

              

      

       

      
        	
                (a)  

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

              

      

       

      
        	
                (b)  

              	
                implementing
      the terms and provisions of this
Agreement.

              

      

       

      
        	
                6.3  

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

              

      

       

      
        	
                6.4  

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

              

      

       

      
        	
                6.5  

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

              

      

       

      
        	
                (a)  

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

              

      

       

      
        	
                (b)  

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

              

      

       

      
        	
                7  

              	
                FEES
      AND EXPENSES

              

      

       

      
        	
                7.1  

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

              

      

       

      
        	
                7.2  

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

              

      

       

      
        	
                8  

              	
                COMMUNICATIONS

              

      

       

      
        	
                8.1  

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

              

      

       

      
        	
                9  

              	
                SUPPLEMENTAL

              

      

       

      
        	
                9.1  

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

              

      

       

      
        	
                9.2  

              	
                Finance
      Documents.  This Agreement is a Finance
      Document.

              

      

       

      
        	
                9.3  

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

              

      

       

      
        	
                10  

              	
                LAW
      AND JURISDICTION

              

      

       

      
        	
                10.1  

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

              

      

       

      
        	
                10.2  

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

              

      

       

      

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

      

      

      SCHEDULE

       

      

       

      FINANCIAL
COVENANTS DURING COVENANT WAIVER PERIOD

       

       

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

       

      
        	
                (a)  

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

              

      

       

      
        	
                Period
      of Determination

              	
                Minimum
      Consolidated Interest Charges Coverage Ratio

              
	
                Two
      fiscal quarters ending June 30, 2009

              	
                1.10:1.00

              
	
                Three
      fiscal quarters ending September 30, 2009

              	
                1.35:1.00

              
	
                Four
      fiscal quarters ending December 31, 2009

              	
                1.75:1.00

              

      

      

       

      
        	
                (b)  

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

              

      

       

      
        	
                (i)  

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

              

      

       

      
        	
                (ii)  

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

              

      

       

      
        	
                (c)  

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

              

      

       

      
        	
                (d)  

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

              

      

       

      
        	
                (e)  

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

              

      

       

      
        	
                (f)  

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

              

      

       

      
        	
                (g)  

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

              

      

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      EXECUTION
PAGES

      
        

          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      	
                                                                                              BORROWERS

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	
                                                                                              EXECUTED as a DEED            

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              by                           

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              ARGYLE
      MARITIME CORP.       

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              acting
      by    Keith
      Krut            

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Keith Krut

                                                                                            
	
                                                                                              its
      duly authorised
      attorney-in-fact                  

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              in
      the presence
      of:                                             

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Dimitrios Vourakis

                                                                                            
	
                                                                                              Dimitrios
      Vourakis

                                                                                            	 
      	 
      
	
                                                                                              1
      Roondwood Avenue

                                                                                            	 
      	 
      
	
                                                                                              Stockley
      Park

                                                                                            	 
      	 
      
	
                                                                                              UB
      11 1AU

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                                              EXECUTED as a DEED                               

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              by        

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              CATON MARITIME
      CORP.                          

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              acting
      by  Keith
      Krut                                       

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Keith Krut

                                                                                            
	
                                                                                              its
      duly authorised
      attorney-in-fact             

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              in
      the presence
      of:                                            

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Dimitrios Vourakis

                                                                                            
	
                                                                                              Dimitrios
      Vourakis

                                                                                            	 
      	 
      
	
                                                                                              1
      Roondwood Avenue

                                                                                            	 
      	 
      
	
                                                                                              Stockley
      Park

                                                                                            	 
      	 
      
	
                                                                                              UB
      11 1AU

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                                              EXECUTED as a DEED         

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              by                     

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              DORCHESTER MARITIME
      CORP.  

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              acting
      by Keith
      Krut        

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Keith Krut

                                                                                            
	
                                                                                              its
      duly authorised attorney-in-fact  

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              in
      the presence
      of:          

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Dimitrios Vourakis

                                                                                            
	
                                                                                              Dimitrios
      Vourakis

                                                                                            	 
      	 
      
	
                                                                                              1
      Roondwood Avenue

                                                                                            	 
      	 
      
	
                                                                                              Stockley
      Park

                                                                                            	 
      	 
      
	
                                                                                              UB
      11 1AU

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                                              EXECUTED as a DEED           

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              by                                                                  

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              LONGWOODS MARITIME
      CORP.  

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              acting
      by      Keith
      Krut        

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Keith Krut

                                                                                            
	
                                                                                              its
      duly authorised attorney-in-fact    

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              in
      the presence
      of:           

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Dimitrios Vourakis

                                                                                            
	
                                                                                              Dimitrios
      Vourakis

                                                                                            	 
      	 
      
	
                                                                                              1
      Roondwood Avenue

                                                                                            	 
      	 
      
	
                                                                                              Stockley
      Park

                                                                                            	 
      	 
      
	
                                                                                              UB
      11 1AU

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                                              EXECUTED as a DEED          

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              by                     

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              McHENRY
      MARITIME CORP.    

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              acting
      by     Keith
      Krut       

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Keith Krut

                                                                                            
	
                                                                                              its
      duly authorised attorney-in-fact  

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              in
      the presence
      of:           

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Dimitrios Vourakis

                                                                                            
	
                                                                                              Dimitrios
      Vourakis

                                                                                            	 
      	 
      
	
                                                                                              1
      Roondwood Avenue

                                                                                            	 
      	 
      
	
                                                                                              Stockley
      Park

                                                                                            	 
      	 
      
	
                                                                                              UB
      11 1AU

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                                              EXECUTED as a DEED     

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              by                     

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              SUNSWYCK
      MARITIME CORP.    

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              acting
      by      Keith
      Krut         

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Keith Krut

                                                                                            
	
                                                                                              its
      duly authorised attorney-in-fact 

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              in
      the presence
      of:            

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Dimitrios Vourakis

                                                                                            
	
                                                                                              Dimitrios
      Vourakis

                                                                                            	 
      	 
      
	
                                                                                              1
      Roondwood Avenue

                                                                                            	 
      	 
      
	
                                                                                              Stockley
      Park

                                                                                            	 
      	 
      
	
                                                                                              UB
      11 1AU

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                                              CORPORATE
      GUARANTOR

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	
                                                                                              EXECUTED as a DEED       

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              by
      TBS INTERNATIONAL
      LIMITED 

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              acting
      by     Keith
      Krut        

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Keith Krut

                                                                                            
	
                                                                                              its
      duly authorised attorney-in-fact 

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              in
      the presence
      of:            

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ Dimitrios Vourakis

                                                                                            
	
                                                                                              Dimitrios
      Vourakis

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              1
      Roondwood Avenue

                                                                                            	 
      	 
      
	
                                                                                              Stockley
      Park

                                                                                            	 
      	 
      
	
                                                                                              UB
      11 1AU

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                                              LENDERS

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	
                                                                                              EXECUTED as a DEED         

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              by                                       

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              THE
      ROYAL BANK OF SCOTLAND PLC

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              acting
      by    G.R. Locker         

                                                                                            	
                                                                                              )

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

                                                                                            	
                                                                                              )

                                                                                            	 
      
	
                                                                                              in
      the presence
      of:                                            

                                                                                            	
                                                                                              )

                                                                                            	
                                                                                              /s/ C.L. Patrick

                                                                                            
	
                                                                                              C.
      L. Patrick

                                                                                            	 
      	 
      
	
                                                                                              The
      Royal Bank of Scotland Plc

                                                                                            	 
      	 
      
	
                                                                                              Shipping
      Business Centre

                                                                                            	 
      	 
      
	
                                                                                              5-10
      Great Tower Street

                                                                                            	 
      	 
      
	
                                                                                              London
      EC3P 3HX

                                                                                            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 	 	 

                                                                                       

                                                                                    

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                     

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       APPENDIX

       

      

       

      CORPORATE
GUARANTEE SUPPLEMENTex-10_9.htm

    TBS INTERNATIONAL LIMITED
& SUBSIDIARIES                EXHIBIT
10.9 

     

    

    Date: as
of March 26, 2009

     

    

    

    ADIRONDACK
SHIPPING LLC,

    as
Owners

     

    FAIRFAX
SHIPPING CORP.,

    as
Charterers

    

    -and-

    

    TBS
INTERNATIONAL LIMITED,

    as
Guarantor

    

    _______________________________________________________

    

    FIRST
AMENDATORY AGREEMENT

    ______________________________________________________

    

    Amending
and Supplementing the Bareboat Charter Party dated as of January 24,
2007

    in
respect of the Panamanian registered and Philippine bareboat
registered

    SEMINOLE
PRINCESS

    

    

    

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    FIRST
AMENDATORY AGREEMENT dated as of March 26, 2009 (this “Agreement”)

    

    AMONG

    

    
      	
              (1)  

            	
              ADIRONDACK
      SHIPPING LLC, a Marshall Islands limited liability company, as owners (the
      “Owners”);

            

    

     

    
      	
              (2)  

            	
              FAIRFAX
      SHIPPING CORP., a Marshall Islands corporation, as bareboat charterers
      (the “Charterers”);
      and

            

    

     

    
      	
              (3)  

            	
              TBS
      INTERNATIONAL LIMITED, a Bermuda company, as guarantor (the “Guarantor”).

            

    

     

    WITNESSETH
THAT:

    

    WHEREAS, the Owners, the
Charterers and the Guarantor are parties to a bareboat charter party dated as of
January 24, 2007 (the “Charter”);

    

    WHEREAS, the obligations of
the Charterers under the Charter are guaranteed by the Guarantor pursuant to
Clause 53 of the Charter;

    

    WHEREAS, as of the date hereof
the Guarantor is in breach of its obligations under Clause 35(3)(a) of the
Charter; and

    

    WHEREAS, upon the terms and
conditions stated herein, the parties hereto have agreed to:

    

    
      	
              (a)

            	
              waive
      the Guarantor’s breach of its obligations under Clause 35(3)(a) of the
      Charter; and

            

    

    

    
      	
              (b)  

            	
              waive
      the requirements of Clause 35(3)(a) of the Charter with effect on and from
      the date hereof until 12:00 am on January 1,
  2010.

            

    

    

    NOW, THEREFORE, in
consideration of the premises set forth above, the covenants and agreements
hereinafter set forth, 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
  Charter.

            

    

    

    
      	
              2  

            	
              BREACH,
      WAIVER AND AMENDMENT

            

    

     

    
      	
              2.1  

            	
              Fee.  In
      consideration of payment by the Charterer of a fee to the Owner in an
      amount to be determined between the Owner and the Charterer and paid by
      the Charterer within 21 days of the date hereof, the Owner and the
      Charterer hereby agree to the following clauses 2.2 to 2.8 in respect of
      the Charter.

            

    

     

    
      	
              2.2  

            	
              Breach of Clause
      35(3)(a).  The Guarantor acknowledges and agrees that, as
      of the date of this Agreement, it is in breach of Clause 35(3)(a) of the
      Charter.

            

    

     

    
      	
              2.3  

            	
              Waiver of
      breach.  The Owner hereby waives, as of the date hereof,
      the Guarantor’s breach of Clause 35(3)(a) of the
  Charter.

            

    

     

    
      	
              2.4  

            	
              Amendment.  Clauses
      35(3)(a) and (b) of the Charter are amended and restated to read as
      follows:

            

    

    

    
      	
               
      

            	
              “(a)

            	
              to
      be in compliance with:

            

    

    

    
      	
              (i)  

            	
              the
      financial covenants set forth in Section 7.13 of the Credit Agreement
      dated July 31, 2006 (as amended or supplemented from time to time, the
      “Bank of America Credit
      Facility”) among the Guarantor and certain of its subsidiaries as
      borrowers, Bank of America, N.A., as Administrative Agent and a Lender,
      Citibank, N.A., as Syndication Agent and a Lender, Westlb AG New York
      Branch, as Documentation Agent and a Lender, Keybank, N.A. as a Lender,
      LaSalle Bank, National Association, as a Lender, North Fork Business
      Capital Corporation, as a Lender, and Webster Bank National Association,
      as a Lender, upon the terms and conditions of which a $140.0 million
      credit facility was made available to the Guarantor and certain of its
      subsidiaries; and

            

    

     

    
      	
              (ii)  

            	
              clauses
      10.2(h)(ii) and 10.2(i)(i) of the Loan Agreement dated as of January 16,
      2008, as amended by the First Amendatory Agreement thereto dated as of
      March 23, 2009, among (i) Bedford Maritime Corp., Brighton Maritime Corp.,
      Hari Maritime Corp., Prospect Navigation Corp., Hancock Navigation Corp.,
      Columbus Maritime Corp. and Whitehall Marine Transport Corp. as Borrowers,
      (ii) the Guarantor as Guarantor, (iii) the banks and financial
      institutions named therein as Lenders, (iv) DVB Group Merchant Bank (Asia)
      Ltd. as Facility
      Agent and Security Trustee, (v) The Governor and Company of the Bank of
      Ireland (“BOI”) as
      Payment Agent, (vi) DVB Bank AG, BOI and Natixis as Swap Banks and (vii)
      Mount Washington LLC as Arranger;
and

            

    

     

    
      	
              (b)  

            	
              to
      subordinate any and all claims of whatever nature which the Guarantor has
      or may hereafter have against the Charterer to any and all claims of
      whatever nature which the Owner has or may hereafter have against the
      Charterer during the Charter Period and until all Charter Party
      Obligations have been fulfilled.”

            

    

    

    
      	
              2.5  

            	
              Temporary waiver of Clause
      35(3)(a)(i).  The parties hereto agree to waive the
      requirements of Clause 35(3)(a)(i) of the Charter, as amended above, with
      effect on and from the date hereof until 12:00 am on January 1, 2010,
      provided that the
      Guarantor shall maintain the following between the date hereof and 12:00
      am on January 1, 2010 (and for the avoidance of doubt the requirements of
      Clause 35(3)(a)(i) of the Charter, as amended above, shall be reinstated
      at 12:01 am on January 1, 2010 and shall be effective at all times
      thereafter):

            

    

    

    
      	
              (a)  

            	
              at
      all times, cash and Cash Equivalents of not less than $40,000,000, to be
      tested on the last day of each month;
and

            

    

    

    
      	
              (b)  

            	
              a
      Consolidated Interest Charges Coverage Ratio of not less than 1.10 to 1.00
      at June 30, 2009, 1.35 to 1.00 at September 30, 2009 and 1.75 to 1.00 at
      December 31, 2009.

            

    

    

    For
purposes of (a) and (b) above:

    

    “Attributable Indebtedness”
means, on any date:

    

    
      	
              (i)  

            	
              in
      respect of any Capitalized Lease of any person, the capitalized amount
      thereof that would appear on a balance sheet of such person prepared as of
      such date in accordance with GAAP;

            

    

    

    
      	
              (ii)  

            	
              in
      respect of any Synthetic Lease Obligation, the capitalized amount of the
      remaining lease or similar payments under the relevant lease or other
      applicable agreement or instrument that would appear on a balance sheet of
      such person prepared as of such date in accordance with GAAP if such lease
      or other agreement or instrument were accounted for as a Capitalized
      Lease; and

            

    

    

    
      	
              (iii)  

            	
              all
      Synthetic Debt of such person.

            

    

    

    “Capitalized Leases” means all
leases that have been or should be, in accordance with GAAP, recorded as
capitalized leases.

    

    “Cash Equivalents” means any of
the following types of Investments, to the extent owned by the Guarantor or any
of its Subsidiaries free and clear of all Security Interests (other than
Security Interests created under the Finance Documents and other Security
Interests permitted hereunder):

     

    
      	
              (i)  

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

            

    

     

    
      	
              (ii)  

            	
              time
      deposits with, or insured certificates of deposit or bankers’ acceptances
      of, any commercial bank that (1) (A) is a Lender or (B) is organized under
      the laws of the United States of America, any state thereof or the
      District of Columbia or is the principal banking subsidiary of a bank
      holding company organized under the laws of the United States of America,
      any state thereof or the District of Columbia, and is a member of the
      Federal Reserve System, (2) issues (or the parent of which issues)
      commercial paper rated as described in clause (iii) of this definition and
      (3) has combined capital and surplus of at least $1,000,000,000, in each
      case with maturities of not more than 90 days from the date of acquisition
      thereof;

            

    

     

    
      	
              (iii)  

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

            

    

     

    
      	
              (iv)  

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

            

    

     

    “Consolidated EBITDA” means, at
any date of determination, an amount equal to Consolidated Net Income of the
Guarantor and its Subsidiaries on a consolidated basis for the most recently
completed Measurement Period, plus 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 Ships as permitted under this Agreement or
      vessels as permitted under the Bank of America Credit Facility;
      and

            

    

    

    
      	
              (v)  

            	
              any
      noncash impairment charges incurred during each fiscal year of the
      Guarantor and its Subsidiaries ending December 31, 2008 and December 31,
      2009 in respect of any of the Guarantor’s or its Subsidiaries’ goodwill
      and vessels (in each case of or by the Guarantor and its Subsidiaries for
      such Measurement Period),

            

    

    

    minus, to the extent included
in calculating such Consolidated Net Income, all net gains from the sales of
Ships as permitted under this Agreement or vessels as permitted under the Bank
of America Credit Facility (in each case of or by the Guarantor and its
Subsidiaries for such Measurement Period), provided that, to the extent
characterized as interest on the income statements of the 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 the Guarantor or any of its Subsidiaries, shall be
excluded.

    

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

    

    
      	
              (i)  

            	
              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;

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              (iii)  

            	
              the
      portion of rent expense under Capitalized Leases that is treated as
      interest in accordance with GAAP,

            

    

     

    in each
case, of or by the 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 the 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 the Guarantor or any of its Subsidiaries, shall be
excluded.

     

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

     

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

    

    
      	
              (i)  

            	
              extraordinary
      gains and extraordinary losses for such Measurement
  Period;

            

    

     

    
      	
              (ii)  

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

            

    

     

    
      	
              (iii)  

            	
              any
      income (or loss) for such Measurement Period of such person if such person
      is not a Subsidiary,

            

    

     

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

    

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

    

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

    

    “Finance Documents” has the
meaning assigned such term in the Loan Agreement.

    

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

    

    “Governmental Authority” means
the government of the United States or any other nation, or of any political
subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government (including any supra-national bodies
such as the European Union or the European Central Bank).

    

    “Guarantee” means, as to any
person, any:

    

    
      	
              (i)  

            	
              any
      obligation, contingent or otherwise, of such person guaranteeing or having
      the economic effect of guaranteeing any Indebtedness or other obligation
      payable or performable by another person (the “primary obligor”) in any
      manner, whether directly or indirectly, and including any obligation of
      such person, direct or indirect,

            

    

    

    
      	
              (A)  

            	
              to
      purchase or pay (or advance or supply funds for the purchase or payment
      of) such Indebtedness or other
obligation;

            

    

    

    
      	
              (B)  

            	
              to
      purchase or lease property, securities or services for the purpose of
      assuring the obligee in respect of such Indebtedness or other obligation
      of the payment or performance of such Indebtedness or other
      obligation;

            

    

    

    
      	
              (C)  

            	
              to
      maintain working capital, equity capital or any other financial statement
      condition or liquidity or level of income or cash flow of the primary
      obligor so as to enable the primary obligor to pay such Indebtedness or
      other obligation;

            

    

    

    
      	
              (D)  

            	
              entered
      into for the purpose of assuring in any other manner the obligee in
      respect of such Indebtedness or other obligation of the payment or
      performance thereof or to protect such obligee against loss in respect
      thereof (in whole or in part); or

            

    

    

    
      	
              (ii)  

            	
              any
      Security Interest on any assets of such person securing any Indebtedness
      or other obligation of any other person, whether or not such Indebtedness
      or other obligation is assumed by such person (or any right, contingent or
      otherwise, of any holder of such Indebtedness to obtain any such Security
      Interest).

            

    

    

    The
amount of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the related primary obligation, or portion thereof, in
respect of which such Guarantee is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by the
guaranteeing person in good faith.  The term “Guarantee” as a verb has a
corresponding meaning.

    

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

    

    
      	
              (i)  

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

            

    

    

    
      	
              (ii)  

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

            

    

    

    
      	
              (iii)  

            	
              net
      obligations of such person under any Swap
  Contract;

            

    

    

    
      	
              (iv)  

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

            

    

    

    
      	
              (v)  

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

            

    

    

    
      	
              (vi)  

            	
              all
      Attributable Indebtedness in respect of Capitalized Leases and Synthetic
      Lease Obligations of such person and all Synthetic Debt of such
      person;

            

    

    

    
      	
              (vii)  

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

            

    

    

    
      	
              (viii)  

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

            

    

    

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

    

    “Investment” means, as to any
person, any direct or indirect acquisition or investment by such person, whether
by means of (a) the purchase or other acquisition of Equity Interests of another
person, (b) a loan, advance or capital contribution to, Guarantee or assumption
of debt of, or purchase or other acquisition of any other debt or interest in,
another person, (c) the purchase or other acquisition (in one transaction or a
series of transactions) of assets of another person that constitute a business
unit or all or a substantial part of the business of, such person or (d) the
acquisition or construction of a vessel.  For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.

    

    “Loan Agreement” means the Loan
Agreement dated as of January 25, 2007 among Adirondack Shipping LLC and
Rushmore Shipping LLC. as Borrowers, the banks and financial institutions named
therein as Lenders and DVB Bank America N.V. as Facility Agent and Security
Trustee.

    

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

    

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

    

    “Organization Documents” means,
(a) with respect to any corporation, the certificate or articles of
incorporation and the bylaws (or equivalent or comparable constitutive documents
with respect to any non-U.S. jurisdiction); (b) with respect to any limited
liability company, the certificate or articles of formation or organization and
operating agreement; and (c) with respect to any partnership, joint venture,
trust or other form of business entity, the partnership, joint venture or other
applicable agreement of formation or organization and any agreement, instrument,
filing or notice with respect thereto filed in connection with its formation or
organization with the applicable Governmental Authority in the jurisdiction of
its formation or organization and, if applicable, any certificate or articles of
formation or organization of such entity.

    

    “Permitted New Vessel Construction
Indebtedness” means Indebtedness of Subsidiaries of the Guarantor that
are not parties to the Bank of America Credit Facility in connection with the
construction of multipurpose tweendeck or bulk carrier shipping
vessels.

    

    “Security Interest” has the
meaning assigned such term in the Loan Agreement.

    

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

    

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

    

    “Swap Contract” means (a) any
and all rate swap transactions, basis swaps, credit derivative transactions,
forward rate transactions, commodity swaps, commodity options, forward commodity
contracts, equity or equity index swaps or options, bond or bond price or bond
index swaps or options or forward bond or forward bond price or forward bond
index transactions, interest rate options, forward foreign exchange
transactions, cap transactions, floor transactions, collar transactions,
currency swap transactions, cross-currency rate swap transactions, currency
options, spot contracts, or any other similar transactions or any combination of
any of the foregoing (including any options to enter into any of the foregoing),
whether or not any such transaction is governed by or subject to any master
agreement, and (b) any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement, including any such obligations or
liabilities under any such master agreement.

    

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

    

    “Synthetic Lease Obligation”
means the monetary obligation of a person under (i) a so-called synthetic,
off-balance sheet or tax retention lease, or (ii) an agreement for the use or
possession of property (including sale and leaseback transactions), in each
case, creating obligations that do not appear on the balance sheet of such
person but which, upon the application of any Debtor Relief Laws to such person,
would be characterized as the indebtedness of such person (without regard to
accounting treatment).

    

    
      	
              2.6  

            	
              References.  Each
      reference in the Charter to “this Charter”, “hereunder”, “hereof”,
      “herein” or words of like import shall mean and refer to the Charter as
      amended hereby.

            

    

    

    
      	
              2.7  

            	
              Effect of this
      Agreement.  Subject to the terms of this Agreement, with
      effect on and from the date hereof, the Charter shall be, and shall be
      deemed by this Agreement to have been, amended upon the terms and
      conditions stated herein and, as so amended, the Charter shall continue to
      be binding on each of the parties to it in accordance with its terms as so
      amended.

            

    

    

    
      	
              2.8  

            	
              No other amendments or
      waivers.  Except as amended or waived hereby, all other
      terms and conditions of the Charter remain unchanged and the Charter is
      hereby ratified and confirmed.  Without limiting the foregoing,
      the Guarantor acknowledges and agrees that its guarantee under Clause 53
      of the Charter remains in full force and
effect.

            

    

     

    
      	
              3  

            	
              MISCELLANEOUS

            

    

     

    
      	
              3.1  

            	
              Governing
      Law.  This Agreement and the rights and obligations of
      the parties hereunder shall be governed by, and construed in accordance
      with, Clause 26.2 of the Charter.

            

    

     

    
      	
              3.2  

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

            

    

     

    
      	
              3.3  

            	
              Severability.  Any
      provision of this 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.

            

    

     

    
      	
              3.4  

            	
              Payment of
      Expenses.  The parties hereto 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 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.

            

    

     

    

    [SIGNATURE
PAGE FOLLOWS]

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

    

    
      	
              ADIRONDACK
      SHIPPING LLC, as Owners

               

               

               

              By:
      /s/ A F.
      Spouselee       /s/ Asandro
Danaerde

              Name:
      A F. Spouselee      Asandro
      Danaerde

              Title:
      Directors

               

            	
              FAIRFAX
      SHIPPING CORP., as Charterers

               

               

               

              By:
      /s/
      Christophil B. Costas 

                  Christophil B.
      Costas

                  Attorney-in-Fact

               

            
	
              TBS
      INTERNATIONAL LIMITED, as Guarantor

               

               

               

              By:
      /s/ Christophil B. Costas
      

              Christophil B.
Costas

              Attorney-in-Fact

            	 
      

    

    

    

    

    CONSENT

    

    Pursuant
to Clause 10.2(k) of the Loan Agreement dated as of January 25, 2007 among
Adirondack Shipping LLC and Rushmore Shipping LLC. as Borrowers, the banks and
financial institutions named therein as Lenders and DVB Bank America N.V. as
Facility Agent and Security Trustee, the Facility Agent, for and on behalf of,
and upon the instruction of, the Majority Lenders (as defined in said Loan
Agreement), hereby consents and agrees to the foregoing Agreement.

    

    DVB BANK
AMERICA N.V.,

    as
Facility Agent for and on behalf of the Majority Lenders

    

    

    By: /s/ Daniel C. Rodgers

    Daniel C. Rodgers

    Attorney-in-Fact

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