Document:

ex_10-12.htm

    TBS
INTERNATIONAL PLC & SUBSIDIARIES                EXHIBIT
10.12

    

      

      

       

      

      Date 7
January 2010

      

      

      

      

      

      TBS
INTERNATIONAL PUBLIC LIMITED COMPANY

      as
Guarantor

      

      

      - and
-

      

      

      THE
ROYAL BANK OF SCOTLAND plc

      as
Security Trustee

      

      

      

      

      

      

      ________________________________________________

      

      GUARANTEE

      ________________________________________________

      

      relating
to a Loan Agreement

      dated 29
March 2007 as amended from time to time

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      INDEX

      

        
          	Clause	 	Page
	
                  
1

                	
                  
INTERPRETATION

                	
                  
1

                
	
                  
2

                	
                  
GUARANTEE

                	
                  
2

                
	
                  
3

                	
                  
LIABILITY AS PRINCIPAL AND INDEPENDENT
      DEBTOR

                	
                  
2

                
	
                  
4

                	
                  
EXPENSES

                	
                  
3

                
	
                  
5

                	
                  
ADJUSTMENT OF
    TRANSACTIONS

                	
                  
3

                
	
                  
6

                	
                  
PAYMENTS

                	
                  
3

                
	
                  
7

                	
                  
INTEREST

                	
                  
4

                
	
                  
8

                	
                  
SUBORDINATION

                	
                  
4

                
	
                  
9

                	
                  
ENFORCEMENT

                	
                  
4

                
	
                  
10

                	
                  
REPRESENTATIONS AND
      WARRANTIES

                	
                  
5

                
	
                  
11

                	
                  
UNDERTAKINGS

                	
                  
6

                
	
                  
12

                	
                  
JUDGMENTS AND CURRENCY
      INDEMNITY

                	
                  
8

                
	
                  
13

                	
                  
SET-OFF

                	
                  
8

                
	
                  
14

                	
                  
SUPPLEMENTAL

                	
                  
9

                
	
                  
15

                	
                  
ASSIGNMENT

                	
                  
9

                
	
                  
16

                	
                  
NOTICES

                	
                  
9

                
	
                  
17

                	
                  
INVALIDITY OF LOAN AGREEMENT OR MASTER
      AGREEMENT

                	
                  
10

                
	
                  
18

                	
                  
GOVERNING LAW AND
      JURISDICTION

                	
                  
11

                
	 
      	
                  
EXECUTION PAGE

                	
                  
13

                

        

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      THIS GUARANTEE is made
on 7 January 2010

      

      BETWEEN

      

      
        	
                (1)  

              	
                TBS INTERNATIONAL PUBLIC
      LIMITED COMPANY, a company incorporated in Ireland with
      registration number 476578 whose registered office at Arthur Cox Building,
      Earlsfort Centre, Earlsfort Terrace, Dublin 2, Ireland (the “Guarantor”);
      and

              

      

       

      
        	
                (2)  

              	
                THE ROYAL BANK OF SCOTLAND
      plc, a company incorporated in Scotland, acting through its office
      at Level 5, 135 Bishopsgate, London EC2M 3UR (the “Security Trustee”, which
      expression includes its successors and
assigns).

              

      

       

      BACKGROUND

      

      
        	
                (A)  

              	
                By
      a loan agreement dated 29 March 2007 as amended and supplemented by a
      supplemental letter agreement dated 26 March 2008, a supplemental
      agreement dated 27 March 2009, a side letter dated 27 May 2009 and a side
      letter dated 3 September 2009 and made between (i) Argyle Maritime Corp.,
      Caton Maritime Corp., Dorchester Maritime Corp., Longwoods Maritime Corp.,
      McHenry Maritime Corp. and Sunswyck Maritime Corp. as joint and several
      Borrowers, (ii) the Lenders, (iii) the Agent, (iv) the Security Trustee,
      (v) the Mandated Lead Arranger, (vi) the Bookrunner and (vii) the Swap
      Bank, it was agreed that the Lenders would make available to the Borrowers
      a term loan facility of up to
US$150,000,000.

              

      

       

      
        	
                (B)  

              	
                By
      a supplemental agreement dated 7 January 2010 made between the same
      parties to the Loan Agreement and the Corporate Guarantor, the Loan
      Agreement was further amended (the “Supplemental
      Agreement”).

              

      

       

      
        	
                (C)  

              	
                By
      a master agreement dated 29 March 2007 and made between (i) the Borrowers
      and (ii) the Swap Bank, the Swap Bank has agreed to hedge the Borrowers’
      exposure under the Loan Agreement to interest rate
      fluctuations.

              

      

       

      
        	
                (D)  

              	
                The
      execution and delivery to the Security Trustee of this Guarantee is one of
      the conditions to the continuing availability of the term loan facility
      under the said Loan Agreement.

              

      

       

      IT IS AGREED as
follows:

      

      
        	
                1  

              	
                INTERPRETATION

              

      

       

      
        	
                1.1  

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

              

      

       

      
        	
                1.2  

              	
                Construction of certain
      terms.  In this
Guarantee:

              

      

       

      
        	
                 
      

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

              

      

      

      
        	
                 
      

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

              

      

      

      
        	
                 
      

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

              

      

      

      
        	
                1.3  

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

              

      

       

      
        	
                2  

              	
                GUARANTEE

              

      

       

      
        	
                2.1  

              	
                Guarantee and
      indemnity.  The Guarantor unconditionally and
      irrevocably:

              

      

       

      
        	
                (a)  

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

              

      

       

      
        	
                (b)  

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

              

      

       

      
        	
                (c)  

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

              

      

       

      
        	
                2.2  

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

              

      

       

      
        	
                3  

              	
                LIABILITY
      AS PRINCIPAL AND INDEPENDENT DEBTOR

              

      

       

      
        	
                3.1  

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

              

      

       

      
        	
                3.2  

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

              

      

       

      
        	
                (a)  

              	
                any
      amendment or supplement being made to the Finance
    Documents;

              

      

       

      
        	
                (b)  

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

              

      

       

      
        	
                (c)  

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

              

      

       

      
        	
                (d)  

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

              

      

       

      
        	
                (e)  

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

              

      

       

      
        	
                4  

              	
                EXPENSES

              

      

       

      
        	
                4.1  

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

              

      

       

      
        	
                4.2  

              	
                Fees and expenses payable under
      Loan Agreement.  Clause 4.1 is without prejudice to the
      Guarantor's liabilities in respect of the Borrowers’ obligations under
      clause 20 of the Loan Agreement (fees and expenses) and under similar
      provisions of other Finance
Documents.

              

      

       

      
        	
                5  

              	
                ADJUSTMENT
      OF TRANSACTIONS

              

      

       

      
        	
                5.1  

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

              

      

       

      
        	
                6  

              	
                PAYMENTS

              

      

       

      
        	
                6.1  

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

              

      

       

      
        	
                (a)  

              	
                in
      immediately available funds;

              

      

       

      
        	
                (b)  

              	
                to
      such account as the Security Trustee may from time to time notify to the
      Guarantor;

              

      

       

      
        	
                (c)  

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

              

      

       

      
        	
                (d)  

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

              

      

       

      
        	
                6.2  

              	
                Grossing-up for
      taxes.  If the Guarantor is required by law to make a tax
      deduction, the amount due to the Security Trustee shall be increased by
      the amount necessary to ensure that the Security Trustee and (if the
      payment is not due to the Security Trustee for its own account) the
      Creditor Party beneficially interested in the payment receives and retains
      a net amount which, after the tax deduction, is equal to the full amount
      that it would otherwise have
received.

              

      

       

      
        	
                6.3  

              	
                Tax
      Credit.  The provisions of Clause 22.4 of the Loan
      Agreement shall apply to this Guarantee and in relation to any increased
      payment made by the Guarantor under Clause 6.2 as if the same were set out
      in full herein with the necessary
changes.

              

      

       

      
        	
                7  

              	
                INTEREST

              

      

       

      
        	
                7.1  

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

              

      

       

      
        	
                7.2  

              	
                Calculation of
      interest.  Interest under this Guarantee shall be
      calculated and accrue in the same way as interest under clause 7 of the
      Loan Agreement.

              

      

       

      
        	
                7.3  

              	
                Guarantee extends to interest
      payable under Loan Agreement and Master Agreement.  For
      the avoidance of doubt, it is confirmed that this Guarantee covers all
      interest payable under the Loan Agreement and the Master Agreement,
      including that payable under clause 7 of the Loan Agreement and Section
      2(e) of the Master Agreement.

              

      

       

      
        	
                8  

              	
                SUBORDINATION

              

      

       

      
        	
                8.1  

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

              

      

       

      
        	
                (a)  

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

              

      

       

      
        	
                (b)  

              	
                take
      or enforce any Security Interest for any such
  amount;

              

      

       

      
        	
                (c)  

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

              

      

       

      
        	
                (d)  

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

              

      

       

      
        	
                9  

              	
                ENFORCEMENT

              

      

       

      
        	
                9.1  

              	
                No requirement to commence
      proceedings against Borrowers.  Neither the Security
      Trustee nor any other Creditor Party will need to commence any proceedings
      under, or enforce any Security Interest created by, the Loan Agreement or
      any other Finance Document before claiming or commencing proceedings under
      this Guarantee.

              

      

       

      
        	
                9.2  

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

              

      

       

      
        	
                (a)  

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

              

      

       

      
        	
                (b)  

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

              

      

       

      
        	
                 
      

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

              

      

      

      
        	
                9.3  

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

              

      

       

      
        	
                10  

              	
                REPRESENTATIONS
      AND WARRANTIES

              

      

       

      
        	
                10.1  

              	
                General.  The
      Guarantor represents and warrants to the Security Trustee as
      follows.

              

      

       

      
        	
                10.2  

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

              

      

       

      
        	
                10.3  

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

              

      

       

      
        	
                (a)  

              	
                to
      execute this Guarantee; and

              

      

       

      
        	
                (b)  

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

              

      

       

      
        	
                10.4  

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

              

      

       

      
        	
                10.5  

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

              

      

       

      
        	
                10.6  

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

              

      

       

      
        	
                (a)  

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

              

      

       

      
        	
                (b)  

              	
                the
      constitutional documents of the Guarantor;
or

              

      

       

      
        	
                (c)  

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

              

      

       

      
        	
                10.7  

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

              

      

       

      
        	
                10.8  

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

              

      

       

      
        	
                10.9  

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

              

      

       

      
        	
                10.10  

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

              

      

       

      
        	
                11  

              	
                UNDERTAKINGS

              

      

       

      
        	
                11.1  

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

              

      

       

      
        	
                11.2  

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

              

      

       

      
        	
                11.3  

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

              

      

       

      
        	
                (a)  

              	
                as
      soon as possible, but in no event later than 120 days after the end of
      each financial year of the Guarantor, the annual audited accounts of the
      Guarantor and its consolidated
subsidiaries;

              

      

       

      
        	
                (b)  

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

              

      

       

      
        	
                (c)  

              	
                together
      with the accounts specified in paragraph (b) above, a compliance
      certificate in the form set out in Schedule 9 of the Loan Agreement
      executed by the chief financial officer of the Guarantor confirming the
      Financial Covenants set out in Schedule 8 of the Loan Agreement have been
      complied with during each financial
quarter.

              

      

       

      
        	
                11.4  

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

              

      

       

      
        	
                (a)  

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

              

      

       

      
        	
                (b)  

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

              

      

       

      
        	
                (c)  

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

              

      

       

      
        	
                11.5  

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

              

      

       

      
        	
                11.6  

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

              

      

       

      
        	
                (a)  

              	
                for
      the Guarantor to perform its obligations under this
    Guarantee;

              

      

       

      
        	
                (b)  

              	
                for
      the validity or enforceability of this
  Guarantee;

              

      

       

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

      

      
        	
                11.7  

              	
                Further
      Assurance.  The Guarantor
will:

              

      

       

      
        	
                (a)  

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

              

      

       

      
        	
                (b)  

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

              

      

       

      
        	
                11.8  

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

              

      

       

      
        	
                11.9  

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

              

      

       

      
        	
                (a)  

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

              

      

       

      
        	
                (b)  

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

              

      

       

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

      

      
        	
                11.10  

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

              

      

       

      
        	
                11.11  

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

              

      

       

      
        	
                (a)  

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

              

      

       

      
        	
                (b)  

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

              

      

       

      
        	
                11.12  

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

              

      

       

      
        	
                11.13  

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

              

      

       

      
        	
                12  

              	
                JUDGMENTS
      AND CURRENCY INDEMNITY

              

      

       

      
        	
                12.1  

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

              

      

       

      
        	
                12.2  

              	
                Currency
      indemnity.  In addition, clause 21.4 (currency indemnity)
      of the Loan Agreement shall apply, with any necessary adaptations, in
      relation to this Guarantee.

              

      

       

      
        	
                13  

              	
                SET-OFF

              

      

       

      
        	
                13.1  

              	
                Application of credit
      balances.  Each Creditor Party may without prior notice
      following the occurrence of an Event of Default which is
      continuing:

              

      

       

      
        	
                (a)  

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

              

      

       

      
        	
                (b)  

              	
                for
      that purpose:

              

      

       

      
        	
                (i)  

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

              

      

       

      
        	
                (ii)  

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

              

      

       

      
        	
                (iii)  

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

              

      

       

      
        	
                13.2  

              	
                Existing rights
      unaffected.  No Creditor Party shall be obliged to
      exercise any of its rights under Clause 13.1; and those rights shall be
      without prejudice and in addition to any right of set-off, combination of
      accounts, charge, lien or other right or remedy to which a Creditor Party
      is entitled (whether under the general law or any
    document).

              

      

       

      
        	
                13.3  

              	
                Sums deemed due to a
      Lender.  For the purposes of this Clause 13, a sum
      payable by the Guarantor to the Agent or the Security Trustee for
      distribution to, or for the account of, a Lender shall be treated as a sum
      due to that Lender; and each Lender's proportion of a sum so payable for
      distribution to, or for the account of, the Lenders shall be treated as a
      sum due to that Lender.

              

      

       

      
        	
                14  

              	
                SUPPLEMENTAL

              

      

       

      
        	
                14.1  

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

              

      

       

      
        	
                14.2  

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

              

      

       

      
        	
                14.3  

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

              

      

       

      
        	
                14.4  

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

              

      

       

      
        	
                14.5  

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

              

      

       

      
        	
                14.6  

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

              

      

       

      
        	
                14.7  

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

              

      

       

      
        	
                14.8  

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

              

      

       

      
        	
                15  

              	
                ASSIGNMENT

              

      

       

      
        	
                15.1  

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

              

      

       

      
        	
                16  

              	
                NOTICES

              

      

       

      
        	
                16.1  

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

              

      

       

      Arthur
Cox Building

      Earlsfort
Centre

      Earlsfort
Terrace

      Dublin 2,
Ireland

      

      
        	
                 
      

              	
                Fax
      No:  + 353 1 618 0618

              

      

      

      with a copy to:

      

      c/o TBS Shipping Services
Inc.

      612 E. Grassy Sprain Road

      Yonkers, NY 10710

      USA

      

      Fax No: + 1 914 961 5121

      

      or to such other address which the
Guarantor may notify to the Security Trustee.

      

      
        	
                16.2  

              	
                Application of certain
      provisions of Loan Agreement.  Clauses 28.3, 28.4 and
      28.5 of the Loan Agreement apply to any notice or demand under or in
      connection with this Guarantee.

              

      

       

      
        	
                16.3  

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

              

      

       

      
        	
                (a)  

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

              

      

       

      
        	
                (b)  

              	
                at
      the same time as the service of a notice under clause 19.2 (events of
      default) of the Loan Agreement;

              

      

       

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

      

      
        	
                16.4  

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

              

      

       

      
        	
                17  

              	
                INVALIDITY
      OF LOAN AGREEMENT OR MASTER
AGREEMENT

              

      

       

      
        	
                17.1  

              	
                Invalidity of Loan
      Agreement.  In the event
of:

              

      

       

      
        	
                (a)  

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

              

      

       

      
        	
                (b)  

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

              

      

       

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

      

      
        	
                17.2  

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

              

      

       

      
        	
                18  

              	
                GOVERNING
      LAW AND JURISDICTION

              

      

       

      
        	
                18.1  

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

              

      

       

      
        	
                18.2  

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

              

      

       

      
        	
                18.3  

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

              

      

       

      
        	
                (a)  

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

              

      

       

      
        	
                (b)  

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

              

      

       

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

      

      
        	
                18.4  

              	
                Process
      agent.  The Guarantor irrevocably appoints Curtis Davis
      Garrard LLP at its registered office for the time being, presently at
      Waterview House, Roundwood Avenue, Stockley Park, Uxbridge UB11 1AU, to
      act as its agent to receive and accept on its behalf any process or other
      document relating to any proceedings in the English courts which are
      connected with this Guarantee.

              

      

       

      
        	
                18.5  

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

              

      

       

      
        	
                18.6  

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

              

      

       

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

      

      
        
          
             26329919
v4

          

           

        

        
           

          
            

          

        

        
           

        

      

      

      EXECUTION
PAGE

       

      

        
          	
                  GUARANTOR

                	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                  SIGNED and DELIVERED as a DEED

                	
                  )

                	 
      
	
                  by:
      Christophil B. Costas

                	
                  )

                	
                  /s/
      Christophil B. Costas

                
	
                  acting
      as lawfully appointed attorney of

                	
                  )

                	 
      
	
                  TBS
      INTERNATIONAL PUBLIC

                	
                  )

                	 
      
	
                  LIMITED
      COMPANY

                	
                  )

                	 
      
	
                  in
      the presence of: Lorraine Brown

                	
                  )

                	
                  /s/
      Lorraine Brown

                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                  SECURITY
      TRUSTEE

                	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                  SIGNED by Graham Andren
      Stares

                	
                  )

                	
                  /s/
      G A Stares

                
	
                  for
      and on behalf of

                	
                  )

                	 
      
	
                  THE
      ROYAL BANK OF SCOTLAND plc

                	
                  )

                	 
      
	
                  in
      the presence of: C.L. Patrick

                	
                  )

                	
                  /s/
      C L
Patrickex_10-13.htm

    TBS INTERNATIONAL PLC
& SUBSIDIARIES                EXHIBIT
10.13

    
 

    
      

      To:           The
Royal Bank of Scotland plc

      Level
5, 135 Bishopsgate

      London
EC2M 3UR

      (as
Lender)

      

      31
December 2009

       

      Dear
Sirs

      

      Facility
Agreement dated 29 March 2007 as amended by a supplemental agreement dated 27
March 2009 (the “Supplemental Agreement”) made between (i) Argyle Maritime
Corp., Caton Maritime Corp., Dorchester Maritime Corp., Longwoods Maritime
Corp., McHenry Maritime Corp. and Sunswyck Maritime Corp. as joint and several
Borrowers and The Royal Bank of Scotland plc as Lender relating to a guarantee
facility of US$84,000,000 (together the “Facility Agreement”)

      

      We
write to confirm that the Covenant Waiver Period as defined in the Supplemental
Agreement and the temporary amendments to the Facility Agreement applicable
during the Covenant Waiver Period shall be extended and continue to apply until
00:00 hours on 1 April 2010 (New York time) subject to the
following:-

       

      
        	
                1  

              	
                receipt by us of a (non-refundable) amendment
      fee of $70,000 on or before 5 January 2010;

              

      

       

      
        	
                2  

              	
                receipt
      by us of a copy of this Letter duly acknowledged by you and the Guarantor
      confirming your agreement and the Corporate Guarantor’s agreement to the
      terms of this Letter.

              

      

       

      For
the avoidance of doubt, if the fee to be paid pursuant to paragraph 1 above is
not received by us on the specified date, the Covenant Waiver Period shall
automatically expire.

       

      We
also agree that during such extension of the Covenant Waiver Period there shall
be a meeting between all banks with outstanding commitments to the Corporate
Guarantor or companies within the group and the Corporate Guarantor on or before
31 January 2010 to discuss future strategy.

       

      Upon
signing of this letter the Loan Agreement shall be, and shall be deemed by this
Agreement to be, amended so that the amount of $40,000,000 referred to in the
amended Minimum Cash Liquidity covenant (set out in the Schedule  of
the Supplemental Agreement) shall be reduced to $25,000,000 during the extension
of the Covenant Waiver Period.

       

      With
effect from 1 April 2010 the temporary amendments to the Facility Agreement
described in the Supplemental Agreement and as amended above shall cease to
apply.

       

      The
Corporate Guarantor, by signature of this Letter, confirms its approval to the
amendments to the Loan Agreement set out herein and confirms that the Corporate
Guarantee shall remain in full force and effect.

       

      Other
than as set out in this Letter, the provisions of the Facility Agreement shall
remain unchanged and in full force and effect.

       

      The
provisions of Clause 25 (Law and Jurisdiction) of the Facility Agreement shall
apply to this Letter as if set out in full but so that references to “this
Agreement” are amended to read “this Letter”.  All remaining
provisions of the Facility Agreement and the Finance Documents shall remain in
full force and effect.

       

      Yours
faithfully

      

      

        
          	
                   /s/
      Keith
      Krut                                   
      

                	 
      	 
      	
                   /s/
      Keith
      Krut                                
      

                
	
                  duly
      authorised for

                	 
      	 
      	
                  duly
      authorised for

                
	
                  Argyle
      Maritime Corp.

                	 
      	 
      	
                  Caton
      Maritime Corp.

                
	
                  Per:
      Keith Krut

                	 
      	 
      	
                  Per:
      Keith Krut

                
	
                  Attorney-in-Fact

                	 
      	 
      	
                  Attorney-in-Fact

                
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                   /s/
      Keith
      Krut                                    

                	 
      	 
      	
                   /s/
      Keith
      Krut                                
      

                
	
                  duly
      authorised for

                	 
      	 
      	
                  duly
      authorised for

                
	
                  Dorchester
      Maritime Corp.

                	 
      	
                  Longwoods
      Maritime Corp.

                
	
                  Per:
      Keith Krut

                	 
      	 
      	
                  Per:
      Keith Krut

                
	
                  Attorney-in-Fact

                	 
      	 
      	
                  Attorney-in-Fact

                
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                   /s/
      Keith
      Krut                                     

                	 
      	 
      	
                   /s/
      Keith
      Krut                                
      

                
	
                  duly
      authorised for

                	 
      	 
      	
                  duly
      authorised for

                
	
                  McHenry
      Maritime Corp.

                	 
      	
                  Sunswyck
      Maritime Corp.

                
	
                  Per:
      Keith Krut

                	 
      	 
      	
                  Per:
      Keith Krut

                
	
                  Attorney-in-Fact

                	 
      	 
      	
                  Attorney-in-Fact

                

        

        
          
             

          

          
             

            
              

            

          

          
             

          

        

    

    

      Accepted
and agreed this 31st day of December 2009 by:

      

      

      

      

      

      

      /s/
G A
Daves                                                  

      duly
authorised for

      THE
ROYAL BANK OF SCOTLAND PLC

      as Lender

      

      

      

      

      

      

      _________________________________

      

      

      

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

      

      

      

      

      

      

      /s/
Keith
Krut                                    
           

      TBS
INTERNATIONAL LIMITED

      (as
Guarantor)

      Per: Keith Krut

      Attorney-in-Fact

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