Document:

Exhibit 10.5

 

November 12, 2010

 

AIG
Commercial Equipment Finance, Inc.

5700
Granite Parkway, Suite 850

Plano,
Texas 75024

 

RE:                              Extension of Forbearance
Period in connection with Specified Events of Default under that certain Loan
Agreement dated February 29, 2008 by and among AIG Commercial Equipment
Finance, Inc., Amoros Maritime Corp., Lancaster Maritime Corp., Chatham
Maritime Corp. and the guarantors party thereto (as amended, the “Loan Agreement”).

 

Reference
is hereby made to (i) the Loan Agreement and (ii) the Letter
Agreement dated as of September 30, 2010 (the “Forbearance Letter”)
whereby you agreed subject to the conditions therein to forbear from exercising
any of the rights or remedies arising from the Specified Events of Default as
provided therein.  Capitalized terms
defined in the Loan Agreement, the Forbearance Letter or the Notes (as defined
in the Loan Agreement) and not otherwise defined herein are used herein as
therein defined, as applicable.

 

In
order to allow time for TBS International public limited company and its
affiliates to work with their various lenders, including you, towards a
mutually agreeable solution on their outstanding indebtedness, we hereby
request that, subject to the conditions and other provisions in this letter,
you extend the period under which you agree to forbear from exercising any of
the rights or remedies arising solely from the Specified Events of Default
available to you under the Loan Agreement, other transaction documents or under
applicable law (all of which rights and remedies are hereby expressly reserved
by you and may be immediately exercised by you upon the expiration or
termination of the Forbearance Extension Period) until the earlier of (i) the
occurrence of a Forbearance Termination Event (which shall include, without
limitation, the occurrence of a breach by TBS International public limited
company or any of its affiliates of any of their obligations under this letter)
and (ii) December 29, 2010 (the “Forbearance Extension Period”).  TBS International public limited company and
its affiliates acknowledge and agree that a late charge equal to 5% of the
past-due principal under the Loan Agreement is owing, and that interest has
been accruing on the outstanding principal balance of each Note at the Default
Rate since October 12, 2010 and will continue to accrue at the Default
Rate.

 

In
connection with and as a condition precedent to your agreement hereunder, TBS
International public limited company agrees to pay a non-refundable forbearance
fee to you on or before November 19, 2010 in an amount of 0.05% of the
total outstanding loan amount under the Loan Agreement.  In connection with your agreement hereunder,
TBS International public limited 

 

 

company
and its affiliates also agree to work diligently and use commercially
reasonable efforts to deliver to you on or before November 29, 2010 a
letter of intent from the major stockholders of TBS International public
limited company with respect to an equity investment in TBS International
public limited company and its affiliates in an amount, on terms and subject to
conditions acceptable to you.

 

By
counter-signing this letter, you agree

 

(i)                                     at all times
hereafter, the following minimum cash liquidity covenant shall replace the
existing minimum cash liquidity covenant contained in Section 6.10(b) of
the Loan Agreement:

 

“For each calendar week, the aggregate daily closing balance of
Qualified Cash owned by Parent Guarantor and its Subsidiaries shall not be less
than $15,000,000 on the last business day of any week or on average in any
week, of which a minimum average balance of $5,625,000 must be deposited with
Bank of America, N.A. and of which a minimum balance of $5,000,000 (excluding
any restricted cash) must be deposited with The Royal Bank of Scotland PLC”

 

;
and

 

(ii)                                  subject to the
conditions and other provisions in this letter, to forbear from exercising any
of the rights or remedies arising solely from the Specified Events of Default
(which shall include, in addition to those identified in the Forbearance
Letter, defaults arising from the suspension of payments by TBS International
public limited company and its affiliates of certain scheduled principal
installments owing in respect of Indebtedness of such persons during the
Forbearance Extension Period, as more particularly described on Schedule 1
hereto) on the terms set forth in the Forbearance Letter, as modified by the
terms above.

 

[Remainder of page intentionally left blank]

 

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TBS INTERNATIONAL PUBLIC LIMITED COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ferdinand V. Lepere

  
	
   

  	
   

  	
  Name:
  Ferdinand V. Lepere

  
	
   

  	
   

  	
  Title: Senior Executive Vice President and Chief
  Financial Officer

  

 

Acknowledged
and Agreed provided and conditioned that all of the lenders identified on the
attached Schedule 1, and all of the lenders identified on Schedule 1 attached
to the Forbearance Letter, have also countersigned on or before November 15,
2010 a forbearance letter agreement containing the same terms as this letter
agreement, and with no other lender receiving more favorable terms than you are
receiving under this letter and the Forbearance Letter:

 

AIG
COMMERCIAL EQUIPMENT FINANCE, INC.

 

	
  By:

  	
  /s/ Joe Gensor

  	
   

  
	
   

  	
  Name: Joe Gensor

  	
   

  
	
   

  	
  Title:Vice President

  	
   

  

 

[SIGNATURE
PAGE TO AIG EXTENDED FORBEARANCE LETTER ]

 

 

Schedule 1

 

	
  Facility

  	
   

  	
  Principal Amount

  	
   

  	
  Date

  
	
  Royal Bank of Scotland plc Term Loan Facility dated as of
  March 29, 2007 (as amended from time to time thereafter)

  	
   

  	
  $

  	
  417,500

  	
   

  	
  December 1, 2010

  
	
   

  	
  $

  	
  417,500

  	
   

  	
  December 9, 2010

  
	
   

  	
  $

  	
  417,500

  	
   

  	
  December 23, 2010

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Credit Suisse AG Loan Agreement dated as of December 7, 2007 (as
  amended)

  	
   

  	
  $

  	
  437,000

  	
   

  	
  November 19, 2010

  
	
   

  	
  $

  	
  437,000

  	
   

  	
  December 13, 2010

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Joh. Berenberg, Gossler & Co. KG Loan Agreement dated as of June 19, 2008 (as amended)

  	
   

  	
  $

  	
  812,500

  	
   

  	
  December 22, 2010

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commerzbank AG Loan
  Agreement dated as of May 28, 2008 (as amended)

  	
   

  	
  $

  	
  1,000,000

  	
   

  	
  December 2, 2010

  

 

[SIGNATURE PAGE TO AIG
EXTENDED FORBEARANCE LETTER ]Exhibit
10.6

 

12 November, 2010

 

Credit
Suisse AG

Shipfinance

St.
Alban-Graben 1-3

4002 Basel

Switzerland

Attn. Mrs Carla Vogel-Sforzini

Fax: +41 61 266 79 39

 

RE:          Extension of
Forbearance Period in connection with Events of Default under Credit Suisse AG  Facility and the
Master Agreement dated December 7, 2007.

 

Reference
is hereby made to (a) the Loan Agreement dated 07 December 2007 made
between (i) Claremont Shipping Corp. and Yorkshire Shipping Corp. as joint
and several Borrowers (the “Borrowers”), (ii) Credit Suisse AG as
Lender and Swap Bank (the “Lender”) relating a term loan facility of
US$40,000,000 as supplemented by an
amendment letter dated 19 March 2008, a waiver letter dated 24 March 2009,
an extension of waiver letter dated 22 December 2009, a supplemental
agreement dated 8 January 2010, an extension of waiver letter dated 31 March 2010
and a further waiver letter dated 21 April 2010 (together the “Loan
Agreement”) , (b)the Master Agreement dated 07 December 2007 made
between the Borrowers and the Lender (the “Master Agreement”) and (c) the
Letter Agreement dated as of September 30, 2010 (the “Forbearance
Letter”) whereby the Lender agreed subject to the conditions therein to
forbear from exercising any of the rights or remedies arising from the
Specified Events of Default as provided therein. Capitalized terms defined in
the Loan Agreement, the Master Agreement or the Forbearance Letter and not
otherwise defined herein are used herein as therein defined, as applicable.

 

In
order to allow time for TBS International, plc and its affiliates to work with
their various lenders, including you, towards a mutually agreeable solution on
their outstanding indebtedness, we hereby request that the Lender extend the
period under which you agree to forbear from exercising any of the rights or
remedies arising from the Specified Events of Default available to it under the
Loan Agreement, the Master Agreement, other transaction documents or under
applicable law (all of which rights and remedies are hereby expressly reserved
by the Lender until the earlier of (i) the occurrence of a Forbearance
Termination Event and (ii) December 29, 2010 (the “Forbearance
Extension Period”).

 

 

In
connection with your agreement hereunder, TBS International, plc agrees to pay a
fee to the Lender in an amount of 0.05% of the total outstanding loan amount
under the Loan Agreement.

 

By
counter-signing this letter, you agree

 

(i)            during the
Forbearance Extension Period, the following minimum cash liquidity covenant
shall replace the existing minimum cash liquidity covenant contained in Section 10.18
of the Loan Agreement:

 

“For each calendar week ending during the Forbearance Extension Period,
permit the aggregate daily closing balance of Qualified Cash to be less than
$15,000,000 on the last business day of any week or on average in any week, of
which a minimum average balance of $5,625,000 must be deposited with Bank of
America, N.A.”

;
and

 

(ii)           to forbear from
exercising any of the rights or remedies arising solely from the Specified
Events of Default (which shall include (in addition those identified in the
Forbearance Letter) defaults arising from the suspension of payments by TBS
International, public limited company and its affiliates of certain scheduled
principal installments owing in respect of Indebtedness of such persons during
the Forbearance Extension Period, as more particularly described on Schedule 1
hereto) on the terms set forth in the Forbearance Letter, as modified by the
terms above.

 

As
a condition to your agreement TBS International, plc will provide you with the
evidence that similar such agreement has been obtained from any other lenders
including (but not limited to) those listed in the Schedule 1.

 

[Remainder of page intentionally left blank]

 

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TBS INTERNATIONAL, PLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ferdinand V. Lepere

  
	
   

  	
   

  	
  Name:
  Ferdinand V. Lepere

  
	
   

  	
   

  	
  Title:
  Senior Executive Vice President

  
	
   

  	
   

  	
  and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Claremont Shipping Corp.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ferdinand V. Lepere

  
	
   

  	
   

  	
  Name:
  Ferdinand V. Lepere

  
	
   

  	
   

  	
  Title:
  Senior Executive Vice President

  
	
   

  	
   

  	
  and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Yorkshire Shipping Corp.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ferdinand V. Lepere

  
	
   

  	
   

  	
  Name:
  Ferdinand V. Lepere

  
	
   

  	
   

  	
  Title:
  Senior Executive Vice President

  
	
   

  	
   

  	
  and Chief Financial Officer

  

 

 

	
  Acknowledged
  and Agreed,

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CREDIT
  SUISSE AG,

  	
   

  	
   

  
	
  As
  Lender and Swap Bank

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Meike Rubin

  	
   

  	
  /s/ Carla Vogel-Sforzini

  
	
   

  	
  Name: Meike Rubin

  	
   

  	
  Carla Vogel-Sforzini

  
	
   

  	
  Title: Director

  	
   

  	
  Assistant Vice-President

  

 

[Signature Page to CS
Extended Forbearance Letter]

 

 

Schedule 1

 

	
  Facility

  	
   

  	
  Principal Amount

  	
   

  	
  Date

  	
   

  
	
  Royal Bank of Scotland plc
  Term Loan Facility dated as of March 29, 2007 (as amended from time to
  time thereafter)

  	
   

  	
  $

  	
  417,500

  	
   

  	
  December 1, 2010

  	
   

  
	
   

  	
  $

  	
  417,500

  	
   

  	
  December 9, 2010

  	
   

  
	
   

  	
  $

  	
  417,500

  	
   

  	
  December 23, 2010

  	
   

  
	
  Credit Suisse AG Loan
  Agreement dated as of December 7, 2007 (as amended)

  	
   

  	
  $

  	
  437,000

  	
   

  	
  November 19, 2010

  	
   

  
	
   

  	
  $

  	
  437,000

  	
   

  	
  December 13, 2010

  	
   

  
	
  Joh. Berenberg,
  Gossler & Co. KG Loan
  Agreement dated as of June 19, 2008 (as amended)

  	
   

  	
  $

  	
  812,500

  	
   

  	
  December 22, 2010

  	
   

  
	
  Commerzbank AG dated as of May 28, 2008 (as amended)

  	
   

  	
  $

  	
  1,000,000

  	
   

  	
  December 2, 2010

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