Document:

Exhibit 10.12

 

27 December 2010

 

The Royal Bank of Scotland plc

135 Bishopsgate

London EC2M 3UR

 

Dear Sirs

 

ISDA Master Agreement dated as of 29 March 2009 (together with the schedules thereto and confirmations thereunder) as amended made between (i) Argyle Maritime Corp., Caton Maritime Corp., Dorchester Maritime Corp., Longwoods Maritime Corp., McHenry Maritime Corp. and Sunswyck Maritime Corp. acting jointly and severally and (ii) The Royal Bank of Scotland plc (the “Master Agreement”)

 

Reference is hereby made to (i) the Master Agreement and (ii) the Letter Agreement dated as of 12 November 2010 (the “Forbearance Letter”) whereby you as Party A agreed subject to the conditions therein to forbear from exercising any of the rights or remedies arising from the Events of Default as specified therein (the “Specified Events of Default”).  Capitalized terms defined in the Master Agreement or the Forbearance Letter and not otherwise defined herein are used herein as therein defined.

 

In order to allow time for TBS International plc and its affiliates to work with their various lenders towards a mutually agreeable solution on their outstanding indebtedness, we hereby request that you extend the period under which you agreed to forbear from exercising any of the rights or remedies arising from the Specified Events of Default available to you under the Master Agreement and the Credit Support Documents or under applicable law (all of which rights and remedies are hereby expressly reserved by you) until the earlier of (i) the occurrence of a Forbearance Termination Event and (ii) 12:01 a.m. E.S.T. on 1 February 2011 (the “Forbearance Extension Period”).  As used herein; a “Forbearance Termination Event” shall mean the occurrence of (i) any Event of Default under the Master Agreement other than the Specified Events of Default or the Further Specified Events of Default (as defined below) or (ii) a breach of any of the conditions of this letter.

 

Such forbearance in respect of your rights and remedies under the Master Agreement and Credit Support Documents is conditioned upon and subject to TBS International plc and/or their applicable subsidiaries and affiliates having entered into amendments, waivers, forbearances or other modifications on or before 29 December 2010 in respect of each of (i) the loan facilities listed on Schedule 1 hereto and (ii) any swap and guarantee facilities to which TBS International plc and/or their applicable subsidiaries and affiliates are a party, deferring and/or forbearing until no earlier than 1 February 2011 any rights of the respective creditor parties under such facilities arising as a result of the Specified Events of Default and Further Specified Events of

 

 

Default. In connection with your agreement hereunder, TBS International plc agrees that each of the conditions referred to in (B) 1 - 5, of the Forbearance Letter shall continue to apply during the Forbearance Extension Period.

 

Subject to the conditions precedent stated in the preceding paragraph and subject to the other terms and conditions set forth above, by counter-signing this letter you as Party A agree to forbear from exercising any of the rights or remedies arising solely from the Specified Events of Default and the defaults under Clause 5(a)(iii)(1) and Clause 5(a)(vi) of the Master Agreement (the “Further Specified Events of Default”) arising from the suspension of payments by TBS International plc and its affiliates of certain scheduled principal installments owing in respect of Financial Indebtedness of such persons during the Forbearance Extension Period, as more particularly described in Schedule 2 hereto on the terms set forth in the Forbearance Letter, as modified by the terms above.

 

 

	
 
  	
 
  	
Yours faithfully,
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
TBS INTERNATIONAL PLC
  
	
 
  	
 
  	
 
  	
 
  
	
 
  	
 
  	
By:
  	
/s/ Ferdinand V. Lepere
  
	
 
  	
 
  	
 
  	
Name: Ferdinand V. Lepere
  
	
 
  	
 
  	
 
  	
Title: Senior Executive Vice President
  
	
 
  	
 
  	
 
  	
 
  
	
Acknowledged and Agreed,
  	
 
  	
 
  	
 
  
	
 
  	
 
  	
 
  	
 
  
	
 
  	
 
  	
 
  	
 
  
	
THE ROYAL BANK OF SCOTLAND PLC
  	
 
  	
 
  	
 
  
	
as Agent
  	
 
  	
 
  	
 
  
	
 
  	
 
  	
 
  	
 
  	
 
  
	
By:
  	
/s/ Jon A. Charatte
  	
 
  	
 
  	
 
  
	
 
  	
Name: Jon A. Charatte
  	
 
  	
 
  	
 
  
	
 
  	
Title: Senior Vice President
  	
 
  	
 
  	
 
  

 

 

Schedule 1

 

TBS CREDIT FACILITIES

 

Bank of America Credit Facilities

 

DVB Group Merchant Bank (Asia) Ltd Credit Facility

 

Credit Suisse Credit Facility

 

AIG Commercial Equipment Finance, Inc. Credit Facility

 

Commerzbank AG Credit Facility

 

Berenberg Bank Credit Facility

 

The Royal Bank of Scotland Credit Facility

 

 

Schedule 2

 

	
Facility
  	
 
  	
Principal Amount
  	
 
  	
Date
  	
 
  
	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
Bank of America Facility as amended and restated on 26 March 2008
  	
 
  	
$
  	
9,500,000
  	
 
  	
31 December 2010
  	
 
  
	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
AIG Facility dated as of 7 December 2007 
  	
 
  	
$
  	
1,750,000
  	
 
  	
1 January 2011
  	
 
  
	
 
  	
 
  	
 
  	
 
  	
 
  	
 
  
	
DVB Facility dated as of 16 January 2008
  	
 
  	
$
  	
2,608,000
  	
 
  	
25 January 2011ex10145.htm

Third Amendment to

Financial Services and Business Development Consulting Agreement

This Third Amendment to Financial Services and Business Development Consulting Agreement ("Third Amendment") is entered into as of December 27, 2010, to be effective as of January 1, 2011 (the "Effective Date"), by and among Dionysos Investments (1999) Ltd., an Israeli company ("Dionysos"), and Xfone, Inc., a Nevada corporation ("Client").

WHEREAS, Dionysos and the Client entered into that certain Financial Services and Business Development Consulting Agreement dated November 18, 2004 (the "Consulting Agreement"); and

 WHEREAS, on February 8, 2007, pursuant to the recommendations of the Audit Committee of the Client (the "Audit Committee") and the resolutions of its Board of Directors (the "Board"), Dionysos and the Client (the "Parties") entered into a First Amendment to the Consulting Agreement which amended Section 2 of the Consulting Agreement ("Section 2"); and

WHEREAS, on January 15, 2009, pursuant to the recommendations of the Audit Committee and the resolutions of the Board, the Parties entered into a Second Amendment to the Consulting Agreement (the "Second Amendment") which amended Section 2; and

WHEREAS, the Parties desire to amend Section 2, pursuant to the recommendations of the Audit Committee, dated December 15, 2010, and the resolutions of the Board dated December 19, 2010.

NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration, the parties do hereby agree as follows (capitalized terms used herein have the same meaning as defined in the Consulting Agreement, unless otherwise specified herein).

1.           Amendment.  Section 2 is hereby amended in its entirety to read as follows:

"Compensation. (i) The parties agree that Dionysos will be compensated by Client for the Services provided to the Client in the amount of Twelve Thousand Seven Hundred US Dollars ($12,700) per month, beginning on January 1, 2011; (ii) In addition, Client will pay Dionysos a success fee for any future investments in the Client made by Israeli investors during fiscal years 2011 and/or 2012, provided such investments were a direct or indirect result of the Services provided to the Client. The success fee will be equal to 0.5% (half percent) of the gross proceeds of such investments; (iii) In addition, Client will reimburse Dionysos, based on the approval of the Audit Committee of the Client, for expenses incurred on behalf of the Client, which expenses will include travel, hotel, meals, courier, report reproduction and other administrative costs when and where needed. Compensation for any additional services provided by Dionysos for the Client shall be as agreed by the parties.

             The parties agree that the abovementioned compensation will only apply to fiscal years 2011 and 2012, and then be reviewed and/or reconsidered and/or approved by the Audit Committee and Board of Directors of the Client in or about December 2012."

2.           Superseding Effect.  As of the Effective Date, this Third Amendment shall supersede and replace the Second Amendment.

3.           Ratification.  The Consulting Agreement as amended hereby is ratified and affirmed, and except as expressly amended hereby, all other terms and provisions of the Consulting Agreement remain unchanged and continue in full force and effect. Without prejudice to the generality of the above, and subject to the future review and/or reconsideration and/or approval required by the final paragraph of Section 2, it is hereby declared that the Audit Committee and the Board approved the automatic renewal of the Term of the Consulting Agreement for an additional two-year period, ending on December 31, 2012.

  

-1

  

4.           Execution.  This Third Amendment may be executed simultaneously in multiple counterparts, each of which will be deemed an original, but all of which together shall constitute one and the same instrument.  The parties hereto agree to accept facsimile signatures as an original signature.

Executed as of the day and year first above written.

	
Dionysos Investments (1999) Ltd.

	
Xfone, Inc.

	
By: /s/ Haim Nissenson 

	
By: /s/ Itzhak Almog

	
  

	
Name: Haim Nissenson

	
Name: Itzhak Almog

	
  

	
Title: Managing Director

	
Title: Chairman of the Board

  

-2ex10one.htm

 

 

 

 

AMENDED REVOLVING CREDIT ARRANGEMENT

This AGREEMENT (the" Agreement") is entered into on the Effective Date, between Specialty Contractors, Inc., a Texas limited liability company ("Borrower"), having its place of business at 1541 E Interstate 30, Suite 140, Rockwall, Texas 75087, and GCG Ventures (“Lender").

 

RECITALS

WHEREAS, Lender is the extender of a Line of Credit on behalf of Borrower;

WHEREAS, from time to time Lender advances/loans funds to or on behalf of Borrower;

WHEREAS, Borrower desires to establish a One Hundred Thousand Dollar ($100,000.00) revolving credit arrangement ("RCA") to provide working capital for the Borrower; and

WHEREAS, Lender desires conditions stated herein.

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the parties agree as follows:

ARTICLE 1. DEFINITIONS

The following terms as used in this Agreement shall have the following meanings:

(a) BORROWER. Specialty Contractors, Inc., a Texas Corporation.

(b) CLOSING DATE. Original closing date: November 30, 2009; revised closing date: June 1, 2010.

(c) DUE DATE. Principal and any accrued interest is due May 31, 2012.

(c) COLLATERAL. 100% of the receivables owned by Specialty Contractors, Inc. or its affiliates.

(d) EVENT OF DEFAULT. Shall have the meaning set forth in Article 13 of this and Agreement.

(f) GUARANTOR: Charles Bartlett.

(g) INDEBTEDNESS. The total amount of the funds advanced by Lender to Borrower or on behalf of Borrower, at any one time pursuant to this Agreement, together with all other sums due and owing by Borrower to Lender resulting from debts, obligations, or liabilities of any kind, including all interest, renewals and extensions.

h) INTEREST RATE. The rate of interest on all funds advanced shall be 5% per annum, compounded monthly.

(i) LENDER. GCG Ventures.

(j) PLEDGOR: Specialty Contractors, Inc.

 

ARTICLE 2.

2.01. Subject to and upon the terms and conditions of this Agreement, Lender agrees to advance at Lenders discretion pursuant to the terms and conditions herein and Borrower agrees to borrow, in several advances, an aggregate amount that does not exceed One Hundred Thousand Dollars ($100,000.00) RCA to provide general working capital for the Borrower (the "RCA Note").

ARTICLE 3. FEES

3.01. Costs, Fees, and Expenses. Borrower shall pay to Lender any and all fees, including attorney's fees, costs, and expenses reasonably incurred by Lender in connection with the perfection of any liens on the Collateral.

 

 

 

  

  

  

 

ARTICLE 4. REPRESENTATIONS, WARRANTIES, AND COVENANTS OF BORROWER

4.01. Borrower represents, warrants, covenants, and agrees as follows:

(a) that the Security interest of the Lender in the Borrower's collateral (the "Collateral") will at all times from the initial advance of funds under this Agreement, until full payment of the indebtedness, be a first lien on collateral, and

(b) that if Borrower is a corporation, limited partnership, or limited liability company, it is in existence and, if applicable, in good standing, and the execution and performance of this Agreement has been properly authorized by the Board of Directors, general partners, or other officers or as required by the enabling documents that create and/or govern the Borrower.

ARTICLE 5. REPRESENTATIONS, WARRANTIES,

AND COVENANTS OF PLEDGOR OF COLLATERAL

5.01. Pledgor and Borrower represent, warrant, covenant, and agree that they have good and marketable fee simple ownership to the Collateral.

ARTICLE 6. FEES

6.01. Borrower shall pay to Lender any and all fees, including attorney's fees, costs, and expenses reasonably incurred by Lender in connection with the perfection of any Liens on the Collateral.

ARTICLE 7

7.01. Prior to funding, Borrower shall execute and/or deliver to Lender the following documents:

Indemnity and Affidavit as to Debts and Liens on the Collateral;

Certificate of Existence from the Texas Secretary of State and Certificate of Good Standing from the Texas Comptroller of Public Accounts for Specialty Contractors, Inc.;

Certificate of Corporate Resolution for Borrower;

A certificate executed by Borrower that no litigation or proceedings are pending or threatened that could affect the validity or priority of the lien on the Collateral or that could materially affect Borrower's ability to perform under this RCA.

ARTICLE 8. RESERVES AND DEPOSITS

8.01. Disbursement of Reserves. So long as Borrower is not in default under this Agreement, Lender shall, in sole discretion of Lender, disburse the Reserves on request by Borrower;

8.02. No Interest Payable on Reserves. No interest shall accrue on any sums remaining as Reserves. Once any sum held in reserve is paid out in any manner described in Paragraph 8.01, above, that sum will be deemed a disbursement of loan proceeds and subject to accrual of interest.

8.03. Lenders Adjustment of Amount of Reserve. Lender may, in its sole discretion, adjust the amount of Reserves from time to time as circumstances may require.

 

 

 

  

  

  

 

ARTICLE 9. ADVANCES

9.01. Disbursements may be made from time to time as requested by Borrower.

ARTICLE 10. BORROWER'S AGREEMENTS

10.01. Borrower further agrees that:

(a) BOOKS AND RECORDS. Borrower shall keep accurate and proper books and records and shall at all reasonable hours allow Lender or its representative to examine those books and records and all contracts and bills relating to the Property.

(b) PERSONAL PROPERTY. All of the Collateral property shall be kept free and clear of all chattel mortgages, conditional vendors' liens, and all liens, encumbrances, and security interests whatsoever other than those securing the Loan; and Borrower shall be the absolute owner of all Collateral property.

(c) Borrower's default under this Agreement, Borrower shall pay Lender's reasonable attorney's fees in connection with enforcement of this Agreement. Borrower's payment of any attorney's fees under this Paragraph shall be in addition to any of Lender's reasonable attorney's fees paid by Borrower under other provisions of this Agreement.

ARTICLE 11. ASSIGNMENTS

11.01. Lender's Right to Assign. Lender may assign, negotiate, pledge, or otherwise hypothecate this Agreement or any of its rights and security, including the RCA. Borrower shall accord full recognition to any assignment made under these terms, and agrees that all rights and remedies of Lender in connection with the interest assigned shall be enforceable against Borrower by the assignee bank with the same force and effect and to the same extent as would have been available to Lender but for such assignment.

11.02. Prohibition of Assignments bv Borrower. Borrower shall not assign or attempt to assign its rights under this Agreement without Lender's consent. If Borrower is a corporation or partnership, Borrower shall not suffer or permit the interest of any of its shareholders or partners to be assigned, pledged, transferred, hypothecated, or otherwise disposed of until the provisions of this Agreement have been fully complied with.

ARTICLE 12.

12.01. The occurrence of anyone or more of the following shall constitute an "Event of Default" as the term is used in this Agreement:

	
(a)

	
Any monetary default on the part of the Borrower on this Agreement, and the continuation of same for ten (10) days after receipt by Borrower of written notice of any such default.

	
  

	
(a)

	
(b)

	
Any other failure of Borrower to observe or perform any of the conditions required under this Agreement that continues for a period of thirty (30) days after written notice of failure from Lender.

	
(c)

	
The occurrence of any Event of Default under this Agreement applicable to this transaction.

	
(d)

	
Any of the following transactions or attempted transactions undertaken by Borrower:

	
  

	
 i.

	
The assignment or attempted assignment by Borrower of its rights under this Agreement; or

	
  

	
ii.

	
If Borrower is a corporation other than a corporate trustee, or a partnership, the assignment, pledge, transfer, hypothecation, or other disposition of any shares of stock or partnership interest of Borrower.

 

 

 

  

  

  

 

ARTICLE 13. DEFAULTS BY BORROWER

13.01 The occurrence of any condition that would for any reason disable or prevent Borrower from complying with the terms and provisions of this Agreement within the time and in the manner required and which has not been cured or corrected prior to the expiration of the applicable grace, notice or cure periods.

	
  

	
The existence of any collusion or bad faith by or with the acquiescence of Borrower with any third party relating to the securing of the Agreement or in the securing of any advance of loan proceeds.

ARTICLE 14. MISCELLANEOUS PROVISIONS

14.01. Texas Law to Apply. This Agreement shall be construed under and in accordance with the laws of the State of Texas and the laws of the United States of America applicable to transactions in that state, and all obligations of the parties created under this Agreement are performable in Rockwall County, Texas.

14.02. Parties Bound. This Agreement shall be binding on and inure to the benefit of the parties to it and their respective heirs, executors, administrators, legal representatives, successors, and assigns, except as otherwise expressly provided within the Agreement.

14.03. Legal Construction. In case anyone or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of the Agreement, and the Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been a part of it.

14.04. Prior Agreements Superseded. This Agreement constitutes the sole and only agreement of the parties to it and supersedes any prior understandings or written or oral agreements between the parties respecting this subject matter.

14.05. Attorney's Fees. If any action at law or in equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to recover reasonable attorney's fees and other litigation expenses from the other party. The amount of fees recoverable under this paragraph may be set by the court in the trial of the underlying action or may be enforced in a separate action brought for that purpose, and any fees recovered shall be in addition to any other relief that may be awarded.

14.06. Loan/Advances. The loan(s)/advances made under this Agreement is made in reliance on the representations of the Borrower and all supporting documents and schedules.

14.07. Specific Performance. The parties declare that it is impossible to measure in money the damages that will accrue to a party to this Agreement, his or her heirs, executors, administrators,  legal representatives, successors, or assigns by reason of a failure to perform any of the obligations under this Agreement. Therefore, if a party to this Agreement, his or her heirs, executors, administrators, legal representatives, successors, or assigns shall institute any action or proceeding to enforce the provisions of this Agreement, any person against whom such action or proceedings is brought agrees that specific performance may be sought and obtained for any breach of this Agreement.

14.08. Counterparts-One Agreement. This Agreement and all other copies of this Agreement, insofar as they relate to the rights, duties, and remedies of the parties, shall be deemed to be one agreement. This Agreement may be executed concurrently in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

14.09. Notice. Unless otherwise provided within this Agreement, any notice, tender, or delivery to be given under this Agreement by either party to the other may be effected by personal delivery in writing or by registered or certified mail, postage prepaid, return receipt requested, and shall be deemed received as of the date of actual receipt.

14.10. Modification. This Agreement may not be changed, terminated, or modified orally or in any manner other than by an agreement in writing signed by all of the parties to this Agreement.

14.11. Agreement Final. This written loan agreement represents the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties.

 

 

  

  

  

 

 

14.12. Oral Agreements. There are  no unwritten oral agreements between the parties.

14.13. Gender. Words of any gender used in this Agreement shall be construed to include any other gender, and words in the singular number shall be held to include the plural, and visa versa, unless the context requires otherwise.

ARTICLE 15. EFFECTIVE DATE

15.01. The effective date of this Amended Agreement shall be June 1, 2010.

	
  

	
GCG Ventures

	
Specialty Contractors, Inc.

	
  

	
Lender

	
Borrower

	
/s/ A Smith______________________________

	
/s/ Charles Bartlett______________________________

	
By: A. Smith

	
By: Charles Bartlett

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