Document:

EX-10.1

 

EXECUTION VERSION

 

FORBEARANCE AGREEMENT

 

dated as of September 30, 2010

 

TBS
International Limited

Commerce
Building, One Chancery Lane

Hamilton
HM 12 Bermuda

 

Re:          Forbearance Agreement (this “Forbearance
Agreement”)

 

Ladies
and Gentleman:

 

Reference
is hereby made to those certain extensions of credit (the “Loans”) made
pursuant to and as evidenced by, inter  alia, (a) that
certain Amended and Restated Credit Agreement, dated as of March 26, 2008
(as amended, restated, supplemented or otherwise modified and in effect from
time to time, the “Credit Agreement”), among Albemarle Maritime Corp.
and each of the other entities identified on the signature pages thereof
as Borrowers (the “Borrowers”), TBS International plc and TBS
International Limited, as guarantors (collectively, “Holdings”), TBS
Shipping Services Inc., as Administrative Borrower (the “Administrative
Borrower”), each of the financial institutions party thereto as lenders
(the “Lenders”), Bank of America, N.A., as Administrative Agent (the “Administrative
Agent”), Citibank, N.A. and DVB Group Merchant Bank (Asia) Ltd., as
co-Syndication Agents, TD Banknorth, N.A., as Documentation Agent and Banc of
America Securities LLC, as Sole Lead Arranger and Sole Book Manager; and (b) the
other Loan Documents (as defined in the Credit Agreement).

 

Each
Loan Party (as defined in the Credit Agreement) has advised the Administrative
Agent and the Lenders and hereby acknowledges that (i) the Loan Parties
have (a) failed to pay the installment of principal due on September 30,
2010 (the “Date of Default”), and thus have failed to comply with Section 2.07
of the Credit Agreement and (b) have failed to comply with Section 6.04
of the Credit Agreement due to such failure, and the failure to pay certain
amounts due under other Indebtedness of the Loan Parties as more fully
described in Schedule A hereto and (ii) as a result of such
failures, and the occurrence of Defaults and Events of Default under certain
other Indebtedness as set forth on Schedule A hereto, Events of Default
under Sections 8.01(a), (c), (e) and (m) of the Credit Agreement have
occurred and are continuing (the “Specified Defaults”).  The Loan Parties agree that, but for the
terms of this Forbearance Agreement, the Administrative Agent may, if Required
Lenders consent, and shall, at the direction of Required Lenders, proceed to
enforce its rights and remedies under the Credit Agreement to collect the
Borrowers’ indebtedness to the Administrative Agent and the Lenders under the
Credit Agreement.  Notwithstanding the
foregoing, the Borrowers have requested that the Administrative Agent and the
Lenders forbear from enforcing their rights and remedies under the Credit
Agreement, the other Loan Documents and applicable laws (the “Forbearance”)
on the terms and conditions set forth herein. 
In response to such request, the Administrative Agent and the Required
Lenders hereby agree to refrain from enforcing such rights and remedies until
the Forbearance Termination Date (as hereinafter defined), upon the following
terms and conditions:

 

§1.  Definitions.  All capitalized terms used herein without
definition that are defined in the Credit Agreement shall have the same
meanings herein as therein.

 

 

§2.  Ratification
of Existing Agreements.   The Loan Parties
confirm and agree that the Obligations, as evidenced by or otherwise arising
under the Credit Agreement and the other Loan Documents, are, by the Loan
Parties’ execution of this Forbearance Agreement, ratified and confirmed in all
respects.  The Loan Parties confirm and
agree that to the extent that any Loan Document purports to assign or pledge to
the Administrative Agent, for the benefit of the Lenders, or to grant to the
Administrative Agent, for the benefit of the Lenders, a security interest in or
lien on, any assets of the Loan Parties as security for any of the Obligations
from time to time existing in respect of the Loan Documents, such pledge,
assignment and/or grant of a security interest or lien is hereby ratified and
confirmed in all respects as security for all of the Obligations, whether now
existing or hereafter arising. In addition, by the execution of this
Forbearance Agreement, each of the Loan Parties represents and warrants that no
counterclaim, right of set-off or defense of any kind exists or is outstanding
as of the Forbearance Effective Date (as defined below) with respect to such
Obligations.

 

§3.  Representations and Warranties.  All
of the representations and warranties made by each of the Loan Parties in the
Credit Agreement and the other Loan Documents are true and correct on the date
hereof as if made on and as of the date hereof, except with respect to the
occurrence of the Specified Defaults and to the extent that any of such
representations and warranties relate by their terms to a prior date they shall
be true and correct as of such prior date.

 

§4.  Forbearance Obligations.  Subject to all of the other terms and
conditions set forth herein, and solely with respect to the Specified Defaults,
the Administrative Agent and the Required Lenders agree to forbear from
exercising their rights and remedies under the Credit Agreement and the other
Loan Documents to collect the indebtedness of the Borrowers to the
Administrative Agent and the Lenders under the Credit Agreement and the other
Loan Documents until that date (the “Forbearance Termination Date”)
which is the earliest to occur of (i) November 15, 2010, (ii) the
failure after the date hereof of any of the Loan Parties to comply with any of
the terms or undertakings of this Forbearance Agreement, (iii) the failure
after the date hereof of any of the Loan Parties to comply with any of the
terms or undertakings of any amendment, waiver, forbearance or similar
agreement with the lenders referred to in Section 6(b) or the
expiration, for any reason, of any deferral, forbearance or similar period
referred to therein, (iv) the occurrence after the date hereof of any
Default or Event of Default (other than the Specified Defaults), and (v) the
date that any of the Loan Parties or any Affiliate thereof or any Person or
entity claiming by or through any of the Loan Parties joins in, assists,
cooperates or participates as an adverse party or adverse witness in any suit
or other proceeding against the Administrative Agent, the Lenders or any of their
respective Affiliates relating to the indebtedness referred to as the
Obligations or any amounts owing hereunder in connection with or related to any
of the transactions contemplated by the Credit Agreement, the other Loan
Documents, this Forbearance Agreement or any documents, agreements or
instruments executed in connection with any of the foregoing (each of the
foregoing conditions described in the immediately preceding clauses (i)-(v) being
referred to as a “Forbearance Termination Event”).  Upon the Forbearance Termination Date, the
agreements of the Administrative Agent and the Required Lenders to forbear from
exercising their rights and remedies in respect of the Specified Defaults set
forth herein shall automatically, without the requirement of any notice to any
Loan Party, terminate and the Administrative Agent and the Lenders shall be
free in their sole and absolute discretion to proceed to enforce any or all of
their rights and remedies set forth in this Forbearance Agreement, the Credit
Agreement, the other Loan Documents and applicable law, including, without
limitation, the right to demand the immediate repayment of the Loans and the
right to immediate repayment of all other Obligations in full.

 

§5.  Covenants.  Each of the
Administrative Agent, the Required Lenders and the Loan Parties hereby covenant
and agree with and for the benefit of the Administrative Agent and the Lenders,
notwithstanding anything to the contrary contained in the Credit Agreement or
any of the other Loan Documents, as follows:

 

2

 

(a)           Credit
Extensions.  From and after the Date of Default, neither
the Administrative Agent nor the Lenders shall have any obligation or
commitment to make any Credit Extension or other extensions of credit to, or
for the benefit of, the Borrowers or any other Loan Party under the Loan
Documents or otherwise.

 

(b)           Interest Rates.  From and after the Date of Default, (i) pursuant
to Section 2.08(b)(iii) of the Credit Agreement, interest shall
accrue on the principal amount of all outstanding Obligations at a fluctuating
interest rate per annum at all times equal to the Default Rate to the fullest
extent permitted by applicable Laws and (ii) until the Forbearance
Termination Date, notwithstanding anything contained in Section 2.02(c) of
the Credit Agreement to the contrary, to the extent any Loan may be converted
to or continued as Eurodollar Rate Loans under the Credit Agreement, such
Eurodollar Rate Loan may only be continued for either one- or three-month
Interest Periods in order to permit the Borrowers to continue accounting for
interest rate hedging arrangements in the same manner in which such
arrangements are currently treated. 
Interest on each Loan shall continue to be due and payable in arrears on
each Interest Payment Date applicable thereto and at such other times as
specified in the Credit Agreement and the Borrower agrees to pay all interest
then due and payable on each such Interest Payment Date.

 

(c)           Borrowers’
Restructuring Advisor.  By no later than Monday, October 11,
2010, the Borrowers shall select and engage a financial advisor to represent
the Borrowers (the “Borrowers’ Restructuring Advisor”), which Borrowers’
Restructuring Advisor shall be selected from one the restructuring advisors set
forth on Schedule B hereto, or such other restructuring advisor as may be
reasonably agreed by Borrowers and Administrative Agent.  The engagement
letter between the Borrowers and the Borrower’s Restructuring Advisor setting
forth the terms and scope of the Borrowers’ Restructuring Advisor’s engagement
shall be in form and substance reasonably satisfactory to the Administrative
Agent.  The Borrowers hereby authorize the Administrative Agent and any of
its designees to at any time and from time to time communicate directly with
the Borrowers’ Restructuring Advisor regarding any aspect of its findings and
of such Borrower’s business; provided that the Administrative Agent shall
provide the Borrowers prior notice of and a reasonable opportunity to
participate in such discussions.  Notwithstanding the foregoing, the
Administrative Agent acknowledges that Borrowers’ Restructuring Advisor
represents the Borrowers and not the Administrative Agent or the Lenders, and
that neither the Administrative Agent nor the Lenders shall be entitled to
direct Borrowers’ Restructuring Advisor to take or refrain from taking any
action.  The  Borrowers agree that any final reports of the
Borrowers’ Restructuring Advisor provided to the-Borrowers will also be
provided to the Lenders within a reasonable period of time following the
Borrowers’ receipt of such final report.

 

(d)           Compliance
with Loan Documents. Each Loan Party will,
and will cause each of its Subsidiaries to, comply and continue to comply with
all of the terms, covenants and provisions contained in the Loan Documents to
which each is a party and any other instruments evidencing or creating any of
the Obligations except as such terms, covenants and provisions are expressly
modified in Section 4 or this Section 5.

 

(e)           Reporting.

 

i.              Weekly Cash Flow Reports.  The Loan Parties shall deliver, commencing on
the date hereof and every week thereafter to the Administrative Agent, on or
before Tuesday of such week, a rolling 13-week forecast of cash flows of
Holdings and its Subsidiaries on a consolidated basis (the “Cash Flow
Forecast”) which shall include a rolling comparative analysis of the actual
cash flow for each completed week against the forecast for such week and an
explanation for any significant variances between such results and the
forecast, which shall be in form and detail satisfactory to the Administrative
Agent.  The Cash Flow Forecast may be
delivered 

 

3

 

electronically; provided that the
Loan Parties shall deliver paper copies of the Cash Flow Forecast to the
Administrative Agent upon request.

 

ii.             Monthly  Operating  Reports.  Holdings shall deliver, together with the
documents required to be delivered on a monthly basis to the Administrative
Agent pursuant to Section 6.01(d) of the Credit Agreement, a monthly
operating report setting forth the Loan Parties’ actual financial results on a
comparative basis against the forecast for such period, including an
explanation for any significant variances between such results and the Cash
Flow Forecast.

 

(f)            Inspection
Rights. 
Each Loan Party hereby confirms its obligations under Section 6.10
of the Credit Agreement to permit representatives and independent contractors
of the Administrative to visit and inspect any of its properties and make
examinations, in each case, subject to the terms and conditions set forth
therein.

 

(g)           Further
Assurances. Each Loan Party will,
and will cause its Subsidiaries to, at any time or from time to time execute
and deliver such further instruments, each in form and substance satisfactory
to the Administrative Agent, and take such further action as the Administrative
Agent may reasonably request, in each case further to effect the purposes of
this Forbearance Agreement, the Loan Documents and all documents, agreements
and instruments executed in connection therewith.

 

§6.  Conditions to Effectiveness.  The Administrative Agent, the Required
Lenders and the Loan Parties agree that the forbearance obligations of the
Administrative Agent and the Lenders herein shall be effective upon the
satisfaction of each of the following conditions precedent, each in form and
substance satisfactory to the Administrative Agent, on September 30, 2010
(the “Forbearance Effective Date”):

 

(a)           The Loan Parties,
the Required Lenders and the Administrative Agent shall have executed and
delivered to the Administrative Agent this Forbearance Agreement.

 

(b)           The applicable
Subsidiaries of the Loan Parties shall have entered into amendments, waivers,
forbearances or other modifications reasonably satisfactory to the
Administrative Agent of each loan agreement evidencing the existing
Indebtedness of such Subsidiaries of the Loan Parties described on Schedule
7.02 of the Credit Agreement and any other material Indebtedness of such
Subsidiaries (including, without limitation, the various loan agreements among
certain Subsidiaries of Holdings and The Royal Bank of Scotland plc, DVB Group
Merchant Bank (Asia) Ltd., Credit Suisse, AIG Commercial Equipment Finance, Inc,
Commerzbank AG and Berenberg Bank) deferring or forbearing any rights with
respect to the failure to make any payments of principal due under such loan
agreements to a date which is no earlier than the Forbearance Termination Date,
and the Administrative Agent shall have received a signed Officer’s
Certificate, certified by a duly authorized officer of Holdings to be true and
complete, attaching true, correct and complete fully executed copies of each
such amendment, forbearance, waiver and modification to each such loan
agreement.

 

(c)           The
Administrative Agent shall have received evidence that all corporate action
necessary for the valid execution and delivery by the Loan Parties of this
Forbearance Agreement and the performance of the transactions contemplated
hereby and thereby shall have been taken.

 

(d)           The
Administrative Agent shall have received payment for the fees, and expenses
including, without limitation, fees and expenses incurred by their counsel and
their Restructuring Advisors and other consultants, for which invoices or
estimates therefor have been provided to the Loan Parties on or prior to the
Forbearance Effective Date.

 

4

 

(e)           The
representations and warranties of each of the Loan Parties in the Credit
Agreement and the other Loan Documents shall be true and correct as of the
Forbearance Effective Date, except with respect to the occurrence of the
Specified Defaults referred to herein and to the extent that any of such
representations and warranties relate by their terms to a prior date they shall
be true and correct as of such prior date.

 

(f)            There shall
have occurred no Default or Event of Default other than the Specified Defaults.

 

§8.  No Present Claims; Release.  The Loan Parties hereby acknowledge and agree
that, as of the date hereof: (a) none of the Loan Parties or any of their
Affiliates has any claim or cause of action against the Administrative Agent or
any Lender (or any of their directors, officers, employees, attorneys or
agents); (b) none of the Loan Parties or any of their Affiliates, has
offset rights, counterclaims or defenses of any kind against any of their
obligations, indebtedness or liabilities to the Administrative Agent or any
Lender; and (c) the Administrative Agent and the Lenders have heretofore
properly performed and satisfied in a timely manner all of their obligations to
the Loan Parties and each of their Affiliates. 
The Administrative Agent and the Lenders wish (and the Loan Parties
agree) to eliminate any possibility that any past conditions, acts, omissions,
events, circumstances or matters would impair or otherwise adversely affect any
of the rights, interests, contracts, collateral security or remedies of the
Administrative Agent or the Lenders. 
Therefore, the Loan Parties, each on its own behalf and on behalf of
each of its respective successors and assigns, hereby waives, releases and
discharges the Administrative Agent and the Lenders and all of their directors,
officers, employees, attorneys and agents, from any and all claims, demands,
actions or causes of action on or before the date hereof and arising out of or
in any way relating to the Credit Agreement, the Loan Documents and any other
documents, instruments, agreements (including this Forbearance Agreement),
dealings or other matters connected with the Credit Agreement, including,
without limitation, all known and unknown matters, claims, transactions or
things occurring on or prior to the date of this Forbearance Agreement related
to the Credit Agreement.  The waivers,
releases, and discharges contained in this paragraph shall be effective
regardless of any other event that may occur or not occur prior to, or on or
after the date hereof.

 

§9.  Expenses.  The Loan Parties jointly and severally agree
to pay on demand all expenses incurred by the Administrative Agent and the
Lenders in connection with the transactions contemplated by this Forbearance
Agreement and in connection with any amendments or waivers (whether or not the
same become effective) hereof and all expenses incurred by the Administrative
Agent in connection with the enforcement of any rights hereunder, including,
without limitation, (i) the cost and expenses of preparing and duplicating
this Forbearance Agreement, (ii) the reasonable legal fees and all charges
for costs, expenses and disbursements of Bingham McCutchen LLP, special counsel
to the Administrative Agent, in connection with the transactions contemplated
by this Forbearance Agreement and any amendments, modifications, approvals, consents
or waivers hereunder,  and (iii) all
expenses, costs and liabilities, incurred by the Administrative Agent in
connection with (A) the interpretation and administration of and exercise,
enforcement or preservation of rights under this Forbearance Agreement against
any of the Loan Parties or any of their officers or employees party thereto or
the administration thereof whether before or after the occurrence of a Default
or Event of Default and (B) any litigation, proceeding or dispute whether
arising hereunder or otherwise, in any way related to the relationship of the
Administrative Agent with the Loan Parties.

 

§10.  Amendments.  This Forbearance Agreement shall not be
amended without the written consent of the Administrative Agent and the
Required Lenders.

 

§11.  No Waiver.  Except as otherwise expressly provided for in
this Forbearance Agreement, nothing in this Forbearance Agreement shall extend
to or affect in any way any of the rights or obligations 

 

5

 

of
the Loan Parties or any of the Administrative Agent’s or Lenders’ obligations,
rights and remedies arising under the Credit Agreement.  The Administrative Agent and the Lenders
shall not be deemed to have waived any or all of their rights or remedies with
respect to any Default or Event of Default existing on the date hereof or
arising hereafter.

 

§12.  Marshalling.  The Administrative Agent and the Lenders
shall not be required to marshal any present or future collateral security for
the Loan Parties’ obligations to the Administrative Agent and the Lenders under
the Credit Agreement or to resort to such collateral security or other
assurances of payment in any particular order, and all of their rights in
respect of such collateral security shall be cumulative and in addition to all
other rights, however existing or arising. 
To the extent that they lawfully may, the Loan Parties hereby agree that
they will not invoke any law relating to the marshalling of collateral which
might cause delay in or impede the Administrative Agent’s or any Lenders’
rights under any document, agreement or instrument evidencing or securing the
Loan Parties’ obligations to the Administrative Agent and the Lenders under the
Credit Agreement and, to the extent that it lawfully may, each of the Loan
Parties hereby irrevocably waives the benefits of all such laws.

 

§13.  Miscellaneous.

 

(a)           THIS
FORBEARANCE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK, EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW (OTHER THAN THE NEW YORK GENERAL OBLIGATIONS LAW §5-1401 AND
§5-1402).

 

(b)           This
Forbearance Agreement may be executed in counterparts (and by different parties
hereto in different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract.  Delivery of an executed counterpart of a
signature page of this Forbearance Agreement by facsimile, telecopy or
other electronic transmission shall be effective as delivery of a manually
executed counterpart of this Forbearance Agreement.

 

(c)           This
Forbearance Agreement shall constitute a Loan Document under the Credit
Agreement; the failure to comply with the covenants contained herein shall
constitute an Event of Default under the Credit Agreement; and all obligations
included in this Forbearance Agreement (including, without limitation, all
obligations for the payment of principal, interest, fees, and other amounts and
expenses) shall constitute obligations under the Credit Agreement and secured
by the collateral security for the Obligations.

 

(d)           Wherever
possible, each provision of this Forbearance Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Forbearance Agreement shall be prohibited by or rendered
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provisions or the remaining provisions of this Forbearance Agreement.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

6

 

If
you are in agreement with the foregoing, please sign and return the enclosed
copy of this Forbearance Agreement to the Administrative Agent.

 

 

	
   

  	
  The
  Borrowers:

  
	
   

  	
   

  
	
   

  	
  ALBEMARLE
  MARITIME CORP.

  
	
   

  	
  ARDEN
  MARITIME CORP.

  
	
   

  	
  AVON
  MARITIME CORP.

  
	
   

  	
  BIRNAM
  MARITIME CORP.

  
	
   

  	
  BRISTOL
  MARITIME CORP.

  
	
   

  	
  CHESTER
  SHIPPING CORP.

  
	
   

  	
  CUMBERLAND
  NAVIGATION CORP.

  
	
   

  	
  DARBY
  NAVIGATION CORP.

  
	
   

  	
  DOVER
  MARITIME CORP.

  
	
   

  	
  ELROD
  SHIPPING CORP.

  
	
   

  	
  EXETER
  SHIPPING CORP.

  
	
   

  	
  FRANKFORT
  MARITIME CORP.

  
	
   

  	
  GLENWOOD
  MARITIME CORP.

  
	
   

  	
  HANSEN
  SHIPPING CORP.

  
	
   

  	
  HARTLEY
  NAVIGATION CORP.

  
	
   

  	
  HENLEY
  MARITIME CORP.

  
	
   

  	
  HUDSON
  MARITIME CORP.

  
	
   

  	
  JESSUP
  MARITIME CORP.

  
	
   

  	
  MONTROSE
  MARITIME CORP.

  
	
   

  	
  OLDCASTLE
  SHIPPING CORP.

  
	
   

  	
  QUENTIN
  NAVIGATION CORP.

  
	
   

  	
  RECTOR
  SHIPPING CORP.

  
	
   

  	
  REMSEN
  NAVIGATION CORP.

  
	
   

  	
  SHEFFIELD
  MARITIME CORP.

  
	
   

  	
  SHERMAN
  MARITIME CORP.

  
	
   

  	
  STERLING
  SHIPPING CORP.

  
	
   

  	
  STRATFORD
  SHIPPING CORP.

  
	
   

  	
  VEDADO
  MARITIME CORP.

  
	
   

  	
  VERNON
  MARITIME CORP.

  
	
   

  	
  WINDSOR
  MARITIME CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Tara DeMakes

  
	
   

  	
  Name:
  

  	
  Tara
  DeMakes

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
				

 

 

	
   

  	
  Holdings:

  
	
   

  	
   

  
	
   

  	
  TBS
  INTERNATIONAL LIMITED

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Tara DeMakes

  
	
   

  	
  Name:
  

  	
  Tara
  DeMakes

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
  TBS
  INTERNATIONAL PLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Tara DeMakes

  
	
   

  	
  Name:

  	
  Tara
  DeMakes

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  The
  Administrative Borrower:

  
	
   

  	
   

  	
   

  
	
   

  	
  TBS
  SHIPPING SERVICES INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Tara DeMakes

  
	
   

  	
  Name:
  

  	
  Tara
  DeMakes

  
	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  The
  Guarantors:

  
	
   

  	
   

  	
   

  
	
   

  	
  TBS U.S. ENTERPRISES LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  TBS SHIPPING SERVICES INC., its
  sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
  /s/
  Tara DeMakes

  
	
   

  	
   

  	
  Name:
  

  	
  Tara
  DeMakes

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  TBS ENERGY LOGISTICS L.P.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:
  TBS U.S. ENTERPRISES LLC, its
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  TBS SHIPPING SERVICES INC., its
  sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Tara DeMakes

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Tara
  DeMakes

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Secretary

  
								

 

 

	
   

  	
  The
  Guarantors (continued):

  
	
   

  	
   

  
	
   

  	
  TBS LOGISTICS INCORPORATED

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Tara DeMakes

  
	
   

  	
  Name:
  

  	
  Tara
  DeMakes

  
	
   

  	
  Title:
  

  	
  Assistant
  Secretary

  
	
   

  	
   

  
	
   

  	
  ROYMAR SHIP MANAGEMENT, INC.

  
	
   

  	
  TBS SHIPPING SERVICES INC.

  
	
   

  	
  AZALEA SHIPPING & CHARTERING, INC.

  
	
   

  	
  COMPASS CHARTERING CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Tara DeMakes

  
	
   

  	
  Name:
  

  	
  Tara
  DeMakes

  
	
   

  	
  Title:
  

  	
  Secretary

  
	
   

  	
   

  
	
   

  	
  TBS
  INTERNATIONAL PLC

  
	
   

  	
  TBS
  INTERNATIONAL LIMITED

  
	
   

  	
  TBS
  HOLDINGS LIMITED

  
	
   

  	
  WESTBROOK HOLDINGS LTD.

  
	
   

  	
  TRANSWORLD
  CARGO CARRIERS, S.A.

  
	
   

  	
  MERCURY
  MARINE LTD. (F/K/A TBS LOGISTICS LTD.)

  
	
   

  	
  TBS
  WORLDWIDE SERVICES INC.

  
	
   

  	
  BEEKMAN
  SHIPPING CORP.

  
	
   

  	
  FAIRFAX
  SHIPPING CORP.

  
	
   

  	
  LEAF
  SHIPPING CORP.

  
	
   

  	
  PACIFIC
  RIM SHIPPING CORP.

  
	
   

  	
  TBS
  AFRICAN VENTURES LIMITED

  
	
   

  	
  TBS DO SUL LTD.

  
	
   

  	
  TBS EUROLINES, LTD.

  
	
   

  	
  TBS
  HOLDINGS LIMITED

  
	
   

  	
  TBS
  LATIN AMERICA LINER, LTD.

  
	
   

  	
  TBS
  MIDDLE EAST CARRIERS, LTD.

  
	
   

  	
  TBS
  NORTH AMERICA LINER LTD.

  
	
   

  	
  TBS OCEAN CARRIERS, LTD.

  
	
   

  	
  TBS PACIFIC LINER, LTD.

  
	
   

  	
  TBS WAREHOUSE & DISTRIBUTION GROUP LTD.

  
	
   

  	
  TBS WAREHOUSE & EQUIPMENT HOLDINGS LTD.

  
	
   

  	
  TBS LOGISTICS INCORPORATED

  
	
   

  	
  TBSI NEW SHP DEVELOPMENT CORP.

  
	
   

  	
  TBS MINING LIMITED

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Tara DeMakes

  
	
   

  	
  Name:
  

  	
  Tara
  DeMakes

  
	
   

  	
  Title:

  	
  Attorney-in-Fact

  
				

 

 

	
   

  	
  The
  Administrative Agent:

  
	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Robert L. Wallace, Jr.

  
	
   

  	
  Name:
  Robert L. Wallace, Jr.

  
	
   

  	
  Title:
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  The
  Required Lenders:

  
	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert L. Wallace, Jr.

  
	
   

  	
  Name:
  Robert L. Wallace, Jr.

  
	
   

  	
  Title:
  Senior Vice President

  

 

 

	
   

  	
  The
  Required Lenders (continued):

  
	
   

  	
   

  
	
   

  	
  DVB GROUP MERCHANT BANK (ASIA) LTD.,

  
	
   

  	
  as
  co-Syndication Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Maarten Vis

  
	
   

  	
  Name:
  Maarten Vis

  
	
   

  	
  Title:
  Director

  

 

 

	
   

  	
  CITIBANK, N.A., as co-Syndication Agent
  and a Lender

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Mack McElwain

  
	
   

  	
  Name:
  Mack McElwain

  
	
   

  	
  Title:
  Vice President

  

 

 

	
   

  	
  KEYBANK NATIONAL ASSOCIATION, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Richard B. Soulsberry

  
	
   

  	
  Name:  Richard B. Soulsberry

  
	
   

  	
  Title:  Vice President

  

 

 

	
   

  	
  CAPITAL
  ONE LEVERAGE FINANCE CORP., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Thomas F. Furst

  
	
   

  	
  Name:  Thomas F. Furst

  
	
   

  	
  Title:  Vice President

  

 

 

	
   

  	
  WEBSTER BANK NATIONAL ASSOCIATION, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Stephen Corcorin

  
	
   

  	
  Name:  Stephen Corcorin

  
	
   

  	
  Title:  Senior Vice President

  

 

 

	
   

  	
  COMERICA BANK, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Michael Krzystowczyk

  
	
   

  	
  Name:  Michael Krzystowczyk

  
	
   

  	
  Title:
  Senior Vice President

  

 

 

Schedule A

 

1.               Loan Agreement dated March 29,
2007 by and among Argyle Maritime Corp., Caton Maritime Corp., Dorchester
Maritime Corp., Longwoods Maritime Corp., McHenry Maritime Corp., and Suswyck
Maritime Corp., as joint and several Borrowers, the Lenders party thereto, and
The Royal Bank of Scotland plc, as Agent, Security Trustee and Swap Bank.

 

2.               Guarantee Facility Agreement
dated March 29, 2007 by and between Argyle Maritime Corp., Caton Maritime
Corp., Dorchester Maritime Corp., Longwoods Maritime Corp., McHenry Maritime
Corp., and Suswyck Maritime Corp., as joint and several Obligors, and The Royal
Bank of Scotland plc, as Issuer.

 

3.               Loan dated as of December 7,
2007 by and among Claremont Shipping Corp and Yorkshire Shipping Corp., as
Borrowers, and Credit Suisse, as Lender.

 

4.               Loan Agreement dated as of January 16,
2008 by and among Bedford Maritime Corp., Brighton Maritime Corp., Hari
Maritime Corp., Prospect Navigation Corp., Hancock Navigation Corp., Columbus
Maritime Corp. and Whitehall Marine Transport Corp., as joint and several
Borrowers, TBS International Limited, as Guarantor, the Lenders party thereto,
DVB Group Merchant Bank (Asia) Ltd., as Facility Agent and Security Trustee,
The Governor and Company of the Bank of Ireland, as Payment Agent, and DVB Bank
AG, The Governor and Company of the Bank of Ireland and Natixis, as Swap Banks.

 

5.               Loan Agreement dated as of February 29,
2008 by and among Amoros Maritime Corp., Lancaster Maritime Corp., and Chatham
Maritime Corp., as Borrowers, TBS International Limited, as Parent Guarantor,
and AIG Commercial Equipment Finance, Inc., as Lender.

 

6.               Loan Agreement dated as of June 2,
2008, by and between Dyker Maritime Corp., as Borrower, and Commerzbank AG, as
Lender.

 

7.               Loan Agreement dated June 19,
2008, by and between Grainger Maritime Corp., as Borrower, and Joh. Berenberg,
Gossler & Co. KG as Lender.

 

 

Schedule B

 

AlixPartners

Alvarez &
Marsal

FTI
Consulting

Miller
Buckfire

The
Blackstone Group LP

Zolfo
CooperEx-10.2

 

	
  To :

  	
  (1)

  	
  TBS International plc

  
	
   

  	
   

  	
  Arthur Cox Building

  
	
   

  	
   

  	
  Earls Fort Terrace

  
	
   

  	
   

  	
  Dublin 2

  
	
   

  	
   

  	
  Ireland

  
	
   

  	
   

  	
   

  
	
   

  	
  (2)

  	
  Argyle Maritime Corp.

  
	
   

  	
   

  	
  Caton Maritime Corp.

  
	
   

  	
   

  	
  Dorchester Maritime Corp.

  
	
   

  	
   

  	
  Longwoods Maritime Corp.

  
	
   

  	
   

  	
  McHenry Maritime Corp.

  
	
   

  	
   

  	
  Sunswyck Maritime Corp.

  
	
   

  	
   

  	
  c/o Suite 306

  
	
   

  	
   

  	
  Commerce Building

  
	
   

  	
   

  	
  1 Chancery Lane

  
	
   

  	
   

  	
  Hamilton HM12

  
	
   

  	
   

  	
  Bermuda

  
	
   

  	
   

  	
   

  
	
   

  	
  (3)

  	
  TBS International Limited

  
	
   

  	
   

  	
  Suite 306,

  
	
   

  	
   

  	
  Commerce Building

  
	
   

  	
   

  	
  1 Chancery Lane

  
	
   

  	
   

  	
  Hamilton HM12

  	
   

  
	
   

  	
   

  	
  Bermuda

  	
  September 2010

  

 

Dear Sirs

 

Loan Agreement dated 29 March 2007 as
amended by a side letter dated 24 July 2007, a supplemental letter
agreement dated 26 March 2008, a supplemental agreement dated 27 March 2009,
a side letter dated 27 May 2009, a side letter dated 3 September 2009,
a side letter dated 31 December 2009, a supplemental agreement dated 7 January 2010,
a side letter dated 28 February 2010, a side letter dated 31 March 2010,
an amending and restating agreement dated 6 May 2010 and a supplemental
letter agreement dated 16 August 2010 each 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
banks and financial institutions listed therein as Lenders, (iii) the
Royal Bank of Scotland plc as Mandated Lead Arranger and (iv) the Royal
Bank of Scotland plc as Bookrunner, Agent, Security Trustee and Swap Bank
relating to a term loan facility of US$150,000,000 (together the “Loan
Agreement”)

 

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

 

We refer to the letter of 24th of September 2010
of TBS International plc (the “TBS Request Letter”)
(i) notifying us that various companies within the TBS Group will be
suspending the payment of certain upcoming scheduled principal instalments
owing in respect of certain indebtedness of such companies as more particularly
described therein for a period of 45 days beginning on 30th September 2010
(the “Payment Suspension”) and (ii) requesting
a waiver of the Events of Default arising under the Loan Agreement resulting
from the Payment Suspension.

 

 

We acknowledge that the payment described in the
TBS Request Letter owed to Commerzbank was due and payable as of September 2,
2010 and such payment was made on September 30, 2010 (the “Commerzbank Payment”) and your request that
we waive the Events of Default arising from the failure to make the Commerzbank
Payment on its due date (the “Commerzbank
Payment Default”).

 

(A)                              We hereby confirm on behalf of the Lenders their
agreement to waive the Events of Default arising from the Payment Suspension
and the Commerzbank Payment Default under clause 19.1(g) (ix) and
clause 19.1(f)(i) and (ii) of the Loan Agreement subject to the
fulfilment of the following conditions:-

 

1.                                       You provide satisfactory evidence that (i) each
of the lenders under the facilities (the “Schedule 1 Facilities”)
listed in schedule 1 to the TBS Request Letter (attached hereto as Appendix I)
have consented to the Payment Suspension and the Commerzbank Payment Default
(the “Schedule 1 Consents”), and (ii) (a) any
other lenders to the New Corporate Guarantor or subsidiaries of the New Corporate
Guarantor not listed in schedule 1 to the TBS Request Letter, excluding lenders
to the Loan Agreement and (b) any swap providers under any of the swap
arrangements of the New Corporate Guarantor or subsidiaries, as necessary; both
(a) and (b) inclusive have consented to the Payment Suspension and
the Commerzbank Payment Default or waived cross default provisions as
appropriate (the “Other Lenders’ Consents”).

 

2.                                       We receive from you a copy of this letter duly
acknowledged by each of the Borrowers, the New Corporate Guarantor and the
Corporate Guarantor.

 

(B)                                In the event you are unable to obtain any of the
Schedule 1 Consents and/or the Other Lenders’ Consents (and therefore you are
unable to fulfil the condition in (A) 1. above) but you decide not to pay
the principal instalments falling due under the Schedule 1 Facilities during
the 45 day period and you request the forbearance of your lenders and swap
providers to them exercising their rights under the respective facilities and
swap arrangements arising from the corresponding payment default under the
Schedule 1 Facilities, we confirm on behalf of the Lenders their agreement to
waive the Events of Default arising from such payment default and the
Commerzbank Payment Default under Clause 19.1(f)(i), and Clause 19.1(f)(ii) of
the Loan Agreement and to waive the Events of Default arising from the Payment
Suspension and the Commerzbank Payment Default under Clause 19.1(g)(ix) and
Clause 19.1(f)(i) and (ii) of the Loan Agreement subject to the
following conditions:

 

1.                                       You provide satisfactory evidence that all lenders
under bilateral facilities, all syndicates under syndicated facilities and all
swap facilities to the New Corporate Guarantor and/or its subsidiaries have
confirmed their forbearance in respect of the payment default and the
Commerzbank Payment Default.

 

2.                                       The condition referred to in (A).2 above is fulfilled.

 

(C)                                By signing the acknowledgement to this letter, each of
the Corporate Guarantor and the New Corporate Guarantor hereby agree to the perform
the following covenants and acknowledge and agree that failure to perform such
covenants shall result in a termination of the waiver set forth above and an
Event of Default under the Loan Agreement:-

 

 

1.                                       The New Corporate Guarantor to provide 13 week cash
flow statements showing in reasonable detail cash receipts and disbursements to
be updated and provided on a weekly basis;

 

2.                                       The New Corporate Guarantor to provide within 35 days
from the end of each calendar month (in addition to the monthly management
information to be provided under clause 11.6(d) of the Loan Agreement)
monthly financials including income statements, balance sheets, cash flows and
key performance indicators for the business.

 

3.                                       The New Corporate Guarantor to appoint a financial
advisor to assist it with the long term restructuring and negotiations with its
various lenders.  The financial advisor
will be selected from the list attached hereto as Appendix II.

 

In the event that any of the conditions
referred to in (A) and (B) above are not fulfilled, or if the
covenants in (C) above are not fulfilled, the Events of Default referred
to in (A) and (B) shall not be waived and the Lenders shall remain
entitled to exercise their rights under the Finance Documents arising
therefrom.  Furthermore the Lenders
reserve all their rights and remedies under the Finance Documents in respect of
any other Events of Default which may arise or have arisen.

 

Other than as set out in this letter the
provisions of the Loan Agreement shall remain unchanged and in full force and
effect.

 

This letter shall constitute a Finance Document
for the purposes of the Loan Agreement.

 

The provisions of clause 31 (Law and
Jurisdiction) of the Loan Agreement shall apply to this letter as if set out in
full but so that the references to “this agreement” are amended to read “this
letter”.

 

	
   

  	
  Yours
  faithfully

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  The
  Royal Bank of Scotland plc

  	
   

  
	
   

  	
  (as
  Agent)

  	
   

  
	
   

  	
  /s/
  [illegible]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted and agreed

  	
   

  
	
  for and on behalf of

  	
   

  
	
   

  	
   

  
	
  TBS International Limited

  	
   

  
	
  (as Corporate Guarantor)

  	
   

  
	
  /s/ Ferdinand V. Lepere

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  For and on behalf of

  	
   

  
	
   

  	
   

  
	
  Argyle Maritime Corp.

  	
   

  
	
  Caton Maritime Corp.

  	
   

  
	
  Dorchester Maritime Corp.

  	
   

  
	
  Longwoods Maritime Corp.

  	
   

  
	
  McHenry Maritime Corp.

  	
   

  
	
  Sunswyck Maritime Corp.

  	
   

  
	
  /s/ Ferdinand V. Lepere

  	
   

  
				

 

 

	
  For and on behalf of

  	
   

  
	
   

  	
   

  
	
  TBS International plc

  	
   

  
	
  (as New Corporate Guarantor)

  	
   

  
	
  /s/ Ferdinand V. Lepere

  	
   

  

 

 

Appendix
I

 

TBS
Request Letter

 

 

September 24, 2010

 

The Royal Bank of Scotland plc

Shipping Business Center

5-10 Great Tower Street

London EC3P 3HX

Fax: No:+44 207 085 7142

Attn: Transaction and Portfolio Management

 

RE; Request for waiver
under the Loan Agreement (as defined below)

 

Reference
is hereby made to the Amended and Restated Loan Agreement dated 6 May 2010 among  (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 banks and financial institutions listed
therein as Lenders, (iii) the Royal Bank of Scotland plc as Mandated Lead
Arranger and (iv) the Royal Bank of Scotland plc as Bookrunner, Agent,
Security Trustee and Swap Bank relating to a term loan facility of
US$150,000,000 (as amended to date, the “Loan Agreement”). Capitalized
terms defined in the Loan Agreement and not otherwise defined herein arc used
herein as therein defined.

 

We
hereby notify you that the Borrowers will be suspending the payment of certain
upcoming scheduled principal installments owing in respect of certain Indebtedness
of such persons, as more particularly described on Schedule 1 hereto, for a
period of 45 days beginning on September 30, 2010 (the “Payment
Suspension”). The Payment Suspension will result in one or more Events of
Default occurring under the Loan Agreement, including under
Section 19.1(f) of the Loan Agreement (any such Event of Default
resulting from the Payment Suspension. the “Specified Events of Default”).

 

In
order to allow time for the Borrowers and affiliates to work with their various
lenders, including the Agent and the Lenders, towards a mutually agreeable
solution on their outstanding indebtedness, we hereby request that the Agent
and the other Lenders under the Loan Agreement waive the Specified Events of
Default.

 

By
counter-signing this letter, the Agent and the Lenders agrees to waive the
Specified Events of Default.

 

[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 

  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Acknowledged and Agreed.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The Royal Bank of Scotland plc,

  as Agent and Lender

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
                                                                        ,
  as Lender

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Name:

  
	
   

  	
  Title:

  	
   

  	
   

  
								

 

 

Appendix
II

 

Financial
Advisor

 

1.              J. Alix Partners

 

2.              Blackstone

 

3.              FTI Consulting

 

4.              Zolfo Cooper

 

5.              Alvarez & Marsal

 

6.              Miller Buckfire

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00179-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00179-of-00352.parquet"}]]